Good day and welcome to the Ensco International First Quarter of 2009 Earnings Call. As a reminder this call is being recorded and your participation constitutes a consent to being to taping. I will turn the call over to Richard LeBlanc, Vice President of Investor Relations, who will moderate the call. Please go ahead, sir.

Thank you, Jessica. We would like to welcome everyone to our first quarter earnings conference call. With me in Dallas are Dan Rabun, our Chief Executive Officer; Bill Chadwick, our Chief Operating Officer; Jay Swent, our Chief Financial Officer, as well as other members of our executive management team. This morning we released our earnings announcement and filed our 8-K with the SEC. We also expect to file our 10-Q later today. The earnings release is available on our website, www.ernscointernational.com. As usual, we'll keep our call to about an hour. Jay will first provide a financial overview. Dan will then discuss our markets and operations. As we do each quarter, I'd like to remind everyone that any comments we make today about our expectations of future events are forward-looking statements pursuant to the Private Securities Litigation Reform Act of 1995. All such statements are subject to risks and uncertainties and many factors could cause actual results to differ materially. We refer you to our earnings release and SEC filings available on our website, which defines such forward-looking statements, state that the company undertakes no duty to update any such statement and lists risk factors which could cause actual results to differ materially from our expectations. I'd also like to remind everyone that with regard to our rig status, a detailed listing is provided on our website, and that is updated the middle of each month when we file our 8-K with the SEC. The last update was as of April 15th. At the end of our prepared remarks, we will have time for questions. With that, let me turn it over to Jay.

Thank you, Richard. Good morning and thank you all for joining us today. My comments this morning will cover details of the first quarter results and our outlook for the second quarter and full year 2009. Before getting started, I should point out that we adopted a new accounting standard this quarter, which will have an ongoing impact on the calculation of earnings per share. Under this new requirement we now exclude net income allocated to non-vested restricted stock from the numerator of our EPS calculations. This change only affects the EPS computation. It does not affect the calculation of net income. Diluted EPS for the quarter was reduced by $0.02, and each quarter in 2009 will be similarly impacted. So now let's move onto the results. First quarter revenue was $514 million, which represents a 10% decline versus the same period last year. About 60% of this decline was attributable to our jackup business segments and the balance is due to Ensco 7500 mobilizing during the quarter with all day rates deferred to future quarters. Although we realized higher average day rates for our jackup fleet in the first quarter, utilization decreased to 80% versus 95% a year ago. First quarter earnings per share dropped to $1.56 versus $1.88 last year primarily as a result of the revenue decline. Excluding the accounting change previously mentioned, EPS would have been $1.58. Now let's discuss quarterly trends by comparing first quarter 2009 sequentially to fourth quarter 2008. The first quarter revenue decreased by approximately 17% from fourth quarter levels, inline with the decrease we projected during last quarter's call. Most of this decrease is attributable to fewer jackup rig operating days in Asia-Pacific and North and South America. Four Asia-Pacific jackup rigs, Ensco 51, 50, 56 and 96 completed contracts in…

Thank you, Jay, and good morning, everyone. As we stated in our last conference call in February, our customers are adjusting their business models to lower commodity price, tight credit markets, and a global recession. While we believe Ensco is positioned better than most to maneuver through these challenges, we are clearly feeling the impact, and no drilling contractor is immune. From a macro perspective, we expect our jackup business to be challenging for the near-term until we see some stabilization of commodity prices. We are actively managing our business model as well, and as Jay mentioned in his remarks, we had another good quarter in managing our costs for the 16% quarter-over-quarter reduction in operating costs. We are aggressively working to better align our operating costs to the current environment, and we are starting to see some of the results of our cost containment measures. This is an ongoing effort, and we hope to see more improvement as the year progresses. We had hoped to have Ensco 8500 earning revenue this quarter, and we're disappointed that the deck cranes needed to be replaced. We are in the process of installing the new units and should have Ensco 8500 working for our customers late in the second quarter. Our 8500 series construction program is proceeding well. Ensco 8501 is undergoing final testing in preparation mobilization to the Gulf of Mexico that we expect will commence in June. The five other semis under construction are progressing as planned. We currently do not expect the same startup and equipment issues as experienced on Ensco 8500. Looking to the remainder of the year, our significant investment in our deep water initiative will begin to provide a meaningful, positive impact on our financial results. Earnings from our deep water fleet will serve as a…

Jessica, we are now ready to take some questions.

