Net income for year ended December 31, 2006 was $769.7 million ($5.04 per diluted share) on revenues of $1,813.5 million, compared to net income of $284.9 million ($1.87 per diluted share) on revenues of $1,034.3 million for the year ended December 31, 2005. Income from continuing operations for the year ended December 31, 2006 was $758.6 million ($4.96 per diluted share) compared to $270.0 million ($1.77 per diluted share) for the year ended December 31, 2005.
Fourth quarter results included $4.7 million ($0.03 per diluted share) of income from discontinued operations related to the operations and sale of ENSCO 25, the Company's former Gulf of Mexico platform rig which was sold late in the fourth quarter.
The Company's income tax rate for the fourth quarter decreased to approximately 22%. The lower tax rate for the quarter is due to increased income in lower tax jurisdictions and the favorable settlement of several outstanding issues with tax authorities during the quarter.
The average day rate for ENSCO's jackup rig fleet for the quarter ended December 31, 2006, increased by 36% to $116,400, as compared to $85,900 in the prior year quarter. Utilization of the Company's jackup fleet increased to 96% in the most recent quarter, as compared to 87% in the quarter ended December 31, 2005.
The Company repurchased 1,116,000 shares of its common stock during the fourth quarter of 2006 at a total cost of $53.3 million, or an average price of $47.78 per share, as part of a $500 million share repurchase authorization. Under the program that commenced late in the first quarter of 2006, ENSCO has repurchased 3,461,000 common shares at a total cost of $160.0 million, or an average price of $46.23 per share, through the fourth quarter of 2006.
Dan Rabun, President and Chief Executive Officer of ENSCO, commented on the Company's current results and outlook: "We are pleased to report another excellent quarter and record year. Significantly higher day rates in all markets and an increase in rig operating days contributed to our stronger 2006 results, although a slow down in the Gulf of Mexico jackup market impacted our fourth quarter performance.
"Our new rig construction projects remain on schedule and within budget, with three of the four rigs committed upon completion. We expect to take delivery of ENSCO 108, our new ultra-high specification jackup rig, by the end of March. The rig is committed to a term project in Indonesia commencing early in the second quarter 2007. Deliveries of ENSCO 8500 and ENSCO 8501, two ultra-deepwater semisubmersible rigs, are expected in the second quarter of 2008 and first quarter of 2009, respectively. Both rigs are being built against firm multi-customer long term drilling contracts. ENSCO 8502, our third 8500 Series(TM) rig, is scheduled for delivery in late 2009. We continue to discuss ENSCO 8502 work opportunities with several prospective customers.
"ENSCO 83, one of our 250' water depth capable Gulf of Mexico jackups rigs, is currently in a shipyard for enhancement work and final international outfitting. We expect to complete this project by May, which is approximately two months later than originally scheduled due to additional required steel work on the leg sections. As a result of this additional work, we currently expect to incur a total of approximately 130 shipyard days in 2007, compared to 491 in 2006. We also may outfit additional Gulf of Mexico jackup rigs for international service, which could increase shipyard days in 2007.
"We are positive about our 2007 outlook. International jackup markets are strong and are currently undersupplied. Two-thirds of our jackup fleet will be located internationally following mobilization of ENSCO 105 from the Gulf of Mexico to Tunisia and delivery of ENSCO 108. If the Gulf of Mexico jackup market continues to be soft, we believe this will result in further relocation of rigs to stronger international markets, which will tighten supply in the Gulf.
"A number of our Europe/Africa and Asia Pacific jackup rigs have realized increases in day rates since the first of the year. As a result, we expect sequential improvement in our first quarter 2007 results. We believe that this day rate improvement, coupled with commencement of ENSCO 108 operations early in the second quarter, will contribute to another record year in 2007."
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