Vantage Drilling Company Reports Fourth Quarter and Full Year 2013 Results

Published:

HOUSTON, TX -- (Marketwired) -- 02/28/14 -- Vantage Drilling Company ("Vantage" or the "Company") (NYSE MKT: VTG) reports record net income for the three months ended December 31, 2013 of $30.3 million or $0.09 per diluted share as compared to a net loss of $11.5 million or ($0.04) per diluted share excluding approximately $122.1 million of charges for the early retirement of debt, for the three months ended December 31, 2012. Including the charges for the early retirement of debt in the prior year, the company reported a net loss of $133.6 million or ($0.45) per diluted share.

For the twelve months ended December 31, 2013, Vantage reports net income of approximately $16.5 million or $0.05 per diluted share excluding approximately $98.3 million of charges for the early retirement of debt as compared to a net loss of $20.7 million or ($0.07) per diluted share for the twelve months ended December 31, 2012, excluding approximately $124.6 million of charges for the early retirement of debt. Including the charges for the early retirement of debt, the company reported losses of $81.8 million or ($0.27) per diluted share and $145.3 million or ($0.50) per diluted share for the twelve months ended December 31, 2013 and 2012, respectively.

Paul Bragg, Chairman and Chief Executive Officer, commented, "We are pleased to announce record revenue, EBITDA and net income for the quarter with exceptional operating performance of all seven of our completed rigs. These exceptional results are due not only to the quality of our fleet, but also to the dedicated efforts of our workforce."

Vantage, a Cayman Islands exempted company, is an offshore drilling contractor, with an owned fleet of three ultra-deepwater drillships, the Platinum Explorer, the Titanium Explorer and the Tungsten Explorer, as well as an additional ultra-deepwater drillship, the Cobalt Explorer, now under construction, and four Baker Marine Pacific Class 375 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. Vantage also provides construction supervision services for, and will operate and manage, drilling units owned by others. Through its fleet of seven owned drilling units, Vantage is a provider of offshore contract drilling services globally to major, national and large independent oil and natural gas companies.

