Original Source: FD (FAIR DISCLOSURE) WIRE
OPERATOR: Ladies and Gentlemen, you are currently on hold for today 's Rowan drilling Conference Call. We are currently admitting additional participants and should be under way shortly. We thank you for your patience and ask that you please continue to stand by. Good day, everyone and welcome to the Rowan Companies Incorporated Third Quarter 2007 earnings results Conference Call. Today's call is being recorded.
At this time for opening remarks and introductions, I'd like to turn the call over to Mr. Bill Provine. Please go ahead, sir.
BILL PROVINE, VP, ROWAN COMPANIES, INC.: Thank you Angelina, and good morning, everyone. Thanks for tuning into Rowan's Third Quarter 2007 Earnings Conference Call. With me this morning is Danny McNease, our Chairman and CEO, and Bill Wells, the Chief Financial Officer.
The duration of this call will be 60 minutes. And I would like to remind you that this call may contain forward-looking statements, within the meaning of the Private Securities Litigation Reform Act of 1995, including, without limitations, statements as to the expectations, belief, and future financial performance of the Company that were based on current expectations and are subject to certain risks, trends and uncertainties that could cause the results to differ materially from those projected by the Company. Now it's my pleasure to turn the call over to Danny McNease for his introductory statements.
DANNY MCNEASE, CEO, ROWAN COMPANIES, INC.: Thank you, Bill. It's 40 years since Rowan completed its IPO. During that time, Rowan has distinguished itself of the quality of our crews, the ability to provide high spec equipment and operations of our negotiating expertise, and our management of the drilling business cycle. Today, I'm going to tell you where I intend to take Rowan in the future. I do so against a full analysis we have undertaken of the direction in which the global drilling business is heading.
Our strategic plan focuses on maximizing shareholder value and those markets where we see consistent growth. Undoubtedly the Middle East is a key to the future of our drilling division. Right now the U.S. Gulf of Mexico and the Middle East dominate with more than half of the world's jackup fleet. Today, we have eight jackups in the Middle East market, and by 2011 we expect between 15 and 17 rigs. Demand in Saudi Arabia, Kuwait, Qatar, Bahrain, UAE and Iran, continues to set the pace for global demand of jackups.
Take Saudi Aramco as a case in point. Saudi Aramco's management is continuing to work to meet the Saudi government mandate of accelerating production levels from 9 .4 million barrels per day to 13.5 billion barrels per day by 2012. For that it is projected to take approximately 130 to 150 rigs, both land and offshore to achieve this goal.
In Qatar, LNG demand will continue to attract high spec jackups into the region and in Bahrain, the government is looking at their concessions offshore also. This picture is the same throughout the Middle East and our rigs are a better fit than our competition.
The national oil companies in the Middle East and around the world have long term strategic plans that require high spec jackup rigs & partners to have the operating ability, engineering expertise, asset base, and ability to grow to meet their future needs. We are very well positioned as partners with the NOC's, as our relationship with Aramco demonstrates.
We are aggressively expanding our jackup fleet to enhance our position as the leading high spec driller. Today, we have announced that we have entered into a contract with Keppel AmFELS, for the construction of four Super 116E class jackups with a hook load and horsepower to drill beyond 30,000 feet. Additionally, we will build two additional 240C class jackups at our Vicksburg yard.
Our plan includes doubling the size of our fleet over the next 10 years due to the high return on investment that these rigs will provide. As we have exhibited over the past several years, we can achieve higher dayrates for this equipment because of its high spec quality which, to our mind, makes it a strong investment case. As a result, we have an ambitious plan for new builds.
During the next 10 years we anticipate that internally, we will build one jackup per year at our Vicksburg ship yard, so while we now have eight of the 39 high spec rigs in the world, with the addition of nine new builds, we will own 17 out of the 48 high spec rigs globally by 2011, and these rigs will have the capacity to drill to depths of up to 35,000 feet, and water depths of up to 550 feet. After six trips to the Middle East this year and refocusing our operational capability to service our customers in the Middle East, we see tremendous opportunities for growth. We're reaching out to these markets to lessen our dependence on the Gulf of Mexico.
Of course, we will continue to look actively at opportunities around the world and in the emerging markets of Brazil, India, West Africa, the Mid, the Far East, and we still see a strong future for Rowan rigs in the North Sea. These markets will require additional jackup new builds and the high spec niche market, and we believe these markets will quickly put projected new builds to work.
So, what are the characteristics that give Rowan a competitive advantage in this market? Our higher spec rigs provide us with a higher return while meeting the increasing demands of our customers. As witnessed in the devastating hurricanes of a couple of years ago, we need equipment that can literally weather the storms. In addition, the jackup fleet is aging, and combined with new demand in new markets, there will be the need for additional new builds. We believe our new rigs will be ideal to meet that demand.
We are unique in the market in our ability to become a market leading vertically integrated partner to our customers. Our ownership of LeTourneau allows us to be just that. Through the flexibility and design we need to meet our customer's requirements, while maximizing our return on investment. LCI is a perfect fit for our drilling business, by supporting our growth plans we can also become the clear number two in the oil field drilling equipment market.
The integration of LTI to our drilling business is extremely synergistic as it helps us to maintain our long term leadership as a high capacity driller while expanding our fleet with reduced risk. We gain a clear advantage in controlling the development of prototype rigs and drilling equipment for internal projects, and we can use this knowledge for our external customers as well.
As far as building the external part of the LTI business, we will continue to sell jackup kits to shipyards worldwide and we will pursue opportunities to add new equipment product lines. We must invest in a manufacturing ability, a manufacturing operations that support our drilling operations and increase possibility in these areas. This segment of our business has great long term potential and is essential in our maintenance of our efficient effective rig fleet.
The LTI team knows this equipment and can repair and replace it faster than anyone else, which gives …