Document and Entity Information
Document and Entity Information - shares | 3 Months Ended | |
Mar. 31, 2021 | Apr. 26, 2021 | |
Cover [Abstract] | ||
Document Type | 10-Q | |
Amendment Flag | false | |
Document Period End Date | Mar. 31, 2021 | |
Document Fiscal Year Focus | 2021 | |
Document Fiscal Period Focus | Q1 | |
Entity Registrant Name | VANTAGE DRILLING INTERNATIONAL | |
Entity Central Index Key | 0001465872 | |
Entity Current Reporting Status | Yes | |
Current Fiscal Year End Date | --12-31 | |
Entity Filer Category | Non-accelerated Filer | |
Entity Shell Company | false | |
Entity Small Business | false | |
Entity Emerging Growth Company | false | |
Entity Common Stock, Shares Outstanding | 13,115,026 | |
Entity File Number | 333-212081 | |
Entity Tax Identification Number | 98-1372204 | |
Entity Address, Address Line One | 777 Post Oak Boulevard | |
Entity Address, Address Line Two | Suite 800 | |
Entity Address, City or Town | Houston | |
Entity Address, State or Province | TX | |
Entity Address, Postal Zip Code | 77056 | |
City Area Code | 281 | |
Local Phone Number | 404-4700 | |
Entity Interactive Data Current | Yes | |
Entity Incorporation, State or Country Code | E9 | |
Document Quarterly Report | true | |
Document Transition Report | false |
Consolidated Balance Sheet (Una
Consolidated Balance Sheet (Unaudited) - USD ($) $ in Thousands | Mar. 31, 2021 | Dec. 31, 2020 |
Current assets | ||
Cash and cash equivalents | $ 140,381 | $ 141,945 |
Restricted cash | 7,798 | 7,996 |
Trade receivables, net of allowance for doubtful accounts of $5.0 million, respectively | 25,147 | 24,717 |
Materials and supplies | 49,456 | 49,861 |
Prepaid expenses and other current assets | 20,538 | 29,151 |
Total current assets | 243,320 | 253,670 |
Property and equipment | ||
Property and equipment | 795,349 | 794,944 |
Accumulated depreciation | (292,684) | (278,562) |
Property and equipment, net | 502,665 | 516,382 |
Operating lease ROU assets | 3,583 | 3,997 |
Other assets | 14,230 | 12,126 |
Total assets | 763,798 | 786,175 |
Current liabilities | ||
Accounts payable | 24,588 | 25,466 |
Other current liabilities | 39,994 | 24,734 |
Total current liabilities | 64,582 | 50,200 |
Long–term debt, net of discount and financing costs of $5,191 and $6,421, respectively | 345,629 | 345,219 |
Other long-term liabilities | 14,293 | 15,011 |
Shareholders' equity | ||
Ordinary shares, $0.001 par value, 50 million shares authorized; 13,115,026 shares issued and outstanding, respectively | 13 | 13 |
Additional paid-in capital | 633,727 | 634,181 |
Accumulated deficit | (295,639) | (259,655) |
Controlling interest shareholders' equity | 338,101 | 374,539 |
Noncontrolling interests | 1,193 | 1,206 |
Total equity | 339,294 | 375,745 |
Total liabilities and shareholders' equity | $ 763,798 | $ 786,175 |
Consolidated Balance Sheet (Par
Consolidated Balance Sheet (Parenthetical) (Unaudited) - USD ($) $ in Thousands | Mar. 31, 2021 | Dec. 31, 2020 |
Statement Of Financial Position [Abstract] | ||
Long-term debt, discount and financing costs | $ 4,371 | $ 4,781 |
Allowance for doubtful accounts | $ 5,000 | $ 5,000 |
Ordinary shares, par value | $ 0.001 | $ 0.001 |
Ordinary shares, shares authorized | 50,000,000 | 50,000,000 |
Ordinary shares, shares issued | 13,115,026 | 13,115,026 |
Ordinary shares, shares outstanding | 13,115,026 | 13,115,026 |
Consolidated Statement of Opera
Consolidated Statement of Operations (Unaudited) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2021 | Mar. 31, 2020 | |
Revenue | ||
Total revenue | $ 20,166 | $ 51,456 |
Operating costs and expenses | ||
Operating costs | 25,357 | 48,555 |
General and administrative | 5,495 | 7,170 |
Depreciation | 14,125 | 18,016 |
Total operating costs and expenses | 44,977 | 73,741 |
Loss from operations | (24,811) | (22,285) |
Other (expense) income | ||
Interest income | 100 | 701 |
Interest expense and other financing charges | (8,510) | (8,420) |
Other, net | (614) | 2,355 |
Total other expense | (9,024) | (5,364) |
Loss before income taxes | (33,835) | (27,649) |
Income tax provision | 2,162 | 2,921 |
Net loss | (35,997) | (30,570) |
Net (loss) income attributable to noncontrolling interests | (13) | 2 |
Net loss income attributable to shareholders | $ (35,984) | $ (30,572) |
Loss per share | ||
Basic and Diluted | $ (2.74) | $ (2.33) |
Contract Drilling Services | ||
Revenue | ||
Total revenue | $ 17,725 | $ 44,319 |
Reimbursables and Other | ||
Revenue | ||
Total revenue | $ 2,441 | $ 7,137 |
Consolidated Statement of Share
Consolidated Statement of Shareholders' Equity (Unaudited) - USD ($) $ in Thousands | Total | Ordinary Shares | Additional Paid-in Capital | Accumulated Earnings (Deficit) | Non-Controlling Interests |
Beginning Balance at Dec. 31, 2019 | $ 653,091 | $ 13 | $ 634,770 | $ 17,064 | $ 1,244 |
Beginning Balance (in shares) at Dec. 31, 2019 | 13,115,000 | ||||
Share-based compensation | 698 | 698 | |||
Share-based compensation - dividend equivalents | (2,204) | (2,204) | |||
Net (loss) income | (30,570) | (30,572) | 2 | ||
Ending Balance at Mar. 31, 2020 | 621,015 | $ 13 | 633,264 | (13,508) | 1,246 |
Ending Balance (in shares) at Mar. 31, 2020 | 13,115,000 | ||||
Beginning Balance at Dec. 31, 2020 | $ 375,745 | $ 13 | 634,181 | (259,655) | 1,206 |
Beginning Balance (in shares) at Dec. 31, 2020 | 13,115,026 | 13,115,000 | |||
Share-based compensation | $ 306 | 306 | |||
Share-based compensation - dividend equivalents | (760) | (760) | |||
Net (loss) income | (35,997) | (35,984) | (13) | ||
Ending Balance at Mar. 31, 2021 | $ 339,294 | $ 13 | $ 633,727 | $ (295,639) | $ 1,193 |
Ending Balance (in shares) at Mar. 31, 2021 | 13,115,026 | 13,115,000 |
Consolidated Statement of Cash
Consolidated Statement of Cash Flows (Unaudited) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | |
Mar. 31, 2021 | Mar. 31, 2020 | Dec. 31, 2020 | |
CASH FLOWS FROM OPERATING ACTIVITIES | |||
Net loss | $ (35,997) | $ (30,570) | |
Adjustments to reconcile net loss to net cash used in operating activities | |||
Depreciation expense | 14,125 | 18,016 | |
Amortization of debt financing costs | 410 | 410 | |
Share-based compensation expense | 306 | 698 | |
Deferred income tax (benefit) expense | (150) | 102 | |
Gain on disposal of assets | (2,733) | 0 | |
Gain on settlement of restructuring agreement | 0 | (2,278) | |
Changes in operating assets and liabilities: | |||
Trade receivables, net | (430) | (20,373) | |
Materials and Supplies | 9 | 514 | |
Prepaid expenses and other current assets | (1,766) | 586 | |
Other assets | (2,069) | 1,877 | |
Accounts payable | (878) | (6,288) | |
Other current liabilities and other long-term liabilities | 13,822 | 6,032 | |
Net cash used in operating activities | (15,351) | (31,274) | |
CASH FLOWS FROM INVESTING ACTIVITIES | |||
Additions to property and equipment | (456) | (1,196) | |
Net proceeds from sale of Titanium Explorer | 13,557 | 0 | |
Net cash provided by (used in) investing activities | 13,101 | (1,196) | |
CASH FLOWS FROM FINANCING ACTIVITIES | |||
Contributions from holders of noncontrolling interests | 0 | 0 | |
Debt issuance costs | 0 | 0 | |
Net cash provided by financing activities | 0 | 0 | |
Net decrease in unrestricted and restricted cash and cash equivalents | (2,250) | (32,470) | |
Unrestricted and restricted cash and cash equivalents—beginning of period | 154,487 | 242,945 | $ 242,945 |
Unrestricted and restricted cash and cash equivalents—end of period | 152,237 | 210,475 | $ 154,487 |
Cash paid for: | |||
Interest | 9 | 3 | |
Income taxes (net of refunds) | 785 | 1,465 | |
Non-cash investing and financing transactions: | |||
Reallocation of Soehanah jack up rig acquisition value from equipment to materials and supplies | $ 0 | $ 1,019 |
Organization and Recent Events
Organization and Recent Events | 3 Months Ended |
Mar. 31, 2021 | |
Organization Consolidation And Presentation Of Financial Statements [Abstract] | |
Organization and Recent Events | 1. Organization and Recent Events Vantage Drilling International, a Cayman Islands exempted company, together with its consolidated subsidiaries (collectively the “Company”), is an international offshore drilling company focused on operating a fleet of modern, high specification drilling units. Our principal business is to contract drilling units, related equipment and work crews, primarily on a dayrate basis to drill oil and gas wells for our customers. Through our fleet of drilling units, we are a provider of offshore contract drilling services to major, national and independent oil and gas companies, focused on international markets. Additionally, for drilling units owned by others, we provide operations and marketing services for operating and stacked rigs, construction supervision services for rigs that are under construction, and preservation management services for rigs that are stacked. Ongoing Impact of COVID-19 and Declines in the Demand for Oil and Gas The COVID-19 pandemic continues to spread worldwide and has exacerbated since the World Health Organization first classified the COVID-19 outbreak as a pandemic in March 2020. The global spread of COVID-19 has caused widespread illness and significant loss of life, leading governments across the world to impose severely stringent limitations on movement and human interaction, with certain countries being forced to implement multiple shelter-in-place and stay-at-home orders. While conditions have improved in certain portions of the world, other jurisdictions, including India, are experiencing record incident rates of COVID-19 as of the date of this Quarterly Report. In India, specifically, a second wave of COVID-19 began in early March 2021 and has quickly spread across the country. India has imposed a general and widespread lock-down in response to the substantial increase in cases related to COVID-19. Several states have imposed nightly curfews for all persons (with limited exceptions for essential services). Such governmental responses to the pandemic have depressed economic activity worldwide, impacting all industries, but with a significant adverse effect on the oil and gas industry. The short-term impact of these challenges has resulted in (i) lower revenue due to terminations of (or amendments to) our existing drilling contracts and (ii) increased expenses due to higher labor and related costs. We cannot at this time determine with certainty how long these challenges will persist as well as the long-term impact that such challenges may have on our operations and growth on a go-forward basis, including in jurisdictions, such as India, where we have significant contractual backlog and derive material revenue; however, the Company is actively managing the business in an attempt to mitigate the impact of the foregoing matters. In order to decrease the Company’s overall operating expenses, the Company has undertaken significant headcount and salary reductions, both onshore and offshore, as well as other cost reduction measures to reflect the lower operating activity. Headcount and salary levels have not recovered to pre-pandemic levels. The reduced global economic activity resulting from the COVID-19 outbreak in 2020 caused demand for global oil and gas to significantly decline. The efforts to contain the COVID-19 outbreak will likely continue to depress global economic activity in the near-term, and the supply and demand imbalance of oil and gas will likely continue for the foreseeable future. The potential for oil prices to decline in the future continues to put pressure on oil and gas activity levels, particularly in the deepwater segment. Notwithstanding the recovery in global oil prices in early 2021, oil and gas prices are expected to continue to be volatile as a result of the ongoing COVID-19 outbreak, changes in oil and gas inventories and industry demand, and therefore, the Company cannot predict how long oil and gas prices will remain stable or further improve, if at all, or whether they could reverse course and decline. While our management is actively monitoring the foregoing events and its associated financial impact our business, it is uncertain at this time as to the full magnitude that volatile and uncertain oil and gas prices will have on our financial condition and future results of operations. Agreements with Seadrill Partners On February 9, 2021, Vantage Holdings International (“VHI”), a subsidiary of VDI, entered into a Framework Agreement and related Management and Marketing Agreements, as amended on March 16, 2021 (collectively, the “Operations, Management and Marketing Agreements”) with Seadrill Partners LLC (“Seadrill Partners”) pursuant to which certain subsidiaries of VHI (the “VHI Entities”) will provide operating, management and marketing services to Seadrill Partners and its subsidiaries (the “Seadrill Partner Entities”) in respect of four deepwater floaters owned by the Seadrill Partners Entities, which include two drillships, the West Polaris and the West Capella , and two semisubmersibles, the West Leo and the West Sirius . The Operations, Management and Marketing Agreements were subject to the approval of, and were approved by, the U.S. Bankruptcy Court for the Southern District of Texas on March 18, 2021. In connection with the entry into the Operations, Management and Marketing Agreements, VHI organized a new legal entity, Vantage Financial Management Co. (“VFMC”), based in the Cayman Islands, to provide certain cash management services to the Seadrill Partners Entities in respect of the management of the vessels subject to the Operations, Management and Marketing Agreements. VFMC was organized as an unrestricted, indirectly owned subsidiary of the Company and is therefore not subject to the restrictions under the First Lien Indenture. Purchase and Sale Agreement to Sell the Titanium Explorer On December 31, 2020, we entered into a purchase and sale agreement with Best Oasis Limited (the “Buyer”) to sell the Titanium Explorer (the “Purchase and Sale Agreement”), for an aggregate purchase price of $ 13.8 million and we classified the rig as held for sale on our Consolidated Balance Sheet. The transactions contemplated by the Purchase and Sale Agreement closed on March 10, 2021. Pursuant to the Purchase and Sale Agreement, the Buyer is required to recycle the rig in an environmentally sound manner. Letter of Award for the Platinum Explorer On February 3, 2021, our ultra-deepwater drillship, the Platinum Explorer , received a letter of award for a two-year contract from Oil and Natural Gas Company (“ONGC”). The Platinum Explorer is currently performing under an existing three-year contract with ONGC, which is expected to close in the second quarter of 2021, and it will experience some brief out-of-service time for planned maintenance after the existing contract expires. The new contract with ONGC is expected to commence shortly thereafter. |
Basis of Presentation and Signi
Basis of Presentation and Significant Accounting Policies | 3 Months Ended |
Mar. 31, 2021 | |
Accounting Policies [Abstract] | |
