Good day everyone, and welcome to the ENSCO International Fourth Quarter and Full Year of 2007 Earnings Conference Call. As a reminder, this call is being recorded, and your participation constitutes consent to its taping. I will now turn this conference over to Mr. Richard LeBlanc, Vice President of Investor Relations, who will moderate the call. Please go ahead, sir.

Thank you, Angelina. I'd like to welcome everyone to our fourth quarter and full year 2007 earnings conference call. With me in Dallas are Dan Rabun, President and CEO, Jay Swent, our Senior Vice President and CFO, as well as other members of our executive management team. This morning, we released our earnings announcement. We have filed our 8-K with the SEC. We also expect to file our 10-K later today. The earnings release is available on our website www.enscous.com. You can also find a reconciliation to any non-GAAP financial measures that may be used on the call. As we've done in the past, we will keep the call to about an hour. Jay will first provide a financial overview. Dan will then discuss our markets and operations. I'd like to remind everyone that any comments we make today abut our expectations and 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, states that the company undertakes no duty to update any such statements, and lists risk factors that could cause actual results to differ materially from our expectations. I'd just also like to remind everyone that with regard to our rig status, a detailed listing is provided on our website and is updated the middle of each month when we file our 8-K with the SEC. The last update was as of February 15. At the end of our prepared remarks, we'll have time for some questions. With that, I'd like to turn it over to Jay.

Thank you, Richard. Good morning and thank you all for joining us today. I will start our call with an overview of 2007, then discuss fourth quarter results and close with some comments about our outlook for the first quarter and full year 2008. 2007 was another record year for ENSCO with net income from continuing operations of over 30% and approaching $1 billion. Despite strong cost pressures, we held our margins constant year-over-year... our margin rates constant year-over-year. In addition, we lowered our effective tax rate from 25% to 21%. The continued strength in our international markets more than compensated for softness in the U.S. Gulf of Mexico jackup market. We expanded our international presence during 2007 by contracting ENSCO 108 to work in Indonesia and by relocating ENSCO 105 from the Gulf of Mexico to Tunisia. As a result, over 75% of our 2007 revenue was derived from international operations. Our contract backlog increased 22% from last year to $3.9 billion. This backlog is split 37% deepwater and 63% jackups. Deepwater backlog increased by 27% year-over-year and jackup backlog increased by 19%. We continued our share repurchases during 2007 and spent $522 million to repurchase 9.4 million shares at an average cost of $55.56 per share. Now turning to the fourth quarter, net income increased 13% from prior year levels to $239 million. Earnings per share increased by an even great percentage 19% as a result of our ongoing share repurchase program which reduced the average outstanding share count by 7.8 million shares versus fourth quarter 2006. Our improved operating results in the quarter were principally driven by higher international day rates and the addition of our newbuild jackup ENSCO 108 in May 2007, offset somewhat by lower day rates and utilization in our Gulf of Mexico jackup…

Thank you, Jay and good morning to everyone. We had another very successful year and achieved a number of important milestones in 2007. We were especially pleased that 2007 was the safest year in our 20-year history. The financial community does not hear much about the importance of safety in our operations. The safety is an integral part of the ENSCO culture in addition to our focus on financial performance. While competing daily with other drilling contractors for business and financial performance, safety is a sheer goal of the entire drilling contractor community. All ENSCO personnel should be proud of our safety performance in 2007. As Jay indicated in his remarks, we've reported record financial results for 2007. We also took delivery and commenced operations of our 10th new high specification jackup ENSCO 108 which is now working for BP in a remote location in Indonesia. It is worth noting that ENSCO 108 was delivered on time and on budget out of the shipyard, and since commencement of operations has experienced minimal downtime. In 2007 we also continued the expansion of our deepwater fleet with the announcement of the construction of our fourth 8500 Series ultra deepwater semisubmersible fully [ph]. I will now discuss other developments since our last call and we will then follow the same format as last quarter's call and provide some insight into our markets and current operations. I'll refer you to our monthly contract status report filed about 10 days ago for specific rig details. We expect to take delivery of the first of our 8500 Series semis ENSCO 8500 in the third quarter and anticipate that the rig will commence operations in the Gulf of Mexico in the fourth quarter. As with any project of this size and magnitude, we have issues to overcome…

Okay Angelina we're happy to take questions at this time. Question And Answer

[Operator Instructions]. Our first question comes from Ian Macpherson calling from Simmons & Company. Please go ahead. Ian Macpherson - Simmons & Co., Inc.: Hi good morning and nice quarter.

