Form 8-K DIAMOND OFFSHORE DRILLIN For: May 04

 

 

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

 

FORM 8-K

 

 

CURRENT REPORT

PURSUANT TO SECTION 13 OR 15(d) OF THE

SECURITIES EXCHANGE ACT OF 1934

Date of Report: (Date of earliest event reported): May 4, 2015

 

 

Diamond Offshore Drilling, Inc.

(Exact name of registrant as specified in its charter)

 

 

 

Delaware		1-13926		76-0321760
(State or other jurisdiction of incorporation)		(Commission file number)		(I.R.S. Employer Identification No.)

15415 Katy Freeway

Houston, Texas 77094

(Address of principal executive offices, including Zip Code)

(281) 492-5300

(Registrant’s telephone number, including area code)

 

 

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

 

¨	Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

 

¨	Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

 

¨	Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

 

¨	Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

 

 

 

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Item 2.02. Results of Operations and Financial Condition

On May 4, 2015, Diamond Offshore Drilling, Inc. (the “Company”) issued a press release announcing its financial results for the fiscal quarter ended March 31, 2015. A copy of the press release is furnished herewith as Exhibit 99.1.

Item 7.01. Regulation FD Disclosure

A conference call to discuss the Company’s earnings results has been scheduled for 7:30 a.m. Central Time on May 4, 2015. The information for accessing the conference call is included in the press release.

The Company hereby incorporates by reference into this Item 7.01 the summary report of the status, as of May 4, 2015, of the Company’s offshore drilling rigs attached as Exhibit 99.2.

The information contained in Items 2.02 and 7.01 and Exhibits 99.1 and 99.2 to this report shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), and shall not be incorporated by reference into any previous or future registration statement filed under the Securities Act of 1933, as amended (the “Securities Act”), unless specifically identified therein as being incorporated by reference.

Statements in the press release furnished as Exhibit 99.1 to this report and in the summary report furnished as Exhibit 99.2 to this report and statements made during the conference call described in this report that are not historical facts are “forward-looking statements” within the meaning of Section 27A of the Securities Act and Section 21E of the Exchange Act. Such statements include, but are not limited to, statements concerning drilling rig deliveries, operations and timing; contract effectiveness, effective dates and estimated duration; plans regarding retirement and scrapping of drilling rigs; future impairments; future dividends; expectations of future backlog, revenue, operating costs and performance; future liquidity, financial condition, market conditions, commodity prices and strategic opportunities; revenue expected to result from backlog; future credit ratings; future dayrates, future status, start and end dates and future contracts and availability; future contract opportunities and termination rights; contract noncompliance by customers and other third parties; letters of intent; utilization, surveys, downtime and other aspects of the Company’s drilling rigs; statements concerning customer discussions and outcomes thereof and the impact of these and related events on the Company’s operations and revenues; rigs being upgraded or to be upgraded and rigs under construction; and other statements that are not of historical fact. Forward-looking statements are inherently uncertain and subject to a variety of assumptions, risks and uncertainties that could cause actual results to differ materially from those currently anticipated or expected by management of the Company. A discussion of the 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 report are urged to review those reports carefully when considering these forward-looking statements. These risk factors include, among others, risks associated with worldwide demand for drilling services, level of activity in the oil and gas industry, renewing or replacing expired or terminated contracts, contract cancellations and terminations, maintenance and realization of backlog, competition and industry fleet capacity, impairments and retirements, declaration of dividends, operating risks, changes in tax laws and

 

2

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rates, regulatory initiatives and compliance with governmental regulations, construction of new builds, casualty losses and various other factors, many of which are beyond the Company’s control. Given these risk factors, investors and analysts should not place undue reliance on forward-looking statements. Each forward-looking statement speaks only as of the date of such statement, and 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.

Item 9.01. Financial Statements and Exhibits

(d) Exhibits.

