Rowan Companies 8-K Howard Weil Energy Conference

Rowan Companies, Inc.

D.F. McNease

Chairman and CEO

April 2007

Howard Weil Energy Conference

This report contains forward looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, including, without limitation, statements as to the expectations, beliefs and future expected financial performance of the Company that are based on current expectations and are subject to certain risks, trends and uncertainties that could cause actual results to differ materially from those projected by the Company.  Among the factors that could cause actual results to differ materially are the following: oil, natural gas and other commodity prices; the level of offshore expenditures by energy companies; energy demand; the general economy, including inflation; weather conditions in the Company’s principal operating areas; and environmental and other laws and regulations.  Other relevant factors have been disclosed in the Company’s filings with the U. S. Securities and Exchange Commission. 

Forward Looking Statements

Rowan Companies, Inc. Revenues

Drilling

73%

Manufacturing

27%

Drilling

71%

Manufacturing

29%

2005

2006

Total Revenue: $1.1 billion

Total Revenue: $1.5 billion

Operations and Backlog

	YTD	YTD
	12/31/06	12/31/05
	($ in millions)
External revenues	$443.3	$293.4
Margin* (% of revenues)	$98.9 (22%)	$65.7 (22%)
Operating income** (% of revenues)	$38.0 (9%)	$ 7.7  (3%)
External backlog	$530	$388
Internal volume to Rowan	$230	$118

*   Equals external revenues less direct cost of sales

** 

Equals margin less SG&A, Engineering and R&D, which are allocated among groups after the margin line but before operating income, plus gain (loss) on sale of fixed assets

Drilling Division

Currently, the offshore drilling fleet has a contracted backlog of approximately $1.9 billion

Manufacturing Division

Forestry & Mining

Mining Distribution

Forestry Distribution

Drilling Products Distribution

LeTourneau Technologies, Inc. – Worldwide Operations

Mining Products

Drilling Systems

Power Systems

Forestry Products

LeTourneau Technologies, Inc.

Steel Products

Offshore Products

LeTourneau, Inc. - Longview

OEM - Houston

LeTourneau, Inc. - Vicksburg

LEWCO - Houston

LeTourneau Technologies, Inc. Facilities

Rowan’s Worldwide Drilling Operations

U.S. Gulf of Mexico

9 Jack-ups

Trinidad         

1 Jack-up

Eastern Canada

Operations Office

North Sea

3 Jack-ups

Middle East 

8 Jack-ups

Jack-up Rigs

Land Rigs

27 Land Rigs

Rowan Companies, Inc. Average Dayrates

Offshore

Land

4th quarter 2006 average day rate: $ 144,500

4th quarter 2006 average day rate: $ 22,700

27 Land rigs currently operating in Texas, Louisiana & Oklahoma

18 of the 27 rigs are on term contracts

Current Average Well Depth: 15,400’

Rowan’s Land Fleet

•

•

•

Rowan Newbuild –

Rig 60

Projected Land Rig Additions

Source: RigData and The Land Rig Newsletter

Horsepower	Q204 - Q406 Additions	2007E Additions	Total Additions
500 to 999	178	79	257
1,000 to 1,499	123	133	256
1,500 to 1,999	83	68	151
2,000+	21	12	33
	405	292	697

What happens if we slow drilling?

1^st Year Production Decline Rates from Gas Resource Plays

Conventional
South Texas	71%
Mountain Front	60%
Unconventional
Barnett Shale	67%
Sahara	63%
Ark-La-Tex	66%
Granite	74%
Appalachia
Devonian Shale	67%
Average	67%

Source: Raymond James / Chesapeake Energy

Emerging Unconventional
Fayette Shale	55%
Deep Haley	65%
Delaware Basin	37%
Woodford Shale	66%
Deep Bossier	66%
Average	59%

Source: Raymond James / EOG Resources

First Year U.S. Gas Well Decline Rates

Rowan’s Offshore Fleet – 21 Total Jack-ups

Gorilla Class

3 Rigs

14%

300-350’

116-C

7 Rigs

33%

350’

Slot

2 Rigs

10%

250’- 300’Slot

2 Rigs

10%

TARZAN

CLASS

     3 Rigs       

           14%

Super Gorilla

Class

4 Rigs

19%

Three additional rigs are under construction / on order.

