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

Exhibit 99.1

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

DIAMOND OFFSHORE DRILLING, INC. ANNOUNCES
THIRD QUARTER 2007 RESULTS

Houston, Texas, October 25, 2007 — Diamond Offshore Drilling, Inc. (NYSE:DO) today reported net income for the third quarter of 2007 of $205.5 million, or $1.48 per share on a diluted basis, compared with net income of $164.5 million, or $1.19 per share on a diluted basis, in the same period a year earlier. Revenue for the third quarter of 2007 was $644.0 million, compared with revenue of $514.5 million for the third quarter of 2006.

For the nine months ended September 30, 2007, the Company reported net income of $681.6 million, or $4.93 per share on a diluted basis, compared with net income of $485.5 million, or $3.52 per share on a diluted basis for the same period in 2006. Revenue for the nine months ended September 30, 2007 was $1.9 billion, compared with revenue of $1.5 billion for the first nine months of 2006.

Diamond Offshore provides contract drilling services to the energy industry around the globe and is a leader in deepwater drilling.

As previously announced, Diamond Offshore will provide a simulcast and rebroadcast of its third-quarter 2007 earnings release conference call. The live broadcast of our quarterly conference call will be available online at www.diamondoffshore.com on October 25, 2007, beginning at 9:00 a.m. CDT. The online replay will follow immediately and continue for the remainder of the fourth 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 the management of Diamond Offshore. 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 website (www.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

5

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.

####

6

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

	Three Months Ended						Nine Months Ended
	September 30,						September 30,
	2007			2006			2007			2006
Revenues:
Contract drilling	$	628,246		$	498,453		$	1,854,085		$	1,431,496
Revenues related to reimbursable expenses		15,716			16,003			46,936			42,878
Total revenues		643,962			514,456			1,901,021			1,474,374
Operating expenses:
Contract drilling		282,100			224,883			719,833			599,271
Reimbursable expenses		13,584			13,982			40,226			37,083
Depreciation		57,565			49,757			171,605			148,858
General and administrative		13,105			9,959			37,245			29,786
(Gain) loss on disposition of assets		(363	)		(272	)		(5,418	)		2,191
Total operating expenses		365,991			298,309			963,491			817,189
Operating income		277,971			216,147			937,530			657,185
Other income (expense):
Interest income		8,735			10,037			26,127			26,843
Interest expense		(2,334	)		(6,128	)		(16,959	)		(18,678	)
Gain (loss) on sale of marketable securities		1,763			149			1,755			(53	)
Other, net		2,112			2,842			2,517			6,608
Income before income tax expense		288,247			223,047			950,970			671,905
Income tax expense		(82,724	)		(58,597	)		(269,370	)		(186,413	)
Net Income	$	205,523		$	164,450		$	681,600		$	485,492
Income per share:
Basic	$	1.48		$	1.27		$	4.96		$	3.76
Diluted	$	1.48		$	1.19		$	4.93		$	3.52
Weighted average shares outstanding:
Shares of common stock		138,683			129,172			137,484			129,110
Dilutive potential shares of common stock		307			9,617			1,432			9,664
Total weighted average shares outstanding		138,990			138,789			138,916			138,774

7

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

	Three Months Ended
	September 30,
	2007			2006
REVENUES
High Specification Floaters	$	258,679		$	191,786
Intermediate Semisubmersibles		255,795			189,521
Jack-ups		113,772			117,146
Total Contract Drilling Revenue	$	628,246		$	498,453
Revenues Related to Reimbursable Expenses	$	15,716		$	16,003
CONTRACT DRILLING EXPENSE
High Specification Floaters	$	93,812		$	61,882
Intermediate Semisubmersibles		136,261			111,748
Jack-ups		47,392			41,143
Other		4,635			10,110
Total Contract Drilling Expense	$	282,100		$	224,883
Reimbursable Expenses	$	13,584		$	13,982
OPERATING INCOME
High Specification Floaters	$	164,867		$	129,904
Intermediate Semisubmersibles		119,534			77,773
Jack-ups		66,380			76,003
Other		(4,635	)		(10,110	)
Reimbursable expenses, net		2,132			2,021
Depreciation		(57,565	)		(49,757	)
General and administrative expense		(13,105	)		(9,959	)
Gain on disposition of assets		363			272
Total Operating Income	$	277,971		$	216,147

8

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

	September 30,			December 31,
	2007			2006
	(unaudited)
ASSETS
Current assets:
Cash and cash equivalents	$	304,627		$	524,698
Marketable securities		375,394			301,159
Accounts receivable		545,249			567,474
Rig spare parts and supplies		51,215			48,801
Prepaid expenses and other		77,119			39,415
Total current assets		1,353,604			1,481,547
Drilling and other property and equipment, net of accumulated depreciation		2,864,997			2,628,453
Other assets		26,261			22,839
Total assets	$	4,244,862		$	4,132,839
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities	$	333,013		$	333,509
Long-term debt		503,011			964,310
Deferred tax liability		409,136			448,227
Other liabilities		103,623			67,285
Stockholders’ equity:
Cumulative effect of FIN 48 adoption		(28,422	)		—
Other stockholder’s equity		2,924,501			2,319,508
Total stockholders’ equity		2,896,079			2,319,508
Total liabilities and stockholders’ equity	$	4,244,862		$	4,132,839

9

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

	Third Quarter					Second Quarter					Third Quarter
	2007					2007					2006
	Dayrate		Utilization			Dayrate		Utilization			Dayrate		Utilization
						(Dayrate in thousands)
High Specification Floaters	$	302		85	%	$	307		86	%	$	222		93	%
Intermediate Semisubmersibles	$	186		78	%	$	157		90	%	$	128		85	%
Jack-ups	$	112		81	%	$	109		88	%	$	110		88	%

10