Pioneer Energy Services Corp. (NYSE:PES) Q3 2017 Earnings Conference Call Transcript
Nov 02, 2017 • 11:00 am ET
Greetings and welcome to the Pioneer Energy Services Third Quarter Earnings Conference Call. At this time, all participants are in a listen-only mode. A brief question-and-answer session will follow the formal presentation.
As a reminder, this conference is being recorded. It is now my pleasure to introduce your host, Anne Pearson of Dennard-Lascar, IR. Thank you. Please go ahead.
Thank you, Brenda, and good morning, everyone. Before I turn the call over to Pioneer's CEO, Stacy Locke, and to CFO, Lorne Phillips, for their formal remarks, I have a few of the usual items to cover.
First of all, a replay of today's call will be available by webcast and also by telephone replay. You can find the replay information in this morning's news release. Just as a reminder, information reported on this call speaks only as of today, November 2, 2017, so any time-sensitive information may not be accurate at the time of a replay.
(Forward-Looking Cautionary Statements)
Also, please note that this conference call may contain references to certain non-GAAP measures. You'll find a reconciliation to the GAAP measures in this morning's release.
Now I'd like to turn the call over to Stacy Locke, Pioneer President and CEO.
Thank you, Anne, and good morning, everyone. Joining me here in San Antonio is Lorne Phillips, the CFO.
First, I wanted to address our potential financing. We've been exploring an alternative to the bank revolving facility for quite a long time and we've been trying to avoid double-digit type pricing, and fortunately, the credit markets improved in late summer and in the fall and we saw that window as an opportunity, and so we rushed forward.
And what's great about this facility, once we get it closed, is when you combine the term loan and the ABL it will give us over $100 million of additional liquidity and net debt will be roughly the same. So we'll also alleviate the tight covenants that we had in our bank facility not that we saw that as a risk in the future, but it's just nice to eliminate when you have the opportunity. So we're excited to, hopefully, be closing this soon.
Turning now to the third quarter, we had a very solid quarter. Revenue and EBITDA both were up about 9%, despite the fairly material impact from Hurricane Harvey on our Texas operations. It's been a steady progression of revenue and EBITDA growth for the last four quarters.
Looking at our US drilling segment, we generated about $35 million of revenue in the quarter, that's up 15% or so from the prior quarter. US Drilling operations have been doing extremely well. Average margin per day in the US was just shy of $9,100 per day, which is outstanding. I believe that's the highest of any of the US publicly traded companies that we're aware of.
We made a concerted effort in addition to pushing margin on adding longer term. Now we have five rigs extended into the fourth quarter of