EXHIBIT 99.1
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[Diamond Offshore logo]
FOR IMMEDIATE RELEASE CONTACT: LES VAN DYKE
DIRECTOR, INVESTOR RELATIONS
(281) 492-5370
DIAMOND OFFSHORE DRILLING, INC. ANNOUNCES
SECOND QUARTER 2004 RESULTS
Houston, Texas, July 21, 2004 -- Diamond Offshore Drilling, Inc. (NYSE:DO) today
reported a net loss for the second quarter of 2004 of $10.5 million, or $0.08
per share on a diluted basis, compared with a net loss of $16.7 million, or
$0.13 per share on a diluted basis in the same period a year earlier. Revenues
for the second quarter of 2004 were $184.9 million, compared with revenues of
$163.2 million for the second quarter of 2003.
For the six months ended June 30, 2004, the Company reported a net loss of $21.5
million, or $0.17 per share on a diluted basis compared with a net loss of $38.3
or $0.29 per share on a diluted basis for the same period in 2003. Revenue for
the six months ended June 30, 2004 was $369.1 million, compared with $309.3
million for the first six months of 2003.
Results for the quarter were impacted by planned regulatory surveys as well as
lower utilization of several of the Company's mid-water and deepwater units in
the Gulf of Mexico. In particular, the semisubmersible rig Ocean Alliance
experienced a series of sub-sea and electrical problems after returning to work
following a scheduled regulatory survey and sub-sea equipment upgrade. As a
result, gross revenue was negatively impacted by $8.9 million and net income,
including approximately $1.5 million of repair costs on the Ocean Alliance, by
$7.8 million ($0.06 per share on a diluted basis). The Alliance has continued to
operate on term contract for Petrobras in Brazil since returning to work on July
2.
Regulatory surveys and related costs caused higher than normal contract drilling
expense during the quarter. A survey for the Ocean Vanguard, which was scheduled
for the second quarter of 2005, was accelerated in conjunction with that rig
returning to work in the U.K. sector of the North Sea. In addition, planned
regulatory surveys for the Ocean Yatzy and the Ocean Confidence were conducted
during the period, and a survey for the Ocean Winner, which extended into the
second quarter, was completed. Together, costs for the four surveys and related
expenses totaled approximately $6 million for the period.
Diamond Offshore President and Chief Operating Officer Larry Dickerson noted
that, "The market for all classes of our jack-up rigs in the U.S. Gulf of Mexico
experienced firming utilization and improving dayrates during the second quarter
of 2004. As a result, utilization averaged 90% in the period compared with 85%
in the first quarter of 2004, and dayrates increased an average of approximately
$1,000 per day across our jack-up fleet to average approximately $37,000. The
gains also factored into our decision in late June to reactivate the Ocean
Champion from cold-stack status. The rig is currently in Lake Charles, LA, being
prepared for a return to work anticipated in mid-August 2004."
"Outside of the U.S. Gulf, markets for our rigs have seen generally increasing
demand and improving dayrates. Both the North Sea and Australasia have shown
recent strength, and additional rigs are also being drawn to the Mid-East," Mr.
Dickerson said.
Diamond Offshore is a leader in deep water drilling. The Company's fleet of 45
offshore drilling rigs consists of 30 semisubmersibles, 14 jack-ups and one
drillship. The fleet operates in the waters of six of the world's seven
continents.
As previously announced, Diamond Offshore will provide an online, real-time
simulcast and rebroadcast of its 2004 second quarter earnings release conference
call. The live broadcast of the Diamond Offshore Drilling, Inc. quarterly
conference call will be available online at www.diamondoffshore.com on July 21,
2004, beginning at 9:00 a.m. Central Time. The online replay will follow
immediately and continue for 5 days 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, and are
inherently subject to a variety of risks and uncertainties that could cause
actual results to differ materially from those anticipated or projected. A
discussion of the 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,
------------------------------------------------------------
2004 2003 2004 2003
----------- ----------- ----------- -----------
REVENUES:
Contract drilling......................................... $ 176,685 $ 157,038 $ 353,925 $ 296,897
Revenues related to reimbursable expenses................. 8,261 6,162 15,219 12,452
----------- ----------- ----------- -----------
Total revenues.............................. 184,946 163,200 369,144 309,349
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OPERATING EXPENSES:
Contract drilling...................................... 133,483 124,606 268,161 238,276
Reimbursable expenses.................................. 7,519 5,525 13,753 11,263
Depreciation........................................... 44,554 41,553 89,074 88,830
General and administrative............................. 8,760 8,214 17,549 15,414
Loss (gain) on sale of assets.......................... 130 (57) (195) (58)
----------- ----------- ----------- -----------
Total operating expenses.................... 194,446 179,841 388,342 353,725
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OPERATING LOSS...................................................... (9,500) (16,641) (19,198) (44,376)
OTHER INCOME (EXPENSE):
Interest income........................................ 3,114 3,337 4,682 7,493
Interest expense....................................... (6,373) (5,378) (12,727) (10,953)
Gain (loss) on sale of marketable securities........... 283 (1,071) 258 (1,132)
Other, net............................................. (257) 1,290 (411) 3,032
----------- ----------- ----------- -----------
LOSS BEFORE INCOME TAX BENEFIT...................................... (12,733) (18,463) (27,396) (45,936)
INCOME TAX BENEFIT.................................................. 2,238 1,776 5,929 7,683
----------- ----------- ----------- -----------
NET LOSS............................................................ $ (10,495) $ (16,687) $ (21,467) $ (38,253)
=========== =========== =========== ===========
LOSS PER SHARE:
BASIC................................................. $ (0.08) $ (0.13) $ (0.17) $ (0.29)
=========== =========== =========== ===========
DILUTED............................................... $ (0.08) $ (0.13) $ (0.17) $ (0.29)
=========== =========== =========== ===========
WEIGHTED AVERAGE SHARES OUTSTANDING:................................
