Pioneer Energy Services Corp (PES)

Description:

Pioneer Energy Services Corp was incorporated under the laws of the State of Texas in 1979 as the successor to a business that had been operating since 1968. The company provides drilling services and production services to independent and major oil and gas exploration and production companies throughout much of the oil and gas producing regions of the United States and internationally in Colombia. On December 31, 2011, it acquired Go-Coil, LLC ('Go-Coil'), a coiled tubing service company based in Maurice, Louisiana, to complement its existing production services offerings. It currently conducts its operations through two operating segments: its Drilling Services Division and its Production Services Division. Its Drilling Services Division provides contract land drilling services with its fleet of 64 drilling rigs. During 2010 and 2011, it moved drilling rigs into its North Dakota and Appalachia drilling division locations, both of which are shale regions, and in early 2011, it established its West Texas drilling division location where it currently have 18 drilling rigs operating. In September 2011, it evaluated the drilling rigs in its fleet that had remained idle and decided to place six mechanical drilling rigs as held for sale as of September 30, 2011. Four of the held for sale drilling rigs were previously assigned to its Oklahoma drilling division location and the remaining two drilling rigs were previously assigned to its East Texas drilling division location. Sales of all six mechanical drilling rigs were completed by mid November 2011. In addition, it decided to retire another drilling rig from its fleet that was previously assigned to its Utah drilling division location, with most of its components to be used for spare equipment. It recognized an impairment charge of $0.5 million in September 2011 in association with its decision to dispose of these seven drilling rigs. At December 31, 2011, it has 64 drilling rigs in its fleet. It currently have term contracts for ten new-build AC drilling rigs that are fit for purpose for domestic shale plays, five of which it estimate will begin working in the first half of 2012, with the remaining five to begin operating by the end of 2012. As of February 10, 2012, 55 drilling rigs are operating under drilling contracts, 44 of which are under term contracts. It has nine drilling rigs that are idle, three of which are under contract to begin working in the first quarter of 2012. It is actively marketing all its idle drilling rigs. Its Production Services Division provides a range of services to oil and gas exploration and production companies, including well services, wireline, coiled tubing and fishing and rental services. Its production services operations are managed through locations concentrated in the major United States onshore oil and gas producing regions in the Gulf Coast, Mid-Continent, Rocky Mountain and Appalachian states. The primary production services it offers are: Well Services, Wireline Services, Coiled Tubing Services and Fishing and Rental Services. Its operations are subject to stringent laws and regulations relating to containment, disposal and controlling the discharge of hazardous oilfield waste and other non-hazardous waste material into the environment, requiring removal and cleanup under certain circumstances, or otherwise relating to the protection of the environment.