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WIKI ANALYSIS
Atwood Oceanics, Inc. (NYSE: ATW) is an international offshore drilling company with eight rigs (4 semi-submersible, 2 jack-up, 1 semi-submersible tender assist, 1 submersible).[1]
Company Overview
Atwood Oceanics is awarded contracts, through a competitive bidding process, in which it rents its offshore drilling rigs out to oil & gas drilling & exploration companies for a set rate. To increase operating margins, ATW must maximize the number of days its rigs are on contract (utilization rate).[2]
Compared to competitors such as Noble (NE) and Transocean (RIG) who have over 50 and 135 rigs, respectively, ATW has a small fleet. [3][4] Therefore, Atwood still has significantly fewer rigs under contract compared to its competitors, despite its near perfect utilization rates, keeping its overall revenue lower.
Business & Financial Metrics[5]
In 2009, ATW generated $250.7 in net income on $586.5 million in total revenues. This represents a 16.4% increase in net income and a 11.4% increase in total revenues from 2008, when the company earned $328.2 million on revenue of $526.6 million.
Business by Rigs
Atwood operates four types of rigs:
- Semi-Submersible (SS) (74% of 2009 revenue)[6] rigs are designed for the deepest waters and are more expensive to operate than jack-ups.
- Semi-Submersible Tender Assist (SSTA) (5% of 2009 revenue)[7] rigs are the same as semi-submersibles except the equipment is installed on permanent offshore platforms.
- Jack-up (JU) rigs (18% of 2009 revenue)[7] are lowered into the water and then jacked up to the surface. They cannot operate in waters as deep as semi-submersibles can since they are limited by the legs of the rig.
- Submersible (S) (3% of 2009 revenue)[7] rigs rest on the sea floor and are meant to operate in shallow water depths from 9 to 70 feet.[8]
Trends and Forces
Deepwater Oil Exploration is the Hot New Technology for Oilfield Services Companies but Atwood isn't Yet in the Game
Extreme oil prices also make deep-water drilling economically feasible for the major oil companies.[9] Atwood cannot fully capitalize on this as its fleet's biggest semi-submersibles (Atwood Eagle, Hunter, Falcon, Southern Cross) only drill to 5,000 feet while strong competitors such as Transocean (RIG) and Noble (NE) can tap into deep basins with 12,000 foot rigs. [10] However, Atwood does have orders in place with Jurong Shipyard for two semi-submersibles with at least one being able to reach 10,000 feet. [11]
Competition
Atwood competes with several other offshore drilling companies for contracts. Due to its small fleet, ATW is dwarfed by its competitors in rig quantity and revenue. Atwood's main competitors include:
- Transocean (RIG) is the largest company in the offshore drilling market with 139 rigs (jackups, semi-submersibles, drillships). [4]
- Diamond Offshore Drilling (DO) operates 44 rigs (30 semi-submersibles, 13 jack-ups, 1 drillship) with 2 more jack-ups under construction. [12]
- Pride International (PDE) maintains 64 offshore rigs internationally (2 deepwater drillships, 12 semi-submersibles, 28 jackups, 10 platform rigs, 5 managed deepwater drilling rigs, 7 Eastern Hemisphere-based land drilling rigs. [13]
- Noble (NE) operates 62 rigs worldwide (13 semi-submersibles, 3 drillships, 43 jackups, 3 submersibles). [14]
References
- ↑ ATW 10-K 2007, "Business", Page 3
- ↑ ATW 10-K 2007, "Drilling Contracts", Page 4
- ↑ NBL 10-K 2007, "Drilling Fleet Table", Page 15
- ↑ 4.0 4.1 RIG 10-K 2007, "Drilling Fleet", Page 6
- ↑ ATW 2009 10-K Ex. 13 pg. 1
- ↑ ATW 2009 10-K Ex. 13 pg. 5
- ↑ 7.0 7.1 7.2 ATW 2009 10-K Ex. 13 pg. 6
- ↑
- ↑ BloggingStocks: Exploding Demand in Offshore Drilling
- ↑ The Motley Fool: How Deep is Atwood Oceanics?
- ↑
- ↑
- ↑ Reuters: Pride International Inc.
- ↑ NE 10-K 2007, "Business", Page 1
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