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Executives

David Wallace – Chairman and CEO

Thomas Stoelk – CFO, Principal Accounting Officer, Vice President

Analysts

Joe Agular – Johnson Rice & Company

Victor Marchon – RBC Capital Markets

Superior Well Services, Inc (SWSI) Q4 2007 Earnings Call March 11, 2008 11:00 AM ET

Operator

Good day ladies and gentlemen and welcome to the fourth quarter 2007 Superior Well Services earnings conference call. My name is Latasha and I will be your coordinator for today. (Operator Instructions) I would now like to turn the call over to Mr. Dave Wallace, Chairman and CEO please proceed sir.

Dave Wallace

Thanks Latasha, good morning everyone and welcome to the Superior Well Services fourth quarter and year-end 2007 earnings call. Joining me today is Tom Stoelk, our Chief Financial Officer. I would like to remind all those participating on the call today that a replay of our conference all will be available to listen to through March 25, 2008 by dialing 888-286-8010 and referencing the conference ID number 74358557. The webcast will be archived for replay on the Company website for 15 days. Additionally, our form 10Q will be filed today after the earnings release.

Before I begin with comments on our fourth quarter and year-end operating performance, I would like to make the following disclaimer regarding our call today. Except for historical information, statements made in this presentation including those relating to acquisition or expansion opportunity, future earnings, cash flow and capital expenditures are forward-looking statements within the meaning of section 27A of the Securities Act of 1933 in section 21E of the Securities Act of 1934.

All statements other than statements of historical facts included in this presentation that address activities, events or development that Superior expects, believes or anticipates will or may occur in the future are forward-looking statements. These statements are based on certain assumptions made by Superior based on management’s experience and reception of historical trend, currents conditions, expected future developments and other factors that are believed appropriate in the circumstances. Such statements are subject to a number of assumptions, risks and uncertainty many of which are beyond Superior’s control, which may cause Superior’s actual results to differ materially from those implied or expressed by the forward-looking statements.

These risks are detailed in Superior’s Securities and Exchange Commission filings. The Company undertakes no obligation to publicly update or review any forward-looking statements.

Revenues in 2007 increased 43% over the prior year to 350.8 million our tenth consecutive year of revenue growth. Net income also increased rising 18% over 2006 to 37.8 million or $1.63 per diluted share. Revenue increases were driven primarily by increased activity in our Appalachian Region and Southwest Region from new and existing service centers. We also made significant progress towards a goal of increasing our capabilities and gaining market acceptance for our higher tech completion services.

As is described in our year-end press release, we were presented several challenges in the fourth quarter. Unexpected delays in the start up of our new service centers, longer than anticipated holiday shut down and greater pricing discounts in certain markets all resulted in lower than expected profitability. As a result, net income in the fourth quarter was seven million dollars, down 29% from the same period last year.

Let’s walk through each of the factors having the most significant impacts on our fourth quarter profits.

We opened four new start up service centers in the last half of 2007 with three of them opening in the fourth quarter. Historically, we have opened new service centers in the last first quarter or second quarters; however, delays in receiving and commissioning equipment resulted in opening these new service centers later than we desired. It has been our experience that new service centers take 12 to 24 months to become profitable; however, these delays pushed back the time on these centers to commence operation.

Delays in obtaining regulatory permits prevented us from constructing bulk material handling facilities at several of our new service centers. For example, the lack of bulk handling capability in our Artesian, New Mexico Center required us to truck in blended cement 470 miles from Alvarado facility, which is inefficient and expensive. Utilization in nearly all our service center were negatively impacted by a longer than expected holiday shut down. Many customers shut down from the Friday before Christmas until after New Year’s Day. We have not seen this significant of a drop for the last several years. This type of drop off in activity usually indicate that our customer’s were close to spending all their 2007 CAPEX budget or that they wanted to avoid the extra cost associated with working in bad weather. For example, in Appalachia, poor weather can increase the cost of a well by 15 to 20%, which is significant.

