EX-99.1 2 ex991-pr2019q3.htm EXHIBIT 99.1 Exhibit


Exhibit 99.1                    
logoa12.jpg
Contacts:
Dan Petro, CFA, Vice President, Treasury and Investor Relations
Pioneer Energy Services Corp.
(210) 828-7689

Lisa Elliott / pes@dennardlascar.com
Dennard Lascar Investor Relations / (713) 529-6600
Pioneer Energy Services
Reports Third Quarter 2019 Results
SAN ANTONIO, Texas, October 31, 2019 - Pioneer Energy Services (OTCQX: PESX) today reported financial and operating results for the quarter ended September 30, 2019. Third quarter highlights include:
•
Well servicing revenues increased 3% sequentially, and gross margin was 29.4%, up from 28.7% in the prior quarter.
•
International drilling fleet was 71% utilized and generated an average margin of $11,080 per day, roughly flat with the prior quarter.
•
Domestic drilling fleet was 88% utilized and generated an average margin of $11,740 per day, which included the benefit of approximately $1,374 per day for the early termination of a drilling contract.
Consolidated Financial Results
Revenues for the third quarter of 2019 were $146.4 million, down 4% from revenues of $152.8 million in the second quarter of 2019 (“the prior quarter”). Net loss for the third quarter of 2019 was $26.0 million, or $0.33 per share, compared with net loss of $12.9 million, or $0.17 per share, in the prior quarter. Adjusted net loss(1) for the third quarter was $23.6 million, and adjusted EPS(2) was a loss of $0.30 per share. These results compare to an adjusted net loss of $11.8 million, and an adjusted EPS loss of $0.15 per share in the prior quarter. Third quarter adjusted EBITDA(3) was $7.1 million, down from $20.7 million in the prior quarter. The decrease in adjusted EBITDA and adjusted net loss was primarily due to approximately $12.6 million of additional net general and administrative expenses related to new compensation plans, partially

1


offset by the cancellation of certain previously existing incentive plans, as well as professional fees incurred to evaluate debt restructuring strategies.
Operating Results
Production Services Business
Revenue from our production services business was $86.6 million in the third quarter, down 1% from the prior quarter. Well servicing revenues increased 3%, primarily driven by higher revenue rates and steady activity levels for both maintenance and completion activity. Well servicing average revenue per hour was $580 in the third quarter, up from $569 in the prior quarter, while rig utilization was 59%, down slightly from 60% in the prior quarter. Wireline services, which accounted for 51% of production services revenue, experienced a decrease in perforating stage count of approximately 6%, yielding a revenue decrease of 7%, much of which came from reduced activity in September. Coiled tubing services revenue increased 14% due to higher activity levels in the Rockies as wildlife activity limitations and poor weather conditions impacted the prior quarter. Coiled tubing revenue days totaled 339 in the third quarter, up from 307 in the prior quarter, while revenue per day was $36,714, up from $35,430 in the prior quarter.
Gross margin as a percentage of revenue from our production services business was 19% in the third quarter, up from 17% in the prior quarter. The increase in gross margin in all businesses was primarily due to actions taken to reduce labor and overhead costs to include the closure of certain wireline locations and repositioning of certain coiled tubing assets.
Drilling Services Business
Revenue from our drilling services business was $59.8 million in the third quarter, reflecting a decrease of 8% from the prior quarter. Average margin per day was $11,560, up from $10,396 in the prior quarter.
Our domestic drilling fleet was 88% utilized with average revenues per day of $27,598 in the third quarter, up from $26,864 in the prior quarter. Domestic drilling average margin per day was $11,740 in the third quarter, up from $10,131 in the prior quarter, primarily due to the benefit of $1.9 million, or approximately $1,374 per day, from recognition of the early termination of a domestic drilling contract.

