SAN ANTONIO, Feb. 21, 2012 /PRNewswire/ -- Pioneer Drilling
Company, Inc. (NYSE Amex: PDC) today reported financial and
operating results for the three and 12 months ended December 31, 2011. Operational highlights
include:
- Added one multi-year term contract for a new-build drilling rig
during the fourth quarter, for a total of 10 new-build drilling
rigs that will begin operating in shale plays in 2012
- Currently, 80% of the working drilling rigs in our fleet are
operating under term drilling contracts
- Production Services revenue increased 7% over the third quarter
of 2011 and represented 42% of total revenues and generated 48% of
total gross margin in the fourth quarter
- Approximately 87% of the working drilling rigs and 79% of the
Production Service assets are operating on wells in oil and
liquids-rich plays
Financial Results
Revenues for the fourth quarter of 2011 were $203.7 million, a 9% increase over $187.7 million for the third quarter of 2011
("the prior quarter") and a 37% increase over $148.6 million for the fourth quarter of 2010
("the year-earlier quarter"). The increase from the prior
quarter was primarily due to higher rig utilization in the Drilling
Services Division and some pricing improvement as well as the
contribution from fleet additions in the Production Services
Division. The increase from the year-earlier quarter was due
to higher utilization and pricing in both divisions and the
contribution from additional Production Services equipment.
Net income for the fourth quarter was $6.8 million, or $0.11 per diluted share, compared with net income
for the prior quarter of $6.7
million, or $0.11 per diluted
share, and a net loss for the year-earlier quarter of $6.0 million, or $0.11 per share. Fourth quarter 2011
results were reduced by an increase in interest expense of
$1.9 million primarily related to the
issuance of Senior Notes in November, an increase in depreciation
expense of $2.2 million for new and
upgraded equipment going into service, and acquisition-related
expenses of $0.6 million. Fourth
quarter Adjusted EBITDA(1) was $55.5
million, an 8% increase over $51.6
million in the prior quarter and a 47% increase over
Adjusted EBITDA of $37.7 million in
the year-earlier quarter.
Operating Results
Revenues for the Drilling Services Division were $118.9 million in the fourth quarter, a 9%
increase over the prior quarter and a 26% increase from the
year-earlier quarter. During the fourth quarter, the
utilization rate for our fleet of 64 drilling rigs averaged 87%, up
from 71% in the prior quarter and 64% a year ago for a fleet of 71
rigs. The rig count in the fourth quarter was lower due to the
retirement of the seven drilling rigs at the end of the third
quarter. If the seven retired rigs had been excluded from the fleet
in the third quarter, the utilization rate would have been 79%
versus 71%. Fourth quarter average drilling revenues per day
declined 1% from the prior quarter as a result of more rigs
operating in West Texas where
revenues per day and margins per day are typically lower than our
other operating areas. Drilling Services margin(2) was $7,686 per day in the fourth quarter as compared
to $7,797 per day in the prior
quarter and $7,679 per day in the
year-earlier period.
Revenues for the Production Services Division were $84.8 million in the fourth quarter, up 7% from
the prior quarter and up 57% from the year-earlier quarter. Fourth
quarter Production Services margin(2) as a percentage of revenue
was 42%, compared to 44% in the prior quarter and 41% in the
year-earlier quarter. During the fourth quarter, our well
service rig utilization was approximately 86%, compared to 92% in
the prior quarter and 90% in the year-earlier quarter, while
pricing increased to $577 from
$555 per hour as compared to the
prior quarter.
"Throughout 2011, demand for our equipment and services
continued to grow, driving a 47% increase in annual revenue and a
78% year-over-year increase in Adjusted EBITDA(1)," said Wm.
Stacy Locke, President and CEO of
Pioneer Drilling. "Our growth in 2012 should continue as we begin
deploying 10 new-build drilling rigs under multi-year contracts and
we see the substantial impact of new Production Services equipment.
We anticipate our first new-build drilling rig will begin
working in March, with four additional new-build rigs by mid-2012
and the remaining five in the second half of the year. In
addition, we expect to add 13 new well service rigs and 13 wireline
units in the first half of 2012.
