Vantage Drilling International Ltd · OSL:VDI
Vantage Drilling International — Debt Investor Presentation (February 2023)
38 slides from Vantage Drilling International's debt investor presentation, February 2023
Slide 1: Vantage Drilling International February 2023
Vantage Drilling International February 2023
Slide 2: Disclaimer
Disclaimer This presentation is being provided solely for use by the recipient in making its own evaluation of Vantage Drilling International (the “Company”) and its business, assets and financial condition, and may not be disclosed, distributed, copied, reproduced or used for any purpose other than
Slide 3: Disclaimer (cont'd)
Disclaimer (cont’d) Many of these factors are beyond our ability to control or predict. Any, or a combination of these factors, could materially affect our future financial condition or results of operations and the ultimate accuracy of the forward-looking statements. These forward-looking statement
Slide 4: Management presenters
Management presenters Today’s Presenters Ihab Toma – Chief Executive Officer • Chief Executive Officer since 2016 • Prior to joining Vantage, Toma held various operational and management positions with Transocean and Schlumberger Douglas Stewart – Chief Financial Officer • CFO, General Counsel and C
Slide 5: Agenda
Agenda 1 Transaction Overview 2 Company Overview 3 Market Outlook 4 Financial Overview 5 Appendix 5
Slide 6: Transaction Overview
Transaction Overview VANTAGE
Slide 7: Transaction Overview
Transaction Overview • Vantage Drilling International (“Vantage” or the “Company”) is an international offshore drilling company focused on operating a fleet of modern, high-specification drilling units • The Company’s owned fleet currently consists of two ultra-deepwater drillships and two premium
Slide 8: Sources & Uses and Pro Forma Capitalization
Sources & Uses and Pro Forma Capitalization Sources & Uses Pro Forma Capitalization As of Transaction Pro Forma Sources ($ in millions) 12/31/2022E Adjusted 12/31/2022E Cash and cash equivalents $65 $17 $82 New 1L Senior Secured Notes $200 Letter of credit facility – – – Total sources $200 9.250% 1L
Slide 9: Indicative Term Sheet
Indicative Term Sheet Issuer: • Vantage Drilling International (the “Issuer”) Issue: • $200 million 1st Lien Senior Secured Notes (the “Notes”) Format: • 4(a)(2) private placement • Consistent with the existing 9.250% 1st Lien Senior Secured Notes due 2023 (the “2023 Notes”) − subject to usual and S
Slide 10: Contemplated Execution Timeline
Contemplated Execution Timeline January 2023 February 2023 S M T W T F S S M T W T F S 1 2 3 4 5 6 7 1 2 3 4 8 9 10 11 12 13 14 5 6 7 8 9 10 11 15 16 17 18 19 20 21 12 13 14 15 16 17 18 Business holiday 22 23 24 25 26 27 28 19 20 21 22 23 24 25 29 30 31 26 27 28 Week of: Activity • Open dataroom for
Slide 11: Key Credit Highlights
Key Credit Highlights Strong balance • Healthy balance sheet with ~$82mm pro forma cash balance sheet with ample • Net leverage of ~1.6x based on projected 2023E EBITDA of ~$74mm(1) liquidity • Pushes out nearest debt maturity to 2028 • New debt remains overcollateralized when looking at loan-to-val
Slide 12: Pro Forma Collateral Coverage Analysis
Pro Forma Collateral Coverage Analysis ~24% LTV ~40% LTV Drill ship s $32 9m m Ente rpris e valu e Jack Net $30 Net -ups 2m debt debt $16 m $11 $11 2m 9m 9m m m m Implied market value(1) Implied value of listed peers(2) Vantage has low loan-to-value compared to offshore peers 12 (1) (2) Market capit
Slide 13: Company Overview
Company Company Overview Overview
Slide 14: Vantage Drilling at a Glance
