With frack sand demand rising, Mammoth acquires Wisc. mine

By Luke Geiver | March 22, 2017

Mammoth Energy Services Inc. has solidified its frack sand supply needs. The Oklahoma City-based energy services provider that serves the Marcellus, Utica and more recently the SCOOP/STACK, has purchased a Wisconsin frack sand operation. The purchase also includes the assets of Stingray Energy Services. Already operating at near 100 percent capacity, Mammoth intends to invest an additional $23 million into the Taylor Frack facility with plans to expand to 1.75 million tons of sand produced per year.

“Having sand supply in-house is crucial for our success,” said Arty Straehla, CEO of Mammoth. In the past six months, the Mammoth team has experienced a tightening sand supply market. With its Musky facility already operating at full capacity, the company was scrambling for sand, Straehla said. The purchase of the Taylor facility and other assets—for 7 million shares of common stock or the equivalent of $133.8 million—will allow Mammoth to ensure it has frack sand for its customers in the Northeast and in Oklahoma.

Prior to Mammoth’s acquisition of the Taylor facility, sand sourced from the mine was sold to different exploration and production companies in the Marcellus and into Canadian operations. Now, Mammoth will only be supplying itself with sand. Because the facility is located on rail to the Northeast and to the Oklahoma region, sand will be sent to both regions with most headed to the Marcellus.

“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,” Straehla said.

Also included in the acquisition was Stingray Energy Services fresh water transfer, produced water filtration, rental equipment and re-fueling operations to support drilling, completion and production activities. As of March 17, there were 250 pieces of equipment rented on 63 separate pads in the Appalachian Basin with 27 locations utilizing Stingray’s re-fueling services, according to Mammoth.

Earlier this year, Mammoth announced plans for the purchase of additional horsepower and equipment to its frack fleets. Those fleets should be arriving soon, the company said, and will be deployed in the SCOOP/STACK.