Mammoth Energy Services, Inc. (TUSK): PESTLE Analysis [Nov-2025 Updated]

You're looking at Mammoth Energy Services, Inc. (TUSK) and wondering if the dramatic pivot is real. Honestly, when you look at TUSK in late 2025, you see a company mid-transformation, shedding its high-risk past while trying to build a stable, cash-generating future in a tough energy market. The core takeaway is that the massive legal overhang is mostly resolved with the $188.4 million Puerto Rico Electric Power Authority (PREPA) settlement, but the economic engine is still sputtering-Q3 2025 revenue from continuing operations was only $14.8 million-forcing a dramatic pivot into new, demand-driven segments like aviation and fiber optics. Below, we break down how the political tailwinds from infrastructure spending, the $127.3 million unrestricted cash war chest, and the shift away from volatile oilfield services defintely redefine TUSK's risk profile and near-term opportunities.

Mammoth Energy Services, Inc. (TUSK) - PESTLE Analysis: Political factors

Resolution of the protracted Puerto Rico Electric Power Authority (PREPA) contract dispute, removing a major political risk.

You can finally breathe a little easier about the Puerto Rico Electric Power Authority (PREPA) contract. After years of litigation, Mammoth Energy Services' subsidiary, Cobra Acquisitions LLC, settled the dispute in July 2024 for a total of $188.4 million. This settlement, approved by the Title III Court in September 2024, removes a massive political and financial overhang that has plagued the stock for years. Honestly, resolving a claim that totaled $359.1 million in remaining receivables as of June 30, 2024, even at a discount, is a clear win for balance sheet clarity.

The immediate financial impact was significant. The company recorded a non-cash, pre-tax charge of approximately $170.7 million in the second quarter of 2024 to adjust the receivable to the settlement amount. But, the cash inflow is the key: the initial payment of $150.0 million was used to pay off and terminate the term credit facility, which had an outstanding balance of approximately $49.3 million as of June 30, 2024. That's a huge step toward financial stability.

Continued pursuit of remaining Federal Emergency Management Agency (FEMA) funds following the $188.4 million settlement.

The settlement didn't close the book on all the cash. Mammoth is still working to secure the remaining $38.4 million of the settlement proceeds. This amount is split, and the political risk is still present, just smaller.

Here's the quick math on the remaining funds:

• $20.0 million is the second installment, contingent on the effective date of PREPA's plan of adjustment in the Title III bankruptcy proceedings.
• $18.4 million represents the 'Withheld FEMA Funds,' which were paid to Cobra in October 2024.

To be fair, the $18.4 million payment came with a caveat. Due to appeals from three Puerto Rican municipalities asserting tax claims, Cobra had to collateralize the funds by transferring $19.3 million to a restricted cash account. So, the political fight isn't defintely over, but the risk is now ring-fenced with cash.

Opportunities in infrastructure from the U.S. Infrastructure Investment and Jobs Act.

The U.S. Infrastructure Investment and Jobs Act (IIJA) presents a new political tailwind, even after Mammoth's strategic shift. In April 2025, the company sold the majority of its infrastructure subsidiaries for $108.7 million, but the remaining business segments are still positioned to benefit from the massive federal spending.

The IIJA's focus on legacy pollution cleanup directly creates opportunities for the energy services side of the business:

• The legislation allocates over $400 million to Pennsylvania alone over ten years for plugging abandoned and orphan (AO) oil and gas wells, with the state eligible for a total of $305.6 million in Formula Grant funding.
• This work is a natural fit for the company's well completion and other services segments.

Plus, the sheer scale of the IIJA's investment-over $350 billion in highway programs and $55 billion in water infrastructure-creates a massive, sustained demand for construction materials. This is a clear benefit for the Natural Sand Proppant Services segment. Mammoth's balance sheet, which grew to approximately $160 million in cash after the infrastructure sale, gives management the financial flexibility to invest in or acquire assets that directly target IIJA-funded projects.

Geopolitical tensions and OPEC+ policy create uncertainty in global oil and gas prices.

