Vantage Drilling International (VTDRF) 8-K Submission of Matters to a Vote of Security Holders

Exhibit 99.1

Excerpts from the Preliminary Offering Circular of Vantage Drilling International, dated November 14, 2018

SUMMARY

Our Fleet

The following table sets forth certain current information concerning our offshore drilling fleet as of November 9, 2018.

Name	Year Built		Water Depth Rating (feet)		Drilling Depth Capacity (feet)		Location		Status
Jackups
Emerald Driller		2008		375		30,000		Qatar		Operating
Sapphire Driller		2009		375		30,000		Congo		Operating
Aquamarine Driller		2009		375		30,000		Malaysia		Operating
Topaz Driller(1)		2009		375		30,000		Gabon		Mobilizing
Drillships(2)
Platinum Explorer		2010		12,000		40,000		India		Operating
Titanium Explorer		2012		12,000		40,000		South Africa		Warm Stacked
Tungsten Explorer		2013		12,000		40,000		Canary Islands		Shipyard upgrades

(1) Vessel is currently mobilizing to perform an announced contract with Total Gabon, which will expire in the second quarter of 2019. We have also recently entered into a drilling contract for this vessel with ENI Gabon, which will commence following completion of the contract with Total Gabon and will end in the third quarter of 2019.

(2) The drillships are designed to drill in up to 12,000 feet of water. ThePlatinum Explorer, Titanium Explorer andTungsten Explorer are currently equipped to drill in 10,000 feet of water.

Fleet Status

The following table sets forth certain information concerning the current contract status of our offshore drilling fleet as of November 9, 2018.

Name	Region	Contract End Date		Customer
Emerald Driller	Middle East		Q2 2020	Total E&P Qatar
Sapphire Driller	West Africa		Q2 2020	ENI Congo SA
Aquamarine Driller	Southeast Asia		Q3 2019	CPOC through Olio Energy Sdn Bhd
Topaz Driller(1)	West Africa		Q2 2019	Total Gabon
Platinum Explorer	India		Q4 2020	Oil & Natural Gas Corporation

(1) We recently entered into a drilling contract with ENI Gabon, which will commence following completion of the contract with Total Gabon and will end in the third quarter of 2019.

Appraisals

We have received desktop appraisals of our vessels from Fearnley Offshore AS (“Fearnley”), an independent vessel broker, that assesses the aggregate charter-free fair market value of our vessels to be approximately $1.205 billion to $1.445 billion as of October 25, 2018 (not accounting for the Soehanah jackup rig). The valuations are based on prevailing market conditions. The appraisals constitute what is commonly referred to in the offshore drilling industry as “desktop appraisals” in that they did not include a physical inspection or other verification of the condition or status of the vessels. The market values of the vessels can be expected to fluctuate, depending on general economic and market conditions, including supply and demand dynamics, affecting the offshore drilling industry.

First Lien Asset Coverage

The following table sets forth our first lien asset coverage based on our market-implied value of total capitalization and our sum-of-the parts appraisal value (dollars in millions):

As Adjusted Market-Implied Value of Total Capitalization(a)	$	1,718
As Adjusted Total Cash-Pay Debt(b)	$	300
Market-Implied Value of Total Capitalization First Lien Asset Coverage		5.7x
Appraised Fleet Value(c)	$	1,423
As Adjusted Cash(d)	$	195
As Adjusted Total Cash-Pay Debt(b)	$	300
Sum-of-the-Parts Appraisal Value First Lien Asset Coverage		5.4x

(a) As of September 30, 2018, on an as adjusted basis to reflect the sale of the notes in this offering and the use of the proceeds therefrom. Includes Convertible Notes with $768 million par value convertible into 8.035 million shares at a per share conversion price of $95.60 and 5 million common shares outstanding (13.035 fully diluted shares outstanding). Common share price calculated based on the trading price of one unit of the Company’s stapled securities (each comprised of $176.78 of Convertible Notes and one common share) of $310 on November 5, 2018, each such unit convertible into 2.85 common shares as of such date, implying a value of $108.80 per common share. No representation is made that the Convertible Notes will be converted, or that the above-mentioned prices upon which the foregoing calculations were based will not decrease, or that the implied value calculated therefrom will materialize upon any such conversion.

