With the acquisition of Mobile Energy Rentals, oilfield services player Solaris sees opportunity to grow in industries outside of the oil patch—data centers, in particular. (Source: Shutterstock/Solaris Oilfield Infrastructure)
Solaris Oilfield Infrastructure shares are up over 40% since announcing a $200 million acquisition of Mobile Energy Rentals.
Houston-based Solaris announced the acquisition late July 9; the company’s stock trading closed at $8.27 per share.
Solaris shares jumped over 37% to close at $11.36 per share on July 10, the first day of trading after announcing the acquisition. Shares were trading up at $12.09 per share near midday on July 11.
Analysts see the acquisition of Mobile Energy Rentals, a provider of distributed power solutions, as a way for Solaris to extend its services outside of the oil patch into data centers, emergency response, grid resiliency and other applications.
Houston-based Mobile Energy Rentals (MER) provides primarily natural gas-powered mobile turbines and other related equipment to customers in places where grid infrastructure is unavailable or unreliable.
The acquisition gives Solaris “a growth leg” when compared to the broader North American onshore oilfield services market, which is challenged by lower rig counts, according to Piper Sandler Managing Director Luke Lemoine.
“With the expansion of micro-grids and data centers, the mobile power generation business is expected to rapidly expand over the next several years,” Lemoine wrote in a July 11 report.
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MER’s fleet of power generation assets—a portfolio of 153 megawatts (MW)—is currently fully utilized. By the end of third quarter 2025, the fleet is expected to grow to 478 MW based on existing purchase agreements.
Tudor, Pickering, Holt & Co. (TPH) reports that “inbounds continue to grow from investors around the service industries’ ability to provide commercial solutions in the mobile power space.” During a July 10 call with analysts, Solaris management underscored that about half of MER’s future growth is expected to come from non-oilfield related industries.
“Data centers in particular continue to be [the] focal point for a number of players in this market as traditional energy sources struggle to keep up with explosive demand in the near term,” TPH analyst Matt Portillo reported July 11.
Solaris Chairman and CEO Bill Zartler said MER’s largest contract is with a recently constructed data center facility.
“While the data center is close in physical proximity to an existing power plant and distribution infrastructure, the backlog to connect to the grid introduced the need for a behind-the-meter solution which could efficiently be dispatched to meet the customer’s needs,” Zartler said during the conference call.
MER continues to see growth opportunities from oil and gas customers, including upstream, midstream and downstream operators.
The $200 million acquisition includes $60 million in cash and the issuance of 16.5 million shares of Solaris’ Class B common stock to MER’s founders and management team, who will join Solaris after closing.
When the deal closes, Solaris intends to change its corporate brand to Solaris Energy Infrastructure Inc., trading on the New York Stock Exchange under the ticker symbol “SEI.” The MER acquisition is expected to close by the end of the third quarter.
Solaris isn’t the only services player growing in the mobile power space: Liberty Energy, Patterson-UTI Energy and Halliburton are investing in mobile power solutions and exploring applications outside of the energy industry.
And oil and gas companies are getting creative to meet their growing power needs.
Public E&P Diamondback Energy signed in April a 20-year power-purchase agreement with California-based Oklo Inc. for a 50-MW small nuclear reactor to power its Permian Basin operations.
Separately, Liberty made a $10 million investment in Oklo last year.
In the Delaware Basin, Devon Energy is exploring ways to use stranded volumes of Permian associated gas to power an interconnected microgrid across its drilling projects.
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