Pioneer Drilling to Acquire Oklahoma Drilling Business

Pioneer Drilling Company has signed an asset purchase agreement to acquire a fleet of five drilling rigs and related equipment from Allen Drilling Company for $7.2 million in cash. Allen Drilling owns a yard in Woodward, Oklahoma and operates a fleet of five mechanical 550 to 800 horsepower rigs, capable of drilling to depths of 6,000 to 10,000 feet. Historically, Allen Drilling's rigs primarily drilled wells on a footage basis. Mr. Dixon Allen, President of Allen Drilling, will become Pioneer's Oklahoma Division Manager. The transaction is expected to close in late December 2004.

Wm. Stacy Locke, Pioneer Drilling's Chief Executive Officer, stated, "Allen Drilling has operated in the northern Anadarko shelf of Oklahoma since 1976 and has built an excellent reputation and a loyal customer base. This is a great opportunity for Pioneer to establish a presence in this prolific natural gas region and build upon a well run operation. Additionally, we will be pleased to have Dixon Allen join Pioneer. Dixon has been President of Allen Drilling since 1982 and has been largely responsible for Allen Drilling's success."

Pioneer Drilling also reported that is has completed the previously announced acquisition of seven drilling rigs and related equipment from Wolverine Drilling, Inc., based in Kenmare, North Dakota. In addition, Pioneer has signed a one year daywork contract for its 1000hp electric rig, which is in the final stages of construction. This rig will be mobilized to Utah in mid-December and will be operated by the North Dakota Division.