2010-07-09-2010-07-08-2010-08-04

Acquired Mandarin Drilling Co. and primary asset Platinum Explorer ultra-deepwater drillship.

Vantage Drilling Co., Houston, (Amex: VTG-U) has acquired the remaining 55% ownership interest in Marshall Islands-headquartered Mandarin Drilling Corp. from Cayman Islands-incorporated F3 Capital for approximately $139.65 million.

The primary asset consists of a construction contract for the Platinum Explorer ultra-deepwater drillship, currently under construction at Daewoo Shipbuilding & Marine Engineering Co. Ltd. ("DSME") in Okpo, Korea. Vantage Drilling is expected to fund the remaining construction costs for the drillship, which is equipped for drilling in water depths of up to 10,000 feet and has a total vertical drilling depth capacity of up to 40,000 feet.

Vantage is required to make additional construction payments and will also pay for related equipment and oversight for an aggregate sum of approximately $650 million. The total costs include approximately $70 million for construction payments made to DSME, from the acquisition price of $139.65 million, to complete the purchase and outfitting of the Platinum Explorer.

In November 2008, Vantage invested approximately $123 million for its initial 45% ownership stake in Mandarin and has managed the construction of the Platinum Explorer since August 2007.

Vantage Drilling chairman and chief executive Paul Bragg says, "We are excited to acquire full ownership of the Platinum Explorer as we continue to build one of the most modern and technologically advanced offshore drilling rig fleets in the world."

Bragg also notes that the Platinum Explorer is nearly complete and is expected to be delivered in November 2010 The drillship is expected to be deployed offshore India, pursuant to a five-year fixed-rate contract with India's state-run Oil and Natural Gas Co. (ONGC) at a dayrate of $585,000. The drillship is also expected to generate $145 million to $150 million of EBITDA (earnings before interest, taxes, depreciation and amortization) per year or approximately $750 million during the life of its contract.

"When combined with our four ultra-premium jackups currently operating, we expect that the Company will have an EBITDA run rate between $250 and $270 million per year," Bragg says.

F3 Capital is wholly-owned by Hsin-Chi Su, who is also a Vantage director and shareholder.

Su says, "F3, through the TMT offshore team, have incorporated many of our innovations, along with DSME, in the Platinum Explorer that make the unit best in class from a safety and efficiency perspective, for ultra-deepwater drilling...as a major shareholder of Vantage, I believe the transaction will help drive further shareholder value as Vantage continues to grow."

Offshore Group Investment Ltd., a subsidiary of Vantage, lodged an offering consisting of $1 billion aggregate principal amount of 11½% senior secured first lien notes due 2015, concurrent with the company's public offering of approximately 52.3 million of its ordinary shares at a public offering price of $1.10 per share, to acquire the remaining interest in Mandarin. The notes mature August 1, 2015 and will be secured by a first priority security interest in the Emerald Driller, the Sapphire Driller, the Topaz Driller and the Platinum Explorer.

Jefferies & Company Inc. and Johnson Rice & Company LLC are joint book-running managers for the common stock offering.