Rowan Companies plc ("Rowan" or the "Company") (NYSE: RDC) announced today that its monthly report of drilling rig status and contract information has been updated as of January 21, 2014. The report titled "Monthly Fleet Status Report" can be found on the Company's website at www.rowancompanies.com.
Notable events in the current report include:
Gorilla VI: Increased 1Q 2014 off rate time by 31 days to 90 days for repairs, upgrades, customer required modifications and inspections. Rig is currently expected to return to service the beginning of April 2014. The expected off rate time may be extended further due to customer required equipment modifications currently under negotiations. The Company may be compensated for the additional off rate time. However, the recognition of any such compensation received will be deferred and recognized over the period of drilling operations.
Gorilla VII: Added 23 days off rate time during 1Q 2014. The rig had been undergoing leg repairs which were substantially completed several weeks ago. Continuing inclement weather in the North Sea since then has delayed the rig being able to go on location. Current expectations are that the rig will return to service late January 2014. Incremental third party repair costs were expensed and totaled approximately $3.0 million in 4Q 2013, above prior guidance of $2.5 million.
For the full year 2014, the Company continues to expect jack-up out of service time to be between approximately 7% and 9% of available rig days. The Company does not currently expect any out of service days in 2014 for the drillships, and is expecting operational downtime to be approximately 5% after about a one-year break-in period when operational downtime could be somewhat higher.
Out-of-service days include days for which no revenues are recognized other than operational downtime and cold-stacked days. The Company may be compensated for certain out-of-service days, such as for shipyard stays or for transit periods preceding a contract. However, recognition of any such compensation received is deferred and recognized over the period of drilling operations. Operational downtime is when a rig is under contract and unable to conduct planned operations due to equipment breakdowns or procedural failures. No operational downtime is included in projected out-of-service days, but the company estimates operational downtime to account for approximately 2.5% of in-service days in current and future quarters.
This summary is provided as a courtesy and is not intended to replace a detailed review of the Monthly Fleet Status Report. While the Company has attempted to include items it believes are significant, we encourage you to review the Monthly Fleet Status Report in detail.