OKLAHOMA
CITY, Jan. 19, 2023 /PRNewswire/ -- Mammoth
Energy Services, Inc. (NASDAQ: TUSK) ("Mammoth" or the "Company")
today announced that the Federal Emergency Management Agency
("FEMA") released Determination Memorandums dated November 21, 2022, and December 21, 2022, related to the May 26, 2018 contract between the Puerto Rico
Electric Power Authority ("PREPA") and Mammoth's wholly owned
subsidiary Cobra Acquisitions LLC ("Cobra").
The Determination Memorandum dated November 21, 2022, covered the 100% federal cost
share of the May 2018 contract ("PW
466" or "Project 49848") and the Determination Memorandum dated
December 21, 2022, covered the 90%
federal share ("Project 49831") of the May
2018 contract. For PW 466, FEMA determined
approximately $49.3 million in costs
to be eligible and approximately $5.6
million to be ineligible for federal assistance. In a
January 7, 2022, Joint Status Report
filed in PREPA's bankruptcy case, PREPA indicated that they would
review the Determination Memorandum and, to the extent they felt
plausible, file a first-level administrative appeal by January 20, 2023. Further, PREPA indicated
that they did not believe that FEMA's decision in the November
Determination Memorandum would result in additional funding to
PREPA for costs incurred under PW 466.
For Project 49831, FEMA determined approximately $233.7 million in costs to be eligible and
approximately $68.1 million to be
ineligible for federal assistance. In a January 7, 2022, Joint Status Report filed in
PREPA's bankruptcy case, PREPA indicated that subject to
approximately $21.5 million in
offsets asserted by PREPA, approximately $99.2 million in FEMA funding would be available
to PREPA for Cobra's outstanding invoices. Additionally,
PREPA indicated that they would review the Determination Memorandum
and, to the extent they felt plausible, file a first-level
administrative appeal of FEMA's decision by February 19, 2023. Both the November 2022 and December
2022 Determination Memorandums can be found on Mammoth's
website www.mammothenergy.com.
Separately, Mammoth has sought and obtained bipartisan help from
Senate and Congressional members in pursuit of collecting the over
$375 million outstanding receivable
from PREPA. The assistance of these Senators and
Congressional members has been beneficial to the efforts to collect
the receivable from PREPA and the Company continues to pursue
multiple avenues to collect the money owed from PREPA.
Arty Straehla, Chief Executive Officer, commented, "While the
financial and operational issues of PREPA have been well
documented, the ongoing refusal by the Financial Oversight and
Management Board for Puerto Rico
("Oversight Board") and the Central Office for Recovery,
Reconstruction, and Resilience ("COR3") to hold PREPA accountable
to pay contractors for work performed more than three years ago is
absurd. Cobra's work has been affirmed by both FEMA and independent
reviewers such as the Rand Corporation, and the lack of commitment
by the Oversight Board and COR3 to hold PREPA accountable serves as
a dangerous precedent related to the oversight of federal funds and
a stark warning to private sector partners considering assisting
Puerto Rico. Further, the strategy of the Oversight Board to
delay resolution and turn a blind eye towards PREPA's refusal to
pay contractors for work that has been affirmed, and for which
federal funds are available to reimburse PREPA for the payments,
should serve as an indication of the lack of oversight that is
pervasive at both the Oversight Board and COR3 relative to the
management of federal funding and give pause to Senators and
Congressional members before appropriating additional funding to
PREPA. To that end, I've written a letter to David Skeel, the
Chairman of the Oversight Board, and all of the members of the
Oversight Board, requesting attention to this matter." A copy of
this letter can be found on Mammoth's website
www.mammothenergy.com.
Mammoth Energy Services, Inc.
Mammoth is an
integrated, growth-oriented energy services company focused on the
construction and repair of the electric grid for private utilities,
public investor-owned utilities and co-operative utilities through
its infrastructure services businesses. The Company also provides
products and services to enable the exploration and development of
North American onshore unconventional oil and natural gas reserves.
Mammoth's suite of services and products include: infrastructure
services, well completion services, natural sand and proppant
services, drilling services and other energy services. For more
information, please visit www.mammothenergy.com.
