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Superior Energy Services, Inc. Announces Record Second Quarter 2005 Results

HARVEY, La.--(BUSINESS WIRE)--Aug. 1, 2005--Superior Energy Services, Inc. (NYSE: SPN) today announced record net income, excluding non-recurring items, of $23.8 million, or $0.30 diluted earnings per share on record revenue of $190.0 million for the quarter ended June 30, 2005. The earnings per share increased 38% from the first quarter of 2005 and 150% from the second quarter of 2004, while revenue increased 10% over the most recent quarter and 38% over last year's second quarter.

The gross profit margin was 52.3% as compared to 43.9% in the second quarter of 2004 and 50.1% in the first quarter of 2005.

Non-recurring items impacting the quarter were an after-tax gain of $2.1 million ($3.2 million pre-tax) from the previously announced sale of 17 liftboats and an after-tax loss of $0.8 million ($1.3 million pre-tax) due to the write down of the Company's equity investment in an affiliate.

Inclusive of these non-recurring items, net income was $25.1 million, or $0.32 diluted earnings per share for the second quarter ended June 30, 2005, as compared to net income of $17.2 million, or $0.22 diluted earnings per share, on revenues of $173.2 million for the first quarter of 2005, and net income of $8.7 million, or $0.12 diluted earnings per share, on revenues of $137.5 million for the second quarter of 2004.

Chairman and CEO Terry Hall Comments

Chairman and CEO Terry Hall commented, "The drivers of these record operating results were our continued expansion of our rental tools business into land and international markets, our ability to increase our oil and gas production, higher commodity prices, and increased demand for rental tools, production-related services, environmental and plug and abandonment services in our core Gulf of Mexico market area.

"Robust drilling activity worldwide should continue to benefit our rental tools business. In our core Gulf of Mexico market, production-related activity levels are significantly better than they were a year ago. While demand for well intervention services and liftboats has been steady during the first half of the year, we have the capacity to fill additional demand.

"We are generating strong levels of cash flow and intend to deploy this cash in areas that we believe create the greatest value, which includes continued geographic expansion and the acquisition of mature oil and gas properties. These strategies provide us the greatest opportunities to grow our business, diversify our markets and increase the utilization of existing assets."

Well Intervention Group Segment

The Well Intervention Group segment posted second quarter revenues of $60.7 million. Year-over-year and sequential production-related activity increased for coiled tubing, data acquisition, hydraulic workover and well control services. Also, decommissioning activity increased for plug and abandonment and structure removal services.

Rental Tools Segment

Second quarter revenues of $61.1 million and income from operations of $18.8 million were both quarterly records for the Rental Tools segment. As compared to the second quarter of 2004 and the first quarter of 2005, rental activity increased across all drilling-related product lines in all domestic and international markets. The biggest increases were in the rentals of drill pipe, specialty tubulars and associated accessories, on-site accommodations, stabilizers and drill collars. Gross profit and operating income margins improved year-over-year and sequentially as a result of the increased activity.

Marine Segment

Superior's Marine segment revenues were $18.3 million. The second quarter of 2005 includes only two months of activity from the 105-ft. class fleet and 120-135-ft. class fleet as these 17 liftboats were sold and removed from the fleet effective June 1, 2005.

Average fleet utilization during the quarter was 73% as compared to 76% in the second quarter of 2004 and 77% in the first quarter of 2005. Average daily revenue in the second quarter was approximately $200,900, inclusive of subsistence revenue.

       Liftboat Average Day rates and Utilization by Class Size
                   Three Months Ended June 30, 2005
                              ($ actual)

Class                  Active Liftboats  Average Day rate  Utilization
--------------         ----------------  ----------------  -----------

(a)105'                       5             $  3,497          71.5%
(a)120-135'                   8                3,901          91.6%
145-155'                     11                5,764          72.2%
160'-175'                     6                7,814          53.8%
200'                          3               10,332          87.6%
230'-245'                     3               13,658          60.1%
250'                          2               18,216          85.2%

(a) Reflects average day rate and utilization for the period within
    the quarter that the liftboats were owned. The 13 active liftboats
    and four additional stacked liftboats in these fleets were sold
    effective June 1, 2005.

Other Oilfield Services Segment

Revenues in this segment were $24.4 million, with year-over-year and sequential improvement driven primarily by increased drilling in the Gulf of Mexico which lead to increased activity for non-hazardous oilfield waste treatment and dockside vessel and tank cleaning. Gross profit and operating income margins were improved over the second quarter of last year and the first quarter of this year due primarily to the increase in higher margin environmental service activity relative to other services provided in this segment.

Oil and Gas Segment

Oil and gas revenues were a record $29.5 million, a significant increase as compared to the second quarter of 2004 and a 14% increase from the first quarter of 2005. More than 65% of the revenue increase sequentially was due to increases in oil and gas production. Second quarter production from SPN Resources was approximately 662,000 barrels of oil equivalent, net (boe) as compared to approximately 161,600 boe in the second quarter of 2004 and 600,500 boe in the first quarter of 2005.

The Company will host a conference call at 11 a.m. Central Time on Tuesday, August 2. 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 7442512. The replay is available beginning two hours after the call and ending August 8, 2005.

Superior Energy Services, Inc. is a leading provider of specialized oilfield services and equipment focused on serving the production-related needs of oil and gas companies primarily in the Gulf of Mexico and the drilling-related needs of oil and gas companies in the Gulf of Mexico and select international market areas. The company uses its production-related assets to enhance, maintain and extend production and, at the end of an offshore property's economic life, plug and decommission wells. Superior also owns and operates mature oil and gas properties in the Gulf of Mexico.

