EDITOR: | November 7th, 2013

Vantage Drilling Company Reports Third Quarter 2013 Results

| November 07, 2013 | No Comments
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November 7, 2013 (Source: Marketwired) — Vantage Drilling Company (“Vantage” or the “Company”) (NYSE MKT: VTG) reports a net income for the three months ended September 30, 2013 of $6.8 million or $0.02 per diluted share as compared to a net loss of $538,000 or $0.00 per diluted share for the three months ended September 30, 2012. The results for the three months ended September 30, 2013 includes a charge of approximately $5.0 million for deferred mobilization costs associated with re-contracting the Sapphire Driller and approximately $1.6 million reduction of estimated taxes.

For the nine months ended September 30, 2013, Vantage reports a net loss of $13.8 million or ($0.05) per diluted share excluding approximately $98.3 million of charges for the early retirement of debt as compared to a net loss of $11.7 million or ($0.04) per diluted share for the nine months ended September 30, 2012. Including the charges for the early retirement of debt, the company reported a loss of $112.1 million or ($0.37) per diluted share for the nine months ended September 30, 2013.

Paul Bragg, Chairman and Chief Executive Officer, commented, “The third quarter marked another important milestone for Vantage as we successfully commenced operations on our third drillship, Tungsten Explorer, in Southeast Asia. With the Sapphire Driller commencing its new eighteen month contract in Gabon this week, we now have contribution from seven rigs for the first time.”

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 September 30, Nine Months Ended September 30,
2013 2012 2013 2012
Revenues
Contract drilling services $ 158,887 $ 105,521 $ 449,354 $ 310,202
Management fees 3,903 966 9,511 4,644
Reimbursables 13,095 5,047 34,658 33,662
Total revenues 175,885 111,534 493,523 348,508
Operating costs and expenses
Operating costs 84,132 52,004 236,566 171,358
General and administrative 8,891 6,622 23,372 18,586
Depreciation 24,886 16,575 74,727 49,519
Total operating costs and expenses 117,909 75,201 334,665 239,463
Income from operations 57,976 36,333 158,858 109,045
Other income (expense)
Interest income 26 15 195 48
Interest expense and other financing charges (47,379 ) (31,583 ) (158,296 ) (104,518 )
Loss on debt extinguishment (2,528 ) (98,327 ) (2,528 )
Other, net 305 (61 ) 2,195 800
Total other income (expense) (47,048 ) (34,157 ) (254,233 ) (106,198 )
Income (loss) before income taxes 10,928 2,176 (95,375 ) 2,847
Income tax provision 4,084 2,714 16,766 14,541
Net income (loss) $ 6,844 $ (538 ) $ (112,141 ) $ (11,694 )
Earnings (loss) per share
Basic $ 0.02 $ 0.00 $ (0.37 ) $ (0.04 )
Diluted $ 0.02 $ 0.00 $ (0.37 ) $ (0.04 )
Vantage Drilling Company
Consolidated Balance Sheet
(In thousands, except par value information)
September 30, December 31,
2013 2012
(Unaudited)
ASSETS
Current assets
Cash and cash equivalents $ 67,729 $ 502,726
Restricted cash 3,353 3,515
Trade receivables 144,915 119,452
Inventory 53,090 37,944
Prepaid expenses and other current assets 12,828 25,208
Total current assets 281,915 688,845
Property and equipment
Property and equipment 3,457,772 2,893,837
Accumulated depreciation (250,571 ) (176,331 )
Property and equipment, net 3,207,201 2,717,506
Other assets
Investment in joint venture 32,650 31,320
Other assets 96,010 92,536
Total other assets 128,660 123,856
Total assets $ 3,617,776 $ 3,530,207
LIABILITIES AND SHAREHOLDERS’ EQUITY
Current liabilities
Accounts payable $ 56,624 $ 50,909
Accrued liabilities 120,090 123,484
Revolving credit agreement 10,000
Current maturities of long-term debt 53,500 31,250
Total current liabilities 240,214 205,643
Long-term debt, net of discount of $42,243 and $11,940 2,862,507 2,710,559
Other long-term liabilities 41,548 45,520
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; 303,644 and 299,647 shares issued and outstanding 303 299
Additional paid-in capital 895,296 878,137
Accumulated deficit (422,092 ) (309,951 )
Total shareholders’ equity 473,507 568,485
Total liabilities and shareholders’ equity $ 3,617,776 $ 3,530,207
Vantage Drilling Company
Consolidated Statement of Cash Flows
(In thousands)
(Unaudited)
Nine Months Ended September 30,
2013 2012
CASH FLOWS FROM OPERATING ACTIVITIES
Net loss $ (112,141 ) $ (11,694 )
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation expense 74,727 49,519
Amortization of debt financing costs 9,425 12,617
Amortization of debt discount (premium) 4,605 (3,473 )
Non-cash loss on debt extinguishment 6,070 2,528
Share-based compensation expense 5,431 5,808
Deferred income tax expense 858 2,978
Equity in loss of joint venture 345
Loss on disposal of assets 114 502
Changes in operating assets and liabilities:
Restricted cash 162 1,150
Trade receivables (25,463 ) (9,382 )
Inventory (15,146 ) (9,948 )
Prepaid expenses and other current assets 11,709 1,509
Other assets (6,866 ) 2,074
Accounts payable 5,715 14,090
Accrued liabilities and other long-term liabilities (25,146 ) (105,126 )
Net cash used in operating activities (65,601 ) (46,848 )
CASH FLOWS FROM INVESTING ACTIVITIES
Additions to property and equipment (548,621 ) (848,939 )
Proceeds from sale of property and equipment 2
Net cash used in investing activities (548,619 ) (848,939 )
CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from issuance of senior secured notes, net 775,000 837,000
Proceeds from issuance of term loan, net 344,750
Proceeds from issuance of senior convertible notes 100,000 50,000
Repayment of long-term debt (1,020,499 )
Proceeds from revolving credit agreement, net 10,000
Debt issuance costs (30,028 ) (38,768 )
Net cash provided by financing activities 179,223 848,232
Net decrease in cash and cash equivalents (434,997 ) (47,555 )
Cash and cash equivalents–beginning of period 502,726 110,031
Cash and cash equivalents–end of period $ 67,729 $ 62,476

Raj Shah

Editor:

Raj Shah has professional experience working for over a half a dozen years at financial firms such as Merrill Lynch and First Allied Securities Inc., ... <Read more about Raj Shah>


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