I'm looking more into ATW, the company looks interesting but I have yet to look over the annual to extensively. Since they drill oil wells in the gulf, it is very expensive to actually set up a rig and since they seem to focus on exploratory wells, the risk of a dry hole (a well prospect that has no oil in it) is high. I did a search in the 10K for their dry hole expense and was unable to find it. Any idea on their drilling success rate (% of wells they drill that are not dry holes)? I'll let you know if I have any other questions as I move along in looking at this company.
Joe
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j.g.mussey
Re:ATW Discussion - 2007/08/15 21:31
Also, my apologies for misspelling your name, I just noticed.
Sorry again
Joe
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KrisJonA
Re:ATW Discussion - 2007/08/17 04:31
I was unable to find any information about that on their website or through any research. Also, since I have researched the company they have filed an 8-K press release discussing that a major oil rig in Lybia will be transported to Egypt possibly for that exact reason, (i'm not completely sure because it did not discuss the reason). Expenses for the move appear to be very high, possibly in the tens of millions. Though I believe the fundamentals are solid, I am curious to know what that move will do to future earnings.
Management appears to be very optimistic about future earnings as they should be, but i may have to look into the dry well aspect further.
Let me know if you find anything on that topic.
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KrisJonA
Re:ATW Discussion - 2007/08/17 04:34
They typically do not set up rigs in terms of prospecting. They set up according to research that shows that there is oil, so as for a dry well ratio, i would believe it would be low if any at all.
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j.g.mussey
Re:ATW Discussion - 2007/08/17 16:31
I can see their last big move was the ATWOOD EAGLE from Greece to Angola and it cost them $8.2 million. What this company does is drill exploration and developmental wells for Exploration and Production (E&P) companies. They are contracted this service because it is a large investment for the vessels that do this (the semi-submersibles). The purpose of an exploration well is to determine if there is in fact oil under the ground (seismic scans can only determine so much). I looked at their largest customer for 2006's (Woodside Energy Ltd.) drilling success rate and it was at 23% for the last 10 years. This is just part of the exploration drilling business and I do not think is even matters for this company (ATW) because they are just doing the drilling to see if the property the company that owns the land they are drilling for has oil there and how much (developmental wells). So in the end, it seems to me the risk is being taken by the E&P company, not the drillers (ATW for instance)
My questions is now, how often do they do these big moves? You would think they would have vessels that stay mostly in specific areas of the world (the Gulf of Mexico or the North Sea for instance) for several years and big moves should not be a common thing.
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KrisJonA
Re:ATW Discussion - 2007/08/19 21:09
Sorry I havn't looked into that recently, I am in Cleveland for the weekend and am pretty busy right now. Tmorrow I will ook into it further and get back to you.
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