Eastern Canada

13%

Middle East

5%

North Sea

29%

U.S. Gulf of Mexico

32%

Middle East

24%

U.S. Gulf of Mexico

51%

North Sea

42%

Trinidad

2%

1^st Quarter 2007

Rowan’s Worldwide Offshore Fleet

(Net Book Value per area)

Trinidad

2%

4th Quarter 2006

The Middle East and the U.S. Gulf of Mexico are the two dominant jack-up markets that make up roughly 50% of the world fleet

Jack-up Contract Coverage

Source: Morgan Stanley / ODS-Petrodata

2007E 2008E 2009E

Offshore drillers operating internationally have longer-term contracts

90%

87%

82%

70%

72%

61%

51%

9%

61%

43%

47%

21%

57%

20%

58%

35%

51%

24%

31%

11%

9%

4%

2%

Rowan Companies, Inc. - ROI Analysis

4 year income - after taxes	$203 million
Annual ROI - after taxes	20%
4 year cash flow - after taxes	$241 million

Saudi Aramco Contract: 2 TARZAN Rigs - 4 year period

$ in Millions	Scooter Yeargain	Hank Boswell	Total
Contract value	$283.8	$283.8	$567.6
Revenue days deferred:
4th Quarter 2006	48	17	65
1st Quarter 2007 (est.)	90	90	180
Total (est.)	138	107	245
Revenues deferred:
4th Quarter 2006	$8.5	$3.1	$11.6
1st Quarter 2007 (est.)	$16.0	$16.3	$32.3
Total (est.)	$24.5	$19.4	$43.9

Total Q4 2006 revenues deferred from all relocating rigs: $48 million

Rowan Companies, Inc. Revenue Deferral

C & S

America: 88%

US GOM: 72%

Mexico: 100%

West Africa: 96%

North Sea: 100%

Middle East: 96%

SE Asia: 100%

Contracted

Not Contracted

63

31

2

35

24

1

88

4

35

0

25

15

0

Current Worldwide Jack-up Supply / Demand

Worldwide Utilization: 91%

Includes data supplied by ODS-Petrodata, Inc; Copyright 2007

0

Indian Ocean: 100%

32

0

Med / Black Sea : 100%

16

0

4-5 Rig Deficit

3-5 Rig Deficit

3-4 Rig Deficit

6-8 Rig Deficit

2-3 Rig Deficit

Argentina:

1 Rig Deficit

1 Rig Deficit

2-3 Rig Deficit

Total Rig Deficit: 22 – 30 Jack-ups

Largest Jack-up Operators Worldwide

•

NOCs have assumed a more dominant role in global jack-up demand

•

     NOCs not only are economically driven, but also politically driven – probably less cyclical

Source: ODS-Petrodata / Morgan Stanley

National Oil Companies                 International Oil Companies

Argentina:

1 Rig

US GOM

Mexico:

4 Rigs

West Africa:

2-3 Rigs

North Sea: 100%

Middle East:

20 Rigs

SE Asia

Tender Projections and Effect on Migration Forecast - 1^st Half 2007

Indian Ocean:

5 Rigs

Med / Black Sea :

2 Rigs

Outstanding Tenders

Migration INTO the region

Migration OUT of the region

Worldwide Jack-up Newbuilds

16

31

15

3

•

     Approximately 90% of the fleet is 20 years & older – attrition will continue

•

     Newbuilds jack-ups will not meet current supply deficits until mid-2008 at the earliest

65 Total Jack-ups

(56 Total Active Jack-ups)

The 300 IC and 350 IC Class jack-ups would  no longer be available in the U.S. GOM

Gulf of Mexico Jack-ups

Projected Rig Make-up

Mid Year 2008

250’ IC

8 Rigs

12%

<250’ IC

4 Rigs

6%

200’-250’ MS

17 Rigs

26%

200’-250’ MC

14 Rigs

22%

<200’ MC

15 Rigs

23%

IS

5 Rigs

8%

>350’ IC

2 Rigs

3%

Rowan Companies, Inc.

D.F. McNease

Chairman and CEO

April 2007

Howard Weil Energy Conference