During the corresponding time, Rowan Companies Plc saw a revenue deteriorated by -39.53 % year on year, sequentially revenue fell by -7 %. While revenue at the Rowan Companies Plc's corporate clients
Rowan Companies Plc's Comment on Sales, Marketing and Customers
Our drilling contracts generally provide for a fixed amount of compensation per
day (day rate), and are either “well-to-well,” “multiple-well”
or "fixed-term" generally ranging from one month to several years. Well-to-well
contracts are typically cancellable by either party upon completion of drilling.
Fixed-term contracts usually also contain a termination provision such that either
party may terminate if drilling operations are suspended for extended periods
as a result of events of force majeure. While many fixed-term contracts are for
relatively short periods of three months or less, many others are for one or more
years, and all can continue for periods longer than the original terms. Well-to-well
contracts can be extended over multiple series of wells. Many drilling contracts
contain renewal or extension provisions exercisable at the option of the customer
at mutually agreeable rates. Many of our drilling contracts provide for separate
lump-sum payments for rig mobilization and demobilization. We recognize lump-sum
fees and related expenses over the primary contract term. We recognize reimbursement
of certain costs as revenues and expenses at the time they are incurred. Our contracts
for work in foreign countries generally provide for payment in United States (U.S.)
dollars except for amounts required by applicable law to be paid in the local
currency or amounts required to meet local expenses.
A number of factors affect our ability to obtain contracts at profitable rates
within a given area. Such factors, which are discussed further under “Competition”
and in "Risk Factors" include, among other things, the price of oil
and gas which can affect our customers' drilling budgets, location and availability
of competitive equipment, the suitability of equipment for the project, comparative
operating cost of the equipment, competence of drilling personnel and other
competitive factors. Profitability may also depend on receiving adequate compensation
for the cost of moving equipment to drilling locations.
During periods of weak demand and declining day rates, we have historically
accepted lower rates in order to keep our rigs working and to mitigate the substantial
costs of maintaining and reactivating stacked rigs. We have, however, stacked
certain rigs in the past rather than make the substantial improvements required
to secure ongoing work. We generally have a mix of short- and long-term contracts
that enable us to take advantage of higher rates in rising markets (and to cover
potential higher operating costs) as well as to provide down-side protection
when markets decline.
