Vantage Drilling International Reports Third Quarter Results for 2022

Houston, Texas, UNITED STATES


HOUSTON, Nov. 10, 2022 (GLOBE NEWSWIRE) -- Vantage Drilling International ("Vantage" or the “Company”) reported net loss attributable to controlling interest of approximately $20.2 million, or $1.54 per diluted share, for the three months ended September 30, 2022, based on the weighted average shares outstanding, as compared to a net loss attributable to controlling interest of $21.7 million, or $1.66 per diluted share, for the three months ended September 30, 2021.

As of September 30, 2022, Vantage had approximately $262.3 million in cash, including $18.7 million of restricted cash, compared to $90.6 million in cash, including $17.3 million of restricted cash, at December 31, 2021. The Company had $17.7 million in cash provided by operations during the third quarter of 2022 compared to $3.5 million used during the same period of 2021.  At September 30, 2022, Vantage maintained $19.7 million of cash pre-funded by our Managed Services customers to address near-term obligations associated with the operation of their rigs.

Ihab Toma, CEO, commented: “The third quarter represented a good quarter for the Company as we generated positive EBITDA even with one of our four rigs out of service undergoing maintenance.  We also reported a positive change in working capital as we were able to collect overdue accounts receivable from prior periods.  The successful quarter is a testament to our operations teams and the teams that support them.”

Mr. Toma continued: “The market continues to show signs of strength with day rates improving both in the deepwater and shallow water space.  Our focus will be to continue to participate in this market expansion to secure higher day rates and increase margins while delivering safe, efficient and reliable service to our clients.”

Vantage, a Cayman Islands exempted company, is an offshore drilling contractor, with a fleet of two ultra-deepwater drillships, and two 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 gas companies. Vantage also markets, operates and provides management services in respect of, third party-owned drilling units. www.vantagedrilling.com. 

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.

Non-GAAP Measures

We report our financial results in accordance with generally accepted accounting principles (GAAP) in the United States.  However, in our earnings release and during our earnings calls we may reference company information that does not conform to GAAP.  Generally, a non-GAAP financial measure is a numerical measure of a company's performance, financial position, or cash flows that excludes or includes amounts that are not normally excluded or included in the most directly comparable measure calculated and presented in accordance with GAAP.  Management believes that an analysis of this data is meaningful to investors because it provides insight with respect to ongoing operating results of the Company and allows investors to better evaluate the financial results of the Company.  However, these measures should not be viewed as an alternative to or substitute for GAAP measures of performance, and these non-GAAP measures may not be consistent with previously published Company reports on Forms 10-K, 10-Q and 8-K.  Non-GAAP measures we may reference have been reconciled to the nearest GAAP measure in the tables entitled Reconciliation of GAAP to Non-GAAP Financial Measures below.

Public & Investor Relations Contact:
Douglas E. Stewart
Chief Financial Officer and General Counsel
Vantage Drilling International
C/O Vantage Energy Services, Inc.
777 Post Oak Blvd., Suite 440
Houston, Texas 77056
(281) 404-4700

 

Vantage Drilling International
Consolidated Statement of Operations
(In thousands, except per share data)
(Unaudited)
            
 Three Months Ended September 30,  Nine Months Ended September 30, 
 2022  2021  2022  2021 
Revenue           
Contract drilling services$34,092  $42,982  $121,749  $92,362 
Management fees 4,442   690   8,385   1,285 
Reimbursables and other 32,424   9,179   72,393   14,971 
Total revenue 70,958   52,851   202,527   108,618 
Operating costs and expenses           
Operating costs 66,429   45,369   169,767   106,782 
General and administrative 4,253   4,593   17,745   15,055 
Depreciation 11,022   14,137   33,404   42,423 
Gain on EDC Sale (632)     (61,413)   
Total operating costs and expenses 81,072   64,099   159,503   164,260 
(Loss) income from operations (10,114)  (11,248)  43,024   (55,642)
Other (expense) income           
Interest income 17   8   28   118 
Interest expense and other financing charges (8,504)  (8,508)  (25,511)  (25,529)
Other, net (363)  (1,108)  (2,149)  (1,901)
Total other expense (8,850)  (9,608)  (27,632)  (27,312)
(Loss) income before income taxes (18,964)  (20,856)  15,392   (82,954)
Income tax provision 1,566   881   1,783   3,763 
Net (loss) income (20,530)  (21,737)  13,609   (86,717)
Net (loss) income attributable to noncontrolling interests (332)  (10)  606   (41)
Net (loss) income attributable to shareholders$(20,198) $(21,727) $13,003  $(86,676)
            
EBITDA(1)$877  $1,791  $73,673  $(15,079)
            
(Loss) earnings per share           
Basic$(1.54) $(1.66) $0.99  $(6.61)
Diluted$(1.54) $(1.66) $0.98  $(6.61)
Weighted average ordinary shares outstanding,           
Basic 13,115   13,115   13,115   13,115 
Diluted 13,115   13,115   13,330   13,115 
            
(1) EBITDA represents net income (loss) before (i) interest income (expense), (ii) provision for income taxes and (iii) depreciation and amortization expense.  EBITDA is not a financial measure under GAAP as defined under the rules of the SEC, and is intended as a supplemental measure of our performance.  We believe this measure is commonly used by analysts and investors to analyze and compare companies on the basis of operating performance. 
            
