USA: Vantage Drilling Sees 3Q Profit Slip

Vantage Drilling Company (“Vantage”) reports a net loss of $5.8 million or ($.02 per share), excluding $3.8 million ($.01 per share) of charges associated with the acquisition of the Platinum Explorer (photo) and $24.0 million ($.09 per share) of charges associated with refinancing of debt.

Including the acquisition charges and refinancing charges, the Company reported a net loss of $33.6 million or $(0.12) per diluted share for the three months ended September 30, 2010. This compares to net income of $6.8 million or $0.05 per diluted share during the same period in 2009.

For the nine months ended September 30, 2010, Vantage reports a net loss of $34.6 million or $(0.14) per share as compared to net income of $13.1 million or $0.13 per share for the nine months ended September 30, 2009.

On July 30, 2010, Vantage acquired the 55% interest in Mandarin Drilling Corporation (“Mandarin”), a Marshall Islands corporation, from F3 Capital an exempted company incorporated under the laws of the Cayman Islands for $139.8 million. The sole asset of Mandarin is the construction contract for the ultra-deepwater drillship Platinum Explorer. F3 Capital is wholly owned by Hsin-Chi Su one of the Company’s directors and a significant shareholder of the Company. The purchase price was funded by a $60.0 million contingent convertible note and $79.8 million of cash of which $64.2 million was paid directly to the shipyard.

In connection with the acquisition of Mandarin, Vantage issued $1.0 billion of 11.5% Senior Secured First Lien Notes due 2015 (the, “Notes”). The Notes have a maturity of five years from the date of issuance and were issued at a price equal to 96.361% of their face value. The notes are fully and unconditionally guaranteed on a senior secured basis by Vantage and certain of its existing and future subsidiaries. In addition to using the proceeds to fund the Mandarin acquisition, Vantage also retired certain of its outstanding credit facilities and its 13.5% Senior Secured Notes.

Vantage, a Cayman Islands exempted company, is an offshore drilling contractor, with four Baker Marine Pacific Class 375 ultra-premium jackup drilling rigs operating, and an ultra deepwater drillship, the Platinum Explorer. Vantage is also providing management services for two other ultra-deepwater drillships and two ultra-deepwater semi-submersibles.

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Source: Vantage Drilling, November  9, 2010;