(Operator Instructions). We'll take our first question from Ian McPherson with Simmons & Company. Ian MacPherson - Simmons & Co.: I guess my first question would be regarding the next slug of deep water demand for Petrobras. I'd like to get your opinion on the local content imperative down there. Whether or not you think the next round of rigs will be predominantly or entirely locally built and managed rigs? Or what you think the opportunities are for your three un-contracted units are for that opportunity?

Ian, we think we've got a good opportunity for uncommitted units down there, and we're talking to Petrobras about that. With regard to the local construction, we've read what you have read. We've just began to try and discuss that with Petrobras. As you know there haven't been rigs built in Brazil before. But to the extent that Petrobras is interested in doing that, so are we. It's too early to say what the realistic opportunity might be down there, but we find it interesting and we are looking into it. Ian MacPherson - Simmons & Co.: If I may ask a follow-up it would be on the Mexico jackup market. Any specifics you might have on the incremental demand, the timing? How many of the incremental tenders would be for renewals on existing rigs? Do you expect that PEMEX might exercise their termination rights on some contracts in order to release rigs and then re-contract at lower market rates?

Ian, on the last part of your question, I don't think so. I'm not saying that that's totally impossible. As far as terminating some of the rigs that they have under contract, you know, what they're looking at is they need additional supply. I think if any of the rigs that are currently contracted are terminated and released they would be the older Mat slot jackups that are not as productive to help them fulfill their needs as to some of these more capable rigs. As far as what they're looking for going forward, that seems to be fairly dynamic. The number stays fairly constant between six to 10 additional rigs, most of the time it's on the high side. We expect to tender in the next couple of months and that's going to be for we think what we keep hearing maybe at 250 or so, some 300 foot rigs, four, five, and a few 350s. Ian, keep in mind, too, that on three of our five rigs committed to PEMEX, those rigs do adjust to market rates. It's only the most recent two that are fixed.

Our next question will come from Collin Gerry with Raymond James.

Just a follow-up on the Mexico side. Do you have a sense for how many of those incoming tenders are going to be bid against incumbent rigs there, rolling over?

I think what Jeff was addressing was all incremental demand.

And then you mentioned, on the deep water side, a little bit of a discrepancy emerging between the fourth and the sixth or the lower generation rigs and the higher spec rigs. I want to follow that logic on the jackup side. Are we seeing utilization hold up better for the higher spec rigs? I guess the latest fleet status in Southeast Asia you had some 400 footers have some idle time now. It doesn't seem to me there's too much of a bifurcation in the market place. Maybe give us a little color on what's happening in terms of higher spec rigs internationally?

Yes, Colin, this is Mark burns. Particular in Southeast Asia, where you noted we do have one of our high spec units, the Ensco 106 is now idle. At this point, companies have not been expressing a great deference or preference for the new build units versus the older units. We will start to see that as more of these units come online. Obviously some companies that have been in this business, exploration companies, have been concerned about efficient operations, safe operations and startup of these new builds. So we've been able to see the older rig utilizations remain. So we haven't, at this point, seen a great difference between the two.

But that's something that we should expect over the course of 2009?

Well, I think, as we get further into 2009, and the newer rigs do continue to come out and into the market place, obviously newer equipment, is brighter, it's shinier, and there's companies that will prefer the newer rigs. So I think, as these newer rigs start to also get some operating experience behind them, I think you will start to see a difference between the two.

Collin, this is Jeff. Let me just add one thing to that. It's really not exactly the same type of comparison when we're talking about the sixth generation semis. Because the sixth generation semis have a different capability that some of these older mold rigs and lesser capable rigs can do. We're basically taking the sixth generation semis, for all practical purposes, intofor lack of a better word, a new frontier and therein lies the difference. So you're beginning see these, I believe, the sixth semis take a significant step away from the fourth and fifth generation semis relative to utilization and rate. They're actually addressing something that's new and different that we haven't done before.

That's helpful. My last question, just, Dan, you mentioned the North Sea market looks a little more balanced than maybe some of the other markets. Why is that? I mean I am talking about the jackup side. We are seeing some from the mid water side and certainly jackup weakness everywhere else in the world. What's going on in the North Sea that maybe it's a little bit more resilient?

