CALGARY – Trican Well Service Ltd. (TSX:TCW) says it has cut 2,000 employees from its North American workforce and will stop paying dividends to its shareholders, citing the difficult current and future market conditions facing its oilfield services business.
The Calgary-based company also said it’s also seeking relaxed terms on debt agreements and in negotiations to sell its Russian and Kazakhstan pressure pumping business, after receiving an unsolicited offer.
The update was included with Trican’s first-quarter financial report, issued late Tuesday, which showed the company had a $35.7-million net loss and a $60.3-million adjusted loss in the first quarter ended March 31.
Total revenue for the three months ended March 31 was $476.1 million, down 26 per cent or $167 million from the first quarter of 2014 before the oil and gas industry was hit by a major drop in oil prices that began in November.
Trican said it’s aiming to cut $115 million from its fixed annual costs by cutting its workforce and salaries but the savings were more than offset in the first quarter by severance expenses.
It made a $22.4-million dividend payment to shareholders during the first quarter but Trican says further payouts to investors have been suspended indefinitely to preserve its financial resources, given the weak economic outlook.
The company’s Canadian operations generated less than half of Trican’s revenue in the first quarter and accounted for most of the overall decline from the same time last year.
The Canadian operations accounted for $222 million of revenue in this year’s first quarter, down 37 per cent or $130.6 million a year earlier when they accounted for 55 per cent of Trican’s $643.2 million in total revenue.