UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

SCHEDULE 14A INFORMATION

Proxy Statement Pursuant to Section 14(a) of the

Securities Exchange Act of 1934

(Amendment No.    )

Filed by the Registrantx¨                            Filed by a Party other than the Registrant¨

Check the appropriate box:

PIONEER DRILLING COMPANY

(Name of Registrant as Specified in Its Charter)

(Name of Person(s) Filing Proxy Statement, if Other Than the Registrant)

Payment of Filing Fee (check the appropriate box):

PIONEER DRILLING COMPANY

1250 N.E. Loop 410, Suite 1000

San Antonio, Texas 78209

April 9, 201010, 2012

Dear Shareholder:

On behalf of the board of directors, we invite you to attend the 20102012 Annual Meeting of Shareholders of Pioneer Drilling Company. We will hold the meeting at 10:1:00 a.m.p.m., Central time, on Friday,Thursday, May 14, 2010,10, 2012, at the Petroleum Club of San Antonio, 7th Floor of the Energy Plaza Building, 8620 N. New Braunfels Street, San Antonio, Texas.

On the following pages you will find the Notice of Annual Meeting of Shareholders and Proxy Statement giving information concerning the matters to be acted on at the meeting. Our Annual Report to Shareholders describing Pioneer Drilling Company’s operations during the fiscal year ended December 31, 2009,2011, is enclosed.

We hope you will be able to attend the meeting in person. Whether or not you plan to attend, please take the time to vote by completing and returning your proxy card in the enclosed envelope before the meeting. If you attend the meeting, you may, if you wish, revoke your proxy and vote in person.

Thank you for your interest in Pioneer Drilling Company.

Sincerely,

Dean A. Burkhardt		Wm. Stacy Locke
Chairman		President and Chief Executive Officer

PIONEER DRILLING COMPANY

1250 N.E. Loop 410, Suite 1000

San Antonio, Texas 78209

NOTICE OF ANNUAL MEETING OF SHAREHOLDERS

To Be Held Friday,Thursday, May 14, 201010, 2012

To the Shareholders of Pioneer Drilling Company:

The 20102012 Annual Meeting of Shareholders of Pioneer Drilling Company will be held on Friday,Thursday, May 14, 2010,10, 2012, at 10:1:00 a.m.p.m., Central time, at the Petroleum Club of San Antonio, 7th Floor of the Energy Plaza Building, 8620 N. New Braunfels Street, San Antonio, Texas. At the meeting, we will ask you to consider and take action on the following:

This notice and the attached proxy statement are first being mailed to our shareholders on or about April 9, 2010.10, 2012. Our board of directors has set the close of business on March 31, 2010,22, 2012, as the record date for determining shareholders entitled to receive notice of and vote at the annual meeting. A list of all shareholders entitled to vote is available for inspection during normal business hours at our principal executive offices at 1250 N.E. Loop 410, Suite 1000, San Antonio, Texas 78209. This list will also be available at the meeting.

Important notice regarding the availability of proxy materials for the shareholder meeting to be held on Thursday, May 14, 2010.10, 2012. The proxy statement and annual report to shareholders are available at www.pioneerproxy.com.

Your vote is very important. Whether or not you plan to attend the annual meeting, we encourage you to read the proxy statement. Further, to be sure your vote counts and to assure a quorum, please vote, sign, date and return the enclosed proxy card, whether or not you plan to attend the meeting.

San Antonio, Texas

April 9, 201010, 2012

PIONEER DRILLING COMPANY

PROXY STATEMENT

FOR 20102012 ANNUAL MEETING OF SHAREHOLDERS

QUESTIONS AND ANSWERS ABOUT THE MEETING AND VOTING

1

1

We will count abstentions and broker non-votes as present for the purpose of establishing a quorum. A broker “non-vote” occurs when a broker holding shares for a beneficial owner does not vote on a particular proposal because the broker does not have discretionary voting power for that particular proposal and has not received instructions from the beneficial owner. If a quorum is not present, a majority in interest of those present or represented at the annual meeting may adjourn the meeting, without notice other than an announcement at the meeting, until a quorum is present or represented.

2

2

SECURITY OWNERSHIP OF CERTAIN BENEFICIAL

OWNERS AND MANAGEMENT

The following table shows the beneficial ownership of our common stock as of March 31, 201015, 2012 by (1) each person (or group of affiliated persons) who is known by us to beneficially own more than 5% of our common stock, (2) each of our directors and nominees, (3) each of the named executive officers listed in the summary compensation table in this proxy statement and (4) all our directors and executive officers as a group. As of March 31, 2010,15, 2012, we were not aware of any person beneficially owning more than 5% of the outstanding shares of our common stock, other than those listed below. Unless otherwise indicated below, all shareholders have the same principal business address as Pioneer. All persons listed in the table below have sole voting and investment power with respect to their shares unless otherwise indicated. As of March 31, 2010,15, 2012, there were 54,109,24661,880,310 shares of common stock outstanding.

3

4

PROPOSAL 1

ELECTION OF DIRECTORS

Our board of directors currently consists of five directors. Our board of directors is divided into three separate classes (Class I, Class II and Class III) with staggered terms. The current term of office for our Class III directorII directors will expire at the annual meeting.

Our board of directors has nominated Mr. Rauh,Wm. Stacy Locke and C. John Thompson, who currently servesserve on the board of directors, as the nomineenominees for election at the annual meeting as a Class III director.II directors. Mr. RauhLocke has served as one of our directors since October 2008.May 1995 and Mr. Thompson has served as one of our directors since May 2001.

Assuming the presence of a quorum, directors shallwill be elected by a plurality of the votes cast by the holders of shares of capital stock of Pioneer entitled to vote on the election of directors at the annual meeting. Any abstentions or broker non-votes will not affect the vote.If you properly sign and return the enclosed proxy, unless you withhold authority to vote for the nominee,nominees, the persons named as proxies will vote FOR the election of the nomineenominees listed below.We do not expect that Each of the nominee will refuse or be unablenominees has agreed to act as a director. If,serve if elected, however, if any of the nomineenominees becomes unable or unwilling to serve as a director, the persons named as proxies intend to vote the proxy shares for the election of any other person the board of directors may designate.

NomineeNominees

Wm. Stacy Locke has served as one of our directors as well as President of the Company since May 1995, when he joined Pioneer. In December 2003, Mr. Locke was appointed Chief Executive Officer. In addition to his continuous role as President, Mr. Locke has also served as Chief Financial Officer and Chief Operating Officer. Prior to joining Pioneer, Mr. Locke was in investment banking with Arneson, Kercheville, Ehrenberg & Associates from 1993 to 1995 and Chemical Banking Corporation from 1988 to 1992. Mr. Locke worked for Valero Energy Corporation, Huffco Petroleum Corporation and Tesoro Petroleum Corporation as a geologist from 1979 to 1986. Mr. Locke received a Bachelor’s Degree in geology from the University of California Santa Barbara and a Master of Business Administration Degree from Southern Methodist University.

Mr. Locke’s seventeen years of experience at Pioneer, including his service as Chief Executive Officer for nine years, gives him unique knowledge of the opportunities and challenges associated with our business. Mr. Locke’s familiarity with all aspects of Pioneer’s business and his historical understanding of its operations, combined with his understanding of the oil and gas industry, geology and investment banking makes him uniquely qualified to advise the board of directors and to lead Pioneer as Chief Executive Officer.

C. John Thompson has served as one of our directors since May 2001. Mr. Thompson currently serves as Chairman and Chief Executive Officer of Ventana Capital Advisors, Inc., a capital advisory company he founded in June 2004. Mr. Thompson has over 30 years experience in the energy capital business. Mr. Thompson has worked as a business consultant, in the energy capital business with Enron, the investment banking services business with a company he co-founded, Sagestone Capital Partners, and as the manager of the energy commercial banking business with InterFirst Bank in Houston.

As one of Pioneer’s longest-serving non-executive directors, Mr. Thompson brings an important institutional knowledge to the board of directors. His work as an executive in the oil and gas industry, and his

6

experience in the energy capital business including more than ten years in energy commercial banking, provides him with insights relating to many of the same issues facing our business, including markets, operational, regulatory, technological, and financial. Mr. Thompson also serves as a member of the Audit Committee and qualifies as an “audit committee financial expert.” Mr. Thompson holds a Master’s Degree in Business Administration with an emphasis in finance and accounting from the University of Texas at Austin, which enables him to provide guidance to the Board on finance and accounting-related matters. Mr. Thompson’s experience as founder of a capital advisory company and as a consultant provides the board of directors with a unique perspective into different industries and an understanding of various capital strategies.

Our board of directors unanimously recommends a vote “FOR” the election of Wm. Stacy Locke and C. John Thompson as Class II Directors.

