Vantage Drilling Company Reports Fourth Quarter and Full Year 2013 Results

Marketwired

HOUSTON, TX--(Marketwired - Feb 28, 2014) - Vantage Drilling Company ("Vantage" or the "Company") (NYSE MKT: VTG) reports record net income for the three months ended December 31, 2013 of $30.3 million or $0.09 per diluted share as compared to a net loss of $11.5 million or ($0.04) per diluted share excluding approximately $122.1 million of charges for the early retirement of debt, for the three months ended December 31, 2012. Including the charges for the early retirement of debt in the prior year, the company reported a net loss of $133.6 million or ($0.45) per diluted share.

For the twelve months ended December 31, 2013, Vantage reports net income of approximately $16.5 million or $0.05 per diluted share excluding approximately $98.3 million of charges for the early retirement of debt as compared to a net loss of $20.7 million or ($0.07) per diluted share for the twelve months ended December 31, 2012, excluding approximately $124.6 million of charges for the early retirement of debt. Including the charges for the early retirement of debt, the company reported losses of $81.8 million or ($0.27) per diluted share and $145.3 million or ($0.50) per diluted share for the twelve months ended December 31, 2013 and 2012, respectively.

Paul Bragg, Chairman and Chief Executive Officer, commented, "We are pleased to announce record revenue, EBITDA and net income for the quarter with exceptional operating performance of all seven of our completed rigs. These exceptional results are due not only to the quality of our fleet, but also to the dedicated efforts of our workforce."

Vantage, a Cayman Islands exempted company, is an offshore drilling contractor, with an owned fleet of three ultra-deepwater drillships, the Platinum Explorer, the Titanium Explorer and the Tungsten Explorer, as well as an additional ultra-deepwater drillship, the Cobalt Explorer, now under construction, and four Baker Marine Pacific Class 375 ultra-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. Vantage also provides construction supervision services for, and will operate and manage, drilling units owned by others. Through its fleet of seven owned 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)  
             
    Three Months Ended December 31,     Twelve Months Ended December 31,  
    2013     2012     2013     2012  
    (Unaudited)     (Unaudited)              
Revenues                                
  Contract drilling services   $ 216,775     $ 113,696     $ 666,129     $ 423,897  
  Management fees     5,111       1,961       14,622       6,605  
  Reimbursables     16,651       7,307       51,309       40,970  
    Total revenues     238,537       122,964       732,060       471,472  
Operating costs and expenses                                
  Operating costs     99,349       58,731       335,915       230,089  
  General and administrative     9,240       7,416       32,612       26,002  
  Depreciation     31,882       19,228       106,609       68,747  
    Total operating costs and expenses     140,471       85,375       475,136       324,838  
Income from operations     98,066       37,589       256,924       146,634  
Other income (expense)                                
  Interest income     26       42       221       90  
  Interest expense and other financing charges     (55,853 )     (44,600 )     (214,149 )     (149,118 )
  Loss on debt extinguishment     -       (122,071 )     (98,327 )     (124,599 )
  Other, net     (574 )     (205 )     1,621       595  
    Total other income (expense)     (56,401 )     (166,834 )     (310,634 )     (273,032 )
Income (loss) before income taxes     41,665       (129,245 )     (53,710 )     (126,398 )
Income tax provision     11,349       4,365       28,115       18,906  
Net income (loss)   $ 30,316     $ (133,610 )   $ (81,825 )   $ (145,304 )
                                 
Earnings (loss) per share                                
  Basic   $ 0.10     $ (0.45 )   $ (0.27 )   $ (0.50 )
  Diluted   $ 0.09     $ (0.45 )   $ (0.27 )   $ (0.50 )
                                 
                                 
                                 
Vantage Drilling Company  
Supplemental Operating Data  
(Unaudited, in thousands, except percentages)  
                         
    Three Months Ended December 31,     Twelve Months Ended December 31,  
    2013     2012     2013     2012  
Operating costs and expenses                                
  Jackups   $ 21,288     $ 22,575     $ 89,253     $ 87,724  
  Deepwater     56,092       24,010       164,775       82,044  
  Operations support     8,108       5,695       33,267       23,449  
  Reimbursables     13,861       6,451       48,620       36,872  
    $ 99,349     $ 58,731     $ 335,915     $ 230,089  
                                 
