Exhibit 99.1
FOR IMMEDIATE RELEASE - EARNINGS
HOUSTON, February 3, 2017 - Atwood Oceanics, Inc. (NYSE: ATW) ("Company"), announced today that it had earned 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, compared to net income of $4.2 million or $0.07 per diluted share on revenues of $188.7 million for the quarter ended September 30, 2016 and compared to net income of $39.1 million or $0.60 per diluted share on revenues of $307.8 million for the quarter ended December 31, 2015.
During the quarter ended December 31, 2015, the Company recorded a non-cash impairment charge of approximately $64.7 million ($64.7 million, net of tax, or $1.00 per diluted share) related to the Atwood Falcon. During the quarter ended December 31, 2016, the Company did not recognize any impairment.
During the quarter ended December 31, 2015, the Company recognized approximately $18.0 million ($18.0 million, net of tax, or $0.28 per diluted share) of expected insurance recoveries related to cyclone damage to the Atwood Osprey. This amount is included in Other income on the Unaudited Condensed Consolidated Statement of Operations and was subsequently collected.
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 will result 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 previously invoiced. Effective February 1, 2017 and continuing until the contract end date of approximately November 12, 2017, the operating day rate is $595,000.
In February 2017, we amended our drilling services contract with Woodside Energy Ltd (“Woodside”) to substitute the Atwood Condor for the Atwood Osprey for the Greater Enfield campaign. The contract is expected to commence between December 2017 and March 2018 at an operating rate of $222,295 per day for approximately 550 days. Depending on the commencement of the contract, Woodside will reimburse us for the mobilization of the Atwood Condor to Australia in an amount of either $34.5 million or $36.5 million. In addition, we entered into a new agreement with Woodside to utilize the Atwood Osprey for an additional exploration well with an estimated duration of approximately 100 days. The contract for the exploration well is expected to commence between March 2018 and May 2018 at an operating rate of $190,000 per day with a priced option for an additional well. We will receive a mobilization fee of $1.0 million if the option is exercised and a payment of $2.0 million if the option is not exercised.
|
| | | | | | | | | | | |
| | For the Three Months Ended |
| | (Unaudited) |
| (In thousands, except per share amounts) | December 31,
2016 | | September 30,
2016 | | December 31,
2015 |
| Revenues | $ | 157,556 |
| | $ | 188,677 |
| | $ | 307,819 |
|
| | | | | | |
| Income before Income Taxes | 12,064 |
| | 5,918 |
| | 50,295 |
|
| Provision for Income Taxes | (2,393 | ) | | (1,669 | ) | | (11,214 | ) |
| Net Income | $ | 9,671 |
| | $ | 4,249 |
| | $ | 39,081 |
|
| | | | | | |
| Earnings per Common Share - | | | | | |
| Basic | $ | 0.15 |
| | $ | 0.07 |
| | $ | 0.60 |
|
| Diluted | $ | 0.15 |
| | $ | 0.07 |
| | $ | 0.60 |
|
ATWOOD OCEANICS, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(UNAUDITED)
|
| | | | | | | |
| | Three Months Ended December 31, |
| (In thousands, except per share amounts) | 2016 | | 2015 |
| | (Unaudited) |
| REVENUES: | | | |
