SOURCE: Vantage Drilling International

Vantage Drilling International

March 09, 2017 07:00 ET

Vantage Drilling International Reports Fourth Quarter Results for 2016

HOUSTON, TX--(Marketwired - Mar 9, 2017) - Vantage Drilling International ("Vantage" or the "Company") reported a net loss of approximately $41.1 million or $8.23 per share for the three months ended December 31, 2016 as compared to the Predecessor reporting a net loss of approximately $8.8 million for the three months ended December 31, 2015. The weighted-average shares outstanding for the three months ended December 31, 2016 was 5,000,053 whereas in the prior year, as a wholly-owned subsidiary, the Predecessor did not have a comparable outstanding ordinary shares.

Upon emergence from the Company's Chapter 11 restructuring on February 10, 2016, Vantage adopted fresh-start accounting, which resulted in the Company becoming a new entity for financial reporting purposes. References to "Successor" relate to the financial position and results of operations of the reorganized Vantage as of and subsequent to February 10, 2016. References to "Predecessor" refer to the financial position of Vantage as of and prior to February 10, 2016 and the results of operations prior to February 10, 2016. As a result of the application of fresh-start accounting and the effects of the implementation of our Plan of Reorganization, the financial statements on or after February 10, 2016 are not comparable with the financial statements prior to that date.

For the period from February 10, 2016 to December 31, 2016, Vantage reported a net loss of approximately $147.4 million or $29.48 per share and the Predecessor for the period January 1, 2016 to February 10, 2016 reported a net loss of approximately $471.0 million. For the year ended December 31, 2015, the Predecessor reported net income of approximately $17.2 million.

As of December 31, 2016, Vantage had approximately $231.7 million of available cash as compared to $241.1 million as of September 30, 2016. Additionally, Vantage had $24.6 million available for issuance of letters of credit under its revolving letter of credit facility at the end of the quarter. Ihab Toma, CEO, commented, "Despite a very challenging market for offshore rigs, we were able to successfully reactivate the Emerald Driller in the fourth quarter in Qatar and have subsequently obtained a new contract for the Topaz Driller in Thailand. We continue to deliver on our commitment to putting our assets to work while maintaining superior performance, operating safely, managing costs and preserving our strong balance sheet."

Vantage, a Cayman Islands exempted company, is an offshore drilling contractor, with a fleet of three ultra-deepwater drillships and four 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 globally for major, national and large independent oil and natural gas companies. Vantage also provides construction supervision services for, and will operate and manage, drilling units owned by others.

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 disclaims any intention or obligation to update publicly or revise such statements, whether as a result of new information, future events or otherwise.

   
   
Vantage Drilling International  
Consolidated Statement of Operations  
(In thousands, except per share data)  
(Unaudited)  
   
    Successor     Predecessor  
    Three Months Ended December 31, 2016     Period from February 10, 2016 to December 31, 2016     Period from January 1, 2016 to February 10, 2016     Three Months Ended December 31, 2015     Twelve Months Ended December 31, 2015  
Revenue                                        
  Contract drilling services   $ 34,655     $ 134,370     $ 20,891     $ 118,714       726,717  
  Management fees     410       4,074       752       1,795       7,501  
  Reimbursables     5,344       20,204       1,897       7,893       38,047  
    Total revenue     40,409       158,648       23,540       128,402       772,265  
Operating costs and expenses                                        
  Operating costs     29,635       123,022       25,213       75,601       359,610  
  General and administrative     8,931       36,922       2,558       7,572       25,322  
  Depreciation     18,486       67,920       10,696       32,191       127,359  
    Total operating costs and expenses     57,052       227,864       38,467       115,364       512,291  
Income (loss) from operations     (16,643 )     (69,216 )     (14,927 )     13,038       259,974  
Other income (expense)                                        
  Interest income     (8 )     18       3       30       84  
  Interest expense and other financing charges (contractual interest of $23,219 for the period from January 1, 2016 to February 10, 2016)     (18,879 )     (67,023 )     (1,728 )     (35,424 )     (173,634 )
  Gain on debt extinguishment     -       -       -       -       10,823  
  Other, net     145       1,132       (69 )     1,945       4,231  
  Reorganization items     (774 )     (1,380 )     (452,919 )     (39,354 )     (39,354 )
    Total other expense     (19,516 )     (67,253 )     (454,713 )     (72,803 )     (197,850 )
Income (loss) before income taxes     (36,159 )     (136,469 )     (469,640 )     (59,765 )     62,124  
Income tax provision     4,970       10,948       2,371       (55,701 )     39,870  
Net income (loss)     (41,129 )     (147,417 )     (472,011 )     (4,064 )     22,254  
Net income (loss) attributable to noncontrolling interests     -       -       (969 )     4,689       5,036  
Net income (loss) attributable to VDI   $ (41,129 )   $ (147,417 )   $ (471,042 )   $ (8,753 )   $ 17,218  
  Net loss per share, basic and diluted   $ (8.23 )   $ (29.48 )     N/A       N/A       N/A  
  Weighted average successor ordinary shares outstanding, basic and diluted     5,000       5,000       N/A       N/A       N/A  
                                         
                                         
                               
Vantage Drilling International  
Supplemental Operating Data  
(Unaudited, in thousands, except percentages)  
   
