SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D. C. 20549
FORM 10-Q
QUARTERLY REPORT UNDER SECTION 13 OR 15 (d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For Quarterly Period Ended June 30, 1994 Commission File Number
0-6352
ATWOOD OCEANICS, INC.
(Exact name of registrant as specified in its charter)
State of Texas 74-1611874
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
15835 Park Ten Place Drive
P.O. Box 218350 Houston, Texas 77218
(Address of principal executive offices)
Registrant's telephone number, including area code: (713) 492-2929
Indicate by check mark whether the registrant (1) has filed all
reports required to be filed by Section 13 or 15 (d) of the Securities
Exchange Act of 1934 during the preceding 12 months and (2) has been
subject to such filings requirements for the past 90 days. Yes x
No
Indicate the number of shares outstanding of each of the issuer's
classes of common stock, as of August 11, 1994: 6,582,613 shares of
Common Stock $1 par value.
PAGE 2
ATWOOD OCEANICS, INC. AND SUBSIDIARIES
PART I. FINANCIAL INFORMATION
The condensed financial statements herein have been prepared by
the Company without audit, pursuant to the rules and regulations of
the Securities and Exchange Commission. Certain information and
footnote disclosures normally included in financial statements
prepared in accordance with generally accepted accounting principles
have been condensed or omitted, although the Company believes that the
disclosures are adequate to make the information not misleading. The
financial statements reflect all adjustments which are, in the opinion
of management, necessary for a fair statement of the results for the
quarters ended June 30, 1994 and 1993. All adjustments were of a
normal recurring nature. It is suggested these condensed financial
statements be read in conjunction with the financial statements and
the notes thereto included in the Company's September 30, 1993 Annual
Report to Shareholders.
<PAGE>
PAGE 3
ATWOOD OCEANICS, INC. AND SUBSIDIARIES
PART I. ITEM I - FINANCIAL STATEMENTS
CONSOLIDATED BALANCE SHEETS
(Unaudited)
June 30, September 30,
1994 1993
(In thousands)
ASSETS
CURRENT ASSETS:
Cash and cash equivalents $ 17,037 $ 10,087
Accounts receivable 12,265 10,768
Current maturities of long-term
notes receivable 400 400
Inventories of materials and
supplies, at lower of average
cost or market 3,985 3,850
Prepaid expenses and other 1,354 1,498
Total Current Assets 35,041 26,603
MARKETABLE SECURITIES AND U.S.
TREASURY BONDS 24,935 24,957
LONG-TERM NOTES RECEIVABLE,
net of current maturities 6,086 6,389
PROPERTY AND EQUIPMENT:
Drilling vessels, equipment and
drill pipe 185,557 182,851
Other 4,049 3,924
189,606 186,775
Less - accumulated depreciation 105,927 96,625
83,679 90,150
DEFERRED COSTS AND OTHER ASSETS 964 1,754
$ 150,705 $ 149,853
<PAGE>
PAGE 4
ATWOOD OCEANICS, INC. AND SUBSIDIARIES
PART I. ITEM I - FINANCIAL STATEMENTS
CONSOLIDATED BALANCE SHEETS
(Unaudited)
June 30, September 30,
1994 1993
(In thousands)
LIABILITIES AND SHAREHOLDERS' EQUITY
CURRENT LIABILITIES:
Current maturities of notes
payable by partnership $ 3,000 $ 3,000
Accounts payable 3,324 3,058
Accrued liabilities 6,002 5,842
Total Current Liabilities 12,326 11,900
LONG-TERM NOTES PAYABLE BY
PARTNERSHIP, net of current
maturities 50,747 55,409
DEFERRED INCOME TAXES 567 ---
MINORITY INTEREST IN PARTNERSHIPS 2,784 2,794
SHAREHOLDERS' EQUITY:
Preferred stock, no par value;
1,000,000 shares authorized,
none outstanding --- ---
Common stock, $1 par value;
10,000,000 shares authorized
with 6,582,000 shares issued
and outstanding 6,582 6,582
Paid-in capital 54,273 54,273
Retained earnings 23,426 18,895
Total Shareholders' Equity 84,281 79,750
$ 150,705 $ 149,853
<PAGE>
PAGE 5
ATWOOD OCEANICS, INC. AND SUBSIDIARIES
PART I. ITEM 1 - FINANCIAL STATEMENTS
CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
