adversely impacted this segment's income from operations as a percentage of revenue. The Gulf of Mexico was the only one of our three major geographic market areas to post a decrease in revenue from the second quarter of 2008 for this segment of our business. Revenue in domestic land markets increased 7% primarily due to an increase in rentals of accommodations and stabilization equipment. Also, international revenue increased 1% due to an increase in drill pipe rentals in South America.
In our marine segment, revenue was $33.9 million and income from operations was $6.5 million. This represents a 30% increase in revenue and a 348% increase in income from operations as compared to the most recent quarter. Our utilization increased to 81% from 57% in the second quarter of 2008, which was the primary factor driving the revenue and income from operation increases. The average dayrate decreased 16% from the second quarter of 2008 largely due to a decrease in dayrates for our smaller liftboats (145-foot to 170-foot class) as well as the fact that standby rates were charged at the end of August and in early September as a result of weather-related downtime. Standby rates are typically 50% of our full dayrates.
Our results include $19.2 million of non-cash unrealized earnings and $19.9 million of non-cash unrealized losses for the third and second quarter of 2008, respectively, associated with mark-to-market changes in the value of outstanding hedging contracts put in place by SPN Resources. Our equity investments performed as expected until late August, when hurricanes forced oil and gas production to be shut-in. While approximately 50% of production was restored subsequent to the end of the third quarter, restoration of full production is not expected until the end of the year.
The volatility in the global financial markets has led to increased uncertainty regarding the outlook for the global economy. The heightened uncertainty and the possibility of a worldwide decrease in hydrocarbon demand has led to declining commodity prices, which may negatively impact our operations as these factors cause many oil and gas companies to curtail capital spending. These events have contributed to a decline in our stock price and corresponding market capitalization. Given the uncertainty in the macroeconomic environment, it is difficult to predict to what extent these events will affect our overall activity level in 2009. Our balance sheet remains healthy, and we have work that is not as sensitive to oil and gas prices including the decommissioning project announced early this year and additional work resulting from damage caused to the Gulf of Mexico energy infrastructure from this most recent hurricane season. Comparison of the Results of Operations for the Three Months Ended September 30, 2008 and 2007
For the three months ended September 30, 2008, our revenues were $490.3 million, resulting in net income of $99.9 million, or $1.22 diluted earnings per share. Included in the $23.2 million earnings from equity-method investments is a $19.2 million pre-tax gain associated with mark-to-market changes in the value of outstanding derivative contracts put in place by SPN Resources. For the three months ended September 30, 2007, revenues were $398.9 million and net income was $75.1 million, or $0.91 diluted earnings per share. Included in the results for the three months ended September 30, 2007 was a $7.5 million pre-tax gain related to the sale of a non-core rental business. Revenue for the three months ended September 30, 2008 was higher in the well intervention and rental tools segments as a result of increased production-related activity and drilling activities worldwide, recent acquisitions, work related to a large-scale decommissioning project, and continued expansion of our rental tool business. Revenue increased significantly in our marine segment due to higher utilization as a result of market conditions resulting in more work in the Gulf of Mexico. No activity was recorded in our oil and gas segment for the three months ended September 30, 2008 as we sold 75% of our interest in SPN Resources on March 14, 2008.

The following table compares our operating results for the three months ended September 30, 2008 and 2007 (in thousands). Cost of services, rentals and sales excludes depreciation, depletion, amortization and accretion for each of our four business segments. Oil and gas eliminations represent products and services provided to the oil and gas segment by our three other segments.

                                        Revenue                                          Cost of Services, Rentals and Sales
                        2008             2007            Change            2008            %            2007            %           Change

Well
Intervention         $ 319,798        $ 202,807        $ 116,991       $  168,903          53 %     $  111,775          55 %     $   57,128
Rental Tools           136,600          118,918           17,682           46,422          34 %         35,142          30 %         11,280
Marine                  33,884           26,323            7,561           21,285          63 %         13,586          52 %          7,699
Oil and Gas                  -           51,696          (51,696 )              -           -           18,954          37 %        (18,954 )
Less: Oil and
Gas Elim.                    -             (820 )            820                -           -             (820 )         -              820


Total                $ 490,282        $ 398,924        $  91,358       $  236,610          48 %     $  178,637          45 %     $   57,973

