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8-K - FORM 8-K - DIAMOND OFFSHORE DRILLING INCh81468e8vk.htm

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Exhibit 99.1
DIAMOND OFFSHORE DRILLING, INC. RIG STATUS REPORT AS OF
April 21, 2011
RECENT COMMITMENTS — (See Body of Report For Contract Details/Date Changes and Other Information)
     
Ocean Nugget
  430-day term
 
   
Ocean Patriot
  21 firm wells + 3 options
 
   
Ocean Nomad
  4 firm wells + 3 options
 
   
Ocean Monarch
  one well
 
   
Ocean Titan
  one well extension
                                 
    Nominal                   Dayrate        
Rig Name   WD*   Location   Status   Operator   Current Term   ($000s)   Start Date   Est. End Date
Domestic Deepwater Semisubmersibles (2)        
Ocean Victory (Note 1)
  5,500’   GOM   Current Contract   ERT   one well   low 250’s   mid April 2011   mid May 2011
 
      GOM   Contract Continuation   ATP   continue six-wells   low 560’s   mid May 2011   early Aug. 2011
 
      GOM   Contract Continuation   ATP   balance 1-year term   low 540’s   early Aug. 2011   mid Oct. 2011
Ocean Monarch (Note 2)
  10,000’   GOM   Current Contract   Anadarko   cont. four-year term   low 440’s   early August 2010   mid March 2013
 
      GOM   Future Contract   Marathon   one well   mid 290’s   early May 2011   late June 2011
 
      GOM   Current Contract   Anadarko   cont. four-year term   low 440’s   late June 2011   mid March 2013
Domestic 2nd Generation Semisubmersibles (1)        
Ocean Saratoga
  2,200’   GOM   Current Contract   Taylor   one-year extension   200-210   mid July 2010   late June 2011
 
      GOM   Five Year Survey   DODI           early July 2011   late Aug. 2011
Domestic Jack-ups (2)
                               
Ocean Columbia
  250’ IC   GOM   Current Contract   Shell   one well   low 60’s   mid April 2011   early May 2011
Ocean Titan
  350’ IC   GOM   Current Contract   Ankor   one well extension   low 70’s   mid April 2011   late May 2011
Note (1). — Victory — In regard solely to the ATP contract, and 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 second 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.
Note (2). Monarch — In June 2010, one of our customers asserted force majeure as a basis for its termination of the drilling contract for the Ocean Monarch which had a remaining term of approximately 36 months. The operator has also filed suit against us in U.S. District Court in Houston seeking a declaratory judgment that its termination of the drilling contract is warranted under the contract. We do not believe the events cited by the operator come within the definition of force majeure under the drilling contract, and we do not believe that the operator has the right to terminate the drilling contract on this basis. Although we cannot predict with certainty the results of any such litigation, and there can be no assurance as to its ultimate outcome, we intend to vigorously defend this litigation and challenge the operator’s attempt to terminate the drilling contract.


 

2

DIAMOND OFFSHORE DRILLING, INC. RIG STATUS REPORT AS OF
April 21, 2011
                                 
    Nominal                   Dayrate        
Rig Name   WD*   Location   Status   Operator   Current Term   ($000s)   Start Date   Est. End Date
International Semisubmersibles (25)        
North Sea/Mediterranean
                               
Ocean Nomad
  1,200’   North Sea   Current Contract   BG Intl.   four firm wells + three option wells   mid 240’s   late Dec. 2010   mid Sept. 2011
Ocean Guardian
  1,500’   Falkland Is.   Current Contract   AGR/Desire/ Rockhopper   ten firm wells   mid 240’s   mid Feb. 2010   mid April 2011
 
      Falkland Is.   Future Contract   AGR/Desire/ Rockhopper   three firm wells + 10 priced options   mid 260’s   mid April 2011   mid July 2011
Ocean Princess
  1,500’   North Sea   Current Contract   Talisman   120-day additional term   mid 270’s   early April 2011   late July 2011
 
