Atwood Oceanics (ATW) 10-Q 9 May 17 2017 Q2 Quarterly report Financial data

Document and Entity Information

Document and Entity Information - shares	6 Months Ended
	Mar. 31, 2017	May 01, 2017
Document And Entity Information [Abstract]
Entity Registrant Name	ATWOOD OCEANICS INC
Entity Central Index Key	8,411
Current Fiscal Year End Date	--09-30
Entity Filer Category	Large Accelerated Filer
Document Type	10-Q
Document Period End Date	Mar. 31, 2017
Document Fiscal Year Focus	2,017
Document Fiscal Period Focus	Q2
Amendment Flag	false
Entity Common Stock, Shares Outstanding		80,519,422
Trading Symbol	atw

CONDENSED CONSOLIDATED STATEMEN

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED) - USD ($) shares in Thousands, $ in Thousands	3 Months Ended		6 Months Ended
	Mar. 31, 2017	Mar. 31, 2016	Mar. 31, 2017	Mar. 31, 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	0	(1,137)	0	(1,060)
Costs and Expenses	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	0	8,397	0	8,397
Other income	0	0	0	17,976
Other income (expense) total	(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 (in dollars per share)	$ (0.37)	$ 1.89	$ (0.27)	$ 2.49
Diluted (in dollars per share)	$ (0.37)	$ 1.89	$ (0.27)	$ 2.49
WEIGHTED AVERAGE COMMON SHARES OUTSTANDING (NOTE 3):
Basic (in shares)	78,270	64,781	71,504	64,739
Diluted (in shares)	78,270	64,825	71,504	64,870
Dividend declared per share (in USD per share)	$ 0	$ 0	$ 0	$ 0.075

CONDENSED CONSOLIDATED STATEME3

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (UNAUDITED) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Mar. 31, 2017	Mar. 31, 2016	Mar. 31, 2017	Mar. 31, 2016
Statement of Comprehensive Income [Abstract]
Net (loss) income	$ (28,862)	$ 122,437	$ (19,191)	$ 161,518
Derivative financial instruments:
Unrealized holding gains/(losses)	263	(4,649)	1,002	(4,818)
Loss reclassified to net income	314	2,043	759	2,738
Total other comprehensive income (loss)	577	(2,606)	1,761	(2,080)
Comprehensive (loss) income	$ (28,285)	$ 119,831	$ (17,430)	$ 159,438

CONDENSED CONSOLIDATED BALANCE

CONDENSED CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands	Mar. 31, 2017	Sep. 30, 2016
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	0
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	0	0
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

CONDENSED CONSOLIDATED BALANCE5

CONDENSED CONSOLIDATED BALANCE SHEETS (Parenthetical) - $ / shares	Mar. 31, 2017	Sep. 30, 2016
Statement of Financial Position [Abstract]
Preferred stock, authorized (in shares)	1,000,000	1,000,000
Preferred stock, outstanding (in shares)	0	0
Common stock, par value (in dollars per share)	$ 1	$ 1
Common stock, authorized (in shares)	180,000,000	180,000,000
Common stock, issued (in shares)	80,516,000	64,799,000
Common stock, outstanding (in shares)	80,516,000	64,799,000

CONDENSED CONSOLIDATED STATEME6

CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN SHAREHOLDERS’ EQUITY (UNAUDITED) - 6 months ended Mar. 31, 2017 - USD ($) shares in Thousands, $ in Thousands	Total	Common Stock	Paid-in Capital	Retained Earnings	Accumulated Other Comprehensive Income (Loss)
Beginning Balance (in shares) at Sep. 30, 2016		64,799
September 30, 2016 at Sep. 30, 2016	$ 3,230,386	$ 64,799	$ 237,542	$ 2,929,839	$ (1,794)
Increase (Decrease) in Stockholders' Equity
Net (loss) income	(19,191)			(19,191)
Other comprehensive income	1,761				1,761
Vesting of restricted stock and performance unit awards (in shares)		192
Vesting of restricted stock and performance unit awards	(466)	$ 192	(658)
Stock compensation expense (in shares)		0
Stock compensation expense		$ 0
Stock compensation expense	7,566		7,566
Common stock equity issuance (in shares)		15,525
Common stock equity issuance	180,966	$ 15,525	165,441
Ending Balance (in shares) at Mar. 31, 2017		80,516
March 31, 2017 at Mar. 31, 2017	$ 3,401,022	$ 80,516	410,855	2,909,684	$ (33)
Increase (Decrease) in Stockholders' Equity
Cumulative effect of accounting change (Note 1)			$ 964	$ (964)

CONDENSED CONSOLIDATED STATEME7

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED) - USD ($) $ in Thousands	6 Months Ended
	Mar. 31, 2017	Mar. 31, 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	0	(8,397)
Other, net	0	(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	0	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	0	(21,746)
Payments related to exercise of stock options	0	(928)
Proceeds from issuance of common stock	180,966	0
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	$ 0

