Rig company Baker Hughes reported a steep decline in revenue from North American operations, stressing its merger with Halliburton was progressing.

Companies like Baker Hughes that work in the exploration and production, or upstream, side of the energy sector are facing economic headwinds in an era of historically low oil prices. Baker Hughes said third quarter revenue in North America alone was down 57 percent year-on-year because of "sharply lower activity and unfavorable pricing."

In its weekly rig count report, a metric used to gauge the health of the exploration and production sector, Baker Hughes reported the seventh-straight weekly decline in activity in the United States.

"In North America, margins declined further driven by ongoing weakness in the U.S. onshore market, and unfavorable mix in the Gulf of Mexico," Baker Hughes Chairman and Chief Executive Officer Martin Craighead said in a statement.

In a September report, the U.S. Energy Information Administration said total upstream investments could stay below the 10-year average if crude oil prices remain depressed.

Rival services company Schlumberger said last week its third quarter revenue fell 4 percent for North American operations and 7 percent internationally. Year-on-year, revenue for North American operations alone dropped 34 percent. Schlumberger already shed about 15 percent of its workforce.

Last year, rival Halliburton made a move to acquire Baker Hughes. Each company has cut staff and spending in an effort to survive in the weak oil economy. Both companies said they were unloading several business units as they prepare for their eventual $35 billion merger. The combined units were valued in 2013 at $5.2 billion.

"Regarding the pending merger, I continue to be pleased with the efforts of the teams working on regulatory matters and developing plans for a successful integration," Craighead said. "The recently announced plan to divest certain businesses is another important step in the process to complete the transaction."

Looking ahead, Craighead said he expects continued weakness in the North American energy sector.