Pioneer Energy Services Reports Third Quarter 2014 Results

Oct 28, 2014

SAN ANTONIO, Oct. 28, 2014 /PRNewswire/ -- Pioneer Energy Services (NYSE: PES) today reported financial and operating results for the quarter ended September 30, 2014. Highlights include: 

  • Production Services Segment generated record revenue of $145.2 million in the third quarter, up 10% from the prior quarter.
  • Well servicing rigs achieved a 101% utilization rate and an average hourly rate of $661.
  • Drilling rig utilization was 88% for the quarter and is currently 94%, with 44 of our 58 working rigs, or 76%, under term contracts.
  • Executed two additional multi-year term contracts for two 1,500 horsepower AC drilling rigs for delivery in the second half of 2015.
  • Amended and extended our revolving credit facility to increase borrowing capacity and reduce the interest rate, from which additional borrowings were used to redeem the remaining 9⅞% Senior Notes.
  • Made debt payments of $30 million during the quarter, partially funded by the net proceeds from the sale of our fishing and rental services ("F&R") operations for $16.1 million.

Consolidated Financial Results

Revenues for the third quarter of 2014 were $273.3 million, up 5% from revenues of $259.8 million in the second quarter of 2014 ("the prior quarter") and up 12% from revenues of $244.0 million in the third quarter of 2013 ("the year-earlier quarter"). The increase in revenues in the third quarter was primarily due to strong demand and higher utilization in our Production Services Segment.

Net income for the third quarter was $12.5 million, or $0.19 per diluted share, which includes an after-tax gain of $6.6 million from the sale of our F&R operations. Excluding the gain from the sale of our F&R operations and $0.7 million of impairment losses, Adjusted Diluted EPS(1) was $0.09 per share for the third quarter. This compares to the prior quarter's net loss of $0.3 million, or $0.01 per share, which includes an after-tax loss on extinguishment of debt of $9.3 million. Excluding the loss on extinguishment of debt, prior quarter Adjusted Diluted EPS was $0.14 per share.

Third quarter Adjusted EBITDA(2), which includes the $10.7 million pre-tax gain on the sale of our F&R operations, was $78.1 million, up 12% from $69.7 million in the prior quarter and up 31% from $59.4 million in the year-earlier quarter.

Operating Results

Drilling Services Segment

Revenue for the Drilling Services Segment was $128.1 million in the third quarter, a slight increase over the prior quarter and a 2% decrease from the year-earlier quarter. The sequential improvement was primarily due to an increase in average revenues per day in the U.S., partially offset by lower revenue from our Colombian operations which continued to be negatively impacted by client delays in well site preparation. Also, in the prior quarter, we recorded approximately $2.4 million in non-recurring revenue related to a scope-of-work agreement in Colombia.

Average drilling revenues per day in the third quarter were $25,481, down from $26,058 in the prior quarter and up from $25,325 in the year-earlier quarter. Drilling Services Segment margin(4) per day decreased to $7,810 in the third quarter as compared to $8,946 in the prior quarter. The decreases in both average revenues per day and margin per day were attributable to lower revenues per day in Colombia primarily due to the client delays in preparing well sites, as well as the scope-of-work benefit in the prior quarter. The decreases were partially offset by an increase in average revenues per day in the U.S. with the benefit of additional turnkey work as well as increases in dayrates on select contract renewals.

Currently, 58 rigs are earning revenues, of which 44 rigs, or 76%, are under term contracts. All eight of our drilling rigs in Colombia are currently working under term contracts that extend through the end of 2014.

Production Services Segment

Revenue for the Production Services Segment was $145.2 million in the third quarter, up 10% from the prior quarter and up 29% from the year-earlier quarter due to record revenue generated by all three business lines in the segment. Well servicing pricing was $661 per hour in the third quarter, up from $648 in the prior quarter and up from $628 in the year-earlier quarter. Well servicing rig utilization was 101% in the third quarter, compared to 101% in the prior quarter and up from 90% in the year-earlier quarter due to increased demand and the impact of more 24-hour work. Coiled tubing unit utilization increased to 56% in the third quarter, from 53% in both the prior quarter and year-earlier quarter.

