Rowan Companies 8K/A , Inc. Investor Presentation | SEC 30 Jan 08

Rowan Companies, Inc.
Investor Presentation

Forward Looking Statement

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.

Rowan Companies, Inc. is a major provider of international and domestic
offshore and land contract drilling services. The Company also owns and
operates a manufacturing division that produces equipment for the drilling,
mining and timber industries.

• NYSE: RDC

• Market Cap: $4.4 billion

• Headquarters: Houston, Texas

• Employees: ~ 5,000

Corporate Overview

2005

2007 Est.

2006

Offshore 63%

Revenue Breakdown

Offshore 60%

Offshore 57%

Manufacturing

27%

Land 10%

Manufacturing
29%

Land 11%

Manufacturing
32%

Land 11%

Rowan begins jack-up rig
drilling & enhancements to
its fleet

Rowan buys first
diesel electric rig

Rowan Drilling
Company founded by
brothers Charlie &
Arch Rowan

Rowan completes
initial public offering
on the American
Stock Exchange

LTI delivers
Rowan’s first
Super Gorilla
class jack-up rig

Rowan acquires synergistic
manufacturing subsidiary, LTI

1984

Rowan & LTI invent the
first cantilever jack-up
drilling rig, the Rowan Fort
Worth

Rowan’s first
crew sent to drill
in Alaska

Rowan brings in Simmons
No. 1, starting an oil boom
in Wortham, TX

2004

LTI delivers
Rowan’s first
Tarzan Class rig

1998

1994

1978

1976

1970

1967

1957

1954

Rowan
undertakes first
platform-mounted
drilling job in
deep water

1935

1924

1923

History of Industry Firsts

Rowan listed on the
New York Stock
Exchange

LTI delivers the first
harsh environment
jack-up, the Rowan
Gorilla

2006

2007

Rowan moves 4
jack-ups to the
Middle East

Rowan
announces
construction of 6
new jack-ups

Land Drilling

Manufacturing

Continue growth of LTI

• Become clear #2 in oilfield drilling equipment
market

Support offshore and land drilling divisions

• State-of-the-art rig designs

• Reduced newbuild rig costs

• Superior maintenance and service

Offshore Drilling

Aggressive jack-up fleet growth

• Become the leading high spec offshore
driller

• Double fleet in 10 years

Assess strategic opportunities in
deep-water market

• Rig or company acquisition

Strategic Plan

Grow land drilling fleet

• Become the leading high spec land
driller

• Expand fleet to 50 rigs in 10 years

Support offshore drilling division

• Develop crews for the Offshore Drilling
Division

• Validate prototype equipment for
offshore fleet

Mission

To increase long term shareholder value by being the world’s most capable provider of high specification contract drilling
services and oilfield drilling equipment

Reduce income tax cost

Business Unit Synergy

Newbuild speed, flexibility and cost benefit

Offshore
Drilling

Manufacturing

Land Drilling

• State-of-the-art rig fleet

– The highest specification jack-up fleet worldwide

– New build jack-ups have high return on investment

• International expansion

– Rowan now generates over 50% of drilling revenue from foreign operations

• Growing, synergistic manufacturing business

– Rig designs and service maintain long-term differentiation as high capability driller

– Able to expand rig fleet with reduced risk

– New rig designs will exploit niche markets and weather industry downturns

• Operational excellence

– Experienced leadership team and highly-skilled operating crews

• Loyal customer base

– Rated #1 overall in Total Customer Satisfaction*

*According to the 2006 Energy Point Research Drilling and Wellsite Contractors survey

Competitive Advantages

Average Land Day Rates

Average Jack-Up Day Rates

Rowan’s High Spec Rig Fleet

•29 high spec land rigs currently operating in Texas,
Louisiana, Oklahoma and Alaska

•19 of the 29 rigs are on term contracts,

•3Q 2007 average day rate: $ 23,300

•3Q land rig utilization was 96%

•Average Well Depth: 16,615’

Land

Offshore

• 2007: Own 8 of 12 high spec jack-up rigs (2 million lb.
hook load) in the world

2011: Will own 17 of 36 high spec rigs

• 21 jack-up rigs working in the GOM, the Middle East, North
Sea and Trinidad

– 17 premium cantilever jack-up rigs featuring 3 harsh
environment Gorilla class rigs, 4 enhanced Super Gorilla class
rigs and 3 Tarzan class rigs

