OKLAHOMA
CITY, June 14, 2022 /PRNewswire/ -- Mammoth
Energy Services, Inc. (NASDAQ: TUSK) ("Mammoth" or the "Company")
announced today the first appeal response from the Federal
Emergency Management Agency ("FEMA") related to Project Worksheet
251, commonly referred to as the first contract between Mammoth's
subsidiary Cobra Acquisitions LLC ("Cobra") and the Puerto Rico
Electric Power Authority ("PREPA"). This appeal followed the
May 26, 2021, determination
memorandum issued by FEMA, which denied $47
million of the claimed costs under the first contract.
FEMA approved the appeal in part and denied the appeal in
part. FEMA found that staffing costs of $24.4 million are eligible for funding and that
FEMA would amend Project Worksheet 251 to obligate this additional
funding.
Mammoth's Chief Executive Officer, Arty Straehla, commented:
"Despite our work having received numerous third-party
validations, PREPA continues to choose to pay advisors rather than
its pre-existing obligations for services performed years
ago. PREPA has $40.4 million in
federal funding sitting in a cash account set aside for our work
that could be used to pay us now, yet PREPA continues to withhold
payment. Astoundingly, the Financial Oversight &
Management Board for Puerto Rico
continues to allow PREPA to accrue interest on FEMA-approved
amounts while PREPA has funds set aside and has over $1 billion in cash on hand. PREPA says that
they can't pay when they don't have funds and won't pay when they
do have funds. This lack of accountability should serve as a
red flag for any entity that is considering performing work for
PREPA and is bad news for people of Puerto Rico the next time a natural disaster
strikes."
PREPA has 60 days from the date of receipt of the determination
to submit a second appeal to the Assistant Administrator, Recovery
Directorate, at FEMA headquarters or to request arbitration by the
Civilian Board of Contract Appeals.
The total amount PREPA owes Cobra exceeds $350 million and continues to accrue contractual
interest at the rate of over $3.3
million per month.
For more information related to the Puerto Rico situation as well as access to the
FEMA first appeal response, please visit:
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: 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 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; inflationary pressures; 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; 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, including the adverse impact
of the recent settlement with 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, Inc.