Attached files
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| 8-K - FORM 8-K - FLOTEK INDUSTRIES INC/CN/ | d8k.htm |
 Exhibit 99.1 |
  Flotek
Investor & Analyst Days May 16 –
18, 2011
Houston & Oklahoma City
©
2011, Flotek Industries. All Rights Reserved
2 |
 John
Chisholm, Chairman and President 3 |
 Disclaimer: Forward Looking Statements
Certain statements and information included in this presentation
constitute “forward–looking statements”
within the meaning of the
Private Securities Litigation Reform Act of 1995. These statements
are based on certain assumptions and analyses made by the
Company’s management in light of its experience and its perception
of historical trends, current conditions, expected future developments
and other factors it believes are appropriate under the circumstances.
These statements involve known and unknown risks and
uncertainties, some of which are outlined in the Company’s most
recent 10-K and subsequent 10-Qs, which may cause the actual
performance of Flotek to be materially different from any future
results expressed or implied in this presentation and the forward-
looking statements. Flotek undertakes no obligation to update any of
its forward-looking statements for any reason.
April 11, 2011
John Chisholm, Chairman and President
©
2011, Flotek Industries. All Rights Reserved
4
Presentation to the Independent Petroleum Association of America New York Oil & Gas
Investment Symposium
|
 •Overview & Business Strategy
•Flotek’s Technology Portfolio& Business Drivers
•Chemical Technologies and Related Logistics Services
•Drilling Technologies
•Artificial Lift Technologies
•Financial Overview
•Capital Structure Review
•2011 Objectives
•Conclusions
5
Flotek Today |
 Flotek’s Technology Portfolio
•
Houston-based oilfield services company with focus on value-
added drilling, completion and production products.
•
Chemical
Technologies
and
Related
Logistics
Services
add
value in the drilling, completion and production stages of oil and gas
wells.
•
Drilling
Technologies
provide
solutions
during
the
drilling
stage of
oil and gas wells from motors and actuated tools to our best-in-class
Teledrift technologies.
•
Artificial
Lift
Technologies
address a number of production
challenges for oil and gas companies.
Our diverse mix of products and services touch every stage of the life
cycle of a well. And, while each technology requires unique technical
expertise, all of our technologies share a commitment to our vision to
provide best-in-class technology, cutting-edge innovation to address
the ever-changing challenges of our customers and exceptional
customer service.
6 |
 Flotek’s 2011 Business Drivers
•
Focus on improved marketing efforts
•
Increased focus on depth of Flotek market combined with expanding breadth of
market in drilling technologies segment
•
Grow exposure to end user/beneficiaries of Flotek chemical technologies.
•
Look
for
select
“new
markets”
for artificial lift technologies. Continue select
marketing of Petrovalve when appropriate.
•
Is
“Flotek
Inside
Your
Well”
approach.
•
Continue to focus on more balanced revenue mix: liquids vs. natural
gas.
•
Pursue international opportunities through partnerships, established
relationships and key agents.
•
Focus on Basin Supply relationship. Select opportunities with chemical
technologies and Teledrift.
•
Continued growth with Saudi Aramco; Opportunities in Turkey
•
Follow the integrated service companies into key unconventional markets.
•
Opportunities for Flotek chemical technologies to be utilized in
Enhanced Oil Recovery (EOR)
7 |
 Chemical Technologies & Logistics Services
•
Core Competencies
•Our
chemical
technologies
focus
on
developing,
manufacturing
and
distributing a
wide array of specialty chemicals used in both the primary and secondary efforts.
•Our unique and patented chemistries are used in cementing,
stimulation, acidizing, drilling and production.
•Also provide logistics technologies which manage automated handling, loading
facilities and blending capabilities for energy services companies.
•Key Product: Patented, Best-in-class Complex Nano-Fluids
(microemulsifiers) that are environmentally friendly and used to
meaningfully increase production and well integrity in unconventional tight
gas and oil formations •
Key Business Drivers
•Continued trend toward unconventional resource plays in North America.
•International
growth
in
unconventional
resource
plays
–
Flotek chemicals
involved in recent activity in Poland, Turkey & Paris Basin.
•New product innovations, including focus on liquids, enhanced recovery and
basin-specific solutions.
•Marketing penetration to service companies and ultimate beneficiaries with
better understanding of positive economic impact of Flotek proprietary
chemicals. •Environmental
sensitivity
benefits
Flotek
–
First patent focused on
“environmentally friendly”
chemistry filed in 2003.
8 |
 Drilling Technologies
•
Core Competencies
•Focused on designing, manufacturing and distributing a diverse inventory of
downhole drilling equipment with applications in oil and gas drilling as
well as mining, water and industrial drilling applications.
•Flotek Rental Tools on > 25% of all rigs in the United States, from
“commodity”
tools to “specialty”
tools and equipment such as drilling motors,
jars and stabilizers. 2010 was focused on increasing penetration
and
stabilizing
pricing.
2011
focus
on
increased
service
density
per
well and
continued growth in overall market share.
•Key Product: Teledrift Measurement While Drilling (MWD) tool. A leading
choice of drillers needing accurate, uninterrupted drilling measurements in
vertical section of all wells.