(b) As of September 30, 2018, on an as adjusted basis to reflect the sale of the notes in this offering and the use of the proceeds therefrom. Excludes indebtedness represented by our Convertible Notes, interest on which is paid in kind.

(c) Based on midpoint appraisal value provided by Fearnley as of October 25, 2018. Assumes consummation of the Rig Purchase with the Soehanah jackup rig having an appraisal value by Fearnley of between $90 million and $105 million.

(d) Includes $5 million of restricted cash as of September 30, 2018.

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Competitive Strengths

We believe we have a number of competitive strengths that will help us to successfully execute our business strategies:

• We own and operate a diversified, premium fleet. We have a diversified fleet of seven high-specification drilling units that is capable of providing premium drilling services for both shallow water and deepwater applications. We recognize that shallow water and deepwater business cycles may differ, particularly during an industry recovery, and believe our fleet diversity reduces reliance on any one market segment. Our fleet currently includes four jackup rigs and three drillships. Additionally, we have entered into an agreement to acquire a fifth contracted high-specification jackup rig of similar design and specifications as our four current jackups.

• We believe that our ultra-premium jackup rigs compare favorably to the majority of the current global jackup rig fleet, which is primarily comprised of older, smaller, less capable rigs using less modern equipment. Each of our jackups is less than 10 years old and has a water depth capability of 375 feet and drilling depth capability of 30,000 feet. Our jackup rigs are equipped with offline stand-building systems, which provide significant drilling efficiency and have at least a 1.5 million pound hook load, allowing more demanding wells to be drilled. Our rigs have a cantilever reach envelop of 75 x 30 feet, allowing the rig to reach more well slots on a platform without requiring a rig move, a large deck space and 3,749 tons of variable deck-load, allowing more equipment and supplies to be stored on the rig, and a120-person accommodation, all of which bring efficiencies, better logistics and significant cost savings to the customer. Out of the current global supply of 521 jackup rigs, only 79 rigs have similar or better capabilities, and 232 are more than 30 years old, 68 are cold-stacked and 97 are warm-stacked. As a result, we believe our jackups are preferred by clients for their superior and more efficient drilling performance, better and more cost-effective logistics and consistent activity levels. This client preference for modern jackups like ours has been proven during the current cycle where the global modern jackups utilization has returned to approximately 70% globally while older rigs are still at an approximate 50% utilization level. As of September 30, 2018, our jackup rigs are 100% utilized.

• Our ultra-deepwater drillships are designed to drill in up to 12,000 feet of water and two have been further upgraded with a hook load of 2.5 million pounds, which further enhances their ability to drill deep, complex and demanding wells. Our drillships are currently equipped with risers to drill in water depths of up to 10,000 feet, which we believe is the optimal specification for the majority of current ultra-deepwater development projects, but additional risers could be added to drill in water depths of up to 12,000 feet as needed by our clients. Finally, a Managed Pressure Drilling system, or MPD, is being installed on the Tungsten Explorer drillship. We are observing that a significant number of the recent and active requirements for floaters are requesting an MPD system or a subset of it, called Riser Gas Handling. Of the total fleet of semi-submersible rigs and drillships, which includesnew-build and cold-stacked rigs (“total floater market”), we believe that only 24 of these vessels are outfitted with an MPD system and another 38 are“MPD-ready” but lack an actual MPD system. Of thoseMPD-outfitted andMPD-ready vessels, only 18 and 27, respectively, are drillships. We believe these high-specification and upgraded rigs are preferred by our clients and better position us to secure contracts and command premium dayrates than competitors with less advanced fleets.

• We have high fleet utilization. As of September 30, 2018, all of our jackup rigs were under contract (100% jackup fleet utilization) and two of our three drillships were under contract (67% drillship fleet utilization) for a total fleet utilization just above 85%, which we believe to be one of the highest in the industry. Our one drillship that was not under contract as of September 30, 2018 is currently warm-stacked and ready for deployment. We believe that E&P operators have a strong preference for rigs with consistent activity levels and that our rigs will be more competitive in securing new contracts than those that have not had consistent activity levels or have been cold-stacked. In addition, the activity level of our fleet reduces uncertainty of cost and preparation time necessary to ready rigs for new contracts relative to those coming out of cold-stack.