Basis of Presentation and Significant Accounting Policies | 2. Basis of Presentation and Significant Accounting Policies Basis of Consolidation: The accompanying interim consolidated financial information as of March 31, 2021 and for the three months ended March 31, 2021 and 2020 has been prepared without audit, pursuant to the rules and regulations of the SEC, and includes our accounts and those of our majority owned subsidiaries and VIEs (as discussed below). All significant intercompany transactions and accounts have been eliminated. They reflect all adjustments which are, in the opinion of management, necessary for a fair presentation of the financial position and results of operations for the interim periods, on a basis consistent with the annual audited financial statements. Certain information and footnote disclosures normally included in financial statements prepared in accordance with U.S. GAAP have been condensed or omitted pursuant to the rules and regulations of the SEC, although we believe that the disclosures made are adequate to provide for fair presentation. The balance sheet at December 31, 2020 is derived from our December 31, 2020 audited financial statements. These interim consolidated financial statements should be read in conjunction with the consolidated financial statements and the notes thereto included in our Annual Report on Form 10-K for the year ended December 31, 2020, which was filed with the SEC on March 18, 2021. The results of operations for the interim periods are not necessarily indicative of the operating results for the full fiscal year or any future periods. Certain previously reported amounts have been reclassified to conform to the current period presentation. In addition to the consolidation of our majority owned subsidiaries, we also consolidate VIEs when we are determined to be the primary beneficiary of a VIE. Determination of the primary beneficiary of a VIE is based on whether an entity has (1) the power to direct activities that most significantly impact the economic performance of the VIE and (2) the obligation to absorb losses or the right to receive benefits of the VIE that could potentially be significant to the VIE. Our determination of the primary beneficiary of a VIE considers all relationships between us and the VIE. ADVantage is a joint venture company formed to operate deepwater drilling rigs in Egypt. We determined that ADVantage met the criteria of a VIE for accounting purposes because its equity at risk was insufficient to permit it to carry on its activities without additional subordinated financial support from us. We also determined that we are the primary beneficiary for accounting purposes since we are entitled to use ADVantage for deepwater drilling contract opportunities rejected by ADES International Holding Ltd., a London-listed offshore and onshore provider of oil and gas drilling and production services in the Middle East and Africa (“ADES”), and have the (a) power to direct the operating activities associated with the deepwater drilling rigs, which are the activities that most significantly impact the entity’s economic performance, and (b) obligation to absorb losses or the right to receive a majority of the benefits that could be potentially significant to the VIE. As a result, we consolidate ADVantage in our consolidated financial statements, we eliminate intercompany transactions and we present the interests that are not owned by us as “Noncontrolling interests” in our Consolidated Balance Sheet. The carrying amount associated with ADVantage was as follows: March 31, 2021 December 31, 2020 (unaudited, in thousands) Current assets $ 4,173 $ 7,072 Non-current assets 90 84 Current liabilities 910 3,979 Non-current liabilities 945 741 Net carrying amount $ 2,408 $ 2,436 As ADVantage is a majority owned subsidiary of the Company, it serves as a guarantor under the First Lien Indenture. The 9.25% First Lien Notes are secured by a first priority lien on all of the assets of ADVantage, subject to certain exceptions. Creditors’ recourse against ADVantage for liabilities of ADVantage is limited to the assets of ADVantage. See “ Note 9. Supplemental Financial Information ” of these “Notes to Unaudited Consolidated Financial Statements” for additional details regarding related party transactions associated with this joint venture. Use of Estimates: The preparation of financial statements in accordance with U.S. GAAP requires our management to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. On an ongoing basis, we evaluate our estimates, including those related to property and equipment, income taxes, insurance, employee benefits and contingent liabilities. Actual results could differ from these estimates. Cash and Cash Equivalents: Includes deposits with financial institutions as well as short-term money market instruments with maturities of three months or less when purchased. Materials and Supplies: Consists of materials, spare parts, consumables and related supplies for our drilling rigs. We record these materials and supplies at their average cost. Property and Equipment: Consists of our drilling rigs, furniture and fixtures, computer equipment and capitalized costs for computer software. Drilling rigs are depreciated on a component basis over estimated useful lives ranging from five to 35 years on a straight-line basis as of the date placed in service. Other assets are depreciated upon placement in service over estimated useful lives ranging from three to seven years on a straight-line basis. When assets are sold, retired or otherwise disposed of, the cost and related accumulated depreciation are removed from the balance sheet and the resulting gain or loss is included in “Operating costs” or “General and administrative” expenses on the Consolidated Statement of Operations, depending on the nature of the asset. In the three months ended March 31, 2021, we recognized a net gain of approximately $ 2.7 million related to the sale or retirement of assets. For the three months ended March 31, 2020, the gain/loss related to the sale or retirement of assets was immaterial. We evaluate the realization of property and equipment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. An impairment loss on our property and equipment exists when estimated undiscounted cash flows expected to result from the use of the asset and its eventual disposition are less than its carrying amount. Any impairment loss recognized would be computed as the excess of the asset’s carrying value over the estimated fair value. Estimates of future cash flows require us to make long-term forecasts of our future revenues and operating costs with regard to the assets subject to review. Our business, including the utilization rates and dayrates we receive for our drilling rigs, depends on the level of our customers’ expenditures for oil and gas exploration, development and production expenditures. Oil and gas prices and customers’ expectations of potential changes in these prices, the general outlook for worldwide economic growth, political and social stability in the major oil and gas producing basins of the world, availability of credit and changes in governmental laws and regulations, among many other factors, significantly affect our customers’ levels of expenditures. Sustained declines in or persistent depressed levels of oil and gas prices, worldwide rig counts and utilization, reduced access to credit markets, reduced or depressed sale prices of comparably equipped jackups and drillships and any other significant adverse economic news could require us to evaluate the realization of our drilling rigs. The projections and assumptions used during the fourth quarter of 2020 have not changed significantly as of March 31, 2021; accordingly, no triggering event has occurred to indicate that the carrying value of our drilling rigs may not be recoverable. Interest costs and the amortization of debt financing costs related to the financings of our drilling rigs are capitalized as part of the cost while they are under construction and prior to the commencement of each vessel’s first contract. We did no t capitalize any interest for the reported periods. Debt Financing Costs: Costs incurred with financing debt are deferred and amortized over the term of the related financing facility on a straight-line basis, which approximates the interest method. Debt issuance costs related to a recognized debt liability are presented in the Consolidated Balance Sheet as a direct deduction from the carrying amount of that debt liability. Rig and Equipment Certifications: We are required to obtain regulatory certifications to operate our drilling rigs and certain specified equipment, and must maintain such certifications through periodic inspections and surveys. The costs associated with these certifications, including drydock costs, are deferred and amortized over the corresponding certification periods. Revenue Recognition: See “ Note 3. Revenue from Contracts with Customers ” of these “Notes to Unaudited Consolidated Financial Statements” for further information. Income Taxes: Income taxes are provided for based upon the tax laws and rates in effect in the countries in which our operations are conducted and income is earned. Deferred income tax assets and liabilities are computed for differences between the financial statement basis and tax basis of assets and liabilities that will result in future taxable or tax deductible amounts and are based on enacted tax laws and rates applicable to the periods in which the differences are expected to affect taxable income. We do not establish deferred tax liabilities for certain of our foreign earnings that we intend to indefinitely reinvest to finance foreign activities. Valuation allowances are established when necessary to reduce deferred income tax assets to the amount expected to be realized. We recognize interest and penalties related to income taxes as a component of income tax expense. Concentrations of Credit Risk: Financial instruments that potentially subject us to a significant concentration of credit risk consist primarily of cash and cash equivalents, restricted cash and accounts receivable. We maintain deposits in federally insured financial institutions in excess of federally insured limits. We monitor the credit ratings and our concentration of risk with these financial institutions on a continuing basis to safeguard our cash deposits. We have a limited number of key customers, who are primarily large international oil and gas operators, national oil companies and other international oil and gas companies. Our contracts provide for monthly billings as services are performed and we monitor compliance with contract payment terms on an ongoing basis. Payment terms on customer invoices typically range from 30 to 45 days . Outstanding receivables beyond payment terms are promptly investigated and discussed with the specific customer. Credit Losses – Accounts Receivable: The allowance for doubtful accounts is based on the Company’s assessment of the collectability of customer accounts. Current estimates of expected credit losses consider factors such as the historical experience and credit quality of our customers. The Company considers historical loss information as the most reasonable basis on which to determine expected credit losses unless current or forecasted future conditions for customers (or customer groups) indicate that risk characteristics have changed. We also considered the impact of the COVID-19 pandemic and the associated oil price and market share volatility on our allowance for doubtful accounts (see “Ongoing Impact of COVID-19 and Declines in the Demand for Oil and Gas” set forth above in “ Note 1. Organization and Recent Events ” of these “Notes to Unaudited Consolidated Financial Statements”) The allowance for doubtful accounts on our trade receivables was $ 5.0 million as of each of March 31, 2021 and December 31, 2020, respectively. This amount represents a customer’s decision not to pay us for days impacted by what we believe were force majeure and other similar events for which we would still be entitled to receive payment under the applicable contract. We disagree with the customer's decision and are currently evaluating our remedies, if any, under the applicable contract. Earnings (loss) per Share: We compute basic and diluted EPS in accordance with the two-class method. We include restricted stock units granted to employees that contain non-forfeitable rights to dividends as such grants are considered participating securities. Basic earnings (loss) per share are based on the weighted average number of Ordinary Shares outstanding during the applicable period. Diluted EPS are computed based on the weighted average number of Ordinary Shares and ordinary share equivalents outstanding in the applicable period, as if all potentially dilutive securities were converted into Ordinary Shares (using the treasury stock method). The following is a reconciliation of the number of shares used for the basic and diluted EPS computations Three Months Ended March 31, 2021 2020 (In thousands) Weighted average Ordinary Shares outstanding for basic EPS 13,115 13,115 Restricted share equity awards — — Adjusted weighted average Ordinary Shares outstanding for diluted EPS 13,115 13,115 The following sets forth the number of shares excluded from diluted EPS computations: Three Months Ended March 31, 2021 2020 (In thousands) Restricted share equity awards 218 194 Future potentially dilutive Ordinary Shares excluded from diluted EPS 218 194 Functional Currency: We consider USD to be the functional currency for all of our operations since the majority of our revenues and expenditures are denominated in USD, which limits our exposure to currency exchange rate fluctuations. We recognize currency exchange rate gains and losses in “Other, net” in our Consolidated Statement of Operations. For the three months ended March 31, 2021 and 2020, we recognized a net loss of approximately $ 0.6 million and a net gain of approximately $ 0.1 million, respectively, related to currency exchange rates. Fair Value of Financial Instruments: The fair value of our short-term financial assets and liabilities approximates the carrying amounts represented in the balance sheet principally due to the short-term nature or floating rate nature of these instruments. As of March 31, 2021, the fair value of the 9.25% First Lien Notes was approximately $ 293.6 million based on quoted market prices in a less active market, a Level 2 measurement. Share-based Compensation: TBGs granted under the 2016 Amended MIP vest annually, ratably over four years ; however, accelerated vesting is provided for in the event of a QLE. Otherwise, the settlement of any vested TBGs occurs upon the seventh anniversary of the Effective Date. PBGs granted under the 2016 Amended MIP contain vesting eligibility provisions tied to the earlier of a QLE or seven years from the Effective Date. Upon the occurrence of a vesting eligibility event, the number of PBGs that actually vest will be dependent on the achievement of pre-determined TEV targets specified in the grants. Both the TBGs and PBGs were classified as liabilities consistent with the classification of the underlying securities prior to the Conversion. Following the Conversion, outstanding TBGs and PBGs were subject to modification accounting and were re-classified as equity awards. Under the provisions of ASC 718 Compensation – Stock Compensation share-based compensation expense is recognized over the requisite service period from the grant date to the fourth year vest date for TBGs. For PBGs, expense will be recognized when it is probable that the TEV targets will be met. Once it is probable the performance condition will be met, compensation expense based on the fair value of the PBGs at the conversion date of the Convertible Notes will be recognized for the service period completed to the seventh anniversary of the Effective Date for PBGs. Noncontrolling Interest: Noncontrolling interests represent the equity investments of the minority owner in ADVantage, a joint venture with ADES that we consolidate in our financial statements. Recently Adopted Accounting Standards: In December 2019, the FASB issued ASU No. 2019-12, “Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes.” This ASU simplifies the accounting for income taxes by removing certain exceptions to the general principles in Topic 740 and also simplifies and improves consistent application of GAAP for other areas of Topic 740 by clarifying and amending existing guidance. We adopted this standard on January 1, 2021, and such adoption did not have a material impact on our consolidated financial statements. Recently Issued Accounting Standards: There have been no new accounting pronouncements not yet effective that have significance, or potential significance, with respect to our consolidated financial statements. |
Revenue from Contracts with Cus
Revenue from Contracts with Customers | 3 Months Ended |
Mar. 31, 2021 | |
Revenue From Contract With Customer [Abstract] | |