For the oil and gas services side of the business, geopolitical factors and the Organization of the Petroleum Exporting Countries Plus (OPEC+) policy are the dominant political risks. The political decisions of OPEC+ directly influence the drilling activity of Mammoth's customers.

The market is highly sensitive to these political moves, as seen in the second quarter of 2025 (Q2 2025), when Brent crude futures slid 10.7%, dropping from $74.70 to $66.70/bbl. This volatility directly impacts the demand for their Natural Sand Proppant and other services.

The near-term outlook is for continued uncertainty, as OPEC+ is unwinding its voluntary production cuts, with most of the 2.2 million barrels a day of voluntary constraint expected to be phased out by the third quarter of 2025 (Q3 2025). Goldman Sachs forecasts Brent crude will trade in a range of $70-$85 per barrel in 2025, averaging about $76. This price band is a Goldilocks zone for some, but any move outside it-driven by Middle East tensions or further OPEC+ policy shifts-will immediately affect customer capital expenditure plans.

Political Factor Risk/Opportunity	2025 Financial/Operational Impact	Status as of Nov 2025
PREPA Contract Dispute Resolution	Settlement of $188.4 million (vs. $359.1 million receivable). Repaid ~$49.3 million in debt.	Major political risk removed; cash received and debt terminated.
Remaining PREPA/FEMA Funds Pursuit	Remaining settlement amount of $38.4 million. $18.4 million received but collateralized with $19.3 million restricted cash due to municipal appeals.	Cash receipt is partially restricted; final $20.0 million contingent on PREPA's bankruptcy plan.
U.S. Infrastructure Investment and Jobs Act (IIJA)	Opportunity in orphan well plugging (e.g., PA eligible for >$305.6 million in Formula Grant funding). Sustained demand for Natural Sand Proppant.	Political tailwind for remaining energy services and sand segments; company has $160 million cash to pursue new IIJA-related assets.
Geopolitical/OPEC+ Policy	Oil price volatility impacts customer CapEx. Brent crude Q2 2025 slide of 10.7% (from $74.70 to $66.70/bbl).	OPEC+ cuts unwinding (2.2 million bpd by Q3 2025) caps upside; price forecast range of $70-$85/bbl creates uncertainty for drilling activity.

Mammoth Energy Services, Inc. (TUSK) - PESTLE Analysis: Economic factors

The economic landscape for Mammoth Energy Services, Inc. (TUSK) in 2025 is defined by a deliberate, aggressive portfolio transformation, which has fundamentally reshaped its revenue profile and balance sheet. Your key takeaway here is that the company has traded top-line revenue for a significant cash hoard and a debt-free structure, positioning itself for strategic, accretive investments outside of its traditional, volatile oilfield services.

Q3 2025 revenue from continuing operations was only $14.8 million, reflecting a portfolio shift.

The headline revenue figure of $14.8 million for Q3 2025 from continuing operations is a direct result of the company's strategic divestitures throughout the year. This figure is down from $16.4 million in Q2 2025, primarily due to the sale of the Piranha assets in the Natural Sand Proppant Services segment. This is not a sign of collapsing demand across the board; it's a planned, defintely sharp decline as management simplifies the business model, shifting away from capital-intensive, cyclical services toward higher-margin, demand-driven rentals like the new aviation portfolio. The remaining segments now drive the revenue, including the Drilling segment, which was a standout, with revenue more than tripling sequentially in Q3 2025 to $2.3 million.

The company realized significant cash from asset sales, including $108.7 million for three infrastructure subsidiaries.

