UNITED STATES SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

(Mark One)

þ		QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended September 30, 2006

o		TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the Transition Period From                     to                    

SUPERIOR ENERGY SERVICES, INC.

Delaware		75-2379388
(State or other jurisdiction of		(I.R.S. Employer
incorporation or organization)		Identification No.)

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

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes þ No o

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, or a non-accelerated filer. See definition of “accelerated filer and large accelerated filer” in Rule 12b-2 of the Exchange Act. (Check one):

Large accelerated filer þ       Accelerated filer o       Non-accelerated o

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).
Yes o No þ

The number of shares of the registrant’s common stock outstanding on November 1, 2006 was 79,831,733.

 

 

SUPERIOR ENERGY SERVICES, INC. AND SUBSIDIARIES
Quarterly Report on Form 10-Q for
the Quarterly Period Ended September 30, 2006

TABLE OF CONTENTS

		Page
PART I FINANCIAL INFORMATION
Item 1. Financial Statements			3
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations			29
Item 3. Quantitative and Qualitative Disclosures about Market Risk			37
Item 4. Controls and Procedures			37
PART II OTHER INFORMATION
Item 6. Exhibits			38
Officer's Certification Pursuant to Section 302
Officer's Certification Pursuant to Section 302
Officer's Certification Pursuant to Section 906
Officer's Certification Pursuant to Section 906

PART I. FINANCIAL INFORMATION

Item 1. Financial Statements

SUPERIOR ENERGY SERVICES, INC. AND SUBSIDIARIES
Condensed Consolidated Balance Sheets
September 30, 2006 and December 31, 2005
(in thousands, except share data)

		9/30/06				12/31/05
		(Unaudited)				(Audited)
ASSETS
Current assets:
Cash and cash equivalents		$	111,882			$	54,457
Accounts receivable, net			269,110				196,365
Current portion of notes receivable			14,558				2,364
Prepaid insurance and other			60,651				51,116
Total current assets			456,201				304,302
Property, plant and equipment, net			661,633				534,962
Goodwill, net			224,807				220,064
Notes receivable			16,524				29,483
Equity-method investments			62,586				953
Other assets, net			12,900				7,486
Total assets		$	1,434,651			$	1,097,250
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
Accounts payable		$	48,862			$	42,035
Accrued expenses			104,639				69,926
Income taxes payable			74,397				11,353
Fair value of commodity derivative instruments			—				10,792
Current portion of decommissioning liabilities			25,067				14,268
Current maturities of long-term debt			810				810
Total current liabilities			253,775				149,184
Deferred income taxes			101,125				97,987
Decommissioning liabilities			96,826				107,641
Long-term debt			311,801				216,596
Other long-term liabilities			3,617				1,468
Stockholders’ equity:
Preferred stock of $.01 par value. Authorized, 5,000,000 shares; none issued			—				—
Common stock of $.001 par value. Authorized, 125,000,000 shares; issued and outstanding, 79,829,021 shares at September 30, 2006, and 79,499,927 shares at December 31, 2005			80				79
Additional paid in capital			434,213				428,507
Accumulated other comprehensive income (loss), net			6,457				(4,916	)
Retained earnings			226,757				100,704
Total stockholders’ equity			667,507				524,374
Total liabilities and stockholders’ equity		$	1,434,651			$	1,097,250

See accompanying notes to consolidated financial statements.

SUPERIOR ENERGY SERVICES, INC. AND SUBSIDIARIES
Condensed Consolidated Statements of Operations
Three and Nine Months Ended September 30, 2006 and 2005
(in thousands, except per share data)
(unaudited)

		Three Months								Nine Months
		2006				2005				2006				2005
Oilfield service and rental revenues		$	252,309			$	162,337			$	687,441			$	470,151
Oil and gas revenues			38,208				21,764				87,304				77,197
Total revenues			290,517				184,101				774,745				547,348
Cost of oilfield services and rentals			109,525				90,029				304,066				243,203
Cost of oil and gas sales			19,562				11,368				52,469				35,264
Total cost of services, rentals and sales			129,087				101,397				356,535				278,467
Depreciation, depletion, amortization and accretion			28,831				22,883				77,473				68,860
General and administrative expenses			44,385				37,583				122,124				103,133
Reduction in value of assets			—				3,244				—				3,244
Gain on sale of liftboats			—				—				—				3,269
Income from operations			88,214				18,994				218,613				96,913
Other income (expense):
Interest expense, net			(5,989	)			(5,437	)			(16,389	)			(16,530	)
Interest income			1,255				739				3,477				1,470
Loss on early extinguishment of debt			—				—				(12,596	)			—
Earnings from equity-method investments, net			2,704				558				3,852				1,336
Reduction in value of equity-method investment			—				—				—				(1,250	)
Income before income taxes			86,184				14,854				196,957				81,939
Income taxes			31,026				5,496				70,904				30,318
Net income		$	55,158			$	9,358			$	126,053			$	51,621
Basic earnings per share		$	0.69			$	0.12			$	1.58			$	0.66
Diluted earnings per share		$	0.68			$	0.12			$	1.55			$	0.65
Weighted average common shares used in computing earnings per share:
Basic			79,824				78,707				79,754				77,936
Incremental common shares from stock options			1,480				1,441				1,442				1,467
Incremental common shares from restricted stock units			36				20				36				20
Diluted			81,340				80,168				81,232				79,423

See accompanying notes to consolidated financial statements.

SUPERIOR ENERGY SERVICES, INC. AND SUBSIDIARIES
Condensed Consolidated Statements of Cash Flows
Nine Months Ended September 30, 2006 and 2005
(in thousands)
(unaudited)

