Pioneer Drilling to Acquire Rocky Mountain Drilling Business

Pioneer Drilling Company has signed an asset purchase agreement to acquire a fleet of seven drilling rigs and related equipment from Wolverine Drilling, Inc. for $28 million in cash. Wolverine, based in Kenmare, North Dakota, owns a fleet of seven mechanical 500 to 1000 horsepower rigs, capable of drilling to depths of 7,000 to 15,000 feet. Robert S. Blackford, President of Wolverine, will become Pioneer's North Dakota Division Manager. The transaction is expected to close in early December 2004, increasing the Company's fleet size to 43 drilling rigs.

Wm. Stacy Locke, Pioneer Drilling's Chief Executive Officer, stated, "We are very excited about expanding our operations into the prolific oil and gas regions of the Rocky Mountains. Wolverine has operated in the Rockies since 1994 and has a significant presence in the Williston Basin of North Dakota and Montana. Six of the seven rigs are currently working under contract and we anticipate that the fleet utilization will remain high for the foreseeable future. Presently, three of the rigs are drilling in North Dakota, two are working in Montana and one is drilling in Colorado. The seventh rig is undergoing an upgrade and refurbishment in the Kenmare yard and is scheduled to be operational by mid-December."

Mr. Locke commented further: "We are pleased to have Bob Blackford join the Company. Bob has been instrumental in establishing Wolverine as a first rate drilling contractor, while also growing Wolverine's fleet from two rigs to seven rigs. Having Bob and his management team on board will make for a smooth transition. In addition, we are planning to add an eighth rig to the North Dakota Division next month, which will bring our total fleet size to 44 rigs. The rig, which is nearly complete, is being constructed of new and refurbished equipment and will be a highly mobile, 1000hp electric rig. We are in the final stages of negotiating a one year contract for our new electric rig with an operator for a drilling program in Utah, near the location where one of Wolverine's rigs is drilling in Colorado."

Pioneer Drilling Company provides land contract drilling services to independent and major oil and gas operators drilling wells in north, east and south Texas. The Company's fleet currently consists of 36 land drilling rigs that drill in depth ranges between 8,000-18,000 feet.

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