A p u b l i c A t i o n o f

Spirit

ThePioneer

Summer 2009

ISSue 2

Pioneer’s newest state-of-the-art addition to its fleet, PDC Rig 67, has product enhance-ments that elevate the entire fleet to a new level.

PDC Rig 67 was deployed in May to North Dakota where it is working for Whiting Petroleum Corp. Pioneer is considered a strong player in North Dakota, with PDC Rig 67 the com-pany’s seventh rig there.

Because of the caliber of its experi-enced crews and purpose–built equip-ment, Pioneer is recognized for its harsh weather expertise.

time to BragPDC Rig 67 features proven technol-ogy, including:

• Complete AC drive components

• Joy Stick Control

• Automated Catwalk

• Iron Roughneck

• Mast Integrated Top Drive

• More power and greater efficiency, with fewer loads

“All of these leading–edge product enhancements increase the performance of the rig’s operational efficiency and safety,” explains Don Lacombe, Senior Vice President, Marketing. “Our ‘60’ se-ries and ‘50’ series are premier additions to our fleet and our customers appreci-ate the performance of these rigs.”

In the ‘50’ series, “PDC Rig 58 drilled 5,600 feet in 24 hours in 2008 and that is one for the record books,” he adds.

“PDC Rig 66 was the first new rig provided by Pioneer to be deployed to North Dakota for Whiting.”

PDC Rig 67’s Top Drive can be transported inside the mast to make rig moves faster and more streamlined.

The Automated Catwalk efficiently handles cas-ing and drillpipe and is considered by industry experts to be an excel-lent safety feature. The new mud tanks are en-vironmentally sensitive

and easy-to-clean.

PDC Rig 67 is called a “hot rig” and is equipped with a steam boiler to keep the rig warm, an important issue when temperatures range from 30-50 degrees below zero.

technology increases rig PerformancePDC Rig 67 was purpose-built by Pioneer for drilling the Bakken forma-tion, covering 200,000-square miles of the subsurface of the Williston Basin, including parts of Montana, North Dakota and Saskatchewan.

The rig will be working in Mountrail County, the location of the best pro-ducing wells in North Dakota. These are wells that require 18,000 to 20,000 feet drilling capability.

The Driller’s Cabin features an OM-RON computerized console with a joystick control that is similar to operat-ing a video game, but this equipment is much bigger and more powerful.

Rig personnel completed special train-ing at OMRON for the new Variable Frequency Drive technology.

The rig was built at Drilling Structures International in Houston.

A neW CLASS oF riG

PDC rig 67 haS iT all: Power, effiCienCy anD SafeTy feaTureS

continued on page 2

tHAnk you For PArtiCiPAtinGthe newsletter committee appreciates the many good ideas for

names that were submitted by employees.

employees who participated were: Henry Chlebek, Baldemar

Campos, Joyce Jones, Gary Chipman, kelly Scribner, Larry Lee Da-

vis, Jim Schuler, Leland Wetzel, Jason Parks, eldon Partin, kenny

Fernandez, Bryan Sparbel, Scott Pfeil, Steve ofstehage and Sherri

Pleva.

We HoPe you Like it!the new newsletter name – the Pioneer Spirit – reflects all that is

good about Pioneer and its employees.

the name captures the strength of character, strong heart and

gutsy nature that Pioneer employees demonstrate every day.

the newsletter name also reflects the teamwork that shows what

can happen when everyone works together.

We hope your newsletter communicates the true Pioneer Spirit.

Our Winner!

the winning newsletter name the Pioneer

Spirit was submitted by Judy mitchell in

Accounts Payable.

Judy was very surprised her entry won. “i

was talking with my husband and brain-

storming ideas,” she remembers. “He

reminded me that i always brag about the

wonderful attitude and spirit of the em-

ployees and he asked ‘Why not enter?’ so i

submitted the idea for the newsletter.”

Judy has been with the company for four

years. “i think we have a great group

of people here,” she says. “this is a big

company but it keeps a family atmosphere.

People always reach out and help each

other. We work for a wonderful company

and i am lucky to be here.”

