UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

SCHEDULE 14A INFORMATION

Proxy Statement Pursuant to Section 14(a) of the

Securities Exchange Act of 1934

(Amendment No.    )

Filed by the Registrantx¨                            Filed by a Party other than the Registrant¨

Check the appropriate box:

PIONEER DRILLING COMPANY

(Name of Registrant as Specified in Its Charter)

(Name of Person(s) Filing Proxy Statement, if Other Than the Registrant)

Payment of Filing Fee (check the appropriate box):

PIONEER DRILLING COMPANY

1250 N.E. Loop 410, Suite 1000

San Antonio, Texas 78209

April 10, 200911, 2011

Dear Shareholder:

On behalf of the board of directors, we invite you to attend the 20092011 Annual Meeting of Shareholders of Pioneer Drilling Company. We will hold the meeting at 10:1:00 a.m.p.m., Central time, on Friday,Thursday, May 15, 2009,12, 2011, at the Petroleum Club of San Antonio, 7^th7th Floor Energy Plaza, 8620 N. New Braunfels Street, San Antonio, Texas.

On the following pages you will find the Notice of Annual Meeting of Shareholders and Proxy Statement giving information concerning the matters to be acted on at the meeting. Our Annual Report to Shareholders describing Pioneer Drilling Company’s operations during the fiscal year ended December 31, 20082010, is enclosed.

We hope you will be able to attend the meeting in person. Whether or not you plan to attend, please take the time to vote by completing and returning your proxy card in the enclosed envelope before the meeting. If you attend the meeting, you may, if you wish, revoke your proxy and vote in person.

Thank you for your interest in Pioneer Drilling Company.

Sincerely,

Dean A. Burkhardt				Wm. Stacy Locke
Chairman				President and Chief Executive Officer

PIONEER DRILLING COMPANY

1250 N.E. Loop 410, Suite 1000

Suite 1000 San Antonio, Texas 78209

NOTICE OF ANNUAL MEETING OF SHAREHOLDERS

To Be Held Friday,Thursday, May 15, 200912, 2011

To the Shareholders of Pioneer Drilling Company:

The 20092011 Annual Meeting of Shareholders of Pioneer Drilling Company will be held on Friday,Thursday, May 15, 2009,12, 2011, at 10:1:00 a.m.p.m., Central time, at the Petroleum Club of San Antonio, 7^th7th Floor Energy Plaza, 8620 N. New Braunfels Street, San Antonio, Texas. At the meeting, we will ask you to consider and take action on the following:

This notice and the attached proxy statement are first being mailed to our shareholders on or about April 13, 2009.11, 2011. Our board of directors has set the close of business on March 31, 20092011, as the record date for determining shareholders entitled to receive notice of and vote at the annual meeting. A list of all shareholders entitled to vote is available for inspection during normal business hours at our principal executive offices at 1250 N.E. Loop 410, Suite 1000, San Antonio, Texas 78209. This list will also be available at the meeting.

Important notice regarding the availability of proxy materials for the shareholder meeting to be held on Thursday, May 15, 2009.12, 2011. The proxy statement and annual report to shareholders are available at www.pioneerproxy2009.com.www.pioneerproxy.com.

Your vote is very important. Whether or not you plan to attend the annual meeting, we encourage you to read the proxy statement. Further, to be sure your vote counts and to assure a quorum, please vote, sign, date and return the enclosed proxy card, whether or not you plan to attend the meeting.

San Antonio, Texas

April 10, 200911, 2011

PIONEER DRILLING COMPANY

PROXY STATEMENT

FOR 20092011 ANNUAL MEETING OF SHAREHOLDERS

QUESTIONS AND ANSWERS ABOUT THE MEETING AND VOTING

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We will count abstentions and broker non-votes as present for the purpose of establishing a quorum. A broker “non-vote” occurs when a broker holding shares for a beneficial owner does not vote on a particular proposal because the broker does not have discretionary voting power for that particular proposal and has not received instructions from the beneficial owner. If a quorum is not present, a majority in interest of those present or represented at the annual meeting may adjourn the meeting, without notice other than an announcement at the meeting, until a quorum is present or represented.

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SECURITY OWNERSHIP OF CERTAIN BENEFICIAL

OWNERS AND MANAGEMENT

The following table shows the beneficial ownership of our common stock as of March 31, 20092011 by (1) each person (or group of affiliated persons) who is known by us to beneficially own more than 5% of our common stock, (2) each of our directors and nominees, (3) each of the named executive officers listed in the summary compensation table in this proxy statement and (4) all our directors and executive officers as a group. As of March 31, 2009,2011, we were not aware of any person beneficially owning more than 5% of the outstanding shares of our common stock, other than those listed below. Unless otherwise indicated below, all shareholders have the same principal business address as Pioneer. All persons listed in the table below have sole voting and investment power with respect to their shares unless otherwise indicated. As of March 31, 2009,2011, there were 50,249,37854,357,345 shares of common stock outstanding. In accordance with the rules of the Securities and Exchange Commission (the “SEC”), the amounts shown for the number of shares and percentage of ownership for each person listed reflect as outstanding any shares that may be acquired pursuant to options exercisable within 60 days, unless otherwise indicated. These shares are also deemed outstanding for the purpose of computing the percentage of outstanding shares owned by the person; however, these shares are not deemed outstanding for the purpose of computing the percentage ownership of any other person.For all executive officers and directors, as a group, the table treats as outstanding any shares that may be acquired pursuant to options held by members of the group and exercisable within 60 days of March 31, 2009, unless otherwise indicated.

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PROPOSAL 1

ELECTION OF DIRECTORS

Our board of directors currently consists of five directors. Our board of directors is divided into three separate classes (Class I, Class II and Class III) with staggered terms. The current term of office for our two Class III directors will expire at the annual meeting. In addition, the current term of office for one Class I director (who was appointed in October 2008 after an increase in the size of the board) will expire at the annual meeting. Texas law requires that any director appointed by the board of directors to fill a vacancy created by an increase in the size of the board serve only until the next election of directors by the shareholders.

Our board of directors has nominated Mr. LockeDean A. Burkhardt and Mr. Thompson, each of whomScott D. Urban, who currently servesserve on the board of directors, as the nominees for election at the annual meeting as Class III directors. In addition, our board of directors has nominated Mr. Urban, who currently serves on the board, as the nominee for election at the annual meeting as a Class I director. Mr. LockeBurkhardt has served as one of our directors since May 1995. Mr. Thompson has served as one of our directors since May 2001.2001 and Mr. Urban has served as one of our directors since October 2008.

Assuming the presence of a quorum, directors shallwill be elected by a plurality of the votes cast by the holders of shares of capital stock of Pioneer entitled to vote on the election of directors at the annual meeting. Any abstentions or broker non-votes will not affect the vote.If you properly sign and return the enclosed proxy, unless you withhold authority to vote for the nominee,nominees, the persons named as proxies will vote FOR the election of the nominees listed below. We do not expect that the nominees will refuse or be unable to act as director.directors. If, however, any nomineeof the nominees becomes unable or unwilling to serve as a director, the persons named as proxies intend to vote the proxy shares for the election of any other person the board of directors may designate.

Nominees

Wm. Stacy Locke has served as one of our directors as well as President of the company since May 1995, when he joined Pioneer. In December 2003, Mr. Locke was appointed Chief Executive Officer. In addition to his continuous role as President, Mr. Locke has also served as Chief Financial Officer and Chief Operating Officer. Prior to joining Pioneer, Mr. Locke was in investment banking with Arneson, Kercheville, Erhenberg & Associates from 1993 to 1995 and Chemical Banking Corporation from 1988 to 1992.

C. John Thompson has served as one of our directors since May 2001. Mr. Thompson currently serves as Chairman and Chief Executive Officer of Ventana Capital Advisors, Inc., a capital advisory company he founded in June 2004. Mr. Thompson served as a Vice President of Constellation Energy, a position he held from August 2003 to May 2004. Mr. Thompson was a consultant from December 2001 to August 2003.

Scott D. Urban has served as one of our directors since October 2008. Mr. Urban is a partner in Edgewater Energy Partners, a consulting firm focused on the oil and gas exploration and production industry and assisting private

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equity firms with upstream investments. Mr. Urban served as Group Vice President, Upstream, for BP PLC from 2004 to 2005 and served as BP’s Group Vice President, North Sea Operations, from 2000 to 2004. Prior to joining BP, Mr. Urban held a variety of management positions with Amoco Corporation, including Group Vice President, Worldwide Exploration and Upstream Business Unit Manager, China. Mr. Urban received a Master’s Degree in geology and a Bachelor’s Degree in earth science from Bowling Green State University. Mr. Urban currently serves on the Board of Directors of Noble Energy, Inc. and has served as a board member of the UK Offshore Operators Association, the Business Council for International Understanding and the Netherlands Oil and Gas Exploration and Production Association.

