SOURCE: Vantage Drilling Company

Vantage Drilling Company

August 04, 2015 07:00 ET

Vantage Drilling Company Reports Second Quarter Results for 2015

HOUSTON, TX--(Marketwired - Aug 4, 2015) - Vantage Drilling Company ("Vantage" or the "Company") (NYSE MKT: VTG) reports net income for the three months ended June 30, 2015 of $25.0 million or $.07 per diluted share as compared to earnings of $10.2 million or $.03 per diluted share for the three months ended June 30, 2014. 

The three months ended June 30, 2015 includes approximately $5.6 million of gains on the early retirement of debt as compared to a loss on the early retirement of debt of $1.4 million in the prior year. The strong operating results for the second quarter also required us to re-evaluate our effective tax rate for the year and combined with tax impact of the early retirement of debt resulted in a $2.7 million favorable adjustment to our tax provision as compared to a $3.5 million unfavorable adjustment in the second quarter 2014. Adjusting for these items, pro forma net income for the three months ended June 30, 2015 was approximately $16.6 million or $.05 per diluted share as compared to $15.1 million or $.05 per diluted share for the three months ended June 30, 2014.

The total debt retirement for the first half of 2015, including scheduled maturities and open market purchase of debt, totaled approximately $140.0 million at face value. Following the end of the quarter, we continued to acquire debt in the open market and have retired approximately $150.0 million of debt year to date with an annualized interest savings of approximately $9.7 million.

Paul Bragg, Chairman and Chief Executive Officer, commented, "During the 2nd quarter, we continued our strong operating performance and maintained our focus on strengthening the balance sheet. In just over six quarters, we have now retired approximately $350 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 June 30,     Six Months Ended June 30,  
  2015     2014     2015     2014  
Revenue                              
  Contract drilling services $ 202,888     $ 198,279     $ 410,869     $ 413,211  
  Management fees   1,902       5,969       3,783       10,551  
  Reimbursables   7,471       15,470       15,258       28,421  
    Total revenue   212,261       219,718       429,910       452,183  
Operating costs and expenses                              
  Operating costs   95,249       98,002       191,357       199,724  
  General and administrative   8,066       8,366       16,931       16,481  
  Depreciation   31,781       31,630       63,404       63,255  
    Total operating costs and expenses   135,096       137,998       271,692       279,460  
Income from operations   77,165       81,720       158,218       172,723  
Other income (expense)                              
  Interest income   5       11       11       24  
  Interest expense and other financing charges   (48,641 )     (54,286 )     (99,195 )     (108,773 )
  Gain (loss) on debt extinguishment   5,616       (1,407 )     26,222       (1,513 )
  Other, net   1,962       (539 )     1,624       240  
    Total other income (expense)   (41,058 )     (56,221 )     (71,338 )     (110,022 )
Income before income taxes   36,107       25,499       86,880       62,701  
Income tax provision   11,143       15,321       40,486       27,699  
Net income $ 24,964     $ 10,178     $ 46,394     $ 35,002  
                               
Earnings per share                              
  Basic $ 0.08     $ 0.03     $ 0.15     $ 0.11  
  Diluted $ 0.07     $ 0.03     $ 0.15     $ 0.11  
                               
Vantage Drilling Company  
Supplemental Operating Data  
(Unaudited, in thousands, except percentages)  
                               
  Three Months Ended June 30,     Six Months Ended June 30,  
  2015     2014     2014     2013  
Operating costs and expenses                              
Jackups $ 20,749     $ 22,401     $ 45,012     $ 46,161  
Deepwater   60,861       51,233       116,944       107,043  
Operations support   7,440       10,342       16,764       21,102  
Reimbursables   6,199       14,026       12,637       25,418  
  $ 95,249     $ 98,002     $ 191,357     $ 199,724  
                               
Utilization                              
Jackups   75.0 %     99.2 %     85.5 %     99.6 %
Deepwater   98.2 %     83.1 %     95.9 %     89.8 %
                               
                               
                               
Vantage Drilling Company  
Consolidated Balance Sheet  
(In thousands, except par value information)  
           
           
  June 30,
2015
    December 31,
2014
 
  (Unaudited)        
ASSETS              
Current assets              
  Cash and cash equivalents $ 30,556     $ 82,812  
  Trade receivables   141,932       153,428  
  Inventory   67,037       65,892  
  Prepaid expenses and other current assets   20,188       28,618  
    Total current assets   259,713       330,750  
Property and equipment              
  Property and equipment   3,553,789       3,524,566  
  Accumulated depreciation   (469,361 )     (406,674 )
    Property and equipment, net   3,084,428       3,117,892  
Other assets              
  Investment in joint venture   1,106       1,318  
  Other assets   68,603       79,897  
    Total other assets   69,709       81,215  
Total assets $ 3,413,850     $ 3,529,857  
               
LIABILITIES AND SHAREHOLDERS' EQUITY              
Current liabilities              
  Accounts payable $ 46,540     $ 59,139  
  Accrued liabilities   97,088       101,537  
  Current maturities of long-term debt, net of discount of $42 and $1,181   65,314       95,378  
    Total current liabilities   208,942       256,054  
Long-term debt, net of discount of $18,903 and $25,875 and current maturities   2,531,003       2,632,802  
Other long-term liabilities   69,363       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; 311,024 and 307,808 shares issued and outstanding   311       308  
  Additional paid-in capital   907,607       905,136  
  Accumulated deficit   (303,376 )     (349,770 )
    Total shareholders' equity   604,542       555,674  
Total liabilities and shareholders' equity $ 3,413,850     $ 3,529,857  
               
               
               
Vantage Drilling Company  
Consolidated Statement of Cash Flows  
(In thousands)  
(Unaudited)  
  Six Months Ended June 30,  
  2015     2014  
CASH FLOWS FROM OPERATING ACTIVITIES              
Net income $ 46,394     $ 35,002  
Adjustments to reconcile net income to net cash provided by operating activities:              
  Depreciation expense   63,404       63,255  
  Amortization of debt financing costs   5,139       5,834  
  Amortization of debt discount   5,392       5,676  
  Non-cash (gain) loss on debt extinguishment   (26,213 )     1,513  
  Share-based compensation expense   3,370       4,284  
  Deferred income tax benefit   (534 )     (343 )
  Equity in loss of joint venture   212       235  
  Loss on disposal of assets   158       663  
Changes in operating assets and liabilities:              
  Restricted cash   -       2,125  
  Trade receivables   11,496       13,988  
  Inventory   (1,145 )     (5,068 )
  Prepaid expenses and other current assets   8,905       5,054  
  Other assets   4,613       10,521  
  Accounts payable   (12,599 )     (7,453 )
  Accrued liabilities and other long-term liabilities   (23,546 )     4,527  
    Net cash provided by operating activities   85,046       139,813  
CASH FLOWS FROM INVESTING ACTIVITIES              
  Additions to property and equipment   (26,878 )     (19,262 )
    Net cash used in investing activities   (26,878 )     (19,262 )
CASH FLOWS FROM FINANCING ACTIVITIES              
  Repayment of long-term debt   (110,424 )     (76,261 )
  Repayment of revolving credit agreement, net   -       (10,000 )
    Net cash used in financing activities   (110,424 )     (86,261 )
    Net increase (decrease) in cash and cash equivalents   (52,256 )     34,290  
  Cash and cash equivalents--beginning of period   82,812       54,686  
  Cash and cash equivalents--end of period $ 30,556     $ 88,976  
                 

Contact Information

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