Vantage Drilling International Reports First Quarter Results for 2017

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| Source: Vantage Drilling International

HOUSTON, TX--(Marketwired - May 4, 2017) - Vantage Drilling International ("Vantage" or the "Company") reported a net loss of approximately $36.5 million or $7.30 per share for the three months ended March 31, 2017 as compared to a net loss of $29.0 million or $5.81 per share for the Successor period from February 10, 2016 through March 31, 2016 and a net loss of $471.0 million for the period from January 1, 2016 to February 10, 2016 for the Predecessor Company. The weighted-average shares outstanding for the three months ended March 31, 2017 and for the period from February 10, 2016 through March 31, 2016 was 5,000,053. As a wholly-owned subsidiary, the Predecessor did not have a comparable outstanding ordinary shares.

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.

As of March 31, 2017, Vantage had approximately $227.6 million of available cash as compared to $231.7 million as of December 31, 2016. Additionally, Vantage had $22.6 million available for issuance of letters of credit under its revolving letter of credit facility at the end of the quarter. Vantage also delivered operational rig uptime of 99% together with revenue efficiency of 101%. Ihab Toma, CEO, commented, "We are happy to report another successful quarter of superior operational performance combined with further reducing costs while maintaining our committed sharp focus on safety. Additionally, with the completion of the Vantage 260 acquisition in early April, the extension of the Aquamarine Driller contract, and the reactivation of both the Topaz Driller and Sapphire Driller set for May, we continue to build backlog and benefit from positive economies of scale, whilst preserving our strong balance sheet."

Vantage Drilling International, 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 jack-up 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 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.

   
Vantage Drilling International  
Consolidated Statement of Operations  
(In thousands, except per share data)  
(Unaudited)  
    Successor     Predecessor  
    Three Months Ended March 31, 2017     Period from February 10, 2016 to March 31, 2016     Period from January 1, 2016 to February 10, 2016  
Revenue                        
  Contract drilling services   $ 38,056     $ 24,059     $ 20,891  
  Management fees     401       959       752  
  Reimbursables     3,592       4,768       1,897  
    Total revenue     42,049       29,786       23,540  
Operating costs and expenses                        
  Operating costs     28,998       27,439       25,213  
  General and administrative     11,479       9,168       2,558  
  Depreciation     18,439       12,076       10,696  
    Total operating costs and expenses     58,916       48,683       38,467  
Loss from operations     (16,867 )     (18,897 )     (14,927 )
Other income (expense)                        
  Interest income     141       6       3  
  Interest expense and other financing charges (contractual interest of $23,219 for the period from January 1, 2016 to February 10, 2016)     (18,899 )     (10,650 )     (1,728 )
  Other, net     552       1,834       (69 )
  Reorganization items     -       (154 )     (452,919 )
    Total other expense     (18,206 )     (8,964 )     (454,713 )
Loss before income taxes     (35,073 )     (27,861 )     (469,640 )
Income tax provision     1,426       1,167       2,371  
Net loss     (36,499 )     (29,028 )     (472,011 )
Net loss attributable to noncontrolling interests     -       -       (969 )
Net loss attributable to VDI   $ (36,499 )   $ (29,028 )   $ (471,042 )
  Net loss per share, basic and diluted   $ (7.30 )   $ (5.81 )     N/A  
  Weighted average successor ordinary shares outstanding, basic and diluted     5,000       5,000       N/A  
                         
   
Vantage Drilling International  
Supplemental Operating Data  
(Unaudited, in thousands, except percentages)  
    Successor     Predecessor  
    Three Months Ended March 31, 2017     Period from February 10, 2016 to March 31, 2016     Period from January 1, 2016 to February 10, 2016  
Operating costs and expenses                        
Jackups   $ 12,862     $ 8,278     $ 5,975  
Deepwater     11,056       13,146       15,550  
Operations support     2,969       2,215       2,219  
Reimbursables     2,111       3,800       1,469  
    $ 28,998     $ 27,439     $ 25,213  
                         
Utilization                        
Jackups     50.0 %     60.0 %     53.6 %
Deepwater     33.3 %     33.3 %     33.3 %
                         
   
Vantage Drilling International  
Consolidated Balance Sheet  
(In thousands, except share and par value information)  
(Unaudited)  
             
    March 31,
2017
    December 31,
2016
 
ASSETS            
Current assets                
  Cash and cash equivalents   $ 227,592     $ 231,727  
  Trade receivables     19,643       20,850  
  Inventory     44,913       45,206  
  Prepaid expenses and other current assets     13,375       12,423  
    Total current assets     305,523       310,206  
Property and equipment                
  Property and equipment     904,397       902,241  
  Accumulated depreciation     (86,152 )     (67,713 )
    Property and equipment, net     818,245       834,528  
Other assets     15,599       15,694  
Total assets   $ 1,139,367     $ 1,160,428  
                 
LIABILITIES AND SHAREHOLDERS' EQUITY                
Current liabilities                
  Accounts payable   $ 36,951     $ 35,283  
  Accrued liabilities     22,896       18,448  
  Current maturities of long-term debt     4,430       1,430  
    Total current liabilities     64,277       55,161  
Long-term debt, net of discount and financing costs of $93,260 and $105,568     876,322       867,372  
Other long-term liabilities     8,707       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     (183,916 )     (147,417 )
    Total shareholders' equity     190,061       226,560  
Total liabilities and shareholders' equity   $ 1,139,367     $ 1,160,428  
                 
   
Vantage Drilling International  
Consolidated Statement of Cash Flows  
(In thousands)  
(Unaudited)  
                   
    Successor     Predecessor  
    Three Months Ended March 31, 2017     Period from February 10, 2016 to March 31, 2016     Period from January 1, 2016 to February 10, 2016  
CASH FLOWS FROM OPERATING ACTIVITIES                        
Net loss   $ (36,499 )   $ (29,028 )   $ (472,011 )
Adjustments to reconcile net loss to net cash provided by (used in) operating activities:                        
  Depreciation expense     18,439       12,076       10,696  
  Amortization of debt financing costs     117       76       -  
  Amortization of debt discount     12,191       6,847       -  
  PIK interest on the Convertible Notes     1,890       1,684       -  
  Reorganization items     -       -       430,210  
  Share-based compensation expense     780       -       -  
  Deferred income tax benefit     (1,789 )     (606 )     -  
  Loss on disposal of assets     -       144       -  
Changes in operating assets and liabilities:                        
  Restricted cash     -       -       (1,000 )
  Trade receivables     1,207       22,629       (3,575 )
  Inventory     293       (221 )     223  
  Prepaid expenses and other current assets     (951 )     (4,954 )     6,893  
  Other assets     1,434       368       941  
  Accounts payable     1,668       6,708       (14,890 )
  Accrued liabilities and other long-term liabilities     (401 )     (7,485 )     21,148  
    Net cash provided by (used in) operating activities     (1,621 )     8,238       (21,365 )
CASH FLOWS FROM INVESTING ACTIVITIES                        
  Additions to property and equipment     (2,156 )     (7,674 )     116  
    Net cash provided by (used in) investing activities     (2,156 )     (7,674 )     116  
CASH FLOWS FROM FINANCING ACTIVITIES                        
  Repayment of long-term debt     (358 )     (358 )     (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     (358 )     (409 )     66,875  
    Net increase (decrease) in cash and cash equivalents     (4,135 )     155       45,626  
  Cash and cash equivalents - beginning of period     231,727       249,046       203,420  
  Cash and cash equivalents - end of period   $ 227,592     $ 249,201     $ 249,046