Pioneer Energy Services Reports Second Quarter 2019 Results
SAN ANTONIO, July 31, 2019 /PRNewswire/ -- Pioneer Energy Services (NYSE: PES) today reported financial and operating results for the quarter ended June 30, 2019. Second quarter highlights include:
- International drilling fleet was 86% utilized and generated an average margin per day of $11,023.
- Well servicing revenues increased 12% sequentially, largely driven by a 10% increase in rig hours.
- Domestic drilling fleet was 95% utilized and generated an average margin per day of $10,131.
- Cash and cash equivalents increased $3.3 million to $31.1 million sequentially.
Consolidated Financial Results
Revenues for the second quarter of 2019 were $152.8 million, up 4% from revenues of $146.6 million in the first quarter of 2019 ("the prior quarter"). Net loss for the second quarter of 2019 was $12.9 million, or $0.17 per share, compared with net loss of $15.1 million, or $0.19 per share, in the prior quarter. Adjusted net loss(1) for the second quarter was $11.8 million, and adjusted EPS(2) was a loss of $0.15 per share. These results compare to an adjusted net loss of $10.5 million, and an adjusted EPS loss of $0.13 per share in the prior quarter which had higher adjustments for impairment charges and valuation allowance adjustments on deferred tax assets. Second quarter adjusted EBITDA(3) was $20.7 million, up from $19.9 million in the prior quarter.
The increases in revenues and Adjusted EBITDA were primarily due to improvements in our international drilling and well servicing segments. Adjusted EBITDA also increased sequentially due to the reduced fair value of our phantom stock awards, for which we recognized a benefit of $0.8 million in the second quarter, while we recognized an expense of $0.8 million in the prior quarter. The increases in revenues and Adjusted EBITDA were partially offset by the impact of lower utilization and pricing in our coiled tubing services.
Operating Results
Production Services Business
Revenue from our production services business was $87.8 million in the second quarter, up 1% from the prior quarter. Well servicing revenues increased 12%, primarily driven by higher utilization for both maintenance and completion activity. Well servicing average revenue per hour was $569 in the second quarter, up from $558 in the prior quarter, while rig utilization was 60%, up from 54% in the prior quarter. Wireline services, our largest production services business, experienced an increase in perforating stage count of approximately 12%, yielding a revenue increase of 3%. The revenue increases in well servicing and wireline were offset by a 26% revenue decline in coiled tubing services. Both the Rockies and Eagle Ford districts faced more intense competition as completion activity slowed, which negatively impacted utilization and pricing. In addition, the Rockies experienced seasonal slowdowns due to wildlife stipulations, which ended in early May. Coiled tubing revenue days totaled 307 in the second quarter, as compared to 351 in the prior quarter, while revenue per day was $35,430, down from $42,131 in the prior quarter.
Gross margin as a percentage of revenue from our production services business was 17% in the second quarter, down from 20% in the prior quarter. The decrease in gross margin was primarily due to utilization and pricing declines in coiled tubing services.
Drilling Services Business
Revenue from our drilling services business was $65.1 million in the second quarter, reflecting a 9% increase from the prior quarter. Average margin per day was $10,396, up from $10,349 in the prior quarter.
Our domestic drilling fleet was 95% utilized with average revenues per day of $26,864 in the second quarter, up from $26,767 in the prior quarter. Domestic drilling average margin per day was $10,131 in the second quarter, down from $10,944 in the prior quarter, primarily due to increased expenses for routine annual maintenance requirements, stacked rig costs for one rig at the end of its contract, higher mobilization costs associated with a rig that moved to a different region under a new contract, and the benefit in the previous quarter of $0.3 million, or approximately $235 per day, from recognition of the early termination of a domestic drilling contract.
International drilling rig utilization was 86% for the second quarter, up from 81% in the prior quarter. Average revenues per day were $40,806, up from $37,316 in the prior quarter, while average margin per day for the second quarter was $11,023, up from $8,894 in the prior quarter. The increases in revenue per day and margin per day were due to a greater number of days drilling in the current quarter, versus the prior quarter, as well as dayrate increases on certain rigs of approximately $1,000 per day.
Currently, 16 of our 17 domestic drilling rigs are earning revenues, 14 of which are under term contracts. Nine rigs are working in the Permian, five in Appalachia and two in the Bakken. Seven of the nine rigs in the Permian have contracts up for renewal in the third or fourth quarters of 2019. Five of those seven contracts have been extended or verbally agreed to be renewed, and two contracts are currently in negotiations to be extended. All contracts are expected to be renewed at roughly overall flat dayrates. In Appalachia, one rig is stacked and a second rig may stack in the third quarter; however, we expect the remaining four rigs to continue earning for the remainder of the year. In the Bakken, both of the contracted rigs expiring in the fourth quarter are in negotiations to be extended into the first quarter of 2020.
In Colombia, six of our eight rigs are currently earning revenue under daywork contracts. While overall demand for rigs remains strong, there are several rigs that may begin new contracts, move to a different current client or move to a new client which could cause a temporary reduction in utilization. Despite short-term uncertainty on certain contracts, we do expect five to seven of the rigs to remain active for the remainder of 2019.
Comments from our President and CEO
"We had solid performance once again from our drilling services segments which helped us generate favorable operating results and increase our cash position in the quarter," said Wm. Stacy Locke, President and Chief Executive Officer. "In Colombia, we are pleased with the improvement in average margins per day and level of demand for the premium 1,500 horsepower rig class, which gives us confidence that demand for our rigs in that market will remain solid in 2020 despite uncertainty about certain contract extensions for the balance of 2019. We are very pleased with our Colombian team delivering first-rate operational and safety performance while at the same time generating some of the best financial results in many years.
"Our domestic drilling operations have proven to be strong and resilient, also delivering best-in-class safety and operational performance. Utilization rates for our domestic rigs continue to be strong and dayrates have remained steady, although we do anticipate some softness in the second half of the year, particularly in the Appalachian region, where we currently have one rig idle. Our outlook for our domestic operations remains positive.
"Our production services revenue improved sequentially; however, our gross margins fell below expectations. Despite challenging market conditions, we are focused on improving margins through realignment of certain businesses and reducing costs. Our well servicing business benefited from customers dedicating capital to well maintenance to boost or maintain production volumes. We also experienced higher utilization for completion-related services in this business. While our wireline revenue improved sequentially, coiled tubing activity was lower due to excess equipment capacity and seasonal factors in the Rockies. Poor visibility concerning completion activity in the second half of 2019 creates uncertainty regarding production services activity levels in the next two quarters. We do expect some customers to pause operations due to budget constraints for a period of time during the second half of 2019.