DIRECTORS WITH A TERM EXPIRING IN 2013

John Michael Rauh has served as one of our directors since October 2008. Mr. Rauh served as Vice President and Corporate Controller of Kerr-McGee Corporation from 2001 until his retirement in 2006, where he was responsible for worldwide accounting, tax and Sarbanes-Oxley 404 compliance. He also served as a Founding Director of Kerr-McGee’s chemical operations spin-off. Mr. Rauh joined Kerr-McGee in 1981 and served in varyingvarious financial capacities including Vice President and Treasurer,Controller and Vice President and Controller, and Assistant Controller.Treasurer during his career at Kerr-McGee Corporation from 1981 until his retirement in 2006. Prior to joining Kerr-McGee, Mr. Rauh was an auditor with Arthur Young & Company, which merged with Ernst & Whinney in 1989 to form Ernst & Young. He received a master’s degreeMaster’s Degree in accounting from Oklahoma State University and a bachelor’s degreeBachelor’s Degree in accounting and economics from Northwestern Oklahoma State University. Mr. Rauh was elected in 2010 and currently serves as a director on the Northwestern Oklahoma State University Foundation Board of Directors. Mr. Rauh served as a director of Tronox, Inc. from 2005 to 2006. Mr. Rauh, along withas well as other formerTronox and Kerr-McGee officers and directors, of Kerr-McGee, and various other corporate and individual defendants, havehas been named as a defendant in a litigation pendingComplaint filed in the United States District Court for the Southern District of New York captioned In Re Tronox, Inc., Securities Litigation, 1:09-cv-06220-SAS. The consolidated complaint assertsasserting securities law claims under Sectionsviolations. The Court has dismissed the allegations that Mr. Rauh violated Section 10(b) and 20(a) of the Securities Exchange Act. A motionMr. Rauh currently remains in the case only with respect to dismissallegations that he was a “control person” of Tronox under Section 20 of the action is pending.Securities Exchange Act for approximately a four-month period. There are no current allegations that Mr. Rauh directly violated any securities laws. Mr. Rauh plans to defend against the control person allegations as the litigation continues.

Mr. Rauh’s expertise in a variety of financial and accounting matters, experience in Sarbanes-Oxley 404 compliance and service with a global oil and gas business make him a valuable member of the board of directors and enhances the value of his service as a member of the Audit Committee, where he also qualifies as an “audit committee financial expert.” Mr. Rauh’s bachelor’sBachelor’s and master’s degreesMaster’s Degrees in accounting enable him to advise the Board on accounting-related matters. Mr. Rauh’s experience at a global oil and gas company provide him with insights relating to many of the same issues we face in our business, including markets, operational, regulatory, technological, and financial. Mr. Rauh’s significant experience in several senior financial positions at Kerr-McGee, as well as his previous service as an auditor with an accounting firm, provides a solid platform for him to advise and consult with the board of directors on financial and audit-related matters.

Our board of directors unanimously recommends a vote “FOR” the election of John Michael Rauh as a Class III Director.

5

DIRECTORS WITH A TERM EXPIRING IN 20112014

7

Dean A. Burkhardt has served as one of our directors since October 26, 2001 and Chairman since May 2008. In addition to his role as a horse and cattle rancher, Mr. Burkhardt has been a consultant to the energy services industry since 1997 with a special emphasis in oil and gas projects in emerging markets, workover services, fuel cells and engineering and quality management services. He also served as co-founder, President and CEO (1983-1985) of Applied Petroleum Software, a provider of production engineering software for optimizing oil and gas well completions; President and CEO of Seismic Products, a provider of seismic cable (1982), Cliff Mock, Inc., a provider of oilfield valves (1982) and Tescorp Energy Services, a provider of coiled tubing, hydraulics and fishing and rental tools (1981-1982) as well as President and COO of Tescorp, Inc. (1982); was a co-founder (1979), Executive Vice President of Sales and Operations (1979-1981) and a director (1979-1989) of Cheyenne Services, Inc., a provider of oilfield tubular makeup, tubular inspection and third party quality assurance services.

As a result of Mr. Burkhardt’s service as a director of the Company for over 8nine years, he has become very familiar with our business and the important issues facing the Company. Mr. Burkhardt’s experience as a consultant in the energy services industry makes him a valuable member of the board of directors. Mr. Burkhardt serves as a member of the Audit Committee and qualifies as an “audit committee financial expert.” Mr. Burkhardt also holds a master’s degreeMaster’s Degree in international management, with an emphasis in marketing and accounting from the American Graduate School of International Management and regularly attends seminars on accounting and financial matters, which enables him to provide guidance to the board of directors related to the Company’s international development and accounting-related matters. Mr. Burkhardt’s significant experience with several companies involved in the oil and gas industry gives him insights relating to many of the same issues we face in our business and provides a solid platform for him to advise and consult with the board of directors on such issues, including oil and gas projects in emerging markets, workover services, fuel cells and engineering and quality management services.

Scott D. Urban has served as one of our directors since October 2008. Mr. Urban is a partner in Edgewater Energy, Partners, a consulting and investment firm focused on the oil and gas exploration and production industry and assisting private equity firms with upstream investments. Mr. Urban served as Group Vice President, Upstream, for BP PLC from 20041999 to 2005 and served as BP’s Group Vice President, with responsibility for several profit centers including the North Sea, Operations, from 2000 to 2004.Atlantic, North American Onshore, Egypt and Middle East. Prior to joining BP, Mr. Urban held a variety of management positions with Amoco Corporation, including Group Vice President, Worldwide Exploration and Upstream Business Unit Manager, China. Mr. Urban received a master’s degreeMaster’s Degree in geology and a Bachelor’s Degree in earth science from Bowling Green State University. Mr. Urban currently serves on the board of directors of Noble Energy, Inc. and has served as a board member of the UK Offshore Operators Association, the Business Council for International Understanding and the Netherlands Oil and Gas Exploration and Production Association.

Mr. Urban’s expertise as a consultant in the oil and gas exploration and production industry makes him a valuable member of the board of directors. Mr. Urban’s significant experience at multiple global oil and gas companies provideprovides him with insights relating to many of the same issues we face in our business, including markets, operational, regulatory, technological, and financial. Mr. Urban’s master’s degreeMaster’s Degree in geology gives him a deep understanding of, and enables him to advise the board of directors on, many matters relating to oil and gas drilling. Mr. Urban’s service as a member of the board of directors of Noble Energy, Inc. gives him valuable experience in managing the issues that face a publicly held oil and gas company with international operations and allows him to share best practices with theour board of directors.

6

DIRECTORS WITH A TERM EXPIRING IN 2012

Wm. Stacy Locke has served as one of our directors as well as President of the company since May 1995, when he joined Pioneer. In December 2003, Mr. Locke was appointed Chief Executive Officer. In addition to his continuous role as President, Mr. Locke has also served as Chief Financial Officer and Chief Operating Officer. Prior to joining Pioneer, Mr. Locke was in investment banking with Arneson, Kercheville, Erhenberg & Associates from 1993 to 1995 and Chemical Banking Corporation from 1988 to 1992. Mr. Locke worked for Tesoro Petroleum Corporation and Valero Energy Corporation as a geologist from 1979 to 1982. Mr. Locke received a Bachelor’s Degree in geology from the University of California Santa Barbara and a Master of Business Administration Degree from Southern Methodist University.

Mr. Locke’s fifteen years of experience at Pioneer, including his service as Chief Executive Officer for seven years, gives him unique knowledge of the opportunities and challenges associated with our business. Mr. Locke’s familiarity with all aspects of Pioneer’s business and his historical understanding of its operations, combined with his understanding of the oil and gas industry, geology and investment banking makes him uniquely qualified to advise the board of directors and to lead Pioneer as Chief Executive Officer.

C. John Thompson has served as one of our directors since May 2001. Mr. Thompson currently serves as Chairman and Chief Executive Officer of Ventana Capital Advisors, Inc., a capital advisory company he founded in June 2004. Mr. Thompson has over thirty years experience in the energy capital business. Mr. Thompson has worked as a business consultant, in the energy capital business with Enron, the investment banking services business with a company he co-founded, Sagestone Capital Partners, and as the manager of the energy commercial banking business with InterFirst Bank in Houston.

As one of Pioneer’s longest-serving non-executive directors, Mr. Thompson brings an important institutional knowledge to the board of directors. His work as an executive in the oil and gas industry, and his experience in the energy capital business including more than ten years in energy commercial banking, provides him with insights relating to many of the same issues facing our business, including markets, operational, regulatory, technological, and financial. Mr. Thompson also serves as a member of the Audit Committee and qualifies as an “audit committee financial expert.” Mr. Thompson holds a master’s degree in business administration with an emphasis in finance and accounting from the University of Texas at Austin, which enables him to provide guidance to the Board on finance and accounting-related matters. Mr. Thompson’s experience as founder of a capital advisory company and as a consultant provides the board of directors with a unique perspective into different industries and an understanding of various capital strategies.

