Vantage Drilling Intentl

Thank you for standing by and welcome to Vantage Drilling International's third quarter 2024 earnings conference call. At this time, all participants are in a listen only mode. After the speaker presentation, there will be a question and answer session. To ask a question during the session, you will need to press star one one on your telephone. To remove yourself from the queue, you may press star one one again. I would now like to hand the call over to Raphael Blattner, CFO. Please go ahead.

Thank you. Welcome, everyone, to the Vantage Drilling International Limited Third Quarter 2024 Earnings Conference Call. On the call today is also Ehab Thoma, our CEO. This morning, we released our earnings announcement for the quarter ended September 30, 2024. The earnings release is available on our website at VantageDrilling.com. Please also note that any comments we make today about our expectations of future events and projections are forward-looking statements pursuant to the Private Securities Litigation Reform Act. We have based forward-looking statements on management's current expectations and assumptions and not on historical facts. Examples of these statements include, but are not limited to, our expectations regarding future results, including expectations regarding our liquidity position, future costs and expenses related to upgrades and out-of-service work, as well as contract preparation costs and expenses. Forward-looking statements in today's call are subject to a number of risks and uncertainties, many of which are beyond our control and could cause actual results to differ materially from the projections made in today's conference call. Vantage does not undertake the updating of any such statement or risk factor that could cause actual results to differ materially from our expectations. We refer you to our earnings release and financials available on our website. We have pre-recorded our prepared remarks and are participating on the call remotely to manage the question and answer session segment of the call. In the event there are issues with sound quality or of a similar nature, please accept our apologies in advance and thank you for your understanding. Now let me turn over the call to our CEO, Mr. Ehab Thoma.