Three Months Ended
June 30,
1994 1993
(In thousands, except per)
share amounts)
REVENUES:
Drilling revenues $ 16,219 $ 13,047
Management fee income 542 425
Dividends and interest 680 595
Gain on Sale of Indian
Joint Venture --- ---
17,441 14,067
COSTS AND EXPENSES:
Drilling costs 11,129 9,404
Depreciation 3,421 3,410
General and administrative 1,157 1,069
Interest 708 695
16,415 14,578
INCOME (LOSS) BEFORE MINORITY INTEREST AND
INCOME TAXES 1,026 (511)
MINORITY INTEREST IN LOSS
OF PARTNERSHIPS 635 1,366
INCOME (LOSS) BEFORE
INCOME TAXES 1,661 855
PROVISION FOR INCOME TAXES 35 478
NET INCOME (LOSS) $ 1,626 $ 377
INCOME (LOSS) PER COMMON SHARE $ .25 $ .06
WEIGHTED AVERAGE NUMBER OF COMMON
SHARES OUTSTANDING 6,582 6,582
<PAGE>
PAGE 6
ATWOOD OCEANICS, INC. AND SUBSIDIARIES
PART I. PART 1 - FINANCIAL STATEMENTS
CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
Nine Months Ended
June 30,
1994 1993
(In thousands, except per)
share amounts)
REVENUES:
Drilling revenues $ 47,577 $ 34,957
Management fee income 1,561 1,246
Dividends and interest 1,893 2,034
Gain on Sale of Indian Joint
Venture 201 ---
51,232 38,237
COSTS AND EXPENSES:
Drilling costs 33,102 26,811
Depreciation 10,163 9,625
General and administrative 3,236 3,105
Interest 2,063 2,350
48,564 41,891
INCOME (LOSS) BEFORE MINORITY INTEREST AND
INCOME TAXES 2,668 (3,654)
MINORITY INTEREST IN LOSS
OF PARTNERSHIPS 2,429 3,666
INCOME (LOSS) BEFORE INCOME TAXES 5,097 12
PROVISION FOR INCOME TAXES 566 1,284
NET INCOME (LOSS) $ 4,531 $ (1,272)
INCOME (LOSS) PER COMMON SHARE $ .69 $ (.19)
WEIGHTED AVERAGE NUMBER OF COMMON
SHARES OUTSTANDING 6,582 6,582
<PAGE>
PAGE 7
ATWOOD OCEANICS, INC. AND SUBSIDIARIES
PART I. ITEM 1 - FINANCIAL STATEMENTS
CONSOLIDATED STATEMENTS OF CASH FLOW
Nine Months Ended
June 30,
1994 1993
(In thousands)
CASH FLOW FROM OPERATING ACTIVITIES:
Net Income (Loss) $ 4,531 $ (1,272)
Adjustments to reconcile net loss to
net cash provided (used) by operating
activities:
Depreciation 10,163 9,625
Amortization of deferred costs 440 80
Deferred federal income tax benefit (200) ---
Minority interest in loss of
partnerships (2,429) (4,240)
Changes in assets and liabilities:
Decrease (increase) in
accounts receivable (1,497) 5,523
Decrease in accounts payable
and accrued liabilities 426 (1,600)
Other 32 411
TOTAL ADJUSTMENTS 6,935 9,799
Net Cash Provided by Operating
Activities 11,466 8,527
CASH FLOW FROM INVESTING ACTIVITIES:
Proceeds from sale of Indian
Joint Venture 1,300 ---
Payment received on notes receivable 303 817
Capital expenditures (3,869) (4,916)
Net Cash Used by Investing
Activities (2,266) (4,099)
CASH FLOW FROM FINANCING ACTIVITIES:
Principal payment on long-term
notes payable (2,250) (2,250)
Repayment of short-term note payable --- (3,500)
Net advances by limited partner --- 812
Net Cash Used by Financing Activities (2,250) (4,938)
NET INCREASE IN CASH AND CASH
EQUIVALENTS 6,950 (510)
CASH AND CASH EQUIVALENTS, at beginning
of period 10,087 8,859
CASH AND CASH EQUIVALENTS, at end
of period $ 17,037 $ 8,349
<PAGE>
PAGE 8
ATWOOD OCEANICS, INC. AND SUBSIDIARIES
PART I. ITEM 2
MANAGEMENT'S DISCUSSION AND ANALYSIS
OF FINANCIAL CONDITIONS AND RESULTS OF OPERATIONS
RESULTS OF OPERATIONS
Total revenues increased $3.4 million (24 percent) in the third
quarter of fiscal year 1994 compared to the third quarter of fiscal year
1993. This increase is primarily due to an increase in drilling revenues.
A comparative analysis of drilling revenues by rig is as follows:
QUARTERS ENDED
June 30, March 31, June 30,
1994 1994 1993
(In Thousands)
HUNTER $ 2,618 $ 2,533 $ 2,315
EAGLE 3,214 3,218 2,362
FALCON 2,680 2,311 438
VICKSBURG 1,136 1,044 1,106
RIG-19 1,814 1,744 1,755
SEAHAWK 2,716 2,684 2,674
RICHMOND 1,241 1,487 1,720
OTHER 800 964 677
$16,219 $15,985 $13,047
Thus far in fiscal year 1994, the HUNTER has incurred no idle days.