2


International drilling rig utilization was 71% for the third quarter, down from 86% in the prior quarter, driven partially by one rig mobilizing to work for a new client during the quarter. Average revenues per day were $41,491, up from $40,806 in the prior quarter, while average margin per day for the third quarter was $11,080, up slightly from $11,023 in the prior quarter. The increases in revenue per day and margin per day were primarily due to the timing of mobilization and demobilization revenues recognized in the third quarter.
Currently, 15 of our 17 domestic drilling rigs are earning revenues, 12 of which are under term contracts. Ten rigs are working in the Permian, three in Appalachia and two in the Bakken. Of the rigs on term contracts, only one rig is set to expire later in the fourth quarter of 2019. Many of the recent contract renewals are for periods between six months and one year in length.
In Colombia, six of our eight rigs are currently earning revenue under daywork contracts. We expect four to six rigs to remain active for the remainder of 2019.
Comments from our President and CEO    
“While weaker oil prices and generally challenging market conditions have continued to negatively impact the U.S. rig count, which fell 10% from the prior quarter and 20% from the prior year, our domestic drilling and well servicing businesses have remained highly utilized, and we have successfully increased gross margins both sequentially and year-over-year,” said Wm. Stacy Locke, President and Chief Executive Officer. “We do anticipate the typical seasonal softening in well servicing activity during the fourth quarter, but we expect business to remain stable as our customers continue to appreciate our high-quality service offering. U.S. drilling activity should remain stable, although we anticipate continued dayrate pressure. We mobilized one rig from the Appalachian Basin to the Permian Basin in the third quarter under a term contract with a new client, and we continue to focus on positioning our equipment to generate optimum margins.
“Our international operations in Colombia experienced lower utilization sequentially as we mobilized one rig to a new client during the quarter, but we have maintained solid margins and expect the business to remain stable with four to six rigs operating during the fourth quarter. As we enter 2020, we anticipate favorable activity levels in the country as operators continue to execute on long term drilling programs.

3


“For the rest of the year, the remaining capital expenditures will be routine maintenance in nature. While the Term Loan is not expected to mature until December 2021, we continue to proactively explore various strategic and other alternatives to address the uncertainties related to our ability to refinance our outstanding debts as their maturities approach,” concluded Mr. Locke.
Fourth Quarter 2019 Guidance
In the fourth quarter of 2019, we expect rig count to continue to decline, reduced completion activity and overall less spending by our clients, as well as typical seasonal impacts. As a result, we expect revenue from our production services business segments to be down approximately 15% to 19% as compared to the third quarter of 2019 driven primarily by wireline. We expect margins to be approximately 16% to 18% of revenue.
We expect domestic drilling services rig utilization to average approximately 90% to 94% and generate average margins per day of approximately $8,700 to $9,200 given recent dayrate renewal pressure in the U.S. In Colombia, we expect international drilling services rig utilization to average approximately 60% to 65% and generate average margins per day of approximately $8,500 to $9,500.
We expect general and administrative expense to be approximately $21 million in the fourth quarter of 2019, which includes approximately $2 million to $3 million in professional fees related to debt restructuring activities.
Liquidity
Working capital at September 30, 2019 was $97.5 million, down from $106.5 million at June 30, 2019 and $110.3 million at December 31, 2018. Cash and cash equivalents, including restricted cash, were $28.0 million, down from $31.1 million at June 30, 2019 and $54.6 million at year-end 2018. During the nine months ended September 30, 2019, we used $40.5 million of cash for routine capital expenditures and the purchase of property and equipment, and our cash provided by operations was $8.6 million.

