Nine Months Ended September 30,
                                                   2009                    2008

        Revenues:
        Well servicing                     $   123.6          31 %   $ 266.9        35 %
        Fluid services                         163.8          41 %     226.6        30 %
        Completion and remedial services        99.2          25 %     233.6        31 %
        Contract drilling                       11.8           3 %      31.8         4 %

        Total revenues                     $   398.4         100 %   $ 758.9       100 %

Our core businesses depend on our customers' willingness to make expenditures to produce, develop and explore for oil and gas in the United States. Industry conditions are influenced by numerous factors, such as the supply of and demand for oil and gas, domestic and worldwide economic conditions, political instability in oil producing countries and merger and divestiture activity among oil and gas producers. The volatility of the oil and gas industry, and the consequent impact on exploration and production activity, has adversely impacted, and could continue to adversely impact, the level of drilling and workover activity by some of our customers. This volatility affects the demand for our services and the price of our services.

In 2007, natural gas prices declined as an excess supply of natural gas began to develop, mainly due to moderate U.S. weather patterns. Utilization for our services declined from 2006 levels as drilling activity flattened or declined in several of our markets and new equipment entered the marketplace balancing supply and demand for our services. However, pricing for our services improved in 2007 from 2006, mainly reflecting continued increases in labor costs, and offset a portion the effect of the lower utilization of our services on our total revenues. By the middle of 2008, oil and natural gas prices reached historic highs. However, in the second half of 2008, oil and natural gas prices decreased substantially, which caused significantly lower utilization of our services in the fourth quarter of 2008. In the first half of 2009, utilization and pricing for our services continued to decline from the fourth quarter of 2008. In the third quarter of 2009, as oil prices began to increase, utilization and pricing for our services stabilized and remained near second quarter 2009 levels.
While we see continued steady improvement in oil related activity, we anticipate tough market conditions to prevail until gas driven activity increases to more fully absorb the excess service capacity in each of our markets and segments.
We derive a majority of our revenues from services supporting production from existing oil and gas operations. Demand for these production-related services, including well servicing and fluid services, tends to remain relatively stable, even in moderate oil and gas price environments, as ongoing maintenance spending is required to sustain production. As oil and gas prices fluctuate, demand for all of our services changes correspondingly as our customers must balance maintenance and capital expenditures against their available cash flows. Because our services are required to support drilling and workover activities, we are also subject to changes in capital spending by our customers as oil and gas prices increase or decrease. Adverse changes in capital markets have caused a number of oil and gas producers to reduce their capital budgets for 2009. Limitations on the availability of capital, or higher costs of capital, for financing expenditures may cause these and other oil and gas producers to make additional reductions to capital budgets in the future even if commodity prices return to historically high levels.
We believe that the most important performance measures for our lines of business are as follows:
• Well Servicing - rig hours, rig utilization rate, revenue per rig hour and segment profits as a percent of revenues;

• Fluid Services - revenue per truck and segment profits as a percent of revenues;

• Completion and Remedial Services - segment profits as a percent of revenues; and

• Contract Drilling - rig operating days, revenue per drilling day and segment profits as a percent of revenues.

Segment profits are computed as segment operating revenues less direct operating costs. These measurements provide important information to us about the activity and profitability of our lines of business. For a detailed analysis of these indicators for our company, see below in "Segment Overview." We will continue to evaluate opportunities to grow our business through selective acquisitions and internal growth initiatives. Our capital investment decisions are determined by an analysis of the projected return on capital employed for each of those alternatives, which is substantially driven by the cost to acquire existing assets from a third party, the capital required to build new equipment and the point in the oil and gas commodity price cycle. Based on these factors, we make capital investment decisions that we believe will support our long-term growth strategy. While we believe our costs of integration for prior acquisitions have been reflected in our historical results of operations, integration of acquisitions may result in unforeseen operational difficulties or require a disproportionate amount of our management's attention. As discussed below in "Liquidity and Capital Resources," we also must meet certain financial covenants in order to borrow money under our existing credit agreement to fund future acquisitions.
Selected 2008 Acquisitions
During the year 2008, we made several acquisitions that complemented our existing lines of business. These included among others:
Xterra Fishing and Rental Tools Co.
On January 28, 2008, we acquired all of the outstanding capital stock of Xterra Fishing and Rental Tools Co. ("Xterra") for total consideration of $21.5 million cash. This acquisition operates in our completion and remedial services line of business.

