Diamond Offshore Drilling (DODRW) 8-K Diamond Offshore Drilling, Inc. Announces Fourth Quarter 2009 Results

Exhibit 99.1

FOR IMMEDIATE RELEASE CONTACT: Les Van Dyke
Director, Investor Relations
(281) 492-5370

DIAMOND OFFSHORE DRILLING, INC. ANNOUNCES
FOURTH QUARTER 2009 RESULTS

Houston, Texas, February 4, 2010 — Diamond Offshore Drilling, Inc. (NYSE:DO) today reported net income for the fourth quarter of 2009 of $276.1 million, or $1.98 per share on a diluted basis, compared with net income of $293.3 million, or $2.11 per share on a diluted basis, in the same period a year earlier. Revenues in the fourth quarter of 2009 were $890.8 million, compared with revenues of $903.2 million for the fourth quarter of 2008.

Results for the fourth quarter of 2009 were adversely impacted by increased tax expense, largely arising from the (i) changing mix of domestic and international earnings during the year (ii) foreign exchange differences which affected the amount of foreign tax credits that could be utilized and (iii) to a lesser degree, an assessment by Brazil related to operations in 2004 and 2005. All of these factors disproportionately affected the fourth quarter. Additionally, results for the quarter were negatively impacted by net pre-tax bad debt expense primarily related to past-due receivables for a rig operating in Egypt. Slightly offsetting these adverse impacts, the Company recorded a net pre-tax gain that resulted from the sale of the jack-up rigOcean Tower.

For the year ended December 31, 2009, the Company reported net income of $1.4 billion, or $9.89 per share on a diluted basis, compared with net income of $1.3 billion, or $9.42 per share on a diluted basis, for the year ended December 31, 2008. Revenues for the year ended December 31, 2009 were $3.6 billion, compared with $3.5 billion for 2008.

Diamond Offshore provides contract drilling services to the energy industry and is a leader in deepwater drilling. Additional information on Diamond Offshore and access to the Company’s SEC filings is available on the Internet atwww.diamondoffshore.com.

As previously announced, Diamond Offshore will provide a simulcast and rebroadcast of its fourth quarter 2009 earnings release conference call. The live broadcast of our quarterly conference call will be available online atwww.diamondoffshore.com on February 4, 2010 beginning at 9:00 a.m. Central Time. The online replay will follow immediately and continue for the remainder of the 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 contained in this press release which are not historical facts are “forward-looking statements” within the meaning of the federal securities laws. Forward-looking statements are inherently uncertain and subject to a variety of risks that could cause

actual results to differ materially from those 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 release are urged to review those reports carefully when considering these forward-looking statements. Copies of these reports are available through the Company’s websitewww.diamondoffshore.com. Given these risk factors, investors and analysts should not place undue reliance on forward-looking statements. Any such forward-looking statements speak 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.

####

2

DIAMOND OFFSHORE DRILLING, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)

(In thousands, except per share data)

	Three Months Ended						Twelve Months Ended
	December 31,						December 31,
	2009			2008			2009			2008
Revenues:
Contract drilling	$	872,132		$	887,498		$	3,536,579		$	3,476,417
Revenues related to reimbursable expenses		18,650			15,709			94,705			67,640
Total revenues		890,782			903,207			3,631,284			3,544,057
Operating expenses:
Contract drilling		317,025			312,291			1,223,771			1,185,007
Reimbursable expenses		18,078			15,235			93,097			65,895
Depreciation		89,468			75,267			346,446			287,417
General and administrative		14,804			14,708			62,913			60,142
Bad debt expense		9,746			31,952			9,746			31,952
Gain on disposition of assets		(7,537	)		(2,326	)		(7,902	)		(2,831	)
Casualty loss		—			—			—			6,281
Total operating expenses		441,584			447,127			1,728,071			1,633,863
Operating income		449,198			456,080			1,903,213			1,910,194
Other income (expense):
Interest income		852			1,375			4,497			11,744
Interest expense		(23,174	)		(3,870	)		(49,610	)		(10,096	)
Foreign currency transaction gain (loss)		(6,438	)		(50,960	)		11,483			(65,566	)
Other, net		(1,467	)		437			(1,152	)		770
Income before income tax expense		418,971			403,062			1,868,431			1,847,046
Income tax expense		(142,907	)		(109,719	)		(492,212	)		(536,499	)
Net Income	$	276,064		$	293,343		$	1,376,219		$	1,310,547
Income per share:
Basic	$	1.99		$	2.11		$	9.90		$	9.43
Diluted	$	1.98		$	2.11		$	9.89		$	9.42
Weighted average shares outstanding:
Shares of common stock		139,019			139,001			139,007			138,959
Dilutive potential shares of common stock		118			65			90			114
Total weighted average shares outstanding		139,137			139,066			139,097			139,073

3

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

(In thousands)

	Three Months Ended
	December 31,
	2009			2008
REVENUES
High Specification Floaters	$	380,792		$	342,812
Intermediate Semisubmersibles		394,677			389,647
Jack-ups		96,663			155,039
Total Contract Drilling Revenue	$	872,132		$	887,498
Revenues Related to Reimbursable Expenses	$	18,650		$	15,709
CONTRACT DRILLING EXPENSE
High Specification Floaters	$	111,326		$	92,360
Intermediate Semisubmersibles		152,067			143,640
Jack-ups		48,214			71,105
Other		5,418			5,186
Total Contract Drilling Expense	$	317,025		$	312,291
Reimbursable Expenses	$	18,078		$	15,235
OPERATING INCOME
High Specification Floaters	$	269,466		$	250,452
Intermediate Semisubmersibles		242,610			246,007
Jack-ups		48,449			83,934
Other		(5,418	)		(5,186	)
Reimbursable expenses, net		572			474
Depreciation		(89,468	)		(75,267	)
General and administrative expense		(14,804	)		(14,708	)
Bad debt expense		(9,746	)		(31,952	)
Gain on disposition of assets		7,537			2,326
Total Operating Income	$	449,198		$	456,080

4

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

	December 31,
	2009		2008
ASSETS
Current assets:
Cash and cash equivalents	$	376,417	$	336,052
Marketable securities		400,853		400,592
Accounts receivable, net of provision for bad debts		791,023		574,842
Prepaid expenses and other		155,077		123,046
Assets held for sale		—		32,201
Total current assets		1,723,370		1,466,733
Drilling and other property and equipment, net of accumulated depreciation		4,432,052		3,414,373
Other assets		108,839		73,325
Total assets	$	6,264,261	$	4,954,431
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities	$	413,475	$	509,087
Long-term debt		1,495,375		503,280
Deferred tax liability		546,024		462,026
Other liabilities		178,745		118,553
Stockholders’ equity		3,630,642		3,361,485
Total liabilities and stockholders’ equity	$	6,264,261	$	4,954,431

5

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

	Fourth Quarter					Third Quarter					Fourth Quarter
	2009					2009					2008
	Dayrate		Utilization			Dayrate		Utilization			Dayrate		Utilization
	(Dayrate in thousands)
High Specification Floaters	$	388		81	%	$	389		75	%	$	386		89	%
Intermediate Semis	$	280		78	%	$	278		84	%	$	284		78	%
Jack-ups	$	112		63	%	$	117		65	%	$	121		92	%

6