The following provides a discussion of our results on a segment basis:
Well Intervention Segment
Revenue for our well intervention segment was $319.8 million for the three months ended September 30, 2008, as compared to $202.8 million for the same period in 2007. Cost of services decreased to 53% of segment revenue for the three months ended September 30, 2008 from 55% for the same period in 2007. Our increase in revenue and profitability is primarily attributable to an increase in engineering and project management services associated with a large scale decommissioning project. We also saw an increase in our coiled tubing, electric line services and hydraulic workover and snubbing services. Accordingly, our largest geographic revenue growth in this segment came from the Gulf of Mexico, which increased 170% to approximately $196 million for the quarter ended September 30, 2008 over the same period of 2007. Rental Tools Segment
Revenue for our rental tools segment for the three months ended September 30, 2008 was $136.6 million, a 15% increase over the same period in 2007. Cost of rentals and sales percentage increased slightly to 34% of segment revenue for the three months ended September 30, 2008 from 30% for the same period of 2007. We experienced significant increases in revenue from rentals of our stabilizers and on-site accommodation units. The increases are a result of expansion of rental products through capital expenditures and increased activity in the Gulf of Mexico. Our Gulf of Mexico revenue for the rental tools segment increased 41% to approximately $47 million for the quarter ended September 30, 2008 over the same period of 2007.
Marine Segment
Our marine segment revenue for the three months ended September 30, 2008 increased 29% to $33.9 million over the same period in 2007. Our cost of services percentage increased by 11% for the three months ended September 30, 2008 from the same period in 2007 primarily due to increased liftboat maintenance costs and direct expenses. Due to the high fixed costs associated with this segment, cost of services usually does not fluctuate proportionately with revenue. The fleet's average utilization increased to approximately 81% for the third quarter of 2008 from 62% in the same period in 2007. The fleet's average dayrate decreased 17% to approximately $13,700 in the third quarter of 2008 from $16,500 in the third quarter of 2007 in spite of higher operating costs.
Oil and Gas Segment
On March 14, 2008, we sold 75% of our interest in SPN Resources for approximately $168.1 million. SPN Resources represented substantially all of our operating oil and gas segment. Subsequent to March 14, 2008, we have accounted for our remaining interest in SPN Resources using the equity-method within the oil and gas segment. Additionally, we retained preferential rights on certain service work and have a turnkey contract to

perform well abandonment and decommissioning work associated with oil and gas properties owned and operated by SPN Resources on March 14, 2008. Depreciation and Amortization
Depreciation and amortization decreased to $44.8 million in the three months ended September 30, 2008 from $49.9 million in the same period in 2007. Depreciation and amortization expense related to our well intervention and rental segments for the three months ended September 30, 2008 increased approximately $10.9 million, or 35%, from the same period in 2007. The increase in depreciation and amortization expense for these segments is primarily attributable to our 2008 and 2007 capital expenditures. Depreciation expense related to the marine segment for the three months ended September 30, 2008 increased approximately $0.9 million, or 45%, from the same period in 2007. The increase in depreciation expense for the marine segment is primarily attributable to increased utilization and the delivery of two new vessels. Due to the fact that we sold 75% of our interest in SPN Resources on March 14, 2008 and subsequently accounted for our remaining interest using the equity-method within the oil and gas segment, we did not record any depreciation, depletion and accretion for our oil and gas segment for the three months ended September 30, 2008.
General and Administrative Expenses
General and administrative expenses increased to $68.4 million for the three months ended September 30, 2008 from $57.2 million for the same period in 2007. General and administrative expense related to our well intervention and rental segments for the three months ended September 30, 2008 increased $13.0 million, or 25%, from the same period in 2007. The increase in general and administrative expense is primarily related to increased expenses associated with our geographic expansion, acquisitions, increased bonus and compensation expenses due to our improved performance and additional infrastructure to enhance our growth. General and administrative expenses remained constant at 14% of revenue for the three months ended September 30, 2008 compared to the same period in 2007.
Comparison of the Results of Operations for the Nine Months Ended September 30, 2008 and 2007
For the nine months ended September 30, 2008, our revenues were $1,389.3 million, resulting in net income of $275.9 million, or $3.36 diluted earnings per share. The results included a pre-tax gain of $40.9 million from the sale of businesses. For the nine months ended September 30, 2007, revenues were $1,158.6 million and net income was $209.2 million, or $2.53 diluted earnings per share. The results included a pre-tax gain of $7.5 million from the sale of a non-core rental tool business. Revenue was higher in the well intervention and rental tools segments as a result of increased production-related activity and drilling activities worldwide, recent acquisitions, work related to a large-scale decommissioning project, and continued expansion of our rental tool business. Revenue decreased significantly in our marine segment due to lower utilization as a result of market conditions resulting in less work in the Gulf of Mexico. Revenues and cost of sales in our oil and gas segment were significantly lower as we sold 75% of our interest in SPN Resources on March 14, 2008.

