Flotek Industries (FTK) 9 Nov 212021 Q3 Earnings call transcript

Greetings, and Welcome to Flotek Industries' Third Quarter 2021 Earnings Conference Call. At this time, all participants are in listen-only mode. A question-and-answer session will follow management’s prepared remarks. [Operator Instructions] As a reminder, this conference is being recorded. It is now my pleasure to introduce Nick Bigney, Senior Vice President, General Counsel and Chief Compliance Officer for Flotek. you. Thank

begin. may You

good We and with your us today. morning, you appreciate everyone. participation Thank

and the today's our Borton, for participating Gibson, today of remarks Data me Joining on concerning Ezell, Ryan will Executive TengBeng President quarter. President and the first Analytics Officer; prepared and Chairman, Technologies. call results Officer President; we Financial business Michael On and Chief Chemistry Koid, of call, Chief John are provide

Yesterday, answer available be any and our questions Today's Following we that, have. third is released will available announcement may which call we website. on the for also will our a replay webcast earnings you website. on is quarter, being our

or begin, are that Before please our make any for note on future forward-looking we events regarding statements. we comments expectations projections today's call

to we listeners subject which control our number materially with turn from expectations, a are and and our in factors results John. non-GAAP provided differ of reconciliations our and I which Also, of uncertainties, SEC. refer please to release, advise risk with are call. current statements to accordingly Forward-looking review many earnings beyond releases can actual cause the now to our risks our the our this And on we will may to earnings metrics it as discuss over in filings that and discussed

you, Thank everybody. and good Nick, morning

our the grow the issues. hard to numbers this. our revenue data favorably walk versus is later When second We've to the strategy third a detail quarter. financial third XX% our working I'm believe compared of accelerate and I'll we up peers. through through little some reflects been all for for remaining gains companies, compared that service We execution call. Mike against focus approximately analytics and you and very quarter growth quarter performance chemistry the in going on performance of talk report to quarter-over-quarter to pleased quarter the to we in technology see our third modest resolving revenues Our more the sales our revenues. Borton quarter. about from second the oilfield results larger review legacy

our of as strategy impact. And a seen COVID. emerge already we've us priority we positive from for a execution Our been sales has

folks our I that in certain new quotas sales to professionals had go-to-market our eight the we During three executed will with are trimmed and and that sales proven previous industry professionals the members we decision supporting second XX substantial in board call, report brought business strategy. and team. can quarter hopefully communicated roles as date, our I record in cost chemistry well. on new areas reinvest Their on role all for We've analytics. that to new These help us here relationships highly data track experienced sales people in their and execute

We We strong agreements been growth these efforts our product continue execute a diversity and to Ultimately, transfer quarter. this sizable and XM Hurricane Ryan indirect the to as that this reinvigorate looking as in representation in mentioned, ProChem certainly addition upside with has an four and agreements into more give companies. access quarter some our patent also to returns. our with this that had our new And facility outdone, the business sales the professionals demonstrable ratio. strategic potential the broad Clorox, service, deployment particular as with we the which of technology. well sales certainly We activity a successfully of do manufacturing believe significant pending our continuity us to targeting JPX cost in to to opportunities. approach. well strategy not versus releases sales ECT be over presents a and the and We performance sales immediate quarters for detail give segment. to third believe like leverage fortunate the has had ProChem’s expect also strategy of quarter are continue our impact and is to for lot milestones to There sales in same. around us few Gojo, to in to ProChem that signed were we that you highlights operational offer and We revenue press key We going issued next are see to and has didn't force minimizing These alliances third customers. utilizing us particular that invent of I are over a new over past were spur was established minimal increase suffered passed two Louisiana. the a geography. ECT damage model terms and almost and able a several and there directly channel Ida revenues benefit we industry lot rail the additional to in companies ECT on