Judy won a $250 Wal-mart Gift Card.

in this issue:• page 2 turnkey success• page 3 Wireline services• page 4 Your benefits Are our priority• page 4 behavior-based training

Driller's cabin of PDC Rig 67

PDC Rig 67 at rig showing

Mast integrated Top Drive.

2 | T h e P i o n e e r S P i r i T | S u m m e r 2 0 0 9 P i o n e e r D r i l l i n g C o m P a n y

Our People Are the Best

As you know, our industry has been hit with

unprecedented economic challenges.

the oversupply of natural gas in the u.S. has

put downward pressure on price expecta-

tions. We have tight credit markets, a global

recession and our industry’s land rig count has

been cut in half. When our customers reduce

spending, we feel it.

But my message is that Pioneer remains

a financially strong company and we are

committed to its long-term success. We are

committed to you -- our employees -- and your

safety, as well as providing you with training,

development and competitive benefits.

Why am i optimistic?

• We have a strong business model.

• We have a modern, high quality drilling

fleet and wireline, fishing, rental and well

services fleet that have advantages in up

and down markets.

• We have geographic diversification.

• our Production Services capability,

coupled with our international division,

transformed Pioneer from a pure-play u.S.

land driller into a multi-national, energy

services provider.

And most of all, i know we have the best peo-

ple in the industry. our Drilling and Production

Services’ teams have both seasoned personnel

and young talented crews. We have knowl-

edgeable dedicated workers in our yards and

offices. our people work hard. our people get

results for our customers. our people maintain

our equipment. i know all of you perform at

the highest level.

i had a chance to visit with our PDC rig 67

crew before they went to work in north Dakota

and it was great to see their enthusiasm and

excitement and how well they represent

Pioneer.

All of us in the industry, not just Pioneer, are

refocusing our efforts on efficiency, service

and quality. What can each of us do?

• During challenging times, it is easy to be-

come distracted. Let’s continue to focus

on our safety, whether at work or home.

• All of us can help reduce costs by making

sure that what we spend will generate a

return for the company.

• When i refer to service, i mean more than

just customer service. Let’s all help each

other internally and provide service when

information or assistance is needed.

i believe that challenges bring opportunities

and i know there is light at the end of the long

tunnel.

thank you for all you do.

With Pioneer’s rich history in the energy business, going back to 1968, it is not surprising the company has an established turnkey business with an enviable reputation.

Turnkey can be described in simple terms: risk and reward. Pioneer assumes the risk on a project and earns

a higher profit margin for successful completion.

Pioneer has all the important in-gredients for turnkey success: risk management expertise, technical know-how and drilling expertise.

Currently there are two turnkey proj-ects underway. PDC Rig 11 is work-ing in Goliad County for Lightning Oil Co. and PDC Rig 24 is working for Suemaur Exploration and Pro-duction in Galveston County. Three turnkey projects are pending.

“In 2009 we expect to have approxi-mately 12-15 turnkey projects, more than usual,” explains Buddy Shamblin, Vice President/ Turnkey Manager in South Texas. “The current economic environment makes turnkey work more desirable for operators because they go into a project knowing its fixed cost.”

track record “With our respected operating experi-ence and qualified drilling personnel, we have a highly qualified team that has worked hard to establish a proven track record of performance,” says Shamblin.

He works with F.C. “Red” West, President, Pioneer Drilling Services, Don Lacombe, Senior Vice Presi-dent, Marketing, and Paul Snelling, Marketing/ Operations in South Texas, to evaluate projects and develop bids.

“I have worked with “Red” and Don doing turnkey projects dating back to when we worked for Flournoy Drilling in South Texas in the 1980s,” says Shamblin.

Shamblin and West each have about 40+ years in the business, Lacombe has over 30 years experience and Snelling has 20 + years.

“Our combined experience, espe-cially in the South Texas area, is a powerful combination,” adds West.

“We know the area well, understand the challenges, and have done con-siderable research through the years. We have a working knowledge of the seismic, geologic and drilling data to know how to achieve the desired results for both the operator and Pio-neer. All of this, of course, gives us a competitive advantage.”

