Pioneer Drilling Provides Update on its Operations and Guidance; Expects Drilling Services Margin to Fall

Pioneer Drilling Company, Inc. PDC today provided an update on its operations and guidance for the second quarter of 2012. The Company now expects revenue growth in our Production Services Division to be at the low end of our estimate of approximately 5% to 10%. Margin as a percentage of revenues in that division is now expected to be 40% to 42%, compared to the previous guidance of being flat with the first quarter margin of 43.6%. In our Drilling Services Division, we now expect average drilling rig utilization in the second quarter to be at the low end of our previous guidance of 89% to 91%. We also expect our Drilling Services margin to be $7,600 to $8,000 per day, compared to our previous guidance of approximately $8,000 to $8,300 per day. "With the recent declines in oil and natural gas liquids prices, we are seeing some softening of demand in certain markets," said Wm. Stacy Locke, President and CEO of Pioneer Drilling. "Lower coiled tubing utilization in the second quarter accounted for most of our revised margin guidance for our Production Services Division, although pricing has remained firm for all of our production services. We are focused on improving the utilization of our coiled tubing equipment and have recently relocated one unit from Oklahoma to South Texas and will move another unit from the Marcellus to South Louisiana in July. We currently believe coiled tubing utilization will improve for the remainder of the year and are already seeing modest improvement in the month of June. We believe that such softness could affect the Company's ability to meet our prior estimate of $26 to $29 million of EBITDA in calendar year 2012 for our coiled tubing business.