10-Q

SECURITIES AND EXCHANGE COMMISSION

Washington, D. C. 20549

FORM 10-Q

[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15 (d)

OF THE SECURITIES EXCHANGE ACT OF 1934

FOR THE QUARTERLY PERIOD ENDED JUNE 30, 2009

OR

[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15 (d)

OF THE SECURITIES EXCHANGE ACT OF 1934

FOR THE TRANSITION PERIOD FROM_____TO_____

þ1-5491

Commission File

Number

ROWAN COMPANIES, INC.

(Exact name of registrant as specified in its charter)

Delaware	75-0759420
(State or other jurisdiction of	(I.R.S. Employer
incorporation or organization)	Identification No.)

2800 Post Oak Boulevard, Suite 5450 Houston, Texas	77056-6189
(Address of principal executive offices)	(Zip Code)

(713) 621-7800

Registrant's telephone number, including area code

Inapplicable

(Former name, former address and former fiscal year, if changed since last report)

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15 (d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes þ No o

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate website, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).     Yes þ No o

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, or a non-accelerated filer.   Large accelerated filer þ Accelerated filer o Non-accelerated filer o 

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act)  Yes o   Noþ

The number of shares of common stock, $.125 par value, outstanding at July 31, 2009 was 113,745,491.

ROWAN COMPANIES, INC.

INDEX

		Page No.
PART I.	Financial Information:
Item 1.	Financial Statements (Unaudited):
	Condensed Consolidated Balance Sheets -- June 30, 2009 and December 31, 2008	1
	Condensed Consolidated Statements of Operations -- Three and Six Months Ended June 30, 2009 and 2008	3
	Condensed Consolidated Statements of Cash Flows -- Six Months Ended June 30, 2009 and 2008	4
	Notes to Unaudited Condensed Consolidated Financial Statements	5
Item 2.	Management's Discussion and Analysis of Financial Condition and Results of Operations	13
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	27
Item 4.	Controls and Procedures	27
PART II.	Other Information:
Item 1.	Legal Proceedings	28
Item 1A.	Risk Factors	28
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	28
Item 4.	Submission of Matters to a Vote of Security Holders	28
Item 6.	Exhibits	29
SIGNATURES		30

PART I. FINANCIAL INFORMATION

Item 1. Financial Statements

ROWAN COMPANIES, INC. AND SUBSIDIARIES

 CONDENSED CONSOLIDATED BALANCE SHEETS

(IN THOUSANDS, EXCEPT SHARE AMOUNTS)

(Unaudited)

	June 30,		December 31,
	2009		2008
ASSETS
CURRENT ASSETS:
Cash and cash equivalents	$	213,861	$	222,428
Receivables - trade and other		368,101		484,962
Inventories - at cost:
Raw materials and supplies		357,378		337,503
Work-in-progress		163,873		213,177
Finished goods		715		749
Prepaid expenses and other current assets		96,648		59,466
Deferred tax assets - net		45,145		50,902
Total current assets		1,245,721		1,369,187
PROPERTY, PLANT AND EQUIPMENT - at cost:
Drilling equipment		3,631,026		3,503,590
Manufacturing plant and equipment		254,377		249,725
Construction in progress		541,907		425,182
Other property and equipment		138,705		126,915
Property, plant and equipment - gross		4,566,015		4,305,412
Less accumulated depreciation and amortization		1,238,137		1,157,884
Property,  plant  and equipment - net		3,327,878		3,147,528
Other assets		25,418		32,177
TOTAL ASSETS	$	4,599,017	$	4,548,892
See Notes to Unaudited Condensed Consolidated Financial Statements.

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ROWAN COMPANIES, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED BALANCE SHEETS (continued)

(IN THOUSANDS, EXCEPT SHARE AMOUNTS)

(Unaudited)

	June 30,			December 31,
	2009			2008
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES:
Current maturities of long-term debt	$	64,922		$	64,922
Accounts payable - trade		119,155			235,048
Deferred revenues		189,430			174,086
Billings in excess of uncompleted contract costs and estimated profit		47,925			57,119
Accrued compensation and related employee costs		69,039			108,060
Accrued income taxes		4,907			58,317
Other current liabilities		45,179			47,090
Total current liabilities		540,557			744,642
Long-term debt - less current maturities		323,099			355,560
Other liabilities		374,673			362,026
Deferred income taxes - net		463,316			426,848
Commitments and contingent liabilities (Notes 7 and 8)		-			-
STOCKHOLDERS' EQUITY:
Preferred stock, $1.00 par value:
Authorized 5,000,000 shares issuable in series:
Series C Preferred Stock, authorized 9,606 shares, none outstanding		-			-
Series A Junior Preferred Stock, authorized 1,500,000 shares, none issued		-			-
Common stock, $.125 par value:
Authorized 150,000,000 shares; issued 113,857,236 shares at
June 30, 2009 and 113,115,830 shares at December 31, 2008		14,233			14,141
Additional paid-in capital		1,072,860			1,063,202
Retained earnings		2,030,305			1,802,022
Cost of 111,745 and 79,948 treasury shares, respectively		(3,010	)		(2,533	)
Accumulated other comprehensive loss		(217,016	)		(217,016	)
Total stockholders' equity		2,897,372			2,659,816
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY	$	4,599,017		$	4,548,892
See Notes to Unaudited Condensed Consolidated Financial Statements.

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ROWAN COMPANIES, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)

(Unaudited)

	For The Three Months						For The Six Months
	Ended June 30,						Ended June 30,
	2009			2008			2009			2008
REVENUES:
Drilling services	$	320,807		$	367,380		$	701,177		$	707,801
Manufacturing sales and services		161,353			219,762			275,791			364,830
Total revenues		482,160			587,142			976,968			1,072,631
COSTS AND EXPENSES:
Drilling operations (excluding items shown below)		136,840			163,238			282,221			319,777
Manufacturing operations (excluding items shown below)		147,388			179,417			238,196			305,581
Depreciation and amortization		42,609			33,461			83,108			66,552
Selling, general and administrative		24,720			30,773			49,296			58,172
Loss (gain) on disposals of  property and equipment		60			(1,507	)		(4,641	)		(6,882	)
Total costs and expenses		351,617			405,382			648,180			743,200
INCOME FROM OPERATIONS		130,543			181,760			328,788			329,431
OTHER INCOME (EXPENSE):
Interest expense		(2,457	)		(4,329	)		(5,600	)		(9,895	)
Less interest capitalized		2,343			4,329			5,107			9,168
Interest income		201			1,189			532			4,364
Other - net		2,422			909			3,836			1,244
Other income - net		2,509			2,098			3,875			4,881
INCOME BEFORE INCOME TAXES		133,052			183,858			332,663			334,312
Provision for income taxes		36,469			63,250			104,380			115,079
NET INCOME	$	96,583		$	120,608		$	228,283		$	219,233
PER SHARE AMOUNTS:
Net income - basic	$	.85		$	1.07		$	2.01		$	1.95
Net income - diluted	$	.85		$	1.06		$	2.01		$	1.94
See Notes to Unaudited Condensed Consolidated Financial Statements.

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ROWAN COMPANIES, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(IN THOUSANDS)

(Unaudited)

	For The Six Months
	Ended June 30,
	2009			2008
CASH PROVIDED BY (USED IN):
Operations:
Net income	$	228,283		$	219,233
Adjustments to reconcile net income to net cash provided by operations:
Depreciation and amortization		83,108			66,552
Deferred income taxes		42,225			28,119
Provision for pension and postretirement benefits		23,431			14,911
Stock-based compensation expense		6,004			6,652
Postretirement benefit claims paid		(1,740	)		(1,360	)
Gain on disposals of property, plant and equipment		(4,641	)		(6,882	)
Contributions to pension plans		(16,685	)		(13,259	)
Changes in current assets and liabilities:
Receivables - trade and other		107,881			(13,750	)
Inventories		24,397			(65,509	)
Prepaid expenses and other current assets		(37,182	)		(23,786	)
Accounts payable		(156,294	)		20,919
Accrued income taxes		(53,410	)		(11,391	)
Deferred revenues		15,344			(17,670	)
Billings in excess of uncompleted contract costs and estimated profit		(9,194	)		(32,401	)
Other current liabilities		(24,648	)		8,589
Net changes in other noncurrent assets and liabilities		(1,949	)		(14,368	)
Net cash provided by operations		224,930			164,599
Investing activities:
Capital expenditures		(210,265	)		(319,112	)
Proceeds from disposals of property, plant and equipment		5,472			19,245
Change in restricted cash balance		-			50,000
Net cash used in investing activities		(204,793	)		(249,867	)
Financing activities:
Repayments of borrowings		(32,461	)		(32,461	)
Payment of cash dividends		-			(22,345	)
Proceeds from stock option and convertible debenture plans and other		3,757			34,689
Net cash used in financing activities		(28,704	)		(20,117	)
DECREASE IN CASH AND CASH EQUIVALENTS		(8,567	)		(105,385	)
CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD		222,428			284,458
CASH AND CASH EQUIVALENTS, END OF PERIOD	$	213,861		$	179,073
See Notes to Unaudited Condensed Consolidated Financial Statements.

-4-

ROWAN COMPANIES, INC. AND SUBSIDIARIES

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

1.   General

The condensed consolidated financial statements of Rowan Companies, Inc. (“Rowan” or the “Company”) included in this Form 10-Q have been prepared without audit in accordance with accounting principles generally accepted in the United States of America and the rules and regulations of the Securities and Exchange Commission.  Certain information and notes have been condensed or omitted as permitted by those rules and regulations.  Rowan believes that the disclosures included herein are adequate, but suggests that these condensed consolidated financial statements be read in conjunction with the audited consolidated financial statements and related notes included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2008.

Rowan believes the accompanying unaudited condensed consolidated financial statements contain all adjustments, which are of a normal recurring nature unless otherwise noted, necessary for a fair statement of the results for the interim periods presented.  Rowan’s results of operations and cash flows for the interim periods are not necessarily indicative of results to be expected for the full year.

New Accounting Standards

In April 2009, the Financial Accounting Standards Board (“FASB”) issued FASB Staff Position (“FSP”) No. FAS 107-1 and APB 28-1, Interim Disclosures about Fair Value of Financial Instruments, which expands the fair value disclosures required for financial instruments to interim periods for publicly traded entities.  The FSP is effective for interim and annual periods ending after June 15, 2009.   Rowan adopted the provisions of the FSP during the second quarter of 2009.  Adoption had no material impact on the Company's financial statements. (See Note 11).

In May 2009, the FASB issued Statement of Financial Accounting Standards (“SFAS”) No. 165, Subsequent Events.  SFAS No. 165 establishes general standards of accounting and disclosure of events that occur after the balance sheet date but before financial statements are issued or are available to be issued, and is effective for interim or annual periods ending after June 15, 2009.  Rowan adopted the provisions of SFAS No. 165 during the second quarter of 2009.  Adoption had no material impact on the Company's financial statements. (See Note 12).

In June 2009, the FASB issued SFAS No. 168, The FASB Accounting Standards Codification and Hierarchy of Generally Accepted Accounting Principles.  SFAS No. 168 establishes the codification as the authoritative source of U.S. GAAP to be applied to nongovernmental entities and is effective for interim and annual periods ending after September 15, 2009.  Adoption is not expected to have a material impact on the Company's financial position or results of operations.

2.   Segment Information

Rowan has three principal operating segments – Drilling Services, Drilling Products and Systems, and Mining, Forestry and Steel Products.  The Drilling Services segment provides onshore and offshore oil and gas contract drilling services on a daily-rate basis.  The Drilling Products and Systems segment manufactures equipment and parts for the drilling industry featuring jack-up rigs, rig kits and related components and parts, mud pumps, drawworks, top drives, rotary tables, other rig equipment, variable-speed motors, drives and other electrical components.  The Mining, Forestry and Steel Products segment manufactures large-wheeled mining and timber equipment and related parts, and carbon and alloy steel and steel plate.  The Drilling Products and Systems and Mining, Forestry and Steel Products segments operate under the Company’s wholly owned subsidiary, LeTourneau Technologies, Inc (“LTI”).

-5-

The following table presents certain financial information by operating segment for the three and six months ended June 30, 2009 and 2008 (in millions):

	Three Months						Six Months
	Ended June 30,						Ended June 30,
	2009			2008			2009			2008
Revenues:
Drilling Services	$	320.8		$	367.4		$	701.2		$	707.8
Manufacturing:
Drilling Products and Systems		141.8			258.9			286.4			429.0
Mining, Forestry and Steel Products		54.7			61.5			98.0			115.5
Eliminations		(35.1	)		(100.7	)		(108.6	)		(179.7	)
Total Manufacturing		161.4			219.7			275.8			364.8
Total revenues from external customers	$	482.2		$	587.1		$	977.0		$	1,072.6
Income from operations:
Drilling Services	$	127.9		$	158.0		$	315.0		$	301.6
Manufacturing:
Drilling Products and Systems		3.7			39.0			30.2			53.7
Mining, Forestry and Steel Products		8.9			6.4			14.0			8.8
Eliminations		(9.9	)		(21.7	)		(30.4	)		(34.7	)
Total Manufacturing		2.7			23.7			13.8			27.8
Total income from operations	$	130.6		$	181.7		$	328.8		$	329.4

3.   Earnings Per Share

Rowan’s computations of basic and diluted income per share for the three and six months ended June 30, 2009 and 2008 are as follows (in thousands, except per share amounts):

	Three Months Ended				Six Months Ended
	June 30,				June 30,
	2009		2008		2009		2008
Average common shares outstanding		113,596		112,921		113,362		112,192
Dilutive securities:
Stock options		46		874		53		903
Convertible debentures		-		47		-		200
Average shares for diluted calculations		113,642		113,842		113,415		113,295
Net income	$	96,583	$	120,608	$	228,283	$	219,233
Net income per share:
Basic	$	.85	$	1.07	$	2.01	$	1.95
Diluted	$	.85	$	1.06	$	2.01	$	1.94

-6-

The following table sets forth securities excluded from the diluted calculations because they were antidilutive for the periods indicated.  Options and other potentially dilutive securities are antidilutive when the average stock market price during the period is less than the exercise price.  Such securities could potentially dilute earnings per share in the future (in thousands):

	Three Months Ended				Six Months Ended
	June 30,				June 30,
	2009		2008		2009		2008
Stock options		1,792		63		1,792		63
Stock appreciation rights		514		-		514		-
Convertible debentures		35		-		35		-
		2,341		63		2,341		63

4.   Pension and Other Postretirement Benefits

Rowan sponsors defined benefit pension plans covering substantially all of its employees, and provides health care and life insurance benefits for certain retired employees.

Net periodic pension cost recognized for the three and six months ended June 30, 2009 and 2008 included the following components (in thousands):

	Three Months Ended						Six Months Ended
	June 30,						June 30,
	2009			2008			2009			2008
Service cost	$	4,477		$	3,371		$	8,905		$	6,741
Interest cost		8,405			7,650			16,718			15,300
Expected return on plan assets		(7,233	)		(7,281	)		(14,387	)		(14,562	)
Recognized actuarial loss		4,040			1,467			8,056			3,966
Amortization of prior service cost		(63	)		(64	)		(125	)		(127	)
Total net pension cost	$	9,626		$	5,143		$	19,167		$	11,318

Other postretirement benefit cost recognized for the three and six months ended June 30, 2009 and 2008 included the following components (in thousands):

	Three Months Ended						Six Months Ended
	June 30,						June 30,
	2009			2008			2009			2008
Service cost	$	631		$	509		$	1,254		$	1,018
Interest cost		1,244			1,105			2,474			2,209
Recognized actuarial loss		155			68			310			138
Amortization of transition obligation		165			164			328			329
Amortization of prior service cost		(51	)		(50	)		(101	)		(101	)
Total other postretirement benefit cost	$	2,144		$	1,796		$	4,265		$	3,593

Effective July 1, 2009, the Company amended the benefit formula for its largest pension plan for active employees who were earning benefits in the plan prior to January 1, 2008.  The plan changes are expected to reduce pension expense for the second half of 2009 by approximately $7 million, or $0.04 per share net of tax.

