SUPERIOR ENERGY SERVICES INC, DEFM14A, 1999-06-18

SUPERIOR ENERGY SERVICES INC
DEFM14A, 1999-06-18
OIL & GAS FIELD SERVICES, NEC

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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

SCHEDULE 14A INFORMATION

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Proxy Statement Pursuant to Section 14(a) of the Securities Exchange Act of
1934

Filed by Registrant[X]
Filed by a party other than the Registrant[_]

Check the appropriate box:

[_]Preliminary Proxy Statement
[_]Confidential, for Use of the Commission Only (as permitted by Rule 14a-
6(e)(2))

[X]Definitive Proxy Statement
[_]Definitive Additional Materials
[_]Soliciting Material Pursuant to (S)240.14a-11(c) or (S)240.14a-12

Superior Energy Services, Inc.
(Name of Registrant as Specified in its Charter)

(Name of Person Filing Proxy Statement, if other than the Registrant)

Payment of Filing Fee (Check the appropriate box):

[_]No fee required

[_]Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11.

(1) Title of each class of securities to which the transaction applies: (i)
Common Stock, par value $0.001 per share of Superior Energy Services,
Inc. ("Superior"), ("Superior Common Stock") to be issued by Superior
in the transaction.

(2) Aggregate number of securities to which transaction applies:
30,321,260, being the maximum number of shares of Superior Common Stock
estimated to be issued in the transaction.

(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11: The filing fee of $1,910 is
calculated in accordance with Rule 0-11(c)(1) under the Exchange Act as
one-fiftieth of one percent of $9,547,386, which is the aggregate book
value as of March 31, 1999 of the 75,336 shares of Cardinal capital
stock (including shares issuable upon the exercise of outstanding
rights to acquire Cardinal capital stock and the $45,000,000 worth of
Cardinal capital stock to be issued as a condition to closing the
transaction) to be cancelled in the transaction.

(4) Proposed maximum aggregate value of the transaction: $9,547,386.00.

(5) Total fee paid: $1,910.

[X]Fee paid previously with preliminary materials.

[_]Check box if any part of the fee is offset as provided by Exchange Act Rule
0-11(a)(2) and identify the filing for which the offsetting fee was paid
previously. Identify the previous filing by registration statement number,
or the Form or Schedule and the date of its filing.

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SUPERIOR ENERGY SERVICES, INC.
1105 Peters Road
Harvey, Louisiana 70058
(504) 362-4321

June 18, 1999

Dear Stockholder:

You are cordially invited to attend the annual meeting of Superior Energy
Services, Inc. ("Superior"), which will be held on July 15, 1999 at 10:00 a.m.
local time at 201 St. Charles Ave., 52nd Floor, New Orleans, La.

At the annual meeting you will be asked to approve the issuance of shares of
Superior common stock pursuant to an Agreement and Plan of Merger dated as of
April 20, 1999, providing for the merger (the "Merger") of a wholly-owned
subsidiary of Superior with and into Cardinal Holding Corp. ("Cardinal"). As a
result of the Merger, Cardinal will become a wholly-owned subsidiary of
Superior.

Consummation of the Merger is subject to satisfaction of certain other
conditions, including approval by Superior stockholders of amendments to
Superior's Certificate of Incorporation and a new 1999 Stock Incentive Plan, as
well as the election by Superior stockholders of a new slate of directors.

In the materials accompanying this letter, you will find a Notice of Annual
Meeting of Stockholders, a Proxy Statement relating to the actions to be taken
by Superior stockholders at the annual meeting and a proxy card. The Proxy
Statement more fully describes the proposed Merger and includes information
about Superior and Cardinal. I urge you to read this material carefully.

Our investment banking firm, Johnson Rice & Company, L.L.C. ("Johnson
Rice"), has given us its opinion that the terms of the Merger are fair from a
financial point of view to you as a stockholder. The entire written opinion of
Johnson Rice is attached as Appendix B to this Proxy Statement. You are urged
to read the entire Johnson Rice opinion carefully.

The Superior Board of Directors has unanimously approved the Merger and the
related transactions and has determined that they are fair to and in the best
interests of Superior and its stockholders. Your Board of Directors unanimously
recommends that you vote FOR approval of the issuance of Superior common stock
pursuant to the Merger and the election of directors and other proposals
described herein.

The formal notice of the annual meeting is attached, and a form of proxy is
enclosed for your use. Whether or not you expect to attend the meeting, it is
very important that your shares be represented and it would therefore be
helpful if you would return your signed and dated proxies promptly in the
enclosed addressed, postage-paid envelope.

This Proxy Statement and the accompanying proxy card are first being mailed
to stockholders of record as of June 16, 1999, the record date, on or about
June 18, 1999.

Sincerely,

Terence E. Hall
Chairman of the Board and Chief
Executive Officer
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SUPERIOR ENERGY SERVICES, INC.
1105 Peters Road
Harvey, Louisiana 70058

NOTICE OF ANNUAL MEETING OF STOCKHOLDERS

To the Holders of Common Stock of Superior Energy Services, Inc.:

The annual meeting (the "Meeting") of stockholders of Superior Energy
Services, Inc. ("Superior") will be held at 201 St. Charles Avenue, 52nd Floor,
New Orleans, Louisiana 70170, on Thursday, July 15, 1999 at 10:00 a.m., New
Orleans time, to consider and vote on:

1. Approval of the issuance of a number of shares of Superior common stock
equal to 51% of the outstanding shares after giving effect to such
issuance, calculated on a fully diluted basis, in accordance with the
terms of an Agreement and Plan of Merger, pursuant to which a wholly-
owned subsidiary of Superior would merge (the "Merger") with and into
Cardinal Holding Corp. ("Cardinal") and Cardinal would become a wholly-
owned subsidiary of Superior;

2. The election of six directors;

3. Approval of an amendment to Superior's Certificate of Incorporation to
increase the number of authorized shares of Superior common stock from
40,000,000 to 125,000,000;

4. Approval of an amendment to Superior's Certificate of Incorporation to
regulate the ownership of the capital stock of Superior by persons who
are not citizens of the United States;

5. Approval of the Superior Energy Services, Inc. 1999 Stock Incentive
Plan; and

6. Such other business as may properly come before the Meeting or any
adjournment thereof.

YOUR VOTE IS VERY IMPORTANT. Consummation of the Merger is conditioned upon
the approval by Superior's stockholders of proposals 1 through 5 (the "Merger
Proposals") and each of proposals 2 through 5 are conditioned upon consummation
of the Merger.

The Proxy Statement, which you are encouraged to read carefully, provides
important information about the Merger and about the business of Superior and
Cardinal. In particular, you should review the sections entitled "Reasons for
the Merger" and "Recommendation of the Superior Board of Directors" under the
heading "The Merger" for the reasons why we believe the Merger is in the best
interests of Superior's stockholders.

Your Board of Directors believes that the Merger with Cardinal is in the
best interests of Superior and its stockholders and unanimously recommends that
you vote FOR approval of all of the Merger Proposals.

The Board of Directors of Superior has fixed the close of business on June
16, 1999 as the record date for the determination of stockholders entitled to
receive notice of and to vote at the Meeting or any adjournment or postponement
thereof.

Even if you now expect to attend the Meeting, you are requested to mark,
sign, date, and return the accompanying proxy in the enclosed addressed,
postage-paid envelope. If you attend the Meeting, you may vote in person,
whether or not you have sent in your proxy. A proxy may be revoked at any time
prior to the voting thereof.

By Order of the Board of Directors
Carolyn Plaisance
Secretary

Harvey, Louisiana

June 18, 1999
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Where You Can Find More Information

Superior files annual, quarterly and special reports, proxy statements and
other information with the Securities and Exchange Commission (the
"Commission"). You can inspect and copy that information at the public
reference room of the Commission at 450 Fifth Street, NW, Washington, D.C.
20549. You may call the Commission at 1-800-SEC-0330 for more information
about the public reference room. The Commission also maintains an Internet
site that contains reports, proxy and information statements and other
information regarding registrants, like us, that file reports with the
Commission electronically. The Commission's Internet address is
http://www.sec.gov.

The Commission allows Superior to "incorporate by reference" the
information it files with the Commission, which means that Superior can
disclose important information to you by referring to documents on file with
the Commission. Certain information that Superior currently has on file is
incorporated by reference and is an important part of this Proxy Statement.
Certain information that Superior will file later with the Commission will
automatically update and supersede this information.

Superior incorporates by reference the following documents that it has
filed with the Commission pursuant to the Securities Exchange Act of 1934 (the
"Exchange Act"):

. Annual Report on Form 10-KSB for the fiscal year ended December 31, 1998

. Quarterly Report on Form 10-Q for the fiscal quarter ended March 31, 1999

. All documents filed by Superior with the Commission pursuant to Sections
13(a), 14 or 15(d) of the Exchange Act after the date of this Proxy
Statement and prior to the date of the Meeting

You can obtain any of the above listed documents from us or the Commission.
Documents listed above are available from us without charge, excluding all
appendices unless the appendices have been specifically incorporated by
reference into this Proxy Statement. Stockholders may request copies by
writing or telephoning us at:

Superior Energy Services, Inc.
1105 Peters Road
Harvey, Louisiana 70058
Attn: Carolyn Plaisance
Telephone: (504) 362-4321
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TABLE OF CONTENTS

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SUMMARY................................................................... 1
The Annual Meeting...................................................... 1
Purpose of the Meeting.................................................. 1
Quorum; Vote Required to Pass Proposals................................. 1
Structure and Terms of the Merger (Proposal 1).......................... 2
The Companies........................................................... 2
Effective Time of the Merger............................................ 2
Reasons for the Merger.................................................. 3
Board Recommendation.................................................... 3
Opinion of Financial Advisors........................................... 3
Other Terms and Conditions to the Merger................................ 3
Rights of Superior Stockholders; Dilution............................... 6
Appraisal Rights........................................................ 6
Accounting Treatment.................................................... 6
Federal Income Tax Consequences......................................... 6
Election of Directors (Proposal 2)...................................... 6
Amendment to Certificate of Incorporation to Increase the Number of
Authorized Shares of Superior Common Stock (Proposal 3)................ 7
Amendment to Certificate of Incorporation to Restrict Ownership by Non-
U.S. Citizens
(Proposal 4)........................................................... 7
Superior Energy Services, Inc. 1999 Stock Incentive Plan (Proposal 5)... 7
SUMMARY HISTORICAL FINANCIAL DATA SUPERIOR ENERGY SERVICES, INC......... 8
SUMMARY HISTORICAL FINANCIAL DATA CARDINAL HOLDING CORP................. 10
SUMMARY UNAUDITED PRO FORMA CONDENSED CONSOLIDATED FINANCIAL
INFORMATION............................................................ 12
COMPARATIVE PER SHARE DATA.............................................. 13
MARKET PRICES AND DIVIDENDS............................................. 14
THE ANNUAL MEETING........................................................ 15
Date and Place of the Annual Meeting.................................... 15
Purpose of the Meeting.................................................. 15
Record Date; Stockholders Entitled to Vote.............................. 15
Quorum; Vote Required................................................... 15
Solicitation, Voting and Revocability of Proxies........................ 16
THE MERGER................................................................ 17
The Merger Agreement.................................................... 17
Structure and Terms of the Merger....................................... 17
Background of the Merger................................................ 18
Reasons for the Merger.................................................. 19
Recommendation of the Superior Board of Directors....................... 20
Opinion of Financial Advisers........................................... 20
Effective Time of the Merger............................................ 23
Exchange of Stock Certificates.......................................... 23
Certain Terms of the Merger Agreement................................... 24
Hart-Scott-Rodino Clearance............................................. 27
Other Conditions to the Merger.......................................... 27
Interests of Certain Persons in the Merger.............................. 29
Conduct of Business by Cardinal and Superior Pending the Merger......... 30
No Solicitation......................................................... 31
Restrictions on the Funds............................................... 32
Amendment; Waiver; Termination.......................................... 32
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Fees and Expenses...................................................... 34
Rights of Superior Stockholders; Dilution.............................. 34
Appraisal Rights....................................................... 34
Accounting Treatment................................................... 34
Certain Federal Income Tax Consequences................................ 35
Federal Securities Law Consequences.................................... 35
Vote Required.......................................................... 35
BUSINESS OF THE COMPANIES................................................ 36
Description of Business of Superior.................................... 36
Description of Business of Cardinal.................................... 37
SELECTED CONSOLIDATED FINANCIAL DATA OF SUPERIOR ENERGY SERVICES, INC.... 42
SELECTED CONSOLIDATED FINANCIAL DATA OF CARDINAL HOLDING CORP............ 44
SUPERIOR ENERGY SERVICES, INC. UNAUDITED PRO FORMA CONDENSED CONSOLIDATED
FINANCIAL INFORMATION................................................... 46
SUPERIOR ENERGY SERVICES, INC. MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS........................... 52
Overview............................................................... 52
Comparison of the Results of Operations for the Quarters Ended March
31, 1999 and 1998..................................................... 52
Comparison of the Results of Operations for the Years Ended December
31, 1998 and 1997..................................................... 53
Comparison of the Results of Operations for the Years Ended December
31, 1997 and 1996..................................................... 54
Liquidity and Capital Resources........................................ 54
New Accounting Pronouncements.......................................... 56
Year 2000.............................................................. 56
Quantitative and Qualitative Disclosures About Market Risk............. 56
CARDINAL HOLDING CORP. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS..................................... 57
General................................................................ 57
Acquisitions........................................................... 58
Recapitalization and Refinancing....................................... 58
Results of Operations.................................................. 59
Quarter Ended March 31, 1999 Compared to Quarter Ended March 31, 1998.. 59
Year ended December 31, 1998 Compared to Year Ended December 31, 1997.. 60
Year ended December 31, 1997 Compared to Year Ended December 31, 1996.. 61
Liquidity and Capital Resources........................................ 62
Year 2000 Issues....................................................... 63
Quantitative and Qualitative Disclosures About Market Risk............. 63
ELECTION OF DIRECTORS.................................................... 65
Voting Procedure....................................................... 65
Information About Directors............................................ 65
Board Committees....................................................... 66
Director Compensation.................................................. 67
Information About Executive Officers................................... 67
PRINCIPAL STOCKHOLDERS................................................... 68
EXECUTIVE COMPENSATION................................................... 71
Summary of Executive Compensation...................................... 71
Summary Compensation Table............................................. 71
Executive Employment Agreements........................................ 71
1998 Stock Option and Stock Appreciation Right Grants.................. 73
Aggregate Option Exercises During 1998 and Option Values at Fiscal Year
End................................................................... 73
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS........................... 74
Section 16(a) Beneficial Ownership Reporting Compliance................ 74
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PROPOSED AMENDMENT TO CERTIFICATE OF INCORPORATION TO INCREASE NUMBER OF
AUTHORIZED SHARES....................................................... 75
Purposes and Effects of the Proposal................................... 75
Vote Required.......................................................... 75
PROPOSED AMENDMENT TO CERTIFICATE OF INCORPORATION TO RESTRICT OWNERSHIP
BY NON-UNITED STATES CITIZENS........................................... 76
General................................................................ 76
Background and Purpose of the Citizenship Amendment.................... 76
Description of Citizenship Amendment Provisions........................ 76
Effect of Amendment on Stockholders.................................... 78
Vote Required.......................................................... 78
PROPOSAL TO APPROVE THE SUPERIOR ENERGY SERVICES, INC. 1999 STOCK
INCENTIVE PLAN.......................................................... 79
General................................................................ 79
Purpose of the Proposal................................................ 79
Terms of the Plan...................................................... 79
Awards To Be Granted................................................... 82
Federal Income Tax Consequences of Stock Options....................... 82
Vote Required.......................................................... 83
RELATIONSHIP WITH INDEPENDENT PUBLIC ACCOUNTANTS......................... 84
STOCKHOLDER PROPOSALS.................................................... 84
INDEX TO FINANCIAL STATEMENTS............................................ F-1
APPENDIX A:Agreement and Plan of Merger.................................. A-1
APPENDIX B:Fairness Opinion of Johnson Rice & Company L.L.C.............. B-1
APPENDIX C:Authorized Share Amendment.................................... C-1
APPENDIX D:Citizenship Amendment......................................... D-1
APPENDIX E:Superior Energy Services, Inc. 1999 Stock Incentive Plan...... E-1
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SUMMARY

This summary is not a complete statement of all of the features or effects
of the proposals to be voted upon at the Meeting. This summary is qualified in
its entirety by the more detailed information contained in this Proxy Statement
and the Appendices attached hereto.

The Annual Meeting

The annual meeting (the "Meeting") of Superior Energy Services, Inc., a
Delaware corporation ("Superior"), will be held at 201 St. Charles Avenue, 52nd
Floor, New Orleans, Louisiana 70170, on Thursday, July 15, 1999 at 10:00 a.m.,
New Orleans time. Only holders of record of shares of Superior common stock,
$.001 par value per share ("Superior Common Stock"), at the close of business
on June 16, 1999 (the "Record Date") are entitled to notice of and to vote at
the Meeting. On the Record Date, there were 28,839,523 shares of Superior
Common Stock issued and outstanding, with each share entitled to cast one vote
with respect to each matter properly presented at the Meeting.

Purpose of the Meeting

At the Meeting, holders of Superior Common Stock will be asked to:

1. Approve the issuance of a number of shares of Superior Common Stock
equal to 51% of the outstanding shares after giving effect to such
issuance, calculated on a fully diluted basis (the "Share Issuance") in
accordance with the terms of an Agreement and Plan of Merger (the
"Merger Agreement"), pursuant to which a wholly-owned subsidiary of
Superior would merge (the "Merger") with and into Cardinal Holding Corp.
("Cardinal") and Cardinal would become a wholly-owned subsidiary of
Superior;

2. Elect six directors;

3. Approve an amendment to Superior's Certificate of Incorporation to
increase the number of authorized shares of Superior Common Stock from
40,000,000 to 125,000,000;

4. Approve an amendment to Superior's Certificate of Incorporation to
regulate the ownership of the capital stock of Superior by persons who
are not citizens of the United States; and

5. Approve the Superior Energy Services, Inc. 1999 Stock Incentive Plan
(the "Plan").

Quorum; Vote Required to Pass Proposals

The presence, in person or by proxy, of a majority of the outstanding shares
of Superior Common Stock entitled to vote is necessary to constitute a quorum.
Stockholders voting, or abstaining from voting, on any issue will be counted as
present for purposes of constituting a quorum.

Under the Delaware General Corporation Law ("DGCL"), neither the Merger
Agreement nor the Shares Issuance is required to be approved by Superior's
stockholders. However, the rules of the Nasdaq National Market, upon which the
Superior Common Stock is traded, require that the Share Issuance be submitted
to the Superior stockholders and be approved by at least a majority of the
votes cast on the proposal.

The approval of each of the proposed amendments to Superior's Certificate of
Incorporation requires the affirmative vote of the holders of at least a
majority of the outstanding shares of Superior Common Stock. Approval of the
Plan requires the affirmative vote of holders of at least a majority of the
shares of Superior Common Stock present, in person or by proxy, at the Meeting.
Superior directors will be elected by a plurality of the votes cast at the
Meeting.

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An abstention will have no effect on the approval of the Share Issuance or
the election of directors, but will have the effect of a vote against each of
the other proposals. If brokers do not receive instructions from beneficial
owners as to the granting or withholding of proxies and may not or do not
exercise discretionary power to grant a proxy with respect to such shares (a
"broker non-vote") on the proposals, shares not voted on such proposals, other
than the election of directors, as a result will be counted as not present and
not cast with respect to the proposals. Thus, broker non-votes will have no
effect on the Share Issuance or the proposal to approve the Plan, but will have
the effect of a vote against the proposals to amend Superior's Certificate of
Incorporation.

Structure and Terms of the Merger (Proposal 1)

On April 20, 1999, Superior, Superior Cardinal Acquisition Company, Inc., a
wholly-owned subsidiary of Superior, Cardinal and two major stockholders of
Cardinal, First Reserve Fund VII, Limited Partnership and First Reserve Fund
VIII, L.P. (the "Funds"), entered into the Merger Agreement, pursuant to which
the wholly-owned subsidiary of Superior would be merged with and into Cardinal
and Cardinal would become a wholly-owned subsidiary of Superior. The terms of
the Merger Agreement provide that at the Effective Time (as defined below) of
the Merger, all of the outstanding shares of Cardinal capital stock will be
converted into the right to receive, in the aggregate, a number of shares of
Superior Common Stock (the "Merger Shares") equal to 51% (the "Exchange
Percentage") of the then outstanding Superior Common Stock after giving effect
to such issuance, calculated on a fully diluted basis.

The number of shares of Superior Common Stock that will be issued upon
consummation of the Merger will be calculated based on the number of shares of
Superior Common Stock that will be used by Superior to calculate its fully
diluted earnings per share in accordance with generally accepted accounting
principles ("GAAP") for its fiscal quarter ending June 30, 1999. If this
calculation were made as of March 31, 1999, the average price for Superior
Common Stock was $2.75, the number of issued and outstanding shares of Superior
Common Stock was 28,792,523, and the number of fully diluted shares of Superior
Common Stock was 28,822,296. Thus, 29,998,716 shares of Superior Common Stock
(51% of the sum of the fully diluted shares and the number of shares issued in
the Merger) would be issued to Cardinal stockholders upon consummation of the
Merger, or 51% of the shares of Superior Common Stock actually issued and
outstanding after giving effect to the Merger. See "The Merger--Structure and
Terms of the Merger" and "--Effective Time of the Merger."

The Companies

Superior provides oil tool rentals, well plug and abandonment services, and
other specialized products and services to oil companies operating in the Gulf
of Mexico and Gulf Coast land regions. Superior is located at 1105 Peters Road,
Harvey, Louisiana 70058, telephone (504) 362-4321. See "Business of the
Companies--Description of the Business of Superior."

Cardinal provides liftboat rentals and other production related services,
including mechanical wireline services and plug and abandonment services to oil
companies operating in the Gulf of Mexico. Cardinal's principal place of
business is located at 3703 South Lewis Street, New Iberia, Louisiana 70560,
telephone (318) 364-4545. See "Business of the Companies--Description of the
Business of Cardinal."

Effective Time of the Merger

The Merger will become effective at the time (the "Effective Time") and on
the date (the "Effective Date") the Certificate of Merger is filed with the
Secretary of State of Delaware. Unless Superior and Cardinal otherwise agree,
the Merger will be consummated as soon as possible after all stockholder
approvals described in this Proxy Statement have been obtained and the other
conditions to the Merger have been satisfied or waived (the "Closing Date").
See "The Merger--Hart-Scott-Rodino Clearance" and "--Other Conditions to the
Merger."

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Reasons for the Merger

Superior's Board believes the terms of the Merger are fair to and in the
best interests of Superior and its stockholders. The Board believes the Merger
will provide Superior with a means of achieving certain long-term financial
and strategic objectives, and believes the Merger offers various synergistic
opportunities, including the ability to: (i) achieve broader penetration in
the well life cycle by bundling product and service offerings; (ii) become a
market leader in the well service market through the combination of Cardinal's
and Superior's well service operations; (iii) reduce corporate and field
operating costs as a percentage of revenue; (iv) expand internationally given
the increased size of the combined company; and (v) increase revenues and
market share by capitalizing on cross-marketing opportunities. See "The
Merger--Background of the Merger," "--Reasons for the Merger" and "--
Recommendation of the Superior Board of Directors."

Board Recommendation

Superior's Board of Directors believes that the Merger is in the best
interests of Superior and its stockholders and recommends that stockholders
vote in favor of the Share Issuance and the related proposals (described
below) to elect directors, amend Superior's Certificate of Incorporation and
adopt the 1999 Stock Incentive Plan. The Board believes that if the Merger is
consummated, Superior will have greater prospects for future success.

Opinion of Financial Advisors

Johnson Rice & Company, L.L.C. ("Johnson Rice") was retained by Superior to
provide a fairness opinion in connection with the Merger. On April 13, 1999
Johnson Rice rendered its oral opinion to the Superior Board, later confirmed
in writing on April 16, 1999 and updated on June 17, 1999, that as of such
dates and based upon factors and assumptions set forth therein, the Exchange
Percentage was fair from a financial point of view to holders of Superior
Common Stock. In rendering its opinion, Johnson Rice took into account that
the consideration to be paid to Cardinal stockholders in connection with the
Merger was determined through arms'-length negotiations between Cardinal and
Superior. Superior has agreed to pay Johnson Rice a fee for its fairness
opinion and related advisory services of $1,200,000 payable upon the
consummation of the Merger. Superior has also agreed to reimburse Johnson Rice
for its expenses related to the engagement and to indemnify Johnson Rice and
its affiliates against certain liabilities and expenses, including liabilities
under federal securities laws in connection with Johnson Rice's engagement.
The full text of the Johnson Rice letter is attached to this Proxy Statement
as Appendix B. See "The Merger--Opinion of Financial Advisers."

Other Terms and Conditions to the Merger

In addition to the foregoing, the Merger Agreement contains certain other
terms and conditions, including:

Equity Contribution. In March 1999, Cardinal completed an offering of $5
million of equity to the current holders of Cardinal capital stock, and the
consummation of the Merger is conditioned upon Cardinal's completion of a
private placement of an additional $45 million of equity to the current
holders of Cardinal capital stock or other institutional investors, the net
proceeds of which will be used to reduce Cardinal's indebtedness upon
consummation of the Merger. Cardinal has received commitments from its
existing stockholders to subscribe for the entire amount of the offering. See
"The Merger--Certain Terms of the Merger Agreement--Equity Contribution."

Financing. Under the terms of the Merger Agreement, prior to the
consummation of the Merger, Superior must obtain a new credit facility, which
may be in the form of an offering of senior notes, or secured or unsecured
bank debt, or any other form reasonably satisfactory to Superior and Cardinal,
containing usual and customary covenants, and on terms that are mutually
agreed upon by Superior and Cardinal, in a principal

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amount (the "Financing") that will produce proceeds sufficient to repay or
refinance certain existing indebtedness of both Cardinal and Superior. The
completion of the Financing is a condition to the consummation of the Merger.
As of the date of this Proxy Statement, Superior has accepted an indication of
interest from a lender for the Financing and is proceeding to assist the lender
in completing its review and documenting the Financing. See "The Merger--
Certain Terms of the Merger Agreement--Financing."

Constitution of Superior's Board; Stockholders' Agreement. The Merger
Agreement requires Superior's Board to nominate a slate of directors to be
elected at the Meeting, consisting of (i) two individuals designated by
Superior, one of whom is Superior's Chief Executive Officer, (ii) two
individuals designated by Cardinal, and (iii) two individuals who are
independent of both Superior and Cardinal, and who have been designated by
Cardinal. Accordingly, Superior's Board has nominated six individuals meeting
this criteria to replace the current board members, all of whose terms expire
at the Meeting.

As a condition to the Merger, Superior and the Funds must execute a
stockholders' agreement (the "Stockholders' Agreement") that provides, among
other things, that following the Closing Date the Board of Directors of
Superior will continue to consist of six directors nominated as provided above
(except that following the Merger the Funds, rather than Cardinal, will
designate the directors initially designated by Cardinal). However, the second
individual, other than the Chief Executive Officer, initially selected by
Superior will only be nominated for re-election at the first annual meeting of
Superior's stockholders following the Closing Date and will serve until the
expiration of his term at the second annual meeting of Superior's stockholders
following the Closing Date, at which time this board seat will be filled by an
independent director designated by a majority vote of the entire Board. The
Stockholders' Agreement also contains certain covenants pursuant to which the
Funds' ability to acquire or dispose of Superior Common Stock is restricted.
See "The Merger--Certain Terms of the Merger Agreement--Constitution of
Superior's Board Following the Merger; Stockholder's Agreement" and "Election
of Directors."

Agreement and Release. The Merger Agreement also requires that all of
Cardinal's stockholders execute an agreement and release, pursuant to which,
among other things, each stockholder releases and discharges Cardinal from any
obligations it may have under charter documents, contracts or applicable law,
waives any preemptive rights such stockholder may have, waives any appraisal
rights such stockholder may have under applicable law, agrees to terminate
certain existing agreements, and agrees to accept the Merger Shares to which
such stockholder will become entitled in accordance with the terms of the
Merger Agreement in full payment for such stockholder's shares of Cardinal
capital stock exchanged therefor. See "The Merger--Certain Terms of the Merger
Agreement--Agreement and Release."

Registration Rights Agreements. The Merger Agreement also requires Superior
to execute separate registration rights agreements with each of the Funds and
all other Cardinal stockholders. The registration rights agreement with the
Funds provides, among other things, that at any time after one year following
the Closing Date, the Funds may request that Superior file a registration
statement under the Securities Act of 1933 (the "Securities Act") for the offer
and sale of not less than 20% of the Superior Common Stock owned by the Funds
following the Merger. The registration rights agreement with the other
stockholders of Cardinal provides, among other things, that Superior will file
a shelf registration statement under the Securities Act within 90 days after
the Closing Date registering the resale from time to time of the Superior
Common Stock owned by such stockholders and maintain the effectiveness of such
registration statement for two years after the Closing Date. Both agreements
provide that the respective stockholders may include their shares on any
registration statement filed by Superior to register the offer and sale of
Superior Common Stock by Superior or other stockholders, subject to certain
limitations. See "The Merger--Certain Terms of the Merger Agreement--
Registration Rights Agreements."

Hart-Scott-Rodino Clearance. The obligations of Superior and Cardinal to
consummate the Merger are subject to the expiration or earlier termination of
the requisite waiting period under the Hart-Scott-Rodino

4
<PAGE>

Antitrust Improvements Act of 1976, as amended (the "HSR Act"). Superior and
Cardinal made their required initial filings under the HSR Act on May 27, 1999
and May 28, 1999, respectively. If not earlier terminated, the waiting period
will expire on June 27, 1999. See "The Merger--Hart-Scott-Rodino Clearance."

Other Conditions. In addition to Superior stockholder approval and HSR
clearance and the other matters discussed above, the consummation of the Merger
is also conditioned upon approval by Cardinal's stockholders of the Merger, the
receipt by Superior and Cardinal of an opinion of Jones, Walker, Waechter,
Poitevent, Carrere & Denegre, L.L.P., counsel to Superior, to the effect that
the Merger will constitute a tax-free reorganization, the receipt of any
necessary third party consents or approvals, the receipt by both parties of
customary legal opinions and other customary closing conditions. See "The
Merger--Other Conditions to the Merger."

Interests of Certain Persons in the Merger. In considering the
recommendation of Superior's Board of Directors with respect to the Merger,
Superior's stockholders should be aware that certain of the directors and
officers of Superior, Cardinal and the Funds have certain interests respecting
the Merger separate from their interests as holders of Superior Common Stock or
Cardinal capital stock, as the case may be. These include employment agreements
that will be entered into between Superior and certain Superior executive
officers and the receipt of stock options by certain of these officers and
directors pursuant to Superior's 1999 Stock Incentive Plan. Certain officers of
Cardinal will also receive employment contracts and stock options following
consummation of the Merger. In addition, two of Superior's current directors
will maintain their positions on Superior's Board and the Funds will designate
two directors to Superior's Board.

Further, the Merger Agreement provides that Superior will indemnify the
present and former officers and directors of Cardinal and its wholly-owned
subsidiary, Cardinal Services, Inc., in accordance with Cardinal's Certificate
of Incorporation, and will purchase and maintain an extension of Cardinal's
directors' and officers' liability insurance policy for the Cardinal officers
and directors. In addition, all current Cardinal employees who become employees
of Superior following the Merger will receive the same employee benefits
available to current Superior employees. See "The Merger--Interests of Certain
Persons in the Merger," "Proposal to Approve the Superior Energy Services, Inc.
1999 Stock Incentive Plan" and "Election of Directors."

Conduct of Business by the Parties Pending the Merger. Pursuant to the
Merger Agreement, each of Superior and Cardinal has agreed to use its
reasonable best efforts to preserve the goodwill of suppliers, customers and
others having business relations with it and its subsidiaries and to do nothing
knowingly to impair its ability to keep and preserve its business. See "The
Merger--Conduct of Business by Cardinal and Superior Pending the Merger."

No Solicitation. The Merger Agreement prohibits Superior, Cardinal and their
respective subsidiaries, affiliates, officers, directors, representatives and
agents from soliciting, initiating or encouraging the submission of a proposal
for an alternative sale transaction, entering into or giving any approval with
respect to any such sale transaction, or participating in any discussions or
negotiations regarding or furnishing to any person information with respect to
any proposal that constitutes, or may reasonably be expected to lead to any
such sale transaction. If the Board of either party determines in good faith,
based upon the advice of outside counsel, that it is necessary to do so in
order to comply with its fiduciary responsibilities, it may respond to an
unsolicited proposal for an alternative sale transaction, furnish information
with respect to itself to the person making such a proposal, and participate in
negotiations regarding such a proposal. Each party, in such circumstances, may
also modify or withdraw its recommendation of the Merger or recommend an
alternative sale transaction to its stockholders but only after terminating the
Merger Agreement and paying a termination fee equal to $3 million to the other
party. See "The Merger--No Solicitation."

Amendment; Waiver; Termination. The Merger Agreement may be amended at any
time upon written agreement of the parties, provided that any amendment that by
law requires approval of the stockholders of

5
<PAGE>

either party must receive such approval. The Merger Agreement may be terminated
by the parties under certain circumstances, however, if the Merger Agreement is
terminated by either party in connection with its acceptance of a competing
sale transaction, a termination fee equal to $3 million will be due to the
other party.

Moreover, if the Agreement is terminated due to (i) a breach of the other
party's representations, warranties or covenants, (ii) the withdrawal or
modification of the recommendation of the Merger by the other party's Board,
(iii) the commencement of a tender or exchange offer for the other party's
stock that is not opposed by such other party's Board, (iv) the acquisition of
30% or more of the outstanding stock of the other party, or (v) the failure of
the stockholders of the other party to approve the Merger, and within three
months of the termination, the other party enters into a written agreement for
another sale transaction and the other sale transaction is ultimately
consummated, the party entering into such other sale transaction will owe a
termination fee of $3 million to the other party. See "The Merger--Amendment;
Waiver; Termination."

Rights of Superior Stockholders; Dilution

The rights of the Superior stockholders will not be altered as a result of
the consummation of the Merger, except as those rights are affected by the
proposed amendments to Superior's Certificate of Incorporation. The Merger will
significantly dilute Superior's current stockholders. If the Merger is
completed, Superior's current stockholders will own in the aggregate 49% of the
total number of shares of Superior Common Stock then outstanding on a fully
diluted basis, with the former stockholders of Cardinal owning in the aggregate
the remaining 51%. See "Comparative Per Share Data" and "The Merger--Rights of
Superior Stockholders; Dilution."

Appraisal Rights

Superior stockholders do not have appraisal rights in connection with the
Merger. Under the DGCL, Cardinal stockholders would be entitled to appraisal
rights in connection with the Merger; however, it is a condition to the Merger
that each of the Cardinal stockholders sign an Agreement and Release in which
it affirms that it has waived any and all appraisal rights. See "The Merger--
Appraisal Rights" and "--Certain Terms of the Merger Agreement--Agreement and
Release."

Accounting Treatment

The Merger will result in the former stockholders of Cardinal owning 51% of
the outstanding shares of Superior Common Stock on a fully diluted basis. For
accounting purposes, the Merger will be treated as if Cardinal was the acquiror
(a reverse acquisition) of Superior using the purchase method of accounting.
See "The Merger--Accounting Treatment."

Federal Income Tax Consequences

Management of Superior believes that the Merger will constitute a tax-free
reorganization within the meaning of the Internal Revenue Code. The Merger is
conditioned upon the receipt of an opinion of Jones, Walker, Waechter,
Poitevent, Carrere & Denegre, L.L.P., Superior's counsel, to that effect. See
"The Merger--Certain Federal Income Tax Consequences."

Election of Directors (Proposal 2)

It is a condition to the Merger that Superior's stockholders approve the
election of the following nominees to serve as the directors of Superior for a
one-year term ending at Superior's 2000 Annual Meeting of Stockholders: (i)
William E. Macaulay and Ben A. Guill, two individuals selected by Cardinal,
(ii) Robert E. Rose and Richard A. Bachmann, two individuals selected by
Cardinal who are independent of both Cardinal and Superior, (iii) Terence E.
Hall, Superior's Chief Executive Officer and (iv) Justin L. Sullivan, a current

6
<PAGE>

Superior director. These director nominees are described in detail under
"Election of Directors." The four nominees selected by Cardinal will only take
office if the Merger is consummated. If, after the Meeting, the Merger is not
consummated for any reason, Superior will call a special meeting of
stockholders to elect substitute nominees in replacement of the four persons
selected by Cardinal. See "Election of Directors."

Amendment to Certificate of Incorporation to Increase the Number of Authorized
Shares of Superior Common Stock (Proposal 3)

Currently, Superior's Certificate of Incorporation authorizes 40,000,000
shares of Superior Common Stock, of which 28,839,523 are issued and
outstanding, and 1,649,500 are reserved for issuance upon the exercise of
outstanding stock options. Superior will be required to increase the number of
authorized shares in order to have sufficient shares available to be issued to
Cardinal's stockholders pursuant to the Merger and upon the exercise of new
options proposed to be granted under the 1999 Stock Incentive Plan. The Board
of Directors has approved an amendment to Superior's Certificate of
Incorporation increasing the number of shares of authorized Superior Common
Stock to 125,000,000 to become effective only upon consummation of the Merger.
It is a condition to the Merger that this amendment be approved by Superior's
stockholders; likewise, if the Merger is not consummated, the charter amendment
will not be effected. See "Proposed Amendment to Certificate of Incorporation
to Increase Number of Authorized Shares."

Amendment to Certificate of Incorporation to Restrict Ownership by Non-U.S.
Citizens (Proposal 4)

Cardinal currently operates vessels in United States coastwide trade, which
subjects it to the domestic stock ownership requirements of the Maritime Laws
(as defined below). In order to enable Superior to comply with the Maritime
Laws following the Merger, the Board has approved an amendment to Superior's
Certificate of Incorporation to regulate the ownership of the capital stock of
Superior by persons who are not citizens of the United States. It is a
condition to the Merger that this amendment be approved by Superior's
stockholders; likewise, if the Merger is not consummated, the charter amendment
will not be effected. See "Proposed Amendment to Certificate of Incorporation
to Restrict Ownership by Non-United States Citizens."

Superior Energy Services, Inc. 1999 Stock Incentive Plan (Proposal 5)

The Merger is also conditioned on the approval by the Superior stockholders
of the Superior Energy Services, Inc. 1999 Stock Incentive Plan (the "Plan").
The Plan has been adopted by the Board of Directors, subject to approval by the
stockholders at the Meeting.

Officers, key employees, consultants or advisers of Superior (including
officers who are also directors of Superior and including individuals who are
currently Cardinal officers, key employees, consultants or advisers) will be
eligible to receive awards ("Incentives") under the Plan when designated by the
Compensation Committee. Incentives under the Plan may be granted in any one or
a combination of the following forms: (i) incentive stock options under Section
422 of the Internal Revenue Code (the "Code") and non-qualified stock options;
(ii) restricted stock; and (iii) other stock-based awards.

Directors of Superior who are not also full-time employees of Superior (the
"Outside Directors") will automatically be granted non-qualified stock options
under the Plan upon joining the Board and on an annual basis thereafter. If the
Plan is approved by the stockholders, Superior proposes to grant non-qualified
stock options to certain officers, including persons who become officers of
Superior in connection with the Merger. See "Proposal to Approve the Superior
Energy Services, Inc. 1999 Stock Incentive Plan" and "The Merger--Interests of
Certain Persons in the Merger."

7
<PAGE>

SUMMARY HISTORICAL FINANCIAL DATA

SUPERIOR ENERGY SERVICES, INC.

(in thousands except earnings per share)

The following summary historical financial information for each of the years
ended December 31, 1996 through 1998 has been derived from Superior's audited
Consolidated Financial Statements. The summary historical financial information
for the three months ended March 31, 1999 has been derived from Superior's
unaudited interim Consolidated Financial Statements. Such unaudited interim
historical financial information reflects all adjustments (consisting only of
normally recurring accruals) which Superior's management considers necessary to
present fairly the financial information for such period. The results of
operations for the interim period are not necessarily indicative of results for
a full year. The information set forth below is qualified by reference to and
should be read in conjunction with Superior's Consolidated Financial Statements
and related notes included elsewhere in this Proxy Statement.

