-----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, FkgrjdYv9mvBk1z/CF8I9aNqF3xOdxHDJoY/AL7U1mVGHNhDtsHq4bGZi/i8X5Fs p9AzSWLs/OI/zVUAnLgtkQ== 0000008411-97-000019.txt : 19970211 0000008411-97-000019.hdr.sgml : 19970211 ACCESSION NUMBER: 0000008411-97-000019 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 5 CONFORMED PERIOD OF REPORT: 19961231 FILED AS OF DATE: 19970207 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: 97520623 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 ATWOOD OCEANICS, INC. 10-Q 1ST QTR 12/31/96 ============================================================================== 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, 1996 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: 281-492-2929 _______________ 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, 1996 6,710,413 shares of Common Stock $1 par value =============================================================================== PAGE 2 PART I. FINANCIAL INFORMATION ATWOOD OCEANICS, INC. AND SUBSIDIARIES The condensed consolidated financial statements herein have been prepared by the Company pursuant to the rules and regulations of the Securities and Exchange Commission for interim financial reporting. Accordingly, these financial statements and related information have been prepared without audit and certain information and disclosures normally included in financial statements prepared in accordance with generally accepted accounting principles have been condensed or omitted, although management believes that the disclosures are adequate to make the information not misleading. The condensed consolidated financial statements reflect all adjustments which are, in the opinion of management, necessary to present fairly the financial position of the Company as of December 31, 1996 and September 30, 1996, and the results of its operations and cash flows for the three months ended December 31, 1996 and 1995, respectively. All adjustments were of a normal recurring nature. The interim financial results may not be indicative of results that could be expected for a full year. It is suggested these condensed consolidated financial statements be read in conjunction with the consolidated financial statements and the notes thereto included in the Company's September 30, 1996 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, 1996 1996 (In thousands) ASSETS CURRENT ASSETS: Cash and cash equivalents $ 17,412 $ 17,565 Accounts receivable 18,547 16,687 Inventories of materials and supplies, at lower of average cost or market 5,933 5,454 Deferred tax assets 1,510 1,510 Prepaid expenses 2,282 2,954 Total Current Assets 45,684 44,170 SECURITIES HELD FOR INVESTMENT: Held-to-maturity, at amortized cost 22,577 22,576 Available-for-sale, at fair value 351 351 22,928 22,927 PROPERTY AND EQUIPMENT: Drilling vessels, equipment and drill pipe 198,057 191,801 Other 4,882 4,810 202,939 196,611 Less-accumulated depreciation 107,635 105,487 Net Property and Equipment 95,304 91,124 DEFERRED COSTS AND OTHER ASSETS 752 1,088 $164,668 $159,309 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, 1996 1996 (In thousands) LIABILITIES AND SHAREHOLDERS' EQUITY CURRENT LIABILITIES: Estimated current maturities of long-term notes payable .... $ 22,750 $ 7,933 Accounts payable ........................................... 3,220 2,615 Accrued liabilities ........................................ 8,902 7,471 Total Current Liabilities .............................. 34,872 18,019 LONG-TERM NOTES PAYABLE, net of estimated current maturities .. 8,040 26,540 DEFERRED CREDITS: Income taxes ............................................... 2,287 2,289 Other ...................................................... 9,747 6,907 12,034 9,196 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 6,710,000 and 6,691,000 shares issued and outstanding ............................ 6,710 6,691 Paid-in capital ............................................ 55,698 55,470 Net unrealized holding loss on available-for-sale securities (137) (139) Retained earnings .......................................... 47,451 43,532 Total Shareholders' Equity ............................. 109,722 105,554 $ 164,668 $ 159,309 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, 1996 1995 (In thousands except per share amounts) REVENUES: Contract drilling $ 21,667 $ 17,943 Contract management 426 195 22,093 18,138 COSTS AND EXPENSES: Contract drilling 12,406 12,888 Contract management 254 146 Depreciation 2,302 2,635 General and administrative 1,511 1,060 16,473 16,729 OPERATING INCOME 5,620 1,409 OTHER INCOME (EXPENSE) Interest expense (532) (690) Interest income 646 589 114 (101) INCOME BEFORE INCOME TAXES 5,734 1,308 PROVISION FOR INCOME TAXES 1,815 646 NET INCOME $ 3,919 $ 662 EARNINGS PER COMMON SHARE $ .58 $ .10 WEIGHTED AVERAGE NUMBER OF COMMON SHARES OUTSTANDING 6,707 6,632 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, 1996 1995 (In thousands) CASH FLOW FROM OPERATING ACTIVITIES: Net Income $3,919 $ 662 Adjustments to reconcile net income to net cash provided (used) by operating activities: Depreciation 2,302 2,635 Amortization of deferred costs 287 149 Changes in assets and liabilities: Increase in accounts receivable (1,860) (878) Increase (decrease) in accounts payable 605 (333) Increase in accrued liabilities 1,431 888 Deferred mobilization revenues 4,500 3,000 Other (1,523) 1,166 Total adjustments 5,742 6,627 Net cash provided by operating activities 9,661 7,289 CASH FLOW FROM INVESTING ACTIVITIES: Capital expenditures (6,000) (651) Investment in RIG-200 (378) (1,474) Net cash used by investing activities (6,378) (2,125) CASH FLOW FROM FINANCING ACTIVITIES: Proceeds from exercises of stock options 247 83 Principal payments on long-term notes payable (3,683) (1,500) Payment on short-term note payable --- (500) Net Cash used by financing activities (3,436) (1,917) NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS (153) 3,247 CASH AND CASH EQUIVALENTS, at beginning of period 17,565 11,984 CASH AND CASH EQUIVALENTS, at end of period $17,412 $15,231 Supplemental disclosure of cash flow information: Cash paid during the quarter for domestic and foreign income tax $ --- $ --- Cash paid during the quarter for interest $ 659 $ 738 See accompanying notes to financial statements PAGE 7 PART I. ITEM I - FINANCIAL STATEMENTS ATWOOD OCEANICS, INC. AND SUBSIDIARIES NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS 1. In January 1997, the Company executed a drilling contract for the ATWOOD SOUTHERN CROSS which requires substantial refurbishment and upgrade of the rig. The Company has previously committed to purchase $5 million of long lead-time equipment for such an upgrade and will incur approximately $20 million of additional costs to complete the refurbishment and upgrade. Management estimates that this rig will commence drilling operations in Australia in late fiscal 1997 or early fiscal 1998. 2. In conjunction with the upgrade of the ATWOOD HUNTER, the bank group which holds a mortgage lien on the rig has agreed to provide a waiver of the annual capital expenditures limit for fiscal 1997, along with some other amendments to the loan documents; while the Company has agreed to reduce the outstanding loan amount through a $10 million prepayment, in addition to the quarterly and excess cash flow payment requirements. For the calendar year 1997, the Company estimates payments to the bank group will total $22 million, and, accordingly, such amount has been included in current maturities of long-term notes payable at December 31, 1996. In addition, the Company has agreed to guaranty $3 million of the outstanding balance of such bank debt. 3. In December 1996, the Company increased its short-term line-of-credit from a bank from $10 million to $30 million, secured by the pledge of all of the Company's United States treasury bonds. 