Toggle SGML Header (+)


Section 1: 8-K (8-K)

Document


 
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549

FORM 8-K

CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

Date of Report (Date of earliest event reported): May 8, 2017

ATWOOD OCEANICS, INC.
(Exact name of registrant as specified in its charter)

Texas
1-13167
74-1611874
(State or other jurisdiction of incorporation)
(Commission File Number)
(I.R.S. Employer Identification No.)


15011 Katy Freeway, Suite 800, Houston, Texas
77094
(Address of principal executive offices)
(Zip Code)
 
 
 
 
 Registrant’s telephone number, including area code: (281) 749-7800
 
 
N/A
 
 
(Former Name, Former Address and Former Fiscal Year, if Changed Since Last Report)
 

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

¨ Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
¨ Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
¨ Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
¨ Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).
Emerging growth company ¨
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ¨
 





ITEM 2.02 RESULTS OF OPERATIONS AND FINANCIAL CONDITION.

Our press release dated May 8, 2017, concerning financial results for the second quarter ended March 31, 2017, furnished as Exhibit 99.1, is incorporated herein by reference.

ITEM 7.01 REGULATION FD DISCLOSURE

Information with respect to the Company’s Fleet Status Report at May 8, 2017 is furnished as Exhibit 99.2 to this Current Report and is incorporated herein by reference. Such information is being furnished under Regulation FD and should not be deemed to be filed under Section 19 of the Exchange Act.

The Company issues the Fleet Status Report on a quarterly basis. The expected date of issuance of the next Fleet Status Report will be in early August 2017.

SECTION 9 - FINANCIAL STATEMENTS AND EXHIBITS

ITEM 9.01 FINANCIAL STATEMENTS AND EXHIBITS
(d)
EXHIBITS

The exhibits to this report furnished pursuant to item 9.01 are as follows:

99.1
Press Release dated May 8, 2017
99.2
Fleet Status Report at May 8, 2017







SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.


 
ATWOOD OCEANICS, INC.
 
(Registrant)
Date: May 8, 2017


 
/s/ Mark W. Smith
 
Mark W. Smith
 
Senior Vice President and Chief Financial Officer






EXHIBIT INDEX


EXHIBIT NO
DESCRIPTION
 
 
99.1
 
Press Release dated May 8, 2017
99.2
 
Fleet Status Report at May 8, 2017




(Back To Top)

Section 2: EX-99.1 (EXHIBIT 99.1)

Exhibit


Exhibit 99.1
FOR IMMEDIATE RELEASE - EARNINGS

HOUSTON, May 8, 2017 -- Atwood Oceanics, Inc. (NYSE: ATW) ("Company"), announced today that it had recognized a net loss of $28.9 million or $(0.37) per diluted share, on revenues of $167.7 million for the quarter ended March 31, 2017 compared to net income of $9.7 million or $0.15 per diluted share on revenues of $157.6 million for the quarter ended December 31, 2016 and compared to net income of $122.4 million or $1.89 per diluted share, on revenues of $296.4 million for the quarter ended March 31, 2016. For the six months ended March 31, 2017, the Company recognized a net loss of $19.2 million or $(0.27) per diluted share, on revenues of $325.3 million compared to net income of $161.5 million or $2.49 per diluted share, on revenues of $604.2 million for the six months ended March 31, 2016.

During the three months ended March 31, 2017, we concluded that the Atwood Eagle and its materials and supplies were impaired, and we wrote them down to their approximate salvage value. We recorded a non-cash impairment charge of approximately $59.0 million ($57.6 million, net of tax, or $0.74 per diluted share), which is included in Asset Impairment on the Unaudited Condensed Consolidated Statement of Operations for the three months ended March 31, 2017. This impairment charge includes a write-down of property and equipment and deferred costs of $49.6 million, a write-down of our inventory of materials and supplies that was specific to the Atwood Eagle of $8.4 million, and accrued estimated transaction costs of $1.0 million. On May 5, 2017, we executed a sale and recycling agreement with respect to the Atwood Eagle, pursuant to which the vessel, together with associated equipment and machinery will be sold to a third party to be demolished and recycled. 

In January 2017, the client for the Atwood Achiever exercised its option provided as part of the “blend and extend” agreement we entered into in October 2015 to revert the contract to the original operating day rate and original end date. Exercise of this option resulted in a one-time payment to us of $48.1 million that includes the difference in day rates, taxes, and administrative fees covering the time periods for which the reduced day rate was applicable for previously provided drilling services, and is reported as a component of Contract drilling revenue in our Unaudited Condensed Consolidated Statements of Operations for the three and six months ended March 31, 2017.

