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Vantage Drilling International Reports Fourth Quarter and Full-Year 2017 Results

HOUSTON, March 28, 2018 (GLOBE NEWSWIRE) — Vantage Drilling International (“Vantage” or the “Company”) reported a net loss of approximately $36.6 million or $7.33 per share for the three months ended December 31, 2017 as compared to a net loss of $41.1 million or $8.23 per share for the three months ended December 31, 2016.

For the year ended December 31, 2017, Vantage reported a net loss of approximately $149.8 million or $29.96 per share. For the period from February 10, 2016 to December 31, 2016, Vantage reported a net loss of approximately $147.4 million or $29.48 per share and the Predecessor for the period January 1, 2016 to February 10, 2016 reported a net loss of approximately $471.0 million.

Vantage’s operating results for the fourth quarter reflected rig uptime of 98% and revenue efficiency of 99%.

As of December 31, 2017, Vantage had approximately $195.5 million of available cash. Uses of cash during the quarter included, among other things, debt service costs and the re-activation of the Platinum Explorer.  

Ihab Toma, CEO, commented, “I am pleased to report that with the commencement of the Platinum Explorer three year contract for ONGC, in India, during the fourth quarter, we successfully reactivated three of our four previously stacked units during a difficult year for the offshore drilling industry and now have six of our seven premium assets working.”

Upon emergence from the Company’s Chapter 11 restructuring on February 10, 2016, Vantage adopted fresh-start accounting, which resulted in the Company becoming a new entity for financial reporting purposes.  References to “Successor” relate to the financial position and results of operations of the reorganized Vantage as of and subsequent to February 10, 2016. References to “Predecessor” refer to the financial position of Vantage as of and prior to February 10, 2016 and the results of operations prior to February 10, 2016. As a result of the application of fresh-start accounting and the effects of the implementation of our Plan of Reorganization, the financial statements on or after February 10, 2016 are not comparable with the financial statements prior to that date.

Vantage, a Cayman Islands exempted company, is an offshore drilling contractor, with a fleet of three ultra-deepwater drillships and four premium jackup drilling rigs. 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 independent oil and natural gas companies. Vantage also provides construction supervision services and preservation management 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
December 31,
  Year Ended
December 31, 2017
  Period from
February 10, 2016
to December 31,
2016
    Period from
January 1, 2016 to
February 10, 2016
 
     2017     2016           
Revenue                        
Contract drilling services   $ 52,881     $ 34,655     $ 190,553     $ 134,370       $ 20,891    
Management fees     307       410       1,456       4,074         752    
Reimbursables     6,650       5,344       20,837       20,204         1,897    
Total revenue     59,838       40,409       212,846       158,648         23,540    
Operating costs and expenses                        
Operating costs     42,638       29,635       161,668       123,022         25,213    
General and administrative     11,719       8,931       41,648       36,922         2,558    
Depreciation     18,394       18,486       73,925       67,920         10,696    
Total operating costs and expenses     72,751       57,052       277,241       227,864         38,467    
Loss from operations     (12,913 )     (16,643 )     (64,395 )     (69,216 )       (14,927 )  
Other income (expense)                        
Interest income     221       (8 )     808       18         3    
Interest expense and other financing charges (contractual interest of 
$23,219 for the period from January 1, 2016 to February 10, 2016)
    (19,261 )     (18,879 )     (76,441 )     (67,023 )       (1,728 )  
Other, net     428       145       2,501       1,132         (69 )  
Reorganization items           (774 )           (1,380 )       (452,919 )  
Bargain purchase gain                 1,910                  
Total other expense     (18,612 )     (19,516 )     (71,222 )     (67,253 )       (454,713 )  
Loss before income taxes     (31,525 )     (36,159 )     (135,617 )     (136,469 )       (469,640 )  
Income tax provision     5,101       4,970       14,168       10,948         2,371    
Net loss     (36,626 )     (41,129 )     (149,785 )     (147,417 )       (472,011 )  
Net loss attributable to noncontrolling interests                               (969 )  
Net loss attributable to VDI   $ (36,626 )   $ (41,129 )   $ (149,785 )   $ (147,417 )     $ (471,042 )  
Net loss per share, basic and diluted   $ (7.33 )   $ (8.23 )   $ (29.96 )   $ (29.48 )     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
December 31,
  Year Ended
December 31,
2017
  Period from
February 10,
2016 to
December 31,
2016
    Period from
January 1,
2016 to
February 10,
2016
 
