MAMMOTH ENERGY SERVICES INC
For the period ended Sep 30, 2024. Filed Nov 1, 2024.
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A company's report for each of its first three quarters. The financial statements are not audited. It shows how the business has moved since the last annual report, and what management says changed.
Sep 30, 2024 · Filed Nov 1, 2024
TUSK$3.11+4.4%Stored close · as of Nov 6, 2026
What changed in Management’s Discussion and Analysis?
Read the current filingPrevious report: 10-Q
Period ended 2024-06-30; filed 2024-08-09.
0001679268-24-000066
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsCurrent report: 10-Q
Period ended 2024-09-30; filed 2024-11-01.
0001679268-24-000077
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsThe baseline is this issuer’s latest earlier reporting period of the same form that was filed before the current report. A previous 10-Q is a different quarter, not a year-over-year comparison. Amendments are excluded.
Compared 143 previous paragraphs and 147 current paragraphs.
57 unchanged; 72 reworded; 16 added; 12 removed; 2 previous and 2 current paragraphs rearranged.
Tables are not compared: 13 previous and 13 current tables excluded. Dates, whitespace, punctuation and numbering changes are ignored; changes to financial figures remain significant.
A changed paragraph is not evidence that risk increased or decreased. An unchanged paragraph does not establish that risk stayed the same.
Added paragraphs (16)
Current report
U.S. onshore activity and sustained weakness in the natural gas basins in which we operate. However, we recently activated one pressure pumping fleet and expect to activate a second pressure pumping fleet in the coming weeks. We believe activity will remain flat throughout the first half of 2025 and expect to see a ramp in activity in the second half of 2025 as several macroeconomic tailwinds are expected to materialize and support incremental natural gas production. We will be strategically positioned to capitalize on this anticipated demand if and when it ramps up.
Current report
Third Quarter 2024 Financial Overview and Recent Developments
Current report
•Received the first two installment payments under the settlement agreement with PREPA, with $150 million paid to Cobra on October 1, 2024 and, subject to Cobra having provided the indemnity letter of credit to PREPA, $18.4 million paid to Cobra on October 18, 2024
Current report
•Paid, in full, all amounts owed under our term credit facility and terminated the facility on October 2, 2024
Current report
Well Completion Services. Well completion services division revenue decreased $18.1 million, or 89%, to $2.2 million for the three months ended September 30, 2024 from $20.3 million for the three months ended September 30, 2023. The decrease in our well completion services revenue was primarily driven by a decrease in pressure pumping services utilization due to the continued softness in the natural gas basins in which we operate. During the three months ended September 30, 2024, we had one pump down fleet active and no pressure pumping fleets active, as compared to an average utilization of 1.2 pressure pumping fleets during the three months ended September 30, 2023.
Current report
Infrastructure Services. Infrastructure services division cost of revenue, exclusive of depreciation and amortization expense, increased $0.4 million, or 2%, to $22.5 million for the three months ended September 30, 2024 from $22.1 million for the three months ended September 30, 2023. As a percentage of revenue, cost of revenue, exclusive of depreciation and amortization expense of $0.6 million and $1.6 million for the three months ended September 30, 2024 and 2023, respectively, was 87% and 83% for the three months ended September 30, 2024 and 2023, respectively. The increase as a percentage of revenue is primarily due to a decrease in storm restoration work.
Current report
Natural Sand Proppant Services. Natural sand proppant services division cost of revenue, exclusive of depreciation, depletion and accretion expense, decreased $3.9 million to $3.1 million for the three months ended September 30, 2024 from $7.0 million for the three months ended September 30, 2023. As a percentage of revenue, cost of revenue, exclusive of depreciation, depletion and accretion expense of $1.7 million and $2.8 million for the three months ended September 30, 2024 and 2023, respectively, was 63% and 66% for the three months ended September 30, 2024 and 2023, respectively. The decrease as a percentage of revenue is primarily due to declines in freight charges and repairs and maintenance expense.
Current report
Drilling Services. Drilling services division cost of revenue, exclusive of depreciation and amortization expense, decreased $0.7 million, or 32%, to $1.5 million for the three months ended September 30, 2024 from $2.2 million for the three months ended September 30, 2023. As a percentage of revenue, our drilling services division cost of revenue, exclusive of depreciation and amortization expense of $0.6 million and $1.1 million for the three months ended September 30, 2024 and 2023, respectively, was 94% and 96% for the three months ended September 30, 2024 and 2023, respectively. The decrease is primarily due to a decline in equipment rental expense.
Current report
Other Services. Other services division cost of revenue, exclusive of depreciation and amortization expense, increased $0.5 million, or 10%, to $5.3 million for the three months ended September 30, 2024 from $4.8 million for the three months ended September 30, 2023 primarily due to increased activity. As a percentage of revenue, cost of revenue, exclusive of depreciation and amortization expense of $0.7 million and $1.8 million for the three months ended September 30, 2024 and 2023, respectively, was 76% and 80% for the three months ended September 30, 2024 and 2023, respectively. The decrease is primarily due to an increase in utilization for our rental equipment and remote accommodations businesses resulting in a lower ratio of fixed costs to variable costs.
Current report
Impairment of Goodwill. As a result of the sale of ARS, we performed an impairment assessment of our goodwill as of September 30, 2023. We determined that the carrying value of goodwill for our Aviation reporting unit exceeded the fair value at September 30, 2023, resulting in impairment expense of $1.8 million for the three months ended September 30, 2023.
Current report
Nine Months Ended September 30, 2024 Compared to Nine Months Ended September 30, 2023
Current report
Well Completion Services. Well completion services division cost of revenue, exclusive of depreciation and amortization expense, decreased $68.0 million, or 72%, to $26.2 million for the nine months ended September 30, 2024 from $94.2 million for the nine months ended September 30, 2023. As a percentage of revenue, our well completion services division cost of revenue, exclusive of depreciation and amortization expense of $8.5 million and $13.3 million for the nine months ended September 30, 2024 and 2023, respectively, was 128% and 82% for the nine months ended September 30, 2024 and 2023, respectively. The increase as a percentage of revenue is primarily due to a decline in utilization of our pressure pumping services, resulting in a higher ratio of fixed costs to variable costs.
Current report
Impairment of Goodwill. As a result of the sale of ARS, we performed an impairment assessment of our goodwill as of September 30, 2023. We determined that the carrying value of goodwill for our Aviation reporting unit exceeded the fair value at September 30, 2023, resulting in impairment expense of $1.8 million for the nine months ended September 30, 2023.
Current report
On October 16, 2024, the Company entered into (i) an amendment to the new revolving credit agreement (the “Credit Agreement Amendment”) and (ii) a letter of credit reimbursement agreement (the “Reimbursement Agreement”), each with Fifth Third Bank. The Credit Agreement Amendment, among other things, permits the transactions contemplated by the Reimbursement Agreement, including the issuance of one or more letters of credit to satisfy Cobra’s obligations under the Settlement Agreement relating to one or more indemnity letters of credit. The aggregate amount of all such letters of credit shall not exceed $18.4 million. Under the terms of the Reimbursement Agreement, the Company agreed to hold cash funds totaling at least 105% of the stated amount of all letters of credit in an account maintained by Fifth Third Bank and to which Fifth Third Bank has a first priority security interest.
