The company said it expects to exit the current quarter with about 70 rigs in operation, down from an average of 123 rigs at the end of last year.
Oil prices have fallen some 80% this year as the spread of coronavirus has crushed fuel demand. Benchmark U.S. crude futures traded negative for the first time ever this week as supply outstripped demand and filled up storage. They were at roughly $18 a barrel on Thursday.
The Houston-based drilling contractor, which also has a hydraulic fracturing unit, said it expects four frack fleets to run in the second quarter, down from an estimate of around 10 earlier this year.
"I think the term 'frack holiday' may be overstating what's going on," Patterson-UTI Chief Executive Andy Hendricks told investors on a call. "I don't see completions making a bounce back, certainly not in the third quarter."
Patterson on Thursday also slashed its dividend by half to 2 cents a share and said it was not planning any additional buybacks at the moment. It said it would instead focus on its cost-cutting program to shore up the balance sheet.
The company reported a net loss of $435 million (352.31 million pounds) in the quarter as it took impairment charges of over $400 million on goodwill relating to its contract drilling business and some oil exploration-related assets.
Patterson's larger rivals, Schlumberger NV, Halliburton Co and Baker Hughes Co, have each also reported billions of dollars in impairment charges in recent weeks.
Patterson's cost-cutting efforts will focus on its pressure pumping business that breaks shale rocks to release trapped oil and gas. It expects two-thirds of a $100 million reduction to come from that unit, the company said.
On an adjusted basis, Patterson's 45 cents per share loss was slightly better than the 47 cents per share estimated by analysts, according to Refinitiv IBES data.
By Shariq Khan and Liz Hampton