EX-99 2 ex99.htm EXHIBIT 99 Exhibit 99
Rowan Companies, Inc.
D.F. McNease
Chairman and CEO
April 2007
Howard Weil Energy Conference
 
 
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 are the following: oil, natural gas and other commodity prices; the level of offshore expenditures by energy companies; energy demand; the general economy, including inflation; 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.  
Forward Looking Statements
 
 
Rowan Companies, Inc. Revenues
Drilling
73%
Manufacturing
27%
Drilling
71%
Manufacturing
29%
2005
2006
Total Revenue: $1.1 billion
Total Revenue: $1.5 billion
 
 
Operations and Backlog
 
YTD
  
YTD   
 
12/31/06
  
12/31/05
 
($ in millions)
 
 
    
External revenues
$443.3
  
$293.4
Margin* (% of revenues)
$98.9 (22%)
  
$65.7 (22%)
Operating income** (% of revenues)
$38.0 (9%)
  
$ 7.7  (3%)  
 
 
  
 
External backlog
$530
  
$388
Internal volume to Rowan
$230
  
$118
       
*   Equals external revenues less direct cost of sales
** 
Equals margin less SG&A, Engineering and R&D, which are allocated among groups after the margin line but before operating income, plus gain (loss) on sale of fixed assets
Drilling Division
Currently, the offshore drilling fleet has a contracted backlog of approximately $1.9 billion
Manufacturing Division
 
 
Forestry & Mining
Mining Distribution
Forestry Distribution
Drilling Products Distribution
LeTourneau Technologies, Inc. – Worldwide Operations
 
 
Mining Products
Drilling Systems
Power Systems
Forestry Products
LeTourneau Technologies, Inc.
Steel Products
Offshore Products
 
 
LeTourneau, Inc. - Longview
OEM - Houston
LeTourneau, Inc. - Vicksburg
LEWCO - Houston
LeTourneau Technologies, Inc. Facilities
 
 
Rowan’s Worldwide Drilling Operations
U.S. Gulf of Mexico
9 Jack-ups
Trinidad         
1 Jack-up
Eastern Canada
Operations Office
North Sea
3 Jack-ups
Middle East 
8 Jack-ups
Jack-up Rigs
Land Rigs
27 Land Rigs
 
 
Rowan Companies, Inc. Average Dayrates
Offshore
Land
4th quarter 2006 average day rate: $ 144,500
4th quarter 2006 average day rate: $ 22,700
 
 
27 Land rigs currently operating in Texas, Louisiana & Oklahoma
18 of the 27 rigs are on term contracts
Current Average Well Depth: 15,400’
Rowan’s Land Fleet
•
 
•
 
•
 
Rowan Newbuild –
Rig 60
 
 
Projected Land Rig Additions
Source: RigData and The Land Rig Newsletter
Horsepower
Q204 - Q406
Additions
 
2007E
Additions
Total
Additions
500 to 999
178
79
257
1,000 to 1,499
123
133
256
1,500 to 1,999
83
68
151
2,000+
21
12
33
 
405
292
697
 
 
What happens if we slow drilling?
1st Year Production Decline Rates from Gas Resource Plays
Conventional
  
South Texas
71%
Mountain Front
60%
Unconventional
  
Barnett Shale
67%
Sahara
63%
Ark-La-Tex
66%
Granite
74%
Appalachia
  
Devonian Shale
67%
Average
67%
Source: Raymond James / Chesapeake Energy
Emerging Unconventional
Fayette Shale
55%
Deep Haley
65%
Delaware Basin
37%
Woodford Shale
66%
Deep Bossier
66%
   
   
   
   
Average
59%
 
 
Source: Raymond James / EOG Resources
First Year U.S. Gas Well Decline Rates
 
 
Rowan’s Offshore Fleet – 21 Total Jack-ups
Gorilla Class
3 Rigs
14%
300-350’
116-C
7 Rigs
33%
350’
Slot
2 Rigs
10%
250’- 300’Slot
2 Rigs
10%
TARZAN
CLASS
     3 Rigs       
           14%
Super Gorilla
Class
4 Rigs
19%
Three additional rigs are under construction / on order.
 