The most impactful economic event of 2025 was the monetization of non-core assets, unlocking substantial cash. The sale of three infrastructure subsidiaries-5 Star Electric, LLC, Higher Power Electrical, LLC, and Python Equipment LLC-to Peak Utility Services Group, Inc. was completed for an aggregate sales price of $108.7 million. Plus, the company sold all its hydraulic fracturing equipment for proceeds of $15 million. Here's the quick math on the major divestitures:

Asset Sold	Transaction Date (Approx.)	Aggregate Sales Price	Strategic Rationale
Three Infrastructure Subsidiaries	Q2 2025	$108.7 million	Unlock value from non-core T&D/substation business
Hydraulic Fracturing Equipment	Q2 2025	$15.0 million	Exit capital-intensive well completion services
Total Major Cash Proceeds		$123.7 million	Fund new growth and maintain liquidity

Maintained a strong balance sheet with no debt and unrestricted cash of approximately $127.3 million as of June 30, 2025.

The most compelling economic factor for Mammoth Energy Services is its balance sheet strength. As of June 30, 2025, the company reported $127.3 million in unrestricted cash. This is a massive war chest for a company of this size, and it remains debt-free. This liquidity provides immense optionality for strategic capital deployment, including:

• Investing approximately $40 million year-to-date in the high-return aviation rental portfolio.
• Funding a share repurchase program, authorized up to $50 million.
• Executing accretive mergers and acquisitions (M&A) in its new focus areas.

This strong cash position de-risks the company from the cyclical volatility that plagues many oilfield services peers.

Sustained weakness in natural gas basins is pressuring the remaining well completion and sand services segments.

While the company is pivoting, its legacy segments still face macroeconomic headwinds, particularly the sustained weakness in US natural gas basins. The low commodity price environment is directly pressuring the demand and pricing for its Natural Sand Proppant Services.

• Sand segment revenue fell to $2.7 million in Q3 2025, a steep 49% sequential drop.
• Lower sand pricing, which declined about 6% year-over-year in Q2 2025, offset higher volumes in some areas.
• The company has completely exited the hydraulic fracturing (well completion) business, selling its equipment for $15 million, a clear acknowledgment of the challenging economics in that service line.

This segment underperformance is the main drag on near-term profitability.

Projected adjusted EBITDA loss for the second half of 2025 is expected to range from $3 million to $4 million.

Despite the strategic pivot and strong balance sheet, the company's continuing operations are projected to generate an adjusted EBITDA loss for the second half of 2025 (H2 2025) ranging from $3 million to $4 million. This is an important number because it shows the cost of the transition-the new, smaller portfolio is not yet cash-flow positive at the adjusted EBITDA level. Additionally, the company expects a cash burn related to discontinued operations of $4 million to $5 million in H2 2025, which is mostly for winding down operations and ongoing legal expenses. The good news is that this burn is easily funded by the asset sale proceeds.

Mammoth Energy Services, Inc. (TUSK) - PESTLE Analysis: Social factors

Mammoth Energy Services' social landscape in 2025 is defined by a strategic pivot away from the volatile oilfield labor market, but it still manages the human capital challenges inherent in supporting remote energy operations. The shift toward infrastructure and aviation rental services is a direct move to stabilize the workforce and revenue base, which is a smart move for long-term defintely stability.

Accommodation Services Revenue of $2.3 Million in Q3 2025 Highlights the Continued Need for Remote Workforce Housing in Energy Basins

The company's Accommodation Services segment remains a critical, albeit smaller, revenue stream that directly addresses a core social need in the energy sector: remote workforce housing. This service provides essential, temporary living quarters for personnel working in geographically isolated oil and gas basins, which is a structural requirement for North American energy production.

In the third quarter of 2025, this segment generated revenue of $2.3 million. While this was a decrease from the $2.9 million reported in the third quarter of 2024, it showed a sequential increase from the $1.8 million in Q2 2025, reflecting fluctuating demand. The average utilization rate for the quarter was 185 rooms, down from 222 rooms utilized in Q3 2024, but up from 145 rooms in Q2 2025. This segment's continued performance confirms that the need for secure, on-site housing for a mobile workforce is not going away, even as the company diversifies its core business.

Strong Internal Focus on Employee Health and Safety, Maintaining a 'Stop Work' Policy for Unsafe Conditions

Operating in high-risk environments like oilfields and infrastructure construction necessitates a strong safety culture, which is a key social responsibility factor. Mammoth Energy Services maintains a formal Health, Safety, and Environmental (HSE) policy that places employees as its most valuable asset.