4. On February 4, 1997, the Company filed a Registration Statement on Form S-3 with the Securities and Exchange Commission with respect to a public offering by the Company of 1,500,000 shares of common stock. The net proceeds from the Offering will be used by the Company to reduce bank debt and to provide funding for various planned capital expenditures projects, including the ATWOOD HUNTER upgrade and the ATWOOD SOUTHERN CROSS refurbishment and upgrade, and for general corporate purposes. 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 During the first quarter of fiscal 1997, the Company continued to maintain 100% utilization of its drilling equipment. Contract revenues, earnings before interest expense, taxes and depreciation and net income for the three months ended December 31, 1996 increased 22%, 85% and 492%, respectively, compared to the three months ended December 31, 1995. This improvement in operating results reflects the impact of dayrate increases on several of the Company's mobile rigs which occurred during the fourth quarter of fiscal 1996 and the first quarter of fiscal 1997, coupled with the commencement of dayrate revenues in January 1996 on RIG-200. A comparative analysis of contract revenues is as follows: CONTRACT REVENUES -------------------------------------------------- First Quarter First Quarter Fiscal 1997 Fiscal 1996 Variance ------------------ ---------------- ------------- (In millions) ATWOOD FALCON $ 4.2 $ 2.5 $ 1.7 ATWOOD HUNTER 3.5 2.5 1.0 ATWOOD EAGLE 4.7 3.9 0.8 RIG-200 0.4 0.0 0.4 SEAHAWK 2.8 2.7 0.1 VICKSBURG 1.3 1.3 0.0 RIG-19 0.9 1.9 (1.0) RICHMOND 2.0 1.3 0.7 GOODWYN 'A' 1.9 1.8 0.1 NORTH RANKIN 'A' 0.4 0.2 0.2 ------------------ ------------ --------- $22.1 $18.1 $ 4.0 ================== ================ ============= The increase in revenues for the ATWOOD FALCON was due to an increase of approximately 60% in the contract dayrates during the quarter ended September 30, 1996. The increase in revenues for the ATWOOD HUNTER was also due to higher dayrates. The ATWOOD HUNTER completed its work in Malaysia in December 1996 and was mobilized to Singapore to undergo a substantial upgrade. No income or expense associated with the ATWOOD HUNTER will be recognized during the second and third quarters of fiscal 1997 while the upgrade is in process. During fiscal 1996, the ATWOOD EAGLE was relocated from Australia to Equatorial Guinea with an approximate 25% increase in contract dayrate. The delivery of RIG-200 to Australia was completed in November 1996. RIG-200 was installed on the offshore platform in November and December, 1996 and commenced drilling operations in January 1997. Commencing in January 1997, net realized mobilization income (approximately $3 million) will be amortized over the estimated contract term of five years. Relatively long-term, stable contracts for the SEAHAWK and VICKSBURG continue to provide consistency to these operations. During the December 31, 1996 quarter, RIG-19 was relocated to a new platform, which caused revenues to decline as no revenues or expenses were recognized during the relocation period. The Company's only current United States operation, the RICHMOND, continues to experience an increase in dayrate revenues. The increase in NORTH RANKIN 'A' revenues was due to an increase in labor services provided to the rig. Contract drilling and management costs were $12.7 million for the first quarter of fiscal 1997 compared to $13.0 million for the first quarter of fiscal 1996. This decline in operating costs was primarily attributable to lower operating costs for RIG-19 and the ATWOOD EAGLE. An analysis of contract drilling and management costs by rig is as follows: PAGE 9 CONTRACT DRILLING AND MANAGEMENT COSTS ------------------------------------------------- First Quarter First Quarter Fiscal 1997 Fiscal 1996 Variance --------------- ----------------- ------------- (In millions) ATWOOD FALCON $ 1.7 $ 1.7 $ 0.0 ATWOOD HUNTER 1.9 1.8 0.1 ATWOOD EAGLE 2.5 2.9 (0.4) RIG-200 0.0 0.0 0.0 SEAHAWK 1.7 1.6 0.1 VICKSBURG 0.8 0.8 0.0 RIG-19 0.8 1.4 (0.6) RICHMOND 1.3 1.1 0.2 GOODWYN 'A' 1.5 1.4 0.1 NORTH RANKIN 'A' 0.2 0.1 0.1 OTHER 0.3 0.2 0.1 --------------- ----------------- ------------- $12.7 $13.0 $(0.3) =============== ================= ============= The increases in operating costs for the ATWOOD HUNTER, SEAHAWK, RICHMOND, GOODWYN 'A' and NORTH RANKIN 'A' were due primarily to increases in payroll related costs. The reduction in operating costs for the ATWOOD EAGLE's was attributable to the rig working in Equatorial Guinea where labor costs are lower than in Australia. The relocation of RIG-19 to a new platform during the first quarter of fiscal 1997 accounted for its reduction in costs, as no revenues or costs are recognized during the relocation period. An analysis of depreciation expense by rig is as follows: DEPRECIATION EXPENSE -------------------------------------- First Quarter First Quarter Fiscal 1997 Fiscal 1996 ----------------- ---------------- (In millions) ATWOOD FALCON $ 0.7 $ 0.7 ATWOOD HUNTER 0.3 0.4 ATWOOD EAGLE 0.5 0.5 RIG-200 0.0 0.0 SEAHAWK 0.5 0.5 VICKSBURG 0.0 0.0 RIG-19 0.1 0.3 RICHMOND 0.1 0.1 OTHER 0.1 0.1 ----------------- ---------------- $2.3 $2.6 ================= ================ The reduction in depreciation expense for the ATWOOD HUNTER was a result of moving the rig into the shipyard in December 1996 for upgrade. While undergoing upgrade (estimated to take six to seven months) no depreciation expense is recognized on the rig. Depreciation of RIG-200 will commence with the start-up of its drilling operation in January 1997. General and administrative expense increased 43% in the first quarter of fiscal 1997 compared to the first quarter of fiscal 1996. This increase was attributable to increases in payroll related costs and professional fees. As a result of a reduction in outstanding long-term debt, interest expense has declined. Due to an increase in profitability and a reduction in tax attributes, current United States taxation is expected to be higher in fiscal 1997 compared to fiscal 1996, which accounted for the increase in the provision for income taxes. PAGE 10 A summary of the contract status of each of the Company's wholly or partially owned drilling rigs as of January 31, 1997 is as follows:
NAME OF RIG LOCATION CONTRACT STATUS ATWOOD Thailand/Malaysia Term contract (estimated completion November 1997). Upon FALCON Joint Development completion of the current drilling program, the rig will be Area mobilized to the Philippines to commence drilling under a contract for two wells, plus an option (which may be exercised on or before June 30, 1997) for three years of drilling operations in up to 3,500 feet of water in the Philippines' South China Sea. ATWOOD Singapore Being upgraded to operate in up to 3,500 feet of water in the HUNTER Gulf of Mexico (estimated commencement of drilling operations in July or August 1997). ATWOOD Equatorial Guinea Under contract until May 1997 with two six-months options. EAGLE RIG-200 Australia Term contract (minimum duration of two-years from January 1997). SEAHAWK Malaysia Term contract (estimated completion September 1997). VICKSBURG Australia Under contract until January 1998, subject to early termination under certain circumstances. RIG-19 Australia Term contract (estimated drilling work of between 9 and 12 months from January 1997). RICHMOND United States Term contract (estimated completion February 1997). Following completion of the current contract, the rig will commence drilling operations for three firm wells, plus three option wells (estimated completion July 1997). ATWOOD Australia Being refurbished and upgraded to operate in up to 2,000 feet SOUTHERN of water in Australia (estimated commencement of drilling CROSS operations in late fiscal 1997 or early fiscal 1998).
