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Vantage Drilling Company Reports Fourth Quarter and Full Year 2013 Results

Vantage Drilling Company Reports Fourth Quarter and Full Year 2013 Results  HOUSTON, TX -- (Marketwired) -- 02/28/14 --  Vantage Drilling Company ("Vantage" or the "Company") (NYSE MKT: VTG) reports record net income for the three months ended December 31, 2013 of $30.3 million or $0.09 per diluted share as compared to a net loss of $11.5 million or ($0.04) per diluted share excluding approximately $122.1 million of charges for the early retirement of debt, for the three months ended December 31, 2012. Including the charges for the early retirement of debt in the prior year, the company reported a net loss of $133.6 million or ($0.45) per diluted share.  For the twelve months ended December 31, 2013, Vantage reports net income of approximately $16.5 million or $0.05 per diluted share excluding approximately $98.3 million of charges for the early retirement of debt as compared to a net loss of $20.7 million or ($0.07) per diluted share for the twelve months ended December 31, 2012, excluding approximately $124.6 million of charges for the early retirement of debt. Including the charges for the early retirement of debt, the company reported losses of $81.8 million or ($0.27) per diluted share and $145.3 million or ($0.50) per diluted share for the twelve months ended December 31, 2013 and 2012, respectively.   Paul Bragg, Chairman and Chief Executive Officer, commented, "We are pleased to announce record revenue, EBITDA and net income for the quarter with exceptional operating performance of all seven of our completed rigs. These exceptional results are due not only to the quality of our fleet, but also to the dedicated efforts of our workforce."  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 an additional ultra-deepwater drillship, the Cobalt Explorer, now under construction, and 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.                                                                                                             Vantage Drilling Company                                               Consolidated Statement of Operations                                       (In thousands, except per share amounts)                                                                                                                            Three Months Ended        Twelve Months Ended                                   December 31,              December 31,                                 ------------------------  ------------------------                               2013         2012         2013         2012                              -----------  -----------  -----------  -----------                           (Unaudited)  (Unaudited)                            Revenues                                                                       Contract drilling                                                             services              $   216,775  $   113,696  $   666,129  $   423,897    Management fees              5,111        1,961       14,622        6,605    Reimbursables               16,651        7,307       51,309       40,970                           -----------  -----------  -----------  -----------      Total revenues           238,537      122,964      732,060      471,472                           -----------  -----------  -----------  -----------  Operating costs and                                                           expenses                                                                      Operating costs             99,349       58,731      335,915      230,089    General and                                                                   administrative              9,240        7,416       32,612       26,002    Depreciation                31,882       19,228      106,609       68,747                           -----------  -----------  -----------  -----------      Total operating                                                               costs and expenses      140,471       85,375      475,136      324,838                           -----------  -----------  -----------  -----------  Income from operations        98,066       37,589      256,924      146,634  Other income (expense)                                                         Interest income                 26           42          221           90    Interest expense and                                                          other financing                                                              charges                   (55,853)     (44,600)    (214,149)    (149,118)   Loss on debt                                                                  extinguishment                  -     (122,071)     (98,327)    (124,599)   Other, net                    (574)        (205)       1,621          595                           -----------  -----------  -----------  -----------      Total other income                                                            (expense)               (56,401)    (166,834)    (310,634)    (273,032)                          -----------  -----------  -----------  -----------  Income (loss) before                                                          income taxes                 41,665     (129,245)     (53,710)    (126,398) Income tax provision          11,349        4,365       28,115       18,906                           -----------  -----------  -----------  -----------  Net income (loss)        $    30,316  $  (133,610) $   (81,825) $  (145,304)                          ===========  ===========  ===========  ===========                                                                               Earnings (loss) per                                                           share                                                                         Basic                  $      0.10  $     (0.45) $     (0.27) $     (0.50)   Diluted                $      0.09  $     (0.45) $     (0.27) $     (0.50)                                                                                                                                                                                                                                                                  Vantage Drilling Company                                                   Supplemental Operating Data                                         (Unaudited, in thousands, except percentages)                                                                                                                          Three Months Ended        Twelve Months Ended                                   December 31,              December 31,                                 ------------------------  ------------------------                               2013         2012         2013         2012                              -----------  -----------  -----------  -----------  Operating costs and                                                           expenses                                                                      Jackups                $    21,288  $    22,575  $    89,253  $    87,724    Deepwater                   56,092       24,010      164,775       82,044    Operations support           8,108        5,695       33,267       23,449    Reimbursables               13,861        6,451       48,620       36,872                           -----------  -----------  -----------  -----------                           $    99,349  $    58,731  $   335,915  $   230,089                           -----------  -----------  -----------  -----------                                                                               Utilization                                                                    Jackups                       89.4%        88.3%        87.1%        96.7%   Deepwater                     90.3%        97.2%        93.3%        96.4%                                                                                                                                                                                                                                                                  Vantage Drilling Company                                                    Consolidated Balance Sheet                                          (In thousands, except par value information)                                                                                                                                                     December 