Appreciate it. Ian Macpherson - Simmons & Co., Inc.: I just really want to dig into the Gulf of Mexico and the pricing dynamics there, because that as you said, the bracket of leading-edge pictures is still pretty broad. So I want to get an understanding when we see for instance the day rate with the ENSCO 74 and 150, how projectable is that type of day rate for your other large jackups that you are bidding today based on sort of the leading-edge bidding environment. Is that an anomaly at this point or do you think that that's projectable for either 350 to 400 per jackups in the middle of the year?

Ian this is Bill Chadwick. I think that's probably not an anomaly. I think it probably is projectable. We have seen that as the wage for those 400 foot rigs remain an awful lot stronger than the smaller rigs that are in the Gulf of Mexico and I believe there is every indication that they can hold at that level or possibly go back higher where they previously were. Ian Macpherson - Simmons & Co., Inc.: Right. Okay and then with the ENSCO 69 in Venezuela, that rig has some contract exposure in the middle of the year as well as the... any change with the status quo for that rig? Based on the operating environment there, do you expect to the rigs to fulfill its options and continue to work in that market thereafter?

We are actively negotiating with that Ras Gas [ph] for a new contract down there and we have been for some time. There have been a lot of changes internally in Ras Gas and it's been a very protracted negotiation, but I think its going well and I would hope that we could execute a new contract with those folks to keep that rig down there for quite some time. Ian Macpherson - Simmons & Co., Inc.: Okay, and just one more quick one; maybe Dan if you can clarify this, if you have gotten that far when you look at future uses of cash or your investment opportunities, it's been pretty dry that deepwater has been with incremental growth dollars have been spent, would that be your expectation going... moving through the year if ENSCO were to that pursue more growth in the fleet.

Yes I mean we're looking at a lot of different things, but deepwater is clearly a focus and we think we can continue to build in cost effective manner that we've built the rigs in the past and get contracts and get some turns that we've been able to obtain. So it's a very good use of capital for our shareholders. So yes, we're actively looking into additional opportunities for spending that. Ian Macpherson - Simmons & Co., Inc.: Alright, that's all I have for now. Thank you.

Thanks Ian.

And we will take our next question coming from Robin Shoemaker with Bear Stearns. Robin Shoemaker - Bear Stearns & Co.: Yes, thank you. Good morning. I want to ask about your comment that more jackups will leave the Gulf of Mexico and perhaps tighten up that market. Does that include... do you have a clear visibility on some opportunities for your own premium jackups and what kind of markets are we talking about where those opportunities exist?

Yes they are... nothing new from what we've talked about on previous calls. We believe there is going to be additional opportunities down in Pemex in Mexico, some additional opportunities in Petrobras down in Brazil and there are some additional opportunities down in Venezuela. We already know that couple of rigs gone over to work for Saudi Aramco, they are coming out of Gulf. So yes, we do have some clear visibility, if no one is there this opportunity that will be filled by rigs coming out of Gulf of Mexico. So there is our fleet or someone else's fleet that has been termed [ph] and clearly there will be more migration in the Gulf of Mexico. Robin Shoemaker - Bear Stearns & Co.: And is your rig in Mexico which has this indexed rate after December of this year, is that the kind of contract term that they are looking at for future work or future rigs that you might put to work with Pemex?

This is Bill again, we don't know. Pemex hasn't issued a tender for new rigs for some time. That index was a new feature that they introduced last year. Whether it would be included in future tenders or not, I think we have to wait until the tenders come out. Robin Shoemaker - Bear Stearns & Co.: Okay. Yes, I guess that's really all I need for now, thank you.

Thanks Robin.

And we will move on to our next caller, coming from Roger Read with Natexis Bleichroeder.

Yes, good morning gentlemen. Just I guess following up on Robin's question in the Gulf of Mexico of your fleet and clearly you guys want to maintain a long-term position in the Gulf, how many of your rigs do you think you would be likely to move over that would not require a significant capital investment in terms of accommodations or equipment or something like that?

