Property And Equipment

6 Months Ended

Mar. 31, 2014

Property, Plant and Equipment [Abstract]

PROPERTY AND EQUIPMENT

A summary of property and equipment by classification is as follows:



(In thousands)	March 31, 2014			September 30, 2013
Drilling vessels and equipment	$	3,591,053		$	2,979,503
Construction work in progress	511,851			715,320
Drill pipe	28,799			26,743
Office equipment and other	34,222			24,439
Cost	4,165,925			3,746,005
Less: Accumulated depreciation	(590,753		)	(581,281		)
Drilling and other property and equipment, net	$	3,575,172		$	3,164,724

Property and equipment are recorded at cost. Interest incurred related to property under construction is capitalized as a component of construction costs. Interest capitalized during the three months ended March 31, 2014 and 2013 was approximately $6.4 million and $6.5 million, respectively. Interest capitalized during the six months ended March 31, 2014 and 2013 was $16.2 million and $15.6 million, respectively.

Construction Projects

Our first ultra-deepwater drillship, the Atwood Advantage, was delivered from the Daewoo Shipbuilding and Marine Engineering Co., Ltd. ("DSME") yard in South Korea in December 2013.

As of March 31, 2014, we had expended approximately $510 million towards our three other ultra-deepwater drillships under construction at the DSME yard. Total remaining firm commitments for these three drillships under construction were approximately $1.2 billion at March 31, 2014.

Sale of Assets

During January 2014, we completed the sale of our standard jackup drilling unit, the Vicksburg, for a sales price of $55.4 million pursuant to a definitive sales agreement entered into on October 3, 2013. As of the date of sale, the carrying value of the rig and its related inventory was approximately $20.5 million.

During April 2014, we completed the sale of a wholly owned subsidiary which owned our semisubmersible tender assist drilling rig, the Seahawk, to Ocean Expert Drilling Services, S.A. for a sales price of $4.0 million. As of March 31, 2014, the carrying value of the rig and of its related inventory, inclusive of a $2.0 million impairment charge recorded in the current fiscal quarter, approximated its sales price.

- Definition

The entire disclosure for long-lived, physical assets used in the normal conduct of business and not intended for resale. Includes, but is not limited to, accounting policies and methodology, roll forwards, depreciation, depletion and amortization expense, including composite depreciation, accumulated depreciation, depletion and amortization expense, useful lives and method used, income statement disclosures, assets held for sale and public utility disclosures.

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