There are no family relations of first cousin or closer among our directors or executive officers by blood, marriage or adoption. The board has determined that all of our directors are independent directors, as defined by the rules of the NYSE Amex, other than Mr. Locke who, as President and Chief Executive Officer, is an employee of Pioneer.

7

INFORMATION CONCERNING MEETINGS

AND COMMITTEES OF THE BOARD OF DIRECTORS

Director Meetings

Our board of directors held eight meetings and acted by written consent seven times during the fiscal year ended December 31, 2009.2011. The board has three standing committees: an audit committee; a compensation committee; and a nominating and corporate governance committee. During the fiscal year ended December 31, 2009,2011, all of the directors attended 100% of the total number of meetings of the board and any committee on which each served. In addition, the independent directors also held regular meetings consisting solely of independent directors during the fiscal year ended December 31, 2009.2011.

Independent Chairman of the Board

Our board of directors has separated the roles of Chairman and Chief Executive Officer. The separation of roles was implemented to allow our Chief Executive Officer, Mr. Locke, to focus on the management of the Company and our independent Chairman to focus on the continued development of a high-performing board of directors, including (i) developing board agendas, (ii) working with Company management to ensure the board of directors has timely and adequate information, (iii) coordinating board committee activities, (iv) supporting and mentoring the Chief Executive Officer and (v) ensuring effective stakeholder communications. Among the duties and responsibilities of our independent Chairman are the following:

Audit Committee

DuringThe members of our audit committee during the fiscal year ended December 31, 2009,2011 were Messrs. Burkhardt, Thompson, and Rauh (chairman) served on the audit committee.and Mr. BurkhardtUrban. Mr. Rauh served as the chairman of the audit committee until May 15, 2009, at which time Mr. Rauh was appointed chairman ofduring the audit committee.fiscal year ended December 31, 2011. The audit committee met sixfive times during the fiscal year ended December 31, 2009.2011. The audit committee is governed by a charter that the board of directors amended and restated on December 11, 2008. You can obtain a copy of that charter by going to our Web site atwww.pioneerdrlg.com.

Our common stock is listed on the NYSE Amex. As such, we have agreed to comply with the listing standards of the NYSE Amex, which require that we have at least three members of the audit committee, each of whom is independent. Each of our audit committee members is independent, as defined by the rules of the NYSE Amex and the rules and regulations of the SEC. In addition, the board has determined that each member of the audit committee is an “audit committee financial expert” as defined by the SEC. The experience of each member of the audit committee is described in the biographies under the heading “Proposal 1—Election of Directors.”

8

The audit committee’s role is one of financial oversight. Our management is responsible for preparing our financial statements, and our independent auditors are responsible for auditing those financial statements. The audit committee is not providing any expert or special assurance as to our financial statements or any professional certification as to the independent auditors’ work. The following functions are the key responsibilities of the audit committee in carrying out its oversight:

The audit committee meets separately from the whole board with the independent auditors to provide an open avenue of communication. The audit committee is ultimately responsible for the selection, evaluation and replacement of our independent auditors.

Compensation Committee

DuringThe members of our compensation committee during the fiscal year ended December 31, 2009,2011 were Messrs. Burkhardt, Thompson, and Urban (chairman) served on the compensation committee.and Mr. ThompsonRauh. Mr. Urban served as chairman of the compensation committee until May 15, 2009, at which time Mr. Urban was appointed chairman ofduring the compensation committee. Thefiscal year ended December 31, 2011.The compensation committee met threefour times and acted by written consent sixten times during the fiscal year ended December 31, 2009.2011. In addition, the compensation committee also held meetings with our compensation consultant during the fiscal year ended December 31, 2009.2011. Each of our compensation committee members is independent, as defined by the rules of the NYSE Amex. The compensation committee is governed by a charter that the board amended and restated on December 11, 2008. You can obtain a copy of that charter by going to our Web site atwww.pioneerdrlg.com. www.pioneerdrlg.com. The compensation committee’s responsibilities include:

Except as described in the Compensation Discussion and Analysis section of this proxy statement, at this time, the compensation committee does not intend to delegate its powers and authority to any subcommittee or other persons. For additional information concerning the compensation committee, see “Compensation Discussion and Analysis” and “Report of the Compensation Committee.”

9

Nominating and Corporate Governance Committee

DuringThe members of our nominating and corporate governance committee during the fiscal year ended December 31, 2009,2011 were Messrs. Burkhardt, Thompson (chairman), Urban and Urban served on the nominating and corporate governance committee.Mr. Rauh. Mr. Thompson served as chairman of the nominating and corporate governance committee during the fiscal year ended December 31, 2009.2011. The nominating and corporate governance committee held two meetings and acted by written consent once during fiscal year ended December 31, 2009.2011. Each of our nominating and corporate governance committee members is independent, as defined by the rules of the NYSE Amex.

The nominating and corporate governance committee is responsible for seeking, evaluating and recommending qualified individuals to become directors and serve on committees of the board of directors. The committee is also responsible for periodically reviewing and assessing the adequacy of our corporate governance policies and procedures and recommending proposed changes to the board. In addition, the committee periodically assesses the performance of the board of directors. The nominating and corporate governance committee is governed by a charter that the board amended and restated on December 11, 2008. You can obtain a copy of that charter by going to our Web sitewebsite atwww.pioneerdrlg.com.

Director Nominations

The nominating and corporate governance committee considers candidates for board membership suggested by its members and other board members, as well as by management and shareholders. The committee may also retain a third-party executive search firm to identify candidates from time to time. Shareholders wishing to suggest a qualified candidate should submit the recommendation in writing to the nominating and corporate governance committee in care of our Corporate Secretary at 1250 N.E. Loop 410, Suite 1000, San Antonio, Texas 78209. Any shareholder wishing to submit a candidate for consideration should send the following information to the Corporate Secretary:

Once a prospective candidate has been identified, the nominating and corporate governance committee makes the initial determination as to whether to conduct a full evaluation of the candidate. This initial determination is based on the information provided to the committee with the recommendation of the prospective candidate, as well as the committee’s own knowledge of the prospective candidate, which may be supplemented by inquiries to the person making the recommendation or others. If the committee determines that additional consideration is warranted, it may ask a third-party search firm to gather additional information about the candidate’s background and experience and to report its findings to the committee. The committee then evaluates the prospective candidate by considering, in addition to the criteria set forth in our bylaws, each nominee’s personal and professional integrity, experience, skills, ability and willingness to devote the time and effort necessary to be an effective board member, and commitment to acting in our shareholders’ and our best interests. Consideration is also given to members of the board of directors having an appropriate mix of background and skills. Although we do not have a formal diversity policy in place for the director nomination process, an important factor in our nominating and corporate governance committee’s consideration and assessment of a candidate is the diversity of the candidate’s background, viewpoints, training, professional experience, education and skill set. The nominating and corporate governance committee strives to nominate candidates with a variety of complementary skills so that, as a group, the board of directors will possess the appropriate talent, skills, and expertise to oversee the Company’s business.

10

The same criteria apply with respect to the nominating and corporate governance committee’s evaluation of all candidates for membership to our board, including candidates recommended by shareholders. However, additional procedures will apply, as provided in our bylaws, if a shareholder wishes to submit at an annual meeting a director candidate who is not approved by our nominating and corporate governance committee or our board of directors.

Any shareholder desiring to nominate a director at our 20112013 Annual Meeting of Shareholders without including such nomination in our proxy materials for that meeting must provide timely notice to the Company of such nomination in the form provided by our bylaws. See our bylaws for a description of the required form and content of this notice. To be timely, such notice must ordinarily be delivered to our principal executive offices (Attention: Corporate Secretary), at the address set forth above, no later than the close of business on the 90th day nor earlier than the 180th day prior to the first anniversary date of the preceding year’s annual shareholder meeting (i.e., nominations for director for inclusion in the 20112013 Annual Meeting of Shareholders must be delivered to our principal executive offices no earlier than the close of business on November 15, 2010,9, 2012, and no later than the close of business on February 14, 2011)11, 2013), or such proposal will be considered untimely. However, in the event that the date of the pending annual meeting of shareholders is more than 30 days before or more than 60 days after the first anniversary of the previous year’s annual meeting of shareholders, then such notice must be received not later than the later to occur of the close of business on the 90th day prior to the pending annual meeting of shareholders or the 10th day following the day on which public announcement of the date of such annual meeting of shareholders is first made by the Company. The foregoing time limits also apply in determining whether notice is timely for purposes of rules adopted by the SEC relating to the exercise of discretionary voting authority.

Any shareholder desiring a copy of our bylaws will be furnished one without charge upon written request to the Corporate Secretary at 1250 N.E. Loop 410, Suite 1000, San Antonio, Texas 78209.

