EXHIBIT 99.1
FOR IMMEDIATE RELEASE CONTACT: LES VAN DYKE
DIRECTOR, INVESTOR RELATIONS
(281) 492-5370
DIAMOND OFFSHORE DRILLING, INC. ANNOUNCES
SECOND QUARTER 2005 RESULTS
Houston, Texas, July 27, 2005 -- Diamond Offshore Drilling, Inc. (NYSE:DO) today
reported net income of $41.3 million, or $0.31 per share on a diluted basis for
the second quarter of 2005, compared to a net loss of $10.5 million, or $0.08
per share on a diluted basis, in the same period a year earlier. Revenues for
the second quarter of 2005 were $283.4 million, compared to revenues of $184.9
million for the second period in 2004.
For the six months ended June 30, 2005, the Company reported net income of $71.4
million, or $0.53 per share on a diluted basis, compared to a net loss of $21.5
million, or $0.17 per share on a diluted basis for the same period in 2004.
Revenue for the six months ended June 30, 2005, was $542.2 [million], compared
to $369.1 million for the first six months of 2004.
The improvement in operating results reflects a continuation of higher dayrates
and rig utilization across the Company's entire fleet, and is indicative of the
strength of the worldwide offshore drilling market. Results for the second
quarter also reflect the sale of the cold-stacked semisubmersible Ocean
Liberator in mid-June, 2005. The 600-ft. water-depth-rated unit was sold for
$14.0 million, for which the Company recognized an after-tax gain of $5.9
million. This gain was largely offset by the after-tax write-off of $5.0 million
of previously deferred loan origination fees related to Diamond Offshore's Zero
Coupon Convertible debt, 96% of which was redeemed by the Company on June 6,
2005. The previously deferred fees are included as interest expense on the
Company's Income Statement for the second quarter ended June 30, 2005.
The Company has entered into a Letter of Intent (LOI) to utilize the Ocean
Endeavor in the Gulf of Mexico for a period of between two and four years,
commencing when the rig is expected to be delivered from the shipyard in the
first quarter of 2007. If a definitive agreement is executed, the rig could earn
approximate total revenue of between $198 million and $355 million, depending
upon the length of the contract selected by the operator. Actual revenues
received could be reduced by various operating factors including utilization
rates. The Endeavor, a Victory-class semisubmersible rig, is currently being
upgraded in Singapore for ultra-deepwater service. The LOI is subject to
customary conditions including execution of a definitive agreement.
Larry Dickerson, President and Chief Operating Officer, said, "Approximately 89%
of Diamond Offshore's fleet is contracted or committed for the remainder of
2005, and we are currently booking significant work into 2006, with about 50% of
our fleet contracted or committed for next year. Assuming fulfillment of these
contracts and commitments, our total potential revenue commitment of $2.8
billion is now the largest dollar backlog
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we have ever experienced. We remain confident in the strength of our markets,
and believe that our exposure to the market in late 2006 and 2007 will allow the
Company to participate in any future market improvements."
Diamond Offshore provides contract drilling services to the energy industry
around the globe and is a leader in deepwater drilling. The Company's fleet of
44 offshore drilling rigs consists of 29 semisubmersibles, 14 jack-ups and one
drillship.
As previously announced, Diamond Offshore will provide a simulcast and
rebroadcast of its second quarter 2005 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 27, 2005, beginning
at 9:00 a.m. Central Time. The online replay will follow immediately and
continue for the remainder of the second 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 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 include,
but are not limited to, statements concerning commitments for drilling work or
contracts, future dayrates, future contract revenues, the term and start date of
future contracts, entry into definitive agreements, consummation of awarded
contracts, satisfaction of conditions precedent, future growth in demand for
equipment types or in any region, future cash flows, 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 notification of contract
award, letter of intent, or verbal contract commitment may not result in a
binding contract, the risk that a binding contract could be terminated, the risk
that the markets for the Company's services will not continue to improve, the
risk that full rig utilization may not be achieved during a contract period, or
the risk that factors outside of the Company's control may adversely impact the
amount of profit realized from a contract. 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,
-------------------------------------------------------
2005 2004 2005 2004
---------- ---------- ---------- ----------
REVENUES:
Contract drilling ................................... $ 272,665 $ 176,685 $ 522,687 $ 353,925
Revenues related to reimbursable expenses ........... 10,734 8,261 19,470 15,219
---------- ---------- ---------- ----------
Total revenues ................................. 283,399 184,946 542,157 369,144
---------- ---------- ---------- ----------
OPERATING EXPENSES:
Contract drilling ................................... 162,489 133,483 310,703 268,161
Reimbursable expenses ............................... 9,099 7,519 16,434 13,753
Depreciation ........................................ 45,978 44,554 91,450 89,074
General and administrative .......................... 9,186 8,760 18,659 17,549
(Gain) loss on sale of assets ....................... (8,250) 130 (7,992) (195)
---------- ---------- ---------- ----------
Total operating expenses ....................... 218,502 194,446 429,254 388,342