UNAUDITED INTERIM INFORMATION

UNAUDITED INTERIM INFORMATION	6 Months Ended
	Mar. 31, 2017
Accounting Policies [Abstract]
UNAUDITED INTERIM INFORMATION	UNAUDITED INTERIM INFORMATION The accompanying unaudited condensed consolidated financial statements of Atwood Oceanics, Inc. and its subsidiaries as of March 31, 2017 and for the three and six months ended March 31, 2017 and 2016 , have been prepared in accordance with accounting principles generally accepted in the United States for interim financial information. Unless otherwise indicated, references to “we”, “us”, “our” and the “Company” refer collectively to Atwood Oceanics, Inc. and subsidiaries. The year-end Consolidated Balance Sheet data was derived from the audited financial statements as of September 30, 2016 . Although these financial statements and related information have been prepared without audit and certain information and note disclosures normally included in financial statements prepared in accordance with accounting principles generally accepted in the United States of America ("U.S.") have been condensed or omitted, we believe that the note disclosures are adequate to make the information not misleading. The interim financial results may not be indicative of results that could be expected for a full fiscal year. These unaudited condensed consolidated financial statements should be read in conjunction with the audited consolidated financial statements and the related notes included in our Annual Report on Form 10-K for the year ended September 30, 2016 . In our opinion, the unaudited interim financial statements reflect all adjustments considered necessary for a fair statement of our financial position, results of operations, changes in shareholders' equity, and cash flows for the periods presented. Recently adopted accounting pronouncements In August 2016, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update (ASU) 2016-15, Statement of Cash Flows (Topic 230): Classification of Certain Cash Receipts and Cash Payments. The ASU is intended to reduce diversity in practice in how certain cash receipts and cash payments are presented in the statement of cash flows. The new guidance clarifies the classification of cash activity related to: (1) debt prepayment or debt extinguishment costs, (2) settlement of zero-coupon debt instruments, (3) contingent consideration payments made after a business combination, (4) proceeds from the settlement of insurance claims, (5) proceeds from the settlement of corporate and bank-owned life insurance policies, (6) distributions received from equity-method investments, and (7) beneficial interests in securitization transactions. This update is effective for annual and interim periods beginning after December 15, 2017. Effective October 1, 2016, we elected to early adopt ASU 2016-15. The adoption of ASU 2016-15 did not have an impact on our Unaudited Condensed Consolidated Statements of Cash Flows. In March 2016, the FASB issued ASU 2016-09, Compensation - Stock Compensation (Topic 718): Improvements to Employee Share-Based Payment Accounting, as part of its simplification initiative. The ASU simplifies several aspects of the accounting for employee share-based payment transactions, including the accounting for income taxes, classification of excess tax benefits on the statements of cash flows, forfeitures, statutory tax withholding requirements, classification of awards as either equity or liabilities, and classification of employee taxes paid on the statements of cash flows when an employer withholds shares for tax-withholding purposes. The amendments in this update are effective for annual periods beginning after December 15, 2016, and interim periods within those annual periods. The standard contains various amendments, each requiring a specific method of adoption, and designates whether each amendment should be adopted using a retrospective, modified retrospective, or prospective transition method. Effective October 1, 2016, we elected to early adopt the ASU. The amendments within the ASU relate to the timing of when excess tax benefits are recognized and the accounting for forfeitures. We adopted this ASU using a modified retrospective method. In accordance with this method, we have recorded a cumulative-effect adjustment in our Unaudited Condensed Consolidated Balance Sheet as of October 1, 2016, relating to the timing of recognition of excess tax benefits, of $6.6 million to the beginning Retained earnings that was offset by an equal increase to Deferred tax assets valuation allowance of the same amount resulting in no impact on Retained earnings. We also recorded a cumulative-effect adjustment in our Unaudited Condensed Consolidated Balance Sheet as of October 1, 2016, to reflect actual forfeitures versus the previously-estimated forfeiture rate, of $1.0 million reduction to the Retained earnings with an offset to Paid-in capital. The amendments within the ASU related to the recognition of excess tax benefits and tax shortfalls in the income statement and presentation of excess tax benefits on the statements of cash flows were adopted prospectively, with no impact to prior periods. In November 2015, the FASB issued ASU 2015-17, Income Taxes (Topic 740): Amendments for the Balance Sheet Classification of Deferred Income Taxes. The amended guidance requires the classification of all deferred tax assets and liabilities as noncurrent on the balance sheet instead of separating deferred taxes into current and noncurrent amounts. Deferred tax assets and liabilities will continue to be offset and presented as a single amount under the amended guidance. The effective date for public business entities is for financial statements issued for annual periods beginning after December 15, 2016, and interim periods within those annual periods. Effective October 1, 2016, we elected to early adopt the ASU on a prospective basis. The adoption of the ASU did not have a material impact on our Condensed Consolidated Balance Sheet. Recently issued accounting pronouncements In October 2016, the FASB issued ASU 2016-16, Income Taxes (Topic 740): Intra-Entity Transfers of Assets Other Than Inventory. The ASU eliminates the exception to defer the tax effect for all intra-entity sales of assets other than inventory until the transferred asset is sold to a third party or otherwise recovered through use. As a result, a reporting entity would recognize the tax expense from the sale of the asset in the seller’s tax jurisdiction when the transfer occurs, even though the pre-tax effects of that transaction are eliminated in consolidation. Any deferred tax asset that arises in the buyer’s jurisdiction would also be recognized at the time of the transfer. This update is effective for annual and interim periods beginning after December 15, 2017. We are currently evaluating what impact the adoption of this guidance will have on our financial statements or disclosures in our financial statements. In June 2016, FASB issued ASU 2016-13, Financial Instruments - Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments. The ASU introduces a new model for recognizing credit losses on financial instruments based on an estimate of current expected credit losses. The new model will apply to: (1) loans, accounts receivable, trade receivables, and other financial assets measured at amortized cost, (2) loan commitments and certain other off-balance sheet credit exposures, (3) debt securities and other financial assets measured at fair value through other comprehensive income/(loss), and (4) beneficial interests in securitized financial assets. This update is effective for annual and interim periods beginning after December 15, 2019. We are currently evaluating what impact the adoption of this guidance will have on our financial statements or disclosures in our financial statements. In February 2016, the FASB issued ASU 2016-02, Leases (Topic 842): Amendments to the FASB Accounting Standards Codification. The amendments require an entity to recognize lease assets and lease liabilities on the balance sheet and to disclose key qualitative and quantitative information about the entity's leasing arrangements. This update is effective for annual and interim periods beginning after December 15, 2018, with early adoption permitted. A modified retrospective approach is required. We are currently evaluating what impact the adoption of this guidance will have on our financial statements or disclosures in our financial statements. In August 2014, the FASB issued ASU 2014-15, Presentation of Financial Statements-Going Concern (Subtopic 205-40): Disclosure of Uncertainties about an Entity’s Ability to Continue as a Going Concern. The new guidance requires management to assess a company’s ability to continue as a going concern and to provide related footnote disclosures in certain circumstances. Disclosures are required when conditions give rise to substantial doubt. Substantial doubt is deemed to exist when it is probable that the company will be unable to meet its obligations within one year from the financial statement issuance date. The new guidance is effective for the annual period ending after December 15, 2016, and all annual and interim periods thereafter. We are currently evaluating what impact the adoption of this guidance will have on our financial statements or disclosures in our financial statements. In May 2014, the FASB issued ASU 2014-09, Revenues from Contracts with Customers (Topic 606): A new guidance intended to change the criteria for recognition of revenue. The core principle of the guidance is that an entity should recognize revenue to depict the transfer of promised goods or services to clients in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. The guidance is effective for annual reporting periods beginning after December 15, 2017, including interim periods within that reporting period. We have not yet adopted nor selected a transition method and are currently evaluating what impact the adoption of this guidance will have on our financial statements or disclosures in our financial statements.

ACCOUNTS RECEIVABLE AND LONG TE

ACCOUNTS RECEIVABLE AND LONG TERM CONTRACTS	6 Months Ended
	Mar. 31, 2017
Receivables [Abstract]
ACCOUNTS RECEIVABLE AND LONG TERM CONTRACTS	ACCOUNTS RECEIVABLE AND LONG TERM CONTRACTS Accounts Receivable We record accounts receivable at the amount we invoice our clients. Our clients are major international corporate entities and government organizations with stable payment experience. Historically, our uncollectible accounts receivable have been immaterial, and typically, we do not require collateral for our receivables. We provide an allowance for uncollectible accounts, as necessary, on a specific identification basis. Our allowance for doubtful accounts as of March 31, 2017 and September 30, 2016 was $2.3 million and $1.2 million , respectively. Our provision for doubtful accounts for the three and six months ended March 31, 2017 was $2.4 million and $2.4 million , and for the three and six months ended March 31, 2016 was $0.8 million and $1.1 million , respectively. The provision for doubtful accounts is reported as a component of Contract drilling costs in our Unaudited Condensed Consolidated Statements of Operations. Long Term Contracts In March 2017, the client for the Atwood Osprey exercised its option to drill an additional well at an operating day rate of $185,000 . Drilling services commenced on the option well in mid-April and is estimated to be completed in June 2017. 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 . Effective February 1, 2017 and continuing until the contract end date of approximately November 12, 2017, the operating day rate is $595,000 .

EARNINGS (LOSS) PER COMMON SHAR

EARNINGS (LOSS) PER COMMON SHARE	6 Months Ended
	Mar. 31, 2017
Earnings Per Share [Abstract]
EARNINGS (LOSS) PER COMMON SHARE	EARNINGS (LOSS) PER COMMON SHARE The computation of basic and diluted earnings (loss) per share for the three and six months ended March 31, 2017 and 2016 is as follows: Three Months Ended Six Months Ended (In thousands, except per share amounts) Net (Loss) Shares Per Share Amount Net (Loss) Shares Per Share Amount March 31, 2017 Basic (loss) earnings per share $ (28,862 ) 78,270 $ (0.37 ) $ (19,191 ) 71,504 $ (0.27 ) Effect of dilutive securities: Restricted stock and performance units — — — — — — Diluted (loss) earnings per share $ (28,862 ) 78,270 $ (0.37 ) $ (19,191 ) 71,504 $ (0.27 ) March 31, 2016 Basic earnings per share $ 122,437 64,781 1.89 161,518 64,739 $ 2.49 Effect of dilutive securities: Restricted stock and performance units — 44 — — 131 — Diluted earnings per share $ 122,437 64,825 $ 1.89 $ 161,518 64,870 $ 2.49 Potential dilutive common shares outstanding stock-based awards totaling 911,370 and 505,372 shares were considered in the calculation of diluted weighted-average shares for the three and six months ended March 31, 2017 , respectively; however, due to our net loss position, those shares have not been reflected above because they would be anti-dilutive. For the purpose of calculating diluted earnings per share for the three and six months ended March 31, 2017 , there were approximately 2,783,284 and 3,189,282 anti-dilutive securities, respectively, and for the three and six months ended March 31, 2016 , there were approximately 2,090,399 and 2,085,649 anti-dilutive securities, respectively.

