Vantage Drilling International Reports Second Quarter Results for 2020
HOUSTON, Aug. 06, 2020 (GLOBE NEWSWIRE) -- Vantage Drilling International ("Vantage" or the “Company”) reported a net loss attributable to controlling interest of approximately $31.9 million or $2.43 per diluted share for the three months ended June 30, 2020, based on the weighted average shares outstanding after the conversion of our convertible notes in December 2019, as compared to a net income attributable to controlling interest of $590.7 million or $116.86 per diluted share for the three months ended June 30, 2019.
Net income for the three months ended June 30, 2019, included payments by Petrobras Venezuela Investments & Services, BV, a subsidiary of Petroleo Brasileiro S.A. (“Petrobras”), of approximately $690.8 million to Vantage Deepwater Company, one of our subsidiaries, and by Petrobras America, Inc., a subsidiary of Petrobras, of approximately $10.1 million to Vantage Deepwater Drilling, Inc., also one of our subsidiaries. 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.
As of June 30, 2020, Vantage had approximately $188.4 million in cash, including $13.1 million of restricted cash, compared to $242.9 million in cash, including $11.0 million of restricted cash at December 31, 2019.
Ihab Toma, CEO, commented. “Despite the very challenging conditions for offshore drilling during the COVID-19 pandemic and economic crisis, we successfully completed the first ever well offshore Lebanon with the Tungsten Explorer during the second quarter and were awarded a new contract in Montenegro for the Topaz Driller. I am personally very proud of the quality and motivation of our employees and their focus on our customers, which allowed us to continue to deliver a strong performance across our operating fleet. We remain committed to maintaining this performance while operating safely and managing costs. During the quarter we commenced a plan to reduce costs across the board. We secured material price reductions from vendors, initiated significant headcount and salary reductions both onshore and offshore and implemented other cost reduction measures to reflect the lower levels of operating activity. While the decision to reduce personnel was difficult, we remain committed to seek measures to reduce our spending and to conserve cash while remaining focused on performance, but never at the expense of safety.”
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:
Douglas E. Stewart
Chief Financial Officer and General Counsel
Vantage Drilling International
C/O Vantage Energy Services, Inc.
777 Post Oak Blvd., Suite 800
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, | ||||||||||||||||
| 2020 | 2019 | 2020 | 2019 | ||||||||||||||
| Revenue | |||||||||||||||||
| Contract drilling services | $ | 33,151 | $ | 35,765 | $ | 77,470 | $ | 65,745 | |||||||||
| Contract termination revenue | — | 594,029 | — | 594,029 | |||||||||||||
| Reimbursables and other | 3,624 | 6,589 | 10,761 | 11,164 | |||||||||||||
| Total revenue | 36,775 | 636,383 | 88,231 | 670,938 | |||||||||||||
| Operating costs and expenses | |||||||||||||||||
| Operating costs | 38,104 | 38,081 | 86,659 | 76,623 | |||||||||||||
| General and administrative | 4,716 | 70,702 | 11,886 | 79,370 | |||||||||||||
| Depreciation | 18,401 | 18,499 | 36,417 | 37,032 | |||||||||||||
| Total operating costs and expenses | 61,221 | 127,282 | 134,962 | 193,025 | |||||||||||||
| (Loss) income from operations | (24,446 | ) | 509,101 | (46,731 | ) | 477,913 | |||||||||||
| Other income (expense) | |||||||||||||||||
| Interest income | 111 | 108,305 | 812 | 109,369 | |||||||||||||
| Interest expense and other financing charges | (8,601 | ) | (10,435 | ) | (17,021 | ) | (26,250 | ) | |||||||||
| Other, net | 12 | (58 | ) | 2,367 | 124 | ||||||||||||
| Total other (expense) income | (8,478 | ) | 97,812 | (13,842 | ) | 83,243 | |||||||||||
| (Loss) income before income taxes | (32,924 | ) | 606,913 | (60,573 | ) | 561,156 | |||||||||||
| Income tax (benefit) provision | (1,024 | ) | 16,454 | 1,897 | 18,601 | ||||||||||||
| Net (loss) income | (31,900 | ) | 590,459 | (62,470 | ) | 542,555 | |||||||||||
| Net income (loss) attributable to noncontrolling interests | 12 | (270 | ) | 14 | (284 | ) | |||||||||||
| Net (loss) income attributable to shareholders | $ | (31,912 | ) | $ | 590,729 | $ | (62,484 | ) | $ | 542,839 | |||||||
| (Loss) earnings per share | |||||||||||||||||
| Basic | $ | (2.43 | ) | $ | 116.96 | $ | (4.76 | ) | $ | 107.60 | |||||||
| Diluted | $ | (2.43 | ) | $ | 116.86 | $ | (4.76 | ) | $ | 107.38 | |||||||
| Weighted average ordinary shares outstanding | |||||||||||||||||
| Basic | 13,115 | 5,051 | 13,115 | 5,045 | |||||||||||||
| Diluted | 13,115 | 5,056 | 13,115 | 5,055 | |||||||||||||
| Vantage Drilling International | |||||||||||||||||
| Supplemental Operating Data | |||||||||||||||||
| (Unaudited, in thousands, except percentages) | |||||||||||||||||
| Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||||
| 2020 | 2019 | 2020 | 2019 | ||||||||||||||
| Operating costs and expenses | |||||||||||||||||
| Jackups | $ | 15,669 | $ | 14,108 | $ | 37,142 | $ | 31,853 | |||||||||
| Deepwater | 18,831 | 16,492 | 38,870 | 32,307 | |||||||||||||
| Operations support | 2,016 | 3,361 | 5,453 | 6,460 | |||||||||||||
| Reimbursables | 1,588 | 4,120 | 5,194 | 6,003 | |||||||||||||
| $ | 38,104 | $ | 38,081 | $ | 86,659 | $ | 76,623 | ||||||||||
| Utilization | |||||||||||||||||
| Jackups | 60.0 | % | 93.7 | % | 73.9 | % | 96.0 | % | |||||||||
| Deepwater | 45.6 | % | 49.2 | % | 53.7 | % | 40.9 | % | |||||||||
| Vantage Drilling International | |||||||||
| Consolidated Balance Sheet | |||||||||
| (In thousands, except share and par value information) | |||||||||
| (Unaudited) | |||||||||
| June 30, 2020 | December 31, 2019 | ||||||||
| ASSETS | |||||||||
| Current assets | |||||||||
| Cash and cash equivalents | $ | 175,311 | $ | 231,947 | |||||
| Restricted cash | 3,667 | 2,511 | |||||||
| Trade receivables | 53,706 | 46,504 | |||||||
| Inventory | 50,684 | 48,368 | |||||||
| Prepaid expenses and other current assets | 13,429 | 16,507 | |||||||
| Total current assets | 296,797 | 345,837 | |||||||
| Property and equipment | |||||||||
| Property and equipment | 1,003,844 | 1,002,968 | |||||||
| Accumulated depreciation | (318,135 | ) | (281,842 | ) | |||||
| Property and equipment, net | 685,709 | 721,126 | |||||||
| Operating lease ROU assets | 4,805 | 6,706 | |||||||
| Other assets | 16,571 | 17,068 | |||||||
| Total assets | $ | 1,003,882 | $ | 1,090,737 | |||||
| LIABILITIES AND SHAREHOLDERS' EQUITY | |||||||||
| Current liabilities | |||||||||
| Accounts payable | $ | 32,641 | $ | 49,599 | |||||
| Other current liabilities | 21,685 | 26,936 | |||||||
| Total current liabilities | 54,326 | 76,535 | |||||||
| Long–term debt, net of discount and financing costs of $5,601 and $6,421, respectively | 344,399 | 343,579 | |||||||
| Other long-term liabilities | 15,712 | 17,532 | |||||||
| Commitments and contingencies | |||||||||
| Shareholders' equity | |||||||||
| Ordinary shares, $0.001 par value, 50 million shares authorized; 13,115,026 shares issued and outstanding, respectively | 13 | 13 | |||||||
| Additional paid-in capital | 633,594 | 634,770 | |||||||
| Accumulated (deficit) earnings | (45,420 | ) | 17,064 | ||||||
| Controlling interest shareholders' equity | 588,187 | 651,847 | |||||||
| Noncontrolling interests | 1,258 | 1,244 | |||||||
| Total equity | 589,445 | 653,091 | |||||||
| Total liabilities and shareholders' equity | $ | 1,003,882 | $ | 1,090,737 | |||||
| Vantage Drilling International | |||||||||
| Consolidated Statement of Cash Flows | |||||||||
| (In thousands) | |||||||||
| (Unaudited) | |||||||||
| Six Months Ended June 30, | |||||||||
| 2020 | 2019 | ||||||||
| CASH FLOWS FROM OPERATING ACTIVITIES | |||||||||
| Net (loss) income | $ | (62,470 | ) | $ | 542,555 | ||||
| Adjustments to reconcile net income to net cash (used in) provided by operating activities | |||||||||
| Depreciation expense | 36,417 | 37,032 | |||||||
| Amortization of debt financing costs | 820 | 807 | |||||||
| Amortization of debt discount | — | 5,354 | |||||||
| Amortization of contract value | — | 1,643 | |||||||
| PIK interest on the Convertible Notes | — | 3,845 | |||||||
| Share-based compensation expense | 1,028 | 2,064 | |||||||
| Deferred income tax (benefit) expense | (90 | ) | 497 | ||||||
| Loss on disposal of assets | — | 109 | |||||||
| Gain on settlement of restructuring agreement | (2,278 | ) | — | ||||||
| Changes in operating assets and liabilities: | |||||||||
| Trade receivables | (7,202 | ) | (3,047 | ) | |||||
| Inventory | (1,297 | ) | (266 | ) | |||||
| Prepaid expenses and other current assets | 2,545 | (2,274 | ) | ||||||
| Other assets | 3,410 | 2,641 | |||||||
| Accounts payable | (14,680 | ) | 63,527 | ||||||
| Other current liabilities and other long-term liabilities | (8,717 | ) | 8,799 | ||||||
| Net cash (used in) provided by operating activities | (52,514 | ) | 663,286 | ||||||
| CASH FLOWS FROM INVESTING ACTIVITIES | |||||||||
| Additions to property and equipment | (2,021 | ) | (6,606 | ) | |||||
| Net cash used in investing activities | (2,021 | ) | (6,606 | ) | |||||
| CASH FLOWS FROM FINANCING ACTIVITIES | |||||||||
| Contributions from holders of noncontrolling interests | — | 1,181 | |||||||
| Debt issuance costs | — | (487 | ) | ||||||
| Net cash provided by financing activities | — | 694 | |||||||
| Net (decrease) increase in unrestricted and restricted cash and cash equivalents | (54,535 | ) | 657,374 | ||||||
| Unrestricted and restricted cash and cash equivalents—beginning of period | 242,944 | 239,387 | |||||||
| Unrestricted and restricted cash and cash equivalents—end of period | $ | 188,409 | $ | 896,761 | |||||
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