4


Capital Expenditures
Cash capital expenditures during the nine months ended September 30, 2019 were $40.5 million, including capitalized interest. We estimate total cash capital expenditures for 2019 to be approximately $46 million to $49 million, which includes approximately $8 million for final payments on the construction of the new-build drilling rig and previous commitments on high-pressure pump packages for coiled tubing completion operations, all of which were made earlier in the year.
Conference Call
Pioneer Energy Services' management team will hold a conference call today at 11:00 a.m. Eastern Time (10:00 a.m. Central Time) to discuss these results. To participate, dial (412) 902-0003 approximately 10 minutes prior to the call and ask for the Pioneer Energy Services conference call. A telephone replay will be available after the call until November 7th. To access the replay, dial (201) 612-7415 and enter the pass code 13695038.
The conference call will also be webcast on the Internet and accessible from Pioneer Energy Services' web site at www.pioneeres.com. To listen to the live call, visit our web site at least 10 minutes early to register and download any necessary audio software. For more information, please contact Donna Washburn at Dennard Lascar Investor Relations at (713) 529-6600 or e-mail dwashburn@dennardlascar.com.
About Pioneer
Pioneer Energy Services provides well servicing, wireline, and coiled tubing services to producers primarily in Texas and the Mid-Continent and Rocky Mountain regions. Pioneer also provides contract land drilling services to oil and gas operators in Texas, Appalachia and Rocky Mountain regions and internationally in Colombia.

Cautionary Statement Regarding Forward-Looking Statements,
Non-GAAP Financial Measures and Reconciliations

Statements we make in this news release that express a belief, expectation or intention, as well as those that are not historical fact, are forward-looking statements made in good faith that are subject to risks, uncertainties and assumptions. These forward-looking statements are based on our current beliefs, intentions, and expectations and are not guarantees or indicators of future performance. Our actual results, performance or achievements, or industry

5


results, could differ materially from those we express in the foregoing discussion as a result of a variety of factors, including general economic and business conditions and industry trends, levels and volatility of oil and gas prices, the continued demand for drilling services or production services in the geographic areas where we operate, decisions about exploration and development projects to be made by oil and gas exploration and production companies, the highly competitive nature of our business, technological advancements and trends in our industry and improvements in our competitors' equipment, the loss of one or more of our major clients or a decrease in their demand for our services, future compliance with covenants under debt agreements, including our senior secured term loan, our senior secured revolving asset-based credit facility, and our senior notes, operating hazards inherent in our operations, the supply of marketable drilling rigs, well servicing rigs, coiled tubing units and wireline units within the industry, the continued availability of new components for drilling rigs, well servicing rigs, coiled tubing units and wireline units, the continued availability of qualified personnel, the success or failure of our acquisition strategy, the occurrence of cybersecurity incidents, the political, economic, regulatory and other uncertainties encountered by our operations, and changes in, or our failure or inability to comply with, governmental regulations, including those relating to the environment. We have discussed many of these factors in more detail in our Annual Report on Form 10-K for the year ended December 31, 2018, including under the headings “Risk Factors” in Item 1A and “Special Note Regarding Forward-Looking Statements” in the Introductory Note to Part I. These factors are not necessarily all the important factors that could affect us. Other unpredictable or unknown factors could also have material adverse effects on actual results of matters that are the subject of our forward-looking statements. All forward-looking statements speak only as of the date on which they are made and we undertake no obligation to publicly update or revise any forward-looking statements whether as a result of new information, future events or otherwise. We advise our shareholders that they should (1) recognize that important factors not referred to above could affect the accuracy of our forward-looking statements and (2) use caution and common sense when considering our forward-looking statements.

This news release contains non-GAAP financial measures as defined by SEC Regulation G. A reconciliation of each such measure to its most directly comparable U.S. Generally Accepted Accounting Principles (GAAP) financial measure, together with an explanation of why management believes that these non-GAAP financial measures provide useful information to investors, is provided in the following tables.
_________________________________
 
(1)
Adjusted net loss represents net loss as reported adjusted to exclude impairments and the related tax benefit and valuation allowance adjustments on deferred tax assets. We believe that adjusted net loss is a useful measure to facilitate period-to-period comparisons of our core operating performance and to evaluate our long-term financial performance against that of our peers, although it is not a measure of financial performance under GAAP. Adjusted net loss may not be comparable to other similarly titled measures reported by other companies. A reconciliation of net loss as reported to adjusted net loss is included in the tables to this news release.

