SAN ANTONIO, July 30, 2015
/PRNewswire/ -- Pioneer Energy Services (NYSE: PES) today
reported financial and operating results for the quarter ended
June 30, 2015. Notable items for the second quarter and recent
developments include:
- Well servicing rig utilization was 73% with average pricing of
$595 per hour.
- Drilling utilization in the second quarter was 63% based on an
average fleet of 37 rigs.
- Year-to-date sold 27 mechanical and lower horsepower electric
drilling rigs for net proceeds of $33.4
million and have one additional rig designated as
held-for-sale.
- Mobilizing the second of five new-build 1,500 horsepower AC
drilling rigs scheduled to be delivered in 2015.
- Currently have 17 rigs earning under contract, which includes
six rigs earning but not working.
Consolidated Financial Results
Revenues for the second quarter of 2015 were $135.0 million, down 30% from revenues of
$193.8 million in the first quarter
of 2015 ("the prior quarter") and down 48% from revenues of
$259.8 million in the second quarter
of 2014 ("the year-earlier quarter"). The decline from the prior
and year-earlier quarters was due to reduced activity and pricing
as a result of lower oil and gas prices.
Net loss for the second quarter of 2015 was $77.3 million, or $1.20 per share, compared with net loss of
$12.0 million, or $0.19 per share, in the prior quarter and a net
loss of $0.3 million, or $0.01 per share, in the year-earlier quarter.
Excluding the $66.3 million impact of
impairment charges, net of taxes and valuation allowances,
recognized in the second quarter, primarily for the reduction of
carrying values of assets associated with our Colombian operations
and six of our non-AC electric drilling rigs in our domestic fleet
that are not pad-capable, our Adjusted Net Loss(1) was
$11.0 million and Adjusted
EPS(2) was a loss of $0.17
per share.
Second quarter Adjusted EBITDA(3), which includes the
gain on disposal of assets of $4.4
million, was $35.2 million,
down 4% from $36.8 million in the
prior quarter and down 50% from $69.7
million in the year-earlier quarter.
Operating Results
Drilling Services Segment
In response to the significant decline in oil prices during
recent months, term contracts for 16 of our drilling rigs have been
early terminated, resulting in approximately $53.0 million of early termination revenues.
Revenues derived from these early terminations are deferred and
recognized over the remainder of the original term of the drilling
contracts. We recognized $11.3
million and $16.0 million of
revenue for early termination payments during the first and second
quarters of 2015, respectively, and $0.3
million in the fourth quarter of 2014.
Revenue for the Drilling Services Segment was $58.6 million in the second quarter, a 40%
decrease from the prior quarter and a 54% decrease from the
year-earlier quarter.
Average drilling revenues per day were $27,596, down from $28,468 in the prior quarter and up from
$26,058 in the year-earlier quarter.
Drilling Services Segment margin(4) per
day(5), which excludes the gain on sale of assets,
increased to $12,132 in the second
quarter, as compared to $10,448 in
the prior quarter and $8,893 in the
year-earlier quarter. The increase in average margin per day in the
second quarter was primarily attributable to rigs earning early
termination revenue but not working and the removal of 28 lower
horsepower electric and mechanical drilling rigs from our fleet
that typically earned a lower margin per day.
As of June 30, 2015, we had 35 actively marketed drilling
rigs in our fleet. We currently have 17 drilling rigs earning
revenues under drilling contracts, of which 13 rigs, or 76%, are
earning under term contracts. Six of these 13 rigs are earning
early termination revenues.
Our eight drilling rigs in Colombia are currently idle; however, we have
been awarded a three-year term contract for a 1,500 horsepower
pad-capable rig that we anticipate will begin operating in
August 2015. In addition, we are in
negotiations to put one to two other rigs back to work within the
next 90 days and are actively marketing the remainder of the rigs
to various operators in Colombia.
In April 2015, we deployed one
new-build 1,500 horsepower AC drilling rig to the Eagle Ford and we
began to mobilize another new-build drilling rig in July 2015 to the Permian, both under multi-year
term contracts. We expect to deploy two additional new-build rigs
to the Permian in the third quarter and the final rig in the fourth
quarter. Two of the remaining new-build drilling rigs to be
delivered are under multi-year term contracts. The multi-year
contract that was initially assigned to the fifth new-build
drilling rig has been transferred to an existing AC rig in
North Dakota that has a contract
expiring in November 2015, thereby
allowing us to market the fifth new-build rig to a new client, most
likely in the Eagle Ford or Permian.
Production Services Segment
Revenue for the Production Services Segment was $76.5 million in the second quarter, down 20%
from the prior quarter and down 42% from the year-earlier quarter
due to decreased activity and pricing for our services. Production
Services Segment margin(4) as a percentage of revenue
was 31% in the second quarter, up from 28% in the prior quarter and
down from 38% in the year-earlier quarter. Margin is up as compared
to the prior quarter due to actions taken in the first and second
quarters of 2015 to aggressively realign and scale our cost
structure. Well servicing average pricing was $595 per hour in the second quarter, down from
$619 in the prior quarter and
$648 in the year-earlier quarter.
