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Pioneer to Acquire WEDGE Well Services, WEDGE Wireline, and WEDGE Fishing & Rental Services
Company schedules conference call for Monday, February 4, 2008 at 11:00 a.m. Eastern
SAN ANTONIO, Feb. 1 /PRNewswire-FirstCall/ -- Pioneer Drilling Company (Amex: PDC) ('Pioneer') announced today that it has entered into a definitive purchase agreement to acquire WEDGE Well Services, L.L.C., WEDGE Wireline, Inc. and WEDGE Fishing and Rental Services, L.L.C. (the 'Wedge Companies') from affiliates of WEDGE Group Incorporated for $303 million in cash, subject to customary adjustments. The Wedge Companies provide oil and gas well workover, wireline, and fishing and rental services for energy producers in the United States. The closing of the transaction, which is expected before the end of first quarter of 2008, is subject to obtaining certain regulatory approvals, Pioneer's receipt of financing for the acquisition and other customary closing conditions. The acquisition is expected to be significantly accretive to calendar year 2008 earnings and cash flow per share.
Wm. Stacy Locke, Pioneer's President and Chief Executive Officer, stated, 'This transaction further transforms Pioneer from a pure-play U.S. land driller into a multi-national energy services provider. Together with our recent expansion into the international land drilling market, this acquisition substantially advances Pioneer's goal of building a best-in-class energy services company with multiple geographic and product platforms. The Wedge Companies' growth strategy mirrors Pioneer's in that both employ modern fleets that deliver enhanced value to their customers. Further, the combination positions Pioneer to extend its customer base and capture a larger share of E&P spending by offering diversified services required through the life of the well. The Wedge Companies have an outstanding management team, as well as seasoned operations and support staff, which, when combined with Pioneer's, will produce a top-notch team.'
The various enhancements that the Wedge Companies will bring to Pioneer include:
-- New platforms for growth through domestic and international expansion
as well as the opportunity to add other complementary
production-related services;
-- Premium, high quality assets, including 60 workover rigs,
predominately 550 horsepower class, and 45 wireline units with an
average age of 1.2 years and 2.8 years, respectively, providing a
stable foundation for Pioneer's entry into the production services
market;
-- A natural, overlapping market presence in Pioneer's key operating
regions that creates significant opportunities for cross-selling of
services;
-- Enhanced exposure to the stable, less cyclical production phase of the
well life; and
-- A seasoned management team, each with over 25 years of industry
experience, which has a proven track record of managing growth.
'Pioneer looks forward to welcoming the Wedge Companies' management team, employees and customers to the Pioneer family,' added Mr. Locke. 'Joe Eustace, President of the Wedge Companies, and his management team have executed their growth strategy flawlessly. Together, we look forward to carrying out our mission to become a premier energy services provider. Not only will the combined companies' young fleet operate safely and efficiently, but will allow us to attract and retain the best operational talent in the industry. In so doing, we will be well positioned from a competitive standpoint to meet and exceed our customers' expectations and grow our market share accordingly. We are thrilled to deliver a broader suite of state-of-the-art services to our current and future customers.'
Mr. Eustace will join Pioneer as President of the new Energy Services Division. He and his management team, which includes Joe Freeman, Vice President Operations - Well Services, Mark Gjovig, Vice President Operations - Wireline Services, and Randy Watson, Vice President Operations - Fishing & Rental Services, each bring over 25 years of experience in their respective business lines.
Pioneer expects to finance the purchase of the Wedge Companies through a combination of existing cash and a new, five year, senior secured revolving credit facility of up to $350 million led by Wells Fargo Bank, N.A. and Fortis Merchant Banking. The proposed credit facility, the terms of which allow for an expansion of up to $50 million in additional indebtedness subject to certain conditions, should provide a foundation of liquidity to assist Pioneer in meeting its future growth needs. The Company expects to complete the syndication of the credit facility in the coming weeks.
Simmons & Company International acted as financial advisor and Fulbright & Jaworski L.L.P. acted as legal advisor to Pioneer in this transaction.
CONFERENCE CALL INFORMATION
Pioneer's management team will hold a conference call, Monday, February 4, 2008, at 11:00 a.m. Eastern Time (10:00 a.m. Central), to discuss this transaction. To participate in the call, dial (303) 262-2141 at least 10 minutes before the conference call begins and ask for the Pioneer conference call. A replay of the call will be available approximately two hours after the call ends and will be accessible until February 11, 2008. To access the replay, dial (303) 590-3000 and enter the pass code 11108304#.
