DALLAS--(BUSINESS WIRE)--July 24, 2007--ENSCO International
Incorporated (NYSE: ESV) reported net income increased by 31% in the
quarter ended June 30, 2007, to $254.4 million ($1.72 per diluted
share) on revenues of $548.6 million, as compared to net income of
$194.7 million ($1.27 per diluted share) on revenues of $475.2 million
for the quarter ended June 30, 2006.
Net income for the six months ended June 30, 2007 was $486.7
million ($3.26 per diluted share) on revenues of $1,062.7 million,
compared to net income of $344.5 million ($2.24 per diluted share) on
revenues of $856.8 million for the six months ended June 30, 2006.
The average day rate for ENSCO's jackup rig fleet for the quarter
ended June 30, 2007, increased by 25% to $142,900, as compared to
$114,300 in the prior year quarter. In the most recent quarter, a
softer Gulf of Mexico jackup market contributed to a slight reduction
in overall utilization of the Company's jackup fleet to 93% from 97%
in the quarter ended June 30, 2006.
During the second quarter of 2007, the Company repurchased 2.5
million shares of its common stock at a total cost of $144.8 million,
or an average price of $58.02 per share, as part of a $500 million
share repurchase authorization. Under the program that commenced late
in the first quarter of 2006, ENSCO has repurchased a total of 8.5
million common shares at a cost of $432.4 million, or an average price
of $51.13 per share, through the second quarter of 2007.
Dan Rabun, Chairman, President and Chief Executive Officer of
ENSCO, commented on the Company's current results and outlook: "We are
pleased to report another record quarter, one in which we realized
significant year-over-year improvement in average day rates for our
international jackups, tempered somewhat by slightly lower average day
rates for our Gulf of Mexico jackups. We completed the relocation of
ENSCO 105 from the Gulf of Mexico to Tunisia in the quarter, thus
further enhancing our international fleet mix while reducing our
presence in the Gulf of Mexico.
"We continue to execute our business plan, as evidenced by the
recently announced construction of our fifth ultra-deepwater rig,
ENSCO 8503. We believe expansion of our deepwater fleet will
contribute significantly to our long-term growth. We also have
continued to increase our stock repurchases quarter-over-quarter and
currently expect to complete our initial $500 million share repurchase
authorization during the third quarter of 2007. Upon completion of our
current program, we will continue to evaluate the capital required to
support our plans for reinvestment in the business and opportunities
for return of capital to our stockholders.
"With the ENSCO 8503 announcement, we now have four
ultra-deepwater semisubmersible rig construction projects underway,
with deliveries anticipated in the second quarter of 2008 (ENSCO
8500), first quarter 2009 (ENSCO 8501), fourth quarter 2009 (ENSCO
8502), and third quarter 2010 (ENSCO 8503). Both the ENSCO 8500 and
ENSCO 8501 are being built against firm multi-customer long-term
drilling contracts. We have also recently received a letter of intent
from a customer for a minimum two-year contract on the third rig,
ENSCO 8502, which can be extended for a three or four year primary
term before the commencement of operations. The day rate will vary
slightly depending on the primary term of the contract. We currently
expect that the revenues to be recognized from this contract during
the primary two-year term will be approximately $340 million. The
final terms and conditions are subject to a definitive agreement being
executed between the parties.
"Enhancement of ENSCO 83, one of our 250' water depth capable
jackup rigs, was completed in June 2007 and the rig is now operating
in the Gulf of Mexico. ENSCO 93 entered a shipyard in late May 2007
for an enhancement program scheduled for completion in late 2007. We
estimate that we will incur a total of 383 shipyard days in 2007
related to the ENSCO 83 and ENSCO 93 projects.
"We remain positive on our market outlook and financial prospects,
and expect 2007 will be another record year for ENSCO. We have
committed approximately $1.5 billion to expand our deepwater fleet,
and expect this investment in our future will begin to contribute
meaningfully to our results in the years to follow."
