Diamond Offshore Drilling, Inc. Announces First Quarter 2005 Results

    Business Editors/Energy Editors

    HOUSTON--(BUSINESS WIRE)--April 27, 2005--Diamond Offshore Drilling, Inc. (NYSE:DO) today reported net income of $30.1 million, or $0.23 per share on a diluted basis, for the first quarter of 2005, compared to a net loss of $11.0 million, or $0.08 per share on a diluted basis, in the same period a year earlier. Revenues for the first quarter of 2005 were $258.8 million, compared to revenues of $184.2 million for the first period in 2004.
    The improvement in operating results reflects a continuation of higher dayrates and rig utilization across the Company's entire fleet, and is indicative of the present worldwide offshore drilling market. Currently, the fleet's highest dayrates in the Gulf of Mexico include: $172,500 for the 4th generation semisubmersible Ocean Star for work commencing in the third quarter of 2005; $125,000 for the mid-water floater Ocean Voyager for work beginning in mid-November; $76,000 for the 350-ft. jack-up Ocean Titan for work commencing in mid-July; and $60,000 for the 300-ft. jack-up Ocean King for work beginning in early June 2005. The Company is currently bidding renewals in international markets at dayrates also reflecting increases.
    Larry Dickerson, President and Chief Operating Officer, said, "Approximately 83% of the Diamond Offshore fleet is contracted or committed in 2005 and we are currently building backlog into 2006, with about 25% of our fleet contracted or committed. We remain confident in the strength of our markets, and believe the Company is well positioned to take advantage of any future market improvements."
    Diamond Offshore provides contract drilling services to the energy industry around the globe and is a leader in deepwater drilling. The Company's fleet of 45 offshore drilling rigs consists of 30 semisubmersibles, 14 jack-ups and one drillship.
    As previously announced, Diamond Offshore will provide a simulcast and rebroadcast of its first quarter 2005 earnings release conference call. The live broadcast of the Diamond Offshore Drilling, Inc. quarterly conference call will be available online at www.diamondoffshore.com on April 27, 2005, beginning at 9:30 a.m. Central Time. The online replay will follow immediately and continue for the remainder of the first calendar quarter after the original call. Please go to the web site at least 15 minutes before the broadcast to register, download and install any necessary audio software.
    Statements in this press release may contain "forward-looking statements" within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. Such statements include, but are not limited to, statements concerning commitments for drilling work or contracts, future dayrates, future contract revenues and future contracts. Such statements are inherently subject to a variety of risks and uncertainties that could cause actual results to differ materially from those anticipated or projected, including the risk that a Letter of Intent may not result in a binding contract or the risk that the markets for the Company's services will not continue to improve. A discussion of additional risk factors that could impact these areas and the Company's overall business and financial performance can be found in the Company's reports and other filings with the Securities and Exchange Commission. These factors include, among others, general economic and business conditions, casualty losses, industry fleet capacity, changes in foreign and domestic oil and gas exploration and production activity, competition, changes in foreign, political, social and economic conditions, regulatory initiatives and compliance with governmental regulations, customer preferences and various other matters, many of which are beyond the Company's control. Given these concerns, investors and analysts should not place undue reliance on forward-looking statements. Each forward-looking statement speaks only as of the date of this press release. The Company expressly disclaims any obligation or undertaking to release publicly any updates or revisions to any forward-looking statement to reflect any change in the Company's expectations with regard thereto or any change in events, conditions or circumstances on which any forward-looking statement is based.

DIAMOND OFFSHORE DRILLING, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited) (In thousands, except per share data)

Three Months Ended March 31, ----------------------- 2005 2004 ----------- -----------

Revenues: Contract drilling $250,022 $177,240 Revenues related to reimbursable expenses 8,736 6,958 ----------- ----------- Total revenues 258,758 184,198 ----------- -----------

Operating expenses: Contract drilling 148,214 134,678 Reimbursable expenses 7,335 6,234 Depreciation 45,472 44,520 General and administrative 9,473 8,789 Loss (gain) on sale of assets 258 (325) ----------- ----------- Total operating expenses 210,752 193,896 ----------- -----------

Operating income (loss) 48,006 (9,698)