"For the remainder of the year, we remain focused on cash flow generation. We expect the second half of 2019 to be cash flow positive, with the third quarter likely to reflect a use of cash due to the semi-annual bond payment in September. Remaining capital expenditures will be routine maintenance in nature as the majority of discretionary spending was completed in the first half of 2019. While the Term Loan does not mature until December 2021, we are proactively exploring various strategic and other alternatives to address the uncertainties related to our ability to refinance our outstanding debts as their maturities approach," concluded Mr. Locke.
Third Quarter 2019 Guidance
In the third quarter of 2019, we expect continued weakness in coiled tubing services, a modest softening in well servicing, and certain clients reducing activity in wireline services. As a result, we expect revenue from our production services business segments to be down approximately 3% to 6% as compared to the second quarter of 2019, and margins to be flat at approximately 17% of revenue.
Due to the potential for an additional stacked rig in the Appalachia market, we expect domestic drilling services rig utilization to average approximately 88% to 92%, and generate average margins per day of approximately $9,700 to $10,200. Similarly, with the contract uncertainty in Colombia, we expect international drilling services rig utilization to average approximately 70% to 75%, and generate average margins per day of approximately $9,000 to $10,000.
We expect general and administrative expense to be approximately $20 million in the third quarter of 2019 partially due to higher phantom stock compensation expense relative to the prior quarter.
Liquidity
Working capital at June 30, 2019 was $106.5 million, up from $103.7 million at March 31, 2019, and down from $110.3 million at December 31, 2018. Cash and cash equivalents, including restricted cash, were $31.1 million, up from $27.9 million at March 31, 2019, and down from $54.6 million at year-end 2018. During the six months ended June 30, 2019, we used $31.4 million of cash for the purchase of property and equipment, and our cash provided by operations was $4.0 million.
Capital Expenditures
Cash capital expenditures during the six months ended June 30, 2019 were $31.4 million, including capitalized interest. We estimate total cash capital expenditures for 2019 to be approximately $50 million, which includes approximately $8 million for final payments on the construction of the new-build drilling rig that began operations in the first quarter, and previous commitments on high-pressure pump packages for coiled tubing completion operations.
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, 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 until August 7th. To access the replay, dial (201) 612-7415 and enter the pass code 13692092.
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 our web site at least 10 minutes early to register and download any necessary audio software. For more information, please contact Donna Washburn at Dennard Lascar Investor Relations at (713) 529-6600 or e-mail dwashburn@dennardlascar.com.
About Pioneer
Pioneer Energy Services provides well servicing, wireline, and coiled tubing services to producers in the U.S. Gulf Coast, Mid-Continent and Rocky Mountain regions through its three production services business segments. Pioneer also provides contract land drilling services to oil and gas operators in Texas, the Mid-Continent and Appalachian regions and internationally in Colombia through its two drilling services business segments.
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 made in good faith that are subject to risks, uncertainties and assumptions. These forward-looking statements are based on our current beliefs, intentions, and expectations and are not guarantees or indicators of future performance. Our actual results, performance or achievements, or industry results, could differ materially from those we express in the foregoing 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 debt agreements, including our senior secured term loan, our senior secured revolving asset-based credit facility, and our senior notes, future compliance with the listing requirements of the NYSE, operating hazards inherent in our operations, the supply of marketable drilling rigs, well servicing rigs, coiled tubing units and wireline units within the industry, the continued availability of new components for drilling rigs, well servicing rigs, coiled tubing units and wireline units, the continued availability of qualified personnel, the success or failure of our acquisition strategy, the occurrence of cybersecurity incidents, 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 Quarterly Report on Form 10-Q for the quarterly period ended June 30, 2019 and in our Annual Report on Form 10-K for the year ended December 31, 2018, including under the headings "Risk Factors" in Item 1A and "Special Note Regarding Forward-Looking Statements" in the Introductory Note to Part I. These factors are not necessarily all the important factors that could affect us. Other unpredictable or unknown factors 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) recognize 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 loss represents net loss as reported adjusted to exclude impairments 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, impairment, and any loss on extinguishment of debt. 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 net loss as reported to adjusted EBITDA is included in the tables to this news release.
Contacts:
Dan Petro, CFA, Vice President, Treasury and
Investor Relations
Pioneer Energy Services Corp.
(210) 828-7689
Lisa Elliott / pes@dennardlascar.com
Dennard Lascar Investor Relations / (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,
2019
2018
2019
2019
2018
Revenues
$
152,843
$
154,782
$
146,568
$
299,411
$
299,260
Costs and expenses:
Operating costs
115,970
114,197
108,585
224,555
216,963
Depreciation
22,851
23,287
22,653
45,504
47,034
General and administrative
18,028
24,829
19,758
37,786
44,023
Bad debt expense (recovery), net
(348)
(370)
62
(286)
(422)
Impairment
332
2,368
1,046
1,378
2,368
Gain on dispositions of property and equipment, net
(1,126)
(726)
(1,075)
(2,201)
(1,061)
Total costs and expenses
155,707
163,585
151,029
306,736
308,905
Loss from operations
(2,864)
(8,803)
(4,461)
(7,325)
(9,645)
Other income (expense):
Interest expense, net of interest capitalized
(10,105)
(9,642)
(9,885)
(19,990)
(19,155)
Other income, net
349
44
684
1,033
548
Total other expense, net
(9,756)
(9,598)
(9,201)
(18,957)
(18,607)
Loss before income taxes
(12,620)
(18,401)
(13,662)
(26,282)
(28,252)
Income tax (expense) benefit
(324)
249
(1,453)
(1,777)
(1,039)
Net loss
$
(12,944)
$
(18,152)
$
(15,115)
$
(28,059)
$
(29,291)
Loss per common share:
Basic
$
(0.17)
$
(0.23)
$
(0.19)
$
(0.36)
$
(0.38)
Diluted
$
(0.17)
$
(0.23)
$
(0.19)
$
(0.36)
$
(0.38)
Weighted-average number of shares outstanding:
Basic
78,430
77,944
78,311
78,371
77,776
Diluted
78,430
77,944
78,311
78,371
77,776
PIONEER ENERGY SERVICES CORP. AND SUBSIDIARIES
Condensed Consolidated Balance Sheets
(in thousands)
June 30,
2019
December 31,
2018
(unaudited)
(audited)
ASSETS
Current assets:
Cash and cash equivalents
$
30,132
$
53,566
Restricted cash
998
998
Receivables, net of allowance for doubtful accounts
145,572
130,881
Inventory
22,800
18,898
Assets held for sale
5,962
3,582
Prepaid expenses and other current assets
7,061
7,109
Total current assets
212,525
215,034
Net property and equipment