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Our focus on increased efficiency has led to an optimized cost structure. Following the commodity price downturn in 2014, we have implemented company-wide cost savings initiatives to reduce our rig operating expenses and general and administrative expenses through theright-sizing of the shore-based teams, and centralization of shore-based operational support in Dubai near key areas of operation. Further, we have significantly reduced our rig operating cost through nationalization and regionalization of senior offshore positions and active supply chain management. Annual total direct costs (G&A and global support) have declined from approximately $86 million in 2015 to approximately $45 million in 2018 (based on annualized 9 months ended September 30, 2018 results), and annualized offshore labor costs on operating rigs (including wages, travel, contract labor and payroll taxes) decreased from approximately $122 million for our operating fleet in 2015 to approximately $54 million in 2018 (on the same annualized basis). We believe our optimized cost structure is among the best in the industry and provides us flexibility to operate across business cycles, and will lead to enhanced profitability in a recovery in the offshore drilling industry.

We have a strong balance sheet with significant debt coverage. Upon completion of this offering and the application of proceeds to repay debt and complete the Rig Purchase, we expect to have approximately $190.2 million of cash on our balance sheet (excluding $5.0 million of restricted cash) and no near-term debt maturities. Our long-term debt would consist of $300 million of First Lien Notes, which will be secured on a first priority basis by substantially all of our assets, as well as the Convertible Notes. On an as adjusted basis as of September 30, 2018, our total First Lien Notes asset coverage ratio would have been 5.7 to 1.0 based upon our market-implied value of total capitalization and would have been 5.4 to 1.0 based upon our sum-of-the-parts appraisal value. See “—First Lien Asset Coverage.” In addition, in connection with our arbitration with Petrobras and related entities, we were awarded damages in the aggregate amount of $622 million, which accrues interest at an annual rate of 15.2%. As the ultimate recovery in respect of this award is uncertain, no amounts relating to these damages are included in our sum-of-the-parts appraisal value.

We are a leading operator with strong client relationships.We believe that our safety and operational performance, experienced and skilled employees and modern and highly advanced fleet have produced a track record of high-quality client service and operational safety, efficiency and effectiveness. We have received special recognition from several our clients (which include Total and Eni) for superior drilling services and, in 2016, one of our top clients described one of our drillships in its congratulatory letter as the top performer based on several key operational metrics, including drilling efficiency, lownon-productive time, safe operations and best contractor performance.

We have a proven management team. Our executive team has a strong reputation for sound execution, customer focus and delivering strong financial performance. Our management team has extensive experience in the oilfield services and offshore drilling industries, as well as experience operating in key global offshore development locations including the Gulf of Mexico, West Africa, the Middle East, South East Asia and India, both with major international and national oil companies as well as with independent exploration and production companies. Prior to joining us, certain members of our executive operations team have worked at Schlumberger and Transocean Ltd. In addition to the members of the management team, we have highly trained personnel operating and maintaining our rigs. We believe that our team’s significant experience, technical expertise and strong client relationships, and the functional depth throughout our organization, enhance our ability to deliver superior drilling service to our clients and effectively operate on a global basis.

4

Business Strategies

Our principal business objective is to be the preferred provider of premium offshore drilling rig services to the oil and gas industry. Our operating strategy is designed to enable us to provide high-quality, safe and cost-competitive services through the current business cycle, positioning us to benefit from an expected increase in demand for offshore drilling and to increase our cash flow and profits. Specifically, we expect to achieve our business objectives through the following strategies:

Enhanced focus on safety and operational excellence. With current decreased demand for offshore drilling services, excelling in safety and operational ability is a key factor for success. We intend to continue our focus on minimizing safety incidents, while also continually increasing our operational uptime and efficiency. This dual focus is intended to enable us to develop and maintain long-term customer relationships and maximize the utilization of our fleet while ensuring the safety of our and our customers’ employees and contractors. As a result of our focus, we had an excellent12-month rolling average Total Recordable Incident Rate (‘‘TRIR’’) of 0.22 as of September 30, 2018, compared to 0.56 in 2013, 0.7 in 2014 and 0.53 in 2015. Additionally, we have not experienced a Lost Time Incident since May 2017. In addition, we have consistently maintained an average revenue efficiency of at least 98.5% since our current management team took over in 2016, with a high of 101.0% and low of 92.6%. Through attentive and engaged leadership, ongoing competency and training programs, appropriate incentive structures at all levels and management oversight, we intend to maintain our exemplary safety and operational performance.