-7-

During the first half of 2009, Rowan contributed $18.4 million to its pension and other postretirement benefit plans and expects to make additional contributions to such plans totaling approximately $26 million during the remainder of 2009.

5.   Cash and Cash Equivalents

Rowan’s debt outstanding at June 30, 2009, is government-guaranteed through the Title XI program of U.S. Department of Transportation’s Maritime Administration (“MARAD”).  At the Company’s request, MARAD waived certain windstorm insurance coverage requirements under the loan agreements, for which the Company agreed to maintain a minimum unrestricted cash balance, which is currently $25 million.  Rowan remains subject to restrictions on the use of certain insurance proceeds should the Company experience future windstorm losses.  Each of these security provisions will be released by MARAD should Rowan be able to obtain windstorm coverage that satisfies the original terms of its debt agreements.

6.   Construction Projects in Process

The following table summarizes the status of the Drilling Products and Systems segment’s long-term construction projects in process.  Payments include those received for projects in progress and not yet begun and completed projects with outstanding collections (in millions):

	June 30,		December 31,
	2009		2008
Total contract value of long-term projects in process (or not yet begun)	$	199.2	$	290.7
Payments received		132.2		168.6
Revenues recognized		86.1		119.7
Costs recognized		54.1		74.5
Payments received in excess of revenues recognized		46.1		48.9
Billings in excess of uncompleted contract costs
and estimated profit	$	47.9	$	57.1
Uncompleted contract costs and estimated profit
in excess of billings (included in other current assets)	$	1.8	$	8.2

During the three months ended June 30, 2009, Rowan recognized approximately $24.5 million of manufacturing revenues and $19.3 million of manufacturing costs related to long-term construction projects on the percentage-of-completion basis, as compared to $37.8 million of revenues and $24.0 million of costs for the comparable period of 2008.

During the six months ended June 30, 2009, Rowan recognized approximately $50.6 million of manufacturing revenues and $35.5 million of manufacturing costs on the percentage-of-completion basis, as compared to $80.5 million of revenues and $52.8 million of costs for the comparable period of 2008.

-8-

7.   Commitments

In June 2009, the Company announced it will resume construction of its third 240C class jack-up rig, the Joe Douglas, at its Vicksburg, Mississippi, shipyard, with delivery expected in the third quarter of 2011.  The Company had suspended construction of the rig in January 2009 pending a reevaluation of its capital spending plans amid the turmoil in credit markets and downturn in jack-up drilling markets.

Also in January 2009, the Company suspended construction of its fourth EXL class rig at the Keppel AmFELS, Inc. shipyard in Brownsville, Texas.  The Company plans to make a decision regarding construction of that rig in the third quarter of 2009.  Rowan has commitments outstanding of about $11 million and is subject to an estimated $22 million cancellation fee on the rig.  Should the Company cancel construction of the rig, it would probably incur an impairment charge for a significant portion of the $62 million of expenditures made and to be made, including the cancellation fee.

The following table presents the status of all of the Company’s rigs under construction as of June 30, 2009.  Amounts include capitalized interest (in millions):

	Total estimated project costs		Total costs incurred through June 30, 2009		Projected costs for the remainder of 2009		Projected costs in 2010 and 2011
Ralph Coffman (240C)	$	244	$	187	$	57	$	-
Joe Douglas (240C)		254		62		40		152
EXL #1		187		127		30		30
EXL #2		187		81		65		41
EXL #3		187		56		57		74
EXL #4 1		187		29		19		139
	$	1,246	$	542	$	268	$	436

_____________________________

1Expenditures for the EXL #4 assume management decides not to cancel construction of the rig.  In the event management decides to cancel construction, projected expenditures for the rig would be $33 million for the remainder of 2009 and zero thereafter.

Rowan periodically employs letters of credit or other bank-issued guarantees in the normal course of its businesses, and had unused letters of credit of approximately $38.7 million at June 30, 2009.

8.   Legal Proceedings

During 2005, Rowan lost four offshore rigs, including the Rowan-Halifax, and incurred significant damage on a fifth as a result of Hurricanes Katrina and Rita.  The Company leased the Rowan-Halifax under a charter agreement that commenced in 1984 and was scheduled to expire in March 2008.  The rig was insured for $43.4 million, a value that Rowan believes to be more than sufficient to satisfy its obligations under the charter agreement, and by a margin sufficient to cover the $6.3 million carrying value of Rowan equipment installed on the rig.  However, the parties holding interests in the rig under the charter claimed that the rig should have been insured for its fair market value and sought recovery from Rowan for compensation above the insured value.  Thus, Rowan assumed no insurance proceeds related to the Rowan-Halifax and recorded a charge during 2005 for the full carrying value of its equipment.  On November 3, 2005, the Company filed a declaratory judgment action styled Rowan Companies, Inc. vs. Textron Financial Corporation and Wilmington Trust Company as Owner Trustee of the Rowan-Halifax 116-C Jack-Up Rig in the 215th Judicial District Court of Harris County, Texas.  The owner interests filed a counterclaim for a variety of relief, claiming a right to payment under the charter based on a post-casualty rig valuation of approximately $83 million.  The insurance proceeds were placed in escrow.  The district court ultimately granted judgment against Rowan for the difference between (a) what Rowan had already paid to the Owner Trustee out of the escrowed insurance proceeds and (b) that rig valuation.  On March 31, 2009, the Court of Appeals for the 14th District of Texas reversed this judgment, holding that the Company’s interpretation of the charter was substantially correct, but directing Rowan to pay additional amounts due under the charter.  The Company has since made this payment out of the escrowed insurance proceeds.  In addition, the Court of Appeals remanded the case for further proceedings in the district court to resolve additional issues and to determine the parties’ respective rights to the balance of the escrowed insurance proceeds, approximately $21.4 million.  The Company believes that no further payment is owed to the opposing parties under the charter and intends to pursue that position vigorously in all subsequent court proceedings.

-9-

During 2004, Rowan learned that the Environmental and Natural Resources Division, Environmental Crimes Section of the U.S. Department of Justice (“DOJ”) had begun conducting a criminal investigation of environmental matters involving several of the Company’s offshore drilling rigs, including a rig known as the  Rowan-Midland, which at various times operated in the Gulf of Mexico.  In 2007, the Company entered into a plea agreement with the DOJ, as amended, under which the Company paid fines and made community service payments totaling $9 million and agreed to be subject to unsupervised probation for a period of three years.  During this period the Company must ensure that it commits no further criminal violations of federal, state, or local laws or regulations and must also continue to implement its comprehensive Environmental Management System Plan.  Subsequent to the conduct at issue, the Company sold the Rowan-Midland to a third party.  Concurrent with the plea agreement, the Environmental Protection Agency approved a compliance agreement with Rowan which, among other things, contains a certification that the conditions giving rise to the violations to which the Company entered guilty pleas have been corrected.  The Company believes that if it fully complies with the terms of the compliance agreement, it will not be suspended or debarred from entering into or participating in contracts with the U.S. Government or any of its agencies.

On January 3, 2008, a civil lawsuit styled State of Louisiana, ex. rel. Charles C. Foti, Jr., Attorney General vs. Rowan Companies, Inc. was filed in U.S District Court, Eastern District of Texas, Marshall Division, seeking damages, civil penalties and costs and expenses for alleged commission of maritime torts and violations of environmental and other laws and regulations involving the Rowan-Midland and other facilities in areas in or near Louisiana.  Subsequently, the case was transferred to U.S. District Court, Southern District of Texas, Houston Division.  The Company intends to vigorously defend its position in this case but cannot estimate any potential liability at this time.

In June 2007, Rowan received a subpoena for documents from the U.S. District Court, Eastern District of Louisiana, relating to a grand jury hearing.  The agency requesting the information is the U.S. Department of the Interior, Office of Inspector General Investigations.  The documents requested include all records relating to use of the Company’s entertainment facilities and entertainment expenses for a former employee of the Minerals Management Service, U.S. Department of Interior, and other records relating to items of value provided to any official or employee of the U.S. Government.  The Company fully cooperated with the subpoena.

The construction of Rowan’s fourth Tarzan Class jack-up rig, the J.P. Bussell, was originally subcontracted to an outside Gulf of Mexico shipyard, Signal International LLC (“Signal”), and scheduled for delivery in the third quarter of 2007 at a total cost of approximately $145 million.  As a result of various problems encountered on the project, Rowan exercised its right to take over the rig construction pursuant to the terms of the construction contract, and Signal turned the rig over to the Company in March 2008.  The rig was later completed by the Company more than one year behind schedule, and its final cost was approximately 40% over the original estimate.  Accordingly, Rowan has declared Signal in breach of contract and initiated court proceedings styled Rowan Companies, Inc. and LeTourneau Technologies, Inc. vs. Signal International LLC in the 269th Judicial District Court of Harris County, Texas,to recover the cost to complete the rig over and above the agreed contract price and other damages, plus interest.  Signal filed a separate counterclaim against Rowan styled Signal International LLC vs. LeTourneau, Inc., in the U.S. District Court, Southern District of Texas, Houston Division, alleging breach of contract and claiming unspecified damages for cost overruns.  That case has been administratively stayed in favor of the State Court proceeding filed by the Company.  Signal reasserted its claimed damages for amounts owed and additional costs incurred, totaling approximately $63 million as a counterclaim in the State Court suit.  The Company intends to vigorously defend its rights under the contract.  The Company does not believe that it is probable that Signal will prevail in its claim and has made no accrual for such at June 30, 2009.

-10-

On December 9, 2008, the Company received a termination letter from a customer regarding two contracts for the purchase of nine land rigs in the amount of $90.2 million and nine top drives in the amount of $10.3 million.  In the letter, the customer alleged that the top drive contract had not become effective because a down payment was never made and further alleged that they had the right to terminate the land rig contract because of late deliveries.  The Company firmly believes that both allegations are without merit.  Accordingly, the Company initiated court proceedings styled LeTourneau Technologies Drilling Systems, Inc. (“LTDSI”) vs. Nomac Drilling, LLC (“Nomac”) in the U.S. District Court, Southern District of Texas, Houston, on December 13, 2008 requesting a declaratory judgment and alleged anticipatory repudiation.  On January 5, 2009, Nomac filed a Notice of Removal to Federal Court.  The Company does not believe any loss that may result in the event of an unfavorable resolution of this matter would have a material adverse effect on its financial position, results of operations or cash flows.

During 2005, the Company learned that the DOJ was conducting an investigation of potential antitrust violations among helicopter transportation providers in the Gulf of Mexico.  Rowan's former aviation subsidiary, which was sold effective December 31, 2004, received a subpoena in connection with the investigation.  The Company has not been contacted by the DOJ, but the purchaser claimed that Rowan is responsible for any exposure it may have.  The Company has disputed that claim. On August 6, 2009, the Company received a letter from the purchaser informing the Company that Rowan’s former aviation subsidiary has been named as a defendant in a purported class action lawsuit alleging antitrust violations and claiming that Rowan is responsible for any exposure the purchaser may have under the lawsuit.  The Company disputes that claim, as well.

Rowan is involved in various other legal proceedings incidental to its businesses and is vigorously defending its position in all such matters. The Company believes that there are no other known contingencies, claims or lawsuits that could have a material adverse effect on its financial position, results of operations or cash flows.

9.   Stock-Based Compensation

In May 2009, stockholders of the Company approved the adoption of the 2009 Rowan Companies, Inc. Incentive Plan (the “2009 Plan” or the “Plan”), which replaces the 2005 Rowan Companies, Inc. Long-Term Incentive Plan.  Under the 2009 Plan, the Company may grant awards in the form of stock options, stock appreciation rights (“SARs”), restricted stock, restricted stock units (“RSUs”), or cash.  The awards may be either time-based or performance-based, in which the number of shares issued is dependent on the achievement of certain performance criteria.

On May 5, 2009, the Company granted awards under the 2009 Plan with a fair value of approximately $16.7 million.  Fair value, net of estimated forfeitures, was $16.1 million, which will be amortized over a weighted-average period of 2.9 years.

At June 30, 2009, Rowan had approximately $29 million of unrecognized future stock-based compensation expense, which is expected to be recognized over a weighted-average period of 2.3 years.

10.   Income Taxes

During the second quarter of 2009, the Company lowered its estimated full-year 2009 effective tax rate to 31.4% from 33.6%.  The reduction reflects the current-year estimated impact of a recent tax case that provides a more favorable tax treatment for certain foreign contracts entered into in prior years, but continuing through 2009 and beyond.  We are currently assessing the impact to prior open tax years and intend to complete that analysis during the third quarter.

-11-

11.   Other Financial Statement Disclosures

Fair Values of Financial Instruments – The carrying amounts of the Company’s cash and cash equivalents, trade receivables and payables and floating-rate debt approximate their fair values due to their short maturity or variable interest rate terms, as applicable.  As of June 30, 2009, the fair values of the Company’s fixed-rate notes, which had an aggregate carrying value of $192.2 million, approximated $195.3 million.   As of December 31, 2008, the fair values of the $216.5 million carrying value of fixed-rate notes approximated $244 million.  Fair values of the Company’s fixed-rate notes were estimated based on quoted market prices for the same or similar issues or on the current rates offered to the Company for debt of the same remaining maturities.

Supplemental Cash Flow Information – Interest payments (net of amounts capitalized) were $2.6 million and $2.7 million for the six months ended June 30, 2009 and 2008, respectively.  Tax payments (net of refunds) were $127.2 million and $96.7 million for the six months ended June 30, 2009 and 2008, respectively.  Accrued capital expenditures, which are excluded from capital expenditures in the Statement of Cash Flows until settlement, were $39.9 million and $27.8 million at June 30, 2009 and 2008, respectively.

Other Comprehensive Income – Rowan had no items of other comprehensive income during the three or six months ended June 30, 2009 or 2008.

12.   Subsequent Events

On July 21, 2009, Rowan issued $500 million aggregate principal amount of 7.875% senior notes due August 1, 2019, in a registered public offering, at a price of 99.341% of the principal amount.  Net proceeds of approximately $492 million, after deduction for underwriters’ discount and offering expenses, are expected to be used for general corporate purposes.

On August 4, 2009, Rowan fixed the interest rate on $65.7 million of MARAD debt outstanding at June 30, 2009, collateralized by the offshore rig, Bob Keller, at an annual rate of 3.525%.  Prior to that time, the rate floated based on a short-term commercial-paper rate plus 0.15%.

Rowan evaluated subsequent events and transactions that occurred through August 10, 2009, the date that these financial statements were issued.

-12-

ROWAN COMPANIES, INC. AND SUBSIDIARIES

Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations

SUMMARY

Our results of operations continue to benefit from contracts executed prior to the downturn in markets for our offshore drilling services and manufacturing products that began in mid-2008.  We are currently receiving day rates on several long-term drilling contracts at rates higher than current market rates.  Absent a rebound in drilling demand, our future results of operations are therefore expected to be negatively impacted as the lower market rates are realized in our reported results.  In response to the weakness in the U.S. Gulf of Mexico drilling market, we are seeking to relocate our Gulf rigs, as they become available, to other more profitable areas.  Although our operations are currently profitable overall, we can provide no assurance that they will continue to be profitable.

