UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
SCHEDULE 13D
(AMENDMENT NO. 5)
UNDER THE SECURITIES EXCHANGE ACT OF 1934
PIONEER DRILLING COMPANY
(Name of Issuer)
COMMON STOCK, $.10 PAR VALUE PER SHARE
(Title of Class of Securities)
840553
(CUSIP Number)
RICHARD E. BLOHM, JR., 1415 LOUISIANA STREET, SUITE 3000, HOUSTON, TEXAS 77002
(Name, Address and Telephone Number of Person Authorized
to Receive Notices and Communications)
with a copy to:
DARRYL M. BURMAN, 1900 WEST LOOP SOUTH, SUITE 1100, HOUSTON, TEXAS 77027
AUGUST 11, 2004
(Date of Event which Requires Filing of this Statement)
If the filing person has previously filed a statement on Schedule 13G to report
the acquisition which is the subject of this Schedule 13D, and is filing this
schedule because of Rule 13d-1(b)(3) or (4), check the following box o.
NOTE: Six copies of this statement, including all exhibits, should be filed
with the Commission. See Rule 13d-1(a) for other parties to whom copies are to
be sent.
The information required on the remainder of this cover page shall not be
deemed to be "filed" for the purpose of Section 18 of the Securities Exchange
Act of 1934 ("Act") or otherwise subject to the liabilities of that section of
the Act but shall be subject to all other provisions of the Act.
CUSIP NO. 840553 13D PAGE 2 OF 10
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1. NAME OF REPORTING PERSON S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON:
WEDGE Energy Services, L.L.C.; Tax I.D. No. 76-0624532
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2. CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP: (a) [ ] (b) [ ]
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3. SEC USE ONLY:
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4. SOURCE OF FUNDS
AF
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5. CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO
ITEMS 2(D) OR 2(E) [ ]
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6. CITIZENSHIP OR PLACE OF ORGANIZATION:
United States
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NUMBER OF SHARES BENEFICIALLY OWNED BY EACH REPORTING PERSON WITH:
7. SOLE VOTING POWER: -0-
8. SHARED VOTING POWER: 8,505,508*
9. SOLE DISPOSITIVE POWER: -0-
10. SHARED DISPOSITIVE POWER: 8,505,508*
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11. AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON:
8,505,508*
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12. CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES [ ]
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13. PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11):
22.50%
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14. TYPE OF REPORTING PERSON:
OO: Limited Liability Company
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* Represents shares of common stock, par value $.10 per share ("Common Stock"),
of Pioneer Drilling Company, including (i) 7,232,007 shares of Common Stock
held of record as of August 4, 2004, (ii) 6,264,501 shares of Common Stock
issued upon conversion of (a) the 6-3/4% Convertible Subordinated Debenture,
Series B, on August 11, 2004, in the original principal amount of $25,000,000,
and (b) upon conversion of an additional 6-3/4% Convertible Subordinated
Debenture, Series B, in the original principal amount of $2,000,000.00, (iii)
9,000 shares of common stock owned by Pebbleton Corporation, N.V., a WEDGE
affiliate and (iv) the sale of 5,000,000 shares of common stock as reported
herein.