Revenue from Contracts with Customers | 3. Revenue from Contracts with Customers The activities that primarily drive the revenue earned in our drilling contracts with customers include (i) providing our drilling rig, work crews, related equipment and services necessary to operate the rig, (ii) delivering the drilling rig by mobilizing to and demobilizing from the drill site, and (iii) performing pre-operating activities, including rig preparation activities and/or equipment modifications required for the contract. The integrated drilling services that we perform under each drilling contract represent a single performance obligation satisfied over time and comprised of a series of distinct time increments, or service periods. Dayrate Drilling Revenue. Our drilling contracts generally provide for payment on a dayrate basis, with higher rates for periods when the drilling unit is operating and lower rates or zero rates for periods when drilling operations are interrupted or restricted. The dayrate billed to the customer is determined based on varying rates applicable to the specific activities performed on an hourly basis. Such dayrate consideration is allocated to the distinct hourly increment it relates to within the contract term and therefore, recognized as we perform the daily drilling services. Amortizable Revenue. In connection with certain contracts, we receive lump-sum fees or similar compensation for (i) the mobilization of equipment and personnel prior to the commencement of drilling services, (ii) the demobilization of equipment and personnel upon contract completion and (iii) postponement fees in consideration for the postponement of a contract until a later date. These activities are not considered to be distinct within the context of the contract and therefore, the associated revenue is allocated to the overall single performance obligation. Mobilization fees received prior to commencement of drilling operations are recorded as a contract liability and amortized on a straight‑line basis over the initial contract period. Demobilization fees expected to be received upon contract completion are estimated at contract inception and recognized on a straight-line basis over the initial contract term with an offset to an accretive contract asset. In many contracts, demobilization fees are contingent upon the occurrence or non-occurrence of a future event and the estimate for such revenue may therefore be constrained. Postponement fees received that are contingent upon the occurrence (or non-occurrence) of a future event are recognized on a straight-line basis over the contract term. Fees received for the mobilization or demobilization of equipment and personnel are included in “Contract drilling services” in our Consolidated Statement of Operations. Capital Upgrade/Contract Preparation Revenue. In connection with certain contracts, we receive lump-sum fees or similar compensation for requested capital upgrades to our drilling rigs or for other contract preparation work. These activities are not considered to be distinct within the context of the contract and therefore, fees received are recorded as a contract liability and amortized to contract drilling revenues on a straight-line basis over the initial contract term. Revenues Related to Reimbursable Expenses . We generally receive reimbursements from our customers for the purchase of supplies, equipment, personnel services and other services provided at their request in accordance with a drilling contract or other agreement. We are generally considered a principal in such transactions and therefore, recognize reimbursable revenues and the corresponding costs as we provide the customer‑requested goods and services. We have elected to exclude from the transaction price measurement all taxes assessed by a governmental authority. Disaggregation of Revenue The following tables present our revenue disaggregated by revenue source for the periods indicated: Three Months Ended March 31, 2021 Three Months Ended March 31, 2020 Jackups Deepwater Management Consolidated Jackups Deepwater Management Consolidated (unaudited, in thousands) Dayrate revenue $ 8,898 $ 8,827 $ 98 $ 17,823 $ 23,986 $ 19,731 $ 546 $ 44,263 Charter lease revenue — — — — 476 — — 476 Amortized revenue — — — — 96 506 — 602 Reimbursable revenue 2,322 21 — 2,343 3,225 2,555 335 6,115 Total revenue $ 11,220 $ 8,848 $ 98 $ 20,166 $ 27,783 $ 22,792 $ 881 $ 51,456 Dayrate revenue and amortized revenue for Jackups and Deepwater are included within “Contract drilling services” in our Consolidated Statement of Operations. All other revenue, excluding “Contract termination revenue”, are included within “Reimbursables and other” in our Consolidated Statement of Operations. Accounts Receivable, Contract Liabilities and Contract Costs Accounts receivable are recognized when the right to consideration becomes unconditional based upon contractual billing schedules. Payment terms on customer invoices typically range from 30 to 45 days . We recognize contract liabilities, recorded in other “Other current liabilities” and “Other long-term liabilities”, for prepayments received from customers and for deferred revenue received for mobilization, contract preparation and capital upgrades. Certain direct and incremental costs incurred for contract preparation, initial mobilization and modifications of contracted rigs represent contract fulfillment costs as they relate directly to a contract, enhance resources that will be used to satisfy our performance obligations in the future and are expected to be recovered. These costs are deferred as a current or noncurrent asset depending on the length of the initial contract term and are amortized on a straight-line basis to operating costs as services are rendered over the initial term of the related drilling contract. Costs incurred for capital upgrades are capitalized and depreciated over the useful life of the asset. Costs incurred for the demobilization of rigs at contract completion are recognized as incurred during the demobilization process. Costs incurred to mobilize a rig without a contract are expensed as incurred. The following table provides information about contract cost assets and contract revenue liabilities from contracts with customers: March 31, 2021 December 31, 2020 (unaudited, in thousands) Current contract cost assets $ 4,965 $ 2,905 Current contract revenue liabilities 10,759 5,100 Significant changes in contract cost assets and contract revenue liabilities during the three months ended March 31, 2021 are as follows: Contract Costs Contract Revenues (unaudited, in thousands) Balance as of December 31, 2020 $ 2,905 $ 5,100 Increase (decrease) due to contractual changes 2,060 5,659 Balance as of March 31, 2021 (1) $ 4,965 $ 10,759 (1) We expect to recognize contract revenues of approximately $ 6.9 million during the remaining nine months of 2021 and $ 3.9 million thereafter related to unsatisfied performance obligations existing as of March 31, 2021. We have elected to utilize an optional exemption that permits us to exclude disclosure of the estimated transaction price related to the variable portion of unsatisfied performance obligations at the end of the reporting period, as our transaction price is based on a single performance obligation consisting of a series of distinct hourly increments, the variability of which will be resolved at the time of the future services. |
Leases
Leases | 3 Months Ended |
Mar. 31, 2021 | |
Leases [Abstract] | |
Leases | 4. Leases We have operating leases expiring at various dates, principally for office space, onshore storage yards and certain operating equipment. Additionally, we sublease certain office space to third parties. We determine if an arrangement is a lease at inception. Operating leases with an initial term greater than 12 months are included in “Operating lease ROU assets”, “Other current liabilities”, and “Other long-term liabilities” on our Consolidated Balance Sheet. Operating lease ROU assets and operating lease liabilities are recognized based on the present value of the future lease payments over the lease term at commencement date. As most of our leases do not provide an implicit rate, we use our incremental borrowing rate based on the information available at commencement date in determining the present value of future payments. The operating lease ROU asset also includes any lease payments made prior to or at the commencement date and is reduced by lease incentives received and initial direct costs incurred. Our lease terms may include options to extend or terminate the lease when it is reasonably certain that we will exercise that option. Lease expense is recognized on a straight-line basis over the lease term. We have lease agreements with lease and non-lease components, which are generally not accounted for separately. Certain of our leases include provisions for variable payments. These variable payments are not included in the calculation of lease liability and ROU assets. The components of lease expense were as follows: Three Months Ended March 31, (unaudited, in thousands) Classification in the Consolidated Statement of Operations 2021 2020 Operating lease cost (1) Operating costs $ 902 $ 966 Operating lease cost (1) General and administrative 152 152 Sublease income Operating costs ( 121 ) ( 121 ) Sublease income General and administrative ( 62 ) ( 62 ) Total operating lease cost $ 871 $ 935 (1) Short-term lease costs were approximately $ 0.1 million during the three months ended March 31, 2021 and 2020, respectively. Operating cash flows used for operating leases approximates lease expense. (unaudited, in thousands) Classification in the Consolidated Balance Sheet March 31, 2021 December 31, 2020 Assets: Operating lease assets Operating lease ROU assets $ 3,583 $ 3,997 Total leased assets $ 3,583 $ 3,997 Liabilities: Current operating Other current liabilities $ 1,979 $ 2,038 Noncurrent operating Other long-term liabilities 2,028 2,371 Total lease liabilities $ 4,007 $ 4,409 As of March 31, 2021, maturities of lease liabilities were as follows: (unaudited, in thousands) Operating Leases Remaining nine months of 2021 $ 1,746 2022 1,705 2023 949 2024 — 2025 — Total future lease payments $ 4,400 Less imputed interest ( 393 ) Present value of lease obligations $ 4,007 As of March 31, 2021, the weighted average discount rate and the weighted average remaining lease term for operating leases was 9.25 % and 2.12 years, respectively. ROU assets and lease liabilities recorded for leases commencing during the three months ended March 31, 2021 was $ 0.6 million. The bareboat charter contract on the Soehanah jackup rig was accounted for as an operating lease with charter revenue included in “Reimbursables and other” in the Consolidated Statement of Operation for the three months ended March 31, 2020. In May 2019, the parties to the bareboat charter terminated the charterer’s right to acquire the rig at the end of the term of the bareboat charter, which was originally intended to end on December 31, 2019. However, under the terms of the bareboat charter, the lease term continued until the rig was redelivered to the Company, which occurred on February 3, 2020. |
Debt
Debt | 3 Months Ended |
Mar. 31, 2021 | |
Debt Disclosure [Abstract] | |
Debt | 5. Debt Our debt was composed of the following as of the dates indicated: March 31, 2021 December 31, 2020 (unaudited, in thousands) 9.25% First Lien Notes, net of financing costs of $ 4,371 and $ 4,781 , respectively $ 345,629 $ 345,219 Less current maturities of long-term debt — — Long-term debt, net $ 345,629 $ 345,219 9.25% First Lien Notes. On November 30, 2018, the Company issued $ 350.0 million in aggregate principal amount of 9.25% First Lien Notes in a private placement. The 9.25% First Lien Notes were issued at par and are fully guaranteed on a senior secured basis by the Company’s direct and indirect subsidiaries and are secured by a first priority lien on substantially all of the assets of the Company and its subsidiaries, in each case subject to certain exceptions. The 9.25% First Lien Notes are subject to first payment priority in favor of holders of up to $ 50.0 million of future super-priority debt and are subject to both mandatory and optional redemption provisions. The 9.25% First Lien Notes mature on November 15, 2023 and bear interest from the date of their issuance at the rate of 9.25 % per year. Interest is computed on the basis of a 360-day year comprised of twelve 30-day months and is payable semi-annually in arrears, commencing on May 15, 2019. The First Lien Indenture includes customary covenants and events of default, including covenants that, among other things, restrict the granting of liens, restrict the making of investments, restrict the incurrence of indebtedness and the conveyance of vessels, limit transactions with affiliates, and require that the Company provide periodic financial reports. The net proceeds from the issuance were used (i) to repay all obligations under the 2016 Term Loan Facility and to terminate the credit agreement governing such facility, (ii) to redeem all outstanding 10% Second Lien Notes, (iii) to fund the remaining amounts to be paid in connection with the purchase of the Soehanah jackup rig, (iv) to pay fees and expenses related to the foregoing and to the offering of the 9.25% First Lien Notes and (v) for general corporate purposes. Concurrently with the issuance of the 9.25% First Lien Notes, we entered into a letter of credit facility to replace the letter of credit facility existing under the 2016 Term Loan Facility. The facility has a capacity of $ 50.0 million, with all outstanding letters of credit being cash collateralized. We have issued $ 11.0 million in letters of credit under this facility as of March 31, 2021. |
Shareholders' Equity
Shareholders' Equity | 3 Months Ended |
Mar. 31, 2021 | |
Equity [Abstract] | |
Shareholders' Equity | 6. Shareholders’ Equity Stock Issuance VDI has 50,000,000 authorized Ordinary Shares. Upon emergence from bankruptcy on the Effective Date, VDI issued 5,000,053 Ordinary Shares in connection with the settlement of Liabilities Subject to Compromise in accordance with the Reorganization Plan and the VDC Note. On December 4, 2019, VDI issued an additional 8,114,977 Ordinary Shares to convert all of the outstanding Convertible Notes. As of March 31, 2021, 13,115,026 Ordinary Shares were issued and outstanding. Share-based Compensation On August 9, 2016, the Company adopted the 2016 Amended MIP to align the interests of participants with those of the shareholders by providing incentive compensation opportunities tied to the performance of the Company’s equity securities. Pursuant to the 2016 Amended MIP, the Compensation Committee may grant to employees, directors and consultants stock options, restricted stock, restricted stock units or other awards. No awards were granted to employees or directors during the three months ended March 31, 2021 and 2020. During the three months ended March 31, 2021, 18,224 of previously granted TBGs vested. Both the TBGs and PBGs are classified as equity awards. For the three months ended March 31, 2021 and 2020, we recognized share-based compensation expense related to the TBGs of approximately $ 0.3 million and $ 0.7 million, respectively. As of March 31, 2021, we concluded that it was not probable that the TEV performance condition would be met and therefore, no share based compensation expense was recognized for PBGs. Pursuant to the 2016 Amended MIP and the terms of the applicable unit awards, participants holding restricted stock units are contractually entitled to receive all dividends or other distributions that are paid to VDI’s stockholders, provided that any such dividends will be subject to the same vesting requirements of the underlying units. Dividend payments accrue to outstanding awards (both vested and unvested) in the form of “Dividend Equivalents” equal to the dividend per share underlying the applicable award under the 2016 Amended MIP. As a result of a special cash distribution paid to shareholders of record on December 17, 2019, $ 8.8 million has been recorded in “Other long-term liabilities” in our Consolidated Balance Sheet at March 31, 2021 to be paid upon settlement of the TBGs. |
Income Taxes
Income Taxes | 3 Months Ended |
