Vantage Drilling International Reports Third Quarter Results for 2021

Houston, Texas, UNITED STATES


HOUSTON, Nov. 09, 2021 (GLOBE NEWSWIRE) -- Vantage Drilling International ("Vantage" or the “Company”) reported a net loss attributable to controlling interest of approximately $21.7 million or $1.66 per diluted share for the three months ended September 30, 2021, based on the weighted average shares outstanding, as compared to a net loss attributable to controlling interest of $169.3 million or $12.91 per diluted share for the three months ended September 30, 2020, which included a non-cash loss on impairment charge of $128.9 million on the carrying amount of the Titanium Explorer.

As of September 30, 2021, Vantage had approximately $120.3 million in cash, including $14.9 million of restricted cash, compared to $154.5 million in cash, including $12.5 million of restricted cash at December 31, 2020. The Company used $44.5 million in cash from operations in 2021 compared to $61.1 million used during the same period of 2020 and used $3.5 million in cash from operations in the third quarter of 2021 compared to $25.6 million used during the second quarter of 2021.

Ihab Toma, CEO, commented: “The underlying fundamentals of our industry continued to improve during the third quarter as reflected in the increased contracting activity and industry-wide utilization. For Vantage, we had all of our five Jackups working throughout the quarter while the Platinum Explorer drillship concluded its previous campaign in August and is expected to start a new two-year contract shortly. We are pleased to report that our collaboration with Aquadrill has resulted in obtaining a drilling contract for their rig, West Capella, which is expected to commence during the first quarter of 2022. This is an important milestone for us and for Aquadrill and proves the viability of Vantage as a management platform marketing and operating rigs on behalf of other owners.”

Vantage, a Cayman Islands exempted company, is an offshore drilling contractor, with a fleet of two 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 gas companies. Vantage also markets, operates and provides management services in respect of, 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:

Douglas E. Stewart
Chief Financial Officer and General Counsel
Vantage Drilling International
C/O Vantage Energy Services, Inc.
777 Post Oak Blvd., Suite 800
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,
  2021 2020 2021 2020
Revenue        
Contract drilling services $               42,982 $               18,069 $               92,362 $               95,539
Reimbursables and other                    9,869                    2,142                  16,256                  12,903
Total revenue                  52,851                  20,211                108,618                108,442
Operating costs and expenses        
Operating costs                  45,369                  27,231                106,782                113,890
General and administrative                    4,593                    3,829                  15,055                  15,715
Depreciation                  14,137                  18,230                  42,423                  54,647
Loss on impairment                          —                128,876                          —                128,876
Total operating costs and expenses                  64,099                178,166                164,260                313,128
Loss from operations                (11,248)              (157,955)                (55,642)              (204,686)
Other (expense) income         
Interest income                            8                          41                       118                       853
Interest expense and other financing charges                  (8,508)                  (8,510)                (25,529)                (25,531)
Other, net                  (1,108)                        (46)                  (1,901)                    2,321
Total other expense                  (9,608)                  (8,515)                (27,312)                (22,357)
Loss before income taxes                (20,856)              (166,470)                (82,954)              (227,043)
Income tax provision                       881                    2,855                    3,763                    4,752
Net loss                (21,737)              (169,325)                (86,717)              (231,795)
Net (loss) income attributable to noncontrolling interests                        (10)                            2                        (41)                          16
Net loss attributable to shareholders $             (21,727) $          (169,327) $             (86,676) $          (231,811)
Loss per share        
Basic and Diluted $                 (1.66) $               (12.91) $                 (6.61) $               (17.68)
Weighted average ordinary shares outstanding,        
Basic and Diluted                  13,115                  13,115                  13,115                  13,115
         
 
Vantage Drilling International
Supplemental Operating Data
(Unaudited, in thousands, except percentages)
         