Vantage Drilling at a Glance Fleet Jack-Ups Topaz Driller (2009) Soehanah (2007) Aquamarine Driller (2009) Sapphire Driller (2009) Emerald Driller (2008) EDC Supported Fleet (1) Floaters Tungsten Explorer (2013) Platinum Explorer (2010) Aquarius (2009) Capella (2008) Polaris (2008) Aquadrill Managed
Slide 15: Modern Fleet: Drillships and Jackups
Modern Fleet: Drillships and Jackups Platinum Explorer Tungsten Explorer Topaz Driller Soehanah Type: Drillship Drillship Jackup Jackup Generation and Premium - Baker Marine Premium - Baker Marine UDW (6th gen) UDW (6th gen) Design: Pacific Class Pacific Class Built: 2010 2013 2009 2007 Yard: DSME D
Slide 16: Experienced Management Team
Experienced Management Team Ihab Toma Douglas Stewart Bill Thomson Guy Dawson-Smith Chief Executive Officer Chief Financial Officer, General Chief Commercial and Chief Vice President Operations Counsel and Corporate Secretary Technical Officer Joined Vantage in 2016 Joined Vantage in 2016 Joined Van
Slide 17: Presence in Key Offshore Regions
Presence in Key Offshore Regions Platinum Explorer India Tungsten Explorer Houston Aquarius(1) Capella(2) Las Palmas, Spain Dubai Indonesia (HQ) Topaz Driller Fleet and offices Mediterranean Singapore 6 Managed/Supported Rigs Soehanah Sapphire Driller Indonesia 2 Owned Jackups Qatar 2 Owned Drillshi
Slide 18: Clear Strategy: Companywide Focus Areas - WIGs
Clear Strategy: Companywide Focus Areas - WIGs A self-funding platform achieving margin accretive fleet utilization and fully satisfied clients by following our Wildly Important Goals (WIGs): 0 Maintain world class safety and operational performance Cost Efficiency and Cash Focus through lean operat
Slide 19: WIG1: Safety & Operations Differentiation
WIG1: Safety & Operations Differentiation Focus on safety is visible in the incident rate trends Vantage Safety Performance Chart 5-year, 12-month rolling average (Jan 2018 – Dec 2022) 0.7 0.6 0.5 0.4 0.3 0.25 0.2 0.1 0.10 0.0 TRIR - Total Recordable Incident Rate LTIR - Lost time Incident Rate 19 N
Slide 20: WIG2: Achieve and Maintain Full Fleet Utilization
WIG2: Achieve and Maintain Full Fleet Utilization High utilization across the fleet (1) (2) (3) (4) (1) The Topaz Driller is operating under a Bareboat Charter (‘BBC’) with ADES Egypt for Petrobel. This provides Vantage with a fixed BBC fee of $20,000/day and a percentage of the drilling contract gr
Slide 21: WIG2: Achieve and Maintain Full Fleet Utilization
WIG2: Achieve and Maintain Full Fleet Utilization Renewed focus on improving dayrates Mob/Demob/M Owned Rigs Clients Contract Dayrate(3) Start Date End Date PD Fee Jackups (Vantage) Topaz Driller(1) ADES S.A.E / Petrobel Firm $20,000 2-Oct-2022 2-Apr-2023 $2,500,000 Eni Firm $125,000 $12,400,000 Soe
Slide 22: WIG2: Customer Focus - Repeat Business
WIG2: Customer Focus - Repeat Business National Oil Companies, Majors, Independents Operational excellence and Customer Focus resulting in repeat business 22
Slide 23: WIG3: Cost Efficiency and Cash Focus
WIG3: Cost Efficiency and Cash Focus G&A, Global Support and Bases Costs(1) Efficient Cost Structure Shore-base Costs in $mm • Created highly effective centralized support Excludes MIP expense, non-recurring legal fees, severance expense structure out of Dubai HQ $93.8 • Regionalized a significant n
Slide 24: WIG3: Management Business Economics
WIG3: Management Business Economics Below revenues flow straight to the bottom-line on a per rig per year basis Fixed Variable Marketing Management Fee Fee Fee $2k/day - $10k/day (1) 13% of EBITDA 1.5% of contract drilling revenue ~$10mm 2023E net ~$11mm 2023E net ~$2mm 2023E net free cash flow free
Slide 25: Well-positioned Operationally and Financially