As of August 10, 2009, the Company had nine offshore rigs in the Middle East, seven in the U.S. Gulf of Mexico, two in the North Sea, one each offshore West Africa, Eastern Canada and Mexico, and one preparing to mobilize to Egypt, where it will begin operating in the fourth quarter of 2009.

RESULTS OF OPERATIONS

The following table highlights Rowan’s operating results for the three and six months ended June 30, 2009 and 2008 (dollars in millions):

	Three Months Ended June 30,								Six Months Ended June 30,
	2009			2008		% Change			2009			2008		% Change
Revenues:
Drilling	$	320.8		$	367.4		-13	%	$	701.2		$	707.8		-1	%
Manufacturing:
Drilling Products and Systems		106.7			158.2		-33	%		177.8			249.3		-29	%
Mining, Forestry and Steel Products		54.7			61.5		-11	%		98.0			115.5		-15	%
Total Manufacturing		161.4			219.7		-27	%		275.8			364.8		-24	%
Total revenues	$	482.2		$	587.1		-18	%	$	977.0		$	1,072.6		-9	%
Costs and expenses:
Drilling	$	192.9		$	209.4		-8	%	$	386.2		$	406.2		-5	%
Manufacturing:
Drilling Products and Systems		112.9			140.9		-20	%		178.0			230.3		-23	%
Mining, Forestry and Steel Products		45.8			55.1		-17	%		84.0			106.7		-21	%
Total Manufacturing		158.7			196.0		-19	%		262.0			337.0		-22	%
Total costs and expenses	$	351.6		$	405.4		-13	%	$	648.2		$	743.2		-13	%
Operating income (loss):
Drilling	$	127.9		$	158.0		-19	%	$	315.0		$	301.6		4	%
Manufacturing:
Drilling Products and Systems		(6.2	)		17.3		-136	%		(0.2	)		19.0		-101	%
Mining, Forestry and Steel Products		8.9			6.4		39	%		14.0			8.8		59	%
Total Manufacturing		2.7			23.7		-89	%		13.8			27.8		-50	%
Total operating income	$	130.6		$	181.7		-28	%	$	328.8		$	329.4		0	%
Net income	$	96.6		$	120.6		-20	%	$	228.3		$	219.2		4	%

-13-

For the second quarter of 2009, our consolidated operating income decreased by $51.1 million or 28%, as compared to the second quarter of 2008, on a $104.9 million or 18% decrease in revenues and a $53.8 million or 13% reduction in costs.  Net income includes income tax expense of $36.5 million (27% effective rate) and $63.3 million (34% effective rate) for the second quarter of 2009 and 2008, respectively.

For the six months, our consolidated operating income decreased by $0.6 million or less than one percent, when comparing 2009 and 2008, on a $95.6 million or 9% decrease in revenues and a $95.0 million or 13% reduction in costs.  Net income includes income tax expense of $104.4 million (31% effective rate) and $115.1 million (34% effective rate) for the first six months of 2009 and 2008, respectively.

During the second quarter of 2009, the Company lowered its estimated full-year 2009 effective tax rate to 31.4% from 33.6%.  The reduction reflects the current-year estimated impact of a recent tax case that provides a more favorable tax treatment for certain foreign contracts entered into in prior years, but continuing through 2009 and beyond.  We are currently assessing the impact to prior open tax years and intend to complete that analysis during the third quarter.

Drilling operations

Three months ended June 30, 2009, compared to three months ended June 30, 2008

The following table highlights the performance of our Drilling Services segment for the three months ended June 30, 2009 and 2008 (dollars in millions, except for average day rate):

	Three months ended June 30,
	2009						2008
	Amount			% of Revenues			Amount			% of Revenues
Revenues	$	320.8			100	%	$	367.4			100	%
Operating costs		(136.8	)		-43	%		(163.3	)		-44	%
Depreciation expense		(38.7	)		-12	%		(29.7	)		-8	%
Selling, general and administrative expenses		(17.4	)		-5	%		(17.9	)		-5	%
Net gain on property disposals		-			0	%		1.5			0	%
Operating income	$	127.9			40	%	$	158.0			43	%
Offshore fleet:
Average day rate	$	177,200					$	161,600
Rig utilization		78	%					96	%
Revenue-producing days		1,561						1,840
Land fleet:
Average day rate	$	22,400					$	22,600
Rig utilization		60	%					97	%
Revenue-producing days		1,721						2,604

-14-

Drilling revenues for the quarter decreased by $46.6 million or 13% compared to the second quarter of 2008 as a result of the following (in millions):

	Increase
	(Decrease)
Addition of the J.P. Bussell and Rowan-Mississippi1	$	23.9
Higher average offshore day rates		16.0
Addition of four land rigs2		6.5
Loss of the Rowan-Anchorage3		(5.4	)
Lower land rig utilization		(25.9	)
Lower offshore rig utilization		(55.3	)
Reimbursables and other, net		(6.4	)
Net decrease	$	(46.6	)

_____________________________________

1The J.P. Bussell and Rowan-Mississippi commenced operations in November 2008 and contributed 143 revenue-producing days for the second quarter of 2009.

2The four land rigs added to the fleet over the period from May 2008 through June 2009 resulted in an additional 259 revenue-producing days for the second quarter of 2009 as compared to the second quarter of 2008.

3The Rowan-Anchorage was lost in September 2008 during Hurricane Ike.

Drilling operating costs for the second quarter of 2009 decreased by $26.5 million, or 16%, from the second quarter of 2008 due to lower labor and repair and maintenance costs in 2009 as compared to 2008.  Drilling depreciation expense increased by $9 million or 30% between periods due primarily to the addition of the J.P. Bussell and Rowan-Mississippi in November 2008.  Selling, general and administrative expenses for the Drilling Services segment decreased by $0.5 million, or 3% between periods, due primarily to lower incentive-based compensation expense.

-15-

The following table presents certain key performance measures by geographic area for our offshore fleet for the quarterly periods indicated.  The number of rigs in each location is based on location for the majority of the period.  Average day rates are computed based on revenues recognized during the period, excluding reimbursables, divided by the number of revenue-producing days.  Revenues by area include reimbursables (dollars in thousands, except for average day rate).

	Three months ended June 30,
	2009			2008
Gulf of Mexico:
Number of rigs		9			8
Revenues	$	84,125		$	96,082
Average day rate	$	150,400		$	126,600
Utilization		66	%		98	%
Middle East:
Number of rigs		9			9
Revenues	$	102,324		$	117,333
Average day rate	$	144,700		$	153,500
Utilization		86	%		93	%
North Sea:
Number of rigs		2			2
Revenues	$	52,314		$	41,390
Average day rate	$	285,400		$	225,100
Utilization		100	%		100	%
Other international:
Number of rigs		2			2
Revenues	$	40,622		$	47,161
Average day rate	$	314,000		$	289,300
Utilization		71	%		100	%

-16-

Six months ended June 30, 2009, compared to six months ended June 30, 2008

The following table highlights the performance of our Drilling Services segment for the first six months of 2009 and 2008 (dollars in millions, except for average day rate):

	Six months ended June 30,
	2009						2008
	Amount			% of Revenues			Amount			% of Revenues
Revenues	$	701.2			100	%	$	707.8			100	%
Operating costs		(282.2	)		-40	%		(319.8	)		-45	%
Depreciation expense		(75.5	)		-11	%		(58.9	)		-8	%
Selling, general and administrative expenses		(33.2	)		-5	%		(34.4	)		-5	%
Net gain on property disposals		4.7			1	%		6.9			1	%
Operating income	$	315.0			45	%	$	301.6			43	%
Offshore fleet:
Average day rate	$	175,200					$	160,700
Rig utilization		85	%					94	%
Revenue-producing days		3,402						3,585
Land fleet:
Average day rate	$	24,100					$	22,900
Rig utilization		67	%					93	%
Revenue-producing days		3,776						4,962

Drilling revenues for the first six months of 2009 decreased by $6.6 million, or less than one percent, compared to the comparable period of 2008 as a result of the following (in millions):

	Increase
	(Decrease)
Addition of the J.P. Bussell and Rowan-Mississippi1	$	57.7
Higher average offshore day rates		27.0
Addition of four land rigs2		12.4
Higher average land day rates		3.3
Loss of the Rowan-Anchorage3		(10.7	)
Lower land rig utilization		(38.6	)
Lower offshore rig utilization		(53.8	)
Reimbursables and other, net		(3.9	)
Net decrease	$	(6.6	)

_____________________________________

1The J.P. Bussell and Rowan-Mississippi commenced operations in November 2008 and contributed 322 revenue-producing days for the first six months of 2009.

2The four land rigs added to the fleet over the period from May 2008 through June 2009 contributed an additional 497 revenue-producing days for the first six months of 2009 as compared to the comparable period of 2008.

3The Rowan-Anchorage was lost in September 2008 during Hurricane Ike.

-17-

Drilling operating costs for the first six months of 2009 decreased by $37.6 million, or 12%, from the comparable prior year period due to lower labor and repair and maintenance costs in 2009 as compared to 2008.  Drilling depreciation expense increased by $16.6 million or 28% between periods due primarily to the addition of the J.P. Bussell and Rowan-Mississippi in November 2008.  Selling, general and administrative expenses for the Drilling Services segment decreased by $1.2 million, or 3%, between periods due primarily to lower incentive-based compensation expense.

The following table presents certain key performance measures by geographic area for our offshore fleet for the six months ended June 30, 2009 and 2008.  The number of rigs in each location is based on location for the majority of the period.  Average day rates are computed based on revenues recognized during the period, excluding reimbursables, divided by the number of revenue-producing days.  Revenues by area include reimbursables (dollars in thousands, except for average day rate).

	Six months ended June 30,
	2009			2008
Gulf of Mexico:
Number of rigs		10			8
Revenues	$	208,269		$	175,482
Average day rate	$	153,400		$	120,600
Utilization		77	%		95	%
Middle East:
Number of rigs		9			9
Revenues	$	222,819		$	226,950
Average day rate	$	147,600		$	152,600
Utilization		92	%		91	%
North Sea:
Number of rigs		2			2
Revenues	$	102,425		$	85,803
Average day rate	$	282,600		$	234,400
Utilization		99	%		99	%
Other international:
Number of rigs		1			2
Revenues	$	71,478		$	96,785
Average day rate	$	320,400		$	288,300
Utilization		81	%		96	%

-18-

Drilling Products and Systems

Three months ended June 30, 2009, compared to three months ended June 30, 2008

The following table highlights the performance of our Drilling Products and Systems segment for the second quarters of 2009 and 2008 (dollars in millions):

	Three months ended June 30,
	2009						2008
	Amount			% of Revenues			Amount			% of Revenues
Revenues	$	106.7			100	%	$	158.2			100	%
Operating costs		(107.7	)		-101	%		(131.4	)		-83	%
Depreciation expense		(2.2	)		-2	%		(2.3	)		-1	%
Selling, general and administrative expenses		(3.0	)		-3	%		(7.2	)		-5	%
Operating income (loss)	$	(6.2	)		-6	%	$	17.3			11	%

Revenues from Drilling Products and Systems decreased by $51.5 million, or 33%, between periods due primarily to the following:

·   A decrease of $22.8 million attributable to $42.6 million recognized on shipments of land rigs and component packages in 2009, down from $65.4 million in 2008;

·   A decrease of $16.2 million attributable to $0.4 million recognized on shipments of top drives in 2009, down from $16.6 million in 2008;

·   A decrease of $13.3 million attributable to $24.5 million of revenues recognized on three offshore rig kit projects in progress in 2009, as compared to $37.8 million recognized on six projects in 2008.

Revenues from Drilling Products and Systems include revenues recognized under the percentage-of-completion method of accounting as well as at the time of shipment.  Our product revenues are therefore influenced by progress on long-term projects in process and the timing of shipments, and profitability is highly impacted by the mix of product sales.  Original-equipment sales, for example, have traditionally yielded lower margins than the related after-market parts sales.  Our average margin before depreciation and selling, general and administrative expenses was a negative 1% of revenues in 2009 as compared to 17% in 2008.  Margins in 2009 were negatively affected by sales mix, with a greater share of revenues from some of our lower-margin products as compared to the prior year, $4 million in warranty costs and $2 million in purchase cancellation fees.

Selling, general and administrative costs declined by $4.2 million or 58% between periods due primarily to lower compensation and related fringe benefit costs associated with reduced employment levels.

Our Drilling Products and Systems operating results for the 2009 second quarter excludes $35.1 million of revenues and $25.2 million of expenses in connection with sales of products and services to our Drilling Services segment, most of which was attributable to construction of the newbuild jack-up, Ralph Coffman.  Drilling Products and Systems operating results for the comparable quarter of 2008 excludes $100.7 million of revenues and $79.0 million of expenses, primarily for construction of the J.P. Bussell, Rowan-Mississippi and Ralph Coffman.

-19-

Six months ended June 30, 2009, compared to six months ended June 30, 2008

The following table highlights the performance of our Drilling Products and Systems segment for the first six months of 2009 and 2008 (dollars in millions):

	Six months ended June 30,
	2009						2008
	Amount			% of Revenues			Amount			% of Revenues
Revenues	$	177.8			100	%	$	249.3			100	%
Operating costs		(166.5	)		-94	%		(212.2	)		-85	%
Depreciation expense		(4.4	)		-2	%		(4.7	)		-2	%
Selling, general and administrative expenses		(7.1	)		-4	%		(13.4	)		-5	%
Operating income (loss)	$	(0.2	)		0	%	$	19.0			8	%

Revenues from Drilling Products and Systems decreased by $71.5 million, or 29%, between periods due primarily to the following:

·   A decrease of $36.8 million attributable to $48.2 million recognized on shipments of land rigs and component packages in 2009, down from $85.0 million in 2008;

·   A decrease of $29.9 million attributable to $50.6 million of revenues recognized on four offshore rig kit projects in progress in 2009, as compared to $80.5 million recognized on six projects in 2008;

·   A decrease of $17.4 million attributable to $0.7 million of revenues recognized on shipments of top drives in 2009, down from $18.1 million in 2008;

·   An increase of $9.1 million attributable to $27.8 million recognized on 29 mud pumps shipped in 2009, up from $18.7 million on 27 pumps in 2008.

Our average margin before depreciation and selling, general and administrative expenses decreased to 6% of revenues in 2009 from 15% in 2008.  Margins in 2009 were negatively affected by sales mix, with a greater share of revenues from some of our lower-margin products as compared to the prior year, $4 million in warranty costs and $2 million in purchase cancellation fees.

Selling, general and administrative costs declined by $6.3 million or 47% between periods due primarily to lower compensation and related fringe benefit costs associated with reduced employment levels.

Our Drilling Products and Systems operating results for the 2009 six-month period excludes $108.6 million of revenues and $78.2 million of expenses in connection with sales of products and services to our Drilling Services segment, most of which was attributable to construction of the newbuild jack-up, Ralph Coffman.  Drilling Products and Systems operating results for the comparable period of 2008 excludes $179.7 million of revenues and $145.0 million of expenses, primarily for construction of the J.P. Bussell, Rowan-Mississippi and Ralph Coffman.

