FORM OF STOCK OPTION AGREEMENT 2001 STOCK INCENTIVE PLAN

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                                                                 EXHIBIT 10.3.7

                         FORM OF STOCK OPTION AGREEMENT

                            2001 STOCK INCENTIVE PLAN

     This is an Agreement dated the ______ day of ______________  200__, between

ATWOOD  OCEANICS,  INC., (the "Company") and  ________________________  ("Option

Holder").

Recitals:

     The  Company  has  adopted  its 2001  Stock  Incentive  Plan  (as  amended,

restated,  or otherwise modified from time to time, the "Plan") for the granting

to  Participants  (as defined in the Plan) of options to purchase  shares of the

Common Stock of the Company.  Pursuant to said Plan, the Compensation  Committee

of the  Company's  Board of Directors has approved and ratified the execution of

this Stock Option Agreement between the Company and the Option Holder.

Agreement:

     1. The  Company  grants  to the  Option  Holder  the  right  and  option to

purchase, on the terms and conditions  hereinafter set forth, all or any part of

an aggregate of __________  shares of the Common Stock,  $1.00 par value, of the

Company at the option price of $_______ per share (the  "Options"),  exercisable

from time to time, subject to the provisions of this Agreement,  during a period

commencing  at the end of the first year  following  the date of this  Agreement

(the  "Anniversary  Date") and  expiring at the close of business ten (10) years

from the date of this Agreement (the "Expiration Date").

     2. To the  extent  such  rights  shall not have been  exercised  and to the

extent the Options were  exercisable at the time of any  termination on or after

the  Option  Holder's  "Retirement  Date" as such term is  defined in the Atwood

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Oceanics,  Inc.  Employees'  Retirement Plan (or its successor)  ("Retirement"),

death of the  Option  Holder or the  Option  Holder's  Disability(as  defined as

defined in Section 22(e) of the Internal Revenue Code of 1986, as amended),  the

Option Holder (or his or her personal representative in the case of death) shall

be entitled to exercise  all or any part of any vested but  unexercised  Options

during the remaining term of such Options. If an Option Holder's employment with

the Company, its subsidiaries or affiliates (collectively,  the "Company Group")

terminates for any other reason  besides  Retirement,  death or Disability,  the

Option  Holder  shall be entitled to exercise  all or any part of any vested but

unexercised  Options  for a  period  of up to three  months  from  such  date of

termination.  It is understood  and agreed that neither the grant of this Option

nor the execution of this Agreement  shall create any right of the Option Holder

to remain in the employ of the Company Group, and that the Company Group retains

the right to terminate such employment at will, for due cause or otherwise.

     3. These Options are non-exercisable during the first (1) year during which

the Agreement is in effect.  Thereafter,  these Options are  exercisable  at the

times and for the  percentage  of shares  herein  granted as follows: 

(i) On or After the First Anniversary Date:

                _________________  - 25%

(ii) On or After the Second  Anniversary  Date:

                 _________________  - 25%

(iii) On or After the Third Anniversary  Date:  

                 _________________  -  25% 

(iv)  On  or  After  the  Fourth Anniversary Date: 

                 _________________ - 25%

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     Provided,  however, that the Options are cumulative, so that any shares not

purchased  pursuant to exercise of vested  Options within any one of the periods

above specified may be purchased  thereafter in a subsequent period, in whole or

in part, until the