ROWAN COMPANIES INC, S-3, 1995-09-25

ROWAN COMPANIES INC
S-3, 1995-09-25
DRILLING OIL & GAS WELLS

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<PAGE> 1

AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON SEPTEMBER 22, 1995
REGISTRATION NO. 33-
================================================================================

SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549

----------------

FORM S-3
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933

----------------

ROWAN COMPANIES, INC.
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)

DELAWARE 5450 TRANSCO TOWER 75-0759420
(STATE OR OTHER JURISDICTION OF 2800 POST OAK BOULEVARD (I.R.S. EMPLOYER
INCORPORATION OR ORGANIZATION) HOUSTON, TEXAS 77056-6196 IDENTIFICATION
(713) 621-7800 NUMBER.)
(ADDRESS, INCLUDING ZIP CODE,
AND TELEPHONE NUMBER, INCLUDING AREA
CODE, OF REGISTRANT'S PRINCIPAL
EXECUTIVE OFFICES)

C.R. PALMER
5450 TRANSCO TOWER
2800 POST OAK BOULEVARD
HOUSTON, TEXAS 77056-6196
(713) 621-7800
(NAME, ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE NUMBER,
INCLUDING AREA CODE, OF AGENT FOR SERVICE)

APPROXIMATE DATE OF PROPOSED SALE TO THE PUBLIC:

From time to time after the effective date of this Registration
Statement, as determined by the Selling Stockholders in light of market
conditions

If the only securities being registered on this Form are being offered
pursuant to dividend or interest reinvestment plans, please check the following
box.[ ]

If any of the securities being registered on this Form are to be offered
on a delayed or continuous basis pursuant to Rule 415 under the Securities Act
of 1933, as amended, other than securities offered only in connection with
dividend or interest reinvestment plans, please check the following box. [x]

CALCULATION OF REGISTRATION FEE

<TABLE>
<CAPTION>
=========================================================================================================================
Proposed Maximum Proposed Maximum
Amount Offering Price Aggregate Offering Amount of
Title of Securities to be Registered to be Registered(1) Per Share(2) Price(2) Registration Fee
- -------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Common Stock, par value $.125 per
share 1,525,926 $8.0625 $12,302,778 $4,242.34
=========================================================================================================================
</TABLE>

(1) There are also registered hereunder such indeterminate number of
additional shares of Common Stock, par value $.125 per share, of the
Registrant as may be issuable upon conversion of the Series III Preferred
Stock, par value $1.00 per share, of the Registrant pursuant to the
anti-dilution and similar provisions of such Series III Preferred Stock.
(2) Estimated pursuant to Regulation 457(c) solely for the purpose of
calculating the registration fee based on the average of the high and low
prices reported on the New York Stock Exchange as of September 20, 1995.

The Registrant hereby amends this Registration Statement on such date or dates
as may be necessary to delay its effective date until the registrant shall file
a further amendment which specifically states that this Registration Statement
shall thereafter become effective in accordance with Section 8(a) of the
Securities Act of 1933 or until the Registration Statement shall become
effective on such date as the Commission, acting pursuant to said Section 8(a),
may determine.

================================================================================
<PAGE> 2

CROSS REFERENCE SHEET

<TABLE>
<CAPTION>
Information required
S-3 S-K to be included in Location
Item No. Item No. the Prospectus in Prospectus
-------- -------- -------------- -------------

<S> <C> <C> <C>
Item 1 501(C) Cover page Cover

Item 2 502 Inside Front; Outside Back Cover Page Inside Front; Outside Back
Cover Page

502(a) Available Information

502(c) Incorporation by Reference Inside Front; Outside Back
Cover Page
502(e) Dealer Representation *

Item 3 503(c) Summary *

503(b) Address, Telephone Number Inside Front Cover

503(c) Risk Factors Certain Factors

Item 4 504 Use of Proceeds *

Item 5 505 Determination of Offering Price *

Item 6 506 Dilution *

Item 7 507 Selling Securities Holders Selling Stockholders

Item 8 508 Plan of Distribution *

Item 9 202 Description of Securities Description of the Securities

Item 10 509 Interests of Named Experts and Counsel Legal Opinions; Experts

Item 11 -- Material changes Incorporation of certain
Documents by Reference;
Certain Factors

Item 12 -- Incorporation of certain Documents by Incorporation of certain
Reference Documents by Reference;
Certain Factors

Item 13 SEC Policy on Indemnification Indemnification of Directors
and Officers

----------------
* Not Applciable
</TABLE>

<PAGE> 3

PROSPECTUS

ROWAN COMPANIES, INC.

1,525,926 SHARES

COMMON STOCK, $.125 PAR VALUE

This Prospectus relates to the sale of up to 1,525,926 shares of the
common stock, $.125 par value per share ("Common Stock"), of Rowan Companies,
Inc., a Delaware corporation (the "Company"), to be offered and sold by any
selling stockholder named herein (each a "Selling Stockholder" and
collectively, the "Selling Stockholders"). It is anticipated that offers of
such shares of Common Stock will be made on the New York Stock Exchange at
prevailing prices on said exchange on the date of sale. See "Selling
Stockholders." The Company will not receive any of the proceeds of the sale of
the Common Stock offered hereby. Investors should be aware of certain factors
in connection with this offering. See "Certain Factors."

THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION NOR HAS THE COMMISSION PASSED UPON THE ACCURACY OR ADEQUACY
OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.