-20-

Mining, Forestry and Steel Products

Three months ended June 30, 2009, compared to three months ended June 30, 2008

The following table highlights the performance of our Mining, Forestry and Steel Products segment for the second quarters of 2009 and 2008 (dollars in millions):

	Three months ended June 30,
	2009						2008
	Amount			% of Revenues			Amount			% of Revenues
Revenues	$	54.7			100	%	$	61.5			100	%
Operating costs		(39.7	)		-73	%		(48.0	)		-78	%
Depreciation expense		(1.6	)		-3	%		(1.5	)		-2	%
Selling, general and administrative expenses		(4.5	)		-8	%		(5.6	)		-9	%
Operating income	$	8.9			16	%	$	6.4			10	%

Our product revenues are influenced by the timing of shipments, and profitability is highly impacted by the mix of product sales, with after-market parts providing higher margins than original equipment.  As indicated in the preceding table, revenues from Mining, Forestry and Steel Products decreased by $6.8 million or 11% between periods.  Most of the decrease was attributable to lower sales of steel plate.  Revenues from steel plate sales totaled $5.3 million during the second quarter of 2009, down by $12.1 million or 70% between periods.  Shipments of front-end mining loaders and log stackers totaled six units during the second quarter of 2009, compared to seven units in the second quarter of 2008.  Parts sales increased by $1.2 million or 7% between periods to $18.1 million during the second quarter of 2009.

Our average margin before depreciation and selling, general and administrative expenses increased to 27% of revenues in the second quarter of 2009 from 22% in the comparable quarter of 2008.  The higher margins were primarily attributable to higher sales prices for steel plate and a greater share of parts sales in 2009 compared to 2008.

Six months ended June 30, 2009, compared to six months ended June 30, 2008

The following table highlights the performance of our Mining, Forestry and Steel Products segment for the first six months of 2009 and 2008 (dollars in millions):

	Six months ended June 30,
	2009						2008
	Amount			% of Revenues			Amount			% of Revenues
Revenues	$	98.0			100	%	$	115.5			100	%
Operating costs		(71.7	)		-73	%		(93.4	)		-81	%
Depreciation expense		(3.1	)		-3	%		(2.9	)		-3	%
Selling, general and administrative expenses		(9.2	)		-9	%		(10.4	)		-9	%
Operating income	$	14.0			14	%	$	8.8			8	%

As indicated in the preceding table, revenues from Mining, Forestry and Steel Products decreased by $17.5 million or 15% between periods.  Most of the decrease was attributable to lower sales of steel plate.  Revenues from steel plate sales totaled $17.5 million during the first six months of 2009, down by $15.1 million or 46% between periods.  Shipments of front-end mining loaders and log stackers totaled 9 units during the first six months of 2009, compared to 12 units in the comparable period of 2008.  Parts sales increased by $2.1 million or 6% between periods to $36.4 million during the six months of 2009.

-21-

Our average margin before depreciation and selling, general and administrative expenses increased to 27% of revenues in the first six months of 2009 from 19% in the comparable period of 2008.  The higher margins were primarily attributable to higher sales prices for steel plate and a greater share of parts sales in 2009 compared to 2008.

Outlook

Drilling Operations

The dramatic declines in oil and natural gas prices beginning in mid-2008 coupled with the weakness in global capital markets have increased our customers’ efforts to preserve liquidity and have adversely affected the economics of certain drilling projects.  Most oil and gas producers significantly reduced their 2009 drilling budgets, which rapidly impacted the global jack-up market, reducing rig utilization, increasing competition among available rigs for fewer drilling assignments and pressuring day rates.  Limitations on the availability of capital, or higher costs of capital, may cause energy companies to make additional budget reductions in the future even if oil and natural gas prices rebound.  Any such reductions would further the decline in rig utilization and day rates.

Evidence of weakening global jack-up markets includes the following:

·   Worldwide jack-up utilization is currently 73%, down from about 90% at year-end 2008;

·   Total jack-up demand is currently at 325 rigs, off 17% from the September 2008 peak;

·   Demand for premium jack-ups, which are independent-leg, cantilevered jack-ups able to operate in water depths greater than 300 feet, is currently at 194, off 10% from the peak set in December 2008;

·   There are 70 jack-ups currently under construction or on order for completion by 2012, of which only 13% are contracted.

Our backlog of drilling contracts currently exceeds $1.5 billion, which we estimate will be realized as follows: 2009 –  $500 million, 2010 – $750 million, 2011 – $260 million and 2012 – $40 million.  About 57% of our remaining available offshore rig days in 2009 are currently under contract, and most of our drilling contracts have termination penalties.  Facing reduced liquidity, certain of our customers have sought to modify existing contracts, and we have begun to experience slower collections.  Should market conditions worsen, they may seek to further delay payments or cancel drilling commitments.  Though we intend to enforce our drilling contracts and will vigorously defend our rights thereunder, any such disputes may adversely impact our results of operations and cash flows to the extent that collections are delayed and administrative costs are increased.

Hurricanes (or “windstorms”) have caused tremendous damage to drilling and production equipment and facilities throughout the Gulf Coast in recent years, and insurance companies have incurred substantial losses as a result.  Accordingly, insurance companies have substantially reduced the levels of windstorm coverage available and have dramatically increased the cost of such coverage.  Coverage for potential liabilities to third parties associated with property damage and personal injuries, as well as coverage for environmental liabilities and removal of wreckage and debris associated with hurricane losses has also been limited.

Rowan suffered a significant loss of prospective revenues and has incurred significant removal of wreckage claims from the total destruction of six rigs in three separate storms from 2002 through 2008.  Due to the increased cost and reduced availability of coverage as discussed above, in 2009 we decided to discontinue windstorm physical damage coverage on four of our older, lower-specification jack-up rigs, and our removal of wreckage coverage is subject to a $100 million per occurrence deductible.  Our windstorm physical damage coverage is subject to a $50 million per occurrence deductible with an annual aggregate limit of $150 million and covers only the Gorilla II, the Bob Palmer and the Rowan-Mississippi.

In each of the past several years, the onset of hurricane season has coincided with declines in demand and day rates in the Gulf of Mexico.  We expect this pattern to continue in future years.

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Our drilling operations are currently benefiting from contracted backlog obtained during the predominantly favorable market conditions of the past few years.  As noted above, however, market conditions have deteriorated significantly.  As our rigs roll off existing contracts, opportunities for new contracts have been limited, and some of our rigs remain idle.  We can provide no assurance that we can maintain current utilization levels, that spot day rates will remain above breakeven levels or that our drilling operations will remain profitable.

As of August 10, 2009, six of our offshore rigs had drilling contracts estimated to complete in 2011, seven had contracts estimated to complete in 2010, and eight were available.  The remaining rig was operating under a contract expected to complete in 2009.  The Ralph Coffman, currently under construction and expected to commence operations in the first quarter of 2010, has a two-year contract.

As previously reported, we have five jack-up rigs currently under construction for delivery during 2010 and 2011.  These projects will require an additional $546 million to complete, which is expected to be funded with operating cash flows during this period.  We have suspended activity on the fourth Rowan EXL rig pending a decision in the third quarter about whether to go forward with that rig.  (See Liquidity and Capital Resources – Capital Expenditures, for a discussion of the factors to be considered in making such a decision.)

Manufacturing Operations

Our manufacturing operations, like our drilling services operations, are impacted by world commodities prices.  Our Drilling Products and Systems segment is closely tied to the condition of the overall drilling industry and its demand for equipment, parts and services which, as discussed above, is heavily influenced by oil and natural gas prices.  In addition, the prospects for our Mining, Forestry and Steel Products segment are affected by prices for copper, iron ore, coal and timber.  Over the past several months, many commodity prices have declined substantially from their 2008 peaks due to the worldwide recession.  This trend, combined with the weakness in global capital markets, has forced many of our customers to preserve liquidity, and we have experienced reduced demand for most of the products and services that we offer.  We cannot predict the duration of current business conditions or quantify the impact on our operations.  Our manufacturing operations will be adversely affected if conditions remain weak or deteriorate further.

Our external manufacturing backlog, which consists of executed contracts and customer commitments, was approximately $518 million at June 30, 2009, compared to $562 million at December 31, 2008, and included $276 million related to offshore rig projects, $145 million related to land rig projects, $22 million of mining and forestry equipment, and another $38 million of ad-hoc drilling equipment.  We expect that about one-third of our external backlog at June 30, 2009, will be realized as revenue in 2009.

Facing reduced liquidity, certain of our customers have sought to modify existing orders by delaying deliveries and related payments.  Others are attempting to reduce or cancel orders altogether.  Though we fully intend to enforce our contractual rights, such actions by our customers could adversely impact our results of operations and cash flows to the extent that collections are delayed, administrative costs are increased, and we are otherwise unable to fully recover the in-process cost attributable to such orders.  We estimate that approximately $36 million or 7% of our June 30, 2009 manufacturing backlog is at risk of being delayed or canceled.  Should market conditions worsen, these actions may intensify, though we cannot assess that likelihood or the resulting impact on our results of operations or cash flows.

In November 2008, we announced that recent capital markets and commodity price weakness had adversely affected opportunities for monetizing our investment in our manufacturing operations, for what we believe to be adequate value for our stockholders.  We will continue to review all strategic options, including a spin-off of LTI to our stockholders, but do not anticipate that a transaction, if any, would be completed until demand for drilling equipment and services improves.

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LIQUIDITY AND CAPITAL RESOURCES

On July 21, 2009, the Company completed the issuance and sale of $500 million aggregate principal amount of 7.875% Senior Notes due 2019 (the “Notes”).  Net proceeds to the Company, after underwriting discount and offering expenses, were $492 million.  The Company intends to use the net proceeds from the offering for general corporate purposes.

A comparison of key balance sheet amounts and ratios as of June 30, 2009, and December 31, 2008 follows (dollars in millions):

	June 30,		December 31,
	2009		2008
Cash and cash equivalents	$	213.9	$	222.4
Current assets	$	1,245.7	$	1,369.2
Current liabilities	$	540.6	$	744.6
Current ratio		2.30		1.84
Current maturities of long-term debt	$	64.9	$	64.9
Long-term debt	$	323.1	$	355.6
Stockholders' equity	$	2,897.4	$	2,659.8
Long-term debt/total capitalization		0.10		0.12

Reflected in the comparison above are the effects of the following sources and uses of cash and cash equivalents during the periods indicated (in millions):

	Six months ended June 30,
	2009			2008
Net operating cash flows	$	224.9		$	164.6
Net proceeds from asset disposals		5.5			19.2
Proceeds from equity compensation and debenture plans and other		3.8			34.7
Net change in restricted cash balance		-			50.0
Capital expenditures		(210.3	)		(319.1	)
Debt repayments		(32.5	)		(32.5	)
Cash dividend payments		-			(22.3	)
Total sources (uses)	$	(8.6	)	$	(105.4	)

Operating Cash Flows

Operating cash flows approximated $225 million for the six months ended June 30, 2009, as compared to $165 million for the comparable period of 2008.  Our cash flows from operations have benefited and will continue to benefit from long-term drilling contracts entered into when rates were significantly higher than current market rates.  As noted, six of our offshore rigs have drilling contracts estimated to complete in 2011, and seven have contracts estimated to complete in 2010, and most of those rigs are operating under contracts at above-market rates negotiated in periods of stronger demand.  As a result, operating cash flows may be negatively affected in the future as these higher day-rate contracts are completed.  Despite the current weakness in drilling markets, we anticipate that our cash flows from operations will cover a substantial amount of our anticipated cash requirements over the next twelve months, and cash flows from operations plus available cash balances will be sufficient to meet our cash requirements over this period.

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Capital Expenditures

Reference should be made to Note 7 of Notes to Unaudited Condensed Consolidated Financial Statements in this Quarterly Report on Form 10-Q for a discussion of the status of our newbuild projects.

Capital expenditures for the first six months of 2009 included the following:

·   $83.7 million towards construction of the EXL class rigs;

·   $49.6 million towards construction of the 240C class rigs, comprised of $35.6 million for the Ralph Coffman and $14.0 million for the Joe Douglas;

·   $47.9 million for improvements to the existing offshore fleet;

·   $6.2 million related to construction of two land rigs, one of which was completed in the first quarter of 2009 with the other delivered in June 2009.

For the remainder of 2009, we expect our capital expenditures to approximate $350 million, including $268 million towards our rig construction program, including minimum amounts on EXL #4 and $70 million for existing rigs, including contractually required upgrades.  The last amount includes an incremental $43 million for necessary upgrades to our eight available rigs to take advantage of the low opportunity cost while they are idle. The Company expects to fund its capital expenditures from available cash and cash flow from operations.  We will periodically review and adjust the capital budget as necessary based upon current and forecasted cash flows and liquidity, anticipated market conditions in our drilling and manufacturing businesses and alternative uses of capital to enhance shareholder value.

Long-Term Debt

On July 21, 2009, the Company completed the sale of $500 million 7.875% Senior Notes due August 1, 2019.  The net proceeds of $492 million are expected to be used for general corporate purposes.  Interest on the Notes is payable semi-annually on February 1 and August 1 of each year, commencing February 1, 2010.

The Company may, at its option, redeem all or part of the Notes at any time at a make-whole price.  The Notes are the Company’s senior unsecured obligations and rank effectively junior to all existing and future secured debt, including our MARAD debt.  The Notes rank equally in right of payment with all of its existing and future unsecured debt that is not by its terms subordinated to the Notes, including any indebtedness under the Company’s senior revolving credit facility, and senior to any subordinated debt that the Company may incur.

Our debt agreements contain provisions that require minimum levels of cash, working capital and stockholders’ equity, and limit the amount of long-term debt and, in the event of noncompliance, restrict investment activities, asset purchases and sales, lease obligations, borrowings and mergers or acquisitions.

We were in compliance with each of our debt covenants at June 30, 2009, and we do not expect to encounter difficulty complying in the following twelve-month period.  We had no borrowings outstanding under our $155 million credit facility at June 30, 2009, and we believe that funding under the facility continues to be available, if necessary.

On August 4, 2009, Rowan fixed the interest rate on $65.7 million of MARAD debt outstanding at June 30, 2009, collateralized by the offshore rig, Bob Keller, at an annual rate of 3.525%.  Prior to that time, the rate floated based on a short-term commercial-paper rate plus 0.15%.

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Pension Obligations

Minimum contributions to our defined benefit pension plans are determined based upon actuarial calculations of pension assets and liabilities that involve, among other things, assumptions about long-term asset returns and interest rates.  Similar calculations were used to estimate pension costs and obligations as reflected in our consolidated financial statements.  As of December 31, 2008, our financial statements reflected an unfunded pension liability of $298 million.  As previously reported, we amended the benefit formula for new drilling plan entrants effective January 1, 2008 in order to reduce the rate at which the plan’s liabilities were growing.  We recently amended the plan’s benefit formula to be effective as of July 1, 2009, for active employees who were earning benefits in the plan prior to January 1, 2008.  The plan changes that become effective July 1 will result in an annualized reduction in pension expense of approximately $15 million.  Despite the recent changes to the plan, we will need to make significant pension contributions over the next several years; and additional funding would be required if asset values continue to decline.  In the wake of the profound capital market weakness beginning in 2008, the U.S. Government relaxed the minimum funding requirements implemented under the Pension Protection Act of 2006 for underfunded plans.  During the first six months of 2009, Rowan contributed $16.7 million to its pension plans and expects to make additional contributions totaling $24.2 million during the remainder of 2009.

Cash Dividends

At June 30, 2009, we had approximately $189 million of retained earnings available for distribution to stockholders under the most restrictive provisions of our debt agreements.  We do not expect to pay dividends in the foreseeable future.

Contingent Liabilities

Reference should be made to Note 8 of Notes to Unaudited Condensed Consolidated Financial Statements in this Quarterly Report on Form 10-Q for a discussion of the status of significant legal proceedings.