      North Sea   Intermediate Survey   DODI           late July 2011   early Sept. 2011
Ocean Vanguard
  1,500’   North Sea   Current Contract   Statoil   three-year term + unpriced option   high 340’s   mid Aug. 2010   mid June 2013
Ocean Endeavor (Note 3)
  10,000’   Egypt   Current Contract   Burullus   one-year term + priced option   mid 220’s   mid July 2010   mid July 2011
Ocean Confidence
      Angola   Current Contract   Total   assignment from Cobalt   upper 360’s   early Feb. 2011   early May 2011
 
      Angola   Future Contract   Cobalt   second firm well + option   low 360’s   early May 2011   early Oct. 2011
 
          Mobe to GOM   DODI           early Oct. 2011   early Dec. 2011
 
      GOM   Future Contract   Murphy   resume interrupted contract + unpriced option   low 510’s   early Dec. 2011   early Dec. 2012
Ocean Valiant (Note 4)
  5,500’   Angola   Current Contract   Total   two-year term   low 620’s   late Sept. 2009   late Sept. 2011
Note (3). Endeavor — In connection with the relocation of this rig out of the GOM pursuant to this contract, the previous operator paid an early termination fee of $31 million in order to satisfy certain contractual obligations.
Note (4). Valiant — Dayrate subject to certain potential adjustments that are not expected to be material.


 

3

DIAMOND OFFSHORE DRILLING, INC. RIG STATUS REPORT AS OF
April 21, 2011
                                 
    Nominal                   Dayrate        
Rig Name   WD*   Location   Status   Operator   Current Term   ($000s)   Start Date   Est. End Date
Australasia
                               
Ocean Patriot
  1,500’   Australia   Current Contract   Apache   three-well extension   between 230-270   mid Feb. 2011   late May 2011
 
      Australia   Maintenance   DODI           late May 2011   mid June 2011
 
      Australia   Future Contract   PTTEP   200 day term   mid 230’s   mid June 2011   early Jan. 2012
Ocean America
  5,500’   Australia   Resume Current Contract   Woodside   remainder term   mid 420’s   mid March 2011   late Sept. 2012
Ocean General
  3,000’   Vietnam   Current Contract   Premier Oil   first of three wells + three unpriced option   low 210’s   mid March 2011   late April 2011
 
      Indonesia   Future Contract   Premier Oil   remainder of three wells + one unpriced option   low 240’s   late April 2011   late July 2011
Ocean Rover
  8,000’   Indonesia   Current Contract   Murphy/Hess   est. six months   high 370’s   mid Dec. 2010   mid Aug. 2011
 
      Malaysia   Resume Current Contract   Murphy   resume two-year ext.   low 450’s   mid Aug. 2011   mid Jan. 2012


 

4

DIAMOND OFFSHORE DRILLING, INC. RIG STATUS REPORT AS OF
April 21, 2011
                                 
    Nominal               Current Term -   Dayrate        
Rig Name   WD*   Location   Status   Operator   Note (6)   ($000s)   Start Date   Est. End Date
Brazil (Note 5)
                               
Ocean Ambassador
  1,100’   Brazil   Current Contract   OGX   3-year term   low 260’s   mid Sept. 2009   mid Sept. 2012
Ocean Whittington
  1,650’   Brazil   Current Contract   Petrobras   5-year term (includes 50% of pot.15% bonus)   low 240’s   late Jan. 2009   late Sept. 2012
 
      Brazil   Five Year Survey   DODI           late Sept. 2011   late Dec. 2011
Ocean Concord
  2,300’   Brazil   Current Contract   Petrobras   5-year term (includes 50% of pot.15% bonus)   high 240’s   early Jan. 2008   early Jan. 2013
Ocean Lexington
  2,200’   Brazil   Current Contract   OGX   3-year term   mid 330’s   early Feb. 2010   early Feb. 2013
Ocean Yorktown
  2,850’   Brazil   Current Contract   Petrobras   5-year term (includes 50% of pot.15% bonus)   low 250’s   mid Aug. 2008   mid Aug. 2013
Ocean Yatzy
  3,300’   Brazil   Current Contract   Petrobras   5-year term (includes 50% of pot.10% bonus)   mid 250’s   early Oct. 2009   early Oct. 2014
 
      Brazil   Intermediate Survey   DODI           early July 2011   early Aug. 2011
Ocean Quest
  4,000’   Brazil   Remainder term at new blended rate   OGX   revised 2-year term   low 270’s   mid Feb. 2011   late Dec. 2011
 
