Its dividend and closing lodges
Civeo Corp. (CVEO:US), the Houston-based owner of so-called man camps for energy workers, dropped 50 percent after suspending its dividend and closing lodges in response to lower demand for its services.
Civeo cut staff in Canada by 30 percent and in the U.S. by 45 percent this year as oil prices fell by almost half since June, according to a statement late yesterday. Capital spending next year will drop by an estimated 78 percent to $85 million, and Civeo warned it may need to write down the value of some of its assets.
The company halted its 13-cent quarterly dividend. Cutbacks by oil-sands producers have reduced demand for its services in Canada and coal companies in Australia are suffering from “persistently low” prices, Civeo said. It has closed two lodges in Canada and is evaluating other locations.
“There are few major oil-sands construction and expansion projects forecast for 2015, reducing the demand for labor and accommodations,” Chief Executive Officer Bradley Dodson said on a conference call yesterday, adding that the Athabasca oil-sands region is oversupplied with rooms for workers.
Civeo dropped to $4.14 at 12:18 p.m. in New York after plunging as much as 52 percent, the most on record.