Mammoth Energy Services, Inc. Quarterly report pursuant to Section 13 or 15(d)

Quarterly report pursuant to Section 13 or 15(d)

Related Party Transactions

Related Party Transactions

3 Months Ended

Mar. 31, 2020

Transactions between the subsidiaries of the Company, including Stingray Pressure Pumping, Muskie Proppant LLC (“Muskie”), Stingray Energy Services LLC (“SR Energy”), Aquahawk Energy LLC (“Aquahawk”), Panther Drilling Systems LLC (“Panther Drilling”), Anaconda Manufacturing LLC (“Anaconda”), Cobra Aviation, ARS and Leopard and the following companies are included in Related Party Transactions: Gulfport, Wexford, Grizzly Oil Sands ULC (“Grizzly”), El Toro Resources LLC (“El Toro”), Everest Operations Management LLC (“Everest”); Elk City Yard LLC (“Elk City Yard”), Double Barrel Downhole Technologies LLC (“DBDHT”), Caliber Investment Group LLC (“Caliber”), Predator Drilling LLC (“Predator”) and Brim Equipment.

Following is a summary of related party transactions (in thousands):


		REVENUES						ACCOUNTS RECEIVABLE
		Three Months Ended March 31,						At March 31,		At December 31,
		2020		2019		2020		2019
Pressure Pumping and Gulfport	(a)	$	17,823	$	37,410	$	17,021	$	5,950
Muskie and Gulfport	(b)	1,875		12,655		516		1,141
SR Energy and Gulfport	(c)	108		5,307		135		156
Aquahawk and Gulfport	(d)	—		724		—		—
Panther Drilling and El Toro	(e)	—		369		—		—
Cobra Aviation/ARS/Leopard and Brim Equipment	(f)	82		263		89		235
Other Relationships		—		—		29		41
		$	19,888	$	56,728	$	17,790	$	7,523

a.Pressure Pumping provides pressure pumping, stimulation and related completion services to Gulfport.

b.Muskie has agreed to sell and deliver, and Gulfport has agreed to purchase, specified annual and monthly amounts of natural sand proppant, subject to certain exceptions specified in the agreement, and pay certain costs and expenses.

c.SR Energy provides rental services to Gulfport.

d.Aquahawk provides water transfer services for Gulfport pursuant to a master service agreement.

e.Panther provides directional drilling services for El Toro, an entity controlled by Wexford, pursuant to a master service agreement.

f.Cobra Aviation, ARS and Leopard lease helicopters to Brim Equipment pursuant to aircraft lease and management agreements.


		Three Months Ended March 31,						At March 31,		At December 31,
		2020		2019		2020		2019
		COST OF REVENUE						ACCOUNTS PAYABLE
Cobra Aviation/ ARS/Leopard and Brim Equipment	(a)	$	13	$	713	$	6	$	433
Anaconda and Caliber	(b)	62		—		—		—
Other		26		—		—		—
		$	101	$	713	$	6	$	433

		SELLING, GENERAL AND ADMINISTRATIVE COSTS
The Company and Wexford	(c)	$	—	$	236	$	—	$	1
The Company and Caliber	(b)	192		130		62		7
Other		23		68		14		9
		$	215	$	434	$	76	$	17

		CAPITAL EXPENDITURES
Leopard and Brim Equipment	(a)	$	—	$	—	$	—	$	76
		$	—	$	—	$	—	$	76
						$	82	$	526

a.Cobra Aviation, ARS and Leopard lease helicopters to Brim Equipment pursuant to aircraft lease and management agreements.

b.Caliber leases office space to Mammoth.

c.Wexford provides certain administrative and analytical services to the Company and, from time to time, the Company pays for goods and services on behalf of Wexford.

On December 21, 2018, Cobra Aviation acquired all outstanding equity interest in ARS and purchased two commercial helicopters, spare parts, support equipment and aircraft documents from Brim Equipment. Following these transactions, and also on December 21, 2018, Cobra Aviation formed a joint venture with Wexford Investments named Brim Acquisitions to acquire all outstanding equity interests in Brim Equipment. Cobra Aviation owns a 49% economic interest and Wexford Investment owns a 51% economic interest in Brim Acquisitions, and each member contributed its pro rata portion of Brim Acquisitions' initial capital of $2.0 million. The Company made additional investments totaling $0.5 million during the three months ended March 31, 2019. The Company did not make any additional investments during the three months ended March 31, 2020. Wexford Investments is an entity controlled by Wexford, which owns approximately 48% of the Company's outstanding common stock.