10-K

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D. C. 20549

Form 10-K

x ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the fiscal year ended September 30, 2011

or

¨ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from                      to                     

COMMISSION FILE NUMBER 1-13167

ATWOOD OCEANICS, INC.

(Exact name of registrant as specified in its charter)

TEXAS	74-1611874
(State or other jurisdiction of incorporation or organization)	(I.R.S. Employer Identification No.)
15835 Park Ten Place Drive Houston, Texas	77084
(Address of principal executive offices)	(Zip Code)

Registrant’s telephone number, including area code:

281-749-7800

Securities registered pursuant to Section 12(b) of the Act:

Title of each class	Name of each exchange on which registered
Common Stock $1 par value Preferred Stock Purchase Rights	New York Stock Exchange New York Stock Exchange

Securities registered pursuant to Section 12(g) of the Act:

None

Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act.    Yes  x    No  ¨

Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act.    Yes  ¨    No  x

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 (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filings requirements for the past 90 days.    Yes  x    No  ¨

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Website, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).    Yes  x    No  ¨

Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K (§229.405 of this chapter) is not contained herein, and will not be contained, to the best of the registrant’s knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K ¨.

Indicate by check mark whether the registrant is a large accelerated filer, accelerated filer, a non-accelerated filer, or a smaller reporting company. See definitions of “large accelerated filer”, “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer	x	Accelerated filer	¨
Non-accelerated filer	¨  (Do not check if a Smaller Reporting Company)	Smaller Reporting Company	¨

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act).    Yes  ¨    No  x

The aggregate market value of the voting and non-voting common equity held by non-affiliates computed by reference to the price at which our Common Stock, $1 par value was last sold, or the average bid and asked price of such Common Stock, as of March 31, 2011 was $3.0 billion.

The number of shares outstanding of our Common Stock, $1 par value, as of November 21, 2011: 64,960,000.

DOCUMENTS INCORPORATED BY REFERENCE

(1) Annual Report to Shareholders for the fiscal year ended September 30, 2011 - Referenced in Parts I, II and IV of this report.

(2) Proxy Statement for Annual Meeting of Shareholders to be held February 9, 2012 - Referenced in Part III of this report.

FORWARD-LOOKING STATEMENTS

Statements included in this annual report on Form 10-K regarding future financial performance, capital sources and results of operations and other statements, other than statements of historical fact, that address activities, events or developments that we expect, believe or anticipate will or may occur in the future are forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, and Section 21E of the Securities Exchange Act of 1934. Such statements are those concerning strategic plans, expectations and objectives for future operations and performance. When used in this report, the words “believes,” “expects,” “anticipates,” “plans,” “intends,” “estimates,” “projects,” “could,” “should,” “may,” or similar expressions are intended to be among the statements that identify forward-looking statements.

Such statements are subject to numerous risks, uncertainties and assumptions that are beyond our ability to control, including, but not limited to:

• prices of oil and natural gas and industry expectations about future prices;

• market conditions, expansion and other development trends in the drilling industry and the global economy in general;

• the operational risks involved in drilling for oil and gas;

• the highly competitive and volatile nature of our business;

• the impact of governmental or industry regulation, both in the United States and internationally;

• the risks of and disruptions to international operations, including political instability and the impact of terrorist acts, acts of piracy, embargoes, war or other military operations;

• our ability to enter into, and the terms of, future drilling contracts, including contracts for our new build units;

• our ability to retain the business of one or more significant customers;

• our ability to obtain and retain qualified personnel to operate our vessels;

• timely access to spare parts, equipment and personnel to maintain and service our fleet;

• the termination or renegotiation of contracts by customers or payment or other delays by our customers;

• customer requirements for drilling capacity and customer drilling plans;

• the adequacy of sources of liquidity for us and for our customers;

• changes in tax laws, treaties and regulations;

• the risks involved in the construction, upgrade, and repair of our drilling units;

• unplanned downtime and repairs on our rigs; and

• such other risks discussed in Part I, Item 1A. “Risk Factors” and in our other reports filed with the Securities and Exchange Commission, or SEC.

Forward-looking statements are made based upon management’s current plans, expectations, estimates, assumptions and beliefs concerning future events impacting us and therefore involve a number of risks and uncertainties. We caution that forward-looking statements are not guarantees and that actual results could differ materially from those expressed or implied in the forward-looking statements. Undue reliance should not be placed on these forward-looking statements, which are applicable only on the date hereof. We undertake no obligation to revise or update these forward-looking statements to reflect events or circumstances that arise after the date hereof or to reflect the occurrence of unanticipated events.

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PART I

ITEM 1. BUSINESS

Atwood Oceanics, Inc. (which together with its subsidiaries is identified as the “Company,” “we,” “us” or “our,” except where stated or the context requires otherwise) is an international offshore drilling contractor engaged in the drilling and completion of exploratory and developmental oil and gas wells. We currently own a diversified fleet of 10 mobile offshore drilling units located in the U.S. Gulf of Mexico, South America, the Mediterranean Sea, West Africa, Southeast Asia and Australia, and are constructing an ultra-deepwater semisubmersible, two ultra-deepwater drillships, and three high-specification jack ups for delivery in 2012 through 2014. We were founded in 1968 and are headquartered in Houston, Texas with other offices in Australia, Egypt, South Korea, Malaysia, Singapore and the United Kingdom.

During our 43 year history, the majority of our drilling units have operated outside of United States waters, and we have conducted drilling operations in most of the major offshore exploration areas of the world. Approximately 97% or more of our contract revenues were derived from foreign operations in each of the prior three fiscal years. We support our operations from our U.S. headquarters, located in Houston, Texas, and offices currently located in Australia, Malaysia, Singapore and the United Kingdom. For information relating to the contract revenues, operating income and identifiable assets attributable to specific geographic areas of operations, see Note 15 of the Notes to Consolidated Financial Statements contained in our Annual Report to Shareholders for fiscal year 2011, filed herewith and incorporated by reference herein.

We report our offshore contract drilling operation as a single reportable segment: Offshore Contract Drilling Services. The mobile offshore drilling units and related equipment comprising our offshore rig fleet operate in a single, global market for contract drilling services and are often redeployed globally due to changing demands of our customers, which consist largely of major integrated oil and natural gas companies and independent oil and natural gas companies.

The following table presents our rig fleet as of November 21, 2011, all of which are wholly owned:

Rig Name	Rig Type	Construction Completed/Last Upgraded	Water Depth Rating (feet)
Atwood Osprey	Semisubmersible	construction completed 2011		8,200
Atwood Eagle	Semisubmersible	2002		5,000
Atwood Falcon	Semisubmersible	2006		5,000
Atwood Hunter	Semisubmersible	2001		5,000
Atwood Aurora	Jack-up	construction completed 2009		350
Atwood Beacon	Jack-up	construction completed 2003		400
Vicksburg	Jack-up	1998		300
Atwood Southern Cross(1)	Semisubmersible	2006		2,000
Seahawk(1)	Semisubmersible Tender Assist	2006		600
Richmond(1)	Submersible	2007		70

(1) Currently cold-stacked and not actively marketed.

In addition to the above drilling units, we are in the process of constructing six additional drilling units. The following table presents our current build projects as of November 21, 2011:

Rig Name	Rig Type	Shipyard	Expected Delivery Date	Expected Cost (in millions)		Water Depth Rating (feet)
Atwood Condor	Semisubmersible	Jurong Shipyard Pte. Ltd.	June 30, 2012	$	750		10,000
Atwood Mako	Jack-up	PPL Shipyard PTE LTD	September 30, 2012	$	190		400
Atwood Manta	Jack-up	PPL Shipyard PTE LTD	December 31, 2012	$	190		400
Atwood Orca	Jack-up	PPL Shipyard PTE LTD	June 30, 2013	$	190		400
Atwood Advantage	Drillship	Daewoo Shipbuilding and Marine Engineering Co., Ltd. (“DSME”)	September 30, 2013	$	600		12,000
Atwood Achiever	Drillship	DSME	June 30, 2014	$	600		12,000

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As of September 30, 2011, we had approximately $1.2 billion of estimated capital commitments primarily related to the construction of our five new drilling units under construction at that time. In October 2011, we entered into a turnkey construction contract with DSME to construct a second ultra-deepwater drillship to be named the Atwood Achiever, at the DSME yard in South Korea. The Atwood Achiever is scheduled for delivery by June 30, 2014 and is expected to cost approximately $600 million, bringing our estimated capital commitments for new builds to $1.8 billion. The Atwood Achiever will be identical to the previously ordered Atwood Advantage and will be a DP-3 dynamically-positioned, dual derrick ultra deepwater drillship rated to operate in water depths up to 12,000 feet and drill to a depth of 40,000 feet.

Maintaining high equipment utilization and revenue efficiency through the industry cycles is a significant factor in generating cash flow to satisfy current and future obligations and has been one of our primary performance excellence initiatives. We had a 95% utilization rate in fiscal year 2011, for our in service rigs, while our utilization rate has averaged approximately 94% during the past 10 fiscal years. As of October 31, 2011, our seven actively marketed rigs have approximately 82% and 43% of our available rig days contracted for fiscal years 2012 and 2013, respectively. The Atwood Southern Cross, Richmond and Seahawk are currently cold-stacked and not actively marketed. Information regarding the contract status of our drilling units may be found in the table with the caption heading “Offshore Drilling Operations” in our Annual Report to Shareholders for fiscal year 2011, which is filed herewith and incorporated by reference herein. Our contract backlog at September 30, 2011 was approximately $1.5 billion, representing an approximate 25% increase compared to our contract backlog of $1.2 billion at September 30, 2010. See Part I, Item 1A. “Risk Factors—Our current backlog of contract drilling revenue may not be ultimately realized” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations—Market Outlook—Contract Backlog” in our Annual Report to Shareholders for fiscal year 2011, which is filed herewith and incorporated by reference herein.

OFFSHORE DRILLING EQUIPMENT

Each type of drilling rig is uniquely designed for different purposes and applications, for operations in different water depths, bottom conditions, environments and geographical areas, and for different drilling and operating requirements. We classify rigs with the ability to operate in greater than 5,000 feet of water as deepwater rigs and rigs with the ability to operate in a greater than 7,500 feet of water as ultra-deepwater rigs. The following descriptions of the various types of drilling rigs we own or are constructing illustrate the diversified range of applications of our rig fleet.

Ultra-Deepwater Drillships. Drillships are generally self-propelled vessels, shaped like conventional ships, and are the most mobile of the major rig types. Our high-specification drillships currently under construction are dynamically positioned, which allows them to maintain position without anchors through the use of their onboard propulsion and station-keeping systems. Drillships typically have greater load capacity than semisubmersible rigs, which enables them to carry more supplies on board, often making them better suited for drilling in remote locations where resupply is more difficult. Drillships are often referred to as floating rigs or floaters.

Semisubmersible Rigs. Each semisubmersible drilling unit has two hulls, the lower of which is capable of being flooded. Drilling equipment is mounted on the main hull. After the drilling unit is towed to location, the lower hull is flooded, lowering the entire drilling unit to its operating draft, and the drilling unit is either anchored in place (conventionally moored drilling unit) or maintains position without anchors through the use of onboard propulsion and station-keeping systems (dynamically positioned drilling unit). On completion of operations, the lower hull is deballasted, raising the entire drilling unit to its towing draft. This type of drilling unit is designed to operate in greater water depths than bottom supported drilling rigs and in more severe sea conditions than other types of drilling units. Semisubmersible rigs are also often referred to as floating rigs or floaters.

Jack-up Drilling Rigs. A jack-up drilling rig contains all of the drilling equipment on a single hull designed to be towed to a well site. Once on location, legs are lowered to the sea floor and the unit is raised out of the water by jacking the hull up the legs.

Semisubmersible Tender Assist Rigs. Semisubmersible tender assist rigs operate like semisubmersible rigs except that their drilling equipment is temporarily installed on permanently constructed offshore support platforms. Semisubmersible tender assist rigs provide crew accommodations, storage facilities and other support for drilling operations.

Submersible Drilling Rigs. The submersible drilling rig we own has two hulls, the lower being a mat, which is capable of being flooded. Drilling equipment and crew accommodations are located on the main hull. After the drilling unit is towed to its location, the lower hull is flooded, lowering the entire unit to its operating draft at which it rests on the sea floor. On completion of operations, the lower hull is deballasted, raising the entire unit to its towing draft. This type of drilling unit is designed to operate in shallow water depths ranging from 9 to 70 feet and can operate in moderately severe sea conditions.

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INDUSTRY TRENDS

Our industry is subject to intense price competition and volatility. Periods of high demand and higher day rates are often followed by periods of low demand and lower day rates. Offshore drilling contractors can build new drilling rigs, mobilize rigs from one region of the world to another, “idle” or scrap rigs (taking them out of service) or reactivate idled rigs in order to adjust the supply of existing equipment in various markets to meet demand. The market is typically driven by global hydrocarbon demand growth and changes in actual or anticipated oil and gas prices. Generally, sustained high energy prices translate into increased exploration and production spending by oil and gas companies, which in turn results in increased drilling activity and demand for equipment like ours.

Our customers are increasingly demanding newer, higher specification drilling rigs to perform contract drilling services. This trend is commonly referred to as the bifurcation of the drilling fleet. Bifurcation is occurring in both the jack-up and floater rig classes and is evidenced by the higher specification drilling rigs operating at generally higher overall utilization levels and day rates than the lower specification or standard drilling rigs. The lower specification segment is also experiencing a significant number of rigs being either warm or cold-stacked.

Floating drilling rigs are outfitted with highly sophisticated subsea well control equipment. The number of original equipment manufacturer (“OEM”) vendors manufacturing and servicing this equipment is limited and their ability to service the drilling industry on a timely basis is becoming challenging. These elongated delivery times are being driven by the recent significant increase in the number of rigs under construction, and related demand for new blowout preventers (“BOPs”) and the post-Macondo requirement by the Notice to Lessee’s 05 issued by the Bureau of Ocean Energy Management (“BOEM”) requiring that only OEM vendors service and/or recertify BOPs and other well control equipment.

The offshore drilling markets where we currently operate, including Southeast Asia, West Africa, Australia and South America, are rich in hydrocarbon deposits and thus offer the potential for high rig utilization over the long-term. In addition, deepwater drilling activity in the U.S. Gulf of Mexico is beginning to return to pre-Macondo levels, as evidenced by the number of drilling permits approved in recent months. Current market activity reflects a volatile but modestly improving global macro environment with a degree of risk from European sovereign debt issues that could result in certain European and other countries experiencing slower growth or recession in the future.

Although Brent crude oil prices remain volatile as evidenced by a trading range between $82 and $124 per barrel for the past 12 months, prices have averaged $105 per barrel during that period. At these oil price levels, we expect improving utilization rates across all rig sub-segments into 2012 with increased emphasis on the ultra-deepwater floater market.

DRILLING CONTRACTS

We obtain the contracts under which we operate our units either through individual negotiation with customers or by submitting proposals in competition with other contractors. Our contracts vary in their terms and rates depending on the nature of the operation to be performed, the duration of the work, the amount and type of equipment and services provided, the geographic areas involved, market conditions and other variables. The initial term of contracts for our units has ranged from the length of time necessary to drill one well to several years. It is not unusual for contracts to contain renewal provisions, which in time of weak market conditions are usually at the option of the customer, and in strong market conditions are usually mutually agreeable.

Generally, contracts for drilling services specify a basic rate of compensation computed on a day rate basis. Contracts generally provide for a reduced day rate payable when operations are interrupted by equipment failure and subsequent repairs, field moves, adverse weather conditions or other factors beyond our control. Some contracts also provide for revision of the specified day rates in the event of material changes in certain items of cost. Any period during which a rig is not earning a full operating day rate because of the above conditions or because the rig is idle and not on contract will have an adverse effect on operating profits. An over-supply of drilling rigs in any market area can adversely affect our ability to employ our drilling units in these market areas.

For long moves of drilling equipment, we may obtain from our customers either a lump sum or a day rate as mobilization compensation for expenses incurred during the period in transit. In a weaker market environment, we may not fully recover our relocation costs due to the relative supply and demand of available rigs and current day rate pricing trends. However, in a stronger market environment, we are generally able to obtain full reimbursement of relocation costs plus a day rate as mobilization compensation. We can give no assurance that we will receive full or partial recovery of any future relocation costs beyond that for which we have already contracted.

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Certain of our contracts may be cancelled upon specified notice at the option of the customer and such cancellations may not require our customer to fully compensate us for the loss of the contract. Contracts also customarily provide for either automatic termination or termination at the option of the customer in the event of total loss of the drilling rig, if a rig is not delivered to the customer, if a rig does not pass acceptance testing within the period specified in the contract, if drilling operations are suspended for extended periods of time by reason of excessive rig downtime for repairs, or other specified conditions, including force majeure or failure to meet minimum performance criteria. Early termination of a contract may result in a rig being idle for an extended period of time. Not all of our contracts require the customer to fully compensate us for the loss of the contract.

Operation of our drilling equipment is subject to the offshore drilling requirements of petroleum exploration companies and agencies of local or foreign governments. These requirements are, in turn, subject to changes in government policies, world demand and prices for petroleum products, proved reserves in relation to such demand and the extent to which such demand can be met from onshore sources.

The majority of our contracts are denominated in U.S. dollars, but occasionally a portion of a contract is payable in local currency. To the extent there is a local currency component in a contract, we attempt to match revenue in the local currency to operating costs paid in the local currency such as local labor, shore base expenses, and local taxes, if any.

INSURANCE AND RISK MANAGEMENT

Our operations are subject to the usual hazards associated with the drilling of oil and gas wells, such as blowouts, explosions and fires. In addition, our equipment is subject to various risks particular to our industry which we seek to mitigate by maintaining insurance. These risks include, among others, leg damage to jack-ups during positioning, capsizing, grounding, collision and damage from severe weather conditions. Any of these risks could result in damage or destruction of drilling rigs and oil and gas wells, personal injury and property damage, suspension of operations or environmental damage through oil spillage or extensive, uncontrolled fires. Therefore, in addition to general business insurance policies, we maintain the following insurance relating to our rigs and rig operations: hull and machinery, protection and indemnity, mortgagee’s interest, cargo, war risks, casualty and liability including excess liability, and in certain instances, loss of hire, among others. Our casualty and liability insurance policies are subject to self-insured deductibles. With respect to hull and machinery we generally maintain a deductible of $5 million per occurrence. For general and marine third-party liabilities we generally maintain a $1 million per occurrence deductible on personal injury liability for crew claims. Our rigs are insured at values ranging from book value for the cold stacked rigs to estimated market value for the high specification jack-ups and floaters.

As a result of significant losses incurred by the insurance industry due to offshore drilling rig accidents, such as the April 2010 Macondo incident in the U.S. Gulf of Mexico, damages from hurricanes such as Hurricane Ike in 2008, and other events, we have experienced increases in premiums for certain types of insurance coverage. Although we believe that we are adequately insured against normal and foreseeable risks in our operations in accordance with industry standards, such insurance may not be adequate to protect us against liability from all consequences of well disasters, marine perils, extensive fire damage, damage to the environment or disruption due to terrorism. To date, we have not experienced difficulty in obtaining insurance coverage, although we can provide no assurance as to the future availability of such insurance or the cost thereof. The occurrence of a significant event against which we are not adequately insured could have a material adverse effect on our financial position. See “Operating hazards increase our risk of liability; we may not be able to fully insure against all of these risks.” in Part I, Item 1A. “Risk Factors”.

CUSTOMERS

During fiscal year 2011, we performed operations for 10 customers. Because of the relatively limited number of customers for which we can operate at any given time, revenues from three different customers amounted to 10% or more of our revenues in fiscal year 2011 as indicated below:

Customer	Percentage of Revenues
Chevron Australia		31	%
Sarawak Shell Bhd.		22	%
Kosmos Energy Ghana Inc.		21	%

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Our business operations are subject to the risks associated with a business having a limited number of customers for our products or services, and the loss of, or a decrease in the drilling programs of, these customers may adversely affect our revenues and, therefore, our results of operations and cash flows.

COMPETITION

The offshore drilling industry is very competitive, with no single offshore drilling contractor being dominant. We compete with a number of offshore drilling contractors for work, which varies by job requirements and location. Many of our competitors are substantially larger than we are and possess appreciably greater financial and other resources and assets than we do. Our competitors include, among others, the six members of our self-determined peer group including Diamond Offshore Drilling, Inc., Transocean Ltd., Rowan Companies, Inc., Ensco plc, Noble Corporation, Seadrill Limited.

Technical capability, location, rig availability and price competition are generally the most important factors in the offshore drilling industry; however, when there is high worldwide utilization of equipment, rig availability and suitability become more important factors in securing contracts than price. Other competitive factors include work force experience, efficiency, condition of equipment, safety performance, reputation and customer relations. We believe that we compete favorably with respect to these factors.

INTERNATIONAL OPERATIONS

During our history, we have operated in most of the major offshore exploration areas of the world. Approximately 97% or more of our contract revenues were derived from foreign operations in each of the prior three fiscal years. Because of our experience in a number of geographic areas and the mobility of our equipment, we believe we are not dependent upon any one area of operation.

For information about risk associated with our foreign operations, see Part I, Item 1A, “Risk Factors—Our international operations may involve risks not generally associated with domestic operations.” and “A change in tax laws in any country in which we operate could result in higher tax expense.”

EMPLOYEES

As of November 8, 2011, we have approximately 1,300 personnel engaged, including through labor contractors or agencies. In connection with our foreign drilling operations, we are often required by the host country to hire substantial portions of our work force in that country and, in some cases, these employees are represented by foreign unions. To date, we have experienced little difficulty in complying with such requirements, and our drilling operations have not been significantly interrupted by strikes or work stoppages. Our success also depends to a significant extent upon the efforts and abilities of our executive officers and other key management personnel. There is no assurance that these individuals will continue in such capacity for any particular period of time.

ENVIRONMENTAL REGULATION

Our operations are subject to a variety of U.S. and foreign environmental regulation. We monitor environmental regulation in each country in which we operate and, while we have experienced an increase in general environmental regulation, we do not believe compliance with such regulations will have a material adverse effect upon our business or results of operations. Past environmental issues, such as the Macondo incident, have led to higher drilling costs, a more difficult and lengthy well permitting process and, in general, have adversely affected decisions of oil and gas companies to drill in these areas. In the United States, regulations applicable to our operations include regulations controlling the discharge of materials into the environment, requiring removal and cleanup of materials that may harm the environment, or otherwise relating to the protection of the environment. Laws and regulations protecting the environment have become more stringent, and may in some cases impose strict liability, rendering a person liable for environmental damage without regard to negligence or fault on the part of such person. Some of these laws and regulations may expose us to liability for the conduct of or conditions caused by others or for acts which were in compliance with all applicable laws at the time they were performed. The application of these requirements or the adoption of new requirements could have a material adverse effect on our financial position, results of operations or cash flows. We believe all of our rigs satisfy current environmental requirements and certifications, if any, required to operate in the jurisdictions where they currently operate, but can give no assurance that in the future they will satisfy new environmental requirements or certifications, if any, or that the costs to satisfy such requirements or certifications, if any, would not materially affect our financial condition and operating results. As a result of the Macondo incident, there is pending legislation which, if enacted, would likely affect liability limits under existing U.S. environmental laws and regulations. If and when such proposed legislation is enacted, we will be able to better assess its impact on us. The description below of U.S. environmental laws and regulations is based upon those currently in effect.

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The U.S. Federal Water Pollution Control Act of 1972, commonly referred to as the Clean Water Act, prohibits the discharge of specified substances into the navigable waters of the United States without a permit. The regulations implementing the Clean Water Act require permits to be obtained by an operator before specified exploration activities occur. Offshore facilities must also prepare plans addressing spill prevention control and countermeasures. Violations of monitoring, reporting and permitting requirements can result in the imposition of administrative, civil and criminal penalties.

The U.S. Oil Pollution Act of 1990, or OPA, and related regulations impose a variety of requirements on “responsible parties” related to the prevention of oil spills and liability for damages resulting from such spills. Few defenses exist to the strict liability imposed by OPA, and the liability could be substantial. Failure to comply with ongoing requirements or inadequate cooperation in the event of a spill could subject a responsible party to civil or criminal enforcement action. OPA assigns joint and several, strict liability, without regard to fault, to each liable party for all containment and oil removal costs and a variety of public and private damages including, but not limited to, the costs of responding to a release of oil, natural resource damages, and economic damages suffered by persons adversely affect by an oil spill.

The U.S. Comprehensive Environmental Response, Compensation, and Liability Act, or CERCLA, also known as the “Superfund” law, imposes liability without regard to fault or the legality of the original conduct on some classes of persons that are considered to have contributed to the release of a “hazardous substance” into the environment. Such persons include the owner or operator of a facility where a release occurred and companies that disposed of or arranged for the transport or disposal of the hazardous substances found at a particular site. Persons who are or were responsible for releases of hazardous substances under CERCLA may be subject to joint and several liabilities for the cost of cleaning up the hazardous substances that have been released into the environment, for damages to natural resources, and for the costs of certain health studies. CERCLA also authorizes the U.S. Environmental Protection Agency (the “EPA”) and, in some instances, third parties to act in response to threats to the public health or the environment and to seek to recover from the responsible classes of persons the costs they incur. It is also not uncommon for third parties to file claims for personal injury and property damage allegedly caused by the hazardous substances released into the environment. We generate materials in the course of our operations that may be regulated as hazardous substances.

OTHER GOVERNMENTAL REGULATION

Our operations are subject to various international conventions, laws and regulations in the countries in which we operate, including laws and regulations relating to the importation of and operation of drilling units, currency conversions and repatriation, oil and gas exploration and development, taxation of offshore earnings and earnings of expatriate personnel, environmental protection, the use of local employees and suppliers by foreign contractors and duties on the importation and exportation of drilling units and other equipment. Governments in some foreign countries have become increasingly active in regulating and controlling the ownership of concessions and companies holding concessions, the exploration for oil and gas and other aspects of the oil and gas industries in their countries. In some areas of the world, this governmental activity has adversely affected the amount of exploration and development work done by major oil and gas companies and may continue to do so. Operations in less developed countries can be subject to legal systems that are not as mature or predictable as those in more developed countries, which can lead to greater uncertainty in legal matters and proceedings.

On October 17, 2011, we announced that one of our subsidiaries was awarded a drilling services contract by Hess Corporation for work in the U.S. Gulf of Mexico for the Atwood Condor. Our U.S. operations will be subject to various U.S. laws and regulations, including the new drilling safety rules and workplace safety rules set forth by the BOEM and the Bureau of Safety and Environmental Enforcement (“BSEE”), which are designed to improve drilling safety by strengthening requirements for safety equipment, well control systems, and blowout prevention practices on offshore oil and gas operations, and improve workplace safety by reducing the risk of human error. Implementation of new BOEM or BSEE guidelines or regulations may subject us to increased costs or limit the operational capabilities of our rigs and could materially and adversely affect our operations and financial condition. Please see Part I, Item 1A. “Risk Factors — Government regulation and environmental risks could reduce our business opportunities and increase our costs.”

We believe we are in compliance in all material respects with the health, safety and other regulations affecting the operation of our rigs and the drilling of oil and gas wells in the jurisdictions in which we operate. Historically, we have made significant capital expenditures and incurred additional expenses to ensure that our equipment complies with applicable local and international health and safety regulations. Although such expenditures may be required to comply with these governmental laws and regulations, such compliance has not, to date, materially adversely affected our earnings, cash flows or competitive position.

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AVAILABLE INFORMATION

We file annual, quarterly and current reports, proxy statements and other information with the SEC. Our SEC filings are available to the public over the internet at the SEC’s web site at http://www.sec.gov. Our website address is www.atwd.com. We make available free of charge on or through our website our annual report on Form 10-K, quarterly reports on Form 10-Q, and current reports on Form 8-K, and amendments to those reports filed or furnished pursuant to Section 13(a) or 15(d) of the Exchange Act as soon as reasonably practicable after we electronically file such material with, or furnish it to, the SEC. We have adopted a Code of Business Conduct & Ethics and a Code of Ethics for the Chief Executive Officer and Senior Financial Officers which are available on our website. We intend to satisfy the disclosure requirement regarding any changes in or waivers from our codes of ethics by posting such information on our website or by filing a Form 8-K for such event. Unless stated otherwise, information on our website is not incorporated by reference into this report or made a part hereof for any purpose. You may also read and copy any document we file at the SEC’s Public Reference Room at 100 F Street NE, Washington, DC 20549. Please call the SEC at 1-800-SEC-0330 for further information on the Public Reference Room and copy charges.

ITEM 1A. RISK FACTORS

You should carefully consider the following risk factors in addition to the other information included in this Annual Report on Form 10-K. These risks and uncertainties may affect our business, operating results and financial condition, as well as an investment in our common stock.

Our business depends on the level of activity in the oil and natural gas industry, which is significantly impacted by the volatility in oil and natural gas prices.

Our business depends on the conditions of the offshore oil and natural gas industry. Demand for our services depends on oil and natural gas industry exploration and production activity and expenditure levels, which are directly affected by trends in oil and natural gas prices. Oil and natural gas prices, and market expectations regarding potential changes to these prices, significantly affect oil and natural gas industry activity. Higher oil and natural gas prices do not necessarily translate into increased activity because demand for our services is typically driven by our customers’ expectations of future commodity prices. Commodity prices have historically been volatile. Oil and natural gas prices are impacted by many factors beyond our control, including:

• the demand for oil and natural gas;

• the cost of exploring for, developing, producing and delivering oil and natural gas;

• the worldwide economy;

• expectations about future prices;

• domestic and international tax policies;

• political and military conflicts in oil producing regions or other geographical areas or acts of terrorism in the U.S. or elsewhere;

• technological advances;

• the development and exploitation of alternative fuels;

• local and international political, economic and weather conditions;

• the ability of The Organization of Petroleum Exporting Countries (“OPEC”) to set and maintain production levels and pricing;

• the level of production by OPEC and non-OPEC countries; and

• environmental and other laws and governmental regulations regarding exploration and development of oil and natural gas reserves.

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During recent years, the level of offshore exploration, development and production activity and the price for oil and natural gas has been volatile. Such volatility is likely to continue in the future. A decline in the worldwide demand for oil and natural gas or prolonged low oil or natural gas prices in the future would likely result in reduced exploration and development of offshore areas and a decline in the demand for our services. Even during periods of high prices for oil and natural gas, companies exploring for oil and gas may cancel or curtail programs, or reduce their levels of capital expenditures for exploration and production for a variety of reasons. These factors could cause our revenues and margins to decline, reduce day rates and utilization of our rigs and limit our future growth prospects and, therefore, could have a material adverse effect on our financial condition, results of operations and cash flows.

Our industry is subject to intense price competition and volatility.

The contract drilling business is highly competitive with numerous industry participants. Drilling contracts are traditionally awarded on a competitive bid basis. Price competition is often the primary factor in determining which qualified contractor is awarded a job, although rig availability, the quality and technical capability of service and equipment and safety record are also factors. We compete with a number of offshore drilling contractors, many of which are substantially larger than we are and which possess appreciably greater financial and other resources and assets than we do.

The industry in which we operate historically has been volatile, marked by periods of low demand, excess rig supply and low day rates, followed by periods of high demand, low rig availability and increasing day rates. Periods of excess rig supply intensify the competition in the industry and often result in rigs being idled. We may be required to idle additional rigs or to enter into lower-rate contracts in response to market conditions in the future. Presently, there are numerous recently constructed ultra-deepwater vessels and high-specification jack-ups that have entered the market and more are under contract for construction. Many of these units do not have drilling contracts in place. The entry into service of these new units has increased and will continue to increase supply and could curtail a strengthening, or trigger a reduction, in day rates and utilization as rigs are absorbed into the active fleet. Any further increase in construction of new units may increase the negative impact on day rates and utilization. In addition, rigs may be relocated to markets in which we operate, which could result in or exacerbate excess rig supply which may lower day rates in those markets.

Lower utilization and day rates in one or more of the regions in which we operate would adversely affect our revenues and profitability. Prolonged periods of low utilization and day rates could also result in the recognition of impairment charges on certain of our drilling rigs if future cash flow estimates, based upon information available to management at the time, indicate that the carrying value of these rigs may not be recoverable.

Our business relies heavily on a limited number of drillings units and a limited number of customers and the loss of a significant customer could have an adverse impact on our business.

Our customer base includes major and independent oil and gas companies as well as government-owned oil companies. The contract drilling business is subject to the usual risks associated with having a limited number of customers for our services. Such risks are heightened by our limited number of drilling units. Consolidation among oil and natural gas exploration and production companies has reduced the number of available customers. In fiscal year 2011, three customers each accounted for over 10% of our operating revenues: Chevron Australia, 31%; Sarawak Shell Bhd., 22%; and Kosmos Energy Ghana Inc., 21%. Our business could be materially and adversely affected if any of our major customers terminate their contracts with us, fail to renew our existing contracts, refuse to award new contracts to us or experience difficulties in obtaining financing to fund their drilling programs.

High capital expenditures will be necessary to keep pace with the bifurcation of the drilling fleet.

The market for our services is characterized by continual and rapid technological developments that have resulted in, and will likely continue to result in, substantial improvements in the functionality and performance of rigs and equipment. Our customers are increasingly demanding the services of newer, higher specification drilling rigs. This results in a bifurcation of the drilling fleet for both the jack-up and floater rig classes and is evidenced by the higher specification drilling rigs generally operating at higher overall utilization levels and day rates than the lower specification or standard drilling rigs. A significant number of lower specification rigs are being either warm or cold-stacked. As a result of this bifurcation, high capital expenditures will be required to maintain and improve existing rigs and equipment and purchase and construct newer, higher specification drilling rigs to meet the increasingly sophisticated needs of our customers.

If we are not successful in acquiring new rigs and equipment or upgrading our existing rigs and equipment on a timely and cost-effective manner, we could lose business and profits. In addition, current competitors or new market entrants may develop new technologies, services or standards that could render some of our services or equipment obsolete, which could have a material adverse effect on our operations.

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Rig upgrade, repair and construction projects are subject to risks, including failure to secure drilling contracts, delays and cost overruns.

As of November 21, 2011, we had new build projects consisting of one ultra-deepwater drillship, one ultra-deepwater semisubmersible rig and three high-specification jack-up rigs under construction and have entered into a contract for the construction of an additional ultra-deepwater drillship. Four of our five new builds currently under construction and our recently announced new build drillship do not have long-term drilling contracts in place. We may also commence the construction of additional rigs for our fleet from time to time without first obtaining drilling contracts covering any such rig. Our failure to secure drilling contracts for rigs under construction, including our remaining uncontracted new build construction projects, prior to deployment could adversely affect our results of operations and financial condition.

Since 2009, we have invested or committed to invest over $3.3 billion in the expansion of our fleet, including ultra-deepwater and jack-up rigs. Depending on available opportunities, we may construct additional rigs for our fleet in the future. In addition, we make significant upgrade, refurbishment and repair expenditures on our fleet from time to time. Some of these expenditures are unplanned. These projects are subject to risks of delay or cost overruns inherent in any large construction project resulting from numerous factors, including the following:

• shortages of equipment, materials or skilled labor;

• unscheduled delays in the delivery of ordered materials and equipment;

• unanticipated increases in the cost of equipment, labor and raw materials, particularly steel;

• weather interferences;

• difficulties in obtaining necessary permits or in meeting permit conditions;

• design and engineering problems;

• client acceptance delays;

• political, social and economic instability, war and civil disturbances;

• delays in customs clearance of critical parts or equipment;

• financial or other difficulties or failures at shipyards and suppliers;

• disputes with shipyards and suppliers; and

• work stoppages and other labor disputes.

Delays in the delivery of rigs being constructed or undergoing upgrade, refurbishment or repair may result in delay in contract commencement, resulting in a loss of revenue to us, and may cause our customers to seek to terminate or shorten the term of the contract under applicable late delivery clauses, if any. In the event of termination of one of these contracts, we may not be able to secure a replacement contract on as favorable terms, if at all. The estimated capital expenditures for rig upgrades, refurbishments and construction projects could materially exceed our planned capital expenditures. Moreover, our rigs undergoing upgrade, refurbishment and repair may not earn a day rate during the period they are out of service.

Our business may experience reduced profitability if our customers terminate or seek to renegotiate our drilling contracts.

Currently, our contracts with customers are day rate contracts, in which we charge a fixed amount per day regardless of the number of days needed to drill the well. During depressed market conditions, a customer may no longer need a rig that is currently under contract or may be able to obtain a comparable rig at a lower day rate. Customers may seek to renegotiate the terms of their existing drilling contracts or avoid their obligations under those contracts. In addition, certain of our contracts may be cancelled upon specified notice at the option of the customer upon payment of an early termination payment. Contracts also customarily provide for either automatic termination or termination at the option of the customer in

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the event of total loss of the drilling rig, if a rig is not delivered to the customer, if a rig does not pass acceptance testing within the period specified in the contract, if drilling operations are suspended for extended periods of time by reason of excessive rig downtime for repairs, or other specified conditions, including force majeure or failure to meet minimum performance criteria. Early termination of a contract may result in a rig being idle for an extended period of time. Not all of our contracts require the customer to fully compensate us for the loss of the contract. Our revenues may be adversely affected by customers’ early termination of contracts, especially if we are unable to re-contract the affected rig within a short period of time. The termination or renegotiation of a number of our drilling contracts could adversely affect our financial position, results of operations and cash flows.

Our business will be adversely affected if we are unable to secure contracts on economically favorable terms.

The drilling markets in which we compete frequently experience significant fluctuations in the demand for drilling services, as measured by the level of exploration and development expenditures, and the supply of capable drilling equipment. We have a number of contracts that will expire in 2012. Our ability to renew these contracts or obtain new contracts and the terms of any such contracts will depend on market conditions. We may be unable to renew our expiring contracts or obtain new contracts for the rigs under contracts that have expired or been terminated, and the day rates under any new contracts may be substantially below the existing day rates, which could materially reduce our revenues and profitability. We can, as we have done in the past, relocate drilling rigs from one geographic area to another, but only when such moves are economically justified, or we can idle rigs temporarily to save operating expenses and reduce rig supply. If demand for our rigs declines, rig utilization and day rates are generally adversely affected, which in turn, would adversely affect our revenues.

Our current backlog of contract drilling revenue may not be ultimately realized.

As of September 30, 2011, our contract drilling backlog was approximately $1.5 billion for future revenues under firm commitments. We may not be able to perform under these contracts due to events beyond our control, and our customers may seek to cancel or renegotiate our contracts for various reasons, including those described above. In addition, some of our customers could experience liquidity issues or could otherwise be unable or unwilling to perform under the contract, which could ultimately lead a customer to go into bankruptcy or to otherwise encourage a customer to seek to repudiate, cancel or renegotiate a contract. Our inability or the inability of our customers to perform under our or their contractual obligations may have a material adverse effect on our financial position, results of operations and cash flows.

Our customers may be unable or unwilling to indemnify us.

Consistent with standard industry practice, we typically obtain contractual indemnification from our customers whereby they agree to protect and indemnify us for liabilities resulting from various hazards associated with the drilling industry. We can provide no assurance, however, that our customers will be willing or financially able to meet these indemnification obligations. Also, we may choose not to enforce these indemnities because of business reasons.

Operating hazards increase our risk of liability; we may not be able to fully insure against all of these risks.

Our operations are subject to various operating hazards and risks, including:

• well blowouts, loss of well control and reservoir damage;

• fires and explosions;

• catastrophic marine disaster;

• adverse sea and weather conditions;

• mechanical failure;

• navigation errors;

• collision;

• oil and hazardous substance spills, containment and clean up;

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• lost or stuck drill strings;

• equipment defects;

• labor shortages and strikes;

• damage to and loss of drilling rigs and production facilities; and

• war, sabotage, terrorism and piracy.

These risks present a threat to the safety of personnel and to our rigs, cargo, equipment under tow and other property, as well as the environment. Our operations and those of others could be suspended as a result of these hazards, whether the fault is ours or that of a third party. In certain circumstances, governmental authorities may suspend drilling operations as a result of these hazards, and our customers may cancel or terminate their contracts. Third parties may have significant claims against us for damages due to personal injury, death, property damage, pollution and loss of business if such event were to occur in our operations.

Our offshore drilling operations are also subject to marine hazards, either at offshore sites or while drilling equipment is under tow, such as vessel capsizings, sinking, collisions or groundings. In addition, raising and lowering jack-up drilling rigs, flooding semisubmersible ballast tanks and drilling into high-pressure formations are complex, hazardous activities, and we can encounter problems.

We have had accidents in the past due to some of the hazards described above. Because of the ongoing hazards associated with our operations:

• we may experience accidents;

• our insurance coverage may prove inadequate to cover our losses;

• our insurance deductibles may increase; or

• our insurance premiums may increase to the point where maintaining our current level of coverage is prohibitively expensive or we may be unable to obtain insurance at all.

We maintain insurance coverage against casualty and liability risks and have renewed our primary insurance program through June 30, 2012. Certain risks, however, such as pollution, reservoir damage and environmental risks generally are not fully insurable. Although we believe our insurance is adequate, our policies and contractual indemnity rights may not adequately cover all losses or may have exclusions of coverage for certain losses. We do not have insurance coverage or rights to indemnity for all risks. In addition, we may be unable to renew or maintain our existing insurance coverage at commercially reasonable rates or at all. If a significant accident or other event occurs and is not fully covered by insurance or contractual indemnity, it could adversely affect our financial position, results of operations or cash flows. There is no assurance that our insurance coverage will be available or affordable and, if available, whether it will be adequate to cover future claims that may arise. Additionally, there is no assurance that those parties with contractual obligations to indemnify us will necessarily be financially able or willing to indemnify us against all these risks.

Our drilling contracts provide for varying levels of indemnification from our customers and in most cases may require us to indemnify our customers. Under offshore drilling contracts, liability with respect to personnel and property is customarily assigned on a “knock-for-knock” basis, which means that we and our customers assume liability for our respective personnel and property. However, in certain cases we may have liability for damage to our customer’s property and other third-party property on the rig. Our customers typically assume responsibility for and indemnify us from any loss or liability resulting from pollution or contamination, including clean-up and removal and third-party damages, arising from operations under the contract and originating below the surface of the water, including as a result of blow-outs or cratering of the well. In some drilling contracts, however, we may have liability for third-party damages resulting from such pollution or contamination caused by our gross negligence, or, in some cases, ordinary negligence, subject to negotiated caps. We generally indemnify the customer for legal and financial consequences of spills of industrial waste and other liquids originating from our rigs or equipment above the surface of the water.

The above description of our insurance program and the indemnification provisions of our drilling contracts is only a summary and is general in nature. Our insurance program and the terms of our drilling contracts may change in the future. In addition, the indemnification provisions of our drilling contracts may be subject to differing interpretations, and enforcement of those provisions may be limited by public policy and other considerations.

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Our long-term contracts are subject to the risk of cost increases, which could adversely impact our profitability.

In periods of rising demand for offshore rigs, a drilling contractor generally would prefer to enter into well-to-well or other short-term contracts less than one year in duration that would allow the contractor to profit from increasing day rates, while customers with reasonably definite drilling programs would typically prefer long-term contracts in order to maintain day rates at a consistent level. Conversely, in periods of decreasing demand for offshore rigs, a drilling contractor generally would prefer long-term contracts to preserve day rates and utilization, while customers generally would prefer well-to-well or other short-term contracts that would allow the customer to benefit from the decreasing day rates. For the fiscal year ended September 30, 2011, a majority of our revenue was derived from long-term day rate contracts greater than one year in duration, and substantially all of our backlog as of September 30, 2011 was attributable to long-term day rate contracts. As a result, our inability to fully benefit from increasing day rates in an improving market may limit our profitability.

In general, our costs increase as the business environment for drilling services improves and demand for oilfield equipment and skilled labor increases. While many of our contracts include cost escalation provisions that allow changes to our day rate based on stipulated cost increases or decreases, the timing and amount earned from these day rate adjustments may differ from our actual increase in costs. Additionally, if our rigs incur idle time between contracts, we typically do not remove personnel from those rigs because we utilize the crew to prepare the rig for its next contract. During times of reduced activity, reductions in costs may not be immediate as portions of the crew may be required to prepare our rigs for stacking, after which time the crew members are assigned to active rigs or dismissed. Moreover, as our rigs are mobilized from one geographic location to another, the labor and other operating and maintenance costs can vary significantly. In general, labor costs increase primarily due to higher salary levels and inflation. Equipment maintenance expenses fluctuate depending upon the type of activity the unit is performing and the age and condition of the equipment. Contract preparation expenses vary based on the scope and length of contract preparation required and the duration of the firm contractual period over which such expenditures are amortized.

A change in tax laws in any country in which we operate could result in higher tax expense.

We conduct our worldwide operations through various subsidiaries. Tax laws and regulations are highly complex and subject to interpretation. Consequently, we are subject to changing tax laws, treaties and regulations in and between countries in which we operate. Our income tax expense is based on our interpretation of the tax laws in effect at the time the expense was incurred. Tax legislation is proposed from time to time which could, among other things, limit our ability to defer the taxation of non-U.S. income and would increase current tax expense. A change in tax laws, treaties or regulations, or in the interpretation thereof, could result in a materially higher tax expense or a higher effective tax rate on our worldwide earnings.

We file periodic tax returns that are subject to review and audit by various revenue agencies in the jurisdictions in which we operate. Taxing authorities may challenge any of our tax positions. We are currently contesting tax assessments that could be material and we may contest future assessments where we believe the assessments are in error. Determinations by such authorities that differ materially from our recorded estimates, favorably or unfavorably, may have a material impact on our results of operations, financial position or cash flows.

Government regulation and environmental risks could reduce our business opportunities and increase our costs.

We must comply with extensive government regulation in the form of international conventions, federal, state and local laws and regulations in jurisdictions where our vessels operate and are registered. These conventions, laws and regulations govern oil spills and matters of environmental protection, worker health and safety, and the manning, construction and operation of vessels, and vessel and port security. We believe that we are in material compliance with all applicable environmental, health and safety and vessel and port security laws and regulations as currently in effect. We are not a party to any pending governmental litigation or similar proceeding, and we are not aware of any threatened governmental litigation or proceeding which, if adversely determined, would have a material adverse effect on our financial condition or results of operations. However, failure to comply with these laws and regulations may result in the assessment of administrative, civil and even criminal penalties, the imposition of remedial obligations, the denial or revocation of permits or other authorizations and the issuance of injunctions that may limit or prohibit our operations. In addition, compliance with environmental, health and safety and vessel and port security laws increases our costs of doing business.

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Environmental, health and safety and vessel and port security laws change frequently, and we may not be able to anticipate such changes or the impact of such changes. There is no assurance that we can avoid significant costs, liabilities and penalties imposed as a result of governmental regulation in the future. Changes in laws or regulations regarding offshore oil and gas exploration and development activities, the cost or availability of insurance, and decisions by customers, governmental agencies, or other industry participants could reduce demand for our services or increase our costs of operations, which could have a negative impact on our financial condition and operating results, but we cannot reasonably or reliably estimate that such changes will occur, when they will occur, or if they will impact us.

The Macondo well incident in the U.S. Gulf of Mexico in April 2010 and its impact on worldwide drilling operations could have a material adverse effect on our business. The Atwood Condor, which is expected to be delivered from the shipyard in June 2012, will mobilize to the U.S. Gulf of Mexico to operate under a 21-month contract expected to commence in September 2012. In the future, we may relocate other rigs to or place other new build rigs in service in the U.S. Gulf of Mexico. The Macondo incident and its consequences, including actions taken, or that may be taken, by the U.S. and other governments or our customers, could have a material adverse effect on our business. In addition, regulatory actions within a region, such as the U.S. Gulf of Mexico, may have an impact on global utilization and day rates.

Failure to comply with the U.S. Foreign Corrupt Practices Act or foreign anti-bribery legislation could have an adverse impact on our business.

The U.S. Foreign Corrupt Practices Act (“FCPA”) and similar anti-bribery laws in other jurisdictions, including the United Kingdom Bribery Act 2010, generally prohibit companies and their intermediaries from making improper payments to foreign officials for the purpose of obtaining or retaining business. We operate in many parts of the world that have experienced governmental corruption to some degree and, in certain circumstances, strict compliance with anti-bribery laws may conflict with local customs and practices and impact our business. Although we have programs in place covering compliance with anti-bribery legislation, any failure to comply with the FCPA or other anti-bribery legislation could subject us to civil and criminal penalties or other sanctions, which could have a material adverse effect on our business, financial condition, and results of operations. We could also face fines, sanctions and other penalties from authorities in the relevant foreign jurisdictions, including prohibition of our participating in or curtailment of business operations in those jurisdictions and the seizure of rigs or other assets.

Our international operations may involve risks not generally associated with domestic operations.

We derive substantially all of our revenues from operations outside the United States. Our operations are subject to risks inherent in conducting business internationally, such as:

• legal and governmental regulatory requirements;

• difficulties and costs of staffing and managing international operations;

• political, social and economic instability;

• terrorist acts, piracy, war and civil disturbances;

• language and cultural difficulties;

• potential vessel seizure, expropriation or nationalization of assets or confiscatory taxation;

• import-export quotas or other trade barriers;

• renegotiation, nullification or modification of existing contracts;

• difficulties in collecting accounts receivable and longer collection periods;

• foreign and domestic monetary policies;

• work stoppages;

• complications associated with repairing and replacing equipment in remote locations;

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• limitations on insurance coverage, such as war risk coverage, in certain areas;

• wage and price controls;

• assaults on property or personnel, including kidnappings;

• travel limitations or operational problems caused by public health or security threats;

• imposition of currency exchange controls;

• solicitation by governmental officials for improper payments or other forms of corruption;

• currency exchange fluctuations and devaluations; or,

• potentially adverse tax consequences, including those due to changes in laws or interpretation of existing laws.

Our non-U.S. operations are subject to various laws and regulations in certain countries in which we operate, including laws and regulations relating to the import and export, equipment and operation of drilling units, currency conversions and repatriation, oil and gas exploration and development, and taxation of offshore earnings and earnings of expatriate personnel. Governments in some foreign countries have become increasingly active in regulating and controlling the ownership of concessions and companies holding concessions, the exploration for oil and gas and other aspects of the oil and gas industries in their countries, including local content requirements for participating in tenders for certain drilling contracts. Many governments favor or effectively require the awarding of drilling contracts to local contractors or require foreign contractors to employ citizens of, or purchase supplies from, a particular jurisdiction. In addition, government action, including initiatives by OPEC, may continue to cause oil or gas price volatility. In some areas of the world, this governmental activity has adversely affected the amount of exploration and development work by major oil companies and may continue to do so. Operations in less developed countries can be subject to legal systems which are not as mature or predictable as those in more developed countries, which can lead to greater uncertainty in legal matters and proceedings.

Some of our drilling contracts are partially payable in local currency. Those amounts may exceed our local currency needs, leading to the accumulation of excess local currency, which, in certain instances, may be subject to either temporary blocking or other difficulties converting to U.S. dollars. Excess amounts of local currency may be exposed to the risk of currency exchange losses.

The shipment of goods, services and technology across international borders subjects us to extensive trade and other laws and regulations. Our import and export activities are governed by unique customs laws and regulations in each of the countries where we operate. Moreover, many countries, including the U.S., control the import and export of certain goods, services and technology and impose related import and export recordkeeping and reporting obligations, the laws and regulations related to which are complex and constantly changing. These laws and regulations may be enacted, amended, enforced or interpreted in a manner materially impacting our operations. Shipments may be delayed and denied import or export for a variety of reasons, some of which are outside our control, and such delays or denials could cause unscheduled operational downtime. Any failure to comply with these applicable legal and regulatory obligations also could result in criminal and civil penalties and sanctions, such as fines, imprisonment, debarment from government contracts, seizure of shipments and loss of import and export privileges.

In the past, these conditions or events have not materially affected our operations. However, we cannot predict whether any such conditions or events might develop in the future. Also, we organized our subsidiary structure and our operations, in part, based on certain assumptions about various foreign and domestic tax laws, currency exchange requirements, and capital repatriation laws. While we believe our assumptions are correct, there can be no assurance that taxing or other authorities will reach the same conclusion. If our assumptions are incorrect, or if the relevant countries change or modify such laws or the current interpretation of such laws, we may suffer adverse tax and financial consequences, including the reduction of cash flow available to meet required debt service and other obligations. Any of these factors could materially adversely affect our international operations and, consequently, our business, operating results and financial condition.

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Our business is subject to war, sabotage, terrorism and piracy, which could have an adverse effect.

It is unclear what impact the current United States military campaigns or possible future campaigns will have on the energy industry in general, or us in particular, in the future. Uncertainty surrounding retaliatory military strikes or a sustained military campaign may affect our operations in unpredictable ways, including changes in the insurance markets, disruptions of fuel supplies and markets, particularly oil, and the possibility that infrastructure facilities, including pipelines, production facilities, refineries, electric generation, transmission and distribution facilities, could be direct targets of, or indirect casualties of, an act of terror. War or risk of war may also have an adverse effect on the economy.

Acts of war, sabotage, terrorism, piracy and social unrest, brought about by world political events or otherwise, have caused instability in the world’s financial and insurance markets in the past and may continue to do so in the future. Such acts could be directed against companies such as ours, and could also adversely affect the oil, gas and power industries and restrict their future growth. Insurance premiums could increase and coverage may be unavailable in the future.

Failure to obtain and retain key personnel could impede our operations.

We depend to a significant extent upon the efforts and abilities of our executive officers and other key management personnel. There is no assurance that these individuals will continue in such capacity for any particular period of time. The loss of the services of one or more of our executive officers or other personnel could adversely affect our operations.

We require highly skilled personnel to operate and provide technical services and support for our business worldwide. Historically, competition for the labor required for drilling operations and construction projects, has intensified as the number of rigs activated, added to worldwide fleets or under construction increased, leading to shortages of qualified personnel in the industry and creating upward pressure on wages and higher turnover. We may experience increased competition for the crews necessary to operate our rigs currently under construction. If increased competition for labor were to intensify in the future we may experience increases in costs or reductions in experience levels which could impact operations. The shortages of qualified personnel or the inability to obtain and retain qualified personnel could also negatively affect the quality, safety and timeliness of our work.

Consolidation of suppliers may limit our ability to obtain supplies and services at an acceptable cost, on our schedule or at all.

Our operations rely on a significant supply of capital and consumable spare parts and equipment to maintain and repair our fleet. We also rely on the supply of ancillary services, including supply boats and helicopters. Recent consolidation has reduced the number of available suppliers, resulting in fewer alternatives for sourcing of key supplies and services. We may not be able to obtain supplies and services at an acceptable cost, at the times we need them or at all. These cost increases, delays or unavailability could negatively impact our future operations and result in increases in rig downtime, and delays in the repair and maintenance of our fleet.

Unionization efforts and labor regulations in certain countries in which we operate could materially increase our costs or limit our flexibility.

Certain of our employees and contractors in international markets are represented by labor unions and work under collective bargaining or similar agreements, which are subject to periodic renegotiation. Efforts may be made from time to time to unionize portions of our workforce. In addition, we may in the future be subject to strikes or work stoppages and other labor disruptions. Additional unionization efforts, new collective bargaining agreements or work stoppages could materially increase our costs, reduce our revenues or limit our flexibility.

Climate change legislation or regulations restricting emissions of greenhouse gases could result in increased operating costs and reduced demand for the oil and natural gas we produce.

There is a concern that emissions of greenhouse gases (“GHG”) may alter the composition of the global atmosphere in ways that affect the global climate. Climate change, including the impact of global warming, may create physical and financial risk. Physical risks from climate change include an increase in sea level and changes in weather conditions. Given the maritime nature of our business, we do not believe that physical climate change is likely to have a material adverse effect on us. Financial risks relating to climate change are likely to arise from increasing legislation and regulation, as compliance with any new rules could be difficult and costly.

United States federal legislation has been proposed in Congress to reduce GHG emissions and federal legislation limiting GHG emissions may be imposed in the United States. In addition, the EPA has undertaken new efforts to collect information regarding GHG emissions and their effects and has begun adopting and implementing regulations to restrict emissions of GHGs under existing provisions of the federal Clean Air Act, one of which requires a reduction in emissions of GHGs from motor vehicles and the other of which regulates emissions of GHGs from certain large stationary sources, effective January 2, 2011. The EPA has also adopted rules requiring the reporting of GHG emissions from specified large

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GHG emission sources in the United States on an annual basis, as well as certain onshore and offshore oil and natural gas production facilities on an annual basis, beginning in 2012 for emissions occurring in 2011. Foreign jurisdictions are also addressing climate changes by legislation or regulation. The adoption of legislation and regulatory programs to reduce emissions of GHGs could require us to incur increased energy, environmental and other costs and capital expenditures to comply. Consequently, legislation and regulatory programs to reduce emissions of GHGs could have an adverse effect on our business, financial condition and results of operations.

