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Superior Energy Services Announces Second Quarter 2008 Results

Results Include All-Time High Quarterly Revenue from International Markets

HARVEY, La., July 30 /PRNewswire-FirstCall/ -- Superior Energy Services, Inc. (NYSE: SPN) today announced net income of $73.9 million and diluted earnings per share of $0.89 on revenues of $457.7 million for the second quarter of 2008, as compared to net income of $70.1 million, or $0.85 diluted earnings per share on revenues of $396.8 million for the second quarter of 2007. Excluding a gain on sale of a business and non-cash, unrealized losses from hedging contracts impacting the Company's earnings (losses) from equity method investments, adjusted net income for the second quarter of 2008 was $84.7 million, or $1.02 diluted earnings per share.

Operating factors impacting the quarter as compared to the most recent quarter (first quarter 2008) include the following:

-- Well Intervention revenue increased 27% primarily due to increases in demand for production-related services such as electric line, coiled tubing and pumping and stimulation as well as a full quarter contribution from work on the previously announced $750 million wreck removal project.

-- Rental Tool revenue increased 3% largely due to increased rentals of drilling-related tools in the Gulf of Mexico and certain international market areas.

-- Marine revenues increased 13% due to higher utilization across most liftboat classes reflecting a seasonal increase in Gulf of Mexico activity.

-- International revenue increased 13% to a quarterly record of $86 million due to increases in well control work and rentals of drill pipe, specialty tubulars and stabilization equipment.

-- Gulf of Mexico revenue increased 8% to $246 million as a result of increases as revenue grew in all three segments. Domestic land revenue decreased 9% to $126 million due to the completion of certain well intervention and rental tools projects. Domestic land revenue from core well intervention services such as electric line and coiled tubing increased over the most recent quarter.

Terence Hall, Chairman and CEO of Superior, stated, "We grew our quarterly revenue and operating income (excluding adjustments) to all-time high levels while replacing the earnings from our divested oil and gas business with earnings from our core oilfield service businesses. Higher demand for existing products and services as well as the continued execution of our geographic diversification strategy drove our performance. This resulted in significant growth in our well intervention and rental tools segments sequentially and year-over-year. In addition, our quarterly international revenue was at an all-time high as we expanded into new markets in Latin America and Europe. The near-term outlook is extremely positive given the trend of increasing demand we experienced during the second quarter coupled with anticipated growth in domestic land drilling activity and capital spending by our customers in the second half of the year."

For the six months ended June 30, 2008, revenue was $899.0 million and net income was $176.0 million or $2.12 diluted earnings per share, as compared to revenue of $759.7 million and net income of $134.1 million or $1.63 diluted earnings per share for the six months ended June 30, 2007.

Well Intervention Group Segment

Second quarter revenue for the Well Intervention Group was a record $296.9 million, a 27% increase from the first quarter of 2008 and a 56% increase from the second quarter of 2007. Income from operations was $78.2 million, or 26% of segment revenue as compared to $50.8 million, or 22% of segment revenue, in the first quarter of 2008. The primary drivers for the sequential and year-over-year revenue growth was an increase in project management and marine engineering services as the Company completed its first full quarter of field operations associated with the previously announced wreck removal project. In addition, sequential improvement was due to higher utilization of coiled tubing and electric line services in certain domestic land markets, increased Gulf of Mexico activity for electric line, pumping and stimulation, hydraulic workover/snubbing, and plug and abandonment services, and increased well control work in international markets.

Rental Tools Segment

Revenue of $134.8 million was 3% higher than the first quarter of 2008 and 9% higher than the second quarter of 2007. Income from operations was $47.5 million, or 35% of segment revenue, compared to $45.8 million, or 35% of segment revenue in the first quarter of 2008. Excluding a $3.3 million gain on sale of business in the first quarter of 2008, the operating margin percentage increased sequentially by 3% due to the increase in higher margin rentals of stabilization equipment, drill pipe and accessories. The segment benefited from an increase in the number of rigs drilling for oil and natural gas. As a result, demand for stabilization equipment increased in all three major market areas (Gulf of Mexico, domestic land and international). Demand also increased for drill pipe and other specialty tubular products in the Gulf of Mexico and internationally in Brazil, Colombia and Venezuela.

