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| EX-99.2 - EX-99.2 - Vantage Drilling CO | d560278dex992.htm |
| 8-K - FORM 8-K - Vantage Drilling CO | d560278d8k.htm |
 Vantage Drilling Company
GHS 100 Energy Conference
Chicago, Illinois
June 26, 2013
Exhibit 99.1 |
 Some of the statements in this presentation constitute
forward-looking statements. Forward-looking statements relate to
expectations,
beliefs,
projections,
future
plans
and
strategies,
anticipated
events
or
trends
and
similar
expressions
concerning
matters that are not historical facts. The forward looking
statements contained in this presentation involve risks and
uncertainties as well as statements as to:
•
our limited operating history;
•
availability of investment opportunities;
•
general volatility of the market price of our securities;
•
changes in our business strategy;
•
our ability to consummate an appropriate investment opportunity within
given time constraints; •
availability of qualified personnel;
•
changes in our industry, interest rates, the debt securities markets
or the general economy; •
changes in governmental, tax and environmental regulations and similar
matters; •
changes in generally accepted accounting principles by
standard-setting bodies; and •
the degree and nature of our competition.
The forward-looking statements are based on our beliefs,
assumptions and expectations of our future performance, taking
into account all information currently available to us. These
beliefs, assumptions and expectations can change as a result of
many possible events or factors, not all of which are known to us or
are within our control. If a change occurs, our business,
financial condition, liquidity and results of operations may vary
materially from those expressed in our forward-looking
statements.
Forward-Looking Statements
2 |
 Symbol:
VTG (NYSE AMEX)
Location:
HQ
–
Houston;
Operations
–
Singapore;
Marketing
–
Dubai
Market Cap:
$550 million ($1.82 per share)
Book Value:
$568 million ($1.93 per share)
Enterprise Value:
$2.7 billion
Employees:
> 1,000
Contract Backlog:
approximately $3.0 billion
Owned Fleet:
4 Ultra-Premium Jackups (operating in SE Asia & West
Africa) 2 Ultra-Deepwater Drillships (operating offshore
India & GOM) 1 Ultra-Deepwater
Drillship
(commissioning
–
Q2
2013
delivery)
1 approximately
42%
owned
Ultra-Deepwater
Drillship
(under
construction
–
Q4
2015)
Managed Fleet:
1 Ultra-Deepwater Drillship (under construction)
1 Ultra-Premium Jackup (mobilized and preparing for
commencement) 3 Ultra-Premium
Jackups
(construction
–
deliveries
2013
through
2015)
Corporate Overview
3
Source: Pareto Securities |
 Awarded
90-day
contract
for
Tungsten
Explorer
commencing
upon
delivery
from
shipyard
and
short mobilization; approximately $68.2 million of backlog including
mobilization fees. Additionally,
we
received
a
Letter
of
Award
for
Tungsten
Explorer
for
3
wells
in
Southeast
Asia
at
market rates filling the available time before commencing operations in
West Africa. The Letter of Award
is
subject
to
customary
conditions
and
negotiations,
final
contract
and
regulatory
approvals.
Sapphire Driller
has received a Letter of Award for a two-year contract in West
Africa plus options. The Letter of Award is subject to
customary conditions and negotiations, final contract and
regulatory approvals.
Awarded
2-year
contract
in
West
Africa
(Moho
Nord
development)
for
Tungsten
Explorer
commencing in the 2
nd
quarter 2014, plus four 6-month options; approximately $468
million of backlog over the initial 2-year term.
Ordered
Palladium
Explorer
(42%
VTG-owned)
–
Ultra-deepwater
drillship;
November
2015
delivery
Vantage was appointed as manager for 6 newbuild high-specification
jackups for operations in Mexico.
Refinanced Balance Sheet
with –
Lowered
borrowing
costs
about
460
BPS
saving
$90
million/year
in
interest
Much longer and staggered maturities
$850
million
of
“prepayable”
debt
Recent Developments
4 |
 Vantage Strategic Focus
5
To provide the long-term
value to our shareholders,
we must first invest in the
right
people
and
the
right
assets
to pursue the
business opportunities. The
right customers
have the
long-term business
opportunities that provide
the sound cash flow
necessary to achieve the
right financial structure
for
our shareholders.