During the three months ended March 31, 2017, we issued, in a public offering, 15,525,000 shares of common stock. The net proceeds from the offering, before deducting estimated offering expenses, were approximately $181 million. The net proceeds are currently held as cash and are expected to be used for general corporate purposes, which may include the repayment of borrowings under the Credit Facility, the funding of future purchases or redemption of our Senior Notes, working capital and capital expenditures, and otherwise to enhance our liquidity.

During the three months ended March 31, 2016, we repurchased, through open market transactions, $13.5 million aggregate principal of our Senior Notes at an aggregate cost of $5.1 million, including a minimal amount of accrued interest, representing an average discount of 62.2%. As a result of the repurchases, we recognized a gain on debt retirement, net of the related debt issuance costs, of $8.4 million (or $0.13 per diluted share) in Gains on extinguishment of debt on the Unaudited Condensed Consolidated Statement of Operations for the three and six months ended March 31, 2016.

 
For the Three Months Ended
 
(Unaudited)
(In thousands, except per share amounts)
March 31,
2017
 
December 31,
2016
 
March 31,
2016
Revenues
$
167,706

 
$
157,556

 
$
296,351

Income (Loss) before Income Taxes
(27,316
)
 
12,064

 
136,426

Provision for Income Taxes
(1,546
)
 
(2,393
)
 
(13,989
)
Net Income (Loss)
$
(28,862
)
 
$
9,671

 
$
122,437

 
 
 
 
 
 
Earnings per Common Share -
 
 
 
 
 
Basic
$
(0.37
)
 
$
0.15

 
$
1.89

Diluted
$
(0.37
)
 
$
0.15

 
$
1.89



5



 
 
 
Six Months Ended
 
 
 
(Unaudited)
(In thousands, except per share amounts)
 
 
March 31,
2017
 
March 31,
2016
Revenues
 
 
$
325,262

 
$
604,170

Income (Loss) before Income Taxes
 
 
(15,251
)
 
186,721

Provision for Income Taxes
 
 
(3,940
)
 
(25,203
)
Net Income (Loss)
 
 
$
(19,191
)
 
$
161,518

 
 
 
 
 
 
Earnings per Common Share -
 
 
 
 
 
Basic
 
 
$
(0.27
)
 
$
2.49

Diluted
 
 
$
(0.27
)
 
$
2.49


6




ATWOOD OCEANICS, INC. AND SUBSIDIARIES
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

 
Three Months Ended March 31,
 
Six Months Ended March 31,
(In thousands, except per share amounts)
2017
 
2016
 
2017
 
2016
REVENUES:
 
 
 
 
 
 
 
Contract drilling
$
162,240

 
$
282,546

 
$
312,103

 
$
577,161

Revenues related to reimbursable expenses
5,466

 
13,805

 
13,159

 
27,009

Total revenues
167,706

 
296,351

 
325,262

 
604,170

 
 
 
 
 
 
 
 
COSTS AND EXPENSES:
 
 
 
 
 
 
 
Contract drilling
64,277

 
89,918

 
129,947

 
220,570

Reimbursable expenses
4,674

 
9,123

 
11,276

 
17,409

Depreciation
41,443

 
41,053

 
83,251

 
83,880

General and administrative
12,445

 
11,488

 
27,636

 
26,665

Asset impairment
58,962

 
708

 
58,962

 
65,432

(Gain) loss on sale of assets
(51
)
 
77

 
(118
)
 
77

Other, net

 
(1,137
)
 

 
(1,060
)
 
181,750

 
151,230

 
310,954

 
412,973

 
 
 
 
 
 
 
 
OPERATING (LOSS) INCOME
(14,044
)
 
145,121

 
14,308

 
191,197

 
 
 
 
 
 
 
 
OTHER (EXPENSE) INCOME:
 
 
 
 
 
 
 
Interest expense, net of capitalized interest
(13,537
)
 
(17,098
)
 
(29,828
)
 
(30,859
)
Interest income
265

 
6

 
269

 
10

Gains on extinguishment of debt

 
8,397

 

 
8,397

Other income

 

 

 
17,976

 
(13,272
)
 
(8,695
)
 
(29,559
)
 
(4,476
)
 
 
 
 
 
 
 
 
(LOSS) INCOME BEFORE INCOME TAXES
(27,316
)
 
