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SIMMONS & COMPANY INTERNATIONAL – Pioneer Energy Services Corp.

Pioneer Energy Services Corp. · Mar 8, 2010 · 28 slides

Investor presentation from the Shale Experts oil & gas presentation and slide database. Every page is imaged and its text indexed for search across operators, plays, basins and time.

Slides

  1. SIMMONS & COMPANY INTERNATIONAL – Pioneer Energy Services Corp. – slide 1
    (NYSE AMEX: PDC) www.pioneerdrlg.com Simmons & Company International March 9-10, 2010
  2. SIMMONS & COMPANY INTERNATIONAL – Pioneer Energy Services Corp. – slide 2
    Overview Ticker Symbol: PDC Market Cap: 403 million (March 5, 2010) Stock price: 7.45 (March 5, 2010) Average 3-month daily 636,000 shares trading volume: Public float: Approximately 54 million shares Employees: 1,700…
  3. SIMMONS & COMPANY INTERNATIONAL – Pioneer Energy Services Corp. – slide 3
    Pioneer Drilling Overview 4
  4. SIMMONS & COMPANY INTERNATIONAL – Pioneer Energy Services Corp. – slide 4
    Investment Considerations Rig fleet trading at a significant discount to replacement value Focused on protecting cash flow from softening gas prices 50% of working rigs on term contracts(1) 43% of working rigs in shale plays(1)…
  5. SIMMONS & COMPANY INTERNATIONAL – Pioneer Energy Services Corp. – slide 5
    Overview of Pioneer 9th largest contract driller, 6th largest well services provider and a significant open hole wireline provider in the U.S. 71 high-quality and well-maintained land drilling rigs among the youngest in the…
  6. SIMMONS & COMPANY INTERNATIONAL – Pioneer Energy Services Corp. – slide 6
    Corporate Strategy Focused on value-added organic growth in three core businesses: land drilling, well services and wireline Maintaining emphasis on new-build equipment and state-of-the-art technology Focused on increasing mix of…
  7. SIMMONS & COMPANY INTERNATIONAL – Pioneer Energy Services Corp. – slide 7
    Recent Developments Focused on the most attractive shale plays and oil markets Position rigs to achieve highest risk-adjusted returns Balanced mix of oil and natural gas exposure Locking in rig utilization with term contracts…
  8. SIMMONS & COMPANY INTERNATIONAL – Pioneer Energy Services Corp. – slide 8
    Drilling Services-Segment Overview Historical Fleet Growth Current Rig Fleet Mix 80 70 71 66 1,500-2,000 550-999 70 61 Electric HP HP 60 52 50 40 20% 31% 40 42% 30 58% 20 10 49% 0 2004 2005 2006 2007 2008 2009 1,000-1,499 Mechanical…
  9. SIMMONS & COMPANY INTERNATIONAL – Pioneer Energy Services Corp. – slide 9
    Strong Utilization Through the Cycles Averaged 85% utilization through cycles since 2001, comparing favorably to peers Execution of risk-reducing strategy achieved through customer focus and asset quality Utilization has rebounded…
  10. SIMMONS & COMPANY INTERNATIONAL – Pioneer Energy Services Corp. – slide 10
    Modern, Efficient Drilling Fleet 50 50 Series Series Rig Rig Over 75% of fleet is shale capable 31 new builds (44%) since 2001 with most constructed during 2004 - 2006 69% with 1,000 HP - 2,000 HP 23 rigs with top drives…
  11. SIMMONS & COMPANY INTERNATIONAL – Pioneer Energy Services Corp. – slide 11
    60 Series Rig Mast Traveling Power Equipment SCR House Package Drawworks Fuel-Water Tank Accumulator Suitcases Handling Mud Pumps Equipment Pipe Racks Mud Tanks Mud Cleaning Equipment Choke Gas Buster Manifold 12
  12. SIMMONS & COMPANY INTERNATIONAL – Pioneer Energy Services Corp. – slide 12
    Workover Fleet Overview One of the newest and most highly capable workover fleets in the industry Sixty-nine 550 HP rigs and four 600 HP rigs with an average age of 2.4 years Initial entry via WEDGE acquisition in 2008 with…
  13. SIMMONS & COMPANY INTERNATIONAL – Pioneer Energy Services Corp. – slide 13
    Wireline and Fishing & Rental Overview Overview Locations Wireline Services Open and cased-hole wireline services Cut Bank Havre Williston Billings Dickinson 65 trucks with an average age of 4.3 Casper Punxsutawney years…
