USA: Drilling Moratorium Causes Downfall of Diamond Offshore’s 3Q Results

Diamond Offshore Drilling, Inc. today reported net income for the third quarter of 2010 of $198.5 million, or $1.43 per share on a diluted basis, compared with net income of $364.1 million, or $2.62 per share on a diluted basis, in the same period a year earlier.

Revenue in the third quarter of 2010 was $799.7 million, compared with revenue of $908.4 million for the third quarter of 2009.

For the nine months ended September 30, 2010, the Company reported net income of $713.8 million, or $5.13 per share on a diluted basis, compared with net income of $1.1 billion, or $7.91 per share on a diluted basis, for the same period in 2009. Revenue for the nine months ended September 30, 2010 was $2.5 billion, compared with revenue of $2.7 billion for the first nine months of 2009.

Diamond Offshore President and Chief Executive Officer Larry Dickerson said: “Earnings for the quarter were negatively impacted by reserves taken in connection with a contractual force majeure dispute with a customer emanating from the drilling moratorium in the U.S. Gulf of Mexico; higher than normal downtime related to special surveys, shipyard maintenance, and acceptance testing; and the mobilization of rigs out of the U.S. Gulf. We anticipate that most of these rigs will be employed during the majority of the fourth quarter of 2010.

“While uncertainty persists in the U.S. Gulf, international markets for our rigs remain relatively stable, supported by higher oil prices and consistent demand,” Dickerson said.

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