GlobalSantaFe Reports Second Quarter Results

GlobalSantaFe Corporation reported net income for the quarter ended June 30, 2002, of $73.4 million, or $0.31 per diluted share, on revenues of $501.7 million. For the corresponding 2001 quarter, the company reported net income of $84.3 million, or $0.69 per diluted share. For the six months ended June 30, 2002, GlobalSantaFe reported net income of $150.5 million, or $0.63 per diluted share, on revenues of $990.4 million. This compares to net income of $125.0 million, or $1.03 per diluted share, for the six months ended June 30, 2001. Comparisons to the 2001 financial results may not be meaningful as they reflect only the performance of Global Marine prior to the November 2001 merger that formed GlobalSantaFe. Operating income for GlobalSantaFe's contract drilling business of $97.9 million for the second quarter of 2002 was up slightly from the first quarter of 2002. During the second quarter, the company continued to make good progress on its merger integration. The company's operating expenses were in line with its expectations, and operating margins for its jackup drilling rigs worldwide were generally stable or improving. The U.S. Gulf of Mexico jackup market showed noteworthy improvement, with average dayrates for the company's Gulf of Mexico-based jackups at the end of the second quarter gaining about $4,100 from levels realized at the end of the earlier quarter. This improvement was offset, however, by a weaker market for floating rigs (semisubmersibles and drillships) worldwide. One of the company's North Sea- based semisubmersibles and its mid-water-depth drillship were idle for about half of the second quarter, while a Gulf of Mexico-based semisubmersible began a new contract at a significantly lower dayrate. Impacting revenues in the 2002 second quarter, the company had seven of its jackups in shipyards at various times for planned upgrades. Four of the seven rigs have since returned to service, and the company expects at least two of the remaining three rigs to be working by the end of the third quarter of 2002. Excluding the rigs in the shipyard, GlobalSantaFe's worldwide jackup utilization in the second quarter was 99 percent.