With soaring revenues, Rowan wins drillship contract

AUGUST 6, 2013 — Offshore drilling contractor Rowan Companies plc (NYSE: RDC) reports that for the three months ended June 30, 2013 it generated net income from continuing operations of $82.8 million, or $0.67 per share, compared to $50.8 million, or $0.41 per share in the second quarter of 2012.  The second quarter of 2013 includes a $12.5 million after-tax gain, or $0.10 per share on the sale of a 116-C class jack-up rig (Rowan-Paris). Excluding the sale of the Rowan-Paris, net income from continuing operations was $70.3 million, or $0.57 per share.

Rowan’s revenues were $408.9 million in the second quarter of 2013, up 16% over the prior-year quarter due primarily to higher average day rates and higher utilization between periods.

CEO Matt Ralls, Chief Executive Officer, commented, “In addition to our strong second quarter operating results, we are very pleased to have recently received contracts for our second and third ultra-deepwater newbuild drillships at attractive rates. Our backlog is at an all-time high and we are optimistic that we will have our fourth newbuild drillship contracted in the coming months. Our high-spec jack-ups continue to roll over to new contracts at higher rates, which along with earnings from our newbuild drillships should provide strong earnings growth in 2014 and 2015.”

The latest drillship to get a contract is Rowan Reliance. It is expected to be delivered from Hyundai Heavy Industries’ Ulsan, South Korea shipyard at end October 2014. It has been contracted for three years by Cobalt International Energy, L.P. and is expected to operate in the U.S. Gulf of Mexico. The contract is expected to commence late January 2015 following mobilization.  The effective day rate for the work will be $602,000, including mobilization revenues, and adds $660 million to Rowan’s revenue backlog.

“We are very pleased to enter into this relationship with Cobalt,” said Mr. Ralls. “They have a very exciting growth story with a strong track record in ultra-deepwater exploration.  We will complement their growth potential through our expansion into the ultra-deepwater drilling segment with the most advanced drillships in the industry.  We are proud to have this opportunity to be part of the future success of this exciting company.”

The Rowan Reliance is one of four ultra-deepwater drillships being constructed for Rowan by HHI.  All four drillships are based on a GustoMSC P10,000 hull design, capable of drilling wells to depths of 40,000 feet in water depths up to 12,000 feet. The DP-3 compliant, dynamically positioned drillship will be equipped with retractable thrusters, two readily deployable seven-ram BOP systems, five mud pumps, dual mud systems and a maximum hookload capacity of 1,250 tons.