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Vantage Drilling International Reports Fourth Quarter and Full-Year 2018 Results


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Source: Vantage Drilling International

HOUSTON, March 14, 2019 (GLOBE NEWSWIRE) — Vantage Drilling International (“Vantage” or the “Company”) reported a net loss of approximately $52.2 million or $10.44 per share for the three months ended December 31, 2018 as compared to a net loss of $36.6 million or $7.33 per share for the three months ended December 31, 2017.

For the year ended December 31, 2018, Vantage reported a net loss of approximately $141.5 million or $28.29 per share as compared to a net loss of $149.8 million or $29.96 per share for the year ended December 31, 2017.

As of December 31, 2018, Vantage had approximately $239.4 million in cash, including $14.4 million of restricted cash, compared to $195.5 million in unrestricted cash and no restricted cash at December 31, 2017. The Company generated $12.8 million in cash from operations in 2018 compared to net cash used in operations of $19.9 million in 2017. During the three months ended December 31, 2018, the Company issued $350 million of new senior secured notes using proceeds to repay its first and second lien debt and to acquire the Soehanah jackup for $85.0, including transaction costs.

Ihab Toma, CEO, commented, “I am pleased to report that during another difficult year for the industry we accomplished our principal objectives for 2018. We refinanced two tranches of debt thereby extending maturities to 2023. We also acquired the Soehanah jackup, complementing our fleet of premium jackup rigs and, most importantly, continued to provide operational excellence to our clients while generating positive cash flow from operations.”

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
(281) 404-4700

Vantage Drilling International
Consolidated Statement of Operations
(In thousands, except per share data)
(Unaudited)
Three Months Ended December 31,  Year Ended December 31, 
2018 2017 2018 2017
Revenue
Contract drilling services $ 37,753 $ 52,881 $ 203,565 $ 190,553
Management fees 308 307 1,220 1,456
Reimbursables 5,006 6,650 20,962 20,837
Total revenue 43,067 59,838 225,747 212,846
Operating costs and expenses
Operating costs 42,099 42,730 171,041 161,974
General and administrative 6,609 11,719 29,544 41,648
Depreciation 17,230 18,394 70,447 73,925
Total operating costs and expenses 65,938 72,843 271,032 277,547
Loss from operations (22,871 ) (13,005 ) (45,285 ) (64,701 )
Other income (expense)
Interest income 924 221 1,898 808
Interest expense and other financing charges (20,657 ) (19,261 ) (78,779 ) (76,441 )
Loss on debt extinguishment (1,271 ) (1,271 )
Other, net (474 ) 520 (1,505 ) 2,807
Bargain purchase gain 1,910
Total other expense (21,478 ) (18,520 ) (79,657 ) (70,916 )
Loss before income taxes (44,349 ) (31,525 ) (124,942 ) (135,617 )
Income tax provision 7,828 5,101 16,526 14,168
Net loss $ (52,177 ) $ (36,626 ) $ (141,468 ) $ (149,785 )
Net loss per share, basic and diluted $ (10.44 ) $ (7.33 ) $ (28.29 ) $ (29.96 )
Weighted average successor ordinary shares outstanding, basic and diluted 5,000 5,000 5,000 5,000
Vantage Drilling International
Supplemental Operating Data
(Unaudited, in thousands, except percentages)
Three Months Ended December 31,  Year Ended December 31, 
2018 2017 2018 2017
Operating costs and expenses
Jackups $ 16,396 $ 19,623 $ 65,492 $ 72,279
Deepwater 20,217 16,248 79,655 65,032
Operations support 2,274 2,893 12,888 12,334
Reimbursables 3,212 3,966 13,006 12,329
$ 42,099 $ 42,730 $ 171,041 $ 161,974
Utilization
Jackups 96.6 % 99.5 % 92.2 % 82.0 %
Deepwater 35.0 % 45.4 % 54.5 % 36.2 %
Vantage Drilling International
Consolidated Balance Sheet
(In thousands, except share and par value information)
(Unaudited)
December 31,
2018
December 31,
2017
ASSETS
Current assets
Cash and cash equivalents $ 224,967 $ 195,455
Restricted cash 10,362
Trade receivables 28,431 45,379
Inventory 45,195 43,955
Prepaid expenses and other current assets 17,278 13,207
Total current assets 326,233 297,996
Property and equipment
Property and equipment 996,139 904,584
Accumulated depreciation (208,836 ) (141,393 )
Property and equipment, net 787,303 763,191
Other assets 16,026 21,935
Total assets $ 1,129,562 $ 1,083,122
LIABILITIES AND SHAREHOLDERS’ EQUITY
Current liabilities
Accounts payable $ 44,372 $ 39,666
Accrued liabilities 17,983 25,117
Current maturities of long-term debt 4,430
Total current liabilities 62,355 69,213
Long–term debt, net of discount and financing costs of $12,914 and $56,174 1,109,011 919,939
Other long-term liabilities 22,889 17,195
Commitments and contingencies
Shareholders’ equity
Ordinary shares, $0.001 par value, 50 million shares authorized; 5,000,053 shares issued and outstanding 5 5
Additional paid-in capital 373,972 373,972
Accumulated deficit (438,670 ) (297,202 )
Total shareholders’ equity (64,693 ) 76,775
Total liabilities and shareholders’ equity $ 1,129,562 $ 1,083,122
Vantage Drilling International
Consolidated Statement of Cash Flows
(In thousands)
(Unaudited)
Year Ended December 31, 
2018 2017
CASH FLOWS FROM OPERATING ACTIVITIES
Net loss $ (141,468 ) $ (149,785 )
Adjustments to reconcile net loss to net cash provided by (used in) operating activities:
Depreciation expense 70,447 73,925
Amortization of debt financing costs 556 468
Amortization of debt discount 49,417 48,925
Amortization of contract value 6,311 4,686
PIK interest on the Convertible Notes 7,648 7,604
Share-based compensation expense 7,165 3,997
Gain on bargain purchase (1,910 )
Non-cash loss on debt extinguishment 975
Deferred income tax benefit 1,742 (1,964 )
(Gain) loss on disposal of assets (1,301 ) 335
Changes in operating assets and liabilities:
Trade receivables 16,948 (24,529 )
Inventory 1,911 1,251
Prepaid expenses and other current assets (6,121 ) 1,267
Other assets 2,339 2,638
Accounts payable 4,706 4,383
Accrued liabilities and other long-term liabilities (8,481 ) 8,836
Net cash provided by (used in) operating activities 12,794 (19,873 )
CASH FLOWS FROM INVESTING ACTIVITIES
Additions to property and equipment (14,316 ) (2,224 )
Cash paid for Soehanah acquisition (85,000 )
Cash paid for Vantage 260 acquisition (13,000 )
Net proceeds from sale of Vantage 260 4,703 255
Net cash used in investing activities (94,613 ) (14,969 )
CASH FLOWS FROM FINANCING ACTIVITIES
Repayment of long-term debt (216,265 ) (1,430 )
Proceeds from issuance of 9.25% First Lien Notes 350,000
Debt issuance costs (7,688 )
Debt prepayment costs (296 )
Net cash provided by (used in) financing activities 125,751 (1,430 )
Net increase (decrease) in cash and cash equivalents 43,932 (36,272 )
Unrestricted and restricted cash and cash equivalents—beginning of period 195,455 231,727
Unrestricted and restricted cash and cash equivalents—end of period $ 239,387 $ 195,455


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