CUSIP NO. 840553 13D PAGE 3 OF 10
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1. NAME OF REPORTING PERSON S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON:
Issam M. Fares
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2. CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP: (a) [ ] (b) [ ]
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3. SEC USE ONLY:
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4. SOURCE OF FUNDS
AF
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5. CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT
TO ITEMS 2(D) OR 2(E) [ ]
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6. CITIZENSHIP OR PLACE OF ORGANIZATION:
Lebanon
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NUMBER OF SHARES BENEFICIALLY OWNED BY EACH REPORTING PERSON WITH:
7. SOLE VOTING POWER: -0-
8. SHARED VOTING POWER: 8,505,508*
9. SOLE DISPOSITIVE POWER: -0-
10. SHARED DISPOSITIVE POWER: 8,505,508*
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11. AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON:
8,505,508*
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12. CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES [ ]
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13. PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11):
22.50%
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14. TYPE OF REPORTING PERSON:
IN
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* Represents shares of common stock, par value $.10 per share ("Common Stock"),
of Pioneer Drilling Company, including (i) 7,232,007 shares of Common Stock
held of record as of August 4, 2004, (ii) 6,264,501 shares of Common Stock
issued upon conversion of (a) the 6-3/4% Convertible Subordinated Debenture,
Series B, on August 11, 2004, in the original principal amount of $25,000,000,
and (b) upon conversion of an additional 6-3/4% Convertible Subordinated
Debenture, Series B, in the original principal amount of $2,000,000.00, (iii)
9,000 shares of common stock owned by Pebbleton Corporation, N.V., a WEDGE
affiliate and (iv) the sale of 5,000,000 shares of common stock as reported
herein.
CUSIP NO. 840553 13D PAGE 4 OF 10
STATEMENT ON SCHEDULE 13D
Introductory Note: All information herein with respect to Pioneer
Drilling Company, a Texas corporation, is to the best knowledge and belief of
the Reporting Persons, as defined herein.
ITEM 1. SECURITY AND ISSUER.
This Fifth Amended Statement on Schedule 13D relates to the common
stock, par value $.10 per share (the "Common Stock"), of Pioneer Drilling
Company, a Texas corporation (the "Company" or "Pioneer"). The principal place
of business of Pioneer is located at 9310 Broadway, Building I, San Antonio,
Texas 78217.
ITEM 2. IDENTITY AND BACKGROUND.
This Fifth Amended Statement on Schedule 13D is filed by (i) WEDGE
Energy Services, L.L.C., a Delaware limited liability company ("WEDGE"), and
(ii) Mr. Issam M. Fares, an individual ("Fares" and, together with WEDGE, the
"Reporting Persons").
The address of the principal place of business for WEDGE is 1415
Louisiana Street, Suite 3000, Houston, Texas 77002 and the address of Mr. Fares
is Pietermaai 15, Curacao, Netherlands Antilles. Mr. Fares is a citizen of the
country of Lebanon.
WEDGE was formed for the purpose of making investments in the energy
industry. The officers of WEDGE consist of (i) Mr. Michael E. Little,
President; (ii) Mr. James M. Tidwell, Vice President and Treasurer; and (iii)
Mr. Richard E. Blohm, Jr., Vice President and Secretary. Each of Messrs.
Little, Tidwell and Blohm is also a director of WEDGE. The address for each of
Messrs. Little, Tidwell and Blohm is 1415 Louisiana Street, Suite 3000,
Houston, Texas 77002, and each is a citizen of the United States. The filing
of this Fifth Amended Statement on Schedule 13D shall not be construed as an
admission that Messrs. Little, Tidwell and Blohm are, for the purposes of
Section 13(d) or Section 13(g) of the Securities Exchange Act of 1934, as
amended (the "Act"), the beneficial owners of any securities covered by this
Statement.
Mr. Little, President of WEDGE, and a Director of the Company, owns
749,715 shares of Common Stock and has vested options to acquire an additional
83,333 shares of Common Stock. No agreement exists between Mr. Little, Mr.
Fares and WEDGE concerning any agreement, oral or written, to vote the shares
of the Company, or to act in concert with one or another, and each individually
and collectively disclaim membership in or among any control group.
Neither WEDGE nor Mr. Fares, nor to the knowledge of the Reporting
Persons, Messrs. Little, Tidwell and Blohm, has been during the last five years
(i) convicted of any criminal proceeding (excluding traffic violations or
similar misdemeanors) or (ii) a party to a civil proceeding of a judicial or
administrative body of competent jurisdiction, and as a result of such
proceeding, was or is subject to a judgment, decree or final order enjoining
future violations of, or prohibiting or mandating activities subject to, United
States federal or state securities laws or finding any
CUSIP NO. 840553 13D PAGE 5 OF 10
violation with respect to such laws. Mr. Fares is the ultimate beneficial owner
of all of the outstanding ownership interests of WEDGE.
