Exhibit 99.1
Contacts: | Bill Hibbetts, Senior VP & CFO | |
| Pioneer Drilling Company | |
| 210-828-7689 | |
|
| |
| Ken Dennard / ksdennard@drg-e.com | |
| Lisa Elliott / lelliott@drg-e.com | |
| DRG&E / 713-529-6600 |
FOR IMMEDIATE RELEASE
PIONEER DRILLING REPORTS FISCAL FOURTH
QUARTER AND YEAR-END 2005 RESULTS
Fourth quarter revenues were up 66% to $55.4 million
Fourth quarter earnings per diluted share grew 600% to $0.14
MAY 26, 2005 – SAN ANTONIO, TEXAS – Pioneer Drilling Company (AMEX: PDC) today reported results for the fourth quarter and twelve months ended March 31, 2005.
Revenues for the fourth quarter of fiscal 2005 grew to $55.4 million, compared to revenues of $33.4 million in the fourth quarter of fiscal 2004. This 66% increase in revenues was due to an improvement in rig revenue rates, a 62% increase in the average number of rigs in Pioneer’s fleet and a 6% increase in Pioneer’s rig utilization rate. Net earnings in the fourth quarter of fiscal 2005 were $5.5 million, or $0.14 per diluted share, versus net earnings of $409,000, or $0.02 per share, during the fourth quarter of fiscal 2004.
Revenue days during the fourth quarter of fiscal 2005 increased 69% to 4,207, compared to 2,496 revenue days for the fourth quarter of fiscal 2004. Revenue days by type of contract in the fourth quarter of fiscal 2005 were 3,005 for daywork contracts, 804 for turnkey contracts and 398 for footage contracts. Pioneer’s rig utilization rate increased 6% for the fiscal fourth quarter to 97%, up from 91% in the corresponding period last year.
Wm. Stacy Locke, Pioneer’s President and Chief Executive Officer, stated, “As forecasted, we continued to show improvement in our operating margin for our fiscal fourth quarter; albeit, at a slower rate of increase, as compared to the last quarter. Average dayrates for daywork contracts increased approximately $1,200 per day, or 12%, to approximately $11,450, up from average dayrates of approximately $10,250 for the quarter ended December 31, 2004. However, our overall improvement in operating margin was negatively impacted by the addition of shallower rigs operating at lower dayrates, footage contracts generating lower average operating margins and the continued reduction in higher-margin turnkey work. Turnkey
contracts comprised 19% of our revenue days in our fiscal fourth quarter, down from 29% for the quarter ended December 31, 2004. Conversely, footage contracts increased to 9% of our revenue days, up from 2% for the quarter ended December 31, 2004. This increase in footage revenue days was the result of the five rigs purchased from Allen Drilling in December 2004, which were on footage contracts throughout our fourth quarter and generated operating margins below that of our daywork and turnkey contracts.
“As we progress into fiscal 2006, we anticipate that average dayrates will increase over 10% in each of the next two fiscal quarters and that operating margins from daywork, turnkey and footage contracts will increase as well. Pioneer plans to continue adding quality equipment to seize upon these improving market conditions. As previously announced, we are building two 14,000 foot capacity, 1000 hp, SCR rigs to add to our Vernal, Utah operations. The first of these rigs is scheduled to begin work in less than 30 days and the second in early August 2005. Both rigs will operate under separate two-year contracts with a large, independent oil and gas company. In addition, we are planning to complete a 1500 hp SCR rig by September 2005 and are evaluating the addition of up to four more 1000 hp and 1200 hp rigs by the end of fiscal 2006. The decision to build the additional five rigs is subject to obtaining satisfactory contracts with minimum terms of one year. We anticipate these rigs will range in cost from $6.8 million to $7.4 million each.”
Revenues for the fiscal year ended March 31, 2005 were $185.2 million, compared to revenues of $107.9 million for fiscal 2004. Net earnings during fiscal 2005 were $10.8 million, or $0.30 per diluted share, compared to a net loss of $1.8 million, or $0.08 loss per share, during fiscal 2004.
Revenue days were 13,894 days during fiscal 2005, compared to 8,764 days for fiscal 2004. Pioneer’s rig utilization rate for fiscal 2005 was 96%, up from 88% for fiscal 2004.
