Diamond Offshore Prices $250 Million Senior Note Offering

Diamond Offshore Drilling Inc. (NYSE:DO) reported the pricing of $250 million of the Company's 5.15% senior unsecured notes due Sept. 1, 2014. The notes were offered at 99.759% of the principal amount. Closing of the transaction is scheduled for Aug. 27, 2004, subject to customary closing conditions.

The Company intends to use the net proceeds from the sale of the notes to partially fund a refinancing of the Company's zero coupon convertible debentures due 2020. The holders of those debentures can require the Company to repurchase their debentures on June 6, 2005 at the issue price plus accrued original issue discount of 3.5% per year, or the accreted value. The Company has the option to repurchase all or part of the debentures on or after June 6, 2005 at the accreted value. As of June 30, 2004, the aggregate accreted value of the debentures was $463 million. On June 6, 2005, the accreted value of the debentures currently outstanding will be approximately $478 million.

This notice does not constitute an offer to sell or the solicitation of an offer to buy securities. Any offers of the securities will be made only by means of a private offering memorandum. The notes have not been registered under the Securities Act of 1933 or the securities laws of any other jurisdiction and will not be offered or sold in the United States absent registration or an applicable exemption from the registration requirements.