85408--3/16/2006--ROWAN_COMPANIES_INC

related topics
{cost, contract, operation}
{gas, price, oil}
{cost, regulation, environmental}
{operation, natural, condition}
{personnel, key, retain}
{competitive, industry, competition}
{control, financial, internal}
We have incurred losses recently and over prolonged periods in the past, a circumstance that could occur again in the future. Our markets are highly competitive, which may make it difficult for us to maintain satisfactory price levels. The drilling history has historically been cyclical, and periods of low demand could have an adverse effect on our operating results. Most of our drilling contracts are fixed day rate contracts, and increases in our operating costs could have an adverse effect on the profitability of those contracts. Our fleet expansion program may encounter liquidity problems. Rig upgrade, enhancement and new construction projects are subject to risks which could cause delays or cost overruns and adversely affect our financial condition and results of operations. Our Super Gorilla and Tarzan Class offshore jack-up drilling rigs are pledged as security under our government-guaranteed debt arrangements. Our results of operations will be adversely affected if we are unable to secure drilling contracts for our rigs on economically favorable terms. If our customers terminate or seek to renegotiate our drilling contracts, our results of operations may be adversely affected. Failure to obtain or retain highly skilled personnel could adversely affect our operations. Many of our drilling rigs are subject to damage or destruction by severe weather. We are subject to operating risks such as blowouts and well fires that could result in environmental damage, property loss, personal injury and death, some of which may not be covered by insurance or recoverable indemnification. Government regulations and environmental risks, which reduce our business opportunities and increase our operating costs, might worsen in the future.

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