(2)
Adjusted (diluted) EPS represents adjusted net loss divided by the weighted-average number of shares outstanding during the period, including the effect of dilutive securities, if any. We believe that adjusted (diluted) EPS is a useful measure to facilitate period-to-period comparisons of our core operating performance and to evaluate our long-term financial performance against that of our peers, although it is not a measure of financial performance under GAAP. Adjusted (diluted) EPS may not be comparable to other similarly titled measures reported by other companies. A reconciliation of diluted EPS as reported to adjusted (diluted) EPS is included in the tables to this news release.

(3)
Adjusted EBITDA represents income (loss) before interest expense, income tax (expense) benefit, depreciation and amortization, impairment, and any loss on extinguishment of debt. Adjusted EBITDA is a non-GAAP measure that our management uses to facilitate period-to-period comparisons of our core operating performance and to evaluate our long-term financial performance against that of our peers. We believe that this measure is useful to investors and analysts in allowing for greater transparency of our core operating performance and makes it easier to compare our results with those of other companies within our industry. Adjusted EBITDA should not be considered (a) in isolation of, or as a substitute for, net income (loss), (b) as an indication of cash flows from operating activities or (c) as a measure of liquidity. In addition, Adjusted EBITDA does not represent funds available for discretionary use. Adjusted EBITDA may not be comparable to other similarly titled measures reported by other companies. A reconciliation of net loss as reported to adjusted EBITDA is included in the tables to this news release.


- Financial Statements and Operating Information Follow -

6


PIONEER ENERGY SERVICES CORP. AND SUBSIDIARIES
Condensed Consolidated Statements of Operations
(in thousands, except per share data)
(unaudited)

 
Three months ended
 
Nine months ended
 
September 30,
 
June 30,
 
September 30,
 
2019
 
2018
 
2019
 
2019
 
2018
 

 

 
 
 
 
 
 
 
 
 
 
Revenues
$
146,398

 
$
149,332

 
$
152,843

 
$
445,809

 
$
448,592

 
 
 
 
 
 
 
 
 
 
Costs and expenses:
 
 
 
 
 
 
 
 
 
Operating costs
108,059

 
108,961

 
115,970

 
332,614

 
325,924

Depreciation
22,924

 
23,501

 
22,851

 
68,428

 
70,535

General and administrative
30,485

 
14,043

 
18,028

 
68,271

 
58,066

Bad debt expense (recovery), net
196

 
111

 
(348
)
 
(90
)
 
(311
)
Impairment
—

 
239

 
332

 
1,378

 
2,607

Loss (gain) on dispositions of property and equipment, net
17

 
(1,861
)
 
(1,126
)
 
(2,184
)
 
(2,922
)
Total costs and expenses
161,681

 
144,994

 
155,707

 
468,417

 
453,899

Income (loss) from operations
(15,283
)
 
4,338

 
(2,864
)
 
(22,608
)
 
(5,307
)
 
 
 
 
 
 
 
 
 
 
Other income (expense):
 
 
 
 
 
 
 
 
 
Interest expense, net of interest capitalized
(10,013
)
 
(9,811
)
 
(10,105
)
 
(30,003
)
 
(28,966
)
Other income (expense), net
(588
)
 
498

 
349

 
445

 
1,046

Total other expense, net
(10,601
)
 
(9,313
)
 
(9,756
)
 
(29,558
)
 
(27,920
)
 
 
 
 
 
 
 
 
 
 
Loss before income taxes
(25,884
)
 
(4,975
)
 
(12,620
)
 
(52,166
)
 
(33,227
)
Income tax expense
(132
)
 
(258
)
 
(324
)
 
(1,909
)
 
(1,297
)
Net loss
$
(26,016
)
 
$
(5,233
)
 
$
(12,944
)
 
$
(54,075
)
 
$
(34,524
)
 
 
 
 
 
 
 
 
 
 
Loss per common share:
 
 
 
 
 
 
 
 
 
Basic
$
(0.33
)
 
$
(0.07
)
 
$
(0.17
)
 
$
(0.69
)
 
$
(0.44
)
Diluted
$
(0.33
)
 
$
(0.07
)
 
$
(0.17
)
 
$
(0.69
)
 
$
(0.44
)
 
 
 
 
 
 
 
 
 
 
Weighted-average number of shares outstanding:
 
