Oil and Gas Startups Podcast

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1:12 what's up guys. Welcome back to the willing, yes, service podcast. I'm sitting here on buddy Austin DeGraft from Boomerang. What's up, man? What's up? How are you? Happy to be here. Yeah,

1:20 man. Thanks for making the trip

1:23 I just worked out timing-wise, so I like coming to Houston, eating good food here. Where are you from again? I grew up in Roswell, New Mexico, with the alien town. My

1:35 parents are Jerry Farmer's there. And then. I don't know if there was any farms in Roswell, New Mexico. Yeah, there's a bunch. Shout out to all Jerry Farmer's over there. But I went to Texas

1:44 Tech, graduated performance engineering from Tech, and then obviously went to Midland right after that, and then lived in Oklahoma City for seven years with my And now I'm back in the Permian, so

1:56 I live in Lubbock, but I'm in Midland almost every day. Nice, man. So you're with Boomerang, right? Yes. Good to get Boomerangcom. But

2:05 you guys are, would you, would you call it Sketa? Yeah, I call it Sketa. Yeah, cloud native Sketa. We do simple Sketa, and we do it, we think better than anybody else on the data acquisition

2:17 side. So we have screens and dashboards, and we display artificial lift types, or your HPOMS or your facilities. But complex control is what the technology can do, and that's where we see the

2:29 industry going, and that's where we see us fitting in. What is complex control? Complex control, best way I've had to describe to me, closed loop control, where you have a pattern in your

2:42 artificial lift type, so let's use ESP for example. You have a pattern, you have a device onsite, an edge device with edge computing. Once we install software into the Edge device, it's called a

2:53 boom box. And so the boom box is able to identify patterns or anomalies and automatically make a change. Speed up, slow down, start, stop, open, or close a valve. And it does it on its own

3:09 with logic or algorithms that we've installed in the boom box. So is that something that you, do you like have to like write these algorithms kind of like one off from it? Or is it something that's

3:20 like learning automatically? It's not so much machine learning automatically. So we do have scripts and I think one of the beginning stages in the industry is on the beginning stages of full closed

3:30 loop complex control. So at the moment, we're doing scripts where you take SME knowledge, whether that's us in my group with the production knowledge that we have, we have operators that give us

3:44 certain scripts or logic that they want or they recommend for their wells, It's new wells or older wells. And then we're working with some pretty cool technology companies that are doing

3:53 physics-based modeling. And we're using their logic too. So whoever is - the operator makes the decision right on one scripts, what they want to do with their well. So we can give recommendations,

4:03 and then they approve or deny those. And then what are the various use cases? As far as our first look types. So I'm ESP background. My partner, Oberyn, is GASLF background. So ESP is GASLIFT.

4:15 That's kind of our main focus We're not the low-cost provider on this gate of sides. We're focused on new wells, wells that can afford a little bit extra. And then we do have a suite of H-Pumps,

4:26 rod pumps, gapple paggles, so all the associated R-fish lift types. So for anybody who's listening who's not familiar with artificial lifts, can you explain it like four or five? Yeah, so when

4:36 you drill a well and complete a well, you have a certain natural lift where the pressure downhole is able to lift, fluid to surface naturally as that settles down. And the pressure is kind of

4:49 equalized. You install artificial lift, whether that's a pump or a gas lift, jet pump. There's a variety, I don't know how many types are our 10 or a wide or 20. That's what our official lift is.

5:02 So when I graduated, I jumped in with our official lift company and I was doing engineering operations sales for an ESP company, Electric's Commercial Pumps. And I loved it, I loved being on the

5:13 business side of oil and gas, selling equipment, having a relationship with customers. And I had an awesome young team around me and we just had a lot of fun. And I've always been kind of wanting

5:24 to, I've always wanted to jump to the operator side, but I never did. And I've been really happy to stay on the server side. So a lot

5:33 of people may kind of face value be like, Hey, there's already a ton of skated shit out here. How do you guys feel, I know we talked about the complete control a little bit, but like walk me

5:42 through kind of maybe the existing market, you don't have to name anybody you don't want to, but just walk me through. What is the void that you guys are filling and how are things done currently?

5:51 Sure. So the way we're describing it is there's the old architecture SCADA. A lot of devices are still using radios that feed information back to a PLC or they're using a modem or satellite on an

6:04 asset. So ESPs, compressors, you may have a modem out there. And a PLC is like some sort of like central control box, right? Right, okay.