Collin, this is Mark Burns. I think the important thing to remember is the operating area itself, the North Sea, the various sectors, the UK, Dutch, Norwegian sectors. The regulatory compliance requirements are greater than in benign operating areas. Your equipment needs to have different capabilities, for example, different instrumentation systems, training systems. So the North Sea tends to be more of a closed market, I guess. It's a difficult market to enter. So with that, the total available jackups in the North Sea remains fairly constant and fairly balanced. There's a total of 35 jackups operating in the North Sea and as you look at requirements for the remainder of this year, it's still a fairly balanced market. There will be some weakness in the market later in the year. However, as Dan mentioned in his opening comments, we are still seeing some near-term opportunities. So primarily that's the main reason why you don't see such the swing there as you do in other areas.

Our next question will come from Robin Shoemaker with Citigroup.

I was wondering if you could describe the competitive bidding situation in cases today, where you have 10 or 12 rigs bidding on a single job in the jackup market. Is this key to having a winning bid there strictly price? Is having a strong resume important? Is it important that the rig has worked recently or how long it's been stacked? I just wondered if you could describe what makes for a winning bid in these highly competitive situations.

Yes. Obviously, price is important. But that's not the only determination. I think it depends on customers as well, what they look at. I think, if you look at the recent award we got with Ensco 53 in India. There is a meaningful differentiation between an established drilling contractor with established systems and processes and a very successful drilling record for that particular rig. So, the customer looks qualitatively as well as just price. I think in this market it will be quite meaningful.

Okay. I wonder if you could give your view on your strategy with regard to the Ensco 8504, 8505 and 8506, and are there any customers who are interested now in signing contracts that far ahead to late '11 or '12? I believe on the last call, you said these conversations could continue for quite some time closer to the point of delivery.

Yes. What we've always said fairly consistently is that, within a two-year time period of delivery is really kind of the sweet spot, if you will, for customers to contract rigs. I think, what I said on the last call and it's the same today, we are in very meaningful conversations with customers about signing contracts today.

(Operator Instructions). Our next question will come from Mike Urban with Deutsche Bank.

I had more of a question on the general market sense and kind of your discussions with customers, which is, you know, as recently as a few months ago, it just seemed like a lot of them were shell shocked. You kind of were in free fall in a lot of markets, commodity prices were falling, no access to credit capital markets, and those things are not great but are stabilizing. I'm speaking of the jackup market specifically. Is there a little more willingness on the part of those customers who were a bit, paralyzed to come back and look at projects and say, we're not quite there, but, you know, if we continue to see a stabilization let's talk about work going forward?

Yes. What you are seeing is we have seen price stabilize somewhat. You've seen the capital markets stabilize somewhat. I think all of those are very positive signs, and I think, if this would continue for a period of time where the customers have confidence in their budgets, I think you would see a pickup in activity.

So for now, it does seems like they're still in a kind of wait and see mode, but you have encouraging signs given, some of the things you mentioned.

That's the way I would characterize it, yes.

That's fair. In some of the weaker markets, I guess, in parts of the Middle East and Southeast Asia would certainly be one of these. Is there a sense to where customers want to get rates? Do they need to get down to close to cash break even levels, or is it not necessarily a question of rate but again, some of the needy issues we just talked about in terms of just you can take the way you see it.

I don't think it has anything to do with rates.

So the new word is the continued caution that's out there.

Yes.

Simpler sense same issues that have been out there right now for the last several months.

I think, and I said it in my remarks, one of the markets where you do see some effect of rates is in the U.S. Gulf of Mexico, where we have some smaller operators or prospects all of a sudden become more economical given rates.

Our next question will come from Tom Curran with Wachovia Securities. That's all for me. Thank you.

Dan, the two deck cranes on the 8500 that you guys are currently in the process of replacing, they were provided by Patriot rather than Ctracks, the vendor you've gone with for, I think, all of the other 8500 new builds as well as some of your other rigs. What made you decide to go with Patriot in that particular case? As you look across the other major components for the remaining new builds, are there any others where you strayed from the vendor you typically use?

