Want to sell oil and gas? Unfortunately, you can't just go to the shop floor and switch on the Hydrocarbon-O-Matic 2000. Rather, you have to physically pump the stuff out of the ground. Not surprisingly, when demand for and production of oil and gas go up, there is an increased demand for drilling and pumping equipment.

Riding the rising demand (and rising day rates) for drilling rigs, the stock of Pioneer Drilling (AMEX:PDC) has had a heckuva year -- more than doubling in the past 52 weeks.

Take a peek at the fourth-quarter results and you'll see why. Revenue climbed 66% on increasing utilization and a jump in the number of rigs in operation. While average revenue per day dipped a bit from the year-ago level, average costs per day dropped pretty significantly. On a more bottom-line level, Pioneer Drilling saw operating income of $9.1 million for the quarter versus $1.4 million a year ago.

Much like what the larger offshore company Transocean (NYSE:RIG) has reported, day rates on land are increasing as well. Pioneer saw 12% sequential growth in day rates and expects 10% growth in each of the next two quarters. With day rates climbing and the company bringing more and more rigs into operation, you can see why investors have bid this stock up already.

There's no doubt that Pioneer Drilling management is trying to make hay while the sun shines. The company has had two equity offerings in the past 12 months and much of that money has been put toward debt repayment, rig acquisition, and rig building. This is really nothing new for the company -- in five years, Pioneer Drilling has gone from eight rigs to 50, and there are plans for more to come online in 2005 (and that doesn't include the possibility of further acquisitions).

Pioneer Drilling is a relatively small operator -- at least in terms of market capitalization -- compared to the likes of Precision Drilling (NYSE:PDS), Grey Wolf (NYSE:GW), and Pride International (NYSE:PDE). But so what? Small doesn't mean "bad" -- it's a solid operator that's growing quickly and expanding the rig inventory.

While valuation looks pretty high, Pioneer Drilling's trailing P/E isn't terribly out of line for the industry, nor is the forward P/E. What's more, the company is expected to follow the industry with respect to strong growth in the coming year -- in the case of Pioneer, analysts expect earnings to more than double.

There are plenty of ways to play the energy services sector, and Pioneer is just one of them. Though it's true that drilling activity (and day rates) are dependent upon energy prices, so long as oil stays above $30 or so a barrel, there should be plenty of business to keep drillers happy.

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Fool contributor Stephen Simpson has no financial interest in any stocks mentioned (that means he's neither long nor short the shares).