10-K: Mammoth Energy Navigates Divestitures, PREPA Settlement

Mammoth Energy Services reports a reduced net loss in 2025, driven by strategic divestitures and significant progress on the PREPA settlement, despite ongoing challenges in oil and gas.

Summary

• Net loss from continuing operations significantly decreased to $63.8 million for the year ended December 31, 2025, compared to $183.1 million in 2024.
• Adjusted EBITDA from continuing operations improved from a loss of $171.2 million in 2024 to a loss of $17.4 million in 2025.
• Total revenue marginally decreased by 3% to $44.3 million in 2025 from $45.6 million in 2024.
• The company completed four strategic divestitures in 2025, including a portion of infrastructure services for $108.7 million, hydraulic fracturing equipment for $15.0 million, Piranha Proppant LLC processing plant assets, and the Aquawolf engineering services business for $30.0 million.
• Cobra received $150.0 million and $18.4 million in payments from the PREPA settlement in October 2024; $20.0 million remains outstanding, contingent on PREPA's plan of adjustment.
• A non-cash, pre-tax charge of $170.7 million was recorded in Q2 2024 to reduce the PREPA accounts receivable balance.
• The company reported no outstanding debt as of December 31, 2025, and held $102.0 million in unrestricted cash.
• An impairment expense of $31.7 million was recognized in 2025 for natural sand proppant assets (Piranha and Muskie plants).
• Capital expenditures for 2025 totaled $70.6 million, with $70.0 million primarily for aviation equipment.

Sentiment

Score: 7

Explanation: StockSavvy.ai views this as a moderately positive report, reflecting significant progress in resolving the PREPA dispute and a strategic streamlining of operations through divestitures, leading to improved financial metrics and a strong cash position. However, ongoing litigation, a concentrated customer base, and continued volatility in the oil and gas sector temper the overall sentiment.

Positives

• Net loss from continuing operations decreased significantly from $183.1 million in 2024 to $63.8 million in 2025.
• Adjusted EBITDA from continuing operations improved substantially, with the loss narrowing from $171.2 million in 2024 to $17.4 million in 2025.
• Successfully completed four strategic divestitures in 2025, generating aggregate proceeds of approximately $153.7 million.
• Received substantial payments of $150.0 million and $18.4 million from the PREPA settlement, significantly boosting liquidity.
• Achieved a debt-free balance sheet as of December 31, 2025, with $102.0 million in unrestricted cash.
• Rental Services revenue increased by 56% to $11.1 million in 2025, driven by a $2.5 million increase in aviation rental revenue and a 29% increase in equipment rental revenue.
• Infrastructure Services revenue increased by 173% to $4.1 million in 2025, primarily due to increased fiber optic activity.
• Improved margins in rental services due to higher equipment utilization and higher-margin aviation rentals.
• The infrastructure industry outlook is strong, driven by artificial intelligence (AI) and data center projects, with significant funding opportunities from the Infrastructure Investment and Jobs Act (IIJA).
• Maintained effective internal control over financial reporting as of December 31, 2025, with an unqualified audit opinion from Deloitte & Touche LLP.

Negatives

• Total revenue decreased by 3% from $45.6 million in 2024 to $44.3 million in 2025.
• Natural sand proppant services revenue decreased by 13% to $16.6 million in 2025, primarily due to a 12% decrease in average price per ton of sand sold.
• Accommodation services revenue decreased by 17% to $9.0 million in 2025, attributed to a decline in room utilization (186 rooms in 2025 vs. 216 in 2024).
• Other services revenue declined by $3.9 million in 2025 due to the shutdown of water transfer services and idling of crude oil hauling services.
• An impairment charge of $31.7 million was recognized in 2025 on natural sand proppant assets (Piranha and Muskie processing plants).
• A remaining $20.0 million from the PREPA settlement is still outstanding, with payment contingent on the effective date of PREPA's plan of adjustment.
• Appeals against the PREPA settlement order by certain Puerto Rico municipalities and Foreman Electric Services Inc. are ongoing, introducing uncertainty.
• The company reported an operating loss of $57.4 million for 2025.
• Net cash used in operating activities from continuing operations was ($19.6) million in 2025.
• The customer base remains concentrated, with the top five customers accounting for approximately 55% of revenue in 2025.
• The oil and natural gas industry continues to face challenges, including a generally declining rig count and sustained weakness in natural gas basins.