ITEM 3. SOURCE AND AMOUNT OF FUNDS OR OTHER CONSIDERATION.
On July 9, 2004, WEDGE tendered an Irrevocable Conversion Notice and
Agreement to Pioneer in the original aggregate principal amount of $27,000,000
of Pioneer's 6.75% Convertible Subordinated Debenture, Series B (the
"Debenture"), into 6,264,501 shares of Common Stock immediately prior to the
closing of Pioneer's underwritten public offering based on a conversion price
of $4.31 per share. A copy of the Irrevocable Conversion Notice and Agreement
is attached as Exhibit 99.1.
On August 5, 2004, the Company, WEDGE, Michael E. Little and William
H. White (together with WEDGE and Mr. Little, the "Selling Shareholders")
entered into an Underwriting Agreement with Jefferies & Company, Inc., Raymond
James & Associates, Johnson Rice & Company L.L.C., Sterne Agee & Leach, Inc.,
Brean Murray & Co., Inc., Pritchard Capital Partners, LLC and Stifel, Nicolaus
& Company, Incorporated (the "Underwriters"), relating to the underwritten
public offering of (1) up to 4,600,000 shares (the "Company Shares") of the
Company's common stock, par value $0.10 per share (the "Common Stock"),
including 600,000 shares which may be purchased pursuant to the Underwriters'
over-allotment option, to be sold by the Company and (2) up to 6,419,320 shares
(the "Shareholder Shares", and together with the Company Shares, the "Shares")
of Common Stock, including 837,302 shares which may be purchased pursuant to
the Underwriters' over-allotment option, to be sold by the Selling
Shareholders. The sale of 5,000,000 Shareholder Shares by WEDGE was consummated
on August 11, 2004, at a gross sale price of $6.90.
A copy of the Underwriting Agreement is filed as Exhibit 1.1 to the
Form 8-K filed by Pioneer with the Securities and Exchange Commission on August
6, 2004, and is incorporated herein by reference.
A registration statement on Form S-1 (Registration No. 333-117279) was
initially filed with the Securities and Exchange Commission on July 9, 2004,
which was amended on July 28, 2004 and further amended on August 4, 2004, under
the Securities Act of 1933, as amended the (the "Securities Act"), and an
amendment to the registration statement on Form S-1 (Registration No.
333-117976) was filed with the Securities and Exchange Commission on August 6,
2004 pursuant to Rule 462(b) under the Securities Act, and each is incorporated
herein by reference.
WEDGE held the Debenture pursuant to the terms of a Debenture Purchase
Agreement entered into between WEDGE and Pioneer on July 3, 2002 (the
"Debenture Purchase Agreement").
ITEM 4. PURPOSE OF TRANSACTION.
Underwriting Agreement and the Sale of Shareholder Shares. On August
11, 2004, WEDGE sold 5,000,000 shares of Pioneer's Common Stock at a gross per
share sales price of $6.90 pursuant
CUSIP NO. 840553 13D PAGE 6 OF 10
to that certain Underwriting Agreement executed on August 5, 2004 relating to
the underwritten public offering of (1) up to 4,600,000 of the Company Shares
of the Company's Common Stock, including 600,000 shares which may be purchased
pursuant to the Underwriters' over-allotment option, to be sold by the Company
and (2) up to 6,419,320 Shareholder Shares of Common Stock, including 837,302
shares which may be purchased pursuant to the Underwriters' over-allotment
option, to be sold by the Selling Shareholders (as more fully described in
Exhibit 1.1 to the Form 8-K filed by Pioneer with the Securities and Exchange
Commission on August 6, 2004).
Irrevocable Conversion Notice and Agreement. In connection with that
certain Underwriting Agreement, on July 9, 2004, WEDGE tendered an Irrevocable
Conversion Notice and Agreement to Pioneer in the original aggregate principal
amount of $27,000,000 of Pioneer's 6.75% Convertible Subordinated Debenture,
Series B, into 6,264,501 shares of Common Stock immediately prior to the
closing of Pioneer's underwritten public offering. The Debentures were
converted at a per share price of $4.31 on August 11, 2004.
