Pioneer Energy Services Corp. (NYSE:PES) Q1 2018 Earnings Conference Call - Preliminary Transcript

May 02, 2018 • 11:00 am ET


Pioneer Energy Services Corp. (NYSE:PES) Q1 2018 Earnings Conference Call - Preliminary Transcript


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Good morning and welcome to the Pioneer Energy Services' First 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. (Operator Instructions) As a reminder, this conference is being recorded.

It is now my pleasure to introduce your host, Anne Pearson, Investor Relations for Dennard-Lascar. Thank you Ms. Pearson, you may begin.

Anne Pearson

Thank you, Dana and good morning everybody. Before I turn the call over to Pioneer's CEO, Stacy Locke; and CFO, Lorne Phillips for their formal comments, I have a few of the usual items we need to cover. First of all, a replay of today's call will be available via webcast and also by phone replay. You can find that information for both in this morning's news release.

Just as a reminder, information reported on this call speaks only as of today, May 2nd, 2018, so any time-sensitive information may not be accurate at the time of the replay. Management may make forward-looking statements that are based on beliefs and assumptions and information currently available to them.

While I think these expectations are reasonable, they can give no assurance or prove to be correct. They are subject to certain risks and uncertainties and assumptions described in today's release and in also in recent public filings with the SEC.

So, if one or more risks materialize or should underlying assumptions prove incorrect, actual results may differ materially. Also, please note that this conference call may contains references to certain non-GAAP measures. You'll find a reconciliation to the GAAP measures in this morning's news release.

Now, let's turn the call over to Stacy Locke, Pioneer President and CEO. Please proceed.

Stacy Locke

Thank you, Anne and good morning. Joining me here in San Antonio is Carlos Pena. He is President of our Wireline Services and Coiled Tubing Services segments; and Brian Tucker, President of International Drilling, US Drilling and Well Servicing; and of course, Lorne Phillips, our Chief Financial Officer.

Appreciate you joining us for our first quarter call. We had a great first quarter. Revenue increased in all five core businesses; international drilling, US drilling, wireline services, well services, and coiled tubing services and generated a 14% revenue growth overall.

EBITDA increased 38% quarter-over-quarter, led primarily by revenue growth and margin expansion in our wireline services business, international drilling operations and domestic drilling operations.

Our US drilling operations continue to be extremely strong and stable. This business is lean, efficient and outperforming in pretty much every KPI metrics. Even with the majority of rigs on sub-20,000 per day dayrate contracts and only three higher dayrate new build contracts remaining, the business is yielding a best-in-class margin per day of 10,436.

All sub-20,000 per day dayrate contracts as well as the three remaining new build contracts renewed during this calendar year. And after all these contracts are mark-to-market, we still believe we will be close to 10,000 a day margins.

Equally as exciting is our drilling operations in Colombia. The