500,843
524,858
Operating lease assets
8,775
—
Other noncurrent assets
1,526
1,658
Total assets
$
723,669
$
741,550
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Accounts payable
$
41,019
$
34,134
Deferred revenues
1,420
1,722
Accrued expenses
63,561
68,912
Total current liabilities
106,000
104,768
Long-term debt, less unamortized discount and debt issuance costs
466,093
464,552
Noncurrent operating lease liabilities
6,495
—
Deferred income taxes
4,913
3,688
Other noncurrent liabilities
1,823
3,484
Total liabilities
585,324
576,492
Total shareholders' equity
138,345
165,058
Total liabilities and shareholders' equity
$
723,669
$
741,550
PIONEER ENERGY SERVICES CORP. AND SUBSIDIARIES
Condensed Consolidated Statements of Cash Flows
(in thousands)
(unaudited)
Six months ended
June 30,
2019
2018
Cash flows from operating activities:
Net loss
$
(28,059)
$
(29,291)
Adjustments to reconcile net loss to net cash provided by (used in) operating activities:
Depreciation
45,504
47,034
Allowance for doubtful accounts, net of recoveries
(286)
(422)
Gain on dispositions of property and equipment, net
(2,201)
(1,061)
Stock-based compensation expense
1,194
2,356
Phantom stock compensation expense
51
6,529
Amortization of debt issuance costs and discount
1,541
1,422
Impairment
1,378
2,368
Deferred income taxes
1,225
273
Change in other noncurrent assets
1,476
(199)
Change in other noncurrent liabilities
(2,493)
(10,009)
Changes in current assets and liabilities:
(15,284)
(1,875)
Net cash provided by operating activities
4,046
17,125
Cash flows from investing activities:
Purchases of property and equipment
(31,382)
(31,485)
Proceeds from sale of property and equipment
3,439
2,225
Proceeds from insurance recoveries
588
541
Net cash used in investing activities
(27,355)
(28,719)
Cash flows from financing activities:
Proceeds from exercise of options
—
12
Purchase of treasury stock
(125)
(549)
Net cash used in financing activities
(125)
(537)
Net decrease in cash, cash equivalents and restricted cash
(23,434)
(12,131)
Beginning cash, cash equivalents and restricted cash
54,564
75,648
Ending cash, cash equivalents and restricted cash
$
31,130
$
63,517
PIONEER ENERGY SERVICES CORP. AND SUBSIDIARIES
Operating Results by Segment
(in thousands)
(unaudited)
Three months ended
Six months ended
June 30,
March 31,
June 30,
2019
2018
2019
2019
2018
Revenues:
Domestic drilling
$
39,652
$
35,634
$
38,009
$
77,661
$
71,560
International drilling
25,422
21,773
21,643
47,065
39,384
Drilling services
65,074
57,407
59,652
124,726
110,944
Well servicing
29,506
23,162
26,254
55,760
44,276
Wireline services
47,386
62,137
45,874
93,260
118,738
Coiled tubing services
10,877
12,076
14,788
25,665
25,302
Production services
87,769
97,375
86,916
174,685
188,316
Consolidated revenues
$
152,843
$
154,782
$
146,568
$
299,411
$
299,260
Operating costs:
Domestic drilling
$
24,698
$
21,749
$
22,469
$
47,167
$
42,647
International drilling
18,555
17,064
16,485
35,040
30,025
Drilling services
43,253
38,813
38,954
82,207
72,672
Well servicing
21,038
16,680
18,896
39,934
32,250
Wireline services
41,804
46,716
39,347
81,151
89,202
Coiled tubing services
9,875
11,988
11,388
21,263
22,839
Production services
72,717
75,384
69,631
142,348
144,291
Consolidated operating costs
$
115,970
$
114,197
$
108,585
$
224,555
$
216,963
Gross margin:
Domestic drilling
$
14,954
$
13,885
$
15,540
$
30,494
$
28,913
International drilling
6,867
4,709
5,158
12,025
9,359
Drilling services
21,821
18,594
20,698
42,519
38,272
Well servicing
8,468
6,482
7,358
15,826
12,026
Wireline services
5,582
15,421
6,527
12,109
29,536
Coiled tubing services
1,002
88
3,400
4,402
2,463
Production services
15,052
21,991
17,285
32,337
44,025
Consolidated gross margin
$
36,873
$
40,585
$
37,983
$
74,856
$
82,297
Consolidated:
Net loss
$
(12,944)
$
(18,152)
$
(15,115)
$
(28,059)
$
(29,291)
Adjusted EBITDA (1)
$
20,668
$
16,896
$
19,922
$
40,590
$
40,305
(1) Adjusted EBITDA represents income (loss) before interest expense, income tax (expense) benefit, depreciation and amortization, impairment, and any loss on extinguishment of debt. 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 net loss as reported to adjusted EBITDA is included in the table on page 13.
PIONEER ENERGY SERVICES CORP. AND SUBSIDIARIES
Operating Statistics
(unaudited)
Three months ended
Six months ended
June 30,
March 31,
June 30,
2019
2018
2019
2019
2018
Domestic drilling:
Average number of drilling rigs
17
16
16
17
16
Utilization rate
95
%
100
%
97
%
96
%
100
%
Revenue days
1,476
1,454
1,420
2,896
2,894
Average revenues per day
$
26,864
$
24,508
$
26,767
$
26,817
$
24,727
Average operating costs per day
16,733
14,958
15,823
16,287
14,736
Average margin per day
$
10,131
$
9,550
$
10,944
$
10,530
$
9,991
International drilling:
Average number of drilling rigs
8
8
8
8
8
Utilization rate
86
%
85
%
81
%
83
%
81
%
Revenue days
623
621
580
1,203
1,171
Average revenues per day
$
40,806
$
35,061
$
37,316
$
39,123
$
33,633
Average operating costs per day
29,783
27,478
28,422
29,127
25,640
Average margin per day
$
11,023
$
7,583
$
8,894
$
9,996
$
7,993
Drilling services business:
Average number of drilling rigs
25
24
24
25
24
Utilization rate
92
%
95
%
92
%
92
%
94
%
Revenue days
2,099
2,075
2,000
4,099
4,065
Average revenues per day
$
31,002
$
27,666
$
29,826
$
30,428
$
27,292
Average operating costs per day
20,606
18,705
19,477
20,055
17,877
Average margin per day
$
10,396
$
8,961
$
10,349
$
10,373
$
9,415
Well servicing:
Average number of rigs
125
125
125
125
125
Utilization rate
60
%
49
%
54
%
57
%
48
%
Rig hours
51,895
42,871
47,064
98,959
83,645
Average revenue per hour
$
569
$
540
$
558
$
563
$
529
Wireline services:
Average number of units
95
108
105
100
108
Number of jobs
2,278
3,022
2,342
4,620
5,852
Average revenue per job
$
20,802
$
20,562
$
19,588
$
20,186
$
20,290
Coiled tubing services:
Average number of units
9
14
9
9
14
Revenue days
307
350
351
658
764
Average revenue per day
$
35,430
$
34,503
$
42,131
$
39,005
$
33,118
PIONEER ENERGY SERVICES CORP. AND SUBSIDIARIES
Reconciliation of Net Loss to Adjusted EBITDA
and Consolidated Gross Margin
(in thousands)
(unaudited)
Three months ended
Six months ended
June 30,
March 31,
June 30,
2019
2018
2019
2019
2018
Net loss as reported
$
(12,944)
$
(18,152)
$
(15,115)
$
(28,059)
$
(29,291)
Depreciation and amortization
22,851
23,287
22,653
45,504
47,034
Impairment
332
2,368
1,046
1,378
2,368
Interest expense
10,105
9,642
9,885
19,990
19,155
Income tax expense (benefit)
324
(249)
1,453
1,777
1,039
Adjusted EBITDA(1)
20,668
16,896
19,922
40,590
40,305
General and administrative
18,028
24,829
19,758
37,786
44,023
Bad debt expense (recovery), net
(348)
(370)
62
(286)
(422)
Gain on dispositions of property and equipment, net
(1,126)
(726)
(1,075)
(2,201)
(1,061)
Other income
(349)
(44)
(684)
(1,033)
(548)
Consolidated gross margin
$
36,873
$
40,585
$
37,983
$
74,856
$
82,297
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
June 30,
March 31,
2019
2019
Net loss as reported
$
(12,944)
$
(15,115)
Impairment
332
1,046
Tax benefit related to adjustments
(77)
(242)
Valuation allowance adjustments on deferred tax assets
884
3,846
Adjusted net loss(2)
$
(11,805)
$
(10,465)
Basic weighted average number of shares outstanding, as reported
78,430
78,311
Effect of dilutive securities
—
—
Diluted weighted average number of shares outstanding, as adjusted
78,430
78,311
Adjusted (diluted) EPS(3)
$
(0.15)
$
(0.13)
Diluted EPS as reported
$
(0.17)
$
(0.19)
(2) Adjusted net loss represents net loss as reported adjusted to exclude impairments 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.