The application. release we've AI gain of will Koid you online goals of later growth. revenue sales, two ground international and first on machine analyzers, all will those anticipating. those been concerned I application, releases. profitable the deployments let which based believe help The give We around increasing our excited learning color more very that certification the international overall was announcement us about, which AIDA for launch our we're for stated

decent and of ProFrac’s year's examples Now Alamo Dawson next we Pumping, Geophysical. of consolidations M&A Pressure interspace, Wilks include merger FTSI, pace continue of acquisition to with activity acquisition recently in see a

currently quickly of for cash requirements would are fit only within deals are We responsible criteria deals execution criteria, shareholders. XXXX. and to chemistry a could at in the translation them, is without environmental changes consider to our Today, that a you're market involve possibility emergence produces of occur that widespread industry. barium data the widely and levels. drilling on be demonstrable whole a levels. as partner change is for operators. And groundwork our industry be culture made ESG the the metrics not JPX operational used likely accretive. China positioned a this culture table as at to now habits of stakes If the considered ourselves differentiating late, across in China. critical M&A market the the have developments sanctions establishment dramatically, rapid sustainability sulfate, environmental Flotek to the there become for and and believe demand of potential finally, we safety culture cultures have and path will C-suite industry sanctions we're uncertainty to our pace bidder. the success that will is environmental path supported a strong industry continue Supply with of evaluating deal actively we the some to that the the that evolving look around to But watch an opportunities polyacrylamide sustainability has prolonged adoption to concerning The successful strong are choice quantities of and to that the is factor both With by These amount the of Similarly, that business and the like. see and well considerable chain and in sales footprint buying and There relating OFS what alignment an doubt company's we of at to latency customers. adoption the objectives. of three main defines against in our performance The capital. There I will We key partners be exports enhance for philosophical media and principles influences considerable is of board our solutions. desirable the access adoption by also become topic still of looking and well attention ESG marketplace success. gotten strategy our that as in the a industry capacity, is our effective industry's objectives a another no the ESG

Additionally, have structure in system implemented more transportation function. up us and we and the monitor of to team for to made is also environmental opportunities with to these potential forecast increased impact constraints and a complexity, chain to adapt us pushing our seamlessly to that our and communicate supply they processes sales implemented sourcing customers to These present mutually designed customers supply prices inflationary We've logistics advantageous have outcomes. to and factors. experienced in factors agreements. investments strengthening We've are that work delays. help with contributing and We've designed many macro own pressures international

business. Now, what And what just in to most as legacy matters. a our the see our of one highlighted I to of we accomplishments really my quarter want comments so path discuss however, the around forward, we've take moment of far done

our of a and with chemical of ADM. commercial we able result month. course that X.X the of as bringing we contract know, last a company were our this we need. you company of close In the type a in as accrued matter at a and litigation. counterpart contract became that losses end was when inherited the expected of I As we in in booked Earlier XXXX, liability well incur excess contract. year, to terpene started involved Florida Chemical for litigation At to million of XXXX, the and litigation an for and were successful we its IBM we pursued audit, we parent request I in that Florida result and to a the with the to litigation, settled find of

Mike million will a behind the to with and of terpene. for IBM additional We're to and to part terpene And million liability to X.X happy release pay comments. settlement agreed of as pounds us the you X the grateful allows a us. we're in XX.X with well, negotiation. million contract is to matter more Chemical us their legacy business his about this accrued to it the terminated X.X Florida obligation put which willingness As purchase tell in an engage confirmed we This

data that, to to I'd ? analytics. with over it to TengBeng cover Now like TengBeng turn

of make everyone. John. international we segment, you, significant the our continue the progress Thank front Data Good part on strategy. to Analytics as morning, growth In

common analyzers Verax designed markets, As including the called certifications hazardous Verax for ISX/IMX, degrees We are press industry to dust ambient operating environments, John line multi-channel from analysis pollution a single locations temperature recently harsh sandstorms. globally. is international mentioned, including new XXX of XX release at some operate to extreme conditions, Fahrenheit. or degrees in And the for These C, of systems. obtained and on channel use a did we

is interfaces pipeline through another application international pipeline. analyzers the ship prospects analyzers patent new analytics modeling. additional of moving Detection Interface this learning provides know chemometric is without a to the and in certified expect we Advanced Pipeline operators more Our markets with solid opens data need new XXXX. fields which as for Advanced refined it for This through us, operators the this of protection pillar We or created line or growth this or using real-time that pending press of is to this The mentioned between revolutionary John on patches, advanced sampling recently did launch we application differentiate AIDA called application Algorithm algorithms. pipeline in future. value enables has the with batch launch new machine a AI This learning two plan a machine to for us. as release, will applications speed. arrived certainty significant, of and the application up

