Exhibit 99.1
 | Contacts: | Dan Petro, CFA, Vice President, Treasury and Investor Relations Pioneer Energy Services Corp. (210) 828-7689 Lisa Elliott / pes@dennardlascar.com Dennard Lascar Investor Relations / (713) 529-6600 |
Pioneer Energy Services
Reports Fourth Quarter 2018 Results
SAN ANTONIO, Texas, February 19, 2019 - Pioneer Energy Services (NYSE: PES) today reported financial and operating results for the quarter ended December 31, 2018. Fourth quarter and recent notable items include:
• | Domestic drilling fleet was fully utilized and generated an average margin per day of $10,252. |
• | International drilling fleet generated its highest average margin per day since 2014. Also, two drilling rigs that had been idle during the quarter commenced operations in December for two separate clients resulting in seven rigs earning revenue at year-end. |
• | Well servicing and coiled tubing both generated sequential revenue increases despite seasonal activity slowdowns and lower commodity prices. |
Consolidated Financial Results
Revenues for the fourth quarter of 2018 were $141.5 million, down 5% from revenues of $149.3 million in the third quarter of 2018 (“the prior quarter”). Net loss for the fourth quarter of 2018 was $14.5 million, or $0.19 per share, compared with net loss of $5.2 million, or $0.07 per share, in the prior quarter. Adjusted net loss(1) for the fourth quarter was $13.6 million, and adjusted EPS(2) was a loss of $0.17 per share. These results compare to an adjusted net loss of $5.6 million, and an adjusted EPS loss of $0.07 per share in the prior quarter. Fourth quarter adjusted EBITDA(3) was $20.8 million, down from $28.6 million in the prior quarter.
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The decrease in revenues and adjusted EBITDA from the prior quarter was primarily due to lower completion-related activity in our wireline services business, which was partially offset by improved margins in our international drilling operations. Additionally, our adjusted EBITDA during the fourth quarter decreased by $1.0 million as compared to the prior quarter due to the change in fair value of our phantom stock awards, for which we recognized a benefit in the third and fourth quarters of $3.7 million and $2.7 million, respectively.
Operating Results
Production Services Business
Revenue from our production services business was $82.3 million in the fourth quarter, down 8% from the prior quarter. Gross margin as a percentage of revenue from our production services business was 19% in the fourth quarter, down from 24% in the prior quarter.
The decrease in production services revenues from the prior quarter was attributable to lower wireline completion-related activity as certain customers curtailed completion activities amidst declining commodity prices. The overall decrease in production service revenue was partially offset by sequential increases in well servicing and coiled tubing revenues. We continued to expand our 24-hour drill-out, completion-related activity, primarily in West Texas, which led to a sequential increase in revenue for the well servicing business. Our coiled tubing business benefited from the full impact of large diameter equipment added during the prior quarter.
Well servicing average revenue per hour was $571 in the fourth quarter, up from $552 in the prior quarter. Well servicing rig utilization was 50% in the fourth quarter, down slightly from 51% in the prior quarter. Coiled tubing revenue days totaled 346 in the fourth quarter, as compared to 362 in the prior quarter. The number of wireline jobs completed in the fourth quarter decreased by 10% sequentially.
Drilling Services Business
Revenue from our drilling services business was $59.2 million in the fourth quarter, reflecting a 1% decrease from the prior quarter. Margin per day was $10,872, up from $9,428 in the prior quarter.
Our domestic drilling fleet was fully utilized during the current and prior quarters with average revenues per day of $25,794 in the fourth quarter, up from $25,076 in the prior quarter. Domestic drilling
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average margin per day was $10,252 in the fourth quarter, up slightly from $10,237 in the prior quarter due to certain rigs repricing upward by approximately $1,000 to $4,000 per day during the quarter, but offset by one rig repricing downward by approximately $5,000 per day from a legacy contract.
