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| 8-K - FORM 8-K - Vantage Drilling CO | d8k.htm |
 Oslo, Norway
Pareto Oil & Offshore Conference
September 1-2, 2010
Exhibit 99.1 |
 Forward-Looking Statements
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. |
 Recent
Developments •
Acquired the 55% of Mandarin Drilling Company not previously owned,
bringing total ownership of Platinum Explorer drillship to 100%
•
Raised $1.0 Billion 11.5% Senior Secured Notes to fund the purchase of
Platinum Explorer and refinance existing debt; no debt matures prior to
2014
•
Signed Construction Management Agreement and Marketing Agreement
for Dalian Developer |
 Corporate Overview
Symbol:
VTG (NYSE AMEX)
Location:
HQ –
Houston; Operations –
Singapore; Marketing -
Dubai
Market Cap:
$390 million
Book Value:
$773 million
Enterprise Value:
$1.5 billion
Employees:
> 700
Contract Backlog:
$3.8 billion
Owned Fleet:
4 Ultra-Premium Jackups
1 Ultra-Deepwater Drillship
Managed Fleet:
2 Ultra-Deepwater Semisubmersibles
2 Ultra-Deepwater Drillships |
 •
Premium
high-specification
drilling
units,
including
four
jackup
rigs, three drillships
and two
semisubmersibles
•
Vantage’s modern rigs are capable of drilling to deeper depths and possess
enhanced operational efficiency and technical capabilities, resulting in
higher utilization, dayrates and margins
•
Total
costs
of
owned
fleet
of
four
jackups
and
the
Platinum
Explorer
drillship of approximately
$1.7 billion
•
Successful
track
record
of
managing,
constructing,
marketing
and
operating
offshore
drilling
units
•
In-house team of engineers and construction personnel overseeing complex
construction projects •
All jackups
delivered on budget and on time
•
Jackup
fleet has experienced approx. 99% of productive time for Vantage’s first 18
months in operation Level of efficiency is exceptional for
newly-constructed jackup rigs upon commencement of operations
•
Significant cash flow visibility
•
Owned fleet contract backlog of approximately $1.3 billion and managed fleet
contract backlog of approximately $2.5 billion as of March 31, 2010
Owned fleet counterparties include Pearl Energy, VAALCO Energy, Foxtrot
International, ENI, Nido Petroleum, Phu
Quy
(1)
and ONGC
Managed deepwater rigs counterparties include PEMEX and Petrobras
Company
Highlights
(1)
PVEP
Phu
Quy
Petroleum
Operating
Co.
Ltd.
is
a
joint
venture
interest
between
PetroVietnam
Exploration
Production
Corp.
and
Total
E&P
Vietnam.
Premium Fleet
Proven Operational
Track
Record
Significant
Contract Coverage
with
High Quality
Counterparties |
 Company Highlights (Cont’d)
Four
construction
management
arrangements
for
two
ultra-deepwater
drillships,
DragonQuest
and
Dalian
Developer,
as
well
as
two
6th
generation
semisubmersibles
Approximately $5.0 million of annual cash flow per contract during the
construction phase Management of drillship and semisubmersible operations
once in service Approximately $12.0 to $15.0 million per year per contract
for the duration of each contract Management team with extensive experience;
average of 28 years in the drilling industry Includes international and
domestic public company experience with industry-leading peers involving
numerous acquisitions and debt and equity financings
Experienced operating personnel already hired and crew member training ongoing for
Platinum
Explorer
Construction
Supervision and
Management
Arrangements
Experienced
Management and
Operational Team |
 Fleet Overview
Owned Assets
Emerald Driller
Sapphire Driller
Aquamarine Driller
Topaz Driller
Platinum Explorer
•
Significant asset value of owned fleet
Managed Assets
SeaDragon
I
SeaDragon
II
Dalian Developer
DragonQuest |
 Premium Newbuild
Fleet
•
Owned Fleet:
Four newbuild
ultra-premium high-specification Baker Marine Pacific Class 375 jackups
Platinum Explorer –
ultra-deepwater 12,000 ft. drillship (equipped for 10,000 ft.)
•
The drillship is currently being constructed by Daewoo Shipbuilding & Marine Engineering Co. Ltd.