Current report
On October 18, 2024, Cobra received a payment from PREPA totaling $18.4 million under the terms of the Settlement Agreement. In connection with the receipt of the $18.4 million from PREPA, Cobra instructed Fifth Third Bank to issue a letter of credit to PREPA under the Reimbursement Agreement in the amount of $18.4 million and transferred a total of $19.3 million to a restricted cash account maintained by Fifth Third Bank as collateral for the letter of credit.
Current report
In connection with the receipt of the first installment amount under the Settlement Agreement on October 1, 2024, the Company paid, in full, all amounts owed under the term credit facility, including the accrued and unpaid interest, in the aggregate amount of $50.9 million, and terminated the facility on October 2, 2024. In connection with the payoff of the term credit facility, Wexford waived the 1% early termination penalty.
Removed paragraphs (12)
Previous report
Second Quarter 2024 Financial Overview
Previous report
Well Completion Services. Well completion services division revenue decreased $17.6 million, or 64%, to $10.0 million for the three months ended June 30, 2024 from $27.6 million for the three months ended June 30, 2023. The decrease in our well completion services revenue was primarily driven by an 69% decrease in the number of stages completed from 956 for the three months ended June 30, 2023 to 292 for the three months ended June 30, 2024. An average of 0.3 of our fleets were active for the three months ended June 30, 2024 as compared to an average of 1.6 fleets for the three months ended June 30, 2023.
Previous report
Infrastructure Services. Infrastructure services division cost of revenue, exclusive of depreciation and amortization expense, increased $1.3 million, or 6%, to $24.6 million for the three months ended June 30, 2024 from $23.3 million for the three months ended June 30, 2023, primarily due to an increase in storm restoration activity. As a percentage of revenue, cost of revenue, exclusive of depreciation and amortization expense of $0.6 million and $2.4 million for the three months ended June 30, 2024 and 2023, respectively, was 78% and 82% for the three months ended June 30, 2024 and 2023, respectively. The decline as a percentage of revenue is primarily due to the increase in storm restoration work, which historically has produced higher margins.
Previous report
Natural Sand Proppant Services. Natural sand proppant services division cost of revenue, exclusive of depreciation, depletion and accretion expense, decreased $2.5 million to $4.6 million for the three months ended June 30, 2024 from $7.1 million for the three months ended June 30, 2023. As a percentage of revenue, cost of revenue, exclusive of depreciation, depletion and accretion expense of $1.3 million and $2.4 million for the three months ended June 30, 2024 and 2023, respectively, was 98% and 61% for the three months ended June 30, 2024 and 2023, respectively. The increase as a percentage of revenue is primarily due to a decrease in tons sold and price per ton sold, resulting in a higher ratio of fixed costs to variable costs.
Previous report
Drilling Services. Drilling services division cost of revenue, exclusive of depreciation and amortization expense, decreased $1.2 million, or 50%, to $1.2 million for the three months ended June 30, 2024 from $2.4 million for the three months ended June 30, 2023. As a percentage of revenue, our drilling services division cost of revenue, exclusive of depreciation and amortization expense of $0.6 million and $1.2 million for the three months ended June 30, 2024 and 2023, respectively, was 171% and 86% for the three months ended June 30, 2024 and 2023, respectively. The increase is primarily due to a decline in utilization of our directional drilling services, resulting in a higher ratio of fixed costs to variable costs.
Previous report
Other Services. Other services division cost of revenue, exclusive of depreciation and amortization expense, increased $1.4 million, or 33%, to $5.6 million for the three months ended June 30, 2024 from $4.2 million for the three months ended June 30, 2023 primarily due to increased equipment manufacturing activity. As a percentage of revenue, cost of revenue, exclusive of depreciation and amortization expense of $0.8 million and $2.2 million for the three months ended June 30, 2024 and 2023, respectively, was 79% and 74% for the three months ended June 30, 2024 and 2023, respectively. The increase is primarily due to a decrease in utilization for our rental equipment business resulting in a higher ratio of fixed costs to variable costs.
Previous report
Six Months Ended June 30, 2024 Compared to Six Months Ended June 30, 2023
Previous report
Natural Sand Proppant Services. Natural sand proppant services division revenue decreased $15.0 million, or 63%, to $9.0 million for the six months ended June 30, 2024, from $24.0 million for the six months ended June 30, 2023. Inter-segment revenue, consisting primarily of revenue derived from our pressure pumping segment, was a nominal amount for each of the six months ended June 30, 2024 and June 30, 2023.
Previous report
Well Completion Services. Well completion services division cost of revenue, exclusive of depreciation and amortization expense, decreased $57.4 million, or 75%, to $18.9 million for the six months ended June 30, 2024 from $76.3 million for the six months ended June 30, 2023. As a percentage of revenue, our well completion services division cost of revenue, exclusive of depreciation and amortization expense of $6.0 million and $9.3 million for the six months ended June 30, 2024 and 2023, respectively, was 103% and 80% for the six months ended June 30, 2024 and 2023, respectively. The increase as a percentage of revenue is primarily due to a decline in utilization of our pressure pumping services, resulting in a higher ratio of fixed costs to variable costs.
Previous report
under its term credit facility, together with accrued and unpaid interest, and terminate the term credit facility.
Previous report
Under the terms and conditions of the Assignment Agreement, any portion of the Transferred Amount that remained outstanding from PREPA from and after March 31, 2024 would thereafter increase monthly at a rate of 1% per month, compounded. Any amount received with respect to the PREPA Claim in excess of the Transferred Amount would be for the benefit of Cobra. If (i) it was determined by a final order of any court of competent jurisdiction that the PREPA Claim was subject to any defense, claim or right of setoff, reduction, avoidance, disallowance, subordination, disgorgement, recharacterization, adversary proceeding or other impairment, whether on contractual, legal or equitable grounds, resulting in the PREPA Claim being disallowed or allowed in an amount less than the Transferred Amount, or (ii) Cobra consented to, or entered into a settlement agreement with PREPA for, the payment that was, in an aggregate amount, less than the Transferred Amount or was otherwise adversely impacting SPCP Group’s rights transferred under the Assignment Agreement, Cobra agreed to repurchase within 18 months and one day from the receipt of SPCP Group’s written demand, the unpaid portion of the Transferred Amount subject to such disallowance or impairment, multiplied by the purchase rate, plus interest accruing, subject to certain tolling provisions, at a rate of 6% per annum from December 1, 2023 through and including the date of such repurchase.
