Bond Clement: Yes, Jeff, I’ll just add. Add something real quick. I think the operators and the mineral owners are clearly going to be aligned on this on one side. And then, I think where the conflict is going to come into play would be how the gathering or the purchasers — first purchasers interpret the data that we’re sharing and how do they reconcile those two between an instantaneous continuous measurement point, in terms of evaluating BTU quality versus, like Ryan said, one sample point every 30, 60, 90 days, whatever the situation is. How do they reconcile those two in ensuring that all stakeholders are paid on the accurate amount for the value of their product?
Jeff Robertson: If a midstream gatherer has a more accurate read on what the BTU content is headed their direction, wouldn’t that make them more efficient in terms of how they process?
Ryan Ezell: 100%. And when you combine that with what our trans mix capabilities are, it’s even better from that aspect.
Jeff Robertson: Ryan, on chemistry, you’ve obviously had the ProFrac agreement in place for a while now. When you look at external chemistry, do you look at the opportunity to form to take that from a transactional business to more of any kind of a strategic alliance and maybe just a basin centered alliance with any of the pressure pumpers?
Ryan Ezell: That’s another good point, as part of our overall strategy is around that collaborative intimacy with these customers. So, as we began to really diversify our revenue stack, I would say we have a 50:50 split between service companies and E&P operators. But to your point, those relationships with E&P operators becomes extremely important when we look at our chemistry management and what we call the external transactional revenue stream, because we do build long-term partnerships. And what we’re starting to see is they’re becoming much stickier in performance because they are starting to realize the gains on the return investment in the chemistry. And if you go out and look at a lot of the public space with particularly some of the E&P operators, they are talking about chemistry being able to unlock additional barrels out of a reservoir on the different type curves.
And so, we play an essential component in that. It not only brings a sustainable green technology, but also that dramatically improves reservoir performance. And so, what they see is to me that gives us a great opportunity for less volatile and longer standing relationships with the E&P operators.
Jeff Robertson: And lastly, Ryan, do you think your chemistry solutions, in terms of well performance as companies do a longer laterals, does that put — does that help the kind of chemistry solutions that Flotek provides in terms of driving demand, which can improve performance?
Ryan Ezell: Well, I think it all in line locks a huge opportunity because part of drilling these longer laterals, we look at well spacing. We look at overall fluid design from even how they drill them, the actual completion that they do, all those things become extremely important even when they look at the wellbore cleaning before they do the actual frac. And so, to further up this the chain we get involved with our chemistry, we can match the clay control, the corrosion inhibition, the proper surfactant technologies or any solvents that need to come in place, demulsification. And so, I think it’s a huge opportunity. To me, as you get into the more difficult situation, a commoditized chemistry approach becomes not viable. You really have to look at how do you customize this chemical solution and Flotek is the best in the business at doing that. And that’s where I really think it opens an additional opportunity for us.
Jeff Robertson: Thank you.
Ryan Ezell: Thanks, Jeff.
Operator: Thanks. [Operator Instructions] And your next question will be from Eric Swergold at Firestorm Capital. Please go ahead.
Eric Swergold: Hi, good morning gentlemen, and congratulations on navigating through a very difficult time, with ProFrac. Could you talk a little bit more about your business away from ProFrac and what gating factors there are at this point because you’ve done an admirable job growing your business away from ProFrac on the chemical side? What factors are holding you back at this point? Or is it really just a matter of how many salespeople you can get in front of how many customers? Thanks.
Ryan Ezell: Good morning, Eric. You know what? I think, number one, if we look at the non-ProFrac related revenue as a percentage in Q1, we were sitting in the 24%, 25%. As we’ve exited the year, we see it sitting at 45%. And we’ve seen growth in that Chemistry segment of the business every quarter throughout the year. More importantly, Q1 to Q4 is almost a 200% growth. And so, for us, we’re continuing to push in that terms of market share gain. I think that is typically a little bit longer sales cycle because it’s a lot of the value add technologies and we are actually starting to see that continue to grow. We’re seeing the Complex Nanofluid sales grow. And I think we’re going to continue to see that. I don’t feel that it’s not necessarily always create that discontinuity piece there, but there’s a multitude of advantages of what we do on the transactional piece and I think that’s going to grow all the way through 2024.
And then I think JP3 will continue to contribute with that significantly as we expect that 50% growth in 2024 as well. And I don’t think there’s much of it holding back. When you look at it right now, you’re going to see probably a flat to down frac fleet activity in North America land. And what you’re starting to see is a re-emergence that we call like Tier-1 customers where you see sustained plans that are long throughout the year. And that’s the customers that we’re pursuing right now to really get our chemistry in there and show the impact of some of these major basins. So, we’re actually really excited about this opportunity to meet these headwinds, offer great opportunities for good teams to navigate the wind appropriately and really pick up some market share.
