Diamond Offshore Drilling Inc. has entered into a Letter of Intent (LOI) to utilize the 4th generation semisubmersible Ocean Valiant in the Gulf of Mexico for a period of one year commencing in mid-March 2006, with an option to extend the work at a mutually agreeable rate and term.

Maximum total revenue under the LOI for the initial one-year term would be approximately $111 million. The LOI is subject to customary conditions, including the execution of a definitive agreement, and actual revenues received could be reduced by various operating factors including utilization rates.

Diamond Offshore provides contract drilling services to the energy industry around the globe and is a leader in deepwater drilling. The Company's fleet of 44 offshore drilling rigs consists of 29 semisubmersibles, 14 jack-ups and one drillship