Previous report
However, our liquidity and future cash flows are subject to a number of variables, including receipt of payments from our customers, and the payments of the $188.4 million in aggregate settlement proceeds payable to us under the Settlement Agreement with PREPA relating to the PREPA receivable, which Settlement Agreement remains subject to approval by the Title III Court. See Note 2. Basis of Presentation and Significant Accounting Policies—Accounts Receivable and —Concentrations of Credit Risk and Significant Customers and Note 19. Commitments and Contingencies—Litigation included elsewhere in this report for additional information. We plan to use a portion of the $188.4 million in settlement proceeds to pay in full all of the outstanding amounts under our term credit facility, which had a balance of approximately $49.3 million as of June 30, 2024, as well as accrued and unpaid interest thereon, and terminate the term credit facility. The remaining settlement proceeds will be cash on our balance sheet to be used to invest back into our business and for general corporate purposes.
Reworded paragraphs (72)
Previous wording
We are an integrated, growth-oriented energy services company focused on providing products and services to enable the exploration and development of North American onshore unconventional oil and natural gas reserve as well as the construction and repair of the electric grid for private utilities, public investor-owned utilities and co-operative utilities through our infrastructure services businesses. Our primary business objective is to grow our operations and create value for stockholders through organic growth opportunities and accretive acquisitions. Our suite of services includes well completion services, infrastructure services, natural sand proppant services, drilling services and other services. Our well completion services division provides hydraulic fracturing, sand hauling and water transfer services. Our infrastructure services division provides engineering, design, construction, upgrade, maintenance and repair services to the electrical infrastructure industry. Our natural sand proppant services division mines, processes and sells natural sand proppant used for hydraulic fracturing. Our drilling services division currently provides rental equipment, such as mud motors and operational tools, for both vertical and horizontal drilling. In addition to these service divisions, we also provide aviation services, equipment rentals, crude oil hauling services, remote accommodations and equipment manufacturing. We believe that the services we offer play a critical role in increasing the ultimate recovery and present value of production streams from unconventional resources as well as in maintaining and improving electrical infrastructure. Our complementary suite of services provides us with the opportunity to cross-sell our services and expand our customer base and geographic positioning.
Current wording
We are an integrated, growth-oriented energy services company focused on providing products and services to enable the exploration and development of North American onshore unconventional oil and natural gas reserve as well as the construction and repair of the electric grid for private utilities, public investor-owned utilities and co-operative utilities through our infrastructure services businesses. Our primary business objective is to grow our operations and create value for stockholders through organic growth opportunities and accretive acquisitions. Our suite of services includes well completion services, infrastructure services, natural sand proppant services, drilling services and other services. Our well completion services division provides hydraulic fracturing, sand hauling and water transfer services. Our infrastructure services division provides engineering, design, construction, upgrade, maintenance and repair services to the electrical infrastructure industry. Our natural sand proppant services division mines, processes and sells natural sand proppant used for hydraulic fracturing. Our drilling services division currently provides rental equipment, such as mud motors and operational tools, for both vertical and horizontal drilling. In addition to these service divisions, we also provide aviation services, equipment rentals, remote accommodations and equipment manufacturing. We believe that the services we offer play a critical role in increasing the ultimate recovery and present value of production streams from unconventional resources as well as in maintaining and improving electrical infrastructure. Our complementary suite of services provides us with the opportunity to cross-sell our services and expand our customer base and geographic positioning.
Previous wording
Demand for most of our oil and natural gas products and services depends substantially on the level of expenditures by companies in the oil and natural gas industry. The levels of capital expenditures of our customers are driven by many factors, including the prices of oil and natural gas. Throughout 2023, pricing for crude oil and natural gas declined from levels seen in 2022, which slowed down completion activities for our customers, in particular, in the Utica and Marcellus Shale natural gas plays, and, as a result, reduced demand for our well completion services. In the first half of 2024, we continued to experience persistent challenges in our well completion business and other oilfield services associated with lower U.S. onshore activity and sustained weakness in the natural gas basins in which we operate. Current indications are that activity levels are expected to remain relatively flat in the second half of 2024, with potential for a ramp up in 2025. We will be strategically positioned to capitalize on this anticipated demand if and when it ramps up.
Current wording
Demand for most of our oil and natural gas products and services depends substantially on the level of expenditures by companies in the oil and natural gas industry. The levels of capital expenditures of our customers are driven by many factors, including the prices of oil and natural gas. Throughout 2023, pricing for crude oil and natural gas declined from levels seen in 2022, which slowed down completion activities for our customers, in particular, in the Utica and Marcellus Shale natural gas plays, and, as a result, reduced demand for our well completion services. Throughout the first three quarters of 2024, we continued to experience persistent challenges in our well completion business and other oilfield services associated with lower
Previous wording
In response to market conditions, we temporarily shut down our cementing and acidizing operations and flowback operations beginning in July 2019, our contract drilling operations beginning in December 2019, our rig hauling operations beginning in April 2020, our coil tubing, pressure control and full service transportation operations beginning in July 2020 and our crude oil hauling operations beginning in July 2021. We continue to monitor the market to determine if and when we can recommence these services.
Current wording
In response to market conditions and reduced demand, we temporarily shut down our cementing and acidizing operations and flowback operations beginning in July 2019, our contract drilling operations beginning in December 2019, our rig hauling operations beginning in April 2020, our coil tubing, pressure control and full service transportation operations beginning in July 2020 and our crude oil hauling operations beginning in July 2021. We continue to monitor the market to determine if and when we can recommence these services.
Previous wording
As discussed above, pricing for crude oil and natural gas declined from levels seen in 2022, which slowed down completion activities and adversely impacted demand for our sand proppant services in the second half of 2023. Although we experienced increased demand for our natural sand proppant services and more favorable pricing during the first half of 2024 relative to the fourth quarter of 2023, activity remained suppressed. We expect that this trend will continue into the second half of 2024.
Current wording
As discussed above, pricing for crude oil and natural gas declined from levels seen in 2022, which slowed down completion activities and adversely impacted demand for our sand proppant services in the second half of 2023. Although we experienced increased demand for our natural sand proppant services and more favorable pricing during the first nine months ended September 30, 2024 relative to the fourth quarter of 2023, activity has remained suppressed. We expect that this trend will continue into the fourth quarter of 2024.
Previous wording
Our average crew count declined slightly from approximately 78 crews throughout the fourth quarter of 2023 to approximately 77 crews throughout the first half of 2024. An uptick in storm restoration activity drove enhanced results during the second quarter of 2024. With the Infrastructure Investment and Jobs Act funds being released for infrastructure projects, we remain encouraged about the potential for growth in this sector. We are currently seeing an uptick in bidding opportunities related to engineering, fiber, and transmission and distribution, all of which are areas we believe we have differentiated and specialized capabilities. We continue to focus on operational execution and pursue opportunities within this sector as we strategically structure our service offerings for growth, intending to increase our infrastructure services activity and expand both our geographic footprint and depth of projects, especially in fiber maintenance and installation projects.
Current wording
Our average crew count declined slightly from approximately 83 crews throughout 2023 to approximately 77 crews during the nine months ended September 30, 2024. With the Infrastructure Investment and Jobs Act funds being released for infrastructure projects, we remain encouraged about the potential for growth in this sector. We are currently seeing an uptick in bidding opportunities related to engineering, fiber, and transmission and distribution, all of which are areas we believe we have differentiated and specialized capabilities. We continue to focus on operational execution and pursue opportunities within this sector as we strategically structure our service offerings for growth, intending to increase our infrastructure services activity and expand both our geographic footprint and depth of projects, especially in fiber maintenance and installation projects.
