- Offshore rates increased by $13,900 or 20% from a year ago.
- Land rates increased by $1,700 or 10% from a year ago.

- Drilling expenses increased by $1 million or 1%, primarily due to the startup of the Bob Keller.

- Manufacturing revenues increased by $5 million or 8% from a year ago primarily due to the higher drilling group revenue.

- SG&A expenses increased by $2 million or 12% from a year ago primarily due to incremental incentive compensation and manufacturing selling costs.

Third-Quarter Capital Expenditure and Debt

- CapEx for the year is expected to be $216 million.
- Long-term debt is 27% of total capitalization.
- Average interest rate on outstanding debt is 4.3%.

All of the company’s market rigs have been 100% utilized since January of 2004.

Rowan is currently operating 16 land rigs - 10 in Texas and 6 in Louisiana. Of the 16 rigs presently operating, 10 are on term contracts that range in day rate from $18,000 to $25,000.

- The current average day rate is $20,900 a day.
- The current average rate is up 31% from January of 2005.
- The land division''s current average well depth is 16,400 feet, the deepest in the U.S. market.

Rowan is currently expanding its fleet with eight new builds and one refurbished rig, which was Rig 30. All nine rigs will be 2000 horsepower and AC driven. All of these rigs will be completed by mid-''06.

The nine approved new builds are on multi-term contracts that range from day rates from $20,000 to $25,000 per day. The company’s offshore division, worldwide market, currently every major operating region of the world either has or is forecasting a jack-up supply deficit.

According to the management, by mid to late 2006, the worldwide jack-up supply deficit could total between 32 to 39 rigs.

New build construction would not offset the current and forecasted supply deficit levels until maybe mid 2008. Worldwide jack-up rates are being recorded at unprecedented levels:

- $200,000 in the North Sea
- $180,000 in Australia
- $140,000 in West Africa
- $170,000 in the Gulf of Mexico

These record jack-up day rate levels are a result of worldwide supply deficits, increased attrition levels due to the hurricane damage in the Gulf of Mexico and global competition for jack-ups on a long-term contract basis.

Worldwide Market Review on a Regional Basis

The Gulf of Mexico

- Current supply is 105 rigs.
- Current demand is 77 rigs.
- Current utilization is 73%.

Rowan''s worldwide fleet of both land and offshore rigs is currently contracted at 100% and according to the management it will remain contracted through the remainder of 2005 and throughout 2006.

As of November 1st, 2005, Rowan''s average day rate was $97,313 a day.