A core element of this safety culture is the 'stop work' policy, which is a powerful social tool. It empowers every single employee and contractor with the authority to immediately halt any work they deem unsafe, without fear of reprisal. This is not just a compliance measure; it's a cultural commitment that directly impacts the well-being and morale of the workforce. Also, the company provides a comprehensive benefits package to support employee health, including:

• Company-paid life and Accidental Death and Dismemberment (AD&D) coverage up to $500,000.
• Disability insurance through Prudential to replace a portion of income.
• Access to a confidential, company-sponsored Employee Assistance Program (ComPsych® GuidanceResources®).

Workforce Retention Remains a Structural Challenge in the Cyclical North American Oilfield Services (OFS) Sector

The oilfield services (OFS) sector is notoriously cyclical, and this volatility creates a persistent structural challenge for workforce retention. When oil prices drop, layoffs are common, and when prices rebound, companies struggle to quickly re-hire and retain skilled labor. The industry faces an 'increasingly competitive labor market' and the risk of 'failure to recruit and retain experienced managers, engineers and other professionals.'

This challenge is a major driver behind the company's current transformation. The consistent boom-bust cycle makes it hard to build a stable, long-term career path, so talent often leaves for less volatile industries. Here's the quick math: a highly cyclical business means high turnover, which drives up recruiting and training costs. This social factor directly erodes operating margins.

The Shift to Infrastructure and Aviation Reduces Reliance on the Highly Cyclical and Volatile Oilfield Labor Market

Mammoth Energy Services is actively mitigating its exposure to the oilfield labor market's social and economic volatility by executing a major portfolio realignment toward higher-return, less cyclical businesses. This strategic shift has been a defining feature of 2025.

The company sold most of its infrastructure subsidiaries for $108.7 million and its hydraulic fracturing equipment for $15.0 million, exiting the highly cyclical well completion services business. The capital has been redeployed into the Rental Services segment, specifically aviation. Year-to-date in 2025, approximately $40 million has been invested to expand the aviation portfolio, including the purchase of eight small passenger aircraft for about $11.5 million.

This move is a direct social strategy: it trades the boom-and-bust labor demand of oilfield work for the more stable, contract-based demand of aviation and general equipment rental. The Rental Services segment revenue was $2.8 million in Q3 2025, up 24% year-over-year, showing the immediate positive impact of this diversification.

The table below summarizes the Q3 2025 performance of the relevant segments, highlighting the new emphasis:

Segment	Q3 2025 Revenue	Sequential Change (vs. Q2 2025)	Year-over-Year Change (vs. Q3 2024)
Accommodation Services	$2.3 million	Up 29%	Down 21%
Rental Services (Including Aviation)	$2.8 million	Down 11%	Up 24%
Infrastructure Services	$4.8 million	Down 13%	Up 9%

Mammoth Energy Services, Inc. (TUSK) - PESTLE Analysis: Technological factors

Infrastructure services growth is driven by macro tailwinds like the expansion of data centers and AI-related power grid demands

You need to know that Mammoth Energy Services' (TUSK) infrastructure segment is now primarily focused on engineering and fiber services, and this shift aligns perfectly with the massive technological demands of the US power grid. The technology tailwinds from artificial intelligence (AI) and data center expansion are creating a huge, immediate need for power infrastructure upgrades. Honestly, this is a clear opportunity.

US electric utilities are projected to spend nearly $208 billion on the power grid in 2025 alone to keep pace with this demand. The sheer scale of new power requirements is staggering: US data center grid-power demand is expected to increase by 22% in 2025, reaching a total of 61.8 GW. TUSK's infrastructure services revenue, which focuses on fiber and engineering, saw a 20% year-on-year increase in Q2 2025, hitting $5.4 million, specifically citing macro tailwinds from data centers and AI.

