Good day, and thank you for standing by. Welcome to the Vantage Drilling International Q1 2025 earnings conference call. At this time, all participants are in 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, Rafael Blattner, CFO. Please go ahead.
Thank you. Good morning, everyone, and welcome to the Vantage Drilling International first quarter 2025 earnings conference call. On the call with me today is Ihab Toma, our CEO. This morning, we released our earnings announcement for the quarter ended March 31, 2025. The earnings release is available on our website, 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 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 the call over to our CEO, Mr. Ihab Toma.
Thank you, Rafael, and welcome everyone. I am pleased to report a successful first quarter of 2025, driven by safe and efficient operations. I'd like to summarize some highlights before moving on to our three corporate goals. At the very start of the year, we finalized and executed the definitive agreements with TotalEnergies for the joint venture purchase of the Tungsten Explorer, which will occur later this year. In April, we secured a conditional letter of award for the Platinum Explorer with a 90-day validity period, in which the parties are working to enter into a firm contract. The contract value is circa $80 million, with an anticipated 260 days required to render the campaign, inclusive of mobilization time, contract preparation time, and demobilization time.
Additionally, the company entered into a marketing agreement with El Dorado Drilling to market the seventh-generation Dorado Drill Ship for drilling opportunities in various locations in Africa, the Mediterranean, Asia, and Australasia. Now, I would like to take you through our progress in relation to our three corporate goals of: 1. Maintaining our stellar safety and operational performance; 2. The contracting of our entire fleet; and 3. Achieving excellent stakeholder returns. I will begin with our first corporate goal of maintaining our stellar safety and operational performance. We delivered strong safety performance during the first quarter, whereby Vantage, as a company, achieved one year lost time incident-free. This is a testament to the focus and commitment of our teams in ensuring that we follow our processes and implement our Perfect Day leadership principles. In collaboration with our joint venture partner, we celebrated International World Safety Day.
Presentations were conducted by the Managing Director of Tiva, our JV company, in our Dubai office, and by the client's corporate team on board the Tungsten Explorer, highlighting the importance of maintaining a strong safety culture offshore. In addition, one of our employees on the Tungsten Explorer was awarded the Observation Card of the Year for 2024 by TotalEnergies E&P Congo. From a sustainability perspective, we launched a malaria awareness campaign in Congo, distributing health education materials and malaria prevention packs focusing on our Congolese crews and their families. In addition, during Ramadan, Vantage supported a number of programs that provided iftar meals for labor camps across the UAE and food assistance to disadvantaged people across the Middle East. These are important initiatives within the company that highlight our commitment to improving the welfare of people in the areas where we work.
Switching to operations, revenue efficiency for the Tungsten Explorer during the first quarter of 2025 was 100%. Revenue efficiency for the two operated rigs in our managed fleet during the quarter was 96.65%. The combined revenue efficiency of both fleets was 97.75%. I'll now walk you through our fleet status, which directly ties to our second corporate goal of contracting our entire fleet. Starting with our owned fleet, our focus is to convert the conditional letter of award for the Platinum Explorer into a contract. On signing of the contract, the Platinum will undergo pre-contract preparations in advance of commencing its mobilization. Moving on to the Tungsten Explorer, the rig continues its campaign in Congo, where it is currently operating on the last of its three exercise contractual options.
Upon conclusion of this contract, the rig will demobilize from the Congo and be sold to the JV, at which time the 10-year management contract will commence, and thereafter the rig will undergo an out-of-service work scope, including periodic maintenance, recertifications, and upgrades. On completion of such out-of-service period, the Tungsten will mobilize to West Africa to commence its maiden contract under the ownership of the JV for two firm wells and four optional wells contract, with a firm duration of 160 days and a further optional duration of up to 290 days. As a reminder, the Tungsten Explorer will be sold to the JV for $265 million, $198.75 million in cash, and $66.25 million in JV equity, providing Vantage with 25% JV ownership. At the end of the first quarter, our total backlog was $211 million, with $192 million coming from our managed fleet.
Switching to the managed services segment, last year, we expanded our portfolio with the two three-year management agreements for the Topaz Driller and Sohana, along with the three-year support services agreement for the Emerald Driller. In this quarter, we entered into an agreement with El Dorado Drilling to market the seventh-generation Dorado Drill Ship for drilling opportunities across Africa, the Mediterranean, Asia, and Australasia, reflecting our strong reputation as rig managers. We remain focused on expanding our managed services business by adding more rigs to our portfolio. Turning to market dynamics, the long-term fundamentals of the deep-water segment remain constructive despite near-to-mid-term delays and macroeconomic pressures, including new tariffs and the resulting recent pullback in crude oil prices.
While we continue to anticipate idle periods for certain floaters rolling off contract in 2025 and into the first half of 2026, we expect utilization to begin improving thereafter as market tightness gradually returns. In the jackup segment, rumors and speculations regarding further suspensions continue to negatively impact sentiments. Despite this, we remain of the view that most of the suspended premium jackup rigs are likely to find new work in the long term, supported by a broadly resilient global demand environment. However, we do expect day rates to remain under pressure in the near term before a more meaningful recovery in utilization materializes to pre-suspensions levels.
