Rowan Companies, Inc. drills oil and gas wells in offshore and onshore domestic and foreign areas. The offshore operations of the company consists of contract drilling services utilizing mobile drilling platforms. The company’s drilling fleet consists of 21 self-elevating mobile offshore drilling platforms, one mobile offshore floating platform and 14 land drilling rigs. The drilling operations of the company are conducted primarily in the Gulf of Mexico, the North Sea, offshore eastern Canada, Texas
LeTourneau, Inc., a wholly owned subsidiary of the company, operates a mini-steel
mill that recycles scrap, produces heavy equipment and designs and builds mobile offshore jack-up drilling rigs. The company completed the purchase of The Ellis Williams Company, Inc. and EWCO, Inc. dba Traitex Machine Co. in January 2000. International revenues accounted for 35 percent of 1999 revenues. Drilling services accounted for 57 percent of 1999 revenues. On January 12 Rowan reported net income of $70.2 million for 2000 versus a net loss of $9.7 million in 1999.
The company generated net income of $27.5 million on revenues of $184.2 million during the fourth quarter of 2000 compared to net income of $2.4 million on revenues of $121.4 million during the fourth quarter of 1999 and net income of $25.6 million on revenues of $190.8 million during the third quarter of 2000.
For the year ended December 31, 2000, Rowan generated net income of $70.2 million compared to a net loss of $9.7 million in 1999.
C. R. Palmer, Chairman and CEO, said, “Fourth quarter financial results met our expectations and were improved over the third quarter due largely to the contributions of the drilling and manufacturing divisions. Rowan’s offshore rig utilization was 96 percent during the fourth quarter and our average day rate of $55,700 increased by $2,800, or 5 percent, over the third quarter of 2000 and by $17,100, or 44 percent, over the year-earlier period.
“The reactivation of our land rig fleet is continuing; ten of our 14 rigs worked during the fourth quarter and two additional rigs are contracted for work beginning in the first quarter of 2001. Our average day rate during the fourth quarter of $9,500 increased by $1,300, or 16 percent, over the third quarter of 2000 and by $2,900, or 44 percent, over the prior year period. Construction of a LeTourneau-designed land rig, incorporating new and existing components, should be completed during the second quarter.
As many people are aware, recently there was an unsuccessful attempt to settle our contract dispute with BP. The facts are clear – our one-year contract with Amoco for the use of Gorilla V was in effect at the time that they were acquired by BP; therefore, BP is obligated to fulfill the terms and conditions of the contract. Rowan denies BP’s allegation that the rig was not ‘fit for purpose’. Gorilla V is a state-of-the-art drilling rig that is currently operating offshore eastern Canada.
“In addition, we believe that BP’s co-venturers in the Arbroath Project – Enterprise and Amerada Hess –tortiously interfered with the Gorilla V contract and they, along with BP, have been sued by Rowan in Harris County, Texas. That trial is scheduled to begin on April 16th. Rowan’s position is clear – a deal is a deal and the rule of law will prevail. I repeat a previous comment – ‘they picked on the wrong cat, and that error in judgement will have adverse consequences to their pocketbook and reputation”.