FOR IMMEDIATE RELEASE - EARNINGS

HOUSTON, May 5, 2016 -- Atwood Oceanics, Inc. (NYSE: ATW) ("Company"), announced today that it had earned net income of $122.4 million or $1.89 per diluted share, on revenues of $296.4 million for the quarter ended March 31, 2016 compared to net income of $39.1 million or $0.60 per diluted share on revenues of $307.8 million for the quarter ended December 31, 2015 and compared to net income of $122.7 million or $1.89 per diluted share, on revenues of $350.4 million for the quarter ended March 31, 2015. For the six months ended March 31, 2016, the Company earned net income of $161.5 million or $2.49 per diluted share, on revenues of $604.2 million compared to net income of $168.9 million or $2.60 per diluted share, on revenues of $702.1 million for the six months ended March 31, 2015.

During the three months ended March 31, 2016, we repurchased, through open market transactions, $13.5 million aggregate principal of our Senior Notes at an aggregate cost of $5.1 million, including a minimal amount of accrued interest, representing an average discount of 62.2%. As a result of the repurchases, we recognized a gain on debt retirement, net of the related debt issuance costs, of $8.4 million (or $0.13 per diluted share) in Gains on extinguishment of debt on the Condensed Consolidated Statement of Operations for the three and six months ended March 31, 2016. In April 2016, we completed additional repurchases of $140.7 million aggregate principal amount of our Senior Notes for $94.0 million, including $2.3 million of accrued interest, representing an average discount of 34.8%.

These repurchases, both in the period ended March 31, 2016 and in April 2016, allowed us to reduce our outstanding indebtedness and related interest expense at a significant discount to the face value of our Senior Notes. The gain associated with the repurchases is subject to tax and will increase our effective tax rate. However, due to the availability of operating loss carry-forwards the actual cash tax impact will be minimal. The repurchases were made using available cash balances. Following these repurchases, the Company has $495.8 million Senior Notes outstanding.

On April 13, 2016, the Atwood Falcon sale and recycling transaction closed and title of the vessel and associated equipment and machinery transferred to the buyer. The estimated loss on sale of the Atwood Falcon of $0.7 million is recognized in the three and six months ended March 31, 2016.

  For the Three Months Ended
  (Unaudited)
(In thousands, except per share amounts) March 31,
 2016		   December 31,
 2015		   March 31,
 2015
Revenues $ 296,351     $ 307,819     $ 350,387  
Income before Income Taxes 136,426     50,295     134,976  
Provision for Income Taxes (13,989 )   (11,214 )   (12,307 )
Net Income $ 122,437     $ 39,081     $ 122,669  
           
Earnings per Common Share -          
Basic $ 1.89     $ 0.60     $ 1.90  
Diluted $ 1.89     $ 0.60     $ 1.89  

      For the Six Months Ended
      (Unaudited)
(In thousands, except per share amounts)     March 31,
 2016		   March 31,
 2015
Revenues     $ 604,170     $ 702,113  
Income before Income Taxes     186,721     190,316  
Provision for Income Taxes     (25,203 )   (21,429 )
Net Income     $ 161,518     $ 168,887  
           
Earnings per Common Share -          
Basic     $ 2.49     $ 2.62  
Diluted     $ 2.49     $ 2.60  

ATWOOD OCEANICS, INC. AND SUBSIDIARIES
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

  Three Months Ended March 31,   Six Months Ended March 31,
(In thousands, except per share amounts) 2016   2015   2016   2015
REVENUES:              
Contract drilling $ 282,546     $ 338,621     $ 577,161     $ 675,382  
Revenues related to reimbursable expenses 13,805     11,766     27,009     26,731  
Total revenues 296,351     350,387     604,170     702,113  
               
COSTS AND EXPENSES:              
Contract drilling 89,918     131,124     220,570     267,589  
Reimbursable expenses 9,123     8,661     17,409     20,568  
Depreciation 41,053     42,528     83,880     87,103  
General and administrative 11,488     14,737     26,665     32,146  
Asset impairment 708     -     65,432     60,777  
Loss on sale of assets 77     5,529     77     15,335  
Other, net (1,137 )   -     (1,060 )   -  
  151,230     202,579     412,973     483,518  
               
