Rowan Reports Narrower 2nd Quarter Loss
|Thursday, July 15, 2004
Rowan (NYSE: RDC) reports second quarter operating results. For the three months ended June 30, 2004, the Company incurred a net loss of $2.1 million, or $.02 per share, on revenues of $190.9 million, compared to a net loss of $6.6 million, or $.07 per share, on revenues of $158.1 million in the second quarter of 2003.
Rowan's Gulf of Mexico rig utilization was 88% during the second quarter of 2004, versus 82% in the first quarter of 2004 and 93% in the year-earlier period, and our average Gulf of Mexico day rate of $42,200 increased by $2,500, or 6%, from the first quarter of 2004, and by $6,500, or 18%, from the year-earlier period. Land rig utilization was 82% during the second quarter of 2004, versus 73% in the first quarter of 2004 and 76% in the year-earlier period, and our average land rig day rate of $11,400 increased by $400, or 4%, from the first quarter of 2004, and by $800, or 7%, from the year-earlier period.
Danny McNease, Chairman and Chief Executive Officer, commented, "On June 2, we announced that all 25 Rowan offshore rigs were under contract for the first time in about six months. Two of our Gorilla rigs and one Super Gorilla class jack-up had been largely idle since January. Our offshore fleet utilization was 98% during June and has remained near 100% thus far in July. We have continued to add to our backlog of drilling commitments in the Gulf of Mexico and, in many instances, have obtained day rate increases as our contracts have turned over. We believe these favorable trends will continue throughout the third quarter, barring any dramatic decline in oil and natural gas prices.
"We continue to aggressively pursue overseas opportunities for our Gorilla and Super Gorilla class jack-ups. Gorilla V will conclude its current drilling assignment offshore eastern Canada within the next 30 days. As previously announced, the rig will then be relocated to the North Sea for a one-well contract expected to span almost eleven months of drilling, mobilization and outfitting time and provide approximately $38 million of revenues. We expect our departure from Canada to be temporary and believe that one of our Gorilla rigs currently positioned in the Gulf of Mexico could be relocated there by the second quarter of 2005. We are also pursuing contracts for work offshore Qatar, Trinidad and Venezuela beginning later this year or in early 2005.
"The revenues contributed by our manufacturing division during the second quarter of 2004 were the highest in their ten-year history. Our manufacturing backlog of $58.5 million is up by almost $42 million in the past year.
"Included in the second quarter results are the effects of gains on helicopter sales, which reduced aviation operating expenses by $4.8 million, and a $4.3 million reduction in estimated airline revenue accruals following the introduction of a new passenger ticket tracking system. Collectively, these items had a negligible effect on the Company's per share loss during the period."