8-K

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 8-K

CURRENT REPORT

Pursuant to Section 13 or 15(d) of

the Securities Exchange Act of 1934

Date of Report (date of earliest event reported): November 3, 2005

PIONEER DRILLING COMPANY

(Exact name of registrant as specified in its charter)

Texas	1-8182	74-2088619
(State or other jurisdiction of incorporation)	(Commission File Number)	(I.R.S. Employer Identification No.)

1250 N.E. Loop 410, Suite 1000 San Antonio, Texas	78209
(Address of principal executive offices)	(Zip Code)

Registrant’s telephone number, including area code: (210) 828-7689

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

¨ Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

¨ Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

¨ Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

¨ Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Item 2.02 Results of Operations and Financial Condition

On November 3, 2005, we issued a press release announcing our results of operations for the second quarter of our fiscal year ending March 31, 2006. A copy of that press release is furnished as Exhibit 99.1 to this report and is incorporated by reference herein.

We presented drilling margin information in the press release furnished as an exhibit to this report, which is a “non-GAAP” financial measure under Regulation G of the rules and regulations of the Securities and Exchange Commission. In the press release and in accordance with Regulation G, we included a reconciliation of drilling margin to net earnings, which is the nearest comparable GAAP financial measure. However, because drilling margin is not prescribed by GAAP, it is not necessarily comparable to similar measures presented by other companies. We included drilling margin in the press release because we believe drilling margin provides investors and our management additional information to assist them in assessing our business and performance in comparison to other companies in the same industry.

The information pursuant to this Item 2.02, including Exhibit 99.1, shall not be deemed to be “filed” for the purposes of Section 18 of the Securities Exchange Act of 1934, as amended, and will not be incorporated by reference into any registration statement filed under the Securities Act of 1933, as amended, unless specifically identified therein as being incorporated therein by reference.

Item 9.01. Financial Statements and Exhibits

(c) Exhibits

99.1 Press release issued by Pioneer Drilling Company on November 3, 2005

2

SIGNATURE

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

PIONEER DRILLING COMPANY
By:	/s/ William D. Hibbetts
	William D. Hibbetts
	Senior Vice President and Chief Financial Officer

Date: November 3, 2005

3

EXHIBIT INDEX

No.	Description
99.1	Press release issued by Pioneer Drilling Company, dated November 3, 2005.

4

EX-99.1

		Exhibit 99.1
	Contacts:	Bill Hibbetts, Senior VP & CFO Pioneer Drilling Company 210-828-7689
FOR IMMEDIATE RELEASE		Ken Dennard / ksdennard@drg-e.com Lisa Elliott / lelliott@drg-e.com DRG&E / 713-529-6600

PIONEER DRILLING REPORTS RECORD

FISCAL SECOND QUARTER 2006 RESULTS

Second quarter revenues were up 57% to $67 million

Second quarter earnings per diluted share increased from $0.03 to $0.24

Rig-building program expanded from 5 to 13 rigs

NOVEMBER 3, 2005 – SAN ANTONIO, TEXAS – Pioneer Drilling Company (AMEX: PDC) today reported results for the three months ended September 30, 2005, which is the second quarter of its current fiscal year.

Revenues for the second quarter of fiscal 2006 grew to $67.0 million, compared to revenues of $42.8 million in the second quarter of fiscal 2005. This 57% increase in revenues was due to an 11.5% increase in average revenues per day for all contracts to $15,064 per day, coupled with a 41% increase in the average number of rigs in Pioneer Drilling’s fleet. The growing demand for rigs in the Company’s operating markets continued to drive improvement in drilling margins⁽¹⁾, resulting in an increase of 132% in average drilling margin per day for all contracts to $6,004 in the second quarter of fiscal 2006 compared to $2,587 in the second quarter of fiscal 2005 and an increase of 25% in average drilling margin per day for all contracts compared to the first quarter of fiscal 2006. Net earnings in the second quarter of fiscal 2006 were $11.1 million, or $0.24 per diluted share, versus net earnings of $923,000, or $0.03 per diluted share, for the second quarter of fiscal 2005. Weighted average shares of common stock outstanding on a diluted basis increased 37% to 47.1 million shares for the second quarter of fiscal 2006 from 34.3 million shares for the second quarter of fiscal 2005.

Revenue days during the second quarter of fiscal 2006 increased 40% to 4,446, compared to 3,166 revenue days for the second quarter of fiscal 2005. As compared to a year ago, the revenue days by type of contract shifted significantly toward daywork contracts. In the second quarter of fiscal 2006, the revenue days by type were 3,942 for daywork contracts, 96 for turnkey contracts and 408 for footage contracts. In contrast, revenue days by type of contract in the second quarter of fiscal 2005 were 1,674 for daywork contracts, 1,347 for turnkey contracts and 145 for footage contracts.