Adverse impacts upon the oil and gas industry relating to climate change may also affect us as demand for our services depends on the level of activity in offshore oil and natural gas exploration, development and production. Although we do not expect that demand for oil and gas will lessen dramatically over the short term, in the long term global warming may reduce the demand for oil and gas or increased regulation of GHG may create greater incentives for use of alternative energy sources. Any long term material adverse effect on the oil and gas industry may have a material adverse effect on our financial condition and operating results, but we cannot reasonably or reliably estimate if it will occur, when it will occur or that it will impact us.

We are subject to anti-takeover provisions of our constitutive documents and Texas law.

Holders of the shares of an acquisition target often receive a premium for their shares upon a change of control. Texas law and the following provisions of constitutive documents, among others, could have the effect of delaying or preventing a change of control and could prevent holders of our common stock from receiving such a premium:

• Texas law contains a provision that prohibits us from engaging in a business combination with any shareholder for three years from the date that person became an affiliated shareholder by beneficially owning 20% or more of our outstanding common stock, unless specified conditions are met.

• Under our By-laws, special meetings of shareholders may not be called by anyone other than our chairman of the board of directors, president, or the holders of at least one-tenth of all shares issued, outstanding, and entitled to vote.

• Under our Rights Agreement effective October 18, 2002 which expires November 5, 2012, our board of directors has the authority to issue up to 500,000 shares of “blank-check” preferred stock and to determine the voting rights and other privileges of these shares without any vote or action by our shareholders.

Covenants in our credit facility restrict our ability to engage in certain activities.

Our senior secured revolving credit facility restricts our ability to, among other things:

• incur, assume or guarantee additional indebtedness or issue redeemable stock;

• pay dividends or distributions;

• make loans and other types of investments;

• incur liens;

• restrict dividends, loans or asset transfers from our subsidiaries;

• sell or otherwise dispose of assets, including capital stock of subsidiaries;

• consolidate or merge with or into, or sell substantially all of our assets to, another person;

• acquire assets or businesses;

• enter into transactions with affiliates; and

• enter into new lines of business.

18

In addition, our credit facility contains various financial covenants that impose a maximum leverage ratio of 4.0 to 1.0, a debt to capitalization ratio of 0.5 to 1.0, a minimum interest expense coverage ratio of 3.0 to 1.0 and a minimum collateral maintenance of 150% of the aggregate amount outstanding under the credit facility. Our ability to meet these covenants or requirements may be affected by events beyond our control, and there can be no assurance that we will satisfy such covenants and requirements in the future. Such restrictions may limit our ability to successfully execute our business plans, which may have adverse consequences on our operations.

ITEM 1B. UNRESOLVED STAFF COMMENTS

None.

ITEM 2. PROPERTIES

Our property consists primarily of mobile offshore drilling rigs and ancillary equipment. Six of our rigs (the Atwood Aurora, the Atwood Beacon, the Atwood Eagle, the Atwood Falcon, the Atwood Hunter, and the Atwood Osprey) are pledged under our senior secured revolving credit facility. See “Management’s Discussion and Analysis of Financial Condition and Results of Operations—Liquidity and Capital Resources—Revolving Credit Facility” in our Annual Report to Shareholders for fiscal year 2011, filed herewith and incorporated by reference herein.

We own or lease offices in the United States, Australia, Egypt, South Korea, Malaysia, Singapore and the United Kingdom.

We incorporate by reference in response to this item the information set forth in Part I, Item 1 and in “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and Note 4 of the Notes to our Consolidated Financial Statements included in our Annual Report to Shareholders for fiscal year 2011, which is filed herewith and incorporated by reference herein.

ITEM 3. LEGAL PROCEEDINGS

We have certain actions, claims and other matters pending as discussed and reported in Notes to Consolidated Financial Statements included in our Annual Report to Shareholders for fiscal year 2011, which is filed herewith and incorporated by reference herein. As of September 30, 2011, we were also involved in a number of lawsuits which have arisen in the ordinary course of business and for which we do not expect the liability, if any, resulting from these lawsuits to have a material adverse effect on our current consolidated financial position, results of operations or cash flows. We cannot predict with certainty the outcome or effect of any of these matters described above or any such other proceeding or threatened litigation or legal proceedings. There can be no assurance that our beliefs or expectations as to the outcome or effect of any lawsuit or other matters will prove correct and the eventual outcome of these matters could materially differ from management’s current estimates.

19

PART II

ITEM 5. MARKET FOR THE REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES

As of November 8, 2011, there were approximately 39,023 record owners of our common stock. Our common stock and associated preferred stock purchase rights are traded on the New York Stock Exchange under the symbol “ATW”.

We did not pay cash dividends in fiscal years 2011 or 2010 and we do not anticipate paying cash dividends in the foreseeable future because of the capital-intensive nature of our business. To enable us to maintain our highly competitive profile in the industry, we expect to utilize cash reserves at the appropriate time to construct additional equipment or to upgrade existing equipment. Our senior secured revolving credit facility prohibits payments of cash dividends on our common stock without lender approval.

Information required by this item may be found under the caption “Stock Price Information” and in Note 3 to the Notes to our Consolidated Financial Statements in our Annual Report to Shareholders for fiscal year 2011, which is filed herewith and incorporated by reference herein.

ITEM 6. SELECTED FINANCIAL DATA

Information required by this item may be found under the caption “Five Year Financial Review” in our Annual Report to Shareholders for fiscal year 2011, which is filed herewith and incorporated by reference herein.

ITEM 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

Information required by this item may be found under the caption “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in our Annual Report to Shareholders for fiscal year 2011, which is filed herewith and incorporated by reference herein.

ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

Information required by this item may be found under the caption “Disclosures About Market Risk” in the “Management’s Discussion and Analysis of Financial Condition and Results of Operations” section of the Company’s Annual Report to Shareholders for fiscal year 2011, which is incorporated by reference herein.

ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

Information required by this item may be found in our Annual Report to Shareholders for fiscal year 2011, which is filed herewith and incorporated by reference herein.

ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE

None.

ITEM 9A. CONTROLS AND PROCEDURES

(a) Evaluation of Disclosure Controls and Procedures

Our management, with the participation of our Chief Executive Officer and Chief Financial Officer, evaluated the effectiveness of our disclosure controls and procedures as of the end of the period covered by this report. Based on that evaluation, the Chief Executive Officer and Chief Financial Officer concluded that our disclosure controls and procedures as of the end of the period covered by this report have been designed and are effective at the reasonable assurance level so that the information required to be disclosed by us in our periodic SEC filings is recorded, processed, summarized and reported within the time periods specific in the SEC’s rules, regulations, and forms and is communicated to management. We believe that a controls system, no matter how well designed and operated, cannot provide absolute assurance that the objectives of the controls system are met, and no evaluation of controls can provide absolute assurance that all control issues and instances of fraud, if any, within a company have been detected.

20

(b) Management’s Annual Report on Internal Control over Financial Reporting

A copy of our Management’s Report on Internal Control over Financial Reporting is included in our Annual Report to Shareholders for fiscal year 2011, which is filed herewith and incorporated by reference herein.

(c) Attestation Report of the Independent Registered Public Accounting Firm.

A copy of the report of PricewaterhouseCoopers LLP, our independent registered public accounting firm, is included in our Annual Report to Shareholders for fiscal year 2011, which is filed herewith and incorporated by reference herein.

(d) Change in Internal Control over Financial Reporting

No change in our internal control over financial reporting occurred during the most recent fiscal quarter that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.

ITEM 9B. OTHER INFORMATION

None.

21

PART III

ITEM 10. DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE

This information is incorporated by reference from our definitive Proxy Statement for the Annual Meeting of Shareholders to be held February 9, 2012, to be filed with the SEC not later than 120 days after the end of the fiscal year covered by this Form 10-K.

ITEM 11. EXECUTIVE COMPENSATION

This information is incorporated by reference from our definitive Proxy Statement for the Annual Meeting of Shareholders to be held February 9, 2012, to be filed with the SEC not later than 120 days after the end of the fiscal year covered by this Form 10-K.

ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS

This information is incorporated by reference from our definitive Proxy Statement for the Annual Meeting of Shareholders to be held February 9, 2012, to be filed with the SEC not later than 120 days after the end of the fiscal year covered by this Form 10-K.

ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE

This information is incorporated by reference from our definitive Proxy Statement for the Annual Meeting of Shareholders to be held February 9, 2012, to be filed with the SEC not later than 120 days after the end of the fiscal year covered by this Form 10-K.

ITEM 14. PRINCIPAL ACCOUNTANT FEES AND SERVICES

This information is incorporated by reference from our definitive Proxy Statement for the Annual Meeting of Shareholders to be held February 9, 2012, to be filed with the SEC not later than 120 days after the end of the fiscal year covered by this Form 10-K.

22

PART IV

ITEM 15. EXHIBITS AND FINANCIAL STATEMENTS

(a)

(1) Financial Statements.

Our Consolidated Financial Statements, together with the notes thereto and the report of PricewaterhouseCoopers LLP dated November 22, 2011, are included in our Annual Report to Shareholders for fiscal year 2011, which is filed herewith and incorporated by reference herein.

(2) Financial Statement Schedules.

All financial statement schedules have been omitted because they are not applicable or not required, or the information.

(3) Exhibits.

3.1	Amended and Restated Certificate of Formation dated February 9, 2006 (Incorporated herein by reference to Exhibit 3.1 of our Form 10-Q filed for the quarter ended March 31, 2008).
3.2	Amendment No. 1 to Amended and Restated Certificate of Formation dated February 14, 2008 (Incorporated herein by reference to Exhibit 3.2. of our Form 10-Q for the quarter ended March 31, 2008).
3.3	Second Amended and Restated By-Laws dated May 5, 2006 (Incorporated herein by reference to Exhibit 3.3 of our Form 10-Q for the quarter ended March 31, 2008).
3.4	Amendment No. 1 to Second Amended and Restated By-Laws dated June 7, 2007 (Incorporated herein by reference to Exhibit 3.4 of our Form 10-Q for the quarter ended March 31, 2008).
4.1	Rights Agreement dated effective October 18, 2002 between the Company and Continental Stock Transfer & Trust Company (Incorporated herein by reference to Exhibit 4.1 of our Form 8-A filed October 21, 2002).
4.2	Certificate of Adjustment of Atwood Oceanics, Inc. dated March 17, 2006 (Incorporated herein by reference to Exhibit 4.1 of our Form 8-K filed March 23, 2006).
4.3	Certificate of Adjustment of Atwood Oceanics, Inc. dated as of June 25, 2008 (Incorporated herein by reference to Exhibit 4.1 of our Form 8-K filed June 25, 2008).
4.4	See Exhibit Nos. 3.1, 3.2, 3.3 and 3.4 hereof for provision of our Amended and Restated Certificate of Formation (as amended) and Second Amended and Restated By-Laws (as amended) defining the rights of our shareholders (Incorporated herein by reference to Exhibits 3.1, 3.2, 3.3 and 3.4 of our Form 10-Q for the quarter ended March 31, 2008).
	The Company and its subsidiaries are parties to several debt instruments that have not been filed with the SEC under which the total amount of securities authorized does not exceed 10% of the total assets of the Company and its subsidiaries on a consolidated basis. Pursuant to paragraph 4(iii)(A) of Item 601(b) of Regulation S-K, the Company agrees to furnish a copy of such instruments to the SEC upon request.
†10.1	Atwood Oceanics, Inc. 1996 Incentive Equity Plan (Incorporated herein by reference to Exhibit 10.1 of our Form 10-Q for the quarter ended June 30, 1997).
†10.2	Form of Atwood Oceanics, Inc. Stock Option Agreement - 1996 Incentive Equity Plan (Incorporated herein by reference to Exhibit 10.3.2 of our Form 10-K for the year ended September 30, 1999).

23

†10.3	Amendment No. 1 to the Atwood Oceanics, Inc. 1996 Incentive Equity Plan (Incorporated herein by reference to Exhibit 10.3.3 of our Form 10-K for the year ended September 30, 1999).
†10.4	Form of Amendment No. 1 to the Atwood Oceanics, Inc. Stock Option Agreement - 1996 Incentive Equity Plan (Incorporated herein by reference to Exhibit 10.3.4 of our Form 10-K for the year ended September 30, 1999).
†10.5	Amendment No. 2 to the Atwood Oceanics, Inc. 1996 Incentive Equity Plan (Incorporated herein by reference to Appendix A to our Form DEF 14A filed January 12, 2001).
†10.6	Atwood Oceanics, Inc. Amended and Restated 2001 Stock Incentive Plan (Incorporated herein by reference to Appendix D to our definitive proxy statement on Form DEF 14A filed January 13, 2006).
†10.7	Form of Atwood Oceanics, Inc. Stock Option Agreement – 2001 Stock Incentive Plan (Incorporated herein by reference to Exhibit 10.3.7 of our Form 10-K for the year ended September 30, 2005).
†10.8	Form of Atwood Oceanics, Inc. Restricted Stock Award Agreement – 2001 Stock Incentive Plan (Incorporated herein by reference to Exhibit 10.3.8 of our Form 10-K for the year ended September 30, 2005).
†10.9	Form of Non-Employee Director Restricted Stock Award Agreement Amended and Restated 2001 Stock Incentive Plan (Incorporated herein by reference to Exhibit 10.1 of our Form 8-K filed June 1, 2006).
†10.10	Non-Employee Directors’ Elective Deferred Compensation Plan effective December 1, 2007 (Incorporation herein by reference to Exhibit 10.1 of our Form 8-K filed November 14, 2007).
†10.11	Atwood Oceanics, Inc. 2007 Long-Term Incentive Plan (Incorporated herein by reference to Appendix B to our definitive proxy statement on Form DEF 14A filed January 9, 2007).
†10.12	Amendment No. 1 to Atwood Oceanics, Inc. 2007 Long-Term Incentive Plan (Incorporated by reference to Appendix B to our revised definitive proxy statement on Form DEF14A filed January 15, 2008).
†10.13	Form of Stock Option Agreement – 2007 Long-Term Incentive Plan (Incorporated herein by reference to Exhibit 10.1.1 of our Form 10-Q for the quarter ended March 31, 2007).
†10.14	Form of Restricted Stock Award Agreement – 2007 Long-Term Incentive Plan (Incorporated herein by reference to Exhibit 10.1.2 of our Form 10-Q for the quarter ended March 31, 2007).
†10.15	Form of Non-Employee Director Restricted Stock Award Agreement – 2007 Long-Term Incentive Plan (Incorporated herein by reference to Exhibit 10.1.15 of our Form 10-K for the year ended September 30, 2009).
†10.16	Atwood Oceanics, Inc. Amended and Restated 2007 Long-Term Incentive Plan (Incorporated herein by reference to our definitive proxy statement on Form DEF14A filed January 14, 2011).
†10.17	Atwood Oceanics, Inc. Retention Plan for Certain Salaried Employees dated as of January 1, 2011 (Incorporated herein by reference to Exhibit 10.1 of our Form 10-Q for the quarter ended December 31, 2010).
†10.18	Employment Agreement dated as of December 8, 2009 between the Company and Robert J. Saltiel (Incorporated herein by reference to Exhibit 10.1 of our Form 8-K filed December 14, 2009).
†10.19	Executive Agreement dated as of August 11, 2010 between the Company and Mark L. Mey (Incorporated herein by reference to Exhibit 10.1 of our Form 8-K filed July 20, 2010).

24

†10.20	Executive Agreement dated as of September 18, 2002 between the Company and Glen P. Kelley (Incorporated herein by reference to Exhibit 10.5.3 of our Form 10-K for the year ended September 30, 2002).
†10.21	Executive Agreement dated as of February 1, 2011 between the Company and Arthur M. Polhamus (Incorporated herein by reference to Exhibit 10.1 to our Form 8-K filed January 18, 2011).
†*10.22	Atwood Oceanics, Inc. Restated Executive Life Insurance Plan dated as of March 19, 1999.
†*10.23	Atwood Oceanics, Inc. Benefits Equalization Plan.
†*10.24	First Amendment to Atwood Oceanics Benefit Equalization Plan dated December 14, 2005.
†*10.25	Second Amendment to Atwood Oceanics Benefit Equalization Plan dated August 20, 2008.
†*10.26	Third Amendment to Atwood Oceanics Benefit Equalization Plan dated December 4, 2008.
†*10.27	Fourth Amendment to Atwood Oceanics Benefit Equalization Plan dated December 18, 2008.
10.28	Credit Agreement dated May 6, 2011 among the Company, Atwood Offshore Worldwide Limited, Various Lenders and Nordea Bank Finland Plc, New York Branch (Incorporated herein by reference to Exhibit 10.1 of our Form 8-K filed May 9, 2011).
10.29	Construction Contract between Atwood Oceanics Pacific Limited and Jurong Shipyard Pte. Ltd. dated July 4, 2008 (Incorporated herein by reference to Exhibit 10.1 of our Form 10-Q for the quarter ended June 30, 2008).
10.30	Construction Contract for First Rig between Atwood Oceanics Pacific Limited and PPL Shipyard Pte. Ltd. dated October 1, 2010 (Incorporated by reference to Exhibit 10.8 to our Form 10-K for the year ended September 30, 2010).
10.31	Construction Contract for Second Rig between Atwood Oceanics Pacific Limited and PPL Shipyard Pte. Ltd. dated October 1, 2010 (Incorporated by reference to Exhibit 10.9 to our Form 10-K for the year ended September 30, 2010).
10.32	Construction Contract for Third Rig between Atwood Oceanics Pacific Limited and PPL Shipyard Pte. Ltd. dated January 14, 2011 (Incorporated by reference to Exhibit 10.1 to our Form 10-Q for the quarter ended March 30, 2010).
10.33	Contract for Construction and Sale of Drillship by and between Atwood Oceanics Pacific Limited and Daewoo Shipbuilding & Marine Engineering Co., Ltd., dated January 28, 2011 (Incorporated by reference herein to Exhibit 10.2 to our Form 10-Q for the quarter ended March 30, 2011).
*10.34	Contract for Construction and Sale of Drillship by and between Alpha Eagle Company and Daewoo Shipbuilding & Marine Engineering Co., Ltd., dated October 15, 2011.
*13	Annual Report to Shareholders.
*21.1	List of Subsidiaries.
*23	Consent of Independent Registered Public Accounting Firm.
*31.1	Certification of Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
*31.2	Certification of Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

25

*32.1	Certification of Chief Executive Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
*32.2	Certification of Chief Financial Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
*101	The following materials from Atwood Oceanics, Inc.’s Annual Report on Form 10-K for the fiscal year ended September 30, 2011, formatted in XBRL (Extensible Business Reporting Language): (i) Audited Consolidated Statements of Operations, (ii) Audited Consolidated Balance Sheets, (iii) Audited Consolidated Statement of Cash Flows, (iv) Audited Consolidated Statements of Changes in Shareholders’ Equity, and (v) Notes to Audited Consolidated Financial Statements.

* Filed herewith

† Management contract or compensatory plan or arrangement

26

SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) 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.

/s/    ROBERT J. SALTIEL        

ROBERT J. SALTIEL

President and Chief Executive Officer

DATE: November 22, 2011

Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated.

/S/    MARK L. MEY         MARK L. MEY Senior Vice President, Chief Financial Officer (Principal Financial and Accounting Officer)	/S/    ROBERT J. SALTIEL         ROBERT J. SALTIEL President and Chief Executive Officer; Director (Principal Executive Officer)
Date: November 22, 2011	Date: November 22, 2011
/S/    PHIL D. WEDEMEYER         PHIL D. WEDEMEYER Director	/S/    GEORGE S. DOTSON         GEORGE S. DOTSON Director
Date: November 22, 2011	Date: November 22, 2011
/S/    HANS HELMERICH         HANS HELMERICH Director	/S/    DEBORAH A. BECK         DEBORAH A. BECK Director
Date: November 22, 2011	Date: November 22, 2011
/S/    JAMES R. MONTAGUE         JAMES R. MONTAGUE Director	/s/    JACK E. GOLDEN         JACK E. GOLDEN Director
Date: November 22, 2011	Date: November 22, 2011

27

EX-10.22

Exhibit 10.22

ATWOOD OCEANICS, INC.

RESTATED EXECUTIVE LIFE INSURANCE PLAN

WHEREAS, pursuant to the terms and provisions of resolutions adopted by the Board of Directors of Atwood Oceanics, Inc., a Texas corporation (the “Company”), at a meeting held on July 8, 1977, the Company adopted an Executive Life Insurance Plan, and the Company and the then eligible executives of the Company executed a related Salary Continuation Agreement dated August 8, 1996 referred to therein; and

WHEREAS, the Company desires to (i) document the arrangements contemplated by the original Executive Life Insurance Plan and certain amendments thereto and (ii) amend the related Salary Continuation Agreements referred to therein.

NOW, THEREFORE, the Company hereby adopts this Restated Executive Life Insurance Plan (the “Plan”), which amends and restates in its entirety the substance of, and course of dealings in connection with, the original Executive Life Insurance Plan.

ARTICLE I

PURPOSE

The purpose of the Restated Executive Life Insurance Plan (the “Plan”) is to supplement the income of certain executive employees (“Executives”) of the Company with deferred compensation payable upon death.

ARTICLE II

ELIGIBILITY AND BENEFITS

2.1 Eligibility and Benefits. Each full-time employee designated as an “executive officer” of the Company and each other full-time key employee designated as eligible by the President of the Company shall be considered Executives eligible for benefits pursuant to the Plan. Benefits shall be payable only in event of the death of the Executives while the Executive is engaged in “active employment” with the Company. For purposes of the Plan, “active employment” means the Executive must be working for the Company or a subsidiary of the Company at the time of death on a full-time basis and paid regular earnings.

2.2 Deferred Compensation Benefits. To achieve the purpose of the Plan, the Company agrees to pay each Executive deferred compensation in the following amount:

a. Two and one-half (2  ¹/2) times the Executive’s annual salary at the time of death, excluding bonuses and other additional compensation, upon the death of the Executive prior to age 70 during active employment with the Company, if death is due to other than accidental causes; or

b. Five (5) times the Executive’s annual salary at the time of death, excluding bonuses and other additional compensation, upon the death of the Executive prior to age 70 during active employment with the Company, if death is due to accidental causes.

2.3 Salary Continuation Agreement. The Company shall enter into a Salary Continuation Agreement with each Executive to evidence the Executive’s right to benefits pursuant to the Plan. Each Salary Continuation Agreement shall terminate automatically without any further action on the part of the Company or the Executive in the event that, for any reason whatsoever (other than as described in Section 2.5 of the Plan) prior to the death of the Executive, the Executive ceases to be engaged in active employment with the Company.

2.4 Payment of Deferred Compensation. The deferred compensation payable pursuant to the Plan shall be paid to the beneficiary designated by the Executive in thirty (30) equal monthly installments in the event of death due to other than accidental causes, or in sixty (60) monthly installments in the event of death due to accidental causes, beginning on the last day of the month following the month in which the death of the Executive occurs. The deferred compensation paid by the Company pursuant to the Plan shall be subject to federal withholding, FICA, Medicare and other applicable taxes.

2.5 Change in Control. In the event of a termination of any Executive’s Employment with the Company during the two and one-half year period immediately following a Change in Control (as defined in the Company’s 1996 Incentive Equity Plan), then any Salary Continuation Agreement between the Company and such Executive shall remain in effect, and the Company and/or its successor shall be obligated to consider such Executive as having remained in active employment with the Company, and such Executive shall be deemed to remain in active employment with the Company for purposes of determining eligibility for benefits under the Plan, until the earlier of (i) the death of such Executive (at which time the right of the estate or the designated beneficiaries of such Executive under the Plan and the related Salary Continuation Agreement shall have been established), or (ii) the expiration of the two and one-half year period following the Change in Control.

ARTICLE III

ADMINISTRATION OF PLAN

3.1 In General. The Plan shall be administered by the Company. The Company may delegate any of its administrative duties, including without limitation duties with respect to the processing, review, investigation, approval, and payment of benefits under the Plan, to a named administrator or administrators.

3.2 Regulations. The Company shall promulgate any rules and regulations that it deems necessary to carry out the purposes of the Plan, or to interpret the terms and conditions of the Plan; provided that no rule, regulation, or interpretation shall be contrary to the provisions of the Plan. The rules, regulations, and interpretations made by the Company shall, subject only to the terms and provisions of the Plan, be final and binding on any Executive or the estate, heirs and designated beneficiaries of any Executive.

ARTICLE IV

AMENDMENT OR TERMINATION OF PLAN

4.1 Right to Amend or Terminate. The Company reserves the right at any time, and without prior or other approval of any Executive, to change, modify, amend, or terminate the Plan; provided, however, that no such change, modification, amendment, or termination at any time after the death of an Executive shall reduce the benefits to which the estate or designated beneficiary of such Executive is, or may become, eligible to receive; and provided, further that no such change, modification, amendment, or termination during the two and one-half year period immediately following a Change in Control (as defined in the Company’s 1996 Incentive Equity Plan) shall reduce the benefits to which any Executive or his estate or designated beneficiary is, or may become, eligible to receive.

4.2 Amendments Retroactive. All such changes, modifications, or amendments may be retroactive to any date up to and including the original effective date of the Plan, and shall be retroactive to that date unless other provision is specifically made; provided that no such change, modification, or amendment shall adversely affect any benefit under the Plan previously paid or provided to an Executive (or his successor in interest).

ARTICLE V

METHOD OF FUNDING

5.1 Plan Funded by Insurance. The Company may, but shall not be obligated to, fund the deferred compensation payable pursuant to the Plan with the proceeds of insurance maintained by the Company on the lives of the Executives. No property of the Company is or shall be, by reason of this Plan, held in trust for any employee of the Company, nor shall any person have any interest in or any lien or prior claim upon any property of the Company by reason of the Plan or the Company’s obligations to make payments hereunder.

5.2 Policy Provisions. All benefits, terms and conditions of any insurance procured by the Company pursuant to the Plan, including without limitation, any provisions with respect to extension of term, conversion privileges, assignability, and incontestability, shall be subject to and governed by the terms and conditions of the relevant policy or policies. However, no term, condition or limitation of any such policy or policies shall limit the obligation of the Company to pay the deferred compensation payable pursuant to the terms of Plan and the applicable Salary Continuation Agreement.

ARTICLE VI

MISCELLANEOUS

6.1 Limitation on Rights. Participation in the Plan shall not give any Executive the right to be retained in the service of the Company or any rights to any benefits whatsoever, except to the extent specifically set forth herein.

6.2 Headings. Headings of Articles and Sections in this instrument are for convenience only, and do not constitute any part of the Plan.

6.3 Gender and Number. Unless the context clearly indicates otherwise, the masculine gender when used in the Plan shall include the feminine, and the singular number shall include the plural and the plural number the singular.

EXECUTED as of the 19 day of March, 1999, but effective as of July 8, 1977.

ATWOOD OCEANICS, INC.

/s/ James M. Holland

James M. Holland, Secretary

EX-10.23

Exhibit 10.23

ATWOOD OCEANICS

BENEFIT EQUALIZATION PLAN

TABLE OF CONTENTS

ARTICLE 1 DEFINITIONS
1.1     Account	-1-
1.2     Active Member	-1-
1.3     Adjusted Beginning Balance	-1-
1.4     Administrative Committee	-1-
1.5     Allocation Date	-2-
1.6     Allocation Period	-2-
1.7     Beneficiary	-2-
1.8     Board of Directors	-2-
1.9     Change of Control	-2-
1.10     Code	-2-
1.11     Code Limitation	-2-
1.12     Company Stock	-2-
1.13     Compensation	-2-
1.14     Deferral Agreement	-2-
1.15     Deferral Agreement Effective Date	-3-
1.16     Elective Deferral	-3-
1.17     Elective Deferral Account	-3-
1.18     Eligible Class	-3-
1.19     Employee	-3-
1.20     Employer	-3-
1.21     Employer Matching Account	-3-
1.22     Employer Matching Credit	-3-
1.23     ERISA	-3-
1.24     401(k) Spillover Deferral	-3-
1.25     401(k) Spillover Deferral Account	-4-
1.26     Investment Gain or Loss	-4-
1.27     Member	-4-
1.28     Plan	-4-
1.29     Plan Document	-4-
1.30     Plan Year	-4-
1.31     Qualified Domestic Relations Order	-4-
1.32     Regular Deferral	-4-
1.33     Regular Deferral Account	-4-
1.34     Regulation	-4-
1.35     Retirement Plan	-5-
1.36     Separation	-5-
1.37     Sponsor	-5-
1.38     Tender Offer	-5-
1.39     Unforeseeable Emergency	-5-
1.40     Valuation Date	-5-
1.41     Valuation Period	-5-
ARTICLE 2 PARTICIPATION
2.1     Designation of Active Members by Board of Directors	-6-
2.2     Commencement of Participation	-6-

2.3     Cessation of Participation	-6-
2.4     Recommencement of Participation by Former Members	-6-
2.5     Frozen Accounts	-6-
ARTICLE 3 PARTICIPANT DEFERRALS AND EMPLOYER MATCHING ALLOCATIONS
3.1     Deferral Agreements	-7-
3.2     401(k) Spillover Deferrals	-7-
3.3     Regular Deferrals	-7-
3.4     Employer Matching Credits	-7-
ARTICLE 4 ALLOCATIONS
4.1     Information Statements from Employer	-9-
4.2     Allocation of 401(k) Spillover Deferrals	-9-
4.3     Allocation of Regular Deferrals	-9-
4.4     Allocation of Employer Matching Credit	-9-
4.5     Member Direction of Investments	-9-
4.6     Allocation of Investment Gain or Loss	-9-
4.7     Effective Date of Allocations and Adjustments	-9-
4.8     No Vesting Unless Otherwise Prescribed	-10-
ARTICLE 5 BENEFITS AND EVENTS ENTITLING PARTICIPANTS TO DISTRIBUTION OF BENEFITS
5.1     Benefit upon Separation	-11-
5.2     Benefit upon Change in Control	-11-
5.3     Time for Determining Account Balances	-11-
5.4     Accounting for Distributions	-11-
5.5     Receipt of Domestic Relations Order	-11-
5.6     Withdrawal for Unforeseeable Emergency	-11-
ARTICLE 6 DISTRIBUTION OF BENEFITS
6.1     Time of Distribution	-12-
6.2     Distribution Method	-12-
6.3     Qualified Domestic Relations Orders	-12-
6.4     Distributions to Disabled	-12-
6.5     Designation of Beneficiary	-12-
6.6     No Duplication of Benefits	-12-
6.7     Missing Distributees	-12-
6.8     Claims Procedure	-13-
6.9     Claims Appeal Procedure	-13-
6.10   Member’s Right to Arbitration	-13-
ARTICLE 7 COMMITTEE
7.1     Appointment, Term, Resignation, and Removal	-14-
7.2     Powers	-14-
7.3     Organization	-15-
7.4     Quorum and Majority Action	-15-
7.5     Signatures	-15-
7.6     Disqualification of Administrative Committee Members	-15-
7.7     Disclosure to Members	-15-
7.8     Standard of Performance	-15-
7.9     Liability of Administrative Committee	-15-

7.10     Indemnification of Administrative Committee Members	-16-
7.11     Bonding	-16-
7.12     Compensation	-16-
7.13     Persons Serving in Dual Fiduciary Roles	-16-
7.14     Administrator	-16-
7.15     Standard of Judicial Review of Administrative Committee Actions	-16-
ARTICLE 8 ADOPTION OF PLAN BY OTHER EMPLOYERS
8.1     Adoption Procedure	-17-
8.2     No Joint Venture Implied	-17-
ARTICLE 9 AMENDMENT AND TERMINATION
9.1     Sponsor’s Right to Amend	-18-
9.2     Limitations on Right to Amend	-18-
9.3     Retroactive Amendments to Meet Labor or Tax Requirements	-18-
9.4     Sponsor’s Right to Terminate	-18-
ARTICLE 10 MISCELLANEOUS
10.1     Establishment of Trust Fund not Required	-19-
10.2     Plan Does Not Constitute an Employment Contract	-19-
10.3     Spendthrift Clause	-19-
10.4     Form of Elections	-19-
10.5     Governing Laws; Parties to Legal Actions	-20-
10.6     Plan Document Controlling	-20-
10.7     Severability of Clauses	-20-
10.8     Cross References	-20-
10.9     Securities Law Considerations	-20-

ATWOOD OCEANICS

BENEFIT EQUALIZATION PLAN

THIS AGREEMENT by Atwood Oceanics, Inc., a Texas corporation (the “Sponsor”),

W I T N E S S E T H:

WHEREAS, the Sponsor desires to establish a program that will compensate for certain limits on elective deferrals and employer matching contributions imposed on certain executive employees under the Atwood Oceanics Retirement Plan;

WHEREAS, the Sponsor desires to provide the opportunity for certain executive employees to accumulate supplemental funds for retirement or special needs prior to retirement through the deferral of portions of their compensation; and

WHEREAS, the plan hereby established is intended to constitute an unfunded plan of deferred compensation for a select group of management or highly compensated employees;

NOW, THEREFORE, the Sponsor hereby adopts the plan hereinafter set forth.

ARTICLE 1

DEFINITIONS

The terms defined in this Article shall have the meanings attributed to them unless the context obviously requires another meaning:

1.1 Account. “Account” shall mean any of the ledger accounts pertaining to a Member that are maintained by the Administrative Committee to reflect the Member’s interest in the Plan. The Administrative Committee shall establish the Accounts specifically described in the Plan and any additional Accounts that the Administrative Committee considers to be necessary in order to reflect the entire interest of the Member in the Plan. Each of the Accounts shall reflect any 401(k) Spillover Deferrals, Regular Deferrals, Employer Matching Credits, and Investment Gain or Loss allocable to the Account.

1.2 Active Member. “Active Member” shall mean an individual designated as such by the Board of Directors.

1.3 Adjusted Beginning Balance. “Adjusted Beginning Balance” shall mean the balance of an Account as of the last Valuation Date preceding the current Valuation Period, reduced by the amount of any distributions allocable to that Account made during the current Valuation Period.

1.4 Administrative Committee. “Administrative Committee” shall mean the committee appointed by the Sponsor to administer the Plan.

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1.5 Allocation Date. “Allocation Date” shall mean the day specified by the Administrative Committee for the allocation of amounts to the Members’ Accounts, which shall occur no less frequently than once a month.

1.6 Allocation Period. “Allocation Period” shall mean the period beginning on the day following an Allocation Date (or on the first day of the first Plan Year, in the case of the first Allocation Period) and ending on the immediately succeeding Allocation Date.

1.7 Beneficiary. “Beneficiary” shall mean any person(s), trust(s), or other entity(ies), including the Member’s estate, entitled to receive the benefits payable hereunder upon the Member’s death.

1.8 Board of Directors. “Board of Directors” shall mean the board of directors of the Sponsor.

1.9 Change of Control. “Change of Control” shall mean the occurrence of either of the following events: (i) a third person, including a “group” as determined in accordance with Section 13(d)(3) of the Securities Exchange Act of 1934, becomes the beneficial owner of shares of the Company having thirty percent or more of the total number of votes that may be cast for the election of directors of the Sponsor; or (ii) as a result of, or in connection with, any Tender Offer, merger, other business combination, sale of assets, or contested election, or any combination of the foregoing transactions, the persons who were directors of the Sponsor before any such transaction or transactions shall cease to constitute a majority of either the Board of Directors or the board of directors of any successor to the Sponsor.

1.10 Code. “Code” shall mean the Internal Revenue Code of 1986, as amended.

1.11 Code Limitation. “Code Limitation” shall mean a limitation or restriction set forth in the Retirement Plan that is required to be included in the Retirement Plan under Section 401(a)(17), 401(k), 402(g), or 415 of the Code.

1.12 Company Stock. “Company Stock” shall mean shares of stock issued by the Sponsor.

1.13 Compensation. “Compensation” shall mean Considered Compensation as defined in the Retirement Plan.

1.14 Deferral Agreement. “Deferral Agreement” shall mean an agreement of the type described in Section 3.1.

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1.15 Deferral Agreement Effective Date. “Deferral Agreement Effective Date” shall mean, except as otherwise provided in this Section, the first day of the calendar year beginning after the properly completed and executed Deferral Agreement is received by the Administrative Committee. As applicable to an Employee who has been designated as an Active Member for the first time, “Deferral Agreement Effective Date” shall mean the date the Deferral Agreement is executed, if the Deferral Agreement is executed within the thirty-day period immediately following such designation. The Deferral Agreement shall be effective with respect to any Compensation earned and payable on or after the Deferral Agreement Effective Date.

1.16 Elective Deferral. “Elective Deferral” shall mean either (i) the Member’s 401(k) Spillover Deferral or Regular Deferral, or (ii) both such deferrals.

1.17 Elective Deferral Account. “Elective Deferral Account” shall mean either (i) the Member’s 401(k) Spillover Deferral Account or Regular Deferral Account, or (ii) both such Accounts.

1.18 Eligible Class. “Eligible Class” shall mean the president of the Sponsor and all Employees who report directly to the president of the Sponsor.

1.19 Employee. “Employee” shall mean an individual who is reflected as a common law employee of the Employer in the records of the Employer.

1.20 Employer. “Employer” shall mean the Sponsor and any other business organization that has adopted this Plan.6

1.21 Employer Matching Account. “Employer Matching Account” shall mean the ledger account maintained by the Administrative Committee for each Member that reflects any portion of the Employer Matching Credits allocated to the Member and any Investment Gain or Loss attributable to such credits.

1.22 Employer Matching Credit. “Employer Matching Credit” shall mean the credit made pursuant to the provisions of Section 3.4, if any.

1.23 ERISA. “ERISA” shall mean the Employee Retirement Income Security Act of 1974, as amended.

1.24 401(k) Spillover Deferral. “401(k) Spillover Deferral” shall mean the Member’s compensation deferral made pursuant to the provisions of Section 3.2, if any.

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1.25 401(k) Spillover Deferral Account. “401(k) Spillover Deferral Account” shall mean the ledger account maintained by the Administrative Committee for each Member that reflects any 401(k) Spillover Deferrals made by the Member and any Investment Gain or Loss attributable to such deferrals.

1.26 Investment Gain or Loss. “Investment Gain or Loss” shall mean the increase or decrease in the value of a Member’s Account determined under the procedures used by the managers of the investment funds in which the Member’s Account is invested.

1.27 Member. “Member” shall mean a person who qualifies as such under the provisions of Article 2.

1.28 Plan. “Plan” shall mean all aspects of the program known as Atwood Oceanics Benefit Equalization Plan, the purpose of which is to provide retirement, death, and other severance benefits to Members, surviving spouses, and other Beneficiaries. The Plan comprehends the Plan Document under which it is maintained and the rights, powers, duties, and obligations of the Employers, the Members, the Beneficiaries, and all other interested parties.

1.29 Plan Document. “Plan Document” shall mean this agreement, as amended from time to time.

1.30 Plan Year. “Plan Year” shall mean the 12-consecutive-month annual accounting period of the Plan, which shall end on the last day of December of each calendar year.

1.31 Qualified Domestic Relations Order. “Qualified Domestic Relations Order” shall mean any order determined by the Administrative Committee to be a qualified domestic relations order within the meaning of Section 414(p) of the Code.

1.32 Regular Deferral. “Regular Deferral” shall mean the Member’s compensation deferral made pursuant to the provisions of Section 3.3, if any.

1.33 Regular Deferral Account. “Regular Deferral Account” shall mean the ledger account maintained by the Administrative Committee for each Member that reflects any Regular Deferrals made by the Member and any Investment Gain or Loss attributable to such deferrals.

1.34 Regulation. “Regulation” shall mean the Internal Revenue Service regulation specified, as it may be changed from time to time.

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1.35 Retirement Plan. “Retirement Plan” shall mean the Atwood Oceanics Retirement Plan, as amended from time to time, or any replacement or successor plan adopted by the Sponsor. Any reference to a specific provision of the Retirement Plan shall be deemed to include a reference to the corresponding provision of any amended, replacement, or successor Retirement Plan.

1.36 Separation. “Separation” shall mean an individual’s termination of employment with an Employer without commencing or continuing employment with any other Employer.

1.37 Sponsor. “Sponsor” shall mean Atwood Oceanics, Inc., a Texas corporation, or any other business organization that assumes the primary responsibility for maintaining this Plan with the consent of the last preceding Sponsor.

1.38 Tender Offer. “Tender Offer” shall mean a tender offer for, or request or invitation for tenders of, shares of Company Stock in exchange for cash or any other consideration, as made to the Plan or to holders of shares of Company Stock generally.

1.39 Unforeseeable Emergency. “Unforeseeable Emergency” shall mean a severe financial hardship to the Member resulting from a sudden and unexpected illness or accident of the Member or of a dependent (as defined in Section 152(a) of the Code) of Member, loss of the Member’s property due to casualty, or other similar extraordinary and unforeseeable circumstances arising as a result of events beyond the control of the Member. Circumstances which constitute an unforeseeable emergency will depend upon the facts of each case, but, in any case, no emergency withdrawal may be made to the extent that such financial hardship is or may be relieved (i) through reimbursement or compensation by insurance or otherwise, (ii) by liquidation of the Member’s assets, to the extent that liquidation of such assets would not itself cause severe financial hardship, or (iii) by cessation of Elective Deferrals. The term “unforeseeable emergency” does not include the need to send the Member’s child to college or the desire to purchase a home.

1.40 Valuation Date. “Valuation Date” shall mean each day on which any investment fund available to Members hereunder is valued under the procedures of the manager of such fund. One or more investment funds may have different Valuation Dates from other investment funds.

1.41 Valuation Period. “Valuation Period” shall mean the period beginning at the commencement of trading on the day following a Valuation Date (or on the first day of the first Plan Year, in the case of the first Valuation Period) and ending at the close of trading on the immediately succeeding Valuation Date.

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ARTICLE 2

PARTICIPATION

2.1 Designation of Active Members by Board of Directors. The Board of Directors may designate from time to time such members of the Eligible Class as it shall from time to time determine to be Active Members, provided that there shall not be more than ten Active Members at any time. An Active Member shall continue as such until the earlier of (i) the date the individual ceases to be a member of the Eligible Class, or (ii) the date specified by the Board of Directors as the date on which the individual shall no longer be an Active Member.

2.2 Commencement of Participation. An Employee shall become a Member on the later of (i) the effective date of the adoption of the Plan by such individual’s Employer, or (ii) the date on which such individual is first designated as an Active Member by the Board of Directors.

2.3 Cessation of Participation. An individual who has become a Member shall cease to be a Member on the later of (i) the first date on which he ceases to be an Active Member, or (ii) the first date on which no portion of his Accounts remains to be distributed and no amounts remain to be credited to his Accounts.

2.4 Recommencement of Participation by Former Members. A former Member shall again become a Member on the date, if any, on which such individual is again designated as an Active Member by the Board of Directors.

2.5 Frozen Accounts. A Member’s Accounts shall be frozen as of the date that he is no longer an Active Member. A Member whose Accounts have been frozen shall not be permitted to make additional deferrals under the Plan, nor shall his Accounts share in the allocation of any Employer Matching Credits which are allocated to Members’ Accounts as of a date on or after the date as of which his Account is frozen. Such a Member’s Accounts, however, shall continue to share in any Investment Gain or Loss of the Plan during the period of time that his Accounts are frozen. The Accounts of such a Member shall be unfrozen immediately upon his redesignation as an Active Member, and he shall thereupon participate in the Plan in accordance with the terms thereof.

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ARTICLE 3

PARTICIPANT DEFERRALS AND EMPLOYER MATCHING ALLOCATIONS

3.1 Deferral Agreements. A Deferral Agreement shall be an agreement in a form satisfactory to the Administrative Committee to prospectively receive one or more items of compensation from the Employer in a reduced amount and to have the Administrative Committee credit an amount equal to the amount of the reduction to the Member’s Account. The Deferral Agreement shall specify (i) whether any amounts shall be deferred under his Plan as 401(k) Spillover Deferrals, and (ii) the amount, if any, of the Member’s Regular Deferral. Any such Deferral Agreement shall be revocable or irrevocable in accordance with its terms, provided that no revocation shall be retroactive or permit payment to the Member of any amount deferred prior to the date of revocation. A Member shall be entitled to prospectively modify his Deferral Agreement at least once a year. The Administrative Committee shall establish and announce to the Members the rules governing the administration of Elective Deferrals, including any limitations upon the amount that may be deferred and the procedures for and any limitations upon a Member’s right to revoke or change his designation. Elective Deferrals may be made by periodic payroll deductions or by other methods, as determined from time to time by the Administrative Committee.

3.2 401(k) Spillover Deferrals. An Active Member may specify in his Deferral Agreement that amounts that cannot be deferred under the Retirement Plan due to one or more Code Limitations shall be deferred under this Plan as 401(k) Spillover Deferrals. Such a Member’s 401(k) Spillover Deferral Account shall be credited with an amount equal to the excess of (i) the amounts of the Required and Additional Salary Deferrals which would have been made by the Member under the Retirement Plan in the absence of the Code Limitations over (ii) the amounts of such Deferrals actually made by the Member under the Retirement Plan. Such deferrals shall commence on the Deferral Agreement Effective Date.

3.3 Regular Deferrals. Each Active Member may specify in his Deferral Agreement a dollar amount or percentage of his Compensation to be deferred under this Plan as a Regular Deferral. The Administrative Committee may require the Member to make separate specifications for different types of Compensation. Such deferrals shall commence on the Deferral Agreement Effective Date.

3.4 Employer Matching Credits. The Employer shall, for each Plan Year, make an Employer Matching Credit on behalf of each Active Member in an amount equal to the excess of (i) the amounts of the Matching Contributions which would have been made by the Member under the Retirement Plan in the absence of the Code Limitations over (ii) the amounts of such Matching Contributions actually made on behalf of the Member under the Retirement Plan. Such deferrals shall commence on the Deferral Agreement Effective Date.

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At any time that the Member would otherwise make the maximum Required and Additional Contribution and receive the maximum Employer Matching Contribution had not the Code Limitations limited said Contributions, t , provided that credits in lieu of Required or Additional Contributions shall be made only to the extent that the Member’s compensation is reduced under a valid salary deferral agreement, and that credits in lieu of Employer Matching Contributions shall be made only with respect to such credits in lieu of Required or Additional Contributions

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ARTICLE 4

ALLOCATIONS

4.1 Information Statements from Employer. As soon as practical after each Allocation Date, the Employer shall provide the Administrative Committee with a schedule setting forth the names of its Active Members and other Members; the amount of its Employer Matching Credit for each Active Member; the amount and type of Elective Deferral(s) of each of its Active Members; and the amount of Compensation paid to each Active Member. Such schedules shall be conclusive evidence of such facts.

4.2 Allocation of 401(k) Spillover Deferrals. The Administrative Committee shall allocate to each Member an amount equal to his 401(k) Spillover Deferrals for each Allocation Period.

4.3 Allocation of Regular Deferrals. The Administrative Committee shall allocate to each Member an amount equal to his Regular Deferrals for each Allocation Period.

4.4 Allocation of Employer Matching Credit. The Administrative Committee shall separately allocate the Employer Matching Credit for each Plan Year among the Employer’s Active Members by allocating to each such Member an amount equal to the Employer Matching Credit made on his or her behalf. Each Member’s share shall be credited to his or her Employer Matching Account.

4.5 Member Direction of Investments. The Administrative Committee shall select three or more mutual funds or other collective investment funds and permit each Member to direct the portion of his Accounts to be invested in each such fund. Once the Administrative Committee has selected or changed the selection of funds, it shall establish rules pertaining to the administration thereof, including but not limited to rules for making selections effective, establishing the frequency of permitted changes, the minimum percentage in any fund, and all other necessary or appropriate regulations.

4.6 Allocation of Investment Gain or Loss. Each valuation and determination of Investment Gain or Loss provided for hereunder shall reflect the value of the different funds in which the Member’s Account is invested separately. The Administrative Committee shall allocate Investment Gain or Loss attributable to each such fund among the Members’ various Accounts (each type of Account being considered separately).

4.7 Effective Date of Allocations and Adjustments. The Administrative Committee shall credit to each Member’s Accounts such Member’s Elective Deferrals and Employer Matching Credits, so that all such amounts shall be entered in the Member’s Accounts as soon as administratively practicable following the date on which they would have been paid to the Member or the Retirement Plan, or otherwise been includable in gross income for federal income tax purposes in the absence of a deferral election. The Administrative Committee shall credit to each Member’s Accounts such Member’s portion of the adjustments and allocations required by Section 4.6, so that all such allocations shall become effective and be entered in such Member’s Accounts as of the Valuation Date with respect to which they are attributable.

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4.8 No Vesting Unless Otherwise Prescribed. No allocations, adjustments, credits, or transfers shall ever vest in any Member any right, title, or interest in the Plan except at the times and upon the terms and conditions herein set forth.

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ARTICLE 5

BENEFITS AND EVENTS ENTITLING PARTICIPANTS

TO DISTRIBUTION OF BENEFITS

5.1 Benefit upon Separation. A Member who incurs a Separation other than on account of death shall be entitled to a benefit equal to the total amount credited to all of his Accounts. The Beneficiary of a Member whose Separation occurs on account of death shall be entitled to a benefit equal to the total amount credited to all of such Member’s Accounts.

5.2 Benefit upon Change in Control. In the event of a Change in Control, a Member shall be entitled to a benefit equal to the total amount credited to all of his Accounts regardless of whether such Member has had a Separation.

5.3 Time for Determining Account Balances. The amount credited to a Member’s Accounts shall be determined, for purposes of this Article, as of the Valuation Date coincident with or next following the date of the Member’s Separation.

5.4 Accounting for Distributions. The balance of an Account shall be reduced as of the first day of the Valuation Period by the amount of any withdrawals, payments, distributions, or other amounts properly chargeable to such Account during such Valuation Period.

5.5 Receipt of Domestic Relations Order. The receipt of a judicial decree or order shall constitute an event permitting distribution under the Plan, provided that such judicial decree or order would constitute a Qualified Domestic Relations Order if the requirement that such an order not require a plan to make distribution to an alternate payee prior to a Members earliest retirement age, as defined in Section 414(p)(4)(B) of the Code, were disregarded.

5.6 Withdrawal for Unforeseeable Emergency. Any Member may make application to the Administrative Committee to withdraw in a single sum from his Elective Deferral and Employer Matching Accounts such amount, and not more than that amount, as is reasonably needed to satisfy the emergency need. Whether or not a Member has incurred an Unforeseeable Emergency shall be determined by the Administrative Committee on the basis of all relevant facts available to the Administrative Committee and in accordance with written procedures established by the Administrative Committee. Such written procedures shall specify the requirements for requesting and receiving distributions on account of Unforeseeable Emergency, including what forms must be submitted and to whom. The Administrative Committee shall uniformly and consistently apply such written procedures so that all Members in similar circumstances are treated alike. All determinations regarding Unforeseeable Emergency must be made in accordance with objective nondiscretionary criteria. Such determinations must also comply with applicable Department of Treasury regulations and rulings. An application for a withdrawal made pursuant to this Section must be in writing and must state the reason or reasons for the need of such Member to make such a withdrawal. Such application must specify the amount necessary to satisfy the Member’s Unforeseeable Emergency. The Administrative Committee shall be entitled to rely upon the Member’s representations set forth in his application, to the extent that such reliance is reasonable. A distribution made pursuant to this Section shall not exceed the amount necessary to meet the Unforeseeable Emergency of the Member. The amount of an Unforeseeable Emergency withdrawal may include any amounts necessary to pay any federal, state, or local income taxes reasonably anticipated to result from the distribution. Applications under this Section shall be processed as soon as administratively feasible. The Administrative Committee shall direct the Employer when to disburse any funds as an Unforeseeable Emergency withdrawal.

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ARTICLE 6

DISTRIBUTION OF BENEFITS

6.1 Time of Distribution. Subject to any contrary provisions in this Article, distributions provided for in the Plan shall be made or commenced as soon as practical, and in any event, within one year after the Member’s Separation. In the event of a Change in Control, each Member shall receive a distribution as soon as practical after such Change in Control.

6.2 Distribution Method. Distributions shall be paid in cash in the form of a single sum.

6.3 Qualified Domestic Relations Orders. Payment shall be made in accordance with the provisions of any Qualified Domestic Relations Order.

6.4 Distributions to Disabled. If the Administrative Committee determines that any person to whom a payment is due is unable to care for his affairs because of physical or mental disability, it shall have the authority to cause the payments to be made to the spouse, brother, sister, or other person the Administrative Committee determines to have incurred, or to be expected to incur, expenses for that person unless a prior claim is made by a qualified guardian or other legal representative. The Administrative Committee shall not be responsible to oversee the application of those payments. Payments made pursuant to this power shall be a complete discharge of all liability under the Plan. Any amount payable to a minor under any provision of this Plan including the foregoing provisions of this Section may be paid directly to the minor. The receipt by the minor shall be a complete discharge of all liability under the Plan.

6.5 Designation of Beneficiary. Each Member has the right to designate and to revoke the designation of his Beneficiary pursuant to the terms of the Retirement Plan.

6.6 No Duplication of Benefits. There shall be no duplication of benefits under this Plan.

6.7 Missing Distributees. The Administrative Committee shall make reasonable efforts to locate any person entitled to a distribution. Such efforts shall include utilization of the services of the Social Security Administration and the Internal Revenue Service to attempt to ascertain the current mailing address of any such person or for the purpose of forwarding correspondence from the Plan to any such person. If the efforts to locate a person entitled to a distribution are unsuccessful, the Administrative Committee may instruct the Employer to distribute such benefits into an interest-bearing federally-insured bank account opened in such person’s name or to purchase an annuity for such person. Such person shall have an unconditional right to withdraw funds from any such bank account. All ordinary and reasonable expenses incurred in connection with attempting to locate a person entitled to benefits under the Plan and in establishing an account or purchasing an annuity for a person who cannot be located shall be deducted from the benefit payable to such person.

If a person entitled to a distribution cannot be located within one year of the date any benefits payable under the Plan should be paid or commence to be paid, the Member’s Account may be forfeited. Notwithstanding the preceding sentence, if at any time prior to termination of the Plan, the Member or

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Beneficiary files a valid claim for the forfeited benefits payable under the Plan, then (a) as soon as administratively practicable, the forfeited benefits payable to such former Member or Beneficiary shall be reinstated effective as of the date or receipt of the claim and (b) as soon as administratively practicable following the reinstatement of such forfeited benefits, the value of the reinstated benefits shall be paid pursuant to the provisions of this Article to the Member or Beneficiary thereof.

In the event of the termination of the Plan, amounts payable to persons who cannot be located that have not previously been forfeited and reallocated shall be used to establish a bank account or individual retirement account, or to purchase an annuity, for such person.

6.8 Claims Procedure. Submission of a claim for benefits by the Member or Beneficiary is not a condition to payment of benefits due hereunder. However, if the Member or Beneficiary believes that benefits have not been properly paid, he must submit a claim for proper payment to the Administrative Committee. Under normal circumstances, a final decision shall be made as to a claim within 90 days after receipt of the claim. If the Administrative Committee notifies the claimant in writing during the initial 90-day period, it may extend the period up to 180 days after the initial receipt of the claim. The written notice must contain the circumstances necessitating the extension and the anticipated date for the final decision. If a claim is denied during the claims period, the Administrative Committee must notify the claimant in writing. The denial must include the specific reasons for it, the Plan provisions upon which the denial is based, and the claims review procedure. If no action is taken during the claims period, the claim is treated as if it were denied on the last day of the claims period.

6.9 Claims Appeal Procedure. If a Member’s or Beneficiary’s claim is denied and he wants a review, he must apply to the Administrative Committee in writing. That application can include any comment or argument the claimant wants to make. The claimant can either represent himself or appoint a representative, either of whom has the right to inspect all documents pertaining to the claim and its denial. The Administrative Committee can schedule any meeting with the claimant or his representative that it finds necessary or appropriate to complete its review. The request for review must be filed within 90 days after the denial. If it is not, the denial becomes final. If a timely request is made, the Administrative Committee must make its decision, under normal circumstances, within 60 days of the receipt of the request for review. However, if the Administrative Committee notifies the claimant prior to the expiration of the initial review period, it can extend the period of review up to 120 days following the initial receipt of the request for a review. All decisions of the Administrative Committee must be in writing and must include the specific reasons for its action and the Plan provisions on which its decision is based. If a decision is not given to the claimant within the review period, the claim is treated as if it were denied on the last day of the review period.

6.10 Member’s Right to Arbitration. If a Member’s claim is not resolved to his satisfaction under the foregoing provisions of this Article, the Member may elect to have his claim decided by binding arbitration under applicable rules of the American Arbitration Association. The decision in any such arbitration shall be final and binding on the Sponsor, the Administrative Committee, the Member, and all other interested parties.

