Nabors Industries Ltd (NBR), the U.S.’s biggest onshore and offshore drilling company, swung to a quarterly loss, hurt by a fall in drilling activity and sharp revisions to the value of its proposed deal with C&J Energy Services Inc. (CJES).
Nabors, which operates the largest land drilling rig fleet in the world, said it had “significantly scaled back” the pace of new rig construction in the United States as part of its efforts to cut costs. Seasonal rises in activity in Alaska and Canada “were more than offset by lower results in our Rig Services and Completion and Production Services operations as a result of lower activity and increased pricing competitiveness,” the company said.
Nabors has also cut staffing levels and begun consolidating its operating footprint, Chief Executive William Restrepo said.
Global crude prices have nearly halved since June, forcing oil and gas companies across the world to idle rigs and lay off staff.
Nabors recorded charges of about $1.2 billion in the quarter related to its pending deal with C&J Energy Services Inc and the “current industry downturn”. Around $180 million of that was due to the tax impact of restructuring the complex corporate structure of the Bermuda-based group.
As a result, the company posted a net loss of $891.1 million, or $3.08 a share, in the quarter ended Dec. 31, compared with a profit of $150.6 million, or 50c a share, a year earlier.
Nabors had said in June that it would merge its well maintenance business with C&J for $2.86 billion in cash and stock. C&J last month cut the cash portion of its offer by $250 million.
Excluding one-off items, the company reported a profit from continuing operations of 33c a share, missing the average analyst estimate of 39c, according to Thomson Reuters I/B/E/S.
The company’s shares fell 2.7% to $12.20 in after-hours trading on Monday.
Watch more business news from Fortune:
