UPDATE 1-Rowan receives commitment for ultradeepwater rig

Thu Aug 2, 2012 11:29am EDT

* Commitment for a three-year contract

* Co sees rig's effective daily rate at $614,000-$624,000

* Second quarter adj EPS $0.51 vs est $0.50

* Second quarter rev up 57 pct at $351 mln

Aug 2 (Reuters) - Contract driller Rowan Cos Plc reported a better-than-expected quarterly profit and said it has received a commitment for a three-year contract for the first of its three under-construction ultradeepwater rigs.

Signalling rising demand for ultradeepwater rigs, Norwegian offshore rig operator Seadrill Ltd last week won a deal potentially worth $4 billion for three of its drillships.

"We continue to be encouraged by customer interest in these very high specification rigs," Chief Executive Matt Ralls said in a statement.

He said the ultradeepwater rig Rowan Renaissance would receive an effective daily rate of between $614,000 and $624,000.

The rig will be moved to West Africa for the first year of the contract and likely be shifted to the Gulf of Mexico for the remaining two years, said Mark Keller, vice president-business development, on a conference call with analysts.

Rowan, which owns 31 shallow-water rigs and is awaiting the delivery of three ultradeepwater rigs starting late 2013, said higher utilization and daily rates helped its second-quarter results.

Rig utilization rates rose to 79 percent from 70 percent a year earlier and average daily rates for rigs rose 15 percent, the company said.

Second-quarter net income fell to $49.4 million, or 40 cents per share, from $465.9 million, or $3.65 per share, a year earlier. The prior-year quarter included gains from Rowan's sale of its drilling and mining equipment unit and its land rig fleet.

Excluding items, the company earned 51 cents per share in the June quarter.

Revenue rose 57 percent to $351 million.

Analysts had expected earnings of 50 cents per share on revenue of $341.15 million, according to Thomson Reuters I/B/E/S.

Rowan shares were down 2 percent at $35.08 in early trading on Thursday on the New York Stock Exchange.

A couple walks along the rough surf during sunset at Oahu's North Shore, December 26, 2013. REUTERS/Kevin Lamarque

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