Superior Energy Services, Inc. Reports Second Quarter 2009

Superior Energy Services, Inc. Reports Second Quarter 2009 Results

Core Earnings of $0.35 Per Diluted Share Before Special Charges

  PR Newswire

  NEW ORLEANS, July 28

NEW ORLEANS, July 28 /PRNewswire-FirstCall/ -- Superior Energy Services, Inc.
(NYSE: SPN) today announced a net loss of $68.9 million, or $0.88 per diluted
share on revenue of $361.2 million for the second quarter of 2009.

Excluding non-cash special charges, the Company had adjusted net income of
$27.6 million, or $0.35 per diluted share, compared with adjusted net income
of $81.5 million, or $0.98 per diluted share, on revenue of $457.7 million for
the second quarter of 2008. Net income as reported for the second quarter of
2008 was $71.4 million, or $0.86 per diluted share.

(Please see Non-GAAP reconciliation disclosure and table at the end of this
press release.)

The second quarter 2009 results include the following special charges:

    --  A non-cash, pre-tax charge of approximately $92.7 million, or $0.76 per
        share after tax, related to the reduction in value of a portion of the
        Company's long-lived intangible assets associated with its well
        intervention segment due to the downturn in the oilfield services
        sector, especially in the U.S. land markets;
    --  A non-cash, pre-tax charge of approximately $36.5 million, or $0.30 per
        share after tax, related to the reduction in value of the Company's
        remaining equity-method investment in Beryl Oil & Gas; and,

    --  Losses during the quarter of $15.7 million, or $0.13 per share after tax
        related to the Company's loss in equity-method investment in Beryl
        Oil & Gas for the three months ended June 30, 2009.

The reduction in value of long-lived intangible assets and the writedown of
the Company's remaining equity investment in Beryl Oil & Gas do not impact the
Company's liquidity position, operational capabilities or its future cash
flows.

The results also include non-cash, unrealized losses of approximately $6.0
million, or $0.05 per share after-tax, of the Company's share of unrealized
losses associated with mark-to-market changes in the value of outstanding
hedging contracts at SPN Resources, LLC. The loss was due to increases in oil
prices, the volatility of which makes these changes unpredictable.

For the six months ended June 30, 2009, the Company's net loss was $12.1
million, or $0.16 per diluted share on revenue of $798.3 million as compared
with net income of $170.9 million, or $2.08 per diluted share on revenue of
$899.0 million for the six months ended June 30, 2008.

Operational factors impacting the second quarter include the following:

    --  Total revenue decreased 21% as compared with the second quarter of 2008
        ("year-over-year") and decreased 17% as compared with the
        first quarter of 2009 ("sequential").  The sequential change
        was primarily due to lower demand for production-related services and
        rental tools, especially in the domestic land market areas.  In
        addition, the Company performed less work on its large platform removal
        project than in the prior quarter. The project remains well ahead of
        schedule and on budget.
    --  Well Intervention Segment revenue of $231.1 million decreased 22% over
        the second quarter of 2008 and decreased 20% as compared with the first
        quarter of 2009. Rental Tools Segment revenue was $102.5 million, a 24%
        decrease year-over-year and a 19% decrease sequentially. Marine Segment
        revenue of $27.5 million increased 6% year-over-year and increased 19%
        sequentially.

    --  Gulf of Mexico revenue was approximately $216.0 million, or 17% lower
        sequentially; domestic land revenue was approximately $74.4 million, a
        decline of 27% from the first quarter of 2009; and international revenue
        was approximately $70.8 million, a sequential decrease of 3%.

Terence Hall, Chairman and CEO of Superior, stated, "We had positive earnings
from our core operations during the quarter. Our product/service and
geographic diversification continued to partially mitigate the impact of this
challenging market environment. Industry activity - using the average number
of rigs drilling for oil and natural gas as a proxy - declined at a more rapid
pace than our overall revenue during the second quarter. Relative to our
performance in the first quarter of 2009, our results were impacted by a
confluence of events, with the most significant factors being lower demand in
the domestic land markets for well intervention and rental tools and reduced
contribution from our platform recovery project in the Gulf of Mexico. We
partially offset these activity declines by starting new projects with some of
the marine assets dedicated to the platform recovery project and increasing
our international well intervention business.

