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Vantage Drilling International Reports Third Quarter Results for 2017

HOUSTON, Nov. 07, 2017 (GLOBE NEWSWIRE) — Vantage Drilling International (“Vantage” or the “Company”) reported a net loss of approximately $40.1 million or $8.01 per share for the three months ended September 30, 2017 as compared to a net loss of $41.5 million or $8.31 per share for the three months ended September 30, 2016.

Vantage continued to deliver solid operating results with rig uptime of 99% and revenue efficiency of 101%. At the end of the quarter, we began the mobilization of the Platinum Explorer to offshore India under a three year contract. The reactivation was ahead of schedule and under budget.

As of September 30, 2017, Vantage had approximately $198.6 million of available cash. Uses of cash during the quarter included, among other things, debt service costs, non-recurring professional fees related to litigation and arbitration matters and the re-activation of the Platinum Explorer

Ihab Toma, CEO, commented, “I am pleased to report that all our jackups have been deployed and that we have ended the quarter with the Platinum Explorer on its way to a three year contract for ONGC, in India. The re-activation of the Platinum Explorer was an extraordinary achievement, with all of our departments working in sync and with a clear objective. As a result, we have maintained our strong liquidity position, noting that the remaining expenditures associated with the Platinum Explorer deployment should be mostly offset by the collection of the contractual mobilization fee.”

Vantage, a Cayman Islands exempted company, is an offshore drilling contractor, with a fleet of three ultra-deepwater drillships, four premium jackup drilling rigs, and one standard jackup drilling rig. Vantage’s primary business is to contract drilling units, related equipment and work crews primarily on a dayrate basis to drill oil and natural gas wells globally for major, national and large independent oil and natural gas companies. Vantage also provides construction supervision services for, and will operate and manage, drilling units owned by others.

The information above includes forward-looking statements within the meaning of the Securities Act of 1933 and the Securities Exchange Act of 1934. These forward-looking statements are subject to certain risks, uncertainties and assumptions identified above or as disclosed from time to time in the company’s filings with the Securities and Exchange Commission. As a result of these factors, actual results may differ materially from those indicated or implied by such forward-looking statements.  Vantage disclaims any intention or obligation to update publicly or revise such statements, whether as a result of new information, future events or otherwise.

Public & Investor Relations Contact:

Thomas J. Cimino
Chief Financial Officer
Vantage Drilling International
(281) 404-4700

 
 
Vantage Drilling International
Consolidated Statement of Operations
(In thousands, except per share data)
(Unaudited)
 
    Successor     Predecessor
    Three Months Ended September 30,   Nine Months Ended September 30, 2017   Period from February 10, 2016 to September 30, 2016     Period from January 1, 2016 to February 10, 2016
      2017       2016          
Revenue                      
Contract drilling services   $   51,831     $   34,755     $   137,672     $   99,715       $   20,891  
Management fees       342         993         1,148         3,664           752  
Reimbursables       5,523         4,194         14,188         14,860           1,897  
Total revenue       57,696         39,942         153,008         118,239           23,540  
Operating costs and expenses                      
Operating costs       49,848         30,983         119,030         93,387           25,213  
General and administrative       6,949         10,128         29,929         27,991           2,558  
Depreciation       18,538         18,977         55,531         49,434           10,696  
Total operating costs and expenses       75,335         60,088         204,490         170,812           38,467  
Loss from operations       (17,639 )       (20,146 )       (51,482 )       (52,573 )         (14,927 )
Other income (expense)                      
Interest income       231         11         587         26           3  
Interest expense and other financing charges (contractual interest of $23,219 for the period from January 1, 2016 to February 10, 2016)       (19,258 )       (18,722 )       (57,180 )       (48,144 )         (1,728 )
Other, net       858         669         2,073         987           (69 )
Reorganization items       —         35         —         (606 )         (452,919 )
Bargain purchase gain       —         —         1,910         —           —  
Total other expense       (18,169 )       (18,007 )       (52,610 )       (47,737 )         (454,713 )
Loss before income taxes       (35,808 )       (38,153 )       (104,092 )       (100,310 )         (469,640 )
Income tax provision       4,260         3,373         9,067         5,978           2,371  
Net loss       (40,068 )       (41,526 )       (113,159 )       (106,288 )         (472,011 )
Net loss attributable to noncontrolling interests       —         —         —         —           (969 )
Net loss attributable to VDI   $   (40,068 )   $   (41,526 )   $   (113,159 )   $   (106,288 )     $   (471,042 )
Net loss per share, basic and diluted   $   (8.01 )   $   (8.31 )   $   (22.63 )   $   (21.26 )        N/A   
Weighted average successor ordinary shares outstanding, basic and diluted       5,000         5,000         5,000         5,000          N/A   
     
       
       
       
Vantage Drilling International      
Supplemental Operating Data      
(Unaudited, in thousands, except percentages)      
       
