EnerCom: Investor Presentation, August 2018 NYSE: FTK 1
ABOUT FLOTEK: WHO WE ARE NYSE: FTK Flotek develops and delivers Recent Stock Price: 2.01 prescriptive chemistry-based Recent Market Cap: 120 mil. technology, including specialty 30 Day Average Trading Volume: 668,530 shares…
STRATEGIC INITIATIVES UPDATE Divest Drilling Technologies and Production Technologies segments; exit non-core business lines. Dedicated focus to drive lower and control corporate and segment SG&A. Protect borrowing capacity, maximize…
BUSINESS UPDATE Energy Chemistry Technologies (ECT) Reiterate guidance of sequential 3Q18 top line growth in the 18% - 23% range and flat-to-up EBITDA margins. Strong July revenues support outlook, with total ECT July revenues…
OPERATING SEGMENTS Energy Chemistry Technologies (ECT) Consumer and Industrial Chemistry Flotek's Energy Chemistry Technologies division Technologies (CICT) provides oilfield specialty chemicals and logistics Floteks Consumer and…
International Reach LOCATIONS AND Calgary, AB Canada, Offices/Chemistry Lab GLOBAL CLIENT REACH Abu Dhabi, UAE, Regional Distribution Dubai, UAE, Sales Office Netherlands, Sales Office Y-TEC Collaboration in Argentina Collaboration…
MAINTAINING BALANCE SHEET FLEXIBILITY Total Debt Balance Over Time The Company was well positioned entering 2018 to fund 70.0 strategic citrus inventory purchases, channel to market 60.0 Ending Debt Level ( mil.) 50.0…
ENERGY CHEMISTRY TECHNOLOGIES (ECT) 10
FAVORABLE MACRO TRENDS Industry recovery has increased activity levels across the U.S. EIA DPR Completions 2,400 Technology and innovation are reducing break-evens. EIA, Monthly DPR Regions Completions Drill times, spacing,…
CHEMISTRY OFFERINGS, FOR THE LIFECYCLE Initial frac and stimulation Remediation and re-treatment We have 50+ formulations of Complex nano-Fluid (CnF) technologies, and growing. Of which, 30+ are regularly commercialized due to…
ECT: CLIENT TREND ANALYSIS Major* Domestic Client Base Average Revenue per Domestic Client Domestic ECT Revenue per Client Major* DOM Clients 1Q15 2Q15 3Q15 4Q15 1Q16 2Q16 3Q16 4Q16 1Q17 2Q17 3Q17 4Q17 1Q18 2Q18 *Major…
EXPANSIVE FOOTPRINT TO SERVE OUR CLIENTS Marcellus/Utica Regional Support Canada Research & Innovation Center Calgary Regional Support Calgary, CA Canonsburg, PA Mid-Con Regional Support & Manufacturing Texas Gulf Coast…
COMPLEX NANO-FLUID (CnF) TECHNOLOGY VS. CONVENTIONAL SURFACTANT: INCREASING CONNECTIVITY CnF Composition Conventional Surfactant SOLVENT CORE Made from orange oils to SURFACTANT increase fluid mobility COMPONENTS MULTIPLE SURFACTANT TYPES…
CnF: DELIVERING CAPILLARY PRESSURE, DEMULSIFICATION & SOLVENCY TO THE RESERVOIR Water Phase Hydrocarbon Layer Reservoir Face CnF traveling CnF CnF delivery to through the interaction with reservoir fluids and reservoir matrix…
DELAWARE BASIN: WINKLER, WARD & REEVES COUNTIES Wolfcamp A: Breaking Out of the Plateau Avg. 3 month cumulative BOE vs Avg. proppant intensity by year Flotek 2017 PCM optimized fluid design 3 month cumulative BOE per 1000…
DELAWARE BASIN: WINKLER, WARD & REEVES COUNTIES Wolfcamp B: More Favorable GOR with CnF GasRatio Gas Oil Oil Ratio CnF Non CnF Type Curve Cubic feet/bbl 33 CnF wells 393 Non CnF wells Wells with first prod. date of…
DELAWARE BASIN: WINKLER, WARD & REEVES COUNTIES Wolfcamp B: Breaking out of the Plateau Avg. 3 month cumulative BOE vs. Avg. proppant intensity by year 3 month cumulative BOE per 1000 Average 2012-2018 37% Average 2012-2018…
CONSUMER & INDUSTRIAL CHEMISTRY TECHNOLOGIES (CICT) Citrus flavor molecules have been in short supply, creating global market opportunities with beverage, flavor and fragrance companies. Consumers are demanding natural flavors that…
CICT IS IDEALLY POSITIONED Vertical Opportunities Our ability to utilize the entire citrus molecule, opens the door for new opportunities in markets Oil & Gas we have not yet penetrated. We have the ability to leverage increasing…
CICT MOVING ALONG THE VALUE CHAIN We are positioned to begin moving further across the value chain, where other components can be utilized in higher margin end markets. ECT demand of d-Limonene for CnF is only one component of the…
COMMITMENT TO INNOVATION & PROTECTING OUR POSITIONING 26
COMMITMENT TO INNOVATION: PATENT PORTFOLIO Total Patent Assets Florida Chemical Our patent portfolio continues to grow, with six patents Flotek Industries, Company, Inc., 3 Inc., 5 granted in 2017. Fifteen patents have been granted…
PRODUCT LIFE CYCLE, DELIVERING TECHNOLOGY TO INDUSTRY 2017 CnF Sales by Formulation Year Floteks investments in new chemistry technology have 50.0% 45.0% been a differentiator for our energy clients. Contribution to Annual…
APPENDIX 29
CnF: INCREASING PRODUCTION IN THE DELAWARE BASIN In a Delaware Basin Case Study, CnF wells showed 1-Year Avg. Daily Oil Production Rates 100 a 12% increase and a 76% increase in daily oil 90 Average 365-Day Oil Production 76%…
CnF: UNLOCKING OIL IN THE MIDLAND BASIN In a Midland Basin case study analyzing more than 425 wells targeting the Wolfcamp B in Martin, Midland and Upton Counties, CnF treated wells meaningfully outperformed offset wells (adjusted for…
PRESCRIPTIVE CHEMISTRY MANAGEMENT (PCM ) OPPORTUNITY Our customized PCM offering delivers significant value to our clients by establishing a complete chemistry. PCM creates more permanent relationships and CnF selling…
GLOBAL ECT PRODUCT TRENDS Product portfolios in ECT have shown resiliency over Conventional Chemistry Revenues vs. Completions CnF Revenues vs. Completions the past 4 years. Conventional ECT Revenue (Left Axis) US EIA DPR Completions…
CnF: VALUE PROPOSITION The line of Complex nano-Fluid technologies offers a number of performance-enhancing features including solvency, contact angle which impacts wettability, outstanding demulsification properties, reduction of…
RECONCILIATION TO NON-GAAP MEASURES Schedule 1 Schedule 2 Flotek Industries, Inc. Flotek Industries, Inc. Unaudited Reconciliation of Non-GAAP Items and Non-Cash Items Impacting Earnings Unaudited Reconciliation of Non-GAAP Items and…
CONTACT US CORPORATE HEADQUARTERS: 10603 W. Sam Houston Pkwy. N. Suite 300 Houston, TX 77064 MATTHEW MARIETTA Executive Vice President Finance, Corporate Development Flotek Industries Email: MMariettaFlotekind.com Phone: (713) 726-9911…
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