Turning the focus to our regions, our Appalachia Region at 2007 revenues of 158.9 million up 34% from 2006, this region accounted for 45% of the Company’s total revenue. New drilling and completion technologies have made the development of deeper horizons commercially viable and large operators in the basins have announced their intentions to ramp up drilling activity in 2008.

As many of you are well aware, low result in the Marseilles Shale plate have many operators building acreage positions. In response to increasing activity, we have added a high rate frac crew in Pennsylvania consisting of 30,000 horsepower along with the support equipment needed. Our experience gained from working at other shale basins is helping us penetrate this market and we have been involved in many Marseilles wells to date in both the high pressure and low-pressure areas.

In 2008, we expect to secure business from most of the operators active in the Marseilles. We plan to add equipment for increasing all of our service lines in Appalachia as operators ramp up their drilling activity.

Our Southeast Region had revenue of 7 million for the year and was 14% on a year over year basis. The Southeast Region was our second largest reason comprising 19% of total revenue for the year. Service Centers in the area serve some of the largest clients and provide cash flow for financing future Company growth.

We were awarded a large stimulation project for [Den Mary/Denmark] in Mississippi and we’re winning more business related to the Floyd Shale Plate. In Bossier City, we secured some mining work for InCana and Goodrich Petroleum through a running of approximately 14 drilling rigs in the plate. We are also working to gain market acceptance for our super high tech capabilities in this region for 2008.

The Southwest Region posted revenues of 37.6 million contributing 11% to total revenues. Year over year revenue in this region grew an impressive 450%. The bulk of this revenue was realized from existing service centers as our newest service center in Artesia, New Mexico, opened later in the year than planned as a result of delays in commissioning equipment. This region remains one of our most attractive growth markets as roughly half of the active drilling rigs in the U.S. are located here.

Although we have experience-pricing pressure, the low-tech stimulation jobs as competitors move more equipment into the area due to a slow down in other regions. Our cementing capabilities differentiate us in this market and have helped us win business in other service segments. The operator service center continues to mature in learn how to make acceptable profit in a highly discounted market.

Our new service center in Artesia experienced the usually start up challenges of gaining customer confidence and increasing utilization. We are working diligently to obtain approval for our air quality permit, which will clear the way for erecting our cement bulk blending facility. At this time, we are blending and hauling cement blends from Alvarado, which is inefficient and costly. Once the new cement blending facility is operational, profits at Artesia will improve. Increasing phone calls and bid activity in Artesia is primarily an oil play gives us optimism for improved profitability in 2008. For example, revenues have increased every month since we opened the center and our January 2008 revenue was almost equal to what we generated in this center in fourth quarter of last year. We have also increased our customer responsiveness in the region with the recent opening of the Dallas-Ft. Worth Sales Office.

The Mid-Continent Region contributed 56.1 million in revenue for 2007 and represented 16% of total revenues. Year over year revenues for this region grew 29%. Our service center in Clinton, Oklahoma, out performed all other service centers added in 2007 on a revenue basis. Our strong presence and excellent service quality of customer project has resulted in a consistent backlog of work for many leading ENP companies and our Clinton Service Center, we have been award large frac packages for new customers including Semarak and Lyn Energy, in addition to our usual customers. Clinton is strategically positioned to efficiently serve the active play in the Anadarko basin and rig count remains steady in this region.

In 2008, we plan to extend our services in super hi-tech cementing and stimulation jobs.

Superior’s been attempting to make inroads into the super hi-tech segment by increasing the technical expertise of our people, equipment and products. Because fewer companies are capable of successfully performing super hi-tech work, the margins are significantly better in this segment. But, the ability to perform these more challenging jobs isn’t enough to succeed in the market segment. Customer acceptance is also required. To that end, we completed two super hi-tech jobs in 2007 and have several more planned for 2008 including jobs in the Anadarko basin.

Moving on to our final region, the Rockies, which has been one of our most challenging areas. The Rocky Mountain Region added 31.6 million in revenue for the year, accounting for 9% of overall revenues. Year over year revenue growth for this region was 88%. In the second half of the year, well completion activity dropped substantially in response to low regional natural gas prices. Extreme natural gas pricing differentials resulted in sporadic demand making pricing more competitive and difficult to match our cost structure to demand. Net income from this region was negatively impacted with the addition of two new service centers located in Brighton, Colorado, and Rock Springs, Wyoming, which opened late in 2007.

