Vantage Drilling International

HOUSTON, TX--(Marketwired - Aug 11, 2016) - Vantage Drilling International ("Vantage" or the "Company") reported a net loss of approximately $35.7 million or ($7.15) per share for the three months ended June 30, 2016 as compared to the Predecessor reporting net income of approximately $27.9 million for the three months ended June 30, 2015. The weighted-average shares outstanding for the three months ended June 30, 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 Chapter 11 bankruptcy 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 June 30, 2016, Vantage reported a net loss of approximately $64.8 million or ($12.95) 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 six months ended June 30, 2015, the Predecessor reported net income of approximately $50.6 million.

Douglas Smith, Chief Financial Officer, commented, "While market conditions continue to pressure contract utilization during the second quarter, we continued our very strong operating performance with 99% up-time across our operating fleet."

As of June 30, 2016, Vantage had approximately $240.5 million of available cash as compared to $249.2 million as of March 31, 2016. Mr. Smith continued, "We remain focused on maintaining a strong balance sheet and reducing our cash outflow. During the quarter, we incurred expenses associated with preparing the rigs for warm stacking and cost associated with the headcount reductions. We believe the cash on hand provides us adequate liquidity to ultimately put our rigs back to work."

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. 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 International
Consolidated Statement of Operations
(In thousands, except per share amounts)
(Unaudited)
				Successor								Predecessor
				Three Months Ended June 30, 2016				Period from February 10, 2016 to June 30, 2016				Period from January 1, 2016 to February 10, 2016				Three Months Ended June 30, 2015				Six Months Ended June 30, 2015
Revenue
	Contract drilling services			$	40,901			$	64,960			$	20,891				202,888				410,869
	Management fees				1,712				2,671				752				1,902				3,783
	Reimbursables				5,898				10,666				1,897				9,593				20,252
		Total revenue			48,511				78,297				23,540				214,383				434,904
Operating costs and expenses
	Operating costs				34,965				62,404				25,213				94,709				190,059
	General and administrative				8,695				17,863				2,558				6,701				12,691
	Depreciation				18,381				30,457				10,696				31,781				63,404
		Total operating costs and expenses			62,041				110,724				38,467				133,191				266,154
Income (loss) from operations					(13,530	)			(32,427	)			(14,927	)			81,192				168,750
Other income (expense)
	Interest income				9				15				3				13				25
	Interest expense and other financing charges (contractual interest of $23,219 for the period from January 1, 2016 to February 10, 2016)				(18,772	)			(29,422	)			(1,728	)			(45,908	)			(92,027	)
	Gain (loss) on debt extinguishment				--				--				--				(2	)			10,823
	Other, net				(1,516	)			318				(69	)			1,971				1,820
	Reorganization items				(487	)			(641	)			(452,923	)			--				--
		Total other income (expense)			(20,766	)			(29,730	)			(454,717	)			(43,926	)			(79,359	)
Income (loss) before income taxes					(34,296	)			(62,157	)			(469,644	)			37,266				89,391
Income tax provision					1,438				2,605				2,371				8,862				38,151
Net income (loss)					(35,734	)			(64,762	)			(472,015	)			28,404				51,240
Net income (loss) attributable to noncontrolling interests					--				--				(969	)			477				667
Net income (loss) attributable to VDI				$	(35,734	)		$	(64,762	)		$	(471,046	)		$	27,927			$	50,573
	Net loss per share, basic and diluted			$	(7.15	)		$	(12.95	)			N/A				N/A				N/A
	Weighted average successor 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 June 30, 2016				Period from February 10, 2016 to June 30, 2016				Period from January 1, 2016 to February 10, 2016				Three Months Ended June 30, 2015				Six Months Ended June 30, 2015
Operating costs and expenses
Jackups				$	12,441			$	20,719			$	5,975			$	20,748			$	45,011
Deepwater					15,372				28,518				15,550				60,805				116,898
Operations support					2,596				4,811				2,219				6,966				15,688
Reimbursables					4,556				8,356				1,469				6,190				12,462
				$	34,965			$	62,404			$	25,213			$	94,709			$	190,059
Utilization
Jackups					52.2	%			55.0	%			53.6	%			75.0	%			85.5	%
Deepwater					33.3	%			33.3	%			33.3	%			98.2	%			95.9	%