<TABLE>
<CAPTION>
Three
Months
Year Ended December 31, Ended
------------------------- March 31,
1996 1997 1998 1999
------- ------- ------- ---------
<S> <C> <C> <C> <C>
Statement of Operations Data(1):
Revenues................................. $23,638 $54,256 $91,334 $18,042
------- ------- ------- -------
Cost and expenses:
Cost of services....................... 11,040 23,216 43,734 7,601
Depreciation and amortization.......... 1,323 3,272 7,494 2,142
Special charges(2)..................... -- -- 13,763 --
General and administrative............. 5,531 12,530 22,921 6,149
------- ------- ------- -------
Total cost and expenses.............. 17,894 39,018 87,912 15,892
------- ------- ------- -------
Income from operations................... 5,744 15,238 3,422 2,150
Other income (expense)
Interest expense--net.................. (127) (722) (1,490) (500)
Merger termination(3).................. -- -- (2,237) --
Gain on sale of subsidiary............. -- -- 1,176 --
------- ------- ------- -------
Income before taxes...................... 5,617 14,516 871 1,650
Provisions for income taxes............ 1,685 5,061 4,979 627
------- ------- ------- -------
Net income (loss)........................ $ 3,932 $ 9,455 $(4,018) $ 1,023
======= ======= ======= =======
Income (loss) per share (diluted)........ $ .22 $ .43 $ (0.14) $ .04
======= ======= ======= =======
Weighted average shares outstanding
(diluted)............................... 17,619 21,993 28,982 28,822
======= ======= ======= =======
Balance Sheet Data (end of period):
Cash and cash equivalents................ $ 433 $ 1,902 $ 737 $ 1,131
Property, plant and equipment--net....... 9,894 51,797 76,187 76,647
Total assets............................. 28,200 118,060 131,144 124,032
Total long-term debt, including current
portion................................. 1,772 11,339 27,955 25,006
Total stockholders' equity(4)............ 20,349 88,853 82,704 83,727
</TABLE>
- --------
(1) In 1996, Superior acquired all of the outstanding common stock of two
companies for a combined $2.7 million in cash, 1.6 million shares of
Superior Common Stock, a note payable of $1.0 million and promissory notes
providing for payments of up to $0.8 million.

8
<PAGE>

In 1997, Superior acquired all of the outstanding common stock of six
companies for a combined $50.2 million in cash, 1.5 million shares of
Superior Common Stock and promissory notes providing for payments of up to
$20.6 million.
In 1998, Superior acquired all of the outstanding common stock of two
companies for a combined $3.9 million in cash. Additional consideration, if
any, will be based on a multiple of earnings, not to exceed a combined
$50.1 million.
The promissory notes and additional consideration are subject to
contingencies and were not reflected in the purchase price of the
respective acquisitions.
(2) In 1998, Superior recorded a pre-tax special charge which consisted of
$12.1 million for impairment of goodwill, $930,000 in patents and $690,000
in associated inventory as a result of obsolescence and $650,000 associated
with a reduction in employees as a result of the general decline in the
industry. The portion of the special charge related to inventory
obsolescence is included in costs of services in the consolidated statement
of operations.
(3) In 1998, Superior entered into an agreement to merge with Parker Drilling
Company ("Parker"). Superior and Parker subsequently jointly agreed to
terminate the merger. As part of the termination, Superior agreed to pay a
termination fee.
(4) Superior issued $36.9 million of Superior Common Stock in November 1997.

9
<PAGE>

SUMMARY HISTORICAL FINANCIAL DATA
CARDINAL HOLDING CORP.
(in thousands except share data)

The following summary financial data for the three years ended December 31,
1998 are derived from the audited consolidated financial statements of
Cardinal. The financial data for the three month period ended March 31, 1999
are derived from unaudited financial statements. The unaudited financial
statements include all adjustments, consisting of normal recurring accruals,
which Cardinal considers necessary for a fair presentation of the financial
position and the results of operations for this period. Operating results for
the three months ended March 31, 1999 are not necessarily indicative of the
results that may be expected for the entire year ending December 31, 1999. The
data should be read in conjunction with the consolidated financial statements,
related notes, and other financial information included herein.
<TABLE>
<CAPTION>
Year Ended December 31, Three Months
-------------------------- Ended
1996 1997 1998 March 31, 1999
------- ------- -------- --------------
<S> <C> <C> <C> <C>
Statement of Operations Data(1):
Operating Revenue................... $48,128 $63,412 $ 82,223 $18,978
Operating expenses:
Labor............................. 14,872 18,709 25,075 7,061
Maintenance....................... 4,557 4,451 4,626 1,207
Insurance......................... 2,681 2,503 3,746 734
Depreciation and amortization..... 3,509 4,207 6,118 1,810
Cost of goods sold................ 1,627 2,087 1,809 503
Other............................. 4,219 5,386 9,350 1,714
------- ------- -------- -------
Total operating expenses......... 31,465 37,343 50,724 13,029
------- ------- -------- -------
Gross profit........................ 16,663 26,069 31,499 5,949
General and administrative
expenses........................... 8,317 10,842 15,729 3,297
------- ------- -------- -------
Income from operations.............. 8,346 15,227 15,770 2,652
Other income (expense):
Interest(2)....................... (3,448) (5,464) (12,641) (3,201)
Consulting fees paid to related
party............................ (300) (1,150) -- --
Other, net........................ 2 58 (777) (2)
------- ------- -------- -------
Income (loss) before income taxes
and extraordinary loss............. 4,600 8,671 2,352 (551)
Income taxes (benefit).............. 1,706 4,350 1,149 (98)
------- ------- -------- -------
Income (loss) before extraordinary
loss(3)............................ 2,894 4,321 1,203 (453)
Extraordinary loss, net of income
tax benefit........................ -- -- (10,885) --
------- ------- -------- -------
Net income (loss)................... $ 2,894 $ 4,321 $ (9,682) $ (453)
======= ======= ======== =======
Income (loss) per share of common
stock:
Basic:
Income (loss) before extraordinary
loss............................. $ 50.61 $ 76.64 $ 21.09 $(64.53)
Extraordinary loss................ -- -- (493.71) --
------- ------- -------- -------
Net income (loss)................. $ 50.61 $ 76.64 $(472.62) $(64.53)
======= ======= ======== =======
Assuming dilution:
Income (loss) before extraordinary
loss............................. $ 47.69 $ 72.23 $ 21.09 $(64.53)
Extraordinary loss................ -- -- (493.71) --
------- ------- -------- -------
Net income (loss)................. $ 47.69 $ 72.23 $(472.62) $(64.53)
======= ======= ======== =======
Average shares outstanding:
Basic............................. 56,000 56,000 22,047 16,674
======= ======= ======== =======
Assuming dilution................. 59,420 59,420 22,047 16,674
======= ======= ======== =======
Balance Sheet Data (end of period):
Cash and cash equivalents........... $ 153 $ -- $ 421 $ 266
Property, plant and equipment--net.. 28,986 43,737 60,328 59,661
Total assets........................ 11,630 62,387 107,961 102,426
Long-term obligations............... 26,905 36,804 127,620 126,182
Total shareholder's equity
(deficiency)....................... 4,197 5,646 (39,940) (35,263)
</TABLE>

10
<PAGE>

- --------
(1) From December 1996 to March 1998 Cardinal contracted for the construction
and took delivery of three lift boats for a total price of $17.6 million.
In 1998, Cardinal purchased all of the outstanding common stock of three
companies for a combined $22.4 million in cash and $1.4 million in stock.
(2) In connection with the refinancing that occurred in October 1995, Cardinal
issued warrants to holders of its subordinated debt to purchase
approximately nine percent (on a diluted basis) of Cardinal Services,
Inc.'s nonvoting common stock at a price of $.01 per share. These warrants
allowed the warrant holders to put the warrants to Cardinal Services under
certain circumstances, including the passage of time and the occurrence of
certain capital transactions. The estimated value at the end of each year
was amortized over the earliest put date of the warrants. Interest expense
in 1996, 1997 and 1998 includes $280,000, $2,173,000 and $362,000,
respectively, related to these warrants. On February 26, 1998, Cardinal
redeemed the warrants for $13.3 million.
(3) On February 26, 1998, Cardinal completed a recapitalization which included
(i) the issuance of 10,267 shares of Class A Common Stock for $30 million,
(ii) the issuance of 10,267 shares of Class C Preferred Stock for $30
million, (iii) the redemption of 51,583 shares of Class A Common Stock for
$114.68 million, and (iv) the redemption of warrants related to 11,870
shares of Cardinal Services, Inc. nonvoting common stock in exchange for
$13.3 million (the "Recapitalization"). In addition, Cardinal refinanced
substantially all of its long-term debt (the "Refinancing"). The
Recapitalization and Refinancing were funded through the issuance of $105
million of senior secured debt, $20 million of subordinated debt which
includes $2 million accounted for as original issue discount relating to
the issuance of 350 shares of Class A Common Stock and 350 shares of Class
C Preferred Stock, and $60 million of equity investments discussed in (i)
and (ii) above. On the date of the Recapitalization and Refinancing,
Cardinal charged off $10.9 million, which included the unamortized
estimated value of the warrants of $10.5 million and unamortized debt
acquisition costs of $380,000 (net of $235,000 tax benefit).

11
<PAGE>

SUMMARY UNAUDITED PRO FORMA CONDENSED CONSOLIDATED

FINANCIAL INFORMATION

(in thousands, except per share data)

The following summary unaudited pro forma condensed consolidated financial
information combines the historical consolidated balance sheets and statements
of income of Superior and Cardinal for the fiscal year ended December 31, 1998
and the quarter ended March 31, 1999 after giving effect to the Merger. The
following is a summary of the Unaudited Pro Forma Condensed Consolidated
Financial Information appearing elsewhere in this Proxy Statement, which was
prepared using the purchase method of accounting for business combinations. The
following information is not necessarily indicative of the financial position
or operating results that would have occurred had the Merger been consummated
on the dates as of which, or at the beginning of the periods for which, the
Merger is being given effect, nor is it necessarily indicative of future
operating results or financial position.

<TABLE>
<CAPTION>
Three
Months
Year Ended Ended
December 31, March 31,
1998 1999
------------ ---------
<S> <C> <C>
Statement of Operations Data:
Revenues................................................ $189,665 $ 37,020
-------- --------
Cost and expenses:
Cost of services...................................... 97,859 18,820
Depreciation and amortization......................... 15,579 4,203
Special charges....................................... 13,763 --
General and administrative............................ 43,857 9.509
-------- --------
Total cost and expenses............................. 171,058 32,532
-------- --------
Income from operations.................................. 18,607 4,488
Other income (expense)
Interest expense--net................................. (10,851) (2,686)
Merger termination.................................... (2,237) --
Other................................................. 399 (2)
-------- --------
Income before taxes and extraordinary loss.............. 5,918 1,800
Provisions for income taxes........................... 7,569 720
-------- --------
Income (loss) before extraordinary loss................. $ (1,651) $ 1,080
======== ========
Income (loss) per share (diluted)....................... $ (.03) $ .02
======== ========
Weighted average shares outstanding (diluted)........... 58,981 58,821
======== ========
Balance Sheet Data (end of period):
Cash and cash equivalents............................... $ 1,397
Property, plant and equipment--net...................... 136,308
Total assets............................................ 257,567
Total long-term debt, including current portion......... 106,188
Total stockholders' equity.............................. 121,573
</TABLE>

12
<PAGE>

COMPARATIVE PER SHARE DATA

The following summary presents comparative historical unaudited per share
data for both Superior and Cardinal and pro forma per share information for
Superior. The pro forma amounts assume the Merger was effective as of the
commencement of the periods presented and was accounted for as a reverse
acquisition. Superior's pro forma amounts represent the combined pro forma
results of Superior and Cardinal. The data presented should be read in
conjunction with the historical financial statements and related notes thereto
included elsewhere herein or incorporated by reference herein.

<TABLE>
<CAPTION>
Three
Months
Year Ended Ended
December 31, March 31,
1998 1999
------------ ---------
<S> <C> <C>
Historical--Superior
Earnings (loss) per common share...................... $(0.14) $ 0.04
Cash Dividends per common share....................... -- --
Book Value per common share........................... 2.85 2.90

Historical--Cardinal
Earnings (loss) per common share(1)................... $21.09 $(64.53)
Cash Dividends per common share....................... -- --
Book Value per common share........................... (1.81) (2.11)

Pro Forma per common share data--Superior
Earnings (loss) per common share...................... $(0.03) $ 0.02
Cash Dividends per common share....................... -- --
Book Value per common share........................... 2.07 2.07
</TABLE>
- --------
(1) Historical earnings (loss) per common share is before the extraordinary
loss.

13
<PAGE>

MARKET PRICES AND DIVIDENDS

Superior

Superior Common Stock is traded on the Nasdaq National Market under the
symbol "SESI." The following table sets forth, for the periods indicated, the
high and low sales prices for Superior Common Stock as reported on Nasdaq
National Market.

<TABLE>
<CAPTION>
High Low
------- ------
<S> <C> <C>
Fiscal year ended December 31, 1997
First Quarter........................................... $ 4.875 $2.875
Second Quarter.......................................... 5.188 4.375
Third Quarter........................................... 9.125 5.000
Fourth Quarter.......................................... 14.313 8.875

Fiscal year ended December 31, 1998
First Quarter........................................... $10.063 $7.000
Second Quarter.......................................... 11.563 5.000
Third Quarter........................................... 5.531 3.125
Fourth Quarter.......................................... 4.375 2.500

Fiscal year ended December 31, 1999
First Quarter........................................... $ 3.688 $2.000
Second Quarter (through June 11, 1999).................. 5.500 3.000
</TABLE>

On April 20, 1999, the date preceding public announcement of the proposed
Merger, the closing sale price of Superior Common Stock was $3.875, and on June
11, 1999, the closing sale price of Superior Common Stock was $4.88. As of June
11, 1999, there were approximately 163 holders of record of Superior Common
Stock.

Superior has not declared or paid cash dividends on the Superior Common
Stock in the past and currently intends to retain earnings, if any, to meet its
working capital requirements and to finance Superior's future operation and
growth. Superior does not plan to declare or pay cash dividends to holders of
the Superior Common Stock in the foreseeable future. In addition, the terms of
Superior's bank credit facility prohibit the payment of dividends or other
distributions by Superior to its stockholders. Superior's ability to declare or
pay cash dividends is also affected by the ability of Superior's subsidiaries
to declare and pay dividends or otherwise transfer funds to Superior since
Superior conducts its operations entirely through its subsidiaries. It is
anticipated that any new credit facility obtained as part of the Financing will
contain similar limitations. Subject to such limitations, the payment of cash
dividends on the Superior Common Stock will be within the discretion of
Superior's Board of Directors and will depend upon Superior's earnings and
capital requirements, the requirements of Superior's credit arrangements and
applicable laws and other factors that are considered relevant by Superior's
Board of Directors.

Cardinal

None of the classes of Cardinal capital stock outstanding is traded on any
exchange and there is no established public trading market for such stock.
There are no bid or asked prices available for the Cardinal capital stock.
Cardinal currently does not pay cash dividends and has no plans to pay cash
dividends in the foreseeable future. In addition, the terms of Cardinal's
credit facilities restrict its ability to declare or pay cash dividends.

14
<PAGE>

THE ANNUAL MEETING

Date and Place of the Annual Meeting

This Proxy Statement is being furnished to holders of common stock, $.001
par value per share (the "Superior Common Stock"), of Superior Energy Services,
Inc., a Delaware corporation ("Superior"), in connection with the solicitation
of proxies by and on behalf of the Board of Directors of Superior for use at
the annual meeting of stockholders to be held at 201 St. Charles Avenue, 52nd
Floor, New Orleans, Louisiana 70170, on Thursday, July 15, 1999 at 10:00 a.m.,
New Orleans time (the "Meeting").

Purpose of the Meeting

At the Meeting, the holders of Superior Common Stock will consider and vote
upon the following:

1. Approval of the issuance of a number of shares of Superior Common Stock
equal to 51% of the outstanding shares after giving effect to such
issuance, calculated on a fully diluted basis (the "Share Issuance") in
accordance with the terms of an Agreement and Plan of Merger (the
"Merger Agreement"), pursuant to which a wholly-owned subsidiary of
Superior would merge (the "Merger") with and into Cardinal Holding Corp.
("Cardinal") and Cardinal would become a wholly-owned subsidiary of
Superior;

2. The election of six directors;

3. Approval of an amendment to Superior's Certificate of Incorporation to
increase the number of authorized shares of Superior Common Stock from
40,000,000 to 125,000,000 (the "Authorized Share Amendment");

4. Approval of an amendment to Superior's Certificate of Incorporation to
regulate the ownership of the capital stock of Superior by persons who
are not citizens of the United States (the "Citizenship Amendment," and
together with the Authorized Share Amendment, the "Charter Amendments");

5. Approval of the Superior Energy Services, Inc. 1999 Stock Incentive Plan
(the "Plan"); and

6. Such other business as may properly come before the Meeting or any
adjournment.

Proposals 1-5 are referred to herein as the "Merger Proposals."

Record Date; Stockholders Entitled to Vote

The Superior Board has fixed June 16, 1999 as the record date (the "Record
Date") for the determination of the stockholders of Superior entitled to notice
of and to vote at the Meeting. Only holders of record of Superior Common Stock
at the close of business on the Record Date will be entitled to notice of and
to vote at the Meeting. As of the Record Date, there were 28,839,523 shares of
Superior Common Stock outstanding and entitled to vote. Each record holder of
Superior Common Stock on the Record Date is entitled to cast one vote per
share, exercisable in person or by properly executed proxy, on the proposals
described herein and on each other matter properly submitted to a vote of the
stockholders at the Meeting.

This Proxy Statement and the accompanying proxy card are first being mailed
to stockholders of record as of the Record Date on or about June 18,1999.

Quorum; Vote Required

The presence, in person or by proxy, of a majority of the outstanding shares
of Superior Common Stock entitled to vote is necessary to constitute a quorum.
Stockholders voting, or abstaining from voting, by proxy on any issue will be
counted as present for purposes of constituting a quorum.

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Under the Delaware General Corporation Law ("DGCL"), neither the Merger
Agreement nor the Share Issuance requires the approval of Superior's
stockholders. However, the rules of the Nasdaq National Market, upon which the
Superior Common Stock is traded, require that the Share Issuance be submitted
to the stockholders of Superior and be approved by at least a majority of the
votes cast on the proposal. Superior stockholders are not entitled to appraisal
rights in connection with the Merger or the approval of the Share Issuance.

The approval of each of the proposed Charter Amendments requires the
affirmative vote of the holders of at least a majority of the outstanding
shares of Superior Common Stock. Adoption of the Plan requires the affirmative
vote of holders of at least a majority of the shares of Superior Common Stock
present, in person or by proxy, at the meeting. Superior directors will be
elected by a plurality of the votes cast at the Meeting.

Solicitation, Voting and Revocability of Proxies

In addition to solicitation by mail, proxies may be solicited by directors,
officers and employees of Superior in person or by telephone, telegram or other
means of communication. Such directors, officers and employees will not receive
any compensation in addition to their regular salary, but may be reimbursed for
reasonable out-of-pocket expenses in connection with the solicitation.
Arrangements will also be made with custodians, nominees and fiduciaries for
forwarding proxy solicitation materials to beneficial owners of Superior Common
Stock held of record by such custodians, nominees and fiduciaries, all of whom
will be reimbursed for reasonable expenses incurred in connection therewith.

All shares of Superior Common Stock that are represented at the Meeting by
duly executed proxies will be voted in accordance with the instructions
indicated thereon. If a duly executed proxy is submitted and no voting
instructions are indicated thereon, such proxy will be voted "FOR" the election
of the directors named in the proxy and "FOR" approval of the proposals to
approve the Share Issuance, each of the Charter Amendments and the Plan.

The Superior Board knows of no other matter to be presented at the Meeting,
but if any other matter is properly presented for consideration at the Meeting
(or any adjournments or postponements thereof), the persons named in the
enclosed form of proxy will have discretion to vote on such matters in
accordance with their best judgment.

A holder of Superior Common Stock may revoke a previously submitted proxy at
any time prior to its exercise at the Meeting by: (i) filing with the Corporate
Secretary of Superior at or prior to the Meeting a written revocation bearing a
later date or a duly executed later-dated proxy relating to the same shares of
Superior Common Stock; or (ii) attending the Meeting and voting in person.
Attendance at the Meeting will not in and of itself constitute a revocation of
a proxy. Any written revocation or later-dated proxy should be delivered at the
Meeting to the Corporate Secretary of Superior or before the Meeting to
Superior at 1105 Peters Road, Harvey, Louisiana 70058, Attention: Corporate
Secretary.

Holders of Superior Common Stock are requested to mark, date and sign the
enclosed proxy and return it promptly to Superior in the enclosed stamped, pre-
addressed envelope. Stockholders may vote in person at the Meeting even if they
have previously mailed a proxy. STOCKHOLDERS SHOULD NOT SEND ANY SUPERIOR STOCK
CERTIFICATES WITH THEIR PROXY CARDS.

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THE MERGER

(Proposal No. 1)

The Merger Agreement

The Merger is to be effected in accordance with the terms and conditions set
forth in the Merger Agreement, a copy of which is attached hereto as Appendix
A. The following brief description is necessarily incomplete and is qualified
in its entirety by reference to the Merger Agreement.

Structure and Terms of the Merger

On April 20, 1999, the Merger Agreement was executed by and among Superior,
Superior Cardinal Acquisition Company, Inc., a wholly-owned subsidiary of
Superior ("Superior Sub"), Cardinal, First Reserve Fund VII, Limited
Partnership and First Reserve Fund VIII, L.P. (together, the "Funds"). The
Merger Agreement provides that Superior Sub will merge with and into Cardinal
and upon consummation of the Merger, the separate existence of Superior Sub
will cease and Cardinal will become a wholly-owned subsidiary of Superior.

Cardinal currently has three classes of capital stock outstanding: Class A
Common Stock, Class B Common Stock and Class C Preferred Stock. Cardinal has
also issued to certain members of its management rights to acquire shares of
its Class A Common Stock and Class C Preferred Stock ("Management Shares" and,
together with the Class A Common Stock, Class B Common Stock and Class C
Preferred Stock, the "Cardinal Capital Stock").

Upon consummation of the Merger, all of the shares of Cardinal Capital Stock
that are then outstanding will be converted into the right to receive, in the
aggregate, a number of shares of Superior Common Stock (the "Merger Shares")
that will be equal to 51% (the "Exchange Percentage") of the outstanding
Superior Common Stock after giving effect to such issuance, calculated on a
fully diluted basis based on the number of shares of Superior Common Stock that
will be used by Superior to calculate its fully diluted earnings per share in
accordance with GAAP for its fiscal quarter ending June 30, 1999.

Under GAAP, the number of fully diluted shares of Superior Common Stock as
of June 30, 1999 will be determined by adding to the number of issued and
outstanding shares of Superior Common Stock as of June 30, 1999, a number of
shares (determined as described below) that are subject to outstanding stock
options having exercise prices equal to or less than the Average Price (as
defined herein) of the Superior Common Stock (the "In-the-Money Options"). As
used herein, the "Average Price" means the average of the closing sale prices
of Superior Common Stock for the three months ended June 30, 1999. For purposes
of the calculation, it is assumed that (i) all In-the-Money Options are
exercised, and (ii) Superior uses the proceeds of such exercise to re-purchase
shares of Superior Common Stock on the open market at the Average Price. The
number of In-the-Money Options is then reduced by the number of shares assumed
to be so re-purchased, and the remaining In-the-Money Options are added to the
number of shares of Superior Common Stock outstanding as of June 30, 1999 to
determine the fully diluted share number (the "Fully Diluted Shares"). The
number of Merger Shares that will be issued to the Cardinal stockholders upon
consummation of the Merger will be equal to 51% of the sum of the Fully Diluted
Shares as of June 30, 1999 and the number of shares issued in the Merger.

As an example, if this calculation was made as of March 31, 1999, the
average price for the three months ended March 31, 1999 was $2.75, the number
of issued and outstanding shares of Superior Common Stock was 28,792,523, the
number of In-the-Money Options was 29,773 and the number of Fully Diluted
Shares was 28,822,296. Therefore, 29,998,716 shares of Superior Common Stock
(51% of the sum of the Fully Diluted Shares and the number of shares issued in
the Merger), would have been issued to Cardinal stockholders upon consummation
of the Merger, or 51% of the shares of Superior Common Stock actually issued
and outstanding after giving effect to the Merger.

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Of the Merger Shares, 1,000,000 (subject to adjustment for any stock splits,
combinations or recapitalizations relating to the Superior Common Stock that
are effected after the date of the Merger Agreement) will be issued to the
holder of the Cardinal Class B Common Stock. The remaining Merger Shares will
be divided on an equivalent per share basis among the holders of the Cardinal
Class A Common Stock, the Class C Preferred Stock and the Management Shares,
although 892,000 of these remaining Merger Shares will be placed in escrow for
the benefit of the holder of Cardinal Class B Common Stock.

Background of the Merger

Superior has grown rapidly through internal capacity expansion and strategic
acquisitions designed to take advantage of the continued consolidation of the
oilfield service industry. Internal expansion has focused on product
development to provide cost-effective solutions to oil and gas operators
creating inherent competitive advantages. The acquisition strategy has focused
on diversification of business lines, consolidation of a highly fragmented
market and targeted strong companies with established name or brand
recognition. These strategies have established Superior as the dominant plug
and abandonment provider in the U.S. Gulf of Mexico and one of the largest
rental tool providers operating along the U.S. Gulf Coast.

From March 1998 to October 1998, Superior's management initiated a strategic
planning process to identify and determine the appropriate actions to meet its
financial and strategic goals. Among the objectives identified were to: (i)
increase its market share and revenues in both the rental tool and well service
business lines; (ii) continue to make strategic market acquisitions; (iii)
capture an extended share of the well life cycle; (iv) diversify its reliance
on the U.S. Gulf Coast activity levels; and (v) accelerate its expansion to
international markets. In connection with this review, Superior engaged Johnson
Rice & Company, L.L.C. ("Johnson Rice") as a financial advisor.

In October 1998, at the request of Mr. Guill, Messrs. Guill and Hall met to
discuss a proposal by the Funds to combine Superior's well service business
with Cardinal under Mr. Hall's management. At the meeting, Messrs. Guill and
Hall also discussed the possibility of combining their respective businesses as
a means of becoming a fully integrated provider of well service products and
services. At that time no agreement was reached and their discussions ended.

In February 1999, following the termination of the proposed merger between
Superior and Parker Drilling Company ("Parker"), Messrs. Guill, Macaulay and
Hall revisited the possibility of combining Superior and Cardinal as a means of
effectuating each company's long term strategies. After several meetings, Mr.
Guill proposed that the parties move forward regarding the proposed transaction
and suggested the general terms of a transaction pursuant to which Cardinal
stockholders would receive in the aggregate 54% of the outstanding Superior
Common Stock after giving effect to the transaction on a fully diluted basis.
He also proposed that Cardinal would seek an additional equity contribution of
$50 million in order to enhance the long-term growth prospects of the company
by adding financial flexibility, and also outlined the need for a
recapitalization of the combined company's debt into a long-term, largely
interest-only public or private facility with a mutually acceptable cost of
capital. Cardinal received $5 million of this additional equity contribution
prior to the execution of the Merger Agreement.

From March 1, 1999, through April 5, 1999, representatives of Superior and
Cardinal and their respective legal, financial and accounting advisors
participated in various meetings in which the terms of the Merger Agreement
were negotiated and legal and business information concerning the companies was
exchanged. Messrs. Guill and Hall also met on March 31 and adjusted the
percentage ownership of the combined company that Cardinal stockholders would
receive in the Merger to 51% on a fully diluted basis. During this period the
Superior Board and other key members of management met with Johnson Rice on
several occasions to discuss the terms of the Merger and its impacts on both
businesses.

On April 13, 1999, the Superior Board met to review the final terms of the
proposed Merger. At this meeting, representatives of Jones, Walker, Waechter,
Poitevent, Carrere & Denegre, L.L.P., Superior's counsel,

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discussed with Superior the terms of the Merger Agreement. Representatives of
Johnson Rice also provided to the Superior Board a review of the proposed
Merger from a financial point of view and provided an oral opinion (which was
confirmed in writing on April 16, 1999 and updated on June 17, 1999) that the
Exchange Percentage pursuant to the Merger Agreement was fair from a financial
point of view, to holders of Superior Common Stock. Mr. Hall also discussed
with the Superior Board the strategic merits and benefits of the proposed
Merger. After discussion, the directors unanimously approved the Merger
Agreement and approved a resolution recommending that the stockholders of
Superior approve the Share Issuance in connection with the Merger Agreement.

On April 15, 1999, the Cardinal Board met and approved the Merger. On April
20, 1999 the Merger Agreement was executed, and a public announcement of the
transaction was made after the close of business on April 20, 1999.

Reasons for the Merger

Superior's Board believes the terms of the Merger are fair to and in the
best interests of Superior and its stockholders. The Superior Board views the
Merger as a means of achieving the long-term financial and strategic objectives
previously identified and believes the Merger offers various synergistic
opportunities, including the ability to: (i) achieve broader penetration in the
well life cycle by bundling product and service offerings; (ii) become a market
leader in the well service market through the combination of Cardinal's and
Superior's well service operations; (iii) reduce corporate and field operating
costs as a percentage of revenue; (iv) expand internationally given the
increased size of the combined company; and (v) increase revenues and market
share by capitalizing on cross-marketing opportunities.

In reaching its conclusion to approve the Merger, the Superior Board also
considered the following factors:

. Information regarding the financial performance and condition, business
operations and prospects of each Superior and Cardinal, and Superior's
future performance and prospects as a separate entity and on a combined
basis with Cardinal.

. Current industry and economic conditions and how they relate to business
combinations or strategic alliances in the oil and gas industry.

. Recent and historical prices of Superior Common Stock.

. The structure of the transaction and terms of the Merger Agreement and
the Exchange Percentage, which were the result of arm's-length
negotiations between Superior and Cardinal.

. The financial analysis provided by Johnson Rice, which is described
below.

. Consolidation benefits that would be available to the combined entity,
primarily in the form of revenue enhancement, associated margin
improvements and corporate cost reductions.

. The advantages of becoming affiliated with the Funds, including the
expectation of increased analyst coverage of the Superior Common Stock.

. The terms of the Merger Agreement permit the Superior Board, in the
exercise of its fiduciary duties and subject to certain conditions, to
terminate the Merger Agreement if the Superior Board receives a takeover
proposal which the Superior Board deems to be a superior transaction,
upon payment by Superior to Cardinal of a termination fee of $3 million.
The Superior Board did not view the termination fee provision of the
Merger Agreement as an unreasonable impediment to any interested third
party proposing a superior transaction.

. The expectation that Cardinal's stockholders will be able to receive
Superior Common Stock free of immediate U.S. federal income tax impacts.

. The likelihood that the Merger would be consummated.

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. Opportunities for Superior's employees in the combined entity upon
consummation of the Merger.

In determining that the Merger was fair and in the best interests of
Superior's stockholders, the Superior Board considered the factors listed above
without assigning any particular or relative weighting to such factors. The
Superior Board believes that the combination will allow Superior stockholders
to participate in a combined entity that will have greater business and
financial resources than Superior would have absent the Merger.

Recommendation of the Superior Board of Directors

After careful consideration, the Superior Board has determined that the
Merger is advisable and in the best interests of its stockholders, has
unanimously approved the Merger Agreement and the Merger and recommends that
holders of shares of Superior Common Stock vote "FOR" approval of the Share
Issuance.

Opinion of Financial Advisers

Johnson Rice was retained by Superior to provide a fairness opinion in
connection with the Merger (the "Fairness Opinion"). On April 13, 1999, Johnson
Rice rendered its oral opinion to the Superior Board, later confirmed in
writing on April 16, 1999 and updated on June 17, 1999, that as of such dates
and based upon the factors and assumptions set forth therein, the Exchange
Percentage was fair from a financial point of view to holders of Superior
Common Stock. In rendering its opinion, Johnson Rice took into account that the
consideration to be paid to the holders of Cardinal Capital Stock in connection
with the Merger was determined through arms'-length negotiations between
Cardinal and Superior. A copy of the Fairness Opinion is attached hereto as
Appendix B. Superior stockholders are urged to read the Fairness Opinion in its
entirety for an explanation of the assumptions made, matters considered and
limits of the review made by Johnson Rice.

The following summary does not purport to be a complete description of the
analyses supporting the Fairness Opinion or the presentation made by Johnson
Rice to the Superior Board. The preparation of a fairness opinion is a complex
process of involving various determinations as to the most relevant and
appropriate methods of financial analysis and the application of those methods
to the particular circumstances and, therefore, such opinion is not readily
susceptible to partial analysis. In arriving at its opinion, Johnson Rice did
not assign any particular weighting to any of the factors considered, but
rather made qualitative judgements as to the relevance or significance of each
factor. Accordingly, Johnson Rice believes that the analyses must be considered
as a whole and that selecting portions of the analyses without considering the
analyses as a whole, would create an incomplete view to the process underlying
the Fairness Opinion.

For purpose of the analyses, Johnson Rice made many assumptions with respect
to the industry performance, general business, economic, market and financial
conditions and other matters beyond the control of Johnson Rice. Actual
conditions may differ significantly from those assumed. Accordingly, such
analyses and estimates are inherently subject to substantial uncertainty. In
addition, the Fairness Opinion was among several factors taken into
consideration by the Superior Board in making its decision to approve the
Merger Agreement. Consequently, the Johnson Rice analyses described below
should not be viewed as the determinative factor of the decision of the
Superior Board with respect to the fairness of the Exchange Percentage.

In arriving at its opinion Johnson Rice among other things, (i) reviewed
certain publicly available business and financial information relating to
Superior and Cardinal that Johnson Rice deemed to be relevant; (ii) reviewed
certain financial information provided by the management of both Superior and
Cardinal relating to the business, earnings, cash flow, assets, liabilities and
prospects of Superior and Cardinal, as well as synergies and impacts from the
Merger; (iii) reviewed available securities analysts' models regarding the
earnings and cash flow estimates for Superior for 1999 and 2000; (iv) conducted
discussions with members of senior management of Superior and Cardinal
concerning information provided in clauses (i), (ii) and (iii) above, as well
as their respective businesses and outlook before and after giving effect to
the Merger; (v) reviewed market prices and valuation multiples of Superior
Common Stock and compared them to other public

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companies deemed to be relevant by Johnson Rice; (vi) reviewed the potential
pro forma impact of the Merger on Superior's earnings per share, cash flow,
consolidated capitalization and financial ratios; (vii) reviewed the reported
prices and trading activity of Superior Common Stock; (viii) reviewed the
financial terms of other comparable mergers; (ix) reviewed the Merger Agreement
and related documents; (x) participated in certain discussions and negotiations
among representatives of Superior, Cardinal and their financial and legal
advisors; and (xi) reviewed such other financial studies and analyses and took
into account such other matters as deemed relevant by Johnson Rice.

In preparing its opinion, Johnson Rice assumed and relied upon the accuracy
and completeness of all information supplied or otherwise made available to
Johnson Rice, discussed with or reviewed by or for Johnson Rice, or publicly
available, and Johnson Rice did not assume any responsibility for independently
verifying such information. Johnson Rice did not undertake an independent
evaluation or appraisal of any of the assets or liabilities of Superior or
Cardinal and was not furnished with any such appraisal or evaluation. In
addition, Johnson Rice did not assume the responsibility to conduct any
physical inspection of the properties, facilities or equipment of Superior or
Cardinal. With respect to the financial forecasts provided to or discussed with
Johnson Rice by Superior or Cardinal, Johnson Rice assumed that they had been
reasonably prepared and reflected the best currently available estimates and
judgment of the management of Superior and Cardinal, respectively, as to the
expected future financial performance of Superior or Cardinal. Johnson Rice
further assumed that the Merger would be accounted for as a purchase under GAAP
and that it would qualify as a tax-free reorganization for U.S. federal income
tax purposes.

The Fairness Opinion is necessarily based upon market, economic and other
conditions as they existed and could be evaluated on the date of such opinions.
Johnson Rice was not authorized by Superior or the Superior Board to solicit,
nor did it solicit, third-party indications of interest for the acquisition of
all or any part of Superior. Johnson Rice did not express an opinion regarding
the value that would be realized upon the sale or liquidation of Superior, and
the Fairness Opinion does not address the relative merits of the Merger
compared to any alternative business combination transaction that might be
available to Superior. In addition, Johnson Rice was not asked to consider, and
the Fairness Opinion does not in any manner, address the price at which
Superior shares would actually trade following the consummation of the Merger.

Both Superior and Cardinal provided Johnson Rice with certain financial
information regarding their respective financial performance to develop
estimates of future performance. Johnson Rice also utilized certain models
available from various securities analysts to develop a two-year financial
forecast for the two-year period ending December 31, 1999 and December 31, 2000
for both Superior and Cardinal. Johnson Rice relied upon the information
available and provided by Superior and Cardinal in performing their analyses
and preparing the Fairness Opinion.

The following is a brief summary of selected analyses presented to the
Superior Board by Johnson Rice in connection with the delivery of the Fairness
Opinion.

Discounted Cash Flow Analysis. Employing certain data supplied by Superior
and reviewed by Cardinal, estimates of future industry trends based on current
market conditions and certain qualitative factors deemed to be reasonable by
Johnson Rice, a discounted cash flow analysis of Superior was prepared to
determine the present value of unleveraged free cash flows during the period
from January 1, 1999 to December 31, 2003.

Employing certain data supplied by Cardinal and reviewed by Superior,
estimates of future industry trends based on current market conditions and
certain qualitative factors deemed to be reasonable by Johnson Rice, a
discounted cash flow analysis of Cardinal was prepared to determine the present
value of unleveraged free cash flows during the period from January 1, 1999 to
December 31, 2003.

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The estimated future cash flows were discounted at an average rate of 14%
and terminal multiples in the range of 6.0x to 7.0x were employed. These
calculations provided a reference equity value range for Cardinal of $110.6
million to $132.8 million. Using a Superior share price of $3.38, the purchase
of Cardinal at the implied range of values determined in the discounted cash
flow analysis would require the issuance of between 32.5 million to 39.0
million shares of Superior Common Stock based on the fully diluted share count
corresponding to the $3.38 share price. It is anticipated that the number of
shares of Superior Common Stock to be issued pursuant to the Merger will be
below this range.

Comparable Public Company Analysis. As part of its analysis, Johnson Rice
compared certain financial information of Superior and Cardinal with that of a
group of selected oilfield services companies deemed relevant by Johnson Rice.
Both companies were compared to several offshore construction and well
service/workover companies including, BJ Services, Cal Dive, Global Industries,
Horizon Offshore, J. Ray McDermott, Key Energy, Oceaneering, Stolt Comex and
Trico Marine. Such analyses indicated that as of April 6, 1999, the average
ratio of Adjusted Market Value (defined as equity market value plus short and
long-term debt less cash and marketable securities) to estimated 1999 and 2000
earnings before interest, tax, depreciation and amortization ("EBITDA") was
8.6x and 7.3x, respectively.

Based upon this analysis, Johnson Rice applied a range of comparable
multiples after making certain qualitative adjustments to Superior EBITDA
estimates in 1999 and 2000. The ranges applied were 7.4x to 8.4x for 1999 and
6.5x to 8.0x for 2000. Application of these multiples yielded a reference
equity value range for Superior of $102.1 million to $119.0 million.

Based upon this analysis, Johnson Rice applied a range of comparable
multiples to Cardinal EBITDA estimates in 1999. The ranges applied were from
7.4x to 8.4x for 1999. Application of these multiples yielded a reference
equity value range for Cardinal of $94.9 million to $119.3 million. Assuming a
Superior share price of $3.38, Superior's purchase of Cardinal at the $94.9
million and $119.3 million reference ranges would require the issuance of 28.1
million to 35.3 million shares of Superior Common Stock based on the fully
diluted share count corresponding to the $3.38 share price. It is anticipated
that the number of shares of Superior Common Stock to be issued pursuant to the
Merger will be consistent with this range.

No company utilized in the comparable public company analysis is identical
to Superior or Cardinal. Accordingly, an analysis of the results of the
foregoing necessarily involves complex considerations and judgments concerning
differences in financial and operating characteristics of Superior and Cardinal
and other factors that could affect the public trading value of the companies
to which they are being compared.

Contribution Analysis. Johnson Rice analyzed the pro forma contribution of
each of Superior and Cardinal to the combined company. Such analysis included,
among other things, relative contributions of net income from operations, cash
flow from operations and EBITDA. Johnson Rice utilized certain financial
information provided by Superior and Cardinal management as well as estimates
from various securities analysts for the analysis. The relative levels of net
income, operating cash flow and EBITDA were used to develop implied enterprise
value contributions on a leverage adjusted basis to derive implied equity
market value contributions. The analysis indicated that Superior would
contribute 48.4% of the equity value based on net income, 49.1% based on
operating cash flow and 49.7% based on EBITDA in 1999. Using a Superior share
price of $3.38 and assigning various weightings to the contribution statistics,
the purchase of Cardinal would require the issuance of 29.6 million to 30.9
million shares of Superior Common Stock based on the fully diluted share count
corresponding to the $3.38 share price. It is anticipated that the number of
shares of Superior Common Stock to be issued pursuant to the Merger will be
consistent with this range.

