Ocean Rig's Stock Tanks After Bankruptcy Warning

Shares of Ocean Rig UDW Inc. were nearly halved in premarket trade Friday, after the oil services company said it would continue to explore reorganization strategies that could include bankruptcy given the continuation of "extremely negative" market conditions. The company said late Thursday that oil companies continue to reduce their offshore budgets, the floater rig market is expected to become even more oversupplied than it already is, and a recovery may not occur for several years. "In the recent period, we have been approached by several of our debt holders who have in certain cases also retained legal counsel and financial advisors," the company said in a statement. "We continue to explore and consider alternatives, which may include a possible reorganization under US bankruptcy laws or another jurisdiction, so that we can ride out this very difficult cycle with feasible prospects for strong, long-term success." The stock plunged 47% ahead of the open. It had rallied 33% year to date through Thursday, while the VanEck Vectors Oil Services ETF had climbed 7.8% and the S&P 500 had gained 6.9%.