| Contract drilling | $ | 149,863 |
| | $ | 294,615 |
|
| Revenues related to reimbursable expenses | 7,693 |
| | 13,204 |
|
| Total revenues | 157,556 |
| | 307,819 |
|
| | | | |
| COSTS AND EXPENSES: | | | |
| Contract drilling | 65,670 |
| | 130,652 |
|
| Reimbursable expenses | 6,602 |
| | 8,286 |
|
| Depreciation | 41,808 |
| | 42,827 |
|
| General and administrative | 15,190 |
| | 15,177 |
|
| Asset impairment | — |
| | 64,724 |
|
| (Gain) loss on sale of assets | (67 | ) | | 77 |
|
| | 129,203 |
| | 261,743 |
|
| | | | |
| OPERATING INCOME | 28,353 |
| | 46,076 |
|
| | | | |
| OTHER INCOME (EXPENSE): | | | |
| Interest expense, net of capitalized interest | (16,291 | ) | | (13,761 | ) |
| Interest income | 2 |
| | 4 |
|
| Other income | — |
| | 17,976 |
|
| | (16,289 | ) | | 4,219 |
|
| | | | |
| INCOME BEFORE INCOME TAXES | 12,064 |
| | 50,295 |
|
| PROVISION FOR INCOME TAXES | 2,393 |
| | 11,214 |
|
| NET INCOME | $ | 9,671 |
| | $ | 39,081 |
|
| | | | |
| EARNINGS PER COMMON SHARE (NOTE 3): | | | |
| Basic | $ | 0.15 |
| | $ | 0.60 |
|
| Diluted | $ | 0.15 |
| | $ | 0.60 |
|
| WEIGHTED AVERAGE COMMON SHARES OUTSTANDING (NOTE 3): | | | |
| Basic | 64,879 |
| | 64,765 |
|
| Diluted | 65,171 |
| | 64,921 |
|
ATWOOD OCEANICS, INC. AND SUBSIDIARIES
UNAUDITED ANALYSIS OF REVENUES AND DRILLING COSTS
|
| | | | | | | | | | | |
| | REVENUES |
| | Three Months Ended |
| (In millions) | December 31,
2016 | | September 30,
2016 | | December 31,
2015 |
| Ultra-Deepwater | $ | 148 |
| | $ | 155 |
| | $ | 182 |
|
| Deepwater | — |
| | — |
| | 72 |
|
| Jackups | 2 |
| | 27 |
| | 41 |
|
| Reimbursable | 8 |
| | 7 |
| | 13 |
|
| | 158 |
| | 189 |
| | 308 |
|
|
| | | | | | | | | | | |
| | DRILLING COSTS |
| | Three Months Ended |
| (In millions) | December 31,
2016 | | September 30,
2016 | | December 31,
2015 |
| Ultra-Deepwater | $ | 50 |
| | $ | 58 |
| | $ | 61 |
|
| Deepwater | — |
| | 2 |
| | 43 |
|
| Jackups | 14 |
| | 17 |
| | 26 |
|
| Reimbursable | 7 |
| | 5 |
| | 8 |
|
| Other | 1 |
| | — |
| | 1 |
|
| | $ | 72 |
| | $ | 82 |
| | $ | 139 |
|
ATWOOD OCEANICS, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
|
| | | | | | | |
| (In thousands, except par value) | December 31,
2016 | | September 30,
2016 |
| | (Unaudited) | | |
| ASSETS | | | |
| Cash | $ | 160,110 |
| | $ | 145,427 |
|
| Accounts receivable, net | 95,464 |
| | 113,091 |
|
| Income tax receivable | 6,471 |
| | 6,095 |
|
| Inventories of materials and supplies, net | 110,462 |
| | 109,925 |
|
| Prepaid expenses, deferred costs and other current assets | 15,745 |
| | 18,504 |
|
| Total current assets | 388,252 |
| | 393,042 |
|
| | | | |
| Property and equipment, net | 4,223,156 |
| | 4,127,696 |
|
| | | | |
| Other receivables | 11,831 |
| | 11,831 |
|
| Deferred income taxes | 165 |
| | 165 |
|
| Deferred costs and other assets | 6,253 |
| | 7,058 |
|
| Total assets | $ | 4,629,657 |
| | $ | 4,539,792 |
|
| | | | |
| LIABILITIES AND SHAREHOLDERS' EQUITY | | | |
| Accounts payable | 22,290 |
| | 25,299 |
|
| Accrued liabilities | 9,076 |
| | 7,868 |
|
| Interest payable | 14,896 |
| | 7,096 |
|
| Income tax payable | 8,313 |
| | 8,294 |
|
| Deferred credits and other liabilities | 285 |
| | 799 |
|
| Total current liabilities | 54,860 |
| | 49,356 |
|
| | | | |
| Long-term debt | 1,297,995 |
| | 1,227,919 |
|
