RigNet (RNET) Reports 36% EBITDA Increase; Expects to Benefit from Oilfield Data Throughput Rise

July 24, 2013

RigNet (RNET) recently reported a 36% increase in EBITDA compared to last year that can be attributed in large measure to the growth in communications services provided to oil-producing sites and growth in the average revenue per site, and the industry trend is to increase data throughput going forward, says Mark Slaughter, CEO and President of the company.

“Rigs only use an average of a meg of throughput today, but there is pressure to increase as more and more software applications and monitoring systems are deployed at the edge to make sure the rig is working effectively and is working safely post-BP Macondo. All those things are driving bandwidth growth from multiple customers. The drillers, operators and service companies are all using more and more bandwidth to access their applications. That is a very positive trend we certainly have seen retrospectively and expect to see prospectively,” Slaughter said.


Slaughter says RigNet recently acquired Nessco, bringing engineering skills and product sets for telecommunications systems integration into the company’s portfolio that allow it to compete more efficiently in the oilfield communications area.

“Nessco goes out to these production facilities, and in some cases rigs, where they design, procure, construct, install and service these large telecommunications solutions. Some of this does deal with remote communications, but some of it deals with communications on the facility itself such as intercom systems, radars, beacons — solutions that legacy RigNet had not done historically, as we are more focused on communications from the remote sites back to civilization. But we found that to compete effectively, we needed that broader product set and engineering skills, and we have been very pleased with that acquisition,” Slaughter said.