Vantage Drilling International

08/11/2022 | Press release | Distributed by Public on 08/11/2022 07:26

Vantage Drilling International Reports Second Quarter Results for 2022 - Form 8-K

Vantage Drilling International Reports Second Quarter Results for 2022

HOUSTON, August 11, 2022 (GLOBE NEWSWIRE) -- Vantage Drilling International ("Vantage" or the "Company") reported net income attributable to controlling interest of approximately $48.1 million, or $3.61 per diluted share, for the three months ended June 30, 2022, based on the weighted average shares outstanding, as compared to a net loss attributable to controlling interest of $29.0 million, or $2.21 per diluted share, for the three months ended June 30, 2021.

The net income is a result of the sale of the Emerald Driller Company ("EDC") and its three jackup rigs, the Emerald Driller, the Aquamarine Driller, and the Sapphire Driller, which closed on May 27, 2022. The Company received $170.0 million as purchase price consideration and $30.0 million in certain contract preparation expense reimbursements, and as a result, a net gain of $60.8 million was recognized during the three months ended June 30, 2022. The gain is subject to potential adjustments contemplated by the relevant share purchase agreement, any such adjustments to be finalized by September 24, 2022.

As of June 30, 2022, Vantage had approximately $246.3 million in cash, including $18.9 million of restricted cash, compared to $90.6 million in cash, including $17.3 million of restricted cash, at December 31, 2021. The Company used $32.0 million in cash from operations during the second quarter of 2022 compared to $25.6 million used during the same period of 2021.

Ihab Toma, CEO, commented: "As previously announced, we are very pleased to have closed the sale of EDC to ADES Arabia and to support their operations in Qatar. The sale meaningfully improved the Company's liquidity."

Mr. Toma continued: "With regard to the rigs we own and manage, we continue to see a constructive environment as rig activity levels remain strong. Our focus remains on taking advantage of the recovery that is underway to secure higher dayrates and continuing to provide safe, efficient and reliable operations for our clients."

Vantage, a Cayman Islands exempted company, is an offshore drilling contractor, with a fleet of two ultra-deepwater drillships, and two 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 independent oil and gas companies. Vantage also markets, operates and provides management services in respect of, third party-owned drilling units. www.vantagedrilling.com.

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.

Non-GAAP Measures

We report our financial results in accordance with generally accepted accounting principles (GAAP) in the United States. However, in our earnings release and during our earnings calls we may reference company information that does not conform to GAAP. Generally, a non-GAAP financial measure is a numerical measure of a company's performance, financial position, or cash flows that excludes or includes amounts that are not normally excluded or included in the most directly comparable measure calculated and presented in accordance with GAAP. Management believes that an analysis of this data is meaningful to investors because it provides insight with respect to ongoing operating results of the Company and allows investors to better evaluate the financial results of the Company. However, these measures should not be viewed as an alternative to or substitute for GAAP measures of performance, and these non-GAAP measures may not be consistent with previously published Company reports on Forms 10-K, 10-Q and 8-K. Non-GAAP measures we may reference have been reconciled to the nearest GAAP measure in the tables entitled Reconciliation of GAAP to Non-GAAP Financial Measures below.

Public & Investor Relations Contact:

Douglas E. Stewart

Chief Financial Officer and General Counsel

Vantage Drilling International

C/O Vantage Energy Services, Inc.

777 Post Oak Blvd., Suite 440

Houston, Texas 77056

(281) 404-4700

Vantage Drilling International

Consolidated Statement of Operations

(In thousands, except per share data)

(Unaudited)

Three Months Ended June 30,

Six Months Ended June 30,

2022

2021

2022

2021

Revenue

Contract drilling services

$

42,744

$

31,655

$

87,657

$

49,380

Management fees

2,840

497

3,943

595

Reimbursables and other

27,654

3,449

39,969

5,792

Total revenue

73,238

35,601

131,569

55,767

Operating costs and expenses

Operating costs

59,405

36,056

103,338

61,413

General and administrative

6,910

4,967

13,492

10,462

Depreciation

11,087

14,161

22,382

28,286

Gain on EDC Sale

(60,781

)

-

(60,781

)

-

Total operating costs and expenses

16,621

55,184

78,431

100,161

Income (loss) from operations

56,617

(19,583

)

53,138

(44,394

)

Other (expense) income

Interest income

7

10

11

110

Interest expense and other financing charges

(8,503

)

(8,511

)

(17,007

)

(17,021

)

Other, net

(1,011

)

(179

)

(1,786

)

(793

)

Total other expense

(9,507

)

(8,680

)

(18,782

)

(17,704

)

Income (loss) before income taxes

47,110

(28,263

)

34,356

(62,098

)

Income tax (benefit) provision

(1,221

)

720

217

2,882

Net income (loss)

48,331

(28,983

)

34,139

(64,980

)

Net income (loss) attributable to noncontrolling interests

232

(18

)

938

(31

)

Net income (loss) attributable to shareholders

$

48,099

$

(28,965

)

$

33,201

$

(64,949

)

EBITDA (1)

$

66,461

$

(5,583

)

$

72,796

$

(16,870

)

Earnings (loss) per share

Basic

$

3.67

$

(2.21

)

$

2.53

$

(4.95

)

Diluted

$

3.61

$

(2.21

)

$

2.49

$

(4.95

)

Weighted average ordinary shares outstanding,

Basic

13,115

13,115

13,115

13,115

Diluted

13,332

13,115

13,330

13,115

(1) EBITDA represents net income (loss) before (i) interest income (expense), (ii) provision for income taxes and (iii) depreciation and amortization expense. EBITDA is not a financial measure under GAAP as defined under the rules of the SEC, and is intended as a supplemental measure of our performance. We believe this measure is commonly used by analysts and investors to analyze and compare companies on the basis of operating performance.

