HOUSTON, TX--(Marketwire - March 16, 2011) - Vantage Drilling Company ("Vantage") (
Net loss for the fiscal year ended December 31, 2010 was ($19.8) million or ($0.08) per share, excluding $3.8 million ($.01 per share) of charges associated with the acquisition of the Platinum Explorer and $24.0 million ($.09 per share) of charges associated with refinancing of debt in July 2011. Including the acquisition charges and refinancing charges, the Company reported a net loss of ($47.6) million or ($0.19) per diluted share for the three year ended December 31, 2010 as compared to a net income of $8.8 million or $0.07 per share for the year ended December 31, 2009.
Paul Bragg, Chairman and Chief Executive Officer, commented, "During 2010, we completed construction and deployment of the final unit of our initial five-rig owned fleet. All of the units were delivered on time and within budget and each was contracted prior to completion. Since the start up of initial rig operations almost 26 months ago, we have experienced operational excellence across the fleet, providing safe and efficient drilling services to our customers. Today, Vantage rigs are employed on some of the industry's most challenging projects."
On July 30, 2010, Vantage acquired the 55% interest in Mandarin Drilling Corporation ("Mandarin"), from F3 Capital for $139.7 million. The sole asset of Mandarin was the ultra-deepwater drillship Platinum Explorer which was then still under construction. F3 Capital was wholly owned by Hsin-Chi Su, one of the Company's directors and a significant shareholder of the Company.
In connection with the acquisition of Mandarin, Vantage issued $1.0 billion of 11.5% Senior Secured First Lien Notes due 2015. The notes have a maturity of five years from the date of issuance and are fully and unconditionally guaranteed by Vantage and certain of its subsidiaries. In addition to using the proceeds to fund the Mandarin acquisition, Vantage also retired certain of its outstanding credit facilities and its 13.5% Senior Secured Notes.
The construction of the Platinum Explorer was completed and the Company took delivery of the drillship on November 15, 2010. The Platinum Explorer mobilized to India and commenced its five year drilling contract with Oil & Natural Gas Company on December 29, 2010.
Vantage, a Cayman Islands exempted company, is an offshore drilling contractor, with four Baker Marine Pacific Class 375 ultra-premium jackup drilling rigs operating, and an ultra deepwater drillship, the Platinum Explorer. Vantage is also providing management services for four other ultra-deepwater drillships.
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
December 31,
------------------------
2010 2009
----------- -----------
Revenues
Contract drilling services $ 45,881 $ 22,982
Management fees 4,717 3,701
Reimbursables 34,294 11,875
----------- -----------
Total revenues 84,892 38,558
----------- -----------
Operating costs and expenses
Operating costs, excluding impairment and
termination costs 63,441 30,678
General and administrative 6,016 4,550
Depreciation 8,773 4,295
----------- -----------
Total operating expenses 78,230 39,523
----------- -----------
Income (loss) from operations 6,662 (965)
Other income (expense)
Interest income 166 10
Interest expense (14,219) (4,174)
Other income (58) 293
----------- -----------
Total other income (expense) (14,111) (3,871)
----------- -----------
Income before income taxes (7,449) (4,836)
Income tax provision (benefit) 5,516 (562)
----------- -----------
Net income (loss) $ (12,965) $ (4,274)
=========== ===========
Earnings per share
Basic $ (0.05) $ (0.02)
Diluted $ (0.05) $ (0.02)
Vantage Drilling Company
Consolidated Statement of Operations
(In thousands, except per share amounts)
Year Ended December 31,
-------------------------------
2010 2009 2008
--------- --------- ---------
Revenues
Contract drilling services $ 178,514 $ 69,919 $ -
Management fees 18,107 18,830 825
Reimbursables 81,782 22,744 88
--------- --------- ---------
Total revenues 278,403 111,493 913
--------- --------- ---------
Operating costs and expenses
Operating costs, excluding impairment
and termination costs 176,387 66,228 5,365
General and administrative 21,719 15,690 9,334
Depreciation 33,384 11,218 101
Impairment and termination costs - - 38,286
--------- --------- ---------
Total operating expenses 231,490 93,136 53,086
--------- --------- ---------
Income (loss) from operations 46,913 18,357 (52,173)
Other income (expense)
Interest income 562 23 4,095
Interest expense (49,827) (8,178) (56)
Loss on debt extinguishment (24,006) - -
Loss on acquisition of subsidiary (3,780) - -
Other income 1,510 609 86
--------- --------- ---------
Total other income (expense) (75,541) (7,546) 4,125
--------- --------- ---------
Income (loss) before income taxes (28,628) 10,811 (48,048)
Income tax provision (benefit) 18,951 1,972 (670)
--------- --------- ---------
Net income (loss) $ (47,579) $ 8,839 $ (47,378)
========= ========= =========
