GlobalSantaFe Reports First Quarter 2006 Results
GlobalSantaFe Corporation (NYSE: GSF) reported net income for the quarter ended March 31, 2006, of $162.9 million, or 65 cents per diluted share, on revenues of $679.4 million. The results compare with net income of $50.2 million, or 21 cents per diluted share, on revenues of $488.6 million for the same quarter of 2005.
"GlobalSantaFe achieved record quarterly revenues during the first three months of 2006, and our fleet produced the highest average dayrates in the history of the company," said GlobalSantaFe President and CEO Jon Marshall. "With a projected 40 percent increase in average dayrates by year-end and a total revenue backlog over $7 billion, we are poised for a year of record revenues and earnings in 2006."
In recognition of the improving market conditions and record contract backlog, GlobalSantaFe's board of directors on March 3, 2006, authorized the repurchase of up to $2 billion of the company's outstanding ordinary shares. To date, the company has repurchased $348.1 million of its shares, of which $130.9 million were repurchased by the close of the first quarter.
First Quarter 2006 Analysis
The significant improvement in first quarter 2006 net income was primarily due to a 237 percent increase in operating income to $180.8 million from $53.6 million in the prior-year period. This improved performance primarily resulted from higher contract drilling dayrates and utilization, which drove a 226 percent increase in contract drilling operating income to $180.2 million for the first quarter of 2006 from $55.2 million in the same quarter of 2005.
In the first quarter of 2006, average revenues per day from contract drilling increased 48 percent to $101,000 per rig from $68,400 in the first quarter of 2005. The average utilization of the company's fleet increased to 94 percent, compared with 91 percent in the first quarter of 2005.
The combined drilling management services and oil and gas segments
reported operating income of $8.1 million on revenues of $161.3 million for
the first quarter of 2006, compared with operating income of $16.0 million on
revenues of $154.1 million in the first quarter of 2005. The decline in
operating income was primarily related to losses on two wells and fewer
turnkey projects due to limited rig availability. The segment reported a
total of 18 turnkey projects during the first quarter of 2006, compared with
26 in the first quarter of 2005.
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