Atwood Won't Exercise Option to Construct Deepwater Semisub at Jurong

Atwood Oceanics, Inc.

Atwood Oceanics will not be exercising its existing option to have Jurong Shipyard construct another deepwater semisubmersible drilling unit at Jurong's shipyard in Singapore. The Company is currently constructing a Friede & Goldman ExD Millennium 6,000 feet conventionally moored semisubmersible and a similarly designed 10,000 feet dynamically positioned semisubmersible at Jurong's shipyard in Singapore.

The current construction at Jurong is progressing well and both units are on schedule, with the delivery of the conventionally moored unit planned for early 2011 and the delivery of the dynamically positioned unit planned for mid 2012.

The longer-term fundamentals and outlook for the international deepwater markets that the Company serves remain positive. Therefore, the Company will continue to consider value-enhancing growth opportunities when the times are right.