"With respect to the platform recovery project, we continue to perform well
ahead of schedule and expect the pace of work for the remainder of the year to
be similar to what we just experienced in the second quarter. For the
remainder of 2009, we expect domestic activity to stabilize and international
activity to increase slightly, especially for rental tools in Latin America as
we continue our expansion efforts into new markets. As a result, we anticipate
that the Company's overall business will continue its relative industry
performance."

Well Intervention Segment

Second quarter revenue for the Well Intervention Segment was $231.1 million, a
22% decrease year-over-year and a 20% decrease sequentially. Excluding the
$92.7 million reduction in value of long-lived intangible assets, income from
operations was $27.6 million, or 12% of segment revenue as compared with $78.2
million, or 26% of segment revenue, in the second quarter of 2008, and $61.7
million, or 21% of segment revenue, in the first quarter of 2009. This segment
experienced sequential decreases in production-related service activity in
both domestic land and Gulf of Mexico areas. In the domestic land market, the
biggest activity declines were in cased hole wireline, coiled tubing,
hydraulic workover and snubbing, and ancillary tools and services supporting
drilling and production-related work. In the Gulf of Mexico, activity
decreased for marine engineering and project management work, cased hole
wireline, mechanical wireline and hydraulic workover and snubbing. These Gulf
of Mexico activity declines were partially offset by an increase in plug and
abandonment services and other decommissioning services. International revenue
in this segment increased due to the commencement of two Angola projects and
increases in hydraulic workover and snubbing services in Australia and the
Caspian region.

Rental Tools Segment

Quarterly revenue for the Rental Tools Segment was $102.5 million, 24% lower
year-over-year and 19% lower sequentially. Income from operations was $20.1
million, or 20% of segment revenue, as compared with $47.5 million, or 35% of
segment revenue in the second quarter of 2008, and $35.3 million, or 28% of
segment revenue in the first quarter of 2009. In the domestic land market, the
largest revenue declines occurred for rentals of accommodations and
stabilization equipment. Gulf of Mexico rentals decreased primarily due to
fewer rentals of drill pipe and stabilization equipment in the shallow water,
while deepwater rentals remained stable. Internationally, the Company
experienced decreased accommodations rentals, fewer sales of manufactured
stabilization equipment, and decreased drill pipe and specialty tubular
rentals in Colombia, Venezuela and the North Sea. These declines were
partially offset by increased rentals of drill pipe and specialty tubulars in
Brazil.

Marine Segment

Marine Segment revenue was $27.5 million, 6% higher year-over-year and 19%
higher sequentially. Income from operations was $4.9 million, or 18% of
segment revenue, up from $1.4 million, or 6% of segment revenue in the second
quarter of 2008, and up from $2.8 million, or 12% of segment revenue in the
first quarter of 2009. Average daily revenue in the second quarter was
approximately $302,000, inclusive of subsistence revenue, as compared with
approximately $286,000 per day in the second quarter of 2008 and approximately
$257,000 in the first quarter of 2009. Average fleet utilization was 53% as
compared with 57% in the second quarter of 2008 and 48% in the first quarter
of 2009. Income from operations as a percentage of revenue increased from the
first quarter of 2009 as a result of higher utilization and the contribution
from two new 265-ft. class liftboats, which entered the fleet during the
period.


              Liftboat Average Dayrates and Utilization by Class Size
                          Three Months Ended June 30, 2009
                                     ($ actual)

                                        Average
                      Class   Liftboats Dayrate Utilization
                      -----   --------- ------- -----------
                    145'-155'        10  $7,051        34.3%
                    160'-175'         8   8,803        41.3%
                    200'              5  11,058        63.7%
                    230'-245'         3  29,284        86.4%
                    250'              2  34,527        97.3%
                    265'              2  34,559        80.9%

Equity-Method Investments

The Company's losses in equity-method investment include the aforementioned
quarterly losses at Beryl Oil & Gas and non-cash, unrealized losses from
hedging contracts impacting the Company's earnings from its equity-method
investment in SPN Resources. Excluding these items, earnings from
equity-method investments were $2.2 million.