Code of Conduct and Ethics and Corporate Governance Guidelines

We have adopted a Code of Conduct and Ethics that satisfies the SEC’s definition of a “Code of Ethics” and applies to all employees, including our principal executive officer, principal financial officer and principal accounting officer. TheAs part of our continuing efforts to improve our corporate governance principles and practices, we have also adopted Corporate Governance Guidelines that conform to the NYSE corporate governance listing standards and SEC rules. All of the Company’s corporate governance materials, including the Code of Conduct and Ethics, isthe Corporate Governance Guidelines, and our committee charters are posted on our Web sitethe Company’s website atwww.pioneerdrlg.com. and are also available upon request to the Company’s Corporate Secretary. We intend to disclose on our Web sitewebsite any amendments to the Code of Conduct and Ethics and any waivers of the Code of Conduct and Ethics that apply to our principal executive officer, principal financial officer and principal accounting officer.

Board’s Role in Risk Oversight

Our board of directors is responsible for the Company’s risk-oversight function. The board of directors, with the assistance of its standing committees, our Chief Executive Officer, our Chief Financial Officer, our General Counsel, and our Director of Corporate Development, identifies, evaluates and discusses the material enterprise risks that could impact the Company’s operations and tactical and strategic decisions. These enterprise risks include operational, financial, legal, regulatory, market, and reputational risks. In addition, the board of directors reviews the risks associated with the Company’s strategic plan at an annual strategic planning session and periodically throughout the year as part of its consideration of the strategic direction of the Company. Each board committeescommittee also oversees the management of the Company’s risks that fall within each committee’s areas of responsibility. In performing this function, each committee has full access to management, as well as the ability to engage advisors.

Risk—Risk–Related Compensation Policies and Practices

During early 2010, theThe compensation committee undertookhas undertaken an assessment of the risk profile of its executive and non-executive compensation programs. With the assistance of our Chief Executive Officer, our Chief Financial

12

Officer, our General Counsel, our Vice President Global Human Resources and our Director of Corporate Development,compensation consultant, the compensation

11

committee has developed a framework to assist the compensation committee in ascertaining any potential material risks associated with its executive compensation program, including: external market reference; pay mix; range and sensitivity of performance-based variable plans; selection of performance metrics; goal-setting process; and the Company’s checks and balances on the payment of compensation. This process enabledenables the compensation committee to consider if any of the Company’s current compensation programs, practices or procedures should be altered in order to ensure that an appropriate balance between competitive pay and prudent risk is maintained. As a result of this analysis, the compensation committee has identified the following risk mitigating factors:

As a result of the above assessment, the compensation committee determinedbelieves that the Company’s compensation policies and procedures largely achievedpractices do not create risks that are reasonably likely to have a proper balance between prudent business risk and competitive compensation.material adverse effect on the Company.

13

Director Compensation

During the fiscal year ended December 31, 2009,2011, we paid to each of our non-employee directors fees for service on our board of directors or committees of our board as follows:

12

During 2009,2011, the Compensation Committee granted a restricted stock award that will vest over three years with a grant date fair market value of approximately $100,000 to each member of the board of directors. In addition, we reimburse the directors for reasonable out-of-pocket expenses they incur in connection with attending meetings of the board of directors and board committees or otherwise in their capacity as directors. Our executive officers do not make recommendations regarding the non-employee directors’ compensation.

We expect each director to make every effort to attend each meeting of the board of directors, each meeting of any board committee on which he sits and the annual meeting of shareholders. Attendance in person at board and committee meetings is preferred but not required; attendance by teleconference is permitted, if necessary. All of our directors attended last year’s annual meeting.meeting of shareholders.

2011 Non-Employee Director Compensation

The following table summarizes the compensation we paid each of our non-employee directors during the fiscal year ended December 31, 2009:2011:

14

The following table provides information on the outstanding equity awards for each of our non-employee directors as of December 31, 2011:

Stock Ownership Guidelines

In order to encourage the acquisition and retention of our common stock by our directors and to further align their economic interests with those of our shareholders and to focus our directors on the long-term sustained appreciation of our common stock, our compensation committee and our board of directors have adopted guidelines generally requiring each of our directors to own an amount of our common stock equal to the value of three times such director’s annual cash retainer. The ownership target is to be acquired no later than the December 31 following the fifth anniversary of the director’s initial appointment or election to the board of directors, or by December 31, 2013 for any director serving on the board of directors as of May 17, 2008. For purposes of this calculation, unvested restricted stock and restricted stock units may be counted toward the applicable ownership requirement. As of March 31, 2010,15, 2012, all directors have fully met their stock ownership requirements.

13

The following table provides information on the outstanding equity awards for each of our non-employee directors as of December 31, 2009:

14

EXECUTIVE OFFICERS

The following table provides information about our current executive officers (ages are as of March 31, 2010)2012):

For a description of the business background of Mr. Locke, see “Directors with Terms“Class II Director Nominees for Election to a Term Expiring in 2012”at the 2015 Annual Meeting” above.

Lorne E. Phillips was appointed Executive Vice President and Chief Financial Officer effective February 1, 2009. Prior to joining Pioneer Drilling Company, Mr. Phillips worked the last 10 years at Cameron International Corporation, serving most recently as Vice President and Treasurer. Prior to that, he was General Manager of Cameron’s Canadian valves operations, Vice President of Marketing and M&A for the valves division, and Business Development Manager for Cameron. Before joining Cameron, he was a Financial Analyst for SCF Partners, a provider of equity capital to energy service and equipment companies, and for Simmons & Company International, an investment bank focused on the energy industry.

Franklin C. Westcurrently serves as Executive Vice President and President of our Drilling Services Division. Prior to his appointment as President of our Drilling Services Division on March 1, 2008, Mr. West served as our Chief Operating Officer sincebeginning in January 2002. Prior to joining Pioneer, he was Vice President for Flournoy Drilling Company from 1967 until it was acquired by Grey Wolf, Inc. in 1997, and he continued in the same capacity for Grey Wolf, Inc., an on-shore oil and gas drilling contractor, until December 2001.

Joseph B. Eustace was appointed as Executive Vice President and President of our Production Services Division on March 1, 2008. Prior to joining Pioneer Drilling Company, Mr. Eustace served as President of WEDGE Oil and Gas Services sincebeginning in 2004. Prior to 2004, Mr. Eustace served as Group Vice President for Key Energy Services from 1998 to 2004, and as Vice President of Operations for Dawson Production Services from 1982 until Key Energy Services acquired Dawson Production Services in 1998.

Carlos R. Peña was appointed Senior Vice President, General Counsel, Secretary and Compliance Officer effective October 27, 2008. Mr. Peña has practiced law since 1992 and has experience providing both outside corporate and securities counsel and in-house M&A counsel. Prior to joining Pioneer Drilling in October 2008, he worked for AT&T, Inc. in the M&A legal group. From 1996 to 2007, he focused on securities and corporate finance, M&A, venture capital, and corporate governance at Fulbright & Jaworski L.L.P., Cox Smith Matthews Incorporated, and Vinson & Elkins L.L.P.

15

COMPENSATION DISCUSSION AND ANALYSIS

Introductory Note

TheThis compensation committee ofdiscussion and analysis provides information regarding our board of directors (the “Compensation Committee”) and Company management evaluated and set 2009 executive compensation program in 2011 for the contextfollowing executive officers of the Company’sCompany (collectively, the “named executive officers”):

Executive Summary

Throughout 2011, demand for our equipment and services continued to grow, driving a 47% increase in annual revenue. Operationally, we exceeded the level of overall performance andthat we had targeted for 2011, which is reflected in some of the challenging global economic environment since late 2008.

Summary of Executivecompensation decisions reached by the Compensation Decisions Made in 2009

The following are theCommittee. Key highlights of our executive compensation decisions made in 2009:2011 performance include the following:

The Compensation Committee took the following key actions with respect to the compensation of the named executive officers in 2011:

17

We implementedbelieve that our 2011 executive compensation program is reasonable, competitive and strongly aligned with pay-for-performance principles. Consistent with prior practice, in 2011 the Compensation Committee emphasized compensation opportunities that reward our named executive officers when they deliver targeted financial and operational results. Accordingly, a significant percentage of the named executive officers’ compensation that was granted in 2011 was “at-risk,” as the following graph illustrates:

2011 Shareholder Advisory Vote on Executive Compensation

We conducted our first advisory vote on executive compensation last year at our 2011 Annual Meeting of Shareholders. While this vote was not binding on the Compensation Committee, the Board of Directors or us, the Compensation Committee values the opinions of our shareholders on executive compensation matters.

The Compensation Committee reviewed the voting results from our 2011 advisory vote on executive compensation. Based upon the Inspector of Election’s report, the advisory vote on executive compensation received the favorable support of 95% of the votes cast thereon. The Compensation Committee determined that the voting results reflect strong shareholder support for our 2011 executive compensation program.