LIQUIDITY AND CAPITAL RESOURCES At December 31, 1996, the Company had outstanding bank debt of $29.3 million all of which was borrowed by a subsidiary of the Company which owns the ATWOOD HUNTER and the ATWOOD EAGLE. The debt is secured by preferred mortgages on the ATWOOD HUNTER and ATWOOD EAGLE, and the loan documents restrict the amount of capital expenditures that can be incurred in any given year on these rigs. The estimated capital expenditures to be incurred in fiscal 1997 to upgrade the ATWOOD HUNTER to enable the rig to perform under its three year contract with British-Borneo Petroleum Inc. will significantly exceed the annual limit. On February 3, 1997, the bank group agreed to waive the annual capital expenditures limit for 1997 and the Company reduced the outstanding loan balances through a $10 million prepayment and agreed to guaranty $3 million of the outstanding balance. The Company estimates that excess cash flows during the 1997 calendar year will require $9 million in principal payments, in addition to regular quarterly payments of $750,000. The remaining balance of the facility is due in March 1998. The Company obtained an additional $30 million short-term line of credit with a bank that is secured by the pledge of all the Company's United States treasury bonds. The Company borrowed $5 million under this facility in February 1997 to finance a portion of the prepayment to the other bank group. Additional borrowings under this facility may be used to fund principal payments to the bank group and to fund equipment upgrades. In January 1997, the Company executed a drilling contract for the ATWOOD SOUTHERN CROSS which requires substantial refurbishment and upgrade of the rig. The Company has previously committed to purchase $5 million of long lead- time equipment for such an upgrade and will incur approximately $20 million of additional costs to complete the refurbishment PAGE 11 and upgrade. Management estimates that this rig will not commence drilling operations in Australia until late fiscal 1997 or early fiscal 1998. Following completion of the ATWOOD FALCON's current contract (estimated November 1997), the rig will be mobilized to the Philippines to commence operations under a contract which provides for drilling of two initial wells (estimated 90 days duration), with an option (which may be exercised on or before June 30, 1997) for three years of drilling operations in up to 3,500 feet of water in the Philippines' South China Sea. In the event the option is exercised, the rig will be transported to a shipyard following completion of the initial two well program to undergo an upgrade at a cost of approximately $50 million, which will be partially offset by a $10 million mobilization fee. Management estimates that the upgrade and mobilization will take six to seven months to complete. On February 4, 1997, the Company filed a Registration Statement on Form S-3 with the Securities and Exchange Commission with respect to a public offering by the Company of 1,500,000 shares of common stock. The Company believes that cash on hand, borrowings under its new credit facility and the proceeds of the Offering will be sufficient to fund its planned rig upgrades and other capital expenditures during 1997. The Company would expect to finance additional upgrade expenditures through a combination of operating cash flow, equity or debt financings or a sale of investment securities. The Company continues to periodically review and adjust its planned capital expenditures in light of current conditions. PAGE 12 ATWOOD OCEANICS, INC. AND SUBSIDIARIES PART II - OTHER INFORMATION ITEM 5. OTHER INFORMATION TO OUR SHAREHOLDERS AND EMPLOYEES The Company commenced fiscal year 1997 with a continuing positive trend in its financial results and activities. Net income for the first quarter of fiscal year 1997 increased $3.3 million (492%) compared to the first quarter of fiscal year 1996. This improvement in financial performance reflects the impact of increased dayrates realized by the Company on several of its rigs during the second half of calendar 1996. Based upon current contract commitments, the Company anticipates a high level of equipment utilization for fiscal 1997. In January 1997, the Company executed a one hundred seventy-five (175) day contract for the ATWOOD SOUTHERN CROSS ("SOUTHERN CROSS") for work in Australia. Following water depth upgrade, enhancement and refurbishment, the SOUTHERN CROSS is currently expected to commence operation in late fiscal 1997 or early fiscal 1998. The Company remains optimistic about ongoing opportunities for the SOUTHERN CROSS in 1998 following this initial contract commitment. In October 1996, the ATWOOD HUNTER ("HUNTER") completed a fifty well contract in Malaysia (commenced in April 1993) and, after drilling one well for another operator, moved to a Singapore shipyard in December 1996 to commence upgrade to operate in up to 3500 feet of water in the U.S. Gulf of Mexico. To date, drydocking and other upgrade work in Singapore has proceeded on schedule. The HUNTER is scheduled to be dry transported to the U.S. Gulf of Mexico during the Company's third fiscal quarter for completion of upgrade and enhancement. The HUNTER should commence its three year contract in the Company's fourth fiscal quarter. The ATWOOD FALCON, ATWOOD EAGLE and VICKSBURG are being bid for ongoing and upgrade opportunities commencing after current contract commitments. With world dayrates for semisubmersibles and jack-ups having increased, there remains further upside potential for these rigs based on future contract expirations and upgrade possibilities. Prevailing dayrates have, in certain instances, increased beyond existing operating dayrates and daily margins for these units. In January 1997, RIG-19 completed an inter-platform move and RIG-200 completed its initial offshore platform installation, with drilling operations commencing for both operations. RIG-200 is the Company's newest state-of-the-art rig owned in a 50%/50% joint venture with Helmerich Payne International Drilling Co. and operated by an Atwood Oceanics affiliate. Progress was again made during the quarter in the continuing development of the Company's fleet-wide safety and quality management systems. Our first quarter of fiscal year 1997 has been busy and productive for the Company and its employees. PAGE 13 ATWOOD OCEANICS, INC. AND SUBSIDIARIES PART II. OTHER INFORMATION ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K (a) Exhibits 10.1 Limited Waiver and Consent effective as of October 1, 1996 between Atwood Deep Seas, Ltd., Texas Commerce Bank, National Association, Comac Partners and The Chase Manhattan Bank 10.2 Limited Guaranty dated as of October 1, 1996 by the Company in favor of The Chase Manhattan Bank, as agent 10.3 Letter dated December 3, 1996 from Liberty Bank & Trust Company of Oklahoma City, N.A. evidencing a credit facility 99.1 Press Release dated February 4, 1997 (b) Reports on Form 8-K None PAGE 14 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: February 6, 1997 s/JAMES M. HOLLAND James M. Holland and Chief Accounting Officer PAGE 15 EXHIBIT INDEX 10.1 Limited Waiver and Consent effective as of October 1, 1996 between Atwood Deep Seas, Ltd., Texas Commerce Bank, National Association, Comac Partners and The Chase Manhattan Bank 10.2 Limited Guaranty dated as of October 1, 1996 by the Company in favor of The Chase Manhattan Bank, as agent 10.3 Letter dated December 3, 1996 from Liberty Bank & Trust Company of Oklahoma City, N. A. evidencing a credit facility 99.1 Press Release dated February 4, 1997 EX-10.1 2 LIMITED WAIVER AND CONSENT EXHIBIT 10.1 LIMITED WAIVER AND CONSENT Reference is made