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Rowan Companies Management Discusses Q2 2012 Results - Earnings Call Transcript

Before Matt begins his remarks, I'd like to remind you that during the course of this conference call, forward-looking statements may be made within the meaning of the Private Securities Litigation Reform Act of 1995, including, without limitation, statements about the change in corporate structure, as well as 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. Other relevant factors have been and will be disclosed in the company's filings with the SEC.

With that, I'll turn the call over to Matt.

W. Matt Ralls

Thanks, Suzanne, and good morning, everyone. I'll be brief this morning before turning the call over to Mark Keller to update you on our marketing efforts and then to Bill Wells for his comments on our financial results and some guidance for the balance of the year.

This morning, we announced results for the second quarter that were slightly ahead of consensus, excluding some onetime charges and gains. More importantly, we released a fleet status report on Tuesday reflecting a very attractive 3-year contract for the first of our 3 ultra-deepwater drillships under construction in Korea. Mark will provide contract details in his comments, but it's worth noting that this commitment increases our total contract backlog to $4 billion, a new high watermark for Rowan.

We are encouraged, though not surprised, by the interest we're getting in these very high-specification rigs from operators and remain optimistic about our ability to obtain attractive commitments for the other 2 drillships in the coming months. We also received an extension from Hyundai Heavy Industries for our option to build a fourth drillship. We now have until early September to exercise that option at a price substantially similar to what we are paying for the third rig. In the meantime, we continue to see good demand in upward pricing pressure in the high-spec jack-up markets around the world.

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