-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, Nbs7WIA1NSKONPMvs5I8JM/Dl+LtYgKlGK2vr4t9lp3CspzJf1fV+RAhA2K5JPS+ mFQQzBeZS7xtiR4W1JzgRQ== 0000008411-96-000009.txt : 19960216 0000008411-96-000009.hdr.sgml : 19960216 ACCESSION NUMBER: 0000008411-96-000009 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19951231 FILED AS OF DATE: 19960214 SROS: NASD FILER: COMPANY DATA: COMPANY CONFORMED NAME: ATWOOD OCEANICS INC CENTRAL INDEX KEY: 0000008411 STANDARD INDUSTRIAL CLASSIFICATION: DRILLING OIL & GAS WELLS [1381] IRS NUMBER: 741611874 STATE OF INCORPORATION: TX FISCAL YEAR END: 0930 FILING VALUES: FORM TYPE: 10-Q SEC ACT: 1934 Act SEC FILE NUMBER: 000-06352 FILM NUMBER: 96518698 BUSINESS ADDRESS: STREET 1: 15835 PARK TEN PL DR STREET 2: SUITE 200 CITY: HOUSTON STATE: TX ZIP: 77084 BUSINESS PHONE: 7134922929 10-Q 1 PAGE 1 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 DECEMBER 31, 1995 COMMISSION FILE NUMBER 0-6352 ATWOOD OCEANICS, INC. (Exact name of registrant as specified in its charter) TEXAS 74-1611874 (State or other jurisdiction of (I.R.S. Employer Identification No.) incorporation or organization) 15835 Park Ten Place Drive 77084 Houston, Texas (Zip Code) (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 15 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 December 31, 1995 6,635,713 shares of Common Stock $1 par value PAGE 2 PART I. FINANCIAL INFORMATION ATWOOD OCEANICS, INC. AND SUBSIDIARIES 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 to present fairly the financial position as of December 31, 1995 and September 30, 1995, and the results of operations for the three months ended December 31, 1995 and 1994, respectively, and the statements of cash flows for the three months then ended. 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, 1995 Annual Report to Shareholders. PAGE 3 PART I. ITEM I - FINANCIAL STATEMENTS ATWOOD OCEANICS, INC. AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS
(Unaudited) December 31, September 30, 1995 1995 (In thousands) ASSETS CURRENT ASSETS: Cash and cash equivalents $ 15,231 $ 11,984 Accounts receivable 14,303 13,425 Inventories of materials and supplies, at lower of 4,748 4,904 average cost or market 3,128 3,953 Prepaid expenses and other Total Current Assets 37,410 34,266 SECURITIES HELD FOR INVESTMENT: Held for maturity, at amortized cost 22,415 22,422 Available-for-sale, at fair value 3,896 3,516 26,311 25,938 PROPERTY AND EQUIPMENT: Drilling vessels, equipment and drill pipe 175,332 174,989 Investment in joint venture 9,656 8,182 Other 4,605 4,569 189,593 187,740 Less-accumulated depreciation 98,713 96,313 Net Property and Equipment 90,880 91,427 DEFERRED COSTS AND OTHER ASSETS 1,075 1,222 $155,676 $152,853
See accompanying notes to financial statements. PAGE 4 PART I. ITEM I - FINANCIAL STATEMENTS ATWOOD OCEANICS, INC. AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS
(Unaudited) December 31, September 30, 1995 1995 (In thousands) LIABILITIES AND SHAREHOLDERS' EQUITY CURRENT LIABILITIES: Current maturities of long-term notes payable $ 3,750 $ 3,750 Short-term notes payable 1,000 1,500 Accounts payable 5,927 6,260 Accrued liabilities 9,883 8,995 Total Current Liabilities 20,560 20,505 LONG-TERM NOTES PAYABLE, net of current maturities 34,069 35,569 DEFERRED CREDITS: Income taxes 1,464 1,334 Other 3,695 553 5,159 1,887 SHAREHOLDERS' EQUITY: Preferred stock, no par value; 1,000,000 shares authorized, none outstanding --- --- Common stock, $1 par value; 10,000,000 share authorized with 6,636,000 and 6,629,000 shares issued and outstanding 6,636 6,629 Paid-in capital 54,847 54,771 Net unrealized holding gains on available- for-sale securities 1,579 1,328 Retained earnings 32,826 32,164 Total Shareholders' Equity 95,888 94,892 $ 155,676 $ 152,853 /TABLE> See accompanying notes to financial statements. PAGE 5 PART I. ITEM I - FINANCIAL STATEMENTS ATWOOD OCEANICS, INC. AND SUBSIDIARIES Consolidated Statements of Operations (Unaudited)