  Three Months Ended September 30, Nine Months Ended September 30,
  2021 2020 2021 2020
Operating costs and expenses        
Jackups $               23,772 $               11,820 $               60,091 $               48,962
Deepwater                  11,706                  11,958                  27,769                  50,828
Management                    3,701                           -                      4,458                           -  
Operations support                    2,275                    2,177                    6,804                    7,631
Reimbursables                    3,915                    1,276                    7,660                    6,469
Total operating costs and expenses $               45,369 $               27,231 $            106,782 $            113,890
Utilization        
Jackups 98.7% 40.0% 56.9% 62.2%
Deepwater 28.5% 28.2% 42.4% 45.1%


Vantage Drilling International
Consolidated Balance Sheets
(In thousands, except share and par value information)
(Unaudited)
     
  September 30, 2021 December 31, 2020
     
ASSETS    
Current assets    
Cash and cash equivalents $105,468  $141,945 
Restricted cash  5,731   7,996 
Trade receivables, net of allowance for doubtful accounts of $5.0 million, respectively  36,168   24,717 
Materials and supplies  51,550   49,861 
Prepaid expenses and other current assets  18,009   29,151 
Total current assets  216,926   253,670 
Property and equipment    
Property and equipment  794,037   794,944 
Accumulated depreciation  (316,916)  (278,562)
Property and equipment, net  477,121   516,382 
Operating lease ROU assets  2,674   3,997 
Other assets  22,088   12,126 
Total assets $718,809  $786,175 
     
LIABILITIES AND SHAREHOLDERS' EQUITY    
Current liabilities    
Accounts payable $29,776  $25,466 
Other current liabilities  38,126   24,734 
Total current liabilities  67,902   50,200 
Long–term debt, net of discount and financing costs of $3,552 and $4,781, respectively  346,448   345,219 
Other long-term liabilities  15,104   15,011 
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  633,817   634,181 
Accumulated deficit  (346,331)  (259,655)
Controlling interest shareholders' equity  287,499   374,539 
Noncontrolling interests  1,856   1,206 
Total equity  289,355   375,745 
Total liabilities and shareholders' equity $718,809  $786,175 
     


      
Vantage Drilling International 
Consolidated Statement of Cash Flows 
(In thousands) 
(Unaudited) 
  Nine Months Ended September 30, 
  2021 2020 
CASH FLOWS FROM OPERATING ACTIVITIES     
Net loss  $          (86,717)  $        (231,795) 
Adjustments to reconcile net loss to net cash used in operating activities     
Depreciation expense                42,423                54,647 
Amortization of debt financing costs                  1,229                  1,229 
Share-based compensation expense                      366                  1,358 
Deferred income tax (benefit) expense                      357                      (36) 
Loss (gain) on disposal of assets                (2,710)                        52 
Gain on settlement of restructuring agreement                        —                (2,278) 
Loss on impairment                        —              128,876 
Changes in operating assets and liabilities:     
Trade receivables, net              (11,451)                  7,394 
Materials and Supplies                (2,084)                (1,924) 
Prepaid expenses and other current assets                      762                      483 
Other assets                (4,207)                  4,250 
Accounts payable                  4,310              (20,734) 
Other current liabilities and other long-term liabilities                13,243                (2,598) 
Net cash used in operating activities              (44,479)              (61,076) 
CASH FLOWS FROM INVESTING ACTIVITIES     
Additions to property and equipment                (3,232)                (2,634) 
Net proceeds from sale of Titanium Explorer                13,557                        — 
Net cash provided by (used in) investing activities                10,325                (2,634) 
CASH FLOWS FROM FINANCING ACTIVITIES     
Contributions from holders of noncontrolling interests                        —                        — 
Debt issuance costs                        —                        — 
Net cash provided by financing activities                        —                        — 
Net decrease in unrestricted and restricted cash and cash equivalents              (34,154)              (63,710) 
Unrestricted and restricted cash and cash equivalents—beginning of period              154,487              242,944 
Unrestricted and restricted cash and cash equivalents—end of period  $          120,333  $          179,234