Read Larry Connors' blog – Short Term Trading Strategies
(Logo: http://www.newscom.com/cgi-bin/prnh/20081031/DA43093LOGO)
Matt Ralls, Rowan's President and Chief Executive Officer, said, "In early 2009, we suspended construction of this rig due to liquidity concerns and a weakening jack-up drilling market, pending a decision in the third quarter about whether to complete or cancel this rig. We have now decided to resume construction based on substantial positive changes in our liquidly outlook through 2010 and our expectation of generating an attractive return on the $120 million of net capital remaining to complete construction on this rig."
"We are confident that there will be an increase in demand for very capable, high-specification jack-ups for deep, difficult wells going forward. Further, we believe the recovery outlook in global oil demand and a potential re-tightening of rig markets will have gained momentum by the time this rig is delivered in 2012," concluded Ralls.
In late 2007, Rowan signed construction contracts with Keppel for four EXL (enhanced LeTourneau Super 116E) class jack-up rigs. The EXL will employ the latest technology to drill high-pressure/high-temperature and extended-reach wells in jack-up markets throughout the world, and will be equipped with a hook-load capacity of 2 million pounds, 70 feet of cantilever reach, 477 feet of leg length, and the mud pumping horsepower to drill up to 35,000 feet. The Company's first three EXL rigs remain on schedule and on budget, with deliveries scheduled for the second, third and fourth quarters of 2010, respectively.
The Company estimates that the capital remaining to complete construction of the fourth EXL rig is $120 million, net of approximately $30 million of penalties and excess inventory that would have been incurred if the project had been canceled. The decision to resume construction is not expected to significantly impact the Company's 2009 capital expenditures which are estimated at $630 million, but will increase expected 2010 capital expenditures by around $50 million to a range of approximately $375-400 million. The Company anticipates funding these capital expenditures through available cash and operating cash flows.
Construction also continues on schedule and on budget for Rowan's second and third 240C jack-up rigs, the Ralph Coffman and the Joe Douglas, with delivery of those rigs scheduled for the first quarter of 2010 and the third quarter of 2011, respectively.
Rowan Companies, Inc. is a worldwide provider of contract drilling services utilizing a fleet of 22 offshore jack-up rigs and 32 deep-well land drilling rigs. The Company also owns and operates a manufacturing division that produces equipment for the drilling, mining and timber industries. For more information on Rowan, please visit www.rowancompanies.com.
This report contains forward looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, including, without limitation, statements as to the expectations, beliefs and future expected financial performance of the Company that are based on current expectations and are subject to certain risks, trends and uncertainties that could cause actual results to differ materially from those projected by the Company. Among the factors that could cause actual results to differ materially include oil and natural gas prices, the level of offshore expenditures by energy companies, energy demand, the general economy, including inflation, capital markets conditions, weather conditions in the Company's principal operating areas and environmental and other laws and regulations. Other relevant factors have been disclosed in the Company's filings with the U. S. Securities and Exchange Commission.
SOURCE Rowan Companies, Inc.
http://www.rowancompanies.com
More News:
Market Updates |
Stock Alerts |
All Trading News |
Stock Index
About TradingMarkets | Contact | Advertise | Careers | Link to Us | Site Map | Help | Terms & Conditions | Privacy Policy | Return Policy | Testimonials | Feedback
The Connors Group, Inc. ("Company") is not an investment advisory service, nor a registered investment advisor or broker-dealer and does not purport to tell or suggest which securities or currencies customers should buy or sell for themselves. The analysts and employees or affiliates of Company may hold positions in the stocks, currencies or industries discussed here. You understand and acknowledge that there is a very high degree of risk involved in trading securities and/or currencies. The Company, the authors, the publisher, and all affiliates of Company assume no responsibility or liability for your trading and investment results. Factual statements on the Company's website, or in its publications, are made as of the date stated and are subject to change without notice.
It should not be assumed that the methods, techniques, or indicators presented in these products will be profitable or that they will not result in losses. Past results of any individual trader or trading system published by Company are not indicative of future returns by that trader or system, and are not indicative of future returns which be realized by you. In addition, the indicators, strategies, columns, articles and all other features of Company's products (collectively, the "Information") are provided for informational and educational purposes only and should not be construed as investment advice. Examples presented on Company's website are for educational purposes only. Such set-ups are not solicitations of any order to buy or sell. Accordingly, you should not rely solely on the Information in making any investment. Rather, you should use the Information only as a starting point for doing additional independent research in order to allow you to form your own opinion regarding investments. You should always check with your licensed financial advisor and tax advisor to determine the suitability of any investment.
HYPOTHETICAL OR SIMULATED PERFORMANCE RESULTS HAVE CERTAIN INHERENT LIMITATIONS. UNLIKE AN ACTUAL PERFORMANCE RECORD, SIMULATED RESULTS DO NOT REPRESENT ACTUAL TRADING AND MAY NOT BE IMPACTED BY BROKERAGE AND OTHER SLIPPAGE FEES. ALSO, SINCE THE TRADES HAVE NOT ACTUALLY BEEN EXECUTED, THE RESULTS MAY HAVE UNDER- OR OVER-COMPENSATED FOR THE IMPACT, IF ANY, OF CERTAIN MARKET FACTORS, SUCH AS LACK OF LIQUIDITY. SIMULATED TRADING PROGRAMS IN GENERAL ARE ALSO SUBJECT TO THE FACT THAT THEY ARE DESIGNED WITH THE BENEFIT OF HINDSIGHT. NO REPRESENTATION IS BEING MADE THAT ANY ACCOUNT WILL OR IS LIKELY TO ACHIEVE PROFITS OR LOSSES SIMILAR TO THOSE SHOWN.
The Connors Group, Inc.
10 Exchange Place, Suite 1800
Jersey City, NJ 07302
© Copyright 2009 The Connors Group, Inc.