		2006				2005
Cash flows from operating activities:
Net income		$	126,053			$	51,621
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation, depletion, amortization and accretion			77,473				68,860
Deferred income taxes			(1,085	)			(2,748	)
Reduction in value of assets			—				3,244
Stock-based compensation expense			1,776				—
Earnings from equity-method investments			(3,852	)			(1,336	)
Reduction in value of equity-method investment			—				1,250
Write-off of debt acquisition costs			2,817				—
Amortization of debt acquisition costs and note discount			857				672
Gain on sale of liftboats			—				(3,269	)
Changes in operating assets and liabilities, net of acquisitions and dispositions:
Receivables			(75,399	)			(18,330	)
Other — net			(3,125	)			1,119
Accounts payable			7,325				2,924
Accrued expenses			34,318				15,884
Decommissioning liabilities			(2,255	)			(8,199	)
Income taxes			64,142				23,871
Net cash provided by operating activities			229,045				135,563
Cash flows from investing activities:
Payments for capital expenditures			(165,064	)			(92,960	)
Acquisitions of oil and gas properties, net of cash acquired			(46,631	)			3,686
Acquisitions of businesses, net of cash acquired			(9,822	)			(6,435	)
Cash contributed to equity-method investment			(57,781	)			—
Cash proceeds from sale of subsidary, net of cash sold			18,343				—
Cash proceeds from the sale of liftboats, net			—				19,313
Other			(2,542	)			(1,513	)
Net cash used in investing activities			(263,497	)			(77,909	)
Cash flows from financing activities:
Proceeds from long-term debt			295,467				—
Principal payments on long-term debt			(200,405	)			(8,655	)
Payment of debt acquisition costs			(6,516	)			—
Proceeds from exercise of stock options			2,631				17,882
Net cash provided by financing activities			91,177				9,227
Effect of exchange rate changes on cash			700				(771	)
Net increase in cash			57,425				66,110
Cash and cash equivalents at beginning of period			54,457				15,281
Cash and cash equivalents at end of period		$	111,882			$	81,391

See accompanying notes to consolidated financial statements.

SUPERIOR ENERGY SERVICES, INC. AND SUBSIDIARIES
Notes to Unaudited Condensed Consolidated Financial Statements
Nine Months Ended September 30, 2006 and 2005

(1) Basis of Presentation

Certain information and footnote disclosures normally in financial statements prepared in accordance with generally accepted accounting principles have been condensed or omitted pursuant to the rules and regulations of the Securities and Exchange Commission; however, management believes the disclosures which are made are adequate to make the information presented not misleading. These financial statements and footnotes should be read in conjunction with the consolidated financial statements and notes thereto and the Management’s Discussion and Analysis of Financial Condition and Results of Operations for the year ended December 31, 2005 included in Superior Energy Services, Inc.’s Current Report on Form 8-K filed on May 11, 2006 and in the Annual Report on Form 10-K.

The financial information of Superior Energy Services, Inc. and subsidiaries (the Company) for the nine months ended September 30, 2006 and 2005 has not been audited. However, in the opinion of management, all adjustments (which include normal recurring adjustments) necessary to present fairly the results of operations for the periods presented have been included therein. The results of operations for the first nine months of the year are not necessarily indicative of the results of operations that might be expected for the entire year. Certain previously reported amounts have been reclassified to conform to the 2006 presentation.

(2) Stock-Based and Long-Term Compensation

The Company maintains various stock incentive plans, including the 2005 Stock Incentive Plan (2005 Incentive Plan), the 2002 Stock Incentive Plan (2002 Incentive Plan), the 1999 Stock Incentive Plan (1999 Incentive Plan) and the 1995 Stock Incentive Plan (1995 Incentive Plan), as amended. These plans provide long-term incentives to the Company’s key employees, including officers and directors, consultants and advisers (Eligible Participants). Under the 2005 Incentive Plan, the 2002 Incentive Plan, the 1999 Incentive Plan and the 1995 Incentive Plan, the Company may grant incentive stock options, non-qualified stock options, restricted stock, restricted stock units, stock appreciation rights, other stock-based awards or any combination thereof to Eligible Participants for up to 4,000,000 shares, 1,400,000 shares, 5,929,327 shares and 1,900,000 shares, respectively, of the Company’s common stock. The Compensation Committee of the Company’s Board of Directors establishes the term and the exercise price of any stock options granted under the 2005 Incentive Plan and the 2002 Incentive Plan, provided the exercise price may not be less than the fair value of the common share on the date of grant. All of the options which have been granted under the 1995 Incentive Plan, the 1999 Incentive Plan and the 2002 Incentive Plan were fully-vested by September 30, 2006.

Effective January 1, 2006, the Company adopted Statement of Financial Accounting Standards No. 123(R) (FAS No. 123R), “Share-Based Payment (as amended)” which requires that compensation costs relating to share-based payment transactions be recognized in the financial statements. The cost is measured at the grant date, based on the calculated fair value of the award, and is recognized as an expense over the employee’s requisite service period (generally the vesting period of the equity award). The Company is using the modified prospective application method and, accordingly, financial statement amounts for prior periods presented in this Form 10-Q have not been restated to reflect the fair value method of recognizing compensation costs relating to non-qualified stock options. Prior to January 1, 2006, the Company followed the disclosure-only provisions of Statement of Financial Accounting Standards No. 123 (FAS No. 123), “Accounting for Stock-Based Compensation” using the measurement principles prescribed in Accounting Principles Board’s Opinion No. 25, “Accounting for Stock Issued to Employees.” No stock-based compensation costs were recognized for stock options in net income prior to January 1, 2006, as all options granted had an exercise price equal to the market value of the underlying common stock on the date of the grant. Stock compensation costs from the grant of restricted stock, restricted stock units, and performance share units were expensed as incurred.

Stock Options

The Company has granted non-qualified stock options under its stock incentive plans. The options generally vest in equal installments over three years and expire in ten years. Non-vested options are generally forfeited upon termination of employment. On February 23, 2006, the Company granted 212,600 non-qualified stock options from its 2005 Incentive Plan under these same terms.

Beginning January 1, 2006, the Company began recognizing compensation expense for stock option grants based on the fair value at the date of grant using the Black-Scholes-Merton option pricing model. With the adoption of FAS No. 123R, the Company has contracted a third party to assist in the valuation of option grants. The Company uses historical data, among other factors, to estimate the expected price volatility, the expected option life and the expected forfeiture rate. The risk-free rate is based on the U.S. Treasury yield curve in effect at the time of grant for the expected life of the option. The following table presents the fair value of stock option grants made during the nine months ended September 30, 2006 and 2005 and the related assumptions used to calculate the fair value (no stock option grants were made during the three months ended September 30, 2006 or 2005):

		Nine Months Ended
		September 30,				September 30,
		2006				2005
		Actual				Pro Forma
Weighted-average fair value of grants		$	11.58			$	7.47
Black-Scholes-Merton Assumptions:
Risk free interest rate			4.57	%			3.85	%
Expected life (years)			5.1				5.7
Volatility			45.42	%			38.91	%
Dividend yield			—				—

The Company’s compensation expense related to stock options for the nine months ended September 30, 2006 was approximately $0.6 million, which is reflected in general and administrative expenses. No compensation expense related to options was recorded during the nine months ended September 30, 2005.