 
 
 
 
 
 
 
 
Basic
78,473

 
78,136

 
78,430

 
78,405

 
77,897

Diluted
78,473

 
78,136

 
78,430

 
78,405

 
77,897





7


PIONEER ENERGY SERVICES CORP. AND SUBSIDIARIES
Condensed Consolidated Balance Sheets
(in thousands)

 
September 30,
2019
 
December 31,
2018
 
(unaudited)
 
(audited)
ASSETS
 
 
 
Current assets:
 
 
 
Cash and cash equivalents
$
26,955

 
$
53,566

Restricted cash
998

 
998

Receivables, net of allowance for doubtful accounts
132,552

 
130,881

Inventory
22,086

 
18,898

Assets held for sale
6,233

 
3,582

Prepaid expenses and other current assets
6,991

 
7,109

Total current assets
195,815

 
215,034

 
 
 
 
Net property and equipment
485,255

 
524,858

Operating lease assets
7,692

 
—

Other noncurrent assets
931

 
1,658

Total assets
$
689,693

 
$
741,550

 
 
 
 
LIABILITIES AND SHAREHOLDERS’ EQUITY
 
 
 
Current liabilities:
 
 
 
Accounts payable
$
32,127

 
$
34,134

Deferred revenues
1,616

 
1,722

Accrued expenses
64,559

 
68,912

Total current liabilities
98,302

 
104,768

 
 
 
 
Long-term debt, less unamortized discount and debt issuance costs
466,887

 
464,552

Noncurrent operating lease liabilities
6,189

 
—

Deferred income taxes
4,708

 
3,688

Other noncurrent liabilities
459

 
3,484

Total liabilities
576,545

 
576,492

Total shareholders’ equity
113,148

 
165,058

Total liabilities and shareholders’ equity
$
689,693

 
$
741,550



8


PIONEER ENERGY SERVICES CORP. AND SUBSIDIARIES
Condensed Consolidated Statements of Cash Flows
(in thousands)
(unaudited)
 
 
Nine months ended
 
September 30,
 
2019
 
2018
 
 
 
 
Cash flows from operating activities:
 
 
 
Net loss
$
(54,075
)
 
$
(34,524
)
Adjustments to reconcile net loss to net cash provided by operating activities:
 
 
 
Depreciation
68,428

 
70,535

Allowance for doubtful accounts, net of recoveries
(90
)
 
(311
)
Write-off of obsolete inventory
502

 
—

Gain on dispositions of property and equipment, net
(2,184
)
 
(2,922
)
Stock-based compensation expense
2,013

 
3,395

Phantom stock compensation expense
(99
)
 
2,808

Amortization of debt issuance costs and discount
2,335

 
2,153

Impairment
1,378

 
2,607

Deferred income taxes
1,020

 
189

Change in other noncurrent assets
3,125

 
541

Change in other noncurrent liabilities
(4,163
)
 
(735
)
Changes in current assets and liabilities:
(9,552
)
 
(22,246
)
Net cash provided by operating activities
8,638

 
21,490

 
 
 
 
Cash flows from investing activities:
 
 
 
Purchases of property and equipment
(40,543
)
 
(48,778
)
Proceeds from sale of property and equipment
4,778

 
4,665

Proceeds from insurance recoveries
641

 
980

Net cash used in investing activities
(35,124
)
 
(43,133
)
 
 
 
 
Cash flows from financing activities:
 
 
 
Proceeds from exercise of options
—

 
12

Purchase of treasury stock
(125
)
 
(549
)
Net cash used in financing activities
(125
)
 
(537
)
 
 
 
 
Net decrease in cash, cash equivalents and restricted cash
(26,611
)
 
(22,180
)
Beginning cash, cash equivalents and restricted cash
54,564

 
75,648

Ending cash, cash equivalents and restricted cash
$
27,953

 
$
53,468



9


PIONEER ENERGY SERVICES CORP. AND SUBSIDIARIES
Operating Results by Segment
(in thousands)
(unaudited)
 
