ENSCO International Incorporated reported net income increased by 17% in the quarter ended March 31, 2008, to $272.0 million ($1.90 per diluted share) on revenues of $580.3 million, as compared to net income of $232.3 million ($1.54 per diluted share) on revenues of $514.1 million for the quarter ended March 31, 2007.
The average day rate for ENSCO's 44-jackup rig fleet for the quarter ended March 31, 2008, increased to $142,500, as compared to $133,200 in the prior year quarter. Utilization of the Company's jackup rig fleet was at 95% in the first quarter of 2008 compared to 93% in the first quarter of 2007.
Dan Rabun, Chairman, President and Chief Executive Officer, commented on the Company's results, outlook and deepwater initiative: "Our record first quarter operating performance was largely attributed to higher day rates for our 31-rig international jackup fleet and our deepwater semisubmersible rig. The average day rate increased by 19% for our international jackup rig fleet and by 43% for our deepwater semisubmersible rig over first quarter 2007 levels.
"We completed a scheduled enhancement project on ENSCO 93 during the first quarter, and the rig has returned to service in the Gulf of Mexico. We do not have any other rig enhancement projects scheduled for 2008, although such work may be required if any of our rigs are repositioned to other geographic locations. Under these circumstances, we anticipate a significant reduction in shipyard days in 2008 (63 days) as compared to the 442 and 491 days incurred in 2007 and 2006, respectively.
"We are nearing completion of the first of our ENSCO 8500 Series ultra-deepwater semisubmersible rigs. ENSCO 8500 is expected to be delivered late in the third quarter of 2008 and we anticipate commencing drilling operations in the U.S. Gulf of Mexico by mid-first quarter 2009 following completion of rig commissioning, mobilization and final outfitting. The other three 8500 Series rigs are currently scheduled for delivery in Singapore in the first and fourth quarters of 2009 (ENSCO 8501 and ENSCO 8502, respectively) and in the third quarter of 2010 (ENSCO 8503). With the announcement of the letter of intent for ENSCO 8503 at a rate of $510,000 per day with a primary term of two years, all four rigs are committed for multi-year operations in the Gulf of Mexico.
"We continually evaluate construction of additional deepwater rigs to meet the unprecedented demand for deepwater drilling. I am pleased to announce that our Board of Directors has authorized construction of an additional 8500 Series rig at a cost of approximately $515 million with a delivery date in the second half of 2011. Subject to negotiation of a mutually acceptable shipyard contract, it is contemplated that the new rig, to be named ENSCO 8504, will be the fifth in the series to be constructed by Keppel FELS of Singapore.
"Looking forward to the remainder of the year, we already have contracted virtually all of our international jackup rig days for 2008 and are now having discussions with customers concerning programs for 2009 and beyond. We also are seeing improvement in backlog and day rates for our 13-rig U.S. Gulf of Mexico jackup fleet. As a result, we remain very positive about our prospects for 2008. With the planned expansion of our deepwater fleet and continued strength in markets for our premium jackups, we believe we are well positioned for future growth."
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