Mammoth Calls on FOMB & Congress To Hold PREPA Accountable

Rhea-AI Summary

Mammoth Energy Services (NASDAQ: TUSK) has urged the Financial Oversight and Management Board (FOMB) of Puerto Rico to act quickly for the recovery of over $340 million owed to its subsidiary, Cobra Acquisitions LLC. Following Hurricane Maria's devastation in 2017, Cobra was awarded contracts totaling $1.845 billion for power restoration efforts. As of February 28, 2022, $344 million remains unpaid, including $117 million in interest. The CEO emphasizes the need for federal intervention to pressure the Puerto Rico Electric Power Authority (PREPA) to fulfill its financial obligations, citing significant impacts on business operations.

Positive

• Cobra Acquisitions has contracts worth $1.845 billion for power restoration in Puerto Rico.
• Mammoth's CEO advocates for quick action from federal authorities, indicating strong leadership and commitment.

Negative

• Cobra is owed over $344 million, including $117 million in interest, which hinders ongoing operations.
• Delays in payments from PREPA could adversely affect Mammoth's revenue and cash flow.

OKLAHOMA CITY, March 31, 2022 /PRNewswire/ -- Mammoth Energy Services, Inc. (NASDAQ: TUSK) ("Mammoth" or the "Company") called on members of the Financial Oversight and Management Board for Puerto Rico ("FOMB"), who are in Washington D.C. to brief federal lawmakers on recent activities, to take immediate and substantive action that will result in Mammoth's wholly-owned subsidiary, Cobra Acquisitions LLC ("Cobra") being paid the more than $340 million dollars owed related to the restoration of power in Puerto Rico more than three years ago:

"When disaster struck, the Mammoth team was there for the people of Puerto Rico, and now we need our elected representatives to be there for us. Every day that passes is another day that the interest piles up for the people of Puerto Rico and Mammoth's business activities are hindered here in the United States. The Puerto Rico Electric Power Authority ("PREPA") has the financial resources obligated by U.S. taxpayers to pay their debts, but they are simply choosing not to. Cobra needs the FOMB and members of Congress to step in with strict oversight and hold PREPA accountable. Time is of the essence." 
                                                                             – Mammoth's Chief Executive Officer, Arty Straehla

This week, Oklahoma City-based News 9 investigated PREPA's unpaid bills in a story entitled "Mammoth Energy Appealing To Federal Government Regarding Payment Over $300 Million." The entire segment is available here:  https://tinyurl.com/ms7xenhe

The story includes an interview with Justin Peterson, a member of the FOMB, who said of Cobra's work: "These guys swung into action after Hurricane Maria and they've been treated terribly."

Following Hurricane Maria (September 2017) in Puerto Rico and its complete destruction of the island's power grid, Mammoth, through Cobra, was awarded an initial $200 million restoration contract in 2017. Through five separate amendments to the original contract, the aggregate contract amount was eventually increased to $945 million. PREPA awarded a second contract of $900 million to Cobra in response to a Request for Proposals ("RFP") process.

As of February 28, 2022, Mammoth, through Cobra, is owed $344 million including $117 million in interest charges, as specified in the contract, on remaining invoices for work it has already completed.

For more information related to the Puerto Rico situation, please go to the attached link: https://puertorico.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: the severity and duration of the COVID-19 pandemic, related global and national health concerns and economic repercussions and the resulting negative impact on 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 current Russian/Ukrainian military conflict 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; 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; whether a federal infrastructure bill is implemented and the terms thereof; 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, including the adverse impact of the recent settlements with Gulfport Energy Corporation and MasTec Renewables Puerto Rico, LLC, and the effect on our financial condition and results of operations; the effects of government regulation, permitting and other legal requirements; operating risks; the adequacy of capital resources and liquidity; Mammoth's ability to continue to comply with, or if applicable, obtain a waiver of forecasted or actual noncompliance with certain financial covenants and comply with other terms and conditions under our recently amended revolving credit facility; 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

FAQ

What amount is Mammoth Energy Services owed by PREPA?

Mammoth Energy Services is owed over $344 million by the Puerto Rico Electric Power Authority.

What is the total value of contracts awarded to Cobra for restoration in Puerto Rico?

Cobra has been awarded contracts totaling $1.845 billion for power restoration in Puerto Rico.

What actions is Mammoth requesting from the Financial Oversight and Management Board?

Mammoth is urging the FOMB to take immediate action to ensure PREPA fulfills its financial obligations.