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Vantage Drilling Company Reports Third Quarter 2012 Results and Provides Fleet Update

HOUSTON, TX -- (Marketwire) -- 11/09/12 -- Vantage Drilling Company ("Vantage") (NYSE MKT: VTG) reports a net income for the three months ended September 30, 2012 of $2.0 million or $0.01 per diluted share, excluding approximately $2.5 million of charges for the early retirement of debt, as compared to a net loss of $11.9 million or ($0.04) per diluted share for the three months ended September 30, 2011. Including the charges for the early retirement of debt, Vantage reported a loss of $538,000 or $0.00 per diluted share for the three months ended September 30, 2012.

For the nine months ended September 30, 2012, Vantage reports a net loss of $9.2 million or ($0.03) per diluted shares, excluding approximately $2.5 million of charges for the early retirement of debt as compared to a net loss of $45.4 million or ($0.16) per diluted shares, excluding approximately $25.2 million of charges for the early retirement of debt for the nine months ended September 30, 2011. Including the charges for early retirement of debt, the company reported net losses of $11.7 million or ($0.04) per diluted share and $70.6 million or ($.24) per diluted share respectively for the nine months ended September 30, 2012 and 2011.

Paul Bragg, Chairman and Chief Executive Officer, commented, "We are pleased to announce another strong quarter from operations, with the fleet including the jackups and the Platinum Explorer achieving utilization in excess of 98%."

Titanium Explorer Update

The Titanium Explorer, which was acquired in April 2012, mobilized to the United States Gulf of Mexico, to commence an eight year contract. Acceptance testing with our customer was interrupted during the third quarter by Hurricane Isaac, which necessitated our sailing out of harm's way and further disrupted the supply chain and vendor access to the Titanium Explorer for more than a week. Most of the testing protocol has now been completed successfully, including third party certification of the BOP. The functional tests of the BOP in deepwater were unfortunately interrupted by operational issues of the customer-supplied ROV. The ROV cameras and robotics are essential to complete the seafloor testing of the equipment. We lost approximately ten days of testing associated with the ROV issues. During the testing delays, we noted an engine issue aboard the Titanium Explorer. After consultation with the engine manufacturer, we decided that it would be prudent to not only repair the problem, but to undertake a preventative upgrade recommended by the manufacturer to all six primary engines onboard. The repair and upgrade is being conducted currently and is expected to be completed in the third week of November. Following this, we will return to deepwater to recommence acceptance testing. We expect to commence operations under the drilling contract in December. "We are clearly disappointed by the disruptions and delays we have encountered commencing operations for the Titanium Explorer, but we believe we are very close to a successful commencement of our contract. The crew and support team has done an outstanding job preparing the Titanium Explorer and dealing with the adversities encountered," commented Mr. Bragg.

Jackup Fleet Update

Vantage, together with our customer for the Topaz Driller in Malaysia, has agreed to modify the terms of their contract in order for the Topaz Driller to perform a one-year drilling program in Indonesia. The original contract was for two wells in Malaysia plus a one well option. Under the modified terms, Vantage and the customer's Indonesian affiliate have entered into a new one-year contract for a drilling program in Indonesia at an increased rate. Additionally, the Indonesian affiliate will be granted three options for six months each. Upon completion of the Indonesian contract, the customer is anticipated to generate revenue of approximately $57 million.

The Emerald Driller has received a letter of award for a two year contract from its customer in Thailand. The contract will commence in continuity with the Emerald Driller's current contract, which we estimate will be completed in June 2013. Estimated revenues to be generated over the initial two year term of the contract are approximately $114 million.

Vantage, a Cayman Islands exempted company, is an offshore drilling contractor, with an owned fleet of four Baker Marine Pacific Class 375 ultra-premium jackup drilling rigs and two ultra-deepwater drillships, the Platinum Explorer and the Titanium Explorer, as well as an additional ultra-deepwater drillship, the Tungsten Explorer, now under construction. Vantage's primary business is to contract drilling units, related equipment and work crews primarily on a dayrate basis to drill oil and natural gas wells. Vantage also provides construction supervision services for, and will operate and manage, drilling units owned by others. Through its fleet of seven owned drilling units, Vantage is a provider of offshore contract drilling services globally to major, national and large independent oil and natural gas companies.

The information above includes forward-looking statements within the meaning of the Securities Act of 1933 and the Securities Exchange Act of 1934. These forward-looking statements are subject to certain risks, uncertainties and assumptions identified above or as disclosed from time to time in the company's filings with the Securities and Exchange Commission. As a result of these factors, actual results may differ materially from those indicated or implied by such forward-looking statements.

                          Vantage Drilling Company
                    Consolidated Statement of Operations
                  (In thousands, except per share amounts)
                                (Unaudited)

                                  Three Months Ended     Nine Months Ended
                                     September 30,         September 30,
                                 --------------------  --------------------
                                    2012       2011       2012       2011
                                 ---------  ---------  ---------  ---------
Revenues
  Contract drilling services     $ 105,521  $  89,916  $ 310,202  $ 274,646
  Management fees                      966      3,285      4,644     10,499
  Reimbursables                      5,047     25,367     33,662     79,148
                                 ---------  ---------  ---------  ---------
    Total revenues                 111,534    118,568    348,508    364,293
                                 ---------  ---------  ---------  ---------
Operating costs and expenses
  Operating costs                   52,004     69,644    171,358    212,468
  General and administrative         6,622      6,219     18,586     20,469
  Depreciation                      16,575     15,988     49,519     48,126
                                 ---------  ---------  ---------  ---------
    Total operating costs and
     expenses                       75,201     91,851    239,463    281,063
                                 ---------  ---------  ---------  ---------
Income from operations              36,333     26,717    109,045     83,230
Other income (expense)
  Interest income                       15          7         48         68
  Interest expense and other
   financing charges               (31,583)   (37,074)  (104,518)  (117,966)
  Loss on debt extinguishment       (2,528)         -     (2,528)   (25,196)
  Other, net                           (61)       455        800      1,913
                                 ---------  ---------  ---------  ---------
    Total other income (expense)   (34,157)   (36,612)  (106,198)  (141,181)
                                 ---------  ---------  ---------  ---------
Income (loss) before income
 taxes                               2,176     (9,895)     2,847    (57,951)
Income tax provision                 2,714      1,986     14,541     12,654
                                 ---------  ---------  ---------  ---------
Net loss                         $    (538) $ (11,881) $ (11,694) $ (70,605)
                                 =========  =========  =========  =========

