Today Atwoods Oceanics (ATW) announces a contract extension with Chevron Australia for the Atwood Eagle ship for 6 months beyond the delivery date of the new Atwood Osprey. This move is notable for a couple of reasons.
First, demand must be improving considering that Chevron is willing to employ both ships during the initial 6 month period as opposed to just transitioning to the new ship. It also helps the financial outlook for ATWs as it keeps one of their biggest ships working for another 6 months. This now places it on contract through roughly the end of Q3 2011 leaving a long time to contract the ship out with a new customer. Atwoods currently only has 3 deepwater ships and a 4th to go into production in 2011 that earn more then $400K+ a day so its crucial that they be working.
Second, another interesting point is that the dayrate dropped down to $390K from $450K. Hard to tell if this is just a sweet deal with a customer using 2 ships at once or just the best deal that Atwoods can obtain for a older ship.
On another note, ATW announced that their newbuild due in 2012 with a depth of 10000' will be called the Condor. Not a big deal, but notable because its getting to the point that ATW should be finalizing a contract for this ship.Having a name is likely crucial for Marketing materials.
ATW remains a sub 10 PE as the market frets over global demand and deepwater drilling. Its worth noting that ATW only has 1 ship in the GOM that is relatively immaterial to their revenue stream. With contract extensions like the above, Atwoods should garner higher valuations in the future.
Disclosure: Long ATW