What: Shares of offshore driller Diamond Offshore Drilling, (NYSE:DO) had an ugly September, falling 27% after gaining 11% just a month before.

It's been an ugly nearly two years for offshore drillers, which as an industry have seen their stock valued slashed more than 70% on average. Diamond's stock is "only" down around 69% since the beginning of 2014, making it slightly less of a loser than its peers:

ESV data by YCharts.

So what: Back to September. As I've written about several other offshore drillers, many companies exited earnings season with some momentum, with generally better-than-expected results pretty much across the board. 

Unfortunately, the reality that the downturn in offshore drilling wasn't ending, and that the results being reported this year are largely due to contracts signed years before. September turned out to be a sell-off period for almost every offshore drilling stock. 

ESV data by YCharts

Now what: While I'm hesitant to call any offshore driller a good buy right now, I will say that Diamond Offshore, along with Atwood Oceanics and Transocean are companies that I'm keeping a close eye on. They probably have the best chance at emerging from the downturn in solid shape. Diamond's advantage is that the company has a relatively low debt level as compared to many of its peers:

ESV Debt to Assets (Quarterly) data by YCharts.

Diamond also has limited newbuild obligations, while some drillers are on the hook for billions in newbuilds. This is an enviable position in the midst of a major decline in offshore drilling programs. In short, Diamond may have the most flexibility in the segment, and that should help it navigate an ugly market that looks like it may get worse before it gets better. 

But with that said, I wouldn't suggest investing in any offshore driller just yet, because it's not clear how long the weak demand environment will be. Until there's some indication that oil producers are ready to ramp up offshore capital spending, I plan to wait things out. I encourage others to do the same. 

Jason Hall owns shares of Seadrill. The Motley Fool owns shares of and recommends Atwood Oceanics. The Motley Fool recommends Seadrill. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.