Pioneer Drilling Co. tempered expectations for its second quarter Monday, saying there is less demand for its services in some markets because of falling prices for oil and natural gas liquids.
The land-contract driller said not as many drilling rig contracts were renewed in the Eagle Ford Shale of South Texas, contributing to the lessened expectations.
In Pioneer’s drilling services division, management said the second-quarter’s average drilling rig utilization rate will fall in the low end of its previous guidance of 89 percent to 91 percent.
Also, the San Antonio-based company expects its drilling services margin to be $7,600 to $8,000 per day, compared to its previous guidance of about $8,000 to $8,300 per day.
“With the recent declines in oil and natural gas liquids prices, we are seeing some softening of demand in certain markets,” including in the Eagle Ford Shale, said Pioneer CEO William Stacy Locke in a statement.
Pioneer’s shares fell almost 12 percent on the news, to close Monday down 90 cents at $6.71.
The company also said it expects revenue growth in its production services division to be at the low end of its earlier estimate of 5 percent to 10 percent growth.
The company said less demand for its coiled tubing services in the second quarter led to its lower expectations for margins in production services.
Coiled tubing completes or stimulates wells.
Pioneer’s guidance came on the same day that it said its common stock will be listed on the New York Stock Exchange starting Thursday under its current ticker symbol, PDC. Until then, Pioneer’s shares will continue to trade on the NYSE Market.