Loss per share
  Basic                          $    0.00  $   (0.04) $   (0.04) $   (0.24)
  Diluted                        $    0.00  $   (0.04) $   (0.04) $   (0.24)



                          Vantage Drilling Company
                         Consolidated Balance Sheet
                (In thousands, except par value information)

                                               September 30,   December 31,
                                                    2012           2011
                                               -------------  -------------
                                                (Unaudited)
                    ASSETS
Current assets
  Cash and cash equivalents                    $      62,476  $     110,031
  Restricted cash                                      5,878          7,028
  Trade receivables                                   76,627        100,908
  Inventory                                           34,323         24,376
  Prepaid expenses and other current assets           12,374         16,909
                                               -------------  -------------
    Total current assets                             191,678        259,252
                                               -------------  -------------
Property and equipment
  Property and equipment                           2,850,707      1,913,596
  Accumulated depreciation                          (157,318)      (108,521)
                                               -------------  -------------
    Property and equipment, net                    2,693,389      1,805,075
                                               -------------  -------------
Other assets
  Other assets                                        82,297         58,173
                                               -------------  -------------
Total assets                                   $   2,967,364  $   2,122,500
                                               =============  =============

LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities
  Accounts payable                             $      60,452  $      46,362
  Accrued liabilities                                 69,419        103,809
                                               -------------  -------------
    Total current liabilities                        129,871        150,171
                                               -------------  -------------
Long-term debt, net of premium (discount) of
 $19,563 and ($38,572)                             2,129,563      1,246,428
Other long-term liabilities                           14,750         29,755
Commitments and contingencies                              -              -
Shareholders' equity
  Preferred shares, $0.001 par value, 10,000
   shares authorized; none issued or
   outstanding                                             -              -
  Ordinary shares, $0.001 par value, 500,000
   shares authorized; 294,130 and 291,241
   shares issued and outstanding                         294            291
  Additional paid-in capital                         869,227        860,502
  Accumulated deficit                               (176,341)      (164,647)
                                               -------------  -------------
    Total shareholders' equity                       693,180        696,146
                                               -------------  -------------
Total liabilities and shareholders' equity     $   2,967,364  $   2,122,500
                                               =============  =============



                          Vantage Drilling Company
                    Consolidated Statement of Cash Flows
                               (In thousands)
                                (Unaudited)
                                            Nine Months Ended September 30,
                                           --------------------------------
                                                 2012             2011
                                           ---------------  ---------------
CASH FLOWS FROM OPERATING ACTIVITIES
Net loss                                   $       (11,694) $       (70,605)
Adjustments to reconcile net loss to net
 cash used in operating activities:
  Depreciation expense                              49,519           48,126
  Amortization of debt financing costs              12,617            6,269
  Non-cash loss on debt extinguishment               2,528            3,532
  Share-based compensation expense                   5,808            4,044
  Accretion of long-term debt                            -            2,582
  Amortization of debt discount (premium)           (3,473)           7,374
  Deferred income tax expense                        2,978              123
  (Gain) / loss on disposal of assets                  502              (86)
Changes in operating assets and
 liabilities:
  Restricted cash                                    1,150           22,243
  Trade receivables                                 (9,382)         (68,633)
  Inventory                                         (9,948)          (2,566)
  Prepaid expenses and other current
   assets                                            1,509            6,393
  Other assets                                       2,074             (456)
  Accounts payable                                  14,090            4,772
  Accrued liabilities                             (105,126)         (38,080)
                                           ---------------  ---------------
    Net cash used in operating activities          (46,848)         (74,968)
                                           ---------------  ---------------
CASH FLOWS FROM INVESTING ACTIVITIES
  Additions to property and equipment             (848,939)        (126,695)
  Proceeds from sale of property and
   equipment                                             -              301
                                           ---------------  ---------------
    Net cash used in investing activities         (848,939)        (126,394)
                                           ---------------  ---------------
CASH FLOWS FROM FINANCING ACTIVITIES
  Proceeds from issuance of senior secured
   notes, including issue premiums of
   $62,000 and $15,750                             837,000          240,750
  Proceeds from the issuance of senior
   convertible notes                                50,000                -
  Repayment of long-term debt                            -         (109,716)
  Debt issuance costs                              (38,768)         (12,927)
                                           ---------------  ---------------
    Net cash provided by financing
     activities                                    848,232          118,107
                                           ---------------  ---------------
    Net decrease in cash and cash
     equivalents                                   (47,555)         (83,255)
  Cash and cash equivalents-beginning of
   period                                          110,031          120,443
                                           ---------------  ---------------
  Cash and cash equivalents-end of period  $        62,476  $        37,188
                                           ===============  ===============

Public & Investor Relations Contact:
Paul A. Bragg
Chairman & Chief Executive Officer
Vantage Drilling Company
(281) 404-4700

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