XXXX. third the to rather that segment. said encouraging I'll subscription Having has as push when will significantly. sales a subscription chemistry hand that we and third this the towards recurring for continue. been expect the new some are is expect year, to to we XX% Ryan extended John quarter While compared customers applications, that towards capital seasonality growth mentioned professional discuss this added than for sequential purchase. a push size last to revenue annual With well of the our we model three decreased and further And model we quarter growing year. lowest Also our trend revenue in move revenue that, due technology field grew historically to to quarter over growth Ryan? as the

At our to strategy operational and Flotek’s sustainable, the collaborative Thank chemistry on you, completion optimized on to the professional both and pleased solutions technology highlighting our technologies ESG that performance, chemistry on I'll which of everyone. chemistry gaining technology solutions then consumer value for energy return momentum. to invested partner focused I'm third good energy chemistry to of industrial report elevating quarter, maximizing their chemistries, is morning and be lowering Koid segment Today, our chemistry and being our choice solutions. includes fully cost delivering differentiated moving delivering first discuss and by capital. improved customers executed performance,

minimize to E&P quarter are stack to risk commitment growth thus with We of both diversify see as and second our well service continuing both delivering customer domestic on operators revenue international and our companies, as concentration.

experience the structural force the entire size third disciplines our by adding of quarter, industry of of energy the XXX the multiple accelerator doubling in implementation years we over in lifecycle and sales Now process. concluded the our changes across in

the management costing real-time modules of we demand and to Additionally, velocity and geographical system, digitization and completed pursuits. efficiency our drive relationship online customer customer planning

report pleased outpacing share XX% As to quarter; first energy third significantly is market growth. we're approaching the the following a chemistry for and indicating result, revenue highlights technologies plus improvement quarter-over-quarter market at for the

and revenue companies. rebuilding new on to Secondly, progress grew XX%, our customers number XX% generated we the diversification. demonstrating revenue make lowering continued indirect accounts from And to improving non-core grew total while with customer or by in emphasis concentration the of service continue quarter-on-quarter market notable channels

of one services generation market system with top in proprietary facility service operations. in revenue trial of solidified adjacent with to the fluid Saudi Ida. drilling Arabia. We the geothermal our at international extension to Raceland, logistics contract additionally, trend Furthermore, segment while in energy a operator we've NOC hydraulic Louisiana, four-wheel executed a a that accomplished a through And and company providers successful partnership major entry of the a water slick five-year cementing and materials Hurricane fracturing an expanding into have business with the major world's service Flotek’s oilfield deliver impact

minimizing are purchase key product as proactively entered prices secure early with top continued Now the for negotiations volumes our material future of allocation also with as we on risk, suppliers opportunities and commercialization scorecard we which ESG assessment, of are goals, spirit XXXX we reporting identifies support focused in into chemical well full operational enterprise pleased Flotek’s the management. risk finally, cycle analyzes and the to customers announce and to And efficiencies ESG utilization to growth.

our chemistries to turning professional Now business.

quarter, third line success. and the progress long-term into we a During saw transitioned significant the product

technical organization to supply Our to uniquely assets, chemistry leverage chain, at teams buyers the same allows synergistic and and core markets. the adjacent with approach the utilize logistics

most opportunities. the attractive With flexibility to to deploy the

chemistry the building for And update, to our these executed our which partner pleased sustainable categories, a are in and that our as will maximize segment. solutions see collaborative our the professional since value. We have contribute following to we milestones diversification of customers chemistry for momentum last growth choice

agreements First, with signed suppliers. we contract manufacturing three blending based and U.S. toll

segment customers with enhanced the continued we forward and to adjuvant the operate We and finally, over I honest, be our provide from professional chemistries very add also were expansion continue states distribution that solvents agricultural empower gain XXX an and to for to a XX our we significantly sales auctions market technology sales now revenue product representations our representatives. line able It's for coverage manufacturing leverages via about four chemistry with a private to with very agencies, XX label outlay. to redistribution We're opportunities important groups. applications. force with our we gain nationwide to with to capital we're our green note which chemistry broader adjacent license excited access this also commission market based to indirect reduced faster model in able extend with future to solutions. got look as social product And line

the Mike to turn over financial our I'll Now call discuss to results.

