Vantage Drilling International Investor Presentation February 2016 - - PowerPoint PPT Presentation

Vantage Drilling International

Investor Presentation February 2016

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:

• ur limited operating history;
• availability of investment opportunities;
• general volatility of the market price of our securities;
• changes in our business strategy;
• ur 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.

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Strategic Overview

Experienced People High Specification Assets Long-term Customer Relationships Financial Structure

Vantage was founded with a vision of bringing the best people together with the highest specification, modern fleet in the offshore drilling industry.

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People

• Industry leading safety record -

lost time incident rate in 2015, 2014 and 2013 was .08, .35 and .32, respectively.

• Exceptional Technical Team – our

technical and operating experience has resulted in Vantage being selected to manage 3rd party shipyard projects and

• perations.

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Our senior management team averages

• ver 30 years of industry experience.

The cornerstone of our corporate culture are safety and professionalism.

Premium Fleet - Proven Track Record

Emerald Driller

Delivered On‐Time, On‐ Budget ‐ December 2008 5

Sapphire Driller

Delivered On‐Time, On‐ Budget ‐ July 2009

Aquamarine Driller

Delivered On‐Time, On‐ Budget – September 2009

Topaz Driller

Delivered On‐Time, On‐ Budget – December 2009

Platinum Explorer

Delivered On‐Time, On‐ Budget – November 2010

Titanium Explorer

2nd Successful newbuild at DSME Delivered April 2012

Tungsten Explorer

3rd Successful newbuild at DSME Delivered On‐Budget – July 2013

Fleet Status

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2015 2016 2017 2018 Rig Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Jackups Emerald Driller Sapphire Driller Aquamarine Driller Topaz Driller Drillships Platinum Explorer Titanium Explorer Tungsten Explorer

Contracted Option Letter of Award; Commisioning / Stacked Contract subject to conditions Mobilization

Customer Focus

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We have focused our marketing efforts on customers with long-term drilling requirements with the opportunity for long-term contracts.

Financial

• Pro-active Capital Restructuring Plan

– Eliminates $1.5 billion of debt with little near-term maturity – Dramatically reduces debt service (≈90%)

• Pro-active cost management and workforce

rationalization.

• Amended and extended Tungsten Explorer

contract with Total adding an additional two years of backlog.

• New eighteen month contract for Aquamarine

Driller with CPOC.

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Debt Summary

9 Principal Outstanding Credit Agreement: $32.0 million Letter of Credit Facility

• $
• $

bears interest @ 5.5% 2019 1st Lien Term Loan Facility 143.0 $ Interest 10.0 $ matures December 31, 2019, Amortization 1.4 $ bears interest @ Libor + 6.5% 11.4 $ 10% Senior Secured Second Lien Notes 76.1 $ Interest 7.6 $ matures December 31, 2020, bears interest @ 10.0% 1%/12% Step-Up Senior Secured Third Lien 750.0 $

• $

Convertible Notes matures December 31, 2030, bears interest @ 1% for 4 years and then 12% to maturity; all interest is payable in-kind Total 969.1 $ 19.1 $ Debt Service (in millions)

Third Lien Convertible Notes do not require any cash debt service prior to maturity. These notes are convertible at the option of the holders for 3

• years. Thereafter, they are

convertible at the option of the Board of Directors.

Oil & Gas Market Conditions

• Record production anticipated to

continue to exceed record demand.

• 2015: Record production achieved

despite E&P spending cuts of approximately 20%+.

• 2016: Average E&P spending forecast

indicates another reduction of 15%

– E&P spending forecast based on higher than current oil prices indicating further downside risk.

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Source: International Energy Agency, “Oil Market Report”

Rig Market Conditions

• E&P spending forecasts indicate further

decline in rig demand across all classes

• f assets.
• Approximately 88 jackups and 31

floaters scheduled for delivery from shipyard in 2016. Many deliveries are being deferred.

• Marketed utilization at multi-year lows
• f approximately 74% for jackups and

77% for floaters.

• Dayrates across all asset classes

approaching breakeven.

• Marketed supply will be impacted by

retirements and cold stacking, and actual number of shipyard deliveries.

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Age Rigs %

25 years or older 113 37% 10 to 24 years 41 13% 0 to 9 years 155 50% 309 100%

Age of Floater Fleet

How many rigs will be scrapped or have drilled their last well?

Age Rigs %

25 years or older 296 55% 10 to 24 years 41 8% 0 to 9 years 205 38% 542 100%

Age of Jackup Fleet

Source: ODS Petrodata

Industry Response

• Significant cost cutting and downsizing workforce.
• Deferring capital expenditures; deferring shipyard deliveries.
• Cold stacking/retiring older less efficient rigs.
• Amend and extend current contracts to preserve contract backlog at lower

dayrates.

• Preserving liquidity by selling assets and amending credit facilities.
• Consolidation – primarily in oilfield service companies. Expectation for a

consolidation in drillers as cycle continues.

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