(“DSME”) •
Managed Fleet:
One ultra-deepwater 12,000 ft. drillship (under construction at DSME Shipyard)
One multiservice drillship (under construction at Dalian Shipyard)
Two
Moss
Maritime
CS50
MkII
6th
generation
10,000
ft.
semisubmersibles
(under
construction
at
Jurong
Shipyard)
Fleet Construction Cost ~ $4.5 Billion
Drillships
–
One Owned, Two Managed
Semisubmersibles –
Two Managed
Jackups
–
Four Owned |
 Worldwide Operations
Vantage Offices
Owned Rigs
Managed Rigs
Contract: PEMEX
Semi I
Mexico GOM
Contract: Petrobras
DragonQuest
U.S. GOM
Contract: ONGC
Platinum Explorer
India
Houston
Singapore
Dubai
Contract: Pearl
Emerald Driller
Thailand
Contract: Foxtrot
Sapphire Driller
Ivory Coast
Contract: VAALCO
Sapphire Driller
Gabon
Contract: Nido
Aquamarine Driller
Philippines
Contract: Phu Quy
(1)
Topaz Driller
Vietnam
Country of Operation
(1)
PVEP Phu Quy Petroleum Operating Co. Ltd. is a joint venture interest between
PetroVietnam Exploration Production Corp. and Total E&P Vietnam. |
 Advantages of
Ultra-Premium Jackups The Baker Marine Pacific Class jackup
is capable of drilling in up to 375 feet of water and has a maximum
drilling depth of 30,000 feet
Dimensions
236’
x 224’
x 28’
208’
x 178’
x 23’
Water Depth (Max/Min)
375’
300’
Drilling Depth -
Ft
30,000
25,000
Cantilever Reach
75’
45’
Leg Length
506’
418’
Spudcan
Diameter
55.5’
48’
Variable Deck Load (Operating)
7,497 kips
4,000 kips
Accommodations (Persons)
120
66
•
Faster drilling times
•
Faster moving times
•
Increased volumes of consumable liquids
and drilling fluids
•
Reduced boat runs and non-productive
time
•
Improved pipe handling and offline
capability
•
Fast preloading time for all tanks
•
75’
x 30’
cantilever reach substantially
greater than the industry average
•
Pipe decks allow increased storage capacity
•
Premium drilling package:
•
3 x 2200HP mud pumps
•
Integrated diverter system
•
18 ¾
BOP handling system and 4 rams
•
High-capacity,
high
efficiency
–
5 x CAT
3516 B Diesel engines
Baker Marine Pacific Class 375
Standard 300’
Comparison of Vantage Ultra-Premium Jackup
to Standard Jackup
Increased Operational Efficiency and Improved Technical Capability |
 Platinum Explorer
Construction Status
Platinum
Explorer
as
of
July
2010
Overall Construction Progress (July 2010)
Source: DSME. |
 Platinum Explorer
Path
Forward
Milestone Dates
•
September 2 –
Naming Ceremony
•
September 28 to October 23 –
Sea Trials
•
November 10 –
Rig Delivery
•
November 20-25 –
Arrive Singapore and load riser
•
December 15 –
Arrive East coast of India
•
December 31 –
On Contract with ONGC |
 Semisubmersibles
•
Two 6th generation semisubmersibles
•
Moss Maritime CS50 MkII
Drilling depth of 40,000 feet
Operate in up to 10,000 feet of water
•
Construction
ongoing
at
Jurong
Shipyard
Pte
Ltd,
Singapore
Semi I: Delivery Q4 2010 (PEMEX
/ five years) Semi
II: Delivery Q3 2011 (Currently marketing)
•
Construction
Management
Contracts:
Approximately
$5.0
million
of
annual
cash
flow per contract during the construction phase
•
Operating Management Contracts:
Approximately
$12.0
–
$15.0
million
of
annual
cash
flow
per
rig
Structured as a combination of a fixed daily fee and a variable fee based on
dayrate
and annual cash flow |
 Fleet Status
– Average Drilling Revenue /
Day
(1)
5 years at $590,500
5 years at $503,000
Ownership
2010
2011
2012
Rig
%
Q1
Q2
Q3
Q4
Q1
Q2
Q3
Q4
Q1
Q2
Q3
Q4
Jackups
Emerald Driller
100%
2 yrs. at $171K
Sapphire Driller
100%
10 mos. at $115.5K
8 mos. at $120K
Aquamarine Driller
100%
5 mos. at $154.2K
2 yrs. at $120K
(2)
Repriced
to Leading Market Rate
Topaz Driller
100%
10 mos. at $107.2K
Drillships
Platinum Explorer
100%
5 yrs. at $590.5K
DragonQuest
Managed
8 yrs. at $551.3K
(3)
Dalian Developer
Managed
Semisubmersibles
Semi I
Managed
5 yrs. at $503K
Semi II
Managed
Construction
Commissioning/
Working
Operating
Option
Extended
Management
Mobilization
(Owned Rigs)
(Management
Contract
Well Test
Contract
Contract)
Option
(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 contract is for drilling two wells plus extended well tests.