Earnings (loss) per share
Basic $ (0.19) $ 0.07 $ (0.78)
Diluted $ (0.19) $ 0.07 $ (0.78)
Vantage Drilling Company
Consolidated Balance Sheet
(In thousands, except par value information)
December 31,
------------------------
2010 2009
----------- -----------
ASSETS
Current assets
Cash and cash equivalents $ 120,443 $ 15,992
Restricted cash 29,004 28,863
Trade receivables 50,190 17,536
Inventory 19,760 10,789
Prepaid expenses and other current assets 11,472 8,040
----------- -----------
Total current assets 230,869 81,220
----------- -----------
Property and Equipment
Property and equipment 1,762,844 899,541
Accumulated depreciation (44,712) (11,329)
----------- -----------
Property and equipment, net 1,718,132 888,212
----------- -----------
Other Assets
Investment in joint venture - 120,306
Other assets 54,193 29,441
----------- -----------
Total other assets 54,193 149,747
----------- -----------
Total assets $ 2,003,194 $ 1,119,179
=========== ===========
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities
Accounts payable $ 32,332 $ 15,931
Accrued liabilities 75,159 14,285
Short-term debt 8,574 17,827
Current maturities of long-term debt - 16,000
----------- -----------
Total current liabilities 116,065 64,043
----------- -----------
Long-term debt, net of discount of $63,654 and
$4,021 1,103,480 378,078
Other long-term liabilities 13,498 -
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, 400,000
shares authorized; 289,713 and 187,277 shares
issued and outstanding 290 187
Additional paid-in capital 854,557 714,486
Accumulated deficit (84,696) (37,117)
Accumulated other comprehensive loss - (498)
----------- -----------
Total shareholders' equity 770,151 677,058
----------- -----------
Total liabilities and shareholders' equity $ 2,003,194 $ 1,119,179
=========== ===========
Vantage Drilling Company
Consolidated Statement of Cash Flows
(In thousands)
Year Ended December 31,
-------------------------------
2010 2009 2008
--------- --------- ---------
CASH FLOWS FROM OPERATING ACTIVITIES
Net income (loss) $ (47,579) $ 8,839 $ (47,378)
Adjustments to reconcile net income to net
cash provided by (used in) operating
activities:
Depreciation expense 33,384 11,218 101
Amortization of debt financing costs 5,389 1,486 513
Non-cash loss on debt extinguishment 12,280 - -
Non-cash loss on acquisition of
subsidiary 3,780 - -
Share-based compensation expense 6,141 5,030 2,420
Accretion of long-term debt 5,495 1,638 -
Amortization of debt discount 5,592 29 -
Deferred income tax expense (benefit) 1,492 746 (2,059)
Write-off of asset value, net - - 28,286
Changes in operating assets and
liabilities:
Restricted cash (142) (27,163) (1,700)
Trade receivables (40,791) (14,350) (3,277)
Inventory (8,971) (10,789) -
Prepaid expenses and other current
assets (3,433) (5,963) (1,618)
Other assets (11,945) (406) -
Accounts payable 16,402 12,104 3,765
Accrued liabilities 27,744 (14,792) 9,935
Short-term debt 10,899 4,942 1,240
--------- --------- ---------
Net cash provided by (used in)
operating activities 15,737 (27,431) (9,772)
--------- --------- ---------
CASH FLOWS FROM INVESTING ACTIVITIES
Acquisition of assets (79,777) - (213,397)
Additions to property and equipment (565,759) (313,631) (166,833)
Investment in joint venture - (157,404) -
Deferred acquisition costs - - -
Restricted cash held in trust account - - 273,109
--------- --------- ---------
Net cash used in investing activities (645,536) (471,035) (107,121)
--------- --------- ---------
CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from issuance of senior secured
notes, net of original issue discount
of $36,390 963,610 - -
Proceeds from borrowings under credit
agreements - 141,821 139,000
Proceeds from the issuance of senior
secured notes, net of discount of
$4,021 - 130,950 -
Repayment of long-term debt (293,129) (19,360) -
Proceeds from issuance of ordinary
shares in public offerings, net 101,889 80,291 -
Proceeds from issuance of ordinary
shares in private placement, net - 24,953 -
Proceeds from warrant exercise in
connection with joint venture - 150,000 -
Proceeds from short-term notes
payable-shareholders - 4,000 -
Repayment of short-term debt (6,152) (2,354) -
Debt issuance costs (31,968) (12,400) (8,533)
Advances from OGIL stockholders - - 3,300
Repayments of advances from OGIL
stockholders - - (3,300)
Repayment of deferred underwriters fee - - (8,280)
Proceeds from notes payable -
shareholders - - 10,000
--------- --------- ---------
Net cash provided by financing
activities 734,250 497,901 132,187
--------- --------- ---------
Net increase (decrease) in cash and
cash equivalents 104,451 (565) 15,294
Cash and cash equivalents--beginning of
period 15,992 16,557 1,263
--------- --------- ---------
Cash and cash equivalents--end of period $ 120,443 $ 15,992 $ 16,557
========= ========= =========
Contact Information: Contact: Public & Investor Relations Contact: Paul A. Bragg Chairman & Chief Executive Officer Vantage Drilling Company (281) 404-4700