Vantage Drilling Company has reported net income for the three months ended September 30, 2014 of $751,000 or $0.00 per diluted share, excluding gains for the early retirement of debt and an upward revision to the tax provision, as compared to earnings of $6.8 million or $0.02 per diluted share for the three months ended September 30, 2013.
Including approximately $1.1 million gain on the early retirement of debt and a $7.4 million revision to the tax provision for the three months ended September 30, 2014, the company reported a net loss of $5.6 million or ($0.02) per diluted share.
“The $1.1 million gain on the early retirement of debt represents discount to the face value of debt that we purchased in the open market, net of writing off related deferred financing costs,” the company says. The total debt paydown for the quarter, including scheduled maturities and open market purchases of the company’s Senior Notes, totaled $52.9 million.
Vantage Drilling further explains that, “During the third quarter, we revised our estimated annual effective tax rate based on changes to the timing of drilling programs and planned rig moves”. The duration of the drilling activities has been extended in certain higher tax countries. These revisions resulted in the recognition of an additional $7.4 million tax provision for the third quarter.
Paul Bragg, Chairman and Chief Executive Officer, commented, “The highlight of the quarter was our debt paydown of nearly $53 million. We remain on track to reach our 2014 debt reduction goal, given our high level of contracted backlog.”
Vantage, a Cayman Islands exempted company, is an offshore drilling contractor, with an owned fleet of three ultra-deepwater drillships, the Platinum Explorer, the Titanium Explorer and the Tungsten Explorer, as well as an additional ultra-deepwater drillship, the Cobalt Explorer, now under construction, and four Baker Marine Pacific Class 375 ultra-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.