UPDATE 1-Four Pioneer Energy rig contracts canceled in 1st qtr
(Adds details, background)
Jan 8 (Reuters) - Pioneer Energy Services Corp said it had received early termination notices for contracts for four rigs in the first quarter as oil companies continue to cut capital spending in the wake of plunging oil prices.
The company also expects to idle seven more rigs in the next month, with two more being idled by the end of the quarter.
Pricing pressure in the production services segment will likely continue throughout 2015, Pioneer said. The segment accounts for more than half of total revenue.
The company also expects pricing and utilization for all its rig classes in the United States to fall in 2015, with its mechanical rig fleet being hit hardest. (bit.ly/14yJHRN)
Pioneer operates 62 drilling rigs and 116 well-servicing rigs.
The company said it expects 89 percent of its drilling rigs to be utilized in the fourth quarter, up from 84 percent currently.
Many U.S. oil and gas companies have slashed capital spending plans for 2015, in line with plunging crude oil prices, which have more than halved since mid-2014.
Brent crude rose 20 cents to $51.35 by 1121 GMT on Thursday.
Larger peer Helmerich & Payne Inc said on Wednesday that rates for its high-tech rigs had tumbled 10 percent from the previous quarter.
Shares of San Antonio, Texas-based Pioneer have fallen 60 percent in the past three months. (Reporting by Narottam Medhora in Bengaluru; Editing by Simon Jennings)
© Thomson Reuters 2017 All rights reserved.