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CST: 21/10/2019 23:26:50   

Vantage Drilling International Reports Second Quarter Results for 2019

68 Days ago

HOUSTON, Aug. 14, 2019 (GLOBE NEWSWIRE) -- Vantage Drilling International ("Vantage" or the “Company”) reported net income attributable to controlling interest of approximately $590.7 million or $116.96 per share for the three months ended June 30, 2019 compared to a net loss attributable to controlling interest of $31.1 million or $6.22 per share for the three months ended June 30, 2018.

The net income stems from the recent payments by Petrobras Venezuela Investments & Services, BV, (“PVIS”), a subsidiary of Petroleo Brasileiro S.A. (“Petrobras”), of approximately $690.8 million to Vantage Deepwater Company, one of our subsidiaries (“VDEEP”), and by Petrobras America, Inc., a subsidiary of Petrobras (“PAI”), of approximately $10.1 million to Vantage Deepwater Drilling, Inc., also one of our subsidiaries (“VDDI”).  The payments were made pursuant to an agreement between the parties and in satisfaction of the previously rendered arbitration award and related U.S. judgment confirming the award. 

The dispute arose following the Petrobras’s parties’ termination of the Agreement for the Provision of Drilling Services for the Titanium Explorer dated February 4, 2009 (the “Drilling Contract”) between PVIS and VDEEP and which had been novated to PAI and VDDI. The Petrobras parties claimed the Vantage parties had breached their obligations under the Drilling Contract.  The Vantage parties immediately filed the international arbitration claim against PAI, PVIS, and Petrobras, claiming wrongful termination of the Drilling Contract.

In July 2018, the international arbitration panel ruled in favor of the Vantage entities, rendering an arbitration award of $622 million plus interest against PVIS, PAI and Petrobras.  In May 2019, the U.S. District Court for the Southern District of Texas confirmed the arbitration award and denied the Petrobras parties’ petition to vacate the award.

As previously announced, the Petrobras parties filed their notice of appeal to the U.S. Court of Appeals for the Fifth Circuit seeking the reversal of the U.S. judgment.  The Vantage parties believe there is no basis for reversal and intend to vigorously contest the appeal.

The three months ended June 30, 2019 includes Drilling Contract termination revenue of approximately $594.0 million and interest income of approximately $106.9 million associated with the payments, together with related legal contingency fee and income taxes. Adjusting for these items, pro-forma net loss for the three months ended June 30, 2019 was approximately $37.4 million or $7.41 per share.

As of June 30, 2019, Vantage had approximately $896.8 million in cash, including $10.4 million of restricted cash, compared to $239.4 million in cash, including $14.4 million of restricted cash at December 31, 2018.   

Ihab Toma, CEO, commented. “I am very pleased about our agreement with the Petrobras parties and their payments’ to us in aggregate of approximately $701 million.  Separately, I am pleased to report that we continue to achieve operational and safety excellence, recording 99% revenue efficiency for the quarter and over two years without a lost time incident. We remain focused on providing the best service to our customers.”

Vantage, a Cayman Islands exempted company, is an offshore drilling contractor, with a fleet of three ultra-deepwater drillships and five 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 natural gas companies. Vantage also provides construction supervision services and preservation management 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.

Public & Investor Relations Contact:

     Thomas J. Cimino
     Chief Financial Officer
     Vantage Drilling International
     (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,  
      2019       2018       2019       2018    
Revenue                  
Contract drilling services   $   35,765     $   55,183     $   65,745     $   106,778    
Contract termination revenue       594,029         —         594,029         —    
Reimbursables and other       6,589         5,278         11,164         11,346    
Total revenue       636,383         60,461         670,938         118,124    
Operating costs and expenses                  
Operating costs       38,081         44,650         76,623         85,635    
General and administrative       70,702         6,278         79,370         13,632    
Depreciation       18,499         17,711         37,032         35,579    
Total operating costs and expenses       127,282         68,639         193,025         134,846    
Income (loss) from operations       509,101         (8,178 )       477,913         (16,722 )  
Other income (expense)                  
Interest income       108,305         220         109,369         441    
Interest expense and other financing charges       (10,435 )       (19,412 )       (26,250 )       (38,683 )  
Other, net       (58 )       (514 )       124         (1,084 )  
Total other expense       97,812         (19,706 )       83,243         (39,326 )  
Income (loss) before income taxes       606,913         (27,884 )       561,156         (56,048 )  
Income tax provision       16,454         3,210         18,601         7,183    
Net income (loss)       590,459         (31,094 )       542,555         (63,231 )  
Net loss attributable to noncontrolling interests       (270 )       —         (284 )       —    
Net income (loss) attributable to shareholders   $   590,729     $   (31,094 )   $   542,839     $   (63,231 )  
Earnings (loss) per share                  
Basic   $   116.96     $   (6.22 )   $   107.60     $   (12.65 )  
Diluted   $   116.86     $   (6.22 )   $   107.38     $   (12.65 )  
Vantage Drilling International  
Supplemental Operating Data  
(Unaudited, in thousands, except percentages)  
   