"We are also excited to now offer coiled tubing services as a
result of our acquisition of Go-Coil effective December 31, 2011. Go-Coil's strong management
team and fleet of 10 young, high-quality coiled tubing units are an
excellent strategic fit with our Production Services Division.
We expect the acquisition to contribute approximately
$26 million to $29 million of
Adjusted EBITDA in 2012. Also, we plan to add three coiled
tubing units in late 2012.
"Our new equipment will primarily be going to work in U.S. shale
plays and basins producing oil and liquids-rich gas. Demand
for our services is strong in the Bakken, Eagle Ford Shale and the
Permian Basin, where we have a solid market presence. Currently,
approximately 87% of our working drilling rigs and 79% of the
Production Services assets are operating in oil and liquids-rich
plays. We have also continued to focus on securing term
contracts for our equipment, with 80% of our drilling fleet
currently operating under term contracts, not including the 10
new-build rigs that will be deployed under multi-year contracts
later this year.
"In the first quarter of 2012, we expect drilling rig
utilization for our 64 rigs to average between 83% and 85%,
including the addition of the one new rig in March. We expect our
Drilling Services margin to be down approximately $300 to $600 per day, as compared to the fourth
quarter of 2011, driven by additional drilling rigs in West Texas and slightly lower utilization in
Colombia and dry gas regions in
the U.S.
"In the fourth quarter, our Production Services Division
continued to maintain strong utilization while adding five wireline
units and four well service rigs. In the first quarter of 2012, we
anticipate that Production Services revenues will increase 20% to
25% and margin as a percentage of revenues will be flat quarter
over quarter, driven by equipment additions and our new coiled
tubing services business, which will be partially offset by normal
seasonality," Locke said.
Liquidity
Working capital was $129.9 million
at December 31, 2011, compared to
$76.1 million at December 31, 2010. Our cash and cash
equivalents at the end of 2011 were $86.2
million, up from $22.0 million
at year-end 2010.
The change in cash and cash equivalents during the year is
primarily due to cash provided by operations of $144.9 million, the sale of common stock of
$94.3 million, net debt borrowings of
$130.3 million and the sale of our
ARPs investment of $12.6 million,
partially offset by $210.1 million
used for purchases of property and equipment and $115.5 million used for the acquisition of
Go-Coil and other production services businesses.
Our $250 million Revolving Credit
Facility remains undrawn, other than $9
million in committed letters of credit, leaving availability
under our Revolving Credit Facility at $241
million.
Capital Expenditures
For the year ended December 31,
2011, total cash capital expenditures were $210.1 million. Currently, we expect to spend
approximately $300 million to $330
million in 2012, which includes a portion of the
construction costs for 10 new-build drilling rigs, upgrades to
drilling rigs being relocated to West
Texas, additional well service rigs, wireline units, coiled
tubing units, and routine capital expenditures. We expect to
fund these capital expenditures from operating cash flow in excess
of our working capital requirements, proceeds from the sale of our
Senior Notes in November 2011 and
from borrowings under our Revolving Credit Facility.
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 480-629-9678 at
least 10 minutes early and ask for the Pioneer Drilling conference
call. A replay will be available after the call ends and will
be accessible until February 28,
2012. To access the replay, dial (303) 590-3030 and
enter the pass code 4510276#. A broadcast of the conference call
will also be webcast 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&L at (713) 529-6600 or e-mail dmw@drg-l.com.
About Pioneer
Pioneer Drilling Company provides contract land drilling
services to independent and major oil and gas operators in
Texas, Louisiana, the Mid-Continent, Rocky Mountain
and Appalachian regions and internationally in Colombia through its Pioneer Drilling Services
Division. Pioneer also provides well services, wireline, coiled
tubing and fishing and rental services to producers in the U.S.
Gulf Coast, offshore Gulf of
Mexico, Mid-Continent, Rocky Mountain and Appalachian
regions through its Pioneer Production Services Division.
