8-K

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549

FORM 8-K

CURRENT REPORT

Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

Date of Report (Date of earliest event reported): August 11, 2022

Vantage Drilling International

(Exact name of Registrant as Specified in Its Charter)

Cayman Islands	333-159299	98-1372204
(State or Other Jurisdiction of Incorporation)	(Commission File Number)	(IRS Employer Identification No.)
c/o Vantage Energy Services, Inc. 777 Post Oak Boulevard Suite 440
Houston, Texas		77056
(Address of Principal Executive Offices)		(Zip Code)

Registrant’s Telephone Number, Including Area Code: (281) 404-4700

(Not applicable)

(Former Name or Former Address, if Changed Since Last Report)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

☐Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

☐Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

☐Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

☐Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Securities registered pursuant to Section 12(b) of the Act:

Title of each class	Trading Symbol(s)	Name of each exchange on which registered
N/A	N/A	N/A

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§ 230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§ 240.12b-2 of this chapter).

Emerging growth company ☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Item 2.02 Results of Operations and Financial Condition.

On August 11, 2022, Vantage Drilling International (the “Company”) issued a press release announcing operating results and developments for the fiscal quarter ended June 30, 2022. A copy of the press release is furnished as Exhibit 99.1 hereto.

Item 9.01 Financial Statements and Exhibits.

(d) Exhibits.

Exhibit Number	Description of Exhibit
99.1	Press Release of Vantage Drilling International dated August 11, 2022
104	Cover Page Interactive Data File (embedded within the Inline XBRL document)

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

			VANTAGE DRILLING INTERNATIONAL
Date:	August 11, 2022	By:	/s/ Douglas E. Stewart
			Douglas E. Stewart Chief Financial Officer, General Counsel and Corporate Secretary

EX-99.1

Exhibit 99.1

Vantage Drilling International Reports Second Quarter Results for 2022

HOUSTON, August 11, 2022 (GLOBE NEWSWIRE) -- Vantage Drilling International ("Vantage" or the “Company”) reported net income attributable to controlling interest of approximately $48.1 million, or $3.61 per diluted share, for the three months ended June 30, 2022, based on the weighted average shares outstanding, as compared to a net loss attributable to controlling interest of $29.0 million, or $2.21 per diluted share, for the three months ended June 30, 2021.

The net income is a result of the sale of the Emerald Driller Company (“EDC”) and its three jackup rigs, the Emerald Driller, the Aquamarine Driller, and the Sapphire Driller, which closed on May 27, 2022. The Company received $170.0 million as purchase price consideration and $30.0 million in certain contract preparation expense reimbursements, and as a result, a net gain of $60.8 million was recognized during the three months ended June 30, 2022. The gain is subject to potential adjustments contemplated by the relevant share purchase agreement, any such adjustments to be finalized by September 24, 2022.

As of June 30, 2022, Vantage had approximately $246.3 million in cash, including $18.9 million of restricted cash, compared to $90.6 million in cash, including $17.3 million of restricted cash, at December 31, 2021. The Company used $32.0 million in cash from operations during the second quarter of 2022 compared to $25.6 million used during the same period of 2021.

Ihab Toma, CEO, commented: “As previously announced, we are very pleased to have closed the sale of EDC to ADES Arabia and to support their operations in Qatar. The sale meaningfully improved the Company’s liquidity.”

Mr. Toma continued: “With regard to the rigs we own and manage, we continue to see a constructive environment as rig activity levels remain strong. Our focus remains on taking advantage of the recovery that is underway to secure higher dayrates and continuing to provide safe, efficient and reliable operations for our clients.”

Vantage, a Cayman Islands exempted company, is an offshore drilling contractor, with a fleet of two ultra-deepwater drillships, and two 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 globally for major, national and independent oil and gas companies. Vantage also markets, operates and provides management services in respect of, third party-owned drilling units. www.vantagedrilling.com.

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 disclaims any intention or obligation to update publicly or revise such statements, whether as a result of new information, future events or otherwise.

Non-GAAP Measures

We report our financial results in accordance with generally accepted accounting principles (GAAP) in the United States. However, in our earnings release and during our earnings calls we may reference company information that does not conform to GAAP. Generally, a non-GAAP financial measure is a numerical measure of a company's performance, financial position, or cash flows that excludes or includes amounts that are not normally excluded or included in the most directly comparable measure calculated and presented in accordance with GAAP. Management believes that an analysis of this data is meaningful to investors because it provides insight with respect to ongoing operating results of the Company and allows investors to better evaluate the financial results of the Company. However, these measures should not be viewed as an alternative to or substitute for GAAP measures of performance, and these non-GAAP measures may not be consistent with previously published Company reports on Forms 10-K, 10-Q and 8-K. Non-GAAP measures we may reference have been reconciled to the nearest GAAP measure in the tables entitled Reconciliation of GAAP to Non-GAAP Financial Measures below.