to that certain Second Amended and Restated Master Loan Restructuring Agreement, dated as of March 31, 1995, as amended by the First Amendment thereto dated as of November 28, 1995 (as so amended, the "Agreement") by and between ATWOOD DEEP SEAS, LTD., a Texas limited partnership (the "Partnership"), TEXAS COMMERCE BANK, NATIONAL ASSOCIATION ("TCB"), COMAC PARTNERS ("CoMac") and THE CHASE MANHATTAN BANK, formerly known as Chemical Bank ("Chase"; collectively with TCB and CoMac, referred to as the "Banks") and CHASE, as agent (in such capacity, the "Agent"). Terms used and not defined herein shall have the meanings given them in the Agreement. The Partnership has requested that the Banks consent to the provisions set forth herein in consideration for the covenants of the Partnership made herein. I. WAIVER AND CONSENT Subject to the conditions and limitations set forth below, the Banks hereby consent to, and waive any violation of the following provisions, for a period commencing October 1, 1996 and ending September 30, 1997: A. Section 9.8(iii) of the Agreement containing certain restrictions on the Partnership's ability to make capital expenditures exceeding $1,200,000 in any of the Partnership's Fiscal Years without the Bank's consent, resulting from the Partnership's expenditure of an amount not to exceed $39,000,000 on the installation of certain equipment upgrades (the "Upgrades") to the Hunter Vessel required pursuant to a Drilling Contract with British-Borneo Petroleum Inc. dated June 20, 1996 (the "Contract"), as such Contract is in effect on the date hereof a copy of such Contract has been previously provided to the Banks; B. Clause Sixth of the Hunter Mortgage and Section 9.6 of the Agreement containing certain prohibitions on the Partnership's ability to sell any of its property, business or assets, caused by the removal from the Hunter Vessel and the sale to Atwood or an Affiliate of Atwood of (i) that certain FMC Link Belt Crane with 120 feet of boom (the "Crane"), for $292,000, and (ii) that certain 1,500 feet Vetco Riser with MR6C connectors (the "Riser"), for $572,000; C. Section 1.1 of the Agreement containing the definition of "Gross Cash Receipts" caused by the exclusion of the proceeds of sale of the Crane and the Riser for the values set forth in paragraph B above, from the definition of "Gross Cash Receipts"; and D. Section 1.1 of the Agreement containing the definition of "Gross Cash Receipts" and "Cash Operating Expenses" caused by the exclusion of the mobilization fee in an amount not in excess of $10,000,000 paid to the Partnership under the Contract, from the definition of "Gross Cash Receipts" and the exclusion of the actual mobilization costs paid by the Partnership under the Contract from the definition of "Cash Operating Expenses"; II. COVENANTS OF THE PARTNERSHIP AND ATWOOD Atwood and the Partnership, in consideration of the waivers and consents set forth above, hereby covenant and agree that: A. Upon the execution of this Limited Waiver and Consent Agreement, the Partnership shall pay the Banks, as a prepayment of the Term Loans, $10,000,000; PAGE 2 B. Upon the execution of this Limited Waiver and Consent Agreement, Atwood agrees to execute a Limited Guaranty Agreement in favor of and in a form satisfactory to the Banks guaranteeing the Partnership's indebtedness for the scheduled principal payments due during the calendar year ending on December 31, 1997 under Section 3.1 of the Agreement as modified in clause F below; C. For the period commencing October 1, 1996 and ending December 31, 1997, no advances by Atwood to the Partnership in connection with the Contract will be characterized as Temporary Working Capital Loans pursuant to Sections 4.2 and 9.2 of the Agreement and all such advances will be characterized as Partnership Advance Notes; D. For the period commencing October 1, 1996 and ending the Termination Date, (i) the Partnership shall not be entitled to any distribution of Excess Cash, under Section 4.2 of the Agreement, upon the reduction of the aggregate principal amount of the Term Loans below $20,000,000 and (ii) all Excess Cash payable by the Partnership from and after such time (such time being described in clause Third-(y) of subsection 4.2) shall be paid to the Banks; E. In the event the Contract is terminated prior to the completion of the Upgrades required by such Contract, Atwood and the Partnership will, within ninety days of such termination, cause the Hunter Vessel to be put back into such drilling operating condition as is equivalent to, or better than, the condition of the Hunter Vessel prior to the commencement of the Upgrades; F. Anything contained in the Loan Agreement to the contrary notwithstanding, including clause (i) of subsection 4.2(b), all Excess Cash applied or to be applied to the scheduled principal payments of the Term Loans due at any time on or after January 1, 1997 shall be applied to the Term Loans in the inverse order of maturity thereof. In furtherance thereof, the prepayments of Excess Cash received by the Banks and heretofore applied to the scheduled principal payments of the Term Loans due at the end of the first two Fiscal Quarters in 1997 shall be reapplied to the Term Loans in the inverse order of maturity thereof. III. MISCELLANEOUS A. The Partnership hereby represents and warrants to the Banks that immediately after giving effect to this Limited Waiver and Consent there shall exist no Default or Event of Default and immediately after giving effect to this Limited Waiver and Consent all representations and warranties contained herein, in the Agreement or otherwise made in writing in connection herewith or therewith shall be true and correct in all material respects with the same force and effect as if those representations and warranties had been made on and as of the date hereof. B. Subsection 10.1 of the Loan Agreement is hereby amending by adding thereto a new clause (m) which shall read in its entirety as follows: "(m) The Limited Guaranty dated the date hereof made by Atwood in favor of the Banks shall cease to be in full force and effect or Atwood shall so assert in writing." C. Except as expressly waived or agreed herein, all covenants, obligations and agreements of the Partnership contained in the Agreement shall remain in full force and effect in accordance with their terms. Without limitation of the foregoing, the consents, waivers and agreements set forth herein are limited precisely to the extent set forth herein and shall not be deemed to (1) be a consent or agreement to, or waiver or modification of, any other term or condition of the agreement or any of the documents referred to therein, or (2) except as expressly set forth herein, prejudice any right or rights which the Banks may now have or may have in the future under or in connection with the Agreement or any of the documents referred to therein. Except as expressly modified hereby, the terms and provisions of the Agreement and any other documents or instruments executed in connection with any of the foregoing, are and shall remain in full force and effect, and the same are hereby ratified and confirmed by the Partnership in all respects. PAGE 3 D. The Partnership agrees to reimburse and save the Banks harmless from and against liabilities for the payment of all out-of-pocket costs and expenses arising in connection with the preparation, execution, delivery, amendment, modification, waiver and enforcement of, or the preservation of any rights under, this Limited Waiver and Consent, including, without limitation, the reasonable fees and expenses of legal counsel to the Banks which may be payable in respect of, or in respect of any modification of, this Limited Waiver and Consent. E. This Limited Waiver and Consent and the rights and obligations