Vantage Drilling Company Reports First Quarter 2014 Results

HOUSTON, TX--(Marketwired - May 06, 2014) - Vantage Drilling Company ("Vantage" or the "Company") (NYSE MKT: VTG) reports net income for the three months ended March 31, 2014 of $24.8 million or $0.07 per diluted share as compared to a net loss of $24.9 million or ($0.08) per diluted share excluding approximately $98.3 million of charges for the early retirement of debt, for the three months ended March, 31, 2013. Including the charges for the early retirement of debt for the three months ended March 31, 2013, the Company reported a net loss of $123.2 million or ($0.41) per diluted share.

Paul Bragg, Chairman and Chief Executive Officer, commented, "We are pleased to announce another strong quarter of operating results. We also made good initial progress on our debt reduction plan, paying down almost $30 million during the quarter and we remain on track to reach our goal for 2014 given our contracted backlog and high operating efficiency across the fleet."

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
March 31,
----------------------
2014 2013
---------- ----------
Revenues
Contract drilling services $ 214,932 $ 134,664
Management fees 4,582 3,198
Reimbursables 12,951 9,139
---------- ----------
Total revenues 232,465 147,001
---------- ----------
Operating costs and expenses
Operating costs 101,722 75,317
General and administrative 8,115 7,427
Depreciation 31,625 24,861
---------- ----------
Total operating costs and expenses 141,462 107,605
---------- ----------
Income from operations 91,003 39,396
Other income (expense)
Interest income 13 96
Interest expense and other financing charges (54,487) (59,662)
Loss on debt extinguishment (106) (98,327)
Other, net 779 901
---------- ----------
Total other income (expense) (53,801) (156,992)
---------- ----------
Income (loss) before income taxes 37,202 (117,596)
Income tax provision 12,378 5,605
---------- ----------
Net income (loss) $ 24,824 $ (123,201)
========== ==========

Earnings (loss) per share
Basic $ 0.08 $ (0.41)
Diluted $ 0.07 $ (0.41)



Vantage Drilling Company
Supplemental Operating Data
(Unaudited, in thousands, except percentages)

Three Months Ended
March 31,
--------------------
2014 2013
--------- ---------
Operating costs and expenses
Jackups $ 23,760 $ 21,845
Deepwater 55,810 36,723
Operations support 10,759 7,984
Reimbursables 11,393 8,765
--------- ---------
$ 101,722 $ 75,317
--------- ---------

Utilization
Jackups 100.0% 98.4%
Deepwater 96.5% 88.5%



Vantage Drilling Company
Consolidated Balance Sheet
(In thousands, except par value information)

March 31, December 31,
2014 2013
------------ ------------
(Unaudited)
ASSETS
Current assets
Cash and cash equivalents $ 65,261 $ 54,686
Restricted cash -- 2,125
Trade receivables 216,639 168,654
Inventory 58,875 55,804
Prepaid expenses and other current assets 20,456 23,717
------------ ------------
Total current assets 361,231 304,986
------------ ------------
Property and equipment
Property and equipment 3,482,799 3,472,407
Accumulated depreciation (313,334) (281,759)
------------ ------------
Property and equipment, net 3,169,465 3,190,648
------------ ------------
Other assets
Investment in joint venture 32,374 32,482
Other assets 96,018 100,027
------------ ------------
Total other assets 128,392 132,509
------------ ------------
Total assets $ 3,659,088 $ 3,628,143
============ ============

LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities
Accounts payable $ 62,906 $ 66,860
Accrued liabilities 133,245 97,481
Current maturities of long-term debt and
revolving credit agreement 53,500 63,500
------------ ------------
Total current liabilities 249,651 227,841
------------ ------------
Long-term debt, net of discount of $36,486 and
$39,325 2,835,514 2,852,050
Other long-term liabilities 41,502 42,796
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; 305,997 and 304,101 shares
issued and outstanding 306 304
Additional paid-in capital 899,067 896,928
Accumulated deficit (366,952) (391,776)
------------ ------------
Total shareholders' equity 532,421 505,456
------------ ------------
Total liabilities and shareholders' equity $ 3,659,088 $ 3,628,143
============ ============



Vantage Drilling Company
Consolidated Statement of Cash Flows
(In thousands)
(Unaudited)
Three Months Ended March 31,
----------------------------
2014 2013
------------- -------------
CASH FLOWS FROM OPERATING ACTIVITIES
Net income (loss) $ 24,824 $ (123,201)
Adjustments to reconcile net income (loss) to
net cash provided by (used in) operating
activities:
Depreciation expense 31,625 24,861
Amortization of debt financing costs 2,964 3,995
Amortization of debt discount (premium) 2,839 (97)
Non-cash loss on debt extinguishment 106 6,070
Share-based compensation expense 2,141 2,069
Deferred income tax expense (benefit) (57) 778
Equity in loss of joint venture 108 133
Loss on disposal of assets 104 1
Changes in operating assets and liabilities:
Restricted cash 2,125 --
Trade receivables (47,985) 17,521
Inventory (3,071) (4,319)
Prepaid expenses and other current assets 3,318 3,963
Other assets 1,021 290
Accounts payable (3,954) (9,713)
Accrued liabilities and other long-term
liabilities 33,296 (42,762)
------------- -------------
Net cash provided by (used in) operating
activities 49,404 (120,411)
------------- -------------
CASH FLOWS FROM INVESTING ACTIVITIES
Additions to property and equipment (9,371) (15,135)
Proceeds from sale of property and equipment -- 2
------------- -------------
Net cash used in investing activities (9,371) (15,133)
------------- -------------
CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from issuance of senior secured
notes, net -- 775,000
Proceeds from issuance of term loan, net -- 344,750
Repayment of long-term debt (19,374) (1,006,249)
Proceeds from or (repayment of) revolving
credit agreement, net (10,000) --
Debt issuance costs (84) (23,683)
------------- -------------
Net cash provided by (used in) financing
activities (29,458) 89,818
------------- -------------
Net increase (decrease) in cash and cash
equivalents 10,575 (45,726)
Cash and cash equivalents--beginning of
period 54,686 502,726
------------- -------------
Cash and cash equivalents--end of period $ 65,261 $ 457,000
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FOR FURTHER INFORMATION PLEASE CONTACT:
Public & Investor Relations Contact:
Paul A. Bragg
Chairman & Chief Executive Officer
Vantage Drilling Company
(281) 404-4700