This Letter of Intent involves
Title: Flotek Industries, Inc. Announces Letter of Intent with Gulf Energy, LLC to Develop Advanced Oilfield Chemistry Production and Research Development Facilities in Sultanate of Oman
Industry: Oil Well Services and Equipment Sector: Energy
Flotek Industries, Inc. Announces Letter of Intent with Gulf Energy, LLC to
Develop Advanced Oilfield Chemistry Production and Research & Development
Facilities in Sultanate of Oman
HOUSTON, Texas and MUSCAT, Sultanate of Oman March 14, 2013 /PR NEWSWIRE/ – Flotek Industries, Inc. (“Flotek” or the “Company”) announced this morning the execution of a Letter of Intent (the “Agreement”) with an affiliate of Gulf Energy, LLC (“Gulf Energy”), a leading Oman-based diversified oil and gas concern, to construct an advanced oilfield chemistry production facility and create a state-of-the-art research and development organization to address the growing need for advanced oilfield chemistry and analysis in the Middle East and North Africa.
Under the terms of the Agreement, Flotek will own 60% of two new Omani-registered limited liability companies: the first, a chemical production company that plans to construct a production facility – with capabilities similar to the Company’s current facility in Marlow, Oklahoma; and the second, a research and development laboratory that will focus on the application of Flotek’s leading oilfield chemistries to the challenges of drilling, completion and production in the Middle East and North Africa. Flotek and Gulf Energy will jointly market the products and services of the Company along with Flotek’s international marketing partner, Basin Supply Company.
Creation of the Omani companies is subject to the execution of definitive Shareholder Agreements between Flotek and Gulf Energy.
“This partnership with Gulf Energy, which has been several months in process, is an important and significant step in establishing Flotek’s leadership position in global oilfield chemistry,” said John Chisholm, Flotek’s Chairman, President and Chief Executive Officer. “Gulf Energy has become a leader in developing a wide range of advanced oilfield solutions throughout the Middle East and brings innovative expertise and deep relationships to this partnership. Combining Flotek’s advanced oilfield chemistry solutions, Gulf Energy’s existing clients and the best research minds in the region is a formula that should create a leading oilfield technology effort in the Middle East and North Africa.”
Gulf Energy has secured acreage near the Omani port of Sohar to construct a chemical production facility. The facility is expected to cost no more than $10 million to construct and will commence upon execution of the Shareholder Agreements and receipt of appropriate permits. Once complete, the facility will market and provide oilfield chemistry to projects throughout the region. It is anticipated that the research and development facility will be located in or near Muscat, the commercial center of Oman and headquarters of Gulf Energy.
“We are pleased to be partnered with Flotek, a leader in advanced oilfield chemistry, as we work to bring new, technology-focused enhancements to hydrocarbon production in the Middle East and North Africa,” said Hilal Al Busaidy, Chief Executive Officer of Gulf
Energy, LLC. “Gulf Energy’s continued growth as an integrated service and oilfield technology provider throughout the region brings key relationships to this partnership. There is little doubt there is a compelling need for the type of advanced chemistry solutions Flotek can provide. We look forward to developing our partnership into a leader in oilfield chemistry throughout the Middle East and North Africa.”
As a result of the relationship with Gulf Energy, Flotek will begin shipping certain oilfield chemistries to the region in the coming weeks, prior to the completion of the production facility. Basin Supply Company, one of Flotek’s