Our board of directors unanimously recommends a vote “FOR” the election of Wm. Stacy Locke and C. John Thompson as Class II Directors and Scott D. Urban as a Class I Director.

DIRECTOR WITH A TERM EXPIRING IN 2010

John Michael Rauh has served as one of our directors since October 2008. Mr. Rauh served as Vice President and Corporate Controller of Kerr-McGee Corporation from 2001 until his retirement in 2006, where he was responsible for worldwide accounting, tax and Sarbanes-Oxley 404 compliance. He also served as a Founding Director of Kerr-McGee’s chemical operations spin-off. Mr. Rauh joined Kerr-McGee in 1981 and served in varying capacities, including Treasurer, Controller and Assistant Controller. Prior to joining Kerr-McGee, Mr. Rauh was an auditor with Arthur Young & Company, which merged with Ernst & Whinney in 1989 to form Ernst & Young. Mr. Rauh is a Certified Public Accountant. He received a Masters Degree in accounting from Oklahoma State University and a Bachelor’s Degree in accounting and economics from Northwestern Oklahoma State University.

DIRECTOR WITH A TERM EXPIRING IN 2011

Dean A. Burkhardt has served as one of our directors since October 26, 2001 and Chairman since May 2008. In addition to his role as a horse and cattle rancher, Mr. Burkhardt has been a consultant to the energy services industry since 1997 with a special emphasis in oil and gas projects in emerging markets, workover services, fuel cells and engineering and quality management services. He also served as co-founder, President and CEO (1983-1985) of Applied Petroleum Software, a provider of production engineering software for optimizing oil and gas well completions; President and CEO of Seismic Products (1982), Cliff Mock, Inc. (1982) and Tescorp Energy Services (1981-1982) as well as President and COO of Tescorp, Inc. (1982); was a co-founder (1979), Executive Vice President of Sales and Operations (1979-1981) and a director (1979-1989) of Cheyenne Services, Inc., a provider of oilfield tubular makeup, tubular inspection and third party quality assurance services.

As a result of Mr. Burkhardt’s service as a director of the Company for over nine years, he has become very familiar with our business and the important issues facing the Company. Mr. Burkhardt’s experience as a consultant in the energy services industry makes him a valuable member of the board of directors. Mr. Burkhardt serves as a member of the Audit Committee and qualifies as an “audit committee financial expert.” Mr. Burkhardt also holds a Master’s Degree in international management, with an emphasis in marketing and accounting from the American Graduate School of International Management and regularly attends seminars on accounting and financial matters, which enables him to provide guidance to the board of directors related to the Company’s international development and accounting-related matters. Mr. Burkhardt’s significant experience with several companies involved in the oil and gas industry gives him insights relating to many of the same issues we face in our business and provides a solid platform for him to advise and consult with the board of directors on such issues, including oil and gas projects in emerging markets, workover services, fuel cells and engineering and quality management services.

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Scott D. Urban has served as one of our directors since October 2008. Mr. Urban is a partner in Edgewater Energy, a consulting and investment firm focused on the oil and gas exploration and production industry and assisting private equity firms with upstream investments. Mr. Urban served as Group Vice President, Upstream, for BP PLC from 1999 to 2005 and served as BP’s Group Vice President, with responsibility for several profit centers including the North Sea, Atlantic, North American Onshore, Egypt and Middle East. Prior to joining BP, Mr. Urban held a variety of management positions with Amoco Corporation, including Group Vice President, Worldwide Exploration and Upstream Business Unit Manager, China. Mr. Urban received a Master’s Degree in geology and a Bachelor’s Degree in earth science from Bowling Green State University. Mr. Urban currently serves on the board of directors of Noble Energy, Inc. and has served as a board member of the UK Offshore Operators Association, the Business Council for International Understanding and the Netherlands Oil and Gas Exploration and Production Association.

Mr. Urban’s expertise as a consultant in the oil and gas exploration and production industry makes him a valuable member of the board of directors. Mr. Urban’s significant experience at multiple global oil and gas companies provides him with insights relating to many of the same issues we face in our business, including markets, operational, regulatory, technological, and financial. Mr. Urban’s Master’s Degree in geology gives him a deep understanding of, and enables him to advise the board of directors on, many matters relating to oil and gas drilling. Mr. Urban’s service as a member of the board of directors of Noble Energy, Inc. gives him valuable experience in managing the issues that face a publicly held oil and gas company with international operations and allows him to share best practices with our board of directors.

Our board of directors unanimously recommends a vote “FOR” the election of Dean A. Burkhardt and Scott D. Urban as a Class I Directors.

DIRECTORS WITH A TERM EXPIRING IN 2012

Wm. Stacy Locke has served as one of our directors as well as President of the Company since May 1995, when he joined Pioneer. In December 2003, Mr. Locke was appointed Chief Executive Officer. In addition to his continuous role as President, Mr. Locke has also served as Chief Financial Officer and Chief Operating Officer. Prior to joining Pioneer, Mr. Locke was in investment banking with Arneson, Kercheville, Ehrenberg & Associates from 1993 to 1995 and Chemical Banking Corporation from 1988 to 1992. Mr. Locke worked for Tesoro Petroleum Corporation and Valero Energy Corporation as a geologist from 1979 to 1982. Mr. Locke received a Bachelor’s Degree in geology from the University of California Santa Barbara and a Master of Business Administration Degree from Southern Methodist University.

Mr. Locke’s sixteen years of experience at Pioneer, including his service as Chief Executive Officer for eight years, gives him unique knowledge of the opportunities and challenges associated with our business. Mr. Locke’s familiarity with all aspects of Pioneer’s business and his historical understanding of its operations, combined with his understanding of the oil and gas industry, geology and investment banking makes him uniquely qualified to advise the board of directors and to lead Pioneer as Chief Executive Officer.

C. John Thompson has served as one of our directors since May 2001. Mr. Thompson currently serves as Chairman and Chief Executive Officer of Ventana Capital Advisors, Inc., a capital advisory company he founded in June 2004. Mr. Thompson has over 30 years experience in the energy capital business. Mr. Thompson has worked as a business consultant, in the energy capital business with Enron, the investment banking services business with a company he co-founded, Sagestone Capital Partners, and as the manager of the energy commercial banking business with InterFirst Bank in Houston.

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As one of Pioneer’s longest-serving non-executive directors, Mr. Thompson brings an important institutional knowledge to the board of directors. His work as an executive in the oil and gas industry, and his experience in the energy capital business including more than ten years in energy commercial banking, provides him with insights relating to many of the same issues facing our business, including markets, operational, regulatory, technological, and financial. Mr. Thompson also serves as a member of the Audit Committee and qualifies as an “audit committee financial expert.” Mr. Thompson holds a Master’s Degree in Business Administration with an emphasis in finance and accounting from the University of Texas at Austin, which enables him to provide guidance to the Board on finance and accounting-related matters. Mr. Thompson’s experience as founder of a capital advisory company and as a consultant provides the board of directors with a unique perspective into different industries and an understanding of various capital strategies.

DIRECTORS WITH A TERM EXPIRING IN 2013

John Michael Rauh has served as one of our directors since October 2008. Mr. Rauh served as Vice President and Corporate Controller of Kerr-McGee Corporation from 2001 until his retirement in 2006, where he was responsible for worldwide accounting, tax and Sarbanes-Oxley 404 compliance. He also served as a Founding Director of Kerr-McGee’s chemical operations spin-off. Mr. Rauh joined Kerr-McGee in 1981 and served in varying capacities, including Vice President and Treasurer, Vice President and Controller, and Assistant Controller. Prior to joining Kerr-McGee, Mr. Rauh was an auditor with Arthur Young & Company, which merged with Ernst & Whinney in 1989 to form Ernst & Young. He received a Master’s Degree in accounting from Oklahoma State University and a Bachelor’s Degree in accounting and economics from Northwestern Oklahoma State University. Mr. Rauh was elected in 2010 and currently serves as a director on the Northwestern Oklahoma State University Foundation Board of Directors. Mr. Rauh served as a director of Tronox, Inc. from 2005 to 2006. Mr. Rauh, as well as other Tronox and Kerr-McGee officers and directors, has been named as a defendant in a complaint filed in the United States District Court for the Southern District of New York asserting securities law violations. The Court has dismissed the allegations that Mr. Rauh violated Section 10(b) of the Securities Exchange Act. Mr. Rauh currently remains in the case only with respect to allegations that he was a “control person” of Tronox under Section 20 of the Securities Exchange Act for approximately a four month period. There are no current allegations that Mr. Rauh directly violated any securities laws. Mr. Rauh plans to continue to defend against the control person allegations as the litigation continues.

