Houston-based Vantage Drilling (AMEX: VTG) reported a net loss of $18.6 million for the first quarter this year as compared to a net profit of $5.9 million in the first quarter of 2010.

Revenue jumped to $124 million from $58 million in the corresponding period -- a sharp growth of 114%. After taking into account all operating expenses, income from operations stood at $24 million -- a 55% growth over the year-ago quarter.

The company is in a strong growth phase and with it comes unique costs and operating needs. Vantage is currently jacking up its drillers and acquiring new drillships. Financing these does not come easy. With the acquisition of drillship Platinum Explorer in December 2010, debt levels increased thereby increasing interest expenses. Interest expenses and other financing charges stood at $41 million. This, not surprisingly, contributed to the net loss.

What does the future hold?
I believe these charges will continue to dent the company’s bottom line for some time. While overseeing construction of four more drillships that are to be completed by 2013 along with an eight-year contract with Petrobras (NYSE: PBR) to operate one of them, financing and operating charges will continue to weigh on management’s shoulders. Foolish investors should not expect to see substantive returns in the immediate future. However, once these burdens are gone, I expect Vantage to perform extremely well. It’s evidently apparent that management has the long term in sight.

With Transocean (NYSE: RIG) operating 140 mobile offshore drilling units around the world, it is evident how much the company profits -- even despite the bad name it received during the Gulf spill last year. Diamond Offshore Drilling (NYSE: DO) has also shown that it has staying power in this industry. It just goes on to show how much rigs are in demand as offshore drilling intensifies.

Foolish takeaway
Last Tuesday’s announcement on entering yet another agreement to expand the fleet shows the huge demand these pieces of equipment have. Once the company picks up operations and reduces debt, there is no reason why it will not be an established player in the sector. Foolish investors should gain by picking up a handful of this stock.