Bronco Drilling 8-K Bronco Drilling Company, Inc. Announces First Quarter Results

Exhibit 99.1

Bronco Drilling Company, Inc. Announces First Quarter Results

OKLAHOMA CITY, May 9, 2008 (BUSINESS WIRE)—Bronco Drilling Company, Inc.,  (Nasdaq/GM:BRNC), announced today financial and operational results for the three months ended March 31, 2008.

Consolidated Results

Revenues for the first quarter of 2008 were $62.3 million compared to $69.0 million for the fourth quarter of 2007 and $78.9 million for the first quarter of 2007.  Net income for the first quarter of 2008 was $8.1 million compared to $6.4 million for the previous quarter and $11.4 million for the first quarter of 2007. The Company generated EBITDA of $25.9 million for the first quarter of 2008 compared to $24.6 million for the previous quarter and $31.0 million for the first quarter of 2007. The Company’s fully diluted earnings per share for the quarter ended March 31, 2008, were $0.31.  This compares to fully diluted earnings per share of $0.25 for the previous quarter and $0.44 for the first quarter of 2007.  Results for the first quarter of 2008 include a pre-tax gain of $4.7 million related to the sale and or contribution of rigs to Challenger Limited.

Land Drilling

Average operating land rigs for the first quarter of 2008 were 45 compared to 48 for the previous quarter and 51 for the first quarter of 2007.  Revenue days for the quarter decreased to 2,848 from 3,250 for the previous quarter and from 3,631 for the first quarter of 2007.  Utilization for the first quarter of 2008 was 69% compared to 73% for the previous quarter and 79% for the first quarter of 2007.  Average daily cash margins for our land drilling fleet for the quarter ended March 31, 2008, were $7,333 compared to $8,747 for the previous quarter and $9,282 for the first quarter of 2007.  Margins in the first quarter were adversely impacted due to maintaining crews on idle or under-utilized rigs.

Well Servicing

Average operating workover rigs for the first quarter of 2008 were 48 compared to 42 for the previous quarter and 24 for the first quarter of 2007.  Revenue hours for the quarter increased to 23,865 from 20,089 for the previous quarter and from 12,047 for the first quarter of 2007.  Utilization for the first quarter of 2008 was 77% compared to 75% for the previous quarter and 85% for the first quarter of 2007.  Average hourly cash margins for our well servicing fleet for the quarter ended March 31, 2008, were $137 compared to $137 for the previous quarter and $146 for the first quarter of 2007.  The company currently owns 58 workover rigs, 53 of which are operating with the remaining five under construction.

Challenger

Three of the rigs contributed or sold to Challenger are currently rigging up in Libya.  Five of the rigs are in transit, and the remaining two will ship at the end of May.  We expect all of the rigs to be operating by early third quarter.  Challenger is currently trying to secure a debt facility to meet short-term capital needs including those related to start-up of the Bronco rigs and to mitigate downtime that has plagued the company's operations due to past underinvestment in adequate rig supplies and spare equipment.

Utilization

During January, the company bid on an international tender utilizing some of its smaller, mechanical rigs.  In anticipation of a potential successful bid, the company curtailed its marketing efforts on these rigs. The company could not attempt to contract the rigs in the interim between submission of the bid and the tender award due to timing conflicts which created a gap in activity.  The company intends to continue to bid on international tenders and has earmarked its smaller, mechanical rigs as those most likely to be deployed abroad.  As was the case in the first quarter, this strategy can have a negative short-term effect on utilization.  We continue to believe this to be the most advisable course knowing that these rigs may work domestically in an environment characterized by high commodity prices, strong demand for rigs and moderate supply.  However, these rigs can be difficult to market in a more challenging environment. We believe deploying these rigs internationally on multi-year contracts, if achievable, is a superior long-term course and is worth any mild, short-term ramifications.