    Successor     Predecessor
    Three Months Ended September 30,   Nine Months Ended September 30, 2017   Period from February 10, 2016 to September 30, 2016     Period from January 1, 2016 to February 10, 2016
      2017       2016          
Operating costs and expenses                      
Jackups   $   19,764     $   8,836     $   52,660     $   29,555       $   5,975  
Deepwater       23,754         16,045         48,719         44,563           15,550  
Operations support       3,158         2,645         9,441         7,456           2,219  
Reimbursables       3,172         3,457         8,210         11,813           1,469  
    $   49,848     $   30,983     $   119,030     $   93,387       $   25,213  
                       
Utilization                      
Jackups     93.8 %     25.6 %     76.4 %     43.4 %       53.6 %
Deepwater     33.3 %     33.1 %     33.2 %     33.2 %       33.3 %

 

 
 
Vantage Drilling International
Consolidated Balance Sheet
(In thousands, except share and par value information)
(Unaudited)
         
         
    September 30,
2017
  December 31,
2016
ASSETS        
Current assets        
Cash and cash equivalents   $   198,637     $   231,727  
Trade receivables       36,103         20,850  
Inventory       43,675         45,206  
Prepaid expenses and other current assets       16,158         12,423  
Total current assets       294,573         310,206  
Property and equipment        
Property and equipment       904,327         902,241  
Accumulated depreciation       (123,215 )       (67,713 )
Property and equipment, net       781,112         834,528  
Other assets       22,384         15,694  
Total assets   $   1,098,069     $   1,160,428  
         
LIABILITIES AND SHAREHOLDERS’ EQUITY        
Current liabilities        
Accounts payable   $   46,182     $   35,283  
Accrued liabilities       20,073         18,448  
Current maturities of long-term debt       4,430         1,430  
Total current liabilities       70,685         55,161  
Long–term debt, net of discount and financing costs of $68,564 and $105,568       904,084         867,372  
Other long-term liabilities       9,899         11,335  
Commitments and contingencies        
Shareholders’ equity        
Ordinary shares, $0.001 par value, 50 million shares authorized; 5,000,053 shares issued and outstanding       5         5  
Additional paid-in capital       373,972         373,972  
Accumulated deficit        (260,576 )       (147,417 )
Total shareholders’ equity       113,401         226,560  
Total liabilities and shareholders’ equity   $   1,098,069     $   1,160,428  
         

 

               
Vantage Drilling International
Consolidated Statement of Cash Flows
(In thousands)
(Unaudited)
               
    Successor     Predecessor
    Nine Months Ended September 30, 2017   Period from February 10, 2016 to September 30, 2016     Period from January 1, 2016 to February 10, 2016
CASH FLOWS FROM OPERATING ACTIVITIES              
Net loss   $   (113,159 )   $   (106,288 )     $   (472,011 )
Adjustments to reconcile net loss to net cash provided by (used in) operating activities:              
Depreciation expense       55,531         49,434           10,696  
Amortization of debt financing costs       351         310           —  
Amortization of debt discount       36,653         31,075           —  
Amortization of contract value       3,095         —           —  
PIK interest on the Convertible Notes       5,692         4,822           —  
Reorganization items       —         —           430,210  
Share-based compensation expense       2,882         76           —  
Gain on bargain purchase       (1,910 )       —           —  
Deferred income tax benefit       (3,489 )       (2,660 )         —  
Loss on disposal of assets       191         634           —  
Changes in operating assets and liabilities, net of businesses acquired:              
Restricted cash       —         1,000           (1,000 )
Trade receivables       (15,253 )       53,405           (3,575 )
Inventory       1,531         (1,856 )         223  
Prepaid expenses and other current assets       (1,685 )       (47 )         6,893  
Other assets       5,947         (1,823 )         941  
Accounts payable       10,899         2,136           (14,890 )
Accrued liabilities and other long-term liabilities       (4,688 )       (26,935 )         21,148  
Net cash (used in) provided by operating activities       (17,412 )       3,283           (21,365 )
CASH FLOWS FROM INVESTING ACTIVITIES              
Additions to property and equipment       (1,606 )       (10,107 )         116  
Cash paid for Vantage 260 acquisition       (13,000 )       —           —  
Net cash (used in) provided by investing activities       (14,606 )       (10,107 )         116  
CASH FLOWS FROM FINANCING ACTIVITIES              
Repayment of long-term debt       (1,072 )       (1,072 )         (7,000 )
Proceeds from issuance of 10% Second Lien Notes       —         —           75,000  
Debt issuance costs       —         (51 )         (1,125 )
Net cash (used in) provided by financing activities       (1,072 )       (1,123 )         66,875  
Net (decrease) increase in cash and cash equivalents       (33,090 )       (7,947 )         45,626  
Cash and cash equivalents—beginning of period       231,727         249,046           203,420  
Cash and cash equivalents—end of period   $   198,637     $   241,099       $   249,046