Three months ended
 
Nine months ended
 
September 30,
 
June 30,
 
September 30,
 
2019
 
2018
 
2019
 
2019
 
2018
Revenues:
 
 
 
 
 
 
 
 
 
Domestic drilling
$
38,168

 
$
36,586

 
$
39,652

 
$
115,829

 
$
108,146

International drilling
21,617

 
23,131

 
25,422

 
68,682

 
62,515

Drilling services
59,785

 
59,717

 
65,074

 
184,511

 
170,661

Well servicing
30,293

 
24,369

 
29,506

 
86,053

 
68,645

Wireline services
43,874

 
52,654

 
47,386

 
137,134

 
171,392

Coiled tubing services
12,446

 
12,592

 
10,877

 
38,111

 
37,894

Production services
86,613

 
89,615

 
87,769

 
261,298

 
277,931

Consolidated revenues
$
146,398

 
$
149,332

 
$
152,843

 
$
445,809

 
$
448,592

 
 
 
 
 
 
 
 
 
 
Operating costs:
 
 
 
 
 
 
 
 
 
Domestic drilling
$
21,931

 
$
21,650

 
$
24,698

 
$
69,098

 
$
64,297

International drilling
15,844

 
19,013

 
18,555

 
50,884

 
49,038

Drilling services
37,775

 
40,663

 
43,253

 
119,982

 
113,335

Well servicing
21,414

 
17,193

 
21,038

 
61,348

 
49,443

Wireline services
38,349

 
40,840

 
41,804

 
119,500

 
130,042

Coiled tubing services
10,521

 
10,265

 
9,875

 
31,784

 
33,104

Production services
70,284

 
68,298

 
72,717

 
212,632

 
212,589

Consolidated operating costs
$
108,059

 
$
108,961

 
$
115,970

 
$
332,614

 
$
325,924

 
 
 
 
 
 
 
 
 
 
Gross margin:
 
 
 
 
 
 
 
 
 
Domestic drilling
$
16,237

 
$
14,936

 
$
14,954

 
$
46,731

 
$
43,849

International drilling
5,773

 
4,118

 
6,867

 
17,798

 
13,477

Drilling services
22,010

 
19,054

 
21,821

 
64,529

 
57,326

Well servicing
8,879

 
7,176

 
8,468

 
24,705

 
19,202

Wireline services
5,525

 
11,814

 
5,582

 
17,634

 
41,350

Coiled tubing services
1,925

 
2,327

 
1,002

 
6,327

 
4,790

Production services
16,329

 
21,317

 
15,052

 
48,666

 
65,342

Consolidated gross margin
$
38,339

 
$
40,371

 
$
36,873

 
$
113,195

 
$
122,668

 
 
 
 
 
 
 
 
 
 
Consolidated:
 
 
 
 
 
 
 
 
 
Net loss
$
(26,016
)
 
$
(5,233
)
 
$
(12,944
)
 
$
(54,075
)
 
$
(34,524
)
Adjusted EBITDA (1)
$
7,053

 
$
28,576

 
$
20,668

 
$
47,643

 
$
68,881


(1)Adjusted EBITDA represents income (loss) before interest expense, income tax (expense) benefit, depreciation and amortization, impairment, and any loss on extinguishment of debt. Adjusted EBITDA is a non-GAAP measure that our management uses to facilitate period-to-period comparisons of our core operating performance and to evaluate our long-term financial performance against that of our peers. We believe that this measure is useful to investors and analysts in allowing for greater transparency of our core operating performance and makes it easier to compare our results with those of other companies within our industry. Adjusted EBITDA should not be considered (a) in isolation of, or as a substitute for, net income (loss), (b) as an indication of cash flows from operating activities or (c) as a measure of liquidity. In addition, Adjusted EBITDA does not represent funds available for discretionary use. Adjusted EBITDA may not be comparable to other similarly titled measures reported by other companies. A reconciliation of net loss as reported to adjusted EBITDA is included in the table on page 12.