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; levels and volatility of oil and gas prices;
decisions about onshore exploration and development projects to be
made by oil and gas producing companies; risks associated with
economic cycles and their impact on capital markets and liquidity;
the continued demand for the drilling services or production
services in the geographic areas where we operate; the highly
competitive nature of our business; our future financial
performance, including availability, terms and deployment of
capital; the supply of marketable drilling rigs, well service rigs,
coiled tubing and wireline units within the industry; the continued
availability of drilling rig, well service rig, coiled tubing and
wireline unit components; the continued availability of qualified
personnel; the success or failure of our acquisition strategy,
including our ability to finance acquisitions, manage growth and
effectively integrate acquisitions; and changes in, or our failure
or inability to comply with, governmental regulations, including
those relating to the environment. We have discussed many of
these factors in more detail in our annual report on Form 10-K for
the year ended December 31,
2011. 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 of the date on which they are made and we undertake
no obligation to publicly update or revise any forward-looking
statements whether, as a result of new information, future events
or otherwise. 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.
|
|
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(1)
|
Adjusted EBITDA is a financial
measure that is not in accordance with GAAP, and should not be
considered (i) in isolation of, or as a substitute for, net income
(loss), (ii) as an indication of operating performance or cash
flows from operating activities or (iii) as a measure of liquidity.
In addition, Adjusted EBITDA does not represent funds available for
discretionary use. We define Adjusted EBITDA as income (loss)
before interest income (expense), taxes, depreciation, amortization
and any impairments. We use this measure, together with our GAAP
financial metrics, to assess our financial performance and evaluate
our overall progress towards meeting our long-term financial
objectives. We believe that this non-GAAP financial measure is
useful to investors and analysts in allowing for greater
transparency of our operating performance and makes it easier to
compare our results with those of other companies within our
industry. Adjusted EBITDA, as we calculate it, may not be
comparable to Adjusted EBITDA measures reported by other companies.
A reconciliation of Adjusted EBITDA to net income (loss) is set
forth below.
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(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 income (loss) as reported 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.
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Contacts:
|
Lorne E. Phillips,
CFO
Pioneer Drilling
Company
(210) 828-7689
Lisa Elliott /
lelliott@drg-l.com
Anne Pearson /
apearson@drg-l.com
DRG&L / (713)
529-6600
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- Financial
Statements and Operating Information Follow -
PIONEER
DRILLING COMPANY AND SUBSIDIARIES
Condensed
Consolidated Statements of Operations