Production Services Segment margin(3) as a percentage of revenue was 38% in the third quarter, flat with the prior quarter and up from 36% in the year-earlier quarter.  In the fourth quarter, we are scheduled to deploy six new well servicing rigs, one new wireline unit and one new coiled tubing unit.

Comments from Our President and CEO 

"Demand for our services was strong during the third quarter, particularly in our Production Services Segment, which generated record revenue," said Wm. Stacy Locke, President and CEO of Pioneer Energy Services. "Wireline and Coiled Tubing Services led the improvement, while demand for our drilling services in the U.S. held steady and achieved modest margin gains. We expect operating results in Colombia to improve in the fourth quarter as all our rigs are now working and well site preparation delays are behind us.

"We continue to secure multi-year contracts for new-build drilling rigs as our clients focus on long-lateral horizontal wells. We now have five new-build 1,500 horsepower AC drilling rigs scheduled to be deployed to U.S. shale plays in 2015. We will continue to monitor market conditions as we balance our plans for further growth versus debt reduction.

"We made debt payments of $30 million in the third quarter and $45 million year to date. In October, we redeemed the remaining $125 million of our 9⅞% Senior Notes primarily using borrowings under our amended revolving credit facility. This completes the redemption of all $425 million of our 9⅞% Senior Notes which significantly reduces our interest expense for the company," continued Locke.

Fourth Quarter Guidance

In the fourth quarter of 2014, drilling rig utilization is expected to average between approximately 89% and 92%, based on a fleet of 62 rigs. Drilling Services Segment margin is expected to be approximately $8,400 to $8,700 per day.

Production Services Segment revenue in the fourth quarter is expected to be down approximately 5% to 7% as compared to the third quarter due to normal seasonality. Production Services Segment margin as a percentage of revenues is expected to be down approximately 1% to 2% as compared to the third quarter.

Liquidity

Working capital at September 30, 2014 was $152.4 million, up from $118.5 million at December 31, 2013. Our cash and cash equivalents were $26.4 million, down from $27.4 million at year-end 2013. 

The decrease in cash and cash equivalents during the nine months ended September 30, 2014 is primarily due to $120.7 million used for purchases of property and equipment and $57.4 million of cash used in our financing activities, which were mostly offset by $154.9 million of cash provided by operating activities, $15.1 million of proceeds from the sale of our F&R operations and $7.2 million of proceeds from the sale of assets.

On September 22, we amended our existing revolving credit facility, which provides for a $350 million, senior secured revolving credit facility. This represents an increase of $100 million in total potential borrowing capacity over the previous facility. The new agreement extends the maturity date to September 22, 2019 and provides a lower interest rate.  After the redemption of the remaining 9⅞% Senior Notes in October, we currently have $160 million outstanding and $14.0 million in committed letters of credit under our amended $350 million revolving credit facility.

Capital Expenditures

Cash capital expenditures in the third quarter were $46.2 million, including capitalized interest. We estimate that our total cash capital expenditures for 2014 will be at the low end of our previous guidance of $185 million to $200 million. The total 2014 capital expenditure budget includes partial payments for five 1,500 horsepower AC drilling rigs, eleven well servicing rigs, six wireline units, four coiled tubing units, upgrades to certain drilling rigs and routine capital expenditures. In addition, the 2014 capital expenditure budget includes down payments for certain equipment that will be delivered in 2015, but requires long lead-time orders.

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 in the conference call, dial (201) 689-8349 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 and will be accessible until November 4. To access the replay, dial (201) 612-7415 and enter the pass code 13592742.

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 Pioneer Energy Services' Web site at least 10 minutes early to register and download any necessary audio software.  A replay will be available shortly after the call. For more information, please contact Donna Washburn at Dennard - Lascar Associates, LLC at (713) 529-6600 or e-mail dwashburn@dennardlascar.com.

About Pioneer

Pioneer Energy Services provides contract land drilling services to independent and major oil and gas operators in Texas, the Mid-Continent, Rocky Mountain and Appalachian regions and internationally in Colombia through its Drilling Services Segment. Pioneer also provides well, wireline, and coiled tubing services to producers in the U.S. Gulf Coast, offshore Gulf of Mexico, Mid-Continent and Rocky Mountain regions through its Production Services Segment.