---------- ---------- ---------- ----------
OPERATING LOSS ........................................ 64,897 (9,500) 112,903 (19,198)
OTHER INCOME (EXPENSE):
Interest income ..................................... 6,128 3,114 11,896 4,682
Interest expense .................................... (15,756) (6,373) (25,323) (12,727)
Gain (loss) on sale of marketable securities ........ 77 283 (1,197) 258
Other, net .......................................... 445 (257) 870 (411)
---------- ---------- ---------- ----------
INCOME (LOSS) BEFORE INCOME TAX (EXPENSE) BENEFIT ..... 55,791 (12,733) 99,149 (27,396)
INCOME TAX (EXPENSE) BENEFIT .......................... (14,509) 2,238 (27,749) 5,929
---------- ---------- ---------- ----------
NET INCOME (LOSS) ..................................... $ 41,282 $ (10,495) $ 71,400 $ (21,467)
========== ========== ========== ==========
INCOME (LOSS) PER SHARE:
BASIC ............................................... $ 0.32 $ (0.08) $ 0.56 $ (0.17)
========== ========== ========== ==========
DILUTED ............................................. $ 0.31 $ (0.08) $ 0.53 $ (0.17)
========== ========== ========== ==========
WEIGHTED AVERAGE SHARES OUTSTANDING:
Shares of common stock .............................. 128,590 129,322 128,582 129,322
Dilutive potential shares of common stock ........... 9,544 -- 9,550 --
---------- ---------- ---------- ----------
Total weighted average shares outstanding ........ 138,134 129,322 138,132 129,322
========== ========== ========== ==========
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DIAMOND OFFSHORE DRILLING, INC. AND SUBSIDIARIES
RESULTS OF OPERATIONS
(Unaudited)
(In thousands)
THREE MONTHS ENDED
JUNE 30,
-------------------------
2005 2004
---------- ----------
REVENUES
High Specification Floaters ................ $ 97,579 $ 59,088
Other Semisubmersibles ..................... 112,359 75,128
Jack-ups ................................... 63,160 42,304
Other ...................................... (433) 165
---------- ----------
TOTAL CONTRACT DRILLING REVENUE .............. $ 272,665 $ 176,685
========== ==========
REVENUES RELATED TO REIMBURSABLE EXPENSES .... $ 10,734 $ 8,261
========== ==========
CONTRACT DRILLING EXPENSE
High Specification Floaters ................ $ 46,011 $ 40,668
Other Semisubmersibles ..................... 80,873 67,960
Jack-ups ................................... 32,751 24,082
Other ...................................... 2,854 773
---------- ----------
TOTAL CONTRACT DRILLING EXPENSE .............. $ 162,489 $ 133,483
========== ==========
REIMBURSABLE EXPENSES ........................ $ 9,099 $ 7,519
========== ==========
OPERATING INCOME (LOSS)
High Specification Floaters ................ $ 51,568 $ 18,420
Other Semisubmersibles ..................... 31,486 7,168
Jack-ups ................................... 30,409 18,222
Other ...................................... (3,287) (608)
Reimbursables, net ......................... 1,635 742
Depreciation Expense ....................... (45,978) (44,554)
General and Administrative Expense ......... (9,186) (8,760)
Gain (loss) on Sale of Assets .............. 8,250 (130)
---------- ----------
Total Operating Income (Loss) ...... $ 64,897 $ (9,500)
========== ==========
DIAMOND OFFSHORE DRILLING, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands)
JUNE 30, DECEMBER 31,
----------------------------
2005 2004
------------ ------------
(unaudited)
ASSETS
Current assets:
Cash and cash equivalents ......................... $ 687,879 $ 266,007
Investments and marketable securities ............. 302,335 661,849
Accounts receivable ............................... 263,227 187,558
Rig inventory and supplies ........................ 47,631 47,590
Prepaid expenses and other ........................ 37,682 32,677
------------ ------------
Total current assets ................. 1,338,754 1,195,681
Drilling and other property and equipment, net of
Accumulated depreciation .......................... 2,191,437 2,154,593
Other assets ........................................... 24,333 29,112
------------ ------------
Total assets ......................... $ 3,554,524 $ 3,379,386
============ ============
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Current portion of long-term debt ................ $ 12,818 $ 484,102
Accrued investment purchase ...................... 299,633 --
Other current liabilities ........................ 126,125 129,805
------------ ------------
Total current liabilities ............ 438,576 613,907
Long-term debt:
4.875% Senior Notes Due 2015 .................... 249,464 --
Other long-term debt ............................ 727,836 709,413
------------ ------------
Total long-term debt ................. 977,300 709,413
Deferred tax liability ................................. 392,278 369,722
Other liabilities ...................................... 62,006 60,516
Stockholders' equity ................................... 1,684,364 1,625,828
------------ ------------
Total liabilities and stockholders'
equity ............................. $ 3,554,524 $ 3,379,386
============ ============
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DIAMOND OFFSHORE DRILLING, INC. AND SUBSIDIARIES
AVERAGE DAYRATES AND UTILIZATION
SECOND QUARTER FIRST QUARTER SECOND QUARTER
2005 2005 2004
- ----------------------------------------------------------------------------------------------------------------------------------
DAYRATE UTILIZATION DAYRATE UTILIZATION DAYRATE UTILIZATION
- ----------------------------------------------------------------------------------------------------------------------------------
(Dayrate in thousands)
HIGH SPECIFICATION FLOATERS $122 88% $109 96% $98 66%
OTHER SEMISUBMERSIBLES $73 87% $ 65 83% $55 71%
JACK-UPS $52 92% $ 48 96% $37 90%
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