THE DATE OF THIS PROSPECTUS IS SEPTEMBER 22, 1995

<PAGE> 4

AVAILABLE INFORMATION

Rowan Companies, Inc. (together with its subsidiaries, when
applicable, the "Company" or "Rowan") is subject to the informational
requirements of the Securities Exchange Act of 1934, as amended (the "Exchange
Act"), and in accordance therewith files reports, proxy statements and other
information with the Securities and Exchange Commission (the "Commission").
Reports, proxy statements and other information filed by the Company may be
inspected and copied at the public reference facilities maintained by the
Commission at 450 Fifth Street, N.W., Washington, D.C. 20549 and at the
Commission's regional offices located at The Citicorp Center, 500 West Madison
Street (Suite 1400), Chicago, Illinois 60661, and 7 World Trade Center, Suite
1300, New York, New York 10048. Copies of such material also may be obtained
from the Public Reference Section of the Commission at 450 Fifth Street, N.W.,
Washington, D.C. 20549, at prescribed rates. In addition, such material also
may be inspected and copied at the offices of the New York Stock Exchange,
Inc., 20 Broad Street, New York, New York 10005 and the Pacific Stock Exchange
Incorporated, 301 Pine Street, San Francisco, California 94104, on which
exchanges the Common Stock of the Company is listed.

The Company has filed with the Commission a registration statement on
Form S-3 (herein, together with all amendments and exhibits, referred to as the
"Registration Statement") under the Securities Act of 1933, as amended (the
"Securities Act"). This Prospectus, which forms a part of the Registration
Statement, does not contain all of the information set forth in the
Registration Statement, certain parts of which have been omitted in accordance
with the rules and regulations of the Commission. Statements contained herein
concerning provisions of certain documents are not necessarily complete and, in
each instance, reference is made to the copy of such document filed as an
exhibit to the Registration Statement or otherwise filed with the Commission.
Each such statement is qualified in its entirety by such reference. For
further information, reference is hereby made to the Registration Statement.

INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE

The Company hereby incorporates into this Prospectus by reference the
following documents filed with the Commission (File No. 1-5491) pursuant to the
Exchange Act: (i) the Company's Annual Report on Form 10-K for the fiscal year
ended December 31, 1994 (the "Form 10-K"); (ii) the Company's Quarterly Reports
on Form 10-Q for the quarters ended March 31, 1995 and June 30, 1995, (iii) the
description of the Company's common stock, $.125 par value (the "Common
Stock"), contained in the Company's Registration Statement on Form 8-A, as
amended, relating thereto and (iv) the description of the Company's Preferred
Stock Purchase Rights contained in the Company's Registration Statement on Form
8-A, as amended, relating thereto.

All documents filed by the Company pursuant to Section 13(a), 13(c),
14 or 15(d) of the Exchange Act subsequent to the date of this Prospectus and
prior to the termination of the offering made hereby shall be deemed to be
incorporated by reference in this Prospectus and to be a part hereof from the
date of filing of such documents. Any statement contained herein or in a
document incorporated or deemed to be incorporated herein by reference shall be
deemed to be modified or superseded for purposes of the Registration Statement
and this Prospectus to the extent that a statement contained herein or in any
subsequently filed document which also is, or is deemed to be, incorporated by
reference herein modifies or supersedes such statement. Any such statement so
modified or superseded shall not be deemed, except as so modified or
superseded, to constitute a part of the Registration Statement or this
Prospectus.

The Company will provide, without charge, to each person to whom a
copy of this Prospectus is delivered, upon the written or oral request of any
such person, a copy of any or all of the documents or information which are
incorporated herein by reference, other than exhibits to such documents (unless
such exhibits are specifically incorporated by reference into such documents).
Requests should be directed to Rowan Companies, Inc., 5450 Transco Tower, 2800
Post Oak Boulevard, Houston, Texas 77056-6196, Attention: Corporate
Secretary, telephone: (713) 621-7800.

-2-
<PAGE> 5

SELLING STOCKHOLDERS

This Prospectus relates to offers and sales by Selling Stockholders of
the shares of Common Stock received or to be received by them upon conversion
of shares of Series III Preferred Stock, par value $1.00 per share, of the
Company ("Series III Preferred Stock") held or to be held by them. The Selling
Stockholders currently hold an aggregate of $10,300,000 face amount of Series
III Floating Rate Subordinated Convertible Debentures due 2004 (the "Series III
Debentures") which were purchased from the Company at par pursuant to the terms
of the Company's 1986 Convertible Debenture Incentive Plan, as amended (the
"Plan"), previously approved by the Company's stockholders. Without taking into
account antidilution adjustments, the outstanding Series III Debentures are
convertible, in specified amounts and intervals until November 30, 2004, into
an aggregate of 10,300 shares of Series III Preferred Stock, which possess
nominal rights other than the right to convert into an aggregate of 1,525,926
shares of Common Stock at an initial conversion price of $6.75 per share (the
closing price of the Common Stock on the date prior to the date the related
debentures were issued). On November 30, 1995, $2,350,000 of the Series III
Debentures will be convertible into 2,350 shares of Series III Preferred Stock,
and such Series III Preferred Stock, upon issuance, will be immediately
convertible into 348,148 shares of Common Stock.

The Company has been advised by the Selling Stockholders that they
intend to sell any shares of Common Stock covered hereby from time to time on
the New York Stock Exchange. Any such sales will be made at prices prevailing
on such exchange on the date of sale. Any Selling Stockholder, however, may
also make privately negotiated sales directly or through a broker or brokers.

The following table sets forth the names and positions with the Company
of the Selling Stockholders, the number of shares of Common Stock beneficially
owned by each of them as of September 22, 1995 and the number of shares of
Common Stock covered by this Prospectus. Because all Debentures owned by the
Selling Stockholders are not immediately convertible, all of the shares of
Common Stock into which such Debentures ultimately may be converted are not
included in the number of shares of Common Stock shown as beneficially owned by
each such Selling Stockholder.