Previous wording
Under the terms of the Settlement Agreement, Cobra will have an allowed administrative expense claim against PREPA of $170.0 million, plus the $18.4 million in the Withheld FEMA Funds that PREPA is currently holding and considers payable to Cobra but for purported garnishments in this amount asserted by three Puerto Rican municipalities (the “Specified Municipalities”) for certain municipal tax claims discussed elsewhere in this report and for which Cobra disputes any valid garnishment. Cobra’s allowed claim will be paid through three installments: (i) $150.0 million on the later of (A) ten business days following approval of the Settlement Agreement by the Title III Court and (B) August 31, 2024; (ii) $20.0 million within seven days following the effective date of PREPA’s plan of adjustment; and (iii) $18.4 million in the Withheld FEMA Funds within either (A) ten business days after the deadline for appealing the entry of the settlement order by the Title III Court under the applicable bankruptcy rules of procedure if no such appeal is filed, or (B) if the provisions of the settlement order allowing PREPA to release the Withheld FEMA Funds to Cobra without retaining any liability to the Specified Municipalities are appealed by the Specified Municipalities, within ten business days of the filing of the notice of such appeal. As a result of the Settlement Agreement, we recorded a non-cash, pre-tax charge of approximately $170.7 million in the second quarter of 2024 to reduce our accounts receivable balance from PREPA of $359.1 million, representing the amount owed to Cobra by PREPA in relation to these agreements as of June 30, 2024, including the accrued but unpaid interest, prior to the Settlement Agreement, to the amount expected to be received from the Settlement Agreement. The Settlement Agreement remains subject to approval by the Title III Court, which is expected to hear the motion relating to the Settlement Agreement at the next omnibus meeting to be held on September 18, 2024. We cannot provide any assurances that the court approval will be obtained on the indicated time frame or at all. See Note 2. Basis of Presentation and Significant Accounting Policies—Accounts Receivable and —Concentrations of Credit Risk and Significant Customers and Note 19. Commitments and Contingencies—Litigation included elsewhere in this report for additional information.
Current wording
Under the terms of the Settlement Agreement, Cobra was allowed an administrative expense claim against PREPA of $170.0 million, plus the $18.4 million in the Withheld FEMA Funds that PREPA was holding and considered payable to Cobra but for purported garnishments in this amount asserted by three Puerto Rican municipalities (the “Specified Municipalities”) for certain municipal tax claims discussed elsewhere in this report and for which Cobra disputes any valid garnishment. Cobra’s allowed claim is payable through three installments: (i) $150.0 million on the later of (A) ten business days following approval of the Settlement Agreement by the Title III Court and (B) August 31, 2024; (ii) $20.0 million within seven days following the effective date of PREPA’s plan of adjustment; and (iii) $18.4 million in the Withheld FEMA Funds within either (A) ten business days after the deadline for appealing the entry of the settlement order by the Title III Court under the applicable bankruptcy rules of procedure if no such appeal is filed, or (B) if the provisions of the settlement order allowing PREPA to release the Withheld FEMA Funds to Cobra without retaining any liability to the Specified Municipalities are appealed by the Specified Municipalities, within ten business days of the filing of the notice of such appeal. As a result of the Settlement Agreement, we recorded a non-cash, pre-tax charge of approximately $170.7 million in the second quarter of 2024 to reduce our accounts receivable balance from PREPA of $359.1 million, representing the amount owed to Cobra by PREPA in relation to these agreements as of June 30, 2024, including the accrued but unpaid interest, prior to the Settlement Agreement, to the amount expected to be received from the Settlement Agreement. On September 18, 2024, the Settlement Agreement was approved by the Title III Court overruling all objections thereto and an order was entered the same day (the “Settlement Order”). On October 1, 2024, Cobra received the first installment payment of $150.0 million from the Commonwealth of Puerto Rico in connection with the Settlement Agreement with PREPA. Also on October 1, 2024, certain Puerto Rico municipalities and Foreman Electric Services Inc. that had objected to approval of the Settlement Order each filed timely notices of appeal of the Settlement Order to the United States Court of Appeals for the First Circuit. None of the foregoing parties have sought a stay of the Settlement Order pending such appeals. Although the ultimate outcome of these appeals cannot be predicted with certainty, Cobra believes that the appeals are without merit. On October 18, 2024, Cobra received a payment from PREPA totaling $18.4 million under the terms of the Settlement Agreement. In connection with the receipt of the $18.4 million from PREPA, Cobra instructed Fifth Third Bank to issue a letter of credit to PREPA under the Reimbursement Agreement in the amount of $18.4 million and transferred a total of…
Excerpt shortened here; the source contains the full paragraph.
Previous wording
We plan to use a portion of the $188.4 million in settlement proceeds to pay in full all of the outstanding amounts under our term credit facility, which had a balance of approximately $49.3 million as of June 30, 2024, as well as accrued and unpaid interest thereon, and terminate the term credit facility. The remaining settlement proceeds will be cash on our balance sheet to be used to invest back into our business and for general corporate purposes.
Current wording
We used a portion of the proceeds received from the first installment payment to pay, in full, all amounts owed under our term credit facility, including accrued and unpaid interest, and terminated the facility. The remaining settlement proceeds will be cash on our balance sheet to be used to invest back into our business and for general corporate purposes.
Previous wording
•Revenue for the second quarter of 2024 decreased by $23.9 million, or 32%, to $51.5 million from $75.4 million for the second quarter of 2023. The decrease in total revenue is primarily attributable to a decline in well completions services and natural sand proppant services revenue, partially offset by an increase in infrastructure services revenue.
Current wording
•Revenue for the third quarter of 2024 decreased by $25.0 million, or 38%, to $40.0 million from $65.0 million for the third quarter of 2023. The decrease in total revenue is primarily attributable to a decline in well completions services and natural sand proppant services revenue.
Previous wording
•Net loss for the second quarter of 2024 was $156.0 million, or $3.25 loss per diluted share, as compared to net loss of $4.5 million, or $0.09 loss per diluted share, for the second quarter of 2023. The increase in net loss is primarily attributable to charges totaling $170.7 million recognized during the three months ended June 30, 2024 in relation to the Settlement Agreement with PREPA.
Current wording
•Net loss for the third quarter of 2024 was $24.0 million, or $0.50 loss per diluted share, as compared to net loss of $1.1 million, or $0.02 loss per diluted share, for the third quarter of 2023. The increase in net loss is primarily attributable to declines in utilization for our well completion services and our natural sand proppant services, coupled with the recognition of interest on the PREPA receivable during the third quarter of 2023, while not recognizing any during the third quarter of 2024.
Previous wording
•Adjusted EBITDA (as defined and reconciled below) for the second quarter of 2024 was ($160.7) million as compared to $16.4 million for the second quarter of 2023. See “Non-GAAP Financial Measures” below for a reconciliation of net income to Adjusted EBITDA.