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ARTICLE 7

COMMITTEE

7.1 Appointment, Term, Resignation, and Removal. The Board of Directors shall appoint a Administrative Committee to administer the Plan. The members of the Administrative Committee shall serve until their resignation, death, or removal. Any member of the Administrative Committee may resign at any time by giving written notice of such resignation to the Sponsor. Any member of the Administrative Committee may be removed by the Board of Directors, with or without cause. Vacancies in the Administrative Committee arising by resignation, death, removal, or otherwise shall be filled by such persons as may be appointed by the Board of Directors.

7.2 Powers. The Administrative Committee shall have exclusive responsibility for the administration of the Plan, according to the terms and provisions thereof, and shall have all powers necessary to accomplish such purposes, including, but not by way of limitation, the right, power, and authority:

(i) To make rules and regulations for the administration of the Plan which are not inconsistent with the terms and provisions thereof, provided such rules and regulations are evidenced in writing;

(ii) To construe all terms, provisions, conditions, and limitations of the Plan; and its construction thereof made in good faith and without discrimination in favor of or against any Member shall be final and conclusive on all persons;

(iii) To correct any defect, supply any omission, or reconcile any inconsistency which may appear in the Plan in such manner and to such extent as it shall deem expedient to carry out the intent of the Sponsor in establishing and maintaining the Plan, and its judgment in such matters shall be final and conclusive as to all persons;

(iv) To select, employ, and compensate from time to time such consultants, actuaries, accountants, attorneys, and other agents and employees as the Administrative Committee may deem necessary or advisable for the proper and efficient administration of the Plan, and any agent, firm, or employee so selected by the Administrative Committee may be a disqualified person, but only if the requirements of Section 4975(d) of the Code have been met;

(v) To resolve all questions relating to the eligibility of Employees to become Members, and to determine the Member’s vested percentage and the amount of compensation upon which the benefits of each Member shall be calculated;

(vi) To resolve all controversies relating to the administration of the Plan, including but not limited to (a) differences of opinion arising between the Employer and a Member, and (b) any questions it deems advisable to determine in order to promote the uniform and nondiscriminatory administration of the Plan;

(vii) To direct and instruct the Employer in all matters relating to the payment of Plan benefits and to determine a Member’s entitlement to a benefit should he appeal a denial of his claim for a benefit or any portion thereof; and

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(viii) To delegate such of its clerical and recordation duties under the Plan as it may deem necessary or advisable for the proper and efficient administration of the Plan.

7.3 Organization. The Administrative Committee shall select from among its members a chairman, who shall preside at all of its meetings, and shall select a secretary, without regard as to whether that person is a member of the Administrative Committee, who shall keep the minutes of its proceedings and all records, documents, and data pertaining to its supervision of the administration of the Plan.

7.4 Quorum and Majority Action. A majority of the members of the Administrative Committee shall constitute a quorum for the transaction of business, and the vote of a majority of the members present at any meeting shall decide any question brought before that meeting. In addition, the Administrative Committee may decide any question by a vote, taken without a meeting, of a majority of its members.

7.5 Signatures. The chairman, the secretary and any one or more of the members of the Administrative Committee to which the Administrative Committee has delegated the power, shall each, severally, have the power to execute any document on behalf of the Administrative Committee, and to execute any certificate or other written evidence of the action of the Administrative Committee.

7.6 Disqualification of Administrative Committee Members. A member of the Administrative Committee who is also a Member in the Plan shall not vote or act upon any matter relating solely to himself, unless he is the sole member of the Administrative Committee.

7.7 Disclosure to Members. The Administrative Committee shall make available to each Member and Beneficiary for his examination such records, documents, and other data as are required under ERISA, but only at reasonable times during business hours. No Member or Beneficiary shall have the right to examine any data or records reflecting the compensation paid to any other Member or Beneficiary, and the Administrative Committee shall be required to make no data or records available other than those required by ERISA.

7.8 Standard of Performance. The Administrative Committee and each of its members shall act in good faith when carrying out their responsibilities hereunder.

7.9 Liability of Administrative Committee. No member of the Administrative Committee shall be liable for any act or omission of any other member of the Administrative Committee, any Member, or other agent appointed by the Administrative Committee. No member of the Administrative Committee shall be liable for any act or omission on his own part, unless such act or omission is the result of the Administrative Committee member’s gross negligence or willful misconduct. In this connection, each provision hereof is severable and if any provision is found to be void as against public policy, it shall not affect the validity of any other provision hereof.

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7.10 Indemnification of Administrative Committee Members. The Sponsor shall indemnify each member of the Administrative Committee and his heirs, successors, and assigns against all expenses (including, without limitation, taxes of every kind and character, the costs of investigating and responding to claims, the amount of judgments, the amount of settlements made with a view to the curtailment of costs of litigation, attorney’s fees, interest, penalties, and all costs, expenses, losses, and damages of every kind) incurred by such member, his heirs, successors, or assigns in connection with or arising out of his having served as a member of the Administrative Committee.

7.11 Bonding. No member of the Administrative Committee shall be required to give bond for the performance of his duties hereunder unless required by a law which cannot be waived.

7.12 Compensation. The Administrative Committee shall serve without compensation for their services, but shall be reimbursed by the Employers for all expenses properly and actually incurred in the performance of their duties under the Plan.

7.13 Persons Serving in Dual Fiduciary Roles. Any person, group of persons, corporations, firm, or other entity may serve in more than one fiduciary capacity with respect to the Plan.

7.14 Administrator. For all purposes of ERISA, the Administrator of the Plan shall be the Sponsor. The Administrator of the Plan shall have final responsibility for compliance with all reporting and disclosure requirements imposed with respect to the Plan under any federal or state law, or any regulations promulgated thereunder.

7.15 Standard of Judicial Review of Administrative Committee Actions. The Administrative Committee has full and absolute discretion in the exercise of each and every aspect of its authority under the Plan, including without limitation, the authority to determine any person’s right to benefits under the Plan, the correct amount and form of any such benefits, the authority to decide any appeal, the authority to review and correct the actions of any prior administrative committee, and all of the rights, powers, and authorities specified in Sections 6.8, 6.9, and 7.2. Notwithstanding any provision of law or any explicit or implicit provision of the Plan, any action taken, or ruling or decision made, by the Administrative Committee in the exercise of any of its powers and authorities under the Plan shall be final and conclusive as to all persons other than the Sponsor, including without limitation all Members and Beneficiaries, regardless of whether the Administrative Committee or one or more members thereof may have an actual or potential conflict of interest with respect to the subject matter of such action, ruling, or decision. No such final action, ruling, or decision of the Administrative Committee shall be subject to de novo review in any judicial proceeding; and no such final action, ruling, or decision of the Administrative Committee may be set aside unless it is held to have been arbitrary and capricious by a final judgment of a court having jurisdiction with respect to the issue.

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ARTICLE 8

ADOPTION OF PLAN BY OTHER EMPLOYERS

8.1 Adoption Procedure. Any business organization may, with the approval of the Sponsor, adopt this Plan by:

(i) executing an authorized adoption instrument agreeing to be bound as an Employer by all the terms, conditions, and limitations of this Plan except those, if any, specifically described in the adoption instrument; and

(ii) providing all information required by the Administrative Committee.

An adoption may be retroactive to the beginning of a Plan Year if these conditions are complied with on or before the last day of that Plan Year.

8.2 No Joint Venture Implied. The document which evidences the adoption of the Plan by an Employer shall become a part of this Plan. However, neither the adoption of this Plan by an Employer nor any act performed by it in relation to this Plan shall ever create a joint venture or partnership relation between it and any other Employer.

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ARTICLE 9

AMENDMENT AND TERMINATION

9.1 Sponsor’s Right to Amend. Subject to the limitations prescribed by Section 9.2, the Sponsor may at any time and from time to time modify or amend the Plan in whole or in part. Any amendment shall be made by an instrument in writing, executed by the appropriate officer, setting forth the nature of the amendment and its effective date.

9.2 Limitations on Right to Amend. If the Plan is amended in any manner, the nonforfeitable percentage of the balance of each Account (determined as of the later of the date of the adoption of the amendment or of the effective date of the amendment) of each Member shall not be less than such nonforfeitable percentage computed under the Plan without regard to such amendment. No amendment shall decrease the Account balance of a Member. If any Employer is subject to the Securities Act of 1934, the Plan shall not be amended more than once every six months, other than to comport with changes in the Code, ERISA, or the rules thereunder, in any manner that would affect the method of determining the amount, price, and timing of securities of such Employer allocated to the Accounts of officers and directors or categories of officers and directors. Except as provided in the immediately following sentence, the elimination of one or more forms of benefit payment, whether with respect to benefits attributable to service before the amendment or service after the amendment, shall not be prohibited under this Section. No amendment adopted after a Change in Control shall apply to any Member without his express written consent.

9.3 Retroactive Amendments to Meet Labor or Tax Requirements. It is the intention of the Sponsor that distributions under the Plan be deductible under the applicable provisions of the Code; that the Plan meet all requirements of ERISA. The Sponsor shall make such amendments to the Plan as may be necessary to carry out this intention. All such amendments may be made retroactively as limited by the applicable federal law.

9.4 Sponsor’s Right to Terminate. The Sponsor may terminate the Plan by appropriate action evidenced in writing and delivered to the other Employers. The Plan shall terminate as to an Employer upon the happening of any of the following events:

(i) Delivery to the Sponsor of a notice of termination executed by the Employer, based on the action described in the preceding sentence and specifying the date as of which the Plan shall terminate;

(ii) Adjudication of the Employer as a bankrupt, general assignment by the Employer, based on the action described in the preceding sentence, to or for the benefit of creditors, or cessation of business of the Employer; and

(iii) Termination of the business of the Employer or the transfer by the Employer of all or substantially all of its assets and business without provision for continuing the Plan, except that, in any such event, the Plan may be continued by any successor to the Employer or any transferee of all or substantially all of its assets and business, and in the event election is made to continue the Plan, such successor or transferee shall automatically become substituted for the Employer hereunder upon receipt by the Sponsor of written notice of such election and delivery of the Sponsor’s written consent to the successor or transferee.

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ARTICLE 10

MISCELLANEOUS

10.1 Establishment of Trust Fund not Required. No property is required to be set aside nor is a trust fund of any kind required to be established to secure the rights of any Member hereunder. All amounts credited to the Member’s Account at any time shall be solely a charge upon the Member’s Employer and all Members shall at all times rely solely upon the general credit of their respective Employers for the payment of any benefit which becomes payable hereunder. Notwithstanding the foregoing provisions of this Section, the Sponsor may, in its discretion, contribute funds to a grantor trust for the purpose, as it deems appropriate, of paying benefits under the Plan. Such trust may be irrevocable, but assets of the trust shall be subject to the claims of creditors of the Employer. To the extent any benefits provided under the Plan are actually paid from the trust, the Employer shall have no further obligation with respect thereto, but to the extent not so paid, such benefits shall remain the obligation of and shall be paid by, the Employer. The Members shall have the status of unsecured creditors insofar as their legal claim for benefits under the Plan and the Members shall have no security interest in the grantor trust.

10.2 Plan Does Not Constitute an Employment Contract. The adoption and maintenance of the Plan shall not be deemed to be a contract between any Employer and any Member. Nothing contained herein shall be deemed to give any Member the right to be retained in the employment of the Employer or to interfere with the rights of the Employer to discharge any Member at any time, nor shall it interfere with the Member’s right to terminate his employment at any time.

10.3 Spendthrift Clause. Except as otherwise specifically provided, no principal or income payable or to become payable under the Plan shall be subject to anticipation or assignment by any Member or by any Beneficiary or be subject to attachment by, or to the interference or control of, any creditor of a Member or Beneficiary, or be taken or reached by any legal or equitable process in satisfaction of any debt or liability of a Member or Beneficiary prior to its actual receipt by such Member or Beneficiary. The interests of the Employer in any assets, earnings and profits related to the Plan shall not be subject to garnishment, attachment, levy, or execution of any kind for debts or defaults of any person, natural or legal, having an interest in the Plan. Any attempted conveyance, transfer, assignment, mortgage, pledge, or encumbrance of an interest in the Plan by a Member or Beneficiary, prior to distribution as herein provided, shall be absolutely and wholly void, regardless of when such conveyance, transfer, assignment, mortgage, pledge or encumbrance is intended to take place or become effective. The Employer shall never under any circumstances be required to recognize any conveyance, transfer, assignment, mortgage, or pledge by a Member or Beneficiary hereunder, of any interest in the Plan, and the Employer shall never be required to pay any money or thing of value thereon or therefor to any creditor of a Member or Beneficiary, nor upon any debt created by a Member or Beneficiary for any cause whatsoever. This Section shall also apply to the creation, assignment, or recognition of a right to any benefit payable with respect to a Member pursuant to a domestic relations order, unless (i) such order is determined to be a Qualified Domestic Relations Order, or (ii) such order was entered before January 1, 1985, and the Administrative Committee determines that sufficient uncontroverted information is available to permit such order to be treated in the same manner as a Qualified Domestic Relations Order.

10.4 Form of Elections. Except as otherwise specifically provided in the Plan, in order to be effective, any election by a Member or Beneficiary that is required or permitted under the Plan shall be in writing on a form provided or approved by the Administrative Committee, signed by the person entitled to make the election, and filed with the Administrative Committee. Any permitted revocation of such an election shall be irrevocable except to the extent specifically provided otherwise in the applicable provision of the Plan.

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10.5 Governing Laws; Parties to Legal Actions. The provisions of the Plan shall be construed, administered and enforced according to the laws of the United States and, to the extent not preempted, the state of Texas. The Employer may at any time initiate any legal action or proceeding for the determination of any questions, including questions of construction which may arise, or for instruction, and the only necessary parties to such action or proceeding shall be the Employer, except that any other person or persons may be included as parties defendant at the election of the Employer.

10.6 Plan Document Controlling. In the event that there is a discrepancy between the terms of this document and the terms of any policy or contract issued under the Plan, the provisions of this document shall control.

10.7 Severability of Clauses. Each provision of the Plan Document is severable and if any provision is found to be unenforceable for any reason, it shall not affect the validity of any other provision.

10.8 Cross References. All Section references are to Sections of this document, unless otherwise specified.

10.9 Securities Law Considerations.

THE PLAN AND PARTICIPATIONS THEREUNDER HAVE NOT BEEN REGISTERED WITH OR APPROVED BY THE UNITED STATES SECURITIES AND EXCHANGE COMMISSION OR THE SECURITIES REGULATORY AUTHORITY OF ANY STATE, NOR HAS SUCH COMMISSION OR THE REGULATORY AUTHORITY OF ANY STATE PASSED UPON THE ACCURACY OR ADEQUACY OF THE PLAN DOCUMENT. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.

THIS PLAN AND PARTICIPATIONS THEREUNDER ARE BEING OFFERED IN RELIANCE UPON AN EXEMPTION FROM REGISTRATION PROVIDED BY REGULATION D UNDER THE SECURITIES ACT. NO PUBLIC OR OTHER MARKET WILL DEVELOP FOR THE PLAN OR PARTICIPATION THEREUNDER.

THE PLAN AND PARTICIPATIONS THEREUNDER ARE SUBJECT TO RESTRICTIONS ON TRANSFERABILITY AND RESALE AND MAY NOT BE TRANSFERRED OR RESOLD UNLESS REGISTERED UNDER THE SECURITIES ACT OF 1933 AND APPLICABLE STATE SECURITIES LAWS OR PURSUANT TO AN EXEMPTION FROM REGISTRATION THEREUNDER.

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PARTICIPATIONS IN THE PLAN WILL BE ILLIQUID. AS A RESULT, PROSPECTIVE PARTICIPANTS SHOULD INVEST IN THE PLAN ONLY IF THEY CAN BEAR FOR AN INDEFINITE PERIOD OF TIME THE ECONOMIC RISKS ASSOCIATED WITH AN ALIQUID INVESTMENT.

IN MAKING AN INVESTMENT DECISION, PROSPECTIVE PLAN PARTICIPANTS MUST RELY ON THEIR OWN EXAMINATION OF THE PLAN AND THE TERMS THEREOF, INCLUDING THE MERITS AND RISKS INVOLVED. PARTICIPATION IN THE PLAN HAS NOT BEEN RECOMMENDED BY ANY FEDERAL OR STATE SECURITIES COMMISSION OR REGULATORY AUTHORITY.

PROSPECTIVE PARTICIPANTS ARE NOT TO CONSTRUE THE CONTENTS OF THIS PLAN DOCUMENT AS INVESTMENT, TAX OR LEGAL ADVICE. THIS PLAN DOCUMENT, AS WELL AS THE NATURE OF THE INVESTMENT, SHOULD BE REVIEWED BY EACH PROSPECTIVE PARTICIPANT’S INVESTMENT AND TAX ADVISER, ACCOUNTANT AND LEGAL COUNSEL. EACH PARTICIPANT WILL BE REQUIRED TO REPRESENT IN SUCH PARTICIPANT’S LETTER OF PARTICIPATION THAT SUCH PARTICIPANT UNDERSTANDS THE RISKS ASSOCIATED WITH AN INVESTMENT IN THE PLAN, IS CAPABLE OF BEARING SUCH RISKS AND HAS NOT RELIED UPON THE PLAN’S SPONSOR FOR INVESTMENT, TAX, ACCOUNTING OR LEGAL ADVICE, AND THAT THE PARTICIPANT HAS RELIED ONLY ON SUCH PARTICIPANT’S OWN ADVISERS FOR SUCH ADVICE.

THIS PLAN DOCUMENT HAS BEEN PREPARED SOLELY FOR THE BENEFIT OF PROSPECTIVE PARTICIPANTS IN THE PLAN AND CONSTITUTES AN OFFER ONLY TO THE PROSPECTIVE PARTICIPANT TO WHOM IT WAS DELIVERED BY THE SPONSOR. EACH PROSPECTIVE PLAN PARTICIPANT, BY ACCEPTING DELIVERY OF THIS PLAN DOCUMENT, AGREES TO RETURN IT AND ALL OTHER RELATED DOCUMENTS TO THE SPONSOR AT ITS REQUEST IF THE PROSPECTIVE PARTICIPANT DECIDES NOT TO INVEST IN THE PLAN, IF THE PROSPECTIVE PARTICIPANT’S SUBSCRIPTION IS NOT ACCEPTED OR IF THE PLAN IS TERMINATED.

THIS PLAN DOCUMENT SHALL NOT BE CONSIDERED AN OFFER BY THE PLAN, THE PLAN SPONSOR OR ANY OTHER PERSON IN ANY JURISDICTION IN WHICH SUCH AN OFFER IS UNLAWFUL OR PROHIBITED.

IN WITNESS WHEREOF, the Sponsor has executed this Agreement this 8 day of March, 2001, to be effective as of January 1, 2001, except as otherwise specified or as otherwise required to comply with applicable provisions of the Code, any statute amending the Code, or any other applicable statute, regulation, or ruling.

ATWOOD OCEANICS, INC.
By	/s/ John Irwin
	President

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EX-10.24

Exhibit 10.24

FIRST AMENDMENT TO

ATWOOD OCEANICS BENEFIT EQUALIZATION PLAN

THIS AMENDMENT, by Atwood Oceanics, Inc., a Texas corporation (the “Sponsor”),

W I T N E S S E T H:

WHEREAS, the Sponsor has previously executed the Plan known as “Atwood Oceanics Benefit Equalization Plan” (the “Plan”);

WHEREAS the Sponsor has the right to amend the Plan; and

WHEREAS, the Sponsor has determined that the Plan should be amended in the manner hereinafter set forth;

NOW, THEREFORE, the Plan is amended as follows:

1. Section 1.9 is amended to read in its entirety as follows:

1.9 Change in Control. “Change in Control” shall mean a change in the ownership or effective control of the Employer or in the ownership of a substantial portion of the assets of the Employer, in accordance with Section 409A of the Code and any rules and regulations promulgated thereunder.

2. Section 3.4 is amended by deleting the last sentence thereof.

3. Sections 6.1 and 6.2 are amended to read in their entirety as follows:

6.1 Time of Distribution. In the event of the Member’s Separation other than on account of death, each Member shall begin receiving his distribution six months following the Member’s Separation other than on account of death. In the event of a Change in Control, each Member shall receive a distribution as soon as practical after such Change in Control. In the event of Separation on account of death, each Beneficiary shall receive a distribution as soon as practical after the Member’s death.

6.2 Distribution Method. Distributions shall be paid in cash. Distributions made on account of Separation other than on account of death shall be made in equal annual installments for a period of five years. Distributions made on account of a Change in Control or Separation on account of death shall be made in the form of a single sum.

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IN WITNESS WHEREOF, Atwood Oceanics, Inc. has executed this Amendment this 14 day of December, 2005 to be effective January 1, 2005 or as otherwise required to comply with applicable provisions of the Code, any statute amending the Code, or any other applicable statute, regulation, or ruling.

ATWOOD OCEANICS, INC.
By	/s/ John Irwin
	President

2

EX-10.25

Exhibit 10.25

SECOND AMENDMENT TO

ATWOOD OCEANICS BENEFIT EQUALIZATION PLAN

THIS AMENDMENT, by Atwood Oceanics, Inc., a Texas corporation (the “Sponsor”),

W I T N E S S E T H:

WHEREAS, the Sponsor has previously executed the Plan known as “Atwood Oceanics Benefit Equalization Plan” (the “Plan”);

WHEREAS the Sponsor has the right to amend the Plan; and

WHEREAS, the Sponsor has determined that the Plan should be amended in the manner hereinafter set forth;

NOW, THEREFORE, the Plan is amended as follows:

1. Section 1.2 is amended in its entirety to read as follows:

1.2 Active Member. “Active Member” shall mean an individual designated as such by the President of the Sponsor.

2. Section 1.18 is amended in its entirety to read as follows:

1.18 Eligible Class. “Eligible Class” shall mean, with respect to a Plan Year, all Employees who receive compensation from the Sponsor in excess of the dollar limit in effect with respect to the Retirement Plan for such Plan Year under section 401(a)(17) of the Code.

3. Section 2.1 is amended in its entirety to read as follows:

2.1 Designation of Active Members by President. The President of the Sponsor may designate from time to time such members of the Eligible Class as he shall from time to time determine to be Active Members, provided that there shall not be more than 20 Active Members at any time. An Active Member shall continue as such until the earlier of (i) the date the individual ceases to be a member of the Eligible Class, or (ii) the date specified by the President of the Sponsor as the date on which the individual shall no longer be an Active Member.

4. Section 2.2 is amended in its entirety to read as follows:

2.2 Commencement of Participation. An Employee shall become a Member on the later of (i) the effective date of the adoption of the Plan by such individual’s Employer, or (ii) the date on which such individual is first designated as an Active Member by the President of the Sponsor.

5. Section 2.4 is amended in its entirety to read as follows:

2.4 Recommencement of Participation by Former Members. A former Member shall again become a Member on the date, if any, on which such individual is again designated as an Active Member by the President of the Sponsor.

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IN WITNESS WHEREOF, Atwood Oceanics, Inc. has executed this Amendment this 4th day of December, 2008 to be effective October 1, 2008, or as otherwise required to comply with applicable provisions of the Code, any statute amending the Code, or any other applicable statute, regulation, or ruling.

ATWOOD OCEANICS, INC.
By	/s/ John Irwin
	President

2

EX-10.26

Exhibit 10.26

THIRD AMENDMENT TO

ATWOOD OCEANICS BENEFIT EQUALIZATION PLAN

THIS AMENDMENT, by Atwood Oceanics, Inc., a Texas corporation (the “Sponsor”),

W I T N E S S E T H:

WHEREAS, the Sponsor has previously executed the Plan known as “Atwood Oceanics Benefit Equalization Plan” (the “Plan”);

WHEREAS the Sponsor has the right to amend the Plan; and

WHEREAS, the Sponsor has determined that the Plan should be amended in the manner hereinafter set forth;

NOW, THEREFORE, the Plan is amended as follows:

1. The recitals are amended in their entirety to read as follows:

WHEREAS, the Sponsor desires to establish a program that will compensate for certain limits on elective deferrals and employer matching contributions imposed on certain executives and other highly compensated managers under the Atwood Oceanics Retirement Plan and the Atwood Oceanics Pacific Retirement Plan;

WHEREAS, the Sponsor desires to provide the opportunity for certain executives and other highly compensated managers to accumulate supplemental funds for retirement or special needs prior to retirement through the deferral of portions of their compensation; and

WHEREAS, the plan hereby established is intended to constitute an unfunded plan of deferred compensation for a select group of management or highly compensated employees;

2. Section 3.1 is amended, effective January 1, 2005, in its entirety to read as follows:

3.1 Deferral Agreements. A Deferral Agreement shall be an agreement in a form satisfactory to the Administrative Committee to prospectively receive one or more items of compensation from the Employer in a reduced amount and to have the Administrative Committee credit an amount equal to the amount of the reduction to the Member’s Account. The Deferral Agreement shall specify (i) whether any amounts shall be deferred under this Plan as 401(k) Spillover Deferrals, and (ii) the amount, if any, of the Member’s Regular Deferral. Any such Deferral Agreement shall be revocable or irrevocable in accordance with its terms, provided that no revocation shall be effective prior to the Deferral Agreement Effective Date that would apply if the revocation were treated as a new Deferral Agreement or permit payment to the Member of any amount deferred prior to the date of revocation. A Member shall be entitled to prospectively modify his Deferral Agreement at least once a year. The Administrative Committee shall establish and announce to the Members the rules governing the administration of Elective Deferrals, including any limitations upon the amount that may be deferred and the procedures for and any limitations upon a Member’s right to revoke or change his designation. Elective Deferrals may be made by periodic payroll deductions or by other methods, as determined from time to time by the Administrative Committee.

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3. Section 9.1 is amended, effective December 1, 2008, in its entirety to read as follows:

9.1 Sponsor’s Right to Amend. Subject to the limitations prescribed by Section 9.2, the Sponsor may at any time and from time to time modify or amend the Plan in whole or in part. In addition, the President of the Sponsor may at any time and from time to time modify or amend the Plan in any manner that is not expected to substantially increase the number of Members, materially increase the administrative costs of the Plan, or have a material financial effect on any Employer. Any amendment shall be made by an instrument in writing, executed by the appropriate officer, setting forth the nature of the amendment and its effective date.

IN WITNESS WHEREOF, Atwood Oceanics, Inc. has executed this Amendment this 4th day of December, 2008 to be effective October 1, 2008, except as otherwise specified or as otherwise required to comply with applicable provisions of the Code, any statute amending the Code, or any other applicable statute, regulation, or ruling.

ATWOOD OCEANICS, INC.
By	/s/ John Irwin
	President

2

EX-10.27

Exhibit 10.27

FOURTH AMENDMENT TO

ATWOOD OCEANICS BENEFIT EQUALIZATION PLAN

THIS AMENDMENT, by Atwood Oceanics, Inc., a Texas corporation (the “Sponsor”),

W I T N E S S E T H:

WHEREAS, the Sponsor has previously executed the Plan known as “Atwood Oceanics Benefit Equalization Plan” (the “Plan”);

WHEREAS the Sponsor has the right to amend the Plan; and

WHEREAS, the Sponsor has determined that the Plan should be amended in the manner hereinafter set forth;

NOW, THEREFORE, the Plan is amended as follows:

1. Section 3.1 is amended in its entirety to read as follows:

3.1 Deferral Agreements. A Deferral Agreement shall be an agreement in a form satisfactory to the Administrative Committee to prospectively receive one or more items of compensation from the Employer in a reduced amount and to have the Administrative Committee credit an amount equal to the amount of the reduction to the Member’s Account. The Deferral Agreement shall specify (i) whether any amounts shall be deferred under this Plan as 401(k) Spillover Deferrals, (ii) the amount, if any, of the Member’s Regular Deferral, and (iii) the time and form of payment of amounts attributable to such Elective Deferrals. Any such Deferral Agreement shall be revocable or irrevocable in accordance with its terms, provided that no revocation shall be effective prior to the Deferral Agreement Effective Date that would apply if the revocation were treated as a new Deferral Agreement or permit payment to the Member of any amount deferred prior to the date of revocation. A Member shall be entitled to prospectively modify his Deferral Agreement at least once a year. The Administrative Committee shall establish and announce to the Members the rules governing the administration of Elective Deferrals, including any limitations upon the amount that may be deferred and the procedures for and any limitations upon a Member’s right to revoke or change his designation. Elective Deferrals may be made by periodic payroll deductions or by other methods, as determined from time to time by the Administrative Committee.

2. Section 6.1 is amended in its entirety to read as follows:

6.1 Distribution Methods Available. Distributions shall be paid in cash under either of the following distribution methods:

(a) a single sum payment; or

(b) a maximum of ten annual installments. Each installment after the first shall be paid on the anniversary of the payment of the first installment. The Member’s Account from which such installments are payable shall continue to be maintained and credited with Investment Gain or Loss. The amount of each installment payment shall be the quotient obtained by dividing the balance of the Account by the number of installment payments remaining. Such balance shall be

1

determined by the Committee as of an administratively convenient date that is within ten days prior to the date on which the installment payment is made. The right to the series of installment payments shall be treated as a right to a series of separate payments for purposes of any Regulation issued under Section 409A of the Code.

3. Section 6.2 is amended in its entirety to read as follows:

6.2 Elections Regarding Time and Form of Distribution. Subject to the terms of this Section, each Member shall have the right to elect the time and form of distribution applicable to the Member or the Member’s Beneficiary under the Plan.

(a) Initial Election. The Member’s initial election shall specify a form of payment available under Section 6.1 and shall specify a date on which such payment shall be made or commenced. Such date shall be determinable by reference to the date of the event entitling the Member or Beneficiary to receive payment. In the event of the Member’s Separation for a reason other than death, such date shall be not less than six months after the date of the Member’s Separation. In the event of the Member’s Separation on account of death or the occurrence of a Change in Control, such date shall be not earlier than the date of the Member’s death or the date of the Change in Control, as the case may be. The Member shall specify the number of installment payments (not in excess of 10) if the annual installment option is elected. Not later than December 31, 2008, each Member shall make an initial election regarding the time and form of payment of all amounts attributable to Elective Deferrals made under the Plan prior to January 1, 2009. Not later than December 31, 2008, each Member shall make an initial election regarding the time and form of payment of all amounts attributable to Elective Deferrals made under the Plan after December 31, 2008 and before the Deferral Agreement Effective Date of any subsequent Deferral Agreement. In each subsequently-filed Deferral Agreement, the Member shall make a new initial election regarding the time and form of payment of amounts attributable to Elective Deferrals made under such Deferral Agreement.

(b) Failure to Make Valid Initial Election. A Member who fails to make a valid and timely election regarding the time and form of distribution applicable to the Member or the Member’s Beneficiary with respect to amounts attributable to any Elective Deferrals shall be deemed to have made the following elections with respect to such amounts:

(i) in the event of the Member’s Separation other than on account of death, payment shall be made or commenced six months following the Member’s Separation;

(ii) in the event of a Change in Control, payment shall be made as soon as practical after such Change in Control;

(iii) in the event of Separation on account of death, payment shall be made to the Beneficiary as soon as practical after the Member’s death; and

(iv) in any event, the distribution shall be made in a single sum payment, except that amounts attributable to Elective Deferrals made prior to January 1, 2009 shall be paid in five annual installments in the event of the Member’s Separation other than on account of death.

(c) Subsequent Changes in Time or Form of Distribution. Each Member shall have the right from time to time to elect that the time and form of distribution applicable to the Member or the Member’s Beneficiary under the Plan be changed. Notwithstanding the immediately preceding

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sentence, (i) any such election shall not take effect until 12 months after the date on which the election is made; and (ii) in the case of an election related to a payment not on account of death, the payment with respect to which such election is made must be deferred for a period of not less than five years from the date such payment would otherwise have been paid.

(d) Manner of Election. An election available under this Section shall be made by executing and properly filing with the Committee the Deferral Agreement or other form or forms approved by the Committee.

IN WITNESS WHEREOF, Atwood Oceanics, Inc. has executed this Amendment this 18^th day of December, 2008 to be effective December 15, 2008, except as otherwise specified or as otherwise required to comply with applicable provisions of the Code, any statute amending the Code, or any other applicable statute, regulation, or ruling.

ATWOOD OCEANICS, INC.
By	/s/ John Irwin
	President

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EX-10.34

Exhibit 10.34

CONTRACT

FOR

THE CONSTRUCTION AND SALE

OF DRILLSHIP

BY AND BETWEEN

ALPHA EAGLE COMPANY

AS BUYER

AND

DAEWOO SHIPBUILDING & MARINE ENGINEERING CO., LTD.

AS BUILDER

I N D E X

ARTICLE I DESCRIPTION AND CLASS	2
1. Definitions	2
2. Certain Interpretive Provisions	3
3. Description	6
4. Dimensions and Characteristics	6
5. Classification	6
6. Rules and Regulations	6
7. Subcontracting of Construction Work	6
8. Registration	6
9. Production Schedule and Erection Plan	6
ARTICLE II CONTRACT PRICE AND TERMS OF PAYMENT	8
1. Contract Price	8
2. Currency	8
3. Terms of Payment	8
4. Method of Payment	8
ARTICLE III ADJUSTMENT OF CONTRACT PRICE	10
1. Delay in Delivery	10
2. Shortfalls in Variable Load Capacity	11
3. Insufficient Speed	11
4. Conclusive Pecuniary Compensation	11
ARTICLE IV APPROVAL OF PLANS AND DRAWINGS AND INSPECTION DURING CONSTRUCTION	12
1. Approval of Plans and Drawings	12
2. Appointment of Representative	13
3. Inspection	13
4. Facilities	14
5. Liability of BUILDER and BUYER	15
6. Responsibility of BUYER	15
ARTICLE V MODIFICATIONS	17
1. Modification of SPECIFICATIONS	17
2. Change in Class and Statutory Requirements	17
3. Substitution of Materials	18
4. Adjustment to Contract Price and Delivery by MODIFICATIONS	18
5. Payment for MODIFICATIONS	19

ARTICLE VI SEA TRIAL	20
1. Notices	20
2. Weather Conditions	20
3. How Conducted	20
4. Method of Acceptance or Rejection	21
5. Effect of Acceptance	21
ARTICLE VII DELIVERY DATE AND DELIVERY	22
1. Delivery	22
2. Time and Place	22
3. When and How Effected	22
4. Documents to be Delivered to BUYER	22
5. Title and Risk	23
6. Removal of DRILLSHIP	23
7. Tender of DRILLSHIP	23
8. Delivery during Dispute	24
ARTICLE VIII DELAYS AND EXTENSION OF TIME FOR DELIVERY (FORCE MAJEURE)	25
1. Causes of Delay	25
2. Definition of Permissible Delay	25
3. Notice of Delay	25
4. Right to Terminate CONTRACT for Excessive Delay	25
ARTICLE IX WARRANTY OF QUALITY	27
1. Guarantee	27
2. Extent of BUILDER’s Responsibility	27
3. Remedy of Defects	27
4. Notice of Defects	28
ARTICLE X REMEDIES OF BUYER	29
1. Defaults of BUILDER	29
2. Remedies	29
3. Notice	30
4. Refund by BUILDER	30
5. Discharge of Obligations	30
ARTICLE XI REMEDIES OF BUILDER	31
1. Definition of Default	31
2. Interest and Charges	31
3. Effect of Default	31
4. Sale of DRILLSHIP	32
5. Remedies Cumulative	33
ARTICLE XII INSURANCE	34
1. Extent of Insurance Coverage	34
2. Application of Recovered Amount	34
3. Redelivery of BUYER’S SUPPLIES	35
4. Termination of BUILDER’s Obligation to Insure	35

ARTICLE XIII DISPUTES AND ARBITRATION	36
1. Proceedings	36
2. Alteration of Delivery of the DRILLSHIP	37
3. Entry in Court	37
ARTICLE XIV RIGHT OF ASSIGNMENT	38
1. Assignment and Transfer	38
2. Associated Costs	38
3. Security Assignments	38
4. Binding Nature	38
ARTICLE XV TAXES AND DUTIES	39
1. Taxes and Duties in Korea	39
2. Taxes and Duties outside Korea	39
ARTICLE XVI PATENTS, TRADEMARKS, COPYRIGHTS, ETC.	40
1. Patents, Trademarks and Copyrights	40
2. General Plans, Specifications and Working Drawings	40
ARTICLE XVII BUYER’S SUPPLIES	41
1. Responsibility of BUYER	41
2. Responsibility of BUILDER	41
3. Return of BUYER’S SUPPLIES	42
ARTICLE XVIII REPRESENTATIVES	43
1. BUYER’s REPRESENTATIVE	43
2. BUILDER’s Representative	43
ARTICLE XIX NOTICE AND LANGUAGE	44
1. Notice	44
2. Language	44
3. Writing	44
ARTICLE XX EFFECTIVE DATE OF CONTRACT	45
ARTICLE XXI INTERPRETATION AND OTHER MATTERS	46
1. Laws Applicable	46
2. Discrepancies	46
3. Entire Agreement	46
4. Amendment	46
5. Headings	46
6. Severability	46
7. Order of precedence of Contract Documents	46
8. Confidentiality	46

9. Public Announcements	47
10. Foreign Corrupt Practices Act	47
11. COUNTERPARTS	48

EXHIBIT A—IRREVOCABLE STAND-BY LETTER OF CREDIT (OPTIONAL)

EXHIBIT B—SCHEDULE OF COMPENSATION LABOR, MATERIAL AND FACILITY UNIT PRICES FOR                         VARIATION WORK

EXHIBIT C—PROTOCOL OF DELIVERY AND ACCEPTANCE

EXHIBIT D—PC SUM

EXHIBIT E—AGREED MODIFICATIONS TO SPECIFICATIONS

CONTRACT

BY THIS CONTRACT made the ___ day of October 2011 by and between ALPHA EAGLE COMPANY, a corporation organized and existing under the laws of Cayman Islands and having its registered office at c/o Maples Corporate Services Limited, P.O. Box 309GT, Ugland House, South Church Street, George Town, Grand Cayman, Cayman Islands (“BUYER”), and DAEWOO SHIPBUILDING & MARINE ENGINEERING CO., LTD., a corporation organized and existing under the laws of the Republic of Korea, having its principal office at 85, Da-dong, Jung-gu, Seoul, Korea (“BUILDER”).

IT IS AGREED AND DECLARED as follows:

BUILDER agrees on a TURNKEY basis to design, construct, build, equip, launch, test, complete, commission and load all BUYER’s equipment located at the SHIPYARD on the DELIVERY DATE one (1) DRILLSHIP more fully described in the SPECIFICATIONS (the “DRILLSHIP”) at BUILDER’s shipyard located at Okpo, Koje Island, Korea (the “SHIPYARD”), and to sell and deliver the same to BUYER, and BUYER hereby agrees to purchase and take delivery of the DRILLSHIP from BUILDER, on the terms and conditions herein set out. Upon DELIVERY, the DRILLSHIP shall be capable of performing its designed functions as stated in the SPECIFICATIONS.

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ARTICLE I

DESCRIPTION AND CLASS

1. Definitions:

(a) “AFFILIATE” of a specified PERSON means any other PERSON that directly or indirectly, through one or more intermediaries, CONTROLS, is CONTROLLED by or is under common CONTROL with the specified PERSON. For the purposes of this definition, “CONTROL,” when used with respect to any specified PERSON, means the possession, directly or indirectly, of the power to direct or cause the direction of the management and policies of such PERSON, whether through the ownership of voting securities, by contract, or otherwise, and the terms “CONTROLLING” and “CONTROLLED” have correlative meanings; provided that, “CONTROL” shall be deemed to exist by virtue of the direct or indirect ownership of fifty percent (50%) or more of the equity securities of such specified PERSON.

(b) “BANKING DAY” means a day on which commercial banks are open for domestic and foreign exchange business in New York and Houston.

(c) “BUYER’S SUPPLIES” means the equipment or materials furnished and delivered to the SHIPYARD by BUYER at its costs for BUILDER to incorporate into the DRILLSHIP.

(d) “CONTRACT” means the agreement of the parties set out in the Articles herein and the Annexes attached thereto.

(e) “DEFAULT INTEREST RATE” means Three Months’ LIBOR + 5% per annum.

(f) “GOVERNMENTAL AUTHORITY” means (a) any domestic or foreign national, state, local, municipal, provisional other government, (b) any instrumentality, subdivision, department, ministry, board, court, governmental tribunal, regulatory or administrative agency, commission or other Governmental Authority, or instrumentality or political subdivision thereof or (c) any quasi-governmental or private authority or body exercising or entitled to exercise any administrative, executive, judicial, legislative, police, regulatory, taxing or other governmental functions or power.

(g) “INTEREST RATE” means Three Months’ LIBOR + 3% per annum.

(h) “LAWS” means any and all applicable laws, statutes, rules, regulations, codes, ordinances, orders, decrees, requirements, judgments, permits, writs and injunctions of any GOVERNMENTAL AUTHORITY to which a specified PERSON or its assets is subject, in each case as amended and in effect from time to time.

(i) “MODIFICATION” means any change in the original CONTRACT intention as deduced from this CONTRACT as a whole and shall include but is not restricted to:

(1) a change or substitution in the character, quality or nature of equipment to be used in any part of the SPECIFICATIONS;

(2) a change in the levels, lines, positions and dimensions of any part of the SPECIFICATIONS; or

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(3) the omission, demolition of, or removal of any part of the WORKS no longer desired by BUYER or BUILDER.

(j) “OPTION AGREEMENT” means that certain Amended and Restated Option Agreement dated as of even date herewith between Atwood Offshore Worldwide Limited, the BUYER’s sole shareholder, and BUILDER.

(k) “ORIGINAL CONSTRUCTION CONTRACT” means that certain Contract for the Construction and Sale of Drillship dated January 28, 2011 between Atwood Oceanics Pacific Limited, as subsequently assigned to Alpha Advantage Company, each an AFFILIATE of BUYER, and BUILDER.

(l) “PC SUM” has the meaning set forth on Exhibit D attached hereto.

(m) “PERSON” means any individual, corporation, association, partnership, joint venture, limited liability company, unincorporated organization, trust, estate, GOVERNMENTAL AUTHORITY or any other entity not a party to this CONTRACT.

(n) “SPECIFICATIONS” means the H3614-FS-R0 dated 28 January 2011 and any additions or amendments thereto pursuant to the ORIGINAL CONSTRUCTION CONTRACT and as hereafter agreed between the parties, as modified by Exhibit E attached hereto.

(o) “TURNKEY” means project management, supervision, skilled and unskilled labor, design, engineering, drawings, work procedures, materials, machinery, tools, working area, equipment, plant, consumables, facilities, classification and regulatory fees, design fees, licenses, permits, transportation, loading and offloading, in-yard movements, scheduling, procurement (not including BUYER’S SUPPLIES), fabrication, assembly, integration, quality control, inspection, mechanical completion, commissioning, tests and trials, and other obligations as are expressly stated as the responsibility of BUYER “or reasonably inferred” to complete the construction and DELIVERY of the DRILLSHIP except for items and obligations expressly stated as BUYER’s responsibilities in this CONTRACT.

(p) “UNIT 1” means the drillship being constructed pursuant to the terms of the ORIGINAL CONSTRUCTION CONTRACT.

(q) “WORKS” means all work necessary to fabricate, construct, launch, equip, complete and test the DRILLSHIP, in accordance with this CONTRACT and the SPECIFICATIONS, and to deliver the DRILLSHIP to BUYER free and clear of all liens, security, interests, claims and encumbrances afloat alongside the SHIPYARD.

2. Certain Interpretive Provisions:

In this Agreement, unless the context otherwise requires:

(a) the singular number includes the plural number and vice versa;

(b) reference to any PERSON includes such PERSON’s successors and assigns but, if applicable, only if such successors and assigns are permitted by this CONTRACT, and reference to a PERSON in a particular capacity excludes such PERSON in any other capacity;

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(c) reference to any gender includes each other gender;

(d) reference to any agreement (including this CONTRACT), document or instrument means such agreement, document or instrument as amended or modified (including any waiver or consent) and in effect from time to time in accordance with the terms thereof and, if applicable, the terms hereof;

(e) reference to any Article, Section, Schedule or Exhibit means such Article, Section, Schedule or Exhibit of or to this CONTRACT, and references in any Article, Section, Schedule, Exhibit or definition to any clause means such clause of such Article, Section, Schedule, Exhibit or definition;

(f) the words “this CONTRACT,” “herein,” “hereby,” “hereunder,” “hereof,” “hereto” and words of similar import are references to this CONTRACT as a whole and not to any particular Article or other provision hereof or thereof, unless expressly so limited;

(g) the word “including” and its derivatives means “including, but not limited to,” and corresponding derivative expressions;

(h) relative to the determination of any period of time, “from” means “from and including,” “to” means “to but excluding” and “through” means “through and including;”

(i) whenever the parties have agreed that any approval or consent shall not be unreasonably withheld, such phrase includes the parties’ agreement that the approval or consent shall not be unreasonably delayed or conditioned;

(j) no consideration shall be given to the captions of the articles, sections, subsections, or clauses, which are inserted for convenience in locating the provisions of this CONTRACT and not as an aid in its construction;

(k) no consideration shall be given to the fact or presumption that one party had a greater or lesser hand in drafting this CONTRACT; every covenant, term and provision of this CONTRACT shall be construed simply according to its fair meaning and not strictly for or against any party (notwithstanding any rule of LAW requiring an agreement to be strictly construed against the drafting party), it being understood that the parties to this CONTRACT are sophisticated and have had adequate opportunity and means to retain counsel to represent their interests and to otherwise negotiate the provisions of this CONTRACT;

(l) examples shall not be construed to limit, expressly or by implication, the matter they illustrate;

(m) a defined term has its defined meaning throughout this CONTRACT, and each Exhibit and Schedule to this CONTRACT, regardless of whether it appears before or after the place where it is defined;

(n) all references to prices, values or monetary amounts refer to United States Dollars, unless expressly provided otherwise;

(o) each Exhibit and Schedule to this CONTRACT is a part of this CONTRACT, but if there is any conflict or inconsistency between the main body of this CONTRACT and any Exhibit or Schedule, the provisions of the main body of this CONTRACT shall prevail; and

4

(p) the word “or” may not be mutually exclusive, and can be construed to mean “and” where the context requires there to be a multiple rather than an alternative obligation.

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3. Description:

The DRILLSHIP shall have BUILDER’s Hull No.3617 and shall be designed, constructed, equipped and completed in accordance with the provisions of this CONTRACT, and the SPECIFICATIONS signed by the parties hereto for identification and made an integral part hereof. The parties agree that the SPECIFICATIONS, including all suppliers, for major equipment under this CONTRACT shall be same as those of UNIT 1 as of the EFFECTIVE DATE, and the plans and drawings of the UNIT 1 completed until the EFFECTIVE DATE shall be used also for the DRILLSHIP. For the sake of clarity, any equipment selection made at any time with respect to either of UNIT 1 or the DRILLSHIP shall be deemed to be made concurrently for the DRILLSHIP or UNIT 1, as applicable.

4. Dimensions and Characteristics:

Details of the DRILLSHIP’s dimension and characteristics including capabilities, length, breadth, depth, draft, machinery, speed and variable load capacity and all other particulars are as shown in the SPECIFICATIONS.

5. Classification:

The DRILLSHIP, including her machinery, equipment and outfit, shall be constructed in accordance with the edition and amendments thereto in force at the date of this CONTRACT of the rules and regulations of and under special survey of Det Norske Veritas (the “CLASSIFICATION SOCIETY”), and shall be distinguished in the CLASSIFICATION SOCIETY’s register by the symbols DYNPOS-AUTRO, CRANE, HLDK-SH, DRILL, BIS or EO. Decisions of the CLASSIFICATION SOCIETY as to compliance or non-compliance of the DRILLSHIP with the said rules and regulations of the CLASSIFICATION SOCIETY shall be final and binding upon the parties.

6. Rules and Regulations:

The DRILLSHIP shall comply with the applicable rules, regulations and requirements of the other regulatory bodies referred to in the SPECIFICATIONS as in effect at the date of this CONTRACT.

7. Subcontracting of Construction Work:

BUILDER may cause part or the majority of the work on the DRILLSHIP to be performed by one or more subcontractors; provided, however, that BUILDER shall obtain BUYER’s consent in respect of any of the work on the DRILLSHIP to be performed by a subcontractor outside of Korea. Where such part of the work is subcontracted, BUILDER shall nevertheless always remain responsible for the performance of the same work under the CONTRACT. BUYER’s rights hereunder shall not be in any way reduced in respect of such subcontracted work.

8. Registration:

The DRILLSHIP shall be registered by the BUYER at its own cost and expense under the LAWS of the Republic of the Marshall Islands at the time of delivery.

9. Production Schedule and Erection Plan:

(a) BUILDER and BUYER have agreed to a production schedule, as follows (the “PRODUCTION SCHEDULE”):

(1) within thirty (30)                     days of the EFFECTIVE DATE,

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BUILDER shall provide BUYER with a level 1 PRODUCTION SCHEDULE;

(2) no later than the date that is six (6) months prior to steel-cutting, BUILDER shall provide BUYER with a level 3 PRODUCTION SCHEDULE;

(3) from steel-cutting to launch of the DRILLSHIP, BUILDER shall provide BUYER with a level 3 PRODUCTION SCHEDULE on a monthly basis; and

(4) from launch of the DRILLSHIP through DELIVERY, BUILDER shall provide BUYER with a level 3 PRODUCTION SCHEDULE on a bi-weekly basis.

(b) The PRODUCTION SCHEDULE shall provide for completion and DELIVERY of the DRILLSHIP by the scheduled DELIVERY DATE and shall be used to measure BUILDER’s progress in performing its obligations under this CONTRACT. The PRODUCTION SCHEDULE may be adjusted from time to time for any delays or extensions of time permitted under this CONTRACT or as otherwise modified by mutual agreement and shall be the basis of interpretation of actual construction progress of the DRILLSHIP.

(c) BUILDER shall also develop an overall DRILLSHIP erection plan that integrates material delivery and assembly actions needed to schedule workflow during all phases of construction. This plan shall encompass sufficient planning data to assure that all phases of construction can be adequately accomplished so as to DELIVER the DRILLSHIP on or before the scheduled DELIVERY DATE.

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ARTICLE II

CONTRACT PRICE AND TERMS OF PAYMENT

1. Contract Price:

The contract price of the DRILLSHIP, including the drilling equipment package and the subsea equipment package, is United States Dollars Five Hundred Fifty Million Three Thousand Ninety Three Thousand (USD 550,393,000.00) plus or minus the amount, if any, set forth in subclause 3, below (the “CONTRACT PRICE”), inclusive of the PC SUM, net receivable by BUILDER, which is exclusive of BUYER’S SUPPLIES. The CONTRACT PRICE shall be subject to upward or downward adjustment as set out in this CONTRACT. Any such adjustment shall be determined prior to DELIVERY of the DRILLSHIP.

2. Currency:

All payments required to be made by either party under this CONTRACT shall be made in United States Dollars.

3. Terms of Payment:

The CONTRACT PRICE shall be paid by BUYER to BUILDER in instalments (“PAYMENT MILESTONE(S)”) as follows:

(a) PAYMENT MILESTONE 1:

United States Dollars One Hundred Fifty Five Million Eight Hundred Twenty Three Thousand Nine Hundred (USD 155,823,900.00) shall be paid within five (5) BANKING DAYS from the date of receipt by BUYER of a copy of the Irrevocable Stand-by Letter of Credit attached hereto as Exhibit A for the DRILLSHIP.

(b) PAYMENT MILESTONE 2 (Final Installment):

United States Dollars Three Hundred Sixty Three Million Five Hundred Eighty Nine Thousand One Hundred (USD 363,589,100.00), plus other sums due to BUILDER under this CONTRACT and any increase or any decrease due to adjustments, if any, to the CONTRACT PRICE as per Article III.1, Article III.2 and Article V shall be paid upon delivery of the DRILLSHIP.

4. Method of Payment:

(a) PAYMENT MILESTONE before DELIVERY:

Upon receipt of a notice from BUILDER, BUYER shall, at its own cost and expense, remit the PAYMENT MILESTONE before DELIVERY of the DRILLSHIP as provided in Article II.3 by telegraphic transfer to the Export-Import Bank of Korea (SWIFT BIC EXIKKRSE) (hereinafter called “K-EXIM”) Account No. 04-029-695 with Deutsche Bank Trust Company Americas, 130 Liberty St., New York, N.Y.10006 U.S.A. (SWIFT BIC BKTRUS33) or to the account of a bank designated by the BUILDER (“BUILDER’S BANK”) as indicated by BUILDER at least two (2) BANKING DAYS before the due date thereof in favor of Daewoo Shipbuilding & Marine Engineering Co., Ltd. under advice by authenticated SWIFT Message or telex to K-EXIM by remitting bank.

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(b) PAYMENT MILESTONE on DELIVERY:

PAYMENT MILESTONE 2 shall be payable upon DELIVERY of the DRILLSHIP (as provided in Article II.3) by telegraphic transfer to the account of K-EXIM with Deutsche Bank Trust Company Americas, 130 Liberty St., New York, N.Y.10006 U.S.A. (SWIFT BIC BKTRUS33) or BUILDER’S BANK in favor of Daewoo Shipbuilding & Marine Engineering Co., Ltd., under advice by authenticated SWIFT Message to K-EXIM or BUILDER’S BANK by the remitting bank, against presentation by BUILDER to K-EXIM or BUILDER’S BANK of a duplicate original copy of the Protocol of Delivery and Acceptance attached hereto as Exhibit C of the DRILLSHIP signed by BUILDER and BUYER.

(c) Prompt payment:

No payment due under this CONTRACT shall be delayed or withheld by BUYER on account of any dispute or disagreement of whatsoever nature arising between the parties hereto or by the reason of reference of the said dispute or disagreement to arbitration provided for in Article XIII; provided, however, that in the event of a dispute with respect to PAYMENT MILESTONE 2, BUYER may provide BUILDER with a surety bond or bank guarantee in the disputed amount.

(d) Expenses and Bank Charges

Expenses and bank charges outside of Korea for remitting payments and any taxes, duties, expenses and fees outside of Korea connected with such payment shall be for account of the BUYER. However, bank charges of K-EXIM or BUILDER’S BANK shall be borne by the BUILDER.

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ARTICLE III

ADJUSTMENT OF CONTRACT PRICE

The CONTRACT PRICE shall be subject to adjustment as hereinafter set out in the following circumstances.

1. Delay in DELIVERY:

In the event that DELIVERY is beyond midnight Korean time at the SHIPYARD on the DELIVERY DATE, the BUILDER shall, subject to the provisions of Article VIII.2, pay to the BUYER by way of liquidated damages, which the parties stipulate is a reasonable and genuine pre-estimate of actual damages and, not by way of penalty, for loss of use of the DRILLSHIP, the amounts set out below.

(a) No adjustment shall be made and the CONTRACT PRICE shall remain unchanged for the first fourty five (45) days of delay in DELIVERY of the DRILLSHIP beyond the DELIVERY DATE (ending as of twelve o’clock midnight, Korean time of the forty-fifth (45^th) day of delay).

(b) If the DELIVERY of the DRILLSHIP, for causes for which BUILDER is liable, is delayed more than fourty five (45) days after the DELIVERY DATE, then, in such event, beginning at twelve o’clock midnight of the forty-fifth (45^th) day after the DELIVERY DATE, the liquidated damages, as follows, shall be due at the date of actual DELIVERY of the DRILLSHIP by means of an adjustment to the CONTRACT PRICE:

(1) 46th — 120th day of delay USD 125,000.00 per day; and

(2) 121st — 210th day of delay USD 155,000.00 per day.

However, the total of liquidated damages shall not exceed the amount due to cover a delay of one hundred eighty (180) days counting from midnight of the fourty-fifth (45th) day after the DELIVERY DATE at the above specified rate of reduction.

(c) If such delay in DELIVERY of the DRILLSHIP continues, for which BUILDER is liable, for a period of one hundred eighty (180) days or more from the fourty-sixth (46th) day after the DELIVERY DATE, in such event and after such period has expired, BUYER may, at its option, terminate this CONTRACT in accordance with the provisions of Article X.1(c) or accept the DRILLSHIP with a total reduction in the CONTRACT PRICE equal to five percent (5%) of the CONTRACT PRICE less the PC SUM.

BUILDER may, at any time after the expiration of the aforementioned two hundred and ten (210) days of delay in DELIVERY and if BUYER has not served notice of termination as provided in Article X, notify BUYER of the expected future date for DELIVERY and demand in writing that BUYER shall make an election, in which case BUYER shall, within ten (10) BANKING DAYS after such demand is delivered to BUYER, notify BUILDER of its termination of this CONTRACT or acceptance of the revised future date for DELIVERY. If the DRILLSHIP is not delivered by such revised future date for DELIVERY plus thirty (30) days, BUYER shall have a right to terminate this CONTRACT but without any right to recover any further liquidated damages. If BUYER fails to notify BUILDER of its termination of this CONTRACT as specified above within such ten (10) BANKING DAY period, BUYER shall be deemed to have consented to the DELIVERY of the DRILLSHIP at the future date for DELIVERY proposed by BUILDER.