(in
thousands, except per share data)
|
|
|
Three months
ended
|
|
Year
ended
|
|
|
December 31,
|
|
September 30,
|
|
December 31,
|
|
|
2011
|
|
2010
|
|
2011
|
|
2011
|
|
2010
|
|
|
(unaudited)
|
|
(audited)
|
|
|
Revenues:
|
|
|
|
|
|
|
|
|
|
|
|
Drilling services
|
$
|
118,859
|
|
|
$
|
94,616
|
|
|
$
|
108,764
|
|
|
$
|
433,902
|
|
|
$
|
312,196
|
|
|
|
Production services
|
84,797
|
|
|
54,002
|
|
|
78,887
|
|
|
282,039
|
|
|
175,014
|
|
|
|
Total revenues
|
203,656
|
|
|
148,618
|
|
|
187,651
|
|
|
715,941
|
|
|
487,210
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Costs and expenses:
|
|
|
|
|
|
|
|
|
|
|
|
Drilling services
|
79,430
|
|
|
62,727
|
|
|
72,430
|
|
|
292,559
|
|
|
227,136
|
|
|
|
Production services
|
48,989
|
|
|
31,607
|
|
|
44,394
|
|
|
164,365
|
|
|
105,295
|
|
|
|
Depreciation and
amortization
|
35,160
|
|
|
31,536
|
|
|
32,992
|
|
|
132,832
|
|
|
120,811
|
|
|
|
General and
administrative
|
19,232
|
|
|
15,287
|
|
|
17,705
|
|
|
67,318
|
|
|
52,047
|
|
|
|
Bad debt expense
|
548
|
|
|
597
|
|
|
322
|
|
|
925
|
|
|
493
|
|
|
|
Impairment of
equipment
|
—
|
|
|
—
|
|
|
484
|
|
|
484
|
|
|
—
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total costs and
expenses
|
183,359
|
|
|
141,754
|
|
|
168,327
|
|
|
658,483
|
|
|
505,782
|
|
|
|
Income (loss) from
operations
|
20,297
|
|
|
6,864
|
|
|
19,324
|
|
|
57,458
|
|
|
(18,572)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other (expense)
income:
|
|
|
|
|
|
|
|
|
|
|
|
Interest expense
|
(8,062)
|
|
|
(7,821)
|
|
|
(6,137)
|
|
|
(29,721)
|
|
|
(26,567)
|
|
|
|
Impairment of
investments
|
—
|
|
|
(3,331)
|
|
|
—
|
|
|
—
|
|
|
(3,331)
|
|
|
|
Other
|
52
|
|
|
(732)
|
|
|
(1,193)
|
|
|
(6,904)
|
|
|
912
|
|
|
|
Total other expense
|
(8,010)
|
|
|
(11,884)
|
|
|
(7,330)
|
|
|
(36,625)
|
|
|
(28,986)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income (loss) before income
taxes
|
12,287
|
|
|
(5,020)
|
|
|
11,994
|
|
|
20,833
|
|
|
(47,558)
|
|
|
|
Income tax (expense)
benefit
|
(5,469)
|
|
|
(972)
|
|
|
(5,250)
|
|
|
(9,656)
|
|
|
14,297
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income (loss)
|
$
|
6,818
|
|
|
$
|
(5,992)
|
|
|
$
|
6,744
|
|
|
$
|
11,177
|
|
|
$
|
(33,261)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income (loss) per common
share:
|
|
|
|
|
|
|
|
|
|
|
|
Basic
|
$
|
0.11
|
|
|
$
|
(0.11)
|
|
|
$
|
0.11
|
|
|
$
|
0.19
|
|
|
$
|
(0.62)
|
|
|
|
Diluted
|
$
|
0.11
|
|
|
$
|
(0.11)
|
|
|
$
|
0.11
|
|
|
$
|
0.19
|
|
|
$
|
(0.62)
|
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|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted-average number of
shares outstanding:
|
|
|
|
|
|
|
|
|
|
|
|
Basic
|
61,380
|
|
|
53,876
|
|
|
59,898
|
|
|
57,390
|
|
|
53,797
|
|
|
|
Diluted
|
62,568
|
|
|
53,876
|
|
|
61,428
|
|
|
58,779
|
|
|
53,797
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
PIONEER
DRILLING COMPANY AND SUBSIDIARIES
Condensed
Consolidated Balance Sheets
(in
thousands)
(audited)
|
|
|
December 31,
2011
|
|
December 31,
2010
|
|
|
|
|
|
|
|
ASSETS
|
|
|
|
|
|
Current assets:
|
|
|
|
|
|
Cash and cash
equivalents
|
$
|
86,197
|
|
|
$
|
22,011
|
|
|
|
Short-term
investments
|
—
|
|
|
12,569
|
|
|
|
Receivables, net of allowance
for doubtful accounts
|
145,234
|
|
|
89,515
|
|
|
|
Deferred income taxes
|
15,433
|
|
|
9,867
|
|
|
|