In fiscal year 1993, the HUNTER was idle the entire second quarter and the
first thirteen days of the third quarter. During December 1993, the EAGLE
was mobilized from Malaysia to the "Zone of Cooperation" (an area between
Indonesia and Australia) to drill under a multiple well contract. Due to
higher labor costs, dayrate revenue levels are higher in Australia than in
Malaysia. This difference in dayrate levels is reflected in the comparison
of EAGLE revenues. The FALCON was idle virtually the entire third quarter
of fiscal year 1993, which accounts for the significantly reduced revenues
in 1993 compared to 1994.
Since its relocation from the Gulf of Mexico to Australia in 1987, the
VICKSBURG has worked continuously for the same customer. RIG-19 has also
had continuous employment since its acquisition in 1989. Since its
commencement of operations in February 1993, the SEAHAWK has been a
significant contributor to the Company's improved operating results. The
RICHMOND has worked continuously since its return to employment in March
1993. The reduction in revenues from the RICHMOND is due to a decline in
dayrates. The Company has reduced dayrate levels on the RICHMOND in order
to maintain utilization. The increase in "OTHER" relates primarily to the
commencement in November 1993 of a short-term labor contract in Australia.
The Company's current contract status for drilling rigs wholly or partially
owned is as follows:
<PAGE>
PAGE 9
NAME OF RIG LOCATION CONTRACT STATUS
HUNTER Malaysia Rig is currently drilling the third of six
possible option wells. If all option wells
are drilled, contract could terminate in
September/October 1994. Discussions are
currently ongoing for additional wells.
EAGLE Indonesia- Rig is currently drilling its last firm well;
Australia however, the Company anticipates that two to
"Zone of three option wells will be drilled. If the
Cooperation" option wells are drilled, the contract should
continue until December 1994.
FALCON Preparing The rig is currently preparing to mobilize
to Mobilize to Korea to commencing drilling under a
to Korea contract estimated to last six to nine
months. The rig should be on location by the
first week of September 1994.
VICKSBURG Australia Employed under a contract estimated to extend
to January 1995, with additional options.
RIG-19 Australia Drilling under a term contract estimated to
extend into 1997.
SEAHAWK Malaysia Commenced drilling in February, 1993 under a
contract with primary term of 600 days plus
multiple options.
RICHMOND U.S. Gulf Drilling under a contract estimated to
terminate in September 1994. Additional
ongoing work is now being pursued.
SOUTHERN CROSS Australia Remains idle while the Company pursues future
contract opportunities.
For the three months ended June 30, 1994 compared to the three months
ended June 30, 1993, drilling costs increased $1.7 million (18 percent).
An analysis of drilling costs by rig is as follows:
QUARTERS ENDED
June 30, March 31, June 30,
1994 1994 1993
(In Thousands)
HUNTER $ 1,697 $ 1,823 $ 1,714
EAGLE 2,525 2,430 1,539
FALCON 1,494 1,422 726
VICKSBURG 735 610 680
RIG-19 1,428 1,242 1,242
SEAHAWK 1,504 1,451 1,567
RICHMOND 852 885 1,086
OTHER 894 1,261 850
$11,129 $11,124 $ 9,404
<PAGE>
PAGE 10
The increase in the EAGLE's drilling costs is due to its relocation
from Malaysia to Australia - Indonesia "Zone of Cooperation". Operating
costs are less in Malaysia due to lower labor expenses. The increase in
FALCON drilling costs is due to the rig having 100 percent utilization
during 1994 compared to being idle virtually the entire third quarter of
fiscal year 1993. Thus, relocation of the EAGLE to an area with higher
operating costs and the increased utilization of the FALCON accounts for
the increase in drilling costs between the third quarter of 1994 and 1993.
The decline in interest expense during 1994 is due primarily to a
reduction in effective interest rates during the first half of 1994 coupled
with some reduction in outstanding principal. The increase in depreciation
expense for the nine months ended June 30, 1994 is due to the depreciation
on the SEAHAWK which commenced operations in February 1993.
As required, the Company adopted the Financial Accounting Standards
Board Statement No. 109, "Account for Income Taxes", in the first quarter
of fiscal year 1994. This initial adoption had no impact on the Company's
statement of operations and minimally increased assets and liabilities by
approximately $800,000 on the Company's balance sheet. As a result of the
reductions in the difference between book and tax basis on certain
partnerships' assets during fiscal year 1994, a $200,000 tax benefit with a
corresponding $200,000 reduction in deferred income taxes were recorded
during the third quarter of 1994. This tax benefit coupled with less
foreign taxes accounts for the reduction in the provision for income taxes.
