Flotek Industries, Inc. (NYSE:FTK) Q2 2023 Earnings Call Transcript

And so with some of that, we would look at our total fleet count, we moved chemistry on a similar number of fleets, but when you average out the volume, it was down a little bit, particularly in what we saw in May, but we’ve seen that come back strong in July and coming into August.

Richard Dearnley: Right. I see. And on Slide 16, back to the productivity question, how much of that improvement is – this is a soft guess kind of answer, but how much of that is due to analytics? How much is due to nano fluids and how much is due to the rest of everything?

Ryan Ezell: So that’s a great question and something that we have kind of combined in our overall approach. You heard me mention that we have 20,000 wells under the belt of applications of our chemistry. So in combination with what our data analytics group does with the chemistry, we’ve done a lot of, I would say, machine learning on applications of our proprietary chemistries into various basins and target zones. And we’ve brought that into discussions with our customers, how we choose our chemistry. And what’s even more important is we look at our overall engineering process that we call prescriptive chemistry management, where we look at the X-ray diffraction of the cuttings and core samples. We look at the produced water and its composition, we look at the compositional analysis of the potential crude and hydrocarbons that are coming out of the reservoir, and we also look at other potential opportunities around the biocide selections, et cetera.

And we give them a holistic customized approach, which is choosing the right friction reducer, clay control, corrosion components, as well as when we can have an application of a surfactant enhanced possibility, which you look at as a flowback aid or a complex nano fluids. Because what we see is sometimes traditionally when it’s just look at pure complex nano fluids, it’s a little bit higher, but we look at holistic approach to the chemistry management side, and that’s where we get the 26% number. And I would say it varies well to well, depending on the formation type and completion design.

Richard Dearnley: So you’re saying it’s not possible to break out the nano fluids and the analytics and so on. It’s just a big package.

Ryan Ezell: I think it is in terms of, we can look at it just where we have specific to just complex nano fluids being applied. We have those analytics, but we like to prefer to look at our holistic engineering approach for the full design of the slickwater system that we’re utilizing. But we do have that data and it’s some of – I think some of the more detailed presentations that we’ll be doing at some of the upcoming investor conferences. We’ll talk specifically around impacts of complex nano fluids versus the full engineering and scope design.

Richard Dearnley: Okay. Thank you.

Operator: [Operator Instructions] At this time there are no more questions. Oh, the next question comes from Don Crist with Johnson Rice. Please go ahead.

Don Crist: Thanks for let me back in again, guys. Ryan, I just want to ask about JP3. Obviously you had some field tests going on with the new design. Where are we in that and are you seeing some interest in more widespread adoption in JP3?

Ryan Ezell: Yes, Don, that’s another good question is that as I mentioned, we have the new generation model in the field testing. We’ve got two units. The testing has grown – gone phenomenal. And we’re expecting scale up of that business coming to the latter part of Q4 and going into 2024 for having the new units on the production side coming out. And that’s opened up, we recently went over with our Board kind of the strategic applications of this new technology into the field, and we see significant opportunities in the upstream segment by looking at the quality and energy count and BTUs and natural gas. We look at flare gas operations and we also look at power generation overall, whether you’re powering rigs, frac fleets, electrical turbines, et cetera.