Enercom London

Transcription

1 Enercom London

2 Forward Looking Statements Disclaimer Certain statements and information included in this presentation constitute forward looking statements within the meaning of the Private Securities Litigation Reform Act of 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.

3 The Flotek Portfolio Flotek is a Houston-based oilfield services company with focus on value-added drilling, completion and production products. We deliver our services through a network of field offices in key basins across North America and through strategic partnerships internationally. 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

4 Recent Developments: Florida Chemical Acquisition On May 10, 2013 Flotek Industries, Inc. announced the acquisition of Florida Chemical for $49.5 million in cash and 3.28 million shares of Flotek common stock. Acquisition will drive revenue and market share growth. Should be accretive to EPS and EBITDA. Merger creates global leader in advanced industrial and consumer renewable and sustainable chemistry: Florida Chemical is the largest global processor of citrus oils. The Company has become a leading supplier of raw materials for diverse applications in the oil and gas industry. Flotek and Florida Chemical have a long and mutually rewarding 15-year partnership. The Florida Chemical acquisition provides security of raw material access and control of inventory and pricing of key inputs to the chemistry product stream. Secures access to d-limonene, a key component in many key oil & gas chemistry components. Creates leading, world-class specialty chemistry research team focused on environmental innovation and practical, added-value application. Immediately expands product line, including renewed focus on environmental stewardship. Expands customer footprint and depth of offerings. Florida Chemical gains access to new growth capital, additional depth in its oil & gas research efforts and new markets for its oil & gas product offerings.

5 Florida Chemical: Renewing Environmental Stewardship The acquisition of Florida Chemical renews and intensifies Flotek s commitment to environmental stewardship. Florida Chemical s FC-PRO operating company provides a plethora of renewable and sustainable oilfield chemistries that are GREAT and GREEN! For example, the combined companies have developed an efficacious substitute for Xylene which eliminates the need to use harmful toxins in well clean-out. Product Comparison Chart Citrus Terpene Hydrocarbons Toluene/. Xylene Teratogen (reproductive hazard) No Yes Suspected Carcinogen No Yes SARA Title III (Section 313) Not Subject Subject GRAS (Generally Regarded As Safe) Yes No Regulated Drinking Water Contaminant No Yes Federal Biobased Products Preferred Procurement Program 100% compliant Not compliant Flashpoint (ºF) > 100 < 100

6 Florida Chemical: Research & Development Integration The combination of Flotek and Florida Chemical brings complementary research acumen together: Florida Chemical s unique focus on environmental innovation and Flotek s practical applications of cutting-edge oilfield chemistries. This combination creates a world-class research operation for oilfield, industrial and consumer staple specialty chemistry. The research and development teams at Flotek and Florida Chemical have a long, outstanding relationship dating back over 15 years with a common theme for environmental innovation and efficacious oilfield chemistries. The combined research team will work seamlessly to identify new applications and formulations to meet the increasingly complex needs of the oil and gas industry and a renewed focus on environmentalism. The combined research team will continue to grow to meet the needs of the oil & gas, industrial and consumer staple industries.

7 Florida Chemical: Diversity in Specialty Chemicals The acquisition of Florida Chemical provides Flotek with unique and exciting new opportunities to work in a variety of new industries with a variety of new customers, not only in the oil and gas industry. Flotek intends to leverage the vast expertise of Florida Chemical to expand its footprint into new industrial and consumer applications. Specifically, it provides unique diversification into the flavor and fragrance industry, including many current customers with global footprints. The Flavor and Fragrance market is estimated to be between $18-$20 Billion, with steady annual growth.

8 Recent Initiatives: Oman/Gulf Energy Joint Venture Flotek signed a Letter of Intent with Gulf Energy of Oman to construct a specialty oilfield chemical production and distribution facility, as well as a research and development center in Oman. Extends Flotek s reach into a region in need of advanced chemistry solutions that Flotek provides. Strategically positions Flotek to serve the Middle East and North Africa, amongst the most prolific oil and gas producing regions in the world. Independent surveys suggest unconventional resource development will quintuple in MENA region in the next decade with over three-quarters of such development coming in Oman and Saudi Arabia.