of the parties hereunder shall be construed in accordance with and be governed by the laws of the State of New York. F. This Limited Waiver and Consent and the documents referred to herein represent the entire understanding of the parties hereto regarding the subject matter hereof and supersede all prior and contemporaneous oral and written agreements of the parties hereto with respect to the subject matter hereof. G. This Limited Waiver and Consent may be separately executed in counterparts and by the different parties hereto in separate counterparts, each of which when so executed shall be deemed to constitute one and the same agreement. PAGE 4 IN WITNESS WHEREOF, the undersigned parties have executed this Limited Waiver and Consent as of the 3rd day of February, 1997. ATWOOD DEEP SEAS, LTD. By: ATWOOD HUNTER CO., General Partner By: /s/ James M. Holland James M. Holland Vice President ATWOOD OCEANICS, INC. By: /s/ James M. Holland James M. Holland Senior Vice President THE CHASE MANHATTAN BANK, formerly known as Chemical Bank, as Agent and as a Bank By: /s/ Charles O. Freedgood Charles O. Freedgood Vice President TEXAS COMMERCE BANK, NATIONAL ASSOCIATION By: /s/ James A. Flynn Name: James A. Flynn Title: Vice President COMAC PARTNERS By: /s/ Paul Coughlin Name: Paul Coughlin Title: General Partner EX-10.2 3 LIMITED GUARANTY EXHIBIT 10.2 LIMITED GUARANTY THIS LIMITED GUARANTY (this "Guaranty") is made as of the 1st day of October, 1996, by ATWOOD OCEANICS, INC., a Texas corporation (the "Guarantor"), in favor of THE CHASE MANHATTAN BANK, as agent ("Agent") for the Banks parties to the Loan Agreement described below. RECITALS A. Atwood Deep Seas, Ltd., a Texas limited partnership (the "Borrower"), has asked the Banks for certain waivers and consents concerning that certain Term Loan (the "Loan") described in and to be made pursuant to the terms and conditions of the Second Amended and Restated Master Loan Restructuring Agreement, dated March 31, 1995 as amended by the First Amendment thereto dated as of November 28, 1995 (as further amended, substituted and restated from time to time, the "Loan Agreement"). B. The Guarantor has requested the Banks to grant the waivers and consents concerning the Loan to the Borrower pursuant to the Loan Agreement and that certain Limited Waiver and Consent ("Limited Waiver") dated of even date herewith. C. It is a condition precedent, among others, to the Banks' consideration of the Borrower's request for the waivers and consents regarding the Loan set forth in that certain Limited Waiver that the Guarantor enter into this Guaranty in order to guarantee the full and prompt payment and performance by the Borrower of the Obligations (as defined below). D. All capitalized terms that are used, but are not otherwise defined herein, shall have the meanings ascribed to them in the Loan Agreement. E. In granting the waivers and consents set forth in the Limited Waiver, each Bank is relying upon the agreements of the Guarantor, as set forth in this Guaranty. NOW THEREFORE, in consideration of the Banks' agreement to execute the Limited Waiver and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged by the Guarantor, the Guarantor agrees with Agent as follows: 1. Unconditional Guaranty. The Guarantor hereby unconditionally and irrevocably guarantees to Agent for the ratable benefit of the Banks and their respective successors and assigns the following: (a) The due and punctual repayment, whether at stated maturity, by acceleration or otherwise) in full (and not merely the collection) of (1) the sum of the principal payments due to each Bank under Section 3.1 of the Loan Agreement (as modified by the Limited Waiver and Consent thereto dated the date hereof) during the period commencing October 1, 1996 and ending December 31, 1997 pursuant to each of the Borrower's Term Notes and the interest thereon, ("1997 Principal") and (2) any other obligations of Borrower to the Banks, or any of them, under the Restructuring Documents, to pay the 1997 Principal including, without limitation, late charges, penalties, enforcement costs, indemnification obligations and attorneys' fees specifically relating to the payment or collection of the 1997 Principal (collectively, the "Obligations"); in each case when due and payable, whether on demand, on any installment payment date or at the stated or accelerated maturity. 2. Primary Liability. (a) The obligations and liabilities of the Guarantor under this Guaranty are primary, direct, absolute, unlimited, continuing, irrevocable and immediate and not conditional or contingent upon the pursuit by Agent or any Bank of any rights or remedies it may have against the Borrower or any person or entity PAGE 2 otherthan the Borrower who may now or at any time hereafter be primarily or secondarily liable for any or all of the Obligations, including, without limitation, any other maker, endorser, surety, or guarantor of all or a portion of the Obligations or any person or entity who is now or hereafter a party to any of the Restructuring Documents (collectively, the "Obligors"). (b) Without limiting the generality of the foregoing, neither Agent nor any Bank shall not be required to make any demand on Borrower or the Obligors, sell at foreclosure or otherwise pursue or exhaust its remedies against any collateral or other security (or any part thereof) now or hereafter pledged, assigned or granted to secure the Obligations, before, simultaneously with or after enforcing its rights and remedies hereunder against the Guarantor. (c) The obligations and liabilities of the Guarantor hereunder and under the other Restructuring Documents shall not be subject to any counterclaim, recoupment, set-off, reduction, or defense based upon any claim that the Guarantor may have against Agent, any Bank, Borrower or any of the Obligors, are independent of any other guaranty at any time in effect with respect to the Obligations, and may be enforced regardless of the existence of any other guaranty. (d) Any one or more successive and/or concurrent actions may be brought hereunder against the Guarantor either in the same action, if any, brought against Borrower or any of the Obligors, or in separate actions, as often as Agent or the Banks may deem advisable. (e) Agent and any Bank may, without notice to or consent of the Guarantor or any other Obligor and with or without consideration, release, compromise, settle with and proceed against any Obligor and any security and collateral given by such Obligor without affecting in any way the obligations and liabilities of the Guarantor hereunder or under any of the Restructuring Documents. 3. Indulgences. The Guarantor expressly agrees that Agent and each Bank may, in its sole and absolute discretion, at any time and from time to time, without notice to or further assent of the Guarantor and with or without consideration, and without in any way releasing, modifying, waiving, affecting or impairing any of the obligations and liabilities of the Guarantor hereunder: (a) waive compliance with, or any defaults under, or grant any other indulgences with respect to, the Term Note or any of the other Restructuring Documents (including, but not limited to, any payment terms thereof); (b) amend, substitute, extend, renew or modify any provision of the Term Note or the other Restructuring Documents; (c) effect any release, compromise or settlement in connection with the Restructuring Documents; (d) agree to the sale, substitution, exchange, release or other disposition of all or any part of any collateral for the Obligations and apply such collateral, and direct the order or manner of sale thereof; (e) make advances for the purpose of performing any term or covenant contained in the Restructuring Documents with respect to which the Borrower or any other party shall be in default; (f) assign or otherwise transfer this Guaranty or any of the other Restructuring Documents or any interest herein or therein; (g) fail, omit, lack diligence, or delay to enforce, assert, or exercise any right, power, privilege, or remedy conferred upon Agent or any Bank under the provisions of any of the Restructuring Documents or under applicable law; and PAGE 3 (h) deal in all respects with Borrower or any Obligor as if this Guaranty were not in effect. 