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Superior Energy Services, Inc. Posts Record Second Quarter 2006 Results

Well Intervention, Marine and Rental Tools Post Record Quarterly Revenues and Income
Company to Build Second Derrick Barge to Meet Growing Decommissioning Market

HARVEY, La., July 27 /PRNewswire-FirstCall/ -- Superior Energy Services, Inc. (NYSE: SPN) today announced record second quarter revenues of $261.8 million, adjusted net income of $46.8 million, and adjusted diluted earnings per share of $0.58. Adjusted net income excludes an $8.1 million after-tax loss, or $0.10 diluted earnings per share, resulting from the early extinguishment of the company's $200 million in senior notes.

Including the impact of the early extinguishment of debt, second quarter net income was $38.7 million, or $0.48 diluted earnings per share, as compared to net income of $25.1 million, or $0.32 diluted earnings per share on revenues of $190.0 million for the second quarter of 2005.

    Highlights for the quarter include:
     *  Demand in many of Superior's oilfield services markets continued to
        improve, translating into higher activity levels, pricing and further
        expansion of operating income margins.

     *  Well Intervention revenues increased 9% from the first quarter of
        2006, reflecting strong demand for production-related services and
        plug and abandonment work.

     *  Rental Tool revenues increased 11% from the first quarter of 2006,
        largely on growth in international and domestic onshore markets.

     *  Marine revenues increased 12% from the first quarter of 2006, as
        average dayrates in all liftboat classes improved.

     *  Oil and Gas revenues increased 117% from the first quarter of 2006, as
        SPN Resources benefited from almost a full quarter of restored

Terence Hall, Chairman and CEO of Superior, commented, "We are very pleased with our record results as they reflect our ability to capture improvements in demand across all of our product and service segments as well as expand our operational footprint into new domestic and international market areas. In addition, our oil and gas segment benefited from significant increases in oil and gas production following extended, hurricane-related shut-ins.

"Our outlook remains positive for several reasons. First, our position in the markets we compete remains strong. Second, visibility in our core Gulf of Mexico market area is excellent as a result of ongoing production-related activity and post-hurricane recovery and restoration work. Third, we continue to grow through geographic diversification as indicated by our recently announced awards of more than $100 million in international contracts."

For the six months ended June 30, 2006, Superior generated record net income of $70.9 million, or $0.87 diluted earnings per share on revenues of $484.2 million, as compared to net income of $42.3 million, or $0.53 diluted earnings per share on revenues of $363.2 million for the six months ended June 30, 2005.

Well Intervention Group Segment

Second quarter revenues for the Well Intervention Group were a record $111.7 million, a 9% increase from the first quarter of 2006 and a 31% increase from the second quarter of 2005. Operating income was $25.7 million, or 23% of revenue, up from $19.7 million, or 19% of revenue, in the first quarter of 2006. The biggest activity increases were in cased-hole logging, engineering and project management services, plug and abandonment and well control. These increases reflect growing demand for production-related services, increased well abandonment work in the Gulf of Mexico and the company's continued involvement in providing hurricane-recovery project management and services.

Rental Tools Segment

Revenues for the Rental Tools segment were a record $86.6 million, 11% higher than the first quarter of 2006 and a 42% increase from the second quarter of 2005. Operating income was $29.4 million, or 34% of revenue, up from $26.5 million, or 34% of revenue in the first quarter of 2006. The primary factors leading to the record quarter were increased rentals of stabilizers, drill collars, drill pipe, on-site accommodations and specialty tubulars. This segment also benefited from recent expansion of on-site accommodations in the Rocky Mountains region and from increased rentals of drill pipe and specialty tubulars in several international market areas, especially South America and West Africa.

Marine Segment

Superior's marine revenues were $34.0 million, a 12% increase over the first quarter of 2006 and an 86% increase from the second quarter of 2005. Operating income was $15.3 million, or 45% of revenue, up from $13.1 million, or 44% of revenue in the first quarter of 2006. The segment benefited from increased dayrates across the fleet. Average fleet utilization was 84% as compared to 85% in the first quarter of 2006. Average daily revenue in the second quarter was approximately $373,000, inclusive of subsistence revenue, as compared to $336,000 per day in the first quarter of 2006.

