Ensco International Incorporated reported net income of $220.7 million ($1.56 per diluted share) on revenues of $514.1 million for the quarter ended March 31, 2009, as compared to $272.0 million ($1.88 per diluted share) on revenues of $568.5 million for the prior year quarter.
The average day rate for Ensco's 43-rig jackup fleet for the quarter ended March 31, 2009, increased 18% to $168,200, as compared to $142,800 in the prior year quarter. Utilization of the Company's jackup fleet was 80% in the first quarter of 2009 compared to 95% in the first quarter of 2008.
Dan Rabun, Chairman, President and Chief Executive Officer, commented on the Company's results, deepwater initiative and outlook: "Although we realized higher average jackup day rates in the first quarter compared to a year ago, we are seeing the impact of lower oil and gas prices on utilization. Lower jackup utilization during the first quarter was principally due to a reduction in activity in the Asia Pacific and North and South America regions. We also had two of our jackup rigs in a shipyard preparing for work commitments in Mexico and another rig preparing for work in Venezuela.
"ENSCO 7500 recently commenced its contract in Australia at a day rate of $550,000. The effective day rate to be recognized for ENSCO 7500 is $687,000 inclusive of deferred day rate mobilization revenue that will be amortized over the expected 17-month contract period.
"The first of our seven new ENSCO 8500 Series® ultra-deepwater semis, ENSCO 8500, is expected to commence operations in June 2009 after final testing and outfitting. We recently held the naming ceremony for our second 8500 Series rig, ENSCO 8501, and expect to complete mobilization and final preparations prior to commencement of a term drilling contract in the Gulf of Mexico by late third quarter. The remaining five 8500 Series rigs are expected to be delivered over the next three and a half years. We believe contributions from our deepwater fleet will begin to meaningfully impact our results over the course of 2009, and will become even more significant over the next several years as our new rigs are added to the fleet.
"Our balance sheet and liquidity remain strong. We increased our cash position during the first quarter by $138 million, to $927 million. Total debt was $291 million as of March 31, 2009.
"As we indicated last quarter, 2009 will be a challenging year. Some of our jackup rigs will be without contracts for some portion of the year. We are aligning our operations to current activity levels, and expect cost reduction initiatives to offset some of the negative financial impact from the softening jackup market. As noted, we also expect to benefit from the addition of our first two 8500 Series deepwater rigs as they commence operations this year.
"With our growing deepwater fleet, efficient cost structure and strong balance sheet, we believe Ensco is well positioned despite the challenging environment."
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