Rowan Companies

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Rowan Companies, Inc. (NYSE: RDC), founded in 1923 and based in Houston, Texas, is an S&P 500 company which provides contract oil well drilling services and rigs, and manufactures equipment for drilling as well as for mining and timber industries. The company has a fleet of 21 offshore drilling jackup rigs and 26 land drilling rigs. In North America the company operates onshore in the United States, as well as offshore in the Gulf of Mexico and off the coast of eastern Canada, and internationally in the Middle East and the North Sea. ^[1]

Its three subsidiary companies are LeTourneau Technologies, Inc., LeTourneau Ellis Williams Company, Inc. (LEWCO) and Oilfield-Electric- Marine (OEM).

Contents 1 Drilling rigs 2 Manufacturing 3 History 3.1 LeTourneau Technologies 3.2 LeTourneau Ellis Williams 3.3 Oilfield-Electric-Marine 3.4 Rowan Companies 4 References 5 External links

[edit] Drilling rigs

Its 21 offshore jackup rigs include cantilever jackup rigs that are designated as Gorilla Class rigs, Super Gorilla Class rigs and Tarzan Class rigs as well as conventional jackup rigs.^[1]

[edit] Manufacturing

• LeTourneau Technologies, Inc. is a wholly-owned subsidiary which was formerly named LeTourneau, Inc. It was founded by R.G. LeTourneau, an inventor and academic who also founded LeTourneau University. LeTourneau Technologies performs all of the company's manufacturing operations. It operates a steel mini mill that recycles scrap steel, makes steel plate, carbon alloy steel and tool steel plate.^[1]

• The Steel Products group makes higher grades of steel, including mold steels, free machining steel, aircraft quality steels and hydrogen, crack-resistant steels.

• The Mining Products group makes heavy mining equipment such as large wheeled front-end loaders for coal, gold, copper, diamond and iron ore mines. It operates a network to distribute to the western United States and Australia.

• The Forestry Products group is based in Portland, Oregon and makes diesel-electric powered log stackers up to 55 ton capacity.

• The Drilling Systems group makes drilling mud pumps.

• The Power Systems group makes AC motors and other electrical components for the oil and gas, marine, mining and dredging industries.

Rowan Companies is located at 2800 Post Oak Boulevard, Suite 5450, in Houston, Texas. Daniel McNease is Chairman of the Board, President, and Chief Executive Officer.

[edit] History

[edit] LeTourneau Technologies

R.G. LeTourneau founded his company R.G. LeTourneau, Inc. in 1929 in California as a contractor of earthmoving equipment. LeTourneau manufactured products in Longview, Texas.^[2] During World War II, the company provided 70% of the Allies' earthmoving equipment. In 1954, it built the first jack-up drilling platform. In 1955, it made the first log-stacker machine. In 1965, the company made the first intermodal crane.^[3]

Marathon LeTourneau Company designed all of Rowan Companies' jack-up rigs, and delivered the last one to Rowan as an independent company in 1986.^[4]

In 1994, Rowan Companies acquired the assets of Marathon LeTourneau Company.^[4]

In 2004, LeTourneau formed an alliance with SourceOne Drilling Systems.^[3]

In 2006, LeTourneau changed its name to LeTourneau Technologies, Inc.^[3]

[edit] LeTourneau Ellis Williams

Ellis Williams, Jr. founded the Ellis Williams Company, of Houston, Texas. Michael R. Williams served as President. EWCO, Inc. was a sibling company which operated as Traitex Machine Co. and made drilling mud pumps.^{[2] [3]}

On January 31, 2000, Rowan's subsidiary LeTourneau acquired Ellis Williams Company, and also its sibling company EWCO, Inc., for US$9 million.^[3] After the acquisition, Ellis Williams, Jr. remained with the new subsidiary as a design consultant, and Michael R. Williams remained as Senior Vice President and General Manager.^[2] The new subsidiary company was renamed LeTourneau Ellis Williams, Inc.

