DECEMBER 16, 2004 – SAN ANTONIO, TEXAS – Pioneer Drilling Company (AMEX: PDC) today announced that it has completed the acquisition of five drilling rigs and related equipment from Allen Drilling Company, based in Woodward, Oklahoma. Mr. Dixon Allen, Allen Drilling’s President for over 20 years, becomes Pioneer’s Oklahoma Division Manager. Through this acquisition, Pioneer has expanded its operations into Oklahoma, where it expects to benefit from Allen Drilling’s long standing and excellent reputation operating in the northern Anadarko shelf.

Pioneer Drilling Company provides land contract drilling services to independent and major oil and gas operators drilling wells in north, east and south Texas, Oklahoma and in the Rocky Mountain region. Pioneer’s fleet consists of 49 land drilling rigs that drill in depth ranges between 6,000-18,000 feet.

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 Pioneer’s expectation to benefit from Allen Drilling’s reputation in Oklahoma. 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.