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): August 6, 2009

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 August 6, 2009, we issued a press release announcing our results of operations for the quarter ended June 30, 2009. A copy of that press release is furnished as Exhibit 99.1 to this report and is incorporated by reference herein.

The information in this Item 2.02, including Exhibit 99.1, shall not be deemed to be “filed” for 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 by reference therein.

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Item 9.01. Financial Statements and Exhibits

(d)	Exhibits
99.1	Press release issued by Pioneer Drilling Company on August 6, 2009.

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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/ Lorne E. Phillips
	Lorne E. Phillips
	Executive Vice President and Chief Financial Officer

Date: August 6, 2009

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EXHIBIT INDEX

No.	Description
99.1	Press release issued by Pioneer Drilling Company on August 6, 2009.

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EX-99.1

Exhibit 99.1

  FOR IMMEDIATE RELEASE Contacts: Lorne E. Phillips, CFO Pioneer Drilling Company 210-828-7689   Lisa Elliott / lelliott@drg-e.com Anne Pearson / apearson@drg-e.com DRG^&E / 713-529-6600

Pioneer Drilling Reports Second Quarter 2009 Results

SAN ANTONIO, Texas, August 6, 2009 – Pioneer Drilling Company, Inc. (NYSE Amex : PDC) today reported financial and operating results for the three months ended June 30, 2009.

Second Quarter 2009 Results

Net loss for the second quarter was $6.3 million, or $0.13 per share, compared with net income of $618,000, or $0.01 per diluted share for the three months ended March 31, 2009 (“the prior quarter”). Net income for the three months ended June 30, 2008 (“the year-earlier quarter”) was $19.1 million, or $0.38 per diluted share.

Revenues for the second quarter were $69.1 million, compared with $100.8 million for the prior quarter and $152.5 million for the year-earlier quarter. EBITDA⁽¹⁾ for the second quarter was $17.9 million, compared to $27.8 million for the prior quarter and $53.4 million for the year-earlier quarter.

First Six Months of 2009 Results

Net loss for the six months ended June 30, 2009 was $5.6 million, or $0.11 per share, compared with net income of $31.0 million, or $0.61 per diluted share for the six months ended June 30, 2008. Revenues for the first six months of 2009 were $170.0 million, compared with $265.9 million for the prior year’s first six months. EBITDA for the first six months of 2009 was $45.7 million, compared to $89.6 million for the comparable period in 2008.

Operating Results

Revenues for the Drilling Services Division were $45.7 million for the second quarter, a 36% decline from the prior quarter. During the second quarter, the utilization rate for our drilling rigs averaged 35%, down from 52% in the prior quarter and 90% in the year-earlier quarter. With the lower utilization rate, the number of revenue days dropped to 2,238, a 32% decline from the prior quarter. The Drilling Services margin⁽²⁾ per day decreased $541, or 7%, to $7,723 in the second quarter as compared to the prior quarter.

Revenues for the Production Services Division declined 21% to $23.4 million for the second quarter, compared to $29.5 million in the prior quarter. Production Services margin⁽²⁾ decreased 21% to $8.5 million, compared to $10.8 million in the prior quarter. Margin as a percentage of revenue remained steady from the prior quarter at 36%. Currently, 60 of Pioneer’s 74 workover rigs have crews assigned and are operating or being actively marketed, while the remaining 14 workover rigs are idle with no crews assigned.

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“As we anticipated, U.S. land rig counts and production services activity may have bottomed at the end of the second quarter, and while the market seems to be stabilizing, there are limited signs of improvement,” said Wm. Stacy Locke, President and CEO of Pioneer Drilling. “Certain regions of the country are showing signs of increasing activity, in part due to improving oil prices, but we believe improvement this year will be gradual and modest.

“During the second quarter, we established an Appalachian drilling division to focus on operations in the Marcellus Shale. We currently have one drilling rig operating in our Appalachian division, with a second rig expected to begin operating by late August 2009. In addition, we launched wireline operations in the Marcellus Shale play.

“Currently, we have 26 of our 71 drilling rigs, or 37%, earning revenue under drilling contracts,” continued Mr. Locke. “Four of these drilling rigs are earning revenue through early contract termination fees while the rigs are stacked. In Colombia, all five of our drilling rigs are under contract.

