Rowan Companies PLC RDC
Q1 2010 Earnings Call Transcript

Operator: (Operator Instructions). Collin Gerry, Raymond James.

Collin Gerry - Raymond James: I guess just kick it off with what seems to be most relevant today. Matt, what’s your kind of initial stab as to what this could possibly mean for drilling going forward at the Gulf of Mexico? Recognizing it’s very early, we don’t know what happened, but just maybe just enlighten us on kind of the internal conversations you all are having in terms of what you see coming down the pipe?

W. Matt Ralls - President and CEO: Collin, I guess that we have been talking some about that. But we believe that our policies and the practices are sufficient for safe operations. We've got a long history of safe operations as does the whole industry. There have been by various (downs) somewhere around 40,000 wells drilled in the Gulf of Mexico. This is the first spill in my memory of any consequence and very unusual circumstances and a lot of uncertainties. So we are just refocusing our people on all of our policies and practices. We feel like everybody is going to be pretty well set the way they’ve handled it before. Now, I do expect that there will be additional regulatory oversight for an even additional testing procedures or something like that that could follow along. For additional accounts to that effect. But I don’t really see. Certainly, well in my opinion, certainly I expect that it will slow down if not stop them from opening up any additional areas of drilling. But for Rowan, that's not of much consequence because we believe that the areas that have been open are the areas that have the best opportunities for our high-spec jack-ups.

Collin Gerry - Raymond James: Right.

W. Matt Ralls - President and CEO: So we don’t really think that sort of opportunity extends to the Eastern Gulf anyway. So from our perspective, we are not really expecting much more. I think that primary outcome will be more regulatory attention there.

Collin Gerry - Raymond James: And I guess, do you think that maybe that involves a higher level of redundancy in safety equipment? I mean, can you see some sort of legislation coming down that requires more pressure control equipment or more redundancy on a rig? Do you think it would go something like that?

W. Matt Ralls - President and CEO: Collin, I will let David respond to that. I mean, once again, this is a very, very rare occurrence that nobody understands why the BOP won't actuate. In the next several months we will know that. Maybe there is something that will come out of that, but for right now, our practice has been completely reliable or almost completely reliable at this point.

David P. Russell - EVP, Drilling Operations: Yeah. I will say that our systems are not as complex as the deepwater rigs, but we do service well controlled systems that’s based on OEM requirements and also API specification 16-A and also API Recommended Practice 53. So I mean we are very comfortable with the condition and capability of all of our well control equipment worldwide. So like Matt had said, there may be some additional regulations and additional testing that I think won’t get changed.

Collin Gerry - Raymond James: And then unrelated follow-up from me on the LeTourneau side. I would have thought orders would maybe have been picking up a little bit more. Maybe tell us what you are seeing so far in Q2 and kind of what type of orders you are seeing? Also, if we kind of just go back to the long-term strategy here, I think, if I recall, a couple of years ago when you’re talking about LeTourneau, it was bulking it up and getting it some critical mass before spinning it out or doing something strategic with it. Is that still the kind of way we think about it? Or then maybe update us on your thoughts there?