Marine Segment

Superior's marine revenue was $26.0 million, a 13% increase from the first quarter of 2008 and a 26% decrease from the second quarter of 2007. Income from operations was $1.4 million, or 6% of segment revenue, down from $2.6 million, or 11% of segment revenue in the first quarter of 2008. Average daily revenue in the second quarter was approximately $286,000, inclusive of subsistence revenue, as compared to $254,000 per day in the first quarter of 2008. Average fleet utilization was 57% as compared to 49% in the first quarter of 2008 and 77% in the second quarter of 2007. Utilization increased each month during the quarter as most liftboat classes experienced higher utilization compared to the most recent quarter. However, operating expenses increased due to higher boat maintenance expense and labor costs.


           Liftboat Average Dayrates and Utilization by Class Size
                       Three Months Ended June 30, 2008
                                  ($ actual)

                                    Average
         Class        Liftboats     Dayrate    Utilization
       145'-155'         11         $8,375       48.0%
       160'-175'          7         11,296       40.4%
       200'               5         16,704       73.0%
       230'-245'          3         24,560       75.5%
       250'               2         35,643       91.8%


    Equity-Method Investment

Income (losses) in equity-method investment includes the Company's remaining interest in SPN Resources, LLC and the Company's 40% investment in Beryl Oil and Gas. The $7.8 million loss from equity-method investments in the second quarter of 2008 includes $19.9 million, pre-tax, of the Company's share of non-cash unrealized losses associated with mark-to-market changes in the value of outstanding hedging contracts put in place by SPN Resources, LLC. The loss was due to significant increases in natural gas and oil prices, the volatility of which makes these changes unpredictable. The contracts were put in place subsequent to the sale of the Company's 75% interest in SPN Resources. The Company's equity-method investments performed as expected, exclusive of the unrealized loss.

Conference Call Information

The Company will host a conference call at 10 a.m. Central Time on Thursday, July 31, 2008. The call can be accessed from Superior's website at http://www.superiorenergy.com, or by telephone at 303-262-2190. For those who cannot listen to the live call, a telephonic replay will be available through Friday, August 8, 2008 and may be accessed by calling 303-590-3000 and using the pass code 11116473#. An archive of the webcast will be available after the call for a period of 60 days on http://www.superiorenergy.com.

Superior Energy Services, Inc. serves the drilling and production needs of oil and gas companies worldwide through its brand name rental tools and its integrated well intervention services and tools, supported by an engineering staff who plan and design solutions for customers. Offshore projects are delivered by the Company's fleet of modern marine assets.

This press release contains certain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 which involve known and unknown risks, uncertainties and other factors. Among the factors that could cause actual results to differ materially are: volatility of the oil and gas industry, including the level of exploration, production and development activity; risks associated with the Company's rapid growth; changes in competitive factors and other material factors that are described from time to time in the Company's filings with the Securities and Exchange Commission. Actual events, circumstances, effects and results may be materially different from the results, performance or achievements expressed or implied by the forward-looking statements. Consequently, the forward- looking statements contained herein should not be regarded as representations by Superior or any other person that the projected outcomes can or will be achieved.


               SUPERIOR ENERGY SERVICES, INC. AND SUBSIDIARIES
                      Consolidated Statements of Operations
                Three and Six Months Ended June 30, 2008 and 2007
                (in thousands, except earnings per share amounts)
                                   (unaudited)

                                       Three Months Ended   Six Months Ended
                                            June 30,            June 30,
                                         2008      2007      2008      2007
    Oilfield service and rental
     revenues                          $457,655  $348,589  $843,974  $674,484
    Oil and gas revenues                      -    48,164    55,072    85,193
      Total revenues                    457,655   396,753   899,046   759,677

    Cost of oilfield services and
     rentals                            222,097   162,973   413,229   305,402
    Cost of oil and gas sales                 -    18,833    12,986    36,891
      Total cost of services, rentals
       and sales                        222,097   181,806   426,215   342,293

    Depreciation, depletion,
     amortization and accretion          41,954    45,242    83,833    84,086
    General and administrative
     expenses                            66,426    53,824   136,032   104,683
    Gain on sale of business              3,058         -    40,946         -

    Income from operations              130,236   115,881   293,912   228,615

    Other income (expense):
      Interest expense, net              (6,956)   (7,534)  (15,072)  (15,233)
      Earnings (losses) from equity-
       method investments, net           (7,765)    1,164    (3,808)   (3,842)

    Income before income taxes          115,515   109,511   275,032   209,540

    Income taxes                         41,586    39,424    99,012    75,434

    Net income                          $73,929   $70,087  $176,020  $134,106


    Basic earnings per share              $0.92     $0.86     $2.18     $1.66

    Diluted earnings per share            $0.89     $0.85     $2.12     $1.63

    Weighted average common shares used
     in computing earnings per share:
        Basic                            80,749    81,047    80,762    80,841
        Diluted                          82,942    82,562    82,918    82,379



