Time has borne out the notion that playing on industry services can often be just as successful as playing on the underlying industry itself (if not more so). It's the old pick-and-shovels notion -- you never know which piker will hit the mother lode, but you can sell shovels to every one who wants to try.

Now, it may be a bit of a stretch to extend that analogy to oil and gas, since many stock picks in that sector have panned out beautifully, but I would still suggest that the energy services space has its appeal even now. If Transocean (NYSE:RIG) and GlobalSantaFe (NYSE:GSF) are the sharks of the offshore space, and Nabors (AMEX:NBR) and Patterson-UTI (NASDAQ:PTEN) the lions of the land-based drillers, Pioneer Drilling (AMEX:PDC) might be thought of as something on the order of a bobcat -- much smaller, yes, but not to be ignored.

Conditions for the land-based drilling market continued to be strong in the fiscal first quarter, and Pioneer certainly saw benefits. Revenue climbed 50% for the quarter, and operating income was up 11-fold from the year-ago quarter. I'm not a big fan of sequential comparisons, but I think it might add some clarity here -- revenue was up 8%, and operating income was up more than 30% sequentially.

Looking at operational statistics, Pioneer had about 15 more rigs in operation this quarter than a year ago (and one more than in the prior quarter), and utilization was 95% vs. 93% a year ago. Revenue days totaled more than 4,300 for the quarter (up 44%), and the average revenue per day climbed 2%. Pioneer also managed to operate more profitably -- average drilling margins per day climbed from $2,291 a year ago and $4,202 in the fourth quarter to more than $4,800 for the first quarter.

Management plans to continue to add more rigs but will do so intelligently. Of the five rigs that it hopes to complete by fiscal year-end, all will be 1,000 horsepower or higher (the higher the horsepower, generally the higher the dayrate). What's more, management says they won't build a new rig without a commitment of one year or better at a dayrate of $15,500 or better.

As I've said probably a dozen or more times by now, sooner or later new rig production will catch up to demand and prices will ease off. That hasn't happened yet, though, and the increasing number of drilling projects in North America doesn't suggest it's going to happen soon. So, for now at least, Pioneer will continue to see improving rates and stronger financial results as energy producers try to reap the whirlwind of high energy prices.

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Fool contributor Stephen Simpson owns shares of Patterson-UTI. The Fool has a strict disclosure policy.