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Vantage Energy Services, Inc. to Acquire One Ultra-Deepwater Drillship and an Option to Purchase a Second Ultra-Deepwater Drillship


Vantage Energy Services, Inc.

2008-03-31 12:32:00

Vantage Energy Services, Inc. to Acquire One Ultra-Deepwater Drillship and an Option to Purchase a Second Ultra-Deepwater Drillship

HOUSTON, TX–( EMWNews – March 31, 2008) – Vantage Energy Services, Inc. (“Vantage”)

(AMEX: VTG.U) (AMEX: VTG) (AMEX: VTG.WT) today announced that it has

exercised its previously announced option, through Offshore Group

Investments Limited (“OGIL”), to acquire one ultra-deepwater drillship (the

“Platinum Explorer”) and has obtained an option to acquire a second

ultra-deepwater drillship (the “Titanium Explorer”). The proposed

acquisition of OGIL is, among other customary closing conditions, subject

to a stockholder vote by the stockholders of Vantage. Additional

information may be found in Vantage’s proxy statement and annual report on

Form 10-K.

“We are extremely pleased to exercise the option on the Platinum Explorer

and to obtain a firm option on the sister ship, Titanium Explorer,” Paul

Bragg, Chief Executive Officer of Vantage, stated. “We are deeply

committed to building Vantage into a leading offshore drilling company with

the highest level of capabilities. Our fleet will be comprised of all new,

high-specification assets — and clearly, deepwater will be our strongest

focus. Given the current status of our outstanding bids and proposals for

the Platinum Explorer, as well as numerous other customer inquiries, we

believe that exercising the purchase option at this time is in our best

interest. We found it extremely attractive to couple this action with

obtaining the additional option to purchase the Titanium Explorer. The

addition of the Titanium Explorer option will orient our fleet towards

deepwater.” Following the completion of the current construction program,

assuming approval of the acquisition by stockholders, Vantage will have two

ultra-deepwater drillships and four ultra-premium jackup rigs.

“The fourth quarter 2010 scheduled completion date for the Platinum

Explorer makes it one of the industry’s first available, un-contracted

newbuild drillships,” Mr. Bragg stated. “This 12,000-foot water depth

capable drillship being constructed by DSME in South Korea will be the

‘flagship’ of the Vantage fleet. We are currently discussing numerous

contract opportunities with customers throughout the world for employment

of the ship, as well as the jackup rigs. Additionally, we have submitted

and are preparing for submission tender bids and other proposals to a

variety of possible customers. Previously, we had agreed to purchase an

option to acquire the Platinum Explorer in the initial acquisition

transaction of OGIL. To facilitate contracting the ship, we have reached

agreement with the seller to include the Platinum Explorer in the initial

acquisition transaction by Vantage, along with four ultra-premium jackup

rigs, currently under construction at PPL in Singapore. At this time, we

are also reviewing contract opportunities for the Titanium Explorer.”

Pursuant to the drillship purchase agreement by and between OGIL and

Mandarin Drilling Company, the purchase price for the Platinum Explorer

will be approximately $676 million, inclusive of certain modifications

requested by Vantage to improve and upgrade the equipment and hull design.

Purchase installments will be approximately $195 million in September 2008

and $473 million in the fourth quarter 2010, when the Platinum Explorer is

scheduled for delivery. An additional $8 million of cash consideration

included in Vantage’s initial acquisition transaction and attributed to the

option to purchase the Platinum Explorer will be paid in connection with

the acquisition closing upon approval of the stockholders. Pursuant to the

purchase agreement, the terms and conditions of the option to acquire the

Titanium Explorer are essentially identical to the terms and conditions for

the purchase of the Platinum Explorer, except that the purchase price for

the Titanium Explorer will be $695 million according to the following

payment schedule: 30% due upon exercise of the option; 10% due six months

after the date of exercise; 10% due twelve months after the date of

exercise; and the remaining balance of 50% due upon delivery of the

Titanium Explorer. The option is exercisable until November 30, 2008.

“Shipyard prices for new drillships have continued to escalate since orders

were placed to construct the Platinum Explorer and the Titanium Explorer,”

Mr. Bragg stated. “Also, we are benefiting from favorable construction

payment terms which limit the interest cost to be incurred in connection

with building the drillships. By exercising the option on the Platinum

Explorer and by obtaining an option on the Titanium Explorer, we believe

that there is significant embedded value captured by Vantage stockholders.”

Both drillships are being constructed at Daewoo Shipbuilding & Marine

Engineering Co., Ltd’s shipyard in Korea. The Platinum Explorer and the

Titanium Explorer have dynamic positioning systems with a hull design

offering a variable deck load of approximately 20,000 metric tons and

measuring 781 feet long and 137 feet wide. They are designed for drilling

in water depths of up to 12,000 feet, with a total vertical drilling depth

of up to 40,000 feet, and will have off-line tubular stand building


“Our initial stage of hiring has been completed as our operating base in

Singapore now includes all significant positions filled,” Mr. Bragg stated.

“We are on target for completion of all internal systems development and

rig manning. Construction of the rigs is progressing on schedule.”

Vantage will conduct an investor call at 10:00 AM ET on Wednesday, April 2,

2008 to discuss the latest drillship transactions and to provide updates on

Vantage’s latest developments. To access the conference call, U.S. callers

may dial toll free (866) 261-3330 and international callers may dial (703)

639-1224. Callers should reference the conference name “Vantage Investor

Conference Call” prior to the start time. A replay of the conference call

will be available for 48 hours following the call and can be accessed by

dialing (888) 266-2081 for U.S. callers and (703) 925-2533 for

international callers. The access code for the replay is 707195.

Vantage Energy Services, Inc.

Vantage Energy Services, Inc. is organized under the laws of the State of

Delaware as of September 8, 2006. We were formed to acquire, through a

merger, capital stock exchange, asset or stock acquisition, exchangeable

share transaction, joint venture or other similar business combination, one

or more businesses in the oilfield services industry.

Forward-looking Statements

This press release contains forward-looking statements within the meaning

of the Private Securities Litigation Reform Act of 1995, about Vantage,

OGIL and their combined business after completion of the proposed

acquisition. Forward-looking statements are statements that are not

historical facts. Such forward-looking statements, based upon the current

beliefs and expectations of Vantage’s and OGIL’s management, are subject to

risks and uncertainties, which could cause actual results to differ from

the forward-looking statements. The following factors, among others, could

cause actual results to differ from those set forth in the forward-looking

statements: the failure of Vantage’s stockholders to approve the share

purchase agreement and the transactions contemplated thereby; the

successful completion of debt financing; the number and percentage of

Vantage’s stockholders voting against the Acquisition; changing

interpretations of generally accepted accounting principles; relocation of

Vantage’s home jurisdiction; continued compliance with government

regulations; legislation or regulatory environments, requirements or

changes adversely affecting the business in which OGIL is engaged; demand

for the products and services that OGIL provides; construction delays and

cost overruns; cyclical business and lack of diversification; general

economic conditions; geopolitical events and regulatory changes, as well as

other relevant risks detailed in Vantage’s filings with the Securities and

Exchange Commission. The information set forth herein should be read in

light of such risks. Neither Vantage nor OGIL assumes any obligation to

update the information contained in this press release.

Public & Investor Relations Contact:
Paul A. Bragg
Chairman & Chief Executive Officer
Vantage Energy Services, Inc.
777 Post Oak Blvd., Suite 610
Houston, Texas 77056
Tel: (281) 404-4700

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