Well servicing rig utilization was 73% in the second quarter, down
from 79% in the prior quarter and 101% in the year-earlier quarter.
Coiled tubing utilization was 24% in the second quarter, down from
33% in the prior quarter and 53% in the year-earlier quarter.
Comments from Our President and CEO
"We continue to proactively respond to the challenging market
conditions by closely managing our costs and positioning the
Company to be scaled properly with the right equipment in the most
active basins," said Wm. Stacy
Locke, President and CEO of Pioneer Energy Services. "With
the sale of our lower-margin and less capable drilling rigs, we now
have a leaner operation with higher quality, more competitive
equipment that is ideal for the future of the industry.
"The overall quality of our drilling fleet will be further
enhanced with the addition of the new-build drilling rigs being
deployed in 2015. With these latest additions, almost all of our
rigs will be capable of higher margin horizontal drilling.
"In Colombia we are working hard to secure work for our eight
rigs that are currently idle and are delivering on our goal of
diversifying our client base. We are also evaluating reducing our
footprint in Colombia to four or
five 1,500 horsepower pad-capable rigs by selling three to four
rigs and redeploying the proceeds to our operations in the U.S.
"Our rapid cost reductions in our Production Services Segment
has resulted in an improved margin percentage in the second quarter
compared to the prior quarter. We have a strong and competitive
well servicing division that we believe will remain resilient
through this cycle. While all businesses have been negatively
impacted, well servicing has been the most resilient, given its
greater exposure to maintenance work and its long-standing
relationship with premium clients that have remained active during
this down cycle. We plan to closely monitor conditions and continue
to respond as needed," Mr. Locke said.
Third Quarter Guidance
In the third quarter of 2015, drilling rig utilization is
estimated to average 46% to 50%. Drilling Services Segment margin
is estimated to be approximately $12,000 to
$12,500 per day, which includes recognition of $11.7 million of revenues from rigs earning early
termination revenue but not working. Excluding early termination
revenue, we estimate Drilling Services Segment margin to be
$8,000 to $8,500 per day in the third
quarter.
Production Services Segment revenue in the third quarter is
estimated to be down 12% to 16% compared to the second quarter.
Production Services Segment margin is estimated to be 27% to 29% of
revenues in the third quarter.
Liquidity
Working capital at June 30, 2015 was $61.8 million,
down from $121.9 million at
December 31, 2014. Our cash and cash equivalents were
$62.5 million, up from $34.9 million at year-end 2014.
The increase in cash and cash equivalents during the six months
ended June 30, 2015 is primarily due to $121.8 million of cash provided by operating
activities, which includes early termination payments made on
certain drilling contracts, and $34.5
million of proceeds from the sale of assets, partially
offset by $84.0 million used for
purchases of property and equipment and $45.0 million used for debt repayment. We
currently have $110 million
outstanding and $21.3 million in
committed letters of credit under our $350
million revolving credit facility.
Capital Expenditures
Cash capital expenditures in the second quarter were
$38.4 million, including capitalized
interest. We now estimate that our total cash capital expenditures
for 2015 will be $160 million to $170
million. The total 2015 capital expenditure budget includes
partial payments for five 1,500 horsepower AC drilling rigs, nine
well servicing rigs, eight wireline units, routine capital
expenditures and certain drilling equipment which was ordered in
2014 but requires a long lead-time for delivery.
Conference Call
Pioneer Energy Services' management team will hold a conference
call today at 11:00 a.m. Eastern Time
(10:00 a.m. Central Time), to discuss
these results. To participate in the conference call, dial (412)
902-0003 approximately 10 minutes prior to the call and ask for the
Pioneer Energy Services conference call. A telephone replay will be
available after the call and will be accessible until
August 6. To access the replay, dial (201) 612-7415 and enter
the pass code 13612509.
The conference call will also be webcast on the Internet and
accessible from Pioneer Energy Services' Web site at
www.pioneeres.com. To listen to the live call, visit Pioneer Energy
Services' Web site at least 10 minutes early to register and
download any necessary audio software. A replay will be
available shortly after the call. For more information, please
contact Donna Washburn at Dennard ▪
Lascar Associates, LLC at (713) 529-6600 or e-mail
dwashburn@dennardlascar.com.
About Pioneer
Pioneer Energy Services provides contract land drilling services
to independent and large oil and gas operators in Texas, the Mid-Continent and Appalachian
regions and internationally in Colombia through its Drilling Services
Segment. Pioneer also provides well, wireline, and coiled tubing
services to producers in the U.S. Gulf Coast, offshore Gulf of Mexico, Mid-Continent and Rocky
Mountain regions through its Production Services Segment.
