By Myles Udland From Business Insider

Shares of the oil services company Civeo are crashing.

In late morning trade on Tuesday, shares of the company were down about 50% to $4.07 per share after Civeo announced on Monday afternoon that it would suspend its quarterly dividend and slash capital expenses.

In a press release, Civeo said:

The acceleration in November of the decline in global crude oil prices and forecasts for a potentially protracted period of lower prices have resulted in major oil companies reducing their 2015 capital budgets from 2014 levels. This has had the effect of reducing the near-term allocation of capital to development or expansion projects in the oil sands, which is a major driver of demand for the company’s services in Canada.

Civeo provides housing accommodations for workers at oil-drilling and mining projects, primarily in Canada and Australia.

Civeo announced that it would suspend its quarterly dividend payments “in order to maintain the company’s financial flexibility.” Civeo said it expected to use cash flow and existing cash balances in 2015 to pay down debt instead.

Additionally, Civeo said that during 2014 it had slashed the headcount in its Canadian and US operations by 30% and 45%, respectively, and it said capital expenditures in 2015 were expected to total $75 million to $85 million, compared with capital expenses of $260 million to $280 million in 2014.

Oil prices have gotten crushed this year, with West Texas Intermediate crude on Monday briefly falling below $53 a barrel, the lowest price since May 2009. In June, WTI topped out above $105 a barrel.

Also Monday, the Dallas Federal Reserve’s latest manufacturing report showed that business leaders across the state of Texas were worried about the effects the crash in oil prices could have for the Texas economy, which has been a major beneficiary of the shale oil boom.

One Texas business leader in the metal product manufacturing sector said the drop in oil prices would be “making things ugly … quickly.”

Civeo’s CEO Bradley Dodson said in a statement Monday:

As it became evident during the fourth quarter that capital spending budgets among the major oil companies were going to be cut, we began taking steps to reduce marketed room capacity, control costs and curtail discretionary capital expenditures. In Canada, we have since closed our Athabasca and Lakeside lodges and are evaluating similar actions in select other locations. We are limiting our discretionary capital spending in 2015 to those projects that are supported by customer contracts.

The most recent crash in Civeo shares is the second time this year the stock has taken a beating and marks the second time a company in the oil space has suspended its dividend in the past several weeks; in late November, the offshore driller Seadrill also suspended its dividend.

In July, Civeo shares fell 45% in one day after the company announced a dramatic strategy change, opting not to pursue a real-estate investment trust — or REIT — structure and seek to move its headquarters to Canada from the US.

Civeo was spun off from Oil States International in June and until its July announcement was trading in the mid-$20s; including Tuesday’s drop the stock was closing in on $4 per share, a more than 80% drop in just a few months.

IMAGES:

oil worker Muhannad Fala’ah/Getty Images

brutal chart of Civeo since its June spin off.

For more on this story go to: http://www.businessinsider.com/civeo-shares-crash-2014-12#ixzz3NOwj0vWo