Vantage Drilling International Reports Fourth Quarter and Full-Year 2022 Results

HOUSTON, March 23, 2023 (GLOBE NEWSWIRE) -- Vantage Drilling International ("Vantage" or the “Company”) reported a net loss attributable to controlling interest of approximately $16.4 million, or $1.25 per diluted share, for the three months ended December 31, 2022, based on the weighted average shares outstanding, as compared to a net loss attributable to controlling interest of $23.5 million, or $1.79 per diluted share, for the three months ended December 31, 2021.

For the year ended December 31, 2022, Vantage reported a net loss attributable to controlling interest of approximately $3.4 million or $0.26 per diluted share, as compared to a net loss attributable to controlling interest of $110.1 million or $8.40 per diluted share for the year ended December 31, 2021.

As of December 31, 2022, Vantage had approximately $93.3 million in cash, including $19.2 million of restricted cash, compared to $90.6 million in cash, including $17.3 million of restricted cash, at December 31, 2021. The Company used $18.9 million in cash from operations in 2022 compared to $70.4 million used in 2021. At December 31, 2022, Vantage maintained $29.0 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: “I am very proud of our operational and financial performance in 2022. The Company’s four owned rigs were contracted for most of the year with the Tungsten Explorer concluding its successful campaign in Cyprus in December before beginning to prepare to work in Namibia. The Company’s managed rigs also performed well as the West Capella concluded a strong campaign in Indonesia and prepares to commence a campaign in East Africa in Q2 2023 before returning to Indonesia in Q3 2023. Furthermore, the West Polaris finished its reactivation and successfully went on contract in December 2022 for ONGC. I am very pleased that the Emerald Driller Company supported rigs in Qatar continue to perform well and to the satisfaction of their respective clients.”

Mr. Toma continued: “As I reflect on the year, 2022 represented an important inflection point for the Company and the industry as a whole, as the Company generated positive EBITDA in each of the four quarters. Industry fundamentals are projected to remain strong with day rates and utilization reaching levels not seen since 2015. With strong industry sentiment and the closing of our refinancing earlier this month, the Company is well positioned for the future while our focus remains the same. We are committed to ensuring our employees stay safe and providing our clients with excellent service.”

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.

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 
(Unaudited, in thousands, except per share data) 
  Three months ended December 31,  Twelve months ended December 31, 
  2022  2021  2022  2021 
Contract drilling services $32,367  $39,341  $154,116  $131,703 
Management fees  2,449   1,066   10,834   2,351 
Reimbursables and other  41,373   9,395   113,766   24,366 
Total revenue  76,189   49,802   278,716   158,420 
Operating costs and expenses            
Operating costs  65,065   43,886   234,832   150,668 
General and administrative  5,264   5,484   23,009   20,539 
Depreciation  11,024   13,819   44,428   56,242 
Gain on EDC Sale  4      (61,409)   
Total operating costs and expenses  81,357   63,189   240,860   227,449 
(Loss) income from operations  (5,168)  (13,387)  37,856   (69,029)
Other (expense) income            
Interest income  1,080   6   1,108   124 
Interest expense and other financing charges  (8,840)  (8,505)  (34,351)  (34,034)
Other, net  (1,519)  (270)  (3,668)  (2,171)
Total other expense  (9,279)  (8,769)  (36,911)  (36,081)
(Loss) income before income taxes  (14,447)  (22,156)  945   (105,110)
Income tax provision  2,530   1,378   4,313   5,141 
Net loss  (16,977)  (23,534)  (3,368)  (110,251)
Net loss attributable to noncontrolling interests  (619)  (73)  (13)  (114)
Net loss attributable to shareholders $(16,358) $(23,461) $(3,355) $(110,137)
EBITDA (1) $4,956  $235  $78,629  $(14,844)
Loss per share            
Basic and Diluted $(1.25) $(1.79) $(0.26) $(8.40)
Weighted average ordinary shares outstanding,            
Basic and Diluted  13,115   13,115   13,115   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 December 31,  Twelve months ended December 31, 
  2022  2021  2022  2021 
Operating costs            
Jackups $4,317  $8,055  $36,225  $33,824 
Deepwater  17,350   14,169   68,567   41,939 
Third party Rigs  2,295   4,815   2,289   9,272 
Sold rigs/Held for sale  20   11,528   10,722   45,851 
Operations support  2,595   2,267   10,975   9,071 
Reimbursables  38,488   3,052   106,054   10,711 
Total operating costs $65,065  $43,886  $234,832  $150,668 
Utilization (1)            
Jackups  100.0%  99.6%  72.7%  68.9%
Deepwater  90.1%  26.8%  94.2%  38.4%
Sold rigs/Held for sale N/A   90.3%  43.6%  64.4%
(1) Excludes rigs under bareboat charter contracts to third parties. 

