DALLAS--(BUSINESS WIRE)--Oct. 25, 2007--ENSCO International
Incorporated (NYSE: ESV) reported net income increased by 24% in the
quarter ended September 30, 2007, to $266.7 million ($1.82 per diluted
share) on revenues of $551.9 million, as compared to net income of
$214.8 million ($1.40 per diluted share) on revenues of $486.1 million
for the quarter ended September 30, 2006.
Net income for the nine months ended September 30, 2007 was $753.4
million ($5.08 per diluted share) on revenues of $1,614.6 million,
compared to net income of $559.3 million ($3.64 per diluted share) on
revenues of $1,342.9 million for the nine months ended September 30,
2006.
The average day rate for ENSCO's jackup rig fleet for the quarter
ended September 30, 2007, increased by 20% to $143,200, as compared to
$119,400 in the prior year quarter. In the most recent quarter, a
softer Gulf of Mexico jackup market and downtime related to inspection
/ mobilization of some of ENSCO's Europe / Africa jackup rigs
contributed to a reduction in overall utilization of the Company's
jackup fleet to 90% from 97% in the quarter ended September 30, 2006.
During the third quarter of 2007, the Company completed the
authorized repurchase of $500.0 million of common stock that commenced
in March 2006, and its Board of Directors authorized another $500.0
million for additional stock repurchases. During the third quarter,
the Company repurchased 2.5 million shares of its common stock at a
total cost of $145.1 million, or an average price of $57.74 per share.
In total, ENSCO has repurchased 11.0 million shares of common stock at
a cost of $577.5 million, or an average price of $52.65 per share,
since March of 2006. The Company had $422.5 million remaining under
its current stock repurchase authorization as of September 30, 2007.
Dan Rabun, Chairman, President and Chief Executive Officer,
commented on the Company's current results and outlook: "We are
pleased that the third quarter was another record for ENSCO. All of
our international markets remained strong during the quarter. As
previously disclosed, our results were adversely affected by
persistent softness in the Gulf of Mexico jackup market and
non-revenue mobilization days on two of our international jackups. In
addition, we incurred approximately $5.0 million of expense in
connection with the conclusion of operations in Nigeria. The results
for the quarter ended September 30, 2007 also included a tax benefit
of $11.1 million that resulted from the resolution of a prior period
uncertain tax position.
"In response to market conditions, we continue to pursue
international opportunities for several of our Gulf of Mexico jackup
rigs. In this regard, ENSCO 81 is expected to mobilize to Mexico in
December for a two-and-one-half year contract with PEMEX. With the
relocation of ENSCO 81, 70% of our jackup fleet will be located
outside the U.S. Gulf of Mexico.
"Our deepwater rig fleet expansion is proceeding as planned. ENSCO
8500, the first of our four 8500 Series ultra-deepwater
semisubmersible rigs under construction in Singapore, is currently
scheduled for delivery in the second quarter of 2008. Following
delivery, commissioning and mobilization, ENSCO 8500 is expected to
commence operations in the Gulf of Mexico in late 2008. The other
three ENSCO 8500 Series(R) rigs are scheduled for delivery in the
first and fourth quarters of 2009 (ENSCO 8501 and ENSCO 8502) and in
the third quarter of 2010 (ENSCO 8503), with all but ENSCO 8503 now
under contract.
"We estimate that we will incur a total of approximately 430
shipyard days in 2007 related to rig enhancement projects. ENSCO 93
entered a shipyard in late May 2007, with completion now expected by
mid-February 2008. ENSCO 81 will enter a shipyard in late October for
preparatory work prior to mobilization and commencement of its
contract with PEMEX in Mexico in late December 2007.
"Looking ahead to the fourth quarter of 2007, we currently expect
a decline in our quarterly earnings from the third quarter 2007 level
due to the continuing softness in the U.S. Gulf of Mexico jackup
market and mobilization downtime on several of our international
jackups prior to commencement of new contracts. As we look ahead, we
currently anticipate that 2008 will be another record year for ENSCO.
