UK: Rowan 4Q Revenues Rise 32pct

Business & Finance

UK: Rowan 4Q Revenues Rise 32pct

Rowan Companies, Inc., a major provider of international and domestic offshore contract drilling services with a leading position in high-specification jack-up rigs, announces that in the 4th quarter 2011 the company generated net income from continuing operations of $33.1 million or to $35.1 million in the fourth quarter of 2010.

Costs and expenses during fourth quarter of 2011 included $10.7 million of unusual or one-time items, or $0.05 per share after tax, for employee personal injury claims development, accelerated recognition of equity awards in connection with employee severance and professional fees related to the Company’s planned corporate redomestication.

Income from discontinued manufacturing and land drilling operations totaled $12.0 million in the fourth quarter of 2011 or $0.09 per share, compared to $22.2 million or $0.17 per share in the fourth quarter of 2010.

Net income totaled $45.1 million or $0.36 per share in the fourth quarter of 2011, compared to $57.3 million or $0.45 per share in the fourth quarter of 2010.

For the year ended December 31, 2011, the Company generated net income from continuing operations of $135.7 million or $1.07 per share on revenues of $939.2 million, compared to net income from continuing operations of $267.6 million or $2.25 per share on revenues of $1,017.7 million in 2010.

Rowan’s revenues were $275.1 million in the fourth quarter of 2011, up by 32% over the prior-year quarter due to incremental activity from fleet additions and rig start-ups and slightly higher average day rates between periods. The Company’s gross drilling margin was 41% of revenues in the fourth quarter of 2011, down from 52% in the prior-year quarter primarily due to increased rig shipyard and other downtime together with higher labor and maintenance costs. These higher costs result largely from the relocation of equipment to various international markets either for term contracts or where follow on opportunities are expected to keep the rig working beyond 2012.

Matt Ralls, President and Chief Executive Officer, commented, “2011 was a year of major transformation for Rowan. We sold our manufacturing and land drilling operations at attractive prices and are reinvesting those proceeds into a significant expansion of our core business, offshore drilling. We completed our jack-up newbuilding projects and began an ultra-deepwater newbuild program, entering that fast growing part of the business with three drillships to be built by Hyundai Heavy Industries that will offer industry- leading capabilities. Since the beginning of 2011, we have added more than $2.6 billion of contract backlog for our jack-up fleet, bringing our total backlog to just over $3 billion, an all time high for the Company.

“Consistent with our efforts over the past several years to diversify our markets geographically, we have also made the decision to redomicile the Company to the UK, where we have a substantial management presence overseeing our operations in the North Sea and Egypt, which together are expected to represent our largest source of revenues in 2012. Having our board and management meetings in the UK, with its central location between the Middle East and the Gulf of Mexico – our second and third largest revenue areas – will improve our ability to manage those operations and communicate with our customers and regional management teams. We do not expect our U.S. employment to be impacted by this move. Rather, we believe this transaction will position the Company competitively to increase its earnings power over the long term so that we can continue to grow our fleet and employment opportunities in all the markets in which we operate.”

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Offshore Energy Today Staff, February 28, 2012