Pioneer Drilling Reports Fiscal Fourth Quarter Result
Pioneer Drilling Company (Amex: PDC) reported results for the fourth quarter and twelve months ended March 31, 2005.
Revenues for the fourth quarter of fiscal 2005 grew to $55.4 million, compared to revenues of $33.4 million in the fourth quarter of fiscal 2004. This 66% increase in revenues was due to an improvement in rig revenue rates, a 62% increase in the average number of rigs in Pioneer's fleet and a 6% increase in Pioneer's rig utilization rate. Net earnings in the fourth quarter of fiscal 2005 were $5.5 million, or $0.14 per diluted share, versus net earnings of $409,000, or $0.02 per share, during the fourth quarter of fiscal 2004.
Revenue days during the fourth quarter of fiscal 2005 increased 69% to 4,207, compared to 2,496 revenue days for the fourth quarter of fiscal 2004. Revenue days by type of contract in the fourth quarter of fiscal 2005 were 3,005 for daywork contracts, 804 for turnkey contracts and 398 for footage contracts. Pioneer's rig utilization rate increased 6% for the fiscal fourth quarter to 97%, up from 91% in the corresponding period last year.
Wm. Stacy Locke, Pioneer's President and Chief Executive Officer, stated, "As forecasted, we continued to show improvement in our operating margin for our fiscal fourth quarter; albeit, at a slower rate of increase, as compared to the last quarter. Average dayrates for daywork contracts increased approximately $1,200 per day, or 12%, to approximately $11,450, up from average dayrates of approximately $10,250 for the quarter ended December 31, 2004. However, our overall improvement in operating margin was negatively impacted by the addition of shallower rigs operating at lower dayrates, footage contracts generating lower average operating margins and the continued reduction in higher-margin turnkey work. Turnkey contracts comprised 19% of our revenue days in our fiscal fourth quarter, down from 29% for the quarter ended December 31, 2004. Conversely, footage contracts increased to 9% of our revenue days, up from 2% for the quarter ended December 31, 2004. This increase in footage revenue days was the result of the five rigs purchased from Allen Drilling in December 2004, which were on footage contracts throughout our fourth quarter and generated operating margins below that of our daywork and turnkey contracts.
"As we progress into fiscal 2006, we anticipate that average dayrates will increase over 10% in each of the next two fiscal quarters and that operating margins from daywork, turnkey and footage contracts will increase as well. Pioneer plans to continue adding quality equipment to seize upon these improving market conditions. As previously announced, we are building two 14,000 foot capacity, 1000 hp, SCR rigs to add to our Vernal, Utah operations. The first of these rigs is scheduled to begin work in less than 30 days and the second in early August 2005. Both rigs will operate under separate two- year contracts with a large, independent oil and gas company. In addition, we are planning to complete a 1500 hp SCR rig by September 2005 and are evaluating the addition of up to four more 1000 hp and 1200 hp rigs by the end of fiscal 2006. The decision to build the additional five rigs is subject to obtaining satisfactory contracts with minimum terms of one year. We anticipate these rigs will range in cost from $6.8 million to $7.4 million each."
Revenues for the fiscal year ended March 31, 2005 were $185.2 million, compared to revenues of $107.9 million for fiscal 2004. Net earnings during fiscal 2005 were $10.8 million, or $0.30 per diluted share, compared to a net loss of $1.8 million, or $0.08 loss per share, during fiscal 2004.
Revenue days were 13,894 days during fiscal 2005, compared to 8,764 days for fiscal 2004. Pioneer's rig utilization rate for fiscal 2005 was 96%, up from 88% for fiscal 2004.
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