Vantage Drilling anticipates rise in rig day rates and fleet utilisation to highest level since 2015

Business & Finance

March 23, 2023, by Melisa Cavcic

Offshore drilling contractor Vantage Drilling has disclosed its operational and financial performance for the fourth quarter and full-year 2022 while revealing its expectations that the future will bring further growth in day rates and utilisation for its fleet of rigs.

Platinum Explorer drillship; Source: Vantage Drilling

Vantage Drilling reported on Thursday, 23 March 2023, a net loss attributable to controlling interest of approximately $16.4 million for the fourth quarter of 2022, compared to a net loss attributable to controlling interest of $23.5 million for 4Q 2021.

Ihab Toma, Vantage Drilling CEO, commented: “I am very proud of our operational and financial performance in 2022. The company’s four owned rigs were contracted for most of the year with the Tungsten Explorer concluding its successful campaign in Cyprus in December before beginning to prepare to work in Namibia.”

The offshore drilling contractor’s net loss attributable to controlling interest was around $3.4 million for the full-year 2022, compared to a net loss attributable to controlling interest of $110.1 million for the year ended 31 December 2021.

“The company’s managed rigs also performed well as the West Capella concluded a strong campaign in Indonesia and prepares to commence a campaign in East Africa in 2Q 2023 before returning to Indonesia in 3Q 2023. Furthermore, the West Polaris finished its reactivation and successfully went on contract in December 2022 for ONGC. I am very pleased that the Emerald Driller Company supported rigs in Qatar continue to perform well and to the satisfaction of their respective clients,” added Toma.

Furthermore, the company had approximately $93.3 million in cash as of 31 December 2022, including $19.2 million of restricted cash, compared to $90.6 million in cash, including $17.3 million of restricted cash, at the same period during the year before.

“As I reflect on the year, 2022 represented an important inflexion point for the company and the industry as a whole, as the company generated positive EBITDA in each of the four quarters. Industry fundamentals are projected to remain strong with day rates and utilisation reaching levels not seen since 2015,” underlined Toma.

The firm used $18.9 million in cash from operations in 2022, compared to $70.4 million used in 2021. On 31 December 2022, Vantage maintained $29 million of cash pre-funded by its managed services customers to address near-term obligations associated with the operation of rigs.

“With strong industry sentiment and the closing of our refinancing earlier this month, the company is well positioned for the future while our focus remains the same. We are committed to ensuring our employees stay safe and providing our clients with excellent service,” concluded Toma.

The global energy crisis, which took the world by storm in 2022, put energy security as the prevailing concern for countries globally. This enabled oil and gas companies to rake in all-time high profits, while the fast-tracking of certain energy projects, primarily oil and gas ones, and a boost in the search for new hydrocarbon resources, brought more business to the offshore drilling market.

Thanks to this, the demand for rigs rose while day rates grew, as illustrated by the results for the fourth quarter and full-year 2022 announced by Vantage Drilling’s rivals: Shelf Drilling, Diamond Offshore, Noble, Transocean, and Valaris.