4. Waiver. The Guarantor hereby expressly waives: (a) presentment, protest and demand, notice of acceleration, notice of protest, notice of demand, notice of dishonor, notice of non-payment and notice of acceptance with respect to the Term Note, the Obligations and this Guaranty; (b) notice of the execution and delivery of the Restructuring Documents, the making of the Loan or of the creation of any of the Obligations; (c) notice of any default or Event of Default under this Guaranty or any of the other Restructuring Documents and of all indulgences; (d) demand for the observance, performance or enforcement of any term or provision of this Guaranty or any of the other Restructuring Documents; (e) all other notices and demands otherwise required by law that the Guarantor may lawfully waive. The Guarantor waives any defense arising by reason of any disability or other defense of Borrower, any lack of authority of Borrower with respect to the Restructuring Documents, the illegality, invalidity, or lack of enforceability of the Restructuring Documents from any cause whatsoever, the failure of Agent or any Bank to perfect or maintain perfection of any interest in any security given to secure the Obligations, or the cessation from any cause whatsoever of the liability of the Borrower (except for the defense that the Borrower has duly performed in accordance with the Restructuring Documents). The Guarantor specifically agrees that the misuse or misapplication of any of the proceeds of the Loan by the Borrower or any other person or entity shall not affect, lessen, impair or release the Guarantor from its obligations and liabilities hereunder. 5. Subordination: Subrogation. Any liability, indebtedness or obligation of Borrower to the Guarantor or of any Obligor to the Guarantor of every kind or nature, whether now existing or hereafter created, due or to become due, direct or contingent, is hereby subordinated in all respects to the payment of the Obligations to Agent and the Banks. The Guarantor agrees not to accept or receive any payment with respect to any such liability, indebtedness or obligation until the payment and performance in full of all of the Obligations. Until payment in full of the Obligations, the Guarantor hereby irrevocably waives: (a) all rights the Guarantor may have at law or in equity to seek subrogation, contribution, indemnification or any other form of reimbursement from Borrower or any Obligor. (b) any right to enforce any remedy that Agent or any Bank now has or may hereafter have against Borrower or any Obligor; and (c) the benefit of, and any right to participate in, any security for the Obligations now or hereafter held by Agent or any Bank 6. Representations and Warranties. The Guarantor hereby represents and warrants to Agent that: (a) The Guarantor is a corporation, duly organized and validly existing in good standing under the laws of the State of Texas and has the requisite power and authority (A) to carry on its business as presently conducted, (B) to enter into and perform its obligations under each Restructuring Document to which the Guarantor is a party, and (C) to guarantee the Loan. PAGE 4 (b) The execution, delivery and performance by the Guarantor of each of the Restructuring Documents to which the Guarantor is a party, have been duly authorized by all necessary corporate action, do not require stockholder approval other than such as has been duly obtained or given, do not or will not contravene any of the terms of its articles of incorporation or by-laws, and will not violate any provision of law or of any order of any court or Governmental Authority or constitute (with or without notice or lapse of time or both) a default under, or result in the creation of any security interest, lien, charge or encumbrance upon any of the properties or assets of the Guarantor pursuant to, any agreement, indenture or other instrument to which the Guarantor is a party or by which the Guarantor may be bound; each Restructuring Document has been duly executed and delivered by the Guarantor and constitutes the legal, valid and binding agreement or instrument of the Guarantor, enforceable against the Guarantor in accordance with the respective terms thereof. The enforceability of the Restructuring Documents, however, is subject to all applicable bankruptcy, insolvency, reorganization, moratorium and other laws affecting the rights of creditors and to general equity principles. (c) There are no actions, suits or proceedings pending or, to the knowledge of the Guarantor, threatened before any court, arbitrator or Governmental Authority (A) under the Environmental Laws, (B) that would prevent the execution or delivery of the Restructuring Documents, or (C) that, either individually or in the aggregate, might materially affect the Vessels, the financial condition or operations of the Guarantor, the authority of the Guarantor to enter into and perform this Guaranty and the other Restructuring Documents, or the ability of the Guarantor to pay the Obligations in full. (d) Guarantor represents and warrants that the representations and warranties of Borrower made in the Loan Agreement are true and accurate in each and every respect. 7. Affirmative Covenants. Until payment in full and the performance of all of the Obligations, the Guarantor shall comply with each of the covenants set forth in the Loan Agreement as if it were a Borrower thereunder. 8. Event of Default. The occurrence of any one or more of the following events shall be "Events of Default" hereunder: 8.1 Failure to Pay. The Guarantor shall fail to perform or observe any of its obligations under Section 1 of this Guaranty. 8.2 Failure to Perform. The Guarantor shall fail to perform or observe any covenant, condition or agreement (other than those set forth in Section 1 of this Guaranty) to be performed or observed by it hereunder or under any of the other Restructuring Documents, which failure shall continue unremedied after written notice thereof from Agent. 8.3 Breach of Representations and Warranties. Any certificate, statement, representation, warranty or audit contained herein or heretofore or hereafter furnished with respect to this Guaranty or any of the other Restructuring Documents by or on behalf of the Guarantor proves to have been false in any material respect at the time as of which the facts therein set forth were stated or certified, or omits any substantial contingent or unliquidated liability or claim against the Guarantor. 8.4 Event of Default Under Other Restructuring Documents. A default or an Event of Default (as defined therein) occurs under any of the other Restructuring Documents. 