Vantage Drilling Company Reports First Quarter Results for 2015

HOUSTON, TX--(Marketwired - May 7, 2015) - Vantage Drilling Company ("Vantage" or the "Company") (NYSE MKT: VTG) reports net income for the three months ended March 31, 2015 of $21.4 million or $.06 per diluted share as compared to earnings of $24.8 million or $.07 per diluted share for the three months ended March 31, 2014.

The three months ended March 31, 2015 includes an approximately $20.6 million gain on the early retirement of debt. This gain represents the discount to the face value of debt that we purchased in the open market, net of writing off deferred financing costs. While this gain is not taxable, it is still included in our calculation of annual effective tax rate which required us to record an additional adjustment to our tax provision for the three months ended March 31, 2015 of approximately $5.0 million.

The total debt retirement for the first quarter, including scheduled maturities and open market purchase of debt, totaled approximately $82.9 million at face value. Following the end of the quarter, we continued to acquire debt in the open market and have retired approximately $109.2 million of debt year to date with an annualized interest savings of approximately $7.2 million.

Paul Bragg, Chairman and Chief Executive Officer, commented, "During the 1^st quarter, we continued our strong operating performance and maintained our focus on strengthening the balance sheet. In the last six quarters, we have now retired over $300 million of outstanding debt and greatly reduced our current debt, improving our 2015 and 2016 liquidity."

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)
(Unaudited)
				Three Months Ended March 31,
				2015				2014
Revenue
	Contract drilling services			$	207,981			$	214,932
	Management fees				1,881				4,582
	Reimbursables				7,787				12,951
		Total revenue			217,649				232,465
Operating costs and expenses
	Operating costs				96,108				101,722
	General and administrative				8,865				8,115
	Depreciation				31,623				31,625
		Total operating costs and expenses			136,596				141,462
Income from operations					81,053				91,003
Other income (expense)
	Interest income				6				13
	Interest expense and other financing charges				(50,554	)			(54,487	)
	Gain (loss) on debt extinguishment				20,606				(106	)
	Other, net				(338	)			779
		Total other income (expense)			(30,280	)			(53,801	)
Income before income taxes					50,773				37,202
Income tax provision					29,343				12,378
Net income				$	21,430			$	24,824
Earnings per share
	Basic			$	0.07			$	0.08
	Diluted			$	0.06			$	0.07

Vantage Drilling Company
Supplemental Operating Data
(Unaudited, in thousands, except percentages)
		Three Months Ended March 31,
		2015				2014
Operating costs and expenses
Jackups		$	24,263			$	23,760
Deepwater			56,084				55,810
Operations support			9,324				10,759
Reimbursables			6,437				11,393
		$	96,108			$	101,722
Utilization
Jackups			96.1	%			100.0	%
Deepwater			93.6	%			96.5	%

Vantage Drilling Company
Consolidated Balance Sheet
(In thousands, except par value information)
				March 31, 2015				December 31, 2014
				(Unaudited)
ASSETS
Current assets
	Cash and cash equivalents			$	78,829			$	82,812
	Trade receivables				159,656				153,428
	Inventory				68,558				65,892
	Prepaid expenses and other current assets				22,821				28,618
		Total current assets			329,864				330,750
Property and equipment
	Property and equipment				3,534,527				3,524,566
	Accumulated depreciation				(437,927	)			(406,674	)
		Property and equipment, net			3,096,600				3,117,892
Other assets
	Investment in joint venture				1,132				1,318
	Other assets				73,247				79,897
		Total other assets			74,379				81,215
Total assets				$	3,500,843			$	3,529,857
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities
	Accounts payable			$	48,821			$	59,139
	Accrued liabilities				145,980				101,537
	Current maturities of long-term debt, net of discount of $650 and $1,181				90,289				95,378
		Total current liabilities			285,090				256,054
Long-term debt, net of discount of $21,862 and $25,875 and current maturities					2,559,531				2,632,802
Other long-term liabilities					77,286				85,327
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; 310,932 and 307,808 shares issued and outstanding				311				308
	Additional paid-in capital				906,965				905,136
	Accumulated deficit				(328,340	)			(349,770	)
		Total shareholders' equity			578,936				555,674
Total liabilities and shareholders' equity				$	3,500,843			$	3,529,857

Vantage Drilling Company
Consolidated Statement of Cash Flows
(In thousands)
(Unaudited)
				Three Months Ended March 31,
				2015				2014
CASH FLOWS FROM OPERATING ACTIVITIES
Net income				$	21,430			$	24,824
Adjustments to reconcile net income to net cash provided by operating activities:
	Depreciation expense				31,623				31,625
	Amortization of debt financing costs				2,694				2,880
	Amortization of debt discount				2,957				2,839
	Non-cash (gain) loss on debt extinguishment				(20,597	)			106
	Share-based compensation expense				1,832				2,141
	Deferred income tax benefit				(525	)			(57	)
	Equity in loss of joint venture				186				108
	Loss on disposal of assets				20				104
Changes in operating assets and liabilities:
	Restricted cash				--				2,125
	Trade receivables				(6,228	)			(47,985	)
	Inventory				(2,665	)			(3,071	)
	Prepaid expenses and other current assets				6,296				3,318
	Other assets				2,904				1,021
	Accounts payable				(10,318	)			(3,954	)
	Accrued liabilities and other long-term liabilities				34,882				33,296
		Net cash provided by operating activities			64,491				49,320
CASH FLOWS FROM INVESTING ACTIVITIES
	Additions to property and equipment				(8,798	)			(9,371	)
		Net cash used in investing activities			(8,798	)			(9,371	)
CASH FLOWS FROM FINANCING ACTIVITIES
	Repayment of long-term debt				(59,676	)			(19,374	)
	Repayment of revolving credit agreement, net				--				(10,000	)
		Net cash used in financing activities			(59,676	)			(29,374	)
		Net increase (decrease) in cash and cash equivalents			(3,983	)			10,575
	Cash and cash equivalents -- beginning of period				82,812				54,686
	Cash and cash equivalents -- end of period			$	78,829			$	65,261