DRYS DryShips Inc

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

Exhibit 99.1

DRYSHIPS INC. REPORTS FINANCIAL AND OPERATING

RESULTS FOR THE FIRST QUARTER 2014

May 22, 2014, Athens, Greece. DryShips Inc. (NASDAQ:DRYS), or DryShips or the Company, an international provider of marine transportation services for drybulk and petroleum cargoes, and through its majority owned subsidiary, Ocean Rig UDW Inc., or Ocean Rig, of offshore deepwater drilling services, today announced its unaudited financial and operating results for the first quarter ended March 31, 2014.

First Quarter 2014 Financial Highlights

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For the first quarter of 2014, the Company reported a net loss of $34.6 million, or $0.08 basic and diluted loss per share.

Included in the first quarter of 2014 results are:

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Non-cash write-offs and redemption costs associated with the full refinancing of Ocean Rig's $500.0 million 9.5% senior unsecured notes due 2016, totaling $32.6 million or $0.08 per share.

Excluding the above items, the Company would have reported a net loss of $15.2 million, or $0.04 per share. ⁽¹⁾

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The Company reported Adjusted EBITDA of $201.2 million for the first quarter of 2014, as compared to $112.0 million for the first quarter of 2013. ⁽²⁾

Recent Highlights

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On May 8, 2014, Ocean Rig announced that its Board of Directors declared a quarterly cash dividend with respect to the quarter ended March 31, 2014 of $0.19 per common share, to shareholders of record as of May 20, 2014 and payable on or about May 30, 2014.

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On April 30, 2014, the Company reached an agreement with the lender under its two Senior Secured Credit Facilities. Under the terms of these agreements, among other things, the lender has agreed to waive and amend certain financial covenants until maturity and the Company has agreed to provide a pledge over approximately 3,800,000 Ocean Rig shares owned by DryShips until December 31, 2014. These agreements are subject to definitive documentation which is expected to be completed by the end of the second quarter of 2014.

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On April 8, 2014, Ocean Rig signed a contract to construct two 7 ^th generation new integrated design drillships at Samsung Heavy Industries Co. Ltd, (“Samsung”). The drillships are scheduled to be delivered to Ocean Rig in February 2017 and June 2017, respectively. Each drillship’s total cost is estimated to be approximately $685.0 million, with favorable payment terms. The drillships will be capable to drill in water depths of 12,000ft and possess a number of new advanced design and technical features which include, among others, capacity for dual 7-ram blow out preventers (“BOP’s”); increased storage and hoisting capacity; larger deck space and living quarters; and are based on a new fuel efficient and superior motion stability hull design.

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(1)The net result is adjusted for the minority interests of 40.62% not owned by DryShips Inc. common stockholders.

(2)Adjusted EBITDA is a non-GAAP measure; please see later in this press release for reconciliation to net income.

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On April 8, 2014, Ocean Rig deferred the expected delivery of its ultra deepwater drillship, the Ocean Rig Santorini , from late-2015 to mid-2016.

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In connection with the previously announced Letter of Award, Ocean Rig was awarded from Total E&P Angola, a 6 year contract for drilling operations offshore Angola for its ultra deepwater drillship Ocean Rig Skyros .  The contract, which remains subject to signing of final documentation, is expected to commence in the third quarter of 2015 and has an estimated backlog of $1.3 billion.

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On March 26, 2014, Ocean Rig closed an offering of 7.25% senior notes due 2019 in the amount of $500.0 million (the “7.25% Notes Offering”). Ocean Rig used the proceeds from the 7.25% Notes Offering, together with cash on hand, to repurchase and redeem the 9.5% senior unsecured notes due 2016 (the “Senior Unsecured Notes”) of which $500.0 million in aggregate principal amount was outstanding prior to closing of the 7.25% Notes Offering.

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On March 24, 2014, Ocean Rig took delivery of its ultra deepwater drillship, the Ocean Rig Athena and drew down the available amount of $450.0 million under its $1.35 billion syndicated secured term loan facility. The drillship is expected to commence drilling operations in late June 2014 under the three year contract with ConocoPhillips.

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On March 18, 2014 the Company concluded a Memorandum of Agreement with an unaffiliated third party for the acquisition of one second hand Capesize vessel, Raiatea(ex. Conches) , for a purchase price of $53.0 million. The vessel was delivered on April 24, 2014.

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On March 2, 2014, the Ocean Rig Skyros commenced a five well or a minimum of a 275 day contract for drilling offshore West Africa with Total E&P Angola.

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On December 31, 2013, the Company resumed sales under its previously announced $200 million program of at the market issuances of its common shares through Evercore Group L.L.C. as its sales agent.  During the first quarter of 2014, 22,209,844 common shares were issued and sold at an average share price of $4.14 per share pursuant to the at-the-market offering, resulting in net proceeds to the Company of $90.0 million, after deducting commissions.

George Economou, Chairman and Chief Executive Officer of the Company, commented:

“While charter rates for larger drybulk carriers under-performed during the first quarter of 2014, forward charter rates and asset prices are holding up resiliently, underscoring the bullish market sentiment. The charter rates earned by our tankers during the first quarter of 2014 were above cash breakeven levels, and contributed to our free cash balances. Following a period of oversupply the recent volatility in the tanker and drybulk sectors is a clear sign of a more balanced supply and demand. We continue to expect a sustainable recovery in charter rates during the second half of 2014 and beyond.

