Rowan Reports Record Quarterly Revenues & Improved Operating Results
For the three months ended September 30, 2005, Rowan Companies generated net income of $74.6 million, or 67¢ per share, compared to $9.9 million, or 9¢ per share, in the same period of 2004. Revenues were a record $284.4 million in the third quarter of 2005, compared to $181.6 million in the third quarter of 2004. The current period results included gains on asset sales and a loss related to hurricane damage that together contributed approximately 18¢ per share, net of tax.
The Company generated income from continuing operations of $148.4 million, or $1.35 per share, on revenues of $751.4 million during the nine months ended September 30, 2005, compared to income from continuing operations of $11.1 million, or 10¢ per share, on revenues of $489.0 million during the same period of 2004. Net income was $160.3 million, or $1.46 per share, for the nine months ended September 30, 2005, compared to a net loss of $3.5 million, or 3¢ per share, for the nine months ended September 30, 2004.
Rowan's offshore rig utilization was 97% during the third quarter of 2005, unchanged from the comparable 2004 period. The Company's average Gulf of Mexico day rate was a record $74,400 during the third quarter of 2005, up by $7,800, or 12%, from the second quarter and by $27,900, or 60%, from the comparable 2004 period. Rowan's land rig utilization was 89% during the third quarter of 2005, up from 83% in the comparable 2004 period. The Company's average land rig day rate was $18,800 during the third quarter of 2005, up by $1,700, or 10%, from the second quarter and by $6,400, or 52%, from the comparable 2004 period.
As previously reported, Rowan lost four jack-up rigs and had one jack-up severely damaged during Hurricanes Katrina and Rita. The Company recorded an $8.9 million loss during the third quarter of 2005 related to these events. The excess of Rowan's insurance coverage over the carrying value of the rigs of approximately $26 million will be recognized upon collection. The Company lost 58 rig operating days associated with these rigs during the third quarter and approximately $4 million of drilling revenues.
Danny McNease, Chairman and Chief Executive Officer, commented, “Our drilling operations continue to produce record results and our near-term outlook remains very favorable. Rowan's average offshore day rate worldwide is currently around $100,000 or about 20% higher than our average during the 2005 third quarter. And, despite the loss of revenues from five rigs and the recent sale of two others, our daily offshore drilling revenues in early December should be higher than they were in mid-August, when those seven rigs were still part of the Company's offshore fleet. Absent a significant change in market fundamentals, we believe that the upward pressure on day rates will continue.
“We plan to expand our revenue base using our existing working capital and cash flows from operations. As previously reported, by the middle of next year we will have eight new land rigs and one refurbished land rig working under term contracts and generating approximately $200,000 of incremental drilling revenues per day. The Hank Boswell, our third Tarzan Class jack-up, is on schedule for delivery during the fourth quarter of 2006. In addition, we will soon commence the construction of a fourth Tarzan Class rig, which should be delivered during the third quarter of 2007.
“Our external manufacturing backlog is a record $318 million and includes one jack-up rig and three rig kits that should provide approximately $206 million in revenues over the next two years. In addition, we have orders for 14 mining loaders and 41 mud pumps that will be delivered within the next 12 months.”