Right
People
Right
Assets
Right
Customers
Right
Financial
Structure
Shareholder
Value |
 •
Industry
leading
safety
record
–
in
2012,
we
completed
over
2.2
million man-hours with 0 lost time incidents,
•
Jack-up
fleet
has
achieved
approximately
99%
productive
time
over the first 48 months of operations. Each jack-up
construction project was completed on-time and on
budget. •
Enhanced
business
opportunities
as
Vantage
has
been
selected
to
manage 3
rd
party shipyard projects and operations.
•
We
are
leveraging
our
technical
expertise
to
manage
6
ultra-high
specification jack-ups for service in Mexico without making a
financial investment.
•
We are investing in leading-edge training programs –
•
CARE –
Competency Assurance with Results and Effectiveness
•
GOLD –
Global Operations Leadership Development Program
Right People
6
Our senior management team averages over 29 years of
Industry experience. The cornerstones of our corporate culture
are safety and professionalism. |
 Right
Assets 7
Premium high-specification drilling units, including four
jackup rigs and three drillships. Total costs of owned fleet of
approximately $3.2 billion.
High-specification drillships combined with deep in-house
technical team, has allowed us to compete for
ultra-deepwater projects;
the
Platinum
Explorer
and
Titanium
Explorer
have
worked in 9,300+ and 8,800+ feet of water, respectively.
Recently
ordered
Palladium
Explorer,
a
7
th
generation,
dual-
activity UDW drillship equipped with (2) seven-ram BOP’s and
12,000 feet of riser
We have built a fleet of new, premium assets that our customers
demand now and for the future. |
 Owned Assets
•
Delivered On-Time, On-
Budget -
December 2008
•
Hired by Financial Institution to
provide shipyard oversight
following bid process
•
3
newbuild project at DSME
•
Leverages shipyard experience
•
Favorable costs and delivery
schedule
•
Delivery Q2 2013
Tungsten Explorer
Premium Fleet with a Proven Track Record
8
•
2
Successful newbuild at
DSME
•
Delivery April 2012
•
On Contract in GoM
Management Projects
Dalian Developer
Newbuild Ultra-Premium Marine Pacific Class 375 Jackups
Emerald Driller
Sapphire Driller
Aquamarine Driller
Topaz Driller
Platinum Explorer
Ultra-Deepwater 12,000 ft Drillships
•
Delivered On-Time, On-
Budget -
November 2010
•
Delivered On-Time, On-
Budget -
July 2009
•
Delivered On-Time, On-
Budget -
December 2009
•
Delivered On-Time, On-
Budget -
September 2009
Titanium Explorer
Ultra-Deepwater Drillship
Palladium Explorer
•
Newbuild project at STX
Offshore
•
7
generation dual-BOP,
dual-derrick
•
Delivery Q4 2015
Mexican Operator
6 Ultra-Premium Jackups
•
Hired by newly formed
drilling company to
manage fleet
nd
rd
th |
 Strong
Demand for Assets 9
Source: ODS-Petrodata, DnB NOR
Age
Rigs
%
%
300+
200-299
<200
25 years or older
316
66%
56%
153
113
50
5 to 24 years
89
19%
16%
82
2
5
0 to 4 years
76
16%
13%
66
7
3
481
100%
301
122
58
2013 Deliveries
54
9%
53
1
0
2014 Deliveries
26
5%
23
3
0
2015 Deliveries
8
1%
5
2
1
569
100%
382
128
59
Age of Jackup Fleet
Water Depth (feet)
Capabilities
and
age
–
The
current
worldwide
fleet
is
comprised mostly of older, inefficient rigs
–
15% of today’s jackups are mat-supported and/or have less than
200ft of water depth capability
–
66% of today’s jackups are 25 years or older
–
As of January 2013 a total of 65 rigs were either stacked, cold
stacked, or in an accommodation mode without drilling
contract –
How many will not return to service?
