The stock price of Ocean Rig UDW, LLC (Nasdaq: ORIG), a deep-sea drilling outfit, has been on a roller coaster ride of late. The stock has really struggled, as have the stocks of all the companies in the space...largely due to the drop in oil price, increases in drill count, and lowered demand. Ocean Rig also specializes in a very niche market -- ultra deep drilling -- which is costly and carried high risk. Here is the brief run-down of what's going on with the company and stock:

-the BOD hired on an insolvency expert back in early February signalling to investors the company was looking at Chapter 11

-yesterday the company announced earnings that beat on the top-side, with revenues coming in $23M above estimates, which sent the shares higher in after hours

-then the company announced a massive $3.75B impairment charge for debt restructuring and cancelled its conference call

-the stock opened today (Thursday) about 30% lower on the news

Okay, so while the CEO of the company issued a statement this morning stating that "we are exploring all options," it looks like ORIG is likely headed to Chapter 11 protection. Which means that the stock, like the company, will be headed in one of two directions: either the restructuring is a failure and the company continues to selloff assets until there is no more book value and shares fall to sub-penny status and on to the pink sheets, or the lowering of debt payments coupled with continued rally in oil prices help the company get back on its feet. If the latter, we should see the share price rise back over $2/share which is where it was in December.

It should become clear in the next few weeks which way this is headed. If the stock trades under $0.50, it is time to get out. But if we continue to see buying of this gap down, as we've seen today so far...and as we saw back in August when the stock price went from 0.70 to nearly $3 in just 4 months (see chart below)...we could be looking at a very nice 150% return or more.