6:15 Specifically on variable speed drives, you'd have a modem on site and the old architecture, the monolithic architecture way, is you ping or you pull that modem every 15 minutes, 10 minutes, five

6:25 minutes, two minutes, you really can't go faster than that because if the data transfer and you wanna make sure that the quality is there, the new architecture way of SCADA is using a cloud native

6:37 microservices and installing an edge device on site. So the edge device being connected to a modem where you're reading every value and transmitting that. those values every second. That's what

6:49 we're doing. So we do simple SCADA faster and with higher resolution than anybody's done before. So we think we could sell that in itself and just be a better version of simple SCADA, but what the

7:04 technology has unlocked for us and for operators is doing the next level complex control. So we don't want to stop there. We want to take to the next level and see where operators and service

7:14 companies alike can do autonomous control in the field. So that's kind of mine. Okay. So is with the the so, edge device hooks up to the modem and the edge device allows it to have,

7:29 my understanding is you're able to crunch a lot more data with the edge device, right? And as opposed to taking that information and maybe having to like relay it to the cloud, the back office,

7:40 whatever, you can kind of do those computations there in the field.

7:45 And the way that it's more efficient too, and the way that we're able to charge the same price for the 10 minute polling, what we're doing in every second is on change data. So if an ESP is at 60

7:56 Hertz and it doesn't change all day, we've only sent the transmitter that one time. It recognizes that it didn't change, so it doesn't transmit it. So the values that you do see change a lot are

8:07 temperature, amperage, voltage. So those are the ones that we are transmitting every second. So with the more complete control and being able to essentially optimize these artificial lift types,

8:18 what is the goal? What are we trying to accomplish? Is it being more reliable? Is it being more productive? Yeah, so there's a couple of things. So because we do capture every data point when

8:28 you have an artificial lift failure, that's very expensive. You can work over rig, you have equipment going back to your vendor's facility, you're trying to diagnose what happened. So having

8:40 every data point there is beneficial, which you may or may not have had previously. And then control in the field where you may have a service tech or an operator that wants to remotely change a

8:55 parameter with a well that's an hour or two away. He can now go into boomerang, change that. One second later have confirmation that that change was made. And then he can watch it live and see if

9:07 that change is successful or it's not. And he can change it back. Used to you make a change You wait 'til the next 10 minute poll. And the well may have already shut down. He didn't know. So

9:18 having the ability to do certain controls remotely, effectively, and have instant feedback is beneficial. That could save someone driving four hours round trip. So there's efficiencies in the

9:30 field, the data with failure analysis. And then the ability to do the complex closed loop control, that is taking the efficiency of an engineer or field staff to another level. So if you're trying

9:42 to like optimize a well to produce is kind of much as possible kind of also without like overclocking it, right, where you can blow this thing out. Does the edge device have the ability to optimize

9:54 that itself or do you have to have kind of like a savvy engineer who's going to be kind of giving it some kind of guidelines on like, here's what we should be doing and kind of experimenting with it

10:04 and kind of go back and forth. Yeah, I think if you look at like a water flood, for instance, those reservoirs or those wells aren't changing drastically really at all anymore. So that one, you

10:14 can just build it and set algorithms and you know exactly what's going to happen. In the unconventional space where you have a well where it first popped, it's acting this way. You're making a lot

10:24 of water and you're not dealing with all gas interference. But a year from now, you could, as you've drawn that well down, you could have a lot of gas interference, temperature becomes an issue,

10:32 artificial lip type react differently. So we think that there's different algorithms and logic that need to be set for different stages of the well So first 90 days. and then between 90 and 365 days

10:42 and then after that. So as the well changes, you need the technology to adapt to it. Is there any plans for

10:52 a lot of the talk right now? It's a chat GPT, large language models. I don't know, we machine learning. Like if you guys have great data sets, there are ways that you can. Our stance is we're

11:04 really happy being best in class edge computing edge device in the field There's a lot of folks out there that are doing AI models, physics based models, very sophisticated engineering work. And

11:18 we'd like to partner with them and adapt that. So they're good at their space. We're good at our space. And if an operator wants to combine those two, we're open to do that. So I think, but we

11:29 are not focused on machine learning or AI. It's one of those things that we've talked a lot about. Obviously we use it and stuff. But in the event that's something that we use it for, went wrong,

11:40 or it lied, or whatever, who nothing really badly can happen. But if you were to entrust the algorithm to completely run a wall, and it was just to go haywire, right? You could just totally junk

11:53 it, really. That's him, well, no, they're really expensive. Well, I launched the guy at Blake yesterday and he said, I still want the recommendation to come to me and I can improve or deny it.