Public & Investor Relations Contact:

Douglas E. Stewart

Chief Financial Officer and General Counsel

Vantage Drilling International

C/O Vantage Energy Services, Inc.

777 Post Oak Blvd., Suite 440

Houston, Texas 77056

(281) 404-4700

Vantage Drilling International
Consolidated Statement of Operations
(In thousands, except per share data)
(Unaudited)
	Three Months Ended June 30,						Six Months Ended June 30,
	2022			2021			2022			2021
Revenue
Contract drilling services	$	42,744		$	31,655		$	87,657		$	49,380
Management fees		2,840			497			3,943			595
Reimbursables and other		27,654			3,449			39,969			5,792
Total revenue		73,238			35,601			131,569			55,767
Operating costs and expenses
Operating costs		59,405			36,056			103,338			61,413
General and administrative		6,910			4,967			13,492			10,462
Depreciation		11,087			14,161			22,382			28,286
Gain on EDC Sale		(60,781	)		—			(60,781	)		—
Total operating costs and expenses		16,621			55,184			78,431			100,161
Income (loss) from operations		56,617			(19,583	)		53,138			(44,394	)
Other (expense) income
Interest income		7			10			11			110
Interest expense and other financing charges		(8,503	)		(8,511	)		(17,007	)		(17,021	)
Other, net		(1,011	)		(179	)		(1,786	)		(793	)
Total other expense		(9,507	)		(8,680	)		(18,782	)		(17,704	)
Income (loss) before income taxes		47,110			(28,263	)		34,356			(62,098	)
Income tax (benefit) provision		(1,221	)		720			217			2,882
Net income (loss)		48,331			(28,983	)		34,139			(64,980	)
Net income (loss) attributable to noncontrolling interests		232			(18	)		938			(31	)
Net income (loss) attributable to shareholders	$	48,099		$	(28,965	)	$	33,201		$	(64,949	)
EBITDA (1)	$	66,461		$	(5,583	)	$	72,796		$	(16,870	)
Earnings (loss) per share
Basic	$	3.67		$	(2.21	)	$	2.53		$	(4.95	)
Diluted	$	3.61		$	(2.21	)	$	2.49		$	(4.95	)
Weighted average ordinary shares outstanding,
Basic		13,115			13,115			13,115			13,115
Diluted		13,332			13,115			13,330			13,115
(1) EBITDA represents net income (loss) before (i) interest income (expense), (ii) provision for income taxes and (iii) depreciation and amortization expense. EBITDA is not a financial measure under GAAP as defined under the rules of the SEC, and is intended as a supplemental measure of our performance. We believe this measure is commonly used by analysts and investors to analyze and compare companies on the basis of operating performance.
Vantage Drilling International
Supplemental Operating Data
(Unaudited, in thousands, except percentages)
	Three Months Ended June 30,						Six Months Ended June 30,
	2022			2021			2022			2021
Operating costs and expenses
Jackups	$	10,249		$	22,170		$	18,674		$	36,319
Deepwater		15,934			8,820			30,477			16,064
Managed Rigs		7			756			1			756
Held for Sale (2)		3,891			—			10,712			—
Operations support		2,930			2,317			5,867			4,529
Reimbursables		26,394			1,993			37,607			3,745
Total operating costs and expenses	$	59,405		$	36,056		$	103,338		$	61,413

Utilization
Jackups	98.8	%		39.9	%	79.6	%		35.3	%
Deepwater	99.7	%		49.7	%	99.2	%		49.4	%
Held for Sale (2)	47.0	%	N/A			62.3	%	N/A
(2) Included in the sale of EDC, which owns the Emerald Driller,Sapphire Driller and Aquamarine Driller. Each of these rigs were classified as held for sale on our Consolidated Balance Sheets up to the closing date, which was on May 27, 2022, during the current period and at December 31, 2021.