Pro Forma Analysis of the Merger. Johnson Rice analyzed the pro forma impact
of the Merger on earnings per share, and cash flow per share for Cardinal for
the calendar years 1999 and 2000. Johnson Rice utilized certain financial
information provided by Superior and Cardinal management, as well as estimates
from various securities analysts for the analysis. The pro forma analyses also
took into account the anticipated cost savings and synergies expected to be
derived from the Merger as estimated by the Cardinal and Superior

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management teams. Johnson Rice noted that, assuming the Merger would be treated
as a purchase for accounting purposes, the Merger would be neutral to slightly
dilutive to earnings per share and neutral to slightly accretive to cash flow
per share in 1999. The Merger would be accretive to both earnings per share and
cash flow per share in 2000.

Johnson Rice also analyzed the effects of the Merger on the balance sheet
and credit statistics of the combined company. Treating Cardinal's subordinated
securities as debt and including the off-balance sheet contingent payments of
Superior as debt, Superior's debt to total market capitalization using a $3.38
share price increased to 40.2% from 27.5% at year end 1999 and to 35.9% from
23.5% at year end 2000. Debt to EBITDA ratios increase to 3.06 from 2.06 in
1999 and to 2.14 from 1.43 in 2000. Fixed Charge Coverage (EBITDA / (interest +
capital expenditures + principal payments), increased to 2.12 from 1.93 in 1999
and to 1.26 from 0.73 in 2000.

Superior retained Johnson Rice based on its experience and expertise.
Johnson Rice is an internationally recognized investment banking and advisory
firm. As part of its investment banking business, Johnson Rice is regularly
engaged in the valuation of businesses and their securities in connection with
mergers and acquisitions, negotiated underwritings, secondary distributions of
listed and unlisted securities, private placements and valuations for estate,
corporate and other purposes. Neither Johnson Rice nor its principals has a
material ownership interest in Superior or Cardinal. In the past, Johnson Rice
has provided financial advisory and financing services to Superior and its
affiliates and has received customary fees in connection with these services.
No limitations were placed by the Superior Board or management regarding the
procedures or investigations undertaken by Johnson Rice in connection with
arriving at its opinion. Superior and its management cooperated fully with
Johnson Rice in connection therewith.

Superior has agreed to pay Johnson Rice a fee for its financial opinion and
related advisory services of $1,200,000 payable upon the consummation of the
Merger. Superior has also agreed to reimburse Johnson Rice for its expenses
related to the engagement and to indemnify Johnson Rice and its affiliates
against certain liabilities and expenses, including liabilities under federal
securities laws, in connection with Johnson Rice's engagement.

Cardinal retained Simmons & Company International ("Simmons") to act as
financial advisor to Cardinal in connection with its review and approval of the
Merger. Cardinal has agreed to pay Simmons a fee in the range of $1,400,000 to
$1,700,000, depending on the market price of the Superior Common Stock upon
consummation of the Merger, for its financial advisory services and to
reimburse Simmons for its expenses related to the engagement and to indemnify
Simmons and its affiliates against certain liabilities and expenses, including
liability under federal securities laws, in connection with Simmons'
engagement.

Effective Time of the Merger

The Merger will become effective at the time (the "Effective Time") and on
the date (the "Effective Date") the Certificate of Merger is filed with the
Secretary of State of Delaware. Unless Superior and Cardinal otherwise agree,
the Merger will be consummated as soon as possible after all stockholder
approvals described in this Proxy Statement have been obtained and the other
conditions of the Merger have been satisfied or waived (the "Closing Date").
See "--Hart-Scott-Rodino Clearance" and "--Other Conditions to the Merger."

Exchange of Stock Certificates

Promptly after the Effective Time, Superior will mail to the former holders
of record of shares of Cardinal Capital Stock instructions for surrendering the
certificates representing shares of Cardinal Capital Stock (the "Certificates")
in exchange for certificates representing Superior Common Stock.

Upon surrender of the Certificates for cancellation together with the letter
of transmittal duly executed, the holders of the Certificates will be entitled
to receive in exchange, certificates for the number of whole shares of

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<PAGE>

Superior Common Stock exchangeable for the shares of Cardinal Capital Stock
represented by the Certificate so surrendered, plus a cash payment (without
interest) equal to the fraction of a share of Superior Common Stock to which
such holder would be entitled multiplied by the closing price of the Superior
Common Stock on the Nasdaq National Market on the Effective Date. The
Certificates surrendered will then be cancelled. Holders of Management Shares
will not be required to surrender certificates representing such Management
Shares or complete a letter of transmittal in order to obtain the shares of
Superior Common Stock and fractional share payment, if any, to which such
holder is entitled to receive upon consummation of the Merger.

At and after the Effective Time, the stockholders of Cardinal will be
treated as stockholders of record of Superior, but no dividends will be paid to
the holders of the Certificates until the Certificates have been surrendered,
at which time the amount of any dividends which theretofore became payable but
which were not paid with respect to the number of shares of Superior Common
Stock exchangeable for the shares of Cardinal Capital Stock represented by the
Certificates will be paid. After the Effective Time, there will be no further
registration of transfers on the stock transfer books of Cardinal or its
transfer agent of shares of Cardinal Capital Stock that were outstanding
immediately prior to the Effective Time. If, after the Effective Time,
Certificates are presented for any reason, they will be canceled and exchanged
as described above.

HOLDERS OF SUPERIOR COMMON STOCK WILL NOT EXCHANGE THEIR CERTIFICATES
REPRESENTING SHARES OF SUPERIOR COMMON STOCK. AFTER THE MERGER, EACH
OUTSTANDING SHARE OF SUPERIOR COMMON STOCK WILL REMAIN OUTSTANDING AND SUPERIOR
STOCKHOLDERS WILL CONTINUE TO HOLD THE SAME NUMBER OF SHARES OF SUPERIOR COMMON
STOCK THEY CURRENTLY OWN.

Certain Terms of the Merger Agreement

Equity Contribution

In March 1999, Cardinal completed an offering of $5 million of equity to the
current holders of Cardinal Capital Stock. The consummation of the Merger is
conditioned upon the completion by Cardinal of a private placement of an
additional $45 million of equity (the "Equity Contribution") to the current
holders of Cardinal Capital Stock or other institutional investors on terms
reasonably satisfactory to Superior. Superior has agreed to assist Cardinal in
completing the Equity Contribution. The net proceeds of this private placement
will be used to reduce Cardinal's indebtedness prior to consummation of the
Merger.

In order to satisfy this condition, on April 30, 1999 the Board of Directors
of Cardinal authorized $45 million of Class A Common Stock of Cardinal to be
offered to its existing stockholders at a purchase price of $1,333 per share,
which purchase price was determined on the basis of the average of the closing
price per share of the Superior Common Stock for the ten days preceding April
20, 1999 ($3.34 per share). Cardinal has received commitments from its existing
stockholders to subscribe for the entire amount of the offering.

Financing

Under the terms of the Merger Agreement, prior to the consummation of the
Merger, Superior must obtain a new credit facility, which may be in the form of
an offering of senior notes, or secured or unsecured bank debt, or any other
form reasonably satisfactory to Cardinal and the Funds (the "Financing"),
containing usual and customary covenants, and on terms that are mutually agreed
upon by Superior and Cardinal, in a principal amount that will produce proceeds
sufficient to repay or refinance certain indebtedness of Cardinal and Superior.
Cardinal has agreed to assist Superior in the arrangement of the Financing. As
of March 31, 1999, the amount of the outstanding indebtedness of each of
Cardinal and Superior that would be repaid or refinanced with the proceeds of
the Financing and the Equity Contribution, or otherwise restructured on terms
mutually

24
<PAGE>

satisfactory to Superior and Cardinal, was approximately $128 million and $25
million, respectively. The completion of the Financing is a condition to the
consummation of the Merger. Superior has accepted an indication of interest
from a lender for the Financing and is proceeding to assist the lender in
completing its review and documenting the Financing.

Constitution of Superior's Board Following the Merger: Stockholders' Agreement

The one-year term of all of the current members of Superior's Board of
Directors will expire at the Meeting. The Merger Agreement requires Superior's
Board to nominate a slate of directors to be elected at the Meeting, consisting
of (i) two individuals designated by Superior, one of whom is the Chief
Executive Officer of Superior, (ii) two individuals designated by Cardinal, and
(iii) two individuals who are independent of both Superior and Cardinal, and
who have been designated by Cardinal. Accordingly, Superior's Board has
nominated six individuals meeting this criteria. See "Election of Directors."

As a condition to the Merger, Superior and the Funds must execute a
stockholders' agreement (the "Stockholders' Agreement") that provides, among
other things, that following the Closing Date the Board of Directors of
Superior will continue to consist of six directors nominated as provided above
(except that following the Merger the Funds, rather than Cardinal, will
designate the directors initially designated by Cardinal). However, the second
individual initially designated by Superior (other than the Chief Executive
Officer) will only be nominated for re-election at the first annual meeting of
Superior's stockholders following the Closing Date and will serve until the
expiration of his term at the second annual meeting of Superior's stockholders
following the Closing Date, at which time this board seat will be filled by an
independent director designated by a majority vote of the entire Board.

Under the Stockholders' Agreement, the Funds must vote the shares of
Superior Common Stock owned by them following the Merger in favor of the
director nominees selected pursuant to the Stockholders' Agreement, and
Superior's Board must take all necessary or appropriate action to assist in the
nomination for election as directors the persons so designated, including
recommending that the Superior stockholders vote in favor of such nominees.

Once the Funds cease to beneficially own in the aggregate at least 15% of
the voting power of Superior, the Funds will cease to have the right to
designate the independent directors, and upon the earlier to occur of 10 years
from the Closing Date or once the Funds beneficially own less than 5% of the
voting power of Superior, the Funds will no longer have the right to designate
any individuals to serve on the Superior Board of Directors and the
Stockholders' Agreement will terminate.

The Stockholders' Agreement also provides that the Funds will not, among
other things:

. acquire additional securities of Superior (other than the Merger Shares)
that will result in the Funds' obtaining beneficial ownership of 10% or
more of the voting power or the outstanding shares of any class of
Superior securities.

. sell or otherwise dispose of any beneficial interest in any Superior
securities, except by conversion, exchange or exercise of the securities
according to their terms, or pursuant to:

(i) a bona fide pledge of or the granting of a security interest in such
securities to certain lenders;

(ii) a transfer of the securities to a member of the Funds, or a partner
of one of the Fund members, provided the transferee has signed a
counterpart of the Stockholders' Agreement;

(iii) a public offering;

(iv) a sale effected in compliance with Rule 144 or certain privately
negotiated sales; or

(v) a business combination involving Superior that has been approved by
the Board.

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<PAGE>

In effecting any distribution of Superior securities to any partner of
one of the Funds or any privately negotiated sale, the Funds have also
agreed to use their reasonable best efforts to refrain from knowingly
transferring 5% or more of the voting power of Superior to any one
person or group of persons.

. vote in a manner other than as recommended by the Board with respect to
any business combination or other change in control of Superior that has
not been approved by the Board.

. join a partnership, limited partnership, syndicate or other group or
otherwise act in concert with any other person, other than the Funds, for
the purpose of acquiring, holding, voting or disposing of any Superior
securities.

. assist or act as a financing source for, or otherwise invest in, any
transaction that would result in a change of control of Superior.

These covenants will cease to be effective during any period that a director
designated by the Funds is not serving as a director as a result of the failure
of Superior or the Board to comply with the terms of the Stockholders'
Agreement or because any such designee is not elected by the stockholders.

Agreement and Release

The Merger Agreement also requires that all of the holders of Cardinal
Capital Stock execute an agreement and release (the "Agreement and Release"),
pursuant to which, among other things, (i) the holders of the Cardinal Class C
Preferred Stock agree to convert their shares into Cardinal Class A Common
Stock, on a share for share basis, prior to the Merger, unless they instead
vote in favor of the Merger and agree to convert their shares directly into
Merger Shares, (ii) all stockholders of Cardinal agree to release and discharge
Cardinal, its subsidiaries and its officers and directors from any obligations
arising under charter documents, any contract (other than the Merger
Agreement), the DGCL or the Louisiana Business Corporation Law (the "LBCL"),
and agree to waive any preemptive rights, or any other rights to acquire
additional shares of Cardinal Capital Stock that such stockholders may have,
(iii) all stockholders of Cardinal agree to accept the number of shares of
Superior Common Stock that such stockholder is entitled to receive upon
consummation of the Merger in accordance with the terms of the Merger Agreement
in full payment for their shares of Cardinal Capital Stock exchanged therefor,
and agree to waive any appraisal rights such stockholders may have under
Cardinal's charter documents, any contract or the DGCL or the LBCL, and (iv)
such stockholders agree to terminate certain existing registration rights,
stockholders and other agreements with Cardinal.

As stated above, the Merger Agreement requires that all shares of Cardinal's
Class C Preferred Stock be either redeemed by Cardinal or converted into shares
of Cardinal's Class A Common Stock prior to the Merger. However, if this does
not occur, and the holders of the Class C Preferred Stock instead vote as a
class in favor of the Merger and agree to convert their shares directly into
shares of Superior Common Stock upon consummation of the Merger, each such
share will be treated in the Merger like a share of Cardinal's Class A Common
Stock.

Registration Rights Agreements

The Merger Agreement also requires Superior to execute separate registration
rights agreements with each of the Funds and all other Cardinal stockholders
(the "Registration Rights Agreements").

Under the registration rights agreement with the Funds, at any time after
one year following the Closing Date, the Funds may request that Superior file a
registration statement under the Securities Act of 1933 (the "Securities Act")
for the sale of not less than 20% of the Superior Common Stock owned by the
Funds following the Merger. Under the registration rights agreement, Superior
will not be obligated to effect more than one demand registration during any 12
month period nor more than four demand registrations during the term of the
registration rights agreement. Pursuant to this agreement, the Funds also have
the right to include

26
<PAGE>

their shares in any other registration statement filed by Superior to register
the offer and sale of Superior Common Stock by Superior or other stockholders,
subject to certain limitations.

Under the registration rights agreement with the other stockholders of
Cardinal, Superior has agreed to file within 90 days after the Closing Date, a
shelf registration statement under the Securities Act registering the resale
from time to time of the Superior Common Stock owned by such stockholders.
Superior will keep the registration statement effective until the earlier of
(i) the second anniversary of the Closing Date and (ii) the date on which all
securities covered by the registration statement have been sold. Pursuant to
this agreement, these stockholders also have the right to include their shares
in any registration statement filed by Superior to register the offer and sale
of Superior Common Stock by Superior or other stockholders, subject to certain
limitations.

Hart-Scott-Rodino Clearance

The obligations of Superior and Cardinal to consummate the Merger are
subject to the expiration or earlier termination of the requisite waiting
period under the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as
amended (the "HSR Act"). Under the HSR Act and the rules and regulations
promulgated thereunder by the Federal Trade Commission (the "FTC"), the Merger
will not be able to be consummated until (i) notifications has been given and
certain information has been furnished to the FTC and the Antitrust Division of
the Department of Justice (the "DOJ") and (ii) specific waiting periods have
expired or terminated.

Superior and Cardinal have agreed, pursuant to the Merger Agreement, to use
reasonable efforts to file or cause to be filed with the FTC and the DOJ such
notifications as are required to be filed under the HSR Act and the rules and
regulations promulgated thereunder, and to respond to any requests for
additional information made by either the FTC or the DOJ. Accordingly, Superior
and Cardinal filed Premerger Notification and Report Forms with the FTC and DOJ
on May 27, 1999 and May 28, 1999, respectively. If not earlier terminated, the
statutory waiting period is expected to expire on June 27, 1999.

The DOJ and the FTC, as well as state antitrust enforcement agencies,
frequently scrutinize the legality under the antitrust laws of transactions
such as the Merger. The termination of the HSR Act waiting period will not
preclude DOJ, the FTC or state antitrust enforcement agencies from challenging
the Merger on antitrust grounds. Accordingly, at any time before or after the
consummation of the Merger and notwithstanding the expiration or termination of
the HSR Act waiting period, any federal or state antitrust authorities could
take action under the antitrust laws as they deem necessary or desirable in the
public interest. Such action could include seeking to enjoin the consummation
of the Merger or seeking divestiture of all or part of the assets of Cardinal
or Superior. Private parties may also seek to take legal action under the
antitrust laws, if circumstances permit.

Other Conditions to the Merger

In addition to Superior stockholder approval of the Merger Proposals and HSR
clearance, the respective obligations of Cardinal and Superior to consummate
the Merger are subject to the satisfaction of the following conditions:

. No statute, rule, regulation, executive order, decree, preliminary or
permanent injunction or restraining order shall have been enacted,
entered, promulgated or enforced by any court of competent jurisdiction
or other governmental entity which prohibits or restricts the
consummation of the transactions contemplated by the Merger Agreement,
and no proceeding shall have been commenced and be pending which seeks to
prohibit or restrict the consummation of the transactions contemplated by
the Merger Agreement.

. The Cardinal stockholders shall have approved the Merger and shall have
executed the Agreement and Release, and the Cardinal Class C Preferred
Stock shall have been redeemed or converted into shares of Cardinal's
Class A Common Stock or the holders of such shares of Class C Preferred
Stock shall

27
<PAGE>

have approved the Merger and agreed to convert their shares directly into
shares of Superior Common Stock upon consummation of the Merger.

. Superior and Cardinal shall have received an opinion from Jones, Walker,
Waechter, Poitevent, Carrere & Denegre, L.L.P. to the effect that the
Merger will constitute a tax-free reorganization.

. Superior shall have completed the Financing and Cardinal shall have
completed the Equity Contribution.

. The Stockholders' Agreement shall have been executed and delivered by
Superior and the Funds.

. An escrow agreement required to be executed under the terms of a
settlement agreement between Cardinal and certain of its stockholders
shall have been executed and delivered, and arrangements shall have been
made to escrow thereunder 892,000 shares of Superior Common Stock to be
issued upon consummation of the Merger for the benefit of the former
holder of Cardinal Class B Common Stock.

. The Merger Shares shall have been approved for listing, subject to notice
of official issuance, on the Nasdaq National Market.

. All consents and approvals of third parties necessary for consummation of
the transactions contemplated by the Merger Agreement shall have been
obtained, including the consent of the holders of Cardinal's 11.0% Senior
Subordinated Notes, issued pursuant to the Securities Purchase Agreement
(unless such notes are refinanced at Closing).

The obligations of Superior to consummate the Merger are subject to the
satisfaction of the following additional conditions unless waived by Superior:

. Each of the representations and warranties of Cardinal contained in the
Merger Agreement that is qualified as to materiality will be true and
correct, and each of such representations and warranties that is not so
qualified as to materiality will be true and correct in all material
respects, as of the date of the Merger Agreement and Closing Date as
though made on and as of the Closing Date, and Cardinal and the Funds
will have performed in all material respects all obligations required to
be performed by them under the Merger Agreement at or prior to the
Closing Date.

. Superior shall have received customary legal opinions from Cardinal's
counsel.

The obligations of Cardinal and the Funds to consummate the transactions
contemplated by the Merger Agreement are subject to the satisfaction for the
following additional conditions unless waived by Cardinal and the Funds:

. Each of the representations and warranties of Superior set forth in the
Merger Agreement that is qualified as to materiality will be true and
correct, and each of such representations and warranties that is not so
qualified as to materiality will be true and correct in all material
respects, as of the date of the Merger Agreement and as of the Closing
Date as though made on and as of the Closing Date and Superior shall have
performed in all material respects all obligations required to be
performed by it under this Agreement on or prior to the Closing Date.

. Cardinal and the Funds shall have received evidence satisfactory to them
that an extension of Cardinal's directors' and officers' liability
insurance policy meeting the requirements of the Merger Agreement is in
force.

. Superior shall have executed and delivered the Registration Rights
Agreements.

. Superior stockholder approval shall have been obtained with respect to
the Merger Proposals at the Meeting, and Superior shall have effected or
caused to be effected the Charter Amendments and the Plan.

. Cardinal and the Funds shall have received customary legal opinions from
Superior's counsel.

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<PAGE>

Interests of Certain Persons in the Merger

In considering the recommendation of Superior's Board of Directors with
respect to the Merger, Superior's stockholders should be aware that certain
directors and officers of Superior, Cardinal and the Funds have certain
interests respecting the Merger separate from their interests as holders of
Superior Common Stock or Cardinal Capital Stock, as the case may be, including
those referred to below.

Employment Agreements

On the Closing Date, Superior will enter into new two-year employment
agreements with Robert Taylor, who is currently the Chief Financial Officer of
Superior, James Holleman, currently serving as Vice President and Chief
Operating Officer of Cardinal and Dale Mitchell, currently serving as Vice
President-Marine Services of Cardinal, providing for annual base salaries of
$125,000, $135,000 and $125,000, respectively. Superior will also amend and
restate the current employment agreement with Terence Hall, Superior's Chief
Executive Officer, to delete the current annual incentive bonus arrangement and
provide for an annual base salary equal to his current base salary.

On the Closing Date, Superior will also enter into new two-year employment
agreements with Kenneth Blanchard and Charles Funderburg, each of whom is
currently a Vice President of Superior, providing for an annual base salary
equal to their current base salary, and cash payments in the aggregate of
$1,000,000 payable over a two year period for bonuses and covenants not to
compete.

Each of the employment agreements referred to above will provide that the
executive officers will also be entitled to participate in all other bonus and
benefit programs on the same terms as all other similarly situated employees.
The employment agreements will also contain non-competition, confidentiality
and other provisions intended to protect Superior's interests in the event any
of the executive officers cease to be employed by Superior. In addition, each
employment agreement will be in a form mutually satisfactory to both Cardinal
and Superior.

All other employment agreements between Superior or any of its subsidiaries
and any employee and Cardinal or any of its subsidiaries and any employee will
remain in effect on their present terms. After the Closing, Superior will also
establish an incentive bonus plan, pursuant to which the members of the
combined company's management team will be eligible for annual cash bonuses
based upon Superior achieving certain performance goals, measured as a
percentage of EBITDA, as may be determined by the Compensation Committee.

Options Granted to Superior Officers and Directors

At the Effective Time, it is contemplated that the following officers will
receive the number of nonqualified stock options under the Plan listed opposite
such officer's name. These options will all have 10-year terms, will have an
exercise price equal to the market price of the Superior Common Stock on the
Closing Date, and will vest in one-third increments on each of the first three
anniversaries of the Closing Date, except that 107,000 of the options granted
to each of Messrs. Blanchard and Funderburg will have five-year terms and will
vest on the first anniversary of the Closing Date. The proposed option grants
are as follows:

<TABLE>
<CAPTION>
Number of
Shares
Subject to
Name Current Title Option
---- ------------------------------------------------------ ----------
<S> <C> <C>
Terence E. Hall......... Chairman and Chief Executive Officer of Superior 488,617
Kenneth Blanchard....... Vice President of Superior 372,000
Charles Funderburg...... Vice President of Superior 347,000
Robert Taylor........... Chief Financial Officer of Superior 240,000
James Holleman.......... Vice President and Chief Operating Officer of Cardinal 265,000
Dale Mitchell........... Vice President-Marine Services of Cardinal 240,000
</TABLE>

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<PAGE>

In addition to the options proposed to be granted to the executive officers
named above, it is also contemplated that an aggregate of approximately 1.6
million options will be granted under the Plan to other officers and employees
of the combined company following consummation of the Merger. Under the Plan,
directors who are not also full-time employees of Superior will also receive
options to acquire 20,000 shares of Superior Common Stock on the date such
person first becomes a member of the Board and an option to acquire 5,000
shares of Superior Common Stock on the day following each annual meeting of
stockholders, beginning with the 2000 annual meeting, if shares of Superior
Common Stock remain available for grant under the Plan.

Employee Benefits

Superior has agreed that following consummation of the Merger, it will offer
to all persons who were employees of Cardinal or its subsidiaries and who
become employees of Superior following the Merger, the same employee benefits
as are offered by Superior to its own employees.

Indemnification

The Merger Agreement provides that, for four years after the Effective Time,
Superior will indemnify and hold harmless the present and former officers and
directors of Cardinal or its subsidiaries in respect of acts or omissions prior
to the Effective Time to the fullest extent provided under Cardinal's
Certificate of Incorporation in effect on the date of the Merger Agreement or
pursuant to any agreements between Cardinal and such officers or directors.

The Merger Agreement also provides that, for a period of four years after
the Effective Time, Superior will, subject to certain limitations, purchase and
maintain an extension of Cardinal's current directors' and officers' liability
insurance policy for the benefit of those persons who are currently covered by
such policy on terms no less favorable than the terms of such current insurance
coverage.

Board Membership

Pursuant to the terms of the Merger Agreement and the Stockholders'
Agreement discussed above, Terence E. Hall, as Chief Executive Officer of
Superior, will retain his position as a member of the Superior Board of
Directors upon consummation of the Merger and Justin L. Sullivan, a current
director on the Superior Board, will serve as the other Superior designee to
the Board. The two director nominees designated by Cardinal, Messrs. Ben A.
Guill and William E. Macaulay, are officers of the corporate general partner of
the Funds. The remaining two director nominees who were designated by Cardinal,
Messrs. Robert E. Rose and Richard A. Bachmann, are independent of Superior,
Cardinal and the Funds. See "Election of Directors" and "--Certain Terms of the
Merger Agreement--Constitution of Superior's Board Following the Merger;
Stockholders' Agreement."

Conduct of Business by Cardinal and Superior Pending the Merger

Pursuant to the Merger Agreement, each of Superior and Cardinal has agreed
to use its reasonable best efforts to preserve the goodwill of suppliers,
customers and others having business relations with it and its subsidiaries and
to do nothing knowingly to impair its ability to keep and preserve its
business. In addition, Superior and Cardinal have each agreed not to, prior to
the Effective Time, unless expressly contemplated by the Merger Agreement,
without the prior written consent of the other:

. Declare, set aside, increase or pay any dividend (including any stock
dividends), or declare or make any distribution on, or directly or
indirectly combine, redeem, reclassify, purchase, or otherwise acquire,
any shares of its capital stock;

. Amend its certificate of incorporation or by-laws, or adopt or amend any
resolution or agreement concerning indemnification of its directors,
officers, employees or agents;

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<PAGE>

. Commit any act which would cause any representation or warranty contained
in the Merger Agreement to become untrue in any material respect;

. Violate any applicable law that would have a material adverse effect on
such party;

. Fail to maintain its books, accounts and records in the usual manner on a
basis consistent with that heretofore employed in all material respects;

. Fail to pay, or to make adequate provision in all material respects for
the payment of, all taxes, including interest payments and penalties, due
and payable;

. Make any material change in the conduct of its business and operations or
enter into any transaction other than in the ordinary course of business
consistent with past practices;

. Issue any additional shares of capital stock or equity securities or
grant any option, warrant or right to acquire any capital stock or equity
securities; issue any security convertible into or exchangeable for its
capital stock; alter any material term of any of its outstanding
securities or make any change in its outstanding shares of capital stock
or other ownership interests or its capitalization;

. Incur, assume or guarantee any indebtedness for borrowed money or any
other obligation of any other person, issue any notes, bonds, debentures
or other corporate debt securities or grant any option, warrant or right
to purchase any thereof other than for working capital under an existing
line of credit and to fund capital expenditures;

. Make any sale, assignment, transfer, abandonment or other conveyance of
any of its material assets or any part thereof, except transactions
pursuant to existing contracts and dispositions of worn-out or obsolete
equipment for fair or reasonable value in the ordinary course of business
consistent with past practices;

. Subject any of its assets or properties to a lien other than a permitted
lien;

. Make or commit to make any capital expenditures that in the aggregate are
in excess of $500,000 except in accordance with such party's budget as
disclosed to the other party;

. Make any loan, advance or capital contribution to or investment in, or
sell, transfer or lease any properties or assets to, or enter into any
agreement or arrangement with, any of its affiliates other than in the
ordinary course of business;

. Make any change in any method of accounting or accounting principle,
method, estimate or practice except for any such change required by
reason of a concurrent change in generally accepted accounting principles
or write down the value of any inventory or write off as uncollectible
any accounts receivable except in the ordinary course of business
consistent with past practices;

. Enter into or modify any employment, severance or similar agreement or
arrangement with any director or employee, or grant any increase in the
rate of wages, salaries, bonuses or other compensation or benefits of any
executive officer or other employee other than increases in wages,
salaries, bonuses, compensation or benefits (i) required by contracts,
agreements, policies or collective bargaining agreements or (ii) to field
or operating employees made in the ordinary course of business;

. Enter into any new line of business; or

. Make any tax election that is inconsistent with any corresponding
election made on a prior return or settle or compromise any tax liability
for an amount in excess of the liability therefor that is reflected on
such party's financial statements.

No Solicitation

The Merger Agreement prohibits each of Superior and Cardinal and its
respective subsidiaries, affiliates, officers, directors, representatives and
agents from soliciting, initiating or encouraging the submission of any

31
<PAGE>

proposal for a Sale Transaction (as defined herein), entering into or giving
any approval with respect to a Sale Transaction, or participating in any
discussions or negotiations regarding or furnishing to any person any
information with respect to, or take any other action to facilitate any
inquiries or the making of any proposal that constitutes, or may reasonably be
expected to lead to, any Sale Transaction. As defined in the Merger Agreement,
a Sale Transaction generally means, with respect to either Superior or
Cardinal: (i) an acquisition by any person of a majority of the outstanding
common stock of such party, (ii) a reorganization, recapitalization, merger,
consolidation or similar business combination or transaction involving such
party, where such party is not the surviving company or (iii) a sale or other
disposition of assets having a value in excess of 25% of the market value of
all of such party's assets, and specifically excludes the Equity Contribution.

If the Board of Superior or Cardinal, as the case may be, determines in good
faith, based upon the advice of outside counsel, that it is necessary to do so
in order to comply with its fiduciary duties to its stockholders under
applicable law, it may in response to a written proposal for a Sale Transaction
not solicited on or after the date of the Merger Agreement, furnish information
with respect to itself or a subsidiary pursuant to a customary confidentiality
agreement with the person making such proposal, and participate in negotiations
regarding such proposal.

The Merger Agreement prohibits the Boards of each of Superior and Cardinal
from withdrawing or modifying its recommendation to its stockholders, in a
manner adverse to the approval of the Merger Agreement, or approve or recommend
any Sale Transaction, except if the Board of such party determines in good
faith, based upon the advice of outside counsel, that it is necessary to do so
in order to comply with its fiduciary obligations to its stockholders, and then
only after terminating the Merger Agreement and paying a termination fee of $3
million (the "Termination Fee").

Each of Superior and Cardinal are also obligated to promptly inform the
other of any request for information or of any proposed Sale Transaction or any
inquiry with respect to or which could reasonably be expected to lead to a Sale
Transaction, and the terms and conditions thereof, and to keep the other fully
informed of the status and details of any such request or proposal.

Restrictions on the Funds

Each of the Funds has agreed that, prior to the Closing Date, it will not
sell, transfer or otherwise dispose of all or any part of the shares of
Cardinal Capital Stock owned by it or grant any proxy relating thereto other
than to existing Cardinal stockholders as of the date of the Merger Agreement.
The Funds, which collectively own approximately 63% of the outstanding Cardinal
Capital Stock, have also agreed to vote or cause to be voted all of the shares
of Cardinal Capital Stock owned by them in favor of approval of the Merger
Agreement and against any similar agreement unless Superior is then in material
breach or default of its obligations under the Merger Agreement such that
Cardinal would have the right to terminate the Merger Agreement.

Amendment; Waiver; Termination

The Merger Agreement may be amended at any time before or after its approval
by the stockholders of Superior and Cardinal by written agreement of Superior
and Cardinal, except that no amendment may be made after the approval by the
stockholders of Superior and Cardinal that by law would require further
stockholder approval unless such further stockholder approval is obtained.

The Merger Agreement provides that it may be terminated at any time prior to
the Closing Date:

. By mutual consent of Superior and Cardinal;

. By Superior, if there shall have been a breach of any representation,
warranty, covenant or agreement on the part of Cardinal or the Funds that
is qualified as to materiality, or a material breach of any such
representation, warranty, covenant or agreement that is not so qualified
as to materiality, which breach

32
<PAGE>

shall not have been cured prior to the earlier of (i) 30 days following
notice of such breach and (ii) the Closing Date;

. By Cardinal, if there shall have been a breach of any representation,
warranty, covenant or agreement on the part of Superior that is qualified
as to materiality, or a material breach of any such representation,
warranty, covenant or agreement that is not so qualified as to
materiality, which breach shall not have been cured prior to the earlier
of (i) 30 days following notice of such breach and (ii) the Closing Date;

. By either Superior or Cardinal if any permanent injunction or other order
of a court or other competent governmental entity preventing the
transactions contemplated by this agreement shall have become final and
nonappealable;

. By either Superior or Cardinal if the transactions contemplated by this
Agreement shall not have been consummated on or before October 15, 1999;
provided, that the right to terminate Merger Agreement will not be
available to any party whose breach of its representations and warranties
in the Merger Agreement or whose failure to perform any of its covenants
and agreements under the Merger Agreement has resulted in the failure of
the transactions contemplated by the Merger agreement to occur on or
before such date;

. By Superior, if (i) the Board of Directors of Cardinal withdraws,
modifies or changes its recommendation of the Merger Agreement or the
Merger or shall have resolved to do any of the foregoing or the Board of
Directors of Cardinal shall have recommended to the stockholders of
Cardinal another proposed Sale Transaction or resolved to do so; (ii) a
tender offer or exchange offer for 30% or more of the outstanding shares
of Cardinal Class A or Class B Common Stock is commenced and the Board of
Directors of Cardinal, within 10 business days after such tender offer or
exchange offer is so commenced, either fails to recommend against
acceptance of such tender or exchange offer by its stockholders or takes
no position with respect to the acceptance of such tender or exchange
offer by its stockholders; or (iii) any person shall have acquired
beneficial ownership or the right to acquire beneficial ownership of, or
any "group" (as such term is defined under Section 13(d) of the Exchange
Act and the regulations promulgated thereunder), shall have been formed
which beneficially owns, or has the right to acquire beneficial ownership
of, 30% or more of the then outstanding shares of Cardinal Class A or
Class B Common Stock;

. By Cardinal if (i) the Board of Directors of Superior withdraws, modifies
or changes its recommendation of the Merger Agreement or the Merger or
shall have resolved to do any of the foregoing or the Board of Directors
of Superior shall have recommended to the stockholders of Superior
another proposed Sale Transaction or resolved to do so; (ii) a tender
offer or exchange offer for 30% or more of the outstanding shares of
Superior Common Stock is commenced and the Board of Directors of
Superior, within 10 business days after such tender offer or exchange
offer is so commenced, either fails to recommend against acceptance of
such tender or exchange offer by its stockholders or takes no position
with respect to the acceptance or such tender or exchange offer by its
stockholders; or (iii) any person shall have acquired beneficial
ownership or the right to acquire beneficial ownership of, or any "group"
(as such term is defined under Section 13(d) of the Exchange Act and the
regulations promulgated thereunder), shall have been formed which
beneficially owns, or has the right to acquire beneficial ownership of,
30% or more of the then outstanding shares of Superior Common Stock; or

. By either Superior or Cardinal if (i) Cardinal accepts another proposed
Sale Transaction, which shall have been approved by Cardinal's Board of
Directors; (ii) Superior accepts another proposed Sale Transaction, which
shall have been approved by Superior's Board of Directors; (iii) the
required approval of Superior's stockholders of the Merger Agreement is
not received at the Meeting; or (iv) the required approval of Cardinal's
stockholders of the Merger Agreement is not obtained.

In the event the Merger Agreement is terminated as a result of the
acceptance of another proposed Sale Transaction by one of the parties, the
party accepting such Sale Transaction shall pay to the other party a

33
<PAGE>

Termination Fee equal to $3 million. Further, this Termination Fee will also be
payable to the terminating party if the Merger Agreement is terminated due to
(i) the other party's breach of its representations, warranties, covenants or
agreements contained in the Merger Agreement; (ii) the withdrawal or
modification of the recommendation of the Merger by the other party's Board of
Directors; (iii) the commencement of a tender or exchange offer for the other
party's stock that is not opposed by such other party's Board of Directors;
(iv) the acquisition of 30% or more of the outstanding stock of the other
party; or (v) the failure of the stockholders of the other party to approve the
Merger; and within three months of the termination, the other party enters into
a written agreement for another proposed Sale Transaction and the other
proposed Sale Transaction is ultimately consummated.

To the extent a termination of the Merger Agreement results from a willful
breach of a party's representations, warranties, covenants or agreements set
forth in the Merger Agreement, the injured party shall have the right to
recover its damages caused thereby, although such injured party will not be
entitled to consequential or punitive damages.

Fees and Expenses

The Merger Agreement provides that whether or not the Merger is consummated,
all fees and expenses incurred in connection with the Merger shall be paid by
the party incurring them, except as provided in connection with the Termination
Fee.

Rights of Superior Stockholders; Dilution

The stockholders of Superior will not be exchanging their shares of Superior
Common Stock for other securities, and the rights of the Superior stockholders
will not be altered as a result of the consummation of the Merger, except as
those rights are affected by the proposed Charter Amendments. As stated above
and as described more fully below, in connection with the Merger, the Board has
recommended the adoption of certain amendments to Superior's Certificate of
Incorporation which will increase the number of authorized shares of Superior
Common Stock and restrict ownership of Superior capital stock by Non-Citizens.
See "Proposed Amendment to Certificate of Incorporation to Increase Number of
Authorized Shares" and "Proposed Amendment to Certificate of Incorporation to
Restrict Ownership by Non-United States Citizens."

The Merger will significantly dilute Superior's current stockholders. If the
Merger is completed, Superior's current stockholders will own in the aggregate
49% of the total number of shares of Superior Common Stock then outstanding on
a fully diluted basis, with the former stockholders of Cardinal owning in the
aggregate the remaining 51% of the total number of shares then outstanding on a
fully diluted basis. See "Comparative Per Share Data."

Appraisal Rights

Superior stockholders do not have appraisal rights in connection with the
Merger or the Share Issuance. Under the DGCL, Cardinal stockholders would be
entitled to appraisal rights in connection with the Merger. However, as a
condition to consummation of the Merger, each of the Cardinal stockholders will
be required to sign the Agreement and Release in which it affirms that it has
waived any and all appraisal rights.

Accounting Treatment

The Merger will result in the former stockholders of Cardinal owning 51% of
the outstanding shares of Superior Common Stock after giving effect to the
Merger, calculated on a fully diluted basis. For accounting purposes, the
Merger will be treated as if Cardinal was the acquiror (a reverse acquisition)
of Superior using the purchase method of accounting. Under the purchase method
of accounting, the purchase price is allocated to the assets and liabilities
acquired based upon the estimated fair values of such assets and liabilities on
the date of acquisition. Any excess of the fair market value of the
consideration given over the fair market value of the identifiable net assets
acquired is reported as goodwill.

34
<PAGE>

Certain Federal Income Tax Consequences

Management of Superior believes that the Merger will constitute a tax-free
reorganization within the meaning of Sections 368(a)(1)(A) and 368(a)(2)(E) of
the Internal Revenue Code (the "Code"). The Merger is conditioned upon the
receipt by Superior and Cardinal of the opinion of Jones, Walker, Waechter,
Poitevent, Carrere & Denegre L.L.P. to that effect.

Assuming qualification as a tax-free reorganization under the Code:

. No gain or loss will be recognized by Superior or its stockholders as a
result of the Merger;

. No gain or loss will be recognized by Cardinal or its stockholders who
receive Superior Common Stock in exchange for their shares of Cardinal
Capital Stock in the Merger; and

. The basis of the shares of Superior Common Stock to be received by the
Cardinal stockholders in the Merger will be the same as the basis of the
shares of Cardinal Capital Stock surrendered in exchange therefor.

In the event that the Merger does not constitute a tax-free reorganization,
the Cardinal stockholders may recognize a gain or loss based on the difference
between the fair market value of the Superior Common Stock received and the tax
basis in the Cardinal Capital Stock exchanged therefor.

Neither Superior nor Cardinal has requested a ruling from the Internal
Revenue Service with regard to any of the federal income tax consequences of
the Merger.

Federal Securities Law Consequences

None of the shares of Superior Common Stock received by the Cardinal
stockholders in the Merger will be registered under the Securities Act. As a
result, the shares of Superior Common Stock received by the Cardinal
stockholders in the Merger may be resold only in transactions permitted by the
resale provisions of Rule 144 promulgated under the Securities Act or as
otherwise permitted under the Securities Act.

The obligations of Cardinal to consummate the Merger are conditioned upon
Superior executing the Registration Rights Agreements with the Funds and the
other stockholders of Cardinal. See "Registration Rights Agreements."

Vote Required

Approval of the Share Issuance pursuant to the Merger requires the
affirmative vote of a majority of the votes cast on the proposal at the
Meeting. However, the consummation of the Merger is contingent on the approval
by Superior's stockholders of all of the other Merger Proposals.