•
Key Business Drivers
•Downhole tool growth in key regions including Oklahoma and Eagle
Ford
•Improvement
in
market
share
and
pricing
in
drilling
motors
–
focus on key
regions including Barnett, Bakken, Haynesville & Eagle Ford.
•Teledrift is important focus: Continued growth in domestic markets. Pricing
strength in Permian Basin.
•International growth in Teledrift is key. Focus on Saudi Arabia and Middle
East, Central & South America, Russian Federation.
9 |
 Artificial Lift Technologies
•
Core Competencies
•Focused
on
assembling,
distributing,
installing,
and
servicing
a
broad spectrum
of pumping system components including electrical submersible pumps (ESPs),
gas separators and other services that largely support coal bed methane (CBM)
production, primarily in Powder River Basin.
•In addition, our Petrovalve patented production valve and components is used
by a plethora of international oil and gas producers in downhole production
assemblies.
•
Key Business Drivers
•Key customer relationships in Powder River CBM. Flotek improved key customer
relationships in 2010. (One key customer increased revenue from $42,000 in
2Q2010 to $1.4 million in 3Q2010 which should be sustainable).
•Work
to
find
new
markets
for
niche
CBM
product
applications.
Gas
price and
regulatory considerations will drive opportunities.
•Petrovalve
is
wildcard.
Orders
are
“lumpy”
but margins are superior in
international markets.
10 |
 First Quarter, 2011 Highlights
•
Revenue of $52.9 million in first quarter.
•
Operating Income of $ 9.3 million.
•
Net income of $10.4 million shares; extraordinary items
impacted results.
•
Strength in Chemical and Drilling Products segments.
•
Growth in Complex Nano-Fluid microemulsions with
focus on key unconventional plays.
•
Expansion of chemistry applications to liquids in both
primary and enhanced recovery.
•
Teledrift and motors continue to lead the way for
drilling products division.
•
International opportunities beginning to have impact.
11 |
 New
Information & Management Reporting Tools –
Enterprise Resource Planning
12
As announced, Flotek is undertaking a complete overhaul of its
Management Information Systems. The goal is provide more precise,
timely and useful data for management and front-line personnel.
•
One Version of the TRUTH (Single database and One
System)
•
Reporting and Chart Of Accounts Structure to meet
business needs
•
Ability to perform a Rapid and Accurate Close
•
True
Business
Intelligence
with
for
“Proactive”
decision
making, forecasting, due diligence, financial reporting,
etc…
•
Collaboration across the company
•
Standardization with “Best Practices”
Key Values of Flotek’s new ERP System |
 Select Balance Sheet Data (unaudited)
Outstanding Debt (in millions)
•Senior Secured Debt Due 11/2012
$ 31.8
•Secured (Second Lien) Convertible Notes*
$ 36.0
•Convertible Subordinate Debt*
$ 75.0
Total Outstanding Debt
$ 142.8
Equity Recap
•Shares Outstanding 3/31/2011
44.4
•Shares Issued in Private Placement 5/12/2011
3.7
•Shares Issues in Note Exchange 5/12/2011
0.6
•Other Potential Issuance (Warrants, Options)
5.0
Total Potential Fully Diluted Common
53.7
Cash as of 5/9/2011
~$ 23mm
*Debt matures in 2/2028; Put/Call Option 2/2013.
Data as of March 31, 2010 except as noted
13 |
 2011 Financial Objectives & Action Plan
•
Conversion of Preferred Equity to Common Equity
•
Completed 2/2011
•
Continue to Focus on Balance Sheet Improvement
•Consider options for outstanding convertible debt. Toolbox is more
robust than it was a year ago.
•
Completed $4.5 million debt-for-equity exchange on 5/12/2011.
•
Will consider additional opportunities for notes in the coming months
including exchange opportunities and potential re-crafting the convertible
notes. Will consider secured and unsecured notes. Will be strategic,
opportunistic and incremental.
•Consider options for more conventional senior-level financing.
•Analyze options for growing cash balances
•
Continue to focus on intrinsic growth with cash flow maximization;
However, will consider strategic, “niche intellectual”
partnerships and
acquisitions that are strategic, accretive and market-driven.
14
•
Private placement of 5/12/2011 which raised ~$29.5 million will effectively
eliminate senior debt. Plan to complete principal repayment this month.
•
Are in “late innings” of discussions with “traditional lenders”
regarding revolving credit facility. Would hope to complete by early third
quarter.
|
 2011Objectives
Lead
•Lead in innovation, responsiveness and service quality for our customers in
each of our key business units.
•Senior leadership leads by example, setting the tone and course of success
for our front-line team members.
•Lead our industry in performance and returns for our stakeholders.
Support
•Support our customers by anticipating their needs, developing new products
and innovative ways to provide “best-in-class”
service.
•Support the Flotek team by anticipating their needs, providing the tools for
success and listening to every suggestion on how to improve our operations,
culture and results.
Accelerate
•Accelerate Innovation
•Accelerate Efficiency and Teamwork
•Accelerate Growth and Stakeholder Returns
15 |
 16
IR@flotekind.com |