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Vantage Drilling International

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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

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