July 27, 2004

Atwood jackup rig sustains damage

Houston-based international offshore drilling contractor Atwood Oceanics (NYSE: ATW) ) says that on July 25, 2004 its KFELS Mod V enhanced B-class jackup rig the ATWOOD BEACON, while positioning for its next well offshore Indonesia, incurred unexpected rapid leg penetration on two of its legs.

All personnel have been evacuated from the rig with no injuries and there were no environmental consequences.

The rig is currently stable and, following inspection on-site, the rig will be removed from the location and is expected to be towed to a shipyard in Singapore for inspections and repairs. While some damage to the derrick and legs has occurred, the extent of damage to the rig is not known at this time.

The company has insurance to cover the cost of repairs to the rig in excess of a $1 million deductible and has Loss of Hire Insurance coverage of $70,000 per day for 180 days, which commences after a 30-day waiting period.

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