Registration Statement. A registration statement on Form S-1
(Registration No. 333-117279) was initially filed with the Securities and
Exchange Commission on July 9, 2004, which was amended on July 28, 2004 and
further amended on August 4, 2004, under the Securities Act, and registration
statement on Form S-1 (Registration No. 333-117976) filed with the Securities
and Exchange Commission on August 6, 2004 pursuant to Rule 462(b) under the
Securities Act.
As a result of the transaction described above, the Reporting Persons
ownership of Common Stock has been reduced to 8,505,508 shares and their
ownership percentage has been reduced to 22.5%.
In accordance with the Debenture Purchase Agreement, the Company has
granted to WEDGE the preemptive right, subject to certain exceptions, to
acquire additional capital stock of any class or series, or debt convertible
into capital stock, the Company may issue equal to the percentage of Pioneer's
outstanding Common Stock (assuming the conversion of all outstanding
convertible preferred stock or debt) held by WEDGE immediately preceding any
such issuance of Common Stock. Such preemptive right was waived by WEDGE for
the transactions described above. The preemptive rights shall terminate in the
event WEDGE holds less than 10% of the outstanding Common Stock of the Company
or four years following the date Pioneer becomes listed on the NASDAQ National
Market List or on a nationally recognized securities exchange; provided,
however, in the event after such listing the Company shall become not so
listed, then the preemptive rights shall be reinstated, subject to any other
independent reason for termination. Additionally, so long as WEDGE shall own at
least 10% of the capital stock of the Company, the Company has agreed to
support and cause to be placed on the ballot at any election of directors of
Pioneer one name designated by WEDGE who shall be a nominee to the Board of
Directors of Pioneer (the "WEDGE Nominee") but only if necessary to cause at
least one WEDGE Board Nominee to continue as a director of Pioneer after such
election. Further, the WEDGE Nominee shall be appointed to serve on the Audit
Committee and Compensation Committee of the Board of Directors. WEDGE continues
to agree that it would not sell, transfer or otherwise make a disposition of
any Common Stock of the Company other than into the public trading market under
Rule 144 or incident
CUSIP NO. 840553 13D PAGE 7 OF 10
to any registration right granted by Pioneer to WEDGE without first offering
the stock WEDGE desires to transfer to Pioneer in writing at the price and
other terms under which WEDGE desires to transfer such stock. Pioneer shall
then have the assignable right to acquire the stock on such terms as provided
to Pioneer by WEDGE upon notification of WEDGE's intent to dispose of its
stock.
The conversion of the Debenture by WEDGE was the result of negotiated
transactions with Pioneer. Further, the Reporting Persons intend to monitor
their investment in Pioneer on a continuing basis in the ordinary course of
business and, depending upon the price of, and other market considerations
relating to the Common Stock, subsequent developments affecting Pioneer,
Pioneer's business and prospects, other investment and business opportunities
available to the Reporting Persons, general stock market and economic
conditions (including the price of oil and natural gas), tax considerations and
other factors deemed relevant, may decide to increase or decrease the size of
their investment in Pioneer.