“We continue to focus on reducing costs where possible. Our selling, general and administrative expenses were reduced 11% to $9 million in the second quarter, and operating costs were reduced in conjunction with declining revenues in both our Drilling Services and Production Services divisions. These reductions enabled us to hold margin percentages steady when compared to the prior quarter. Also, we are closely monitoring liquidity and will continue to focus our capital expenditures primarily on routine expenditures that are required to maintain safe and efficient operations and discretionary expenditures that may be required to obtain new contracts,” Locke said.

Pioneer’s working capital was $70.0 million at June 30, 2009, up from $67.3 million at March 31, and our cash and cash equivalents were $43.7 million at the end of the second quarter, up $13.7 million from the prior quarter. For the year, cash and cash equivalents increased $16.9 million, primarily due to cash provided by operations of $80.7 million, offset by $47.7 million of property and equipment expenditures and $16.4 million of debt payments. We have $131.0 million of borrowing availability on our senior secured revolving credit facility, with $257.5 million due at maturity in February 2013.

Conference Call

Pioneer’s 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 in the call, dial 480-629-9645 at least 10 minutes early and ask for the Pioneer Drilling conference call. A replay will be available approximately two hours after the call ends and will be accessible until August 13. To access the replay, dial (303) 590-3030 and enter the pass code 4106201#.

The conference call will also be available on the Internet at Pioneer’s Web site at www.pioneerdrlg.com. To listen to the live call, visit Pioneer’s Web site at least 10 minutes early to register and download any necessary audio software. An archive will be available shortly after the call. For more information, please contact Donna Washburn at DRG^&E at (713) 529-6600 or e-mail dmw@drg-e.com.

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About Pioneer

Pioneer Drilling Company provides contract land drilling services to independent and major oil and gas operators in Texas, Louisiana, Oklahoma, Kansas, the Rocky Mountain and Appalachian regions and internationally in Colombia through its Pioneer Drilling Services Division. The Company also provides workover rig, wireline and fishing and rental services to producers in the U.S. Gulf Coast, Mid-Continent, Rocky Mountain and Appalachian regions through its Pioneer Production Services Division. Its fleet consists of 71 land drilling rigs that drill at depths ranging from 6,000 to 25,000 feet, 74 workover rigs (sixty-nine 550 horsepower rigs, four 600 horsepower rigs and one 400 horsepower rig), 61 wireline units, and fishing and rental tools.

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 that are subject to risks, uncertainties and assumptions. Our actual results, performance or achievements, or industry results, could differ materially from those we express in this news release as a result of a variety of factors, including general economic and business conditions and industry trends, risks associated with the current global economic crisis and its impact on capital markets and liquidity, the continued strength or weakness of the oil and gas production industry in the geographic areas in which we operate including the price of oil and natural gas in general, and the recent precipitous decline in prices in particular, and the impact of commodity prices and other factors upon future decisions about onshore exploration and development projects to be made by oil and gas companies and their ability to obtain necessary financing, the highly competitive nature of our business, difficulty in integrating the services of acquired companies, including the production services businesses of WEDGE, Competition, Paltec and Pettus in an efficient and effective manner, the availability, terms and deployment of capital, the availability of qualified personnel, changes in, or our failure or inability to comply with, government regulations, including those relating to the environment, the economic and business conditions of our international operations, challenges in achieving strategic objectives, and the risk that our markets do not evolve as anticipated. We have discussed many of these factors in more detail in our annual report on Form 10-K for the year ended December 31, 2008. These factors are not necessarily all the important factors that could affect us. Unpredictable or unknown factors we have not discussed in this news release, or in our annual report on Form 10-K 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 the date on which they are made and we undertake no duty to update or revise any forward-looking statements. We advise our shareholders that they should (1) be aware 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 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) We define EBITDA as earnings (loss) before interest income (expense), taxes, depreciation, amortization and impairments. Although not prescribed under GAAP, we believe the presentation of EBITDA is relevant and useful because it helps our investors understand our operating performance and makes it easier to compare our results with those of other companies that have different financing, capital or tax structures. EBITDA should not be considered in isolation from or as a substitute for net income, as an indication of operating performance or cash flows from

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operating activities or as a measure of liquidity. A reconciliation of net earnings (loss) to EBITDA is included in the tables to this press release. EBITDA, as we calculate it, may not be comparable to EBITDA measures reported by other companies. In addition, EBITDA does not represent funds available for discretionary use.