(3) 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
Equipment Information
As of July 31, 2019
Multi-well, Pad-capable
Drilling Services Business Segments:
AC rigs
SCR rigs
Total
Domestic drilling
17
—
17
International drilling
—
8
8
25
Production Services Business Segments:
550 HP
600 HP
Total
Well servicing rigs, by horsepower (HP) rating
113
12
125
Total
Wireline services units
93
Coiled tubing services units
9
View original content:http://www.prnewswire.com/news-releases/pioneer-energy-services-reports-second-quarter-2019-results-300893659.html
SOURCE Pioneer Energy Services
SAN ANTONIO, July 31, 2019 /PRNewswire/ -- Pioneer Energy Services (NYSE: PES) today reported financial and operating results for the quarter ended June 30, 2019. Second quarter highlights include:
- International drilling fleet was 86% utilized and generated an average margin per day of $11,023.
- Well servicing revenues increased 12% sequentially, largely driven by a 10% increase in rig hours.
- Domestic drilling fleet was 95% utilized and generated an average margin per day of $10,131.
- Cash and cash equivalents increased $3.3 million to $31.1 million sequentially.
Consolidated Financial Results
Revenues for the second quarter of 2019 were $152.8 million, up 4% from revenues of $146.6 million in the first quarter of 2019 ("the prior quarter"). Net loss for the second quarter of 2019 was $12.9 million, or $0.17 per share, compared with net loss of $15.1 million, or $0.19 per share, in the prior quarter. Adjusted net loss(1) for the second quarter was $11.8 million, and adjusted EPS(2) was a loss of $0.15 per share. These results compare to an adjusted net loss of $10.5 million, and an adjusted EPS loss of $0.13 per share in the prior quarter which had higher adjustments for impairment charges and valuation allowance adjustments on deferred tax assets. Second quarter adjusted EBITDA(3) was $20.7 million, up from $19.9 million in the prior quarter.
The increases in revenues and Adjusted EBITDA were primarily due to improvements in our international drilling and well servicing segments. Adjusted EBITDA also increased sequentially due to the reduced fair value of our phantom stock awards, for which we recognized a benefit of $0.8 million in the second quarter, while we recognized an expense of $0.8 million in the prior quarter. The increases in revenues and Adjusted EBITDA were partially offset by the impact of lower utilization and pricing in our coiled tubing services.
Operating Results
Production Services Business
Revenue from our production services business was $87.8 million in the second quarter, up 1% from the prior quarter. Well servicing revenues increased 12%, primarily driven by higher utilization for both maintenance and completion activity. Well servicing average revenue per hour was $569 in the second quarter, up from $558 in the prior quarter, while rig utilization was 60%, up from 54% in the prior quarter. Wireline services, our largest production services business, experienced an increase in perforating stage count of approximately 12%, yielding a revenue increase of 3%. The revenue increases in well servicing and wireline were offset by a 26% revenue decline in coiled tubing services. Both the Rockies and Eagle Ford districts faced more intense competition as completion activity slowed, which negatively impacted utilization and pricing. In addition, the Rockies experienced seasonal slowdowns due to wildlife stipulations, which ended in early May. Coiled tubing revenue days totaled 307 in the second quarter, as compared to 351 in the prior quarter, while revenue per day was $35,430, down from $42,131 in the prior quarter.
Gross margin as a percentage of revenue from our production services business was 17% in the second quarter, down from 20% in the prior quarter. The decrease in gross margin was primarily due to utilization and pricing declines in coiled tubing services.
Drilling Services Business
Revenue from our drilling services business was $65.1 million in the second quarter, reflecting a 9% increase from the prior quarter. Average margin per day was $10,396, up from $10,349 in the prior quarter.
Our domestic drilling fleet was 95% utilized with average revenues per day of $26,864 in the second quarter, up from $26,767 in the prior quarter. Domestic drilling average margin per day was $10,131 in the second quarter, down from $10,944 in the prior quarter, primarily due to increased expenses for routine annual maintenance requirements, stacked rig costs for one rig at the end of its contract, higher mobilization costs associated with a rig that moved to a different region under a new contract, and the benefit in the previous quarter of $0.3 million, or approximately $235 per day, from recognition of the early termination of a domestic drilling contract.
International drilling rig utilization was 86% for the second quarter, up from 81% in the prior quarter. Average revenues per day were $40,806, up from $37,316 in the prior quarter, while average margin per day for the second quarter was $11,023, up from $8,894 in the prior quarter. The increases in revenue per day and margin per day were due to a greater number of days drilling in the current quarter, versus the prior quarter, as well as dayrate increases on certain rigs of approximately $1,000 per day.
