Pioneer Energy Services said in an SEC filing Thursday it received early termination requests for four rig contracts in the first quarter.
The Texas-based company said it will receive termination payments totaling about $17 million.
Further details about the rig cancellations have not been disclosed yet.
Pioneer also expects to idle seven rigs in the next month and two more by the end of the quarter.
The shelving will primarily effect mechanical rigs drilling vertical wells in West Texas.
Five of the company’s rigs operating in Colombia are expected to have their contracts extended through the middle of 2015 at a slight discount to current dayrates.”
Pioneer warned prices and utilization rates could drop for all of its rig classes in the United States this year as upstreams trim expenditures amid weak oil prices.
The company expects its mechanical rig fleet to be the hardest hit by the demand downturn.
In light of slumping demand the company revised its 2015 capital expenditure forecast downwards to $195 million to $215 million from its original guidance of $250 million to $270 million.
Pioneer currently operates 62 drilling rigs and 116 well-servicing rigs.