Critical Accounting Policies and Management Estimates

Rowan’s significant accounting policies are outlined in Note 1 of Notes to Consolidated Financial Statements included in our Form 10-K for the year ended December 31, 2008.  These policies and management judgments, assumptions and estimates made in their application underlie reported amounts of assets and liabilities at the date of the financial statements and reported amounts of revenues and expenses during the reporting period.  We believe that our most critical accounting policies and management estimates involve revenue recognition (primarily upfront service fees for equipment moves and modifications and longer-term manufacturing projects), inventory (primarily valuation allowances for excess and obsolete inventories), property and depreciation (particularly capitalizable costs, useful lives and salvage values), carrying values of long-lived assets, and pension and other postretirement benefit liabilities and costs (specifically, assumptions used in actuarial calculations).  Changes in judgments, assumptions or policies would produce significantly different amounts from those reported herein.  During the six months ended June 30, 2009, there have been no material changes to the judgments, assumptions or policies upon which our critical accounting estimates are based.

FORWARD-LOOKING STATEMENTS

This report contains “forward-looking statements” as defined by the United States Securities and Exchange Commission (“SEC”), 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 include oil and natural gas 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.  Please see the risk factors and forward-looking statement disclosure contained in our Annual Report on Form 10-K for the year ended December 31, 2008, and our Quarterly Report on Form 10-Q for the quarter ended March 31, 2009.

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Item 3. Quantitative and Qualitative Disclosures About Market Risk

Rowan’s outstanding debt at June 30, 2009, was comprised as follows: $192.2 million of fixed-rate notes bearing a weighted average annual interest rate of 4.34%, and $195.8 million of floating-rate notes bearing a weighted average annual interest rate of 0.62%.  The floating-rate notes at June 30, 2009, consisted of outstanding MARAD debt collateralized by the Bob Keller and Bob Palmer, in the amount of $65.7 million and $130.1 million, respectively, which bore interest at a short-term commercial paper rate plus 0.15% and 0.25%, respectively.  On August 4, 2009, Rowan fixed the interest rate on the Bob Keller debt at an annual rate of 3.525%.  Rowan may fix the interest rate on the Bob Palmer at any time and must fix it by July 15, 2011.  Rowan believes that its exposure to risk of earnings loss due to changes in market interest rates is limited.

Rowan has a $155 million revolving credit facility expiring in June 2011.  There were no borrowings outstanding under the facility at June 30, 2009.  The Company believes that funding under the credit facility continues to be available, if necessary.

The majority of Rowan’s transactions are carried out in United States dollars; thus, the Company’s foreign currency exposure is not material.  Fluctuating commodity prices affect Rowan’s future earnings materially to the extent that they influence demand for the Company’s products and services.  As a general practice, Rowan does not hold or issue derivative financial instruments and had no derivatives outstanding during the periods covered by this report.

Item 4. Controls and Procedures

The Company’s management has evaluated, with the participation of the Company’s Chief Executive Officer and Chief Financial Officer, the effectiveness of the Company’s disclosure controls and procedures, as of the end of the period covered by this report, pursuant to Exchange Act Rule 13a-15. Based upon that evaluation, the Company’s Chief Executive Officer, along with the Company’s Chief Financial Officer, concluded that the Company’s disclosure controls and procedures were effective as of June 30, 2009.

Our management is responsible for establishing and maintaining internal control over financial reporting. Our internal control system was designed to provide reasonable assurance to the Company’s management and Board of Directors regarding the preparation and fair presentation of published financial statements. All internal control systems, no matter how well designed, have inherent limitations, and therefore can only provide reasonable assurance with respect to financial statement preparation and presentation.

There were no changes made in our internal control over financial reporting during the quarter ended June 30, 2009, that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

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PART II.       OTHER INFORMATION

Item 1. Legal Proceedings

Reference should be made to Note 8 of Notes to Unaudited Condensed Consolidated Financial Statements in this Quarterly Report on Form 10-Q for the status of significant legal proceedings.

Item 1A.  Risk Factors

You should carefully consider the risk factors set forth in Part 1, Item 1A of our Annual Report on Form 10-K for the year ended December 31, 2008, as updated in our Quarterly Report on Form 10-Q for the quarter ended March 31, 2009, before deciding to invest in Rowan Common Stock.

Item 2.  Unregistered Sales of Equity Securities and Use of Proceeds

Issuer Purchases of Equity Securities:

The following table presents information with respect to purchases of our common stock for the periods indicated:

Month ended	Total number of shares purchased 1		Average price paid per share		Total number of shares purchased as part of publicly announced plans or programs 2		Maximum number of shares that may yet be purchased under the plans or programs
April 30, 2009		18,400	$	14.04		-		1,524,600
May 31, 2009		15,880		18.58		-		1,524,600
June 30, 2009		132		20.42		-		1,524,600
Total		34,412	$	16.16		-

_________________________________

1 The total number of shares purchased includes (i) shares purchased, if any, pursuant to a publicly announced program described in footnote 2 below and (ii) shares withheld by us to satisfy tax withholding obligations in connection with vesting of restricted stock issued to employees.  All shares acquired during the quarter ended June 30, 2009, were in connection with the vesting of restricted stock awards.

2 In 1998, we announced that our Board of Directors authorized us to purchase up to eight million shares of our common stock.  We last purchased shares under this program in 2002 and have no plans to purchase additional shares at the present time.

At June 30, 2009, Rowan had approximately $189 million of retained earnings available for distribution to stockholders under the most restrictive provisions of our debt agreements.

Item 4.  Submission of Matters to a Vote of Security Holders

See Item 4 in the Company’s Quarterly Report on Form 10-Q for the period ended March 31, 2009, for a description of matters submitted to a vote of our stockholders.

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Item 6.  Exhibits

The following is a list of exhibits filed with this Form 10-Q.  Each of the following exhibits is filed herewith, unless otherwise indicated below as being incorporated by reference to another filing of the Company:

4.1	Indenture for Senior Debt Securities dated as of July 21, 2009, between Rowan Companies, Inc. and U.S. Bank National Association, as trustee (incorporated by reference to Exhibit 4.1 of the Company’s Current Report on Form 8-K dated July 21, 2009).
4.2	First Supplemental Indenture dated as of July 21, 2009, between Rowan Companies, Inc. and U.S. Bank National Association, as trustee (incorporated by reference to Exhibit 4.2 of the Company’s Current Report on Form 8-K dated July 21, 2009).
10.1	2009 Rowan Companies, Inc. Incentive Plan (incorporated by reference to Appendix A of the Company’s definitive proxy statement dated March 19, 2009).
10.2	Form of 2009 Stock Appreciation Right Agreement under the 2009 Rowan Companies, Inc. Incentive Plan.
10.3	Form of 2009 Restricted Stock Agreement under the 2009 Rowan Companies, Inc. Incentive Plan.
10.4	Form of Non-Employee Director 2009 Restricted Stock Unit Agreement under the 2009 Rowan Companies, Inc. Incentive Plan.
10.5	Amendment No. 1 dated August 4, 2009, to the Commitment to Guarantee Obligations between Rowan and the Maritime Administration of the U.S. Department of Transportation (relating to the Bob Keller, formerly Tarzan II).
10.6	Supplement No. 2 dated August 4, 2009, to Trust Indenture between Rowan and Citibank, N.A. (relating to the Bob Keller, formerly Tarzan II).
31.1	Certification of Chief Executive Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
31.2	Certification of Chief Financial Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
32.1	Certification of Chief Executive Officer Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
32.2	Certification of Chief Financial Officer Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
101.INS	XBRL Instance Document.
101.SCH	XBRL Taxonomy Extension Schema Document.
101.CAL	XBRL Taxonomy Extension Calculation Linkbase Document.
101.LAB	XBRL Taxonomy Extension Label Linkbase Document.
101.PRE	XBRL Taxonomy Extension Presentation Linkbase Document.

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SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

	ROWAN COMPANIES, INC.
	(Registrant)
Date:  August 10, 2009	/s/ W. H. WELLS
	W. H. Wells
	Vice President – Finance and
	Chief Financial Officer
Date:  August 10, 2009	/s/ GREGORY M. HATFIELD
	Gregory M. Hatfield
	Controller
	(Chief Accounting Officer)

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EX-10.2

Exhibit 10.2

2009 ROWAN COMPANIES, INC. INCENTIVE PLAN

2009 STOCK APPRECIATION RIGHT AGREEMENT

THIS STOCK APPRECIATION RIGHT AGREEMENT (this “Agreement”) is made as of the 5th day of May, 2009 (“Grant Date”), between Rowan Companies, Inc., a Delaware corporation (the “Company”) and ____________ (the “Participant”).

1.   Grant of SAR.  To carry out the purposes of the 2009 Rowan Companies, Inc. Incentive Plan (the “Plan”), and subject to the conditions described in this Agreement and the Plan, the Company hereby grants to the Participant a stock appreciation right (“SAR”) with respect to ______ shares of common stock, $0.125 par value per share of the Company (“Stock”), effective as of the Grant Date on the terms and conditions set forth herein and in the Plan, which Plan is incorporated herein by reference as a part of this Agreement.  All capitalized terms not otherwise defined herein shall have the meanings set forth in the Plan; the Plan is incorporated herein by reference as a part of this Agreement.

2.   Exercise Price.  The exercise price of Stock purchased pursuant to the exercise of this SAR shall be $ per share.

3.   Exercise of SAR.  This SAR shall be exercisable in the manner described below for one-third of the aggregate number of SARs on and after the first anniversary of the Grant Date and an additional one-third on and after each of the second and third anniversaries of the Grant Date; provided, however, a SAR may be exercised only prior to its expiration date and, except as otherwise provided below, only while the Participant remains an Employee of the Company.  This SAR shall not be exercisable in any event after the expiration of ten years from the Grant Date hereof.  The SAR will terminate and cease to be exerciseable upon the Participant’s termination of employment with the Company, except that:

(a)   If the Participant’s employment with the Company terminates by reason of Retirement, the Participant may exercise this SAR at any time during the period of five years following the date of such termination, but only as to the number of SARs that the Participant was entitled to purchase hereunder as of the date his employment so terminates, plus such additional number of SARs, if any, that the Committee, in its sole discretion, determines to be exercisable as of such Retirement.

(b)   If the Participant dies within the five-year period following the date of the Participant’s termination of employment by reason of Retirement, the Participant’s estate, or the person who acquires this SAR by bequest or inheritance or otherwise by reason of the death of the Participant, may exercise this SAR at any time during the period of two years following the date of the Participant’s death, but only as to the number of SARs the Participant was entitled to purchase hereunder as of the date the Participant’s employment terminated by reason of Retirement.

(c)   If the Participant’s employment with the Company terminates by reason of disability, the Participant may exercise this SAR in full at any time during the period of five years following the date of such termination, but only as to the number of SARs that the Participant was entitled to purchase hereunder as of the date his employment so terminates, plus such additional number of SARs, if any, that the Committee, in its sole discretion, determines to be exercisable as of such disability.

(d)   If the Participant dies while in the employ of the Company or within the five-year period following the date of the Participant’s termination of employment by reason of disability, the Participant’s estate, or the person who acquires this SAR by bequest or inheritance or by reason of the death of the Participant, may exercise this SAR in full at any time during the period of two years following the date of the Participant’s death.

(e)   If the Participant’s employment with the Company terminates other than by reason of Retirement, disability, or death, this SAR (to the extent vested as of the date of termination and not exercised prior thereto) shall terminate upon the expiration of 90 days following the date the Participant’s employment so terminates.

4.   Exercise.  Subject to the limitations set forth herein and in the Plan, this SAR may be exercised by written notice provided to the Company, and may only be exercised with respect to a number of SAR Shares with respect to which the SAR is then exercisable.  Upon exercise of the SAR, the product of the number of the SARs exercised multiplied by the excess of the Fair Market Value (determined in accordance with the terms of the Plan) over the Exercise Price shall become payable to the Participant in shares of Stock, or, in the sole discretion of the Committee, in cash.  Such Stock issuance or single lump-sum cash payment shall be made as soon as practicable after becoming payable, but no later than 45 days after the date of exercise. Notwithstanding anything to the contrary contained herein, the Participant agrees that he will not exercise the SAR granted pursuant hereto, and that the Company will not be obligated to issue any Stock pursuant to this Award Agreement, if the exercise of the SAR or the issuance of such Stock would constitute a violation by the Participant or by the Company of any provision of any law or regulation of any governmental authority or any stock exchange or transaction quotation system.

5.   Retirement.  For purposes of the Agreement and pursuant to the terms of the Plan, Retirement of an Employee shall have occurred if, as of the Employee’s date of termination of employment:

(a)in the case of an Employee who is an employee of the Company or one of its subsidiaries (other than LeTourneau, Inc. or its subsidiaries, the employees of which are covered in (b) below), the Employee is a minimum of 60 years old and has satisfied the requirements for normal retirement pursuant to the policies of the Company in place at the time of termination; or

(b)in the case of an Employee who is an employee of LeTourneau, Inc. or one of its subsidiaries, the Employee has satisfied the requirements for either normal or late retirement pursuant to the polices of LeTourneau, Inc. in place at the time of termination.

Determination of the date of termination of employment by reason of Retirement and the satisfaction of the requirements for “Retirement” shall be based on such evidence as the Committee may require and a determination by the Committee of such date of termination and satisfaction shall be final and controlling on all interested parties.

6.   Status of Stock.  The Company intends to register for issuance under the Securities Act of 1933, as amended (the “Act”), the shares of Stock acquirable upon exercise of this SAR and to keep such registration effective throughout the period that this SAR is exercisable.  In the absence of such effective registration or an available exemption from registration under the Act, issuance of shares of Stock acquirable upon exercise of the SAR will be delayed until registration of such shares is effective or an exemption from registration under the Act is available.  The Company intends to use its reasonable efforts to ensure that no such delay will occur.  In the event exemption from registration under the Act is available upon an exercise of this SAR, the Participant (or the person permitted to exercise this SAR in the event of the Participant’s incapacity or death), if requested by the Company to do so, will execute and deliver to the Company in writing an agreement containing such provisions as the Company may require assuring compliance with applicable securities laws.  The Company shall incur no liability to the Participant for failure to register the Stock or maintain the registration.

The Participant agrees that the shares of Stock, which the Participant may acquire by exercising this SAR, will not be sold or otherwise disposed of in any manner that would constitute a violation of any applicable securities laws, whether federal or state.  The Participant also agrees (i) that the certificates representing the shares of Stock purchased under this SAR may bear such legend or legends as the Committee deems appropriate in order to assure compliance with applicable securities laws, (ii) that the Company may refuse to register the transfer of the shares of Stock purchased under this SAR on the stock transfer records of the Company if such proposed transfer would in the opinion of counsel satisfactory to the Company constitute a violation of any applicable securities law and (iii) that the Company may give related instructions to its transfer agent, if any, to stop registration of the transfer of the shares of Stock purchased under this SAR.

7.   Employment Relationship.  For purposes of this Agreement, the Participant shall be considered to be in the employment of the Company as long as the Participant remains an Employee of either the Company, a parent or subsidiary corporation (as defined in Code Section 424) of the Company, or a corporation or a parent or subsidiary of such corporation assuming or substituting a new SAR for this SAR.  Any question as to whether and when there has been a termination of such employment, and the cause and date of such termination, shall be based on such evidence as the Committee may require and a determination by the Committee as to the cause and date of such termination shall be final and controlling on all interested parties.

8.   Withholding of Tax.  Upon an exercise of this SAR, the Company is authorized in its discretion to satisfy any withholding requirement out of any cash or shares of Stock distributable to the Participant upon such exercise.