Currently, 16 of our 17 domestic drilling rigs are earning revenues, 14 of which are under term contracts. Nine rigs are working in the Permian, five in Appalachia and two in the Bakken. Seven of the nine rigs in the Permian have contracts up for renewal in the third or fourth quarters of 2019. Five of those seven contracts have been extended or verbally agreed to be renewed, and two contracts are currently in negotiations to be extended. All contracts are expected to be renewed at roughly overall flat dayrates. In Appalachia, one rig is stacked and a second rig may stack in the third quarter; however, we expect the remaining four rigs to continue earning for the remainder of the year. In the Bakken, both of the contracted rigs expiring in the fourth quarter are in negotiations to be extended into the first quarter of 2020.
In Colombia, six of our eight rigs are currently earning revenue under daywork contracts. While overall demand for rigs remains strong, there are several rigs that may begin new contracts, move to a different current client or move to a new client which could cause a temporary reduction in utilization. Despite short-term uncertainty on certain contracts, we do expect five to seven of the rigs to remain active for the remainder of 2019.
Comments from our President and CEO
"We had solid performance once again from our drilling services segments which helped us generate favorable operating results and increase our cash position in the quarter," said Wm. Stacy Locke, President and Chief Executive Officer. "In Colombia, we are pleased with the improvement in average margins per day and level of demand for the premium 1,500 horsepower rig class, which gives us confidence that demand for our rigs in that market will remain solid in 2020 despite uncertainty about certain contract extensions for the balance of 2019. We are very pleased with our Colombian team delivering first-rate operational and safety performance while at the same time generating some of the best financial results in many years.
"Our domestic drilling operations have proven to be strong and resilient, also delivering best-in-class safety and operational performance. Utilization rates for our domestic rigs continue to be strong and dayrates have remained steady, although we do anticipate some softness in the second half of the year, particularly in the Appalachian region, where we currently have one rig idle. Our outlook for our domestic operations remains positive.
"Our production services revenue improved sequentially; however, our gross margins fell below expectations. Despite challenging market conditions, we are focused on improving margins through realignment of certain businesses and reducing costs. Our well servicing business benefited from customers dedicating capital to well maintenance to boost or maintain production volumes. We also experienced higher utilization for completion-related services in this business. While our wireline revenue improved sequentially, coiled tubing activity was lower due to excess equipment capacity and seasonal factors in the Rockies. Poor visibility concerning completion activity in the second half of 2019 creates uncertainty regarding production services activity levels in the next two quarters. We do expect some customers to pause operations due to budget constraints for a period of time during the second half of 2019.
"For the remainder of the year, we remain focused on cash flow generation. We expect the second half of 2019 to be cash flow positive, with the third quarter likely to reflect a use of cash due to the semi-annual bond payment in September. Remaining capital expenditures will be routine maintenance in nature as the majority of discretionary spending was completed in the first half of 2019. While the Term Loan does not mature until December 2021, we are proactively exploring various strategic and other alternatives to address the uncertainties related to our ability to refinance our outstanding debts as their maturities approach," concluded Mr. Locke.
Third Quarter 2019 Guidance
In the third quarter of 2019, we expect continued weakness in coiled tubing services, a modest softening in well servicing, and certain clients reducing activity in wireline services. As a result, we expect revenue from our production services business segments to be down approximately 3% to 6% as compared to the second quarter of 2019, and margins to be flat at approximately 17% of revenue.
Due to the potential for an additional stacked rig in the Appalachia market, we expect domestic drilling services rig utilization to average approximately 88% to 92%, and generate average margins per day of approximately $9,700 to $10,200. Similarly, with the contract uncertainty in Colombia, we expect international drilling services rig utilization to average approximately 70% to 75%, and generate average margins per day of approximately $9,000 to $10,000.
We expect general and administrative expense to be approximately $20 million in the third quarter of 2019 partially due to higher phantom stock compensation expense relative to the prior quarter.
Liquidity
Working capital at June 30, 2019 was $106.5 million, up from $103.7 million at March 31, 2019, and down from $110.3 million at December 31, 2018. Cash and cash equivalents, including restricted cash, were $31.1 million, up from $27.9 million at March 31, 2019, and down from $54.6 million at year-end 2018. During the six months ended June 30, 2019, we used $31.4 million of cash for the purchase of property and equipment, and our cash provided by operations was $4.0 million.
Capital Expenditures
Cash capital expenditures during the six months ended June 30, 2019 were $31.4 million, including capitalized interest. We estimate total cash capital expenditures for 2019 to be approximately $50 million, which includes approximately $8 million for final payments on the construction of the new-build drilling rig that began operations in the first quarter, and previous commitments on high-pressure pump packages for coiled tubing completion operations.
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, 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 until August 7th. To access the replay, dial (201) 612-7415 and enter the pass code 13692092.
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 our web site at least 10 minutes early to register and download any necessary audio software. For more information, please contact Donna Washburn at Dennard Lascar Investor Relations at (713) 529-6600 or e-mail dwashburn@dennardlascar.com.
About Pioneer
Pioneer Energy Services provides well servicing, wireline, and coiled tubing services to producers in the U.S. Gulf Coast, Mid-Continent and Rocky Mountain regions through its three production services business segments. Pioneer also provides contract land drilling services to oil and gas operators in Texas, the Mid-Continent and Appalachian regions and internationally in Colombia through its two drilling services business segments.