12:04 And I said, You're right, but when that recommendation comes to you every day at 8 am, and you always hit yes, and that's 400 days in a row, then are you gonna trust it and just let it happen on

12:16 its own? And he said, Well, maybe. So I think the younger generation adapting to that technology, I think it's gonna be interesting. We're okay just sending recommendations, having the engineer

12:26 approve them or field staff approve them, and it's still different than what people are doing today. So what went through that? So is it, you guys are just kind of sending unsolicited

12:35 recommendations or is it like if there's some sort of parameters that they get kind of known. on. Yeah, so similar to the closed loop control system where you have the edge device making the

12:43 changes, we would just have one step in between there where we would send a text or an email saying the machine boomerang is recommending this change. And then you can approve it or deny it. So

12:55 essentially just one extra step is boomerang. And I'm sitting here thinking about your name here. Is it the boomerang whole concept throwing it coming back? Is it like is it hey, we're bringing

13:04 you back? Yeah, the data is coming right back to you. Oh, I was thinking about the artificial lift, like, hey, you lose tertiary lift. And now you're getting artificial lift. And it's coming

13:12 back. Oh, yeah. That's good to you. You're welcome. Yeah.

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14:17 that was interesting what you guys, is you were like, hey, we're working with this company, we're working with this company, we're growing, we're on so many wells and I was like, man, that's

14:24 really impressive. And you're like, yeah, we've been around seven months. And I was like, what? That's like unheard of. So like, yeah, there's some gaps to fill here for one had you pulled

14:33 that off, obviously you found like a need. I think for one being in Midland, I think it's helpful. tremendously. But walk me, I walk through like where you live and stuff. It walked me through

14:40 a little bit of more of your, your ESP background. It was a working operator, it was a working, awful service companies. And then the, let's get into the genesis of the company. Right. So

14:52 Oberyn, old contact mine. I used to work a couple of levels below him when he was CEO of a company that I worked for. He came to us. Us is myself, Mark McElan, Chad Jordan, were the three

15:04 boomerang boys in West Texas. Three of you guys. And yeah, both guys were in my wedding, so we've had great relationships and there's some of my best buds. So Oberyn approached us and said, Hey,

15:15 I've got this technology. Okay, there's a lot of new technologies coming out. Okay, let's vet it. What Oberyn and his group have, it's been in the works for about 10 years. And it's a group

15:27 that has had this type of complex controllability, edge devices, the cloud native infrastructure, they built it all themselves. and they're using it in different industries. So food and beverage,

15:40 sugar cane factories, smart cities, those types of things. Dairy farms. Not dairy farms. Not dairy farms.

15:48 Maybe one day. And so we said that we need to adapt it to oil and gas. So

15:53 Obern had been adapting to oil and gas for two years, and he was finally ready to launch. So he needed a Permian crew to kind of help it. So we developed Boomerang, we came up with a logo, which

16:02 my wife did. And yeah, we launched seven months ago, and our goal was, we all kind of took that risk, right? We have no revenue, no customers, and we ordered 500 Boomboxes, which cost a lot

16:17 of money. And it was, all right guys, we have six months to sell these 500, or we have to go find a job. So back against the wall, we've now sold 1, 200 Boomboxes, and we're on track to do

16:29 between 2, 000 and 2, 500 by the end of the year. Our goal was 1, 000 What's the average number of per company? So it's depending on how many really ESPs, gasless assets they have. So if a gas

16:42 lift, you could put six wells on one boom box, but every ESP should have its own boom box. So if a company has 400 ESPs, they would have 400 boom box. So you have the one boom box, say there's

16:54 six wells connected to that, what devices are you able to install on each well? So we don't. So all that information is fed back to one location, whether it's a compressed - Oh, so it's the

17:02 existing SCADA, right? Go to the modem, where there's the boom box Right, so if there's a modem out there, we just tie the boom box directly to it. We change the SIM cards, so the data comes to

17:11 us. They tune to your Verizon data comes to us, and then we're rocking everything else's on remote. What if they don't have SCADA, but they're like, Man,

