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Atwood Oceanics Secures Deal Expansion at Higher Day Rate

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Atwood Oceanics, Inc.’s agreement for its one of its rigs withMubadala Petroleum was recently renewed for four months at an undisclosed day rate. The contract pertains to Atwood’s jack-up rig Atwood Orca for drilling operations in offshore Thailand. The rig has been working with Mubadala since April 2013. The company has also managed to secure a higher day rate than the current one.  The contract extension also includes two four-month options priced at higher day rates than the new day rate. The earliest estimated availability of the Atwood Orca is August 2018, presuming that no options are exercised.  If all options were to be exercised, the drilling activities will be extended till April 2019.

The contract expansion reiterates the company’s commitment to enhance shareholders value. Higher day rates underscore the improvement in the offshore drilling business as oil prices have started to stabilize. Further Ensco plc’s (ESV - Free Report) announcement of the buyout of Atwood Oceanics will lead to strategic benefits and synergies for both companies. Apart from getting the 33% premium on their stock holdings, Atwood holders will get continued cyclical exposure from Ensco’s shares. 

Texas based drilling contractor Atwood Oceanics — along with the likes of Diamond Offshore Drilling, Inc. (DO - Free Report) , Helmerich & Payne (HP - Free Report) — is engaged ­in the drilling and completion of exploratory and well development for the oil and gas industry worldwide.  The company also provides related support, management and consulting services. The company has operations in the United States, Gulf of Mexico, the Mediterranean Sea, offshore West Africa, offshore Southeast Asia and offshore Australia. The company recently reported fleet revenue efficiency of 100% for July and 99% for August.

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