                 SUPERIOR ENERGY SERVICES, INC. AND SUBSIDIARIES
                           CONSOLIDATED BALANCE SHEETS
                      JUNE 30, 2008 AND DECEMBER 31, 2007
                                 (in thousands)

                                                 6/30/2008         12/31/2007
                                                (unaudited)         (audited)
    ASSETS

    Current assets:
      Cash and cash equivalents                   $119,132           $51,649
      Accounts receivable, net                     391,400           343,334
      Current portion of notes receivable                -            15,584
      Prepaid expenses                              22,273            19,641
      Other current assets                          45,693            40,797

        Total current assets                       578,498           471,005

    Property, plant and equipment, net           1,002,436         1,086,408
    Goodwill, net                                  487,243           484,594
    Notes receivable                                     -            16,732
    Equity-method investments                       72,354            56,961
    Intangible and other long-term
     assets, net                                   138,513           141,549

        Total assets                            $2,279,044        $2,257,249

    LIABILITIES AND STOCKHOLDERS' EQUITY

    Current liabilities:
      Accounts payable                             $69,648           $69,510
      Accrued expenses                             135,189           177,779
      Income taxes payable                          36,367             7,520
      Current portion of decommissioning
       liabilities                                       -            36,812
      Current maturities of long-term debt             810               810

         Total current liabilities                 242,014           292,431

    Deferred income taxes                          154,322           163,338
    Decommissioning liabilities                          -            88,158
    Long-term debt                                 710,987           711,151
    Other long-term liabilities                     26,178            21,492

    Total stockholders' equity                   1,145,543           980,679

         Total liabilities and
          stockholders' equity                  $2,279,044        $2,257,249



               SUPERIOR ENERGY SERVICES, INC. AND SUBSIDIARIES
                              Segment Highlights
     Three months ended June 30, 2008, March 31, 2008, and June 30, 2007
                                 (Unaudited)
                                (in thousands)


                                                   Three months ended,
                                            June 30,   March 31,    June 30,
    Revenue                                   2008        2008        2007

    Well Intervention                       $296,891    $234,115    $190,542

    Rental Tools                             134,773     130,327     123,736

    Marine                                    25,991      23,089      35,162

    Oil and Gas                                  -        55,072      48,164

      Less: Oil and Gas Eliminations (2)         -        (1,212)       (851)

    Total Revenues                          $457,655    $441,391    $396,753


                                                   Three months ended,
                                            June 30,   March 31,    June 30,
    Gross Profit (1)                          2008        2008        2007

    Well Intervention                       $135,410    $101,716     $81,093

    Rental Tools                              93,438      86,227      84,718

    Marine                                     6,710       7,244      19,805

    Oil and Gas                                  -        42,086      29,331

    Total Gross Profit                      $235,558    $237,273    $214,947



                                                   Three months ended,
                                            June 30,    March 31,    June 30,
    Income from Operations                     2008        2008        2007

    Well Intervention                        $78,202     $50,778     $42,111

    Rental Tools (3)                          47,531      45,757      46,640

    Marine                                     1,445       2,578      15,212

    Oil and Gas (4)                            3,058      64,563      11,918

    Total Income from Operations            $130,236    $163,676    $115,881


    (1) Gross profit is calculated by subtracting cost of services (exclusive
        of depreciation, depletion, amortization and accretion) from revenue
        for each of the Company's segments.
    (2) Oil and gas eliminations represent products and services from the
        company's segments provided to the Oil and Gas Segment.
    (3) Income from operations in the Rental Tools Segment for the three
        months ended March 31, 2008 includes a gain on sale of business of
        $3.3 million.
    (4) Income from operations in the Oil and Gas Segment for the three months
        ended June 30, 2008 includes a gain on sale of business of $3.1
        million, and for the three months ended March 31, 2008 includes a gain
        on sale of business of $34.1 million, one-time incremental general and
        administrative expenses of $4.5 million, and a reduction of
        depreciation, depletion, and amortization of $9.7 million related to
        assets held for sale.

FOR FURTHER INFORMATION CONTACT:
Terence Hall, CEO; Robert Taylor, CFO;
Greg Rosenstein, VP of Investor Relations,
504-362-4321

SOURCE Superior Energy Services, Inc.

CONTACT: Terence Hall, CEO, or Robert Taylor, CFO, or Greg Rosenstein,
VP of Investor Relations, all of Superior Energy Services, Inc.,
+1-504-362-4321
Web site: http://www.superiorenergy.com
(SPN)