Pioneer’s management team will be holding a conference call on Thursday, May 26, 2005, at 11:00 a.m., Eastern time (10:00 a.m., Central) to discuss these results. To participate in the call, dial (303) 262-2138 at least 10 minutes before the conference call begins and ask for the Pioneer Drilling conference call. A replay of the call will be available approximately two hours after the call ends and will be accessible until June 2, 2005. To access the replay, dial (303) 590-3000 and enter the pass code 11030919#.
Investors, analysts and the general public will also have the opportunity to listen to the conference call over the Internet by accessing Pioneer Drilling’s Web site at http://www.pioneerdrlg.com. To listen to the live call on the Web, please visit Pioneer Drilling’s Web site at least 15 minutes early to register, download and install any necessary audio software. For those who cannot listen to the live Webcast, an archive will be available shortly after the call. For more information, please contact Karen Roan at DRG&E at (713) 529-6600 or e-mail kcroan@drg-e.com.
Pioneer Drilling Company provides land contract drilling services to independent and major oil and gas operators drilling wells in North, East and South Texas, Western Oklahoma and in the Rocky Mountain region. Pioneer’s fleet consists of 50 land drilling rigs that drill in depth ranges between 6,000 and18,000 feet and will increase to 52 rigs by August 2005.
This press release contains various forward-looking statements and information that are based on management’s belief, as well as assumptions made by and information currently available to management. Forward-looking information includes statements regarding the anticipated continuing increases in average dayrates and operating margins, the gradual decline in turnkey contract revenue days as dayrates improve, our plans to add more drilling rigs to our fleet, the anticipated cost of those rigs and our success in obtaining satisfactory contracts in order to add additional rigs. Although the management of Pioneer Drilling believes that the expectations reflected in such forward-looking statements are reasonable, Pioneer Drilling can give no assurance that those expectations will prove to have been correct. Such statements are subject to various risks, uncertainties and assumptions, including, among other matters, risks and uncertainties relating to turnkey drilling contracts in progress. Should one or more of those risks materialize, or should underlying assumptions prove incorrect, actual results may vary materially from those expected. These risks, as well as others, are discussed in greater detail in Pioneer’s filings with the Securities and Exchange Commission (“the SEC”), including the Company’s annual report on Form 10-K for the fiscal year ended March 31, 2004 and subsequent filings with the SEC.
- Tables to Follow -
PIONEER DRILLING COMPANY AND SUBSIDIARIES
Condensed Consolidated Statements of Operations
(in thousands, except per share data)
|
| Three Months Ended |
| Year Ended |
| |||||||||||
|
| 3/31/05 |
| 3/31/04 |
| 12/31/04 |
| 3/31/05 |