Investors, analysts and the general public can listen to the conference call over the Internet by accessing Pioneer's Web site at http://www.pioneerdrlg.com. To listen to the live call on the Web, please visit Pioneer's Web site at least 10 minutes early to register, download and install any necessary audio software. An archive will be available shortly after the call. For more information, please contact Donna Washburn at DRG&E at (713) 529-6600 or e-mail dmw@drg-e.com.
ABOUT PIONEER DRILLING COMPANY
Pioneer provides land contract drilling services to independent and major oil and gas operators drilling wells in Texas, Louisiana, Oklahoma, Kansas and in the Rocky Mountain region and internationally in Colombia. Its fleet consists of 69 land drilling rigs that drill in depth ranges between 6,000 and 18,000 feet.
ABOUT THE WEDGE COMPANIES
The Wedge Companies provide workover rig services, wireline services and fishing and rental services to U.S. oil and gas producers.
WEDGE Well Services, LLC provides a range of well services in the U.S. Gulf Coast region and East Texas utilizing a fleet of 60 (1- 400 horsepower rig, 55- 550 horsepower rigs and 4- 60 horsepower rigs) rigs and pump packages capable of working at depths of 20,000 feet to complete, maintain, and workover oil and natural gas producing wells. Ten new well service rigs are on order for delivery in 2008.
WEDGE Wireline Services, Inc. offers open and cased-hole wireline services in the Mid-Continent region, the Rockies, Wyoming and North Dakota with a fleet of 45 wireline units. Services include radial and standard cement bond logging with gamma-ray-neutron, casing calipers, temperature logging, pipe recovery, bridge plugs and a full range of perforating, including tubing-conveyed perforating.
WEDGE Fishing and Rental Services, LLC provides services out of four locations in Texas and Oklahoma offering fishing and rental equipment, air drilling equipment, power swivels and blowout preventers.
FORWARD-LOOKING STATEMENTS
This press release contains forward-looking statements regarding future events and is subject to risks and uncertainties. Statements in this press release that are not historical, including statements regarding Pioneer's or its management's intentions, hopes, beliefs, expectations, representations, projections, estimations, plans or predictions of the future, are forward- looking statements and are made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. Such statements include, but are not limited to, statements relating to the pending acquisition; closing date; and the terms of and ability to obtain permanent financing for the acquisition. Pioneer wishes to caution you that there are some factors that could cause actual results to differ materially from any future results, performance or achievements expressed or implied by such forward-looking statements, including, but not limited to: difficulty in integrating the services of the Wedge Companies into Pioneer in an efficient and effective manner; challenges in achieving strategic objectives; the risk that our markets do not evolve as anticipated; and the potential loss of the services of key employees of the Wedge Companies, including those of Mr. Eustace. Pioneer refers you to the documents it files from time to time with the SEC, specifically the section titled 'Item 1A. Risk Factors' of Pioneer's most recent Annual Report filed on Form 10-K and Quarterly Report filed on Form 10-Q, which contains and identifies other important factors that could cause actual results to differ materially from those contained in our projections or forward-looking statements. Shareholders and other readers are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date on which they are made. We undertake no obligation to update publicly or revise any forward-looking statements.
Contacts: Joyce Schuldt, Executive 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
SOURCE Pioneer Drilling Company
Source: PR Newswire (February 1, 2008 - 6:00 AM EST) News by QuoteMedia www.quotemedia.com
Golden Cross
17 years ago
Pioneer Drilling Reports Record Fiscal Second Quarter 2007 Results
Thursday November 2, 6:00 am ET
Second quarter revenues were up 60% to $106.9 million
Second quarter earnings per diluted share increased from $0.24 to $0.47
76% of the rig fleet is operating under contracts of 6 months to 2 years
SAN ANTONIO, Nov. 2 /PRNewswire-FirstCall/ -- Pioneer Drilling Company (Amex: PDC - News) today reported results for the three months ended September 30, 2006, which is the second quarter of its 2007 fiscal year.
