Greetings, and welcome to the Mammoth Energy Services Fourth Quarter and Full Year 2023 Earnings Conference Call. At this time, all participants are in a listen-only mode. A brief question-and-answer session will follow the formal presentation. As a reminder, this conference is being recorded. It is now my pleasure to introduce your host, Ken Dennard. Thank you, sir. You may begin.

Thank you, operator. Good morning, everyone. We appreciate you joining us for the Mammoth Energy conference call to review fourth quarter and full year results. This call is also being webcast and can be accessed through the audio link on the Events page www.mammothenergy.com in the Investor Relations section. Information reported on this call speaks only as of today, March 1. Please be advised that any time-sensitive information may no longer be accurate as of any subsequent date. I would also like to remind you that statements made in today's discussion that are not historical facts, including statements of expectations or future events or future financial performance, are forward-looking statements made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. Management will be making forward-looking statements as part of today's call that are, by nature, 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 EBITDA. The definition of this non-GAAP measure and its reconciliations to the most comparable GAAP measures can be found at the end of the earnings press release and in our investor presentation, which can be found on the company's website. Mammoth Energy assumes no obligation to publicly update or revise any forward-looking statements. And with that now, I would like to turn the call over to Mammoth Energy's CEO, Arty Straehla. Arty?

Thank you, Ken, and good morning, everyone. I'll start with some overview comments about our business in the quarter, as well as a recap of 2023 before discussing recent developments and expectations for 2024, then I will turn the call over to Mark to cover the financials in more detail. As noted in our press release this morning, PREPA made a payment of $50.6 million earlier this week and in combination with $13.4 million that was paid by PREPA in January, fully satisfied the obligations to SPCP Group and resulted in Cobra receiving approximately $9.6 million in cash. I will have some additional updates relative to PREPA later in our prepared remarks. The fourth quarter proved to be even more challenging than we had originally anticipated, largely due to additional deferred activity by E&P companies, commodity price fluctuations, and customer budget exhaustion. As we had expected, the impact of these headwinds most directly affected our well completion and sand divisions in the quarter. During the fourth quarter, we experienced a slight increase in both revenue and adjusted EBITDA in our infrastructure division, and we are encouraged by the recent bidding activity in this segment. The infrastructure investment and JOBS Act are being released for infrastructure projects such as fiber engineering, as well as transmission and distribution, and areas where we are excited participants, which gives us optimism for improvements in 2024. We remain very encouraged about the potential for continued growth in this sector, and we feel strongly that Mammoth's infrastructure business is well-positioned for long-term growth in 2024 and beyond. The persistent challenges associated with lower U.S. onshore activity and the sustained weakness in natural gas basins during 2023, particularly in the second half of the year, resulted in continued utilization decline in our well completion services division. We remain extremely focused on our cost structure and managing capital expenditures. In our sand division, we experienced reduced demand due to softening macro conditions. We anticipate higher demand in 2024, partially driven by Western Canada, which we expect to be accretive to current pricing. We are also encouraged by industry expectations of a 10% increase in well completions and pressure pumping year-over-year, which will be the largest catalyst for our pumping fleets and sand business in 2024. Our team is managing this business efficiently, and we are building momentum that we believe will result in performance improvements in 2024. During the operational softness we've experienced over this year, 2023 marked several accomplishments for Mammoth as we continued a significant debt refinancing transaction, began receiving payments from PREPA on our outstanding receivable, and entered into an agreement to monetize a portion of our outstanding PREPA receivable. This agreement allowed us to pull forward some of our capital expenditures, which we believe will benefit utilization in our well completion services division in the back half of 2024. In 2023, we entered into a new revolving credit facility agreement and a new term loan agreement, which refinanced in full Mammoth's indebtedness outstanding under our previous revolving credit facility. We believe these new agreements provide Mammoth with a solid liquidity base for years to come. In addition, our Board of Directors approved a stock repurchase program pursuant to which Mammoth is authorized to repurchase up to the lesser of $55 million or 10 million shares of our common stock, subject to certain factors. Turning now to PREPA. As we mentioned in our press release, PREPA has paid $64 million so far in 2024 and has approximately $19 million in FEMA funding for Cobra's work, which they received in December. Additionally, Cobra received $22.2 million in payments from PREPA throughout 2023. While we are pleased to receive these funds, this represents only a portion of what is still owed to us. We continue to pursue payment of the outstanding amounts, including the associated interest. In terms of future milestones, PREPA's confirmation trial for its plan of adjustment is currently set to start on March 4th. Our next status report is due to the court on March 27th, and the litigation stay has been continued through April 5th. We are currently engaged in mediation with PREPA regarding our claims. If mediation is unsuccessful, we intend to litigate the disputed issues. As we have demonstrated throughout our history, we have a resilient and diversified business comprised of talented and hardworking teams that will continue to find solutions that optimize our operational efficiencies with a customer and safety-first focus. We believe our diverse portfolio and ability to adapt quickly to changing environments positions us well in these segments. Despite a challenging year, we see many bright spots ahead across all of our business segments, and with a strong balance sheet, a new revolving credit facility agreement, and a new term loan agreement, we are poised for growth in 2024. We enter 2024 with an improving line of sight, particularly in our infrastructure and sand divisions, and we will be opportunistic in our well completions business as commodity prices improve and activity increases. I am proud of the hard work and perseverance that our teams have demonstrated across our organization. Our continued commitment to safety and high-quality standards propel our organization. Now let me turn the call over to Mark to take you through our financial performance in greater detail.

