Global Marine Inc. reported net income for the quarter ended September 30, 2001 was $62.1 million, or $0.34 per diluted share, on revenues of $314 million. For the corresponding 2000 quarter, the company reported net income of $32.3 million, or $0.18 per diluted share, on revenues of $272 million.
For the nine months ended September 30, 2001, the company reported net income of $187.1 million, or
$1.03 per diluted share, on revenues of $965 million. Net income includes a one-time gain of $22.8
million, or $0.12 per diluted share, on the second quarter 2001 sale of a special-purpose rig. This compares to net income of $73.0 million, or $0.41 per diluted share, on revenues of $707 million for the nine months ended September 30, 2000.
Bob Rose, Global Marine Chairman, President and CEO, said, "Global Marine's financial and operating performance was strong. Despite weakening offshore drilling rig demand in the Gulf of Mexico, utilization of our fleet remained high, and average dayrates for our rigs reached the highest level in the company's history.
Additionally, the company's ultra-deepwater fleet continued to deliver outstanding performance for
both customers and shareholders."
Global Marine's worldwide fleet utilization in the third quarter 2001 was 95 percent. In the U.S.
Gulf of Mexico, where industry jackup rig utilization
was 79 percent, Global Marine's jackup fleet achieved utilization of 98 percent. "One of Global Marine's strengths," Rose said, "is its ability to achieve superior dayrates in a rising market and superior utilization in a weak market, as the Gulf of Mexico is today."
Global Marine's contract drilling segment continued to benefit from the company's recently expanded ultra-deepwater fleet, which experienced 0.5 percent non-revenue downtime for the quarter and less than one percent non-revenue downtime for the nine months ended September 30, 2001. This
exceptional performance, along with high utilization throughout the fleet and improving
international markets, allowed the contract drilling segment to earn its highest average dayrates and post record revenues of $223 million in the third quarter.
Global Marine's drilling management services segment also turned in an outstanding performance in the third quarter, delivering operating profit of $9.8 million on revenues of $89 million. Despite significantly reduced Gulf of Mexico drilling activity from declining U.S. natural gas prices, Applied Drilling Technology Inc. (ADTI), Global Marine's domestic drilling management services group, completed 29 turnkey projects, 26 of which were profitable. ADTI employed an average of nine rigs in the third quarter compared to an average of about eleven in the second quarter of 2001.
"Although we still believe the U.S. Gulf of Mexico natural gas market will rebound sharply, the weakening economy, exacerbated by the tragic events of September 11th, will push the inflection point of that recovery period further into the future. Meanwhile, it is possible dayrates in the U.S. Gulf of Mexico could reach cash breakeven levels while international markets remain strong."
During the third quarter, Global Marine mobilized two rigs from
the Gulf of Mexico - the Glomar
Adriatic IX to West Africa and the Glomar Baltic I to Trinidad. Global Marine also reported it
received a commitment that will require moving another rig out of the Gulf of Mexico. The Glomar
Adriatic III is expected to depart the Gulf of Mexico in November to begin a multi-well program in Trinidad.
"Strong financial performance aside, the biggest news of the quarter," Rose said, "was the
September announcement of Global Marine's merger agreement with drilling contractor Santa Fe
International Corporation. We believe this merger of equals will create value for our stockholders
and a stronger, more dynamic partner for our customers."
To date, the merger has received clearance by the U.S. Federal Trade Commission and is under consideration by the U.K. Office of Fair Trading. A special meeting of stockholders to approve the merger is scheduled for November 20, 2001, and the merger is expected to close the same day.