8-K

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 8-K

CURRENT REPORT

Pursuant to Section 13 or 15(d)

of the Securities Exchange Act of 1934

Date of Report (Date of earliest event reported): December 21, 2016

Flotek Industries, Inc.

(Exact name of registrant as specified in its charter)

Delaware	001-13270	90-0023731
(State or other jurisdiction of incorporation)	(Commission File Number)	(IRS Employer Identification No.)
10603 W. Sam Houston Pkwy N., Suite 300 Houston, Texas		77064
(Address of principal executive offices)		(Zip Code)

Registrant’s telephone number, including area code: (713) 849-9911

Not applicable

(Former name or former address, if changed since last report.)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

☐ Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

☐ Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

☐ Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

☐ Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Item 7.01 Regulation FD Disclosure.

On December 21, 2016, Flotek Industries, Inc. (the “Company”) received a letter from MHA Petroleum Consultants LLC (“MHA”) responding to criticisms by FourWorld Capital Management and others of prior reports prepared by MHA for the Company regarding the efficacy of the Company’s CnF chemical products. A copy of the letter from MHA is furnished herewith as Exhibit 99.1 to this Current Report on Form 8-K and is incorporated herein by reference.

The information furnished pursuant to Item 7.01 of this Current Report on Form 8-K and in Exhibit 99.1 shall not be deemed to be “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, is not subject to the liabilities of that section and is not deemed incorporated by reference in any filing of the Company’s under the Securities Exchange Act of 1933, as amended, except as otherwise expressly stated in such filing.

Item 9.01. Financial Statements and Exhibits.

(d) Exhibits.

Exhibit Number	Description
99.1	Letter from MHA Petroleum Consultants LLC, dated December 21, 2016.

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

	FLOTEK INDUSTRIES, INC.
Date: December 21, 2016	/s/ Robert M. Schmitz
	Robert M. Schmitz
	Executive Vice President and Chief Financial Officer

EXHIBIT INDEX

Exhibit Number	Description
99.1	Letter from MHA Petroleum Consultants LLC, dated December 21, 2016.

EX-99.1

Exhibit 99.1

December 21, 2016   Mr. Casey W. Doherty, Sr. General Counsel, Flotek Industries, Inc. Doherty & Doherty LLP 1717 St. James Place, Suite 520 Houston, TX 77056

Re: Review of Recent Reports Published Which Dispute MHA’s Original Conclusions

Regarding the Use of CnF in Horizontal Wells in the DJ Basin, Colorado

Dear Mr. Doherty,

MHA Petroleum Consultants LLC (“MHA”) has reviewed recent publications by FourWorld Capital Management (“Flotek: Drilling Down To Zero”) and RX Trading / Sylvania, LLC (“Well Productivity, Completion Design and CnF Horizontal Wells in Weld County, CO”). In addition, we have reviewed our original work documented in January 2016 (“Effectiveness of CnF on Improving Horizontal Well Performance Greater Wattenberg Area – DJ Basin; Colorado”) and updated our calculations, using our original data set, to include FDP-S1007-11 as a CnF fluid.

The result of these reviews and revised calculations confirms our original conclusion from January 2016 that in our Focus Area 1 and Focus Area 2 of the DJ Basin in Colorado, which were the more oil-prone areas of our study, we observe a significant increase in the estimated ultimate oil recovery (“EUR”) per foot of gross perforated interval in wells that were completed using the CnF additive. The result from Focus Area 3, which was the most gas-prone area in our original study, remains inconclusive with only a marginal increase in the EUR per foot of gross perforated interval productivity parameter.

The referenced publication by FourWorld Capital Management suggests that there were two trade names of CnF products that were missing from the MHA January 2016 evaluation. The two allegedly missing CnF trade names were OilPerm FMM-1 (97 wells) and FDP-S1007-11 (30 wells). Flotek has advised us that while FDP-S1007-11 is a CnF fluid and should have been included in the original evaluation, OilPerm FMM-1 is not a Flotek CnF product and, therefore, the 97 wells containing that product were correctly characterized in our original January 2016 report.¹

¹  The FourWorld Capital Management publication also questions whether five wells located in MHA’s Focus Area 2 that include a notation for “OilPerm” on their FracFocus reports should have been classified as CnF wells in MHA’s original report. Whether these wells are classified as CnF wells or non-CnF wells does not have a meaningful impact on the results we described in our original report.