136,426

 
(15,251
)
 
186,721

PROVISION FOR INCOME TAXES
1,546

 
13,989

 
3,940

 
25,203

NET (LOSS) INCOME
$
(28,862
)
 
$
122,437

 
$
(19,191
)
 
$
161,518

 
 
 
 
 
 
 
 
(LOSS) EARNINGS PER COMMON SHARE (NOTE 3):
 
 
 
 
 
 
 
Basic
$
(0.37
)
 
$
1.89

 
$
(0.27
)
 
$
2.49

Diluted
$
(0.37
)
 
$
1.89

 
$
(0.27
)
 
$
2.49

WEIGHTED AVERAGE COMMON SHARES OUTSTANDING (NOTE 3):
 
 
 
 
 
 
 
Basic
78,270

 
64,781

 
71,504

 
64,739

Diluted
78,270

 
64,825

 
71,504

 
64,870

Dividend declared per share
$

 
$

 
$

 
$
0.075



7



ATWOOD OCEANICS, INC. AND SUBSIDIARIES
UNAUDITED ANALYSIS OF REVENUES AND DRILLING COSTS

 
REVENUES
 
Three Months Ended
 
Six Months Ended
(In millions)
March 31,
2017
 
December 31,
2016
 
March 31,
2016
 
March 31,
2017
 
March 31,
2016
Ultra-Deepwater
$
162

 
$
148

 
$
189

 
$
310

 
$
371

Deepwater

 

 
59

 

 
131

Jackups

 
2

 
34

 
2

 
75

Reimbursable
6

 
8

 
14

 
13

 
27

 
$
168

 
$
158

 
$
296

 
$
325

 
$
604



 
DRILLING COSTS
 
Three Months Ended
 
Six Months Ended
(In millions)
March 31,
2017
 
December 31,
2016
 
March 31,
2016
 
March 31,
2017
 
March 31,
2016
Ultra-Deepwater
$
53

 
$
50

 
$
54

 
$
103

 
$
115

Deepwater

 

 
19

 

 
62

Jackups
11

 
14

 
19

 
25

 
45

Reimbursable
5

 
7

 
9

 
11

 
17

Other

 
1

 
(2
)
 
2

 
(1
)
 
$
69

 
$
72

 
$
99

 
$
141

 
$
238





8



ATWOOD OCEANICS, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS

(In thousands, except par value)
March 31,
2017
 
September 30,
2016
 
(Unaudited)
 
 
 ASSETS
 
 
 
Cash
$
435,208

 
$
145,427

Accounts receivable, net
81,630

 
113,091

Income tax receivable
2,889

 
6,095

Inventories of materials and supplies, net
101,721

 
109,925

Prepaid expenses, deferred costs and other current assets
12,498

 
18,504

Total current assets
633,946

 
393,042

 
 
 
 
Property and equipment, net
4,143,390

 
4,127,696

 
 
 
 
Other receivables
11,831

 
11,831

Deferred income taxes
165

 
165

Deferred costs and other assets
7,313

 
7,058

Total assets
$
4,796,645

 
$
4,539,792

 
 
 
 
LIABILITIES AND SHAREHOLDERS' EQUITY
 
 
 
Accounts payable
$
23,693

 
$
25,299

Accrued liabilities
9,747

 
7,868

Interest payable
8,395

 
7,096

Income tax payable
8,582

 
8,294

Deferred credits and other liabilities
1,636

 
799

 Total current liabilities
52,053

 
49,356

 
 
 
 
Long-term debt
1,298,067

 
1,227,919

Deferred income taxes
1,599

 
1,202

Deferred credits
7,910

 

Other
35,994

 
30,929

 Total long-term liabilities
1,343,570

 
1,260,050

 
 
 
 
Commitments and contingencies (Note 9)
 
 
 
 
 
 
 
Preferred stock, no par value, 1,000 shares authorized, none outstanding

 

Common stock, $1.00 par value, 180,000 shares authorized with 80,516 issued (Note 10) and outstanding as of March 31, 2017 and 180,000 shares authorized and 64,799 shares issued and outstanding as of September 30, 2016
80,516

 
64,799

 Paid-in capital
410,855

 
237,542

 Retained earnings
2,909,684

 
2,929,839

 Accumulated other comprehensive loss
(33
)
 
(1,794
)
Total shareholders' equity
3,401,022

 
3,230,386

Total liabilities and shareholders' equity
$
4,796,645

 
$
4,539,792





9



ATWOOD OCEANICS, INC. AND SUBSIDIARIES
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS


 
Six Months Ended March 31,
(In thousands)
2017
 
2016
Cash flows from operating activities:
 
 
 
Net (loss) income
$
(19,191
)
 
$
161,518

Adjustments to reconcile net (loss) income to net cash provided by operating activities:
 
 
 
Depreciation
83,251

 
83,880

Amortization
3,367

 
1,607

Provision for doubtful accounts
2,369

 
1,141

Deferred income tax benefit
(525
)
 
(650
)
Share-based compensation expense
7,566

 
5,009

Asset impairment
58,962

 
65,432

(Gain) loss on sale of assets
(118
)
 
77

(Gain) on extinguishment of debt

 
(8,397
)
Other, net

 
(1,137
)
Changes in assets and liabilities:
 
 
 
Accounts receivable
38,217

 
62,963

Income tax receivable
3,206

 
507

Inventories of materials and supplies
(168
)
 
16,187

Prepaid expenses, deferred costs and other current assets
6,072

 
14,709

Deferred costs and other assets
(4,201
)
 
(1,381
)
Accounts payable
3,425

 
(25,306
)
Accrued liabilities
4,023

 
(3,760
)
Income tax payable
288

 
6,534

Deferred credits and other liabilities
6,720

 
1,220

Net cash provided by operating activities
193,263

 
380,153

 
 
 
 
Cash flows from investing activities:
 
 
 
Capital expenditures
(154,448
)
 
(176,175
)
Proceeds from sale of assets

 
6,681

Net cash used in investing activities
(154,448
)
 
(169,494
)
 
 
 
 
Cash flows from financing activities:
 
 
 
Proceeds from issuance of long-term debt
125,000

 
45,000

Principal payments on long-term debt
(55,000
)
 
(120,156
)
Dividends paid

 
(21,746
)
Payments related to exercise of stock options

 
(928
)
Proceeds from issuance of common stock
180,966

 

Net cash provided by (used in) financing activities
250,966

 
(97,830
)
Net increase in cash and cash equivalents
289,781

 
112,829

Cash and cash equivalents, at beginning of period
145,427

 
113,983

Cash and cash equivalents, at end of period
$
435,208

 
$
226,812

 
 
 
 
Non-cash activities:
 
 
 
(Decrease) increase in accounts payable related to capital expenditures
$
(5,031
)
 
$
950

Increase in deferred credits not yet collected
$
9,125

 
$



10




Atwood Oceanics, Inc. is a leading offshore drilling company engaged in the drilling and completion of exploration and development wells for the global oil and gas industry. The Company currently owns 10 mobile offshore drilling units and is constructing two ultra-deepwater drillships. The Company was founded in 1968 and is headquartered in Houston, Texas. Atwood Oceanics, Inc. common stock is traded on the New York Stock Exchange under the symbol "ATW." For more information about the Company, please visit www.atwd.com.

Conference Call

The Company has scheduled a conference call and webcast related to its second quarter 2017 results on Tuesday, May 9, 2017, at 9:00 A.M. CDT (10:00 A.M. EDT). Interested parties are invited to listen to the call by dialing 1-800-894-5910, or internationally 1-785-424-1052, Conference ID - Atwood, Password 46829. Interested parties may also listen over the Internet through a link posted in the Investor Relations section of the Company's Web site.

A replay of the conference call will be available on the Company's Web site following the end of the live call.

Contact: Mark W. Smith
Senior Vice President and Chief Financial Officer
(281) 749-7840



11
(Back To Top)

Section 3: EX-99.2 (EXHIBIT 99.2)

Exhibit


Exhibit 99.2
2000479321_atw5817fleetstatusfin_img1.jpg
FLEET STATUS REPORT
Atwood Oceanics, Inc. and Subsidiaries Fleet Status Report as of May 8, 2017
Rig Name
Rated Water Depth
Location
Client
Estimated Contract End Date
Estimated Contract Day Rate
Additional Comments
ULTRA-DEEPWATER DRILLSHIPS
ATWOOD ADVANTAGE
12,000'
Israel
NOBLE ENERGY INC.
 August 2017
(Fixed term)
$581,000
Well in progress is estimated to be completed in late August or early September. The day rate for well in progress is lower than the contract day rate and is not disclosed.
A demobilization fee of $4.5 million will be paid if direct follow-on work is not secured.





