Vantage Drilling Company Reports Second Quarter 2012 Results

HOUSTON, TX--(Marketwire - Jul 30, 2012) -  Vantage Drilling Company ("Vantage") (NYSE MKT: VTG) reports a net loss of $10.0 million or ($0.03) per diluted share for the three months ended June 30, 2012 as compared to a net loss of $40.1 million or ($0.14) per diluted share for the three months ended June 30, 2011.

For the six months ended June 30, 2012, Vantage reports a net loss of $11.2 million or ($0.04) per diluted shares as compared to a net loss of $58.7 million or ($0.20) per diluted shares for the six months ended June 30, 2011.

In April 2012, we acquired the Titanium Explorer and have mobilized the vessel to the United States Gulf of Mexico where it is currently undergoing customer acceptance testing. The acquisition has been financed with the proceeds from the $775.0 million senior notes offering. The notes were priced at 108% of par, resulting in total proceeds to the Company in excess of $820.0 million, net of offering fees and expenses. In connection with certain pre-commencement activities of the Titanium Explorer, we recorded approximately $2.4 million of project costs as operating expenses for the three months ended June 30, 2012. 

Paul Bragg, Chairman and Chief Executive Officer, commented, "We are pleased to announce another strong quarter from operations, with the jackups achieving in excess of 99% productive time and the Platinum Explorer, while out of service for the scheduled 10 days of equipment upgrades, otherwise achieved productive time in excess of 99%. Following the acquisition of the Titanium Explorer, the drillship mobilized to the US Gulf of Mexico on-time, completed coast guard inspections, and continues to progress customer acceptance." 

Vantage, a Cayman Islands exempted company, is an offshore drilling contractor, with an owned fleet of four Baker Marine Pacific Class 375 ultra-premium jackup drilling rigs and two ultra-deepwater drillships, the Platinum Explorer and the Titanium Explorer, as well as an additional ultra-deepwater drillship, the Tungsten Explorer, now under construction. 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 and managed 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 June 30,								Six Months Ended June 30,
				2012				2011				2012				2011
Revenues
	Contract drilling services			$	99,683			$	97,977			$	204,681			$	184,731
	Management fees				956				3,171				3,678				7,214
	Reimbursables				4,486				19,946				28,615				53,780
		Total revenues			105,125				121,094				236,974				245,725
Operating costs and expenses
	Operating costs				50,030				65,433				119,354				142,826
	General and administrative				6,704				7,402				11,964				14,249
	Depreciation				16,372				16,025				32,944				32,137
		Total operating costs and expenses			73,106				88,860				164,262				189,212
Income from operations					32,019				32,234				72,712				56,513
Other income (expense)
	Interest income				21				22				33				60
	Interest expense and other financing charges				(36,172	)			(39,350	)			(72,935	)			(80,892	)
	Loss on debt extinguishment				-				(25,196	)			-				(25,196	)
	Other income, net				216				(22	)			861				1,458
		Total other income (expense)			(35,935	)			(64,546	)			(72,041	)			(104,570	)
Income (loss) before income taxes					(3,916	)			(32,312	)			671				(48,057	)
Income tax provision					6,061				7,758				11,827				10,667
Net loss				$	(9,977	)		$	(40,070	)		$	(11,156	)		$	(58,724	)
Loss per share
	Basic			$	(0.03	)		$	(0.14	)		$	(0.04	)		$	(0.20	)
	Diluted			$	(0.03	)		$	(0.14	)		$	(0.04	)		$	(0.20	)

Vantage Drilling Company
Consolidated Balance Sheet
(In thousands, except par value information)
			June 30,				December 31,
			2012				2011
			(Unaudited)
ASSETS
Current assets
	Cash and cash equivalents		$	123,709			$	110,031
	Restricted cash			5,878				7,028
	Trade receivables			78,221				100,908
	Inventory			33,631				24,376
	Prepaid expenses and other current assets			13,044				16,909
		Total current assets		254,483				259,252
Property and equipment
	Property and equipment			2,789,126				1,913,596
	Accumulated depreciation			(140,900	)			(108,521	)
		Property and equipment, net		2,648,226				1,805,075
Other assets
	Other assets			86,375				58,173
		Total other assets		86,375				58,173
Total assets			$	2,989,084			$	2,122,500
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities
	Accounts payable		$	56,843			$	46,362
	Accrued liabilities			140,111				103,809
		Total current liabilities		196,954				150,171
Long-term debt, net of premium (discount) of $22,666 and ($38,572)				2,082,666				1,246,428
Other long-term liabilities				20,054				29,755
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; 292,350 and 291,241 shares issued and outstanding			292				291
	Additional paid-in capital			864,921				860,502
	Accumulated deficit			(175,803	)			(164,647	)
		Total shareholders' equity		689,410				696,146
Total liabilities and shareholders' equity			$	2,989,084			$	2,122,500

Vantage Drilling Company
Consolidated Statement of Cash Flows
(In thousands)
(Unaudited)
			Six Months Ended June 30,
			2012				2011
CASH FLOWS FROM OPERATING ACTIVITIES
Net loss			$	(11,156	)		$	(58,724	)
Adjustments to reconcile net loss to net cash provided by (used in) operating activities:
	Depreciation expense			32,944				32,137
	Amortization of debt financing costs			7,438				3,888
	Non-cash loss on debt extinguishment			-				3,532
	Share-based compensation expense			4,420				2,415
	Accretion of long-term debt			-				2,582
	Amortization of debt discount (premium)			(762	)			5,415
	Deferred income tax expense (benefit)			1,860				(128	)
	Loss on disposal of assets			249				-
Changes in operating assets and liabilities:
	Restricted cash			1,150				22,801
	Trade receivables			(10,977	)			(36,303	)
	Inventory			(9,256	)			(2,396	)
	Prepaid expenses and other current assets			1,476				4,130
	Other assets			1,357				897
	Accounts payable			10,481				9,394
	Accrued liabilities			644				2,948
		Net cash provided by (used in) operating activities		29,868				(7,412	)
CASH FLOWS FROM INVESTING ACTIVITIES
	Additions to property and equipment			(816,722	)			(116,876	)
		Net cash used in investing activities		(816,722	)			(116,876	)
CASH FLOWS FROM FINANCING ACTIVITIES
	Proceeds from issuance of senior secured notes, including issue premiums of $62,000 and $15,750			837,000				240,750
	Repayment of long-term debt			-				(109,716	)
	Debt issuance costs			(36,468	)			(12,693	)
		Net cash provided by financing activities		800,532				118,341
		Net increase (decrease) in cash and cash equivalents		13,678				(5,947	)
	Cash and cash equivalents -- beginning of period			110,031				120,443
	Cash and cash equivalents -- end of period		$	123,709			$	114,496