Mammoth Energy Services, Inc. Annual report pursuant to Section 13 and 15(d)

Annual report pursuant to Section 13 and 15(d)

Related Party Transactions

Related Party Transactions

12 Months Ended

Dec. 31, 2021

Transactions between the subsidiaries of the Company and the following companies are included in Related Party Transactions: Wexford, Gulfport; 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):


		Years Ended December 31,						At December 31,
		2021		2020		2019		2021		2020
		REVENUES						ACCOUNTS RECEIVABLE
Stingray Pressure Pumping and Gulfport	(a)	$	14,812	$	42,460	$	90,357	$	—	$	25,429
Muskie and Gulfport	(b)	2,145		7,500		27,689		—		1,127
SR Energy and Gulfport	(c)	—		113		8,772		—		8
Aquahawk and Gulfport	(d)	—		—		828		—		—
Cobra Aviation/ARS/Leopard and Brim Equipment	(e)	371		446		2,093		85		44
Panther and El Toro	(f)	599		38		573		—		—
Other Relationships		12		34		1		3		9
		$	17,939	$	50,591	$	130,313	$	88	$	26,617

		OTHER						ACCOUNTS RECEIVABLE
Stingray Pressure Pumping and Gulfport	(a)	$	514	$	1,887	$	—	$	—	$	1,841
Muskie and Gulfport	(b)	1		3		—		—		3
		$	515	$	1,890	$	—	$	—	$	1,844
								$	88	$	28,461

a.Stingray Pressure Pumping provided pressure pumping, stimulation and related completion services to Gulfport. Other amount represents interest charged on delinquent accounts receivable related to these services. On June 29, 2021, Gulfport ceased to be a related party. See Note 3.

b.Muskie 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. Other amount represents interest charged on delinquent accounts receivable related to this agreement. On June 29, 2021, Gulfport ceased to be a related party. See Note 3.

c.SR Energy provided rental services for Gulfport. On June 29, 2021, Gulfport ceased to be a related party.

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

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

f.Panther provides directional drilling services for El Toro, an affiliate of Wexford, pursuant to a master service agreement.


		COST OF REVENUE						ACCOUNTS PAYABLE
		Years Ended December 31,						At December 31,
		2021		2020		2019		2021		2020
Cobra Aviation/ARS/Leopard and Brim Equipment	(a)	73		72		4,720		5		1
The Company and Caliber	(b)	351		248		—		—		—
Other Relationships		107		98		50		—		—
		$	531	$	418	$	4,770	$	5	$	1

		SELLING, GENERAL AND ADMINISTRATIVE COSTS
The Company and Wexford	(c)	5		3		650		—		2
The Company and Caliber	(b)	374		774		785		—		—
Cobra Aviation/ARS/Leopard and Brim Equipment	(a)	—		—		233				—
Other Relationships		8		(19)		179		—		—
		$	387	$	758	$	1,847	$	—	$	2

		CAPITAL EXPENDITURES
Leopard and Brim Equipment	(a)	—		—		420		—		—
		$	—	$	—	$	420	$	—	$	—
								$	5	$	3

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

b.Caliber, an entity controlled by Wexford, leases office space to the Company.

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. Cobra Aviation made additional investments in Brim Acquisitions totaling $0.5 million and $0.7 million during the years ended December 31, 2020 and 2019, respectively. Wexford Investments is an entity controlled by Wexford, which owns approximately 48% of the Company’s outstanding common stock. ARS leases a helicopter to Brim Equipment and Cobra Aviation leases the two helicopters purchased as part of these transactions to Brim Equipment under the terms of aircraft lease and management agreements. See Note 8 for further discussion.