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 made in good faith that are subject to risks, uncertainties and assumptions. These forward-looking statements are based on our current beliefs, intentions, and expectations and are not guarantees or indicators of future performance. Our actual results, performance or achievements, or industry results, could differ materially from those we express in the foregoing 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 debt agreements, including our senior secured term loan, our senior secured revolving asset-based credit facility, and our senior notes, future compliance with the listing requirements of the NYSE, operating hazards inherent in our operations, the supply of marketable drilling rigs, well servicing rigs, coiled tubing units and wireline units within the industry, the continued availability of new components for drilling rigs, well servicing rigs, coiled tubing units and wireline units, the continued availability of qualified personnel, the success or failure of our acquisition strategy, the occurrence of cybersecurity incidents, 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 Quarterly Report on Form 10-Q for the quarterly period ended June 30, 2019 and in our Annual Report on Form 10-K for the year ended December 31, 2018, including under the headings "Risk Factors" in Item 1A and "Special Note Regarding Forward-Looking Statements" in the Introductory Note to Part I. These factors are not necessarily all the important factors that could affect us. Other unpredictable or unknown factors 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) recognize 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 loss represents net loss as reported adjusted to exclude impairments 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, impairment, and any loss on extinguishment of debt. 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 net loss as reported to adjusted EBITDA is included in the tables to this news release. |
|
Contacts: |
Dan Petro, CFA, Vice President, Treasury and |
|
Investor Relations |
|
|
Pioneer Energy Services Corp. |
|
|
(210) 828-7689 |
|
|
Lisa Elliott / pes@dennardlascar.com |
|
|
Dennard Lascar Investor Relations / (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, |
|||||||||||||||||
|
2019 |
2018 |
2019 |
2019 |
2018 |
|||||||||||||||
|
Revenues |
$ |
152,843 |
$ |
154,782 |
$ |
146,568 |
$ |
299,411 |
$ |
299,260 |
|||||||||
|
Costs and expenses: |
|||||||||||||||||||
|
Operating costs |
115,970 |
114,197 |
108,585 |
224,555 |
216,963 |
||||||||||||||
|
Depreciation |
22,851 |
23,287 |
22,653 |
45,504 |
47,034 |
||||||||||||||
|
General and administrative |
18,028 |
24,829 |
19,758 |
37,786 |
44,023 |
||||||||||||||
|
Bad debt expense (recovery), net |
(348) |
(370) |
62 |
(286) |
(422) |
||||||||||||||
|
Impairment |
332 |
2,368 |
1,046 |
1,378 |
2,368 |
||||||||||||||
|
Gain on dispositions of property and equipment, net |
(1,126) |
(726) |
(1,075) |
(2,201) |
(1,061) |
||||||||||||||
|
Total costs and expenses |
155,707 |
163,585 |
151,029 |
306,736 |
308,905 |
||||||||||||||
|
Loss from operations |
(2,864) |
(8,803) |
(4,461) |
(7,325) |
(9,645) |
||||||||||||||
|
Other income (expense): |
|||||||||||||||||||
|
Interest expense, net of interest capitalized |
(10,105) |
(9,642) |
(9,885) |
(19,990) |
(19,155) |
||||||||||||||
|
Other income, net |
349 |
44 |
684 |
1,033 |
548 |
||||||||||||||
|
Total other expense, net |
(9,756) |
(9,598) |
(9,201) |
(18,957) |
(18,607) |
||||||||||||||
|
Loss before income taxes |
(12,620) |
(18,401) |
(13,662) |
(26,282) |
(28,252) |
||||||||||||||
|
Income tax (expense) benefit |
(324) |
249 |
(1,453) |
(1,777) |
(1,039) |
||||||||||||||
|
Net loss |
$ |
(12,944) |
$ |
(18,152) |
$ |
(15,115) |
$ |
(28,059) |
$ |
(29,291) |
|||||||||
|
Loss per common share: |
|||||||||||||||||||
|
Basic |
$ |
(0.17) |
$ |
(0.23) |
$ |
(0.19) |
$ |
(0.36) |
$ |
(0.38) |
|||||||||
|
Diluted |
$ |
(0.17) |
$ |
(0.23) |
$ |
(0.19) |
$ |
(0.36) |
$ |
(0.38) |
|||||||||
|
Weighted-average number of shares outstanding: |
|||||||||||||||||||
|
Basic |
78,430 |
77,944 |
78,311 |
78,371 |
77,776 |
||||||||||||||
|
Diluted |
78,430 |
77,944 |
78,311 |
78,371 |
77,776 |
||||||||||||||
|
PIONEER ENERGY SERVICES CORP. AND SUBSIDIARIES | |||||||
|
Condensed Consolidated Balance Sheets | |||||||
|
(in thousands) | |||||||
|
June 30, |
December 31, |
||||||
|
(unaudited) |
(audited) |
||||||
|
ASSETS |
|||||||
|
Current assets: |
|||||||
|
Cash and cash equivalents |
$ |
30,132 |
$ |
53,566 |
|||
|
Restricted cash |
998 |
998 |
|||||
|
Receivables, net of allowance for doubtful accounts |
145,572 |
130,881 |
|||||
|
Inventory |
22,800 |
18,898 |
|||||
|
Assets held for sale |
5,962 |
3,582 |
|||||
|
Prepaid expenses and other current assets |
7,061 |
7,109 |
|||||
|
Total current assets |
212,525 |
215,034 |
|||||
|
Net property and equipment |
500,843 |
524,858 |
|||||
|
Operating lease assets |
8,775 |
— |
|||||
|
Other noncurrent assets |
1,526 |
1,658 |
|||||
|
Total assets |
$ |
723,669 |
$ |
741,550 |
|||
|
LIABILITIES AND SHAREHOLDERS' EQUITY |
|||||||
|
Current liabilities: |
|||||||
|
Accounts payable |
$ |
41,019 |
$ |
34,134 |
|||
|
Deferred revenues |
1,420 |
1,722 |
|||||
|
Accrued expenses |
63,561 |
68,912 |
|||||
|
Total current liabilities |
106,000 |
104,768 |
|||||
|
Long-term debt, less unamortized discount and debt issuance costs |
466,093 |
464,552 |
|||||
|
Noncurrent operating lease liabilities |
6,495 |
— |
|||||
|
Deferred income taxes |
4,913 |
3,688 |
|||||
|
Other noncurrent liabilities |
1,823 |
3,484 |
|||||
|
