According to a press release from Calyon Securities Inc. in late April, not all of the drilling contractors are in hot water. Diamond Offshore (DO), which invests heavily in deepwater assets, will buck the trend. The company reported 1Q 2009 earnings per share of $2.51, well above Calyon’s estimate of $2.22. According to Calyon, cost savings complemented in-line revenues and resulted in the earnings surprise. In its press release, Calyon said, “We remain bullish on deepwater drillers such as DO, which have good earnings visibility.” Floater activity is moderating, Calyon said, and bidding activity in the US Gulf of Mexico (GoM) market remains weak even in the mid-water segment. Internationally, though, the duration of the term contracts remains stable. Deepwater demand persists in West Africa, Brazil, and Mexico, so opportunities outside the US GoM remain. Of course, it comes as no surprise that the jackup market is weak, particularly in the GoM, but since DO has no newbuilds under construction, the company expects $470 million in capex in 2009 to be spent primarily on maintenance. Diamond is cash rich, a situation, Calyon said, that should help DO upgrade its older rigs if opportunities arise. Pride International Inc. also had a good first quarter, exceeding by nearly $9 million the same period last year. Revenues for 1Q 2009 totaled $549.3 million compared to $540.1 million during 1Q 2008. According to Louis A. Raspino, president and CEO, “Although we faced a more challenging business environment, we recorded good financial results in the initial quarter of 2009.” The difficult environment that developed in late 2008 has continued in 2009, he said, with further signs of weakness, evidenced by declines in worldwide fleet utilization, especially among jackups and mid-water rigs, lower day rates and subleasing of floating rig capacity. As with DO, the good news for Pride comes from the company’s deepwater assets, which consist of two drillships and six semisubmersibles. Deepwater revenues were down somewhat, totaling $218.5 million in 1Q 2009 compared to $238 million in 4Q 2008. Pride attributed the reduction in segment financial performance to a decline in utilization to 91% in 1Q 2009 compared to 98% in 4Q 2008, which reflects 45 days of out-of-service time on the semisubmersible Pride Brazil to complete a planned upgrade, and 10 days on the Pride North America for repairs and maintenance. Both rigs returned to service during the first quarter. Segment average daily revenues improved to $334,900 in the first quarter of 2009 compared to $331,300 in 4Q 2008. Though the business climate continues to be challenging, Raspino said, the long-term outlook for the deepwater segment remains positive. So even though day rates have tumbled and a lot of jackups have been stacked, deepwater continues to sustain contractors that have invested in that segment of the industry.