Shares of Union Drilling, Inc. (NASDAQ: UDRL) and Bronco Drilling Co. Inc. (NASDAQ: BRNC) touched a new 52-week high of $10.35 each on Friday. The onshore drillers reported a narrower loss for the fourth quarter on strong drilling activity.

The drillers expect higher oil prices to drive dayrates up this year as exploration and production companies look to increasingly spend on search for liquid-rich properties, according to a Reuters report. Oil prices, which rose 12 percent in the fourth quarter, have pushed exploration companies to hunt further for oil on land.

Union Drilling

The Fort Worth, Texas-based Union Drilling posted a fourth quarter loss of $313,000 or 1 cent a share, narrower than loss of $2.89 million or 12 cents a share last year. Adjusted loss was 6 cents a share, while Street predicts loss of 11 cents a share. Revenue rose to $58.17 million from $40.57 million.

In the fourth quarter, Union Drilling's average marketed rig utilization rose to 58.5 percent from 37 percent last year. Revenue days grew 58 percent to 3,824. The company said dayrates dramatically firmed over the past year, and that the company's rigs were signed at higher rates in 2011.

I believe that oil prices will remain high enough to drive overall rig count growth even if gas directed activity moderates and that as horizontal oil drilling expands, the equipment and trained work force we have will continue to experience healthy demand. My outlook for 2011 is positive, since our higher dayrate long-term contracts are generally renewing at their existing rates and the rigs that we activated more recently are mostly renewing at higher rates, said Christopher Strong, Union Drilling’s Chief Executive.

Union Drilling said it lost some on-hire days in early 2011 due to weather and would experience normal seasonal impacts in the Northeast either late in the first quarter or early in the second quarter depending upon how the rest of winter plays out.

Consistent with past practice, Union Drilling said it would continue to invest in larger equipment while decommissioning smaller rigs. Two new 1,000 horsepower rigs should begin working at the beginning of the second quarter, one in Appalachia that was previously announced and a new rig we recently acquired for West Texas.

Although we have low debt and close to $60 million available under our revolving line of credit, we are in the process of negotiating a larger facility to give us greater flexibility in looking at larger rig investments, said Christopher Strong.

Union Drilling stock gapped open sharply higher March 4 at $7.84, compared to Thursday's close of $7.57. The stock touched a new 52-week high of $10.35 during the trading.

The stock closed Friday's regular trading up 28.27 percent at $9.71 with a volume of 486,100 shares on the NASDAQ stock market. In the after-hours, the stock rose 1.44 percent to $9.85. The stock traded between $4.28 and $10.35 during the past 52 weeks.

Bronco Drilling

The Edmond, Oklahoma-based Bronco Drilling posted fourth quarter loss of $2.5 million, narrower than loss of $6.1 million. On a per share basis, loss for the latest quarter was 9 cents a share. Excluding several non-recurring charges, earnings from continuing operations would have been 6 cents a share for the latest quarter.

Bronco Drilling's revenue grew to $37.3 million from $15.9 million. Analysts had expected a loss of 1 cent a share on revenue of $36.73 million for the fourth quarter.

In the fourth quarter, Bronco Drilling's utilization was 96 percent on 24 operating rigs, up from 31 percent on 37 operating rigs last year. Revenue days grew to 2,152 from 1,049. Average daily cash margin for its land drilling fleet was $6,008, higher than $3,072 last year.

Bronco Drilling said it was able to reduce its net debt position from $42.4 million to $0 by year end, while increasing key metrics of revenue days and Adjusted EBITDA by 31 percent and 74 percent, respectively, over 2009.

We believe the strong operating performance coupled with our healthy balance sheet provides us with a great deal of flexibility as we implement new growth strategies. We have made it a priority as we move forward with our growth plans to maximize the risk reward tradeoff in these projects. We believe this will create significant value for shareholders while maintaining a prudent financial risk profile, said Frank Harrison, Chief Executive of Bronco Drilling.

Bronco Drilling stock gapped open sharply higher March 4 at $9.00, compared to Thursday's close of $8.95. The stock touched a new 52-week high of $10.35 during the trading.

The stock closed Friday's regular trading up 9.94 percent at $9.84 with a volume of 1.32 million shares on the NASDAQ stock market. However, in the after-hours, the stock moved down 0.30 percent to $9.81. The stock traded between $3.25 and $10.35 during the past 52 weeks.

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