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Superior Energy Services, Inc. Announces Second Quarter 2004 Results

HARVEY, La.--(BUSINESS WIRE)--Aug. 2, 2004--Superior Energy Services, Inc. (NYSE:SPN) today announced results for the second quarter ended June 30, 2004. For the quarter, revenues were $137.5 million resulting in net income of $8.7 million or $0.12 diluted earnings per share, as compared to revenues of $128.9 million and net income of $8.3 million or $0.11 diluted earnings per share for the second quarter of 2003.

For the six months ended June 30, 2004, revenues were $254.0 million and net income was $12.3 million or $0.16 diluted earnings per share, as compared to revenues of $252.0 million and net income of $15.8 million or $0.21 diluted earnings per share for the six months ended June 30, 2003.

President and CEO Terry Hall Comments

President and CEO Terry Hall commented, "We experienced improvements from first quarter activity levels in all segments of our business due to seasonal increases in the Gulf of Mexico, which started in mid May and strengthened for the remainder of the quarter. Sequentially, the biggest improvement came from our marine segment, where liftboat utilization was at its highest level since the fourth quarter of 2002. This is attributable to increased demand for production-related and construction support projects, as well as working several liftboats on longer term projects. Most of our well intervention services experienced strong increases as compared to the first quarter, and our rental tools segment once again established a quarterly record for revenues."

Well Intervention Group Segment

Second quarter revenues for the Well Intervention Group were $53.2 million, a 15% increase from the second quarter of 2003 and a 20% increase from the first quarter of 2004. Activity was driven mainly by demand from our traditional customer base. On a sequential basis, activity increased for most production-related services, led by sharp increases in coiled tubing, pumping and stimulation, plugging and abandonment services and hydraulic workover services. In addition to a general increase in demand, the increases in coiled tubing and pumping and stimulation activity were due in part to the completion of a CoilTac project and work on high pressure wells, and the increase in hydraulic workover services was due in part to additional workover projects in Trinidad. As expected, revenue and earnings contributions derived from SPN Resource's oil and gas production were not significant during the second quarter. The company expects SPN Resources' contribution to grow significantly from present levels in the third quarter as a result of the closing the previously announced South Pass 60 Field transaction.

Rental Tools Segment

Revenues for the Rental Tools segment were a record $43.8 million, 20% higher than the second quarter of 2003 and 13% higher than the first quarter of 2004. Sequentially, the key drivers of the quarter were incremental rentals of stabilizers, hole openers and drill pipe internationally and in the deepwater Gulf of Mexico market, and increased rentals of production-related tools in the shallow water Gulf of Mexico.

Marine Segment

Second quarter revenues for the Marine segment were $17.7 million, a 4% decrease as compared to the second quarter of 2003 and a 30% increase as compared to the first quarter of 2004.

Average fleet utilization was 76% and average day rate was $5,733. As compared to the second quarter of 2003, the fleet's average utilization was 10% higher, but the average day rate was 11% lower as market conditions were weaker entering the second quarter of this year as compared to last year. However, dayrates began to improve late in the quarter.

As compared to the first quarter of 2004, utilization was 12% higher and the average day rate was up slightly. One of the company's 245-foot class liftboats was unavailable most of the quarter due to leg repairs, which contributed to the lower utilization and day rates for the 230 foot - 245 foot class liftboats, as well as higher repairs and maintenance expenses as compared to prior quarters.

        Liftboat Average Dayrates and Utilization by Class Size
                   Three Months Ended June 30, 2004
                              ($ actual)

       Class           Liftboats      Average Dayrate    Utilization
------------------- ---------------- ----------------- ---------------
    105'                   6           $    2,786           72.5%
    120-135'               8                3,193           79.5%
    145-155'              11                4,789           75.6%
    160'-175'              6                6,142           75.8%
    200'                   2                9,161           95.6%
    230'-245'              3               12,014           64.1%
    250'                   2               16,501           75.8%

Other Oilfield Services Segment

Revenues in this segment were $22.9 million, a 17% decrease as compared to the second quarter of 2003 due mainly from the sale of construction-related assets that took place in the third quarter of 2003. As compared to the first quarter of 2004, revenues increased 15%. Additional demand for the treatment of non-hazardous oilfield waste and strong sales of computerized torque equipment contributed to the positive change from first quarter levels.

The Company will host a conference call at 10:30 a.m. Central Time on Tuesday, August 3. The call can be accessed from Superior's website at www.superiorenergy.com, or by telephone at 800-763-5557. The replay telephone number is 800-642-1687 and the replay passcode is 8772025. The replay is available beginning two hours after the call and ending August 10, 2004.

Superior Energy Services, Inc. provides a broad range of specialized oilfield services and equipment primarily to major and independent oil and gas companies engaged in the exploration, production and development of oil and natural gas properties offshore in the Gulf of Mexico and throughout the Gulf Coast region. These services and equipment include the rental of liftboats, rental of specialized oilfield equipment, electric and mechanical wireline services, well plug and abandonment services, well control, coiled tubing services and engineering services. Additional services provided include contract operating and supplemental labor, offshore construction and maintenance services, offshore and dockside environmental cleaning services, the manufacture and sale of drilling instrumentation and the manufacture and sale of oil spill containment equipment.

