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Superior Energy Services, Inc. Announces Fourth Quarter 2005 Results, Year-Over-Year Fourth Quarter Earnings Per Share Grow 25 Percent

HARVEY, La.--(BUSINESS WIRE)--Feb. 23, 2006--Superior Energy Services, Inc. (NYSE: SPN) today announced fourth quarter net income, excluding gains and losses net of income taxes, of $18.5 million or $0.23 diluted earnings per share on revenues of $188.0 million.

The fourth quarter results include a non-recurring, non-cash loss of $3.8 million as a result of the Company's sale of its non-hazardous oilfield waste subsidiary for $18.7 million in cash, which closed today, and a $0.3 million gain from the finalization of the second quarter 2005 sale of 17 small liftboats. Including these gains and losses, fourth quarter net income was $16.2 million, or $0.20 diluted earnings per share, as compared to net income of $12.3 million, or $0.16 diluted earnings per share on revenues of $157.8 million for the fourth quarter of 2004, a 25% increase in diluted earnings per share.

For the year ended December 31, 2005, revenues were a record $735.3 million and net income was a record $67.9 million, or $0.85 diluted earnings per share, as compared to revenues of $564.3 million and net income of $35.9 million, or $0.47 diluted earnings per share, for the year ended December 31, 2004.

The fourth quarter was adversely impacted by ongoing hurricane-related repairs to the Company's platforms and to pipelines owned by third parties, resulting in deferred oil and gas production of approximately 523,400 barrels of oil equivalent ('boe"). In addition, the Company incurred approximately $4.6 million in operating expenses for repairs at its offshore oil and gas properties and $1.0 million in general and administrative expenses related to the 2005 hurricane season.

Chairman and CEO Terry Hall Comments

Chairman and CEO Terry Hall commented, "We are extremely pleased with these results, despite the fact that the strong Gulf of Mexico activity levels for services and rental tools we experienced before Hurricane Katrina did not begin to resume until mid-November. Gulf demand for many of our products and services exceeded pre-storm levels by year-end.

"Our Gulf of Mexico-based customers spent a significant part of the fourth quarter assessing and repairing damage from the active hurricane season. Also, our oil and gas production was significantly lower due to ongoing repairs at some of our properties. Only the marine segment had a full quarter of strong activity levels as our liftboats supported damage assessment and hurricane-related construction work.

"In addition to strong performance from our marine segment, growth in our non-Gulf of Mexico markets was a major contributor to our quarterly results. For instance, international revenue was a quarterly record of $31.4 million, driven mainly by rental activity in the North Sea, the Middle East and West Africa, and well intervention activity in Australia, Egypt and Venezuela. For the year, international revenue was a record $99.3 million. International and domestic land markets will continue to represent a larger part of our business mix going forward as we diversify into growing markets with our rental tools and production-related services.

"We believe our outlook remains extremely favorable given the high year-end demand levels in the Gulf of Mexico, the geographic expansion of our rental and service footprint domestically onto land and our increasing international presence. The underlying factors helping to drive our growth remain firmly in place. As a result, we expect to achieve record financial performance in 2006."

Well Intervention Group Segment

Fourth quarter revenues for the Well Intervention Group were a record $66.2 million. Although Gulf of Mexico pre-Hurricane Katrina demand did not resume until mid-quarter, revenue and income from operations improved over the third quarter of 2005. This was due primarily to higher activity levels for production-related services such as coiled tubing, electric line, mechanical wireline, hydraulic workover and well control services, as well as increased demand for plug and abandonment services.

By the end of the quarter, Gulf of Mexico-based, production-related services such as coiled tubing, electric line and mechanical wireline were experiencing demand that exceeded pre-storm levels. In addition, international activity increased significantly as compared to the third quarter for hydraulic workover services in Australia, Egypt and Venezuela, and well control services in Egypt.

