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)		001-34037 (Commission File Number)		75-2379388 (IRS Employer Identification No.)

601 Poydras Street, Suite 2400, New Orleans, Louisiana (Address of principal executive offices)		70130 (Zip Code)

(504) 587-7374
(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 October 30, 2008, Superior Energy Services, Inc. (the “Company”) issued a press release announcing its earnings for the third quarter ended September 30, 2008. 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 in this Item 2.02 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 October 30, 2008.

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.

     Dated: October 31, 2008

Exhibit 99.1

		601 Poydras Street Suite 2400 New Orleans, Louisiana 70130 (504) 587-7374 NYSE: SPN

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

Superior Energy Services Announces Third Quarter 2008 Results

New Orleans, La. – October 30, 2008 — Superior Energy Services, Inc. (NYSE: SPN) today announced net income of $99.9 million and diluted earnings per share of $1.22 on record revenue of $490.3 million, as compared with net income of $75.1 million, or $0.91 diluted earnings per share on revenue of $398.9 million for the third quarter of 2007. Diluted earnings per share and revenue increased 34% and 23%, respectively, as compared with the third quarter of 2007.

Excluding pre-tax non-cash, unrealized earnings of $19.2 million ($12.3 million after-tax) from hedging contracts impacting the Company’s earnings from equity-method investments, adjusted net income for the third quarter of 2008 was $87.6 million, or $1.07 diluted earnings per share.

Factors impacting the quarter include the following:

•		The Company estimates that the overall impact from the active 2008 hurricane season was a reduction in earnings for the third quarter in the range of $0.12 to $0.15 diluted earnings per share, including approximately $0.05 diluted earnings per share from shut-in oil and gas production at the Company’s equity-method investments.
•		During the quarter, the Company repurchased 1.52 million shares of its common stock for $55.4 million as part of its $350 million repurchase program.
•		Well Intervention Group Segment revenue of $319.8 million increased 58% year-over-year and 8% sequentially. The sequential improvement was due to continued execution of the previously announced wreck removal project and increases in demand for production-related services such as coiled tubing, cased hole wireline, hydraulic workover and snubbing, well control.
•		Rental Tools Segment revenue was $136.6 million, a 15% increase year-over-year and 1% increase sequentially.
•		Marine Segment revenue of $33.9 million increased 29% year-over-year and 30% sequentially due to increased utilization across most liftboat classes.
•		Gulf of Mexico revenue was $276.9 million, revenue from domestic land market areas was $134.5 million and international revenue was $78.9 million.

For the nine months ended September 30, 2008, revenue was $1,389.3 million and net income was $275.9 million or $3.36 diluted earnings per share, as compared with revenues of $1,158.6 million and net income of $209.2 million or $2.53 diluted earnings per share for the nine months ended September 30, 2007.

Terence Hall, Chairman and CEO of Superior, stated, “Our diversification strategy continued to benefit us as we were able to record outstanding financial results despite significant business disruptions in the Gulf of Mexico because of hurricanes. From an operational standpoint, the first two months of the quarter were the best in Company history. In addition, strong activity levels continued in the domestic land and international market areas in September while our Gulf of Mexico businesses recovered.

“The Company is well positioned to manage through these volatile times as a result of our strong balance sheet, our focus on increasing geographic diversification, ongoing work from the wreck removal project, and anticipated new work for the well intervention and marine segments resulting from the recent hurricanes.”

Well Intervention Group Segment

Third quarter revenue for the Well Intervention Group was a record $319.8 million, a 58% increase year-over-year and an 8% increase sequentially. Income from operations was $90.3 million, or 28% of segment revenue as compared with $47.6 million, or 23% of segment revenue, in the third quarter of 2007, and $78.2 million, or 26% of segment revenue, in the second quarter of 2008. Engineering and project management services increased over the second quarter of 2008 as a result of the wreck removal project. Other sequential revenue increases included coiled tubing in both the Gulf of Mexico and domestic land markets; hydraulic workover and snubbing in the Gulf of Mexico; and cased hole wireline and well control services in the domestic land market areas. These offset decreases in international revenue resulting primarily from the mobilization of the Company’s derrick barge from the Asia Pacific market area to the Gulf of Mexico. Income from operations as a percentage of revenue (“operating margin”) increased due to volume increases for several of our services.

