Rowan Reports Improved Operating Results
For the three months ended March 31, 2005, Rowan Companies, Inc. (NYSE: RDC) generated net income of $43.4 million, or 40(cents) per share, compared to a loss of $11.3 million, or 11(cents) per share, in the same period of 2004. Income from continuing operations was $44.6 million, or 41(cents) per share, on revenues of $231.8 million in the first quarter of 2005, compared to a loss of $6.4 million, or 6(cents) per share, on revenues of $149.4 million in the first quarter of 2004.
Current period results included $28.6 million of gains on asset sales, which improved the Company's after-tax income by approximately 16(cents) per share. Excluding the effects of these transactions, Rowan's first quarter 2005 income from continuing operations and net income would have been approximately 25(cents) and 24(cents) per share, respectively.
Rowan's offshore rig utilization was 98% during the first quarter of 2005, versus 99% in the fourth quarter of 2004 and 84% in the year-earlier period. Our average Gulf of Mexico day rate was $58,000 during the first quarter, up by $7,400, or 15%, from the fourth quarter of 2004 and by $18,300, or 46%, from the year-earlier period. Land rig utilization was 84% during the first quarter of 2005, versus 73% in the year-earlier period. Our average land rig day rate was $16,300 during the first quarter, up by $2,500, or 18%, from the fourth quarter of 2004 and by $5,300, or 48%, from the year-earlier period.
Danny McNease, Chairman and Chief Executive Officer, commented, "Rowan's drilling division continues to reach new heights. First quarter revenues were 15% more than our previous quarterly high reached in 2001. The Company's drilling fleet has been almost fully utilized over the past 11 months and our average day rate continues to improve with each new assignment. We have commitments in hand for rates never before achieved in our long history of drilling in the Gulf of Mexico. We believe that this momentum will continue throughout 2005, barring any collapse in oil and natural gas prices.
"As previously announced, Gorilla VI will soon relocate from the Gulf of Mexico to eastern Canada for work beginning around mid year. This assignment affords Rowan an opportunity to both improve the return on a significant asset and strengthen conditions in the Company's most prominent drilling market.
"Gorilla VII continues to produce from the North Sea's Ardmore Field under a contract that runs through 2005. The Company's first quarter 2005 revenues included $5.3 million related to this assignment, which we have continued to recognize only upon collection. Assuming that field production remains sufficient to sustain the project throughout the year, we believe this contract will continue to generate significant revenues for Rowan in the future.
"The prospects for our manufacturing division remain solid. Our manufacturing backlog continues to grow and, at $87 million, is at an all-time high. Strong commodity prices should sustain demand for our mining equipment and parts over the near term.
"On a personal note, I want to congratulate Ed Thiele on his
impending retirement after 36 years of distinguished service to Rowan,
the past 16 of which have been as the Company's Chief Financial
Officer. Ed's successor in this position is Bill Wells, who has served
as Rowan's Controller for the past eleven years."