SAN ANTONIO, Aug. 6 /PRNewswire-FirstCall/ -- 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. "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 http://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 . 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 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. Contacts: Lorne E. Phillips,
CFO Pioneer Drilling Company 210-828-7689 Lisa Elliott / Anne
Pearson / DRG&E / 713-529-6600 - Financial Statements and
Information Follow - 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 PIONEER DRILLING COMPANY AND
SUBSIDIARIES Condensed Consolidated Balance Sheets (in thousands)
June 30, 2009 December 31, 2008 ------------- -----------------
ASSETS (unaudited) (audited) ------ 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 ======== ======== 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 =======
======= 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. 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 Six ------ months ended 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 =======
======= ======= ======= ======= ======= 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 =========== DATASOURCE: Pioneer Drilling
Company, Inc. CONTACT: Lorne E. Phillips, CFO of Pioneer Drilling
Company, +1-210-828-7689; or Lisa Elliott, , or Anne Pearson, ,
both of DRG&E, +1-713-529-6600, for Pioneer Drilling Company,
Inc. Web Site: http://www.pioneerdrlg.com/
Copyright