Atwood Oceanics Announces the VICKSBURG Contract, Exercise of ATWOOD BEACON Options and Early Termination of a One (1) Well Contract for the ATWOOD SOUTHERN CROSS

HOUSTON, Sept. 12 /PRNewswire-FirstCall/ -- On September 12, 2005, Atwood announced that the VICKSBURG, owned and operated by its wholly owned subsidiary Atwood Oceanics Pacific Limited, has been awarded a contract by Petrofac (Malaysia - PM 304), Ltd., ("PETROFAC) to drill four (4) firm wells with options to drill three (3) additional wells off the coast of Malaysia. The contract provides for a dayrate of $82,000 for the four (4) firm wells and $87,000 for any option wells drilled. This contract will commence immediately upon the rig, being demobilized back to Malaysia following the completion of the drilling program for Total Exploration and Production Myanmar (estimated March/April 2006). If all seven wells are drilled, the Petrofac commitment could extend 150 to 200 days.

The ATWOOD BEACON is currently drilling the third of now a six (6) firm well program offshore Vietnam for Hoang Long and Hoan Vu Joint Operating Companies ("Hoang Long") after Hoang Long exercised its two (2) remaining options. This drilling program is expected to extend to May/June 2006. Immediately upon the rig completing its current contract in Vietnam, the rig will commence its mobilization to India to commence a twenty-five (25) month drilling program for Gujarat State Petroleum Corporation Ltd. at a dayrate ranging from $113,000 to $133,500.

Due to a change in strategic objectives, BG International has given notice, in accordance with the contract, of early termination of the contract for the ATWOOD SOUTHERN CROSS to drill one well in the Mediterranean Sea. We do not expect to incur any significant financial impact from this contract termination. The rig has completed its mobilization to the Mediterranean Sea and is currently preparing to commence drilling one well for Isramco in mid to late September 2005 at a dayrate of $60,000. Upon completion of the Isramco drilling program (estimated November 2005), the rig will be moved to a shipyard for approximately 40 days for required inspections, Italian certification and equipment upgrade to drill two firm wells for EniSpA AGIP Exploration & Production Division ("AGIP") offshore Italy. This contract provides for a dayrate of $70,000 and $73,000 for the two-firm wells. Upon completion of the AGIP drilling program (estimated April to May 2006), the rig will immediately commence its drilling commitment with Melrose Resources. This contract provides for an operating dayrate of $125,000 and could extend for six (6) months.

Statements contained in this release with respect to the future are forward-looking statements. These statements reflect management's reasonable judgment with respect to future events. Forward-looking statements involve risks and uncertainties. Actual results could differ materially from those anticipated as a result of various factors; the Company's dependence on the oil and gas industry; the risks involved in upgrade to the Company's rigs; competition; operating risks; risks involved in foreign operations; risks associated with possible disruptions in operations due to terrorism; and governmental regulations and environmental matters. A list of additional risk factors can be found in the Company's Annual Report on Form 10-K for the year ended September 30, 2004, filed with the Securities and Exchange Commission.