Pioneer Energy Services
Shares of contract driller Pioneer Energy Services (NYSE:PES) have floundered during the past year as falling rig counts and lower drilling activity have taken hold. However, PES could be a perfect example of Goldman’s predicted oil service turnaround.
The onshore driller posted per-share profits of 6 cents, beating expectations for a 4-cent loss, and grew its revenue 12% to again beat the Street’s projections. Pioneer CEO William Stacy Locke credited the quarter’s success on generalized return to drilling by E&P firms, as well as the company’s new-build drilling rig program, which “will generate substantial cash flow.” PES shares jumped nearly 19% after its earnings beat.
More good times could be ahead for shareholders as Pioneer’s small market cap and recent return to profitability makes it a prime candidate for a buyout. Already we’ve seen some big deals in the contract driller space, such as Sidewinder‘s $242 million deal to snatch up Union Drilling (NASDAQ:UDRL).