(2) Drilling Services margin represents contract drilling revenues less contract drilling operating costs. Production Services margin represents production services revenues less production services operating costs. We believe that Drilling Services margin and Production Services margin are useful measures for evaluating financial performance, although they are not measures of financial performance under GAAP. However, Drilling Services margin and Production Services margin are common measures of operating performance used by investors, financial analysts, rating agencies and Pioneer management. A reconciliation of Drilling Services margin and Production Services margin to net earnings (loss) is included in the tables to this press release. Drilling Services margin and Production Services margin as presented may not be comparable to other similarly titled measures reported by other companies.

– Financial Statements and Information 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									Six months ended
	June 30,						March 31,			June 30,
	2009			2008			2009			2009			2008
Revenues:
Drilling services	$	45,720		$	109,250		$	71,366		$	117,086			209,291
Production services		23,400			43,297			29,474			52,874			56,653
Total revenue		69,120			152,547			100,840			169,960			265,944
Costs and Expenses:
Drilling services		28,437			64,277			44,128			72,565			127,774
Production services		14,906			21,916			18,716			33,622			28,845
Depreciation and amortization		26,069			20,580			25,446			51,515			37,699
Selling, general and administrative		8,951			12,150			10,027			18,978			19,872
Bad debt (recovery) expense		30			(92	)		(334	)		(304	)		43
Total costs and expenses		78,393			118,831			97,983			176,376			214,233
Income (loss) from operations		(9,273	)		33,716			2,857			(6,416	)		51,711
Other (expense) income:
Interest expense		(1,728	)		(4,265	)		(1,988	)		(3,716	)		(5,839	)
Interest income		55			205			84			139			790
Other		1,140			(930	)		(515	)		625			162
Total other (expense) income		(533	)		(4,990	)		(2,419	)		(2,952	)		(4,887	)
Income (loss) before income taxes		(9,806	)		28,726			438			(9,368	)		46,824
Income tax benefit (expense)		3,547			(9,609	)		180			3,727			(15,859	)
Net earnings (loss)	$	(6,259	)	$	19,117		$	618		$	(5,641	)	$	30,965
Earnings (loss) per common share:
Basic	$	(0.13	)	$	0.38		$	0.01		$	(0.11	)	$	0.62
Diluted	$	(0.13	)	$	0.38		$	0.01		$	(0.11	)	$	0.61
Weighted average number of shares outstanding:
Basic		49,826			49,789			49,824			49,825			49,774
Diluted		49,826			50,483			49,929			49,825			50,369

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PIONEER DRILLING COMPANY AND SUBSIDIARIES

Condensed Consolidated Balance Sheets

(in thousands)

	June 30, 2009		December 31, 2008
	(unaudited)		(audited)
ASSETS
Current assets:
Cash and cash equivalents	$	43,700	$	26,821
Receivables, net of allowance for doubtful accounts		73,071		99,423
Deferred income taxes		4,919		6,270
Inventory		4,649		3,874
Prepaid expenses and other current assets		4,194		8,902
Total current assets		130,533		145,290
Net property and equipment		623,975		627,562
Intangible assets, net of amortization		27,696		29,969
Other long-term assets		19,401		21,658
Total assets	$	801,605	$	824,479
LIABILITIES AND SHAREHOLDERS’ EQUITY
Current liabilities:
Accounts payable	$	12,215	$	21,830
Current portion of long-term debt		2,081		17,298
Prepaid drilling contracts		—		1,171
Accrued expenses		46,191		40,619
Total current liabilities		60,487		80,918
Long-term debt, less current portion		260,914		262,115
Other long term liabilities		6,135		6,413
Deferred taxes		62,507		60,915
Total liabilities		390,043		410,361
Total shareholders’ equity		411,562		414,118
Total liabilities and shareholders’ equity	$	801,605	$	824,479