      Brazil   Future Contract   OGX   1-year extension   low 250’s   late Dec. 2011   late Dec. 2012
Ocean Winner
  4,000’   Brazil   Current Contract   Petrobras   5-year term (includes 50% of pot.10% bonus)   mid 280’s   mid Oct. 2010   mid March 2015
Ocean Worker
  4,000’   Brazil   Current Contract   Petrobras   6-year term (includes 50% of pot.10% bonus)   mid 280’s   late Feb. 2009   late Feb. 2015
Ocean Alliance
  5,250’   Brazil   Current Contract   Petrobras   6-year term (includes 50% of pot.15% bonus)   mid 360’s   late July 2010   late June 2016
Ocean Star
  5,500’   Brazil   Current Contract   OGX   part one of 2-year term extension   low 310’s   mid Feb. 2011   late Dec. 2011
 
      Brazil   Future Contract   OGX   part two of 2-year term extension   low 270’s   late Dec. 2011   mid Feb. 2013
Ocean Baroness
  7,000’   Brazil   Current Contract   Petrobras   three-year term (includes 50% of pot. 5% bonus) + option to convert to 5 years during 1st year of operation   mid 280’s   early Sept. 2010   early Sept. 2013
Note (5) — All Brazilian contracts include unpriced options


 

5

DIAMOND OFFSHORE DRILLING, INC. RIG STATUS REPORT AS OF
April 21, 2011
                                 
    Nominal                   Dayrate        
Rig Name   WD*   Location   Status   Operator   Current Term   ($000s)   Start Date   Est. End Date
Brazil Cont. (Note 5)
                               
Ocean Courage
  10,000’   Brazil   Current Contract   Petrobras   five-year term (includes 50% of pot. 6% bonus)   400 — 410   mid Feb. 2010   mid Feb. 2015
Ocean Valor
  10,000’   Brazil   Current Contract   Petrobras   3-year term + option to convert to 5 years during 1st year   low 450’s   late Oct. 2010   late Oct. 2013
Drillship (1)
                               
Ocean Clipper
  7,875’   Brazil   Current Contract   Petrobras   5-year term (includes 50% of pot. 5% bonus)   mid 310’s   mid Dec. 2010   late July 2011
 
      Brazil   Upgrade for Petrobras   DODI           late July 2011   late Oct. 2011
 
      Brazil   Resume Future Contract   Petrobras   5-year term (includes 50% of pot. 5% bonus)   mid 310’s   late Oct. 2011   mid Dec. 2015
Note (5) — All Brazilian contracts include unpriced options    
International Jack-ups (7)
                               
Ocean Nugget
  300’ IC   Mexico   Resume Current Contract   Pemex   849 day term   mid 130’s   early Feb. 2010   late July 2011
 
      Mexico   Five Year Survey   DODI           late July 2011   early Sept. 2011
 
      Mexico   Future Contract   Pemex   430 day term   mid 80’s   early Aug. 2011   mid Oct. 2012
Ocean Summit
  300’ IC   Mexico   Current Contract   Pemex   288 day term   mid 80’s   late March 2011   late Dec. 2011
 
      Mexico   Five Year Survey   DODI           mid July 2011   late Aug. 2011
Ocean Scepter
  350’ IC   Brazil   Current Contract   OGX   one-year term + unpriced option   mid 130’s   early Feb. 2011   late March 2012
Ocean King
  300’ IC   Montenegro   Actively Marketing   DODI                
Ocean Sovereign
  300’ IC   Thailand   Current Contract   Salamander   Six firm + three unpriced option wells   low 70’s   early Feb. 2011   mid July 2011
 
      Thailand   Five Year Survey   DODI           mid July 2011   mid Oct. 2011
Ocean Heritage
  300’ IC   Suez Gulf   Current Contract   SUCO   six-month extension/w right to terminate after three months   high 50’s   early Feb. 2011   early July 2011
 
      Suez Gulf   Five Year Survey   DODI           early Oct. 2011   mid Nov. 2011
Ocean Spur
  300’ IC   Egypt   Current Contract   WEPCO   one-year extension + unpriced option   mid 60’s   late Oct. 2010   late Oct. 2011
NOTES: Rig utilization rates can be adversely impacted by additional downtime due to unscheduled repairs and maintenance, weather conditions and other factors.
On rig utilization, assume 95% for DP units, 96% for conventionally moored rigs, and 98% for jack-ups.
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.
*Nominal Water Depth — Nominal water depth (in ft.) reflects the rig’s current operating water depth capability. Often, rigs are capable of drilling, or have drilled, in greater water depths. In all cases, floating rigs are capable of working successfully at greater depths than their nominal depth. On a case by case basis, we may achieve a greater depth capacity by providing additional equipment.


