Mammoth Energy Sells Aquawolf for $30M, Enhancing Portfolio Optimization
Mammoth Energy Services announced that its subsidiary, Mammoth Energy Partners has completed a sale of all equity interests in its wholly owned subsidiary, Aquawolf to Qualus for an aggregate sales price of $30.0M, advancing the Company's ongoing transformation and portfolio optimization initiatives. Aquawolf's revenue grew from $12.1M in 2022 to $17.3M in 2024, with net income rising from $1.1M to $1.8M over the same period. For the nine months ended September 30 Aquawolf generated $12.0M in revenue and $1.3M in net income. At closing, Mammoth Energy Partners received total cash proceeds of $23.5M. An additional $2.5M was placed into escrow to fund post-closing adjustments for at least ninety days and indemnified liabilities until at least December 1, 2026. In conjunction with the transaction described above, the Company entered into a consent and release agreement with Fifth Third Bank, National Association in which Fifth Third consented to the transaction and agreed to release associated collateral. The Company's borrowing base remains unchanged.
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ProPetro Holding and Mammoth Energy Shares Surge by 9.2% and 8.1% Respectively
- Oil & Gas Equipment Strength: Oil and gas equipment and services stocks rose approximately 1.7% as a group, indicating relative strength in the sector and reflecting market optimism regarding energy demand.
- ProPetro Surge: ProPetro Holding's shares increased by about 9.2%, suggesting heightened investor confidence in its future performance, likely benefiting from rising oil prices and increasing market demand.
- Mammoth Energy Rise: Mammoth Energy Services saw its stock price rise by approximately 8.1%, indicating a positive market outlook on its business prospects, potentially linked to the overall recovery trend in the industry.
- Sector Trend Analysis: The leadership of oil and gas exploration and production, along with oil and gas equipment and services, suggests that investors are optimistic about the recovery of the energy sector, which may attract more capital inflows into this area.
What Caused Mammoth Energy's 8% Increase in After-Hours Trading?
Stock Surge: Mammoth Energy Services Inc. (TUSK) shares rose 7.65% in after-hours trading to $1.90 following the announcement of a $30 million asset sale, despite a 0.84% decline during regular trading hours.
Asset Sale Details: The company completed the sale of its Aquawolf LLC subsidiary to Qualus LLC for $30 million, receiving $23.5 million in cash at closing, with additional funds held in escrow for potential liabilities.
Management Insights: CFO Mark Layton highlighted the strategic importance of the sale, noting the growth of the Engineering business since 2018 and expressing confidence that the company's value is not reflected in its current share price.
Market Performance: TUSK shares have decreased by 40.77% year-to-date, with a market capitalization of $85.06 million and a 52-week trading range between $1.68 and $3.52.
