HOUSTON, Dec. 20, 2016 /PRNewswire/ -- Flotek Industries,
Inc. (NYSE: FTK - News) ("Flotek" or the "Company") today provided
an update on the current operating environment and other
metrics.
"While significant uncertainty remains in the oil and gas
marketplace, we have begun to observe operator behavior that
suggests oilfield activity is beginning to improve," said
John Chisholm, Chairman, President,
and Chief Executive Officer of Flotek. "Various drilling and
completion measures have begun to trend higher which, if sustained,
should benefit Flotek and other oilfield services as 2016 ends and
the New Year begins. In addition, we continue to see customer and
prospect interest which, we believe, will provide additional
commercial opportunities for our core chemistries. While it is far
too early to suggest an industry recovery is underway, we are
optimistic that the opportunity set will continue to improve into
2017."
Flotek's operations have benefited from the more constructive
market environment. Based on our review of quarterly activity to
date, the Company expects fourth quarter total Energy Chemistry
segment revenues to increase by 10-15% when compared to third
quarter, 2016 results. The Company expects total Energy Chemistry
segment gross margins for the fourth quarter to decline modestly,
likely to the 38-40% range, from the third quarter level of
40.4%
Flotek also expects, after reviewing October and November
results for the Company' s Consumer and Industrial Chemistry
segment, CICT revenues to decline by $2.5-$3.5 million in the fourth quarter when
compared to third quarter results. Flotek has previously indicated
that seasonal demand fluctuations, changes to its product offerings
and a greater focus on terpene development for the Company's energy
chemistry business are likely contributors to the more moderate
sales forecast. Even with the fourth quarter decline, Flotek's CICT
segment should post record annual revenues in 2016.
"While the recent and rapid fluctuation in commodity prices can
be hard to decipher, it does appear companies are slowly returning
to work, both drilling and completing wells," said Chisholm. "While
business trends at the inflection point of any cycle are typically
more volatile than normal, we are pleased with the way the fourth
quarter is developing, especially that the 'holiday slowdown' that
concerned us does not appear to be nearly as significant as we
earlier expected. While there is significant work ahead to make
sure Flotek continues toward its goal to become the leader is
oilfield completion chemistry, we believe the increase in industry
activity in the last 60 days could be a signal that better
opportunities and a more constructive operating environment are in
store as we enter 2017."
Flotek continues to work with clients to expand chemistry usage,
including the Company's suite of CnF® completion chemistries as
well as its PrF® pressure reducing fluids, a less invasive
alternative to traditional friction reducers.
"As our clients increasingly entrust us with improving the
performance of their assets, we trust our clients to vote every day
with their capital as to the effectiveness of our products," said
Chisholm. "We believe the growth in CnF use – from our
largest customers to small independent producers – should be the
most important indicator of effectiveness. When combined with the
analysis conducted by many of those clients that has resulted in
usage of Flotek's key completion chemistries, we are confident in
our current sales profile and future commercial opportunities."
Flotek anticipates it will release fourth quarter and full year,
2016 results in early February.
About Flotek Industries, Inc.
Flotek is a global developer and distributor of a portfolio of
innovative oilfield technologies, including specialty chemicals and
down-hole drilling and production equipment. It serves major and
independent companies in the domestic and international oilfield
service industry. The company also serves commercial and industrial
markets with a portfolio of diverse chemistry technologies.
Flotek Industries, Inc. is a publicly traded company headquartered
in Houston, Texas, and its common
shares are traded on the New York Stock Exchange under the ticker
symbol "FTK."
For additional information, please visit Flotek's web site at
www.flotekind.com.
Forward-Looking Statements
Certain statements set forth in this Press Release constitute
forward-looking statements (within the meaning of Section 27A of
the Securities Act of 1933 and Section 21E of the Securities
Exchange Act of 1934) regarding Flotek Industries, Inc.'s business,
financial condition, results of operations and prospects. Words
such as expects, anticipates, intends, plans, believes, seeks,
estimates and similar expressions or variations of such words are
intended to identify forward-looking statements, but are not the
exclusive means of identifying forward-looking statements in this
Press Release.
Although forward-looking statements in this Press Release
reflect the good faith judgment of management, such statements can
only be based on facts and factors currently known to management.
Consequently, forward-looking statements are inherently subject to
risks and uncertainties, and actual results and outcomes may differ
materially from the results and outcomes discussed in the
forward-looking statements. Factors that could cause or contribute
to such differences in results and outcomes include, but are not
limited to, demand for oil and natural gas drilling services in the
areas and markets in which the Company operates, competition,
obsolescence of products and services, the Company's ability to
obtain financing to support its operations, environmental and other
casualty risks, and the impact of government regulation.
Further information about the risks and uncertainties that may
impact the Company are set forth in the Company's most recent
filings on Form 10-K (including without limitation in the "Risk
Factors" Section), and in the Company's other SEC filings and
publicly available documents. Readers are urged not to place undue
reliance on these forward-looking statements, which speak only as
of the date of this Press Release. The Company undertakes no
obligation to revise or update any forward-looking statements in
order to reflect any event or circumstance that may arise after the
date of this Press Release.
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SOURCE Flotek Industries, Inc.