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Going Concern
3 Months Ended
Mar. 31, 2020
Organization Consolidation And Presentation Of Financial Statements [Abstract]  
Going Concern

2. Going Concern

As a result of the prolonged downturn in the offshore contract drilling industry, combined with the added economic uncertainty in the global energy markets resulting from a further decline in energy prices and the COVID-19 pandemic and efforts to mitigate the spread of the virus, we have reported a net loss of $861.9 million, inclusive of a $774.0 million impairment charge, for the three months ended March 31, 2020. As of March 31, 2020, we had an aggregate of approximately $2.4 billion in senior notes and borrowings under our revolving credit facility outstanding with stated maturities at various times from 2023 through 2043, of which an aggregate of $436.0 million was borrowed under our revolving credit facility. As described in Note 13 “Subsequent Events,” on April 26, 2020,

Diamond Offshore Drilling, Inc. (the  “Company”) and certain of its direct and indirect subsidiaries (together with the Company, the “Debtors”) filed voluntary petitions for relief under chapter 11 of title 11 of the United States Code (the “Chapter 11 Cases”) in the United States Bankruptcy Court for the Southern District of Texas (the “Bankruptcy Court”). As a result of the filing of the Chapter 11 Cases, the principal and interest due under our outstanding senior notes and revolving credit facility became immediately due and payable and have been presented as “Current maturities of long-term debt” in our unaudited Condensed Consolidated Balance Sheet at March 31, 2020. However, any efforts to enforce such payment obligations with respect to our senior notes and revolving credit facility are automatically stayed as a result of the filing of the Chapter 11 Cases. We have projected that we will not have sufficient cash on hand or available liquidity to repay such outstanding debt. These conditions and events raise substantial doubt over our ability to continue as a going concern for twelve months after the date our financial statements are issued.  

Financial information in this report has been prepared on the basis that we will continue as a going concern, which presumes that we will be able to realize our assets and discharge our liabilities in the normal course of business as they come due. Financial information in this report does not reflect the adjustments to the carrying values of assets and liabilities and the reported expenses and balance sheet classifications that would be necessary if we were unable to realize our assets and settle our liabilities as a going concern in the normal course of operations. Such adjustments could be material.  Our long-term liquidity requirements, the adequacy of capital resources and ability to continue as a going concern are difficult to predict at this time. If our future sources of liquidity are insufficient, we could face substantial liquidity constraints and be unable to continue as a going concern and will likely be required to significantly reduce, delay or eliminate capital expenditures, implement further cost reductions, or seek other financing alternatives.

Although we anticipate that the Chapter 11 Cases will help address our liquidity concerns, the approval of a plan of reorganization is not within our control and uncertainty remains over the Bankruptcy Court's approval of a plan of reorganization. As such we have concluded that substantial doubt continues to exist about our ability to continue as a going concern.