That's a really difficult question to answer, because it's been what the markets are going through, so and there is no easy answer to that. So if you are talking to Saudi Aramco, you are talking about one answer, if you are talking to Venezuela or Mexico that's a different answer. So any time you move rigs into another market, there is going to be some capital requirements just because of customer-specific issues. We have already upgraded ENSCO 83 last year for Middle East service. So that really wouldn't require much additional CapEx. So it's all across the board depending on the opportunity.

Okay, well may be on other way to ask that question, are there any rigs you think would be highly unlikely to relocate from the Gulf of Mexico, within your own fleet?

Yes, I know. No, the answer is really no. But...

Okay, and then my other question, you mentioned earlier on the call the operating cost being front-end loaded in the first part of 2008. You got the ENSCO or I guess the first of your deepwater rigs 8500 coming out middle of the year. We are already seeing costs on that rig. Is that one of the reasons you don't see an uptick in the back half of the year or is it simply that the upgrade expenditures in yard are going to be essentially equivalent to the cost of that rig coming on line?

Before Jay answers that question, we'll just go back to that last question. As we look at opportunities to move these rigs, obviously the ones we look at moving first are the ones that require the least CapEx. We spend a lot of money on getting these rigs ready to go so. We do it in inverse order of capital requirements, so...

Yes, Roger I think with respect to your question on operating expenses, the front-end loaded comment really reflects as I said work that needs to be down in terms of just routine inspections and some normal repair and maintenance work that in terms of gets sort of stacked up in the first half of the year. There's no costs that are... of any appreciable amount on any of the 8500 rigs that are hitting the P&L, until that rig goes to work late in the fourth quarter.

Okay, thank you.

You're welcome.

[Operator Instructions]. We'll move now to Mr. David Smith with J.P. Morgan. Please go ahead.

Hi, Good morning. Back to Pemex, wondering if you see a demand and may be an opportunity to help Pemex high grade the jackup fleet. So may be even if we don't see an absolute increase in numbers, may be we see and increase in ISDs [ph] that come over from the U.S side?

We would love that opportunity.

I think we heard another contractor talk about, maybe Pemex's desire to high grade that fleet. It seems like you guys might be a good set there?

Yes, we clearly would, given that we have one of the larger fleets in Gulf of Mexico and as I indicated, we would like additional work opportunities there. I know on a couple of our competitors' calls, they talked about this meeting we had with Pemex last month, and we've heard contractors community. It's just... it really is very difficult to make any conclusions for what their program looks like and whether they are doing high grade rigs. I know there's some speculation about moving away map [ph] rigs, and it's really difficult to give you all any color because quite frankly, it's difficult for us to get a clear picture of it.

Okay. Do you have an internal estimate of how many jackups under construction currently would be suitable for our North Sea work?

Paul do you know?

Yes, this is Paul Mars. There is some rigs moving into the North Sea this year, newbuild rigs. But primarily they are limited to the Maersk newbuilds and the Noble newbuilds. The rest of the rigs are the modified Bs or the BMC 3750, and they are more suited to other areas of the world than the North Sea.

Okay. And lastly, wondering if you are seeing operators becoming maybe more discerning on jackup quality with the incoming supply of newbuilds? Or is the availability and then price, still the dominant factor?

I think it varies by operators. There are some operators who have a very firm preferential requirement for rigs operated by established contractors; others, who have a real aversion to taking a rig straight out of the shipyard. There are still others who, I think, do or driven primarily or entirely by price and availability. So it covers the spectrum, that there is certainly are that group of operators out there who have a strong preference or in some cases an absolute requirement for existing rigs operated by established contractors.

Okay, and just kind of select, for the last couple of years may be after type [ph] or quality wasn't... couldn't really be filled in and availability was the primary driver. And now with neither of those coming on, look at... we had a comment that newbuilds will be absorbed into the fleet and my question is to what expense of the older jackups? And I think about the kind of cyclical dollars you put into your fleet, to the point where maybe the average age of your fleet is misleading and I was just thinking about that going forward, if maybe you guys have the utilization, and maybe they are at advantage as your fleet quality catch on some availability?

Well I think we always have.

Alright, thank you.

And we'll move on now to our next caller, Mr. Pierre Conner with Capital One Southcoast.

That was me. Good morning gentleman and good results. Maybe first for Jay, you spoke of the amount of the shipyard time for enhancer work and of course not counting other maintenance work. Based on plan surveys, so you have a feel for how much actual other service survey work we would have in 2008?

