(Adds details, background)

May 1 (Reuters) - Diamond Offshore Drilling Inc reported a higher-than-expected quarterly profit, helped by lower costs.

Total operating expenses in the quarter fell 10 pct to $323.36 million.

Contract drilling revenue fell 18 percent to $363.56 million from the first quarter.

Offshore projects, which take years to develop and are capital intensive, were the hardest hit by the slump in crude prices, as oil and gas producers slashed spending. Diamond Offshore, majority owned by Loews Corp, said net income fell to $23.5 million, or 17 cents per share, for the first quarter ended March 31, from $87.4 million, or 64 cents per share, a year earlier.

Excluding items, the rig contractor earned 17 cents per share, higher than average analysts' estimate of 12 cents per share, according to Thomson Reuters I/B/E/S.

Total revenue fell 20.5 percent to $374.2 million, but beat analysts' estimate of $363.49 million. (Reporting by John Benny in Bengaluru; Editing by Shounak Dasgupta and Arun Koyyur)