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Tetra Technologies, Inc. s (NYSE: TTI) is an oil and gas services company with an integrated calcium chloride and brominated products manufacturing operation that supplies feedstocks to energy markets, as well as other markets. The company is focused on completion fluids and other products, production testing, wellhead compression, and offshore services, including well plugging and abandonment, decommissioning and diving. The Company operates in five segments organized into three divisions: Fluids, Offshore, and Production Enhancement. The Company’s Fluids Division manufactures and markets clear brine fluids, additives, and other associated products and services to the oil and gas industry for use in well drilling, completion, and workover operations, both in the United States and in certain regions of Latin America, Europe, Asia, and Africa. Its Offshore Division consists of two operating segments: Offshore Services and Maritech, an oil and gas exploration and production segment. Its Production Enhancement Division consists of two operating segments: Production Testing and Compressco.

During 2009, the Company’s subsidiary, Maritech Resources, Inc. (Maritech) sold interests in certain oil and gas properties.[1]

Company Overview

Business and Financial Metrics

Second Quarter 2010 Results (ended July 30, 2010)[2]

Tetra Technologies reported second quarter 2010 results of $0.18 per share, compared to $0.12 per share reported in the second quarter of 2009. Second quarter 2010 results include a non-cash charge of $8.9 million of pretax income, or approximately $0.08 per share after tax, related to the impairment of certain of Maritech's oil and gas properties compared to similar charges of $0.03 per share in the second quarter of 2009.

Consolidated revenues for the quarter were $241.6 million versus $217.9 million in the second quarter of 2009. Total gross profit was $47.8 million in the second quarter of 2010 versus $40.4 million in the second quarter of 2009. Income before discontinued operations was $13.6 million in the second quarter of 2010 versus $9.2 million in the comparable period of 2009. Net income was $13.6 million in 2010's second quarter versus $9.2 million in 2009's second quarter.

Business Segments

Fluids Division[1]

The Company’s products in the Fluids Division include liquid calcium chloride, sodium bromide, calcium bromide, zinc bromide, and similar products produced, which are referred to as clear brine fluids (CBFs) in the oil and gas industry. CBFs are manufactured and distributed by the Company’s Fluids Division and are also sold to other companies that service customers in the oil and gas industry. Its Fluids Division provides basic and custom blended CBFs to the United States and international oil and gas well operators. It also provides these customers with a range of associated services, including onsite fluid filtration, handling, and recycling; wellbore cleanup; fluid engineering consultation, and fluid management. The Company also offers to repurchase (buyback) used CBFs from customers, which it then reconditions and recycles.

The Fluids Division produces CBFs from its production facilities that manufacture liquid and dry calcium chloride, sodium bromide, calcium bromide, zinc bromide and zinc calcium bromide for distribution into energy markets. Liquid and dry calcium chloride are also sold into the water treatment, industrial, cement, food processing, dust control, ice melt, agricultural, and consumer products markets. Liquid sodium bromide is also sold into the industrial water treatment markets, where it is used as a biocide in recirculated cooling tower waters. The Company manufactures liquid and dry calcium chloride in production facilities located in the United States and Europe. It manufactures liquid calcium chloride from its facility in Parkersburg, West Virginia and has two solar evaporation plants located in San Bernardino County, California, which produce liquid calcium chloride from underground brine reserves. These plant facilities have a combined production capacity of more than 1.5 million tons per year. The Company manufactures and distributes sodium bromide, calcium bromide and zinc bromide from its West Memphis, Arkansas, facility. The Company also has approximately 33,000 gross acres of bromine-containing brine reserves in Magnolia, Arkansas, that are under lease.

Offshore Division[1]

The Offshore Services segment provides downhole and subsea services, such as plugging and abandonment (P&A), workover, and wireline services; construction and decommissioning services, including hurricane damage remediation, utilizing its heavy lift barges and cutting technologies in the construction or decommissioning of offshore oil and gas production platforms, subsea wells, and pipelines, and diving services involving conventional and saturated air diving and the operation of a number of dive support vessels. The Company offers integrated solutions to its customers, including engineering consultation and project management services. The Maritech segment is an oil and gas exploration and production company focused in the offshore, inland waters, and onshore regions of the United States Gulf of Mexico. The Offshore Division’s Offshore Services segment performs a portion of the well abandonment and decommissioning services required by Maritech, and Maritech is a customer of the Offshore Services segment.

Its Offshore Services segment utilizes barge-mounted rigs, a platform rig, offshore rigless P&A packages, two heavy lift vessels, several dive support vessels and other dive support assets and onshore rigs, which the Company owns and operates. In addition, it rents certain equipment from third party contractors. The Division provides a range of contract diving services to its customers through, its subsidiary, Epic Diving & Marine Services (Epic). Construction, well abandonment, and decommissioning services are performed primarily offshore in the Gulf of Mexico, the Division also provides well abandonment services to customers in the inland waters and onshore in Texas and Louisiana. The Division also provides onshore and offshore cutting services and tool rentals through its E.O.T. Rentals (EOT) operations.

The Division’s electric wireline operations specializes in cased-hole logging, mechanical completion services, plugbacks, bridge plugs and packer services, pipe recovery (cased and open hole), perforating, and tubing-conveyed perforating services. The Division provides services to oil and gas companies and independent operators, including Maritech, through its facilities located in Lafayette, Broussard, Harvey, and Houma, Louisiana and in Bryan and Victoria, Texas. Maritech acquires, manages, explores and develops oil and gas properties in the offshore, inland water, and onshore United States Gulf Coast region. During 2009, Maritech participated in drilling three wells, one each in Galveston Island 321, Main Pass 279, and Timbalier Bay fields.

The Company competes with Global Industries, Ltd., Offshore Specialty Fabricators, Inc., Helix Energy Solutions, Cal Dive International, Inc. and Superior Energy Services, Inc.

Production Enhancement Division[1]

The Production Testing segment of the Production Enhancement Division provides flow back pressure and volume testing of onshore and offshore oil and gas wells, providing reservoir data. In addition, the Production Testing segment provides services for coiled tubing, pipeline cleanout, blowout prevention, well cleanup, and laboratory analysis. The Production Testing segment maintains fleet of high pressure production testing equipment in the United States, including equipment designed to work in environments, in which high levels of hydrogen sulfide gas are present. The Production Testing segment has operating locations in each of the operating areas, in which it serves, including Louisiana, Oklahoma, Pennsylvania, and throughout Texas. Internationally, the segment has several locations in Mexico and South America, North Africa, Middle East, Asia and Europe.

During 2009, the Production Enhancement Division entered into a technical management contract to perform engineering, procurement, and installation of equipment needed for the cleanup and removal of oil bearing materials at two South American refinery locations. The Division’s Compressco segment is a provider of wellhead compression-based production enhancement services to natural gas and oil exploration and production companies. These production enhancement services include compression, liquids separation, gas metering services, and ongoing well evaluations. Compressco designs and manufactures the compressor equipment (GasJack units) it uses to provide production enhancement services. Compressco’s fleet of GasJack units totaled 3,627 as of December 31, 2009, of which 2,660 units were in service.

Competition

Tetra Technologies competes with:



References

  1. 1.0 1.1 1.2 1.3 Reuters: TTI Company Profile
  2. Marketwatch: "TETRA Technologies, Inc. Reports Second Quarter 2010 Results"
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