Current wording
•Adjusted EBITDA (as defined and reconciled below) for the third quarter of 2024 was ($6.4) million as compared to $13.4 million for the third quarter of 2023. See “Non-GAAP Financial Measures” below for a reconciliation of net loss to Adjusted EBITDA.
Previous wording
Revenue. Revenue for the three months ended June 30, 2024 decreased $23.9 million, or 32%, to $51.5 million from $75.4 million for the three months ended June 30, 2023. The decrease in total revenue is primarily attributable to a decrease in utilization in our well completions services division as well as a decline in tons sold in our natural sand proppant services division during the three months ended June 30, 2024, partially offset by an increase in our infrastructure services revenue. Revenue by operating division was as follows:
Current wording
Revenue. Revenue for the three months ended September 30, 2024 decreased $25.0 million, or 38%, to $40.0 million from $65.0 million for the three months ended September 30, 2023. The decrease in total revenue is primarily attributable to a decrease in utilization in our well completions services division as well as a decline in tons sold in our natural sand proppant services division during the three months ended September 30, 2024. Revenue by operating division was as follows:
Previous wording
Infrastructure Services. Infrastructure services division revenue increased $3.1 million, or 11%, to $31.4 million for the three months ended June 30, 2024 from $28.3 million for the three months ended June 30, 2023. The increase in revenue was primarily due to a $4.1 million increase in storm restoration activity, which was partially offset by a decline in average crew count from 86 crews for the three months ended June 30, 2023 to 79 crews for the three months ended June 30, 2024.
Current wording
Infrastructure Services. Infrastructure services division revenue decreased $0.7 million, or 3%, to $26.0 million for the three months ended September 30, 2024 from $26.7 million for the three months ended September 30, 2023. The decrease in revenue was primarily due to a decline in average crew count from 81 crews for the three months ended September 30, 2023 to 77 crews for the three months ended September 30, 2024. The decrease was partially offset by an increase in transmission revenue.
Previous wording
Natural Sand Proppant Services. Natural sand proppant services division revenue decreased $6.9 million, or 59%, to $4.7 million for the three months ended June 30, 2024 from $11.6 million for the three months ended June 30, 2023 primarily due to a 63% decrease in tons of sand sold from 383,841 tons for the three months ended June 30, 2023 to 140,615 tons for the three months ended June 30, 2024, coupled with a 24% decline in the average price per ton of sand sold from $30.08 per ton during the three months ended June 30, 2023 to $22.73 per ton during the three months ended June 30, 2024. This was partially offset by $1.1 million of shortfall revenue recognized during the three months ended June 30, 2024.
Current wording
Natural Sand Proppant Services. Natural sand proppant services division revenue decreased $5.7 million, or 54%, to $4.9 million for the three months ended September 30, 2024 from $10.6 million for the three months ended September 30, 2023 primarily due to a 54% decrease in tons of sand sold from 352,276 tons for the three months ended September 30, 2023 to 163,297 tons for the three months ended September 30, 2024, coupled with a 24% decline in the average price per ton of sand sold from $30.18 per ton during the three months ended September 30, 2023 to $22.89 per ton during the three months ended September 30, 2024. The decrease was partially offset by $1.2 million of shortfall revenue recognized during the three months ended September 30, 2024.
Previous wording
Drilling Services. Drilling services division revenue decreased $2.1 million, or 75%, to $0.7 million for the three months ended June 30, 2024 as compared to $2.8 million for the three months ended June 30, 2023. The decrease is primarily due to decreased utilization for our directional drilling business from 58% for the three months ended June 30, 2023 to 16% for the three months ended June 30, 2024.
Current wording
Drilling Services. Drilling services division revenue decreased $0.7 million, or 30%, to $1.6 million for the three months ended September 30, 2024 as compared to $2.3 million for the three months ended September 30, 2023. The decrease is primarily due to decreased utilization for our directional drilling business from 37% for the three months ended September 30, 2023 to 28% for the three months ended September 30, 2024.
Previous wording
Other Services. Other services revenue, consisting of revenue derived from our aviation, equipment rental, remote accommodation and equipment manufacturing businesses, increased approximately $1.4 million, or 25%, to $7.1 million for the three months ended June 30, 2024, from $5.7 million for the three months ended June 30, 2023. Inter-segment revenue, consisting primarily of equipment manufacturing revenue derived from our well completion segment, was $2.4 million and $0.4 million for the three months ended June 30, 2024 and 2023, respectively.
Current wording
Other Services. Other services revenue, consisting of revenue derived from our aviation, equipment rental, remote accommodation and equipment manufacturing businesses, increased approximately $1.0 million, or 17%, to $7.0 million for the three months ended September 30, 2024, from $6.0 million for the three months ended September 30, 2023. Inter-segment revenue, consisting primarily of equipment manufacturing revenue derived from our well completion segment, was $1.6 million and $0.9 million for the three months ended September 30, 2024 and 2023, respectively.
Previous wording
On average, 212 rooms were utilized during the three months ended June 30, 2024 as compared to 146 for the three months ended June 30, 2023, resulting in an increase in remote accommodations revenue. An average of 223 pieces of equipment were rented to customers during the three months ended June 30, 2024, a decrease of 12% from an average of 253 pieces of equipment rented to customers during the three months ended June 30, 2023.
Current wording
On average, 222 rooms were utilized during the three months ended September 30, 2024 as compared to 128 for the three months ended September 30, 2023, resulting in an increase in remote accommodations revenue. An average of 249 pieces of equipment were rented to customers during the three months ended September 30, 2024, an increase of 19% from an average of 210 pieces of equipment rented to customers during the three months ended September 30, 2023.
Previous wording
Cost of Revenue (exclusive of depreciation, depletion, amortization and accretion expense). Cost of revenue, exclusive of depreciation, depletion, amortization and accretion expense, decreased $16.5 million from $60.3 million, or 80% of total revenue, for the three months ended June 30, 2023 to $43.8 million, or 85% of total revenue, for the three months ended June 30, 2024. The decrease is primarily due to a decline in activity in our well completions division. Cost of revenue by operating division was as follows:
Current wording
Cost of Revenue (exclusive of depreciation, depletion, amortization and accretion expense). Cost of revenue, exclusive of depreciation, depletion, amortization and accretion expense, decreased $14.8 million from $52.8 million, or 81% of total revenue, for the three months ended September 30, 2023 to $38.0 million, or 95% of total revenue, for the three months ended September 30, 2024. The decrease is primarily due to a decline in activity in our well completions division. Cost of revenue by operating division was as follows:
Previous wording
Well Completion Services. Well completion services division cost of revenue, exclusive of depreciation and amortization expense, decreased $13.5 million, or 57%, to $10.3 million for the three months ended June 30, 2024 from $23.8 million for the three months ended June 30, 2023, primarily due to a decrease in utilization of our fleets. As a percentage of revenue, our well completion services division cost of revenue, exclusive of depreciation and amortization expense of $2.7 million and $4.5 million for the three months ended June 30, 2024 and 2023, respectively, was 103% and 86% for the three months ended June 30, 2024 and 2023, respectively. The increase as a percentage of revenue is primarily due to a decline in utilization of our pressure pumping services, resulting in a higher ratio of fixed costs to variable costs.