We originally decided to go with that particular vendor, several years ago. It was a competitive bidding process. It was based on price and technical requirements, and they had provided other equipment to us. So, it was a competitive situation. The last part of your question, I apologize, I didn't catch it.

Sure. I was just wondering, when you look at the major components on each of the remaining 8500 series new builds, are there any other examples where you strayed from the vendor you're using for most of them?

No, not really.

Okay. The vendors are fairly uniform in terms of the top sides, the packages?

Well, all of the rigs are the same. They're all the same. So, anything that we experienced on Ensco 8500 has been incorporated into the subsequent units. So we don't expect any similar issues that we had on Ensco 8500 to bleed over, if you will, to the latter rigs. I think what's real important is that a lot of the commissioning issues that you had with a lot of this new equipment on Ensco 8500, a lot of this stuff is very software driven. It's very complicated and it took a lot of time to work some of the bugs out on that equipment. If you look at by comparison to Ensco 8501, where we're able to just take the software off 8500 and incorporate into Ensco 8501, I mean, its light years ahead of where Ensco 8500 was. The learning curve was quite substantial in the first rig.

Sort of like the down side of the increasingly wired rig, I guess, right?

Yes.

Outside of the North Sea, as you look across the rest of your fleet, how many rigs outside of the North Sea are you currently in discussions about any kind of potential day rate relief in return for extended term?

Yes. I was just looking at Mark. I think three or four.

Three or four. And where would they be?

Out in Asia.

And then, Jay, on the cost reduction front and I'm sorry if I missed this earlier. What percentage of the cost savings you have realized thus far have been labor related, and how much more of that do you think is possible? And if you could quantify that, please?

I think what we've seen so far in terms of labor rate is fairly modest for a couple of reasons. What we said is we're going to have fewer operating days over time, particularly as we look at warm stacking or cold stacking rigs. So a lot of that hasn't really cut in yet. We also talked about currency having some impact on labor in countries where we're not paying in U.S. dollars. It takes a little while for some of that to feed in, because we have old hedges in place that are still at older rates. So most of what we're going to see on labor, you're going to see bleed into the numbers and the second through the fourth quarter with respect to labor.

The next question will come from Roger Reed with Natixis Bleichroeder.

It's actually, Jeff. The first question, I guess, the inevitable M&A question for every quarter. Could you characterize what you're seeing in terms of bid/ask spreads for assets that are out there, and have they compressed to the point where they merit some consideration versus your very successful 8500 series program at this point?

It's just been two months since I had to answer that question. I think the best way to characterize it is the spread between the[bid and ask is narrowing, and there are some opportunities out there that obviously we're looking at. It's way too early to make a call on whether anything is actionable or not.

Sure. Understand. I guess, looking at the U.S. Gulf of Mexico jackup market, as you head into hurricane season here, is your sense, from your discussions with customers that they're little bit more reticent to continue their drilling programs independent of what gas prices are doing, having kind of been burned last year in hurricane season?

Clearly the hurricane season is, as people are trying to adjust to the new criteria for where you can drill, it's having an effect on the customer's willingness to proceed during that period.

Next question will come from Dan Boyd with Goldman Sachs.

I would like to talk about your stacking strategy a little bit and your ability to reduce costs even further. Of the rigs that you currently have, can you talk about what percentage of the cost decline – or from peak, how much costs are down on those rigs? Where are you in your decision process of stacking some of those your cold stack and reducing the costs further?

I think, at this point, we haven't cold stacked any rigs. We're looking at it. We've been warm stacking some rigs, starting to take some costs out. But as I said earlier, most of that doesn't really start feeding in until the second, third quarter. A way to think of it, Dan, in rough numbers is that you probably are going to spend about $1 million to warm stack a rig and your cost to just sort of keep it going in a cold stack mode is probably $4,500 a day, something like that. When you're in a warm stack mode, it's probably $10,000 a day higher than that, somewhere in that range.

And in your guidance, it was down slightly year-over-year. Are you assuming any of the rigs get cold stacked? Or are you assuming the ones that are currently idle stay in warm stack mode?

There's some assumption of cold stacking in there. I can't get into the real specifics for you, but we're assuming some will.

We'll now hear from Dan Pickering with TPH.

I guess and I apologize I missed this at the beginning. Venezuela, Dan, I think I heard you say you're continuing negotiations. Any payments of any kind at this point?