10


PIONEER ENERGY SERVICES CORP. AND SUBSIDIARIES
Operating Statistics
(unaudited)
 
Three months ended
 
Nine months ended
 
September 30,
 
June 30,
 
September 30,
 
2019
 
2018
 
2019
 
2019
 
2018
 
 
 
 
 
 
 
 
 
 
Domestic drilling:
 
 
 
 
 
 
 
 
 
Average number of drilling rigs
17

 
16

 
17

 
17

 
16

Utilization rate
88
%
 
99
%
 
95
%
 
94
%
 
100
%
Revenue days
1,383

 
1,459

 
1,476

 
4,279

 
4,353

 
 
 
 
 
 
 
 
 
 
Average revenues per day
$
27,598

 
$
25,076

 
$
26,864

 
$
27,069

 
$
24,844

Average operating costs per day
15,858

 
14,839

 
16,733

 
16,148

 
14,771

Average margin per day
$
11,740

 
$
10,237

 
$
10,131

 
$
10,921

 
$
10,073

 
 
 
 
 
 
 
 
 
 
International drilling:
 
 
 
 
 
 
 
 
 
Average number of drilling rigs
8

 
8

 
8

 
8

 
8

Utilization rate
71
%
 
76
%
 
86
%
 
79
%
 
79
%
Revenue days
521

 
562

 
623

 
1,724

 
1,733

 
 
 
 
 
 
 
 
 
 
Average revenues per day
$
41,491

 
$
41,158

 
$
40,806

 
$
39,839

 
$
36,073

Average operating costs per day
30,411

 
33,831

 
29,783

 
29,515

 
28,297

Average margin per day
$
11,080

 
$
7,327

 
$
11,023

 
$
10,324

 
$
7,776

 
 
 
 
 
 
 
 
 
 
Drilling services business:
 
 
 
 
 
 
 
 
 
Average number of drilling rigs
25

 
24

 
25

 
25

 
24

Utilization rate
83
%
 
92
%
 
92
%
 
89
%
 
93
%
Revenue days
1,904

 
2,021

 
2,099

 
6,003

 
6,086

 
 
 
 
 
 
 
 
 
 
Average revenues per day
$
31,400

 
$
29,548

 
$
31,002

 
$
30,736

 
$
28,042

Average operating costs per day
19,840

 
20,120

 
20,606

 
19,987

 
18,622

Average margin per day
$
11,560

 
$
9,428

 
$
10,396

 
$
10,749

 
$
9,420

 
 
 
 
 
 
 
 
 
 
Well servicing:
 
 
 
 
 
 
 
 
 
Average number of rigs
125

 
125

 
125

 
125

 
125

Utilization rate
59
%
 
51
%
 
60
%
 
58
%
 
49
%
Rig hours
52,210

 
44,155

 
51,895

 
151,169

 
127,800

Average revenue per hour
$
580

 
$
552

 
$
569

 
$
569

 
$
537

 
 
 
 
 
 
 
 
 
 
Wireline services:
 
 
 
 
 
 
 
 
 
Average number of units
94

 
104

 
95

 
98

 
107

Number of jobs
2,077

 
2,684

 
2,278

 
6,697

 
8,536

Average revenue per job
$
21,124

 
$
19,618

 
$
20,802

 
$
20,477

 
$
20,079

 
 
 
 
 
 
 
 
 
 
Coiled tubing services:
 
 
 
 
 
 
 
 
 
Average number of units
9

 
11

 
9

 
9

 
13

Revenue days
339

 
362

 
307

 
997

 
1,126

Average revenue per day
$
36,714

 
$
34,785

 
$
35,430

 
$
38,226

 
$
33,654





11


PIONEER ENERGY SERVICES CORP. AND SUBSIDIARIES
Reconciliation of Net Loss to Adjusted EBITDA
and Consolidated Gross Margin
(in thousands)
(unaudited)

 
Three months ended
 
Nine months ended
 
September 30,
 
June 30,
 
September 30,
 
2019
 
2018
 
2019
 
2019
 
2018
 
 
 
 
 
 
 
 
 
 
Net loss as reported
$
(26,016
)
 
