EX-99 2 exhibit99form8k1stqtr2008.htm EXHIBIT 99.1 Exhibit 99.1
Exhibit 99.1
NEWS RELEASE
ENSCO INTERNATIONAL INCORPORATED

500 North Akard • Suite 4300 • Dallas, Texas 75201-3331
Tel: (214) 397-3000 • Fax: (214) 397-3370 • Web Site: www.enscous.com

 
ENSCO INTERNATIONAL REPORTS RECORD FIRST QUARTER 2008 RESULTS
AND ANNOUNCES NEW ULTRA-DEEPWATER SEMISUBMERSIBLE RIG
 
      Dallas, Texas, April 24, 2008 ... ENSCO International Incorporated (NYSE: ESV) reported net income increased by 17% in the quarter ended March 31, 2008, to $272.0 million ($1.90 per diluted share) on revenues of $580.3 million, as compared to net income of $232.3 million ($1.54 per diluted share) on revenues of $514.1 million for the quarter ended March 31, 2007.
 
      The average day rate for ENSCO's 44-jackup rig fleet for the quarter ended March 31, 2008, increased to $142,500, as compared to $133,200 in the prior year quarter. Utilization of the Company's jackup rig fleet was at 95% in the first quarter of 2008 compared to 93% in the first quarter of 2007.
 
      Dan Rabun, Chairman, President and Chief Executive Officer, commented on the Company's results, outlook and deepwater initiative: "Our record first quarter operating performance was largely attributed to higher day rates for our 31-rig international jackup fleet and our deepwater semisubmersible rig. The average day rate increased by 19% for our international jackup rig fleet and by 43% for our deepwater semisubmersible rig over first quarter 2007 levels.
 
      "We completed a scheduled enhancement project on ENSCO 93 during the first quarter, and the rig has returned to service in the Gulf of Mexico. We do not have any other rig enhancement projects scheduled for 2008, although such work may be required if any of our rigs are repositioned to other geographic locations. Under these circumstances, we anticipate a significant reduction in shipyard days in 2008 (63 days) as compared to the 442 and 491 days incurred in 2007 and 2006, respectively.
 
      "We are nearing completion of the first of our ENSCO 8500 Series® ultra-deepwater semisubmersible rigs. ENSCO 8500 is expected to be delivered late in the third quarter of 2008 and we anticipate commencing drilling operations in the U.S. Gulf of Mexico by mid-first quarter 2009 following completion of rig commissioning, mobilization and final outfitting. The other three 8500 Series rigs are currently scheduled for delivery in Singapore in the first and fourth quarters of 2009 (ENSCO 8501 and ENSCO 8502, respectively) and in the third quarter of 2010 (ENSCO 8503). With the announcement of the letter of intent for ENSCO 8503 at a rate of $510,000 per day with a primary term of two years, all four rigs are committed for multi-year operations in the Gulf of Mexico.
 
      "We continually evaluate construction of additional deepwater rigs to meet the unprecedented demand for deepwater drilling. I am pleased to announce that our Board of Directors has authorized construction of an additional 8500 Series rig at a cost of approximately $515 million with a delivery date in the second half of 2011. Subject to negotiation of a mutually acceptable shipyard contract, it is contemplated that the new rig, to be named ENSCO 8504, will be the fifth in the series to be constructed by Keppel FELS of Singapore.
 
 


 
      "Looking forward to the remainder of the year, we already have contracted virtually all of our international jackup rig days for 2008 and are now having discussions with customers concerning programs for 2009 and beyond. We also are seeing improvement in backlog and day rates for our 13-rig U.S. Gulf of Mexico jackup fleet. As a result, we remain very positive about our prospects for 2008. With the planned expansion of our deepwater fleet and continued strength in markets for our premium jackups, we believe we are well positioned for future growth."
 
      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. Such forward-looking statements include references to future earnings and financial performance expectations, trends in day rates, utilization or rig relocations, future rig rates or utilization, rig enhancement projections, shipyard construction or work completion, and other contract or letter of intent commitments, including new rig commitments, the period of time and number of rigs that will be in a shipyard for enhancement or construction, scheduled delivery dates for new rigs, scheduled commencement dates for new contracts, rig relocations, market trends, expectations, outlook, projections or conditions for 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 or letters of intent with customers or other parties, including failure to negotiate definitive contracts following announcements or receipt of letters of intent, (vii) changes in the dates our rigs undergoing shipyard construction work, repairs or enhancement will enter a shipyard, be delivered, 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, including unexpected rig enhancement project delays in equipment delivery and engineering or design issues following shipyard delivery, (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 or our operations in particular, including taxation 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 ability 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) expropriation, nationalization, deprivation, terrorism or military action impacting our operations, assets 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 April 24, 2008. 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.
 
 
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      ENSCO, headquartered in Dallas, Texas, provides contract drilling services to the global petroleum industry.
 
 
Contact: Richard LeBlanc
              214-397-3011
 
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      ENSCO will conduct a conference call at 10:00 a.m. Central Time on Thursday April 24, 2008, to discuss its first quarter 2008 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) 325-4804. 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 8764916). 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.
 