Cautionary Statement Regarding Forward-Looking
Statements, Non-GAAP Financial Measures and
Reconciliations
Statements we make in this news release that
express a belief, expectation or intention, as well as those that
are not historical fact, are forward-looking statements that are
subject to risks, uncertainties and assumptions. Our actual
results, performance or achievements, or industry results, could
differ materially from those we express in the following discussion
as a result of a variety of factors, including general economic and
business conditions and industry trends, levels and volatility of
oil and gas prices, the continued demand for drilling services or
production services in the geographic areas where we operate,
decisions about exploration and development projects to be made by
oil and gas exploration and production companies, the highly
competitive nature of our business, technological advancements and
trends in our industry and improvements in our competitors'
equipment, the loss of one or more of our major clients or a
decrease in their demand for our services, future compliance with
covenants under our senior secured revolving credit facility and
our senior notes, operating hazards inherent in our operations, the
supply of marketable drilling rigs, well servicing rigs, coiled
tubing and wireline units within the industry, the continued
availability of drilling rig, well servicing rig, coiled tubing and
wireline unit components, the continued availability of qualified
personnel, the success or failure of our acquisition strategy,
including our ability to finance acquisitions, manage growth and
effectively integrate acquisitions, the political, economic,
regulatory and other uncertainties encountered by our operations,
and changes in, or our failure or inability to comply with,
governmental regulations, including those relating to the
environment. We have discussed many of these factors in more detail
in our Annual Report on Form 10-K for the year ended December 31, 2014. These factors are not
necessarily all the important factors that could affect us.
Unpredictable or unknown factors we have not discussed in this news
release or in our Annual Report on Form 10-K for the year ended
December 31, 2014 could also have
material adverse effects on actual results of matters that are the
subject of our forward-looking statements. All forward-looking
statements speak only as of the date on which they are made and we
undertake no obligation to publicly update or revise any
forward-looking statements whether as a result of new information,
future events or otherwise. We advise our shareholders that they
should (1) be aware that important factors not referred to
above could affect the accuracy of our forward-looking statements
and (2) use caution and common sense when considering our
forward-looking statements.
This news release contains non-GAAP financial measures as
defined by SEC Regulation G. A reconciliation of each such measure
to its most directly comparable U.S. Generally Accepted Accounting
Principles (GAAP) financial measure, together with an explanation
of why management believes that these non-GAAP financial measures
provide useful information to investors, is provided in the
following tables.
|
|
|
|
|
|
|
(1)
|
Adjusted net
income (loss) represents net income (loss) as reported adjusted to
exclude the impairment charges, loss on debt extinguishment and the
related tax benefit, net of valuation allowances. We believe that
adjusted net income (loss) is a useful measure for evaluating our
core operating performance, although it is not a measure of
financial performance under GAAP. Adjusted net income (loss) may
not be comparable to other similarly titled measures reported by
other companies. A reconciliation of net income (loss) as reported
to adjusted net income (loss) is included in the tables to this
news release.
|
|
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(2)
|
Adjusted (diluted)
EPS represents adjusted net income (loss) divided by the
weighted-average number of shares outstanding during the period,
including the effect of dilutive securities as applicable. We
believe that adjusted (diluted) EPS is a useful measure for
evaluating our core operating performance, 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.
|
|
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|
(3)
|
Adjusted EBITDA
represents income (loss) before interest expense, income tax
(expense) benefit, depreciation and amortization, loss on
extinguishment of debt and impairments. We use this non-GAAP
measure, together with our GAAP financial metrics, to assess our
financial performance and evaluate our overall progress towards
meeting our long-term financial objectives. We believe that this
measure is useful to investors and analysts in allowing for greater
transparency of our 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 income (loss) as reported is included in the tables
to this news release.
|
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(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. We believe that Drilling Services Segment margin
and Production Services Segment margin are useful measures for
evaluating financial performance, although they are not measures of
financial performance under GAAP. However, Drilling Services
Segment margin and Production Services Segment margin are common
measures of operating performance used by investors, financial
analysts, rating agencies and Pioneer Energy Services Corp.'s
management. 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 combined Drilling Services Segment margin and
Production Services Segment margin to net income (loss) as reported
is included in the tables to this news release.
|
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(5)
|
Drilling Services
Segment margin per day represents the Drilling Services Segment's
average revenue per revenue day less average operating cost per
revenue day.