International drilling rig utilization was 71% for the fourth quarter, down from 76% in the prior quarter. Average revenues per day were $41,230, up from $41,158 in the prior quarter, while average margin per day for the fourth quarter was $12,590, up from $7,327 in the prior quarter. The increase in revenue per day and margin per day was primarily due to negotiated reimbursements of certain operating costs of approximately $1.3 million, as well as demobilization revenue related to one contract. Although utilization in the fourth quarter was down sequentially, two idle rigs were mobilized and began operations in December.
Currently, all 16 of our domestic drilling rigs are earning revenues, 13 of which are under term contracts, and six of our eight rigs in Colombia are earning revenue under daywork contracts. In our domestic drilling operations, we expect our contracted new-build drilling rig to be deployed to West Texas and begin operations in late first quarter of 2019.
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Comments from our President and CEO
“In 2018, we generated significantly improved results over 2017 with our drilling services business achieving 35% revenue growth and a 42% increase in gross margin, while our production services business achieved 31% revenue growth and a 35% increase in gross margin,” said Wm. Stacy Locke, President and Chief Executive Officer. “Strong demand for our U.S. drilling services positioned us to continue to generate industry-leading margins throughout the year, despite the downward repricing of four rigs from legacy new-build contracts. Our fleet of top performing U.S. drilling rigs remains fully utilized, and continues to experience strong demand. In Colombia, we diversified our client base and finished 2018 with seven rigs earning revenue for five customers. Our international drilling operations had a particularly favorable year with 104% revenue growth and a 115% improvement in gross margin.
“Looking forward, we have solid term contract protection in our drilling services business, and select dayrate increases that were negotiated in the fourth quarter will positively impact the business in 2019. We expect drilling demand for high spec rigs to remain strong, particularly in West Texas where we will be delivering a new-build rig in the first quarter on a three-year term contract. Demand has been firm in Colombia with seven rigs currently contracted, although one of the seven will not be earning revenue for part of the first quarter due to a required mast repair, but is expected to return to work in the second quarter.
“Our production services business should see steady improvement throughout the first quarter with typical seasonal weakness in January and February, and finishing stronger in March. We expect to continue to benefit from our investment in coiled tubing with the addition of two large diameter units in 2018 and the ongoing expansion of 24-hour drill-out, completion activities that we introduced in late 2018 in our well servicing business. We anticipate that market dynamics for wireline services could remain challenging in early 2019.
“While the market conditions remain uncertain and visibility limited, we are focused on maintaining capital expenditure discipline with an expectation of being cash flow neutral for 2019. In addition, we will continue to explore asset sales to unlock additional liquidity and enhance our ability to reduce debt.”
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First Quarter 2019 Guidance
In the first quarter of 2019, revenue from our production services business segments could range from down 3% to up 3% as compared to the fourth quarter of 2018 depending on a number of factors such as weather and the timing of certain clients resuming operations. Margin from our production services business is estimated to be 18% to 21% of revenue. Domestic drilling services rig utilization is expected to be 100% and generate average margins per day of approximately $9,700 to $10,200. International drilling services rig utilization is estimated to average 80% to 83%, and generate average margins per day of approximately $9,000 to $10,000.
We expect general and administrative expense to be approximately $20 million to $21 million in the first quarter of 2019, which as it relates to phantom stock compensation expense, is based on the closing price of our common stock of $1.23 per share at December 31, 2018.
Liquidity
Working capital at December 31, 2018 was $110.3 million, down from $130.6 million at December 31, 2017. Cash and cash equivalents, including restricted cash, were $54.6 million, down from $75.6 million at year-end 2017. During the year ended December 31, 2018, we used $67.1 million of cash for the purchase of property and equipment, and our cash provided by operations was $39.7 million.
Capital Expenditures
Cash capital expenditures during the year ended December 31, 2018 were $67.1 million, including capitalized interest. We estimate total cash capital expenditures for 2019 to be approximately $55 million to $60 million, which includes approximately $7 million for final payments on the construction of the new-build drilling rig that is expected to begin operations in the first quarter, and previous commitments on high-pressure pump packages for coiled tubing completion operations.
