Rowan Reports First Quarter Operating Results
|Wednesday, April 14, 2004
For the three months ended March 31, 2004, Rowan (NYSE: RDC) incurred a net loss of $11.3 million, or $.11 per share, on revenues of $170.5 million, compared to a loss of $17.2 million, or $.18 per share, on revenues of $131.4 million in the first quarter of 2003.
Rowan's Gulf of Mexico rig utilization was 82% during the first quarter of 2004, versus 92% in the fourth quarter of 2003 and 90% in the year-earlier period, and our average Gulf of Mexico day rate of $39,700 decreased by $2,700, or 6%, from the fourth quarter of 2003, but was up by $5,000, or 14%, from the year-earlier period. Land rig utilization was 73% during the first quarter of 2004, versus 80% in the fourth quarter of 2003 and 66% in the year- earlier period, and our average land rig day rate of $11,000 decreased by less than $200, or 1%, from the fourth quarter of 2003, but was up by $1,200, or 12%, from the year-earlier period.
Danny McNease, President and Chief Executive Officer, commented, "Our first quarter 2004 results, while improved over the prior year period, were down from the fourth quarter of 2003 and well below what we had originally anticipated. The primary cause of our poor financial performance in the first quarter was the inadequate utilization of several of our Gulf of Mexico rigs, including two Gorillas and one Super Gorilla class jack-up that have been largely idle since January. In addition, the amendment of our North Sea drilling contract for Gorilla VII had the effect of reducing our drilling revenues by more than $2 million during the quarter.
"We continue to see signs of more favorable business conditions on the horizon. We believe that as the Gulf of Mexico jack-up market continues to tighten, the upward pressure on day rates will intensify. We look forward to the addition to our fleet later this month of our first Tarzan Class jack-up, the Scooter Yeargain, which will enhance our capability in the emerging deep shelf market. We are continuing to pursue overseas opportunities for our Gorilla and Super Gorilla class jack-ups and fully expect that one or more of such rigs currently positioned in the Gulf of Mexico will be relocated abroad before the end of this year.
"Gorilla V completed its most recent assignment offshore eastern Canada in late-March, and we expect to have the rig working again in the area by the end of April. As previously announced, our agreement to temporarily reduce the day rate on Gorilla VII's drilling/production contract in the North Sea was made to assist in extending the productive life of the Ardmore field, and could yield work beyond the contract's minimum 18-month term.
"The prospects for our mining equipment group have never been better and our manufacturing backlog of $58 million is at a six-year high."