February 11, 2016 / 11:35 AM / 2 years ago

UPDATE 1-Precision Drilling suspends dividend, raises 2016 capex budget

Feb 11 (Reuters) - Canadian rig contractor Precision Drilling Corp suspended its dividend payments as demand for its onshore rigs weakened due to a slump in oil prices.

The company also raised its capital spending budget for 2016 by about 12 percent to C$202 million ($144.4 million), partly due to a weak Canadian dollar.

Crude prices have slumped nearly 70 percent since June 2014, leading to oil and gas producers cutting spending and scaling back drilling, forcing rig contractors to idle or even scrap rigs.

“There is limited visibility with few positive market signals,” Precision’s Chief Executive Kevin Neveu said in a statement on Thursday.

The company’s net loss widened to C$271 million, or 93 Canadian cents per share, in the fourth quarter from C$114.0 million, or 39 Canadian cents per share, a year earlier.

Revenue fell about 44 percent to C$345 million. ($1 = C$1.40) (Reporting by Amrutha Gayathri in Bengaluru; Editing by Kirti Pandey)

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