On 31 May 2011, Ensco plc acquired Pride International, Inc. in a cash and stock transaction. One month of Pride International operations are included in our second quarter 2011 results with no corresponding amount in second quarter 2010. Recording Pride International’s assets and liabilities at their estimated fair values, as required by generally accepted accounting principles, did not have a material impact on second quarter 2011 results.
Professional fees, severance payments and other transaction-related costs to complete the Pride International acquisition totaled $23 million, $0.13 per share, in second quarter 2011 general and administrative expense. In addition, second quarter 2011 contract drilling expense included approximately $2 million, $0.01 per share, of severance costs related to the acquisition.
Chairman, President and Chief Executive Officer Dan Rabun stated, “We successfully completed the acquisition of Pride International, our new organizational structure is in place and teams are actively integrating our operations and systems. We are leveraging the benefits of our global presence and enhanced fleet, and new business opportunities are growing with a larger group of customers.”
Mr. Rabun added, “ENSCO 8504, the fifth of seven rigs in our ENSCO 8500 Series®, which was delivered today in Singapore, was contracted to Total in Brunei during the second quarter and will begin drilling operations in the third quarter. Three of our drillships have commenced their original five-year contracts and ENSCO 8502 has commenced its original two-year contract. All of our deepwater rigs in the U.S. Gulf of Mexico are now earning full day rate, and we anticipate that ENSCO 8503 will begin its original two-year contract with Cobalt in the fourth quarter after it mobilizes to the U.S. Gulf of Mexico from French Guiana.
“Our rig crews have performed exceptionally well around the world. In particular, our ENSCO 8500 Series® rigs had virtually no downtime during the second quarter and achieved 99% utilization. This exceptional performance further validates the benefits of standardization as we capitalize on efficiencies related to construction, training, inventory management and daily operations.
“In addition, we have seen a significant, broad-based pickup in jackup demand around the world, particularly in the Middle East where Ensco has contracted five jackups to Saudi Aramco in the last few months, and in the North Sea where all of our rigs are contracted into 2012. We believe there will be additional demand for jackups in Mexico later this year.”
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