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(d) For the purpose of this Article III.1, the DELIVERY of the DRILLSHIP shall be deemed to be delayed when and if the DRILLSHIP, after taking into full account of all postponements of the DELIVERY DATE by reason of permissible delays as defined in this CONTRACT, is not delivered by the date upon which the DELIVERY is required under the terms of this CONTRACT.

2. Shortfalls in Variable Load Capacity:

The DRILLSHIP shall on DELIVERY have a variable deck load of at least 22,800 Metric Tons at operating draft (“SPECIFIED OPERATING VARIABLE DECK LOAD”). However, if the actual operating variable deck load of the DRILLSHIP on DELIVERY is reduced by more than five percent (5%) of the SPECIFIED OPERATING VARIABLE DECK LOAD, the CONTRACT PRICE shall be reduced by USD 3,000.00 per Metric Ton for a deficiency in excess of five percent (5%) of the SPECIFIED OPERATING VARIABLE DECK LOAD. If the deficiency in any variable loads as set out in this Article III.2 exceeds ten percent (10%) of the SPECIFIED OPERATING VARIABLE DECK LOAD, BUYER shall have the right to terminate this CONTRACT.

3. Insufficient Speed:

(a) The CONTRACT PRICE of the DRILLSHIP shall not be affected or changed if the actual speed, as determined by sea trials, is less than the guaranteed speed under the SPECIFICATIONS, provided such deficiency in actual speed is not more than four-tenths (4/10) of a knot below the guaranteed speed.

(b) However, as for the deficiency of more than four-tenths (4/10) of a knot in actual speed below the speed guaranteed under this CONTRACT, the CONTRACT PRICE shall be reduced by USD 100,000.00 for each full one-tenth (1/10) of a knot in excess of the said four-tenths (4/10) of a knot of deficiency in speed; provided that fractions of less than one-tenth (1/10) of a knot shall be regarded as a full one-tenth (1/10) of a knot. However, unless the parties agree otherwise, the total amount of reduction from the CONTRACT PRICE shall not exceed the amount due to cover the deficiency of one (1) full knot below the guaranteed speed at the rate of reduction as specified above.

(c) If the deficiency in actual speed of the DRILLSHIP is more than one (1) full knot below the speed guaranteed under this CONTRACT, BUYER, at its option, may, subject to the BUILDER’s right to effect alterations or corrections, cancel this CONTRACT or may accept the DRILLSHIP at a reduction in the CONTRACT PRICE as above provided for one (1) full knot of deficiency only.

4. Conclusive Pecuniary Compensation:

The liquidated damages, being applicable for Articles III.1, III.2 and III.3 hereunder shall be the conclusive pecuniary compensation recoverable in connection with each particular event stated herein, and BUILDER shall not be liable for any additional compensation claimed by BUYER in relation to such particular event and its consequential events.

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ARTICLE IV

APPROVAL OF PLANS AND DRAWINGS AND INSPECTION DURING

CONSTRUCTION

1. Approval of Plans and Drawings:

BUILDER shall submit to BUYER three (3) copies of each of the plans and drawings, the list of which shall be mutually agreed upon between the parties hereto, for its approval. BUYER shall, within seventeen (17) days after receipt thereof, return to BUILDER one (1) copy of such plans and drawings with BUYER’s approval or comments (if any) written thereon, provided always that:

if the REPRESENTATIVE (as hereinafter defined) shall have been sent by BUYER to the SHIPYARD as set out in Article IV.2, BUILDER may submit any remaining plans and drawings to the REPRESENTATIVE for his approval. The REPRESENTATIVE shall, within seven (7) days after receipt thereof, return to BUILDER one (1) copy of such plans and drawings with his approval or comments (if any) written thereon. Approval by the REPRESENTATIVE of the plans and drawings duly submitted to him shall be deemed to be approval by BUYER for all purposes of this CONTRACT.

If the above comments made by BUYER are not clearly specified or detailed, BUILDER shall seek clarification from BUYER, and BUYER shall give its explanation thereto without undue delay and with reasonably sufficient detail. If BUYER fails to comply, BUILDER may place its own interpretation on such comments in implementing the same.

If BUYER or the REPRESENTATIVE shall fail to return the plans and drawings to BUILDER within the time limits as above provided, such plans and drawings shall be deemed to have been approved or confirmed without any comment.

Any approval or absence of approval by BUYER shall not relieve BUILDER of its obligations to build the DRILLSHIP in accordance with the SPECIFICATIONS.

1.1 BUILDER shall also provide the following to BUYER in respect only of the DRILLSHIP of this CONTRACT:

(a) on the DELIVERY DATE, final AutoCAD or similar electronic renderings of the DRILLSHIP as they may apply, and physical drawings to the extent as set forth on Exhibit F; and

(b) no later than six (6) months after the EFFECTIVE DATE, BUILDER shall provide BUYER with the following:

(i) 3D drawings and animations of the DRILLSHIP for BUYER’s marketing purposes, which drawings and animations shall include virtual reality models and still shots of the class of drillships under which the DRILLSHIP and UNIT 1 have been constructed and which meet or exceed the quality of the products provided by Concept Illustration & Animation AS and are similar to the marketing materials provided by Pacific Drilling (collectively, the “ANIMATED RENDERINGS”);

(ii) access to the source code of or other raw materials related to the ANIMATED RENDERINGS, limited to that of drillship itself, to permit BUYER to manipulate the same for its external or internal purposes; and

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(iii) a worldwide, irrevocable license to utilize the ANIMATED RENDERINGS for BUYER’s external and internal purposes;

provided, however, that BUILDER may elect to subcontract creation of the ANIMATED RENDERINGS to a third party.

1.2 Without prejudice to and in addition to the obligations by BUYER under Article XXI.8 of this Contract, the BUYER undertakes to the BUILDER that:

A. the BUYER acknowledges that all the items provided by BUILDER under the subparagraph 1.1 of this Article IV, including without limitation the AutoCAD or similar electronic renderings as stated therein (which provisions by BUILDER and the information therein called the “RESTRICTED INFORMATION”), are items included in the List of Korea’s Core Shipbuilding Technologies, which Korean Governmental Authorities closely monitor to prevent from being divulged to a foreign competitor;

B. the BUYER shall strictly restrict disclosure of the Restricted Information only to the personnel within its organization who need the Restricted Information in electronic form for safe operation of the DRILLSHIP, without disclosing the Restricted Information to any other PERSON;

C. the BUYER indemnifies the BUILDER against any and all losses, costs, damages, liabilities or claims that arise out of or in connection with any failure by BUYER to comply with its obligations as set forth in the aforementioned subparagraph B.

2. Appointment of REPRESENTATIVE:

BUYER shall in due time despatch to and maintain at the SHIPYARD, at BUYER’s own cost and expense, up to a maximum of five (5) representative(s) (the “REPRESENTATIVE” or the “REPRESENTATIVES”) who shall be duly authorized in writing by BUYER to act on behalf of BUYER in connection with modifications of the SPECIFICATIONS, adjustment of the CONTRACT PRICE and the DELIVERY DATE, confirmation of the PRODUCTION SCHEDULE, approval of the plans and drawings, attendance to the tests and inspections relating to the DRILLSHIP, her machinery, equipment and outfit and any other matters for which such REPRESENTATIVE is authorized by BUYER.

3. Inspection:

(a) The necessary tests and inspections of the DRILLSHIP, her machinery, equipment and outfit either as required by the CLASSIFICATION SOCIETY or by other applicable regulatory bodies or as agreed by the parties hereto, shall be carried out by the CLASSIFICATION SOCIETY, other regulatory bodies and/or an inspection team of BUILDER throughout the entire period of construction, in order to ensure that the construction of the DRILLSHIP is duly performed in accordance with this CONTRACT and the SPECIFICATIONS. During construction of the DRILLSHIP the REPRESENTATIVE shall have the right to attend such tests and inspections of the DRILLSHIP, her machinery and equipment as mutually agreed between BUYER and BUILDER.

(b) BUILDER shall give a reasonable advance notice to the REPRESENTATIVE of the date and place of such tests, trials and inspections which may be attended by him. Failure by the REPRESENTATIVE to be present at such tests, trials and inspections after due notice to him as aforesaid shall be deemed to be a waiver of the REPRESENTATIVE’s right to be present. In the event that BUILDER needs an

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inspection for coating work to be made during non-working hours for smooth progress of work, the REPRESENTATIVE shall exercise his best endeavours to attend such inspection provided that BUILDER has given a reasonable advance notice to the REPRESENTATIVE.

(c) In working hours during construction of the DRILLSHIP until DELIVERY thereof, the REPRESENTATIVE shall, subject to the reasonable requirements of the SHIPYARD’s work program and safety control, be permitted free and ready access to the DRILLSHIP, her machinery and equipment, and to any other place where work on the DRILLSHIP is being done, or materials are being processed or stored in connection with the construction of the DRILLSHIP, including the yards, workshops, stores and offices of BUILDER, and the premises of subcontractors of BUILDER, who are doing work or storing materials in connection with the DRILLSHIP’s construction.

(d) If the REPRESENTATIVE discovers any construction, material or workmanship which he considers not to conform to the requirements of this CONTRACT and/or the SPECIFICATIONS, the REPRESENTATIVE shall promptly give BUILDER a notice in writing specifying the alleged non-conformity. Upon receipt of such notice from the REPRESENTATIVE, BUILDER shall correct such non-conformity, if BUILDER agrees to his view. Any disagreement shall be resolved in accordance with Article XIII.1.

(e) If the CLASSIFICATION SOCIETY, TECHNICAL EXPERT or arbitrator enters a determination in favour of BUYER, then in such case BUILDER shall correct such non-conformity, or if such corrections cannot be made in time to meet the construction schedule for the DRILLSHIP, the then parties shall mutually agree to an adjustment of the CONTRACT PRICE in lieu of such corrections. If the CLASSIFICATION SOCIETY, TECHNICAL EXPERT or the arbitrator enters a determination in favour of BUILDER, then the time for DELIVERY of the DRILLSHIP shall be extended for the period of delay in construction, if any, occasioned by such proceedings, and BUYER shall compensate BUILDER for the proven loss and damages directly incurred by BUILDER under this CONTRACT as a result of such dispute; provided that BUILDER shall be required to take reasonable endeavors to mitigate any losses and/or damages incurred in connection with such dispute and no special or consequential damages may be recouped.

(f) In the event the arbitrator enters a determination in favour of BUYER and determines that such corrections cannot be made prior to the two hundred tenth (210^th) day following the DELIVERY DATE pursuant to Article III.1, then BUYER is entitled to terminate this CONTRACT.

4. Facilities:

(a) BUILDER shall furnish BUYER with office space to accommodate a sixty (60) person site team including a locker room and coffee room equipped with refrigerator and industrial-sized coffee maker; office space to accommodate a sixty (60) person operations team, including a locker room and coffee room equipped with a refrigerator and industrial-sized coffee maker; and each of the above-listed office spaces is to have a minimum of eight (8) private offices, with all desks to be outfitted with an Internet connection and electrical plugs, a large dedicated file room, two (2) meeting rooms able to accommodate fifty (50) persons each and complete with a large table and chairs; one hundred (100) bicycles upon BUYER’s request on a reimbursable basis;

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twenty (20) dedicated parking spaces; bottled water and dispensers upon BUYER’S request on a reimbursable basis; unlimited high speed internet service upon BUYER’S request on a reimbursable basis; four (4) print/scan/email workstations networked and all required paper upon BUYER’s request on a reimbursable basis; a full size plotter and all required paper upon BUYER’s request on a reimbursable basis; storage space for BUYER’S SUPPLIES, with BUILDER to transport from storage and load onto the DRILLSHIP all BUYER’S SUPPLIES. This replaces the facilities requirement under Article IV.4(a) of the ORIGINAL CONSTRUCTION CONTRACT.

(b) Upon exercise of the OPTION (as defined in the OPTION AGREEMENT), BUILDER agrees to furnish BUYER with the office facilities and parking spaces referenced in Article IV.4(a) of the ORIGINAL CONSTRUCTION CONTRACT with a maximum of the amounts set forth therein multiplied by 1.67; provided, however, that upon BUYER’s request on a reimbursable basis a total of one hundred fifty (150) bicycles shall be provided.

Provided, however, that BUYER shall pay telecommunication charges including telephone and email, and shall reimburse costs and expenses for supply and installation of telefax or external telephone lines and other facilities and office equipment and furniture, if any, provided in addition to the above upon BUYER’s request.

5. Liability of BUILDER and BUYER:

(a) The REPRESENTATIVE(S) shall at all times be deemed to be the employee(s) of BUYER and not of BUILDER.

(b) BUILDER agrees to protect, indemnify and hold BUYER free and harmless from and against any and all claims or liabilities (including, without limitation, the cost of the suit and reasonable attorney’s fees) arising in favour of any of BUILDER’s (or its AFFILIATES), employees, agents, officers, invitees, subcontractors (or their servants) or representatives, or any survivor of the foregoing on account of injury to or death of any such parties or damage to any of their property attributable to the actions (or lack thereof) by any such parties in connection with the DRILLSHIP and/or work performed pursuant to this CONTRACT, regardless of whether BUYER and/or its subcontractors and/or others may be wholly, partially or solely negligent or otherwise at fault.

(c) BUYER agrees to protect, indemnify and hold BUILDER and its subcontractors free and harmless from and against any and all claims or liabilities (including, without limitation, the cost of the suit and reasonable attorney’s fees) arising in favour of any of BUYER’s (or its AFFILIATES) employees, agents, officers, invitees, subcontractors (or their servants) or representatives, or any survivor of any of the foregoing on account of injury to or death of any such parties or damage to any of their property except as regards DRILLSHIP attributable to the actions (or lack thereof) by any such parties in connection with the DRILLSHIP and/or work performed pursuant to this CONTRACT, regardless of whether BUILDER or its subcontractors and/or others may be wholly, partially or solely negligent or otherwise at fault.

6. Responsibility of BUYER:

(a) BUYER shall advise BUILDER in advance of the names, experiences and scope of authority of the REPRESENTATIVE(s) and of any other information pertaining to their qualifications. If BUILDER shall have reasonable cause to disapprove of any of the REPRESENTATIVE(s), it shall so advise BUYER and BUYER shall take proper action.

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(b) BUYER shall undertake and assure that its REPRESENTATIVE(s) shall carry out their duties hereunder in accordance with BUILDER’s good practice and in such a way as to avoid any unnecessary increase in building cost or delay in the production schedules of BUILDER. The REPRESENTATIVE(s) shall abide by the work rules and regulations prevailing at the premises of BUILDER and its subcontractors.

(c) BUILDER has the right to request BUYER to replace any REPRESENTATIVE(s) if deemed unsuitable and unsatisfactory for the proper progress of the DRILLSHIP’s construction. If BUYER considers that such BUILDER’s request is justified, BUYER shall effect such replacement as soon as practicable

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ARTICLE V

MODIFICATIONS

1. Modification of SPECIFICATIONS:

(a) Any MODIFICATION or variation of or amendment to the SPECIFICATIONS shall be evidenced by written agreement of the parties hereto (a “CHANGE ORDER”); provided, prior to any MODIFICATION or variation being effected by the BUILDER, the parties shall first agree to alterations in the CONTRACT PRICE, the DELIVERY DATE, lightship weight and other terms and conditions of this CONTRACT and SPECIFICATIONS occasioned by or resulting from such MODIFICATION or variation within seven (7) days from the receipt by BUYER of BUILDER’s proposal. BUILDER has the right to continue construction of the DRILLSHIP on the basis of the SPECIFICATIONS until agreement to the above has been reached.

(b) Notwithstanding the foregoing, BUILDER may also make minor changes to the SPECIFICATIONS including, but not limited to, the dimensions and characteristics of the DRILLSHIP, if found necessary to suit the SHIPYARD’s local conditions and facilities, the availability of materials and equipment, introduction of improved methods or otherwise, provided that BUILDER shall first obtain BUYER’s written (which expression includes e-mail communication) approval, which shall not be unreasonably withheld or delayed.

(c) Upon receiving a written request for MODIFICATION from BUYER, BUILDER will submit to BUYER in writing within twenty one (21) working days a quotation of the change in the CONTRACT PRICE and/or DELIVERY DATE (if any) as a result of alterations and adjustments required to the SPECIFICATIONS.

(d) In the event that BUYER requests any change that would result in a net savings in cost then, subject to negotiations between the parties, the cost saving shall be to BUYER’s benefit and be credited in the final accounts on delivery of the DRILLSHIP.

(e) The parties agree that if any MODIFICATIONS are to be made to both SPECIFICATIONS of the DRILLSHIP and UNIT 1 after the EFFECTIVE DATE of this CONTRACT, the BUILDER’s quotations to adjust the CONTRACT PRICE for such MODIFICATIONS as set forth in Article V.4 shall reflect the amount saved by the BUILDER by reason that the plans or drawings and related engineering works done for the UNIT 1 may be applied or used also for the DRILLSHIP or vice versa. Any CHANGE ORDERS for UNIT 1 agreed to on or before the EFFECTIVE DATE of this CONTRACT shall be treated as part of the SPECIFICATIONS for the DRILLSHIP and not as CHANGE ORDERS.

2. Change in Class and Statutory Requirements

(a) If after the EFFECTIVE DATE, any requirements of the CLASSIFICATION SOCIETY, or of other rules and regulations specified in Article I.4 (or the interpretation thereof by the relevant body) to which the construction of the DRILLSHIP is required to conform, are changed by the CLASSIFICATION SOCIETY or other regulatory bodies authorized to make such changes, the following provisions shall apply unless a waiver of the changed requirement, rule, regulation or interpretation is obtained pursuant to BUYER’s request:

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(1) If the changes are compulsory for the DRILLSHIP, either of the parties hereto, upon receipt of information from the CLASSIFICATION SOCIETY or such other regulatory bodies, shall promptly transmit the same to the other in writing, and BUILDER shall thereupon incorporate such changes into the construction of the DRILLSHIP, provided that BUYER shall first have agreed to adjustments required by BUILDER in the CONTRACT PRICE, the DELIVERY DATE, lightship weight and other terms and conditions of this CONTRACT and the SPECIFICATIONS occasioned by or resulting from such changes within seven (7) days from the receipt by BUYER of BUILDER’s proposal.

(2) If the changes are not compulsory for the DRILLSHIP, but BUYER desires to incorporate any of them into the construction of the DRILLSHIP, BUYER shall notify BUILDER of that intention. BUILDER may accept such changes, provided that such changes will not in its reasonable judgment adversely affect BUILDER’s planning or program in relation to BUILDER’s other commitments, and provided, further, that BUYER shall first have agreed to adjustments required by BUILDER in the CONTRACT PRICE, the DELIVERY DATE, and other terms and conditions of this CONTRACT and the SPECIFICATIONS occasioned by or resulting from such changes within seven (7) days from the receipt by BUYER of BUILDER’s proposal.

(b) Agreements as to any changes under this Article V.2 shall be made in the same manner as provided in Article V.1 for MODIFICATIONS or changes to the SPECIFICATIONS.

(c) Any delay in the construction of the DRILLSHIP caused by BUYER’s delay in making a decision or agreement as above shall constitute a permissible delay under this CONTRACT.

3. Substitution of Materials:

If any of the materials or equipment required by the SPECIFICATIONS or otherwise under this CONTRACT for the construction of the DRILLSHIP are in short supply or cannot be procured in time to maintain the DELIVERY DATE of the DRILLSHIP or are unreasonably high in price as compared with prevailing international market rates, BUILDER may, provided that BUYER shall so agree in writing (which agreement shall not be unreasonably withheld), supply other materials capable of meeting the requirements of the CLASSIFICATION SOCIETY and of the rules, regulations and requirements with which the construction of the DRILLSHIP must comply. Any agreement as to substitution of materials shall be effected in the manner as provided in Article V.1.

4. Adjustment to CONTRACT PRICE and DELIVERY by MODIFICATIONS:

In relation to this Article V, the BUILDER’s quotations in respect of any increase or decrease in the CONTRACT PRICE or any MODIFICATION shall be calculated and submitted on “lump sum” basis for the adjustment to the CONTRACT PRICE. BUYER may contest the reasonableness of BUILDER’s proposal based on a lump sum. In case such contest by BUYER is on reasonable grounds only and BUILDER agrees on the BUYER’s contest and opinion therein, then “time and materials” basis shall be applied to settle pricing of the modifications as defined below in subparagraphs (a) and (b). BUYER’s written notification shall be received by BUILDER within ten (10) days of the date of BUILDER’s quotations.

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(a) Labour costs shall be charged at the agreed hourly rates set out in EXHIBIT B.

(b) The cost of materials and equipment shall be fifteen per cent (15%) in addition to the cost of the BUILDER.

In respect of costs not set out in EXHIBIT B, the BUYER and the BUILDER shall negotiate in good faith to reach an agreement on such price for the modifications. If no agreement is reached within thirty (30) days following receipt by BUILDER of BUYER’s written notification as set out in this paragraph above, the dispute shall be referred to the TECHNICAL EXPERT in accordance with Article XIII.1(b) of this CONTRACT.

Adjustment to the contractual DELIVERY DATE in respect of this Article V shall be subject to effect on critical paths in the DRILLSHIP’s construction and completion.

5. Payment for MODIFICATIONS:

Any sums due to either party under Article V as a result of MODIFICATIONS shall be paid as follows but in any event prior to DELIVERY of the DRILLSHIP:

(a) 50% of any lump sum amount shall be paid upon the agreement of MODIFICATIONS or immediately following a decision by the TECHNICAL EXPERT in accordance with Article XIII.1(b) of this CONTRACT. Any amount based on time and materials shall be paid as accrued.

(b) The remaining 50% of the lump sum amount shall be paid upon the completion of MODIFICATIONS in accordance with the CONTRACT.

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ARTICLE VI

SEA TRIAL

1. Notices:

BUILDER shall notify BUYER at least fourteen (14) days in advance of the expected time and place of the sea trial of the DRILLSHIP, and BUYER shall promptly acknowledge receipt of such notice. Such date shall be confirmed by BUILDER at least five (5) days in advance. However, if the sea trial of the DRILLSHIP is postponed or delayed due to unfavourable weather conditions and/or unreadiness of the DRILLSHIP for the sea trial then BUILDER shall give BUYER as much advance notice of the new date of sea trials as practicable.

BUYER shall have the REPRESENTATIVE(S) and such other persons as BUYER may require in writing on board the DRILLSHIP to witness the sea trial. Failure by the REPRESENTATIVE(S) to attend the sea trial of the DRILLSHIP for any reason whatsoever after due notice to BUYER as above provided shall be deemed to be a waiver by BUYER of its right to have the REPRESENTATIVE(S) on board the DRILLSHIP at the sea trial, and BUILDER may conduct the sea trial without the REPRESENTATIVE(S) being present, provided that a representative of the CLASSIFICATION SOCIETY shall be on board the DRILLSHIP for such sea trial. In such case BUYER shall be obliged to accept the DRILLSHIP on the basis of a certificate of BUILDER, confirmed by the CLASSIFICATION SOCIETY, if applicable, that the DRILLSHIP, on the sea trial, is found to conform to this CONTRACT and the SPECIFICATIONS. In any event BUILDER shall promptly supply to BUYER a copy of all records of tests and trials carried out with regard to the DRILLSHIP, her machinery and equipment.

2. Weather Conditions:

The sea trial shall be carried out under weather conditions which are deemed favourable enough in the reasonable judgement of BUILDER in accordance with the SPECIFICATIONS. In the event of unfavourable weather on the date specified for the sea trial, the same shall take place on the first available day thereafter that weather conditions permit.

It is agreed that if during the sea trial the weather should suddenly become so unfavourable that the satisfactory conduct of the sea trial can no longer be continued, the sea trial shall be discontinued and postponed until the next following favourable day, unless BUYER shall assent in writing to a request from BUILDER to accept the DRILLSHIP on the basis of the sea trial already made before such discontinuance occurred.

Any delay in the sea trial caused by unfavourable weather conditions shall be deemed a permissible delay in the delivery of the DRILLSHIP and shall operate to postpone the DELIVERY DATE by the period of delay involved.

3. How Conducted:

(a) All expenses in connection with the sea trial are for the account of BUILDER, and BUILDER shall provide at its own expense the necessary crew to comply with the requirements of safe navigation. The sea trial shall be conducted in the manner prescribed in the SPECIFICATIONS and shall prove fulfillment of the performance requirements for the sea trial as set forth in the SPECIFICATIONS. The course of the sea trial shall be determined by BUILDER. BUILDER shall have the right to conduct preliminary trials and to repeat any trial whatsoever as it deems necessary.

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(b) Lubricating oils, fuel oils, hydraulic oils and greases or other consumable stores (excluding fresh water) necessary for sea trials shall be supplied by BUILDER, as specified by BUYER prior to conducting such sea trials, and BUYER shall pay BUILDER the documented cost of the lubricating oils, fuel oils, hydraulic oils and grease, inclusive of any quantities remaining in machinery or piping, as applicable, remaining at the time of DELIVERY.

4. Method of Acceptance or Rejection:

(a) If during sea trial any breakdowns occur entailing interruption or irregular performance which can be repaired on board, the trial shall be continued after repairs and be valid in all respects.

(b) As soon as practicable after satisfactory completion of the sea trial, BUILDER shall give BUYER a report thereon and notice that the results of the sea trial indicate conformity of the DRILLSHIP to this CONTRACT and the SPECIFICATIONS. BUYER shall, within seven (7) days after receipt of such notice from BUILDER, notify BUILDER of its acceptance or rejection of the DRILLSHIP on the basis of its conformity with the requirements of this CONTRACT and the SPECIFICATIONS.

(c) If the results of the sea trial indicate that the DRILLSHIP or any part or equipment thereof does not conform to the requirements of this CONTRACT and/or the SPECIFICATIONS, then BUILDER shall take the necessary steps to correct such non-conformity. Upon completion of the correction of such non-conformity, BUILDER shall give BUYER notice thereof. BUYER shall, within seven (7) days after receipt of such notice from BUILDER, notify BUILDER of its acceptance or rejection of the DRILLSHIP. However, BUYER shall not be entitled to reject the DRILLSHIP by reason of any minor or insubstantial defect or non-conformity, which can be judged from the viewpoint of standard building practice as applied to international offshore drillships and which does not effect the issuance of required certificates from the CLASSIFICATION SOCIETY and other regulatory bodies or the operability, function or performance of the DRILLSHIP, but in such case, the BUILDER shall not be released from its obligation to correct and/or remedy such minor or insubstantial non-conformity as far as practicable during the WARRANTY PERIOD.

(d) If BUYER considers that the results of the sea trial indicate that the DRILLSHIP or any part or equipment thereof does not conform to this CONTRACT and/or the SPECIFICATIONS, BUYER shall indicate in detail in a notice of rejection in what respect the DRILLSHIP or any part or equipment thereof, does not in its opinion conform to this CONTRACT and/or the SPECIFICATIONS.

(e) If BUYER fails to notify BUILDER in writing or email confirmed in writing of the acceptance or rejection of the DRILLSHIP together with the reason therefore within the period as provided in Article VI.4 (b) or (c), BUYER shall be deemed to have accepted the DRILLSHIP.

(f) BUILDER may dispute the rejection of the DRILLSHIP by BUYER under this Article VI.4, in which case the matter shall be submitted for final decision by arbitration in accordance with Article XIII.

5. Effect of Acceptance:

Acceptance of the DRILLSHIP as above provided shall be final and binding so far as the conformity of the DRILLSHIP to this CONTRACT and the SPECIFICATIONS is concerned, and shall preclude BUYER from refusing formal delivery of the DRILLSHIP as hereinafter provided, if BUILDER complies with all procedural requirements for DELIVERY of the DRILLSHIP as provided in Article VII.

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ARTICLE VII

DELIVERY DATE AND DELIVERY

1. Delivery:

Delivery of the DRILLSHIP shall occur upon completion of the sea trials in accordance with Article VI above, issuance of a classification certificate (or an interim classification certificate) by the CLASSIFICATION SOCIETY and acceptance of the DRILLSHIP by BUYER (“DELIVERY”).

2. Time and Place:

(a) The DRILLSHIP shall be DELIVERED safely afloat by BUILDER to BUYER at a berth in the SHIPYARD on or before 30 June 2014, except that, in the event of delays in the construction of the DRILLSHIP or any performance required under this CONTRACT due to causes which under the terms of this CONTRACT permit postponement of the date for DELIVERY, the aforementioned date for DELIVERY of the DRILLSHIP shall be postponed accordingly. The aforementioned date, or such later date to which the requirement of DELIVERY is postponed pursuant to such terms, is herein called the “DELIVERY DATE”.

(b) With sixty (60) days prior written notice to BUYER, BUILDER shall be entitled to advance the DELIVERY DATE of the DRILLSHIP by up to sixty (60) days.

(c) The date on which BUILDER shall have actually DELIVERED the DRILLSHIP to BUYER is herein called the “ACTUAL DELIVERY DATE”. In the event the BUYER defaults pursuant to Article XI.1(b), the date on which BUILDER shall have formally tendered the DRILLSHIP for DELIVERY under Article VII.7 shall be regarded as the ACTUAL DELIVERY DATE.

3. When and How Effected:

Provided that BUYER shall have fulfilled all of its obligations under this CONTRACT (including, but not limited to, full payment of the CONTRACT PRICE and settlement of any indebtedness to BUILDER), DELIVERY of the DRILLSHIP shall be duly made hereunder by BUILDER, and such DELIVERY shall be evidenced by a Protocol of Delivery and Acceptance (attached hereto as Exhibit C) signed by the parties hereto, acknowledging DELIVERY of the DRILLSHIP by BUILDER and acceptance thereof by BUYER.

4. Documents to be Delivered to BUYER:

Upon DELIVERY and acceptance of the DRILLSHIP, BUILDER shall deliver to BUYER the following documents which shall accompany the Protocol of Delivery and Acceptance:

(a) Protocol of Trials of the DRILLSHIP made pursuant to the SPECIFICATIONS.

(b) Protocol of Inventory of the equipment of the DRILLSHIP, including spare parts and the like, all as specified in the SPECIFICATIONS.

(c) Protocol of Stores of Consumable Nature referred to under Article VI.3(b), including the original purchase price thereof.

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(d) Certificates including Builder’s Certificate required to be furnished upon delivery of the DRILLSHIP pursuant to this CONTRACT and the SPECIFICATIONS. It is agreed that if, through no fault on the part of BUILDER, the classification certificate and/or other certificates are not available at the time of DELIVERY of the DRILLSHIP, provisional certificates shall be accepted by BUYER, provided that BUILDER shall furnish to BUYER the final certificates as promptly as possible after such final certificates have been issued.

(e) Declaration of Warranty of BUILDER that the DRILLSHIP is delivered to BUYER free and clear of any liens, charges, claims, mortgages, or other encumbrances and in particular, that the DRILLSHIP is absolutely free of all burdens in the nature of imposts, taxes or charges imposed by the Korean GOVERNMENTAL AUTHORITIES, as well as of all liabilities of BUILDER to its subcontractors, employees and crew, and of all liabilities arising from the operation of the DRILLSHIP in trial runs, or otherwise, prior to delivery except as otherwise provided under this CONTRACT.

(f) Drawings and Plans pertaining to the DRILLSHIP as stipulated in the SPECIFICATIONS.

(g) Commercial Invoice.

(h) Bill of Sale.

(i) All operating manuals in BUILDER’s possession to be delivered on the DRILLSHIP.

(j) All other documents required to be provided on or before the DELIVERY by the SPECIFICATIONS.

5. Title and Risk:

Title to and risk of the DRILLSHIP shall pass to BUYER only upon delivery and acceptance thereof having been completed as stated above. Until such delivery is consummated, title to and risk of the DRILLSHIP and her equipment shall remain with BUILDER; provided, however, that, in the event of a BUILDER DEFAULT, BUYER shall have the right to take early DELIVERY of the DRILLSHIP under construction subject to the condition that the parties shall first have reached prior mutual agreement on the terms and conditions for such early DELIVERY, at which time, title to and risk shall pass to BUYER.

6. Removal of DRILLSHIP:

BUYER shall take possession of the DRILLSHIP immediately upon delivery and acceptance thereof and shall remove the DRILLSHIP from the premises of the SHIPYARD within five (5) days after delivery and acceptance thereof is affected. If BUYER shall not remove the DRILLSHIP from the premises of the SHIPYARD within the aforesaid five (5) days, then, in such event BUYER shall pay to BUILDER reasonable mooring and storage charges for the DRILLSHIP.

7. Tender of DRILLSHIP:

If BUYER fails to take DELIVERY of the DRILLSHIP after completion thereof according to this CONTRACT and the SPECIFICATIONS, BUILDER shall have the right formally to tender the DRILLSHIP to BUYER for DELIVERY for the purposes of Article XI.1(b). Such tender shall be made by BUILDER by a notice to BUYER stating that the DRILLSHIP is tendered for delivery pursuant to Article VII.7 of the CONTRACT.

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8. DELIVERY during Dispute.

BUILDER shall not delay or withhold DELIVERY of the DRILLSHIP pending resolution of any dispute between BUYER and BUILDER provided that BUYER has provided BUILDER with a surety bond or bank guarantee in the amount of such dispute in accordance with Article II.4.(c).

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ARTICLE VIII

DELAYS AND EXTENSION OF TIME FOR DELIVERY (FORCE MAJEURE)

1. Causes of Delay:

If at any time before the DELIVERY of the DRILLSHIP, either the construction of the DRILLSHIP or any performance required hereunder is delayed due to Acts of God; acts of princes or rulers; requirements of government authorities; war or acts of war or preparations therefore; blockade, revolution, insurrections, mobilization of armed forces, civil war, civil commotion or riots; vandalism; sabotage; strikes, lockouts or other labour disturbances by such reasons not related to BUILDER or its AFFILIATES; plague or other epidemics; quarantines; flood, typhoons, hurricanes or cyclonic storms; earthquakes; tidal waves; landslides; fires, lightning strikes, or explosions; embargoes; prolonged failure, shortage or restriction of electric current, oil or gas supplies; and delays in deliveries of major parts (inclusive of the drilling equipment package and the subsea equipment package) or performance of major obligations by subcontractors or suppliers by such causes described herein; then and in any such case, the DELIVERY DATE shall be postponed for such period as the DELIVERY of the DRILLSHIP is delayed thereby.

2. Definition of Permissible Delay:

Delay on account of such cause as specified in Articles V.4, VI.2, VIII.1, XI.1, XVII.1 and any other delays of a nature which under the terms of this CONTRACT permit postponement of the DELIVERY DATE shall be understood to be permissible delays, which shall not be subject to adjustment of the CONTRACT PRICE as provided in Article III.1.

3. Notice of Delay:

(a) Within ten (10) days after the commencement of any cause of delay on account of which BUILDER claims that it is entitled under this CONTRACT to a postponement of the DELIVERY DATE, BUILDER shall (if practically possible) notify BUYER of the dates, the cause of delay which has occurred and its expected duration.

(b) Within ten (10) days after the ending of such cause of delay, if practically possible, BUILDER shall notify BUYER in writing of the date such cause of delay ended.

(c) BUILDER shall also notify BUYER of the period by which the DELIVERY DATE is postponed by reason of such cause of delay with all reasonable dispatch after it has been determined. Failure by BUYER to object to BUILDER’s claim for postponement of the DELIVERY DATE within ten (10) days after receipt by BUYER of such notice of claim shall be deemed to be a waiver by BUYER of its right to object to such postponement of the DELIVERY DATE.

4. Right to Terminate CONTRACT for Excessive Delay:

If the total accumulated time of all permissible delays on account of the causes specified in Article VIII.1 (but excluding delays caused by any error or omission on the part of BUYER and any other delays which under the terms of this CONTRACT permit postponement of the DELIVERY DATE) amounts to two hundred and ten (210) days or more, then, in such event, BUYER may terminate this CONTRACT in accordance with the provisions of Article X. If BUYER has not served notice of termination as provided in Article X, BUILDER may, at any time after the said accumulated time justifying termination by BUYER has occurred, notify BUYER of the expected future date for DELIVERY and demand in writing that BUYER shall make an election, in which case BUYER shall, within ten (10) days after such demand is

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delivered to BUYER, notify BUILDER of either its termination of this CONTRACT or its acceptance of the revised future date for DELIVERY specified by BUILDER. If the DRILLSHIP is not DELIVERED by such revised future date, BUYER shall have the same right of termination upon the same terms and conditions as above provided as if the said revised future date for DELIVERY was the DELIVERY DATE as defined in Article VII. If BUYER fails to notify BUILDER of its termination of this CONTRACT as specified above within such ten (10) days period, BUYER shall be deemed to have consented to the DELIVERY of the DRILLSHIP at the revised future date for DELIVERY.

If any termination of the CONTRACT is based on any of the permissible delays on account of the causes specified in this Article VIII.1 of the CONTRACT, no interest shall be payable by BUILDER.

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ARTICLE IX

WARRANTY OF QUALITY

1. Guarantee:

BUILDER warrants that the material and workmanship employed in the construction of the DRILLSHIP shall be free from defects and shall comply with this CONTRACT. Subject to the provisions hereinafter set out, BUILDER undertakes to remedy or replace, free of charge to BUYER, any defects in the DRILLSHIP which are due to defective material and/or improper workmanship on the part of BUILDER and/or its subcontractors, provided that the defects shall appear or be discovered during a period of twelve (12) months after the ACTUAL DELIVERY DATE (the “WARRANTY PERIOD”) if notice thereof is duly given to BUILDER; provided however that the WARRANTY PERIOD shall be extended for a further period of nine (9) months in respect of any work done by BUILDER to remedy any defect under this Article IX. For the purpose of this Article IX, the DRILLSHIP includes her hull, machinery, equipment and gear, but excludes material, machinery and equipment which have been supplied by BUYER.

2. Extent of BUILDER’s Responsibility:

(a) BUILDER shall have no responsibility or liability whatsoever for any defects in the DRILLSHIP other than the defects so specified in Article IX.1, and BUILDER shall not be liable in any circumstances whatsoever for any consequential or special losses, damages or expenses including, but not limited to, loss of time, loss of profit or earnings or demurrage directly or indirectly occasioned to BUYER by reason of the defects specified in Article IX.1 nor owing to repairs or other works done to the DRILLSHIP to remedy such defects.

(b) BUILDER shall not be responsible for any defects in any part of the DRILLSHIP which may subsequent to DELIVERY of the DRILLSHIP have been replaced or in any way repaired by any other contractors (except those approved by BUILDER), nor for any defect which has been caused or aggravated by omission or improper use and maintenance of the DRILLSHIP on the part of BUYER, its servants or agents or by ordinary wear and tear or by perils of the sea, rivers or navigations or by corrosion of the materials or by accidents or fire or by any other circumstances whatsoever beyond the control of BUILDER.

(c) The undertakings contained in this Article shall replace and exclude any other liability, guarantee, warranty and/or condition imposed or implied by LAW, customary, statutory or otherwise, by reason of the construction and sale of the DRILLSHIP by BUILDER for and to BUYER.

3. Remedy of Defects:

(a) BUILDER shall remedy at its expense any defects, against which the DRILLSHIP is warranted under this Article by making all necessary repairs or replacements at the SHIPYARD.

(b) However, if it is impractical to bring the DRILLSHIP to the SHIPYARD, BUYER shall cause the necessary repairs or replacements to be made at another place suitable for the purpose, provided that, in such event, BUILDER shall forward, procure or supply replacement parts or materials to the DRILLSHIP on cost, insurance and freight (“CIF”) terms unless such forwarding or supply thereof to the DRILLSHIP would impair or delay the operation or working schedule of the DRILLSHIP. In this case, BUYER shall be responsible for handling of the

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replacement parts or materials after BUILDER’s CIF delivery. Thereafter, BUYER shall first try to have the defects be remedied by the DRILLSHIP’s crew as far as practically possible, in which case no compensation by BUILDER shall be made to BUYER for the works performed by the DRILLSHIP’s crew.

(1) If BUYER proposes to cause the necessary repairs or replacements to be made to DRILLSHIP at any yard or works other than the SHIPYARD, BUYER shall before doing so, and in any event as soon as possible, give BUILDER notice of the time and place where such repairs will be made. If the DRILLSHIP is not thereby delayed, nor her operation or working schedule thereby materially impaired, BUILDER shall have the right to verify by its own or appointed representative(s) the nature and extent of the defects complained of. BUILDER shall, in such case, promptly advise BUYER after such examination has been completed, of its acceptance or rejection of defects as being covered by the undertakings hereby provided.

(2) Upon BUILDER’s acceptance of defects as justifying remedy under this Article IX.3(b), or upon the final award of an arbitration so determining, BUILDER shall reimburse BUYER the documented expenses incurred by BUYER, at completion of the repair or at the time of final award of an arbitration, as the case may be, but such reimbursement shall not exceed the reasonably estimated cost of carrying out the warranty work at the SHIPYARD.

(c) In any case, the DRILLSHIP shall be taken at BUYER’s risk and expense to the place chosen, ready in all respects for such repairs or replacements and BUILDER shall not be responsible for towage, dockage, wharfage, port charges, inspection and underwater survey costs for defects finding, and anything else incurred in BUYER’s getting and keeping the DRILLSHIP ready for such repairs and replacements.

(d) BUILDER shall have the option to retrieve at its own cost any of the replaced equipment and parts where the defects are remedied in accordance with the provisions of this Article IX.

(e) Any dispute under this Article shall be referred to arbitration in accordance with the provisions of Article XIII.1(b).

4. Notice of Defects:

BUYER shall notify BUILDER in writing of any defects for which a claim is made under this Article IX as promptly as possible after the discovery thereof. BUYER’s notice shall describe the nature and ascertainable extent of the defects and the place at which the DRILLSHIP can be made available for earliest inspection by or on behalf of the BUILDER. BUILDER shall in any event have no obligation in respect of any defects, unless notice of such defects is received by BUILDER not later than fifteen (15) days after expiry of the WARRANTY PERIOD.

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ARTICLE X

REMEDIES OF BUYER

1. Defaults of BUILDER:

The following shall constitute events of default of BUILDER under the CONTRACT (collectively, “BUILDER DEFAULTS”):

(a) BUILDER voluntarily or involuntarily being made a part to any receivership, liquidation, or bankruptcy proceeding (which proceedings are not stayed within thirty (30) days of the service of such proceedings on BUILDER) or becoming insolvent or in the event BUILDER is unable to meet all or part of its financial or other obligations under this CONTRACT, unless as a result of BUYER’s failure to make payments of not less than United States Dollars Five Million (USD 5,000,000.00) as due under this CONTRACT;

(b) BUILDER fails to punctually, duly and fully comply with any of its material obligations (other than those obligations referred to in Article X.1.(a), (c) and (d)) under this CONTRACT and such failure is not cured within thirty (30) days of notice from BUYER or if the default is not reasonably capable of being remedied within thirty (30) days, the failure by BUILDER to commence remedial action within the same thirty (30) day period and to diligently proceed with such action;

(c) The occurrence of any of the deficiencies or delays set out in Article III that entitle BUYER to terminate this CONTRACT; or

(d) Breach of BUILDER’s obligations under Article XXI.10.

2. Remedies:

In the event of a BUILDER DEFAULT, BUYER may at its option elect to proceed on either one of the following options:

(a) terminate this CONTRACT in the manner set out in Article III; or

(b) without prejudice to BUYER’s right to recover liquidated damages for delays or deficiencies pursuant to Article III, BUYER may allow BUILDER to continue to complete the construction of the DRILLSHIP.

BUYER shall indicate its option within thirty (30) days from BUILDER’s request to exercise its option, failing which BUYER is deemed to have waived its right to terminate this CONTRACT.

In the event that BUYER elects to terminate the CONTRACT due to a BUILDER DEFAULT:

(a) BUYER shall notify BUILDER in writing of its intention to do so and such termination shall be effective as of the date when such notice is received by BUILDER.

(b) BUILDER shall refund (together with interest at the DEFAULT INTEREST RATE) to BUYER the full amount of all sums received by BUILDER on account of the DRILLSHIP excluding any PC SUM paid and shall at BUYER’s option and BUILDER’s costs make available the BUYER’S SUPPLIES at the SHIPYARD for

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return to BUYER, alternatively, at BUYER’s option and without obligation on BUYER, in respect of the BUYER’S SUPPLIES pay to BUYER the invoiced cost of same on production by BUYER of reasonable evidence of the costs of purchase of the BUYER’S SUPPLIES.

(c) BUYER shall not in the event of its termination of this CONTRACT be entitled to any liquidated damages for any reason whatsoever.

(d) Upon such refund by BUILDER to BUYER as aforementioned, all obligations, duties and liabilities of each of the parties to the other under this CONTRACT shall be forthwith completely discharged, and the uncompleted DRILLSHIP shall belong to BUILDER and BUYER shall have no further claim on BUILDER.

In the event BUYER elects to allow BUILDER to continue to complete the construction of the DRILLSHIP, BUILDER shall pay BUYER the liquidated damages due pursuant to Article III and BUILDER shall work with BUYER to produce an acceptable schedule for the completion of the remaining work on the DRILLSHIP and work diligently to complete the construction of the DRILLSHIP.

3. Notice:

The payments made by BUYER prior to the DELIVERY of the DRILLSHIP shall be in the nature of advances to BUILDER. If BUYER shall exercise its right of termination of this CONTRACT under Article III.1 or Article VIII.4, then BUYER shall immediately notify BUILDER of its termination of this CONTRACT and such termination shall be effective as of the date when the notice is received by BUILDER.

4. Refund by BUILDER:

Unless BUILDER duly contests any termination by BUYER pursuant to Article XIII, BUILDER shall promptly refund to BUYER the full amount of all sums paid by BUYER to BUILDER on account of the DRILLSHIP.

In such event, BUILDER shall pay BUYER interest at the DEFAULT INTEREST RATE on the amount required herein to be refunded to BUYER, computed from the respective date following the date of receipt by BUILDER of each PAYMENT MILESTONE, instalment or advance payment to the date of remittance of such refund to BUYER by BUILDER; provided, however, that if the said termination by BUYER is made under the provisions of Article III, then in such event BUILDER shall not be required to pay any interest.

As security for the due performance of its obligations under this Article X, BUILDER shall provide BUYER with a transferable Irrevocable Stand-by Letter of Credit issued by K-EXIM or BUILDER’S BANK, in form and substance as annexed hereto, as Exhibit A, which cover the full amount of all sums paid by BUYER to BUILDER on account of the DRILLSHIP less the non-refundable design fee and any interest payable thereon, if a termination will become effective pursuant to this Article.

5. Discharge of Obligations:

Upon such refundment by BUILDER to BUYER, all obligations, duties and liabilities of each of the parties to the other under this CONTRACT shall be forthwith completely discharged.

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ARTICLE XI

REMEDIES OF BUILDER

1. Definition of Default:

BUYER shall be deemed to be in default under this CONTRACT in the following cases:

(a) BUYER fails to pay either of the PAYMENT MILESTONES to BUILDER on their respective due dates pursuant to Article II.3 of this CONTRACT;

(b) BUYER fails to take DELIVERY of the DRILLSHIP when the DRILLSHIP is duly tendered for DELIVERY by BUILDER under the provisions of Article VII;

(c) BUYER fails to punctually, duly and fully comply with any of its material obligations (other than those obligations referred to in Article XI.1.(a), (b) and (d)) under this CONTRACT and such failure is not cured within thirty (30) days of notice from BUILDER or if the default is not reasonably capable of being remedied within thirty (30) days, the failure by BUYER to commence remedial action within the same thirty (30) day period and to diligently proceed with such action; or

(d) BUYER voluntarily or involuntarily being made a part to any receivership, liquidation, or bankruptcy proceeding (which proceedings are not stayed within thirty (30) days of the service of such proceedings on BUYER) or becoming insolvent, unless as a result of BUILDER’s failure to make payments of not less than United States Dollars Five Million (USD 5,000,000) as due under this CONTRACT.

2. Interest and Charges:

If BUYER shall be in default of payment of any PAYMENT MILESTONE as provided in Article XI.1(a), BUYER shall pay interest on such PAYMENT MILESTONE at the DEFAULT INTEREST RATE from the due date thereof to the date of payment of the full amount including interest to BUILDER. In case BUYER shall fail to take DELIVERY of the DRILLSHIP as provided in Article XI.1(b), BUYER shall be deemed to be in default of payment of PAYMENT MILESTONE 2 and shall pay interest thereon at the same rate as aforesaid from and including the day on which the DRILLSHIP is duly tendered for DELIVERY by BUILDER .

3. Effect of Default:

(a) If any default by BUYER occurs as defined in Article XI.1(a), (b), (c) or (d), the DELIVERY DATE shall be automatically postponed for the period of continuance of such default by BUYER and BUILDER shall not be obliged to pay any liquidated damages for the delay in delivery of the DRILLSHIP caused thereby. In such event, BUYER shall be responsible for all costs and expenses incurred by BUILDER by reason of such postponement.

(b) If any default by BUYER as defined in Article XI.1 (a) or (b) continues for a period of seven (7) days, or if any default by BUYER as defined in Article XI.1(c) or (d) occurs, BUILDER may, at its option, terminate this CONTRACT by giving written notice to such effect to BUYER.

(c) In the event of termination of this CONTRACT as a result of BUYER’s default under this CONTRACT, BUILDER shall be entitled to retain and apply any PAYMENT MILESTONE paid by BUYER to BUILDER on account of this CONTRACT to the recovery of BUILDER’s loss and damage plus any reasonably

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estimated profit which BUILDER would have been entitled to receive if the DRILLSHIP had been completed and DELIVERED less the purchase price of any portion of the DRILLSHIP that has been utilized on BUILDER’s other projects, but excluding any consequential or special damages.

4. Sale of DRILLSHIP:

(a) If BUILDER terminates this CONTRACT as provided in this Article XI and elects to sell the DRILLSHIP in its completed or uncompleted state, BUILDER shall be entitled to retain and apply any PAYMENT MILESTONE paid by BUYER to BUILDER on account of this CONTRACT and to apply the same in accordance with Article XI.4. Further, BUILDER shall have the full right and power either to complete or not to complete the DRILLSHIP as it deems fit but in any event shall use its reasonable endeavours to sell the DRILLSHIP (either in its complete or incomplete form) at public or private sale on such terms and conditions as BUILDER may determine without being responsible for any loss or damage.

(b) In the event of the sale of the DRILLSHIP in its completed state, the proceeds of sale received by BUILDER (the “COMPLETED SALE PROCEEDS”) shall be applied as follows: firstly to payment of all costs and expenses attending such sale and otherwise incurred by BUILDER as a result of BUYER’s default, and secondly to payment of all unpaid PAYMENT MILESTONES and interest on such PAYMENT MILESTONES at the DEFAULT INTEREST RATE from the respective due dates thereof to the date of application (collectively, the “COMPLETED OUTSTANDING AMOUNT”). In the event the COMPLETED OUTSTANDING AMOUNT exceeds the sum of the COMPLETED SALE PROCEEDS, BUYER shall remit the difference to BUILDER, provided that, in no event shall such difference exceed the CONTRACT PRICE. In the event the COMPLETED SALE PROCEEDS exceeds the COMPLETED OUTSTANDING AMOUNT, then BUILDER shall remit the difference to BUYER.

(c) In the event of the sale of the DRILLSHIP in its uncompleted state, the proceeds of sale received by BUILDER (the “INCOMPLETE SALE PROCEEDS”) shall be applied as follows: firstly to payment of all costs and expenses attending such sale and otherwise incurred by BUILDER as a result of BUYER’s default, secondly to payment of all costs of construction of the DRILLSHIP to date of termination of the CONTRACT less the PAYMENT MILESTONE(S) retained by BUILDER pursuant to Article XI.4(a) above and, thirdly to BUILDER’s reasonably estimated profit to which it would have been entitled to receive if the DRILLSHIP had been completed and DELIVERED (collectively, the “INCOMPLETE OUTSTANDING AMOUNT”). In the event the INCOMPLETE OUTSTANDING AMOUNT exceeds the sum of the INCOMPLETE SALE PROCEEDS plus any previously paid PAYMENT MILESTONES, BUYER shall remit the difference to BUILDER, provided that, in no event shall such difference exceed the CONTRACT PRICE. In the event the INCOMPLETE SALE PROCEEDS plus any previously paid PAYMENT MILESTONES exceeds the INCOMPLETE OUTSTANDING AMOUNT, then BUILDER shall remit the different to BUYER.

(d) If BUILDER sells to a third party or utilizes for its other projects any portion of the DRILLSHIP that BUILDER intends to elect to sell in accordance with Article XI.4.(b) or (c) in its completed or uncompleted state, such sale price (or the purchase price of such re-used portion) shall be deducted from the COMPLETED SALE PROCEEDS or the INCOMPLETE SALE PROCEEDS (as the case may be).

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5. Remedies Cumulative:

No remedy referred to in this Article XI is intended to be exclusive, but each shall be cumulative and is in addition to, and may be exercised concurrently with, any other remedy which is referred to in this Article XI, or which may otherwise be available to BUILDER including, without limitation, the right to terminate this CONTRACT.

No express or implied waiver by BUILDER of any default of BUYER shall in any way be, or be construed to be, a waiver of any other, further or subsequent default of BUYER.

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ARTICLE XII

INSURANCE

1. Extent of Insurance Coverage:

From the time of launch of the DRILLSHIP until the DRILLSHIP is completed, delivered to and accepted by BUYER, BUILDER shall, at its own cost and expense, keep the DRILLSHIP and all machinery, materials, equipment, appurtenances and outfit, delivered to the SHIPYARD for the DRILLSHIP, or built into or installed in or upon the DRILLSHIP, including BUYER’S SUPPLIES, insured with Korean insurance companies under insurance coverage corresponding to the Institute of London Underwriters Clauses for Builder’s Risks.

The amount of such insurance coverage shall, up to the ACTUAL DELIVERY DATE of the DRILLSHIP, be in an amount at least equal to, but not limited to, the aggregate of the payments made by BUYER to BUILDER plus the value of BUYER’S SUPPLIES in custody of the SHIPYARD, if any. The insurance referred to hereinabove shall be taken out in the name of BUILDER and all losses under the insurance shall be payable to BUILDER and BUYER as their interests may appear.

If BUYER so requests, BUILDER shall at BUYER’s cost procure insurance on the DRILLSHIP and all parts, materials, machinery and equipment intended therefore against other risks not provided in this Article XII.1 and shall make all arrangements to that end. The cost of such insurance shall be reimbursed to BUILDER by BUYER upon delivery of the DRILLSHIP.

The BUILDER shall obtain and maintain any additional insurance required by Korean law.

2. Application of Recovered Amount:

(a) Partial Loss

(1) If the DRILLSHIP shall be damaged by any insured cause whatsoever prior to acceptance thereof by BUYER and in the further event that such damage shall not constitute an actual, constructive, arranged or compromised total loss of the DRILLSHIP, BUILDER shall apply the amount recovered under the insurance referred to in Article XII.1 to the repair of such damage to the CLASSIFICATION SOCIETY’s satisfaction and in accordance with the SPECIFICATIONS however subject to a reasonable postponement of the DELIVERY DATE and adjustment of other terms of this CONTRACT (including CONTRACT PRICE) as may be necessary and as agreed by the parties in writing, and BUYER shall accept the DRILLSHIP under this CONTRACT when completed in accordance with this CONTRACT and the SPECIFICATIONS.

(b) Total Loss

(1) If the DRILLSHIP is determined to be an actual, constructive, arranged or compromised total loss, BUILDER shall by agreement between the parties hereto, either:

(i) proceed in accordance with the terms of this CONTRACT, in which case the amount recovered under said insurance shall be applied to the reconstruction and repair of the DRILLSHIP’s damage, provided the parties hereto shall have further agreed in writing as to such reasonable postponement of the DELIVERY DATE and adjustment of other terms of this CONTRACT (including the CONTRACT PRICE) as may be necessary for the completion of such reconstruction and repair; or

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(ii) refund immediately to BUYER the amount of all PAYMENT MILESTONES paid to BUILDER under this CONTRACT plus an amount equal to the value of any BUYER’S SUPPLIES which shall have become a total loss as aforesaid without any interest, whereupon this CONTRACT shall be deemed to be terminated and all rights, duties, liabilities and obligations of each of the parties towards the other shall terminate forthwith.

If the parties fail to reach all necessary agreements within two (2) months after the DRILLSHIP is determined to be an actual, constructive, arranged or compromised total loss, the provisions of Article XII.2(b)(ii) shall apply.