31,                                                              2013           2012                                                     -------------  -------------                      ASSETS                                                   Current assets                                                                 Cash and cash equivalents                    $      54,686  $     502,726    Restricted cash                                      2,125          3,515    Trade receivables                                  168,654        119,452    Inventory                                           55,804         37,944    Prepaid expenses and other current assets           23,717         25,208                                                 -------------  -------------      Total current assets                             304,986        688,845                                                 -------------  -------------  Property and equipment                                                         Property and equipment                           3,472,407      2,893,837    Accumulated depreciation                          (281,759)      (176,331)                                                -------------  -------------      Property and equipment, net                    3,190,648      2,717,506                                                 -------------  -------------  Other assets                                                                   Investment in joint venture                         32,482         31,320    Other assets                                       100,027         92,536                                                 -------------  -------------      Total other assets                               132,509        123,856                                                 -------------  -------------  Total assets                                   $   3,628,143  $   3,530,207                                                 =============  =============                                                                                    LIABILITIES AND SHAREHOLDERS' EQUITY                                    Current liabilities                                                            Accounts payable                             $      66,860  $      50,909    Accrued liabilities                                 97,481        123,484    Current maturities of long-term debt and                                      revolving credit agreement                         63,500         31,250                                                 -------------  -------------    Total current liabilities                          227,841        205,643                                                 -------------  -------------  Long-term debt, net of discount of $39,325 and                                $11,940                                           2,852,050      2,710,559  Other long-term liabilities                           42,796         45,520  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, 500,000                                    shares authorized; 304,101 and 299,647                                       shares issued and outstanding                         304            299    Additional paid-in capital                         896,928        878,137    Accumulated deficit                               (391,776)      (309,951)                                                -------------  -------------      Total shareholders' equity                       505,456        568,485                                                 -------------  -------------  Total liabilities and shareholders' equity     $   3,628,143  $   3,530,207                                                 =============  =============                                                                                                                                                                                                                                                                   Vantage Drilling Company                                               Consolidated Statement of Cash Flows                                                    (In thousands)                                                                                                                                                               Year Ended December 31,                                                   ----------------------------                                                      2013           2012                                                     -------------  -------------  CASH FLOWS FROM OPERATING ACTIVITIES                                         Net loss                                       $     (81,825) $    (145,304) Adjustments to reconcile net loss to net cash                                 provided by (used in) operating activities:                                   Depreciation expense                               106,609         68,747    Amortization of debt financing costs                12,356         16,930    Amortization of debt discount (premium)              7,523         (3,828)   Non-cash loss on debt extinguishment                 6,070          9,546    Share-based compensation expense                     7,064          7,073    Deferred income tax expense                            997          3,785    Equity in loss of joint venture                        513             49    Loss on disposal of assets                           1,603          1,321  Changes in operating assets and liabilities:                                   Restricted cash                                      1,390          3,513    Trade receivables                                  (49,202)       (52,207)   Inventory                                          (17,860)       (13,568)   Prepaid expenses and other current assets            1,169         (9,724)   Other assets                                       (12 ,654)           318    Accounts payable                                    15,951          4,546    Accrued liabilities and other long-term                                       liabilities                                       (48,135)       (41,762)                                                -------------  -------------      Net cash used in operating activities            (48,431)      (150,565)                                                -------------  -------------  CASH FLOWS FROM INVESTING ACTIVITIES                                           Additions to property and equipment               (564,319)      (874,117)   Investment in joint venture                              -        (31,000)   Proceeds from sale of property and equipment            22              -                                                 -------------  -------------      Net cash used in investing activities           (564,297)      (905,117)                                                -------------  -------------  CASH FLOWS FROM FINANCING ACTIVITIES                                           Proceeds from issuance of senior secured                                      notes, net                                        775,000      1,987,000    Proceeds from the issuance of term loan, net       344,750        490,000    Proceeds from the issuance of senior                                          convertible notes                                 100,000         50,000    Repayment of long-term debt                     (1,033,874)    (1,006,251)   Proceeds from revolving credit agreement,                                     net                                                10,000              -    Debt issuance costs                                (31,188)       (72,372)                                                -------------  -------------      Net cash provided by financing activities        164,688      1,448,377                                                 -------------  -------------      Net increase (decrease) in cash and cash                                      equivalents                                    (448,040)       392,695    Cash and cash equivalents-beginning of year        502,726        110,031                                                 -------------  -------------    Cash and cash equivalents-end of year        $      54,686  $     502,726                                                 =============  =============      Public & Investor Relations Contact: Paul A. Bragg Chairman & Chief Executive Officer Vantage Drilling Company (281) 404-4700