ATWOOD OCEANICS ANNOUNCES CHANGES TO ULTRA-DEEPWATER DRILLSHIP DELIVERY AND MILESTONE PAYMENT SCHEDULES
December 06 2016 - 9:01AM
FOR IMMEDIATE RELEASE
HOUSTON, December 6, 2016-- Atwood Oceanics, Inc.
(NYSE: ATW) announced today that it has agreed with Daewoo
Shipbuilding & Marine Engineering Co. ("DSME") to delay the
requirement to take delivery of Atwood's two newbuild
ultra-deepwater drillships, the Atwood Admiral
and the Atwood Archer, by two years to
September 30, 2019 and June 30, 2020, respectively.
In connection with the delay,
Atwood will make a payment of $125 million for the Atwood Archer on or before December 15, 2016, as well
as a payment of $15 million on the earlier of June 30, 2018 or the
delivery date. In respect of the Atwood
Admiral, Atwood will make a payment of $10 million on the
earlier of September 30, 2017 or the delivery date. DSME will
extend all remaining milestone payments, which include $83.9
million plus fees and interest for the Atwood
Admiral and $165.0 million plus fees and interest for the
Atwood Archer, until December 30, 2022.
The Company's obligation to pay the remaining milestone payments
will be evidenced by a promissory note executed by Alpha Admiral
Company or Alpha Archer Company, each a subsidiary of the Company,
on the date their respective drillship is delivered, with the note
accruing interest at a rate of 5% per annum and being secured by a
first preferred ship mortgage on the corresponding drillship.
The Company has agreed not to terminate the construction
contracts except in accordance with the terms of the supplemental
agreements. The Company retains the option to take earlier
delivery of each drillship, subject to a 45-day notice period to
DSME, without affecting the final milestone payment date.
Rob Saltiel, President and Chief Executive
Officer, commented, "The restructuring of payment and delivery
schedules for the Atwood Admiral and Atwood Archer is an important step in our capital
structure management, enhancing liquidity and improving capital
commitment timing. The two-year extensions on the delivery
dates greatly improve our confidence that we will secure suitable
drilling services contracts on both rigs prior to taking delivery.
We now have the opportunity to earn revenues on these rigs that
will cover some or all of the final payments to the shipyard.
"We appreciate the flexibility that DSME has
provided to Atwood Oceanics in response to this severe industry
downturn."
Mark Smith, Senior Vice President and Chief
Financial Officer, added, "Our liquidity position is enhanced by
approximately $250 million from June 30, 2018 until final payments
are made to DSME on December 30, 2022. This lengthened time
for making final milestone payments represents a staggering of our
debt maturities. Following the December 15, 2016 payment, all
interest expenses on the outstanding amounts due to DSME will be
accrued and paid at the time of the final milestone payment,
improving our free cash flows through 2022."
Atwood Oceanics, Inc. is a leading offshore
drilling contractor engaged in the drilling and completion of
exploratory and developmental 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.
Contact: Mark W. Smith
Senior Vice President and CFO
(281) 749-7840
Forward-Looking
Statements
Statements contained in this
press release with respect to the future, including information
regarding the expected delivery dates, are forward-looking
statements. These statements reflect management's reasonable
judgment with respect to future events. Forward-looking statements
are subject to numerous risks, uncertainties and assumptions and
actual results could differ materially from those anticipated as a
result of various factors including: uncertainties related to the
level of activity in offshore oil and gas exploration and
development; oil and gas prices; competition and market conditions
in the contract drilling industry; our ability to enter into and
the terms of future contracts; possible cancelation or suspension
of drilling contracts; the availability of qualified personnel;
labor relations; operating hazards and risks; terrorism and
political and other uncertainties inherent in foreign operations
(including risk of war, civil disturbances, seizure or damage to
equipment and exchange and currency fluctuations); the impact of
governmental and industry laws and regulations; and environmental
matters. These factors and others are described and discussed in
our most recently filed annual report on Form 10-K, in our Forms
10-Q for subsequent periods and in our other filings with the
Securities and Exchange Commission which are available on the SEC's
website at www.sec.gov. Each forward-looking statement speaks only
as of the date of the particular statement and we undertake no duty
to update the content of this press release or any forward-looking
statement contained herein to conform the statement to actual
results or to reflect changes in our expectations.
This
announcement is distributed by Nasdaq Corporate Solutions on behalf
of Nasdaq Corporate Solutions clients.
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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