Other than as described in this Fifth Amended Statement on Schedule
13D, at the present time neither of the Reporting Persons has specific plans or
proposals which would relate to or result in:
(i) the acquisition by any person of additional securities of
Pioneer, or the disposition of securities of Pioneer;
(ii) an extraordinary corporate transaction, such as a merger,
reorganization or liquidation, involving Pioneer or any of
its subsidiaries;
(iii) a sale or transfer of a material amount of assets of Pioneer
or any of its subsidiaries;
(iv) any change in the present Board of Directors or management of
Pioneer, including any plans or proposals to change the
number or term of directors or to fill any existing vacancies
on the Board of Directors;
(v) any material change in the present capitalization or dividend
policy of Pioneer;
(vi) any other material change in Pioneer's business or corporate
structure;
(vii) changes in Pioneer's charter, bylaws or instruments
corresponding thereto or other actions which may impede the
acquisition of control of Pioneer by any person;
(viii) causing a class of securities of Pioneer to be delisted from
a national securities exchange or to cease to be authorized
to be quoted in an inter-dealer quotation system of a
registered national securities association;
(ix) a class of equity securities of Pioneer becoming eligible for
termination of registration pursuant to Section 12(g)(4) of
the Act; or
CUSIP NO. 840553 13D PAGE 8 OF 10
(x) any actions similar to those enumerated above.
The Reporting Persons reserve the right to formulate specific plans or
proposals with respect to, or to change their intentions regarding, any or all
of the foregoing, and reserve their rights under the Debenture Purchase
Agreement and the Debenture Agreement and all transactions contemplated
thereby.
WEDGE may, from time to time, discuss with management and other
shareholders of Pioneer and other parties methods by which Pioneer can best
preserve and increase its value. Such methods may involve expansion or
contraction of the geographic scope of Pioneer's operations, strategic
alliances, business combinations, cost containment measures and other similar
arrangements. If as a result of such discussions, the Reporting Persons decide
to pursue any of the methods for preserving and increasing the value of Pioneer
described herein, then the consummation thereof could involve transactions in
the nature of those described in subparagraphs (i) through (x) above.
ITEM 5. INTEREST IN SECURITIES OF THE ISSUER.
As set forth in this Fifth Amended Statement on Schedule 13D, WEDGE
currently owns 8,505,508 shares of Common Stock of Pioneer. The 8,505,508
shares of Common Stock of Pioneer represent 22.50% of the outstanding Common
Stock (based on the number of shares of Common Stock outstanding as of June 30,
2004, as represented by Pioneer). Based on certain representations made by
Pioneer to WEDGE, on a fully diluted basis, which assumes exercise of all
warrants and stock options, the 8,505,508 shares of Common Stock of Pioneer
represents 22.50% of the outstanding Common Stock of Pioneer.
Mr. Fares may be deemed to beneficially own and thereby share voting
and dispositive power over the Stock issued to WEDGE. See Item 2.
Other than the transactions described in Item 3 and this Item 5, none
of the Reporting Persons has effected any transactions in the Common Stock
during the preceding 60 days.
ITEM 6. CONTRACTS, ARRANGEMENTS, UNDERSTANDINGS OR RELATIONSHIPS WITH RESPECT
TO SECURITIES OF THE ISSUER.
Except for the agreements described in response to Items 3 and 4, to
the best knowledge of the Reporting Persons, there are no contracts,
agreements, arrangements, understandings or relationships (legal or otherwise)
between the persons enumerated in Item 2 and any other person with respect to
the securities of Pioneer, including, but not limited to, transfer or voting
arrangements, puts or calls, guarantees of profits, division of profits or
losses, or the giving or withholding of proxies.
CUSIP NO. 840553 13D PAGE 9 OF 10
ITEM 7. MATERIAL TO BE FILED AS EXHIBITS.
99.1 Irrevocable Conversion Notice and Agreement
99.2 Power of Attorney from Issam M. Fares.
99.3 Joint Filing Agreement between the Reporting Persons.
CUSIP NO. 840553 13D PAGE 10 OF 10
SIGNATURES
After reasonable inquiry and to the best of each of the undersigned's
knowledge and belief, each of the undersigned certifies that the information
set forth in this statement is true, complete and correct.
Dated: August 17, 2004 WEDGE ENERGY SERVICES, L.L.C.
By: /s/ Richard E. Blohm, Jr.
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Name: Richard E. Blohm, Jr.
Title: Secretary
Dated: August 17, 2004 ISSAM M. FARES
By: /s/ Richard E. Blohm, Jr.
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Name: Richard E. Blohm, Jr.
Title: Attorney-In-Fact