Rowan Companies PLC Earnings Call Insights: India and the Gulf of Mexico Units

Rowan Companies PLC (NYSE:RDC) recently reported its fourth quarter earnings and discussed the following topics in its earnings conference call.


Greg Lewis – Credit Suisse: Mark, you touched on some of the strength in the Middle East, and you mentioned ONGC. I believe earlier this week, ONGC put out a tender for 10 rigs. From what I gather, there was a lack of rigs being bid on that contract, could you talk a little bit to what’s going on in India? Also, I know you have the Paris in the Middle East, is there any chance that we could either see that rig be reactivated by Rowan or potentially sold to maybe somebody else.

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Mark A. Keller – EVP, Business Development: I will address the India part of it and I’ll let Kevin talk to you about the Paris. Obviously, if we got a contract that would warrant bringing the rig out, had enough term and the day rate was high enough we would certainly look at it, but I’ll let Kevin talk to you about our alternatives position on selling the unit possibly. As far as India goes, Greg, their plans are initially were to tender for a total of 17 rigs. I know they’ve had some resistance to their last round of tenders, I think a lot of that is the reason that we don’t tender there, so I can’t really give you a lot of detail, but I think part of the challenge with working with ONGC is the owners contract terms that they make you sign, and with the market increasing like it is, I think they’re meeting some resistance and they may have to rethink some of the liabilities that they’re forcing on drilling contractors today. But they are trying to high grade that fleet is what they’re trying to do.

J. Kevin Bartol – EVP and CFO: Greg, I can comment briefly on the Paris. As Mark mentioned, we would consider opportunities to bring that out and put it on contract, as we did with the Gilbert Rowe, its sister rig for ARAMCO. The Paris essentially requires some hull replacement and some jacking system repair, so there would be some money that had to be invested into the rig to get it ready to go to a contract. We also would consider an offer for the rig and on an as is, where is basis. So, we’re considering both options there.