Statements contained in this news release that state the Company's
or management's intentions, hopes, beliefs, expectations,
anticipations, projections or predictions of the future are
forward-looking statements made pursuant to the Private Securities
Litigation Reform Act of 1995. Such forward-looking statements include
references to future earnings expectations, trends in day rates,
utilization or rig relocations, future rig rates or utilization, rig
enhancement, shipyard work completion, and contract commitments
(including finalization of the contemplated ENSCO 8502 drilling
contract), the period of time and number of rigs that will be in a
shipyard, scheduled delivery dates for new rigs, market trends,
expectations, outlook or conditions for 2007 and beyond. It is
important to note that our actual results could differ materially from
those projected in such forward-looking statements. The factors that
could cause actual results to differ materially from those in the
forward-looking statements include the following: (i) industry
conditions and competition, including changes in rig supply and demand
or new technology, (ii) cyclical nature of the industry, (iii)
worldwide expenditures for oil and gas drilling, (iv) operational
risks, including hazards created by severe storms and hurricanes, (v)
risks associated with offshore rig operations or, rig relocations in
general, and in foreign jurisdictions in particular, (vi)
renegotiation, nullification, or breach of contracts with customers or
other parties, (vii) changes in the dates our rigs undergoing shipyard
construction work, repairs or enhancement will enter a shipyard,
return to or enter service, (viii) risks inherent to domestic and
foreign shipyard rig construction, rig repair or rig enhancement, (ix)
unavailability of transport vessels to relocate rigs, (x)
environmental or other liabilities, risks, or losses including
hurricane related equipment damage, loss or wreckage or debris removal
in the U.S. Gulf of Mexico, that may arise in the future which are not
covered by insurance or indemnity in whole or in part, (xi) the impact
of current and future laws and government regulation affecting the oil
and gas industry in general including taxation, our operations in
particular, as well as repeal or modification of same, (xii) political
and economic uncertainty, (xiii) limited availability of economic
insurance coverage for certain perils such as hurricanes in the Gulf
of Mexico or removal of wreckage or debris, (xiv) self-imposed or
regulatory limitations on jackup rig drilling locations in the Gulf of
Mexico during hurricane season, (xv) our availability to attract and
retain skilled or other personnel, (xvi) excess rig availability or
supply resulting from delivery of new drilling units, (xvii) heavy
concentration of our rig fleet in premium jackups, (xviii) terrorism
or military action impacting our operations or financial performance,
(xix) failure to negotiate and execute a mutually agreeable drilling
contract for ENSCO 8502, and (xx) other risks described from time to
time as Risk Factors and otherwise in the Company's SEC filings.
Copies of such SEC filings may be obtained at no charge by contacting
our investor relations department at 214-397-3045 or by referring to
the investor relations section of our website at
http://www.enscous.com.
All information in this press release is as of July 24, 2007. The
Company undertakes no duty to update any forward-looking statement, to
conform the statement to actual results, or reflect changes in the
Company's expectations.
ENSCO, headquartered in Dallas, Texas, provides contract drilling
services to the global petroleum industry.
ENSCO will conduct a conference call at 10:00 a.m. Central Time on
Tuesday, July 24, 2007, to discuss its second quarter 2007 results.
The call will be broadcast live over the Internet at www.enscous.com.
Interested parties also may listen to the call by dialing (719)
457-2679. We recommend that participants call five to ten minutes
before the scheduled start time.
A replay of the conference call will be available by phone for 24
hours after the call by dialing (719) 457-0820 (access code 2361034).
A transcript of the call and access to a replay or MP3 download can be
found on-line on the ENSCO web site www.enscous.com in the Investors
Section.
ENSCO INTERNATIONAL INCORPORATED
CONDENSED CONSOLIDATED STATEMENT OF INCOME
(In millions, except per share data)
(Unaudited)
Three Months Ended Six Months Ended
June 30, June 30,
------------------ -----------------
2007 2006 2007 2006
---------- ------- --------- -------
OPERATING REVENUES $548.6 $475.2 $1,062.7 $856.8
OPERATING EXPENSES
Contract drilling 168.8 146.4 331.6 274.3
Depreciation and amortization 46.8 44.1 91.9 86.1
General and administrative 19.1 10.5 35.1 20.9
