UPDATE 1-Tetra Technologies warns on '10 capex target, shrs sink

* Says may not reach FY capex budget of $127 mln

* Q2 adj EPS $0.26 beats est. $0.23

* Q2 rev $241.6 mln vs est. $234.3 mln

* Shares down as much as 17 pct

BANGALORE, Aug 5 (Reuters) - Oil and gas services company Tetra Technologies Inc (TTI.N) warned it may not reach its capital expenditure forecast of $127 million for 2010 amid the uncertainty over drilling in the Gulf of Mexico, sending its shares down 17 percent.

"We are running behind the pace we had indicated in the guidance at the beginning of the year. I think we will catch up somewhat in the second half of the year, but I would not be surprised if we came in a bit shy of the guidance," the company said on a conference call with analysts.

The offshore segment took a hit from the oil spill and the drilling moratorium in the Gulf of Mexico as the utilization of key assets and services in the region were hurt. These trends could spill into the third quarter as well, the company said.

"Although many of our international markets continued to grow (during the second quarter), our operations in Mexico were affected by reduced activity levels in certain regions of the country," Chief Executive Stuart Brightman said.

Shares of the company, which fell to $8.69 in late morning trade Thursday, were trading down 15 percent at $8.88 midday on the New York Stock Exchange.

Earlier in the day, Tetra posted second-quarter earnings that beat analyst estimates, buoyed by continued improvement in its domestic onshore business.

In the latest second quarter, the company posted a net income of $13.6 million, or 18 cents a share, compared with $9.2 million, or 12 cents a share, a year ago. [ID:nASA00M82]

Including a non-cash charge of about 8 cents a share related to the impairment of certain oil and gas properties, the company earned 26 cents a share.

The company said it expects continued growth in onshore activity with particular emphasis on the shale plays. (Reporting by Antonita Madonna Devotta in Bangalore; Editing by Unnikrishnan Nair)