Vantage Drilling International 
Consolidated Balance Sheets 
(Unaudited, in thousands, except share and par value information) 
  December 31, 2022  December 31, 2021 
Current assets      
Cash and cash equivalents $74,026  $73,343 
Restricted cash  16,450   1,621 
Trade receivables, net of allowance for credit losses of $5.0 million each year  62,776   37,527 
Materials and supplies  41,250   37,580 
Assets held for sale     117,117 
Prepaid expenses and other current assets  25,621   18,309 
Total current assets  220,123   285,497 
Property and equipment      
Property and equipment  647,909   645,622 
Accumulated depreciation  (309,453)  (266,018)
Property and equipment, net  338,456   379,604 
Operating lease ROU assets  1,648   2,450 
Other assets  18,334   31,843 
Total assets $578,561  $699,394 
Current liabilities      
Accounts payable $57,775  $31,420 
Liabilities held for sale  66,179   31,533 
Other current liabilities     6,720 
Total current liabilities  123,954   69,673 
Long–term debt, net of discount and financing costs of $773 and $3,142  179,227   346,858 
Other long-term liabilities  12,881   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 year  13   13 
Additional paid-in capital  633,863   633,847 
Accumulated deficit  (373,147)  (369,792)
Controlling interest shareholders' equity  260,729   264,068 
Noncontrolling interests  1,770   1,783 
Total equity  262,499   265,851 
Total liabilities and shareholders' equity $578,561  $699,394 

Vantage Drilling International 
Consolidated Statement of Cash Flows 
(Unaudited, in thousands) 
  Year Ended December 31, 
  2022  2021 
Net loss $(3,368) $(110,251)
Adjustments to reconcile net loss to net cash used in operating activities      
Depreciation expense  44,428   56,242 
Amortization of debt financing costs  1,639   1,639 
Share-based compensation expense  79   395 
Loss on debt extinguishment  730    
Deferred income tax expense  708   369 
Gain on disposal of assets  (1,600)  (2,640)
Gain on EDC Sale  (61,409)   
Changes in operating assets and liabilities:      
Trade receivables, net  (42,241)  (20,116)
Materials and supplies  (4,155)  (1,624)
Prepaid expenses and other current assets  (9,878)  (3,306)
Other assets  (22,461)  (12,312)
Accounts payable  44,469   10,094 
Other current liabilities and other long-term liabilities  34,185   11,119 
Net cash used in operating activities  (18,874)  (70,391)
Additions to property and equipment  (10,277)  (7,045)
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  191,523   6,512 
Repayment of long-term debt  (170,000)   
Net cash used in financing activities  (170,000)   
Net increase (decrease) in unrestricted and restricted cash and cash equivalents  2,649   (63,879)
Unrestricted and restricted cash and cash equivalents—beginning of period  90,608   154,487 
Unrestricted and restricted cash and cash equivalents—end of period $93,257  $90,608 

Vantage Drilling International 
Non-GAAP Measures 
(Unaudited, in thousands) 
  Three months ended December 31,  Twelve months ended December 31, 
Reconciliation of EBITDA 2022  2021  2022  2021 
Net loss attributable to shareholders $(16,358) $(23,461) $(3,355) $(110,137)
Depreciation  11,024   13,819   44,428   56,242 
Interest income  (1,080)  (6)  (1,108)  (124)
Interest expense and other financing costs  8,840   8,505   34,351   34,034 
Income tax provision  2,530   1,378   4,313   5,141 
EBITDA $4,956  $235  $78,629  $(14,844)