Current industry day rates in the Gulf of Mexico:

- 350-foot cantilevers –from $80,000 to $170,000 a day.
- 350-foot independent cantilevers are from $69,000 to $130,000 a day.
- 300-foot independent cantilevers are $58,000 to $130,000 a day.
- 350 independent slots - $70,000 to $105,000 a day.
- 250 independent cantilevers - $56,000 to $122,000 a day.
- 250 independent slots are $55,000 to $95,000 a day.

Approximately 165 structures have either been damaged or lost due to Hurricane Katrina and Rita Impacts

Eight jack-up rigs are anticipated to be total losses while additional eight jack-ups are scheduled to be in shipyard for repairs for no less than 6 months. Total damage assessments, including repair time and costs, could take several months to a few years to fully evaluate.

According to the Minerals Management Service, as of October 17, 67% of oil production and 56% of gas production is shut-in as a result of these hurricanes.

The U.S. Gulf of Mexico active fleet is now reduced to 76 rigs and is currently contracted at 100% utilization. The fleet is forecast to remain contracted through 2005-2006. As a result of the damage or losses to their respective jack-up fleet U.S. contractors have raised their rates in order to offset lost revenues.

Energy prices forecasts for the remainder of 2005 and 2006 are positive.

E&P spending forecast for 2006 in the Gulf of Mexico are projected to increase by 15% to 20% as the result of record earnings.

Other Drilling Contracts

- Rowan has recently contracted three 116-Cs in $130,000 a day for both Apache and Pioneer in the Gulf of Mexico.

- The Bob Palmer is currently drilling Marathon Oil Company''s South Pass 87 well, which is a $24,000-foot well.

- Rowan has extended the contract with Marathon and will move the rig to West Cameron 265 for additional 80 to 90-day well.

- Rowan recently contracted the Gorilla IV at $170,000 a day to El Paso production for three deep-shelf wells.

El Paso is also contracted to Bob Keller for 1-year contract at $165,000 a day for the first 6 months and 170,000 a day for the remaining 6 months plus a 1-year option at $170,000 a day.

Looking ahead into Q4, the company’s current offshore day rates are on an average 17% higher than pre-Katrina levels.

- The company’s class 52 rigs day rates are up 27% from a year ago.
- Class 84 rigs day rates are up 34% from a year ago.
- Class 116 rigs day rates are up 22%
- Gorilla class day rate is up 5%
- Tarzan class day rate is up 13%

By mid-December, the company expects its daily offshore revenues to be more than 10% higher than the pre-storm level as the company will increase aggregate day rates by more than $500,000 or about one-third within 4 months.

The company expects that its overall rig utilization percentage during the fourth quarter will remain in the upper 90s. Mobilization and outfitting activities for the four rig-Saudi Aramco contract should commence in December with related revenues to be deferred from fourth quarter and recognized over the contract period.

The company expects that the overall fourth quarter drilling revenues and expenses will be relatively unchanged from the current quarter amounts. Manufacturing revenues and expenses should be relatively unchanged from the third quarter amount based upon expected fourth quarter shipments.

Key questions from the third-quarter earnings call conducted by Rowan Companies, Inc. on November 1st, 2005.