| Deferred income taxes | 1,403 |
| | 1,202 |
|
| Deferred credits | 350 |
| | — |
|
| Other | 30,613 |
| | 30,929 |
|
| Total long-term liabilities | 1,330,361 |
| | 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 64,942 issued and outstanding as of December 31, 2016 and 180,000 shares authorized and 64,799 shares issued and outstanding as of September 30, 2016 | $ | 64,942 |
| | $ | 64,799 |
|
| Paid-in capital | $ | 241,558 |
| | $ | 237,542 |
|
| Retained earnings | $ | 2,938,546 |
| | $ | 2,929,839 |
|
| Accumulated other comprehensive loss | $ | (610 | ) | | $ | (1,794 | ) |
| Total shareholders' equity | 3,244,436 |
| | 3,230,386 |
|
| Total liabilities and shareholders' equity | $ | 4,629,657 |
| | $ | 4,539,792 |
|
ATWOOD OCEANICS, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(UNAUDITED)
|
| | | | | | | |
| | Three Months Ended December 31, |
| (In thousands) | 2016 | | 2015 |
| Cash flows from operating activities: | | | |
| Net income | $ | 9,671 |
| | $ | 39,081 |
|
| Adjustments to reconcile net income to net cash provided by operating activities: | | | |
| Depreciation | 41,808 |
| | 42,827 |
|
| Amortization | 922 |
| | 1,250 |
|
| Provision for doubtful accounts | 2,369 |
| | 757 |
|
| Deferred income tax benefit | (185 | ) | | (714 | ) |
| Share-based compensation expense | 3,655 |
| | 2,371 |
|
| Asset impairment | — |
| | 64,724 |
|
| (Gain) loss on sale of assets | (67 | ) | | 77 |
|
| Changes in assets and liabilities: | | | |
| Accounts receivable | 15,258 |
| | 60,883 |
|
| Income tax receivable | (376 | ) | | (829 | ) |
| Inventories of materials and supplies | (537 | ) | | 11,023 |
|
| Prepaid expenses, deferred costs and other current assets | 2,759 |
| | 7,462 |
|
| Deferred costs and other assets | (496 | ) | | (1,050 | ) |
| Accounts payable | (1,396 | ) | | (17,615 | ) |
| Accrued liabilities | 9,191 |
| | 8,570 |
|
| Income tax payable | 19 |
| | (642 | ) |
| Deferred credits and other liabilities | 902 |
| | 1,973 |
|
| Net cash provided by operating activities | 83,497 |
| | 220,148 |
|
| | | | |
| Cash flows from investing activities: | | | |
| Capital expenditures | (138,814 | ) | | (131,547 | ) |
| Net cash used in investing activities | (138,814 | ) | | (131,547 | ) |
| | | | |
| Cash flows from financing activities: | | | |
| Proceeds from issuance of long-term debt | 125,000 |
| | 45,000 |
|
| Principal payments on long-term debt | (55,000 | ) | | (115,000 | ) |
| Dividends paid | — |
| | (16,316 | ) |
| Payments related to exercise of stock options | — |
| | (599 | ) |
Net cash provided by (used in) or financing activities
| 70,000 |
| | (86,915 | ) |
| Net increase in cash and cash equivalents | 14,683 |
| | 1,686 |
|
| Cash and cash equivalents, at beginning of period | 145,427 |
| | 113,983 |
|
| Cash and cash equivalents, at end of period | 160,110 |
| | 115,669 |
|
| | | | |
| Non-cash activities: | | | |
| Decrease (increase) in accounts payable related to capital expenditures | $ | (1,613 | ) | | $ | 10,530 |
|
| Dividends payable | $ | — |
| | $ | 4,858 |
|
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 2 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 first quarter 2017 results on Monday, February 6, 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 25965. 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