 
Eastern Canada
13%
Middle East
5%
North Sea
29%
U.S. Gulf of Mexico
32%
Middle East
24%
U.S. Gulf of Mexico
51%
North Sea
42%
Trinidad
2%
1st Quarter 2007
Rowan’s Worldwide Offshore Fleet
(Net Book Value per area)
Trinidad
2%
4th Quarter 2006
The Middle East and the U.S. Gulf of Mexico are the two dominant jack-up markets that make up roughly 50% of the world fleet
 
 
Jack-up Contract Coverage
Source: Morgan Stanley / ODS-Petrodata
2007E    2008E    2009E
Offshore drillers operating internationally have longer-term contracts
90%
87%
82%
70%
72%
61%
51%
9%
61%
43%
47%
21%
57%
20%
58%
35%
51%
24%
31%
11%
9%
4%
2%
 
 
Rowan Companies, Inc. - ROI Analysis
4 year income - after taxes
$203 million
Annual ROI - after taxes
20%
4 year cash flow - after taxes
$241 million
Saudi Aramco Contract: 2 TARZAN Rigs - 4 year period
 
 
$ in Millions
Scooter
Yeargain
 
Hank
Boswell
Total
Contract value
$283.8
$283.8
$567.6
Revenue days deferred:
 
 
 
4th Quarter 2006
48
17
65
1st Quarter 2007 (est.)
90
90
180
Total (est.)
138
107
245
Revenues deferred:
 
 
 
4th Quarter 2006
$8.5
$3.1
$11.6
1st Quarter 2007 (est.)
$16.0
$16.3
$32.3
Total (est.)
$24.5
$19.4
$43.9
Total Q4 2006 revenues deferred from all relocating rigs: $48 million
Rowan Companies, Inc. Revenue Deferral
 
 
C & S
America: 88%
US GOM: 72%
Mexico: 100%
West Africa: 96%
North Sea: 100%
Middle East: 96%
SE Asia: 100%
Contracted
Not Contracted
63
31

2
35
24

1
88
4
35

0
25
15
0
Current Worldwide Jack-up Supply / Demand
Worldwide Utilization: 91%
Includes data supplied by ODS-Petrodata, Inc; Copyright 2007

0
Indian Ocean: 100%
32
0
Med / Black Sea : 100%
16

0
4-5 Rig Deficit
3-5 Rig Deficit
3-4 Rig Deficit
6-8 Rig Deficit
2-3 Rig Deficit
Argentina:
1 Rig Deficit
1 Rig Deficit
2-3 Rig Deficit
Total Rig Deficit: 22 – 30 Jack-ups
 
 
Largest Jack-up Operators Worldwide
•
  NOCs have assumed a more dominant role in global jack-up demand
•
     NOCs not only are economically driven, but also politically driven – probably less cyclical
Source: ODS-Petrodata / Morgan Stanley
National Oil Companies                    International Oil Companies
 
 
Argentina:
1 Rig
US GOM
Mexico:
4 Rigs
West Africa:
2-3 Rigs
North Sea: 100%
Middle East:
20 Rigs
SE Asia
Tender Projections and Effect on Migration Forecast - 1st Half 2007
Indian Ocean:
5 Rigs
Med / Black Sea :
2 Rigs
Outstanding Tenders
Migration INTO the region
Migration OUT of the region
 
 
Worldwide Jack-up Newbuilds
16
31
15
3
•
     Approximately 90% of the fleet is 20 years & older – attrition will continue
•
     Newbuilds jack-ups will not meet current supply deficits until mid-2008 at the earliest
 
 
65 Total Jack-ups
(56 Total Active Jack-ups)
The 300 IC and 350 IC Class jack-ups would  no longer be available in the U.S. GOM
Gulf of Mexico Jack-ups
Projected Rig Make-up
Mid Year 2008
250’ IC
8 Rigs
12%
<250’ IC
4 Rigs
6%
200’-250’ MS
17 Rigs
26%
200’-250’ MC
14 Rigs
22%
<200’ MC
15 Rigs
23%
IS
5 Rigs
8%
>350’ IC
2 Rigs
3%
 
 
Rowan Companies, Inc.
D.F. McNease
Chairman and CEO
April 2007
Howard Weil Energy Conference