A bit of rosy news for offshore drillers: Atwood adds contract

The Atwood Aurora, an independent leg cantilever jack up, can drill to depths of 30,000 ft. (Photo: Atwood Oceanics)
The Atwood Aurora, an independent leg cantilever jack up, can drill to depths of 30,000 ft. (Photo: Atwood Oceanics)

A bright spot in offshore drilling this week, albeit a small one: Houston’s troubled Atwood Oceanics has nailed down an additional contract to drill a well off the coast of Australia.

The Australian exploration and production company Woodside Energy contracted the ultra-deepwater rig, the Atwood Osprey, to start work on a new well this spring.

It’s been a rough few years for offshore oil companies and their contractors. Producers have slammed the brakes on expensive exploration projects during the 2-year-old oil price crash. And no segment of the business has braked harder than offshore drilling, whose wells cost tens of millions of dollars each and take years to drill.

RELATED: Rough year for offshore oil; Atwood delays rig deliveries

Production companies are poised to spend less than $40 billion next year on exploration, their lowest total in at least seven years, according to a recent report by the energy research firm Wood Mackenzie.

Atwood announced earlier this month that it yet again cut a deal to delay delivery of — and payment for — two new ultra-deepwater drillships. Atwood said then it didn’t have contracts from oil producers to use the ships.

So the news released this week, that the Osprey would remain in service, was welcome. Atwood said the work starts in May and will run about 130 days at a day rate of $185,000, or about $24 million in total.

Mark Smith, Atwood’s chief financial officer, declined to comment.

But on Tuesday, analysts saw the news as rosy.

Atwood stock rose 33 cents or about 2 percent to $13.93 by 11 a.m. Tuesday.

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