Vantage Drilling Company Reports Fourth Quarter 2010 Results
HOUSTON, TX--(MARKET WIRE)-March 16, 2011 -- Vantage Drilling Company ("Vantage") (AMEX: VTG-U) (AMEX:VTG) (AMEX: VTG-WS)reports a net loss of ($13.0)million or ($0.05) per diluted share for the three months ended December 31, 2010 as compared to net loss of ($4.3) million or ($0.02) per diluted share for the three months ended December 31, 2009 .
Net loss for the fiscal year ended December 31, 2010 was ($19.8) million or ($0.08) per share, excluding $3.8 million ($.01 per share) of charges associated with the acquisition of thePlatinumExplorer and $24.0 million ($.09 per share) of charges associated with refinancing of debt in July 2011.Including the acquisition charges and refinancing charges, the Company reported a net loss of ($47.6) million or ($0.19) per diluted share for the three year ended December 31, 2010as compared to a net income of $8.8 million or $0.07 per share for the year ended December 31, 2009.
Paul Bragg, Chairman and Chief Executive Officer, commented, "During 2010, we completed construction and deployment of the final unit of our initial five-rig owned fleet. All of the units were delivered on time and within budget and each was contracted prior to completion. Since the start up of initial rig operations almost 26 months ago, we have experienced operational excellence across the fleet, providing safe and efficient drilling services to our customers. Today, Vantage rigs are employed on some of the industry's most challenging projects."
On July 30, 2010, Vantage acquired the 55% interest in Mandarin Drilling Corporation ("Mandarin"), from F3 Capital for $139.7 million. The sole asset of Mandarin was the ultra-deepwater drillshipPlatinum Explorer which was then still under construction. F3 Capital was wholly owned by Hsin-Chi Su, one of the Company's directors and a significant shareholder of the Company.
In connection with the acquisition of Mandarin, Vantage issued $1.0 billion of 11.5% Senior Secured First Lien Notes due 2015. The notes have a maturity of five years from the date of issuance and are fully and unconditionally guaranteed by Vantage and certain of its subsidiaries. In addition to using the proceeds to fund the Mandarin acquisition, Vantage also retired certain of its outstanding credit facilities and its 13.5% Senior Secured Notes.
The construction of thePlatinum Explorer was completed and the Company took delivery of the drillship on November 15, 2010. ThePlatinum Explorermobilized to India and commenced its five year drilling contract with Oil & Natural Gas Company on December 29, 2010.
Vantage, a Cayman Islands exempted company, is an offshore drilling contractor, with four Baker Marine Pacific Class 375 ultra-premium jackup drilling rigs operating, and an ultra deepwater drillship, thePlatinum Explorer. Vantage is also providing management services for four other ultra-deepwater drillships.
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.
Contact:
Public & Investor Relations Contact:
Paul A. Bragg
Chairman & Chief Executive Officer
Vantage Drilling Company
(281) 404-4700
Vantage Drilling Company | |||||||
Consolidated Statement of Operations | |||||||
(In thousands, except per share amounts) | |||||||
(Unaudited) | |||||||
Three Months Ended December 31, | |||||||
2010 | 2009 | ||||||
Revenues | |||||||
Contract drilling services | $ | 45,881 | $ | 22,982 | |||
Management fees | 4,717 | 3,701 | |||||
Reimbursables | 34,294 | 11,875 | |||||
Total revenues | 84,892 | 38,558 | |||||
Operating costs and expenses | |||||||
Operating costs, excluding impairment and termination costs | 63,441 | 30,678 | |||||
General and administrative | 6,016 | 4,550 | |||||
Depreciation | 8,773 | 4,295 | |||||
Total operating expenses | 78,230 | 39,523 | |||||