Risks

• Loss of one or more significant customers or their failure to pay could cause revenue to decline substantially, given the concentrated customer base (top five customers accounted for 55% of 2025 revenue).
• The remaining $20.0 million owed by PREPA may not be collected, materially affecting financial condition, results of operations, and cash flows, especially with ongoing bankruptcy proceedings and appeals.
• The portfolio of aircraft assets may become obsolete or experience a decline in customer demand, negatively impacting leasing or selling ability and potentially resulting in impairment charges.
• Continued volatility in oil and natural gas markets impacts capital expenditures by customers, adversely affecting demand for oilfield services and financial results.
• Failure to effectively and timely address the energy transition to a lower carbon footprint could adversely affect the oil and gas business, access to capital, and market for securities.
• Shortages, delays in delivery, and interruptions in the supply of major components, replacement parts, or other equipment could increase costs and limit the ability to operate the rental business.
• Inaccuracies in estimates of volumes and qualities of sand reserves could result in lower than expected sales and higher than expected production costs for natural sand proppant services.
• Reliance on third parties for raw materials and transportation in the natural sand proppant business exposes the company to operational delays and increased costs if relationships are suspended or terminated.
• Demand for frac sand products could be reduced by changes in well stimulation processes and technologies, as well as new governmental regulations.
• The customized nature and remote location of modular camps in the accommodation services segment present unique challenges that could adversely affect successful operations.
• Revenue and expenses denominated in Canadian dollars for the remote accommodation business expose the company to negative impacts from currency fluctuations.
• The company may become subject to lawsuits, indemnity, or other claims, which could materially and adversely affect business, results of operations, and cash flows, as evidenced by ongoing litigation.
• Inability to employ a sufficient number of skilled and qualified workers could diminish capacity and profitability and impair growth potential.
• Operations may be limited or disrupted in certain parts of the continental U.S. and Canada during severe weather conditions, adversely affecting financial condition and results of operations.
• Concerns over general economic, business, or industry conditions, including inflation and credit market volatility, may have a material adverse effect on results of operations, liquidity, and financial condition.
• The company is subject to cybersecurity risks, where incidents or intrusions may result in information theft, data corruption, operational disruption, and/or financial loss.
• Wexford Capital LP, the largest stockholder, controls approximately 45.6% of common stock, and its interests may conflict with those of other stockholders.
• Provisions in the certificate of incorporation and bylaws, along with Delaware law, make it more difficult to effect a change in control of the company, which could adversely affect the price of common stock.

Future Outlook

The company expects 2026 oil and gas activity to remain steady in the first half, with potential for upside in the back half, driven by LNG export capacity coming online and general electricity and power demand enhancements. It plans to strategically capitalize on this anticipated demand. The company intends to expand the capacity and scope of its infrastructure services as demand warrants, both in existing and new geographic areas. Furthermore, it will pursue selected, accretive acquisitions, primarily related to infrastructure services and industrial-based companies, including those in the renewable energy sector. The estimated aggregate capital expenditures for 2026, excluding aviation equipment, are approximately $11 million. The company will continue to monitor market conditions to determine if and when to recommence idled oilfield service offerings and increase its workforce.

Management Comments

• Our primary business objective is to drive returns through improved execution by prioritizing asset utilization, margin expansion, and capital efficiency across the portfolio.
• We believe our portfolio of aviation assets provides an attractive form of aviation asset financing for operators that allows capital deployment and fleet flexibility while eliminating residual value risk for the operators.
• We expect 2026 activity to remain steady during the first half of the year with potential for upside in the back half of the year. Positive trends that may contribute to increased activity will come from LNG export capacity coming online and general electricity and power demand enhancements. We will be strategically positioned to capitalize on this anticipated demand if and when it ramps up.
• We believe that AI and high-performance computing will drive the upgrade and overbuild of fiber networks in order to increase data capacity.
• Funding for projects in the infrastructure space remains strong with added opportunities since the Infrastructure Investment and Jobs Act ('IIJA') was signed into law on November 15, 2021.
• We seek to maintain a conservative balance sheet, which allows us to better react to changes in commodity prices and related demand for our services, as well as overall market conditions.
• Our operational division heads have an extensive track record in the service businesses with an average of over 29 years of services experience.
• Although the ultimate outcome of these appeals cannot be predicted with certainty, Cobra believes that the appeals are without merit.
• Our management is responsible for establishing and maintaining adequate internal control over financial reporting... determined that we maintained effective internal control over financial reporting as of December 31, 2025.

