SOURCE: Vantage Drilling Company

Vantage Drilling Company

March 06, 2015 06:00 ET

Vantage Drilling Company Reports Fourth Quarter and Record Annual Results for 2014

HOUSTON, TX--(Marketwired - Mar 6, 2015) - Vantage Drilling Company ("Vantage" or the "Company") (NYSE MKT: VTG) reports net income for the three months ended December 31, 2014 of $12.6 million or $0.04 per diluted share as compared to earnings of $30.3 million or $.09 per diluted share for the three months ended December 31, 2013. The three months ended December 31, 2014 includes a gain on the early retirement of debt of approximately $4.2 million.

The $4.2 million gain on the early retirement of debt represents the discount to the face value of debt that we purchased in the open market, net of writing off deferred financing costs. The total debt retirement for the quarter, including scheduled maturities and open market purchase of debt, totaled approximately $60.6 million at face value.

For the twelve months ended December 31, 2014, Vantage reports record net income of approximately $38.3 million or $.12 per diluted share, excluding net gains from the early retirement of debt of approximately $3.8 million as compared to net income of approximately $16.5 million or $.05 per diluted share, excluding approximately $98.3 million of charges for the early retirement of debt. Including the gains and losses associated with the early retirement of debt, for the twelve months ended December 31, 2014, Vantage reports net income of $42.0 million or $.14 per diluted as compared to a net loss of $81.8 million or ($.27) per diluted share for the same period in 2013.

During 2014, the total debt retirement, including scheduled maturities, discretionary Term Loan payments and open market purchases, was approximately $199.7 million at face value. In connection with our discretionary Term Loan payments and open market purchases, we recognized a net gain on the early retirement of debt of approximately $3.8 million.

Paul Bragg, Chairman and Chief Executive Officer, commented, "We are pleased to announce Vantage completed 2014 with record revenues, EBITDA and net income for the year. With strong cash flows, we were able to exceed our targeted debt retirement goal and strengthen the balance sheet." 

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 December 31,     Year Ended December 31,  
    2014     2013     2014     2013  
    (Unaudited)     (Unaudited)              
Revenues                                
  Contract drilling services   $ 204,305     $ 216,775     $ 807,164     $ 666,129  
  Management fees     1,922       5,111       14,396       14,622  
  Reimbursables     9,633       16,651       54,001       51,309  
    Total revenues     215,860       238,537       875,561       732,060  
  Operating costs and expenses                                
  Operating costs     110,510       99,349       421,505       335,915  
  General and administrative     7,645       9,240       34,106       32,612  
  Depreciation     31,716       31,882       126,610       106,609  
    Total operating costs and expenses     149,871       140,471       582,221       475,136  
Income from operations     65,989       98,066       293,340       256,924  
Other income (expense)                                
  Interest income     7       26       45       221  
  Interest expense and other financing charges     (51,775 )     (55,853 )     (213,924 )     (214,149 )
  Gain (loss) on debt extinguishment     4,214       -       3,752       (98,327 )
  Other, net     (1,795 )     (574 )     (1,179 )     1,621  
    Total other income (expense)     (49,349 )     (56,401 )     (211,306 )     (310,634 )
Income (loss) before income taxes     16,640       41,665       82,034       (53,710 )
Income tax provision     4,020       11,349       40,028       28,115  
Net income (loss)   $ 12,620     $ 30,316     $ 42,006     $ (81,825 )
                                 
Earnings (loss) per share                                
  Basic   $ 0.04     $ 0.10     $ 0.14     $ (0.27 )
  Diluted   $ 0.04     $ 0.09     $ 0.14     $ (0.27 )
                                 
   
   
Vantage Drilling Company  
Supplemental Operating Data  
(Unaudited, in thousands, except percentages)  
                         
    Three Months Ended December 31,     Year Ended December 31,  
    2014     2013     2014     2013  
Operating costs and expenses                                
  Jackups   $ 24,192     $ 21,288     $ 94,754     $ 89,253  
  Deepwater     64,887       56,092       235,343       164,775  
  Operations support     9,464       8,108       40,502       33,267  
  Reimbursables     11,967       13,861       50,906       48,620  
    $ 110,510     $ 99,349     $ 421,505     $ 335,915  
                                 
