Vantage Drilling International Reports Second Quarter Results for 2022

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Vantage Drilling International
Vantage Drilling International

HOUSTON, Aug. 11, 2022 (GLOBE NEWSWIRE) -- Vantage Drilling International ("Vantage" or the “Company”) reported net income attributable to controlling interest of approximately $48.1 million, or  $3.61 per diluted share, for the three months ended June 30, 2022, based on the weighted average shares outstanding, as compared to a net loss attributable to controlling interest of $29.0 million, or $2.21 per diluted share, for the three months ended June 30, 2021.

The net income is a result of the sale of the Emerald Driller Company (“EDC”) and its three jackup rigs, the Emerald Driller, the Aquamarine Driller, and the Sapphire Driller, which closed on May 27, 2022.  The Company received $170.0 million as purchase price consideration and $30.0 million in certain contract preparation expense reimbursements, and as a result, a net gain of $60.8 million was recognized during the three months ended June 30, 2022.  The gain is subject to potential adjustments contemplated by the relevant share purchase agreement, any such adjustments to be finalized by September 24, 2022. 

As of June 30, 2022, Vantage had approximately $246.3 million in cash, including $18.9 million of restricted cash, compared to $90.6 million in cash, including $17.3 million of restricted cash, at December 31, 2021. The Company used $32.0 million in cash from operations during the second quarter of 2022 compared to $25.6 million used during the same period of 2021.

Ihab Toma, CEO, commented: “As previously announced, we are very pleased to have closed the sale of EDC to ADES Arabia and to support their operations in Qatar.  The sale meaningfully improved the Company’s liquidity.”

Mr. Toma continued: “With regard to the rigs we own and manage, we continue to see a constructive environment as rig activity levels remain strong.  Our focus remains on taking advantage of the recovery that is underway to secure higher dayrates and continuing to provide safe, efficient and reliable operations for our clients.”

Vantage, a Cayman Islands exempted company, is an offshore drilling contractor, with a fleet of two ultra-deepwater drillships, and two 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 gas companies. Vantage also markets, operates and provides management services in respect of, third party-owned drilling units. www.vantagedrilling.com.

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.

Non-GAAP Measures

We report our financial results in accordance with generally accepted accounting principles (GAAP) in the United States.  However, in our earnings release and during our earnings calls we may reference company information that does not conform to GAAP.  Generally, a non-GAAP financial measure is a numerical measure of a company's performance, financial position, or cash flows that excludes or includes amounts that are not normally excluded or included in the most directly comparable measure calculated and presented in accordance with GAAP.  Management believes that an analysis of this data is meaningful to investors because it provides insight with respect to ongoing operating results of the Company and allows investors to better evaluate the financial results of the Company.  However, these measures should not be viewed as an alternative to or substitute for GAAP measures of performance, and these non-GAAP measures may not be consistent with previously published Company reports on Forms 10-K, 10-Q and 8-K.  Non-GAAP measures we may reference have been reconciled to the nearest GAAP measure in the tables entitled Reconciliation of GAAP to Non-GAAP Financial Measures below.

Public & Investor Relations Contact:
Douglas E. Stewart
Chief Financial Officer and General Counsel
Vantage Drilling International
C/O Vantage Energy Services, Inc.
777 Post Oak Blvd., Suite 440
Houston, Texas 77056
(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,

 

 

 

2022

 

 

2021

 

 

2022

 

 

2021

 

Revenue

 

 

 

 

 

 

 

 

 

 

 

 

Contract drilling services

 

$

42,744

 

 

$

31,655

 

 

$

87,657

 

 

$

49,380

 

Management fees

 

 

2,840

 

 

 

497

 

 

 

3,943

 

 

 

595

 

Reimbursables and other

 

 

27,654

 

 

 

3,449

 

 

 

39,969

 

 

 

5,792

 

Total revenue

 

 

73,238

 

 

 

35,601

 

 

 

131,569

 

 

 

55,767

 

Operating costs and expenses

 

 

 

 

 

 

 

 

 

 

 

 

Operating costs

 

 

59,405

 

 

 

36,056

 

 

 

103,338

 

 

 

61,413

 

General and administrative

 

 

6,910

 

 

 

4,967

 

 

 

13,492

 

 

 

10,462

 

Depreciation

 

 

11,087

 

 

 

14,161

 

 

 

22,382

 

 

 

28,286

 

Gain on EDC Sale

 

 

(60,781

)

 

 

 

 

 

(60,781

)

 

 

 

Total operating costs and expenses

 

 

16,621

 

 

 

55,184

 

 

 

78,431

 

 

 

100,161

 

Income (loss) from operations

 

 

56,617

 

 

 

(19,583

)

 

 

53,138

 

 

 

(44,394

)

Other (expense) income

 

 

 

 

 

 

 

 

 

 

 

 

Interest income

 

 

7

 

 

 

10

 

 

 

11

 

 

 

110

 

Interest expense and other financing charges

 

 

(8,503

)

 

 

(8,511

)

 

 

(17,007

)

 

 

(17,021

)

Other, net

 