The company is positioned to capitalize on the technological need to modernize and expand power transmission infrastructure, especially as utility companies like American Electric Power (AEP) forecast a $70 billion capital plan over five years to respond to increased demand. Grid constraints are now a limiting factor for tech growth, so TUSK's expertise in this area is defintely a high-value asset.

Investment of approximately $40 million year-to-date in 2025 to expand the aviation rental portfolio

The company is strategically pivoting its technological and capital focus toward high-return, asset-light rental services, particularly in aviation. This is a smart move to stabilize revenue away from the volatile oilfield sector. As of the Q3 2025 earnings call, TUSK has deployed approximately $40 million year-to-date in 2025 to grow and diversify its aviation rental portfolio.

This investment is not just buying equipment; it's acquiring assets that are immediately accretive, meaning they generate revenue right away. For example, the Q2 2025 purchase of eight small passenger aircraft for $11.5 million immediately placed them under leases with a commuter airline, providing a predictable, recurring revenue stream. This focus on specialized, high-utilization assets is a clear technological strategy to improve asset turnover and margin.

The rental services segment revenue jumped to $3.1 million in Q2 2025, a 72% increase year-over-year, largely due to the expanded aviation offerings. This shows the capital deployment is already translating into tangible revenue growth.

Ongoing capital expenditure (CapEx) of $42 million for 2025 continuing operations is focused on high-return rental and aviation assets

TUSK's capital expenditure (CapEx) plan for 2025 is a direct reflection of its new technological focus. The full-year 2025 CapEx for continuing operations is expected to be $42 million, and this money is heavily concentrated on the rental and aviation businesses. This is a significant commitment to the new strategic direction.

Here's the quick math: CapEx for Q2 2025 alone was $26.9 million, with the majority of that funding targeted at the growth and expansion of the rental services segment. This capital is being used to acquire and maintain specialized, high-demand equipment, which is a better use of cash than maintaining legacy, commoditized oilfield assets. The table below shows the clear shift in capital allocation, moving away from older, low-margin technology toward new, high-return assets.

2025 Capital Expenditure (Continuing Operations)	Amount (Projected Full-Year)	Primary Technological Focus
Total CapEx (Continuing Ops)	$42 million	Aviation and Equipment Rental Services
Q2 2025 CapEx (Actual)	$26.9 million	Rental Services Expansion (including aviation)
YTD Investment in Aviation Portfolio (Q3)	~$40 million	Diversification and recurring revenue generation

Strategic Technological Shift: Divestiture of Pressure Pumping Assets

Instead of continuous investment in high-efficiency, next-generation pressure pumping fleets, TUSK made a decisive technological exit from that segment in 2025. The company sold all of its hydraulic fracturing (pressure pumping) equipment in June 2025 for $15.0 million. This transaction effectively concluded the company's well completion services segment, which is now classified as a discontinued operation.

This is a major strategic technological shift. The decision to sell off older, less efficient pressure pumping technology-which requires massive, continuous capital to upgrade to next-generation dual-fuel or electric fleets to stay competitive-allows TUSK to reallocate that capital to the growing rental and infrastructure segments. They are swapping a high-CapEx, low-margin technology business for a more capital-efficient model.

• Sold all hydraulic fracturing equipment for $15.0 million.
• Eliminated the need for expensive next-gen pressure pumping fleet upgrades.
• Reallocated capital to high-demand aviation and fiber technology.

The technological risk of falling behind on fleet upgrades in the oilfield is gone, but the new challenge is ensuring the rental fleet remains technologically current and highly utilized. You need to monitor the utilization rates of the new aviation assets closely.

Mammoth Energy Services, Inc. (TUSK) - PESTLE Analysis: Legal factors

The $188.4 million PREPA settlement largely resolved the years-long litigation risk, providing a clear path forward for liquidity.

The biggest legal overhang, the dispute with the Puerto Rico Electric Power Authority (PREPA), is defintely off the table. The Title III Court approved the settlement in September 2024, which means Mammoth Energy Services' subsidiary, Cobra Acquisitions LLC, will receive total settlement proceeds of $188.4 million. This is a massive de-risking event for the balance sheet.