The pro forma data presented below show the effects of stock option costs had they been expensed in prior periods (amounts are in thousands, except per share amounts):

		Three Months				Nine Months
		Ended				Ended
		September 30,				September 30,
		2005				2005
Net income, as reported		$	9,358			$	51,621
Stock-based employee compensation expense, net of tax			(2,057	)			(2,363	)
Pro forma net income		$	7,301			$	49,258
Basic earnings per share:
Earnings, as reported		$	0.12			$	0.66
Stock-based employee compensation expense, net of tax			(0.03	)			(0.03	)
Pro forma earnings per share		$	0.09			$	0.63
Diluted earnings per share:
Earnings, as reported		$	0.12			$	0.65
Stock-based employee compensation expense, net of tax			(0.03	)			(0.03	)
Pro forma earnings per share		$	0.09			$	0.62

The following table summarizes stock option activity for the nine months ended September 30, 2006:

										Weighted
										Average				Aggregate
						Weighted				Remaining				Intrinsic
		Number of				Average				Contractual				Value (in
		Options				Option Price				Term (in years)				thousands)
Outstanding at December 31, 2005			3,893,633			$	11.44
Granted			212,600			$	24.99
Exercised			(227,651	)		$	11.56
Forfeited			(18,917	)		$	16.85
Outstanding at September 30, 2006			3,859,665			$	12.15				7.1			$	54,465
Exercisable at September 30, 2006			3,647,065			$	11.40				7.0			$	54,195
Options expected to vest			212,600			$	11.58				9.4			$	270

The aggregate intrinsic value in the table above represents the total pre-tax intrinsic value (the difference between the Company’s closing stock price on September 30, 2006 and the option price, multiplied by the number of in-the-money options) that would have been received by the option holders if all the options had been exercised on September 30, 2006. The Company expects all of its remaining non-vested options to vest as they are primarily held by its officers and senior managers.

The total intrinsic value of options exercised during the nine months ended September 30, 2006 (the difference between the stock price upon exercise and the option price) was approximately $3.6 million. The Company received approximately $2.6 million during the nine months ended September 30, 2006 from employee stock option exercises. The Company expects to reduce its future tax payments by approximately $1.3 million as the result of the intrinsic value of options exercised during the nine months ended September 30, 2006. In accordance with Statement 123R, the Company will report the excess tax benefits from the exercise of stock options as financing cash flows when income tax payments are made during the fourth quarter of 2006.

The following table summarizes non-vested stock option activity for the nine months ended September 30, 2006:

						Weighted
						Average
		Number of				Grant-Date
		Options				Fair Value
Non-vested at December 31, 2005			133,912			$	3.63
Granted			212,600			$	11.58
Vested			(133,245	)		$	3.64
Forfeited			(667	)		$	3.62
Non-vested at September 30, 2006			212,600			$	11.58

As of September 30, 2006, there was approximately $2.0 million of unrecognized compensation expense related to non-vested stock options outstanding. The Company expects to recognize approximately $0.2 million, $0.8 million, $0.8 million and $0.2 million of compensation expense during the remainder of 2006, the years 2007, 2008 and 2009, respectively, for these non-vested stock options outstanding.

Restricted Stock

During the nine months ended September 30, 2006, the Company granted 104,643 shares of restricted stock to its employees. These shares of restricted stock vest in equal annual installments over three years. Non-vested shares are generally forfeited upon the termination of employment. Holders of the shares of restricted stock are entitled to all rights of a shareholder of the Company with respect to the restricted stock, including the right to vote the shares and receive all dividends and other distributions declared thereon. Compensation expense associated with shares of restricted stock is measured based on the grant-date fair value of our common stock and is recognized on a straight-line basis over the vesting period. The Company’s compensation expense related to shares of restricted stock outstanding for the nine months ended September 30, 2006 was approximately $0.6 million, which is reflected in general and administrative expenses.

A summary of the status of the shares of restricted stock for the nine months ended September 30, 2006 is presented in the table below:

						Weighted
		Number of				Average Grant
		Shares				Date Fair Value
Non-vested at December 31, 2005			24,000			$	22.24
Granted			104,643			$	25.02
Vested			(9,000	)		$	22.55
Forfeited			(3,200	)		$	24.99
Non-vested at September 30, 2006			116,443			$	24.64

As of September 30, 2006, there was approximately $2.2 million of unrecognized compensation expense related to non-vested restricted stock shares. The Company expects to recognize approximately $0.3 million, $1.0 million, $0.8 million and $0.1 million during the remainder of 2006, the years 2007, 2008 and 2009, respectively, for these shares of non-vested restricted stock.

Restricted Stock Units

In May 2006, the Company’s stockholders approved the Amended and Restated 2004 Directors Restricted Stock Units Plan. The amended plan provides that each non-employee director is granted a number of restricted stock units having an aggregate value of $100,000, with the exact number of units determined by dividing $100,000 by the fair market value of the Company’s common stock on the day of the annual stockholders’ meeting. In addition, upon the initial election or appointment of any non-employee director, other than at an annual stockholders’ meeting, such person will receive a number of restricted stock units based on the number of full calendar months between the date of grant and the first anniversary of the previous annual stockholders’ meeting. A restricted stock unit represents the right to receive from the Company, within 30 days of the date the participant ceases to serve on the Board, one share of the Company’s common stock. As a result of this plan, 36,137 restricted stock units are outstanding at September 30, 2006. The Company’s expense related to restricted stock units for the nine months ended September 30, 2006 and 2005 was approximately $0.7 million and $0.1 million, respectively, which is reflected in general and administrative expenses.

A summary of the activity of restricted stock units for the nine months ended September 30, 2006 is presented in the table below:

		Number of				Weighted
		Restricted				Average Grant
		Stock Units				Date Fair Value
Outstanding at December 31, 2005			19,998			$	12.38
Granted			16,139			$	30.98
Outstanding at September 30, 2006			36,137			$	20.69

Performance Share Units

The Company awards performance share units (PSUs) to its employees as part of the Company’s long-term incentive program. There is a 3-year performance period associated with each PSU grant date. The two performance measures applicable to all participants are the Company’s return on invested capital and total shareholder return relative to those of the Company’s pre-defined “peer group.” The PSUs provide for settlement in cash or up to 50% in equivalent value in Company common stock, if the participant has met specified continued service requirements. At September 30, 2006 there were 64,462 PSUs outstanding (31,250 and 33,212 related to the 3-year performance periods ending December 31, 2007 and 2008, respectively). The Company’s compensation expense related to all outstanding PSUs for the nine months ended September 30, 2006 and 2005 was approximately $1.7 million and $0.5 million, respectively, which is reflected in general and administrative expenses. At September 30, 2006, the Company has recorded a liability of approximately $2.8 million for all outstanding PSUs which is reflected in accrued expenses.

