Bob Palmer, Chairman and Chief Executive Officer, commented, "The Gulf of Mexico market for offshore drilling rigs has collapsed. Five months ago, 191 rigs were under contract. Currently, there are 129 -- a decrease of 62 rigs.
"There is no question that at the current level of drilling activity, the supply of natural gas will fall -- as a result of depletion. At some point in the future, there will be a perceived gas shortage, at which time natural gas prices will rise, demand for drilling rigs will increase and financial results will improve -- dramatically.
"When that day arrives, Rowan will be ready -- with the necessary manpower, machines and money. In the meantime, we are scrambling to achieve a proper balance between utilization and day rates, never losing sight of our goal to deliver earnings of $4.50 per share -- sometime after 2003. Nearer term, our outlook is uncertain. Depending upon rig utilization and day rates, our fourth quarter results could be anywhere between a 10 cents per share loss and a 5 cents per share profit.
"The Gorilla V contract dispute with BP continues. Final arguments in the London trial were heard October 2nd, 3rd and 4th and a court decision should be handed down before year end. The Harris County, Texas litigation remains in the discovery phase though the trial date has again been postponed, possibly until the second quarter of next year. We remain confident of a favorable outcome."
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