Executive Q&A: Bringing 5G To US Shale Producers

Infrastructure Networks CEO Mark Slaughter says the company’s technology at the wellpad will help cut costs and reduce breakevens for U.S. shale producers.

Tue, 02/04/2020 - 04:30 AM

Infrastructure Networks 5G To The Oilfield

Hart Energy:
What was the driving force behind forming this company? Share a little history with us if you will.

Mark Slaughter:
I joined this past year, but the company Infrastructure Networks was formed in 2011 around a value proposition of serving oil and gas customers in the Lower 48 with LTE [long-term evolution] based communication services.

Hart Energy:
What oil fields are you in?

Mark Slaughter:
Most recently we expanded our network. We are now 130,000 square miles of coverage. That’s roughly the size of the country of Japan, or maybe the state of California. It’s a rate across four major shale basins. The Permian is our core market, both in West Texas and Southeast New Mexico. The Eagle Ford Shale in South Texas, the Scoop/Stack in Oklahoma and the Bakken in North Dakota.

Hart Energy:
Is 5G readily accessible to companies in the oil and gas industry?

Mark Slaughter:
It’s coming I guess is the best way to say that. The network today system-wide is 4G, which is the latest technology. But 5G is coming and with our most recent upgrade and expansion we’ve made it 5G capable. Now for us, it’s a data network so this is not the use of cell phones with 5G all over these basins. It’s at the wellpad that will be able to deliver 5G enabled services.

Hart Energy:
This is a tough time for the oil and gas industry. How can 5G help a company in the oil field?

Mark Slaughter:
It’s really about remote operations. Some people call it integrated operations where a lot of decision-makers and observers are not at the well site. So, it’s aggregating data from thousands and thousands of sensors that are deployed at a wellpad and taking that information and shipping it into insights that are then used by people back at the office to make decisions.

Hart Energy:
Is that a constantly developed process?

Mark Slaughter:
Yes, it is something that in today’s environment, in a lower commodity price environment, it’s going to be very important to cut costs and to reduce the breakeven in this world of $60 oil and still make the right financial returns for our customers, our oil and gas operators. So, from that standpoint, our technology helps them do that.

Hart Energy:
Can you discuss the growing trend toward private wireless networks with us?

Mark Slaughter:
We think we fit sort of in the middle. We’re not a public carrier like an AT&T or Verizon but we’re also not just a company building a network for ourselves. We’re able to build a private network that scales across multiple operators and so we allow them to change their capex in such networks to operating expenditures that are cheaper than trying to build and maintain their own network.

Hart Energy:
Does that make it unique to each company?

Mark Slaughter:
Yes, it’s our private network, but really their private network as well. But we were able to deliver savings by virtue of serving several operators in a field.

Hart Energy:
What are the environmental challenges or risks associated with bringing 5G to the oil field? How are you helping alleviate those?

Mark Slaughter:
It’s a derivative comment, but we reduce truck trips to the field. You can run operations with less people at the edge, and, because of that, there are less truck trips, less road damage, less use of petroleum fuel to get out to the well site—all of that you can reduce. Therefore, we think that’s helping the environment.

Hart Energy:
Infrastructure Networks is a private company so I don’t believe you will share your specific financials with us, but can you give us a ballpark of what your investment numbers look like?

Mark Slaughter:
We are a private company. We are backed by two firms. One called Altira Group, which is a venture capital firm. Now, because of our maturity as a company, we’ve attracted Apollo Global Management, which is one of the world’s largest private-equity firms. So, we’re well financed, but, since we’re private, we don’t reveal financial information. However, we’re about 80 employees and those 80 employees with our headquarters in Houston are based here but also in our four basins. I think that’s really all we can say about our finances. That gives you some sense of size and scale of the business.

Hart Energy:
What do you think that interest in investment means for the future?

Mark Slaughter:
We just went through a major expansion, adding capacity in the Permian geographically building out the business, upgrading to 5G capable. That took millions and millions of dollars, which Apollo helped finance for us. We think we’re well-positioned. But, you know, as we continue to grow, we will look for other network expansion opportunities—perhaps some mergers and acquisitions—that could complement our growth strategy. So, we’ll just have to see what the future brings.

Hart Energy:
Is there anything else you would like to share?

Mark Slaughter:
I think we really view ourselves as the foundational enabler for the digital oil field. We bring it to life. It starts with robust and reliable remote connectivity at the edge, at these remote and distributed operations. We deliver IoT [Internet of Things] services but we’re not those advanced analytics companies. We think we know our place. It’s really supporting small and advanced analytics companies, startup companies that can deliver real digital benefits to the oil and gas operators.