Utilization                                
  Jackups     89.4 %     88.3 %     87.1 %     96.7 %
  Deepwater     90.3 %     97.2 %     93.3 %     96.4 %
                                 
                                 
                                 
Vantage Drilling Company  
Consolidated Balance Sheet  
(In thousands, except par value information)  
             
    December 31,  
    2013     2012  
ASSETS            
Current assets                
  Cash and cash equivalents   $ 54,686     $ 502,726  
  Restricted cash     2,125       3,515  
  Trade receivables     168,654       119,452  
  Inventory     55,804       37,944  
  Prepaid expenses and other current assets     23,717       25,208  
    Total current assets     304,986       688,845  
Property and equipment                
  Property and equipment     3,472,407       2,893,837  
  Accumulated depreciation     (281,759 )     (176,331 )
    Property and equipment, net     3,190,648       2,717,506  
Other assets                
  Investment in joint venture     32,482       31,320  
  Other assets     100,027       92,536  
    Total other assets     132,509       123,856  
Total assets   $ 3,628,143     $ 3,530,207  
                 
LIABILITIES AND SHAREHOLDERS' EQUITY                
Current liabilities                
  Accounts payable   $ 66,860     $ 50,909  
  Accrued liabilities     97,481       123,484  
  Current maturities of long-term debt and revolving credit agreement     63,500       31,250  
  Total current liabilities     227,841       205,643  
Long-term debt, net of discount of $39,325 and $11,940     2,852,050       2,710,559  
Other long-term liabilities     42,796       45,520  
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, 500,000 shares authorized; 304,101 and 299,647 shares issued and outstanding     304       299  
  Additional paid-in capital     896,928       878,137  
  Accumulated deficit     (391,776 )     (309,951 )
    Total shareholders' equity     505,456       568,485  
Total liabilities and shareholders' equity   $ 3,628,143     $ 3,530,207  
                 
                 
                 
Vantage Drilling Company  
Consolidated Statement of Cash Flows  
(In thousands)  
   
    Year Ended December 31,  
    2013     2012  
CASH FLOWS FROM OPERATING ACTIVITIES                
Net loss   $ (81,825 )   $ (145,304 )
Adjustments to reconcile net loss to net cash provided by (used in) operating activities:                
  Depreciation expense     106,609       68,747  
  Amortization of debt financing costs     12,356       16,930  
  Amortization of debt discount (premium)     7,523       (3,828 )
  Non-cash loss on debt extinguishment     6,070       9,546  
  Share-based compensation expense     7,064       7,073  
  Deferred income tax expense     997       3,785  
  Equity in loss of joint venture     513       49  
  Loss on disposal of assets     1,603       1,321  
Changes in operating assets and liabilities:                
  Restricted cash     1,390       3,513  
  Trade receivables     (49,202 )     (52,207 )
  Inventory     (17,860 )     (13,568 )
  Prepaid expenses and other current assets     1,169       (9,724 )
  Other assets     (12,654 )     318  
  Accounts payable     15,951       4,546  
  Accrued liabilities and other long-term liabilities     (48,135 )     (41,762 )
    Net cash used in operating activities     (48,431 )     (150,565 )
CASH FLOWS FROM INVESTING ACTIVITIES                
  Additions to property and equipment     (564,319 )     (874,117 )
  Investment in joint venture     -       (31,000 )
  Proceeds from sale of property and equipment     22       -  
    Net cash used in investing activities     (564,297 )     (905,117 )
CASH FLOWS FROM FINANCING ACTIVITIES                
  Proceeds from issuance of senior secured notes, net     775,000       1,987,000  
  Proceeds from the issuance of term loan, net     344,750       490,000  
  Proceeds from the issuance of senior convertible notes     100,000       50,000  
  Repayment of long-term debt     (1,033,874 )     (1,006,251 )
  Proceeds from revolving credit agreement, net     10,000       -  
  Debt issuance costs     (31,188 )     (72,372 )
    Net cash provided by financing activities     164,688       1,448,377  
    Net increase (decrease) in cash and cash equivalents     (448,040 )     392,695  
  Cash and cash equivalents-beginning of year     502,726       110,031  
  Cash and cash equivalents-end of year   $ 54,686     $ 502,726  
                 
                 
Contact:
Public & Investor Relations
Paul A. Bragg
Chairman & Chief Executive Officer
Vantage Drilling Company
(281) 404-4700

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