The Board of Directors unanimously recommends that you vote "FOR" the
approval of the Share Issuance pursuant to the Merger.

35
<PAGE>

BUSINESS OF THE COMPANIES

Description of Business of Superior

General

Superior provides a broad range of specialized oilfield services and
equipment primarily to major and independent oil and gas companies engaged in
the exploration, production and development of oil and gas properties offshore
in the Gulf of Mexico and throughout the Gulf Coast region. These services and
equipment include the rental of specialized oilfield equipment, oil and gas
well plug and abandonment ("P&A") services, electric and mechanical wireline
services, tank cleaning services, the manufacture and sale of computerized
electronic torque and pressure control equipment and the manufacture and sale
of oil spill containment equipment. Over the last several years, Superior has
significantly expanded its operations through both internal growth and
strategic acquisitions. This expansion has enabled Superior to broaden the
range of products and services that it offers to its customers and to expand
its operations geographically throughout the Gulf Coast region.

Since the second quarter of 1998, there has been a downturn in demand for
Superior's services, resulting in a significant decline in demand for
Superior's well services operations. Superior's rental tool operations have not
been as adversely affected because its present inventory of rental tools is
used primarily in work over activity and deep water drilling projects which
have not been affected as much as other areas of the industry.

Operations

Rental Tools. Superior sells and rents specialized equipment for use with
onshore and offshore oil and gas well drilling, completion, production and
workover activities. Certain specialized tools are also manufactured by
Superior. Operators and drilling contractors generally find it more economical
to supplement their inventories with rental tools instead of maintaining a
complete inventory of tools, due to the variety of equipment required by the
different wells the operator may have in operation. The equipment needed for a
well is in large part determined by the geological features of the well area
and the size of the well itself.

Through its internal growth and through acquisitions, Superior has increased
the size and breadth of its rental tool inventory and now has 20 locations
throughout the Gulf Coast from Corpus Christi, Texas to Venice, Louisiana,
which serve all of the major staging points for oil and gas activities along
the Gulf Coast. Superior also has a limited inventory of rental tools located
in Venezuela.

Well Services. Superior is the leading provider of P&A services in the Gulf
of Mexico and also provides electric and mechanical wireline services as well
as tank cleaning services. Superior constructs all of its P&A spreads and thus
has the flexibility to build its spreads to satisfy market demand. Its custom-
built, skid-mounted P&A spreads are generally smaller than those used by many
of its competitors and allow the P&A process to be completed from liftboats and
other work platforms with low-lift capacities rather than using a drilling rig
("Rig-less P&A"). Rig-less P&A offers a cost advantage over P&A methods that
require a drilling rig, and management believes that the large majority of the
wells in the Gulf of Mexico can be plugged and abandoned using the rig-less P&A
method. In delivering its P&A services, Superior has combined both wireline and
pumping expertise, which traditionally have been provided separately, and
believes that this combined expertise gives it a competitive advantage over
many of its competitors.

Superior also provides electric and mechanical wireline services to its
customer base. These services are used to access a well to assist in data
acquisition, fishing tool operations, pipe recovery and remedial activities.
While Superior provides these services in connection with P&A jobs, it also
provides wireline services for other than P&A jobs, such as logging and pipe
recovery. Superior's wireline personnel are trained to perform both P&A jobs
and wireline services.

36
<PAGE>

In 1998, Superior expanded its well services to include vessel pressure
cleaning and safe vessel entry. In addition to conventional tank and vessel
pressure cleaning, Superior uses its patented technology for on-line/remote
cleaning to pressure clean vessels while under normal operation and flow. This
patented technology offers numerous benefits, including no confined space
entry, elimination of production shut-in, and reduction of waste disposal
costs.

Other Services. Other services provided by Superior include (i) data
acquisition and monitoring for the oil and gas industry and (ii) the
manufacture, sale and rental of oil spill containment equipment.

Superior designs, manufactures and sells computerized electronic torque and
pressure control equipment. Superior's torque and pressure control equipment is
used in connection with drilling and work over operations, as well as the
manufacture of oilfield tubular goods. The torque control equipment monitors
the relationship between size, weight, grade, rate of makeup, torque and
penetration of tubular goods to ensure a leak-free connection within the pipe
manufacturer's specification. The electronic pressure control equipment
monitors and documents internal and external pressure testing of tubular
connections.

Superior also sells oil spill containment inflatable boom and ancillary
storage/deployment/retrieval equipment. Superior's inflatable boom utilizes
continuous single-point inflation technology with air feeder sleeves in
combination with mechanical check valves to permit continuous inflation of the
boom material.

Superior sells, rents and licenses oil spill containment technology to
domestic and foreign oil companies, oil spill response companies and
cooperatives, the United States Coast Guard and to foreign governments and
their agencies.

Description of Business of Cardinal

General

Cardinal is a leading provider of wellbore intervention and topside (above-
surface) production services to the oil and gas industry in the U.S. Gulf of
Mexico and the onshore Gulf Coast region. Cardinal currently provides such
services primarily to customers operating offshore oil and gas wells located in
the shallow waters (less than 200 feet) and transition zone (marsh environment)
of the Gulf of Mexico. Cardinal utilizes its fleet of 48 offshore service
vessels in conjunction with its highly skilled service personnel to perform its
services in the Gulf of Mexico, while truck and skid-mounted equipment are
utilized to perform services onshore.

Cardinal provides oil and gas producers with on-going maintenance and
repairs to oil and gas wells. Wellbore intervention services that Cardinal
provides include: cased hole wireline services (including mechanical wireline
and electric wireline services), plugging and abandonment, coiled tubing,
logging, data acquisition and interpretation, and pumping services. Cardinal
believes that it currently is one of the largest providers of mechanical
wireline services to the Gulf of Mexico oil and gas industry.

In addition to utilizing its fleet of liftboats and other offshore service
vessels to facilitate its wellbore intervention services, Cardinal's marine
assets provide support to the maintenance of above surface oil and gas well
structures. Liftboats are self-propelled, self-elevating vessels that can
efficiently assist offshore platform construction, maintenance and well
servicing tools that traditionally have required the use of larger, more
expensive mobile offshore drilling units or derrick barges. Cardinal's
liftboats provide: accommodations for personnel and equipment used to maintain
platforms and wellhead equipment; working space, elevated to the appropriate
height above the water surface; and one or two utility cranes per vessel,
providing lifting capacity up to 100 tons. Cardinal believes that it currently
owns and operates one of the largest, most diverse fleets of liftboats in the
Gulf of Mexico.

Founded in 1959 as Cardinal Wireline Specialists, Inc. by four former
employees of Otis Engineering, Cardinal originally utilized a fleet of trucks
to provide wireline services for land-based oil and gas wells. Cardinal's range
of oil and gas production services was expanded to include offshore wells in
the 1960s and

37
<PAGE>

1970s through the purchase of liftboats and additional wireline companies and
equipment. In 1987, Cardinal increased its presence in the offshore production
services market through the acquisition of the Gulf of Mexico mechanical
wireline division of Schlumberger Ltd.

In 1990, John P. Kotts acquired Cardinal in a leveraged buyout transaction.
Over the following seven years, Cardinal continued to expand its asset base and
scope of services through strategic acquisitions and selective product
extensions. Most significantly, in 1995 Cardinal acquired the liftboat fleets
of Blue Streak Offshore, Inc. (five vessels) and Cross Marine, Inc. (six
vessels). These two acquisitions expanded Cardinal's liftboat fleet to include
more heavy-duty vessels with leg lengths ranging from 100 to 150 feet.
Additionally, in 1997 and 1998, Cardinal entered the high-end liftboat market
through the commission of three newly built liftboats with 200 foot legs.

In February 1998, Cardinal entered into a recapitalization transaction
whereby a group led by the private equity investment firm First Reserve
Corporation ("First Reserve") acquired approximately 75 percent of Cardinal's
equity. Purchased in 1982 by the current owners, First Reserve is the oldest
and largest private equity firm focused exclusively on equity investing in the
energy industry, and currently manages approximately $1.7 billion in equity. In
purchasing 75 percent of Cardinal, the First Reserve-led group of investors
paid approximately $185 million, facilitated in part by $125 million in long-
term debt.

Since the First Reserve transaction, Cardinal has continued its acquisition
efforts. Cardinal purchased Moores Wireline, Inc. and Moores Engineering, Inc.
in April 1998, and Gunn Wireline, Inc. in September 1998. These transactions
further consolidated the Gulf of Mexico offshore and Gulf Coast onshore
mechanical wireline markets and expanded Cardinal's presence in the logging,
data acquisition and interpretation market.

Description of Operations

Marine Services. Cardinal operates 48 offshore service vessels (42
liftboats, four spudboats and two supply vessels) in the Gulf of Mexico. These
vessels are used in oil and gas production facility maintenance and
construction operations as well as production service activities. With a fleet
size of 42 vessels, Cardinal operates one of the largest and most diverse
fleets of liftboats in the Gulf of Mexico. Liftboats are self-propelled, self-
elevating vessels that can efficiently assist offshore platform construction,
maintenance and well servicing tasks that traditionally have required the use
of larger, more expensive mobile offshore drilling units or derrick barges.
Cardinal's liftboats each have three cylindrical legs ranging in length from 65
to 200 feet. These legs utilize independent jacking systems to elevate the deck
of the vessel level with the deck of the platform. Each of Cardinal's liftboats
also have either one or two cranes onboard, ranging in lifting capacity from 5
to 100 tons.

Cardinal management estimates that approximately 65 percent of Cardinal's
liftboat jobs have at least one Cardinal production service bundled with it. Of
Cardinal's 42 liftboats, 15 are dedicated to providing mechanical wireline
services. Several of these vessels have operated in the same producing area for
five to six years, returning to shore only for annual United States Coast Guard
("Coast Guard") inspections. The remaining vessels often will be chartered in
conjunction with coiled tubing, electric wireline or P&A services. Liftboats
operating in the Gulf of Mexico typically command higher dayrates but
experience lower average utilization rates than other classes of marine support
vessels. However, Cardinal management believes that its ability to bundle its
production services with its liftboats allows Cardinal to experience higher
average utilization rates than its competitors.

When Cardinal's liftboats are not chartered in connection with a wireline,
coiled tubing or P&A job, they are typically used in platform maintenance and
construction activities. Maintenance services provided include sandblasting,
painting, support of diving or salvage operations and routine mechanical
repairs. Cardinal's construction services consist of fabrication, removal and
replacement of worn parts or sections of the platform and complete removal of
facilities from smaller platforms. These maintenance and construction services
are provided by Cardinal and by third party service providers under charter
arrangements with Cardinal.

38
<PAGE>

Cardinal's fleet of vessels is subject to the regulations of various
governmental agencies, including the Coast Guard, the National Transportation
Safety Board, the U.S. Customs Service and the U.S. Maritime Administration.
Cardinal is required under governmental regulations to maintain its vessels in
accordance with standards of seaworthiness, safety and health. In addition to
annual inspections by the Coast Guard, Cardinal maintains an ongoing
preventative maintenance and quality inspection program that helps to minimize
vessel downtime. Most of the repair and maintenance work performed on
Cardinal's marine fleet is conducted in New Iberia, Louisiana, at Cardinal's
shipyard facility.

Wireline Services. Cardinal provides wireline services to customers
throughout the Gulf of Mexico and onshore Gulf Coast from its bases located in
New Iberia, Belle Chasse, Broussard, and Lafayette, Louisiana, and Alvin and
Longview, Texas. All of Cardinal's wireline services are performed in existing
wellbores, a sector of the market often referred to as the "cased hole"
wireline market. Producing wells require wireline services to perform a variety
of ongoing maintenance and repairs, as well as to perform modifications to
enhance the production capacity and life span of the well.

Wireline services are segmented into two service types: mechanical wireline
and electric wireline. Cardinal believes that it currently is one of the
largest providers of cased hole mechanical wireline services to oil and gas
companies operating in the Gulf of Mexico. Cardinal entered the cased hole
electric wireline market in 1996, and is currently focused on growing this
service operation.

Cardinal maintains a large inventory of specially designed mechanical
wireline equipment and, through its in-house maintenance facilities, modifies
its equipment to meet individual customer needs and well specifications.
Cardinal provides mechanical wireline services on a 24-hour per day basis.
Services exclusively provided by mechanical wireline include: bottom hole
pressure and temperature surveys; specialized fishing operations which retrieve
loose or broken equipment in the wellbore; locating and sealing-off tubing
holes and leaks; setting and pulling safety devices; installing flow chokes in
wells upon initial completion as well as resetting flow chokes; installing
artificial gas lift valves for enhanced production.

Applications provided through electric wireline include pipe recovery,
perforating and/or cutting pipe with focused explosive charges, production well
logging and well completion services.

Plugging and Abandonment Services. Cardinal began offering P&A services in
1993 to capitalize on the growth potential that exists as the Gulf of Mexico
basin matures. Once an oil or gas well in the Gulf of Mexico is determined to
no longer be capable of producing in economic quantities, the owner is mandated
by law to file with the appropriate regulatory bodies a plan of disposition for
the well. Cardinal's P&A equipment is smaller in size than that used by many of
its competitors. This allows Cardinal's P&A work to be completed from liftboats
and other work platforms with low-lift capabilities rather than using a
drilling rig. Cardinal believes that the use of its liftboat fleet to perform
P&A work provides a competitive advantage over many of its competitors, while
allowing it to offer its customers a cost advantage over traditional P&A
methods.

Coiled Tubing Services. Throughout the Gulf of Mexico and onshore Gulf Coast
Cardinal provides coiled tubing services to oil and gas operators requiring
advanced well remediation services. Cardinal's six coiled tubing units and
related nitrogen equipment can be truck-mounted for onshore operations,
transported to offshore platforms, or utilized offshore in conjunction with
Cardinal's liftboat fleet. Cardinal entered the coiled tubing market in 1997
and believes that it currently operates one of the newest, most technologically
advanced coiled tubing fleets in the Gulf of Mexico. In addition to the
services that can be performed by mechanical and electric wireline equipment,
coiled tubing equipment is able to perform well remediation services at higher
pressures and in deviated wellbores (ie, horizontally or directionally drilled
wells).

Logging, Data Acquisition and Interpretation Services. Cardinal's downhole
logging, data acquisition and interpretation services are provided with a
mechanical wireline unit and are designed to optimize well productivity.
Through its high-precision downhole memory pressure gauges and advanced
software packages, Cardinal is able to measure downhole well conditions such as
pressure, temperature and flow properties and

39
<PAGE>

subsequently simulate well performance and the reservoir's production
characteristics. Cardinal maintains trained and experienced crews at the
wellsite to monitor all testing procedures and to collect the comprehensive
wellsite information necessary to perform the complete production analysis of
the well test data. Cardinal's advanced well testing software includes test
design tools, well models, model validation capabilities and inter-well
analysis capabilities. After integrating the well test results with its system
analysis software, Cardinal provides its customers with an analysis of the well
problems as well as corrective procedure recommendations.

Cardinal also offers memory (as opposed to real-time) production logging
services performed in conjunction with certain mechanical wireline services.
Memory logging services delivered via mechanical wireline require less
workspace and wellhead control equipment, reduce mobilization costs and are
more cost effective than traditionally expensive diagnostic logs. Cardinal
provides on-site data viewing to ensure that the acquired data is recorded
successfully before leaving the well location.

Oil and gas producers increasingly are emphasizing the maximization of their
existing wells' productivity through well production simulation and reservoir
monitoring. By packaging logging, data acquisition and interpretation services
with mechanical wireline services, Cardinal believes it can offer more complete
and cost-effective downhole production services.

40
<PAGE>

Fleet of Marine Service Vessels

<TABLE>
<CAPTION>
Leg Primary Year Living
Length Crane Capacity Built/Rebuilt Quarter Capacity
------ -------------- ------------- ----------------
(feet) (tons)
<S> <C> <C> <C> <C>
Liftboats:
D.L. Hanson.............. 200 100 1997 43
W. Lopez................. 200 100 1998 37
P.G. Jones............... 200 100 1998 37
P.J. Richard............. 155 70 1981 28
J.A. Holleman............ 150 40 1981 32
J.N. Mitchell............ 145 70 1982 32
C.G. Hentze.............. 145 70 1982 26
J. Scarboro.............. 145 70 1980 26
C.A. Babin............... 145 70 1981 22
P.H. Holmes.............. 145 40 1981 24
H.G. Louviere............ 145 25 1980 30
R.P. Rodrigue............ 130 70 1980 20
F.G. Derouen............. 130 30 1985 24
R.E. Thibodeaux.......... 130 25 1980 34
T.D. Saunier............. 120 30 1976 20
G.O. Roach............... 120 30 1982 12
R.E. Johnson............. 105 30 1976 23
D.J. Viator.............. 105 25 1980 20
Al Breaux................ 105 25 1980 20
E.J. Henry............... 105 25 1978 17
R.P. Weeks............... 105 25 1974 12
L.M. Romero.............. 105 15 1977 15
D.J. Mitchell............ 105 15 1991 15
R.E. Sanders............. 90 10 1979 8
S.M. Darby............... 90 10 1979 8
C.D. Little.............. 75 10 1978 10
D.J. Sanders............. 75 5 1978 5
D. VanCampen............. 66 10 1976 4
D.J. Richard............. 65 15 1981 12
H. Polk.................. 65 10 1979 4
H. Bennett............... 60 10 1979 6
R.P. Berthet............. 60 10 1978 6
Leo Comeaux.............. 60 10 1983 4
J.W. Collins............. 60 10 1980 4
J.L. Romero.............. 60 10 1981 4
K.D. Knapp............... 60 10 1977 4
D.R. Hermecz............. 60 10 1978 4
C.C. LeBlanc............. 60 10 1979 4
P.E. Darby............... 60 10 1978 4
T.C. Holleman............ 60 10 1978 4
C.C. LeMaire............. 60 10 1981 3
CE II.................... 45 5 1970 4

Supply Vessels (100 feet
in length):
C.L. Norris N/A N/A 1980 16
S.Y. Graham N/A N/A 1977 8

Spud Boats:
Cardinal I............... 30 5 1968 2
Cardinal II.............. 30 5 1965 2
Cardinal III............. 25 5 1972 2
Redbird.................. 25 3 1965 2
</TABLE>

41
<PAGE>

SELECTED CONSOLIDATED FINANCIAL DATA
OF
SUPERIOR ENERGY SERVICES, INC.

The following table sets forth selected historical financial data for
Superior as of and for each of the periods indicated. The financial data as of
and for the years ended December 31, 1994 through 1998, are derived from the
audited consolidated financial statements of Superior. The financial data for
the three months ended March 31, 1998 and 1999, are derived from Superior's
unaudited consolidated financial statements which, in the opinion of
management, include all adjustments (which consist only of normal recurring
adjustments) necessary for a fair presentation of the financial position and
results of operations of Superior for such interim periods. The following
information should be read in conjunction with "Management's Discussion and
Analysis of Financial Condition and Results of Operations" and the financial
statements of Superior and the related notes thereto included elsewhere in this
Proxy Statement.

<TABLE>
<CAPTION>
Three Months
Ended March 31,
Year ended December 31, (unaudited)
------------------------------------------- ----------------
1994 1995 1996 1997 1998 1998 1999
------- ------- ------- ------- ------- ------- -------
(in thousands, except earnings per share)
<S> <C> <C> <C> <C> <C> <C> <C>
Statement of Operations
Data(1):
Revenues................ $11,088 $12,338 $23,638 $54,256 $91,334 $22,702 $18,042
------- ------- ------- ------- ------- ------- -------
Costs and expenses:
Costs of services..... 6,785 7,487 11,040 23,216 43,734 9,562 7,601
Depreciation and
amortization......... 149 259 1,323 3,272 7,494 1,661 2,142
Special charges(2).... -- 4,042 -- -- 13,763 -- --
General and
administrative....... 2,310 3,179 5,531 12,530 22,921 5,197 6,149
------- ------- ------- ------- ------- ------- -------
Total costs and
expenses............ 9,244 14,967 17,894 39,018 87,912 16,420 15,892
------- ------- ------- ------- ------- ------- -------
Income (loss) from
operations............. 1,844 (2,629) 5,744 15,238 3,422 6,282 2,150
Other income (expense)
Interest expense--
net.................. (40) (86) (127) (722) (1,490) (230) (500)
Merger
termination(3)....... -- -- -- -- (2,237) -- --
Gain on sale of
subsidiary........... -- -- -- -- 1,176 1,176 --
------- ------- ------- ------- ------- ------- -------
Income (loss) before
income taxes........ 1,804 (2,715) 5,617 14,516 871 7,228 1,650
Provision for income
taxes(4)............... 667 640 1,685 5,061 4,979 2,747 627
------- ------- ------- ------- ------- ------- -------
Net income (loss)..... $ 1,137 $(3,355) $ 3,932 $ 9,455 $(4,108) $ 4,481 $ 1,023
======= ======= ======= ======= ======= ======= =======
Income (loss) per share
(diluted).............. $ 0.14 $ (0.38) $ 0.22 $ 0.43 $ (0.14) $ 0.15 $ .04
======= ======= ======= ======= ======= ======= =======
Weighted average shares
outstanding (diluted).. 8,400 8,848 17,619 21,993 28,982 29,531 28,822
======= ======= ======= ======= ======= ======= =======
Other Financial Data:
EBITDA(5)............. $ 1,993 $ 1,672 $ 7,067 $18,510 $25,369 $ 7,943 $ 4,292
Cash flows from
operating
activities........... 1,632 3,616 2,676 2,343 18,126 7,015 5,957
Cash flows from
investing
activities........... (432) (610) (5,932) (57,597) (29,206) (7,518) (2,614)
Cash flows from
financing
activities........... (1,430) 1,855 (1,379) 56,723 9,915 883 (2,949)
Balance Sheet Data (end
of period):
Cash and cash
equivalents.......... $ 207 $ 5,068 $ 433 $ 1,902 $ 737 $ 2,282 $ 1,131
Property, plant and
equipment--net....... 1,193 6,904 9,894 51,797 76,187 59,484 76,647
Total assets.......... 4,422 22,984 28,200 118,060 131,144 125,022 124,032
Total long-term debt
including current
portion.............. 750 4,671 1,772 11,339 27,955 12,165 25,006
Total stockholders'
equity(6)............ 2,273 13,094 20,349 88,853 82,704 93,390 83,727
</TABLE>
- --------
(1) In 1996, Superior acquired all of the outstanding common stock of two
companies for a combined $2.7 million in cash, 1.6 million shares of
Superior Common Stock, a note payable of $1.0 million and promissory notes
providing for payments of up to $0.8 million.

42
<PAGE>

In 1998, Superior acquired all of the outstanding common stock of two
companies for a combined $3.9 million in cash. Additional consideration, if
any, will be based on a multiple of earnings, not to exceed a combined
$50.1 million.

The promissory notes and additional consideration are subject to
contingencies and were not reflected in the purchase price of the
respective acquisitions.

(2) On December 31, 1995, Superior elected the early adoption of Statement of
Financial Accounting Standards (FAS) No. 121, Accounting for the Impairment
of Long-Lived Assets and for Long-Lived Assets to be Disposed Of. The
undiscounted net cash flows from a joint venture were less than the
carrying value of the fixed assets devoted to the joint venture and
associated goodwill, indicating that an impairment had taken place. This
resulted in Superior recognizing a non-cash charge in 1995 of $4.0 million,
consisting of the write-off of $3.5 million of goodwill and $0.5 million of
property, plant and equipment. In 1998, Superior recorded a pre-tax special
charge which consisted of $12.1 million for impairment of goodwill,
$930,000 in patents and $690,000 in associated inventory as a result of
obsolescence and $650,000 associated with a reduction in employees as a
result of the general decline in the industry. The portion of the special
charge related to inventory obsolescence is included in costs of services
in the consolidated statement of operations.

(3) In 1998, Superior entered into an agreement to merge with Parker. Superior
and Parker subsequently jointly agreed to terminate the merger. As part of
the termination, Superior agreed to pay a termination fee.

(4) Gives pro forma effect to income taxes in 1994 and 1995 for the full year.
Prior to the share exchange offer completed in December 1995, described in
the 1995 10-KSB Superior was an S corporation and, as a result, paid no
federal or state income taxes at the corporate level.

(5) Superior calculates EBITDA (earnings before interest expense, income taxes,
depreciation and amortization) as operating income plus depreciation and
amortization, special charges, and merger termination costs less gain on
sale of subsidiary. EBITDA should not be considered as an alternative to
net income or any other measure of operating performance calculated in
accordance with generally accepted accounting principles. EBITDA is widely
used by financial analysts as a measure of financial performance.
Superior's measurement of EBITDA may not be comparable to similarly titled
measures reported by other companies.

(6) Superior issued $36.9 million of common stock in November 1997.

43
<PAGE>

SELECTED CONSOLIDATED FINANCIAL DATA
OF
CARDINAL HOLDING CORP.

The following selected financial data for the four years ended December 31,
1998 are derived from the audited consolidated financial statements of
Cardinal. The selected financial data for the year ended December 31, 1994 and
the financial data for the three month periods ended March 31, 1998 and 1999
are derived from unaudited financial statements. The unaudited financial
statements include all adjustments, consisting of normal recurring accruals,
which Cardinal considers necessary for a fair presentation of the financial
position and the results of operations for these periods. Operating results for
the three months ended March 31, 1999 are not necessarily indicative of the
results that may be expected for the entire year ending December 31, 1999. The
data should be read in conjunction with the consolidated financial statements,
related notes, and other financial information included herein.

<TABLE>
<CAPTION>
Three Months
Year ended December 31, Ended March 31,
--------------------------------------------- ----------------
1994 1995 1996 1997 1998 1998 1999
--------- ------- ------- ------- ------- ------- -------
(in thousands except share and operating data)
<S> <C> <C> <C> <C> <C> <C> <C>
Statement of Operations
Data(1):
Operating Revenue....... $ 21,802 $28,798 $48,128 $63,412 $82,223 $18,982 $18,978
Operating expenses:
Labor.................. 7,815 9,989 14,872 18,709 25,075 5,163 7,061
Maintenance............ 1,510 2,392 4,557 4,451 4,626 975 1,207
Insurance.............. 1,841 2,121 2,681 2,503 3,746 697 734
Depreciation and
amortization.......... 2,466 2,650 3,509 4,207 6,118 1,195 1,810
Cost of goods sold..... 839 1,194 1,627 2,087 1,809 446 503
Other.................. 2,352 3,306 4,219 5,386 9,350 1,576 1,714
--------- ------- ------- ------- ------- ------- -------
Total operating
expenses............ 16,823 21,652 31,465 37,343 50,724 10,052 13,029
--------- ------- ------- ------- ------- ------- -------
Gross profit............ 4,979 7,146 16,663 26,069 31,499 8,930 5,949
General and
administrative
expenses............... 3,503 4,412 8,317 10,842 15,729 4,142 3,297
--------- ------- ------- ------- ------- ------- -------
Income from operations.. 1,476 2,734 8,346 15,227 15,770 4,788 2,652
Other income (expense):
Interest(2)............ (1,298) (2,204) (3,448) (5,464) (12,641) (2,698) (3,201)
Consulting fees paid
to related party...... -- -- (300) (1,150) -- -- --
Other, net............. 189 (17) 2 58 (777) (515) (2)
--------- ------- ------- ------- ------- ------- -------
Income (loss) before
income taxes and
extraordinary loss..... 367 513 4,600 8,671 2,352 1,575 (551)
Income taxes (benefit).. 151 180 1,706 4,350 1,149 591 (98)
--------- ------- ------- ------- ------- ------- -------
Income (loss) before
extraordinary loss(3)
(4).................... 216 333 2,894 4,321 1,203 984 (453)
Extraordinary loss, net
of income tax benefit.. -- 1,335 -- -- (10,885) (10,885) --
--------- ------- ------- ------- ------- ------- -------
Net income (loss)....... 216 (1,002) $ 2,894 $ 4,321 $(9,682) $(9,901) $ (453)
========= ======= ======= ======= ======= ======= =======
Net income (loss) before
extraordinary loss
assuming dilution(5)... $ 4.26 $ 9.63 $ 47.69 $ 72.23 $ 21.09 $ 20.25 $(64.53)
========= ======= ======= ======= ======= ======= =======
Average shares
outstanding assuming
dilution............... 59,420 59,420 59,420 59,420 22,047 48,595 16,674
========= ======= ======= ======= ======= ======= =======
Other Financial Data:
EBITDA(6).............. $ 4,483 $ 6,012 $12,042 $19,708 $22,101 $ 5,571 $ 4,795
Rental Fleet Data:
Rental Fleet Size...... 13.0 15.8 25.0 26.5 29.3 28.0 29.0
Average Day Rate....... $ 1,472 $ 2,037 $ 3,231 $ 4,201 $ 4,191 $ 4,776 $ 3,266
Utilization %.......... 79% 79% 83% 80% 76% 77% 71%
Average Boat Size (leg
length)............... 100' 105' 119' 120' 128' 128' 128'
Wireline Data:
Average Wireline not 39.2 42.5 41.1 45.2 52.9 53.2
Jobs/Day.............. available
Average Revenue per not $ 957 $ 1,007 $ 1,173 $ 1,367 $ 1,199 $ 1,568
Job................... available
</TABLE>

44
<PAGE>

<TABLE>
<CAPTION>
Three Months
Year ended December 31, Ended March 31,
---------------------------------------- ------------------
1994 1995 1996 1997 1998 1998 1999
------- ------- ------- ------- -------- -------- --------
(in thousands except share and operating data)
<S> <C> <C> <C> <C> <C> <C> <C>
Balance Sheet Data (end
of period):
Cash and cash
equivalents............ $ 61 $ 858 $ 153 $ -- $ 421 $ -- $ 266
Property, plant and
equipment--net......... 10,249 27,641 28,986 43,737 60,328 51,469 59,661
Total assets............ 16,809 40,402 11,630 62,387 107,961 77,903 102,426
Long-term obligations... 8,580 31,394 26,905 36,804 127,620 125,000 126,182
Total shareholder's
equity (deficiency).... 1,074 99 4,197 5,646 (39,940) (59,262) (35,263)
</TABLE>
- --------
(1) In October 1995, Cardinal acquired 11 lift boats from two competitors for a
cash purchase price of $18.5 million.
From December 1996 to March 1998 Cardinal contracted for the construction
and took delivery of three lift boats for a total price of $17.6 million.
In 1998, Cardinal purchased all of the outstanding common stock of three
companies for a combined $22.4 million in cash and $1.4 million in stock.
(2) In October 1995, Cardinal refinanced revolving credit notes payable and a
term loan note payable to a bank and a subordinated note payable to an
investment company (the "1995 Refinancing"). Cardinal also paid a
negotiated amount of $2.4 million to the bank as a prepayment premium and
to redeem stock warrants issued to the bank. Management estimated the value
of these warrants to be approximately $750,000 immediately prior to the
1995 Refinancing and recorded this amount as interest expense. The
remaining portion of the payment, along with the write-off of certain debt
acquisition and interest rate cap agreement costs related to the bank debt
was recorded, net of income taxes, as an extraordinary loss.
(3) In connection with the 1995 Refinancing, Cardinal issued warrants to
holders of its subordinated debt to purchase approximately nine percent (on
a diluted basis) of Cardinal Services, Inc.'s nonvoting common stock at a
price of $.01 per share. These warrants allowed the warrant holders to put
the warrants to Cardinal Services under certain circumstances, including
the passage of time and the occurrence of certain capital transactions. The
estimated value at the end of each year was amortized over the earliest put
date of the warrants. Interest expense in 1996, 1997 and 1998 includes
$280,000, $2,173,000 and $362,000, respectively, related to these warrants.
On February 26, 1998, Cardinal redeemed the warrants for $13,320,000 (see
note 5).
(4) On February 26, 1998, Cardinal completed a recapitalization which included
(i) the issuance of 10,267 shares of Class A Common Stock for $30 million,
(ii) the issuance of 10,267 shares of Class C Preferred Stock for $30
million, and (iii) the redemption of 51,583 shares of Class A Common Stock
for $114.68 million, and (iv) the redemption of warrants related to 11,870
shares of Cardinal Services, Inc. nonvoting common stock in exchange for
$13,320,000 (the "Recapitalization"). In addition, Cardinal refinanced
substantially all of its long-term debt (the "Refinancing"). The
Recapitalization and Refinancing were funded through the issuance of $105
million of senior secured debt, $20 million of subordinated debt, which
includes $2 million accounted for as original issue discount relating to
the issuance of 350 shares of Class A Common Stock and 350 shares of Class
C Preferred Stock, and $60 million of equity investments discussed in (i)
and (ii) above. On the date of the Recapitalization and Refinancing,
Cardinal charged off $10,885,000 which included the unamortized estimated
value of the warrants of $10,505,000 and unamortized debt acquisition costs
of $380,000 (net of $235,000 tax benefit).
(5) See Note 6 to Cardinal's financial statements for earning per share
computations.
(6) Cardinal calculates EBITDA (earnings before interest expense, income taxes,
depreciation and amortization) as income before income taxes and
extraordinary items, plus interest expense, depreciation and amortization.
EBITDA is presented not as an alternative measure of operating results or
cash flow from operations (as determined in accordance with generally
accepted accounting principles), but because it is a widely accepted
financial indicator of a company's ability to incur and service debt.
Cardinal's measurement of EBITDA may not be comparable to similarly titled
measures reported by other companies. The EBITDA of Cardinal does not
exclude the impact of certain private company transactions during 1995
through 1998, nor does it exclude one-time costs associated with the
Recapitalization and Refinancing. Had these items been excluded, EBITDA
would have been $6,548,000, $15,285,000, $24,732,000 and $26,181,000, for
the years 1995, 1996, 1997 and 1998, respectively, and $7,603,000, for the
quarter ended March 31, 1998.

45
<PAGE>

SUPERIOR ENERGY SERVICES, INC.

UNAUDITED PRO FORMA CONDENSED CONSOLIDATED FINANCIAL INFORMATION

(unaudited)

The following unaudited pro forma condensed consolidated financial
information has been prepared by management utilizing the historical
consolidated financial statements of Superior and Cardinal. In 1998, Superior
acquired Tong Specialty, Inc. and Lamb Services, Inc. (collectively, the "Lamb
Companies") and Hydro-dynamics Oilfield Contractors, Inc. ("Hydro-dynamics")
(the "1998 Superior acquisitions"). The historical financial information has
been included for the Lamb Companies through May 31, 1998 and Hydro-dynamics
through August 31, 1998, the dates of the acquisitions by Superior. Also in
1998, Cardinal acquired Moores Wireline, Inc. and Moores Engineering, Inc.
(collectively, the "Moores Companies") and Gunn Wireline, Inc. ("Gunn") (the
"1998 Cardinal acquisitions"). The historical financial information has been
included for the Moores Companies through April 30, 1998 and Gunn through
September 30, 1998, the dates of the 1998 Cardinal acquisitions. Adjustments
have been made to reflect the financial impact of purchase accounting and other
items had the 1998 acquisitions and Merger taken place on January 1, 1998 with
respect to operating data and March 31, 1999 with respect to the balance sheet
data. The pro forma adjustments are described in the accompanying notes and are
based upon preliminary estimates and certain assumptions that management of the
companies believe reasonable under the circumstances.

The unaudited pro forma condensed consolidated financial information is for
comparative purposes only and does not purport to be indicative of the results
which would actually have been obtained had the acquisitions been effected on
the pro forma dates, or of the results which may be obtained in the future. The
unaudited pro forma condensed consolidated financial information in the opinion
of management reflects all adjustments necessary to present fairly the data for
such periods.

The unaudited pro forma condensed consolidated financial information should
be read in conjunction with the historical financial data appearing elsewhere
in this Proxy Statement.

46
<PAGE>

SUPERIOR ENERGY SERVICES, INC.

UNAUDITED PRO FORMA CONDENSED CONSOLIDATED BALANCE SHEET

March 31, 1999

(In thousands)

<TABLE>
<CAPTION>
Historical Historical Pro Forma Pro
Superior Cardinal Adjustments Forma
ASSETS ---------- ---------- ----------- --------
<S> <C> <C> <C> <C>
Cash.............................. $ 1,131 266 1,397
Accounts receivable............... 17,216 17,446 34,662
Deferred tax asset................ -- 624 624
Inventories....................... 3,030 -- 3,030
Income tax receivable............. -- 151 151
Other............................. 1,928 2,604 A 500 5,032
-------- -------- --------
Total current assets............ 23,305 21,091 44,896
Property, plant & equipment--net.. 76,647 59,661 136,308
Goodwill--net..................... 24,080 17,055 A 30,109 71,244
Other Assets--net................. -- 4,619 A 500 5,119
-------- -------- --------
Total assets.................... $124,032 102,426 257,567
======== ======== ========

<CAPTION>
LIABILITIES AND STOCKHOLDERS'
EQUITY
<S> <C> <C> <C> <C>
Trade accounts payable............ $ 3,118 3,111 6,229
Accrued expenses.................. 3,035 1,853 B 2,000 7,888
A 1,000
Current maturities of long-term
debt............................. -- 7,595 7,595
Notes payable--other.............. -- 1,505 1,505
Income taxes payable.............. 534 -- 534
-------- -------- --------
Total Current Liabilities....... 6,687 14,064 23,751
Long-term debt.................... 25,006 100,719 D (45,000) 80,725
Subordinated debt................. -- 17,868 17,868
Deferred income taxes............. 8,612 5,038 13,650
Stockholders' equity
Common stock...................... 29 -- C 30 59
Preferred stock................... -- 2 C (2) --
Additional paid-in capital........ 78,794 84,079 A 33,013 240,858
C (28)
D 45,000
Retained earnings................. 7,149 (119,344)A (5,149) (119,344)
B (2,000)
Treasury stock.................... (2,245) -- A 2,245 --
-------- -------- --------
Total stockholders' equity...... 83,727 (35,263) 121,573
-------- -------- --------
Total liabilities and
stockholders' equity........... $124,032 102,426 257,567
======== ======== ========
</TABLE>

47
<PAGE>

SUPERIOR ENERGY SERVICES, INC

UNAUDITED PRO FORMA CONDENSED CONSOLIDATED STATEMENT OF EARNINGS
FOR THE THREE MONTHS ENDED MARCH 31, 1999

(In thousands except per share data)

<TABLE>
<CAPTION>
Historical Historical Combined Pro Forma Pro
Superior Cardinal Pro Formas Adjustments Forma
---------- ---------- ---------- ----------- ------
<S> <C> <C> <C> <C> <C>
Revenues................. 18,042 18,978 37,020 -- 37,020
------ ------- ------ ----- ------
Costs and expenses:
Costs of services...... 7,601 11,219 18,820 -- 18,820
Depreciation and
amortization.......... 2,142 1,810 3,952 L 251 4,203
General and
administrative........ 6,149 3,297 9,446 L 63 9,509
------ ------- ------ ----- ------
Total costs and
expenses............ 15,892 16,326 32,218 314 32,532
------ ------- ------ ----- ------
Income from operations... 2,150 2,652 4,802 (314) 4,488
Other income (expense):
Interest expense....... (500) (3,201) (3,701)D 1,015 (2,686)
Other.................. -- (2) (2) -- (2)
------ ------- ------ ----- ------
Income (loss) before
income tax............ 1,650 (551) 1,099 701 1,800
Provision for income
taxes................... 627 (98) 529 M 191 720
------ ------- ------ ----- ------
Net income........... 1,023 (453) 570 510 1,080
====== ======= ====== ===== ======
Net income (loss) per
common share and common
share equivalent........ $ 0.04 ($64.53) $ 0.02 $ 0.02
====== ======= ====== ======
Basic Weighted average
shares outstanding...... 28,793 17 28,793 N 58,792
====== ======= ====== ======
Net income (loss) per
common share and common
share equivalent........ $ 0.04 ($64.53) $ 0.02 $ 0.02
====== ======= ====== ======
Diluted Weighted average
shares outstanding...... 28,822 17 28,822 N 58,821
====== ======= ====== ======
</TABLE>

48
<PAGE>

SUPERIOR ENERGY SERVICES, INC.