 

6

DIAMOND OFFSHORE DRILLING, INC. RIG STATUS REPORT AS OF
April 21, 2011
EXPECTED 2011 DOWNTIME — 10 DAYS OR LONGER (Subject to Change*)
# Days
     
Total DT YTD = 168   EST ’11 Total = 718
                     
Rig   Q1 Actual     EST Q2     Comments
Shipyard — 5-Year Surveys/Maintenance
Nugget
            0     5-year survey/maintenance Q3
Clipper
            0     5-year survey/maint/upgrade Q3,Q4
Summit
    17       0     Maint. Q1, 5-year survey/maint. Q3
Saratoga
            0     5-year survey/maintenance Q3
Whittington
            0     5-year survey/maintenance Q3 Q4
Sovereign
            0     5-year survey/maintenance Q3 Q4
Heritage
            0     5-year survey/maintenance Q4
 
                   
Total 5-year Surveys
    17       0      
Intermediate Surveys/Acceptance Testing/Maintenance
Princess
            0     Intermediate survey/maintenance Q3
Yatzy
            0     Intermediate survey/maintenance Q3
Confidence
    47       0     Acceptance testing/maintenance
 
                   
Total Contract Prep.
    47       0      
Contract Prep/Maintenance/Other
Patriot
            21     Maintenance
Scepter
    31       0     Standby
America
    73       0     Maintenance
 
                   
Other Total
    104       21      
 
                   
Total
    168       21      
 
* Reflects currently planned downtime. Expect additional downtime in form of possible mobes for new jobs not yet contracted, possible acceptance testing at new jobs, and unanticipated maintenance. Survey start times may also be accelerated or delayed for various reasons.
Does Not Include Cold or Hot Stacked Rigs (see final page for cold stacked units).
2012 ESTIMATED SURVEY DOWNTIME = 694 days
Special Surveys: Endeavor (40); Patriot (50); Yorktown (60); Quest (60); Worker (60); Star (60); Baroness (60); Victory (60); King (35).
Intermediate Surveys/UWILD: Guardian (45); Columbia (12); Titan (12); Courage (10); Valor (10).
Other Prep/Maintenance: Confidence (60); Rover (60).
Survey Costs: During surveys, normal opex applies, plus additional costs.
Mobe Costs: Amortized mobe costs are generally offset by amortized mobe revenues.


 

7

DIAMOND OFFSHORE DRILLING, INC. RIG STATUS REPORT AS OF
April 21, 2011
                                     
    Nominal                            
Rig Name   WD   Location   Status   Operator           Order Date   Est. Delivery Date
RIGS UNDER CONSTRUCTION — Dynamically Positioned Drillships (2)
Ocean BlackHawk
    10,000’     South Korea   Hyundai Heavy Industries Co., Ltd.   DODI           Q1 2011   Q2 2013
Ocean BlackHornet
    10,000’     South Korea   Hyundai Heavy Industries Co., Ltd.   DODI           Q1 2011   Q4 2013
 
                                   
COLD STACKED RIGS (8) = (4 jack-ups, 4 semisubmersibles)
 
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   Stacked   DODI                
 
Ocean Voyager
    3,200’     GOM   Stacked   DODI                
 
Ocean Epoch
    3,000     Malaysia   Stacked   DODI                
 
Ocean New Era
    1,500’     GOM   Stacked   DODI                
 
Ocean Bounty
    1,500’     Malaysia   Stacked   DODI                
 
Forward-Looking Statements: The rig status report contains “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, future status, 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 any statements concerning legal proceedings and outcomes thereof, the impact of these and related events on our operations and revenues, the effects of claims of force majeure and the outcomes of discussions with operators with regard thereto, rigs being upgraded or to be upgraded, rigs under construction 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.