Vantage Drilling International Reports First Quarter Results for 2023

Houston, Texas, UNITED STATES

HOUSTON, May 12, 2023 (GLOBE NEWSWIRE) -- Vantage Drilling International ("Vantage" or the “Company”) reported a Net loss attributable to controlling interest of approximately $2.3 million, or $0.17 per diluted share, for the three months ended March 31, 2023, based on the weighted average shares outstanding, as compared to a net loss attributable to controlling interest of $14.9 million, or $1.14 per diluted share, for the three months ended March 31, 2022.

As of March 31, 2023, Vantage had approximately $78.8 million in cash, including $8.9 million of restricted cash, compared to $93.3 million in cash, including $19.2 million of restricted cash, at December 31, 2022. At March 31, 2023, Vantage maintained $15.6 million of cash pre-funded by our Managed Services customers to address near-term obligations during the first quarter of 2023. Excluding cash used in connection with our Managed Services customers, the Company used $5.4 million in cash during the first quarter of 2023.

Ihab Toma, CEO, commented: “While we used cash in the first quarter of 2023, the work done during the quarter was important to putting the Company back on the path to generating cash. Transitioning from legacy contracts to current market priced contracts underpins this strategy. Thus, our immediate focus was on the Tungsten Explorer’s safe and timely commencement of its contract in Namibia for a minimum term of 335 days, as our client has exercised its first option. We are very excited to be part of this important campaign.”

Mr. Toma continued: “In addition, during the quarter, one of our managed rigs, the West Capella, began its mobilization to East Africa for a contract to commence in the second quarter of 2023. Our remaining owned and supported rigs, including the West Polaris, which we manage for our client, continued to operate safely and efficiently in their respective campaigns. I am very pleased with the solid beginning to 2023.”

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 
(In thousands, except per share data) 
  Three Months Ended March 31, 
  2023  2022 
Contract drilling services $47,917  $44,913 
Management fees  2,120   1,103 
Reimbursables and other  27,035   12,315 
Total revenue  77,072   58,331 
Operating costs and expenses      
Operating costs  66,555   43,933 
General and administrative  4,831   6,582 
Depreciation  11,049   11,295 
Loss on EDC Sale  3    
Total operating costs and expenses  82,438   61,810 
Loss from operations  (5,366)  (3,479)
Other (expense) income      
Interest income  49   4 
Interest expense and other financing charges  (5,558)  (8,504)
Other, net  322   (775)
Total other expense  (5,187)  (9,275)
Loss before income taxes  (10,553)  (12,754)
Income tax (benefit) provision  (7,978)  1,438 
Net loss  (2,575)  (14,192)
Net (loss) income attributable to noncontrolling interests  (289)  706 
Net loss attributable to shareholders $(2,286) $(14,898)
EBITDA (1) $6,294  $6,335 
Loss per share      
Basic and Diluted $(0.17) $(1.14)
Weighted average ordinary shares outstanding,      
Basic and Diluted  13,179   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 March 31, 
  2023  2022 
Operating costs and expenses      
Jackups $3,985  $8,425 
Deepwater  18,964   14,543 
Managed Rigs  16,940   7,127 
Held for Sale (2)     6,821 
Operations support  2,650   2,938 
Reimbursables  24,016   4,079 
Total operating costs and expenses $66,555  $43,933 
Jackups  100.0%  60.3%
Deepwater  62.8%  98.8%
Held for Sale (2) N/A   41.5%
(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. 

Vantage Drilling International 
Consolidated Balance Sheets 
(In thousands, except share and par value information) 
  March 31, 2023  December 31, 2022 
Current assets      
Cash and cash equivalents $69,916  $74,026 
Restricted cash  6,116   16,450 
Trade receivables, net of allowance for credit losses of $5.0 million, each period  95,468   62,776 
Materials and supplies  42,381   41,250 
Prepaid expenses and other current assets  48,860   25,621 
Total current assets  262,741   220,123 
Property and equipment      
Property and equipment  648,752   647,909 
Accumulated depreciation  (320,502)  (309,453)
Property and equipment, net  328,250   338,456 
Operating lease ROU assets  1,235   1,648 
Other assets  12,437   18,334 
Total assets $604,663  $578,561 
Current liabilities      
Accounts payable $69,876  $57,775 
Other current liabilities  76,877   66,179 
Total current liabilities  146,753   123,954 
Long–term debt, net of discount and financing costs of $11,366 and $773, respectively  188,634   179,227 
Other long-term liabilities  9,624   12,881 
Commitments and contingencies      
Shareholders' equity      
Ordinary shares, $0.001 par value, 50 million shares authorized; 13,229,280 and 13,115,026 shares issued and outstanding, each period  13   13 
Additional paid-in capital  633,591   633,863 
Accumulated deficit  (375,433)  (373,147)
Controlling interest shareholders' equity  258,171   260,729 
Noncontrolling interests  1,481   1,770 
Total equity  259,652   262,499 
Total liabilities and shareholders' equity $604,663  $578,561 

Vantage Drilling International 
Consolidated Statement of Cash Flows 
(In thousands) 
  Three Months Ended March 31, 
  2023  2022 
Net loss $(2,575) $(14,192)
Adjustments to reconcile net loss to net cash used in operating activities      
Depreciation expense  11,049   11,295 
Amortization of debt financing costs  266   410 
Share-based compensation expense  11   26 
Loss on debt extinguishment  703    
Deferred income tax expense  711   365 
Gain on disposal of assets     (1,893)
Loss on EDC Sale  3    
Changes in operating assets and liabilities:      
Trade receivables, net  (32,692)  (13,205)
Materials and supplies  (1,131)  (482)
Prepaid expenses and other current assets  (12,566)  155 
Other assets  5,631   (16,639)
Accounts payable  12,101   23,165 
Other current liabilities and other long-term liabilities  347   2,790 
Net cash used in operating activities  (18,142)  (8,205)
Additions to property and equipment  (843)  (6,899)
Net proceeds from sale of assets     3,100 
Net cash used in investing activities  (843)  (3,799)
Proceeds from 9.50% First Lien Notes  194,000    
Repayment of long-term debt  (180,000)   
Shares repurchased for tax withholdings on settlement of RSUs  (246)   
Payments of dividend equivalents  (5,278)   
Debt issuance costs  (3,935)   
Net cash provided by financing activities  4,541    
Net decrease in unrestricted and restricted cash and cash equivalents  (14,444)  (12,004)
Unrestricted and restricted cash and cash equivalents—beginning of period  93,257   90,608 
Unrestricted and restricted cash and cash equivalents—end of period $78,813  $78,604 

Vantage Drilling International 
Non-GAAP Measures 
(In thousands) 
  Three Months Ended March 31, 
Reconciliation of EBITDA 2023  2022 
Net loss attributable to shareholders $(2,286) $(14,898)
Depreciation  11,049   11,295 
Interest income  (49)  (4)
Interest expense and other financing costs  5,558   8,504 
Income tax (benefit) provision  (7,978)  1,438 
EBITDA $6,294  $6,335 


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