“As of the end of the first quarter, DryShips has about 2,723 spot days remaining in 2014 and 3,613 spot days in 2015 for its crude oil tanker fleet and about 7,023 spot days remaining in 2014 and 12,208 spot days in 2015 for its drybulk fleet.  DryShips is therefore uniquely positioned to take full advantage of the expected market recovery.

“We believe our operations are fully funded through 2014 and, while our at-the-market equity offering is still ongoing, we have shown that we utilize the program in a disciplined manner. In the coming months, we expect to conclude various financial initiatives to fund the maturity of our convertible notes which we expect to take place in December of this year.  

“Turning to the offshore side, Ocean Rig continues to execute on its business plan. Ocean Rig’s modern fleet, strong balance sheet and solid contract backlog of $5.0 billion, provides it with the foundation to implement its previously announced value creation initiatives as evidenced by the recent dividend announcement which has a direct benefit on Dryships.”

Financial Review: 2014 First Quarter

The Company recorded a net loss of $34.6 million, or $0.08 basic and diluted loss per share, for the three-month period ended March 31, 2014 as compared to a net loss of $116.6 million, or $0.30 basic and diluted loss per share, for the three-month period ended March 31, 2013. Adjusted EBITDA ⁽¹⁾ was $201.2 million for the first quarter of 2014, as compared to $112.0 million for the same period in 2013.

For the drybulk carrier segment, net voyage revenues (voyage revenues minus voyage expenses) amounted to $45.3 million for the three-month period ended March 31, 2014, as compared to $36.9 million for the three-month period ended March 31, 2013. For the tanker segment, net voyage revenues amounted to $22.3 million for the three-month period ended March 31, 2014, as compared to $10.8 million for the same period in 2013. For the offshore drilling segment, revenues from drilling contracts increased by $114.4 million to $360.8 million for the three-month period ended March 31, 2014, as compared to $246.4 million for the same period in 2013.

Total vessels’, drilling rigs’ and drillships’ operating expenses and total depreciation and amortization increased to $179.6 million and to $107.3 million, respectively, for the three-month period ended March 31, 2014, from $144.9 million and $82.7 million, respectively, for the three-month period ended March 31, 2013. Total general and administrative expenses increased to $49.1 million in the first quarter of 2014, from $36.2 million during the same period in 2013.

Interest and finance costs, net of interest income, amounted to $114.3 million for the three-month period ended March 31, 2014, compared to $56.9 million for the three-month period ended March 31, 2013.

The Time Charter Equivalent ⁽²⁾ , or TCE, rate for our drybulk fleet was $13,564 per day per vessel in the three month period ended March 31, 2014, as compared to $11,396 per day per vessel in the corresponding period of 2013.  The Time Charter Equivalent, or TCE, rate for our tanker fleet was $24,781 per day per vessel in the three month period ended March 31, 2014 which is a significant improvement compared to the $12,792 per day per vessel TCE rate in the corresponding period of 2013.

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⁽¹⁾ Adjusted EBITDA is a non-GAAP measure; please see later in this press release for reconciliation to net income .

⁽²⁾ Time Charter Equivalent is a non-GAAP measure; please see later in this press release for definition.

⁽¹⁾ Contract remains subject to signing of final documentation.

(1) Average number of vessels is the number of vessels that constituted our fleet for the relevant period, as measured by the sum of the number of days each vessel was a part of our fleet during the period divided by the number of calendar days in that period.

(2) Total voyage days for fleet are the total days the vessels were in our possession for the relevant period net of dry-docking days.

(3) Calendar days are the total number of days the vessels were in our possession for the relevant period including dry-docking days.

(4) Fleet utilization is the percentage of time that our vessels were available for revenue generating voyage days, and is determined by dividing voyage days by fleet calendar days for the relevant period.

(5) Time charter equivalent, or TCE, is a measure of the average daily revenue performance of a vessel on a per voyage basis. Our method of calculating TCE is consistent with industry standards and is determined by dividing voyage revenues (net of voyage expenses) by voyage days for the relevant time period. Voyage expenses primarily consist of port, canal and fuel costs that are unique to a particular voyage and are paid by the charterer under a time charter contract, as well as commissions. TCE revenues, a non-U.S. GAAP measure, provides additional meaningful information in conjunction with revenues from our vessels, the most directly comparable U.S. GAAP measure, because it assists our management in making decisions regarding the deployment and use of its vessels and in evaluating their financial performance. TCE is also a standard shipping industry performance measure used primarily to compare period-to-period changes in a shipping company's performance despite changes in the mix of charter types (i.e., spot charters, time charters and bareboat charters) under which the vessels may be employed between the periods. Please see below for a reconciliation of TCE rates to voyage revenues.

(6) Daily vessel operating expenses, which includes crew costs, provisions, deck and engine stores, lubricating oil, insurance, maintenance and repairs is calculated by dividing vessel operating expenses by fleet calendar days for the relevant time period.

(In thousands of U.S. dollars, except for TCE rate, which is expressed in Dollars, and voyage days)