Rowan Reports Solid Q2, Signs $660 Million Contract With Cobalt

rowan deepwater drillships

Houston-based drilling contractor Rowan (NYSE: RDC) had quite a bit to celebrate today.

In their Q2 earnings report, they announced a $32 million (63 percent) jump in quarterly net income as compared to the same period last year.  Rowan notes revenues were $408.9 million in the second quarter of 2013, a 16% increase over the prior-year quarter due primarily to higher average day rates and higher utilization between periods.

In addition, they signed a 3-year, $660 million contract with Cobalt International Energy (NYSE: CIE) for the Rowan Reliance, an ultra-deepwater drillship currently under construction at Hyundai Heavy Industries (HHI).

Rowan notes that the Rowan Reliance is expected to operate in the Gulf of Mexico upon commencement of its contract in January 2015.  The effective day rate will be $602,000.

Matt Ralls, Chief Executive Officer, commented, “In addition to our strong second quarter operating results, we are very pleased to have recently received contracts for our second and third ultra-deepwater newbuild drillships at attractive rates. Our backlog is at an all-time high and we are optimistic that we will have our fourth newbuild drillship contracted in the coming months. Our high-spec jack-ups continue to roll over to new contracts at higher rates, which along with earnings from our newbuild drillships should provide strong earnings growth in 2014 and 2015.”

The Rowan Reliance is one of four ultra-deepwater drillships being constructed for Rowan by HHI.  All four drillships are based on a GustoMSC P10,000 hull design, capable of drilling wells to depths of 40,000 feet in water depths up to 12,000 feet. The DP-3-compliant, dynamically positioned drillship will be equipped with retractable thrusters, two readily deployable seven-ram BOP systems, five mud pumps, dual mud systems and a maximum hookload capacity of 1,250 tons.