Atwood Oceanics (NYSE: ATW) is engaged in the offshore drilling and completion of exploratory and developmental oil and gas wells. It also provides related support, management, and consulting services. The company offers semisubmersible rigs, semisubmersible tender assist rigs, jack-up drilling rigs, and submersible drilling rigs. Atwood has conducted drilling operations in most of the major offshore exploration areas of the world.

The company pleased investors late last month when it reported fiscal Q4 EPS of $1.69 and revenues of $121.6 million. Analysts had been expecting $1.43 and $115.9 million. Separately, the company said its Atwood Southern Cross drilling rig received a contract from Italian energy company Eni SpA AGIP to drill two wells, with options for two more, at a daily rate of $406,000. The project is expected to take 150 days, with a possible extension of 90 days, likely beginning in February. ATW shares popped on the news and then moved into a bullish "pennant" consolidation pattern. Prices frequently exit pennants moving in the same direction they were traveling on entry. In this case, that would be to the upside.