Conference Call
Pioneer Energy Services' management team will hold a conference call today at 11:00 a.m. Eastern Time (10:00 a.m. Central Time) to discuss these results. To participate, dial (412) 902-0003 approximately 10 minutes prior to the call and ask for the Pioneer Energy Services conference call. A telephone replay will be available after the call until February 26th. To access the replay, dial (201) 612-7415 and enter the pass code 13686777.
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The conference call will also be webcast on the Internet and accessible from Pioneer Energy Services' web site at www.pioneeres.com. To listen to the live call, visit our web site at least 10 minutes early to register and download any necessary audio software. For more information, please contact Donna Washburn at Dennard Lascar Investor Relations at (713) 529-6600 or e-mail dwashburn@dennardlascar.com.
About Pioneer
Pioneer Energy Services provides well servicing, wireline, and coiled tubing services to producers in the U.S. Gulf Coast, Mid-Continent and Rocky Mountain regions through its three production services business segments. Pioneer also provides contract land drilling services to oil and gas operators in Texas, the Mid-Continent and Appalachian regions and internationally in Colombia through its two drilling services business segments.
Cautionary Statement Regarding Forward-Looking Statements,
Non-GAAP Financial Measures and Reconciliations
Statements we make in this news release that express a belief, expectation or intention, as well as those that are not historical fact, are forward-looking statements made in good faith that are subject to risks, uncertainties and assumptions. Our actual results, performance or achievements, or industry results, could differ materially from those we express in the following discussion as a result of a variety of factors, including general economic and business conditions and industry trends, levels and volatility of oil and gas prices, the continued demand for drilling services or production services in the geographic areas where we operate, decisions about exploration and development projects to be made by oil and gas exploration and production companies, the highly competitive nature of our business, technological advancements and trends in our industry and improvements in our competitors' equipment, the loss of one or more of our major clients or a decrease in their demand for our services, future compliance with covenants under debt agreements, including our senior secured term loan, our senior secured revolving asset-based credit facility, and our senior notes, operating hazards inherent in our operations, the supply of marketable drilling rigs, well servicing rigs, coiled tubing units and wireline units within the industry, the continued availability of new components for drilling rigs, well servicing rigs, coiled tubing units and wireline units, the continued availability of qualified personnel, the success or failure of our acquisition strategy, the occurrence of cybersecurity incidents, the political, economic, regulatory and other uncertainties encountered by our operations, and changes in, or our failure or inability to comply with, governmental regulations, including those relating to the environment. We have discussed many of these factors in more detail in our Annual Report on Form 10-K for the year ended December 31, 2018, including under the headings “Special Note Regarding Forward-Looking Statements” in the Introductory Note to Part I and “Risk Factors” in Item 1A. These factors are not necessarily all the important factors that could affect us. Other unpredictable or unknown factors could also have material adverse effects on actual results of matters that are the subject of our forward-looking statements. All forward-looking statements speak only as of the date on which they are made and we undertake no obligation to publicly update or revise any forward-looking statements whether as a result of new information, future events or otherwise. We advise our shareholders that they should (1) recognize that important factors not referred to above could affect the accuracy of our forward-looking statements and (2) use caution and common sense when considering our forward-looking statements.
This news release contains non-GAAP financial measures as defined by SEC Regulation G. A reconciliation of each such measure to its most directly comparable U.S. Generally Accepted Accounting Principles (GAAP) financial
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measure, together with an explanation of why management believes that these non-GAAP financial measures provide useful information to investors, is provided in the following tables.