OPERATING INCOME 145,121     147,808     191,197     218,595  
               
OTHER INCOME (EXPENSE):              
Interest expense, net of capitalized interest (17,098 )   (12,847 )   (30,859 )   (28,351 )
Interest income 6     15     10     72  
Gains on extinguishment of debt

 		 8,397     -     8,397     -  
Other income -     -     17,976     -  
  (8,695 )   (12,832 )   (4,476 )   (28,279 )
               
INCOME BEFORE INCOME TAXES 136,426     134,976     186,721     190,316  
PROVISION FOR INCOME TAXES 13,989     12,307     25,203     21,429  
NET INCOME $ 122,437     $ 122,669     $ 161,518     $ 168,887  
               
EARNINGS PER COMMON SHARE (NOTE 2):              
Basic $ 1.89     $ 1.90     $ 2.49     $ 2.62  
Diluted $ 1.89     $ 1.89     $ 2.49     $ 2.60  
WEIGHTED AVERAGE COMMON SHARES OUTSTANDING (NOTE 2):              
Basic 64,781     64,620     64,739     64,513  
Diluted 64,825     65,048     64,870     65,031  

ATWOOD OCEANICS, INC. AND SUBSIDIARIES
UNAUDITED ANALYSIS OF REVENUES AND DRILLING COSTS

  REVENUES
  Three Months Ended   Six Months Ended
(In millions) March 31,
 2016		   December 31,
 2015		   March 31,
 2015		   March 31,
 2016		   March 31,
 2015
Ultra-Deepwater $ 189     $ 182     $ 183     $ 371     $ 350  
Deepwater 59     72     82     131     181  
Jackups 34     41     73     75     145  
Reimbursable 14     13     12     27     26  
  $ 296     $ 308     $ 350     $ 604     $ 702  

  DRILLING COSTS
  Three Months Ended   Six Months Ended
(In millions) March 31,
 2016		   December 31,
 2015		   March 31,
 2015		   March 31,
 2016		   March 31,
 2015
Ultra-Deepwater $ 54     $ 61     $ 68     $ 115     $ 131  
Deepwater 19     43     32     62     73  
Jackups 19     26     30     45     61  
Reimbursable 9     8     9     17     21  
Other (2 )   1     1     (1 )   2  
  $ 99     $ 139     $ 140     $ 238     $ 288  

ATWOOD OCEANICS, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS

(In thousands, except par value) March 31,
 2016		   September 30,
 2015
  (Unaudited)    
ASSETS      
Cash $ 226,812     $ 113,983  
Accounts receivable, net 240,740     311,514  
Income tax receivable 8,198     8,705  
Inventories of materials and supplies, net 110,029     137,998  
Prepaid expenses, deferred costs and other current assets 18,790     33,735  
Total current assets 604,569     605,935  
       
Property and equipment, net 4,209,558     4,172,132  
       
Other receivables 11,831     11,831  
Deferred income taxes 150     150  
Deferred costs and other assets 8,884     11,285  
Total assets $ 4,834,992     $ 4,801,333  
       
LIABILITIES AND SHAREHOLDERS' EQUITY      
Accounts payable $ 43,878     $ 70,161  
Accrued liabilities 19,294     23,572  
Dividends payable -     16,164  
Interest payable 8,222     7,704  
Income tax payable 20,440     13,906  
Deferred credits and other liabilities 3,834     3,941  
Total current liabilities 95,668     135,448  
       
Long-term debt 1,595,018     1,678,268  
Deferred income taxes 1,096     1,658  
Deferred credits 71     800  
Other 38,032     37,989  
Total long-term liabilities 1,634,217     1,718,715  
       
Commitments and contingencies (Note 8)      
       
