Boston, MA 05/07/2014 (wallstreetpr) – Pioneer Energy Services Corp (NYSE:PES) has all along generated a majority of its quarterly revenue from its drilling services division. However, the latest quarter was different as revenue from the drilling services division deputized revenue from the production services division.
The lower drilling services revenue has now come as a wake-up call for the company’s management that said the balance of the year will see increased interest in improving the performance of the drilling segment even as the company maintains revenue growth in the production division.
Optimizing equipment usage
As such, the company expects to drive its drilling equipment usage up between 85 and 88 percent during the 2Q. The company operates a fleet of 62 drilling rigs and optimizing the utilization of the rigs should lead to revenue improvement in the drilling services division.
Pioneer Energy Services Corp (NYSE:PES), a provider of drilling and production services to oil and gas operators, experienced reduced demand for its equipment usage in the U.S. and Colombia during the 1Q. The decline in the equipment usage can be linked to the market competition and slowdown in drilling activities in some regions in the face of the U.S. oil and gas production glut.
If the competition is a major issue, the company might be forced to among other things improve its equipment quality or even adjust on costs. However, the management has not raised such issues, and it seems the company is comfortable with its equipment quality.
1Q in summary
Pioneer Energy Services Corp (NYSE:PES) generated revenue of $239 million, up 4 percent from the corresponding quarter a year earlier and also above the estimates. The company experienced a loss of $2.6 million or 4 cents per share. However, excluding certain items, the company earned net income of $2.4 million or 4 cents per share, better than a loss of 4 cents per share that analysts estimated for the quarter. Performance in the year earlier quarter was $1.3 million net loss or 2 cents per share.
Revenue from the production services segment was up 25 percent on increased demand, leading to the revenue from the segment exceeding drilling services revenue for the first time.