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Mammoth Energy announces filing of Rand Corporation report findings » 08:2006/0906/09/20
Mammoth Energy Services…
Mammoth Energy Services announced that it has filed with the Securities and Exchange Commission a detailed independent reasonableness analysis of the October 19, 2017 emergency Master Services Agreement between Cobra Acquisitions and the Puerto Rico Electric Power Authority. The report adds further validation to a December 23, 2017 letter from the Federal Emergency Management Agency to the Government of Puerto Rico that the costs under the MSA were reasonable and the MSA was awarded in compliance with applicable procurement provisions. After over a year of requests under the Freedom of Information Act, Mammoth received a copy of a detailed independent assessment of the reasonableness of the emergency MSA dated October 19, 2017 between the Company's subsidiary Cobra and PREPA for repairs to PREPA's electrical grid as a result of Hurricane Maria. This report, titled "Reasonableness Analysis of Cobra Acquisitions, LLC Emergency Contract - Cost Validation Report" dated March 28, 2019, was prepared at the request of FEMA by the Homeland Security Operational and Analysis Center, a federally funded research and development center operated by the Rand Corporation for the U.S. Department of Homeland Security. FEMA's request for the Rand Report followed a December 22, 2017 Determination Memorandum produced by FEMA that found the MSA to be reasonable The 77-page Rand Report's comprehensive analysis and findings are significant and contain, among others, the following conclusions: Selection of Cobra was reasonable: "Having examined [the foregoing] aspects regarding the reasonableness of PREPA's emergency procurement process, HSOAC finds that selecting Cobra for the MSA was reasonable considering FEMA policy on emergency situations and existing regulations regarding contracting." PREPA adhered to procurement statutes and policies in awarding the contract to Cobra: "PREPA adhered to Puerto Rican legal statutes regarding emergency situations and remained consistent with their own internal policies...Thus, according to this evaluation of the procurement process HSOAC concludes that PREPA engaged in a reasonable procurement process given the circumstances following Hurricane Maria." Cobra's rates were reasonable: "We conclude that Cobra's blended rates fall within representative ranges for high voltage emergency repair work. This conclusion is delivered from analytical investigation which combined knowledge of work conditions, assumptions into wage burdens, evaluation of the equipment quantities and workforce structures, different assumptions about fuel costs, and inclusion of the best benchmark data and current adjustment factors available at this time....Cobra's blended rates fall within estimated ranges in all scenarios we considered."
Mammoth Energy reports Q1 adj. EPS (36c), two est. (53c) » 08:2205/1105/11/20
Reports Q1 revenue…
Reports Q1 revenue $97.4M, one est. $102.45M. Arty Straehla, Mammoth's Chief Executive Officer, stated, "The diversification strategy we implemented nearly three years ago is allowing us to focus on our infrastructure business. Infrastructure results are improving and we are encouraged by our new bidding opportunities. Working with our new infrastructure management team, we are cutting costs, streamlining operations and improving our operating margins. Conversely, our oilfield business remains under fundamental pressure from the volatility in oil prices. The unprecedented volatility in oil prices has been exacerbated by the outbreak of the COVID-19 pandemic, which has resulted in global oil demand destruction and economic decline. Our oilfield activity has been, and will likely continue to be, challenged by significantly reduced levels of capital expenditures by our customers. As a result, we have temporarily idled several of our oilfield services businesses and expect lower pricing and utilization in those that remain in operation."
Mammoth Energy reports Q4 EPS (58c), consensus (64c) » 16:1702/2702/27/20
Reports Q4 revenue…
Reports Q4 revenue $67.6M, consensus $119.8M. Arty Straehla, Mammoth's Chief Executive Officer, stated, "The hiring of a new president for our infrastructure division in November 2019 has stabilized operations, attracted experienced industry leaders to key management positions and improved the performance of the business. With this management team in place, we are confident we can grow our infrastructure business given that demand for the services we offer outstrips supply. Market fundamentals are challenging for our oil field businesses. Although we believe the reported retirement of equipment across the industry is beginning to help the market, pricing and utilization for our oil field businesses remain depressed. The conversion of our pressure pumping fleets to dynamic gas blending ("DGB") capabilities is progressing, and all three of our staffed fleets are operating."
Mammoth Energy says Gulfport actions constitute breach of contract » 08:1512/2412/24/19
In a regulatory filing…
In a regulatory filing yesterday, Mammoth Energy Services (TUSK) noted that Stingray Pressure Pumping, a wholly owned subsidiary of the company, and Gulfport Energy (GPOR) are parties to an amended and restated master services agreement for pressure pumping services effective October 1, 2014 and amended several times since. Pursuant to and in accordance with the terms of the contract, Stingray provides hydraulic fracturing, stimulation and related completion and rework services to Gulfport in exchange for the payments specified in the contract. The contract provides for a term ending in December 2021. The filing stated in part: "On December 20, 2019, Gulfport filed with the Securities and Exchange Commission a current report on Form 8-K in which Gulfport states, in part: 'On December 18, 2019, Gulfport notified [Stingray] of the exercise of Gulfport's termination right under the [Contract] in connection with [Stingray's] inability to fulfill or timely cure its obligation under the [Contract.]' Prior to the filing of the Gulfport 8-K, Gulfport had not provided the Company with a notice of termination that complies with the provisions of the Contract. While the Company did receive a letter from Gulfport on December 18, 2019, it was not, in fact, a notice of termination. Rather, the Gulfport Letter informed the Company that Gulfport had completed its review of the accounts and records maintained by Stingray for the period January 2017 to December 2018 in accordance with the terms of the Contract and was claiming certain exceptions and costs to be determined. Among other things, the Gulfport Letter also requested that Stingray confirm in writing that it would work with Gulfport on a new billing methodology going forward...The Company disputes that Stingray has not or is unable to fulfill or timely cure its obligations under the Contract...If Gulfport is now attempting to terminate the Contract as it states in the Gulfport 8-K, the Company believes that Gulfport's actions constitute a breach of the Contract, disputes that Gulfport has provided any notice of termination, and intends to vigorously contest termination and enforce the Company's rights. Gulfport owns approximately 22% of the Company's outstanding common stock and one of the Company's directors is Gulfport's designee pursuant to that certain Investor Rights Agreement between the Company and Gulfport, dated as of October 12, 2016, entered into by the parties thereto in connection with the Company's initial public offering."