Rowan to restart rig construction; boosts '09 capex
* To restart construction of 240C class jack up rig
* Lowers 2010 capex view to between $300-$325 mln
* Rig construction to increase 2009 capex to $550 mln
* Rig delivery expected in Q3 of 2011
* To fund capex needs through available cash/cash flows
June 26 (Reuters) - Rowan Cos Inc (RDC.N) said on Thursday it will restart construction of its third jack up rig, boosting its 2009 capital expenditures by $20 million to $25 million.
The contract drilling services provider said it had halted construction earlier due to concerns over the credit market crunch and the downturn in jack up drilling markets.
Houston-based Rowan expects the rig to be delivered in the third quarter of 2011.
Citing the improvements in the credit markets and a more confident liquidity outlook through 2010, Chief Executive Matt Ralls said the "Joe Douglas" rig was expected to generate an attractive return on capital based on its estimated cost of $150 million.
The company, which now expects 2009 capex of $550 million, forecast a lower 2010 capex view of between $300 million and $325 million.
Rowan expects to fund these capital expenditures through available cash and operating cash flows. It also has $155 million of credit available under its undrawn credit facility and could consider other financing options if the need arises. Shares of the company closed at $19.33 Thursday on the New York Stock Exchange.
For the alerts, double-click [ID:nWNAB2384] (Reporting by Shradhha Sharma in Bangalore; Editing by Anil D'Silva)