_________________________________
(1) | Adjusted net loss represents net loss as reported adjusted to exclude impairments and the related tax benefit and valuation allowance adjustments on deferred tax assets. We believe that adjusted net loss is a useful measure to facilitate period-to-period comparisons of our core operating performance and to evaluate our long-term financial performance against that of our peers, although it is not a measure of financial performance under GAAP. Adjusted net loss may not be comparable to other similarly titled measures reported by other companies. A reconciliation of net loss as reported to adjusted net loss is included in the tables to this news release. |
(2) | Adjusted (diluted) EPS represents adjusted net loss divided by the weighted-average number of shares outstanding during the period, including the effect of dilutive securities, if any. We believe that adjusted (diluted) EPS is a useful measure to facilitate period-to-period comparisons of our core operating performance and to evaluate our long-term financial performance against that of our peers, although it is not a measure of financial performance under GAAP. Adjusted (diluted) EPS may not be comparable to other similarly titled measures reported by other companies. A reconciliation of diluted EPS as reported to adjusted (diluted) EPS is included in the tables to this news release. |
(3) | Adjusted EBITDA represents income (loss) before interest expense, income tax (expense) benefit, depreciation and amortization, impairment, and loss on extinguishment of debt. Adjusted EBITDA is a non-GAAP measure that our management uses to facilitate period-to-period comparisons of our core operating performance and to evaluate our long-term financial performance against that of our peers. We believe that this measure is useful to investors and analysts in allowing for greater transparency of our core operating performance and makes it easier to compare our results with those of other companies within our industry. Adjusted EBITDA should not be considered (a) in isolation of, or as a substitute for, net income (loss), (b) as an indication of cash flows from operating activities or (c) as a measure of liquidity. In addition, Adjusted EBITDA does not represent funds available for discretionary use. Adjusted EBITDA may not be comparable to other similarly titled measures reported by other companies. A reconciliation of net loss as reported to adjusted EBITDA is included in the tables to this news release. |
- Financial Statements and Operating Information Follow -
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PIONEER ENERGY SERVICES CORP. AND SUBSIDIARIES
Consolidated Statements of Operations
(in thousands, except per share data)
Three months ended | Year ended | ||||||||||||||
December 31, | September 30, | December 31, | |||||||||||||
2018 | 2018 | 2018 | 2017 | ||||||||||||
(unaudited) | (audited) | ||||||||||||||
Revenues | $ | 141,505 | $ | 149,332 | $ | 590,097 | $ | 446,455 | |||||||
Costs and expenses: | |||||||||||||||
Operating costs | 103,989 | 108,961 | 429,913 | 330,880 | |||||||||||
Depreciation | 23,019 | 23,501 | 93,554 | 98,777 | |||||||||||
General and administrative | 16,051 | 14,043 | 74,117 | 69,681 | |||||||||||
Bad debt expense, net of recovery | 582 | 111 | 271 | 53 | |||||||||||
Impairment | 1,815 | 239 | 4,422 | 1,902 | |||||||||||
Gain on dispositions of property and equipment, net | (199 | ) | (1,861 | ) | (3,121 | ) | (3,608 | ) | |||||||
Total costs and expenses | 145,257 | 144,994 | 599,156 | 497,685 | |||||||||||
Income (loss) from operations | (3,752 | ) | 4,338 | (9,059 | ) | (51,230 | ) | ||||||||
Other income (expense): | |||||||||||||||
Interest expense, net of interest capitalized | (9,816 | ) | (9,811 | ) | (38,782 | ) | (27,039 | ) | |||||||
Other income (expense), net | (308 | ) | 498 | 738 | 424 | ||||||||||
