News Press Releases

Diamond Offshore Announces Second Quarter 2015 Results

L | August 3, 2015

-- Reports Net Income of $90 million, $0.66 per Share -- Confirms Delivery of Fourth Drillship, Ocean BlackLion -- Announces Term Contract for Semisubmersible Rig, Ocean Apex -- Declares Regular Cash Dividend of $0.125 per Share

HOUSTON, Aug. 3, 2015 /PRNewswire/ -- Diamond Offshore Drilling, Inc. (NYSE: DO) today reported net income of $90 million, or $0.66 per share, in the second quarter of 2015, compared to $90 million, or $0.65 per share, in the second quarter of 2014. Revenues in the second quarter of 2015 were $634 million, compared to revenues of $692 million in the second quarter of 2014.

"During the quarter, our second and third newbuild drillships, the Ocean BlackHornet and Ocean BlackRhino, began working in the Gulf of Mexico, and we have taken delivery of our fourth and final newbuild drillship, the Ocean BlackLion, which we expect to be on dayrate near year-end," said Marc Edwards, President and Chief Executive Officer. "All four of these units will be working in the Gulf, where we will enjoy operational economies of scale."

"Our results for the quarter reflect ongoing efforts to manage costs effectively while remaining focused on safe operations and fleet reliability," added Mr. Edwards. "We delivered our best safety performance on record during Q2."

Additionally, the Company today announced that the Ocean Apex was awarded a contract for an 18-month term offshore Australia beginning in the second quarter of 2016 at a rate of $285,000 per day.

Diamond Offshore also announced today that it has declared a regular quarterly dividend of $0.125 per share, payable on September 1, 2015 to shareholders of record as of August 14, 2015.

CONFERENCE CALL

A conference call to discuss Diamond Offshore's earnings results has been scheduled for 7:30 a.m. CDT today. A live webcast of the call will be available online on the Company's website, www.diamondoffshore.com. Those interested in participating in the question and answer session should dial 800-247-9979 or 973-321-1100, for international callers. The conference ID number is 77534754. An online replay will also be available on www.diamondoffshore.com following the call.

ABOUT DIAMOND OFFSHORE

Diamond Offshore is a leader in offshore drilling, providing contract drilling services to the energy industry around the globe with a total fleet of 35 offshore drilling rigs, including one rig under construction. Diamond Offshore's fleet consists of 24 semisubmersibles, one of which is under construction, five dynamically positioned drillships, and six jack-ups. Additional information about the Company and access to the Company's SEC filings are available at www.diamondoffshore.com. Diamond Offshore is owned 53% by Loews Corporation (NYSE: L).

FORWARD-LOOKING STATEMENTS

Statements contained in this press release or made during the above conference call that are not historical facts are "forward-looking statements" within the meaning of the federal securities laws. Such statements include, but are not limited to, statements concerning drilling rig deliveries, operations and timing; contract effectiveness, effective dates and estimated duration; plans regarding retirement and scrapping of drilling rigs; future impairments; future dividends; expectations of future backlog, revenue, operating costs and performance; future liquidity, financial condition, market conditions, commodity prices and strategic opportunities; revenue expected to result from backlog; future credit ratings; future dayrates, future status, start and end dates and future contracts and availability; future contract opportunities and termination rights; contract noncompliance by customers and other third parties; utilization, surveys, downtime and other aspects of the Company's drilling rigs; statements concerning customer discussions and outcomes thereof and the impact of these and related events on the Company's operations and revenues; rigs being upgraded or to be upgraded and rigs under construction; and other statements that are not of historical fact. Forward-looking statements are inherently uncertain and subject to a variety of assumptions, risks and uncertainties that could cause actual results to differ materially from those anticipated or expected by management of the Company. A discussion of the important risk factors and other considerations that could materially impact these matters as well as the Company's overall business and financial performance can be found in the Company's reports filed with the Securities and Exchange Commission, and readers of this press release are urged to review those reports carefully when considering these forward-looking statements. Copies of these reports are available through the Company's website at www.diamondoffshore.com. These risk factors include, among others, risks associated with worldwide demand for drilling services, level of activity in the oil and gas industry, renewing or replacing expired or terminated contracts, contract cancellations and terminations, maintenance and realization of backlog, competition and industry fleet capacity, impairments and retirements, declaration of dividends, operating risks, changes in tax laws and rates, regulatory initiatives and compliance with governmental regulations, construction of new builds, casualty losses, and various other factors, many of which are beyond the Company's control. Given these risk factors, 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.

Contact:
Darren Daugherty
Director, Investor Relations
(281) 492-5370

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

		Three Months Ended				Six Months Ended
		June 30,				June 30,
		2015		2014		2015		2014
Revenues:
Contract drilling	$	617,442	$	649,554	$	1,217,019	$	1,334,862
Revenues related to reimbursable expenses		16,590		42,690		37,069		66,806
Total revenues		634,032		692,244		1,254,088		1,401,668

Operating expenses:
Contract drilling, excluding depreciation		342,869		395,376		693,527		765,166
Reimbursable expenses		16,336		42,290		36,428		65,956
Depreciation		123,329		108,906		260,628		215,917
General and administrative		16,548		20,478		34,000		43,305
Impairment of assets		--		--		358,528		--
Restructuring and separation costs		993		--		7,161		--
Gain on disposition of assets		(164)		(8,572)		(775)		(8,719)
Total operating expenses		499,911		558,478		1,389,497		1,081,625

