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
[phone]

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