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Atwood Oceanics, INC

Atwood Oceanics, INC. Introduction . Ticker: ATW Sector: Energy Market Cap: $3.7 Billion Current Share Price: $55.10. Business Model. Atwood Oceanics engages in the drilling and completion of exploratory and developmental oil and gas wells worldwide

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Atwood Oceanics, INC

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  1. Atwood Oceanics, INC

  2. Introduction • Ticker: ATW • Sector: Energy • Market Cap: $3.7 Billion • Current Share Price: $55.10

  3. Business Model • Atwood Oceanics engages in the drilling and completion of exploratory and developmental oil and gas wells worldwide • Operates a fleet of 13 mobile offshore drilling units • Rigs are contracted out to companies such as Noble Energy, Chevron, Shell for a specified day rate (usually >$500,000)

  4. Balance Sheet

  5. Key Ratios

  6. Tech Analysis

  7. Central Thesis • Market Expansion: • 76 Discoveries of oil or gas at water depths greater than 500 ft. from December 2011 to June 2013. • 100% Utilization Levels for deep-water rigs – creates a sellers market for Atwood

  8. Central Thesis • Primary source of growth: Aggressive expansion in new rigs • Atwood Advantage: Completed this quarter. Contracted at a dayrateof $584,000 • Atwood Achiever: Fourth quarter 2014. Contracted at a dayrate of $595,000 • Atwood Admiral: 2015. Contract seeking • Atwood Archer. Contract seeking • Contracted revenue: $3.9 Billion • Demand and time allowances provide a reasonable guarantee that Admiral/Archer will receive contracts

  9. Risks on investment • Future oversupply of offshore rigs would result in falling dayrates • Primary reason for the company’s low valuation In 2012, there were more discoveries of offshore oil fields than ever before with 52. Demand will continue to exceed supply as old rigs are retired due to age and inability to operate effectively

  10. Closing Remarks • Great valuation • Market Expansionand increased demand • New rigs represent revenue backlog and great sources of growth going forward • Risks to investment are minimal, actually represent further reasons to invest • Fundamentally sound company

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