Vantage Drilling Company Reports Second Quarter 2012 Results

HOUSTON, TX–(Marketwire/AsiaNet Pakistan – Jul 30, 2012) –  Vantage Drilling Company (“Vantage”) (NYSE MKT: VTG) reports a net loss of $10.0 million or ($0.03) per diluted share for the three months ended June 30, 2012 as compared to a net loss of $40.1 million or ($0.14) per diluted share for the three months ended June 30, 2011.

For the six months ended June 30, 2012, Vantage reports a net loss of $11.2 million or ($0.04) per diluted shares as compared to a net loss of $58.7 million or ($0.20) per diluted shares for the six months ended June 30, 2011.

In April 2012, we acquired the Titanium Explorer and have mobilized the vessel to the United States Gulf of Mexico where it is currently undergoing customer acceptance testing. The acquisition has been financed with the proceeds from the $775.0 million senior notes offering. The notes were priced at 108% of par, resulting in total proceeds to the Company in excess of $820.0 million, net of offering fees and expenses. In connection with certain pre-commencement activities of the Titanium Explorer, we recorded approximately $2.4 million of project costs as operating expenses for the three months ended June 30, 2012.

Paul Bragg, Chairman and Chief Executive Officer, commented, “We are pleased to announce another strong quarter from operations, with the jackups achieving in excess of 99% productive time and the Platinum Explorer, while out of service for the scheduled 10 days of equipment upgrades, otherwise achieved productive time in excess of 99%. Following the acquisition of the Titanium Explorer, the drillship mobilized to the US Gulf of Mexico on-time, completed coast guard inspections, and continues to progress customer acceptance.”

Vantage, a Cayman Islands exempted company, is an offshore drilling contractor, with an owned fleet of four Baker Marine Pacific Class 375 ultra-premium jackup drilling rigs and two ultra-deepwater drillships, the Platinum Explorer and the Titanium Explorer, as well as an additional ultra-deepwater drillship, the Tungsten Explorer, now under construction. 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. Vantage also provides construction supervision services for, and will operate and manage, drilling units owned by others. Through its fleet of seven owned and managed drilling units, Vantage is a provider of offshore contract drilling services globally to major, national and large independent oil and natural gas companies.

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 Drilling Company 
Consolidated Statement of Operations 
(In thousands, except per share amounts) 
(Unaudited) 
             
  Three Months Ended
June 30,
  Six Months Ended
June 30,
 
  2012  2011  2012  2011 
Revenues                
 Contract drilling services $99,683  $97,977  $204,681  $184,731 
 Management fees  956   3,171   3,678   7,214 
 Reimbursables  4,486   19,946   28,615   53,780 
  Total revenues  105,125   121,094   236,974   245,725 
Operating costs and expenses                
 Operating costs  50,030   65,433   119,354   142,826 
 General and administrative  6,704   7,402   11,964   14,249 
 Depreciation  16,372   16,025   32,944   32,137 
  Total operating costs and expenses  73,106   88,860   164,262   189,212 
Income from operations  32,019   32,234   72,712   56,513 
Other income (expense)                
 Interest income  21   22   33   60 
 Interest expense and other financing charges  (36,172)  (39,350)  (72,935)  (80,892)
 Loss on debt extinguishment     (25,196)     (25,196)
 Other income, net  216   (22)  861   1,458 
  Total other income (expense)  (35,935)  (64,546)  (72,041)  (104,570)
Income (loss) before income taxes  (3,916)  (32,312)  671   (48,057)
Income tax provision  6,061   7,758   11,827   10,667 
Net loss $(9,977) $(40,070) $(11,156) $(58,724)
                 
Loss per share                
 Basic $(0.03) $(0.14) $(0.04) $(0.20)
 Diluted $(0.03) $(0.14) $(0.04) $(0.20)
                  
                  
Vantage Drilling Company 
Consolidated Balance Sheet 
(In thousands, except par value information) 
      
 June 30,  December 31, 
 2012  2011 
 (Unaudited)    
ASSETS       
Current assets       
 Cash and cash equivalents$123,709  $110,031 
 Restricted cash 5,878   7,028 
 Trade receivables 78,221   100,908 
 Inventory 33,631   24,376 
 Prepaid expenses and other current assets 13,044   16,909 
  Total current assets 254,483   259,252 
Property and equipment       
 Property and equipment 2,789,126   1,913,596 
 Accumulated depreciation (140,900)  (108,521)
  Property and equipment, net 2,648,226   1,805,075 
Other assets       
 Other assets 86,375   58,173 
  Total other assets 86,375   58,173 
Total assets$2,989,084  $2,122,500 
        
LIABILITIES AND SHAREHOLDERS’ EQUITY       
Current liabilities       
 Accounts payable$56,843  $46,362 
 Accrued liabilities 140,111   103,809 
  Total current liabilities 196,954   150,171 
Long-term debt, net of premium (discount) of $22,666 and ($38,572) 2,082,666   1,246,428 
Other long-term liabilities 20,054   29,755 
Commitments and contingencies       
Shareholders’ equity       
 Preferred shares, $0.001 par value, 10,000 shares authorized; none issued or outstanding     
 Ordinary shares, $0.001 par value, 400,000 shares authorized; 292,350 and 291,241 shares issued and outstanding 292   291 
 Additional paid-in capital 864,921   860,502 
 Accumulated deficit (175,803)  (164,647)
  Total shareholders’ equity 689,410   696,146 
Total liabilities and shareholders’ equity$2,989,084  $2,122,500 
        
        

 

Vantage Drilling Company 
Consolidated Statement of Cash Flows 
(In thousands) 
(Unaudited) 
  
 Six Months Ended June 30, 
 2012  2011 
CASH FLOWS FROM OPERATING ACTIVITIES       
Net loss$(11,156) $(58,724)
Adjustments to reconcile net loss to net cash provided by (used in) operating activities:       
 Depreciation expense 32,944   32,137 
 Amortization of debt financing costs 7,438   3,888 
 Non-cash loss on debt extinguishment    3,532 
 Share-based compensation expense 4,420   2,415 
 Accretion of long-term debt    2,582 
 Amortization of debt discount (premium) (762)  5,415 
 Deferred income tax expense (benefit) 1,860   (128)
 Loss on disposal of assets 249    
Changes in operating assets and liabilities:       
 Restricted cash 1,150   22,801 
 Trade receivables (10,977)  (36,303)
 Inventory (9,256)  (2,396)
 Prepaid expenses and other current assets 1,476   4,130 
 Other assets 1,357   897 
 Accounts payable 10,481   9,394 
 Accrued liabilities 644   2,948 
  Net cash provided by (used in) operating activities 29,868   (7,412)
CASH FLOWS FROM INVESTING ACTIVITIES       
 Additions to property and equipment (816,722)  (116,876)
  Net cash used in investing activities (816,722)  (116,876)
CASH FLOWS FROM FINANCING ACTIVITIES       
 Proceeds from issuance of senior secured notes, including issue premiums of $62,000 and $15,750 837,000   240,750 
 Repayment of long-term debt    (109,716)
 Debt issuance costs (36,468)  (12,693)
  Net cash provided by financing activities 800,532   118,341 
  Net increase (decrease) in cash and cash equivalents 13,678   (5,947)
 Cash and cash equivalents — beginning of period 110,031   120,443 
 Cash and cash equivalents — end of period$123,709  $114,496 
        

Contact Information

Public & Investor Relations Contact:
Paul A. Bragg
Chairman & Chief Executive Officer
Vantage Drilling Company
(281) 404-4700

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