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. 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 March 31,  
2023   2022  
Revenue
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
Utilization
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)  
(Unaudited)  
             
March 31, 2023   December 31, 2022  
       
ASSETS        
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
LIABILITIES AND SHAREHOLDERS’ EQUITY
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)  
(Unaudited)  
    Three Months Ended March 31,  
2023   2022  
CASH FLOWS FROM OPERATING ACTIVITIES
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 )
CASH FLOWS FROM INVESTING ACTIVITIES
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 )
CASH FLOWS FROM FINANCING ACTIVITIES
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)  
(Unaudited)  
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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