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PIONEER DRILLING COMPANY AND SUBSIDIARIES

Condensed Consolidated Statements of Cash Flows

(in thousands)

(unaudited)

	Six months ended June 30,
	2009			2008
Cash flows from operating activities:
Net earnings (loss)	$	(5,641	)	$	30,965
Adjustments to reconcile net earnings (loss) to net cash provided by operating activities:
Depreciation and amortization		51,515			37,699
Allowance for doubtful accounts		96			320
(Gain) loss on dispositions of property and equipment		91			(377	)
Stock-based compensation expense		3,889			1,848
Deferred income taxes		3,450			2,919
Change in other assets		907			256
Change in non-current liabilities		(991	)		(168	)
Changes in current assets and liabilities		27,397			1,964
Net cash provided by operating activities		80,713			75,426
Cash flows from investing activities:
Acquisition of WEDGE		—			(313,610	)
Acquisition of Competition Wireline		—			(26,101	)
Purchases of property and equipment		(47,677	)		(58,936	)
Purchase of auction rate securities		—			(16,475	)
Proceeds from sale of property and equipment		261			1,851
Proceeds from insurance recoveries		36			2,301
Net cash used in investing activities		(47,380	)		(410,970	)
Cash flows from financing activities:
Debt repayments		(16,418	)		(32,170	)
Proceeds from issuance of debt		—			311,500
Debt issuance costs		—			(3,323	)
Proceeds from sale of common stock		—			653
Excess tax benefit (reductions) for stock option exercises		(36	)		250
Net cash used in by financing activities		(16,454	)		276,910
Net increase (decrease) in cash and cash equivalents		16,879			(58,634	)
Beginning cash and cash equivalents		26,821			76,703
Ending cash and cash equivalents	$	43,700		$	18,069

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PIONEER DRILLING COMPANY AND SUBSIDIARIES

Operating Statistics

(in thousands)

(unaudited)

	Three months ended									Six months ended
	June 30,						March 31,			June 30,
	2009			2008			2009			2009			2008
Drilling Services Division:
Revenues	$	45,720		$	109,250		$	71,366		$	117,086		$	209,291
Operating costs		28,437			64,277			44,128			72,565			127,774
Drilling services margin (1)	$	17,283		$	44,973		$	27,238		$	44,521		$	81,517
Average number of drilling rigs		70.7			66.7			70.0			70.3			66.6
Utilization rate		35	%		90	%		52	%		44	%		87	%
Revenue days		2,238			5,475			3,296			5,534			10,511
Average revenues per day	$	20,429		$	19,954		$	21,652		$	21,158		$	19,912
Average operating costs per day		12,706			11,740			13,388			13,113			12,156
Drilling services margin per day (2)	$	7,723		$	8,214		$	8,264		$	8,045		$	7,756
Production Services Division:
Revenues	$	23,400		$	43,297		$	29,474		$	52,874		$	56,653
Operating costs		14,906			21,916			18,716			33,622			28,845
Production services margin (1)	$	8,494		$	21,381		$	10,758		$	19,252		$	27,808
Combined:
Revenues	$	69,120		$	152,547		$	100,840		$	169,960		$	265,944
Operating Costs		43,343			86,193			62,844			106,187			156,619
Combined margin	$	25,777		$	66,354		$	37,996		$	63,773		$	109,325
EBITDA (3)	$	17,936		$	53,366		$	27,788		$	45,724		$	89,572

(1) Drilling services margin represents contract drilling revenues less contract drilling operating costs. Production services margin represents production services revenue less production services operating costs. Pioneer believes that Drilling services margin and Production services margin are useful measures for evaluating financial performance, although they are not measures of financial performance under generally accepted accounting principles. However, Drilling services margin and Production services margin are common measures of operating performance used by investors, financial analysts, rating agencies and Pioneer’s management. A reconciliation of Drilling services margin and Production services margin to net earnings (loss) is included in the table below. Drilling services margin and production services margin as presented may not be comparable to other similarly titled measures reported by other companies.