Efficiently manage costs to adapt to and withstand a range of market conditions.With a cost-competitive fleet, we believe we are well-positioned to operate across business cycles and achieve enhanced profitability in a recovery in the offshore drilling industry. We have assembled and deployed an active fleet that we believe is at the low end of the cost of supply curve through right sizing and centralization of shore-based support, nationalization and regionalization of senior offshore positions and active supply chain management. As a result, annual total direct costs (G&A and global support) have declined from approximately $86 million in 2015 to approximately $45 million in 2018 (based on annualized 9 months ended September 30, 2018 results). We believe these efforts to manage costs will enable us to maintain our industry-leading fleet utilization while generating positive operational cash flows even in the current low dayrate environment. Further, despite depressed dayrates, our optimized cost structure allows us to operate profitably before interest expense.

Maintain high fleet utilization and consistent activity levels to capitalize on customer preferences for active rigs. We enjoy an industry-leading fleet utilization, which serves as a competitive advantage in securing contracts as operators have a strong preference for rigs with consistent activity levels. Consistent activity reduces the uncertainty of any associated costs and preparation time for rigs to undertake new contracts. All of our jackup rigs are currently contracted with client options to extend their contracts. One of our drillships is currently contracted, one is having its special periodic survey performed in advance of returning to work, and one is deliberately warm-stacked in anticipation of what we believe to be an improved dayrate and contract term environment starting in 2020. In addition to maximizing and maintaining utilization of our existing fleet, an important element for our evaluation of any potential acquisition is whether the jackup rig or drillship has been recently contracted. For example, we have entered into an agreement to acquire the Soehanah rig, a Baker Marine Pacific Class 375 jackup rig, which is currently working on bareboat contract in Indonesia.

Preserve balance sheet and maintain significant liquidity through business cycles. By refinancing debt with the proceeds of this offering, we will extend our maturity profile in order to allow for more nimble operations and capital deployment and lower our cost of capital. Further, we continue to focus on preservation of liquidity as the offshore drilling business cycle continues. Upon completion of this offering and application of proceeds to repay debt and complete the Rig Purchase, we expect to have approximately $190.2 million of cash on our balance sheet (excluding $5.0 million of restricted cash) and no near-term debt maturities. Additionally, the arbitration award provides potential future upside and substantial cushion in our capital structure.

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Maintain high-quality asset portfolio with diverse footprint by selectively pursuing acquisitions that suit our operational model and that we believe are likely to increase cash flow. Our balanced fleet of jackup rigs and drillships allows us to address the dynamic opportunity set in the offshore drilling industry. The quality of our jackup rig and drillship fleets, combined with our experience in shallow and deepwater markets, positions us to compete in various market segments and geographies. With a young fleet with an average age of approximately 8 years, our high-specification assets allow us to capitalize on the bifurcation in utilization levels between modern and older rigs and to secure contracts with premium dayrates. Additionally, high specification modern drilling units generally provide superior and more efficient drilling performance and better and more cost effective logistics. New, modern drilling units are also generally preferred by crews, which makes it easier to hire and retain high quality operating personnel. As a result, our fleet is well suited to meet the requirements of customers for efficiently drilling complex wells in demanding locations. To maintain our high-quality asset portfolio, we are focused on disciplined investment in and growth of our active drilling fleet to maximize our profitability. We believe the most attractive returns on invested capital are in opportunistic acquisitions of rigs that are complementary to our fleet. We believe that rigs of this type are currently available at historically low acquisition prices due to the offshore industry downturn. Additionally, we have invested in managed pressure drilling (MPD) technology for our ultra-deepwater drillships, which is currently required by a significant number of the tenders in the market and is becoming increasingly prevalent in the industry, making our drillships highly regarded and sought after by customers.

