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Atwood Oceanics, Inc. (ATW - Snapshot Report) has been granted full accreditation of its Competence Assurance Program by the International Association of Drilling Contractors (IADC). This accreditation follows a detailed audit by IADC of Atwood’s systems and processes on skills and knowledge of employees holding key positions in offshore drilling rigs.

IADC accreditation for the program is a major accomplishment for the company. This program is a key component of Atwood`s employee training and development initiatives, providing greater clarity for its employees on job requirements, while delivering improved safety and operational performance for clients. In the final audit report, IADC noted that no non-conformities were identified in Atwood’s program.

Founded in 1968, Atwood Oceanics is a global offshore drilling contractor focusing on drilling and completion of exploratory and developmental oil and gas wells. The company is headquartered in Houston, TX.  The company currently owns 12 mobile offshore drilling units and is constructing three ultra-deepwater drillships.

We see Atwood Oceanics’ leverage to the global drilling market rather than the domestic market as its biggest advantage over most of its peers. The international drilling outlook has been strong versus the muted fundamentals in the U.S. In our view, the company presents investors with growth opportunity from any global deepwater drilling recovery.

However, certain factors remain that are likely to keep near-to-medium-term earnings under pressure. The termination of any contract for tender-assist rigs is bound to affect the earnings and cash flow of the company. Also, downtime in any of the company’s rigs currently under contract will be an additional blow to the bottom line.

Atwood Oceanics currently retains a Zacks Rank #3 (Hold). Some better-ranked stocks in the oil and gas sector include Sunoco Logistics Partners L.P. (SXL - Analyst Report), CNOOC Ltd. (CEO - Analyst Report) and Western Gas Equity Partners, LP (WGP - Snapshot Report). All of these sport a Zacks Rank #1 (Strong Buy) and offer above-average returns to investors.

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