Vantage Drilling Company Reports Second Quarter 2013 Results

Marketwired

HOUSTON, TX--(Marketwired - Aug 9, 2013) - Vantage Drilling Company ("Vantage" or the "Company") (NYSE MKT: VTG) reports a net income for the three months ended June 30, 2013 of $4.2 million or $0.01 per diluted share as compared to a net loss of $10.0 million or ($0.03) per diluted share for the three months ended June 30, 2012.

For the six months ended June 30, 2013, Vantage reports a net loss of $20.7 million or ($0.07) per diluted shares excluding approximately $98.3 million of charges for the early retirement of debt as compared to a net loss of $11.2 million or ($0.04) per diluted shares for the six months ended June 30, 2012. Including charges for the early retirement of debt, the Company reported a net loss of $119.0 million or ($.39) per diluted share.

Paul Bragg, Chairman and Chief Executive Officer, commented, "We are very pleased to have had another strong operating quarter from our fleet. We have added additional backlog for the Tungsten Explorer and anticipate a successful commencement of operations in September. Since the quarter end, we have ordered another ultra-deepwater drillship, the Cobalt Explorer. The Cobalt Explorer is scheduled for a 3rd quarter 2015 delivery."

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 eight 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)  
(Unaudited)  
                         
    Three Months Ended June 30,     Six Months Ended June 30,  
    2013     2012     2013     2012  
Revenues                                
  Contract drilling services   $ 155,803     $ 99,683     $ 290,467     $ 204,681  
  Management fees     2,410       956       5,608       3,678  
  Reimbursables     12,424       4,486       21,563       28,615  
    Total revenues     170,637       105,125       317,638       236,974  
  Operating costs and expenses                                
  Operating costs     77,117       50,030       152,434       119,354  
  General and administrative     7,054       6,704       14,481       11,964  
  Depreciation     24,980       16,372       49,841       32,944  
    Total operating costs and expenses     109,151       73,106       216,756       164,262  
Income from operations     61,486       32,019       100,882       72,712  
Other income (expense)                                
  Interest income     74       21       170       33  
  Interest expense and other financing charges     (51,255 )     (36,172 )     (110,917 )     (72,935 )
  Loss on debt extinguishment     -       -       (98,327 )     -  
  Other, net     988       216       1,889       861  
    Total other income (expense)     (50,193 )     (35,935 )     (207,185 )     (72,041 )
Income (loss) before income taxes     11,293       (3,916 )     (106,303 )     671  
Income tax provision     7,077       6,061       12,682       11,827  
Net income (loss)   $ 4,216     $ (9,977 )   $ (118,985 )   $ (11,156 )
                                 
Earnings (loss) per share                                
  Basic   $ 0.01     $ (0.03 )   $ (0.39 )   $ (0.04 )
  Diluted   $ 0.01     $ (0.03 )   $ (0.39 )   $ (0.04 )
                                 
                                 
   
   
Vantage Drilling Company  
Consolidated Balance Sheet  
(In thousands, except par value information)  
             
    June 30,     December 31,  
    2013     2012  
    (Unaudited)        
ASSETS            
Current assets                
  Cash and cash equivalents   $ 440,405     $ 502,726  
  Restricted cash     3,353       3,515  
  Trade receivables     107,876       119,452  
  Inventory     45,757       37,944  
  Prepaid expenses and other current assets     19,071       25,208  
    Total current assets     616,462       688,845  
Property and equipment                
  Property and equipment     2,945,368       2,893,837  
  Accumulated depreciation     (226,134 )     (176,331 )
    Property and equipment, net     2,719,234       2,717,506  
Other assets                
  Investment in joint venture     32,359       31,320  
  Other assets     93,061       92,536  
    Total other assets     125,420       123,856  
Total assets   $ 3,461,116     $ 3,530,207  
                 
LIABILITIES AND SHAREHOLDERS' EQUITY                
Current liabilities                
  Accounts payable   $ 58,126     $ 50,909  
  Accrued liabilities     75,065       123,484  
  Current maturities of long-term debt     47,250       31,250  
    Total current liabilities     180,441       205,643  
Long-term debt, net of discount of $33,280 and $11,940     2,784,845       2,710,559  
Other long-term liabilities     42,678       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; 302,108 and 299,647 shares issued and outstanding     302       299  
  Additional paid-in capital     881,787       878,137  
  Accumulated deficit     (428,937 )     (309,951 )
    Total shareholders' equity     453,152       568,485  
Total liabilities and shareholders' equity   $ 3,461,116     $ 3,530,207  
                 
                 
   
   
Vantage Drilling Company  
Consolidated Statement of Cash Flows  
(In thousands)  
(Unaudited)  
    Six Months Ended June 30,  
    2013     2012  
CASH FLOWS FROM OPERATING ACTIVITIES                
Net loss   $ (118,985 )   $ (11,156 )
Adjustments to reconcile net loss to net cash provided by (used in) operating activities:                
  Depreciation expense     49,841       32,944  
  Amortization of debt financing costs     6,588       7,438  
  Non-cash loss on debt extinguishment     6,070       -  
  Equity in loss of joint venture     256       -  
  Share-based compensation expense     3,652       4,420  
  Amortization of debt discount (premium)     1,835       (762 )
  Deferred income tax expense     764       1,860  
  Loss on disposal of assets     14       249  
Changes in operating assets and liabilities:                
  Restricted cash     162       1,150  
  Trade receivables     11,576       (10,977 )
  Inventory     (7,814 )     (9,256 )
  Prepaid expenses and other current assets     5,308       1,476  
  Other assets     (4,646 )     1,357  
  Accounts payable     7,218       10,481  
  Accrued liabilities and other long-term liabilities     (58,946 )     644  
    Net cash provided by (used in) operating activities     (97,107 )     29,868  
CASH FLOWS FROM INVESTING ACTIVITIES                
  Additions to property and equipment     (45,130 )     (816,722 )
  Proceeds from sale of property and equipment     2       -  
    Net cash used in investing activities     (45,128 )     (816,722 )
CASH FLOWS FROM FINANCING ACTIVITIES                
  Proceeds from issuance of senior secured notes, net     775,000       837,000  
  Proceeds from issuance of term loan, net     344,750       -  
  Repayment of long-term debt     (1,013,374 )     -  
  Debt issuance costs     (26,462 )     (36,468 )
    Net cash provided by financing activities     79,914       800,532  
    Net increase (decrease) in cash and cash equivalents     (62,321 )     13,678  
  Cash and cash equivalents--beginning of period     502,726       110,031  
  Cash and cash equivalents--end of period   $ 440,405     $ 123,709  
                   
                   
Contact:
Public & Investor Relations

Paul A. Bragg
Chairman & Chief Executive Officer
Vantage Drilling Company
(281) 404-4700

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