Good day, and thank you for standing by. Welcome to the Vantage Drilling International fourth quarter and year-end 2023 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 one one on your telephone. You will then hear an automated message advising your hand is raised. To withdraw your question, please press star one one again. Please be advised that today's conference is being recorded. I would now like to hand the conference over to your speaker today, Douglas Stewart, General Counsel. Please go ahead.
Thank you. Good morning, everyone, and welcome to the Vantage Drilling International fourth quarter 2023 earnings conference call. On the call today is also Ihab Toma, our CEO, and Rafael Blattner, our CFO. This morning, we released our earnings announcement for the quarter and year ended December 31, 2023. 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 prerecorded our prepared remarks and are participating on the call remotely to manage the question-and-answer section 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. Ihab Toma.
Thank you, Douglas, and good morning and good afternoon, everyone. 2023 was a successful year for the company and for the industry, where the industry recovery continued into its third year. In many regards, 2023 was an important turnaround year for Vantage. We have moved past the challenges of the COVID-19 period, improved our safety performance, recontracted rigs at higher dayrates, refinanced our debt, and achieved our strongest financial performance since before the company's reorganization in 2016. I would like to take the opportunity during this Q4 2023 earnings call to reflect on the full year of 2023. As usual, I will do so by taking you through our progress in relation to our three corporate goals of: one, maintaining stellar safety and operational performance; two, contracting of our fleet at higher dayrates; and three, achieving excellent shareholders' returns.
I will begin with our corporate goal number one of maintaining stellar safety and operational performance, which is our license to operate as a company. During the last quarter and throughout 2023, we remained focused on delivering our vision of "a perfect day every day" by consistently training, coaching, and mentoring our crews across our owned, managed, and supported fleets. We continued with the reintroduction of the behavioral-based Perfect Day Leadership training program across our worldwide operations with very positive feedback from all participants and overwhelming support from our clients. Remarkably, in 2023, our annual work hours increased by over 400,000 hours as our rigs continued to operate for many different clients in many different locations across the globe, and yet we still achieved better results than the excellent results achieved in 2022.
We had a number of impressive highlights during 2023, with the Platinum Explorer achieving four years without a recordable incident and the Topaz Driller achieving two years without one. The Qatar-supported jack-ups had a very good year, with all three rigs achieving major incident-free milestones. The Sapphire Driller achieved five years recordable incident-free, while both the Emerald Driller and the Aquamarine Driller achieved one year without a recordable incident. These results were acknowledged by the industry and clients, where the Sapphire Driller was recognized by the International Association of Drilling Contractors for having the region's best recordable incident rate, and the Emerald Driller was recognized by TotalEnergies as the second overall best rig in their global fleet in 2023 and the best overall in regard to HSE.
These are fantastic achievements and clear indications that the Perfect Day Leadership program and its reintroduction in 2023 had the desired effect, supported by our team's attitude and belief in the effectiveness of our safety programs. Shifting to sustainability, we increased our focus and our efforts on sustainability in 2023 and established an Environmental, Social, and Governance (ESG) working group consisting of the company's leaders across multiple disciplines who met throughout the year and produced our first internal sustainability report. We believe that by integrating sustainability into our decision-making process, we future-proof our business by making decisions aimed for the long term and also contribute positively to the society in general. On the environmental side, we continue to focus on reducing our GHG emissions and fuel usage, better managing our waste, and improving our water usage efficiencies.
On the social side, we continue to focus on our industry-leading diversity, which is a core value for us that brings clear benefits to our business. Finally, and as always, we continue to maintain a strong governance focus and operate at the highest ethical standards in all regions where we operate through regular training on governance issues. Switching to operations, revenue efficiency for the owned fleet during the fourth quarter of 2023 was a disappointing 73.4%, where the deepwater fleet and the jack-up fleet ended at 62.6% and 99%, respectively. Revenue efficiency for the fleet during the year was 86%, where the deepwater fleet ended at 83.1% and the jack-up fleet achieved 96.6%.
The lower-than-usual revenue efficiency for the quarter and for the year were primarily due to subsea equipment downtime events on the Tungsten Explorer in Namibia, as the rig continues to work in true ultra-deep water and challenging weather conditions in Namibia, where any subsea downtime event requires significantly more time to remediate. It is noteworthy to highlight that this campaign is an industry-first for a rig to drill three consecutive wells in over 10,000 feet of water. We are happy to report that the Tungsten Explorer worked throughout the Namibian winter without any interruption due to the harsh weather environment, proving the technical capabilities of the rig to operate in such conditions thanks to its big thrusters and 2.5 million pounds hookload. The rig's suitability for these environments was ultimately recognized by the client, TotalEnergies, and resulting in the long-term agreement for the rig that I will discuss shortly.
Although we did experience another 13 days of subsea equipment downtime during the first quarter of 2024, I'm confident that these teething issues are largely behind us, and happy to report that Vantage and TotalEnergies are closely collaborating to mitigate similar events in the future. It is worth noting that the Platinum Explorer has achieved approximately 97% revenue efficiency for the year. Separately, the managed drill ship's revenue efficiency, which does not show in our company revenue efficiency, was also approximately 97%. This, along with our strong safety record and efficient cost structure, makes choosing Vantage as the trusted manager for their fleet a clear choice for rig owners. I will now walk you through our fleet status, which directly ties to our second corporate goal on contracting our rigs and securing higher dayrates.
Starting with the two owned jack-ups, the Soehanah started the year under a legacy dayrate contract and transitioned during the third quarter to a new 776-day contract with Medco at $119,900 per day, which will run till the latter part of 2025. During 2023, the Soehanah also received a short shipyard stay that has seen its accommodation getting upgraded. The Topaz Driller had a busy year across multiple countries, initially working with Petrobel under a legacy rate contract through a BBC to ADES Egypt, then transitioning to Eni in Morocco under a market dayrate contract with a margin- accretive mobilization, and finally mobilizing to Foxtrot in the Ivory Coast in mid-December 2023.
After concluding the campaign for Foxtrot during the first quarter of 2024, the rig will mobilize to Singapore, where it will undergo comprehensive upgrades and contract preparation before commencing operations in the Joint Development Area of Malaysia and Thailand on a two-year firm contract with CPOC at $125,000 per day, with a further nine months of unpriced options also included. These upgrades include the increase in accommodation quarters capacity, significant offline handling and pumping capabilities, and under-deck cantilever cranes. As mentioned earlier, these reimbursable upgrades will position us to achieve higher future dayrates as they bring the Topaz Driller specifications to comparable levels to rigs that were built and delivered years later. Switching to deep water, the Platinum Explorer had a great year running completion operations for ONGC.
The Platinum contract has expired in February of 2024 and begun the planned out-of-service expected to take approximately 3-4 months. During this time, we will undergo scheduled maintenance and five-yearly certification of equipment, change 2 thrusters, and upgrade the BOP from 5 rams to 6 rams. As a result of the 6-rams BOP upgrade, the Platinum Explorer is now being offered to clients throughout the Eastern Hemisphere. Moving on to the Tungsten Explorer, TotalEnergies has extended the rig's contract through the first quarter of 2025 by exercising its final contractual option. Additionally, TotalEnergies and Vantage have entered into a binding agreement whereby the Tungsten Explorer will be sold for $265 million to a joint venture owned 75% by TotalEnergies and 25% by Vantage.
This joint venture will sign a fixed dayrate contract for 10 years, with the potential for additional 5 years to provide drilling services to TotalEnergies. Vantage will also enter into a management service contract with the JV, receiving an average compensation of $47,500 per day. The fixed dayrate and estimated JV profitability will not be made public. Finally, regarding the managed services segment, the Polaris worked the entire 2023 for ONGC in India and has been successfully returned to Seadrill during March 2024. The Capella has had tremendous success working for clients in Indonesia during the second half of 2023 after drilling a well in Mozambique with Eni Mozambique and mobilizing back to Indonesia to work for Eni, where the rig was part of significant gas discovery, and then mobilized for a well with Mubadala, which was also a significant gas discovery.
We ended the year commencing operations for Harbour Energy, followed by Mubadala again, where the rig is currently operating. The rig should be returned to Seadrill sometime during the third quarter of 2024 if no more mutually agreed options are to be exercised by the client. We are committed to this segment of our business, and we continue to pursue some opportunities to add rigs under our management to replace the outgoing Seadrill rigs and continue to grow our managed services business. As a result of all mentioned items, our backlog at the end of the fourth quarter was approximately $202.9 million, with recent awards in 2023 not being added until contract signature.