Mar. 31, 2021 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | 7. Income Taxes VDI is a Cayman Islands company operating in multiple countries through its subsidiaries. The Cayman Islands do not impose corporate income taxes. Consequently, we have calculated income taxes based on the laws and tax rates in effect in the countries in which operations are conducted, or in which we and our subsidiaries are considered resident for income tax purposes. Our income taxes are generally dependent upon the results of our operations and when we generate significant revenues in jurisdictions where the income tax liability is based on gross revenues or asset values, there is no correlation to the net operating results and the income tax expense. Furthermore, in some jurisdictions we do not pay taxes, pay taxes at lower rates or receive benefits for certain income and expense items, including interest expense, loss on extinguishment of debt, gains or losses on disposal or transfer of assets, reorganization expenses and write-off of development costs. On January 22, 2020, VDI filed the Tax Election with the IRS to be treated as a partnership, rather than a corporation, for U.S. federal income tax purposes, with an effective date retroactive to December 9, 2019. As a result, U.S. Holders are required to take into account their allocable share of items of income, gain, loss deduction and credit of VDI for each taxable year of VDI ending with or within the U.S. Holder’s taxable year, regardless of whether any distribution has been or will be received from VDI. Each item generally will have the same character and source (either U.S. or foreign) as though the U.S. Holder had realized the item directly. VDI’s change in tax status has not had a material impact on our consolidated financial statements as of March 31, 2021. On March 27, 2020, the Coronavirus Aid, Relief, and Economic Security Act (the “CARES Act”) was enacted, a sweeping stimulus bill intended to bolster the U.S. economy and provide emergency financial assistance to qualifying businesses and individuals. The CARES Act, among other things, modified the net operating losses carryovers and carrybacks rules, and included modifications to Section 163(j) of the Code to increase the allowable business interest deduction. On December 27, 2020, the Taxpayer Certainty and Disaster Tax Relief Act of 2020 was enacted as part of the Consolidated Appropriations Act, 2021, followed by the American Rescue Plan Act on March 1, 2021. These recent laws, among other provisions, expand and extend the refundable employee retention tax credits previously made available under the CARES Act. As of March 31, 2021, our analysis of the provisions of the CARES Act revealed no material implications on the income tax provision. Deferred income tax assets and liabilities are recorded for the expected future tax consequences of events that have been recognized in our financial statements or tax returns. We provide for deferred taxes on temporary differences between the financial statements and tax bases of assets and liabilities using the enacted tax rates which are expected to apply to taxable income when the temporary differences are expected to reverse. Deferred tax assets are also provided for certain tax losses and tax credit carryforwards. A valuation allowance is established to reduce deferred tax assets when it is more likely than not that some portion or all of the deferred tax asset will not be realized. We do not establish deferred tax liabilities for certain of our foreign earnings that we intend to indefinitely reinvest to finance foreign activities. In certain jurisdictions we are taxed under preferential tax regimes, which may require our compliance with specified requirements to sustain the tax benefits. We believe we are in compliance with the specified requirements and will continue to make all reasonable efforts to comply; however, our ability to meet the requirements of the preferential tax regimes may be affected by changes in laws or administrative practices, our business operations and other factors affecting the Company and industry, many of which are beyond our control. Our periodic tax returns are subject to examination by taxing authorities in the jurisdictions in which we operate in accordance with the normal statute of limitations in the applicable jurisdiction. These examinations may result in assessments of additional taxes that are resolved with the authorities or through the courts. Resolution of these matters involves uncertainties and there are no assurances as to the outcome. Our tax years from 2010 onward remain open to examination in many of our jurisdictions and we are currently involved in several tax examinations in jurisdictions where we are operating or have previously operated. As information becomes available during the course of these examinations, we may increase or decrease our estimates of tax assessments and accruals. |
Commitments and Contingencies
Commitments and Contingencies | 3 Months Ended |
Mar. 31, 2021 | |
Commitments And Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | 8. Commitments and Contingencies We are subject to litigation, claims and disputes in the ordinary course of business, some of which may not be covered by insurance. There is an inherent risk in any litigation or dispute and no assurance can be given as to the outcome of any claims. Brazil Improbity Action On April 27, 2018, the Company was added as an additional defendant in a legal proceeding (the “Improbity Action”), initiated by the Brazilian Federal Prosecutor against certain individuals, including an executive of Petrobras and two political lobbyists, in connection with the contracting of the Titanium Explorer drillship to Petrobras under the Drilling Contract, with the Brazilian Government and Petrobras as plaintiffs. Vantage is alleged to have been involved in and benefitted from the purported bribery scheme at Petrobras through Hamylton Padilha, the Brazilian agent our former parent company, VDC, used in the contracting of the Titanium Explorer drillship to Petrobras, and Mr. Hsin-Chi Su, a former member of VDC’s board of directors and a significant shareholder of VDC. We first became aware of the legal proceeding on July 19, 2018 as it was previously under seal . On March 22, 2019, we were formally served in the United States, and we filed our preliminary statement of defense with the 11 th Federal court of the Judicial Branch of Curitiba, State of Parana, Brazil (the “Brazilian Federal Court”) on April 12, 2019 in response. On August 20, 2020, the Brazilian Federal Court dismissed our preliminary statement of defense. On October 5, 2020, we subsequently filed a motion to clarify with the Brazilian Federal Court requesting the reconsideration of certain aspects of the decision dismissing our preliminary statement of defense. Our motion to clarify was denied on December 14, 2020, and on February 10, 2021 we filed an appeal to the 4th Federal Court of Appeals seeking to reverse the Brazilian Federal Court’s denial of our preliminary defense. On April 15, 2021, the Brazilian authorities served us indirectly through the U.S. Department of Justice agreeing to formally send us documents related to the Improbity Action. We will be obligated to file a statement of defense in the matter as soon as the case docket demonstrates that all of the defendants have been served again in this legal proceeding. The Company understands that the Improbity Action, is a civil action and is part of the Brazilian Federal Prosecutor’s larger “Car Wash” investigation into money laundering and corruption allegations in Brazil. The damages claimed in the proceeding are in the amount of BRL 102.8 million (approximately $ 18.3 million), together with a civil fine equal to three times that amount. The Company understands that the Brazilian Federal Court previously issued an order authorizing the seizure and freezing of the assets of the Company and the other three defendants in the legal proceeding, as a precautionary measure, in the amount of approximately $ 73.4 million. The Company and the other three defendants are jointly and severally liable for this amount. The seizure order has not had an effect on the Company’s assets or operations, as the Company does not own any assets in Brazil, and does not currently intend to relocate any assets to Brazil. On February 13, 2019, the Company learned that the Brazilian Federal Prosecutor had previously requested mutual legal assistance from the U.S. DOJ pursuant to the United Nations Convention against Corruption of 2003 to obtain a freezing order against the Company’s U.S. assets in the approximate amount of $ 73.4 million. The Company believes this request is not supported by applicable law and intends to vigorously oppose and defend against any attempts to seize its assets. On April 12, 2019, the Company filed an interlocutory appeal with the 4 th Circuit of the Federal Court of Appeals in Porto Alegre, State of Rio Grande do Sul, Brazil (the “Brazilian Appellate Court”), the appellate court hearing appeals in the “Car Wash” cases, to stay the seizure and freezing order of the Brazilian Federal Court. On May 20, 2019, the Company announced that the Brazilian Appellate Court ruled in favor of the Company’s appeal to stay the seizure and freezing order of the Brazilian Federal Court. The foregoing ruling is still subject to confirmation by a three-judge panel, and is subject to appeal, and the Company can offer no assurances that the stay will be confirmed or as to the outcome of any appeal thereof. The Company has communicated the Brazilian Appellate Court’s ruling to the DOJ, and has asked the Brazilian Federal Court to do the same. On July 18, 2019, the Company announced that the Brazilian Government made a filing with the Brazilian Federal Court reporting that the DOJ has advised the Brazilian Ministry of Justice that it would not be possible for the DOJ to comply with the mutual assistance request in respect of the asset freeze order. The Company also announced that it learned from the Brazilian Ministry of Justice that the DOJ’s response to the request for mutual assistance stated that no legal grounds existed for implementing the requested asset freeze, and that the DOJ was returning the request without taking action and considers the matter concluded. The Company intends to vigorously defend against the allegations made in the Improbity Action. However, we can neither predict the ultimate outcome of this matter nor that there will not be further developments in the “Car Wash” investigation or in any other ongoing investigation or related proceeding that could adversely affect us. At this time, we are not yet able to determine the likelihood of loss, if any, arising from this matter. Restructuring Agreement and the Associated Settlement Agreement Pursuant to the terms of the Restructuring Agreement among VDC and a majority of our secured creditors, the Company agreed to the Reorganization Plan and VDC agreed to commence official liquidation proceedings under the laws of the Cayman Islands. On December 2, 2015, pursuant to the Restructuring Agreement, the Company acquired two subsidiaries responsible for the management of the Company from VDC in exchange for the VDC Note. In connection with our separation from VDC, we and the Joint Official Liquidators, appointed to oversee the liquidation of VDC, entered into discussions regarding the settlement of certain intercompany receivables and payables as between the Company and its subsidiaries, on the one hand, and VDC and its subsidiaries, on the other. On March 4, 2020, we, and our subsidiaries on the one hand, and VDC and their subsidiaries, on the other, entered into a settlement agreement pursuant to which the parties to the settlement agreement agreed to release each other from certain claims in exchange for Vantage paying VDC $ 15.0 million, subject to the approval of the Court of Grand Cayman. On March 16, 2020, the Court of Grand Cayman approved the settlement agreement. On March 25, 2020, the Company paid $ 15.0 million in accordance with the settlement agreement, fully resolving the matter. We recorded a gain of $ 2.3 million related to the settlement agreement included in “Other Income” in the Consolidated Statement of Operations during the three months ended March 31, 2020. |
Supplemental Financial Informat
Supplemental Financial Information | 3 Months Ended |
Mar. 31, 2021 | |
Balance Sheet Related Disclosures [Abstract] | |
Supplemental Financial Information | 9. Supplemental Financial Information Prepaid Expenses and Other Current Assets Prepaid expenses and other current assets consisted of the following as of the dates indicated: March 31, 2021 December 31, 2020 (unaudited, in thousands) Sales tax receivable $ 5,738 $ 6,797 Assets held for sale (1) — 10,113 Other receivables 1,232 1,517 Income tax receivable 853 826 Prepaid insurance 859 386 Current deferred contract costs 4,965 2,905 Other 6,891 6,607 $ 20,538 $ 29,151 (1) Includes the aggregate carrying amount of the Titanium Explorer , along with related assets, as of December 31, 2020. See “ Note 1. Organization and Recent Events ” of these “Notes to Unaudited Consolidated Financial Statements” for additional details regarding the Purchase and Sale Agreement to sell the Titanium Explorer . Property and Equipment, net Property and equipment, net, consisted of the following as of the dates indicated: March 31, 2021 December 31, 2020 (unaudited, in thousands) Drilling equipment $ 774,848 $ 774,813 Assets under construction 931 561 Office and technology equipment 18,405 18,405 Leasehold improvements 1,165 1,165 795,349 794,944 Accumulated depreciation ( 292,684 ) ( 278,562 ) Property and equipment, net $ 502,665 $ 516,382 Other Assets Other assets consisted of the following as of the dates indicated: March 31, 2021 December 31, 2020 (unaudited, in thousands) Noncurrent restricted cash $ 4,058 $ 4,546 Deferred certification costs 5,498 4,535 Deferred income taxes 2,033 1,923 Other noncurrent assets 2,641 1,122 $ 14,230 $ 12,126 Other Current Liabilities Other current liabilities consisted of the following as of the dates indicated: Other current liabilities March 31, 2021 December 31, 2020 (unaudited, in thousands) Interest $ 12,229 $ 4,139 Compensation (1) 6,371 7,128 Income taxes payable 5,483 2,951 Current deferred revenue 10,759 5,100 Current portion of operating lease liabilities 1,979 2,038 Other 3,173 3,378 $ 39,994 $ 24,734 (1) Includes $ 3.4 million as of March 31, 2021 and $ 2.1 million as of December 31, 2020 related to cash awards granted to certain key employees of the Company pursuant to underlying award agreements and issued under the 2016 Amended MIP. Other Long-term Liabilities Other Long-term liabilities consisted of the following as of the dates indicated: March 31, 2021 December 31, 2020 (unaudited, in thousands) Deferred income taxes $ 929 $ 970 2016 MIP - Dividend Equivalents (1) 8,766 8,006 Noncurrent operating lease liabilities 2,028 2,371 Other non-current liabilities 2,570 3,664 $ 14,293 $ 15,011 (1) Dividend Equivalents on vested TBGs are payable on settlement of the applicable award. Cash, Cash Equivalents and Restricted Cash The following table provides a reconciliation of cash, cash equivalents and restricted cash reported within the Consolidated Balance Sheet that sum to the total of the same amounts shown in the Consolidated Statement of Cash Flows as of the dates indicated: March 31, 2021 December 31, 2020 (unaudited, in thousands) Cash and cash equivalents $ 140,381 $ 141,945 Restricted cash 7,798 7,996 Restricted cash included within Other Assets 4,058 4,546 Total cash, cash equivalents and restricted cash shown in the Consolidated Statements of Cash Flows $ 152,237 $ 154,487 Restricted cash represents cash held by banks as certificates of deposit collateralizing letters of credit. Related Party Transactions In association with the establishment of ADVantage, the Company and ADES contributed cash to ADVantage in excess of the issued capital of the joint venture, with the understanding that such amounts are to be considered shareholder loans. As of March 31, 2021, the total outstanding amount due to ADES for such excess cash contributions was approximately $ 711,000 , which is included in “Other current liabilities” on the Consolidated Balance Sheet. In conjunction with the establishment of ADVantage, the Company entered into a series of agreements with ADES, including: (i) a Secondment Agreement; (ii) a Manpower Agreement; and (iii) a Supply Services Agreement. Pursuant to these agreements, the Company, largely through its seconded employees, will provide various services to ADES and ADES will in turn provide various services to ADVantage. As of March 31, 2021, accounts payable to ADES totaled approximately $ 0.2 million, included in “Accounts payable,” on the Consolidated Balance Sheet. There were no outstanding accounts receivable from ADES as of March 31, 2021. We did not have any related party transactions that were not conducted in the ordinary course of business as of March 31, 2021. |