(3) Earnings per Share

Basic earnings per share is computed by dividing income available to common stockholders by the weighted average number of common shares outstanding during the period. Diluted earnings per share is computed in the same manner as basic earnings per share except that the denominator is increased to include the number of additional common shares that could have been outstanding assuming the exercise of stock options that would have a dilutive effect on earnings per share and the conversion of restricted stock units into common stock using the treasury stock method.

(4) Acquisitions and Dispositions

In July 2006, Coldren Resources LP (Coldren Resources) completed the acquisition from Noble Energy, Inc. (Noble) of substantially all of Noble’s offshore Gulf of Mexico shallow water oil and gas properties. SPN Resources, LLC, a wholly-owned subsidiary of the Company (SPN Resources), acquired a 40% interest in Coldren

Resources for an initial cash investment of $57.7 million. The Company’s investment in Coldren Resources is accounted for under the equity-method of accounting. Amounts included in the pro forma information below do not include general and administrative expenses associated with the oil and gas properties acquired from Noble.

In the second quarter of 2006, the Company acquired two businesses for an aggregate purchase price of approximately $9.8 million in cash consideration in order to expand the housing units offered by its rental tools segment into Wyoming and expand the snubbing services offered by its well intervention segment in Australia. These acquisitions have been accounted for as purchases, and the acquired assets and liabilities have been valued at their estimated fair value. The results of operations have been included from the acquisition date.

In April 2006, SPN Resources acquired additional oil and gas properties through the acquisition of five offshore Gulf of Mexico leases. Under the terms of the transaction, the Company acquired the properties and assumed the related decommissioning liabilities. The Company paid cash in the amount of $46.6 million and preliminarily recorded decommissioning liabilities of approximately $3.7 million and oil and gas producing assets of approximately $50.3 million.

In February 2006, the Company sold its subsidiary, Environmental Treatment Team, L.L.C. (ETT), for approximately $18.7 million in cash. The Company reduced the net asset value of ETT by $3.8 million in 2005 to its approximate sales price. For the nine months ended September 30, 2006 and 2005, revenue from ETT was approximately $4.6 million and $21.1 million, respectively, and operating loss was approximately $3,000 and $687,000, respectively.

In 2005, the Company acquired a business for a purchase price of approximately $1.3 million in cash consideration in order to geographically expand the snubbing services offered by its well intervention segment. The results of operations have been included from the acquisition date.

Also in 2005, SPN Resources acquired additional oil and gas properties through the acquisition of three offshore Gulf of Mexico leases. Under the terms of the transaction, the Company acquired the properties and assumed the related decommissioning liabilities. The Company received $3.7 million in cash and will invoice the sellers at agreed upon prices as the decommissioning activities (abandonment and structure removal) are completed. The Company recorded notes receivable of approximately $2.4 million, decommissioning liabilities of $11.5 million and oil and gas producing assets were recorded at their estimated fair value of $5.4 million.

The following unaudited pro forma information for the three and nine months ended September 30, 2006 and 2005 presents a summary of the consolidated results of operations as if the business acquisitions and dispositions described above had occurred on January 1, 2005, with pro forma adjustments to give effect to depreciation, depletion and certain other adjustments, together with related income tax effects (in thousands, except per share amounts):

		Three Months Ended								Nine Months Ended
		September 30,								September 30,
		2006				2005				2006				2005
Revenues		$	290,517			$	183,604			$	775,571			$	542,985
Net income		$	56,827			$	20,501			$	144,804			$	78,337
Basic earnings per share		$	0.71			$	0.26			$	1.82			$	1.01
Diluted earnings per share		$	0.70			$	0.26			$	1.78			$	0.99

The above pro forma information is not necessarily indicative of the results of operations that would have been achieved had the acquisitions and dispositions been effected on January 1, 2005.

Several of the Company’s prior business acquisitions have required future payments based upon a multiple of the acquired business’ future earnings before interest, income taxes, depreciation and amortization. As of September 30, 2006, the maximum additional contingent consideration payable was approximately $2.4 million, and will be

determined and payable through 2008. These amounts are not classified as liabilities under generally accepted accounting principles and are not reflected in the Company’s financial statements until the amounts are fixed and determinable. The Company does not have any other financing arrangements that are not required under generally accepted accounting principles to be reflected in its financial statements. When the amounts are determined, they are capitalized as part of the purchase price of the related acquisition.

(5) Merger Agreement

In September 2006, the Company entered into a definitive merger agreement to acquire Warrior Energy Services Corporation (Warrior) for a total estimated purchase price of approximately $319.0 million. The total consideration is composed of cash payments of approximately $175.2 million ($14.50 per share of outstanding Warrior common stock), $133.8 million in equity (approximately 5.3 million shares of Superior common stock, at an exchange ratio of 0.452 of Superior common stock for each share of Warrior common stock, multiplied by the Superior’s share price of $25.39, the average closing market price per share for the five trading day period beginning two trading days before the merger announcement date of September 25, 2006), and approximately $10 million of estimated direct transaction costs. Warrior is a natural gas and oil well services company that provides wireline and well intervention services to exploration and production companies. Warrior’s operations are concentrated in the major onshore and offshore natural gas and oil producing areas of the U.S. The transaction is subject to customary closing conditions, and is expected to close in the middle of December 2006.

In connection with the Warrior acquisition, the Company has obtained a commitment for a seven year $200 million secured term loan to fund the cash portion of the merger consideration and refinance a portion of Warrior’s existing debt. The term loan is expected to bear interest, at the Company’s election, at the prime rate plus 50 basis points or LIBOR plus up to 225 basis points and will be payable in quarterly installments of 0.25% of the initial term amount for the first six years with the balance due in the seventh year.