|
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Contacts:
|
Dan Petro, CFA,
Director of Corporate Development and 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
|
- Financial
Statements and Operating Information Follow -
|
PIONEER ENERGY
SERVICES CORP. AND SUBSIDIARIES
Condensed Consolidated
Statements of Operations
(in thousands, except per share
data)
(unaudited)
|
|
|
|
|
|
Three months
ended
|
|
Six months
ended
|
|
June
30,
|
|
March
31,
|
|
June
30,
|
|
2015
|
|
2014
|
|
2015
|
|
2015
|
|
2014
|
|
|
|
|
|
|
|
|
|
|
|
Revenues:
|
|
|
|
|
|
|
|
|
|
|
Drilling
services
|
$
|
58,559
|
|
|
$
|
127,553
|
|
|
$
|
98,415
|
|
|
$
|
156,974
|
|
|
$
|
245,510
|
|
|
Production services
|
76,452
|
|
|
132,259
|
|
|
95,399
|
|
|
171,851
|
|
|
253,336
|
|
|
Total
revenues
|
135,011
|
|
|
259,812
|
|
|
193,814
|
|
|
328,825
|
|
|
498,846
|
|
|
|
|
|
|
|
|
|
|
|
|
Costs and
expenses:
|
|
|
|
|
|
|
|
|
|
|
Drilling
services
|
32,815
|
|
|
84,022
|
|
|
62,296
|
|
|
95,111
|
|
|
161,941
|
|
|
Production services
|
53,106
|
|
|
82,576
|
|
|
68,768
|
|
|
121,874
|
|
|
160,147
|
|
|
Depreciation and amortization
|
38,489
|
|
|
45,791
|
|
|
41,782
|
|
|
80,271
|
|
|
91,317
|
|
|
General
and administrative
|
18,363
|
|
|
25,276
|
|
|
21,860
|
|
|
40,223
|
|
|
49,759
|
|
|
Bad debt
expense
|
394
|
|
|
561
|
|
|
319
|
|
|
713
|
|
|
437
|
|
|
Impairment charges
|
71,329
|
|
|
—
|
|
|
5,990
|
|
|
77,319
|
|
|
—
|
|
|
Loss
(gain) on dispositions of property and equipment
|
(4,377)
|
|
|
(331)
|
|
|
1,133
|
|
|
(3,244)
|
|
|
(1,731)
|
|
|
Gain on
litigation
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(2,876)
|
|
|
Total
costs and expenses
|
210,119
|
|
|
237,895
|
|
|
202,148
|
|
|
412,267
|
|
|
458,994
|
|
|
Income (loss) from
operations
|
(75,108)
|
|
|
21,917
|
|
|
(8,334)
|
|
|
(83,442)
|
|
|
39,852
|
|
|
|
|
|
|
|
|
|
|
|
|
Other income
(expense):
|
|
|
|
|
|
|
|
|
|
|
Interest
expense, net of interest capitalized
|
(5,245)
|
|
|
(10,728)
|
|
|
(5,455)
|
|
|
(10,700)
|
|
|
(23,116)
|
|
|
Loss on
extinguishment of debt
|
—
|
|
|
(14,595)
|
|
|
—
|
|
|
—
|
|
|
(22,482)
|
|
|
Other
|
486
|
|
|
2,017
|
|
|
(2,680)
|
|
|
(2,194)
|
|
|
1,815
|
|
|
Total
other expense
|
(4,759)
|
|
|
(23,306)
|
|
|
(8,135)
|
|
|
(12,894)
|
|
|
(43,783)
|
|
|
|
|
|
|
|
|
|
|
|
|
Loss before income
taxes
|
(79,867)
|
|
|
(1,389)
|
|
|
(16,469)
|
|
|
(96,336)
|
|
|
(3,931)
|
|
|
Income tax
benefit
|
2,586
|
|
|
1,070
|
|
|
4,450
|
|
|
7,036
|
|
|
1,033
|
|
|
Net loss
|
$
|
(77,281)
|
|
|
$
|
(319)
|
|
|
$
|
(12,019)
|
|
|
$
|
(89,300)
|
|
|
$
|
(2,898)
|
|
|
|
|
|
|
|
|
|
|
|
|
Loss per common
share:
|
|
|
|
|
|
|
|
|
|
|
Basic
|
$
|
(1.20)
|
|
|
$
|
(0.01)
|
|
|
$
|
(0.19)
|
|
|
$
|
(1.39)
|
|
|
$
|
(0.05)
|
|
|
Diluted
|
$
|
(1.20)
|
|
|
$
|
(0.01)
|
|
|
$
|
(0.19)
|
|
|
$
|
(1.39)
|
|
|
$
|
(0.05)
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted-average
number of shares outstanding:
|
|
|
|
|
|
|
|
|
|
|
Basic
|
64,342
|
|
|
62,877
|
|
|
63,991
|
|
|
64,168
|
|
|
62,710
|
|
|
Diluted
|
64,342
|
|
|
62,877
|
|
|
63,991
|
|
|
64,168
|
|
|
62,710
|
|
|
PIONEER ENERGY
SERVICES CORP. AND SUBSIDIARIES
Condensed Consolidated
Balance Sheets
(in thousands)
|
|
|
|
|
|
June 30,
2015
|
|
December 31,
2014
|
|
(unaudited)
|
|
(audited)
|
|