The primary reason for the Company's profitable results in 1994
continues to be its ability to maintain high equipment utilization. For
the first nine months of fiscal year 1994, excluding the SOUTHERN CROSS,
the Company has only incurred eleven idle equipment days (99 percent
utilization) compared to 337 idle equipment days (81 percent utilization)
for the same period in fiscal year 1993. The key to the Company continuing
its profitable operations in subsequent quarters will be maintaining high
utilization of its equipment.
LIQUIDITY AND CAPITAL RESOURCES
In October 1993, the Company sold its forty percent interest in an
Indian joint venture company for $1.3 million resulting in a gain of
$201,000. The Company used the proceeds from this sale to help fund the
$1.5 million purchase of the SOUTHERN CROSS, a semisubmersible built in
1976. This vessel remains idle in Australia as the Company pursues future
contract opportunities. In August 1994, an Australian entity in which the
Company owns a 50 percent interest entered into an agreement with a multi-
national oil company to provide a mechanized modular offshore platform rig
to commence drilling offshore Australia by the first calendar quarter of
1996. The remaining fifty percent interest is owned by a wholly owned
subsidiary of Helmerich & Payne, Inc., the owner of approximately 24
percent of the Company's common stock. The modular rig will cost
approximately $27 million to construct and will be funded equally by the
Company and Helmerich & Payne out of internally generated cash.
<PAGE>
PAGE 11
At June 30, 1994 compared to September 30, 1993, the Company's working
capital increased approximately $8 million. The Company continues to
experience no difficulties in collecting its accounts receivable. Subject
to investing in new opportunities (including the construction of the above
modular rig), the Company's cash reserves should continue to increase as a
result of anticipated continuing improvement in cash flows.
<PAGE>
PAGE 12
ATWOOD OCEANICS, INC. AND SUBSIDIARIES
PART I. ITEM 2
August 12, 1994
To Our Shareholders and Employees:
The Company earned a profit of $4,531,000 for the nine months ended
June 30, 1994, the Company's best financial performance since 1983.
Equipment utilization for the first nine months of fiscal year 1994,
excluding the SOUTHERN CROSS which has not been placed in service, has been
99 percent (eleven idle days) compared to 81 percent utilization (337 idle
days) for the same period in fiscal year 1993. Earnings, including
investment income, before depreciation, interest and taxes, but after
adjustment for minority interest, were $11.5 million for the nine months
ended June 30, 1994, compared to $6.0 million for the same period in 1993.
Operating cash flow for the nine months ended June 30, 1994 compared to the
same period in 1993 increased $8.3 million. For the nine months ended June
30, 1994 drilling revenues increased $12.6 million or 36 percent.
The Company's improvement in operating results is primarily
attributable to management's emphasis on maintaining high equipment
utilization, not to any significant improvements in market conditions.
Recent increases in oil prices, if sustained, may eventually yield market
improvement; however, for the balance of calendar 1994, our goal is to
strive for continuing high equipment utilization without expecting an
improvement in market conditions. The FALCON has a contract with the
Korean Petroleum Development Corp. in Korea which should keep it employed
into the second quarter of fiscal 1995 and the EAGLE's current contract
should keep it employed until first quarter of fiscal 1995. Ongoing
opportunities are being aggressively sought for the RICHMOND and HUNTER
which are expected to complete their current contract commitments in the
fourth quarter of fiscal 1994 and the first quarter of fiscal 1995,
respectively. A commitment has been made to install a new top-drive system
on the RICHMOND; we believe that this enhancement will improve the
RICHMOND's competitiveness and availability of employment opportunities.
We are pleased to report that a newly formed venture owned 50% by
Atwood Oceanics and 50% by an affiliated company, Helmerich & Payne, Inc.,
(an owner of 24% of the Company's common stock) has been awarded a term
contract by Esso Australia Ltd. for the design, construction and operation
of a new platform rig incorporating the latest technology in
instrumentation and mechanization. Operation of the new rig will be
managed by the Company and is expected to commence on Esso's West Tuna
platform in the Bass Strait offshore the State of Victoria in early 1996.
Our efforts in pursuing profitable new opportunities are continuing.
Striving to achieve safe operations remains at the forefront of our
endeavors. The support of our shareholders and employees is appreciated as
we work toward future development of the Company.
/s/ John R. Irwin
JOHN R. IRWIN
PRESIDENT
PAGE 13
ATWOOD OCEANICS, INC. AND SUBSIDIARIES
PART II. OTHER INFORMATION
During the quarter ended June 30, 1994, the Company has not filed any
Form 8-K's.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
the registrant has duly caused this report to be signed on its behalf by
the undersigned thereunto duly authorized.
ATWOOD OCEANICS, INC.
(Registrant)
Date: 8/12/94 s/JAMES M. HOLLAND
James M. Holland
Senior Vice President
and Chief Accounting Officer