Nothing meaningful.

I want to come back to the discussion around you said you're having some rate relief discussions with three or four rigs in southeast Asia. Can you just describe I mean, is that a, okay we'll lower the rate type of discussions? Or is it give us some term, we'll take a lower rate? I mean how –

It's all trade for term.

Okay. So net revenue impact to Ensco is unchanged in your current negotiations?

That's correct. Increased.

Increased. Okay. So maybe lower rate, but significantly longer term or something?

Longer. I'm not sure significant.

Fair enough. Then, as we look at this stacking decision, I guess what I didn't hear in the discussion of the markets around the world was, basically, I heard Mexico looks potentially better. North Sea has a few incremental bids out, and then, essentially, the rest of the world is sort of static at best right now. So, is it time that is going to drive your decision? Is it a day rate level that drives your decision? Is it oil price? I'm just trying to understand how you are thinking about that or how you're analyzing the market?

In terms of stacking?

Yes.

Yes. I mean, it's pretty simple. We have several rigs that are warm stacked right now. We look in front of the rigs and say, what are the opportunities that we have on the near-term horizon. To the extent there isn't anything there, we'll go stack the rigs. So we have been actively addressing active leads and prospects for those rigs. So when we don't see any further near-term opportunity, that's when we'll make the decision.

Sounds like you define near-term as three to six months, something like that.

Yes. That's exactly right.

(Operator Instructions). We'll now hear from Pierre Conner with Capital One Southcoast.

Dan, I wanted to see if you could talk a little bit more about the Middle East and you mentioned you don't see any additional tenders for Saudi Arabia, Saudi ARAMCO there. There's been discussion about additional gas drilling. Do you envision that those would be opportunities undertaken by existing rigs or we just move to those prospects? What do you see there relative to further activity in that region?

Pierre, as far as opportunities in the Middle East, obviously the LNG big gas development projects in Qatar that have utilized several jackups over the last few years, those large development projects are starting to draw to an end. That's allowing out some un-utilized jackups. Also Saudi ARAMCO's announcement of decreased production, there's been some units released, out of Saudi Arabia. However, we continue to look at opportunities, for example. We've got a short-term opportunity coming up with (inaudible) here with one of our idle units that we're going to be doing here soon. So there's still some opportunities in the area. There's not a lot of long-term opportunities. So we're still looking at opportunities in the area.

Could you say that utilization is going to continue to decrease in that region, or has it stabilized as far as utilization? Not rates, just utilization?

I think we'll see some utilization decrease still between now and the end of the year, as some of these projects start to roll to an end, yes.

Next question is about the competitive landscape on the new builds coming out, and, Jeff, Dan, you guys have been to some of the construction yards. What is your opinion on the deliveries? Any cancellation potentials out of the some 70 plus in the order book on jackups I'm talking about now?

Pierre, I really haven't heard since the last call, really no new incremental information on that. I really don't hear a lot about cancellations. So what you do hear about for certain customers who have run into financing problems, and, they're working those out with the yard, so I would expect you'd see some diminution in the order book.

But no change, really, in perspective, that's your point?

Correct.

Dan I was going to ask you, your comment about the Gulf of Mexico with some potential incremental activity with the lower rates is interesting, and so a little more on that. The level of those inquiries, if you have the rig available at this rate, this project becomes available, or are there specific bids out there, inquiries for jobs?

Pierre, you know the Gulf of Mexico. You have got a lot of smaller operators that when rates get down to a certain level they take advantage of it and commence work activities. So there's those kind of operators there now kind of coming into the visibility.

Then last one for Jay. On the costs side, you mentioned the labor and the potential to secure additional reduction there. So supplies, you mentioned renegotiating with some of your suppliers. What percent of cost? I'm assuming that's in the 15%, 20% range. Then ballpark what kind of target would you have for how much you could cut that cost?

Well, I think, in terms of percentages, as you know, Pierre, some vendors are less willing than others to be accommodating. So, the range is anywhere from zero to probably 20% at this point. And that's without working too hard at it yet. We've been working pretty hard with some vendors in trying to work that number higher. So right now, I'd say we've secured a number that's in the 10% range. Probably if you looked across the board and we are looking to keep working on that through a variety of different procurement strategies.

And the impact of that Jay, second half as well?

Absolutely.