Azurite Services Company, Inc.
On September 26, 2008, we acquired substantially all of the operating assets of Azurite for $61.0 million in cash. This acquisition operates in our fluid services line of business.
Segment Overview
Well Servicing
During the first nine months of 2009, our well servicing segment represented 31% of our revenues. Revenue in our well servicing segment is derived from maintenance, workover, completion, and plugging and abandonment services. We provide maintenance-related services as part of the normal, periodic upkeep of producing oil and gas wells. Maintenance-related services represent a relatively consistent component of our business. Workover and completion services generate more revenue per hour than maintenance work, due to the use of auxiliary equipment, but demand for workover and completion services fluctuates more with the overall activity level in the industry.
We typically charge our customers for services on an hourly basis at rates that are determined by the type of service and equipment required, market conditions in the region in which the rig operates, the ancillary equipment provided on the rig and the necessary personnel. Depending on the type of job, we may also charge by the project or by the day. We measure our activity levels by the total number of hours worked by all of the rigs in our fleet. We monitor our fleet utilization levels, with full utilization deemed to be 55 hours per week per rig. Our fleet increased from a weighted average number of 392 rigs in the first quarter of 2008 to 414 in the third quarter of 2009 through a combination of newbuild purchases and acquisitions and other individual equipment purchases.
The following is an analysis of our well servicing operations for each of the quarters in 2008, the full year ended December 31, 2008 and the quarters ended March 31, 2009, June 30, 2009, and September 30, 2009:

                    Weighted
                     Average                        Rig                         Profits
                    Number of        Rig        Utilization     Revenue Per     Per Rig      Segment
                      Rigs          Hours          Rate          Rig Hour         Hour       Profits%
  2008:
  First Quarter          392       202,500            72.2 %     $     398      $   158         39.8 %
  Second Quarter         403       222,300            77.1 %     $     400      $   152         37.9 %
  Third Quarter          412       233,000            79.1 %     $     418      $   156         37.3 %
  Fourth Quarter         414       182,400            61.6 %     $     418      $   141         33.8 %
  Full Year              405       840,200            72.5 %     $     408      $   152         37.3 %
  2009:
  First Quarter          414       132,300            44.7 %     $     369      $    90         24.4 %
  Second Quarter         414       110,500            37.3 %     $     329      $    78         23.6 %
  Third Quarter          414       122,900            41.5 %     $     313      $    76         24.4 %

We gauge activity levels in our well servicing segment based on rig utilization rate, revenue per rig hour and segment profits per rig hour.
Rig utilization increased to 41.5% in the third quarter of 2009, compared to 37.3% in the second quarter of 2009. The increase was caused by stabilization in oil and natural gas prices during the third quarter of 2009, which caused a slight increase in demand for our services. Although there was stabilization experienced in the economy and oil and gas prices, there was still price pressure for our services, and our revenue per rig hour decreased to $313 in the third quarter of 2009 compared to $329 in the second quarter of 2009. Through our continued cost cutting measures, we were able to increase the segment profit percentage to 24.4% in the third quarter of 2009 from 23.6% in the second quarter of 2009.
Fluid Services
During the first nine months of 2009, our fluid services segment represented 41% of our revenues. Revenues in our fluid services segment are earned from the sale, transportation, storage and disposal of fluids used in the drilling, production and maintenance of oil and gas wells, and well site construction and maintenance services. The fluid services segment has a base level of business consisting of transporting and disposing of salt water produced as a by-product of the production of oil and gas. These services are necessary for our customers and generally have a stable demand but typically produce lower relative segment profits than other parts of our fluid services segment. Fluid services for completion and workover projects typically require fresh or brine water for making drilling mud, circulating fluids or frac fluids used during a job, and all of these fluids require storage tanks and hauling and disposal. Because we can provide a full complement of fluid sales, trucking, storage and disposal required on most drilling and workover projects, the add-on services associated with drilling and workover activity enable us to generate higher segment profits contributions. Revenues from

our well site construction services are derived primarily from preparing and maintaining access roads and well locations, installing small diameter gathering lines and pipelines, constructing foundations to support drilling rigs and providing maintenance services for oil and gas facilities. The higher segment profits are due to the relatively small incremental labor costs associated with providing these services in addition to our base fluid services segment. We typically price fluid services by the job, by the hour or by the quantities sold, disposed of or hauled.
The following is an analysis of our fluid services operations for each of the quarters in 2008, the full year ended December 31, 2008 and the quarters ended March 31, 2009, June 30, 2009, and September 30, 2009 (dollars in thousands):

                          Weighted                             Segment Profits
                      Average Number of      Revenue Per          Per Fluid
                        Fluid Service       Fluid Service          Service         Segment
                           Trucks               Truck               Truck          Profits%
    2008:
    First Quarter                  644        $       111       $        39           35.0 %
    Second Quarter                 663        $       109       $        36           33.1 %
    Third Quarter                  683        $       121       $        43           35.8 %
    Fourth Quarter                 804        $       111       $        42           38.1 %
    Full Year                      699        $       452       $       161           35.6 %
    2009:
    First Quarter                  814        $        80       $        25           31.4 %
    Second Quarter                 808        $        61       $        17           27.9 %
    Third Quarter                  805        $        62       $        14           22.7 %