Total liabilities |
585,324 |
576,492 |
|||||
|
Total shareholders' equity |
138,345 |
165,058 |
|||||
|
Total liabilities and shareholders' equity |
$ |
723,669 |
$ |
741,550 |
|||
|
PIONEER ENERGY SERVICES CORP. AND SUBSIDIARIES | |||||||
|
Condensed Consolidated Statements of Cash Flows | |||||||
|
(in thousands) | |||||||
|
(unaudited) | |||||||
|
Six months ended |
|||||||
|
June 30, |
|||||||
|
2019 |
2018 |
||||||
|
Cash flows from operating activities: |
|||||||
|
Net loss |
$ |
(28,059) |
$ |
(29,291) |
|||
|
Adjustments to reconcile net loss to net cash provided by (used in) operating activities: |
|||||||
|
Depreciation |
45,504 |
47,034 |
|||||
|
Allowance for doubtful accounts, net of recoveries |
(286) |
(422) |
|||||
|
Gain on dispositions of property and equipment, net |
(2,201) |
(1,061) |
|||||
|
Stock-based compensation expense |
1,194 |
2,356 |
|||||
|
Phantom stock compensation expense |
51 |
6,529 |
|||||
|
Amortization of debt issuance costs and discount |
1,541 |
1,422 |
|||||
|
Impairment |
1,378 |
2,368 |
|||||
|
Deferred income taxes |
1,225 |
273 |
|||||
|
Change in other noncurrent assets |
1,476 |
(199) |
|||||
|
Change in other noncurrent liabilities |
(2,493) |
(10,009) |
|||||
|
Changes in current assets and liabilities: |
(15,284) |
(1,875) |
|||||
|
Net cash provided by operating activities |
4,046 |
17,125 |
|||||
|
Cash flows from investing activities: |
|||||||
|
Purchases of property and equipment |
(31,382) |
(31,485) |
|||||
|
Proceeds from sale of property and equipment |
3,439 |
2,225 |
|||||
|
Proceeds from insurance recoveries |
588 |
541 |
|||||
|
Net cash used in investing activities |
(27,355) |
(28,719) |
|||||
|
Cash flows from financing activities: |
|||||||
|
Proceeds from exercise of options |
— |
12 |
|||||
|
Purchase of treasury stock |
(125) |
(549) |
|||||
|
Net cash used in financing activities |
(125) |
(537) |
|||||
|
Net decrease in cash, cash equivalents and restricted cash |
(23,434) |
(12,131) |
|||||
|
Beginning cash, cash equivalents and restricted cash |
54,564 |
75,648 |
|||||
|
Ending cash, cash equivalents and restricted cash |
$ |
31,130 |
$ |
63,517 |
|||
|
PIONEER ENERGY SERVICES CORP. AND SUBSIDIARIES | |||||||||||||||||||
|
Operating Results by Segment | |||||||||||||||||||
|
(in thousands) | |||||||||||||||||||
|
(unaudited) | |||||||||||||||||||
|
Three months ended |
Six months ended |
||||||||||||||||||
|
June 30, |
March 31, |
June 30, |
|||||||||||||||||
|
2019 |
2018 |
2019 |
2019 |
2018 |
|||||||||||||||
|
Revenues: |
|||||||||||||||||||
|
Domestic drilling |
$ |
39,652 |
$ |
35,634 |
$ |
38,009 |
$ |
77,661 |
$ |
71,560 |
|||||||||
|
International drilling |
25,422 |
21,773 |
21,643 |
47,065 |
39,384 |
||||||||||||||
|
Drilling services |
65,074 |
57,407 |
59,652 |
124,726 |
110,944 |
||||||||||||||
|
Well servicing |
29,506 |
23,162 |
26,254 |
55,760 |
44,276 |
||||||||||||||
|
Wireline services |
47,386 |
62,137 |
45,874 |
93,260 |
118,738 |
||||||||||||||
|
Coiled tubing services |
10,877 |
12,076 |
14,788 |
25,665 |
25,302 |
||||||||||||||
|
Production services |
87,769 |
97,375 |
86,916 |
174,685 |
188,316 |
||||||||||||||
|
Consolidated revenues |
$ |
152,843 |
$ |
154,782 |
$ |
146,568 |
$ |
299,411 |
$ |
299,260 |
|||||||||
|
Operating costs: |
|||||||||||||||||||
|
Domestic drilling |
$ |
24,698 |
$ |
21,749 |
$ |
22,469 |
$ |
47,167 |
$ |
42,647 |
|||||||||
|
International drilling |
18,555 |
17,064 |
16,485 |
35,040 |
30,025 |
||||||||||||||
|
Drilling services |
43,253 |
38,813 |
38,954 |
82,207 |
72,672 |
||||||||||||||
|
Well servicing |
21,038 |
16,680 |
18,896 |
39,934 |
32,250 |
||||||||||||||
|
Wireline services |
41,804 |
46,716 |
39,347 |
81,151 |
89,202 |
||||||||||||||
|
Coiled tubing services |
9,875 |
11,988 |
11,388 |
21,263 |
22,839 |
||||||||||||||
|
Production services |
72,717 |
75,384 |
69,631 |
142,348 |
144,291 |
||||||||||||||
|
Consolidated operating costs |
$ |
115,970 |
$ |
114,197 |
$ |
108,585 |
$ |
224,555 |
$ |
216,963 |
|||||||||
|
Gross margin: |
|||||||||||||||||||
|
Domestic drilling |
$ |
14,954 |
$ |
13,885 |
$ |
15,540 |
$ |
30,494 |
$ |
28,913 |
|||||||||
|
International drilling |
6,867 |
4,709 |
5,158 |
12,025 |
9,359 |
||||||||||||||
|
Drilling services |
21,821 |
18,594 |
20,698 |
42,519 |
38,272 |
||||||||||||||
|
Well servicing |
8,468 |
6,482 |
7,358 |
15,826 |
12,026 |
||||||||||||||
|
Wireline services |
5,582 |
15,421 |
6,527 |
12,109 |
29,536 |
||||||||||||||
|
Coiled tubing services |
1,002 |
88 |
3,400 |
4,402 |
2,463 |
||||||||||||||
|
Production services |
15,052 |
21,991 |
17,285 |
32,337 |
44,025 |
||||||||||||||
|
Consolidated gross margin |
$ |
36,873 |
$ |
40,585 |
$ |
37,983 |
$ |
74,856 |
$ |
82,297 |
|||||||||
|
Consolidated: |
|||||||||||||||||||
|
Net loss |
$ |
(12,944) |
$ |
(18,152) |
$ |
(15,115) |
$ |
(28,059) |
$ |
(29,291) |
|||||||||
|
Adjusted EBITDA (1) |
$ |
20,668 |
$ |
16,896 |
$ |
19,922 |
$ |
40,590 |
$ |
40,305 |
|||||||||
|
(1) Adjusted EBITDA represents income (loss) before interest expense, income tax (expense) benefit, depreciation and amortization, impairment, and any loss on extinguishment of debt. 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 net loss as reported to adjusted EBITDA is included in the table on page 13. |
|
PIONEER ENERGY SERVICES CORP. AND SUBSIDIARIES | |||||||||||||||||||
|
Operating Statistics | |||||||||||||||||||
|
(unaudited) | |||||||||||||||||||
|
Three months ended |
Six months ended |
||||||||||||||||||
|
June 30, |
March 31, |
June 30, |
|||||||||||||||||
|
2019 |
2018 |
2019 |
2019 |
2018 |
|||||||||||||||
|
Domestic drilling: |
|||||||||||||||||||
|