Reduction in Value of Long-Lived Intangible Assets and Equity-Method
Investment

In accordance with Statement of Financial Accounting Standards No. 144,
"Accounting for the Impairment or Disposal of Long-Lived Assets," the Company
concluded that $92.7 million, before taxes, of its long-lived intangible
assets was impaired as a result of declining global economic conditions and
the downturn in the oilfield services sector, especially in the U.S. land
markets, which led the Company to believe a triggering event had occurred
requiring the impairment test.

The Company's remaining $36.5 million equity investment in Beryl Oil & Gas was
deemed impaired by the Company following the results of Beryl's consideration
of its strategic alternatives after it defaulted under its credit agreement
primarily due to 2008 hurricane related pipeline curtailments and reduced oil
and gas prices.

Conference Call Information

The Company will host a conference call at 10 a.m. Central Time on Wednesday,
July 29, 2009. The call can be accessed from Superior's website at
www.superiorenergy.com, or by telephone at 480-629-9868. For those who cannot
listen to the live call, a telephonic replay will be available through
Wednesday, August 5, 2009 and may be accessed by calling 303-590-3030 and
using the pass code 4112171#. An archive of the webcast will be available
after the call for a period of 60 days on http://www.superiorenergy.com.

Superior Energy Services, Inc. serves the drilling and production-related
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 uncertainty of macroeconomic
and business conditions worldwide, as well as the global credit markets; 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.


    FOR FURTHER INFORMATION CONTACT:
    Terence Hall, CEO; Robert Taylor, CFO;
    Greg Rosenstein, VP of Investor Relations, (504) 587-7374



                SUPERIOR ENERGY SERVICES, INC. AND SUBSIDIARIES
                     Consolidated Statements of Operations
               Three and Six Months Ended June 30, 2009 and 2008
               (in thousands, except earnings per share amounts)
                                  (unaudited)

                                Three Months Ended      Six Months Ended
                                     June 30,               June 30,
                              ---------------------  ---------------------
                                2009         2008      2009         2008
                              --------      -------  --------     --------
                                        As Adjusted            As Adjusted
                                          (Note 1)               (Note 1)

    Oilfield service and
     rental revenues          $361,161     $457,655  $798,270     $843,974
    Oil and gas revenues             -            -         -       55,072
                              --------      -------  --------     --------
      Total revenues           361,161      457,655   798,270      899,046
                               -------      -------   -------      -------

    Cost of oilfield
     services and
     rentals                   197,268      222,097   419,733      413,229
    Cost of oil and gas
     sales                           -            -         -       12,986
      Total cost of services,
       rentals and sales
       (exclusive of items
       shown separately
       below)                  197,268      222,097   419,733      426,215
                              --------      -------  --------     --------

    Depreciation,
     depletion,
     amortization and
     accretion                  50,978       41,954   100,846       83,833
    General and
     administrative
     expenses                   60,283       66,426   125,269      136,032
    Reduction in value of
     intangible assets          92,683            -    92,683            -
    Gain on sale of
     businesses                      -        3,058         -       40,946
                              --------      -------  --------     --------

    Income (loss) from
     operations                (40,051)     130,236    59,739      293,912

    Other income
     (expense):
      Interest
       expense, net            (11,720)     (11,023)  (25,008)     (23,206)
      Losses from equity-
       method
       investments, net        (19,426)      (7,765)  (17,170)      (3,808)
      Reduction in
       value of equity-
       method
       investment              (36,486)           -   (36,486)           -
                              --------      -------  --------     --------

    Income (loss) before
     income taxes             (107,683)     111,448   (18,925)     266,898

