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Superior Energy Services, Inc. Announces Third Quarter 2004 Results

HARVEY, La.--(BUSINESS WIRE)--Nov. 3, 2004--Superior Energy Services, Inc. (NYSE:SPN) today announced results for the third quarter ended September 30, 2004. For the quarter, revenues were $152.5 million resulting in net income of $11.3 million or $0.15 diluted earnings per share, as compared to revenues of $128.3 million and net income of $8.8 million or $0.12 diluted earnings per share for the third quarter of 2003.

For the nine months ended September 30, 2004, revenues were $406.5 million and net income was $23.6 million or $0.31 diluted earnings per share, as compared to revenues of $380.4 million and net income of $24.7 million or $0.33 diluted earnings per share for the nine months ended September 30, 2003.

CEO Terry Hall Comments

CEO Terry Hall commented, "The third quarter was strong for most services, rental tools and liftboats prior to the impact of Hurricane Ivan in mid-September. July and August were our best months of the year for our well intervention group and liftboats. Liftboat dayrates increased on average almost 16 percent from the second quarter of 2004 and demand was high for most well intervention services. Our rental tools segment continued to benefit from expansion internationally and in land markets.

"To date, the industry has focused most of its storm-related repair efforts on deepwater properties and pipelines. Although we cannot predict the extent of damage to shallow-water infrastructure, or the timing of when shallow-water work will be performed, we are well positioned to assist our customers in their repair and maintenance efforts once their assessments are complete.

"Post-storm repair work on our production facilities in South Pass 60 continues. We expect production to return to pre-storm levels in the fourth quarter once repairs are complete. Infield and transportation pipelines were successfully pressure-tested. We will perform workovers and other well intervention work to further enhance production from areas outside of South Pass 60. This work will begin in the fourth quarter as we approach the industry's traditional off-season, a period of reduced activity for our traditional customer base that typically begins in mid-November and ends during the first quarter. It is possible that the seasonal decline may not be as severe as past years due to potential storm-related work. In addition, current activity remains quite strong for well intervention services and liftboats."

Well Intervention Group Segment

Third quarter revenues for the Well Intervention Group were $59.9 million, a 19 percent increase from the third quarter of 2003 and a 23 percent increase from the second quarter of 2004. Plug and abandonment, electric line and coiled tubing activity increased sequentially and over third quarter levels a year ago due to rising demand for production-related services in the shallow water Gulf of Mexico. In addition, coiled tubing benefited from high pressure well work in Texas and Louisiana. Also, the company's well control crews began working on a well control project in Egypt during the third quarter that is expected to continue through the fourth quarter.

Rental Tools Segment

Revenues for the Rental Tools segment were $42.5 million, 20 percent higher than the third quarter of 2003 and 3 percent lower than the second quarter of 2004. Rental activity was lower sequentially as a result of storm-related downtime in the deepwater Gulf of Mexico, reducing rentals of drill pipe and stabilizers. This was partially offset by increased rentals of stabilizers, on-site accommodations and other tools domestically in Louisiana, Texas and Oklahoma.

Marine Segment

Superior's marine revenues were $18.0 million, a 5 percent increase as compared to the third quarter of 2003 and a 2 percent increase as compared to the second quarter of 2004. Average fleet utilization was 69 percent as compared to 66 percent for the third quarter of 2003 and 76 percent for the second quarter of 2004. Utilization was 74 percent prior to Hurricane Ivan. The average dayrate for the quarter was $6,622, a 6 percent increase over the third quarter of 2003 and a 16 percent increase over the second quarter of 2004.

Sequential improvement was driven largely by improved dayrates and utilization across most fleets, especially for the Company's five largest liftboats.

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

    Class                      Liftboats  Average Dayrate  Utilization
105'                                  6     $      2,932        74.1%
120-135'                              8            3,537        74.9%
145-155'                             11            5,301        49.9%
160'-175'                             6            6,711        78.3%
200'                                  2            9,213        68.5%
230'-245'                             3           13,599        90.2%
250'                                  2           18,069        84.2%

Oil and Gas Segment

As a result of acquisitions and increasing production through the Company's subsidiary SPN Resources, oil and gas production is disclosed as a separate segment beginning with the third quarter 2004 results. Previously, oil and gas production was reported in the well intervention segment. Revenues from this segment were $14.2 million in the third quarter of 2004 and $6.7 million in the second quarter of 2004. Third quarter production from SPN Resources was 335,890 barrels of oil equivalent, net (boe) as compared to 161,599 boe in the second quarter of 2004. The Company did not have any production in the third quarter of 2003.

Other Oilfield Services Segment

Revenues in this segment were $20.4 million, a 20 percent decrease as compared to the third quarter of 2003 and an 11 percent decrease as compared to the second quarter of 2004. Lower revenue is attributable to storm-related activity declines, especially a decline in drilling-related environmental services such as rig cleaning and non-hazardous oilfield waste treatment.