Our next question will come from (inaudible) from Carnegie.

Can you comment on how many units in terms of the new build coming to the market that are sort of at risk and may not come to the market or will be postponed?

You're talking about deep water?

Yes.

I don't have a headcount right in front of me; but I think it's pretty well publicized, what companies are experiencing problems and, several rigs that were contracted last year down in Brazil seem to be at risk and there are numerous others. I think it's all pretty much public information.

Also, you mentioned a bit on the sublet side. Are you seeing that rigs on the sublets are significantly lower rates than what the initial contract was both on the jackup and market (inaudible) part of it?

This is Jeff Saile. I'm not aware of any rate reductions in the sublets. I haven't heard of any. A lot of the sublets are opportunities for these guys that don't have, known long-term programs in front of them, and ultimately it could be an opportunity, or create additional opportunities for all the contractors if some of these sublets generated some success. You'd hold Brazil up as an example of what success in deep water will bring to the market.

I want to ask a question on the bid ask spreads. Can you give us a bit of color on sort of what the range is both for again the high end jackup deep water semi kind of a sub?

I don't really care to comment on that.

Next question will come from Elliott Glazer with DuPasquier.

There was an analyst report last week on Transocean, specifically on the deep water fleet, where the analyst expressed his opinion that fully contracted rates would have to come down, would have to be lowered because of pushback from the oil company operators. In a similar vein, as you take a look over the next few years at your contracted rates to your Singapore shipyard for the 8504, 8505, 8506. Is there any ability on your part to get them to lower the rates by getting them to go to the steel company suppliers and have them lower the steel costs. Because as you know, the price of hot rolled steel during the past seven months has been almost cut in half.

I don't think it [would come up] with any response with regards to the question. Clearly we continue to work on all of our costs. But you have to understand though that steel costs in new build construction is that since there is an not an effective way to hedge steel costs in the marketplace. That whenever you place an order for a new build rig it usually requires some portion of a down payment. That down payment is used by steel the day you order the rig. So that fact that steel has decreased in price really doesn't result in a direct increase of the cost of the unit.

What about the question of business gets any worse, if the oil price gets any lower, the oil company offering is even on the best deep water rigs will ask for some kind of price relief?

We haven't seen that kind of pressure on the deep water rigs. Like I said we would be out of contract with them, and we plan to hold them accountable for it. If they were to decrease rates just like we have done on the jackups, it would be in trade for something that was economically beneficial to us. Additional term or something else would be economically beneficial. Just as when the market was going up and we had below market rates, our customers held us to our contracts. We intend to hold our customers to their contracts. Keep in mind, Elliot, too, on these commitments by the oil companies on these deep water projects are long-term commitments, so they tend to be fairly conservative on a commodity price. They're not as much driven by the current stock price.

We have time Jessica for one more question.

Next question will come from Geoff Kieburtz with Weeden & Co. Geoff Kieburtz - Weeden & Co.: You mentioned in your comments that you were considering entering into new markets. I wondered if you could tell us a little about what you might be considering and maybe more importantly how do you think about entering into a new market when we already have pretty challenging competitive environment everywhere.

We look at it very closely, Geoff. We are considering looking in Vietnam. Not considering we are looking at Vietnam. We go in and do our research in terms of administrative costs and tax structures. We look at our customer base. We look at the amount of programs over the next two or three years and, along with our mobilization costs of a unit and that type of thing. So obviously we do our up-front work on that. We also look at entering a new area. We look at the long-term geological impact of that area. Obviously if we don't see a great amount of geological potential in the area it just means that there may not long-term be a place we want to be. So we take all of that into consideration when we look at moving into a new market. So that's just one example. when we look at entering a new market. So that's just one example.

There's clearly – let me just add on to what Mark is saying. We would not move into a new market unless we had substantial term. Geoff Kieburtz - Weeden & Co.: Are you thinking, as you look at the idle units that you have right now, that there's a meaningful number of those that you could put to work in markets you don't currently work in?

No.

Thanks, Geoff. Again, we'd like to thank everyone for joining us today on our call. We look forward to talking with you again in July, July 23rd for our second quarter earnings conference call. Jessica with that, I'll turn it back over to you.

Thank you. Ladies and gentlemen, that does conclude today's conference. We thank you for your participation.