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 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, decisions about exploration and development projects to be made by oil and gas exploration and production companies, economic cycles and their impact on capital markets and liquidity, the continued demand for drilling services or production services in the geographic areas where we operate, the highly competitive nature of our business, our future financial performance, including availability, terms and deployment of capital, future compliance with covenants under our senior secured revolving credit facility and our senior notes, the supply of marketable drilling rigs, well servicing rigs, coiled tubing and wireline units within the industry, changes in technology and improvements in our competitors' equipment, the continued availability of drilling rig, well servicing rig, coiled tubing and wireline unit components, the continued availability of qualified personnel, the success or failure of any future acquisition, including our ability to finance acquisitions, manage growth and effectively integrate acquisitions, 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, 2013 and in our Quarterly Report on Form 10-Q for the quarterly period ended March 31, 2014, 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. Unpredictable or unknown factors we have not discussed in this news release, in our Annual Report on Form 10-K for the year ended December 31, 2013, or in our Quarterly Reports on Form 10-Q for the quarterly period ended March 31, 2014 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) be aware 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 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 Diluted EPS represents adjusted net income (loss)(5) divided by the weighted-average number of shares outstanding during the period, including the effect of dilutive securities as applicable. We believe that Adjusted Diluted EPS is a useful measure for evaluating our core operating performance, 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.

(2) Adjusted EBITDA is a financial measure that is not in accordance with GAAP and 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. We define Adjusted EBITDA as income (loss) before interest income (expense), taxes, depreciation, amortization, loss on extinguishment of debt and any impairments. We use this measure, together with our GAAP financial metrics, to assess our financial performance and evaluate our overall progress towards meeting our long-term financial objectives. We believe that this non-GAAP financial measure is useful to investors and analysts in allowing for greater transparency of our operating performance and makes it easier to compare our results with those of other companies within our industry. Adjusted EBITDA, as we calculate it, may not be comparable to Adjusted EBITDA measures reported by other companies. A reconciliation of Adjusted EBITDA to net loss as reported is included in the tables to this news release.

(3)   Drilling Services Segment margin represents contract drilling revenues less contract drilling operating costs. Production Services Segment margin represents production services revenue less production services operating costs. We believe that Drilling Services Segment margin and Production Services Segment margin are useful measures for evaluating financial performance, although they are not measures of financial performance under U.S. Generally Accepted Accounting Principles (GAAP). However, Drilling Services Segment margin and Production Services Segment margin are common measures of operating performance used by investors, financial analysts, rating agencies and Pioneer's management. Drilling Services Segment margin and Production Services Segment margin as presented may not be comparable to other similarly titled measures reported by other companies. A reconciliation of Drilling Services Segment margin and Production Services Segment margin to net loss as reported is included in the tables to this news release.

(4)   Drilling Services Segment margin per revenue day represents the Drilling Services Segment's average revenue per revenue day less average operating costs per revenue day.

(5)   Adjusted net income (loss) represents net income (loss) as reported less the loss on debt extinguishment, gain on sale of business and impairment charges and the related tax benefit. We believe that adjusted net income (loss) is a useful measure for evaluating our core operating performance, although it is not a measure of financial performance under GAAP. Adjusted net income (loss) may not be comparable to other similarly titled measures reported by other companies. A reconciliation of Adjusted net income (loss) to net loss as reported is included in the tables to this news release.

Contacts:

Dan Petro, CFA, Director of Corporate Development and Investor Relations

Pioneer Energy Services Corp.

(210) 828-7689

 

Lisa Elliott / lelliott@dennardlascar.com

Anne Pearson / apearson@dennardlascar.com

Dennard - Lascar Associates / (713) 529-6600

- Financial Statements and Operating Information Follow -



PIONEER ENERGY SERVICES CORP. AND SUBSIDIARIES

Condensed Consolidated Statements of Operations

(in thousands, except per share data)

(unaudited)



Three months ended


Nine months ended


September 30,


June 30,


September 30,


2014


2013


2014


2014


2013











Revenues:










Drilling services

$

128,117


$

131,033


$

127,553


$

373,627


$

402,357

Production services

145,150


112,946


132,259


398,486


319,646

Total revenues

273,267


243,979


259,812


772,113


722,003











Costs and expenses:










Drilling services

88,848


89,350


83,762


248,948


267,630

Production services

90,250


72,115


82,505


250,507


203,184

Depreciation and amortization

46,081


47,414


45,791


137,398


141,047

General and administrative

26,613


23,691


25,276


76,372


70,350

Gain on sale of fishing and rental services operations

(10,702)




(10,702)


Bad debt expense

19


35


561


456


453

Impairment charges

678


9,504



678


54,292

Total costs and expenses

241,787


242,109


237,895


703,657


736,956

Income (loss) from operations

31,480


1,870


21,917


68,456


(14,953)











Other (expense) income:










Interest expense

(8,969)


(12,324)


(10,728)


(32,085)


(36,117)

Loss on extinguishment of debt



(14,595)


(22,482)


Other

(131)


610


2,017


4,560


(1,460)

Total other expense

(9,100)


(11,714)


(23,306)


(50,007)


(37,577)











Income (loss) before income taxes

22,380


(9,844)


(1,389)


18,449


(52,530)

Income tax (expense) benefit

(9,927)


3,614


1,070


(8,894)


19,113

Net income (loss)

$

12,453


$

(6,230)


$

(319)


$

9,555


$

(33,417)











Income (loss) per common share:










Basic

$

0.20


$

(0.10)


$

(0.01)


$

0.15


$

(0.54)

Diluted

$

0.19


$

(0.10)


$

(0.01)


$

0.15


$

(0.54)











Weighted-average number of shares outstanding:










Basic

63,451


62,325


62,877


62,960


62,158

Diluted

65,876


62,325


62,877


65,167


62,158



PIONEER ENERGY SERVICES CORP. AND SUBSIDIARIES

Condensed Consolidated Balance Sheets

(in thousands)



September 30,
 2014


December 31,
 2013


(unaudited)


(audited)

ASSETS




Current assets:




Cash and cash equivalents

$

26,439


$

27,385

Receivables, net of allowance for doubtful accounts

208,312


176,360

Deferred income taxes

38,472


13,092

Inventory

14,327


13,232

Prepaid expenses and other current assets

6,283


9,311

Total current assets

293,833


239,380





Net property and equipment

926,391


937,657

Intangible assets, net of accumulated amortization

26,291


32,269

Noncurrent deferred income taxes

3,450


1,156

Other long-term assets

14,792


19,161

Total assets

$

1,264,757


$

1,229,623





LIABILITIES AND SHAREHOLDERS' EQUITY




Current liabilities:




Accounts payable

$

66,168


$

43,718

Current portion of long-term debt

3,672


2,847

Deferred revenues

3,244


699

Accrued expenses

68,395


73,569

Total current liabilities

141,479


120,833





Long-term debt, less current portion

460,060


499,666

Noncurrent deferred income taxes

117,674


84,636

Other long-term liabilities

4,669


6,055

Total liabilities

723,882


711,190

Total shareholders' equity

540,875


518,433

Total liabilities and shareholders' equity

$

1,264,757


$

1,229,623



PIONEER ENERGY SERVICES CORP. AND SUBSIDIARIES

Condensed Consolidated Statements of Cash Flows

(in thousands)

(unaudited)



Nine months ended


September 30,


2014


2013





Cash flows from operating activities:




Net income (loss)

$

9,555


$

(33,417)

Adjustments to reconcile net income (loss) to net cash provided by operating activities:




Depreciation and amortization

137,398


141,047

Allowance for doubtful accounts

408


534

Gain on dispositions of property and equipment

(1,589)


(865)

Stock-based compensation expense

5,761


4,692

Amortization of debt issuance costs, discount and premium

2,193


2,309

Gain on sale of fishing and rental services operations

(10,702)


Loss on extinguishment of debt

22,482


Impairment charges

678


54,292

Deferred income taxes

5,395


(21,153)

Change in other long-term assets

8,247


(5,554)

Change in other long-term liabilities

(1,385)


(1,306)

Changes in current assets and liabilities

(23,511)


(30,504)

Net cash provided by operating activities

154,930


110,075





Cash flows from investing activities:




Purchases of property and equipment

(120,738)


(137,945)

Proceeds from sale of fishing and rental services operations

15,090


Proceeds from sale of property and equipment

7,197


6,898

Net cash used in investing activities

(98,451)


(131,047)





Cash flows from financing activities:




Debt repayments

(360,019)


(25,868)