9.   Reorganization of the Company.The existence of this Agreement shall not affect in any way the right or power of the Company or its stockholders to make or authorize any or all adjustments, recapitalizations, reorganizations or other changes in the Company’s capital structure or its business; any merger or consolidation of the Company; any issuance of bonds, debentures, preferred or prior preference stock ahead of or affecting the Stock or the rights thereof; the dissolution or liquidation of the Company; any sale or transfer of all or any part of its assets or business; or any other corporate act or proceeding, whether of a similar character or otherwise.

10.   Recapitalization Events.In the event of stock dividends, spin-offs of assets or other extraordinary dividends, stock splits, combinations of shares, recapitalizations, mergers, consolidations, reorganizations, liquidations, issuances of rights or warrants and similar transactions or events involving the Company (“Recapitalization Events”), then for all purposes references herein to Stock shall mean and include all securities or other property (other than cash) that holders of Stock of the Company are entitled to receive in respect of Stock by reason of each successive Recapitalization Event, and the exercise price of the SAR shall be adjusted as deemed necessary or appropriate in the sole discretion of the Committee to prevent enlargement or dilution of the Participant’s rights under this Agreement.

11.   Transfer of SAR.  Except as provided herein, all rights granted hereunder shall not be transferable other than by will or the laws of descent and distribution and shall be exercisable during the Participant’s lifetime only by the Participant or, in the case of the Participant’s death or incapacity, by the Participant’s guardian or legal representative.  Any purported assignment, alienation, pledge, attachment, sale, transfer or encumbrance of this SAR that does not satisfy the requirements set forth hereunder shall be void and unenforceable against the Company.

12.   Severability.In the event that any provision of this Agreement shall be held illegal, invalid, or unenforceable for any reason, such provision shall be fully severable and shall not affect the remaining provisions of this Agreement, and the Agreement shall be construed and enforced as if the illegal, invalid or unenforceable provision had never been included herein.

13.   Certain Restrictions.By executing this Agreement, the Participant acknowledges that he will enter into such written representations, warranties and agreements and execute such documents as the Company may reasonably request in order to comply with this Agreement, the securities laws or any other applicable laws, rules or regulations, or the terms of the Plan.

14.   Recoupment.   Notwithstanding any provision of this Agreement to the contrary, the Committee may, in its sole discretion:

(a)   recoup from Participants all or a portion of the Stock issued or cash paid under this Agreement if the Company’s reported financial or operating results are materially and negatively restated within five years of the issuance or payment of such amounts and may cancel any SARs not yet exercised (whether or not vested); and

(b)   recoup from Participants who, in the Committee’s judgment, engaged in conduct which was fraudulent, negligent or not in good faith, and which disrupted, damaged, impaired or interfered with the business, reputation or Employees of the Company or its Affiliates or which caused a subsequent adjustment or restatement of the Company’s reported financial statements, all or a portion of the Stock issued or cash paid under this Agreement within five years of such conduct and may cancel any SARs not yet exercised (whether or not vested).

15.   Stockholder Rights.   Prior to exercise and receipt of any underlying Stock, a Participant shall have no rights of a stockholder with respect to the shares of Stock subject to the SAR.

16.   Amendment and Termination.   Except as otherwise provided in the Plan or this Agreement, no amendment or termination of this Agreement shall be made by the Company without the written consent of the Participant.

17.   Code Section 409A; No Guarantee of Tax Consequences.   This Award of SARs is intended to be exempt from Code Section 409A.  The Company makes no commitment or guarantee to the Participant that any federal or state tax treatment will apply or be available to any person eligible for benefits under this Agreement.

18.   Binding Effect.  This Agreement shall be binding upon and inure to the benefit of any successors to the Company and all persons lawfully claiming under the Participant.

19.   Governing Law and Venue.  This Agreement shall be governed by, and construed in accordance with, the laws of the State of Texas.  The courts in Harris County, Texas shall be the exclusive venue for any dispute regarding the Plan or this Agreement.

IN WITNESS WHEREOF, the Company has caused this Agreement to be duly executed by its officer thereunto duly authorized, and the Participant has executed this Agreement, all as of the day and year first above written.

ROWAN COMPANIES, INC.

By:                                                                Date:                                           , 20__

PARTICIPANT:

Date:                                           , 20__

Address:

EX-10.3

Exhibit 10.3

2009 ROWAN COMPANIES, INC. INCENTIVE PLAN

2009 RESTRICTED STOCK AGREEMENT

THIS RESTRICTED STOCK AGREEMENT (this “Agreement”) is made as of the 5th day of May, 2009 (the “Grant Date”), between Rowan Companies, Inc., a Delaware corporation (the “Company”), and _______________ (the “Participant”).

1.   Grant of Restricted Shares.     To carry out the purposes of the 2009 Rowan Companies, Inc. Incentive Plan (the “Plan”), and subject to the conditions described in this Agreement and the Plan, the Company hereby grants to the Participant all right, title and interest in the record and beneficial ownership of ______ shares (the “Restricted Shares”) of common stock, $0.125 par value per share, of the Company (“Stock”).  The grant of such Restricted Shares shall be effective as of the Grant Date.  All capitalized terms not otherwise defined herein shall have the meanings set forth in the Plan; the Plan is incorporated herein by reference as part of this Agreement.

2.   Issuance and Transferability.   The Restricted Shares may be evidenced in such a manner as the Committee shall deem appropriate.  Any certificates representing the Restricted Shares granted hereunder shall be issued in the name of the Participant as of the Grant Date and shall be marked with the following legend:

“The shares represented by this certificate have been issued pursuant to the terms of the 2009 Rowan Companies, Inc. Incentive Plan and may not be sold, pledged, transferred, assigned or otherwise encumbered in any manner except as is set forth in the terms of such award dated May 5, 2009.”

Until restrictions lapse, the Restricted Share certificates shall be left on deposit with the Company along with a stock power (substantially in the form attached hereto as Exhibit A) endorsed in blank and shall not be transferable except by will or the laws of descent and distribution or pursuant to a domestic relations order.  No right or benefit hereunder shall in any manner be liable for or subject to any debts, contracts, liabilities, or torts of the Participant.  Any purported assignment, alienation, pledge, attachment, sale, transfer or other encumbrance of the Restricted Shares, prior to the lapse of restrictions, that does not satisfy the requirements hereunder shall be void and unenforceable against the Company.  Notwithstanding the foregoing, in the case of the Participant’s disability or death, the Participant’s rights under this Agreement may be exercised by the Participant’s guardian or legal representative.

3.   Vesting/Forfeiture.   The Participant shall vest in his rights under the Restricted Shares and any accumulated dividends described in Paragraph 5 hereof, and the Company’s right to reclaim such shares or dividends shall lapse with respect to one-third of the Restricted Shares on the first anniversary of the Grant Date and an additional one-third of the Restricted Shares on each of the second and third anniversaries of the Grant Date (each anniversary, a “Vesting Date”), provided that the Participant remains continuously employed by the Company from the Grant Date to such Vesting Date.  Notwithstanding the foregoing, however, all Restricted Shares not then vested shall vest immediately if the Participant’s employment with the Company terminates due to the Participant’s disability or death.  In the event of the Participant’s Retirement (as defined in Paragraph 4 below) prior to vesting, the Committee may, in its sole discretion, accelerate vesting.  If the Participant’s employment with the Company terminates other than by reason of Retirement, disability or death, the Restricted Shares (to the extent not then vested) shall be forfeited as of the date the Participant’s employment so terminates.  As soon as administratively feasible following the vesting of the Restricted Shares, a Stock certificate evidencing the vested Restricted Shares, less the amount of Stock withheld pursuant to Paragraph 7 hereof, if any, shall be delivered without charge to the Participant, or his designated representative, without restrictive legend.  If, for any reason, the restrictions imposed by the Committee upon the Restricted Shares are not satisfied at the end of the Restricted Period, any Restricted Stock remaining subject to such restrictions shall be forfeited by the Participant.

4.   Retirement.  For purposes of this Agreement, Retirement by an Employee shall have occurred if, as of the Employee’s date of termination of employment:

(a)in the case of an Employee who is an employee of the Company or one of its subsidiaries (other than LeTourneau, Inc. or its subsidiaries, the employees of which are covered in (b) below), the Employee is a minimum of 60 years old and has satisfied the requirements for normal retirement pursuant to the policies of the Company in place at the time of termination; or

(b)in the case of an Employee who is an employee of LeTourneau, Inc. or one of its subsidiaries, the Employee has satisfied the requirements for either normal or late retirement pursuant to the polices of LeTourneau, Inc. in place at the time of termination.

Determination of the date of termination of employment by reason of Retirement and the satisfaction of the requirements for “Retirement” shall be based on such evidence as the Committee may require and a determination by the Committee of such date of termination and satisfaction shall be final and controlling on all interested parties.

5.   Dividends.   Any cash dividends that may be paid on the Restricted Shares after the Grant Date shall be accumulated and held in an account or in escrow by the Company until such time as the Participant shall vest in the Restricted Shares to which such dividends are attributable as described in Paragraph 3 above.  The Participant shall receive a cash payment equal to the pro rata portion of the accumulated dividends paid (reduced by the amount of any taxes required to be withheld with respect to such payment) with respect to the Restricted Shares as they become vested.  All accumulated dividends attributable to unvested Restricted Shares shall be forfeited, if and to the extent that the underlying Restricted Shares are forfeited.

6.   Employment Relationship.For purposes of this Agreement, the Participant shall be considered to be in the employment of the Company as long as the Participant remains an Employee of either the Company, a parent or subsidiary corporation (as defined in Code Section 424) of the Company, or a corporation or a parent or subsidiary of such corporation assuming this Agreement.  Any question as to whether and when there has been a termination of such employment, and the cause and date of such termination, shall be based on such evidence as the Committee may require and a determination by the Committee as to the cause and date of such termination shall be final and controlling on all interested parties.

7.   Withholding of Taxes.  The Company shall have the right to take any action as may be necessary or appropriate to satisfy any international, federal, state or local tax withholding obligations, including, but not limited to, the right to withhold cash or shares of Stock sufficient to pay the amount required to be withheld and to cause such Stock to be sold and the proceeds remitted to the Company.  The Participant agrees that, if he makes an election under Code Section 83(b) with regard to the Restricted Shares, he will so notify the Company in writing within two days after making such election, so as to enable the Company to timely comply with any applicable governmental reporting requirements.

8.   Reorganization of the Company.   The existence of this Agreement shall not affect in any way the right or power of the Company or its stockholders to make or authorize any or all adjustments, recapitalizations, reorganizations or other changes in the Company’s capital structure or its business; any merger or consolidation of the Company; any issuance of bonds, debentures, preferred or prior preference stock ahead of or affecting the Stock or the rights thereof; the dissolution or liquidation of the Company; any sale or transfer of all or any part of its assets or business; or any other corporate act or proceeding, whether of a similar character or otherwise.

9.   Recapitalization Events.   In the event of stock dividends, spin-offs of assets or other extraordinary dividends, stock splits, combinations of shares, recapitalizations, mergers, consolidations, reorganizations, liquidations, issuances of rights or warrants and similar transactions or events involving the Company (“Recapitalization Events”), then for all purposes references herein to Stock or to Restricted Shares shall mean and include all securities or other property (other than cash) that holders of Stock of the Company are entitled to receive in respect of Stock by reason of each successive Recapitalization Event, which securities or other property (other than cash) shall be treated in the same manner and shall be subject to the same restrictions as the underlying Restricted Shares.

10.   Status of Stock.  If required, the Company will register for issuance under the Securities Act of 1933, as amended (the “Act”), the shares of Stock acquired pursuant to this Agreement and to keep such registration effective.  In the absence of such effective registration or an available exemption from registration under the Act, issuance of shares of Stock acquired pursuant to this Agreement will be delayed until registration of such shares is effective or an exemption from registration under the Act is available.  The Company intends to use its reasonable efforts to ensure that no such delay will occur.  In the event exemption from registration under the Act is available, the Participant (or the person permitted to receive the Participant’s shares in the event of the Participant’s incapacity or death), if requested by the Company to do so, will execute and deliver to the Company in writing an agreement containing such provisions as the Company may require assuring compliance with applicable securities laws.  The Company shall incur no liability to the Participant for failure to register the Stock or maintain the registration.

The Participant agrees that the shares of Stock, which the Participant may acquire pursuant to this Agreement, will not be sold or otherwise disposed of in any manner that would constitute a violation of any applicable securities laws, whether federal or state.  The Participant also agrees (i) that the certificates representing such shares of Stock may bear such legend or legends as the Committee deems appropriate in order to assure compliance with applicable securities laws, (ii) that the Company may refuse to register the transfer of the shares of Stock acquired pursuant to this Agreement on the stock transfer records of the Company if such proposed transfer would in the opinion of counsel satisfactory to the Company constitute a violation of any applicable securities law and (iii) that the Company may give related instructions to its transfer agent, if any, to stop registration of the transfer of such shares.

11.   Severability.   In the event that any provision of this Agreement shall be held illegal, invalid, or unenforceable for any reason, such provision shall be fully severable and shall not affect the remaining provisions of this Agreement, and the Agreement shall be construed and enforced as if the illegal, invalid, or unenforceable provision had never been included herein.

12.   Certain Restrictions.   By executing this Agreement, the Participant acknowledges that he will enter into such written representations, warranties and agreements and execute such documents as the Company may reasonably request in order to comply with the terms of this Agreement or the Plan, or securities laws or any other applicable laws, rules or regulations.

13.   Recoupment.   Notwithstanding any provision of this Agreement to the contrary, the Committee may, in its sole discretion:

(a)recoup from Participants all or a portion of the Stock issued or cash paid under this Agreement if the Company’s reported financial or operating results are materially and negatively restated within five years of the grant or payment of such amounts; and

(b)recoup from Participants who, in the Committee’s judgment, engaged in conduct which was fraudulent, negligent or not in good faith, and which disrupted, damaged, impaired or interfered with the business, reputation or Employees of the Company or its Affiliates or which caused a subsequent adjustment or restatement of the Company’s reported financial statements, all or a portion of the Stock issued or cash paid under this Agreement within five years of such conduct.

14.   Amendment and Termination.  Except as otherwise provided in the Plan or this Agreement, no amendment or termination of this Agreement shall be made by the Company without the written consent of the Participant.

15.   Code Section 409A; No Guarantee of Tax Consequences.   This award of Restricted Shares is intended to be exempt from Code Section 409A.  The Company makes no commitment or guarantee to the Participant that any federal or state tax treatment will apply or be available to any person eligible for benefits under this Agreement.

16.   Binding Effect.  This Agreement shall be binding upon and inure to the benefit of any successors to the Company and all persons lawfully claiming under the Participant.

17.   Governing Law and Venue.  This Agreement shall be governed by, and construed in accordance with, the laws of the State of Texas.  The courts in Harris County, Texas shall be the exclusive venue for any dispute regarding the Plan or this Agreement.

IN WITNESS WHEREOF, the Company has caused this Agreement to be duly executed by its officer thereunto duly authorized, and the Participant has executed this Agreement, all as of the day and year first above written.

ROWAN COMPANIES, INC.

By:                                                                Date:                                           , 20__

PARTICIPANT:

Date:                                           , 20__

Address:

Exhibit A

STOCK POWER

FOR VALUE RECEIVED, ___________ (“Transferor”) hereby sells, assigns and transfers unto Rowan Companies, Inc., ____________ shares of the common stock, $.125 par value (“Common Stock”), of Rowan Companies, Inc., a Delaware corporation (the “Company”), which shares of Common Stock are represented by certificate no(s).____________, and hereby irrevocably appoints __________________ as attorney-in-fact to transfer such shares of Common Stock on the books of the Company, with full power of substitution on the premises.