Thank you, Rafael. Good morning and good afternoon, everyone. Even good evening for people in Dubai like us. I am pleased to report a successful third quarter of 2024 marked by safe and efficient operations. During the quarter, we placed the Topaz Driller on contract on time and on budget, signed the agreements for the sale of the Topaz Driller and the Sohana, and advanced our efforts towards listing the company on Oslo Euronext Bourse, which have been successfully completed in October. Also, as a result of the recent jack-up sales, which qualify as vessel sales under the indenture, we are required to apply the net proceeds towards redemption. Finally, and to cover large equipment orders ahead of the JV incorporation, and the planned out-of-service period for the Tungsten Explorer post-sale, we issued $50 million in new notes to ensure adequate liquidity. Vantage will be reimbursed for most of these expenses after the JV is incorporated and ahead of the actual out-of-service period for the rig. Rafael will provide more color on the new notes in his prepared remarks. I will now take you through our performance for the quarter in relation to our three corporate goals of, one, maintaining stellar safety and operational performance, two, contracting of our fleet, and three, achieving excellent stakeholders' returns. I will begin with our goal number one of maintaining our stellar safety and operational performance. From a safety perspective, Q3 was a good quarter for Vantage as we saw all our rigs achieve zero recordable injuries for the quarter. This is an exceptional achievement that highlights the commitment of our crews to our safety programs and the success of the training initiatives that we have implemented over the year. I would like to highlight some of the key advancements in our safety and competency program this quarter, as we continue driving safety and operational excellence across the company. We have recently introduced the fail safe versus fail lucky concept, which is a recognition that not all incidents are preventable, and when something does fail, we continue to ensure that appropriate mitigation controls are in place to minimize the risk of people being injured if and when something does fail. A simple example of that is to enforce red zones where no personnel could be present while activity is taking place at height above that zone. It is worth noting that our goal is still to achieve zero injuries, as we believe this principle is paramount to the success of our organization and reinforces our ongoing commitment to refining safety protocols to reduce risk in our operations. This quarter, we completed the first round of our innovative behavioral assessment tool, BAT program, which comprises using the 100 to 120-day space learning journey for our offshore teams to improve knowledge retention on key aspects of our behavioral-based safety program. Post-training surveys have shown a significant improvement in knowledge retention across the group thanks to this initiative. We are now advancing the BAT process with an AI component that defines the nine core topics under our Perfect Day Leadership training program, which will further enhance the knowledge retention after the training. We also continued with the rollout of the latest version of our Perfect Day Leadership PDL training program, and this time we included key client representatives and a new member of our board and received highly positive feedback on our company's culture. These initiatives highlight our focus and strategic commitment on safety and talent development as we strive to conclude the year on a strong note. Aligned with our existing commitment to environmental stewardship, we are analyzing supply chain data to identify ways for minimizing packaging material shipped to our rigs, thereby reducing waste and transportation impact. Furthermore, as part of our focus on sustainability with our third-party logistics suppliers, we are now compiling information related to how we ship our spares and equipment from our vendors to our fleet in general. This data will provide us concise information on one of our largest sources of emissions and allow us to make informed decisions going forward. These initiatives reflect our dedication to sustainable operations, enhancing our long-term value for both shareholders and the environment. Switching to operations revenue efficiency for the owned fleet during the third quarter of 2024 was 97.4%. With the Deepwater Fleet and the Jacob Fleet achieving revenue efficiency, of 97% and 98.3% respectively. I'll now walk you through our fleet status, which directly ties to our second corporate goal of contracting our rigs and securing full fleet utilization. Starting with the jackups, the Sohana had an uninterrupted quarter working for Medco Indonesia. on its 776-day contract at $119,900 per day. As mentioned during the previous earnings call, the rig is currently contracted until the latter part of 2025. The Topaz Driller completed its contract upgrades on the 15th of September and successfully started its two-year firm contract with CPOC at $125,000 per day in the joint development area of Malaysia and Thailand on the 30th of September, 2024. The contract also includes nine months of unpriced options, which, if exercised, will follow in direct continuation to the firm duration of the contract. As recently announced on October 30th, Vantage sold the Sohana and the Topaz driller to Ades for a total of $190 million. Alongside the sale, we signed two three-year management agreements for the sold jackups and renewed the support services agreement for the Emerald Driller. These agreements are expected to generate up to $7.5 million per year, with the management agreements being performance-based and the support services agreement at a fixed rate. These transactions are a testament to Vantage's commitment to returning value to our shareholders. and a forward step in executing on our asset light strategy, while further expanding our global alliance with our partner ADIS. Switching to Deepwater, the Platinum Explorer continues its cyclical recertifications and upgrades, including the upgrade of the BOP from five to six RAMs. The rig should be available for work later in the first quarter of 2025. and we continue to pursue various suitable opportunities. Moving on to the Tungsten Explorer, the RIG continues its campaign with Total Energies in the Republic of Congo. The current program is expected to continue into the second or third quarter of 2025, after which the RIG will be sold to the JV. The 10-year management contract will commence, and the RIG will undergo periodic maintenance and upgrades prior to mobilization to its next assignment. As a reminder, the Tungsten Explorer will be sold to the JV for $265 million, where Total Energies and Vantage will own 75% and 25% respectively. We expect to finalize the JV incorporation and execute the definitive agreements before the end of this quarter. Regarding the backlog, At the end of the third quarter, our backlog totaled $224.4 million, with the Topaz Driller contract with CPOC contributing approximately $107.1 million to the backlog. Finally, in our Managed Services segment, we returned the Capella to Sea drill during the third quarter, following the completion of drilling program for Mubadala in Indonesia. At the end of this contract, we received a perfect feedback score from Mubadala, highlighting the rig's excellent performance, the crew's high competence, proactive approach, and strong communication alongside our exemplary safety leadership and commitment to a strong safety culture. Customer feedback like this is what keeps operators and management service clients returning to Vantage as a trusted partner. We remain committed to expanding our management segment and continue to pursue opportunities to add rigs under our management. Currently, we are engaged in several active discussions and tenders for marketing and operating drilling units, including several multi-year projects. Recently, we signed a Memorandum of Understanding with a floater owner and are now preparing the related marketing and operations management agreements to bid this rig to some tenders. We continue to see long-term opportunities for both jackups and floaters in regions where we have strong customer relationships and deep local experience. We are actively evaluating rigs to manage for owners in response to various tenders and continue to receive inbound interest to discuss new opportunities. Turning to market dynamics. we continue to see a trend of project postponements with anticipated idle periods for floater extending into late 2025. While long-term sentiment remains positive for both floaters and jackups, recent talks of additional jackups suspensions have impacted near-term utilization and rate expectations in that segment. However, multiple opportunities scheduled to commence in 2025 are expected to help absorb a number of premium jack-up rigs as they come off contract. Moving to our third corporate goal, achieving excellent stakeholders returns. During the third quarter of 2024, we achieved $6.4 million of EBITDA, reflecting an improvement from the previous quarter. After the quarter end, we listed the company on Euronext growth in Oslo and made progress on our capital structure. This includes beginning repayment of the revolving credit facility, which should be fully paid off in November, using proceeds from mobilization and reimbursable upgrades under the CPOC contract, along with issuing $50 million in new notes, as mentioned in my earlier remarks. Rafael will provide further details in his prepared remarks. In conclusion, we remain focused on achieving exceptional safety performance and securing profitable long-term drilling contracts to deliver strong future returns for our stakeholders. With that, I would like to again turn the call over to Rafael to take us through the numbers. Thank you.