Ocean Rig Tumbles 47%, CEO Calls Market Conditions 'Extremely Negative', Expects To Amend Debt & Exchange Equity Securities

Ocean Rig UDW Inc. ORIG shares are collapsing after hours following a strong Q2 report. The company reported Q2 EPS $1.83 versus estimates of $0.72. Sales were $452.6 million versus estimates of $376.45 million. That's about the only good news.

Chairman and CEO George Economou made clear Ocean Rig will focus on de-leveraging and maintaining liquidity:

"Oil companies continue to reduce their offshore budgets and as more floaters come off contract in the next six months, an already grossly oversupplied market is expected to worsen. In this current and anticipated poor market environment which we expect to persist for an extended period of time, we believe it is prudent to focus on maintaining liquidity and de-levering the Company."

Further, Economou cautioned investors about potential debt amendments being done:

"While we have not made any specific decisions, it is evident to the Company and a number of its creditors that its debt obligations will need to be amended or exchanged for new debt and/or equity securities, and some debt holders may have little or no recovery on their investment."

In spite of recent comparative strength, Ocean Rig's dire warnings have investors running for the exits. Shares are down over 47 percent after hours to $1.14.

Shares of Ocean Rig closed Thursday's session up $0.20 or 10 percent at $2.16.