Flotek Industries, Inc. · NYSE:FTK
Flotek Industries — Investor Presentation (February 2006)
25 slides from Flotek Industries's investor presentation, Feb 21, 2006
Slide 1: Providing quality and service to the global oilfield
Providing quality and service to the global oilfield AMEX: FTK Market Cap ~ $200MM 52 week range $5.30 - $29.80 February 16, 2006
Slide 2: Focus on drilling and production oilfield services
Focus on drilling and production oilfield services > Specialty Chemicals and Logistics > Drilling Tool Rentals and Sales > Artificial Lift Discipline to generate bottom line growth > Patented product expansion > Organic growth opportunities > Accretive strategic acquisitions oN _ FLOTEK SA indasties
Slide 3: Market Share Growth
Market Share Growth + = New products = New markets — Domestic — International bntegate ent = Acquisitions
Slide 4: Proven acquisition and integration track record
Proven acquisition and integration track record = June 2001 — Acquired MTI (dry good logistics) = February 2002 — Acquired IBS (proprietary specialty chemicals) = January 2005 - Acquired intellectual property rights to produce oilfield shale shake screens . Boge 2005 — Acquired Spidle Sales and Serv
Slide 5: Spidle, Turbeco
— SPIDLE, TURBECO i inspection services for oilfield, mining, and industrial drilling = Acquisition of 5 private drilling tool companies at low multiples = Gross margins > 50% on rentals and inspection services Growth Strategy Expand product and services lines across recently acquired operations Add
Slide 6: Petrovalve
ns PETROVALVE a Flotek company Increase flow per stroke Producer can slow pump rate while maintaining production volume Can be placed at production zone with horizontal completions 203200 2mms* 2006+ Growth Strategy Expansion of artificial lift products Exclusive Agreement with Don-Nan Pump & Supply
Slide 7: Petrovalve
PETROVALVE | a Flotek company 1000 2000 3000 4000 5000 6000 Guided valve is designed to be placed at the production zone in horizontal completions to allow high pump efficiency in any position
Slide 8: CESI Chemical
— CESI CHEMICAL a Flotek company + (Spe Oilfield Chemicals & Services stimulation, cementing, drilling, and remediation Patented products including line of biodegradable specialty chemical additives Applied research team — technical support and quick customer response Growth Strategy Domestic and in
Slide 9: CESI Chemical lines of chemicals
CESI Chemical — 3 lines of | chemicals Staff of 12 degreed chemists including 4 PhD’s to develop and support field operations = Basic product lines for aie cementing and stimulation (25% = CESI Chemical proprietary products developed and sold to all service companies (50%) = Customer proprietai chem
Slide 10: Basic Product Lines
_ Basic Product Lines Drilling Fluid Additives Cementing Add Stimulation + Water Control Chemicals
Slide 11: CESI Proprietary Production Enhancement Chemicals
CESI Proprietary Production Enhancement Chemicals 7 a Microemulsion systems (ME) — Patented technology for Drilling, Fracturing and Acidizing — Used in more than 700 wells — Lowers the pressure by 50% to flowback injected fluid — Results: Higher fluid recoveries and higher oil and gas production rat
Slide 12: Hydraulic fracture with injected fluid surrounding the propped fracture
Hydraulic fracture with injected fluid surrounding the propped fracture. Gas breaks through at the point of least resistance leaving injected fluid trapped. Hydrocarbon \ Fluid Leakoff Breakthrough Surrounding Fracture Addition of returns 2X | Fracture The fluid cutting damage By a factor of 2
Slide 13: Six month average cumulative water and gas production in coalbed methane
Six month average cumulative water and gas production in coalbed methane in 3 wells with conventional surfactant (foamer) and in 3 wells with a foamer + ME
Slide 14: Barnett Shale single vertical well fracture system
Barnett Shale single vertical well fracture system with proposed phase trapping surrounding fracture — 1 million gallon frac treatments Propped Dominant Fractures Gas Breakthrough far (Dec, 2004)
Slide 15: Six month average cumulative production in Barnett Shale fracs
Six month average cumulative water and gas production in Barnet Shale fracs in 2 wells with conventional surfactant and in 2 wells with ME 250 well study shows 60% increase in flowback and 30% increase in 6 mo gas production with ME
Slide 16: Capillary Foam/Coil Systems
CAPILLARY Foam/Coil Systems = Patented high temperature multi functional systems = Inject foamer, scale and corrosion inhibitor continuously through capillary = Decreases water level on formation = Doubles production of gas wells = New CESI capillary unit deployed in Holland
Slide 17: Cotton Valley Sand production
Cotton Valley Sand from 134 to 304 MSCF/Day Hudson A#3, Installed capillary stieg
Slide 18: 5,000 Wells Completed with capillary strings
5,000 Wells Completed with capilla strings in_5 Years for Liquid Loadin There is no better ROI! in the Upstream Gas Industry » Sound Engineering has achieved a 95% success ratio > Average rate increases over 50%, many are over 100% >Currently over 600 Million SCF/day incremental US production »CESI
Slide 19: CESI Acid Iron Control System
CESI Acid Iron Control System + = Patented new technology for 2006 = Simplified lower cost system = Environmentally friendly = Potential to be used in every gallon of acid pumped to prevent the oxidation and deposition of iron in the formation
Slide 20: Proprietary Blends for Service Companies
Proprietary Blends for Service Companies = Solid Blending of — Light weight cement — Cement spacers — Fluid loss additives = Liquid Blending of surfactants for acidizing and fracturing stimulation = Blending area has been doubled to handle increased demand
Slide 21: Bottom Line Growth
Bottom Line Growth a Revenue growth ~ 52% CAGR $80 7 a EBITDA growth ~ 129% CAGR $60 + = EBITDA/Revenue 2 suo = 23.7% in Q3 ° — 22.2% YTD $20 + = 2005* Basic EPS $1.05 - $1.10 = 2005* FD EPS $0.93 - $0.97 “oo 2008 mos zane «= «- 2006* FD EPS $1.20 - $1.30 o—~* | FLOTEK \ Arties * Management estimate
Slide 22: Financial Highlights
Financial Highlights = 2004 2008* 2006* Revenue $29 S$ 82.0 $79.0 Net Income So 2a $s 79 $17 Add back: Interest Expense $07 $08 $06 Provision for Income Taxes $02 $24 $50 Depreciation & Amortization $07 s__13 $31 Adjusted EBITDA Sse $ RA S$ 204 Less Capital Expenditures $01 $y. Sa Free Cash Flow S$
Slide 23: Investor Highlights
Investor Highlights = Strong Projected Growth = Projecting 30% organic revenue growth for 2006 = Continued acquisition strategy Financial capacity available for acquisitions Above average margins and net income Financial leverage would accelerate EPS growth Improving liquidity thru AMEX listing and
Slide 24: Contact Us
Contact Us Flotek Industries, Inc. 1 7030 Empire Central Drive Houston, TX 77040 713-849-9911 www.flotekind.com Jerry Dumas — Chairman & CEO Dr. Glenn Penny — President & CTO Lisa Meier — Chief Financial Officer & VP
Slide 25: Forward looking Statements and non-GAAP Disclosures
Forward looking Statements and non-GAAP Disclosures 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 mad
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