Utilization                                
  Jackups     100.0 %     89.4 %     99.2 %     87.1 %
  Deepwater     86.5 %     90.3 %     85.1 %     93.3 %
   
   
   
Vantage Drilling Company  
Consolidated Balance Sheet  
(In thousands, except par value information)  
             
    December 31,     December 31,  
    2014     2013  
ASSETS                
Current assets                
  Cash and cash equivalents   $ 82,812     $ 54,686  
  Restricted cash     -       2,125  
  Trade receivables     153,428       168,654  
  Inventory     65,892       55,804  
  Prepaid expenses and other current assets     28,618       23,717  
    Total current assets     330,750       304,986  
Property and equipment                
  Property and equipment     3,524,566       3,472,407  
  Accumulated depreciation     (406,674 )     (281,759 )
    Property and equipment, net     3,117,892       3,190,648  
Other assets                
  Investment in joint venture     1,318       32,482  
  Other assets     79,897       100,027  
    Total other assets     81,215       132,509  
Total assets   $ 3,529,857     $ 3,628,143  
                 
LIABILITIES AND SHAREHOLDERS' EQUITY                
Current liabilities                
  Accounts payable   $ 59,139     $ 65,115  
  Accrued liabilities     101,537       96,382  
  Current maturities of long-term debt and revolving credit agreement, net of discount of $1,181     95,378       63,500  
    Total current liabilities     256,054       224,997  
Long-term debt, net of discount of $25,875 and $39,325     2,632,802       2,852,050  
Other long-term liabilities     85,327       45,640  
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; 307,808 and 304,101 shares issued and outstanding     308       304  
  Additional paid-in capital     905,136       896,928  
  Accumulated deficit     (349,770 )     (391,776 )
    Total shareholders' equity     555,674       505,456  
Total liabilities and shareholders' equity   $ 3,529,857     $ 3,628,143  
                 
   
   
Vantage Drilling Company  
Consolidated Statement of Cash Flows  
(In thousands)  
    Year Ended December 31,  
    2014     2013  
CASH FLOWS FROM OPERATING ACTIVITIES                
Net income (loss)   $ 42,006     $ (81,825 )
Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities:                
  Depreciation expense     126,610       106,609  
  Amortization of debt financing costs     11,535       12,356  
  Amortization of debt discount     11,266       7,523  
  Non-cash (gain) loss on debt extinguishment     (3,752 )     6,070  
  Share-based compensation expense     8,212       7,064  
  Deferred income tax expense (benefit)     (305 )     997  
  Equity in loss of joint venture     570       513  
  Loss on disposal of assets     3,008       1,603  
Changes in operating assets and liabilities:                
  Restricted cash     2,125       1,390  
  Trade receivables     15,226       (49,202 )
  Inventory     (10,088 )     (17,860 )
  Prepaid expenses and other current assets     (4,914 )     1,169  
  Other assets     6,307       (12,654 )
  Accounts payable     (5,976 )     14,206  
  Accrued liabilities and other long-term liabilities     45,794       (46,390 )
    Net cash provided by (used in) operating activities     247,624       (48,431 )
CASH FLOWS FROM INVESTING ACTIVITIES                
  Additions to property and equipment     (51,746 )     (564,319 )
  Return of investment in joint venture     23,250       -  
  Proceeds from sale of property and equipment     -       22  
    Net cash used in investing activities     (28,496 )     (564,297 )
CASH FLOWS FROM FINANCING ACTIVITIES                
  Proceeds from issuance of senior secured notes, net     -       775,000  
  Proceeds from the issuance of term loan, net     -       344,750  
  Proceeds from the issuance of senior convertible notes     -       100,000  
  Repayment of long-term debt     (181,002 )     (1,033,874 )
  Proceeds from (repayment of) revolving credit agreement, net     (10,000 )     10,000  
  Debt issuance costs     -       (31,188 )
  Net cash provided by (used in) financing activities     (191,002 )     164,688  
    Net increase (decrease) in cash and cash equivalents     28,126       (448,040 )
  Cash and cash equivalents -- beginning of year     54,686       502,726  
  Cash and cash equivalents -- end of year   $ 82,812     $ 54,686  
                 
                 

Contact Information

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