Thursday, April 13
2000
Improved results
from Rowan
"The future looks bright. It would be nice if the future
would hurry!" That was the word from C. R. Palmer, Chairman
and Chief Executive Officer, Rowan Companies, Inc., which today
reported improved financial results. For the three months ended
March 31, 2000, the company generated net income of $6.1 millionon
revenues of $127.7 million, compared to a net loss of $10.0 million
on revenues of $100.1 million in the first quarter of 1999.
The improvement in results between the
first quarters of 1999 and 2000 was largely due to the contribution
of the drilling division. Results for the first quarter of 2000
were negatively impacted by mobilization expense of approximately
$3.2 million, or about $.02 per share, to relocate Gorilla IV
and the Arch Rowan from the North Sea to the Gulf of Mexico.
"Quarter- to-quarter comparisons reflect
the volatility in the contract drilling business," Palmer
commented. He said Rowan's offshore rig utilization was 86%
during the first quarter of 2000, versus 49% in the first quarter
of 1999 and 83% in the fourth quarter of 1999. "Our average
offshore day rate during the first quarter of 2000," he
noted, "was $42,600, versus $57,300 in the first quarter
of 1999 and $38,600 in the fourth quarter of 1999."
"The relocation of Gorilla IV and
the Arch Rowan completes our redeployment of Rowan assets to
our two most promising markets at present, the Gulf of Mexico
and offshore eastern Canada.," said Palmer. "We continue
to believe that the fundamentals are in place for continued improvement
in the company's financial performance."
NNS
chairman's pay doubles
The Virginian-Pilot has been looking
at the annual proxy statement filed by Newport News Shipbuilding
and reports that, for the second year in a row, chairman William
P. Fricks has seen his pay at least double.
Last year, reports the newspaper, Fricks,
who is also the shipyard's chief executive, earned $2.74 million
in salary, bonuses and other compensation. He made $1.33 million
in 1998 and $593,836 in 1997.
The paper cites a shipyard statement crediting
Fricks for "leading the company's outstanding financial
performance in 1999 through substantial challenges that included
a merger attempt, two unsolicited takeover proposals and a labor
dispute.''
Despite the distractions, the yard's earnings
rose 47 percent to $97 million, or $2.72 a share, last year.
Fricks' 1999 compensation includes $560,000
in base salary, an annual bonus of $850,000, a long-term incentive
payout of $1,017,500 and other compensation of $310,915. He also
received options to buy 61,040 shares of company stock.
Those options are "underwater,'' meaning
the exercise price is above the stock's current trading price.
The exercise price is $32.44 each, and the stock closed Wednesday
at $30.31 a share, unchanged for the day.
However, Fricks has until Jan. 3, 2009,
to exercise the options. Should the stock price rise 10 percent
a year, the options could be worth $3.16 million.
Meeting
on managing High-Speed Commercial Vessel Traffic
The useful e-mail newsletter produced by law firm Haight Gardner
Holland & Knight notes that the U.S. Coast Guard will hold
a public meeting in Oakland, California on May 2, 2000, to solicit
comments on the impact of high-speed commercial vessels, both
ferries and cargo vessels, on the users of the navigable waters
of the United States. By their speed and potential numbers, high-speed
commercial vessels introduce another dimension into the conventional
mix of slower commercial vessels, fishing vessels, and recreational
vessels. Some mariners already believe the waterways to be too
congested with existing vessels. The Coast Guard hopes to receive
input from all stakeholders on this issue so it can determine
if there is a need for regulatory and other policy action that
will enhance waterways safety for all vessels. It is particularly
interested in which options should be dealt with locally, and
which have regional or national implications. It will consider
all comments received from this
meeting and those submitted to the docket to formulate policy
on the
management of national waterways. Comments on this issue should
be
submitted by July 2, 2000. 65 Fed. Reg. 19806 (April 12, 2000).
European
Commission approves shipbuilding aid schemes in Netherlands.
The European Commission has decided to approve the prolongation
of a shipbuilding aid scheme for Dutch shipyards into the current
year. It has also decided not to raise any objections to amendments
in the application of general export credit arrangements to ships
for the remainder of this year which will result in support being
changed instead to direct grants to the exporting yards. Both
schemes, when used alone or together, will respect the aid ceilings
laid down in Council Regulation 1540/98 establishing new rules
on state aids to shipbuilding.
The prolonged shipbuilding aid scheme,
which is unchanged from that approved by the Commission in 1999,
provides contract-related aid to Dutch shipyards in the form
of grants for the building of ships. Expenditure under this scheme
in 2000 is expected to be HFL 130 million (about $60million).
What all this means is that for the remainder
of 2000, funds hitherto available for interest rate support for
exports of ships will now be used as direct grants to exporting
Dutch shipyards of up to 3.5% of the contract value. Expenditure
under these new arrangements for the export of ships in 2000
is
expected to be around HFL 40 million (about $18 million).
Change
of tack at Ocean Rig
Ocean Rig ASA, which has two Bingo 9000 rigs under construction
at Friede Goldman Offshore, may be courting acquisition suitors.
On April 3 it announce that its main shareholder,
Bjarne Skeie, had assumed the position as Chairman of the Board
of Ocean Rig, succeeding Tom B. Knudsen whocontinues as legal
advisor to the company.
On April 10, it announced that the Board
of Directors had decided to change the company's business strategy.
"The company will now create value for the shareholders
by actively seeking to participate in the ongoing restructuring
and consolidation of the drilling industry," said a statement
which added that
the company had retained Pareto Fonds ASA as financial advisor
in this connection.
Meantime, Umoe Olje og Gass AS (Umoe),
the independent project evaluation team hired under Ocean Rig's
January 2000 settlement agreement with Friede Goldman, has confirmed
expected completion
of Bingo 9000-1 during the fourth quarter 2000. Umoe is currently
reviewing the progress on Bingo 9000-2 and expects to render
an opinion in the near future as to the status of that project's
December 31, 2000 delivery date.
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