Thank you, Arty. I hope everyone is doing well and we appreciate you joining us today. As I usually do, I'm going to take this time to provide additional details on some meaningful metrics and several key highlights. A detailed breakdown of our results can be found in our earnings release and in our 2023 10-K once it is on file with the SEC. Mammoth's total revenue during the fourth quarter of 2023 came in at $52.8 million compared to $65 million in the third quarter of 2023. Total revenue for the full year into December 31, 2023 was $309.5 million compared to $362.1 million in 2022. The 15% decline in total revenues largely stemmed from the roughly 20% decline in the U.S. land rig count and associated utilization headwinds, which negatively impacted our well completion services division. In Q4 of 2023, we pumped 669 stages with approximately 0.9 fleets utilized on average compared to 577 stages and an average utilization of 1.2 fleets during the third quarter of 2023. For the full year of 2023, we pumped 4,220 stages with approximately 1.8 fleets utilized on average compared to 6,149 stages completed and three fleets utilized on average in 2022. This decrease when compared to 2022 is primarily attributable to the softness in utilization that we experienced in the well completion services division in the back half of the year. Sustained lower natural gas prices and commodity price uncertainty have led to utilization headwinds in the basins that we operate in and have caused operators to delay and push activity to the right. As many of our peers have noted on their calls, it will now likely be the second half of 2024 before we see any meaningful activity improvements. We will remain disciplined stewards of capital and continue to align our spending appropriately with the demand that we are seeing from our customers. Our sand division sold approximately 104,000 tons of sand in the fourth quarter of 2023 at an average sales price of $23.62 per ton compared to 352,000 tons of sand at an average sales price of $30.18 during the third quarter of 2023. On a full year basis, we sold 1.2 million tons of sand during 2023 at an average sales price of $29.86 compared to 1.4 million tons at an average sales price of $27.11 per ton in 2022. Our infrastructure services division contributed revenue of $27.2 million for the fourth quarter of 2023, which represents an increase when compared to $26.7 million for the third quarter despite a sequentially lower average crew count. For the full year 2023, infrastructure services revenues were $110.5 million, which was roughly flat when compared to the $111.5 million in 2022. We continue to focus on operational execution and pursue opportunities within this sector as we strategically structure our service offerings for growth, especially in fiber projects. Our net loss for the fourth quarter of 2023 was $6 million compared to a net loss of $1.1 million for the third quarter of 2023. Net loss for the full year of 2023 was $3.2 million compared to a net loss of $0.6 million in 2022. Adjusted EBITDA, as defined and reconciled in our earnings release, was $10.5 million for the fourth quarter of 2023, a decrease sequentially compared to $13.4 million in the third quarter. Adjusted EBITDA was $71 million for the full year of 2023 compared to $86.1 million for 2022. CapEx for the fourth quarter and full year 2023 were $4.1 million and $19.4 million, respectively. We have continued to prudently manage our costs to more accurately reflect the activity levels of our customers, as evidenced by another sequential reduction in well completion services spending to align with lower utilization levels. However, we did have slightly higher expectations relative to infrastructure, sand, and other services. Our CapEx budget for 2024 is currently set at $15 million and is heavily weighted towards pressure pumping, but as always, we will continue to monitor customer spending and activity trends in order to most effectively manage our capital to align with demand we see in the market. Selling, general and administrative expenses totaled $8.3 million during the fourth quarter of 2023, down 20% compared to $10.4 million for the third quarter. Compared to the fourth quarter of 2022, SG&A was down 36%. As we guided to on our last call, we benefited from reduced legal fees related to Puerto Rico in the fourth quarter, which contributed to our lower SG&A expenses. As of December 31, 2023, we had cash on hand of $16.6 million. Our revolving credit facility was undrawn, and we had approximately $20.7 million of available borrowing capacity. Our total liquidity was approximately $37.3 million. The fourth quarter was productive as we successfully completed the refinancing of our credit facility and monetized a portion of the PREPA receivable. These actions both meaningfully increased our liquidity and supplied us with additional capital to invest in our business. We used $26.9 million of these proceeds to repay all outstanding borrowings under our credit facility, which currently remains undrawn, and we plan to use the remainder to invest in our business, which may include upgrading an additional hydraulic fracturing fleet with dual fuel capabilities. This incremental dual fuel fleet would result in three of our six fleets having dual fuel capabilities. To conclude our call, we would like to thank our 738 employees throughout the company for their hard work, dedication, and commitment to maintaining safe and sustainable work sites for themselves and their teammates. 2023 was a challenging year for a number of reasons, most notably various macroeconomic factors, but we maintain our belief in our teams and the direction that we are headed. We will continue to operate efficiently, safely, and in a disciplined manner with enhanced results and our shareholders in mind as we work towards an approved 2024 and beyond.