Mr. Rauh’s expertise in a variety of financial and accounting matters, experience in Sarbanes-Oxley 404 compliance and service with a global oil and gas business make him a valuable member of the board of directors and enhances the value of his service as a member of the Audit Committee, where he also qualifies as an “audit committee financial expert.” Mr. Rauh’s Bachelor’s and Master’s Degrees in accounting enable him to advise the Board on accounting-related matters. Mr. Rauh’s experience at a global oil and gas company provide him with insights relating to many of the same issues we face in our business, including markets, operational, regulatory, technological, and financial. Mr. Rauh’s significant experience in several senior financial positions at Kerr-McGee, as well as his previous service as an auditor with an accounting firm, provides a solid platform for him to advise and consult with the board of directors on financial and audit-related matters.

There are no family relations of first cousin or closer among our directors or executive officers by blood, marriage or adoption. The board has determined that all of our directors are independent directors, as defined by the rules of the NYSE Alternext US,Amex, other than Mr. Locke who, as President and Chief Executive Officer, is an employee of Pioneer.

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INFORMATION CONCERNING MEETINGS

AND COMMITTEES OF THE BOARD OF DIRECTORS

Director Meetings

Our board of directors held nineteenten meetings and acted by written consent five times during the fiscal year ended December 31, 2008.2010. The board has three standing committees: an audit committee; a compensation committee; and a nominating and corporate governance committee. During the fiscal year ended December 31, 2008,2010, all of the directors attended at least 75%100% of the total number of meetings of the board and any committee on which each served. In addition, the independent directors also held regular meetings consisting solely of independent directors during the fiscal year ended December 31, 2008.2010.

Independent Chairman of the Board

Our board of directors has separated the roles of Chairman and Chief Executive Officer. The separation of roles was implemented to allow our Chief Executive Officer, Mr. Locke, to focus on the management of the Company and our independent Chairman to focus on the continued development of a high-performing board of directors, including (i) developing board agendas, (ii) working with Company management to ensure the board of directors has timely and adequate information, (iii) coordinating board committee activities, (iv) supporting and mentoring the Chief Executive Officer and (v) ensuring effective stakeholder communications. Among the duties and responsibilities of our independent Chairman are the following:

Audit Committee

Messrs. Bunch, Burkhardt, and Thompson served on theThe members of our audit committee from January 1, 2008 through August 19, 2008.during the fiscal year ended December 31, 2010 were Messrs. Burkhardt, Thompson, Rauh (chairman) and Mr. BunchUrban, who was elected to the committee in May 2010. Mr. Rauh served as the Chairmanchairman of the audit committee until his resignation fromduring the board of directors on August 19, 2008. Mr. Burkhardt was appointed as the Chairman on August 20, 2008. From August 20, 2008 through October 13, 2008, the audit committee consisted of Messrs. Burkhardt and Thompson. On October 14, 2008, Mr. Rauh was appointed to the audit committee.fiscal year ended December 31, 2010. The audit committee met ninefive times during the fiscal year ended December 31, 2008.2010. The audit committee is governed by a charter that the board of directors amended and restated on December 11, 2008. You can obtain a copy of that charter by making a request for a copy to our Corporate Secretary or by going to our Web site atwww.pioneerdrlg.com.

Our common stock is listed on the NYSE Alternext US.Amex. As such, we have agreed to comply with the listing standards of the NYSE Alternext US,Amex, which require that we have at least three members of the audit committee, each of whom is independent. Each of our audit committee members is independent, as defined by the rules of the NYSE Alternext USAmex and the rules and regulations of the SEC. In addition, the board has determined that each member of the audit committee is an “audit committee financial expert” as defined by the SEC. The experience of each member of the audit committee is described in the biographies under the heading “Proposal 1 – 1—Election of Directors.”

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The audit committee’s role is one of financial oversight. Our management is responsible for preparing our financial statements, and our independent auditors are responsible for auditing those financial statements. The audit committee is not providing any expert or special assurance as to our financial statements or any professional certification as to the independent auditors’ work. The following functions are the key responsibilities of the audit committee in carrying out its oversight:

The audit committee meets separately from the whole board with the independent auditors to provide an open avenue of communication. The audit committee is ultimately responsible for the selection, evaluation and replacement of our independent auditors.

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Compensation Committee

Messrs. Bunch, Burkhardt (Chairman), Harness, and Thompson served on theThe members of our compensation committee from January 1, 2008 through May 16, 2008. Mr. Harness resigned fromduring the board of directors effective May 16, 2008. Messrs. Bunch, Burkhardt (Chairman) and Thompson served on the compensation committee from May 16, 2008 through August 19, 2008. Mr. Bunch resigned from the board of directors on August 19, 2008. From August 20, 2008 through October 13, 2008, the compensation committee consisted offiscal year ended December 31, 2010 were Messrs. Burkhardt, Thompson, Urban (chairman) and Thompson. Mr. ThompsonRauh, who was appointed Chairmanelected to the committee in May 2010. Mr. Urban served as chairman of the compensation committee on August 21, 2008. On October 13, 2008, Mr. Urban was appointed toduring the compensation committee. Thefiscal year ended December 31, 2010.The compensation committee met sixfour times and acted by written consent six times during the fiscal year ended December 31, 2008.2010. In addition, the compensation committee also held meetings with our compensation consultant during the fiscal year ended December 31, 2010. Each of our compensation committee members is independent, as defined by the rules of the NYSE Alternext US.Amex. The compensation committee is governed by a charter that the board amended and restated on December 11, 2008. You can obtain a copy of that charter by making a request for a copy to our Corporate Secretary or by going to our Web site atwww.pioneerdrlg.com. www.pioneerdrlg.com. The compensation committee’s responsibilities include:

Except as described in the Compensation Discussion and Analysis section of this proxy statement, at this time, the Compensation Committeecompensation committee does not intend to delegate its powers and authority to any subcommittee or other persons. For additional information concerning the compensation committee, see “Compensation Discussion and Analysis” and “Report of the Compensation Committee.”

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Nominating and Corporate Governance Committee

The members of our nominating and corporate governance committee during the fiscal year ended December 31, 2010 were Messrs. Bunch, Burkhardt, Harness,Thompson (chairman), Urban and Mr. Rauh, who was elected to the committee in May 2010. Mr. Thompson (Chairman) served onas chairman of the nominating and corporate governance committee from January 1, 2008 through May 16, 2008. Mr. Harness resigned fromduring the board of directors effective May 16, 2008. Messrs. Bunch, Burkhardt and Thompson (Chairman) served on the nominating and corporate governance committee from May 16, 2008 through August 19, 2008. Mr. Bunch resigned from the board of directors on August 19, 2008. From August 20, 2008 through October 13, 2008, the nominating and corporate governance committee consisted of Messrs. Burkhardt and Thompson. On October 14, 2008, Mr. Urban was appointed to the nominating and corporate governance committee.fiscal year ended December 31, 2010. The nominating and corporate governance committee held sixtwo meetings during fiscal year ended December 31, 2008.2010. Each of our nominating and corporate governance committee members is independent, as defined by the rules of the NYSE Alternext US.Amex.

The nominating and corporate governance committee is responsible for seeking, evaluating and recommending qualified individuals to become directors and serve on committees of the board of directors. The committee is also responsible for periodically reviewing and assessing the adequacy of our corporate governance policies and procedures and recommending proposed changes to the board. In addition, the committee periodically assesses the performance of the board of directors. The nominating and corporate governance committee is governed by a charter that the board amended and restated on December 11, 2008. You can obtain a copy of that charter by making a request for a copy to our Corporate Secretary or by going to our Web site atwww.pioneerdrlg.com. www.pioneerdrlg.com.

