EP.009: Cigar Butt Morphing into a Compounder: 50% of NAV & Pivoting to Higher Return Industries

Mammoth Energy Services' strategic shift is the focus, pivoting from oilfield services to infrastructure and rentals. CFO Mark Layton discusses the rationale behind selling the transmission and distribution business after generating $400 million in free cash flow from an initial $135 million investment, citing an attractive valuation at nine times trailing EBITDA. The company is reallocating capital into aircraft rentals, targeting 25-35% unlevered IRRs, and exploring opportunities in heavy aircraft engines and ancillary equipment through its relationship with Wexford Capital. Despite a challenging year for natural gas, Mammoth is upgrading its pressure pumping fleet to Tier 4 dual fuel to remain competitive, anticipating increased demand and consolidation in the Utica shale play, particularly with EOG Resources' growing investment.

Outlines

Part 1: Corporate Evolution, Divestiture

Part 2: Energy Assets, Market Strategy

Part 3: Sand, Drilling, Accommodations

Part 4: Infrastructure, Engineering, Fiber

Part 5: Valuation, Capital Allocation

Part 6: Wexford, Shareholder Value

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Pitch The PM

Part 1: Corporate Evolution, Divestiture

Mammoth Energy Services: Transition from Oilfield Services to Diversified Assets

Divesting the T&D Business: Monetizing Investment for Attractive Returns

Part 2: Energy Assets, Market Strategy

Rental Business Expansion: Aircraft Investments and High IRR Opportunities

Energy Market Strategy: Pressure Pumping in the Utica and Marcellus

Counter-Cyclical Investment: Upgrading Frac Fleets to Dual Fuel

Utica Market Growth: EOG's Investment and Regional Gas Demand

Part 3: Sand, Drilling, Accommodations

Natural Gas Dynamics: Wet Gas Impact and Sand Business Challenges

Sand Market Opportunities: Western Canada and Capital Allocation

Canada Sand Business Growth and Railcar Fleet Management

Sand Sales and Directional Drilling Business Overview

Accommodations Business in Canada: Performance and Potential Expansion

Part 4: Infrastructure, Engineering, Fiber

Infrastructure Segment: Rental Business Outlook and Expansion

Fiber and Engineering Businesses: Organic Growth and Future Prospects

Portfolio Overview and Drilling Rig Exit Strategy

Part 5: Valuation, Capital Allocation

Asset Appraisal and Valuation Snapshot

Sand Business Valuation and Underutilized Asset Value

Growth Strategy: Rentals, Accommodations, and Capital Allocation

Part 6: Wexford, Shareholder Value

Wexford's Role and Share Repurchase Program

Share Repurchase Considerations and Communication Strategy

EP.009: Cigar Butt Morphing into a Compounder: 50% of NAV & Pivoting to Higher Return Industries

Pitch The PM

Part 1: Corporate Evolution, Divestiture

00:04Mammoth Energy Services: Transition from Oilfield Services to Diversified Assets

Mammoth Energy Services: Transition from Oilfield Services to Diversified Assets

01:56Divesting the T&D Business: Monetizing Investment for Attractive Returns

Divesting the T&D Business: Monetizing Investment for Attractive Returns

Part 2: Energy Assets, Market Strategy

04:45Rental Business Expansion: Aircraft Investments and High IRR Opportunities

Rental Business Expansion: Aircraft Investments and High IRR Opportunities

07:56Energy Market Strategy: Pressure Pumping in the Utica and Marcellus

Energy Market Strategy: Pressure Pumping in the Utica and Marcellus

10:31Counter-Cyclical Investment: Upgrading Frac Fleets to Dual Fuel

Counter-Cyclical Investment: Upgrading Frac Fleets to Dual Fuel

13:54Utica Market Growth: EOG's Investment and Regional Gas Demand

Utica Market Growth: EOG's Investment and Regional Gas Demand

Part 3: Sand, Drilling, Accommodations

16:07Natural Gas Dynamics: Wet Gas Impact and Sand Business Challenges

Natural Gas Dynamics: Wet Gas Impact and Sand Business Challenges

18:33Sand Market Opportunities: Western Canada and Capital Allocation

Sand Market Opportunities: Western Canada and Capital Allocation

20:41Canada Sand Business Growth and Railcar Fleet Management

Canada Sand Business Growth and Railcar Fleet Management

23:36Sand Sales and Directional Drilling Business Overview

Sand Sales and Directional Drilling Business Overview

25:28Accommodations Business in Canada: Performance and Potential Expansion

Accommodations Business in Canada: Performance and Potential Expansion

Part 4: Infrastructure, Engineering, Fiber

28:38Infrastructure Segment: Rental Business Outlook and Expansion

Infrastructure Segment: Rental Business Outlook and Expansion

30:46Fiber and Engineering Businesses: Organic Growth and Future Prospects

Fiber and Engineering Businesses: Organic Growth and Future Prospects

33:15Portfolio Overview and Drilling Rig Exit Strategy

Portfolio Overview and Drilling Rig Exit Strategy

Part 5: Valuation, Capital Allocation

34:34Asset Appraisal and Valuation Snapshot

Asset Appraisal and Valuation Snapshot

37:09Sand Business Valuation and Underutilized Asset Value

Sand Business Valuation and Underutilized Asset Value

39:00Growth Strategy: Rentals, Accommodations, and Capital Allocation

Growth Strategy: Rentals, Accommodations, and Capital Allocation

Part 6: Wexford, Shareholder Value

41:38Wexford's Role and Share Repurchase Program

Wexford's Role and Share Repurchase Program

43:39Share Repurchase Considerations and Communication Strategy

Share Repurchase Considerations and Communication Strategy