Rental Tools Segment

Revenues for the Rental Tools segment were a record $68.1 million. Domestic land and international rentals offset hurricane-related Gulf of Mexico downtime. The Gulf market for several of our rental tools returned to pre-storm levels by mid-quarter. Rentals of specialty tubulars, drill pipe, drill collars, stabilizers and on-site accommodations on land and internationally helped drive this segment's record performance. Revenues from domestic land and international markets were approximately $45 million as compared to $39 million in the third quarter of 2005.

Marine Segment

Marine revenues were a record $30.7 million as the Company's liftboats continued to play an integral role in supporting hurricane-related damage assessment and construction-related work. Average fleet utilization was 90% as compared to 76% in the fourth quarter of 2004 and in the third quarter of 2005. Average daily revenue in the fourth quarter was approximately $333,900, inclusive of subsistence revenue.

        Liftboat Average Dayrates and Utilization by Class Size
                 Three Months Ended December 31, 2005
                              ($ actual)

         Class            Liftboats         Average      Utilization
                                            Dayrate
 --------------------- ---------------- ------------------------------
            145'-155'               11          $8,920           89.0%
            160'-175'                6          12,077           89.9%
                 200'                4          14,466           90.2%
            230'-245'                3          22,831           85.9%
                 250'                2          28,339           99.5%

Other Oilfield Services

Revenues in this segment were $22.4 million, an 8% increase as compared to the fourth quarter of 2004 and essentially unchanged from the third quarter of 2005. Increases in property management services and volumes of non-hazardous oilfield waste lead to the year-over-year improvement.

Oil and Gas Segment

Oil and gas revenues were $1.7 million as compared to $11.5 million in the fourth quarter of 2004 and $21.8 million in the third quarter of 2005. Fourth quarter production from SPN Resources was approximately 104,500 boe as compared to approximately 289,400 boe in the fourth quarter of 2004 and approximately 426,800 boe in the third quarter of 2005. Fourth quarter production was significantly lower as compared to the fourth quarter last year and on a sequential basis as a result of deferred production of approximately 523,400 boe due to downtime related to repairs caused by the active 2005 hurricane season.

Current production is approximately 5,500 boe per day. The Company expects an additional 1,500 boe per day to come on-line by the end of the first quarter following repairs to third-party pipelines.

The Company will host a conference call at 10:30 a.m. Central Time on Friday, February 24. 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 5161688. The replay is available beginning two hours after the call and ending March 3, 2006.

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 Twelve Months Ended December 31, 2005 and 2004
          (in thousands, except earnings per share amounts)
                     (unaudited, except as noted)

                               Three Months Ended      Years Ended
                                  December 31,        December 31,
                               ------------------- -------------------
                                 2005      2004      2005      2004
                                --------  --------  --------  --------
                                                            (audited)

Oilfield service and rental
 revenues                      $186,272  $146,373  $656,423  $527,331
Oil and gas revenues              1,714    11,462    78,911    37,008
                                --------  --------  --------  --------
  Total revenues                187,986   157,835   735,334   564,339
                                --------  --------  --------  --------

Cost of oilfield services and
 rentals                         86,997    75,571   330,200   288,561
Cost of oil and gas sales        10,540     8,277    45,804    21,547
                                --------  --------  --------  --------
  Total cost of services and
   sales                         97,537    83,848   376,004   310,108
                                --------  --------  --------  --------

Depreciation, depletion,
 amortization and accretion      20,428    18,891    89,288    67,337
General and administrative
 expenses                        37,856    30,980   140,989   110,605
Reduction in value of assets      3,750         -     6,994         -
Gain on sale of liftboats           275         -     3,544         -
                                --------  --------  --------  --------

Income from operations           28,690    24,116   125,603    76,289

Other income (expense):
  Interest expense               (5,332)   (5,752)  (21,862)  (22,476)
  Interest income                   731       401     2,201     1,766
  Equity in income of
   affiliates                         3       437     1,339     1,329
  Reduction in value of
   investment in affiliate            -         -    (1,250)        -
                                --------  --------  --------  --------

