OCTOBER 11, 2001 – SAN ANTONIO, TEXAS – Pioneer Drilling Company (AMEX: PDC) today announced the funding of an $18 million private placement of a 6.75% Convertible Subordinated Debenture. The Debenture, which matures on October 9, 2006, is non-callable, subordinate to the Company’s current outstanding bank debt and convertible into 4.5 million shares of the Company’s common stock at $4.00 per share.

Upon conversion, WEDGE Energy Services, L.L.C., the purchaser of the Debenture, will own 57.5 percent of the Company’s outstanding common stock. The funds will be used to refinance existing bank debt, to complete the purchase of a newly refurbished National 110-UE SCR rig, to complete the construction of the Company's second newly built IRI1700 SCR rig and for general corporate purposes.

“It is gratifying to have the support of a firm such as WEDGE, particularly during a time when the equity markets are performing poorly,” stated Michael E. Little, Pioneer Drilling’s Chairman and Chief Executive Officer. “We truly appreciate WEDGE’s continued confidence in Pioneer Drilling and its interest in the land drilling industry.”

Separately, Pioneer announced that on August 20, 2001, the holders of the Company's Series B 8% Convertible Preferred Stock converted into 1,199,038 shares of the Company's common stock. As a result of this conversion, Pioneer has no preferred stock outstanding. Pioneer Drilling Company provides contract land drilling services to independent and major oil and gas operators drilling wells in central, south and east Texas. The Company’s fleet consists of 18 land drilling rigs that drill in depth ranges between 10,000-18,000 feet. Pioneer
Drilling also has a 1700-hp technologically advanced land rig under construction and a newly acquired National 110UE 1500-hp rig being refurbished.