Operating income (loss)		134,121		133,766		(135,409)		320,043

Other income (expense):
Interest income		584		150		1,167		558
Interest expense		(25,468)		(18,523)		(49,450)		(36,678)
Foreign currency transaction gain (loss)		(3,473)		(2,971)		2,117		(4,149)
Other, net		264		181		485		508

Income (loss) before income tax (expense) benefit		106,028		112,603		(181,090)		280,282

Income tax (expense) benefit		(15,642)		(22,890)		15,767		(44,759)

Net income (loss)	$	90,386	$	89,713	$	(165,323)	$	235,523

Income (loss) per share	$	0.66	$	0.65	$	(1.21)	$	1.71

Weighted average shares outstanding:
Shares of common stock		137,159		137,145		137,155			137,803
Dilutive potential shares of common stock		42		4		--			5
Total weighted average shares outstanding		137,201		137,149		137,155			137,808

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

		Three Months Ended
		June 30,		March 31,		June 30,
		2015		2015			2014

REVENUES
Floaters:
Ultra-Deepwater	$	315,670	$	251,396	$		182,656
Deepwater		181,104		138,770			120,539
Mid-water		96,926		176,357			300,902
Total Floaters		593,700		566,523			604,097
Jack-ups		23,742		33,054			45,457
Total Contract Drilling Revenue	$	617,442	$	599,577	$		649,554

Revenues Related to Reimbursable Expenses	$	16,590	$	20,479	$		42,690

CONTRACT DRILLING EXPENSE
Floaters:
Ultra-Deepwater	$	161,485	$	154,539	$		122,327
Deepwater		86,464		63,675			81,641
Mid-water		66,735		99,320			148,931
Total Floaters		314,684		317,534			352,899
Jack-ups		20,873		21,570			29,851
Other		7,312		11,554			12,626
Total Contract Drilling Expense	$	342,869	$	350,658	$		395,376

Reimbursable Expenses	$	16,336	$	20,092	$		42,290

OPERATING INCOME (LOSS)
Floaters:
Ultra-Deepwater	$	154,185	$	96,857	$		60,329
Deepwater		94,640		75,095			38,898
Mid-water		30,191		77,037			151,971
Total Floaters		279,016		248,989			251,198
Jack-ups		2,869		11,484			15,606
Other		(7,312)		(11,554)			(12,626)
Reimbursable expenses, net		254		387			400
Depreciation		(123,329)		(137,299)			(108,906)
General and administrative expense		(16,548)		(17,452)			(20,478)
Gain on disposition of assets		164		611			8,572
Impairment of assets		--		(358,528)			--
Restructuring and separation costs		(993)		(6,168)			--
Total Operating Income (Loss)	$	134,121	$	(269,530)	$		133,766

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

				June 30,		December 31,
				2015			2014

ASSETS

Current assets:
	Cash and cash equivalents		$	95,854	$		233,623

	Marketable securities			15,953			16,033

	Accounts receivable, net of allowance for bad debts			516,008			463,862

	Prepaid expenses and other current assets			194,615			185,541

				822,430			899,059

Drilling and other property and equipment, net of
accumulated depreciation				6,930,329			6,945,953

Other assets				122,883			176,277
		Total assets	$	7,875,642	$		8,021,289

LIABILITIES AND STOCKHOLDERS' EQUITY

Current portion of long-term debt			$	250,000	$		249,962

Short-term borrowings				374,978			--
Other current liabilities				408,728			606,684

Long-term debt				1,994,648			1,994,526

Deferred tax liability				407,808			530,394

Other liabilities				181,710			188,160

Stockholders' equity				4,257,770			4,451,563

		Total liabilities and stockholders' equity	$	7,875,642	$		8,021,289

DIAMOND OFFSHORE DRILLING, INC. AND SUBSIDIARIES AVERAGE DAYRATES AND UTILIZATION (Dayrate in thousands)

	Second Quarter 2015			First Quarter 2015			Second Quarter 2014
	Average Dayrate (1)	Utilization (2)	Operational Efficiency (3)	Average Dayrate (1)	Utilization (2)	Operational Efficiency (3)	Revised Average Dayrate (4)	Utilization (2)	Operational Efficiency (3)



Ultra-Deepwater Floaters	$483	63%	90.9%	$497	51%	81.5%	$435	51%	96.0%

Deepwater Floaters	$451	63%	99.3%	$486	45%	95.1%	$429	51%	99.3%

Mid-Water floaters	$278	32%	99.7%	$266	49%	94.1%	$272	68%	97.6%

Jack-ups	$83	53%	98.6%	$92	66%	99.4%	$98	74%	99.4%

Fleet Total			95.9%			91.2%			97.8%

(1)	Average dayrate is defined as contract drilling revenue for all of the specified rigs in our fleet per revenue earning day. A revenue earning day is defined as a 24-hour period during which a rig earns a dayrate after commencement of operations and excludes mobilization, demobilization and contract preparation days.

(2)	Utilization is calculated as the ratio of total revenue-earning days divided by the total calendar days in the period for all specified rigs in our fleet (including cold-stacked rigs, but excluding rigs under construction). As of June 30, 2015, our cold-stacked rigs included one deepwater semisubmersible, four mid-water semisubmersibles and four jack-up rigs.

(3)	Operational efficiency is calculated as the ratio of total revenue-earning days divided by the sum of total revenue-earning days plus the number of days (or portions thereof) associated with unanticipated equipment downtime.

(4)	Average dayrate reported in prior periods has been revised to conform to current presentation.