UNAUDITED PRO FORMA CONDENSED CONSOLIDATED STATEMENT OF EARNINGS
FOR THE TWELVE MONTHS ENDED DECEMBER 31, 1998

(In thousands, except for per share data)

<TABLE>
<CAPTION>
1998 Superior 1998 Cardinal
Historical Superior Sale of Pro Forma Pro Historical Cardinal Pro Forma Pro
Superior Acquisitions Baytron Adjustments Forma Cardinal Acquisitions Adjustments Forma
---------- ------------ ------- ----------- -------- ---------- ------------ ----------- --------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Revenues......... 91,334 8,517 489 -- 99,362 82,223 8,080 -- 90,303
------ ----- --- ---- ------ ------- ----- ---- -------
Costs and
expenses:
Costs of
services........ 43,734 4,218 128 -- 47,824 44,606 5,429 -- 50,035
Depreciation and
amortization.... 7,494 372 51E (111) 7,704 6,118 418 I 301 6,837
Special
charges......... 13,763 -- -- -- 13,763 -- -- -- --
General and
administrative.. 22,921 4,577 295F (161) 27,042 15,729 836 -- 16,565
------ ----- --- ---- ------ ------- ----- ---- -------
Total costs and
expenses........ 87,912 9,167 474 (272) 96,333 66,453 6,683 301 73,437
------ ----- --- ---- ------ ------- ----- ---- -------
Income (loss)
from operations.. 3,422 (650) 15 272 3,029 15,770 1,397 (301) 16,866
Other income
(expense):
Interest
expense......... (1,490) (194) --G (136) (1,820) (12,641) (216)J (234) (13,091)
Merger
termination..... (2,237) -- -- -- (2,237) -- -- -- --
Other........... 1,176 -- -- -- 1,176 (777) -- -- (777)
------ ----- --- ---- ------ ------- ----- ---- -------
Income (loss)
before income
tax............. 871 (844) 15 136 148 2,352 1,181 (535) 2,998
Provision for
income taxes..... 4,979 20 6H (307) 4,686 1,149 373 K (87) 1,435
------ ----- --- ---- ------ ------- ----- ---- -------
Income (loss)
before
extraordinary
loss............ (4,108) (864) 9 443 (4,538) 1,203 808 (448) 1,563
====== ===== === ==== ====== ======= ===== ==== =======
Net income (loss)
per common share
and common share
equivalent....... $(0.14) $(0.16) $ 21.09 $ 37.42
====== ====== ======= =======
Basic Weighted
average shares
outstanding...... 28,982 28,982 22 22
====== ====== ======= =======
Net income (loss)
per common share
and common share
equivalent....... $(0.14) $(0.16) $ 21.09 $ 37.42
====== ====== ======= =======
Diluted Weighted
average shares
outstanding...... 28,982 28,982 22 22
====== ====== ======= =======
<CAPTION>
Combined
Pro Pro Forma Pro
Formas Adjustments Forma
-------- ----------- --------
<S> <C> <C> <C>
Revenues......... 189,665 -- 189,665
------- ----------- --------
Costs and
expenses:
Costs of
services........ 97,859 -- 97,859
Depreciation and
amortization.... 14,541 L 1,038 15,579
Special
charges......... 13,763 -- 13,763
General and
administrative.. 43,607 L 250 43,857
------- ----------- --------
Total costs and
expenses........ 169,770 1,288 171,058
------- ----------- --------
Income (loss)
from operations.. 19,895 (1,288) 18,607
Other income
(expense):
Interest
expense......... (14,911)D 4,060 (10,851)
Merger
termination..... (2,237) -- (2,237)
Other........... 399 -- 399
------- ----------- --------
Income (loss)
before income
tax............. 3,146 2,772 5,918
Provision for
income taxes..... 6,121M 1,448 7,569
------- ----------- --------
Income (loss)
before
extraordinary
loss............ (2,975) 1,324 (1,651)
======= =========== ========
Net income (loss)
per common share
and common share
equivalent....... $ (0.10) $ (0.03)
======= ========
Basic Weighted
average shares
outstanding...... 28,982 N 58,981
======= ========
Net income (loss)
per common share
and common share
equivalent....... $ (0.10) $ (0.03)
======= ========
Diluted Weighted
average shares
outstanding...... 28,982 N 58,981
======= ========
</TABLE>

49
<PAGE>

SUPERIOR ENERGY SERVICES, INC.

NOTES TO UNAUDITED PRO FORMA CONDENSED CONSOLIDATED FINANCIAL INFORMATION

(A) This adjustment reflects the reverse acquisition of Superior by Cardinal
(the Merger). Superior will exchange approximately 30 million shares of
Superior Common Stock for 100% of the outstanding stock of Cardinal.
Because of the controlling interest that the Cardinal stockholders will
have in the combined entity, among other factors, the transaction will be
accounted for as a reverse acquisition which will result in the adjustment
of the net assets of Superior to their estimated fair values required by
the rules of purchase accounting. The net assets of Cardinal are reflected
in this transaction at their historical book values. The valuation of
Superior's net assets is based upon the approximate 28.8 million shares of
Superior Common Stock outstanding prior to the merger times the trading
price of $3.78 at the time of negotiation of the merger, plus additional
capitalized costs of approximately $3 million related to the Cardinal
merger costs for professional fees net of $2 million in Superior merger
costs expensed. Superior's historical book basis for its property, plant
and equipment is considered to be its fair market value. Agreements not to
compete related to two Superior employees, have been recorded at their fair
market value of $1 million. The valuation reflects excess purchase price of
$30,109,000, over the fair value of net assets. Such amount has been
recorded as goodwill and is being amortized over 30 years.
(B) To record the merger costs associated with Superior, the acquired company.

(C) To reflect the exchange of 100% of Cardinal's outstanding stock for
approximately 30 million shares of Superior Common Stock, $.001 par value .

(D) To record the equity contribution of $45 million to Cardinal, used to pay
down debt. The associated reduction in interest expense due to the equity
contribution, uses Cardinal's borrowing rate of 8.12%, on an equity
contribution of $50 million, since the $5 million was placed on March 31,
1999.
(E) In 1998, Superior acquired all of the outstanding common stock of the Lamb
Companies and Hydro-dynamics (1998 Superior acquisitions) for an aggregate
$3,857,000 in cash. Payment of an additional $750,000 for the Hydro-
dynamics acquisitions will be based on the attainment of certain
objectives. At the third anniversary of each acquisition, additional cash
consideration, if any, will be based upon a multiple of four times the
acquired company's average earnings before interest, taxes, depreciation
and amortization (EBITDA) over a three year period from the date of
acquisition, and will be capitalized as additional purchase price. In no
event will the total additional payments exceed $50,143,000. The property,
plant and equipment of the 1998 Superior acquisitions were valued at their
estimated fair value of approximately $5.04 million. Deferred taxes have
been provided for the difference between the book and tax basis of the
property. The remaining assets and liabilities approximated their fair
values. The excess purchase prices over the fair values of the net assets
of the 1998 Superior acquisitions of approximately $1.5 million was
allocated to goodwill and is being amortized over 30 years.

To reflect depreciation and amortization of goodwill associated with 1998
Superior acquisitions, and the sale of Baytron, Inc. (Baytron) for the pro
forma for the twelve months ended December 31, 1998.

<TABLE>
<CAPTION>
Lamb Hydro Sale of
Companies Dynamics Baytron Total
Adjustments For: --------- -------- ------- -----
<S> <C> <C> <C> <C>
Depreciation............................ $ (137) 2 10 (125)
Amortization............................ 9 18 (13) 14
------ --- --- ----
Total................................. $ (128) 20 (3) (111)
====== === === ====
</TABLE>
(F) To adjust compensation for employees to amounts per employment agreements
entered in connection with the 1998 Superior acquisitions.
(G) To record the increase in interest expense resulting from additional debt
to finance $3,857,000 cash for the 1998 Superior acquisitions' purchase
prices. The interest rate on the new line of credit debt is assumed to be
7.31%. A change of 1/8 percent in the interest rate would result in a
change in interest expense of $2,000.

(H) To adjust Superior's provision for income taxes to give effect to the 1998
Superior acquisitions and the sale of Baytron.

50
<PAGE>

(I) In 1998, Cardinal acquired all of the outstanding common stock of the
Moores companies and Gunn (1998 Cardinal acquisitions) for an aggregate
$19.8 million in cash, $1.4 million in CSI stock, $1.8 million in bank debt
and $800,000 in other. The remaining assets and liabilities approximated
their fair values. The excess purchase prices over the fair values of the
net assets of the 1998 Cardinal acquisitions of approximately $17.2 million
was allocated to goodwill and is being amortized over a period of 15-30
years.

To reflect amortization of goodwill associated with the 1998 Cardinal
acquisitions for the pro forma twelve months December 31, 1998

<TABLE>
<CAPTION>
Moore
Companies Gunn Total
Adjustments For: --------- ---- -----
<S> <C> <C> <C>
Amortization......................................... $188 113 301
---- --- ---
Total.............................................. $188 113 301
==== === ===
</TABLE>
(J) To record the increase in interest expense resulting from additional debt
to finance $8,500,000 cash for the 1998 Cardinal acquisitions' purchase
prices. The interest rate on the debt is assumed to be 8.25%. A change of
1/8 percent in the interest rate would result in a change in interest
expense of $3,541.
(K) To adjust Cardinal's provision for income taxes to give effect to the 1998
Cardinal acquisitions.
(L) To record the amortization of goodwill over 30 years and the non-compete
agreements over 4 years.
(M) To adjust the provision for income taxes to give effect to the Merger's
adjustments, exclusive of the amortization adjustment.

(N) Pro forma net income(loss) per Common Share is computed using the
approximately 28.8 million shares of Superior Common Stock outstanding and
the approximately 30 million shares of Superior Common Stock to be
exchanged in the Merger.

51
<PAGE>

SUPERIOR ENERGY SERVICES, INC.

MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS

Overview

Demand for Superior's rental tools and well services is primarily a function
of oil and gas exploration and workover activity in the Gulf of Mexico and
along the Gulf Coast. The level of oilfield activity is affected in turn by the
willingness of oil and gas companies to make capital expenditures for the
exploration, development and production of oil and natural gas, and the levels
of such capital expenditures are influenced by oil and gas prices, the cost of
exploring for, producing and delivering oil and gas, the sale and expiration
dates of leases in the United States, the discovery rate of new oil and gas
reserves, local and international political and economic conditions and the
ability of oil and gas companies to generate capital. Demand for Superior's P&A
services is primarily a function of the number of offshore producing wells that
have ceased to be commercially productive, increased environmental awareness
and the desire of oil and gas companies to minimize abandonment liabilities.

The oilfield services industry experienced a significant decline in activity
in the last half of 1998 which has continued into the first quarter of 1999.
Superior's rental tool business has been impacted, but not as much as many
other areas of the oilfield service industry because it is primarily
concentrated in workover activity and deep water drilling projects which have
not been affected as much as other areas of the industry. Superior's P&A
segment has been adversely affected as some major and independent oil and gas
companies have elected to defer making these expenditures. However, as a result
of these deferrals and increased depletion rates, the backlog of wells
requiring plug and abandonment continues to increase. Should the decline in
overall industry activity levels continue, it could have a material adverse
effect on Superior's financial condition and results of operations.

Comparison of the Results of Operations for the Quarters Ended March 31, 1999
and 1998.

Superior's revenues were $18 million for the quarter ended March 31, 1999 as
compared to $22.7 million for the same period in 1998. In the first quarter of
1999, Superior continued to be affected by the downturn in the industry
activity, which began in the last half of 1998. The decline in revenue is
primarily attributable to the well services segment since it is more
susceptible to the major and independent oil and gas companies' deferment of
discretionary spending. The rental tools segment's revenue has not been as
adversely affected by industry conditions as a result of its focus on workover,
remediation and deep water drilling activity. Although Superior's revenues
declined in the first quarter of 1999 compared to the same period in 1998,
Superior's gross margin remained constant at 58% for both quarters.

Depreciation and amortization increased 29%, to $2.1 million for the three
months ended March 31, 1999 from $1.7 million for the three months ended March
31, 1998. Most of the increase resulted from the larger asset base that has
resulted from Superior's 1998 acquisitions and capital expenditures. General
and administrative expenses increased 18%, to $6.1 million for the first
quarter of 1999 as compared to $5.2 million for the same period of 1998. The
increase is the result of the 1998 acquisitions completed during the second and
third quarters of 1998.

Net income for the quarter ended March 31, 1999 decreased 77.2% to $1
million as compared to $4.5 million for the comparable period in the prior
year. While the $1.2 million gain on the sale of subsidiary increased the net
income in the first quarter of 1998, Superior's results for the first quarter
of 1999 reflected the impact of the economic slowdown in the oil and gas
industry and customers' decisions to limit or defer investments in exploration,
drilling, production and plug and abandonment services.

52
<PAGE>

Comparison of the Results of Operations for the Years Ended December 31, 1998
and 1997.

Superior's performance in 1998 was impacted in the second half of the year
by the decline in activity in the oilfield services industry as a result of a
decline in oil prices. In addition, work in the Gulf of Mexico, which is
Superior's primary operating area, was virtually shut down during September
1998 by a series of storms and hurricanes.

Superior's revenue increased 68% to $91.3 million for the year ended
December 31, 1998, as compared to $54.3 million for the year ended December 31,
1997. The majority of the increase is primarily the result of a full year of
revenues from acquisitions made in 1997 in the rental segment.

Superior's gross margin decreased to 52.1% for the year ended December 31,
1998 as compared to 57.2% for the year ended December 31, 1997. This decrease
is primarily a result of the general decline in activity in the oilfield
services industry and a $690,000 charge for obsolete inventory as part of the
special charges discussed below. Although all three segments were impacted, the
well services segment had the largest decline as a result of several factors.
The well services segment was in the process of expansion in the latter part of
1997 and the beginning of 1998 which resulted in increased expenses at about
the time the P&A activity began to decline. During the year, due to competitive
pressures, Superior performed more turnkey basis projects, which impacted
Superior's gross margin negatively. Throughout the last half of 1998 and into
the first quarter of 1999, in response to the downturn in demand for Superior's
services, Superior has made an extensive effort to bring costs into line with
the reduced level of activity, and is considering further cost savings
measures.

Depreciation and amortization increased 129%, to $7.5 million for the year
ended December 31, 1998 as compared to $3.3 million for the year ended December
31, 1997. Most of the increase is a result of a full year of depreciation from
the 1997 acquisitions. Depreciation also increased as a result of $29.1 million
of capital expenditures in the year ended December 31, 1998 primarily for
purposes of expanding the rental tool inventory.

General and administrative expenses increased to $22.9 million for the year
ended December 31, 1998 as compared to $12.5 million for the year ended
December 31, 1997. Most of the increase is a result of a full year of general
and administrative expenses for the acquisitions made in 1997 as well as
acquisitions made in 1998. Interest expense increased to $1.4 million for the
year ended December 31, 1998 from $722,000 for the year ended December 31, 1997
as a result of an increase in borrowings to fund capital expenditures as well
as two acquisitions.

Net income before special charges, merger termination expenses and gain on
sale of subsidiary was $10.2 million or diluted earnings per share of $0.34 for
the year ended December 31, 1998 as compared to net income of $9.5 million or
diluted earnings per share of $0.43 for the year ended December 31, 1997.

During the year ended December 31, 1998, Superior recorded a pre-tax special
charge of $14.4 million. The special charge consisted of $12.1 million for
impairment of goodwill, $930,000 in patents and $690,000 in associated
inventory as a result of obsolescence and $650,000 associated with a reduction
in employees as a result of the general decline in the industry. The portion of
the special charge related to inventory obsolescence is included in costs of
services in the consolidated statement of operations.

The non-cash writeoff of goodwill was recorded in accordance with Statement
of Financial Standards (FAS) No. 121, which requires that long-lived assets and
certain identifiable intangibles held and used by Superior be reviewed for
impairment whenever events or changes in circumstances indicate that the
carrying amount of an asset may not be recoverable. The severity as well as the
duration of the downturn in activity in the oil and gas industry is such an
event. In such instances where there is goodwill associated with the asset as a
result of a business combination accounted for using the purchase method, the
goodwill is eliminated before making any reduction of the carrying amounts of
the impaired long-lived assets.

53
<PAGE>

Superior's review of its long-lived assets indicated that the carrying value
of certain of Superior's assets used by Superior in its well services, rental
tools and oil containment boom businesses had been impaired. The fair value of
the assets was determined by discounting the estimated net cash flows generated
by the assets. The result was an impairment charge of $12.1 million for the
year ended December 31, 1998 consisting entirely of goodwill.

The special charges of $930,000 in patents and $690,000 in associated
inventory are a result of obsolescence in the oil containment boom business as
evidenced by declining cash flows. Superior also authorized and committed to
terminating thirty employees during the fourth quarter of 1998. As a result,
included in the special charge, is $650,000 for severance, employment contract
and benefits costs for the terminated employees.

During the fourth quarter of 1998, the Company entered into a merger
agreement with Parker, which was subsequently terminated by mutual consent. As
part of the termination, Superior agreed to pay Parker $2.125 million and also
incurred approximately $112,000 in additional costs associated with the merger
termination. In the first quarter of 1998, Superior sold a subsidiary for a
gain of approximately $1.2 million.

Comparison of the Results of Operations for the Years Ended December 31, 1997
and 1996

Superior experienced significant growth in revenue and net income in the
year ended December 31, 1997 as compared to the year ended December 31, 1996
due to continued strong demand for its products and services, internal growth
and growth through acquisitions.

Superior's revenue increased 130% to $54.3 million for the year ended
December 31, 1997 as compared to $23.6 million for the year ended December 31,
1996. Of this increase, approximately 26% was the result of internal growth of
Superior's operations and approximately 74% was the result of acquisitions
completed by Superior since July 1996.

Superior's gross margin increased to 57.2% for the year ended December 31,
1997 from 53.3% for the year ended December 31, 1996. This increase was
primarily due to the increase in the percentage of Superior's revenue that was
generated by its rental tool and data acquisition businesses, which tend to
have higher gross margins than Superior's other businesses.

Depreciation and amortization increased 147%, to $3.3 million for the year
ended December 31, 1997 from $1.3 million for the year ended December 31, 1996.
Most of the increase resulted from the larger asset base that has resulted from
Superior's acquisitions. General and administrative expenses as a percentage of
revenue decreased to 23.1% for the year ended December 31, 1997 from 23.4% for
the year ended December 31, 1996. Interest expense increased to $722,000 for
the year ended December 31, 1997 as compared to $127,000 for the year ended
December 31, 1996. This was primarily as a result of the interim financing of
the various acquisitions Superior made during 1997.

Net income increased 140% to $9.5 million for the year ended December 31,
1997 from $3.9 million for the year ended December 31, 1996, while diluted
earnings per share increased 95% to $0.43 from $0.22. The strong earnings
growth experienced by Superior is the result of both increased revenue and
higher profit margins. The increase in earnings per share during the period was
not commensurate with the increase in net income for the period as the average
number of shares outstanding for the year ended December 31, 1997 increased as
a result of the issuance of approximately 4.5 million shares upon the exercise
of Superior's Class B Warrants, which were redeemed in September 1997, and as a
result of the public offering of approximately 3.9 million shares of Superior
Common Stock completed in December 1997.

Liquidity and Capital Resources

For the year ended December 31, 1998, Superior had cash flows from
operations of $18.1 million, cash flows used in investing activities of $29.2
million and cash flows from financing activities of $9.9 million, compared to
$2.3 million, $57.6 million and $56.7 million, respectively, for the year ended
December 31, 1997.

54
<PAGE>

Superior's EBITDA (earnings before interest, income taxes, depreciation and
amortization expense) was $25.4 million for the year ended December 31, 1998 as
compared to $18.5 million for the year ended December 31, 1997. The EBITDA for
1998 of $25.4 million is exclusive of the gain on sale of subsidiary, the
merger termination and the special charge, which was mostly non-cash in nature.
These increases are primarily a result of the operations of the 1997
acquisitions being included for a full fiscal year. EBITDA should not be
considered as an alternative to net income or any other measure of operating
performance calculated in accordance with generally accepted accounting
principles. EBITDA is widely used by financial analysts as a measure of
financial performance. Superior's measurement of EBITDA may not be comparable
to similarly titled measures reported by other companies.

In 1998, Superior acquired all the outstanding common stock of three
companies for an aggregate of $3,857,000 cash. Additional cash consideration,
if any, will be based upon a multiple of four times the respective acquired
company's average EBITDA over a three-year period from the date of acquisition,
less certain adjustments. In no event, will the aggregate additional
consideration exceed $50,143,000. If the overall current industry activity
levels continue, the additional consideration would be materially less than the
maximum consideration. For additional information, see Note 3 of the notes to
Superior's consolidated financial statements.

Superior made additional capital expenditures in 1998 of $29.1 million
primarily for additional rental equipment. Other capital expenditures included
P&A equipment spreads and renovation of Superior's new operating facility. As
of the end of the first quarter of 1998, Superior consolidated all of its New
Orleans area sales and administrative functions in this facility.

During the second quarter of 1998, the Board of Directors approved the
purchase of up to 500,000 shares of the outstanding Superior Common Stock.
Under this program, Superior purchased a total of 474,500 shares of Superior
Common Stock at an average price of $4.73 per share. This repurchase program
has been discontinued.

In the first quarter of 1998, Superior made a final payment of $750,000 in
connection with the acquisition of Dimensional Oilfield Services, Inc. In the
first quarter of 1998, Superior received cash proceeds of $4.2 million from the
sale of Baytron, Inc. At the beginning of the fourth quarter of 1998, Superior
entered into a merger agreement with Parker. Superior and Parker subsequently
jointly agreed to terminate the merger agreement. As part of the termination,
Superior paid Parker $2.125 million and also incurred approximately $112,000 in
additional costs associated with the merger termination.

For the three months ended March 31, 1999, Superior had net income of $1
million, net cash flow from operations of $6 million, cash flows used in
investing activities of $2.6 million and cash flows used in financing
activities of $2.9 million, compared to $4.5 million, $7 million, $7.5 million
and $.9 million, respectively, for the same period in 1998. Superior's EBITDA
decreased to $4.3 million, as compared to $7.9 million, exclusive of the gain
on sale of a subsidiary, for the same period in 1998. The decrease in net
income, cash flow and EBITDA was primarily the result of the significant
decline in overall industry activity in the last half of 1998 which has
continued into the first quarter of 1999.

Superior maintains a bank credit facility which provides for a revolving
line of credit up to $45 million, matures on April 30, 2000, and bears interest
at an annual rate of LIBOR plus a margin that depends on Superior's debt
coverage ratio (currently 6.76% per annum). As of April 30, 1999, there was
$24.5 million outstanding under the bank credit facility. Borrowings under the
bank credit facility are available for acquisitions, working capital, letters
of credit and general corporate purposes. Indebtedness under the bank credit
facility is guaranteed by Superior's subsidiaries, collateralized by
substantially all of the assets of Superior and its subsidiaries, and a pledge
of all the common stock of Superior's subsidiaries. Pursuant to the bank credit
facility, Superior has also agreed to maintain certain financial ratios. The
bank credit facility also imposes certain limitations on the ability of
Superior to make capital expenditures, pay dividends or other distributions to
shareholders, make acquisitions or incur indebtedness outside of the bank
credit facility.

In the first three months of 1999, Superior made capital expenditures of
$2.6 million primarily for additional rental equipment. Management currently
believes that Superior will make additional capital

55
<PAGE>

expenditures, excluding acquisitions, of approximately $5 to $7 million in 1999
primarily to further expand its rental tool inventory. Superior believes that
cash generated from operations and availability under the bank credit facility
will provide sufficient funds for Superior's identified capital projects and
working capital requirements. However, part of Superior's strategy involves the
acquisition of companies that have products and services complementary to
Superior's existing base of operations. Depending on the size of any future
acquisitions, Superior may require additional equity financing and debt
financing possibly in excess of Superior's bank credit facility.

New Accounting Pronouncements

In June 1998, the Financial Accounting Standards Board issued Statement of
Financial Accounting Standards No. 133 ("FAS 133"), "Accounting for Derivative
Instruments and Hedging Activities." FAS 133 is effective for all fiscal
quarters of fiscal years beginning after June 15, 1999 and establishes
accounting and reporting standards for derivative instruments, including
certain derivative instruments embedded in other contracts, and for hedging
activities. FAS 133 requires that all derivative instruments be recorded on the
balance sheet at their fair value. Changes in the fair value of derivatives are
to be recorded each period in current earning or other comprehensive income,
depending on whether a derivative is designated as part of a hedge transaction
and, if it is, the type of hedge transaction. Earlier application of the
provisions of the Statement is encouraged and is permitted as of the beginning
of any fiscal quarter that begins after the issuance of the Statement. Due to
the fact that Superior does not currently use derivative instruments, adoption
of the Statement will not have a material effect on Superior's results of
operations, financial position, or liquidity.

Year 2000

Superior is assessing both the cost of addressing and the cost or the
consequence of incomplete or untimely resolution of the Year 2000 issue. This
process includes (i) the development of Year 2000 awareness, (ii) a review to
identify systems that could be affected by the Year 2000 issue, (iii) an
assessment of potential risk factors (including non-compliance by Superior's
suppliers, subcontractors and customers), (iv) the allocation of required
resources, (v) a determination of the extent of remediation work required, (vi)
the development of an implementation plan and time table, and (vii) the
development of contingency plans.

Superior makes use of computers in its processing of accounting, financial,
administrative, and management information. Additionally, Superior uses
computers as a tool for its employees to communicate among themselves and with
other persons outside the organization. Superior has identified its key
vendors, alternate vendors and key customers, and will contact the identified
group through questionnaires in early July to assess their efforts and progress
with Year 2000 issues. Superior is currently evaluating its non-information
technology equipment and any remedial action and/or contingency plan, and it
anticipates completion of its evaluations by August 31, 1999.

Superior is in the process of analyzing and evaluating the operational
problems and costs that would be reasonably likely to result from the failure
by Superior or certain third parties to complete efforts necessary to achieve
Year 2000 compliance on a timely basis. Superior is in the process of
evaluating all the material information technology ("IT") and non-IT systems
that it uses directly in its operations. Superior presently believes that the
year 2000 issue will not pose significant operational problems for Superior's
computer systems. However, if all significant Year 2000 issues are not properly
identified, or assessment, remediation and testing of its systems are not
effected timely, the Year 2000 issue could potentially have an adverse impact
on Superior's operations and financial condition. Superior believes that the
most reasonably likely worst-case scenario would be that Superior would revert
to the use of manual accounting records for billings, payments and collections.
In addition, the inability of principal suppliers and major customers to be
Year 2000 compliant could result in delays in deliveries from those suppliers
and collections of accounts receivable.

Superior believes that it will be able to implement successfully the changes
necessary to address the Year 2000 issues with reliance on its third party
vendors and does not expect the cost of such changes to have a material impact
on Superior's financial position, results of operations or cash flows in future
periods.

Quantitative and Qualitative Disclosures About Market Risk

Not Applicable.

56
<PAGE>

CARDINAL HOLDING CORP.

MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS

General

Cardinal was formed in December 1990 to acquire substantially all of the
assets and assume certain liabilities of Cardinal Services, Inc. ("Cardinal
Services"). Since Cardinal's acquisition of Cardinal Services in December 1990
(the "Cardinal Services Acquisition"), Cardinal has grown by purchasing vessels
from others, constructing vessels for its use, developing complementary service
lines, and through other strategic acquisitions.

Cardinal derives its revenues primarily from providing workover, remediation
and completion services to the oil and gas industry. These services are
typically related to the maintenance and repair of existing wells and
installations as well as services that enhance well performance and life span,
and are not directly tied to the drilling of new wells. These services
contributed to Cardinal's operating revenue as follows:

<TABLE>
<CAPTION>
Three Months
Years Ended December 31, Ended March 31,
-------------------------------------------- ----------------------------
1996 1997 1998 1998 1999
------------- ------------- ------------- ------------- -------------
(dollars in thousands)
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Marine vessel rental.... $24,752 51.4% $33,332 52.6% $37,963 46.2% $ 9,733 51.3% $ 5,957 31.4%
Mechanical Wireline..... 12,419 25.8% 14,508 22.9% 18,800 22.9% 3,696 19.5% 6,082 32.0%
Plugging and
abandonment............ 3,302 6.9% 4,773 7.5% 5,469 6.7% 1,143 6.0% 1,065 5.6%
Other(1)................ 7,655 15.9% 10,799 17.0% 19,991 24.2% 4,410 23.2% 5,874 31.0%
------- ----- ------- ----- ------- ----- ------- ----- ------- -----
Operating revenue....... $48,128 100.0% $63,412 100.0% $82,223 100.0% $18,982 100.0% $18,978 100.0%
======= ===== ======= ===== ======= ===== ======= ===== ======= =====
</TABLE>
- --------
(1) Other revenue includes revenues relating primarily to Cardinal's coiled
tubing and data acquisition activities.

----------------

Cardinal's customer base is comprised of both major and large independent
oil and gas operators, including most of the major producers in the Gulf of
Mexico. Cardinal performs periodic credit evaluations of its customers'
financial condition and generally does not require collateral. Credit losses
have historically been within management's expectations.

Cardinal's business is affected by various factors, including general
economic conditions and the price of oil and gas, which has experienced
significant fluctuations over the last 20 years. Cardinal's revenue tends to
fluctuate somewhat in line with commodity pricing. While its management
believes Cardinal could partially mitigate the impact of a general economic
downturn or a severe downturn in commodity pricing, there is no assurance that
Cardinal's results of operations would not be materially impacted by such
events. In response to competitive pressures from any of its current or future
competitors, Cardinal may be required to lower selling prices in order to
maintain or increase market share, and such measures could adversely affect
Cardinal's margins and operating results. In addition, since a significant
portion of Cardinal's business is carried out in the Gulf of Mexico, activity
can be impacted by severe weather including tropical storms and hurricanes.
Most of the tropical weather occurs during late summer, and rough seas and high
winds during other times of the year can also adversely impact Cardinal's
operations.

The principal components of Cardinal's expenses include labor, boat and
other equipment maintenance, insurance and depreciation. None of Cardinal's
employees are unionized. However, as activity levels in the oil and gas
industry increase, competition for skilled and semi-skilled labor within the
oil service industry has from time to time caused rapid increases in rates of
pay for many of the types of workers employed by Cardinal. The fleet of
liftboats operated by Cardinal is subject to required annual Coast Guard
inspections, as

57
<PAGE>

well as major hull inspections every 5 years and one minor hull examination
every 2.5 years. These inspections are held at Cardinal's shipyard in New
Iberia, which Cardinal believes has sufficient capacity to handle all of the
scheduled maintenance requirements for its vessels. Unlike many liftboat
operators, Cardinal operates its own shipyard, giving it increased flexibility
in the scheduling of maintenance and repairs.

Acquisitions

During 1998, Cardinal completed acquisitions of 100% of the outstanding
common stock of the businesses shown below, which were primarily engaged in
providing services for the oil and gas industry in the southern United States
and the Gulf of Mexico. These businesses were acquired using a combination of
cash and stock as consideration. Each of these acquisitions was accounted for
using the purchase method. The excess cost over the fair value of net assets
acquired has been recorded as goodwill and is being amortized on a straight-
line basis over periods ranging from 15 to 30 years. The operations of the
acquired businesses are included in the consolidated statements of operations
from the date of acquisition.

<TABLE>
<CAPTION>
Purchase
Date Company Name Price Services Offered
---- ------------------------ ----------- -------------------
<S> <C> <C> <C>
May 1998........ Moores Wireline, Inc. $10,888,337 Mechanical Wireline
May 1998........ Moores Engineering, Inc. 4,846,396 Data Engineering
September 1998.. Gunn Wireline, Inc. 8,350,472 Mechanical Wireline
</TABLE>

Recapitalization and Refinancing

On February 26, 1998, Cardinal completed a recapitalization and refinancing
(the "Recapitalization and Refinancing") which included (i) the issuance of
10,267 shares of Class A Common Stock for $30 million, (ii) the issuance of
10,267 shares of Class C Preferred Stock for $30 million, (iii) the redemption
of 51,583 shares of Class A Common Stock for $114.68 million, and (iv) the
redemption of warrants related to 11,870 shares of Cardinal Services nonvoting
common stock in exchange for $13.32 million. In addition, Cardinal refinanced
substantially all of its long-term debt. The Recapitalization and Refinancing
was funded through the issuance of $105 million of senior secured debt, $20
million of subordinated debt which includes $2 million accounted for as
original issue discount relating to the issuance of 350 shares of Class A
Common Stock and 350 shares of Class C Preferred Stock, and $60 million of
equity investments discussed in (i) and (ii) above. On the date of the
Recapitalization and Refinancing, Cardinal charged off $11,246,713 which
included the unamortized estimated value of the warrants of $10,505,000 and
unamortized debt acquisition costs of $379,713 (net of $213,588 tax benefit).

58
<PAGE>

Results of Operations

The following table shows, for the periods indicated, information derived
from the consolidated statements of operations of Cardinal expressed as a
percentage of net revenue for such year (dollars in thousands).

<TABLE>
<CAPTION>
Three Months Ended March
Years Ended December 31, 31,
------------------------------------------------ -------------------------------
1996 1997 1998 1998 1999
-------------- -------------- -------------- -------------- --------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Operating revenue....... $48,128 100.0 % $63,412 100.0 % $82,223 100.0 % $18,982 100.0 % $18,978 100.0 %
Operating expenses:
Labor.................. 14,872 30.9 % 18,709 29.5 % 25,075 30.5 % 5,163 27.2 % 7,061 37.2 %
Maintenance............ 4,557 9.5 % 4,451 7.0 % 4,626 5.6 % 975 5.1 % 1,207 6.4 %
Insurance.............. 2,681 5.6 % 2,503 4.0 % 3,746 4.6 % 697 3.7 % 734 3.9 %
Depreciation........... 3,509 7.3 % 4,207 6.6 % 6,118 7.4 % 1,195 6.3 % 1,810 9.5 %
Cost of goods sold..... 1,627 3.4 % 2,087 3.3 % 1,809 2.2 % 446 2.4 % 503 2.7 %
Other.................. 4.219 8.8 % 5,386 8.5 % 9,350 11.4 % 1,576 8.3 % 1,714 9.0 %
------- ----- ------- ----- ------- ----- ------- ----- ------- -----
Total operating
expenses............ 31,465 65.4 % 37,343 58.9 % 50,724 61.7 % 10,052 53.0 % 13,029 68.7 %
------- ----- ------- ----- ------- ----- ------- ----- ------- -----
Gross profit............ 16,663 34.6 % 26,069 41.1 % 31,499 38.3 % 8,930 47.0 % 5,949 31.3 %
General and
administrative
expenses............... 8,317 17.3 % 10,842 17.1 % 15,729 19.1 % 4,142 21.8 % 3,297 17.4 %
------- ----- ------- ----- ------- ----- ------- ----- ------- -----
Operating income........ 8,346 17.3 % 15,227 24.0 % 15,770 19.2 % 4,788 25.2 % 2,652 13.9 %
Other income (expense):
Interest expense........ (3,448) (7.2)% (5,464) (8.6)% (12,641) (15.4)% (2,698) (14.2)% (3,201) (16.9)%
Consulting fees paid to
related party.......... (300) (0.6)% (1,150) (1.8)% -- -- -- -- -- --
Other, net.............. 2 0.0 % 58 0.1 % (777) (0.9)% (515) (2.7)% (2) 0.0 %
------- ----- ------- ----- ------- ----- ------- ----- ------- -----
Income (loss) before
income taxes and
extraordinary loss..... 4,600 9.5 % 8,671 13.7 % 2,352 2.9 % 1,575 8.3 % (551) (3.0)%
Income tax.............. 1,706 3.5 % 4,350 6.9 % 1,149 1.4 % 591 3.1 % (98) (0.5)%
------- ----- ------- ----- ------- ----- ------- ----- ------- -----
Income before
extraordinary loss..... $ 2,894 6.0 % $ 4,321 6.8 % $ 1,203 1.5 % $ 984 5.2 % $ (453) (2.5)%
======= ===== ======= ===== ======= ===== ======= ===== ======= =====
</TABLE>

Demand for Cardinal's liftboat rentals and other services is driven
primarily by the level of oil and gas well maintenance and workover activity in
the Gulf of Mexico. The level of oilfield activity is driven by commodity
prices of oil and gas, which impact the ability of oil and gas companies to
generate sufficient cash flows to make capital expenditures for exploration and
exploitation of new and existing hydrocarbon reserves. Demand for Cardinal's
plugging and abandonment services is largely driven by the number of wells
which have ceased to become commercially viable. The ability to provide wire-
line, coiled tubing, electric line, and plugging and abandonment services from
Cardinal's own fleet of liftboats helps keep overall fleet utilization higher
than otherwise would be enjoyed.

The oilfield services industry experienced a significant decline in activity
in the last half of 1998 which has continued into the first quarter of 1999,
and such decline has resulted in lower utilization and day rates for its
liftboat fleet. Despite a recent improvement in commodity pricing, Cardinal's
second quarter results continue to reflect an increasingly downward trend in
terms of revenue and profitability. Accordingly, Cardinal expects operating
revenue and operating income for the second quarter ending June 30, 1999 to be
lower than the corresponding amounts for the first quarter ended March 31,
1999. Should the decline in overall industry activity levels continue, it would
have an increasing material adverse effect on Cardinal's financial condition
and results of operation.

The following discussions compare the results of operations for the year
ended December 31, 1998 to the year ended December 31, 1997 and the results of
operations for the year ended December 31, 1997 to the year ended December 31,
1996.

Quarter Ended March 31, 1999 Compared to Quarter Ended March 31, 1998

Cardinal's revenue remained constant at $18.9 million for the quarters ended
March 31, 1999 and March 31, 1998. While revenues were virtually unchanged from
year to year, the overall makeup of revenue changed significantly in line with
an overall downturn in the energy markets served by Cardinal. The largest

59
<PAGE>

change in Cardinal's business was a 38% decrease in revenues generated by its
liftboat fleet. Dayrates declined by approximately 33% and utilization declined
by approximately 5% in the first quarter of 1999. Both of these decreases were
due to a significant decline in energy prices during the last nine months of
1998, which resulted in reduced cash flows for Cardinal's customer base, and as
a result, lower activity in the shelf area of the Gulf of Mexico. Offsetting
the decrease in vessel revenue were strong performances in most of the other
services offered by Cardinal, partially due to gains in market share and
partially due to acquisitions completed during the last nine months of 1998.
Mechanical wireline revenue increased 32% due to the acquisitions. Without
these acquisitions wireline revenue would have declined 12%. Electric line
revenue increased 181% due to focused sales efforts and improved equipment
capabilities. Coiled tubing revenue increased by 59% due to customer awareness
as well as an increase in coiled tubing activity.

Labor increased 37% to $7.0 million for the quarter ended March 31, 1999, as
compared to $5.1 million for the quarter ended March 31, 1998. This increase is
related to $1.0 million in increased labor costs from acquisitions made during
1998. The remaining increase is related to the additional services being
provided as well as the expansion of the current services and general
inflation.

Depreciation increased 52% to $1.8 million for the quarter ended March 31,
1999 as compared to $1.2 million for the quarter ended March 31, 1998.
Approximately one-third of this increase is the result of 1998 acquisitions and
the remaining two-thirds relate to depreciation from 1998 purchases.

General and administrative expenses decreased 20% to $3.3 million for the
quarter ended March 31, 1999 as compared to $4.1 million for the quarter ended
March 31, 1998. This is primarily due to a decrease in the amount of consulting
fees paid to the previous owner.

Interest expense increased 19% to $3.2 million for the quarter ended March
31, 1999 as compared to $2.7 million for the quarter ended March 31, 1998. This
increase is due to the additional indebtedness incurred in the Recapitalization
and Refinancing completed in February 1998.

The income tax provision (benefit) was ($98,000) for the quarter ended March
31, 1998 compared to $591,000 for the quarter ended March 31, 1999. Cardinal's
effective tax rate for the three months ended March 31, 1999 was higher than
the comparable prior quarter because of certain non-deductible goodwill
amortization in 1999.

Year ended December 31, 1998 Compared to Year Ended December 31, 1997

Cardinal's performance in 1998 was impacted in the second half of the year
by the decline in activity in the oilfield services industry as a result of a
decline in oil prices. In addition, work in the Gulf of Mexico, which is
Cardinal's primary operating area, was significantly curtailed during September
1998 by a series of storms and hurricanes.

Cardinal's revenue increased 30% to $82.2 million for the year ended
December 31, 1998, compared to $63.4 million for the year ended December 31,
1997. Approximately 40% of this increase was the result of revenues from
acquisitions made during 1998. The remaining 60% was primarily due to
additional services Cardinal began providing during such period, including
coiled tubing and pumping and stimulation as well as an increase in related
vessel revenue due to the addition of two 200-foot liftboats in the first
quarter of 1998.

Labor increased 34% to $25.0 million for the year ended December 31, 1998,
compared to $18.7 million for the year ended December 31, 1997. This increase
is due to $2.0 million in increased labor costs from acquisitions made during
1998 and increases related to the additional services being provided as well as
the expansion of the current services. Labor as a percentage of revenue
remained relatively stable at 30.5% in 1998 compared to 29.5% in 1997.

Depreciation increased 45% to $6.1 million for the year ended December 31,
1998 compared to $4.4 million for the year ended December 31,1997. This
increase is primarily the result of increased depreciation from major vessel
purchases in the first quarter of 1998.