<TABLE>
<CAPTION>
Number of Amount to be Held
Number of Shares After Offering(3)
Shares Covered -------------------------------
Selling Position with Beneficially by this Number
Stockholder the Company(1) Owned(2) Prospectus(3) of Shares(2) Percentage
- ---------------- ------------------------ --------------- --------------- --------------- -----------
<S> <C> <C> <C> <C> <C>
C. R. Palmer Chairman of the Board, 588,845 711,111 1,299,956 1.5%
President, Chief
Executive Officer

R. G. Croyle Executive Vice President 71,978(5) 534,941 234,941(5) (4) (5)

D. F. McNease Senior Vice President - 19,755 162,963 182,718 (4)
Drilling

E. E. Thiele Senior Vice President - 65,750 162,963 228,713 (4)
Finance, Administration
and Treasurer

</TABLE>

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<PAGE> 6
<TABLE>
<CAPTION>
Number of Amount to be Held
Number of Shares After Offering(3)
Shares Covered -------------------------------
Selling Position with Beneficially by this Number
Stockholder the Company(1) Owned(2) Prospectus(3) of Shares(2) Percentage
- ---------------- ------------------------ --------------- --------------- --------------- -----------
<S> <C> <C> <C> <C> <C>
J. E. Beckman Vice President - -0- 162,963 162,963 (4)
Manufacturing;
President and Chief
Executive Officer of
LeTourneau, Inc.

C. W. Johnson Vice President - 16,572 162,963 179,535 (4)
Aviation; President and
Chief Operating Officer
of Era Aviation, Inc.

</TABLE>
__________________________
(1) Each of the Selling Stockholders continuously served in the positions
shown herein for more than the past three years except as follows: Mr.
Croyle served as Vice President, Legal until October 1993; Mr. McNease
served as Vice President, Drilling until October 1993; Mr. Thiele served in
the position of Vice President, Finance, Administration and Treasurer from
January 1994 to April 1994 and prior to January 1994, he served as Vice
President, Finance and Administration; Mr. Beckman served in the position
of President and Chief Executive Officer of LeTourneau, Inc., a subsidiary
of the Company, from February 1994 to April 1994 and prior to February
1994, he served as President of Marathon LeTourneau Company, a company
whose net assets were purchased by LeTourneau, Inc. in February 1994; and
Mr. Johnson served in the position of President and Chief Operating
Officer of Era Aviation, Inc., a subsidiary of the Company, from December
1993 to April 1994 and prior to December 1993, he served as Executive Vice
President of Era.

(2) Included herein are shares of Common Stock that may be acquired within 60
days of September 22, 1995 through (i) the conversion of Series I Floating
Rate Convertible Subordinated Debentures (the "Series I Debentures") and
the Series II Floating Rate Convertible Subordinated Debenture (the
"Series II Debenture") and (ii) the exercise of Nonqualified Stock Options
(the "Options") as follows: C. R. Palmer - Series II Debenture and
Options - 400,000 shares and 182,500 shares, respectively; R. G. Croyle -
Series I Debentures and Options - 43,478 shares and 27,500 shares,
respectively; and D. F. McNease - Options - 18,750 shares.

(3) Assumes that each Selling Stockholder converts all of his Series III
Debentures into Series III Preferred Stock, converts all such Series III
Preferred Stock into Common Stock, and intends to sell all such Common
Stock. As to the timing of the conversions, the number of shares of Common
Stock which would result, if each of the four portions of such Series III
Debentures were to be converted by the Selling Stockholders at the earliest
permissible dates, are as follows: C. R. Palmer - 162,963, 177,778,
177,778 and 192,592 shares on November 30, 1995, November 30, 1996,
November 30, 1997 and November 30, 1998, respectively; R. G. Croyle, D. F.
McNease, E. E. Thiele, J. E. Beckman and C. W. Johnson - 37,037,
37,037, 44,444 and 44,445 shares on November 30, 1995, November 30, 1996,
November 30, 1997 and November 30, 1998, respectively.

(4) Less than one percent of the shares outstanding as of September 22, 1995
including the shares of Common Stock to be received by the Selling
Stockholders upon conversion of the Debentures.

(5) Includes 1,000 shares owned by Mr. Croyle's children. Mr. Croyle disclaims
beneficial ownership of such shares.

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<PAGE> 7

CERTAIN FACTORS

Prospective purchasers should consider carefully the following matters,
as well as the information contained elsewhere in this Prospectus and
incorporated herein by reference.

RELIANCE ON OIL AND GAS INDUSTRY

The Company's drilling and aviation operations are both dependent upon
the condition of the oil and gas industry, in particular upon the level of
offshore drilling activity. Despite occasional improvements, the market for
offshore contract drilling and related services has been depressed for over a
decade.

An improvement in natural gas prices strengthened utilization and day
rates in the Gulf of Mexico throughout most of 1994. However, natural gas
prices began a downward trend in late 1994 which continued through the first
few months of 1995 thereby softening offshore day rates. By mid-year 1995,
Gulf of Mexico day rates began to strengthen even though soft energy prices
persisted. The North Sea drilling market, on the other hand, experienced weak
drilling activity and day rates throughout 1994 due to energy companies
downsizing their drilling programs. By mid-year 1995, the North Sea market had
begun to show improvement both in terms of utilization and day rates. It is
not possible to predict whether the recent upturns in both the Gulf of Mexico
and North Sea markets represent the beginning of long-term trends or merely a
repeat of short-term cycles. Drilling revenues represented 56% and 52% of the
Company's consolidated revenues for 1994 and the first half of 1995,
respectively.

Although the Company has continued to diversify its aircraft services
toward non-energy markets, e.g., forest fire control, commuter airline
services, flightseeing and medivac services, the results of its aviation
division are still heavily influenced by oil and natural gas exploration and
production, principally in the Gulf of Mexico. Aviation revenues represented
22% and 18% of the Company's consolidated revenues for 1994 and the first half
of 1995, respectively.

With the exception of its marine rig construction and support
operations, the Company's manufacturing segment is not dependent upon the
condition of the oil and gas industry. The manufacturing segment was added in
1994 when the Company purchased through its wholly-owned subsidiary,
LeTourneau, Inc., the net assets of Marathon LeTourneau Company.