Contact:
Mark Layton,
Chief Financial Officer
mlayton@mammothenergy.com
(405) 608-6007
Investors:
Rick
Black
rblack@dennardlascar.com
(832) 435-0026
Forward-Looking Statements and Cautionary
Statements
This news release (and any oral statements
made regarding the subjects of this release, including on the
conference call announced herein) contains certain statements and
information that may constitute "forward-looking statements" within
the meaning of Section 27A of the Securities Act of 1933, as
amended, and Section 21E of the Securities Exchange Act of
1934, as amended, and the Private Securities Litigation Reform Act
of 1995. All statements, other than statements of historical facts
that address activities, events or developments that Mammoth
expects, believes or anticipates will or may occur in the future
are forward-looking statements. The words "anticipate," "believe,"
"ensure," "expect," "if," "intend," "plan," "estimate," "project,"
"forecasts," "predict," "outlook," "aim," "will," "could,"
"should," "potential," "would," "may," "probable," "likely" and
similar expressions, and the negative thereof, are intended to
identify forward-looking statements. Without limiting the
generality of the foregoing, forward-looking statements contained
in this press release specifically include statements, estimates
and projections regarding the Company's business outlook and plans,
future financial position, liquidity and capital resources,
operations, performance, acquisitions, returns, capital expenditure
budgets, costs and other guidance regarding future developments.
Forward-looking statements are not assurances of future
performance. These forward-looking statements are based on
management's current expectations and beliefs, forecasts for the
Company's existing operations, experience and perception of
historical trends, current conditions, anticipated future
developments and their effect on Mammoth, and other factors
believed to be appropriate. Although management believes that the
expectations and assumptions reflected in these forward-looking
statements are reasonable as and when made, no assurance can be
given that these assumptions are accurate or that any of these
expectations will be achieved (in full or at all). Moreover, the
Company's forward-looking statements are subject to significant
risks and uncertainties, including those described in its Annual
Reports on Form 10-K, Quarterly Reports on Form 10-Q, Current
Reports on Form 8-K and other filings it makes with the SEC,
including those relating to the Company's acquisitions and
contracts, many of which are beyond the Company's control, which
may cause actual results to differ materially from historical
experience and present expectations or projections which are
implied or expressed by the forward-looking statements. Important
factors that could cause actual results to differ materially from
those in the forward-looking statements include, but are not
limited to: any continuing impacts of the COVID-19 pandemic,
related global and national health concerns and economic
repercussions; demand for our services; the volatility of oil and
natural gas prices and actions by OPEC members and other exporting
nations affecting commodities prices and production levels; the
impact of the war in Ukraine on
the global energy and capital markets and global stability;
operational challenges relating to the COVID-19 pandemic and
efforts to mitigate the spread of the virus, including logistical
challenges, protecting the health and well-being of our employees,
remote work arrangements, performance of contracts and supply chain
disruptions; inflationary pressures; rising interest rates and
their impact on the cost of capital; the outcome of ongoing
government investigations and other legal proceedings, including
those relating to the contracts awarded to the Company's subsidiary
Cobra Acquisitions LLC ("Cobra") by the Puerto Rico Electric Power
Authority ("PREPA"); the failure to receive or delays in receiving
governmental authorizations, approvals and/or payments, including
payments with respect to the PREPA account receivable for prior
services to PREPA performed by Cobra; the Company's inability to
replace the prior levels of work in its business segments,
including its infrastructure and well completion services segments;
risks relating to economic conditions, including concerns over a
potential economic slowdown or recession; impacts of the recent
federal infrastructure bill on the infrastructure industry and our
infrastructure services business; the loss of or interruption in
operations of one or more of Mammoth's significant suppliers or
customers; the loss of management and/or crews; the outcome or
settlement of our litigation matters; the effects of government
regulation, permitting and other legal requirements; operating
risks; the adequacy of capital resources and liquidity; Mammoth's
ability to (i) continue to comply with or, if applicable, obtain a
waiver of forecasted or actual non-compliance with certain
financial covenants from its lenders and comply with other terms
and conditions under its amended revolving credit facility, as
amended, (ii) extend or refinance our revolving credit facility at
or prior to maturity on the terms acceptable to Mammoth or at all
and (iii) meet its financial projections associated with reducing
its debt; weather; natural disasters; litigation; volatility in
commodity markets; competition in the oil and natural gas and
infrastructure industries; and costs and availability of
resources.
Investors are cautioned not to place undue reliance on any
forward-looking statement which speaks only as of the date on which
such statement is made. We undertake no obligation to correct,
revise or update any forward-looking statement after the date such
statement is made, whether as a result of new information, future
events or otherwise, except as required by applicable law.
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SOURCE Mammoth Energy Services, Inc.