 
 
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ENSCO INTERNATIONAL INCORPORATED
CONDENSED CONSOLIDATED STATEMENT OF INCOME

(In millions, except per share data)
(Unaudited)

          Three Months Ended
                        March 31,          
        2008           2007  
 
OPERATING REVENUES           $580.3   $514.1  
 
OPERATING EXPENSES 
    Contract drilling           190.7   162.8  
    Depreciation           47.5   45.1  
    General and administrative          12.7   16.0  

           250.9   223.9  

 
OPERATING INCOME          329.4   290.2  
 
OTHER INCOME (EXPENSE)                 
    Interest income          5.0   6.2  
    Interest expense, net          --   (1.1 )
    Other, net          (0.5 ) 4.5  

              4.5   9.6  

 
INCOME BEFORE INCOME TAXES          333.9   299.8  
 
PROVISION FOR INCOME TAXES          61.9   67.5  

NET INCOME          $272.0   $232.3  

 
EARNINGS PER SHARE                 
    Basic          $  1.90   $  1.55  
    Diluted          $  1.90   $  1.54  
 
WEIGHTED AVERAGE COMMON SHARES
   OUTSTANDING
                 
    Basic          142.8   149.9  
    Diluted          143.5   150.7  



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ENSCO INTERNATIONAL INCORPORATED
CONDENSED CONSOLIDATED BALANCE SHEET

(In millions)

 
  March 31, December 31,
         2008                2007        
  (Unaudited)  
 
                                                  ASSETS 
 
CURRENT ASSETS      
     Cash and cash equivalents  $    664.9   $    629.5  
     Accounts receivable, net  421.3   383.2  
     Other  118.2   116.6  

        Total current assets  1,204.4   1,129.3  
 
PROPERTY AND EQUIPMENT, NET  3,437.5   3,358.9  
 
GOODWILL  336.2   336.2  
 
LONG-TERM INVESTMENTS  74.9   --  
 
OTHER ASSETS, NET  142.0   144.4  

 
   $5,195.0   $4,968.8  

 
                       LIABILITIES AND STOCKHOLDERS' EQUITY 
 
CURRENT LIABILITIES 
     Accounts payable and accrued liabilities  $    423.0    $    484.4  
     Current maturities of long-term debt  20.3   19.1  

        Total current liabilities  443.3   503.5  
 
LONG-TERM DEBT  291.4   291.4  
 
DEFERRED INCOME TAXES  356.9   352.0  
 
OTHER LIABILITIES  72.5   69.9  
 
STOCKHOLDERS' EQUITY  4,030.9   3,752.0  

 
   $5,195.0   $4,968.8  



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ENSCO INTERNATIONAL INCORPORATED
CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS

(In millions)
(Unaudited)

  Three Months Ended
          March 31,            
     2008          2007  
 
OPERATING ACTIVITIES          
    Net income  $272.0   $232.3  
    Adjustments to reconcile net income to net cash provided 
      by operating activities: 
           Depreciation  47.5   45.1  
           Changes in operating assets and liabilities  (191.5 ) (7.4 )
           Other  23.2   9.7  

                  Net cash provided by operating activities  151.2   279.7  

 
INVESTING ACTIVITIES 
    Additions to property and equipment  (116.2 ) (106.0 )
    Other  1.0   1.6  

                  Net cash used in investing activities  (115.2 ) (104.4 )

 
FINANCING ACTIVITIES 
    Repurchase of common stock  (0.1 ) (127.8 )
    Cash dividends paid  (3.6 ) (3.8 )
    Proceeds from exercise of stock options  3.1   9.8  
    Other  1.8   1.1  

                  Net cash provided by (used in) financing activities  1.2   (120.7 )

 
Effect of exchange rate fluctuations on cash and cash equivalents  (1.8 ) --  

 
INCREASE IN CASH AND CASH EQUIVALENTS  35.4   54.6  
 
CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD  629.5   565.8  

 
CASH AND CASH EQUIVALENTS, END OF PERIOD  $664.9   $620.4  



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ENSCO INTERNATIONAL INCORPORATED
OPERATING STATISTICS

(Unaudited)

 
      Fourth
         First Quarter         Quarter
    2008     2007     2007  
 
Contract drilling              
Average day rates  
     Jackup rigs  
        Asia Pacific   $143,303   $120,728   $136,768  
        Europe/Africa   213,123   182,536   212,844  
        North and South America   89,361   117,858   88,586  

           Total jackup rigs   142,524   133,238   140,851  
     Semisubmersible rig - N. America   279,962   195,740   201,008  
     Barge rig - Asia Pacific   72,800   56,509   72,997  

           Total   $144,407   $132,843   $140,755  

 
Utilization 
     Jackup rigs  
        Asia Pacific   97%   99%   99%  
        Europe/Africa   99%   95%   89%  
        North and South America   92%   85%   75%  

           Total jackup rigs   95%   93%   89%  
     Semisubmersible rig - N. America   96%   97%   97%  
     Barge rig - Asia Pacific   92%   100%   100%  

           Total   95%   93%   89%  

 
 
 
 



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