Inventory
|
11,184
|
|
|
9,023
|
|
|
|
Prepaid expenses and other
current assets
|
11,564
|
|
|
8,797
|
|
|
|
Total current assets
|
269,612
|
|
|
151,782
|
|
|
|
|
|
|
|
|
Net property and
equipment
|
793,956
|
|
|
655,508
|
|
|
|
Intangible assets, net of
amortization
|
52,680
|
|
|
21,966
|
|
|
|
Goodwill
|
41,683
|
|
|
—
|
|
|
|
Noncurrent deferred income
taxes
|
735
|
|
|
—
|
|
|
|
Other long-term
assets
|
14,088
|
|
|
12,087
|
|
|
|
Total assets
|
$
|
1,172,754
|
|
|
$
|
841,343
|
|
|
|
|
|
|
|
|
LIABILITIES AND SHAREHOLDERS'
EQUITY
|
|
|
|
|
|
Current liabilities:
|
|
|
|
|
|
Accounts payable
|
$
|
66,440
|
|
|
$
|
26,929
|
|
|
|
Current portion of long-term
debt
|
872
|
|
|
1,408
|
|
|
|
Prepaid drilling
contracts
|
3,966
|
|
|
3,669
|
|
|
|
Accrued expenses
|
68,402
|
|
|
43,634
|
|
|
|
Total current
liabilities
|
139,680
|
|
|
75,640
|
|
|
|
|
|
|
|
|
Long-term debt, less current
portion
|
418,728
|
|
|
279,530
|
|
|
|
Noncurrent deferred income
taxes
|
94,745
|
|
|
80,160
|
|
|
|
Other long-term
liabilities
|
9,156
|
|
|
9,680
|
|
|
|
Total liabilities
|
662,309
|
|
|
445,010
|
|
|
|
Total shareholders'
equity
|
510,445
|
|
|
396,333
|
|
|
|
Total liabilities and
shareholders' equity
|
$
|
1,172,754
|
|
|
$
|
841,343
|
|
|
|
|
|
|
|
|
|
|
|
|
|
PIONEER
DRILLING COMPANY AND SUBSIDIARIES
Condensed
Consolidated Statements of Cash Flows
(in
thousands)
(audited)
|
|
|
Year
ended
|
|
|
December 31,
|
|
|
2011
|
|
2010
|
|
|
|
|
|
|
|
Cash flows from operating
activities:
|
|
|
|
|
|
Net income (loss)
|
$
|
11,177
|
|
|
$
|
(33,261)
|
|
|
|
Adjustments to reconcile net
income (loss) to net cash provided by operating
activities:
|
|
|
|
|
|
Depreciation and
amortization
|
132,832
|
|
|
120,811
|
|
|
|
Allowance for doubtful
accounts
|
787
|
|
|
521
|
|
|
|
Loss (gain) on dispositions of
property and equipment
|
151
|
|
|
(1,629)
|
|
|
|
Stock-based compensation
expense
|
6,705
|
|
|
6,675
|
|
|
|
Amortization of debt issuance
costs and discount
|
3,302
|
|
|
2,609
|
|
|
|
Impairment of
investments
|
—
|
|
|
3,331
|
|
|
|
Impairment of
equipment
|
484
|
|
|
—
|
|
|
|
Deferred income taxes
|
8,098
|
|
|
(13,224)
|
|
|
|
Change in other long-term
assets
|
2,828
|
|
|
(1,373)
|
|
|
|
Change in other long-term
liabilities
|
(623)
|
|
|
3,223
|
|
|
|
Changes in current assets and
liabilities
|
(20,862)
|
|
|
10,668
|
|
|
|
Net cash provided by operating
activities
|
144,879
|
|
|
98,351
|
|
|
|
|
|
|
|
|
Cash flows from investing
activities:
|
|
|
|
|
|
Acquisition of production
services business of Go-Coil
|
(109,035)
|
|
|
—
|
|
|
|
Acquisition of other production
services businesses
|
(6,502)
|
|
|
(1,340)
|
|
|
|
Purchases of property and
equipment
|
(210,066)
|
|
|
(131,003)
|
|
|
|
Proceeds from sale of property
and equipment
|
5,550
|
|
|
2,331
|
|
|
|
Proceeds from sale of auction
rate securities
|
12,569
|
|
|
—
|
|
|
|
Proceeds from insurance
recoveries
|
—
|
|
|
531
|
|
|
|
Net cash used in investing
activities
|
(307,484)
|
|
|
(129,481)
|
|
|
|
|
|
|
|
|
Cash flows from financing
activities:
|
|
|
|
|
|
Debt repayments
|
(113,158)
|
|
|
(256,856)
|
|
|
|
Proceeds from issuance of
debt
|
250,750
|
|
|
274,375
|
|
|
|
Debt issuance costs
|
(7,285)
|
|
|
(4,865)
|
|
|
|
Proceeds from exercise of
options
|
2,884
|
|
|
238
|
|
|
|
Proceeds from stock, net of