Business Segment and Significan
Business Segment and Significant Customer Information | 3 Months Ended |
Mar. 31, 2021 | |
Segment Reporting [Abstract] | |
Business Segment and Significant Customer Information | 10. Business Segment and Significant Customer Information We aggregate our contract drilling operations into one reportable segment even though we provide contract drilling services with different types of rigs, including jackup rigs and drillships, and in different geographic regions. Our operations are dependent on the global oil and gas industry and our rigs are relocated based on demand for our services and customer requirements. Our customers consist primarily of large international oil and gas companies, national or government-controlled oil and gas companies, and other international exploration and production companies. The Soehanah jackup rig operated under a bareboat charter contract in place as of acquisition. Additionally, for drilling units owned by others, we provide construction supervision services while under construction, preservation management services when stacked and operations and marketing services for operating rigs. Our management business (excluding reimbursable revenue) represented less than 1 % and 1 % of our total revenue for the three months ended March 31, 2021 and 2020, respectively. For the three months ended March 31, 2021 and 2020, a substantial amount of our revenue was derived from countries outside of the United States. Consequently, we are exposed to the risk of changes in economic, political and social conditions inherent in foreign operations. Three customers accounted for approximately 44 %, 36 % and 20 % of consolidated revenue for the three months ended March 31, 2021. Seven customers accounted for approximately 19 %, 15 %, 14 %, 13 %, 12 %, 11 %, and 10 % of consolidated revenue for the three months ended March 31, 2020. Our revenue by country was as follows for the periods indicated (periods representing revenues of less than 10% are included in “Other countries”): Three Months Ended March 31, 2021 2020 (unaudited, in thousands) India $ 8,855 $ 9,681 Qatar 7,197 5,503 Indonesia 3,970 — Congo — 7,581 Gabon — 7,414 Egypt — 6,801 Lebanon — 6,305 Malaysia — 4,939 Other countries (1) 144 3,232 Total revenues $ 20,166 $ 51,456 (1) “Other countries” represent countries in which we operate that individually had operating revenues representing less than 10% of total revenues earned. Our property and equipment, net by country, was as follows as of the dates indicated (as of dates representing property and equipment of less than 10% are included in “Other countries”): March 31, 2021 December 31, 2020 (unaudited, in thousands) International waters $ 217,779 $ 225,484 India 107,685 111,485 Indonesia 67,925 69,434 Other countries (1) 109,276 109,979 Total property and equipment $ 502,665 $ 516,382 (1) “Other countries” represent countries in which we individually had property and equipment, net, representing less than 10% of total property and equipment, net. A substantial portion of our assets are mobile drilling units. Asset locations at the end of the period are not necessarily indicative of the geographic distribution of the revenues generated by such assets during the periods. |
Basis of Presentation and Sig_2
Basis of Presentation and Significant Accounting Policies (Policies) | 3 Months Ended |
Mar. 31, 2021 | |
Accounting Policies [Abstract] | |
Basis of Consolidation | Basis of Consolidation: The accompanying interim consolidated financial information as of March 31, 2021 and for the three months ended March 31, 2021 and 2020 has been prepared without audit, pursuant to the rules and regulations of the SEC, and includes our accounts and those of our majority owned subsidiaries and VIEs (as discussed below). All significant intercompany transactions and accounts have been eliminated. They reflect all adjustments which are, in the opinion of management, necessary for a fair presentation of the financial position and results of operations for the interim periods, on a basis consistent with the annual audited financial statements. Certain information and footnote disclosures normally included in financial statements prepared in accordance with U.S. GAAP have been condensed or omitted pursuant to the rules and regulations of the SEC, although we believe that the disclosures made are adequate to provide for fair presentation. The balance sheet at December 31, 2020 is derived from our December 31, 2020 audited financial statements. These interim consolidated financial statements should be read in conjunction with the consolidated financial statements and the notes thereto included in our Annual Report on Form 10-K for the year ended December 31, 2020, which was filed with the SEC on March 18, 2021. The results of operations for the interim periods are not necessarily indicative of the operating results for the full fiscal year or any future periods. Certain previously reported amounts have been reclassified to conform to the current period presentation. In addition to the consolidation of our majority owned subsidiaries, we also consolidate VIEs when we are determined to be the primary beneficiary of a VIE. Determination of the primary beneficiary of a VIE is based on whether an entity has (1) the power to direct activities that most significantly impact the economic performance of the VIE and (2) the obligation to absorb losses or the right to receive benefits of the VIE that could potentially be significant to the VIE. Our determination of the primary beneficiary of a VIE considers all relationships between us and the VIE. ADVantage is a joint venture company formed to operate deepwater drilling rigs in Egypt. We determined that ADVantage met the criteria of a VIE for accounting purposes because its equity at risk was insufficient to permit it to carry on its activities without additional subordinated financial support from us. We also determined that we are the primary beneficiary for accounting purposes since we are entitled to use ADVantage for deepwater drilling contract opportunities rejected by ADES International Holding Ltd., a London-listed offshore and onshore provider of oil and gas drilling and production services in the Middle East and Africa (“ADES”), and have the (a) power to direct the operating activities associated with the deepwater drilling rigs, which are the activities that most significantly impact the entity’s economic performance, and (b) obligation to absorb losses or the right to receive a majority of the benefits that could be potentially significant to the VIE. As a result, we consolidate ADVantage in our consolidated financial statements, we eliminate intercompany transactions and we present the interests that are not owned by us as “Noncontrolling interests” in our Consolidated Balance Sheet. The carrying amount associated with ADVantage was as follows: March 31, 2021 December 31, 2020 (unaudited, in thousands) Current assets $ 4,173 $ 7,072 Non-current assets 90 84 Current liabilities 910 3,979 Non-current liabilities 945 741 Net carrying amount $ 2,408 $ 2,436 As ADVantage is a majority owned subsidiary of the Company, it serves as a guarantor under the First Lien Indenture. The 9.25% First Lien Notes are secured by a first priority lien on all of the assets of ADVantage, subject to certain exceptions. Creditors’ recourse against ADVantage for liabilities of ADVantage is limited to the assets of ADVantage. See “ Note 9. Supplemental Financial Information ” of these “Notes to Unaudited Consolidated Financial Statements” for additional details regarding related party transactions associated with this joint venture. |
Use of Estimates | Use of Estimates: The preparation of financial statements in accordance with U.S. GAAP requires our management to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. On an ongoing basis, we evaluate our estimates, including those related to property and equipment, income taxes, insurance, employee benefits and contingent liabilities. Actual results could differ from these estimates. |
Cash and Cash Equivalents | Cash and Cash Equivalents: Includes deposits with financial institutions as well as short-term money market instruments with maturities of three months or less when purchased. |
Materials and Supplies | Materials and Supplies: Consists of materials, spare parts, consumables and related supplies for our drilling rigs. We record these materials and supplies at their average cost. |
Property and Equipment | Property and Equipment: Consists of our drilling rigs, furniture and fixtures, computer equipment and capitalized costs for computer software. Drilling rigs are depreciated on a component basis over estimated useful lives ranging from five to 35 years on a straight-line basis as of the date placed in service. Other assets are depreciated upon placement in service over estimated useful lives ranging from three to seven years on a straight-line basis. When assets are sold, retired or otherwise disposed of, the cost and related accumulated depreciation are removed from the balance sheet and the resulting gain or loss is included in “Operating costs” or “General and administrative” expenses on the Consolidated Statement of Operations, depending on the nature of the asset. In the three months ended March 31, 2021, we recognized a net gain of approximately $ 2.7 million related to the sale or retirement of assets. For the three months ended March 31, 2020, the gain/loss related to the sale or retirement of assets was immaterial. We evaluate the realization of property and equipment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. An impairment loss on our property and equipment exists when estimated undiscounted cash flows expected to result from the use of the asset and its eventual disposition are less than its carrying amount. Any impairment loss recognized would be computed as the excess of the asset’s carrying value over the estimated fair value. Estimates of future cash flows require us to make long-term forecasts of our future revenues and operating costs with regard to the assets subject to review. Our business, including the utilization rates and dayrates we receive for our drilling rigs, depends on the level of our customers’ expenditures for oil and gas exploration, development and production expenditures. Oil and gas prices and customers’ expectations of potential changes in these prices, the general outlook for worldwide economic growth, political and social stability in the major oil and gas producing basins of the world, availability of credit and changes in governmental laws and regulations, among many other factors, significantly affect our customers’ levels of expenditures. Sustained declines in or persistent depressed levels of oil and gas prices, worldwide rig counts and utilization, reduced access to credit markets, reduced or depressed sale prices of comparably equipped jackups and drillships and any other significant adverse economic news could require us to evaluate the realization of our drilling rigs. The projections and assumptions used during the fourth quarter of 2020 have not changed significantly as of March 31, 2021; accordingly, no triggering event has occurred to indicate that the carrying value of our drilling rigs may not be recoverable. Interest costs and the amortization of debt financing costs related to the financings of our drilling rigs are capitalized as part of the cost while they are under construction and prior to the commencement of each vessel’s first contract. We did no t capitalize any interest for the reported periods. |
Debt Financing Costs | Debt Financing Costs: Costs incurred with financing debt are deferred and amortized over the term of the related financing facility on a straight-line basis, which approximates the interest method. Debt issuance costs related to a recognized debt liability are presented in the Consolidated Balance Sheet as a direct deduction from the carrying amount of that debt liability. |
Rig and Equipment Certifications | Rig and Equipment Certifications: We are required to obtain regulatory certifications to operate our drilling rigs and certain specified equipment, and must maintain such certifications through periodic inspections and surveys. The costs associated with these certifications, including drydock costs, are deferred and amortized over the corresponding certification periods. |
Revenue Recognition | Revenue Recognition: See “ Note 3. Revenue from Contracts with Customers ” of these “Notes to Unaudited Consolidated Financial Statements” for further information. The activities that primarily drive the revenue earned in our drilling contracts with customers include (i) providing our drilling rig, work crews, related equipment and services necessary to operate the rig, (ii) delivering the drilling rig by mobilizing to and demobilizing from the drill site, and (iii) performing pre-operating activities, including rig preparation activities and/or equipment modifications required for the contract. The integrated drilling services that we perform under each drilling contract represent a single performance obligation satisfied over time and comprised of a series of distinct time increments, or service periods. Dayrate Drilling Revenue. Our drilling contracts generally provide for payment on a dayrate basis, with higher rates for periods when the drilling unit is operating and lower rates or zero rates for periods when drilling operations are interrupted or restricted. The dayrate billed to the customer is determined based on varying rates applicable to the specific activities performed on an hourly basis. Such dayrate consideration is allocated to the distinct hourly increment it relates to within the contract term and therefore, recognized as we perform the daily drilling services. Amortizable Revenue. In connection with certain contracts, we receive lump-sum fees or similar compensation for (i) the mobilization of equipment and personnel prior to the commencement of drilling services, (ii) the demobilization of equipment and personnel upon contract completion and (iii) postponement fees in consideration for the postponement of a contract until a later date. These activities are not considered to be distinct within the context of the contract and therefore, the associated revenue is allocated to the overall single performance obligation. Mobilization fees received prior to commencement of drilling operations are recorded as a contract liability and amortized on a straight‑line basis over the initial contract period. Demobilization fees expected to be received upon contract completion are estimated at contract inception and recognized on a straight-line basis over the initial contract term with an offset to an accretive contract asset. In many contracts, demobilization fees are contingent upon the occurrence or non-occurrence of a future event and the estimate for such revenue may therefore be constrained. Postponement fees received that are contingent upon the occurrence (or non-occurrence) of a future event are recognized on a straight-line basis over the contract term. Fees received for the mobilization or demobilization of equipment and personnel are included in “Contract drilling services” in our Consolidated Statement of Operations. Capital Upgrade/Contract Preparation Revenue. In connection with certain contracts, we receive lump-sum fees or similar compensation for requested capital upgrades to our drilling rigs or for other contract preparation work. These activities are not considered to be distinct within the context of the contract and therefore, fees received are recorded as a contract liability and amortized to contract drilling revenues on a straight-line basis over the initial contract term. Revenues Related to Reimbursable