Things are so bleak in the oil industry an offshore drilling company got a 90% discount on a $700 million rig

If you want a perfect encapsulation of just how bad it is for the energy industry, we’ve got a story for you.

Ocean Rig, an offshore oil drilling company, just got an incredible “going out of business” deal on a deep-ocean drillship.

According to maritime industry blog gCaptain, Ocean Rig got a sixth-generation drillship that was worth up to an estimated $700 million in 2011 for just $65 million.

So Ocean Rig just got a 90.7% discount on a massive piece of equipment.

As gCaptain noted, Ocean Rig bought four of a similar type of rig from builder Samsung Heavy Industries in 2008 for $800 million each. The price for a barrel of crude at the time was as high as $140; crude is now just above $40.

This isn’t necessarily surprising, in an age when energy companies are becoming increasingly cost-conscious offshore drilling is one of the most expensive types of drilling.

The seller of the rig, Brazilian firm Schahin Group, also tells a part of the energy industry story. The company is one of an ever-increasing group of oil firms to go into bankruptcy and have to liquidate assets to survive.

So pretty much the read here is the sale is a great deal for Ocean Rig, and another terrible sign for the industry.

(h/t @pcdunham)

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