Moving to the market dynamics, and despite the recently widely talked about utilization white spaces in 2024, which could lead to potentially some disappointing fixtures announcements, sentiment remains strong, and customers, especially in the drill ship segment, continue the observed trend of securing capable rigs for term contracts spanning multiple projects. We have capitalized on such trend with the TotalEnergies joint venture. I will now move to our third corporate goal of achieving excellent stakeholders returns. During 2023, we achieved $70.9 million of EBITDA, our highest level since 2015. We achieved operating cash flow of approximately $2.2 million despite the Tungsten Explorer subsea downtime events during the year. With regards to our cash position, we ended the year with a cash balance of $84 million, including $10.8 million in restricted cash and $11.6 million of managed services pre-funded cash.
The increasing cash from the previous quarter, exclusive of managed services pre-funded cash, was approximately $8 million. This was primarily due to the collections of approximately $8.4 million associated with a Topaz Driller mobilization fee to Morocco. Lastly, as I mentioned earlier, our rigs are moving from legacy contracts to contracts at higher dayrates, reflecting the improved market. Some of these new contracts involve large upfront cash investments, which will be covered to a large extent by reimbursements by the client after the commencement of the contract, as well as the increased dayrate of the actual contracts. To conclude, throughout 2023, we remain focused on our corporate objectives of outstanding safety performance and pursuing profitable long-term drilling contracts to deliver strong future returns to our shareholders.
In 2024, we look forward to delivering safe and successful campaigns with the Tungsten Explorer, Capella, Topaz Driller, and Soehanah, conducting a safe, efficient shipyard stay with the Platinum Explorer and putting it back to work as an upgraded drillship, conducting a safe and efficient shipyard stay with the Topaz Driller and having a seamless start for it with CPOC, and finally, continuing to support the ADES jack-ups in Qatar and elsewhere when needed as per our strategic alliance with them. With that, I would like to turn the call over to Rafael to take us through the numbers.
Thank you, Ihab, and welcome, everyone. I will now provide an overview of the company's financial performance for the quarter and full year ending December 31st, 2023. The company ended the quarter with approximately $84 million in cash, including $10.8 million in restricted cash, compared to $77.6 million at the previous quarter, inclusive of $7.6 million in restricted cash. At December 31st, 2023, Vantage maintained $11.6 million of cash pre-funded by a managed services customer to address near-term obligations associated with the operations of their rigs. The increase in cash was primarily due to the collections of $8.6 million in mobilization fees for the Eni Morocco campaign, working capital for the fourth quarter ended at approximately $119.1 million compared to $127.6 million in the previous quarter. For the fourth quarter, we achieved revenues of approximately $94.5 million compared to $76.2 million for the fourth quarter of 2022.
The increase was primarily due to a full quarter of Polaris's revenue as the rig started with ONGC in mid-December 2022, higher dayrates on the Tungsten Explorer, Topaz Driller, and the Soehanah, and higher mobilization revenue on the Topaz Driller. This increase was partially offset by lower revenue due to operational events on the Tungsten Explorer as described by Ihab on his prepared remarks. Total revenue for 2023 was $383.1 million compared to $278.7 million in the previous year. The increase was mostly due to full year of operations on the Polaris, higher mobilization revenues, and higher average dayrates, partially offset by downtime on the Tungsten Explorer and lower jack-up revenues after the sale of EDC in May of 2022. Revenue efficiency for the fourth quarter of 2023 and for the full year of 2023 for the owned fleet was 73.4% and 86% respectively.
The lower-than-usual revenue efficiency was due to downtime experienced by the Tungsten Explorer. Operating costs for the fourth quarter totaled $75.2 million, which were higher compared to $65.1 million in the same quarter of 2022. The increase was primarily due to higher activity in the managed services segment and mobilization costs on the Topaz Driller. Operating costs for the year ended in 2023 totaled $290.1 million compared to $234.8 million in 2022. The increase was mostly due to the increase in activity in 2023 and the Tungsten Explorer higher operating costs in Namibia when compared to the Mediterranean in 2022, partially offset by lower jack-up costs after the sale of EDC in May of 2022. General administrative expenses for the fourth quarter of 2023 totaled approximately $6.2 million as compared to $5.3 million for the comparable quarter in 2022.