$
(5,233
)
 
$
(12,944
)
 
$
(54,075
)
 
$
(34,524
)
 
 
 
 
 
 
 
 
 
 
Depreciation and amortization
22,924

 
23,501

 
22,851

 
68,428

 
70,535

Impairment
—

 
239

 
332

 
1,378

 
2,607

Interest expense
10,013

 
9,811

 
10,105

 
30,003

 
28,966

Income tax expense
132

 
258

 
324

 
1,909

 
1,297

Adjusted EBITDA(1)
7,053

 
28,576

 
20,668

 
47,643

 
68,881

 
 
 
 
 
 
 
 
 
 
General and administrative
30,485

 
14,043

 
18,028

 
68,271

 
58,066

Bad debt expense (recovery), net
196

 
111

 
(348
)
 
(90
)
 
(311
)
Loss (gain) on dispositions of property and equipment, net
17

 
(1,861
)
 
(1,126
)
 
(2,184
)
 
(2,922
)
Other expense (income)
588

 
(498
)
 
(349
)
 
(445
)
 
(1,046
)
Consolidated gross margin
$
38,339

 
$
40,371

 
$
36,873

 
$
113,195

 
$
122,668



12


PIONEER ENERGY SERVICES CORP. AND SUBSIDIARIES
Reconciliation of Net Income (Loss) as Reported to Adjusted Net Income (Loss)
and Diluted EPS as Reported to Adjusted (Diluted) EPS
(in thousands, except per share data)
(unaudited)
 
Three months ended
 
September 30,
 
June 30,
 
2019
 
2019
 
 
 
 
Net loss as reported
$
(26,016
)
 
$
(12,944
)
Impairment
—

 
332

Tax benefit related to adjustments
—

 
(77
)
Valuation allowance adjustments on deferred tax assets
2,465

 
884

Adjusted net loss(2)
$
(23,551
)
 
$
(11,805
)
 
 
 
 
Basic weighted average number of shares outstanding, as reported
78,473

 
78,430

Effect of dilutive securities
—

 
—

Diluted weighted average number of shares outstanding, as adjusted
78,473

 
78,430

 
 
 
 
Adjusted (diluted) EPS(3)
$
(0.30
)
 
$
(0.15
)
 
 
 
 
Diluted EPS as reported
$
(0.33
)
 
$
(0.17
)

(2)Adjusted net loss represents net loss as reported adjusted to exclude impairments and the related tax benefit and valuation allowance adjustments on deferred tax assets. We believe that adjusted net loss is a useful measure to facilitate period-to-period comparisons of our core operating performance and to evaluate our long-term financial performance against that of our peers, although it is not a measure of financial performance under GAAP. Adjusted net loss may not be comparable to other similarly titled measures reported by other companies. A reconciliation of net loss as reported to adjusted net loss is included in the table above.

(3)Adjusted (diluted) EPS represents adjusted net loss divided by the weighted-average number of shares outstanding during the period, including the effect of dilutive securities, if any. We believe that adjusted (diluted) EPS is a useful measure to facilitate period-to-period comparisons of our core operating performance and to evaluate our long-term financial performance against that of our peers, although it is not a measure of financial performance under GAAP. Adjusted (diluted) EPS may not be comparable to other similarly titled measures reported by other companies. A reconciliation of diluted EPS as reported to adjusted (diluted) EPS is included in the table above.


13


PIONEER ENERGY SERVICES CORP. AND SUBSIDIARIES
Equipment Information
As of October 31, 2019


 
Multi-well, Pad-capable
Drilling Services Business Segments:
AC rigs
 
SCR rigs
 
Total
Domestic drilling
17

 
—

 
17

International drilling
—

 
8

 
8

 
 
 
 
 
25

 
 
 
 
 
 
Production Services Business Segments:
550 HP
 
600 HP
 
Total
Well servicing rigs, by horsepower (HP) rating
112

 
12

 
124

 
 
 
 
 
 
 
 
 
 
 
Total
Wireline services units
 
93

Coiled tubing services units
 
9



14