9 Chemical Technologies Business Drivers Continued trend toward unconventional resources plays in North America and in international markets. New product innovations: Research & development commitment leading to the next generation Complex nano-fluids TM and other on demand chemistry solutions. CnF 2.0 New markets: Liquids growth, enhanced oil recovery applications and basin-specific solutions. International markets: Continued growth from Basin Supply partnership and additional opportunities. Marketing penetration to both service companies and E&P end-users that convey compelling economic benefits of the CnF technology. Environmental focus: Flotek filed first patent on environmentally friendly products in A key driver behind the Florida Chemical acquisition. Commitment to Research: Enhanced by the Florida Chemical acquisition.

10 Drilling Technologies 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 & Eagle Ford. Teledrift focus: Continued growth in domestic markets. Pricing strength in Permian Basin. Remote technology should enhance Teledrift pricing and market share. International expansion. Focus on Saudi Arabia and Middle East, Central & South America, Russian Federation. Technology Focus: Remote view of Teledrift results.

11 Artificial Lift Business Drivers Key customer relationships in Powder River CBM. Flotek improved key customer relationships in 2011 which provided additional service revenue in 2012 even as natural gas prices tumbled.. New pump system technology and partnerships assisting in oil basin growth. We have made significant progress in growing our oil exposure: Successful installation of Petrovalve in the Niobrara with mainstream participants. Repeat business beginning to build. ESP brand recognition growing. We are competing for major ESP jobs with gross margins in the 50% range. New significant customer in the Bakken establishes new territory for Flotek.. International sales of Petrovalve provide significant upside.

12 Performance & Value Creation Flotek s rejuvenation is evident both financially and operationally. Flotek s market cap increased from $32.4 million at the beginning of 2010 to over $600 million by the end of 2012 and nearly $800 million today. Flotek s stock price increased 810% since the beginning of That compares to a median increase of 14% for other companies in their peer group. The NYSE composite index gained 18% and the OSX gained 13% in that time period. Flotek s stock price appreciated 22% in 2012, more than any other of the 15 companies in their peer group. The median loss for Flotek s peer group in 2012 was -15%. Flotek also outperformed the NYSE Composite Index and the OSX. Flotek s stock price gained 22% in 2012, while the NYSE composite index gained only 13% and the OSX only gained 2%. 900% 800% 700% 600% 500% 400% 300% 200% 100% 0% -100% 22% Stock Performance % 18% 13% Return Median (14%) 30% Stock Performance % 13% 10% 2% 0% -10% -20% -30% -40% -50% Return Median (-15%)

13 Performance & Value Creation Flotek continues its strong operational and financial performance. As you can see, Flotek is in the midst of a significant transformation from post financial crisis levels. Total Revenue $350,000 Total revenue has more than doubled from 2010 and increased over 20% from Revenue in 2012 was the highest in company history. Chemical Revenue increased 30% over 2011 levels. Operating income in 2012 was $58.6 million, a 20% increase over 2011 levels. Revenues ($ mm) $300,000 $250,000 $200,000 $150,000 $100,000 $50,000 $ Year Chemical & Logistics Revenue Operating Income $60,000 Revenues ($ mm) $200,000 $150,000 $100,000 $50,000 $ Year Operating Income ($ mm) $40,000 $20,000 $- $(20,000) $(40,000) Year

14 Concluding Thoughts The acquisition of Florida Chemical is transformational for Flotek: Creates global leader in advanced industrial and consumer renewable and sustainable chemistry. Drives revenue and market share growth; immediately accretive to EPS and EBITDA. Renews Flotek s commitment to leadership in environmental stewardship. Continued focus on improved marketing efforts : Key objective to reach ultimate beneficiaries of property CnF chemistries. Combination of working with service companies and working independent of service companies to sell E&P companies on economic benefits of the CnF technology. Increased emphasis on depth of relationships along with breadth of relationships. Is Flotek in your well provides multiple touch point opportunities. Focus on new opportunities, especially international growth and new applications of chemistry technology, including Enhanced Oil Recovery Continued focus on making a difference : Product validation will improve visibility of Flotek s ability to add value to customer production projects. Acute focus on returns for our stakeholders through optimal capital allocation.

15 For More Information: Christopher S. Edmonds Senior Director Corporate Finance & Strategy