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What: Shares of Pioneer Energy Services (NYSE:PES) slumped on Thursday and were down more than 12% by 3:15 p.m. EDT.

So what: The onshore contract driller reported revenue of just $62.3 million, which was down 17% from last quarter and 54% below the year-ago quarter while missing analysts' expectations by $3.3 million. Weak oil and gas prices drove lower demand for the company's services and pushed down service pricing. On an adjusted basis, the company lost $20 million, or $0.31 per share, which was actually $0.01 per share better than analysts expected.

Revenue in Pioneer Energy Services' drilling services segment was down 16% from last quarter to $28 million. That was primarily due to lower rig utilization, which slumped to 39% in the quarter, down from 46% last quarter. Meanwhile, average drilling revenue per day was roughly flat. Revenue in the production services segment slumped 18% over last quarter to $34.3 million. Driving this decline was well servicing average pricing, which was down from $519 per hour in the first quarter to $485 per hour in the second quarter as well as a decline in well servicing rig utilization from 44% to 40%.

Pioneer Energy Services was far from the only land driller to report a weak second quarter. Rival Patterson-UTI Energy (NASDAQ:PTEN), for example, saw its revenue plunge 59% year over year because of the steep decline in rig utilization. Over the past quarter alone, Patterson-UTI Energy's rig count slumped from 71 to 55, though the company did note that its rig count has started to stabilize. Patterson-UTI Energy also pointed out that its pressure-pumping activity stabilized, though pricing remains unsustainably low.

Now what: While the second quarter was brutal, Pioneer Energy Services CEO Stacy Locke said, "we are pleased to see some early signs of improving activity levels." That said, the company has a bit of a mixed outlook for the third quarter. On the plus side, it anticipates production service revenue will improve by 10% to 15% thanks to an increase in customer spending, but it also projects rig utilization will fall to an average of 35% to 38%. That muted outlook suggests the worst is not over for Pioneer Energy Services just yet.