– 4 conventional jack-up rigs, including 3 rigs with skid base
capability

• Have capability of drilling to depths of up to 35,000 feet in
up to 550 feet of water

• 3Q 2007 average day rate: $158,200 with offshore rig
utilization of 99%

$138,125

$98,872

$76,430

$75,259

Superior Dayrates and Utilization

Average Dayrate - Current

Average Dayrate - 2004-2007*

U.S. Gulf of Mexico

$152,500

$131,893

$109,781

$84,644

Middle East

220,000

$178,879

$170,302

$110,218

North Sea

% Utilization

* Middle East statistics are for 2006-2007

Why Build Additional High Spec Jack-Ups?

• Meet customer demand

• Deep gas, extended reach, niche market jack-ups
earn higher dayrates and have higher utilization

• Expand presence in the Middle East and North Sea,
and enter additional international markets

• Invest for long-term growth at high rates of return

• Increase shareholder value

High Spec Jack-Ups Will Be Required To Meet
The Operational Challenges Of The Future

Maersk- Al Shaheen Project Qatar

Rowan Paris II6-C- 24,300 ft.

Multilateral

High Spec Jack-Ups Will Be Required To Meet
The Operational Challenges Of The Future

Maersk- Tyra Platform
Offshore Denmark

Gorilla VII- 28,400 ft.

High Spec Jack-Up as Attractive as Floater Market

Current Fleet

New Builds

Major Markets

Pretax ROI
(New Build)

High Spec Jack-up

GOM, Brazil, ME,
W. Africa, North Sea

25%

High Spec Floater*

GOM, Brazil, ME,
W. Africa, North Sea

18%

Only 12 of the 407 jack-ups in the current worldwide fleet are high spec.
Rowan owns eight of these and is building nine more.

Includes data supplied by ODS-Petrodata

* High spec floaters are defined as 7800’ water depth or greater

Contracted (368)

Not Contracted (42)

Worldwide Utilization: 90%

Forecasted Supply Deficit: 35 - 46 jack-ups

Mediterranean: 100%

C & S America: 88%

US GOM: 63%

Mexico: 100%

West Africa: 100%

North Sea: 100%

Middle East: 94%

SE Asia: 100%

Indian Ocean: 100%

Australia: 100%

Eastern Canada

410 Total jack-ups

Current Worldwide Jack-up Supply / Demand

12-14 rig deficit

1 rig deficit

3-4 rig deficit

2 rig deficit

2-4 rig deficit

4-7 rig deficit

7-9 rig deficit

2-3 rig deficit

2 rig deficit

Migration INTO the region

Migration OUT of the region

Projected Demand 2007 - 2011: 77- 81 rigs

Medium Term Jack-up Deficit of 80 Rigs

Eastern
Canada:
1 jack-up

US GOM

Mexico:
10-14 jack-ups

Trinidad:
1 jack-ups

Brazil:
2 jack-ups

Argentina:
1 jack-up

North Sea:
2 jack-ups

Med / Black Sea :

2 jack-ups

West Africa:
12 jack-ups

Indian Ocean:

3 Rigs

SE Asia:
Newbuild exit region

Australia:
2 jack-ups

ODS Petrodata

Sources: ODS-Petrodata, and Pareto Securities

Approximately 90 percent of the current fleet is over 20 years old, and 45 percent is
over 30 years old. Attrition will continue, and the market will demand approximately 80
additional jack-ups (net of attrition) over the next four years.

Jack-up Newbuilds Less Than Demand

Contracted Newbuild Jack-ups

Average Jack-up Fleet Age, by Company

• Strong relationships with jack-up operators world-wide

– 28 operators employ 70% of global jack-up fleet

• Not dependent on Gulf of Mexico

– Deep gas could revive U.S. GOM Shelf in 2008, 2009

– Additional high-spec jack-ups could re-enter GOM if Deep Gas proves successful

• Strength in the Middle East

– Only company to mobilize 6 rigs without penalty, driven by operational excellence.