ASSETS
|
|
|
|
|
Current
assets:
|
|
|
|
|
Cash and cash
equivalents
|
$
|
62,468
|
|
|
$
|
34,924
|
|
|
Receivables, net of
allowance for doubtful accounts
|
103,238
|
|
|
190,201
|
|
|
Deferred income
taxes
|
5,996
|
|
|
10,998
|
|
|
Inventory
|
9,528
|
|
|
14,117
|
|
|
Assets held for
sale
|
4,056
|
|
|
9,909
|
|
|
Prepaid expenses and
other current assets
|
7,679
|
|
|
8,925
|
|
|
Total current
assets
|
192,965
|
|
|
269,074
|
|
|
|
|
|
|
Net property and
equipment
|
781,091
|
|
|
856,541
|
|
|
Intangible assets,
net of accumulated amortization
|
20,253
|
|
|
24,223
|
|
|
Noncurrent deferred
income taxes
|
—
|
|
|
2,753
|
|
|
Other long-term
assets
|
10,588
|
|
|
18,998
|
|
|
Total
assets
|
$
|
1,004,897
|
|
|
$
|
1,171,589
|
|
|
|
|
|
|
LIABILITIES AND
SHAREHOLDERS' EQUITY
|
|
|
|
|
Current
liabilities:
|
|
|
|
|
Accounts
payable
|
$
|
49,302
|
|
|
$
|
64,305
|
|
|
Current portion of
long-term debt
|
—
|
|
|
27
|
|
|
Deferred
revenues
|
26,113
|
|
|
3,315
|
|
|
Accrued
expenses
|
55,783
|
|
|
79,545
|
|
|
Total current
liabilities
|
131,198
|
|
|
147,192
|
|
|
|
|
|
|
Long-term debt, less
current portion
|
410,000
|
|
|
455,053
|
|
|
Noncurrent deferred
income taxes
|
54,556
|
|
|
69,578
|
|
|
Other long-term
liabilities
|
3,097
|
|
|
4,702
|
|
|
Total
liabilities
|
598,851
|
|
|
676,525
|
|
|
Total shareholders'
equity
|
406,046
|
|
|
495,064
|
|
|
Total liabilities and
shareholders' equity
|
$
|
1,004,897
|
|
|
$
|
1,171,589
|
|
|
PIONEER ENERGY
SERVICES CORP. AND SUBSIDIARIES
Condensed Consolidated
Statements of Cash Flows
(in thousands)
(unaudited)
|
|
|
|
Six months
ended
|
|
June
30,
|
|
2015
|
|
2014
|
|
|
|
|
|
Cash flows from
operating activities:
|
|
|
|
|
Net loss
|
$
|
(89,300)
|
|
|
$
|
(2,898)
|
|
|
Adjustments to
reconcile net loss to net cash provided by operating
activities:
|
|
|
|
|
Depreciation and
amortization
|
80,271
|
|
|
91,317
|
|
|
Allowance for
doubtful accounts
|
713
|
|
|
396
|
|
|
Gain on dispositions
of property and equipment
|
(3,244)
|
|
|
(1,731)
|
|
|
Stock-based
compensation expense
|
1,240
|
|
|
3,827
|
|
|
Amortization of debt
issuance costs, discount and premium
|
827
|
|
|
1,504
|
|
|
Loss on
extinguishment of debt
|
—
|
|
|
22,482
|
|
|
Impairment
charges
|
77,319
|
|
|
—
|
|
|
Deferred income
taxes
|
(8,267)
|
|
|
(3,762)
|
|
|
Change in other
long-term assets
|
1,018
|
|
|
4,448
|
|
|
Change in other
long-term liabilities
|
(1,606)
|
|
|
(1,284)
|
|
|
Changes in current
assets and liabilities
|
62,800
|
|
|
(18,812)
|
|
|
Net cash provided by
operating activities
|
121,771
|
|
|
95,487
|
|
|
|
|
|
|
Cash flows from
investing activities:
|
|
|
|
|
Purchases of property
and equipment
|
(84,027)
|
|
|
(74,567)
|
|
|
Proceeds from sale of
property and equipment
|
34,538
|
|
|
6,538
|
|
|
Proceeds from
insurance recoveries
|
227
|
|
|
—
|
|
|
Net cash used in
investing activities
|
(49,262)
|
|
|
(68,029)
|
|
|
|
|
|
|
Cash flows from
financing activities:
|
|
|
|
|
Debt
repayments
|
(45,002)
|
|
|
(330,013)
|
|
|
Proceeds from
issuance of debt
|
—
|
|
|
320,000
|
|
|
Debt issuance
costs
|
(5)
|
|
|
(6,187)
|
|
|
Tender premium
costs
|
—
|
|
|
(15,381)
|
|
|
Proceeds from
exercise of options
|
753
|
|
|
1,581
|
|
|
Purchase of treasury
stock
|
(711)
|
|
|
(1,132)
|
|
|
