EX-99.1 2 a05-14290_1ex99d1.htm EX-99.1

Exhibit 99.1

 
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 RECORD
FISCAL FIRST QUARTER 2006 RESULTS

First quarter revenues were up 47% to $59.9 million

First quarter earnings per diluted share grew from $0.01 to $0.17

 

AUGUST 4, 2005 – SAN ANTONIO, TEXAS – Pioneer Drilling Company (AMEX: PDC) today reported results for the quarter ended June 30, 2005, which is the first quarter of its current fiscal year.

 

Revenues for the first quarter of fiscal 2006 grew to $59.9 million, compared to revenues of $40.7 million in the first quarter of fiscal 2005.  This 47% increase in revenues was due to an improvement in rig revenue rates resulting from an increase in demand for drilling rigs, a 42% increase in the average number of rigs in Pioneer Drilling’s fleet and a 2% increase in its rig utilization rate.  Net earnings in the first quarter of fiscal 2006 were $7.7 million, or $0.17 per diluted share, versus net earnings of $217,000, or $0.01 per diluted share, during the first quarter of fiscal 2005.   Weighted average shares of common stock outstanding on a diluted basis increased 65% to 46.8 million shares for the first quarter of fiscal 2006 from 28.3 million shares for the first quarter of fiscal 2005.

 

Revenue days during the first quarter of fiscal 2006 increased 44% to 4,303, compared to 2,997 revenue days for the first quarter of fiscal 2005.  As compared to a year ago, the revenue days by type of contract shifted significantly toward daywork contracts.  In the first quarter of fiscal 2006, the revenue days by type were 3,424 for daywork contracts, 462 for turnkey contracts and 417 for footage contracts.  In contrast, revenue days by type of contract in the first quarter of fiscal 2005 were 1,477 for daywork contracts, 1,376 for turnkey contracts and 144 for footage contracts.

 

Wm. Stacy Locke, Pioneer Drilling’s President and Chief Executive Officer, stated, “Demand for drilling services remained strong in each of our six operating divisions during the

 


 

first quarter.  Each month during the quarter, average revenues per day and average drilling margins per day increased over the prior month.  Sequentially, average revenues per day increased 6% to $13,915 per day in the first quarter, as compared to $13,158 per day in the fourth quarter of fiscal 2005.  Average revenues per day for daywork contracts increased approximately 10%  over the immediately preceeding quarter.  Average drilling margins per day increased 15% to $4,815 per day in the quarter, as compared to $4,202 per day in the fourth quarter of fiscal 2005.  We anticipate drilling margins to improve approximately 8% to 10% in the second quarter of fiscal 2006.

 

“Earlier this week, we commenced operations near Vernal, Utah with our 51st rig.  Rig 52, a 1000-hp diesel-electric rig, is a new prototype design for Pioneer Drilling. This rig is designed to be quick-to-move and rig-up, be environmentally friendly and does not require a crane for rig-up.  In less than 60 days, we will commence operations in Utah with Rig 53, a substantially identical rig to Rig 52.  All future rigs built by Pioneer in the 1000-hp to 1500-hp class that will have a new mast and substructure will use this new rig design,” added Mr. Locke.

 

“In addition to rigs 52 and 53 mentioned above, we are building two 1500-hp diesel-electric rigs for delivery in the third quarter of the current fiscal year.  Also, we anticipate building three more rigs, a 1500-hp diesel-electric rig and two 1000-hp diesel-electric rigs, prior to our March 31 fiscal year end.  All five of these new rigs will have minimum dayrates of $15,500 per day and a contract term of one year or greater,” concluded Mr. Locke.

 

Pioneer Drilling’s management team will be holding a conference call on Thursday, August 4, 2005, at 11:00 a.m., Eastern time (10:00 a.m., Central), to discuss these results.  To participate in the call, dial (303) 262-2051 at least 10 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 August 11, 2005.  To access the replay, dial (303) 590-3000 and enter the pass code 11035161#.

 

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 Web site at http://www.pioneerdrlg.com.  To listen to the live call on the Web, please visit Pioneer Drilling’s Web site at least 10 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 e-mail kcroan@drg-e.com.