OPERATING LOSSES

The Company has incurred net losses in four of the last five years and
losses from operations in three of the last five years. For the first six
months of 1995, the Company experienced a loss from operations and a net loss.
If current market conditions deteriorate, any cash provided by operations in
1995 may not be sufficient to cover capital expenditures and debt service
during the year, but the Company believes that its other sources of funds,
including existing working capital, will be adequate to cover any such
requirements.

ADDITIONAL RISK OF TURNKEY DRILLING OPERATIONS

The Company has been providing drilling services on a turnkey basis
since mid 1992. In 1993, the first full year of operation, 33% of the
Company's drilling revenues were from this source. In 1994 and the first half
of 1995, the percentages had dropped to 26% and 18%, respectively. Turnkey
drilling contributed incremental operating profits of $9.7 million, $3.1
million and $61,000 in 1993, 1994 and the first half of 1995, respectively.

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<PAGE> 8

Under turnkey contracts, the Company's compensation is contingent on
successfully drilling to a specified depth and, under certain contracts,
completing the well. The turnkey drilling contractor is responsible for making
all critical decisions, whereas under day rate contracts ultimate control is
exercised by the operator. The amount of the Company's compensation is fixed
at the amount bid by the Company to drill the well. Thus, if operational
problems prevent performance, the Company will not be paid unless it chooses to
drill a new well at its own expense, and if unforeseen problems arise that
cause the cost of performance to exceed the turnkey price, the Company must
absorb the loss. In a day rate contract, those risks are retained by the
operator. Drilling deviated holes into high-pressure formations is a complex
process and problems frequently occur. The Company routinely budgets for
contingencies and believes that its experience and database on drilling
conditions in the Gulf of Mexico permit it to calculate drilling risks within
tolerable limits; there can be no assurance, however, that the cost of
contingencies will not exceed budgeted amounts. The Company carries insurance
against certain other risks associated with turnkey drilling operations.

Except for one drilling assignment in the North Sea, all of the
Company's offshore turnkey drilling to date has been in the Gulf of Mexico.
The Company may, however, conduct turnkey drilling operations in other areas in
the future. In cases where the Company accepts an interest in net cash
proceeds of production as its sole source of payment, the Company also assumes
the risk that the oil and gas production will be insufficient to pay the price
of drilling. To date, the Company has attempted to mitigate this risk by
entering into multi-well contracts providing that proceeds of production from
all of the wells under a contract will be available for the payment of the
price of each individual well drilled under that contract.

INTENSE COMPETITION

All three of the Company's business segments are subject to intense
competition in each of the markets they serve. A few of the Company's
competitors possess greater financial resources than the Company and, in the
case of drilling, many of the competitors have been substantially relieved of
debt burdens by bankruptcy courts.

In the case of drilling operations, there has been an oversupply of
rigs for more than a decade, although availability has tightened in various
geographical markets from time to time. The Company believes that competition
for drilling contracts in non-niche markets will continue to be intense for the
foreseeable future.

Because the Company is a relatively new entrant in the business of
providing offshore platform and removal services, many of the Company's
competitors have the advantages of having offered these services for longer
periods of time, which include the benefits of established technological
know-how and more extensive customer bases. While competition can be expected
to be intense, the Company is the only provider of such services to operate a
crane from a jack-up rig, as opposed to a barge, a feature that gives the
Company an operating advantage under adverse weather conditions.

The Company's aviation and manufacturing operations also face vigorous
competition in each of the markets in which they compete, typically against
more than one competitor. In many instances, such competitors have
significantly larger market shares.

OPERATIONAL HAZARDS

The operations of the Company are subject to many hazards. In the
drilling business, inherent hazards include blowouts and well fires, which
could cause personal injury, suspend drilling operations, seriously damage or
destroy the equipment involved and cause substantial damage to producing
formations and the surrounding areas. Offshore drilling operations and
platform removal and installation operations are also subject to the hazards
incident to marine operations, either on site or while under tow, such as
capsizing, collision or grounding. Raising and lowering the legs of jack-up
rigs into the ocean floor and ballasting

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<PAGE> 9
semi-submersible units require skillful handling to avoid capsizing or other
serious damage. The process of removing platforms and caissons using underwater
explosives involves substantial risks and requires a significant amount of skill
in order to confine the resulting destruction to the intended areas.

Under turnkey contracts, the Company is normally responsible for
certain risks that would generally be assumed by the customer under day rate
contracts. These risks include liability for pollution resulting from a
blowout or uncontrolled flow from the well bore, an underground blowout, the
cost of controlling a wild well and the expense to redrill a well that has
blown out. The Company carries insurance to cover such risks in turnkey
operations, with coverage terms the Company believes are at least comparable to
industry practices. The Company's day rate contracts generally provide that
the Company is substantially indemnified by its customers against pollution
damages, except in certain cases of pollution emanating above the surface of
land or water from spills of pollutants, or in the case of pollutants emanating
from the Company's drilling rigs, but no assurance can be given regarding the
enforceability or availability of such indemnities.

Operation of helicopters and fixed-wing aircraft, particularly under
weather conditions prevailing in Alaska, is considered potentially hazardous,
although the Company conducts rigorous safety training programs to minimize
these hazards. The Company's manufacturing operations are considered
potentially hazardous as a result of the possibility of the air, land and
inland waters associated with its manufacturing processes becoming polluted and
the possibility of injury and/or death and property damage arising from the use
of its products.

The Company believes that it is adequately insured for physical damage
to its rigs and aircraft, and for marine and aviation liabilities and various
other types of exposures customarily encountered in providing the Company's
services, but carries no insurance against the loss of earnings. The Company
has experienced incidents related to many of the hazards discussed above,
including loss or damage to drilling rights due to blowout, fire and loss while
under tow and to aircraft due to accidents. Additionally, the Company believes
that it is adequately insured for risks arising from its manufacturing
operations, including product injury claims for personal injury and/or death,
property damage, loss of use of product, business interruption and necessary
legal expenses to defend itself from such claims. To date, the Company has not
suffered any material uninsured losses. Under current conditions, the Company
anticipates that its present insurance coverages will be maintained, but no
assurance can be given that insurance coverages will continue to be available
at rates considered reasonable, that self-insured amounts or deductibles will
not increase or that certain types of coverage will be available at any cost.