 

(1,011

)

 

 

(179

)

 

 

(1,786

)

 

 

(793

)

Total other expense

 

 

(9,507

)

 

 

(8,680

)

 

 

(18,782

)

 

 

(17,704

)

Income (loss) before income taxes

 

 

47,110

 

 

 

(28,263

)

 

 

34,356

 

 

 

(62,098

)

Income tax (benefit) provision

 

 

(1,221

)

 

 

720

 

 

 

217

 

 

 

2,882

 

Net income (loss)

 

 

48,331

 

 

 

(28,983

)

 

 

34,139

 

 

 

(64,980

)

Net income (loss) attributable to noncontrolling interests

 

 

232

 

 

 

(18

)

 

 

938

 

 

 

(31

)

Net income (loss) attributable to shareholders

 

$

48,099

 

 

$

(28,965

)

 

$

33,201

 

 

$

(64,949

)

 

 

 

 

 

 

 

 

 

 

 

 

 

EBITDA (1)

 

$

66,461

 

 

$

(5,583

)

 

$

72,796

 

 

$

(16,870

)

 

 

 

 

 

 

 

 

 

 

 

 

 

Earnings (loss) per share

 

 

 

 

 

 

 

 

 

 

 

 

Basic

 

$

3.67

 

 

$

(2.21

)

 

$

2.53

 

 

$

(4.95

)

Diluted

 

$

3.61

 

 

$

(2.21

)

 

$

2.49

 

 

$

(4.95

)

Weighted average ordinary shares outstanding,

 

 

 

 

 

 

 

 

 

 

 

 

Basic

 

 

13,115

 

 

 

13,115

 

 

 

13,115

 

 

 

13,115

 

Diluted

 

 

13,332

 

 

 

13,115

 

 

 

13,330

 

 

 

13,115

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(1) EBITDA represents net income (loss) before (i) interest income (expense), (ii) provision for income taxes and (iii) depreciation and amortization expense.  EBITDA is not a financial measure under 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.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Vantage Drilling International

 

Supplemental Operating Data

 

(Unaudited, in thousands, except percentages)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Three Months Ended June 30,

 

 

Six Months Ended June 30,

 

 

 

2022

 

 

2021

 

 

2022

 

 

2021

 

Operating costs and expenses

 

 

 

 

 

 

 

 

 

 

 

 

Jackups

 

$

10,249

 

 

$

22,170

 

 

$

18,674

 

 

$

36,319

 

Deepwater

 

 

15,934

 

 

 

8,820

 

 

 

30,477

 

 

 

16,064

 

Managed Rigs

 

 

7

 

 

 

756

 

 

 

1

 

 

 

756

 

Held for Sale (2)

 

 

3,891

 

 

 

 

 

 

10,712

 

 

 

 

Operations support

 

 

2,930

 

 

 

2,317

 

 

 

5,867

 

 

 

4,529

 

Reimbursables

 

 

26,394

 

 

 

1,993

 

 

 

37,607

 

 

 

3,745

 

Total operating costs and expenses

 

$

59,405

 

 

$

36,056

 

 

$

103,338

 

 

$

61,413

 

Utilization

 

 

 

 

 

 

 

 

 

 

 

 

Jackups

 

 

98.8

%

 

 

39.9

%

 

 

79.6

%

 

 

35.3

%

Deepwater

 

 

99.7

%

 

 

49.7

%

 

 

99.2

%

 

 

49.4

%

Held for Sale (2)

 

 

47.0

%

 

N/A

 

 

 

62.3

%

 

N/A

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(2) Included in the sale of EDC, which owns the Emerald Driller, Sapphire Driller and Aquamarine Driller.  Each of these rigs were classified as held for sale on our Consolidated Balance Sheets up to the closing date, which was on May 27, 2022, during the current period and at December 31, 2021.

 


Vantage Drilling International

 

Consolidated Balance Sheets

 

(In thousands, except share and par value information)

 

(Unaudited)

 

 

 

 

 

 

 

 

 

 

June 30, 2022

 

 

December 31, 2021

 

 

 

 

 

 

 

 

ASSETS

 

 

 

 

 

 

Current assets

 

 

 

 

 

 

Cash and cash equivalents

 

$

227,328

 

 

$

73,343

 

Restricted cash

 

 

3,323

 

 

 

1,621

 

Trade receivables, net of allowance for doubtful accounts of $5.0 million, each period

 

 

79,399

 

 

 

37,527

 

Materials and supplies

 

 

38,906

 

 

 

37,580

 

Assets held for sale

 

 

 

 

 

117,117

 

Prepaid expenses and other current assets

 

 

13,191

 

 

 

18,309

 

Total current assets

 

 

362,147

 

 

 

285,497

 

Property and equipment

 

 

 

 

 

 

Property and equipment

 

 

645,304

 

 

 

645,622

 

Accumulated depreciation

 

 

(287,314

)

 

 

(266,018

)

Property and equipment, net

 

 

357,990

 

 

 

379,604

 

Operating lease ROU assets

 

 

1,610

 

 

 