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Revenues for the second quarter of fiscal 2007 grew to $106.9 million, compared to revenues of $67.0 million for the second quarter of fiscal 2006. This 60% increase in revenues was generated by a 35% increase in average revenues per revenue day to $20,272 per day, in addition to an 18% increase in the average number of rigs in Pioneer Drilling's fleet to 59.7 rigs. Average drilling margin(1) per revenue day increased 61% to $9,689 in the second quarter of fiscal 2007, compared to $6,019 in the second quarter of fiscal 2006 and 8% over first quarter of fiscal 2007. Net earnings for the second quarter of fiscal 2007 were $23.5 million, or $0.47 per diluted share, compared to net earnings of $11.1 million, or $0.24 per diluted share, for the second quarter of fiscal 2006. Pioneer Drilling began expensing stock compensation in the June 30, 2006 quarter and the stock compensation expense for second quarter of fiscal 2007 was $544,000 or $0.01 per diluted share. Weighted average shares of common stock outstanding on a diluted basis increased 6% to 50.1 million shares for the second quarter of fiscal 2007.
Revenue days during the second quarter of fiscal 2007 increased 19% to 5,274, compared to 4,446 revenue days for the second quarter of fiscal 2006. In the second quarter of fiscal 2007, revenue days by type of contract were 5,077 for daywork contracts, zero for turnkey contracts and 197 for footage contracts. In contrast, revenue days by type of contract in the second quarter of fiscal 2006 were 3,942 for daywork contracts, 96 for turnkey contracts and 408 for footage contracts. Pioneer Drilling's rig utilization rate was 97% for the second quarter of fiscal 2007, up slightly from 95% in the second quarter of fiscal 2006.
Wm. Stacy Locke, Pioneer Drilling's President and Chief Executive Officer, stated, "Demand for our rigs remained strong throughout the quarter and, on average, we continued to see modest increases in dayrates. Average drilling revenues per day increased $1,118 per revenue day to $20,272 in our fiscal second quarter of 2007, compared to our fiscal first quarter of 2007. We continued to pursue term drilling contracts during the quarter. Currently, 47 of our 62 rigs, or 76%, are operating under term contracts of six months to two years, of which 21 expire within the next six months, 14 have remaining terms of six to 12 months, seven have a remaining term of 12 to 18 months, and five have a remaining term in excess of 18 months. During the last 30 days, we have seen some softening in the market and a flattening in dayrates; however, we expect our customer demand and utilization rate to remain strong for the balance of the year.
"To date, we have completed 11 rigs of our new-build program and expect to have the four remaining rigs working under contract by the end of March 2007. We canceled the construction of one of the rigs in our new-build program due to a customer's change both in the type of rig needed and the drilling location, which would have required us to establish operations outside our operating regions," continued Mr. Locke. "Since April 1, 2006, the beginning of our new fiscal year, we have added six 1000-hp electric rigs: one rig to the Utah division; two rigs to the South Texas division; and three rigs to the North Texas division. We also added a 1000-hp mechanical rig to the Oklahoma division.
"Our investment in new-build rigs and our commitment to continue to upgrade and modernize our existing fleet has allowed Pioneer to expand its customer base. Currently, 58% of our rigs are working for publicly traded independents or major oil and gas companies. During the six months ended September 30, 2006, we spent approximately $14.1 million upgrading 14 rigs, using over 385 potential revenue days in the upgrade process.
"Since April 2001, we have built or upgraded 82% of our fleet, which we believe gives Pioneer the second-youngest fleet in the industry, with rigs that are designed to be efficient and cost effective. Over 90% of our rigs can drill horizontal and directional wells, 92% have dual high-powered mud pumps, 53% have modern mud-cleaning systems, 37% are premium electric, and 34% are quick-to-move and rig-up. In addition, beginning in January 2007, we will be adding iron roughnecks to all of our rigs over an 18-month period. We believe that our fleet is well positioned to be highly competitive in any market conditions we encounter."
Revenues for the first six months of fiscal 2007 were $200.4 million, compared to revenues of $126.9 million for the first six months of fiscal 2006. Net earnings during the first six months of fiscal 2007 were $43.0 million, or $0.86 per diluted share, compared to net earnings of $18.8 million, or $0.40 per diluted share, during the same period in fiscal 2006.