RISKS OF FOREIGN OPERATIONS

Foreign operations are subject to certain political, economic and other
uncertainties not encountered in domestic operations, including risks of
expropriation of equipment as well as expropriation of a particular energy
company's property and drilling rights, taxation policies, foreign exchange
restrictions, currency rate fluctuations and the general hazards associated
with foreign sovereignty over certain areas in which operations are conducted.
The Company attempts to minimize the risk of currency rate fluctuations by
generally denominating contract payment terms in United States dollars.

EXTENSIVE REGULATIONS

Many aspects of the operations of the Company's three business
segments are subject to government regulation, including those relating to:
equipping drilling vessels and aircraft; drilling practices; manufacturing
plant waste water discharges, solid waste disposal and air emissions; and the
level of taxation. In addition, various countries (including the United
States) have regulations relating to environmental protection and

-7-
<PAGE> 10
pollution control. Recent events have also increased the sensitivity of the
Company's operations to environmental matters. The Company may be liable for
damages resulting from pollution of offshore waters and, under United States
regulations, must establish financial responsibility in order to drill in such
waters.

The Company believes that it complies with all material legislation
and regulations affecting the operations in the drilling of oil and gas wells,
in controlling the discharge of wastes from drilling rigs and in controlling
waste water discharges, solid waste disposals and air emissions from its
manufacturing plant. Further legislation may be reasonably anticipated, but
their effects on the Company's operations cannot be predicted.

FLEET EXPANSION

In April 1995, the Company announced plans for the design and
construction of the jack-up rig, Rowan Gorilla V, an enhanced version of the
Company's Gorilla Class jack-up. The rig will be constructed at the Company's
Vicksburg, Mississippi shipyard and should be completed during the second
quarter of 1998 at an estimated cost of $135 million. The Company expects to
finance a significant portion of the construction cost and is currently
evaluating credit alternatives. The Company does not currently have any unused
lines of credit.

DIVIDEND RESTRICTION

Under the terms of its 11 7/8% Senior Notes, the Company is currently
prohibited from paying a cash dividend. The Company does not intend to pay
dividends on its Common Stock until it achieves and sustains a suitable level
of profitability.

AUTHORIZED PREFERRED STOCK

The Company's Certificate of Incorporation authorizes the issuance of
preferred stock with designations, rights and preferences determined by its
Board of Directors. Accordingly, the Company's Board of Directors is
empowered, without stockholder approval, to issue preferred stock with
dividend, liquidation, conversion, voting or other rights that could adversely
affect the voting power or other rights of the holders of the Common Stock. The
Company has reserved 1.5 million shares of preferred stock for possible
issuance in connection with its Stockholders Rights Agreement (the "Rights
Agreement") adopted by the Company on February 25, 1992 (see Description of
the Securities). In the event of issuance, the preferred stock could be used,
under certain circumstances, as a method of discouraging, delaying or
preventing a change in control of the Company. Although the Company has no
present intention to issue any shares of its preferred stock, there can be no
assurance that it will not do so in the future.

DESCRIPTION OF THE SECURITIES

As of July 31, 1995, the Company had 84,705,237 shares of Common Stock
outstanding. The Common Stock is listed on the New York Stock Exchange and the
Pacific Stock Exchange. Each share of Common Stock has attached to it rights
(the "Rights") to acquire on one one-hundredth of a share of Series A Junior
Preferred Stock of the Company pursuant to the Rights Agreement.

The Rights Agreement provides for the distribution to the Company's
stockholders of one Right for each outstanding share of Common Stock. Each
Right entitles the holder thereof to purchase from the Company one
one-hundredth of a share of new Series A Junior Preferred Stock of the Company
at an exercise price of $30.00. In addition, under certain circumstances, each
Right will entitle the holder to purchase securities of the Company or an
acquiring entity at 1/2 market value. The Rights

-8-
<PAGE> 11
are exercisable only if a person or group acquires 15% or more of the
Company's outstanding Common Stock or makes a tender offer for 30% or more of
the Company's outstanding Common Stock. The Rights will expire on February 25,
2002. The Company may generally redeem the Rights at a price of $.01 per Right
at any time until the 10th day following public announcement that a 15%
position has been acquired. One million five hundred thousand shares of the
Company's preferred stock have been designated Series A Junior Preferred Stock
and reserved for issuance upon exercise of the Rights. Additional information
concerning the terms of the Rights is contained in the Company's Registration
Statement on Form 8-A relating to the Rights, which Registration Statement has
been incorporated by reference herein.

INDEMNIFICATION OF DIRECTORS AND OFFICERS

The Company's Certificate of Incorporation and Bylaws contain
provisions permitted by the Delaware General Corporation Law (under which the
Company is organized) which, in general terms, provide that directors and
officers will be indemnified by the Company, to the full extent authorized or
permitted by law, for all losses that may be incurred by them in connection
with any claim or legal action in which they may become involved by reason of
their service as a director or officer of the Company. In addition, the
Company's Certificate of Incorporation contains provisions permitted by the
Delaware General Corporation Law which limit the monetary liability of
directors of the Company for certain breaches of their fiduciary duty of care.
Since July 14, 1995, the Company has carried directors' and officers' liability
insurance.

