DIAMOND OFFSHORE DRILLING, INC. - FORM 8-K - EX-99.1 - October 13, 2009

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Exhibit 99.1
DIAMOND OFFSHORE DRILLING, INC. RIG STATUS REPORT AS OF
October 13, 2009
RECENT COMMITMENTS — (See Body of Report For Contract Details/Date Changes and Other Information)
     
Ocean Victory
  One well
Ocean Guardian
  minimum of four wells
Ocean King
  219-day term
                                     
                        Dayrate        
Rig Name   WD   Location   Status   Operator   Current Term   ($000s)   Start Date   Est. End Date
Domestic Deepwater Semisubmersibles (8)
Ocean Star
  5,500’   GOM   Actively Marketing   DODI         0          
Ocean America
  5,500’   GOM   Current Contract   Mariner   6-month term   low 550’s   mid May 2009   late Jan. 2010
 
      GOM/Aust.   Prep and mobe   DODI               late Jan. 2010   mid May 2010
 
      Australia   Future Contract [swap from Bounty]   Woodside   two-year term   mid 420’s   mid May 2010   mid May 2012
Ocean Victory (Note 1)
  6,000’   GOM   Standby   DODI               mid Sept. 2009   mid Oct. 2009
 
      GOM   Future Contract   Deep Gulf   one well   low 150’s   mid Oct. 2009   mid Nov. 2009
 
          Contract Continuation   ATP   remaining three of six wells (approx. 150 days)   low 560’s   mid Nov. 2009   mid March 2010
 
          Actively Marketing   DODI   Gap in contract     0     mid March 2010   Q4 2011
 
          Contract Continuation   ATP   remaining days of one-year term   low 540’s   Q4 2011   to be determined
Ocean Baroness
  7,000’   GOM   Current Contract   Hess   term extension +unpriced option   mid 360’s   late Nov. 2007   mid April 2010
Ocean Endeavor
  10,000’   GOM   Current Contract   Devon   four-year term + unpriced option   mid 290’s   early July 2007   late June 2011
Ocean Monarch
  10,000’   GOM   Current Contract   Anadarko   four-year term + unpriced option   low 440’s   mid Sept. 2009   mid March 2013
Ocean Confidence
  10,000’   GOM   Current Contract   Murphy   four-year term + unpriced option   low 510’s   late Feb. 2008   late March 2012
Ocean Courage
  10,000’   GOM   Current Contract   Petrobras   five-year term (rate includes 50% of potential 8% bonus)   low 410’s   early Feb. 2010   late Jan. 2015
 
Note 1.    Victory — For a minimum of the first 240 days of the initial one-year contract period, Contract Drilling Revenue is to be recognized under normal GAAP accrual accounting at $540,000 per day, and additional contract dayrate of $20,000 is to be recognized as interest income over applicable periods reflecting deferred payment plan. The contract calls for $75,000 per day of the $560,000 contract dayrate to be paid on a current basis and the remaining $485,000 per day to be paid pursuant to an overriding royalty interest structure, as discussed in the Company’s Form 8-K that was filed on June 3, 2009. Remaining days under the initial one-year contract period will be deferred until approximately the fourth quarter of 2011, when the contract provides that the rig will be utilized by the operator at a dayrate of $540,000 payable in cash.

 

 

DIAMOND OFFSHORE DRILLING, INC. RIG STATUS REPORT AS OF
October 13, 2009
                                 
                        Dayrate        
Rig Name   WD   Location   Status   Operator   Current Term   ($000s)   Start Date   Est. End Date
Domestic 2nd Generation Semisubmersible (1)
Ocean Saratoga
  2,200’   GOM   Current Contract   Taylor   410-day term   200- 210   early June 2009   mid July 2010
 
      GOM   Future Contract   Taylor   one-year extension   200- 210   mid July 2010   late June 2011
Domestic Jack-ups (5)
Ocean Crusader
  200’ MC   GOM   Stacked   DODI                
Ocean Drake
  200’ MC   GOM   Stacked   DODI                
Ocean Champion
  250’ MS   GOM   Stacked   DODI                
Ocean Spartan
  300’ IC   GOM   Current Contract   Nippon   well completion   mid 40’s   early Oct. 2009   late Oct. 2009
 
      GOM   Future Contract   Nippon   2nd one-well ext.   mid 40’s   late Oct. 2009   mid Nov. 2009
Ocean Titan
  350’ IC   GOM   Current Contract   Ankor Energy   three wells + option   mid-40’s   early Aug. 2009   early Nov. 2009
Ocean Tower
  350’ IC   GOM   Asset Held for Sale   DODI                

 

 