PROPERTY AND EQUIPMENT

PROPERTY AND EQUIPMENT	6 Months Ended
	Mar. 31, 2017
Property, Plant and Equipment [Abstract]
PROPERTY AND EQUIPMENT	PROPERTY AND EQUIPMENT A summary of property and equipment by classification is as follows: (In thousands) March 31, September 30, Drilling vessels and equipment $ 3,741,648 $ 3,898,686 Construction work in progress 1,011,063 857,572 Drill pipe 51,328 52,543 Office equipment and other 39,173 39,213 Total cost 4,843,212 4,848,014 Less: Accumulated depreciation (699,822 ) (720,318 ) Property and equipment, net $ 4,143,390 $ 4,127,696 Impairments In February 2017, we agreed with Woodside Energy Ltd (“Woodside”) to (i) substitute the Atwood Condor for the Atwood Osprey, offshore Australia, for approximately 550 days starting, at the latest, March 2018 and (ii) utilize the Atwood Osprey for an additional exploration well with an estimated duration of approximately 100 days . As a result, the Atwood Condor will join the Atwood Osprey and the Atwood Eagle as one of our three rigs available to provide drilling services to clients in the Australian/Southeast Asian markets. Due to the age, specifications and marketability of the Atwood Eagle relative to the Atwood Condor and Atwood Osprey, the Atwood Eagle is positioned behind each of those two rigs to bid for contracting opportunities in the Australian/Southeast Asian markets. Based on the foregoing and our ongoing review of market conditions in the region as we continue into 2017, we determined that the Atwood Eagle is less likely to obtain future drilling contracts that would provide sufficient financial returns to justify keeping the drilling rig in a marketable condition within our existing fleet. Based on our analysis, we concluded that the Atwood Eagle and its materials and supplies were impaired as of March 31, 2017, 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. The Atwood Falcon completed the contract under which it was working in early March 2016. Based on the lack of contracting opportunities and the further deterioration of commodity prices, we determined that it was not likely that additional work would be obtained in the foreseeable future. Based on our analysis, we concluded that the Atwood Falcon and its materials and supplies were impaired as of December 31, 2015, and we wrote them down to their approximate salvage value. We recorded a non-cash impairment charge of approximately $64.7 million ( $64.7 million net of tax, or $1.00 per diluted share), which is included in Asset Impairment on the Unaudited Condensed Consolidated Statement of Operations for the three months ended December 31, 2015. This impairment charge includes a write-down of property and equipment of $53.0 million and a write-down of our inventory of materials and supplies specific to the Atwood Falcon of $11.7 million . In April 2016, we completed the sale of the Atwood Falcon. As of March 31, 2017 , we had expended approximately $972 million towards our two ultra-deepwater drillships under construction at the Daewoo Shipbuilding and Marine Engineering Co. ("DSME") shipyard in South Korea. Remaining expected capital expenditure for these two drillships under construction totaled approximately $298 million at March 31, 2017 . On December 5, 2016, we entered into supplemental agreements (collectively, "Supplemental Agreement No. 5") to the construction contracts with DSME which delay our requirements to take delivery of our two newbuild ultra-deepwater drillships, the Atwood Admiral and the Atwood Archer , by two years to September 30, 2019 and June 30, 2020 , respectively. Supplemental Agreement No. 5 amends all material terms of the previous supplemental agreements. In consideration of Supplemental Agreement No. 5, we made a payment of $125 million for the Atwood Archer on December 13, 2016 and will make an additional interim payment of $15 million on the earlier of June 30, 2018 or the delivery date. With respect to the Atwood Admiral we will make a payment of $10 million on the earlier of September 30, 2017 or the delivery date. Remaining milestone payments, $83.9 million for the Atwood Admiral and $165 million for the Atwood Archer, have been extended until December 30, 2022 through our ability to choose to finance such amounts in the form of promissory notes to be entered into on the delivery dates for each vessel bearing interest at a rate of 5% per annum and to be secured by a mortgage on the respective drillship. We have the option to take earlier delivery of each vessel, upon 45 days' notice. Other Income During the six months ended March 31, 2016 , we 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.

DEBT

DEBT	6 Months Ended
	Mar. 31, 2017
Debt Disclosure [Abstract]
DEBT	DEBT A summary of long-term debt is as follows: (In thousands) March 31, September 30, 6.5% Senior Notes due 2020 ("Senior Notes") aggregate principal amount $ 448,650 $ 448,650 Senior Notes unamortized premium 2,797 3,245 Senior Notes unamortized debt issuance costs (3,380 ) (3,976 ) Total Senior Notes 448,067 447,919 Revolving Credit Facility ("Credit Facility") 850,000 780,000 Total long-term debt $ 1,298,067 $ 1,227,919 Revolving Credit Facility As of March 31, 2017 , our Credit Facility had $1.395 billion of total commitments and $850 million of outstanding borrowings. As of March 31, 2017 , we had approximately $545 million available for borrowings under the Credit Facility. Approximately $275 million of the commitments under the Credit Facility mature in May 2018 with the remaining $1.12 billion of the commitments maturing in May 2019. We were in compliance with all financial covenants under the Credit Facility as of March 31, 2017 and September 30, 2016 , and we anticipate that we will continue to be in compliance for at least twelve months subsequent to the date our financial statements are issued. The weighted-average effective interest rate on our long-term debt was approximately 5.0% per annum as of March 31, 2017 . The effective rate was determined after giving consideration to the effect of our interest rate swaps accounted for as hedges and the amortization of our debt issuance costs and debt premiums. Interest capitalized for the three and six months ended March 31, 2017 was approximately $6.5 million and $12.0 million , respectively. Interest capitalized for the three and six months ended March 31, 2016 was approximately $3.8 million and $8.4 million , respectively.

