Atwood Oceanics, Inc. ATW announced that Mark L. Mey has resigned from his position as Executive Vice President and Chief Financial Officer.
The board of directors has appointed Mark W. Smith as Chief Financial Officer on an interim basis. Smith has served as Vice President, Chief Accounting Officer and Controller since May 2014. He has also played other finance roles in the company since he joined in Feb 2009. Moreover, Smith has over 20 years of experience in the financial, consulting and energy industries.
Founded in 1968, Atwood Oceanics is a global offshore drilling contractor focusing on drilling and completion of exploratory and developmental oil and gas wells. The company is headquartered in Houston, TX. The company currently owns 12 mobile offshore drilling units and is constructing two ultra-deepwater drillships.
We see Atwood Oceanics’ leverage to the global drilling market rather than the domestic market as its biggest advantage over most of its peers. The international drilling outlook has been strong versus the muted fundamentals in the U.S. In our view, the company presents investors with growth opportunity from any global deepwater drilling recovery.
However, certain factors are likely to keep near-to-medium-term earnings under pressure. The termination of any contract for tender-assist rigs is bound to affect the earnings and cash flow of the company. Also, downtime in any of the company’s rigs currently under contract will be an additional blow to the bottom line.
Atwood Oceanics currently carries a Zacks Rank #3 (Hold). Some better-ranked stocks in the oil and gas sector include LRR Energy LP LRE, Pembina Pipeline Corporation PBA and Transmontaigne Partners LP TLP. All of these sport a Zacks Rank #1 (Strong Buy) and offer above-average returns to investors.
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