Recent Events and Outlook

Subsequent to the end of the first quarter, the company signed 3 term contracts to move rigs to the Bakken Shale and anticipates signing a fourth in the coming weeks.  The Bakken represents a new operating region for the company. One of the aforementioned rigs will be converted from a mechanical rig to electric in the company's rig refurbishment yard during the second quarter. The company’s utilization for its land drilling fleet was 78% in April.  The company anticipates a continued improvement in utilization and dayrates going forward as the appreciation in commodity prices drives robust incremental rig demand.

About Bronco Drilling

Bronco Drilling Company, Inc., a publicly held company headquartered in Edmond, Oklahoma, is a provider of contract land drilling services and workover services to oil and natural gas exploration and production companies. Bronco's common stock is quoted on The Nasdaq Global Market under the symbol “BRNC.” For more information about Bronco Drilling Company, Inc., visit http://www.broncodrill.com.

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Bronco Drilling Company, Inc. and Subsidiaries
CONSOLIDATED BALANCE SHEETS
(Amounts in thousands, except share par value)
				March 31,		December 31,
				2008		2007
ASSETS				(Unaudited)
CURRENT ASSETS
	Cash and cash equivalents			$	3,034	$	5,721
	Receivables
		Trade and other, net of allowance for doubtful accounts of
		$1,639 and $1,834 in 2008 and 2007, respectively			56,114		61,499
	Contract drilling in progress				2,638		2,128
	Income tax receivable				1,191		1,191
	Current deferred income taxes				695		775
	Current maturities of note receivable				3,888		-
	Prepaid expenses				1,502		705
			Total current assets		69,062		72,019
PROPERTY AND EQUIPMENT - AT COST
	Drilling rigs and related equipment				452,887		510,962
	Transportation, office and other equipment				40,550		41,942
					493,437		552,904
		Less accumulated depreciation			89,023		86,274
					404,414		466,630
OTHER ASSETS
	Goodwill				23,909		23,908
	Note receivable, less current maturities				5,855		-
	Investments				76,820		-
	Restricted cash and deposit				2,802		2,745
	Intangibles, net, and other				2,990		3,303
					112,376		29,956
				$	585,852	$	568,605
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES
	Accounts payable			$	18,964	$	16,715
	Accrued liabilities				17,215		19,280
	Current maturities of long-term debt				66,078		1,256
			Total current liabilities		102,257		37,251
LONG-TERM DEBT,  less current maturities					5,333		66,862
DEFERRED INCOME TAXES					72,535		68,063
COMMITMENTS AND CONTINGENCIES (Note 6)
STOCKHOLDERS' EQUITY
	Common stock, $.01 par value, 100,000 shares authorized;
	26,270 and 26,031 shares issued and outstanding
	at March 31, 2008 and December 31, 2007				263		262
	Additional paid-in capital				299,344		298,195
	Retained earnings				106,120		97,972
		Total stockholders' equity			405,727		396,429
				$	585,852	$	568,605

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Bronco Drilling Company, Inc. and Subsidiaries
CONSOLIDATED STATEMENTS OF OPERATIONS
(Amounts in thousands, except per share amounts)
			Three Months Ended March 31,
			2008			2007
			(Unaudited)
REVENUES
	Contract drilling revenues, including 0% and 4%
	to related parties		$	54,073		$	74,501
	Well service			8,223			4,403
	Gain on Challenger transactions			4,707			-
				67,003			78,904
EXPENSES
	Contract drilling			33,190			40,800
	Well service			4,943			2,642
	Depreciation and amortization			11,925			11,205
	General and administrative			5,739			4,693
				55,797			59,340
		Income from operations		11,206			19,564
OTHER INCOME (EXPENSE)
	Interest expense			(1,226	)		(1,268	)
	Interest income			734			48
	Equity in income of investment			1,845			-
	Other			141			143
				1,494			(1,077	)
		Income before income taxes		12,700			18,487
Income tax expense				4,552			7,101
		NET INCOME	$	8,148		$	11,386
Income per common share-Basic			$	0.31		$	0.44
Income per common share-Diluted			$	0.31		$	0.44
Weighted average number of shares outstanding-Basic				26,265			25,907
Weighted average number of shares outstanding-Diluted				26,287			25,909

