DEF 14A: Mammoth Energy Services Sets Date for 2024 Annual Stockholders Meeting, Outlines Key Proposals

Mammoth Energy Services announces its 2024 Annual Meeting of Stockholders to be held on June 12, 2024, outlining proposals for director elections, executive compensation, equity incentive plan approval, and auditor ratification.

Summary

• Mammoth Energy Services, Inc. will hold its Annual Meeting of Stockholders on June 12, 2024, in Oklahoma City.
• Stockholders will vote on electing six directors, providing an advisory vote on executive compensation, approving the 2024 Equity Incentive Plan, and ratifying Grant Thornton LLP as the company's independent auditors.
• The board recommends voting FOR all director nominees, the advisory vote on executive compensation, the approval of the 2024 Equity Incentive Plan, and the ratification of Grant Thornton LLP.
• Stockholders of record as of April 18, 2024, are eligible to vote.
• The company had 48,008,319 shares of common stock outstanding as of April 18, 2024.
• The Board held one in-person meeting and four virtual meetings during the year ended December 31, 2023.
• Non-employee directors receive an annual retainer of $60,000, with additional payments for committee chairs and members.
• Each non-employee director receives an annual equity award with a value of $100,000 that vests on the earlier of the first anniversary of the grant date or the next annual meeting of stockholders.

Sentiment

Score: 5

Explanation: The document presents a mixed sentiment. While it highlights positive aspects like improved operating cash flows and debt reduction, it also acknowledges challenges, revenue declines, and ongoing issues with PREPA receivables. The overall outlook is cautiously optimistic.

Positives

• The company is providing stockholders with multiple avenues to vote, including online, telephone, and mail.
• The board is actively engaged in risk oversight and corporate governance.
• The company has a Code of Business Conduct and Ethics and a Vendor Code of Conduct.
• The company is committed to health, safety, and environmental protection.
• The company has a comprehensive executive incentive compensation clawback policy.

Negatives

• The company faces challenges in its oilfield services, natural sand proppant, and infrastructure services businesses.
• The company is owed approximately $204.8 million by the Puerto Rico Electric Power Authority (PREPA) as of December 31, 2023, excluding $197.5 million of interest charged on these delinquent balances.
• The company temporarily shut down several operations in response to market conditions.

Risks

• The company faces risks associated with the supply and demand for oil and natural gas, volatility of oil and natural gas prices, environmental regulations, and overall economic conditions.
• The ongoing war in Ukraine and other tensions in the Middle East could adversely impact global energy markets and commodity prices.
• The company's infrastructure services business is adversely impacted by outstanding amounts owed by PREPA.
• PREPA's ability to pay the amounts owed to Cobra is uncertain and could materially and adversely affect the company's financial condition.

Future Outlook

The company intends to increase its infrastructure services activity and expand its geographic footprint and depth of projects, especially in fiber maintenance and installation projects.

Management Comments

• Management is focused on continuing to improve operational efficiencies and cost structure and on enhancing value for stockholders.

Industry Context

The company operates in the energy services, energy infrastructure, and natural sand proppant industries, which are influenced by numerous factors including supply and demand for oil and natural gas, energy infrastructure services, and natural sand proppant; demand for repair and construction of transmission lines, substations and distribution networks in the energy infrastructure industry and the level of expenditures of utility companies; the level of prices of, and expectations about future prices for, oil and natural gas and natural sand proppant, as well as energy infrastructure services; the cost of exploring for, developing, producing and delivering oil and natural gas; the expected rates of declining current production; the discovery rates of new oil and natural gas reserves and frac sand reserves meeting industry specifications and consisting of the mesh size in demand; access to pipeline, transloading and other transportation facilities and their capacity; weather conditions; domestic and worldwide economic conditions; political instability in oil-producing countries; environmental regulations; technical advances affecting energy consumption; the price and availability of alternative fuels; the ability of oil and natural gas producers and other users of our services to raise equity capital and debt financing; and merger and divestiture activity in industries in which we operate.

Comparison to Industry Standards

• The peer group utilized by the compensation committee for 2023 compensation and performance decisions made at the beginning of 2023 includes Argan, Inc., NexTier Oilfield Solutions Inc., Smart Sand, Inc., Cactus, Inc., Nine Energy Services, Inc., Solaris Oilfield Infrastructure, Inc., Dril-Quip, Inc., Northwest Pipe Company, Sterling Infrastructure, Inc., Great Lakes Dredge & Dock Corp., Primoris Services Corp., Team, Inc., Gulf Island Fabrication, Inc., ProPetro Holding Corp., U.S. Silica Holdings, Inc., IES Holdings, Inc., RPC, Inc., VSE Corporation, MYR Group Inc., and Select Energy Services, Inc.
• These companies are in the oilfield services industry and the industrial/infrastructure industry, reflecting Mammoth Energy Services' unique composition.

Related Party Transactions

• Cobra Aviation Services, LLC, formed a joint venture with Wexford Partners Investment Co. LLC, named Brim Acquisitions to acquire all outstanding equity interests in Brim Equipment.
• The company entered into a new term loan facility with Wexford, as agent for the lenders, for $45 million.
• Panther Drilling Systems LLC provides directional drilling services for El Toro Resources LLC, an affiliate of Wexford.
• The company rents office and equipment yard space from Caliber Investment Group LLC, an affiliate of Wexford.

Stakeholder Impact

• The outcome of the vote on the 2024 Equity Incentive Plan will impact the incentives and compensation of employees, directors, and consultants.
• The company's ability to collect its receivable from PREPA will impact its financial condition and ability to invest in future growth.
• The company's commitment to health, safety, and environmental protection impacts its employees, vendors, contractors, customers, and the general public.

Next Steps

• Stockholders are encouraged to vote on the proposals outlined in the proxy statement.
• The company will continue to pursue avenues to collect its receivable from PREPA.
• The company plans to upgrade one additional fleet in 2024, subject to market conditions and liquidity requirements.

Key Dates

Keywords

proxy statement, annual meeting, executive compensation, directors, equity incentive plan, independent auditors, corporate governance, risk oversight, related party transactions, mammoth energy services