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Director Nominations

The nominating and corporate governance committee considers candidates for board membership suggested by its members and other board members, as well as by management and shareholders. The committee may also retain a third-party executive search firm to identify candidates from time to time. In 2008, the nominating and corporate governance committee retained SpencerStuart, a third-party executive search firm, to identify and evaluate potential director candidates. SpencerStuart assisted the committee in identifying Mr. Rauh and Mr. Urban, who were appointed to our board of directors in October 2008. Shareholders wishing to suggest a qualified candidate should submit the recommendation in writing to the nominating and corporate governance committee in care of our Corporate Secretary at 1250 N.E. Loop 410, Suite 1000, San Antonio, Texas 78209. Any shareholder wishing to submit a candidate for consideration should send the following information to the Corporate Secretary:

Once a prospective candidate has been identified, the nominating and corporate governance committee makes the initial determination as to whether to conduct a full evaluation of the candidate. This initial determination is based on the information provided to the committee with the recommendation of the prospective candidate, as well as the committee’s own knowledge of the prospective candidate, which may be supplemented by inquiries to the person making the recommendation or others. If the committee determines that additional consideration is warranted, it may ask a third-party search firm to gather additional information about the candidate’s background and experience and to report its findings to the committee. The committee then evaluates the prospective candidate by considering, in addition to the criteria set forth in our bylaws, each nominee’s personal and professional integrity, experience, skills, ability and willingness to devote the time and effort necessary to be an effective board member, and commitment to acting in our shareholders’ and our best interests. Consideration is also given to members of the board of directors having an appropriate mix of background and skills. Although we do not have a formal diversity policy in place for the director nomination process, an important factor in our nominating and corporate governance committee’s consideration and assessment of a candidate is the diversity of the candidate’s background, viewpoints, training, professional experience, education and skill set. The nominating and corporate governance committee strives to nominate candidates with a variety of complementary skills so that, as a group, the board of directors will possess the appropriate talent, skills, and expertise to oversee the Company’s business.

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The same criteria apply with respect to the nominating and corporate governance committee’s evaluation of all candidates for membership to our board, including candidates recommended by shareholders. However, additional procedures will apply, as provided in our bylaws, if a shareholder wishes to submit at an annual meeting a director candidate who is not approved by our nominating and corporate governance committee or our board.board of directors.

Any shareholder desiring to nominate a director at our 20102012 Annual Meeting of Shareholders without including such nomination in our proxy materials for that meeting must provide timely notice to the Company of such nomination in the form provided by our bylaws. See our bylaws for a description of the required form and content of this notice. To be timely, such notice must ordinarily be delivered to our principal executive offices (Attention: Corporate Secretary), at the address set forth above, no later than the close of business on the 90th day nor earlier than the 180th day prior to the first anniversary date of the preceding year’s annual shareholder meeting (i.e., nominations for director for inclusion in the 20102012 Annual Meeting of Shareholders must be delivered to our principal executive offices no earlier than November 16, 200914, 2011, and no later than the close of business on February 15, 2010)13, 2012), or such proposal will be considered untimely. However, in the event that the date of the pending annual meeting of shareholders is more than 30 days before or more than 60 days after the first anniversary of the previous year’s annual meeting of shareholders, then such notice must be received not later than the later to occur of the close of business on the 90th day prior to the pending annual meeting of shareholders or the 10th day following the day on which public announcement of the date of such annual meeting of shareholders is first made by the Company. The foregoing time limits also apply in determining whether notice is timely for purposes of rules adopted by the SEC relating to the exercise of discretionary voting authority.

Any shareholder desiring a copy of our bylaws will be furnished one without charge upon written request to the Corporate Secretary at 1250 N.E. Loop 410, Suite 1000, San Antonio, Texas 78209.

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Code of Conduct and Ethics

We have adopted a Code of Conduct and Ethics that satisfies the SEC’s definition of a “Code of Ethics” and applies to all employees, including our principal executive officer, principal financial officer and principal accounting officer. The Code of Conduct and Ethics is posted on our Web site atwww.pioneerdrlg.com. We intend to disclose on our Web site any amendments to the Code of Conduct and Ethics and any waivers of the Code of Conduct and Ethics that apply to our principal executive officer, principal financial officer and principal accounting officer.

Board’s Role in Risk Oversight

Our board of directors is responsible for the Company’s risk-oversight function. The board of directors, with the assistance of its standing committees, our Chief Executive Officer, our Chief Financial Officer, our General Counsel, and our Director of Corporate Development, identifies, evaluates and discusses the material enterprise risks that could impact the Company’s operations and tactical and strategic decisions. These enterprise risks include operational, financial, legal, regulatory, market, and reputational risks. In addition, the board of directors reviews the risks associated with the Company’s strategic plan at an annual strategic planning session and periodically throughout the year as part of its consideration of the strategic direction of the Company. Each board committee also oversees the management of the Company’s risks that fall within each committee’s areas of responsibility. In performing this function, each committee has full access to management, as well as the ability to engage advisors.

Risk—Related Compensation Policies and Practices

The compensation committee has undertaken an assessment of the risk profile of its executive and non-executive compensation programs. With the assistance of our Chief Executive Officer, our Chief Financial Officer, our General Counsel, our Global Director of Human Resources and our compensation consultant, the

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compensation committee has developed a framework to assist the compensation committee in ascertaining any potential material risks associated with its executive compensation program, including: external market reference; pay mix; range and sensitivity of performance-based variable plans; selection of performance metrics; goal-setting process; and the Company’s checks and balances on the payment of compensation. This process enables the compensation committee to consider if any of the Company’s current compensation programs, practices or procedures should be altered in order to ensure that an appropriate balance between competitive pay and prudent risk is maintained. As a result of this analysis, the compensation committee has identified the following risk mitigating factors:

As a result of the above assessment, the compensation committee believes that the Company’s compensation policies and practices do not create risks that are reasonably likely to have a material adverse effect on the Company.

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Director Compensation

During the fiscal year ended December 31, 2008,2010, we paid to each of our non-employee directors fees for service on our board of directors or committees of our board as follows:

Prior to 2008, we generally granted non-employee directors options to purchase 10,000 shares of common stock upon their appointment to the board of directors and 10,000 shares of common stock in each subsequent year that they remained a member of the board of directors. During 2008,2010, the Compensation Committee continued the practice of granting each new member of the board of directors an option to purchase 10,000 shares of common stock and granted a restricted stock award with a fair market value of approximately $100,000 to the returning memberseach member of the board of directors. In addition, we reimburse the directors for out-of-pocket expenses they incur in connection with attending meetings of the board of directors and board committees or otherwise in their capacity as directors. Our executive officers do not make recommendations regarding the non-employee directors’ compensation.

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We expect each director to make every effort to attend each meeting of the board of directors, each meeting of any board committee on which he sits and the annual meeting of shareholders. Attendance in person at board and committee meetings is preferred but not required; attendance by teleconference is permitted, if necessary. All of our directors attended last year’s annual meeting.

The following table summarizes the compensation we paid each of our non-employee directors during the fiscal year ended December 31, 2008:2010:

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Stock Ownership Guidelines

12In order to encourage the acquisition and retention of our common stock by our directors and to further align their economic interests with those of our shareholders and to focus our directors on the long-term sustained appreciation of our common stock, our compensation committee and our board of directors have adopted guidelines generally requiring each of our directors to own an amount of our common stock equal to the value of three times such director’s annual cash retainer. The ownership target is to be acquired no later than the December 31 following the fifth anniversary of the director’s initial appointment or election to the board of directors, or by December 31, 2013 for any director serving on the board of directors as of May 17, 2008. For purposes of this calculation, unvested restricted stock and restricted stock units may be counted toward the applicable ownership requirement. As of March 31, 2011, all directors have fully met their stock ownership requirements.

The following table provides information on the outstanding equity awards for each of our non-employee directors as of December 31, 2008:2010:

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EXECUTIVE OFFICERS

The following table provides information about our current executive officers (ages are as of March 31, 2009)2011):

For a description of the business background of Mr. Locke, see “Directors with Termsa Term Expiring in 2009”2012” above.

Lorne E. Phillips was appointed Executive Vice President and Chief Financial Officer effective February 1, 2009. Prior to joining Pioneer Drilling Company, Mr. Phillips worked the last 10 years at Cameron International Corporation, serving most recently as Vice President and Treasurer. Prior to that, he was General Manager of Cameron’s Canadian valves operations, Vice President of Marketing and M&A for the valves division, and Business Development Manager for Cameron. Before joining Cameron, he was a Financial Analyst for SCF Partners, a provider of equity capital to energy service and equipment companies, and for Simmons & Company International, an investment bank focused on the energy industry.

Franklin C. Westcurrently serves as Executive Vice President and President of our Drilling Services Division. Prior to his appointment as President of our Drilling Services Division on March 1, 2008, Mr. West served as our Chief Operating Officer sincebeginning in January 2002. Prior to joining Pioneer, he was Vice President for Flournoy Drilling Company from 1967 until it was acquired by Grey Wolf, Inc. in 1997, and he continued in the same capacity for Grey Wolf, Inc., an on-shore oil and gas drilling contractor, until December 2001.

