Pride International Inc said it agreed with Chevron Corp to terminate the remaining contract term of a rig in West Africa, after an inspection revealed unacceptable levels of corrosion.

Shares of the company were trading down 7 percent, or $1.74 at $22.26 in morning trade on the New York Stock Exchange.

Pride said the rig, Pride Venezuela, was relocated from Chevron's drilling location to Luanda Bay, Angola, for planned repairs and a mid-period survey.

An inspection of a section of the hull revealed an unacceptable level of corrosion, which will require a dry-dock facility to conduct permanent repairs and the rig will have to be moved out of Africa, the company said.

The revenue loss, is expected to lower second quarter results by an estimated 3 cents per share from its previous forecast of 66 cents to 71 cents per share.

The third and fourth quarters each are expected to be negatively impacted by about 13 cents per share.

Further impact is expected to the financial results in the second, third and fourth quarters resulting from the cost of mobilization and repairs, Pride said. (Reporting by Sakthi Prasad in Bangalore, Editing by Dinesh Nair)