Vantage Drilling International Reports Third Quarter Results for 2018

HOUSTON, Nov. 02, 2018 (GLOBE NEWSWIRE) — Vantage Drilling International (“Vantage” or the “Company”) reported a net loss of approximately $26.1 million or $5.21 per share for the three months ended September 30, 2018 as compared to a net loss of $40.1 million or $8.01 per share for the three months ended September 30, 2017.

As of September 30, 2018, Vantage had approximately $183.5 million in cash, including $5 million of restricted cash, compared to $195.5 million at December 31, 2017. The Company generated $12.5 million in cash from operations year-to-date compared to net cash used in operations of $17.4 million for the comparable nine months in 2017. During the current year, cash outlays included, among other things, a $15 million down payment to acquire a jack-up rig and $6.6 million in progress payments for a managed pressure drilling (MPD) system to increase drillship marketability.

Ihab Toma, CEO, commented, “I am pleased to report another quarter of excellent operational results. Six of our seven assets worked during the quarter and produced a revenue efficiency of 99% and operational rig uptime of 97%. With contract drilling revenue increases of 14% and operating cost decreases of 13% from the comparable quarter, we continue to deliver on our commitment of superior performance, cost management and preserving our strong balance sheet.”

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)
 
    Three Months Ended September 30,   Nine Months Ended September 30,
    2018   2017   2018   2017
Revenue                
Contract drilling services   $ 59,034     $ 51,831     $ 165,813     $ 137,672  
Management fees     307       342       912       1,148  
Reimbursables     5,215       5,523       15,956       14,188  
Total revenue     64,556       57,696       182,681       153,008  
Operating costs and expenses                
Operating costs     43,307       49,883       128,943       119,244  
General and administrative     9,303       6,949       22,935       29,929  
Depreciation     17,638       18,538       53,217       55,531  
Total operating costs and expenses     70,248       75,370       205,095       204,704  
Loss from operations     (5,692 )     (17,674 )     (22,414 )     (51,696 )
Other income (expense)                
Interest income     533       231       974       587  
Interest expense and other financing charges     (19,439 )     (19,258 )     (58,122 )     (57,180 )
Other, net     53       893       (1,031 )     2,287  
Bargain purchase gain                       1,910  
Total other expense     (18,853 )     (18,134 )     (58,179 )     (52,396 )
Loss before income taxes     (24,545 )     (35,808 )     (80,593 )     (104,092 )
Income tax provision     1,515       4,260       8,698       9,067  
Net loss   $ (26,060 )   $ (40,068 )   $ (89,291 )   $ (113,159 )
Net loss per share, basic and diluted   $ (5.21 )   $ (8.01 )   $ (17.86 )   $ (22.63 )
Weighted average ordinary shares outstanding, basic and diluted     5,000       5,000       5,000       5,000  
 
 
Vantage Drilling International
Supplemental Operating Data
(Unaudited, in thousands, except percentages)
 
    Three Months Ended September 30,   Nine Months Ended September 30,
    2018   2017   2018   2017
Operating costs and expenses                
Jackups   $ 18,112     $ 19,764     $ 49,097     $ 52,655  
Deepwater     17,927       23,789       59,438       48,754  
Operations support     4,119       3,158       10,614       9,625  
Reimbursables     3,149       3,172       9,794       8,210  
    $ 43,307     $ 49,883     $ 128,943     $ 119,244  
                 
Utilization                
Jackups     98.5 %     93.8 %     90.9 %     76.4 %
Deepwater     65.7 %     33.3 %     61.1 %     33.2 %

Vantage Drilling International
Consolidated Balance Sheet
(In thousands, except share and par value information)
(Unaudited)
         
    September 30,
2018
  December 31,
2017
         
ASSETS        
Current assets        
Cash and cash equivalents   $ 178,549     $ 195,455  
Restricted cash     5,000        
Trade receivables     39,089       45,379  
Inventory     43,411       43,955  
Prepaid expenses and other current assets     16,748       13,207  
Total current assets     282,797       297,996  
Property and equipment        
Property and equipment     927,745       904,584  
Accumulated depreciation     (191,737 )     (141,393 )
Property and equipment, net     736,008       763,191  
Other assets     14,471       21,935  
Total assets   $ 1,033,276     $ 1,083,122  
         
LIABILITIES AND SHAREHOLDERS’ EQUITY        
Current liabilities        
Accounts payable   $ 40,774     $ 39,666  
Accrued liabilities     20,032       25,117  
Current maturities of long-term debt           4,430  
Total current liabilities     60,806       69,213  
Long–term debt, net of discount and financing costs of $18,802 and $56,174     959,750       919,939  
Other long-term liabilities     25,236       17,195  
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     (386,493 )     (297,202 )
Total shareholders’ equity     (12,516 )     76,775  
Total liabilities and shareholders’ equity   $ 1,033,276     $ 1,083,122  

Vantage Drilling International
Consolidated Statement of Cash Flows
(In thousands)
(Unaudited)
 
    Nine Months Ended September 30,
    2018   2017
CASH FLOWS FROM OPERATING ACTIVITIES        
Net loss   $ (89,291 )   $ (113,159 )
Adjustments to reconcile net loss to net cash provided by (used in) operating activities:        
Depreciation expense     53,217       55,531  
Amortization of debt financing costs     351       351  
Amortization of debt discount     37,021       36,653  
Amortization of contract value     4,721       3,095  
PIK interest on the Convertible Notes     5,735       5,692  
Share-based compensation expense     7,777       2,882  
Bargain purchase gain           (1,910 )
Deferred income tax benefit (expense)     1,874       (3,489 )
(Gain) loss on disposal of assets     (1,313 )     191  
Changes in operating assets and liabilities:        
Trade receivables     6,290       (15,253 )
Inventory     544       1,531  
Prepaid expenses and other current assets     (5,591 )     (1,685 )
Other assets     1,230       5,947  
Accounts payable     (3,245 )     10,899  
Accrued liabilities and other long-term liabilities     (6,839 )     (4,688 )
Net cash provided by (used in) operating activities     12,481       (17,412 )
CASH FLOWS FROM INVESTING ACTIVITIES        
Additions to property and equipment     (8,275 )     (1,606 )
Down payment on rig purchase     (15,000 )      
Cash paid for Vantage 260 acquisition           (13,000 )
Net proceeds from sale of Vantage 260     4,703        
Net cash used in investing activities     (18,572 )     (14,606 )
CASH FLOWS FROM FINANCING ACTIVITIES        
Repayment of long-term debt     (5,815 )     (1,072 )
Net cash used in financing activities     (5,815 )     (1,072 )
Net decrease in cash and cash equivalents     (11,906 )     (33,090 )
Unrestricted and restricted cash and cash equivalents—beginning of period     195,455       231,727  
Unrestricted and restricted cash and cash equivalents—end of period   $ 183,549     $ 198,637  
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