(2) Drilling services margin per revenue day represents the Drilling Services Division’s average revenue per revenue day less average operating costs per revenue day.

(3) We define EBITDA as earnings (loss) before interest income (expense), taxes, depreciation, amortization and impairments. Although not prescribed under GAAP, we believe the presentation of EBITDA is relevant and useful because it helps our investors understand our operating performance and makes it easier to compare our results with those of other companies that have different financing, capital or tax structures. EBITDA should not be considered in isolation from or as a substitute for net earnings (loss) as an indication of operating performance or cash flows from operating activities or as a measure of liquidity. A reconciliation of net earnings (loss) to EBITDA is included in the table below. EBITDA, as we calculate it, may not be comparable to EBITDA measures reported by other companies. In addition, EBITDA does not represent funds available for discretionary use.

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PIONEER DRILLING COMPANY AND SUBSIDIARIES

Reconciliation of Combined Drilling Services Margin and Production

Services Margin and EBITDA to Net Earnings (Loss)

(in thousands)

(unaudited)

	Three months ended									Six months ended
	June 30,						March 31,			June 30,
	2009			2008			2009			2009			2008
Combined margin	$	25,777		$	66,354		$	37,996		$	63,773		$	109,325
General and administrative		(8,951	)		(12,150	)		(10,027	)		(18,978	)		(19,872	)
Bad debt expense (recoveries)		(30	)		92			334			304			(43	)
Other income (expense)		1,140			(930	)		(515	)		625			162
EBITDA		17,936			53,366			27,788			45,724			89,572
Depreciation and amortization		(26,069	)		(20,580	)		(25,446	)		(51,515	)		(37,699	)
Interest income (expense), net		(1,673	)		(4,060	)		(1,904	)		(3,577	)		(5,049	)
Income tax expense		3,547			(9,609	)		180			3,727			(15,859	)
Net earnings (loss)	$	(6,259	)	$	19,117		$	618		$	(5,641	)	$	30,965

PIONEER DRILLING COMPANY AND SUBSIDIARIES

Capital Expenditures

(in thousands)

(unaudited)

											Budget
	Three months ended						Six months ended				Year Ending
	June 30,				March 31,		June 30,				December 31,
	2009		2008		2009		2009		2008		2009
Capital expenditures:
Drilling Services Division:
Routine rigs	$	1,788	$	3,814	$	3,896	$	5,684	$	7,821	$	13,100
Discretionary		5,455		13,704		6,063		11,518		32,718		32,100
Tubulars		1,102		3		868		1,970		1,050		5,000
New-builds and acquisitions		—		1,087		—		—		1,833		—
Total Drilling Services Division capital expenditures		8,345		18,608		10,827		19,172		43,422		50,200
Production Services Division:
Routine		1,023		835		1,713		2,736		943		5,800
Discretionary		90		—		81		171		—		2,200
New-builds and acquisitions		246		6,008		4,479		4,725		9,039		7,000
Total Production Services Division capital expenditures		1,359		6,843		6,273		7,632		9,982		15,000
Actual and budgeted capital expenditures		9,704		25,451		17,100		26,804		53,404		65,200
Budgeted capital expenditures approved in 2008 that will be incurred in 2009		8,778		—		9,638		18,416		—		19,310
	$	18,482	$	25,451	$	26,738	$	45,220	$	53,404	$	84,510

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PIONEER DRILLING COMPANY AND SUBSIDIARIES

Drilling Rig, Workover Rig and Wireline Unit Information

	Rig Type
	Mechanical	Electric	Total Rigs
Drilling Services Division:
Drilling rig horsepower ratings:
550 to 700 HP	6	—		6
750 to 900 HP	14	2		16
1000 HP	18	12		30
1200 to 2000 HP	3	16		19
Total	41	30		71
Drilling rig depth ratings:
Less than 10,000 feet	8	2		10
10,000 to 13,900 feet	30	7		37
14,000 to 25,000 feet	3	21		24
Total	41	30		71
Production Services Division:
Workover rig horsepower ratings:
400 HP				1
550 HP				69
600 HP				4
Total				74
Wireline units				61
Fishing & Rental Tools Inventory			$	15 Million

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