EX-99.1 2 a2151281zex-99_1.htm EXHIBIT 99.1
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Exhibit 99.1

         
GRAPHIC   Contacts:   Bill Hibbetts, Senior VP & CFO
Pioneer Drilling Company
210-828-7689


Ken Dennard / ksdennard@drg-e.com
Lisa Elliott / lelliott@drg-e.com
DRG&E / 713-529-6600


PIONEER DRILLING REPORTS
FISCAL THIRD QUARTER RESULTS
Third quarter revenues were up 76%
Third quarter net income was $0.11 per diluted share

FEBRUARY 7, 2005—SAN ANTONIO, TEXAS—Pioneer Drilling Company (AMEX: PDC) today reported results for the third quarter and nine months ended December 31, 2004.

        Revenues for the third quarter of the fiscal year ending March 31, 2005 grew to $46.4 million, compared to revenues of $26.4 million in the third quarter of fiscal 2004. This 76% increase in revenues was due to an improvement in rig revenue rates, a 43% increase in the average number of rigs in Pioneer's fleet and a 10% increase in Pioneer's rig utilization rate. Net earnings in the third quarter of 2005 were $4.2 million, or $0.11 per diluted share, versus a net loss of $522,000, or $0.02 loss per share, during the third quarter of fiscal 2004.

        Revenue days during the third quarter of fiscal 2005 grew 57% to 3,524, compared to 2,246 revenue days for the third quarter of fiscal 2004. Revenue days by type of contract in the third quarter of 2005 were 2,421 days for daywork contracts, 1,024 for turnkey contracts and 79 for footage contracts. Pioneer's rig utilization rate for the third quarter increased to 98%, up from 88% in the corresponding period last year.

        Wm. Stacy Locke, Pioneer's President and Chief Executive Officer, stated, "We are pleased to have produced such solid third-quarter results and look forward to continued strong performance over the next several quarters. Average dayrates for daywork contracts increased approximately $1,150 per day, or 13%, to approximately $10,250, up from average dayrates of approximately $9,100 for the quarter ending September 30, 2004. We anticipate that average dayrates will continue to increase in our fiscal fourth quarter ending March 31, 2005. Turnkey contracts comprised 29% of our revenue days in our fiscal third quarter, down from 43% from the quarter ended September 30, 2004."

        Revenues for the first nine months of fiscal year 2005 were $129.9 million, compared to revenues of $74.5 million for the first nine months of fiscal year 2004. Net earnings during the first nine months of 2005 were $5.3 million, or $0.16 per diluted share, compared to a net loss of $2.2 million, or $0.10 loss per share, during the first nine months of fiscal 2004.

        Revenue days were 9,687 days during the first nine months of fiscal 2005, compared to 6,268 days for the comparable period of fiscal 2004. Pioneer's rig utilization rate for the first nine months of fiscal 2005 was 96%, up from 87% in last year's nine-month period.

        Pioneer's management team will be holding a conference call on Tuesday, February 8, 2005, at 11:00 a.m., eastern time (10:00 a.m., central), to discuss these results. To participate in the call, dial (303) 262-0068 at least ten minutes before the conference call begins and ask for the Pioneer Drilling conference call. A replay of the call will be available approximately two hours after the call ends and will be accessible until February 15, 2005. To access the replay, dial (303) 590-3000 and enter the pass code 11023541#.

        Investors, analysts and the general public will also have the opportunity to listen to the conference call over the Internet by accessing Pioneer Drilling's Website at http://www.pioneerdrlg.com. To listen to the live call on the Internet, please visit Pioneer Drilling's Website at least fifteen minutes early to register, download and install any necessary audio software. For those who cannot listen to the live Webcast, an archive will be available shortly after the call. For more information, please contact Karen Roan at DRG&E at (713) 529-6600 or email kcroan@drg-e.com.


        Pioneer Drilling Company provides land contract drilling services to independent and major oil and gas operators drilling wells in North, East and South Texas, Western Oklahoma and in the Rocky Mountain region. Pioneer's fleet consists of 49 land drilling rigs that drill in depth ranges between 6,000 and 18,000 feet.

