Nearly two years after Oklahoma City’s Mammoth Energy responded to the tragedy caused when Hurricane Maria hit Puerto Rico, the company is still there. And its efforts to restore electrical power to the nation have been rewarded in part by lawsuits against the company, even as Puerto Rico still owes hundreds of millions of dollars to the company.
In a form 10-Q filing with the Securities Exchange Commission, Mammoth Energy reported it had been sued in 2018 and accused of an electrical failure that resulted in damages of at least $300 million.
Mammoth stated it believes the lawsuit is without merit.
“However, the Company continues to evaluate the background facts and at this time is not able to predict the outcome of this lawsuit or whether it will have a material impact on the Company’s financial position, results of operations or cash flows,” stated the company in the SEC filing.
Mammoth was hit with more lawsuits in 2019 and accused by municipalities in Puerto Rico of failing to pay municipal license and construction excise taxes. But the Government of Puerto Rico’s Central Recovery and Reconstruction Office noted the unique nature of work executed by entities such as Cobra, a subsidiary of Mammoth might actually make it eligible for reimbursement by the government.
Hurricane Maria hit September 20 of 2017, pounding the island nation with 155 mph winds, the worst storm to hit Puerto Rico in 85 years. It left the entire country without power. Mammoth’s Cobra subsidiary signed an emergency master services agreement for repairs in October, 2017.
The one-year contract provides for payments of up to $945 million. By May of 2018, Puerto Rico’s Power Authority reached a $900 million agreement with Cobra.
By the end of 2018, Cobra had nearly 550 employees still in Puerto Rico working to restore electrical power. By March of this year, the work under each of the contracts had ended and only a small contingent of personnel remained on the island.
However, as the company indicated in the SEC filing, as of late April of this year, the Puerto Rico Power Authority still owed Cobra $258 million and $247 million on the two separate work agreements.