Industry Context

StockSavvy.ai notes that Mammoth Energy Services' strategic shift towards infrastructure and rental services, coupled with divestitures of less profitable or volatile oilfield segments, aligns with broader industry trends emphasizing diversification away from pure-play fossil fuel exposure. The growth in infrastructure services, particularly fiber networks, is well-positioned to benefit from the Infrastructure Investment and Jobs Act (IIJA) and increasing demand driven by AI and data centers, a significant tailwind for the sector. The continued volatility in the oil and natural gas industry, as highlighted by the company, underscores the prudence of these divestitures, even as the company anticipates potential upside in H2 2026 from LNG exports and power demand.

Comparison to Industry Standards

• The filing mentions major competitors in infrastructure services include Quanta Services, Inc. and MasTec, Inc., but does not provide specific comparative metrics or project results.
• Major competitors in natural sand proppant services include Badger Mining Corporation, Covia Holdings Corporation, Hi-Crush Partners LP, Capital Sand Proppants LLC, Athabasca Minerals Inc., Source Energy Services Ltd., and U.S. Silica Holdings Inc., but no specific comparative performance data is provided.
• The company states its Northern White sand reserves and facilities connectivity to rail infrastructure afford it an advantage over competitors in delivering frac sand to major unconventional resource basins in North America, but does not quantify this advantage against specific industry benchmarks.

Corporate Governance

Legal Proceedings

• Cobra is pursuing litigation in the Title III Court and other dispute resolution efforts seeking recovery of amounts owed by PREPA for restoration services in Puerto Rico. A settlement agreement was reached on July 22, 2024, for $170.0 million plus $18.4 million in Withheld FEMA Funds, with $20.0 million remaining outstanding as of December 31, 2025. Appeals against the settlement order by certain Puerto Rico municipalities and Foreman Electric Services Inc. are ongoing.
• Foreman Electric Services Inc. filed a petition against Mammoth Inc. and Cobra in Oklahoma County District Court, alleging RICO violations and state-law claims for $250 million in damages. An amended petition filed November 16, 2023, added defendants and claims for fraudulent transfer, seeking receivership. Motions to dismiss and for a receiver were denied.
• A Derivative Complaint on behalf of Machine Learning Integration, LLC (MLI) was filed on January 12, 2022, in the U.S. District Court for the District of Puerto Rico, alleging similar facts to Foreman's action and asserting violations of federal RICO statutes and non-federal claims for unspecified damages.
• Cobra has been served with 14 lawsuits from Puerto Rico municipalities alleging failure to pay construction excise and volume of business taxes. Judgments totaling $10.1 million plus interest, penalties, and attorneys' fees were entered against Cobra in May and July 2025. Appeals to the Court of Appeals were denied, and appeals to the Supreme Court of Puerto Rico were accepted as certiorari but denied a hearing. A second motion for reconsideration was filed December 19, 2025.
• A putative class and collective action complaint, Christopher Williams (later Matthew Zeisset) v. Higher Power Electrical, LLC, Cobra Acquisitions LLC, and Cobra Energy LLC, was filed alleging failure to pay overtime wages. Arbitration proceedings remain pending for some claimants.
• The company received a final assessment in April 2025 related to a 2015 Ohio state tax audit, which did not have a material adverse effect.

