UNITED STATES SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 8-K

CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934

SUPERIOR ENERGY SERVICES, INC.

(Exact name of registrant as specified in its charter)

Delaware (State or other jurisdiction)		0-20310 (Commission File Number)		75-2379388 (IRS Employer Identification No.)

1105 Peters Road, Harvey, Louisiana (Address of principal executive offices)		70058 (Zip Code)

(504) 362-4321
(Registrant’s telephone number, including area code)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligations of the registrant under any of the following provisions:

o		Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
o		Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
o		Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
o		Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

 

 

Item 2.02. Results of Operations and Financial Condition.

     On July 27, 2006, Superior Energy Services, Inc. (the “Company”) issued a press release announcing its earnings for the second quarter ended June 30, 2006. A copy of the press release is attached hereto as Exhibit 99.1 and incorporated herein by reference. In accordance with General Instruction B.2. of Form 8-K, the information presented herein shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, nor shall it be deemed incorporated by reference in any filing under the Securities Act of 1933, as amended, except as expressly set forth by specific reference in such a filing.

Item 7.01. Regulation FD Disclosure.

     On July 27, 2006, the Company issued a press release announcing the expansion of its international presence. A copy of the press release is attached hereto as Exhibit 99.2 and incorporated herein by reference. The description of the press release is qualified in its entirety by reference to such Exhibit.

     In accordance with General Instruction B.2. of Form 8-K, the information presented herein shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, nor shall it be deemed incorporated by reference in any filing under the Securities Act of 1933, as amended, except as expressly set forth by specific reference in such a filing.

Item 9.01. Financial Statements and Exhibits.

     (c) Exhibits.

	99.1		Press release issued by Superior Energy Services, Inc., dated July 27, 2006.
	99.2		Press release issued by Superior Energy Services, Inc., dated July 27, 2006.

SIGNATURES

     Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

		SUPERIOR ENERGY SERVICES, INC.
		By:		/s/ Robert S. Taylor
				Robert S. Taylor
				Chief Financial Officer

Dated: July 27, 2006

Exhibit Index

Exhibits		Description of Exhibit
99.1		Press release issued by Superior Energy Services, Inc., dated July 27, 2006.
99.2		Press release issued by Superior Energy Services, Inc., dated July 27, 2006.

Exhibit 99.1

		1105 Peters Road Harvey, Louisiana 70058 (504) 362-4321 Fax (504) 362-4966 NYSE: SPN

FOR IMMEDIATE RELEASE		FOR FURTHER INFORMATION CONTACT:
		Terence Hall, CEO; Robert Taylor, CFO; Greg Rosenstein, VP of Investor Relations, 504-362-4321

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, 2006 — 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 production.

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)

						Average
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 www.superiorenergy.com, 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.

# # #

SUPERIOR ENERGY SERVICES, INC. AND SUBSIDIARIES
Consolidated Statements of Operations
Three and Six Months Ended June 30, 2006 and 2005
(in thousands, except earnings per share amounts)
(unaudited)

		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

SUPERIOR ENERGY SERVICES, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
JUNE 30, 2006 AND DECEMBER 31, 2005
(in thousands)

		6/30/2006				12/31/2005
		(unaudited)				(audited)
ASSETS
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
LIABILITIES AND STOCKHOLDERS’ EQUITY
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
(Unaudited)
(in thousands)

		Three months ended,
		June 30, 2006				March 31, 2006				June 30, 2005
Revenue
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 (2)			(4,085	)			(3,056	)			(3,904	)
Total Revenues		$	261,759			$	222,469			$	190,000

		Three months ended,
		June 30, 2006				March 31, 2006				June 30, 2005
Gross Profit (1)
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

Exhibit 99.2

		Contacts:		Superior Energy Services, Inc. Terence Hall, CEO Robert Taylor, CFO Greg Rosenstein, VP of Investor Relations 504-362-4321

FOR IMMEDIATE RELEASE

Superior Energy Services, Inc. Significantly Expands International
Presence with Contracts Totaling More Than $100 Million

Derrick barge charter highlights contract awards in Well Intervention and Rental Tools

Harvey, La. — July 27, 2006 — Superior Energy Services, Inc. (NYSE: SPN), (“Superior”) today announced the signing of multiple international contracts totaling more than $100 million, highlighted by a 14-month charter of the Company’s newly built Superior Performance derrick barge (“DB Performance”).

Terry Hall, Chairman and CEO of Superior Energy Services, commented, “We are very pleased with these contracts, as they highlight our achievements on several strategic initiatives. First, these awards demonstrate our ability to expand service and rental offerings to new customers in active, international markets. Second, they exhibit our ability to cross sell services, as some of the contracts involve multiple service disciplines. Finally, these contracts should open up additional opportunities overseas to further export our portfolio of products and services as we continue to expand our customer base. For example, with the DB Performance working in the Southeast Asia market area, we expect to gain greater exposure to well intervention and derrick barge opportunities in the region beyond this contract.”

Superior had international revenues of $99 million in 2005 and is expecting 2006 international revenues to be in the range of $140 million to $150 million.

Overview of International Opportunities

•

Superior has entered into a 14-month charter which will provide SapuraCrest Petroleum Berhad (“SapuraCrest”), a publicly-traded Malaysian company, use of the DB Performance in the Southeast Asia market area for a dayrate of $49,750. Superior’s operating costs associated with this charter are expected to be in the range of $12,000 to $14,000 per day, including depreciation.

•

Superior has entered into contracts to construct and sell a derrick barge to SapuraCrest for a sales price of $54 million. Superior will utilize the same shipyard that constructed the DB Performance. The derrick barge is scheduled to be completed in early 2008 (approximately 19 months).

•

Superior’s subsidiary International Snubbing Services (“ISS”) has entered into a contract with OSV New Zealand Ltd. to supply an offshore wellhead platform-supported workover rig for the Maari Project off the New Zealand coast. In addition to the ISS equipment, both Superior’s coiled tubing division and Superior’s on-site accommodations subsidiary, HB Rentals, will provide services on this project.

•

Superior’s subsidiary Workstrings, LLC, a leading provider of specialty tubulars, has been awarded several international projects totaling approximately $10 million in markets such as offshore Eastern Canada, offshore Trinidad, Colombia and offshore Brazil. The duration of the projects is from four to 15 months.

Superior Energy Services, Inc. is a leading provider of specialized oilfield services and equipment focused on serving the drilling-related and production-related needs of oil and gas companies primarily in the Gulf of Mexico and select international markets. 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.

# # #