Thank you. We will now be conducting a question-and-answer session. Thank you. Our first question comes from the line of John Daniel with Daniel Energy Partners. Please proceed with your question.

Hey, good morning. Thank you for including me.

Good morning, John.

How are you? I've got sort of a strategy question, really. A lot of the big frac companies are pushing hard into electric, as we all know, but it still seems to me like there's going to be a Tier 2 market for some time. Not every operator has the scale to pursue big development plans. I wonder if there's any merit in your eyes to sort of a roll up, if you will, of the small one to two fleet Tier 2 companies, some of whom are fairly distressed right now. Just your thoughts.

No, I think John, you're exactly right. Congratulations on the Thrive conference. The feedback was extremely positive, and you did a great job there. We continue to invest in modernizing our fleets. We now have 34 dual fuel units and are advancing with Tier 4. I believe you're right about strategic roll ups. That's how we started as an organization, with several strategic combinations, and we've kept our focus on the pressure pumping, sand, and infrastructure areas. As we move forward with the PREPA payments we're receiving, we are starting to consider this approach. Roll ups could be an interesting option, but we are not committing to that yet.

No, fair enough. I'm considering the broader perspective, specifically the merits of the strategy rather than who specifically executed it. And the last point I have is regarding the natural gas markets. We all recognize they're a bit uncertain at the moment. As you engage with customers in the Marcellus over the next two to four quarters, are they expressing anything different from their plans presented during Q4 earnings? Are there any signs of hope for the second half, or is it still too early to tell?