(6) Segment Information

Business Segments

Effective as of January 1, 2006, the Company modified its segment disclosure by combining its other oilfield services segment into the well intervention segment. In February 2006, the Company sold its environmental subsidiary, which comprised a large part of the other oilfield services segment. The remaining businesses, which include platform and field management services, environmental cleaning services and the sale of drilling instrumentation equipment, are impacted by similar factors that affect the well intervention segment. The combination of the well intervention and other oilfield services segments better reflects the way management evaluates the Company’s results. The prior year segment presentation has been restated to conform to the current segment classification.

The Company has four reportable segments: well intervention, rental tools, marine, and oil and gas. The well intervention segment provides: (1) production related services used to enhance, extend and maintain oil and gas production, (2) well plug and abandonment services, and (3) other oilfield services used to support drilling and production operations. Production related services include mechanical wireline, hydraulic workover and snubbing, well control, coiled tubing, case-hole logging, pumping and stimulation and wellbore evaluation services. The rental tools segment rents and sells stabilizers, drill pipe, tubulars and specialized equipment for use with onshore and offshore oil and gas well drilling, completion, production and workover activities. It also provides onsite accommodations and bolting and machining services. The marine segment operates liftboats for production service activities, as well as oil and gas production facility maintenance, construction operations and platform removals. The oil and gas segment acquires mature oil and gas properties and produces and sells any remaining economic oil and gas reserves. Oil and gas eliminations represent products and services provided to the oil and gas segment by the Company’s three other segments.

Summarized financial information concerning the Company’s segments for the three and nine months ended September 30, 2006 and 2005 is shown in the following tables (in thousands):

Three Months Ended September 30, 2006

																		Oil & Gas
		Well				Rental												Eliminations				Consolidated
		Intervention				Tools				Marine				Oil & Gas				& Unallocated				Total
Revenues		$	122,205			$	98,262			$	36,013			$	38,208			$	(4,171	)		$	290,517
Cost of services, rentals and sales			68,438				30,786				14,472				19,562				(4,171	)			129,087
Depreciation, depletion, amortization and accretion			4,511				13,600				2,142				8,578				—				28,831
General and administrative expense			20,428				18,776				3,231				1,950				—				44,385
Income from operations			28,828				35,100				16,168				8,118				—				88,214
Interest expense, net			—				—				—				—				(5,989	)			(5,989	)
Interest income			—				—				—				286				969				1,255
Loss on early extinguishment of debt			—				—				—				—				—				—
Earnings in equity method investments			—				—				—				2,704				—				2,704
Income before income taxes		$	28,828			$	35,100			$	16,168			$	11,108			$	(5,020	)		$	86,184

Three Months Ended September 30, 2005

																		Oil & Gas
		Well				Rental												Eliminations				Consolidated
		Intervention				Tools				Marine				Oil & Gas				& Unallocated				Total
Revenues		$	85,848			$	61,686			$	18,467			$	21,764			$	(3,664	)		$	184,101
Cost of services, rentals and sales			59,862				21,992				11,839				11,368				(3,664	)			101,397
Depreciation, depletion, amortization and accretion			4,589				10,970				1,987				5,337				—				22,883
General and administrative expense			19,801				13,913				2,497				1,372				—				37,583
Income from operations			1,596				14,811				2,144				3,687				—				22,238
Interest expense, net			—				—				—				—				(5,437	)			(5,437	)
Interest income			—				—				—				294				445				739
Earnings in equity method investments, net			—				558				—				—				—				558
Reduction in value of investment			(1,100	)			—				—				(2,144	)			—				(3,244	)
Income before income taxes		$	496			$	15,369			$	2,144			$	1,837			$	(4,992	)		$	14,854

Nine Months Ended September 30, 2006

																		Oil & Gas
		Well				Rental												Eliminations				Consolidated
		Intervention				Tools				Marine				Oil & Gas				& Unallocated				Total
Revenues		$	335,953			$	262,629			$	100,171			$	87,304			$	(11,312	)		$	774,745
Cost of services, rentals and sales			191,793				83,307				40,278				52,469				(11,312	)			356,535
Depreciation, depletion, amortization and accretion			13,375				37,795				6,427				19,876				—				77,473
General and administrative expense			56,566				50,525				8,816				6,217				—				122,124
Income from operations			74,219				91,002				44,650				8,742				—				218,613
Interest expense, net			—				—				—				—				(16,389	)			(16,389	)
Interest income			—				—				—				888				2,589				3,477
Loss on early extinguishment of debt			—				—				—				—				(12,596	)			(12,596	)
Earnings in equity method investments			—				—				—				3,852				—				3,852
Income before income taxes		$	74,219			$	91,002			$	44,650			$	13,482			$	(26,396	)		$	196,957

Nine Months Ended September 30, 2005

																		Oil & Gas
		Well				Rental												Eliminations				Consolidated
		Intervention				Tools				Marine				Oil & Gas				& Unallocated				Total
Revenues		$	250,983			$	175,435			$	56,550			$	77,197			$	(12,817	)		$	547,348
Cost of services, rentals and sales			161,382				58,403				36,235				35,264				(12,817	)			278,467
Depreciation, depletion, amortization and accretion			13,693				31,340				6,107				17,720				—				68,860
General and administrative expense			52,452				39,534				6,712				4,435				—				103,133
Gain on sale of liftboats			—				—				3,269				—				—				3,269
Income from operations			23,456				46,158				10,765				19,778				—				100,157
Interest expense, net			—				—				—				—				(16,530	)			(16,530	)
Interest income			—				—				—				849				621				1,470
Earnings in equity method investments, net			—				1,336				—				—				—				1,336
Reduction in value of investment			(1,100	)			(1,250	)			—				(2,144	)			—				(4,494	)
Income before income taxes		$	22,356			$	46,244			$	10,765			$	18,483			$	(15,909	)		$	81,939

Identifiable Assets

		Well				Rental																Consolidated
		Intervention				Tools				Marine				Oil & Gas				Unallocated				Total
September 30, 2006		$	407,699			$	504,403			$	193,765			$	315,912			$	12,872			$	1,434,651
December 31, 2005		$	332,996			$	405,527			$	203,718			$	147,667			$	7,342			$	1,097,250

Geographic Segments

The Company attributes revenue to countries based on the location where services are performed or the destination of the sale of products. Long-lived assets consist primarily of property, plant and equipment and are attributed to the United States or other countries based on the physical location of the asset at the end of a period. The Company’s information by geographic area is as follows (amounts in thousands):

