Oklahoma City-based Mammoth Energy Services Inc. announced Tuesday that it will acquire Sturgeon Acquisitions, LLC, Stingray Energy Services, LLC and Stingray Cementing, LLC for seven million shares of Mammoth common stock. The deal is worth over $133 million, according to a company press release.
“In keeping with the plan initially outlined at the time of our initial public offering last fall to grow both organically and through accretive acquisitions, we expect the addition of these companies to further integrate our service offerings, provide us captive demand and give us an ability to compete more effectively on price and service for our customers,” said Arty Straehla, Mammoth’s Chief Executive Officer.
Sturgeon Acquisitions owns Taylor Frac LLC, Taylor Real Estate Investments LLC and South River Road LLC. Taylor Frac owns a 700,000-ton-per-year sand mine and processing plant with 37.1 million tons of recoverable reserves. Mammoth plans to expand the Taylor facility to 1.75 million tons per year by the end of 2017 at an estimated cost of $23 million.
“Given the increasing demand for sand, we believe this will differentiate our service offering, giving our customers confidence that their wells will be completed without the need to source sand from third parties,” said Straehla. “We believe that over the coming months, we will continue to see increasing demand for pressure pumping, sand and logistics services and that the Taylor acquisition will support our ability to meet this increased demand.”
Operating primarily in the Appalachian Basin, Stingray Energy Services provides fresh water transfer, produced water filtration, rental equipment and re-fueling operations in support of drilling, completion and production activities.
Stingray Cementing providing cementing services in support of drilling operations. It recently expanded capacity by 66% in response to strong customer demand and has been operating at or near full capacity.
On October 3, 2016, OK Energy Today reported that Mammoth Energy initiated an IPO to raise $128 million after acquiring several small oilfield services firms.
Mammoth anticipates closing the transactions in May 2017, subject to regulatory approval and other closing conditions.