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Jefferies 2016 Energy ConferenceNovember 29, 2016
Rob SaltielPresident & CEO
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Forward-Looking Statements
Statements contained in this report with respect to the future are forward-looking statements. Thesestatements reflect management’s reasonable judgment with respect to future events. Forward-lookingstatements are subject to numerous risks, uncertainties and assumptions and actual results could differmaterially from those anticipated as a result of various factors including: uncertainties related to the level ofactivity in offshore oil and gas exploration and development; oil and gas prices; competition and marketconditions in the contract drilling industry; the risks inherent in the construction of a rig; delays in thecommencement of operations of a rig following delivery; our ability to enter into and the terms of futurecontracts; possible cancelation or suspension of drilling contracts; the availability of qualified personnel; laborrelations; operating hazards and risks; terrorism and political and other uncertainties inherent in foreignoperations (including risks of war, civil disturbances, seizure or damage to equipment, and exchange andcurrency fluctuations); the impact of governmental and industry laws and regulations; and environmentalmatters. These factors and others are described and discussed in our most recently filed annual report onForm 10-K, in our Forms 10-Q for subsequent periods and in our other filings with the Securities andExchange Commission which are available on the SEC’s website at www.sec.gov. The information containedin this presentation is subject to change without notice, is a summary, and as such does not contain allmaterial information concerning the Company. Each forward looking statement speaks only as of the date ofthis presentation and we undertake no duty to update the content of this presentation or any forward-lookingstatement contained herein to conform the statement to actual results or to reflect changes in ourexpectations.
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Well-Positioned to Weather the DownturnModern, high-quality rig fleet High-specification fleet averages only 4.5 years age (excludes one older
deepwater rig) Newer rigs will survive downturn and capitalize on eventual market
recoveryIndustry-leading performance and financial returns Superior safety and operational performance Excellent cost control that continues through FY2016
Financial flexibility and improving capital structure No debt maturities until May 2019 No capital payments on remaining two newbuild drillships until deliveries Revolving credit facility (“RCF”) has been amended to address covenant
risks and ensure access to funding during downturn Fiscal 2016 de-levering through purchase of $201 million face value ATW
bonds at a $67 million discount – also reduces interest expense
Well-Positioned to Weather the Downturn
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Young, High Specification Fleet
* Excludes rigs under constructionNote: Fleet also includes a deepwater semisubmersible, Atwood Eagle
• Atwood Advantage• Atwood Achiever• Atwood Admiral• Atwood Archer
• Atwood Condor• Atwood Osprey
• Atwood Aurora• Atwood Beacon • Atwood Mako• Atwood Manta• Atwood Orca
Average Age: 3 Years*
Average Age: 6 Years
Average Age: 5 Years
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HSE Leader
84%
86%
88%
90%
92%
94%
96%
98%
100%
Q1FY15
Q2FY15
Q3FY15
Q4FY15
Q1FY16
Q2FY16
Q3FY16
Q4FY16
Total Fleet Revenue Efficiency Average
The Atwood Advantage = Superior Performance
Reliable Operator
HSE Accomplishments
• Greater than 2 years without a Lost Time Injury
• End of fiscal 2016 marked 2 years without a reportable environmental incident
• Process Safety Incident Rate reduced by 62% in 2016 YTD vs. 2015
Atwood Achiever and Condor at standby rate (95%)
Australia cyclone event downtime
Operating Efficiencies
• Standardized equipment lowers inventory, capital spares, training and technical support costs
• Modern rigs offer significant off-line capabilities that reduce non-productive time for clients
LTIR = Lost Time Incident RateTRIR = Total Recordable Incident Rate
Calendar Year
1.26
0.46
0.690.52
0.380.21
0.00 0.04 0.08 0.000.00
0.20
0.40
0.60
0.80
1.00
1.20
1.40
2011 2012 2013 2014 2015Atwood TRIR Atwood LTIR
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Cost Reductions Continue - Onshore and Offshore2015 2017 cost improvements
$95
$75$65
2015A 2016 2017E
Onshore Support Cash Costs*$ Millions
Fiscal Year
Rig Operating Cash Cost Reductions (%)
31% Reduction
* Onshore support costs include G&A and operational support provided from the corporate office including operations support, engineering, supply chain, and HSE.
