Diamond Offshore Drilling (DODRW) 8-K Diamond Offshore Drilling, Inc. Announces Second Quarter 2007 Results

Exhibit 99.1

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

DIAMOND OFFSHORE DRILLING, INC. ANNOUNCES
SECOND QUARTER 2007 RESULTS

Houston, Texas, July 26, 2007 — Diamond Offshore Drilling, Inc. (NYSE:DO) today reported net income for the second quarter of 2007 of $251.9 million, or $1.81 per share on a diluted basis, compared with net income of $175.7 million, or $1.27 per share on a diluted basis, in the same period a year earlier. Revenue for the second quarter of 2007 was $648.9 million, compared with revenue of $512.2 million for the second quarter of 2006.

For the six months ended June 30, 2007, the Company reported net income of $476.1 million, or $3.46 per share on a diluted basis, compared with net income of $321.0 million, or $2.33 per share on a diluted basis, for the same period in 2006. Revenue for the six months ended June 30, 2007 was $1.3 billion, compared to $959.9 million for the first six months of 2006.

The international markets for Diamond Offshore’s floater and jack-up equipment remained strong during the second quarter of 2007. As a result, four of our semisubmersibles received commitments that will occupy the units into the early part of the next decade, and one of the Company’s jack-up rigs also received a new term commitment. Among the recent highlights:

• In late July, theOcean Roverreceived a Letter of Award for a two-year commitment in Malaysia that is expected to extend that unit’s work in the country until the first quarter of 2011.

• TheOcean Patriotand theOcean Epocheach received new contracts that are expected to extend their operation in Australia at least until mid-2010.

• TheOcean Concordreceived notification of award for a five-year contract in Brazil that is expected to commence in the fourth quarter of 2007 and occupy the rig until late 2012. TheConcordis currently operating in the U.S. Gulf of Mexico (GOM).

• In the jack-up market, another of our GOM jack-up rigs moved to the international market. TheOcean King,departed for Croatia in early July, where, following a scheduled inspection and maintenance, the unit will commence a two-year bareboat charter that is expected to extend until the fourth quarter of 2009.

• Following a two-year upgrade and commissioning, the 10,000-ft. water-depth capable semisubmersibleOcean Endeavorcommenced operating under a four-year contract in the GOM.

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Diamond Offshore provides contract drilling services to the energy industry around the globe and is a leader in deepwater drilling. Additional information on Diamond Offshore Drilling, Inc. and access to the Company’s SEC filings is available on the Internet at www.diamondoffshore.com.

As previously announced, Diamond Offshore will provide a simulcast and rebroadcast of its second quarter 2007 earnings release conference call. The live broadcast of the Diamond Offshore quarterly conference call will be available online at www.diamondoffshore.com on July 26, 2007, beginning at 9:00 a.m. Central Daylight Time. The online replay will follow immediately and continue for the remainder of the third 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 may include, but are not limited to, statements concerning existing contracts, commitments and backlog, fleet enhancements, access to new markets, future earnings, future cash flows, market conditions, future market improvements, future growth in demand for equipment types or in any region 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, among others, the risk that a commitment, Letter of Award or Letter of Intent will not be converted to a contract, the risk that full rig utilization may not be achieved during a contract period, the risk that the fleet’s available days may be reduced by unscheduled downtime, the risk that these and other factors outside of the Company’s control may adversely impact the amount of profit realized from a contract, the risk that the markets for the Company’s services will not continue to improve, the risk that the Company’s market position may deteriorate, or the risk that the Company may not be able to participate fully in any future market improvements. 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.