3. Redelivery of BUYER’S SUPPLIES:

If the DRILLSHIP shall be determined to be an actual, constructive, arranged or compromised total loss and it shall not be agreed between the parties that the DRILLSHIP is to be reconstructed as aforesaid, BUILDER shall redeliver to BUYER at the SHIPYARD any BUYER’s SUPPLIES which shall not have become a total loss.

4. Termination of BUILDER’s Obligation to Insure:

BUILDER’s obligations to insure the DRILLSHIP hereunder shall cease and terminate forthwith upon DELIVERY thereof to BUYER.

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ARTICLE XIII

DISPUTES AND ARBITRATION

1. Proceedings:

If any dispute, controversy or difference shall arise between the parties hereto out of or in relation to or in connection with this CONTRACT which cannot be settled by the parties themselves, it shall be resolved as follows:

(a) Any dispute concerning the DRILLSHIP’s compliance or non-compliance with the rules and regulations of the CLASSIFICATION SOCIETY or another regulatory body shall be referred to the principal or other appointed surveyor of the CLASSIFICATION SOCIETY (acting as assessor not as arbitrator), as the case may be, the decision of whom shall be final and binding upon the parties hereto. If the CLASSIFICATION SOCIETY declines or fails to appoint a surveyor to act as above or if the surveyor fails to make a determination of disputes referred to him in a period of ten (10) days, unless the parties agree to extend such a period, the matter shall be referred for determination in accordance with Article XIII.1(b) or (c).

(b) Any dispute relating solely to technical matters concerning the construction, material or quality of work under this CONTRACT or the SPECIFICATIONS, except as set out in Article XIII.1(a) as well as any other matters specifically mentioned in this CONTRACT in this regard shall be referred to the CLASSIFICATION SOCIETY or, as agreed to by the parties, a suitably qualified expert who (if the parties cannot agree on his identity) shall be appointed by the President for the time being of the Royal Institute of Naval Architects, London (the “TECHNICAL EXPERT”). The TECHNICAL EXPERT or CLASSIFICATION SOCIETY shall act as assessor and not an arbitrator and shall provide the parties with a written determination of the dispute within ten (10) days of referral of the dispute, unless the parties otherwise agree to extend such period. Such determination shall include findings as to any required extension of the DELIVERY DATE by reason of the dispute and may also include a finding as to payment of costs incurred in the proceedings. His determination thus made shall be final and binding on the parties.

(c) All other disputes shall be referred to arbitration in London, England, and unless the parties shall agree within fifteen (15) days upon the appointment of a sole arbitrator, one arbitrator shall be appointed by BUILDER and the other by BUYER, and in case the arbitrators cannot agree, then to the decision of an umpire who shall be chosen and appointed by the two arbitrators.

Such arbitration shall be conducted in accordance with the Arbitration Act 1996 of United Kingdom or any re-enactment or statutory modification thereof for the time being in force and with the rules of The London Maritime Arbitrators’ Association for the time being in force.

The award of the arbitrators or the umpire shall be final and binding on the parties.

If the two arbitrators fail to choose and appoint a third arbitrator, either of the said two arbitrators may apply to the President for the time being of The London Maritime Arbitrators’ Association to choose and appoint a third arbitrator.

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2. Alteration of Delivery of the DRILLSHIP:

In the event of reference to the CLASSIFICATION SOCIETY or other regulatory bodies or to arbitration of any dispute or disputes arising or occurring prior to delivery of the DRILLSHIP, the award by the party deciding the said dispute or disputes shall include a declaration as to any postponement of the DELIVERY DATE which the party deciding the dispute or disputes may in his/their absolute discretion deem appropriate.

3. Entry in Court:

Judgement on an award by arbitrators may be entered in any court of competent jurisdiction for enforcement thereof.

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ARTICLE XIV

RIGHT OF ASSIGNMENT

1. Assignment and Transfer:

Neither party shall assign or transfer all or any part of its rights or obligations under this CONTRACT to any third party without the prior written consent thereto of the other party save that nothing herein shall prevent BUYER from assigning the benefit of this CONTRACT by way of security for any loan provided to BUYER by any one or more banks or other financial institutions to finance its purchase of the DRILLSHIP hereunder and provided further that BUYER may assign its rights under this CONTRACT or the right to take title to the DRILLSHIP upon DELIVERY to an AFFILIATE upon written notice to BUILDER. No such assignment shall be binding upon BUILDER unless notice hereof is given to BUILDER.

2. Associated Costs:

In the event of any such assignment by either party, all costs including legal and other costs incurred in relation thereto shall be borne and paid for by the assignor, and the assignor shall remain liable under this CONTRACT to the other party to the same extent as it was prior to the making of the assignment and shall cause the assignee to observe and respect the terms thereof.

3. Security Assignments:

In connection with any security assignment of this CONTRACT provided to the BUYER’s banks, the BUILDER shall execute and deliver any reasonable acknowledgement of such security provided to it by the BUYER.

4. Binding Nature:

This CONTRACT shall be binding upon the respective successors of the parties and effective for the benefit their respective assigns.

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ARTICLE XV

TAXES AND DUTIES

1. Taxes and Duties in Korea:

BUILDER shall bear and pay all taxes and duties levied or imposed in Korea in connection with the execution and/or performance of this CONTRACT, except any taxes and duties imposed in Korea upon BUYER’S SUPPLIES or upon the activities or personal incomes of BUYER’s employees and agents (including the REPRESENTATIVES and representatives of the manufacturers of BUYER’S SUPPLIES).

2. Taxes and Duties outside Korea:

BUYER shall bear and pay all taxes and duties levied or imposed upon BUYER outside Korea in connection with execution and/or performance of this CONTRACT except for any taxes and duties imposed upon those items or services to be procured by BUILDER for construction of the DRILLSHIP.

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ARTICLE XVI

PATENTS, TRADEMARKS, COPYRIGHTS, ETC.

1. Patents, Trademarks and Copyrights:

(a) BUILDER shall defend and indemnify BUYER against all damages, losses, liabilities, costs and expenses (including all legal costs and expenses but excluding BUYER’s internal costs and expenses) reasonably incurred by BUYER as a result of all actual or alleged claims for infringement of patent rights, copyrights, service marks or trademarks in connection with the construction of the DRILLSHIP by BUILDER at the SHIPYARD, but no such warranty, liability or indemnity shall extend to the BUYER’S SUPPLIES or BUYER’s operation or use of the DRILLSHIP, its equipment, apparatus or systems.

(b) Nothing contained herein shall be construed as transferring such patent, trademark, service mark or copyright covered by this CONTRACT, and all such rights are hereby expressly reserved to the true and lawful owners thereof.

(c) BUYER shall defend and indemnify BUILDER and its subcontractors against all damages, losses, liabilities, costs and expenses (including all legal costs and expenses) reasonably incurred by BUILDER as a result of all actual or alleged claims for infringement of patent rights brought by a third party in connection with BUYER’S SUPPLIES or BUYER’s operation or use of the DRILLSHIP, its equipment, apparatus or systems. In order to obtain such defence and indemnity, BUILDER shall immediately notify BUYER in writing of any claims received, and BUILDER shall allow BUYER to take over the defence of the claim. BUILDER shall provide BUYER with reasonable assistance required by BUYER to defend the claim.

2. General Plans, Specifications and Working Drawings:

BUILDER retains all rights with respect to basic design, detailed design, plans, working drawings, technical descriptions, calculations, test results and other data, information and documents concerning the design and construction of the DRILLSHIP, and BUYER undertakes therefore not to disclose the same or divulge any information contained therein directly or indirectly to any third parties, without the prior written consent of BUILDER, except where it is necessary for the usual operation, repair and maintenance or upgrades of the DRILLSHIP. In the event that BUYER breaches its obligations and undertakings under Clause 2 of this Article, BUILDER is entitled to make a claim and/or bring suit against BUYER in respect of any loss and damage whatsoever suffered by BUILDER as result of any such breach by BUYER.

All intellectual property owned by BUYER prior to entering into this CONTRACT and all intellectual property developed solely by BUYER during the term of this CONTRACT shall belong to BUYER. If the parties jointly develop any intellectual property associated with this CONTRACT, the parties agree to negotiate in good faith and to execute a development agreement to identify and allocate ownership rights in the jointly developed intellectual property.

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ARTICLE XVII

BUYER’S SUPPLIES

1. Responsibility of BUYER:

(a) BUYER shall, at its own risk, cost and expense, supply and deliver to BUILDER all of the items to be furnished by BUYER as set out in the SPECIFICATIONS (“BUYER’S SUPPLIES”) at warehouse or other storage of the SHIPYARD in good condition ready for installation or use in or on the DRILLSHIP, in accordance with the time schedule designated by BUILDER to meet the building schedule of the DRILLSHIP.

(b) In order to facilitate installation or use by BUILDER of BUYER’S SUPPLIES in or on the DRILLSHIP, BUYER shall furnish BUILDER with necessary SPECIFICATIONS, plans, drawings, instruction books, manuals, test reports and certificates required by BUILDER. BUYER, if so requested by BUILDER, shall, without any charge to BUILDER, cause representatives of the manufacturers of BUYER’S SUPPLIES to assist BUILDER in installation thereof in or on the DRILLSHIP and/or to carry out installation thereof by themselves or to make necessary adjustments, tests and inspection thereof at the SHIPYARD.

(c) Any and all of BUYER’S SUPPLIES shall be subject to BUILDER’s reasonable right of rejection if they are found to be unsuitable or in improper condition for installation or use. However, if so requested by BUYER, BUILDER may repair or adjust BUYER’S SUPPLIES without prejudice to BUILDER’s other rights hereunder and without being responsible for any consequences arising therefrom. In such case, according to Articles V.4 and V.5, BUYER shall compensate BUILDER for all costs and expenses incurred by BUILDER in such repair or adjustment and the DELIVERY DATE shall be postponed for any period of delay in the construction of the DRILLSHIP caused by the making of such repair or adjustment.

(d) Should BUYER fail to deliver any of BUYER’S SUPPLIES within the time designated by BUILDER, the DELIVERY DATE shall be extended for the period of such delay in delivery of BUYER’S SUPPLIES if such delay in delivery shall affect the DRILLSHIP’s construction or the DELIVERY DATE of the DRILLSHIP. In such event, BUYER shall be responsible for all losses and damages incurred by BUILDER by the reason of such delay in delivery of BUYER’S SUPPLIES and such payment shall be made upon delivery of the DRILLSHIP.

(e) If delay in delivery of any of the BUYER’S SUPPLIES exceeds fifteen (15) days, then the BUILDER shall be entitled to proceed with construction of the DRILLSHIP without installation thereof in or on the DRILLSHIP, without prejudice to the BUILDER’s other rights as hereinabove provided, and the BUYER shall accept and take delivery of the DRILLSHIP as so constructed.

2. Responsibility of BUILDER:

BUILDER shall be responsible for the storing and handling with reasonable care of BUYER’S SUPPLIES after delivery thereof to the SHIPYARD, and shall, at its own cost and expense, install them in or on the DRILLSHIP, unless otherwise provided herein or agreed by the parties hereto, provided, always, that BUILDER shall not be responsible for quality, efficiency and/or performance of any of BUYER’S SUPPLIES and for the loss of or damage to BUYER’S SUPPLIES caused without BUILDER’s wilful misconduct or gross negligence.

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3. Return of BUYER’S SUPPLIES

Where under any provision of this CONTRACT BUILDER shall be required either to refund the value of or to return BUYER’s SUPPLIES to BUYER, then BUILDER shall lawfully discharge any such obligation by returning the BUYER’S SUPPLIES in question FOB Okpo or, in BUILDER’s option by paying to BUYER the invoiced cost to BUYER of such supplies CIF Okpo.

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ARTICLE XVIII

REPRESENTATIVES

1. BUYER’s REPRESENTATIVE:

BUYER’s REPRESENTATIVE and address designated for the purpose of notices and other communications under this CONTRACT shall be as follows:

ALPHA EAGLE COMPANY

c/o Atwood Oceanics Management, LP

15835 Park Ten Place Drive

Houston, Texas

United States of America

Telephone No.:  +1 281-749-7944

Fax No.:             +1281-578-3253

Email:                 gwagner@atwd.com

Attention:           Geoffrey Wagner

unless and until BUYER notifies BUILDER otherwise in writing.

2. BUILDER’s Representative

BUILDER’s representative and address designated for the purpose of notices and other communications under this CONTRACT shall be as follows:

DAEWOO SHIPBUILDING & MARINE ENGINEERING CO., LTD.

1, Aju-dong, Geoje-si,

Gyeong nam, 656-714

Korea

Attention:         Mr. H.S. Yang

Telephone:       82 55 680 5499

Telefax:             82 55 681 7428

unless and until BUILDER notifies BUYER otherwise in writing.

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ARTICLE XIX

NOTICE AND LANGUAGE

1. Notice:

Except as may be more specifically set out in any particular provision of this CONTRACT, any and all notices, requests, demands, instructions, advices and communications in connection with this CONTRACT shall be in writing and shall be conveyed by registered airmail, by express courier service, personally, or by telefax or email and shall be deemed to be given at, and become effective from, the time when the same is delivered to (or in the case of a telefax or email received at) the address of the party to be served.

2. Language:

Any and all notices and communications in connection with this CONTRACT shall be written in the English language.

3. Writing

A telefax or email message shall be deemed to be a notice “in writing” for purposes of this CONTRACT.

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ARTICLE XX

EFFECTIVE DATE OF CONTRACT

This CONTRACT shall become effective from the date of its execution by both BUYER and BUILDER (the “EFFECTIVE DATE”). However, if BUILDER fails to provide BUYER with the Irrevocable Stand-by Letter of Credit referred to in Article X.4 within thirty (30) days after the date of execution of the CONTRACT, then the CONTRACT shall automatically become null and void, unless otherwise mutually agreed in writing between the parties hereto, and the parties shall be immediately and completely discharged from all of their obligations to the other party under this CONTRACT as though this CONTRACT had never been entered into at all.

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ARTICLE XXI

INTERPRETATION AND OTHER MATTERS

1. Laws Applicable:

The parties hereto agree that the validity and interpretation of this CONTRACT and of each Article and part thereof shall be governed by the laws of England.

2. Discrepancies:

In the event of any conflict between this CONTRACT and the SPECIFICATIONS, the provisions of this CONTRACT shall prevail. In the event of any conflict between the SPECIFICATIONS and design, the provisions of the SPECIFICATIONS shall prevail.

3. Entire Agreement:

This CONTRACT contains the entire agreement and understanding between the parties hereto and supersedes all prior negotiations, representations, undertakings and agreements on any subject matter of this CONTRACT.

4. Amendment:

No provision of this CONTRACT may be amended, modified, waived or terminated except by an instrument in writing executed by each of the parties hereto.

5. Headings:

The descriptive headings of Articles and Clauses herein are for convenience of reference only and are not to be used in construing or interpreting this CONTRACT.

6. Severability:

Any provision of this CONTRACT which is prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective to the extent of such prohibition or unenforceability without invalidating the remaining provisions hereof, and any such prohibition or unenforceability in any jurisdiction shall not invalidate or render unenforceable such provisions in any other jurisdiction. To the extent permitted by applicable laws, both parties hereby waive any provision of law which renders any provision hereof prohibited or unenforceable in any respect.

7. Order of precedence of CONTRACT Documents:

In case of inconsistency between contract documents, the CONTRACT shall take precedence over the SPECIFICATIONS and the Drawings and the SPECIFICATIONS shall take precedence over the Drawings.

8. Confidentiality:

Each party agrees that it shall hold in strict confidence and shall not disclose to any PERSON or use any CONFIDENTIAL INFORMATION (as defined below) from and after the EFFECTIVE DATE through the period ending two (2) years after the DELIVERY DATE. Notwithstanding the foregoing, a party may, provided that each such PERSON shall be informed of the confidential nature of such information, disclose CONFIDENTIAL INFORMATION to the officers, directors, employees, representatives, investors, lenders, counsel and other professionals (including potential lenders and investors and their employees, counsel and other professionals) of a party and its AFFILIATES who need to know such information for purposes of (a) executing this CONTRACT and (b) the usual operation, repair and maintenance or upgrades of the DRILLSHIP. In the event that a party is requested by subpoena, civil

46

investigative demand, or any similar process to disclose any such CONFIDENTIAL INFORMATION, such party will provide the other party with prompt notice of such request, demand or interrogatories so that the other party may seek an appropriate protective order. In the event that a protective order or injunction prohibiting disclosure is not obtained, then such party may furnish only so much of the CONFIDENTIAL INFORMATION as, in the reasonable written opinion of its legal counsel (copy being simultaneously provided to the other party), is required and shall preserve the confidentiality of the remainder in accordance with this Article XXI.8. Should a party, its AFFILIATES or their agents or representatives disclose or use any CONFIDENTIAL INFORMATION for the direct or indirect benefit or use of themselves or any other PERSON, or otherwise breach this Article XXI.8, any benefits obtained by such party or any such other PERSON shall be held in trust for the sole benefit of the other party. The parties agree that because an award of money damages (whether pursuant to the foregoing sentence or otherwise) would be inadequate for any breach of this Article XXI.8, any such breach would cause the each party irreparable harm and therefore the non-breaching party shall be entitled, without the requirement of posting a bond or other security, to equitable relief, including injunctive relief and specific performance.

As used herein, “CONFIDENTIAL INFORMATION” shall mean this CONTRACT and all information (written or digital) relating to BUILDER, BUYER or the negotiation or substance of this CONTRACT and any other ancillary agreements, whether or not marked with any legends or other markings indicating the information to be proprietary or confidential. CONFIDENTIAL INFORMATION shall not include information to the extent, but only to the extent, disclosure thereof (or the terms and conditions thereof) is required by LAW, information which the disclosing party can demonstrate is or becomes generally available to the public other than as a result of disclosure by such party or its AFFILIATES and information necessary for a party to enforce its rights under this CONTRACT or defend against indemnification claims under this CONTRACT. The parties’ obligations under this Article XXI.8 shall survive the termination of this CONTRACT.

9. Public Announcements:

No press or other public announcement, or public statement or comment in response to any inquiry, relating to the transactions contemplated by this CONTRACT shall be issued or made by either party without consultation with the other party; provided, that a press release or other public announcement, regulatory filing, statement or comment made without such consultation shall not be in violation of this Article XXI.9 if it is made (i) in order to comply with such LAW or stock exchange policies or (ii) to PERSONS holding consent or approval rights that may be applicable to the transactions contemplated by this CONTRACT. Furthermore, in all instances, prompt notice from one party to the other shall be given with respect to any such release, announcement, statement or comment.

10. Foreign Corrupt Practices Act:

BUILDER represents warrants and agrees that it will comply with all applicable anti-bribery laws in any country in which any aspect of this CONTRACT will take place, including the U.S. Foreign Corrupt Practices Act (“FCPA”).

BUILDER represents, warrants and agrees that, in connection with the performance of its obligations hereunder, it shall not make any direct or indirect payments, in money or any other item of value (including gifts) or make any offers or promises to pay any money or any other item of value (including gifts) to:

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(a) any government or public official;

(b) any political party;

(c) any candidate for political office; or

(d) any other person or entity, with the knowledge that such payment, offer or promise to pay will be made to any government official for the purpose of influencing such government official to obtain or retain business or to make any decisions favorable to BUYER, BUILDER, or both.

BUILDER further represents that no government official is a principal, owner, officer, employee or agent of any entity in which BUILDER has an interest, and no government official has any material financial interest in the business of BUILDER.

BUILDER affirms that BUYER shall have the right to audit BUILDER’s books and records, as warranted, to ensure compliance with this CONTRACT. These audit rights do not extend beyond the records relating to BUILDER’S performance of this CONTRACT.

In the event of any breach by BUILDER of any of its representations, warranties or covenants contained in this provision, BUYER may, in its sole discretion in addition to any other remedy provided herein or otherwise provided by LAW, immediately terminate this CONTRACT without notice or indemnity and in such event, BUILDER shall forfeit all rights to all fees and commissions which shall accrue and/or have been earned but which have not been paid as of the date of such termination.

11. COUNTERPARTS:

This CONTRACT may be executed by each of the parties hereto on any number of separate counterparts, each of which shall be an original and all of which taken together shall constitute one and the same instrument. Delivery of an executed signature page of this CONTRACT in Portable Document Format (PDF) or by facsimile transmission shall be effective as delivery of an executed original counterpart of this CONTRACT, although the original signature pages shall thereafter be appended to this CONTRACT.

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IN WITNESS WHEREOF, the parties hereto have caused this CONTRACT to be signed by their duly authorized signatories the day and year first above written.

For and on behalf of:		For and on behalf of:
ALPHA EAGLE COMPANY		DAEWOO SHIPBUILDING & MARINE ENGINEERING CO., LTD.
By:	/s/ Noel Baldwin	By:	/s/ Sang-Tae Nam
Name:	Noel Baldwin	Name:	Sang-Tae Nam
Title:	Director	Title:	President & CEO

EX-13

EXHIBIT 13

2011 ANNUAL REPORT TO SHAREHOLDERS

THE COMPANY

This Annual Report is for Atwood Oceanics, Inc. and its subsidiaries, which are collectively referred to herein as the “Company,” “we,” “us” or “our” except where stated or the context indicates otherwise. We are an international offshore drilling contractor engaged in the drilling and completion of exploratory and developmental oil and gas wells. We currently own a diversified fleet of 10 mobile offshore drilling units located in the U.S. Gulf of Mexico, South America, the Mediterranean Sea, West Africa, Southeast Asia and Australia and are constructing an ultra-deepwater semisubmersible rig, two ultra-deepwater drillships and three high specification jack-up rigs for delivery in 2012 through 2014. We were founded in 1968 and are headquartered in Houston, Texas with other offices in Australia, Egypt, South Korea, Malaysia, Singapore and the United Kingdom.

FINANCIAL HIGHLIGHTS

	2011		2010
	(In Thousands)
For the years ended September 30:
Operating Revenues	$	645,076	$	650,562
Net Income		271,674		256,996
Capital Expenditures		514,858		187,094
At September 30:
Net Property and Equipment	$	1,887,321	$	1,343,961
Total Assets		2,375,391		1,724,440
Total Shareholder's Equity		1,652,787		1,370,134

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Atwood Oceanics, Inc. and Subsidiaries

FIVE YEAR FINANCIAL REVIEW

	At or For the Years Ended September 30,
(In thousands, except per share amounts, fleet data and ratios)	2011			2010			2009			2008			2007
STATEMENTS OF OPERATIONS DATA:
Operating revenues	$	645,076		$	650,562		$	586,507		$	526,604		$	403,037
Contract drilling costs		(223,565	)		(252,427	)		(221,709	)		(216,395	)		(186,949	)
Depreciation		(43,597	)		(37,030	)		(35,119	)		(34,783	)		(33,366	)
General and administrative		(44,407	)		(40,620	)		(31,639	)		(30,975	)		(23,929	)
Other, net		(4,847	)		1,855			402			155			414
Operating income		328,660			322,340			298,442			244,606			159,207
Other (expense) income		(3,813	)		(2,361	)		(2,011	)		169			752
Tax provision		(53,173	)		(62,983	)		(45,686	)		(29,337	)		(20,935	)
Net Income	$	271,674		$	256,996		$	250,745		$	215,438		$	139,024
PER SHARE DATA:
Earnings per common share:
Basic	$	4.20		$	3.99		$	3.91		$	3.38		$	2.22
Diluted	$	4.15		$	3.95		$	3.89		$	3.34		$	2.18
Average common shares outstanding:
Basic		64,754			64,391			64,167			63,756			62,686
Diluted		65,403			65,028			64,493			64,556			63,628
FLEET DATA:
Number of rigs owned, at end of period		10			9			9			8			8
Utilization rate for in-service rigs (1)		95	%		88	%		85	%		100	%		100	%
BALANCE SHEET DATA:
Cash and cash equivalents	$	295,002		$	180,523		$	100,259		$	121,092		$	100,361
Working capital		301,608			266,534			191,686			248,052			158,549
Net property and equipment		1,887,321			1,343,961			1,184,300			787,838			493,851
Total assets		2,375,391			1,724,440			1,509,402			1,096,597			717,724
Total debt		520,000			230,000			275,000			170,000			18,000
Shareholders' equity (2)		1,652,787			1,370,134			1,102,293			843,690			615,855
Ratio of current assets to current liabilities		2.89			3.85			2.70			5.36			3.75

Notes—

(1) Excludes any contractual downtime for shipyard projects. Fiscal year 2011 also excludes our three cold-stacked rigs which were not actively marketed.

(2) We have never paid any cash dividends on our common stock.

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FORWARD-LOOKING STATEMENTS

Statements included in this annual report regarding future financial performance, capital sources and results of operations and other statements, other than statements of historical fact, that address activities, events or developments that we expect, believe or anticipate will or may occur in the future are forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, and Section 21E of the Securities Exchange Act of 1934. Such statements are those concerning strategic plans, expectations and objectives for future operations and performance. When used in this report, the words “believes,” “expects,” “anticipates,” “plans,” “intends,” “estimates,” “projects,” “could,” “should,” “may,” or similar expressions are intended to be among the statements that identify forward-looking statements.

Such statements are subject to numerous risks, uncertainties and assumptions that are beyond our ability to control, including, but not limited to:

• prices of oil and natural gas and industry expectations about future prices;

• market conditions, expansion and other development trends in the drilling industry and the global economy in general;

• the operational risks involved in drilling for oil and gas;

• the highly competitive and volatile nature of our business;

• the impact of governmental or industry regulation, both in the United States and internationally;

• the risks of and disruptions to international operations, including political instability and the impact of terrorist acts, acts of piracy, embargoes, war or other military operations;

• our ability to enter into, and the terms, of future drilling contracts, including contracts for our new build units;

• our ability to retain the business of one or more significant customers;

• our ability to obtain and retain qualified personnel to operate our vessels;

• timely access to spare parts, equipment and personnel to maintain and service our fleet;

• the termination or renegotiation of contracts by customers or payment or other delays by our customers;

• customer requirements for drilling capacity and customer drilling plans;

• the adequacy of sources of liquidity for us and for our customers;

• changes in tax laws, treaties and regulations;

• the risks involved in the construction, upgrade, and repair of our drilling units;

• unplanned downtime and repairs on our rigs; and

• such other risks discussed in Part I, Item 1A. “Risk Factors” in our Form 10-K for fiscal year 2011 and in our other reports filed with the Securities and Exchange Commission, or SEC.

Forward-looking statements are made based upon management’s current plans, expectations, estimates, assumptions and beliefs concerning future events impacting us and therefore involve a number of risks and uncertainties. We caution that forward-looking statements are not guarantees and that actual results could differ materially from those expressed or implied in the forward-looking statements. Undue reliance should not be placed on these forward-looking statements, which are applicable only on the date hereof. We undertake no obligation to revise or update these forward-looking statements to reflect events or circumstances that arise after the date hereof or to reflect the occurrence of unanticipated events.

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MANAGEMENT’S DISCUSSION AND ANALYSIS

OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

MARKET OUTLOOK

Overview

The following discussion is intended to assist in understanding our financial position at September 30, 2011 and 2010, and our results of operations for each of the fiscal years for the three year period ended September 30, 2011. Read the accompanying consolidated financial statements and related notes in conjunction with this discussion.

Our fiscal year 2011 financial and operating results include:

• Operating revenues totaling $645 million

• Record net income of $272 million and diluted earnings per share of $4.15

• Net cash from operating activities of $340 million

• Debt to capitalization ratio of 24% at September 30, 2011

Industry Conditions

Over the past year, the offshore drilling market experienced improving utilization rates across all rig classes in response to better than anticipated oil prices. The degree of day rate improvement, however, differed in absolute levels between these rig classes with the ultra-deepwater floater market enjoying the most improvement as evidenced by the near full utilization for this rig class during the year. Day rates for other rig classes also experienced improvement, albeit at a slower pace.

However, the global macro environment, including the geopolitical issues in North Africa and the Middle East, the sovereign debt issues in Europe and slower economic growth in the U.S. and China, introduced a high level of market volatility and threatens to disrupt these favorable and improving offshore drilling market conditions.

On October 1, 2011, the former Bureau of Ocean Energy Management, Regulation and Enforcement (“BOEMRE”) split into two agencies, the Bureau of Ocean Energy Management (“BOEM”) and the Bureau of Safety and Environmental Enforcement (“BSEE”). The BSEE is now responsible for issuing drilling permits. These agencies have recently clarified and simplified the drilling permit process and the industry has seen a significant increase in the number of approved drilling permits. For example, from July 2011 to October 31, 2011, 25 new well drilling permits were awarded. This compares to 15 permits issued for the 15 months prior to July 2011. We are encouraged by this increase in permitting activity and expect permitting activity to continue to increase into 2012. As a result, tendering activity in the U.S. Gulf of Mexico has also increased resulting in several recent drilling contract awards. However, we cannot be certain that such increases will continue into the future or that additional restrictions or regulations will not be implemented which might negatively impact drilling activity in the U.S. Gulf of Mexico.

Additionally, West Africa, East Africa and Brazil are experiencing increased tender requests and contract awards at increasingly higher day rates. Further improvements in ultra-deepwater and deepwater rig utilization and day rates will depend in large part on projected oil prices, the strength of the global economy, and any additional impacts from the Macondo incident and associated new regulatory, legislative and permitting requirements.

Brent oil prices have averaged $105 for the year ended September 30, 2011, ranging from $82 to $124 during this period. At these price levels, we anticipate that our customers will continue to execute drilling programs resulting in increased levels of offshore drilling activity.

Ultra-deepwater and Deepwater

Industry-wide, deepwater rig utilization increased from 86% for fiscal year 2010 to 89% for fiscal year 2011, while ultra-deepwater utilization remains at full utilization. We believe only one new build ultra-deepwater unit, which delivers from the shipyard in December 2012, is currently available through the end of calendar year 2012. Conversely, although utilization has increased, there are still approximately three deepwater rigs with availability in 2011. For

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calendar year 2012, 91% of ultra-deepwater available days are contracted, with 74% of available days contracted for the industry-wide deepwater fleet.

The Atwood Osprey continued its three-year contract with Chevron in Australia and is contracted through mid-2014. The Atwood Eagle and Atwood Falcon are contracted through the second quarter of fiscal year 2014 and the first quarter of fiscal year 2015, respectively, while the Atwood Hunter is contracted into the first quarter of fiscal year 2013.

The Atwood Condor, a dynamically positioned, 10,000 foot water depth ultra-deepwater semisubmersible, is on schedule to be delivered from the Jurong shipyard during the third quarter of fiscal year 2012 at a total cost, including project management, drilling, handling tools and spares, of approximately $750 million. The Atwood Condor is contracted to Hess Corporation for 21 months in the U.S. Gulf of Mexico directly after mobilization from the shipyard in Singapore.

The Atwood Advantage, a DP-3 dynamically-positioned, dual derrick, ultra-deepwater drillship rated to operate in water depths up to 12,000 feet, is currently under construction at the Daewoo Shipbuilding and Marine Engineering Co., Ltd. (“DSME”) shipyard in South Korea. The Atwood Advantage will have enhanced technical capabilities, including a seven-ram blowout preventer, the ability to operate two blow-out preventers (“BOPs”), three 100-ton knuckle boom cranes, a 165-ton active heave “tree-running” knuckle boom crane and 200 person accommodations. The Atwood Advantage is expected to be delivered during the fourth quarter of fiscal year 2013 at a total cost, including project management, drilling, handling tools and spares, of approximately $600 million.

In October 2011, we exercised an option to construct a second ultra-deepwater drillship, the Atwood Achiever, at the DSME shipyard in South Korea. The Atwood Achiever is identical in all material respects to the Atwood Advantage. The Atwood Achiever is expected to be delivered by June 2014 at a total cost, including project management, drilling, handling tools and spares, of approximately $600 million.

In addition, we have until July 31, 2012 to exercise our option to build an additional ultra-deepwater drillship with DSME. At this time, we have made no determination as to whether the remaining option will be exercised.

Although we currently do not have drilling contracts for the Atwood Advantage or the Atwood Achiever, we expect that the long-term demand for deepwater drilling capacity in established and emerging basins should provide us with opportunities to contract these two rigs prior to their delivery dates.

As of September 30, 2011, we have invested approximately $546 million toward the construction of the Atwood Condor and Atwood Advantage drilling units. As of November 21, 2011, we had $520 million of outstanding borrowings under our revolving credit facility.

Jack-ups

A bifurcation in day rates and utilization has become more evident in the jack-up market. Currently, higher specification jack-up rigs are achieving marketed utilization levels of approximately 96% as compared to 82% for the remainder of the global jack-up fleet. Higher specification rigs represent less than 30% of the global jack-up fleet. We expect this trend to continue into 2012 despite the expected supply increase from new build rigs being delivered throughout next year. We expect that operators will continue to prefer contracting newer, more capable high specification rigs in continuance of the bifurcation trend.

As a result of new build construction programs initiated during 2005 and continuing through 2010, the jack-up supply continues to increase. As of October 31, 2011, there were 75 new build jack-up rigs under construction, of which eight are scheduled for delivery during the remainder of 2011, while 21 are scheduled for delivery during 2012 and the remainder thereafter. Although the majority of jack-up rigs scheduled for delivery during the remainder of 2011 and 2012 are not contracted, approximately 15% are not considered high specification rigs (i.e., less than 350 foot water depth capability) and therefore do not compete with the majority of our jack-up fleet.

The Atwood Aurora and Atwood Beacon are each contracted for eight months in fiscal year 2012. The Vicksburg is contracted through the end of the fiscal first quarter 2013. Due to market bifurcation for high-specification jack-ups, we expect the Atwood Aurora and Atwood Beacon to continue to operate with high utilization and increasing day rates

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while the Vicksburg may encounter greater competition resulting in lower utilization, with day rates remaining under pressure for the foreseeable future.

We currently have three Pacific Class 400 jack-up drilling units, the Atwood Mako, the Atwood Manta and the Atwood Orca, under construction at the PPL Shipyard Pte. Ltd. (“PPL”) shipyard in Singapore. These new rigs will have a rated water depth of 400 feet, accommodations for 150 personnel and significant offline handling features. The three rigs are expected to cost approximately $190 million each, including project management, drilling, handling tools and spares, and are scheduled for delivery during the fourth quarter of fiscal 2012, the first quarter of fiscal year 2013, and the third quarter of fiscal year 2013, respectively. Although, we currently do not have drilling contracts for our three new build jack-ups, we expect to contract these high specification rigs prior to their delivery dates due to the preference of customers for these newer, more capable high specification assets.

We have until December 31, 2011 to exercise options to build two additional Pacific Class 400 jack-up drilling units with PPL. At this time, we have made no determination as whether either of the two remaining options will be exercised.

Idled Rigs

During fiscal year 2010, the Atwood Southern Cross, Richmond and Seahawk completed their drilling contracts and were subsequently idled. We anticipate these units will not return to service during fiscal year 2012 due to the lack of sufficient continuous demand, and thus, we are not actively marketing these rigs at this time.

Contract Backlog

We maintain a backlog of commitments for contract drilling revenues. Our contract backlog at September 30, 2011 was approximately $1.5 billion, representing a 25% increase compared to our contract backlog of $1.2 billion at September 30, 2010. We calculate our backlog by multiplying the day rate under our drilling contracts by the number of days remaining under the contract, assuming full utilization. The calculation does not include any revenues related to other fees such as for mobilization, demobilization, contract preparation, customer reimbursables and bonuses. The amount of actual revenues earned and the actual periods during which revenues are earned will be different from amounts our backlog calculations due to various factors, including unscheduled repairs, maintenance, weather and other factors. Such factors may result in lower applicable day rates than the full contractual day rate. In addition, under certain circumstances, our customers may seek to terminate or renegotiate our contracts. See Part I, Item 1A., “Risk Factors—Our business may experience reduced profitability if our customers terminate or seek to renegotiate our drilling contracts” in our Form 10-K for fiscal year 2011.

The following table sets forth as of September 30, 2011 the amount of our contract drilling revenue backlog and the percent of available operating days committed for our actively marketed drilling units for the periods indicated (in millions except for percent of available operating days committed):

	Fiscal 2012			Fiscal 2013			Fiscal 2014			Fiscal 2015			Total
Contract drilling revenue backlog
Ultradeepwater and Deepwater	$	610		$	477		$	323		$	12		$	1,422
Jackups		82			9			—			—			91
	$	692		$	486		$	323		$	12		$	1,513
Percent of Available Operating Days Committed		80	%		33	%		17	%		0	%

On October 17, 2011, we announced that one of our subsidiaries was awarded a drilling services contract by Hess Corporation for work in the U.S. Gulf of Mexico for the Atwood Condor. As a result of this contract, our contract backlog as of October 31, 2011 was $1.8 billion.

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RESULTS OF OPERATIONS

Fiscal Year 2011 versus Fiscal Year 2010

Operating Revenues—Revenues for fiscal year 2011 decreased $5.5 million, or 1%, compared to the prior fiscal year. A comparative analysis of revenues by rig for fiscal years 2011 and 2010 is as follows:

	Operating Revenues
	(In millions)
	Fiscal Year 2011		Fiscal Year 2010		Variance
Atwood Osprey	$	59.9	$	—	$	59.9
Atwood Beacon		45.1		34.1		11.0
Atwood Eagle		139.8		134.1		5.7
Vicksburg		34.3		34.2		0.1
Atwood Falcon		153.4		154.0		(0.6	)
Atwood Hunter		183.4		197.4		(14.0	)
Atwood Aurora		29.2		46.6		(17.4	)
Richmond		—		10.0		(10.0	)
Atwood Southern Cross		—		13.0		(13.0	)
Seahawk		—		27.2		(27.2	)
	$	645.1	$	650.6	$	(5.5	)

Our newest active drilling rig, the Atwood Osprey, commenced drilling operations in late May 2011 offshore Australia, and thus, earned no revenue in the prior fiscal year.

The increase in revenues for the Atwood Beacon is due to working on a higher day rate contract offshore South America compared to the prior fiscal year when the rig was working at a lower day rate offshore West Africa.

Revenues for the Atwood Eagle, Vicksburg and Atwood Falcon were relatively consistent compared to the prior fiscal year. The Atwood Eagle continued to work offshore Australia during both fiscal years 2011 and 2010, the Falcon continued work on a long term contract offshore Malaysia during both fiscal years 2011 and 2010, and the Vicksburg worked offshore Thailand during both fiscal years 2011 and 2010.

The decrease in revenues for the Atwood Hunter is due to an increase in downtime related to unplanned repairs and maintenance and a planned regulatory inspection during fiscal year 2011. The Atwood Hunter worked offshore West Africa in fiscal years 2011 and 2010.

Revenues for the Atwood Aurora decreased during fiscal year 2011 due to the completion of its most recent contract commitment in May, which was followed by a planned shipyard project through June 2011. Following the shipyard project, the rig was idled for most of the fourth quarter of fiscal year 2011. The rig experienced virtually no downtime during the prior fiscal year. In fiscal year 2011, until the time of the shipyard project, the rig worked offshore Egypt on the same long term contract that it worked under during fiscal year 2010. The Atwood Aurora resumed drilling operations offshore West Africa under a new contract that commenced late September 2011.

During fiscal year 2010, the Atwood Southern Cross, Richmond, and Seahawk all completed their respective drilling contracts and were subsequently idled. The idle state of these rigs resulted in the decrease of revenues for such rigs for fiscal year 2011 compared to the previous fiscal year.

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Contract Drilling Costs—Contract drilling costs for fiscal year 2011 decreased $28.8 million, or 11%, compared to the prior fiscal year. A comparative analysis of contract drilling costs by rig for fiscal years 2011 and 2010 is as follows:

	Contract Drilling Costs
	(In millions)
	Fiscal Year 2011			Fiscal Year 2010		Variance
Atwood Osprey	$	22.9		$	—	$	22.9
Atwood Eagle		62.5			53.0		9.5
Atwood Hunter		39.0			37.0		2.0
Atwood Beacon		28.7			27.8		0.9
Vicksburg		16.4			16.5		(0.1	)
Atwood Falcon		29.4			31.5		(2.1	)
Atwood Aurora		18.5			21.7		(3.2	)
Richmond		1.8			14.6		(12.8	)
Atwood Southern Cross		2.8			18.0		(15.2	)
Seahawk		2.4			24.6		(22.2	)
Other		(0.8	)		7.7		(8.5	)
	$	223.6		$	252.4	$	(28.8	)

The Atwood Osprey, commenced drilling operations in late May 2011, incurring approximately four months of drilling costs in the current fiscal year compared to none in the prior fiscal year.

The increase in contract drilling costs for the Atwood Eagle for fiscal year 2011 compared to the prior fiscal year is attributable to higher local payroll and payroll related costs due to the strengthening of the Australian dollar along with increased equipment related costs due to contract specific enhancements and additional maintenance projects performed during the extended regulatory inspection period during the fiscal year.

Contract drilling costs for the Atwood Hunter, Atwood Beacon, Vicksburg and the Atwood Falcon were relatively consistent when compared to the prior fiscal year.

The decrease in contract drilling costs for the Atwood Aurora for the year ended September 30, 2011 compared to the prior fiscal year is due to lower operating expenses being incurred during a planned shipyard project in May and June 2011 and the idle time incurred during the remainder of fiscal year 2011.

The decrease in drilling costs for the Richmond, Atwood Southern Cross and Seahawk is due to reduced operating costs as a result of these rigs being idle and not being actively marketed.

Decreases in Other contract drilling costs during the current fiscal year are due to a combination of higher percentage of Other contract drilling costs allocated to rig contract drilling costs in the current fiscal year when compared to the prior fiscal year and recognition of foreign exchange gains in the current fiscal year compared to foreign exchange losses in the prior fiscal year.

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Depreciation—Depreciation expense for the fiscal year 2011 increased 18% compared to the prior fiscal year. A comparative analysis of depreciation expense by rig for fiscal years 2011 and 2010 is as follows:

	Depreciation Expense
	(In millions)
	Fiscal Year 2011		Fiscal Year 2010		Variance
Atwood Osprey	$	8.3	$	—		8.3
Atwood Aurora		7.4		7.3		0.1
Atwood Eagle		4.9		4.8		0.1
Atwood Hunter		6.4		6.3		0.1
Richmond		1.7		1.7		—
Atwood Beacon		4.6		4.6		—
Seahawk		2.0		2.0		—
Vicksburg		2.0		2.0		—
Atwood Falcon		5.1		5.4		(0.3	)
Atwood Southern Cross		0.7		2.4		(1.7	)
Other		0.5		0.5		—
	$	43.6	$	37.0	$	6.6

The Atwood Osprey, which was placed into service in late May 2011, incurred no depreciation expense in fiscal year 2010.

Depreciation expense for all other rigs remained relatively consistent during fiscal year 2011 as compared to the prior fiscal year.

General and administrative—General and administrative expenses for fiscal year 2011 increased approximately $3.8 million, or 9%, compared to the prior fiscal year primarily due to rising personnel costs resulting, in part, from various expenses related to the transition of executive leadership, wage increases and increased annual bonus and share-based compensation costs during fiscal year 2011.

Other—The increase in Other expenses is primarily due to a $5.0 million charge related to an impairment of certain of our idled equipment during fiscal year 2011. The Other category amounts for fiscal year 2010 were attributable to the sale of equipment during the year,

Income taxes—Our effective tax rate was 16% for fiscal year 2011, as compared to the prior fiscal year effective tax rate of 20%. The lower effective income tax was primarily due to lower taxes on foreign earned income.

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Fiscal Year 2010 versus Fiscal Year 2009

Operating Revenues—Revenues for fiscal year 2010 increased $64.1 million, or 11%, compared to fiscal year 2009. A comparative analysis of revenues by rig for fiscal years 2010 and 2009 is as follows:

	Operating Revenues
	(In millions)
	Fiscal Year 2010		Fiscal Year 2009		Variance
Atwood Falcon	$	154.0	$	81.6	$	72.4
Atwood Aurora		46.6		20.2		26.4
Atwood Hunter		197.4		182.5		14.9
Seahawk		27.2		31.1		(3.9	)
Atwood Beacon		34.1		38.3		(4.2	)
Vicksburg		34.2		43.0		(8.8	)
Richmond		10.0		19.1		(9.1	)
Atwood Eagle		134.1		145.1		(11.0	)
Atwood Southern Cross		13.0		25.6		(12.6	)
	$	650.6	$	586.5	$	64.1

The increase in revenues for the Atwood Falcon was related to a substantially higher day rate in deeper water in Malaysia in fiscal year 2010 compared to fiscal year 2009.

The Atwood Aurora commenced drilling operations in April 2009 in Egyptian waters. The rig was actively engaged in drilling operations for a full 12 months during fiscal year 2010, accounting for the increase in revenues when compared to fiscal year 2009.

The increase in revenues for the Atwood Hunter was due to higher day rates and additional mobilization revenue working in the offshore Western Africa region in fiscal year 2010 compared to fiscal year 2009 working offshore Israel in the Mediterranean.

The decrease in revenues for the Seahawk was due to the end of a long term contract working offshore Equatorial Guinea in August 2010 with no follow-on work in fiscal year 2010 compared to full utilization of the rig in fiscal year 2009.

The decrease in revenues for the Atwood Beacon and Vicksburg was due to lower day rate contracts in fiscal year 2010 compared to higher day rate contracts during fiscal year 2009. The decrease in revenues for the Atwood Beacon was also impacted by fewer operating days at full contract rate working offshore Equatorial Guinea in fiscal year 2010 as compared to working more operating days at full contract rate offshore India during fiscal year 2009. The Vicksburg worked in the waters offshore Thailand during fiscal years 2009 and 2010.

The decrease in revenues in fiscal year 2010 for the Richmond was due to lower day rates and more idle time as a result of the temporary moratorium on drilling activities in the U.S. Gulf of Mexico during fiscal year 2010 as compared to full rig utilization working at a higher day rate in fiscal year 2009. The moratorium only applied to deep water drilling units, however, shallow water units were also affected as no permits were issued during the last half of fiscal year 2010.

The decrease in revenues for the Atwood Eagle was due to the completion of a one well drilling program during fiscal year 2010 at a significantly lower day rate under a contract option that had been deferred from fiscal year 2009.

While the Atwood Southern Cross was idle for most of fiscal years 2009 and 2010, the decrease in revenues was due to working at a lower day rate during fiscal year 2010 compared to fiscal year 2009 for the brief time the rig was operational during each fiscal year.

10

Contract Drilling Costs—Contract drilling costs for fiscal year 2010 increased $30.7 million, or 14%, compared to fiscal year 2009. A comparative analysis of contract drilling costs by rig for fiscal years 2010 and 2009 is as follows:

	Contract Drilling Costs (In millions)
	Fiscal Year 2010		Fiscal Year 2009		Variance
Atwood Aurora	$	21.7	$	9.7	$	12.0
Atwood Beacon		27.8		16.7		11.1
Atwood Eagle		53.0		47.0		6.0
Atwood Falcon		31.5		25.8		5.7
Vicksburg		16.5		15.2		1.3
Richmond		14.6		14.2		0.4
Atwood Hunter		37.0		36.8		0.2
Seahawk		24.6		24.7		(0.1	)
Atwood Southern Cross		18.0		23.9		(5.9	)
Other		7.7		7.7		—
	$	252.4	$	221.7	$	30.7

The Atwood Aurora, commenced drilling operations in April 2009, incurring approximately six months of drilling costs in fiscal year 2010 compared to a full year of costs in fiscal year 2009.

The increase in contract drilling costs for the Atwood Beacon was due to a combination of cost increases resulting from the amortization of deferred mobilization expenses incurred when the rig relocated from India to Equatorial Guinea in October 2009, increased maintenance projects, and increased personnel travel costs due to the remote geographical location in Equatorial Guinea during fiscal year 2010 as compared to fiscal year 2009.

The increase in contract drilling costs for the Atwood Eagle for fiscal year 2010 compared to fiscal year 2009 was primarily due to higher Australian payroll costs attributable to requirements for increased payroll related benefits and the strengthening value of the Australian dollar relative to the U.S. dollar.

The increase in contract drilling costs for the Atwood Falcon was due an increase in agent fees, which is based on a percent of revenues earned, and due to an increase in equipment related costs resulting from a higher number of repair and maintenance projects during fiscal year 2010 when compared to fiscal year 2009.

Contract drilling costs for the Vicksburg, Atwood Hunter, Richmond and Seahawk for fiscal year 2010 were relatively consistent with fiscal year 2009.

The decrease in drilling costs for the Atwood Southern Cross for fiscal year 2010 compared to the fiscal year 2009 was due to reduced equipment related costs and headcount reduction of non-essential personnel, as the rig was idle from December 2008 through June 2010.

Other contract drilling costs for fiscal year 2010 were relatively consistent with fiscal year 2009.

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Depreciation—Depreciation expense for fiscal year 2010 increased $1.9 million, or 5%, as compared to fiscal year 2009. A comparative analysis of depreciation expense by rig for fiscal years 2010 and 2009 is as follows:

	Depreciation Expense (In millions)
	Fiscal Year 2010		Fiscal Year 2009		Variance
Atwood Aurora	$	7.3	$	3.3	$	4.0
Atwood Eagle		4.8		4.5		0.3
Richmond		1.7		1.7		—
Atwood Hunter		6.3		6.3		—
Atwood Falcon		5.4		5.5		(0.1	)
Atwood Beacon		4.6		4.8		(0.2	)
Seahawk		2.0		2.3		(0.3	)
Vicksburg		2.0		2.4		(0.4	)
Atwood Southern Cross		2.4		3.8		(1.4	)
Other		0.5		0.5		—
	$	37.0	$	35.1	$	1.9

The Atwood Aurora incurred a full year of depreciation expense in the fiscal year 2010 compared to approximately five months of depreciation expense in fiscal year 2009 as the rig was placed into service during late April 2009.

Depreciation expense for all other rigs remained relatively consistent with fiscal year 2009.

General and administrative—General and administrative expenses for fiscal year 2010 increased approximately 28% compared to fiscal year 2009 primarily due to rising personnel costs resulting, in part, from various expenses related to the transition of executive leadership, wage increases and increased annual bonus and share-based compensation costs during fiscal year 2010. Interest expense and interest income has remained relatively consistent during fiscal years 2010 and 2009.

Income Taxes—As a result of working in foreign jurisdictions, we earned a high level of operating income in certain nontaxable and deemed profit tax jurisdictions, which significantly reduced our effective tax rate for fiscal years 2010 and 2009 when compared to the United States statutory rate.

However, during fiscal year 2010, our low effective tax rate was partially offset by the recording of a $16.5 million valuation allowance on deferred tax assets related to our United States net operating loss carryforwards (“NOLs”) which primarily accounts for the increase in our effective tax rate of 20% during fiscal year 2010 compared to 15% in fiscal year 2009. Even though the NOLs do not commence expiring until 2025, due to the current uncertainties in the United States offshore drilling market, including uncertainties resulting from the Macondo incident, we cannot be assured that sufficient future United States taxable income will be generated in order to utilize these NOLs and related deferred tax assets. In addition, if any future NOLs or related deferred tax assets are generated, we expect to provide a full valuation allowance on such assets until we are sufficiently assured of their utilization.

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LIQUIDITY AND CAPITAL RESOURCES

Capital expenditures totaled $515 million for fiscal year 2011. During fiscal year 2011, capital expenditures and working capital needs were funded by cash flows from operations of approximately $340 million and borrowings under our credit facility of $290 million, with the resulting excess increasing our cash and cash equivalents to $295 million as of September 30, 2011. Cash flows from operations of $340 million increased $34 million as compared to approximately $306 million for the prior fiscal year, primarily due to the increase in net income over prior fiscal year and a decrease of accounts receivable attributable to improved collection efforts and more timely payments from our customers.

Although our cash and cash equivalents have increased to $295 million as of September 30, 2011 from $181 million as of September 30, 2010, our working capital has only increased to $302 million from $267 million for the same fiscal year end periods primarily due to a $76 million increase in accounts payable as of September 30, 2011 which includes accrued but unpaid invoices related to the ongoing construction of the Atwood Condor.

To date, general inflationary trends have not had a material effect on our operating revenues or expenses.

Revolving Credit Facility

As of September 30, 2011, we had $520 million of outstanding borrowings under our five-year $750 million senior secured revolving credit facility, which we entered into in May 2011 (“2011 Credit Agreement”), for a total debt to capitalization ratio of 24%. As of November 21, 2011, no additional funds had been borrowed subsequent to September 30, 2011. Borrowings under the 2011 Credit Agreement bear interest of the Eurodollar rate plus a margin of 2.50% (approximately 2.8% per annum at September 30, 2011). Certain borrowings effectively bear interest at a fixed rate due to our interest rate swaps. The 2011 Credit Agreement also provides for the issuance, when required, of standby letters of credit. The 2011 Credit Agreement has a commitment fee of 1.0% per annum on the unused portion of the underlying commitment.

The 2011 Credit Agreement contains various financial covenants that impose a maximum leverage ratio of 4.0 to 1.0, a debt to capitalization ratio of 0.5 to 1.0, a minimum interest expense coverage ratio of 3.0 to 1.0 and a minimum collateral maintenance of 150% of the aggregate amount outstanding under the credit facility. In addition, the 2011 Credit Agreement contains limitations on our ability to incur liens; merge, consolidate or sell substantially all assets; pay cash dividends; incur additional indebtedness; make advances, investments or loans; and transact with affiliates. The 2011 Credit Agreement also contains customary events of default, including but not limited to delinquent payments, bankruptcy filings, material adverse judgments, guarantees or security documents not being in full effect, non-compliance with the Employee Retirement Income Security Act of 1974, cross-defaults under other debt agreements, or a change of control. The 2011 Credit Agreement is secured primarily by first preferred mortgages on six of our active drilling units (the Atwood Aurora, the Atwood Beacon, the Atwood Eagle, the Atwood Falcon, the Atwood Hunter, and the Atwood Osprey). We were in compliance with all financial covenants under the 2011 Credit Agreement at September 30, 2011.

Prior to the execution of the 2011 Credit Agreement, we had a five-year $300 million credit facility executed in October 2007 (as amended from time to time, the “2007 Credit Agreement”) and a five-year $280 million credit facility executed in November 2008 (as amended from time to time, the “2008 Credit Agreement”). Both the 2008 Credit Agreement and the 2007 Credit Agreement were retired in May 2011 with funding from the 2011 Credit Agreement.

Capital Expenditures

We estimate that our total capital expenditures for fiscal year 2012 will be approximately $775 million, substantially all of which is contractually committed. These capital expenditures are expected to be funded with existing cash balances on hand, cash flows from operations and additional borrowings under our credit facility. We expect to end fiscal year 2012 with outstanding long-term debt between $725 million and $775 million. As of September 30, 2011, we had expended approximately $650 million on our five drilling units under construction at such time. In October 2011, we exercised an option to construct a second ultra-deepwater drillship, the Atwood Achiever, at the DSME shipyard in South Korea. The Atwood Achiever is expected to be delivered by June 2014 at a total cost, including project management, drilling, handling tools and spares, of approximately $600 million. The expected remaining costs for our six drilling units under construction are as follows (in millions):

13

Fiscal   2012	Fiscal   2013		Fiscal   2014		Fiscal   2015		Total
$705	$	360	$	815	$	—	$	1,880

We believe that we will be able to fund primarily all of our additional construction costs prior to mid-fiscal year 2014 with cash on hand, cash flow from operations and borrowings under our revolving credit facility, which has provisions to increase the total commitment to $1.1 billion. We expect to fund any remaining construction costs with additional debt incurrences. We may seek to access the capital markets to fund a portion of our construction program.

Other

From time to time, we may seek possible expansion and acquisition opportunities relating to our business, which may include the construction or acquisition of rigs or other businesses in addition to those described in this annual report. Such determinations will depend on market conditions and opportunities existing at that time, including with respect to the market for drilling contracts and day rates and the relative costs associated with such expansions or acquisitions. The timing, success or terms of any such efforts and the associated capital commitments are not currently known. In addition to cash on hand, cash flow from operations and borrowings under our revolving credit facility, we may seek to access the capital markets to fund such opportunities. Our ability to access the capital markets depends on a number of factors, including, among others, our credit rating, industry conditions, general economic conditions, market conditions and market perceptions of us and our industry. In addition, we continually review the possibility of disposing of assets that we do not consider core to our long-term business plan.

In addition, in the future, we may seek to redeploy our assets to more active regions if we have the opportunity to do so on attractive terms. We frequently bid for or negotiate with customers regarding multi-year contracts that could require significant capital expenditures and mobilization costs. We expect to fund these opportunities primarily with cash on hand, cash flow from operations and borrowings under our revolving credit facility.

OFF-BALANCE SHEET ARRANGEMENTS

We have no off-balance sheet arrangements as that term is defined in Item 303(a)(4)(ii) of Regulations S-K.

