Rowan Companies plc (RDC - Free Report) announced its monthly drilling rig status. In the reported period, the Gorilla VI rig increased the first quarter 2014 off rate time by 31 days to 90 days for repairs, upgrades, customer required modifications and inspections. The rig is expected to return to service in early Apr 2014.
Similarly, its Gorilla VII rig added 23 days off rate time for the first quarter. The rig had been undergoing leg repairs. However, continuing inclement weather in the North Sea has delayed the rig from going on location. The company expects the rig to return to service in late Jan 2014.
For full-year 2014, Rowan expects jackup out of service time between 7% and 9% of available rig days. The company does not currently expect any out of service days in 2014 for the drillships. Rowan also expects operational downtime of approximately 5%.
Rowan’s premium high-specification rig fleet enjoys greater utilization than most other shallow-water fleet. The growing demand in the global jackup market signifies the ever-increasing tendering activity that has raised the dayrates. Rowan is positioned advantageously with its several contract rollovers in 2014. The contracts on these rollovers will further help the company in reducing rig downtime days and provide impetus for increased operations.
Houston, Texas-based Rowan Companies is a provider of international and domestic contract drilling and aviation services. During the quarter, the company experienced strong demand as well as solid dayrates for high-specification jackups in most of the markets.
Going forward, Rowan expects further strengthening in the jackup markets, especially demand for high-spec rigs, along with strong demand and encouraging new fixtures in the ultra-deepwater markets. To capitalize on this, the company is focused on improving the operation of newbuild drillships. Rowan expects growing demand and the resultant higher jackup dayrates to lead to strong earnings growth.
Rowan currently holds a Zacks Rank #3 (Hold), implying that it will perform in line with the broader U.S. equity market over the next one to three months.
Meanwhile, one can consider better-ranked energy players like Seadrill Partners LLC (SDLP - Free Report) , Helmerich & Payne, Inc. (HP - Free Report) and Ocean Rig UDW Inc. . Seadrill Partners sports a Zacks Rank #1 (Strong Buy), whereas Helmerich & Payne and Ocean Rig hold a Zacks Rank #2 (Buy).