San Antonio, Texas, May 1, 2001 --- South Texas Drilling & Exploration, Inc., San Antonio, today announced that it has purchased a completely refurbished National 110-UE, 1500 HP diesel electric rig from IDM Equipment, Ltd. The rig will be capable of drilling depths of 16,000 feet to 18,000 feet and will cost approximately $5.5 million.

Michael E. Little, Chairman and CEO, stated that the purchase of the National 110-UE continues the Company’s strategy of adding premium class SCR rigs to the fleet. The Company’s existing rig fleet totals 16 rigs capable of drilling wells in the depth range of 8,000 feet to 18,000 feet. The rig fleet will increase to 20 rigs when its four rigs in various stages of refurbishment or construction are completed. The Company’s next rig in the field will be its newly acquired Cabot 750. This rig, scheduled for operation in late May, will be on a six-month contract with EOG Resources, Inc. The Company’s newly built IRI 1700E, scheduled for operation in June, will be on a one-year contract for Pogo Producing Company. The National 110-UE and a second newly built IRI 1700E rig are scheduled for operation in September.

This press release contains forward-looking statements including forward-looking statements regarding the operability and utilization of the Company's drilling rigs, the drilling requirements of the Company's customers, and the Company's ability to achieve its schedule of operations. Actual results could differ materially from those projected in the forward-looking statements. Factors that could cause actual results to differ include a change in the drilling requirements of the Company's customers, scheduling problems with the Company's vendors that disrupt the ability of the Company to utilize its new drilling rigs in the time frame stated in the forward looking statements, a change in the natural gas or oil markets that causes demand for the Company's drilling services to decline, and increased competition from other drilling services companies.

The Company undertakes no obligation to publicly release the result of any revisions to these forward-looking statements, which may be made to reflect events or circumstances after the date hereof or to reflect the occurrence of unanticipated events.

South Texas Drilling & Exploration, Inc. provides land contract drilling services under the name Pioneer Drilling Co., Ltd. to operators drilling wells along the Texas gulf coast and in east Texas. The Company’s common stock trades on The American Stock Exchange under the symbol PDC.