     2017     2016           
Operating costs and expenses                        
Jackups   $ 19,623     $ 10,014     $ 72,283     $ 39,569       $ 5,975    
Deepwater     16,104       13,270       64,823       57,833         15,550    
Operations support     2,893       2,403       12,334       9,859         2,219    
Reimbursables     4,018       3,948       12,228       15,761         1,469    
    $ 42,638     $ 29,635     $ 161,668     $ 123,022       $ 25,213    
                         
Utilization                        
Jackups     99.5 %     39.5 %     82.0 %     42.3 %       53.6 %  
Deepwater     45.4 %     33.3 %     36.2 %     33.3 %       33.3 %  
 

 

 
Vantage Drilling International
Consolidated Balance Sheet
(In thousands, except share and par value information)
(Unaudited)
       
  December 31,
2017
  December 31,
2016
       
ASSETS      
Current assets      
Cash and cash equivalents $   195,455     $   231,727  
Trade receivables     45,379         20,850  
Inventory     43,955         45,206  
Prepaid expenses and other current assets     13,207         12,423  
Total current assets     297,996         310,206  
Property and equipment      
Property and equipment     904,584         902,241  
Accumulated depreciation     (141,393 )       (67,713 )
Property and equipment, net     763,191         834,528  
Other assets     21,935         15,694  
Total assets $   1,083,122     $   1,160,428  
       
LIABILITIES AND SHAREHOLDERS’ EQUITY      
Current liabilities      
Accounts payable $   39,666     $   35,283  
Accrued liabilities     25,117         18,448  
Current maturities of long-term debt     4,430         1,430  
Total current liabilities     69,213         55,161  
Long–term debt, net of discount and financing costs of $56,174 and $105,568     919,939         867,372  
Other long-term liabilities     17,195         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      (297,202 )       (147,417 )
Total shareholders’ equity     76,775         226,560  
Total liabilities and shareholders’ equity $   1,083,122     $   1,160,428  
       

 

 
Vantage Drilling International
Consolidated Statement of Cash Flows
(In thousands)
(Unaudited)
             
  Successor     Predecessor
  Year Ended
December 31, 2017
  Period from
February 10,
2016 to
December 31,
2016
    Period from
January 1, 2016 to
February 10, 2016
CASH FLOWS FROM OPERATING ACTIVITIES            
Net income (loss) $   (149,785 )   $   (147,417 )     $   (472,011 )
Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities:            
Depreciation expense     73,925         67,920           10,696  
Amortization of debt financing costs     468         427           —  
Amortization of debt discount     48,925         43,208           —  
Amortization of contract value     4,686         —           —  
PIK interest on the Convertible Notes     7,604         6,712           —  
Reorganization items     —         —           430,210  
Share-based compensation expense     3,997         402           —  
Gain on bargain purchase     (1,910 )       —           —  
Deferred income tax benefit     (1,964 )       (3,368 )         —  
Loss on disposal of assets     335         652           —  
Changes in operating assets and liabilities:            
Restricted cash     —         1,000           (1,000 )
Trade receivables     (24,529 )       53,447           (3,575 )
Inventory     1,251         (964 )         223  
Prepaid expenses and other current assets     1,267         2,790           6,893  
Other assets     2,638         (3,409 )         941  
Accounts payable     4,383         736           (14,890 )
Accrued liabilities and other long-term liabilities     8,836         (26,010 )         21,148  
Net cash provided by (used in) operating activities     (19,873 )       (3,874 )         (21,365 )
CASH FLOWS FROM INVESTING ACTIVITIES            
Additions to property and equipment     (2,224 )       (11,964 )         116  
Cash paid for Vantage 260 acquisition     (13,000 )       —           —  
Cash received for Vantage 260 sale     255         —           —  
Net cash provided by (used in) investing activities     (14,969 )       (11,964 )         116  
CASH FLOWS FROM FINANCING ACTIVITIES            
Repayment of long-term debt     (1,430 )       (1,430 )         (7,000 )
Proceeds from issuance of 10% Second Lien Notes     —         —           75,000  
Debt issuance costs     —         (51 )         (1,125 )
Net cash provided by (used in) financing activities     (1,430 )       (1,481 )         66,875  
Net increase (decrease) in cash and cash equivalents     (36,272 )       (17,319 )         45,626  
Cash and cash equivalents—beginning of period     231,727         249,046           203,420  
Cash and cash equivalents—end of period $   195,455     $   231,727       $   249,046