Revenues for the second quarter of fiscal 2006 grew to $67.0 million, compared to revenues of $42.8 million in the second quarter of fiscal 2005. This 57% increase in revenues was due to an 11.5% increase in average revenues per day for all contracts to $15,064 per day, coupled with a 41% increase in the average number of rigs in Pioneer Drilling's fleet. The growing demand for rigs in the Company's operating markets continued to drive improvement in drilling margins(1), resulting in an increase of 132% in average drilling margin per day for all contracts to $6,004 in the second quarter of fiscal 2006 compared to $2,587 in the second quarter of fiscal 2005 and an increase of 25% in average drilling margin per day for all contracts compared to the first quarter of fiscal 2006. Net earnings in the second quarter of fiscal 2006 were $11.1 million, or $0.24 per diluted share, versus net earnings of $923,000, or $0.03 per diluted share, for the second quarter of fiscal 2005. Weighted average shares of common stock outstanding on a diluted basis increased 37% to 47.1 million shares for the second quarter of fiscal 2006 from 34.3 million shares for the second quarter of fiscal 2005.
Revenue days during the second quarter of fiscal 2006 increased 40% to 4,446, compared to 3,166 revenue days for the second quarter of fiscal 2005. As compared to a year ago, the revenue days by type of contract shifted significantly toward daywork contracts. In the second quarter of fiscal 2006, the revenue days by type were 3,942 for daywork contracts, 96 for turnkey contracts and 408 for footage contracts. In contrast, revenue days by type of contract in the second quarter of fiscal 2005 were 1,674 for daywork contracts, 1,347 for turnkey contracts and 145 for footage contracts.
Wm. Stacy Locke, Pioneer Drilling's President and Chief Executive Officer, stated, "To meet the needs of our customers' expanding drilling budgets, we have increased our rig-building program from five to 13 rigs. The rigs will be spread between our two divisions in the Rockies and our three divisions in Texas. Three of the rigs will be 1500-horsepower and the remainder will be 1000-horsepower. Twelve of the 13 rigs will be diesel electric. The first rig began operations in early October and the second rig should be working under contract by mid-November, with the remaining 11 rigs expected to be placed into service incrementally by December 2006.
"The majority of these rigs have two-year term contracts, with dayrates in excess of $16,000 per day. As a result, most of our investment in each rig will be returned during the primary term of the initial contract. As always, we remain focused on achieving attractive returns on investment while building a fleet of top quality and technologically advanced rigs. Our rig-building team, led by Red West, Chief Operating Officer, continues to innovate, design and assemble rigs that are well-suited to our customers' needs. By constructing these rigs internally from a combination of new and used components, we believe we save approximately 25% on costs and end up with dependable rigs.
"Our total capital budget for the 13 rigs being added to our fleet is approximately $88 million, or an average of $6.8 million per rig. We plan to fund this expansion from cash on hand and from operating cash flow. As a result, we should maintain a strong cash position and healthy balance sheet. This rig-building program will further strengthen our existing high quality fleet. At the culmination of this program, 28% of the rigs will be capable of drilling depths between 15,000 feet to 18,000 feet and 40% of the rigs will be diesel electric," concluded Mr. Locke.
Revenues for the first six months of fiscal year 2006 were $126.8 million, compared to revenues of $83.5 million for the first six months of fiscal year 2005. Net earnings during the first six months of fiscal 2006 were $18.8 million, or $0.40 per diluted share, compared to a net income of $1.1 million, or $0.04 per diluted share, during the first six months of fiscal 2005.
Revenue days were 8,749 during the first six months of fiscal 2006, compared to 6,163 revenue days for the comparable period of fiscal 2005. Pioneer Drilling's rig utilization rate for the first six-months of fiscal 2006 was 95%, versus 94% in last year's comparable six-month period.
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