Diamond Offshore Drilling, Inc. Announces Second Quarter 2010 Results

Diamond Offshore Drilling, Inc. (NYSE:DO) today reported net
income for the second quarter of 2010 of $224.4 million, or $1.61 per
share on a diluted basis, compared with net income of $387.4 million, or
$2.79 per share on a diluted basis, in the same period a year earlier.
Revenues in the second quarter of 2010 were $822.6 million, compared
with revenues of $946.4 million for the second quarter of 2009.

For the six months ended June 30, 2010, the Company reported net income
of $515.2 million, or $3.70 per share on a diluted basis, compared with
net income of $736.0 million, or $5.29 per share on a diluted basis, for
the same period in 2009. Revenue for the six months ended June 30, 2010
was $1.7 billion, compared with $1.8 billion for the first six months of
2009.

Larry Dickerson, President and CEO, stated, 'The decline in renewal
contract dayrates from peak levels is continuing to impact our results.
In a related statement today, we announced a special quarterly dividend
of $.75 per share, representing a reduction of $.625 per share from the
previous special dividend, as well as our regular quarterly dividend of
$.125 per share. The reduction in the special dividend reflects the
lower revenue stream and the continuing uncertainty surrounding a
drilling moratorium in the Gulf of Mexico. We believe that given the
current and anticipated industry conditions, it is increasingly prudent
at this time to retain cash to maintain the Company′s financial strength
and strategic flexibility, as well as to position us for potential rig
acquisition opportunities. We believe that our special dividend policy
is an important part of our efforts to enhance shareholder value.?

Any decision by the Board to declare a special dividend, as well as the
amount of any special dividend that 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.

Diamond Offshore provides contract drilling services to the energy
industry and is a leader in deepwater drilling. Additional information
on Diamond Offshore and access to the Company′s SEC filings is available
on the Internet at

As previously announced, Diamond Offshore will provide a simulcast and
rebroadcast of its second quarter 2010 earnings release conference call.
The live broadcast of our quarterly conference call will be available
online at on July 22, 2010 beginning at 9:00 a.m. Central Daylight Time. The
online replay will follow immediately and continue for the remainder of
the calendar quarter after the original call. Please go to the web site
at least 15 minutes before the broadcast to register, download and
install any necessary audio software.

Statements contained in this press release which are not historical
facts are 'forward-looking statements? within the meaning of the federal
securities laws. Forward-looking statements are inherently uncertain and
subject to a variety of risks that could cause actual results to differ
materially from those expected by management of the Company. A
discussion of the important risk factors and other considerations that
could materially impact these matters as well as the Company′s overall
business and financial performance can be found in the Company′s reports
filed with the Securities and Exchange Commission and readers of this
release are urged to review those reports carefully when considering
these forward-looking statements. Copies of these reports are available
through the Company′s website Given these risk factors, investors and analysts should not place undue
reliance on forward-looking statements. Any such forward-looking
statements speak only as of the date of this press release. The Company
expressly disclaims any obligation or undertaking to release publicly
any updates or revisions to any forward-looking statement to reflect any
change in the Company′s expectations with regard thereto or any change
in events, conditions or circumstances on which any forward-looking
statement is based.