Current wording
Well Completion Services. Well completion services division cost of revenue, exclusive of depreciation and amortization expense, decreased $10.6 million, or 59%, to $7.3 million for the three months ended September 30, 2024 from $17.9 million for the three months ended September 30, 2023, primarily due to a decrease in utilization of our fleets. As a percentage of revenue, our well completion services division cost of revenue, exclusive of depreciation and amortization expense of $2.5 million and $4.0 million for the three months ended September 30, 2024 and 2023, respectively, was 332% and 88% for the three months ended September 30, 2024 and 2023, respectively. The increase as a percentage of revenue is primarily due to a decline in utilization of our pressure pumping services, resulting in a higher ratio of fixed costs to variable costs.
Previous wording
Selling, General and Administrative Expenses. Selling, general and administrative, or SG&A, expenses represent the costs associated with managing and supporting our operations. SG&A expense increased $87.1 million, or 838%, to $97.5 million for the three months ended June 30, 2024 from $10.4 million for the three months ended June 30, 2023 primarily due to an increase in the provision for expected credit losses in connection with the Settlement Agreement with PREPA. The table below presents a breakdown of SG&A expenses for the periods indicated (in thousands):
Current wording
Selling, General and Administrative Expenses. Selling, general and administrative, or SG&A, expenses represent the costs associated with managing and supporting our operations. SG&A expense decreased $1.7 million, or 16%, to $8.7 million for the three months ended September 30, 2024 from $10.4 million for the three months ended September 30, 2023 primarily due to a decrease in professional service fees. The table below presents a breakdown of SG&A expenses for the periods indicated (in thousands):
Previous wording
Depreciation, Depletion, Amortization and Accretion. Depreciation, depletion, amortization and accretion decreased $6.5 million, or 52%, to $6.1 million for the three months ended June 30, 2024 from $12.6 million for the three months ended June 30, 2023. The decrease is primarily attributable to a decline in property and equipment depreciation expense as a result of existing assets being fully depreciated.
Current wording
Depreciation, Depletion, Amortization and Accretion. Depreciation, depletion, amortization and accretion decreased $5.0 million, or 45%, to $6.2 million for the three months ended September 30, 2024 from $11.2 million for the three months ended September 30, 2023. The decrease is primarily attributable to a decline in property and equipment depreciation expense as a result of existing assets being fully depreciated.
Previous wording
Gains on Disposal of Assets, Net. Gains on the disposal of assets were $1.0 million and $0.5 million for the three months ended June 30, 2024 and 2023, respectively.
Current wording
Gains on Disposal of Assets, Net. Gains on the disposal of assets were $0.3 million and $2.4 million for the three months ended September 30, 2024 and 2023, respectively.
Previous wording
Operating Loss. We reported operating loss of $94.8 million for the three months ended June 30, 2024 compared to $7.4 million for the three months ended June 30, 2023. The increase in operating loss is primarily due to an $89.2 million charge to selling, general and administrative expenses recognized during the three months ended June 30, 2024 in relation to the Settlement Agreement with PREPA.
Current wording
Operating Loss. We reported operating loss of $12.6 million for the three months ended September 30, 2024 compared to $8.9 million for the three months ended September 30, 2023. The increase in operating loss is primarily due to a decline in activity for our well completions and natural sand proppant divisions.
Previous wording
Interest Expense and financing charges, Net. Interest expense and financing charges, net decreased $0.7 million, or 22%, to $2.5 million for the three months ended June 30, 2024 from $3.2 million for the three months ended June 30, 2023. The decrease is primarily due to a decline in average borrowings outstanding under our revolving credit facility.
Current wording
Interest Expense and financing charges, Net. Interest expense and financing charges, net increased $6.8 million, or 234%, to $9.7 million for the three months ended September 30, 2024 from $2.9 million for the three months ended September 30, 2023. The increase is primarily due to a $7.1 million charge incurred in relation to our sale leaseback agreements. See “—Liquidity and Capital Resources—Sale Leaseback Transactions” for additional information. The increase was slightly offset by a decline in average borrowings outstanding under our revolving credit facility.
Previous wording
Other (Expense) Income, Net. Other expense was $73.7 million for the three months ended June 30, 2024 compared to other income of $8.3 million for the three months ended June 30, 2023. During the three months ended June 30, 2024 and 2023, we recognized interest on delinquent accounts receivable totaling $10.3 million and $11.3 million, respectively, in relation to our outstanding receivable with PREPA. Subsequent to June 30, 2024, Cobra entered into the Settlement Agreement with PREPA. As a result, Cobra recognized a charge to interest on delinquent accounts receivable totaling $81.5 million during the three months ended June 30, 2024 to reduce its accounts receivable balance to the amount expected to be collected in relation to interest charged to PREPA.
Current wording
Other (Expense) Income, Net. Other expense was $1.1 million for the three months ended September 30, 2024 compared to other income of $14.1 million for the three months ended September 30, 2023. During the three months ended September 30, 2023, we recognized interest on delinquent accounts receivable totaling $11.4 million in relation to our outstanding receivable with PREPA.
Previous wording
Income Taxes. We recorded income tax benefit of $15.0 million on pre-tax loss of $171.0 million for the three months ended June 30, 2024 compared to an income tax expense of $2.2 million on pre-tax loss of $2.2 million for the three months ended June 30, 2023. Our effective tax rates were 9% and (100)% for the three months ended June 30, 2024 and 2023, respectively. The effective tax rates for the three months ended June 30, 2024 and 2023 differed from the statutory rate of 21% primarily due to the mix of earnings between the United States and Puerto Rico as well as changes in the valuation allowance. Additionally, as a result of the Settlement Agreement with PREPA, during the three months ended June 30, 2024, the Company reversed $19.9 million in withholding tax accruals related to undistributed earnings from Puerto Rico.
Current wording
Income Taxes. We recorded income tax expense of $0.6 million on pre-tax loss of $23.4 million for the three months ended September 30, 2024 compared to $3.4 million on pre-tax income of $2.4 million for the three months ended September 30, 2023. Our effective tax rates were 3% and 146% for the three months ended September 30, 2024 and 2023, respectively. The effective tax rates for the three months ended September 30, 2024 and 2023 differed from the statutory rate of 21% primarily due to changes in the valuation allowance as well as the mix of earnings between the United States and Puerto Rico and interest and penalties.
Previous wording
Revenue. Revenue for the six months ended June 30, 2024 decreased $97.1 million, or 51%, to $94.7 million from $191.8 million for the six months ended June 30, 2023. The decrease in total revenue is primarily attributable to decreases in well completion services and natural sand proppant services revenue. Revenue by operating division was as follows:
Current wording
Revenue. Revenue for the nine months ended September 30, 2024 decreased $122.0 million, or 48%, to $134.7 million from $256.7 million for the nine months ended September 30, 2023. The decrease in total revenue is primarily attributable to decreases in well completion services and natural sand proppant services revenue. Revenue by operating division was as follows:
Previous wording
Well Completion Services. Well completion services division revenue decreased $76.6 million, or 81%, to $18.3 million for the six months ended June 30, 2024 from $94.9 million for the six months ended June 30, 2023. Inter-segment revenues, consisting primarily of revenue derived from our sand segment, was $0.2 million for each of the six months ended June 30, 2024 and 2023, respectively.