Joseph B. Eustace was appointed as Executive Vice President and President of our Production Services Division on March 1, 2008. Prior to joining Pioneer Drilling Company, Mr. Eustace served as President of WEDGE Oil and Gas Services sincebeginning in 2004. Prior to 2004, Mr. Eustace served as Group Vice President for Key Energy Services from 1998 to 2004, and as Vice President of Operations for Dawson Production Services from 1982 until Key Energy Services acquired Dawson Production Services in 1998.

Carlos R. PenaPeña was appointed Senior Vice President, General Counsel, Secretary and Compliance Officer effective October 27, 2008. Mr. PenaPeña has practiced law since 1992 and has experience providing both outside corporate and securities counsel and in-house M&A counsel. Prior to joining Pioneer Drilling in October 2008, he worked for AT&T, Inc. in the M&A legal group. From 1996 to 2007, he focused on securities and corporate finance, M&A, venture capital, and corporate governance at Fulbright & Jaworski L.L.P., Cox Smith Matthews Incorporated, and Vinson & Elkins L.L.P.

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COMPENSATION DISCUSSION AND ANALYSIS

Introductory Note

The compensation committee of our board of directors (the “Compensation Committee”) and Company management evaluated and set 20082010 executive compensation in the context of the Company’s performance and certainthe challenging global economic environment since late 2008.

Executive Summary

In 2010, our named executive officers demonstrated their capacity to perform well during the challenging economic environment and disruptive market cycles, which translated into a number of significant changesachievements for the Company. We are especially gratified by our ability to navigate such a difficult and uncertain year while continuing to advance the long-term interests of our stockholders. Key highlights of the Company’s 2010 performance include the following:

The Compensation Committee believes that our executive compensation program has played a significant role in our ability to drive strong financial results and the creation of shareholder value, which is demonstrated by the accomplishments of our executive team over the last fiscal year. The following are key aspects of our executive compensation program in 2010:

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We are pleased with the success of our executive team during 2010. As we prepare for 2011, we look forward to the opportunities and achievements of the coming year. The Compensation Committee has taken the following key actions that will affect 2011 executive compensation:

Compensation Committee

The Compensation Committee administers our executive compensation program and is responsible for establishing appropriate compensation for our named executive officers. The duties of the Compensation Committee include:

The Compensation Committee periodically reviews its own performance so that it might find ways to adapt to changes impacting compensation decisions and decision-making processes. The Compensation Committee also annually reviews the effectiveness of our compensation programs in obtaining desired results.

Compensation Philosophy

The Compensation Committee designs our executive compensation programs to:

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The Compensation Committee reviews each element of compensation annually. Variable compensation (annual cash incentives, stock options, restricted stock awards and long-term incentive restricted stock awards) supports our pay for performance philosophy and represents approximately 55%62% to 85%73% of target total direct compensation to our named executive officers. Annual cash incentive compensation is based on various performance measures intended to provide incentives for executives to make decisions that result in strong annual performance results. This is balanced by long-term equity incentive compensation in the form of stock option awards and long-term incentive restricted stock awards. Stock option awards generally vest over 3three years and are exercisable over a 10 year term. RestrictedLong-term incentive restricted stock awards are based on achievement by the Company of certain performance measures relative to its peers over a three-year performance period and then generally vest ratably over 3 years.in three annual installments following the end of the performance period. Beginning with awards granted in 2011, performance-based restricted stock awards are subject to a three-year performance period with cliff vesting following the completion of the performance period. As a result, our compensation program provides incentives to our executives to make business decisions that result in long-term shareholder value.

Change in Fiscal Year EndBenchmarking

In December 2007, our board of directors approved a change in our fiscal year end from March 31 to December 31. The fiscal year end change was effective December 31, 2007 and resulted in a nine-month financial reporting period from April 1, 2007 to December 31, 2007. However, for purposes of determining annual cash incentive

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compensation, the Compensation Committee retained the previously established performance measurement period of April 1, 2007 to March 31, 2008 (“Plan Year 08-A”). In addition, in February 2008, the Compensation Committee established a nine-month performance measurement period from April 1, 2008 to December 31, 2008 (“Plan Year 08-B”) and determined the target levels of the performance measures for annual cash incentive compensation for Plan Year 08-B. This resulted in two performance measurement periods ending during the January 1, 2008 to December 31, 2008 fiscal year—Plan Year 08-A ended on March 31, 2008 and Plan Year 08-B ended on December 31, 2008.

According to SEC rules and regulations, non-equity incentive plan compensation, such as our annual cash incentive compensation, is reported in the fiscal year in which the relevant performance measure is satisfied. The performance measures for both Plan Year 08-A and Plan Year 08-B were satisfied during the fiscal year ended December 31, 2008. As a result, in the Summary Compensation Table and related explanatory tables below, the amounts indicated for Non-Equity Incentive Plan Compensation for the fiscal year ended December 31, 2008, include awards for both Plan Year 08-A and Plan Year 08-B.

Beginning in 2009, and for each subsequent year, we expect the Compensation Committee to evaluate and determine executive compensation, including annual cash incentive compensation, based on a January 1 to December 31 fiscal year.

Benchmarking

In March 2008,2010, the Compensation Committee retained Stone Partners as an independent compensation consultant to assist in the Compensation Committee’s compensation determinations. Stone Partners reported to, and acted at the direction of, the Compensation Committee. Stone Partners was instructed to benchmark executive positions, to review general trends relating to executive compensation in the drilling and oilfield services industry, and to review the operation of our incentive plans. The Compensation Committee reviewed several sources as a reference for determining competitive total compensation packages. These sources included published data from Watson Wyatt Top Management, William M. Mercer-Energy, and Stone Partner’sPartners’ Executive Oilfield Manufacturing and Services Industry compensation surveys. Both Watson Wyatt (national survey data) and Mercer-Energy (industry survey data) are nationally known, highly respected sources for data. Stone Partner’s survey (available to participants only and another industry survey) included 71 oilfield manufacturing and service companies; 2008 was the 12^th year of publication for this survey. In addition, the Compensation Committee reviewed proxy statement data from a peer group of companies. In December 2007, we2009, the Compensation Committee determined that our fiscal year 20082010 industry peer group would consist of the following companies:

Two companies previously on the peer company list were dropped: TODCO because it was acquired by Hercules Offshore, Inc. and Petroleum Development Corp. because its 2007 revenues were below $300 million. These companies were selected for compensation benchmarking because of similarities we shared in anticipation of the acquisition of our Production Services division, including a common industry (oilfield services) and similar levels of market capitalization (between $422.7$149.2 million and $4.7$2.4 billion), 2007enterprise value (between $174.0 million and $2.7 billion), third quarter 2009 assets (between $547.7$453.9 million and $5.4$2.6 billion) and 20072009 third quarter trailing twelve months revenue (between $312$170.4 million and $2$1.7 billion). Companies of interest included Helmerich & Payne, Inc., Nabors Industries, Inc. and Patterson UTI Energy Inc. The companies of interest are not used for benchmarking data, but are consulted for compensation trends such as market practices for each compensation component (i.e., salary increases, structure and use of long-term incentives, prevalence of certain equity incentive vehicles, stock ownership guidelines, etc.).

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In April 2008,March 2010, the compensation consultant benchmarked the 25th, 50th and 75th percentiles for the data sources mentioned above to gain an understanding of competitive pay practices. The industry peer group, industry surveys and national survey data are equally weighted, considered for each elementvarious elements of compensation (including base salary, base salary plus target annual incentive compensation, and target long-term equity awards), and collectively referred to as the “survey data” throughout this Compensation Discussion and Analysis. In evaluating and setting compensation for our named executive officers, the Compensation Committee does not target a specific percentile within the survey data, but rather uses the survey data as a guide, in combination with the other factors discussed in this compensation discussionCompensation Discussion and analysis,Analysis, to determine compensation levels for our named executive officers.

Elements of Compensation

Base Salary

We pay our executive officers, including the officers named in the Summary Compensation Table included in this proxy statement (the “named executive officers”) base salaries that are at levels the Compensation Committee believes are necessary to attract and retain talented officers. The Compensation Committee generally determines base salary amounts on an annual basis. Because other elements of compensation are typically expressed as a percentage of base salary, maintaining a competitive base salary for each named executive officer is a high priority in the current oilfield services industry employment market and is particularly important to us given our focus as a growth company within that industry. The Compensation Committee assesses performance for base salary purposes using a qualitative, rather than quantitative, performance assessment. The Compensation Committee does not use a specific performance formula or a weighting of factors in determining base salary levels. Instead, in general, the Compensation Committee considers financial performance, execution of our business strategy, and individual contributions to the business, as well as pay levels of comparable executives at peer companies.In considering these factors, the Compensation Committee reviews executive performance with the Chief Executive Officer and generally relies on the Chief Executive Officer’s evaluation of each officer’s performance (other than his own).