Refinancing of Our Existing Indebtedness

As of the date of this offering circular, we had $76,125,000 aggregate principal amount of Second Lien Notes outstanding and $134,325,000 outstanding under our First Lien Term Loan Facility. We intend to use a portion of the proceeds of this offering to redeem the Second Lien Notes, and to repay all of our obligations under, and to terminate, our existing First Lien Term Loan Facility. At the time of the consummation of this offering, we also intend to enter into a new $50.0 million cash collateralized letter of credit facility to replace the letter of credit facility under our existing First Lien Term Loan Facility.

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SUMMARY HISTORICAL AND UNAUDITED FINANCIAL DATA

Upon emergence from bankruptcy on February 10, 2016 (the “Effective Date”), in accordance with the Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) 852, Reorganizations (“ASC 852”), we adopted fresh-start accounting in accordance with ASC 852, which resulted in the Company becoming a new entity for financial reporting purposes. Upon adoption of fresh-start accounting, our assets and liabilities were recorded at their fair values as of the Effective Date. The Effective Date fair values of our assets and liabilities differed materially from the recorded values of our assets and liabilities as reflected in our historical consolidated balance sheets prior to the Effective Date. The effects of our reorganization and the application of fresh-start accounting are reflected in our consolidated balance sheet as of December 31, 2016 and the related adjustments thereto were recorded in our consolidated statements of operations as reorganization items. As a result, our consolidated balance sheets and consolidated statements of operations subsequent to the Effective Date are not comparable to our consolidated balance sheets and statements of operations prior to the Effective Date. Our consolidated financial statements and related notes are presented with a black line division which delineates the lack of comparability between amounts presented on or after February 10, 2016 and amounts presented prior to that date. Our financial results for periods following the application of fresh-start accounting are different from historical trends and the differences may be material.

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Set forth below is (i) summary historical consolidated financial data as of December 31, 2017 and 2016 and for the year ended December 31, 2017 (successor), the period from February 10, 2016 to December 31, 2016 (successor) (the “Successor Period”), the period from January 1, 2016 to February 10, 2016 (predecessor) (the “Predecessor Period”) and the year ended December 31, 2015 (predecessor), which have been derived from our audited Consolidated Financial Statements included elsewhere in this offering circular, and (ii) summary historical consolidated financial data as of September 30, 2018 and for the nine month periods ended September 30, 2018 and 2017, which have been derived from our Unaudited Consolidated Financial Statements included elsewhere in this offering circular. The Successor Period and the Predecessor Period are two distinct reporting periods as a result of our emergence from bankruptcy on the Effective Date. The summary historical consolidated financial data set forth in the following tables for the twelve months ended September 30, 2018 have been calculated by aggregating our summary historical financial data derived from our audited consolidated financial statements for the year ended December 31, 2017 with the financial data from our unaudited consolidated financial statements for the nine months ended September 30, 2018 and substracting from such aggregate total the financial data derived from our unaudited consolidated financial statements for the nine months ended September 30, 2017, in each case without any adjustments. Accordingly, such financial data for the twelve months ended September 30, 2018 is not compiled in accordance with GAAP.

