2008-10-21-2008-02-26-2008-03-14

Purchased 75% interest in co. with GOM assets, gaining 13.5 MMBOE.

Newly formed, Houston-based Dynamic Offshore Resources LLC has closed its acquisition of a 75% interest in SPN Resources LLC, the E&P division of oilfield-services and –equipment provider Superior Energy Services Inc., Harvey, La., (NYSE: SPN) for $165 million in cash. The acquisition is the first for Dynamic following its recent funding from Riverstone Holdings/Carlyle. SPN focuses on the Gulf of Mexico and has proved reserves of 13.7 million barrels of oil equivalent as of year-end 2007. SPN uses Superior's well-intervention expertise to increase reserves by deploying assets during Superior's off-peak periods. Superior retained the preferential rights on all service work and has entered a turnkey contract to perform well-abandonment and decommissioning work associated with the properties. It expects the after-tax cash proceeds to be approximately $130 million and expects to book a pre-tax gain of between $55- and $60 million. Superior plans to use the equity method to account for its remaining 25% interest in SPN Resources. The acquired properties include approximately 180 producing wells with net daily production of approximately 11,000 barrels of oil equivalent. The transaction includes interests in 31 offshore blocks covering approximately 100,000 net acres. More than 90% of the proved reserve value and current production come from six operated fields. Current proved reserves exceed 13.5 million barrels of oil equivalent (95% developed). Superior chairman and chief executive Terence Hall says, "This transaction unlocks the value in SPN Resources while allowing Superior Energy Services to further execute its strategy of geographic diversification. We started SPN Resources at a time when our primary focus was on growing in the Gulf of Mexico." Superior has expanded its core products and services into domestic land and international markets. "We are less dependent on the Gulf of Mexico than we were five years ago as the Gulf represents less than 45% of revenue from our core businesses (well intervention, rental tools and liftboats)." Dynamic earlier received a $450-million equity commitment from New York-based private-equity firm Riverstone Holdings and New York-based global private-equity firm The Carlyle Group. The founders and management team committed an additional $50 million for a total $500 million. Dynamic's focus is on producing properties in the Gulf of Mexico. Matt McCarroll is co-founder and chief executive. He was president of Gulf of Mexico-focused E&P Maritech Resources Inc., a subsidiary of Tetra Technologies Inc., The Woodlands, Texas, (NYSE: TTI) and founded and sold Gulf Coast-focused Augusta Petroleum Partners. Mike Moreno is co-founder. He is founder, chairman and CEO of Lafayette, La.-based oilfield-services company Moreno Group LLC, which received an equity investment from Riverstone and Carlyle in 2007. John Y. Jo is senior vice president. He was president and chief operating officer of Turnkey E&P Corp., Turkey (Toronto: TKY). McCarroll says, "Our purchase of the controlling interest in SPN Resources provides the platform to implement our strategy of investing heavily in the Gulf of Mexico shelf. The deal, when combined with the $500-million equity commitment from Riverstone Holdings and management, immediately establishes Dynamic Offshore Resources as a significant operator on the Gulf of Mexico shelf. "Unlike most acquisitions of this size, there will not be any transition period and we will immediately begin our efforts to exploit the properties and seek other acquisitions," McCarroll adds. Riverstone Holdings managing director N. John Lancaster says, "With significant capital available to exploit these properties to their fullest, Dynamic Offshore Resources is well positioned to build on this asset base with development drilling and additional acquisitions in the future. The partnership with Superior Energy and Moreno Group brings unique expertise to this venture that will benefit all parties involved going forward." The effective date is Jan. 1.