The following table compares our operating results for the nine months ended September 30, 2008 and 2007 (in thousands). Cost of services, rentals and sales excludes depreciation, depletion, amortization and accretion for each of our four business segments. Oil and gas eliminations represent products and services provided to the oil and gas segment by our three other segments.

                                           Revenue                                          Cost of Services, Rentals and Sales
                          2008               2007             Change           2008            %            2007           %           Change

Well Intervention     $   850,804        $   570,280        $ 280,524      $  462,783          54 %     $ 316,730          56 %     $ 146,053
Rental Tools              401,700            358,834           42,866         131,857          33 %       109,676          31 %        22,181
Marine                     82,964             97,351          (14,387 )        56,411          68 %        43,432          45 %        12,979
Oil and Gas                55,072            136,889          (81,817 )        12,986          24 %        55,845          41 %       (42,859 )
Less: Oil and Gas
Elim.                      (1,212 )           (4,753 )          3,541          (1,212 )         -          (4,753 )         -           3,541


Total                 $ 1,389,328        $ 1,158,601        $ 230,727      $  662,825          48 %     $ 520,930          45 %     $ 141,895

The following provides a discussion of our results on a segment basis:
Well Intervention Segment
Revenue for our well intervention segment was $850.8 million for the nine months ended September 30, 2008, as compared to $570.3 million for the same period in 2007. The cost of services and sales percentage decreased to 54% for the nine months ended September 30, 2008 from 56% for the same period of 2007. Our increase in revenue and profitability is primarily attributable to an increase in engineering and project management services associated with a large-scale decommissioning project. We also saw an increase in our coiled tubing services, electric line services and hydraulic workover and snubbing services. Our Gulf of Mexico revenue for the well intervention segment increased 103% to approximately $476 million for the nine months ended September 30, 2008 over the same period of 2007.
Rental Tools Segment
Revenue for our rental tools segment for the nine months ended September 30, 2008 was $401.7 million, a 12% increase over the same period in 2007. Cost of rentals and sales percentage increased slightly to 33% for the nine months ended September 30, 2008 from 31% for the same period of 2007. We experienced significant increases in revenue from our stabilizers and on-site accommodations. The increases are a result of expansion of rental products through capital expenditures and increased activity worldwide. Our largest geographic revenue improvements were in the Gulf of Mexico where revenue increased 24% to approximately $142 million for the nine months ended September 30, 2008 over the same period of 2007. Marine Segment
Our marine segment revenue for the nine months ended September 30, 2008 decreased 15% over the same period in 2007 to $83.0 million. Conversely, cost of services increased by 30% for the nine months ended September 30, 2008 from the same period in 2007 due to lower utilization, increased liftboat maintenance costs and higher direct costs. The increase in maintenance cost is partially due to the fact that we use periods of lower utilization as an opportunity to perform required maintenance to our liftboat fleet. Additionally, cost of services usually does not fluctuate proportionately with revenue due to the high fixed costs associated with this segment. The fleet's average utilization decreased to approximately 63% for the first nine months of 2008 from 71% in the same period in 2007. The fleet's average dayrate decreased 15% to approximately $15,100 for the first nine months of 2008 from $17,700 in the same period of 2007 in spite of higher operating costs. Oil and Gas Segment
During the nine months ended September 30, 2008, we sold 75% of our interest in SPN Resources for approximately $168.1 million and recorded a pre-tax gain on sale of this business of approximately $37.1 million. SPN Resources represented substantially all of our operating oil and gas segment. Subsequent to the sale of our interest on March 14, 2008, we have accounted for our remaining interest in SPN Resources using the equity-