This press release contains various forward-looking statements and information that are based on management's belief, as well as assumptions made by and information currently available to management. Forward-looking information includes statements regarding the anticipated continuing increases in average dayrates and the gradual decline in turnkey contract revenue days as dayrates improve. Although the management of Pioneer Drilling believes that the expectations reflected in such forward-looking statements are reasonable, Pioneer Drilling can give no assurance that those expectations will prove to have been correct. Such statements are subject to various risks, uncertainties and assumptions, including, among other matters, risks and uncertainties relating to turnkey drilling contracts in progress. Should one or more of those risks materialize, or should underlying assumptions prove incorrect, actual results may vary materially from those expected. These risks, as well as others, are discussed in greater detail in Pioneer's filings with the Securities and Exchange Commission, including the Company's annual report on Form 10-K for the fiscal year ended March 31, 2004.

—Tables to Follow—

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PIONEER DRILLING COMPANY AND SUBSIDIARIES
Condensed Consolidated Statements of Operations
(in thousands, except per share data)
(Unaudited)

 
   Three Months Ended
   Nine Months Ended
  
 
   12/31/04
   12/31/03
   9/30/04
   12/31/04
   12/31/03
  
Contract drilling revenues   $ 46,388   $ 26,414   $ 42,783   $ 129,889   $ 74,509  
   
 
 
 
 
 
Costs and Expenses:                                
  Contract drilling     32,357     21,600     34,591     100,802     61,757  
  Depreciation     5,770     4,119     5,306     16,124     11,671  
  General and administrative     1,215     687     926     2,911     2,027  
  Bad debt expense     342     —     —     342     —  
   
 
 
 
 
 
    Total operating costs     39,684     26,406     40,823     120,179     75,455  
   
 
 
 
 
 
Operating income (loss)     6,704     8     1,960     9,710     (946 )
   
 
 
 
 
 
Other income (expense):                                
  Interest expense     (159 )   (683 )   (398 )   (1,275 )   (2,117 )
  Loss on early extinguishment of debt     —     —     (101 )   (101 )   —  
  Interest income     55     10     40     119     87  
  Other     7     25     12     22     65  
   
 
 
 
 
 
    Total other     (97 )   (648 )   (447 )   (1,235 )   (1,965 )
   
 
 
 
 
 
Income (loss) before taxes     6,607     (640 )   1,513     8,475     (2,911 )
Income tax benefit (expense)     (2,428 )   118     (590 )   (3,157 )   712  
   
 
 
 
 
 
Net earnings (loss)   $ 4,179   $ (522 ) $ 923   $ 5,318   $ (2,199 )
   
 
 
 
 
 
Earnings (loss) per share:                                
  Basic   $ 0.11   $ (0.02 ) $ 0.03   $ 0.16   $ (0.10 )
   
 
 
 
 
 
  Diluted   $ 0.11   $ (0.02 ) $ 0.03   $ 0.16   $ (0.10 )
   
 
 
 
 
 
Weighted average number of shares outstanding:                                
  Basic     38,428     22,203     33,211     33,001     21,984  
   
 
 
 
 
 
  Diluted     39,535     22,203     34,271     37,167     21,984  
   
 
 
 
 
 

3


PIONEER DRILLING COMPANY AND SUBSIDIARIES
Operating Statistics
(in thousands, except averages per day)
(Unaudited)

 
   Three Months Ended
   Nine Months Ended
  
 
   12/31/04
   12/31/03
   9/30/04
   12/31/04
   12/31/03
  
Average number of rigs     39.7     27.7     36.0     37.1     26.2  
Utilization rate     98 %   88 %   96 %   96 %   87 %
Revenue days by contract:                                
  Daywork contracts     2,421     1,524     1,674     5,680     4,072  
  Turnkey contracts     1,024     594     1,347     3,667     1,913  
  Footage contracts     79     128     145     340     283  
   
 
 
 
 
 
  Total     3,524     2,246     3,166     9,687     6,268  
   
 
 
 
 
