Vantage Drilling sees red in second quarter

Offshore drilling contractor Vantage Drilling on Thursday posted a loss for the second quarter of 2016 after emerging from a Chapter 11 bankruptcy in February. 

The drilling contractor, with a fleet of three ultra-deepwater drillships and four jack-up drilling rigs, reported a net loss of approximately $35.7 million for the three months ended June 30, 2016, as compared to the Predecessor reporting net income of approximately $27.9 million for the three months ended June 30, 2015.

The company’s revenues for the three months ended June 30, 2016 were $48.5 million, as compared to the Predecessor’s revenues of $214.4 million in the prior-year quarter.

Upon emergence from Chapter 11 bankruptcy on February 10, 2016, Vantage adopted fresh-start accounting, which resulted in the company becoming a new entity for financial reporting purposes.

References to “Successor” relate to the financial position and results of operations of the reorganized Vantage as of and subsequent to February 10, 2016. References to “Predecessor” refer to the financial position of Vantage as of and prior to February 10, 2016, and the results of operations prior to February 10, 2016.

For the period from February 10, 2016 to June 30, 2016, Vantage reported a net loss of approximately $64.8 million and the Predecessor for the period January 1, 2016, to February 10, 2016, reported a net loss of approximately $471 million. For the six months ended June 30, 2015, the Predecessor reported net income of approximately $50.6 million.

Douglas Smith, Chief Financial Officer, commented: “During the quarter, we incurred expenses associated with preparing the rigs for warm stacking and cost associated with the headcount reductions. We believe the cash on hand provides us adequate liquidity to ultimately put our rigs back to work.”