Net cash used in
financing activities
|
(44,965)
|
|
|
(31,132)
|
|
|
|
|
|
|
Net increase
(decrease) in cash and cash equivalents
|
27,544
|
|
|
(3,674)
|
|
|
Beginning cash and
cash equivalents
|
34,924
|
|
|
27,385
|
|
|
Ending cash and cash
equivalents
|
$
|
62,468
|
|
|
$
|
23,711
|
|
|
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
|
|
Six months
ended
|
|
June
30,
|
|
March
31,
|
|
June
30,
|
|
2015
|
|
2014
|
|
2015
|
|
2015
|
|
2014
|
|
|
|
|
|
|
|
|
|
|
|
Drilling Services
Segment:
|
|
|
|
|
|
|
|
|
|
|
Revenues
|
$
|
58,559
|
|
|
$
|
127,553
|
|
|
$
|
98,415
|
|
|
$
|
156,974
|
|
|
$
|
245,510
|
|
|
Operating
costs
|
32,815
|
|
|
84,022
|
|
|
62,296
|
|
|
95,111
|
|
|
161,941
|
|
|
Drilling
Services Segment margin(1)
|
$
|
25,744
|
|
|
$
|
43,531
|
|
|
$
|
36,119
|
|
|
$
|
61,863
|
|
|
$
|
83,569
|
|
|
|
|
|
|
|
|
|
|
|
|
Average number
of drilling rigs
|
37.0
|
|
|
62.0
|
|
|
46.2
|
|
|
41.6
|
|
|
62.0
|
|
|
Utilization
rate
|
63
|
%
|
|
87
|
%
|
|
83
|
%
|
|
74
|
%
|
|
85
|
%
|
|
|
|
|
|
|
|
|
|
|
|
Revenue
days - working
|
1,393
|
|
|
4,895
|
|
|
3,004
|
|
|
4,397
|
|
|
9,526
|
|
|
Revenue
days - earning but not working
|
729
|
|
|
—
|
|
|
453
|
|
|
1,182
|
|
|
—
|
|
|
Total revenue
days
|
2,122
|
|
|
4,895
|
|
|
3,457
|
|
|
5,579
|
|
|
9,526
|
|
|
|
|
|
|
|
|
|
|
|
|
Average
revenues per day
|
$
|
27,596
|
|
|
$
|
26,058
|
|
|
$
|
28,468
|
|
|
$
|
28,137
|
|
|
$
|
25,773
|
|
|
Average
operating costs per day
|
15,464
|
|
|
17,165
|
|
|
18,020
|
|
|
17,048
|
|
|
17,000
|
|
|
Drilling
Services Segment margin per day(2)
|
$
|
12,132
|
|
|
$
|
8,893
|
|
|
$
|
10,448
|
|
|
$
|
11,089
|
|
|
$
|
8,773
|
|
|
|
|
|
|
|
|
|
|
|
|
Production
Services Segment:
|
|
|
|
|
|
|
|
|
|
|
Revenues
|
$
|
76,452
|
|
|
$
|
132,259
|
|
|
$
|
95,399
|
|
|
$
|
171,851
|
|
|
$
|
253,336
|
|
|
Operating
costs
|
53,106
|
|
|
82,576
|
|
|
68,768
|
|
|
121,874
|
|
|
160,147
|
|
|
Production
Services Segment margin(1)
|
$
|
23,346
|
|
|
$
|
49,683
|
|
|
$
|
26,631
|
|
|
$
|
49,977
|
|
|
$
|
93,189
|
|
|
|
|
|
|
|
|
|
|
|
|
Combined:
|
|
|
|
|
|
|
|
|
|
|
Revenues
|
$
|
135,011
|
|
|
$
|
259,812
|
|
|
$
|
193,814
|
|
|
$
|
328,825
|
|
|
$
|
498,846
|
|
|
Operating
costs
|
85,921
|
|
|
166,598
|
|
|
131,064
|
|
|
216,985
|
|
|
322,088
|
|
|
Combined
margin
|
$
|
49,090
|
|
|
$
|
93,214
|
|
|
$
|
62,750
|
|
|
$
|
111,840
|
|
|
$
|
176,758
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted
EBITDA(3)
|
$
|
35,196
|
|
|
$
|
69,725
|
|
|
$
|
36,758
|
|
|
$
|
71,954
|
|
|
$
|
132,984
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(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. We believe that Drilling Services Segment
margin and Production Services Segment margin are useful measures
for evaluating financial performance, although they are not
measures of financial performance under GAAP. However, Drilling
Services Segment margin and Production Services Segment margin are
common measures of operating performance used by investors,
financial analysts, rating agencies and Pioneer Energy Services
Corp.'s management. 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 combined Drilling Services Segment margin and
Production Services Segment margin to net income (loss) as reported
is included in the table on the following page.