Wm. Stacy Locke, Pioneer Drilling’s President and Chief Executive Officer, stated, “To meet the needs of our customers’ expanding drilling budgets, we have increased our rig-building program from five to 13 rigs. The rigs will be spread between our two divisions in the Rockies and our three divisions in Texas. Three of the rigs will be 1500-horsepower and the remainder will be 1000-horsepower. Twelve of the 13 rigs will be diesel electric. The first rig began operations in early October and the second rig should be working under contract by mid-November, with the remaining 11 rigs expected to be placed into service incrementally by December 2006.

“The majority of these rigs have two-year term contracts, with dayrates in excess of $16,000 per day. As a result, most of our investment in each rig will be returned during the primary term of the initial contract. As always, we remain focused on achieving attractive returns on investment while building a fleet of top quality and technologically advanced rigs. Our rig-building team, led by Red West, Chief Operating Officer, continues to innovate, design and assemble rigs that are well-suited to our customers’ needs. By constructing these rigs internally from a combination of new and used components, we believe we save approximately 25% on costs and end up with dependable rigs.

“Our total capital budget for the 13 rigs being added to our fleet is approximately $88 million, or an average of $6.8 million per rig. We plan to fund this expansion from cash on hand and from operating cash flow. As a result, we should maintain a strong cash position and healthy balance sheet. This rig-building program will further strengthen our existing high quality fleet. At the culmination of this program, 28% of the rigs will be capable of drilling depths between 15,000 feet to 18,000 feet and 40% of the rigs will be diesel electric,” concluded Mr. Locke.

Revenues for the first six months of fiscal year 2006 were $126.8 million, compared to revenues of $83.5 million for the first six months of fiscal year 2005. Net earnings during the first six months of fiscal 2006 were $18.8 million, or $0.40 per diluted share, compared to a net income of $1.1 million, or $0.04 per diluted share, during the first six months of fiscal 2005.

Revenue days were 8,749 during the first six months of fiscal 2006, compared to 6,163 revenue days for the comparable period of fiscal 2005. Pioneer Drilling’s rig utilization rate for the first six-months of fiscal 2006 was 95%, versus 94% in last year’s comparable six-month period.

Pioneer Drilling’s management team will be holding a conference call on Thursday, November 3, 2005, at 11:00 a.m., Eastern time (10:00 a.m., Central), to discuss these results. To participate in the call, dial (303) 262-2139 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 November 10, 2005. To access the replay, dial (303) 590-3000 and enter the pass code 11042703#.

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 53 land drilling rigs that drill in depth ranges between 6,000 and 18,000 feet.

(1) Drilling margin represents drilling revenues less drilling costs. The Company believes that drilling margin is a useful measure of evaluating its financial performance, although it is not a measure of financial performance under generally accepted accounting principles. However, drilling margin is a common measure of operating performance used by investors, financial analysts, rating agencies and our management. A reconciliation of drilling margin to net income is included in the operating statistics table below in this release. Drilling margin as presented may not be comparable to other similarly titled measures reported by other companies.

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 capital costs and funding of our rig-building program, the anticipated timing for commencement of operations for the rigs we are adding to our fleet, the minimum dayrates and contract terms for those rigs and the rigs we have recently added to our fleet, the anticipated funding for and return of our investment in the rigs being added to our fleet and our maintenance of a strong cash position and healthy balance sheet. 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 rig construction difficulties and turnkey and footage 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									Six Months Ended
	June 30,			September 30,						September 30,
	2005			2005			2004			2005			2004
Revenues:
Contract drilling	$	59,877		$	66,973		$	42,783		$	126,849		$	83,502
Costs and Expenses:
Contract drilling		39,158			40,279			34,591			79,437			68,445
Depreciation		7,330			7,941			5,306			15,270			10,355
General and administrative		1,487			1,581			926			3,068			1,696
Total operating costs		47,975			49,801			40,823			97,775			80,496
Operating income		11,902			17,172			1,960			29,074			3,006
Other income (expense):
Interest expense		(155	)		(49	)		(398	)		(204	)		(1,116	)
Loss on early extinguishment of debt		—			—			(101	)		—			(101	)
Interest income		501			449			40			951			64
Other		14			17			12			31			15
Total other		360			417			(447	)		778			(1,138	)
Income before taxes		12,262			17,589			1,513			29,852			1,868
Income tax expense		(4,537	)		(6,508	)		(590	)		(11,046	)		(728	)
Net earnings	$	7,725		$	11,081		$	923		$	18,806		$	1,140
Earnings per share:
Basic	$	0.17		$	0.24		$	0.03		$	0.41		$	0.04
Diluted	$	0.17		$	0.24		$	0.03		$	0.40		$	0.04
Weighted average number of shares outstanding:
Basic		46,012			46,366			33,211			46,190			30,272
Diluted		46,765			47,086			34,271			46,868			31,289

PIONEER DRILLING COMPANY AND SUBSIDIARIES

Condensed Consolidated Balance Sheets

(in thousands)