underwriters' commissions and offering costs of $5,707
|
94,343
|
|
|
—
|
|
|
|
Purchase of treasury
stock
|
(743)
|
|
|
(130)
|
|
|
|
Net cash provided by financing
activities
|
226,791
|
|
|
12,762
|
|
|
|
|
|
|
|
|
Net increase (decrease) in cash
and cash equivalents
|
64,186
|
|
|
(18,368)
|
|
|
|
Beginning cash and cash
equivalents
|
22,011
|
|
|
40,379
|
|
|
|
Ending cash and cash
equivalents
|
$
|
86,197
|
|
|
$
|
22,011
|
|
|
|
|
|
|
|
|
|
|
|
|
|
PIONEER
DRILLING COMPANY AND SUBSIDIARIES
Operating
Statistics
(in
thousands, except average number of drilling rigs, utilization
rate, revenue days and per day information)
(unaudited)
|
|
|
Three months
ended
|
|
Year
ended
|
|
|
December 31,
|
|
September 30,
|
|
December 31,
|
|
|
2011
|
|
2010
|
|
2011
|
|
2011
|
|
2010
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Drilling Services
Division:
|
|
|
|
|
|
|
|
|
|
|
|
Revenues
|
$
|
118,859
|
|
|
$
|
94,616
|
|
|
$
|
108,764
|
|
|
$
|
433,902
|
|
|
$
|
312,196
|
|
|
|
Operating costs
|
79,430
|
|
|
62,727
|
|
|
72,430
|
|
|
292,559
|
|
|
227,136
|
|
|
|
Drilling Services margin
(1)
|
$
|
39,429
|
|
|
$
|
31,889
|
|
|
$
|
36,334
|
|
|
$
|
141,343
|
|
|
$
|
85,060
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Average number of drilling rigs
(3)
|
64.0
|
|
|
71.0
|
|
|
71.0
|
|
|
69.3
|
|
|
71.0
|
|
|
|
Utilization rate
|
87
|
%
|
|
64
|
%
|
|
71
|
%
|
|
73
|
%
|
|
59
|
%
|
|
|
Revenue days
|
5,130
|
|
|
4,153
|
|
|
4,660
|
|
|
18,383
|
|
|
15,182
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Average revenues per
day
|
$
|
23,169
|
|
|
$
|
22,783
|
|
|
$
|
23,340
|
|
|
$
|
23,603
|
|
|
$
|
20,564
|
|
|
|
Average operating costs per
day
|
15,483
|
|
|
15,104
|
|
|
15,543
|
|
|
15,915
|
|
|
14,961
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Drilling Services margin per day
(2)
|
$
|
7,686
|
|
|
$
|
7,679
|
|
|
$
|
7,797
|
|
|
$
|
7,688
|
|
|
$
|
5,603
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Production Services
Division:
|
|
|
|
|
|
|
|
|
|
|
|
Revenues
|
$
|
84,797
|
|
|
$
|
54,002
|
|
|
$
|
78,887
|
|
|
$
|
282,039
|
|
|
$
|
175,014
|
|
|
|
Operating costs
|
48,989
|
|
|
31,607
|
|
|
44,394
|
|
|
164,365
|
|
|
105,295
|
|
|
|
Production Services margin
(1)
|
$
|
35,808
|
|
|
$
|
22,395
|
|
|
$
|
34,493
|
|
|
$
|
117,674
|
|
|
$
|
69,719
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Combined:
|
|
|
|
|
|
|
|
|
|
|
|
Revenues
|
$
|
203,656
|
|
|
$
|
148,618
|
|
|
$
|
187,651
|
|
|
$
|
715,941
|
|
|
$
|
487,210
|
|
|
|
Operating Costs
|
128,419
|
|
|
94,334
|
|
|
116,824
|
|
|
456,924
|
|
|
332,431
|
|
|
|
Combined margin
|
$
|
75,237
|
|
|
$
|
54,284
|
|
|
$
|
70,827
|
|
|
$
|
259,017
|
|
|
$
|
154,779
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted EBITDA (4) &
(5)
|
$
|
55,509
|
|
|
$
|
37,668
|
|
|
$
|
51,607
|
|
|
$
|
183,870
|
|
|
$
|
103,151
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(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. 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
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
income (loss) as reported is included in the table on the following
page. 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)
|
Effective
September 30, 2011, we had 64 drilling rigs in our fleet,
which excluded seven drilling rigs which were sold or retired for
spare equipment.
