Flotek Industries Profile
Flotek Industries, Inc. operates as a technology-driven, specialty green chemistry and data technology company.
The company helps customers across industrial, commercial, and consumer markets improve their environmental performance. The company serves specialty chemistry needs for both domestic and international energy markets.
The company serves specialty chemistry needs for both domestic and international energy markets. The company’s Chemistry Technologies (CT) segment designs, develops, manufactures, packages and distributes green, specialty chemicals that help their customers meet their environmental, social and governance (ESG) and operational goals, aiming to enhance the profitability of hydrocarbon producers.
The company’s Data Analytics (DA) segment aims to enable users to maximize the value of their hydrocarbon associated processes by providing analytics associated with their hydrocarbon streams in seconds rather than minutes or days.
On February 2, 2022, the company entered into a long-term supply agreement with ProFrac Services, LLC (the Initial ProFrac Agreement).
Segments
The company operates through two segments, CT and DA, which are both supported by its Research & Innovation (R&I) advanced laboratory capabilities.
Chemistry Technologies
The company’s CT segment provides sustainable, optimized chemistry solutions that maximize its customer’s value by elevating their ESG performance, lowering operational costs, and delivering improved return on invested capital. The company’s proprietary green chemistries, specialty chemistries, logistics, and technology services enable its customers to pursue improved efficiencies and performance throughout the life cycle of its desired chemical applications program. The company designs, develops, manufactures, packages, distributes and markets optimized chemistry solutions that accelerate existing sustainability practices to reduce the environmental impact of energy on the air, water, land and people.
Customers of the CT segment include those of energy related markets, such as the company’s related party ProFrac Services, LLC, with whom it has a long-term supply agreement, as well as consumer and industrial applications. Major integrated oil and gas companies, oilfield services companies, independent oil and gas companies, national and state-owned oil companies, geothermal energy companies, solar energy companies and advanced alternative energy companies benefit from the company’s best-in-class technology, field operations, and continuous improvement exercises that go beyond existing sustainability practices.
Data Analytics
The DA segment delivers real-time information and insights to the company customers to enable optimization of operations and reduction of emissions and their carbon intensity. Real-time composition and physical properties are delivered simultaneously on their refined fuels, natural gas liquids (NGLs), natural gas, crude oil, and condensates using the industry’s only field-deployable, in-line optical near-infra-red spectrometer that generates no emissions. The instrument's response is processed with advanced chemometrics modeling, artificial intelligence, and machine learning algorithms to deliver these valuable insights every 15 seconds.
The company’s customers in North America include the supermajors, some of the largest midstream companies and large gas processing plants, as well as ProFrac Services, LLC, to whom twenty JP3 units are expected to be deployed in 2023. The company has developed a line of Verax analyzers for deployment internationally in hazardous locations and harsh weather conditions.
Research & Innovation
R&I supports the acceleration of ESG solutions for both business segments through green chemistry formulation and Environmental Protection Agency (EPA) regulatory guidance, technical support, basin and reservoir studies, data analytics and new technology projects. The purpose of R&I is to supply the company’s business segments with enhanced products and services that generate revenues, while advising company management on opportunities concerning technology, environmental and industry trends. The R&I facilities support advances in chemistry performance, detection, optimization and manufacturing.
Product Demand and Marketing
Demand for the company’s energy-focused products and services in both the CT and DA segments is driven by energy supply and demand, as well as operator desire to deploy improved ESG solutions. Demand for the company’s energy chemistry products and services is dependent on levels of conventional and unconventional oil and natural gas well drilling and completion activity, both domestically and internationally.
The company markets its products to end user customers using both direct and indirect sales channels. These sales channels are accessed using a mix of in-house sales professionals, as well as certain contractual agency agreements. The company also actively participates in industry trade shows, both live and virtual, publishes articles in industry publications, and participates in podcasts and creates other online content to educate the market on its product and service offerings. While the company’s primary marketing efforts remain focused in North America, resources and efforts are also deployed on emerging international markets, especially in the Middle East.
Research and Development
For the year ended December 31, 2022, the company incurred $4.4 million on research and development expense.
Intellectual Property
The company endeavors to protect its intellectual property, both within and outside of the U.S. The company considers patent protection for all products and methods deemed to have commercial significance and that may qualify for patent protection. The decision to pursue patent protection is dependent upon several factors, including whether patent protection can be obtained, cost effectiveness, and alignment with operational and commercial interests. As of December 31, 2022, the company had 136 granted patents, including 111 patents in its CT segment and 24 patents in its DA segment. In addition, the company had 13 pending patent applications filed in the U.S. and abroad, including 9 for the CT segment and 4 for the DA segment. The patents of the CT segment cover various chemical compositions and methods of use. The patents of the DA segment cover various systems and methods of use for online determination of chemical composition and data analysis. In addition, the company had 50 registered trademarks in the U.S. and abroad, covering a variety of its goods and services.
History
Flotek Industries, Inc. was initially incorporated under the laws of the province of British Columbia in 1985. In 2001, the company changed its corporate domicile to the state of Delaware.