Expenses . We generally receive reimbursements from our customers for the purchase of supplies, equipment, personnel services and other services provided at their request in accordance with a drilling contract or other agreement. We are generally considered a principal in such transactions and therefore, recognize reimbursable revenues and the corresponding costs as we provide the customer‑requested goods and services. We have elected to exclude from the transaction price measurement all taxes assessed by a governmental authority. Disaggregation of Revenue The following tables present our revenue disaggregated by revenue source for the periods indicated: Three Months Ended March 31, 2021 Three Months Ended March 31, 2020 Jackups Deepwater Management Consolidated Jackups Deepwater Management Consolidated (unaudited, in thousands) Dayrate revenue $ 8,898 $ 8,827 $ 98 $ 17,823 $ 23,986 $ 19,731 $ 546 $ 44,263 Charter lease revenue — — — — 476 — — 476 Amortized revenue — — — — 96 506 — 602 Reimbursable revenue 2,322 21 — 2,343 3,225 2,555 335 6,115 Total revenue $ 11,220 $ 8,848 $ 98 $ 20,166 $ 27,783 $ 22,792 $ 881 $ 51,456 Dayrate revenue and amortized revenue for Jackups and Deepwater are included within “Contract drilling services” in our Consolidated Statement of Operations. All other revenue, excluding “Contract termination revenue”, are included within “Reimbursables and other” in our Consolidated Statement of Operations. Accounts Receivable, Contract Liabilities and Contract Costs Accounts receivable are recognized when the right to consideration becomes unconditional based upon contractual billing schedules. Payment terms on customer invoices typically range from 30 to 45 days . We recognize contract liabilities, recorded in other “Other current liabilities” and “Other long-term liabilities”, for prepayments received from customers and for deferred revenue received for mobilization, contract preparation and capital upgrades. Certain direct and incremental costs incurred for contract preparation, initial mobilization and modifications of contracted rigs represent contract fulfillment costs as they relate directly to a contract, enhance resources that will be used to satisfy our performance obligations in the future and are expected to be recovered. These costs are deferred as a current or noncurrent asset depending on the length of the initial contract term and are amortized on a straight-line basis to operating costs as services are rendered over the initial term of the related drilling contract. Costs incurred for capital upgrades are capitalized and depreciated over the useful life of the asset. Costs incurred for the demobilization of rigs at contract completion are recognized as incurred during the demobilization process. Costs incurred to mobilize a rig without a contract are expensed as incurred. The following table provides information about contract cost assets and contract revenue liabilities from contracts with customers: March 31, 2021 December 31, 2020 (unaudited, in thousands) Current contract cost assets $ 4,965 $ 2,905 Current contract revenue liabilities 10,759 5,100 Significant changes in contract cost assets and contract revenue liabilities during the three months ended March 31, 2021 are as follows: Contract Costs Contract Revenues (unaudited, in thousands) Balance as of December 31, 2020 $ 2,905 $ 5,100 Increase (decrease) due to contractual changes 2,060 5,659 Balance as of March 31, 2021 (1) $ 4,965 $ 10,759 (1) We expect to recognize contract revenues of approximately $ 6.9 million during the remaining nine months of 2021 and $ 3.9 million thereafter related to unsatisfied performance obligations existing as of March 31, 2021. We have elected to utilize an optional exemption that permits us to exclude disclosure of the estimated transaction price related to the variable portion of unsatisfied performance obligations at the end of the reporting period, as our transaction price is based on a single performance obligation consisting of a series of distinct hourly increments, the variability of which will be resolved at the time of the future services. |
Income Taxes | Income Taxes: Income taxes are provided for based upon the tax laws and rates in effect in the countries in which our operations are conducted and income is earned. Deferred income tax assets and liabilities are computed for differences between the financial statement basis and tax basis of assets and liabilities that will result in future taxable or tax deductible amounts and are based on enacted tax laws and rates applicable to the periods in which the differences are expected to affect taxable income. We do not establish deferred tax liabilities for certain of our foreign earnings that we intend to indefinitely reinvest to finance foreign activities. Valuation allowances are established when necessary to reduce deferred income tax assets to the amount expected to be realized. We recognize interest and penalties related to income taxes as a component of income tax expense. |
Concentrations of Credit Risk | Concentrations of Credit Risk: Financial instruments that potentially subject us to a significant concentration of credit risk consist primarily of cash and cash equivalents, restricted cash and accounts receivable. We maintain deposits in federally insured financial institutions in excess of federally insured limits. We monitor the credit ratings and our concentration of risk with these financial institutions on a continuing basis to safeguard our cash deposits. We have a limited number of key customers, who are primarily large international oil and gas operators, national oil companies and other international oil and gas companies. Our contracts provide for monthly billings as services are performed and we monitor compliance with contract payment terms on an ongoing basis. Payment terms on customer invoices typically range from 30 to 45 days . Outstanding receivables beyond payment terms are promptly investigated and discussed with the specific customer. Credit Losses – Accounts Receivable: The allowance for doubtful accounts is based on the Company’s assessment of the collectability of customer accounts. Current estimates of expected credit losses consider factors such as the historical experience and credit quality of our customers. The Company considers historical loss information as the most reasonable basis on which to determine expected credit losses unless current or forecasted future conditions for customers (or customer groups) indicate that risk characteristics have changed. We also considered the impact of the COVID-19 pandemic and the associated oil price and market share volatility on our allowance for doubtful accounts (see “Ongoing Impact of COVID-19 and Declines in the Demand for Oil and Gas” set forth above in “ Note 1. Organization and Recent Events ” of these “Notes to Unaudited Consolidated Financial Statements”) The allowance for doubtful accounts on our trade receivables was $ 5.0 million as of each of March 31, 2021 and December 31, 2020, respectively. This amount represents a customer’s decision not to pay us for days impacted by what we believe were force majeure and other similar events for which we would still be entitled to receive payment under the applicable contract. We disagree with the customer's decision and are currently evaluating our remedies, if any, under the applicable contract. |
Earnings (Loss) per Share | Earnings (loss) per Share: We compute basic and diluted EPS in accordance with the two-class method. We include restricted stock units granted to employees that contain non-forfeitable rights to dividends as such grants are considered participating securities. Basic earnings (loss) per share are based on the weighted average number of Ordinary Shares outstanding during the applicable period. Diluted EPS are computed based on the weighted average number of Ordinary Shares and ordinary share equivalents outstanding in the applicable period, as if all potentially dilutive securities were converted into Ordinary Shares (using the treasury stock method). The following is a reconciliation of the number of shares used for the basic and diluted EPS computations Three Months Ended March 31, 2021 2020 (In thousands) Weighted average Ordinary Shares outstanding for basic EPS 13,115 13,115 Restricted share equity awards — — Adjusted weighted average Ordinary Shares outstanding for diluted EPS 13,115 13,115 The following sets forth the number of shares excluded from diluted EPS computations: Three Months Ended March 31, 2021 2020 (In thousands) Restricted share equity awards 218 194 Future potentially dilutive Ordinary Shares excluded from diluted EPS 218 194 |
Functional Currency | Functional Currency: We consider USD to be the functional currency for all of our operations since the majority of our revenues and expenditures are denominated in USD, which limits our exposure to currency exchange rate fluctuations. We recognize currency exchange rate gains and losses in “Other, net” in our Consolidated Statement of Operations. For the three months ended March 31, 2021 and 2020, we recognized a net loss of approximately $ 0.6 million and a net gain of approximately $ 0.1 million, respectively, related to currency exchange rates. |
Fair Value of Financial Instruments | Fair Value of Financial Instruments: The fair value of our short-term financial assets and liabilities approximates the carrying amounts represented in the balance sheet principally due to the short-term nature or floating rate nature of these instruments. As of March 31, 2021, the fair value of the 9.25% First Lien Notes was approximately $ 293.6 million based on quoted market prices in a less active market, a Level 2 measurement. |
Share-based Compensation | Share-based Compensation: TBGs granted under the 2016 Amended MIP vest annually, ratably over four years ; however, accelerated vesting is provided for in the event of a QLE. Otherwise, the settlement of any vested TBGs occurs upon the seventh anniversary of the Effective Date. PBGs granted under the 2016 Amended MIP contain vesting eligibility provisions tied to the earlier of a QLE or seven years from the Effective Date. Upon the occurrence of a vesting eligibility event, the number of PBGs that actually vest will be dependent on the achievement of pre-determined TEV targets specified in the grants. Both the TBGs and PBGs were classified as liabilities consistent with the classification of the underlying securities prior to the Conversion. Following the Conversion, outstanding TBGs and PBGs were subject to modification accounting and were re-classified as equity awards. Under the provisions of ASC 718 Compensation – Stock Compensation share-based compensation expense is recognized over the requisite service period from the grant date to the fourth year vest date for TBGs. For PBGs, expense will be recognized when it is probable that the TEV targets will be met. Once it is probable the performance condition will be met, compensation expense based on the fair value of the PBGs at the conversion date of the Convertible Notes will be recognized for the service period completed to the seventh anniversary of the Effective Date for PBGs. |
Noncontrolling Interest | Noncontrolling Interest: Noncontrolling interests represent the equity investments of the minority owner in ADVantage, a joint venture with ADES that we consolidate in our financial statements. |
Recently Adopted Accounting Standards | Recently Adopted Accounting Standards: In December 2019, the FASB issued ASU No. 2019-12, “Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes.” This ASU simplifies the accounting for income taxes by removing certain exceptions to the general principles in Topic 740 and also simplifies and improves consistent application of GAAP for other areas of Topic 740 by clarifying and amending existing guidance. We adopted this standard on January 1, 2021, and such adoption did not have a material impact on our consolidated financial statements. |
Recently Issued Accounting Standards | Recently Issued Accounting Standards: There have been no new accounting pronouncements not yet effective that have significance, or potential significance, with respect to our consolidated financial statements. |
Basis of Presentation and Sig_3
Basis of Presentation and Significant Accounting Policies (Tables) | 3 Months Ended |
Mar. 31, 2021 | |
Accounting Policies [Abstract] | |
Schedule of Carrying Amounts of Assets and Liabilities of VIE | The carrying amount associated with ADVantage was as follows: March 31, 2021 December 31, 2020 (unaudited, in thousands) Current assets $ 4,173 $ 7,072 Non-current assets 90 84 Current liabilities 910 3,979 Non-current liabilities 945 741 Net carrying amount $ 2,408 $ 2,436 |
Schedule of Reconciliation of Number of Shares Used for Basic and Diluted EPS Computations | The following is a reconciliation of the number of shares used for the basic and diluted EPS computations Three Months Ended March 31, 2021 2020 (In thousands) Weighted average Ordinary Shares outstanding for basic EPS 13,115 13,115 Restricted share equity awards — — Adjusted weighted average Ordinary Shares outstanding for diluted EPS 13,115 13,115 |
Schedule of Number of Shares Excluded from Diluted EPS Computations | The following sets forth the number of shares excluded from diluted EPS computations: Three Months Ended March 31, 2021 2020 (In thousands) Restricted share equity awards 218 194 Future potentially dilutive Ordinary Shares excluded from diluted EPS 218 194 |
Revenue from Contracts with C_2
Revenue from Contracts with Customers (Tables) | 3 Months Ended |
Mar. 31, 2021 | |
Revenue From Contract With Customer [Abstract] | |
Schedule of Disaggregated by Revenue | The following tables present our revenue disaggregated by revenue source for the periods indicated: Three Months Ended March 31, 2021 Three Months Ended March 31, 2020 Jackups Deepwater Management Consolidated Jackups Deepwater Management Consolidated (unaudited, in thousands) Dayrate revenue $ 8,898 $ 8,827 $ 98 $ 17,823 $ 23,986 $ 19,731 $ 546 $ 44,263 Charter lease revenue — — — — 476 — — 476 Amortized revenue — — — — 96 506 — 602 Reimbursable revenue 2,322 21 — 2,343 3,225 2,555 335 6,115 Total revenue $ 11,220 $ 8,848 $ 98 $ 20,166 $ 27,783 $ 22,792 $ 881 $ 51,456 |
Schedule of Contract Cost Assets and Contract Revenue Liabilities from Contracts with Customers | The following table provides information about contract cost assets and contract revenue liabilities from contracts with customers: March 31, 2021 December 31, 2020 (unaudited, in thousands) Current contract cost assets $ 4,965 $ 2,905 Current contract revenue liabilities 10,759 5,100 |
Schedule of Significant Changes in Contract Cost Assets and Contract Revenue Liabilities | Significant changes in contract cost assets and contract revenue liabilities during the three months ended March 31, 2021 are as follows: Contract Costs Contract Revenues (unaudited, in thousands) Balance as of December 31, 2020 $ 2,905 $ 5,100 Increase (decrease) due to contractual changes 2,060 5,659 Balance as of March 31, 2021 (1) $ 4,965 $ 10,759 (1) We expect to recognize contract revenues of approximately $ 6.9 million during the remaining nine months of 2021 and $ 3.9 million thereafter related to unsatisfied performance obligations existing as of March 31, 2021. |
Leases (Tables)
Leases (Tables) | 3 Months Ended |
Mar. 31, 2021 | |
Leases [Abstract] | |
Components of Lease Expense | The components of lease expense were as follows: Three Months Ended March 31, (unaudited, in thousands) Classification in the Consolidated Statement of Operations 2021 2020 Operating lease cost (1) Operating costs $ 902 $ 966 Operating lease cost (1) General and administrative 152 152 Sublease income Operating costs ( 121 ) ( 121 ) Sublease income General and administrative ( 62 ) ( 62 ) Total operating lease cost $ 871 $ 935 (1) Short-term lease costs were approximately $ 0.1 million during the three months ended March 31, 2021 and 2020, respectively. Operating cash flows used for operating leases approximates lease expense. |