|
|
|
|
|
|
(4)
|
Adjusted EBITDA is a financial
measure that is not in accordance with GAAP, and should not be
considered (i) in isolation of, or as a substitute for, net income
(loss), (ii) as an indication of operating performance or cash
flows from operating activities or (iii) as a measure of liquidity.
In addition, Adjusted EBITDA does not represent funds available for
discretionary use. We define Adjusted EBITDA as income (loss)
before interest income (expense), taxes, depreciation, amortization
and any impairments. We use this measure, together with our GAAP
financial metrics, to assess our financial performance and evaluate
our overall progress towards meeting our long-term financial
objectives. We believe that this non-GAAP financial measure is
useful to investors and analysts in allowing for greater
transparency of our operating performance and makes it easier to
compare our results with those of other companies within our
industry. Adjusted EBITDA, as we calculate it, may not be
comparable to Adjusted EBITDA measures reported by other companies.
A reconciliation of Adjusted EBITDA to net income (loss) is set
forth below.
|
|
|
|
|
|
See following page for footnote
(5).
|
|
|
|
PIONEER
DRILLING COMPANY AND SUBSIDIARIES
Reconciliation of Combined
Drilling Services and Production Services
Margin and
Adjusted EBITDA to Net Income (Loss)
(in
thousands)
(unaudited)
|
|
|
Three months
ended
|
|
Year
ended
|
|
|
December 31,
|
|
September 30,
|
|
December 31,
|
|
|
2011
|
|
2010
|
|
2011
|
|
2011
|
|
2010
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Combined margin
|
$
|
75,237
|
|
|
$
|
54,284
|
|
|
$
|
70,827
|
|
|
$
|
259,017
|
|
|
$
|
154,779
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
General and
administrative
|
(19,232)
|
|
|
(15,287)
|
|
|
(17,705)
|
|
|
(67,318)
|
|
|
(52,047)
|
|
|
|
Bad debt expense
|
(548)
|
|
|
(597)
|
|
|
(322)
|
|
|
(925)
|
|
|
(493)
|
|
|
|
Other (expense) income
(5)
|
52
|
|
|
(732)
|
|
|
(1,193)
|
|
|
(6,904)
|
|
|
912
|
|
|
|
Adjusted EBITDA (4) &
(5)
|
55,509
|
|
|
37,668
|
|
|
51,607
|
|
|
183,870
|
|
|
103,151
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Depreciation and
amortization
|
(35,160)
|
|
|
(31,536)
|
|
|
(32,992)
|
|
|
(132,832)
|
|
|
(120,811)
|
|
|
|
Impairment of
equipment
|
—
|
|
|
—
|
|
|
(484)
|
|
|
(484)
|
|
|
—
|
|
|
|
Interest expense
|
(8,062)
|
|
|
(7,821)
|
|
|
(6,137)
|
|
|
(29,721)
|
|
|
(26,567)
|
|
|
|
Impairment of
investments
|
—
|
|
|
(3,331)
|
|
|
—
|
|
|
—
|
|
|
(3,331)
|
|
|
|
Income tax (expense)
benefit
|
(5,469)
|
|
|
(972)
|
|
|
(5,250)
|
|
|
(9,656)
|
|
|
14,297
|
|
|
|
Net income (loss)
|
$
|
6,818
|
|
|
$
|
(5,992)
|
|
|
$
|
6,744
|
|
|
$
|
11,177
|
|
|
$
|
(33,261)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(5) Our Adjusted EBITDA for the
year ended December 31, 2011 was reduced by a $7.3
million net-worth tax expense for our Colombian operations that was
a non-recurring charge and was included in other income
(expense).