    Income taxes               (38,766)      40,081    (6,813)      96,002
                              --------      -------  --------     --------

    Net income (loss)         $(68,917)     $71,367  $(12,112)    $170,896
                              ========      =======  ========     ========


    Basic earnings (loss)
     per share                  $(0.88)       $0.88    $(0.16)       $2.12
                              ========      =======  ========     ========

    Diluted earnings
     (loss) per share           $(0.88)       $0.86    $(0.16)       $2.08
                              ========      =======  ========     ========

    Weighted average
     common shares
     used in computing
     earnings per share:
        Basic                   78,153       80,749    78,093       80,762
                              ========      =======  ========     ========
        Diluted                 78,153       82,942    78,093       82,134
                              ========      =======  ========     ========


    Note 1
    On January 1, 2009, we adopted Financial Accounting Standards Board Staff
    Position APB 14-1 which changed the accounting for the Company's 1.5%
    senior exchangeable notes.  The comparative Statement of Operations for
    the three and six months ended June 30, 2008 has been adjusted to comply
    with FSP APB 14-1 on a retrospective basis.



             SUPERIOR ENERGY SERVICES, INC. AND SUBSIDIARIES
                       CONSOLIDATED BALANCE SHEETS
                   JUNE 30, 2009 AND DECEMBER 31, 2008
                              (in thousands)


                                                6/30/2009  12/31/2008
                                                ---------  ----------
                                                          As Adjusted
                                                            (Note 1)
    ASSETS

    Current assets:
      Cash and cash equivalents                   $36,590     $44,853
      Accounts receivable, net                    332,128     360,357
      Income taxes receivable                       7,277           -
      Prepaid expenses                             30,384      18,041
      Other current assets                        335,692     223,598
                                               ----------  ----------

            Total current assets                  742,071     646,849
                                               ----------  ----------

    Property, plant and equipment, net          1,217,178   1,114,941
    Goodwill, net                                 482,216     477,860
    Equity-method investments                      59,692     122,308
    Intangible and other long-term assets, net     37,198     128,187

            Total assets                       $2,538,355  $2,490,145
                                               ==========  ==========

    LIABILITIES AND STOCKHOLDERS' EQUITY

    Current liabilities:
      Accounts payable                            $80,609     $87,207
      Accrued expenses                            162,466     152,536
      Income taxes payable                              -      20,861
      Deferred income taxes                        67,742      36,830
      Current maturities of long-term debt            810         810
                                               ----------  ----------

            Total current liabilities             311,627     298,244
                                               ----------  ----------

    Deferred income taxes                         200,116     246,824
    Long-term debt, net                           718,005     654,199
    Other long-term liabilities                    40,915      36,605

    Total stockholders' equity                  1,267,692   1,254,273
                                               ----------  ----------

            Total liabilities and stockholders'
             equity                            $2,538,355  $2,490,145
                                               ==========  ==========


    Note 1
    On January 1, 2009, we adopted Financial Accounting Standards Board Staff
    Position APB 14-1 which changed the accounting for the Company's 1.5%
    senior exchangeable notes.  The comparative Balance Sheet as of
    December 31, 2008 has been adjusted to comply with FSP APB 14-1 on a
    retrospective basis.



                   Superior Energy Services, Inc. and Subsidiaries
                                Segment Highlights
          Three months ended June 30, 2009, March 31, 2009 and June 30, 2008
                                   (Unaudited)
                                  (in thousands)

                                           Three months ended,
                             ------------------------------------------------
    Revenue                  June 30, 2009     March 31, 2009   June 30, 2008
                             -------------     --------------   -------------

    Well Intervention          $231,121             $288,057      $296,891

    Rental Tools                102,533              125,944       134,773

    Marine                       27,507               23,108        25,991
                               --------             --------      --------

    Total Revenues             $361,161             $437,109      $457,655
                               ========             ========      ========

                                            Three months ended,
                             ------------------------------------------------
    Gross Profit (1)         June 30, 2009     March 31, 2009   June 30, 2008
                             -------------     --------------   -------------

