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2morrowsGains

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2morrowsGains

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Sunday, 01/14/2007 11:52:41 PM

Sunday, January 14, 2007 11:52:41 PM

Post# of 585
FTK...2007 Stock of the year...
(All information posted below is based on my DD. It is my opinion only. Anyone interested in FTK, should do their own due diligence.)

Flotek Industries, Inc. engages in the development, manufacturing, and marketing of specialty chemicals, down hole drilling, and production equipment.
They operate through three segments:
Chemicals and Logistics, Drilling Products, and Production Products.
A good portion of Flotek's products are patented and more closely related to the PRODUCTION of oil, gas, & coal bed methane, with demand being less dependent on drilling activity.
Therefore, IMO, a drop in o&g prices will benefit Flotek, as companies look for ways to increase production, while lowering their costs.

- Shares Outstanding (fully diluted) = 9.5M (Total share count only increased approx 1.5M shares in 2006. Very low dilution when considering the acquisitions and strong growth Flotek had last year!)
- Float = 6.6M.
- Institutional ownership (as of 9/30/06) = 2,940,822 shares. (46% of the float.)
- Other Key Statistics - http://finance.yahoo.com/q/ks?s=FTK
- More excellent Info on Flotek and their products - http://www.flotekind.com/support/Download/20070108.pdf

Flotek has pricing power in niche markets with OVER 50% of their growth and sales coming from PATENTED & PROPRIETARY PRODUCTS!

- Flotek currently markets their products in 20 countries!

From the 10/26/06 Saunder's Conference...

- "Our International customers are expanding dramatically."

- "We focus very strongly on expanding our patented proprietary products."

- "Very strong patented position in all product lines."

FLOTEK's PATENTED & PROPRIETARY PRODUCTS -

1. Specialty Chemicals & Logistics (Microemulsions)...

"We do not see any limit to growth in our chemical business."

- Chemical & Logistics growth was the strongest of all segments last year. Growth was 100% organic!

- Recently started producing from new chemical facility that will triple production.

- Recently started North Sea operations. Working on getting approval in ALL areas of the North Sea.

- Should be expanding operations into the Middle East & West Africa this year.

http://www.flotekind.com/products/MA-844W.pdf
http://www.flotekind.com/products/MAD-4.pdf
http://www.flotekind.com/products/MAD-2.pdf

2. Patented Petrovalve...

"THIS PARTICULAR VALVE HAS MANY, MANY VALUES TO IT, THAT ONE OF THESE DAYS WILL BE IN THE ENTIRE DOWN HOLE ROD PUMP BUSINESS, WHERE WE WILL HAVE OUR PUMP WITH OUR VALVE IN IT"...

- The patented Petrovalve increases production by approx 35% and up!

- This is the only valve in the industry that can be set in a horizontal position..."There's lots of horizontal drilling out there!"

- The Petrovalve can effectively lift highly viscous oil in heavy oil or tar sand production zones."

- Rapidly expanding the Petrovalve, Gas Separator, and electrical submersible pumps into Canada and the San Juan Basin.

3. Patented Gas Separator...

"You'll hear a lot more about that valve in the future."

- The patented gas separator combined with the Flotek's Petrovalve enables coal bed methane producers to realize substantially higher gas production rates and lower operating costs by capturing in-solution gas otherwise lost with water production. Add Flotek's patented microemulsions to the Petrovave and Gas Separator, and IMO Flotek will be a MAJOR WORLDWIDE CBM player within the next couple of years!

Flotek's projections...They are projecting $2 per diluted share for 2007. Flotek only has to increase their EPS $0.04 each quarter consecutively to hit that number. EPS will be higher than projected IMO, especially when adding in an acquisition or two.

And now for a very interesting find...

Halliburton's GasPerm 1000 sounds an awful lot like Flotek's microemulsions. (Whether or not there's a connection, remains to be seen)...

- "Halliburton recently introduced a line of stimulation chemicals called GasPerm 1000, which is based on a new microemulsion surfactant that removes water drawn into drilling formations during the rock-fracturing process."
http://pubs.acs.org/cen/coverstory/84/8447cover4.html

Take a look at these 2 links while paying special attention to the photographs...
http://www.halliburton.com/public/pe/contents/Data_Sheets/Web/H/H05092.pdf
http://www.flotekind.com/support/Download/20070108.pdf
(page 15 )
The pictures seem to match.

- The Application of Microemulsion Additives in Drilling and Stimulation Results in Enhanced Gas Production
By Glenn Penny and John T. Pursley - CESI Chemical a Flotek Company
http://www.flotekind.com/support/Download/spe94274posme.pdf
(Flotek's Glenn Penny worked for Halliburton Services as a research chemist from 1979 to 1985.)

Halliburton has locations all around the globe. If in fact Halliburton is using Flotek's microemulsions as an additive in any of their products, than there is no doubt in my mind that others in the industry will follow!!
Time will tell.

All of the information posted above is 100% my opinion. There is no guarantee Halliburton or GasPerm 1000 is linked in any way to Flotek. Everyone should do their own research and due diligence before investing.



The information posted by 2morrowsGains is opinion only and should not to be taken as investment advice.

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