GlobalSantaFe Reports 2Q Results

GlobalSantaFe Corporation reported net income for the quarter ended June 30, 2003, of $43.9 million, or $0.19 per diluted share, on revenues of $497.4 million, as compared to net income of $73.4 million, or $0.31 per diluted share, on revenues of $501.7 million for the same quarter in 2002. For the six months ended June 30, 2003, GlobalSantaFe reported net income of $89.8 million, or $0.38 per diluted share, on revenues of $950.4 million, as compared to net income of $150.5 million, or $0.63 per diluted share, on revenues of $990.4 million for the corresponding period in 2002. The company's first half 2003 net income included $22.3 million, or $0.09 per diluted share, from the settlement of claims filed in 1993 with the United Nations Compensation Commission for losses suffered as a result of the Iraqi invasion of Kuwait in 1990. Excluding the benefit of these settlements, the company's net income would have been $67.5 million, or $0.29 per diluted share. Revenues for the second quarter of 2003 were down $4.3 million compared to the second quarter of the previous year as a result of a $49.7 million decline in revenues from the contract drilling segment, offset by a $45.4 million increase in revenues from the drilling management services and the oil and gas segments. The decline in net income for the second quarter of 2003 was due primarily to lower operating income in the contract drilling segment. The contract drilling segment reported operating income of $60.2 million for the second quarter of 2003, down from $97.9 million in the second quarter of 2002, due to lower dayrates and utilization for the company's land and marine rig fleets partly offset by lower operating expenses. During the second quarter of 2003, marine fleet utilization averaged 88 percent, marginally down from 89 percent in the prior year second quarter. The average daily revenue for the marine fleet during the second quarter of 2003 was $69,400 compared to $77,000 for the corresponding period of the previous year. The decline in average daily revenue was primarily attributable to weaker North Sea semisubmersible and HDHE jackup markets and a substantial decline in daily revenues for the company's semisubmersible rigs in the U.S. Gulf of Mexico. The company's land fleet utilization declined to 52 percent during the second quarter of 2003, compared to an average utilization of 69 percent for the corresponding period of 2002, as a result of a temporary suspension of all operations in Kuwait during March and April 2003 and two additional idle rigs in Venezuela that were active in the prior year. The average daily revenue for the land fleet during the second quarter of 2003 was $17,400 compared to $17,700 for the second quarter of 2002. "Notwithstanding the continued softness in certain of our key markets, we are generally pleased with the results for the second quarter of 2003, which were better than we anticipated going into the quarter, due primarily to increased revenues and lower operating costs," said GlobalSantaFe President and Chief Executive Officer Jon Marshall.