CES has been able to capitalize on the growing market demand for both drilling fluids and production and specialty chemicals in North America. CES' business model is relatively asset light and requires limited re-investment capital to grow while generating significant free cash flow. CES returns much of this free cash flow back to shareholders through its monthly dividend.
CES operates two core businesses. The first core business is operated by the drilling fluids divisions which design and implement drilling fluid systems for the North American oil and natural gas industry. CES operates in the Western Canadian Sedimentary Basin ("WCSB") and in various basins in the United States ("US"), with an emphasis on servicing the ongoing major resource plays. Horizontal drilling is the primary method utilized to drill formations like tight gas, liquids rich gas, tight oil, heavy oil, and in the oil sands. The designed drilling fluid encompasses the functions of cleaning the hole, stabilizing the rock drilled, controlling subsurface pressures, enhancing drilling rates, and protecting potential production zones while conserving the environment in the surrounding surface and subsurface area. CES' drilling fluid systems are designed to be adaptable to a broad range of complex and varied drilling scenarios, to help clients eliminate inefficiencies in the drilling process, and to assist them in meeting operational objectives and environmental compliance obligations. CES markets its technical expertise and services to oil and natural gas exploration and production entities by emphasizing the historical success of both its patented and proprietary drilling fluid systems and the technical expertise and experience of its personnel. The Company operates this business under the CES and Moose Mountain Mud brands in Canada and as AES Drilling Fluids ("AES") in the US.
The second core business is operated by the production and specialty chemicals divisions which design, develop, and manufacture technically advanced solutions and products for completions and stimulations, production chemicals for consumption at the wellhead or pump-jack, and specialty chemicals for the pipeline and mid-stream market. Key solutions include corrosion inhibitors, demulsifiers, H2S scavengers, paraffin control products, surfactants, scale inhibitors, biocides and other specialty products. The Company's production and specialty chemical business' main manufacturing and reacting facility is located in Sterling, Kansas and its Canadian blending facility is located in Carlyle, Saskatchewan. The Company operates this business under the JACAM brand in the US and as PureChem in Canada.
With the addition of JACAM's state of the art laboratory in Sterling, Kansas, CES now operates four separate lab facilities across North America which also includes, Carlyle, Saskatchewan; Calgary, Alberta; and Houston, Texas. CES also leverages third party partner relationships to drive innovation in the consumable chemicals business.
The other complimentary business units of CES are Clear Environmental Solutions ("Clear") and EQUAL Transport ("EQUAL"). Clear is CES' environmental division, providing environmental and drilling fluids waste disposal services primarily to oil and gas producers active in the WCSB. The business of Clear involves determining the appropriate processes for disposing of or recycling fluids produced by drilling operations and carrying out various related services necessary to dispose of drilling fluids.
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