Diamond Offshore Receives Two New Letters of Intent

Diamond Offshore has signed Letters of Intent (LOI) for term contracts utilizing the Ocean Baroness and Ocean Rover, two 5th generation semisubmersibles currently operating in South East Asia.

The expected revenue from the combined contracts is approximately $243 million. Under the Ocean Baroness LOI, the rig is expected to relocate to the U.S. Gulf of Mexico for a one-year contract with Amerada Hess Corp., following completion of its current work in Indonesia in May 2005. The Baroness is projected to require between 90 and 120 days to mobilize to U.S. waters prior to commencement of the contract. The Ocean Rover LOI would provide for an approximately 950-day extension of the rig's current work with Murphy Oil Corp. The contract is expected to include the drilling portion of Murphy's Kikeh development offshore Malaysia.

Larry Dickerson, president and chief operating officer, said, "These new agreements provide continuing evidence of the strength of the deepwater markets as we begin to build backlog extending into 2006 and 2007 and beyond, and reinforce our previously announced decision to move forward with the upgrade of the Ocean Endeavor for 5th generation ultra-deepwater service."