11%5%
14%21%
0%
5%
10%
15%
20%
25%
30%
Jackup Average Ultra-deepwater Average
2015 -> 2016 2016 -> 2017
25% 26%
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Recent Steps to Improve LiquidityAmended RCF to relax covenants and ensure access to funds Leverage covenant ratio removed and interest coverage covenant ratio removed for
the next 2 years (reinstated at 4Q FY 2018) Current liquidity is $810 million (as of November 15, 2016)
Repurchased $201 million face value of bonds at a $67 million discount Cash outlay of approximately $134 million Tax-efficient de-levering facilitates refinancing in 2019/2020 $449 million remaining balance of original $650 million issuance
$201 million bond repurchase together with RCF payments of $250 million reduced debt from $1.7 billion at September 30, 2015 to $1.2 billion at September 30, 2016 – a 27% debt reduction year on year
Reduced support costs by 31+% since 2015
Recent Steps to Improve Atwood Financial Flexibility
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$140
$670
$231$139
$65
$85
$752
$0
$200
$400
$600
$800
$1,000
Cash on hand RevolvingCredit Facility
Availability
Backlog After-tax cashflow*
CAPEX OnshoreSupport Costs
Debt Service RemainingLiquidity
Expect Ample Liquidity into FY 2018Even assuming only current contract backlog
$ Millions
Source: Atwood internal analysis as of November 15, 2016
$94
$45
Atwood Admiral Final Payment
Maintenance / OFE
Liquidity impacts• RCF Capacity reduction
(May 2018)• Delivery payment on
Atwood Archer• Idling of rigs not on
contract• Rig start-ups
Current Liquidity: $810 million
through FY 2017
* Excludes $286 million after tax cashflow from existing backlog beyond FY 2017
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Well-Positioned to Weather the Downturn
Time Allows for Opportunistic Capital Structure PlaysConservative stewardship of the balance sheet provides us 2 years of runwayNo debt maturities until May 2019Amended RCF covenants and ample bond indenture debt baskets provides maximum flexibility to improve the balance sheetFlexibility allows access to public debt markets, bank debt, and equity markets with limited restrictions
0100200300400500600700800900
2016 2017 2018 2019 2020
Debt Maturities / Current Balances$ Millions
RC
F
Bon
ds
$780M
$449M
Calendar Year
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Visible Catalysts for Offshore Rig Market Recovery
Drivers for increasing rig demand Rising oil price Improved drilling economics (as costs decrease) More attractive fiscal terms in international markets
Opportunities for re-balancing supply Delays / cancellations of newbuilds Acceleration of rig cold-stacking and retirements Consolidation among offshore rig contractors
Mounting evidence that catalysts are materializing for offshore drilling sector
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0
20
40
60
80
100
120
Scrapping Cold-stacking
Positive Trend: Floater Attrition is AcceleratingFloater Rig Attrition September 2014 – November 2016
Source: IHS Petrodata and Atwood Analysis
56
11343 UDW Rigs Scrapped – 5Cold Stacked – 38
45
11
67
46
12
8
302110
15
818
45
29
05
101520253035404550
2016(Nov - Dec)
2017 2018
Calendar Year
Under 25 Years Old 25+ Years Old
Extensive Rig Attrition Expected Over Next Two Years
Sources: Atwood Research, IHS Energy (Nov 2016)
5+ Months,
35
3-4 Months,
14
0-2 Months,
21
Idle Duration of Presently Idle Floaters
(70)
Contracted Floaters Rolling Over
2016 - 2018 (92)
68 Very Vulnerable Rigs Through 2018
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Is 90% Floater Utilization Possible by 2018?
Current: November 2016 December 2018
How to Meet Attrition Requirement?
2016 Attrition Rate: 6 /month 12 months70 Floaters Currently Idle; 35 for 5+ months
92 Floaters Will Roll Off; 33 are 25+ years old
* Assumes 20 newbuilds enter market
Demand: 149Marketed Supply: 166
Utilization: 90%
Source: Atwood Internal Analysis
Demand: 149Marketed Supply: 219
Utilization: 68%
Net Supply Reduction: 53Gross Supply Reduction: 73*
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Operational excellence and cost control initiatives mitigate the impacts of difficult market Opportunities to extend work with existing clients Continue reducing costs without impacting safety or service
Financial flexibility and improving capital structure Amendment to credit facility addressed covenant risks and
provides ample liquidity Will monitor markets and act opportunistically to de-lever and
stagger maturities
Young, high-quality fleet Modern high-specification rigs survive this downturn Built-in growth as rig market improves
Well-Positioned to Weather the Downturn
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Thank You!
www.atwd.com
www.atwd.comAtwood Advantage on location in Gulf of Mexico