ATWOOD ACHIEVER
12,000'
Mauritania / Senegal
KOSMOS ENERGY LTD.
November 2017
(Fixed term)
$595,500 (all applicable taxes to be reimbursed by client)

Well in progress is estimated to be completed in December.
The day rate for well in progress is lower than the contract day rate and is not disclosed.

ATWOOD ADMIRAL
12,000'
South Korea
---
AVAILABLE
N/A
Delivery to occur on or prior to September 30, 2019 at Atwood’s option.

ATWOOD ARCHER
12,000'
South Korea
---
AVAILABLE
N/A
Delivery to occur on or prior to June 30, 2020 at Atwood’s option.

ULTRA-DEEPWATER SEMISUBMERSIBLES
ATWOOD CONDOR
10,000'
In Transit to Australia
---
N/A
N/A
The rig is mobilizing to Singapore and will undergo maintenance prior to resuming mobilization to Australia.
 
 
Australia
WOODSIDE ENERGY LTD.
July 2019
(12 wells)
$222,295
A fee of $36.5 million will be paid to mobilize the rig to Australia which will be amortized over the contract term.
Operations are expected to commence January 2018 for an estimated duration of 550 days.
ATWOOD OSPREY
8,200'
Australia
CONOCOPHILLIPS AUSTRALIA EXPLORATION PTY
June 2017
(1 well)
$185,000

The client exercised a one well option at the contracted rate.
Day rate subject to change due to various performance metrics.







 
 
 
 
 
 
 
 
 
Australia
WOODSIDE ENERGY LTD.
September 2017
(1 well)
$185,000
Operations are expected to commence in June 2017 for an estimated duration of 100 days.
 
 
Australia
---
AVAILABLE
N/A

Being actively marketed September 2017 to March 2018.

 
 
Australia
WOODSIDE ENERGY LTD.
June 2018
(1 well)
$190,000
Operations are expected to commence in March 2018 for an estimated duration of 100 days. The contract provides a one well option at the contracted rate.
DEEPWATER SEMISUBMERSIBLE
ATWOOD EAGLE
5,000'
Singapore
---
IDLE
N/A

We have entered into an agreement to scrap/recycle the rig.

JACKUPS
ATWOOD MAKO
400'
Philippines
---
AVAILABLE
N/A
Idled and being actively marketed.
ATWOOD MANTA
400'
Philippines
---
AVAILABLE
N/A
Idled and being actively marketed.
ATWOOD ORCA
400'
Thailand
MUBADALA PETROLEUM
April 2018
(Fixed term)
Not Disclosed
Operations commenced on April 27, 2017.
ATWOOD BEACON
400'
Malta
---
AVAILABLE
N/A
Idled and being actively marketed.
ATWOOD AURORA
350'
Malta
---
AVAILABLE
N/A
Idled and being actively marketed.







FORWARD-LOOKING STATEMENTS

As used herein, “we”, “us”, and “our” refers to Atwood Oceanics, Inc. and its subsidiaries, except where the context indicates otherwise. Statements contained in this Fleet Status Report, including, but not limited to, information regarding our estimated rig availability, estimated delivery dates, estimated contract duration, day rates, future contract commencement dates and locations and planned out of service time are forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. These statements reflect management's reasonable judgment with respect to future events. Forward-looking statements are subject to numerous risks, uncertainties and assumptions and actual results could differ materially from those anticipated as a result of various factors including: uncertainties related to the level of activity in offshore oil and gas exploration and development; oil and gas prices; competition and market conditions in the contract drilling industry; shipyard delays and the risks inherent in the construction of a rig; delays in the commencement of operations of a rig following delivery; our ability to enter into and the terms of future contacts; possible cancellation or suspension of drilling contracts; the availability of qualified personnel; labor relations; operating hazards and risks; terrorism and political and other uncertainties inherent in foreign operations (including risk of war, civil disturbances, seizure or damage to equipment and exchange and currency fluctuations); the impact of governmental and industry laws and regulations; and environmental matters. These factors and others are described and discussed in our most recently filed annual report on Form 10-K, in our Forms 10-Q for subsequent periods and in our other filings with the Securities and Exchange Commission which are available on the SEC's website at www.sec.gov. All information in this Fleet Status Report is as of the date indicated above and is subject to change without notice. You should not place undue reliance on forward-looking statements. Each forward-looking statement speaks only as of the date of the particular statement, and we undertake no duty to update the content of this Fleet Status Report or any forward-looking statement contained herein to conform the statement to actual results or to reflect changes in our expectations.



(Back To Top)