Atwood (ATW) To Bring Down Offshore Drilling Employee Costs
Zacks Investment Research | Aug 24, 2017 10:42PM ET
Drilling contractor AtwoodOceanics, Inc. (NYSE:ATW) has entered into a new four-year Enterprise Bargaining Agreement (EBA) with employees working off the coast of Australia.
Per the deal, the current wage level has been reset so that the company can better manage operations amid a weak offshore drilling business scenario. In the first year of the accord, the cost of employees will get lowered by more than 19%.
With this, Atwood will be able to provide services at more attractive day rates. It is to be noted that the new EBA will be effective Nov 24, 2017, but is awaiting consent from the Australian Fair Work Commission.
Given the current offshore drilling business environment, it is not surprising that the offshore employees have agreed to the wage reduction.
Headquartered in Houston, TX, Atwood is among the leading drilling players having operations in the offshore market. Presently, the company has ownership interest in 10 offshore drilling rigs. Two of Atwood’s drilling units that are capable of operating in ultra-deepwater are under construction.
The balance sheet of the company is solid as cash balance has been improving since fiscal year ended September 2014. Also, long-term debt load has gone down significantly over the same time period.
However, the company’s price chart fails to encourage. Year to date, Atwood’s stock lost 49.6%, underperforming the 47.7% decline of the Zacks Investment Research
Get The News You Want
Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.