 
Revenues by contract:                                
  Daywork contracts   $ 26,824   $ 14,524   $ 17,277   $ 59,277   $ 36,152  
  Turnkey contracts     18,544     10,624     23,821     66,235     35,185  
  Footage contracts     1,020     1,266     1,685     4,377     3,171  
   
 
 
 
 
 
  Total   $ 46,388   $ 26,414   $ 42,783   $ 129,889   $ 74,508  
   
 
 
 
 
 
Drilling costs by contract:                                
  Daywork contracts   $ 18,146   $ 11,912   $ 13,743   $ 44,401   $ 30,761  
  Turnkey contracts     13,582     8,575     19,476     53,153     28,444  
  Footage contracts     628     1,112     1,372     3,248     2,552  
   
 
 
 
 
 
  Total   $ 32,356   $ 21,599   $ 34,591   $ 100,802   $ 61,757  
   
 
 
 
 
 
Average revenues per day:                                
  Daywork contracts   $ 11,080   $ 9,530   $ 10,321   $ 10,436   $ 8,878  
  Turnkey contracts     18,109     17,886     17,684     18,062     18,393  
  Footage contracts     12,911     9,891     11,621     12,874     11,205  
   
 
 
 
 
 
  Total   $ 13,163   $ 11,760   $ 13,513   $ 13,409   $ 11,887  
   
 
 
 
 
 
Average costs per day:                                
  Daywork contracts   $ 7,495   $ 7,816   $ 8,210   $ 7,817   $ 7,554  
   
 
 
 
 
 
  Turnkey contracts     13,264     14,436     14,459     14,495     14,869  
   
 
 
 
 
 
  Footage contracts     7,949     8,688     9,462     9,553     9,018  
   
 
 
 
 
 
  Total   $ 9,182   $ 9,617   $ 10,926   $ 10,406   $ 9,853  
   
 
 
 
 
 
Capital expenditures:                                
  Rig additions   $ 39,027   $ 5,874   $ 1,628   $ 43,270   $ 19,170  
  Other     5,972     1,640     7,296     19,069     5,889  
   
 
 
 
 
 
    $ 44,999   $ 7,514   $ 8,924   $ 62,339   $ 25,059  
   
 
 
 
 
 

4


PIONEER DRILLING COMPANY AND SUBSIDIARIES
Condensed Consolidated Balance Sheets
(in thousands)

 
   12/31/2004
   3/31/2004
 
   (Unaudited)

    
Assets            
Current assets:            
  Cash and cash equivalents   $ 6,713   $ 6,366
  Receivables, net     19,924     10,902
  Contract drilling in progress     7,351     9,131
  Current deferred income taxes     426     285
  Prepaid expenses     2,061     1,336
   
 
    Total current assets     36,475     28,020
Net property and equipment     160,262     115,342
Other assets     1,337     369
   
 
Total assets   $ 198,074   $ 143,731
   
 
Liabilities and Equity            
Current liabilities:            
  Notes payable   $ 1,086   $ 558
  Current long-term debt     5,951     3,865
  Accounts payable     11,207     13,271
  Federal income taxes payable     70     —
  Accrued expenses     6,318     4,298
   
 
    Total current liabilities     24,632     21,992
Long-term debt     29,380     44,892
Other non-current liability     400     —
Deferred taxes     9,116     6,011
   
 
    Total liabilities     63,528     72,895
Total shareholders' equity     134,546     70,836
   
 
    $ 198,074   $ 143,731
   
 

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PIONEER DRILLING REPORTS FISCAL THIRD QUARTER RESULTS Third quarter revenues were up 76% Third quarter net income was $0.11 per diluted share
PIONEER DRILLING COMPANY AND SUBSIDIARIES Condensed Consolidated Statements of Operations (in thousands, except per share data) (Unaudited)
PIONEER DRILLING COMPANY AND SUBSIDIARIES Operating Statistics (in thousands, except averages per day) (Unaudited)
PIONEER DRILLING COMPANY AND SUBSIDIARIES Condensed Consolidated Balance Sheets (in thousands)