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Superior Energy Services, Inc. Announces Fourth Quarter 2004 Results

HARVEY, La.--(BUSINESS WIRE)--Feb. 23, 2005--Superior Energy Services, Inc. (NYSE:SPN) today announced results for the fourth quarter ended December 31, 2004. For the quarter, revenues were $157.8 million resulting in net income of $12.3 million or $0.16 diluted earnings per share, as compared to revenues of $120.3 million and net income of $5.9 million or $0.08 diluted earnings per share for the fourth quarter of 2003.

For the year ended December 31, 2004, revenues were a record $564.3 million and net income was $35.9 million or $0.47 diluted earnings per share, as compared to revenues of $500.6 million and net income of $30.5 million or $0.41 diluted earnings per share for the year ended December 31, 2003.

CEO Terry Hall Comments

CEO Terry Hall commented, "The traditional fourth quarter seasonal slowdown in the shallow water Gulf of Mexico for our services was not as severe as in years past. Higher levels of remedial and production-related work resulted in better results for our well intervention group and marine segments. Weaker deepwater rentals of drill pipe due to ongoing project delays from Hurricane Ivan were more than offset by continued diversification of our rental tools segment domestically on land and internationally in the North Sea. Fourth quarter financial performance was impacted by significant production deferral from our oil and gas segment because of extended delays to third-party pipeline and infrastructure repairs due to damage from Hurricane Ivan.

"We believe the outlook for 2005 is favorable for several reasons. First, our geographic markets appear to be more active entering this year as compared to the start of 2004, which should bode well for our core businesses. Production-related activity in the shallow water Gulf of Mexico is improving and deepwater exploration projects are resuming following storm-related downtime. Second, we should continue to gain rental tool market share domestically on land and internationally in West Africa and the Middle East. Third, we continue to build a backlog of service and decommissioning work for our own properties which can be performed if activity levels slow. Finally, we should benefit from increased levels of oil and gas production when compared to 2004 production levels."

Well Intervention Group Segment

Fourth quarter revenues for the Well Intervention Group were $62.8 million, a 28% increase over the fourth quarter of 2003 and a 5% increase over the third quarter of 2004. Activity year-over-year was stronger in most of the segment's service lines, including coiled tubing, pumping and stimulation, plug and abandonment, mechanical wireline and well control services. Sequential improvement was driven mainly by mechanical wireline activity in the Gulf of Mexico and a large well control project in Egypt.

Rental Tools Segment

Revenues for the Rental Tools segment were $45.0 million, a 28% increase over the fourth quarter of 2003 and a 6% increase over the third quarter of 2004. Improved results as compared to the fourth quarter of 2003 were driven mainly by increased rentals of stabilizers and downhole tubulars, on-site accommodations, and drill pipe and ancillary tools.

Marine Segment

Marine revenues were $20.5 million, an increase of 28% as compared to the fourth quarter of 2003 and a 13% increase as compared to the third quarter of 2004. Average fleet utilization was 76% as compared to 66% in the fourth quarter of 2003 and 69% in the third quarter of 2004. Average daily revenue in the fourth quarter was approximately $222,300, inclusive of subsistence revenue.

        Liftboat Average Dayrates and Utilization by Class Size
                 Three Months Ended December 31, 2004
                              ($ actual)

     Class             Liftboats      Average Dayrate    Utilization
     105'                 6           $    3,201            69.8%
     120-135'             8                3,243            73.1%
     145-155'             11               5,748            74.5%
     160'-175'            6                7,310            70.8%
     200'                 2               11,239            94.6%
     230'-245'            3               14,768            89.1%
     250'                 2               17,450            93.5%

Other Oilfield Services Segment

Revenues in this segment were $20.8 million, a 7% increase as compared to the fourth quarter of 2003 and a 2% increase as compared to the third quarter of 2004 primarily due to incremental demand for property management and contract operations.

Oil and Gas Segment

Oil and gas revenues were $11.5 million as compared to $0.7 million in the fourth quarter of 2003 and $14.2 million in the third quarter of 2004. Fourth quarter production from SPN Resources was approximately 289,400 barrels of oil equivalent, net (boe) as compared to approximately 335,890 boe in the third quarter of 2004. Fourth quarter production was lower due to production deferral of approximately 260,500 boe as a result of downtime at South Pass 60 from Hurricane Ivan.

The Company will host a conference call at 10 a.m. Central Time on Thursday. 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 4027344. The replay is available beginning two hours after the call and ending March 3, 2005.

