Second of the ENSCO 8500 Series Ultra-deepwater Semisubmersibles Commences Drilling

DALLAS--(BUSINESS WIRE)--Oct. 21, 2009-- Ensco International Incorporated (NYSE: ESV) reported diluted earnings per common share from continuing operations of $1.05 for third quarter 2009, compared to $2.06 per share in third quarter 2008. Earnings from discontinued operations were zero cents per share in third quarter 2009, compared to a loss of $0.09 per share a year ago. Diluted earnings per share were $1.05 in third quarter 2009, compared to $1.97 in third quarter 2008. Discontinued operations relate to rigs no longer in the Company’s fleet.

Chairman, President and Chief Executive Officer Dan Rabun stated, We recently added ENSCO 8501 to our active fleet of ultra-deepwater semisubmersibles, and we expect deepwater segment revenues to grow significantly in 2010 and 2011. We also are pleased to report that new and existing customers recently contracted several of our premium jackups. Jackup utilization is projected to rise, which will help to lessen the impact of declining day rates.

On October 14, 2009, Ensco filed a Current Report on Form 8-K with the SEC updating the Company’s Annual Report on Form 10-K for the year ended December 31, 2008 to reflect the retrospective application of two accounting standards adopted on January 1, 2009, and the reclassification of ENSCO 69 as discontinued operations in 2008 and prior periods. Prior period results in this news release and the attached schedules reflect the updated amounts in the Current Report.

On September 4, 2009, the Company reported that unplanned downtime for ENSCO 7500 and ENSCO 8500 would reduce diluted earnings per share for third quarter 2009. Based on the actual downtime incurred for repairs required on these two rigs in the third quarter, earnings were reduced by $0.19 per share.

Revenues in third quarter 2009 declined to $425 million from $620 million a year ago. Average day rates increased year-to-year for the deepwater segment, but declined for the premium jackup fleet. Rig utilization in third quarter 2009 declined in all of the operating segments, compared to the prior year. Total third quarter 2009 operating expenses increased to $250 million from $247 million last year, primarily due to an increase in depreciation related to ENSCO 8500 commencing operations.

Segment Highlights

Deepwater

Deepwater segment revenues grew by 131% year-to-year to $63 million in third quarter 2009, mostly driven by commencement of ENSCO 8500 operations in early-June 2009. The average deepwater rig day rate increased to $387,000 from $362,000 a year ago, however, utilization declined to 64% from 87% in third quarter 2008. Contract drilling expense increased 318% year-to-year, primarily due to adding ENSCO 8500 to the active fleet and ENSCO 7500 incurring both higher operating costs in Australia and increased mobilization expense that is deferred and recognized over the term of the contract.

Total Jackup Segments

Revenues from Ensco’s worldwide premium jackup fleet totaled $363 million in third quarter 2009, down from $592 million a year ago. The decline was largely due to a decrease in utilization to 61% from 97% last year and an $8,000 decline in the average day rate to $148,000. Contract drilling expense declined 16% year-over-year, mostly due to reduced personnel and other costs related to lower utilization.

Strong Financial Position – September 30, 2009

Ensco continues to maintain a strong financial position:

• More than $1 billion of cash and cash equivalents
• $350 million fully available revolving credit facility
• Long-term debt remains low at $266 million
• Long-term debt-to-capital ratio of 5%
• Contract backlog equals $3.3 billion

Chief Financial Officer Jay Swent commented, “Cash now exceeds $1 billion, and we expect cash generation will continue to be strong as total capital commitments for the ENSCO 8500 Series® newbuild program decline, just as deepwater segment revenues begin to rise.”

Ensco will conduct a conference call at 10:00 a.m. Central Time on Thursday, October 22, 2009, to discuss third quarter 2009 results. The call will be broadcast live at www.enscointernational.com. Interested parties also may listen to the call by dialing (719) 325-4777. 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 48 hours after the call by dialing (719) 457-0820 (access code 1457791). A transcript of the call and access to the replay or MP3 download may be found at www.enscointernational.com in the Investors Section.

Ensco International Incorporated (NYSE: ESV) brings energy to the world as a global provider of offshore drilling services to the petroleum industry. With a fleet of ultra-deepwater semisubmersible and premium jackup drilling rigs, Ensco serves customers with high-quality equipment, a well-trained workforce and a strong record of safety and reliability. To learn more about Ensco, please visit our website at www.enscointernational.com.

