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, 2022

Transactions between the subsidiaries of the Company, including Stingray Pressure Pumping, Muskie, Stingray Energy Services LLC (“SR Energy”), 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”), Elk City Yard LLC (“Elk City Yard”), Double Barrel Downhole Technologies LLC (“DBDHT”), Caliber Investment Group LLC (“Caliber”) and Brim Equipment.

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


		Three Months Ended March 31,					At March 31,	At December 31,
		2022		2021				2022		2021
		REVENUES				ACCOUNTS RECEIVABLE
Stingray Pressure Pumping and Gulfport	(a)	$	—	$	14,812			$	—	$	—
Muskie and Gulfport	(b)	—		2,145				—		—
Cobra Aviation/ARS/Leopard and Brim Equipment	(c)	60		43				95		85
Panther and El Toro	(d)	214		131				214		—
Other Relationships		—		—				4		3
		$	274	$	17,131			$	313	$	88

		OTHER				ACCOUNTS RECEIVABLE
Stingray Pressure Pumping and Gulfport	(a)	$	—	$	(514)			$	—	$	—
Muskie and Gulfport	(b)	—		(1)				—		—
		$	—	$	(515)			$	—	$	—
								$	313	$	88

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

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


		Three Months Ended March 31,					At March 31,	At December 31,
		2022		2021				2022		2021
		COST OF REVENUE				ACCOUNTS PAYABLE
Cobra Aviation/ARS/Leopard and Brim Equipment	(a)	$	19	$	19			$	4	$	5
The Company and Caliber	(b)	89		64				—		—
Other Relationships		27		26				—		—
		$	135	$	109			$	4	$	5

		SELLING, GENERAL AND ADMINISTRATIVE COSTS
The Company and Caliber	(b)	$	—	$	185			$	—	$	—
Other		—		8				2		—
		$	—	$	193			$	2	$	—

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.

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. 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 7 for further discussion.