FAIR VALUE OF FINANCIAL INSTRUM

FAIR VALUE OF FINANCIAL INSTRUMENTS	6 Months Ended
	Mar. 31, 2017
Fair Value Disclosures [Abstract]
FAIR VALUE OF FINANCIAL INSTRUMENTS	FAIR VALUE OF FINANCIAL INSTRUMENTS We have certain assets and liabilities that are required to be measured and disclosed at fair value. Fair value is defined as the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. The fair value hierarchy prioritizes inputs to valuation techniques used to measure fair value into three levels. Priority is given to unadjusted quoted prices in active markets for identical assets or liabilities (Level 1) and the lowest priority to unobservable inputs (Level 3). Assets and liabilities measured at fair value are classified based on the lowest level of input that is significant to the fair value measurement. Our assessment of the significance of a particular input to the fair value measurement requires judgment, which may affect the valuation of the fair value of assets and liabilities and their placement within the fair value hierarchy levels. The determination of the fair values, stated below, takes into account the market for our financial assets and liabilities, the associated credit risk and other considerations. We have classified and disclosed fair value measurements using the following levels of the fair value hierarchy: Level 1 : Unadjusted quoted prices in active markets that are accessible at the measurement date for identical, unrestricted assets or liabilities. Level 2 : Quoted prices in markets that are not active, or inputs which are observable, either directly or indirectly, for substantially the full term of the asset or liability. Level 3 : Measurement based on prices or valuation models that require inputs that are both significant to the fair value measurement and less observable for objective sources (i.e., supported by little or no market activity). Fair value of Certain Assets and Liabilities The fair value of cash, accounts receivable and accounts payable approximate fair value because of their short term maturities. Fair Value of Financial Instruments Independent third party services are used to determine the fair value of our financial instruments using quoted market prices and observable inputs. When independent third party services are used, we obtain an understanding of how the fair values are derived and selectively corroborate fair values by reviewing other readily available market based sources of information. Long-term Debt— Our long-term debt consists of both our Senior Notes and our Credit Facility. Senior Notes - The carrying value of our Senior Notes, net of unamortized premium, is $451.4 million ( $448.7 million principal amount) while the fair value of our Senior Notes was $404.9 million at March 31, 2017 . The fair value is determined by a market approach using quoted period-end bond prices. We have classified this as a Level 2 fair value measurement as valuation inputs for fair value measurements are quoted market prices at March 31, 2017 that can only be obtained from independent third party sources. The fair value amount has been calculated using these quoted prices. However, no assurance can be given that the fair value would be the amount realized in an active market exchange. Credit Facility - Our Credit Facility is variable-rate and the carrying amounts of our variable-rate debt approximates fair value because such debt bears short-term, market-based interest rates. We have classified the fair value measurement of this instrument as Level 2 as valuation inputs for purposes of determining our fair value disclosure are readily available published Eurodollar rates. Derivative financial instruments— Our derivative financial instruments consist of our interest rate swaps. We record our derivative contracts at fair value on our Unaudited Condensed Consolidated Balance Sheet. The fair values of our interest rate swaps are based upon valuations calculated by an independent third party. The derivatives were valued according to the "Market approach" where possible, and the "Income approach" otherwise. A third party independently valued each instrument using forward price data obtained from reputable data providers (e.g., Bloomberg and Reuters) and reviewed market activity and similarity of pricing terms to determine appropriate reliability level assertions for each instrument. The contribution of the credit valuation adjustment to total fair value is less than 1% for all derivatives and is therefore not significant. Based on valuation inputs for fair value measurement and independent review performed by third party consultants, we have classified our derivative contracts as Level 2 as they were valued based upon observable inputs from dealer markets. The following table sets forth the estimated fair value of our derivative financial instruments, for which we elected hedge accounting, as of March 31, 2017 and September 30, 2016 , by location and hedge type, which are measured and recorded at fair value on a recurring basis: (In thousands) Balance Sheet Classification March 31, 2017 September 30, 2016 Derivative assets designated as cash flow hedging instruments: Short-term interest rate swaps asset Prepaid expenses, deferred costs and other current assets $ 66 $ — Derivative liabilities designated as cash flow hedging instruments: Short-term interest rate swaps Accrued liabilities — (1,312 ) Long-term interest rate swaps Other long-term liabilities (99 ) (482 ) Total derivative contracts, net $ (33 ) $ (1,794 )

SHARE-BASED COMPENSATION

SHARE-BASED COMPENSATION	6 Months Ended
	Mar. 31, 2017
Disclosure of Compensation Related Costs, Share-based Payments [Abstract]
SHARE-BASED COMPENSATION	SHARE-BASED COMPENSATION A summary of our share-based compensation expense recognized during the six months ended March 31, 2017 and 2016 and unrecognized compensation cost and remaining weighted-average service period as of March 31, 2017 and 2016 is as follows: Six Months Ended March 31, (In thousands, except average service periods) 2017 2016 Share-based compensation recognized $ 7,566 $ 5,009 Unrecognized compensation cost, net of estimated forfeitures 22,901 21,469 Remaining weighted-average service period (years) 1.8 2.1 Restricted Stock Units During the six months ended March 31, 2017 , we granted to certain employees and our non-employee directors, restricted stock units that are subject to vesting conditions. The grant date fair value of these awards was based on the fair value of our common stock on the date of grant. A summary of our restricted stock activity for the six months ended March 31, 2017 is as follows: Number of Shares (000s) Weighted Average Fair Value Unvested as of October 1, 2016 1,515 $ 21.96 Granted 1,126 7.92 Vested (193 ) 42.44 Forfeited (44 ) 21.29 Unvested as of March 31, 2017 2,404 13.75 Performance Units During the six months ended March 31, 2017 , we granted to certain employees share-based awards that are subject to market-based performance conditions ("Performance Units"). The grant date fair value of these Performance Units was determined through use of the Monte Carlo simulation method. A summary of Performance Units stock activity for the six months ended March 31, 2017 is as follows: Number of Shares (000s) Weighted Average Fair Value Unvested as of October 1, 2016 426 $ 26.69 Granted 360 8.50 Vested (47 ) 53.55 Forfeited (16 ) 53.55 Unvested as of March 31, 2017 723 15.29 Stock Options A summary of stock option activity for the six months ended March 31, 2017 is as follows: Number of Weighted Weighted Aggregate Outstanding as of October 1, 2016 617 $ 35.47 3.4 $ (16,533 ) Granted — — — — Exercised — — — — Forfeited — — — — Expired (62 ) 26.02 — (1,025 ) Outstanding as of March 31, 2017 555 36.53 3.2 (14,989 ) Exercisable as of March 31, 2017 555 36.53 3.2 (14,989 )

INCOME TAXES

INCOME TAXES	6 Months Ended
	Mar. 31, 2017
Income Tax Disclosure [Abstract]
INCOME TAXES	INCOME TAXES We have historically calculated the provision for income taxes during interim reporting periods by applying an estimate of the annual effective tax rate for the full fiscal year to “ordinary” income or loss (pretax income or loss excluding unusual or infrequently occurring discrete items) for the reporting period. Beginning with the prior reporting period, we used a discrete effective tax rate method to calculate taxes for the three months ended March 31, 2017 . We determined that since small changes in estimated “ordinary” income would result in significant changes in the estimated annual effective tax rate that the historical annualized method would not provide a reliable estimate for the three months ended March 31, 2017 . We anticipate that we will utilize the discrete effective tax rate method to calculate taxes for the remainder of the fiscal year. Our estimated consolidated effective income tax rate for the three and six months ended March 31, 2017 was approximately (6)% and (26)% , respectively, as compared to 10% and 13% for the three and six months ended March 31, 2016 , respectively. The effective tax rate for the six months ended March 31, 2017 was lower than the rate for the six months ended March 31, 2016 , primarily due to a significant drop in pre-tax earnings due primarily to the non-cash impairment charge against the Atwood Eagle as the charge did not result in a corresponding reduction to our provision for income tax. Our effective tax rate was lower than the U.S. statutory rate primarily due to the non-cash impairment charge against the Atwood Eagle in addition to the Company working in certain lower tax rate jurisdictions outside the United States. We record estimated accrued interest and penalties related to uncertain tax positions as income tax expense. As of March 31, 2017 , we had approximately $16.4 million of reserves for uncertain tax positions, including estimated accrued interest and penalties of $3.7 million , which are included in Other long-term liabilities in the Unaudited Condensed Consolidated Balance Sheet. None of our reserves for uncertain tax positions relate to timing differences. All of the net uncertain tax liabilities would affect the effective tax rate if realized.

COMMITMENTS AND CONTINGENCIES

COMMITMENTS AND CONTINGENCIES	6 Months Ended
	Mar. 31, 2017
Commitments and Contingencies Disclosure [Abstract]
COMMITMENTS AND CONTINGENCIES	COMMITMENTS AND CONTINGENCIES Litigation We are party to a number of lawsuits which are ordinary, routine litigation incidental to our business, the outcome of which is not expected to have, either individually or in the aggregate, a material adverse effect on our consolidated financial position, results of operations or cash flows.