Each quarter certain liftboats undergo regulatory U.S. Coast Guard inspections, resulting in shipyard days that impact utilization. During the second quarter, the 160-175-ft. class and 250-ft. class incurred significant downtime due to shipyard days. Effective utilization, which is utilization excluding shipyard days, was 100% across all liftboat classes in the second quarter, meaning no liftboat was idle for something other than inspections or repairs.

Superior is adding a liftboat to its fleet during the third quarter following the refurbishing of the 200-ft. class Superior Intervention, giving the company five 200-ft. class liftboats.

           Liftboat Average Dayrates and Utilization by Class Size
                       Three Months Ended June 30, 2006
                                  ($ actual)

                Class       Liftboats     Dayrate     Utilization
               145-155'        11         $10,391        89.5%
               160'-175'        6          13,712        70.3%
               200'             4          16,303        85.4%
               230'-245'        3          27,776        91.2%
               250'             2          33,936        74.2%

    Oil and Gas Segment

Oil and gas revenues were $33.6 million, a 117% increase over first quarter 2006 levels and a 14% improvement over the second quarter of 2005. Operating income was $5.5 million, or 16% of revenue, up from an operating loss of $4.9 million in the first quarter of 2006. Second quarter production was approximately 636,000 barrels of oil equivalent (boe). Operating results include $1.3 million in hurricane-related repairs and maintenance expenses. In addition, insurance expense was $4.5 million higher than the first quarter of 2006 and $5.1 million higher than the second quarter of 2005 due to increased premiums as a result of industry-wide hurricane-related claims due to last year's active hurricane season in the Gulf of Mexico.

Coldren Resources LP, which is 40% owned by Superior's oil and gas subsidiary SPN Resources, LLC, closed in mid-July on its previously announced acquisition of Noble Energy, Inc.'s Gulf of Mexico shelf assets. Superior will account for its investment in Coldren Resources LP under the equity method of accounting and operating results will be reflected as earnings from equity-method investments on Superior's consolidated statement of operations.

Superior to Construct Second Derrick Barge

Superior announced today that it signed definitive agreements to construct a second derrick barge for the company's use in the Gulf of Mexico market. The derrick barge will be equipped with an 880-ton Huisman crane and will accommodate 300 people. Moreover, the barge is being built to easily accommodate dynamic positioning, which may be installed at a later date. Construction costs for Superior's second derrick barge are estimated at $34 million. Based on current shipyard capacity, delivery of the derrick barge is estimated to be in the second quarter of 2008.

"Our second derrick barge will be brought to the Gulf of Mexico where we can pursue other core strategic objectives, which include performing structure removal work for SPN Resources and our traditional customers."

As previously announced, Superior's first derrick barge, the DB Performance, will be working in the Southeast Asia market area on a 14-month contract beginning in mid-August.

Conference Call Information

The Company will host a conference call at 10 a.m. Central Time on Friday, July 28. The call can be accessed from Superior's website at http:/ , or by telephone at 800-763-5557. The replay telephone number is 800-642-1687 and the replay passcode is 2809332. The replay is available beginning two hours after the call and ending August 4, 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.

                    Consolidated Statements of Operations
              Three and Six Months Ended June 30, 2006 and 2005
              (in thousands, except earnings per share amounts)

                                       Three Months Ended   Six Months Ended
                                            June 30,            June 30,
                                         2006      2005      2006      2005

    Oilfield service and rental
     revenues                          $228,134  $160,522  $435,132  $307,814
    Oil and gas revenues                 33,625    29,478    49,096    55,433
      Total revenues                    261,759   190,000   484,228   363,247

    Cost of oilfield services and
     rentals                            101,286    79,561   194,541   153,174
    Cost of oil and gas sales            18,702    11,091    32,907    23,896
      Total cost of services
       and sales                        119,988    90,652   227,448   177,070

    Depreciation, depletion,
     amortization and accretion          25,727    23,580    48,642    45,977
    General and administrative
     expenses                            40,088    33,166    77,739    65,550
    Gain on sale of liftboats               ---     3,269       ---     3,269

