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Superior Energy Services, Inc. Reports First Quarter 2011 Results
First Quarter Earnings of $0.19 Per Diluted Share

NEW ORLEANS, April 27, 2011 /PRNewswire via COMTEX/ --

Superior Energy Services, Inc. (NYSE: SPN) today announced net income of $15.5 million, or $0.19 per diluted share on revenue of $414.0 million for the first quarter of 2011.

These results are compared with net income of $21.5 million, or $0.27 per diluted share on revenue of $364.5 million for the first quarter of 2010.

The first quarter 2011 results include a pre-tax gain of $2.7 million from the sale of three 145-155-ft. class liftboats, and $2.1 million in non-cash, unrealized pre-tax losses from hedging contracts at the Company's equity-method investments.

David Dunlap, CEO of Superior, commented, "Although our Gulf of Mexico revenue declined 18% sequentially due to the well-documented slow pace in permitting, our first quarter results came in toward the higher end of our guidance range due to the continued strength of the U.S. land markets.

"U.S. land revenue was a record $179 million for the first quarter, which represents a 5% sequential increase as compared with a 2% increase in the drilling rig count. More importantly, demand for some of our core products and services - coiled tubing, premium drill pipe and bottom hole assemblies - increased approximately 12% from the fourth quarter of 2010. These products and services are the major focus of our 2011 domestic capital expenditures plan.

"While our overall international revenue declined 18% due to reduced utilization of our subsea operating vessels, international revenue within our drilling products and services segment increased 1%."

2011 Earnings Guidance Update

The Company's recent $500.0 million, 6.375% senior note offering is expected to increase interest expense by approximately $22.0 million - or $0.18 per share - for the remainder of 2011. As a result of this incremental expense, the Company is lowering its earnings guidance range to $1.62 and $2.02 per diluted share.

Mr. Dunlap commented, "With the exception of the increase in interest expense, we are reaffirming full year guidance. Our guidance assumes that we will benefit from our capital expenditures plan during the remainder of the year, continued acceleration of domestic land activity and from an increase in deepwater Gulf of Mexico activity. We are also encouraged by the number of deepwater permits that have been issued and are hopeful that this permitting will soon result in increased drilling activity."

Geographic Breakdown

For the first quarter of 2011, Gulf of Mexico revenue was approximately $131.1 million, domestic land revenue was approximately $179.1 million, and international revenue was approximately $103.8 million.

Subsea and Well Enhancement Segment

First quarter revenue for the Subsea and Well Enhancement Segment was $262.0 million, as compared with $232.8 million in the first quarter of 2010 and $306.5 million in the fourth quarter of 2010, which represents a 13% year-over-year increase and a 15% sequential decrease.

Sequentially, domestic land revenue increased 3% due to a 10% increase in coiled tubing revenue, as well as increased demand for pumping services. These increases were partially offset by a decline in demand for pressure control services. Gulf of Mexico revenue decreased 22% sequentially due to seasonal issues, and the slow pace of permitting for drilling, intervention, and end-of-life projects. These factors led to reduced activity levels for pressure control, marine engineering projects, completion tools, and coiled tubing. Another factor impacting Gulf of Mexico revenue was the sale of a saturation diving system in the fourth quarter of 2010 that did not repeat. International revenue decreased 27% due primarily to lower demand for vessels and equipment used to support subsea inspection, repair and maintenance work.

Drilling Products and Services Segment

First quarter revenue for the Drilling Products and Services Segment was $128.3 million, as compared with $114.3 million in the first quarter of 2010 - a 12% year-over-year improvement - and $120.4 million in the fourth quarter of 2010, or 7% higher sequentially.

Domestic land revenue increased 10% sequentially primarily due to increased rentals of premium drill pipe, accommodations, specialty tubulars and accessories, and stabilization equipment. Gulf of Mexico revenue increased 8% due to increased rentals of accommodations partially offset by a decrease in rentals of specialty tubulars and accessories. International revenue increased 1% primarily due to increased rentals of premium drill pipe and accessories.

Marine Segment

Marine Segment revenue in the first quarter was $23.7 million, a 35% increase over the first quarter of 2010 and a 21% decrease from fourth quarter of 2010. Average fleet utilization in the first quarter of 2011 was 57% as compared with 47% in the first quarter of 2010 and 72% in the fourth quarter of 2010. The Company sold three liftboats from its 145-155 ft. class fleet during the first quarter.