What is turnkey?A turnkey project means Pioneer drills a well for a fixed price, regard-less of the time it takes to complete the job and any problems encoun-tered. Pioneer assumes the risk and that means the profit margins are higher than on a daywork contract.

“Our goal is to evaluate the risks and prepare a bid that we believe will be successful,” adds Lacombe. “In fact, we may evaluate a project and decide

not to submit a bid because the proj-ect does not meet our criteria.”

The team works hard to reduce the risks that come with turnkey drilling.

“We want a successful project and our track record says we know how to do that,” says Shamblin. “We drill the well to the specified depth and when we have the first log on the bank at total depth we are done.”

He adds that it is a great feeling when “we invest a lot of hard work in evaluating a project and take it from a bid status all the way through to successful completion. It is very rewarding when we meet the goals of our customer and our own goals, and Pioneer adds another successful turnkey project to its bottom line.”

He gives credit to Pioneer’s experi-enced team, especially the drilling personnel, concluding, “we have every reason to be proud of our entire

team and its success rate.”

Pioneer haS a TraCk reCorD of Turnkey SuCCeSS

continued from page 1

PDC rig 67 haS iT all

Wm. Stacy Locke President and Ceo

Pioneer and Customer Work togetherPDC Rig 67 is working for Whiting Petroleum Corp., a Denver-based independent oil and gas company that acquires, exploits, develops and ex-plores for crude oil and natural gas liq-uids primarily in the Permian, Rocky Mountain, Mid-Continent, Gulf Coast and Michigan basins of the United States.

According to John Chris-man of Whiting, “Rigs like 66 and 67 are best-equipped to get our drill-ing times where we want them. We are well on our way to an average time under 30 days from spud to rig release.”

Chrisman notes that Whiting is pleased that Pioneer has a commit-ment to the area. He also appreci-ates the quality of the Pioneer crews.

“Having local guys on theses rigs is important to us,” he adds. “These are great crews in North Dakota and they are focused on getting the job done

correctly and safely.”

Pioneer HAS A

ComPetitive

ADvAntAGe

WitH turnkey

ProJeCtS.

PDC Rig 24 is working a turnkey project.

Left:PDC Rig 67 crew with Stacy Locke (fourth from left), President and CEO.

Below left: Automated Catwalk.

Above: John Chrisman of Whiting Petroleum (center) with Wyatt Halliday (left) and Stacy Locke.

Left: F. C. “Red” West, President, Pioneer Drilling Services.

T h e P i o n e e r S P i r i T | S u m m e r 2 0 0 9 | 3

Winter in nortH DAkotAWorking in sub zero weather,

when temperatures can go to -42

degrees, without wind chill, brings

unique challenges.

Personnel take safety precautions

such as wearing layers of cloth-

ing and face masks to prevent

frostbite.

Wireline trucks are well-insulated

when built and may get an ad-

ditional heater added.

Grease products used for pressure

work have lighter viscosity.

Winter usually runs from october

through march, although June

2009 recorded a record snowfall.

Pioneer’s Wireline Services is at the forefront of an effective completion technology, and thanks to the collective strength of a quality team, is making history in the Bakken formation in North Dakota.

Pioneer operates Penkota Wireline, the largest wireline services company in the area, with 10 wireline trucks in Williston and three in Dickinson. The company has the most equipment and has an impressive track record of get-ting results - safely - for its customers.

Mark Gjovig, Vice President of Pio-neer Wireline Services, explains “We have developed a ‘niche’ using a new technology and we have been success-ful with it for almost three years. Credit goes to our team for conquering this method and ensuring we offer our customers quality performance and exemplary safety.”

The team is busy working in the Bak-ken formation, one of the biggest plays in the United States. The U.S. Geo-logical Survey estimates the formation may hold 3.65 billion barrels of oil and natural gas.

Horizontal Fracturing techniqueHorizontal drilling is a technology that has become popular because of its ad-vantages. Wells are drilled vertically to about 10,000 feet, then “kick out” for perhaps 15,000 feet horizontally.

Conventional drilling completion techniques include perforating, fracture stimulation and flowback and are often time-consuming. The Wireline team is proving that effective techniques at the hands of experienced personnel can lower completion costs and reduce downtime for operators.