Related Party Transactions

• Wexford Capital LP (Wexford), the company's largest stockholder, beneficially owns approximately 45.6% of outstanding common stock.
• The company entered into a $45 million term credit facility with Wexford Capital LP on October 16, 2023, which was paid in full for $50.9 million (including accrued interest) and terminated on October 2, 2024. Wexford waived a 1% early termination penalty.
• Cobra Aviation and Leopard Aviation LLC each lease one helicopter to Brim Equipment Leasing LLC, a subsidiary of Brim Acquisitions LLC, a joint venture formed by Cobra Aviation (49% economic interest) and Wexford Partners Investment Co. LLC (51% economic interest, controlled by Wexford). Lease extension agreements were entered into on January 1, 2026.
• Revenue from related party transactions was $1.6 million in 2025 and $1.5 million in 2024.
• Costs of service revenue incurred from related party transactions were $0.3 million in 2025 and $0.4 million in 2024.
• Accounts receivable from related party transactions totaled $0.4 million at December 31, 2025 and 2024.
• The company's certificate of incorporation contains corporate opportunity provisions that permit transactions with entities in which officers or directors are interested and allow affiliates, such as Wexford, to pursue business opportunities that might otherwise be available to the company.

Stakeholder Impact

• Shareholders: The significant reduction in net loss, improved liquidity, and debt-free status are positive for shareholders. However, the concentration of ownership by Wexford Capital LP (45.6%) and anti-takeover provisions may limit the influence of other stockholders and potential takeover premiums. Stock price volatility remains a risk.
• Employees: The company has reduced its workforce in idled service lines. It emphasizes employee safety through training programs and a stop-work authority (SWA) policy. Intense competition for skilled workers and potential unionization efforts could impact employment costs and flexibility.
• Customers: The company's diversified service offerings and strategic geographic positioning aim to meet customer needs. However, a concentrated customer base (top five customers accounted for 55% of 2025 revenue) poses a risk if major customers are lost. Demand for services is influenced by volatile commodity prices and infrastructure spending.
• Creditors: The company's debt-free status as of December 31, 2025, and available borrowing capacity under its revolving credit facility indicate a strong financial position, reducing risk for potential creditors.
• Suppliers: The company relies on third-party suppliers for specialized equipment, parts, raw materials (sand), and transportation. Shortages, delays, or interruptions in supply could impact operations and increase costs, affecting supplier relationships and the company's ability to deliver services.

Next Steps

• Receive the remaining $20.0 million payment from PREPA following the effective date of PREPA's plan of adjustment.
• Monitor and defend against ongoing appeals of the PREPA settlement order by Puerto Rico municipalities and Foreman Electric Services Inc.
• Continue to grow the rental business, leveraging aviation assets and equipment rentals.
• Expand the capacity and scope of infrastructure services as demand warrants, in existing and new geographic areas, driven by AI and data center projects and IIJA funding.
• Pursue selected, accretive acquisitions, primarily related to infrastructure services and industrial-based companies, including those in the renewable energy sector.
• Monitor market conditions to determine if and when to recommence idled oilfield service offerings (crude oil hauling, cementing, acidizing, land drilling) and increase the workforce.
• Execute on estimated 2026 capital expenditures of approximately $11 million (excluding aviation equipment).
• Continue to evaluate any remaining amounts for which related tax effects cannot be reasonably estimated, particularly regarding foreign tax credit carryforwards and Puerto Rico net operating loss carryforwards.
• Continue to vigorously defend against various legal proceedings and arbitrations, including the Foreman Electric Services Inc. lawsuits and Puerto Rico municipal tax claims.

Key Dates

Recommendation

The company has made significant strides in improving its financial health by resolving the major PREPA receivable, eliminating debt, and strategically divesting non-core assets. This has led to a substantial reduction in net loss and improved liquidity. However, the overall revenue decline, ongoing litigation, and continued volatility in key operating segments (oil & gas, natural sand proppant) present headwinds. While the balance sheet is stronger, the path to sustained profitability and significant growth remains uncertain, warranting a cautious "hold" position for investors awaiting clearer signs of consistent operational improvement and revenue expansion in its focused segments.

Keywords

Oilfield services, Infrastructure services, Natural sand proppant, Aviation leasing, Directional drilling, Energy services, Frac sand, Fiber networks, PREPA settlement, Capital expenditures, Corporate governance, Cybersecurity, 10-K, TUSK