Diamond orders ultra-deepwater drillship

Total cost, including commissioning, spares

and

project management, is expected to be approximately $590 million

and

Diamond Offshore has also obtained from Hyundai a fixed-price option for the purchase of a second drillship which the company has the right to exercise at any time before the end of the first quarter of 2011.

The dynamically-positioned drillship will 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

CEO Larry Dickerson said: “The addition of a new drillship to our fleet is part of a continuing effort to enhance our ultra-deepwater capabilities at attractive capital costs. Including our opportunistic acquisitions of the

Ocean Courage

and

Ocean Valor

in 2009, we have now purchased, ordered or upgraded six 10,000-foot ultra-deepwater units over the last four years. New drillship construction costs have declined substantially from peak pricing. As a result, we believe this new drillship will provide returns consistent with our long history of value creation for the Company

and

our stockholders.”