In Brighton, delays in receiving equipment resulted in a occurring operating costs relatively to revenue generating activity in demand in our Rock Springs Center was lower than expected.

Currently, regional natural gas prices have recovered as a result of colder weather and the openings of the Rockies Express Pipeline. Our Brighton Center captured it’s first job in January and our job performance has been excellent resulting in steady increases in monthly revenue. In addition, regional market acceptance for hi-tech services is increasing and we are now being awarded more challenging profitable jobs. Our outlook for Brighton is very positive given their excellent job performance, technical testing lab and increased drilling activity in the area.

In the fourth quarter, we further expanded our footprint in this region with the acquisition of Madison Wire Line. As previously discussed, this acquisition gives us access to the busy Balkin Play of North Dakota and Montana. As with our other service centers that began with the acquisition of a wire line company, we will look to add additional services to the area in the future as activity and demand increases.

I will now turn the call over to Tom, to discuss our financial results.

Tom Stoelk

Thanks Dave and as Dave mentioned despite some challenges in the last few months of the year, Superior turned in another year of solid performance. As previously mentioned, net income for the year increased 18% to 37.8 million while earnings per share remained at $1.63 per diluted share.

EBITDA increased 20.2 million in 2007 to 87.9 million an increase of 30% over 2006. Revenues were up 43% in 2007 to 350.8 million and this year marks our tenth consequential year of revenue growth. Approximately 20.3 million or 6% of this revenue growth was contributed by our new service centers. We define new service centers as organic start-up locations and acquisitions that have less than 12 months of operating history with the Company.

During 2007, we established seven service centers two through acquisition of wire line assets and five start-up service centers. While operating revenue in all service lines have revenue increases in 2007 as compared to 2006, revenue by operating region increased by 40 million in Appalachia, 8.2 million in the Southeast Region, 30.7 million in the Southwest Region, 12.5 million in the Mid-Continent Region and 14.8 million in the Rocky Mountain Region.

Revenue from our technical pumping services, accounted for 87% or 305 million of the total revenue that was up 39% or 85 million from 2006. Approximately 11.9 million of the technical pumping services between 2007 and 2006 were attributable to new start up centers. Stimulation services accounted for 54%, nitrogen 12% and cementing 21% of our technical pumping revenues in 2007.

Down-hole surveying was responsible for the balance of our revenues in 2007, contributing 46 million. Down-hole surveying increased 83% or approximately 20.8 million as compared to 2006 and this increase was primarily attributable to wire line acquisitions made in the second half of 2006, as well as, the acquisitions made in 2007. As a percentage of revenues, sales discounts increased by 4.8% in 2007 as compared to 2006 due to increased capacity and increased competition in certain of our operating regions.

Cost of revenues was up 52% to 252.5 million. The aggregate dollar increased in the cost revenues was due to the fact these costs vary with revenue in the higher activity levels. As a percentage of revenues, cost of revenues increased to 72% of revenues for 2007, up from 68% in 2006. This percentage increased between periods was primarily due to higher labor, depreciation material cost associated with the growing number of service centers. Labor expense as a percentage of revenues increased 1.7% to 19.9 in 2007. The increase in expenses is primarily attributable to delays in equipment and permits, which lowered our utilization at our newly established service center. Material cost as a percentage of revenues increased 0.9% on higher transportation cost as well as greater cement trucking cost today referenced earlier.

Appreciation expense as a percentage revenues increased 1.3% to 7% in 2007 that’s compared to 2006 due primarily the higher amounts of capital spending in ’07 as well as lower utilizations.

SG&A expenses were 36.4 million in 2007 compared to 25.7 million in 2006 that’s an increased of 10.7 million, 42%. Approximately one third of the aggregate dollar increased between 2007 and 2006 relates to our new service centers. As a percentage of revenues, SG&A was 10%, which was essentially flat with that percentage in the prior year.