Income (loss) from operations | 6,662 | (965) | |||||
Other income (expense) | |||||||
Interest income | 166 | 10 | |||||
Interest expense | (14,219) | (4,174) | |||||
Other income | (58) | 293 | |||||
Total other income (expense) | (14,111) | (3,871) | |||||
Income before income taxes | (7,449) | (4,836) | |||||
Income tax provision (benefit) | 5,516 | (562) | |||||
Net income (loss) | $ | (12,965) | $ | (4,274) | |||
| |||||||
Earnings per share | |||||||
Basic | $ | (0.05) | $ | (0.02) | |||
Diluted | $ | (0.05) | $ | (0.02) |
Vantage Drilling Company | ||||||||||
Consolidated Statement of Operations | ||||||||||
(In thousands, except per share amounts) | ||||||||||
Year Ended December 31, | ||||||||||
2010 | 2009 | 2008 | ||||||||
Revenues | ||||||||||
Contract drilling services | $ | 178,514 | $ | 69,919 | $ | - | ||||
Management fees | 18,107 | 18,830 | 825 | |||||||
Reimbursables | 81,782 | 22,744 | 88 | |||||||
Total revenues | 278,403 | 111,493 | 913 | |||||||
Operating costs and expenses | ||||||||||
Operating costs, excluding impairment and termination costs | 176,387 | 66,228 | 5,365 | |||||||
General and administrative | 21,719 | 15,690 | 9,334 | |||||||
Depreciation | 33,384 | 11,218 | 101 | |||||||
Impairment and termination costs | - | - | 38,286 | |||||||
Total operating expenses | 231,490 | 93,136 | 53,086 | |||||||
Income (loss) from operations | 46,913 | 18,357 | (52,173) | |||||||
Other income (expense) | ||||||||||
Interest income | 562 | 23 | 4,095 | |||||||
Interest expense | (49,827) | (8,178) | (56) | |||||||
Loss on debt extinguishment | (24,006) | - | - | |||||||
Loss on acquisition of subsidiary | (3,780) | - | - | |||||||
Other income | 1,510 | 609 | 86 | |||||||
Total other income (expense) | (75,541) | (7,546) | 4,125 | |||||||
Income (loss) before income taxes | (28,628) | 10,811 | (48,048) | |||||||
Income tax provision (benefit) | 18,951 | 1,972 | (670) | |||||||
Net income (loss) | $ | (47,579) | $ | 8,839 | $ | (47,378) | ||||
| ||||||||||
Earnings (loss) per share | ||||||||||
Basic | $ | (0.19) | $ | 0.07 | $ | (0.78) | ||||
Diluted | $ | (0.19) | $ | 0.07 | $ | (0.78) |
Vantage Drilling Company | |||||||
Consolidated Balance Sheet | |||||||
(In thousands, except par value information) | |||||||
December 31, | |||||||
2010 | 2009 | ||||||
ASSETS | |||||||
Current assets | |||||||
Cash and cash equivalents | $ | 120,443 | $ | 15,992 | |||
Restricted cash | 29,004 | 28,863 | |||||
Trade receivables | 50,190 | 17,536 | |||||
Inventory | 19,760 | 10,789 | |||||
Prepaid expenses and other current assets | 11,472 | 8,040 | |||||
Total current assets | 230,869 | 81,220 | |||||
Property and Equipment | |||||||
Property and equipment | 1,762,844 | 899,541 | |||||
Accumulated depreciation | (44,712) | (11,329) | |||||
Property and equipment, net | 1,718,132 | 888,212 | |||||
Other Assets | |||||||
Investment in joint venture | - | 120,306 | |||||
Other assets | 54,193 | 29,441 | |||||
Total other assets | 54,193 | 149,747 | |||||
Total assets | $ | 2,003,194 | $ | 1,119,179 | |||
| |||||||
LIABILITIES AND SHAREHOLDERS' EQUITY | |||||||
Current liabilities | |||||||
Accounts payable | $ | 32,332 | $ | 15,931 | |||
Accrued liabilities | 75,159 | 14,285 | |||||
Short-term debt | 8,574 | 17,827 | |||||
Current maturities of long-term debt | - | 16,000 | |||||
Total current liabilities | 116,065 | 64,043 | |||||
Long-term debt, net of discount of $63,654 and $4,021 | 1,103,480 | 378,078 | |||||
Other long-term liabilities | 13,498 | - | |||||
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, 400,000 shares authorized; 289,713 and 187,277 shares issued and outstanding | 290 | 187 | |||||
Additional paid-in capital | 854,557 | 714,486 | |||||
Accumulated deficit | (84,696) | (37,117) | |||||
