MAMMOTH ANNOUNCES FEDERAL EMERGENCY MANAGEMENT AGENCY FIRST APPEAL RESPONSE
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/