|
|
|
|
(2) Drilling
Services Segment margin per revenue 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, loss on
extinguishment of debt and impairments. We use this non-GAAP
measure, together with our GAAP financial metrics, to assess our
financial performance and evaluate our overall progress towards
meeting our long-term financial objectives. We believe that this
measure is useful to investors and analysts in allowing for greater
transparency of our 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 income (loss) as reported is included in the table on the
following page.
|
|
PIONEER ENERGY
SERVICES CORP. AND SUBSIDIARIES
Reconciliation of
Combined Drilling Services and Production Services
Margin
and Adjusted EBITDA to Net Income (Loss)
(in thousands)
(unaudited)
|
|
|
|
|
|
Three months
ended
|
|
Six months
ended
|
|
June
30,
|
|
March
31,
|
|
June
30,
|
|
2015
|
|
2014
|
|
2015
|
|
2015
|
|
2014
|
|
|
|
|
|
|
|
|
|
|
|
Combined
margin
|
$
|
49,090
|
|
|
$
|
93,214
|
|
|
$
|
62,750
|
|
|
$
|
111,840
|
|
|
$
|
176,758
|
|
|
|
|
|
|
|
|
|
|
|
|
General
and administrative
|
(18,363)
|
|
|
(25,276)
|
|
|
(21,860)
|
|
|
(40,223)
|
|
|
(49,759)
|
|
|
Bad debt
expense
|
(394)
|
|
|
(561)
|
|
|
(319)
|
|
|
(713)
|
|
|
(437)
|
|
|
Loss
(gain) on dispositions of property and equipment
|
4,377
|
|
|
331
|
|
|
(1,133)
|
|
|
3,244
|
|
|
1,731
|
|
|
Gain on
litigation
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
2,876
|
|
|
Other
expense
|
486
|
|
|
2,017
|
|
|
(2,680)
|
|
|
(2,194)
|
|
|
1,815
|
|
|
Adjusted
EBITDA(3)
|
35,196
|
|
|
69,725
|
|
|
36,758
|
|
|
71,954
|
|
|
132,984
|
|
|
|
|
|
|
|
|
|
|
|
|
Depreciation and amortization
|
(38,489)
|
|
|
(45,791)
|
|
|
(41,782)
|
|
|
(80,271)
|
|
|
(91,317)
|
|
|
Impairment charges
|
(71,329)
|
|
|
—
|
|
|
(5,990)
|
|
|
(77,319)
|
|
|
—
|
|
|
Interest
expense
|
(5,245)
|
|
|
(10,728)
|
|
|
(5,455)
|
|
|
(10,700)
|
|
|
(23,116)
|
|
|
Loss on
extinguishment of debt
|
—
|
|
|
(14,595)
|
|
|
—
|
|
|
—
|
|
|
(22,482)
|
|
|
Income
tax benefit
|
2,586
|
|
|
1,070
|
|
|
4,450
|
|
|
7,036
|
|
|
1,033
|
|
|
Net loss
|
$
|
(77,281)
|
|
|
$
|
(319)
|
|
|
$
|
(12,019)
|
|
|
$
|
(89,300)
|
|
|
$
|
(2,898)
|
|
|
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
|
|
Six months
ended
|
|
June
30,
|
|
March
31,
|
|
June
30,
|
|
2015
|
|
2014
|
|
2015
|
|
2015
|
|
2014
|
|
|
|
|
|
|
|
|
|
|
|
Net loss as
reported
|
$
|
(77,281)
|
|
|
$
|
(319)
|
|
|
$
|
(12,019)
|
|
|
$
|
(89,300)
|
|
|
$
|
(2,898)
|
|
|
Impairment charges
|
71,329
|
|
|
—
|
|
|
5,990
|
|
|
77,319
|
|
|
—
|
|
|
Loss on
extinguishment of debt
|
—
|
|
|
14,595
|
|
|
—
|
|
|
—
|
|
|
22,482
|
|
|
Tax
benefit related to adjustments, net of valuation
allowances
|
(5,028)
|
|
|
(5,342)
|
|
|
(2,156)
|
|
|
(7,184)
|
|
|
(8,229)
|
|
|
Adjusted net income
(loss)(4)
|
$
|
(10,980)
|
|
|
$
|
8,934
|
|
|
$
|
(8,185)
|
|
|
$
|
(19,165)
|
|
|
$
|
11,355
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic weighted
average number of shares outstanding, as reported
|
64,342
|
|
|
62,877
|
|
|
63,991
|
|
|
64,168
|
|
|
62,710
|
|
|
Effect
of dilutive securities
|
—
|
|
|
2,465
|
|
|
—
|
|
|
—
|
|
|
2,101
|
|
|
Diluted weighted
average number of shares outstanding, as adjusted
|
64,342
|
|
|
65,342
|
|
|
63,991
|
|
|
64,168
|
|
|
64,811
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted (diluted)
EPS(5)
|
$
|
(0.17)
|
|
|
$
|
0.14
|
|
|
$
|
(0.13)
|
|
|
$
|
(0.30)
|
|
|
$
|
0.18
|
|
|
|
|
|
|
|
|
|
|
|
|
Diluted EPS as
reported
|
$
|
(1.20)
|
|
|
$
|
(0.01)
|
|
|
$
|
(0.19)
|
|
|
$
|
(1.39)
|
|
|
$
|
(0.05)
|
|
|
|
|
(4) Adjusted
net income (loss) represents net income (loss) as reported adjusted
to exclude the impairment charges, loss on debt extinguishment and
the related tax benefit, net of valuation allowances. We believe
that adjusted net income (loss) is a useful measure for evaluating
our core operating performance, although it is not a measure of
financial performance under GAAP. Adjusted net income (loss) may
not be comparable to other similarly titled measures reported by
other companies. A reconciliation of net income (loss) as reported
to adjusted net income (loss) is included in the table
above.
