Solazyme, Flotek Industries ink major advanced drilling fluid pact

In California, Flotek Industries and Solazyme announced agreements to globally commercialize Flocapso, an innovative, advanced drilling fluid additive. In addition, Flotek will market Solazyme’s Encapso lubricant – the first commercially available, biodegradable encapsulated lubricant for drilling fluids – in certain Middle Eastern markets.

Under the Joint Product Development and Marketing Agreement, Flotek and Solazyme will commercialize and market Flocapso, a proprietary formulation combining Flotek’s patented Complex nano-Fluid chemistries with Solazyme’s proprietary Encapso technology to create an environmentally-conscious, highly effective drilling fluid additive focused on better lubricity and greater stabilization for drilling programs worldwide.

Laboratory and commercial testing indicate that the Flocapso additive will allow the use of water-based fluids in wells that previously required more expensive and invasive oil-based products, providing an environmentally superior, more efficient solution to drilling challenges around the globe.

Under the Joint Agreement, Flotek and Solazyme will continue the development of the Flocapso chemistries and work cooperatively to market Flocapso worldwide. The companies are currently in an active validation project with a large national oil company in the Middle East and are pursuing commercial applications in both domestic and international markets.

Winner of the Presidential Green Chemistry Challenge Award, Solazyme launched Encapso in early 2014. With its unique, targeted lubricant delivery system, Encapso has shown to increase the rate of penetration, decrease drag and reduce both rotational torque and friction in a variety of vertical and horizontal drilling applications. This can lead to lower drilling costs, reduced non-productive time, and accelerated operations. Developed from Solazyme’s proprietary technology platform, Encapso is non-toxic and biodegradable.

Flotek’s Complex nano-Fluid, or CnF, chemistries are a series of proprietary, patented chemistries designed to enhance performance in oil and natural gas wells, including increased productivity through improved production rates and higher ultimate recoverability. The proprietary combination of citrus-based solvents and surfactants which are combined to create a nano-molecular chemistry provide unique benefits in the drilling process.

In addition, the companies have entered into a Strategic Alliance Agreement whereby Solazyme has granted Flotek exclusive distribution rights to sell and market Encapso as a drilling fluid lubricant in certain territories in the Middle East. In exchange, Flotek has agreed to certain minimum purchases of Encapso from Solazyme in the initial year of the Agreement.

Reaction from the stakeholders

“Our partnership with Solazyme is another important step in Flotek’s quest to identify and partner with innovative and efficacious technologies that advance oilfield chemistry for the benefit of our clients,” said John Chisholm, Chairman, President and Chief Executive Officer of Flotek. “Solazyme’s development of Encapso and its rapid recognition as a break-through lubricant in drilling applications is testament to Solazyme’s world-class research team. We are delighted to have an opportunity to work with the Solazyme team as we continue our focus on developing the best chemistry solutions for the oilfield.”

“We are excited to add Flotek as a strategic partner as we continue to focus on broadening the market and customer base for Encapso,” said Solazyme Chief Executive Officer Jonathan Wolfson. “As a leading, global technology company with a focus on oilfield chemistry, Flotek brings new opportunities to expand sales of Encapso in the Middle East, as well as to commercialize and jointly market Flocapso, a unique and high performance product that provides a large global sales opportunity to satisfy an unmet need through the combination of superior technologies. The new Flocapso drilling solution is designed to provide significant advantages in lubricity and stabilization and a much cleaner environmental footprint.”

“Last year we acquired certain intellectual property related to the use of CnF in drilling fluid applications from Tony Rea, a drilling fluid technology pioneer, which led to discussions and chemical trials with Solazyme,” said Chisholm. “As a result of Tony’s work showing the efficacy of using CnF to improve drilling results and the combination of Solazyme’s Encapso, we developed Flocapso, a drilling fluid additive that we believe will provide significant improvements to drilling efficiency and effectiveness around the globe.”

“We are excited about the opportunity to work closely with Solazyme to promote the use of the Encapso lubricant in the Middle East and beyond,” added Chisholm. “Our work with the Solazyme team and Encapso gives us great confidence that this game-changing technology has broad applications in many markets, especially those in which we have established relationships. Combined with our jointly developed Flocapso product, we believe this Agreement creates a meaningful advantage for Flotek as we continue to develop Middle Eastern markets.”

“Flotek’s expertise, infrastructure and established and emerging relationships in the Middle East make them an outstanding partner for Solazyme and Encapso,” added Wolfson. “Combined with our relationships and product support team, we believe the Flotek partnership provides an excellent opportunity to accelerate market adoption of Encapso, both through certain of Flotek’s distribution and sales channels in the Middle East, and through sales of the combined Flocapso drilling fluid additive worldwide.”