Mammoth Energy Services, Inc.

An answer session will follow the formal presentation. If anyone should require operator assistance during the conference, please press star zero on your telephone keypad. As a reminder, this conference is being recorded. It's now my pleasure to introduce your host, Rick Black, Investor Relations for Mammoth Energy Services. Thank you. You may begin.

Thank you, operator, and good morning, everyone. We appreciate you joining us for the Mammoth Energy Conference call to review fourth quarter and year-end 2021 results. This call is also being webcast and can be accessed through the audio link on the events and presentations page of the investor relations section of mammothenergy.com. Information recorded on this call speaks only as of today, March 4, 2022, so please be advised that any time-sensitive information may no longer be accurate as of the date of any replay listening or transcript reading. I would also like to remind you that the statements made in today's discussion that are not historical facts including statements of expectations for future events or future financial performance or forward-looking statements made pursuant to the Safe Harbor's provision of the Private Securities Litigation Reform Act of 1995. We will be making forward-looking statements as part of today's call that by their nature are uncertain and outside of the company's control. Actual results may differ materially. Please refer to the earnings press release that was issued this morning for our disclosure on forward-looking statements. These factors and other risks and uncertainties are described in detail in the company's filings with the Securities and Exchange Commission. Management may also refer to non-GAAP measures, including adjusted income loss and adjusted EBITDA. Reconciliations to the nearest GAAP measures can be found at the end of the earnings press release. Mammoth Energy assumes no obligation to publicly update or revise any forward-looking statements. And now I would like to turn the call over to Man With Energy CEO, Arti Shrela.

Arti? Thank you, Rick, and good morning, everyone. I'll begin with a review of the fourth quarter of 2021 and an overview of each of our businesses. Following that, I'll touch on the macro trends that continue to emerge. We believe the trend lines look positive for our business across the board as we head into 2022. I'll then turn the call over to Mark to review our financials in more detail. We ended the year sustaining sequential quarterly momentum on top line revenues and reducing our net loss. We are experiencing ongoing improvement in our infrastructure business, which became cash flow positive exiting 2021 and has continued that trend in the first two months of 2022. Clearly the macroeconomic infrastructure backdrop is strong, especially with the recent passage of the federal infrastructure bill. We're focused on operational execution in this business segment and believe we now have the right people and processes in place to gain stronger momentum in this large and growing market. The opportunities we see in this area, especially around fiber maintenance and installation contracts and MSAs are encouraging heading into the next year. Funding for projects in the infrastructure space remains strong. Mammoth will continue to pursue opportunities within infrastructure services as we strategically structure our service offerings for growth in both the geographic footprint and the depth of projects. This type of work is very much needed in our country to improve infrastructure, repairs, hardening, and modernization of the electric grid, along with the shift towards renewables continues nationwide. As a result, bidding levels continue to be robust. Man this vertical integration of service offerings through engineering procurement and construction capabilities, as well as our manufacturing equipment refurbishment facility continue to differentiate our offerings. In the infrastructure project area, we believe these capabilities, along with our ability to add additional infrastructure crews with nominal capex requirements will provide a competitive advantage going forward, in addition. Having vertically integrated services and equipment manufacturing capabilities will be a key component to scaling operations and controlling costs. We continue to believe that our vertically integrated infrastructure offerings have tremendous growth potential as we go forward. In our oil field service business, improved oil and natural gas commodity pricing continues to drive positive industry movement and increased equipment utilization. albeit at a more measured pace than we've seen in past up cycles. We operated two hydraulic fracturing fleets in the fourth quarter of 2021 and are currently staffing up a third fleet. The line of sight on our frac calendar is also improving, as is the pricing, and we have better visibility through the end of 2022. Additionally, in our sand business, pricing remains good and looks to stay that way. As these sectors continue to rebound from the significant economic impacts over the past year, we are beginning to see more positives in terms of activity, pricing, scheduling, and new inquiries, particularly focused in the back half of 2022. We believe our diverse portfolio and ability to adapt quickly to changing environments positions us well in these segments. Turning to the cost side of the business, we managed fixed costs well in the fourth quarter of 2021. I'm proud of the progress our team is making to further enhance our efficient fixed cost model. We have implemented a cost management structure and methodical operating procedures that we believe will enable future top line growth without meaningfully changing our SG&A structure. As we enter 2022, we see improved macroeconomic trends that we believe will drive increased demand for our two largest business segments, infrastructure services and well completion services. Let me provide the most recent information in regards to our contracts with PREPA. As you recall, FEMA issued a determination memorandum on May 25, 2021, in respect to the first contract. In this determination memorandum, FEMA found that $46.7 million was not payable under that contract. On July 23, 2021, with aid from COBRA, PREPA filed an administrative appeal of the entire $46.7 million disallowance. On January 5, 2022, PREPA received a request for information from FEMA in connection with this appeal. PREPA's response was filed on February 4, 2022. Upon PREPA's submission of its response, FEMA's 90-day period for determination of the appeal renews. If PREPA does not receive a decision from FEMA within 180 days after the appeal was received by FEMA, PREPA can file a demand for arbitration. The first opportunity to file for arbitration is on March 21, 2022. On July 15, 2021, FEMA advised PREPA that it had commenced review of the second contract and that FEMA's intent was to complete work on this project and issue a determination Memorandum before December 31, 2021. As of January 19, 2022, PREPA has not received any update from FEMA as to when it anticipates completion on this project to occur. Since August of 2021, PREPA and COBRA have worked to reconcile approximately $159.5 million in invoices under the second contract that PREPA had not submitted to FEMA. Since that time, PREPA has submitted approximately $90 million in invoices to FEMA. This approximate $90 million in invoices had not been submitted to FEMA by PREPA due to purported discrepancies in personnel head counts on the invoices as compared to reports prepared by PREPA's inspection contractor. Although COBRA personnel had pointed out the errors in the reports prepared by PREPA's inspection contractor for more than two years, we are thankful that PREPA finally submitted our invoices to FEMA. On this past Monday, PROPA filed a motion for an order approving a settlement agreement with Whitefish Energy Holdings. We believe this is a positive development since it will result in approximately $90 million for services to be paid to Whitefish in two installments, an approximate $6 million administrative claim relative to mobilization and demobilization invoices, and an administrative claim of approximately $34 million for interest on past due invoices. While this is an encouraging development, we still have work to do for us to get paid, and it continues to be apparent to us that the only way to change PREP's behavior is to hold them accountable. We urge our stakeholders to continue to push the control board, commonly known as the FOMB, to hold PREP accountable to meet its contractual obligations and to pay its debt, which continues to accrue interest at the rate of about $3.1 million per month. Let me turn the call over to Mark to take you through the financial performance during the fourth quarter of 2021 before we open the call to questions.