Vantage Drilling Company · OTC:VTGDF
Vantage Drilling — Merger or Acquisition (July 2010)
37 slides from Vantage Drilling's merger presentation, Jul 7, 2010
Slide 1: Investor Update: Mandarin Acquisition
Exhibit 99.1 Investor Update: Mandarin Acquisition July 2010
Slide 2: Disclaimers
Disclaimers About this Presentation This presentation does not constitute an offer to sell or the solicitation of an offer to buy any securities. The information in this presentation is current only as of the date on its cover. For any time after the cover date of this presentation, the information,
Slide 3: Disclaimers (Cont'd)
Disclaimers (Cont’d) Forward-Looking Statements This presentation contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”). All statements, other than state
Slide 4: Transaction Overview
Transaction Overview VANTAG DRILLIt
Slide 5: Transaction Overview
Transaction Overview Vantage Drilling Company (Ticker: VTG) ("Vantage" or the "Company") is an international offshore drilling company operating a fleet of high-specification drilling units Contracts drilling units, related equipment and work crews primarily on a dayrate basis Additionally provides
Slide 6: Preliminary Sources & Uses of Funds and Pro Forma Capitalization
Transaction Overview Preliminary Sources & Uses of Funds and Pro Forma Capitalization ($Millions) Sources of Funds Uses of Funds Debt Financing: Term Loan $ 300 Platinum Shipyard, Equipment and Oversight $ 650 Debt Financing: Notes 500 Retire Outstanding Debt 152 (1) Convertible Note and/or Cash to
Slide 7: Owned Assets
Transaction Overview Owned Assets ($Millions) Platinum Explorer Emerald Driller Sapphire Driller Aquamarine Driller Topaz Driller Ownership: 100%(1) 100% 100% 100% 100% Estimate of Fair Market Value (2) $725 –$775 $170 –$190 $170 –$190 $170 –$190 $170 –$190 Capital Spares(3): $60 $1,125 – $1,215 FMV
Slide 8: Run-Rate Financial Potential of Vantage Owned Assets
Transaction Overview Run-Rate Financial Potential of Vantage Owned Assets ($Millions, except per day figures) Illustrative Calculation (1) Illustrative Range of Run-Rate Financial Potential (10) Single Jackup: Spot Dayrate (2) $ 140,000 Utilization / Efficiency (3) 90.0% Annual Revenue $ 46.0 Operat
Slide 9: Company Highlights
Company Highlights ? Premium high-specification drilling units, including four jackup rigs, two drillships and two semisubmersibles Premium Premium Fleet Fleet and and Strong Strong Collateral Collateral ? Vantage’s rigs are capable of drilling to deeper depths and possess enhanced operational effic
Slide 10: Company Highlights (Cont'd)
Company Highlights (Cont’d) Three construction management arrangements for one ultra-deepwater drillship (DragonQuest) and Construction two 6th generation semisubmersibles Supervision and Approximately $5.0 million of annual cash flow per contract during the construction phase Management Arrangement
Slide 11: Company Overview
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Slide 12: Company Overview
Company Overview Founded in September 2006 and completed its IPO in May 2007 Trades under ticker VTG with a current total enterprise value of approximately $694 million Current trading value reflects significant discount to asset value Contracts offshore drilling units, related equipment and work cr
Slide 13: Premium Newbuild Fleet
Premium Newbuild Fleet Owned Fleet: Four newbuildultra-premium high-specification Baker Marine Pacific Class 375 jackups Platinum Explorer – ultra-deepwater12,000 ft. drillship (equipped for first contract at 10,000 ft.) • The drillship is currently being constructed by Daewoo Shipbuilding & Marine
Slide 14: Worldwide Operations
Worldwide Operations Contract: Phu Quy(1) Topaz Driller Houston Vietnam Contract: Petrobras Contract: Nido DragonQuest Aquamarine Driller U.S. GOM Dubai Philippines Contract: PEMEX Semi I Contract: ONGC Mexico GOM Contract: Foxtrot Platinum Explorer Sapphire Driller India Singapore Ivory Coast Contr
Slide 15: Ultra-Premium Newbuild Jackups
Ultra-Premium Newbuild Jackups 4 ultra-premium newbuildjackups 100% owned by the Company Total investment for each jackupof approximately $230 million Baker Marine Pacific Class 375 design Drilling depth of 30,000 feet Operate in up to 375 feet of water All jackups constructed at industry-leading PP
Slide 16: Advantages of Ultra-Premium Jackups
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 Comparison of Vantage Ultra-Premium Jackup to Standard Jackup Increased Operational Efficiency and Improved Technical Capability
Slide 17: Ultra-Premium Jackup Fleet
Ultra-Premium Jackup Fleet Emerald Driller Sapphire Driller Aquamarine Driller Topaz Driller Shipyard Delivery December 2008 July 2009 September 2009 December 2009 Contract Details Counterparty Pearl Energy VAALCO Energy; Foxtrot Nido Petroleum Limited Phu Quy(2) International Commencement Q1 2009 Q
Slide 18: Ultra-Deepwater Drillships
Ultra-Deepwater Drillships • Ultra-deepwater drillships Platinum Explorer (100% pro forma ownership): delivery Nov-10 DragonQuest (managed): delivery Q3 2011 • DSME proprietary hull design Drilling depth of 40,000 feet Designed to operate in up to 12,000 feet of water Equipped to operate in up to 10
