Vantage Drilling International Reports First Quarter Results for 2020

Houston, Texas, UNITED STATES

HOUSTON, May 12, 2020 (GLOBE NEWSWIRE) -- Vantage Drilling International ("Vantage" or the “Company”) reported a net loss attributable to controlling interest of approximately $30.6 million or $2.33 per diluted share for the three months ended March 31, 2020, based on the weighted average shares outstanding after the conversion of our convertible notes in December 2019, as compared to a net loss attributable to controlling interest of $47.9 million or $9.58 per diluted share for the three months ended March 31, 2019.

As of March 31, 2020, Vantage had approximately $210.5 million in cash, including $14.1 million of restricted cash, compared to $242.9 million in cash, including $11.0 million of restricted cash at December 31, 2019. Cash flows used in operating activities include $15.0 million paid in accordance with a settlement reached with Vantage Drilling Company, the Company's former parent company. The Company previously accrued $17.3 million as a potential liability and, therefore, recorded a gain of $2.3 million related to the settlement agreement included in “Other Income” in the Consolidated Statement of Operations during the three months ended March 31, 2020.  

Ihab Toma, CEO, commented. “Despite the challenges presented by COVID-19 and the resulting global economic crisis, I am very proud to report another quarter of excellent operational results, with seven of our eight assets working during the quarter and producing a revenue efficiency of 99%. During the quarter we successfully took redelivery of the Soehanah jack up rig after completion of its bareboat charter contract, completed project work required to achieve Vantage’s operational standards on the rig, and redeployed the rig under a drilling contract in Indonesia.  Unfortunately, we also recognize that uncertainties surrounding the containment of COVID-19, the resulting economic crisis and the oversupply of oil worldwide will present significant challenges to our industry.  However, with our healthy balance sheet and our proven agility in managing costs, we are well-positioned to navigate through these unprecedented times. Vantage remains focused on delivering stellar safety and operational excellence to our customers.”

Vantage, a Cayman Islands exempted company, is an offshore drilling contractor, with a fleet of three ultra-deepwater drillships and five 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
     C/O Vantage Energy Services, Inc.
     777 Post Oak Blvd., Suite 800
     Houston, Texas 77056
    +1 (281) 404-4700

Vantage Drilling International
Consolidated Statement of Operations
(In thousands, except per share data)
  Three Months Ended March 31, 
   2020   2019  
Contract drilling services $44,319  $29,980  
Reimbursables and other  7,137   4,575  
Total revenue  51,456   34,555  
Operating costs and expenses     
Operating costs  48,555   38,542  
General and administrative  7,170   8,668  
Depreciation  18,016   18,533  
Total operating costs and expenses  73,741   65,743  
Loss from operations  (22,285)  (31,188) 
Other income (expense)     
Interest income  701   1,064  
Interest expense and other financing charges  (8,420)  (15,815) 
Other, net  2,355   182  
Total other expense  (5,364)  (14,569) 
Loss before income taxes  (27,649)  (45,757) 
Income tax provision  2,921   2,147  
Net loss  (30,570)  (47,904) 
Net income (loss) attributable to noncontrolling interests  2   (14) 
Net loss attributable to shareholders $(30,572) $(47,890) 
Loss per share     
Basic and Diluted $(2.33) $(9.58) 
Weighted average ordinary shares outstanding,
basic and diluted
  13,115   5,000  
Vantage Drilling International
Supplemental Operating Data
(Unaudited, in thousands, except percentages)
  Three Months Ended March 31, 
   2020   2019  
Operating costs and expenses     
Jackups $21,474  $17,806  
Deepwater  20,039   15,815  
Operations support  3,437   3,099  
Reimbursables  3,605   1,822  
  $48,555  $38,542  
Jackups  88.9%  98.4% 
Deepwater  61.8%  32.5% 

Vantage Drilling International 
Consolidated Balance Sheet 
(In thousands, except share and par value information) 
  March 31, 2020 December 31, 2019 
Current assets     
Cash and cash equivalents $196,348  $231,947  
Restricted cash  4,696   2,511  
Trade receivables  66,877   46,504  
Inventory  48,873   48,368  
Prepaid expenses and other current assets  15,921   16,507  
Total current assets  332,715   345,837  
Property and equipment     
Property and equipment  1,003,119   1,002,968  
Accumulated depreciation  (299,833)  (281,842) 
Property and equipment, net  703,286   721,126  
Operating lease ROU assets  5,620   6,706  
Other assets  17,165   17,068  
Total assets $1,058,786  $1,090,737  
Current liabilities     
Accounts payable $41,033  $49,599  
Other current liabilities  33,827   26,936  
Total current liabilities  74,860   76,535  
Long–term debt, net of discount and financing costs of $6,011 and $6,421, respectively  343,989   343,579  
Other long-term liabilities  18,015   17,532  
Commitments and contingencies     
Shareholders' equity     
Ordinary shares, $0.001 par value, 50 million shares authorized; 13,115,026 shares issued and outstanding, respectively  13   13  
Additional paid-in capital  634,171   634,770  
Accumulated earnings (deficit)  (13,508)  17,064  
Controlling interest shareholders' equity  620,676   651,847  
Noncontrolling interests  1,246   1,244  
Total equity  621,922   653,091  
Total liabilities and shareholders' equity $1,058,786  $1,090,737  

Vantage Drilling International
Consolidated Statement of Cash Flows
(In thousands)
  Three Months Ended March 31, 
   2020   2019  
Net loss $(30,570) $(47,904) 
Adjustments to reconcile net loss to net cash used in operating activities     
Depreciation expense  18,016   18,533  
Amortization of debt financing costs  410   400  
Amortization of debt discount     5,354  
Amortization of contract value     1,556  
PIK interest on the Convertible Notes     1,934  
Share-based compensation expense  698   1,029  
Deferred income tax expense (benefit)  102   (415) 
Loss on disposal of assets     62  
Gain on settlement of restructuring agreement  (2,278)    
Changes in operating assets and liabilities:     
Trade receivables  (20,373)  1,198  
Inventory  514   285  
Prepaid expenses and other current assets  586   1,086  
Other assets  1,877   1,252  
Accounts payable  (6,288)  2,995  
Other current liabilities and other long-term liabilities  6,032   1,951  
Net cash used in operating activities  (31,274)  (10,684) 
Additions to property and equipment  (1,196)  (2,184) 
Net cash used in investing activities  (1,196)  (2,184) 
Contributions from holders of noncontrolling interests     122  
Debt issuance costs     (437) 
Net cash used in financing activities     (315) 
Net decrease in unrestricted and restricted cash and cash equivalents  (32,470)  (13,183) 
Unrestricted and restricted cash and cash equivalents—beginning of period  242,945   239,387  
Unrestricted and restricted cash and cash equivalents—end of period $210,475  $226,204  

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Press Release 2020 1Q Earnings Release.pdf