Revenue days were 10,155 during the first six months of fiscal 2007, compared to 8,749 revenue days for the comparable period of fiscal 2006. Pioneer Drilling's rig utilization rate for the first six months of fiscal 2007 was 96%, compared to 95% in last year's comparable six-month period.
Pioneer Drilling's management team will hold a conference call today, Thursday, November 2, 2006, at 11:00 a.m. Eastern time (10:00 a.m. Central), to discuss these results. To participate in the call, dial (303) 262-2137 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 November 9, 2006. To access the replay, dial (303) 590-3000 and enter the pass code 11073279#.
Investors, analysts and the general public can 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 10 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 Donna Washburn at DRG&E at (713) 529-6600 or e-mail dmw@drg-e.com.
Pioneer Drilling provides land contract drilling services to independent and major oil and gas operators drilling wells in Texas, Louisiana, Oklahoma and in the Rocky Mountain region. Its fleet consists of 62 land drilling rigs that drill in depth ranges between 6,000 and 18,000 feet.
(1) Drilling margin represents contract drilling revenues less contract
drilling costs. Pioneer Drilling believes that drilling margin is a
useful measure for evaluating its financial performance, although it
is not a measure of financial performance under generally accepted
accounting principles. However, drilling margin is a common measure
of operating performance used by investors, financial analysts,
rating agencies and Pioneer Drilling's management. A reconciliation
of drilling margin to net earnings is included in the operating
statistics table below in this release. Drilling margin as presented
may not be comparable to other similarly titled measures reported by
other companies.
Golden Cross
18 years ago
Pioneer Drilling Delivers Its 60th Rig; Pioneer Orders 70 Iron Roughnecks and Two Topdrives
Tuesday September 5, 6:00 am ET
SAN ANTONIO, Sept. 5 /PRNewswire-FirstCall/ -- Pioneer Drilling Company (Amex: PDC - News) today reported that the ninth rig of its 16 rig new-build program has commenced work under a two-year contract in its South Texas division. The rig is a 1000-hp trailer-mounted electric rig designed to be quick-to-move and rig-up, contains modern mud-cleaning equipment and has two independently powered, 1000-hp triplex mud pumps. This rig increases Pioneer's total working fleet to 60 rigs.
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Pioneer also announced that it has ordered 70 iron roughnecks and power slips to be delivered over a 24-month period beginning in January 2007, at a cost of approximately $18.3 million, plus installation costs of approximately $3 million. Red West, Pioneer's Executive Vice President and Chief Operating Officer, stated, "Iron roughnecks provide a faster, safer and more efficient method to spin up and spin out drill pipe. In addition, they will greatly reduce costly and dangerous accidents associated with the use of spinning chains and rotary tongs." Pioneer expects to take delivery of six iron roughneck units in the fourth quarter of this fiscal year, ending March 31, 2007, 48 units in fiscal 2008 and 16 units in fiscal 2009. Additionally, Pioneer has ordered two topdrives at a cost of approximately $3.3 million, which are scheduled for delivery in January 2007.
Wm. Stacy Locke, Pioneer Drilling's President and Chief Executive Officer, stated, "We are continuing to invest in building a premium land drilling fleet that we expect will command superior dayrates and remain in demand regardless of market swings. By adding these iron roughnecks to our rigs to handle the drill pipe connections on the drilling floor, one of the more dangerous jobs on the rig, we are reducing the potential for injury and enhancing our ability to be a top safety performer in the industry. High quality and safe operations attract premium customers for Pioneer to partner with over the long term. In addition, we will soon be able to provide topdrive services to our customers who are drilling in more challenging environments."
Pioneer Drilling provides land contract drilling services to independent and major oil and gas operators drilling wells in Texas, Louisiana and Oklahoma, and in the Rocky Mountain region. Its fleet consists of 60 land drilling rigs that drill in depth ranges between 6,000 and 18,000 feet.
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. The forward-looking information in this press release includes statements concerning the estimated cost of drilling equipment, the benefits expected to be provided by that equipment, the expected delivery times for that equipment and Pioneer's expectation that its drilling fleet will command superior dayrates and remain in demand regardless of market swings. 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. Should one or more of these risks materialize, or should underlying assumptions prove incorrect, actual results may vary materially from those expected. These risks are discussed in 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, 2006 and subsequent filings with the SEC.
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
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