Key questions and answers from the second quarter fiscal 2007 earnings call conducted by Rowan Companies Inc. on August 2, 2007.

Robert MacKenzie (FBR Capital Markets): You talked in the past about moving the rigs out of the US Gulf of Mexico to foreign markets like Middle East, North Sea, Latin America. Can you update on the status of getting some more rigs out of the US Gulf?

Daniel F. McNease: We have currently 14 tenders in house that we're looking at. We're bidding in all these areas, and we'll just have to wait and see how successful we are. But there's a lot of demand and people are still offering long-term contract.

Robert MacKenzie: Do you think the US Gulf reached bottom yet or if there's still further downside in demand there as hurricane season progresses?

Daniel F. McNease: It's flattened out and it's started up is the case, we got a higher day rate for the Juneau. We were able to renew the bigger rigs at the same price or higher than we were getting before. We believe it's bottomed out and started up. One thing's that's driving our fleet is the deeper gas drilling and we're getting the rate to drill deep well for BP which is going to be over 30,000 feet. People are talking to us about some additional opportunities like that. We believe that the deep gas is going to play a big role in Rowan's future in Gulf of Mexico.

Collin Gerry (Raymond James and Associates): You mentioned that you have 14 tenders outstanding. Can you tell us the mix or what terms some of the operators are looking at?

Daniel F. McNease: Most of those are two to four-years.

Collin Gerry: On the land rig side, what are you seeing on day rates there?

Daniel F. McNease: It's flattened out also. All through this period, we've remained at 100% utilization. We think that the fact that we're focused on the deeper drilling has helped us a lot.

Collin Gerry: You're not seeing too much pressure as far as leading edge rates go?

Daniel F. McNease: No. We're getting a lot more calls now as far as the deeper drilling. We have a two rigs coming out here the third quarter and we've got several different operators talking about them, the fact that they're 2000 horsepower and can drill the deeper wells and it give us an advantage there. Those are in south Texas, East Texas Louisiana and one or two in Oklahoma.

Thomas Curran (Wachovia): For years, you've reported LPI operating profit on a gross operating income basis, and then starting last quarter, you began providing a breakout of cost between direct costs and other operating costs. Can you explain the difference between the two and your reasoning for the shift?

Daniel F. McNease: The reason for the breakout is the fact the manufacturing division is growing so much. Hence we thought we would give more clarity on what it's doing. As far as the difference between the direct cost and what we would call other, direct is purely the cost of those products that are going out the door where there's material labor, allocated overhead, etc. The other is primarily engineering, resource, and development and costs like that, which are obviously critical to the process, but they're not tied to individual sales.

Thomas Curran: The implied run rate margins for some of the new product lines are coming in lower than what you were expecting. Could you speak where you were off there?

Daniel F. McNease: They're coming in close to what we were expecting. We've had a number of hiccups in the last few quarters that have brought the numbers down a little bit, but of course the other thing you've got to look at is the level of parts. If you go back in the last couple of years, about half of the business at times was part sales, which have very high margin to them. As we've moved into some of these new product, the part sales as a percentage of the total has diminished, and that's been a little bit of a drain on the profitability, but as we go forward, we're hoping to move those margins up.

William H. Wells: The gross margin was 26% if you take the Perfadora and trial loss out. We hope to build that margin up between 25 and 30 and that's what we've been doing.

Thomas Curran: Do you expect to receive the jack-up rig kit order for Scorpion's latest new build order at Lamprell, and are there any other pending laterno new build jackup orders that you would expect to result in rig kit orders?

Daniel F. McNease: We've already received the Scorpion kit order for the first Scorpion rig and Lamprell yards. There is options for four or five additional ones, but we have a lot of bids out worldwide right now. We think that we will get some of those. There's going to be some more additional 116 each built around the world, and we think we'll be successful in that, but I can't want tell you exactly how many.

Thomas Curran: On the offshore drilling side, could you provide a breakdown of the 14 tenders on the operator side in terms of who issued them, and then on your side, which jackups are being bid?

Daniel F. McNease: I give you the 14 tenders, but I'm not going to tell you which jackups we're bidding where. We got three tenders for Ramco, one for RasGas, four for KJO, that's in the joint venture deal between Kuwaiti and Ramco. We got two from Egypt, we got one from Tunisia, two from Brazil and one from Angola.