The question of what is the best way to stimulate rock and facilitate drilling led to the Wireline team adapting the traditional “Plug and Perforating” or

“Plug and Shoot” technology in a new and improved way.

This new method treats a horizontal leg in 500 feet sections separately. Perforat-ing guns are lowered into the well and placed in certain positions. Holes are created in the casing through which oil can flow in a controlled manner.

When treating one 500 ft section, it is necessary to pump a plug to seal off the first section. Each section will be frac-tured and treated maybe up to 15 times.

The goal is to control costs and keep downtime minimal and this method is proving successful in treating a hori-zontal leg.

The first customer to use this method was EOG and now more than 20 com-panies have utilized this technique.

expertise With technologyBuddy Caulder, District Manager in North Texas that serves the Barnett Shale area, achieved success in learning and using the technology in the Barnett Shale area. He then was instrumental in adapting the successful technology from the Barnett Shale to the Bakken formation, where the weather is drasti-cally different.

Combined Strength is An Asset “Our success rate proves the collec-tive strength of our company and our tremendous team,” says Brant Boeckel, District Manager, Penkota Wireline, who has 30 years experience in the industry. “When we need help, we can draw on our experienced team in Montana, Utah and Texas. This is a col-lective success due to the efforts of our managers, office personnel, gun loaders, engineers and operators, who are 38 talented people.”

Working with Boeckel is Greg Paluck, Operations Manager, who also has 30 years industry experience, and Tim Schmidt, Technical Manager, with 30 years experience.

Additionally, the Wireline Services Group has reason to be proud of its safety record, achieving zero record-ables for more than two years.

“We were the first to bring this new technology to the Williston Basin,” concludes Gjovig, “and it is now an im-

portant part of our capabilities. We suc-cessfully met the challenge and proved that we can make anything happen that

a customer needs.”

PerFormAnCe CAPABiLitieS SeConD to none

wireline ServiCeS SeTS STanDarDS wiTh new TeChnology

SAFety miLeStoneS

Congratulations to these rigs for

reaching a major safety milestone

of working time without record-

able incidents.

Four yeArSPDC rig 25

tHree yeArSPDC rig 17

PDC rig 19

PDC rig 30

PDC rig 32

tWo yeArSPDC rig 2

PDC rig 3

PDC rig 8

PDC rig 12

PDC rig 14

PDC rig 16

PDC rig 20

PDC rig 24

PDC rig 26

PDC rig 27

PDC rig 31

PDC rig 34

PDC rig 36

PDC rig 37

PDC rig 58

PDC rig 59

PDC rig 60

one yeArPDC rig 5

PDC rig 6

PDC rig 7

PDC rig 21

PDC rig 22

PDC rig 33

PDC rig 38

PDC rig 40

PDC rig 41

PDC rig 42

PDC rig 47

PDC rig 48

PDC rig 49

PDC rig 50

PDC rig 51

PDC rig 55

PDC rig 56

PDC rig 61

PDC rig 63

PDC rig 64

PDC rig 65

the Colombia Division, which

consists of PDC rigs 52, 53, 301,

302 and 303, reached 1 million

manhours without a Lost time

Accident.

Kenworth T800 - Wireline Unit 55 located in E. Texas.

Personnel in Pioneer's Wireline Services know how to work safely and efficiently in severe weather. All the equipment is winterized.

4 | T h e P i o n e e r S P i r i T | S u m m e r 2 0 0 9 P i o n e e r D r i l l i n g C o m P a n y

Pioneer SuPPortS CommunityPioneer Drilling showed support for the new town, north

Dakota FFA Chapter at a recent event.

receiving recognition were Pioneer representatives Skip

Locken and Lonnie Helde.

the new town FFA chapter hosted a breakfast for 400 public

school students, staff and community members to extend

appreciation for the community’s support.

Community Partner -- Representing Pioneer at the New Town, North Dakota FFA breakfast were (l-r) Lonnie Helde, Drilling Yard Foreman, Kurt Wollschlager, New Town FFA Advisor, and Skip Locken, Pioneer Drilling Division Manager.