In 2012, the Compensation Committee continued to emphasize pay for performance principles by increasing the allocation of the named executive officers’ long-term cash incentive program (with 50% based on Company performance)compensation to provide for more performance-based RSU awards and less stock options. Accordingly, the Compensation Committee changed the allocations of the named executive officers’ performance-based RSU awards to 40% (from 30%) and stock options to 60% (from 70%) to better align the interests ofnamed executive officer’s long-term incentive compensation with our executives withshareholders’ interests.

Additionally, in response to the long-term performancemajority of the Company and long-term shareholder value.votes cast for an advisory vote on executive compensation every year at our 2011 Annual Meeting of Stockholders, we have determined that the advisory vote on executive compensation will be conducted every year, until we hold the next advisory vote on the frequency of advisory votes on executive compensation.

Compensation Philosophy

The Compensation Committee designs our executive compensation programs to:

18

Compensation Committee

The Compensation Committee administers our executive compensation program and is responsible for establishing appropriate compensation for our named executive officers. The duties of the Compensation Committee include:

Role of Management

The Compensation Committee believes that even the best advice of a compensation consultant or other outside advisors must be combined with the input from senior management and the Compensation Committee’s own individual experiences and judgment to arrive at the proper alignment of compensation philosophy, objectives, and programs. In 2011, the Chief Executive Officer, Chief Financial Officer, Vice President Global Human Resources, and General Counsel worked closely with the Compensation Committee in formulating award designs, performance measures, and performance levels (i.e., threshold, target, and above expectation) necessary to align the executive compensation program with our objectives and strategies.

Generally, the Chief Executive Officer reviews with the Compensation Committee his performance evaluations of the other named executive officers and his recommendations regarding base salary adjustments, cash incentive awards, and long-term equity awards for the other named executive officers to ensure alignment with pay-for-performance principles. However, all final decisions regarding the compensation of the named executive officers are made by the Compensation Committee.

The Board and Compensation Committee conduct their own performance assessment of the Chief Executive Officer and no management recommendation is made with regard to his compensation.

While certain members of management attended the Compensation Committee’s meetings in 2011 upon invitation, they did not attend either private sessions or portions of any other meetings of the Compensation Committee where executive compensation determinations were made by the Compensation Committee.

Assessment of Team Performance

The named executive officers’ compensation is impacted by their performance as a team. For purposes of setting compensation, the Compensation Committee annually conducts a subjective assessment of the named executive officers’ accomplishments as a team and not as individuals with respect to goals and strategies that are established at the beginning of each year. The Compensation Committee believes that focusing on team performance, rather than individual performance, emphasizes the importance of team work among the named executive officers.

The 2011 team goals included the following (collectively, the “2011 Team Goals”):

19

The Compensation Committee periodically reviews its own performance sosubjectively determined that it might find ways to adapt to changes impacting compensation decisions and decision-making processes. Thethe named executive officers successfully accomplished each of the 2011 Team Goals during 2011.

Role of Compensation Consultant

During 2011, the Compensation Committee retained Pearl Meyer & Partners (“Pearl Meyer”) as its compensation consultant to obtain objective, expert advice on executive compensation. Pearl Meyer advised the Compensation Committee on a variety of compensation related issues in 2011, including:

In the course of conducting its activities, Pearl Meyer attended meetings of the Compensation Committee and presented its findings and recommendations for discussion. During 2011, Pearl Meyer also met with certain senior management to obtain and validate data and review materials.

Competitive Pay Analysis

Each year the Compensation Committee evaluates how our pay practices and the named executive officers’ compensation levels compare to the competitive market for executive talent.

To evaluate the competitiveness of the named executive officers’ base salary, target total cash compensation (i.e., base salary plus target cash incentive award), target long-term equity incentive awards, and total direct compensation (i.e. base salary, target cash incentive award, and target long-term equity incentive awards) for 2011, Pearl Meyer provided the Compensation Committee competitive pay information derived from a custom peer group (the “Custom Peer Group”) and the following industry specific surveys (collectively, the “Industry Survey Data”):

The companies comprising the Custom Peer Group for 2011 included:

The compensation consultant annually reviews the effectivenesscompanies comprising the Custom Peer Group in order to maintain its appropriateness for the competitive pay analysis. These companies were generally selected based upon their (i) classification as “oilfield services” companies, (ii) annual revenues (the Custom Peer Group’s

20

trailing twelve months (“TTM”) of revenues as of June 30, 2010 was approximately $751 million, as compared to our TTM of revenues as of June 30, 2010 of $359 million), and (iii) market capitalization. Additionally, the Compensation Committee believes that we compete for employee talent with each of these companies. Based on input from Pearl Meyers, the 2011 Custom Peer Group includes several peer companies that were not included in the 2010 Custom Peer Group (Hercules Offshore, Helix Energy Resources, Oil States International and Newpark Drilling). Additionally, Allis Chalmers was removed from the 2011 Custom Peer Group due to its acquisition. These changes reflect our continued growth and current competitors for employee talent so that the Compensation Committee can continue to evaluate the named executive officers’ pay levels versus an appropriate peer set.

Pearl Meyer developed a “market consensus” for each named executive officer’s 2011 base salary, target total cash compensation, programs in obtaining desired results.

Compensation Philosophytarget long-term equity incentive awards and total direct compensation by subjectively prioritizing the data derived from the Custom Peer Group and the Industry Survey Data, where appropriate, to provide representative market pricing comparisons.

The Compensation Committee designs our executive compensation programs to:

The Compensation Committee reviews each element of compensation annually. Variable compensation (annual cash incentives, long-term cash incentives, stock options and restricted stock awards) supports our pay for performance philosophy and represents approximately 49% to 71% of total direct compensation to our named executive officers. Annual cash incentive compensation is based on various performance measures intended to provide incentives for executives to make decisions that result in strong annual performance results. This is balanced by long-term incentive compensation in the form of stock option awards, restricted stock awardsremain fair and long-term cash awards. Stock option awards generally vest over 3 years and are exercisable over a 10 year term.

16

Restricted stock awards generally vest ratably over 3 years. Long-term cash awards were allocated as 50% time-based and 50% performance-based. Under these awards, the named executive officers will receive cash payments on April 30, 2011 and April 30, 2012 depending on their continued employment with the Company and the Company’s performance relative to a peer group of companies. As a result, our compensation program provides incentives to our executives to make business decisions that result in long-term shareholder value.

Benchmarking

In January 2009, the Compensation Committee retained Stone Partners as an independent compensation consultant to assist in the Compensation Committee’s compensation determinations. Stone Partners reported to, and acted at the direction of, the Compensation Committee. Stone Partners was instructed to benchmark executive positions, to review general trends relating to executive compensation in the drilling and oilfield services industry, and to review the operation of our incentive plans.competitive. The Compensation Committee reviewed several sources as a reference for determining competitive total compensation packages. These sources included published data from Watson Wyatt Top Management, William M. Mercer-Energy, and Stone Partners’ Executive Oilfield Manufacturing and Services Industry compensation surveys. Both Watson Wyatt (national survey data) and Mercer-Energy (industry survey data) are nationally known, highly respected sources for data. Stone Partners’ survey (available to participants only and another industry survey) included 71 oilfield manufacturing and service companies; 2009 was the 13^th year of publication for this survey. In addition, the Compensation Committee reviewed proxy statement data from a peer group of companies. In December 2008, we determined that our fiscal year 2009 industry peer group would consist of the following companies:

One company previously on the peer company list was dropped: Grey Wolf, Inc. because it was acquired by Precision Drilling. These companies were selected because of similarities we shared in industry (oilfield services) and similar levels of market capitalization (between $422.7 million and $4.7 billion), enterprise value (between $234.3 million and $2.8 billion, 2008 assets (between $547.7 million and $5.4 billion) and 2008 revenue (between $312.5 million and $2 billion). Companies of interest included Nabors Industries, Inc. and Patterson UTI Energy Inc. The companies of interest are not used for benchmarking data, but are consulted for compensation trends.

In March 2009, the compensation consultant benchmarked the 25th, 50th and 75th percentiles for the data sources mentioned above to gain an understanding of competitive pay practices. The industry peer group, industry surveys and national survey data are equally weighted, considered for each element of compensation, and collectively referred to as the “survey data” throughout this Compensation Discussion and Analysis. In evaluating and setting compensation for our named executive officers, the Compensation Committee does not target any individual pay component to fall within a specific range or percentile withinof the survey data, but rather usescompetitive pay information. While the survey data as a guide,competitive pay information is important to the Compensation Committee’s approval process, it is just one of several factors considered by the Compensation Committee in combination withapproving executive compensation and the other factors discussedCompensation Committee has discretion in this Compensation Discussiondetermining the nature and Analysis, to determine compensation levels for our named executive officers.extent of its use.