SHAREHOLDERS' EQUITY

SHAREHOLDERS' EQUITY	6 Months Ended
	Mar. 31, 2017
Equity [Abstract]
SHAREHOLDERS' EQUITY	SHAREHOLDERS' EQUITY Equity Offering On January 13, 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.

SUBSEQUENT EVENTS

SUBSEQUENT EVENTS	6 Months Ended
	Mar. 31, 2017
Subsequent Events [Abstract]
SUBSEQUENT EVENTS	SUBSEQUENT EVENTS 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. See Note 4 to the Unaudited Condensed Consolidated Financial Statements in Item 1 of Part I of this Quarterly Report.

UNAUDITED INTERIM INFORMATION (

UNAUDITED INTERIM INFORMATION (Policies)	6 Months Ended
	Mar. 31, 2017
Accounting Policies [Abstract]
Recently adopted and issued accounting pronouncements	Recently adopted accounting pronouncements In August 2016, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update (ASU) 2016-15, Statement of Cash Flows (Topic 230): Classification of Certain Cash Receipts and Cash Payments. The ASU is intended to reduce diversity in practice in how certain cash receipts and cash payments are presented in the statement of cash flows. The new guidance clarifies the classification of cash activity related to: (1) debt prepayment or debt extinguishment costs, (2) settlement of zero-coupon debt instruments, (3) contingent consideration payments made after a business combination, (4) proceeds from the settlement of insurance claims, (5) proceeds from the settlement of corporate and bank-owned life insurance policies, (6) distributions received from equity-method investments, and (7) beneficial interests in securitization transactions. This update is effective for annual and interim periods beginning after December 15, 2017. Effective October 1, 2016, we elected to early adopt ASU 2016-15. The adoption of ASU 2016-15 did not have an impact on our Unaudited Condensed Consolidated Statements of Cash Flows. In March 2016, the FASB issued ASU 2016-09, Compensation - Stock Compensation (Topic 718): Improvements to Employee Share-Based Payment Accounting, as part of its simplification initiative. The ASU simplifies several aspects of the accounting for employee share-based payment transactions, including the accounting for income taxes, classification of excess tax benefits on the statements of cash flows, forfeitures, statutory tax withholding requirements, classification of awards as either equity or liabilities, and classification of employee taxes paid on the statements of cash flows when an employer withholds shares for tax-withholding purposes. The amendments in this update are effective for annual periods beginning after December 15, 2016, and interim periods within those annual periods. The standard contains various amendments, each requiring a specific method of adoption, and designates whether each amendment should be adopted using a retrospective, modified retrospective, or prospective transition method. Effective October 1, 2016, we elected to early adopt the ASU. The amendments within the ASU relate to the timing of when excess tax benefits are recognized and the accounting for forfeitures. We adopted this ASU using a modified retrospective method. In accordance with this method, we have recorded a cumulative-effect adjustment in our Unaudited Condensed Consolidated Balance Sheet as of October 1, 2016, relating to the timing of recognition of excess tax benefits, of $6.6 million to the beginning Retained earnings that was offset by an equal increase to Deferred tax assets valuation allowance of the same amount resulting in no impact on Retained earnings. We also recorded a cumulative-effect adjustment in our Unaudited Condensed Consolidated Balance Sheet as of October 1, 2016, to reflect actual forfeitures versus the previously-estimated forfeiture rate, of $1.0 million reduction to the Retained earnings with an offset to Paid-in capital. The amendments within the ASU related to the recognition of excess tax benefits and tax shortfalls in the income statement and presentation of excess tax benefits on the statements of cash flows were adopted prospectively, with no impact to prior periods. In November 2015, the FASB issued ASU 2015-17, Income Taxes (Topic 740): Amendments for the Balance Sheet Classification of Deferred Income Taxes. The amended guidance requires the classification of all deferred tax assets and liabilities as noncurrent on the balance sheet instead of separating deferred taxes into current and noncurrent amounts. Deferred tax assets and liabilities will continue to be offset and presented as a single amount under the amended guidance. The effective date for public business entities is for financial statements issued for annual periods beginning after December 15, 2016, and interim periods within those annual periods. Effective October 1, 2016, we elected to early adopt the ASU on a prospective basis. The adoption of the ASU did not have a material impact on our Condensed Consolidated Balance Sheet. Recently issued accounting pronouncements In October 2016, the FASB issued ASU 2016-16, Income Taxes (Topic 740): Intra-Entity Transfers of Assets Other Than Inventory. The ASU eliminates the exception to defer the tax effect for all intra-entity sales of assets other than inventory until the transferred asset is sold to a third party or otherwise recovered through use. As a result, a reporting entity would recognize the tax expense from the sale of the asset in the seller’s tax jurisdiction when the transfer occurs, even though the pre-tax effects of that transaction are eliminated in consolidation. Any deferred tax asset that arises in the buyer’s jurisdiction would also be recognized at the time of the transfer. This update is effective for annual and interim periods beginning after December 15, 2017. We are currently evaluating what impact the adoption of this guidance will have on our financial statements or disclosures in our financial statements. In June 2016, FASB issued ASU 2016-13, Financial Instruments - Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments. The ASU introduces a new model for recognizing credit losses on financial instruments based on an estimate of current expected credit losses. The new model will apply to: (1) loans, accounts receivable, trade receivables, and other financial assets measured at amortized cost, (2) loan commitments and certain other off-balance sheet credit exposures, (3) debt securities and other financial assets measured at fair value through other comprehensive income/(loss), and (4) beneficial interests in securitized financial assets. This update is effective for annual and interim periods beginning after December 15, 2019. We are currently evaluating what impact the adoption of this guidance will have on our financial statements or disclosures in our financial statements. In February 2016, the FASB issued ASU 2016-02, Leases (Topic 842): Amendments to the FASB Accounting Standards Codification. The amendments require an entity to recognize lease assets and lease liabilities on the balance sheet and to disclose key qualitative and quantitative information about the entity's leasing arrangements. This update is effective for annual and interim periods beginning after December 15, 2018, with early adoption permitted. A modified retrospective approach is required. We are currently evaluating what impact the adoption of this guidance will have on our financial statements or disclosures in our financial statements. In August 2014, the FASB issued ASU 2014-15, Presentation of Financial Statements-Going Concern (Subtopic 205-40): Disclosure of Uncertainties about an Entity’s Ability to Continue as a Going Concern. The new guidance requires management to assess a company’s ability to continue as a going concern and to provide related footnote disclosures in certain circumstances. Disclosures are required when conditions give rise to substantial doubt. Substantial doubt is deemed to exist when it is probable that the company will be unable to meet its obligations within one year from the financial statement issuance date. The new guidance is effective for the annual period ending after December 15, 2016, and all annual and interim periods thereafter. We are currently evaluating what impact the adoption of this guidance will have on our financial statements or disclosures in our financial statements. In May 2014, the FASB issued ASU 2014-09, Revenues from Contracts with Customers (Topic 606): A new guidance intended to change the criteria for recognition of revenue. The core principle of the guidance is that an entity should recognize revenue to depict the transfer of promised goods or services to clients in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. The guidance is effective for annual reporting periods beginning after December 15, 2017, including interim periods within that reporting period. We have not yet adopted nor selected a transition method and are currently evaluating what impact the adoption of this guidance will have on our financial statements or disclosures in our financial statements.
Fair value of financial Instruments	We have certain assets and liabilities that are required to be measured and disclosed at fair value. Fair value is defined as the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. The fair value hierarchy prioritizes inputs to valuation techniques used to measure fair value into three levels. Priority is given to unadjusted quoted prices in active markets for identical assets or liabilities (Level 1) and the lowest priority to unobservable inputs (Level 3). Assets and liabilities measured at fair value are classified based on the lowest level of input that is significant to the fair value measurement. Our assessment of the significance of a particular input to the fair value measurement requires judgment, which may affect the valuation of the fair value of assets and liabilities and their placement within the fair value hierarchy levels. The determination of the fair values, stated below, takes into account the market for our financial assets and liabilities, the associated credit risk and other considerations. We have classified and disclosed fair value measurements using the following levels of the fair value hierarchy: Level 1 : Unadjusted quoted prices in active markets that are accessible at the measurement date for identical, unrestricted assets or liabilities. Level 2 : Quoted prices in markets that are not active, or inputs which are observable, either directly or indirectly, for substantially the full term of the asset or liability. Level 3 : Measurement based on prices or valuation models that require inputs that are both significant to the fair value measurement and less observable for objective sources (i.e., supported by little or no market activity).
Income Taxes	We have historically calculated the provision for income taxes during interim reporting periods by applying an estimate of the annual effective tax rate for the full fiscal year to “ordinary” income or loss (pretax income or loss excluding unusual or infrequently occurring discrete items) for the reporting period.

