USA: Diamond Offshore Reports Third Quarter Results

Diamond Offshore Drilling, Inc. reported net income for the third quarter of 2012 of $178 million, or $1.28 per share on a diluted basis, compared with net income of $257 million, or $1.85 per share on a diluted basis, in the same period a year earlier.

Revenues in the third quarter of 2012 were $729 million, compared with revenues of $878 million in the third quarter of 2011.

Since the start of the third quarter of 2012, the Company entered into 13 new agreements that are expected to generate maximum total revenue of approximately $1.7 billion and 12.1 rig-years of contract drilling backlog. Significant among these awarded contracts are the following:

– The Ocean Endeavor was awarded an 18-month contract at a dayrate of $505,000, plus a potential 6.6% performance bonus. The dayrate on the current contract is $285,000. The customer name and location of rig operation have not yet been announced.

– The Ocean Lexington was awarded a 477-day job in Trinidad at a rate of $300,000 per day versus its current rate of $277,000 per day. The rig will be mobilized to Trinidad upon completion of its current contracted term in Brazil.

– The Ocean Valiant received a two-well contract extension for work offshore Equatorial Guinea. The new rate will be $515,000 per day versus the current contract rate of $375,000 per day.

– The Ocean America was awarded an 18-month contract for work offshore Australia at a dayrate of $475,000. The rig is currently contracted at a rate of $405,000 per day.

“We posted excellent operating results for the quarter and announced several new contracts at strong dayrates across all ranges of water depths,” said Larry Dickerson, President and Chief Executive Officer of Diamond Offshore. “Our results for the quarter benefited from lower than anticipated operating expense, primarily owing to our continued emphasis on controlling costs.”

“During the quarter, we entered into a $750 million revolving credit facility, which will provide additional flexibility to our already strong balance sheet, as we complete construction of six new rigs over the next two years,” said Dickerson. “Among our industry peers, Diamond Offshore’s balance sheet is the least levered, and we enjoy the highest credit ratings.”

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Press Release, October 22, 2012