 

Exhibit number		Description
99.1		Press Release dated May 4, 2015
99.2		Rig Status Report as of May 4, 2015

 

3

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SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

 

Date: May 4, 2015				DIAMOND OFFSHORE DRILLING, INC.
				By:		/s/ DAVID L. ROLAND
						David L. Roland
						Senior Vice President, General Counsel and Secretary

 

4

Exhibit 99.1

 

		Contact: Darren Daugherty Director, Investor Relations (281) 492-5370

Diamond Offshore Announces First Quarter 2015 Results

 

•

Reports loss of $1.86 per share

 

•

Records impairment charge of $319 million after tax, or $2.33 per share

 

•

Records restructuring charge of $4 million after tax, or $0.03 per share

 

•

Declares Regular Cash Dividend of $0.125 per share

 

•

Announces plans to scrap three mid-water semisubmersibles

HOUSTON, May 4, 2015 — Diamond Offshore Drilling, Inc. (NYSE: DO) today reported a net loss of $256 million, or $1.86 per share, in the first quarter of 2015, compared to net income of $146 million, or $1.05 per share, in the first quarter of 2014. Revenues in the first quarter of 2015 were $620 million, compared to revenues of $709 million in the first quarter of 2014.

Results for the quarter included a non-cash charge of $319 million after tax, or $2.33 per share, associated with the impairment of eight drilling units, three of which are to be retired and scrapped. The units to be retired are the mid-water semisubmersibles Ocean Saratoga, Ocean Worker and Ocean Yorktown, which are all cold stacked in the U.S. Gulf of Mexico. Other rigs included in the impairment group are the mid-water semisubmersibles Ocean Ambassador, Ocean General, Ocean Lexington, Ocean Nomad and the drillship Ocean Clipper.

The Company also recognized a charge during the quarter of $4 million after tax, or $0.03 per share, related to restructuring and employee separation-related costs.

“We have continued to implement cost savings measures while maintaining our focus on safe operations and delivering performance for our clients,” said Marc Edwards, President and Chief Executive Officer. “Our first-quarter safety statistics were the best that we have recorded.”

“During the second quarter, our next two newbuild drillships will begin working in the Gulf of Mexico, and the yard will complete our fourth drillship, which will also be headed to the U.S., where all four of drillships will work on term contracts extending into 2019 or beyond,” added Mr. Edwards.

In addition, the Company announced that it has declared a regular quarterly dividend of $0.125 per share, payable on June 1, 2015 to shareholders of record as of May 15, 2015.

CONFERENCE CALL

A conference call to discuss Diamond Offshore’s earnings results has been scheduled for 7:30 a.m. CDT today. A live webcast of the call will be available online on the Company’s website, www.diamondoffshore.com. Those interested in participating in the question and answer session should dial 800-247-9979 or 973-321-1100, for international callers. The conference ID number is 22913137. An online replay will also be available on www.diamondoffshore.com following the call.

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ABOUT DIAMOND OFFSHORE

Diamond Offshore is a leader in offshore drilling, providing contract drilling services to the energy industry around the globe with a total fleet of 35 offshore drilling rigs, including two rigs under construction. Diamond Offshore’s fleet consists of 24 semisubmersibles, one of which is under construction, five dynamically positioned drillships, one of which is under construction, and six jack-ups. Additional information about the Company and access to the Company’s SEC filings are available at www.diamondoffshore.com. Diamond Offshore is owned 53% by Loews Corporation (NYSE: L).