method within the oil and gas segment. Additionally, we retained preferential rights on certain service work and have a turnkey contract to perform well abandonment and decommissioning work associated with oil and gas properties owned and operated by SPN Resources on March 14, 2008.
Oil and gas revenues were $55.1 million in the two and one-half months ended March 14, 2008, as compared to $136.9 million for the nine months ended September 30, 2007. For the two and one-half months ended March 14, 2008, production was approximately 793,000 boe, as compared to approximately 2,480,000 boe for the nine months ended September 30, 2007. Cost of sales percentage decreased significantly to 24% for the two and one-half months ended March 14, 2008 from 41% for nine months ended September 30, 2007 due to an increase in commodity prices coupled with higher production. Depreciation, Depletion, Amortization and Accretion Depreciation, depletion, amortization and accretion decreased slightly to $128.7 million for the nine months ended September 30, 2008 as compared to $134.0 million in the same period in 2007. Depreciation and amortization expense related to our well intervention and rental segments for the nine months ended September 30, 2008 increased $34.0 million, or 40%, from the same period in 2007. The increase in depreciation and amortization expense for these segments is primarily attributable to our 2008 and 2007 capital expenditures. Depreciation expense related to the marine segment for the nine months ended September 30, 2008 increased approximately $1.0 million, or 15%, from the same period in 2007. The increase in depreciation expense for the marine segment is primarily attributable to the delivery of two new vessels. Depreciation, depletion and accretion for our oil and gas segment decreased $40.2 million, or 93%, in the nine months ended September 30, 2008 as compared to the same period in 2007. As a result of the sale of our 75% interest in SPN Resources on March 14, 2008, we ceased the depreciation, depletion and accretion for this segment when these assets were identified as available for sale in January 2008. Subsequent to the sale, we accounted for our remaining interest using the equity-method within the oil and gas segment. General and Administrative Expenses
General and administrative expenses increased to $204.4 million for the nine months ended September 30, 2008 from $161.8 million for the same period in 2007. General and administrative expense related to our well intervention and rental segments for the nine months ended September 30, 2008 increased $40.2 million, or 27%, from the same period in 2007. The increase in general and administrative expense is primarily related to increased expenses associated with our geographic expansion, acquisitions, increased bonus and compensation expenses due to our improved performance and additional infrastructure to enhance our growth. General and administrative expenses increased slightly to 15% of revenue for the nine months ended September 30, 2008 from 14% for the same period in 2007.
Liquidity and Capital Resources
The recent and unprecedented disruption in the current credit markets has had a significant adverse impact on a number of financial institutions. At this point in time, our liquidity has not been impacted by the current credit environment. We will continue to closely monitor our liquidity and the overall health of the credit markets. However, we cannot predict with any certainty the impact of any further disruption in the credit environment.
In the nine months ended September 30, 2008, we generated net cash from operating activities of $306.5 million as compared to $385.1 million in the same period of 2007. Our primary liquidity needs are for working capital, capital expenditures, debt service and acquisitions. Our primary sources of liquidity are cash flows from operations and available borrowings under our revolving credit facility. We had cash and cash equivalents of $128.2 million at September 30, 2008 compared to $51.6 million at December 31, 2007. We made $324.3 million of capital expenditures during the nine months ended September 30, 2008. Approximately $145.9 million was used to expand and maintain our rental tool equipment inventory, approximately $47.6 million was spent on our marine segment and approximately $107.9 million was used to expand and maintain the asset base of our well intervention segment.

During the nine months ended September 30, 2008, we sold 75% of our interest in SPN Resources for approximately $168.1 million. In connection with the disposition of our controlling interest in SPN Resources, we retained performance guarantees related to SPN Resources' decommissioning liabilities. Additionally, we retained preferential rights on certain service work and entered into a turnkey contract to perform well abandonment and decommissioning work associated with oil and gas properties owned and operated by SPN Resources at the closing. The turnkey contract covers only routine end of life well abandonment and pipeline and platform decommissioning for properties owned and operated by SPN Resources at the date of closing and has a remaining fixed price of approximately $147.4 million as of September 30, 2008. The turnkey contract consists of numerous, separate billable jobs estimated to be performed between 2008 and 2022. During the nine months ended September 30, 2008, we received $17.0 million from SPN Resources as a cash distribution.
In connection with the sale of assets of a non-core rental tool business in August 2007 and certain conditions being met during the nine months ended September 30, 2008, we received approximately $6.0 million of additional cash consideration, which resulted in an additional pre-tax gain on sale of business of approximately $3.3 million.
In April 2008, we contracted to purchase a 50% interest in four 265-foot liftboats for approximately $52 million with scheduled delivery dates through 2010. Through September 30, 2008, we have spent approximately $36.2 million for our 50% interest in these liftboats.
We currently believe that we will spend approximately $130 to $140 million of . . .