Diamond Offshore orders second ultra-deepwater drillship

HOUSTON, Feb 02, 2011 (BUSINESS WIRE) — Diamond Offshore Drilling, Inc. (NYSE:DO) has announced that a subsidiary, Diamond Offshore Drilling Limited, has exercised its option to build a second ultra-deepwater drillship with Hyundai Heavy Industries Co., Ltd. with delivery scheduled for the fourth quarter of 2013. Total cost, including commissioning, spares and project management, is expected to be approximately $590 million and is anticipated to be paid out of cash flow and available funds. Diamond Offshore has also obtained from Hyundai a fixed-price option for the purchase of a third drillship which the Company has the right to exercise at any time before the end of the first quarter of 2011. The two new drillships are planned to be named Ocean BlackHawk and Ocean BlackHornet.

Like its previously announced sister drillship, the BlackHornet will be dynamically-positioned, have a seven ram blow-out preventer, dual activity capability, five mud pumps and a maximum hook-load capacity of 1,250 tons. The unit will be designed for operations in up to 12,000 feet of water.

Diamond Offshore President and Chief Executive Officer Larry Dickerson said: “The addition of this second new drillship to our fleet will provide multiple ultra-deepwater options to our customers, who can then perform state-of-the-art drilling with Diamond Offshore’s high standards of systems integrity, safety and operational excellence. Including our acquisitions of the Ocean Courage and Ocean Valor in 2009, we have now purchased, ordered or upgraded seven units with capabilities in 10,000 ft. of water over the last four years. When completed, the new drillship will bring to sixteen the total number of deepwater rigs deployed by Diamond Offshore as we strive to provide returns consistent with our long history of value creation for the Company and our stockholders.”

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 www.diamondoffshore.com.

SOURCE: Diamond Offshore Drilling, Inc. *Photo: Deepwater Champion, the first drillship Hyundai Heavy delivered on November, 2010