Vantage Drilling Intentl

and thank you for standing by. Welcome to the Vantage Drilling International Limited Second Quarter 2025 Earnings Call. At this time, all participants are on a listen-only mode. After the speaker's presentation, there will be a question-and-answer session. To ask a question during the session, you will need to press star 1-1 on your telephone. You will then hear an automated message advising your hand is raised. To withdraw your question, please press star 1-1 again. Please be advised that today's conference is being recorded. I would now like to hand the conference over to your speaker today, Raphael Blatner, Chief Financial Officer. Please go ahead.

Thank you. Good morning, everyone, and welcome to the Vantage Drilling International Limited Second Quarter 2025 Earnings Conference Call. On the call with me today is Ehab Thoma, our CEO. This morning, we released our earnings announcement for the quarter ended June 30, 2025. The earnings release is available on our website at VantageDrilling.com. Please 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 today. Vantage does not undertake to update 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 prerecorded 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 the call over to our CEO, Mr. Ehab Thoma.

Thank you, Raphael, and welcome, everyone. I am pleased to report a successful second quarter of 2025, driven by safe and efficient operations. I'd like to summarize some highlights before moving on to our three corporate goals. The Tungsten Explorer delivered an outstanding quarter with no incidents and achieving near-perfect revenue efficiency. Building on this strong performance, on August 11th, 2025, Vantage completed the sale of the Tungsten Explorer for $265 million to our joint venture with Total Energies, in which Total Energies holds a 75% interest and Vantage a 25% interest. The consideration consisted of $198.75 million in cash and $66.25 million in equity. As previously announced, Vantage will continue to operate the Tungsten Explorer under a management agreement with an initial term of 10 years, with an option to extend for an additional five years. As a result of this transaction, Vantage will redeem its outstanding debt of approximately $65 million on September 10th, positioning the company to be debt-free. Turning to the Platinum Explorer, in April, we secured a conditional letter of award, which has since been extended to allow the parties to finalize the drilling contract. The anticipated contract value is approximately $80 million, including mobilization, contract preparation, and demobilization. Now, I would like to take you through our progress in relation to our three corporate goals of one, maintaining our stellar safety and operational performance, two, contracting the entire fleet, and three, achieving excellent stakeholder returns. I will begin with our first corporate goal and our number one differentiator, which is maintaining our stellar safety and operational performance. We continue to uphold our commitment to excellence in safety and operational execution. During the second quarter, Vantage delivered outstanding results, achieving zero recordable incidents across the company and almost perfect operational efficiency across all operating rigs. This exceptional performance reflects the unwavering dedication of our teams in adhering to established processes and embracing our perfect day leadership principles. I am proud to announce that we successfully retained our ISO 9001 Quality Management, ISO 14001 Environmental Management, and ISO 45001 Occupational Health and Safety Management certifications. This was our five-yearly renewal audit, which was much more detailed than the previous year's audit. I am also pleased to share that the Vantage Behavioral Analysis Tool that seeks to verify and enhance knowledge retention, was honored with the Best Initiative Award at the 2024 International Association of Drilling Contractors Southern Arabian Peninsula Chapter. Now switching to operations, revenue efficiency for the Tungsten Explorer during the second quarter of 2025 was 99.7%, while our managed fleet achieved 99.8%. On a combined basis, the overall revenue efficiency was an outstanding 99.8%. I will now walk you through our fleet status, which is directly aligned with our second corporate objective, contracting the entire fleet. Starting with our own fleet, our priority remains converting the existing conditional letter of award for the Platinum Explorer into a firm contract while also focusing on other opportunities after this contract. Once finalized, the RIG will commence contract preparation and mobilization, and we will remain focused on adding backlog in direct continuation. Turning to the Tungsten Explorer, as mentioned earlier, the RIG was sold to our joint venture and has mobilized to Las Palmas for its scheduled out-of-service period, which will include upgrades funded by Total Energies, agreed enhancements funded by the joint venture and some equipment certifications funded by vantage which were conditions for the completion of the drill ship sale upon completion of this yard stay the tungsten explorer will mobilize back to west africa to commence its maiden contract under the joint venture ownership the firm duration of this contract is 160 days with additional options of up to 290 days for the managed jackups the topaz driller continues operations with SIPOC in the joint development area between Malaysia and Thailand. There is currently 13 or so months remaining of the firm term and a further three times three months options available to be exercised with the first option strike date in quarter one of 2026. The Sohana concluded operations with Medco Energy in Indonesia mid-July 2025 and has since demobilized to Johor Bahru for some maintenance scopes and warm stacking ahead of any future charters. The contract was completed approximately 75 days earlier than the estimated program duration, even including the drilling of an additional well, which was due to the rig's outstanding performance and low NPT over the duration of the contract. The rig is being actively marketed and has been offered for a number of opportunities, both in the region and beyond. We remain confident that with the rig's stellar operational record, she will return to work in the not too distant future. At quarter end, our total backlog stood at $199.8 million, of which $189.1 million was attributable to our managed fleet, with the balance representing the remaining operations of the Tungsten Explorer in Congo prior to its transfer. Turning to market dynamics, we continue to see the long-term fundamentals of both the shallow water and deep water segments remaining constructive, even as near-term challenges persist. We expect some idle periods across all asset classes through the remainder of 2025 and into mid-2026. That said, there is a steady flow of inquiries and tenders already issued or expected shortly which should drive higher utilization across both sectors from late 2026 and 2027. Moving to our third corporate goal of achieving excellent stakeholder returns. In the second quarter of 2025, we ended with a total cash balance of $52.9 million. This includes $2.4 million of restricted cash, $6.9 million of pre-funded cash related to managed services, and $9.5 million pre-funded by Total Energies to support planned upgrades on the Tungsten Explorer. In closing, we remain focused on maintaining exceptional safety and operational performance and securing profitable long-term drilling contracts to deliver strong returns for our stakeholders. With that, I would like to turn the call back over to Rafael to take us through the numbers.