17

Elements of Compensation

Base Salary

We pay ourprovide the named executive officers includingwith a base level of monthly income for the officers named in the Summary Compensation Table included in this proxy statement (the “named executive officers”) base salaries that are at levels the Compensation Committee believes are necessaryexpertise, skills, knowledge and experience they offer to attract and retain talented officers.our management team. The Compensation Committee generally determinesreviews each named executive officer’s base salary amounts on an annual basis. Because other elements of compensation are typically expressed as a percentage of base salary, maintaining a competitive base salary for each

The named executive officer is a high priority in the current oilfield services industry employment market and is particularly important to us given our focus as a growth company within that industry. The Compensation Committee assesses performance for base salary purposes using a qualitative, rather than quantitative, performance assessment. The Compensation Committee does not use a specific performance formula or a weighting of factors in determining base salary levels. Instead, the Compensation Committee considers financial performance, execution of our business strategy, and individual contributions to the business, as well as pay levels of comparable executives at peer companies. In considering these factors, the Compensation Committee reviews executive performance with the Chief Executive Officer and generally relies on the Chief Executive Officer’s evaluation of each officer’s performance (other than his own).

The following table sets forth each named executive officer’sofficers’ annual base salary as of December 31, 20082010 and December 31, 2009.2011 were as follows:

21

In May 2009,2011, Mr. Locke received a 9% increase in his base salary in order to increase the competitiveness of his base salary, as this was his first increase in approximately three years, and in recognition of his contributions toward the accomplishment of the 2011 Team Goals.

In 2011, Messrs. Phillips, West, Eustace and Peña each received a merit increase in their respective base salary ranging from 3% to 5% based upon their contributions toward the accomplishment of the 2011 Team Goals.

As a “market check,” the Compensation Committee also reviewed base salaries forthe competitive pay information in setting the named executive officers in accordance with the factors discussed above. In accordance with expected competitive pay practices for fiscal 2009, theofficers’ base salaries for the named executive officers did not increase except for Mr.in 2011. Messrs. Locke’s, Phillips’s, Eustace’s and Peña. Mr. Peña received aa’s base salary increase to better align hisfell between the 25^th and 50^th percentiles, and Mr. West’s base salary with that of similarly situated officers at our peer companies. After this salary increase, base salaries offell slightly above the named executive officers ranged between the 38th and 69th50^th percentile of the survey data discussed under “Benchmarking” above. On average, base salaries for our named executive officers fall at the market median. The Compensation Committee has determined that base salaries at this level enable us to attract and retain talented officers while permitting us tocompetitive pay a substantial portion of total direct compensation in the form of variable compensation (annual cash and long-term incentives).information.

18

Annual Cash Incentive Compensation

AtEach year, the beginningnamed executive officers are eligible to earn a cash incentive award under our 2007 Incentive Plan. The annual cash incentive award is designed to motivate and reward the named executive officers for their contributions in achieving certain business goals that we believe create shareholder value.

Each named executive officer has a target annual cash incentive award opportunity expressed as a percentage of 2009, becausetheir annual base salary paid. Subject to performance, the payout of the severe downturnannual cash incentive award can range from zero to two times the target award opportunity. The threshold, target and maximum opportunity levels, expressed as a percentage of each named executive officer’s respective base salary that was actually paid in 2011, are as follows:

The amount of the oilcash incentive award is determined by comparing our actual performance against a scorecard of specific performance measures and gas industry, management andassociated performance levels approved by the Compensation Committee decided to impose an additional threshhold oneach year. The results of this comparison dictate the achievementultimate amount of cash incentive awards for 2009, in addition to the threshholds described below. On February 23, 2009, the Compensation Committee determined that cash incentive awards would only be awarded for 2009 if the Company’s earnings before income tax, depreciation and amortization expense or “EBITDA” for fiscal year 2009 exceeded $90 million. The Company’s EBITDA for fiscal year 2009 did not exceed $90 million. As a result, cash incentive awards related to financial and safety performance measures were not awarded for fiscal year 2009. However, due to the Company’s achievements in 2009 as described below, the Compensation Committee decided in February 2010 to award the 30% discretionary component of the 2009 cash incentive award.

Theeach named executive officers can receive up to approximately 19-23% of their total direct compensation (including base salary,officer’s annual cash incentive compensation and long-term incentive compensation) in the form of annual cash incentives. Approximately 23% of Mr. Locke’s targeted total direct compensation is allocated to the annual incentive award. Approximately 19-21% of the other named executive officers’ targeted total direct compensation is allocated to the annual incentive award. The Compensation Committee allocateddesigned the cash incentive award to reward exceptional performance by providing for progressively increasing payments as our performance exceeds the target level, and correspondingly providing for no payment unless a higher percentage (23%)threshold level of Mr. Locke’s total direct compensationperformance is achieved. If the Company’s performance falls between the threshold, target or above expectation performance levels, the cash incentive award opportunity is linearly interpolated to determine the actual payout.

22

Accordingly, in February 2011, the Compensation Committee reviewed and approved the following performance measures and associated performance levels for the 2011 annual cash incentive award becauseawards. These performance measures and associated performance levels were designed to be in alignment with the Company’s strategic plans and the 2011 budget (which was approved by the Board).

In order to align the Company’s performance and the named executive officers’ performance with the interests of our shareholders, the Compensation Committee believes his position uniquely allows him to influence the financial performancesubjectively weighted each of the Company and, accordingly, his compensation should be more closely tiedabove performance measures relative to its potential impact on the Company’s financial results. Theperformance and creation of shareholder value. In establishing the performance goals for Messrs. West and Eustace, the Compensation Committee has determined that this level of annual cash incentive compensation appropriately motivates our executive officersincluded both Company-wide and divisional-wide performance goals to produce strong business performance each year while allowing for a competitive base salary and other forms of compensationprovide them incentives to encourage creation of long-term shareholder value.

The cash incentive award levels fordrive the named executive officers for 2009, expressed as a percentage of base salary, were as follows:

For each performance measure, a “target” level is established annually. The “threshold” and “above expectation” levels are functionsoperational results of the target level. The target level for the performance measures generally derives from our board-approved budget. The Compensation Committee strivesrespective division they oversee, while ensuring their overall accountability to set performance goals that are both measurable and achievable while providing effective incentive to contribute to our growth. Cash incentive payments are prorated if performance measure results fall between threshold and target or between target and above expectation. Factors taken into account in determiningcorporate performance. Accordingly, each named executive officer’s annual cash incentive award target includeis derived from our actual performance with respect to the individual’s responsibilities, the individual’s experience, and overall fairness, as well as competitive pay practices that are discussed under “Benchmarking” above.

The proposed cash incentive awards for each named executive officer are basedmeasures above, on achievement of specific performance measures and on the Compensation Committee’s subjective assessment of each named executive officer’s individual performance. While the performance measures may change from year to year, as further discussed below, our annual performance measures for 2009 included: earnings per share; EBITDA; EBITDA return on capital employed; and safety record (recordable incident rate). For the earnings per share and return on capital employed calculations, we excluded the impact of goodwill and intangible asset impairment charges.

19

For 2009, the EBITDA objective for the corporate officers was consolidated EBITDA for the entire company and for divisional officers was that division’s EBITDA; Mr. Locke, Mr. Phillips, and Mr. Peña are the only executives with the return on capital employed as an objective; the other executives have additional weight allocated to their EBITDA objective.

For 2009, the individual performance portion of the cash incentive award to each named executive officer was determined completely at the Compensation Committee’s discretion. Historically, cash incentive awards for each named executive officer were based in part on individual performance objectives. For 2009, the Compensation Committee did not set individual performance objectives because it was clear early in the year that the $90 million EBITDA threshold would not be met. As a result, the individual performance portion of the cash incentive award was not tied to achievement of any specific objectives. In reaching its subjective decision to award the discretionary individual performance portion of the cash incentive award to each named executive officer, the Compensation Committee considered, among other things: (1) the Company’s safety results in 2009, which were the best in its history, (2) the improvement in rig utilization in the second half of the year, (3) the Company’s success in increasing the number of rigs working in shale plays, and (4) the Company’s success in amending its secured credit facility.weighted basis.

The weighting of the current performance measures and individual performance objectives for the named executive officersofficers’ target annual cash incentive award for 20092011 was as follows:

23

In assessing individual performance, the Compensation Committee has determined that these weighting percentages appropriately correspond to our business objectives and encourageconsidered the named executive officers to focus on those factors thatofficers’ achievement, as a team, of the 2011 Team Goals discussed previously.

At the end of 2011, the Compensation Committee feels are important for bothcompleted the evaluation of our short-termresults and long-term success.

The Compensation Committee approved the 2009 performance measures after reviewing the appropriatenessweighing of the performance measures used into ensure that the past and determining anticipated difficulties in achieving specific performance targets.

The approved financial performance criteria and the actual performance achieved for 2009 were:

20

Because the Company’s EBITDA for fiscal year 2009 did not exceed the $90 million threshold, cash incentive awards related to financialaward determinations were appropriate and safety performance measures were not awarded for fiscal year 2009.