	(Unaudited) September 30, 2005		March 31, 2005
Assets
Current assets:
Cash and cash equivalents	$	45,382	$	69,673
Marketable securities		—		1,000
Receivables, net		30,387		26,108
Contract drilling in progress		7,042		5,365
Current deferred income taxes		1,359		570
Prepaid expenses		566		1,877
Total current assets		84,736		104,593
Net property and equipment		204,110		170,566
Other assets		563		850
	$	289,409	$	276,009
Liabilities and Equity
Current liabilities:
Notes payable	$	—	$	682
Current long-term debt		50		4,733
Accounts payable		13,600		15,622
Federal income taxes payable		1,079		196
Prepaid drilling contracts		—		173
Accrued expenses		8,594		6,860
Total current liabilities		23,323		28,266
Long-term debt		9		13,445
Other non-current liability		447		400
Deferred taxes		20,551		12,283
Total liabilities		44,330		54,394
Total shareholders’ equity		245,079		221,615
	$	289,409	$	276,009

PIONEER DRILLING COMPANY AND SUBSIDIARIES

Operating Statistics

(in thousands, except averages per day)

(Unaudited)

	Three Months Ended									Six Months Ended
	June 30,			September 30,						September 30,
	2005			2005			2004			2005			2004
Revenues by contract:
Daywork contracts	$	45,874		$	59,236		$	17,277		$	105,110		$	31,418
Turnkey contracts		8,593			2,237			23,821			10,830			48,440
Footage contracts		5,410			5,500			1,685			10,909			3,644
Total	$	59,877		$	66,973		$	42,783		$	126,849		$	83,502
Drilling costs by contract:
Daywork contracts	$	29,114		$	34,554		$	13,743		$	63,668		$	25,272
Turnkey contracts		6,161			1,313			19,476			7,474			40,336
Footage contracts		3,883			4,412			1,372			8,295			2,837
Total	$	39,158		$	40,279		$	34,591		$	79,437		$	68,445
Drilling margin by contract (1):
Daywork contracts	$	16,760		$	24,682		$	3,534		$	41,442		$	6,146
Turnkey contracts		2,432			924			4,345			3,356			8,104
Footage contracts		1,527			1,088			313			2,614			807
Total	$	20,719		$	26,694		$	8,192		$	47,412		$	15,057
Capital expenditures:
Rig additions	$	9,312		$	13,665		$	1,628		$	22,977		$	4,242
Other		11,562			16,504			7,296			28,067			13,098
	$	20,874		$	30,169		$	8,924		$	51,044		$	17,340
Reconciliation of drilling margin to net earnings:
Drilling margin	$	20,719		$	26,694		$	8,192		$	47,412		$	15,057
Depreciation		(7,330	)		(7,941	)		(5,306	)		(15,270	)		(10,355	)
General and administrative		(1,487	)		(1,581	)		(926	)		(3,068	)		(1,696	)
Other income (expense)		360			417			(447	)		778			(1,138	)
Income tax expense		(4,537	)		(6,508	)		(590	)		(11,046	)		(728	)
Net earnings	$	7,725		$	11,081		$	923		$	18,806		$	1,140

(1) Drilling margin represents drilling revenues less drilling costs

PIONEER DRILLING COMPANY AND SUBSIDIARIES

Operating Statistics

(Unaudited)

	Three Months Ended									Six Months Ended
	June 30,			September 30,						September 30,
	2005			2005			2004			2005			2004
Average number of rigs		50.0			50.7			36.0			50.3			35.7
Utilization rate		95	%		95	%		96	%		95	%		94	%
Revenue days by contract:
Daywork contracts		3,424			3,942			1,674			7,366			3,151
Turnkey contracts		462			96			1,347			558			2,723
Footage contracts		417			408			145			825			289
Total		4,303			4,446			3,166			8,749			6,163
Average revenues per day:
Daywork contracts	$	13,398		$	15,027		$	10,321		$	14,270		$	9,971
Turnkey contracts	$	18,600		$	23,302		$	17,684		$	19,409		$	17,789
Footage contracts	$	12,974		$	13,480		$	11,621		$	13,223		$	12,609
All contracts	$	13,915		$	15,064		$	13,513		$	14,499		$	13,549
Average costs per day:
Daywork contracts	$	8,503		$	8,766		$	8,210		$	8,643		$	8,020
Turnkey contracts	$	13,335		$	13,677		$	14,459		$	13,394		$	14,813
Footage contracts	$	9,312		$	10,814		$	9,462		$	10,055		$	9,817
All contracts	$	9,100		$	9,060		$	10,926		$	9,080		$	11,106
Average drilling margin per day:
Daywork contracts	$	4,895		$	6,261		$	2,111		$	5,626		$	1,950
Turnkey contracts	$	5,264		$	9,625		$	3,226		$	6,014		$	2,976
Footage contracts	$	3,662		$	2,667		$	2,159		$	3,168		$	2,792
All contracts	$	4,815		$	6,004		$	2,587		$	5,419		$	2,443

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