Diamond Offshore Increases Cash Dividend to $1.875/Share

Diamond Offshore Drilling, Inc.

Diamond Offshore has declared an increased special cash dividend of $1.875 per share of common stock and a regular quarterly cash dividend of $0.125 per share of common stock. Both dividends are payable on December 1, 2008 to shareholders of record on November 3, 2008. The Company has paid special cash dividends of $1.25 per share of common stock in each of the past four quarters.

The Company has adopted a policy of considering paying special cash dividends, in amounts to be determined, on a quarterly basis. Any determination to declare a special dividend, as well as the amount of any special dividend which may be declared, will be based on the Company's financial position, earnings, earnings outlook, capital spending plans and other relevant factors at that time.