Accumulated other comprehensive loss | - | (498) | |||||
Total shareholders' equity | 770,151 | 677,058 | |||||
Total liabilities and shareholders' equity | $ | 2,003,194 | $ | 1,119,179 |
Vantage Drilling Company | |||||||||||
Consolidated Statement of Cash Flows | |||||||||||
(In thousands) | |||||||||||
Year Ended December 31, | |||||||||||
2010 | 2009 | 2008 | |||||||||
CASH FLOWS FROM OPERATING ACTIVITIES | |||||||||||
Net income (loss) | $ | (47,579) | $ | 8,839 | $ | (47,378) | |||||
Adjustments to reconcile net income to net cash provided by (used in) operating activities: | |||||||||||
Depreciation expense | 33,384 | 11,218 | 101 | ||||||||
Amortization of debt financing costs | 5,389 | 1,486 | 513 | ||||||||
Non-cash loss on debt extinguishment | 12,280 | - | - | ||||||||
Non-cash loss on acquisition of subsidiary | 3,780 | - | - | ||||||||
Share-based compensation expense | 6,141 | 5,030 | 2,420 | ||||||||
Accretion of long-term debt | 5,495 | 1,638 | - | ||||||||
Amortization of debt discount | 5,592 | 29 | - | ||||||||
Deferred income tax expense (benefit) | 1,492 | 746 | (2,059) | ||||||||
Write-off of asset value, net | - | - | 28,286 | ||||||||
Changes in operating assets and liabilities: | |||||||||||
Restricted cash | (142) | (27,163) | (1,700) | ||||||||
Trade receivables | (40,791) | (14,350) | (3,277) | ||||||||
Inventory | (8,971) | (10,789) | - | ||||||||
Prepaid expenses and other current assets | (3,433) | (5,963) | (1,618) | ||||||||
Other assets | (11,945) | (406) | - | ||||||||
Accounts payable | 16,402 | 12,104 | 3,765 | ||||||||
Accrued liabilities | 27,744 | (14,792) | 9,935 | ||||||||
Short-term debt | 10,899 | 4,942 | 1,240 | ||||||||
Net cash provided by (used in) operating activities | 15,737 | (27,431) | (9,772) | ||||||||
CASH FLOWS FROM INVESTING ACTIVITIES | |||||||||||
Acquisition of assets | (79,777) | - | (213,397) | ||||||||
Additions to property and equipment | (565,759) | (313,631) | (166,833) | ||||||||
Investment in joint venture | - | (157,404) | - | ||||||||
Deferred acquisition costs | - | - | - | ||||||||
Restricted cash held in trust account | - | - | 273,109 | ||||||||
Net cash used in investing activities | (645,536) | (471,035) | (107,121) | ||||||||
CASH FLOWS FROM FINANCING ACTIVITIES | |||||||||||
Proceeds from issuance of senior secured notes, net of original issue discount of $36,390 | 963,610 | - | - | ||||||||
Proceeds from borrowings under credit agreements | - | 141,821 | 139,000 | ||||||||
Proceeds from the issuance of senior secured notes, net of discount of $4,021 | - | 130,950 | - | ||||||||
Repayment of long-term debt | (293,129) | (19,360) | - | ||||||||
Proceeds from issuance of ordinary shares in public offerings, net | 101,889 | 80,291 | - | ||||||||
Proceeds from issuance of ordinary shares in private placement, net | - | 24,953 | - | ||||||||
Proceeds from warrant exercise in connection with joint venture | - | 150,000 | - | ||||||||
Proceeds from short-term notes payable-shareholders | - | 4,000 | - | ||||||||
Repayment of short-term debt | (6,152) | (2,354) | - | ||||||||
Debt issuance costs | (31,968) | (12,400) | (8,533) | ||||||||
Advances from OGIL stockholders | - | - | 3,300 | ||||||||
Repayments of advances from OGIL stockholders | - | - | (3,300) | ||||||||
Repayment of deferred underwriters fee | - | - | (8,280) | ||||||||
Proceeds from notes payable - shareholders | - | - | 10,000 | ||||||||
Net cash provided by financing activities | 734,250 | 497,901 | 132,187 | ||||||||
Net increase (decrease) in cash and cash equivalents | 104,451 | (565) | 15,294 | ||||||||
Cash and cash equivalents-beginning of period | 15,992 | 16,557 | 1,263 | ||||||||
Cash and cash equivalents-end of period | $ | 120,443 | $ | 15,992 | $ | 16,557 |