COMMITMENTS AND CONTRACTUAL OBLIGATIONS

The following table summarizes our obligations and commitments (in thousands) as of September 30, 2011:

	Fiscal 2012		Fiscal 2013		Fiscal 2014		Fiscal 2015		Fiscal 2016 and thereafter		Total
Debt (1)	$	11,611	$	6,150	$	6,150	$	—	$	520,000	$	543,911
Purchase Commitments (2)		506,000		333,000		315,000		—		—		1,154,000
Operating Leases (3)		1,484		1,280		1,258		290		—		4,312
	$	519,095	$	340,430	$	322,408	$	290	$	520,000	$	1,702,223

(1) Amounts include notes payable, the 2011 credit facility, and the known fixed interest payments on our 2011 Credit Agreement.

(2) Does not include commitments related to the Atwood Achiever, as the construction contract for this rig was executed subsequent to September 30, 2011.

(3) We enter into operating leases in the normal course of business. Some lease agreements provide us with the option to renew the leases. Our future operating lease payments would change if we exercised these renewal options and if we entered into additional operating lease agreements.

14

CRITICAL ACCOUNTING POLICIES

Significant accounting policies are included in Note 2 to our Consolidated Financial Statements for the year ended September 30, 2011. These policies, along with the underlying assumptions and judgments made by management in their application, have a significant impact on our consolidated financial statements. We identify our most critical accounting policies as those that are the most pervasive and important to the portrayal of our financial position and results of operations, and that require the most difficult, subjective and/or complex judgments by management regarding estimates about matters that are inherently uncertain. Our most critical accounting policies are those related to revenue recognition, property and equipment, impairment of assets, income taxes, and employee stock-based compensation.

Revenue Recognition

We account for contract drilling revenue in accordance with the terms of the underlying drilling contract. These contracts generally provide that revenue is earned and recognized on a daily rate (i.e. “day rate”) basis, and day rates are typically earned for a particular level of service over the life of a contract. Day rate contracts can be performed for a specified period of time or the time required to drill a specified well or number of wells. Revenues from day rate drilling operations, which are classified under contract drilling services, are recognized on a per day basis as services are performed assuming collectability is reasonably assured.

Deferred fees and costs

Fees received prior to the commencement of the drilling contract as compensation for the cost of relocating drilling rigs from one major operating area to another, equipment and upgrade costs reimbursed by the customer, as well as receipt of advance billings of day rates are recognized as earned on a straight-line method over the expected term of the related drilling contract, as are the day rates associated with such contracts. However, fees received upon termination of a drilling contract are generally recognized as earned during the period termination occurs as the termination fee is usually conditional based on the occurrence of an event as defined in the drilling contract, such as obtaining follow on work to the contract in progress or relocation beyond a certain distance when the contract is completed. In addition, we defer the mobilization costs relating to moving a drilling rig to a new area which are incurred prior to the commencement of the drilling contract and customer requested equipment purchases that will revert to the customer at the end of the applicable drilling contract. We amortize such costs on a straight-line basis over the life of the applicable drilling contract. Contract revenues and drilling costs are reported in the Consolidated Statements of Operations at their gross amounts.

Property and Equipment

Property and equipment is stated at cost, reduced by provisions to recognize economic impairment in value whenever events or changes in circumstances indicate an asset’s carrying value may not be recoverable. At September 30, 2011, the carrying value of our property and equipment totaled approximately $1.9 billion, which represents approximately 79% of our total assets. The carrying value reflects the application of our property and equipment accounting policies, which incorporate estimates, assumptions and judgments by management relative to the useful lives and salvage values of our units. Once rigs and related equipment are placed in service, they are depreciated on the straight-line method over their estimated useful lives, with depreciation discontinued only during the period when a drilling unit is out of service while undergoing a significant upgrade that extends its useful life. The estimated useful lives of our drilling units and related equipment can range from 3 years to 35 years and our salvage values are generally based on 5% of capitalized costs. Any future increases in our estimates of useful lives or salvage values will have the effect of decreasing future depreciation expense in any one year while spreading the expense out to later years. Any future decreases in our useful lives or salvage values will have the effect of accelerating future depreciation expense.

We evaluate the carrying value of our property and equipment when events or changes in circumstances indicate that the carrying value of such assets may be impaired. In evaluating the need for impairment, we utilize a number of methodologies in the evaluation of our rigs including both a market-based and a modified income-based approach based on potential cash flows. An impairment loss on our property and equipment exists when both the market-based approach and the estimated undiscounted cash flows expected to result from the use of the asset and its eventual disposition are less than the asset’s carrying value. Asset impairment evaluations are, by nature, highly subjective.

15

Operations of our drilling equipment are subject to the offshore drilling requirements of oil and gas exploration and production companies and agencies of foreign governments. These requirements are, in turn, subject to fluctuations in government policies, world demand and price for petroleum products, proved reserves in relation to such demand and the extent to which such demand can be met from onshore sources. The critical estimates which result from these dynamics include projected utilization, day rates, and operating expenses, each of which impacts our estimated future cash flows. Over the last ten years, our equipment utilization rate has averaged approximately 94%; however, if a drilling unit incurs significant idle time or receives day rates below operating costs, its carrying value could become impaired.

The estimates, assumptions and judgments used by management in the application of our property and equipment and asset impairment policies reflect both historical experience and expectations regarding future industry conditions and operations. The use of different estimates, assumptions and judgments, especially those involving the useful lives of our rigs and vessels and expectations regarding future industry conditions and operations, would likely result in materially different carrying values of assets and results of operations.

Income Taxes

We conduct operations and earn income in numerous foreign countries and are subject to the laws of taxing jurisdictions within those countries, as well as United States federal and state tax laws. At September 30, 2011, we have an approximate $9.8 million net deferred income tax liability. This balance reflects the application of our income tax accounting policies in accordance with Accounting Standards Codification (“ASC”) 740. Such accounting policies incorporate estimates, assumptions and judgments by management relative to the interpretation of applicable tax laws, the application of accounting standards, and future levels of taxable income. The estimates, assumptions and judgments used by management in connection with accounting for income taxes reflect both historical experience and expectations regarding future industry conditions and operations. Changes in these estimates, assumptions and judgments could result in materially different provisions for deferred and current income taxes.

We account for uncertain tax positions in accordance with ASC 740. ASC 740 prescribes a comprehensive model for how companies should recognize, measure, present and disclose in their financial statements uncertain tax positions taken or to be taken on a tax return. The income tax laws and regulations are voluminous and are often ambiguous. As such, we are required to make many subjective assumptions and judgments regarding our tax positions that can materially affect amounts recognized in our consolidated balance sheets and statements of income.

Employee Share based Compensation

We account for share-based compensation in accordance with ASC 718. Under ASC 718, share-based compensation cost is measured at the grant date, based on the calculated fair value of the award, and is recognized as an expense over the requisite service period (generally the vesting period of the equity grant). In addition, share-based compensation cost recognized includes compensation cost for unvested share-based awards as of October 1, 2005.

RECENTLY ISSUED ACCOUNTING PRONOUNCEMENTS

In June 2011, the Financial Accounting Standards Board (“FASB”), issued Accounting Standards Update (“ASU”) 2011-05, “Comprehensive Income (Topic 220): Presentation of Comprehensive Income,” which amends the presentation requirements for comprehensive income and requires that all non-owner changes in stockholders; equity be presented either as a single continuous statement of comprehensive income or in two separate but consecutive statements. Additionally, the update requires presentation of reclassification adjustments on the face of the financial statement. The update is effective for interim and annual periods beginning after December 15, 2011, with early adoption permitted. We adopted the amendments in this update on June 30, 2011 with no material impact on our consolidated financial statements or disclosures in our financial statements.

In May 2011, the FASB issued ASU 2011-04, “Fair Value Measurement (Topic 820): Amendments to Achieve Common Fair Value Measurement and Disclosure Requirements in U.S. GAAP and IFRS”. The amendment clarifies existing fair value measurement and disclosure requirements, amends certain fair value measurement principles and requires additional disclosures about fair value measurements. ASU 2011-04 is effective for interim and annual periods beginning after December 15, 2011. We will adopt the accounting standards effective January 1, 2012. We do not expect that our adoption will have a material effect on our financial statements or disclosures in our financial statements.

16

In April 2010, the FASB issued ASU 2010-13, “Compensation—Stock Compensation” (Topic 718). The amendment provides updated guidance on the classification of a share-based payment award as either equity or a liability. The objective of this update is to address the classification of an employee share-based payment award with an exercise price denominated in the currency of a market in which the underlying equity security trades. A share-based payment award that contains a condition that is not a market, performance, or service condition is required to be classified as a liability. We adopted the amendments in this update on October 1, 2010, with no material impact on our financial statements or disclosures in our financial statements.

DISCLOSURES ABOUT MARKET RISK

We are exposed to market risk, including adverse changes in interest rates and foreign currency exchange rates as discussed below.

Interest Rate Risk

The provisions of the 2011 Credit Agreement provide for a variable interest rate cost on our $520 million outstanding as of September 30, 2011. However, we employ an interest rate risk management strategy that utilizes derivative instruments with respect to $200 million as of September 30, 2011 in order to minimize or eliminate unanticipated fluctuations in earnings and cash flows arising from changes in, and volatility of, interest rates. Effectively, only $320 million of our long-term debt outstanding is subject to changes in interest rates. Thus, a 10% change in the interest rate on the floating rate debt would have an immaterial impact on our annual earnings and cash flows.

Foreign Currency Risk

As a multinational company, we conduct business in numerous foreign countries. Our functional currency is the U.S. dollar, which is consistent with industry’s practice. Certain of our subsidiaries have monetary assets and liabilities that are denominated in a currency other than our functional currency. Based on September 30, 2011 amounts, a decrease in the value of 10% in foreign currencies relative to the U.S. dollar would have an immaterial effect to our annual earnings and cash flows. We did not have any open derivative contracts relating to foreign currencies at September 30, 2011.

17

MANAGEMENT’S REPORT ON INTERNAL CONTROL OVER FINANCIAL REPORTING

Management of Atwood Oceanics, Inc. (which together with its subsidiaries is identified as the “Company,” “we” or “our,” unless stated otherwise or the context requires otherwise) is responsible for establishing and maintaining adequate internal control over financial reporting as defined in Rules 13a-15(f) and 15d-15(f) under the Securities Exchange Act of 1934. Our internal control over financial reporting was designed by management, under the supervision of the Chief Executive Officer and Chief Financial Officer, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with accounting principles generally accepted in the United States of America, and includes those policies and procedures that:

(i) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the Company;

(ii) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with accounting principles generally accepted in the United States of America, and that receipts and expenditures of the Company are being made only in accordance with authorizations of management and directors of the Company; and

(iii) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or disposition of the Company’s assets that could have a material effect on the financial statements.

Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies and procedures may deteriorate.

Management assessed the effectiveness of the Company’s internal control over financial reporting as of September 30, 2011. In making this assessment, management used the criteria set forth by the Committee of Sponsoring Organizations of the Treadway Commission in Internal Control-Integrated Framework.

Based on our evaluation under the criteria in Internal Control-Integrated Framework, management has concluded that the Company maintained effective internal control over financial reporting as of September 30, 2011. PricewaterhouseCoopers LLP, our independent registered public accounting firm, has issued an attestation report on the effectiveness of the Company’s internal control over financial reporting as of September 30, 2011, which appears on the following page.

ATWOOD OCEANICS, INC.
by
/s/ Robert J. Saltiel	/s/ Mark L. Mey
Robert J. Saltiel	Mark L. Mey
President and	Senior Vice President and
Chief Executive Officer	Chief Financial Officer
November 22, 2011

18

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Board of Directors and Shareholders of Atwood Oceanics, Inc.

In our opinion, the accompanying consolidated balance sheets and the related consolidated statements of operations, of cash flows and of changes in shareholders’ equity present fairly, in all material respects, the financial position of Atwood Oceanics, Inc. and its subsidiaries at September 30, 2011 and 2010, and the results of their operations and their cash flows for each of the three years in the period ended September 30, 2011 in conformity with accounting principles generally accepted in the United States of America. Also in our opinion, the Company maintained, in all material respects, effective internal control over financial reporting as of September 30, 2011, based on criteria established in Internal Control—Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission. The Company’s management is responsible for these financial statements, for maintaining effective internal control over financial reporting and for its assessment of the effectiveness of internal control over financial reporting, included in the accompanying Management’s Report on Internal Control Over Financial Reporting. Our responsibility is to express opinions on these financial statements and on the Company’s internal control over financial reporting based on our integrated audits. We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audits to obtain reasonable assurance about whether the financial statements are free of material misstatement and whether effective internal control over financial reporting was maintained in all material respects. Our audits of the financial statements included examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, and evaluating the overall financial statement presentation. Our audit of internal control over financial reporting included obtaining an understanding of the Company’s internal control over financial reporting, assessing the risk that a material weakness exists, and testing and evaluating the design and operating effectiveness of internal control based on the assessed risk. Our audits also included performing such other procedures as we considered necessary in the circumstances. We believe that our audits provide a reasonable basis for our opinions.

A company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company’s internal control over financial reporting includes those policies and procedures that (i) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (ii) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (iii) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s assets that could have a material effect on the financial statements.

Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

/s/ PricewaterhouseCoopers LLP

Houston, Texas

November 22, 2011

19

Atwood Oceanics, Inc. and Subsidiaries

CONSOLIDATED BALANCE SHEETS

	September 30,
(In thousands)	2011			2010
ASSETS
Current assets:
Cash and cash equivalents	$	295,002		$	180,523
Accounts receivable		87,173			96,463
Income tax receivable		5,631			16,052
Inventories of materials and supplies		58,263			52,749
Prepaid expenses and deferred costs		14,862			14,207
Total current assets		460,931			359,994
Property and equipment, net		1,887,321			1,343,961
Other receivables		11,875			15,799
Deferred costs and other assets		15,264			4,686
Total assets	$	2,375,391		$	1,724,440
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Accounts payable	$	113,021		$	37,192
Accrued liabilities		30,680			25,368
Notes payable		5,461			—
Income tax payable		8,461			26,367
Deferred credits		1,700			4,533
Total Current Liabilities		159,323			93,460
Long-term debt		520,000			230,000
Deferred income taxes		9,780			10,845
Deferred credits		7,910			2,919
Other long-term liabilities		25,591			17,082
Total long-term liabilities		563,281			260,846
Commitments and contingencies (Note 12)
Shareholders’ equity (Note 8):
Preferred stock, no par value; 1,000 shares authorized, none outstanding		—			—
Common stock, $1 par value, 90,000 shares authorized with 64,960 and 64,443 issued and outstanding at September 30, 2011 and 2010, respectively		64,960			64,443
Paid-in capital		145,084			133,095
Retained earnings		1,444,270			1,172,596
Accumulated other comprehensive loss		(1,527	)		—
Total shareholders’ equity		1,652,787			1,370,134
Total liabilities and shareholders’ equity	$	2,375,391		$	1,724,440

The accompanying notes are an integral part of these consolidated financial statements.

20

Atwood Oceanics, Inc. and Subsidiaries

CONSOLIDATED STATEMENTS OF OPERATIONS

	Years Ended September 30,
(In thousands, except per share amounts)	2011			2010			2009
Operating revenues
Contract drilling	$	645,076		$	650,562		$	586,507
Operating costs and expenses
Contract drilling		223,565			252,427			221,709
Depreciation		43,597			37,030			35,119
General and administrative		44,407			40,620			31,639
Other, net		4,847			(1,855	)		(402	)
		316,416			328,222			288,065
Operating income		328,660			322,340			298,442
Other income (expense):
Interest expense, net of capitalized interest		(4,530	)		(2,725	)		(2,293	)
Interest income		717			364			282
		(3,813	)		(2,361	)		(2,011	)
Income before income taxes		324,847			319,979			296,431
Provision for income taxes		53,173			62,983			45,686
Net income	$	271,674		$	256,996		$	250,745
Earnings per common share (Note 2):
Basic	$	4.20		$	3.99		$	3.91
Diluted	$	4.15		$	3.95			3.89
Average common shares outstanding (Note 2):
Basic		64,754			64,391			64,167
Diluted		65,403			65,028			64,493

The accompanying notes are an integral part of these consolidated financial statements.

21

Atwood Oceanics, Inc. and Subsidiaries

CONSOLIDATED STATEMENTS OF CASH FLOWS

	Years Ended September 30,
(In thousands)	2011			2010			2009
Cash flows from operating activities:
Net income	$	271,674		$	256,996		$	250,745
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation		43,597			37,030			35,119
Amortization of debt issuance costs		2,363			803			717
Amortization of deferred items		3,333			13,755			(15,902	)
Provision for doubtful accounts		—			(65	)		1,002
Provision for inventory obsolescence		735			1,123			680
Deferred income tax (benefit) expense		(1,065	)		4,798			(4,527	)
Share-based compensation expense		6,314			9,998			7,664
Other, net		4,847			(1,855	)		(402	)
Change in assets and liabilities:
(Increase) decrease in accounts receivable		13,214			26,187			(4,819	)
Decrease in insurance receivable		—			281			—
(Increase) decrease in income tax receivable		10,421			(7,746	)		(5,014	)
Increase in inventory		(6,249	)		(3,736	)		(12,910	)
(Increase) decrease in prepaid expenses		845			(179	)		(1,892	)
Increase in deferred costs and other assets		(10,379	)		(10,321	)		(9,825	)
Increase (decrease) in accounts payable		(1,173	)		4,735			(11	)
Increase (decrease) in accrued liabilities		4,440			(854	)		(43	)
Increase (decrease) in income tax payable		(17,906	)		(2,700	)		13,058
Increase (decrease) in deferred credits and other liabilities		14,777			(21,850	)		51,262
Net increase in Operating Capital		68,114			49,404			54,157
Net Cash Provided by Operating Activities		339,788			306,400			304,902
Cash flows from investing activities:
Capital expenditures		(514,858	)		(187,094	)		(430,470	)
Collection of insurance receivable		—			3,607			1,822
Proceeds from sale of assets		218			1,504			330
Net Cash Used by Investing Activities		(514,640	)		(181,983	)		(428,318	)
Cash flows from financing activities:
Principal payments on bank credit facilities		(55,000	)		(45,000	)		(50,000	)
Proceeds from bank credit facilities		345,000			—			155,000
Principal payments on notes payable		(3,631	)		—			—
Proceeds from notes payable		9,092			—			—
Debt issuance costs paid		(12,322	)		—			(2,611	)
Proceeds from exercise of stock options		6,192			847			194
Net Cash Provided (Used) by Financing Activities		289,331			(44,153	)		102,583
Net increase (decrease) in cash and cash equivalents	$	114,479		$	80,264		$	(20,833	)
Cash and cash equivalents, at beginning of period	$	180,523		$	100,259		$	121,092
Cash and cash equivalents, at end of period	$	295,002		$	180,523		$	100,259

The accompanying notes are an integral part of these consolidated financial statements.

22

Atwood Oceanics, Inc. and Subsidiaries

CONSOLIDATED STATEMENTS OF CHANGES IN

SHAREHOLDERS’ EQUITY

	Common Stock				Paid-in			Retained		Accumulated Other Comprehensive			Total Stockholders’
(In thousands)	Shares		Amount		Capital			Earnings		Loss			Equity
September 30, 2008		64,031	$	64,031	$	114,804		$	664,855	$	—		$	843,690
Net income		—		—		—			250,745		—			250,745
Restricted stock awards		185		185		(185	)		—		—			—
Exercise of employee stock options		20		20		174			—		—			194
Stock option and restricted stock award compensation expense		—		—		7,664			—		—			7,664
September 30, 2009		64,236		64,236		122,457			915,600		—			1,102,293
Net income		—		—		—			256,996		—			256,996
Restricted stock awards		145		145		(145	)				—			—
Exercise of employee stock options		62		62		785			—		—			847
Stock option and restricted stock award compensation expense		—		—		9,998			—		—			9,998
September 30, 2010		64,443		64,443		133,095			1,172,596		—			1,370,134
Net income		—		—		—			271,674		—			271,674
Other comprehensive loss		—		—		—			—		(1,527	)		(1,527	)
Restricted stock awards		102		102		(102	)				—			—
Exercise of employee stock options		415		415		5,777			—		—			6,192
Stock option and restricted stock award compensation expense		—		—		6,314			—		—			6,314
September 30, 2011		64,960	$	64,960	$	145,084		$	1,444,270	$	(1,527	)	$	1,652,787

The accompanying notes are an integral part of these consolidated financial statements.

23

Atwood Oceanics, Inc. and Subsidiaries

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

	Years Ended September 30,
(In thousands)	2011			2010		2009
Net income	$	271,674		$	256,996	$	250,745
Other comprehensive loss
Loss on interest rate swaps		(1,527	)		—		—
Other comprehensive loss		(1,527	)		—		—
Total comprehensive income	$	270,147		$	256,996	$	250,745

The accompanying notes are an integral part of these consolidated financial statements.

24

Atwood Oceanics, Inc. and Subsidiaries

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTE 1—NATURE OF OPERATIONS

This Annual Report is for Atwood Oceanics, Inc. and its subsidiaries, which are collectively referred to herein as the “Company,” “we,” “us” or “our” except where stated or the context indicates otherwise. We are an international offshore drilling contractor engaged in the drilling and completion of exploratory and developmental oil and gas wells. We currently own a diversified fleet of 10 mobile offshore drilling units located in the U.S. Gulf of Mexico, South America, the Mediterranean Sea, West Africa, Southeast Asia and Australia and are constructing an ultra-deepwater semisubmersible rig, two ultra-deepwater drillships and three high specification jack-up rigs for delivery in 2012 through 2014. We were founded in 1968 and are headquartered in Houston, Texas with other offices in Australia, Egypt, South Korea, Malaysia, Singapore and the United Kingdom.

NOTE 2—SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Consolidation

The consolidated financial statements include the accounts of Atwood Oceanics, Inc. and all of its domestic and foreign subsidiaries. All significant intercompany accounts and transactions have been eliminated in consolidation.

Cash and cash equivalents

Cash and cash equivalents consist of cash in banks and highly liquid debt instruments, which mature within three months of the date of purchase.

Foreign exchange

The U.S. Dollar is the functional currency for all areas of our operations. Accordingly, monetary assets and liabilities denominated in foreign currency are re-measured to U.S. Dollars at the rate of exchange in effect at the end of the fiscal year, items of income and expense are re-measured at average monthly rates, and property and equipment and other nonmonetary amounts are re-measured at historical rates. Gains and losses on foreign currency transactions and re-measurements are included in contract drilling costs in our consolidated statements of operations. We recorded foreign exchange losses of $0.9 million, $0.1 million and $0.5 million, during fiscal years 2011, 2010 and 2009, respectively. We did not disclose the re-measurement losses on the statement of cash flows due to the immaterial nature of the amounts.

Accounts receivable

We record trade accounts receivable at the amount we invoice our customers. Our portfolio of accounts receivable is comprised of major international corporate entities and government organizations with stable payment experience. Included within accounts receivable at September 30, 2011, and 2010 are unbilled receivable balances totaling $1.1 million and $1.0 million, respectively, which represent amounts for which services have been performed, revenue has been recognized based on contractual provisions and for which collection is deemed probable. Such unbilled amounts were billed subsequent to their respective fiscal year end. Historically, our uncollectible accounts receivable have been immaterial, and typically, we do not require collateral for our receivables. We provide an allowance for uncollectible accounts, as necessary, on a specific identification basis. We have no allowance for doubtful accounts at September 30, 2011 or 2010.

25

Inventories of material and supplies

Inventories consist of spare parts, material and supplies held for consumption and are stated principally at the lower of average cost or market value, net of reserves for excess and obsolete inventory of $2.5 million and $2.0 million at September 30, 2011, and 2010, respectively.

Income taxes

We account for income taxes in accordance with Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) 740. Under ASC 740, deferred income taxes are recorded to reflect the tax consequences on future years of differences between the tax basis of assets and liabilities and their financial reporting amounts at each year-end given the provisions of enacted tax laws in each respective jurisdiction. Deferred tax assets are reduced by a valuation allowance when, based upon management’s estimates, it is more likely than not that a portion of the deferred tax assets will not be realized in a future period. In addition, we accrue for income tax contingencies, or uncertain tax positions, that we believe are more likely than not exposures. See Note 7 for further discussion.

Property and equipment

Property and equipment are recorded at historical cost. Interest costs related to property under construction are capitalized as a component of construction costs. Interest capitalized during fiscal years 2011, 2010 and 2009 was $8.2 million, $3.9 million and $8.8 million, respectively.

Once rigs and related equipment are placed in service, they are depreciated on the straight-line method over their estimated useful lives, with depreciation discontinued only during the period when a drilling unit is out of service while undergoing a significant upgrade that extends its useful life. Our estimated useful lives of our various classifications of assets are as follows:

	Years
Drilling vessels and related equipment Drill pipe Furniture and other		5-35 3 3-10

Effective July 1, 2010, we extended the remaining depreciable life of the Atwood Southern Cross from one year to five years, based upon completion of a life enhancing upgrade, as the rig is technically capable of working over this revised period.

Effective October 1, 2008, we extended the remaining depreciable life of the Seahawk from one year to five years based upon the length of its then current contract commitment coupled with the fact that rig is technically capable of working over this revised period.

Maintenance, repairs and minor replacements are charged against income as incurred. Major replacements and upgrades are capitalized and depreciated over the remaining useful life of the asset, as determined upon completion of the work. The cost and related accumulated depreciation of assets sold, retired or otherwise disposed are removed from the accounts at the time of disposition, and any resulting gain or loss is reflected in the Consolidated Statements of Operations for the applicable periods.

Impairment of property and equipment

We periodically evaluate our property and equipment to determine whether their net carrying value is in excess of their net realizable value. These evaluations are performed when we have sustained significant declines in utilization and day rates, and recovery is not contemplated in the near future. We consider a number of factors such as estimated future cash flows, appraisals and current market value analysis in determining an asset’s fair value. Assets are written down to their fair value if the carrying amount of the asset is not recoverable and exceeds its fair value.

We recorded an impairment charge of $5.0 million during fiscal year 2011 related to certain idled equipment.

26

Deferred drydocking costs

We defer the costs of scheduled drydocking and charge such costs to contract drilling expense over the period to the next scheduled drydocking (normally 30 months). At September 30, 2011, and 2010, deferred drydocking costs totaling $2.2 million and $1.5 million, respectively, were included in Deferred Costs and Other Assets in the accompanying Consolidated Balance Sheets.

Revenue recognition

We account for contract drilling revenue in accordance with the terms of the underlying drilling contract. These contracts generally provide that revenue is earned and recognized on a daily rate (i.e. “day rate”) basis, and day rates are typically earned for a particular level of service over the life of a contract. Day rate contracts can be performed for a specified period of time or the time required to drill a specified well or number of wells. Revenues from day rate drilling operations, which are classified under contract drilling services, are recognized on a per day basis as services are performed assuming collectability is reasonably assured.

Deferred fees and costs

Fees received prior to the commencement of the drilling contract as compensation for the cost of relocating drilling rigs from one major operating area to another, equipment and upgrade costs reimbursed by the customer, as well as receipt of advance billings of day rates are recognized as earned on a straight-line method over the expected term of the related drilling contract, as are the day rates associated with such contracts. However, fees received upon termination of a drilling contract are generally recognized as earned during the period termination occurs as the termination fee is usually conditional based on the occurrence of an event as defined in the drilling contract, such as obtaining follow on work to the contract in progress or relocation beyond a certain distance when the contract is completed. In addition, we defer the mobilization costs relating to moving a drilling rig to a new area which are incurred prior to the commencement of the drilling contract and customer requested equipment purchases that will revert to the customer at the end of the applicable drilling contract. We amortize such costs on a straight-line basis over the life of the applicable drilling contract. Contract revenues and drilling costs are reported in the Consolidated Statements of Operations at their gross amounts.

At September 30, 2011 and 2010, deferred fees associated with mobilization, related equipment purchases and upgrades and receipt of advance billings of day rates totaled $9.6 million and $7.5 million, respectively. At September 30, 2011 and 2010, deferred costs associated with mobilization and related equipment purchases and upgrades totaled $2.8 million and $1.7 million, respectively. Deferred fees and deferred costs are classified as current or long-term deferred credits and deferred costs, respectively, in the accompanying Consolidated Balance Sheets based on the expected term of the applicable drilling contracts.

Share-based compensation

We account for share-based compensation in accordance with ASC 718. Under ASC 718, share-based compensation cost is measured at the grant date, based on the calculated fair value of the award, and is recognized as an expense over the requisite service period (generally the vesting period of the equity grant). See Note 3 for additional information regarding share-based compensation.

Earnings per common share

Basic and diluted earnings per share, or EPS, have been computed in accordance with ASC 260. Basic EPS excludes dilution and is computed by dividing net income (loss) by the weighted-average number of common shares outstanding for the period. Diluted EPS reflects the assumed effect of the issuance of additional shares in connection with the exercise of stock options. In accordance with ASC 718, we have also included the impact of pro forma deferred tax assets in calculating the potential windfall and shortfall tax benefits to determine the amount of diluted shares using the treasury stock method.

27

The computation of basic and diluted earnings per share under ASC 260 for each of the past three fiscal years is as follows (in thousands, except per share amounts):

	Net Income		Shares		Per Share Amount
Fiscal 2011:
Basic earnings per share	$	271,674		64,754	$	4.20
Effect of dilutive securities—
Stock options		—		649		(0.05	)
Diluted earnings per share	$	271,674		65,403	$	4.15
Fiscal 2010:
Basic earnings per share	$	256,996		64,391	$	3.99
Effect of dilutive securities—
Stock options		—		637		(0.04	)
Diluted earnings per share	$	256,996		65,028	$	3.95
Fiscal 2009:
Basic earnings per share	$	250,745		64,167	$	3.91
Effect of dilutive securities—
Stock options		—		326		(0.02	)
Diluted earnings per share	$	250,745		64,493	$	3.89

The calculation of diluted earnings per share for fiscal years 2011, 2010 and 2009 exclude consideration of shares of common stock which may be issued in connection with outstanding stock options of 664,000, 500,000 and 316,000, respectively, because such options were anti-dilutive. These options could potentially dilute basic EPS in the future.

Use of estimates

The preparation of financial statements in conformity with generally accepted accounting principles in the United States (“GAAP”) requires management to make extensive use of estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.

Reclassifications

Certain reclassifications have been made to the prior period financial statements to conform to the current year presentation. These reclassifications did not affect the Consolidated Financial Statements reported in prior fiscal years.

NOTE 3—HARE-BASED COMPENSATION

We account for share-based compensation in accordance with ASC 718. Under ASC 718, share-based compensation cost is measured at the grant date, based on the calculated fair value of the award, and is recognized as an expense over the requisite service period, which is generally the vesting period of the equity award.

On December 7, 2006, our board of directors adopted, and our stockholders subsequently approved on February 8, 2007, the Atwood Oceanics, Inc. 2007 Long-Term Incentive Plan (as amended, the “2007 Plan”). The effective date of the 2007 Plan was December 7, 2006, and awards may be made under the 2007 Plan through December 7, 2016. Under our 2007 Plan, up to 4,000,000 shares of common stock may be issued to eligible participants in the form of restricted stock awards or upon exercise of stock options granted pursuant to the 2007 Plan. We also maintain two other stock incentive plans approved by our shareholders, the Atwood Oceanics, Inc. Amended and Restated 2001 Stock Incentive Plan (as amended, the “2001 Plan”) and the Atwood Oceanics, Inc. 1996 Incentive Equity Plan (as amended, the “1996

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Plan”), under which we have outstanding stock options and restricted stock awards. However, no additional options or restricted stock have been awarded under the 2001 or 1996 plans since the implementation of the 2007 Plan. All stock incentive plans currently in effect have been approved by our shareholders.

A summary of shares available for issuance and outstanding stock option and restricted stock awards for our three stock incentive plans as of September 30, 2011 is as follows:

	2007 Plan		2001 Plan		1996 Plan
Shares available for future awards or grants		1,895,274		—		—
Outstanding stock option grants		860,744		594,725		24,000
Outstanding unvested restricted stock awards		559,712		—		—

Awards of restricted stock and stock options have both been granted under our stock incentive plans as of September 30, 2011. We deliver newly issued shares of common stock for restricted stock awards upon vesting and upon exercise of stock options.

We recognize compensation expense on grants of share-based compensation awards on a straight-line basis over the required service period for each award. Unrecognized compensation cost, net of estimated forfeitures, related to awards of stock options and restricted stock and the related remaining weighted-average service period is as follows (in thousands, except average service periods):

	September 30,
	2011		2010
Unrecognized Compensation Cost
Stock options	$	4,964	$	4,471
Restricted stock awards		6,575		8,714
Total	$	11,539	$	13,185
Remaining weighted average service period (Years)		2.3		2.2

Stock Options

Under our stock incentive plans, the exercise price of each stock option must be equal to or greater than the fair market value of one share of our common stock on the date of grant, with all outstanding options having a maximum term of 10 years. Options vest ratably over a period ranging from the end of the first to the fourth year from the date of grant for stock options under the 2007 and 2001 Plans and from the end of the second to the fifth year from the grant date under for stock options under the 1996 Plan. Each option is for the purchase of one share of our common stock.

The total fair value of stock options vested during fiscal years 2011, 2010 and 2009 was $2.7 million, $3.0 million and $2.7 million, respectively. The per share weighted-average fair value of stock options granted during fiscal years 2011, 2010 and 2009 was $15.72, $14.69 and $5.75, respectively. We estimate the fair value of each stock option on the date of grant using the Black-Scholes pricing model and the following assumptions:

	Fiscal 2011			Fiscal 2010			Fiscal 2009
Risk-Free Interest Rate		1.9	%		2.1	%		1.5	%
Expected Volatility		44	%		43	%		42	%
Expected Life (Years)		5.2			5.3			5.2
Dividend Yield		None			None			None

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The average risk-free interest rate is based on the five-year U.S. treasury security rate in effect as of the grant date. We determined expected volatility using a six-year historical volatility figure and determined the expected term of the stock options using 10 years of historical data. The expected dividend yield is based on the expected annual dividend as a percentage of the market value of our common stock as of the grant date.

A summary of stock option activity for fiscal year 2011 is as follows:

	Number of Options (000s)			Weighted Average Exercise Price		Weighted Average Remaining Contractual Life (Years)		Aggregate Intrinsic Value  (000s)
Outstanding at October 1, 2010		1,720		$	21.58
Granted		291		$	37.41
Exercised		(391	)	$	15.04			$	10,933
Forfeited		(140	)	$	31.90
Outstanding at September 30, 2011		1,480		$	25.44		6.1	$	13,198
Exercisable at September 30, 2011		971		$	21.01		4.8	$	12,971

Restricted Stock

We have awarded restricted stock under the 2007 Plan to certain employees and to our non-employee directors. All current awards of restricted stock to employees are subject to a vesting and restriction period ranging from three to four years, subject to early termination as provided in the 2007 Plan. All awards of restricted stock to non-employee directors are subject to a vesting and restriction period of a minimum of 13 months, subject to early termination as provided in the 2007 Plan. We value restricted stock awards based on the fair market value of our common stock on the date of grant.

A summary of restricted stock activity for fiscal year 2011 is as follows:

	Number of Shares (000s)			Weighted Average Fair Value
Unvested at October 1, 2010		623		$	34.27
Granted		172		$	37.73
Vested		(102	)	$	39.53
Forfeited		(133	)	$	33.56
Unvested at September 30, 2011		560		$	34.54

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NOTE 4—PROPERTY AND EQUIPMENT

A summary of property and equipment by classification is as follows (in thousands):

	September 30,
	2011			2010
Drilling vessels and related equipment
Cost	$	2,315,419		$	1,733,298
Accumulated depreciation		(435,577	)		(392,808	)
Net book value		1,879,842			1,340,490
Drill pipe
Cost		18,182			15,468
Accumulated depreciation		(13,885	)		(13,563	)
Net book value		4,297			1,905
Furniture and other
Cost		8,800			7,115
Accumulated depreciation		(5,618	)		(5,549	)
Net book value		3,182			1,566
Property and equipment, net	$	1,887,321		$	1,343,961

New Construction Projects

During fiscal year 2008, we entered into construction contracts with Jurong Shipyard Pte. Ltd. to construct two Friede & Goldman ExD Millennium semisubmersible drilling units (the Atwood Osprey and the Atwood Condor). The Atwood Osprey was delivered in April 2011, and the Atwood Condor is scheduled for delivery in the third quarter of fiscal year 2012.

In October 2010, we entered into turnkey construction agreements with PPL Shipyard PTE LTD in Singapore (“PPL”) to construct two Pacific Class 400 jack-up drilling units (the Atwood Mako and the Atwood Manta). The Atwood Mako and the Atwood Manta are scheduled for delivery in the fourth quarter of fiscal year 2012 and the first quarter of fiscal year 2013, respectively.

In January 2011, we exercised the first of three option agreements and entered into a turnkey construction agreement with PPL to construct a third Pacific Class 400 jack-up drilling unit (the Atwood Orca). The Atwood Orca is scheduled for delivery in the third quarter of fiscal year 2013.

In January 2011, we entered into a turnkey construction contract with Daewoo Shipbuilding and Marine Engineering Co., Ltd (“DSME”) to construct an ultra-deepwater drillship, the Atwood Advantage, at the DSME yard in South Korea. The Atwood Advantage is scheduled for delivery in the fourth quarter of fiscal year 2013.

As of September 30, 2011, we had expended approximately $650 million towards the construction of our five drilling units under construction. Total remaining firm commitments for our five drilling units under construction were approximately $1.2 billion at September 30, 2011.

On October 15, 2011, we entered into a turnkey construction contract with DSME to construct an ultra-deepwater drillship, the Atwood Achiever, at the DSME yard in South Korea. The Atwood Achiever is expected to be delivered by June 30, 2014.

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Warehouse Fire

On October 25, 2008, a fire occurred in a third party warehouse facility in Houston, Texas that we use to store fleet wide spare capital equipment. In addition, this third party provides international freight forwarding services, and thus, the location was also used as a staging area for equipment shipments to our international fleet. Although the fire was contained primarily to one area of the facility, we did incur significant damage to our fleet spares and other equipment in-transit. At the time of the incident we had insurance to cover the cost of replacing and repairing damaged equipment in excess of a $1,000 deductible.

As of September 30, 2010, our claim was fully processed and deemed closed by the insurance company. We collected all insurance proceeds equal to our $6.2 million property loss claim and costs incurred to inspect and evaluate damaged equipment.

NOTE 5—LONG-TERM DEBT

A summary of long-term debt is as follows (in thousands):

	September 30, 2011		September 30, 2010
2007 credit facility, bearing interest (market adjustable) at approximately 1.1% per annum at September 30, 2010	$	—	$	180,000
2008 credit facility, bearing interest (market adjustable) at approximately 1.8% per annum at September 30, 2010	$	—	$	50,000
2011 credit facility bearing interest (market adjustable) at approximately 3.1% per annum at September 30, 2011	$	520,000	$	—
	$	520,000	$	230,000

In May 2011, we entered into a $750 million secured reducing revolving credit agreement with Nordea Bank Finland plc, New York Branch, as Administrative Agent and several lenders (the “2011 Credit Agreement”). The 2011 Credit Agreement includes provisions for incremental commitments up to $350 million, bringing the total commitment to $1.1 billion, if exercised. The maturity of the 2011 Credit Agreement is May 2016, subject to acceleration upon certain specified events of default, including but not limited to delinquent payments, bankruptcy filings, material adverse judgments, guarantees or security documents not being in full effect, non-compliance with the Employee Retirement Income Security Act of 1974, cross-defaults under other debt agreements, or a change of control. The 2011 Credit Agreement contains limitations on our ability to incur liens; merge, consolidate or sell substantially all assets; pay cash dividends; incur additional indebtedness; make advances, investments or loans; and transact with affiliates. The 2011 Credit Agreement is secured primarily by first preferred mortgages on six of our active drilling units (the Atwood Aurora, the Atwood Beacon, the Atwood Eagle, the Atwood Falcon, the Atwood Hunter, and the Atwood Osprey).

Borrowings under the 2011 Credit Agreement bear interest of the Eurodollar rate plus a margin of 2.50%. Certain borrowings effectively bear interest at a fixed rate due to our interest rate swaps. See Note 6. The 2011 Credit Agreement also provides for the issuance, when required, of standby letters of credit. Under the 2011 Credit Agreement, we will pay a commitment fee of 1.0% per annum on the unused portion of the underlying commitment. As of September 30, 2011, we have $227 million of funds available to borrow under this credit facility, with standby letters of credit issued in the aggregate amount of $3.4 million.

The 2011 Credit Agreement contains various financial covenants that impose a maximum leverage ratio of 4.0 to 1.0, a debt to capitalization ratio of 0.5 to 1.0, a minimum interest expense coverage ratio of 3.0 to 1.0 and a minimum collateral maintenance of 150% of the aggregate amount outstanding under the facility. We were in compliance with all financial covenants under the 2011 Credit Agreement at September 30, 2011. No additional funds have been borrowed under the 2011 Credit Agreement subsequent to September 30, 2011.

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We have entered into four $50.0 million notional interest rate swap agreements to fix the variable interest rate on borrowings under the 2011 Credit Agreement through September 2014. The first three interest rate swap agreements serve to fix the annual rate at approximately 3.6% from July 2011 to September 2014. The fourth interest rate swap agreement serves to fix the annual rate at approximately 3.4% from September 2011 to September 2014.

Prior to the execution of the 2011 Credit Agreement, we had a five-year $300 million credit facility executed in October 2007 and a five-year $280 million credit facility executed in November 2008, both of which were retired during May 2011 with funding from the 2011 Credit Agreement.

NOTE 6—INTEREST RATE SWAPS

We are exposed to interest rate risk on borrowings under the 2011 Credit Agreement. Our variable rate debt exposes us to short-term changes in market interest rates as our interest obligations on these instruments are periodically re-determined based on the prevailing Eurodollar rate. We enter into interest rate swaps to limit our exposure to fluctuations and volatility in interest rates. We do not engage in derivative transactions for speculative or trading purposes and we are not a party to leveraged derivatives.

In the fourth quarter of fiscal year 2011, we entered into four $50.0 million notional interest rate swaps to fix the variable interest rate on borrowings under the 2011 Credit Agreement through September 2014. Three of these interest rate swap agreements serve to fix the annual rate at approximately 3.6% from July 2011 to September 2014. A fourth interest rate swap agreement serves to fix the annual rate at approximately 3.4% from September 2011 to September 2014.

Fair Value of Derivatives

In accordance with ASC 815, Derivatives and Hedging, the following table presents the fair value of our cash flow hedge derivative contracts included in the Consolidated Balance Sheets as of September 31, 2011 and 2010 (See Note 10 for additional information regarding Fair Value Measurements):

		September 30,
Type of Contract	Balance Sheet Classification	2011		2010
Short term interest rate swaps	Accrued liabilities	$	988	$	—
Long term interest rate swaps	Other long-term liabilities		631		—
Total derivative contracts, net		$	1,619	$	—

We recognized an unrealized loss of approximately $1.6 million in Other Comprehensive Income (“OCI”) as a result of changes in fair value of our interest rate derivatives during fiscal year 2011. No gain or loss was recognized in OCI during fiscal year 2010.

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NOTE 7—INCOME TAXES

Domestic and foreign income before income taxes for the three-year period ended September 30, 2011, is as follows (in thousands):

	Fiscal			Fiscal			Fiscal
	2011			2010			2009
Domestic loss	$	(22,954	)	$	(24,550	)	$	(9,492	)
Foreign income		347,801			344,529			305,923
	$	324,847		$	319,979		$	296,431

The provision (benefit) for domestic and foreign taxes on income consists of the following (in thousands):

	Fiscal			Fiscal			Fiscal
	2011			2010			2009
Current—domestic	$	29		$	(34	)	$	160
Deferred—domestic		(980	)		6,813			(4,335	)
Current—foreign		54,209			58,218			50,052
Deferred—foreign		(85	)		(2,014	)		(191	)
	$	53,173		$	62,983		$	45,686

Deferred Taxes

The components of the deferred income tax assets (liabilities) as of September 30, 2011 and 2010 are as follows (in thousands):

	September 30,
	2011			2010
Deferred tax assets—
Net operating loss carryforwards	$	16,014		$	10,089
Tax credit carryforwards		1,618			730
Stock option compensation expense		7,105			6,298
Book accruals		3,273			3,157
		28,010			20,274
Deferred tax liabilities—
Difference in book and tax basis of equipment		(12,222	)		(13,935	)
		(12,222	)		(13,935	)
Net deferred tax assets (liabilities) before valuation allowance		15,788			6,339
Valuation allowance		(25,568	)		(17,184	)
	$	(9,780	)	$	(10,845	)
Net current deferred tax assets	$	—		$	—
Net noncurrent deferred tax liabilities		(9,780	)		(10,845	)
	$	(9,780	)	$	(10,845	)

For fiscal year 2011, we recorded a valuation allowance of $8.4 million on net deferred tax assets primarily related

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to our United States net operating loss carry forward. The gross amount of federal net operating loss carry forwards as of September 30, 2011 is estimated to be $83.2 million, which will begin to expire in 2025. Management does not expect that our tax credit carry forward of $1.6 million will be utilized to offset future tax obligations before the credits begin to expire in 2012. Thus, a corresponding valuation allowance of $1.6 million is recorded as of September 30, 2011.

We have approximately $12.9 million of windfall tax benefits from previous stock option exercises that have not been recognized as of September, 30, 2011. Pursuant to ASC 718, this amount will not be recognized until the deduction would reduce our United States income taxes payable. At such time, the amount will be recorded as an increase to paid-in-capital. We apply the “with-and-without” approach when utilizing certain tax attributes whereby windfall tax benefits are used last to offset taxable income.

We do not record federal income taxes on the undistributed earnings of our foreign subsidiaries that we consider to be permanently reinvested in foreign operations. The cumulative amount of such undistributed earnings was approximately $1.3 billion at September 30, 2011. It is not practicable to estimate the amount of any deferred tax liability associated with the undistributed earnings.

We record estimated accrued interest and penalties related to uncertain tax positions in income tax expense. At September 30, 2011, we had approximately $16.8 million of reserves for uncertain tax positions, including estimated accrued interest and penalties of $4.9 million, which are included in Other Long Term Liabilities in the Consolidated Balance Sheet. All $16.8 million of the net uncertain tax liabilities would affect the effective tax rate if recognized. A summary of activity related to the net uncertain tax positions including penalties and interest for fiscal year 2011 is as follows:

	Liability for Uncertain
	Tax Positions
Balance at October 1, 2010	$	9,968
Increases based on tax positions related to prior fiscal years		5,959
Increases based on tax positions related to current fiscal year		877
Balance at September 30, 2011	$	16,804

Our United States tax returns for fiscal year 2008 and subsequent years remain subject to examination by tax authorities. As we conduct business globally, we have various tax years remaining open to examination in our international tax jurisdictions, including tax returns in Australia for fiscal years 2006 through 2011, as well as returns in Equatorial Guinea for calendar years 2006 through 2010. Although we cannot predict the outcome of ongoing or future tax examinations, we do not anticipate that the ultimate resolution of these examinations will have a material impact on our consolidated financial position, results of operations or cash flows.

As a result of working in foreign jurisdictions, we earned a high level of operating income in certain nontaxable and deemed profit tax jurisdictions, which significantly reduced our effective tax rate for fiscal years 2011, 2010 and 2009 when compared to the United States statutory rate. There were no significant transactions that materially impacted our effective tax for fiscal years 2011, 2010 or 2009. The differences between the United States statutory and our effective income tax rate are as follows:

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	Fiscal			Fiscal			Fiscal
	2011			2010			2009
Statutory income tax rate		35	%		35	%		35	%
Resolution of prior period tax items					1			(1	)
Increase in tax rate resulting from—
Valuation allowance		2			2
Increases to the reserve for uncertain tax positions		2			1			1
Decrease in tax rate resulting from—
Foreign tax rate differentials, net of foreign tax credit utilization		(23	)		(19	)		(20	)
Effective income tax rate		16	%		20	%		15	%

NOTE 8—CAPITAL STOCK

Preferred Stock

We are authorized to issue 1.0 million shares of preferred stock with no par value. In October 2002, we designated Series A Junior Participating Preferred Stock in connection with the Rights Agreement described below. No preferred shares have been issued.

Rights Agreement

In September 2002, we authorized and declared a dividend of one Right (as defined in the Rights Agreement effective October 18, 2002, which governs the Rights) for each outstanding share of common stock as of November 5, 2002, subject to lender approval and consent, which was obtained. One Right is also associated with each share of common stock that becomes outstanding after November 5, 2002, but before the earliest of the date on which (i) the Rights become exercisable, (ii) the Rights are redeemed by us or (iii) the Rights expire, which is November 5, 2012. The Rights are not exercisable until a person or group of affiliated or associated persons begin to acquire or acquires beneficial ownership of 15% or more of our outstanding common stock. This provision does not apply to shareholders already holding 15% or more of our outstanding common stock as of November 5, 2002, until they acquire an additional 5%.

When exercisable, each Right entitles the registered holder to purchase from us one four-thousandth of a share of our Series A Junior Participating Preferred Stock, no par value, at a price of $150 upon the exercise of each Right. The redemption price of each Right is $0.0025. The Rights are subject to adjustment for certain future events including any future stock splits. At September 30, 2011, 500,000 preferred shares have been reserved for issuance in the event that Rights are exercised.

NOTE 9—RETIREMENT PLANS

We have two qualified defined contribution retirement plans (the “Retirement Plans”) under which qualified participants may make contributions, which together with our contributions, can be up to 100% of their compensation, as defined, to a maximum of $49,000. In the first month following the date of hire, an employee can elect to become a participant in a Retirement Plan. Under the Plans, participant contributions of 1% to 5% matched on a 2 to 1 basis. Our contributions vest 100% to each participant after three years of service with us including any period of ineligibility mandated by the Plans. If a participant terminates employment before becoming fully vested, the unvested portion is credited to our account and can be used only to offset our future contribution requirements.

During fiscal years 2011 and 2010, forfeitures of $0.3 million and $0.3 million, respectively, were used to reduce our cash contribution requirements while no forfeitures were used in fiscal year 2009. In fiscal years 2011, 2010 and 2009, our actual cash contributions totaled approximately $4.3 million, $5.2 million and $4.9 million, respectively. As of September 30, 2011, there were approximately $0.2 million of contribution forfeitures, which can be used to reduce our future cash contribution requirements.

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NOTE 10—FAIR VALUE OF FINANCIAL INSTRUMENTS

On October 1, 2008, we adopted, without any impact to our financial position, operating results or cash flows, the provisions of ASC 820, for our financial assets and liabilities with respect to which we have recognized or disclosed at fair value on a recurring basis. We apply the guidance provided under ASC 820 to our financial assets and liabilities and nonfinancial liabilities that are measured and reported at fair value on a recurring basis.

The carrying amounts of our cash and cash equivalents, accounts receivables and payables are based on fair value due to the short-term maturity thereof. The carrying amount of our floating rate date is based on the fair value because such debt bears short-term, market-based interest rates. In addition, we record our interest rate swaps at their fair value. See Note 6.

Fair Value Measurements

We have certain liabilities that we have classified and disclosed fair value measurements using the following levels of the fair value hierarchy:

Level 1:    Unadjusted quoted prices in active markets that are accessible at the measurement date for identical, unrestricted assets or liabilities.

Level 2:    Quoted prices in markets that are not active, or inputs which are observable, either directly or indirectly, for substantially the full term of the asset or liability.

Level 3:    Measurement based on prices or valuation models that require inputs that are both significant to the fair value measurement and less observable for objective sources (i.e., supported by little or no market activity).

Assets and liabilities measured at fair value are classified based on the lowest level of input that is significant to the fair value measurement. Our assessment of the significance of a particular input to the fair value measurement requires judgment, which may affect the valuation of the fair value of assets and liabilities and their placement within the fair value hierarchy levels as described in ASC 820. The determination of the fair values, stated below, takes into account the market for our financial assets and liabilities, the associated credit risk and other factors as required by ASC 820. We consider active markets as those in which transactions for the assets or liabilities occur in sufficient frequency and volume to provide pricing information on an ongoing basis.

The fair values of our interest rate swaps are based upon quotes obtained from counterparties to the derivative contracts. We review other readily available market prices for our derivative contracts as there is an active market for these contracts. We have access to documented valuation models used by our counterparties or other market participants. Included in these models are discount factors that are used to estimate values in the derivative transaction calculations. Based on the inputs for the fair value measurement, we have classified our derivative contract liabilities as Level 2.

The following table sets forth the estimated fair value of our financial instruments recognized at fair value as of September 30, 2011:

	Fair Value Measurements						Liabilities at
Liabilities	Level 1		Level 2		Level 3		Fair Value
Interest Rate Swaps	$	—	$	1,619	$	—	$	1,619

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We record the interest rate derivative contracts at fair value on our consolidated balance sheets. Hedging effectiveness is evaluated at each quarter end using the “Dollar Off-Set Method”. Each quarter changes in the fair values will be recorded on balance sheet prospectively, with an offset to Other Comprehensive Income (“OCI”).

For interest rate swaps, we evaluate all material terms between the swap and the underlying debt obligation. Any change in fair value resulting from ineffectiveness is recognized immediately in earnings. The amount of the gain or loss recorded in the income statement will be equal to the amount of ineffectiveness, if any. No income or loss was recognized during fiscal years 2011, 2010 or 2009 due to hedge ineffectiveness.

NOTE 11—CONCENTRATION OF MARKET AND CREDIT RISK

All of our customers are in the oil and gas offshore exploration and production industry. This industry concentration has the potential to impact our overall exposure to market and credit risks, either positively or negatively, in that our customers could be affected by similar changes in economic, industry or other conditions. However, we believe that the credit risk posed by this industry concentration is offset by the creditworthiness of our customer base.

Revenues from significant customers are as follows (in thousands):

	Fiscal		Fiscal		Fiscal
	2011		2010		2009
Chevron Australia	$	199,685		81,577		—
Sarawak Shell Bhd.		138,836		84,617		81,538
Kosmos Energy Ghana Inc.		136,205		90,936		—
Noble Energy Mediterranean, Ltd.		—		—		149,603
Woodside Energy Ltd.		—		—		114,637

NOTE 12—COMMITMENTS AND CONTINGENCIES

Operating Leases

Future minimum lease payments for operating leases for fiscal years ending September 30 are as follows (in thousands):

2012	$	1,484
2013	$	1,280
2014	$	1,258
2015	$	290
2016	$	0

Total rent expense under operating leases was approximately $4.4 million, $4.8 million and $4.1 million for fiscal years ended September 30, 2011, 2010, and 2009, respectively.

Litigation

We are party to a number of lawsuits which are ordinary, routine litigation incidental to our business, the outcome of which is not expected to have, either individually or in the aggregate, a material adverse effect on our financial position, results of operations or cash flows.

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Other Matters

The Atwood Beacon operated in India from early December 2006 to the end of July 2008. A service tax in India was enacted in 2004 on revenues derived from seismic and exploration activities. This service tax law was subsequently amended in June 2007 and again in May 2008 to state that revenues derived from mining services and drilling services were specifically subject to this service tax. The contract terms with our customer in India provided that any liability incurred by us related to any taxes pursuant to laws not in effect at the time the contract was executed in 2005 was to be reimbursed by our customer. We believe any service taxes assessed by the Indian tax authorities under the 2007 or 2008 amendments are an obligation of our customer. Our customer is disputing this obligation on the basis that revenues derived from drilling services were taxable under the initial 2004 law and are, therefore, our obligation.

After reviewing the status of the drilling service we provided to our customer, the Indian tax authorities assessed service tax obligations on revenues derived from the Atwood Beacon commencing on June 1, 2007. The relevant Indian tax authority issued an extensive written ruling setting forth the application of the June 1, 2007 service tax regulation and confirming the position that drilling services, including the services performed under our contract with our customer prior to June 1, 2007, were not covered by the 2004 service tax law. The ruling of the Indian tax authority is currently subject to the review of the Tax Appeal Tribunal.

As of September 30, 2011, we have paid to the Indian government $10.1 million in service taxes and have accrued $1.8 million of additional service tax obligations in accrued liabilities on our consolidated balance sheets, for a total of $11.9 million relating to service taxes. We have recorded a corresponding $11.8 million long-term other receivable due from our customer relating to service taxes due under the contract. We intend to pursue collection of such amounts from our customer.