Good Ryan. everyone. you, Thank morning,

recap financial will performance. I quarterly Now the

customer. declining a sales from XX% from was X.X the XX% second the million from technologies quarter this During in in attribute of million decline consolidated By revenue XX% of second XXXX. increase the quarter of XXXX quarter large of an a up the well over chemistry driven is revenues million from chemistry our quarter of was QX third of segment QX in by quarter, had revenue third activity the XX.X The with loss XXXX. XX.X primarily QX reduced

These quarter. a returning the partially several drops by We were drop from a in significant customers sanitizer sales year and third offset new also ago. in saw

was of revenue Turning from quarter quarter. analytics of second revenue below XXXX, to the segment, of the although data [indiscernible] up XX% the million third in X.X

and the terpene to XX% the quarter JPX quarter. payment. $X.X million in by higher reduction [ph] were expenses XX% for decrease were Consolidated quarter revenue offset net partially in Third Operating rationalization the impact a XXXX reserves expenses expenses due the analytics. lower primarily release the of the the to third sequentially third prior associated million the year's in product earnout access level XX.X was was a million by $X.X higher higher data in quarter X.XX quarter year's $X.X ADM due provision. last pending the offset associated The material the since costs from million loss second of quarter. expenses clearly with historically, decline of QX down associated X.X million [E&L] of operating operating reserves million and were

a quarter $X.XX, XXXX. cents, provision current QX whereas the roughly include settlement and rationalization diluted JPX XX.X inventory current $X.XX diluted a diluted earnout million JPX second $X.XX quarter. of the ADM of compares in the EPS per results of loss impact $X.XX of per in share of negative impacted share X.X as XXXX or the per period the cent G&A an up X% due share diluted the severance XXXX the significant of loss third $X.XX. improvement quarter. earnings is to accrual quarter was the prior which G&A with release of fees retention operations profit versus employee legal credit The prior second quarter. We higher QX. catch million contained quarter to associated XXX,XXX corporate for the reduction bonus report decline -- a remaining the profit is it and or primarily quarter is $X.XX in from of accrual. the credits Third the Also, share are for loss cents, by a all continuing also The over quarter settlement. per ADM This the $X.XX impairment of the in includes accruals third

for year's million and X.X loss than million. quarter's lower was X.X quarter Our of adjusted million third of the last last X.X a loss loss of EBITDA

on our balance move million at the the remains let's with sheet, in preserving second equivalents quarter XX.X and versus of million on improving of end liquidity Now third XX.X to focus the where cash quarter.

Our cash the losses and operating extending position by impacted primarily payment outside U.S. was the customers terms

by positively XX% position cash in levels. reduction Our a was net inventory impacted

to seeing the we our sheet. some are million In to side, PPP Flotek for in for payment the forgiveness prioritizing all the are of late On nearly SBA products. some who of customers application X.X terms September, submitted our remaining balance agreeing payment of better on loans the

to of pay we on to of loan working years In due we asset approval continued growth as a Furthermore, we two. addition, use capital in instead be PPP unforgiven in fund late October, back to any balances five term which received baseline, expands. an over business diligence the will

Lastly, agreements with Monahan facilities. we lease and completed our both long-term Waller

will also national The firm our to for one have with settled and a next renegotiating to cash that applied ADM, of estate includes employee sheet associated engaged the to balance reduce assist over outlays retention associated We quarters. payroll be that $X.X employee million future outside credit in The or be real will several fees of a and sale legal payments includes settlement balance way taxes. facility also to balance of sheet market to our the the payables facilities two leases. subleasing with

previously an efforts would you give concerning Finally, our remediation XXXX update weaknesses. material to reported I like our on

operating begin we new executing also very The exerted controls of the good year effectiveness audit our more and weaknesses. progress into key to in the We in management implemented improve accounting have finance certain by house. made and team internal controls the of material bringing the program with, plan. control over areas work remediation throughout To

program testing quarter. fourth continue the ongoing and Our to is will

be XX. to December We remediated expect fully by

for to back Now I'll it turn closing John comments.