		Three Months Ended September 30,								Nine Months Ended September 30,
Revenues:		2006				2005				2006				2005
United States		$	248,822			$	159,858			$	663,354			$	479,485
Other Countries			41,695				24,243				111,391				67,863
Total		$	290,517			$	184,101			$	774,745			$	547,348

		September 30,				December 31,
Long-Lived Assets:		2006				2005
United States		$	572,754			$	492,602
Other Countries			88,879				42,360
Total		$	661,633			$	534,962

(7) Construction Contract

In July 2006, the Company contracted to construct a derrick barge that will be sold to a third party for approximately $54 million. The contract to construct the derrick barge to the customer’s specifications is recorded on the percentage-of-completion method using a milestone-based measure focused on engineering estimates and manufacturing progress. This method is used because the Company believes it is the most meaningful measure of the extent of progress toward completion. This methodology requires the Company to make estimates regarding the progress against the project schedule and estimated completion date, both of which impact the amount of revenue and gross margin the Company recognizes in each reporting period. Contract costs primarily include sub-contract and program management costs. Provisions for anticipated losses will be recorded in full when such losses become evident. For the three months ended September 30, 2006, the Company recognized approximately $430,000 of revenues and approximately $154,000 of gross profit on this contract. Included in accrued expenses at September 30, 2006 is approximately $5.2 million of billings in excess of costs.

(8) Equity-Method Investments

Investments in entities that are not controlled by the Company, but where the Company has the ability to exercise influence over the operations are accounted for using the equity-method. The Company’s share of the income or losses of these entities is reflected as earnings in equity-method investments on its Consolidated Statements of Operations.

In May 2006, SPN Resources acquired a 40% interest in Coldren Resources. In July 2006, Coldren Resources completed its acquisition of the oil and gas properties from Noble. The Company made total cash contributions for its equity-method investment of approximately $57.7 million through September 30, 2006. The Company’s equity-method investment balance in Coldren Resources is approximately $61.6 million at September 30, 2006, and its earnings from the equity-method investments in Coldren Resources is approximately $2.7 million and $3.8 million for the three and nine months ended September 30, 2006, respectively. The Company also has a receivable from Coldren Resources of approximately $1.0 million at September 30, 2006.

Summarized balance sheet and statement of operations information for Coldren Resources is presented below. (Amounts in thousands.)

		September 30,
Balance Sheet		2006
Current assets		$	129,453
Property, plant and equipment, net			535,057
Other assets			12,667
Total assets		$	677,177
Current liabilities		$	13,790
Decommissioning and other long-term liabilities			93,051
Long-term debt			422,517
Partners’ equity			147,819
Total liabilities and partners’ equity		$	677,177

		Nine Months
		Ended
		September 30,
Income Statement		2006
Revenues		$	61,458
Lease operating expenses			(17,615	)
Depreciation, depletion, amortization and accretion			(35,874	)
General and administrative expenses			(2,837	)
Interest expense			(9,915	)
Interest income			688
Gain on derivatives			13,679
Net income		$	9,584

Also included in equity-method investments is a 50% ownership in a company that owns an airplane of approximately $1.0 million at September 30, 2006. Earnings from the equity-method investment in this company were not material for the three and nine months ended September 30, 2006 or 2005.

(9) Debt

The Company has a bank credit facility consisting of a $150 million revolving credit facility, with an option to increase it to $250 million. Any amounts outstanding under the revolving credit facility are due on October 31, 2008. At September 30, 2006, the Company had no amounts outstanding under the bank credit facility, but it had approximately $21.2 million of letters of credit outstanding, which reduces the borrowing availability under this credit facility. The credit facility bears interest at a LIBOR rate plus margins that depend on the Company’s leverage ratio. Indebtedness under the credit facility is secured by substantially all of the Company’s assets, including the pledge of the stock of the Company’s principal subsidiaries. The credit facility contains customary events of default and requires that the Company satisfy various financial covenants. It also limits the Company’s capital expenditures, its ability to pay dividends or make other distributions, make acquisitions, create liens, incur additional indebtedness or assume additional decommissioning liabilities. The Company obtained consent from the required lenders to increase the limitation on the amount of capital expenditures for the fiscal year ending December 31, 2006. As a result, the Company was in compliance with all such covenants.

The Company has $17 million outstanding at September 30, 2006, in U. S. Government guaranteed long-term financing under Title XI of the Merchant Marine Act of 1936, which is administered by the Maritime Administration (MARAD), for two 245-foot class liftboats. The debt bears interest at 6.45% per annum and is

payable in equal semi-annual installments of $405,000, on every June 3rd and December 3rd through June 3, 2027. The Company’s obligations are secured by mortgages on the two liftboats. In accordance with this agreement, the Company is required to comply with certain covenants and restrictions, including the maintenance of minimum net worth and debt-to-equity requirements. The Company was in compliance with all such covenants. This long-term financing ranks equally with the bank credit facility.

In the second quarter of 2006, the Company completed a tender offer for approximately 97.6% of its $200 million outstanding of 8 7/8% unsecured senior notes due 2011. The cash consideration for the tender offer was $1,045.63 per $1,000 in aggregate principal amount of senior notes tendered. In conjunction with the tender offer, the Company also received consents to amend the indenture pursuant to which the senior notes were issued to eliminate from the indenture substantially all of the restrictive covenants and certain events of default. After the tender offer was completed, the Company redeemed the remaining outstanding senior notes in accordance with the indenture at the redemption price of $1,044.38 per $1,000 of the principal amount redeemed. The Company recognized a loss on the early extinguishment of debt of approximately $12.6 million, which included the tender premiums, redemption premiums, fees and expenses and the write-off of the remaining unamortized debt acquisition costs associated with these notes.

In May 2006, the Company issued $300 million of 6 7/8% unsecured senior notes due 2014. The Company used the net proceeds to refinance the 8 7/8% senior notes due 2011 and related tender and redemption premiums, fees and related expenses, and to fund the equity investment in Coldren Resources. The indenture governing the notes requires semi-annual interest payments, on every June 1^st and December 1^st through the maturity date of June 1, 2014. The indenture contains certain covenants that, among other things, restrict the Company from incurring additional debt, repurchasing capital stock, paying dividends or making other distributions, incurring liens, selling assets or entering into certain mergers or acquisitions. The Company was in compliance with all such covenants.

