{"id":501623,"date":"2021-06-08T07:03:18","date_gmt":"2021-06-08T11:03:18","guid":{"rendered":"https:\/\/www.marketnewsdesk.com\/index.php\/mammoth-energy-releases-additional-information-regarding-work-performed-in-puerto-rico-2\/"},"modified":"2021-06-08T07:03:18","modified_gmt":"2021-06-08T11:03:18","slug":"mammoth-energy-releases-additional-information-regarding-work-performed-in-puerto-rico-2","status":"publish","type":"post","link":"https:\/\/www.marketnewsdesk.com\/index.php\/mammoth-energy-releases-additional-information-regarding-work-performed-in-puerto-rico-2\/","title":{"rendered":"Mammoth Energy Releases Additional Information Regarding Work Performed in Puerto Rico"},"content":{"rendered":"
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OKLAHOMA CITY, June 08, 2021 (GLOBE NEWSWIRE) — Mammoth Energy Services, Inc. (\u201cMammoth\u201d or the \u201cCompany\u201d) (NASDAQ:TUSK) today announced that it has posted to its website additional information addressing two documents recently released by the Federal Emergency Management Agency (\u201cFEMA\u201d) that relate to hurricane repair work performed by Cobra Acquisitions LLC (\u201cCobra\u201d) in Puerto Rico.<\/p>\n

FEMA released a Determination Memorandum dated May 26, 2021, related to the first of two contracts Cobra successfully performed for the Puerto Rico Electric Power Authority (\u201cPREPA\u201d). Cobra and PREPA executed the Emergency Master Service Agreement for PREPA\u2019s Electrical Grid Repairs \u2013 Hurricane Maria on October 19, 2017 (the \u201cContract\u201d). PREPA has 60 days from the receipt of FEMA\u2019s Determination Memorandum to file an appeal.<\/p>\n

In addition to the Determination Memorandum, the Company also recently obtained a draft Cost Analysis prepared by FEMA in response to the recommendation of the Department of Homeland Security\u2019s Office of Inspector General (\u201cOIG\u201d) made in an OIG report dated July 3, 2019 (OIG-19-052). The OIG recommended that FEMA conduct a comprehensive analysis of Cobra\u2019s Contract costs and disallow reimbursement to PREPA of any Cobra Contract costs that are not reasonable. In order to address the OIG recommendation, FEMA and the United States Army Corps of Engineers (\u201cUSACE\u201d) analyzed the reasonableness of the actual Cobra costs for which PREPA is seeking reimbursement from FEMA.<\/p>\n

Arty Straehla, chief executive officer of Mammoth commented, \u201cToday, we release a fifth confirmation that the work performed by our subsidiary Cobra in Puerto Rico was both within the scope of the PREPA contract and was at a lower overall cost than other contractors on the island. This information, which is contained in reports produced by both FEMA and USACE, adds to previous confirmations, including (i) the FEMA Determination Memorandum dated December 23, 2017, (ii) the FEMA memorandum dated April 22, 2019, (iii) Emergency Contract \u2013 Cost Validation Report prepared by the Homeland Security Operational and Analysis Center dated March 28, 2019 (the ‘Rand Report’) and (iv) Freedom of Information Act data, all of which can be found on our website www.mammothenergy.com. The documentation continues to show that our team performed a difficult job in a difficult environment to save lives and aid the people of Puerto Rico in their time of need. In addition to this recently obtained information, we have also recently become aware in court filings made by PREPA that FEMA has obligated approximately $250 million for costs incurred under the second contract.\u201d<\/p>\n

\n FEMA Cost Analysis<\/strong>\n <\/p>\n

The scope of FEMA\u2019s Cost Analysis included the following:<\/p>\n

    \n
  1. Evaluate Cobra\u2019s overall level of effort and work productivity based on the statement of work (\u201cSOW\u201d) developed by FEMA;<\/li>\n
  2. Compare Cobra\u2019s actual costs to those of other electrical contractors that performed similar work when the data existed. FEMA reviewed Cobra\u2019s cost of work performed per transmission line (\u201cTL\u201d) and distribution line (\u201cDL\u201d), Cobra\u2019s overall actual average daily rate, and the daily per diem to cover lodging and living expenses; and<\/li>\n
  3. Reviewed USACE\u2019s report and consider its recommendations prior to making a conclusion on cost reasonableness.<\/li>\n<\/ol>\n

    After completing its Cost Analysis, FEMA came to the conclusions below in the draft report. A full copy of the draft findings can be found on the Mammoth website: https:\/\/ir.mammothenergy.com\/events-presentations<\/a>.<\/p>\n