Mammoth Energy Services, Inc. (TUSK) is an integrated, growth-oriented company that provides a diverse range of services to the oil and gas, electric utility, and natural sand proppant industries in North America. With a strong presence across multiple business segments, TUSK has positioned itself as a key player in the energy services and infrastructure sectors.

Business Overview and History

Mammoth Energy Services was incorporated in Delaware in June 2016. The company operates through several subsidiaries, including Bison Drilling and Field Services, LLC (formed in November 2010), Muskie Proppant LLC (formed in September 2011), Cobra Acquisitions LLC (formed in January 2017), Panther, Stingray Pressure Pumping, Silverback, Sand Tiger, Lion Power, Higher Power Electrical, 5 Star Electric, and others.

The company's operations can be divided into three primary segments: Well Completion Services, Infrastructure Services, and Natural Sand Proppant Services. The Well Completion Services segment provides hydraulic fracturing and sand hauling services, primarily in the Utica Shale, Marcellus Shale, and mid-continent region. The Infrastructure Services segment offers engineering, design, construction, upgrade, maintenance, and repair services for electrical transmission and distribution networks, as well as storm repair and restoration services. The Natural Sand Proppant Services segment mines, processes, and sells natural sand proppant used in hydraulic fracturing.

In 2017, Mammoth made several key acquisitions to expand its service offerings, including purchasing Sturgeon Acquisitions LLC, Taylor Frac, LLC, and Piranha Proppant LLC. These acquisitions allowed Mammoth to increase its natural sand proppant production capabilities and expand its geographic footprint. The acquisition of Cobra Acquisitions LLC in 2017 provided Mammoth with infrastructure services capabilities, including engineering, design, construction, upgrade, maintenance and repair services to the electrical infrastructure industry.

Over the next few years, Mammoth continued to grow through strategic acquisitions and organic expansion of its existing business lines. However, the company faced challenges during this period, including the 2020 COVID-19 pandemic which severely impacted demand for Mammoth's services. In response, the company was forced to temporarily idle certain service offerings and reduce its workforce across operations.

Another major challenge Mammoth encountered was its work in Puerto Rico following Hurricane Maria in 2017. Through its Cobra Acquisitions subsidiary, Mammoth entered into agreements with the Puerto Rico Electric Power Authority (PREPA) to aid in the restoration and reconstruction of Puerto Rico's power grid. However, PREPA's bankruptcy proceedings led to protracted disputes over payment, which created significant uncertainty and disruption for Mammoth's business. This Puerto Rico-related issue remained an overhang on the company for several years.

In 2024, Mammoth announced the retirement of long-time CEO Arty Straehla, who had been with the company since its inception. Phil Lancaster, previously the VP of Corporate Development, assumed the CEO role effective January 1, 2025. The management transition has been viewed positively by investors, as Lancaster brings a fresh perspective and is expected to continue Mammoth's growth strategy.

Financial Performance and Outlook

Financials

For the full year 2024, Mammoth reported total revenue of $187.9 million, down from $309.5 million in 2023. This decline was primarily attributable to decreased utilization in the Well Completion Services division due to lower activity by customers in the natural gas basins.

The company's Infrastructure Services division remained a bright spot, generating $110.4 million in revenue for 2024, relatively flat compared to the prior year. Management has highlighted significant bidding opportunities in the infrastructure market, particularly in areas such as engineering, fiber, and transmission and distribution. To capitalize on this demand, Mammoth has strategically added approximately 20 new crews to its infrastructure segment over the past 90 days.

Mammoth's Natural Sand Proppant Services division reported full-year 2024 revenue of $19.1 million, down from $39.1 million in 2023. This decrease was driven by a 53% decline in sand volumes sold, coupled with a 22% drop in average pricing. However, the company believes incremental demand will drive improved results in this segment in 2025.

For the full year 2024, Mammoth reported a net loss of $207.3 million, or $4.31 per diluted share. This was significantly impacted by a $170.7 million non-cash charge related to the settlement agreement with the Puerto Rico Electric Power Authority (PREPA). Adjusted EBITDA for 2024 was a loss of $167.5 million, compared to a positive $71.0 million in 2023.

The company's annual operating cash flow for 2024 was $180.7 million, with annual free cash flow of $163.7 million. This strong cash flow performance, despite the challenging operating environment, demonstrates the company's ability to manage costs and maintain financial flexibility.

In the fourth quarter of 2024, Mammoth reported revenue of $53.2 million, representing a 33% increase compared to $40 million in Q3 2024. This growth was primarily driven by improved pressure pumping utilization during the quarter. However, the company still recorded a net loss of $15.5 million for Q4 2024.