EARNINGS (LOSS) PER COMMON SH20

EARNINGS (LOSS) PER COMMON SHARE (Tables)	6 Months Ended
	Mar. 31, 2017
Earnings Per Share [Abstract]
Computation of Basic and Diluted Earnings Per Share	The computation of basic and diluted earnings (loss) per share for the three and six months ended March 31, 2017 and 2016 is as follows: Three Months Ended Six Months Ended (In thousands, except per share amounts) Net (Loss) Shares Per Share Amount Net (Loss) Shares Per Share Amount March 31, 2017 Basic (loss) earnings per share $ (28,862 ) 78,270 $ (0.37 ) $ (19,191 ) 71,504 $ (0.27 ) Effect of dilutive securities: Restricted stock and performance units — — — — — — Diluted (loss) earnings per share $ (28,862 ) 78,270 $ (0.37 ) $ (19,191 ) 71,504 $ (0.27 ) March 31, 2016 Basic earnings per share $ 122,437 64,781 1.89 161,518 64,739 $ 2.49 Effect of dilutive securities: Restricted stock and performance units — 44 — — 131 — Diluted earnings per share $ 122,437 64,825 $ 1.89 $ 161,518 64,870 $ 2.49

PROPERTY AND EQUIPMENT (Tables)

PROPERTY AND EQUIPMENT (Tables)	6 Months Ended
	Mar. 31, 2017
Property, Plant and Equipment [Abstract]
Summary of Property and Equipment by Classification	A summary of property and equipment by classification is as follows: (In thousands) March 31, September 30, Drilling vessels and equipment $ 3,741,648 $ 3,898,686 Construction work in progress 1,011,063 857,572 Drill pipe 51,328 52,543 Office equipment and other 39,173 39,213 Total cost 4,843,212 4,848,014 Less: Accumulated depreciation (699,822 ) (720,318 ) Property and equipment, net $ 4,143,390 $ 4,127,696

DEBT (Tables)

DEBT (Tables)	6 Months Ended
	Mar. 31, 2017
Debt Disclosure [Abstract]
Summary of Long-Term Debt	A summary of long-term debt is as follows: (In thousands) March 31, September 30, 6.5% Senior Notes due 2020 ("Senior Notes") aggregate principal amount $ 448,650 $ 448,650 Senior Notes unamortized premium 2,797 3,245 Senior Notes unamortized debt issuance costs (3,380 ) (3,976 ) Total Senior Notes 448,067 447,919 Revolving Credit Facility ("Credit Facility") 850,000 780,000 Total long-term debt $ 1,298,067 $ 1,227,919

FAIR VALUE OF FINANCIAL INSTR23

FAIR VALUE OF FINANCIAL INSTRUMENTS (Tables)	6 Months Ended
	Mar. 31, 2017
Fair Value Disclosures [Abstract]
Estimated Fair Value Of Financial Instruments	The following table sets forth the estimated fair value of our derivative financial instruments, for which we elected hedge accounting, as of March 31, 2017 and September 30, 2016 , by location and hedge type, which are measured and recorded at fair value on a recurring basis: (In thousands) Balance Sheet Classification March 31, 2017 September 30, 2016 Derivative assets designated as cash flow hedging instruments: Short-term interest rate swaps asset Prepaid expenses, deferred costs and other current assets $ 66 $ — Derivative liabilities designated as cash flow hedging instruments: Short-term interest rate swaps Accrued liabilities — (1,312 ) Long-term interest rate swaps Other long-term liabilities (99 ) (482 ) Total derivative contracts, net $ (33 ) $ (1,794 )

SHARE-BASED COMPENSATION (Table

SHARE-BASED COMPENSATION (Tables)	6 Months Ended
	Mar. 31, 2017
Disclosure of Compensation Related Costs, Share-based Payments [Abstract]
Schedule of Unrecognized Compensation Cost	A summary of our share-based compensation expense recognized during the six months ended March 31, 2017 and 2016 and unrecognized compensation cost and remaining weighted-average service period as of March 31, 2017 and 2016 is as follows: Six Months Ended March 31, (In thousands, except average service periods) 2017 2016 Share-based compensation recognized $ 7,566 $ 5,009 Unrecognized compensation cost, net of estimated forfeitures 22,901 21,469 Remaining weighted-average service period (years) 1.8 2.1
Summary of Restricted Stock Activity	A summary of our restricted stock activity for the six months ended March 31, 2017 is as follows: Number of Shares (000s) Weighted Average Fair Value Unvested as of October 1, 2016 1,515 $ 21.96 Granted 1,126 7.92 Vested (193 ) 42.44 Forfeited (44 ) 21.29 Unvested as of March 31, 2017 2,404 13.75
Summary of Performance Stock Activity	A summary of Performance Units stock activity for the six months ended March 31, 2017 is as follows: Number of Shares (000s) Weighted Average Fair Value Unvested as of October 1, 2016 426 $ 26.69 Granted 360 8.50 Vested (47 ) 53.55 Forfeited (16 ) 53.55 Unvested as of March 31, 2017 723 15.29
Stock Option Activity	A summary of stock option activity for the six months ended March 31, 2017 is as follows: Number of Weighted Weighted Aggregate Outstanding as of October 1, 2016 617 $ 35.47 3.4 $ (16,533 ) Granted — — — — Exercised — — — — Forfeited — — — — Expired (62 ) 26.02 — (1,025 ) Outstanding as of March 31, 2017 555 36.53 3.2 (14,989 ) Exercisable as of March 31, 2017 555 36.53 3.2 (14,989 )

UNAUDITED INTERIM INFORMATION25

UNAUDITED INTERIM INFORMATION (Details) - USD ($) $ in Thousands	Mar. 31, 2017	Oct. 01, 2016
Retained Earnings
New Accounting Pronouncements or Change in Accounting Principle [Line Items]
Cumulative effect of accounting change (Note 1)	$ (964)
Paid-in Capital
New Accounting Pronouncements or Change in Accounting Principle [Line Items]
Cumulative effect of accounting change (Note 1)	$ 964
New Accounting Pronouncement, Early Adoption, Effect | Accounting Standards Update 2016-09
New Accounting Pronouncements or Change in Accounting Principle [Line Items]
Deferred tax assets		$ 6,600
New Accounting Pronouncement, Early Adoption, Effect | Retained Earnings | Accounting Standards Update 2016-09
New Accounting Pronouncements or Change in Accounting Principle [Line Items]
Cumulative effect of accounting change (Note 1)		(6,600)
Actual forfeiture versus the previously estimated rate | New Accounting Pronouncement, Early Adoption, Effect | Retained Earnings | Accounting Standards Update 2016-09
New Accounting Pronouncements or Change in Accounting Principle [Line Items]
Cumulative effect of accounting change (Note 1)		(1,000)
Actual forfeiture versus the previously estimated rate | New Accounting Pronouncement, Early Adoption, Effect | Paid-in Capital | Accounting Standards Update 2016-09
New Accounting Pronouncements or Change in Accounting Principle [Line Items]
Cumulative effect of accounting change (Note 1)		$ 1,000

