FLOTEK'S JP3 ANALYZER RECEIVES EPA APPROVAL FOR OIL AND GAS FLARE MONITORING REGULATIONS

Rhea-AI Summary

Flotek Industries' (NYSE: FTK) subsidiary JP3 Measurement has received EPA approval for its innovative flare monitoring system under new NSPS OOOOb regulations. The JP3 analyzer, utilizing Near InfraRed Spectroscopy, offers precise measurement of net heating values in flare gases, supporting cleaner operations in the oil and gas industry.

With over 55,000 flares in the US expected to require monitoring by 2028, this approval positions JP3 for significant market expansion. CEO Dr. Ryan Ezell highlighted the potential for subscription-based revenue growth in the Data Analytics segment, while VP Thomas Redlinger emphasized the technology's transformative impact on flare emission monitoring.

Positive

• EPA approval for JP3 flare monitoring system under new regulations
• Potential market of over 55,000 flares requiring monitoring by 2028
• Expected subscription-based revenue growth in Data Analytics segment
• First approved alternative method under NSPS OOOOb regulations

Negative

• None.

Insights

Environmental Policy Expert

The EPA approval of Flotek Industries' JP3 analyzer has significant implications for the oil and gas industry, particularly in addressing environmental regulations. This approval certifies that JP3's technology meets stringent regulatory standards, which not only validates the product’s effectiveness but also enhances its marketability. Importantly, the JP3 analyzer's ability to perform accurate, autonomous and continuous real-time measurements of flare emissions helps companies comply with new environmental regulations. This can lead to reduced penalties and improved environmental performance, fostering a more sustainable industry. Additionally, the capability to monitor over 55,000 flares by 2028 underscores the wide application potential of this technology, suggesting a substantial market opportunity for JP3. However, it remains important to monitor how quickly and effectively companies adopt this technology to truly gauge its market impact.

Financial Analyst

The EPA's approval of the JP3 analyzer positions Flotek to potentially capture a significant share of the market for flare monitoring systems. This regulatory approval often acts as a catalyst for revenue growth, particularly through subscription-based models as indicated by the CEO. The endorsement can drive increased sales and subscriptions, boosting the company's top-line revenue. Given the over 55% of flares in the U.S. needing regulatory-compliant monitoring, the market is substantial. It's also noteworthy that the JP3 system addresses compliance challenges more efficiently than legacy equipment, which can attract a broad customer base looking to minimize operational risks and regulatory liabilities. Investors should watch for quarterly earnings reports to gauge the traction of this technology in the market and subsequent revenue growth.

HOUSTON, July 16, 2024 /PRNewswire/ -- Flotek Industries' (NYSE: FTK) wholly owned subsidiary JP3 Measurement, a leader in innovative analytical measurement solutions, today announced that the Environmental Protection Agency (EPA) has designated the JP3 system as an approved measurement technology with respect to recently enacted flare regulations. This state-of-the-art optical instrument, designed for the precise measurement of net heating values (NHV) in flare gases, is the first to be approved as an alternative method under the new NSPS OOOOb regulations, supporting cleaner and more efficient operations across the oil and gas industry.

JP3's technology utilizes advanced Near InfraRed (NIR) Spectroscopy to deliver accurate, autonomous, and continuous real-time flare emission measurements. Its robust design is specifically engineered for challenging field conditions typical of midstream and upstream sectors, simplifying complex compliance hurdles. With over 55,000 existing flares in the United States expected to be subject to some level of monitoring regulation by 2028, this approval positions JP3 to significantly expand its footprint into this new upstream market space.

Dr. Ryan Ezell, Chief Executive Officer, expressed his enthusiasm about future Data Analytics applications: "The EPA's approval of the JP3 system for flare measurement is not just a validation of our technology—it's a catalyst for significant growth. We are poised to deliver substantial value and tangible ESG benefits to our customers, particularly in upstream applications. This approval is a major milestone that augments our expectations regarding the continued subscription-based revenue growth of our Data Analytics segment."

Thomas Redlinger, Vice President of Data Analytics, also reflected on the impact: "We expect the JP3 analyzer to transform how the industry approaches flare emission monitoring as it did with other applications within the oil and gas industry. By integrating real-time data analytics with rigorous environmental measurement, we are providing our clients with tools that exceed regulatory requirements without the operational risks of legacy analytical equipment. Several operators have already selected JP3 analyzers to help them address the new regulation requirements."

As regulatory demands evolve, JP3 Measurement continues to lead with cutting-edge solutions designed to address both current and future challenges. For more information about JP3 offerings, please visit www.flotekind.com.

About Flotek Industries, Inc.

Flotek Industries, Inc. is an advanced technology-driven, green chemical and data analytics company providing unique and innovative completion solutions that have a proven, positive impact on sustainability and reducing the overall environmental impact of energy on air, land, water and people. Flotek has an intellectual property portfolio of over 170 patents and a global presence in more than 15 countries throughout North America, Latin America, the Middle East and North Africa. Flotek has established collaborative partnerships focused on sustainable and optimized chemistry and data solutions which improve well performance and allow its customers to generate higher returns on invested capital.

Flotek is based in Houston, Texas and its common shares are traded on the New York Stock Exchange under the ticker symbol "FTK". For additional information, please visit www.flotekind.com.

Forward-Looking Statements:

Certain statements set forth in this press release constitute forward-looking statements (within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934) regarding Flotek Industries, Inc.'s business, financial condition, results of operations and prospects. Words such as will, continue, expects, anticipates, intends, plans, believes, seeks, estimates and similar expressions or variations of such words are intended to identify forward-looking statements, but are not the exclusive means of identifying forward looking statements in this press release. Although forward-looking statements in this press release reflect the good faith judgment of management, such statements can only be based on facts and factors currently known to management. Consequently, forward-looking statements are inherently subject to risks and uncertainties, and actual results and outcomes may differ materially from the results and outcomes discussed in the forward-looking statements. Further information about the risks and uncertainties that may impact the company are set forth in the Company's most recent filing with the Securities and Exchange Commission on Form 10-K (including, without limitation, in the "Risk Factors" section thereof), and in the Company's other SEC filings and publicly available documents. Readers are urged not to place undue reliance on these forward-looking statements, which speak only as of the date of this press release. The Company undertakes no obligation to revise or update any forward-looking statements in order to reflect any event or circumstance that may arise after the date of this press release.

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SOURCE Flotek Industries, Inc.

FAQ

What EPA approval did Flotek's JP3 analyzer receive for flare monitoring?

Flotek's JP3 analyzer received EPA approval as an approved measurement technology for flare monitoring under the new NSPS OOOOb regulations, making it the first alternative method approved under these rules.

How many flares in the US are expected to require monitoring by 2028, according to Flotek (FTK)?

According to Flotek (FTK), over 55,000 existing flares in the United States are expected to be subject to some level of monitoring regulation by 2028.

What technology does Flotek's (FTK) JP3 analyzer use for flare gas measurement?

Flotek's (FTK) JP3 analyzer uses advanced Near InfraRed (NIR) Spectroscopy to deliver accurate, autonomous, and continuous real-time flare emission measurements.

How does the EPA approval of JP3's flare monitoring system impact Flotek's (FTK) business?

The EPA approval positions Flotek (FTK) to significantly expand its footprint in the upstream market and is expected to drive subscription-based revenue growth in the company's Data Analytics segment.