Schedule of Operating Leases Included in Consolidated Balance Sheet | (unaudited, in thousands) Classification in the Consolidated Balance Sheet March 31, 2021 December 31, 2020 Assets: Operating lease assets Operating lease ROU assets $ 3,583 $ 3,997 Total leased assets $ 3,583 $ 3,997 Liabilities: Current operating Other current liabilities $ 1,979 $ 2,038 Noncurrent operating Other long-term liabilities 2,028 2,371 Total lease liabilities $ 4,007 $ 4,409 |
Schedule of Maturities of Operating Lease Liabilities | As of March 31, 2021, maturities of lease liabilities were as follows: (unaudited, in thousands) Operating Leases Remaining nine months of 2021 $ 1,746 2022 1,705 2023 949 2024 — 2025 — Total future lease payments $ 4,400 Less imputed interest ( 393 ) Present value of lease obligations $ 4,007 |
Debt (Tables)
Debt (Tables) | 3 Months Ended |
Mar. 31, 2021 | |
Debt Disclosure [Abstract] | |
Long-term Debt | Our debt was composed of the following as of the dates indicated: March 31, 2021 December 31, 2020 (unaudited, in thousands) 9.25% First Lien Notes, net of financing costs of $ 4,371 and $ 4,781 , respectively $ 345,629 $ 345,219 Less current maturities of long-term debt — — Long-term debt, net $ 345,629 $ 345,219 |
Supplemental Financial Inform_2
Supplemental Financial Information (Tables) | 3 Months Ended |
Mar. 31, 2021 | |
Balance Sheet Related Disclosures [Abstract] | |
Prepaid Expenses and Other Current Assets | Prepaid Expenses and Other Current Assets Prepaid expenses and other current assets consisted of the following as of the dates indicated: March 31, 2021 December 31, 2020 (unaudited, in thousands) Sales tax receivable $ 5,738 $ 6,797 Assets held for sale (1) — 10,113 Other receivables 1,232 1,517 Income tax receivable 853 826 Prepaid insurance 859 386 Current deferred contract costs 4,965 2,905 Other 6,891 6,607 $ 20,538 $ 29,151 (1) Includes the aggregate carrying amount of the Titanium Explorer , along with related assets, as of December 31, 2020. See “ Note 1. Organization and Recent Events ” of these “Notes to Unaudited Consolidated Financial Statements” for additional details regarding the Purchase and Sale Agreement to sell the Titanium Explorer . |
Property and Equipment, Net | Property and equipment, net, consisted of the following as of the dates indicated: March 31, 2021 December 31, 2020 (unaudited, in thousands) Drilling equipment $ 774,848 $ 774,813 Assets under construction 931 561 Office and technology equipment 18,405 18,405 Leasehold improvements 1,165 1,165 795,349 794,944 Accumulated depreciation ( 292,684 ) ( 278,562 ) Property and equipment, net $ 502,665 $ 516,382 |
Other Assets | Other assets consisted of the following as of the dates indicated: March 31, 2021 December 31, 2020 (unaudited, in thousands) Noncurrent restricted cash $ 4,058 $ 4,546 Deferred certification costs 5,498 4,535 Deferred income taxes 2,033 1,923 Other noncurrent assets 2,641 1,122 $ 14,230 $ 12,126 |
Other Current Liabilities | Other current liabilities consisted of the following as of the dates indicated: Other current liabilities March 31, 2021 December 31, 2020 (unaudited, in thousands) Interest $ 12,229 $ 4,139 Compensation (1) 6,371 7,128 Income taxes payable 5,483 2,951 Current deferred revenue 10,759 5,100 Current portion of operating lease liabilities 1,979 2,038 Other 3,173 3,378 $ 39,994 $ 24,734 (1) Includes $ 3.4 million as of March 31, 2021 and $ 2.1 million as of December 31, 2020 related to cash awards granted to certain key employees of the Company pursuant to underlying award agreements and issued under the 2016 Amended MIP. |
Other Long-term Liabilities | Other Long-term liabilities consisted of the following as of the dates indicated: March 31, 2021 December 31, 2020 (unaudited, in thousands) Deferred income taxes $ 929 $ 970 2016 MIP - Dividend Equivalents (1) 8,766 8,006 Noncurrent operating lease liabilities 2,028 2,371 Other non-current liabilities 2,570 3,664 $ 14,293 $ 15,011 (1) Dividend Equivalents on vested TBGs are payable on settlement of the applicable award. |
Reconciliation of Cash, Cash Equivalents and Restricted Cash | The following table provides a reconciliation of cash, cash equivalents and restricted cash reported within the Consolidated Balance Sheet that sum to the total of the same amounts shown in the Consolidated Statement of Cash Flows as of the dates indicated: March 31, 2021 December 31, 2020 (unaudited, in thousands) Cash and cash equivalents $ 140,381 $ 141,945 Restricted cash 7,798 7,996 Restricted cash included within Other Assets 4,058 4,546 Total cash, cash equivalents and restricted cash shown in the Consolidated Statements of Cash Flows $ 152,237 $ 154,487 |
Business Segment and Signific_2
Business Segment and Significant Customer Information (Tables) | 3 Months Ended |
Mar. 31, 2021 | |
Segment Reporting [Abstract] | |
Summary of Revenue by Country | Our revenue by country was as follows for the periods indicated (periods representing revenues of less than 10% are included in “Other countries”): Three Months Ended March 31, 2021 2020 (unaudited, in thousands) India $ 8,855 $ 9,681 Qatar 7,197 5,503 Indonesia 3,970 — Congo — 7,581 Gabon — 7,414 Egypt — 6,801 Lebanon — 6,305 Malaysia — 4,939 Other countries (1) 144 3,232 Total revenues $ 20,166 $ 51,456 (1) “Other countries” represent countries in which we operate that individually had operating revenues representing less than 10% of total revenues earned. |
Schedule of Property and Equipment, Net by Country | Our property and equipment, net by country, was as follows as of the dates indicated (as of dates representing property and equipment of less than 10% are included in “Other countries”): March 31, 2021 December 31, 2020 (unaudited, in thousands) International waters $ 217,779 $ 225,484 India 107,685 111,485 Indonesia 67,925 69,434 Other countries (1) 109,276 109,979 Total property and equipment $ 502,665 $ 516,382 (1) “Other countries” represent countries in which we individually had property and equipment, net, representing less than 10% of total property and equipment, net. |
Organization and Recent Events
Organization and Recent Events - Additional Information (Detail) $ in Thousands | 3 Months Ended | 12 Months Ended | |
Mar. 31, 2021USD ($)Deepwater | Mar. 31, 2020USD ($) | Dec. 31, 2020USD ($) | |
Organization And Recent Events [Line Items] | |||
Property held for sale | $ | $ 13,557 | $ 0 | |
Titanium Explorer | |||
Organization And Recent Events [Line Items] | |||
Property held for sale | $ | $ 13,800 | ||
Seadrill Partners | Operations, Management and Marketing Agreements | |||
Organization And Recent Events [Line Items] | |||
Number of deepwater floaters owned | 4 | ||
Seadrill Partners | Operations, Management and Marketing Agreements | Drillships | |||
Organization And Recent Events [Line Items] | |||
Number of deepwater floaters owned | 2 | ||
Seadrill Partners | Operations, Management and Marketing Agreements | Semisubmersibles | |||
Organization And Recent Events [Line Items] | |||
Number of deepwater floaters owned | 2 |
Basis of Presentation and Sig_4
Basis of Presentation and Significant Accounting Policies - Schedule of Carrying Amounts of Assets and Liabilities of VIE (Detail) - USD ($) $ in Thousands | Mar. 31, 2021 | Dec. 31, 2020 |
Variable Interest Entity [Line Items] | ||
Current assets | $ 243,320 | $ 253,670 |
Current liabilities | 64,582 | 50,200 |
ADVantage | ||
Variable Interest Entity [Line Items] | ||
Current assets | 4,173 | 7,072 |
Non-current assets | 90 | 84 |
Current liabilities | 910 | 3,979 |
Non-current liabilities | 945 | 741 |
Net carrying amount | $ 2,408 | $ 2,436 |
Basis of Presentation and Sig_5
Basis of Presentation and Significant Accounting Policies - Additional Information (Detail) - USD ($) | 3 Months Ended | ||
Mar. 31, 2021 | Mar. 31, 2020 | Dec. 31, 2020 | |
Basis Of Presentation And Significant Accounting Policies [Line Items] | |||
Net gain (loss) on sale or retirement of assets | $ 2,733,000 | $ 0 | |
Capitalized interest | 0 | 0 | |
Allowance for doubtful accounts | 5,000,000 | $ 5,000,000 | |
Foreign currency transaction gain (loss) | $ (600,000) | $ 100,000 | |
TBGs | |||
Basis Of Presentation And Significant Accounting Policies [Line Items] | |||
Vesting period | 4 years | ||
Terms of TBGs vesting and settlement | TBGs granted under the 2016 Amended MIP vest annually, ratably over four years; however, accelerated vesting is provided for in the event of a QLE. Otherwise, the settlement of any vested TBGs occurs upon the seventh anniversary of the Effective Date. | ||
PBGs | |||
Basis Of Presentation And Significant Accounting Policies [Line Items] | |||
Vesting period | 7 years | ||
9.25% First Lien Notes | |||
Basis Of Presentation And Significant Accounting Policies [Line Items] | |||
Debt instrument, interest rate | 9.25% | ||
Fair value of notes outstanding | $ 293,600,000 | ||
Minimum | |||
Basis Of Presentation And Significant Accounting Policies [Line Items] | |||
Term of customer invoice payment | 30 days | ||
Maximum | |||
Basis Of Presentation And Significant Accounting Policies [Line Items] | |||
Term of customer invoice payment | 45 days | ||
Drilling Equipment | Minimum | |||
Basis Of Presentation And Significant Accounting Policies [Line Items] | |||
Property, plant and equipment, useful lives | 5 years | ||
Drilling Equipment | Maximum | |||
Basis Of Presentation And Significant Accounting Policies [Line Items] | |||
Property, plant and equipment, useful lives | 35 years | ||
Office and Technology Equipment | Minimum | |||
Basis Of Presentation And Significant Accounting Policies [Line Items] | |||
Property, plant and equipment, useful lives | 3 years | ||
Office and Technology Equipment | Maximum | |||
Basis Of Presentation And Significant Accounting Policies [Line Items] | |||
Property, plant and equipment, useful lives | 7 years |
Basis of Presentation and Sig_6
Basis of Presentation and Significant Accounting Policies - Schedule of Reconciliation of Number of Shares Used For Basic and Diluted EPS Computation (Detail) - shares shares in Thousands | 3 Months Ended | |
Mar. 31, 2021 | Mar. 31, 2020 | |
Basis Of Presentation And Significant Accounting Policies [Line Items] | ||
Weighted average Ordinary Shares outstanding for basic EPS | 13,115 | 13,115 |
Adjusted weighted average Ordinary Shares outstanding for diluted EPS | 13,115 | 13,115 |
Restricted Shares Equity Award | ||
Basis Of Presentation And Significant Accounting Policies [Line Items] | ||
Restricted share equity awards | 0 | 0 |
Basis of Presentation and Sig_7
Basis of Presentation and Significant Accounting Policies - Schedule of Number of Shares Excluded from Diluted EPS Computation (Detail) - shares shares in Thousands | 3 Months Ended | |
Mar. 31, 2021 | Mar. 31, 2020 | |
Basis Of Presentation And Significant Accounting Policies [Line Items] | ||
Future potentially dilutive Ordinary Shares excluded from diluted EPS | 218 | 194 |
Restricted Shares Equity Award | ||
Basis Of Presentation And Significant Accounting Policies [Line Items] | ||
Future potentially dilutive Ordinary Shares excluded from diluted EPS | 218 | 194 |
Revenue from Contracts with C_3
Revenue from Contracts with Customers - Additional Information (Detail) | 3 Months Ended |
Mar. 31, 2021 | |
Minimum | |
Disaggregation Of Revenue [Line Items] | |
Term of customer invoice payment | 30 days |
Maximum | |
Disaggregation Of Revenue [Line Items] | |
Term of customer invoice payment | 45 days |
Revenue from Contracts with C_4
Revenue from Contracts with Customers - Schedule of Disaggregated by Revenue (Detail) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2021 | Mar. 31, 2020 | |
Disaggregation Of Revenue [Line Items] | ||
Total revenue | $ 20,166 | $ 51,456 |
Jackups | ||
Disaggregation Of Revenue [Line Items] | ||
Total revenue | 11,220 | 27,783 |
Deepwater | ||
Disaggregation Of Revenue [Line Items] | ||
Total revenue | 8,848 | 22,792 |
Management | ||
Disaggregation Of Revenue [Line Items] | ||
Total revenue | 98 | 881 |
Dayrate Revenue | ||
Disaggregation Of Revenue [Line Items] | ||
Total revenue | 17,823 | 44,263 |
Dayrate Revenue | Jackups | ||
Disaggregation Of Revenue [Line Items] | ||
Total revenue | 8,898 | 23,986 |
Dayrate Revenue | Deepwater | ||
Disaggregation Of Revenue [Line Items] | ||
Total revenue | 8,827 | 19,731 |
Dayrate Revenue | Management | ||
Disaggregation Of Revenue [Line Items] | ||
Total revenue | 98 | 546 |
Charter Lease Revenue | ||
Disaggregation Of Revenue [Line Items] | ||
Total revenue | 0 | 476 |
Charter Lease Revenue | Jackups | ||
Disaggregation Of Revenue [Line Items] | ||
Total revenue | 0 | 476 |
Charter Lease Revenue | Deepwater | ||
Disaggregation Of Revenue [Line Items] | ||
Total revenue | 0 | 0 |
Charter Lease Revenue | Management | ||
Disaggregation Of Revenue [Line Items] | ||
Total revenue | 0 | 0 |
Amortized Revenue | ||
Disaggregation Of Revenue [Line Items] | ||
Total revenue | 0 | 602 |
Amortized Revenue | Jackups | ||
Disaggregation Of Revenue [Line Items] | ||
Total revenue | 0 | 96 |
Amortized Revenue | Deepwater | ||
Disaggregation Of Revenue [Line Items] | ||
Total revenue | 0 | 506 |
Amortized Revenue | Management | ||
Disaggregation Of Revenue [Line Items] | ||
Total revenue | 0 | 0 |
Reimbursable Revenue | ||
Disaggregation Of Revenue [Line Items] | ||
Total revenue | 2,343 | 6,115 |
Reimbursable Revenue | Jackups | ||
Disaggregation Of Revenue [Line Items] | ||
Total revenue | 2,322 | 3,225 |
Reimbursable Revenue | Deepwater | ||
Disaggregation Of Revenue [Line Items] | ||
Total revenue | 21 | 2,555 |
Reimbursable Revenue | Management | ||
Disaggregation Of Revenue [Line Items] | ||
Total revenue | $ 0 | $ 335 |
Revenue from Contracts with C_5
Revenue from Contracts with Customers - Schedule of Contract Cost Assets and Contract Revenue Liabilities from Contracts with Customers (Detail) - USD ($) $ in Thousands | Mar. 31, 2021 | Dec. 31, 2020 |
Revenue From Contract With Customer [Abstract] | ||
Current contract cost assets | $ 4,965 | $ 2,905 |
Current contract revenue liabilities | $ 10,759 | $ 5,100 |
Revenue from Contracts with C_6
Revenue from Contracts with Customers - Schedule of Significant Changes in Contract Cost Assets and Contract Revenue Liabilities (Detail) $ in Thousands | 3 Months Ended |
Mar. 31, 2021USD ($) | |
Revenue From Contract With Customer [Abstract] | |
Beginning balance, contract costs | $ 2,905 |
Increase (decrease) due to contractual changes, contract costs | 2,060 |
Ending balance, contract costs | 4,965 |
Beginning balance, contract revenues | 5,100 |
Increase (decrease) due to contractual changes, contract revenues | 5,659 |
Ending balance, contract revenues | $ 10,759 |
Revenue from Contracts with C_7
Revenue from Contracts with Customers - Schedule of Significant Changes in Contract Cost Assets and Contract Revenue Liabilities (Parenthetical) (Detail) $ in Millions | Mar. 31, 2021USD ($) |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date: 2021-04-01 | |
Disaggregation Of Revenue [Line Items] | |
Contract revenues, remaining performance obligation | $ 6.9 |
Contract revenues, remaining performance obligation, expected timing of satisfaction, period | 9 months |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date: 2022-01-01 | |
Disaggregation Of Revenue [Line Items] | |
Contract revenues, remaining performance obligation | $ 3.9 |
Contract revenues, remaining performance obligation, expected timing of satisfaction, period |
Leases - Components of Lease Ex
Leases - Components of Lease Expense (Detail) - USD ($) $ in Thousands | 3 Months Ended | ||
Mar. 31, 2021 | Mar. 31, 2020 | ||
Lessee Lease Description [Line Items] | |||
Total operating lease cost | $ 871 | $ 935 | |
Operating Costs | |||
Lessee Lease Description [Line Items] | |||
Total operating lease cost | [1] | 902 | 966 |
Sublease income | (121) | (121) | |
General and Administrative | |||
Lessee Lease Description [Line Items] | |||
Total operating lease cost | [1] | 152 | 152 |
Sublease income | $ (62) | $ (62) | |
[1] | Short-term lease costs were approximately $ 0.1 million during the three months ended March 31, 2021 and 2020, respectively. Operating cash flows used for operating leases approximates lease expense. |
Leases - Components of Lease _2
Leases - Components of Lease Expense (Parenthetical) (Detail) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2021 | Mar. 31, 2020 | |
Leases [Abstract] | ||
