OKLAHOMA CITY - Mammoth Energy Services, Inc. (NASDAQ: NASDAQ:TUSK), an integrated energy services company, disclosed the payoff of its term credit facility with Wexford Capital LP on Wednesday. Utilizing proceeds from a settlement with the Puerto Rico Electric Power Authority, Mammoth cleared $50.9 million in debt and interest, achieving a debt-free status.
Following this financial move, Mammoth's CFO, Mark Layton, announced an increase in the 2024 capital expenditure budget to $23 million, up $11 million from previous forecasts. The additional funds are earmarked for expansion in the infrastructure division, including $6 million for new crews and $5 million for fleet maintenance.
Mammoth Energy Services provides a range of services for North American onshore oil and natural gas exploration, as well as electric grid construction and repair for various utilities.
The payoff and subsequent capital increase are part of Mammoth's strategic financial management, aiming to optimize its service delivery in the energy sector. This news is based on a press release statement from Mammoth Energy Services, Inc.
In other recent news, Mammoth Energy Services, through its subsidiary Cobra Acquisitions, is set to receive a significant payment from the Puerto Rico Electric Power Authority (PREPA). A court-approved settlement agreement obligates PREPA to disburse an initial amount of $150 million to Cobra, with the remaining $38.4 million to be paid in two parts, contingent on certain conditions. This recent development follows Mammoth Energy's Q2 financial results, which showed a sequential improvement over the previous quarter despite a challenging industry environment. The company reported a net loss of $156 million, primarily due to the PREPA settlement, with an adjusted EBITDA of negative $160.7 million. Looking ahead, Mammoth Energy anticipates flat activity levels for the remainder of 2024, with a potential increase in 2025. The settlement funds are expected to be used for paying off their term credit facility and reinvesting in the business. This recent news provides insight into the company's current financial situation and future plans.
InvestingPro Insights
Mammoth Energy Services' recent debt payoff and increased capital expenditure budget align with several key financial metrics and trends identified by InvestingPro. The company's market capitalization stands at $216.09 million, reflecting its current position in the energy services sector.
InvestingPro data shows that Mammoth's revenue for the last twelve months as of Q2 2023 was $212.46 million, with a significant revenue decline of 47.13% during this period. This context makes the company's debt payoff and increased capital expenditure particularly noteworthy, as it suggests a strategic pivot towards growth and operational improvement despite recent revenue challenges.
An InvestingPro Tip indicates that analysts anticipate sales growth in the current year, which could be partly driven by the company's increased investment in its infrastructure division. This aligns with Mammoth's decision to allocate additional funds for new crews and fleet maintenance.
Another relevant InvestingPro Tip highlights that Mammoth's liquid assets exceed its short-term obligations. This healthy liquidity position supports the company's ability to clear its debt and increase capital expenditure without compromising financial stability.
For investors seeking a more comprehensive analysis, InvestingPro offers 11 additional tips for Mammoth Energy Services, providing a deeper understanding of the company's financial health and market position.
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