ENSCO's net income was $38.5 million ($0.26 per diluted share) on revenues of $367.9 million for the six months ended June 30, 2004, compared to net income of $54.0 million ($0.36 per diluted share) on revenues of $387.2 million for the six months ended June 30, 2003. ENSCO's income from continuing operations was $39.3 million ($0.26 per diluted share) for the first six months of 2004, compared to $54.1 million ($0.36 per diluted share) for the six months ended June 30, 2003.
The average day rate for ENSCO's operating jackup rig fleet was $51,200 for the second quarter of 2004, compared to $47,500 in the prior year quarter. Utilization for the Company's jackup fleet decreased to 83% in the most recent quarter, from 88% in the second quarter of 2003. Excluding rigs in a shipyard for contract preparation, regulatory inspection and enhancements, ENSCO's jackup utilization was 88% in the most recent quarter, compared to 96% in the year earlier period. Lower utilization for ENSCO's North Sea jackup rigs was the primary reason for this decrease.
Carl Thorne, Chairman and Chief Executive Officer of ENSCO, commented on the Company's outlook and markets: "With international demand for jackups strengthening, we are proceeding as planned with rig relocations. We continue to make good progress with our fleet renewal program.
"The ENSCO 67 departed the Gulf of Mexico in June and will enter a shipyard in Singapore to undergo a major upgrade, including conversion from slot to cantilever configuration, with redelivery expected in the second quarter of 2005. We altered our plans to relocate ENSCO 93 and ENSCO 95 from the Gulf of Mexico to the Middle East when we were unable to meet the transport vessel's departure deadline in June. Both rigs were scheduled to enter a shipyard for enhancement upon arrival in the Middle East. In order to expedite rig availability in the Middle East, we decided to relocate ENSCO 88 in lieu of ENSCO 93. The ENSCO 88 upgrade is well underway in a Gulf of Mexico shipyard with expected completion in mid-August. The rig will thereupon mobilize to a Middle East shipyard to install additional quarters and should be available for work by mid-October, essentially in the same time frame as the original plan for ENSCO 93. ENSCO 95 will mobilize to a shipyard in the Middle East in late July to undergo a major upgrade, with redelivery in November 2004 as originally planned. ENSCO 93 has returned to work in the Gulf of Mexico.
"We continue our upgrade program in the Gulf of Mexico. ENSCO 68 is in a shipyard for a major enhancement with redelivery expected in October 2004. We expect ENSCO 87 to follow in the fourth quarter for a nine-month major upgrade. With respect to more limited upgrades, ENSCO 84 will enter a shipyard late in the third quarter for a four-month enhancement project. We now expect to incur approximately 21 rig-months of downtime in connection with all of our jackup rig enhancements during the remainder of this year. "Consistent with our expectations, the demand for premium jackups is strengthening with activity in the second half of the year expected to be stronger than in the first half. Drilling activity remains strong in the Pacific Rim, Middle East, and India, with attractive long-term work opportunities continuing to evolve. After having lagged other markets, the Gulf of Mexico and the North Sea are now showing signs of improvement."
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