 

Pioneer Drilling 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.  Its fleet consists of 51 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 drilling margins, the anticipated timing for commencement of operations for our Rig 53, our plans to add more drilling rigs to our fleet and the minimum dayrates and contract terms for those rigs and the rigs we have recently added to our fleet.  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 (“the SEC”), including the Company’s annual report on Form 10-K for the fiscal year ended March 31, 2005 and subsequent filings with the SEC.

 

-  Tables to Follow -

 


 

PIONEER DRILLING COMPANY AND SUBSIDIARIES

Condensed Consolidated Statements of Operations

(in thousands, except per share per data)

(Unaudited)

 

 

 

Three Months Ended

 

 

 

March 31,

 

June 30,

 

 

 

2005

 

2005

 

2004

 

Revenues:

 

 

 

 

 

 

 

Contract drilling

 

$

55,357

 

$

59,877

 

$

40,719

 

 

 

 

 

 

 

 

 

Costs and Expenses:

 

 

 

 

 

 

 

Contract drilling

 

37,681

 

39,158

 

33,854

 

Depreciation

 

6,967

 

7,330

 

5,048

 

General and administrative

 

1,646

 

1,487

 

770

 

Total operating costs

 

46,294

 

47,975

 

39,672

 

 

 

 

 

 

 

 

 

Operating income

 

9,063

 

11,902

 

1,047

 

 

 

 

 

 

 

 

 

Other income (expense):

 

 

 

 

 

 

 

Interest expense

 

(447

)

(155

)

(718

)

Interest income

 

55

 

501

 

24

 

Other

 

15

 

14

 

3

 

Total other

 

(377

)

360

 

(691

)

 

 

 

 

 

 

 

 

Income before taxes

 

8,686

 

12,262

 

356

 

 

 

 

 

 

 

 

 

Income tax expense

 

(3,193

)

(4,537

)

(139

)

 

 

 

 

 

 

 

 

Net earnings

 

$

5,493

 

$

7,725

 

$

217

 

 

 

 

 

 

 

 

 

Earnings per share:

 

 

 

 

 

 

 

Basic

 

$

0.14

 

$

0.17

 

$

0.01

 

Diluted

 

$

0.14

 

$

0.17

 

$

0.01

 

 

 

 

 

 

 

 

 

Weighted average number  of shares outstanding:

 

 

 

 

 

 

 

Basic

 

39,142

 

46,012

 

27,300

 

Diluted

 

40,029

 

46,765

 

28,274

 

 


 

PIONEER DRILLING COMPANY AND SUBSIDIARIES

Condensed Consolidated Balance Sheets

(in thousands)

 

 

 

(Unaudited)

 

 

 

 

 

June 30, 2005

 

March 31, 2005

 

Assets

 

 

 

 

 

Current assets:

 

 

 

 

 

Cash and cash equivalents

 

$

64,622

 

$

69,673

 

Marketable securities

 

—

 

1,000

 

Receivables, net

 

30,664

 

26,108

 

Contract drilling in progress

 

7,630

 

5,365

 

Current deferred income taxes

 

2,689

 

570

 

Prepaid expenses

 

1,433

 

1,877

 

Total current assets

 

107,038

 

104,593

 

 

 

 

 

 

 

Net property and equipment

 

182,947

 

170,566

 

Other assets

 

811

 

850

 

Total assets

 

$

290,796

 

$

276,009

 

 

 

 

 

 

 

Liabilities and Equity

 

 

 

 

 

Current liabilities:

 

 

 

 

 

Notes payable

 

$

137

 

$

682

 

Current long-term debt

 

4,726

 

4,733

 

Accounts payable

 

14,220

 

15,622

 

Federal income taxes payable

 

232

 

196

 

Prepaid drilling contracts

 

345

 

173

 

Accrued expenses

 

8,976

 

6,860

 

Total current liabilities

 

28,636

 

28,266

 

Long-term debt

 

12,262

 

13,445

 

Other non-current liability

 

400

 

400

 

Deferred taxes

 

17,449

 

12,283

 

Total liabilities

 

58,747

 

54,394

 

Total shareholders’ equity

 

232,049

 

221,615

 

 

 

$

290,796

 

$

276,009

 

 


 

PIONEER DRILLING COMPANY AND SUBSIDIARIES

Operating Statistics

(in thousands)

(Unaudited)

 

 

 

Three Months Ended

 

 

 

March 31,

 

