To All:Worldwide Offshore Rig Market Improves
U.S. Gulf of Mexico Recovery Impressive
HOUSTON, December 20, 1999 -- Houston-based offshore drilling contractor Global Marine (NYSE:GLM) today reported that the company's worldwide SCORE, or Summary of Current Offshore Rig Economics, for November 1999 increased 3.3 percent from the previous month. The U.S. Gulf of Mexico SCORE was up 6.2 percent over October 1999, the fifth consecutive month of improvement.
Global Marine Chairman, President and CEO Bob Rose said, ?The U.S. Gulf of Mexico rig market continues continues to strengthen at an impressive rate. With more than 36 percent of the world's offshore rig demand, the recovery of the U.S. Gulf of Mexico market is extremely positive for the industry. The West Africa market, which had experienced an increase in bid requests this past spring, has seen a number of contract awards recently at attractive dayrates. The North Sea and Southeast Asia markets continue to be lackluster with little evidence of near-term improvement.?
Rose provided several examples of current spot market dayrates for jackup rigs under competitive conditions: Location Rig Type Dayrate Range
($ in thousands)
U.S. Gulf of Mexico 250' Mat Slots
250' Independent Leg Cantilever (ILC)
350' ILC $17 - $20
$24 - $27
$40 - $45
West Africa 300' ILC $30 - $40
North Sea 300' ILC
Heavy Weather ILC $30 - $40
$35 - $45
Global Marine's SCORE compares the profitability of current mobile offshore drilling rig rates to the profitability of rates at the 1980-81 peak of the offshore drilling cycle, when speculative new rig construction was common. In the 1980-1981 period, when Global Marine's SCORE averaged 100 percent, new-contract dayrates equaled the sum of daily cash operating costs plus approximately $700 per day per million dollars invested. A separate SCORE is calculated for various types of rigs and regions to indicate the relative condition of rig markets. The regions included in the release, which is made available for publication on the third Monday of each month, are the U.S. Gulf of Mexico, the North Sea, West Africa, and Southeast Asia. Rig types include jackup and semisubmersible rigs.
WORLDWIDE
The November worldwide SCORE for all types of offshore drilling rigs increased 3.3 percent to 24.0 percent from 23.2 percent in October. The November 1999 SCORE is a 57.1 percent decrease from November 1998 and a 33.6 percent decrease from the same period five years ago.
GULF OF MEXICO
Global Marine's November SCORE for the U.S. Gulf of Mexico increased 6.2 percent to 25.0 percent from October's 23.6 percent. The November 1999 SCORE is a 38.5 percent decrease from November 1998 and a 28.8 percent decrease from five years ago.
THE NORTH SEA
The North Sea SCORE decreased 1.8 percent to 19.8 percent in November 1999. The region's SCORE is down 70.6 percent for the one-year period and down 42.7 percent for the five-year period.
WEST AFRICA
West Africa's November SCORE increased 0.7 percent to 30.5 percent in November 1999. This region's SCORE has seen a 48.1 percent decline from November of last year, and a 20.7 percent decrease from five years ago.
SOUTHEAST ASIA
Southeast Asia's November 1999 SCORE of 27.7 percent is a 0.4 percent increase from the prior month, a 50.7 percent decrease from November 1998, and a 32.1 percent decrease from five years ago.
JACKUPS
With a 9.0 percent increase from October 1999, the 25.2 percent November SCORE for jackups has decreased 51.7 percent from a year ago and 34.3 percent from five years ago.
SEMISUBMERSIBLES
The November SCORE of 22.6 percent for semisubmersibles is a 2.9 percent decrease from October 1999. The SCORE for semisubmersibles has decreased 62.1 percent from one year ago and 28.7 percent over the last five years.
Houston-based Global Marine is one of the largest offshore drilling contractors with an active fleet of 31 mobile rigs worldwide plus two new drillships under construction. In addition, the company is the world's largest provider of offshore drilling management services, employing approximately 8 to 12 additional rigs.
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See Summary Chart Below
Forward-Looking Statements
Under the Private Securities Litigation Reform Act of 1995, companies are provided a "safe harbor" for discussing their expectations regarding future performance. We believe it is in the best interests of our stockholders and the investment community to use these provisions and provide such forward-looking information. We do so in this news release and in other communications. Our forward-looking statements include things such as our view that the U.S. Gulf of Mexico rig market continues to strengthen at an impressive rate, that the recovery of the U.S. Gulf of Mexico market is extremely positive for the industry, and that the North Sea and Southeast Asia rig markets show little evidence of near-term improvement.
Our forward-looking statements speak only as of the date of this release and are based on available industry, financial and economic data and our operating plans as of that date. They are also inherently uncertain, and investors must recognize that events could turn out to be materially different from what we expect.
Factors that could cause or contribute to such differences include but are not limited to changes in oil and gas prices and in worldwide economic trends that affect markets for oil and gas and for offshore drilling rigs and the relative performance of such markets, changes in political or economic conditions that affect the policies of and relationships among major oil producers, changes by our customers in their oil and gas exploration, development and production plans and budgets, and other risk factors as may be discussed in our latest annual report on Form 10-K and subsequent reports filed with the U.S. Securities and Exchange Commission.
We disclaim any obligation or undertaking to disseminate any updates or revisions to our statements, forward-looking or otherwise, to reflect changes in our expectations or any change in events, conditions or circumstances on which any such statements are based.
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Global Marine SCORE
Summary of Current Offshore Rig Economics
November 1999
Current Month Previous Month % Change on Month % Change on Year % Change on Five Years
By Region
Gulf of Mexico 25.02 23.57 +6.2 -38.5 -28.8
North Sea 19.78 20.15 -1.8 -70.6 -42.7
West Africa 30.51 30.32 +0.7 -48.1 -20.7
Southeast Asia 27.66 27.55 +0.4 -50.7 -32.1
Worldwide 24.01 23.24 +3.3 -57.1 -33.6
By Type
Jackups 25.23 23.15 +9.0 -51.7 -34.3
Semisubmersibles 22.58 23.26 -2.9 -62.1 -28.7
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