Moving to our dthird corporate goal, in the first quarter of 2025, with regard to our cash position, we ended the first quarter with a cash balance of $76.4 million, including $3.3 million of restricted cash, $5.8 million of managed services pre-funded cash, and $15.5 million pre-funded by TotalEnergies to support the planned upgrades for the Tungsten Explorer. As previously announced, to ensure sufficient liquidity before the Tungsten Explorer's planned out-of-service period, we issued $50 million in new notes during the fourth quarter of 2024. Rafael will provide more color on liquidity and capital resources. 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 turn the call back over to Rafael to take us through the numbers.
Thank you, Ihab, and welcome everyone. I'll now provide an overview of our financial performance for the quarter ending March 31, 2025. The company ended the first quarter with approximately $76.4 million in cash, including $3.3 million in restricted cash, $5.8 million pre-funded by our managed services customers for near-term obligations, and $15.5 million pre-funded by TotalEnergies to support the planned upgrades for the Tungsten Explorer, compared to $67 million in the same quarter of the prior year, which included $10.8 million in restricted cash and $11.1 million pre-funded by our managed services customers for near-term obligations. As a reminder, in the fourth quarter of 2024, the company raised $50 million in new senior notes to maintain adequate liquidity for the planned out-of-service work on the Tungsten Explorer.
At the start of the year, TotalEnergies and Vantage executed all definitive agreements and formed the joint venture, which will purchase the Tungsten Explorer after the conclusion of the current TotalEnergies campaign in the Congo. At closing, Vantage will receive $198.75 million in cash and $66.25 million in joint venture equity. Vantage will also manage and operate the drill ship for 10 years, with an option to extend for up to five more years. Working capital for the quarter ended March 31, 2025, was approximately $101.9 million, compared to $120.9 million in the same quarter of the previous year.
The decline in working capital was primarily attributed to the decrease in activity associated with the completion of the Platinum Explorer campaign in the first quarter of 2024, and the conclusion of management agreements for the Polaris and the Capella in the first and the third quarter of 2024, respectively, and the sale of the Sohana and Topaz Driller in the fourth quarter of 2024. For the first quarter of 2025, we achieved revenues of approximately $31.9 million, compared to $76.1 million for the first quarter of 2024. The decrease in revenue of $44.2 million was primarily attributable to the sale of the Topaz Driller and the Sohana during the fourth quarter of 2024, which contributed $27.9 million in the first quarter of 2024.
The remaining $16.3 million reduction in revenue was due to the conclusion of the Platinum Explorer campaign in the first quarter of 2024 and management agreements for the Polaris and the Capella in the first and third quarter of 2024, respectively. Revenue efficiency for the first quarter of 2025 for the Tungsten Explorer and the managed fleet was 100% and 96.7%, respectively. Operating costs for the first quarter totaled $46.4 million. These were lower compared to $71.2 million in the comparable quarter of 2024. The overall decrease in costs was primarily driven by the sale of the Topaz Driller and the Sohana, resulting in a reduction of approximately $12.1 million. Additionally, the conclusion of management agreements for the Polaris and Capella in 2024 contributed to a further decrease of approximately $10.7 million and the completion of the Platinum Explorer campaign by an additional $2 million.
General and administrative expenses for the first quarter of 2025 totaled approximately $8.3 million, as compared to $7.3 million for the comparable quarter in 2024. The cost increase is primarily due to a cumulative adjustment of non-cash share-based compensation expense of $2.6 million, partially offset by lower professional fees. For the first quarter, interest expense was approximately $1.6 million compared to $5.3 million in the same quarter of 2024. The decrease in expense was primarily due to the redemption of notes during the fourth quarter of 2024, totaling $184.9 million. Capital expenditures for the first quarter of 2025 totaled $4.6 million. Additionally, investing cash flows include a positive $4 million purchase price adjustment related to the sale of the Sohana. The net result for the first quarter was a net loss of $18.9 million attributable to shareholders.
Please note, we will post our March 31, 2025 quarterly report to our website later today. With that, I will now turn the call back over to the operator to begin the Q&A.
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. Our first question comes from the line of Garrett Fellows from J.H. Lane Partners.
Thanks for your question. Could you just give us your best idea of when the program in the Congo will be done and then sort of walk us through puts and takes on cash and excess cash you'll have available once some of these other items are cleaned up? Thank you.
I'll take the first part of the question. We expect it to happen inside of the third quarter. I cannot guide more than early part or latter part, but we are at the moment, we are going with the assumption it's going to be in Q3. In terms of cash, we have not discussed that yet. I don't know if you, Rafael, have any further comments on that. We have not discussed publicly, I mean.
Yes, we cannot speak about anything with the proceeds of the sale of the Tungsten Explorer at this time.
Okay, thanks.
Thanks, Garrett.
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. At this time, I am showing no further questions. This concludes today's conference call. Thank you for participating. You may now disconnect.