The cost increase is primarily due to costs associated with the redomiciliation from the Cayman Islands to Bermuda and transition costs incurred during the closure of the Houston office and subsequent consolidation into the Dubai headquarters. General administrative expenses for the year of 2023 totaled $21.3 million compared to $23 million in 2022. The decrease of $1.3 million was primarily due to the final payment of the Management Incentive Plan in 2022, partially offset by the increase in compensation and transition costs associated with the closure of the Houston office. Interest expense for the quarter was approximately $5.3 million compared to $8.8 million in the comparable quarter in 2022.
The decrease was due to lower outstanding debt as a result of the partial redemption of the 9.25 notes during the fourth quarter of 2022, partially offset by the increase in interest rates on the outstanding balance on the 9.5 notes during the fourth quarter of 2023. The net result for the fourth quarter and for the year of 2023 was a net loss of $14.6 million and $15.4 million respectively attributed to shareholders. Please note that we will post our 2023 annual report on our website later. With that, I will now turn the call back to the operator to begin Q&A.
Thank you. As a reminder, to ask a question, please press star one one on your telephone and wait for your name to be announced. To withdraw your question, please press star one one again. Please stand by while we compile the Q&A roster. Once again, that's star one one to ask a question at this time. Our first question comes from the line of [guess] Mariana Schneider with [guess] Nordea. Your line is now open.
Hi. You mentioned that the agreement with TotalEnergies is now binding. Do you have an anticipated closing date for the transaction?
I thought that Rafael did his favorite question. Thank you, Mariana.
Good morning. The binding Memorandum of Understanding has been signed. There are customary CPs as part of the agreement, one of them being the due diligence by TotalEnergies on the Tungsten Explorer. I recall that TotalEnergies has operated the rig for about 70%-80% of the time since the rig left the shipyard. The other provision is the setup of the joint venture entity, which is in progress. However, for us to be able to close, the rig needs to be moved between locations. So with that in mind, we believe that we're going to be closing the deal between the second half of 2024 and the first quarter of 2025.
Okay. And there was a moment that you cut out for a moment. You said in order for this to move to kind of the final stage, there's a percentage, I think, of the efficiency that you need to meet. Is that right?
No. I don't know if my line cut off or if there wasn't a remark. That is not applicable. I know what I said. What I said is that there's two areas that need to be addressed between the joint venture entity of the Tungsten Explorer or, in effect, create a joint venture entity.
What was the second? Sorry, it keeps cutting out.
The creation of the joint venture entity.
Joint venture. Got it. Okay, got it. In terms of documentation, so right now you have binding Memorandum of Understanding. Will it eventually go into purchase and sale agreement, or it's really just about the joint venture document that would be then?
No, understood. So where we're at is that the management team has spent a substantial amount of time with TotalEnergies in their Paris office. The Memorandum of Understanding includes lots of term sheets that have been negotiated. However, what needs to take place now is that definitive agreements, including but not limited to a purchase and sales agreement, do need to be signed. And we're in the process of doing that, and that's running as a critical path to the joint venture setup. However, I do want to highlight that these are not just one-liner bullet points on the term sheets. These are terms and conditions that have been thoroughly discussed between the parties.
Got it. And with regards to the bonds, then once the transaction closes, would you then issue a call or tender notice? Is that kind of the plan?
Yeah, it refers to the indenture, which requires us to mandatorily redeem the net proceeds associated with the sale of the rig. Right, at par. At par. And then at that point, we're going to receive if you look at our presentation online, we're going to receive $198.75 million, and then we're going to supplement the $1.25 million making that portion whole, which is a marginal portion of the outstanding debt, just $1.25 million.
Got it. So for the $265 amount, so you're not getting $265 upfront. Is that right?
So you need to refer to how the transaction is being structured. We're only selling 75% of the rig. So that's the cash proceeds associated with the $265 at 75%.
Yep. Okay, great. Thank you.
Thanks for the question.
Thank you. As a reminder, to ask a question at this time, please press star one one or your touch-tone telephone. And I'm currently showing no further questions at this time. This concludes today's conference call. Thank you for participating. You may now disconnect.