The following table sets forth each named executive officer’s annual base salary as of December 31, 20072009 and December 31, 2008.2010.

Joyce M. Schuldt, who resigned as Chief Financial Officer in August 2008, received an annual base salary of $300,000 prior to her resignation.

In August 2008,May 2010, the Compensation Committee reviewed base salaries for the named executive officers in accordance with the factors discussed above. As discussed above, Mr. Locke’s responsibilities significantly increased due to the Production Services Acquisition. As a result, the Compensation Committee increased Mr. Locke’s annual base salary by 22.2% to reflect these additional responsibilities. The base salaries for the other named executive officers increased an average of 7.8% inIn accordance with expected competitive pay practices for fiscal 2008.

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2010, the base salaries for the named executive officers did not increase except for Mr. Peña. Mr. Peña received a base salary increase to better align his base salary with that of similarly situated officers at our peer companies. After thesethis salary increases,increase, with the exception of Mr. West, base salaries of the named executive officers rangedfell between the 38th25th and 69th75th percentile of the survey data discussed under “Benchmarking” above. The base salary of Mr. West is 136.5% of the market median and 102% of the 75th percentile of the benchmark survey. Given the importance of Mr. West’s position with the company, his tremendous breadth and depth of drilling expertise and experience, the Compensation Committee believes a base salary which is approximately equivalent to the 75th percentile is reasonable. On average, base salaries for our named executive officers fall atwithin 10% of the market median. The Compensation Committee has determined that base salaries at this level enable us to attract and retain talented officers while permitting us to pay a substantial portion of total direct compensation in the form of variable compensation (annual cash and long-term equity incentives).

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Annual Cash Incentive Compensation

Since 2006, the Compensation Committee has implemented an annual formula-based, cash-incentive plan. The plan rewards officers for performance in each year. The named executive officers can receive up to approximately 30%17-21% of their total direct compensation (including base salary, target annual cash incentive compensation and target long-term equity incentive compensation) in the form of annual cash incentives. Approximately 21% of Mr. Locke’s targeted total direct compensation is allocated to the annual cash incentive award. Approximately 17-19% of the other named executive officers’ targeted total direct compensation is allocated to the annual incentive award. The Compensation Committee allocated a higher percentage (21%) of Mr. Locke’s total direct compensation to the annual cash incentive award because the Compensation Committee believes his position uniquely allows him to influence the financial performance of the Company and, accordingly, his compensation should be more closely tied to the Company’s financial results. The Compensation Committee has determined that this level of annual cash incentive compensation appropriately motivates our executive officers to produce strong business performance each year while allowing for a competitive base salary and other forms of compensation to encourage creation of long-term shareholder value.

The cash incentive award levels for the named executive officers for Plan Year 08-A,2010, expressed as a percentage of base salary, were as follows:

Because Joseph B. Eustace joined the Company in March 2008, he did not participate in the cash incentive award program for Plan Year 08-A.

The cash incentive award levels for the named executive officers for Plan Year 08-B, expressed as a percentage of base salary, were as follows:

Because Joyce M. Schuldt resigned from the Company in August 2008, she did not participate in the cash incentive award program for Plan Year 08-B.

For each performance measure, a “target” level is established annually. The “threshold” and “above expectation” levels are functions of the target level. The target level for the performance measures generally derives from our board-approved budget. The Compensation Committee strives to set performance goals that are both measurable and achievable while providing effective incentive to contribute to our growth. Cash incentive payments are prorated if performance measure results fall between threshold and target or between target and above expectation. Factors taken into account in determining each named executive officer’s annual cash incentive award target include the individual’s responsibilities, the individual’s experience, and overall fairness, as well as competitive pay practices that are discussed under “Benchmarking” above.

During 2008, we basedThe proposed cash incentive awards for each named executive officer are based on achievement of specific performance measures (weighted at 80%) and on the Compensation Committee’s subjective assessment of each named executive officer’s individual performance objectives.(weighted at 20%). While the performance measures may change from year to year, as further discussed below, our annual performance measures for both Plan Year 08-A and Plan Year 08B2010 included: earnings per share; earnings before income tax, depreciation and amortization expense or “EBITDA”; EBITDA return on capital employed; and safety record (recordable incident rate). For the earnings per shareEBITDA and return on capital

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employed calculations, we excluded the impact of goodwill and intangible asset impairment charges. In addition to the performance measures described above, there was an additional threshold on the achievement of cash incentive awards for 2010. The cash incentive awards would only be awarded if the Company’s EBITDA for fiscal year 2010 exceeded $30 million.

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For Plan Year 08-B,2010, the EBITDA objective for the corporate officers was consolidated EBITDA for the entire companyCompany and for divisional officers was that division’s EBITDA; Mr. Locke, as the Chief Executive Officer, isMr. Phillips, and Mr. Peña are the only executiveexecutives with the return on capital employed as an objective; the other executives have additional weight allocated to their EBITDA objective.

For Plan Year 08-A,2010, the Compensation Committee determined the total dollar amount of the discretionary portion of the annual cash incentive award available for all participants, including the named executive officers. In making their determination of the overall discretionary incentive award, the Committee considered the Company’s performance as compared to peer performance, the Company’s achievement of strategic objectives, and the Company’s performance as compared to plan. The Compensation Committee determined the individual discretionary award for Mr. Locke based on the individual performance objectives indicated below. Mr. Locke made a recommendation to the Compensation Committee with regard to each of the other named executive officers’ individual discretionary awards based on the individual performance objectives indicated below. For 2010, the Compensation Committee accepted Mr. Locke’s recommendations without modification. The individual performance objectives for the named executive officers included: expand strategically, build out the management team to accommodate strategic expansion, continue to improve communications with the board of directors, optimize internal controls and compliance processes, continue to improve operation performance refine(increase utilization and margins, perform drilling rig fleet upgrades, deploy assets to oil-focused opportunities, remarket idle assets, etc.), enhance marketing processes and enhance safety program. For Plan Year 08-B, individual performance objectives were not established and that portion of the cash incentive compensation was discretionary.

The weighting of the current performance measures and individual performance objectives for the named executive officers for Plan Year 08-A2010 was as follows:

The weighting of the current performance measures and individual performance objectives for the named executive officers for Plan Year 08-B was as follows:

The Compensation Committee has subjectively determined that these weighting percentages appropriately correspond to our business objectives and encourage the named executive officers to focus on those factors that the Compensation Committee feels are important for both our short-term and long-term success.

For Plan Year 08-A, theThe Compensation Committee approved in May 2007the 2010 performance measures and performance objectives in for Messrs. Locke, West, Lacombe and Hibbetts, and in July 2007 for Ms. Schuldt, after reviewing the appropriateness of the performance measures used in the past and determining anticipated difficulties in achieving specific performance targets. For Plan Year 08-B, the Compensation Committee approved in November 2008 performance measures for Messrs. Locke, West, Lacombe, Eustace and Hibbetts after reviewing the appropriateness of the performance measures used in the past and determining anticipated difficulties in achieving specific performance targets.

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The approved financial performance criteria and the actual performance achieved for Plan Year 08-A and Plan Year 08-B2010 were:

Within this framework, the Compensation Committee determined that the threshold objectives for earnings per share, EBITDA, and EBITDA Return on Capital Employed had been exceeded in Plan Year 08-A and that theBase salary plus target objectives for each of these performance measures had been exceeded in Plan Year 08-B. We strive to set a target safety record goal that is both achievable and provides effective incentive to perform individual functions in a manner that is as safe as reasonably possible. For the past two plan years, our target safety record goal was set below published industry average incident rates. For Plan Year 08-A, the Compensation Committee determined that performance exceeded the above expectation objective for safety record. The Compensation Committee then increased the difficulty of our target safety record goal by over 25% for Plan Year 08-B as compared to the prior plan year. For Plan Year 08-B, the Compensation Committee again determined that performance exceeded the above expectation objective for safety record.

The following table indicates the totalannual cash incentive award and the amount of the cash incentive award that corresponds to each performance measure for each named executive officer for Plan Year 08-A and Plan Year 08-B were:

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Total cash compensation (including base salary and annual incentive compensation) established for the named executive officers in May 2008 rangedfell between the 37th25th and 68th75th percentile of the survey data discussed under “Benchmarking” above. On average, the totalbase salary plus target annual cash compensationincentive for our named executive officers falls atslightly above the market median. The Compensation Committee has determined that this level of annual cash incentive compensation provides for a competitive base salary and motivates management to achieve annual business objectives while allowing the Company to also provide a significant portion of the named executive officers’ total direct compensation in the form of long-term equity incentive compensation to motivate the creation of long-term shareholder value. The “Non-Equity Incentive Plan Compensation” column of the 2010 Summary Compensation Table below sets out the annual cash incentive compensation received by each of the named executive officers for the 2010 fiscal year.