Proceeds from issuance of debt

320,000


40,000

Debt issuance costs

(9,173)


(13)

Tender premium costs

(15,381)


Proceeds from exercise of options

8,280


833

Purchase of treasury stock

(1,132)


(628)

Net cash provided by (used in) financing activities

(57,425)


14,324





Net decrease in cash and cash equivalents

(946)


(6,648)

Beginning cash and cash equivalents

27,385


23,733

Ending cash and cash equivalents

$

26,439


$

17,085



PIONEER ENERGY SERVICES CORP. AND SUBSIDIARIES

Operating Statistics

(in thousands, except average number of drilling rigs, utilization rate, revenue days and per day information)

(unaudited)



Three months ended


Nine months ended


September 30,


June 30,


September 30,


2014


2013


2014


2014


2013











Drilling Services Segment:










Revenues

$

128,117


$

131,033


$

127,553


$

373,627


$

402,357

Operating costs

88,848


89,350


83,762


248,948


267,630

Drilling Services Segment margin (1)

$

39,269


$

41,683


$

43,791


$

124,679


$

134,727











Average number of drilling rigs

62.0


70.0


62.0


62.0


70.3

Utilization rate

88%


80%


87%


86%


84%

Revenue days

5,028


5,174


4,895


14,554


16,050











Average revenues per day

$

25,481


$

25,325


$

26,058


$

25,672


$

25,069

Average operating costs per day

17,671


17,269


17,112


17,105


16,675

Drilling Services Segment margin per day (2)

$

7,810


$

8,056


$

8,946


$

8,567


$

8,394











Production Services Segment:










Revenues

$

145,150


$

112,946


$

132,259


$

398,486


$

319,646

Operating costs

90,250


72,115


82,505


250,507


203,184

Production Services Segment margin (1)

$

54,900


$

40,831


$

49,754


$

147,979


$

116,462











Combined:










Revenues

$

273,267


$

243,979


$

259,812


$

772,113


$

722,003

Operating Costs

179,098


161,465


166,267


499,455


470,814

Combined margin

$

94,169


$

82,514


$

93,545


$

272,658


$

251,189











Adjusted EBITDA (3)

$

78,108


$

59,398


$

69,725


$

211,092


$

178,926











(1) Drilling Services Segment margin represents contract drilling revenues less contract drilling operating costs. Production Services Segment margin represents production services revenue less production services operating costs. We believe that Drilling Services Segment margin and Production Services Segment margin are useful measures for evaluating financial performance, although they are not measures of financial performance under U.S. Generally Accepted Accounting Principles (GAAP). However, Drilling Services Segment margin and Production Services Segment margin are common measures of operating performance used by investors, financial analysts, rating agencies and Pioneer's management. Drilling Services Segment margin and Production Services Segment margin as presented may not be comparable to other similarly titled measures reported by other companies. A reconciliation of combined Drilling Services Segment margin and Production Services Segment margin to net income (loss) as reported is included in the table on the following page.

(2) Drilling Services Segment margin per revenue day represents the Drilling Services Segment's average revenue per revenue day less average operating costs per revenue day.

(3) Adjusted EBITDA is a financial measure that is not in accordance with GAAP and 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. We define Adjusted EBITDA as income (loss) before interest income (expense), taxes, depreciation, amortization, loss on extinguishment of debt and any impairments. We use this measure, together with our GAAP financial metrics, to assess our financial performance and evaluate our overall progress towards meeting our long-term financial objectives. We believe that this non-GAAP financial measure is useful to investors and analysts in allowing for greater transparency of our operating performance and makes it easier to compare our results with those of other companies within our industry. Adjusted EBITDA, as we calculate it, may not be comparable to Adjusted EBITDA measures reported by other companies. A reconciliation of Adjusted EBITDA to net income (loss) as reported is included in the table on the following page.