Preferred stock, no par value, 1,000 shares authorized, none outstanding -     -  
Common stock, $1.00 par value, 180,000 shares authorized with 64,794 issued and outstanding as of March 31, 2016 and 180,000 shares authorized and 64,654 shares issued and outstanding as of September 30, 2015 64,794     64,654  
Paid-in capital 217,037     213,096  
Retained earnings 2,826,084     2,670,148  
Accumulated other comprehensive income (2,808 )   (728 )
Total shareholders' equity 3,105,107     2,947,170  
Total liabilities and shareholders' equity $ 4,834,992     $ 4,801,333  

ATWOOD OCEANICS, INC. AND SUBSIDIARIES
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

  Six Months Ended March 31,
(In thousands) 2016   2015
Cash flows from operating activities:      
Net income $ 161,518     $ 168,887  
Adjustments to reconcile net income to net cash provided by operating activities:      
Depreciation 83,880     87,103  
Amortization 1,596     3,761  
Provision for doubtful accounts 1,141     160  
Deferred income tax benefit (650 )   (3,512 )
Share-based compensation expense 5,009     8,119  
Asset impairment 65,432     60,777  
Loss on sale of assets 77     15,335  
(Gain) on extinguishment of debt (8,386 )   -  
Other, net (1,137 )   -  
Changes in assets and liabilities:      
Accounts receivable 62,963     15,829  
Income tax receivable 507     (3,604 )
Inventories of materials and supplies 16,187     (17,110 )
Prepaid expenses, deferred costs and other current assets 14,709     9,789  
Deferred costs and other assets (1,381 )   (357 )
Accounts payable (25,306 )   2,825  
Accrued liabilities (3,760 )   (3,691 )
Income tax payable 6,534     (310 )
Deferred credits and other liabilities 1,220     5,747  
Net cash provided by operating activities 380,153     349,748  
       
Cash flows from investing activities:      
Capital expenditures (176,175 )   (177,130 )
Proceeds from sale of assets 6,681     2,524  
Net cash used in investing activities (169,494 )   (174,606 )
       
Cash flows from financing activities:      
Proceeds from borrowing of long-term debt 45,000     -  
Principal repayments on long-term debt (120,156 )   (135,000 )
Repayments on short-term debt, net -     (11,885 )
Dividends paid (21,746 )   (16,163 )
Proceeds (payments) related to exercise of stock options (928 )   1,186  
Debt issuance costs paid -     (3,126 )
Net cash used by financing activities (97,830 )   (164,988 )
Net increase in cash and cash equivalents 112,829     10,154  
Cash and cash equivalents, at beginning of period 113,983     80,080  
Cash and cash equivalents, at end of period $ 226,812     $ 90,234  
       
Non-cash activities:      
Increase (decrease) in accounts payable and accrued liabilities related to capital expenditures $ 950     $ 3,020  

Atwood Oceanics, Inc. is a leading offshore drilling company engaged in the drilling and completion of exploration and development wells for the global oil and gas industry. The Company currently owns 10 mobile offshore drilling units and is constructing two ultra-deepwater drillships. The Company was founded in 1968 and is headquartered in Houston, Texas. Atwood Oceanics, Inc. common stock is traded on the New York Stock Exchange under the symbol "ATW." For more information about the Company, please visit www.atwd.com.

Conference Call

The Company has scheduled a conference call and webcast related to its second quarter 2016 results on Friday, May 6, 2016, at 8:00 A.M. CDT (9:00 A.M. EDT). Interested parties are invited to listen to the call by dialing 1-800-862-9098, or internationally 1-785-424-1051, Conference ID - Atwood, Password 34972. Interested parties may also listen over the Internet through a link posted in the Investor Relations section of the Company's Web site.

A replay of the conference call will be available on the Company's Web site following the end of the live call.

Contact: Mark W. Smith
Senior Vice President and Chief Financial Officer
(281) 749-7840




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The issuer of this announcement warrants that they are solely responsible for the content, accuracy and originality of the information contained therein.
Source: Atwood Oceanics, Inc. via Globenewswire
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