    Income from operations               75,956    45,871   130,399    77,919

    Other income (expense):
      Interest expense                   (5,556)   (5,518)  (10,400)  (11,093)
      Interest income                     1,559       407     2,222       731
      Earnings from equity-method
       investments                        1,148       259     1,148       778
      Reduction in value of investment
       in affiliate                         ---    (1,250)      ---    (1,250)
      Loss on early extinguishment of
       debt                             (12,596)      ---   (12,596)      ---

    Income before income taxes           60,511    39,769   110,773    67,085

    Income taxes                         21,784    14,715    39,878    24,822

    Net income                          $38,727   $25,054   $70,895   $42,263

    Basic earnings per share              $0.49     $0.32     $0.89     $0.55

    Diluted earnings per share            $0.48     $0.32     $0.87     $0.53

    Weighted average common shares
     used in computing earnings
     per share:
      Basic                              79,798    77,704    79,719    77,544
      Diluted                            81,324    79,131    81,177    79,057

                         CONSOLIDATED BALANCE SHEETS
                     JUNE 30, 2006 AND DECEMBER 31, 2005
                                (in thousands)

                                                06/30/2006        12/31/2005
                                                (unaudited)        (audited)

    Current assets:
      Cash and cash equivalents                   $115,846           $54,457
      Accounts receivable - net                    233,496           196,365
      Income taxes receivable                          ---               ---
      Current portion of notes receivable            4,712             2,364
      Prepaid insurance and other                   58,493            51,116

          Total current assets                     412,547           304,302

    Property, plant and equipment - net            608,548           534,962
    Goodwill - net                                 224,346           220,064
    Notes receivable                                26,085            29,483
    Equity-method investments                       32,541               953
    Other assets - net                              12,416             7,486

          Total assets                          $1,316,483        $1,097,250


    Current liabilities:
      Accounts payable                             $45,846           $42,035
      Accrued expenses                              76,323            69,926
      Income taxes payable                          50,740            11,353
      Fair value of commodity derivative
       instruments                                   5,658            10,792
      Current portion of decommissioning
       liabilities                                  14,081            14,268
      Current maturities of long-term
       debt                                            810               810

          Total current liabilities                193,458           149,184

    Deferred income taxes                           95,321            97,987
    Decommissioning liabilities                    106,482           107,641
    Long-term debt                                 311,694           216,596
    Other long-term liabilities                      3,330             1,468

    Total stockholders' equity                     606,198           524,374

          Total liabilities and
           stockholders' equity                 $1,316,483        $1,097,250

               Superior Energy Services, Inc. and Subsidiaries
                              Segment Highlights
      Three months ended June 30, 2006, March 31, 2006 and June 30, 2005
                                (in thousands)

                                                  Three months ended,
                                            June 30,   March 31,    June 30,
    Revenue                                   2006        2006        2005

    Well Intervention                       $111,675    $102,073     $85,019

    Rental tools                              86,593      77,774      61,122

    Marine                                    33,951      30,207      18,285

    Oil and Gas                               33,625      15,471      29,478

      Less: Oil and Gas Eliminations (B)      (4,085)     (3,056)     (3,904)

    Total Revenues                          $261,759    $222,469    $190,000

                                                  Three months ended,
                                            June 30,   March 31,    June 30,
    Gross Profit (A)                          2006        2006        2005

    Well Intervention                        $48,320     $42,073     $32,897

    Rental tools                              58,370      53,476      42,245

    Marine                                    20,158      18,194       5,819

    Oil and Gas                               14,923       1,266      18,387

    Total Gross Profit                      $141,771    $115,009     $99,348

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

     (B)  Oil and gas eliminations represent products and services from the
          company's segments provided to the Oil and Gas Segment.

     Terence Hall, CEO; Robert Taylor, CFO;
     Greg Rosenstein, VP of Investor Relations, 504-362-4321

SOURCE Superior Energy Services, Inc.
CONTACT: Terence Hall, CEO, Robert Taylor, CFO, or Greg Rosenstein, VP of Investor Relations, all of Superior Energy Services, Inc., +1-504-362-4321/ /Web site: http:/