Base salary plus targetaligned with pay-for-performance principles. The Compensation Committee made the following annual cash incentive compensation established for the named executive officers in May 2009 ranged between the 33rd and 63rd percentile of the survey data discussed under “Benchmarking” above. On average, the base salary plus target annual incentiveaward determinations for our named executive officers fall slightly abovefor 2011:

The named executive officers’ 2011 cash incentive awards are reported in the market median. The“Non-Equity Incentive Plan Compensation” column of the 2011 Summary Compensation Table below.

Long-Term Equity Incentive Compensation

For 2010 and 2011, the Compensation Committee has determined that this level of annual cash compensation provides for a competitive base salary and motivates management to achieve annual business objectives while allowing the Company to also provide a significant portiongranted each of the named executive officers’ total direct compensation in the form of long-term incentive compensation to motivate the creation of long-term shareholder value.

Long-Term Incentive Compensation

We provide our named executive officers with stock option awards, restricted stock awards and long-term cash awards pursuant to our 2007 Incentive Plan. The Compensation Committee believes these elements of long-term compensation motivate management to seek to maximize long-term shareholder value. According to guidelines adopted by the Compensation Committee for granting of awards, each named executive officer receives long-term incentive awards at the Compensation Committee’s discretion based on the following considerations: (1) the employee’s base salary; (2) a multiple of base salary based on the employee’s position with the Company, the employee’s responsibilities, the employee’s experience, and overall fairness, as well as survey data discussed under “Benchmarking” above; (3) the fair value of the stock; (4) Company performance; and (5) the individual employee’s performance. The Compensation Committee reviews prior awards to compare the multiple of base salary from the prior award to the current award. The Compensation Committee meets annually to determine long-term incentive awards, if any, for each named executive officer. Long-term incentive awards were allocated at approximately 20% restricted stock, 48%time-vested stock options and 32% cash.

Long-Term Cash Incentive Compensation

On August 27, 2009, the Compensation Committee approved long-term cash incentiveperformance-based RSU awards under our 2007 Incentive Plan. Under theseThese awards are intended to instill a sense of ownership in our named executive officers, incentivize them to have a long-term focus of our business, and reward them for their successful efforts.

Stock Options and Performance-Based RSU Awards

In formulating the target value of each named executive officer’s 2011 long-term equity awards, the Compensation Committee conducted an assessment of the competitive pay information to subjectively develop a competitive aggregate grant date fair value for such awards. The Compensation Committee then converted the competitive aggregate grant date fair value into shares of our common stock (the “Target Shares”) by using a representative “stock price” for our common stock. The Compensation Committee determined the representative “stock price” by using the average of the closing prices of our common stock from December 31, 2010 to January 21, 2011, which was $8.54 per share. The Compensation Committee then allocated the Target Shares among stock options and performance-based RSU awards using an approximate 70% and 30% split, respectively.

24

In 2011, the Compensation Committee granted the named executive officers the following stock options and target performance-based RSU awards:

The number of performance-based RSU awards set forth in the above table reflects the target number of RSU awards to be earned by each named executive officer following a three-year performance period (January 1, 2011 to December 31, 2013). The actual number of RSU awards that each named executive officer may earn, which may be greater or less than his respective target number, will receive cash paymentsbe based on April 30, 2011 and April 30, 2012 depending on their continued employment with the Company and the Company’s performanceaverage of our relative to a peer group of companies. Each award agreement specifies a time-based award amount and a performance-based award amount.

In general, for the time-based component, if the participant remains employed with the Company through April 30, 2011, the participant will receive 50% of the time-based award amount on that date, and if the participant remains employed with the Company through April 30, 2012, the participant will receive the remaining 50% of the time-based award amount on that date.

For the performance-based component, the Company’s performance in three metrics (EBITDAEBITDA growth, EBITDA return on capital invested,employed (“EBITDA ROCE”), and total shareholder return growth) will be compared to(“TSR”) growth versus a defined group of eight peer group forcompanies (the “Special Peer Group”) over the period from January 1, 2009 to December 31, 2010. The peer group is comprisedthree-year performance period.

Accordingly, the actual number of RSU awards that each named executive officer may earn at the end of the following: Nabors Industries, Helmerich & Payne, Patterson-UTI Energy, Bronco Drilling Company, Union Drilling, Parker Drilling Company, Superior Energy Services, Key Energy Services, Basic Energy Services, and Complete Production Services. The companies in this peer group were selected because their business correlates most directly with ours and thus these companies provide an appropriate comparison for the performance metrics (as compared with our benchmarking peer companies that were selected based on shared industry and similar levels of market capitalization, enterprise value, assets and revenue and provide a more appropriate comparison for determining executive compensation). After thethree-year performance period may vary from zero to 200% of his respective target amount, as shown in the Company’s performance in each of the

21

three metrics will be compared against the peer group companies, and a percentage for each of the three metrics will be assigned based on the Company’s ranking among its peers:following table:

The metric percentage for any ranking achieved between 25th and 50th percentiles and between 50th and 90th percentiles

Following the three-year performance period, the Compensation Committee will be proportional to the percentile achieved. The averagecompare our performance in each of the three metric percentages will then be multiplied byperformance measures (i.e., EBITDA growth, EBITDA ROCE, and TSR growth) relative to the performance-based award amount to determine the final amountperformance of the performance-based award. In general, afterSpecial Peer Group, and assign the determination of the performance-based award amount, if the participant remains employed with the Company through April 30, 2011, the participant will receive 50% of the performance-based award amount on that date, and if the participant remains employed with the Company through April 30, 2012, the participant will receive the remaining 50% of the performance-based award amount on that date.

The target long-term cash incentive award amounts for theapplicable earning percentage (i.e., 0% to 200%) to each such performance measure. Each named executive officers for 2009 were as follows (the amounts below reflectofficer’s final RSU award is equal to the aggregate amount each named executive officer would receive ifproduct of (i) the average of the three metricearning percentages forand (ii) his respective target number of RSU awards.

Following the period from January 1, 2009 to December 31, 2010 were 100%):

Long-Term Equity Incentive Compensation

Long-term equity incentive compensation consistsend of stock option awards and restricted stock awards. As of February 2009,the three-year performance period, the Compensation Committee allocated between 23% and 32% ofwill approve the final RSU awards that each named executive officer’s totalofficer earned and such RSU awards will then convert to restricted stock, for which the restricted stock will cliff vest in April 2013.

The Special Peer Group consisted of Nabors Industries, Helmerich & Payne, Patterson-UTI Energy, Union Drilling, Parker Drilling, Superior Energy Services, Key Energy Services, and Basic Energy Services, all of which we compete with for business on a daily basis. Because the Special Peer Group are direct compensation to long-term equity incentive awards. Thebusiness competitors, the Compensation Committee hassubjectively determined that these percentages allow us tocompanies provide a competitive base salarybetter comparison for EBITDA growth, EBITDA ROCE and annual and long-term cash incentive compensation while still motivatingTSR growth than the Custom Peer Group, which consists of a broader group of companies with which we compete for employee talent.

25

The aggregate grant date fair value of the named executive officers to make decisions that resultofficer’s stock options and target performance-based RSU awards are reported in long-term shareholder value. The Compensation Committee allocated a higher percentage (32%) of Mr. Locke’s total direct compensation to long-term equity awards because the Compensation Committee believes that his position uniquely allows him to influence the financial performance“Option Awards” column and “Stock Awards” column, respectively, of the Company and, accordingly, his compensation should be more closely tied to the Company’s stock performance results. The2011 Summary Compensation Committee allocated approximately 23-29% of the other named executive officers’ targeted total direct compensation to long-term equity incentive awards.table below.

The Compensation Committee approves, and recommends to the board of directors for approval, all grants of equity compensation to Company employees, including the named executive officers. During the fiscal year ended December 31, 2009, equity awards were made to approximately 111 employees, including the named executive officers, or about 6.5% of total employees. Stock options are granted with an exercise price equal to the closing price of our common stock on the date of grant. We do not have a program, plan or practice to time our long-term equity incentive awards in coordination with the release of material, non-public information. In the event that material non-public information becomes known to the Compensation Committee prior to granting long-term equity incentive awards, the Compensation Committee will take the existence of such information under advisement and make an assessment in its business judgment whether to delay the grant of the long-term equity incentive award in order to avoid any impropriety.

2009 Long-Term Cash Incentive Award

22

AfterIn 2009, the Compensation Committee granted a one-time, long-term cash incentive award (the “2009 Long-Term Cash Incentive Award”) to the named executive officers under the 2007 Incentive Plan. Because the 2009 salary increase for onelong-term cash incentive award was granted during the 2009 fiscal year, the Company considers it part of 2009 compensation. However, we are including a description of the 2009 Long-Term Cash Incentive Award below because part of the time-based portion of the 2009 Long-Term Incentive Award was earned in 2011 and is reported in the “Bonus” column of the 2011 Summary Compensation Table. The Compensation Committee did not grant long-term cash incentive awards to the named executive officers in 2010 or 2011.

