Atwood exercises option with DSME for third drillship

SEPTEMBER 27, 2012 — Atwood Oceanics, Inc. (NYSE: ATW) said today that a subsidiary has entered into a turnkey construction contract with Daewoo Shipbuilding and Marine Engineering Co., Ltd. (DSME) to construct a third ultra-deepwater drillship, to be named the Atwood Admiral, at the DSME shipyard in South Korea.

The Atwood Admiral is expected to be delivered by March 31, 2015 at a total cost, including two blowout preventers (BOPs), project management, drilling and handling tools and spares, of approximately $635 million.

The order comes hard on the heels of the news that Atwood had booked a three year contract for the second of its DSME drillship newbuilds (see earlier story) and marks the execution of  an option with the shipbuilder that was set to expire on September 30, 2012.

In connection with the exercise, the company has also secured an option with the shipbuilder to construct a fourth ultra-deepwater drillship at a similar cost to the Atwood Admiral and with an expected delivery in December 2015, which requires commitment by June 30, 2013. At this time, says the company, it has made no determination as to whether the option will be exercised

The company says it recently increased the accordion under its senior secured credit facility by $200 million to a total of $550 million, which, together with available cash and cash flows from operations, is expected to fully fund the construction of the Atwood Admiral. Upon delivery, the Atwood Admiral will become the sixteenth mobile offshore drilling unit owned by the company.

The design of the Atwood Admiral will be identical to the previously ordered Atwood Advantage and Atwood Achiever – all three are DP-3 dynamically-positioned, dual derrick ultra-deepwater drillships rated to operate in water depths up to 12,000 feet and drill to a depth of up to 40,000 feet.
The Atwood Admiral will also offer two seven-ram BOPs, three 100-ton knuckle boom cranes, a 165-ton active heave “tree-running” knuckle boom crane, and accommodations for up to 200 persons.

Rob Saltiel, the company’s President and CEO, commented, “We are pleased to continue our growth strategy through the exercising of our option with DSME shipyard, and we look forward to the Atwood Admiral joining our high-specification, ultra-deepwater drilling fleet. This rig’s state-of-the-art capabilities, and the synergies that result from adding a third drillship based on the same design, make this a solid platform for extending Atwood’s market position in ultra-deepwater drilling.”