Mammoth Energy Services, Inc. ("Mammoth" or the "Company")
(NASDAQ:TUSK) announced that it closed the acquisitions of Sturgeon
Acquisitions LLC (“Sturgeon”) (which includes Sturgeon’s wholly
owned subsidiaries Taylor Frac, LLC, Taylor Real Estate
Investments, LLC and South River Road, LLC), Stingray Cementing LLC
and Stingray Energy Services LLC for seven million shares of
Mammoth common stock on June 5, 2017.
Arty Straehla, Chief Executive Officer, commented,
“The acquisitions of Sturgeon, Stingray Cementing and Stingray
Energy Services furthers our integrated offerings by bringing
additional sand assets, cementing and a full suite of rental
equipment under the Mammoth umbrella. The expansion of the Taylor
Frac facility from 0.7 million tons per annum (Mtpa) to 1.75 Mtpa
has begun and is expected to be completed by year-end, which will
grow our collective sand processing capacity to nearly 4 million
tons. We closed the acquisition of the Chieftain sand mine on May
26th and are in the process of hiring personnel with the
expectation of restarting the dry plant in the coming weeks. Across
the Mammoth portfolio, once at full capacity, we intend to utilize
approximately half of our sand production in direct support of our
pressure pumping operations with the remainder sold through
potential contracted sales or into the spot market.”
Key Highlights of the Sturgeon Acquisition:
Taylor Frac’s facilities include a wet and dry plant located on
393 acres in Taylor, Wisconsin. As of December 31, 2016, Taylor
Frac had estimated proven reserves of 37 million tons of high
quality Northern White Jordan Substrate frac sand which meets or
exceeds all API standards including solubility, turbidity,
roundness, sphericity and crush resistance. With approximately 73%
of the reserves higher demand fine grades of 40/70 and 100 mesh,
Taylor Frac is well positioned to support the shift to finer grade
sands in today’s well completion recipes.
The previously announced expansion of Taylor Frac to 1.75 Mtpa
(up from 0.7 Mtpa) is underway and expected to be completed by
year-end 2017 at a cost of approximately $23 million. Taylor
Frac’s facilities are located on the Canadian National Railway
(CN), which provides low cost transportation into the Appalachian
Basin (Utica, Marcellus) and Western Canada.
Stingray Energy Services and Stingray
Cementing
Stingray Energy Services operates in the Appalachian Basin
providing fresh water transfer, produced water filtration, rental
equipment and re-fueling operations in support of drilling,
completion and production activities. The company’s water transfer
division is capable of providing fresh water for completion
operations on multiple locations simultaneously with more than 30
miles of lay flat hose, three miles of polyurethane hose and
associated equipment.
Stingray Cementing operates in the Appalachian Basin providing
cementing services in support of drilling operations. The company
owns and operates five twin cementers and associated equipment,
which remain at or near full utilization due to strong customer
demand.
Financing
Under the terms of the acquisition agreements, Mammoth issued an
aggregate of 7.0 million shares of common stock, based on the
pro-rata ownership of the acquired businesses, to Gulfport Energy
Corporation, Rhino Exploration LLC and entities affiliated with
Wexford Capital LP. Total shares outstanding now stands at
approximately 44.5 million.
We are currently working with our banking group to incorporate
the acquisitions of Taylor Frac, Stingray Cementing, Stingray
Energy Services and Chieftain Sand in addition to the startup of
our fourth pressure pumping fleet. Once fully incorporated we
expect our borrowing base to increase.
About Mammoth Energy Services,
Inc.
Mammoth is an integrated, growth-oriented oilfield service
company serving companies engaged in the exploration and
development of North American onshore unconventional oil and
natural gas reserves. Mammoth’s suite of services includes pressure
pumping services, well services, natural sand proppant services,
contract land and directional drilling services and other energy
services. Other energy services currently consists primarily of
remote accommodation services. For additional information about
Mammoth, please visit our website at www.mammothenergy.com, where
we routinely post announcements, updates, events, investor
information and presentations and recent news releases. Information
on our website is not part of this news release.
Forward-Looking Statements and
Cautionary Statements
This news release contains certain statements
and information that may constitute “forward-looking statements”
within the meaning of Section 27A of the Securities Act of
1933, as amended, and Section 21E of the Securities Exchange
Act of 1934, as amended. All statements, other than statements of
historical facts that address activities, events or developments
that we expect, believe or anticipate will or may occur in the
future are forward-looking statements. The words “anticipate,”
“believe,” “ensure,” “expect,” “if,” “intend,” “plan,” “estimate,”
“project,” “forecasts,” “predict,” “outlook,” “aim,” “will,”
“could,” “should,” “potential,” “would,” “may,” “probable,”
“likely” and similar expressions, and the negative thereof, are
intended to identify forward-looking statements. Without limiting
the generality of the foregoing, forward-looking statements
contained in this press release specifically include statements,
estimates and projections regarding our business outlook and plans,
future financial position, liquidity and capital resources,
operations, performance, acquisitions, returns, capital expenditure
budgets, costs and other guidance regarding future developments.
Forward-looking statements are not assurances of future
performance. These forward-looking statements are based on
management’s current expectations and beliefs, forecasts for our
existing operations, experience and perception of historical
trends, current conditions, anticipated future developments and
their effect on us, and other factors believed to be appropriate.
Although management believes that the expectations and assumptions
reflected in these forward-looking statements are reasonable as and
when made, no assurance can be given that these assumptions are
accurate or that any of these expectations will be achieved (in
full or at all). Moreover, our forward-looking statements are
subject to significant risks and uncertainties, including those
described in our Annual Report filed on Form 10-K filed with the
SEC on February 24, 2017 and our subsequent filings we make with
the SEC, many of which are beyond our control, which may cause
actual results to differ materially from our historical experience
and our present expectations or projections which are implied or
expressed by the forward-looking statements. Important factors that
could cause actual results to differ materially from those in the
forward-looking statements include, but are not limited to, risks
relating to economic conditions; volatility of crude oil and
natural gas commodity prices; delays in or failure of delivery of
current or future orders of specialized equipment; the loss of or
interruption in operations of one or more key suppliers or
customers; oil and gas market conditions; the effects of government
regulation, permitting and other legal requirements, including new
legislation or regulation of hydraulic fracturing; operating risks;
the adequacy of our capital resources and liquidity; weather;
litigation; competition in the oil and natural gas industry; and
costs and availability of resources.
Readers are cautioned not to place undue
reliance on any forward-looking statement which speaks only as of
the date on which such statement is made. We undertake no
obligation to correct, revise or update any forward-looking
statement after the date such statement is made, whether as a
result of new information, future events or otherwise, except as
required by applicable law.
Contact:
Mammoth Energy Services, Inc., Attention: Don Crist, 14201 Caliber Drive, Suite 300, Oklahoma City, Oklahoma 73134, tel: 405-608-6048
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