Houston’s Flotek Hurt by Irma’s Impact on Oranges09/27/2017
Houston oilfield services firm Flotek Industries is suffering from Hurricane Irma’s impact on Florida’s citrus crops.
That’s because Flotek increasingly bases its business model on chemical fluids derived from oranges that are used in hydraulic fracturing and oil field production to extract more oil and natural gas liquids from wells.
While much of the energy sector was hit hard by Hurricane Harvey in Texas, Flotek took more of a blow from Irma. The company said Irma may have damaged about 50 percent of Florida’s most recent citrus crops. Flotek Chairman and CEO John Chisholm said he expected the crop damages to delay raw materials price reductions that were previously anticipated.
“As the supply chains across both segments move towards a degree of normalcy after the devastating storms, we are managing through these temporary, and mostly uncontrollable circumstances,” Chisholm said.
Flotek last year launched a new business model, opening a Houston research center to help sell its chemical products directly to exploration and production companies, bypassing large services companies that would buy Flotek’s chemical products, bundle them into larger packages and sell them at higher prices. Flotek’s strategy aims to attract more customers and bigger profits by cutting out the middleman.
Flotek claims its citrus-based chemistry can help boost oil production by about 20 percent. Flotek also sells citrus oils as flavoring and fragrance additives.
Source: Houston Chronicle