Estimated drilling time is one month per well and extended well tests could range from a few months to up to one year per well.
The first extended well tests period has been contracted through April
2011. (3)
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. |
 Vessel Name
Owned/
Managed
Contract Party
Contract Party
Credit Rating
(S&P/Moody’s)
Contract Length
Average Drilling
Revenue Per
Day
(1)
Contract Value
(Gross)
Operating
Management Fee
Emerald Driller
Owned
AA / Aa3
2 Years
$171,000
$126.5 million
N/A
Sapphire Driller
Owned
N/A
A-
/ BBB+
(2)
1) 5 months
2) 8 months
1) $115,500
2) $120,000
1) $17.2 million
2) $28.4 million
N/A
Aquamarine Driller
Owned
N/A
2 years
(3)
$120,000
$86.4 million
(3)
N/A
Topaz Driller
Owned
Phu
Quy
(4)
N/A
7 months
$107,200
$22.5 million
N/A
Platinum Explorer
Owned
N/A / A2
5 years
$590,500
$1.1 billion
N/A
DragonQuest
Managed
BBB-
/ A3
8 years
$551,300
$1.6 billion
$14.0-15.0
million annually
Semi I
Managed
BBB / Baa1
5 years
$503,000
$0.9 billion
$13.0-15.0
million annually
Semi II
Managed
N/A
Dalian Developer
Managed
N/A
Contract Overview and Customer Credit
Profile
(1)
Average drilling revenue per day is based on the total estimated revenue divided by the minimum number
of days committed in a contract. Unless otherwise noted, the total revenue includes any mobilization
and demobilization fees and other contractual revenues associated with the drilling services.
(2)
Foxtrot International is owned by Bouygues Group, which has an A- rating from S&P and BBB+
rating per Fitch. (3)
The contract is for drilling two wells plus extended well tests. Estimated drilling time is one month
per well and extended well tests could range from a few months to up to one year per well. The first extended
well tests period has been contracted through April 2011.
(4)
PVEP Phu Quy Petroleum Operating Co. Ltd. is a joint venture interest between PetroVietnam Exploration
Production Corp. and Total E&P Vietnam. |
 Premium Asset
Advantage •
Premium jackups
(350’
+ IC rigs)
and ultra-deepwater floater
have historically maintained
significantly higher utilization
levels, particularly during
downturns in the energy industry
–
Operators demand newer, higher
specification rigs due to superior
operating performance, resulting in
lower maintenance downtimes,
improved safety and higher efficiency
•
A higher utilization level in the
international drilling market
continues to reflect a more
stable rig supply and demand
environment than the Gulf of
Mexico
•
Operators are willing to pay a
substantial
dayrate
premium
for
high-specification rigs
Global Jackup
Utilization
International vs. GOM Jackup
Utilization
Source: Riglogix; ODS-PetroData.
Historical Floater Dayrates
($Thousands)
Historical Floater Utilization |
 Profile of Global Jackup
Fleet
•
Capabilities
and
age
–
The
current
worldwide
fleet
is
comprised
mostly
of
older,
inefficient
rigs
–
27% of today’s jackups
are mat-supported and/or have less than 200ft of water depth capability
–
71% of today’s jackups
are 25 years or older
–
As of July 2010 a total of 127 rigs were either ready stacked, cold stacked, or in
an accommodation mode without contract –
How many will not return to service?
•
Setting
up
cyclical
recovery
–
Reduction
in
the
overall
fleet
should
result
in
pricing
power
and
high
utilization levels early on during the recovery
•
Age
is
a
factor
–
Demand
is
increasing
for
high-specification
jackups.
Many
customers
are
implementing age restrictions and new high-specification characteristics
Source: Riglogix.