DIAMOND OFFSHORE DRILLING, INC. RIG STATUS REPORT AS OF
October 13, 2009
                                 
Rig Name   WD   Location   Status   Operator   Current Term   Dayrate
($000s)		   Start Date   Est. End Date
International Semisubmersibles (23)
              
MEXICO
                                
Ocean New Era
  1,500’   GOM   Current Contract   PEMEX   2 1/2 year term   mid 260’s   late Oct. 2007   mid Feb. 2010
Ocean Voyager
  3,200’   GOM   Current Contract   PEMEX   2 1/2 year term   mid 330’s   early Nov. 2007   late Feb. 2010
NORTH SEA/MEDITERRANEAN
              
Ocean Nomad
  1,200’   North Sea   Current Contract   Talisman   two-year term extension   upper 330’s   late Oct. 2008   mid Oct. 2009, transfer to Princess
Ocean Guardian
  1,500’   North Sea   Survey/prep/mobe for Desire   DODI           mid Oct. 2009   early Feb. 2010
 
      Falkland Is.   Future Contract   AGR/Desire   minimum four wells   mid 240’s   early Feb. 2010   mid June 2010
Ocean Princess
  1,500’   North Sea   Current Contract   Talisman   resume two-year term extension   upper 330’s   late Dec. 2008   mid April 2010
 
      North Sea   Future Contract [swap from Nomad]   Talisman   remainder Nomad contract   upper 330’s   mid April 2010   mid March 2011
 
      North Sea   Future Contract   Talisman   120-day additional term   mid 270’s   mid March 2011   late July 2011
Ocean Vanguard
  1,500’   North Sea   Current Contract   Statoil   two-year term extension + unpriced
option 		  mid 400’s   late April 2008   mid April 2010
Ocean Valiant (Note 2)
  5,500’   Angola   Current Contract   Total   two-year term   low 620’s   late Sept. 2009   early Nov. 2011
AUSTRALASIA
                                
Ocean Bounty
  1,500’   Malaysia   Future 2-yr. cont. trans. to America; Bounty status TBD   DODI                
Ocean Patriot
  1,500’   Australia   Current Contract   Apache   two-year term +
unpriced option 		  between 380-420   late Jan. 2009   late Jan. 2011
Ocean Epoch
  3,000’   Australia   Current Contract   BHPB   550-day term +
unpriced options 		  low 350’s   late Feb. 2009   late Aug. 2010
Ocean General
  3,000’   Vietnam   Current Contract   PVEP   Approx. two-year term + unpriced options   high 250’s   mid Oct. 2008   late July 2010
Ocean Rover
  8,000’   Malaysia   Current Contract   Murphy   two-year term extension   low 450’s   late Feb. 2009   late Feb. 2011
Ocean Valor
  7,500’   Singapore   Final Commissioning/Actively Marketing   DODI           early Oct. 2009   late Jan. 2010
Note 2 Valiant — Dayrate subject to certain potential adjustments that are not expected to be material.

 

 

DIAMOND OFFSHORE DRILLING, INC. RIG STATUS REPORT AS OF
October 13, 2009
                                 
Rig Name   WD   Location   Status   Operator   Current Term   Dayrate
($000s)		   Start Date   Est. End Date
BRAZIL
                                
Ocean Ambassador
  1,100’   Brazil   Current Contract   OGX   3-year term + unpriced option   low 260’s   mid Sept. 2009   late Oct. 2012
Ocean Whittington
  1,500’   Brazil   Current Contract   Petrobras   5-year term (rate includes 50% of potential 15% bonus)   low 240’s   late Jan. 2009   late Aug. 2012
Ocean Concord
  2,200’   Brazil   Current Contract   Petrobras   5-year term (rate includes 50% of potential 15% bonus)   upper 240’s   early Jan. 2008   early Jan. 2013
Ocean Yorktown
  2,200’   Brazil   Current Contract   Petrobras   5-year term (rate includes 50% of potential 15% bonus)   low 250’s   mid Aug. 2008   mid Aug. 2013
Ocean Yatzy
  3,300’   Brazil   Current Contract   Petrobras   5-year term (rate includes 50% of potential 10% bonus)   mid 250’s   early Oct. 2009   early Oct. 2014
Ocean Quest
  4,000’   Brazil   Current Contract   ENI Brasil   assignment from Noble   mid 380’s   mid May 2009   mid Nov. 2009
 
      Brazil   Future Contract   OGX   2-year term + unpriced option   low 420’s   mid Nov. 2009   mid Nov. 2011
Ocean Winner
  4,000’   Brazil   Current Contract   Petrobras   4-year term (rate includes 50% of potential 5% bonus)   mid 110’s   mid March 2006   mid March 2010
 
