Flotek Industries Reports PREPA Contract Termination

What Happened
Flotek Industries, Inc. (FTK) announced in an 8-K filed Aug 19, 2026 that the Puerto Rico Electric Power Authority (PREPA) delivered formal notice on Aug 18, 2026 terminating the Power Purchase and Operating Agreement (PPOA), Contract No. 2026-P00107, effective immediately. Flotek had been assigned certain responsibilities under the PPOA (previously held by Enchanted Rock, LLC) with PREPA’s consent on July 31, 2026. PREPA cited two independent grounds for termination: (1) an event of default because the consortium failed to provide required performance security on time, and (2) the Financial Oversight and Management Board for Puerto Rico revoked its approval of the PPOA and directed PREPA to terminate.

Key Details

• Termination notice dated Aug 18, 2026; 8-K filed Aug 19, 2026.
• PREPA Contract originally dated June 10, 2026; assignment to Flotek consented July 31, 2026.
• Under the contract Flotek expected deployment of up to six pairs of smart conditioning/distribution skids (PWRtek) and up to 40 MW of primary generation as part of a 400 MW project.
• Projected annual revenue at full deployment was about $40 million and a potential 10‑year backlog of ≈$400 million.
• Flotek had not received any revenue or payments under the PREPA Contract and had not begun equipment deployment.
• The company states the termination does not affect its previously issued 2026 financial guidance.

Why It Matters
For investors, this removes a previously announced potential revenue opportunity (up to ~$40M/year, ~$400M over 10 years) from Flotek’s pipeline. However, the company had not recognized any revenue or started work on the project and says the termination does not change its 2026 guidance. The filing also notes PREPA’s stated contractual default and the Oversight Board’s revocation as the reasons for termination.