(1)

Adjusted Net Loss represents net loss as reported adjusted to exclude impairment charges and loss on extinguishment of debt, if any, 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, and loss on extinguishment of debt and impairments, if any. 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 adjusted EBITDA to net loss as reported is included in the tables to this news release.

(4)

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. Drilling Services Segment margin and Production Services Segment margin are non-GAAP financial measures which we consider to be important supplemental measures of operating performance. Our management uses these measures to facilitate period-to-period comparisons in operating performance of our reportable segments. We believe that Drilling Services Segment margin and Production Services Segment margin are useful to investors and analysts because they provide a means to evaluate the operating performance of the segments on an ongoing basis using criteria that are used by our internal decision makers. Additionally, the use of these measures highlights operating trends and aids in analytical comparisons. 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 consolidated Drilling Services Segment margin and Production Services Segment margin to net loss as reported is included in the tables to this news release.

This news release also included a forward-looking non-GAAP financial measure, Production Services Segment margin for the second quarter 2017, which as previously described excludes all other costs or income (including but not limited to bad debt (expense) recovery, gain (loss) on dispositions of property and equipment, impairment charges, if any, other income (expense) and income tax expense or benefit). No reconciliation of this forward-looking non-GAAP financial measure was included in the news release due to the variability and difficulty in making an accurate forecast and projection of the excluded information referenced above. Accordingly, we do not believe that reconciling information for such forward-looking non-GAAP financial measure would be meaningful.

(5)

Drilling Services Segment margin per day represents the Drilling Services Segment's average revenue per revenue day less average operating costs per revenue day. This news release also included a forward-looking non-GAAP financial measure, Drilling Services Segment margin per revenue day for the second quarter of 2017, which as previously described, is a calculation of revenues less operating costs, divided by the number of revenue days, and therefore excludes all other costs or income (including but not limited to bad debt (expense) recovery, gain (loss) on dispositions of property and equipment, impairment charges, if any, other income (expense) and income tax expense or benefit). No reconciliation of this forward-looking non-GAAP financial measure was included in the news release due to the variability and difficulty in making an accurate forecast and projection of the excluded information referenced above. Accordingly, we do not believe that reconciling information for such forward-looking non-GAAP financial measure would be meaningful.

Contacts:

Dan Petro, CFA, Treasurer and Director of 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

PIONEER ENERGY SERVICES CORP. AND SUBSIDIARIES

Condensed Consolidated Statements of Operations

(in thousands, except per share data)

(unaudited)

Three months ended

March 31,

December 31,

2017

2016

2016

Revenues:

Drilling services

$

39,016

$

33,184

$

30,610

Production services

56,741

41,768

40,871

Total revenues

95,757

74,952

71,481

Costs and expenses:

Drilling services

27,107

17,440

21,162

Production services

45,641

34,849

35,295

Depreciation and amortization

24,992

29,824

26,903

General and administrative

17,724

16,508

15,106

Bad debt expense (recovery)

(363)

(55)

458

Impairment charges

—

—

8,553

Gain on dispositions of property and equipment

(471)

(600)

(1,472)

Total costs and expenses

114,630

97,966

106,005

Loss from operations

(18,873)

(23,014)

(34,524)

Other expense:

Interest expense, net of interest capitalized

(6,059)

(6,254)

(6,627)

Other

(144)

(389)

(16)

Total other expense

(6,203)

(6,643)

(6,643)

Loss before income taxes

(25,076)

(29,657)

(41,167)

Income tax benefit

(48)

1,958

5,086

Net loss

$

(25,124)

$

(27,699)

$

(36,081)

Loss per common share:

Basic

$

(0.33)

$

(0.43)

$

(0.53)

Diluted

$

(0.33)

$

(0.43)

$

(0.53)

Weighted-average number of shares outstanding:

Basic

77,072

64,576

67,530

Diluted

77,072

64,576

67,530

PIONEER ENERGY SERVICES CORP. AND SUBSIDIARIES

 Condensed Consolidated Balance Sheets

(in thousands)

March 31,
2017

December 31,
2016

(unaudited)

(audited)

ASSETS

Current assets:

Cash and cash equivalents

$

7,290

$

10,194

Receivables, net of allowance for doubtful accounts

80,488

72,123

Inventory

11,571

9,660

Assets held for sale

11,405

15,093

Prepaid expenses and other current assets

5,859

6,926

Total current assets

116,613

113,996

Net property and equipment

590,224

584,080

Other long-term assets

1,491

2,026

Total assets

$

708,328

$

700,102

LIABILITIES AND SHAREHOLDERS' EQUITY

Current liabilities:

Accounts payable

$

22,793

$

19,208

Deferred revenues

581

1,449

Accrued expenses

40,123

45,345

Total current liabilities

63,497

66,002

Long-term debt, less debt issuance costs

373,633

339,473

Deferred income taxes

8,044

8,180

Other long-term liabilities

5,917

5,049

Total liabilities

451,091

418,704

Total shareholders' equity

257,237

281,398

Total liabilities and shareholders' equity

$

708,328

$

700,102

PIONEER ENERGY SERVICES CORP. AND SUBSIDIARIES

 Condensed Consolidated Statements of Cash Flows

(unaudited, in thousands)

Three months ended

March 31,

2017

2016

Cash flows from operating activities:

Net loss

$

(25,124)

$

(27,699)

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

Depreciation and amortization

24,992

29,824

Allowance for doubtful accounts, net of recoveries

(363)

(55)

Gain on dispositions of property and equipment, net

(471)