ACCOUNTS RECEIVABLE AND LONG 26

ACCOUNTS RECEIVABLE AND LONG TERM CONTRACTS (Details) - USD ($)	Feb. 01, 2017	Mar. 31, 2017	Jan. 31, 2017	Mar. 31, 2017	Mar. 31, 2016	Mar. 31, 2017	Mar. 31, 2016	Sep. 30, 2016
Accounts, Notes, Loans and Financing Receivable [Line Items]
Allowance for doubtful accounts		$ 2,300,000		$ 2,300,000		$ 2,300,000		$ 1,200,000
Provision for doubtful accounts				$ 2,400,000	$ 800,000	$ 2,369,000	$ 1,141,000
Atwood Osprey
Accounts, Notes, Loans and Financing Receivable [Line Items]
Contract terms, daily operating rate, receivable, amount		$ 185,000
Atwood Achiever
Accounts, Notes, Loans and Financing Receivable [Line Items]
Contract terms, daily operating rate, receivable, amount	$ 595,000
Contract terms, proceeds from contract term adjustment, amount			$ 48,100,000

EARNINGS (LOSS) PER COMMON SH27

EARNINGS (LOSS) PER COMMON SHARE (Details) - USD ($) $ / shares in Units, $ in Thousands	3 Months Ended		6 Months Ended
	Mar. 31, 2017	Mar. 31, 2016	Mar. 31, 2017	Mar. 31, 2016
Net (Loss) Income
Basic (loss) earnings per share	$ (28,862)	$ 122,437	$ (19,191)	$ 161,518
Restricted stock and performance units	0	0	0	0
Diluted (loss) earnings per share	$ (28,862)	$ 122,437	$ (19,191)	$ 161,518
Shares
Basic earnings per share (in shares)	78,270,000	64,781,000	71,504,000	64,739,000
Restricted stock and performance units (in shares)	0	44,000	0	131,000
Diluted (loss) earnings per share (in shares)	78,270,000	64,825,000	71,504,000	64,870,000
Per Share Amount
Basic earnings per share (in dollars per share)	$ (0.37)	$ 1.89	$ (0.27)	$ 2.49
Restricted stock and performance units (in dollars per share)	0	0	0	0
Diluted (loss) earnings per share (in dollars per share)	$ (0.37)	$ 1.89	$ (0.27)	$ 2.49
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Outstanding stock options, excluded in the calculation of earnings per share (in shares)	2,783,284	2,090,399	3,189,282	2,085,649
Stock Options
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Outstanding stock options, excluded in the calculation of earnings per share (in shares)	911,370		505,372

PROPERTY AND EQUIPMENT - Summar

PROPERTY AND EQUIPMENT - Summary of Property and Equipment by Classification (Details) - USD ($) $ in Thousands	Mar. 31, 2017	Sep. 30, 2016
Property, Plant and Equipment
Total cost	$ 4,843,212	$ 4,848,014
Less: Accumulated depreciation	(699,822)	(720,318)
Property and equipment, net	4,143,390	4,127,696
Drilling vessels and equipment
Property, Plant and Equipment
Total cost	3,741,648	3,898,686
Construction work in progress
Property, Plant and Equipment
Total cost	1,011,063	857,572
Drill pipe
Property, Plant and Equipment
Total cost	51,328	52,543
Office equipment and other
Property, Plant and Equipment
Total cost	$ 39,173	$ 39,213

PROPERTY AND EQUIPMENT - Narra

PROPERTY AND EQUIPMENT - Narrative (Details) $ / shares in Units, $ in Thousands	Dec. 13, 2016USD ($)	Dec. 05, 2016drillship	Feb. 28, 2017rig	Mar. 31, 2017USD ($)drillship	Mar. 31, 2016USD ($)	Dec. 31, 2015USD ($)$ / shares	Mar. 31, 2017USD ($)drillship	Mar. 31, 2016USD ($)$ / shares
Property, Plant and Equipment
Asset impairment				$ 58,962	$ 708		$ 58,962	$ 65,432
Construction in Progress, Ultra-Deepwater Drillships | Capital Addition Purchase Commitments
Property, Plant and Equipment
Construction in progress, gross				$ 972,000			$ 972,000
Number of drillships with options to delay delivery | drillship				2			2
Wells and Related Equipment and Facilities
Property, Plant and Equipment
Commitments on drilling units under construction							$ 298,000
Atwood Osprey
Property, Plant and Equipment
Insurance recoveries								18,000
Insurance recoveries, net of tax								$ 18,000
Insurance recoveries effect on earnings per share, after tax (in dollars per share) | $ / shares								$ 0.28
Atwood Eagle
Property, Plant and Equipment
Asset impairment							59,000
Impairment, net of tax						$ 57,600
Impairment effect on earnings per share, after tax (in dollars per share) | $ / shares						$ 0.74
Atwood Eagle | Equipment
Property, Plant and Equipment
Asset impairment							49,600
Atwood Eagle | Inventory
Property, Plant and Equipment
Asset impairment							8,400
Atwood Falcon
Property, Plant and Equipment
Asset impairment						$ 64,700
Impairment, net of tax						$ 64,700
Impairment effect on earnings per share, after tax (in dollars per share) | $ / shares						$ 1
Atwood Falcon | Equipment
Property, Plant and Equipment
Asset impairment						$ 53,000
Atwood Falcon | Inventory
Property, Plant and Equipment
Asset impairment						$ 11,700
Atwood Admiral and Atwood Archer | Ultra-Deepwater Drillships | Capital Addition Purchase Commitments
Property, Plant and Equipment
Number of drillships with options to delay delivery | drillship		2
Construction in progress, period of delivery delay		2 years
Atwood Archer | Capital Addition Purchase Commitments
Property, Plant and Equipment
Payments for construction projects	$ 125,000
Payment for construction in process, future payment, amount							15,000
Atwood Archer | Capital Addition Purchase Commitments | Final Payment
Property, Plant and Equipment
Commitments on drilling units under construction							$ 165,000
Atwood Admiral
Property, Plant and Equipment
Accelerated delivery notice period (in days)							45 days
Atwood Admiral | Capital Addition Purchase Commitments
Property, Plant and Equipment
Payment for construction in process, future payment, amount							$ 10,000
Atwood Admiral | Capital Addition Purchase Commitments | Final Payment
Property, Plant and Equipment
Commitments on drilling units under construction							$ 83,900
Promissory Note | Ultra-Deepwater Drillships
Property, Plant and Equipment
Stated interest rate				5.00%			5.00%
Woodside Energy Ltd.
Property, Plant and Equipment
Contract Term, Contract Initiation Transaction Costs							$ 1,000
Woodside Energy Ltd. | Atwood Osprey
Property, Plant and Equipment
Contract term, duration of contract			100 days
Woodside Energy Ltd. | Drilling Servicing Contracts | Atwood Osprey
Property, Plant and Equipment
Contract term, duration of contract			550 days
Australia/Southeast Asia [Member]
Property, Plant and Equipment
Number of drilling rigs | rig			3

