November 10, 2016 - 7:00 AM EST
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Vantage Drilling International Reports Third Quarter Results for 2016

HOUSTON, TX--(Marketwired - Nov 10, 2016) - Vantage Drilling International ("Vantage" or the "Company") reported a net loss of approximately $41.5 million or ($8.31) per share for the three months ended September 30, 2016 as compared to the Predecessor reporting net income of approximately $5.2 million for the three months ended September 30, 2015. The weighted-average shares outstanding for the three months ended September 30, 2016 was 5,000,053 whereas in the prior year, as a wholly-owned subsidiary, the Predecessor did not have a comparable outstanding ordinary shares.

Upon emergence from the Company's Chapter 11 restructuring on February 10, 2016, Vantage adopted fresh-start accounting, which resulted in the Company becoming a new entity for financial reporting purposes. References to "Successor" relate to the financial position and results of operations of the reorganized Vantage as of and subsequent to February 10, 2016. References to "Predecessor" refer to the financial position of Vantage as of and prior to February 10, 2016 and the results of operations prior to February 10, 2016. As a result of the application of fresh-start accounting and the effects of the implementation of our Plan of Reorganization, the financial statements on or after February 10, 2016 are not comparable with the financial statements prior to that date.

For the period from February 10, 2016 to September 30, 2016, Vantage reported a net loss of approximately $106.3 million or ($21.26) per share and the Predecessor for the period January 1, 2016 to February 10, 2016 reported a net loss of approximately $471.0 million. For the nine months ended September 30, 2015, the Predecessor reported net income of approximately $55.8 million.

As of September 30, 2016, Vantage had approximately $241.1 million of available cash as compared to $240.5 million as of June 30, 2016. Additionally, Vantage had $25.7 million available for issuance of letters of credit under its revolving letter of credit facility at the end of the quarter. Ihab Toma, CEO, commented. "Despite very challenging market conditions, we were awarded a new contract for the Emerald Driller in Qatar and continued our strong performance across our operating fleet. We remain committed to maintaining this performance for our customers while operating safely, managing costs and preserving our strong balance sheet position."

Vantage, a Cayman Islands exempted company, is an offshore drilling contractor, with a fleet of three ultra-deepwater drillships and four ultra-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 large independent oil and natural gas companies. Vantage also provides construction supervision 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.

   
Vantage Drilling International  
Consolidated Statement of Operations  
(In thousands, except per share amounts)  
(Unaudited)  
                             
  Successor     Predecessor  
  Three Months Ended September 30, 2016     Period from February 10, 2016 to September 30, 2016     Period from January 1, 2016 to February 10, 2016     Three Months Ended September 30, 2015     Nine Months Ended September 30, 2015  
Revenue                                      
  Contract drilling services $ 34,755     $ 99,715     $ 20,891       197,134       608,003  
  Management fees   993       3,664       752       1,923       5,706  
  Reimbursables   4,194       14,860       1,897       11,033       31,285  
    Total revenue   39,942       118,239       23,540       210,090       644,994  
Operating costs and expenses                                      
  Operating costs   30,983       93,387       25,213       93,950       284,009  
  General and administrative   10,128       27,991       2,558       5,058       17,749  
  Depreciation   18,977       49,434       10,696       31,764       95,168  
    Total operating costs and expenses   60,088       170,812       38,467       130,772       396,926  
Income (loss) from operations   (20,146 )     (52,573 )     (14,927 )     79,318       248,068  
Other income (expense)                                      
  Interest income   11       26       3       28       53  
  Interest expense and other financing charges (contractual interest of $23,219 for the period from January 1, 2016 to February 10, 2016)   (18,722 )     (48,144 )     (1,728 )     (46,182 )     (138,209 )
  Gain on debt extinguishment   -       -       -       -       10,823  
  Other, net   669       987       (69 )     465       2,285  
  Reorganization items   35       (606 )     (452,923 )     -       -  
    Total other expense   (18,007 )     (47,737 )     (454,717 )     (45,689 )     (125,048 )
Income (loss) before income taxes   (38,153 )     (100,310 )     (469,644 )     33,629       123,020  
Income tax provision   3,373       5,978       2,371       28,439       66,590  
Net income (loss)   (41,526 )     (106,288 )     (472,015 )     5,190       56,430  
Net income (loss) attributable to noncontrolling interests   -       -       (969 )     (4 )     663  
Net income (loss) attributable to VDI $ (41,526 )   $ (106,288 )   $ (471,046 )   $ 5,194     $ 55,767  
  Net loss per share, basic and diluted $ (8.31 )   $ (21.26 )     N/A       N/A       N/A  
  Weighted average successor ordinary shares outstanding, basic and diluted   5,000       5,000       N/A       N/A       N/A  
                                       
                                       
                                       
Vantage Drilling International  
Supplemental Operating Data  
(Unaudited, in thousands, except percentages)  
   