Average number of drilling rigs |
17 |
16 |
16 |
17 |
16 |
||||||||||||||
|
Utilization rate |
95 |
% |
100 |
% |
97 |
% |
96 |
% |
100 |
% |
|||||||||
|
Revenue days |
1,476 |
1,454 |
1,420 |
2,896 |
2,894 |
||||||||||||||
|
Average revenues per day |
$ |
26,864 |
$ |
24,508 |
$ |
26,767 |
$ |
26,817 |
$ |
24,727 |
|||||||||
|
Average operating costs per day |
16,733 |
14,958 |
15,823 |
16,287 |
14,736 |
||||||||||||||
|
Average margin per day |
$ |
10,131 |
$ |
9,550 |
$ |
10,944 |
$ |
10,530 |
$ |
9,991 |
|||||||||
|
International drilling: |
|||||||||||||||||||
|
Average number of drilling rigs |
8 |
8 |
8 |
8 |
8 |
||||||||||||||
|
Utilization rate |
86 |
% |
85 |
% |
81 |
% |
83 |
% |
81 |
% |
|||||||||
|
Revenue days |
623 |
621 |
580 |
1,203 |
1,171 |
||||||||||||||
|
Average revenues per day |
$ |
40,806 |
$ |
35,061 |
$ |
37,316 |
$ |
39,123 |
$ |
33,633 |
|||||||||
|
Average operating costs per day |
29,783 |
27,478 |
28,422 |
29,127 |
25,640 |
||||||||||||||
|
Average margin per day |
$ |
11,023 |
$ |
7,583 |
$ |
8,894 |
$ |
9,996 |
$ |
7,993 |
|||||||||
|
Drilling services business: |
|||||||||||||||||||
|
Average number of drilling rigs |
25 |
24 |
24 |
25 |
24 |
||||||||||||||
|
Utilization rate |
92 |
% |
95 |
% |
92 |
% |
92 |
% |
94 |
% |
|||||||||
|
Revenue days |
2,099 |
2,075 |
2,000 |
4,099 |
4,065 |
||||||||||||||
|
Average revenues per day |
$ |
31,002 |
$ |
27,666 |
$ |
29,826 |
$ |
30,428 |
$ |
27,292 |
|||||||||
|
Average operating costs per day |
20,606 |
18,705 |
19,477 |
20,055 |
17,877 |
||||||||||||||
|
Average margin per day |
$ |
10,396 |
$ |
8,961 |
$ |
10,349 |
$ |
10,373 |
$ |
9,415 |
|||||||||
|
Well servicing: |
|||||||||||||||||||
|
Average number of rigs |
125 |
125 |
125 |
125 |
125 |
||||||||||||||
|
Utilization rate |
60 |
% |
49 |
% |
54 |
% |
57 |
% |
48 |
% |
|||||||||
|
Rig hours |
51,895 |
42,871 |
47,064 |
98,959 |
83,645 |
||||||||||||||
|
Average revenue per hour |
$ |
569 |
$ |
540 |
$ |
558 |
$ |
563 |
$ |
529 |
|||||||||
|
Wireline services: |
|||||||||||||||||||
|
Average number of units |
95 |
108 |
105 |
100 |
108 |
||||||||||||||
|
Number of jobs |
2,278 |
3,022 |
2,342 |
4,620 |
5,852 |
||||||||||||||
|
Average revenue per job |
$ |
20,802 |
$ |
20,562 |
$ |
19,588 |
$ |
20,186 |
$ |
20,290 |
|||||||||
|
Coiled tubing services: |
|||||||||||||||||||
|
Average number of units |
9 |
14 |
9 |
9 |
14 |
||||||||||||||
|
Revenue days |
307 |
350 |
351 |
658 |
764 |
||||||||||||||
|
Average revenue per day |
$ |
35,430 |
$ |
34,503 |
$ |
42,131 |
$ |
39,005 |
$ |
33,118 |
|||||||||
|
PIONEER ENERGY SERVICES CORP. AND SUBSIDIARIES | |||||||||||||||||||
|
Reconciliation of Net Loss to Adjusted EBITDA | |||||||||||||||||||
|
and Consolidated Gross Margin | |||||||||||||||||||
|
(in thousands) | |||||||||||||||||||
|
(unaudited) | |||||||||||||||||||
|
Three months ended |
Six months ended |
||||||||||||||||||
|
June 30, |
March 31, |
June 30, |
|||||||||||||||||
|
2019 |
2018 |
2019 |
2019 |
2018 |
|||||||||||||||
|
Net loss as reported |
$ |
(12,944) |
$ |
(18,152) |
$ |
(15,115) |
$ |
(28,059) |
$ |
(29,291) |
|||||||||
|
Depreciation and amortization |
22,851 |
23,287 |
22,653 |
45,504 |
47,034 |
||||||||||||||
|
Impairment |
332 |
2,368 |
1,046 |
1,378 |
2,368 |
||||||||||||||
|
Interest expense |
10,105 |
9,642 |
9,885 |
19,990 |
19,155 |
||||||||||||||
|
Income tax expense (benefit) |
324 |
(249) |
1,453 |
1,777 |
1,039 |
||||||||||||||
|
Adjusted EBITDA(1) |
20,668 |
16,896 |
19,922 |
40,590 |
40,305 |
||||||||||||||
|
General and administrative |
18,028 |
24,829 |
19,758 |
37,786 |
44,023 |
||||||||||||||
|
Bad debt expense (recovery), net |
(348) |
(370) |
62 |
(286) |
(422) |
||||||||||||||
|
Gain on dispositions of property and equipment, net |
(1,126) |
(726) |
(1,075) |
(2,201) |
(1,061) |
||||||||||||||
|
Other income |
(349) |
(44) |
(684) |
(1,033) |
(548) |
||||||||||||||
|
Consolidated gross margin |
$ |
36,873 |
$ |
40,585 |
$ |
37,983 |
$ |
74,856 |
$ |
82,297 |
|||||||||
|
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 |
|||||||
|
June 30, |
March 31, |
||||||
|
2019 |
2019 |
||||||
|
Net loss as reported |
$ |
(12,944) |
$ |
(15,115) |
|||
|
Impairment |
332 |
1,046 |
|||||
|
Tax benefit related to adjustments |
(77) |
(242) |
|||||
|
Valuation allowance adjustments on deferred tax assets |
884 |
3,846 |
|||||
|
Adjusted net loss(2) |
$ |
(11,805) |
$ |
(10,465) |
|||
|
Basic weighted average number of shares outstanding, as reported |
78,430 |
78,311 |
|||||
|
Effect of dilutive securities |
— |
— |
|||||
|
Diluted weighted average number of shares outstanding, as adjusted |
78,430 |
78,311 |
|||||
|
Adjusted (diluted) EPS(3) |
$ |
(0.15) |
$ |
(0.13) |
|||
|
Diluted EPS as reported |
$ |
(0.17) |
$ |
(0.19) |
|||
|
(2) Adjusted net loss represents net loss as reported adjusted to exclude impairments 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. |
|
(3) 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 | |||||
|
Equipment Information | |||||
|
As of July 31, 2019 | |||||
|
Multi-well, Pad-capable |
|||||
|
Drilling Services Business Segments: |
AC rigs |
SCR rigs |
Total |
||
|
Domestic drilling |
17 |
— |
17 |
||
|
International drilling |
— |
8 |
8 |
||
|
25 |
|||||
|
Production Services Business Segments: |
550 HP |
600 HP |
Total |
||
|
Well servicing rigs, by horsepower (HP) rating |
113 |
12 |
125 |
||
|
Total |
|||||
|
Wireline services units |
93 |
||||
|
Coiled tubing services units |
9 |
||||
View original content:http://www.prnewswire.com/news-releases/pioneer-energy-services-reports-second-quarter-2019-results-300893659.html
SOURCE Pioneer Energy Services