Insofar as indemnification for liabilities arising under the
Securities Act may be permitted to directors, officers and controlling persons
of the Company pursuant to the foregoing provisions, or otherwise, the Company
has been advised that in the opinion of the Securities and Exchange Commission
such indemnification is against public policy as expressed in the Securities
Act and is, therefore, unenforceable. In the event that a claim for
indemnification against such liabilities (other than the payment by the Company
of expenses incurred or paid by a director, officer or controlling person of
the Company in the successful defense of any action, suit or proceeding) is
asserted by such director, officer or controlling person in connection with the
securities being registered, the Company will, unless in the opinion of its
counsel the matter has been settled by controlling precedent, submit to a court
of appropriate jurisdiction the question whether such indemnification by it is
against public policy as expressed in the Securities Act and will be governed
by the final adjudication of such issue.

-9-
<PAGE> 12
LEGAL OPINIONS

Certain legal matters with respect to the Common Stock offered hereby
will be passed upon for the Company by Andrews & Kurth, L.L.P., 4200 Texas
Commerce Tower, Houston, Texas 77002.

EXPERTS

The consolidated financial statements of Rowan Companies, Inc. and
subsidiaries as of December 31, 1994 and 1993 and for each of the three years
in the period ended December 31, 1994 incorporated in this Prospectus by
reference from the Company's Annual Report on Form 10-K for the year ended
December 31, 1994 have been audited by Deloitte & Touche LLP, independent
auditors, as stated in their report, which is incorporated by reference, and
have been so incorporated in reliance upon the report of such firm given upon
their authority as experts in accounting and auditing.

-10-
<PAGE> 13
====================================== ======================================

NO PERSON HAS BEEN AUTHORIZED TO
GIVE ANY INFORMATION OR TO MAKE ANY
REPRESENTATIONS OTHER THAN THOSE
CONTAINED IN THIS PROSPECTUS AND, IF
GIVEN OR MADE, SUCH INFORMATION OR
REPRESENTATIONS MUST NOT BE RELIED
UPON AS HAVING BEEN AUTHORIZED. THIS
PROSPECTUS DOES NOT CONSTITUTE AN
OFFER TO SELL OR A SOLICITATION OF AN
OFFER TO BUY ANY SECURITIES OTHER THAN
THE COMMON STOCK TO WHICH IT RELATES
OR AN OFFER TO OR SOLICITATION OF ANY
PERSON IN ANY JURISDICTION IN WHICH ROWAN COMPANIES, INC.
SUCH OFFER OR SOLICITATION IS UNLAWFUL.
NEITHER DELIVERY OF THIS PROSPECTUS NOR
ANY SALE MADE HEREUNDER SHALL UNDER ANY
CIRCUMSTANCES IMPLY THAT INFORMATION
CONTAINED HEREIN IS CORRECT AS OF ANY
TIME SUBSEQUENT TO ITS DATE.

--------------------

TABLE OF CONTENTS 1,525,926 SHARES OF
COMMON STOCK
<TABLE>
<S> <C>
AVAILABLE INFORMATION . . . . . . . . 2
INCORPORATION OF CERTAIN
DOCUMENTS BY REFERENCE . . . . . 2
SELLING STOCKHOLDERS . . . . . . . . 3
CERTAIN FACTORS . . . . . . . . . . . 5
DESCRIPTION OF THE SECURITIES . . . . 8
INDEMNIFICATION OF DIRECTORS AND
OFFICERS . . . . . . . . . . . . 9
LEGAL OPINIONS . . . . . . . . . . . 10
EXPERTS . . . . . . . . . . . . . . 10
</TABLE>

-------------------- --------------------

PROSPECTUS

--------------------

====================================== ======================================
<PAGE> 14

PART II

INFORMATION REQUIRED IN THE REGISTRATION STATEMENT

ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION.

The expenses in connection with the issuance and distribution of the
Common Stock being registered are estimated as follows:

<TABLE>
<S> <C>
Registration fee . . . . . . . . . . . . . . . . . $ 4,242
Blue Sky fees and expenses . . . . . . . . . . . . 150
Legal fees and expenses . . . . . . . . . . . . . . 5,000
Accounting fees and expenses . . . . . . . . . . . 1,500
Printing and engraving expenses . . . . . . . . . . 500
Stock exchange listing fee . . . . . . . . . . . . 2,750
Miscellaneous expenses . . . . . . . . . . . . . . 358
----------
Total . . . . . . . . . . . . . . . . . . . . . $ 14,500
==========

</TABLE>
All of the expenses set forth above have been or will be paid by the
Company. Any additional expenses incurred in connection with the sale of
Common Stock offered hereby by Selling Stockholders will be paid by such
Selling Stockholders. It is impracticable to estimate any such additional
expenses.

ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS.

The statutes of Delaware generally give a corporation power to indemnify
any of its officers or directors against certain expenses, judgments, fines and
amounts paid in settlement in connection with certain actions, suits or
proceedings provided generally that such person acted in good faith and in a
manner he reasonably believed to be in or not opposed to the interests of the
corporation, and, with respect to any criminal action or proceeding, had no
reason to believe his conduct was unlawful. In addition, the statutes of
Delaware contain provisions to the general effect that any director shall, in
the performance of his duties, be fully protected in relying in good faith upon
the records of the corporation and upon such information, opinions, reports or
statements presented to the corporation by any of the corporation's officers or
employees, or committees of the board of directors, or by any other person as
to matters the member reasonably believes are within such other person's
professional or expert competence and who has been selected with reasonable
care by or on behalf of the corporation.

The Company's Certificate of Incorporation and Bylaws contain provisions
permitted by the Delaware General Corporation Law (under which the Company is
organized) which, in general terms, provide that directors and officers will be
indemnified by the Company, to the full extent authorized or permitted by law,
for all losses that may be incurred by them in connection with any claim or
legal action in which they may become involved by reason of their service as a
director or officer of the Company. In addition, the Company's Certificate of
Incorporation contains provisions permitted by the Delaware General Corporation
Law which limit the monetary liability of directors of the Company for certain
breaches of their fiduciary duty of care. Since July 14, 1995, the company has
carried directors' and officers' liability insurance.