(10) Hedging Activities

The Company entered into hedging transactions in 2004 that expired on August 31, 2006 with major financial institutions to secure a range of commodity prices for a portion of its future oil production and to reduce its exposure to oil price fluctuations. The Company does not enter into derivative transactions for trading purposes. Crude oil hedges are settled based on the average of the reported settlement prices for West Texas Intermediate crude on the New York Mercantile Exchange (NYMEX) for each month. The Company had used financially-settled crude oil swaps and zero-cost collars that provided floor and ceiling prices with varying upside price participation. The Company’s swaps and zero-cost collars were designated and accounted for as cash flow hedges. The Company had not hedged any of its natural gas production.

With a financially-settled swap, the counterparty was required to make a payment to the Company if the settlement price for any settlement period was below the hedged price for the transaction, and the Company was required to make a payment to the counterparty if the settlement price for any settlement period was above the hedged price for the transaction. With a zero-cost collar, the counterparty was required to make a payment to the Company if the settlement price for any settlement period was below the floor price of the collar, and the Company was required to make a payment to the counterparty if the settlement price for any settlement period was above the cap price for the collar. The Company recognized the fair value of all derivative instruments as assets or liabilities on the balance sheet. Changes in the fair value of cash flow hedges were recognized, to the extent the hedge was effective, in other comprehensive income until the hedged item was settled and recorded in revenue. For the nine months ended September 30, 2006, hedging settlement payments reduced oil revenues by approximately $13.8 million, and no gains or losses were recognized due to hedge ineffectiveness.

(11) Decommissioning Liabilities

The Company records estimated future decommissioning liabilities related to its oil and gas producing properties pursuant to the provisions of Statement of Financial Accounting Standards No. 143 (FAS No. 143), “Accounting for Asset Retirement Obligations.” FAS No. 143 requires entities to record the fair value of a liability for an asset retirement obligation (decommissioning liabilities) in the period in which it is incurred with a corresponding increase in the carrying amount of the related long-lived asset. Subsequent to initial measurement, the

decommissioning liability is required to be accreted each period to present value. The Company’s decommissioning liabilities consist of costs related to the plugging of wells, the removal of the related facilities and equipment, and site restoration.

The Company estimates the cost that would be incurred if it contracted an unaffiliated third party to plug and abandon wells, abandon the pipelines, decommission and remove the platforms and pipelines and restore the sites of its oil and gas properties, and uses that estimate to record its proportionate share of the decommissioning liability. In estimating the decommissioning liability, the Company performs detailed estimating procedures, analysis and engineering studies. Whenever practical, the Company utilizes its own equipment and labor services to perform well abandonment and decommissioning work. When the Company performs these services, all recorded intercompany revenues and related costs of services are eliminated in the consolidated financial statements. The recorded decommissioning liability associated with a specific property is fully extinguished when the property is abandoned. The recorded liability is first reduced by all cash expenses incurred to abandon and decommission the property. If the recorded liability exceeds (or is less than) the Company’s total costs, then the difference is reported as income (or loss) within revenue during the period in which the work is performed. The Company reviews the adequacy of its decommissioning liabilities whenever indicators suggest that the estimated cash flows needed to satisfy the liability have changed materially. The timing and amounts of these expenditures are estimates, and changes to these estimates may result in additional (or decreased) liabilities recorded, which in turn would increase (or decrease) the carrying values of the related oil and gas properties. The Company revised its estimates for the timing of these expenditures during the nine months ended September 30, 2006, which caused a reduction in the decommissioning liability of approximately $4.9 million. The following table summarizes the activity for the Company’s decommissioning liabilities for the nine months ended September 30, 2006 and 2005 (amounts in thousands):

		Nine Months Ended
		September 30,
		2006				2005
Total decommissioning liabilities at December 31, 2005 and 2004, respectively		$	121,909			$	114,018
Liabilities acquired and incurred			3,554				11,494
Liabilities settled			(2,255	)			(8,199	)
Accretion			3,609				3,290
Revision in estimated liabilities			(4,924	)			(2,873	)
Total decommissioning liabilities at September 30, 2006 and 2005, respectively			121,893				117,730
Current portion of decommissioning liabilities at September 30, 2006 and 2005, respectively			25,067				10,084
Long-term portion of decommissioning liabilities at September 30, 2006 and 2005, respectively		$	96,826			$	107,646

(12) Notes Receivable

Notes receivable consist primarily of contractual obligations of sellers of oil and gas properties to reimburse the Company a specified amount following the abandonment of acquired properties. The Company invoices the seller specified amounts following the performance of decommissioning operations (abandonment and structure removal) in accordance with the applicable agreements with the seller. These receivables are recorded at present value, and the related discounts are amortized to interest income, based on the expected timing of the decommissioning.

(13) Prepaid Insurance and Other

Prepaid insurance and other includes approximately $20.4 million and $23.9 million in insurance receivables at September 30, 2006 and December 31, 2005, respectively. The balances are primarily due to property and casualty insurance claims caused by the impact of Hurricanes Katrina and Rita on our oil and gas properties, as well as our

buildings and equipment. The insurance deductibles on Hurricanes Katrina and Rita of approximately $1 million were expensed during 2005. All amounts not expected to be reimbursed by insurance are expensed as incurred.

(14) Other Comprehensive Income

The following tables reconcile the change in accumulated other comprehensive income (loss) for the three and nine months ended September 30, 2006 and 2005 (amounts in thousands):

		Three Months Ended
		September 30,
		2006				2005
Accumulated other comprehensive income (loss), June 30, 2006 and 2005, respectively		$	1,104			$	(6,865	)
Other comprehensive income (loss):
Other comprehensive income (loss), net of tax
Hedging activities:
Adjustment for settled contracts, net of tax of $2,065 in 2006 and $1,294 in 2005			3,516				2,203
Changes in fair value of outstanding hedging positions, net of tax of $28 in 2006 and ($2,232) in 2005			48				(3,800	)
Foreign currency translation adjustment			1,789				(891	)
Total other comprehensive income (loss)			5,353				(2,488	)
Accumulated other comprehensive income (loss), September 30, 2006 and 2005, respectively		$	6,457			$	(9,353	)

		Nine Months Ended
		September 30,
		2006				2005
Accumulated other comprehensive (loss) income, December 31, 2005 and 2004, respectively		$	(4,916	)		$	2,884
Other comprehensive income (loss):
Other comprehensive income (loss), net of tax
Hedging activities:
Adjustment for settled contracts, net of tax of $5,124 in 2006 and $2,397 in 2005			8,726				4,080
Changes in fair value of outstanding hedging positions, net of tax of ($1,131) in 2006 and ($7,929) in 2005			(1,927	)			(13,499	)
Foreign currency translation adjustment			4,574				(2,818	)
Total other comprehensive income (loss)			11,373				(12,237	)
Accumulated other comprehensive income (loss), September 30, 2006 and 2005, respectively		$	6,457			$	(9,353	)

(15) Commitments and Contingencies

From time to time, the Company is involved in litigation and other disputes arising out of operations in the normal course of business. In management’s opinion, the Company is not involved in any litigation or disputes, the outcome of which would have a material effect on the financial position, results of operations or liquidity of the Company.