60
<PAGE>

Other operating expenses include expendables, tool purchases and rentals,
and incidental costs such as transportation, fuel and supplies. These costs
increased 74% to $9.3 million for the year ended December 31, 1998 compared to
$5.3 million for the year ended December 31, 1997. Other operating expenses as
a percentage of revenue increased to 11.4% in 1998 compared to 8.5% in 1997.
This increase is related to tool rentals and purchases related to Cardinal's
efforts to upgrade the caliber of wireline tools Cardinal uses in providing its
services. These purchases are not capitalized due to their high susceptibility
of loss.

General and administrative expenses increased 45% to $15.7 million for the
year ended December 31, 1998 compared to $10.8 million for the year ended
December 31, 1997. This is due to $1.2 million in additional salesman expense
related to an expanded marketing campaign as well as $0.8 million in stock
awards to management in conjunction with the Recapitalization and Refinancing
completed in February 1998, and an increase in employee benefits.

Interest expense increased 131% to $12.6 million for the year ended December
31,1998 compared to $5.4 million for the year ended December 31, 1997. This
increase resulted from Cardinal's higher debt levels following the
Recapitalization and Refinancing.

Consulting fees were paid to the previous owner prior to the
Recapitalization. No such fees have been payable following the
Recapitalization.

The income tax provision decreased to $935,000 for the year ended December
31, 1998 from $4.4 million for the year ended December 31, 1997 due to a
decrease in income before income taxes and a decrease in Cardinal's effective
tax rate. Cardinal's effective tax rate was higher in 1997 because of the non-
deductibility of $2.1 million in interest expense related to certain warrants
and the recording of $320,000 in tax liabilities related to Cardinal Management
Company. See Note 7 to Cardinal's Consolidated Financial Statement.

Year ended December 31, 1997 Compared to Year Ended December 31, 1996

Cardinal's revenue increased 32% to $63.4 million for the year ended
December 31, 1997, compared to $48.1 million for the year ended December 31,
1996. This was due in large part to increased vessel rates and utilization due
to improved market conditions in the Gulf. Also, plugging and abandonment
contracts increased as Cardinal proved its ability to perform this service.

Labor increased 26% to $18.7 million for the year ended December 31, 1997,
compared to $14.8 million for the year ended December 31, 1996. The increase in
labor was directly related to the increase in vessel utilization brought on by
improved market conditions as well as a 50% increase in contract labor rates
charged by welders. Labor as a percentage of revenue remained relatively stable
at 29.5% in 1997 compared to 30.9% in 1997.

Depreciation increased 20% to $4.2 million for the year ended December 31,
1997 compared to $3.5 million for the year ended December 31, 1996. This
increase resulted from the asset additions made during 1997, including the
acquisition of one lift boat.

General and administrative expenses increased 30% to $10.8 million for the
year ended December 31, 1997 compared to $8.3 million for the year ended
December 31, 1996. This increase was a result of increased bonuses paid as a
result of improved performance.

Interest expense increased 58% to $5.4 million for the year ended December
31,1997 compared to $3.4 million for the year ended December 31, 1996. This was
a result of greater borrowings on the line of credit compared to prior year.
These increased borrowings were a result of continued growth.

Consulting fees paid to the previous owner increased to $1.1 million for the
year ended December 31, 1997 compared to $300,000 for the year ended December
31, 1996.

61
<PAGE>

The income tax provision increased to $4.4 million for the year ended
December 31, 1997 from $1.7 million for the year ended December 31, 1996 due to
an increase in income before income taxes and an increase in Cardinal's
effective tax rate. Cardinal's effective tax rate increased in 1997 because of
the non-deductibility of $2.1 million in interest expense related to certain
warrants and the recording of $320,000 in tax liabilities related to Cardinal
Management Company. See Notes 5 and 7 to Cardinal's Consolidated Financial
Statements.

Liquidity and Capital Resources

Cardinal's primary sources of working capital are cash flow from operations
and revolving credit advances under the credit agreement it entered into with
certain lenders in connection with the Recapitalization and Refinancing (the
"Credit Agreement"). Cardinal's primary sources of funds for capital
expenditures and strategic acquisitions have been term loans provided by the
Credit Agreement and proceeds from issuance of common and preferred stock.

Cardinal had cash flows from operations of $7.4 million in 1996, $9.3
million in 1997 and $3.6 million in 1998. The decrease in cash flows from
operations from 1997 to 1998 resulted primarily from a $7.2 million increase in
interest expense related to Cardinal's higher debt levels following the
Recapitalization and Refinancing, which was completed during the first quarter
of 1998. The Recapitalization and Refinancing resulted in a net capital
deficiency, which was $39.9 million at December 31, 1998. As part of an
arrangement reached with the lenders under the Credit Agreement, certain
holders of Cardinal Capital Stock contributed $5,000,000 of equity to Cardinal
during March 1999. Consummation of the Merger is conditional upon the
completion by Cardinal of the $45,000,000 Equity Contribution and all of the
net proceeds of the Equity Contribution will be used to reduce Cardinal's
indebtedness as part of the consummation of the Merger.

Amounts due under the Credit Agreement are collateralized by substantially
all the assets of Cardinal. The Credit Agreement contains certain covenants
which restrict Cardinal's ability to pay dividends and require Cardinal to
maintain certain levels of stockholders' equity (net capital deficiency) and
debt service ratios. At March 31, 1999, Cardinal was in compliance with all
such covenants.

Cardinal utilizes interest rate swaps in which it pays the fixed rate and
receives the floating rate in order to reduce the impact of changes in interest
rates on interest expense. Cardinal generally maintains 40% of its debt as
fixed rate by entering into such interest rate swap arrangements.

The Credit Agreement provides Term Loans with a balance of $108,000,000 at
March 31, 1999. Additionally, the Credit Agreement provides for up to
$10,000,000 of revolving credit advances, subject to an accounts receivable
borrowing base, bearing interest at floating rates and maturing in March 2004.
At March 31, 1999, considering the borrowing base, there was $9,309,000
available under the revolving credit facility. Unused amounts under the
revolving credit facility are subject to a floating availability fee ranging
from .375% to .50% of the unused balance.

On March 31, 1999, in connection with an amendment to the Credit Agreement,
shareholders purchased 2,312 shares of Class C Preferred Stock and 1,747 shares
of Class A Common Stock for $5 million cash, which was used to repay the
outstanding balance of a revolving credit note and to provide additional cash
for operating activities.

In 1998, Cardinal acquired all of the outstanding stock of three companies
for an aggregate $22.4 cash and $1.4 million of Cardinal stock.

Cardinal made additional capital expenditures in 1998 of $19 million
primarily for the purchase of additional lift boats and coiled tubing
equipment. Cardinal had working capital (deficit) of $3,647,030 at December 31,
1998, ($3,961,210) at December 31, 1997 and $585,635 at December 31, 1996.

62
<PAGE>

Year 2000 Issues

Cardinal utilizes and relies upon computer technology in many facets of its
operations, including its information systems, the internal and external
reporting of financial and operating information and other systems and
equipment, such as vessel operation systems and computer-chip dependent
electronic devices used in providing Cardinal's services (collectively, "IT").

Cardinal is continuing the process it initiated in 1998 of identifying and
remediating computer systems or other equipment which will not be Year 2000
compliant when handling date-related data in the Year 2000 and thereafter. The
related projects of migrating Cardinal's IT and addressing Year 2000 issues are
hereinafter collectively referred to as the Year 2000 Efforts.

Cardinal continues to assess and review its computer systems, devices,
software applications and equipment (collectively, "Computer Systems") to
identify those areas that could be affected by Year 2000 noncompliance. In
1998, because of its significant growth, Cardinal began the process of
upgrading its Computer Systems associated with substantially all of its
accounting and information systems. Based on its continuing review, management
believes, and has received confirmation from the vendors of its Computer
Systems, that Cardinal's Computer Systems, when all upgrades are complete, will
function properly when handling date-related data in the Year 2000 and
thereafter.

Cardinal is currently assessing aspects of its business and operations other
than its Computer Systems to identify those areas that could be affected by
Year 2000 noncompliance, including vessel operation systems and other computer-
chip dependent electronic equipment used in providing services, as well as
telephones and other office equipment.

Cardinal is communicating with suppliers, service providers, and large
customers (collectively, third-party businesses) regarding their compliance
with Year 2000 requirements. Cardinal has received responses from a majority of
such parties. Since most of the responses indicated that efforts to comply with
Year 2000 requirements are ongoing, further communications with Cardinal's
major suppliers and service providers may be needed. If the third-party
businesses fail to comply in a timely manner with Year 2000 requirements, such
failures by third-party businesses could have a material adverse effect on
Cardinal's business, operations or financial condition.

Cardinal estimates the cost of its Year 2000 Efforts will not exceed $1
million, and will primarily result from the purchase of new software and
limited quantities of hardware, which will be capitalized. Through December 31,
1998, approximately $400,000 of these costs have been incurred and capitalized.
Cardinal expects that cash flow from operations and available advances under
the Credit Agreement will be sufficient to fund the costs associated with
Cardinal's Year 2000 Efforts.

While Cardinal expects its Year 2000 Efforts to be completed and tested by
August 1999, there can be no such assurances, and failure of Cardinal's
Computer Systems to function properly could have a material adverse effect on
Cardinal's business, operations or financial condition. As yet, Cardinal has
not developed a contingency plan in the event these efforts are not successful.

Quantitative and Qualitative Disclosures About Market Risk

The market risk inherent in Cardinal's market risk sensitivity instruments
is the potential loss arising from adverse changes in interest rates. All
financial instruments held by Cardinal and described below are held for
purposes other than trading.

Cardinal's Credit Agreement exposes earnings to changes in short-term
interest rates since the interest rates on the amounts due under the Credit
Agreement are variable. If (i) the variable rates on Cardinal's Credit
Agreement were to increase by 1% from the rate at December 31, 1998; (ii)
Cardinal borrowed the maximum amount available under its revolving credit
advances ($10,000,000) for all of 1999, and (iii) Cardinal made all

63
<PAGE>

required payments of principal ($7,000,000) in 1999, solely as a result of the
increase in interest rates, Cardinal's interest expense would increase,
resulting in a $432,000 decrease in net income, assuming an effective tax rate
of 36%. This analysis does not consider the effects of the reduced level of
overall economic activity that could exist in such an environment. Further, in
the event of a change of such magnitude, management would likely take actions
to further mitigate its exposure to the change. The fair value of Cardinal's
Senior Subordinated Notes are not affected by changes in market interest rates.

64
<PAGE>

ELECTION OF DIRECTORS

(Proposal No. 2)

Voting Procedure

Superior's Bylaws authorize the Board to fix the number of directors at not
less than three nor more than eleven. Pursuant thereto, the Board has fixed the
number of directors to be elected at the Meeting at six, and proxies cannot be
voted for a greater number of persons. Unless authority is withheld, the
persons named in the enclosed proxy will vote the shares represented by the
proxies received by them for the election of the six nominees named below to
serve until the next annual meeting and until their successors are duly elected
and qualified.

Unless authority to vote for the election of directors is withheld, the
proxies solicited hereby will be voted FOR the election of each individual
named below as a director or nominee. If any nominee should decline or be
unable to serve for any reason, votes will instead be cast for a substitute
nominee designated by the Board. The Board has no reason to believe that any
nominee will decline to be a candidate or, if elected, will be unable or
unwilling to serve. Under Superior's Bylaws, directors are elected by a
plurality vote.

Information About Directors

The following table sets forth certain information with respect to the two
directors selected for re-election by Superior and the four nominees for
director selected by Cardinal. The Merger is conditioned upon the election of
all six of these directors by Superior's stockholders. Likewise, the election
to Superior's Board of the four individuals designated by Cardinal is
conditioned upon consummation of the Merger. If, following the Meeting, the
Merger is not consummated for any reason, Superior will call a special meeting
of its stockholders to elect substitute nominees in replacement of the four
persons designated by Cardinal. Unless otherwise indicated, the person has been
engaged in the principal occupation shown for the past five years.

<TABLE>
<CAPTION>
Name and Age Position
------------ --------
<S> <C>
Terence E. Hall, 53............. Chairman of the Board, Chief Executive Officer,
President and Director of Superior
Justin L. Sullivan, 59.......... Director of Superior
William E. Macaulay, 53......... Chairman and Chief Executive Officer of First
Reserve Corporation
Ben A. Guill, 48................ President of First Reserve Corporation
Robert E. Rose, 60.............. President, Chief Executive Officer and Chairman
of the Board of Global Marine Inc.
Richard A. Bachmann, 54......... President, Chief Executive Officer and Chairman
of the Board of Energy Partners Ltd.
</TABLE>
- --------
Terence E. Hall has served as the Chairman of the Board, Chief Executive
Officer, President and a Director of Superior since December 1995. Since 1989
he has also served as President and Chief Executive Officer of the following
wholly-owned subsidiaries of Superior: Superior Well Service, Inc. ("Superior
Well") and Connection Technology, Ltd. Mr. Hall received his B.S. and J.D.
degrees from Tulane University.

Justin L. Sullivan has served as a Director of Superior since December 1995.
Mr. Sullivan has been a private investor and has served as a business
consultant to various companies since May 1993. Prior to May 1993, Mr. Sullivan
held senior management positions with various companies in the forest product
industry. Mr. Sullivan has been an accounting faculty member of the University
of New Orleans and Tulane University. Mr. Sullivan received his B.S. degree
from Louisiana State University at New Orleans and his M.B.A. from Tulane
University, and is a Certified Public Accountant.

65
<PAGE>

William E. Macaulay has served since 1983 as President or Chairman and Chief
Executive Officer of First Reserve, the indirect general partner of the Funds,
which own in the aggregate, approximately 63% of the outstanding Cardinal
Capital Stock. First Reserve is a corporate manager of private investments
focusing on the energy and energy-related sectors. Mr. Macaulay also serves as
a director of Weatherford International, Inc., an oilfield service company,
Maverick Tube Corporation, a manufacturer of steel pipe and casing, National-
Oilwell, Inc., a manufacturer and distributor of oil field equipment and Cal
Dive International, Inc., a subsea service provider.

Ben A. Guill is President of First Reserve. Prior to joining First Reserve,
Mr. Guill spent eighteen years with Simmons & Company International, an
investment banking firm, where he served as Managing Director and Co-Head of
Investment Banking. Mr. Guill also serves as a director of Range Resources
Group, an oil and gas company, Cal Dive International, Inc. and National-
Oilwell, Inc. Mr. Guill received his B.A. degree from Princeton University and
his Masters degree in finance from the Wharton Graduate School of Business at
the University of Pennsylvania.

Robert E. Rose has served as Director, President and Chief Executive Officer
of Global Marine Inc. since May 1998 and Chairman of the Board since May 1999.
Mr. Rose began his professional career with Global Marine Inc. in 1964. He left
Global Marine in 1976, and began holding executive positions with other
offshore drilling companies, including more than a decade as President and
Chief Executive Officer of Diamond Offshore Drilling, Inc. and its predecessor,
Diamond M Company. He resigned from Diamond Offshore Drilling, Inc. in April
1998 and served as President and Chief Executive Officer of Cardinal from April
1998 to May 1998, and has continued to serve as a director of Cardinal.

Richard A. Bachmann has served as Chairman, President and Chief Executive
Officer of Energy Partners, Ltd., an independent oil and gas exploration
company, since June 1998. Mr. Bachmann's career began at Standard Oil of New
Jersey where he moved through positions of increased responsibility in the
treasury department. Mr. Bachmann served as President and Chief Operating
Officer of The Louisiana Land and Exploration Company ("LL&E") from October
1995 to January 1997, and served as a director of LL&E from 1989 to 1997. In
addition to sitting on numerous Boards of charitable organizations, Mr.
Bachmann sits on the Board of Directors of the Penn Virginia Company. He holds
an MBA from the University of Wisconsin.

----------------

Board Committees

The Board has an Audit and Compensation Committee, but the Board does not
have a nominating committee. Following the Meeting, the newly elected Board
will reconstitute these committees. The current members of the Audit Committee
for fiscal 1998 were Messrs. Small, Sullivan and Hall. The Audit Committee,
which met one time during 1998, is responsible for (i) making recommendations
to the Board concerning the engagement of Superior's independent public
accountants, (ii) consulting with the independent public accountants with
regard to the plan of audit, (iii) consulting with Superior's chief financial
officer of Superior on any matter the Audit Committee or the chief financial
officer deems appropriate in connection with carrying out the audit, (iv)
reviewing the results of audits of Superior by its independent public
accountants, (v) reviewing all related party transactions and all other
potential conflict of interest situations, (vi) discussing audit
recommendations with management and reporting the results of its reviews to the
Board and (vii) performing such other functions as may be prescribed by the
Board.

The current members of the Compensation Committee for fiscal 1998 were
Messrs. Sullivan and Small. The Compensation Committee met two times during
1998. The Compensation Committee is responsible for administering Superior's
1995 Stock Incentive Plan and performing such other functions as may be
prescribed by the Board. The Compensation Committee will also administer the
Plan, assuming it is approved by the stockholders at the Meeting.

In 1998, the Board held eight meetings. Each director attended 75% or more
of the meetings of the board of directors and committees of which he was a
member which were held during the period in which he served.

66
<PAGE>

Director Compensation

Prior to the consummation of the Merger, each director was paid a director's
fee of $250 for each Board and committee meeting attended. Following
consummation of the Merger, each director who is not a full-time employee of
Superior will be paid a director's fee of $15,000 annually, plus $1,000 for
each Board and committee meeting attended. Directors are also reimbursed for
reasonable expenses incurred in attending Board and committee meetings. Under
the Plan, directors who are not also full-time employees of Superior will
receive options to acquire 20,000 shares of Superior Common Stock on the date
such person first becomes a member of the Board and an option to acquire 5,000
shares of Superior Common Stock on the day following each annual meeting of
stockholders, beginning with the 2000 annual meeting, if shares of Superior
Common Stock remain available for grant under the Plan.

Information About Executive Officers

The following table sets forth certain information with respect to the
persons, in addition to Mr. Hall, who are expected to serve as executive
officers of Superior following the Merger.

<TABLE>
<CAPTION>
Name and Age Position
------------ --------
<S> <C>
Kenneth Blanchard, 49............................ Vice President
Charles Funderburg, 44........................... Vice President
Robert S. Taylor, 45............................. Chief Financial Officer
James A. Holleman, 41............................ Vice President
Dale L. Mitchell, 36............................. Vice President
</TABLE>

Kenneth Blanchard has served as a Vice President of Superior since December
1995. Prior to this, he served as Vice President of Connection Technology, Ltd.

Charles Funderburg has served as a Vice President of Superior since December
1995. Prior to this, he served as Vice President of Superior Well Services,
Inc.

Robert S. Taylor has served as Superior's Chief Financial Officer since
January 1996. From May 1994 to January 1996, he served as Chief Financial
Officer of Kenneth Gordon (New Orleans), Ltd., an apparel manufacturer. From
November 1989 to May 1994 he served as Chief Financial Officer of Plywood
Panels, Inc. Prior thereto, Mr. Taylor served as controller for Plywood Panels,
Inc. and Corporate Accounting Manager of D.H. Holmes Company, Ltd., a
department store chain.

James A. Holleman has been active in Cardinal's business since 1981, and has
served as Chief Operating Officer since 1994. Prior to that time, he was
employed by Reading and Bates in Houston, Texas and Industrial Lift Trucks,
Inc. in Lafayette, Louisiana. Mr. Holleman holds a B.S. degree from Lamar
University.

Dale L. Mitchell joined the Cardinal organization in 1983 and has served as
Vice President of Marine Services since 1998. Prior to 1998, he served in
numerous operational and managerial roles within Cardinal's Marine Services
division.

67
<PAGE>

PRINCIPAL STOCKHOLDERS

The following table indicates the beneficial ownership, as of March 31,
1999, of Superior Common Stock by (i) each director and director nominee, (ii)
each Named Officer disclosed under the "Summary Compensation Table," (iii) each
person known by Superior to own more than 5% of the outstanding shares of
Superior Common Stock, and (iv) all directors and executive officers of
Superior as a group. Except as otherwise indicated below, all shares indicated
as beneficially owned are held with sole voting and investment power.

<TABLE>
<CAPTION>
Amount and
Nature of Percent
Name and Address of Beneficial Owner Beneficial Owner of Class
------------------------------------ ---------------- --------
<S> <C> <C>
FMR Corp......................................... 1,542,900(1) 5.4%
82 Devonshire Street
Boston, Massachusetts 02109

Ernest J. Yancey, Jr............................. 1,618,265(2)(3) 5.6%
131 LaLanne Road
Madisonville, Louisiana 70447

Terence E. Hall.................................. 1,588,515(3) 5.5%

James E. Ravannack............................... 1,624,515(3) 5.6%

Kenneth Blanchard................................ 210,500(4) *

Robert S. Taylor................................. 115,000(5) *

Charles Funderburg............................... 149,000(6) *

Justin L. Sullivan............................... 10,000 *

William E. Macaulay.............................. 0 0

Ben A. Guill..................................... 0 0

Robert E. Rose................................... 0 0

Richard A. Bachmann.............................. 0 0

All directors, director nominees, executive
officers as a group (ten persons)............... 5,003,878(7) 17.1%
</TABLE>
- --------
* Less than 1%.
(1) Based on a Schedule 13G, dated February 1, 1999, filed with the Securities
and Exchange Commission. In its Schedule 13G, FMR Corp. reported that,
through its subsidiary, Fidelity Management & Research Company, sole
dispositive power with respect to all 1,542,900 shares as a result of
acting as investment advisor to various investment companies registered
under Section 8 of the Investment Company Act of 1940. FMR Corp. does not
have the power to vote the shares.
(2) Includes 24,000 shares of Superior Common Stock held by Mr. Yancey's
children, of which Mr. Yancey is deemed to be the beneficial owner, and
1,402,265 held by a limited liability company controlled by Mr. Yancey.
(3) Includes 44,000 shares of Superior Common Stock that may be acquired upon
the exercise of presently exercisable options.
(4) Includes 135,500 shares of Superior Common Stock that may be acquired upon
the exercise of presently exercisable options and 48,000 shares held by Mr.
Blanchard's children, of which Mr. Blanchard is deemed to be the beneficial
owner.
(5) Includes 110,000 shares of Superior Common Stock that may be acquired upon
the exercise of presently exercisable options.
(6) Includes 120,000 shares of Superior Common Stock that may be acquired upon
the exercise of presently exercisable options. Also includes 8,000 shares
held by Mr. Funderburg's children, of which Mr. Funderburg is deemed to be
the beneficial owner.
(7) Includes 453,500 shares of Superior Common Stock that may be acquired upon
the exercise of presently exercisable options.

68
<PAGE>

The following table indicates the estimated beneficial ownership following
the Merger, using an assumed number of 58,791,239 shares of Superior Common
Stock estimated to be outstanding after the Merger, which is based on the
number of shares of Superior Common Stock issued and outstanding as of March
31, 1999 plus the number of shares of Superior Common Stock that would have
been issued in the Merger if calculated as of that date, by (i) each director
nominee, (ii) each person expected by Superior to own more than 5% of the
outstanding shares of Superior Common Stock following the Merger, (iii) each
executive officer following the Merger, and (iv) all directors and executive
officers of Superior following the Merger as a group. The shares shown below as
being owned by persons who are currently Cardinal stockholders assume that such
stockholders acquired their pro rata share of Cardinal Capital Stock issued in
the Equity Contribution. Except as otherwise indicated below, all shares
indicated as beneficially owned are held with sole voting and investment power.

<TABLE>
<CAPTION>
Amount and
Nature of Percent
Name and Address of Beneficial Owner Beneficial Owner of Class
------------------------------------ ---------------- --------
<S> <C> <C>
First Reserve Fund VII, Limited Partnership(1).. 10,955,328(2) 18.6%
475 Steamboat Road, 2nd Floor
Greenwich, Connecticut 06830

First Reserve Fund VIII, L.P.(1)................ 7,303,551(3) 12.4%
475 Steamboat Road, 2nd Floor
Greenwich, Connecticut 06830

John P. Kotts................................... 7,028,610(4) 12.0%
650 Poydras Street, Suite 2525
New Orleans, LA 70130

Terence E. Hall................................. 1,588,515(5) 2.7%

Justin L. Sullivan.............................. 10,000 *

William E. Macaulay............................. 18,258,879(6) 31.0%

Ben A. Guill.................................... 0 0

Robert E. Rose.................................. 0 0

Richard A. Bachmann............................. 0 0

Kenneth Blanchard............................... 210,500(7) *

Robert S. Taylor................................ 115,000(8) *

Charles Funderburg.............................. 149,000(9) *

James A. Holleman............................... 20,542(10) *

Dale L. Mitchell................................ 18,488(11) *
All directors and executive officers after the
Merger as a group (twelve persons)............. 20,370,924(6)(12) 34.4%
</TABLE>
- --------
* Less than 1%.
(1) First Reserve Corporation is the indirect general partner of First Reserve
Fund VII, Limited Partnership and First Reserve Fund VIII, L.P. and is
deemed to beneficially own the shares held by both of the Funds.
(2) Includes 336,161 shares of Superior Common Stock held in escrow for the
benefit of John P. Kotts.
(3) Includes 224,107 shares of Superior Common Stock held in escrow for the
benefit of John P. Kotts.

(4) All shares are held by Kotts Capital Holding, Limited Partnership, a family
limited partnership, and does not include 707,014 shares placed in escrow
for the benefit of Mr. Kotts by former Cardinal stockholders not affiliated
with Mr. Kotts.
(5) Includes 44,000 shares of Superior Common Stock that may be acquired upon
the exercise of presently exercisable options.

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<PAGE>

(6) Includes the shares held by both of the Funds. Mr. Macaulay is a
controlling stockholder of First Reserve Corporation, the indirect general
partner of each of the Funds.
(7) Includes 135,500 shares of Superior Common Stock that may be acquired upon
the exercise of presently exercisable options and 48,000 shares held by Mr.
Blanchard's children, of which Mr. Blanchard is deemed to be the beneficial
owner.
(8) Includes 110,000 shares of Superior Common Stock that may be acquired upon
the exercise of presently exercisable options.
(9) Includes 120,000 shares of Superior Common Stock that may be acquired upon
the exercise of presently exercisable options. Also includes 8,000 shares
held by Mr. Funderburg's children, of which Mr. Funderburg is deemed to be
the beneficial owner.
(10) Includes 630 shares of Superior Common Stock held in escrow for the
benefit of John P. Kotts.
(11) Includes 567 shares of Superior Common Stock held in escrow for the
benefit of John P. Kotts.
(12) Includes 409,500 shares of Superior Common Stock that may be acquired upon
the exercise of presently exercisable options.

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<PAGE>

EXECUTIVE COMPENSATION

Summary of Executive Compensation

The following table shows, for the fiscal years ended December 31, 1998,
1997 and 1996, the compensation of Superior's chief executive officer,
Superior's other executive officer and the three other most highly compensated
officers of Superior who were serving in such capacities at the year-end 1998.
The persons named in the table are referred to in this proxy statement as the
"Named Officers."

Summary Compensation Table

<TABLE>
<CAPTION>
Long-Term
Annual Compensation
Compensation Awards
----------------- ------------
Securities
Name and Principal Underlying All Other
Position Year Salary Bonus Options/SARs Compensation(1)
------------------ ---- ------ -------- ------------ ---------------
<S> <C> <C> <C> <C> <C>
Terence E. Hall ........ 1998 $346,570 $302,202 0 $3,939
Chairman, Chief 1997 316,669 392,470 0 4,843
Executive Officer 1996 300,264 137,500 0 3,419

James E. Ravannack...... 1998 140,406 133,970 0 3,939
Vice President 1997 127,749 173,987 0 4,355
1996 120,182 60,950 0 2,847

Kenneth Blanchard ...... 1998 139,753 133,970 75,000 3,939
Vice President 1997 127,749 173,987 25,000 4,355
1996 120,129 60,950 17,500 2,848

Charles Funderburg (2).. 1998 140,421 133,970 75,000 3,939
Vice President 1997 127,650 173,987 45,000 3,939
1996 109,524 60,960 20,000 2,818

Robert S. Taylor (3).... 1998 125,493 77,000 60,000 3,939
Chief Financial Officer 1997 107,104 100,000 25,000 3,539
1996 82,262 25,000 25,000 2,654
</TABLE>
- --------
(1) Comprised of Superior's matching contributions to the 401(k) Plan and
hospitalization insurance.
(2) Charles Funderburg became Vice President in May 1996.
(3) Robert S. Taylor became Chief Financial Officer in January 1996.

Executive Employment Agreements

Superior entered into employment agreements in December 1995 with each of
Terence E. Hall, James E. Ravannack, Kenneth Blanchard and Charles Funderburg
(the "Executives"), providing for minimum annual salaries of $300,000,
$120,000, $120,000 and $120,000, respectively, with 5% increases over and above
the preceding year's salary during the term of the agreement. Under the
employment agreements, Messrs. Hall, Ravannack and Blanchard were granted ten-
year options to purchase 44,000, 44,000 and 18,000 shares of Superior Common
Stock, respectively, at $2.53 per share. Under the agreements, the Executives
were provided with benefits under any employee benefit plan maintained by
Superior for its employees generally, or for its executives and key management
employees in particular, on the same terms as are applicable to other senior
executives of Superior.

In addition to salary and benefits, each of Messrs. Hall, Ravannack and
Blanchard received an annual bonus calculated as a percentage of Superior's
year-end pre-tax, pre-bonus annual income ("Superior's

71
<PAGE>

Income") and Mr. Funderburg received an annual bonus calculated as a percentage
of one of Superior's subsidiaries', Superior Well Service, Inc.'s year-end pre-
tax, pre-bonus annual income ("Superior Well's Income"). Mr. Hall's bonus was
an amount equal to 1% of Superior's Income if Superior's Income was greater
than $1.8 million but less than or equal to $2.0 million, 2% of Superior's
Income if Superior's Income was greater than $2.0 million but less than or
equal to $2.25 million, or 3% of Superior's Income if Superior's Income was
greater than $2.25 million. If the Merger is approved by the stockholders, Mr.
Hall's employment agreement will be amended to delete the incentive bonus
arrangement.

The bonus for each of Messrs. Ravannack and Blanchard was an amount equal to
.443% of Superior's Income if Superior's Income was greater than $1.8 million
but less than or equal to $2.0 million, .886% of Superior's Income if
Superior's Income was greater than $2.0 million but less than or equal to $2.25
million, or 1.33% of Superior's Income if Superior's Income was greater than
$2.25 million. Mr. Funderburg's bonus was an amount equal to .443% of Superior
Well's Income that was greater than $1.8 million but less than or equal to $2.0
million, .886% of Superior Well's Income that was greater than $2.0 million but
less than or equal to $2.25 million, and 1.33%% of Superior Well's Income that
was greater than $2.25 million.

The terms of the employment agreements, except for Mr. Hall's and Mr.
Funderburg's agreements, continued until December 13, 1998. The term of Mr.
Funderburg's employment agreement continued until April 30, 1999. The term of
Mr. Hall's employment agreement will continue until December 13, 2000 unless
earlier terminated as described below. The term of Mr. Hall's agreement will
automatically be extended for one additional year unless Superior gives at
least 90 days' prior notice that it does not wish to extend the term.

Each employment agreement provided for the termination of the Executive's
employment: (i) upon the Executive's death; (ii) by Superior or the Executive
upon the Executive's disability; (iii) by Superior for cause, which includes
willful and continued failure substantially to perform the Executive's duties,
or willful engaging in misconduct that is materially injurious to Superior,
provided, however, that prior to termination, the Board of Directors must find
that the Executive was guilty of such conduct; or (iv) by the Executive for
good reason, which includes a failure by Superior to comply with any material
provision of the agreement that has not been cured after ten days' notice. For
a period of two years after any termination, the Executive would be prohibited
from competing with Superior.

Upon termination due to death or disability, Superior would pay the
Executive all compensation owing through the date of termination and a benefit
in an amount equal to nine-month's salary. Upon termination by Superior for
cause or upon termination by the Executive for other than good reason, the
Executive would be entitled to all compensation owing through the date of
termination. Upon termination by the Executive for good reason, the Executive
would be entitled to all compensation owing through the date of termination
plus his current compensation and the highest annual amount payable to
Executive under Superior's compensation plans multiplied by the greater of two
or the number of years remaining in the term of the Executive's employment
under the agreement. In addition, if the termination were to arise out of a
breach by Superior, Superior would pay all other damages to which the Executive
may be entitled as a result of such breach.

In connection with the Merger, Superior will enter new employment agreements
with Messrs. Blanchard, Funderburg, and Taylor, and will amend Mr. Hall's
employment agreement. See "The Merger--Interests of Certain Persons in the
Merger."

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<PAGE>

1998 Stock Option and Stock Appreciation Right Grants

The following table contains information concerning the grant of options and
stock appreciation rights ("SARs") granted to the Named Officers during 1998.

Option/SAR Grants in Last Fiscal Year
(Individual Grants)

<TABLE>
<CAPTION>
Percent of
No. of Total
Shares Options/SARs
Underlying Granted to Exercise
Options/SARs Employees in or Base Expiration
Name Granted 1998 Price Date
---- ------------ ------------ -------- ----------
<S> <C> <C> <C> <C>
Terence E. Hall................... -- -- -- --
James E. Ravannack................ -- -- -- --
Kenneth Blanchard................. 25,000 5% $7.56 1/27/08
50,000 10 9.25 9/30/08
Charles Funderburg................ 25,000 5 7.56 1/27/08
50,000 10 9.25 9/30/08
Robert S. Taylor.................. 35,000 7 7.56 1/27/08
25,000 5 9.25 9/30/08
</TABLE>

Aggregate Option Exercises During 1998 and Option Values at Fiscal Year End

The following table contains information concerning the aggregate option
exercises during 1998 and the value of outstanding options as of December 31,
1998.

<TABLE>
<CAPTION>
Number of Value of
Securities Unexercised
Underlying In-the-Money
Unexercised Options at
Options at Year End
Year End (#) ($)(1)
Shares ------------- -------------
Acquired on Value Exercisable/ Exercisable/
Exercise (#) Realized Unexercisable Unexercisable
------------ -------- ------------- -------------
<S> <C> <C> <C> <C>
Terence E. Hall............... -- $44,000/0 $13,807/0
James E. Ravannack............ -- 44,000/0 13,807/0
Kenneth Blanchard............. -- 135,500/0 10,615/0
Charles Funderburg............ 20,000 $172,447 120,000/0 0/0
Robert S. Taylor.............. -- 110,000/0 8,595/0
</TABLE>
- --------
(1) Based on the difference between the closing sale price of Superior Common
Stock of $2.8438 on December 31, 1998, as reported by the Nasdaq National
Market and the exercise price of such options.

73
<PAGE>

CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

In May 1996, Superior terminated an employment agreement with Kenneth
Boothe, who was a director of Superior at that time, and in settlement of the
employment agreement Superior entered into a consulting agreement pursuant to
which Superior paid Mr. Boothe $60,000 in each of 1996 and 1997, and agreed to
pay him $60,000 in 1998. In 1998, the consulting agreement was terminated and
Superior paid Mr. Boothe $60,000 and assigned to Mr. Boothe a note receivable
that Superior had fully reserved in prior years.

Superior paid Justin Sullivan, a director, financial consulting fees of
$10,000 and $13,000 in 1998 and 1997, respectively.

Superior paid Richard Lazes, a former director and employee, approximately
$69,000 and $70,000 in 1998 and 1997, respectively as rent for the headquarters
and operating facility used by Superior's wholly-owned subsidiary, Oil Stop,
Inc. Superior is obligated to make rent payments for these facilities to Mr.
Lazes in the amount of $69,000 in 1999 and 24,000 in 2000.

Section 16(a) Beneficial Ownership Reporting Compliance

Section 16(a) of the Securities Exchange Act of 1934 requires Superior's
directors, executive officers and 10% stockholders to file with the Securities
and Exchange Commission reports of ownership and changes in ownership of equity
securities of Superior. Superior believes that during 1998 its directors and
executive officers complied with all these filing requirements except for one
transaction by Mr. Taylor that was inadvertently omitted and later reported
relating to options granted to him by Superior. In addition, Mr. Hall
inadvertently omitted and later reported gifts of common stock made by him.

74
<PAGE>

PROPOSED AMENDMENT TO CERTIFICATE OF INCORPORATION
TO INCREASE NUMBER OF AUTHORIZED SHARES

(Proposed No. 3)

Superior's Board of Directors has unanimously approved a proposal to amend
the Certificate of Incorporation to increase the number of authorized shares of
Superior Common Stock from 40 million to 125 million, such amendment only to be
effected if the Merger is consummated. A copy of the Authorized Share Amendment
is attached hereto as Appendix C and is incorporated herein by reference.

Purposes and Effects of the Proposal

Superior is currently authorized under the Certificate of Incorporation to
issue up to 45 million shares of capital stock, of which 40 million shares have
been designated Superior Common Stock and 5 million shares have been designated
Preferred Stock. As of the Record Date, approximately 28,839,523 shares of
Superior Common Stock were outstanding and 1,649,500 shares were reserved for
issuance upon the exercise of outstanding stock options.

In order to consummate the Merger, Superior will issue a number of shares of
Superior Common Stock to the stockholders of Cardinal that will give the
stockholders of Cardinal 51% of the then outstanding shares of Superior Common
Stock on a fully diluted basis. The Board proposes to increase the authorized
number of shares of Superior Common Stock to 125 million in order to have
sufficient shares to consummate the Merger, and to provide for the issuance of
shares upon the exercise of new stock options proposed to be granted under the
Plan in connection with the Merger. See "Proposal to Approve the Superior
Energy Services, Inc. 1999 Stock Incentive Plan" and "The Merger--Interests of
Certain Persons in the Merger."

If the stockholders approve the Authorized Share Amendment to Superior's
Certificate of Incorporation, following the Merger, based on the number of
fully diluted shares of Superior Common Stock as of March 31, 1999, Superior
would have approximately 58,791,239 million shares of Superior Common Stock
outstanding and 5,190,117 shares reserved for issuance upon the exercise of
outstanding stock options.

Vote Required

To be adopted, the proposal to amend the Certificate to increase Superior's
authorized stock must receive the affirmative vote of the holders of a majority
of the outstanding stock of Superior. If adopted, the Authorized Share
Amendment will become effective concurrently with the Closing Date and as soon
as Superior files with the Delaware Secretary of State the certificate required
under state law. Approval of this proposal is a condition to consummation of
the Merger. Likewise, the Authorized Share Amendment will only be effected if
the Merger is consummated.

The Board of Directors unanimously recommends that you vote FOR the
Authorized Shares Amendment.

75
<PAGE>

PROPOSED AMENDMENT TO CERTIFICATE OF INCORPORATION
TO RESTRICT OWNERSHIP BY NON-UNITED STATES CITIZENS

(Proposal No. 4)

General

The Merchant Marine Act of 1920, as amended, the Merchant Marine Act of
1936, as amended, and the Shipping Act, 1916, as amended (collectively, the
"Maritime Laws") provide that vessels may only transport passengers and
merchandise between points in the United States (defined as "operating in the
coastwise trade") if they are owned by Citizens of the United States. In order
for a corporation owning vessels operating in the coastwise trade to qualify as
a United States Citizen, at least 75% of the outstanding stock of the
corporation must be owned by persons or organizations that are United States
Citizens within the meaning of the Maritime Laws. These requirements currently
apply to Cardinal because it operates vessels in the coastwise trade, and,
after the Merger, these requirements will also apply to Superior. Accordingly,
if, following the Merger, persons or organizations that are not United States
Citizens ("Non-Citizens") were to own in the aggregate more than 25% of the
outstanding Superior Common Stock, the Maritime Laws would not permit Superior
to continue to operate Cardinal's vessels in the United States coastwise trade.
Continued operation of vessels in violation of the Maritime Laws could result
in the forfeiture of the vessels, their cargoes or their values to the United
States.

The Board of Directors of Superior has unanimously adopted a resolution
proposing an amendment to Superior's Certificate of Incorporation to enable
Superior to regulate the ownership of its capital stock by persons who are not
citizens of the United States, such amendment only to be effected upon
consummation of the Merger. A copy of the Citizenship Amendment is attached
hereto as Appendix D and is incorporated herein by reference.

Background and Purpose of the Citizenship Amendment

As stated above, under the Maritime Laws, Superior must be a Citizen of the
United States in order for it to continue to operate Cardinal's vessels in the
coastwise trade. In order to be a Citizen, not less than 75% of Superior's
Capital Stock must be beneficially owned by Citizens. Under regulations issued
by the Secretary, a corporation may use the "fair inference test" in proving
its status as a Citizen. Under the fair inference test, the Secretary will
infer that the 75% ownership requirement has been satisfied if 95% of the
mailing addresses of the corporation's stockholders are within the United
States. Superior intends to monitor its stock ownership records to verify its
continuing compliance with the stock ownership requirements and intends to use
the fair inference test. However, it is possible that future changes in
ownership of Superior's Capital Stock (as defined below) would eliminate the
availability of the fair inference test. If the fair inference test is not
satisfied, the regulations require a corporation to prove that the ultimate
owners of at least 75% of its Capital Stock are Citizens. Moreover, the
regulations also require a corporation to supply citizenship information
regarding any stockholder owning 5% or more of its issued and outstanding
Capital Stock. In view of the potentially serious consequences of Superior's
failure to prove that it meets the citizenship requirements of the Maritime
Laws, and in view of the potential difficulty in establishing its status as a
Citizen if there is any material change in the composition of its stockholders,
the Board of Directors believes that implementation of the Citizenship
Amendment is highly desirable.