Geographically, Mammoth's operations are concentrated in North America, primarily in the United States. In 2024, approximately 35% of the company's revenue was generated from operations in Ohio, Wisconsin, Minnesota, North Dakota, Pennsylvania, West Virginia, and Canada.

Liquidity

As of December 31, 2024, Mammoth had a cash balance of $61 million and $17.7 million available under its $75 million revolving credit facility. The company's debt-to-equity ratio stood at 0.0716, indicating a relatively low leverage position. The current ratio and quick ratio were 1.65 and 1.51, respectively, suggesting a healthy short-term liquidity position.

Looking ahead, Mammoth has provided a 2025 capital expenditure budget of $12 million for its existing businesses, focused on growth in the equipment rentals division and maintenance for the pressure pumping fleet. The company also noted it is evaluating strategic opportunities to deploy additional capital in accretive ways, which could include further investment in its core segments or potential acquisitions.

Segment Performance

Well Completion Services

The Well Completion Services segment provides hydraulic fracturing, sand hauling, and water transfer services. As of December 31, 2024, Mammoth's hydraulic fracturing fleet included 128 high-pressure fracturing units with a combined pump nameplate capacity of 310,000 horsepower. In 2024, the number of stages completed by this division declined 66% to 1,450 compared to 4,220 in the prior year, reflecting decreased utilization due to lower activity in natural gas basins.

The segment generated revenue of $34 million in 2024, a 73% decrease from $127.4 million in 2023. Gross margin, excluding depreciation and amortization, was negative 14% in 2024 compared to 82% in 2023, as fixed costs outpaced the reduced revenue.

Infrastructure Services

The Infrastructure Services segment offers a range of services for the construction, upgrade, maintenance, and repair of electric transmission and distribution networks. This segment generated revenue of $110.4 million in 2024, relatively flat compared to $110.5 million in 2023. The average crew count decreased slightly from 83 crews in 2023 to 79 crews in 2024. Gross margin, excluding depreciation and amortization, remained stable at 83% in both years.

Natural Sand Proppant Services

The Natural Sand Proppant Services segment mines, processes, and sells high-quality Northern White frac sand. Revenue decreased 51% to $19.1 million in 2024 from $39.1 million in 2023, primarily due to a 53% decline in sand sales volumes and a 22% decrease in average price per ton. Gross margin, excluding depreciation, depletion, and accretion, decreased from 66% in 2023 to 93% in 2024.

Other Services

Mammoth's other services include directional drilling, aviation, equipment rentals, remote accommodations, and equipment manufacturing. Revenue from these services decreased 10% to $31.4 million in 2024 from $34.9 million in 2023, primarily due to decreased utilization in directional drilling and equipment rental businesses, partially offset by increased utilization in remote accommodations.

Risks and Challenges

Mammoth's business is heavily dependent on the health of the oil and gas industry, as well as the level of infrastructure spending by utility companies. Fluctuations in commodity prices, customer spending, and macroeconomic conditions can significantly impact the company's financial performance.

The ongoing bankruptcy proceedings of the Puerto Rico Electric Power Authority (PREPA) have also presented challenges for Mammoth's infrastructure services segment. While the company recently reached a $188.4 million settlement with PREPA, the ultimate collection of these funds remains uncertain.

Additionally, Mammoth operates in a highly competitive environment, facing larger national players as well as smaller regional competitors. The company's ability to maintain its market share and pricing power will be crucial to its long-term success.

In September 2019, the former president of Mammoth's Cobra Acquisitions subsidiary was indicted on charges related to interactions with a former FEMA official. While the company itself was not charged, such incidents can potentially impact reputation and future business opportunities.

Industry Trends

The oil and gas industry, a key market for Mammoth's well completion and natural sand proppant services, has experienced volatility in recent years, with fluctuations in commodity prices impacting activity levels. This volatility has directly affected the demand for Mammoth's services in these segments.

On the other hand, the infrastructure services industry has seen increased demand for services related to transmission and distribution networks, as well as fiber optic installations. This trend aligns well with Mammoth's strategic focus on its Infrastructure Services segment and presents opportunities for growth.

Conclusion

Mammoth Energy Services is a diversified conglomerate with a presence across the energy services and infrastructure sectors. While the company has faced headwinds in recent years, particularly in its Well Completion Services and Natural Sand Proppant divisions, management's strategic focus on the high-potential Infrastructure Services segment and commitment to prudent capital allocation suggest Mammoth may be well-positioned for a return to growth and improved profitability in the coming years. The company's strong cash flow performance and healthy liquidity position provide a solid foundation for navigating industry challenges and pursuing growth opportunities. Investors should closely monitor the company's ability to capitalize on infrastructure spending trends and manage the risks inherent in its diversified business model.