Total other expense, net | (10,124 | ) | (9,313 | ) | (38,044 | ) | (28,091 | ) | |||||||
Loss before income taxes | (13,876 | ) | (4,975 | ) | (47,103 | ) | (79,321 | ) | |||||||
Income tax (expense) benefit | (611 | ) | (258 | ) | (1,908 | ) | 4,203 | ||||||||
Net loss | $ | (14,487 | ) | $ | (5,233 | ) | $ | (49,011 | ) | $ | (75,118 | ) | |||
Loss per common share: | |||||||||||||||
Basic | $ | (0.19 | ) | $ | (0.07 | ) | $ | (0.63 | ) | $ | (0.97 | ) | |||
Diluted | $ | (0.19 | ) | $ | (0.07 | ) | $ | (0.63 | ) | $ | (0.97 | ) | |||
Weighted-average number of shares outstanding: | |||||||||||||||
Basic | 78,136 | 78,136 | 77,957 | 77,390 | |||||||||||
Diluted | 78,136 | 78,136 | 77,957 | 77,390 | |||||||||||
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PIONEER ENERGY SERVICES CORP. AND SUBSIDIARIES
Condensed Consolidated Balance Sheets
(in thousands)
(audited)
December 31, 2018 | December 31, 2017 | ||||||
ASSETS | |||||||
Current assets: | |||||||
Cash and cash equivalents | $ | 53,566 | $ | 73,640 | |||
Restricted cash | 998 | 2,008 | |||||
Receivables, net of allowance for doubtful accounts | 130,881 | 113,005 | |||||
Inventory | 18,898 | 14,057 | |||||
Assets held for sale | 3,582 | 6,620 | |||||
Prepaid expenses and other current assets | 7,109 | 6,229 | |||||
Total current assets | 215,034 | 215,559 | |||||
Net property and equipment | 524,858 | 549,623 | |||||
Other noncurrent assets | 1,658 | 1,687 | |||||
Total assets | $ | 741,550 | $ | 766,869 | |||
LIABILITIES AND SHAREHOLDERS' EQUITY | |||||||
Current liabilities: | |||||||
Accounts payable | $ | 34,134 | $ | 29,538 | |||
Deferred revenues | 1,722 | 905 | |||||
Accrued expenses | 68,912 | 54,471 | |||||
Total current liabilities | 104,768 | 84,914 | |||||
Long-term debt, less unamortized discount and debt issuance costs | 464,552 | 461,665 | |||||
Deferred income taxes | 3,688 | 3,151 | |||||
Other noncurrent liabilities | 3,484 | 7,043 | |||||
Total liabilities | 576,492 | 556,773 | |||||
Total shareholders’ equity | 165,058 | 210,096 | |||||
Total liabilities and shareholders’ equity | $ | 741,550 | $ | 766,869 | |||
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PIONEER ENERGY SERVICES CORP. AND SUBSIDIARIES
Condensed Consolidated Statements of Cash Flows
(in thousands)
(audited)
Year ended | |||||||
December 31, | |||||||
2018 | 2017 | ||||||
Cash flows from operating activities: | |||||||
Net loss | $ | (49,011 | ) | $ | (75,118 | ) | |
Adjustments to reconcile net loss to net cash provided by (used in) operating activities: | |||||||
Depreciation | 93,554 | 98,777 | |||||
Allowance for doubtful accounts, net of recoveries | 271 | 53 | |||||
Gain on dispositions of property and equipment, net | (3,121 | ) | (3,608 | ) | |||
Stock-based compensation expense | 4,444 | 4,349 | |||||
Phantom stock compensation expense | 46 | 1,609 | |||||
Amortization of debt issuance costs and discount | 2,900 | 1,548 | |||||
Loss on extinguishment of debt | — | 1,476 | |||||
Impairment | 4,422 | 1,902 | |||||
Deferred income taxes | 538 | (5,030 | ) | ||||
Change in other noncurrent assets | 565 | (1 | ) | ||||
Change in other noncurrent liabilities | (426 | ) | 385 | ||||
Changes in current assets and liabilities | (14,526 | ) | (32,159 | ) | |||
Net cash provided by (used in) operating activities | 39,656 | (5,817 | ) | ||||
Cash flows from investing activities: | |||||||
Purchases of property and equipment | (67,148 | ) | (63,277 | ) | |||
Proceeds from sale of property and equipment | 5,864 | 12,569 | |||||
Proceeds from insurance recoveries | 1,082 | 3,344 | |||||
Net cash used in investing activities | (60,202 | ) | (47,364 | ) | |||
Cash flows from financing activities: | |||||||
Debt repayments | — | (120,000 | ) | ||||
Proceeds from issuance of debt | — | 245,500 | |||||
Debt issuance costs | — | (6,332 | ) | ||||