Vantage Drilling International
Supplemental Operating Data
(Unaudited, in thousands, except percentages)
            
 Three Months Ended September 30,  Nine Months Ended September 30, 
 2022  2021  2022  2021 
Operating costs and expenses           
Jackups$13,223  $23,772  $31,907  $60,091 
Deepwater 20,738   11,706   51,216   27,769 
Managed Rigs (6)  3   (5)  22 
Held for Sale(2)       10,703    
Operations support 2,515   2,275   8,380   6,804 
Reimbursables 29,959   7,613   67,566   12,096 
Total operating costs and expenses$66,429  $45,369  $169,767  $106,782 
Utilization           
Jackups 51.3%  98.7%  68.1%  56.9%
Deepwater 96.7%  28.5%  95.6%  42.4%
Held for Sale(2)N/A  N/A   43.6% N/A 
            
(2) Included in the sale of Emerald Driller Company, which owns the Emerald Driller, Sapphire Driller and Aquamarine Driller. Each of these rigs were classified as held for sale on our Consolidated Balance Sheets up to the closing date, which was on May 27, 2022, during the current year and at December 31, 2021. 

 

Vantage Drilling International
Consolidated Balance Sheets
(In thousands, except share and par value information)
(Unaudited)
      
 September 30,
2022
  December 31,
2021
 
      
ASSETS     
Current assets     
Cash and cash equivalents$243,581  $73,343 
Restricted cash 15,123   1,621 
Trade receivables, net of allowance for credit losses of $5.0 million, each period 70,823   37,527 
Materials and supplies 39,313   37,580 
Assets held for sale    117,117 
Prepaid expenses and other current assets 13,880   18,309 
Total current assets 382,720   285,497 
Property and equipment     
Property and equipment 645,619   645,622 
Accumulated depreciation (298,263)  (266,018)
Property and equipment, net 347,356   379,604 
Operating lease ROU assets 1,754   2,450 
Other assets 18,661   31,843 
Total assets$750,491  $699,394 
      
LIABILITIES AND SHAREHOLDERS' EQUITY     
Current liabilities     
Accounts payable$45,178  $31,420 
Other current liabilities 68,435   31,533 
Liabilities held for sale    6,720 
Total current liabilities 113,613   69,673 
Long–term debt, net of discount and financing costs of $1,913 and $3,142, respectively 348,087   346,858 
Other long-term liabilities 9,333   17,012 
Commitments and contingencies     
Shareholders' equity     
Ordinary shares, $0.001 par value, 50 million shares authorized; 13,115,026 shares issued and outstanding, each period 13   13 
Additional paid-in capital 633,845   633,847 
Accumulated deficit (356,789)  (369,792)
Controlling interest shareholders' equity 277,069   264,068 
Noncontrolling interests 2,389   1,783 
Total equity 279,458   265,851 
Total liabilities and shareholders' equity$750,491  $699,394 

 

Vantage Drilling International
Consolidated Statement of Cash Flows
(In thousands)
(Unaudited)
 Nine Months Ended September 30, 
 2022  2021 
CASH FLOWS FROM OPERATING ACTIVITIES     
Net income (loss)$13,609  $(86,717)
Adjustments to reconcile net income (loss) to net cash used in operating activities     
Depreciation expense 33,404   42,423 
Amortization of debt financing costs 1,229   1,229 
Share-based compensation expense 61   366 
Deferred income tax expense 301   357 
Gain on disposal of assets (1,600)  (2,710)
Gain on EDC Sale (61,413)   
Changes in operating assets and liabilities:     
Trade receivables, net (50,289)  (11,451)
Materials and supplies (2,218)  (2,084)
Prepaid expenses and other current assets 2,680   762 
Other assets (23,222)  (4,207)
Accounts payable 31,873   4,310 
Other current liabilities and other long-term liabilities 33,624   13,243 
Net cash used in operating activities (21,961)  (44,479)
CASH FLOWS FROM INVESTING ACTIVITIES     
Additions to property and equipment (8,154)  (3,232)
Net proceeds from EDC Sale 198,700    
Net proceeds from sale of assets 3,100    
Net proceeds from sale of Titanium Explorer    13,557 
Net cash provided by investing activities 193,646   10,325 
CASH FLOWS FROM FINANCING ACTIVITIES     
Net cash provided by financing activities     
Net increase (decrease) in unrestricted and restricted cash and cash equivalents 171,685   (34,154)
Unrestricted and restricted cash and cash equivalents—beginning of period 90,608   154,487 
Unrestricted and restricted cash and cash equivalents—end of period$262,293  $120,333 

 

Vantage Drilling International
Non-GAAP Measures
(In thousands)
(Unaudited)
            
 Three Months Ended September 30,  Nine Months Ended September 30, 
Reconciliation of EBITDA2022  2021  2022  2021 
Net (loss) income attributable to shareholders$(20,198) $(21,727) $13,003  $(86,676)
Depreciation 11,022   14,137   33,404   42,423 
Interest income (17)  (8)  (28)  (118)
Interest expense and other financing costs 8,504   8,508   25,511   25,529 
Income tax provision 1,566   881   1,783   3,763 
EBITDA$877  $1,791  $73,673  $(15,079)

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Press Release 2022 3Q Earnings Release.pdf