17:20 we really love this. What will you do in that situation? Then we can provide them with the boom box, and we sell the modems also, and modems are really cheap, and we just put that out on each

17:28 asset type, and we can bring it all into one platform. So one customer was interested in just having is ESP's rod pumps. gas if wells And then I think h-pumps also all in one platform because he

17:42 just hadn't had that before And the h-pump specifically for the solar spultures, right? Yeah, I see we do mostly. Yeah Is there anything on the energy efficiency side of h-pumps? That's always

17:52 like one of the biggest issues is things just like gobble energy No, not an h-pump guy, but it means we are working with a company called FlexFlow I mean they've got 300 h-pump trailers that are

18:03 situated around the country and They rent these trailers and handle folks disposal needs and they're putting a boombox on every trailer Which is awesome for us great partner. Wow, that's awesome

18:19 Seven months you've sold 1500 so far. Yeah, twelve twelve

18:24 1500. Yeah, Chad's in middle and selling more today So I don't know what the number is gonna be when this G comes out Do you have to have any sort of like internet at the actual well site? Yeah,

18:32 so normally you have a that modem it's an 18T Verizon that's going to connect.

18:38 is to, it's a modem or it's a satellite. And that's pretty much how the connectivity works. Okay. And so that is pretty spotty, right? You have to pick as Verizon's going out all the time. Our

18:48 Boombox does have a data logger stored into it. We can store about three works worth of data. So when you look at our trends, you never have a gap. As that service goes out, comes back online,

18:59 the Boombox will transmit all that data in backfill. So that's something that not a lot of folks have been doing Do you - there's always this debate of, like, what do you actually send back to with

19:09 a cloud or the back office and stuff? Like, how do you guys think about that? Is it? Because you don't necessarily need to send 100 of the data. No. But we do store all of it. And Oracle's our

19:20 partner. I know you had an Oracle guy on the pod a few years ago. And it was great listening to him. And I need to connect with him, because we're dealing with Oracle, big Oracle. But it'd be

19:27 nice to talk to some of the - Yeah. I'll enter to see the team. Yeah, be great. I had a call with him yesterday. But they're our cloud partner. OK Cool.

19:39 So you have it in and I wonder if Starlink is ever going to like make its way to the oil field. So we've thought about it. Starlink is at the moment more expensive than what we're doing. You know,

19:48 we're Verizon ATC. You're talking five, 10, 15 bucks a month for the data. Yeah. Depending on the the lift type, gas at five, 10 bucks, ESP 15, 20 bucks. Starlink's in 50 or 100. So yeah,

20:02 if an operator wants Starlink or they have Starlink or they have Wi-Fi, we just connected that. It's pretty impressive. So like we, as we were family ranch, in between Dallas and Tyler, and it's

20:13 relatively remote. And there's like no options. Like, I mean, we're talking like county road to county road to get up to where this place is at. So it's pretty expensive to get them to solve

20:20 anything. And then even if you do, it's just probably not like a great bandwidth. And so, yeah, some of those rednecks up there, I talked to my dad into getting Starlink and they were able to

20:31 like redirect their approach to Oklahoma and Oklahoma, they were the satellite. It was great. So like now he's has internet at home, he's got streaming and stuff. It's more fun for me when I go

20:42 up there, I can actually watch Netflix. And so if that wasn't impressive enough, the other day I flew on a JSX flight, I don't know if you ever flown that. So it's like semi-private, but it like

20:51 really honestly costs the same as like a normal flight. So it's a much better experience than like why would you do it as long as they were there? Well then now that you just put Starlink on all of

20:59 their flights. And so I was taking Zoom calls on a flight, zero lag, did not interrupt my workflow whatsoever and 45 minutes of that was on the flight. Absolutely like remarkable. So I'm kind of

21:11 curious, yeah, like if they're gonna like break into the wheelfield, I haven't seen anybody using Starlink in the wheelfield yet, but if you are reaching out, I would love to hold it now. It's

21:18 like super interesting. It'd be great if an operator had it or they were using it and we can just tie our boombox, that service, so we just put an intent on the boombox, get connectivity and we're

21:27 rocking and rolling that way. But it's interesting, you see how something like Wi-Fi on a flight has changed us, right? I was watching Spider-Man on the flight here, which is pretty fun. And I

21:37 think we're a part of a change in, in what people are capable of. You don't have to send a technician to the field. And we don't want to eliminate technicians. That's not what technology is for.