[edit] Oilfield-Electric-Marine

Oilfield-Electric-Marine, Inc. had been in business in Houston, Texas since the late 1970s. It made both AC and DC motors and drive systems, electric consoles for marine drilling industries, and medium voltage switchgear.^[5]

On February 1, 2002, the Rowan Electric, Inc. subsidiary unit of Rowan Companies acquired assets of Oilfield-Electric-Marine, Inc., which operated as OEM Power Systems, and the Rowan subsidiary company also acquired Industrial Logic Systems, Inc. the same day. The deal was completed for US$8 million in Rowan common stock.^{[3] [4] [5]}

Kevin R. Williams had been President of Oilfield-Electric-Marine, Inc., and he stayed on as President of Rowan Electric, Inc., which then became the Rowan subsidiary division Oilfield-Electric-Marine.^[5]

[edit] Rowan Companies

Rowan Drilling Company, Inc. was founded in 1923 by Arch Rowan as a contract drilling business.^[6]

In 1947, the drilling company was reorganized as Rowan Companies, Inc.^[4]

In 1964, the company began paying a cash dividend to shareholders, which it continued without interruption for the next couple of decades. The company was publicly-traded on the New York Stock Exchange under the ticker symbol RDC.^[7]

The company performed well through the long secular bear market and economic malaise of the 1970s. Its primary businesses were contract drilling, and also aircraft service through its subsidiary business Era Aviation, Inc. In 1981, earnings came in at US$121 million, and the stock split two-for-one. During that prior decade the stock had risen by over 30-fold in price, from its low of the decade. By that time the stock had been added to the S&P 500 Index list of the largest publicly-traded companies in the United States.^[7]

The company continued to perform well following the early 1980s recession, however, in 1982, both the stock price and the company's earnings reached their all-time high for many years to follow. Earnings peaked at almost US$129 million that year.^[7]

In the early 1980s, Rowan began building its heavy-duty Gorilla Class jackup rigs for use in harsher offshore environments.^[4] By 1983, the company began to run into serious troubles, as earnings dropped to less than US$21 million. By 1984, earnings were down to only US$4 million, and the stock price had dropped by nearly two-thirds from its 1982 all-time high.^[7]

In 1985, earnings were flat from the prior year, and the stock price lost an additional 25% from its 1984 low. By that time, the company had accumulated US$143 million in long-term debt.^[7] Between 1985 and 1995, Rowan incurred cumulative net losses of over US$360 million.^[4]

By 1986, the company was running a loss of US$58 million, and the stock dropped by half again from its 1985 low, down cumulatively by 86% from its 1982 all-time high.^[7]

In 1987, the company lost an additional US$83 million. Adding to the problems, the company's long-term debt by then had grown to US$196 million, and the company had diluted shareholder equity by issuing an additional 30% of its common shares outstanding within the prior couple of years. The company also discontinued payment of its cash dividend that year. Despite the financial troubles, the stock performed well early that year, rising over threefold from its 1986 low. However, in the fourth quarter it fell victim to the 1987 stock market crash, and dropped by two-thirds again from that earlier 1987 peak.^[7]

In 1990 the company earned a small profit of several million dollars. But it fell victim to the 1990-1991 recession, and by 1991 it posted a loss of US$45 million.^[7]

In 1992, the loss grew to US$85 million, but by 1993 the loss had improved to only US$14 million.^[7]

In 1994, Rowan Companies acquired the assets of Marathon LeTourneau Company.^[4] The company lost US$23 million that year, and the stock still traded no higher than 60% below its 1982 all-time peak. It also lost some of its value that year resulting from the 1994 economic soft landing.^[7]

By 1995, the company's long-term debt had grown to US$249 million, and the string of losses continued, with US$19 million lost that year. However, the stock price continued to steadily rise, and reached a new intermediate-term high above its 1994 peak price. By early 1996, the stock price had more than doubled from its 1995 lows, but was still trading 45% below its 1982 all-time high.^[7]

In 2000, C. Robert Palmer was Chairman and CEO of Rowan Companies, through at least 2002.^{[2] [5]}

In 2001, Rowan began designing its Tarzan Class jackup rigs, and delivered the first one in 2004.^[4]

In 2002, Rowan's revenue dropped by 19%, and the company lost $26.1 million.^[4]

In 2003, Rowan reached its peak number of employees up to that time, and also for the following years after, at 5,395. That year, the company lost US$3.9 million.^[4]

In 2004, Rowan sold its aviation subsidiary business Era Aviation, Inc. for $118.1 million in cash. The subsidiary chartered helicopter and fixed-wing aviation services. In 2004, Rowan Companies lost US$1.3 million.^[4]

[edit] References

[edit] External links

• Rowan Companies, Inc.
• Rowan Gorilla VII at Keppel Verolme, Netherlands