Proceeds from exercise of options | 11 | — | |||||
Purchase of treasury stock | (549 | ) | (533 | ) | |||
Net cash provided by (used in) financing activities | (538 | ) | 118,635 | ||||
Net decrease in cash, cash equivalents and restricted cash | (21,084 | ) | 65,454 | ||||
Beginning cash, cash equivalents and restricted cash | 75,648 | 10,194 | |||||
Ending cash, cash equivalents and restricted cash | $ | 54,564 | $ | 75,648 | |||
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PIONEER ENERGY SERVICES CORP. AND SUBSIDIARIES
Operating Results by Segment
(in thousands)
(unaudited)
Three months ended | Year ended | ||||||||||||||
December 31, | September 30, | December 31, | |||||||||||||
2018 | 2018 | 2018 | 2017 | ||||||||||||
Revenues: | |||||||||||||||
Domestic drilling | $ | 37,530 | $ | 36,586 | $ | 145,676 | $ | 129,276 | |||||||
International drilling | 21,646 | 23,131 | 84,161 | 41,349 | |||||||||||
Drilling services | 59,176 | 59,717 | 229,837 | 170,625 | |||||||||||
Well servicing | 25,155 | 24,369 | 93,800 | 77,257 | |||||||||||
Wireline services | 44,466 | 52,654 | 215,858 | 163,716 | |||||||||||
Coiled tubing services | 12,708 | 12,592 | 50,602 | 34,857 | |||||||||||
Production services | 82,329 | 89,615 | 360,260 | 275,830 | |||||||||||
Consolidated revenues | $ | 141,505 | $ | 149,332 | $ | 590,097 | $ | 446,455 | |||||||
Operating costs: | |||||||||||||||
Domestic drilling | $ | 22,613 | $ | 21,650 | $ | 86,910 | $ | 83,122 | |||||||
International drilling | 15,036 | 19,013 | 64,074 | 31,994 | |||||||||||
Drilling services | 37,649 | 40,663 | 150,984 | 115,116 | |||||||||||
Well servicing | 18,111 | 17,193 | 67,554 | 56,379 | |||||||||||
Wireline services | 37,295 | 40,840 | 167,337 | 128,137 | |||||||||||
Coiled tubing services | 10,934 | 10,265 | 44,038 | 31,248 | |||||||||||
Production services | 66,340 | 68,298 | 278,929 | 215,764 | |||||||||||
Consolidated operating costs | $ | 103,989 | $ | 108,961 | $ | 429,913 | $ | 330,880 | |||||||
Gross margin: | |||||||||||||||
Domestic drilling | $ | 14,917 | $ | 14,936 | $ | 58,766 | $ | 46,154 | |||||||
International drilling | 6,610 | 4,118 | 20,087 | 9,355 | |||||||||||
Drilling services | 21,527 | 19,054 | 78,853 | 55,509 | |||||||||||
Well servicing | 7,044 | 7,176 | 26,246 | 20,878 | |||||||||||
Wireline services | 7,171 | 11,814 | 48,521 | 35,579 | |||||||||||
Coiled tubing services | 1,774 | 2,327 | 6,564 | 3,609 | |||||||||||
Production services | 15,989 | 21,317 | 81,331 | 60,066 | |||||||||||
Consolidated gross margin | $ | 37,516 | $ | 40,371 | $ | 160,184 | $ | 115,575 | |||||||
Consolidated: | |||||||||||||||
Net loss | $ | (14,487 | ) | $ | (5,233 | ) | $ | (49,011 | ) | $ | (75,118 | ) | |||
Adjusted EBITDA (1) | $ | 20,774 | $ | 28,576 | $ | 89,655 | $ | 49,873 | |||||||
(1)Adjusted EBITDA represents income (loss) before interest expense, income tax (expense) benefit, depreciation and amortization, impairment, and loss on extinguishment of debt. Adjusted EBITDA is a non-GAAP measure that our management uses to facilitate period-to-period comparisons of our core operating performance and to evaluate our long-term financial performance against that of our peers. We believe that this measure is useful to investors and analysts in allowing for greater transparency of our core operating performance and makes it easier to compare our results with those of other companies within our industry. Adjusted EBITDA should not be considered (a) in isolation of, or as a substitute for, net income (loss), (b) as an indication of cash flows from operating activities or (c) as a measure of liquidity. In addition, Adjusted EBITDA does not represent funds available for discretionary use. Adjusted EBITDA may not be comparable to other similarly titled measures reported by other companies. A reconciliation of net loss as reported to adjusted EBITDA is included in the table on page 13.