(16) Accounting Pronouncements

In February 2006, the Financial Accounting Standards Board issued its Statement of Financial Accounting Standards No. 155 (FAS No. 155), “Accounting for Certain Hybrid Financial Instruments – an amendment of FASB Statements No. 133 and 140.” FAS No. 155 simplifies accounting for certain hybrid financial instruments by permitting fair value remeasurement for any hybrid instrument that contains an embedded derivative that otherwise would require bifurcation and eliminates a restriction on the passive derivative instruments that a qualifying special-purpose entity may hold. FAS No. 155 is effective for all financial instruments acquired, issued or subject to a remeasurement (new basis) event occurring after the beginning of an entity’s first fiscal year that begins after September 15, 2006. The Company does not expect the adoption of FAS No. 155 to have any impact on its results of operations or financial position.

In March 2006, the Financial Accounting Standards Board issued its Statement of Financial Accounting Standards No. 156 (FAS No. 156), “Accounting for Servicing of Financial Assets – an amendment of FASB Statement No. 140.” FAS No. 156 establishes, among other things, the accounting for all separately recognized servicing assets and servicing liabilities by requiring that all separately recognized servicing assets and servicing liabilities be initially measured at fair value, if practicable. FAS No. 156 is effective as of the beginning of an entity’s first fiscal year that begins after September 15, 2006. The adoption of FAS No. 156 will have no impact on the Company’s results of operations or financial position.

In July 2006, the Financial Accounting Standards Board issued FASB Interpretation No. 48 (FIN No. 48), “Accounting for Uncertainty in Income Taxes – an interpretation of FASB Statement No. 109.” FIN No. 48 provides guidance on measurement and recognition in accounting for income tax uncertainties and also requires expanded financial statement disclosure. This interpretation is effective for fiscal years beginning after December 15, 2006. The Company is currently evaluating the impact, if any, that FIN No. 48 will have on its results of operations and financial position.

In September 2006, the Financial Accounting Standards Board issued its Statement of Financial Accounting Standards No. 157 (FAS No. 157), “Fair Value Measurements”. FAS No. 157 establishes a framework for measuring fair value in generally accepted accounting principles, and expands disclosures about fair value measurements. FAS No. 157 is effective for financial statements issued for fiscal years beginning after November 15, 2007. The Company is currently evaluating the impact that FAS No. 157 will have on its results of operations and financial position.

(17) Financial Information Related to Guarantor Subsidiaries

In May 2006, SESI, L.L.C. (Issuer), a wholly-owned subsidiary of Superior Energy Services, Inc. (Parent), issued $300 million of 6 7/8% Senior Notes due 2014 at 98.489%. The Parent, along with substantially all of its subsidiaries, fully and unconditionally guaranteed the Senior Notes and such guarantees are joint and several. All of the guarantor subsidiaries are wholly-owned subsidiaries of the Issuer. Income taxes are paid by the Parent through a consolidated tax return and are accounted for by the Parent. The following tables present the condensed consolidating financial statements as of September 30, 2006 and December 31, 2005 and for the three and nine months ended September 30, 2006 and 2005.

SUPERIOR ENERGY SERVICES, INC. AND SUBSIDIARIES
Condensed Consolidating Balance Sheets
September 30, 2006
(in thousands)
(unaudited)

														Non-
										Guarantor				Guarantor
		Parent				Issuer				Subsidiaries				Subsidiaries				Eliminations				Consolidated
ASSETS
Current assets:
Cash and cash equivalents		$	—			$	78,496			$	19,389			$	13,997			$	—			$	111,882
Accounts receivable, net			—				2,646				244,579				35,440				(13,555	)			269,110
Current portion of notes receivable			—				—				14,558				—				—				14,558
Prepaid insurance and other			18				7,362				50,528				2,743				—				60,651
Total current assets			18				88,504				329,054				52,180				(13,555	)			456,201
Property, plant and equipment, net			—				—				600,885				60,748				—				661,633
Goodwill, net			—				—				199,267				25,540				—				224,807
Notes receivable			—				—				16,524				—				—				16,524
Equity-method investments			124,271				190,443				61,615				971				(314,714	)			62,586
Other assets, net			—				12,444				340				116				—				12,900
Total assets		$	124,289			$	291,391			$	1,207,685			$	139,555			$	(328,269	)		$	1,434,651
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
Accounts payable		$	—			$	341			$	44,233			$	17,843			$	(13,555	)		$	48,862
Accrued expenses			438				26,596				68,740				8,865				—				104,639
Income taxes payable			72,358				—				—				2,039				—				74,397
Current portion of decommissioning liabilities			—				—				25,067				—				—				25,067
Current maturities of long-term debt			—				—				—				810				—				810
Total current liabilities			72,796				26,937				138,040				29,557				(13,555	)			253,775
Deferred income taxes			97,455				—				—				3,670				—				101,125
Decommissioning liabilities			—				—				96,826				—				—				96,826
Long-term debt			—				295,610				—				16,191				—				311,801
Intercompany payables/(receivables)			(338,156	)			35,214				459,503				26,529				(183,090	)			—
Other long-term liabilities			—				3,617				—				—				—				3,617
Stockholders’ equity:
Preferred stock of $.01 par value			—				—				—				—				—				—
Common stock of $.001 par value			80				—				—				101				(101	)			80
Additional paid in capital			434,213				127,173				—				4,350				(131,523	)			434,213
Accumulated other comprehensive income, net			—				—				—				6,457				—				6,457
Retained earnings (deficit)			(142,099	)			(197,160	)			513,316				52,700				—				226,757
Total stockholders’ equity			292,194				(69,987	)			513,316				63,608				(131,624	)			667,507
Total liabilities and stockholders’ equity		$	124,289			$	291,391			$	1,207,685			$	139,555			$	(328,269	)		$	1,434,651