DECEMBER 1, 2004 – SAN ANTONIO, TEXAS – Pioneer Drilling Company (AMEX: PDC) today announced that it has signed an asset purchase agreement to acquire a fleet of five drilling rigs and related equipment from Allen Drilling Company for $7.2 million in cash. Allen Drilling owns a yard in Woodward, Oklahoma and operates a fleet of five mechanical 550 to 800 horsepower rigs, capable of drilling to depths of 6,000 to 10,000 feet. Historically, Allen Drilling’s rigs primarily drilled wells on a footage basis. Mr. Dixon Allen, President of Allen Drilling, will become Pioneer’s Oklahoma Division Manager. The transaction is expected to close in late December 2004.

Wm. Stacy Locke, Pioneer Drilling’s Chief Executive Officer, stated, “Allen Drilling has operated in the northern Anadarko shelf of Oklahoma since 1976 and has built an excellent reputation and a loyal customer base. This is a great opportunity for Pioneer to establish a presence in this prolific natural gas region and build upon a well run operation. Additionally, we will be pleased to have Dixon Allen join Pioneer. Dixon has been President of Allen Drilling since 1982 and has been largely responsible for Allen Drilling’s success.”

Pioneer Drilling also reported that is has completed the previously announced acquisition of seven drilling rigs and related equipment from Wolverine Drilling, Inc., based in Kenmare, North Dakota. In addition, Pioneer has signed a one year daywork contract for its 1000hp electric rig, which is in the final stages of construction. This rig will be mobilized to Utah in mid-December and will be operated by the North Dakota Division.

Pioneer Drilling Company provides land contract drilling services to independent and major oil and gas operators drilling wells in north, east and south Texas and in the Rocky Mountain region.

Pioneer’s fleet currently consists of 43 land drilling rigs that drill in depth ranges between 6,000-18,000 feet. Upon completing the Allen Drilling acquisition and final construction of the 1000hp electric rig, Pioneer will have a fleet of 49 land drilling rigs.

DRAFT RELEASE V.3.1

CONTACTS:

Wm. Stacy Locke, CEO

Pioneer Drilling Company

210-828-7689

Ken Dennard / ksdennard@drg-e.com

Lisa Elliott / lelliott@drg-e.com

DRG&E / 713-529-6600

This press release contains various forward-looking statements that are based on management’s belief as well as assumptions made by and information currently available to management. The forward-looking statements include statements regarding the anticipated closing of the acquisition of the drilling rigs from Allen Drilling Company and the construction of a 1000hp electric rig. Although the Company believes that the expectations reflected in such forward-looking statements are reasonable, it can give no assurance that such expectations will prove to have been correct. Such statements are subject to certain risks, uncertainties and assumptions, including, among other matters: general and regional economic conditions and industry trends; the continued strength or weakness of the contract land drilling industry in the geographic areas where the Company operates; decisions about onshore exploration and development projects to be made by oil and gas companies; the highly competitive nature of the contract land drilling business; the Company’s future financial performance, including availability, terms and deployment of capital; the continued availability of qualified personnel; and changes in governmental regulations, including those relating to the environment. Should one or more of these risks materialize, or should underlying assumptions prove incorrect, actual results may vary materially from those expected. These risks, as well as others, are discussed in greater detail in the Company’s filings with the Securities and Exchange Commission, including the Company’s annual report on Form 10-K for the fiscal year ended March 31, 2004 and subsequent Form 10-Q’s.