The 2009 Long-Term Cash Incentive Award was composed of two components; the first component was performance-based and the second component was time-based.

Each named executive officer took effect andfully earned his respective performance-based component of the long-term incentive awards were made for the fiscal year endedaward as of December 31, 2010 which was reported in the “Non-Equity Incentive Plan Compensation” column of the 2010 Summary Compensation Table in last year’s proxy statement.

Under the time-based component of the 2009 individualLong-Term Cash Incentive Award, each of the named executive officers was eligible to earn an aggregate cash payout, with 50% of the cash payout being paid in April 2011 and with the remaining 50% of the cash payout being paid in April 2012, assuming the named executive officer continues employment with the Company through the payment date. Each named executive officer earned 50% of his respective time-based component of the award in April 2011, which is reported in the “Bonus” column of the 2011 Summary Compensation Table.

The following table further describes the performance-based and time-based components of the 2009 Long-Term Cash Incentive Award:

26

2011 Total Direct Compensation

Based upon the most recent competitive pay information received from Pearl Meyer, the Compensation Committee believes that our 2011 executive compensation program provided target total direct compensation ranged between(i.e., base salary, target total cash compensation and target long-term equity incentive awards) that was reasonable and competitive but not excessive, as the 21st and 59th percentile of the survey data. On average the total direct compensation for our named executive officers falls just below the market median.following table illustrates.

Additional Information

Health, Welfare and Retirement Benefits

Besides being a common component of compensation, health, welfare and retirement benefits are designed to provide a safety net of protection against the financial catastrophes that can result from illness, disability or death, and to provide a reasonable level of retirement income based on years of service with us. These benefits help us to be competitive in attracting and retaining employees. Benefits help to keep employees focused on job performance without major distractions related to paying for health care, adequate savings for retirement and similar issues.

We offer a standard range of health and welfare benefits to substantially all of our U.S. employees, including the named executive officers. These benefits include medical, prescription drug and dental coverage, and life and accidental death and dismemberment insurance.insurance, vacation, sick leave and other paid holidays. In addition, long-term disability insurance benefits and optional short-term coverage is available to all salariedof our employees. These benefits are intended to aid in the health and well-being of our employees, as well as contribute directly to a productive and successful work life, which we believe will enhance the financial results for us and our shareholders.

We also offer a defined contribution 401(k) plan to substantially all of our U.S. employees. The participants may contribute, on a pretax basis, any amount of their base salary and cash incentive compensation, upemployees the opportunity to a limit imposed underparticipate in our defined contribution 401(k) plan. Under the Internal Revenue Code. From January 2009 through March 2009,plan, we mademake matching contributions, up to a limit imposed under the Internal Revenue Code, with respect to these employee pretax contributions equal to 50% of the participant’s contributions made by a participating employee ofon the first 6% of compensation deferred under the employee’s compensation.plan. Under this matching scheme, employees become fully vested in employerour matching contributions after five years of employment and are ratably vested prior to that time.employment. The 2011 Summary Compensation Table reflects our contributions to the 401(k) Planplan for each named executive officer. Although the Company does not currently provide matching contributions to the 401(k) Plan for our named executive officers, we anticipate reinstating Company matching contributions beginning on April 1, 2010.officer in 2011.

Perquisites

We provide a limited number of perquisites to certainthe named executive officers, including a car allowance, payment of life insurance premiums and key employees. Those perquisites primarily consistPetroleum Club dues. The life insurance policy pays the beneficiary an amount equal to the applicable named executive officer’s annual salary up to a maximum of car allowances and$300,000.

Effective December 31, 2010, the Compensation Committee adopted a policy prohibiting the payment of country club memberships that ourfor any of the named executive officers use in performing their duties. officers.

The All Other Compensation column of the 2011 Summary Compensation Table shows the value of perquisites we provided to the named executive officers during the fiscal year ended December 31, 2009.in 2011.

27

Stock Ownership Guidelines

In order to encouragestrengthen the acquisition and retentionalignment of our common stock by our namedthe interests of the name executive officers to further align their economic interests with those of ourand shareholders and to focus our executives onincrease visibility of the long-term sustained appreciation of our common stock, our compensation committee and our board of directors have adopted tiered guidelines requiring our current named executive officers to own a specified amount of our commonofficers’ stock equal to a specified multiple of their annual base salary. ownership, we adopted the following stock ownership guidelines:

The ownership target is tomust be acquiredobtained no later than the December 31 following the fifth anniversary of the executive’sofficer’s commencement of employment with the Company, or by December 31, 2013 for any executiveofficer employed as of May 17, 2008. The ownership target for the chief executive officer equals the value of three times his or her annual base salary. The ownership target for the other named executive officers equals two times his or her annual base salary. For purposes of thisthe above calculation, unvested restricted stock and restricted stock unitsRSUs may be counted toward the applicable ownership requirement.

As of March 31, 2010, Mr.15, 2012, Messrs. Locke, Phillips and Mr. Hibbetts hadWest have fully met their stock ownership requirements. Mr. West, Mr.Messrs. Eustace and Mr. Peña have until December 31, 2013 to meet their ownership targets. Mr. Phillips has until December 31, 2014 to meet his ownership target.

23

Compensation Considerations for Fiscal Year 2010

The Compensation Committee believes that stock option grants and restricted stock awards continue to constitute the best long-term award vehicles and that certain elements of compensation should be based on Company performance. In early 2010, the Committee decided not to award performance-based long-term cash awards to the named executive officers and instead to award performance-based restricted stock units. Recognizing the need to balance retention of executive officers with the realities of the Company’s reduced financial performance, the Compensation Committee decided to utilize a lower EBITDA threshold ($30 million) for annual incentive compensation than the threshold established for fiscal 2009 ($90 million). The Compensation Committee will continue to review our compensation programs and make appropriate modifications to discourage risky short-term behavior and reward consistent and longer-term performance that correlates with shareowner value.

Role of Executive Officers in Setting Compensation

The Chief Executive Officer provides input into the Compensation Committee’s meeting agendas, including background information regarding our strategic objectives, suggestions on annual performance targets and reports on his evaluations of the other officers. He makes compensation recommendations for the other officers with respect to base salary increases, annual cash incentives and annual equity incentives that are then reviewed by the Compensation Committee. The Chief Financial Officer evaluates the financial implications of any Compensation Committee action.

The Compensation Committee meetings are attended by the Compensation Committee members and, as needed, by other directors, the Chief Executive Officer, the Chief Financial Officer, and outside advisors, including our compensation consultant. The Compensation Committee regularly meets in executive session without any members of management present.

Compliance With Internal Revenue Code Section 162(m)

Section 162(m) of the Internal Revenue Code of 1986, as amended, limits the tax deduction for annual compensation paid to a public company’s Chief Executive Officer and its next three most highly compensated executive officers, excluding the Chief Financial Officer, to $1 million.$1,000,000. Qualified performance-based compensation is excluded from this deduction limitation if certain requirements are met. Stock option awards granted under our 2007 Incentive Plan and other equity compensation plans have been structured to qualify as performance-based. The Compensation Committee’s intent is to design compensation awards that will be deductible without limitation where doing so will further the purposes of our executive compensation program. The Compensation Committee will, however, take into consideration the various other factors described in this Compensation Discussion and Analysis, together with Section 162(m) considerations in making executive compensation decisions and could, in certain circumstances, approve and authorize compensation that is not fully tax deductible. All compensation paid to the named executive officers in 2009 was deductible under Section 162(m).

24

REPORT OF THE COMPENSATION COMMITTEE

The Compensation Committee has reviewed and discussed the Compensation Discussion and Analysis included in this proxy statement with the management of Pioneer Drilling Company, and, based on such review and discussions, the Compensation Committee recommended to the board of directors of Pioneer Drilling Company that the Compensation Discussion and Analysis be included in this proxy statement.

The Compensation Committee

The information above in the Report of the Compensation Committee shall not be deemed to be “soliciting material” or to be “filed” with the SEC or subject to Regulation 14A or 14C or to the liabilities of Section 18 of the Exchange Act, nor shall it be deemed to be incorporated by reference into any filing under the Securities Act of 1933 (the “Securities Act”) or the Exchange Act, except to the extent that the Company specifically requests that the information be treated as soliciting material or specifically incorporates the information by reference.

25

EXECUTIVE COMPENSATION

20092011 Summary Compensation Table

The following table presents information concerning compensation for all services rendered to us in all capacities during the fiscal years ended December 31, 2011, 2010, and 2009, and December 31, 2008, the nine month fiscal year ended December 31, 2007 and the fiscal year ended March 31, 2007, by each individual who served as our principalnamed executive officer or principal financial officer during these fiscal years and our other executive officers (collectively, the “named executive officers”).officers.