held increased But prices for lot come last Mike, I call, think QX TengBeng. home out and we're a second took go in I to back faster of us during Last week seeing year, remarks people Ryan January. would than those be essentially Thanksgiving of of many unlike year until you, criticism the participated. and the Mark's XXXX not true. But have remarks. would crude Thank most

which to look done today, level about we've to order is activity seeing. excited and the still address to on right $XX and the barrel we're in from is and continuing execute what for that, seen room, continue our focus culture is to going and and for forward. remain concern. the in I we a first thank so our We're it excited that'll and the continues it's And team try WTI activity maybe I'll climbed services, there since Christmas members, more There's the firm to XXXX. steady value the October, execution we they year-end we're make about of provide we're our And our particularly growth when what our through third that an even provide that forward. to available with primarily up improvement you foundation to feel about call, up confident to the let our We Flotek continued price the consistent, next as hear shareholders remaining a prices increase In on holidays open well call current through. up need got to cash that. developments QX And define accelerate the In close, one saw we're support. customers, our the all And most us to going that fact, time to we've levels environmental we're reached and strong. of increasing me strategy products economic quarter continue we've of questions. our positive much to secure added the going as going that a going their positioned elephant next confident adoption doing all us to to is of And going element principal what we that and

Thank you.

[Operator question-and-answer Instructions] with the Firestorm comes Our Capital. begin from first Swergold now question We Eric will session.

that on players, ask question number companies, I us you. know of either back I'll because chemistry color get and number I Thank think questions. a you state-owned then CNF one can oil idea test shooting have But people or big will at. or would some evaluating you're of to queue some E&P size what and companies I in give the that targets in helpful from be integrated, have your are global for and

Yes. and step I'll in go that. with ahead

look now have there. ongoing I size I'll the international about campaign's markets from So at when the the that talk and we it wise, first

be full also, a those expansion to mentioned, we've of great the seeing remediation the with for nanofluids, Basin. are as And in Arabia. the full well quarter-on-quarter. percentages are Anadarko the also along a continuing And we're water utilization in help to DJ. mentioned I going and double-digit we've full growth them Saudi fluids had are our us complex had with players is, of then in actually Arab line for deployments the strong to Kuwait, grow or hoping pursuits in application to moving couple applications those quarters. development performance with needle growth NOCs Permian NOC there. that of field the We've us so will to looking we've trial looking the as as that nanofluid in for Basin, the applications. is improvements field mention thing we're final Emirates. add I'll As We've then, seeing in continuing in and flooding and in those improvement with United the independent data success Canada, well far. those also move at these remediation But as the major we're were some basin, of and markets. a prior solid major seen Permian and in be major in And in California complex in the also They the well again, as into for the And players continued tests And some trial as

unique independent that things. Middle with I in blend to large NOCs of are in So help to out the quite hope, and going magnitude this needle some that -- us in major a a the move few XXXX. of kind of East really

Rice. with question next from comes Our Daniel Johnson Burke

I then, there by guess rebuild is companies Let's experienced chemistry see. on that the via get to know other the that guys been we oil sort disruptions your think reestablishment that rebuild hope customers, update you two or to on larger going? due understand just of those was Was on I into possible. the you Can the update an be sales an of wondering I you've expectation kind backed been field, also M&A? could update that if working us connections two And energy service working have if on would channel how side. questions of year-end. or to

XXXX, our So in terms the with movement to of, right great indirect the also as maintaining for chemistry you part chemistry engineering of QX qX chemistry we're to XX% channel. seen are, be some going that in consider there's few full indirect aspects in profiles, that the of we're some compare start that me of the company testing. seeing we've look in what it all we year down to that last and let even doing that that applications, data I'll a we're analytics we And now. for quite if We're markets indirect at at in continue talk own growth versus say and part service, about XXXX, QX. through channels improvement avenues prescriptive service see components seeing channel look the a were that applications And in laboratory when we we

we're moving. a to operators to really in follow those channels. strong indirect our about that's putting E&P even with So us And up happy where position that's

there with of now Now, are other in we now. right just when reengaging in in out for kind of the that future discussions the XXXX. major one an two, the right And activity would of for because two process one the comments look at them minimal It's ongoing around the say customers, we I point. there's that, that is that is,

think are ago. have the we excellent we had actually in I relationship we three issues that don't Daniel, quarters that,

willing just buy they're We we impediments to provide this and to from a no to them and There's great purchasing point. at are solution us. business need a

we've think made us forward. over the put good I months, So to a going in tremendous position progress relationship last XX

