Vantage Drilling International Reports Third Quarter Results for 2018

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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