Mon, Sep 1, 2014 13:31
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Flotek Industries Reaches Chemical Supply Agreement with Pioneer Natural Resources

Texas Business reports:  HOUSTON—Flotek Industries Inc. entered into a multi-year bulk chemical supply agreement with Pioneer Natural Resources Pumping Services LLC.

The agreement provides that Pioneer will purchase 80% of certain blended chemistries from Flotek for a period of three years with an option to extend the agreement beyond the initial term.

Chemicals covered by the agreement include Flotek's patented complex nanofluid chemistries as well as certain friction reducers, cross-linkers, scale inhibitors and other products.

“We are honored that Pioneer has chosen Flotek as a preferred partner to supply our world-class completion chemistries,” said Flotek chief executive John Chisholm in a prepared statement. “As a leader in the development of unconventional resource plays, we believe our partnership with Pioneer not only provides a tangible economic benefit to our shareholders, it more importantly demonstrates Flotek's leadership as a preferred provider of advanced completion solutions to leaders in unconventional exploration and production.”

Over several months, Pioneer and Flotek have worked to expand an existing relationship leading to this formal supply agreement to meet the growing completion chemical needs of Pioneer.

While economic terms will not be disclosed, the agreement provides a framework for preferential pricing for Pioneer while enhancing Flotek's margin potential through a pricing schematic related to raw material prices and purchase volumes.

“Pioneer is pleased to welcome Flotek to its family of partners as we work to build a vertically integrated company and accelerate development of our significant resource base,” said Pioneer president Kyle Zemlak in a statement. “Flotek's chemicals, including patented complex nano fluid chemistries and their technical expertise have enhanced our completion results. We look forward to a long and mutually rewarding partnership.”

The initial term of the contract will run through April, 2015.

Flotek is a developer and distributor of a portfolio of innovative oilfield technologies, including specialty chemicals and down-hole drilling and production equipment. It serves major and independent companies in the domestic and international oilfield service industry. Flotek Industries Inc. is a publicly traded company headquartered in Houston.