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, hydraulic workover, coiled tubing services and engineering services. Additional services provided include contract operating and supplemental labor, 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 Twelve Months Ended December 31, 2004 and 2003
          (in thousands, except earnings per share amounts)
                     (unaudited, except as noted)



                               Three Months Ended      Year Ended
                                  December 31,        December 31,
                               ------------------- -------------------
                                 2004      2003      2004      2003
                               --------- --------- --------- ---------
                                                             (audited)

Revenues                       $157,835  $120,257  $564,339  $500,625
                               --------- --------- --------- ---------

Costs and expenses:
  Cost of services               83,848    69,710   310,108   289,607
  Depreciation, depletion,
   amortization and accretion    18,891    12,852    67,337    48,853
  General and administrative     30,980    23,249   110,605    94,822
                               --------- --------- --------- ---------

     Total costs and expenses   133,719   105,811   488,050   433,282
                               --------- --------- --------- ---------

Income from operations           24,116    14,446    76,289    67,343

Other income (expense):
  Interest expense               (5,752)   (5,673)  (22,476)  (22,477)
  Interest income                   401        98     1,766       209
  Other income                        -         -         -     2,762
  Equity in income of
   affiliates                       437       493     1,329       985
                               --------- --------- --------- ---------

Income before income taxes       19,202     9,364    56,908    48,822

Income taxes                      6,916     3,511    21,056    18,308
                               --------- --------- --------- ---------

Net income                      $12,286    $5,853   $35,852   $30,514
                               ========= ========= ========= =========


Basic earnings per share          $0.16     $0.08     $0.48     $0.41
                               ========= ========= ========= =========

Diluted earnings per share        $0.16     $0.08     $0.47     $0.41
                               ========= ========= ========= =========

Weighted average common shares
 used in computing earnings
 per share:
    Basic                        76,163    74,079    74,896    73,970
                               ========= ========= ========= =========
    Diluted                      77,618    74,759    75,900    74,648
                               ========= ========= ========= =========




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


                                               12/31/2004  12/31/2003
                                               (unaudited)  (audited)
                                               ----------- -----------
ASSETS

Current assets:
  Cash and cash equivalents                       $15,281     $19,794
  Accounts receivable - net                       156,235     112,775
  Income taxes receivable                           2,694           -
  Notes receivable                                  9,611      19,212
  Prepaid insurance and other                      28,203      14,059
                                               ----------- -----------

        Total current assets                      212,024     165,840
                                               ----------- -----------

Property, plant and equipment - net               515,151     427,360
Goodwill - net                                    226,593     204,727
Notes receivable                                   29,131      15,145
Investments in affiliates                          14,496      13,224
Other assets - net                                  6,518       6,567
                                               ----------- -----------

        Total assets                           $1,003,913    $832,863
                                               =========== ===========

LIABILITIES AND STOCKHOLDERS' EQUITY

Current liabilities:
  Accounts payable                                $36,496     $20,817
  Accrued expenses                                 56,796      48,949
  Income taxes payable                                  -         138
  Fair value of commodity derivative
   instruments                                      2,018           -
  Current portion of decommissioning
   liabilities                                     23,588      20,097
  Current maturities of long-term debt             11,810      14,210
                                               ----------- -----------

        Total current liabilities                 130,708     104,211
                                               ----------- -----------

Deferred income taxes                             103,372      86,251
Decommissioning liabilities                        90,430      18,756
Long-term debt                                    244,906     255,516
Fair value of commodity derivative instruments        618           -

Total stockholders' equity                        433,879     368,129
                                               ----------- -----------

        Total liabilities and stockholders'
         equity                                $1,003,913    $832,863
                                               =========== ===========




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


                                         Three months ended,
                               ---------------------------------------
Revenue                        December 31, September 30, December 31,
                                   2004          2004         2003
                               ------------ ------------- ------------

Well Intervention                  $62,779       $59,861      $49,192

Rental tools                        44,971        42,530       35,015

Marine                              20,456        18,049       15,958

Other Oilfield Services             20,789        20,354       19,351

Oil and Gas                         11,462        14,190          741

  Less: Oil and Gas
   Eliminations (2)                 (2,622)       (2,484)           -
                               ------------ ------------- ------------

Total Revenues                    $157,835      $152,500     $120,257
                               ============ ============= ============


                                         Three months ended,
                               ---------------------------------------
Gross Profit (1)               December 31, September 30, December 31,
                                   2004          2004         2003
                               ------------ ------------- ------------

Well Intervention                  $29,154       $25,519      $20,756

Rental tools                        29,731        27,186       22,901

Marine                               7,357         5,856        3,421

Other Oilfield Services              4,560         3,878        3,059

Oil and Gas                          3,185         7,650          410
                               ------------ ------------- ------------

Total Gross Profit                 $73,987       $70,089      $50,547
                               ============ ============= ============


(1) Gross profit is calculated by subtracting cost of services from
    revenue for each of the Company's five segments.
(2) Oil and gas eliminations represent products and services from the
    company's segments provided to the Oil and Gas Segment.


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

    SOURCE: Superior Energy Services, Inc.