      Brazil   Future Contract   Petrobras   5-year term (rate includes 50% of potential 10% bonus)   mid 280’s   mid March 2010   mid June 2015
Ocean Worker
  4,000’   Brazil   Current Contract   Petrobras   6-year term (rate includes 50% of potential 10% bonus)   mid 280’s   late Feb. 2009   late Feb. 2015
Ocean Alliance
  5,000’   Brazil   Current Contract   Petrobras   4-year term (rate includes 50% of potential 20% bonus)   low 170’s   early Jan. 2009   late June 2010
 
      Brazil   Future Contract   Petrobras   6-year term (rate includes 50% of potential 15% bonus)   mid 360’s   late June 2010   mid June 2016
Ocean Lexington
  2,200’   Spain/Brazil   Prep, mobe & acceptance test for OGX   DODI           early Sept. 2009   early Feb. 2010
 
      Brazil   Future Contract   OGX   3-year term + unpriced option   mid 330’s   early Feb. 2010   early Feb. 2013
International Drillship (1)
              
Ocean Clipper
  7,500’   Brazil   Current Contract   Petrobras   5-year term (rate includes 50% of potential 5% bonus)   mid 180’s   mid Dec. 2005   mid Dec. 2010

 

 

 

DIAMOND OFFSHORE DRILLING, INC. RIG STATUS REPORT AS OF
October 13, 2009
                                     
                        Dayrate        
Rig Name   WD   Location   Status   Operator   Current Term   ($000s)   Start Date   Est. End Date
International Jack-ups (9)
                  
Ocean Columbia
  250’ IC   Mexico   Current Contract   Pemex   113-day extension   low 110’s   mid June 2009   mid Oct. 2009
 
      Mexico   Intermediate Survey   DODI         0     mid Oct. 2009   late Oct. 2009
Ocean Nugget
  300’ IC   Mexico   Current Contract   Pemex   849 day term   mid 130’s   early April 2009   early Dec. 2009
 
      Mexico   Intermediate Survey   DODI         0     early Dec. 2009   late Dec. 2009
 
      Mexico   Current Contract   Pemex   resume 849 day term   mid 130’s   late Dec. 2009   late July 2011
Ocean Summit
  300’ IC   Mexico   Current Contract   Pemex   476 day term   mid 130’s   late July 2009   mid Nov. 2010
Ocean King
  300’ IC   Croatia   Current Contract   CROSCO   two-year bareboat charter   upper 100’s   mid Nov. 2007   mid Nov. 2009
 
      Croatia   Future Contract   CROSCO   219-day bare-boat charter + option   low 50’s   mid Nov. 2009   late June 2010
Ocean Sovereign
  300’ IC   Indonesia   Current Contract   Kodeco   resume 15-month term + unpriced option   mid 140’s   early March 2009   mid April 2010
Ocean Heritage
  300’ IC   Gulf of Suez   Future Contract   SUCO   six-month term + six-month option   mid 60’s   late July 2009   early Jan. 2010
Ocean Spur
  300’ IC   Egypt   Current Contract   WEPCO   one-year term + option   mid 80’s   late Aug. 2009   late Aug. 2010
Ocean Shield
  350’ IC   Australia   Current Contract   ENI   term   mid 260’s   early Jan. 2009   early Jan. 2010
Ocean Scepter
  350’ IC   Uruguay   Actively Marketing   DODI                    
 
NOTES:   Rig utilization rates can be adversely impacted by additional downtime due to unscheduled repairs and maintenance, weather conditions and other factors. An LOI is subject to customary conditions, including the execution of a definitive agreement and as such may not result in a binding contract. Options are un-priced and any extension of contract is subject to mutually agreeable terms & conditions unless otherwise indicated. Mobe revenues (if any) and mobe expenses are deferred, and generally are amortized over the life of the contract. GOM = Gulf of Mexico.
On rig utilization, assume 95% for DP units, 96% for conventionally moored rigs, and 98% for jack-ups.

 

 

 

DIAMOND OFFSHORE DRILLING, INC. RIG STATUS REPORT AS OF
October 13, 2009
EXPECTED 2009 DOWNTIME LONGER THAN 14 DAYS* (Subject to Change)
# Days
                         
Rig   (Total ’09 thru Q3 = 1,028)   Sept. Act.   Q3 Total   Comments
Shipyard — 5-Year Surveys & Maintenance
                       
Guardian
        23       23     5-year survey & maint. (start moved up from 2010)
Yatzy
                22     5-year survey & maint. (start moved up from Q3)
Total 5-year Surveys
        23       45      
 
                        
Contract Preparation
                        
Ambassador
        14       76     Contract prep, mobe, acceptance test for Brazil
Lexington
        21       21     Contract prep, mobe, acceptance test for Brazil
Valiant
        12       73     Contract prep, mobe, accept. test for West Africa
Summit
                36     Contract prep, maint., mobe for Mexico
Total Contract Prep
        47       206      
 