June 30,

 

 

 

2005

 

2005

 

2004

 

 

 

 

 

 

 

 

 

Revenues by contract:

 

 

 

 

 

 

 

Daywork contracts

 

$

36,720

 

$

45,874

 

$

14,141

 

Turnkey contracts

 

13,976

 

8,593

 

24,619

 

Footage contracts

 

4,661

 

5,410

 

1,959

 

Total

 

$

55,357

 

$

59,877

 

$

40,719

 

 

 

 

 

 

 

 

 

Drilling costs by contract:

 

 

 

 

 

 

 

Daywork contracts

 

$

24,015

 

$

29,114

 

$

11,529

 

Turnkey contracts

 

10,268

 

6,161

 

20,860

 

Footage contracts

 

3,398

 

3,883

 

1,465

 

Total

 

$

37,681

 

$

39,158

 

$

33,854

 

 

 

 

 

 

 

 

 

Drilling margin by contract (1):

 

 

 

 

 

 

 

Daywork contracts

 

$

12,705

 

$

16,760

 

$

2,612

 

Turnkey contracts

 

3,708

 

2,432

 

3,759

 

Footage contracts

 

1,263

 

1,527

 

494

 

Total

 

$

17,676

 

$

20,719

 

$

6,865

 

 

 

 

 

 

 

 

 

Capital expenditures:

 

 

 

 

 

 

 

Rig additions

 

$

10,072

 

$

9,317

 

$

2,614

 

Other

 

7,977

 

11,557

 

5,802

 

 

 

$

18,049

 

$

20,874

 

$

8,416

 

 

 

 

 

 

 

 

 

Reconciliation of drilling margin to net  earnings:

 

 

 

 

 

 

 

Drilling margin

 

$

17,676

 

$

20,719

 

$

6,865

 

Depreciation

 

(6,967

)

(7,330

)

(5,048

)

General and administrative

 

(1,646

)

(1,487

)

(770

)

Other income (expense)

 

(377

)

360

 

(691

)

Income tax expense

 

(3,193

)

(4,537

)

(139

)

Net earnings

 

$

5,493

 

$

7,725

 

$

217

 

 

(1) Drilling margins represent drilling revenues less drilling costs

 


 

PIONEER DRILLING COMPANY AND SUBSIDIARIES

Operating Statistics

(Unaudited)

 

 

 

Three Months Ended

 

 

 

March 31,

 

June 30,

 

 

 

2005

 

2005

 

2004

 

 

 

 

 

 

 

 

 

Average number of rigs

 

49.0

 

50.0

 

35.3

 

Utilization rate

 

97

%

95

%

93

%

 

 

 

 

 

 

 

 

Revenue days by contract:

 

 

 

 

 

 

 

Daywork contracts

 

3,005

 

3,424

 

1,477

 

Turnkey contracts

 

804

 

462

 

1,376

 

Footage contracts

 

398

 

417

 

144

 

Total

 

4,207

 

4,303

 

2,997

 

 

 

 

 

 

 

 

 

Average revenues per day:

 

 

 

 

 

 

 

Daywork contracts

 

$

12,220

 

$

13,398

 

$

9,574

 

Turnkey contracts

 

$

17,383

 

$

18,600

 

$

17,892

 

Footage contracts

 

$

11,711

 

$

12,974

 

$

13,604

 

All contracts

 

$

13,158

 

$

13,915

 

$

13,587

 

 

 

 

 

 

 

 

 

Average costs per day:

 

 

 

 

 

 

 

Daywork contracts

 

$

7,992

 

$

8,503

 

$

7,806

 

Turnkey contracts

 

$

12,771

 

$

13,335

 

$

15,160

 

Footage contracts

 

$

8,538

 

$

9,312

 

$

10,174

 

All contracts

 

$

8,957

 

$

9,100

 

$

11,296

 

 

 

 

 

 

 

 

 

Drilling margin per day:

 

 

 

 

 

 

 

Daywork contracts

 

$

4,228

 

$

4,895

 

$

1,768

 

Turnkey contracts

 

$

4,612

 

$

5,264

 

$

2,732

 

Footage contracts

 

$

3,173

 

$

3,662

 

$

3,431

 

All contracts

 

$

4,202

 

$

4,815

 

$

2,291

 

 

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