PIONEER ENERGY SERVICES CORP. AND SUBSIDIARIES

Reconciliation of Combined Drilling Services and Production Services

Margin and Adjusted EBITDA to Net Income (Loss)

(in thousands)

(unaudited)



Three months ended


Nine months ended


September 30,


June 30,


September 30,


2014


2013


2014


2014


2013











Combined margin

$

94,169


$

82,514


$

93,545


$

272,658


$

251,189











General and administrative

(26,613)


(23,691)


(25,276)


(76,372)


(70,350)

Gain on sale of fishing and rental services operations

10,702




10,702


Bad debt expense

(19)


(35)


(561)


(456)


(453)

Other income (expense)

(131)


610


2,017


4,560


(1,460)

Adjusted EBITDA (3)

78,108


59,398


69,725


211,092


178,926











Depreciation and amortization

(46,081)


(47,414)


(45,791)


(137,398)


(141,047)

Impairment charges

(678)


(9,504)



(678)


(54,292)

Interest expense

(8,969)


(12,324)


(10,728)


(32,085)


(36,117)

Loss on extinguishment of debt



(14,595)


(22,482)


Income tax (expense) benefit

(9,927)


3,614


1,070


(8,894)


19,113

Net income (loss)

$

12,453


$

(6,230)


$

(319)


$

9,555


$

(33,417)



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


September 30,


June 30,


2014


2014





Net income (loss) as reported

$

12,453


$

(319)

Gain on sale of fishing and rental services operations

(10,702)


Loss on extinguishment of debt


14,595

Impairment charges

678


Tax benefit (expense) related to adjustments

3,811


(5,342)

Adjusted net income (4)

6,240


8,934





Basic weighted average number of shares outstanding, as reported

63,451


62,877

Effect of dilutive securities

2,425


2,465

Diluted weighted average number of shares outstanding, as adjusted

65,876


65,342





Adjusted diluted EPS  (5)

$

0.09


$

0.14





Diluted EPS as reported

$

0.19


$

(0.01)

(4) Adjusted net income (loss) represents net income (loss) as reported less the loss on debt extinguishment, gain on sale of business and impairment charges and the related tax benefit. We believe that adjusted net income (loss) is a useful measure for evaluating our core operating performance, although it is not a measure of financial performance under GAAP. Adjusted net income (loss) may not be comparable to other similarly titled measures reported by other companies. A reconciliation of net income (loss) as reported to adjusted net income (loss) is included in the table above.

(5) Adjusted Diluted EPS represents adjusted net income (loss) divided by the weighted-average number of shares outstanding during the period, including the effect of dilutive securities as applicable. We believe that Adjusted Diluted EPS is a useful measure for evaluating our core operating performance, 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.



PIONEER ENERGY SERVICES CORP. AND SUBSIDIARIES

Capital Expenditures

(in thousands)

(unaudited)



Three months ended


Nine months ended


September 30,


June 30,


September 30,


2014


2013


2014


2014


2013

Drilling Services Segment:










Routine and tubulars

$

12,484


$

7,978


$

11,774


$

33,027


$

27,767

Discretionary

3,850


7,181


6,076


19,798


29,244

Fleet additions

11,813


311


3,575


15,541


41,265


28,147


15,470


21,425


68,366


98,276

Production Services Segment:










Routine

3,914


5,941


9,306


18,609


17,917

Discretionary

7,136


3,503


3,148


16,138


17,065

Fleet additions

6,974


852


9,014


17,625


4,687


18,024


10,296


21,468


52,372


39,669

Net cash used for purchases of property and equipment

46,171


25,766


42,893


120,738


137,945

  Net effect of accruals

6,494


1,669


(1,897)


9,840


(35,800)

Total capital expenditures

$

52,665


$

27,435


$

40,996


$

130,578


$

102,145



PIONEER ENERGY SERVICES CORP. AND SUBSIDIARIES

Drilling Rig, Well Servicing Rig, Wireline and Coiled Tubing Unit

Current Information


Drilling Services Segment:

Rig Type




Mechanical


Electric


Total Rigs







Drilling rig horsepower ratings:






    550 to 700 HP

1



1

    750 to 950 HP

4


2


6

    1000 HP

12


9


21

    1200 to 2000 HP

6


28


34

        Total

23


39


62







Drilling rig depth ratings:






    Less than 10,000 feet

3


2


5

    10,000 to 13,900 feet

10


6


16

    14,000 to 25,000 feet

10


31


41

        Total

23


39


62







Production Services Segment:












Well servicing rig horsepower ratings:






    550 HP





103

    600 HP





10

        Total





113







Wireline units





123







Coiled tubing units





16

 

 

SOURCE Pioneer Energy Services


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