Ensco Reports $282.3MM Net Income for 3Q
Ensco has reported net income of $282.3 million ($1.99 per diluted share) on revenues of $635.8 million for the quarter ended September 30, 2008, as compared to $266.7 million ($1.82 per diluted share) on revenues of $536.4 million for the year earlier quarter.
The Company incurred a loss from discontinued operations for the third quarter of 2008 (net of tax) of $18.9 million ($0.13 per diluted share) related to the loss of ENSCO 74, a Gulf of Mexico jackup rig that was presumed to have sunk in the aftermath of Hurricane Ike in September. Income from continuing operations was $301.2 million ($2.13 per diluted share) for the quarter ended September 30, 2008, as compared to income from continuing operations of $259.4 million ($1.77 per diluted share) for the quarter ended September 30, 2007.
For the nine months ended September 30, 2008, net income was $851.0 million ($5.97 per diluted share) on revenues of $1,828.3 million as compared to $753.4 million ($5.08 per diluted share) on revenues of $1,570.9 million for the year earlier nine month period. Income from continuing operations for the nine months ended September 30, 2008 was $859.5 million ($6.03 per diluted share) as compared to income from continuing operations of $733.3 million ($4.94 per diluted share) for the nine months ended September 30, 2007.
The average day rate for Ensco's 43-rig jackup fleet for the quarter ended September 30, 2008, increased 10% to $156,900, as compared to $142,100 in the prior year quarter. Utilization of the Company's jackup fleet was 97% in the third quarter of 2008 compared to 90% in the third quarter of 2007.
Dan Rabun, Chairman, President and Chief Executive Officer, commented on the Company's results, strategic deepwater initiative and outlook: "We reported another solid quarter despite weather-related issues that adversely impacted financial results, most notably the loss of one of our Gulf of Mexico jackup rigs as a result of Hurricane Ike. We also experienced $16.3 million of deferred revenues related to waiting on weather on two rigs in New Zealand, where we earned day rates but deferred recognition of the revenue until commencement of drilling operations in accordance with applicable accounting standards. Increases in average day rates in all regions and higher utilization of our jackup rig fleet contributed to the sequential improvement in our third quarter results.
"The first of our seven new ENSCO 8500 Series(R) ultra-deepwater semis, ENSCO 8500, was delivered in late September and currently is mobilizing to the Gulf of Mexico. Following completion of rig commissioning, mobilization and final outfitting, the rig is scheduled to commence operations under a four-year drilling contract by mid-first quarter 2009. With the expected total fleet addition of the seven new 8500 Series deepwater rigs by 2012, we anticipate that our deepwater rig fleet will contribute approximately one-third of our revenue once all the new rigs are delivered and operational.
"Our balance sheet remains strong. We ended the third quarter with more cash and liquid investments than debt, $486 million of cash and short-term investments against $300 million of debt. Half of our debt is not due until 2027, and our debt repayments on the balance are less than $20 million annually.
"Although it is difficult to predict the impact of the current global financial crisis upon our customers and markets, we believe our strong balance sheet, favorable contract backlog, conservative approach to internally funding our new rig expansion program and the growing contribution from our 8500 Series ultra-deepwater rigs will be a competitive advantage for the Company in years to come."
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