| 3/31/04 |
| |||||
|
|
|
|
|
|
|
|
|
|
|
| |||||
Contract drilling revenues |
| $ | 55,357 |
| $ | 33,367 |
| $ | 46,388 |
| $ | 185,247 |
| $ | 107,876 |
|
|
|
|
|
|
|
|
|
|
|
|
| |||||
Costs and Expenses: |
|
|
|
|
|
|
|
|
|
|
| |||||
Contract drilling |
| 37,681 |
| 26,747 |
| 32,357 |
| 138,483 |
| 88,504 |
| |||||
Depreciation |
| 6,967 |
| 4,490 |
| 5,770 |
| 23,091 |
| 16,161 |
| |||||
General and administrative |
| 1,746 |
| 746 |
| 1,215 |
| 4,657 |
| 2,773 |
| |||||
Bad debt expense |
| (100 | ) | — |
| 342 |
| 242 |
| — |
| |||||
Total operating costs |
| 46,294 |
| 31,983 |
| 39,684 |
| 166,473 |
| 107,438 |
| |||||
|
|
|
|
|
|
|
|
|
|
|
| |||||
Operating income (loss) |
| 9,063 |
| 1,384 |
| 6,704 |
| 18,774 |
| 438 |
| |||||
|
|
|
|
|
|
|
|
|
|
|
| |||||
Other income (expense): |
|
|
|
|
|
|
|
|
|
|
| |||||
Interest expense |
| (447 | ) | (691 | ) | (159 | ) | (1,722 | ) | (2,808 | ) | |||||
Loss on early extinguishment of debt |
| — |
| — |
| — |
| (101 | ) | — |
| |||||
Interest income |
| 55 |
| 15 |
| 55 |
| 173 |
| 102 |
| |||||
Other |
| 15 |
| (13 | ) | 7 |
| 37 |
| 52 |
| |||||
Total other |
| (377 | ) | (689 | ) | (97 | ) | (1,613 | ) | (2,654 | ) | |||||
|
|
|
|
|
|
|
|
|
|
|
| |||||
Income (loss) before taxes |
| 8,686 |
| 695 |
| 6,607 |
| 17,161 |
| (2,216 | ) | |||||
|
|
|
|
|
|
|
|
|
|
|
| |||||
Income tax benefit (expense) |
| (3,193 | ) | (286 | ) | (2,428 | ) | (6,349 | ) | 426 |
| |||||
|
|
|
|
|
|
|
|
|
|
|
| |||||
Net earnings (loss) |
| $ | 5,493 |
| $ | 409 |
| $ | 4,179 |
| $ | 10,812 |
| $ | (1,790 | ) |
|
|
|
|
|
|
|
|
|
|
|
| |||||
Loss per share: |
|
|
|
|
|
|
|
|
|
|
| |||||
Basic |
| $ | 0.14 |
| $ | 0.02 |
| $ | 0.11 |
| $ | 0.31 |
| $ | (0.08 | ) |
Diluted |
| $ | 0.14 |
| $ | 0.02 |
| $ | 0.11 |
| $ | 0.30 |
| $ | (0.08 | ) |
|
|
|
|
|
|
|
|
|
|
|
| |||||
Weighted average number of shares outstanding: |
|
|
|
|
|
|
|
|
|
|
| |||||
Basic |
| 39,142 |
| 24,404 |
| 38,428 |
| 34,544 |
| 22,586 |
| |||||
Diluted |
| 40,029 |
| 32,189 |
| 39,535 |
| 37,578 |
| 22,586 |
|
PIONEER DRILLING COMPANY AND SUBSIDIARIES
Operating Statistics
(in thousands, except averages per day)
(Unaudited)
|
| Three Months Ended |
| Year Ended |
| |||||||||||
|
| 3/31/05 |
| 3/31/04 |
| 12/31/04 |
| 3/31/05 |
| 3/31/04 |
| |||||
|
|
|
|
|
|
|
|
|
|
|
| |||||
Average number of rigs |
| 49.0 |
| 30.3 |
| 39.7 |
| 40.1 |
| 27.3 |
| |||||
Utilization rate |
| 97 | % | 91 | % | 98 | % | 96 | % | 88 | % | |||||
|
|
|
|
|
|
|
|
|
|
|
| |||||
Revenue days by contract: |
|
|
|
|
|
|
|
|
|
|
| |||||
Daywork contracts |
| 3,005 |
| 1,554 |
| 2,421 |
| 8,685 |
| 5,626 |
| |||||
Turnkey contracts |
| 804 |
| 914 |
| 1,024 |
| 4,471 |
| 2,827 |
| |||||
Footage contracts |
| 398 |
| 28 |
| 79 |
| 738 |
| 311 |
| |||||
Total |
| 4,207 |
| 2,496 |
| 3,524 |
| 13,894 |
| 8,764 |
| |||||
|
|
|
|
|
|
|
|
|
|
|
| |||||
Revenues by contract: |
|
|
|
|
|
|
|
|
|
|
| |||||
Daywork contracts |
| $ | 36,720 |
| $ | 14,018 |
| $ | 26,824 |
| $ | 95,997 |
| $ | 50,145 |
|
Turnkey contracts |
| 13,976 |
| 19,024 |
| 18,544 |
| 80,211 |
| 54,235 |
| |||||
Footage contracts |