Long-Term Equity Incentive Compensation

Our 2007 Incentive Plan provides forIn February 2010, the Compensation Committee granted stock option awards and long-term incentive restricted stock and performance-based cash awards to our named executive officers.officers pursuant to our 2007 Incentive Plan. The Compensation Committee believes thisthese elements of long-term element of compensation motivatesmotivate management to seek to maximize long-term shareholder value. According to guidelines adopted by the Compensation Committee for granting of awards, each eligible employeenamed executive officer receives long-term equity incentive awards at the Compensation Committee’s discretion based on the following considerations: (1) the employee’s base salary; (2) a multiple of base salary based on the employee’s position with the company,Company, the employee’s responsibilities, the employee’s experience, and overall fairness, as well as survey data discussed under “Benchmarking” above; (3) the fair value of the stock; (4) companyCompany performance; and (5) the individual employee’s performance. The Compensation Committee reviews prior awards to compare the multiple of base salary from the prior award to the current award. The Compensation Committee meets annually to determine long-term equity incentive awards, if any, for each named executive officer. Target long-term equity incentive awards were allocated at approximately 70% stock options and 30% long-term incentive restricted stock.

Stock Option Awards

In 2009 and 2010, the Compensation Committee approved the following stock option awards to the named executive officers.

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Based on the considerations indicated above, in 2010, the Compensation Committee reduced the number of shares underlying the stock option award for each named executive officer by approximately 22%, with the exception of Messrs. Phillips and Peña whose stock option awards were reduced by approximately 16% to better align their long-term equity incentive compensation with that of similarly situated officers at our peer companies based on the survey data discussed under “Benchmarking” above. Although the number of shares underlying the stock option award for each named executive officer was reduced, the aggregate grant date fair value of the stock option awards for the named executive officers increased in 2010 due to an increase in the Company’s stock price. The Compensation Committee felt that the increase in the fair market value of the 2010 equity incentive awards was appropriate, both in an effort to further align the named executive officers’ interests with the Company’s shareholders, and in recognition of the other components of compensation that were granted in 2009. Stock options are granted with an exercise price equal to the closing price of our common stock on the date of grant.

Long-Term Incentive Restricted Stock Awards

The 2010 long-term incentive restricted stock award is based on the Company’s performance in three metrics (EBITDA growth, EBITDA return on capital invested, and total shareholder return growth) relative to the performance of a peer group for the period beginning January 1, 2008 and ending December 31, 2010.

The peer group consisted of the following: Nabors Industries, Helmerich & Payne, Patterson-UTI Energy, Bronco Drilling Company, Union Drilling, Parker Drilling Company, Superior Energy Services, Key Energy Services, Basic Energy Services, and Complete Production Services. The companies in this peer group were selected because their business correlates most directly with ours and thus these companies provide an appropriate comparison for the performance metrics (as compared with our benchmarking peer companies that were selected based on shared industry and similar levels of market capitalization, enterprise value, assets and revenue and provide a more appropriate comparison for determining executive compensation).

The 2010 target long-term incentive restricted stock award opportunity for each named executive officer was as follows (expressed as the number of restricted stock units awarded):

After the three-year performance period, the Company’s performance in each of the three metrics was compared against the peer group companies, and a percentage for each of the three metrics was assigned based on the Company’s ranking among its peers:

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The Company achieved the following performance relative to the peer group companies over the three-year performance period:

The average of the three metric percentages was then multiplied by the target long-term incentive restricted stock award amount to determine the number of shares of restricted stock awarded. The resulting number of shares of restricted stock awarded for each of the named executive officers was as follows:

The shares of restricted stock awarded vest in three annual installments beginning in April 2011. At the present time, we have not paid or declared any dividends on our common stock. Should we declare dividends in the future, recipients of a long-term incentive restricted stock award would not receive dividends on any shares of restricted stock during the three-year performance period. However, during the three-year vesting period, recipients would receive dividends on the shares of restricted stock actually awarded based on achievement of the performance measures.

As of February 2010, the Compensation Committee allocated between 43% and 52% of each named executive officer’s total direct compensation to long-term equity incentive awards. The Compensation Committee has determined that these percentages allow us to provide a competitive base salary and annual cash incentive compensation while still motivating the named executive officers to make decisions that result in long-term shareholder value. The Compensation Committee allocated a higher percentage (52%) of Mr. Locke’s total direct compensation to long-term equity incentive awards because the Compensation Committee believes that his position uniquely allows him to influence the financial performance of the Company and, accordingly, his compensation should be more closely tied to the Company’s stock performance results. The Compensation Committee allocated approximately 43% to 48% of the other named executive officers’ targeted total direct compensation to long-term incentive awards.

The Compensation Committee approves, and recommends to the board of directors for approval, all grants of equity compensation to Company employees, including the named executive officers. During the fiscal year ended December 31, 2010, equity awards were made to approximately 45 employees, including the named executive officers, or about 2% of total employees. We do not have a program, plan or practice to time our long-term equity incentive awards in coordination with the release of material, non-public information. In the event that material non-public information becomes known to the Compensation Committee prior to granting long-term equity incentive awards, the Compensation Committee will take the existence of such information under advisement and make an assessment in its business judgment whether to delay the grant of the long-term equity incentive award in order to avoid any impropriety.

As of August 2008,After the Compensation Committee allocated between 22% and 69% of each of the2010 salary increase for one named executive officer’s total direct compensation to equity awards. The Compensation Committee has determined that these percentages allow us to provide a competitive base salary and annual incentive cash compensation while still motivating the named executive officers to make decisions that result in long-term shareholder value. The Compensation Committee allocated a higher percentage of Mr. Locke and the two division President’s total direct compensation to equity awards because the Compensation Committee believed their position uniquely allows them to influence the financial performance of the Company and, accordingly, their compensation should be more closely tied to the Company’s stock performance results.

The Compensation Committee approves, or recommends to the board of directors for approval, all grants of equity compensation to Company employees, including the named executive officers. During the fiscal year ended December 31, 2008, equity awards were made to approximately 118 employees, including the named executive officers, or about 4% of total employees.

After the 2008 salary increasesofficer took effect and the long-term equity incentive awards were made for the fiscal year ended December 31, 2008,2010, individual named executive officer total direct compensation ranged between the 27st25th and 76nd75th percentile of the survey data. On average

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Long-Term Cash Incentive Compensation

During the total direct compensation for2009 fiscal year, the Compensation Committee granted a long-term cash incentive award to each of our named executive officers falls just aboveunder our 2007 Incentive Plan. One component of the 2009 long-term cash incentive award was exclusively time-based; the other component was performance-based. Under the time-based component of the 2009 long-term cash incentive award, the named executive officers will receive cash payments on April 30, 2011 and April 30, 2012 depending on their continued employment with the Company. Under the performance-based component of the 2009 long-term cash incentive award, the named executive officers will receive a cash payment on April 30, 2011 and April 30, 2012, based on the Company’s performance over a two-year performance period relative to a peer group of companies and depending on the named executive officers’ continued employment with the Company. Because the 2009 long-term cash incentive award was granted during the 2009 fiscal year, the Company considers it part of 2009 compensation. The Company did not grant the named executive officers a long-term cash incentive award in 2010.

In general, for the time-based component of the 2009 long-term cash incentive award, if the participant remains employed with the Company through April 30, 2011, the participant will receive 50% of the time-based award amount on that date, and if the participant remains employed with the Company through April 30, 2012, the participant will receive the remaining 50% of the time-based award amount on that date. The time based-award amounts for each of the named executive officers are as follows:

For the performance-based component of the 2009 long-term cash incentive award, the Company’s performance in three metrics (EBITDA growth, EBITDA return on capital invested, and total shareholder return growth) was compared to a peer group for the period from January 1, 2009 to December 31, 2010. The peer group consisted of the following: Nabors Industries, Helmerich & Payne, Patterson-UTI Energy, Bronco Drilling Company, Union Drilling, Parker Drilling Company, Superior Energy Services, Key Energy Services, Basic Energy Services, and Complete Production Services. The companies in this peer group were selected because their business correlates most directly with ours and thus these companies provide an appropriate comparison for the performance metrics (as compared with our benchmarking peer companies that were selected based on shared industry and similar levels of market median.capitalization, enterprise value, assets and revenue and provide a more appropriate comparison for determining executive compensation).