Rental Tools Segment

Quarterly revenue for the Rental Tools Segment was $136.6 million, 15% higher year-over-year and 1% over the most recent quarter. Income from operations was $43.6 million, or 32% of segment revenue, as compared with $51.4 million, or 43% of segment revenue in the third quarter of 2007, and $47.5 million, or 35% of segment revenue in the second quarter of 2008. Income from operations in the third quarter of 2007 included a $7.5 million gain on sale of business. Sequentially, demand grew for accommodations and stabilization equipment in the Gulf of Mexico and domestic land market areas; drill pipe and specialty tubulars in international market areas; and connecting iron and handling tools in the Gulf of Mexico. This was partially offset by decreases in drill pipe rentals and on-site bolting services in the Gulf of Mexico due to hurricanes and a decrease in rentals of stabilization equipment in certain international market areas. The decrease in operating margin sequentially and year-over-year is due to business mix, highlighted by lower rentals of higher margin drill pipe and specialty tubulars in the Gulf of Mexico.

Marine Segment

Superior’s Marine Segment quarterly revenue was $33.9 million, a 29% increase year-over-year and a 30% increase from the most recent quarter. Income from operations was $6.5 million, or 19% of segment revenue, compared with $8.1 million, or 31% of segment revenue for the third quarter of 2007, and $1.4 million, or 6% of segment revenue in the second quarter of 2008. Average daily revenue in the third quarter was approximately $368,000, inclusive of subsistence revenue, as compared with $286,000 per day in both the third quarter of 2007 and the second quarter of 2008. Average fleet utilization was 81% as compared with 62% in the third quarter of 2007 and 57% in the second quarter of 2008. The operating margin significantly increased sequentially as a result of higher utilization.

Liftboat Average Dayrates and Utilization by Class Size
Three Months Ended September 30, 2008
($ actual)

						Average
Class		Liftboats				Dayrate				Utilization
145’-155’			11			$	7,920				78.3	%
160’-175’			8				10,640				81.3	%
200’			5				15,857				90.9	%
230’-245’			3				25,386				85.5	%
250’			2				35,239				67.9	%

Equity-Method Investments

The $23.2 million income from equity-method investments in the third quarter of 2008 includes $19.2 million, pre-tax, of the Company’s share of non-cash unrealized earnings associated with mark-to-market changes in the value of outstanding hedging contracts put in place by SPN Resources, LLC. The mark-to-market changes were due to significant decreases in natural gas and oil prices, the volatility of which makes these changes unpredictable. Prior to the hurricanes, production at SPN Resources, net to the Company’s interest, was approximately 2,200 boe per day and production at Beryl Oil & Gas, net to the Company’s interest, was approximately 3,600 boe per day. Approximately 50% of production remains shut-in. Restoration of full production is expected by year end.

Conference Call Information

The Company will host a conference call at 11 a.m. Central Time on Friday, October 31, 2008. The call can be accessed from Superior’s website at www.superiorenergy.com, or by telephone at 303-205-0033. For those who cannot listen to the live call, a telephonic replay will be available through Friday, November 7, 2008 and may be accessed by calling 303-590-3000 and using the pass code 11120954#. An archive of the webcast will be available after the call for a period of 60 days at www.superiorenergy.com.

Superior Energy Services, Inc. serves the drilling and production needs of oil and gas companies worldwide through its brand name rental tools and its integrated well intervention services and tools, supported by an engineering staff who plan and design solutions for customers. Offshore projects are delivered by the Company’s fleet of modern marine assets.