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Non-GAAP Financial Measures

This press release includes a presentation of average daily cash margin for our land drilling fleet, average hourly cash margin for our well servicing fleet and EBITDA which are not financial measures recognized under generally accepted accounting principles, or GAAP.  Average daily cash margin is a non-GAAP financial measure equal to net income, the most directly comparable GAAP financial measure, minus well service revenue, plus well service expense, income tax expense, other expense, general and administrative expense and depreciation and amortization, and divided by revenue days for the period.  Average hourly cash margin is a non-GAAP financial measure equal to net income, the most directly comparable GAAP financial measure, minus contract drilling revenue, plus contract drilling expense, income tax expense, other expense, general and administrative expense and depreciation and amortization, and divided by revenue hours for the period.  EBITDA is a non-GAAP financial measure equal to net income, the most directly comparable GAAP financial measure, plus interest expense, income tax expense and depreciation and amortization. We have presented average daily cash margin, average hourly cash margin and EBITDA because we use these metrics as an integral part of our internal reporting to measure our performance and to evaluate the performance of our senior management. We consider these metrics to be important indicators of the operational strength of our business. A limitation of these metrics, however, is that they do not reflect the periodic costs of certain capitalized tangible and intangible assets used in generating revenues in our business. Management evaluates the costs of such tangible and intangible assets and the impact of related impairments through other financial measures, such as capital expenditures, investment spending and return on capital. Therefore, we believe that average daily cash margin, average hourly cash margin and EBITDA provide useful information to our investors regarding our performance and overall results of operations. Neither average daily cash margin, average hourly cash margin nor EBITDA is intended to be a performance measure that should be regarded as an alternative to, or more meaningful than, either net income as an indicator of operating performance or to cash flows from operating activities as a measure of liquidity. In addition, none of these metrics is intended to represent funds available for dividends, reinvestment or other discretionary uses, and should not be considered in isolation or as a substitute for measures of performance prepared in accordance with GAAP. These non-GAAP financial measures may not be comparable to similarly titled measures presented by other companies, and may not be identical to corresponding measures used in our various agreements.

The following presents a reconciliation of average daily cash margin and EBITDA to net income, the most directly comparable GAAP financial measure (in thousands, except revenue days and average daily cash margin):

	Three Months Ended						Three Months Ended
	March 31,						December 31,
	2008			2007			2007
	(Unaudited)						(Unaudited)
Reconciliation of average daily
cash margin to net income:
Net income	$	8,148		$	11,386		$	6,424
Well service revenue		(8,223	)		(4,403	)		(7,189	)
Well service expense		4,943			2,642			4,447
Income tax expense		4,552			7,101			3,566
Other expense		(6,201	)		1,077			1,011
General and administrative		5,739			4,693			7,247
Depreciation and amortization		11,925			11,205			12,923
Drilling margin		20,883			33,701			28,429
Revenue days		2,848			3,631			3,250
Average daily cash margin	$	7,333		$	9,282		$	8,747

	Three Months Ended						Three Months Ended
	March 31,						December 31,
	2008			2007			2007
	(Unaudited)						(Unaudited)
Reconciliation of average hourly
cash margin to net income:
Net income	$	8,148		$	11,386		$	6,424
Contract drilling revenue		(54,073	)		(74,501	)		(61,777	)
Contract drilling expense		33,190			40,800			33,349
Income tax expense		4,552			7,101			3,566
Other expense		(6,201	)		1,077			1,011
General and administrative		5,739			4,693			7,247
Depreciation and amortization		11,925			11,205			12,923
Well service margin		3,280			1,761			2,743
Operating hours		23,865			12,047			20,089
Average hourly cash margin	$	137		$	146		$	137