Operating income was 61.8 million for the year ended December 31, 2007 compared to 53 million for the year ended December 31, 2006 that is an increase of 16.6 % between periods. As a percentage of revenues, operating income decreased by 4.1% from 21.7% in “06 to 17.6% in 2007. The primary reasons for this decrease were higher discounts for our services, cost incurred in the five start-up service centers due to delays in opening these centers as well as the increase in SG&A and the cost of revenues, I just described.

Operating income in 2007 was reduced by approximately five million dollars due to the five start up centers that were established during the year. It has been our experience that when we established a new service center in a particular operating region, it may take between 12 to 24 months before the center has a positive impact on operating income that we generate in that relevant region.

Taking a look at the fourth quarter results, net income for the three months ended December 31 totaled seven million, which was 28.8% decrease as compared to the fourth quarter of 2006 and a 40.2% when comparing to the third quarter of 2007. As Dave mentioned in his remarks, fourth quarter of 2007 was impacted by higher start up costs at the newer service centers due to delays in receiving equipment and regulatory approvals as well as longer holiday shut-downs.

Additionally, higher sales discounts due to increased competition in certain operating areas impacted the quarter.

EBITDA for the three month period ending December 31, 2007, reached 19.9 million which is a decrease of 6.2% when compared with the fourth quarter of ’06 and it’s a 22.6% decrease when compared to the third quarter of ’07.

Fourth quarter revenues were up 26% year over year to 94.4 million for the quarter and they were essentially flat sequentially. Increased activity levels as well as the down-hole asset acquisitions made during ’07 lead to the increases between quarterly periods.

Increased activity in 2007 was partially offset by higher discounts in 2007 and also the longer holiday shut downs that Dave talked about. New service centers accounted for 10.4% of 2007’s fourth quarter revenue.

Revenue by operating region in the fourth quarter was 45.6 million for Appalachian Region, 17.5 million for the Southeast Region, 7 million in the Rocky Mountain Region and 10.4 in the Southwest Region and Mid-Continent had 14.4 million.

Compared to the fourth quarter of 2006, fourth quarter of 2007 revenues was up 31% in Appalachian Region. They were up 11% in the Southeast Region; they were down 2% in the Rocky Mountain Region, up 99% in the Southwest Region and up 18% in the Mid-Continent Region. Sequentially, fourth quarter revenues were flat in the Appalachian Region, down 10% in the Southeast Region, up 4% in the Rocky Mountain Region, up 12% in the Southwest Region and 7% in the Mid-Continent Region.

Money from our technical pumping services increased by approximately 26.3% to 84.7 million for the fourth quarter of 2007 as compared to the fourth quarter of 2006 and increased 4.1% when compared to the third quarter of 2007. Stimulation, cementing and nitrogen revenues accounted for 52.5, 20.8 and 16% of the net revenues, respectively during the fourth quarter. Approximately 7.1 million of this increase between the fourth quarter of ’07 and the fourth quarter of ’06 were attributable to our new service centers.

Revenues from down-hole surveying increased 27.9% to 10.2 million for the fourth quarter of 2007 as compared to fourth quarter of ’06. The revenue increase in the fourth quarter of ’07 as compared to fourth quarter of ’06 was driven by new service centers that were acquired during 2007. New service center revenue increased down-hole surveying revenues in the fourth quarter as compared to the fourth quarter of ’06 by 2.7 million. Down-hole revenues decreased 2.7 million when you are comparing it to the sequential third quarter of ’07 and that’s primarily due to the seasonal slow downs that have historically impacted the Rocky Mountain Region.

In the fourth quarter of 2007, we experience higher sales discounts. As a percentage of revenues, discounts increased 5.2 % in the fourth quarter of 2007 as compared to the fourth quarter of ’06 and increased 1.3% when you are comparing it to the third quarter of ’07.

Although commodity prices and drilling activities remain at relatively high levels, the increased capacity of [inaudible] pricing in certain of our operating regions.