Liftboat Average Dayrates and Utilization by Class Size

Three Months Ended March 31, 2011

($ actual)


Class


Liftboats


Average
Dayrate


Utilization

145'-155'


6


$6,147


51.9%

160'-175'


7


7,629


41.4%

200'


5


11,045


62.7%

230'-245'


3


23,619


64.8%

250'


2


28,570


76.1%

265'


2


36,985


83.3%

Conference Call Information

The Company will host a conference call at 10 a.m. Central Time on Thursday, April 28, 2011. The call can be accessed from Superior's website at www.superiorenergy.com, or by telephone at 480-629-9644. For those who cannot listen to the live call, a telephonic replay will be available through Thursday, May 5, 2011 and may be accessed by calling 303-590-3030 and using the pass code 4432547. 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-related 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 uncertainty of macroeconomic and business conditions worldwide, as well as the global credit markets; 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.

FOR FURTHER INFORMATION CONTACT: David Dunlap, CEO; Robert Taylor, CFO; Greg Rosenstein, VP of Investor Relations, (504) 587-7374

SUPERIOR ENERGY SERVICES, INC. AND SUBSIDIARIES

Consolidated Statements of Operations

Three Months Ended March 31, 2011 and 2010

(in thousands, except earnings per share amounts)

(unaudited)




Three Months Ended



March 31,



2011


2010






Revenues


$ 413,981


$ 364,511






Cost of services (exclusive of items shown separately below)


233,845


199,052

Depreciation, depletion, amortization and accretion


59,363


51,048

General and administrative expenses


86,879


70,724

Gain on sale of businesses


2,674


-






Income from operations


36,568


43,687






Other income (expense):





Interest expense, net


(12,372)


(14,038)

Earnings from equity-method investments, net


27


3,985






Income before income taxes


24,223


33,634






Income taxes


8,720


12,108






Net income


$ 15,503


$ 21,526











Basic earnings per share


$ 0.20


$ 0.27






Diluted earnings per share


$ 0.19


$ 0.27






Weighted average common shares used





in computing earnings per share:





Basic


79,021


78,534

Diluted


80,759


79,353

SUPERIOR ENERGY SERVICES, INC. AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS

MARCH 31, 2011 AND DECEMBER 31, 2010

(in thousands)













3/31/2011


12/31/2010



(Unaudited)


(Audited)






ASSETS










Current assets:





Cash and cash equivalents


$ 71,082


$ 50,727

Accounts receivable, net


375,228


452,450

Prepaid expenses


31,974


25,828

Inventory and other current assets


234,891


235,047






Total current assets


713,175


764,052






Property, plant and equipment, net


1,361,412


1,313,150

Goodwill


589,967


588,000

Notes receivable


70,135


69,026

Equity-method investments


59,350


59,322

Intangible and other long-term assets, net


121,208


113,983






Total assets


$ 2,915,247


$ 2,907,533






LIABILITIES AND STOCKHOLDERS' EQUITY










Current liabilities:





Accounts payable


$ 105,753


$ 110,276

Accrued expenses


150,015


162,044

Income taxes payable


-


2,475

Deferred income taxes


23,158


29,353

Current portion of decommissioning liabilities


17,063


16,929

Current maturities of long-term debt


810


184,810






Total current liabilities


296,799


505,887






Deferred income taxes


228,107


223,936

Decommissioning liabilities


102,321


100,787

Long-term debt, net


851,822


681,635

Other long-term liabilities


118,073


114,737






Total stockholders' equity


1,318,125


1,280,551






Total liabilities and stockholders' equity


$ 2,915,247


$ 2,907,533

Superior Energy Services, Inc. and Subsidiaries

Segment Highlights

Three months ended March 31, 2011, December 31, 2010 and March 31, 2010

(Unaudited)

(in thousands)




Three months ended

Revenue


March 31, 2011


December 31, 2010


March 31, 2010








Subsea and Well Enhancement


$ 262,045


$ 306,496


$ 232,766








Drilling Products and Services


128,270


120,366


114,277








Marine


23,666


30,034


17,468















Total Revenues


$ 413,981


$ 456,896


$ 364,511











Gross Profit (1)


March 31, 2011


December 31, 2010


March 31, 2010








Subsea and Well Enhancement


$ 91,377


$ 112,610


$ 89,897








Drilling Products and Services


81,573


73,835


74,182








Marine


7,186


13,014


1,380








Total Gross Profit


$ 180,136


$ 199,459


$ 165,459











Income (Loss) from Operations


March 31, 2011 (2)


December 31, 2010 (3)


March 31, 2010








Subsea and Well Enhancement


$ 10,979


$ 23,689


$ 23,697








Drilling Products and Services


21,704


16,641


23,947








Marine


3,885


(25,191)


(3,957)



-


-










Total Income from Operations


$ 36,568


$ 15,139


$ 43,687








(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) Includes a gain on sale of liftboats of $2.7 million recorded in the Marine Segment.

(3) Includes management transition expenses of $12.2 million recorded in general and administrative expenses, reduction of value of assets of $32.0 million recorded in the Marine Segment and a gain on sale of liftboat of $1.1 million recorded in the Marine Segment.

SOURCE Superior Energy Services, Inc.