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 *
WILLIAMS DAVID W
  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)
Executive Vice President
(Last)
(First)
(Middle)
15415 KATY FREEWAY, SUITE 100
3. Date of Earliest Transaction (Month/Day/Year)
08/22/2006
(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 08/22/2006   M   486 A $ 29.33 486 D  
Common Stock 08/22/2006   S   486 D $ 73.9386 0 D  
Common Stock 08/22/2006   M   938 A $ 29.2 938 D  
Common Stock 08/22/2006   S   938 D $ 73.9386 0 D  
Common Stock 08/22/2006   M   938 A $ 19.88 938 D  
Common Stock 08/22/2006   S   938 D $ 73.9386 0 D  
Common Stock 08/22/2006   M   938 A $ 21.93 938 D  
Common Stock 08/22/2006   S   938 D $ 73.9386 0 D  
Common Stock 08/22/2006   M   937 A $ 45.77 937 D  
Common Stock 08/22/2006   S   937 D $ 73.9386 0 D  
Common Stock 08/22/2006   M   937 A $ 53.6 937 D  
Common Stock 08/22/2006   S   937 D $ 73.9386 0 D  
Common Stock 08/22/2006   M   937 A $ 61.9 937 D  
Common Stock 08/22/2006   S   937 D $ 73.9386 0 D  
Common Stock 08/22/2006   M   937 A $ 69.38 937 D  
Common Stock 08/22/2006   S   937 D $ 73.9386 0 D  
Common Stock 08/22/2006   M   937 A $ 19.78 937 D  
Common Stock 08/22/2006   S   937 D $ 73.9386 0 D  
Common Stock 08/22/2006   M   937 A $ 21.23 937 D  
Common Stock 08/22/2006   S   937 D $ 73.9386 0 D  
Common Stock 08/22/2006   M   937 A $ 19.08 937 D  
Common Stock 08/22/2006   S   937 D $ 73.9386 0 D  
Common Stock 08/22/2006   M   937 A $ 20.77 937 D  
Common Stock 08/22/2006   S   937 D $ 73.9386 0 D  

Reminder: Report on a separate line for each class of securities beneficially owned directly or indirectly.
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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 Option (right to buy) $ 29.33 08/22/2006   M     486 04/15/2003(1) 04/15/2012 Common Stock 486 $ 0 0 D  
Stock Option (right to buy) $ 29.2 08/22/2006   M     938 04/15/2003(1) 07/01/2012 Common Stock 938 $ 0 0 D  
Stock Option (right to buy) $ 19.88 08/22/2006   M     938 04/15/2003(1) 10/01/2012 Common Stock 938 $ 0 0 D  
Stock Option (right to buy) $ 21.93 08/22/2006   M     938 04/15/2003(1) 12/31/2012 Common Stock 938 $ 0 0 D  
Stock Option (right to buy) $ 45.77 08/22/2006   M     937 04/19/2006(2) 04/19/2015 Common Stock 937 $ 0 2,813 (3) D  
Stock Option (right to buy) $ 53.6 08/22/2006   M     937 04/19/2006(2) 07/01/2015 Common Stock 937 $ 0 2,813 (3) D  
Stock Option (right to buy) $ 61.9 08/22/2006   M     937 04/19/2006(2) 10/03/2015 Common Stock 937 $ 0 2,813 (3) D  
Stock Option (right to buy) $ 69.38 08/22/2006   M     937 04/19/2006(2) 12/31/2015 Common Stock 937 $ 0 2,813 (3) D  
Stock Option (right to buy) $ 19.78 08/22/2006   M     937 04/22/2004(4) 04/22/2013 Common Stock 937 $ 0 938 (5) D  
Stock Option (right to buy) $ 21.23 08/22/2006   M     937 04/22/2004(4) 07/01/2013 Common Stock 937 $ 0 938 (5) D  
Stock Option (right to buy) $ 19.08 08/22/2006   M     937 04/22/2004(4) 10/01/2013 Common Stock 937 $ 0 938 (5) D  
Stock Option (right to buy) $ 20.77 08/22/2006   M     937 04/22/2004(4) 12/31/2013 Common Stock 937 $ 0 938 (5) D  

Reporting Owners

Reporting Owner Name / Address Relationships
 Director  10% Owner  Officer  Other
WILLIAMS DAVID W
15415 KATY FREEWAY
SUITE 100
HOUSTON, TX 77094
      Executive Vice President  

Signatures

 /s/ William C. Long Attorney-in-Fact for David W. Williams   08/23/2006
**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) The options vested in four equal annual installments on April 15, 2003, 2004, 2005 and 2006.
(2) The options vested on April 19, 2006.
(3) The options vest in three equal annual installments beginning on April 19, 2007.
(4) The options vested in three equal annual installments on April 22, 2004, April 22, 2005 and April 22, 2006.
(5) The options vest on April 22, 2007.
 
Remarks:
Form 1 of 2 dated August 23, 2006.

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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