NOTE 13—SUPPLEMENTAL CASH FLOW INFORMATION

	Years Ended September 30,
	2011		2010		2009
Cash paid during the period for:
Domestic and foreign income taxes	$	55,062	$	65,024	$	40,713
Interest, net of amounts capitalized	$	3,703	$	1,656	$	2,144
Non-cash activities:
Increase in insurance receivable related to reduction in value of spare capital equipment and inventory	$	—	$	—	$	2,518
Increase in accounts payable and accrued liabilities related to capital expenditures	$	77,164	$	10,616	$	7,579

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NOTE 14—RECENTLY ISSUED ACCOUNTING PRONOUNCEMENTS

In June 2011, the Financial Accounting Standards Board (“FASB”), issued Accounting Standards Update (“ASU”) 2011-05, “Comprehensive Income (Topic 220): Presentation of Comprehensive Income,” which amends the presentation requirements for comprehensive income and requires that all non-owner changes in stockholders’ equity be presented either as a single continuous statement of comprehensive income or in two separate but consecutive statements. Additionally, the update requires presentation of reclassification adjustments on the face of the financial statement. The update is effective for interim and annual periods beginning after December 15, 2011, with early adoption permitted. We adopted the amendments in this update on June 30 with no material impact on our consolidated financial statements or disclosures in our financial statements.

In May 2011, the FASB issued ASU 2011-04, “Fair Value Measurement (Topic 820): Amendments to Achieve Common Fair Value Measurement and Disclosure Requirements in U.S. GAAP and IFRS”. The amendment clarifies existing fair value measurement and disclosure requirements, amends certain fair value measurement principles and requires additional disclosures about fair value measurements. ASU 2011-04 is effective for interim and annual periods beginning after December 15, 2011. We will adopt the accounting standards effective January 1, 2012. We do not expect that our adoption will have a material effect on our financial statements or disclosures in our financial statements.

In April 2010, the FASB issued ASU 2010-13, “Compensation—Stock Compensation” (Topic 718). The amendment provides updated guidance on the classification of a share-based payment award as either equity or a liability. The objective of this update is to address the classification of an employee share-based payment award with an exercise price denominated in the currency of a market in which the underlying equity security trades. A share-based payment award that contains a condition that is not a market, performance, or service condition is required to be classified as a liability. We adopted the amendments in this update on October 1, 2010, with no material impact on our financial statements or disclosures in our financial statements.

40

NOTE 15—OPERATIONS BY GEOGRAPHIC AREAS

We report our offshore contract drilling operation as a single reportable segment: Offshore Contract Drilling Services. The consolidation of our offshore contract drilling operations into one reportable segment is attributable to how we manage our business, including the nature of services provided and the type of customers of such services and the fact that all of our drilling fleet are dependent upon and able to service the worldwide oil industry. The mobile offshore drilling units and related equipment comprising our offshore rig fleet operate in a single, global market for contract drilling services and are often redeployed globally due to changing demands of our customers, which consist largely of major integrated oil and natural gas companies and independent oil and natural gas companies. Our offshore contract drilling services segment currently conducts offshore contract drilling operations located in the U.S. Gulf of Mexico, South America, the Mediterranean Sea, West Africa, Southeast Asia and Australia.

The accounting policies of our reportable segment are the same as those described in the summary of significant accounting policies (see Note 2). We evaluate the performance of our operating segment based on revenues from external customers and segment profit. A summary of revenues and operating margin for the fiscal years ended September 30, 2011, 2010 and 2009 and identifiable assets by geographic areas as of September 30, 2011, 2010 and 2009 is as follows (in thousands):

	Fiscal			Fiscal			Fiscal
	2011			2010			2009
REVENUES:
North & South America	$	45,242		$	10,065		$	19,055
Southeast Asia & India		187,717			188,180			162,888
Mediterranean & Black Sea		28,486			46,622			169,828
Africa		183,946			271,583			89,601
Australia		199,685			134,112			145,135
TOTAL REVENUES	$	645,076		$	650,562		$	586,507
OPERATING INCOME (EXPENSE):
North & South America	$	(30,392	)	$	(12,204	)	$	48,535
Southeast Asia & India		129,799			132,192			42,025
Mediterranean & Black Sea		15,385			15,931			141,133
Africa		116,581			154,298			14,301
Australia		96,724			72,743			84,087
Corporate general and administrative expenses		563			(40,620	)		(31,639	)
TOTAL OPERATING INCOME (EXPENSE)	$	328,660		$	322,340		$	298,442
TOTAL ASSETS:
North & South America	$	292,808		$	90,496		$	61,982
Southeast Asia & India		904,581			974,050			750,141
Mediterranean & Black Sea		12,114			239,017			225,332
Africa		303,595			230,677			238,700
Australia		813,554			154,055			192,330
Other		48,739			36,145			40,917
TOTAL ASSETS	$	2,375,391		$	1,724,440		$	1,509,402

41

NOTE 16—QUARTERLY FINANCIAL DATA (UNAUDITED)

Summarized quarterly results for fiscal years 2011 and 2010 are as follows (in thousands, except per share amounts):

	Quarters ended (1)
	December 31		March 31		June 30		September 30
Fiscal 2011
Revenues	$	146,286	$	159,085	$	162,147	$	177,558
Income before income taxes		63,240		90,485		87,203		83,919
Net income		52,850		70,611		75,285		72,928
Earnings per common share—
Basic		0.82		1.09		1.16		1.13
Diluted		0.81		1.08		1.15		1.12
Fiscal 2010
Revenues	$	164,243	$	159,069	$	166,637	$	160,613
Income before income taxes		81,255		77,018		84,847		76,859
Net income		66,984		66,755		58,994		64,229
Earnings per common share—
Basic		1.04		1.04		0.92		1.00
Diluted		1.03		1.03		0.91		0.99

(1) The sum of the individual quarterly net income per common share amounts may not agree with year-to-date net income per common share as each quarterly computation is based on the weighted average number of common shares outstanding during that period.

42

SEC FILINGS

We file our annual, quarterly and current reports, proxy statements, and other information with the SEC. Our annual report on Form 10-K for the year ended September 30, 2011 includes as exhibits all required Sarbanes-Oxley Act Section 302 certifications by our CEO and CFO regarding the quality of our public disclosure. Our SEC filings are available to the public over the internet at the SEC’s web site at http://www.sec.gov. Our website address is www.atwd.com. We make available free of charge on or through our website our annual report on Form 10-K, quarterly reports on Form 10-Q, and current reports on Form 8-K, and amendments to those reports filed, or furnished pursuant to Section 13(a) or 15(d) of the Exchange Act as soon as reasonably practicable after we electronically file such material with, or furnish it to, the SEC. Information on our website is not incorporated by reference into this report or made a part hereof for any purpose. You may also read and copy any document we file, including our Form 10-K, at the SEC’s Public Reference Room at 100 F Street, NE, Washington, DC 20549. Please call the SEC at 1-800-SEC-0330 for further information on the public reference room and copy charges.

STOCK PRICE INFORMATION

Our common stock is traded on the New York Stock Exchange (the “NYSE”) under the symbol “ATW”. As of November 8, 2011, we had approximately 39,023 record owners of our common stock. As of November 21, 2011, the closing sale price of our common stock, as reported by the NYSE, was $39.95 per share. The following table sets forth the range of high and low sales prices per share of common stock as reported by the NYSE for the periods indicated.

	Fiscal				Fiscal
	2011				2010
Quarters Ended	Low		High		Low		High
December 31	$	29.48	$	38.03	$	32.06	$	40.58
March 31		34.85		46.92		32.17		40.48
June 30		37.96		46.86		23.71		38.48
September 30		32.86		48.84		23.75		31.29

43

DIRECTORS

DEBORAH A. BECK (2, 3, 4)

    Corporate Executive, Retired

    Milwaukee, Wisconsin

GEORGE S. DOTSON (1, 2, 3, 4)

    Corporate Executive, Retired

    Tulsa, Oklahoma

JACK E. GOLDEN (2, 3, 4)

    Corporate Executive, Retired

    Spicewood, Texas

HANS HELMERICH (1, 4)

    President, Chief Executive Officer

    Helmerich & Payne, Inc.

    Tulsa, Oklahoma

ROBERT J. SALTIEL (1)

    President and Chief Executive Officer

    Atwood Oceanics, Inc.

    Houston, Texas

JAMES R. MONTAGUE (2, 3, 4)

    Corporate Executive, Retired

    Houston, Texas

PHIL D. WEDEMEYER (2, 3, 4)

    Partner—Public Accounting, Retired

    Houston, Texas

(1) Executive Committee

(2) Audit Committee

(3) Compensation Committee

(4) Nominating & Corporate Governance Committee

OFFICERS

ROBERT J. SALTIEL

    President and Chief Executive Officer

MARK L. MEY

    Senior Vice President, Chief Financial Officer

GLEN P. KELLEY

    Senior Vice President, Marketing and Business Development

WALTER A. BAKER

    Vice President, General Counsel and Corporate Secretary

MICHAEL A. CAMPBELL

    Vice President, Controller

LUIS JIMENEZ

    Vice President, Human Resources

ARTHUR M. POLHAMUS

    Vice President, Operations

BARRY M. SMITH

    Vice President, Technical Services

MARK W. SMITH

    Vice President, Corporate Services

44

EX-21

Exhibit 21.1

ATWOOD OCEANICS, INC.

SUBSIDIARY AND AFFILIATED COMPANIES, STATE OR

JURISDICTION OF INCORPORATION AND OWNERSHIP PERCENTAGE

Alpha Achiever Company	Cayman Islands	100	%
Alpha Advantage Company	Cayman Islands	100	%
Alpha Aurora Company	Cayman Islands	100	%
Alpha Beacon Company	Cayman Islands	100	%
Alpha Condor Company	Cayman Islands	100	%
Alpha Falcon Company	Cayman Islands	100	%
Alpha Falcon Drilling Company	Cayman Islands	100	%
Alpha Hunter Company	Cayman Islands	100	%
Alpha International Drilling Company S.a.r.l.	Luxembourg	100	%
Alpha Leasing Drilling Limited	Mauritius	100	%
Alpha Mako Company	Cayman Islands	100	%
Alpha Manta Company	Cayman Islands	100	%
Alpha Offshore Drilling (Cambodia) Ltd.	Cambodia	100	%
Alpha Offshore Drilling (S) Pte. Ltd.	Singapore	100	%
Alpha Offshore Drilling Services Company	Cayman Islands	100	%
Alpha Offshore Drilling Services Company, Limited	Angola	100	%
Alpha Offshore Drilling Services Company (Ghana) Ltd.	Ghana	100	%
Alpha Offshore International Leasing Limited	UK	100	%
Alpha Offshore Mexico Company, S. de. R.L. de C.V.	Mexico	100	%
Alpha Offshore Mexico Labor Company, S. de. R.L. de C.V.	Mexico	100	%
Alpha Offshore Singapore Supply Company Pte. Ltd.	Singapore	100	%
Alpha Orca Company	Cayman Islands	100	%
Alpha Osprey Company	Cayman Islands	100	%
Alpha Seahawk Company	Cayman Islands	100	%
Alpha Singapore Supply Company Pte. Ltd.	Singapore	100	%
Alpha South Pacific Holding Company	Western Australia	100	%
Alpha Southern Cross Pty. Ltd.	Western Australia	100	%
Alpha Vicksburg Pty. Ltd.	Western Australia	100	%
ATW Management, Inc.	Delaware	100	%
Atwood Australian Waters Drilling Pty. Ltd.	Western Australia	100	%
Atwood Deep Seas, Ltd.	Texas	100	%
Atwood Drilling, Inc.	Delaware	100	%
Atwood Hunter Co.	Delaware	100	%
Atwood Malta Holding Company Limited	Malta	100	%
Atwood Management, Inc.	Delaware	100	%
Atwood Oceanics Australia Pty. Ltd.	Western Australia	100	%

ATWOOD OCEANICS, INC.

SUBSIDIARY AND AFFILIATED COMPANIES, STATE OR

JURISDICTION OF INCORPORATION AND OWNERSHIP PERCENTAGE

Atwood Oceanics Drilling Pty. Ltd.	Western Australia	100	%
Atwood Oceanics Global Limited	Cayman Islands	100	%
Atwood Oceanics International Limited	Cayman Islands	100	%
Atwood Oceanics Leasing Ltd.	Malaysia	100	%
Atwood Oceanics (M) Sdn. Bhd.	Malaysia	100	%
Atwood Oceanics Malta Ltd.	Malta	100	%
Atwood Oceanics Management, L.P.	Delaware	100	%
Atwood Oceanics (NZ) Limited	New Zealand	100	%
Atwood Oceanics Pacific Limited	Cayman Islands	100	%
Atwood Oceanics Platforms Pty. Ltd.	Western Australia	100	%
Atwood Oceanics Services Pty. Ltd.	Western Australia	100	%
Atwood Oceanics West Tuna Pty. Ltd.	Western Australia	100	%
Atwood Offshore Drilling Ltd.	Hong Kong	100	%
Atwood Offshore Worldwide Limited	Cayman Islands	100	%
Atwood Serviços de Perfuração Ltda.	Brazil	100	%
Aurora Offshore Services GmbH	Germany	100	%
Clearways Offshore Drilling Sdn. Bhd.	Malaysia	49	%
Drillquest International Offshore Drilling Services Company	Cayman Islands	100	%
Drillquest Offshore Company	Cayman Islands	100	%
Pacific Offshore Labor Company	Cayman Islands	100	%
PT Alpha Offshore Drilling	Indonesia	100	%
PT Pentawood Offshore Drilling	Indonesia	80	%
Swiftdrill, Inc.	Cayman Islands	100	%
Swiftdrill Malta	Malta	100	%
Swiftdrill Nigeria Limited	Nigeria	60	%
Swiftdrill Offshore Drilling Services Company	Cayman Islands	100	%

EX-23

EXHIBIT 23

CONSENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

We hereby consent to the incorporation by reference in the Registration Statements on Form S-8 (No. 333-74255, No. 333-87786 and No. 333-140781) and on Form S-3 (No. 333-92388, as amended, and No. 333-117534) of our report dated November 22, 2011 relating to the consolidated financial statements and the effectiveness of internal control over financial reporting, which appears in the 2011 Annual Report to Shareholders, which is filed herewith and incorporated by reference in Atwood Oceanics, Inc’s Annual Report on Form 10-K for the year ended September 30, 2011.

/s/ PricewaterhouseCoopers LLP

Houston, Texas

November 22, 2011

EX-31.1

EXHIBIT 31.1

CERTIFICATIONS

I, Robert J. Saltiel, certify that:

1. I have reviewed this annual report on Form 10-K of Atwood Oceanics, Inc.;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

(c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: November 22, 2011

/S/ ROBERT J. SALTIEL

Robert J. Saltiel

Chief Executive Officer

EX-31.2

EXHIBIT 31.2

CERTIFICATIONS

I, Mark L. Mey, certify that:

1. I have reviewed this annual report on Form 10-K of Atwood Oceanics, Inc.;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

(c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: November 22, 2011

/S/ MARK L. MEY

Mark L. Mey

Chief Financial Officer

EX-32.1

EXHIBIT 32.1

CERTIFICATION OF CHIEF EXECUTIVE OFFICER

PURSUANT TO 18 U.S.C. SECTION 1350,

AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Annual Report of Atwood Oceanics, Inc. (the “Company”) on Form 10-K for the period ended September 30, 2011, as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, Robert J. Saltiel, Chief Executive Officer of the Company, certify, pursuant to 18 U.S.C. §1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that, to the best of my knowledge:

(1) The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

(2) The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company as of, and for the periods presented.

Date: November 22, 2011	/S/ ROBERT J. SALTIEL
	Robert J. Saltiel
	President and Chief Executive Officer

EX-32.2

EXHIBIT 32.2

CERTIFICATION OF CHIEF FINANCIAL OFFICER

PURSUANT TO 18 U.S.C. SECTION 1350,

AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Annual Report of Atwood Oceanics, Inc. (the “Company”) on Form 10-K for the period ended September 30, 2011, as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, Mark L. Mey, Chief Financial Officer of the Company, certify, pursuant to 18 U.S.C. §1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that, to the best of my knowledge:

(1) The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

(2) The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company as of, and for the periods presented.

Date: November 22, 2011	/s/ MARK L. MEY
	Mark L. Mey
	Senior Vice President and Chief Financial Officer

XML

Summary Of Significant Accounting Policies (Estimated Useful Lives Of Assets) (Details)

12 Months Ended

Sep. 30, 2011

Drilling Vessels And Related Equipment [Member]

Estimated useful lives of asset, Minimum

5

Estimated useful lives of asset, Maximum

35

Drill Pipe [Member]

Estimated useful lives of asset

3

Furniture And Other [Member]

Estimated useful lives of asset, Minimum

3

Estimated useful lives of asset, Maximum

10

Atwood Southern Cross [Member]

Estimated useful lives of asset, Minimum

1

Estimated useful lives of asset

5

Seahawk [Member]

Estimated useful lives of asset, Minimum

1

Estimated useful lives of asset

5

XML

Income Taxes (Schedule Of Income Before Income Tax, Domestic And Foreign) (Details) (USD $) In Thousands	3 Months Ended																12 Months Ended
	Sep. 30, 2011		Jun. 30, 2011		Mar. 31, 2011		Dec. 31, 2010		Sep. 30, 2010		Jun. 30, 2010		Mar. 31, 2010		Dec. 31, 2009		Sep. 30, 2011	Sep. 30, 2010	Sep. 30, 2009
Income Taxes
Domestic income loss																	$ (22,954)	$ (24,550)	$ (9,492)
Foreign income																	347,801	344,529	305,923
Income before income taxes	$ 83,919	[1]	$ 87,203	[1]	$ 90,485	[1]	$ 63,240	[1]	$ 76,859	[1]	$ 84,847	[1]	$ 77,018	[1]	$ 81,255	[1]	$ 324,847	$ 319,979	$ 296,431

[1] The sum of the individual quarterly net income per common share amounts may not agree with year-to-date net income per common share as each quarterly computation is based on the weighted average number of common shares outstanding during that period.

XML

Property And Equipment (Property And Equipment By Classification) (Details) (USD $) In Thousands	Sep. 30, 2011	Sep. 30, 2010
Net book value	$ 1,887,321	$ 1,343,961
Drilling Vessels And Related Equipment [Member]
Cost	2,315,419	1,733,298
Accumulated depreciation	(435,577)	(392,808)
Net book value	1,879,842	1,340,490
Drill Pipe [Member]
Cost	18,182	15,468
Accumulated depreciation	(13,885)	(13,563)
Net book value	4,297	1,905
Furniture And Other [Member]
Cost	8,800	7,115
Accumulated depreciation	(5,618)	(5,549)
Net book value	$ 3,182	$ 1,566

XML

Income Taxes (Schedule Of Components Of Income Tax Provision (Benefit)) (Details) (USD $) In Thousands	12 Months Ended
	Sep. 30, 2011	Sep. 30, 2010	Sep. 30, 2009
Income Taxes
Current - domestic	$ 29	$ (34)	$ 160
Deferred - domestic	(980)	6,813	(4,335)
Current - foreign	54,209	58,218	50,052
Deferred - foreign	(85)	(2,014)	(191)
Provision (benefit) for domestic and foreign taxes on income	$ 53,173	$ 62,983	$ 45,686

XML

Share-Based Compensation (Summary Of Restricted Stock Activity) (Details) (USD $) In Thousands, except Per Share data	12 Months Ended
	Sep. 30, 2011
Share-Based Compensation
Number of Shares, Unvested at October 1, 2010	623
Wtd. Avg. Fair Value, Unvested at October 1, 2010	$ 34.27
Number of Shares, Granted	172
Wtd. Avg. Fair Value, Granted	$ 37.73
Number of Shares, Vested	(102)
Wtd. Avg. Fair Value, Vested	$ 39.53
Number of Shares, Forfeited	(133)
Wtd. Avg. Fair Value, Forfeited	$ 33.56
Number of Shares, Unvested at September 30, 2011	560
Wtd. Avg. Fair Value, Unvested at September 30, 2011	$ 34.54

XML

Commitments And Contingencies (Tables)

12 Months Ended

Sep. 30, 2011

Commitments And Contingencies

Schedule Of Future Minimum Lease Payments For Operating Leases

2012	$	1,484
2013	$	1,280
2014	$	1,258
2015	$	290
2016	$	0

XML

Income Taxes (Summary Of Activity Related To Net Uncertain Tax Positions) (Details) (USD $) In Thousands	12 Months Ended
	Sep. 30, 2011
Income Taxes
Balance at October 1, 2010	$ 9,968
Increases based on tax positions related to prior fiscal years	5,959
Increases based on tax positions related to the current fiscal year	877
Balance at September 30, 2011	$ 16,804

XML

Summary Of Significant Accounting Policies (Tables)

12 Months Ended

Sep. 30, 2011

Summary Of Significant Accounting Policies

Estimated Useful Lives Of Assets

	Years
Drilling vessels and related equipment Drill pipe Furniture and other		5-35 3 3-10

Computation Of Basic And Diluted Earnings Per Share

	Net Income		Shares		Per Share Amount
Fiscal 2011:
Basic earnings per share	$	271,674		64,754	$	4.20
Effect of dilutive securities—
Stock options		—		649		(0.05	)
Diluted earnings per share	$	271,674		65,403	$	4.15
Fiscal 2010:
Basic earnings per share	$	256,996		64,391	$	3.99
Effect of dilutive securities—
Stock options		—		637		(0.04	)
Diluted earnings per share	$	256,996		65,028	$	3.95
Fiscal 2009:
Basic earnings per share	$	250,745		64,167	$	3.91
Effect of dilutive securities—
Stock options		—		326		(0.02	)
Diluted earnings per share	$	250,745		64,493	$	3.89

XML

Long-Term Debt (Schedule Of Long-Term Debt) (Details) (USD $) In Thousands, unless otherwise specified	Sep. 30, 2011	Sep. 30, 2010
Long term debt	$ 520,000	$ 230,000
2007 Credit Facility [Member]
Outstanding credit facility		180,000
Market adjustable interest rate (per annum)		1.10%
2008 Credit Facility [Member]
Outstanding credit facility		50,000
Market adjustable interest rate (per annum)		1.80%
2011 Credit Facility [Member]
Outstanding credit facility	$ 520,000
Market adjustable interest rate (per annum)	3.10%

XML

Share-Based Compensation (Schedule Of Share And Stock Option Data) (Details)	Sep. 30, 2011	Sep. 30, 2010
Shares available for future awards or grants	4,000,000
Outstanding stock option grants	1,480,000	1,720,000
Outstanding unvested restricted stock awards	560,000	623,000
2007 Plan [Member]
Shares available for future awards or grants	1,895,274
Outstanding stock option grants	860,744
Outstanding unvested restricted stock awards	559,712
2001 Plan [Member]
Outstanding stock option grants	594,725
1996 Plan [Member]
Outstanding stock option grants	24,000

XML

Nature Of Operations (Details)	12 Months Ended
	Sep. 30, 2011
Nature Of Operations
Number of mobile offshore drilling units	10

XML

Interest Rate Swaps (Fair Values And Locations Of Derivative Instruments Recorded On The Balance Sheet) (Details) (Interest Rate Swap [Member], USD $) In Thousands	Sep. 30, 2011	Sep. 30, 2010
Total derivative contracts, net	$ 1,619
Accrued Liabilities [Member]
Total derivative contracts, net	988
Other Long-Term Liabilities [Member]
Total derivative contracts, net	$ 631

XML

Quarterly Financial Data (Unaudited) (Schedule Of Quarterly Financial Information) (Details) (USD $) In Thousands, except Per Share data	3 Months Ended																12 Months Ended
	Sep. 30, 2011		Jun. 30, 2011		Mar. 31, 2011		Dec. 31, 2010		Sep. 30, 2010		Jun. 30, 2010		Mar. 31, 2010		Dec. 31, 2009		Sep. 30, 2011	Sep. 30, 2010	Sep. 30, 2009
Quarterly Financial Data (Unaudited)
Revenues	$ 177,558	[1]	$ 162,147	[1]	$ 159,085	[1]	$ 146,286	[1]	$ 160,613	[1]	$ 166,637	[1]	$ 159,069	[1]	$ 164,243	[1]	$ 645,076	$ 650,562	$ 586,507
Income before income taxes	83,919	[1]	87,203	[1]	90,485	[1]	63,240	[1]	76,859	[1]	84,847	[1]	77,018	[1]	81,255	[1]	324,847	319,979	296,431
Net income	$ 72,928	[1]	$ 75,285	[1]	$ 70,611	[1]	$ 52,850	[1]	$ 64,229	[1]	$ 58,994	[1]	$ 66,755	[1]	$ 66,984	[1]	$ 271,674	$ 256,996	$ 250,745
Basic	$ 1.13	[1]	$ 1.16	[1]	$ 1.09	[1]	$ 0.82	[1]	$ 1.00	[1]	$ 0.92	[1]	$ 1.04	[1]	$ 1.04	[1]	$ 4.20	$ 3.99	$ 3.91
Diluted	$ 1.12	[1]	$ 1.15	[1]	$ 1.08	[1]	$ 0.81	[1]	$ 0.99	[1]	$ 0.91	[1]	$ 1.03	[1]	$ 1.03	[1]	$ 4.15	$ 3.95	$ 3.89

[1] The sum of the individual quarterly net income per common share amounts may not agree with year-to-date net income per common share as each quarterly computation is based on the weighted average number of common shares outstanding during that period.

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Fair Value Of Financial Instruments (Details) (USD $)	12 Months Ended
	Sep. 30, 2011	Sep. 30, 2010	Sep. 30, 2009
Interest Rate Swaps Liabilities at Fair Value	$ 1,619,000
Income loss recognized on hedge ineffectiveness	0	0	0
Fair Value, Inputs, Level 2 [Member]
Interest Rate Swaps Liabilities at Fair Value	$ 1,619,000

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Property And Equipment (Narrative) (Details) (USD $)	0 Months Ended	12 Months Ended
	Oct. 25, 2008	Sep. 30, 2011
Equipment insurance deductible	$ 1,000
Insurance proceeds, property loss claim		6,200,000
Number of drilling units		5
Expenditure on construction of drilling units in progress		650,000,000
Commitments on drilling units under construction		$ 1,200,000,000
Atwood Osprey [Member]
Number of drilling units		1
Atwood Condor [Member]
Number of drilling units		1
Atwood Mako [Member]
Number of drilling units		1
Atwood Manta [Member]
Number of drilling units		1
Atwood Orca [Member]
Number of drilling units		1
Atwood Advantage [Member]
Number of drilling units		1

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Summary Of Significant Accounting Policies

12 Months Ended

Sep. 30, 2011

Summary Of Significant Accounting Policies

Summary Of Significant Accounting Policies

NOTE 2—SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Consolidation

The consolidated financial statements include the accounts of Atwood Oceanics, Inc. and all of its domestic and foreign subsidiaries. All significant intercompany accounts and transactions have been eliminated in consolidation.

Cash and cash equivalents

Cash and cash equivalents consist of cash in banks and highly liquid debt instruments, which mature within three months of the date of purchase.

Foreign exchange

The U.S. Dollar is the functional currency for all areas of our operations. Accordingly, monetary assets and liabilities denominated in foreign currency are re-measured to U.S. Dollars at the rate of exchange in effect at the end of the fiscal year, items of income and expense are re-measured at average monthly rates, and property and equipment and other nonmonetary amounts are re-measured at historical rates. Gains and losses on foreign currency transactions and re-measurements are included in contract drilling costs in our consolidated statements of operations. We recorded foreign exchange losses of $0.9 million, $0.1 million and $0.5 million, during fiscal years 2011, 2010 and 2009, respectively. We did not disclose the re-measurement losses on the statement of cash flows due to the immaterial nature of the amounts.

Accounts receivable

We record trade accounts receivable at the amount we invoice our customers. Our portfolio of accounts receivable is comprised of major international corporate entities and government organizations with stable payment experience. Included within accounts receivable at September 30, 2011, and 2010 are unbilled receivable balances totaling $1.1 million and $1.0 million, respectively, which represent amounts for which services have been performed, revenue has been recognized based on contractual provisions and for which collection is deemed probable. Such unbilled amounts were billed subsequent to their respective fiscal year end. Historically, our uncollectible accounts receivable have been immaterial, and typically, we do not require collateral for our receivables. We provide an allowance for uncollectible accounts, as necessary, on a specific identification basis. We have no allowance for doubtful accounts at September 30, 2011 or 2010.

Inventories of material and supplies

Inventories consist of spare parts, material and supplies held for consumption and are stated principally at the lower of average cost or market value, net of reserves for excess and obsolete inventory of $2.5 million and $2.0 million at September 30, 2011, and 2010, respectively.

Income taxes

We account for income taxes in accordance with Financial Accounting Standards Board ("FASB") Accounting Standards Codification ("ASC") 740. Under ASC 740, deferred income taxes are recorded to reflect the tax consequences on future years of differences between the tax basis of assets and liabilities and their financial reporting amounts at each year-end given the provisions of enacted tax laws in each respective jurisdiction. Deferred tax assets are reduced by a valuation allowance when, based upon management's estimates, it is more likely than not that a portion of the deferred tax assets will not be realized in a future period. In addition, we accrue for income tax contingencies, or uncertain tax positions, that we believe are more likely than not exposures. See Note 7 for further discussion.

Property and equipment

Property and equipment are recorded at historical cost. Interest costs related to property under construction are capitalized as a component of construction costs. Interest capitalized during fiscal years 2011, 2010 and 2009 was $8.2 million, $3.9 million and $8.8 million, respectively.

Once rigs and related equipment are placed in service, they are depreciated on the straight-line method over their estimated useful lives, with depreciation discontinued only during the period when a drilling unit is out of service while undergoing a significant upgrade that extends its useful life. Our estimated useful lives of our various classifications of assets are as follows:

	Years
Drilling vessels and related equipment Drill pipe Furniture and other		5-35 3 3-10

Effective July 1, 2010, we extended the remaining depreciable life of the Atwood Southern Cross from one year to five years, based upon completion of a life enhancing upgrade, as the rig is technically capable of working over this revised period.

Effective October 1, 2008, we extended the remaining depreciable life of the Seahawk from one year to five years based upon the length of its then current contract commitment coupled with the fact that rig is technically capable of working over this revised period.

Maintenance, repairs and minor replacements are charged against income as incurred. Major replacements and upgrades are capitalized and depreciated over the remaining useful life of the asset, as determined upon completion of the work. The cost and related accumulated depreciation of assets sold, retired or otherwise disposed are removed from the accounts at the time of disposition, and any resulting gain or loss is reflected in the Consolidated Statements of Operations for the applicable periods.

Impairment of property and equipment

We periodically evaluate our property and equipment to determine whether their net carrying value is in excess of their net realizable value. These evaluations are performed when we have sustained significant declines in utilization and day rates, and recovery is not contemplated in the near future. We consider a number of factors such as estimated future cash flows, appraisals and current market value analysis in determining an asset's fair value. Assets are written down to their fair value if the carrying amount of the asset is not recoverable and exceeds its fair value.

We recorded an impairment charge of $5.0 million during fiscal year 2011 related to certain idled equipment.

Deferred drydocking costs

We defer the costs of scheduled drydocking and charge such costs to contract drilling expense over the period to the next scheduled drydocking (normally 30 months). At September 30, 2011, and 2010, deferred drydocking costs totaling $2.2 million and $1.5 million, respectively, were included in Deferred Costs and Other Assets in the accompanying Consolidated Balance Sheets.

Revenue recognition

We account for contract drilling revenue in accordance with the terms of the underlying drilling contract. These contracts generally provide that revenue is earned and recognized on a daily rate (i.e. "day rate") basis, and day rates are typically earned for a particular level of service over the life of a contract. Day rate contracts can be performed for a specified period of time or the time required to drill a specified well or number of wells. Revenues from day rate drilling operations, which are classified under contract drilling services, are recognized on a per day basis as services are performed assuming collectability is reasonably assured.

Deferred fees and costs

Fees received prior to the commencement of the drilling contract as compensation for the cost of relocating drilling rigs from one major operating area to another, equipment and upgrade costs reimbursed by the customer, as well as receipt of advance billings of day rates are recognized as earned on a straight-line method over the expected term of the related drilling contract, as are the day rates associated with such contracts. However, fees received upon termination of a drilling contract are generally recognized as earned during the period termination occurs as the termination fee is usually conditional based on the occurrence of an event as defined in the drilling contract, such as obtaining follow on work to the contract in progress or relocation beyond a certain distance when the contract is completed. In addition, we defer the mobilization costs relating to moving a drilling rig to a new area which are incurred prior to the commencement of the drilling contract and customer requested equipment purchases that will revert to the customer at the end of the applicable drilling contract. We amortize such costs on a straight-line basis over the life of the applicable drilling contract. Contract revenues and drilling costs are reported in the Consolidated Statements of Operations at their gross amounts.

At September 30, 2011 and 2010, deferred fees associated with mobilization, related equipment purchases and upgrades and receipt of advance billings of day rates totaled $9.6 million and $7.5 million, respectively. At September 30, 2011 and 2010, deferred costs associated with mobilization and related equipment purchases and upgrades totaled $2.8 million and $1.7 million, respectively. Deferred fees and deferred costs are classified as current or long-term deferred credits and deferred costs, respectively, in the accompanying Consolidated Balance Sheets based on the expected term of the applicable drilling contracts.

Share-based compensation

We account for share-based compensation in accordance with ASC 718. Under ASC 718, share-based compensation cost is measured at the grant date, based on the calculated fair value of the award, and is recognized as an expense over the requisite service period (generally the vesting period of the equity grant). See Note 3 for additional information regarding share-based compensation.

Earnings per common share

Basic and diluted earnings per share, or EPS, have been computed in accordance with ASC 260. Basic EPS excludes dilution and is computed by dividing net income (loss) by the weighted-average number of common shares outstanding for the period. Diluted EPS reflects the assumed effect of the issuance of additional shares in connection with the exercise of stock options. In accordance with ASC 718, we have also included the impact of pro forma deferred tax assets in calculating the potential windfall and shortfall tax benefits to determine the amount of diluted shares using the treasury stock method.

The computation of basic and diluted earnings per share under ASC 260 for each of the past three fiscal years is as follows (in thousands, except per share amounts):

	Net Income		Shares		Per Share Amount
Fiscal 2011:
Basic earnings per share	$	271,674		64,754	$	4.20
Effect of dilutive securities—
Stock options		—		649		(0.05	)
Diluted earnings per share	$	271,674		65,403	$	4.15
Fiscal 2010:
Basic earnings per share	$	256,996		64,391	$	3.99
Effect of dilutive securities—
Stock options		—		637		(0.04	)
Diluted earnings per share	$	256,996		65,028	$	3.95
Fiscal 2009:
Basic earnings per share	$	250,745		64,167	$	3.91
Effect of dilutive securities—
Stock options		—		326		(0.02	)
Diluted earnings per share	$	250,745		64,493	$	3.89

The calculation of diluted earnings per share for fiscal years 2011, 2010 and 2009 exclude consideration of shares of common stock which may be issued in connection with outstanding stock options of 664,000, 500,000 and 316,000, respectively, because such options were anti-dilutive. These options could potentially dilute basic EPS in the future.

Use of estimates

The preparation of financial statements in conformity with generally accepted accounting principles in the United States ("GAAP") requires management to make extensive use of estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.

Reclassifications

Certain reclassifications have been made to the prior period financial statements to conform to the current year presentation. These reclassifications did not affect the Consolidated Financial Statements reported in prior fiscal years

.

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Concentration Of Market And Credit Risk (Schedule Of Revenue By Major Customers) (Details) (USD $) In Thousands	12 Months Ended
	Sep. 30, 2011	Sep. 30, 2010	Sep. 30, 2009
Kosmos Energy Ghana Inc. [Member]
Revenues from significant customers	$ 136,205	$ 90,936
Sarawak Shell Bhd. [Member]
Revenues from significant customers	138,836	84,617	81,538
Chevron Australia [Member]
Revenues from significant customers	199,685	81,577
Noble Energy Mediterranean, Ltd. [Member]
Revenues from significant customers			149,603
Woodside Energy Ltd. [Member]
Revenues from significant customers			$ 114,637

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Share-Based Compensation (Schedule Of Unrecognized Compensation Cost) (Details) (USD $) In Thousands, unless otherwise specified	12 Months Ended
	Sep. 30, 2011	Sep. 30, 2010
Unrecognized compensation cost	$ 11,539	$ 13,185
Remaining weighted average service period (Years)	2.3	2.2
Stock Options [Member]
Unrecognized compensation cost	4,964	4,471
Restricted Stock [Member]
Unrecognized compensation cost	$ 6,575	$ 8,714

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Interest Rate Swaps (Tables)

12 Months Ended

Sep. 30, 2011

Interest Rate Swaps

Fair Values And Locations Of Derivative Instruments Recorded On The Balance Sheet

		September 30,
Type of Contract	Balance Sheet Classification	2011		2010
Short term interest rate swaps	Accrued liabilities	$	988	$	—
Long term interest rate swaps	Other long-term liabilities		631		—
Total derivative contracts, net		$	1,619	$	—

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Long-Term Debt (Tables)

12 Months Ended

Sep. 30, 2011

Long-Term Debt

Schedule Of Long-Term Debt

	September 30, 2011		September 30, 2010
2007 credit facility, bearing interest (market adjustable) at approximately 1.1% per annum at September 30, 2010	$	—	$	180,000
2008 credit facility, bearing interest (market adjustable) at approximately 1.8% per annum at September 30, 2010	$	—	$	50,000
2011 credit facility bearing interest (market adjustable) at approxiamtely 3.1% per annum at September 30, 2011	$	520,000	$	—
	$	520,000	$	230,000

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Income Taxes (Schedule Of Deferred Tax Assets And Liabilities) (Details) (USD $) In Thousands	Sep. 30, 2011	Sep. 30, 2010
Income Taxes
Net operating loss carryforwards	$ 16,014	$ 10,089
Tax credit carryforwards	1,618	730
Stock option compensation expense	7,105	6,298
Book accruals	3,273	3,157
Deferred tax assets	28,010	20,274
Difference in book and tax basis of equipment	(12,222)	(13,935)
Deferred tax liabilities	(12,222)	(13,935)
Net deferred tax assets (liabilities) before valuation allowance	15,788	6,339
Valuation allowance	(25,568)	(17,184)
Net noncurrent deferred tax liabilities	(9,780)	(10,845)
Deferred income tax assets (liabilities) net	$ (9,780)	$ (10,845)

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Share-Based Compensation (Fair Value Assumptions) (Details)	12 Months Ended
	Sep. 30, 2011 years	Sep. 30, 2010 years	Sep. 30, 2009 years
Share-Based Compensation
Risk-Free Interest Rate	1.90%	2.10%	1.50%
Expected Volatility	44.00%	43.00%	42.00%
Expected Life (Years)	5.2	5.3	5.2
Dividend Yield	0.00%	0.00%	0.00%

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Income Taxes (Tables)

12 Months Ended

Sep. 30, 2011

Income Taxes

Schedule Of Income Before Income Tax, Domestic And Foreign

	Fiscal 2011			Fiscal 2010			Fiscal 2009
Domestic loss	$	(22,954	)	$	(24,550	)	$	(9,492	)
Foreign income		347,801			344,529			305,923
	$	324,847		$	319,979		$	296,431

Schedule Of Components Of Income Tax Provision (Benefit)

	Fiscal 2011			Fiscal 2010			Fiscal 2009
Current - domestic	$	29		$	(34	)	$	160
Deferred - domestic		(980	)		6,813			(4,335	)
Current - foreign		54,209			58,218			50,052
Deferred - foreign		(85	)		(2,014	)		(191	)
	$	53,173		$	62,983		$	45,686

Schedule Of Deferred Tax Assets And Liabilities

	September 30,
	2011			2010
Deferred tax assets -
Net operating loss carryforwards	$	16,014		$	10,089
Tax credit carryforwards		1,618			730
Stock option compensation expense		7,105			6,298
Book accruals		3,273			3,157
		28,010			20,274
Deferred tax liabilities -
Difference in book and tax basis of equipment		(12,222	)		(13,935	)
		(12,222	)		(13,935	)
Net deferred tax assets (liabilities) before valuation allowance		15,788			6,339
Valuation allowance		(25,568	)		(17,184	)
	$	(9,780	)	$	(10,845	)
Net current deferred tax assets	$	—		$	—
Net noncurrent deferred tax liabilities		(9,780	)		(10,845	)
	$	(9,780	)	$	(10,845	)

Summary Of Activity Related To Net Uncertain Tax Positions

	Liability for Uncertain Tax Positions
Balance at October 1, 2010	$	9,968
Increases based on tax positions related to prior fiscal years		5,959
Increases based on tax positions related to current fiscal year		877
Balance at September 30, 2011	$	16,804

Schedule Of Effective Income Tax Rate Reconciliation

	Fiscal 2011			Fiscal 2010			Fiscal 2009
Statutory income tax rate		35	%		35	%		35	%
Resolution of prior period tax items					1			(1	)
Increase in tax rate resulting from -
Valuation allowance					2
Increases to the reserve for uncertain tax positions		2			1			1
Decrease in tax rate resulting from -
Foreign tax rate differentials, net of foreign tax credit utilization		(23	)		(19	)		(20	)
Effective income tax rate		16	%		20	%		15	%

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Fair Value Of Financial Instruments (Tables)

12 Months Ended

Sep. 30, 2011

Fair Value Of Financial Instruments

Estimated Fair Value Of Financial Instruments

	Fair Value Measurements						Liabilities at
Liabilities	Level 1		Level 2		Level 3		Fair Value
Interest Rate Swaps	$	—	$	1,619	$	—	$	1,619

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Nature Of Operations

12 Months Ended

Sep. 30, 2011

Nature Of Operations

Nature Of Operations

NOTE 1—NATURE OF OPERATIONS

This Annual Report is for Atwood Oceanics, Inc. and its subsidiaries, which are collectively referred to herein as the "Company," "we," "us" or "our" except where stated or the context indicates otherwise. We are an international offshore drilling contractor engaged in the drilling and completion of exploratory and developmental oil and gas wells. We currently own a diversified fleet of 10 mobile offshore drilling units located in the U.S. Gulf of Mexico, South America, the Mediterranean Sea, West Africa, Southeast Asia and Australia and are constructing an ultra-deepwater semisubmersible rig, two ultra-deepwater drillships and three high specification jack-up rigs for delivery in 2012 through 2014. We were founded in 1968 and are headquartered in Houston, Texas with other offices in Australia, Egypt, South Korea, Malaysia, Singapore and the United Kingdom.

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Concentration Of Market And Credit Risk (Tables)

12 Months Ended

Sep. 30, 2011

Concentration Of Market And Credit Risk

Schedule Of Revenue By Major Customers

	Fiscal 2011		Fiscal 2010		Fiscal 2009
Chevron Australia	$	199,685		81,577		—
Sarawak Shell Bhd.		138,836		84,617		81,538
Kosmos Energy Ghana Inc.		136,205		90,936		—
Noble Energy Mediterranean, Ltd.		—		—		149,603
Woodside Energy Ltd.		—		—		114,637

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Summary Of Significant Accounting Policies (Computation Of Basic And Diluted Earnings Per Share) (Details) (USD $) In Thousands, except Share data	3 Months Ended																12 Months Ended
	Sep. 30, 2011		Jun. 30, 2011		Mar. 31, 2011		Dec. 31, 2010		Sep. 30, 2010		Jun. 30, 2010		Mar. 31, 2010		Dec. 31, 2009		Sep. 30, 2011	Sep. 30, 2010	Sep. 30, 2009
Summary Of Significant Accounting Policies
Net Income, Basic	$ 72,928	[1]	$ 75,285	[1]	$ 70,611	[1]	$ 52,850	[1]	$ 64,229	[1]	$ 58,994	[1]	$ 66,755	[1]	$ 66,984	[1]	$ 271,674	$ 256,996	$ 250,745
Shares, Basic																	64,754,000	64,391,000	64,167,000
Per Share Amount, Basic	$ 1.13	[1]	$ 1.16	[1]	$ 1.09	[1]	$ 0.82	[1]	$ 1.00	[1]	$ 0.92	[1]	$ 1.04	[1]	$ 1.04	[1]	$ 4.20	$ 3.99	$ 3.91
Effect of dilutive securities: Stock options, Shares																	649,000	637,000	326,000
Effect of dilutive securities: Stock options, Per Share Amount																	$ (0.05)	$ (0.04)	$ (0.02)
Net Income, Diluted																	$ 271,674	$ 256,996	$ 250,745
Shares, Diluted																	65,403,000	65,028,000	64,493,000
Per Share Amount, Diluted, Total	$ 1.12	[1]	$ 1.15	[1]	$ 1.08	[1]	$ 0.81	[1]	$ 0.99	[1]	$ 0.91	[1]	$ 1.03	[1]	$ 1.03	[1]	$ 4.15	$ 3.95	$ 3.89
Outstanding stock options excluded in the calculation of earnings per share																	664,000	500,000	316,000

[1] The sum of the individual quarterly net income per common share amounts may not agree with year-to-date net income per common share as each quarterly computation is based on the weighted average number of common shares outstanding during that period.

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Income Taxes (Narrative) (Details) (USD $)	12 Months Ended
	Sep. 30, 2011
Income Taxes
Valuation allowance	$ 8,400,000
Operating loss carryforwards	83,200,000
Tax credit carryforward	1,600,000
Valuation allowance recorded	1,600,000
Windfall tax benefits from stock option exercises	12,900,000
Undistributed earnings	1,300,000,000
Increase of the liability for uncertain tax positions	16,800,000
Estimated accrued interest and penalties	$ 4,900,000

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Consolidated Balance Sheets (USD $) In Thousands	Sep. 30, 2011	Sep. 30, 2010
Current assets:
Cash and cash equivalents	$ 295,002	$ 180,523
Accounts receivable	87,173	96,463
Income tax receivable	5,631	16,052
Inventories of materials and supplies	58,263	52,749
Prepaid expenses and deferred costs	14,862	14,207
Total current assets	460,931	359,994
Property and equipment, net	1,887,321	1,343,961
Other receivables	11,875	15,799
Deferred costs and other assets	15,264	4,686
Total assets	2,375,391	1,724,440
LIABILITIES AND SHAREHOLDERS' EQUITY
Accounts payable	113,021	37,192
Accrued liabilities	30,680	25,368
Notes payable	5,461
Income tax payable	8,461	26,367
Deferred credits	1,700	4,533
Total Current Liabilities	159,323	93,460
Long term debt	520,000	230,000
Deferred income taxes	9,780	10,845
Deferred credits	7,910	2,919
Other long-term liabilities	25,591	17,082
Total long-term liabilities	563,281	260,846
Commitments and contingencies (Note 12)
Shareholders' equity (Note 8):
Common stock, $1 par value, 90,000 shares authorized with 64,960 and 64,443 issued and outstanding at September 30, 2011 and 2010, respectively	64,960	64,443
Paid-in capital	145,084	133,095
Retained earnings	1,444,270	1,172,596
Accumulated other comprehensive loss	(1,527)
Total shareholders' equity	1,652,787	1,370,134
Total liabilities and shareholders' equity	$ 2,375,391	$ 1,724,440

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Share-Based Compensation (Stock Option Activity) (Details) (USD $) In Thousands, except Per Share data, unless otherwise specified	12 Months Ended
	Sep. 30, 2011 years
Share-Based Compensation
Number of Options Outstanding at October 1, 2010	1,720
Wtd. Avg. Exercise Price, Outstanding at October 1, 2010	$ 21.58
Number of Options, Granted	291
Wtd. Avg. Exercise Price, Granted	$ 37.41
Number of Options, Exercised	(391)
Wtd. Avg. Exercise Price, Exercised	$ 15.04
Aggregate Intrinsic Value , Exercised	$ 10,933
Number of Options, Forfeited	(140)
Wtd. Avg. Exercise Price, Forfeited	$ 31.90
Number of Options Outstanding at September30, 2011	1,480
Wtd. Avg. Exercise Price, Outstanding at September 30, 2011	$ 25.44
Wtd. Avg. Remaining Contractual Life (Years), Outstanding at September 30, 2011	6.1
Aggregate Intrinsic Value, Outstanding at September 30, 2011	13,198
Number of Options, Exercisable at September 30, 2011	971
Wtd. Avg. Exercise Price, Exercisable at September 30, 2011	$ 21.01
Wtd. Avg. Remaining Contractual Life (Years), Exercisable at September 30, 2011	4.8
Aggregate Intrinsic Value, Exercisable at September 30, 2011	$ 12,971

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Consolidated Statements Of Changes In Shareholders' Equity (USD $) In Thousands	Common Stock [Member]	Paid-In Capital [Member]	Retained Earnings [Member]	Accumulated Other Comprehensive Loss [Member]	Total
Beginning Balance at Sep. 30, 2008	$ 64,031	$ 114,804	$ 664,855		$ 843,690
Beginning Balance (in shares) at Sep. 30, 2008	64,031
Net income			250,745		250,745
Restricted stock awards	185	(185)
Restricted stock awards (in shares)	185
Exercise of employee stock options	20	174			194
Exercise of employee stock options (in shares)	20
Stock option and restricted stock award compensation expense		7,664			7,664
Ending Balance at Sep. 30, 2009	64,236	122,457	915,600		1,102,293
Ending Balance (in shares) at Sep. 30, 2009	64,236
Net income			256,996		256,996
Restricted stock awards	145	(145)
Restricted stock awards (in shares)	145
Exercise of employee stock options	62	785			847
Exercise of employee stock options (in shares)	62
Stock option and restricted stock award compensation expense		9,998			9,998
Ending Balance at Sep. 30, 2010	64,443	133,095	1,172,596		1,370,134
Ending Balance (in shares) at Sep. 30, 2010	64,443
Net income			271,674		271,674
Other comprehensive loss				(1,527)	(1,527)
Restricted stock awards	102	(102)
Restricted stock awards (in shares)	102
Exercise of employee stock options	415	5,777			6,192
Exercise of employee stock options (in shares)	415
Stock option and restricted stock award compensation expense		6,314			6,314
Ending Balance at Sep. 30, 2011	$ 64,960	$ 145,084	$ 1,444,270	$ (1,527)	$ 1,652,787
Ending Balance (in shares) at Sep. 30, 2011	64,960

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Capital Stock (Details) (USD $)	12 Months Ended				12 Months Ended
	Sep. 30, 2002	Sep. 30, 2011	Sep. 30, 2010	Sep. 30, 2008	Sep. 30, 2008 Minimum [Member]
Preferred stock, shares authorized		1,000,000	1,000,000
Preferred stock, par value
Preferred stock, shares issued		0
Percentage of additional beneficial ownership outstanding common stock for the rights to be exercisable for shareholders who holds fifteen percent of outstanding common stock	5.00%
Percentage of beneficial ownership outstanding common stock for the rights to be exercisable	15.00%
Rights exercise price				$ 150
Rights redemption price					$ 0.0025
Preferred shares reserved for issuance		500,000

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Operations By Geographic Areas (Tables)

12 Months Ended

Sep. 30, 2011

Operations By Geographic Areas

Schedule Of Operations By Geographic Areas

	Fiscal			Fiscal			Fiscal
	2011			2010			2009
REVENUES:
North & South America	$	45,242		$	10,065		$	19,055
Southeast Asia & India		187,717			188,180			162,888
Mediterranean & Black Sea		28,486			46,622			169,828
Africa		183,946			271,583			89,601
Australia		199,685			134,112			145,135
TOTAL REVENUES	$	645,076		$	650,562		$	586,507
OPERATING INCOME (EXPENSE):
North & South America	$	(30,392	)	$	(12,204	)	$	48,535
Southeast Asia & India		129,799			132,192			42,025
Mediterranean & Black Sea		15,385			15,931			141,133
Africa		116,581			154,298			14,301
Australia		96,724			72,743			84,087
Corporate general and administrative expenses		563			(40,620	)		(31,639	)
TOTAL OPERATING INCOME (EXPENSE)	$	328,660		$	322,340		$	298,442
TOTAL ASSETS:
North & South America	$	292,808		$	90,496		$	61,982
Southeast Asia & India		904,581			974,050			750,141
Mediterranean & Black Sea		12,114			239,017			225,332
Africa		303,595			230,677			238,700
Australia		813,554			154,055			192,330
Other		48,739			36,145			40,917
TOTAL ASSETS	$	2,375,391		$	1,724,440		$	1,509,402

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Supplemental Cash Flow Information (Details) (USD $) In Thousands	12 Months Ended
	Sep. 30, 2011	Sep. 30, 2010	Sep. 30, 2009
Supplemental Cash Flow Information
Cash paid during the year for domestic and foreign income taxes	$ 55,062	$ 65,024	$ 40,713
Cash paid during the year for interest, net of amounts capitalized	3,703	1,656	2,144
Increase in insurance receivable related to reduction in value of spare capital equipment and inventory			2,518
Increase in accounts payable and accrued liabilities related to capital expenditures	$ 77,164	$ 10,616	$ 7,579

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Operations By Geographic Areas

12 Months Ended

Sep. 30, 2011

Operations By Geographic Areas

Operations By Geographic Areas

NOTE 15—OPERATIONS BY GEOGRAPHIC AREAS

We report our offshore contract drilling operation as a single reportable segment: Offshore Contract Drilling Services. The consolidation of our offshore contract drilling operations into one reportable segment is attributable to how we manage our business, including the nature of services provided and the type of customers of such services and the fact that all of our drilling fleet are dependent upon and able to service the worldwide oil industry. The mobile offshore drilling units and related equipment comprising our offshore rig fleet operate in a single, global market for contract drilling services and are often redeployed globally due to changing demands of our customers, which consist largely of major integrated oil and natural gas companies and independent oil and natural gas companies. Our offshore contract drilling services segment currently conducts offshore contract drilling operations located in the U.S. Gulf of Mexico, South America, the Mediterranean Sea, West Africa, Southeast Asia and Australia.

The accounting policies of our reportable segment are the same as those described in the summary of significant accounting policies (see Note 2). We evaluate the performance of our operating segment based on revenues from external customers and segment profit. A summary of revenues and operating margin for the fiscal years ended September 30, 2011, 2010 and 2009 and identifiable assets by geographic areas as of September 30, 2011, 2010 and 2009 is as follows (in thousands):

	Fiscal			Fiscal			Fiscal
	2011			2010			2009
REVENUES:
North & South America	$	45,242		$	10,065		$	19,055
Southeast Asia & India		187,717			188,180			162,888
Mediterranean & Black Sea		28,486			46,622			169,828
Africa		183,946			271,583			89,601
Australia		199,685			134,112			145,135
TOTAL REVENUES	$	645,076		$	650,562		$	586,507
OPERATING INCOME (EXPENSE):
North & South America	$	(30,392	)	$	(12,204	)	$	48,535
Southeast Asia & India		129,799			132,192			42,025
Mediterranean & Black Sea		15,385			15,931			141,133
Africa		116,581			154,298			14,301
Australia		96,724			72,743			84,087
Corporate general and administrative expenses		563			(40,620	)		(31,639	)
TOTAL OPERATING INCOME (EXPENSE)	$	328,660		$	322,340		$	298,442
TOTAL ASSETS:
North & South America	$	292,808		$	90,496		$	61,982
Southeast Asia & India		904,581			974,050			750,141
Mediterranean & Black Sea		12,114			239,017			225,332
Africa		303,595			230,677			238,700
Australia		813,554			154,055			192,330
Other		48,739			36,145			40,917
TOTAL ASSETS	$	2,375,391		$	1,724,440		$	1,509,402

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Quarterly Financial Data (Unaudited) (Tables)

12 Months Ended

Sep. 30, 2011

Quarterly Financial Data (Unaudited)

Schedule Of Quarterly Financial Information

	Quarters ended (1)
	December 31		March 31		June 30		September 30
Fiscal 2011
Revenues	$	146,286	$	159,085	$	162,147	$	177,558
Income before income taxes		63,240		90,485		87,203		83,919
Net income		52,850		70,611		75,285		72,928
Earnings per common share -
Basic		0.82		1.09		1.16		1.13
Diluted		0.81		1.08		1.15		1.12
Fiscal 2010
Revenues	$	164,243	$	159,069	$	166,637	$	160,613
Income before income taxes		81,255		77,018		84,847		76,859
Net income		66,984		66,755		58,994		64,229
Earnings per common share -
Basic		1.04		1.04		0.92		1.00
Diluted		1.03		1.03		0.91		0.99

(1) The sum of the individual quarterly net income per common share amounts may not agree with year-to-date net income per common share as each quarterly computation is based on the weighted average number of common shares outstanding during that period.

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Summary Of Significant Accounting Policies (Policy)

12 Months Ended

Sep. 30, 2011

Summary Of Significant Accounting Policies

Consolidation

Consolidation

The consolidated financial statements include the accounts of Atwood Oceanics, Inc. and all of its domestic and foreign subsidiaries. All significant intercompany accounts and transactions have been eliminated in consolidation.

Cash And Cash Equivalents

Cash and cash equivalents

Cash and cash equivalents consist of cash in banks and highly liquid debt instruments, which mature within three months of the date of purchase.