Our deepwater initiatives are expected to show positive results in
2008 as we roll to a significantly higher day rate on ENSCO 7500 and
as ENSCO 8500 begins operations. Most of our international rig days
are contracted, and we expect continued positive results in these
markets. We also believe additional opportunities will be presented as
we seek to reposition some of our other Gulf of Mexico jackups into
international service during 2008."
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, the
period of time and number of rigs that will be in a shipyard,
scheduled delivery dates for new rigs, scheduled commencement dates
for new contracts, rig relocations, market trends, expectations,
outlook or conditions for the fourth quarter of 2007, 2008 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) changes in the
dates new contracts actually commence, (ix) risks inherent to domestic
and foreign shipyard rig construction, rig repair or rig enhancement,
(x) unavailability of transport vessels to relocate rigs, (xi)
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, (xii) 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, (xiii)
political and economic uncertainty, (xiv) limited availability of
economic insurance coverage for certain perils such as hurricanes in
the Gulf of Mexico or removal of wreckage or debris, (xv) self-imposed
or regulatory limitations on jackup rig drilling locations in the Gulf
of Mexico during hurricane season, (xvi) our availability to attract
and retain skilled or other personnel, (xvii) excess rig availability
or supply resulting from delivery of new drilling units, (xviii) heavy
concentration of our rig fleet in premium jackups, (xix) terrorism or
military action impacting our operations or financial performance,
(xx) the outcome of litigation, legal procedures, investigations or
claims, and (xxi) other risks as 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 October 25, 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
Daylight Time on Thursday, October 25, 2007, to discuss its third
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) 325-4901. 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 6846865).
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 Nine Months Ended
Ended
September 30, September 30,
-------------- -------------------
2007 2006 2007 2006
------ ------- --------- ---------
OPERATING REVENUES $551.9 $486.1 $1,614.6 $1,342.9
OPERATING EXPENSES
Contract drilling 178.7 150.5 510.3 424.8
Depreciation 47.1 44.3 139.0 130.4
General and administrative 11.5 11.3 46.6 32.2
------ ------- --------- ---------
237.3 206.1 695.9 587.4
------ ------- --------- ---------
OPERATING INCOME 314.6 280.0 918.7 755.5
OTHER INCOME (EXPENSE)
Interest income 7.1 4.3 19.6 9.3
Interest expense, net - (4.5) (1.9) (13.6)
Other, net 2.7 (0.4) 9.5 (3.3)
------ ------- --------- ---------
9.8 (0.6) 27.2 (7.6)
------ ------- --------- ---------
INCOME FROM CONTINUING OPERATIONS
BEFORE INCOME TAXES 324.4 279.4 945.9 747.9
PROVISION FOR INCOME TAXES 57.7 64.7 192.5 195.0
------ ------- --------- ---------
INCOME FROM CONTINUING OPERATIONS 266.7 214.7 753.4 552.9
DISCONTINUED OPERATIONS, NET - 0.1 - 5.8
CUMULATIVE EFFECT OF ACCOUNTING
CHANGE, NET - - - 0.6
------ ------- --------- ---------
NET INCOME $266.7 $214.8 $ 753.4 $ 559.3
====== ======= ========= =========
EARNINGS PER SHARE - BASIC
Continuing operations $ 1.83 $ 1.41 $ 5.10 $ 3.62
Discontinued operations - - - 0.04
Cumulative effect of accounting
change - - - -
------ ------- --------- ---------
$ 1.83 $ 1.41 $ 5.10 $ 3.67
====== ======= ========= =========
EARNINGS PER SHARE - DILUTED
Continuing operations $ 1.82 $ 1.40 $ 5.08 $ 3.60