Three Months Ended December 31, 1995 1994 (In thousands except per share amounts) REVENUES: Contract drilling $ 17,943 $ 17,637 Contract management 195 669 18,138 18,306 COSTS AND EXPENSES: Contract drilling 12,888 12,368 Contract management 146 162 Depreciation 2,635 3,542 General and administrative 1,060 1,057 16,729 17,129 OPERATING INCOME 1,409 1,177 OTHER INCOME (EXPENSE) Interest expense (690) (831) Interest income 589 679 (101) (152) INCOME BEFORE MINORITY INTEREST AND INCOME TAXES 1,308 1,025 MINORITY INTEREST IN NET LOSS OF PARTNERSHIPS --- 908 INCOME BEFORE INCOME TAXES 1,308 1,933 PROVISION (BENEFIT) FOR INCOME TAXES Foreign 784 (10) Federal (138) 200 646 190 NET INCOME $ 662 $1,743 EARNINGS PER COMMON SHARE $ .10 $ .26 WEIGHTED AVERAGE NUMBER OF COMMON SHARES OUTSTANDING 6,632 6,582
See accompanying notes to financial statements. PAGE 6 PART I. ITEM I - FINANCIAL STATEMENTS ATWOOD OCEANICS, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited)
Three Months Ended December 31, 1995 1994 (In thousands) CASH FLOW FROM OPERATING ACTIVITIES: Net Income $ 662 $ 1,743 Adjustments to reconcile net income to net cash provided (used) by operating activities: Depreciation 2,635 3,542 Amortization of deferred costs 149 103 Minority interest in let loss of partnerships --- (908) Changes in assets and liabilities: Increase in accounts receivable (878) (178) Increase in accounts payable and accrued liabilities 555 29 Other 1,166 315 Total adjustments 3,627 2,903 Net cash provided by operating activities 4,289 4,646 CASH FLOW FROM INVESTING ACTIVITIES: Payment received on note receivable --- 101 Investment in joint venture (1,474) (155) Capital expenditures (651) (1,205) Net cash used by investing activities (2,125) (1,259) CASH FLOW FROM FINANCING ACTIVITIES: Principal payments on long-term notes payable (1,500) (750) Proceeds from exercises of stock options 83 -- Payment on short-term note payable (500) --- Prepayment of mobilization revenues 3,000 --- Net payments to limited partner --- (100) Net Cash provided (used) by financing activities 1,083 (850) NET INCREASE IN CASH AND CASH EQUIVALENTS 3,247 2,537 CASH AND CASH EQUIVALENTS, at beginning of period 11,984 16,119 CASH AND CASH EQUIVALENTS, at end of period $15,231 $18,656
See accompanying notes to financial statements PAGE 7 PART I. ITEM I - FINANCIAL STATEMENTS ATWOOD OCEANICS, INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 1. Commencing in January 1996, the Company will receive a contribution to its financial results from a dayrate payment on RIG-200 during the delay period prior to its start-up of operations in Australia in early 1997. In December 1995, the Company received a $3 million prepayment of mobilization revenue relating to RIG-200 which was reflected in the Consolidated Balance Sheet as "other deferred credits". 2. For the three months ended December 31, 1995, in accordance with FASB 115, shareholders' equity was increased $251,000 (net of $130,000 increase in deferred income taxes) to reflect the net unrealized increases during the quarter in holding gains on securities classified as available-for-sale. PAGE 8 PART I. ITEM 2 ATWOOD OCEANICS, INC. AND SUBSIDIARIES MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITIONS AND RESULTS OF OPERATIONS RESULTS OF OPERATIONS Excluding the SOUTHERN CROSS, which has not been placed in service, for the three months ended December 31, 1995, the Company maintained 100 percent utilization of its equipment. Since October 1993 through December 31, 1995, the Company has incurred only forty-one idle equipment days, a 99.3 percent equipment utilization rate. The key to the Company's profitability in 1994 and 1995 was high equipment utilization. Contract drilling revenues increased $300,000 in the first quarter of fiscal year 1996 compared to the first quarter of fiscal year 1995; however, this increase was offset by an approximately $500,000 decrease in contract management revenues. The $500,000 reduction in contract management revenues is due to the commencement of drilling operations of the GOODWYN 'A' platform rig whereby the Company is currently compensated through dayrate revenues instead of a fixed management fee as was the case prior to commencement of drilling operations. A comparative analysis of drilling revenues is as follows:
QUARTERS ENDED December 31, September 30, December 31, 1995 1995 1994 (In thousands) SEAHAWK $2,690 $ 2,780 $ 2,674 ATWOOD HUNTER 2,552 2,560 2,578 ATWOOD EAGLE 3,857 3,277 3,871 ATWOOD FALCON 2,553 2,584 2,771 VICKSBURG 1,249 1,281 1,164 RIG-19 1,939 1,432 1,901 RICHMOND 1,271 984 1,500 GOODWYN 'A' 1,785 1,902 1,159 OTHER 47 48 19 $17,943 $17,637 $16,848
Since its commencement of operation in February 1993, the SEAHAWK has been a significant contributor to the Company's profitability. The ATWOOD HUNTER has experienced 100 percent utilization since April 1993. The increase in revenues for the ATWOOD EAGLE for the quarter ended December 31, 1995 compared to the quarter ended September 30, 1995 is due to planned maintenance and survey work which resulted in the rig being idle for 16 days in September 1995. During the last year, the ATWOOD FALCON has experienced 100 percent utilization while working in Korea, China and the "Joint Development Area" between Thailand and Malaysia. The increase in revenues for RIG-19 for the quarter ended December 31, 1995 compared to the quarter ended September 30, 1995 is due to a temporary labor stoppage which reduced revenues for the last quarter of fiscal year 1995. The RICHMOND worked continuously from February 1993 until September 1995 when it was idle for fourteen days while undergoing certain required maintenance and survey work. In October 1994, the Australian PAGE 9 operator-owned GOODWYN 'A' platform rig commenced drilling operations. Since July 1989, the Company, on a management fee basis, directed the design, construction and offshore commissioning of the GOODWYN 'A' drilling facilities. The Company now has responsibility for the operations and maintenance of these facilities and is compensated on a dayrate basis. NAME OF RIG LOCATION CONTRACT STATUS SEAHAWK Malaysia Term contract (estimated completion 1997). ATWOOD Malaysia Rig has three remaining firm wells to HUNTER drill on its current contract, with eight option wells. If no option wells are drilled, contract could end in March 1996. ATWOOD EAGLE Western Upon completion of current contract Australia (estimated March 1996), the rig will be mobilized to West Africa to commence drilling a 360 days firm - plus two six-month options contract. ATWOOD Thailand/Malaysia Drilling the third of four firm wells FALCON "Joint with three option wells (estimated Development completion October 1996 if all option Area" wells drilled). VICKSBURG Australia Under contract until February 1997 (with a one year option). RIG-19 Australia Term contract (estimated completion August 1996). RICHMOND United States Firm commitment through March 1996 in the Gulf of Mexico (anticipate continuous work with current client through remainder of fiscal year 1996. GOODWYN 'A' Australia Term contract (estimated completion December 1996). For the three months ended December 31, 1995 compared to the three months ended December 31, 1994, contract drilling costs increased $520,000 or 4 percent. An analysis of contract drilling costs by rig is as follows: PAGE 10
QUARTERS ENDED December 31, September 30, December 31, 1995 1995 1994 (In thousands) SEAHAWK $ 1,593 $ 1,415 $ 1,544 ATWOOD HUNTER 1,758 1,719 1,930 ATWOOD EAGLE 2,939 3,167 3,008 ATWOOD FALCON 1,638 1,494 1,747 VICKSBURG 786 808 721 RIG-19 1,435 978 1,183 RICHMOND 1,111 1,150 941 GOODWYN "A" 1,384 1,449 896 OTHER 244 65 398 $12,888 $ 12,368 $12,245
The reduction in drilling cost for the ATWOOD HUNTER during the first quarter of fiscal year 1996 and the fourth quarter of fiscal year 1995 compared to the first quarter of fiscal 1995 is due to a decrease in equipment maintenance costs. The increase in drilling costs for RIG-19 in the first quarter of fiscal year 1996 compared to the last quarter of fiscal 1995 is due to reduced personnel costs in the last quarter of fiscal 1995 resulting from a labor stoppage. As previously stated, drilling operations commenced on the GOODWYN 'A' platform rig in October 1994 whereby the Company has labor responsibility and is being compensated on a dayrate revenue basis. For the quarter ended December 31, 1995 compared to the same quarter of fiscal year 1995, depreciation decreased $907,000. This decrease is attributable to an increase in the depreciable lives of the ATWOOD HUNTER, ATWOOD EAGLE and ATWOOD FALCON of five additional years upon the Company's acquisition of the limited partner's interest in these rigs effective December 31, 1994. An analysis of depreciation expense by rig is as follows:
QUARTERS ENDED December 31, September 30, December 31, 1995 1995 1994 (In thousands) ATWOOD HUNTER, ATWOOD EAGLE and ATWOOD FALCON $1,541 $1,593 $2,588 SEAHAWK 585 583 569 RIG-19 340 309 323 OTHER 169 88 62 $2,635 $3,542 $2,573
As a result of the Company's buyout of its limited partner's interest effective as of December 31, 1994, the limited partner had no interest in the operating results of the ATWOOD HUNTER, ATWOOD EAGLE and ATWOOD FALCON for the three months ended December 31, 1995; therefore, no minority interest is reflected in the December 1995 quarter. The increase in provision for income taxes for the three months ended December 31, 1995 is due primarily to increases in foreign taxes in Malaysia and Australia. As a result of PAGE 11 profitable operations in recent times in both of these countries, most tax carryforward attributes have been utilized, thereby, increasing exposure to foreign taxes. Thus, operating results for the first quarter of fiscal year 1995 compared to fiscal year 1996 were enhanced by the positive impact of minority interest and a lower tax provision. Due to lower tax attribute carryforwards, the Company anticipates that tax expense in 1996 will be significantly higher than 1995. LIQUIDITY AND CAPITAL RESOURCES Except for general capital maintenance (estimated to range between $3 million and $6 million for fiscal year 1996) and approximately $2 million additional funding required for RIG-200, the Company currently has no other capital commitments. However, the Company has five drilling vessels that have upgrade potential. The ATWOOD FALCON, ATWOOD HUNTER and ATWOOD EAGLE are currently equipped to drill in water depths of 2,500, 1,500 and 2,500 feet, respectively, and can be upgraded to drill in deeper water depths. The Company is currently exploring opportunities which, if successful, could require an upgrade investment of between $10 and $20 million per rig to drill in 3,000 feet of water and a significantly higher investment to reach a deeper water depth drilling capacity. The ATWOOD SOUTHERN CROSS (a second-generation semisubmersible) remains idle in Australia as the Company continues to market the rig. Before this unit can be placed in service, an additional capital investment of approximately $20 million will be required to enable the rig to drill in water depths up to 2,000 feet. The VICKSBURG, a jackup, is also a candidate for upgrade investment. This rig is currently committed under a drilling contract until 1997. The construction of RIG-200 was completed on time and within cost estimates. The rig is currently stacked in the United States awaiting notification for delivery of the rig to Australia. Due to certain delays unrelated to the Company's and Helmerich & Payne's activities, the rig is now not scheduled to commence drilling operations until early 1997. On January 1, 1996, the Company commenced receiving a "holding period" dayrate on RIG-200. In December 1995, the Company received a $3 million prepayment of mobilization revenues related to RIG-200, which will not be recognized into income until the rig is delivered to Australia. The Company continues to experience no difficulties in collecting its accounts receivable, with no requirement for an allowance for doubtful accounts. The $1 million short-term note payable at December 31, 1995 was repaid in January 1996. Thus, currently the Company has no outstanding borrowings under the $10 million short-term line of credit it has with a bank. In accordance with Financial Accounting Standard Board Statement