Foreign Exchange

Foreign exchange

The U.S. Dollar is the functional currency for all areas of our operations. Accordingly, monetary assets and liabilities denominated in foreign currency are re-measured to U.S. Dollars at the rate of exchange in effect at the end of the fiscal year, items of income and expense are re-measured at average monthly rates, and property and equipment and other nonmonetary amounts are re-measured at historical rates. Gains and losses on foreign currency transactions and re-measurements are included in contract drilling costs in our consolidated statements of operations. We recorded foreign exchange losses of $0.9 million, $0.1 million and $0.5 million, during fiscal years 2011, 2010 and 2009, respectively. We did not disclose the re-measurement losses on the statement of cash flows due to the immaterial nature of the amounts.

Accounts Receivable

Accounts receivable

We record trade accounts receivable at the amount we invoice our customers. Our portfolio of accounts receivable is comprised of major international corporate entities and government organizations with stable payment experience. Included within accounts receivable at September 30, 2011, and 2010 are unbilled receivable balances totaling $1.1 million and $1.0 million, respectively, which represent amounts for which services have been performed, revenue has been recognized based on contractual provisions and for which collection is deemed probable. Such unbilled amounts were billed subsequent to their respective fiscal year end. Historically, our uncollectible accounts receivable have been immaterial, and typically, we do not require collateral for our receivables. We provide an allowance for uncollectible accounts, as necessary, on a specific identification basis. We have no allowance for doubtful accounts at September 30, 2011 or 2010.

Inventories Of Material And Supplies

Inventories of material and supplies

Inventories consist of spare parts, material and supplies held for consumption and are stated principally at the lower of average cost or market value, net of reserves for excess and obsolete inventory of $2.5 million and $2.0 million at September 30, 2011, and 2010, respectively.

Income Taxes

Income taxes

We account for income taxes in accordance with Financial Accounting Standards Board ("FASB") Accounting Standards Codification ("ASC") 740. Under ASC 740, deferred income taxes are recorded to reflect the tax consequences on future years of differences between the tax basis of assets and liabilities and their financial reporting amounts at each year-end given the provisions of enacted tax laws in each respective jurisdiction. Deferred tax assets are reduced by a valuation allowance when, based upon management's estimates, it is more likely than not that a portion of the deferred tax assets will not be realized in a future period. In addition, we accrue for income tax contingencies, or uncertain tax positions, that we believe are more likely than not exposures. See Note 7 for further discussion.

Property And Equipment

Property and equipment

Property and equipment are recorded at historical cost. Interest costs related to property under construction are capitalized as a component of construction costs. Interest capitalized during fiscal years 2011, 2010 and 2009 was $8.2 million, $3.9 million and $8.8 million, respectively.

Once rigs and related equipment are placed in service, they are depreciated on the straight-line method over their estimated useful lives, with depreciation discontinued only during the period when a drilling unit is out of service while undergoing a significant upgrade that extends its useful life. Our estimated useful lives of our various classifications of assets are as follows:

	Years
Drilling vessels and related equipment Drill pipe Furniture and other		5-35 3 3-10

Effective July 1, 2010, we extended the remaining depreciable life of the Atwood Southern Cross from one year to five years, based upon completion of a life enhancing upgrade, as the rig is technically capable of working over this revised period.

Effective October 1, 2008, we extended the remaining depreciable life of the Seahawk from one year to five years based upon the length of its then current contract commitment coupled with the fact that rig is technically capable of working over this revised period.

Maintenance, repairs and minor replacements are charged against income as incurred. Major replacements and upgrades are capitalized and depreciated over the remaining useful life of the asset, as determined upon completion of the work. The cost and related accumulated depreciation of assets sold, retired or otherwise disposed are removed from the accounts at the time of disposition, and any resulting gain or loss is reflected in the Consolidated Statements of Operations for the applicable periods.

Impairment Of Property And Equipment

Impairment of property and equipment

We periodically evaluate our property and equipment to determine whether their net carrying value is in excess of their net realizable value. These evaluations are performed when we have sustained significant declines in utilization and day rates, and recovery is not contemplated in the near future. We consider a number of factors such as estimated future cash flows, appraisals and current market value analysis in determining an asset's fair value. Assets are written down to their fair value if the carrying amount of the asset is not recoverable and exceeds its fair value.

We recorded an impairment charge of $5.0 million during fiscal year 2011 related to certain idled equipment.

Deferred Drydocking Costs

Deferred drydocking costs

We defer the costs of scheduled drydocking and charge such costs to contract drilling expense over the period to the next scheduled drydocking (normally 30 months). At September 30, 2011, and 2010, deferred drydocking costs totaling $2.2 million and $1.5 million, respectively, were included in Deferred Costs and Other Assets in the accompanying Consolidated Balance Sheets.

Revenue Recognition

Revenue recognition

We account for contract drilling revenue in accordance with the terms of the underlying drilling contract. These contracts generally provide that revenue is earned and recognized on a daily rate (i.e. "day rate") basis, and day rates are typically earned for a particular level of service over the life of a contract. Day rate contracts can be performed for a specified period of time or the time required to drill a specified well or number of wells. Revenues from day rate drilling operations, which are classified under contract drilling services, are recognized on a per day basis as services are performed assuming collectability is reasonably assured.

Deferred Fees And Costs

Deferred fees and costs

Fees received prior to the commencement of the drilling contract as compensation for the cost of relocating drilling rigs from one major operating area to another, equipment and upgrade costs reimbursed by the customer, as well as receipt of advance billings of day rates are recognized as earned on a straight-line method over the expected term of the related drilling contract, as are the day rates associated with such contracts. However, fees received upon termination of a drilling contract are generally recognized as earned during the period termination occurs as the termination fee is usually conditional based on the occurrence of an event as defined in the drilling contract, such as obtaining follow on work to the contract in progress or relocation beyond a certain distance when the contract is completed. In addition, we defer the mobilization costs relating to moving a drilling rig to a new area which are incurred prior to the commencement of the drilling contract and customer requested equipment purchases that will revert to the customer at the end of the applicable drilling contract. We amortize such costs on a straight-line basis over the life of the applicable drilling contract. Contract revenues and drilling costs are reported in the Consolidated Statements of Operations at their gross amounts.

At September 30, 2011 and 2010, deferred fees associated with mobilization, related equipment purchases and upgrades and receipt of advance billings of day rates totaled $9.6 million and $7.5 million, respectively. At September 30, 2011 and 2010, deferred costs associated with mobilization and related equipment purchases and upgrades totaled $2.8 million and $1.7 million, respectively. Deferred fees and deferred costs are classified as current or long-term deferred credits and deferred costs, respectively, in the accompanying Consolidated Balance Sheets based on the expected term of the applicable drilling contracts.

Share-Based Compensation

Share-based compensation

We account for share-based compensation in accordance with ASC 718. Under ASC 718, share-based compensation cost is measured at the grant date, based on the calculated fair value of the award, and is recognized as an expense over the requisite service period (generally the vesting period of the equity grant). See Note 3 for additional information regarding share-based compensation.

Earnings Per Common Share

Earnings per common share

Basic and diluted earnings per share, or EPS, have been computed in accordance with ASC 260. Basic EPS excludes dilution and is computed by dividing net income (loss) by the weighted-average number of common shares outstanding for the period. Diluted EPS reflects the assumed effect of the issuance of additional shares in connection with the exercise of stock options. In accordance with ASC 718, we have also included the impact of pro forma deferred tax assets in calculating the potential windfall and shortfall tax benefits to determine the amount of diluted shares using the treasury stock method.

The computation of basic and diluted earnings per share under ASC 260 for each of the past three fiscal years is as follows (in thousands, except per share amounts):

	Net Income		Shares		Per Share Amount
Fiscal 2011:
Basic earnings per share	$	271,674		64,754	$	4.20
Effect of dilutive securities—
Stock options		—		649		(0.05	)
Diluted earnings per share	$	271,674		65,403	$	4.15
Fiscal 2010:
Basic earnings per share	$	256,996		64,391	$	3.99
Effect of dilutive securities—
Stock options		—		637		(0.04	)
Diluted earnings per share	$	256,996		65,028	$	3.95
Fiscal 2009:
Basic earnings per share	$	250,745		64,167	$	3.91
Effect of dilutive securities—
Stock options		—		326		(0.02	)
Diluted earnings per share	$	250,745		64,493	$	3.89

The calculation of diluted earnings per share for fiscal years 2011, 2010 and 2009 exclude consideration of shares of common stock which may be issued in connection with outstanding stock options of 664,000, 500,000 and 316,000, respectively, because such options were anti-dilutive. These options could potentially dilute basic EPS in the future.

Use Of Estimates

Use of estimates

The preparation of financial statements in conformity with generally accepted accounting principles in the United States ("GAAP") requires management to make extensive use of estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.

Reclassifications

Reclassifications

Certain reclassifications have been made to the prior period financial statements to conform to the current year presentation. These reclassifications did not affect the Consolidated Financial Statements reported in prior fiscal years

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Consolidated Statements Of Comprehensive Income (USD $) In Thousands	12 Months Ended
	Sep. 30, 2011	Sep. 30, 2010	Sep. 30, 2009
Statement of Income and Comprehensive Income [Abstract]
Net income	$ 271,674	$ 256,996	$ 250,745
Loss on interest rate swaps	(1,527)
Other comprehensive loss	(1,527)
Total comprehensive income	$ 270,147	$ 256,996	$ 250,745

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Consolidated Balance Sheets (Parenthetical) (USD $)	Sep. 30, 2011	Sep. 30, 2010
Consolidated Balance Sheets
Preferred stock, par value
Preferred stock, shares authorized	1,000,000	1,000,000
Preferred stock, shares outstanding	0	0
Common stock, par value	$ 1	$ 1
Common stock, shares authorized	90,000,000	90,000,000
Common stock, shares issued	64,960,000	64,960,000
Common stock, shares outstanding	64,443,000	64,443,000

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Fair Value Of Financial Instruments

12 Months Ended

Sep. 30, 2011

Fair Value Of Financial Instruments

Fair Value Of Financial Instruments

NOTE 10—FAIR VALUE OF FINANCIAL INSTRUMENTS

On October 1, 2008, we adopted, without any impact to our financial position, operating results or cash flows, the provisions of ASC 820, for our financial assets and liabilities with respect to which we have recognized or disclosed at fair value on a recurring basis. We apply the guidance provided under ASC 820 to our financial assets and liabilities and nonfinancial liabilities that are measured and reported at fair value on a recurring basis.

The carrying amounts of our cash and cash equivalents, accounts receivables and payables are based on fair value due to the short-term maturity thereof. The carrying amount of our floating rate date is based on the fair value because such debt bears short-term, market-based interest rates. In addition, we record our interest rate swaps at their fair value. See Note 6.

Fair Value Measurements

We have certain liabilities that we have classified and disclosed fair value measurements using the following levels of the fair value hierarchy:

Level 1:    Unadjusted quoted prices in active markets that are accessible at the measurement date for identical, unrestricted assets or liabilities.

Level 2:    Quoted prices in markets that are not active, or inputs which are observable, either directly or indirectly, for substantially the full term of the asset or liability.

Level 3:    Measurement based on prices or valuation models that require inputs that are both significant to the fair value measurement and less observable for objective sources (i.e., supported by little or no market activity).

Assets and liabilities measured at fair value are classified based on the lowest level of input that is significant to the fair value measurement. Our assessment of the significance of a particular input to the fair value measurement requires judgment, which may affect the valuation of the fair value of assets and liabilities and their placement within the fair value hierarchy levels as described in ASC 820. The determination of the fair values, stated below, takes into account the market for our financial assets and liabilities, the associated credit risk and other factors as required by ASC 820. We consider active markets as those in which transactions for the assets or liabilities occur in sufficient frequency and volume to provide pricing information on an ongoing basis.

The fair values of our interest rate swaps are based upon quotes obtained from counterparties to the derivative contracts. We review other readily available market prices for our derivative contracts as there is an active market for these contracts. We have access to documented valuation models used by our counterparties or other market participants. Included in these models are discount factors that are used to estimate values in the derivative transaction calculations. Based on the inputs for the fair value measurement, we have classified our derivative contract liabilities as Level 2.

The following table sets forth the estimated fair value of our financial instruments recognized at fair value as of September 30, 2011:

	Fair Value Measurements						Liabilities at
Liabilities	Level 1		Level 2		Level 3		Fair Value
Interest Rate Swaps	$	—	$	1,619	$	—	$	1,619

We record the interest rate derivative contracts at fair value on our consolidated balance sheets. Hedging effectiveness is evaluated at each quarter end using the "Dollar Off-Set Method". Each quarter changes in the fair values will be recorded on balance sheet prospectively, with an offset to Other Comprehensive Income ("OCI").

For interest rate swaps, we evaluate all material terms between the swap and the underlying debt obligation. Any change in fair value resulting from ineffectiveness is recognized immediately in earnings. The amount of the gain or loss recorded in the income statement will be equal to the amount of ineffectiveness, if any. No income or loss was recognized during fiscal years 2011, 2010 or 2009 due to hedge ineffectiveness.

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Document And Entity Information (USD $)	12 Months Ended
	Sep. 30, 2011	Nov. 21, 2011	Mar. 31, 2011
Document And Entity Information [Abstract]
Entity Registrant Name	ATWOOD OCEANICS INC
Entity Central Index Key	0000008411
Current Fiscal Year End Date	--09-30
Entity Filer Category	Large Accelerated Filer
Entity Common Stock, Shares Outstanding		64,960,000
Document Fiscal Year Focus	2011
Document Fiscal Period Focus	FY
Document Type	10-K
Amendment Flag	false
Document Period End Date	Sep. 30, 2011
Trading Symbol	atw
Entity Current Reporting Status	Yes
Entity Voluntary Filers	No
Entity Well-known Seasoned Issuer	Yes
Entity Public Float			$ 3,000,000,000

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Concentration Of Market And Credit Risk

12 Months Ended

Sep. 30, 2011

Concentration Of Market And Credit Risk

Concentration Of Market And Credit Risk

NOTE 11—CONCENTRATION OF MARKET AND CREDIT RISK

All of our customers are in the oil and gas offshore exploration and production industry. This industry concentration has the potential to impact our overall exposure to market and credit risks, either positively or negatively, in that our customers could be affected by similar changes in economic, industry or other conditions. However, we believe that the credit risk posed by this industry concentration is offset by the creditworthiness of our customer base.

Revenues from significant customers are as follows (in thousands):

	Fiscal 2011		Fiscal 2010		Fiscal 2009
Chevron Australia	$	199,685		81,577		—
Sarawak Shell Bhd.		138,836		84,617		81,538
Kosmos Energy Ghana Inc.		136,205		90,936		—
Noble Energy Mediterranean, Ltd.		—		—		149,603
Woodside Energy Ltd.		—		—		114,637

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Consolidated Statements Of Operations (USD $) In Thousands, except Per Share data	12 Months Ended
	Sep. 30, 2011	Sep. 30, 2010	Sep. 30, 2009
Operating revenues
Contract drilling	$ 645,076	$ 650,562	$ 586,507
Operating costs and expenses
Contract drilling	223,565	252,427	221,709
Depreciation	43,597	37,030	35,119
General and administrative	44,407	40,620	31,639
Other, net	4,847	(1,855)	(402)
Total costs and expenses	316,416	328,222	288,065
Operating income	328,660	322,340	298,442
Other income (expense):
Interest expense, net of capitalized interest	(4,530)	(2,725)	(2,293)
Interest income	717	364	282
Other income (expense) total	(3,813)	(2,361)	(2,011)
Income before income taxes	324,847	319,979	296,431
Provision for income taxes	53,173	62,983	45,686
Net income	$ 271,674	$ 256,996	$ 250,745
Earnings per common share (Note 2):
Basic	$ 4.20	$ 3.99	$ 3.91
Diluted	$ 4.15	$ 3.95	$ 3.89
Average common shares outstanding (Note 2):
Basic	64,754	64,391	64,167
Diluted	65,403	65,028	64,493

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Long-Term Debt

12 Months Ended

Sep. 30, 2011

Long-Term Debt

Long-Term Debt

NOTE 5—LONG-TERM DEBT

A summary of long-term debt is as follows (in thousands):

	September 30, 2011		September 30, 2010
2007 credit facility, bearing interest (market adjustable) at approximately 1.1% per annum at September 30, 2010	$	—	$	180,000
2008 credit facility, bearing interest (market adjustable) at approximately 1.8% per annum at September 30, 2010	$	—	$	50,000
2011 credit facility bearing interest (market adjustable) at approxiamtely 3.1% per annum at September 30, 2011	$	520,000	$	—
	$	520,000	$	230,000

In May 2011, we entered into a $750 million secured reducing revolving credit agreement with Nordea Bank Finland plc, New York Branch, as Administrative Agent and several lenders (the "2011 Credit Agreement"). The 2011 Credit Agreement includes provisions for incremental commitments up to $350 million, bringing the total commitment to $1.1 billion, if exercised. The maturity of the 2011 Credit Agreement is May 2016, subject to acceleration upon certain specified events of default, including but not limited to delinquent payments, bankruptcy filings, material adverse judgments, guarantees or security documents not being in full effect, non-compliance with the Employee Retirement Income Security Act of 1974, cross-defaults under other debt agreements, or a change of control. The 2011 Credit Agreement contains limitations on our ability to incur liens; merge, consolidate or sell substantially all assets; pay cash dividends; incur additional indebtedness; make advances, investments or loans; and transact with affiliates. The 2011 Credit Agreement is secured primarily by first preferred mortgages on six of our active drilling units (the Atwood Aurora, the Atwood Beacon, the Atwood Eagle, the Atwood Falcon, the Atwood Hunter, and the Atwood Osprey).

Borrowings under the 2011 Credit Agreement bear interest of the Eurodollar rate plus a margin of 2.50%. Certain borrowings effectively bear interest at a fixed rate due to our interest rate swaps. See Note 6. The 2011 Credit Agreement also provides for the issuance, when required, of standby letters of credit. Under the 2011 Credit Agreement, we will pay a commitment fee of 1.0% per annum on the unused portion of the underlying commitment. As of September 30, 2011, we have $227 million of funds available to borrow under this credit facility, with standby letters of credit issued in the aggregate amount of $3.4 million.

The 2011 Credit Agreement contains various financial covenants that impose a maximum leverage ratio of 4.0 to 1.0, a debt to capitalization ratio of 0.5 to 1.0, a minimum interest expense coverage ratio of 3.0 to 1.0 and a minimum collateral maintenance of 150% of the aggregate amount outstanding under the facility. We were in compliance with all financial covenants under the 2011 Credit Agreement at September 30, 2011. No additional funds have been borrowed under the 2011 Credit Agreement subsequent to September 30, 2011.

We have entered into four $50.0 million notional interest rate swap agreements to fix the variable interest rate on borrowings under the 2011 Credit Agreement through September 2014. The first three interest rate swap agreements serve to fix the annual rate at approximately 3.6% from July 2011 to September 2014. The fourth interest rate swap agreement serves to fix the annual rate at approximately 3.4% from September 2011 to September 2014.

Prior to the execution of the 2011 Credit Agreement, we had a five-year $300 million credit facility executed in October 2007 and a five-year $280 million credit facility executed in November 2008, both of which were retired during May 2011 with funding from the 2011 Credit Agreement.

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Property And Equipment

12 Months Ended

Sep. 30, 2011

Property And Equipment

Property And Equipment

NOTE 4—PROPERTY AND EQUIPMENT

A summary of property and equipment by classification is as follows (in thousands):

	September 30,
	2011			2010
Drilling vessels and related equipment
Cost	$	2,315,419		$	1,733,298
Accumulated depreciation		(435,577	)		(392,808	)
Net book value		1,879,842			1,340,490
Drill pipe
Cost		18,182			15,468
Accumulated depreciation		(13,885	)		(13,563	)
Net book value		4,297			1,905
Furniture and other
Cost		8,800			7,115
Accumulated depreciation		(5,618	)		(5,549	)
Net book value		3,182			1,566
Property and equipment, net	$	1,887,321		$	1,343,961

New Construction Projects

During fiscal year 2008, we entered into construction contracts with Jurong Shipyard Pte. Ltd. to construct two Friede & Goldman ExD Millennium semisubmersible drilling units (the Atwood Osprey and the Atwood Condor). The Atwood Osprey was delivered in April 2011, and the Atwood Condor is scheduled for delivery in the third quarter of fiscal year 2012.

In October 2010, we entered into turnkey construction agreements with PPL Shipyard PTE LTD in Singapore ("PPL") to construct two Pacific Class 400 jack-up drilling units (the Atwood Mako and the Atwood Manta). The Atwood Mako and the Atwood Manta are scheduled for delivery in the fourth quarter of fiscal year 2012 and the first quarter of fiscal year 2013, respectively.

In January 2011, we exercised the first of three option agreements and entered into a turnkey construction agreement with PPL to construct a third Pacific Class 400 jack-up drilling unit (the Atwood Orca). The Atwood Orca is scheduled for delivery in the third quarter of fiscal year 2013.

In January 2011, we entered into a turnkey construction contract with Daewoo Shipbuilding and Marine Engineering Co., Ltd ("DSME") to construct an ultra-deepwater drillship, the Atwood Advantage, at the DSME yard in South Korea. The Atwood Advantage is scheduled for delivery in the fourth quarter of fiscal year 2013.

As of September 30, 2011, we had expended approximately $650 million towards the construction of our five drilling units under construction. Total remaining firm commitments for our five drilling units under construction were approximately $1.2 billion at September 30, 2011.

On October 15, 2011, we entered into a turnkey construction contract with DSME to construct an ultra-deepwater drillship, the Atwood Achiever, at the DSME yard in South Korea. The Atwood Achiever is expected to be delivered by June 30, 2014.

Warehouse Fire

On October 25, 2008, a fire occurred in a third party warehouse facility in Houston, Texas that we use to store fleet wide spare capital equipment. In addition, this third party provides international freight forwarding services, and thus, the location was also used as a staging area for equipment shipments to our international fleet. Although the fire was contained primarily to one area of the facility, we did incur significant damage to our fleet spares and other equipment in-transit. At the time of the incident we had insurance to cover the cost of replacing and repairing damaged equipment in excess of a $1,000 deductible.

As of September 30, 2010, our claim was fully processed and deemed closed by the insurance company. We collected all insurance proceeds equal to our $6.2 million property loss claim and costs incurred to inspect and evaluate damaged equipment.

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Quarterly Financial Data (Unaudited)

12 Months Ended

Sep. 30, 2011

Quarterly Financial Data (Unaudited)

Quarterly Financial Data (Unaudited)

NOTE 16—QUARTERLY FINANCIAL DATA (UNAUDITED)

Summarized quarterly results for fiscal years 2011 and 2010 are as follows (in thousands, except per share amounts):

	Quarters ended (1)
	December 31		March 31		June 30		September 30
Fiscal 2011
Revenues	$	146,286	$	159,085	$	162,147	$	177,558
Income before income taxes		63,240		90,485		87,203		83,919
Net income		52,850		70,611		75,285		72,928
Earnings per common share -
Basic		0.82		1.09		1.16		1.13
Diluted		0.81		1.08		1.15		1.12
Fiscal 2010
Revenues	$	164,243	$	159,069	$	166,637	$	160,613
Income before income taxes		81,255		77,018		84,847		76,859
Net income		66,984		66,755		58,994		64,229
Earnings per common share -
Basic		1.04		1.04		0.92		1.00
Diluted		1.03		1.03		0.91		0.99

(1) The sum of the individual quarterly net income per common share amounts may not agree with year-to-date net income per common share as each quarterly computation is based on the weighted average number of common shares outstanding during that period.

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Commitments And Contingencies

12 Months Ended

Sep. 30, 2011

Commitments And Contingencies

Commitments And Contingencies

NOTE 12—COMMITMENTS AND CONTINGENCIES

Operating Leases

Future minimum lease payments for operating leases for fiscal years ending September 30 are as follows (in thousands):

2012	$	1,484
2013	$	1,280
2014	$	1,258
2015	$	290
2016	$	0

Total rent expense under operating leases was approximately $4.4 million, $4.8 million and $4.1 million for fiscal years ended September 30, 2011, 2010, and 2009, respectively.

Litigation

We are party to a number of lawsuits which are ordinary, routine litigation incidental to our business, the outcome of which is not expected to have, either individually or in the aggregate, a material adverse effect on our financial position, results of operations or cash flows.

Other Matters

The Atwood Beacon operated in India from early December 2006 to the end of July 2008. A service tax in India was enacted in 2004 on revenues derived from seismic and exploration activities. This service tax law was subsequently amended in June 2007 and again in May 2008 to state that revenues derived from mining services and drilling services were specifically subject to this service tax. The contract terms with our customer in India provided that any liability incurred by us related to any taxes pursuant to laws not in effect at the time the contract was executed in 2005 was to be reimbursed by our customer. We believe any service taxes assessed by the Indian tax authorities under the 2007 or 2008 amendments are an obligation of our customer. Our customer is disputing this obligation on the basis that revenues derived from drilling services were taxable under the initial 2004 law and are, therefore, our obligation.

After reviewing the status of the drilling service we provided to our customer, the Indian tax authorities assessed service tax obligations on revenues derived from the Atwood Beacon commencing on June 1, 2007. The relevant Indian tax authority issued an extensive written ruling setting forth the application of the June 1, 2007 service tax regulation and confirming the position that drilling services, including the services performed under our contract with our customer prior to June 1, 2007, were not covered by the 2004 service tax law. The ruling of the Indian tax authority is currently subject to the review of the Tax Appeal Tribunal.

As of September 30, 2011, we have paid to the Indian government $10.1 million in service taxes and have accrued $1.8 million of additional service tax obligations in accrued liabilities on our consolidated balance sheets, for a total of $11.9 million relating to service taxes. We have recorded a corresponding $11.8 million long-term other receivable due from our customer relating to service taxes due under the contract. We intend to pursue collection of such amounts from our customer.

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Capital Stock

12 Months Ended

Sep. 30, 2011

Capital Stock

Capital Stock

NOTE 8—CAPITAL STOCK

Preferred Stock

We are authorized to issue 1.0 million shares of preferred stock with no par value. In October 2002, we designated Series A Junior Participating Preferred Stock in connection with the Rights Agreement described below. No preferred shares have been issued.

Rights Agreement

In September 2002, we authorized and declared a dividend of one Right (as defined in the Rights Agreement effective October 18, 2002, which governs the Rights) for each outstanding share of common stock as of November 5, 2002, subject to lender approval and consent, which was obtained. One Right is also associated with each share of common stock that becomes outstanding after November 5, 2002, but before the earliest of the date on which (i) the Rights become exercisable, (ii) the Rights are redeemed by us or (iii) the Rights expire, which is November 5, 2012. The Rights are not exercisable until a person or group of affiliated or associated persons begin to acquire or acquires beneficial ownership of 15% or more of our outstanding common stock. This provision does not apply to shareholders already holding 15% or more of our outstanding common stock as of November 5, 2002, until they acquire an additional 5%.

When exercisable, each Right entitles the registered holder to purchase from us one four-thousandth of a share of our Series A Junior Participating Preferred Stock, no par value, at a price of $150 upon the exercise of each Right. The redemption price of each Right is $0.0025. The Rights are subject to adjustment for certain future events including any future stock splits. At September 30, 2011, 500,000 preferred shares have been reserved for issuance in the event that Rights are exercised.

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Retirement Plans (Details) (USD $)	12 Months Ended
	Sep. 30, 2011	Sep. 30, 2010	Sep. 30, 2009
Qualified participants contribution percentage	100.00%
Maximum contribution by qualified participants	$ 49,000
Amount of forfeitures utilized to reduce cash contribution requirements	300,000	300,000	0
Actual cash contributions	4,300,000	5,200,000	4,900,000
Amount of forfeitures utilized to reduce future cash contribution requirements	$ 200,000
Decription of retirement plan contribution	In the first month following the date of hire, an employee can elect to become a participant in a Retirement Plan. Under the Plans, participant contributions of 1% to 5% matched on a 2 to 1 basis. Our contributions vest 100% to each participant after three years of service with us including any period of ineligibility mandated by the Plans. If a participant terminates employment before becoming fully vested, the unvested portion is credited to our account and can be used only to offset our future contribution requirements.
Maximum [Member]
Percentage of earnings contributed by participants	5.00%
Minimum [Member]
Percentage of earnings contributed by participants	1.00%

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Interest Rate Swaps

12 Months Ended

Sep. 30, 2011

Interest Rate Swaps

Interest Rate Swaps

NOTE 6—INTEREST RATE SWAPS

We are exposed to interest rate risk on borrowings under the 2011 Credit Agreement. Our variable rate debt exposes us to short-term changes in market interest rates as our interest obligations on these instruments are periodically re-determined based on the prevailing Eurodollar rate. We enter into interest rate swaps to limit our exposure to fluctuations and volatility in interest rates. We do not engage in derivative transactions for speculative or trading purposes and we are not a party to leveraged derivatives.

In the fourth quarter of fiscal year 2011, we entered into four $50.0 million notional interest rate swaps to fix the variable interest rate on borrowings under the 2011 Credit Agreement through September 2014. Three of these interest rate swap agreements serve to fix the annual rate at approximately 3.6% from July 2011 to September 2014. A fourth interest rate swap agreement serves to fix the annual rate at approximately 3.4% from September 2011 to September 2014.

Fair Value of Derivatives

In accordance with ASC 815, Derivatives and Hedging, the following table presents the fair value of our cash flow hedge derivative contracts included in the Consolidated Balance Sheets as of September 31, 2011 and 2010 (See Note 10 for additional information regarding Fair Value Measurements):

		September 30,
Type of Contract	Balance Sheet Classification	2011		2010
Short term interest rate swaps	Accrued liabilities	$	988	$	—
Long term interest rate swaps	Other long-term liabilities		631		—
Total derivative contracts, net		$	1,619	$	—

We recognized an unrealized loss of approximately $1.6 million in Other Comprehensive Income ("OCI") as a result of changes in fair value of our interest rate derivatives during fiscal year 2011. No gain or loss was recognized in OCI during fiscal year 2010.

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Income Taxes

12 Months Ended

Sep. 30, 2011

Income Taxes

Income Taxes

NOTE 7—INCOME TAXES

Domestic and foreign income before income taxes for the three-year period ended September 30, 2011, is as follows (in thousands):

	Fiscal 2011			Fiscal 2010			Fiscal 2009
Domestic loss	$	(22,954	)	$	(24,550	)	$	(9,492	)
Foreign income		347,801			344,529			305,923
	$	324,847		$	319,979		$	296,431

The provision (benefit) for domestic and foreign taxes on income consists of the following (in thousands):

	Fiscal 2011			Fiscal 2010			Fiscal 2009
Current - domestic	$	29		$	(34	)	$	160
Deferred - domestic		(980	)		6,813			(4,335	)
Current - foreign		54,209			58,218			50,052
Deferred - foreign		(85	)		(2,014	)		(191	)
	$	53,173		$	62,983		$	45,686

Deferred Taxes

The components of the deferred income tax assets (liabilities) as of September 30, 2011 and 2010 are as follows (in thousands):

	September 30,
	2011			2010
Deferred tax assets -
Net operating loss carryforwards	$	16,014		$	10,089
Tax credit carryforwards		1,618			730
Stock option compensation expense		7,105			6,298
Book accruals		3,273			3,157
		28,010			20,274
Deferred tax liabilities -
Difference in book and tax basis of equipment		(12,222	)		(13,935	)
		(12,222	)		(13,935	)
Net deferred tax assets (liabilities) before valuation allowance		15,788			6,339
Valuation allowance		(25,568	)		(17,184	)
	$	(9,780	)	$	(10,845	)
Net current deferred tax assets	$	—		$	—
Net noncurrent deferred tax liabilities		(9,780	)		(10,845	)
	$	(9,780	)	$	(10,845	)

For fiscal year 2011, we recorded a valuation allowance of $8.4 million on net deferred tax assets primarily related to our United States net operating loss carry forward. The gross amount of federal net operating loss carry forwards as of September 30, 2011 is estimated to be $83.2 million, which will begin to expire in 2025. Management does not expect that our tax credit carry forward of $1.6 million will be utilized to offset future tax obligations before the credits begin to expire in 2012. Thus, a corresponding valuation allowance of $1.6 million is recorded as of September 30, 2011.

We have approximately $12.9 million of windfall tax benefits from previous stock option exercises that have not been recognized as of September, 30, 2011. Pursuant to ASC 718, this amount will not be recognized until the deduction would reduce our United States income taxes payable. At such time, the amount will be recorded as an increase to paid-in-capital. We apply the "with-and-without" approach when utilizing certain tax attributes whereby windfall tax benefits are used last to offset taxable income.

We do not record federal income taxes on the undistributed earnings of our foreign subsidiaries that we consider to be permanently reinvested in foreign operations. The cumulative amount of such undistributed earnings was approximately $1.3 billion at September 30, 2011. It is not practicable to estimate the amount of any deferred tax liability associated with the undistributed earnings.

We record estimated accrued interest and penalties related to uncertain tax positions in income tax expense. At September 30, 2011, we had approximately $16.8 million of reserves for uncertain tax positions, including estimated accrued interest and penalties of $4.9 million, which are included in Other Long Term Liabilities in the Consolidated Balance Sheet. All $16.8 million of the net uncertain tax liabilities would affect the effective tax rate if recognized. A summary of activity related to the net uncertain tax positions including penalties and interest for fiscal year 2011 is as follows:

	Liability for Uncertain Tax Positions
Balance at October 1, 2010	$	9,968
Increases based on tax positions related to prior fiscal years		5,959
Increases based on tax positions related to current fiscal year		877
Balance at September 30, 2011	$	16,804

Our United States tax returns for fiscal year 2008 and subsequent years remain subject to examination by tax authorities. As we conduct business globally, we have various tax years remaining open to examination in our international tax jurisdictions, including tax returns in Australia for fiscal years 2006 through 2011, as well as returns in Equatorial Guinea for calendar years 2006 through 2010. Although we cannot predict the outcome of ongoing or future tax examinations, we do not anticipate that the ultimate resolution of these examinations will have a material impact on our consolidated financial position, results of operations or cash flows.

As a result of working in foreign jurisdictions, we earned a high level of operating income in certain nontaxable and deemed profit tax jurisdictions, which significantly reduced our effective tax rate for fiscal years 2011, 2010 and 2009 when compared to the United States statutory rate. There were no significant transactions that materially impacted our effective tax for fiscal years 2011, 2010 or 2009. The differences between the United States statutory and our effective income tax rate are as follows:

	Fiscal 2011			Fiscal 2010			Fiscal 2009
Statutory income tax rate		35	%		35	%		35	%
Resolution of prior period tax items					1			(1	)
Increase in tax rate resulting from -
Valuation allowance					2
Increases to the reserve for uncertain tax positions		2			1			1
Decrease in tax rate resulting from -
Foreign tax rate differentials, net of foreign tax credit utilization		(23	)		(19	)		(20	)
Effective income tax rate		16	%		20	%		15	%

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Retirement Plans

12 Months Ended

Sep. 30, 2011

Retirement Plans

Retirement Plans

NOTE 9—RETIREMENT PLANS

We have two qualified defined contribution retirement plans (the "Retirement Plans") under which qualified participants may make contributions, which together with our contributions, can be up to 100% of their compensation, as defined, to a maximum of $49,000. In the first month following the date of hire, an employee can elect to become a participant in a Retirement Plan. Under the Plans, participant contributions of 1% to 5% matched on a 2 to 1 basis. Our contributions vest 100% to each participant after three years of service with us including any period of ineligibility mandated by the Plans. If a participant terminates employment before becoming fully vested, the unvested portion is credited to our account and can be used only to offset our future contribution requirements.

During fiscal years 2011 and 2010, forfeitures of $0.3 million and $0.3 million, respectively, were used to reduce our cash contribution requirements while no forfeitures were used in fiscal year 2009. In fiscal years 2011, 2010 and 2009, our actual cash contributions totaled approximately $4.3 million, $5.2 million and $4.9 million, respectively. As of September 30, 2011, there were approximately $0.2 million of contribution forfeitures, which can be used to reduce our future cash contribution requirements.

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Commitments And Contingencies (Schedule Of Future Minimum Lease Payments For Operating Leases) (Details) (USD $) In Thousands	Sep. 30, 2011
Commitments And Contingencies
2012	$ 1,484
2013	1,280
2014	1,258
2015	290
2016	$ 0

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Operations By Geographic Areas (Schedule Of Operations By Geographic Areas) (Details) (USD $) In Thousands	3 Months Ended																12 Months Ended
	Sep. 30, 2011		Jun. 30, 2011		Mar. 31, 2011		Dec. 31, 2010		Sep. 30, 2010		Jun. 30, 2010		Mar. 31, 2010		Dec. 31, 2009		Sep. 30, 2011	Sep. 30, 2010	Sep. 30, 2009
Revenues	$ 177,558	[1]	$ 162,147	[1]	$ 159,085	[1]	$ 146,286	[1]	$ 160,613	[1]	$ 166,637	[1]	$ 159,069	[1]	$ 164,243	[1]	$ 645,076	$ 650,562	$ 586,507
OPERATING INCOME (EXPENSE):																	328,660	322,340	298,442
Corporate general and administrative expenses																	(44,407)	(40,620)	(31,639)
TOTAL ASSETS:	2,375,391								1,724,440								2,375,391	1,724,440	1,509,402
North & South America [Member]
Revenues																	45,242	10,065	19,055
OPERATING INCOME (EXPENSE):																	(30,392)	(12,204)	48,535
TOTAL ASSETS:	292,808								90,496								292,808	90,496	61,982
Southeast Asia And India [Member]
Revenues																	187,717	188,180	162,888
OPERATING INCOME (EXPENSE):																	129,799	132,192	42,025
TOTAL ASSETS:	904,581								974,050								904,581	974,050	750,141
Mediterranean And Black Sea [Member]
Revenues																	28,486	46,622	169,828
OPERATING INCOME (EXPENSE):																	15,385	15,931	141,133
TOTAL ASSETS:	12,114								239,017								12,114	239,017	225,332
Africa [Member]
Revenues																	183,946	271,583	89,601
OPERATING INCOME (EXPENSE):																	116,581	154,298	14,301
TOTAL ASSETS:	303,595								230,677								303,595	230,677	238,700
Australia [Member]
Revenues																	199,685	134,112	145,135
OPERATING INCOME (EXPENSE):																	96,724	72,743	84,087
TOTAL ASSETS:	813,554								154,055								813,554	154,055	192,330
Corporate General And Administrative Expenses [Member]
Corporate general and administrative expenses																	563	(40,620)	(31,639)
Other [Member]
TOTAL ASSETS:	$ 48,739								$ 36,145								$ 48,739	$ 36,145	$ 40,917

[1] The sum of the individual quarterly net income per common share amounts may not agree with year-to-date net income per common share as each quarterly computation is based on the weighted average number of common shares outstanding during that period.

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Commitments And Contingencies (Narrative) (Details) (USD $)	12 Months Ended
	Sep. 30, 2011	Sep. 30, 2010	Sep. 30, 2009
Commitments And Contingencies
Rent expense under operating leases	$ 4,400,000	$ 4,800,000	$ 4,100,000
Service taxes paid	10,100,000
Accrued additional service tax	1,800,000
Total service taxes	11,900,000
Long-term other receivable	$ 11,875,000	$ 15,799,000

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Supplemental Cash Flow Information (Tables)

12 Months Ended

Sep. 30, 2011

Supplemental Cash Flow Information

Summary Of Supplemental Cash Flow Information

	Years Ended September 30,
	2011		2010		2009
Cash paid during the period for:
Domestic and foreign income taxes	$	55,062	$	65,024	$	40,713
Interest, net of amounts capitalized	$	3,703	$	1,656	$	2,144
Non-cash activities:
Increase in insurance receivable related to reduction in value of spare capital equipment and inventory	$	—	$	—	$	2,518
Increase in accounts payable and accrued liabilities related to capital expenditures	$	77,164	$	10,616	$	7,579

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Interest Rate Swaps (Narrative) (Details) (USD $) In Millions, unless otherwise specified	12 Months Ended
	Sep. 30, 2011
Number of interest rate swap agreements	4
Notional interest rate swap agreements	$ 50.0
Unrealized loss recognized in OCI	$ 1.6
3.4% Interest Rate Swaps Due 2014 [Member]
Interest rate fixed as result of interest rate swap hedges	3.40%
3.6% Interest Rate Swaps Due 2014 [Member]
Interest rate fixed as result of interest rate swap hedges	3.60%

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Recently Issued Accounting Pronouncements

12 Months Ended

Sep. 30, 2011

Recently Issued Accounting Pronouncements

Recently Issued Accounting Pronouncements

NOTE 14—RECENTLY ISSUED ACCOUNTING PRONOUNCEMENTS

In June 2011, the Financial Accounting Standards Board ("FASB"), issued Accounting Standards Update ("ASU") 2011-05, "Comprehensive Income (Topic 220): Presentation of Comprehensive Income," which amends the presentation requirements for comprehensive income and requires that all non-owner changes in stockholders' equity be presented either as a single continuous statement of comprehensive income or in two separate but consecutive statements. Additionally, the update requires presentation of reclassification adjustments on the face of the financial statement. The update is effective for interim and annual periods beginning after December 15, 2011, with early adoption permitted. We adopted the amendments in this update on June 30 with no material impact on our consolidated financial statements or disclosures in our financial statements.

In May 2011, the FASB issued ASU 2011-04, "Fair Value Measurement (Topic 820): Amendments to Achieve Common Fair Value Measurement and Disclosure Requirements in U.S. GAAP and IFRS". The amendment clarifies existing fair value measurement and disclosure requirements, amends certain fair value measurement principles and requires additional disclosures about fair value measurements. ASU 2011-04 is effective for interim and annual periods beginning after December 15, 2011. We will adopt the accounting standards effective January 1, 2012. We do not expect that our adoption will have a material effect on our financial statements or disclosures in our financial statements.

In April 2010, the FASB issued ASU 2010-13, "Compensation—Stock Compensation" (Topic 718). The amendment provides updated guidance on the classification of a share-based payment award as either equity or a liability. The objective of this update is to address the classification of an employee share-based payment award with an exercise price denominated in the currency of a market in which the underlying equity security trades. A share-based payment award that contains a condition that is not a market, performance, or service condition is required to be classified as a liability. We adopted the amendments in this update on October 1, 2010, with no material impact on our financial statements or disclosures in our financial statements.

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Share-Based Compensation (Tables)

12 Months Ended

Sep. 30, 2011

Share-Based Compensation

Schedule Of Share And Stock Option Data

	2007 Plan		2001 Plan		1996 Plan
Shares available for future awards or grants		1,895,274		—		—
Outstanding stock option grants		860,744		594,725		24,000
Outstanding unvested restricted stock awards		559,712		—		—

Schedule Of Unrecognized Compensation Cost

	September 30,
	2011		2010
Unrecognized Compensation Cost
Stock options	$	4,964	$	4,471
Restricted stock awards		6,575		8,714
Total	$	11,539	$	13,185
Remaining weighted average service period (Years)		2.3		2.2

Fair Value Assumptions

	Fiscal 2011			Fiscal 2010			Fiscal 2009
Risk-Free Interest Rate		1.9	%		2.1	%		1.5	%
Expected Volatility		44	%		43	%		42	%
Expected Life (Years)		5.2			5.3			5.2
Dividend Yield		None			None			None

Stock Option Activity

	Number of Options (000s)			Weighted Average Exercise Price		Weighted Average Remaining Contractual Life (Years)		Aggregate Intrinsic Value  (000s)
Outstanding at October 1, 2010		1,720		$	21.58
Granted		291		$	37.41
Exercised		(391	)	$	15.04			$	10,933
Forfeited		(140	)	$	31.90
Outstanding at September 30, 2011		1,480		$	25.44		6.1	$	13,198
Exercisable at September 30, 2011		971		$	21.01		4.8	$	12,971

Summary Of Restricted Stock Activity

	Number of Shares (000s)			Weighted Average Fair Value
Unvested at October 1, 2010		623		$	34.27
Granted		172		$	37.73
Vested		(102	)	$	39.53
Forfeited		(133	)	$	33.56
Unvested at September 30, 2011		560		$	34.54

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Long-Term Debt (Narrative) (Details) (USD $) In Millions, unless otherwise specified	12 Months Ended					9 Months Ended	12 Months Ended			12 Months Ended
	Sep. 30, 2011	Sep. 30, 2011 3.6% Interest Rate Swaps Due 2014 [Member]	Sep. 30, 2011 3.4% Interest Rate Swaps Due 2014 [Member]	Oct. 31, 2007 2007 Credit Facility [Member]	Nov. 30, 2008 2008 Credit Facility [Member]	Jun. 30, 2011 2011 Credit Facility [Member]	Sep. 30, 2011 2011 Credit Facility [Member]	Sep. 30, 2011 2011 Credit Facility [Member] Maximum [Member]	Sep. 30, 2011 2011 Credit Facility [Member] Minimum [Member]	Sep. 30, 2011 Leverage Ratio [Member]	Sep. 30, 2011 Debt To Capitalization Ratio [Member]	Sep. 30, 2011 Interest Expense Coverage Ratio [Member]
Credit facility capacity				$ 300	$ 280			$ 1,100	$ 750
Incremental commitment							350
Funds available under credit facility							227
2011 Credit Agreement, description	Borrowings under the 2011 Credit Agreement bear interest of the Eurodollar rate plus a margin of 2.50%.
2011 Credit Agreement, commitment fee (per annum)							1.00%
Standby letters of credit							3.4
Various financial covenants										ratio of 4.0 to 1.0	ratio of 0.5 to 1.0	ratio of 3.0 to 1.0
Minimum collateral percentage	150.00%
Number of interest rate swap agreements	4
Notional interest rate swap agreements	50.0
Interest rate fixed as result of interest rate swap hedges		3.60%	3.40%
Additional funds borrowed						$ 0

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Share-Based Compensation (Narrative) (Details) (USD $) In Millions, except Share data, unless otherwise specified	12 Months Ended
	Sep. 30, 2011	Sep. 30, 2010	Sep. 30, 2009
Common stock awards	4,000,000
Outstanding options maximum term (in years)	10
Vesting and restriction period minimum (in months)	13
Total fair value of the shares vested	$ 2.7	$ 3.0	$ 2.7
Weighted average fair value of stock options	$ 15.72	$ 14.69	$ 5.75
Restricted Stock [Member]
Vesting period minimum (in years)	three
Vesting period maximum (in years)	four
2007 Plan [Member]
Common stock awards	1,895,274
Vesting period minimum (in years)	1
Vesting period maximum (in years)	4
2001 Plan [Member]
Vesting period minimum (in years)	1
Vesting period maximum (in years)	4
1996 Plan [Member]
Vesting period minimum (in years)	2
Vesting period maximum (in years)	5

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Consolidated Statements Of Cash Flows (USD $) In Thousands	12 Months Ended
	Sep. 30, 2011	Sep. 30, 2010	Sep. 30, 2009
Cash flows from operating activities:
Net income	$ 271,674	$ 256,996	$ 250,745
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation	43,597	37,030	35,119
Amortization of debt issuance costs	2,363	803	717
Amortization of deferred items	3,333	13,755	(15,902)
Provision for doubtful accounts		(65)	1,002
Provision for inventory obsolescence	735	1,123	680
Deferred income tax (benefit) expense	(1,065)	4,798	(4,527)
Share-based compensation expense	6,314	9,998	7,664
Other, net	4,847	(1,855)	(402)
Change in assets and liabilities:
(Increase) decrease in accounts receivable	13,214	26,187	(4,819)
Decrease in insurance receivable		281
(Increase) decrease in income tax receivable	10,421	(7,746)	(5,014)
Increase in inventory	(6,249)	(3,736)	(12,910)
(Increase) decrease in prepaid expenses	845	(179)	(1,892)
Increase in deferred costs and other assets	(10,379)	(10,321)	(9,825)
Increase (decrease) in accounts payable	(1,173)	4,735	(11)
Increase (decrease) in accrued liabilities	4,440	(854)	(43)
Increase (decrease) in income tax payable	(17,906)	(2,700)	13,058
Increase (decrease) in deferred credits and other liabilities	14,777	(21,850)	51,262
Net increase in Operating Capital	68,114	49,404	54,157
Net Cash Provided by Operating Activities	339,788	306,400	304,902
Cash flows from investing activities:
Capital expenditures	(514,858)	(187,094)	(430,470)
Collection of insurance receivable		3,607	1,822
Proceeds from sale of assets	218	1,504	330
Net Cash Used by Investing Activities	(514,640)	(181,983)	(428,318)
Cash flows from financing activities:
Principal payments on bank credit facilities	(55,000)	(45,000)	(50,000)
Proceeds from bank credit facilities	345,000		155,000
Principal payments on notes payable	(3,631)
Proceeds from notes payable	9,092
Debt issuance costs paid	(12,322)		(2,611)
Proceeds from exercise of stock options	6,192	847	194
Net Cash Provided (Used) by Financing Activities	289,331	(44,153)	102,583
Net increase (decrease) in cash and cash equivalents	114,479	80,264	(20,833)
Cash and cash equivalents, at beginning of period	180,523	100,259	121,092
Cash and cash equivalents, at end of period	$ 295,002	$ 180,523	$ 100,259

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Share-Based Compensation

12 Months Ended

Sep. 30, 2011

Share-Based Compensation

Share-Based Compensation

NOTE 3—HARE-BASED COMPENSATION

We account for share-based compensation in accordance with ASC 718. Under ASC 718, share-based compensation cost is measured at the grant date, based on the calculated fair value of the award, and is recognized as an expense over the requisite service period, which is generally the vesting period of the equity award.

On December 7, 2006, our board of directors adopted, and our stockholders subsequently approved on February 8, 2007, the Atwood Oceanics, Inc. 2007 Long-Term Incentive Plan (as amended, the "2007 Plan"). The effective date of the 2007 Plan was December 7, 2006, and awards may be made under the 2007 Plan through December 7, 2016. Under our 2007 Plan, up to 4,000,000 shares of common stock may be issued to eligible participants in the form of restricted stock awards or upon exercise of stock options granted pursuant to the 2007 Plan. We also maintain two other stock incentive plans approved by our shareholders, the Atwood Oceanics, Inc. Amended and Restated 2001 Stock Incentive Plan (as amended, the "2001 Plan") and the Atwood Oceanics, Inc. 1996 Incentive Equity Plan (as amended, the "1996 Plan"), under which we have outstanding stock options and restricted stock awards. However, no additional options or restricted stock have been awarded under the 2001 or 1996 plans since the implementation of the 2007 Plan. All stock incentive plans currently in effect have been approved by our shareholders.

A summary of shares available for issuance and outstanding stock option and restricted stock awards for our three stock incentive plans as of September 30, 2011 is as follows:

	2007 Plan		2001 Plan		1996 Plan
Shares available for future awards or grants		1,895,274		—		—
Outstanding stock option grants		860,744		594,725		24,000
Outstanding unvested restricted stock awards		559,712		—		—

Awards of restricted stock and stock options have both been granted under our stock incentive plans as of September 30, 2011. We deliver newly issued shares of common stock for restricted stock awards upon vesting and upon exercise of stock options.

We recognize compensation expense on grants of share-based compensation awards on a straight-line basis over the required service period for each award. Unrecognized compensation cost, net of estimated forfeitures, related to awards of stock options and restricted stock and the related remaining weighted-average service period is as follows (in thousands, except average service periods):

	September 30,
	2011		2010
Unrecognized Compensation Cost
Stock options	$	4,964	$	4,471
Restricted stock awards		6,575		8,714
Total	$	11,539	$	13,185
Remaining weighted average service period (Years)		2.3		2.2

Stock Options

Under our stock incentive plans, the exercise price of each stock option must be equal to or greater than the fair market value of one share of our common stock on the date of grant, with all outstanding options having a maximum term of 10 years. Options vest ratably over a period ranging from the end of the first to the fourth year from the date of grant for stock options under the 2007 and 2001 Plans and from the end of the second to the fifth year from the grant date under for stock options under the 1996 Plan. Each option is for the purchase of one share of our common stock.

The total fair value of stock options vested during fiscal years 2011, 2010 and 2009 was $2.7 million, $3.0 million and $2.7 million, respectively. The per share weighted-average fair value of stock options granted during fiscal years 2011, 2010 and 2009 was $15.72, $14.69 and $5.75, respectively. We estimate the fair value of each stock option on the date of grant using the Black-Scholes pricing model and the following assumptions:

	Fiscal 2011			Fiscal 2010			Fiscal 2009
Risk-Free Interest Rate		1.9	%		2.1	%		1.5	%
Expected Volatility		44	%		43	%		42	%
Expected Life (Years)		5.2			5.3			5.2
Dividend Yield		None			None			None

The average risk-free interest rate is based on the five-year U.S. treasury security rate in effect as of the grant date. We determined expected volatility using a six-year historical volatility figure and determined the expected term of the stock options using 10 years of historical data. The expected dividend yield is based on the expected annual dividend as a percentage of the market value of our common stock as of the grant date.

A summary of stock option activity for fiscal year 2011 is as follows:

	Number of Options (000s)			Weighted Average Exercise Price		Weighted Average Remaining Contractual Life (Years)		Aggregate Intrinsic Value  (000s)
Outstanding at October 1, 2010		1,720		$	21.58
Granted		291		$	37.41
Exercised		(391	)	$	15.04			$	10,933
Forfeited		(140	)	$	31.90
Outstanding at September 30, 2011		1,480		$	25.44		6.1	$	13,198
Exercisable at September 30, 2011		971		$	21.01		4.8	$	12,971

Restricted Stock

We have awarded restricted stock under the 2007 Plan to certain employees and to our non-employee directors. All current awards of restricted stock to employees are subject to a vesting and restriction period ranging from three to four years, subject to early termination as provided in the 2007 Plan. All awards of restricted stock to non-employee directors are subject to a vesting and restriction period of a minimum of 13 months, subject to early termination as provided in the 2007 Plan. We value restricted stock awards based on the fair market value of our common stock on the date of grant.

A summary of restricted stock activity for fiscal year 2011 is as follows:

	Number of Shares (000s)			Weighted Average Fair Value
Unvested at October 1, 2010		623		$	34.27
Granted		172		$	37.73
Vested		(102	)	$	39.53
Forfeited		(133	)	$	33.56
Unvested at September 30, 2011		560		$	34.54

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Income Taxes (Schedule Of Effective Income Tax Rate Reconciliation) (Details)	12 Months Ended
	Sep. 30, 2011	Sep. 30, 2010	Sep. 30, 2009
Income Taxes
Statutory income tax rate	35.00%	35.00%	35.00%
Resolution of prior period tax items		1.00%	(1.00%)
Increase in tax rate resulting from - Valuation allowance		2.00%
Increases to the reserve for uncertain tax positions	2.00%	1.00%	1.00%
Decrease in tax rate resulting from - Foreign tax rate differentials, net of foreign tax credit utilization	(23.00%)	(19.00%)	(20.00%)
Effective income tax rate	16.00%	20.00%	15.00%

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Property And Equipment (Tables)

12 Months Ended

Sep. 30, 2011

Property And Equipment

A summary of property and equipment by classification

	September 30,
	2011			2010
Drilling vessels and related equipment
Cost	$	2,315,419		$	1,733,298
Accumulated depreciation		(435,577	)		(392,808	)
Net book value		1,879,842			1,340,490
Drill pipe
Cost		18,182			15,468
Accumulated depreciation		(13,885	)		(13,563	)
Net book value		4,297			1,905
Furniture and other
Cost		8,800			7,115
Accumulated depreciation		(5,618	)		(5,549	)
Net book value		3,182			1,566
Property and equipment, net	$	1,887,321		$	1,343,961

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Summary Of Significant Accounting Policies (Narrative) (Details) (USD $) In Millions	12 Months Ended
	Sep. 30, 2011	Sep. 30, 2010	Sep. 30, 2009
Summary Of Significant Accounting Policies
Foreign exchange losses	$ 0.9	$ 0.1	$ 0.5
Unbilled receivable	1.1	1.0
Allowance for doubtful accounts		0
Inventory, net of reserves for excess and obsolete inventory	2.5	2.0
Interest capitalized	8.2	3.9	8.8
Impairment charge	5.0
Deferred drydocking	2.2	1.5
Deferred fees	9.6	7.5
Deferred costs	$ 2.8	$ 1.7

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Supplemental Cash Flow Information

12 Months Ended

Sep. 30, 2011

Supplemental Cash Flow Information

Supplemental Cash Flow Information

NOTE 13—SUPPLEMENTAL CASH FLOW INFORMATION

	Years Ended September 30,
	2011		2010		2009
Cash paid during the period for:
Domestic and foreign income taxes	$	55,062	$	65,024	$	40,713
Interest, net of amounts capitalized	$	3,703	$	1,656	$	2,144
Non-cash activities:
Increase in insurance receivable related to reduction in value of spare capital equipment and inventory	$	—	$	—	$	2,518
Increase in accounts payable and accrued liabilities related to capital expenditures	$	77,164	$	10,616	$	7,579