We gauge activity levels in our fluid services segment based on revenue and segment profits per fluid service truck.
Revenue per fluid service truck remained relatively flat at $62,000 in the third quarter of 2009 compared to $61,000 in the second quarter of 2009. Segment profit percentage decreased to 22.7% in the third quarter of 2009 from 27.9% in the second quarter of 2009 which was driven by increased competitive rate pressure and higher fuel and repair and maintenance costs. Completion and Remedial Services
During the first nine months of 2009, our completion and remedial services segment represented 25% of our revenues. Revenues from our completion and remedial services segment are generally derived from a variety of services designed to stimulate oil and gas production or place cement slurry within the wellbores. Our completion and remedial services segment includes pressure pumping, cased-hole wireline services, underbalanced drilling and rental and fishing tool operations.
Our pressure pumping operations concentrate on providing lower-horsepower cementing, acidizing and fracturing services in selected markets. Our total hydraulic horsepower capacity for our pressure pumping operations was 139,000 and 134,000 at September 30, 2009 and September 30, 2008, respectively.
In this segment, we generally derive our revenues on a project-by-project basis in a competitive bidding process. Our bids are generally based on the amount and type of equipment and personnel required, with the materials consumed billed separately. During periods of decreased spending by oil and gas companies, we may be required to discount our rates to remain competitive, which would cause lower segment profits.

The following is an analysis of our completion and remedial services segment for each of the quarters in 2008, the full year ended December 31, 2008 and the quarters ended March 31, 2009, June 30, 2009, and September 30, 20009 (dollars in thousands):

                                                       Segment
                                         Revenues      Profits%
                       2008:
                       First Quarter    $  68,458         47.7 %
                       Second Quarter   $  79,579         46.4 %
                       Third Quarter    $  85,541         45.3 %
                       Fourth Quarter   $  70,748         43.0 %
                       Full Year        $ 304,326         45.6 %
                       2009:
                       First Quarter    $  37,259         30.5 %
                       Second Quarter   $  29,373         26.9 %
                       Third Quarter    $  32,592         29.1 %

We gauge the performance of our completion and remedial services segment based on the segment's operating revenues and segment profits.
The increase in completion and remedial revenue to $32.6 million in the third quarter of 2009 from $29.4 million in the second quarter of 2009 was caused by the stabilization of the economy and oil and natural gas prices in the third quarter of 2009. There was also an increase in segment profit percentage to 29.1% in the third quarter of 2009 from 26.9% in the second quarter of 2009 due to our cost cutting measures.
Contract Drilling
During the first nine months of 2009, our contract drilling segment represented 3% of our revenues. Revenues from our contract drilling segment are derived primarily from the drilling of new wells.
Within this segment, we typically charge our drilling rig customers at a "daywork" daily rate, or footage at an established rate per number of feet drilled. We measure the activity level of our drilling rigs on a weekly basis by calculating a rig utilization rate which is based on a seven day work week per rig. Our contract drilling rig fleet had a weighted average of nine rigs during the four quarters of 2008 and the first, second and third quarters of 2009.
The following is an analysis of our contract drilling segment for each of the quarters in 2008, the full year ended December 31, 2008 and the quarters ended March 31, 2009, June 30, 2009, and September 30, 2009:

                           Weighted
                            Average         Rig
                           Number of     Operating      Revenue      Profits     Segment
                             Rigs           Days        Per Day      Per Day     Profits%
         2008:
         First Quarter          9              645     $ 14,700     $ 3,800         25.7 %
         Second Quarter         9              699     $ 14,800     $ 4,000         27.2 %
         Third Quarter          9              767     $ 15,600     $ 5,600         35.6 %
         Fourth Quarter         9              666     $ 14,900     $ 5,400         36.2 %
         Full Year              9            2,777     $ 15,000     $ 4,700         31.4 %
         2009:
         First Quarter          9              248     $ 14,700     $ 1,500         10.1 %
         Second Quarter         9              314     $ 12,700     $ 2,100         16.3 %
         Third Quarter          9              391     $ 10,600     $ 2,200         20.4 %

We gauge activity levels in our drilling operations based on rig operating days, revenue per day and profits per drilling day.
The increase in segment profits to 20.4% in the third quarter of 2009 from 16.3% in the second quarter of 2009 was due primarily to the increase in rig operating days during the third quarter.

