One of Oklahoma’s fastest-growing companies, Mammoth Energy Services, continued to expand in the second quarter, buying up two more companies and securing new contracts throughout the country.
In a conference call with analysts on Aug. 7, Mammoth executives detailed the company’s recent growth, including how it has secured about $470 million in utility services contracts because of its efforts to restore electricity in Puerto Rico.
Mammoth subsidiary Cobra Acquisitions has had crews working in Puerto Rico since October 2017 to help restore power after Hurricane Maria. The company’s initial 120-day, $200 million contract ballooned to $950 million by March, and the company in May secured an additional one-year, $900 million contract to complete the emergency restoration and begin broader efforts to strengthen the island’s power system.
The work in Puerto Rico also has led to additional opportunities throughout the rest of the country, Mammoth CEO Arty Straehla said Aug. 7. When Mammoth and Cobra began work in Puerto Rico, they had secured $30 million in contracts for similar work throughout the continental United States. Cobra now has secured contracts for about $500 million of such work over the next three years and is in the process of bidding on up to $2 billion worth of potential future projects, Straehla said.
“When a number of the investor-owned utilities came to Puerto Rico to do mutual aid, they saw our capabilities and saw our team perform at a strong level,” Straehla said.
Mammoth also has continued its strategy of buying small companies and immediately expanding those firms’ capabilities.
In the second quarter, Mammoth spent a combined $14 million to buy oil trucking company WTL Oil and cementing company RTS Energy Services. Mammoth has expanded both company’s offerings, growing WTL to 49 trucks from 20 and increasing RTS’ service offerings in the Permian Basin, Straehla said.
WTL previously operated mostly in Oklahoma, but Mammoth has expanded it to the Permian Basin in West Texas and southeast New Mexico, where it is now trucking oil about 340 miles to market near San Antonio.
“It is a logical output of our existing transportation business, offering us another opportunity for expansion,” Straehla said. “We’re already in sand and rig hauling, so it’s a logical step to go into crude transportation.”
RTS was a small cementing businesses operating in the Permian.
“It had real estate that gave us three new yards in the Permian. We like that for further expansion of the other services we already have,” Straehla said.
RTS also provides Mammoth with access to additional equipment and about 250 customers.
“We can go work for them and take cross services with us,” Straehla said. Both WTL and RTS were cash flow positive for us the first month they came in to our team.”