I don't have the specific numbers with me Pierre, but I mean the guidance we gave you on operating costs, I think should give you a pretty good sense of it in terms of, if you look at how much we're spending in the first quarter and sort of the bump up quarter-over-quarter. Other than some general cost inflation in the first quarter, most of that is really driven by repair and maintenance increases quarter-over-quarter.

Right. May be the other way to look at it is that, we would expect similar amount of regular survey work in 08 as in 07, that shouldn't be changed to see enhancement work is decreasing dramatically.

Well I think, it is happening in 07 is just because of the way the dates fall. We've got more inspections going than we had last year and that's just a function of dates.

Some of that, alright.

Right.

The other one is for Dan and it's just this macro question again in a different way to ask it, I supposed but you've got the significant amount of contract cover internationally and you alluded to the likelihood of exercise of the options are out there. My question is, are we... that's been driven by customers, why are customers contracting for such long term if we have 2008 some 30 plus deliveries and another 30 in 09. Why are you seeing that you believe?

Pierre, you broke up a little bit there. I think I missed you.

Sorry Dan. I guess, I was asking about your contract cover in 08 internationally and the expectation for exercising options as compared to the significant amount of rigs being delivered in 08 and 09. So your perspective on why the customers are driving that term contracting still?

Pierre, as you know, in the international markets as opposed to the Gulf of Mexico, these projects... the programs tend to be project-driven our program-driven and have a longer duration and not one well program. So the customers who want to commit to the longer term, because they have a longer-term view of the market in their plans. In the Gulf of Mexico, as you know, the operators tend to go well to well. So it's really, it's being driven by those dynamics.

But you're not seeing the additional rig newbuild, inspector builders et cetera coming very competitive on those term contracts than if you're able to maintain the contract cover for next year?

Pierre, its Paul Mars. We've seen a little bit of that in India. But you know there is still a lot of international operators are wary of taking on some newbuilds, particularly from new start up companies and we actually have one operator who was penalizing these rigs by 25%, as compared to existing rigs. So there is still a desire to have an existing rig from an established contractor.

Yes. Okay, that's what I was looking for. Then, one last one on the floater expansion potential; have you had a chance to take a look at what a 8504 would cost and any availability of slot timing, where you're so inclined to do something of that?

Yes Pierre, we are keeping track, up track of that. So if we were to build another one, than probably what we're going to do is stage as we think [ph] that is nine months interval. So it's probably nine months later than delivery of 8503 and cost wise I don't really have a firm answer for you, but because it goes up everyday, so somewhere... the ideal speculation. I think you can interpolate the cost increases and be directionally correct.

The trend we've seen on the first group.

Yes.

Yes okay. Very good gentlemen, I'll turn it back and lets some others in.

And our next question comes from Geoff Kieburtz of Citigroup.

Thanks. Just a couple of clarifications; on your comment about 12 to 13% increase in OpEx for 08, what do you have embedded in there in terms of your underlying inflation, let's say OpEx per operating day?

Well, I think the way I'd answer you question Jeff is in terms of inflationary pressures we're looking on average, probably about 7 to 8% on labor and a similar amount in other areas. And as I said in my comments, a fair amount of that increase is also driven by just more days this year versus last year.

Right. And do you have an estimate of how much that core inflation was in 07?

It was a little bit higher than that. I think it was probably closer to 10%.

Okay. And in terms of the shipyard days that you'd mentioned in the release, the 442 and 491 in 07 and 06, were those just enhancement project days or were those total shipyard days?

That was on a similar basis that was for enhancements.

Okay. And the third question, I've forgotten, so I'll pass it back.

Just a couple of comments about your questions. We don't... there's lot of wage pressure out there, so we really caution people in this, on our operation....

Alright. I did remember the third question.

Okay.

You talked about an 8504. Would you contemplate initiating an 8504 before 8503 has a contract?

Well, what we've been doing is, we think we have a pretty good understanding of what that marketplace is and the opportunities we have for 8503. So, as we get closer to being comfortable with the opportunities of 8503, yes. The answer is yes, if it would delay us and if we thought it would hurt us from a delivery standpoint or from a cost standpoint. So, yes, there are whole lot of factors filling there.

Okay, great. Thank you.

