Upcoming AWS Coverage on Transocean Post-Earnings Results

LONDON, UK / ACCESSWIRE / February 17, 2017 / Active Wall St. announces its post-earnings coverage on Atwood Oceanics, Inc. (NYSE: ATW). The Company announced its first quarter fiscal 2017 financial results on February 03, 2017. The offshore drilling contractor's earnings doubled on a q-o-q basis. Register with us now for your free membership at: http://www.activewallst.com/register/.

One of Atwood Oceanics' competitors within the Oil & Gas Drilling & Exploration space, Transocean Ltd (NYSE: RIG), announced on February 03, 2017, that it will report earnings for the three and twelve months ended December 31, 2016, on Wednesday, February 22, 2017, following the close of trading on the NYSE. The company will conduct a teleconference starting at 9 a.m. ET on Thursday, February 23, 2017, to discuss the results. AWS will be initiating a research report on Transocean in the coming days.

Today, AWS is promoting its earnings coverage on ATW; touching on RIG. Get our free coverage by signing up to:

http://www.activewallst.com/registration-3/?symbol=ATW

http://www.activewallst.com/registration-3/?symbol=RIG

Earnings Reviewed

For the period ended December 31, 2016, Atwood Oceanics reported net income of $9.7 million, or $0.15 per diluted share, on revenues of $157.6 million 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 Q1 FY16. The Company's results exceeded analysts' consensus for earnings of $0.13 per share and revenue of $154.9 million.

For Q1 FY17, Atwood Oceanics reported revenue efficiency of 96%. The Company's contract drilling costs were $66 million for the reported quarter, excluding reimbursable costs of $7 million, which is at the low end of its guidance provided in November. As of December 31, 2016, Atwood Oceanics contract backlog was $611 million.

Atwood Oceanics' general and administrative expenses totaled $15 million for Q1 FY17 in-line with the Company's prior guidance of $13 million to $16 million. Atwood Oceanics' effective tax rate for the quarter was 20% and tax expense were $2.4 million, consistent with prior guidance.

Recent Drilling Activities

In January 2017, the client for the Atwood Achiever exercised its option provided as part of the "blend and extend" agreement the Company 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 Atwood Oceanics 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 01, 2017 and continuing until the contract end date of approximately November 12, 2017, the operating day rate is $595,000.

In February 2017, Atwood Oceanics amended its drilling services contract with Woodside Energy Ltd 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 the Company for the mobilization of the Atwood Condor to Australia in an amount of either $34.5 million or $36.5 million.

Furthermore, Atwood Oceanics 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. Atwood Oceanics 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.

Financial Position

During Q1 FY17, Atwood Oceanics' capital expenditures totaled $139 million versus $26 million for the previous quarter. This increase over prior guidance is due to the $125 million payment on the Atwood Archer in mid-December as part of the most recent DSME agreement. The Company expect capital expenditures to be approximately $10 million for the Q2 FY17 inclusive of capitalized interest. Total CapEx for full FY17 will be approximately $197 million.

Atwood Oceanics' cash on hand at December 31 was $160 million. The amount drawn under the revolving credit facility at December 31, 2016, increased to $850 million from $780 million at September 30, 2016, leaving $545 million available under the revolver. This resulted in liquidity of $705 million at the end of Q1 FY17 versus $760 million at the end of Q4 FY16.

Subsequent to December 31, 2016, Atwood Oceanics issued, in a public offering, 15,525,000 shares of common stock, resulting in approximately 80.5 million shares outstanding as of February 01, 2017. The net proceeds from the offering were $181.1 million.

Outlook

On the conference call with analysts, Atwood Oceanics noted that the Osprey/Condor swap will not affect FY17 revenue. The higher rate of $222,295 per day on the Condor versus $190,000 per day on the Osprey, as a result of the swap, will increase the Company's margins in FY18 and through the contract's term.

Atwood Oceanics estimate reimbursable revenues to range from $3 million to $5 million for Q2 FY17 and from $12 million to $17 million for FY17. The Company's fleet-wide contract drilling costs are expected to range from $72 million to $78 million for Q2 FY17, excluding reimbursable costs. Full FY17 guidance has a revised range from $260 million to $275 million. This is above the guidance provided in November, due in part to increase expected costs associated with the new contracts for the Atwood Orca and Atwood Condor.

Stock Performance

On Thursday, February 16, 2017, the stock closed the trading session at $10.46, falling 1.78% from its previous closing price of $10.65. A total volume of 2.04 million shares have exchanged hands. Atwood Oceanics' stock price advanced 31.74% in the last three months, 19.95% in the past six months, and 59.94% in the previous twelve months. Shares of the company have a PE ratio of 2.88.

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