Current wording
Well Completion Services. Well completion services division revenue decreased $94.7 million, or 82%, to $20.5 million for the nine months ended September 30, 2024 from $115.2 million for the nine months ended September 30, 2023. Inter-segment revenues, consisting primarily of revenue derived from our sand segment, was $0.3 million and $0.4 million for the nine months ended September 30, 2024 and 2023, respectively.
Previous wording
The decrease in our well completion services revenue was primarily driven by a decrease in pressure pumping services utilization. The number of stages completed decreased 77% to 672 for the six months ended June 30, 2024 from 2,974 for the six months ended June 30, 2023. An average of 0.4 of our six fleets were active for the six months ended June 30, 2024 as compared to an average of 2.6 fleets for the six months ended June 30, 2023.
Current wording
The decrease in our well completion services revenue was primarily driven by a decrease in pressure pumping services utilization due to the continued softness in the natural gas basins in which we operate. The number of stages completed decreased 81% to 673 for the nine months ended September 30, 2024 from 3,551 for the nine months ended September 30, 2023. An average of 0.3 of our six fleets were active for the nine months ended September 30, 2024 as compared to an average of 2.1 fleets for the nine months ended September 30, 2023.
Previous wording
Infrastructure Services. Infrastructure services division revenue decreased marginally to $56.5 million for the six months ended June 30, 2024 from $56.6 million for the six months ended June 30, 2023. Average crew count was 77 crews for the six months ended June 30, 2024 as compared to 87 crews for the six months ended June 30, 2023. This decrease was offset by an increase in engineering, substation and materials revenue for the six months ended June 30, 2024.
Current wording
Infrastructure Services. Infrastructure services division revenue decreased marginally to $82.5 million for the nine months ended September 30, 2024 from $83.3 million for the nine months ended September 30, 2023. Average crew count was 77 crews for the nine months ended September 30, 2024 as compared to 85 crews for the nine months ended September 30, 2023. The decrease was offset by an increase in transmission, engineering, and materials revenue for the nine months ended September 30, 2024.
Previous wording
The decrease in our natural sand proppant services revenue was primarily due to a 63% decrease in tons of sand sold from approximately 775,280 tons for the six months ended June 30, 2023 to approximately 286,277 tons for the six months ended June 30, 2024, and a 23% decrease in the average sales price per ton of sand sold from $30.55 per ton during the six months ended June 30, 2023 to $23.57 per ton during the six months ended June 30, 2024. This was partially offset by $1.1 million of shortfall revenue recognized during the six months ended June 30, 2024.
Current wording
Natural Sand Proppant Services. Natural sand proppant services division revenue decreased $20.8 million, or 60%, to $13.9 million for the nine months ended September 30, 2024, from $34.7 million for the nine months ended September 30, 2023. The decrease in our natural sand proppant services revenue was primarily due to a 60% decrease in tons of sand sold from approximately 1,127,556 tons for the nine months ended September 30, 2023 to approximately 449,574 tons for the nine months ended September 30, 2024, coupled with a 23% decrease in the average sales price per ton of sand sold from $30.44 per ton during the nine months ended September 30, 2023 to $23.32 per ton during the nine months ended September 30, 2024. The decrease was partially offset by $2.3 million of shortfall revenue recognized during the nine months ended September 30, 2024.
Previous wording
Drilling Services. Drilling services division revenue decreased $3.0 million, or 71%, to $1.2 million for the six months ended June 30, 2024 from $4.2 million for the six months ended June 30, 2023. The decrease in our drilling services revenue was primarily attributable to a decrease in utilization for our directional drilling business from 44% during the six months ended June 30, 2023 to 15% during the six months ended June 30, 2024, which was coupled with a decrease in pricing.
Current wording
Drilling Services. Drilling services division revenue decreased $3.7 million, or 57%, to $2.8 million for the nine months ended September 30, 2024 from $6.5 million for the nine months ended September 30, 2023. The decrease in our drilling services revenue was primarily attributable to a decrease in utilization for our directional drilling business from 42% during the nine months ended September 30, 2023 to 19% during the nine months ended September 30, 2024, which was coupled with a decrease in pricing.
Previous wording
Other Services. Other services revenue, consisting of revenue derived from our aviation, equipment rental, remote accommodation and equipment manufacturing businesses, increased marginally to $13.3 million for the six months ended June 30, 2024 from $13.2 million for the six months ended June 30, 2023. Inter-segment revenue, consisting primarily of revenue derived from our infrastructure and well completion segments, totaled $3.4 million and $0.8 million for the six months ended June 30, 2024 and 2023, respectively.
Current wording
Other Services. Other services revenue, consisting of revenue derived from our aviation, equipment rental, remote accommodation and equipment manufacturing businesses, increased marginally to $20.3 million for the nine months ended September 30, 2024 from $19.2 million for the nine months ended September 30, 2023. Inter-segment revenue, consisting primarily of revenue derived from our infrastructure and well completion segments, totaled $5.0 million and $1.7 million for the nine months ended September 30, 2024 and 2023, respectively.
Previous wording
The increase in our other services revenue was primarily due to an increase in equipment manufacturing and utilization for our remote accommodations business, which was offset by a decline in utilization for our equipment rental business. We rented an average of 217 pieces of equipment to customers during the six months ended June 30, 2024, a decrease of 20% from an average of 270 pieces of equipment rented to customers during the six months ended June 30, 2023.
Current wording
The increase in our other services revenue was primarily due to an increase in utilization for our remote accommodations business, which was offset by a decline in utilization for our equipment rental business. On average, 222 rooms were utilized during the nine months ended September 30, 2024 as compared to 181 for the nine months ended September 30, 2023. We rented an average of 228 pieces of equipment to customers during the nine months ended September 30, 2024, a decrease of 9% from an average of 250 pieces of equipment rented to customers during the nine months ended September 30, 2023.
Previous wording
Cost of Revenue (exclusive of depreciation, depletion, amortization and accretion expense). Cost of revenue, exclusive of depreciation, depletion, amortization and accretion expense, decreased $64.8 million from $149.2 million, or 78% of total revenue, for the six months ended June 30, 2023 to $84.4 million, or 89% of total revenue, for the six months ended June 30, 2024. Cost of revenue by operating division was as follows:
Current wording
Cost of Revenue (exclusive of depreciation, depletion, amortization and accretion expense). Cost of revenue, exclusive of depreciation, depletion, amortization and accretion expense, decreased $79.7 million from $202.1 million, or 79% of total revenue, for the nine months ended September 30, 2023 to $122.4 million, or 91% of total revenue, for the nine months ended September 30, 2024. Cost of revenue by operating division was as follows:
Previous wording
Infrastructure Services. Infrastructure services division cost of revenue, exclusive of depreciation and amortization expense, increased $0.4 million, or 1%, to $46.2 million for the six months ended June 30, 2024 from $45.8 million for the six months ended June 30, 2023. As a percentage of revenue, cost of revenue, exclusive of depreciation and amortization expense of $1.3 million and $5.8 million, respectively, for the six months ended June 30, 2024 and 2023 was 82% and 81% for the six months ended June 30, 2024 and 2023, respectively.