21:47 It's making those people more efficient, right? Being able to do more with less. And you talk about Midland and the workforce down there, right? We lost a lot of people during downturn and COVID.

21:59 And now people are kind of ramping up and people are being smart about the operators are But if they do decide to just go crazy again, there's not enough folks out there. So that's where technology

22:10 is going to play. There is, oh man, it's like such a massive shortage. And only people realize how bad the shortage of like good, talented workers for this industry is. It's like, you talk to

22:21 some of these bigger organizations and they're like, yeah, we're hiring for like 500 positions and we can't find anybody. Yeah. Like for one, they're just not getting applicants, right? And

22:31 then the applicants, they do get are just like not qualified Right, so jobs are not going anywhere.

22:39 I kind of like about working with Boomerang, and, you know, co-founder Boomerang is big companies, big operators have this, what we're doing. One in particular, doing full closed loop control

22:50 and gas lift wells. So they're taking, they're doing nodal on a suite of five, 10 wells, tying it back to the compressor's gas availability and saying, send this gas to this well. This one

23:01 doesn't need this extra 30 MCF, and it can really close the loop And the edge devices are making those changes remotely and all the time without anybody doing approval. So it's incredible. What

23:13 Boomerang is, is we are that technology, but we can give it to anybody, the little guys. So if you've got 20 wells, 200 wells, or 20, 000 wells, we can offer it to you at a competitive price

23:23 to what you're already using and unlock that potential for your assets. So on that point, what is the business model? Are you selling devices, leasing devices, is a SaaS walking through that.

23:35 Yes, we sell the hardware. We saw the Boombox, the modem as a package was got ethernet cords and a couple of DB9 cables if they needed for 485 connection and then

23:46 it's a subscription service from there. So a couple hundred bucks a month, you get your dashboards, you get reports every morning, you get visibility, control, and the amount of users doesn't

23:56 matter, everything is very scalable. It's the microservice environment. So you have, you know, like I said, 10 wells or a thousand wells, no problem. So we pay, we charge per well per month

24:06 Okay. Yeah. That's nice and simple. Yeah. I

24:11 feel like you guys are crushing it right out the gate, like what's, like what's next? I don't know. So we, we're focusing the Permian flux flow is going to put 50 boomboxes in North Dakota and

24:22 the Bakim. Nice. Which is kind of fun. So we had a, a little hat giveaway on LinkedIn, we needed a name for our cold boombox. We had a special, we had a special boombox that could handle the

24:32 temperatures up there like negative 40c. and our buddy Nick came up with Icebox. Icebox. So we've got 50 ice boxes going up there, which is cool. We're really Permian-focused, MidCon, Next,

24:48 Bakken, and then hopefully we'll do international. International is a little trickier with the data, and you know, you go to certain countries. Different data standards or? Different data

24:57 standards, and I don't know a ton about it, so I don't wanna lie here, but there's not just Oracle and Verizon and a lot of other places So I think for us to take it to that big level, we will

25:08 need to go international. I think

25:11 they could probably use a lot of help for all the same reasons, you know, the manpower. And yeah, it's awesome. Well, awesome, man. Well, this has been awesome. I'm cheering you guys on.

25:23 It's so cool to see somebody. It's very rare that you get the kind of success at the six, seven month mark without the gate. So I think it's a testament to you guys really hitting a need.

25:34 especially with these first two operators that you guys are working with. And so, I think you guys are gonna crush it, man. Yeah, I think competition's coming. Don't get me wrong, but Mark and

25:42 Chad and myself and the folks that we're gonna bring on, we should be at five, 10 employees in about a year from now. And I'll put our horses against anybody's horses. So, we're excited for the

25:52 competition to come and we really wanna kinda just take over the Skate closed loop control market. I love it, man. We'll do another podcast in a year or so, as soon as you guys are at Yeah, but I

26:04 think you guys are pitching an energy tech night, aren't you? We are. Awesome. We are, yeah, it's looking forward to that. The spots were full, but we put ourselves in as the first alternate

26:12 and we made it in. Hell yeah. So, I don't know when this pod's gonna come out, but hopefully - I don't know if it's coming out before or after, but either way, be there to take that middle and

26:20 let them miss out, man. Yeah, thanks for coming down, man. That's been great. Cool. Great meeting you. Hey guys, if you liked the podcast, take two seconds, leave a reading review, share

26:28 it with your friends.