FORWARD-LOOKING STATEMENTS

Statements contained in this press release or made during the above conference call that are not historical facts are “forward-looking statements” within the meaning of the federal securities laws. Such statements include, but are not limited to, statements concerning drilling rig deliveries, operations and timing; contract effectiveness, effective dates and estimated duration; plans regarding retirement and scrapping of drilling rigs; future impairments; future dividends; expectations of future backlog, revenue, operating costs and performance; future liquidity, financial condition, market conditions, commodity prices and strategic opportunities; revenue expected to result from backlog; future credit ratings; future dayrates, future status, start and end dates and future contracts and availability; future contract opportunities and termination rights; contract noncompliance by customers and other third parties; utilization, surveys, downtime and other aspects of the Company’s drilling rigs; statements concerning customer discussions and outcomes thereof and the impact of these and related events on the Company’s operations and revenues; rigs being upgraded or to be upgraded and rigs under construction; and other statements that are not of historical fact. Forward-looking statements are inherently uncertain and subject to a variety of assumptions, risks and uncertainties that could cause actual results to differ materially from those anticipated or 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 press 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 at www.diamondoffshore.com. These risk factors include, among others, risks associated with worldwide demand for drilling services, level of activity in the oil and gas industry, renewing or replacing expired or terminated contracts, contract cancellations and terminations, maintenance and realization of backlog, competition and industry fleet capacity, impairments and retirements, declaration of dividends, operating risks, changes in tax laws and rates, regulatory initiatives and compliance with governmental regulations, construction of new builds, casualty losses, and various other factors, many of which are beyond the Company’s control. Given these risk factors, investors and analysts should not place undue reliance on forward-looking statements. Each forward-looking statement speaks 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.

# # # #

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DIAMOND OFFSHORE DRILLING, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF OPERATIONS

(Unaudited)

(In thousands, except per share data)

 

		Three Months Ended March 31,
		2015				2014
Revenues:
Contract drilling		$	599,577			$	685,308
Revenues related to reimbursable expenses			20,479				24,116
Total revenues			620,056				709,424
Operating expenses:
Contract drilling, excluding depreciation			350,658				369,790
Reimbursable expenses			20,092				23,666
Depreciation			137,299				107,011
General and administrative			17,452				22,827
Impairment of assets			358,528				—
Restructuring and separation costs			6,168				—
Gain on disposition of assets			(611	)			(147	)
Total operating expenses			889,586				523,147
Operating (loss) income			(269,530	)			186,277
Other income (expense):
Interest income			583				408
Interest expense			(23,982	)			(18,155	)
Foreign currency transaction gain (loss)			5,590				(1,178	)
Other, net			221				327
(Loss) income before income tax (benefit) expense			(287,118	)			167,679
Income tax benefit (expense)			31,409				(21,869	)
Net (loss) income		$	(255,709	)		$	145,810
(Loss) income per share		$	(1.86	)		$	1.05
Weighted average shares outstanding:
Shares of common stock			137,151				138,469
Dilutive potential shares of common stock			—				4
Total weighted average shares outstanding			137,151				138,473

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DIAMOND OFFSHORE DRILLING, INC. AND SUBSIDIARIES

RESULTS OF OPERATIONS

(Unaudited)

(In thousands)

 

		Three Months Ended
		Mar 31,				Dec 31,				Mar 31,
		2015				2014				2014
REVENUES
Floaters:
Ultra-Deepwater		$	251,396			$	285,991			$	205,794
Deepwater			138,770				115,777				146,559
Mid-water			176,357				231,933				285,979
Total Floaters			566,523				633,701				638,332
Jack-ups			33,054				40,675				46,976
Total Contract Drilling Revenue		$	599,577			$	674,376			$	685,308
Revenues Related to Reimbursable Expenses		$	20,479			$	945			$	24,116
CONTRACT DRILLING EXPENSE
Floaters:
Ultra-Deepwater		$	154,539			$	133,103			$	123,530
Deepwater			63,675				66,093				71,949
Mid-water			99,320				119,763				134,046
Total Floaters			317,534				318,959				329,525
Jack-ups			21,570				25,268				28,029
Other			11,554				14,428				12,236
Total Contract Drilling Expense		$	350,658			$	358,655			$	369,790
Reimbursable Expenses		$	20,092			$	698			$	23,666
OPERATING INCOME
Floaters:
Ultra-Deepwater		$	96,857			$	152,888			$	82,264
Deepwater			75,095				49,684				74,610
Mid-water			77,037				112,170				151,933
Total Floaters			248,989				314,742				308,807
Jack-ups			11,484				15,407				18,947
Other			(11,554	)			(14,428	)			(12,236	)
Reimbursable expenses, net			387				247				450
Depreciation			(137,299	)			(131,712	)			(107,011	)
General and administrative expense			(17,452	)			(19,923	)			(22,827	)
Bad debt recovery			—				—				—
Gain (loss) on disposition of assets			611				(2,230	)			147
Impairment of assets			(358,528	)			—				—
Restructuring and separation costs			(6,168	)			—				—
Total Operating (Loss) Income		$	(269,530	)		$	162,103			$	186,277