Jackup Market –
Significant Replacement Cycle
Deepwater and Ultra-deepwater
Markets –
Growth Cycle
Demand is Likely to Exceed Rig Supply |
 Right
Customers 10
All
of
our
jack-ups
are
currently
working
for
repeat
customers.
We
currently
have
over
$3.0
billion
of
backlog.
We have continuously improved our customer
satisfaction ratings, based on direct surveys.
We have focused our marketing efforts on customers with long-term drilling
requirements with the opportunity for long-term contracts.
|
 (1)
Average
drilling
revenue
per
day
is
based
on
the
total
estimated
revenue
divided
by
the
minimum
number
of
days
committed
in
a
contract.
Unless
otherwise
noted,
the
total
revenue
includes
any
mobilization
and demobilization fees and other contractual revenues associated with the drilling
services. (2)
The drilling revenue per day includes the achievement of the 12.5% bonus
opportunity, but excludes mobilization revenues and revenue escalations included in the contract.
Customers Provide Strong Backlog
11
Ownership
2012
2013
2014
Rig
%
Q1
Q2
Q3
Q4
Q1
Q2
Q3
Q4
Q1
Q2
Q3
Q4
Jackups
Emerald Driller
100%
$130,000
$156,000 (2 years)
Sapphire Driller
100%
$120,000 (net of taxes)
$165,000 (net)
2 years - pending
Aquamarine Driller
100%
$132,000
$153,000
Topaz Driller
100%
$187,000 (incl. upgrades and mobilization)
$155,000
$155,000
$155,000 (18 mos. - Indonesia)
Drillships
Platinum Explorer
100%
$590,000 (5 years)
Titanium Explorer
100%
$572,000 (8 years)
(2)
Tungsten Explorer
100%
$750,000 (90 days)
3 wells - pending
$641,000 (2 years firm)
Contracted
Option
Letter of Award;
Commisioning /
Construction
Contract
subject to conditions
Mobilization
Customer backlog of approximately $3.0 Billion provides visibility to cash
flows |
 We have refinanced our senior debt –
Staggered maturities through 2023,
Added flexibility to pre-pay debt without premiums,
Reduced
annual
cash
interest
costs
by
approximately
$90
million,
and
Financed the remaining payments for the Tungsten Explorer.
We have expanded our fleet with limited equity exposure –
Palladium
Explorer
investment
(42%)
limits
pre-delivery
equity
exposure to
$31 million.
Management contracts with Mexico-based rig owner to provide
construction oversight and rig operations management for
6 new high specification jack- ups expands fleet with
no initial equity investment. Right Financial Structure
12
•
Our financial leverage is counter-balanced by a strong contract backlog
and long-term visibility of cash flows.
•
•
•
•
•
•
• |
 Strong Growing Cash Flow to Service Debt
13
With the deployment of the
Tungsten Explorer
later
this year, Vantage will have a full run rate for its fleet
in 2014 and target 2014 metrics –
Return on Capital Employed:
Net Debt to EBITDA:
EBITDA per Share:
EPS per Share:
Long-term contracts provide visibility to cash flow to support existing
leverage. Investments made to-date generating favorable returns
for the future. 11% to 13%
4.8X to 5.0X
$1.65 to $1.80
$.35 to $.40,
or greater |
 Strategic Focus
Debt Refinancing –
DONE
Titanium
Explorer
back
to
full
day
rate
–
DONE
Tungsten
Explorer
contract
commencing
with shipyard delivery (“gap period”) –
DONE
Sapphire
Driller
Contract
–long-term
follow
on job –
DONE
•
Deployment & startup of Tungsten Explorer –
resulting in EBITDA run-rate > $500 million;
dramatically increasing profitability
•
Deployment
of
Palladium
Explorer
–
Nov.
2015 (42% VTG)
•
Add UDW asset (partial to full ownership)?
•
Accelerating
reduction
of
debt
/
improved
debt
statistics and rating
•
Begin to return capital to shareholders
14
Next Steps
Near Term |