Offshore staff

Diamond Offshore Drilling Inc. has signed two contracts and five pending term contracts worth $1.2 billion over the lives of the contracts. Diamond's floaters will work in the Gulf of Mexico, Brazil, and the UK North Sea. Diamond has not yet entered into the pending contracts, and all of the pending contracts are subject to customary conditions including execution of definitive agreements.

In the GoM, the company received a letter of intent for a two-year term contract using theOcean Confidence for deepwater operations at a competitive market rate. In Brazil, Diamond contracts are being renewed on the company's fleet of four deepwater rigs operating in that market for terms of four years each (five years for the Ocean Clipper) at dayrates that could generate total revenues of over $880 million, excluding potential bonuses.

"These developments demonstrate the continuing growth in demand for mid-water and deepwater equipment seen in markets across the globe," Larry Dickerson, president and COO, says. "New dayrate highs have been achieved for term work utilizing fourth and fifth generation rigs in the US Gulf and for mid-water rigs in the UK sector of the North Sea. In Brazil, we are extremely pleased to receive contract extensions for substantial terms at dayrates reflecting today's vibrant market. Diamond Offshore expects these seven contract awards to provide a solid stream of future revenue and cash flow into 2006 and beyond."

The following table summarizes some of the terms of the contract awards that are expected to be included in the definitive agreements.

05/24/05