| 4,661 |
| 325 |
| 1,020 |
| 9,038 |
| 3,496 |
| |||||
Total |
| $ | 55,357 |
| $ | 33,367 |
| $ | 46,388 |
| $ | 185,246 |
| $ | 107,876 |
|
|
|
|
|
|
|
|
|
|
|
|
| |||||
Drilling costs by contract: |
|
|
|
|
|
|
|
|
|
|
| |||||
Daywork contracts |
| $ | 24,015 |
| $ | 12,209 |
| $ | 18,146 |
| $ | 68,416 |
| $ | 42,904 |
|
Turnkey contracts |
| 10,268 |
| 14,253 |
| 13,582 |
| 63,421 |
| 42,761 |
| |||||
Footage contracts |
| 3,398 |
| 285 |
| 628 |
| 6,646 |
| 2,839 |
| |||||
Total |
| $ | 37,681 |
| $ | 26,747 |
| $ | 32,356 |
| $ | 138,483 |
| $ | 88,504 |
|
|
|
|
|
|
|
|
|
|
|
|
| |||||
Average revenues per day: |
|
|
|
|
|
|
|
|
|
|
| |||||
Daywork contracts |
| $ | 12,220 |
| $ | 9,021 |
| $ | 11,080 |
| $ | 11,053 |
| $ | 8,913 |
|
Turnkey contracts |
| 17,383 |
| 20,814 |
| 18,109 |
| 17,940 |
| 19,185 |
| |||||
Footage contracts |
| 11,711 |
| 11,607 |
| 12,911 |
| 12,247 |
| 11,241 |
| |||||
Total |
| $ | 13,158 |
| $ | 13,368 |
| $ | 13,163 |
| $ | 13,333 |
| $ | 12,309 |
|
|
|
|
|
|
|
|
|
|
|
|
| |||||
Average costs per day: |
|
|
|
|
|
|
|
|
|
|
| |||||
Daywork contracts |
| $ | 7,992 |
| $ | 7,856 |
| $ | 7,495 |
| $ | 7,877 |
| $ | 7,626 |
|
Turnkey contracts |
| 12,771 |
| 15,594 |
| 13,264 |
| 14,185 |
| 15,126 |
| |||||
Footage contracts |
| 8,538 |
| 10,179 |
| 7,949 |
| 9,005 |
| 9,129 |
| |||||
Total |
| $ | 8,957 |
| $ | 10,716 |
| $ | 9,182 |
| $ | 9,967 |
| $ | 10,099 |
|
|
|
|
|
|
|
|
|
|
|
|
| |||||
Capital expenditures: |
|
|
|
|
|
|
|
|
|
|
| |||||
Rig additions |
| $ | 10,072 |
| $ | 15,791 |
| $ | 39,027 |
| $ | 53,341 |
| $ | 34,961 |
|
Other |
| 7,977 |
| 3,995 |
| 5,972 |
| 27,047 |
| 9,884 |
| |||||
|
| $ | 18,049 |
| $ | 19,786 |
| $ | 44,999 |
| $ | 80,388 |
| $ | 44,845 |
|
PIONEER DRILLING COMPANY AND SUBSIDIARIES
Condensed Consolidated Balance Sheets
|
| 3/31/2005 |
| 3/31/2004 |
| ||
Assets |
|
|
|
|
| ||
Current assets: |
|
|
|
|
| ||
Cash and cash equivalents |
| $ | 69,673 |
| $ | 1,816 |
|
Marketable securities |
| 1,000 |
| 4,550 |
| ||
Receivables, net |
| 26,108 |
| 10,902 |
| ||
Contract drilling in progress |
| 5,365 |
| 9,131 |
| ||
Current deferred income taxes |
| 570 |
| 285 |
| ||
Prepaid expenses |
| 1,877 |
| 1,336 |
| ||
Total current assets |
| 104,593 |
| 28,020 |
| ||
|
|
|
|
|
| ||
Net property and equipment |
| 170,566 |
| 115,342 |
| ||
Other assets |
| 850 |
| 369 |
| ||
Total assets |
| $ | 276,009 |
| $ | 143,731 |
|
|
|
|
|
|
| ||
Liabilities and Equity |
|
|
|
|
| ||
Current liabilities: |
|
|
|
|
| ||
Notes payable |
| $ | 682 |
| $ | 558 |
|
Current long-term debt |
| 4,733 |
| 3,865 |
| ||
Accounts payable |
| 15,622 |
| 13,271 |
| ||
Federal income taxes payable |
| 196 |
| — |
| ||
Prepaid drilling contracts |
| 173 |
|
|
| ||
Accrued expenses |
| 6,860 |
| 4,298 |
| ||
Total current liabilities |
| 28,266 |
| 21,992 |
| ||
Long-term debt |
| 13,445 |
| 44,892 |
| ||
Other non-current liability |
| 400 |
| — |
| ||
Deferred taxes |
| 12,283 |
| 6,011 |
| ||
Total liabilities |
| 54,394 |
| 72,895 |
| ||
Total shareholders’ equity |
| 221,615 |
| 70,836 |
| ||
|
| $ | 276,009 |
| $ | 143,731 |
|
# # #