HOUSTON, July 23 (UPI) -- Low crude oil prices suggest activity in the exploration and production side of the energy sector will stay depressed, U.S. rig company Hercules Offshore said.
From U.S. operations alone, Hercules said revenue generated during the second quarter of the year dropped 71 percent year-on-year to $40.6 million.
Crude oil markets are struggling to recover from the long decline that began in June 2014, when prices were above the $100 per barrel mark. West Texas Intermediate, the U.S. benchmark, dropped below $50 per barrel in interday trading this week.
"The latest pullback in the price of oil is likely to delay any improvement in worldwide activity levels well into 2016," Chief Executive Officer John Rynd said in a statement.
In the U.S. sector, the company said its net operating days in the second quarter declined by more than half year-on-year and the average day rate to lease a rig declined from $108,237 during second quarter 2014 to $92,538.
Internationally, Hercules recorded an operating loss of $40.5 million compared with income of $6.7 million in second quarter 2014. The company posted a first quarter net loss of $57.1 million, compared to net income of $19.9 million during the first quarter of 2014.
Hercules announced last week it started a solicitation of votes from shareholders for a prepackaged plan for reorganization.
The company, which has headquarters in Houston, announced plans to start the proceedings in June.
The quarterly reports follows similar trends set this week by Halliburton and Baker Hughes, which said it expected a market recovery to be far on the horizon.
Rynd said that, in the meantime, his company was working to endure by aggressively cutting costs.
"By controlling costs and establishing a stronger balance sheet, we will be better positioned to weather this protracted downturn and possibly capitalize on opportunities that may arise in such industry conditions," he said.
