Flotek Industries Inc. (NYSE: FTK) said work on its 400-megawatt power generation project at Puerto Rico’s Aguirre Power Plant has been halted following a directive from the Financial Oversight and Management Board for Puerto Rico.
The oversight board voted to direct the Puerto Rico Electric Power Authority (PREPA) to terminate the 10-year contract with Flotek, which had been in effect since August 3. The board raised questions about the authorization of certain signatures associated with the agreement, despite the contract having been vetted through the Third-Party Procurement Office prior to Flotek’s involvement.
PREPA issued a directive on Sunday requiring all consortium parties, including Flotek, to immediately halt work pending further evaluation. As of Monday, Flotek had not received a formal notice of termination, according to the company’s disclosure. The project, which involves the supply of power-generation equipment and Flotek’s PWRtek gas-conditioning, distribution, and real-time monitoring systems, remains in limbo while contractual conditions are reviewed.
Flotek also noted that a firm with a short position in its shares published a report alleging concerns about its business on Sunday. The company filed an 8-K with the U.S. Securities and Exchange Commission to update the market on the contract status.
Despite the uncertainty surrounding the Puerto Rico project, Flotek maintained its full-year 2026 financial guidance, excluding any potential contribution from the contract. The company targets revenue of $340 million to $350 million and adjusted EBITDA of $47 million to $51 million for the year.
The project’s future hinges on resolving the contract matter, meeting financing and bonding requirements, and obtaining necessary governmental and regulatory approvals.