– Strong demand in the Middle East will continue to drive the global jack-up market

• Demand in the North Sea will continue to attract high spec jack-ups

• Continued diversification of jack-up fleet to international markets

- Middle East, West Africa, Mediterranean, North Sea, South America

Rowan’s International Focus

2nd Quarter 2007

(Net Book Value Per Area)

4th Quarter 2006

The Middle East and the U.S. Gulf of Mexico are the
two dominant jack-up markets, together demanding
50 percent of the world fleet

U.S. Gulf of Mexico
33%

Middle East
26%

North Sea
39%

Trinidad
2%

International Expansion Continues

U.S. Gulf of Mexico
51%

North Sea
29%

Eastern Canada
13%

Middle East
5%

Rowan’s Offshore Fleet 2011 - 30 Total Jack-ups

Gorilla Class
3 Rigs
10%

300-350’ 116-C
7 Rigs
23%

350’ Slot
2 Rigs
7%

250’- 300’Slot
2 Rigs
7%

TARZAN Class
4 Rigs
13%

Super Gorilla Class
4 Rigs
13%

240-C
4 Rigs
13%

375’116-C
4 Rigs
13%

2005: 20 jack-ups
2007: 21 jack-ups
2011: 30 jack-ups

Total Fleet

Fleet Location - Present and Future

West Africa
2011 - 2-3 jack-ups

Middle East
2007 - 8 Jack-ups
2011 - 15-17 jack-ups

Mediterranean
2011 - 3 jack-ups

North Sea
2005 - 2 Jack-ups
2007 - 3 Jack-ups
2011 - 4-5 jack-ups

Eastern Canada
2005 - 1 jack-up

U.S. Gulf of Mexico
2005 - 17 Jack-ups
2007 - 9 Jack-ups
2011 - 3-4 Jack-ups

Mexico
2011 - 2 jack-ups

Trinidad
2007 - 1 Jack-up
2011 - 2 Jack-ups

Mining Products

Drilling Systems

Power Systems

Forestry Products

Steel Products

Offshore Products

LeTourneau Technologies, Inc.

Land Products

Forestry & Mining

Mining Distribution

Forestry Distribution

Drilling Products Distribution

LeTourneau Technologies, Inc. - Worldwide Operations

Consolidated Revenue
(In Millions)

Financial Performance
Nine Months Ended September 30

Consolidated EBITDA
(In Millions)

State-of-the-art
Equipment

Experienced and
loyal workforce

International
Expansion &
Diversification

Loyal Customer
Base

Synergistic
Manufacturing
Business

Strong Financial
Performance &
Balance Sheet

Operational
Excellence

Attractive Valuation

Investment Highlights

• Rowan Companies, Inc. (the "Company") and its directors and executive officers may be
deemed to be participants in the solicitation of proxies from stockholders in connection with the
Company's 2008 Annual Meeting of Stockholders (the "Annual Meeting"). The Company plans to
file a proxy statement with the Securities and Exchange Commission (the "SEC") in connection
with the solicitation of proxies for the Annual Meeting (the "2008 Proxy Statement"). Information
regarding the names of the Company's directors and executive officers and their respective
interests in the Company by security holdings or otherwise is set forth in the Company's proxy
statement relating to the 2007 annual meeting of stockholders, which may be obtained free of
charge at the SEC's website at http://www.sec.gov and the Company's website at
http://www.rowancompanies.com. Additional information regarding the interests of such potential
participants will be included in the 2008 Proxy Statement and other relevant documents to be
filed with the SEC in connection with the Annual Meeting.

• Promptly after filing its definitive 2008 Proxy Statement for the Annual Meeting with the SEC, the
Company will mail the definitive 2008 Proxy Statement and a proxy card to each stockholder
entitled to vote at the Annual Meeting. WE URGE INVESTORS TO READ THE 2008 PROXY
STATEMENT (INCLUDING ANY SUPPLEMENTS THERETO) AND ANY OTHER RELEVANT
DOCUMENTS THAT THE COMPANY WILL FILE WITH THE SEC WHEN THEY BECOME
AVAILABLE BECAUSE THEY WILL CONTAIN IMPORTANT INFORMATION. Stockholders will
be able to obtain, free of charge, copies of the 2008 Proxy Statement and any other documents
filed by the Company with the SEC in connection with the Annual Meeting at the SEC's website
at http://www.sec.gov, at the Company's website at http://www.rowancompanies.com or by
contacting Melanie M. Trent, Secretary, Rowan Companies, Inc., 2800 Post Oak Boulevard,
Suite 5450, Houston, Texas 77056-6189.

Rowan Companies Inactive 8-K/ARowan Companies, Inc. Investor Presentation