No, I think it's still a price-driven commodity. We are seeing a slight increase in activity in the second half compared to the first half. We're also beginning to notice some leading indicators, like sand, showing improvement in March compared to January and February. There is some activity picking up, and customers are engaging in that. However, there still needs to be some improvement in the commodity.

Okay. And then a quick final one for me. I hate to look at the tragedy of the sort of panhandle buyers up there. But is that an opportunity for the infrastructure business?

We haven't seen it as of yet.

Okay.

We believe it's something we will definitely consider. However, at this moment, we have not been called upon to assist. The Canadian market is a bit further removed from where we operate, which is primarily in West Texas and the mid-Dallas area. So far, our customers have not reached out to us.

Fair enough. Thank you for including me.

Thanks, John.

Our next question comes from the line of Michael Mathison with Singular Research. Please proceed with your question.

Good morning, gentlemen, and thank you for including me.

Good morning.

I'd like to turn to the Infrastructure segment. Just it looks like there's a little bit more positive demand news there. You've talked a lot about bidding activity. You've got your crews and everything. Do you have any kind of a forecast for growth in 2024 that you're looking at?

Yes, I think as we look at 2024, based on the bidding activity and the demand of our customers, we expect the crew count that we currently have to increase in 2024. So we're encouraged about both the feedback from our customers as well as the macro impacts on the infrastructure business.

Yeah. I'd add to that a little bit and talk. We're seeing additional growth in the transmission aspect of our business, which is been a push that we've tried to put together and tried to grow that aspect of the business. And then as well, our engineering group continues to add engineers. Currently, we have about 56 engineers onboard, and we continue to hire into that group because of the demand that we see. So we see very strong demand in the engineering sector that we're providing, and we think that will cross over and bring in some of our operational aspects as well. So we're pretty bullish on our infrastructure group.

Great. And if I could ask you just one more question back to PREPA, obviously, it's good news that they're finally paying you. Net of the recent payments, what's the outstanding balance? And can you just break that down of principal versus interest?

Absolutely. So following the $50 million that we received earlier this week, the current balance owed is approximately $345 million, which is comprised of about $140 million for services and about $205 million for interest.

Very good.

Let me add to that regarding what we're observing with PREPA, which is quite encouraging. The pace is improving, and we discussed the payments received, including the $50.6 million we got this past week. PREPA still owes us another $20 million in FEMA-funded money that they've been holding since December, and we are actively working to obtain that. Next Monday, the PREPA confirmation hearing for their plan of adjustment will start with a two-week trial. We've always mentioned that the bondholders need to be addressed first, which is part of the confirmation plan. Once the plan of confirmation and the plan of adjustment are confirmed, PREPA will need to engage with us regarding the remaining amount. We are aggressively pursuing the FEMA-approved funds. Additionally, there is a status report due to the judge on March 27th, and litigation has been paused until April 5th. Overall, we are optimistic about the pace and anticipate more capital coming in while we continue to pursue the money they owe us.

Just comparing those figures to where you stood previously, it looks like as money's coming in, it's being applied to the services, and interest is just continuing to grow. Is that fair?

Yeah. That's correct. The payments we've received in both 2023 as well as 2024 have been relative to services performed under the second contract with PREPA, which leads us to about $140 million for services due today, largely comprised of just over $60 million related to the tax gross-up provision under the first contract that we understand that PREPA has not yet submitted to FEMA for review, as well as approximately $74 million that, as you probably recall, is going through an appeal process at FEMA. That appeal was filed about a year ago, so based on feedback we've received from other parties, we would expect to hear in the near-term the resolution of that appeal.

Great. Well, thank you for all the detail, and good luck with being paid there. Thanks again.

Thank you.

Thank you. This concludes our question-and-answer session. I would now like to turn the floor back over to management for closing comments.

Thank you again for joining us on the call today. We continue to position Mammoth for improved growth and success, and it is all made possible by our talented and skilled team members. This concludes our conference call, and we look forward to speaking to you again after the next quarter. Thank you.

Ladies and gentlemen, thank you for your participation. This does conclude today's teleconference. You may disconnect your lines, and have a wonderful day.