Mammoth Energy suffered in slumping natural gas market

Mammoth Energy Services leadership admits its first quarter 2024 fiscal year results are likely to be the “low water mark” for the year. Again, the sinking natural gas market gets much of the blame.

Dismal results were reported including total revenue of $43.2 million compared to $116.3 million for the same quarter of 2023 and $52.8 million in the fourth quarter of 2023. The Oklahoma City company’s net loss for the first quarter came to $11.8 million or 25 cents per dilluted share. The loss compared to net income of $8.4 million and 17 cents a share in the first quarter of 2023 and a net loss of $6 millon and 12 cents a share in the fourth quarter of 2023.

Adjusted EBITDA was $4.5 million for the first quarter of 2024, compared to $30.7 million for the same quarter of 2023 and $10.5 million for the fourth quarter of 2023.

“As we look ahead to the remainder of 2024, we believe that our first quarter results will serve as the low-water mark for the year,” said Arty Straehla, Chief Executive Officer at Mammoth. He explained activity softness persisted in the first few months of 2024 and especially in the natural gas basins where Mammoth operates. As a result, it negatively affected the company’s Well Completion Services Division.

“This softness resulted primarily from lower energy prices, particularly natural gas, that have caused operators to delay completions activity until later in the year, reducing demand for our services,” added Straehla. He went on to say the company has decided to lower its 2024 capex guidanceby $6 million to $9 million.

Here’s how bad it was for the company’s Well Completion Services Division. Its contributed revenue was $8.3 million on 380 stages in the quarter compared to $67.3 million on 2,018 stages a year earlier. It was also lower than the $16.1 million on 669 stages in the fourth quarter of 2023.

But Straehla remains hopeful for the rest of the year.

“We have improved visibility and expect that we will benefit from increased activity levels later this year. We enter the second quarter with an undrawn revolver and cash on the balance sheet, and we believe Mammoth is well positioned to capitalize on near-term opportunities in the market as well as the increased demand that we anticipate in the second half of the year.”

At the same time, Mammoth is expecting to receive more unpaid amounts of money from the Puerto Rico Electric Power Authority from work its power restoration crews did following the 2017 Hurricane Maria. PREPA had paid $64 million to the company and its subsidiaries so far this year. But Mammoth is still owend nearly $349 million and work that was completed five years ago.

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