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PIONEER ENERGY SERVICES CORP. AND SUBSIDIARIES
Operating Statistics
(unaudited)
Three months ended | Year ended | ||||||||||||||
December 31, | September 30, | December 31, | |||||||||||||
2018 | 2018 | 2018 | 2017 | ||||||||||||
Domestic drilling: | |||||||||||||||
Average number of drilling rigs | 16 | 16 | 16 | 16 | |||||||||||
Utilization rate | 99 | % | 99 | % | 99 | % | 95 | % | |||||||
Revenue days | 1,455 | 1,459 | 5,808 | 5,524 | |||||||||||
Average revenues per day | $ | 25,794 | $ | 25,076 | $ | 25,082 | $ | 23,403 | |||||||
Average operating costs per day | 15,542 | 14,839 | 14,964 | 15,047 | |||||||||||
Average margin per day | $ | 10,252 | $ | 10,237 | $ | 10,118 | $ | 8,356 | |||||||
International drilling: | |||||||||||||||
Average number of drilling rigs | 8 | 8 | 8 | 8 | |||||||||||
Utilization rate | 71 | % | 76 | % | 77 | % | 46 | % | |||||||
Revenue days | 525 | 562 | 2,258 | 1,345 | |||||||||||
Average revenues per day | $ | 41,230 | $ | 41,158 | $ | 37,272 | $ | 30,743 | |||||||
Average operating costs per day | 28,640 | 33,831 | 28,376 | 23,787 | |||||||||||
Average margin per day | $ | 12,590 | $ | 7,327 | $ | 8,896 | $ | 6,956 | |||||||
Drilling services business: | |||||||||||||||
Average number of drilling rigs | 24 | 24 | 24 | 24 | |||||||||||
Utilization rate | 90 | % | 92 | % | 92 | % | 78 | % | |||||||
Revenue days | 1,980 | 2,021 | 8,066 | 6,869 | |||||||||||
Average revenues per day | $ | 29,887 | $ | 29,548 | $ | 28,495 | $ | 24,840 | |||||||
Average operating costs per day | 19,015 | 20,120 | 18,719 | 16,759 | |||||||||||
Average margin per day | $ | 10,872 | $ | 9,428 | $ | 9,776 | $ | 8,081 | |||||||
Well servicing: | |||||||||||||||
Average number of rigs | 125 | 125 | 125 | 125 | |||||||||||
Utilization rate | 50 | % | 51 | % | 49 | % | 43 | % | |||||||
Rig hours | 44,051 | 44,155 | 171,851 | 150,240 | |||||||||||
Average revenue per hour | $ | 571 | $ | 552 | $ | 546 | $ | 514 | |||||||
Wireline services: | |||||||||||||||
Average number of units | 105 | 104 | 107 | 115 | |||||||||||
Number of jobs | 2,407 | 2,684 | 10,943 | 11,139 | |||||||||||
Average revenue per job | $ | 18,474 | $ | 19,618 | $ | 19,726 | $ | 14,698 | |||||||
Coiled tubing services: | |||||||||||||||
Average number of units | 8 | 11 | 12 | 16 | |||||||||||
Revenue days | 346 | 362 | 1,472 | 1,529 | |||||||||||
Average revenue per day | $ | 36,728 | $ | 34,785 | $ | 34,376 | $ | 22,797 | |||||||
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PIONEER ENERGY SERVICES CORP. AND SUBSIDIARIES
Reconciliation of Net Loss to Adjusted EBITDA
and Consolidated Gross Margin
(in thousands)
(unaudited)
Three months ended | Year ended | ||||||||||||||
December 31, | September 30, | December 31, | |||||||||||||
2018 | 2018 | 2018 | 2017 | ||||||||||||
Net loss as reported | $ | (14,487 | ) | $ | (5,233 | ) | $ | (49,011 | ) | $ | (75,118 | ) | |||
Depreciation and amortization | 23,019 | 23,501 | 93,554 | 98,777 | |||||||||||
Impairment | 1,815 | 239 | 4,422 | 1,902 | |||||||||||
Interest expense | 9,816 | 9,811 | 38,782 | 27,039 | |||||||||||
Loss on extinguishment of debt | — | — | — | 1,476 | |||||||||||
Income tax expense (benefit) | 611 | 258 | 1,908 | (4,203 | ) | ||||||||||
Adjusted EBITDA(1) | 20,774 | 28,576 | 89,655 | 49,873 | |||||||||||