Cost of revenues increased 42.3% to 73 million in the fourth quarter of ’07 compared to 51.3 million for the fourth quarter of ’06. The $21 million aggregate increase in these costs was due to the fact that these costs vary with revenue and higher activity levels. At a percentage of revenue, cost of revenue increased to 76.9% for the fourth quarter of 2007 from 68.2% in the fourth quarter of 2006 and 70.1% from the third quarter of 2007. A percentage increase between periods was primarily a result of higher labor, depreciation and material cost as a percentage of revenue. Labor expense as a percentage of revenues increased 3.5% to 21.4% from the fourth quarter of ’07 as compared to the fourth quarter of ’06 as a result of lower utilization our newer service centers established during 2007 due to delays mentioned earlier as well as longer holiday shut-downs.

Additionally, in the fourth quarter of 2007, labor increased due to increased staffing as we began servicing the Marseille shale activity in Appalachia. Material cost as a percentage of revenues increased in the fourth quarter of 2007 to 42.7% an increase of 2.4% compared to the fourth quarter of ’06 and it was up 3.6% as compared to the third quarter of ’07. Higher sand transportation costs were the primarily reason for the increase as well as greater cement trucking costs for our new centers without bulk handling facilities.

Depreciation expense as a percentage of revenues was 7.9% in the fourth quarter of ’07, an increase of 1.8% as compared to the fourth quarter of ’06 and it increased 1.0% sequentially from the third quarter of ’07. This was really due to the higher amounts of capital equipment that we placed in service between the periods as to a lesser extent the lower utilizations at our newest service centers.

SG&A expenses increased to 9.8 million that was up 35% compared to the fourth quarter of ’06 and it’s up 5% sequentially. As a percentage of revenues, SG&A expenses increased to 10.3% for the fourth quarter of ’07 from 9.6 in the fourth quarter of 2006 and 9.9 in the previous quarter of ’07. Establishment of new service centers led to the increases in labor, office expenses and appreciation, which led in turn to an increase in SG&A.

Operating income for the fourth quarter of ’07 was 12.2 million that’s a decrease of 26.6% compared to 16.6 million in the fourth quarter of ’06 and it decreased 35.3% compared to 18.9 million in operating income in the third quarter of 2007.

The five start up service centers established in 2007 reduced operating income in the fourth quarter of ’07 by 3.5 million compared to the fourth quarter of 2006 and 2.7 million comparing it to the third quarter of 2007. As a percentage of revenue, operating income decreased from 22.1% in the fourth quarter of 2006 to 12.9 in fourth quarter of 2007.

Margins were hampered by more competitive pricing environment. The Pressure Pumping Company sought to maximize utilizations in regions that experienced an influx of equipment. Additionally, longer holiday shutdowns than experienced in prior years and delays in opening service centers, cost higher operating cost during the fourth quarter of 2007.

Turning to the balance sheets, we ended the year in a strong financial position with approximately 5.5 million in cash and 38.4 million in working capital. Total debt at the end of the year was 9.6 million and the Company’s debt to capitalization was approximately 3.0%. We invested 117.8 million in capital expenditures during 2007 to equip new service centers, expand our national presence and add equipment in existing locations. The higher levels of capital spending in the fourth quarter reflect expansion of our servicing fleet, service the Marseilles Shale Play initially this expansion was a planned 2008 capital expenditure but given activity levels, we decided to accelerate these expenditures. Given the accelerated 2007 capital spending, we adjusted our 2008 capital expenditures to 65 million. Although the last three years, we’ve spent over 227 million on expenditures for property plant equipment and we believe we operate one of the newest fleets in the industry.

In 2008, our capital budget will be focused on expanding our service lines in existing service centers for continued growth. We’ve added 14 new service centers in the last two and a half years and they are all at various stages of maturity. Many of the faster maturing service centers are requesting additional equipment to meet growing demand in the market. We will pursue these growth opportunities before contemplating new service centers and acquisitions.

At this point, I would like to turn the call back over to Dave for some additional comments.

Dave Wallace

Thanks Tom. With the challenges encountered in the fourth quarter behind us, we are excited about the opportunities ahead. We believe the long term industry fundamentals are in our favor as declining well productivity requires our customers to increase their drilling and completion activity just to maintain in growth production.

