Atwood Oceanics (ATW) Q3 2011 Earnings Call August 04, 2011 10:00 am ET Executives Mark Mey - Chief Financial Officer, Chief Accounting Officer and Senior Vice President Robert Saltiel - Chief Executive Officer, President, Director and Member of Executive Committee Analysts G. Scott Burk - Canaccord Genuity Matthew Beeby - Global Hunter Securities, LLC David Wilson - Howard Weil Incorporated John Lawrence - Tudor, Pickering, Holt & Co. Securities, Inc. Presentation Operator
Now let me turn the call over to Rob for his opening comments.Robert Saltiel Thanks, Mark, and thank you for joining today's earnings call on our fiscal third year -- third quarter results. As usual, I will make a few comments on the past quarter's highlights and refresh our market outlook before handing it back to Mark to discuss the financial results. Let me start by saying that overall, we had another solid quarter of financial performance. Our net income of approximately $75 million represented the second-best quarter in our company's history, while our earnings per share of $1.15 was our third best ever. We are pleased with these results, and they are due in large part to 2 objectives that have the Atwood team's full focus and attention: delivering reliable service and managing our costs wisely. Mark will provide additional context on our quarter's numbers during his discussion. Operationally, we fulfilled our primary objective of delivering a very strong startup for the Atwood Osprey. The Osprey commenced its 3-year contract with Chevron on May 27, and the rig achieved approximately 95% revenue efficiency in the 35 days it operated during the last quarter, once you exclude the contractually agreed 0 rate time for commissioning and testing. The Osprey's reliability has continued to remain strong into this quarter as we achieved approximately 95% revenue efficiency for the month of July. These excellent results are due to a combination of factors: strong collaboration with the Jurong Shipyard team, selective recruitment and extensive training of our offshore personnel, thorough testing of the Osprey systems and equipment and the adoption of a common vision with Chevron around competency assurance and performance excellence. I want to take a moment to commend our entire operations and project organization and especially the Osprey team for their hard work in achieving these fine early results. In so doing, they have enhanced Atwood's reputation for operations excellence and established a blueprint for the trouble-free delivery and startup of our other newbuild rigs.
Outside of the Osprey, the rest of our active fleet had a generally good quarter with operations performance. The third quarter would have even been stronger but for some unplanned downtime that we experienced on the Atwood Hunter, owing to a series of unrelated operational incidences that have since been corrected. For the month of July, the Hunter achieved approximately 99% revenue efficiency.While we are on the subject of the Hunter, you will have seen on our fleet status report that we issued on Monday that the regulatory-driven out-of-service time for the Hunter occurs this quarter. We have been planning this work, which includes some maintenance-related projects, since the first fiscal quarter. We anticipate approximately 20 days of 0 rate time from this out-of-service period. There are also 2 other short-term out-of-service periods planned for this quarter for the Vicksburg and the Atwood Beacon. The 5 newbuild rigs that we are constructing in Singapore and Korea remain on track, with no changes to note from our previous guidance on budgets and schedules. I will remind the listeners that we have 2 remaining options with the DSME shipyard to build drillships identical to the Atwood Advantage. These options expire in late October. We also retained 2 options with the PPL Shipyard to build jack-ups identical to the Mako, Manta and Orca. These options expire at the end of December. The decisions on whether or not to exercise these options will be made in consultation with our board as the exercise dates get closer, so we don't plan to disclose any definitive plans on this call. Read the rest of this transcript for free on seekingalpha.com