COBRA ACQUISITIONS LLC ANNOUNCES SETTLEMENT AGREEMENT WITH PREPA

Core Viewpoint - Cobra Acquisitions LLC, a subsidiary of Mammoth Energy Services, has reached a settlement agreement with the Puerto Rico Electric Power Authority to resolve outstanding matters, with total settlement proceeds expected to be approximately $188 million [1][2]. Financial Implications - The settlement proceeds will be allocated as follows: approximately $49.3 million will be used to pay off a term credit facility, while the remaining $139.1 million will enhance the company's cash reserves for business investments and general corporate purposes [2]. - As of June 30, 2024, Cobra had remaining receivables from PREPA totaling approximately $359.1 million related to prior agreements for restoration services [2][3]. Settlement Agreement Details - Under the settlement terms, Cobra will have an allowed administrative expense claim against PREPA of $170 million, plus $18.4 million in withheld FEMA funds, to be paid in three installments [3]. - The first installment of $150 million is expected to be paid within ten business days following court approval of the settlement agreement, with subsequent payments scheduled based on specific conditions [3][4]. Approval Process - The settlement agreement has been approved by the boards of both Mammoth and PREPA, and is pending approval from the Title III Court, which is expected to address the motion in August or September 2024 [4]. Accounting Impact - As a result of the settlement agreement, the company will record a non-cash, pre-tax charge of approximately $170.7 million in Q2 2024 to adjust its accounts receivable balance from PREPA [5].