8.5. Bankruptcy. Any of the following events shall occur: (i) The Guarantor commences a voluntary case under Title 11 of the United States Code as now or hereafter in effect, or any successor thereto (the "Bankruptcy Code"); or PAGE 5 (ii) An involuntary case is commenced against the Guarantor under the Bankruptcy Code and relief is ordered against the Guarantor or the petition is controverted but is not dismissed or stayed within sixty (60) days after the commencement of the case; or (iii)A custodian (as defined in the Bankruptcy Code) or a similar official is appointed for, or takes charge of, all or substantially all of the property of the Guarantor and such appointment is not terminated within sixty (60) days; or (iv) The Guarantor commences any other proceeding under any reorganization, arrangement, readjustment of debt, relief of debtors, dissolution, insolvency, liquidation or similar law of any jurisdiction relating to the Guarantor (whether now or hereafter in effect), or there is commenced against the Guarantor any such proceeding that remains undismissed or unstayed for a period of sixty (60) days; or the Guarantor is adjudicated insolvent or bankrupt; or the Guarantor fails to controvert in a timely manner any such case under the Bankruptcy Code or any such proceeding, or any order of relief or other order approving any such case or proceeding is entered; or (v) The Guarantor, by any act or failure to act, indicates its consent to, approval of or acquiescence in any such case or proceeding or in the appointment of any custodian of or for it or any substantial part of its property or suffers any such appointment to continue undischarged or unstayed for a period of ninety (90) days; or (vi) The Guarantor makes a general assignment for the benefit of creditors; or (vii)Any corporate action is taken by the Guarantor for the purpose of effecting any of the foregoing. 8.6 Reorganization: Attachment. An order, judgment or decree shall be entered, without the application, approval or consent of the Guarantor, by any court of competent jurisdiction, approving a petition seeking reorganization of the Guarantor or seizure or attachment of all or a substantial part of the Guarantor's assets, and such order, judgment or decree shall continue unstayed and in effect for any period of sixty (60) consecutive days. 8.7 Judgments. Judgments or orders for the payment of monies in excess of USD 500,000 in aggregate shall be rendered against the Guarantor and such judgments or orders shall continue unsatisfied, unstayed or unbonded for a period of thirty (30) days. 8.8 Cross Default. The Guarantor, any other guarantor of the Loan or any affiliate of the Guarantor, shall be in default under any direct, indirect or contingent material obligation or indebtedness now or hereafter existing in favor any Bank or any other person or entity. For purposes hereof, an "affiliate" of the Guarantor shall mean any person or entity which controls, is controlled by or is under common control with the Guarantor. 8.9 Anticipatory Repudiation. The Guarantor engages in a course of action or dealing that causes Agent reasonably to believe that there is an anticipatory repudiation of the Guarantor's obligations under this Guaranty. 8.10 Termination of Guarantor. The corporate existence of the Guarantor is terminated and its obligations hereunder are not assumed by a successor in interest reasonably satisfactory to Agent. 9. Rights and Remedies. Upon the occurrence of an Event of Default (whether or not declared to be such by Agent or the required Banks), and in every such event and at any time thereafter, Agent may (but shall PAGE 6 not be obligated to) do any one or more of the following at the sole cost and expense of the Guarantor, all of which are hereby authorized by the Guarantor: (a) Declare the Obligations (whether then due or not) to be immediately due and payable by the Guarantor, and the Guarantor shall on demand pay the same to Agent for the ratable benefit of the Banks in immediately available funds; (b) Sue for and recover all liquidated damages, accelerated payments and/or other sums otherwise recoverable from Borrower under the Restructuring Documents (whether then due or not); (c) Sue for and recover all damages then or thereafter incurred by Agent and each Bank as a result of such Event of Default; and/or (d) Seek specific performance of the Guarantor's obligations hereunder and under the other Restructuring Documents. 10. Expenses. The Guarantor shall be liable for, and shall pay to Agent and each Bank upon demand, all expenses incurred by or on behalf of Agent and each Bank by reason of any Event of Default or the exercise by Agent or any Bank of its rights or remedies hereunder and under any of the other Restructuring Documents, including, but not limited to, attorneys' fees and expenses. 11. Continuing Guaranty. This Guaranty is a continuing one and shall terminate only upon payment in full of the Obligations and the performance of all of the terms, covenants and conditions of the Restructuring Documents, and satisfaction by the Guarantor of all of his obligations hereunder. This Guaranty shall continue to be effective, or be reinstated, as the case may be, if at any time any payment, or any part thereof, of any of the Obligations is rescinded, avoided, reduced or must otherwise be restored or returned by Agent or any Bank upon the insolvency, Bankruptcy, receivership, dissolution, liquidation or reorganization of any of the Borrower, the Guarantor or the Obligors, or upon or as a result of the appointment of a receiver, intervener or conservator of, or trustee or similar officer for, any of the Borrower, the Guarantor or the Obligors or any of their respective property, or otherwise, all as though such payment had not been made and irrespective of whether such payment is returned to the party who originally made it or to some other party. 12. Notice. All notices, requests and demands shall be in writing (including telecopier transmission) given to or made upon the respective parties hereto as follows: In the case of the Guarantor: Atwood Oceanics, Inc. 15835 Park Ten Place Drive Houston, Texas 77084 Attention: Senior Vice President Telecopier: (713) 492-0345 In the case of Agent: The Chase Manhattan Bank 270 Park Avenue New York, New York 10017 Attention: Charles O. Freedgood Telecopier: (212) 661-8396 or in such other manner an any party hereto shall designate by written notice to the other parties hereto. All such notices shall be effective upon delivery or three (3) days after being deposited in the United States mail with PAGE 7 postage prepaid certified, return receipt requested in a correctly addressed wrapper, or upon receipt if delivered to Federal Express or similar courier company or transmitted by telefax during normal business hours, except that all notices, requests and demands to Agent shall not be effective until received by Agent. 13. Cumulative Remedies: Waiver of Rights. Each right, power and remedy of Agent and the Banks as provided for in this Guaranty or in any of the other Restructuring Documents or now or hereafter existing at law, in equity or otherwise shall be cumulative and concurrent and shall be in addition to every other right, power or remedy provided for in this Guaranty, in the other Restructuring Documents or now or hereafter existing at law, in equity or otherwise. The exercise or beginning of the exercise by Agent or any Bank of any one or more of such rights, powers or remedies shall not preclude the simultaneous or later exercise by Agent or any Bank of any or all such other rights, powers or remedies. No delay or omission by Agent or any Bank in exercising any such right or remedy shall operate as a waiver thereof. No waiver of any rights and remedies hereunder, and no modification or amendment hereof, shall be deemed made by Agent or any Bank unless in writing and duly signed by Agent and such Bank. Any such written waiver shall apply only to the particular instance specified therein and shall not impair the further exercise of such right or remedy or of any other right or remedy of Agent or any Bank. 14. Severability. In case any provision (or any part of any provision) contained in this Guaranty shall for any reason be held to be invalid, illegal or unenforceable in any respect, such invalidity, illegality or unenforceability shall not affect any other provision (or remaining part of the affected provision) of this Guaranty, and this Guaranty shall be construed as if such invalid, illegal or unenforceable provision (or part thereof) had never been contained herein but only to the extent it is invalid, illegal or unenforceable. 