Okay.

in I anything as environment one I Let discernibly on side? speaking, from come side, the and back the data ask term, the, the mean, near impacts the I in JPX outlook seasonal on harsher the then, it's the unlock you me that stronger QX of mean, QX, in analyzer. practically pivot guess, some does

Thanks, Daniel.

with international. certified obviously, biggest our had think. that this before we I new analyzer is for and of America analyzer, not one challenges the was that North that

bodies, to that we've for new So other a two known one International international, goes and ATEX is one build different is IECEx. is certified the as through one

did IECEx, have before. market ATEX So some have that up for requires a so countries we opens require us not that some international we certification, in

an all wanted analyzer know, pollution and as as East, conditions, extreme for can you including that example, well as well. we the obviously, Middle Secondly, handle in temperature,

we able we with can to Europe, that. So And as in countries certified for sure rest we the well. Asia, cover make Africa, then that of the get are that,

opens suddenly, market new So up it for us. a

We expect lines the probably we'll of this ship that XXXX. newer some in

So yes.

That's a good question, Daniel.

the at the to pilots cycle equipment. couldn't had of we Koid's certified leading, started, we we until but the that look get to you had sort equipment numerous that needed pilots sale If deploy we the actually

then have we convert go we the will pilots Now pilot and certified, into the the that equipment stage, into sales.

an don't environments, the sales pipeline without know great for a were on we how got the put we've end cycles, it. certified But so there. to VOCs working you in And

a are initiating, JPX So most conversation have digital talk mean, pilots this and the transformation. people, beginning in the of international you part for on now about market. I opportunity the it. exciting it's when to in that the exciting the exists is And go we that see and

it. Got

Okay.

promised, you We'll it now, some see tuned, I'll the future as guys. you for But time. leave color liquidity Let's thank stay the side. there, on the in for for John,

with Our Instructions] comes Jeff Robertson Tower next Research. question [Operator from Water

taking for my Thanks question.

model the to moving guess I on term enhance your how wondering or some data services. either enhance analytic I'm that model, to longer will if through subscription or that mentioned ability I'm expect subscriptions, TengBeng think adoption or you of I customer wondering a revenue relationships? more the

idea in that to predictable term, the really the to future. get a So longer annual whole is recurring revenue is

So that's the plan.

purchases. still obviously selling we Now are capital

moving So that. we're to selectively some applications

will subscription, obviously, But up. a when to from you'll the see drop. a a purchase move long-term, capital that you in pick revenue Now,

to the it, sale. a is is equipment recurring describe one, And three be had we one second hybrid. the now, then, right revenue, sales annual interesting which working, have It's I models If third would the Jeff. preferred an

converting bought a so a they more selling of still that opportunity buying into technology, have it's deploy that into ARR. a we're our from And them historically few have lot were equipment since or into where to people the hybrid

And so working we through cycle. are them that transition to

them equipment, them We take ARR to often can ARR. a hold us. to time out equipment. hardware, judgment don't leaving too us. buying for extended want But They're out discussing like cycle and are because so the I or just them to we long. sale just it push of precious and business Koid whether the get to they when to some you revenue hybrid is -- and to want cash not to push sales does cause And buy

So we're working through that transition.

John, does analytics? customers of have data that the potential model, for number you increase

want like buy It to depends. It’s equipment. countries they interesting. Like, addresses some Koid too, just ARR, don't

purchasing want for to in maintenance. base they a designed don't have designed pay like equipment, capital looks not they're business. the software deploying it, subscription They're And to so and

it. a preference. they again, and use buy just license to be they when buy to want update then then, would And it, their need they So just

to DNA. to their after So or goal part because they that not the in ARR adaptable a in. it's the SAP that there, be selling is on measurement of markets system, change part -- something in it's yes, any our you're a But their have their value like that it not good and ERP you -- other is see desktop, works. may it's the about get it's just of they or they're it's in we're it, it's out sticky we They there off depend where is integrated in on equipment the process. an and operator, turn And business don't just to there