Here's the quick math on the liquidity impact: The company used a portion of these proceeds to pay off and terminate its term credit facility, which had an outstanding balance of approximately $49.3 million as of June 30, 2024. The remaining funds, roughly $139.1 million, became cash on the balance sheet for general corporate purposes, contributing to the unrestricted cash on hand of $118.5 million as of August 6, 2025. You can't overstate how much this changes the financial and legal risk profile-it essentially clears the deck of five years of uncertainty.

PREPA Settlement Financial Impact (2025 Fiscal Year)	Amount (Millions USD)	Legal Significance
Total Settlement Proceeds	$188.4	Resolution of a five-year-long litigation risk.
Term Credit Facility Repayment (approx.)	$49.3	Debt elimination, leading to a 'no debt' position as of August 2025.
Remaining Cash for Corporate Use (approx.)	$139.1	Significant boost to liquidity and financial flexibility.

Continued regulatory compliance burden across multiple segments: oilfield services, infrastructure, and the newly expanded aviation leasing business.

Even with the PREPA case closed, the regulatory compliance burden remains complex because of the company's diversified, albeit shifting, business model. The sale of the hydraulic fracturing business for $15.0 million in June 2025 and the sale of the infrastructure subsidiaries for $108.7 million in April 2025 actually simplified things a bit, but new risks emerged.

The ongoing segments still require meticulous compliance management. Plus, the expansion into the aviation rental services segment-which involved purchasing eight small passenger aircraft for approximately $11.5 million-introduces a new regulatory layer. You now have to deal with the Federal Aviation Administration (FAA) regulations, which are notoriously stringent on maintenance, operations, and leasing agreements.

• Oilfield Services: Must comply with state-level oil and gas commission rules, plus federal Occupational Safety and Health Administration (OSHA) and Department of Transportation (DOT) standards.
• Infrastructure Services (Remaining): Compliance with utility-specific regulations, which vary by state and project, particularly regarding fiber optic and utility repair work.
• Aviation Leasing: Subject to strict FAA regulations, including maintenance schedules, pilot licensing verification, and airworthiness directives for the new aircraft fleet.

The compliance cost isn't just fines; it's the operational expense of maintaining the necessary permits, training, and reporting across these disparate industries. Any failure to comply could result in substantial fines or the revocation of operating licenses, which is a swift way to lose a contract.

Exposure to potential litigation and regulatory fines related to environmental impact from historical sand mining and hydraulic fracturing operations.

While the hydraulic fracturing equipment was sold in June 2025, the company's legacy environmental exposure doesn't just vanish. The sale shifts the future risk, but Mammoth Energy Services is still accountable for historical environmental impact from its past well completion services and its continuing natural sand proppant services segment.

The sand mining operations, which generated $5.4 million in revenue in the second quarter of 2025, are a constant source of environmental risk. Sand mining is heavily regulated under the Clean Air Act, Clean Water Act, and state-level reclamation laws. Potential litigation exposure centers on:

• Water Use and Discharge: Permitting and compliance for water withdrawal and wastewater disposal at the Wisconsin sand plants.
• Air Quality: Dust control and particulate matter emissions from mining and processing.
• Land Reclamation: Meeting state requirements for restoring mined land, which can lead to costly fines if not executed correctly.

The sale of the frac business resulted in an expected impairment expense ranging between $7.7 million and $9.2 million in Q2 2025, which reflects the financial impact of exiting that business. Still, management must maintain sufficient reserves against potential future environmental fines or remediation costs tied to the remaining sand operations and any historical liabilities from the divested frac operations. This is an ongoing, non-zero risk you must factor into your valuation models.

Mammoth Energy Services, Inc. (TUSK) - PESTLE Analysis: Environmental factors

You're looking at Mammoth Energy Services, Inc. (TUSK) and the environmental landscape, and the core takeaway is clear: the company is actively shedding its most environmentally scrutinized assets while strategically positioning cash for a pivot toward less carbon-intensive opportunities. This shift is a direct response to the market's increasing demand for environmental accountability and regulatory pressure.