Operating Cost Overview
Our operating costs are comprised primarily of labor, including workers' compensation and health insurance, repair and maintenance, fuel and insurance. A majority of our employees are paid on an hourly basis. We also incur costs to employ personnel to sell and supervise our services and perform maintenance on our fleet. These costs are not directly tied to our level of business activity. Compensation for our administrative personnel in local operating yards and in our corporate office is accounted for as general and administrative expenses. Repair and maintenance is performed by our crews, company maintenance personnel and outside service providers. Insurance is generally a fixed cost regardless of utilization and relates to the number of rigs, trucks and other equipment in our fleet, employee payroll and safety record. Critical Accounting Policies and Estimates Our unaudited consolidated financial statements are impacted by the accounting policies used and the estimates and assumptions made by management during their preparation. A complete summary of our critical accounting policies is included in note 2 of the notes to our historical audited consolidated financial statements in our most recent annual report on Form 10-K. The following is a discussion of our critical accounting policies and estimates. Critical Accounting Policies
We have identified below accounting policies that are of particular importance in the presentation of our financial position, results of operations and cash flows and which require the application of significant judgment by management.
Property and Equipment. Property and equipment are stated at cost or at estimated fair value at acquisition date if acquired in a business combination. Expenditures for repairs and maintenance are charged to expenses as incurred. We also review the capitalization of refurbishment of workover rigs as described in note 2 of the notes to our unaudited consolidated financial statements.
Impairments. We review our assets for impairment at least annually, or whenever, in management's judgment, events or changes in circumstances indicate that the carrying amount of a long-lived asset may not be recovered over its remaining service life. Provisions for asset impairment are charged to income when the sum of the estimated future cash flows, on an undiscounted basis, is less than the assets' carrying amount. When impairment is indicated, an impairment charge is recorded based on an estimate of future cash flows on a discounted basis.
Self-Insured Risk Accruals. We are self-insured up to retention limits with regard to workers' compensation and medical and dental coverage of our employees. We generally maintain no physical property damage coverage on our workover rig fleet, with the exception of certain of our 24-hour workover rigs and newly manufactured rigs. We have deductibles per occurrence for workers' compensation and medical and dental coverage of $500,000 and $250,000 respectively. We have lower deductibles per occurrence for automobile liability and general liability. We maintain accruals in our consolidated balance sheets related to self-insurance retentions by using third-party actuarial data and historical claims history.
Revenue Recognition. We recognize revenues when the services are performed, collection of the relevant receivables is probable, persuasive evidence of the arrangement exists and the price is fixed and determinable.
Income Taxes. We recognize deferred tax assets and liabilities for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases. Deferred tax assets and liabilities are measured using statutory tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rate is recognized in the period that includes the statutory enactment date. A valuation allowance for deferred tax assets is recognized when it is more likely than not that the benefit of deferred tax assets will not be realized. Critical Accounting Estimates
The preparation of our consolidated financial statements in conformity with accounting principles generally accepted in the United States of America (GAAP) requires management to make certain estimates and assumptions. These estimates and assumptions affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities at the balance sheet date and the amounts of revenues and expenses recognized during the reporting period. We analyze our estimates based on historical experience

and various other assumptions that we believe to be reasonable under the circumstances. However, actual results could differ from such estimates. The following is a discussion of our critical accounting estimates.
Depreciation and Amortization. In order to depreciate and amortize our property and equipment and our intangible assets with finite lives, we estimate the useful lives and salvage values of these items. Our estimates may be affected by such factors as changing market conditions, technological advances in industry or changes in regulations governing the industry.
Impairment of Property and Equipment. Our impairment of property and equipment requires us to estimate undiscounted future cash flows. Actual impairment charges are recorded using an estimate of discounted future cash flows. The determination of future cash flows requires us to estimate rates and utilization in future periods and such estimates can change based on market conditions, technological advances in industry or changes in regulations governing the industry.
Impairment of Goodwill. Our goodwill is considered to have an indefinite useful economic life and is not amortized. We assess impairment of our goodwill annually as of December 31 or on an interim basis if events or circumstances indicate that the fair value of the asset has decreased below its carrying value. A two-step process is required for testing impairment. First, the fair value of each reporting unit is compared to its carrying value to determine whether an indication of impairment exists. If impairment is indicated, then the fair value of the reporting unit's goodwill is determined by allocating the unit's fair value to its assets and liabilities (including any unrecognized intangible assets) as if the reporting unit had been acquired in a business combination. The amount of impairment for goodwill is measured as the excess of its carrying value over its fair value. As of September 30, 2009, we had no goodwill recorded on our balance sheet.
Allowance for Doubtful Accounts. We estimate our allowance for doubtful accounts based on an analysis of historical collection activity and specific identification of overdue accounts. Factors that may affect this estimate include (1) changes in the financial positions of significant customers and
(2) a decline in commodity prices that could affect the entire customer base. Litigation and Self-Insured Risk Reserves. We estimate our reserves related to litigation and self-insured risk based on the facts and circumstances specific to the litigation and self-insured risk claims and our past experience with similar claims. The actual outcome of litigated and insured claims could differ significantly from estimated amounts. As discussed in "Self-Insured Risk Accruals" above with respect to our critical accounting policies, we maintain . . .