With respect to Focus Area 3, MHA reclassified four wells as CnF wells. According to FracFocus, two of those wells in Focus Area 3 were drilled with FDP-S1007-11 and two were drilled with FDP-S1084-13. The reclassification of these wells does not meaningfully impact MHA’s results for Focus Area 3.

730 17^th Street, Suite 410, Denver, Colorado 80202 U.S.A. Telephone: +1-303-277-0270     Fax: +1-303-277-0276

Based on this information, MHA reviewed the original database constructed in January and revised our calculations to include FDP-S1007-11 as a CnF fluid. Accordingly, we have reclassified 38 wells as CnF wells. 36 of these wells were in Focus Area 1 and two of these wells were in Focus Area 3. There was no change in Focus Area 2. After updating our calculations with the inclusion of the FDP-S1007-11 as a CnF fluid, we obtain the results shown in the following table:

Focus Area	Number of wells with CNF fluid FDP-S1007-11		Improvement in Average Oil EUR per foot of gross perforated interval
Area 1		36		16.0	%
Area 2		0		27.6	%
Area 3		2		1.4	%

The referenced publications by FourWorld Capital Management and RX Trading / Sylvania, LLC further suggest that the original results presented by MHA in January 2016 were influenced by the selection of the location and geographic footprint of the actual Focus Areas themselves. Their reports suggest that if MHA had instead centered our analyses on “sweet spots” within our Focus Areas, we would have obtained different results.

MHA tested this hypothesis in two ways. First, the “sweet spot” within MHA Focus Area 1 identified in the FourWorld Capital Management report is essentially the lower right quadrant of Focus Area 1, which is T9N – R58W. The original MHA calculations were re-run using only the wells within T9N – R58W, and the results indicated an improvement of 10.4% in the oil EUR per foot of gross perforated interval for wells which used the CnF additive in that referenced township. In our opinion, this is still a significant improvement in well productivity, and it dispels the suggestion that if our Focus Area 1 were restricted to the “sweet spot” our conclusions would be different.

The second test of the hypothesis was done by analyzing the performance of localized clusters of wells. In this case, groups of wells within Focus Areas 1 and 2 which were located immediately adjacent to one another were evaluated using our original January 2016 database. Because of the immediate proximity of the wells, many of the variables which influence productivity were removed from the equation. For example, the wells were drilled by the same operator, the wells were completed at the same time, the lateral length of the wells was the same, and the quality and thickness of the productive reservoir was the same. The primary variable remaining which influenced oil production was the use of, or lack of, the CnF additive in the well completion. Three localized areas were studied within Focus Area 1 and two localized areas were evaluated within Focus Area 2 using our original data set.    The results indicated an improvement in oil EUR per well of 6% - 33% in Focus Area 1 and 9% - 36% in Focus Area 2. (Note that because the lateral length of wells within a localized cluster was the same, it was not necessary to divide the EUR by the gross perforated interval.) Once again, this test dispels the suggestion that the Focus Areas selected by MHA were too large and that this influenced our conclusions.

Based on the above conclusions, it is the opinion of MHA that our original conclusion reported in January 2016, which identified an improvement in oil productivity in wells which used the CnF additive within Focus Areas 1 and 2, is still valid. The inclusion of FDP-S1007-11 as a CnF additive, which was not included in our original analyses, does not change our conclusion.

  MHA Petroleum Consultants LLC Mr. Casey Doherty, Sr. December 21, 2016 Page 2

Further, if our analyses are restricted to the “sweet spot” identified by FourWorld Capital Management within Focus Area 1, or restricted further to localized well clusters, we still obtain the same conclusion using our original data set which shows a demonstrated improvement in well productivity in Focus Areas 1 and 2 through the use of the CnF additive.

Sincerely,

/s/ Timothy L. Hower

Timothy L. Hower, CEO

  MHA Petroleum Consultants LLC Mr. Casey Doherty, Sr. December 21, 2016 Page 3