Vantage Drilling International

Supplemental Operating Data

(Unaudited, in thousands, except percentages)

Three Months Ended June 30,

Six Months Ended June 30,

2022

2021

2022

2021

Operating costs and expenses

Jackups

$

10,249

$

22,170

$

18,674

$

36,319

Deepwater

15,934

8,820

30,477

16,064

Managed Rigs

7

756

1

756

Held for Sale (2)

3,891

-

10,712

-

Operations support

2,930

2,317

5,867

4,529

Reimbursables

26,394

1,993

37,607

3,745

Total operating costs and expenses

$

59,405

$

36,056

$

103,338

$

61,413

Utilization

Jackups

98.8

%

39.9

%

79.6

%

35.3

%

Deepwater

99.7

%

49.7

%

99.2

%

49.4

%

Held for Sale (2)

47.0

%

N/A

62.3

%

N/A

(2) Included in the sale of EDC, which owns the Emerald Driller,Sapphire Driller and Aquamarine Driller. Each of these rigs were classified as held for sale on our Consolidated Balance Sheets up to the closing date, which was on May 27, 2022, during the current period and at December 31, 2021.

Vantage Drilling International

Consolidated Balance Sheets

(In thousands, except share and par value information)

(Unaudited)

June 30, 2022

December 31, 2021

ASSETS

Current assets

Cash and cash equivalents

$

227,328

$

73,343

Restricted cash

3,323

1,621

Trade receivables, net of allowance for doubtful accounts of $5.0 million, each period

79,399

37,527

Materials and supplies

38,906

37,580

Assets held for sale

-

117,117

Prepaid expenses and other current assets

13,191

18,309

Total current assets

362,147

285,497

Property and equipment

Property and equipment

645,304

645,622

Accumulated depreciation

(287,314

)

(266,018

)

Property and equipment, net

357,990

379,604

Operating lease ROU assets

1,610

2,450

Other assets

32,549

31,843

Total assets

$

754,296

$

699,394

LIABILITIES AND SHAREHOLDERS' EQUITY

Current liabilities

Accounts payable

$

42,870

$

31,420

Other current liabilities

53,819

31,533

Liabilities held for sale

-

6,720

Total current liabilities

96,689

69,673

Long-term debt, net of discount and financing costs of $2,322 and $3,142, respectively

347,678

346,858

Other long-term liabilities

9,958

17,012

Commitments and contingencies

Shareholders' equity

Ordinary shares, $0.001 par value, 50 million shares authorized; 13,115,026 shares issued and outstanding, each period

13

13

Additional paid-in capital

633,828

633,847

Accumulated deficit

(336,591

)

(369,792

)

Controlling interest shareholders' equity

297,250

264,068

Noncontrolling interests

2,721

1,783

Total equity

299,971

265,851

Total liabilities and shareholders' equity

$

754,296

$

699,394

Vantage Drilling International

Consolidated Statement of Cash Flows

(In thousands)

(Unaudited)

Six Months Ended June 30,

2022

2021

CASH FLOWS FROM OPERATING ACTIVITIES

Net income (loss)

$

34,139

$

(64,980

)

Adjustments to reconcile net income (loss) to net cash used in operating activities

Depreciation expense

22,382

28,286

Amortization of debt financing costs

820

819

Share-based compensation expense

44

337

Deferred income tax expense

410

236

Gain on disposal of assets

(1,630

)

(2,715

)

Gain on EDC Sale

(60,781

)

-

Changes in operating assets and liabilities:

Trade receivables, net

(58,864

)

(6,888

)

Materials and supplies

(1,811

)

(1,481

)

Prepaid expenses and other current assets

2,918

(1,440

)

Other assets

(25,043

)

(1,821

)

Accounts payable

29,564

2,798

Other current liabilities and other long-term liabilities

17,696

5,905

Net cash used in operating activities

(40,156

)

(40,944

)

CASH FLOWS FROM INVESTING ACTIVITIES

Additions to property and equipment

(7,285

)

(2,711

)

Net proceeds from EDC Sale

200,000

-

Net proceeds from sale of assets

3,100

-

Net proceeds from sale of Titanium Explorer

-

13,557

Net cash provided by investing activities

195,815

10,846

CASH FLOWS FROM FINANCING ACTIVITIES

Net cash provided by financing activities

-

-

Net increase (decrease) in unrestricted and restricted cash and cash equivalents

155,659

(30,098

)

Unrestricted and restricted cash and cash equivalents-beginning of period

90,608

154,487

Unrestricted and restricted cash and cash equivalents-end of period

$

246,267

$

124,389

Vantage Drilling International

Non-GAAP Measures

(In thousands)

(Unaudited)

Three Months Ended June 30,

Six Months Ended June 30,

Reconciliation of EBITDA

2022

2021

2022

2021

Net income (loss) attributable to shareholders

$

48,099

$

(28,965

)

$

33,201

$

(64,949

)

Depreciation

11,087

14,161

22,382

28,286

Interest income

(7

)

(10

)

(11

)

(110

)

Interest expense and other financing costs

8,503

8,511

17,007

17,021

Income tax (benefit) provision

(1,221

)

720

217

2,882

EBITDA

$

66,461

$

(5,583

)

$

72,796

$

(16,870

)