                        
Other Downtime
                        
Bounty
        0       0     To Be Determined
Total Other
        0       0      
Total
        70       251      
Unanticipated Downtime Beyond Original Forecast
                        
Whittington
                20      
 
*   Does Not Include Warm or Cold Stacked Rigs (see body of report for stacked units)
2010 Estimated Downtime = 644 days [excludes Bounty work TBD]
5-year Surveys: Spartan (40); New Era (50); Vanguard (65); Winner (92); Spur (35).
Intermediate Surveys: Clipper (40), Columbia (10); Nomad (40).
Other: Confidence (7); Lexington (35); Alliance (90); America (109); Guardian (31); Bounty (TBD).
IMPORTANT FOOTNOTES, PLEASE READ:
Survey Costs: When rigs are undergoing surveys, normal opex applies, plus additional costs. Addl. costs for 2009 for five new 5-year surveys are expected to be approximately: $5-6 million each for Titan, Yatzy, Concord, Champion and $24 million for America.
Mobe Costs: In addition, we expect to incur approximately $32 million of amortized mobe costs during 2009 ($8 million per qtr). NOTE: Amortized mobe costs are offset by amortized mobe revenues.

 

 

 

DIAMOND OFFSHORE DRILLING, INC. RIG STATUS REPORT AS OF
October 13, 2009
Average Per-Day Rig Operating Costs (in $000’s):*
     
Jack-Ups
    
GOM
  mid 40’s
Mexico
  mid 40’s
Mideast
  mid 50’s
Indonesia
  low 50’s
New-build Australia
  mid-80’s
New-build Argentina
  upper 70’s
Bareboat Charter
  low 10’s
 
    
Semisubmersibles**
    
GOM 2nd gen.
  mid 50’s
GOM 4th gen.
  low 80’s
GOM 4th gen. Victory-class upgrades
  upper 60’s
GOM 5th gen. Victory-class upgrades
  low 90’s
Mexico mid-water
  mid 60’s
Brazil mid-water
  upper 70’s
Vietnam mid-water
  upper 60’s
Malaysia 5th gen. Victory-class upgrade
  upper 90’s
Australia/New Zealand mid-water
  low 90’s
UK mid-water
  mid 70’s
Norway mid-water
  mid 130’s
Egypt mid-water
  upper 70’s
West Africa 4th gen.
  upper 140’s
 
    
Semisubmersible DP
    
GOM 5th gen. upgrade DP
  upper 110’s
GOM 6th gen. DP
  low 120’s
Brazil mid-water DP
  low 90’s
 
    
Drillship
    
Brazil deepwater DP
  mid 110’s
 
    
Other Per-Day Expense
    
Spare equipment repair, other
  low 30’s
 
*   Daily operating costs tend to run slightly lower early in the year and slightly higher toward end of year
 
**   All floaters conventionally moored unless otherwise noted.
Cost/Revenue Footnote: Contract Drilling Expenses applies to contract drilling expenses ONLY and does not include Reimbursable Expenses

 

 

DIAMOND OFFSHORE DRILLING, INC. RIG STATUS REPORT AS OF
October 13, 2009
Forward-Looking Statements: The rig status report may contain “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. Forward-looking statements include, without limitation, any statement that may project, indicate or imply future results, events, performance or achievements, and may contain or be identified by the words “expect,” “intend,” “plan,” “predict,” “anticipate,” “estimate,” “believe,” should, “could,” “may,” “might,” “will,” “will be,” “will continue,” “will likely result,” “project,” “budget,” “forecast,” and similar expressions. Statements by the Company in the rig status report that contain forward-looking statements include, but are not limited to, statements regarding the current term, future dayrates, start and end dates and comments concerning future contracts and availability, letters of intent, utilization, surveys, downtime and other aspects of the Company’s drilling rigs, as well as statements concerning rigs being upgraded or to be upgraded and the revised Ocean Victory contract. Such statements are inherently subject to a variety of assumptions, risks and uncertainties that could cause actual results to differ materially from those anticipated or projected. A discussion of the risk factors that could impact these areas and the Company’s overall business and financial performance can be found in the Company’s reports and other documents filed with the Securities and Exchange Commission. These factors include, among others, general economic and business conditions, contract cancellations, customer bankruptcy, operating risks, casualty losses, industry fleet capacity, changes in foreign and domestic oil and gas exploration and production activity, competition, changes in foreign, political, social and economic conditions, regulatory initiatives and compliance with governmental regulations, customer preferences and various other matters, many of which are beyond the Company’s control. Given these concerns, investors and analysts should not place undue reliance on forward-looking statements. Each forward-looking statement speaks only as of the date of the rig status report, and the Company undertakes no obligation to publicly update or revise any forward-looking statement.

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