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; changes in competitive factors affecting the Company's operations; risks associated with the acquisition of mature oil and gas properties, including estimated of recoverable reserves, future oil and gas prices and potential environmental and plugging and abandonment liabilities 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, 2004 and 2003
          (in thousands, except earnings per share amounts)
                             (unaudited)


                               Three Months Ended   Six Months Ended
                                    June 30,            June 30,
                               ------------------- -------------------
                                 2004       2003     2004       2003
                               ---------  -------- ---------  --------

Revenues                       $137,545  $128,857  $254,004  $252,052
                                --------  --------  --------  --------

Costs and expenses:
  Cost of services               77,144    74,291   143,849   144,448
  Depreciation, depletion,
   amortization and accretion    15,877    12,072    30,651    23,827
  General and administrative     25,796    23,689    49,988    47,378
                                --------  --------  --------  --------

     Total costs and expenses   118,817   110,052   224,488   215,653
                                --------  --------  --------  --------

Income from operations           18,728    18,805    29,516    36,399

Other income (expense):
  Interest expense               (5,523)   (5,571)  (11,073)  (11,174)
  Interest income                   457         4       898        92
  Equity in income of
   affiliates                       281       305       304       432
                                --------  --------  --------  --------

Income before income taxes       13,943    13,543    19,645    25,749

Income taxes                      5,229     5,215     7,367     9,914
                                --------  --------  --------  --------

Net income                     $  8,714  $  8,328  $ 12,278  $ 15,835
                                ========  ========  ========  ========


Basic earnings per share       $   0.12  $   0.11  $   0.17  $   0.21
                                ========  ========  ========  ========

Diluted earnings per share     $   0.12  $   0.11  $   0.16  $   0.21
                                ========  ========  ========  ========

Weighted average common shares
 used in computing earnings
 per share:
    Basic                        74,471    73,936    74,342    73,882
                                ========  ========  ========  ========
    Diluted                      75,198    75,124    75,065    74,842
                                ========  ========  ========  ========




           SUPERIOR ENERGY SERVICES, INC. AND SUBSIDIARIES
                     CONSOLIDATED BALANCE SHEETS
                 JUNE 30, 2004 AND DECEMBER 31, 2003
                            (in thousands)


                                               6/30/2004   12/31/2003
                                              (Unaudited)  (Audited)
                                              ----------- ------------
ASSETS

Current assets:
  Cash and cash equivalents                   $   15,482  $    19,794
  Accounts receivable - net                      121,103      112,775
  Notes receivable                                14,320       19,212
  Prepaid insurance and other                     19,165       14,059
                                               ----------  -----------

        Total current assets                     170,070      165,840

Property, plant and equipment - net              431,914      427,360
Goodwill - net                                   224,472      204,727
Notes receivable                                  26,066       15,145
Investments in affiliates                         13,528       13,224
Other assets - net                                 6,662        6,567
                                               ----------  -----------

        Total assets                          $  872,712  $   832,863
                                               ==========  ===========

LIABILITIES AND STOCKHOLDERS' EQUITY

Current liabilities:
  Accounts payable                            $   19,489  $    20,817
  Accrued expenses                                62,177       48,949
  Income taxes payable                               541          138
  Current portion of decommissioning
   liabilities                                    16,292       20,097
  Current maturities of long-term debt            11,810       14,210
                                               ----------  -----------

        Total current liabilities                110,309      104,211
                                               ----------  -----------

Deferred income taxes                             92,503       86,251
Decommissioning liabilities                       32,785       18,756
Long-term debt                                   250,811      255,516

Total stockholders' equity                       386,304      368,129
                                               ----------  -----------

        Total liabilities and stockholders'
         equity                               $  872,712  $   832,863
                                               ==========  ===========




            Superior Energy Services, Inc. and Subsidiaries
                          Segment Highlights
     Three months ended June 30, 2004 and 2003, and March 31, 2004
                              (Unaudited)
                            (in thousands)

Revenue                            June 2004   June 2003   March 2004
                                  ----------- ----------- ------------
Well Intervention Group           $   53,153  $   46,416  $    44,258
Marine                                17,692      18,487       13,611
Rental Tools                          43,831      36,396       38,732
Other Oilfield Services               22,869      27,558       19,858
                                   ----------  ----------  -----------
Total                             $  137,545  $  128,857  $   116,459

Gross Profit (1)
Well Intervention Group           $   20,784  $   18,087  $    18,924
Marine                                 5,032       5,820        1,982
Rental Tools                          29,675      25,014       26,119
Other Oilfield Services                4,910       5,645        2,729
                                   ----------  ----------  -----------
Total                             $   60,401  $   54,566  $    49,754

(1) Gross profit is calculated by subtracting cost of services from
    revenue for each of the Company's four segments.


    CONTACT: Superior Energy Services Inc., Harvey
             Terence Hall/Robert Taylor/Greg Rosenstein, 504-362-4321

    SOURCE: Superior Energy Services, Inc.