Diamond Offshore to Buy Ensearch Garden Banks

Diamond Offshore has signed a definitive agreement with Newfield Exploration Gulf Coast Inc. and partner for the purchase of the semisubmersible rig Enserch Garden Banks and related equipment for $20 million. Closing on the purchase is expected to take place in September 2005.

"As a Victory-class rig, this unit provides many options," stated Larry Dickerson, Diamond Offshore's President and Chief Operating Officer, "including the potential for a significant future upgrade for ultra-deepwater service. The recently announced upgrade of the Ocean Endeavor designed for operation in 10,000 feet of water will be our sixth Victory-class modernization project. Our two remaining Victory-class rigs, the Ocean Voyager and Ocean Bounty, are both committed for future mid-water work at dayrates near or above $100,000 per unit and not upgrade candidates at this time. We believe that this acquisition enables Diamond Offshore to continue to serve both our customers and shareholders."

The Garden Banks has been stacked in Galveston, Texas since its retirement from active service as a drilling and production unit in the Gulf of Mexico. The rig was last upgraded in 1995 by a previous owner.

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