Vantage Drilling International
Consolidated Balance Sheet
(In thousands, except share and par value information)
(Unaudited)
				Successor				Predecessor
				June 30, 2016				December 31, 2015
ASSETS
Current assets
	Cash and cash equivalents			$	240,502			$	203,420
	Restricted cash				1,000				-
	Trade receivables				28,150				70,722
	Inventory				46,371				64,495
	Prepaid expenses and other current assets				17,127				22,106
		Total current assets			333,150				360,743
Property and equipment
	Property and equipment				898,316				3,481,006
	Accumulated depreciation				(30,278	)			(532,619	)
		Property and equipment, net			868,038				2,948,387
Other assets					10,815				23,050
Total assets				$	1,212,003			$	3,332,180
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities
	Accounts payable			$	34,639			$	49,437
	Accrued liabilities				15,619				21,702
	Current maturities of long-term debt				1,430				--
	VDC note payable				--				61,477
		Total current liabilities			51,688				132,616
Long-term debt, net of discount of $127,974 and $0					839,831				--
Other long-term liabilities					11,269				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				(64,762	)			(138,363	)
		Total VDI shareholders' equity			309,215				456,756
Noncontrolling interests					--				15,255
	Total equity				309,215				472,011
Total liabilities and equity				$	1,212,003			$	3,332,180

Vantage Drilling International
Consolidated Statement of Cash Flows
(In thousands)
(Unaudited)
				Successor				Predecessor
				Period from February 10, 2016 to June 30, 2016				Period from January 1, 2016 to February 10, 2016				Six Months Ended June 30, 2015
CASH FLOWS FROM OPERATING ACTIVITIES
Net income (loss)				$	(64,762	)		$	(472,015	)		$	51,240
Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities:
	Depreciation expense				30,457				10,696				63,404
	Amortization of debt financing costs				193				--				4,238
	Amortization of debt discount				18,945				--				1,205
	Reorganization items				--				430,210				--
	Non-cash gain on debt extinguishment				--				--				(10,814	)
	Deferred income tax benefit				(1,741	)			--				(534	)
	Loss on disposal of assets				624				--				158
Changes in operating assets and liabilities:
	Restricted cash				--				(1,000	)			--
	Trade receivables				46,147				(3,575	)			8,561
	Inventory				(2,129	)			223				(340	)
	Prepaid expenses and other current assets				(1,914	)			6,893				8,794
	Other assets				569				941				4,101
	Accounts payable				92				(14,890	)			(86,701	)
	Accrued liabilities and other long-term liabilities				(26,277	)			21,152				(18,653	)
		Net cash provided by (used in) operating activities			204				(21,365	)			24,659
CASH FLOWS FROM INVESTING ACTIVITIES
	Additions to property and equipment				(7,982	)			116				(17,017	)
		Net cash provided by (used in) investing activities			(7,982	)			116				(17,017	)
CASH FLOWS FROM FINANCING ACTIVITIES
	Repayment of long-term debt				(715	)			(7,000	)			(54,605	)
	Proceeds from issuance of 10% Second Lien Notes				-				76,125				-
	Debt issuance costs				(51	)			(2,250	)			--
		Net cash provided by (used in) financing activities			(766	)			66,875				(54,605	)
		Net increase (decrease) in cash and cash equivalents			(8,544	)			45,626				(46,963	)
	Cash and cash equivalents--beginning of period				249,046				203,420				75,801
	Cash and cash equivalents--end of period			$	240,502			$	249,046			$	28,838