Vantage Drilling International
Consolidated Balance Sheets
(In thousands, except share and par value information)
(Unaudited)
	June 30, 2022			December 31, 2021
ASSETS
Current assets
Cash and cash equivalents	$	227,328		$	73,343
Restricted cash		3,323			1,621
Trade receivables, net of allowance for doubtful accounts of $5.0 million, each period		79,399			37,527
Materials and supplies		38,906			37,580
Assets held for sale		—			117,117
Prepaid expenses and other current assets		13,191			18,309
Total current assets		362,147			285,497
Property and equipment
Property and equipment		645,304			645,622
Accumulated depreciation		(287,314	)		(266,018	)
Property and equipment, net		357,990			379,604
Operating lease ROU assets		1,610			2,450
Other assets		32,549			31,843
Total assets	$	754,296		$	699,394
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities
Accounts payable	$	42,870		$	31,420
Other current liabilities		53,819			31,533
Liabilities held for sale		—			6,720
Total current liabilities		96,689			69,673
Long–term debt, net of discount and financing costs of $2,322 and $3,142, respectively		347,678			346,858
Other long-term liabilities		9,958			17,012
Commitments and contingencies
Shareholders' equity
Ordinary shares, $0.001 par value, 50 million shares authorized; 13,115,026 shares issued and outstanding, each period		13			13
Additional paid-in capital		633,828			633,847
Accumulated deficit		(336,591	)		(369,792	)
Controlling interest shareholders' equity		297,250			264,068
Noncontrolling interests		2,721			1,783
Total equity		299,971			265,851
Total liabilities and shareholders' equity	$	754,296		$	699,394

Vantage Drilling International
Consolidated Statement of Cash Flows
(In thousands)
(Unaudited)
	Six Months Ended June 30,
	2022			2021
CASH FLOWS FROM OPERATING ACTIVITIES
Net income (loss)	$	34,139		$	(64,980	)
Adjustments to reconcile net income (loss) to net cash used in operating activities
Depreciation expense		22,382			28,286
Amortization of debt financing costs		820			819
Share-based compensation expense		44			337
Deferred income tax expense		410			236
Gain on disposal of assets		(1,630	)		(2,715	)
Gain on EDC Sale		(60,781	)		—
Changes in operating assets and liabilities:
Trade receivables, net		(58,864	)		(6,888	)
Materials and supplies		(1,811	)		(1,481	)
Prepaid expenses and other current assets		2,918			(1,440	)
Other assets		(25,043	)		(1,821	)
Accounts payable		29,564			2,798
Other current liabilities and other long-term liabilities		17,696			5,905
Net cash used in operating activities		(40,156	)		(40,944	)
CASH FLOWS FROM INVESTING ACTIVITIES
Additions to property and equipment		(7,285	)		(2,711	)
Net proceeds from EDC Sale		200,000			—
Net proceeds from sale of assets		3,100			—
Net proceeds from sale of Titanium Explorer		—			13,557
Net cash provided by investing activities		195,815			10,846
CASH FLOWS FROM FINANCING ACTIVITIES
Net cash provided by financing activities		—			—
Net increase (decrease) in unrestricted and restricted cash and cash equivalents		155,659			(30,098	)
Unrestricted and restricted cash and cash equivalents—beginning of period		90,608			154,487
Unrestricted and restricted cash and cash equivalents—end of period	$	246,267		$	124,389

Vantage Drilling International
Non-GAAP Measures
(In thousands)
(Unaudited)
	Three Months Ended June 30,						Six Months Ended June 30,
Reconciliation of EBITDA	2022			2021			2022			2021
Net income (loss) attributable to shareholders	$	48,099		$	(28,965	)	$	33,201		$	(64,949	)
Depreciation		11,087			14,161			22,382			28,286
Interest income		(7	)		(10	)		(11	)		(110	)
Interest expense and other financing costs		8,503			8,511			17,007			17,021
Income tax (benefit) provision		(1,221	)		720			217			2,882
EBITDA	$	66,461		$	(5,583	)	$	72,796		$	(16,870	)

XML

Document And Entity Information	Aug. 11, 2022
Cover [Abstract]
Document Type	8-K
Amendment Flag	false
Document Period End Date	Aug. 11, 2022
Entity Registrant Name	Vantage Drilling International
Entity Central Index Key	0001465872
Entity Emerging Growth Company	false
Entity File Number	333-159299
Entity Incorporation, State or Country Code	E9
Entity Tax Identification Number	98-1372204
Entity Address, Address Line One	c/o Vantage Energy Services, Inc.
Entity Address, Address Line Two	777 Post Oak Boulevard
Entity Address, Address Line Three	Suite 440
Entity Address, City or Town	Houston
Entity Address, State or Province	TX
Entity Address, Postal Zip Code	77056
City Area Code	(281)
Local Phone Number	404-4700
Entity Information, Former Legal or Registered Name	(Not applicable)
Written Communications	false
Soliciting Material	false
Pre-commencement Tender Offer	false
Pre-commencement Issuer Tender Offer	false
Title of 12(b) Security	N/A
No Trading Symbol Flag	true
Security Exchange Name	NONE