Pride International has reported income from continuing operations of $156.5 million, or $0.89 per diluted share, for the first quarter of 2009. Results for the first quarter of 2009 included a net, after-tax gain of $3.2 million, or $0.02 per diluted share, relating to the sale of non-strategic assets. The results compared to income from continuing operations of $135.4 million, or $0.76 per diluted share, in the year-ago quarter. Financial results for the first quarter of 2008 included an after-tax gain of $11.2 million, or $0.06 per diluted share, relating to the sale of Pride International’s interest in a land drilling joint venture.

The company has reported income from discontinued operations of $2.4 million, or $0.01 per diluted share, for the first quarter of 2009, compared with the income from discontinued operations of $104.6 million, or $0.58 per diluted share, in the year-ago quarter.

Cash and cash equivalents totaled $660 million, for the first quarter of 2009, while total debt was $716 million, with a debt-to-total capital ratio of 14%.

Cash flows from operating activities totaled $166 million in the first quarter of 2009, with capital expenditures of $214 million, of which $156 million pertained to the building of four ultra-deepwater drillships. Pride International continues to approximate total capital expenditures in 2009 of about $1.1 billion, with an estimated $720 million associated with the four drillships under construction.

Louis A. Raspino, president and chief executive officer of Pride International, stated, Although we faced a more challenging business environment, we recorded good financial results in the initial quarter of 2009. Utilization of our 14 floating rigs was 91% in the quarter compared to 96% in the final quarter of 2008 due primarily to the planned upgrade project for the semisubmersible Pride Brazil, which was completed on time and within budget and our decision to accelerate a planned shipyard program on the Pride Venezuela, commencing the project in March rather than April. We also experienced out-of-service time on the semisubmersible rig Pride North America for maintenance and repairs. It is expected the out-of-service time on the Pride Venezuela, which includes a survey and expanded work scope, will continue into early June 2009. In spite of the out-of-service time in the quarter, our floating rigs contributed over 70% to earnings before interest, taxes, depreciation and amortization (EBITDA), supporting the successful transition we have made over the past three years to a predominately floating rig company. These 14 rigs, which make up the majority of our estimated $8 billion revenue backlog, are expected to enjoy high utilization through 2009.

Commenting on current industry conditions, Raspino stated, The difficult environment that developed during late 2008 has continued in 2009 with further signs of weakness, evidenced by declines in worldwide fleet utilization, especially among jackups and midwater rigs, lower dayrates and subleasing of floating rig capacity. Customers have displayed a cautious approach to contracting rigs since the onset of the current economic crisis and the resulting capital market uncertainty. All segments of the offshore business are affected to some degree by the current slump in activity. Although the deepwater segment has a more durable position by virtue of the large contract backlogs established over the past 24 months, a more challenging near to intermediate-term pricing environment is possible, especially for conventionally moored deepwater units.

We are encouraged by the improvement in crude oil prices since the February 2009 lows and believe we are now experiencing a more sustainable trading range with growing expectations for long-term strengthening. At the same time, instability in the capital markets along with its impact on general economic conditions and energy demand continue to present uncertainty. We remain confident in the long-term fundamental strength of the offshore drilling industry, especially in the deepwater segment where geologic success rates, the application of new technologies and emerging deepwater frontiers are supporting a strong long-term growth outlook.

Deepwater Segment

Revenues from Pride International’s deepwater segment, comprises of two drillships and six semisubmersibles, were $218.5 million during the first quarter of 2009 compared to $238.0 million during the fourth quarter of 2008. Earnings from operations and EBITDA during the first quarter of 2009 were $105.5 million and $124.3 million, correspondingly. The results compared to fourth quarter 2008 earnings from operations and EBITDA of $136.5 million and $154.8 million, respectively. The decrease in segment financial performance was due mainly to a decline in utilization to 91% during the first quarter of 2009 compared to 98% during the fourth quarter of 2008, reflecting 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 the fourth quarter of 2008.

The long-term outlook for the deepwater segment remains positive, but is ever more challenging in the near-term. Limited rig availability exists in 2009 and 2010, particularly for rigs capable of operating in water depths above 7,000 feet and possessing advanced technical capabilities. Recent contract grants for this advanced class of rig point out the support for dayrates in excess of $500,000 due in part to numerous and increasingly complicated multi-year field development programs in the US Gulf of Mexico, Brazil and Angola. Also, there is growing customer interest in emerging regions, such as India and the Black Sea, as well as impressive geologic success, with the pre-salt formation in Brazil a meaningful potential source for incremental rig demand. However, the segment is not insulated in 2009 from lower spending patterns by some customers. In fact, exploration drilling programs are anticipated to decline in the near-term, and there have been signs of subleasing activity beginning to emerge, although the subleasing of contracted rig capacity has been most pronounced to date in the older generation, moored class of deepwater rigs. Customer inquiries for deepwater rigs have increased modestly in the first four months of 2009, relative to levels experienced during the fourth quarter of 2008. The inquiries are anticipated to result in further contract awards during the year as customers continue to evaluate deepwater rig needs for 2010 and beyond when incremental field development programs are anticipated to begin. Pride International has strong utilization in the deepwater segment already contracted for the next two years with 96% of available rig days contracted through the last three quarters of 2009 and 87% in 2010.

Midwater Segment

Revenues from Pride International’s six midwater semisubmersibles were $131.8 million during the first quarter of 2009 compared to $145.1 million in the fourth quarter of 2008. Utilization during the first quarter of 2009 was 92% compared to 94% during the fourth quarter of 2008, and average daily revenues were $265,000 compared to $279,500 over the same comparative period. The lower utilization and average daily revenues were due chiefly to out-of-service time on the Pride Venezuela and lower bonus earned on the Pride Mexico. Earnings from operations in the first quarter of 2009 were $59.6 million compared to $72.0 million during the fourth quarter of 2008, while EBITDA was $71.1 million compared to $83.0 million over the same comparative period.