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 Nine Months Ended September 30, 2008 and 2007
(in thousands, except earnings per share amounts)
(unaudited)

		Three Months Ended								Nine Months Ended
		September 30,								September 30,
		2008				2007				2008				2007
Oilfield service and rental revenues		$	490,282			$	347,228			$	1,334,256			$	1,021,712
Oil and gas revenues			—				51,696				55,072				136,889
Total revenues			490,282				398,924				1,389,328				1,158,601
Cost of oilfield services and rentals			236,610				159,683				649,839				465,085
Cost of oil and gas sales			—				18,954				12,986				55,845
Total cost of services, rentals and sales			236,610				178,637				662,825				520,930
Depreciation, depletion, amortization and accretion			44,842				49,881				128,675				133,967
General and administrative expenses			68,379				57,150				204,411				161,833
Gain on sale of businesses			—				7,483				40,946				7,483
Income from operations			140,451				120,739				434,363				349,354
Other income (expense):
Interest expense, net			(7,593	)			(7,402	)			(22,665	)			(22,635	)
Earnings (losses) from equity-method investments, net			23,167				1,395				19,359				(2,447	)
Income before income taxes			156,025				114,732				431,057				324,272
Income taxes			56,169				39,682				155,181				115,116
Net income		$	99,856			$	75,050			$	275,876			$	209,156
Basic earnings per share		$	1.24			$	0.92			$	3.42			$	2.58
Diluted earnings per share		$	1.22			$	0.91			$	3.36			$	2.53
Weighted average common shares used in computing earnings per share:
Basic			80,538				81,470				80,691				81,053
Diluted			81,845				82,793				82,041				82,521

SUPERIOR ENERGY SERVICES, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
SEPTEMBER 30, 2008 AND DECEMBER 31, 2007
(in thousands)

		9/30/2008				12/31/2007
		(unaudited)				(audited)
ASSETS
Current assets:
Cash and cash equivalents		$	128,169			$	51,649
Accounts receivable, net			383,813				343,334
Current portion of notes receivable			—				15,584
Prepaid expenses			19,888				19,641
Other current assets			110,403				40,797
Total current assets			642,273				471,005
Property, plant and equipment, net			1,055,310				1,086,408
Goodwill, net			483,266				484,594
Notes receivable			—				16,732
Equity-method investments			108,153				56,961
Intangible and other long-term assets, net			133,880				141,549
Total assets		$	2,422,882			$	2,257,249
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
Accounts payable		$	78,394			$	69,510
Accrued expenses			158,489				177,779
Income taxes payable			50,592				7,520
Current portion of decommissioning liabilities			—				36,812
Current maturities of long-term debt			810				810
Total current liabilities			288,285				292,431
Deferred income taxes			198,584				163,338
Decommissioning liabilities			—				88,158
Long-term debt			711,110				711,151
Other long-term liabilities			26,578				21,492
Total stockholders’ equity			1,198,325				980,679
Total liabilities and stockholders’ equity		$	2,422,882			$	2,257,249

SUPERIOR ENERGY SERVICES, INC. AND SUBSIDIARIES
Segment Highlights
Three months ended September 30, 2008, June 30, 2008 and September 30, 2007
(Unaudited)
(in thousands)

		Three months ended,
		September 30, 2008				June 30, 2008				September 30, 2007
Revenue
Well Intervention		$	319,798			$	296,891			$	202,807
Rental Tools			136,600				134,773				118,918
Marine			33,884				25,991				26,323
Oil and Gas			—				—				51,696
Less: Oil and Gas Eliminations (2)			—				—				(820	)
Total Revenues		$	490,282			$	457,655			$	398,924

		Three months ended,
		September 30, 2008				June 30, 2008				September 30, 2007
Gross Profit (1)
Well Intervention		$	150,895			$	135,410			$	91,032
Rental Tools			90,178				93,438				83,776
Marine			12,599				6,710				12,737
Oil and Gas			—				—				32,742
Total Gross Profit		$	253,672			$	235,558			$	220,287

		Three months ended,
		September 30, 2008				June 30, 2008				September 30, 2007
Income from Operations
Well Intervention		$	90,349			$	78,202			$	47,613
Rental Tools (3)			43,628				47,531				51,446
Marine			6,474				1,445				8,148
Oil and Gas			—				3,058				13,532
Total Income from Operations		$	140,451			$	130,236			$	120,739