Atwood Oceanics (ATW)
Q4 2012 Earnings Call
November 16, 2012 10:00 am ET
Executives
Mark L. Mey - Chief Financial Officer, Chief Accounting Officer and Senior Vice President
Robert J. Saltiel - Chief Executive Officer, President, Director and Member of Executive Committee
Analysts
David Wilson - Howard Weil Incorporated, Research Division
Collin Gerry - Raymond James & Associates, Inc., Research Division
Rhett Carter - Tudor, Pickering, Holt & Co. Securities, Inc., Research Division
Matthew D. Conlan - Wells Fargo Securities, LLC, Research Division
Eduardo Royes - Jefferies & Company, Inc., Research Division
Nigel Browne - Macquarie Research
Matthew H. Beeby - Williams Financial Group, Inc., Research Division
John R. Keller - Stephens Inc., Research Division
Ryan Fitzgibbon - Global Hunter Securities, LLC, Research Division
Presentation
Operator
And welcome to today's fiscal 2012 fourth quarter and year end results program. Your speakers for today will be Rob Saltiel, President and Chief Executive Officer; and Mark Mey, Vice President and Chief Financial Officer. [Operator Instructions] Please note, today's call is being recorded. It's now my pleasure to turn the program over to Mark Mey. Please begin, sir.
Mark L. Mey
Thanks, Kevin, and good morning, and welcome to Atwood Oceanics conference call and webcast to review the company's operating results for the year ended September 30, 2012. As Kevin mentioned, the speakers today will be Rob Saltiel, President and CEO; and myself, Mark Mey, Senior Vice President and CFO.
Before we begin, let me remind everyone that during the course of this conference call, we may make forward-looking statements, which are not historical facts and are based upon management's current plans, expectations, estimates, and assumptions and beliefs concerning future events impacting us. These statements involve a number of risks and uncertainties, including the risks which are described in the company's most recent Form 10-K, and the filings with the U.S. Securities and Exchange Commission. 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 if one of these risks and uncertainties were to occur, or our assumptions prove incorrect. Undue reliance should not be placed on these forward-looking statements, which are applicable only as of the date hereof.
Now let me turn the call over to Rob, for opening remarks.
Robert J. Saltiel
Thanks, Mark, and good morning to all of you as we discuss Atwood's Fourth Quarter and Full Fiscal Year 2012 Results. The fourth quarter was clearly one of the busiest and most successful quarters in Atwood's 44-year history.
Before discussing the results, I want to commend our operations and technical teams around the world, and at our Houston headquarters for their continued excellent performance. Their efforts are distinguishing our company as the leading provider of safe and reliable offshore drilling services and as the preferred drilling contractor for our clients.
Turning now to our financial results. We achieved company records for revenues and net income, both in the fourth quarter and for the full fiscal year. For the quarter, revenues of $252.5 million were more than 35% higher than any other quarter in our history, and more than a 45% improvement on our third quarter revenue. Similarly, our fourth quarter net income of $95.5 million was easily a quarterly record and was nearly 85% higher than our third quarter net income. Mark will provide more color on our numbers in his section.
Our fourth quarter financial results would not have been possible without stellar operations performance. In fact, we achieved close to 99% revenue efficiency over our entire rig fleet. This means that all Atwood rigs and all operations teams were performing at the top of their game for the entire quarter. As I've said on previous calls, consistent reliability performance is a real difference maker for Atwood and more importantly, for our clients.
The fourth quarter results were aided significantly by the on-time delivery of the Atwood Condor and its mobilization revenue while transiting to the Gulf of Mexico, as well as the early delivery and commencement of drilling of the Atwood Mako, the first of our 3 Pacific Class 400 jack-ups. I should add that both of these rigs were off to excellent starts in terms of their safety and operational performance. The Condor has been averaging approximately 94% revenue efficiency since its start in early October, while the Mako has experienced no loss of revenues since its startup in September. Our new rigs and their operating teams are clearly coming out of the gate with an Atwood standard of performance.
Our newbuild project teams also deserve major kudos as they continue to deliver our newbuild rigs on time and client-ready. The early delivery of the Mako allowed us to start our 1-year drilling program with Salamander Energy, offshore Thailand, ahead of schedule. Just yesterday, the Atwood Manta was delivered by the PPL Shipyard to Atwood. We are now undergoing final commissioning of the rig before it mobilizes to its first location in Thailand, expected to occur in early December.
Our third newbuild jack up, the Atwood Orca, remains well ahead of its June 2013 scheduled delivery date. The Atwood Advantage, the first of our 3 ultra-deepwater drillships is making great progress in the DSME shipyard in South Korea. I visited the shipyard last month and toured the Advantage, which is now floating key side and undergoing final outfitting of its major equipment.
In September, we committed to build our third ultra-deepwater drillship, the Atwood Admiral, at the same shipyard with a scheduled delivery in early 2015. This latest commitment reflects our confidence in DSME's work and the excellent marketability of these highly capable drilling machines. We also obtained an option for a fourth drillship that has an exercise date of June 30, 2013.
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