Slide 19: Platinum Explorer
Platinum Explorer Shipyard: DSME, Okpo, KojeIsland, Korea Total shipyard construction price: $630 million Estimated additional $110 million of non-shipyard capital expenditures to equip and commission the drillship for service (includes approximately $60 million of major capital spare components) Va
Slide 20: Platinum Explorer Construction Status
Platinum Explorer Construction Status Overall Construction Progress (May 2010) Platinum Explorer as of May 2010 Source: DSME. 19
Slide 21: Semisubmersibles
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 marke
Slide 22: Fleet Status – Average Drilling Revenue / Day
Fleet Status – Average Drilling Revenue / Day(1) Ownership 2010 2011 2012 Rig % Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Jackups 2 years at $171,000 Emerald Driller 100% 2 yrs. at $171K 6 months at $132,500 (2) Sapphire Driller 100% 5 mos. at $115.5K 8 mos. at $120K Aquamarine Driller 100% 5 mos. at $154
Slide 23: Contract Overview and Customer Credit Profile
Contract Overview and Customer Credit Profile Contract Party Average Drilling Construction Operating Owned/ Credit Rating Contract Revenue Per Contract Value Management Management Vessel Name Managed Contract Party (S&P/Moody’s) Length Day(1) (Gross) Fee Fee Emerald Owned AA / Aa3 2 Years $171,000 $
Slide 24: Oil and Natural Gas Corporation
Oil and Natural Gas Corporation Founded in 1956 and based in Dehradun, India, ONGC engages in the exploration, production, refining, marketing, and transportation of oil and natural gas in India and internationally Contributes over 80% of India’s oil and gas production Market capitalization: $60 bil
Slide 25: Business Strategy
Business Strategy • Customer demand for new high-specification units supported by: Capitalize on Customer Need for rigs well-suited for drilling through deep and complex formations and drilling horizontally Demand for High-Specification Units Enhanced efficiency providing faster drilling and moving
Slide 26: Industry Overview
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Slide 27: Worldwide Oil Demand
Worldwide Oil Demand • Despite the recent global economic slowdown, the rapid development of some of the world’s most populous countries Demand is forecasted to grow by 1.1% per year (2010 will continue to drive long-term increase in global energy to 2030) demand – The EIA estimates long-term global
Slide 28: Premium Asset Advantage
Premium Asset Advantage International vs. GOM Jackup Utilization Global Jackup Utilization • 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 newe
Slide 29: Premium Asset Advantage
Premium Asset Advantage After peaking at 35% of total supply in July 2009, the availability over the next 90 days for 350+ ft. IC jackups located internationally has declined to approximately 25% currently International Jack-Up Availability International Jack-Up (Next 90 Days) As % of Total Supply A
Slide 30: Profile of Global Jackup Fleet
Profile of Global Jackup Fleet • Capabilities and age – The current worldwide fleet is comprised mostly of older, inefficient rigs – 27% of today’s jackupsare mat-supported and/or have less than 200ft of water depth capability – 71% of today’s jackupsare 25 years or older – As of July 2010 a total o
Slide 31: Profile of Global Ultra-Deepwater Fleet
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 like
Slide 32: Premium Jackup Fixtures
Premium Jackup Fixtures Rig Water Contract Description Vessel Age Delivery Fixture Date Manager Rig Name Depth (ft) Operator Region Dayrate Prior Dayrate Duration (At Delivery) Start Date (Yrs) Date 17-Jun-10 Atwood Atwood Beacon 400 Murphy S America $ 115,000 $ 115,000 10 months 4 wells Sep-10 7.1
Slide 33: Financial Overview
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Slide 34: Historical Financial Information
Financial Overview Historical Financial Information ($Millions) Fiscal Quarter Ended, 3/31/2009 6/30/2009 9/30/2009 12/31/2009 3/31/2010 Owned Rigs at Period End 1 1 2 3 4 Revenue $ 14.3 $ 22.2 $ 36.4 $ 38.6 $ 58.3 % Quarterly Growth NA 55.2% 64.2% 5.8% 51.1% EBITDA $ 5.3 $ 8.3 $ 13.0 $ 3.4 $ 23.1 %
Slide 35: Preliminary Pro Forma Capitalization
Financial Overview Preliminary Pro Forma Capitalization ($Millions) As of Pro Forma 3/31/10 3/31/10 Cash $ 30 $ 30 Restricted / Escrowed Cash 38 706 Issuer Debt: Existing Credit Facilities $ 152 $ - Debt Financing: Term Loan - 300 Debt Financing: Notes - 500 Total Issuer Debt $ 152 $ 800 P2021 Notes
Slide 36: Run-Rate Financial Potential of Vantage Owned Assets
Financial Overview Run-Rate Financial Potential of Vantage Owned Assets ($Millions, except per day figures) Illustrative Calculation (1) Illustrative Range of Run-Rate Financial Potential (10) Single Jackup: Spot Dayrate (2) $ 140,000 Utilization / Efficiency (3) 90.0% Annual Revenue $ 46.0 Operatin
Slide 37: Reconciliation of Net Income (Loss) to Adjusted EBITDA
Appendix Reconciliation of Net Income (Loss) to Adjusted EBITDA ($Millions) Fiscal Quarter Ended, 3/31/2009 6/30/2009 9/30/2009 12/31/2009 3/31/2010 Net Income (Loss) $ 2.4 $ 4.0 $ 6.8 $ (4.3) $ 6.0 Interest Expense, Net 0.7 1.3 1.9 4.0 7.4 Income Tax Provision (Benefit) 0.6 0.9 1.1 (0.6) 2.3 Deprec