---------- ------- --------- -------
234.7 201.0 458.6 381.3
---------- ------- --------- -------
OPERATING INCOME 313.9 274.2 604.1 475.5
OTHER INCOME (EXPENSE)
Interest income 6.3 2.7 12.5 5.0
Interest expense, net (0.8) (4.9) (1.9) (9.1)
Other, net 2.3 (1.2) 6.8 (2.9)
---------- ------- --------- -------
7.8 (3.4) 17.4 (7.0)
---------- ------- --------- -------
INCOME FROM CONTINUING OPERATIONS
BEFORE INCOME TAXES 321.7 270.8 621.5 468.5
PROVISION FOR INCOME TAXES 67.3 76.8 134.8 130.3
---------- ------- --------- -------
INCOME FROM CONTINUING OPERATIONS 254.4 194.0 486.7 338.2
DISCONTINUED OPERATIONS, NET - 0.7 - 5.7
CUMULATIVE EFFECT OF ACCOUNTING
CHANGE, NET - - - 0.6
---------- ------- --------- -------
NET INCOME $254.4 $194.7 $486.7 $344.5
========== ======= ========= =======
EARNINGS PER SHARE - BASIC
Continuing operations $1.72 $1.27 $3.27 $2.21
Discontinued operations - - - 0.04
Cumulative effect of accounting
change - - - -
---------- ------- --------- -------
$1.72 $1.27 $3.27 $2.25
========== ======= ========= =======
EARNINGS PER SHARE - DILUTED
Continuing operations $1.72 $1.26 $3.26 $2.20
Discontinued operations - - - 0.04
Cumulative effect of accounting
change - - - -
---------- ------- --------- -------
$1.72 $1.27 $3.26 $2.24
========== ======= ========= =======
AVERAGE COMMON SHARES OUTSTANDING
Basic 147.6 152.9 148.8 152.9
Diluted 148.3 153.6 149.4 153.6
ENSCO INTERNATIONAL INCORPORATED
CONDENSED CONSOLIDATED BALANCE SHEET
(In millions)
June 30, December 31,
2007 2006
------------ -------------
(Unaudited)
ASSETS
CURRENT ASSETS
Cash and cash equivalents $547.0 $565.8
Accounts receivable, net 445.3 338.8
Other 90.8 82.6
------------ -------------
Total current assets 1,083.1 987.2
PROPERTY AND EQUIPMENT, NET 3,147.7 2,960.4
GOODWILL 336.2 336.2
OTHER ASSETS, NET 53.1 50.6
------------ -------------
$4,620.1 $4,334.4
============ =============
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES
Accounts payable and accrued liabilities $242.7 $217.8
Current maturities of long-term debt 167.1 167.1
------------ -------------
Total current liabilities 409.8 384.9
LONG-TERM DEBT 299.9 308.5
DEFERRED INCOME TAXES 347.6 356.5
OTHER LIABILITIES 83.0 68.5
STOCKHOLDERS' EQUITY 3,479.8 3,216.0
------------ -------------
$4,620.1 $4,334.4
============ =============
ENSCO INTERNATIONAL INCORPORATED
CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS
(In millions)
(Unaudited)
Six Months
Ended
June 30,
---------------
2007 2006
------- -------
OPERATING ACTIVITIES
Net income $486.7 $344.5
Adjustments to reconcile net income to net cash
provided by operating activities of continuing
operations:
Depreciation and amortization 91.9 86.1
Changes in working capital and other (46.2) (72.7)
------- -------
Net cash provided by operating activities of
continuing operations 532.4 357.9
------- -------
INVESTING ACTIVITIES
Additions to property and equipment (290.3) (283.3)
Other 3.2 11.9
------- -------
Net cash used in investing activities (287.1) (271.4)
------- -------
FINANCING ACTIVITIES
Reduction of long-term borrowings (8.6) (8.6)
Repurchase of common stock (272.4) (52.2)
Cash dividends paid (7.5) (7.7)
Proceeds from exercise of stock options 25.3 20.7
Other (0.8) 1.1
------- -------
Net cash used in financing activities (264.0) (46.7)
------- -------
Effect of exchange rate fluctuations on cash and cash
equivalents (0.1) (0.1)
Net cash provided by operating activities of
discontinued operations - 1.6
------- -------
INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS (18.8) 41.3
CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD 565.8 268.5
------- -------
CASH AND CASH EQUIVALENTS, END OF PERIOD $547.0 $309.8
======= =======
ENSCO INTERNATIONAL INCORPORATED
OPERATING STATISTICS
(Unaudited)
First
Second Quarter Quarter
-------------------
2007 2006 2007
--------- --------- ---------
Contract drilling
----------------------------------------
Average day rates
Jackup rigs
Asia Pacific $134,929 $88,351 $120,728
Europe / Africa 195,211 144,510 182,536
North and South America 113,696 129,664 117,858
--------- --------- ---------
Total jackup rigs 142,895 114,289 133,238
Semisubmersible rig - N. America 200,188 187,296 195,740
Barge rig - Asia Pacific 65,788 57,109 56,509
--------- --------- ---------
Total $143,153 $116,690 $132,843
========= ========= =========
Utilization
Jackup rigs
Asia Pacific 99% 98% 99%
Europe / Africa 100% 100% 95%
North and South America 82% 95% 85%
--------- --------- ---------
Total jackup rigs 93% 97% 93%
Semisubmersible rig - N. America 97% 98% 97%
Barge rig - Asia Pacific 80% 96% 100%
--------- --------- ---------
Total 93% 97% 93%
========= ========= =========
CONTACT: ENSCO International Incorporated
Richard LeBlanc, 214-397-3011
SOURCE: ENSCO International Incorporated