	Fiscal Year
	Successor						Predecessor						Successor
	Year Ended December 31, 2017			Period from February 10, 2016 to December 31, 2016			Period from January 1, 2016 to February 10, 2016			Year Ended December 31, 2015			Nine Months Ended September 30, 2018			Nine Months Ended September 30, 2017			Twelve Months Ended September 30, 2018
							(in thousands)
Consolidated Statement of Operations Data
Revenue	$	212,846		$	158,648		$	23,540		$	772,265		$	182,681		$	153,008		$	242,519
Operating costs		161,668			123,022			25,213			359,610			128,943			119,244			171,367
General and administrative expenses		41,648			36,922			2,558			25,322			22,935			29,929			34,654
Depreciation		73,925			67,920			10,696			127,359			53,217			55,531			71,611
Income (loss) from operations		(64,395	)		(69,216	)		(14,927	)		259,974			(22,414	)		(51,696	)		(35,113	)
Gain (loss) on debt extinguishment		—			—			—			10,823	(1)		—			—			—
Interest expense, net		(75,633	)		(67,005	)		(1,725	)		(173,550	)(2)		(57,148	)		(56,593	)		(76,188	)
Other income (expense)		2,501			1,132			(69	)		4,231			(1,031	)		2,287			(817	)
Reorganization items		—			(1,380	)		(452,919	)(3)		(39,354	)(4)		—			—			—
Bargain purchase gain (5)		1,910			—			—			—			—			1,910			—
Income (loss) before income taxes		(135,617	)		(136,469	)		(469,640	)		62,124			(80,593	)		(104,092	)		(112,118	)
Income tax provision		14,168			10,948			2,371			39,870			8,698			9,067			13,799
Net income (loss)		(149,785	)		(147,417	)		(472,011	)		22,254			(89,291	)		(113,159	)		(125,917	)
Net income (loss) attributable to noncontrolling interests		—			—			(969	)		5,036			—			—			—
Net income (loss) attributable to VDI	$	(149,785	)	$	(147,417	)	$	(471,042	)	$	17,218		$	(89,291	)	$	(113,159	)	$	(125,917	)
Other Financial Data
Adjusted EBITDA Reconciliation
Net income (loss)	$	(149,785	)	$	(147,417	)	$	(472,011	)	$	22,254		$	(89,291	)	$	(113,159	)	$	(125,917	)
Interest expense		75,633			67,005			1,725			173,550			57,148			56,593			76,188
Income tax provision		14,168			10,948			2,371			39,870			8,698			9,067			13,799
Depreciation		73,925			67,920			10,696			127,359			53,217			55,531			71,611
EBITDA (6)		13,941			(1,544	)		(457,219	)		363,033			29,772			8,032			35,681
Gain (loss) on debt extinguishment (1)		—			—			—			(10,823	)		—			—			—
Reorganization items		—			1,380			452,919			39,354			—			—			—
Bargain purchase gain (5)		(1,910	)		—			—			—			—			(1,910	)		—
Adjusted EBITDA (7)	$	12,031		$	(164	)	$	(4,300	)	$	391,564		$	29,772		$	6,122		$	35,681

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	Fiscal Year
	Successor				Predecessor					Successor
	Year Ended December 31, 2017		Period from February 10, 2016 to December 31, 2016		Period from January 1, 2016 to February 10, 2016		Year Ended December 31, 2015			Period Ended September 30, 2018
					(in thousands)
Balance Sheet Data (as of end of period)
Cash and cash equivalents	$	195,455	$	231,727		N/A	$	203,420		$	178,549
Total other current assets		102,541		78,479		N/A		157,323			104,248
Property and equipment, net		763,191		834,528		N/A		2,948,387			736,008
Total other assets		21,935		15,694		N/A		23,050			14,471
Total assets	$	1,083,122	$	1,160,428		N/A	$	3,332,180		$	1,033,276
Total current liabilities	$	69,213	$	55,161		N/A	$	132,616		$	60,806
Long-term debt		919,939		867,372		N/A		—	(8)		959,750
Other long-term liabilities		17,195		11,335		N/A		33,097			25,236
Liabilities subject to compromise		—		—		N/A		2,694,456			—
VDI shareholder’s equity		76,775		226,560		N/A		456,756			(12,516	)
Noncontrolling interests		—		—		N/A		15,255			—
Total liabilities and shareholders’ equity	$	1,083,122	$	1,160,428		N/A	$	3,332,180		$	1,033,276

	Fiscal Year
	Successor						Predecessor						Successor
	Year Ended December 31, 2017			Period from February 10, 2016 to December 31, 2016			Period from January 1, 2016 to February 10, 2016			Year Ended December 31, 2015			Nine Months Ended September 30, 2018			Nine Months Ended September 30, 2017			Twelve Months Ended September 30, 2018
							(in thousands)
Cash Flow Data
Net cash provided by (used in) operating activities	$	(19,873	)	$	(3,874	)	$	(21,365	)	$	92,587		$	12,481		$	(17,412	)	$	10,020
Net cash provided by (used in) investing activities		(14,969	)		(11,964	)		116			(46,490	)		(18,572	)		(14,606	)		(18,935	)
Net cash provided by (used in) financing activities		(1,430	)		(1,481	)		66,875			81,522			(5,815	)		(1,072	)		(6,173	)

(1) Includes redemption discounts totaling $11.5 million in connection with discretionary open market repurchases of ourpre-bankruptcy indebtedness offset by $0.7 million for thewrite-off of associated issuance discounts and deferred financing costs.