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DIAMOND OFFSHORE DRILLING, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED BALANCE SHEETS

(Unaudited)

(In thousands)

 

		March 31,				December 31,
		2015				2014
ASSETS
Current assets:
Cash and cash equivalents		$	184,775			$	233,623
Marketable securities			14,016				16,033
Accounts receivable, net of allowance for bad debts			445,685				463,862
Prepaid expenses and other current assets			199,321				185,541
			843,797				899,059
Drilling and other property and equipment, net of accumulated depreciation			6,574,142				6,945,953
Other assets			117,890				176,277
Total assets		$	7,535,829			$	8,021,289
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current portion of long-term debt		$	249,979			$	249,962
Other current liabilities			521,079				606,684
Long-term debt			1,994,587				1,994,526
Deferred tax liability			413,009				530,394
Other liabilities			177,329				188,160
Stockholders’ equity			4,179,846				4,451,563
Total liabilities and stockholders’ equity		$	7,535,829			$	8,021,289

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DIAMOND OFFSHORE DRILLING, INC. AND SUBSIDIARIES

AVERAGE DAYRATES AND UTILIZATION

(Dayrate in thousands)

 

		First Quarter 2015												Fourth Quarter 2014												First Quarter 2014
		Average Dayrate (1)				Utilization (2)				Operational Efficiency (3)				Average Dayrate (1)				Utilization (2)				Operational Efficiency (3)				Revised Average Dayrate (4)				Utilization (2)				Operational Efficiency (3)
Ultra-Deepwater Floaters		$	497				51	%			81.5	%		$	493				66	%			90.2	%		$	401				66	%			95.3	%
Deepwater Floaters		$	486				45	%			95.1	%		$	431				48	%			97.3	%		$	427				64	%			96.0	%
Mid-Water floaters		$	266				49	%			94.1	%		$	270				55	%			96.8	%		$	278				64	%			94.4	%
Jack-ups		$	92				66	%			99.4	%		$	96				77	%			99.5	%		$	94				79	%			99.9	%
Fleet Total											91.2	%											95.5	%											95.9	%

 

(1)

Average dayrate is defined as contract drilling revenue for all of the specified rigs in our fleet per revenue earning day. A revenue earning day is defined as a 24-hour period during which a rig earns a dayrate after commencement of operations and excludes mobilization, demobilization and contract preparation days.

(2)

Utilization is calculated as the ratio of total revenue-earning days divided by the total calendar days in the period for all specified rigs in our fleet—including cold-stacked rigs, but excluding rigs under construction. As of May 4, 2015, one deepwater and four mid-water semisubmersible rigs and three jack-up rigs were cold stacked.

(3)	Operational efficiency is calculated as the ratio of total revenue-earning days divided by the sum of total revenue-earning days plus the number of days (or portions thereof) associated with unanticipated equipment downtime.

(4)	Average dayrate reported in prior periods has been revised to conform to current presentation.

