Pioneer Drilling Agrees to Buy Seven Rigs

Pioneer Drilling Company has signed an asset purchase agreement to acquire a seven rig drilling fleet and related equipment for $12 million. The fleet consists of seven mechanical 700 to 1200 horsepower rigs, capable of drilling to depths of 10,000 to 14,000 feet. The transaction is expected to close in early March 2004, subject to financing satisfactory to the Company, thereby increasing the Company's fleet size to 35 drilling rigs.

Wm. Stacy Locke, Pioneer Drilling's President and Chief Executive Officer, stated, "We remain focused on growth and building a quality land fleet. We are very excited about this acquisition. All seven rigs are working and we anticipate that the fleet utilization will remain high. When completed, this transaction will allow us to increase market share within our existing markets as well as further expand geographically."

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 consists of 28 land drilling rigs that drill in depth ranges between 10,000-18,000 feet.