Vantage Drilling Company Reports First Quarter 2014 Results

HOUSTON, TX--(Marketwired - May 6, 2014) - Vantage Drilling Company ("Vantage" or the "Company") (NYSE MKT: VTG) reports net income for the three months ended March 31, 2014 of $24.8 million or $0.07 per diluted share as compared to a net loss of $24.9 million or ($0.08) per diluted share excluding approximately $98.3 million of charges for the early retirement of debt, for the three months ended March, 31, 2013. Including the charges for the early retirement of debt for the three months ended March 31, 2013, the Company reported a net loss of $123.2 million or ($0.41) per diluted share.

Paul Bragg, Chairman and Chief Executive Officer, commented, "We are pleased to announce another strong quarter of operating results. We also made good initial progress on our debt reduction plan, paying down almost $30 million during the quarter and we remain on track to reach our goal for 2014 given our contracted backlog and high operating efficiency across the fleet." 

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,
				2014				2013
Revenues
	Contract drilling services			$	214,932			$	134,664
	Management fees				4,582				3,198
	Reimbursables				12,951				9,139
		Total revenues			232,465				147,001
Operating costs and expenses
	Operating costs				101,722				75,317
	General and administrative				8,115				7,427
	Depreciation				31,625				24,861
		Total operating costs and expenses			141,462				107,605
Income from operations					91,003				39,396
Other income (expense)
	Interest income				13				96
	Interest expense and other financing charges				(54,487	)			(59,662	)
	Loss on debt extinguishment				(106	)			(98,327	)
	Other, net				779				901
		Total other income (expense)			(53,801	)			(156,992	)
Income (loss) before income taxes					37,202				(117,596	)
Income tax provision					12,378				5,605
Net income (loss)				$	24,824			$	(123,201	)
Earnings (loss) per share
	Basic			$	0.08			$	(0.41	)
	Diluted			$	0.07			$	(0.41	)

Vantage Drilling Company
Supplemental Operating Data
(Unaudited, in thousands, except percentages)
		Three Months Ended March 31,
		2014				2013
Operating costs and expenses
Jackups		$	23,760			$	21,845
Deepwater			55,810				36,723
Operations support			10,759				7,984
Reimbursables			11,393				8,765
		$	101,722			$	75,317
Utilization
Jackups			100.0	%			98.4	%
Deepwater			96.5	%			88.5	%

Vantage Drilling Company
Consolidated Balance Sheet
(In thousands, except par value information)
				March 31, 2014				December 31, 2013
				(Unaudited)
ASSETS
Current assets
	Cash and cash equivalents			$	65,261			$	54,686
	Restricted cash				--				2,125
	Trade receivables				216,639				168,654
	Inventory				58,875				55,804
	Prepaid expenses and other current assets				20,456				23,717
		Total current assets			361,231				304,986
Property and equipment
	Property and equipment				3,482,799				3,472,407
	Accumulated depreciation				(313,334	)			(281,759	)
		Property and equipment, net			3,169,465				3,190,648
Other assets
	Investment in joint venture				32,374				32,482
	Other assets				96,018				100,027
		Total other assets			128,392				132,509
Total assets				$	3,659,088			$	3,628,143
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities
	Accounts payable			$	62,906			$	66,860
	Accrued liabilities				133,245				97,481
	Current maturities of long-term debt and revolving credit agreement				53,500				63,500
		Total current liabilities			249,651				227,841
Long-term debt, net of discount of $36,486 and $39,325					2,835,514				2,852,050
Other long-term liabilities					41,502				42,796
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; 305,997 and 304,101 shares issued and outstanding				306				304
	Additional paid-in capital				899,067				896,928
	Accumulated deficit				(366,952	)			(391,776	)
		Total shareholders' equity			532,421				505,456
Total liabilities and shareholders' equity				$	3,659,088			$	3,628,143

Vantage Drilling Company
Consolidated Statement of Cash Flows
(In thousands)
(Unaudited)
				Three Months Ended March 31,
				2014				2013
CASH FLOWS FROM OPERATING ACTIVITIES
Net income (loss)				$	24,824			$	(123,201	)
Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities:
	Depreciation expense				31,625				24,861
	Amortization of debt financing costs				2,964				3,995
	Amortization of debt discount (premium)				2,839				(97	)
	Non-cash loss on debt extinguishment				106				6,070
	Share-based compensation expense				2,141				2,069
	Deferred income tax expense (benefit)				(57	)			778
	Equity in loss of joint venture				108				133
	Loss on disposal of assets				104				1
Changes in operating assets and liabilities:
	Restricted cash				2,125				--
	Trade receivables				(47,985	)			17,521
	Inventory				(3,071	)			(4,319	)
	Prepaid expenses and other current assets				3,318				3,963
	Other assets				1,021				290
	Accounts payable				(3,954	)			(9,713	)
	Accrued liabilities and other long-term liabilities				33,296				(42,762	)
		Net cash provided by (used in) operating activities			49,404				(120,411	)
CASH FLOWS FROM INVESTING ACTIVITIES
	Additions to property and equipment				(9,371	)			(15,135	)
	Proceeds from sale of property and equipment				--				2
		Net cash used in investing activities			(9,371	)			(15,133	)
CASH FLOWS FROM FINANCING ACTIVITIES
	Proceeds from issuance of senior secured notes, net				--				775,000
	Proceeds from issuance of term loan, net				--				344,750
	Repayment of long-term debt				(19,374	)			(1,006,249	)
	Proceeds from or (repayment of) revolving credit agreement, net				(10,000	)			--
	Debt issuance costs				(84	)			(23,683	)
		Net cash provided by (used in) financing activities			(29,458	)			89,818
		Net increase (decrease) in cash and cash equivalents			10,575				(45,726	)
	Cash and cash equivalents--beginning of period				54,686				502,726
	Cash and cash equivalents--end of period			$	65,261			$	457,000