As we enter 2008, we are seeing increased demand and bit activity has rebounded since the end of the year. Most of our larger ENP customers have announced stable or increased capital budgets.

Although we expect improvements in business activity, we do expect continued pricing pressure in certain markets and will act to improve profitability even if it requires reallocating assets between bases. Some of the pricing pressure and weather related utilization softness we experienced in December carried over to January, which may impact our first quarter results. We expect revenue growth in 2008 to be driven by higher utilization across a larger fleet of an entire year as we expand our customer list to included more majors and large independents. We expect profit improvements by working diligently to obtain the permits required for installing cost saving bulk handling facilities as well as moving the mix of our services up to more profitable, super hi-tech work and operating a high performance fleet preferred by customers regardless of the business cycles.

In summary, the demand has rebounded, we are acting to improve profitability and our balance sheet remains strong to support our growth plan. We will now turn the call back over to the operator to open up the lines for Q&A.

Question-and-Answer Session

Operator

(Operator Instructions)

Your first call is from the line of Victor Marchon with RBC Capital Markets please proceed.

Victor Marchon – RBC Capital Markets

Thank you and good morning. The first question I have is just on pricing, Dave. Sequentially the sale discount increased a little bit over 1.0% in the fourth quarter, I wanted to see if you could take us through this year and how you see the discounts as you make your way through the first half of this year and into the second half?

Dave Wallace

A lot of the discounting pressure we see is still in the low-tech areas of the market and it doesn’t apply to all service lines. It is mainly simulation. We see out west in some of the shale plays as still having a little bit discount pressure. As we turn the corner in the early 2008, we’ve now re-established ourselves with our expected activity. We saw a little pricing pressure again in some of the shale areas but we see overall it’s kind of flattening out from there.

Victor Marchon – RBC Capital Markets

Is that more of a second half event or is that something you are seeing right now?

Dave Wallace

Most of it is going to be first half event. We think second half, we see that utilization versus the equipment out there is going to come back in the balance and we think that pricing will kind of level out for the second half of the year.

Victor Marchon – RBC Capital Markets

The second question was just on the issues related to the new facilities. Is that all behind you now, are we to see some of the first profitability or expected profitability’s being pushed back a little bit. All of the new facilities in the fourth quarter are generating revenue and the equipment coming to each are essentially behind the Company now?

Dave Wallace

The only one that is not generating revenue yet is Rock Springs, that’s one that we delayed a bit because of the severe winter that they get, and we will start generating revenue there in second quarter. As far as the other start up facilities, they are generating revenue, they are definitely having stronger performance over the fourth quarter and they continue to ramp up each month.

As we mentioned earlier, a good example is like Artesia, which January was equivalent to everything they did in fourth quarter. It continued to ramp up from there. We are excited about the new start-ups, they are in the higher-tech areas. Our service quality is excellent; it just takes a little while to get the customer confident and satisfaction and then once you do that, we just see activity continuing to ramp up. All those we are very excited with going into 2008.

Victor Marchon – RBC Capital Markets

Thanks and just one quick one on CAPEX, did I understand it correctly, the CAPEX number for 2008 does not include any new facilities?

Dave Wallace

No, that’s what we have based on equipment, we announced and Tom mentioned earlier is we are looking to back fill the current locations initially. That means that we haven’t ruled out new locations for 2008; we are seeing a lot of these are now starting to get the maturity point where they need more equipment especially with the gas prices looking really strong and the customer ENP budget. All these new service center that are getting to be one to two years old are saying, we need more equipment. We are going to concentrate on that first and then still look at opportunities to continue to grow our footprint.

Victor Marchon – RBC Capital Markets

All right, great, that’s what I had, thank you.

Dave Wallace

Thanks Victor.

Operator

(Operator Instructions)

Your next call is from the line of Joe Agular with Johnson Rice & Company please proceed.

Joe Agular – Johnson Rice & Company

Good morning, I guess you ended the year with 260 something thousand horsepower.

Dave Wallace

Yes, 266,000.

Joe Agular – Johnson Rice & Company

I guess, if my numbers are correct, if you look at the full year ’07 on an average, you would have been around 210,000?