Three Months Ended June 30,
  Six Months Ended June 30,  
      2019       2018       2019       2018    
Operating costs and expenses                  
Jackups   $   14,108     $   16,523     $   31,853     $   30,985    
Deepwater       16,492         21,699         32,307         41,511    
Operations support       3,361         3,367         6,460         6,494    
Reimbursables       4,120         3,061         6,003         6,645    
    $   38,081     $   44,650     $   76,623     $   85,635    
                   
Utilization                  
Jackups     93.7 %     88.5 %     96.0 %     87.3 %  
Deepwater     49.2 %     63.2 %     40.9 %     58.7 %  

 

Vantage Drilling International
Consolidated Balance Sheet
(In thousands, except share and par value information)
(Unaudited)
         
    June 30, 2019   December 31,
2018
         
ASSETS        
Current assets        
Cash and cash equivalents   $   886,343     $   224,967  
Restricted cash       5,640         10,362  
Trade receivables       31,478         28,431  
Inventory       45,461         45,195  
Prepaid expenses and other current assets       19,552         17,278  
Total current assets       988,474         326,233  
Property and equipment        
Property and equipment       1,002,161         996,139  
Accumulated depreciation       (245,393 )       (208,836 )
Property and equipment, net       756,768         787,303  
Operating lease right-of-use assets       7,682         -  
Other assets       13,483         16,026  
Total assets   $   1,766,407     $   1,129,562  
         
LIABILITIES AND SHAREHOLDERS' EQUITY        
Current liabilities        
Accounts payable   $   107,899     $   44,372  
Accrued liabilities       33,653         17,983  
Total current liabilities       141,552         62,355  
Long–term debt, net of discount and financing costs of $7,240 and $12,914       1,118,552         1,109,011  
Other long-term liabilities       27,260         22,889  
Commitments and contingencies        
Shareholders' equity        
Ordinary shares, $0.001 par value, 50 million shares authorized; 5,000,053 shares issued and outstanding       5         5  
Additional paid-in capital       373,972         373,972  
Accumulated earnings (deficit )       104,169         (438,670 )
Controlling interest shareholders' equity       478,146         (64,693 )
Noncontrolling interests       897         -  
Total equity       479,043         (64,693 )
Total liabilities and shareholders’ equity   $   1,766,407     $   1,129,562  
         

 

Vantage Drilling International
Consolidated Statement of Cash Flows
(In thousands)
(Unaudited)
    Six Months Ended June 30,  
      2019       2018    
CASH FLOWS FROM OPERATING ACTIVITIES          
Net income (loss)   $   542,555     $   (63,231 )  
                   
Adjustments to reconcile net income (loss) to net cash provided by operating activities:          
Depreciation expense       37,032         35,579    
Amortization of debt financing costs       807         234    
Amortization of debt discount       5,354         24,647    
Amortization of contract value       1,643         3,130    
PIK interest on the Convertible Notes       3,845         3,823    
Share-based compensation expense       2,064         3,772    
Deferred income tax expense       497         592    
Loss (gain) on disposal of assets       109         (2,524 )  
Changes in operating assets and liabilities:          
Trade receivables       (3,047 )       4,289    
Inventory       (266 )       63    
Prepaid expenses and other current assets       (2,274 )       (3,833 )  
Other assets       2,641         865    
Accounts payable       63,527         3,366    
Accrued liabilities and other long-term liabilities       8,799         (2,441 )  
Net cash provided by operating activities       663,286         8,331    
CASH FLOWS FROM INVESTING ACTIVITIES          
Additions to property and equipment       (6,606 )       (771 )  
Down payment on Soehanah acquisition       —         (15,000 )  
Proceeds from sale of Vantage 260       —         4,660    
Net cash used in investing activities       (6,606 )       (11,111 )  
CASH FLOWS FROM FINANCING ACTIVITIES          
Repayment of long-term debt       —         (5,815 )  
Contributions from holders of noncontrolling interest       1,181         —    
Debt issuance costs       (487 )       —    
Net cash provided by (used in) financing activities       694         (5,815 )  
Net increase (decrease) in cash and cash equivalents       657,374         (8,595 )  
Unrestricted and restricted cash and cash equivalents—beginning of period       239,387         195,455    
Unrestricted and restricted cash and cash equivalents—end of period   $   896,761     $   186,860    
           

PDF available: http://ml.globenewswire.com/Resource/Download/8de84139-c28f-4732-bc38-c0a9d80337dc

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