EX-99.2 3 dex992.htm SLIDE PRESENTATION Slide Presentation
Exhibit 99.2


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.
Presentation
to
the
Independent
Petroleum
Association
of
America
New
York
Oil
&
Gas
Investment Symposium
April 11, 2011
John Chisholm, Chairman and President
©
2011, Flotek Industries. All Rights Reserved
1


Flotek Today
•Overview & Business Strategy
•2010 Preliminary Highlights and Accomplishments
•Flotek’s Technology Portfolio& Business Drivers
•Chemical Technologies and Related Logistics Services
•Drilling Technologies
•Artificial Lift Technologies
•Financial Overview
•2011 Objectives
•Conclusions
2


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.
3
Flotek’s Technology Portfolio


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.
4
Chemical Technologies & Logistics Services


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.
5
Drilling 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.
6
Artificial Lift Technologies


Financial Highlights
$147 million in revenue for year
$47.5 million in revenue for 4Q2010. Consistent sequential
growth in revenue in each calendar quarter
Managed and grew cash position of Company. Year-end cash
of ~$19 million. (Cash balance as of 3Q2009 was ~$600,000)
Renegotiated Senior Credit Facility and portion of convertible
debt in March, 2010 to provide needed stability of lenders and
additional capital.
•Reduced Senior Credit Facility by 13% in 2010; Expect
additional reductions by end of 1Q2011.
•Self-funded operations and capital needs in 2010.
7
2010 Highlights


Strengthened leadership team with the Addition of Johnna
Kokenge as Chief Accounting Officer
•More timely and accurate reporting, both internal and external
•Focus on information management systems
•Improved efficiency and accounting support for all Flotek
operations
Strengthened
Board
of
Directors
by
adding
key
Board
Members:
Bud McGuire (petroleum engineer with global exposure); Mel Cooper
(CFO of Forbes Energy)
Refocused sales efforts
by (a) Focusing on both key customers
as well as ultimate beneficiaries of Flotek products; (b) Focusing on
selling “all of Flotek”
rather than individual products; and (c)
Refocusing from sales agents to internal operations.
8
2010 Highlights


Revenue > $50 million in first quarter.
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.
Weather delays and environmental restrictions had impact
on Artificial Lift activity.
Recovery likely but early second quarter typically
provides similar challenges.
Scheduled to report results on May 11, 2011; conference
call on May 12, 2011.
9
First Quarter, 2011 Preliminary Highlights


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
•Other Potential Issuance (Warrants, Options)
5.0
Total Potential Fully Diluted Common
49.0
Cash as of 3/31/2011
~$  19.0
*Debt matures in 2/2028; Put/Call Option 2/2013.
Data as of March 31, 2010 except as noted
10
Select Balance Sheet Data (unaudited)


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.
•Consider options for more conventional senior-level financing.
•Analyze options for growing cash balances
Continue Improvement in Measurement & Reporting
•Implement new accounting and inventory management systems
•Create more dynamic corporate-to-field information sharing
•Focus on relative profitability based on productivity
Continuous Improvement in Efficiency and Service from Leadership
Team
11
2011 Financial Objectives & Action Plan


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
12


Flotek’s Technology Portfolio
13
IR@flotekind.com