Discontinued operations - - - 0.04
Cumulative effect of accounting
change - - - -
------ ------- --------- ---------
$ 1.82 $ 1.40 $ 5.08 $ 3.64
====== ======= ========= =========
AVERAGE COMMON SHARES OUTSTANDING
Basic 145.9 152.0 147.8 152.6
Diluted 146.6 153.3 148.4 153.7
ENSCO INTERNATIONAL INCORPORATED
CONDENSED CONSOLIDATED BALANCE SHEET
(In millions)
September December
30, 31,
2007 2006
----------- -----------
(Unaudited)
ASSETS
CURRENT ASSETS
Cash and cash equivalents $ 622.9 $ 565.8
Accounts receivable, net 434.1 338.8
Other 104.5 82.6
----------- -----------
Total current assets 1,161.5 987.2
PROPERTY AND EQUIPMENT, NET 3,215.1 2,960.4
GOODWILL 336.2 336.2
OTHER ASSETS, NET 51.6 50.6
----------- -----------
$ 4,764.4 $ 4,334.4
=========== ===========
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES
Accounts payable and accrued liabilities $ 264.8 $ 217.8
Current maturities of long-term debt 167.1 167.1
----------- -----------
Total current liabilities 431.9 384.9
LONG-TERM DEBT 300.0 308.5
DEFERRED INCOME TAXES 353.9 356.5
OTHER LIABILITIES 69.1 68.5
STOCKHOLDERS' EQUITY 3,609.5 3,216.0
----------- -----------
$ 4,764.4 $ 4,334.4
=========== ===========
ENSCO INTERNATIONAL INCORPORATED
CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS
(In millions)
(Unaudited)
Nine Months Ended
September 30,
-----------------
2007 2006
-------- --------
OPERATING ACTIVITIES
Net income $ 753.4 $ 559.3
Adjustments to reconcile net income to net cash
provided by operating activities of continuing
operations:
Depreciation 139.0 130.4
Changes in working capital and other (25.1) (35.3)
-------- --------
Net cash provided by operating activities of
continuing operations 867.3 654.4
-------- --------
INVESTING ACTIVITIES
Additions to property and equipment (407.9) (405.2)
Other 5.6 12.5
-------- --------
Net cash used in investing activities (402.3) (392.7)
-------- --------
FINANCING ACTIVITIES
Reduction of long-term borrowings (8.6) (8.6)
Repurchase of common stock (417.5) (106.7)
Cash dividends paid (11.2) (11.5)
Proceeds from exercise of stock options 29.8 21.9
Other (0.3) 1.0
-------- --------
Net cash used in financing activities (407.8) (103.9)
-------- --------
Effect of exchange rate fluctuations on cash and
cash equivalents (0.1) (0.1)
Net cash provided by operating activities of
discontinued operations - 2.9
-------- --------
INCREASE IN CASH AND CASH EQUIVALENTS 57.1 160.6
CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD 565.8 268.5
-------- --------
CASH AND CASH EQUIVALENTS, END OF PERIOD $ 622.9 $ 429.1
======== ========
ENSCO INTERNATIONAL INCORPORATED
OPERATING STATISTICS
(Unaudited)
Second
Third Quarter Quarter
-------------------
2007 2006 2007
--------- --------- ---------
Contract drilling
----------------------------------------
Average day rates
Jackup rigs
Asia Pacific $132,876 $ 91,844 $134,929
Europe / Africa 203,117 157,501 195,211
North and South America 112,643 127,088 113,696
--------- --------- ---------
Total jackup rigs 143,199 119,440 142,895
Semisubmersible rig - N. America 200,716 191,820 200,188
Barge rig - Asia Pacific 71,496 58,167 65,788
--------- --------- ---------
Total $142,821 $119,627 $143,153
========= ========= =========
Utilization
Jackup rigs
Asia Pacific 99% 100% 99%
Europe / Africa 90% 100% 100%
North and South America 78% 93% 82%
--------- --------- ---------
Total jackup rigs 90% 97% 93%
Semisubmersible rig - N. America 97% 96% 97%
Barge rig - Asia Pacific 100% 100% 80%
--------- --------- ---------
Total 90% 97% 93%
========= ========= =========
CONTACT: ENSCO International Incorporated
Richard LeBlanc, 214-397-3011
SOURCE: ENSCO International Incorporated