No. 115, available for sale securities are reflected in the Consolidated Blance Sheet at fair value, with the aggregate unrealized gain, net of related deferred tax liability included in shareholders' equity. At December 31, 1995, compared to September 30, 1995, there was an $25,000 net increase in the fair value of available for sale securities. With revenues for RIG-200 commencing in January 1996 along with general market improvements, management anticipates that the level of quarterly profitability for the remainder of fiscal year 1996 will increase compared to the results for the first quarter of fiscal 1996. The Company should be able to continue to maintain a high level of equipment utilization. Management will continue to pursue contract opportunities for the ATWOOD SOUTHERN CROSS. PAGE 12 ATWOOD OCEANICS, INC. AND SUBSIDIARIES PART II. OTHER INFORMATION TO OUR SHAREHOLDERS AND EMPLOYEES: The Company and its subsidiaries reported a net income of $662,000 or $.10 per share on gross revenues of $18,727,000 for the quarter ended December 31, 1995, compared to a net income of $1,743,000 or $.26 per share, on gross revenues of $18,985,000 for the quarter ended December 31, 1994. Due to lower tax attribute carryforwards, the Company anticipates that tax expenses in 1996 will be significantly higher than 1995. Operating results for the first quarter of fiscal year 1995 compared to fiscal year 1996 were enhanced by the positive impact of minority interest and a lower tax provision. Earnings before depreciation, interest and taxes were $4.6 million for the first quarter of fiscal year 1996 compared to $4.1 million for the first quarter of fiscal year 1995. Utilization of the Company's active fleet was 100 percent for the first quarter of fiscal year 1996. A contract has been executed with a major operator for a one-year firm plus options program for the ATWOOD EAGLE ("EAGLE"). The EAGLE will be mobilized to West Africa following its present contract in Australia, currently estimated to be completed during the second or third fiscal quarter of 1996. The EAGLE will require no major equipment upgrades to operate in the required 2,000 ft. of water and will receive a significant improvement in dayrate revenues and daily margins. We are continuing to offer the ATWOOD FALCON ("FALCON") and ATWOOD HUNTER ("HUNTER") for work in 3,000 ft. of water and the ATWOOD SOUTHERN CROSS for work in 2,000 ft. of water. As previously reported, RIG 200 drilling operations are currently not scheduled to commence until early calendar year 1997. However, we are pleased to advise that a dayrate payment for the RIG 200 delay period commenced January 1, 1996. The Company will receive a contribution to its financial results from these payments for the balance of fiscal year 1996 based on the current commencement schedule. Current contract commitments for the SEAHAWK and VICKSBURG are still expected to keep those units employed through fiscal year 1996. It is estimated that RIG 19 will remain on its current platform until August, 1996. The HUNTER may be available as early as March, 1996, if current options are not exercised, and the FALCON should remain employed under its current contract into the third or fourth quarter of fiscal year 1996. The RICHMOND has a firm commitment which should keep it employed through March, 1996. The first quarter of fiscal year 1996 has been productive in a number of areas, including the Company's safety efforts. We thank our employees for their contributions to making a positive start to 1996 and our shareholders for their ongoing support and recognition of our progress. PAGE 13 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: 2/14/96 s/JAMES M. HOLLAND James M. Holland Senior Vice President and Chief Accounting Officer EX-27 2
5 0000008411 ATWOOD OCEANICS, INC. 1,000 3-MOS SEP-30-1996 DEC-31-1995 15,231 26,311 14,303 0 4,748 37,410 189,593 (98,713) 155,676 20,560 34,069 0 0 6,636 56,426 155,676 18,138 18,727 13,034 13,034 3,695 0 690 1,308 646 662 0 0 0 662 .10 .10
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