Pioneer to Acquire WEDGE Services for $303 Million

Pioneer Drilling Company has entered into a definitive purchase agreement to acquire WEDGE Well Services, L.L.C., WEDGE Wireline, Inc. and WEDGE Fishing and Rental Services, L.L.C. (the "Wedge Companies") from affiliates of WEDGE Group Incorporated for $303 million in cash, subject to customary adjustments. The Wedge Companies provide oil and gas well workover, wireline, and fishing and rental services for energy producers in the United States. The closing of the transaction, which is expected before the end of first quarter of 2008, is subject to obtaining certain regulatory approvals, Pioneer's receipt of financing for the acquisition and other customary closing conditions. The acquisition is expected to be significantly accretive to calendar year 2008 earnings and cash flow per share.

Wm. Stacy Locke, Pioneer's President and Chief Executive Officer, stated, "This transaction further transforms Pioneer from a pure-play U.S. land driller into a multi-national energy services provider. Together with our recent expansion into the international land drilling market, this acquisition substantially advances Pioneer's goal of building a best-in-class energy services company with multiple geographic and product platforms. The Wedge Companies' growth strategy mirrors Pioneer's in that both employ modern fleets that deliver enhanced value to their customers. Further, the combination positions Pioneer to extend its customer base and capture a larger share of E&P spending by offering diversified services required through the life of the well. The Wedge Companies have an outstanding management team, as well as seasoned operations and support staff, which, when combined with Pioneer's, will produce a top-notch team."

"Pioneer looks forward to welcoming the Wedge Companies' management team, employees and customers to the Pioneer family," added Mr. Locke. "Joe Eustace, President of the Wedge Companies, and his management team have executed their growth strategy flawlessly. Together, we look forward to carrying out our mission to become a premier energy services provider. Not only will the combined companies' young fleet operate safely and efficiently, but will allow us to attract and retain the best operational talent in the industry. In so doing, we will be well positioned from a competitive standpoint to meet and exceed our customers' expectations and grow our market share accordingly. We are thrilled to deliver a broader suite of state-of-the-art services to our current and future customers."

Mr. Eustace will join Pioneer as President of the new Energy Services Division. He and his management team, which includes Joe Freeman, Vice President Operations - Well Services, Mark Gjovig, Vice President Operations - Wireline Services, and Randy Watson, Vice President Operations - Fishing & Rental Services, each bring over 25 years of experience in their respective business lines.

Pioneer expects to finance the purchase of the Wedge Companies through a combination of existing cash and a new, five year, senior secured revolving credit facility of up to $350 million led by Wells Fargo Bank, N.A. and Fortis Merchant Banking. The proposed credit facility, the terms of which allow for an expansion of up to $50 million in additional indebtedness subject to certain conditions, should provide a foundation of liquidity to assist Pioneer in meeting its future growth needs. The Company expects to complete the syndication of the credit facility in the coming weeks.