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, 2005 and 2004
           (in thousands, except earnings per share amounts)
                              (unaudited)


                               Three Months Ended   Six Months Ended
                                    June 30,            June 30,
                               ------------------- -------------------
                                 2005      2004      2005      2004
                               --------- --------- --------- ---------

Oilfield service and rental
 revenues                      $160,522  $130,892  $307,814  $242,648
Oil and gas revenues             29,478     6,653    55,433    11,356
                               --------- --------- --------- ---------
Total revenues                  190,000   137,545   363,247   254,004
                               --------- --------- --------- ---------

Cost of oilfield services and
 rentals                         79,561    72,856   153,174   137,119
Cost of oil and gas sales        11,091     4,288    23,896     6,730
                               --------- --------- --------- ---------
   Total cost of services and
    sales                        90,652    77,144   177,070   143,849
                               --------- --------- --------- ---------

Depreciation, depletion,
 amortization and accretion      23,580    15,877    45,977    30,651
General and administrative
 expenses                        33,166    25,796    65,550    49,988
Gain on sale of liftboats         3,269         -     3,269         -
                               --------- --------- --------- ---------

Income from operations           45,871    18,728    77,919    29,516

Other income (expense):
  Interest expense               (5,518)   (5,523)  (11,093)  (11,073)
  Interest income                   407       457       731       898
  Equity in income of
   affiliates                       259       281       778       304
  Reduction in value of
   investment in affiliate       (1,250)        -    (1,250)        -
                               --------- --------- --------- ---------

Income before income taxes       39,769    13,943    67,085    19,645

Income taxes                     14,715     5,229    24,822     7,367
                               --------- --------- --------- ---------

Net income                      $25,054    $8,714   $42,263   $12,278
                               ========= ========= ========= =========


Basic earnings per share          $0.32     $0.12     $0.55     $0.17
                               ========= ========= ========= =========

Diluted earnings per share        $0.32     $0.12     $0.53     $0.16
                               ========= ========= ========= =========

Weighted average common shares
 used in computing earnings
 per share:
    Basic                        77,704    74,471    77,544    74,342
                               ========= ========= ========= =========
    Diluted                      79,131    75,198    79,057    75,065
                               ========= ========= ========= =========



            SUPERIOR ENERGY SERVICES, INC. AND SUBSIDIARIES
                      CONSOLIDATED BALANCE SHEETS
                  JUNE 30, 2005 AND DECEMBER 31, 2004
                            (in thousands)

                                                6/30/2005  12/31/2004
                                               (unaudited)  (audited)
                                               ----------- -----------
ASSETS

Current assets:
  Cash and cash equivalents                       $47,877     $15,281
  Accounts receivable - net                       169,383     156,235
  Income taxes receivable                               -       2,694
  Notes receivable                                  2,867       9,611
  Prepaid insurance and other                      41,167      28,203
                                               ----------- -----------

        Total current assets                      261,294     212,024
                                               ----------- -----------

Property, plant and equipment - net               510,756     515,151
Goodwill - net                                    224,949     226,593
Notes receivable                                   28,639      29,131
Investments in affiliates                          14,024      14,496
Other assets - net                                  7,550       6,518
                                               ----------- -----------

        Total assets                           $1,047,212  $1,003,913
                                               =========== ===========

LIABILITIES AND STOCKHOLDERS' EQUITY

Current liabilities:
  Accounts payable                                $34,975     $36,496
  Accrued expenses                                 55,788      56,796
  Income taxes payable                             10,497           -
  Fair value of commodity derivative
   instruments                                     12,043       2,018
  Current portion of decommissioning
   liabilities                                     11,083      23,588
  Current maturities of long-term debt             11,810      11,810
                                               ----------- -----------

        Total current liabilities                 136,196     130,708
                                               ----------- -----------

Deferred income taxes                              97,354     103,372
Decommissioning liabilities                        93,904      90,430
Long-term debt                                    239,001     244,906
Other long-term liabilities                         4,243         618

Total stockholders' equity                        476,514     433,879
                                               ----------- -----------

        Total liabilities and stockholders'
         equity                                $1,047,212  $1,003,913
                                               =========== ===========


            Superior Energy Services, Inc. and Subsidiaries
                          Segment Highlights
     Three months ended June 30, 2005 and 2004, and March 31, 2005
                              (Unaudited)
                            (in thousands)


                                              Three months ended,
                                         -----------------------------
Revenue                                  June 30,  March 31,  June 30,
                                           2005      2005       2004
                                         --------- --------- ---------

Well Intervention                         $60,652   $58,335   $48,549

Rental tools                               61,122    52,627    43,831

Marine                                     18,285    19,798    17,692

Other Oilfield Services                    24,367    21,781    22,869

Oil and Gas                                29,478    25,955     6,653

  Less: Oil and Gas Eliminations (2)       (3,904)   (5,249)   (2,049)
                                         --------- --------- ---------

Total Revenues                           $190,000  $173,247  $137,545
                                         ========= ========= =========


                                              Three months ended,
                                         -----------------------------
Gross Profit (1)                         June 30,  March 31,  June 30,
                                           2005      2005       2004
                                         --------- --------- ---------

Well Intervention                         $26,789   $26,337   $18,419

Rental tools                               42,245    35,093    29,675

Marine                                      5,819     7,868     5,032

Other Oilfield Services                     6,108     4,381     4,910

Oil and Gas                                18,387    13,150     2,365
                                         --------- --------- ---------

Total Gross Profit                        $99,348   $86,829   $60,401
                                         ========= ========= =========

(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.
             Terence Hall/Robert Taylor/Greg Rosenstein, 504-362-4321

    SOURCE: Superior Energy Services, Inc.