Vantage Drilling Company Reports Third Quarter Results for 2015
HOUSTON, TX--(Marketwired - Nov 9, 2015) - Vantage Drilling Company ("Vantage" or the "Company"
(OTC PINK: VTGDF) reports a net loss for the three months ended September 30, 2015 of $52.4 million or ($.17) per diluted share as compared to a net loss of $5.6 million or ($.02) per diluted share for the three months ended September 30, 2014.
Our results for the three months ended September 30, 2015 include several significant items that had a material impact on our financial results. Each of these items and the future outlook for our Company are more fully discussed in our Quarterly Report on Form 10-Q filed with the Securities and Exchange Commission (SEC) and is available on our website and the SEC website. The significant items included in the net loss for the three months ended September 30, 2015 and 2014, include -
Titanium Explorer. Our customer for the Titanium Explorer operating in the United States Gulf of Mexico sent us a notice of termination of the Agreement for the Provision of Services Contract for the Titanium Explorer on August 31, 2015 effective upon completion of operation on the current well. We completed the well in early September and demobilized the rig. We believe the termination of the contract was wrongful and commenced arbitration proceedings on August 31, 2015 to recover damages, including loss of future revenues and expenses, in connection with the wrongful termination of the contract. In connection with the cancellation of the contract, we recognized $21.5 million of deferred mobilization revenue.
Cobalt Explorer. On August 13, 2015, we terminated the contract for the construction of the Cobalt Explorer with the shipyard pursuant to the terms of the contract. In connection with the termination of this contract, we expensed approximately $31.2 million of development costs and interest previously capitalized to the Cobalt Explorer. During the three months ended September 30, 2015, we capitalized $792,000 of interest prior to the cancellation of the project. During the three months ended September 30, 2014 we capitalized $1.3 million to the Cobalt Explorer.
Gain on Retirement of Debt. During the three month periods ended September 30, 2015 and 2014, we recognized gains on the early retirement of debt of approximately $12.7 million and $1.1 million, respectively.
Restructuring Costs. In response to current market conditions, we reduced operating costs and capital expenditures for our rig fleet. During the three months ended September 30, 2015, we recognized a restructuring charge of approximately $2.5 million consisting primarily of severance costs associated with our reduction in support personnel.
Income Tax Provision. Our income taxes are generally dependent upon the results of our operations and when we generate significant revenues in jurisdictions where the income tax liability is based on gross revenues or asset values, there is no correlation to the operating results and the income tax expense. Furthermore, we are required to report our income tax provision based on our estimated annual effective tax rate applied to the year to date period. Any adjustment to our estimated annual effective tax rate will result in a catch-up adjustment for the earlier reported interim periods. Due to the cancellation of the Titanium Explorer contract, we have significantly reduced our forecasted operating results for the remainder of 2015 which has significantly impacted our estimated annual effective tax rate. This resulted in an adjustment to our income tax provision of approximately $52.4 million recognized during the three months ended September 30, 2015.
We will not be holding a conference call to discuss our results for the three month period ended September 30, 2015.
Vantage, a Cayman Islands exempted company, is an offshore drilling contractor, with an owned fleet of three ultra-deepwater drillships; the Platinum Explorer, the Titanium Explorer and the Tungsten Explorer, as well as four Baker Marine Pacific Class 375 ultra-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. Vantage also provides construction supervision services for, and will operate and manage, drilling units owned by others. Through its fleet of seven owned drilling units, Vantage is a provider of offshore contract drilling services globally to major, national and large independent oil and natural gas companies.
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.
HOUSTON, TX--(Marketwired - Nov 9, 2015) - Vantage Drilling Company ("Vantage" or the "Company"
(OTC PINK: VTGDF) reports a net loss for the three months ended September 30, 2015 of $52.4 million or ($.17) per diluted share as compared to a net loss of $5.6 million or ($.02) per diluted share for the three months ended September 30, 2014. Our results for the three months ended September 30, 2015 include several significant items that had a material impact on our financial results. Each of these items and the future outlook for our Company are more fully discussed in our Quarterly Report on Form 10-Q filed with the Securities and Exchange Commission (SEC) and is available on our website and the SEC website. The significant items included in the net loss for the three months ended September 30, 2015 and 2014, include -
Titanium Explorer. Our customer for the Titanium Explorer operating in the United States Gulf of Mexico sent us a notice of termination of the Agreement for the Provision of Services Contract for the Titanium Explorer on August 31, 2015 effective upon completion of operation on the current well. We completed the well in early September and demobilized the rig. We believe the termination of the contract was wrongful and commenced arbitration proceedings on August 31, 2015 to recover damages, including loss of future revenues and expenses, in connection with the wrongful termination of the contract. In connection with the cancellation of the contract, we recognized $21.5 million of deferred mobilization revenue.
Cobalt Explorer. On August 13, 2015, we terminated the contract for the construction of the Cobalt Explorer with the shipyard pursuant to the terms of the contract. In connection with the termination of this contract, we expensed approximately $31.2 million of development costs and interest previously capitalized to the Cobalt Explorer. During the three months ended September 30, 2015, we capitalized $792,000 of interest prior to the cancellation of the project. During the three months ended September 30, 2014 we capitalized $1.3 million to the Cobalt Explorer.
Gain on Retirement of Debt. During the three month periods ended September 30, 2015 and 2014, we recognized gains on the early retirement of debt of approximately $12.7 million and $1.1 million, respectively.
Restructuring Costs. In response to current market conditions, we reduced operating costs and capital expenditures for our rig fleet. During the three months ended September 30, 2015, we recognized a restructuring charge of approximately $2.5 million consisting primarily of severance costs associated with our reduction in support personnel.
Income Tax Provision. Our income taxes are generally dependent upon the results of our operations and when we generate significant revenues in jurisdictions where the income tax liability is based on gross revenues or asset values, there is no correlation to the operating results and the income tax expense. Furthermore, we are required to report our income tax provision based on our estimated annual effective tax rate applied to the year to date period. Any adjustment to our estimated annual effective tax rate will result in a catch-up adjustment for the earlier reported interim periods. Due to the cancellation of the Titanium Explorer contract, we have significantly reduced our forecasted operating results for the remainder of 2015 which has significantly impacted our estimated annual effective tax rate. This resulted in an adjustment to our income tax provision of approximately $52.4 million recognized during the three months ended September 30, 2015.
We will not be holding a conference call to discuss our results for the three month period ended September 30, 2015.
Vantage, a Cayman Islands exempted company, is an offshore drilling contractor, with an owned fleet of three ultra-deepwater drillships; the Platinum Explorer, the Titanium Explorer and the Tungsten Explorer, as well as four Baker Marine Pacific Class 375 ultra-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. Vantage also provides construction supervision services for, and will operate and manage, drilling units owned by others. Through its fleet of seven owned drilling units, Vantage is a provider of offshore contract drilling services globally to major, national and large independent oil and natural gas companies.
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.