2,450

 

Other assets

 

 

32,549

 

 

 

31,843

 

Total assets

 

$

754,296

 

 

$

699,394

 

 

 

 

 

 

 

 

LIABILITIES AND SHAREHOLDERS' EQUITY

 

 

 

 

 

 

Current liabilities

 

 

 

 

 

 

Accounts payable

 

$

42,870

 

 

$

31,420

 

Other current liabilities

 

 

53,819

 

 

 

31,533

 

Liabilities held for sale

 

 

 

 

 

6,720

 

Total current liabilities

 

 

96,689

 

 

 

69,673

 

Long–term debt, net of discount and financing costs of $2,322 and $3,142, respectively

 

 

347,678

 

 

 

346,858

 

Other long-term liabilities

 

 

9,958

 

 

 

17,012

 

Commitments and contingencies

 

 

 

 

 

 

Shareholders' equity

 

 

 

 

 

 

Ordinary shares, $0.001 par value, 50 million shares authorized; 13,115,026 shares issued and outstanding, each period

 

 

13

 

 

 

13

 

Additional paid-in capital

 

 

633,828

 

 

 

633,847

 

Accumulated deficit

 

 

(336,591

)

 

 

(369,792

)

Controlling interest shareholders' equity

 

 

297,250

 

 

 

264,068

 

Noncontrolling interests

 

 

2,721

 

 

 

1,783

 

Total equity

 

 

299,971

 

 

 

265,851

 

Total liabilities and shareholders' equity

 

$

754,296

 

 

$

699,394

 


Vantage Drilling International

 

Consolidated Statement of Cash Flows

 

(In thousands)

 

(Unaudited)

 

 

 

Six Months Ended June 30,

 

 

 

2022

 

 

2021

 

CASH FLOWS FROM OPERATING ACTIVITIES

 

 

 

 

 

 

Net income (loss)

 

$

34,139

 

 

$

(64,980

)

Adjustments to reconcile net income (loss) to net cash used in operating activities

 

 

 

 

 

 

Depreciation expense

 

 

22,382

 

 

 

28,286

 

Amortization of debt financing costs

 

 

820

 

 

 

819

 

Share-based compensation expense

 

 

44

 

 

 

337

 

Deferred income tax expense

 

 

410

 

 

 

236

 

Gain on disposal of assets

 

 

(1,630

)

 

 

(2,715

)

Gain on EDC Sale

 

 

(60,781

)

 

 

 

Changes in operating assets and liabilities:

 

 

 

 

 

 

Trade receivables, net

 

 

(58,864

)

 

 

(6,888

)

Materials and supplies

 

 

(1,811

)

 

 

(1,481

)

Prepaid expenses and other current assets

 

 

2,918

 

 

 

(1,440

)

Other assets

 

 

(25,043

)

 

 

(1,821

)

Accounts payable

 

 

29,564

 

 

 

2,798

 

Other current liabilities and other long-term liabilities

 

 

17,696

 

 

 

5,905

 

Net cash used in operating activities

 

 

(40,156

)

 

 

(40,944

)

CASH FLOWS FROM INVESTING ACTIVITIES

 

 

 

 

 

 

Additions to property and equipment

 

 

(7,285

)

 

 

(2,711

)

Net proceeds from EDC Sale

 

 

200,000

 

 

 

 

Net proceeds from sale of assets

 

 

3,100

 

 

 

 

Net proceeds from sale of Titanium Explorer

 

 

 

 

 

13,557

 

Net cash provided by investing activities

 

 

195,815

 

 

 

10,846

 

CASH FLOWS FROM FINANCING ACTIVITIES

 

 

 

 

 

 

Net cash provided by financing activities

 

 

 

 

 

 

Net increase (decrease) in unrestricted and restricted cash and cash equivalents

 

 

155,659

 

 

 

(30,098

)

Unrestricted and restricted cash and cash equivalents—beginning of period

 

 

90,608

 

 

 

154,487

 

Unrestricted and restricted cash and cash equivalents—end of period

 

$

246,267

 

 

$

124,389

 


Vantage Drilling International

 

Non-GAAP Measures

 

(In thousands)

 

(Unaudited)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Three Months Ended June 30,

 

 

Six Months Ended June 30,

 

Reconciliation of EBITDA

 

2022

 

 

2021

 

 

2022

 

 

2021

 

Net income (loss) attributable to shareholders

 

$

48,099

 

 

$

(28,965

)

 

$

33,201

 

 

$

(64,949

)

Depreciation

 

 

11,087

 

 

 

14,161

 

 

 

22,382

 

 

 

28,286

 

Interest income

 

 

(7

)

 

 

(10

)

 

 

(11

)

 

 

(110

)

Interest expense and other financing costs

 

 

8,503

 

 

 

8,511

 

 

 

17,007

 

 

 

17,021

 

Income tax (benefit) provision

 

 

(1,221

)

 

 

720

 

 

 

217

 

 

 

2,882

 

EBITDA

 

$

66,461

 

 

$

(5,583

)

 

$

72,796

 

 

$

(16,870

)