15. Survival of Terms. All covenants, agreements, representations and warranties made by the Guarantor herein, in the Restructuring Documents or in any other certificates, instruments or documents delivered pursuant hereto shall survive the making by the Banks of the Term Loans and the execution and delivery of the Term Notes, and shall continue in full force and effect so long as any of the Obligations are outstanding and unpaid. 16. Entire Agreement: Modification. This Guaranty, together with the other Restructuring Documents, constitute the final and entire agreement and understanding of the parties, and any term, condition, covenant or agreement not contained herein or therein is not a part of the agreement and understanding of the parties. Neither this Guaranty, nor any term, condition, covenant or agreement hereof, may be changed, waived, discharged or terminated orally, except by an instrument in writing signed by the party against whom enforcement of the change, waiver, discharge or termination is sought. 17. Construction. Whenever used herein, the singular number shall include the plural, the plural the singular and the use of the masculine, feminine or neuter gender shall include all genders. The headings in this Guaranty are for convenience only and shall not limit or otherwise affect any of the terms hereof. 18. Applicable Law and Jurisdiction. (a) THIS GUARANTY AND THE RESTRUCTURING DOCUMENTS (INCLUDING, BUT NOT LIMITED TO, THE VALIDITY AND ENFORCEABILITY HEREOF AND THEREOF SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK, OTHER THAN CONFLICT OF LAWS RULES THEREOF. ANY LEGAL ACTION OR PROCEEDING AGAINST THE GUARANTOR WITH RESPECT TO THIS GUARANTY OR ANY RESTRUCTURING DOCUMENT MAY BE BROUGHT IN THE COURTS OF THE STATE OF NEW YORK, THE U.S. FEDERAL COURTS IN SUCH STATE, SITTING IN THE COUNTY OF NEW YORK, OR IN THE COURTS OF ANY OTHER JURISDICTION WHERE SUCH ACTION OR PROCEEDING MAY BE PROPERLY BROUGHT, AND THE GUARANTOR HEREBY IRREVOCABLY ACCEPTS THE JURISDICTION OF SUCH COURTS FOR THE PURPOSE OF ANY ACTION OR PROCEEDING. The Guarantor further irrevocably consents to the service of process out of said courts by the mailing thereof by Agent by U.S. registered or certified mail postage prepaid to the party to be served at its address designated in PAGE 8 Section 12 hereof. The Guarantor agrees that a final judgment in any action or proceeding shall be conclusive and may be enforced in any other jurisdiction by suit on the judgment or in any other manner provided by law. Nothing in this Section shall affect the right of Agent or the Banks to serve legal process in any other manner permitted by law or affect the right of Agent or the Banks to bring any action or proceeding against the Guarantor or its properties in the courts of any other jurisdiction. To the extent that the Guarantor has or hereafter may acquire any immunity from jurisdiction of any court or from any legal process (whether through service of notice, attachment prior to judgment, attachment in aid of execution, execution or otherwise) with respect to either itself or its property, the Guarantor hereby irrevocably waives such immunity in respect of its obligations under this agreement and the other Restructuring Documents.. (b) THE AGENT, EACH BANK AND THE GUARANTOR HEREBY IRREVOCABLY WAIVE ALL RIGHT TO A TRIAL BY JURY IN ANY ACTION, PROCEEDING OR COUNTERCLAIM ARISING OUT OF OR RELATING TO THIS GUARANTY OR ANY OTHER RESTRUCTURING DOCUMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY OR THEREBY. 19. Assignment. The Agent and each Bank may, without notice to or consent of the Guarantor, sell, assign or transfer to any one or more persons or entities, all or any part of the Obligations or all or any part of the Restructuring Documents and each such assignee or transferee shall have the right to enforce the Obligations and such Restructuring Documents as fully as the transferor, provided that such transferor shall continue to have the unimpaired right to enforce the provisions of the Restructuring Documents and the Obligations that it has not sold, assigned or transferred. Additionally, each Bank may sell or grant to any other one or more persons or entities participation in all or any part of the Obligations or all or any part of the Restructuring Documents. In connection with and prior to and after any such sale, transfer, assignment or participation, and each selling Bank may disclose and furnish to any prospective or actual purchaser, transferee, assignee or participant, any and all reports, financial statements and other information obtained by Agent or such Bank at any time and from time to time in connection with the Term Loans, the Obligations, the Restructuring Documents or otherwise. The Guarantor shall fully cooperate with Agent and each selling Bank in connection with any such assignment and shall execute and deliver such consents and acceptances to any such assignment necessary or desirable, in Agent's sole discretion, to effect any such assignment. IN WITNESS WHEREOF, the Guarantor has caused this Limited Guaranty to be duly executed as of the date first above written. ATWOOD OCEANICS, INC. By: /s/ James M. Holland James M. Holland Senior Vice President EX-10.3 4 LETTER EXHIBIT 10.3 (Liberty Logo) December 3, 1996 James M. Holland, Senior Vice President 15835 Park Ten Place Drive Houston, TX 77084 Dear Jim: Pursuant to our telephone conversation this morning, this letter serves to formally confirm our offer to provide Atwood Oceanics short-term funding through repurchase agreement under the following terms. Rate: Fixed at the then-current one-month LIBOR rate plus seventy five basis points (priced at issuance). Term: Renewable monthly at your discretion through August 31, 1997 (later if mutually agreed). Amount: Not to exceed $30,000,000.00 unless mutually agreed. Securities: U.S. Treasury Billy, Notes or Bonds. Repurchase Agreement: Subject to all terms and conditions of previously executed contract. Dale Ireland (Commercial Lending) will contact you with potential options regarding a potential credit line for borrowing needs in excess of your available securities. Feel free to contact me at 1-800-688-8572 or 918-586-5955 (direct) if I can answer any questions or provide additional help. Sincerely, /s/ John Mark Cassil John Mark Cassil Senior Vice President & Treasury Manager cc: Sonya Tyau Dale Ireland Liberty Bank and Trust Company of Tulsa, N.A. 15 East Fifth Street - Tulsa, OK 74103 Liberty Bank and Trust Company of Oklahoma City, N.A. P. O. Box 25848 - Oklahoma City, OK 73125 EX-99 5 PRESS RELEASE 2/4/97 EXHIBIT 99 HOUSTON, TEXAS FEBRUARY 4, 1997 FOR IMMEDIATE RELEASE ATWOOD OCEANICS, INC., HOUSTON-BASED INTERNATIONAL DRILLING CONTRACTOR ANNOUNCED TODAY THAT IT HAS FILED A REGISTRATION STATEMENT FOR THE OFFER AND SALE OF 1.5 MILLION SHARES OF COMMON STOCK OF THE COMPANY. THE OFFERING WILL BE UNDERWRITTEN BY CREDIT SUISSE FIRST BOSTON, HOWARD, WEIL, LABOUISSE, FRIEDRICHS INCORPORATED AND RAUSCHER PIERCE REFSNES, INC. THE COMPANY INTENDS TO USE THE PROCEEDS OF THE OFFERING FOR THE UPGRADE AND REFURBISHMENT OF CERTAIN OF THE COMPANY'S DRILLING RIGS, TO REPAY AMOUNTS OUTSTANDING UNDER CERTAIN BANK LOANS AND FOR GENERAL CORPORATE PURPOSES. HELMERICH & PAYNE, INC., TOGETHER WITH ITS SUBSIDIARY, CURRENTLY OWNING APPROXIMATELY 23.8% OF THE OUTSTANDING SHARES OF THE COMPANY, HAVE INDICATED THAT IT INTENDS TO PURCHASE 25% OF THE SHARES TO BE OFFERED (EXCLUDING THE UNDERWRITERS' OVER-ALLOTMENT OPTION). CONTACT: JIM HOLLAND (281) 492-2929 -----END PRIVACY-ENHANCED MESSAGE-----