See also the undertakings set out in response to Item 17.

II-1
<PAGE> 15
ITEM 16. EXHIBITS.

<TABLE>
<CAPTION>
Exhibit
Number Description
----------- -----------
<S> <C>
4.1 Restated Certificate of Incorporation of the Company, dated February 17, 1984, incorporated by
reference to Exhibit 3a to the Company's Form 10-K for the fiscal year ended December 31, 1983 (File
No. 1-5491); Exhibit 4.2 to the Company's Registration Statement on Form S-3 (Registration
No. 33-13544) and Exhibits 4a, 4b, 4c, 4d and 4e to the Company's Form 10-K for the fiscal year ended
December 31, 1994 (File No. 1-5491).

4.2 Bylaws of the Company, as amended, incorporated by reference to Exhibit 3 to the Company's Form 10-Q
For the quarter ended March 31, 1993 (File No. 1-5491).

4.3 Rights Agreement, as amended, as of February 25, 1992, between the Company and Citibank, N.A. as Rights
Agent, incorporated by reference to Exhibit 4g to the Company's Form 10-K for the fiscal year ended
December 31, 1994 (File No. 1-5491).

5 Opinion of Andrews & Kurth L.L.P., counsel for Rowan Companies, Inc.

23.1 Consent of Deloitte & Touche LLP.

23.2 Consent of Andrews & Kurth L.L.P. (included in Exhibit 5).

24 Powers of Attorney.

99.1 Rowan Companies, Inc. 1986 Convertible Debenture Incentive Plan, as amended, incorporated herein by
reference to Exhibit 10h to the Company's Annual Report on Form 10-K for the fiscal year ended December
31, 1994 (File No. 1-5491).
</TABLE>

ITEM 17. UNDERTAKINGS.

(a) The undersigned registrant hereby undertakes:

(1) To file, during any period in which offers or sales are
being made, a post-effective amendment to this
Registration Statement:

(i) To include any prospectus required by Section
10(a)(3) of the Securities Act;

(ii) To reflect in the prospectus any facts or events
arising after the effective date of the
Registration Statement (or the most recent
post-effective amendment thereof) which,
individually or in the aggregate, represent a
fundamental change in the information set forth
in the Registration Statement;

(iii) To include any material information with respect to
the plan of distribution not previously disclosed
in the Registration Statement or any material
change to such information in the Registration
Statement;

Provided, however, that paragraphs (a)(1)(i) and
(a)(1)(ii) do not apply if the information required to be
included in a post-effective amendment by those
paragraphs is contained in periodic reports filed by the
registrant pursuant to Section 13 or Section 15(d) of the
Exchange Act that are incorporated by reference in the
Registration Statement.

II-2
<PAGE> 16

(2) That, for the purpose of determining any liability under
the Securities Act, each such post-effective amendment
shall be deemed to be a new Registration Statement
relating to the securities offered therein, and the
offering of such securities at that time shall be deemed
to be the initial bona fide offering thereof.

(3) To remove from registration by means of a post-effective
amendment any of the securities being registered which
remain unsold at the termination of the offering.

(b) The undersigned registrant hereby undertakes that, for purposes
of determining any liability under the Securities Act, each filing of the
registrant's annual report pursuant to Section 13(a) or 15(d) of the Exchange
Act that is incorporated by reference in the Registration Statement shall be
deemed to be a new Registration Statement relating to the securities offered
therein, and the offering of such securities at that time shall be deemed to be
the initial bona fide offering thereof.

(c) Insofar as indemnification for liabilities arising under the
Securities Act may be permitted to directors, officers and controlling persons
of the registrant pursuant to the foregoing provisions, or otherwise, the
registrant has been advised that in the opinion of the Securities and Exchange
Commission such indemnification is against public policy as expressed in the
Securities Act and is, therefore, unenforceable. In the event that a claim for
indemnification against such liabilities (other than the payment by the
registrant of expenses incurred or paid by a director, officer or controlling
person of the registrant in the successful defense of any action, suit or
proceeding) is asserted by such director, officer or controlling person in
connection with the securities being registered, the registrant will, unless in
the opinion of its counsel the matter has been settled by controlling
precedent, submit to a court of appropriate jurisdiction the question whether
such indemnification by it is against public policy as expressed in the
Securities Act and will be governed by the final adjudication of such issue.

II-3
<PAGE> 17
SIGNATURES

Pursuant to the requirements of the Securities Act, Rowan Companies,
Inc. certifies that it has reasonable grounds to believe that it meets all of
the requirements for filing on Form S-3 and has duly caused this Registration
Statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in the City of Houston, State of Texas on September 22, 1995.

ROWAN COMPANIES, INC.
(Registrant)

By: /s/ C.R. PALMER
------------------------------------
C.R. Palmer,
Chairman of the Board, President and
Chief Executive Officer

Pursuant to the requirements of the Securities Act, this Registration
Statement has been signed below by the following persons in the capacities and
on the dates indicated.

<TABLE>
<CAPTION>
Signature Title Date
--------- ----- ----

<S> <C> <C>
/s/ C.R. PALMER Chairman of the Board, September 22, 1995
--------------------------- President, Chief Executive Officer
C.R. Palmer and Director

/s/ E.E. THIELE Senior Vice President, Finance, September 22, 1995
--------------------------- Administration and Treasurer
E.E. Thiele (Principal Financial Officer)

/s/ WILLIAM H. WELLS Controller (Principal Accounting September 22, 1995
--------------------------- Officer)
William H. Wells

RALPH E. BAILEY* Director September 22, 1995
---------------------------
Ralph E. Bailey

HENRY O. BOSWELL* Director September 22, 1995
---------------------------
Henry O. Boswell

H. E. LENTZ* Director September 22, 1995
---------------------------
H. E. Lentz

WILFRED P. SCHMOE* Director September 22, 1995
---------------------------
Wilfred P. Schmoe

</TABLE>

II-4

<PAGE> 18

<TABLE>
<S> <C> <C>
CHARLES P. SIESS, JR.* Director September 22, 1995
---------------------------
Charles P. Siess, Jr.

