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LeTourneau parent to restart rig construction
Oil drilling contractor Rowan Cos. said it will restart construction of a jack-up rig at its Vicksburg, Miss., shipyard, and raised its capital spending budget by up to $25 million, the Houston-based parent company of Longview’s LeTourneau Technologies reported.
Late last week the company said its third 240C class jack-up rig, called the Joe Douglas, will likely be delivered in the third quarter of 2011.
Construction of the rig was halted earlier this year due to concerns over tumultuous credit markets and the downturn in jack-up drilling markets, said Matt Ralls, the company’s CEO.
“Based on improvements in the credit markets and our confidence in our liquidity outlook through 2010, we have elected to resume construction,” Ralls said, adding that the rig is expected to generate an “attractive return on capital based on its expected go forward cost of $150 million.”
The company said it plans to raise its full-year capital spending plan between $20 million and $25 million to $550 million, and forecast 2010 spending in the range of $300 million to $325 million. The company plans to fund capital expenditures through cash and operating cash flows. The company also has $155 million of credit available under its undrawn credit facility, but does not expect to use it.
Rowan provided an update to its construction and delivery schedule, which includes its second 240C class rig to be completed and delivered by early 2010, its first three EXL rigs to be delivered in the second, third and fourth quarters of next year and its fourth EXL rig to remain on hold pending the company’s decision to resume construction by third quarter 2009.
Comments
By gary
July 2, 2009 1:23 PM | Link to this
ok so what does this have to do with the longview plants and the workers in east texas that are out of work? if the news story read longview plant to restart rig construction then woohoo…but so far i am yawning here.
By Bob
July 6, 2009 8:50 AM | Link to this
B-O-R-I-N-G A-R-T-I-C-L-E… I too am yawning Gary as you hit the nail on the head on how does this effect the East Texas area workers… Now if the LNJ wanted to really report current news… This just out… Chris Davis sent to Oklahoma City for reassignment…Nothing in the sports page in reference to this??? Wake up LNJ…
By Michael
July 7, 2009 11:34 AM | Link to this
you do understand that a lot of the major components for this drilling rig are built here in longview, including the bull gears, electric motors, legs?
By gary
July 14, 2009 4:46 PM | Link to this
then maybe they should state how this affects us in east texas by stating that in the article? Recently being laid off after ten years in one place …i was excited to read the headline of this article…then as a i read there is no mention on how this would affect our area.