PASON SYSTEMS $22.24 (Toronto symbol PSI; TSINetwork Rating: Speculative)(403-301-3400; www.pason.com; Shares outstanding: 83.6 million; Market cap: $1.9 billion; Dividend yield: 3.1%) rents equipment for monitoring and managing land-based oil rigs. It also provides communication systems clients use to remotely collect data from their drilling operations. Pason serves oil and gas firms and drilling contractors throughout Canada, the U.S., Mexico and Argentina.

In the three months ended March 31, 2015, the company’s revenue fell 19.3%, to $99.4 million from $123.2 million a year earlier. A rise in the U.S. dollar only partly offset an industry-wide slowdown in oil and gas drilling.

The company earned $14.2 million, or $0.17 a share, in the latest quarter, down from $20.8 million, or $0.25 a year earlier. The lower revenue was the main reason for the decline. Cash flow per share fell 23.5%, to $0.52 from $0.68.

To keep its cash flow as high as possible, Pason plans to reduce its capital spending by 46.3% in 2015, to $65 million from $121 million in 2014. It has also cut its staff by 5%.

Meanwhile, the company’s balance sheet is strong, with cash of $191.8 million, or $2.29 a share, and no debt. The stock yields a high 3.1%, and its dividend appears sustainable.

Oil and gas producers’ capital spending cuts have cut North American drilling activity by 50% or more this year. However, Pason’s products let producers increase their revenue and lower their operating costs. That should keep the company’s sales and profits from falling much further. It also leaves Pason well positioned for gains when oil and gas prices recover.

Pason Systems is still a buy.