The Company will host a conference call at 11 a.m. Central Time today. 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 1694232. The replay is available beginning two hours after the call and ending November 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; 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 Nine Months Ended September 30, 2004 and 2003
          (in thousands, except earnings per share amounts)
                             (unaudited)

                               Three Months Ended   Nine Months Ended
                                  September 30,       September 30,
                               ------------------- -------------------
                                 2004      2003      2004      2003
                               --------- --------- --------- ---------

Revenues                       $152,500  $128,316  $406,504  $380,368
                               --------- --------- --------- ---------

Costs and expenses:
  Cost of services               82,411    75,449   226,260   219,897
  Depreciation, depletion,
   amortization and accretion    17,795    12,174    48,446    36,001
  General and administrative     29,637    24,195    79,625    71,573
                               --------- --------- --------- ---------

     Total costs and expenses   129,843   111,818   354,331   327,471
                               --------- --------- --------- ---------

Income from operations           22,657    16,498    52,173    52,897

Other income (expense):
  Interest expense               (5,651)   (5,629)  (16,724)  (16,804)
  Interest income                   467        18     1,365       111
  Other income                        -     2,762         -     2,762
  Equity in income of
   affiliates                       588        60       892       492
                               --------- --------- --------- ---------

Income before income taxes       18,061    13,709    37,706    39,458

Income taxes                      6,773     4,883    14,140    14,797
                               --------- --------- --------- ---------

Net income                      $11,288    $8,826   $23,566   $24,661
                               ========= ========= ========= =========

Basic earnings per share          $0.15     $0.12     $0.32     $0.33
                               ========= ========= ========= =========

Diluted earnings per share        $0.15     $0.12     $0.31     $0.33
                               ========= ========= ========= =========

Weighted average common shares
 used in computing earnings
 per share:
    Basic                        74,717    74,035    74,469    73,933
                               ========= ========= ========= =========
    Diluted                      75,686    75,169    75,212    74,952
                               ========= ========= ========= =========


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

                                                9/30/2004  12/31/2003
                                               (Unaudited)  (Audited)
                                               ----------- -----------
ASSETS

Current assets:
  Cash and cash equivalents                      $ 10,964    $ 19,794
  Accounts receivable - net                       135,302     112,775
  Income taxes receivable                             609           -
  Notes receivable                                  8,873      19,212
  Prepaid insurance and other                      18,948      14,059
                                               ----------- -----------

        Total current assets                      174,696     165,840

Property, plant and equipment - net               488,932     427,360
Goodwill - net                                    224,275     204,727
Notes receivable                                   29,504      15,145
Investments in affiliates                          14,116      13,224
Other assets - net                                  6,745       6,567
                                               ----------- -----------

        Total assets                             $938,268    $832,863
                                               =========== ===========

LIABILITIES AND STOCKHOLDERS' EQUITY

Current liabilities:
  Accounts payable                                $29,597     $20,817
  Accrued expenses                                 61,223      48,949
  Income taxes payable                                  -         138
  Fair value of commodity derivative
   instruments                                      4,687           -
  Current portion of decommissioning
   liabilities                                     10,766      20,097
  Current maturities of long-term debt             11,810      14,210
                                               ----------- -----------

        Total current liabilities                 118,083     104,211
                                               ----------- -----------

Deferred income taxes                              95,678      86,251
Decommissioning liabilities                        76,842      18,756
Long-term debt                                    248,061     255,516
Other                                               1,000           -

Total stockholders' equity                        398,604     368,129
                                               ----------- -----------

        Total liabilities and stockholders'
         equity                                  $938,268    $832,863
                                               =========== ===========


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


                                        Three months ended,
                              ---------------------------------------
Revenue                       September 30,   June 30,   September 30,
                                  2004          2004         2003
                              ------------- ----------- -------------

Well Intervention                  $59,861     $48,549       $50,264

Rental tools                        42,530      43,831        35,351

Marine                              18,049      17,692        17,260

Other Oilfield Services             20,354      22,869        25,441

Oil and Gas                         14,190       6,653             -

  Less: Oil and Gas
   Eliminations (2)                 (2,484)     (2,049)            -
                              ------------- ----------- -------------

Total Revenues                    $152,500    $137,545      $128,316
                              ============= =========== =============


                                        Three months ended,
                              ---------------------------------------
Gross Profit (1)              September 30,   June 30,   September 30,
                                  2004          2004         2003
                              ------------- ----------- -------------

Well Intervention                  $25,519     $18,419       $20,453

Rental tools                        27,186      29,675        23,842

Marine                               5,856       5,032         4,817

Other Oilfield Services              3,878       4,910         3,755

Oil and Gas                          7,650       2,365             -
                              ------------- ----------- -------------

Total Gross Profit                 $70,089     $60,401       $52,867
                              ============= =========== =============

CONTACT: Superior Energy Services, Inc.
Terence Hall, Robert Taylor, or Greg Rosenstein
504-362-432

SOURCE: Superior Energy Services, Inc.