GlobalSantaFe Announces 3Q Earnings

Worldwide oil and gas drilling contractor GlobalSantaFe Corp. reported net income for the third quarter ended September 30, 2003, of $15.1 million, or $0.06 per diluted share, on revenues of $458.1 million, as compared to net income of $75.0 million, or $0.32 per diluted share, on revenues of $514.4 million for the same quarter in 2002. For the nine months ended September 30, 2003, GlobalSantaFe reported net income of $104.9 million, or $0.45 per diluted share, on revenues of $1,408.5 million, as compared to net income of $225.5 million, or $0.95 per diluted share, on revenues of $1,504.8 million for the corresponding period in 2002. The company's net income for the first nine months of 2003 included $22.3 million, or $0.09 per diluted share, from the settlement of claims filed in 1993 with the United Nations Compensation Committee for losses suffered as a result of the Iraqi invasion of Kuwait in 1990. Revenues for the third quarter of 2003 were down by $56.3 million compared to the third quarter of the previous year as a result of a $73.4 million decline in revenues from the contract drilling segment, offset by a $17.1 million increase in revenues from the drilling management services and the oil and gas segments. The decrease in contract drilling revenues was due primarily to lower dayrates and utilization for the company's North Sea and deepwater rigs, and lower utilization for its West Africa jackups and land rigs, partially offset by improved utilization and dayrates for the U.S. Gulf of Mexico jackups. The decline in net income for the third quarter of 2003 can be attributed mainly to the decline in revenues from the contract drilling segment. The contract drilling segment reported operating income of $28.8 million for the third quarter of 2003, down from $97.2 million in the corresponding quarter of 2002. For the third quarter of 2003, GlobalSantaFe's drilling management services segment reported operating income of $5.5 million on revenues of $128.8 million, compared to operating income of $7.3 million on revenues of $117.6 million in the same quarter of 2002. The lower margin for the drilling management services segment during the third quarter 2003 was primarily the result of lower margins on projects in the North Sea. "We continue to maintain strong financial discipline with a focus on lowering costs. While the worldwide jackup market appears to be strengthening, we expect to see continued softness in the mid-water depth floater markets and a marginal over supply in the deepwater markets," said GlobalSantaFe President and Chief Executive Officer, Jon Marshall.