  14. SIMMONS & COMPANY INTERNATIONAL – Pioneer Energy Services Corp. – slide 14
    Blue Chip Customers & Strong Safety Record Long-standing Relationships Safety Key component of employee culture Strengthens customer relationships Consistently beat the IADC average for recordable incidents Total recordable…
  15. SIMMONS & COMPANY INTERNATIONAL – Pioneer Energy Services Corp. – slide 15
    Industry and Market Conditions 16
  16. SIMMONS & COMPANY INTERNATIONAL – Pioneer Energy Services Corp. – slide 16
    Recovery in U.S. Land Rig Count Steady rig count improvement during the second half of 2009 and 2010 YTD Horizontal and oil rig counts have returned to Fall 2008 peak levels Land Rig Count Horizontal & Oil Rig Count Horizontal…
  17. SIMMONS & COMPANY INTERNATIONAL – Pioneer Energy Services Corp. – slide 17
    Benefits of Growing Shale Plays Service firms stand to benefit from shale production due to its lower risk development and increased service intensity (up to 3 - 5x conventional) Reintroduction of the Majors should provide increased…
  18. SIMMONS & COMPANY INTERNATIONAL – Pioneer Energy Services Corp. – slide 18
    Conclusion: Improving Oil Service Outlook North American oilfield services pricing and activity appear to have bottomed Most analysts expect a moderate recovery in upstream spending and drilling activity over the next few years…
  19. SIMMONS & COMPANY INTERNATIONAL – Pioneer Energy Services Corp. – slide 19
    Colombia: Strong, Growing Country World Bank Business Rankings Exports ( in billions) S. & Central America 2008 Production 37.6 Business Rank MBoe/d 30.0 Puerto Rico 1 1 26.8 24.4 St. Lucia 2 0 21.2 25.4 Colombia 3 601 16.8 22.7…
  20. SIMMONS & COMPANY INTERNATIONAL – Pioneer Energy Services Corp. – slide 20
    Financials 21
  21. SIMMONS & COMPANY INTERNATIONAL – Pioneer Energy Services Corp. – slide 21
    High Yield Highlights Priced an offering for 250MM of senior unsecured notes due 2018 Yield of 10.677% (coupon 9.875%) Scheduled to close March 11th Will utilize proceeds to pay down revolver from 258MM to 23MM High yield offering…
  22. SIMMONS & COMPANY INTERNATIONAL – Pioneer Energy Services Corp. – slide 22
    Pro Forma Capitalization ( in millions) Actual Pro Forma 12/31/2009 Adjustments 12/31/2009 Cash 40.4 40.4 Revolving Credit Facility (325 / 225)(1) 257.5 (234.8) 22.7 New Sr. Unsecured Notes - 239.4 239.4 Other 4.6 4.6 Total Debt 262.1…
  23. SIMMONS & COMPANY INTERNATIONAL – Pioneer Energy Services Corp. – slide 23
    Consolidated Revenue & EBITDA Revenue ( millions) EBITDA ( millions) 750 250 215 610 600 200 177 145 450 417 150 396 326 300 100 90 257 75 163 150 50 32 0 0 2004 2005 2006 2007 2008 2009 2004 2005 2006 2007 2008…
  24. SIMMONS & COMPANY INTERNATIONAL – Pioneer Energy Services Corp. – slide 24
    Segment Financials Drilling Services Avg Number of Rigs and Utilization Revenues and Op Costs per Day 96% 95% 95% 25 100 89% 89% 100% 21 21 20 19 80 71 80% 20 71 ( in thousands) 66 67 16 61 56% 14 60 52 60% 15 13 41% 12 12…
  25. SIMMONS & COMPANY INTERNATIONAL – Pioneer Energy Services Corp. – slide 25
    Segment Financials Production Services Workover Rigs and Wireline Units Revenue and Division Margin 90 75 60% 74 74 49% 50% 48% 75 65 45% 50% 59 60 55 50 ( in millions) 60 36% 36% 37% 43 47 33% 40% 45 45 45 30% 27 29 27…
  26. SIMMONS & COMPANY INTERNATIONAL – Pioneer Energy Services Corp. – slide 26
    Appendix 27
  27. SIMMONS & COMPANY INTERNATIONAL – Pioneer Energy Services Corp. – slide 27
    Reconciliation of EBITDA to Net Income We define EBITDA as earnings (loss) before interest income (expense), taxes, depreciation, amortization and impairments. Although not prescribed under GAAP, we believe the presentation of EBITDA is…
  28. SIMMONS & COMPANY INTERNATIONAL – Pioneer Energy Services Corp. – slide 28
    29

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