Ryan Ezell
CEO / Flotek Industries, Inc.
Headed by CEO Ryan Ezell, PhD, Flotek Industries, Inc., leverages its proprietary, cutting-edge chemistry technology and data analytics business to minimize the environmental impact of the oil and gas industry, while also providing innovative and impactful solutions for its clients.
No stranger to the oil and gas industry, Ryan Ezell, PhD, can spot a prime opportunity when he sees it. After 13 years at Halliburton, Ezell joined Flotek Industries, Inc., a specialty green chemistry and data company, with the understanding that it offers “differentiated” technology that could drive innovation and minimize the impact of energy on air, water, and people.
An industry player in the oil and gas industry for two decades, Flotek offers tailored chemistry technology and data analytics solutions, making use of its some 200 intellectual property patents to drive results and financial performance.
As with all veteran companies in an industry, there comes a time to update business strategies. Laid out in 2020—but slowed down by the COVID-19 pandemic—the strategy required Flotek’s team to study almost 3,000 wells and use that information to drive forward its strategy of using its proprietary technology—what they call “prescriptive chemistry management”—to improve production while having a positive impact on carbon footprint and the overall environment.
However, Ezell’s strategy for Flotek isn’t just about what the company can do for its external partners, but also focuses on bettering the company internally by building key supply chain partnerships, reducing inefficiencies, streamlining products, and growing revenue.
“There’s a lot of evolution when we talk about Flotek as a chemistry company, and not just as a pigeonholed oil and gas company.”
Meeting Market Needs
Flotek “brings the unique handshake between the total cost of ownership and the environmental cost,” Ezell said in a magazine interview with CEO North America. When its proprietary chemistry combines with data analytics, it drives improvements in field gas production while reducing carbon footprint overall. “This differentiates us from our competition that’s focused on moving commodities at the best price,” said Ezell.
Advancements in engineering have changed how unconventional hydraulic fracturing improves directional drilling and various components of convention completions. However, “we’re really starting to move chemistry to the forefront,” he shared.
Reaching the Next Pillar
When Ezell looks at potential growth pillars for Flotek, he sees expansion of its core chemistry markets, which are completions, outside of North America. “We expect our international business to double in revenue this year and grow as a material percentage of revenue for the company,” he said.
Ezell is also looking toward the data analytics division, he said in an executive interview with CEO North America, citing Flotek’s proprietary Verax analyzers and multiple other spectroscopy methods that it’s bringing to the market. Right now, the production chemistry market has a multibillion dollar potential, and “we don’t currently possess any material footprint in that space,” he added.
He also has an expectation for growth in Flotek’s data analytics business. “We grew our data business almost 50% year over year in revenue,” Ezell shared. “We expect to do more than that in the next year.”
Optimizing Business Efficiencies
When this business executive looks at key areas to improve in the near future, Ezell said that it’s all about creating a lean, efficient operation. The question is, “how do you get to the maximum amount of gross margin and operational efficiency,” Ezell asks.
At the start of his tenure as CEO, Ezell reviewed the organization for any inefficiencies in operations, and he found that logistics, or last-minute service delivery, ran about 18% of revenue. Now, he said, it’s about 5%.
Additionally, the company offered 7,000 product SKUs at the time—now, it’s just 250. That process meant looking at better deals with key suppliers, various data structures, and indices pricing. Instead of buying spot market, every raw materials contract is driven by raw materials indices, “to the point where we can minimize the impact of inflation.”
Next, he asks more questions: “How do we become or create a service delivery-like ecosystem? How do we work with the best logistics and supply companies?” It’s done through having Flotek field engineers in place as part of its prescriptive chemistry management, running chemistry concepts that create efficiencies.
“We have set a record for volume of chemistry moved in a year in 2023, and we did it with 1/10 of the staff and R&D that we used to have.”
“We’ve continued to pick up market share and grow, despite pressures.
That all comes down to focus on execution, focus on safety, and focus on inefficiency.”
Building Supply Chain Partnerships
Because Flotek Industries is constantly bringing new technologies to the market, its top business executive said that he wanted to have a well-oiled machine on the supply chain side, and “building good vendor relationships are at the core of that.”
This bedrock point of view differentiates Flotek from its competitors. “A lot of times, innovative chemistry companies focus on a new technology that people will pay more for,” Ezell explained. “They don’t focus on the best way to get that new technology to the market.” Without that focus, a lot of dollars are left on the table.
Flotek’s core manufacturers comprise approximately 10 companies, with about five strategic suppliers that make key pieces of Flotek’s proprietary equipment. In a strategy to improve business efficiencies, Flotek removed intermediate suppliers from the buying process. Now, 98% of the chemicals purchased are from people who actually do the small molecule manufacturing.
“It’s much better to get the middleman out and identify key sourcing,” he shared, explaining that it allows Flotek to have a direct correlation to any inflation or deflation and be able to discuss key market changes that could raise or lower pricing.
“Your ability to manage the supply chain will help you gain market share during the ebbs and flows,” Ezell said, “particularly with the volatile and cyclical nature of the oil and gas business.”