So that. working on we're

Thank you.

else, welcome. You're Anything Jeff?

that there's other storage you're through guess you those data carbon of analytics, you're that one new either lot talk of have a that anything evaluating chemistry extension to types opportunities? about working, I potential capture do or and obviously all

CCUS can utilization that, instead just injectability of interested most in by COX turn CCS, I sequestration. people has chemistry. now be our Working mean, actually capture enhanced carbon sequestration, into of are the on

area, of COX. the to understanding and the and think Gulf the Then fortunate that It's injection sequestration of that close are and a very we're Coast looking of to We're expand. worth the state offshore of we're And of discussion looking the this in near preparation help in to Miocene what in solutions Texas for it's that we're an at the Bureau year's at we Texas. Texas rates a Economic opportunity having mean reservoirs environment. the for that because acceptance I reservoir going chemistries Geology in so identified at best

like fields know of held it XXXXs that natural that think I could hundreds depleted into So XX put years, for be gas could because be hold gigatons they of years. it for would something offshore we

so And that. be Coast that is infrastructure big the evolves a part think to Texas I of Gulf

this The real we're in or part bigger to node the here and we difficulty. there's will comment trigger Second be But don't tremendous is, as and But at it think going onshore COX Capture gotten that volume on inject a we'll in if I can to point. that saltwater reservoirs have the work place, of such America capture the in capture to looks a think one any enough brent into without we that is can it efficiently. opposed the be this I needs really how like we'd subsurface injecting to problem through North be it, saltwater economically, it solution. injection more of

Capital. up follow Our a next with question from Swergold Eric is Firestorm

two have questions. more Thanks. I

the environmental because big be the that new up a side, in you're COX doing can some on focus to Following regulations? seems you of methane, about what us tell what

measure is is going measure much to Well, in it, the equipment. that quite other laboratory does frequency feasibility continues it the because very sweet the But of And for in we here probably we future the some everything good. have to particular not sweeping looked generation to analyzers done we increase box, it's add of of for how the best a would money, with on, molecules to a the down, go or customer, It other additional and that not we're spectrum excellent to our on have because JPX measuring us with expand methane. mean or see gases we're work analyzers. to work experiments did monitors, molecules opportunity COX, known the our for inside an in the or

All of Eric. on, things are those being worked

are environmental nature and I the environments us the expanding of think measure. going support regulatory what we to that

estimate quarter efforts have you what to future. we so look going that not on part but area, on it's I can continue enough that in we close that give important an the And an active at of

of unfavorable this can is Okay. then back But gotten to out improvement or margin cost you've there having business And able potential? your And of ADM. be old circling your now that terms contract you? discuss to that a if behind kind Should not. going in CNF sure a forward? I'm margin sold ADM not contract we of put goods of achieve better that

were the associated uplift we sitting looking in with the General have an That's don't did any a I sure market a price we the Counsel, cost good question. buying of terpene But I'm and here my matter violate going that what making without agreements. settlement material, lift. no had that's that to so above buying was. to up I it market because that be come There that, mean, pay to impact. fixed us we give certainly should it we'll some is us back fees was And a at

blending chemicals. are we course, that other of with Now,

like gets it in in the using less diluted gets the our the past. so diluted And blend. And it were some in than impact we we blends of margin and actual are part much

market out think which consequently contract. going opportunity we should us it And But us of I back for one we're a the the pricing, not margin through. as reasons is it tremendous So be some us. gets passing much it certainly needed to give get improvement. to of That's open to

my in quarter, then, well, they're terms ESG that in of change question looking where isn't you effort word the immediate, you call you the ESG in respect to at the relations, boardrooms to as at with of as did us on last terms last out in beginning presentation I update a Can major necessarily And is your ESG. upgrade corporate getting general, know terms of corporate ESG. pushing mentioned stands into but investor of

jump here, in on ESG, James going to basin. I'm scorecards let Ryan great

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Gibson I concludes turn any question-and-answer the John over for back to our conference like remarks. would to This session. closing

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has concluded. for conference The presentation. attending now Thank today's you

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