Other income (expense): Interest income 5,768 1,568 Interest expense (9,567) (6,354) Loss on sale of marketable securities (1,274) (25) Other, net 425 (154) ----------- -----------

Income (loss) before income tax (expense) benefit 43,358 (14,663)

Income tax (expense) benefit (13,240) 3,691 ----------- -----------

Net income (loss) $30,118 $(10,972) =========== ===========

Earnings (loss) per share: Basic $0.23 $(0.08) =========== =========== Diluted $0.23 $(0.08) =========== ===========

Weighted average shares outstanding: Common shares 128,573 129,322 Dilutive potential common shares 9,557 -- ----------- ----------- Total weighted average shares outstanding 138,130 129,322 =========== ===========

DIAMOND OFFSHORE DRILLING, INC. AND SUBSIDIARIES RESULTS OF OPERATIONS (Unaudited) (In thousands)

Three Months Ended March 31, ---------------------- 2005 2004 ----------- ----------

REVENUES High Specification Floaters $94,111 $64,752 Other Semisubmersibles 94,981 71,135 Jack-ups 60,704 40,819 Other 226 534 ----------- ---------- Total Contract Drilling Revenue $250,022 $177,240 =========== ==========

Revenues Related to Reimbursable Expenses $8,736 $6,958 =========== ==========

CONTRACT DRILLING EXPENSE High Specification Floaters $44,034 $42,470 Other Semisubmersibles 75,093 62,992 Jack-ups 27,906 27,937 Other 1,181 1,279 ----------- ---------- Total Contract Drilling Expense $148,214 $134,678 =========== ==========

Reimbursable Expenses $7,335 $6,234 =========== ==========

OPERATING INCOME (LOSS) High Specification Floaters $50,077 $22,282 Other Semisubmersibles 19,888 8,143 Jack-ups 32,798 12,882 Other (955) (745) Reimbursables, net 1,401 724 Depreciation Expense (45,472) (44,520) General and Administrative Expense (9,473) (8,789) (Loss) gain on Sale of Assets (258) 325 ----------- ---------- Total Operating Income (Loss) $48,006 $(9,698) =========== ==========

DIAMOND OFFSHORE DRILLING, INC. AND SUBSIDIARIES CONDENSED CONSOLIDATED BALANCE SHEETS (In thousands)

March 31, December 31, ------------------------- 2005 2004 ------------ ------------ (unaudited) ASSETS

Current assets: Cash and cash equivalents $242,622 $266,007 Investments and marketable securities 702,262 661,849 Accounts receivable 220,221 187,558 Rig inventory and supplies 47,636 47,590 Prepaid expenses and other 25,462 32,677 ------------ ------------ Total current assets 1,238,203 1,195,681

Drilling and other property and equipment, net of accumulated depreciation 2,129,947 2,154,593 Other assets 29,420 29,112 ------------ ------------ Total assets $3,397,570 $3,379,386 ============ ============

LIABILITIES AND STOCKHOLDERS' EQUITY

Current liabilities $600,801 $613,907

Long-term debt 709,425 709,413

Deferred tax liability 380,693 369,722

Other liabilities 58,788 60,516

Stockholders' equity 1,647,863 1,625,828 ------------ ------------ Total liabilities and stockholders' equity $3,397,570 $3,379,386 ============ ============

DIAMOND OFFSHORE DRILLING, INC. AND SUBSIDIARIES AVERAGE DAYRATES AND UTILIZATION

First Quarter Fourth Quarter First Quarter 2005 2004 2004 --------------------------------------------------------------------- Utili- Utili- Utili- Dayrate zation Dayrate zation Dayrate zation --------------------------------------------------------------------- (Dayrate in thousands) High Specification Floaters $109 96% $94 95% $93 77% Other Semi- submersibles $65 83% $63 81% $55 66% Jack-ups $48 96% $42 88% $36 85%

--30--JV/ho*

CONTACT: Diamond Offshore Drilling, Inc., Houston Les Van Dyke, 281-492-5370

KEYWORD: TEXAS INDUSTRY KEYWORD: OIL/GAS ENERGY MINING/METALS EARNINGS CONFERENCE CALLS SOURCE: Diamond Offshore Drilling, Inc.

Copyright Business Wire 2005