Statements contained in this news release that state the Company's or management's intentions, hopes, beliefs, expectations, anticipations, projections, confidence, schedules, or predictions of the future are forward-looking statements made pursuant to the Private Securities Litigation Reform Act of 1995.

Forward-looking statements include words or phrases such as "anticipate," "believe," "estimate," "expect," "intend," "plan," "project," "could," "may," "might," "should," "will" and words and phrases of similar import. The forward-looking statements include, but are not limited to, statements regarding future operations, cash generation, the impact of recently contracted premium jackups, contributions from the deepwater expansion program and expense management, industry trends or conditions and the business environment; statements regarding future levels of, or trends in, utilization, day rates, revenues, operating expenses, contract term, contract backlog, capital expenditures, insurance, financing and funding; statements regarding future construction (including construction in progress and completion thereof), enhancement, upgrade or repair of rigs and timing thereof; statements regarding future delivery, mobilization, relocation or other movement of rigs and timing thereof; statements regarding future availability or suitability of rigs and the timing thereof, and statements regarding the likely outcome of litigation, legal proceedings, investigations or insurance or other claims and timing thereof.

Forward-looking statements are made pursuant to safe harbor provisions of the Private Securities Litigation Reform Act of 1995. Numerous factors could cause actual results to differ materially from those in the forward-looking statements, including: (i) industry conditions and competition, including changes in rig supply and demand or new technology, (ii) risks associated with the global economy and its impact on capital markets and liquidity, (iii) prices of oil and natural gas and their impact upon future levels of drilling activity and expenditures, (iv) further declines in rig activity, which may cause us to idle or stack additional rigs, (v) excess rig availability or supply resulting from delivery of newbuild drilling rigs, (vi) heavy concentration of our rig fleet in premium jackups, (vii) cyclical nature of the industry, (viii) worldwide expenditures for oil and natural gas drilling, (ix) the ultimate resolution of the ENSCO 69 situation in general and the potential return of the rig or package policy political risk insurance recovery in particular, (x) changes in the timing of revenue recognition resulting from the deferral of certain revenues for mobilization of our drilling rigs, time waiting on weather or time in shipyards, which are recognized over the contract term upon commencement of drilling operations, (xi) operational risks, including excessive unplanned downtime and hazards created by severe storms and hurricanes, (xii) risks associated with offshore rig operations or rig relocations in general and in foreign jurisdictions in particular, (xiii) renegotiation, nullification, cancellation or breach of contracts or letters of intent with customers or other parties, including failure to negotiate definitive contracts following announcements or receipt of letters of intent, (xiv) inability to collect receivables, (xv) changes in the dates new contracts actually commence, (xvi) changes in the dates our rigs will enter a shipyard, be delivered, return to service or enter service, (xvii) risks inherent to domestic and foreign shipyard rig construction, repair or enhancement, including risks associated with concentration of our ENSCO 8500 Series® rig construction contracts in a single foreign shipyard, unexpected delays in equipment delivery and engineering or design issues following shipyard delivery, (xviii) availability of transport vessels to relocate rigs, (xix) environmental or other liabilities, risks or losses, whether related to hurricane damage, losses or liabilities (including wreckage or debris removal) in the Gulf of Mexico or otherwise, that may arise in the future and are not covered by insurance or indemnity in whole or in part, (xx) limited availability or high cost of insurance coverage for certain perils such as hurricanes in the Gulf of Mexico or associated removal of wreckage or debris, (xxi) self-imposed or regulatory limitations on drilling locations in the Gulf of Mexico during hurricane season, (xxii) impact of current and future government laws and regulations affecting the oil and gas industry in general and our operations in particular, including taxation as well as repeal or modification of same, (xxiii) our ability to attract and retain skilled personnel, (xxiv) governmental action and political and economic uncertainties, including expropriation, nationalization, confiscation or deprivation of our assets, (xxv) terrorism or military action impacting our operations, assets or financial performance, (xxvi) outcome of litigation, legal proceedings, investigations, or insurance or other claims, (xxvii) adverse changes in foreign currency exchange rates, including their impact on the fair value measurement of our derivative financial instruments, (xxviii) potential long-lived asset or goodwill impairments, (xxix) potential reduction in fair value of our auction rate securities, and (xxx) 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 our website at www.enscointernational.com. All information in this news release is as of today. 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.

Source: Ensco International Incorporated

Ensco International Incorporated
Sean O’Neill, 214-397-3011
Vice President - Investor Relations