As commodity watchers mark every turn of the crisis in Houston, the nation's energy capital, Ingevity President and CEO Michael Wilson offered CNBC a promising take on the state of the oil market.
"When we saw the collapse in oil prices back in 2015, we saw demand destruction. What we did is we went back to the laboratories, reformulated products to take cost out but to keep the efficacy of those products for our customers. And we've been very successful at that," Wilson told "Mad Money" host Jim Cramer on Thursday. "And then since the beginning of this year, we've seen a real resurgence in our oilfield business. So it's definitely coming back."
Wilson pointed to the number of oil rigs as a loose measure for the comeback. They peaked in 2014, when there were about 2,000 rigs in place, the count bottomed at 400 rigs and has since been climbing.
As of last Friday, there were 940 rigs in the United States.
"U.S. drillers are an amazing story, the efficiency that they've created," Wilson said. They're producing as much oil today with 900 rigs as they did with 2,000 two years ago."
And as oilfield business ticks up for Ingevity, which manufactures specialty chemicals for everything from paving roads to improving oil flow, Wilson is forecasting an upward trajectory for his recently spun-off business.
Ingevity became independent from its former parent company, packaging giant WestRock, in May 2016, a deal that Wilson said came as a benefit to Ingevity's growth prospects.
"The benefit of the spin-off is we got both the strategic flexibility and the financial flexibility to grow acquisitively as well as organically," the CEO told Cramer.
"This has always been a great business with high margins, high returns," Wilson continued. "But if you're a paper company and you're going to have to make a decision between an acquisition and your chemical business, which is non-strategic, and between investing $500 million in a new paper machine, you're going to put in the paper machine, right?"
In its latest acquisition, Ingevity paid $315 million for Georgia-Pacific's pine chemicals business. The purchase was in line with Ingevity's aim to create sustainable products, Wilson said.
"Both our businesses start with renewable, raw materials. Not only renewable, raw materials, but renewable, raw materials that are actually byproducts of other processes, in this case, the pulping process," the CEO said. "[It's] totally sustainable, so not only are we starting with a sustainable raw material, we're making products that purify, protect and enhance the world around us. That's our core purpose as a company."
And as Ingevity embraces the freedom it gained from its break-up with WestRock, Wilson said he believes he and his team can build an even larger chemical company.
"I mean, we're only a $1 billion company today with about a $3 billion enterprise value, but we believe we've got a great, organic growth story, and on top of that, we do believe ... there are a number of [acquisitions] out there that can create a lot of value for our shareholders," the CEO said.
Watch Michael Wilson's full interview:
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