PDS Precision Drilling Corporation New

By Josh Beckerman 

Atwood Oceanics Inc., a drilling contractor that sharply reduced its dividend in November, has eliminated its quarterly payout due to challenging market conditions.

Atwood previously reduced its dividend to 7.5 cents from 25 cents.

The company said Thursday that the latest move provides "greater flexibility to weather the current downturn." The elimination will save the company nearly $5 million a quarter.

As the energy sector faces a prolonged pricing slump, companies including Energen Corp. and Precision Drilling Corp. recently suspended their dividends, while Cenovus Energy Inc. and Devon Energy Corp. reduced their payouts.

Standard & Poor's Ratings Services warned last month that it expects the offshore contract drilling industry to remain depressed through next year and predicted Atwood's asset diversity and cash flow base would shrink.

Atwood shares were recently down 3% to $6.34 in after-hours trading.

Write to Josh Beckerman at josh.beckerman@wsj.com

(END) Dow Jones Newswires

February 18, 2016 17:15 ET (22:15 GMT)

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