Exhibit 99.2

 

		Diamond Offshore Drilling, Inc. Rig Status Report May 4, 2015 Updated information noted in bold print

RECENT COMMITMENTS (See Body of Report For Contract Details)

Ocean America: One-well

 

Water 1 Depth

Year 3

Contract Dayrate

Estimated

Estimated

Planned Downtime 4 (For Periods Lasting >10 days)

Rig Name

(feet)

Type 2

Built

Location

Operator

(USD)

Start Date

End Date

Status

2Q15 E

3Q15 E

4Q15 E

Comments

Totals:

370

222

60

Gulf of Mexico - U.S.

Ocean BlackHawk

12,000

DS 15K DP

2014

US GOM

Anadarko

495,000

late May 2014

mid Jun 2019

5-year term + unpriced option

Ocean BlackHornet

12,000

DS 15K DP

2014

US GOM

Anadarko

495,000

mid Apr 2015

mid Apr 2020

5-year term + unpriced option

14

Customer acceptance

Ocean BlackRhino

12,000

DS 15K DP

2014

S. Korea

—

—

mid Dec 2014

late May 2015

Mobe to GOM; customer acceptance

60

Mobe, customer acceptance

US GOM

Murphy

550,000

late May 2015

late Feb 2016

265-day term; prior to commencement of contract, may be converted into term lasting until Jun 2016

US GOM

—

—

late Feb 2016

Q4 2016

Actively marketing

US GOM

Hess

400,000

Q4 2016

Q4 2019

3-year Term

Gulf of Mexico - Mexico

Ocean Nugget (note 5)

300

JU IC

1976

Mexico

Pemex

97,000

early Jul 2013

mid Aug 2016

1,136-day term

Ocean Summit (note 5)

300

JU IC

1972

Mexico

Pemex

85,999

mid Sep 2012

late May 2015

985-day term

Ocean Scepter

350

JU 15K IC

2008

Mexico

Pemex

158,000

early Jun 2014

early Mar 2016

639-day term

Ocean Ambassador (note 5)

1,100

SS

1975

Mexico

Pemex

211,445

early Mar 2014

early Mar 2016

730-day term

North Sea / Mediterranean / W. Africa

Ocean Guardian

1,500

SS 15K

1985

UK

Shell

352,000

mid Jan 2015

mid Jul 2015

Continuation of 1-year extension

40

5-Year Special Survey

Ocean Patriot

3,000

SS 15K

1983

UK

Shell

400,511

late Oct 2014

late Oct 2017

3-year term

Ocean Valiant

5,500

SS 15K

1988

UK

Premier Oil

165,000

early Apr 2015

early Jun 2015

Contract prep

UK

Premier Oil

320,000

early Jun 2015

late Oct 2015

Two wells + 4 x 1-well options

Ocean Endeavor

10,000

SS 15K

2007

Black Sea

ExxonMobil

521,665

late Jun 2014

late Dec 2015

18-month term (dayrate incl. 50% of potential 6.6% bonus) + 6 x 6-month unpriced options.

Ocean Confidence

10,000

SS 15K DP

2001

Canary Islands

—

—

late Apr 2014

mid May 2015

Maintenance

45

Maintenance

—

—

—

—

Actively marketing

 

Please refer to accompanying disclaimer as well as Diamond Offshore’s 10-K and 10-Q filings with the SEC.		Page 1 of 3

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Water 1 Depth

Year 3

Contract Dayrate

Estimated

Estimated

Planned Downtime 4 (For Periods Lasting >10 days)

Rig Name

(feet)

Type 2

Built

Location

Operator

(USD)