Dated:  ____________, 20__

TRANSFEROR:

Printed Name:

EX-10.4

Exhibit 10.4

ROWAN COMPANIES, INC. 2009 INCENTIVE PLAN

NON-EMPLOYEE DIRECTOR 2009 RESTRICTED STOCK UNIT AGREEMENT

THIS RESTRICTED STOCK UNIT AGREEMENT (this “Agreement”) is made as of the 5th day of May, 2009 (“Grant Date”), between Rowan Companies, Inc., a Delaware corporation (the “Company”) and ____________ (the “Participant”).

1.   Grant of Restricted Stock Units.  To carry out the purposes of the Rowan Companies, Inc. 2009 Incentive Plan (the “Plan”), and subject to the conditions described in this Agreement and the Plan, the Company hereby grants to the Participant _____ Restricted Stock Units (“RSUs”) with respect to the Participant’s annual service period commencing May 5, 2009 (the “2009 Grant”).  All capitalized terms in this Agreement have the meanings set forth in the Plan; the Plan is incorporated herein by reference as part of this Agreement.

2.   Vesting.  The 2009 Grant shall be fully vested and nonforfeitable as of the date of the next following annual meeting of stockholders; provided, however, that if the Participant resigns or is removed from the Board prior to such date, such 2009 Grant shall be forfeited.

3.   Establishment of Accounts.  The Company shall maintain an appropriate bookkeeping record (the “RSU Account”) that from time to time will reflect the Participant’s name, the number of vested and unvested RSUs credited to the Participant and the Fair Market Value of the RSUs credited to the Participant.  Fair Market Value of a RSU shall be deemed to be equal to the Fair Market Value of one share of Common Stock.  The 2009 Grant shall be credited to the Participant’s RSU Account effective as of May 5, 2009.

4.   Dividends.  As of each date on or after May 5, 2009 that cash dividends are paid with respect to Common Stock, to the extent that the Participant has any outstanding RSUs credited to his or her RSU Account, the Participant shall have an additional amount credited to his or her RSU Account equal to the number of RSUs (rounded up to the nearest whole number) having a Fair Market Value equal to the dollar amount of dividends paid per share of Common Stock multiplied by the number of RSUs credited to the Participant’s RSU Account as of the payment date of such dividend.

5.   Reorganization of the Company.  The existence of this Agreement shall not affect in any way the right or power of the Company or its stockholders to make or authorize any or all adjustments, recapitalizations, reorganizations or other changes in the Company’s capital structure or its business; any merger or consolidation of the Company; any issuance of bonds, debentures, preferred or prior preference stock ahead of or affecting the Common Stock or the rights thereof; the dissolution or liquidation of the Company; any sale or transfer of all or any part of its assets or business; or any other corporate act or proceeding whether of a similar character or otherwise.

6.   Recapitalization Events.  In the event of stock dividends, spin-offs of assets or other extraordinary dividends, stock splits, combinations of shares, recapitalizations, mergers, consolidations, reorganizations, liquidations, issuances of rights or warrants and similar transactions or events involving the Company (“Recapitalization Events”), then for all purposes references herein to Common Stock or to RSUs shall mean and include all securities or other property (other than cash) that holders of Common Stock are entitled to receive in respect of Common Stock by reason of each successive Recapitalization Event, which securities or other property (other than cash) shall be treated in the same manner and shall be subject to the same restrictions as the underlying RSUs.

7.   Amount of Payment.  As of the final termination date of the Participant’s service on the Board, the aggregate Fair Market Value of all vested RSUs then credited to the Participant’s RSU Account shall be calculated by multiplying the Fair Market Value of a share of Common Stock on such date times the number of RSUs then credited to the Participant’s RSU Account.

8.   Time and Form of Payment.  Payment to the Participant of amounts due hereunder shall be made in Common Stock, or at the discretion of the Committee in cash in a lump sum, on the 30th day following the final termination date of the Participant’s services on the Board.

9.   Death Prior to Payment.  In the event that the Participant dies prior to payment, all RSUs shall become fully vested and immediately payable to the Participant’s designated beneficiary, or if none, to his or her estate.

10.   Assignability.  No right to receive payment hereunder shall be transferable or assignable by the Participant except by will or the laws of descent and distribution or pursuant to a domestic relations order.

11.   Amendment and Termination.  Except as otherwise provided in the Plan or this Agreement, no amendment or termination of this Agreement shall be made by the Company without the written consent of the Participant.

12.   Severability.  In the event that any provision of this Agreement shall be held illegal, invalid, or unenforceable for any reason, such provision shall be fully severable, but shall not affect the remaining provisions of this Agreement, and this Agreement shall be construed and enforced as if the illegal, invalid, or unenforceable provision had never been included herein.

13.   Certain Restrictions.   By executing this Agreement, the Participant acknowledges that he or she will enter into such written representations, warranties and agreements and execute such documents as the Company may reasonably request in order to comply with the terms of this Agreement or the Plan, or securities laws or any other applicable laws, rules or regulations.

14.   Recoupment.   Notwithstanding any provision of this Agreement to the contrary, the Committee may, in its sole discretion:

(a)   recoup from Participants all or a portion of the Common Stock issued or cash paid under this Agreement if the Company’s reported financial or operating results are materially and negatively restated within five years of the grant or payment of such amounts; and

(b)   recoup from Participants who, in the Committee’s judgment, engaged in conduct which was fraudulent, negligent or not in good faith, and which disrupted, damaged, impaired or interfered with the business, reputation or Employees of the Company or its Affiliates or which caused a subsequent adjustment or restatement of the Company’s reported financial statements, all or a portion of the Common Stock issued or cash paid under this Agreement within five years of such conduct.

15.   Code Section 409A; No Guarantee of Tax Consequences.   This award of RSUs is intended to comply with Code Section 409A.  The Company makes no commitment or guarantee to the Participant that any federal or state tax treatment will apply or be available to any person eligible for benefits under this Agreement.

16.   Binding Effect.  This Agreement shall be binding upon and inure to the benefit of any successors to the Company and all persons lawfully claiming under the Participant.

17.   Governing Law.  This Agreement shall be construed in accordance with the laws of the State of Texas.  The courts in Harris County, Texas shall be the exclusive venue for any dispute regarding the Plan or this Agreement.

IN WITNESS WHEREOF, the Company has caused this Agreement to be duly executed by its officer thereunto duly authorized, and the Participant has executed this Agreement, all as of the day and year first above written.

ROWAN COMPANIES, INC.

By:                                                                Date:                                           , 20__

PARTICIPANT:

Date:                                           , 20__

Address:

EX-10.5

Exhibit 10.5

AMENDMENT NO. 1

TO

COMMITMENT TO GUARANTEE OBLIGATIONS

THIS AMENDMENT NO. 1, dated as of August 4, 2009 (the "Amendment"), to that certain Commitment to Guarantee Obligations, dated as of May 28, 2003 (the "Commitment"), is by and between the United States of America, represented by the Secretary of Transportation, acting by and through the Maritime Administration (the "Secretary” or “Administrator”), and ROWAN COMPANIES, INC. (the "Shipowner", and together with the Secretary, the "Parties").

WHEREAS, on May 28, 2003, the Shipowner executed the Indenture, and issued thereunder a Floating Rate Note designated, "United States Government Guaranteed Ship Financing Obligations, TARZAN II Series" with a maximum principal amount of $89,658,000;

WHEREAS, on May 4, 2005, in connection with the changes in the Payment Dates and Stated Maturities, the Shipowner executed Supplement No. 1 to the Indenture and amended and restated the Floating Rate Note (the “Initial Transaction”);

WHEREAS, pursuant to Title XI of the Merchant Marine Act, 1936 (now codified as Chapter 537 of Title  46 of the U.S. Code), the Secretary guaranteed the payment of outstanding principal of and interest on the Floating Rate Note (“the Obligations”), the outstanding principal amount of which is currently $65,746,000;

WHEREAS, Section 4(b) of the Special Provisions of the Trust Indenture provides that the Shipowner may redeem or repay the amended and restated Floating Rate Note, in whole or in part, on a Redemption Date designated by the Shipowner, from the proceeds of the issuance of a fixed rate note (the “Fixed Rate Note”); and

WHEREAS, the Parties wish to amend certain documents relating to the Initial Transaction in order to provide for the complete redemption of the amended and restated Floating Rate Note, by the issuance of a Fixed Rate Note in the aggregate principal amount of $65,746,000;

NOW THEREFORE, in consideration of the mutual rights and obligations set forth herein and of other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Parties agree as follows:

Section 1.01  Annexed to each counterpart of this Amendment No. 1 to Commitment to Guarantee Obligations are the forms of the Obligation Purchase Agreement, Supplement No. 2 to Trust Indenture, Amendment No. 4 to Security Agreement, and the Obligations to be issued August 4, 2009, the forms of which are hereby approved by the Secretary.

Section 1.02  Article III of the Commitment shall be amended pursuant to Article V thereof, as follows:

The Obligations to be issued as a fixed rate note shall be as provided in the Indenture and in the form of the Fixed Rate Note annexed as Exhibit A to Supplement No. 2 to Trust Indenture.  The Obligations shall be subject to all of the terms and conditions set forth in the Indenture.  Supplement No. 2 to Trust Indenture, Amendment No. 4 to Security Agreement, and the Obligations to be issued as a fixed rate note shall be executed and delivered by the Shipowner on the Effective Date.

Except as so amended, the provisions of the Commitment shall apply to and govern this Amendment No. 1 to Commitment to Guarantee Obligations.

Capitalized terms not specifically defined herein shall have the respective meanings stated in Schedule A to the Trust Indenture dated May 28, 2003, as amended, between the Shipowner and the Indenture Trustee.

This Amendment No. 1 to Commitment to Guarantee Obligations may be executed in several counterparts, each of which shall be deemed an original, but all of which together shall constitute one and the same instrument.

Notwithstanding any provision herein, in the event there are any inconsistencies between the original of this document held by the Secretary, and an original held by any other party to this transaction, the provisions of the original held by the Secretary shall prevail.

IN WITNESS WHEREOF, this Amendment No. 1 to Commitment to Guarantee Obligations has been executed and sealed by the United States and accepted and sealed by the Shipowner on the day and year first above written.

UNITED STATES OF AMERICA

SECRETARY OF TRANSPORTATION

BY:  MARITIME ADMINISTRATOR

(SEAL)

ATTEST:                                                                           ____________________________Acting Secretary

___________________________

Assistant Secretary

ROWAN COMPANIES, INC.

(SEAL)

ATTEST:                                                                           By: _______________________

    Vice President, Finance and

Chief Financial Officer

___________________________

Corporate Secretary

EX-10.6

Exhibit 10.6

SUPPLEMENT NO. 2

TO

TRUST INDENTURE

THIS SUPPLEMENT NO. 2, dated August 4, 2009(“Supplement No. 2”), to that certain Trust Indenture dated May 28, 2003 (the “Indenture”), as supplemented by Supplement No. 1 dated May 4, 2005 (“Supplement No. 1”) is by and between ROWAN COMPANIES, INC., a Delaware corporation (the “Shipowner”), and MANUFACTURERS AND TRADERS TRUST COMPANY, a New York banking corporation (successor-in-interest to ALLFIRST TRUST COMPANY, NATIONAL ASSOCIATION, a national banking association), as indenture trustee (the “Indenture Trustee” and, together with the Shipowner, the “Parties”).

WHEREAS, on May 28, 2003, the Shipowner executed the Indenture, and issued thereunder a Floating Rate Note designated, "United States Government Guaranteed Ship Financing Obligations, TARZAN II Series" with a maximum principal amount of $89,658,000;

WHEREAS, on May 4, 2005, in connection with the changes in Payment Dates and Stated Maturities of the Obligations the Shipowner executed Supplement No. 1 to Indenture and issued an amended and restated $89,658,000 Floating Rate Note (the "Initial Transaction");

WHEREAS, Section 4(b) of the Special Provisions of the Indenture provides that the Shipowner may redeem or repay the amended and restated Floating Rate Note, in whole or in part, on a Redemption Date designated by the Shipowner, from the proceeds of the issuance of a fixed rate note;

WHEREAS, the outstanding principal amount of theamended and restated Floating Rate Note is currently $65,746,000; and

WHEREAS, the Parties wish to amend certain documents relating to the Initial Transaction in order to provide for the complete redemption of the amended and restated Floating Rate Note by the issuance of a fixed rate note in the aggregate principal amount of $65,746,000.

NOW THEREFORE, in consideration of the mutual rights and obligations set forth herein and of other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Parties agree as follows:

ARTICLE FIRST

Section 1.01.  Schedule A.  Schedule A to the Indenture is hereby amended by adding or substituting the following definitions:

“Authorized Newspapers” means The Wall Street Journal, or if it ceases to exist, then in such other newspaper(s) as the Secretary may designate.

"Effective Date" means August 4, 2009.

"Fixed Rate Note” or “Fixed Rate Obligation” shall mean an Obligation substantially in the form of Exhibit A to Supplement No. 2 to Indenture, appropriately completed.

"Indenture Trustee" means MANUFACTURERS AND TRADERS TRUST COMPANY, a New York banking corporation (successor-in-interest to ALLFIRST TRUST COMPANY, NATIONAL ASSOCIATION, a national banking association), and any successor trustee permitted under the Indenture.

“Letter of Representations” means the Blanket Issuer Letter of Representations between the Shipowner and DTC, any Riders thereto, and DTC’s Operational Arrangements, and other documentation necessary or desirable to effectuate the issuance of the Fixed Rate Notes as Global Obligations.

“Mortgage” means the first preferred continuing mortgage on the Vessel, Contract No. MA-13845, granted under the laws of the Republic of the Marshall Islands by the Shipowner to the Secretary, as originally executed, modified, amended or supplemented.

“Reinvestment Rate” means the yield determined by the Indenture Trustee, based on information received from the Holder or calculation agent, to be the yield of the issue of actively traded United States Treasury securities having a maturity equal to the Weighted Average Life to Final Maturity plus 0.25%; provided, however, that if such Weighted Average Life to Final Maturity is not equal to the maturity of an actively traded United States Treasury security (rounded to the nearest one-twelfth of a year), such yield shall be obtained by linear interpolation from the yields of actively traded United States Treasury securities having the greater maturity closest to and the lesser maturity closest to such Weighted Average Life to Final Maturity.  The yields shall be determined by reference to the yields as indicated by Telerate Access Service (page 8003 or the relevant page at the date of determination indicating such yields) (or, if such data ceases to be available, any publicly available sources of similar market data) at approximately 11:00 a.m. (New York City time) on the Make-Whole Premium Determination Date.

“Secretary” or “Administrator” means the Secretary of Transportation or any official or official body from time to time duly authorized to perform the duties and functions of the Secretary of Transportation under Title XI of the Act (including the Maritime Administrator, the Acting Maritime Administrator, and to the extent so authorized, the Deputy Maritime Administrator, the Acting Deputy Maritime Administrator and other officials of the Maritime Administration.

“Supplement No. 2 to Indenture” means the Supplement No. 2 to Trust Indenture dated August 4, 2009, between the Shipowner and the Indenture Trustee.

“Title XI” means Title XI of the Act (now codified as Chapter 537 of Title 46 of the U.S. Code).

“Vessel” means the Shipowner's self-elevating mobile offshore drilling unit named the BOB KELLER (ex- TARZAN II) (O.N. 3160) and constructed by LETOURNEAU, INC. in accordance with the Construction Contract, including all work and material heretofore or hereafter performed upon or installed in or placed on board such Vessel, together with related appurtenances, additions, improvements, and replacements.

All other capitalized terms used herein have the meanings set forth in Schedule A to the Indenture, as amended.