Description of Citizenship Amendment Provisions

If the Amendment is adopted, any transfer or purported transfer of shares of
Capital Stock of Superior that would result in the ownership by Non-Citizens of
capital stock having more than 23% (the "Permitted Amount") of the Total Voting
Power (as defined below) of Superior would be void and would not be effective
against Superior except for the purpose of enabling Superior to effect certain
remedies that are described below. The Citizenship Amendment defines Capital
Stock as any class or series of capital stock of Superior (other than such
class or classes of Superior's stock, if any, that the Maritime Administration
of the United States Department of Transportation ("MARAD") permits to be
excluded from the determination of whether

76
<PAGE>

Superior is in compliance with the citizenship requirements of the Maritime
Laws), and defines Total Voting Power as the total number of votes that may be
cast by shares of Superior's capital stock with respect to the election of its
directors.

The Citizenship Amendment further defines a Non-Citizen as any Person
(defined as including an individual, corporation, partnership, limited
liability company, trust, joint venture or other association) other than a
citizen, and a "Citizen" is defined as:

(i) any individual who is a citizen of the United States;

(ii) any corporation, partnership, association or limited liability
company (A) that is organized under the laws of the United States or of a
state, territory, district or possession thereof, (B) of which not less
than 75% of its stock or equity interest is beneficially owned by Persons
who are Citizens, (C) whose president or chief executive officer, chairman
of the board of directors and all officers authorized to act in the absence
or disability of such Persons are Citizens (or, in the case of a
partnership, all of its general partners are Citizens), and (D) of which
more than 50% of the number of its directors, (or equivalent persons)
necessary to constitute a quorum are Citizens;

(iii) any joint venture (if not an association, corporation or
partnership) (A) that is organized under the laws of the United States or
of a state, territory, district or possession thereof and (B) all co-
venturers of which are Citizens; and

(iv) any trust (A) that is domiciled in and existing under the laws of
the United States or of a state, territory, district or possession thereof,
(B) the trustee of which is a Citizen, and (C) of which not less than a 75%
interest is held for the benefit of Citizens.

Under the Citizenship Amendment, voting rights will be denied to any shares
owned by Non-Citizens in excess of the Permitted Amount (the "Excess Shares"),
and dividends will be withheld by Superior with respect to such Excess Shares,
pending transfer of the Excess Shares to a Citizen or a reduction in the
aggregate number of shares owned by Non-Citizens to or below the Permitted
Amount. Superior's Board of Directors will have the power to make a conclusive
determination as to those shares of Superior Capital Stock that constitute the
Excess Shares. This determination will be made by reference to the most recent
acquisitions of shares of Capital Stock of Superior by Non-Citizens.

In addition, the Citizenship Amendment would authorize, but not require,
Superior to redeem shares of Capital Stock owned by Non-Citizens in excess of
the Permitted Amount in order to reduce ownership by Non-Citizens to the
Permitted Amount. The redemption price would be equal to (i) the average of the
closing sales prices of such shares on the Nasdaq National Market (or, if
listed on a national security exchange, the average closing price of such
shares on such exchange, and if not listed on any national security exchange or
quoted on Nasdaq, the mean between the representative bid and ask prices as
quoted by Nasdaq or other generally recognized reporting systems, and if not so
quoted, as determined in good faith by the Board of Directors) during the 10
trading days prior to the notice of redemption and (ii) any dividend or other
distribution declared with respect to such shares prior to the date such shares
are called for redemption but which has been withheld by Superior. Superior
would have the option to pay the redemption price for any shares owned by Non-
Citizens in excess of the Permitted Amount in cash or by delivery of a
promissory note having a maturity of not more than ten years from the date of
issuance and bearing interest at a rate equal to the then current coupon rate
of a 10-year Treasury note.

The Citizenship Amendment would also authorize the Board of Directors to
implement in the future measures necessary or desirable to assure that it can
monitor effectively the citizenship of the holders of its Capital Stock. To
that end, the Board would have the authority to require proof of citizenship,
of existing or prospective stockholders, as well as to implement and maintain a
dual stock certificate system under which different forms of stock certificates
representing outstanding shares of Superior's Capital Stock would be issued to
Citizens or Non-Citizens. If a dual stock certificate system were to be
implemented, any stock certificate

77
<PAGE>

surrendered for transfer thereafter would have to be accompanied by a
citizenship certificate signed by the transferee and any additional proof of
citizenship requested by Superior or its transfer agent, with the transfer
agent then registering the transfer and issuance of a new stock certificate
designated as Citizen or Non-Citizen depending upon the citizenship of the new
owner. In addition, to the extent necessary to enable Superior to determine the
number of shares owned by Non-Citizens for purposes of submitting the proof of
United States citizenship required under the Maritime Laws, Superior could
require record holders and beneficial owners from time to time to confirm their
citizenship status and could, in the discretion of the Board of Directors,
temporarily withhold dividends payable, and deny voting rights, with respect to
the shares of Capital Stock held by any such record holder and beneficial owner
until confirmation of its citizenship status is received. Superior's management
has been advised by its transfer agent and by certain nominee holders of
Superior Common Stock (including The Depository Trust Company) that dual stock
certificate systems for other similarly situated companies are currently in
place and that the transfer agent would be able to implement procedures
pursuant to which Superior would be able to monitor the citizenship of the
beneficial owners of its securities following the implementation of a dual
stock certificate system.

Based on its current low level of stock ownership by Non-Citizens, the Board
of Directors has determined that it is unnecessary to implement a dual stock
certificate system at this time. However, the Board of Directors intends to
review periodically its level of stock ownership by Non-Citizens, and it is
possible that the Board would implement a dual stock certificate system if the
level of stock ownership by Non-Citizens materially increases in the future.
Stockholders should not seek to exchange their stock certificates at this time.
If a dual stock certificate system is implemented in the future, instructions
regarding the exchange of outstanding stock certificates for "Citizen" and
"Non-Citizen" stock certificates will be mailed to the stockholders of Superior
at that time.

Effect of Amendment on Stockholders

Although the implementation of the Citizenship Amendment will not affect the
rights of Superior's stockholders who are Citizens to hold its outstanding
Superior Common Stock, if the number of shares of Superior Common Stock held by
Non-Citizens approaches the Permitted Amount, the ability of stockholders of
Superior who are Citizens to sell Superior Common Stock to Non-Citizens may be
curtailed, which could have an adverse effect on the liquidity of their
holdings of Superior Common Stock. Because sales of Superior Common Stock by
Citizens and Non-Citizens to Citizens will not be affected by the
implementation of the Citizenship Amendment, any such effect is not expected to
be material.

Based on information supplied to Superior by its transfer agent, none of the
Superior Common Stock outstanding was held of record by Non-Citizens as of the
Record Date, and based on information supplied to Superior by Cardinal, none of
the Superior Common Stock estimated to be outstanding following the Merger is
expected to be held of record by Non-Citizens. Although record ownership is not
necessarily indicative of the beneficial ownership of such shares, the Board of
Directors has no reason to believe that the percentage of the Superior Common
Stock beneficially owned by Non-Citizens is materially higher than the
percentage reflected in its stock transfer records. Because any remedies that
may be imposed by Superior pursuant to the Citizenship Amendment will be
imposed solely on the Excess Shares, determined as described above, and because
it is not expected that there will be any Excess Shares at the time the
Citizenship Amendment is approved, the implementation of the Citizenship
Amendment is not expected to have any immediate effect on current stockholders
of Superior.

Vote Required

The affirmative vote of the holders of a majority of the shares of Superior
Common Stock outstanding is required to approve the Citizenship Amendment. If
adopted, the Citizenship Amendment will become effective concurrently with the
Closing Date and as soon as Superior files with the Delaware Secretary of State
the certificate required under state law. Approval of this proposal is a
condition to consummation of the Merger. Likewise, the Citizenship Amendment
will only be effected if the Merger is consummated.

The Board of Directors unanimously recommends that you vote FOR the
Citizenship Amendment.

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<PAGE>

PROPOSAL TO APPROVE THE SUPERIOR ENERGY SERVICES, INC.
1999 STOCK INCENTIVE PLAN

(Proposal No. 5)

General

The Board of Directors of Superior strongly believes that the growth of
Superior depends upon the efforts of its directors, officers, key employees,
consultants and advisers and that the Superior Energy Services, Inc. 1999 Stock
Incentive Plan (the "Plan") will provide an effective means of attracting and
retaining qualified key personnel and enhancing their long-term focus on
maximizing stockholder value. The Plan was adopted by the Board of Directors,
subject to approval by the stockholders at the Meeting, and to be effected only
upon consummation of the Merger. The principal features of the Plan are
summarized below. This summary is qualified in its entirety, however, by
reference to the Plan, a copy of which is attached to this Proxy Statement as
Appendix E.

Officers, key employees, consultants or advisers of Superior (including
officers who are also directors of Superior) will be eligible to receive awards
("Incentives") under the Plan when designated by the Compensation Committee.
After the Merger, Superior and its subsidiaries (including Cardinal and
Cardinal Services, Inc.) will have approximately 28 officers, 232 key employees
and no consultants or advisers eligible to be granted Incentives under the
Plan. Incentives under the Plan may be granted in any one or a combination of
the following forms: (a) incentive stock options under Section 422 of the
Internal Revenue Code (the "Code") and non-qualified stock options; (b)
restricted stock; and (c) other stock-based awards.

Directors of Superior who are not also full-time employees of Superior
("Outside Directors") will automatically be granted non-qualified stock options
through the Plan upon joining the Board and on an annual basis thereafter.
Superior currently has two Outside Directors. Immediately following the Meeting
and the Merger, Superior will have five Outside Directors.

Purpose of the Proposal

The Board of Directors is committed to creating and maintaining a
compensation system based to a significant extent on grants of equity-based
awards. The Board of Directors believes that providing members of management
and key personnel with a proprietary interest in the growth and performance of
Superior is crucial to stimulating individual performance while at the same
time enhancing stockholder value. The Board further believes that the Plan will
provide Superior with the ability to attract, retain and motivate key personnel
and directors in a manner that is tied to the interests of stockholders.

Terms of the Plan

Shares Issuable through the Plan. A total of 10% of the number of shares of
Superior Common Stock that will be issued and outstanding following the Merger
will be authorized to be issued under the Plan. There are currently 1,649,500
options outstanding under Superior's 1995 Stock Incentive Plan (the "1995
Plan") and 64,000 shares remain available for grant under the 1995 Plan.

Shares of Superior Common Stock subject to Incentives that are cancelled,
terminated or forfeited prior to issuance, or shares of Superior Common Stock
that are issued as Incentives and forfeited or reacquired by Superior will
again be available for issuance under the Plan. Incentives that are paid in
cash are not counted against the total number of shares issuable through the
Plan. To the extent that shares are delivered to pay the exercise price of
options under the Plan, the number of shares delivered will again be available
for the grant of awards under the Plan, other than the grant of incentive stock
options under Section 422 of the Code. Under no circumstances may the number of
shares issued pursuant to incentive stock options exceed 250,000 shares. The
number of shares with respect to which awards of restricted stock and other
stock-based awards for which a per share purchase price of less than 100% of
fair market value is paid may not exceed 250,000 shares. The shares

79
<PAGE>

to be delivered under the Plan will be made available from the authorized but
unissued shares of Superior Common Stock, from treasury shares or from shares
acquired by Superior on the open market or otherwise. No individual may
receive in any year awards under the Plan, whether payable in cash or shares,
that relate to more than 1,000,000 shares of Superior Common Stock.

The number and kind of shares of Superior Common Stock subject to the Plan
and subject to outstanding Incentives will be adjusted in the event of a
change in the capital structure of Superior in proportion to the change in the
outstanding shares of Superior Common Stock.

The closing sale price of a share of Superior Common Stock, as quoted on
the Nasdaq Stock Market on June 11, 1999, was $4.88.

Administration of the Plan. The Compensation Committee will administer the
Plan and will have authority to award Incentives under the Plan, to interpret
the Plan, to establish any rules or regulations relating to the Plan that it
determines to be appropriate, to make any other determination that it believes
necessary or advisable for the proper administration of the Plan and to
delegate its authority as appropriate.

Amendments to the Plan. The Board may amend or discontinue the Plan at any
time, except that no amendment or discontinuance may materially impair,
without the consent of the recipient thereof, an Incentive previously granted;
provided, however, that Superior retains the right to convert an incentive
stock option to a non-qualified stock option or to exercise all rights
provided in the Plan in the event of a change of control of Superior.

Types of Incentives. Each of the types of Incentives that may be granted
under the Plan is described below:

Stock Options. The Compensation Committee may grant non-qualified stock
options or incentive stock options to purchase shares of Superior Common
Stock. The Compensation Committee will determine the number and exercise price
of the options, and the time or times that the options become exercisable,
provided that the option exercise price may not be less than the fair market
value of the Superior Common Stock on the date of grant. The term of an option
will also be determined by the Compensation Committee, provided that the term
of an incentive stock option may not exceed 10 years. The Compensation
Committee may accelerate the exercisability of any stock option at any time.
The Compensation Committee may also approve the purchase by Superior of an
unexercised stock option from the optionee by mutual agreement for the
difference between the exercise price and the fair market value of the shares
covered by the option.

The option exercise price may be paid in cash, in shares of Superior Common
Stock held for six months, in a combination of cash and shares of Superior
Common Stock or through a broker assisted exercise arrangement approved in
advance by Superior.

Incentive stock options will be subject to certain additional requirements
necessary in order to qualify as incentive stock options under (S)422 of the
Code.

Restricted Stock. Shares of Superior Common Stock may be granted by the
Compensation Committee to an eligible employee and made subject to
restrictions on sale, pledge or other transfer by the employee for a certain
period (the "Restricted Period"). A Restricted Period of at least three years
is required, except that if vesting of the shares is subject to the attainment
of specified performance goals, a Restricted Period of one year or more is
permitted. All shares of restricted stock will be subject to such restrictions
as the Compensation Committee may provide in an agreement with the employee,
including, among other things, that the shares are required to be forfeited or
resold to Superior in the event of termination of employment or in the event
specified performance goals or targets are not met. Subject to the
restrictions provided in the agreement and the Plan, a participant receiving
restricted stock shall have all of the rights of a stockholder as to such
shares.

Other Stock-Based Awards. The Plan also authorizes the Compensation
Committee to grant participants awards of Superior Common Stock and other
awards that are denominated in, payable in, valued in whole or in

80
<PAGE>

part by reference to, or are otherwise based on the value of, Superior Common
Stock ("Other Stock-Based Awards"). The Compensation Committee has discretion
to determine the participants to whom Other Stock-Based Awards are to be made,
the times at which such awards are to be made, the size of such awards, the
form of payment, and all other conditions of such awards, including any
restrictions, deferral periods or performance requirements. The terms of the
Other Stock-Based Awards will be subject to such rules and regulations as the
Compensation Committee determines. An Other Stock-Based Award, including an
outright grant of shares, may be made in lieu of the payment of cash
compensation otherwise due to a participant from Superior.

Performance-Based Compensation under Section 162(m). For restricted stock
and Other Stock-Based Awards that are intended to qualify as performance-based
compensation under Section 162(m), the Compensation Committee will establish
specific performance goals for each performance period not later than 90 days
after the beginning of the performance period. The Compensation Committee will
also establish a schedule, setting forth the portion of the award that will be
earned or forfeited based on the degree of achievement, or lack thereof, of the
performance goals at the end of the performance period by Superior, an
operating division or a subsidiary. The Compensation Committee will use any or
a combination of the following performance measures: earnings per share, return
on assets, an economic value added measure, stockholder return, earnings,
return on equity, return on investment, cash provided by operating activities,
increase in cash flow or the safety record of Superior, an operating division
or a subsidiary. For any performance period, the performance objectives may be
measured on an absolute basis or relative to a group of peer companies selected
by the Compensation Committee, relative to internal goals, or relative to
levels attained in prior years.

In the event of a change of control of Superior or the retirement, death or
disability of a participant during the performance period, the Compensation
Committee may provide that all or a portion of the restricted stock and Other
Stock-Based Awards will vest, but if an Incentive vests in that manner, the
compensation will not qualify as performance-based compensation under Section
162(m). Prior to the payment of any Other Stock-Based Award or the release of
restrictions on performance-based restricted stock, the Compensation Committee
must certify in writing that the performance goals and all applicable
conditions have been met.

The Compensation Committee retains authority to change the performance goal
objectives with respect to future grants to any of those provided in the Plan.
As a result, the regulations under Section 162(m) require that the material
terms of the performance goals be reapproved by the stockholders five years
after initial stockholder approval.

Grant of Options to Outside Directors. The Plan provides for the automatic
grant to each Outside Director of an option to acquire 20,000 shares of
Superior Common Stock on the date such person first becomes a member of the
Board and an option to acquire 5,000 shares of Superior Common Stock on the day
following each annual meeting of stockholders beginning with the 2000 annual
meeting, if shares of Superior Common Stock remain available for grant under
the Plan. The exact number to be granted each year shall be determined by the
Compensation Committee.

The options granted to Outside Directors become exercisable 25% per year
beginning one year after grant, but become immediately exercisable in full in
the event of a change of control of Superior or in the event of the Outside
Director's retirement from the Board on or after reaching age 65, death or
disability. No stock option granted to an Outside Director may be exercised
more than 10 years after the date of grant or more than one year after
termination of Board service. The exercise price of stock options granted to
Outside Directors shall be equal to the fair market value of a share of
Superior Common Stock on the date of grant.

Termination of Employment. If an employee participant ceases to be an
employee of Superior for any reason, including death, any Incentive may be
exercised or shall expire at such time or times as may be determined by the
Committee in the Incentive agreement.

81
<PAGE>

Change of Control. In the event of a change of control of Superior, as
defined in the Plan, all outstanding options granted pursuant to the Plan shall
become fully exercisable, all Incentives shall vest in full, all restrictions
or limitations on any Incentives shall lapse and all performance criteria and
other conditions relating to the payment of Incentives will be deemed to be
achieved.

In addition to the acceleration of exercisability and vesting upon the
occurrence of a change of control, the Compensation Committee will have the
authority to take a variety of actions regarding outstanding Incentives. Within
certain time periods, the Compensation Committee may (i) require that all
outstanding stock options remain exercisable only for a limited time, after
which time all such options will terminate, (ii) require the surrender to
Superior of some or all outstanding options in exchange for Superior Common
Stock or a cash payment for each option equal in value to the per-share change
of control value, calculated as described in the Plan, over the exercise price,
(iii) make any equitable adjustments to outstanding Incentives as the
Compensation Committee deems necessary to reflect the corporate change or (iv)
provide that an option shall become an option relating to the number and class
of shares of stock or other securities or property (including cash) to which
the participant would have been entitled in connection with the corporate
change if the participant had been a stockholder.

Transferability of Incentives. Incentives are not transferable except (a) by
will, (b) by the laws of descent and distribution, or (c) only in the case of
stock options, pursuant to a domestic relations order, to family members, to a
family partnership, to a family limited liability company or to a trust for the
benefit of family members, if permitted by the Compensation Committee and so
provided in the Incentive agreement.

Awards To Be Granted

If the Plan is approved by stockholders and the Merger is consummated,
Superior proposes, subject to the review and final determination by the
Compensation Committee, to grant non-qualified stock options to executive
officers as described under "The Merger--Interests of Certain Persons in the
Merger." In addition, Superior proposes to grant an aggregate of approximately
1,700,000 non-qualified stock options to other officers and employees of the
combined company following consummation of the Merger.

Federal Income Tax Consequences of Stock Options

Under existing federal income tax provisions, a participant who is granted a
stock option will not normally realize any income, nor will Superior normally
receive any deduction for federal income tax purposes in the year the option is
granted.

When a non-qualified stock option granted pursuant to the Plan is exercised,
the employee will realize ordinary income measured by the difference between
the aggregate purchase price of the shares of Superior Common Stock as to which
the option is exercised and the aggregate fair market value of the shares of
Superior Common Stock on the exercise date and, subject to the limitations of
Section 162(m) of the Code, Superior will be entitled to a deduction in the
year the option is exercised equal to the amount the employee is required to
treat as ordinary income.

An employee generally will not recognize any income upon the exercise of any
incentive stock option, but the excess of the fair market value of the shares
at the time of exercise over the option price will be an item of tax
preference, which may, depending on particular factors relating to the
employee, subject the employee to the alternative minimum tax imposed by
Section 55 of the Code. The alternative minimum tax is imposed in addition to
the federal individual income tax, and it is intended to ensure that individual
taxpayers do not completely avoid federal income tax by using preference items.
An employee will recognize capital gain or loss in the amount of the difference
between the exercise price and the sale price on the sale or exchange of stock
acquired pursuant to the exercise of an incentive stock option, provided the
employee does not dispose of such stock within two years from the date of grant
and one year from the date of exercise of the incentive stock option (the
"required holding periods"). An employee disposing of such shares before the
expiration of the

82
<PAGE>

required holding period will recognize ordinary income generally equal to the
difference between the option price and the fair market value of the stock on
the date of exercise. The remaining gain, if any, will be capital gain.
Superior will not be entitled to a federal income tax deduction in connection
with the exercise of an incentive stock option, except where the employee
disposes of the Superior Common Stock received upon exercise before the
expiration of the required holding period.

If the exercise price of an option is paid by the surrender of previously
owned shares, the basis of the previously owned shares carries over to the
shares received in replacement therefor. If the option is a non-qualified
option, the income recognized on exercise is added to the basis. If the option
is an incentive stock option, the optionee will recognize gain if the shares
surrendered were acquired through the exercise of an incentive stock option and
have not been held for the applicable holding period. This gain will be added
to the basis of the shares received in replacement of the previously owned
shares.

If, upon a change in control of Superior, the exercisability or vesting of
an Incentive granted under the Plan is accelerated, any excess on the date of
the change in control of the fair market value of the shares or cash issued
under accelerated Incentives over the purchase price of such shares, if any,
may be characterized as Parachute Payments (within the meaning of Section 280G
of the Code) if the sum of such amounts and any other such contingent payments
received by the employee exceeds an amount equal to three times the "Base
Amount" for such employee. The Base Amount generally is the average of the
annual compensation of such employee for the five years preceding such change
in ownership or control. An Excess Parachute Payment, with respect to any
employee, is the excess of the Parachute Payments to such person, in the
aggregate, over and above such person's Base Amount. If the amounts received by
an employee upon a change in control are characterized as Parachute Payments,
such employee will be subject to a 20% excise tax on the Excess Parachute
Payment pursuant to Section 4999 of the Code, and Superior will be denied any
deduction with respect to such Excess Parachute Payment.

This summary of federal income tax consequences of non-qualified and
incentive stock options does not purport to be complete. Reference should be
made to the applicable provisions of the Code. There also may be state and
local income tax consequences applicable to transactions involving options.

Vote Required

Approval of the Plan requires the affirmative vote, cast in person or by
proxy, of the holders of at least a majority of the shares of Superior Common
Stock present and entitled to vote at the Meeting. Approval of this Proposal is
a condition to consummation of the Merger. Likewise, the Plan will only be
effected if the Merger is consummated.

The Board of Directors unanimously recommends that you vote FOR approval of
the Plan.

83
<PAGE>

RELATIONSHIP WITH INDEPENDENT PUBLIC ACCOUNTANTS

KPMG LLP has been selected by the Board of Directors to serve as Superior's
independent public accountants for the fiscal year ending December 31, 1999. A
representative of KPMG LLP is expected to attend the Meeting, will have an
opportunity to make a statement if he wishes to do so, and will be available to
respond to appropriate questions.

STOCKHOLDER PROPOSALS

Eligible stockholders who desire to present a proposal qualified for
inclusion in the proxy materials related to the 2000 annual meeting of
stockholders must forward such in writing to the Secretary of Superior at the
address set forth on the first page of this Proxy Statement, in time to arrive
at Superior prior to February 19, 2000. If such proposal is in compliance with
all of the requirements of Rule 14a-8 under the Exchange Act, it will be
included in the proxy statement and set forth on the form of proxy issued for
such annual meeting of stockholders. It is urged that any such proposals be
sent by certified mail, return receipt requested.

Stockholder proposals which are not submitted for inclusion in Superior's
proxy materials pursuant to Rule 14a-8 under the Exchange Act may be brought
before an annual meeting provided that the proposals are timely. Such proposals
will be considered timely under the following circumstances:

(i) If the Merger is consummated, Superior's By-laws will require that
any stockholder who desires to present a proposal before the 2000 annual
meeting must notify the Secretary of Superior of such intent no earlier
than October 19, 1999 and no later than March 17, 2000.

(ii) If the Merger is not consummated, any stockholder who desires to
present a proposal before the 2000 annual meeting must notify the Secretary
of Superior of such intent no later than May 4, 2000.

By Order of the Board of Directors
Carolyn Plaisance
Secretary

Harvey, Louisiana

June 18, 1999

84
<PAGE>

INDEX TO FINANCIAL STATEMENTS

<TABLE>
<S> <C>
SUPERIOR ENERGY SERVICES, INC.
Independent Auditors' Report.............................................. F-2
Consolidated Balance Sheets as of December 31, 1997 and 1998 and March 31,
1999..................................................................... F-3
Consolidated Statements of Operations for the years ended December 31,
1996, 1997 and 1998, and the three months ended March 31, 1998 and 1999.. F-4
Consolidated Statements of Changes in Stockholders' Equity for the years
ended December 31, 1996, 1997 and 1998, and the three months ended March
31, 1999................................................................. F-5
Consolidated Statements of Cash Flows for the years ended December 31,
1996, 1997 and 1998, and the three months ended March 31, 1998 and 1999.. F-6
Notes to Consolidated Financial Statements................................ F-7
CARDINAL HOLDING CORP.
Independent Auditors' Report.............................................. F-17
Consolidated Balance Sheets as of December 31, 1997 and 1998 and March 31,
1999..................................................................... F-18
Consolidated Statements of Operations for the years ended December 31,
1996, 1997 and 1998, and the three months ended March 31, 1998 and 1999.. F-19
Consolidated Statements of Shareholders' Equity (Capital Deficiency) for
the years ended December 31, 1996, 1997 and 1998, and the three months
ended March 31, 1999..................................................... F-20
Consolidated Statements of Cash Flows for the years ended December 31,
1996, 1997 and 1998, and the three months ended March 31, 1998 and 1999.. F-21
Notes to Consolidated Financial Statements................................ F-22
</TABLE>

F-1
<PAGE>

Independent Auditors' Report

The Board of Directors and Shareholders
Superior Energy Services, Inc.:

We have audited the consolidated balance sheets of Superior Energy Services,
Inc. and subsidiaries as of December 31, 1997 and 1998, and the related
consolidated statements of operations, changes in stockholders' equity and cash
flows for each of the years in the three-year period ended December 31, 1998.
These consolidated financial statements are the responsibility of Superior's
management. Our responsibility is to express an opinion on these consolidated
financial statements based on our audits.

We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of
material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements. An audit
also includes assessing the accounting principles used and significant
estimates made by management, as well as evaluating the overall financial
statement presentation. We believe that our audits provide a reasonable basis
for our opinion.

In our opinion, the consolidated financial statements referred to above
present fairly, in all material respects, the financial position of Superior
Energy Services, Inc. and subsidiaries as of December 31, 1997 and 1998, and
the results of their operations and their cash flows for each of the years in
the three-year period ended December 31, 1998, in conformity with generally
accepted accounting principles.

/s/ KPMG LLP

KPMG LLP

New Orleans, Louisiana
March 9, 1999

F-2
<PAGE>

SUPERIOR ENERGY SERVICES, INC. AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS

(in thousands)

<TABLE>
<CAPTION>
December 31, March 31,
----------------- -----------
1997 1998 1999
-------- -------- -----------
(Unaudited)
<S> <C> <C> <C>
ASSETS
Current assets:
Cash and cash equivalents..................... $ 1,902 $ 737 $ 1,131
Accounts receivable--net of allowance for
doubtful accounts of $551,000 in 1997 and
$798,000 in 1998............................. 24,054 22,486 17,216
Inventories................................... 1,778 2,972 3,030
Income tax receivable......................... -- 2,568 --
Other......................................... 1,513 1,892 1,928
-------- -------- --------
Total current assets........................ 29,247 30,655 23,305
Property, plant and equipment--net.............. 51,797 76,187 76,647
Goodwill--net................................... 35,989 24,302 24,080
Patent--net..................................... 1,027 -- --
-------- -------- --------
Total assets................................ $118,060 $131,144 $124,032
======== ======== ========

LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable.............................. $ 5,976 $ 5,557 $ 3,118
Accrued expenses.............................. 3,872 6,316 3,035
Income taxes payable.......................... 893 -- 534
-------- -------- --------
Total current liabilities................... 10,741 11,873 6,687
Deferred income taxes........................... 7,127 8,612 8,612
Long-term debt.................................. 11,339 27,955 25,006
Stockholders' equity:
Preferred stock of $.01 par value. Authorized,
5,000,000 shares; none issued................ -- -- --
Common stock of $.001 par value. Authorized,
40,000,000 shares; issued and outstanding:
1997--29,173,390 shares; 1998--28,792,523
shares....................................... 29 29 29
Additional paid-in capital.................... 78,590 78,794 78,794
Retained earnings............................. 10,234 6,126 7,149
Treasury stock, at cost, 474,500 shares in
1998......................................... -- (2,245) (2,245)
-------- -------- --------
Total stockholders' equity.................. 88,853 82,704 83,727
-------- -------- --------
Total liabilities and stockholders' equity.. $118,060 $131,144 $124,032
======== ======== ========
</TABLE>

See accompanying notes to consolidated financial statements

F-3
<PAGE>

SUPERIOR ENERGY SERVICES, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF OPERATIONS

(in thousands, except per share data)

<TABLE>
<CAPTION>
Three Months
Years Ended December Ended
31, March 31,
------------------------- ----------------
1996 1997 1998 1998 1999
------- ------- ------- ------- -------
(Unaudited)
<S> <C> <C> <C> <C> <C>
Revenues......................... $23,638 $54,256 $91,334 $22,702 $18,042
------- ------- ------- ------- -------
Costs and expenses:
Costs of services.............. 11,040 23,216 43,734 9,562 7,601
Depreciation and amortization.. 1,323 3,272 7,494 1,661 2,142
Special charges................ -- -- 13,763 -- --
General and administrative..... 5,531 12,530 22,921 5,197 6,149
------- ------- ------- ------- -------
Total costs and expenses..... 17,894 39,018 87,912 16,420 15,892
------- ------- ------- ------- -------
Income from operations........... 5,744 15,238 3,422 6,282 2,150
Other income (expense):
Interest expense-net........... (127) (722) (1,490) (230) (500)
Merger termination............. -- -- (2,237) -- --
Gain on sale of subsidiary..... -- -- 1,176 1,176 --
------- ------- ------- ------- -------
Income before income taxes... 5,617 14,516 871 7,228 1,650
Provision for income taxes....... 1,685 5,061 4,979 2,747 627
------- ------- ------- ------- -------
Net income (loss)............ $ 3,932 $ 9,455 $(4,108) $ 4,481 $ 1,023
======= ======= ======= ======= =======
Earnings (loss) per share:
Basic.......................... $ 0.22 $ 0.44 $ (0.14) $ .15 $ .04
======= ======= ======= ======= =======
Diluted........................ $ 0.22 $ 0.43 $ (0.14) $ .15 $ .04
======= ======= ======= ======= =======
Weighted average common shares
used in computing earnings
(loss) per share:
Basic.......................... 17,566 21,695 28,982 29,182 28,793
======= ======= ======= ======= =======
Diluted........................ 17,619 21,993 28,982 29,531 28,822
======= ======= ======= ======= =======
</TABLE>

See accompanying notes to consolidated financial statements

F-4
<PAGE>

SUPERIOR ENERGY SERVICES, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY

(in thousands, except per share data)

<TABLE>
<CAPTION>
Common Additional
stock Common paid-in Retained Treasury
shares stock capital earnings stock Total
---------- ------ ---------- -------- -------- -------
<S> <C> <C> <C> <C> <C> <C>
Balance, December 31,
1995................... 17,032,916 $17 $16,230 $(3,153) $ -- $13,094
Net Income.............. -- -- -- 3,932 -- 3,932
Acquisition of remaining
minority interest in
Ace Rental Tools,
Inc.................... 14,129 -- 35 -- -- 35
Acquisition of Baytron,
Inc.................... 550,000 1 1,099 -- -- 1,100
Acquisition of
Dimensional Oil Field
Services, Inc.......... 1,000,000 1 2,187 -- -- 2,188
---------- --- ------- ------- ------- -------
Balance, December 31,
1996................... 18,597,045 19 19,551 779 -- 20,349
Net income.............. -- -- -- 9,455 -- 9,455
Acquisition of Nautilus
Pipe & Tool Rentals,
Inc.................... 420,000 -- 1,837 -- -- 1,837
Acquisition of Tong
Rentals & Supply Co.,
Inc.................... 1,100,000 1 5,499 -- -- 5,500
Exercise of B warrants.. 4,466,509 4 14,468 -- -- 14,472
Sale of common stock.... 3,900,000 4 36,867 -- -- 36,871
Exercise of stock
options................ 689,836 1 368 -- -- 369
---------- --- ------- ------- ------- -------
Balance, December 31,
1997................... 29,173,390 29 78,590 10,234 -- 88,853
Net loss................ -- -- -- (4,108) -- (4,108)
Purchase of common stock
for treasury........... (474,500) -- -- -- (2,245) (2,245)
Exercise of stock
options................ 93,633 -- 204 -- -- 204
---------- --- ------- ------- ------- -------
Balance, December 31,
1998................... 28,792,523 29 78,794 6,126 (2,245) 82,704
Net Income (Unaudited).. -- -- -- 1,023 -- 1,023
---------- --- ------- ------- ------- -------
Balance, March 31, 1999
(Unaudited)............ 28,792,523 $29 $78,794 $ 7,149 $(2,245) $83,727
========== === ======= ======= ======= =======
</TABLE>

See accompanying notes to consolidated financial statements

F-5
<PAGE>

SUPERIOR ENERGY SERVICES, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS

(in thousands)

<TABLE>
<CAPTION>
Three Months
Years Ended December 31, Ended March 31,
--------------------------- -----------------
1996 1997 1998 1998 1999
------- -------- -------- -------- -------
(Unaudited)
<S> <C> <C> <C> <C> <C>
Cash flows from operating
activities:
Net income (loss)............. $ 3,932 $ 9,455 $ (4,108) $ 4,481 $ 1,023
Adjustments to reconcile net
income (loss) to net cash
provided by operating
activities:
Depreciation and
amortization................ 1,323 3,272 7,494 1,661 2,142
Unearned income.............. (692) (392) -- -- --
Gain on sale of subsidiary... -- -- (1,176) (1,176) --
Special charges.............. -- -- 13,763 -- --
Deferred income taxes........ 258 (65) 777 -- --
Changes in operating assets
and liabilities, net of
acquisitions:
Accounts receivable.......... (1,490) (7,707) 3,863 85 5,270
Inventories.................. (229) (572) 550 (10) (58)
Other--net................... (56) (249) 955 163 198
Accounts payable............. (1,482) 403 (1,725) 307 (2,439)
Due to shareholders.......... (302) (1,433) -- -- --
Accrued expenses............. 751 1,083 1,047 (381) (3,281)
Income taxes payable......... 663 (1,452) (3,314) 1,885 3,102
------- -------- -------- -------- -------
Net cash provided by
operating activities....... 2,676 2,343 18,126 7,015 5,957
------- -------- -------- -------- -------
Cash flows from investing
activities:
Proceeds from sale of property
and equipment................ 354 -- -- -- --
Payments for purchases of
property and equipment....... (1,965) (9,804) (29,120) (11,015) (2,614)
Deferred payment for
acquisition of subsidiaries.. (2,000) -- (750) (750) --
Acquisition of businesses, net
of cash acquired............. (2,321) (47,793) (3,583) -- --
Proceeds from sale of
subsidiary................... -- -- 4,247 4,247 --
------- -------- -------- -------- -------
Net cash used in investing
activities................. (5,932) (57,597) (29,206) (7,518) (2,614)
------- -------- -------- -------- -------
Cash flows from financing
activities:
Proceeds from notes payable--
net.......................... (1,379) 5,011 11,956 826 (2,949)
Proceeds from exercise of
stock options................ -- 369 204 57 --
Purchase of common stock for
treasury..................... -- -- (2,245) -- --
Proceeds from sale of common
stock........................ -- 36,871 -- -- --
Proceeds from exercise of B
warrants..................... -- 14,472 -- -- --
------- -------- -------- -------- -------
Net cash (used in) provided by
financing activities......... (1,379) 56,723 9,915 883 (2,949)
------- -------- -------- -------- -------
Net increase (decrease) in
cash and cash equivalents.. (4,635) 1,469 (1,165) 380 394
Cash and cash equivalents at
beginning of year............. 5,068 433 1,902 1,902 737
------- -------- -------- -------- -------
Cash and cash equivalents at
end of year................... $ 433 $ 1,902 $ 737 $ 2,282 $ 1,131
======= ======== ======== ======== =======
</TABLE>

See accompanying notes to consolidated financial statements

F-6
<PAGE>

SUPERIOR ENERGY SERVICES, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

December 31, 1996, 1997 and 1998

(1) Summary of Significant Accounting Policies

(a) Basis of Presentation

The consolidated financial statements include the accounts of Superior
Energy Services, Inc. and its subsidiaries (Superior). All significant
intercompany accounts and transactions are eliminated in consolidation. Certain
previously reported amounts have been reclassified to conform to the 1998
presentation.

(b) Business

Superior provides a broad range of specialized oilfield services and
equipment primarily to major and independent oil and gas companies engaged in
the exploration, production and development of oil and gas properties offshore
in the Gulf of Mexico and throughout the Gulf Coast region. These services and
equipment include the rental of specialized oilfield equipment, oil and gas
well plug and abandonment services, electric and mechanical wireline services,
tank cleaning, the manufacture and sale of computerized electronic torque and
pressure control equipment and the manufacture and sale of oil spill
containment equipment. A majority of Superior's business is conducted with
major oil and gas exploration companies. Superior continually evaluates the
financial strength of their customers but does not require collateral to
support the customer receivables.

Superior's P&A, wireline and tank cleaning services are contracted for
specific projects on either a day rate or turnkey basis. Rental tools are
leased to customers on an as-needed basis on a day rate basis. Superior derives
a significant amount of its revenue from a small number of major and
independent oil and gas companies. In 1996, 1997 and 1998, one customer
accounted for 34.5%, 27% and 12%, respectively, of Superior's consolidated
revenue primarily in the rental and well services segments and another customer
accounted for 2%, 5% and 12%, respectively, of Superior's consolidated revenue
primarily in the rental segment. No other customer accounted for 10% or more of
revenue in 1996, 1997 or 1998. The inability of Superior to continue to perform
services for a number of its large existing customers, if not offset by sales
to new or existing customers, could have a material adverse effect on
Superior's business and financial condition.

The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates and
assumptions that affect the reported amounts of assets and liabilities and
disclosure of contingent assets and liabilities at the date of the financial
statements and the reported amounts of revenues and expenses during the
reporting period. Actual results could differ from those estimates.

(d) Property, Plant and Equipment

Property, plant and equipment are stated at cost. Depreciation is computed
using the straight-line method over the estimated useful lives of the related
lives as follows:

<TABLE>
<S> <C>
Buildings................................................... 30 years
Machinery and equipment..................................... 5 to 15 years
Automobiles, trucks and trailers............................ 2 to 5 years
Furniture and equipment..................................... 5 to 7 years
</TABLE>

Superior assesses the potential impairment of capitalized costs of long-
lived assets in accordance with Statement of Financial Accounting Standards
(FAS) No. 121, Accounting for the Impairment of Long-Lived

F-7
<PAGE>

SUPERIOR ENERGY SERVICES, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(Continued)

Assets and for Long-Lived Assets to be Disposed Of. Under this method,
Superior assesses its capitalized costs utilizing its current estimate of
future revenues and operating expenses. In the event net undiscounted cash
flow is less than capitalized costs, an impairment loss is recorded based on
estimated fair value, which would consider discounted future net cash flows.

(e) Goodwill

Superior amortizes costs in excess of fair value of net assets of
businesses acquired using the straight-line method over a period not to exceed
30 years. Recoverability is reviewed by comparing the undiscounted fair value
of cash flows of the assets, to which the goodwill applies to the net book
value of the assets, including goodwill.

