CALGARY -- Poor drilling market prospects and a desire to save money to pay down debt and for other priorities convinced Ensign Energy Services Inc. to chop its dividend in half and kill its dividend reinvestment program, the company said Tuesday.

The Calgary-based driller's shares closed down more than 14 per cent or 38 cents at $2.30, their lowest point in at least 10 years, after it announced it will now pay a quarterly dividend of six cents per share, down from 12 cents.

"The dividend is the obvious headline news this quarter," said president and chief operating officer Bob Geddes on a conference call after markets closed.

"Quite simply, the board decided to address the dilution and eliminate the DRIP while at the same time retain substantially the same cash payout. The cash payout ratio drops to a very conservative 12 per cent of cash flow and still provides a healthy yield."

The DRIP allowed investors to use their dividends to purchase more stock at a discount directly from the company without paying brokerage fees.

The dividend changes came as a surprise because the company has the forecasted cash flow to support continuing those programs, pointed out analyst Waqar Syed of AltaCorp Capital in a report.

The annual dividend yield will now be about nine per cent versus about 18 per cent before the cut, he said.

Ensign reported a third-quarter loss of $37.8 million, compared with a loss of $32.8 million in the same period last year.

Revenue was $393.5 million, up from $288.7 million in the third quarter of 2018, mainly due to the acquisition of 89.3 per cent of Trinidad Drilling Ltd. in the fourth quarter of 2018 and the remaining stake in the first quarter of 2019.

The company has completed the integration of Trinidad, adding access to key markets in the Texas Permian and Middle East regions, Geddes said on the call.

He noted that Canada is now Ensign's third-largest division with 17 per cent of adjusted earnings versus 20 per cent from its international division (which includes Australia, the Middle East and Latin America) and 63 per cent from the United States.

All three markets are expected to experience flat levels of activity through the rest of 2019 and into next year, the company said.

Geddes welcomed news last week that the Alberta government will exempt new conventional oil wells from its oil production curtailment program, pointing out it will likely encourage some operators to "put a few more rigs back to work this winter."

The province has gradually been easing quotas under the program which started last January to support local crude prices.