HOUSTON, Jan. 28 (UPI) -- Oilfield services company Baker Hughes said results for the fourth quarter of 2015 reflected what the company's CEO said was an "extremely" rough climate.
"Our 2015 results are reflective of an extremely difficult and increasingly challenging year for the industry," Chairman and CEO Martin Craighead said in a statement. "Since the fourth quarter of 2014, the global rig count has declined 46 percent as our customers adjusted their spending to align with declining commodity prices."
The company provides services for the exploration and production side of the energy sector as well as key industry data on rig activity. The company in December said the international rig count was 1,095, lower than the December 2014 count by 18.5 percent. The average U.S. rig count for December was 714, down 62 percent from the previous year.
Lower crude oil prices means less capital is available for energy companies for investment in exploration and production, and a decline in rig activity is used as a barometer to gauge the health of the energy sector.
Fourth quarter revenue was down about 60 percent year-on-year for North American operations alone to $1.1 billion. For the year, the company said it recorded an adjusted net loss of $209 million against net income of $1.8 billion for the previous year.
Craighead said the current weakness in crude oil prices meant the prospects were bleak for upstream companies like Baker Hughes. With prices as they are, the global rig count could decline by as much as 30 percent for the year.
Baker Hughes is in merger negotiations with industry counterpart Halliburton, which reported a $28 million loss for the fourth quarter, against a profit from the previous year's quarter of $901 million
The European Commission raised competition questions about the merger, saying only Halliburton, Baker Hughes and Schlumberger were able to provide necessary services to the industry. Schlumberger, one of the largest companies in the upstream sector, reported revenue for the fourth quarter came in at $7.7 billion, a 9 percent decline from one year ago.