Start Date

End Date

Status

2Q15 E

3Q15 E

4Q15 E

Comments

Australasia

Ocean Quest

4,000

SS 15K

1973

Malaysia

—

—

early May 2015

early July 2015

Actively marketing

early July 2015

late Aug 2015

Mobe; helideck upgrade

60

Helideck upgrade

Ocean America

5,500

SS 15K

1988

Australia

Chevron

475,000

late Nov 2013

late May 2015

18-month term

Australia

Apache

265,000

late May 2015

late Jul 2015

One well

Ocean Apex

6,000

SS 15K

2014

Malaysia

—

—

—

—

Actively marketing

Ocean Rover

8,000

SS 15K

2003

Malaysia

Murphy

465,000

early Mar 2014

early Mar 2016

2-year term

Ocean Monarch

10,000

SS 15K

2008

Malaysia

—

—

mid Sep 2014

early Jun 2015

Mobe; contract prep; customer acceptance

65

Mobe, contract prep

Australia

Apache Corporation

410,000

early Jun 2015

early Oct 2016

18-month term + 1 year option

Australia

Apache Corporation

350,000

early Oct 2016

early Dec 2016

(2 months at reduced rate) on 18-month term + 1 year option

Brazil / S. America

Ocean Lexington (note 5)

2,200

SS

1976

Trinidad

BG Intl / Centrica

300,000

early Nov 2013

late Jun 2015

Six wells

US GOM

BG Intl / Centrica

300,000

late Jun 2015

mid Jul 2015

Prep and demobe to US GOM

US GOM

—

—

mid Jul 2015

mid Sep 2015

Prep, 5-year special survey, and mobe to Mexico

0

60

Prep, 5-year survey, mobe

Mexico

Pemex

160,000

mid Sep 2015

late Mar 2018

Firm term

Ocean Alliance

5,250

SS 15K DP

1988

Brazil

Petrobras

367,089

late Jul 2010

mid Jun 2016

6-year term (incl. 50% of potential 15% bonus)

15

Maintenance

Ocean Victory

5,500

SS 15K

1997

Trinidad

BP

398,000

early May 2015

early May 2017

2-year term + 1-year unpriced option

30

Mobe to Trinidad

Ocean Onyx

6,000

SS 15K

2014

Trinidad

BG International

390,000

mid Apr 2015

late Jun 2015

One well

10

Customer acceptance

Trinidad

BG International

360,000

late Jun 2015

late Aug 2015

One well

Ocean Clipper

7,875

DS 15K DP

1997

Brazil

Petrobras

312,625

late Jan 2015

early Dec 2015

Remainder of 5-year term contract (incl. 50% of potential 5% bonus) + unpriced option

Ocean Baroness (note 6)

8,000

SS 15K

2002

Brazil

Petrobras

276,750

early Sep 2011

early Sep 2015

Remainder of 5-year term (incl. 50% of potential 5% bonus)

Brazil

Petrobras

310,000

early Sep 2015

early Sep 2018

3-year extension

Ocean Courage

10,000

SS 15K DP

2009

Brazil

Petrobras

567,000

late Feb 2015

late Oct 2015

3-year extension + $112,000 uplift (incl. 50% of potential 6% bonus)

10

Maintenance

Brazil

Petrobras

455,000

late Oct 2015

late Feb 2018

3-year extension

Ocean Valor

10,000

SS 15K DP

2009

Brazil

Petrobras

440,000

early Sep 2011

mid Oct 2015

Remainder of 5-year term

Brazil

Petrobras

455,000

mid Oct 2015

mid Oct 2018

3-year extension

Rigs Under Construction

Ocean BlackLion

12,000

DS 15K DP

2015

S. Korea

—

—

Q2 2012

Q4 2015

Hyundai shipyard; commissioning; mobe; acceptance

91

92

60

Mobe, acceptance testing

US GOM

Hess

400,000

Q4 2015

Q4 2019

4-year Term

Ocean GreatWhite

10,000

SS 15K DP

2016

S. Korea

—

—

Q3 2013

H2 2016

Hyundai shipyard; commissioning; mobe; acceptance

Australia

BP

585,000*

H2 2016

H2 2019

3-year term + 2 x 1-year priced options (@ 585,000 + escalations); *Dayrate to increase for customer-requested equipment additions

 

Please refer to accompanying disclaimer as well as Diamond Offshore’s 10-K and 10-Q filings with the SEC.		Page 2 of 3