Dave Wallace

We started at 153, the goal was to add about 100,000, and as Tom mentioned earlier, we saw with the Marseilles activity coming on, we saw the opportunity to pick up some extra equipment late in the year. We ramped that up to 266,000.

Joe Agular – Johnson Rice & Company

Okay, specifically when you look at ’08, you have mentioned repeatedly adding some equipment to service locations that are maturing now. Translate that into a horsepower number, if you could, for us, which level you will reach in ’08.

Dave Wallace

If you look based on the 65 million plan for currently in ’08 that relates to roughly 40,000 horsepower. One think that we are seeing that is different in the past is we can add equipment a lot quicker than we could in previous years. We just increased our budget from 50 to 65, we also see that if things continue to develop in the Marseilles and some of these other markets, the opportunity is there to continue to increase capital, add more equipment than it was it the past. Currently based on 65 million that’s roughly another 40,000 horsepower.

Joe Agular – Johnson Rice & Company

You mentioned, if I could just focus on Marseilles for a second, you mentioned that you added 30,000 horsepower there. Is that from moving from other regions or was that delivery of new equipment that you just directed there?

Dave Wallace

To get at that quick, it was combination of we added some equipment and had some extra built at the year end. Basically, we had to pull some equipment from some of the other regions just to get to the 30,000 real quick. The equipment coming online in early 2008, will help back fill some of the stuff that we pulled out of the other region. We pulled some equipment out of other regions just to get them to 30,000 real quick.

Joe Agular – Johnson Rice & Company

From an infrastructure stand point, how many service centers do you have that are close to Marseilles and could you compare that to your competition?

Dave Wallace

Really, you look at all our service centers in Appalachia, the Marseilles, it basically runs from New York down through Virginia. We have a lot of service centers in the northeast. Our infrastructure is really strong to take advantage of this growing market. It is still in an evaluation of exploratory mode. We are seeing that there are different job types being ran. In certain areas, they are running straight nitrogen, high rate nitrogen fracs, other areas they are running lower rate water fracs and the reason we moved to 30,000 horsepower is they are running high rate, higher horsepower water fracs in the northern part of the basin.

Joe Agular – Johnson Rice & Company

Okay and one more follow up on your equipment moves in/or adds. It sounds it’s sort of in your different markets you have different demands. You are mentioning service centers where your field personnel are asking for more equipment and yet there are some areas where there’s pricing pressure and could you square those two with us? It seems like if you have a need for more capacity, you have demand there that those areas should be at least on a pricing basis doing relatively better than the others, out west.

Dave Wallace

I think your question was, how do the pricing kind of compare between basins, is that…?

Joe Agular – Johnson Rice & Company

I guess that’s it, yes. Along with the adding capacity into these markets without affecting prices.

Dave Wallace

We continue to stay focused on moving the equipment into the super hi-tech markets because there is a lot less competition. We have worked really hard at expanding our fluid expertise and really our ultimate goal is to compete in the higher-tech market, which have a pricing premium and are less competitive. The new service centers that we just opened when we talk about Rock Springs, Brighton, Clinton, Oklahoma, southeast of Mexico, Artesia, all have those types of markets. The areas that we are seeing that have a little bit of pricing pressure would be like Barna Shale, Woford Shale, Fayetteville some of the shale plays. Like water, lower technology that we have had equipment in those areas. The equipment is all compatible so we are looking at it that the Barna Shale and some of these shale areas where we’ve seen continued pricing discount increases that the margins may not be quite as strong and that we may shift equipment to some of the higher tech areas as they continue to improve.

Joe Agular – Johnson Rice & Company

Okay thanks, I will follow up with some other questions later, thank you.

Dave Wallace

Thanks Joe.

Operator

There are no further questions. I would now like to turn the call (inaudible) for Dave Wallace for any closing remarks.

Dave Wallace

Thanks Latasha, again we would like to thank everyone for participating in the call today and we will look forward to talking to you next quarter. Thanks.

Operator

This concludes the presentation and you may now disconnect, good day.

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Source: Superior Well Services, Inc Q4 2007 Earnings Call Transcript
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