(600)

Stock-based compensation expense

1,327

1,177

Amortization of debt issuance costs

465

424

Deferred income taxes

(169)

(2,201)

Change in other long-term assets

466

15

Change in other long-term liabilities

868

492

Changes in current assets and liabilities

(23,811)

8,250

Net cash provided by (used in) operating activities

(21,820)

9,627

Cash flows from investing activities:

Purchases of property and equipment

(24,683)

(5,532)

Proceeds from sale of property and equipment

7,148

477

Proceeds from insurance recoveries

3,119

—

Net cash used in investing activities

(14,416)

(5,055)

Cash flows from financing activities:

Debt repayments

(6,305)

—

Proceeds from issuance of debt

40,000

—

Debt issuance costs

—

(20)

Purchase of treasury stock

(363)

(43)

Net cash provided by (used in) financing activities

33,332

Net increase (decrease) in cash and cash equivalents

(2,904)

4,509

Beginning cash and cash equivalents

10,194

14,160

Ending cash and cash equivalents

$

7,290

$

18,669

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

March 31,

December 31,

2017

2016

2016

Drilling Services Segment:

Revenues

$

39,016

$

33,184

$

30,610

Operating costs

27,107

17,440

21,162

  Drilling Services Segment margin⁽¹⁾

$

11,909

$

15,744

$

9,448

Average number of drilling rigs

24.0

31.0

30.7

Utilization rate

72

%

46

%

48

%

Revenue days - working

1,555

1,014

1,333

Revenue days - earning but not working

—

296

—

  Total revenue days

1,555

1,310

1,333

Average revenues per day

$

25,091

$

25,331

$

22,963

Average operating costs per day

17,432

13,313

15,875

  Drilling Services Segment margin per day⁽²⁾

$

7,659

$

12,018

$

7,088

Production Services Segment:

Revenues

$

56,741

$

41,768

$

40,871

Operating costs

45,641

34,849

35,295

  Production Services Segment margin⁽¹⁾

$

11,100

$

6,919

$

5,576

Total:

Revenues

$

95,757

$

74,952

$

71,481

Operating costs

72,748

52,289

56,457

  Consolidated margin

$

23,009

$

22,663

$

15,024

Net loss as reported

$

(25,124)

$

(27,699)

$

(36,081)

Adjusted EBITDA⁽³⁾

$

5,975

$

6,421

$

916

(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. Drilling Services Segment margin and Production Services Segment margin are non-GAAP financial measures which we consider to be important supplemental measures of operating performance. Our management uses these measures to facilitate period-to-period comparisons in operating performance of our reportable segments. We believe that Drilling Services Segment margin and Production Services Segment margin are useful to investors and analysts because they provide a means to evaluate the operating performance of the segments on an ongoing basis using criteria that are used by our internal decision makers. Additionally, the use of these measures highlights operating trends and aids in analytical comparisons. 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 consolidated Drilling Services Segment margin and Production Services Segment margin to net loss as reported is included in the table on the following page.

(2)

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

(3)

Adjusted EBITDA represents income (loss) before interest expense, income tax (expense) benefit, depreciation and amortization, and loss on extinguishment of debt and impairments, if any. 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 adjusted EBITDA to net loss as reported is included in the table on the following page.

PIONEER ENERGY SERVICES CORP. AND SUBSIDIARIES

Reconciliation of Net Loss to Adjusted EBITDA

and Consolidated Margin

(in thousands)

(unaudited)

Three months ended

March 31,

December 31,

2017

2016

2016

Net loss as reported

$

(25,124)

$

(27,699)

$

(36,081)

Depreciation and amortization

24,992

29,824

26,903

Impairment charges

—

—

8,553

Interest expense

6,059

6,254

6,627

Income tax benefit

48

(1,958)

(5,086)

Adjusted EBITDA⁽³⁾

5,975

6,421

916

General and administrative

17,724

16,508

15,106

Bad debt expense (recovery)

(363)

(55)

458

Gain on dispositions of property and equipment

(471)

(600)

(1,472)

Other expense

144

389

16

Consolidated margin

$

23,009

$

22,663

$

15,024

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

March 31,

December 31,

2017

2016

2016

Net loss as reported

$

(25,124)

$

(27,699)

$

(36,081)

Impairment charges

—

—

8,553

Tax benefit related to adjustments

—

—

(3,116)

Valuation allowance adjustments on deferred tax assets

9,754

2,357

7,552

Adjusted net loss⁽⁴⁾

$

(15,370)

$

(25,342)

$

(23,092)

Basic weighted average number of shares outstanding, as reported

77,072

64,576

67,530

Effect of dilutive securities

—

—

—

Diluted weighted average number of shares outstanding, as adjusted

77,072

64,576

67,530

Adjusted (diluted) EPS⁽⁵⁾

$

(0.20)

$

(0.39)

$

(0.34)

Diluted EPS as reported

$

(0.33)

$

(0.43)

$

(0.53)

(4)

Adjusted Net Loss represents net loss as reported adjusted to exclude impairment charges and loss on extinguishment of debt, if any, 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.

(5)

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.

PIONEER ENERGY SERVICES CORP. AND SUBSIDIARIES

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

Current Information

As of May 2, 2017

Drilling Services Segment:

Electric drilling rigs:

U.S. - AC Rigs

16

Colombia - SCR Rigs

8

        Total

24

Production Services Segment:

Well servicing rigs (by horsepower rating):

    550 HP

113

    600 HP

12

        Total

125

Wireline units

114

Coiled tubing units

17