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File photo of Precision Drilling president and CEO Kevin Neveu.TODD KOROL/Reuters

As the price of crude oil continues to plunge, Precision Drilling Corp. says it plans to idle rig-building activity once it has completed delivery of 16 previously announced rigs.

"Following the delivery of the 16 rigs, I expect our rig building activity will be idled until we see an improved commodity price environment and rising customer new build demand," Precision president and chief executive officer Kevin Neveu said Monday.

Calgary-based Precision also said on Monday its capital spending for 2015 will drop to $493-million from about $885-million in 2014.

Brent crude oil declined almost $2 (U.S.) a barrel on Monday to a new 5-year low as experts forecast that the oversupply situation will likely continue until next year in the wake of OPEC's decision not to cut output.

The dramatic fall in the price has resulted in retrenchment in the crude oil sector and reduced demand for equipment and infrastructure.

"While the current market is adjusting to recent rapid oil price declines, we remain intensely focused on cost management with a variable cost business model and balance sheet designed to address changing market conditions," Mr. Neveu said.

Precision's 2014 expansion capital plan includes the completion and deployment of 16 new-build drilling rigs and no additional rig deliveries, the company said.

There are 15 rigs destined for the U.S. in the first half of 2015 and one expected to be deployed in Kuwait late in the second quarter, Precision said.

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