  Successor     Predecessor  
  Three Months Ended September 30, 2016     Period from February 10, 2016 to September 30, 2016     Period from January 1, 2016 to February 10, 2016     Three Months Ended September 30, 2015     Nine Months Ended September 30, 2015  
Operating costs and expenses                                      
Jackups $ 8,836     $ 29,555     $ 5,975     $ 19,990     $ 65,001  
Deepwater   16,045       44,563       15,550       60,127       177,026  
Operations support   2,645       7,456       2,219       6,005       21,693  
Reimbursables   3,457       11,813       1,469       7,828       20,289  
  $ 30,983     $ 93,387     $ 25,213     $ 93,950     $ 284,009  
                                       
Utilization                                      
Jackups   25.6 %     43.4 %     53.6 %     72.0 %     81.0 %
Deepwater   33.1 %     33.2 %     33.3 %     87.1 %     92.9 %
                                       
                                       
                                       
Vantage Drilling International  
Consolidated Balance Sheet  
(In thousands, except share and par value information)  
(Unaudited)  
             
    Successor     Predecessor  
    September 30,
2016
    December 31,
2015
 
ASSETS            
Current assets                
  Cash and cash equivalents   $ 241,099     $ 203,420  
  Trade receivables     20,892       70,722  
  Inventory     46,098       64,495  
  Prepaid expenses and other current assets     15,261       22,106  
    Total current assets     323,350       360,743  
Property and equipment                
  Property and equipment     900,352       3,481,006  
  Accumulated depreciation     (49,177 )     (532,619 )
    Property and equipment, net     851,175       2,948,387  
Other assets     13,682       23,050  
Total assets   $ 1,188,207     $ 3,332,180  
                 
LIABILITIES AND SHAREHOLDERS' EQUITY                
Current liabilities                
  Accounts payable   $ 36,683     $ 49,437  
  Accrued liabilities     19,799       21,702  
  Current maturities of long-term debt     1,430       -  
  VDC note payable     -       61,477  
    Total current liabilities     57,912       132,616  
Long-term debt, net of discount and financing costs of $117,835 and $0     851,682       -  
Other long-term liabilities     10,924       33,097  
Liabilities subject to compromise     -       2,694,456  
Commitments and contingencies                
Shareholders' equity                
  Predecessor ordinary shares, $0.001 par value, 50 million shares authorized; one thousand shares issued and outstanding     -       -  
  Predecessor additional paid-in capital     -       595,119  
  Successor ordinary shares, $0.001 par value, 50 million shares authorized; 5,000,053 shares issued and outstanding     5       -  
  Successor additional paid-in capital     373,972       -  
  Accumulated deficit     (106,288 )     (138,363 )
    Total VDI shareholders' equity     267,689       456,756  
Noncontrolling interests     -       15,255  
  Total equity     267,689       472,011  
Total liabilities and equity   $ 1,188,207     $ 3,332,180  
                 
                 
                 
Vantage Drilling International  
Consolidated Statement of Cash Flows  
(In thousands)  
(Unaudited)  
                   
    Successor     Predecessor  
    Period from February 10, 2016 to September 30, 2016     Period from January 1, 2016 to February 10, 2016     Nine Months Ended September 30, 2015  
CASH FLOWS FROM OPERATING ACTIVITIES                        
Net income (loss)   $ (106,288 )   $ (472,015 )   $ 56,430  
Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities:                        
  Depreciation expense     49,434       10,696       95,168  
  Amortization of debt financing costs     310       -       6,349  
  Amortization of debt discount     31,075       -       1,813  
  Reorganization items     -       430,210       -  
  Non-cash gain on debt extinguishment     -       -       (10,814 )
  Share-based compensation expense     76       -       -  
  Deferred income tax benefit     (2,660 )     -       (997 )
  Loss on disposal of assets     634       -       343  
Changes in operating assets and liabilities:                        
  Restricted cash     1,000       (1,000 )     -  
  Trade receivables     53,405       (3,575 )     48,436  
  Inventory     (1,856 )     223       657  
  Prepaid expenses and other current assets     (47 )     6,893       9,636  
  Other assets     (1,823 )     941       7,789  
  Accounts payable     2,136       (14,890 )     (152,300 )
  Accrued liabilities and other long-term liabilities     (22,113 )     21,152       6,945  
    Net cash provided by (used in) operating activities     3,283       (21,365 )     69,455  
CASH FLOWS FROM INVESTING ACTIVITIES                        
  Additions to property and equipment     (10,107 )     116       (31,200 )
    Net cash provided by (used in) investing activities     (10,107 )     116       (31,200 )
CASH FLOWS FROM FINANCING ACTIVITIES                        
  Repayment of long-term debt     (1,072 )     (7,000 )     (67,980 )
  Proceeds from issuance of 10% Second Lien Notes     -       76,125       -  
  Proceeds from borrowings under credit agreements     -       -       150,000  
  Distributions to VDC     -       -       (498 )
  Debt issuance costs     (51 )     (2,250 )     -  
    Net cash provided by (used in) financing activities     (1,123 )     66,875       81,522  
    Net increase (decrease) in cash and cash equivalents     (7,947 )     45,626       119,777  
  Cash and cash equivalents-beginning of period     249,046       203,420       75,801  
  Cash and cash equivalents-end of period   $ 241,099     $ 249,046     $ 195,578  
                           


Source: Marketwired (Canada) (November 10, 2016 - 7:00 AM EST)

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