May 24, 2005

Diamond Offshore announces $1.2 billion of contracts

Diamond Offshore Drilling, Inc. (NYSE:DO) today announced that it has two signed and five pending term contracts that would provide total combined revenue of up to $1.2 billion over the lives of the contracts.

The work will be performed in the Gulf of Mexico, Brazil and the U.K. sector of the North Sea.

Diamond Offshore 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 Gulf of Mexico, Diamond Offshore has received a letter of intent for a two-year term contract utilizing the Ocean Confidence for deepwater operations at a competitive market rate.

In Brazil, Diamond Offshore has been notified that 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.

Larry Dickerson, President and Chief Operating Officer, said, "These developments demonstrate the continuing growth in demand for mid-water and deepwater equipment seen in markets across the globe. New dayrate highs have been achieved for term work utilizing 4th and 5th generation rigs in the U.S. Gulf and for mid-water rigs in the U.K. 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.

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