We do continue to be pleasantly surprised at the robust market for the deepwater equipment and the interest from our customers in the 8500 series rigs. So we have a lot of confidence in that.

And we move on the next question coming from Mr. Thomas Curran with Wachovia.

Good morning guys. Last week, an Employment Tribunal in Aberdeen ruled that offshore workers are entitled to at least 14 days of paid leave per annum under the EU Working Time Directive. Could you provide some color on what you expect to happen next and the ultimate potential impact on your cost in NRC?

This is Paul Mars. It's really early days. I mean, that tribunal was just held last week and we are just waiting on some interpretation of it. So it's a little too early to answer that question right now.

From expense impact, we have cost escalation clauses that protect us from most of... any additional cost for the Working Time Directive.

And would that include even some of the worst case scenarios that you guys have considered?

I don't know if there....

What do you mean by worst case scenario?

I think we've got... that's one of the problems with the tribunal, is that it raises more questions than it answers. So, I am not sure there is any circumstance that we consider a worst case circumstance.

With respect to the costs, with our contracts and the cost adjustment clause we have in there, we would be able to recover the increase in cost. But the other issue is where do you get the people from? So, there is... it is a double-edged sword there.

The cost side and a real practical side, and that's... everyone is trying to get their hands around what the practicality of it is.

That's helpful, thank you. And, returning to Pemex, we've already heard that with at least some of its upcoming expected tenders, Pemex may want to include a provision that would give them an option to purchase the rig? Could you speak to what you have heard on that front? And should they do so, would you still be willing to bid if they offered a fair price to buy some of your older 250 or 300 foot IC rigs in the U.S Gulf?

Historically Pemex has come up with the number of ideas of things they'd like to do and from time-to-time they include the different provisions like that in their tenders. And if the market takes them up on it, well that's fine. If not, the tenders generally are allowed to lapse and they retender sometimes on different terms and conditions. I think ENSCO is a buyer not a seller of rigs and you always got to evaluate the economics of any opportunity. But as a general philosophy, I do not believe, we'd been inclined to offer our rigs for sale.

Okay, that's helpful. Thank you. And then, lastly on the potential for another 8500 series order. Just remind me and I'm sorry if I missed this, would you be willing to do that speculatively or would you insist upon a contract and if so, are you currently in that any discussions?

Well I think we answered that just three months ago. We've build 8502 and 8503 without contracts when we announced those. So, the last two we have build that contracts.

Okay, great. Well thanks so much and I'll turn it back, great quarter.

I'll just to speak a little bit more of that I mean, the delivery of these deepwater rigs is really... takes a long time almost three years to get deliveries of equipments. So you have to make a business judgment, whether you want to get a contract on front-end or wait for the market. No question in my mind if you do get contracts in advance. But we felt the last two times we've committed that the market would have been moving north, which it has. And we would have given up substantial economics on the front-end in [inaudible] investment for our shareholders. So really it depends on our evaluation of the marketplace and our confidence in the marketplace, how we would play that. If we did it differently with the first two rigs, we get contracts in advance, so business call [ph].

[Operator Instructions]. We'll move on now to Mr. Mike Drickamer with Morgan Keegan. Michael Drickamer - Morgan Keegan & Company, Inc.: Good morning guys. Dan you commented earlier about your preference for growth will be in the deepwater segment potentially building additional rigs. On the jackup side there, are you seeing any speculars becoming more motivated sellers at this point and if so, are you a willing buyer?

There the prices have come down. The stock prices have come down for some of these companies. I don't think the asking prices have come down for any of these companies. So yes, we continue to evaluate those opportunities. We are not... we've never said we were going to foreclose building out jackup fleet and acquiring additional assets, but the callers just didn't just make out. The asking prices did make a lot of sense to us. You said stock prices have come down. Our enquiries into those markets, the asking prices haven't come down. So yes we will continue to evaluate that and we would not move closer... Michael Drickamer - Morgan Keegan & Company, Inc.: Okay, hot it. That's my question.

And Mr. Rabun, it appears there are no further questions. We will turn the call back over to you.

Thank you. I'd like to thank everyone again for joining us today. We look forward to talking to you again, Thursday, April 24th for our First Quarter 2008 Conference Call. Angelina, I'll turn it back to you.

Thank you. Once again ladies and gentlemen, that does conclude today's program. We appreciate your participation. Have a wonderful day.