The target performance-based award opportunity for each named executive officer was as follows:

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After the two-year performance period, the Company’s performance in each of the three metrics was compared against the peer group companies, and a percentage for each of the three metrics was assigned based on the Company’s ranking among its peers:

The Company achieved the following performance relative to the peer group companies over the two-year performance period:

The average of the three metric percentages was then multiplied by the target performance-based award opportunity to determine the final amount of the performance-based award. The resulting performance-based award amount for each of the named executive officers was as follows:

In general, if the participant remains employed with the Company through April 30, 2011, the participant will receive 50% of the performance-based award amount on that date, and if the participant remains employed with the Company through April 30, 2012, the participant will receive the remaining 50% of the performance-based award amount on that date.

Additional Information

Health, Welfare and Retirement Benefits

Besides being a common component of compensation, health, welfare and retirement benefits are designed to provide a safety net of protection against the financial catastrophes that can result from illness, disability or death, and to provide a reasonable level of retirement income based on years of service with us. These benefits help us to be competitive in attracting and retaining employees. Benefits help to keep employees focused on job performance without major distractions related to paying for health care, adequate savings for retirement and similar issues.

We offer a standard range of health and welfare benefits to substantially all U.S. employees, including the named executive officers. These benefits include medical, prescription drug and dental coverage, and life and accidental death and dismemberment insurance. In addition, short-term disability coverage and optional long-term disability insurance benefits areand optional short-term coverage is available to all salaried employees.

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We offer a defined contribution 401(k) plan to substantially all of our U.S. employees. The participants may contribute, on a pretax basis, any amount of their base salary and cash incentive compensation, up to a limit imposed under the Internal Revenue Code. During the fiscal year ended December 31, 2008,From January 2009 through March 2009, we made matching

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contributions, up to a limit imposed under the Internal Revenue Code, with respect to these employee pretax contributions equal to 50% of the contributions made by a participating employee of the first 6% of the employee’s compensation. We suspended Company matching contributions from March 2009 through March 2010 due to the unusually difficult financial environment. We reinstated Company matching contributions beginning on April 1, 2010. Under this matching scheme, employees become fully vested in employer contributions after five years of employment and are ratably vested prior to that time. The Summary Compensation Table reflects our contributions to the 401(k) Plan for each named executive officer.

Perquisites

We provide a limited number of perquisites to certain executive officers and key employees. Those perquisites primarily consist of car allowances, life insurance premiums and Petroleum Club dues. The life insurance policy pays the beneficiary an amount equal to the applicable named executive officer’s annual salary up to a maximum of $300,000. During 2010, we paid country club membership dues for one named executive officer. Effective December 31, 2010, the Compensation Committee adopted a policy to no longer provide country club memberships as a perquisite to our named executive officers. Because Mr. Phillips’ Employment Letter Agreement provided that our executive officers use in performing their duties.the Company would pay Mr. Phillips’ monthly dues at a golf club, the Compensation Committee agreed to provide Mr. Phillips a one-time, lump sum cash payment of $30,000 to partially mitigate the elimination of this benefit. The All Other Compensation column of the Summary Compensation Table shows the value of perquisites we provided to the named executive officers during the fiscal year ended December 31, 2010.

Stock Ownership Guidelines

In order to encourage the acquisition and retention of our common stock by our named executive officers to further align their economic interests with those of our shareholders and to focus our executives on the long-term sustained appreciation of our common stock, our compensation committee and our board of directors have adopted tiered guidelines requiring our current named executive officers to own a specified amount of our common stock equal to a specified multiple of their annual base salary. The ownership target is to be acquired no later than the December 31 following the fifth anniversary of the executive’s commencement of employment with the Company, or by December 31, 2013 for any executive employed as of May 17, 2008. The ownership target for the chief executive officer equals the value of three times his or her annual base salary. The ownership target for the other named executive officers equals two times such named executive officer’s annual base salary. For purposes of this calculation, unvested restricted stock and restricted stock units may be counted toward the applicable ownership requirement. As of March 31, 2011, Mr. Locke, Mr. Phillips and Mr. West have fully met their stock ownership requirements. Mr. Eustace and Mr. Peña have until December 31, 2013 to meet their ownership targets.

Compensation Considerations for Fiscal Year 20092011

DuringIn the lattersecond half of 2008 and into 2009, weakening global economic conditions negatively impacted the Company’s overall performance, including share performance. Recognizing the need to balance retention of executive officers with the realities of reduced share performance, in 2009,2010, the Compensation Committee decidedsolicited proposals for compensation consulting from our incumbent consultant, Stone Partners, as well as three other compensation consulting firms. The Committee selected Pearl Meyers Partners to work with for 2011 based on their experience with similarly situated companies within our industry, especially those companies with mixed drilling and production services offerings.

The Compensation Committee believes that stock option grants and restricted stock awards continue to constitute the best long-term award vehicles.vehicles and that certain elements of compensation should be based on Company performance. In addition,early 2010, the Committee decided not to begin makingaward performance-based long-term cash awards to the named executive officers and instead to award performance-based restricted stock units. For 2011, the performance-based restricted stock unit awards will have a performance period beginning January 1, 2011 and ending December 31, 2013. The awards will fully vest within 30 days of determination of the performance results.

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At its March 30, 2011 meeting, the Compensation Committee adopted a policy prohibiting the Company from entering into any future change in control arrangements with executive officers that provide for fiscal 2009. Ourexcise tax gross-up payments, unless such arrangement is approved by shareholders. Pursuant to the policy, any participant who enters the Key Executive Severance Plan after March 30, 2011 will not be entitled to any excise tax gross-up payments.

The Compensation Committee will continue to review our compensation programs and make appropriate modifications to discourage risky short-term behavior and reward consistent and longer-term performance that correlates with shareowner value.

Role of Executive Officers in Setting Compensation

The Chief Executive Officer provides input into the Compensation Committee’s meeting agendas, including background information regarding our strategic objectives, suggestions on annual performance targets and reports on his evaluations of the other officers. He makes compensation recommendations for the other officers with respect to base salary increases, annual cash incentives and annual equity incentives that are then reviewed by the Compensation Committee. The Chief Financial Officer evaluates the financial implications of any Compensation Committee action. However, all final decisions regarding the compensation of the named executive officers are made by the Compensation Committee.

The Compensation Committee meetings are attended by the Compensation Committee members and, as needed, by other directors, the Chief Executive Officer, the Chief Financial Officer, the Global Director of Human Resources and outside advisors, including our compensation consultant. The Compensation Committee regularly meets in executive session without any members of management present.

Compliance With Internal Revenue Code Section 162(m)

Section 162(m) of the Internal Revenue Code of 1986, as amended, limits the tax deduction for annual compensation paid to a public company’s Chief Executive Officer and its next three most highly compensated executive officers, excluding the Chief Financial Officer, to $1 million.$1,000,000. Qualified performance-based compensation is excluded from this deduction limitation if certain requirements are met. Stock option awards granted under our 2007 Incentive Plan and other equity compensation plans have been structured to qualify as performance-based. The Compensation Committee’s intent is to design compensation awards that will be deductible without limitation where doing so will further the purposes of our executive compensation program. The Compensation Committee will, however, take into consideration the various other factors described in this Compensation Discussion and Analysis, together with Section 162(m) considerations in making executive compensation decisions and could, in certain circumstances, approve and authorize compensation that is not fully tax deductible. All compensation paid to the named executive officers in 20082010 was deductible under Section 162(m), except for a portion of Mr. Locke’s 2008 non-equity incentive plan compensation..

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REPORT OF THE COMPENSATION COMMITTEE

The Compensation Committee has reviewed and discussed the Compensation Discussion and Analysis included in this proxy statement with the management of Pioneer Drilling Company, and, based on such review and discussions, the Compensation Committee recommended to the board of directors of Pioneer Drilling Company that the Compensation Discussion and Analysis be included in this proxy statement.

The information above in the Report of the Compensation Committee shall not be deemed to be “soliciting material” or to be “filed” with the SEC or subject to Regulation 14A or 14C or to the liabilities of Section 18 of the Exchange Act, nor shall it be deemed to be incorporated by reference into any filing under the Securities Act of 1933 (the “Securities Act”) or the Exchange Act, except to the extent that the Company specifically requests that the information be treated as soliciting material or specifically incorporates the information by reference.

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EXECUTIVE COMPENSATION

2010 Summary Compensation Table

The following table presents information concerning compensation for all services rendered to us in all capacities during the fiscal yearyears ended December 31, 2008, the nine month fiscal year ended December 31, 2007,2010, 2009, and the fiscal year ended March 31, 2007,2008, by each individual who served as our principal executive officer or principal financial officer during these fiscal years and our other executive officers (collectively, the “named executive officers”).