    Successor     Predecessor  
    Three Months Ended December 31, 2016     Period from February 10, 2016 to December 31, 2016     Period from January 1, 2016 to February 10, 2016     Three Months Ended December 31, 2015     Twelve Months Ended December 31, 2015  
Operating costs and expenses                                        
Jackups   $ 10,014     $ 39,569     $ 5,975     $ 15,008     $ 80,009  
Deepwater     13,270       57,833       15,550       47,491       224,516  
Operations support     2,403       9,859       2,219       7,092       28,785  
Reimbursables     3,948       15,761       1,469       6,010       26,300  
    $ 29,635     $ 123,022     $ 25,213     $ 75,601     $ 359,610  
                                         
Utilization                                        
Jackups     39.5 %     42.3 %     53.6 %     64.0 %     76.7 %
Deepwater     33.3 %     33.3 %     33.3 %     53.4 %     83.0 %
                                         
                                         
   
Vantage Drilling International  
Consolidated Balance Sheet  
(In thousands)  
(Unaudited)  
             
    Successor     Predecessor  
    December 31,
2016
    December 31,
2015
 
ASSETS                
Current assets                
  Cash and cash equivalents   $ 231,727     $ 203,420  
  Trade receivables     20,850       70,722  
  Inventory     45,206       64,495  
  Prepaid expenses and other current assets     12,423       22,106  
    Total current assets     310,206       360,743  
Property and equipment                
  Property and equipment     902,241       3,481,006  
  Accumulated depreciation     (67,713 )     (532,619 )
    Property and equipment, net     834,528       2,948,387  
Other assets     15,694       23,050  
Total assets   $ 1,160,428     $ 3,332,180  
                 
LIABILITIES AND SHAREHOLDERS' EQUITY                
Current liabilities                
  Accounts payable   $ 35,283     $ 49,437  
  Accrued liabilities     18,448       21,702  
  Current maturities of long-term debt     1,430       -  
  VDC note payable     -       61,477  
    Total current liabilities     55,161       132,616  
Long-term debt, net of discount and financing costs of $105,568 and $0     867,372       -  
Other long-term liabilities     11,335       33,097  
Liabilities subject to compromise     -       2,694,456  
Commitments and contingencies                
Shareholders' equity                
  Predecessor ordinary shares, $0.001 par value, 50 million shares authorized; one thousand shares issued and outstanding     -       -  
  Predecessor additional paid-in capital     -       595,119  
  Successor ordinary shares, $0.001 par value, 50 million shares authorized; 5,000,053 shares issued and outstanding     5       -  
  Successor additional paid-in capital     373,972       -  
  Accumulated deficit     (147,417 )     (138,363 )
    Total VDI shareholders' equity     226,560       456,756  
Noncontrolling interests     -       15,255  
  Total equity     226,560       472,011  
Total liabilities and equity   $ 1,160,428     $ 3,332,180  
                 
                 
   
Vantage Drilling International  
Consolidated Statement of Cash Flows  
(In thousands)  
(Unaudited)  
                   
    Successor     Predecessor  
 
 
 
 
Period from
February 10, 2016 to December 31, 2016
 
 
 
 
Period from
January 1, 2016 to February 10, 2016
 
 
 
 
 
Year Ended December 31, 2015
 
 
CASH FLOWS FROM OPERATING ACTIVITIES                        
Net income (loss)   $ (147,417 )   $ (472,011 )   $ 22,254  
Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities:                        
  Depreciation expense     67,920       10,696       127,359  
  Amortization of debt financing costs     427       -       7,800  
  Amortization of debt discount     43,208       -       2,242  
  PIK interest on the Convertible Notes     6,712       -       -  
  Reorganization items     -       430,210       37,129  
  Non-cash gain on debt extinguishment     -       -       (10,814 )
  Accelerated deferred mobilization income     -       -       (21,508 )
  Share-based compensation expense     402       -       -  
  Deferred income tax benefit     (3,368 )     -       2,122  
  Loss on disposal of assets     652       -       1,108  
Changes in operating assets and liabilities:                        
  Restricted cash     1,000       (1,000 )     -  
  Trade receivables     53,447       (3,575 )     80,903  
  Inventory     (964 )     223       1,397  
  Prepaid expenses and other current assets     2,790       6,893       5,991  
  Other assets     (3,409 )     941       8,549  
  Accounts payable     736       (14,890 )     (154,922 )
  Accrued liabilities and other long-term liabilities     (26,010 )     21,148       (17,023 )
    Net cash provided by (used in) operating activities     (3,874 )     (21,365 )     92,587  
CASH FLOWS FROM INVESTING ACTIVITIES                        
  Additions to property and equipment     (11,964 )     116       (46,490 )
    Net cash provided by (used in) investing activities     (11,964 )     116       (46,490 )
CASH FLOWS FROM FINANCING ACTIVITIES                        
  Repayment of long-term debt     (1,430 )     (7,000 )     (67,980 )
  Proceeds from issuance of 10% Second Lien Notes     -       75,000       -  
  Proceeds from borrowings under credit agreements     -       -       150,000  
  Distributions to VDC     -       -       (498 )
  Debt issuance costs     (51 )     (1,125 )     -  
    Net cash provided by (used in) financing activities     (1,481 )     66,875       81,522  
    Net increase (decrease) in cash and cash equivalents     (17,319 )     45,626       127,619  
  Cash and cash equivalents-beginning of period     249,046       203,420       75,801  
  Cash and cash equivalents-end of period   $ 231,727     $ 249,046     $ 203,420