    Well Intervention           $83,607             $122,568      $135,410

    Rental Tools                 69,231               83,908        93,438

    Marine                       11,055                8,168         6,710
                               --------             --------      --------

    Total Gross Profit         $163,893             $214,644      $235,558
                               ========             ========      ========

                                            Three months ended,
                             ------------------------------------------------
    Income from Operations   June 30, 2009     March 31, 2009   June 30, 2008
                             -------------     --------------   -------------

    Well Intervention (2)      $(65,094)             $61,700       $78,202

    Rental Tools                 20,123               35,309        47,531

    Marine                        4,920                2,781         1,445

    Gain on Sale of Business          -                    -         3,058
                               --------             --------      --------

    Total Income (Loss) from
     Operations                $(40,051)             $99,790      $130,236
                               ========             ========      ========


    (1) Gross profit is calculated by subtracting cost of services (exclusive
        of depreciation, depletion, amortization and accretion) from revenue
        for each of the Company's segments.
    (2) Income from operations in the Well Intervention Segment for the three
        months ended June 30, 2009 includes a reduction in value of long-lived
        intangible assets of $92.7 million.



                              NON-GAAP RECONCILIATION

    We report our financial results in conformity with U.S. generally accepted
    accounting principles (GAAP). However, the Company provides non-GAAP
    adjusted net income and non-GAAP adjusted earnings per share because
    management believes that in order to properly understand the Company's
    operational trends and performance, investors may wish to consider the
    impact of adjustments for non-operating items (such as special charges
    from impairments and unrealized earnings (losses) from mark-to-market
    changes in hedging contracts and other non-recurring and/or non-cash
    charges) resulting from facts and circumstances, including acquisitions,
    divestitures, changes in commodity prices, and other non-recurring items.
    Management uses adjusted net income and adjusted diluted earnings per
    share to evaluate the Company's operational trends and historical
    performance on a consistent basis. Also, management believes adjusted net
    income and adjusted diluted earnings per share are more comparable to
    earnings estimates provided by research analysts. The adjusted amounts are
    not measures of financial performance under GAAP.

    A reconciliation of net income, the GAAP measure most directly comparable
    to non-GAAP adjusted earnings per share, is below.  Non-GAAP financial
    measures used by the Company may be calculated differently from, and
    therefore may not be directly comparable to, similarly titled measures
    used by other companies. Non-GAAP financial measures should be viewed in
    addition to, and not as an alternative for, or superior to, the Company's
    reported results prepared in accordance with GAAP.



                                                         Three Months Ended
                                                              June 30,
                                                          ----------------
                                                           2009     2008
                                                          -------  -------

    Net income (loss) as reported                        $(68,917) $71,367

    Pre-tax adjustments:
    --------------------
      Reduction in value of intangible assets              92,683        -
      Reduction in value of equity-method investment in
       Beryl Oil & Gas                                     36,486        -
      (Earnings) losses from equity-method investment in
       Beryl Oil & Gas                                     15,683     (989)
      Unrealized losses from equity-method investment
       hedging contracts at SPN Resources, LLC              5,972   19,934
      Gain on sale of businesses                                -   (3,058)
                                                          -------  -------

    Total pre-tax adjustments                             150,824   15,887

    Income tax effect of adjustments                      (54,297)  (5,719)
                                                          -------  -------

    Non-GAAP adjusted net income                          $27,610  $81,535
                                                          =======  =======

    Non-GAAP adjusted diluted earnings per share            $0.35    $0.98
                                                          =======  =======
    Weighted average common shares used in
     computing diluted earnings per share                  78,153   82,942
                                                          =======  =======

SOURCE Superior Energy Services, Inc.

Website: http://www.superiorenergy.com
Contact: Terence Hall, CEO, or Robert Taylor, CFO, or Greg Rosenstein, VP of
Investor Relations, all of Superior Energy Services, Inc., +1-504-587-7374
 
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