GlobalSantaFe Announces First Quarter 2004 Results

GlobalSantaFe Corporation (NYSE: GSF) reported net income for the first quarter ended March 31, 2004, of $8.7 million, or $0.04 per diluted share, on revenues of $380.0 million, as compared to net income of $45.9 million, or $0.20 per diluted share, on revenues of $424.4 million for the same quarter in 2003. Net income for the first quarter 2003 included $22.1 million, or $0.10 per diluted share, from the settlement of a claim filed in 1993 with the United Nations Compensation Commission.

Revenues for the first quarter of 2004, and 2003, exclude $26.9 million and $28.6 million, respectively, related to revenues from land rig drilling operations, which are reflected as discontinued operations. As previously reported, GlobalSantaFe has entered into an agreement to sell its worldwide land drilling assets, with the transaction expected to be completed during the second quarter of 2004.

The decline in the company's net income for the first quarter of 2004 primarily reflects a decrease in contract drilling operating income to $15.9 million from $37.1 million in the same quarter of the previous year. The lower operating income from the contract drilling segment was mainly due to decreased revenues resulting from lower dayrates and utilization from the company's rigs in the deepwater market, the North Sea and West Africa, partially offset by higher dayrates and utilization for its jackup rigs in the U.S. Gulf of Mexico and improved utilization in the Middle East and South East Asia. The impact of this decrease in revenues on first quarter results for contract drilling was partially offset by lower expenses related to labor, repair and maintenance, and insurance.

For the first quarter of 2004, the drilling management services segment reported operating income of $5.3 million, up from $2.7 million in the same period of 2003. The increased operating income for this segment resulted from improved margins on turnkey projects and a slight increase in the number of turnkey projects performed during the first quarter of 2004, as compared to the first quarter of the prior year.

GlobalSantaFe's President and Chief Executive Officer Jon Marshall said, "We continue to see stable to improving conditions for the worldwide jackup market and expect improving conditions for the higher specification deepwater market in the latter half of this year and into 2005. To make certain that GlobalSantaFe remains highly competitive and positioned to deliver value to our customers and shareholders, we continue to focus our efforts across the company on maintaining our high safety and operating standards while improving our cost structure, particularly in contract drilling."