(2) Contractual interest of $178,049 during the year ended December 31, 2015.

(3) Includes $2.1 billion in adjustments as a result of the adoption of fresh-start accounting and $22.7 million of post-petition professional fees incurred in connection with our bankruptcy proceedings offset by $1.6 billion net gain on settlement of Liabilities Subject to Compromise (“LSTC”) in accordance with the Reorganization Plan.

(4) Includes thewrite-off of $31.4 million of deferred finance charges and $5.7 million of debt discount and $2.2 million of post-petition professional fees incurred in connection with our bankruptcy proceedings.

(5) Reflects gain with respect to our April 2017 purchase of theVantage 260, a class154-44C jackup rig, and related multi-year drilling contract. The gain on bargain purchase resulted from the excess of the net fair value of the assets acquired and liabilities assumed in the acquisition over the purchase price. EBITDA is not a substitute for GAAP measures of net income, operating income or any other performance measure derived in accordance with GAAP or as an alternative to cash flows from operating activities or other liquidity measures derived in accordance with GAAP.

(6) Earnings before interest, taxes and depreciation and amortization (“EBITDA”) represents net income (loss) before (i) interest expense, (ii) provision for income taxes and (iii) depreciation and amortization expense. EBITDA is not a financial measure under generally accepted accounting principles (“GAAP”) as defined under the rules of the SEC, and is intended as a supplemental measure of our performance. We believe this measure is commonly used by analysts and investors to analyze and compare companies on the basis of operating performance.

(7) Adjusted EBITDA represents EBITDA adjusted to exclude gain (loss) on debt extinguishment, reorganization items and bargain purchase gain. Adjusted EBITDA is anon-GAAP financial measure as defined under the rules of the SEC, and is intended as a supplemental measure of our performance. We believe this measure is commonly used by analysts and investors to analyze and compare companies on the basis of operating performance. Adjusted EBITDA is not a substitute for GAAP measures of net income, operating income or any other performance measure derived in accordance with GAAP or as an alternative to cash flows from operating activities or other liquidity measures derived in accordance with GAAP.

(8) $2.7 billion of long-term debt was classified as Liabilities Subject to Compromise as of December 31, 2015.

9

RISK FACTORS

We may not be able to replace expiring or terminated contracts for our existing rigs at dayrates that are as attractive or economically feasible for us.

Due to the cyclical nature and high level of competition in our industry, we may not be able to replace expiring or terminated contracts. Our ability to replace expiring or terminated contracts will depend on prevailing market conditions, the specific needs of our customers, and numerous other factors beyond our control. Additionally, any contracts for our drilling units may be at dayrates that are below existing dayrates, which could have a material adverse effect on our overall business, financial condition, results of operations and future prospects.

In particular, the Tungsten Explorer’s most recently concluded drilling contract, which ended in October 2018, accounted for the highest dayrate of any of our other drillships’ drilling contracts for the current year. The Tungsten is currently off contract and will be undergoing certain equipment recertifications and upgrades. Given current market conditions, it is unlikely that we will be able to secure a new drilling contract at a comparable rate in the near term. If we are unable to secure a new drilling contract at a comparable rate, our financial condition, results of operations and cash flows may be adversely affected.

The desktop appraisals referred to in this offering circular are highly dependent on variable assumptions that are subject to change, and the market value of vessels can be expected to fluctuate.

This offering circular refers to desktop appraisals of our vessels that have been prepared by Fearnley, an independent vessel broker. These appraisals were based on prevailing market conditions at the time that they were prepared on October 25, 2018 and were prepared without a physical inspection or other verification of the condition or status of the vessels. The appraisals were also based on numerous assumptions, including that the vessels were in good and seaworthy condition and in a favorable class position and that there existed a willing buyer and seller for each vessel, all of which are subject to change. The market values of vessels can be expected to fluctuate depending on general economic and market conditions, including supply and demand dynamics affecting the offshore drilling industry, and there can be no assurance that the values cited by Fearnley could be sustained or realized in an actual transaction.

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