DEBT - Summary of Long-Term Deb

DEBT - Summary of Long-Term Debt (Details) - USD ($) $ in Thousands	Mar. 31, 2017	Sep. 30, 2016
Debt Instrument [Line Items]
Long-term debt	$ 1,298,067	$ 1,227,919
Senior Notes | 6.5% Senior Notes
Debt Instrument [Line Items]
6.5% Senior Notes due 2020 (Senior Notes) aggregate principal amount	448,650	448,650
Senior Notes unamortized premium	2,797	3,245
Senior Notes unamortized debt issuance costs	(3,380)	(3,976)
Long-term debt	$ 448,067	447,919
Stated interest rate	6.50%
Revolving Credit Facility
Debt Instrument [Line Items]
Long-term debt	$ 850,000	$ 780,000

DEBT - Narrative (Details)

DEBT - Narrative (Details) - Revolving Credit Facility - USD ($)	3 Months Ended		6 Months Ended
	Mar. 31, 2017	Mar. 31, 2016	Mar. 31, 2017	Mar. 31, 2016
Line of Credit Facility [Line Items]
Long-term line of credit, maximum borrowing capacity	$ 1,395,000,000		$ 1,395,000,000
Long-term line of credit	850,000,000		850,000,000
Long-term line of credit, remaining borrowing capacity	$ 545,000,000		$ 545,000,000
Weighted average interest rate (percent)	5.00%		5.00%
Interest costs capitalized	$ 6,500,000	$ 3,800,000	$ 12,000,000	$ 8,400,000
Revolving Credit Facility, Maturing May 2019
Line of Credit Facility [Line Items]
Long-term line of credit, maximum borrowing capacity	1,120,000,000		1,120,000,000
Revolving Credit Facility, Maturing May 2018
Line of Credit Facility [Line Items]
Long-term line of credit, maximum borrowing capacity	$ 275,000,000		$ 275,000,000

FAIR VALUE OF FINANCIAL INSTR32

FAIR VALUE OF FINANCIAL INSTRUMENTS - Narrative (Details) - USD ($) $ in Thousands	Mar. 31, 2017	Sep. 30, 2016
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis
Credit valuation adjustment to total fair value percentage (less than)	1.00%
Senior Notes | 6.5% Senior Notes
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis
Long-term debt, carrying value	$ 451,400
Principal amount	448,650	$ 448,650
Long-term debt, fair value	$ 404,900

FAIR VALUE OF FINANCIAL INSTR33

FAIR VALUE OF FINANCIAL INSTRUMENTS - Estimated Fair Value of Financial Instruments (Details) - Fair Value, Measurements, Recurring - USD ($) $ in Thousands	Mar. 31, 2017	Sep. 30, 2016
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis
Total derivative contracts, net	$ (33)	$ (1,794)
Prepaid expenses, deferred costs and other current assets | Interest rate swap | Designated as Hedging Instrument
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis
Derivative assets designated as cash flow hedges	66	0
Accrued liabilities | Interest rate swap | Designated as Hedging Instrument
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis
Derivative liabilities designated as cash flow hedges	0	(1,312)
Other long-term liabilities | Interest rate swap | Designated as Hedging Instrument
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis
Derivative liabilities designated as cash flow hedges	$ (99)	$ (482)

SHARE-BASED COMPENSATION (Sched

SHARE-BASED COMPENSATION (Schedule of Unrecognized Compensation Cost) (Details) - USD ($) $ in Thousands	6 Months Ended
	Mar. 31, 2017	Mar. 31, 2016
Disclosure of Compensation Related Costs, Share-based Payments [Abstract]
Share-based compensation recognized	$ 7,566	$ 5,009
Unrecognized compensation cost, net of estimated forfeitures	$ 22,901	$ 21,469
Remaining weighted-average service period (years)	1 year 9 months 18 days	2 years 1 month 6 days

SHARE-BASED COMPENSATION (Summa

SHARE-BASED COMPENSATION (Summary of Restricted Stock Activity) (Details) - Restricted Stock shares in Thousands	6 Months Ended
	Mar. 31, 2017$ / sharesshares
Number of Shares (000s)
Unvested, Beginning Balance (in shares) | shares	1,515
Granted (in shares) | shares	1,126
Vested (in shares) | shares	(193)
Forfeited (in shares) | shares	(44)
Unvested, Ending Balance (in shares) | shares	2,404
Weighted Average Fair Value
Unvested, Beginning Balance (in dollars per share) | $ / shares	$ 21.96
Granted (in dollars per share) | $ / shares	7.92
Vested (in dollars per share) | $ / shares	42.44
Forfeited (in dollars per share) | $ / shares	21.29
Unvested, Ending Balance (in dollars per share) | $ / shares	$ 13.75

SHARE-BASED COMPENSATION (Sum36

SHARE-BASED COMPENSATION (Summary of Performance Stock Activity) (Details) - Performance Shares shares in Thousands	6 Months Ended
	Mar. 31, 2017$ / sharesshares
Number of Shares (000s)
Unvested, Beginning Balance (in shares) | shares	426
Granted (in shares) | shares	360
Vested (in shares) | shares	(47)
Forfeited (in shares) | shares	(16)
Unvested, Ending Balance (in shares) | shares	723
Weighted Average Fair Value
Unvested, Beginning Balance (in dollars per share) | $ / shares	$ 26.69
Granted (in dollars per share) | $ / shares	8.50
Vested (in dollars per share) | $ / shares	53.55
Forfeited (in dollars per share) | $ / shares	53.55
Unvested, Ending Balance (in dollars per share) | $ / shares	$ 15.29

SHARE-BASED COMPENSATION (Stock

SHARE-BASED COMPENSATION (Stock Option Activity) (Details) - Stock Options - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands	6 Months Ended	12 Months Ended
	Mar. 31, 2017	Sep. 30, 2016
Number of Options (000s)
Outstanding, Beginning Balance (in shares)	617
Granted (in shares)	0
Exercised (in shares)	0
Forfeited (in shares)	0
Expired (in shares)	(62)
Outstanding, Ending Balance (in shares)	555	617
Exercisable, Ending Balance (in shares)	555
Weighted Average Exercise Price
Outstanding, Beginning Balance (in dollars per share)	$ 35.47
Granted (in dollars per share)	0
Exercised (in dollars per share)	0
Forfeited (in dollars per share)	0
Expired (in dollars per share)	26.02
Outstanding, Ending Balance (in dollars per share)	36.53	$ 35.47
Exercisable, Ending Balance (in dollars per share)	$ 36.53
Share-based Compensation Arrangement by Share-based Payment Award, Options, Additional Disclosures [Abstract]
Weighted Average Remaining Contractual Life (Years), Outstanding	3 years 2 months 12 days	3 years 4 months 24 days
Weighted Average Remaining Contractual Life (Years), Exercisable	3 years 2 months 12 days
Aggregate Intrinsic Value, Outstanding	$ (16,533)
Aggregated Intrinsic Value, Expired	(1,025)
Aggregate Intrinsic Value, Outstanding	(14,989)	$ (16,533)
Aggregate Intrinsic Value, Exercisable	$ (14,989)

IINCOME TAXES - Narrative (Deta

IINCOME TAXES - Narrative (Details) - USD ($) $ in Millions	3 Months Ended		6 Months Ended
	Mar. 31, 2017	Mar. 31, 2016	Mar. 31, 2017	Mar. 31, 2016
Income Tax Contingency [Line Items]
Effective income tax rate (percent)	(6.00%)	10.00%	(26.00%)	13.00%
Unrecognized tax benefits	$ 16.4		$ 16.4
Other long-term liabilities
Income Tax Contingency [Line Items]
Estimated accrued interest and penalties	$ 3.7		$ 3.7

SHAREHOLDERS' EQUITY (Details)

SHAREHOLDERS' EQUITY (Details) - USD ($) $ in Thousands	Jan. 13, 2017	Mar. 31, 2017	Mar. 31, 2016
Equity [Abstract]
Shares issued in the public offering (in shares)	15,525,000
Proceeds from Issuance public offering	$ 181,000	$ 180,966	$ 0