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

• 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)

Balance Sheet

Key Ratios

Tech Analysis

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

Central Thesis• Primary source of growth: Aggressive expansion in

new rigsa. Atwood Advantage: Completed this quarter.

Contracted at a dayrate of $584,000b. Atwood Achiever: Fourth quarter 2014. Contracted at

a dayrate of $595,000c. Atwood Admiral: 2015. Contract seekingd. Atwood Archer. Contract seeking

• Contracted revenue: $3.9 Billion• Demand and time allowances provide a reasonable

guarantee that Admiral/Archer will receive contracts

Risks on investment• Future oversupply of offshore rigs would result in

falling dayrates- Primary reason for the company’s low valuationIn 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

Closing Remarks• Great valuation• Market Expansion and 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