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		Water 1 Depth						Year 3						Contract Dayrate		Estimated		Estimated				Planned Downtime 4 (For Periods Lasting >10 days)
Rig Name		(feet)				Type 2		Built		Location		Operator		(USD)		Start Date		End Date		Status		2Q15 E		3Q15 E		4Q15 E		Comments
COLD STACKED
Ocean King			300			JU IC		1973		US GOM		—		—		—		—		Stacked
Ocean Titan			350			JU 15K IC		1974		US GOM		—		—		—		—		Stacked
Ocean Spur			300			JU IC		1981		Malaysia		—		—		—		—		Prepare for cold stacking
Ocean Nomad (note 7)			1,200			SS		1975		UK		—		—		—		—		Stacked
Ocean Princess			1,500			SS 15K		1975		UK		—		—		—		—		Stacked
Ocean Vanguard			1,500			SS 15K		1982		UK		—		—		—		—		Stacked
Ocean General			3,000			SS		1976		Malaysia		—		—		—		—		Stacked
Ocean Star			5,500			SS 15K		1997		US GOM		—		—		—		—		Stacked
RETIRED
Ocean Winner			4,000			SS		1976		Brazil		—		—		—		—		Prep for exportation, scrapping
Ocean Saratoga			2,200			SS		1976		US GOM		—		—		—		—		Stacked
Ocean Yorktown			2,850			SS		1976		US GOM		—		—		—		—		Stacked
Ocean Worker			4,000			SS		1982		US GOM		—		—		—		—		Stacked

NOTES

(1.) Water Depth refers to the rig’s rated operating water depth capability. Often, rigs are capable of drilling or have drilled in greater water depths.

(2.) Rig Type and capabilities: JU=Jack-up; SS=Semisubmersible; DS=Drillship; 15K=15,000 PSI Well-Control System; DP=Dynamically Positioned Rig; IC=Independent-Leg Cantilevered Rig.

(3.) Year Built represents when rig was (or is expected to be) built and originally placed in service or year redelivered with significant enhancements that enabled the rig to be classified within a different floater category than when originally constructed.

(4.) Planned Downtime only includes downtime periods that as of this report date are, or have been, planned and estimable and do not necessarily reflect actual downtime experienced. Additional downtime may be experienced in the form of possible mobes for new jobs not yet contracted, possible acceptance testing at new jobs, and unplanned maintenance and repairs. Survey start times may also be accelerated or delayed for various reasons.

(5.) A representative of PEMEX has verbally informed us of PEMEX’s intention to exercise its contractual right to terminate its drilling contracts on the Ocean Ambassador, the Ocean Nugget and the Ocean Summit, and to cancel its drilling contract on the Ocean Lexington. As of the date of this report, we have not received written notice of termination or cancellation. We are in discussions with PEMEX regarding the rigs.

(6.) Petrobras has notified us that it has a right to terminate the drilling contract on the Ocean Baroness and has verbally informed us that it does not intend to continue to use the rig. We are in discussions with Petrobras regarding the rig.

(7.) Our subsidiary has received notice of termination of its drilling contract from Dana Petroleum (E&P) Limited, the customer for the Ocean Nomad. The drilling contract was estimated to conclude in accordance with its terms in August 2015. We do not believe that Dana had a valid basis for terminating the contract, and we intend to defend our rights under the contract.

General Notes

Average Utilization: Assume rates of 92% for DP units, 96% for conventionally moored rigs, and 98% for jack-ups. Rig utilization rates can be adversely impacted by additional downtime due to unscheduled repairs and maintenance, and other factors.

Options should be assumed to be unpriced unless otherwise indicated.

Dayrates exclude amortized revenue related to amounts earned for certain activities, such as mobe, demobe, contract preparation, etc.

Survey Costs: During surveys, normal operating expense will be incurred, plus additional costs.

US GOM=U.S. Gulf of Mexico

 

Please refer to accompanying disclaimer as well as Diamond Offshore’s 10-K and 10-Q filings with the SEC.		Page 3 of 3