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 Drilling Company Consolidated Statement of Operations (In thousands, except per share amounts) Three Months Ended Twelve Months Ended December 31, December 31, ------------------------ ------------------------ 2013 2012 2013 2012 ----------- ----------- ----------- ----------- (Unaudited) (Unaudited) Revenues Contract drilling services $ 216,775 $ 113,696 $ 666,129 $ 423,897 Management fees 5,111 1,961 14,622 6,605 Reimbursables 16,651 7,307 51,309 40,970 ----------- ----------- ----------- ----------- Total revenues 238,537 122,964 732,060 471,472 ----------- ----------- ----------- ----------- Operating costs and expenses Operating costs 99,349 58,731 335,915 230,089 General and administrative 9,240 7,416 32,612 26,002 Depreciation 31,882 19,228 106,609 68,747 ----------- ----------- ----------- ----------- Total operating costs and expenses 140,471 85,375 475,136 324,838 ----------- ----------- ----------- ----------- Income from operations 98,066 37,589 256,924 146,634 Other income (expense) Interest income 26 42 221 90 Interest expense and other financing charges (55,853) (44,600) (214,149) (149,118) Loss on debt extinguishment - (122,071) (98,327) (124,599) Other, net (574) (205) 1,621 595 ----------- ----------- ----------- ----------- Total other income (expense) (56,401) (166,834) (310,634) (273,032) ----------- ----------- ----------- ----------- Income (loss) before income taxes 41,665 (129,245) (53,710) (126,398) Income tax provision 11,349 4,365 28,115 18,906 ----------- ----------- ----------- ----------- Net income (loss) $ 30,316 $ (133,610) $ (81,825) $ (145,304) Earnings (loss) per share Basic $ 0.10 $ (0.45) $ (0.27) $ (0.50) Diluted $ 0.09 $ (0.45) $ (0.27) $ (0.50) Vantage Drilling Company Supplemental Operating Data (Unaudited, in thousands, except percentages) Three Months Ended Twelve Months Ended December 31, December 31, ------------------------ ------------------------ 2013 2012 2013 2012 ----------- ----------- ----------- ----------- Operating costs and expenses Jackups $ 21,288 $ 22,575 $ 89,253 $ 87,724 Deepwater 56,092 24,010 164,775 82,044 Operations support 8,108 5,695 33,267 23,449 Reimbursables 13,861 6,451 48,620 36,872 ----------- ----------- ----------- ----------- $ 99,349 $ 58,731 $ 335,915 $ 230,089 ----------- ----------- ----------- ----------- Utilization Jackups 89.4% 88.3% 87.1% 96.7% Deepwater 90.3% 97.2% 93.3% 96.4% Vantage Drilling Company Consolidated Balance Sheet (In thousands, except par value information) December 31, 2013 2012 ------------- ------------- ASSETS Current assets Cash and cash equivalents $ 54,686 $ 502,726 Restricted cash 2,125 3,515 Trade receivables 168,654 119,452 Inventory 55,804 37,944 Prepaid expenses and other current assets 23,717 25,208 ------------- ------------- Total current assets 304,986 688,845 ------------- ------------- Property and equipment Property and equipment 3,472,407 2,893,837 Accumulated depreciation (281,759) (176,331) ------------- ------------- Property and equipment, net 3,190,648 2,717,506 ------------- ------------- Other assets Investment in joint venture 32,482 31,320 Other assets 100,027 92,536 ------------- ------------- Total other assets 132,509 123,856 ------------- ------------- Total assets $ 3,628,143 $ 3,530,207 LIABILITIES AND SHAREHOLDERS' EQUITY Current liabilities Accounts payable $ 66,860 $ 50,909 Accrued liabilities 97,481 123,484 Current maturities of long-term debt and revolving credit agreement 63,500 31,250 ------------- ------------- Total current liabilities 227,841 205,643 ------------- ------------- Long-term debt, net of discount of $39,325 and $11,940 2,852,050 2,710,559 Other long-term liabilities 42,796 45,520 Commitments and contingencies Shareholders' equity Preferred shares, $0.001 par value, 10,000 shares authorized; none issued or outstanding - - Ordinary shares, $0.001 par value, 500,000 shares authorized; 304,101 and 299,647 shares issued and outstanding 304 299 Additional paid-in capital 896,928 878,137 Accumulated deficit (391,776) (309,951) ------------- ------------- Total shareholders' equity 505,456 568,485 ------------- ------------- Total liabilities and shareholders' equity $ 3,628,143 $ 3,530,207 Vantage Drilling Company Consolidated Statement of Cash Flows (In thousands) Year Ended December 31, ---------------------------- 2013 2012 ------------- ------------- CASH FLOWS FROM OPERATING ACTIVITIES Net loss $ (81,825) $ (145,304) Adjustments to reconcile net loss to net cash provided by (used in) operating activities: Depreciation expense 106,609 68,747 Amortization of debt financing costs 12,356 16,930 Amortization of debt discount (premium) 7,523 (3,828) Non-cash loss on debt extinguishment 6,070 9,546 Share-based compensation expense 7,064 7,073 Deferred income tax expense 997 3,785 Equity in loss of joint venture 513 49 Loss on disposal of assets 1,603 1,321 Changes in operating assets and liabilities: Restricted cash 1,390 3,513 Trade receivables (49,202) (52,207) Inventory (17,860) (13,568) Prepaid expenses and other current assets 1,169 (9,724) Other assets (12,654) 318 Accounts payable 15,951 4,546 Accrued liabilities and other long-term liabilities (48,135) (41,762) ------------- ------------- Net cash used in operating activities (48,431) (150,565) ------------- ------------- CASH FLOWS FROM INVESTING ACTIVITIES Additions to property and equipment (564,319) (874,117) Investment in joint venture - (31,000) Proceeds from sale of property and equipment 22 - ------------- ------------- Net cash used in investing activities (564,297) (905,117) ------------- ------------- CASH FLOWS FROM FINANCING ACTIVITIES Proceeds from issuance of senior secured notes, net 775,000 1,987,000 Proceeds from the issuance of term loan, net 344,750 490,000 Proceeds from the issuance of senior convertible notes 100,000 50,000 Repayment of long-term debt (1,033,874) (1,006,251) Proceeds from revolving credit agreement, net 10,000 - Debt issuance costs (31,188) (72,372) ------------- ------------- Net cash provided by financing activities 164,688 1,448,377 ------------- ------------- Net increase (decrease) in cash and cash equivalents (448,040) 392,695 Cash and cash equivalents-beginning of year 502,726 110,031 ------------- ------------- Cash and cash equivalents-end of year $ 54,686 $ 502,726

Public & Investor Relations Contact: Paul A. Bragg Chairman & Chief Executive Officer Vantage Drilling Company (281) 404-4700