|
|
|
|
PIONEER
DRILLING COMPANY AND SUBSIDIARIES
Capital
Expenditures
(in
thousands)
(unaudited)
|
|
|
Three months
ended
|
|
Year
ended
|
|
|
December 31,
|
|
September 30,
|
|
December 31,
|
|
|
2011
|
|
2010
|
|
2011
|
|
2011
|
|
2010
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Drilling Services
Division:
|
|
|
|
|
|
|
|
|
|
|
|
Routine and tubulars
|
$
|
9,685
|
|
|
$
|
5,850
|
|
|
$
|
7,032
|
|
|
$
|
35,252
|
|
|
$
|
17,441
|
|
|
|
Discretionary
|
21,862
|
|
|
19,740
|
|
|
26,018
|
|
|
67,352
|
|
|
88,201
|
|
|
|
New-builds and
acquisitions
|
14,768
|
|
|
—
|
|
|
14,414
|
|
|
41,005
|
|
|
—
|
|
|
|
46,315
|
|
|
25,590
|
|
|
47,464
|
|
|
143,609
|
|
|
105,642
|
|
|
|
Production Services
Division:
|
|
|
|
|
|
|
|
|
|
|
|
Routine
|
2,691
|
|
|
1,950
|
|
|
1,737
|
|
|
8,168
|
|
|
6,972
|
|
|
|
Discretionary
|
11,322
|
|
|
216
|
|
|
7,478
|
|
|
31,523
|
|
|
1,202
|
|
|
|
New-builds and
acquisitions
|
9,173
|
|
|
3,338
|
|
|
4,690
|
|
|
26,766
|
|
|
17,187
|
|
|
|
23,186
|
|
|
5,504
|
|
|
13,905
|
|
|
66,457
|
|
|
25,361
|
|
|
|
Net cash used for purchases of
property and equipment
|
69,501
|
|
|
31,094
|
|
|
61,369
|
|
|
210,066
|
|
|
131,003
|
|
|
|
Net effect of
accruals
|
9,948
|
|
|
(12,127)
|
|
|
(1,531)
|
|
|
27,721
|
|
|
4,148
|
|
|
|
Total capital
expenditures
|
$
|
79,449
|
|
|
$
|
18,967
|
|
|
$
|
59,838
|
|
|
$
|
237,787
|
|
|
$
|
135,151
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
PIONEER
DRILLING COMPANY AND SUBSIDIARIES
Drilling
Rig, Well Service Rig, Wireline and Coiled Tubing Unit
Information
|
|
|
Rig
Type
|
|
|
|
|
Mechanical
|
|
Electric
|
|
Total
Rigs
|
|
|
Drilling Services
Division:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Drilling rig horsepower
ratings:
|
|
|
|
|
|
|
|
550 to 700
HP
|
2
|
|
—
|
|
2
|
|
|
750 to 950
HP
|
9
|
|
2
|
|
11
|
|
|
1000 HP
|
18
|
|
12
|
|
30
|
|
|
1200 to 2000
HP
|
6
|
|
15
|
|
21
|
|
|
Total
|
35
|
|
29
|
|
64
|
|
|
|
|
|
|
|
|
|
Drilling rig depth
ratings:
|
|
|
|
|
|
|
|
Less than 10,000
feet
|
3
|
|
2
|
|
5
|
|
|
10,000 to 13,900
feet
|
21
|
|
6
|
|
27
|
|
|
14,000 to 25,000
feet
|
11
|
|
21
|
|
32
|
|
|
Total
|
35
|
|
29
|
|
64
|
|
|
|
|
|
|
|
|
|
Production Services
Division:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Well service rig horsepower
ratings:
|
|
|
|
|
|
|
|
400 HP
|
|
|
|
|
1
|
|
|
550 HP
|
|
|
|
|
82
|
|
|
600 HP
|
|
|
|
|
9
|
|
|
Total
|
|
|
|
|
92
|
|
|
|
|
|
|
|
|
|
Wireline units
|
|
|
|
|
109
|
|
|
|
|
|
|
|
|
|
Coiled tubing units
|
|
|
|
|
10
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
SOURCE Pioneer Drilling Company, Inc.