Revenues for the third quarter of fiscal 2006 grew to $74.5 million, compared to revenues of $46.4 million in the third quarter of fiscal 2005, due to the continued strong demand for rigs in the Company's operating markets. This 61% increase in revenues was generated by a 20% increase in average revenues per day to $15,795 per day, coupled with a 34% increase in the average number of rigs in Pioneer Drilling's fleet. Average drilling margin(1) per day increased 67% to $6,667 in the third quarter of fiscal 2006 compared to $3,982 in the third quarter of fiscal 2005 and sequentially increased 11% from the second quarter of fiscal 2006. Net earnings for the third quarter of fiscal 2006 were $13.8 million, or $0.29 per diluted share, compared to net earnings of $4.2 million, or $0.11 per diluted share, for the third quarter of fiscal 2005. Weighted average shares of common stock outstanding on a diluted basis increased 20% to 47.3 million shares for the third quarter of fiscal 2006 from 39.5 million shares for the third quarter of fiscal 2005.
Revenue days during the third quarter of fiscal 2006 increased 34% to 4,714, compared to 3,524 revenue days for the third quarter of fiscal 2005. As compared to a year ago, the revenue days by type of contract shifted significantly toward daywork contracts. In the third quarter of fiscal 2006, revenue days by type of contract were 4,269 for daywork contracts, zero for turnkey contracts and 445 for footage contracts. In contrast, revenue days by type of contract in the third quarter of fiscal 2005 were 2,421 for daywork contracts, 1,024 for turnkey contracts and 79 for footage contracts. Pioneer Drilling's rig utilization rate remains steady at 96% for the third quarter of fiscal 2006 compared to 98% in the prior third quarter.
Wm. Stacy Locke, Pioneer Drilling's President and Chief Executive Officer, stated, "Demand for drilling rigs remained strong throughout the quarter. Dayrates continue to increase, which should further drive margin improvement. During our third quarter, we completed two rigs out of our 13 rig new-build program. Both are 1500-horsepower electric rigs. One rig went to our East Texas division under a one-year term contract and the other rig went to our North Texas division under a two-year term contract. In January, we delivered our third rig, a 1500-horsepower rig to our North Dakota division. That rig is now under a two-year contract. This increases our marketable fleet to 55 rigs. We anticipate completing two to three more rigs by our March 31, 2006 fiscal year-end and the remainder by the end of this calendar year. Additionally, we continue to explore opportunities to add to our rig-build program under the right terms and conditions."
"We also devote substantial resources to maintaining and upgrading our rig fleet. In the short-term, these actions result in fewer revenue days, higher costs and slightly lower utilization; however, in the long term, we believe the upgrades help the marketability of our rigs and improve their operating performance throughout good and bad phases of the energy cycle. We expended approximately $16.4 million on rig upgrades during the nine months ended December 31, 2005. We are currently performing safety and equipment upgrades to a number of rigs, in particular, rigs acquired through acquisitions during the past two years," added Mr. Locke.
Revenues for the first nine months of fiscal year 2006 were $201.3 million, compared to revenues of $129.9 million for the first nine months of fiscal year 2005. Net earnings during the first nine months of fiscal 2006 were $32.6 million, or $0.69 per diluted share, compared to a net income of $5.3 million, or $0.16 per diluted share, during the first nine months of fiscal 2005.
Revenue days were 13,463 during the first nine months of fiscal 2006, compared to 9,687 revenue days for the comparable period of fiscal 2005. Pioneer Drilling's rig utilization rate for the first nine months of fiscal 2006 was 95%, compared to 96% in last year's comparable nine-month period.
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