General and administrative | 16,051 | 14,043 | 74,117 | 69,681 | |||||||||||
Bad debt expense | 582 | 111 | 271 | 53 | |||||||||||
Gain on dispositions of property and equipment, net | (199 | ) | (1,861 | ) | (3,121 | ) | (3,608 | ) | |||||||
Other expense (income) | 308 | (498 | ) | (738 | ) | (424 | ) | ||||||||
Consolidated gross margin | $ | 37,516 | $ | 40,371 | $ | 160,184 | $ | 115,575 | |||||||
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PIONEER ENERGY SERVICES CORP. AND SUBSIDIARIES
Reconciliation of Net Income (Loss) as Reported to Adjusted Net Income (Loss)
and Diluted EPS as Reported to Adjusted (Diluted) EPS
(in thousands, except per share data)
(unaudited)
Three months ended | |||||||
December 31, | September 30, | ||||||
2018 | 2018 | ||||||
Net loss as reported | $ | (14,487 | ) | $ | (5,233 | ) | |
Impairment | 1,815 | 239 | |||||
Tax benefit related to adjustments | (426 | ) | (56 | ) | |||
Valuation allowance adjustments on deferred tax assets | (2,236 | ) | (581 | ) | |||
Adjusted net loss(2) | $ | (13,642 | ) | $ | (5,631 | ) | |
Basic weighted average number of shares outstanding, as reported | 78,136 | 78,136 | |||||
Effect of dilutive securities | — | — | |||||
Diluted weighted average number of shares outstanding, as adjusted | 78,136 | 78,136 | |||||
Adjusted (diluted) EPS(3) | $ | (0.17 | ) | $ | (0.07 | ) | |
Diluted EPS as reported | $ | (0.19 | ) | $ | (0.07 | ) | |
(2)Adjusted net loss represents net loss as reported adjusted to exclude impairments and the related tax benefit and valuation allowance adjustments on deferred tax assets. We believe that adjusted net loss is a useful measure to facilitate period-to-period comparisons of our core operating performance and to evaluate our long-term financial performance against that of our peers, although it is not a measure of financial performance under GAAP. Adjusted net loss may not be comparable to other similarly titled measures reported by other companies. A reconciliation of net loss as reported to adjusted net loss is included in the table above.
(3)Adjusted (diluted) EPS represents adjusted net loss divided by the weighted-average number of shares outstanding during the period, including the effect of dilutive securities, if any. We believe that adjusted (diluted) EPS is a useful measure to facilitate period-to-period comparisons of our core operating performance and to evaluate our long-term financial performance against that of our peers, although it is not a measure of financial performance under GAAP. Adjusted (diluted) EPS may not be comparable to other similarly titled measures reported by other companies. A reconciliation of diluted EPS as reported to adjusted (diluted) EPS is included in the table above.
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PIONEER ENERGY SERVICES CORP. AND SUBSIDIARIES
Equipment Information
As of February 19, 2019
Multi-well, Pad-capable | ||||||||
Drilling Services Business Segments: | AC rigs | SCR rigs | Total | |||||
Domestic drilling | 16 | — | 16 | |||||
International drilling | — | 8 | 8 | |||||
24 | ||||||||
Production Services Business Segments: | 550 HP | 600 HP | Total | |||||
Well servicing rigs, by horsepower (HP) rating | 113 | 12 | 125 | |||||
Total | ||||||||
Wireline services units | 105 | |||||||
Coiled tubing services units | 9 | |||||||
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