The Pioneer Drilling Company

newsletter is published by Pioneer

Drilling for our employees and

customers. Questions or comments

directed to Newsletter@pioneerdrlg.com

The online version of the newsletter can

be found on www.pioneerdrlg.com. A

Spanish version is available on request.

Pioneer Drilling Company

1250 N.E. Loop 410, Suite 1000

San Antonio, Texas 78209

www.pioneerdrlg.com

Editorial Committee

J. Blaine David, Joe Eustace, Tomas Avila,

Kenny Fernandez, Alma Green, Greg

Lakey, Laura Martinez, Esteban Pereira,

Deanna Perez, Jerry Rios

Editorial Coordination:

Wendy Cederberg

Design

MDesign

www.mdesignfreelance.com

Pioneer is always looking for ways to enhance its benefits for employees.

Here is a reminder of what Pioneer offers to employees and their families, with many benefits enhanced for 2009.

Health insurance

• Low deductibles of $500 for individu-als and $1,000 for family. The industry average is $1,000 indi-vidual and $2,000 family.

• Pioneer pays 100% for the employee coverage and 75% of the premiums to cover family members. The industry average is paying 70% of the premiums to cover family members.

Dental insurance

• Pioneer pays 100% of the coverage for employees. This benefit is new for the majority of employees.

• Orthodontics coverage for all employees. This is a new benefit.

Company Paid Benefits

• Base Life Insurance (1 x base annual salary) for all employees. New for some employees.

• Long Term Disability Insurance for all employees. New for some employees.

optional employee Benefits

• Supplemental Life Insurance (1x base annual salary) for employees; $25,000 for the spouse and $5,000 per child.A new benefit for some employees.

• Short Term Disability Insurance A new benefit for some employees.

Entering 2009, the benefit plans from all of Pioneer’s legacy companies were merged into one plan. The Plan Year was also changed to a calendar year of Janu-ary 1, 2009 through December 31, 2009.

Questions about Benefits may be directed to Greg Lakey in Human Resources,

Benefits (210-870-2157).

your BenefiTS are alwayS our PrioriTy

Pioneer is always ready to enhance its safety training program to benefit its employees.

Pioneer’s behavior-based safety training program was recently fine-tuned and feedback from participants says the pro-gram is already showing positive results.

Since November 2008 more than 500 employees, from both the drilling side and production side, have participated in 15 classes that include Leadership training and Teambuilding classes.

The one-day class focuses on the im-portance of getting to know co-workers, motivational tips and safety awareness at all times.

According to Jerry Rios, HSE Manager, “Behavioral-based mandatory training has had a tremendous impact on our company in providing the safest work-place possible. Company-wide we are hitting record lows with a recordable incident rate in May of 1.28. Of course, our Safety Vision is zero incidents.”

Clayton Myers and Steve Brosig, HSE Specialists, agree the classes are prov-ing very effective. “We have a lot of participation in the classes and we are receiving positive feedback.”

Behavior-based safety training identifies and analyzes behavior, provides solu-tions to modify the behavior and offers a follow-up.

“We want to keep our employees safe at all times,” concludes Rios. “We are always eager to make our program bet-ter and we want our employees to know

we are here for them.”

reSuLtS Are PoSitive

Behavior-BaSeD Training haS imPaCT

in our mAiLBoxTo: PwS rig 63

Pioneer Well Services rig 63

completed three Plug and Abandon-

ment wells for Luminant mining in

Limestone County, texas. Lester

“Peanut” mott (toolpusher) is one of

the most professional well service

persons i have worked with in 40

years of oilfield service work.

His crew is exemplary in the perfor-

mance of their duties. each member

of the crew maintained a positive

and willing “Get the job done” at-

titude. When problems arose we

had the full support and back-up of

the Bryan yard.

the bottom line was the profes-

sional performance of the crew and

the outstanding support and back-up

of the yard.

thanks and regards for a job well

done,

Gary ButlerLuminant Mining

This is the first class of the new behavior-based safety training. The document is a signed contract for Pioneer’s Safety Vision which is zero incidents.

Participants learn ways to keep safety a priority.