	Three Months Ended				Three Months Ended
	March 31,				December 31,
	2008		2007		2007
	(Unaudited)				(Unaudited)
Calculation of EBITDA:
Net income	$	8,148	$	11,386	$	6,424
Interest expense		1,226		1,268		1,690
Income tax expense		4,552		7,101		3,566
Depreciation and amortization		11,925		11,205		12,923
EBITDA	$	25,851	$	30,960	$	24,603

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Important Information

On January 23, 2008, Bronco Drilling Company, Inc. entered into a merger agreement with Allis-Chalmers Energy Inc. (“Allis-Chalmers”), providing for the acquisition of Bronco by Allis-Chalmers.  In connection with the proposed merger, Allis-Chalmers filed a registration statement on Form S-4 (Registration No. 333-149326) with the Securities and Exchange Commission (the “SEC”) on February 20, 2008, and filed an amendment to such registration statement on Form S-4 with the SEC on March 27, 2008, which registration statement contains a joint proxy statement/prospectus of both companies.  Allis-Chalmers and Bronco may file other relevant documents concerning the proposed merger, including any amendments to such registration statement.  INVESTORS ARE URGED TO READ THE JOINT PROXY STATEMENT/PROSPECTUS AND ANY OTHER RELEVANT DOCUMENTS FILED WITH THE SEC, BECAUSE THEY CONTAIN IMPORTANT INFORMATION REGARDING THE MERGER.  Investors and security holders may obtain a free copy of the joint proxy statement/prospectus and the other documents free of charge at the website maintained by the SEC at www.sec.gov.

The documents filed with the SEC by Allis-Chalmers may be obtained free of charge from Allis-Chalmers’ website at www.alchenergy.com or by calling Allis-Chalmers’ Investor Relations department at (713) 369-0550.

The documents filed with the SEC by Bronco may be obtained free of charge from Bronco’s website at www.broncodrill.com or by calling Bronco’s Investor Relations department at (405) 242-4444.

Investors and security holders are urged to read the joint proxy statement/prospectus and the other relevant materials before making any voting or investment decision with respect to the proposed merger.

Allis-Chalmers and Bronco and their respective directors and executive officers may be deemed to be participants in the solicitation of proxies from the respective stockholders of each company in connection with the merger.  Information about the directors and executive officers of Allis-Chalmers and their ownership of Allis-Chalmers common stock is set forth in its proxy statement filed with the SEC on April 30, 2007.  Information about the directors and executive officers of Bronco and their ownership of Bronco common stock is set forth in its proxy statement filed with the SEC on April 30, 2007.  Investors may obtain additional information regarding the interests of such participants by reading the joint proxy statement/prospectus for the merger.

THIS PRESS RELEASE IS NOT AN OFFER TO SELL THE SECURITIES OF ALLIS-CHALMERS AND IT IS NOT SOLICITING AN OFFER TO BUY THESE SECURITIES.

Cautionary Note Regarding Forward-Looking Statements

The information in this press release contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended.  These forward-looking statements include, but are not limited to, comments pertaining to anticipated continued improvement in utilization and dayrates, and anticipated international operations.  Such statements are subject to risks, uncertainties and assumptions, including, but not limited to, commodity price fluctuations, barriers to entry in international markets, operating hazards and other factors described in Bronco Drilling Company, Inc’s. Annual Report on Form 10-K filed with the SEC on March 8, 2007 and other filings with the SEC, which are available free of charge on the SEC’s website at www.sec.gov.  Bronco cautions you that forward-looking statements are not guarantees of future performance and that actual results or developments may differ materially from those projected or implied in these statements.

Contact:                 ��    

Bob Jarvis

Investor Relations

Bronco Drilling Company

(405) 242-4444 EXT: 102

bjarvis@broncodrill.com

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