|
|
|
|
(5) Adjusted
(diluted) EPS represents adjusted net income (loss) divided by the
weighted-average number of shares outstanding during the period,
including the effect of dilutive securities as applicable. We
believe that adjusted (diluted) EPS is a useful measure for
evaluating our core operating performance, 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
Capital
Expenditures
(in thousands)
(unaudited)
|
|
|
|
|
|
Three months
ended
|
|
Six months
ended
|
|
June
30,
|
|
March
31,
|
|
June
30,
|
|
2015
|
|
2014
|
|
2015
|
|
2015
|
|
2014
|
|
|
|
|
|
|
|
|
|
Drilling Services
Segment:
|
|
|
|
|
|
|
|
|
|
|
Routine
and tubulars
|
$
|
3,053
|
|
|
$
|
11,774
|
|
|
$
|
6,015
|
|
|
$
|
9,068
|
|
|
$
|
20,543
|
|
|
Discretionary
|
1,400
|
|
|
6,076
|
|
|
2,934
|
|
|
4,334
|
|
|
15,948
|
|
|
Fleet
additions
|
27,699
|
|
|
3,575
|
|
|
20,582
|
|
|
48,281
|
|
|
3,728
|
|
|
32,152
|
|
|
21,425
|
|
|
29,531
|
|
|
61,683
|
|
|
40,219
|
|
|
Production
Services Segment:
|
|
|
|
|
|
|
|
|
|
|
Routine
|
2,364
|
|
|
9,306
|
|
|
4,527
|
|
|
6,891
|
|
|
14,695
|
|
|
Discretionary
|
824
|
|
|
3,148
|
|
|
3,255
|
|
|
4,079
|
|
|
9,002
|
|
|
Fleet
additions
|
3,012
|
|
|
9,014
|
|
|
8,362
|
|
|
11,374
|
|
|
10,651
|
|
|
6,200
|
|
|
21,468
|
|
|
16,144
|
|
|
22,344
|
|
|
34,348
|
|
|
Net cash used for
purchases of property and equipment
|
38,352
|
|
|
42,893
|
|
|
45,675
|
|
|
84,027
|
|
|
74,567
|
|
|
Net
effect of accruals
|
7,992
|
|
|
(1,897)
|
|
|
3,141
|
|
|
11,133
|
|
|
3,346
|
|
|
Total capital
expenditures
|
$
|
46,344
|
|
|
$
|
40,996
|
|
|
$
|
48,816
|
|
|
$
|
95,160
|
|
|
$
|
77,913
|
|
|
PIONEER ENERGY
SERVICES CORP. AND SUBSIDIARIES
Drilling Rig, Well
Servicing Rig, Wireline and Coiled Tubing Unit
Current
Information
As of July 30, 2015
|
|
|
|
Drilling Services
Segment:
|
Rig
Type
|
|
Mechanical
|
|
Electric
|
|
Total
Rigs
|
|
|
|
|
|
|
|
Drilling rig
horsepower ratings:
|
|
|
|
|
|
|
900 HP
|
1
|
|
—
|
|
1
|
|
1000 HP
|
1
|
|
3
|
|
4
|
|
1200 to 2000 HP
|
1
|
|
29
|
|
30
|
|
Total
|
3
|
|
32
|
|
35
|
|
|
|
|
|
|
|
Production
Services Segment:
|
|
|
|
|
|
|
|
|
|
|
|
|
Well servicing rig
horsepower ratings:
|
|
|
|
|
|
|
550 HP
|
|
|
|
|
110
|
|
600 HP
|
|
|
|
|
11
|
|
Total
|
|
|
|
|
121
|
|
|
|
|
|
|
|
Wireline
units
|
|
|
|
|
125
|
|
|
|
|
|
|
|
Coiled tubing
units
|
|
|
|
|
17
|
|
|
|
|
|
|
To view the original version on PR Newswire,
visit:http://www.prnewswire.com/news-releases/pioneer-energy-services-reports-second-quarter-2015-results-300121050.html
SOURCE Pioneer Energy Services