Well-positioned Operationally and Financially Continue Operational Focus • Drive for zero incidents and downtime • Re-contract rigs and improve dayrates • Maintain Efficient Operating Structure • Maintain solid platform well positioned for the long-haul Built for the Long Haul • Focus on EBITDA and
Slide 26: Market Outlook
Market Market Outlook Outlook
Slide 27: Upcycle has Begun and Supply / Demand Dynamics Strongly Suggest Strengthening Will Continue
Upcycle has Begun and Supply / Demand Dynamics Strongly Suggest Strengthening Will Continue Floater # Units 110 100 90 80 70 60 50 40 30 20 10 0 Existing contracts Options Requirements Possibles Active Supply Supply Jackup(1) # Units 250 225 200 175 150 125 100 75 50 25 0 Existing contracts Options
Slide 28: Offshore E&P Spending to Increase Substantially
Offshore E&P Spending to Increase Substantially E&P offshore spending E&P offshore production $400 55 $350 $334 50 $300 $278 45 $250 $220 40 +47% Mmboe/d $203 USDbn $200 $178 $177 $166 $166 $167 35 $150 $140 $138 30 $100 25 $50 $0 20 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2014 2016 2
Slide 29: Strengthening Brings Elevated Utilization, Allowing Run in Dayrates to Continue
Strengthening Brings Elevated Utilization, Allowing Run in Dayrates to Continue Modern jackup(1) supply bridge v. demand Modern jackup(1) dayrate and utilization 350 (11) 100 % $250 300 95 % 90 % $200 250 85 % Utilization USDk/day 80 % $150 200 No. rigs 75 % Latest fixture 322 311 291 70 % $100 150
Slide 30: Orderbooks at Historic Lows
Orderbooks at Historic Lows Jackup orderbook and orderbook as % of fleet Scrapped jackups and average scrapping age 160 35 % 40 50 Orderbook as % of fleet 140 30 % 45 35 120 25 % 40 100 30 # Units 20 % 35 80 Avg. rig age 15 % 25 30 60 # rigs 10 % 20 25 40 20 5% 15 20 0 -0.7 % 15 10 0.6 % 10 5 5 0 0
Slide 31: Financial Overview
— Financial Overview VANTAGE
Slide 32: Q4 2022 Highlights
Q4 2022 Highlights • Tungsten Explorer: Extended by Eni Cyprus until late Q4 Operational highlights • Polaris: The drillship was reactivated under budget, mobilized and started its 270 day contract with ONGC in India in late Q4. Vantage now operates two drillships in India • Received Letter of Award
Slide 33: Projected FY 2023E EBITDA Build
Projected FY 2023E EBITDA Build ($ in millions) $3 $100 $9 $3 ($26) $8 $85 $77 $74 $23 $25 $14 $3 $12 Topaz Soehanah Platinum Tungsten Managed & Contracted Tungsten Contracted Topaz Soehanah Managed & Rig-level Corporate Implied Total Supported EBITDA EBITDA Supported EBITDA Costs Corporate (incl. E
Slide 34: Attractive Cash Flow and Leverage Profile in Increased Dayrate Environment
Attractive Cash Flow and Leverage Profile in Increased Dayrate Environment The analysis below is for illustrative purposes only and is based on current 2023 bid levels and estimated market contract rates ($ in millions, unless specified) Illustrative dayrate environments Illustrative cash flow poten
Slide 35: Appendix
Aas aS = se) A. ay < ISAS Ge: C4. AN va Sm EWE VANTAGE
Slide 36: Implied Per-Rig Pricing of Listed Peers
Implied Per-Rig Pricing of Listed Peers Implied value for 6th gen floaters of $141mm per Implied value for premium jackups of $99mm per rig, age-adjusted value for Vantage at $164mm rig, age-adjusted value for Vantage at $81mm $250 $250 $200 $200 $164 $150 $150 $141 USDmm USDmm $212 $100 $100 $99 $8
Slide 37: Appendix - Q4 2022 EBITDA Reconciliation
Appendix - Q4 2022 EBITDA Reconciliation Vantage Drilling International Non-GAAP Measures (In millions) (Unaudited) Thre e months e nde d Reconciliation of EBITDA De ce mbe r 31, 2022 Net loss attributable to shareholders (16.4) Depreciation 11.0 Interest income (1.1) Interest expense and other fina
Slide 38: A Perfect Day, Every Day
KL sr HERR A Perfect Day, Every Day VANTAGE
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