Current wording
Infrastructure Services. Infrastructure services division cost of revenue, exclusive of depreciation and amortization expense, increased $0.9 million, or 1%, to $68.7 million for the nine months ended September 30, 2024 from $67.8 million for the nine months ended September 30, 2023. As a percentage of revenue, cost of revenue, exclusive of depreciation and amortization expense of $2.0 million and $7.4 million, respectively, for the nine months ended September 30, 2024 and 2023 was 83% and 81% for the nine months ended September 30, 2024 and 2023, respectively.
Previous wording
Natural Sand Proppant Services. Natural sand proppant services division cost of revenue, exclusive of depreciation, depletion and accretion expense, decreased $4.5 million, or 30%, from $14.9 million for the six months ended June 30, 2023 to $10.4 million for the six months ended June 30, 2024. As a percentage of revenue, cost of revenue, exclusive of depreciation, depletion and accretion expense of $2.4 million and $3.6 million for the six months ended June 30, 2024 and 2023, respectively, was 116% and 62% for the six months ended June 30, 2024 and 2023, respectively. The increase in cost as a percentage of revenue is primarily due to a 63% decrease in tons sold and a 23% decrease in average sales price.
Current wording
Natural Sand Proppant Services. Natural sand proppant services division cost of revenue, exclusive of depreciation, depletion and accretion expense, decreased $8.4 million, or 38%, from $21.9 million for the nine months ended September 30, 2023 to $13.5 million for the nine months ended September 30, 2024. As a percentage of revenue, cost of revenue, exclusive of depreciation, depletion and accretion expense of $4.1 million and $6.4 million for the nine months ended September 30, 2024 and 2023, respectively, was 97% and 63% for the nine months ended September 30, 2024 and 2023, respectively. The increase in cost as a percentage of revenue is primarily due to a 60% decrease in tons sold and a 23% decrease in average sales price per ton.
Previous wording
Drilling Services. Drilling services division cost of revenue, exclusive of depreciation and amortization expense, decreased $1.7 million, or 44%, from $3.9 million for the six months ended June 30, 2023 to $2.2 million for the six months ended June 30, 2024. As a percentage of revenue, our drilling services division cost of revenue, exclusive of depreciation and amortization expense of $1.5 million and $2.4 million, for the six months ended June 30, 2024 and 2023, respectively, was 183% and 93% for the six months ended June 30, 2024 and 2023. The increase is primarily due to a decline in utilization of our directional drilling services, resulting in a higher ratio of fixed costs to variable costs.
Current wording
Drilling Services. Drilling services division cost of revenue, exclusive of depreciation and amortization expense, decreased $2.4 million, or 39%, from $6.1 million for the nine months ended September 30, 2023 to $3.7 million for the nine months ended September 30, 2024. As a percentage of revenue, our drilling services division cost of revenue, exclusive of depreciation and amortization expense of $2.1 million and $3.5 million, for the nine months ended September 30, 2024 and 2023, respectively, was 132% and 94% for the nine months ended September 30, 2024 and 2023. The increase is primarily due to a decline in utilization of our directional drilling services, resulting in a higher ratio of fixed costs to variable costs.
Previous wording
Other Services. Other services division cost of revenue, exclusive of depreciation and amortization expense, increased $0.9 million, or 10%, from $9.4 million for the six months ended June 30, 2023 to $10.3 million for the six months ended June 30, 2024. As a percentage of revenue, cost of revenue, exclusive of depreciation and amortization expense of $1.9 million and $4.5 million for the six months ended June 30, 2024 and 2023, respectively, was 77% and 71% for the six months ended June 30, 2024 and 2023, respectively. The increase as a percentage of revenue is primarily due to a decrease in utilization for our equipment rental business, resulting in a higher ratio of fixed costs to variable costs.
Current wording
Other Services. Other services division cost of revenue, exclusive of depreciation and amortization expense, increased $1.4 million, or 10%, from $14.2 million for the nine months ended September 30, 2023 to $15.6 million for the nine months ended September 30, 2024. As a percentage of revenue, cost of revenue, exclusive of depreciation and amortization expense of $2.6 million and $6.3 million for the nine months ended September 30, 2024 and 2023, respectively, was 77% and 74% for the nine months ended September 30, 2024 and 2023, respectively. The increase as a percentage of revenue is primarily due to a decrease in utilization for our equipment rental business, resulting in a higher ratio of fixed costs to variable costs.
Previous wording
Selling, General and Administrative Expenses. Selling, general and administrative expenses represent the costs associated with managing and supporting our operations. SG&A expense increased $87.6 million, or 468%, to $106.3 million for the six months ended June 30, 2024 from $18.7 million for the six months ended June 30, 2023 primarily due to an increase in the provision for expected credit losses in connection with the Settlement Agreement with PREPA. The table below presents a breakdown of SG&A expenses for the periods indicated (in thousands):
Current wording
Selling, General and Administrative Expenses. Selling, general and administrative expenses represent the costs associated with managing and supporting our operations. SG&A expense increased $85.8 million, or 294%, to $115.0 million for the nine months ended September 30, 2024 from $29.2 million for the nine months ended September 30, 2023 primarily due to an increase in the provision for expected credit losses in connection with the Settlement Agreement with PREPA. The table below presents a breakdown of SG&A expenses for the periods indicated (in thousands):
Previous wording
b. The Company recognized an $89.2 million charge in relation to the Settlement Agreement with PREPA.
Current wording
b. The Company recognized an $89.2 million charge in relation to the Settlement Agreement with PREPA during the nine months ended September 30, 2024.
Showing the first 40 of 72 pairs. Open the source sections for the rest.
Rearranged current paragraphs (2)
Current report — wording carried from elsewhere
December 31, 2023 and corresponding liabilities of $43.3 million at September 30, 2024 and $60.6 million at December 31, 2023. Our unrestricted cash balances were $4.2 million and $16.6 million at September 30, 2024 and December 31, 2023, respectively.
Current report — wording carried from elsewhere
We have increased our 2024 capital expenditure estimate to approximately $23.0 million from the previously planned 2024 capital budget of $12.0 million as a result of the receipt of the first installment payment from PREPA in the amount of
Rearranged previous paragraphs (2)
Previous report — wording carried elsewhere
b. The Company recognized an $89.2 million charge in relation to the Settlement Agreement with PREPA.
Previous report — wording carried elsewhere
As we pursue our business and financial strategy, we regularly consider which capital resources are available to meet our future financial obligations and liquidity requirement. We believe that our cash on hand, the settlement proceeds under the