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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,
	2007			2006			2007			2006
Revenues:
Contract drilling	$	635,927		$	498,390		$	1,225,839		$	933,043
Revenues related to reimbursable expenses		12,948			13,798			31,220			26,875
Total revenues		648,875			512,188			1,257,059			959,918
Operating expenses:
Contract drilling		223,731			200,182			437,733			374,388
Reimbursable expenses		10,571			11,810			26,642			23,101
Depreciation		58,335			49,519			114,040			99,101
General and administrative		12,174			9,886			24,140			19,827
(Gain) loss on disposition of assets		(3,553	)		2,696			(5,055	)		2,463
Total operating expenses		301,258			274,093			597,500			518,880
Operating income		347,617			238,095			659,559			441,038
Other income (expense):
Interest income		7,599			8,431			17,392			16,806
Interest expense		(3,770	)		(5,744	)		(14,625	)		(12,550	)
Loss on sale of marketable securities		(5	)		(8	)		(8	)		(202	)
Other, net		1,012			1,393			405			3,766
Income before income tax expense		352,453			242,167			662,723			448,858
Income tax expense		(100,526	)		(66,446	)		(186,646	)		(127,816	)
Net Income	$	251,927		$	175,721		$	476,077		$	321,042
Income per share:
Basic	$	1.82		$	1.36		$	3.48		$	2.49
Diluted	$	1.81		$	1.27		$	3.46		$	2.33
Weighted-average shares outstanding:
Shares of common stock		138,447			129,131			136,875			129,079
Dilutive potential shares of common stock		481			9,651			2,004			9,678
Total weighted average shares outstanding		138,928			138,782			138,879			138,757

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

	Three Months Ended
	June 30,
	2007			2006
REVENUES
High Specification Floaters	$	264,027		$	189,003
Intermediate Semisubmersibles		246,232			198,738
Jack-ups		125,668			110,649
Total Contract Drilling Revenue	$	635,927		$	498,390
Revenues Related to Reimbursable Expenses	$	12,948		$	13,798
CONTRACT DRILLING EXPENSE
High Specification Floaters	$	70,325		$	62,051
Intermediate Semisubmersibles		108,847			95,465
Jack-ups		42,751			39,872
Other		1,808			2,794
Total Contract Drilling Expense	$	223,731		$	200,182
Reimbursable Expenses	$	10,571		$	11,810
OPERATING INCOME
High Specification Floaters	$	193,702		$	126,952
Intermediate Semisubmersibles		137,385			103,273
Jack-ups		82,917			70,777
Other		(1,808	)		(2,794	)
Reimbursable expenses, net		2,377			1,988
Depreciation		(58,335	)		(49,519	)
General and administrative expense		(12,174	)		(9,886	)
Gain (loss) on disposition of assets		3,553			(2,696	)
Total Operating Income	$	347,617		$	238,095

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

	June 30,			December 31,
	2007			2006
	(Unaudited)
ASSETS
Current assets:
Cash and cash equivalents	$	616,737		$	524,698
Marketable securities		1,569			301,159
Accounts receivable		505,269			567,474
Rig spare parts and supplies		50,638			48,801
Prepaid expenses and other		58,489			39,415
Total current assets		1,232,702			1,481,547
Drilling and other property and equipment, net of accumulated depreciation		2,707,154			2,628,453
Other assets		24,972			22,839
Total assets	$	3,964,828		$	4,132,839
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities	$	265,328		$	333,509
Long-term debt		502,953			964,310
Deferred tax liability		403,290			448,227
Other liabilities		89,812			67,285
Stockholders’ equity:
Cumulative effect of FIN 48 adoption		(28,422	)		—
Other stockholder’s equity		2,731,867			2,319,508
Total stockholders’ equity		2,703,445			2,319,508
Total liabilities and stockholders’ equity	$	3,964,828		$	4,132,839

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

	Second Quarter					First Quarter					Second Quarter
	2007					2007					2006
	Dayrate		Utilization			Dayrate		Utilization			Dayrate		Utilization
	(Dayrate in thousands)
High Specification Floaters	$	307		86	%	$	280		98	%	$	219		94	%
Other Semisubmersibles	$	157		90	%	$	150		86	%	$	119		96	%
Jack-ups	$	109		88	%	$	112		90	%	$	103		89	%

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