Global Jackup
Fleet Distribution
300'+ IC
117
300' IC
124
<250' IC
52
250' IC
65
300'+ IS
8
MC
44
<300' IS
17
MS
21
Heavy Weather
19
Age of Jackup Fleet
Water Depth (feet)
Age
Rigs
%
%
300+
200-299
<200
25 years or older
333
71%
64%
146
132
55
5 to 24 years
54
12%
10%
49
2
3
0 to 4 years
80
17%
15%
74
4
2
467
100%
269
138
60
2010 Deliveries
20
4%
14
4
2
2011 Deliveries
16
3%
16
0
0
2012 Deliveries
17
3%
16
1
0
520
100%
315
143
62 |
 Profile of Global
Ultra-Deepwater Fleet •
The ultra-deepwater rig market maintains the most favorable long-term outlook driven by
recent discoveries in Brazil, West Africa, and the U.S. Gulf of Mexico
•
Ultra-deepwater rigs are capable of working in any water depth where operators are currently
likely to drill •
Can compete for any available work, while lower water depth drilling rigs have a more limited
market •
Projections
indicate
a
shortage
of
rigs
designed
for
the
4,000
–
6,000’
water
depth
range
which
will
likely
be filled by ultra-deepwater units
Floater Rig Supply By Type (# of Rigs)
Ultra-Deepwater Floaters By Operator
(1)
Source: Riglogix.
(1)
Ultra-Deepwater (>7,500 ft) drillships
and semisubmersibles currently in operation.
(2)
Other operators with 1 rig each include: Det
Norske Oljeselskap, Murphy, Taylor, Woodside, PEMEX, Tullow, ExxonMobil, Husky, Repsol, Cairn Energy
and ONGC for a total of 11 rigs.
(3)
Other operators with 2 rigs each include: BHP Billiton, Noble Energy, Marathon, Nexen, ENI and Devon
Energy for a total of 12 rigs. |
 Financial Overview
Pro Forma Capitalization
($Millions)
Actual
As Adjusted
Unrestricted Cash
18.4
$
118.2
$
Restricted Cash
27.2
545.3
Accounts receivable
59.2
59.2
Inventory
14.4
14.4
Other current assets
3.9
3.9
123.1
741.0
Property and equipment, net
888.7
1,159.8
Investment in affiliate
129.1
(0.0)
Other assets
27.6
44.0
1,168.5
$
1,944.8
$
Accounts payable & accrued
45.1
$
45.1
$
Short-term debt
2.6
2.6
Current maturities long-term debt
16.0
-
63.7
47.7
Long-term debt
364.2
1,127.8
Deferred income taxes
0.1
0.1
Shareholders Equity:
Paid in capital
779.4
833.7
Retained earnings
(38.2)
(63.8)
Other comprehensive loss
(0.7)
(0.7)
Total equity
740.5
769.2
1,168.5
$
1,944.8
$
Outstanding shares
236.8
289.1
Book value per share
3.13
$
2.66
$
As of June 30, 2010 |
 Financial Overview
Historical Financial Information
($ Millions) |
 Financial Overview
Run-Rate Financial Potential of Vantage Owned Assets
($Millions, except dayrates)
Illustrative Range of Run-Rate Financial Potential
•
Rig-Level EBITDA excludes
income from management
fees and unallocated
corporate SG&A (estimated
at $17-$20 million per year)
(1)
Calculations of rig-level EBITDA incorporate management's assumption of 90% utilization/efficiency
of jackups, which reflects industry standard productive times on high-specification
jackups. Utilization/efficiency of drillship assumed to be 97%, which management believes is a
reasonable assumption for a newbuild vessel in its first full year of operations. Rig-level EBITDA attributable to jackups
reflects operating expense assumption based on Vantage’s jackups that operated for the full first
quarter of 2010. |
 Significant
Upside Valuation Potential EBITDA
Today’s
Peer Avg.
5.5x
6.5x
Historical
Peer Avg.
11.6x
$275 million
$1.43
$2.40
$7.26
$300 million
$1.91
$2.95
$8.26
$350 million
$3.11
$4.08
$10.28
Implied Values –
EV/EBITDA
Source: Credit Suisse
Price to Book Value
Commencement of Platinum Explorer
expected to be a catalyst event to unlock value. |
 Appendix
Reconciliation of Net Income (Loss) to Adjusted EBITDA
($Millions)
3/31/2009
6/30/2009
9/30/2009
12/31/2009
3/31/2010
6/30/2010
Net Income (Loss)
2.4
$
4.0
$
6.8
$
(4.3)
$
6.0
$
(7.0)
$
Interest Expense, Net
0.7
1.3
1.9
4.2
8.0
13.3
Income Tax Provision (Benefit)
0.6
0.9
1.1
(0.6)
2.3
8.4
Depreciation
1.7
2.1
3.2
4.3
7.5
8.4
EBITDA
5.4
$
8.3
$
13.0
$
3.6
$
23.8
$
23.1
$
Share-Based Compensation Expense
1.1
1.2
1.2
1.4
1.5
1.5
Adjusted EBITDA
6.5
$
9.5
$
14.2
$
5.0
$
25.3
$
24.6
$
Fiscal Quarter Ended, |