Shares of common stock............................... 129,322 130,366 129,322 130,336
Dilutive potential shares of common stock............ - - - -
----------- ----------- ----------- -----------
Total weighted average shares outstanding...... 129,322 130,366 129,322 130,336
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DIAMOND OFFSHORE DRILLING, INC. AND SUBSIDIARIES
RESULTS OF OPERATIONS
(Unaudited)
(In thousands)
THREE MONTHS ENDED
JUNE 30,
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2004 2003
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CONTRACT DRILLING REVENUE
High Specification Floaters.................................... $ 59,088 $ 72,660
Other Semisubmersibles......................................... 75,128 61,265
Jack-ups....................................................... 42,304 23,116
Other.......................................................... 165 (3)
Eliminations................................................... -- --
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TOTAL CONTRACT DRILLING REVENUE.................................. $ 176,685 $ 157,038
=========== ===========
REVENUES RELATED TO REIMBURSABLE EXPENSES........................ $ 8,261 $ 6,162
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CONTRACT DRILLING EXPENSE
High Specification Floaters.................................... $ 40,668 $ 38,555
Other Semisubmersibles......................................... 67,960 57,810
Jack-ups....................................................... 24,082 27,012
Integrated Services............................................ -- 841
Other.......................................................... 773 388
Eliminations................................................... -- --
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TOTAL CONTRACT DRILLING EXPENSE.................................. $ 133,483 $ 124,606
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REIMBURSABLE EXPENSES.......................................... $ 7,519 $ 5,525
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OPERATING LOSS
High Specification Floaters.................................... $ 18,420 $ 34,105
Other Semisubmersibles......................................... 7,168 3,455
Jack-ups....................................................... 18,222 (3,896)
Integrated Services............................................ -- (841)
Other.......................................................... (608) (391)
Reimbursables, net............................................. 742 637
Depreciation Expense........................................... (44,554) (41,553)
General and Administrative Expense............................. (8,760) (8,214)
(Loss) gain on Sale of Assets.................................. (130) 57
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TOTAL OPERATING LOSS............................................. $ (9,500) $ (16,641)
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DIAMOND OFFSHORE DRILLING, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands)
JUNE 30, DECEMBER 31,
---------------------------------
2004 2003
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(unaudited)
ASSETS
Current assets:
Cash and cash equivalents............................................. $ 129,327 $ 106,345
Investments and marketable securities................................. 35,755 503,995
Receivable from sale of marketable securities......................... 448,992 --
Accounts receivable................................................... 147,047 154,124
Rig inventory and supplies............................................ 48,296 48,035
Prepaid expenses and other............................................ 32,531 22,764
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Total current assets................................ 841,948 835,263
Drilling and other property and equipment, net of accumulated depreciation..... 2,220,509 2,257,876
Goodwill, net of accumulated amortization...................................... 4,291 11,099
Other assets................................................................... 29,920 30,781
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Total assets........................................ $ 3,096,668 $ 3,135,019
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LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities............................................................ 99,372 100,000
Long-term debt................................................................. 935,996 928,030
Deferred tax liability......................................................... 377,312 384,505
Other liabilities.............................................................. 41,146 42,004
Stockholders' equity........................................................... 1,642,842 1,680,480
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Total liabilities and stockholders' equity.......... $ 3,096,668 $ 3,135,019
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DIAMOND OFFSHORE DRILLING, INC. AND SUBSIDIARIES
AVERAGE DAYRATES AND UTILIZATION
SECOND QUARTER FIRST QUARTER SECOND QUARTER
2004 2004 2003
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DAYRATE UTILIZATION DAYRATE UTILIZATION DAYRATE UTILIZATION
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(Dayrate in thousands)
HIGH SPECIFICATION FLOATERS $98 66% $93 77% $96 92%
OTHER SEMISUBMERSIBLES $55 71% $57 66% $58 52%
JACK-UPS $37 90% $36 85% $27 68%
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