ARTICLE SECOND

The Indenture shall be amended as follows:

Section 2.01.  The Obligations.  Article 2(a) of the Special Provisions of the Indenture is hereby amended and restated in its entirety as follows:

(a) The Obligations issued hereunder shall be designated "United States Government Guaranteed Ship Financing Obligations, TARZAN II Series," and shall be substantially in the form of Exhibit Ato Supplement No. 2 to Indenture; and, the aggregate principal amount of Obligations which may be issued under this Indenture shall not exceed $65,746,000.

Section 2.02.  Article 4(a) and (c) of the Special Provisions of the Indenture is hereby amended and restated in its entirety to read as follows:

(a)           Scheduled Mandatory Redemption. The Obligations are subject to redemption at a Redemption Price equal to 100% of the principal amount thereof, together with interest accrued thereon to the applicable Redemption Date, through the operation of scheduled repayment providing for the semi-annual redemption on May 10 and November 10 of each year, from November 10, 2005 through May 10, 2009, and commencing November 1, 2009,  on May 1 and November 1 of each year thereafter, of $2,989,000 of principal amount of Obligations, which amount represents approximately one thirtieth (1/30) of the Original Principal Amount of Obligations, plus interest accrued thereon to the Redemption Date.  Unless redeemed earlier in accordance with this Indenture, there shall be a final redemption of the remaining outstanding principal of the Floating Rate Note on the Effective Date and a final redemption of the remaining outstanding principal of the Fixed Rate Note on May 1, 2020.

Notwithstanding the foregoing provisions of this subsection (a), if the principal amount of Outstanding Obligations shall be reduced by reason of any redemption pursuant to Sections 3.04 or 3.06 of Exhibit 1 to this Indenture, the principal amount of Obligations to be redeemed pursuant to this subsection (a) on each subsequent Redemption Date for such Obligations shall be reduced by an amount equal to the principal amount of such Obligations retired by reason of such redemption pursuant to Sections 3.04 or 3.06 of Exhibit 1 hereto divided by the number of Redemption Dates (including the Stated Maturity of such Obligations) scheduled thereafter to May 1, 2020 in the case of Fixed Rate Note(s) (subject to such increase as shall be necessary so that the total principal amount of Obligations to be redeemed on any such Redemption Date shall be an integral multiple of $1,000); provided that, the entire unpaid principal amount of the Outstanding Obligations shall be paid not later than the Effective Date in the case of the Floating Rate Note and May 1, 2020 in the case of each Fixed Rate Note.  The Shipowner shall, in accordance with Section 3.02(e) of Exhibit 1 hereto, promptly after each redemption pursuant to said Sections 3.04 or 3.06, furnish to the Secretary, the Indenture Trustee and each Holder a revised table of scheduled repayments reflecting the reductions made pursuant to this subsection (a) as a result of such redemption

* * *

(c) Optional Redemptions of Obligations at Make-Whole Premium.  At its option, the Shipowner may prepay on any Interest Payment Date the Fixed Rate Note, in whole or in part, at a Redemption Price equal to 100% of the principal amount thereof together with interest accrued thereon to the Redemption Date plus the Make-Whole Premium, if any.  Prepayments shall be applied pro rata against each Fixed Rate Note and applied against the scheduled principal payments in the inverse order of scheduled maturity.

Section 2.03.  Article 4(e) of the Special Provisions of the Indenture is hereby deleted in its entirety.

Section 2.04.  The phrase “in the form of Exhibit B to Supplement No. 1 to Indenture” in Article 5(f) of the Special Provisions of the Indenture is revised to read “in the form of Exhibit A to Supplement No. 2 to Indenture.”

Section 2.05.  Concerning Section 2.10 of Exhibit 1 to the Indenture, on and after the Effective Date, the Shipowner shall not execute and the Indenture Trustee shall not authenticate, transfer, exchange or deliver any Obligation unless in the form of Exhibit A to Supplement No. 2 to Indenture.

Section 2.06.  Article 5(l) of the Special Provisions of the Indenture is hereby amended and restated in its entirety to read as follows:

(l)           Concerning Section 3.05.  Section 3.05 is revised to read as follows:

SECTION 3.05.  Redemption after Total Loss, or Requisition of Title, Seizure or Forfeiture of a Vessel.  The Shipowner and the Secretary may Request a Redemption Date, at least forty (40) days but not more than sixty (60) days from the Indenture Trustee’s receipt of the Request, for the redemption of certain Obligations because of (1) an actual, constructive, agreed or compromised total loss of the Vessel, or (2) requisition of title to, or seizure or forfeiture of the Vessel.  Upon receipt, the Indenture Trustee shall promptly give notice to the Holders of the Redemption Date as provided in Section 3.08 and on that date shall redeem, out of funds it receives from the Shipowner, such principal amount of Obligations together with the interest accrued thereon.

Section 2.07.  Article 5(w) of the Special Provisions of the Indenture is hereby deleted in its entirety.

Section 2.08.  Article 5(cc) of the Special Provisions of the Indenture is hereby amended and restated in its entirety to read as follows:

(cc)           Concerning Registered and Beneficial Ownership of theObligations; Legends.

(i)                 The Fixed Rate Note will be issued in the form of a single permanent global Note in definitive, fully registered form without interest coupons (the "Global Obligation").  Except as provided in paragraph (iii) below, owners of beneficial interests in the Global Obligation ("Beneficial Owners") shall not be entitled to receive separate certificated Notes ("Definitive Obligations") and shall not be considered the holders thereof.  Each such Global Obligation shall be deposited with DTC or the Indenture Trustee, as custodian for DTC, registered in the name of Cede or such other nominee as may be requested by DTC, and duly executed by the Shipowner and authenticated by the Indenture Trustee as provided in the Indenture.  The Global Obligation shall bear such legend as DTC may require.

(ii) Members of, or participants in, DTC shall have no rights under the Indenture with respect to the Global Obligation held on their behalf by DTC or by the Indenture Trustee, as the custodian of DTC, or under the Global Obligation, and Cede or such other nominee as DTC may request may be treated by the Shipowner, the Indenture Trustee and any agent of the Shipowner or the Indenture Trustee as the absolute owner of the Global Obligation for all purposes whatsoever.  Notwithstanding the foregoing, nothing herein shall prevent the Shipowner, the Indenture Trustee or any agent of the Shipowner or the Indenture Trustee from giving effect to any written certification, proxy or other authorization furnished by DTC, Cede or such other nominee as DTC may request,  or impair, as between DTC and its members and participants, the operation of customary practices of DTC governing the exercise of the rights of an owner of a beneficial interest in the Global Obligation.

(iii) (1) The transfer and exchange of the Global Obligation or beneficial interests therein shall be effected through DTC or the Indenture Trustee, as the custodian for DTC, in accordance with the Indenture and the procedures of DTC therefor.

(2) The Global Obligation shall be exchangeable for Definitive Obligations registered in the names of persons owning the beneficial interests in the Global Obligation only if DTC notifies the Shipowner, with a copy to the Indenture Trustee, that it is unwilling or unable to continue as depositary for such Global Obligation or DTC ceases to be a clearing agency registered under the Securities Exchange Act of 1934, as amended, at a time when DTC is required to be so registered in order to act as depositary, and a successor depositary is not appointed by the Shipowner within 90 days thereafter. In such event, the Indenture Trustee shall within 30 days from receipt of such notice instruct DTC to notify its direct and indirect participants of the need to re-register the Obligations in the names of the beneficial owners.  Upon surrender by DTC of the Global Obligation issued in its name, the name of Cede or another nominee, the Shipowner shall issue at its sole cost and expense, and the Indenture Trustee shall authenticate Definitive Obligations in the names provided to the Indenture Trustee by DTC.

(3) The Global Obligation that is exchangeable for Definitive Obligations registered in the name of the owners of beneficial interests therein pursuant to this paragraph (iii) shall be surrendered by DTC to the Indenture Trustee to be so exchanged, without charge, and the Shipowner shall execute and the Indenture Trustee shall authenticate and deliver, upon such exchange of the Global Obligation, an equal aggregate principal amount of Definitive Obligations of authorized denominations.  Definitive Obligations issued in exchange for a beneficial interest in the Global Obligation pursuant hereto shall be registered in such names and in such authorized denominations as DTC, pursuant to instructions from its direct or indirect participants or otherwise, shall instruct the Indenture Trustee in writing.  The Indenture Trustee shall deliver such Definitive Obligations to the Beneficial Owners in whose names such Obligations are so registered in accordance with the instructions of DTC.

(4) The registered holder of a Global Obligation may grant proxies and otherwise authorize any Beneficial Owner, including DTC's members and participants and Beneficial Owners that may hold interest through such members and participants, to take any action which a Holder is entitled to take under the Indenture or the Obligations.

(5) In the event of the occurrence of the event specified in paragraph (iii)(2), the Shipowner shall promptly make available to the Indenture Trustee a reasonable supply of Definitive Obligations.

(6) Notwithstanding any other provision of the Indenture, the Global Obligation may not be transferred except as a whole by DTC to a nominee of DTC or by a nominee of DTC to DTC or another nominee of DTC.

(iv) At such time as all beneficial interests in a Global Obligations have either been exchanged for Definitive Obligations, redeemed, repurchased or canceled, the Global Obligation shall be returned to the Indenture Trustee for cancellation or retained and canceled by the Indenture Trustee.

(v) The Indenture Trustee shall have no responsibility or obligation to any owner of a beneficial interest in the Global Obligation, a member of, or a participant in, DTC or any other Beneficial Owner with respect to the accuracy of the records of DTC or its nominee or of any participant or member thereof, with respect to any ownership interest in the Obligations or with respect to the delivery to any participant, member, beneficial owner or other Beneficial Owner (other than DTC) of any notice (including any notice of redemption) or the payment of any amount or delivery of any Obligations (or other security or property) under or with respect to such Obligations.  All notices and communications to be given to the Holders and all payments to be made to Holders in respect to the Obligations shall be given or made only to or upon the order of the registered Holders (which shall be DTC, Cede or such other nominee as may be requested by DTC, in the case of the Global Obligation).  The rights of owners of beneficial interests in the Global Obligation shall be exercised only through DTC subject to the applicable rules and procedures of DTC.  The Indenture Trustee may rely and shall be fully protected in relying upon information furnished by DTC with respect to its members, participants and any beneficial owners.

Section 2.09.  Endorsement of Floating Rate Note.  Upon surrender of the Floating Rate Note issued on May 4, 2005 to the Indenture Trustee by the Holder thereof following the payment in full of all amounts due thereunder, such Floating Rate Note shall be endorsed to show the redemption of the outstanding amount and thereupon shall be cancelled.

Section 2.10.  Form of Fixed Rate Note.  The form of Fixed Rate Note is attached as Exhibit A to this Supplement No. 2 to Indenture.

Section 2.11.  Issuance of Fixed Rate Note.  On and after the Effective Date, the Shipowner shall issue and deliver to the Holders thereof Fixed Rate Note(s) in accordance with the Indenture substantially in the form of Exhibit A to Supplement No. 2 to Indenture.

Section 2.12.  Concerning Notice.  Article 6 (a) of the Special Provisions to the Indenture is amended to provide that notices to the Secretary and the Indenture Trustee shall be given as follows:

To the Secretary

Address: SECRETARY OF TRANSPORTATION

c/o Maritime Administrator

Second Floor West Building

Southeast Federal Center

1200 New Jersey Avenue, SE

Washington, D.C.  20590

Attention:                                Shipyard and Marine Financing

Telephone:                              (202) 366-5744

Facsimile:                              (202) 366-7901

To the Indenture Trustee

Address: MANUFACTURERS AND TRADERS TRUST COMPANY

Mail Code MD2-CS58

25 South Charles Street

Baltimore, Maryland  21201

Attention: Mr. Donald C. Hargadon

Telephone: (410) 244-4224

Facsimile: (410) 244-4236

Except as so amended, the provisions of the Indenture are hereby confirmed, and shall remain in full force and effect.

This Supplement No. 2 to Indenture may be executed in several counterparts, each of which shall be deemed an original, but all of which together shall constitute one and the same instrument.

Notwithstanding any provision herein, in the event there are any inconsistencies between the original of this document held by the Secretary, and an original held by any other party to this transaction, the provisions of the original document held by the Secretary shall prevail.

IN WITNESS WHEREOF, this Supplement No. 2 to Indenture has been duly executed by the Parties as of the day and year first above written.

(SEAL)                                                                ROWAN COMPANIES, INC.

ATTEST:

By:______________________

   Vice President, Finance and

   Chief Financial Officer

________________________

Corporate Secretary

MANUFACTURERS AND TRADERS TRUST

COMPANY

(SEAL)                                                                Indenture Trustee

ATTEST:

By:_______________________

   Vice President

________________________

Vice President

CONSENT:

Pursuant to Section 10.05 of the General Provisions Incorporated into the Trust Indenture by Reference attached as Exhibit 1 to the Trust Indenture, the Secretary hereby consents to this Supplement No. 2 to Trust Indenture.

ATTEST:                                                          UNITED STATES OF AMERICA,

 SECRETARY OF TRANSPORTATION

                                              BY:  MARITIME ADMINISTRATION

 By:__________________________

     Acting Secretary

EX-31

Exhibit 31.1

CERTIFICATION OF CHIEF EXECUTIVE OFFICER

PURSUANT TO SECTION 302 OF

THE SARBANES-OXLEY ACT OF 2002

I, W. Matt Ralls, Chief Executive Officer of Rowan Companies, Inc., certify that:

1.   I have reviewed this quarterly report on Form 10-Q of Rowan Companies, Inc.;

2.   Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3.   Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4.   The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

(a)   Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b)   Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

(c)   Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(d)   Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting.

5.   The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

(a)   All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

(b)   Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date:August 10, 2009	/s/ W. MATT RALLS
	W. Matt Ralls
	President and Chief Executive Officer

Exhibit 31.2

CERTIFICATION OF CHIEF FINANCIAL OFFICER

PURSUANT TO SECTION 302 OF

THE SARBANES-OXLEY ACT OF 2002

I, W. H. Wells, Chief Financial Officer of Rowan Companies, Inc., certify that:

1.   I have reviewed this quarterly report on Form 10-Q of Rowan Companies, Inc.;

2.   Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3.   Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4.   The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

(a)   Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b)   Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

(c)   Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation;and

(d)   Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting.

5.   The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

(a)   All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

(b)   Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date:August 10, 2009	/s/ W. H. WELLS
	W. H. Wells
	Vice President - Finance and Chief Financial Officer

EX-32

Exhibit 32.1

CERTIFICATION OF CHIEF EXECUTIVE OFFICER

PURSUANT TO 18 U. S. C. SECTION 1350,

AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Quarterly Report of Rowan Companies, Inc. (the “Company”) on Form 10-Q for the period ended June 30, 2009, as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, W. Matt Ralls, Chief Executive Officer of the Company, certify, pursuant to 18 U.S.C. §1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that, to the best of my knowledge:

(1)   The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

(2)   The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company for the periods presented.

Date:August 10, 2009	/s/ W. MATT RALLS
	W. Matt Ralls
	President and Chief Executive Officer

Exhibit 32.2

CERTIFICATION OF CHIEF FINANCIAL OFFICER

PURSUANT TO 18 U. S. C. SECTION 1350,

AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Quarterly Report of Rowan Companies, Inc. (the “Company”) on Form 10-Q for the period ended June 30, 2009, as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, W. H. Wells, Chief Financial Officer of the Company, certify, pursuant to 18 U.S.C. §1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that, to the best of my knowledge:

(1)   The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

(2)   The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company for the periods presented.

Date:August 10, 2009	/s/ W. H. WELLS
	W. H. Wells
	Vice President - Finance and Chief Financial Officer