Income before income taxes       24,092    19,202   106,031    56,908

Income taxes                      7,854     6,916    38,172    21,056
                                --------  --------  --------  --------

Net income                     $ 16,238  $ 12,286  $ 67,859  $ 35,852
                                ========  ========  ========  ========


Basic earnings per share       $   0.20  $   0.16  $   0.87  $   0.48
                                ========  ========  ========  ========

Diluted earnings per share     $   0.20  $   0.16  $   0.85  $   0.47
                                ========  ========  ========  ========

Weighted average common shares
 used in computing earnings
 per share:
    Basic                        79,464    76,163    78,321    74,896
                                ========  ========  ========  ========
    Diluted                      80,621    77,618    79,735    75,900
                                ========  ========  ========  ========


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

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

Current assets:
  Cash and cash equivalents                  $    54,457  $    15,281
  Accounts receivable - net                      196,365      156,235
  Income taxes receivable                              -        2,694
  Notes receivable                                 2,364        9,611
  Prepaid insurance and other                     51,116       28,203
                                              -----------  -----------

        Total current assets                     304,302      212,024
                                              -----------  -----------

Property, plant and equipment - net              534,962      515,151
Goodwill - net                                   220,064      226,593
Notes receivable                                  29,483       29,131
Investments in affiliates                              -       13,552
Other assets - net                                 8,439        7,462
                                              -----------  -----------

        Total assets                         $ 1,097,250  $ 1,003,913
                                              ===========  ===========

LIABILITIES AND STOCKHOLDERS' EQUITY

Current liabilities:
  Accounts payable                           $    42,035  $    36,496
  Accrued expenses                                69,926       56,796
  Income taxes payable                            11,353            -
  Fair value of commodity derivative
   instruments                                    10,792        2,018
  Current portion of decommissioning
   liabilities                                    14,268       23,588
  Current maturities of long-term debt               810       11,810
                                              -----------  -----------

        Total current liabilities                149,184      130,708
                                              -----------  -----------

Deferred income taxes                             97,987      103,372
Decommissioning liabilities                      107,641       90,430
Long-term debt                                   216,596      244,906
Other long-term liabilities                        1,468          618

Total stockholders' equity                       524,374      433,879
                                              -----------  -----------

        Total liabilities and stockholders'
         equity                              $ 1,097,250  $ 1,003,913
                                              ===========  ===========


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

                                            Three months ended,
                                      --------------------------------
Revenue                               December   September  December
                                       31, 2005   30, 2005   31, 2004
                                      ---------- ---------- ----------

Well Intervention                     $  66,228  $  63,361  $  62,779

Rental tools                             68,101     61,686     44,971

Marine                                   30,717     18,467     20,456

Other Oilfield Services                  22,398     22,487     20,789

Oil and Gas                               1,714     21,764     11,462

  Less: Oil and Gas Eliminations (2)     (1,172)    (3,664)    (2,622)
                                       ---------  ---------  ---------

Total Revenues                        $ 187,986  $ 184,101  $ 157,835
                                       =========  =========  =========


                                            Three months ended,
                                      --------------------------------
Gross Profit (1)                      December   September  December
                                       31, 2005   30, 2005   31, 2004
                                      ---------- ---------- ----------

Well Intervention                     $  31,615  $  21,501  $  29,154

Rental tools                             43,942     39,694     29,731

Marine                                   18,963      6,628      7,357

Other Oilfield Services                   4,755      4,485      4,560

Oil and Gas                              (8,826)    10,396      3,185
                                       ---------  ---------  ---------

Total Gross Profit                    $  90,449  $  82,704  $  73,987
                                       =========  =========  =========

(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, 504-362-4321
             or
             Robert Taylor, 504-362-4321
             or
             Greg Rosenstein, 504-362-4321

    SOURCE: Superior Energy Services, Inc.