Company stated commitment to minimizing environmental impact and using technology to reduce emissions

Mammoth Energy Services has a formal commitment to minimizing the environmental impact of its operations. This isn't just a boilerplate statement; it's a necessary stance for a company with roots in fossil fuel services. Their goal is to defintely minimize accidents and to use technology to reduce emissions across their remaining segments, which include natural sand proppant services and drilling services. They strive to improve energy efficiency by implementing an effective energy management program and performing regular preventative maintenance on vehicles and equipment.

While the company has not disclosed a major capital expenditure program for new green technology in 2025, their planned capital expenditures for the second half of 2025 are projected to be around $15 million, primarily focused on growth capex for the aviation rental fleet and equipment rental business, which is a significant move away from traditional oilfield services.

• Improve energy efficiency via management programs.
• Use technology to reduce operational emissions.
• Perform regular preventative maintenance on equipment.

Strategic intent to evaluate acquisition opportunities in the renewable energy sector to diversify away from fossil fuel dependency

The company's recent strategic transactions have created a substantial cash position, which management intends to deploy into accretive, value-enhancing acquisitions. As of June 30, 2025, Mammoth had unrestricted cash on hand of $127.3 million, providing significant dry powder for diversification.

The strategic intent is to evaluate acquisition opportunities, particularly in the renewable energy sector, to diversify the portfolio and drive long-term growth. This is a clear signal that the company is mapping its future outside of a sole reliance on the volatile, and environmentally challenged, oil and natural gas sector. They are looking to add assets that will drive expansion and diversify operations.

Here's the quick math: the sale of three infrastructure subsidiaries in April 2025 for $108.7 million plus the hydraulic fracturing equipment sale for $15.0 million has fundamentally changed the balance sheet, creating the capital for this pivot.

Core business remains exposed to increasing environmental scrutiny of hydraulic fracturing (fracking) and frac sand mining practices

Even after the divestiture of the pressure pumping equipment, a significant environmental risk remains in the natural sand proppant services segment. This segment, which mines, processes, and sells frac sand, is directly tied to hydraulic fracturing (fracking) operations.

Future federal and state regulations focused on hydraulic fracturing, including water use, wastewater disposal, and seismic activity, could increase costs for their customers or restrict the use of the process altogether. This would directly reduce demand for Mammoth Energy Services' frac sand products.

For context, the company's natural sand proppant services segment generated revenue of $5.4 million in the second quarter of 2025, selling approximately 242,000 tons of sand at an average price of $21.41 per ton. This revenue stream, while smaller than past operations, is still exposed to the environmental scrutiny facing the entire fracking supply chain.

Segment	Q2 2025 Revenue	Primary Environmental Exposure	Risk Type
Natural Sand Proppant Services	$5.4 million	Frac sand mining and processing, water use, dust emissions.	Regulatory, operational, and market demand.
Drilling Services	$0.7 million (Q2 2025)	Drilling waste, potential for spills, and general oil & gas activity.	Regulatory and operational.

Divestiture of hydraulic fracturing equipment for $15 million in June 2025 reduces the company's direct environmental footprint in well completions

The sale of all equipment used in the hydraulic fracturing business, completed on June 16, 2025, for proceeds of $15.0 million, significantly reduces Mammoth Energy Services' direct environmental exposure.

This move is a tangible step away from the high-profile environmental risks associated with well completions, such as managing large volumes of flowback water and the potential for groundwater contamination. The transaction, executed by subsidiaries Stingray Pressure Pumping LLC and Mammoth Equipment Leasing LLC, essentially removes the company from the pressure pumping (well completion services) line of business.

The company also expects to recognize an impairment expense in the second quarter of 2025 ranging between $7.7 million and $9.2 million related to the goodwill associated with the divested hydraulic fracturing business, which shows the financial cost of exiting the segment.