Short term lease costs | $ 0.1 | $ 0.1 |
Leases - Schedule of Operating
Leases - Schedule of Operating Leases Included in Consolidated Balance Sheet (Detail) - USD ($) $ in Thousands | Mar. 31, 2021 | Dec. 31, 2020 |
Assets: | ||
Operating lease assets | $ 3,583 | $ 3,997 |
Operating Lease, Right-of-Use Asset, Statement of Financial Position [Extensible List] | Operating lease assets | Operating lease assets |
Liabilities: | ||
Current operating | $ 1,979 | $ 2,038 |
Operating Lease, Liability, Current, Statement of Financial Position [Extensible List] | Other current liabilities | Other current liabilities |
Noncurrent operating | $ 2,028 | $ 2,371 |
Operating Lease, Liability, Noncurrent, Statement of Financial Position [Extensible List] | us-gaap:LiabilitiesOtherThanLongtermDebtNoncurrent | us-gaap:LiabilitiesOtherThanLongtermDebtNoncurrent |
Total lease liabilities | $ 4,007 | $ 4,409 |
Leases - Schedule of Maturities
Leases - Schedule of Maturities of Operating Lease Liabilities (Detail) - USD ($) $ in Thousands | Mar. 31, 2021 | Dec. 31, 2020 |
Leases [Abstract] | ||
Remaining nine months of 2021 | $ 1,746 | |
2022 | 1,705 | |
2023 | 949 | |
2024 | 0 | |
2025 | 0 | |
Total future lease payments | 4,400 | |
Less imputed interest | (393) | |
Present value of lease obligations | $ 4,007 | $ 4,409 |
Leases - Additional Information
Leases - Additional Information (Detail) $ in Millions | 3 Months Ended |
Mar. 31, 2021USD ($) | |
Leases [Abstract] | |
Weighted average discount rate for operating leases | 9.25% |
Weighted average remaining lease term for operating leases | 2 years 1 month 13 days |
ROU assets obtained in exchange of operating lease liability | $ 0.6 |
Debt - Long-Term Debt (Detail)
Debt - Long-Term Debt (Detail) - USD ($) $ in Thousands | Mar. 31, 2021 | Dec. 31, 2020 |
Debt Instrument [Line Items] | ||
Less current maturities of long-term debt | $ 0 | $ 0 |
Long-term debt, net | 345,629 | 345,219 |
9.25% First Lien Notes | ||
Debt Instrument [Line Items] | ||
Long-term debt | $ 345,629 | $ 345,219 |
Debt - Long-Term Debt (Parenthe
Debt - Long-Term Debt (Parenthetical) (Detail) - USD ($) $ in Thousands | Mar. 31, 2021 | Dec. 31, 2020 |
9.25% First Lien Notes | ||
Debt Instrument [Line Items] | ||
Debt financing cost | $ 4,371 | $ 4,781 |
Debt - 9.25% First Lien Notes -
Debt - 9.25% First Lien Notes - Additional Information (Detail) - 9.25% First Lien Notes - USD ($) $ in Millions | Nov. 30, 2018 | Mar. 31, 2021 |
Debt Instrument [Line Items] | ||
Issuance of debt | $ 350 | |
Debt instrument, interest rate | 9.25% | |
Letters of credit | $ 11 | |
New Letter of Credit Facility | ||
Debt Instrument [Line Items] | ||
Line of credit facility, maximum borrowing capacity | 50 | |
First Payment [Member] | Maximum | ||
Debt Instrument [Line Items] | ||
Repayments of debt | $ 50 |
Shareholders' Equity - Addition
Shareholders' Equity - Additional Information (Detail) - USD ($) | Dec. 04, 2019 | Mar. 31, 2021 | Mar. 31, 2020 | Dec. 31, 2020 | Feb. 10, 2016 |
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |||||
Ordinary shares, shares authorized | 50,000,000 | 50,000,000 | |||
Ordinary shares, shares issued | 13,115,026 | 13,115,026 | 5,000,053 | ||
Additional ordinary shares issued for convertible notes | 8,114,977 | ||||
Ordinary shares, shares outstanding | 13,115,026 | 13,115,026 | |||
Number of shares granted | 0 | 0 | |||
Time-based Restricted Stock Unit | |||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |||||
Vesting period | 4 years | ||||
Number of previously granted shares vested in period | 18,224 | ||||
Share based compensation expense | $ 300,000 | $ 700,000 | |||
Time-based Restricted Stock Unit | Special Cash Distribution | |||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |||||
Dividends cash | $ 8,800,000 | ||||
Performance-based Restricted Stock Unit | |||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |||||
Vesting period | 7 years | ||||
Share based compensation expense | $ 0 |
Income Taxes - Additional Infor
Income Taxes - Additional Information (Detail) | 3 Months Ended |
Mar. 31, 2021 | |
Minimum | |
Income Tax Contingency [Line Items] | |
Open tax year | 2010 |
Commitments and Contingencies -
Commitments and Contingencies - Additional Information (Detail) R$ in Millions, $ in Millions | Mar. 25, 2020USD ($) | Mar. 04, 2020USD ($) | Feb. 13, 2019USD ($) | Apr. 27, 2018BRL (R$)Defendant | Apr. 27, 2018USD ($)Defendant | Mar. 31, 2021 | Mar. 31, 2020USD ($) |
Brazil Improbity Action | Brazil | |||||||
Loss Contingencies [Line Items] | |||||||
Allegations - description | On April 27, 2018, the Company was added as an additional defendant in a legal proceeding (the “Improbity Action”), initiated by the Brazilian Federal Prosecutor against certain individuals, including an executive of Petrobras and two political lobbyists, in connection with the contracting of the Titanium Explorer drillship to Petrobras under the Drilling Contract, with the Brazilian Government and Petrobras as plaintiffs. Vantage is alleged to have been involved in and benefitted from the purported bribery scheme at Petrobras through Hamylton Padilha, the Brazilian agent our former parent company, VDC, used in the contracting of the Titanium Explorer drillship to Petrobras, and Mr. Hsin-Chi Su, a former member of VDC’s board of directors and a significant shareholder of VDC. We first became aware of the legal proceeding on July 19, 2018 as it was previously under seal | ||||||
Loss contingency, damages claimed | R$ 102.8 | $ 18.3 | |||||
Court authorization to seizure and freezing assets of defendants | $ 73.4 | ||||||
Loss contingency, number of defendants | Defendant | 3 | 3 | |||||
Loss contingency, actions taken by court | On February 13, 2019, the Company learned that the Brazilian Federal Prosecutor had previously requested mutual legal assistance from the U.S. DOJ pursuant to the United Nations Convention against Corruption of 2003 to obtain a freezing order against the Company’s U.S. assets in the approximate amount of $73.4 million. | ||||||
Brazil Improbity Action | United States | |||||||
Loss Contingencies [Line Items] | |||||||
Court authorization to seizure and freezing assets of defendants | $ 73.4 | ||||||
Restructuring Agreement and the Associated Settlement Agreement | |||||||
Loss Contingencies [Line Items] | |||||||
Litigation settlement, amount awarded to other party | $ 15 | ||||||
Agreement settlement amount paid | $ 15 | ||||||
Restructuring Agreement and the Associated Settlement Agreement | Other Income | |||||||
Loss Contingencies [Line Items] | |||||||
Gain (loss) related to litigation settlement | $ 2.3 |
Supplemental Financial Inform_3
Supplemental Financial Information - Prepaid Expenses and Other Current Assets (Detail) - USD ($) $ in Thousands | Mar. 31, 2021 | Dec. 31, 2020 | |
Prepaid Expense And Other Assets Current [Abstract] | |||
Sales tax receivable | $ 5,738 | $ 6,797 | |
Assets held for sale | [1] | 0 | 10,113 |
Other receivables | 1,232 | 1,517 | |
Income tax receivable | 853 | 826 | |
Prepaid insurance | 859 | 386 | |
Current deferred contract costs | 4,965 | 2,905 | |
Other | 6,891 | 6,607 | |
Prepaid expenses and other current assets | $ 20,538 | $ 29,151 | |
[1] | Includes the aggregate carrying amount of the Titanium Explorer , along with related assets, as of December 31, 2020. See “ Note 1. Organization and Recent Events ” of these “Notes to Unaudited Consolidated Financial Statements” for additional details regarding the Purchase and Sale Agreement to sell the Titanium Explorer . |
Supplemental Financial Inform_4
Supplemental Financial Information - Property and Equipment, Net (Detail) - USD ($) $ in Thousands | Mar. 31, 2021 | Dec. 31, 2020 |
Property Plant And Equipment [Line Items] | ||
Property and equipment | $ 795,349 | $ 794,944 |
Accumulated depreciation | (292,684) | (278,562) |
Property and equipment, net | 502,665 | 516,382 |
Drilling Equipment | ||
Property Plant And Equipment [Line Items] | ||
Property and equipment | 774,848 | 774,813 |
Assets under Construction | ||
Property Plant And Equipment [Line Items] | ||
Property and equipment | 931 | 561 |
Office and Technology Equipment | ||
Property Plant And Equipment [Line Items] | ||
Property and equipment | 18,405 | 18,405 |
Leasehold Improvements | ||
Property Plant And Equipment [Line Items] | ||
Property and equipment | $ 1,165 | $ 1,165 |
Supplemental Financial Inform_5
Supplemental Financial Information - Other Assets (Detail) - USD ($) $ in Thousands | Mar. 31, 2021 | Dec. 31, 2020 |
Other Assets Noncurrent Disclosure [Abstract] | ||
Noncurrent restricted cash | $ 4,058 | $ 4,546 |
Deferred certification costs | 5,498 | 4,535 |
Deferred income taxes | 2,033 | 1,923 |
Other noncurrent assets | 2,641 | 1,122 |
Total other assets | $ 14,230 | $ 12,126 |
Supplemental Financial Inform_6
Supplemental Financial Information - Other Current Liabilities (Detail) - USD ($) $ in Thousands | Mar. 31, 2021 | Dec. 31, 2020 | |
Other Liabilities Disclosure [Abstract] | |||
Interest | $ 12,229 | $ 4,139 | |
Compensation | [1] | 6,371 | 7,128 |
Income taxes payable | 5,483 | 2,951 | |
Current deferred revenue | 10,759 | 5,100 | |
Current portion of operating lease liabilities | 1,979 | 2,038 | |
Other | 3,173 | 3,378 | |
Other current liabilities | $ 39,994 | $ 24,734 | |
[1] | Includes $ 3.4 million as of March 31, 2021 and $ 2.1 million as of December 31, 2020 related to cash awards granted to certain key employees of the Company pursuant to underlying award agreements and issued under the 2016 Amended MIP. |
Supplemental Financial Inform_7
Supplemental Financial Information - Other Current Liabilities (Parenthetical) (Detail) - USD ($) $ in Thousands | Mar. 31, 2021 | Dec. 31, 2020 | |
Other Current Liabilities [Line Items] | |||
Compensation | [1] | $ 6,371 | $ 7,128 |
Cash Awards To Certain Key Employees | |||
Other Current Liabilities [Line Items] | |||
Compensation | $ 3,400 | $ 2,100 | |
[1] | Includes $ 3.4 million as of March 31, 2021 and $ 2.1 million as of December 31, 2020 related to cash awards granted to certain key employees of the Company pursuant to underlying award agreements and issued under the 2016 Amended MIP. |
Supplemental Financial Inform_8
Supplemental Financial Information - Other Long-term Liabilities (Detail) - USD ($) $ in Thousands | Mar. 31, 2021 | Dec. 31, 2020 | |
Liabilities Noncurrent [Abstract] | |||
Deferred income taxes | $ 929 | $ 970 | |
2016 MIP - Dividend Equivalents | [1] | 8,766 | 8,006 |
Noncurrent operating lease liabilities | 2,028 | 2,371 | |
Other non-current liabilities | 2,570 | 3,664 | |
Other long-term liabilities | $ 14,293 | $ 15,011 | |
[1] | Dividend Equivalents on vested TBGs are payable on settlement of the applicable award. |
Supplemental Financial Inform_9
Supplemental Financial Information - Reconciliation of Cash, Cash Equivalents and Restricted Cash (Detail) - USD ($) $ in Thousands | Mar. 31, 2021 | Dec. 31, 2020 |
Cash Cash Equivalents Restricted Cash And Restricted Cash Equivalents [Abstract] | ||
Cash and cash equivalents | $ 140,381 | $ 141,945 |
Restricted cash | 7,798 | 7,996 |
Restricted cash included within Other Assets | $ 4,058 | $ 4,546 |
Restricted Cash and Cash Equivalents, Noncurrent, Asset, Statement of Financial Position [Extensible List] | Other assets | Other assets |
Total cash, cash equivalents and restricted cash shown in the Consolidated Statements of Cash Flows | $ 152,237 | $ 154,487 |
Supplemental Financial Infor_10
Supplemental Financial Information - Additional Information (Detail) - ADES | Mar. 31, 2021USD ($) |
Supplemental Financial Information [Line Items] | |
Accounts receivable from related parties | $ 0 |
Accounts payable to related parties | 200,000 |
Other Current Liabilities | |
Supplemental Financial Information [Line Items] | |
Due to related parties | $ 711,000 |
Business Segment and Signific_3
Business Segment and Significant Customer Information - Additional Information (Detail) | 3 Months Ended | |
Mar. 31, 2021CustomerSegment | Mar. 31, 2020Customer | |
Entity Wide Revenue Major Customer [Line Items] | ||
Number of reportable segments | Segment | 1 | |
Number of customers accounted for revenues | Customer | 3 | 7 |
Product Concentration Risk | Sales | Construction Supervision Services | Ultra Deep Water Drillship | ||
Entity Wide Revenue Major Customer [Line Items] | ||
Percentage of revenue (excluding reimbursable revenue) | 1.00% | |
Product Concentration Risk | Maximum | Sales | Construction Supervision Services | Ultra Deep Water Drillship | ||
Entity Wide Revenue Major Customer [Line Items] | ||
Percentage of revenue (excluding reimbursable revenue) | 1.00% | |
Customer Concentration Risk | Sales | Customer One | ||
Entity Wide Revenue Major Customer [Line Items] | ||
Percentage of revenue (excluding reimbursable revenue) | 44.00% | 19.00% |
Customer Concentration Risk | Sales | Customer Two | ||
Entity Wide Revenue Major Customer [Line Items] | ||
Percentage of revenue (excluding reimbursable revenue) | 36.00% | 15.00% |
Customer Concentration Risk | Sales | Customer Three | ||
Entity Wide Revenue Major Customer [Line Items] | ||
Percentage of revenue (excluding reimbursable revenue) | 20.00% | 14.00% |
Customer Concentration Risk | Sales | Customer Four | ||
Entity Wide Revenue Major Customer [Line Items] | ||
Percentage of revenue (excluding reimbursable revenue) | 13.00% | |
Customer Concentration Risk | Sales | Customer Five | ||
Entity Wide Revenue Major Customer [Line Items] | ||
Percentage of revenue (excluding reimbursable revenue) | 12.00% | |
Customer Concentration Risk | Sales | Customer Six | ||
Entity Wide Revenue Major Customer [Line Items] | ||
Percentage of revenue (excluding reimbursable revenue) | 11.00% | |
Customer Concentration Risk | Sales | Customer Seven | ||
Entity Wide Revenue Major Customer [Line Items] | ||
Percentage of revenue (excluding reimbursable revenue) | 10.00% |
Business Segment and Signific_4
Business Segment and Significant Customer Information - Summary of Revenue by Country (Detail) - USD ($) $ in Thousands | 3 Months Ended | ||
Mar. 31, 2021 | Mar. 31, 2020 | ||
Entity Wide Revenue Major Customer [Line Items] | |||
Revenues | $ 20,166 | $ 51,456 | |
India | |||
Entity Wide Revenue Major Customer [Line Items] | |||
Revenues | 8,855 | 9,681 | |
Qatar | |||
Entity Wide Revenue Major Customer [Line Items] | |||
Revenues | 7,197 | 5,503 | |
Indonesia | |||
Entity Wide Revenue Major Customer [Line Items] | |||
Revenues | 3,970 | 0 | |
Congo | |||
Entity Wide Revenue Major Customer [Line Items] | |||
Revenues | 0 | 7,581 | |
Gabon | |||
Entity Wide Revenue Major Customer [Line Items] | |||
Revenues | 0 | 7,414 | |
Egypt | |||
Entity Wide Revenue Major Customer [Line Items] | |||
Revenues | 0 | 6,801 | |
Lebanon | |||
Entity Wide Revenue Major Customer [Line Items] | |||
Revenues | 0 | 6,305 | |
Malaysia | |||
Entity Wide Revenue Major Customer [Line Items] | |||
Revenues | 0 | 4,939 | |
Other countries | |||
Entity Wide Revenue Major Customer [Line Items] | |||
Revenues | [1] | $ 144 | $ 3,232 |
[1] | “Other countries” represent countries in which we operate that individually had operating revenues representing less than 10% of total revenues earned. |
Business Segment and Signific_5
Business Segment and Significant Customer Information - Schedule of Property and Equipment, Net by Country (Detail) - USD ($) $ in Thousands | Mar. 31, 2021 | Dec. 31, 2020 | |
Revenues From External Customers And Long Lived Assets [Line Items] | |||
Total property and equipment | $ 502,665 | $ 516,382 | |
International Waters | |||
Revenues From External Customers And Long Lived Assets [Line Items] | |||
Total property and equipment | 217,779 | 225,484 | |
India | |||
Revenues From External Customers And Long Lived Assets [Line Items] | |||
Total property and equipment | 107,685 | 111,485 | |
Indonesia | |||
Revenues From External Customers And Long Lived Assets [Line Items] | |||
Total property and equipment | 67,925 | 69,434 | |
Other countries | |||
Revenues From External Customers And Long Lived Assets [Line Items] | |||
Total property and equipment | [1] | $ 109,276 | $ 109,979 |
[1] | “Other countries” represent countries in which we individually had property and equipment, net, representing less than 10% of total property and equipment, net. |