It was a lackluster month for stocks, with the WorkBoat Composite Index gaining about 1%. The Index did top the Dow and S&P, which both rose less than 1% in April. For the month, stocks were evenly split, with 15 gainers and 15 losers.
Among the big losers in April was Rowan Companies, which lost over 8%. Despite losing ground, the company said it had a good first quarter, reporting normalized earnings of 28 cents per share compared to the consensus estimate of 21 cents per share.
Rowan’s worldwide jackup utilization is 89%, the highest it’s been since December 2008. The strong utilization of the company’s fleet has withstood the entry of 50 jackups into the worldwide market since January 2013.
The Houston-based company entered the ultradeepwater market on April 22 when the drillship Rowan Renaissance began operating for Repsol in West Africa. The vessel is capable of drilling wells to depths of 40,000' in waters up to 12,000'. Rowan’s second and third drillships scheduled for delivery later this year are contracted to Anadarko and Cobalt and will work in the Gulf of Mexico. “Despite the current uncertainties surrounding the ultradeepwater market, we remain positive due to the potential frontier opportunities and approximately 200 discoveries in greater than 4,000 feet of water made over the last five years, setting the stage for a probable development drilling cycle,” Mark A. Keller, Rowan’s executive vice president of business development, said during the company’s earnings call in May. “We believe this could generate additional demand for units ... since 40 of those discoveries were in the U.S. Gulf of Mexico.”— David Krapf