Ownership Submission
FORM 4
Check this box if no longer subject to Section 16. Form 4 or Form 5 obligations may continue. See Instruction 1(b).
UNITED STATES SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

STATEMENT OF CHANGES IN BENEFICIAL OWNERSHIP OF SECURITIES

Filed pursuant to Section 16(a) of the Securities Exchange Act of 1934, Section 17(a) of the Public Utility Holding Company Act of 1935 or Section 30(h) of the Investment Company Act of 1940
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(Print or Type Responses)
1. Name and Address of Reporting Person *
KRENEK GARY T
  2. Issuer Name and Ticker or Trading Symbol
DIAMOND OFFSHORE DRILLING INC [DO]
5. Relationship of Reporting Person(s) to Issuer
(Check all applicable)
_____ Director _____ 10% Owner
__X__ Officer (give title below) _____ Other (specify below)
Senior Vice President-CFO
(Last)
(First)
(Middle)
15415 KATY FREEWAY, SUITE 100
3. Date of Earliest Transaction (Month/Day/Year)
05/21/2007
(Street)

HOUSTON, TX 77094
4. If Amendment, Date Original Filed(Month/Day/Year)
6. Individual or Joint/Group Filing(Check Applicable Line)
_X_ Form filed by One Reporting Person
___ Form filed by More than One Reporting Person
(City)
(State)
(Zip)
Table I - Non-Derivative Securities Acquired, Disposed of, or Beneficially Owned
1.Title of Security
(Instr. 3)
2. Transaction Date (Month/Day/Year) 2A. Deemed Execution Date, if any (Month/Day/Year) 3. Transaction Code
(Instr. 8)
4. Securities Acquired (A) or Disposed of (D)
(Instr. 3, 4 and 5)
5. Amount of Securities Beneficially Owned Following Reported Transaction(s)
(Instr. 3 and 4)
6. Ownership Form: Direct (D) or Indirect (I)
(Instr. 4)
7. Nature of Indirect Beneficial Ownership
(Instr. 4)
Code V Amount (A) or (D) Price
Common Stock 05/21/2007   M   343 A $ 83.44 343 D  
Common Stock 05/21/2007   F   310 D $ 92.545 33 D  
Common Stock 05/21/2007   S   33 D $ 94.52 0 D  
Common Stock 05/21/2007   M   343 A $ 71.87 343 D  
Common Stock 05/21/2007   F   267 D $ 92.545 76 D  
Common Stock 05/21/2007   S   76 D $ 94.52 0 D  
Common Stock 05/21/2007   M   343 A $ 79.77 343 D  
Common Stock 05/21/2007   F   296 D $ 92.545 47 D  
Common Stock 05/21/2007   S   47 D $ 94.52 0 D  
Common Stock               2,093.5111 I By 401k Plan (1)

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Table II - Derivative Securities Acquired, Disposed of, or Beneficially Owned
(e.g., puts, calls, warrants, options, convertible securities)
1. Title of Derivative Security
(Instr. 3)
2. Conversion or Exercise Price of Derivative Security 3. Transaction Date (Month/Day/Year) 3A. Deemed Execution Date, if any (Month/Day/Year) 4. Transaction Code
(Instr. 8)
5. Number of Derivative Securities Acquired (A) or Disposed of (D)
(Instr. 3, 4, and 5)
6. Date Exercisable and Expiration Date
(Month/Day/Year)
7. Title and Amount of Underlying Securities
(Instr. 3 and 4)
8. Price of Derivative Security
(Instr. 5)
9. Number of Derivative Securities Beneficially Owned Following Reported Transaction(s)
(Instr. 4)
10. Ownership Form of Derivative Security: Direct (D) or Indirect (I)
(Instr. 4)
11. Nature of Indirect Beneficial Ownership
(Instr. 4)
Code V (A) (D) Date Exercisable Expiration Date Title Amount or Number of Shares
Stock Appreciation Right $ 83.44 05/21/2007   M     343 04/27/2007(2) 07/03/2016 Common Stock 343 $ 0 1,032 (3) D  
Stock Appreciation Right $ 71.87 05/21/2007   M     343 04/27/2007(2) 10/02/2016 Common Stock 343 $ 0 1,032 (3) D  
Stock Appreciation Right $ 79.77 05/21/2007   M     343 04/27/2007(2) 12/31/2016 Common Stock 343 $ 0 1,032 (3) D  

Reporting Owners

Reporting Owner Name / Address Relationships
 Director  10% Owner  Officer  Other
KRENEK GARY T
15415 KATY FREEWAY
SUITE 100
HOUSTON, TX 77094
      Senior Vice President-CFO  

Signatures

 /s/ William C. Long Attorney-in-Fact for Gary T. Krenek   05/23/2007
**Signature of Reporting Person Date

Explanation of Responses:

* If the form is filed by more than one reporting person, see Instruction 4(b)(v).
** Intentional misstatements or omissions of facts constitute Federal Criminal Violations. See 18 U.S.C. 1001 and 15 U.S.C. 78ff(a).
(1) Based on a plan statement as of May 21, 2007.
(2) The stock appreciation rights vested on April 27, 2007.
(3) The stock appreciation rights vest in three annual installments beginning on April 27, 2008.
 
Remarks:
Form 2 of 2 dated May 23, 2007.

Note: File three copies of this Form, one of which must be manually signed. If space is insufficient, see Instruction 6 for procedure.

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