PETER SIMONIS* Director September 22, 1995
---------------------------
Peter Simonis

C. W. YEARGAIN* Director September 22, 1995
---------------------------
C. W. Yeargain

*By: /s/ C.R. PALMER
---------------------------
(C.R. Palmer as attorney-in-fact for
each of the persons indicated)
</TABLE>

II-5
<PAGE> 19

EXHIBIT INDEX

<TABLE>
<CAPTION>
Exhibit Description
------- -----------
<S> <C>
4.1 Restated Certificate of Incorporation of the Company, dated February 17,
1984, incorporated by reference to Exhibit 3a to the Company's Form 10-K for
the fiscal year ended December 31, 1983 (File No. 1-5491); Exhibit 4.2 to
the Company's Registration Statement on Form S-3 (Registration No. 33-13544)
and Exhibits 4a, 4b, 4c, 4d and 4e to the Company's Form 10-K for the fiscal
year ended December 31, 1994 (File No. 1-5491).

4.2 Bylaws of the Company, as amended, incorporated by reference to Exhibit 3 to
the Company's Form 10-Q For the quarter ended March 31, 1993 (File
No. 1-5491).

4.3 Rights Agreement, as amended, as of February 25, 1992, between the Company
and Citibank, N.A. as Rights Agent, incorporated by reference to Exhibit 4g
to the Company's Form 10-K for the fiscal year ended December 31, 1994 (File
No. 1-5491).

5 Opinion of Andrews & Kurth L.L.P., counsel for Rowan Companies, Inc.

23.1 Consent of Deloitte & Touche LLP.

23.2 Consent of Andrews & Kurth L.L.P. (included in Exhibit 5).

24 Powers of Attorney.

99.1 Rowan Companies, Inc. 1986 Convertible Debenture Incentive Plan, as amended,
incorporated by reference to Exhibit 10h to the Company's Annual Report on
Form 10-K for the fiscal year ended December 31, 1994 (File No. 1-5491).

</TABLE>

<PAGE> 1

EXHIBIT 5.1

September 22, 1995

Board of Directors
Rowan Companies, Inc.
5450 Transco Tower
2800 Post Oak Boulevard
Houston, Texas 77056-6196

Gentlemen:

We have acted as counsel to Rowan Companies, Inc., a Delaware
corporation (the "Company"), in connection with the proposed offering and sale
by certain selling stockholders of the Company, pursuant to a prospectus
forming a part of the Registration Statement on Form S-3, dated September 22,
1995 (the "Registration Statement"), of an aggregate of 1,525,926 shares (the
"Shares") of Common Stock, par value $.125 per share, of the Company, issuable
in connection with conversion of the Series III Convertible Subordinated
Debentures due 2004 (the "Series III Debentures") and Series III Convertible
Preferred Stock, par value $1.00 per share ("Series III Preferred Stock"), of
the Company issued under the Rowan Companies, Inc. 1986 Convertible Debenture
Incentive Plan, as amended (the "Plan").

As the basis for the opinions hereinafter expressed, we have
examined such statutes, regulations, corporate records and documents,
certificates of public officials and such other instruments as we have deemed
necessary for the purposes of the opinions contained herein. As to all matters
of fact material to such opinions, we have relied upon the representations of
officers of the Company. We have assumed the genuineness of all signatures,
the authenticity of all documents submitted to us as originals, and the
conformity with the original documents of all documents submitted to us as
copies.

Based upon the foregoing and having due regard for such legal
considerations as we deem relevant, we are of the opinion that the Shares have
been duly authorized, and that the Shares, after issuance in connection with
the conversion of the Series III Debentures and the Series III Preferred Stock
in accordance with the terms of the Plan and when sold in conformance with the
terms of the Plan and with the provisions of the Prospectus, will be validly
issued, fully paid and nonassessable.

We hereby consent to the inclusion of this opinion as an exhibit
to the Registration Statement.

Very truly yours,

ANDREWS & KURTH L.L.P.

<PAGE> 1

EXHIBIT 23.1

INDEPENDENT AUDITORS' CONSENT

We consent to the incorporation by reference in this Registration Statement of
Rowan Companies, Inc. on Form S-3 of our report dated March 3, 1995,
incorporated by reference in the Annual Report on Form 10-K of Rowan Companies,
Inc. for the year ended December 31, 1994 and to the reference to us under the
heading "Experts" in the Prospectus, which is a part of this Registration
Statement.

DELOITTE & TOUCHE LLP

Houston, Texas
September 22, 1995

<PAGE> 1

EXHIBIT 24

POWER OF ATTORNEY

ROWAN COMPANIES, INC.

KNOW ALL MEN BY THESE PRESENTS, that the undersigned director of
Rowan Companies, Inc. (the "Company") hereby constitutes and appoints C. R.
Palmer and E. E. Thiele, or either of them (with full power to each of them to
act alone), his true and lawful attorney-in-fact and agent, with full power of
substitution, for him and on his behalf and in his name, place and stead, in
any and all capacities, to sign, execute and file the Company's Registration
Statement under the Securities Act of 1933, as amended, and any or all
amendments (including, without limitation, post-effective amendments), with all
exhibits and any and all documents required to be filed with respect thereto,
with the Securities and Exchange Commission or any regulatory authority,
granting unto such attorneys-in-fact and agents, and each of them, full power
and authority to do and perform each and every act and thing requisite and
necessary to be done in and about the premises in order to effectuate the same,
as fully to all intents and purposes as he himself might or could do if
personally present, hereby ratifying and confirming all that such
attorneys-in-fact and agents, or any of them, or their substitute or
substitutes, may lawfully do or cause to be done.