(f) Inventories

Inventories are stated at the lower of average cost or market. The cost of
booms and parts are determined principally on the first-in, first-out method.

(g) Cash Equivalents

Superior considers all short-term deposits with a maturity of ninety days
or less to be cash equivalents.

(h) Revenue Recognition

For Superior's plug and abandonment (P&A), wireline and rental tool
operations and tank cleaning services, revenue is recognized when services or
equipment are provided. Superior contracts for P&A, wireline and tank cleaning
projects either on a day rate or turnkey basis, with a majority of its
projects conducted on a day rate basis. Superior's rental tools are leased on
a day rate basis, and revenue from the sale of equipment is recognized when
the equipment is shipped. Reimbursement from customers for the cost of rental
tools that are damaged or lost downhole are reflected as revenue at the time
of the incident.

(i) Income Taxes

Superior provides for income taxes in accordance with Statement of
Financial Accounting Standards (FAS) No. 109, Accounting for Income Taxes. FAS
No. 109 requires an asset and liability approach for financial accounting and
reporting for income taxes. Deferred income taxes reflect the impact of
temporary differences between amounts of assets for financial reporting
purposes and such amounts as measured by tax laws.

(j) Patents

Patents are amortized using the straight-line method over the life of each
patent.

(k) Earnings per Share

Superior computes earnings per share in accordance with Statement of
Financial Accounting Standards (FAS) No. 128, Earnings Per Share which
requires the presentation of "basic" and "diluted" earnings per share as
defined, on the face of the income statement for all entities with complex
capital structures. The number of dilutive stock options and warrants used in
computing diluted earnings per share were 53,000 in 1996 and 298,000 in 1997,
and these securities were anti-dilutive in 1998.

F-8
<PAGE>

SUPERIOR ENERGY SERVICES, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(Continued)

(l) Financial Instruments

Superior's financial instruments consist of cash and cash equivalents,
accounts receivable, accounts payable and long-term debt. The carrying amount
of these financial instruments approximates their fair values.

(m) Comprehensive Income

In June 1997, the Financial Accounting Standards Board issued Statement of
Financial Accounting Standards (FAS) No. 130, Reporting Comprehensive Income.
FAS No. 130 establishes standards for reporting and display of comprehensive
income and its components in a full set of general purpose financial
statements. Superior adopted this standard in 1998. Such adoption had no effect
on Superior's financial statement presentation as Superior has no items of
other comprehensive income.

(2) Supplemental Cash Flows Information (in thousands)

<TABLE>
<CAPTION>
1996 1997 1998
------ ------- ------
<S> <C> <C> <C>
Cash paid for:
Interest, net of amounts capitalized............. $ 106 $ 649 $1,481
====== ======= ======
Income taxes..................................... $ 994 $ 5,195 $7,050
====== ======= ======
Details of acquisitions:
Fair value of assets............................. $8,439 $76,245 11,822
------ ------- ------
Fair value of liabilities........................ 2,329 18,202 7,933
Common stock issued.............................. 3,288 7,338 --
Note Payable..................................... 250 -- --
------ ------- ------
Cash paid........................................ 2,572 50,705 3,889
Less cash acquired............................... 251 2,912 306
------ ------- ------
Net cash paid for acquisitions................. $2,321 $47,793 $3,583
====== ======= ======
</TABLE>

(3) Business Combinations

In September 1998, Superior acquired all of the outstanding common stock of
Hydro-dynamics Oilfield Contractors, Inc. (Hydro-dynamics) for $1,000,000 in
cash. Payment of an additional $750,000 will be based on the attainment of
certain objectives. At the third anniversary of the acquisition, additional
cash consideration, if any, will be based upon a multiple of four times Hydro-
dynamics= average earnings before interest, taxes, depreciation and
amortization (EBITDA) over a three year period from the date of acquisition.
The contingent consideration, if paid, will be capitalized as additional
purchase price. In no event will the total consideration paid exceed
$22,000,000. The property plant and equipment of Hydro-dynamics are valued at
their estimated fair market value of approximately $936,000. Deferred taxes
have been provided for the difference between the book and tax basis of the
property. The remaining assets and liabilities approximated their fair values.
The excess purchase price over the fair value of the net assets of Hydro-
dynamics of approximately $830,000 was allocated to goodwill.

In June 1998 Superior acquired all of the outstanding common stock of Lamb
Services, Inc. and Tong Specialty, Inc. for $2,857,000 cash. Additional cash
consideration, if any, will be based upon a multiple of four times the combined
companies' average EBITDA less certain adjustments. The contingent
consideration, if paid, will be capitalized as additional purchase price. The
additional consideration will be paid on the second and third anniversary of
the stock purchase agreement, and in no event, will the total additional
payments

F-9
<PAGE>

SUPERIOR ENERGY SERVICES, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(Continued)

exceed $28,143,000. The property, plant and equipment of Lamb Services, Inc.
and Tong Specialty, Inc. were valued at their estimated fair value of
approximately $4.1 million. Deferred taxes have been provided for the
difference between the book and tax basis of the property. The remaining assets
and liabilities approximate their fair values. The excess purchase price over
the fair value of the net assets of Lamb Services and Tong Specialty of
approximately $627,000 was allocated to goodwill.

In 1997, Superior acquired all of the outstanding common stock of six
companies for a combined $50,210,000 cash, 1,520,000 shares of Superior Common
Stock and promissory notes providing for payments of up to $20,655,000. The
amounts payable under the promissory notes are subject to certain contingencies
and are not reflected in the respective company's purchase price.

In July 1996, Superior, pursuant to a statutory merger, acquired Baytron,
Inc. ("Baytron") for $1,100,000 cash and 550,000 shares of Superior Common
Stock (at a $2.00 per share market price on the date of merger) for a total
purchase price of $2,200,000. The property, plant and equipment of Baytron were
valued at their estimated fair value of approximately $791,000. Deferred taxes
were provided for the difference between the book and tax basis of the
property. The remaining assets and liabilities approximated their fair values.
The excess purchase price over the fair value of the net assets of Baytron at
July 31, 1996 of $1,309,000 was allocated to goodwill.

The above acquisitions were accounted for as a purchase, and the results of
operations of the acquired companies have been included from their respective
acquisition dates.

The following unaudited pro forma information presents a summary of
consolidated results of operations as if the acquisitions had occurred on
January 1, 1998 and January 1, 1997 with pro forma adjustments to give effects
to amortization of goodwill, depreciation and certain other adjustments
together with related income tax effects (in thousands, except per share
amounts):

<TABLE>
<CAPTION>
1997 1998
------- -------
<S> <C> <C>
Revenues................................................ $96,869 $99,362
======= =======
Net income (loss)....................................... $12,821 $(4,538)
======= =======
Basic earnings (loss) per share......................... $ 0.58 $ (0.16)
======= =======
Diluted earnings (loss) per share....................... $ 0.57 $ (0.16)
======= =======
</TABLE>

The above pro forma financial information is not necessarily indicative of
the results of operations as they would have been had the acquisitions been
effected on the assumed date.

F-10
<PAGE>

SUPERIOR ENERGY SERVICES, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(Continued)

(4) Property, Plant and Equipment

A summary of property, plant and equipment at December 31, 1997 and 1998
(in thousands) is as follows:

<TABLE>
<CAPTION>
1997 1998
------- -------
<S> <C> <C>
Buildings................................................ $ 4,055 $ 6,050
Machinery and equipment.................................. 44,551 70,657
Automobiles, trucks, trailers and tractors............... 3,028 4,247
Furniture and fixtures................................... 604 950
Construction-in-progress................................. 2,356 1,447
Land..................................................... 1,268 1,696
------- -------
55,862 84,947
Less accumulated depreciation............................ 4,065 8,760
------- -------
Property, plant and equipment, net....................... $51,797 $76,187
======= =======
</TABLE>

The cost of property, plant and equipment leased to third parties was
$5,266,000 at December 31, 1997 and 1998. Interest cost incurred during the
period of construction of plant and equipment is capitalized. The interest
cost capitalized on plant and equipment was none in 1996, $167,000 in 1997,
and none in 1998.

(5) Notes Payable

Superior's notes payable as of December 31, 1997 and 1998 consist of the
following (in thousands):

<TABLE>
<CAPTION>
1997 1998
------- -------
<S> <C> <C>
Revolving line of credit in the original amount of
$45,000,000 bearing interest based on LIBOR plus 1.5%
to 2.5% set quarterly (7.31% at December 31, 1998)
principal due April 30, 2000........................... $10,350 $27,400
Other installment notes payable with interest rates
ranging from 7% to 10% due in monthly installments
through April, 2011.................................... 989 555
------- -------
11,339 27,955
Less current portion of notes payable .................. -- --
------- -------
Long-term debt ......................................... $11,339 $27,955
======= =======
</TABLE>

Superior maintains a revolving credit facility which provides for borrowing
of up to $45.0 million which matures on April 30, 2000, and bears interest at
an annual rate of LIBOR plus a margin that depends on Superior's debt coverage
ratio. A commitment fee ranging from .25% to .325% per annum is payable on the
unused portion of the credit. Borrowings under the Bank Credit Facility are
available for acquisitions, working capital, letters of credit and general
corporate purposes. Indebtedness under the Bank Credit Facility is guaranteed
by Superior's subsidiaries, collateralized by substantially all of the assets
of Superior and its subsidiaries, and a pledge of all the common stock of
Superior's subsidiaries. Pursuant to the Bank Credit Facility, Superior has
agreed to maintain certain financial ratios. The Bank Credit Facility also
imposes certain limitations on the ability of Superior to make capital
expenditures, pay dividends or other distributions to its stockholders, make
acquisitions or incur indebtedness outside of the Bank Credit Facility.
Superior is not required to maintain compensating balances in connection with
these agreements.

F-11
<PAGE>

SUPERIOR ENERGY SERVICES, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(Continued)

(6) Income Taxes

The components of income tax expense for the years ended December 31, 1996,
1997 and 1998 are as follows (in thousands):
<TABLE>
<CAPTION>
1996 1997 1998
------ ------ ------
<S> <C> <C> <C>
Current
Federal............................................ $1,382 $3,973 $3,346
State.............................................. 54 621 349
------ ------ ------
1,436 4,594 3,695
------ ------ ------
Deferred:
Federal............................................ 242 404 1,223
State.............................................. 7 63 61
------ ------ ------
249 467 1,284
------ ------ ------
$1,685 $5,061 $4,979
====== ====== ======
</TABLE>

The significant components of deferred income taxes at December 31, 1997 and
1998 are as follows (in thousands):

<TABLE>
<CAPTION>
1997 1998
------- -------
<S> <C> <C>
Deferred tax assets:
Allowance for doubtful accounts............................ $ 199 $ 295
Net operating loss carryforward............................ 979 898
Other...................................................... -- 496
------- -------
1,178 1,689
Valuation allowance.......................................... (1,034) (957)
------- -------
Net deferred tax asset................................... 144 732
------- -------
Deferred tax liabilities:
Property, plant and equipment.............................. (6,408) (8,675)
Patent..................................................... (280) --
Other...................................................... (583) (669)
------- -------
(7,271) (9,344)
------- -------
$(7,127) $(8,612)
======= =======
</TABLE>

A valuation allowance is provided to reduce the deferred tax assets to a
level which, more likely than not, will be realized. The net change in the
valuation allowance for the years ended December 31, 1996, 1997 and 1998 was a
decrease of $908,000, an increase of $42,000, and a decrease of $77,000,
respectively. The net deferred tax assets reflect management's estimate of the
amount which will be realized from future profitability which can be predicted
with reasonable certainty.

As of December 31, 1998, Superior had a net operating loss carryforward of
approximately $2.6 million which is available to reduce future Federal taxable
income through 2010. The utilization of the net operating loss carryforward is
limited to approximately $238,000 a year.

F-12
<PAGE>

SUPERIOR ENERGY SERVICES, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(Continued)

Income tax expense differs from the amounts computed by applying the US.
Federal income tax rate of 34% to income before income taxes as follows (in
thousands):

<TABLE>
<CAPTION>
1996 1997 1998
------ ------ ------
<S> <C> <C> <C>
Computed expected tax expense.................... $1,910 $4,935 $ 296
Increase (decrease) in income taxes resulting
from:
Impairment charge.............................. -- -- 4,143
State income taxes............................. (354) 432 480
Other.......................................... 129 (306) 60
------ ------ ------
Provision for income taxes....................... $1,685 $5,061 $4,979
====== ====== ======
</TABLE>

(7) Stockholders' Equity

In October 1995, Superior's stockholders approved the 1995 Stock Incentive
Plan (Incentive Plan) to provide long-term incentives to its key employees,
including officers and directors who are employees of Superior (Eligible
Employees). Under the Incentive Plan, as amended, Superior may grant incentive
stock options, non-qualified stock options, restricted stock, stock awards or
any combination thereof to Eligible Employees for up to 1,900,000 shares of
Superior Common Stock. In connection with the signing of the merger agreement
with Parker Drilling Company, which was subsequently terminated, all of
Superior's outstanding options vested. The Compensation Committee of the Board
of Directors establishes the exercise price of any stock options granted under
the Incentive Plan, provided the exercise price may not be less than the fair
market value of a common share on the date of grant.

A summary of stock options granted under the Incentive Plan for the years
ended December 31, 1996, 1997 and 1998 are as follows:

<TABLE>
<CAPTION>
1996 1997 1998
---------------------- ------------------------ ------------------------
Number
of Weighted Number of Weighted Number of Weighted
Shares Average Price Shares Average Price Shares Average Price
------- ------------- --------- ------------- --------- -------------
<S> <C> <C> <C> <C> <C> <C>
Outstanding at beginning
of year................ 150,000 $2.53 531,500 $2.55 1,337,800 $3.84
Granted................. 421,500 $2.56 860,500 $4.56 496,000 $7.96
Exercised............... -- -- (54,200) $2.60 (80,300) $2.60
Forfeited............... (40,000) $2.56 -- -- (57,000) $5.07
======= ===== ========= ===== ========= =====
Outstanding at the end
of year................ 531,500 $2.55 1,337,800 $3.84 1,696,500 $4.49
======= ===== ========= ===== ========= =====
Exercisable at end of
year................... 357,000 $2.55 443,300 $2.58 1,696,500 $4.49
======= ===== ========= ===== ========= =====
Available for future
grants................. 68,500 8,000 64,000
======= ========= =========
</TABLE>

A summary of information regarding stock options outstanding at December 31,
1998 is as follows:

<TABLE>
<CAPTION>
Options Outstanding Options Exercisable
------------------------------ ---------------------
Range of
Exercise Remaining Weighted Weighted
Prices Shares Contractual Life Average Price Shares Average Price
----------- ------- ---------------- ------------- ------- -------------
<S> <C> <C> <C> <C> <C>
$2.50-$3.43 733,500 6-8 yrs $2.95 733,500 $2.95
$4.75-$9.25 963,000 8.5-9.5 yrs $5.67 963,000 $5.67
</TABLE>

Additionally, at December 31, 1998, options relating to the 1995 share
exchange to purchase an aggregate of 65,000 shares of Superior Common Stock at
an exercise price of $3.60 per share were outstanding until December 31, 2000.

F-13
<PAGE>

SUPERIOR ENERGY SERVICES, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(Continued)

Superior accounts for its stock based compensation under the principles
prescribed by the Accounting Principles Board's Opinion No. 25, Accounting for
Stock Issued to Employees (Opinion No. 25). However, Statement of Financial
Accounting Standards (FAS) No. 123 Accounting for Stock-Based Compensation
permits the continued use of the value based method prescribed by Opinion No.
25 but requires additional disclosures, including pro forma calculations of
earnings and net earnings per share as if the fair value method of accounting
prescribed by FAS No. 123 had been applied. The pro forma data presented below
is not representative of the effects on reported amounts for future years (in
thousands, except per share amounts).

<TABLE>
<CAPTION>
As Reported Pro forma
--------------------- -----------------------
1996 1997 1998 1996 1997 1998
------ ------ ------- ------ ------ -------
<S> <C> <C> <C> <C> <C> <C>
Net income (loss)............. $3,932 $9,455 $(4,108) $3,798 $9,117 $(5,337)
Basic earnings (loss) per
share........................ $ 0.22 $ 0.44 $ (0.14) $ 0.22 $ 0.42 $ (0.18)
Diluted earnings (loss) per
share........................ $ 0.22 $ 0.43 $ (0.14) $ 0.22 $ 0.41 $ (0.18)
Average fair value of grants
during the year.............. $ -- $ -- $ -- $ 0.58 $ 1.48 $ 4.71
====== ====== ======= ====== ====== =======
Black-Scholes option pricing
model assumptions
Risk free interest rate........................... 6.1% 6.1% 6.1%
Expected life (years)............................. 3 2 2
Volatility........................................ 20.6% 73.0% 119.6%
Dividend yield.................................... -0- -0- -0-
====== ====== =======
</TABLE>

(8) Commitments and Contingencies

Superior leases certain office, service and assembly facilities under
operating leases. The leases expire at various dates over the next several
years. Total rent expense was $169,000, $331, 000 and $530,000 in 1996, 1997
and 1998, respectively. Future minimum lease payments under non-cancelable
leases for the five years ending December 31, 1999 through 2003 are as follows:
$586,000, $458,000, $238,000, $178,000 and $51,000 respectively.

From time to time, Superior is involved in litigation arising out of
operations in the normal course of business. In management's opinion, Superior
is not involved in any litigation, the outcome of which would have a material
effect on the financial position, results of operations or liquidity of
Superior.

(9) Related Party Transactions

Superior paid consulting fees to a director, who is not an employee, of
$23,000, $13,000 and $10,000 in 1996, 1997 and 1998, respectively. The
employment contract of a director, who is a former officer, was converted into
a consulting agreement in 1996. He was paid $60,000 in 1996 and 1997. In 1998,
this director's contract was terminated by paying $60,000 and a note receivable
Superior had fully reserved in prior years. Superior also paid a director, who
is also an employee and a shareholder rent of approximately $46,000, $70,000
and $69,000 in 1996, 1997 and 1998, respectively. Superior is obligated to make
such rent payments in the future as follows: $69,000 in 1999 and $24,000 in
2000.

(10) Segment Information

In 1998, Superior adopted Statement of Financial Accounting Standard (FAS)
No. 131, Disclosures about Segments of an Enterprise and Related Information.
Superior's reportable segments are grouped by products and services as follows:
rental tools, well services and other. Each segment offers unique products and
services within the oilfield services industry. The rental tools segment sells
and rents specialized equipment for use with onshore and offshore oil and gas
well drilling, completion, production and workover activities. The well
services segment provides plug and abandonment services, electric and
mechanical wireline services and tank cleaning to its customer base.

F-14
<PAGE>

SUPERIOR ENERGY SERVICES, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(Continued)

The other segment manufactures and sells computerized electronic and
pressure control equipment for the oil and gas industry, and provides the
manufacturing, sale and rental of oil spill containment equipment. All of the
segments operate primarily in the Gulf Coast Region.

The accounting policies of the reportable segments are the same as those
described in Note 1 of the Notes to the Consolidated Financial Statements.
Superior evaluates the performance of its operating segments based on operating
profits or losses before special charges. Segment revenues reflect direct sales
of products and services for that segment, and each segment records direct
expenses related to its employees and its operations. Identifiable assets are
primarily those assets directly used in the operations of each segment.

Summarized financial information concerning Superior's reportable segments
as of December 31, 1996, 1997 and 1998 is shown in the following tables (in
thousands):

<TABLE>
<CAPTION>
Rental Well Unallocated Consolidated
1996 Tools Services Other Total Amount Total
- ------------------------ -------- -------- ------- -------- ----------- ------------
<S> <C> <C> <C> <C> <C> <C>
Identifiable assets .... $ 5,291 $12,183 $10,613 $ 28,087 $ 113 $ 28,200
Capital expenditures.... 562 1,217 186 1,965 -- 1,965
Revenues................ $ 2,843 $15,626 $ 5,169 $ 23,638 $ -- $ 23,638
Costs of services....... 416 8,705 1,919 11,040 -- 11,040
Depreciation and
amortization........... 522 234 567 1,323 -- 1,323
General and
administrative......... 875 3,188 1,468 5,531 -- 5,531
Operating income........ 1,030 3,499 1,215 5,744 -- 5,744
Interest................ -- -- -- -- 127 127
-------- ------- ------- -------- ------- --------
Income before income
taxes.................. $ 1,030 $ 3,499 $ 1,215 $ 5,744 $ (127) $ 5,617
======== ======= ======= ======== ======= ========

<CAPTION>
Rental Well Unallocated Consolidated
1997 Tools Services Other Total Amount Total
- ------------------------ -------- -------- ------- -------- ----------- ------------
<S> <C> <C> <C> <C> <C> <C>
Identifiable assets .... $ 85,149 $20,635 $11,705 $117,489 $ 571 $118,060
Capital expenditures.... 4,850 3,983 971 9,804 -- 9,804
Revenues................ $ 19,697 $27,018 $ 7,541 $ 54,256 $ -- $ 54,256
Costs of services....... 5,889 14,689 2,638 23,216 -- 23,216
Depreciation and
amortization........... 1,960 592 720 3,272 -- 3,272
General and
administrative......... 5,245 4,372 2,913 12,530 -- 12,530
Operating income........ 6,603 7,365 1,270 15,238 -- 15,238
Interest................ -- -- -- -- 722 722
-------- ------- ------- -------- ------- --------
Income before income
taxes.................. $ 6,603 $ 7,365 $ 1,270 $ 15,238 $ (722) $ 14,516
======== ======= ======= ======== ======= ========

<CAPTION>
Rental Well Unallocated Consolidated
1998 Tools Services Other Total Amount Total
- ------------------------ -------- -------- ------- -------- ----------- ------------
<S> <C> <C> <C> <C> <C> <C>
Identifiable assets .... $101,581 $24,266 $ 4,206 $130,053 $ 1,091 $131,144
Capital expenditures.... 25,405 3,450 265 29,120 -- 29,120
Revenues................ $ 56,289 $30,599 $ 4,446 $ 91,334 $ -- $ 91,334
Costs of services....... 20,949 20,191 2,594 43,734 -- 43,734
Depreciation and
amortization........... 6,070 982 442 7,494 -- 7,494
General and
administrative......... 16,273 4,881 1,767 22,921 -- 22,921
Special charges......... 6,902 3,820 3,041 13,763 -- 13,763
Operating income........ 6,095 725 (3,398) 3,422 -- 3,422
Merger termination...... -- -- -- -- 2,237 2,237
Gain on sale of
subsidiary............. -- -- 1,176 1,176 -- 1,176
Interest................ -- -- -- -- 1,490 1,490
-------- ------- ------- -------- ------- --------
Income before income
taxes.................. $ 6,095 $ 725 $(2,222) $ 4,598 $(3,727) $ 871
======== ======= ======= ======== ======= ========
</TABLE>

F-15
<PAGE>

SUPERIOR ENERGY SERVICES, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(Continued)

(11) Special Charges and Merger Termination

During the year ended December 31, 1998 Superior recorded a pre-tax special
charge of $14.4 million. The special charge consisted of $12.1 million of
impairment of goodwill, $930,000 in patents and $690,000 in associated
inventory as a result of obsolescence and $650,000 of costs associated with
reduction in employees as a result of the general decline in the industry. The
portion of the special charge related to inventory obsolescence is included in
costs of services in the consolidated statement of operations.

The non-cash writeoff of goodwill was recorded in accordance with FAS No.
121, which requires that long-lived assets and certain identifiable intangibles
held and used by Superior be reviewed for impairment whenever events or changes
in circumstances indicate that the carrying amount of an asset may not be
recoverable. The severity as well as the duration of the current oil and gas
industry is such an event. In such instances where there is goodwill associated
with the asset as a result of a business combination accounted for using the
purchase method, the goodwill is eliminated before making any reduction of the
carrying amounts of the impaired long-lived assets.

Superior's review of its long-lived assets indicated that the carrying value
of certain of Superior's assets in the well services, rental tools and the oil
containment boom businesses had been impaired. The fair value of the assets was
determined by discounting the estimated net cash flows from the assets. The
result was impairment charge of $12.1 million for the year ended December 31,
1998 consisting entirely of goodwill.

The special charges of $930,000 in patents and $690,000 in associated
inventory are a result of obsolescence in the oil containment boom business as
evidenced by declining cash flows. Superior also authorized and committed to
terminating thirty employees during the fourth quarter of 1998. As a result,
included in the special charge, is $650,000 for severance, unemployment
contract and benefits costs for the terminated employees.

At the beginning of the fourth quarter of 1998, Superior entered into an
agreement to merge with the Parker Drilling Company (Parker). Superior and
Parker subsequently jointly agreed to terminate the merger agreement. As part
of the termination, Superior agreed to pay Parker $2.125 million and also
incurred approximately $112,000 in costs associated with the merger
termination.

F-16
<PAGE>

REPORT OF INDEPENDENT AUDITORS

The Board of Directors
Cardinal Holding Corp.

We have audited the accompanying consolidated balance sheets of Cardinal
Holding Corp. as of December 31, 1997 and 1998, and the related consolidated
statements of operations, shareholders' equity (capital deficiency), and cash
flows for each of the three years in the period ended December 31, 1998. These
financial statements are the responsibility of Cardinal's management. Our
responsibility is to express an opinion on these financial statements based on
our audits.

In our opinion, the financial statements referred to above present fairly,
in all material respects, the consolidated financial position of Cardinal
Holding Corp. at December 31, 1997 and 1998, and the consolidated results of
its operations and its cash flows for each of the three years in the period
ended December 31, 1998, in conformity with generally accepted accounting
principles.

/s/ Ernst & Young LLP

Ernst & Young LLP

New Orleans, Louisiana
March 2, 1999,
except for the fourth paragraph of
Note 5, as to which the date is March 31, 1999

F-17
<PAGE>

CARDINAL HOLDING CORP.

CONSOLIDATED BALANCE SHEETS

(In Thousands, Except Share Amounts)

<TABLE>
<CAPTION>
December 31
---------------- March 31
1997 1998 1999
------- -------- --------
(Unaudited)
<S> <C> <C> <C>
ASSETS
Current assets:
Cash and cash equivalents............... $ -- $ 421 $ 266
Accounts receivable--trade, less
allowance of $569, $868 and $868 at
December 31, 1997, 1998 and March 31
1999, respectively..................... 15,486 21,591 17,446
Advances to related parties............. 172 -- --
Prepaid insurance and other............. 1,793 3,383 2,604
Income tax receivable................... -- 151 151
Deferred tax asset...................... -- 481 624
------- -------- --------
Total current assets...................... 17,451 26,027 21,091

Property, plant and equipment, net........ 43,737 60,328 59,661
Goodwill, less accumulated amortization of
$226 and $334 at December 31, 1998 and
March 31, 1999, respectively............. -- 17,163 17,055
Other assets, net......................... 1,198 4,443 4,619
$62,386 $107,961 $102,426
======= ======== ========

LIABILITIES AND SHAREHOLDERS' EQUITY
(CAPITAL DEFICIENCY)
Current liabilities:
Accounts payable........................ $ 5,137 $ 6,069 $ 3,111
Accrued expenses........................ 6,207 2,770 1,853
Deferred income taxes................... 234 -- --
Notes payable........................... 4,328 6,445 1,505
Current portion of long-term debt....... 5,507 7,096 7,595
------- -------- --------
Total current liabilities................. 21,413 22,380 14,064
Deferred income taxes..................... 4,031 4,997 5,038
Long-term debt, less current portion...... 21,297 102,594 100,719
Senior subordinated note.................. 10,000 17,930 17,868
Shareholders' equity (capital deficiency):
Class B preferred stock, $0.10 par
value--22,500 shares authorized, 22,500
shares issued and outstanding at
December 31, 1997 and no shares issued
and outstanding at December 31, 1998
and March 31, 1999, respectively,
stated at par value plus additional
amount paid (liquidation preference
value) 250 -- --
Class C preferred stock, $0.10 par
value--25,000 shares authorized, 3,417,
20,252 and 23,124 shares issued and
outstanding at December 31, 1997, 1998
and March 31, 1999, respectively,
stated at par value -- 2 2
Class A common stock, $0.01 par value--
1,000,000 shares authorized, 55,000,
15,674 and 17,475 shares issued and
outstanding at December 31, 1997, 1998
and March 31, 1999, respectively 1 -- --
Class B common stock, $0.01 par value--
authorized 100,000; issued and
outstanding 1,000 shares -- -- --
Additional paid-in capital.............. 1,599 79,687 85,440
Retained earnings (deficit)............. 3,795 (119,629) (120,705)
------- -------- --------
Total shareholders' equity (capital
deficiency).............................. 5,645 (39,940) (35,263)
------- -------- --------
$62,386 $107,961 $102,426
======= ======== ========
</TABLE>

See accompanying notes.

F-18
<PAGE>

CARDINAL HOLDING CORP.

CONSOLIDATED STATEMENTS OF OPERATIONS

(In Thousands, Except Share Amounts)

<TABLE>
<CAPTION>
Three Months
Year ended December 31, ended March 31,
-------------------------- -----------------
1996 1997 1998 1998 1999
------- ------- -------- -------- -------
(Unaudited)
<S> <C> <C> <C> <C> <C>
Operating revenue.............. $48,128 $63,412 $ 82,223 $ 18,982 $18,978
Operating expenses:
Labor........................ 14,872 18,709 25,075 5,163 7,061
Maintenance.................. 4,557 4,451 4,626 975 1,207
Insurance.................... 2,681 2,503 3,746 697 734
Depreciation................. 3,509 4,207 6,118 1,195 1,810
Cost of goods sold........... 1,627 2,087 1,809 446 503
Other........................ 4,219 5,386 9,350 1,576 1,714
------- ------- -------- -------- -------
Total operating expenses....... 31,465 37,343 50,724 10,052 13,029
------- ------- -------- -------- -------
Gross profit................... 16,663 26,069 31,499 8,930 5,949

General and administrative
expenses...................... 8,317 10,842 15,729 4,142 3,297
Income from operations......... 8,346 15,227 15,770 4,788 2,652

Other income (expense):
Interest..................... (3,448) (5,464) (12,641) (2,698) (3,201)
Consulting fees paid to
related party............... (300) (1,150) -- --
Other, net................... 2 58 (777) (515) (2)
------- ------- -------- -------- -------
Income (loss) before income
taxes and extraordinary loss.. 4,600 8,671 2,352 1,575 (551)

Income taxes provision
(benefit)..................... 1,706 4,350 1,149 591 (98)
------- ------- -------- -------- -------
Income (loss) before
extraordinary loss............ 2,894 4,321 1,203 984 (453)
Extraordinary loss, net of $214
income tax benefit............ -- -- (10,885) (10,885) --
------- ------- -------- -------- -------
Net income (loss).............. $ 2,894 $ 4,321 $ (9,682) $ (9,901) $ (453)
======= ======= ======== ======== =======
Income (loss) per share of
common stock:
Basic:
Income (loss) before
extraordinary loss........ $ 50.61 $ 76.64 $ 21.09 $ 24.11 $(64.53)
Extraordinary loss......... -- -- (493.71) (266.72) --
------- ------- -------- -------- -------
Net income (loss).......... $ 50.61 $ 76.64 $(472.62) $(242.61) $(64.53)
======= ======= ======== ======== =======
Assuming dilution:
Income (loss) before
extraordinary loss........ $ 47.69 $ 72.23 $ 21.09 $ 20.25 $(64.53)
Extraordinary loss......... -- -- (493.71) (224.00) --
------- ------- -------- -------- -------
Net income (loss).......... $ 47.69 $ 72.23 $(472.62) $(203.75) $(64.53)
======= ======= ======== ======== =======
Average shares outstanding:
Basic...................... 56,000 56,000 22,047 40,811 16,674
======= ======= ======== ======== =======
Assuming dilution............ 59,420 59,420 22,047 48,595 16,674
======= ======= ======== ======== =======
</TABLE>

See accompanying notes.

F-19
<PAGE>

CARDINAL HOLDING CORP.

CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY (CAPITAL DEFICIENCY)

(In Thousands, except share data)

<TABLE>
<CAPTION>
Class B Class C
Preferred Preferred Class A Class B
Stock Stock Common Stock Common Stock Additional Retained
--------------- ------------- --------------- ------------- Paid-In Earnings
Shares Amount Shares Amount Shares Amount Shares Amount Capital (Deficit) Total
------- ------ ------ ------ ------- ------ ------ ------ ---------- --------- --------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Balances at December
31, 1995............... 22,500 $ 250 3,417 $-- 55,000 $ 1 1,000 $ $ 599 $ (487) $ 363
Capital contribution.. -- -- -- -- -- -- -- -- 1,000 -- 1,000
Cash dividends on
Class B preferred
stock, $2.66 per
share................. -- -- -- -- -- -- -- -- -- (60) (60)
Net income............ -- -- -- -- -- -- -- -- -- 2,894 2,894
------- ----- ------ --- ------- --- ----- --- ------- --------- --------
Balances at December
31, 1996............... 22,500 250 3,417 -- 55,000 1 1,000 -- 1,599 2,347 4,197
Cash dividends on
Class B preferred
stock, $1.33 per
share................. -- -- -- -- -- -- -- -- -- (30) (30)
Cash dividends on
Class A common stock,
$51.69 per share...... -- -- -- -- -- -- -- -- -- (2,843) (2,843)
Net income............ -- -- -- -- -- -- -- -- -- 4,321 4,321
------- ----- ------ --- ------- --- ----- --- ------- --------- --------
Balances at December
31, 1997............... 22,500 250 3,417 -- 55,000 1 1,000 -- 1,599 3,795 5,645
Recapitalization...... (22,500) (250) 10,250 1 (41,333) (1) -- -- 55,753 (113,004) (57,501)
Stock issued under
Subordinated debt
agreement -- -- 404 -- 403 -- -- -- 2,300 -- 2,300
Stock awarded to
management............ -- -- 137 -- 137 -- -- -- 800 -- 800
Stock issued for
cash.................. -- -- 5,484 1 1,213 -- -- -- 17,099 -- 17,100
Stock issued to
sellers of acquired
businesses............ -- -- 308 -- 254 -- -- -- 1,398 -- 1,398
Class C preferred
stock dividends (5%
per annum)............ -- -- 252 -- -- -- -- -- 738 (738) --
Net loss.............. -- -- -- -- -- -- -- -- -- (9,682) (9,682)
------- ----- ------ --- ------- --- ----- --- ------- --------- --------
Balances at December
31, 1998............... -- $ -- 20,252 $ 2 15,674 $-- 1,000 $-- $79,687 $(119,629) $(39,940)
Stock issued under
subordinated debt
agreement (unaudited)
Stock issued for cash
(unaudited)............ -- -- 2,312 1,747 -- -- 5,000 5,000
Class C preferred
stock dividends (5%
per annum)............ -- -- 506 -- -- -- -- -- 623 (623) --
Stock issued under
subordinated debt
agreement (unaudited).. -- -- 54 -- 54 -- -- -- 130 130
Net loss (unaudited)... -- -- -- -- -- -- -- -- -- (453) (453)
------- ----- ------ --- ------- --- ----- --- ------- --------- --------
Balances at March 31,
1999 (unaudited)....... -- $ -- 23,124 $ 2 17,475 $-- 1,000 $-- $85,440 $(120,705) $(35,263)
======= ===== ====== === ======= === ===== === ======= ========= ========
</TABLE>

See accompanying notes.

F-20
<PAGE>

CARDINAL HOLDING CORP.

CONSOLIDATED STATEMENTS OF CASH FLOWS

(In Thousands)

<TABLE>
<CAPTION>
Three Months
Year ended December 31, ended March 31,
---------------------------- ------------------
1996 1997 1998 1998 1999
------- -------- --------- --------- -------
(unaudited)
<S> <C> <C> <C> <C> <C>
Operating activities
Net income (loss)........... $ 2,894 $ 4,321 $ (9,682) $ (9,901) $ (453)
Adjustments to reconcile net
income (loss) to net cash
provided by operating
activities:
Extraordinary loss on
early extinguishment of
debt..................... -- -- 10,885 10,885 --
Loss (gain) on disposal of
assets................... 460 22 (732) -- --
Stock compensation awarded
to management............ -- -- 800 -- --
Deferred income taxes..... 890 1,930 (44) 50 (102)
Depreciation and
amortization............. 3,694 4,422 7,107 1,298 2,213
Changes in operating
assets and liabilities,
net of effects of
businesses acquired:
Accounts receivable...... (2,137) (6,187) (3,913) (3,606) 4,197
Prepaid expenses and
other current assets.... (365) 105 (1,261) (91) (160)
Accounts payable, accrued
expenses, accrued
interest and current
income taxes............ 2,008 4,655 434 (1,361) (3,391)
------- -------- --------- --------- -------
Net cash provided by
operating activities....... 7,444 9,268 3,594 (2,726) 2,304
Investing activities
Purchases of property, plant
and equipment.............. (3,346) (18,980) (19,039) (8,927) (1,144)
Proceeds from sales of
assets..................... -- -- 2,700 -- --
Intangible assets acquired.. -- (250) -- -- --
Businesses acquired, net of
cash acquired.............. -- -- (22,373) -- --
Advances to related
parties.................... (2,496) 2,658 -- -- --
------- -------- --------- --------- -------
Net cash used in investing
activities................. (5,842) (16,572) (38,712) (8,927) (1,144)

Financing activities
Net increase (decrease) in
short-term borrowings...... (1,168) 1,517 2,117 (1,782) (4,940)
Net increase (decrease) in
bank overdraft............. -- 1,370 (1,370) -- --
Proceeds from long-term
debt....................... 1,500 10,829 133,500 125,000 --
Principal payments on long-
term debt.................. (3,599) (3,722) (40,615) (36,804) (1,375)
Debt acquisition costs...... (26) -- (4,371) (3,940) --
Redemption of stock
warrants................... -- -- (13,320) (13,320) --
Proceeds from issuance of
common and preferred
stock...................... -- -- 74,353 57,254 5,000
Payments to redeem stock.... -- -- (114,755) (114,755) --
Capital contribution........ 1,000 -- -- -- --
Dividends paid.............. -- (2,843) -- -- --
------- -------- --------- --------- -------
Net cash provided by (used
in) financing activities... (2,293) 7,151 35,539 11,653 (1,315)
------- -------- --------- --------- -------
Change in cash and cash
equivalents................ (691) (153) 421 -- (155)
Cash and cash equivalents at
beginning of year.......... 844 153 -- -- 421
------- -------- --------- --------- -------
Cash and cash equivalents at
end of year................ $ 153 $ -- $ 421 $ -- $ 266
======= ======== ========= ========= =======
Supplemental cash flow
information
Interest paid on notes
payable, long-term debt and
subordinated note payable.. $ 3,177 $ 3,428 $ 10,329 $ 2,811 3,737
======= ======== ========= ========= =======
Income taxes paid........... $ 760 $ 1,559 $ 2,846 $ 1,612 $ --
======= ======== ========= ========= =======
Supplemental disclosure of
noncash investing and
financing activities
Stock issued to acquire
businesses................. $ -- $ -- $ 1,398 $ -- $ --
======= ======== ========= ========= =======
Long-term debt issued for
covenant not to compete.... $ -- $ 402 $ -- $ -- $ --
======= ======== ========= ========= =======
</TABLE>

See accompanying notes.

F-21
<PAGE>

CARDINAL HOLDING CORP.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

1. Significant Accounting Policies

Organization

Cardinal Holding Corp. (Cardinal), through its wholly owned subsidiary,
Cardinal Services, Inc. (CSI), is primarily engaged in offshore vessel rentals,
wireline services and plugging and abandonment services for the oil and gas
industry in the southern United States and the Gulf of Mexico. At December 31,
1998, Cardinal owned and operated 48 vessels which included 41 lift boats, 5
spud barges, and 2 supply vessels.

In December 1997, Cardinal acquired all of the common stock outstanding of
Cardinal Management Company (CMC) in exchange for 3,417 shares of Class C
preferred stock and 1,000 shares of Class B common stock of Cardinal. At the
effective date, CMC and Cardinal were under common control; therefore, the
consolidated financial statements have been restated to reflect the accounts of
Cardinal and CMC accounted for in a manner similar to a pooling-of-interests.
Significant intercompany accounts and transactions have been eliminated. In
February of 1998, CMC and CSI were combined into a single entity.

Unaudited Financial Statements

The accompanying unaudited consolidated financial statements as of March 31,
1999 and for the three months ended March 31, 1998 and 1999, have been prepared
in accordance with generally accepted accounting principles for interim
financial information and with the instructions to Article 10 of Regulation S-
X. Accordingly, they do not include all of the information and footnotes
required by generally accepted accounting principles for complete financial
statements. In the opinion of management, all adjustments (consisting only of
normal recurring accruals) considered necessary for a fair presentation have
been included. Operating results for the three months ended March 31, 1999 are
not necessarily indicative of the results that may be expected for the year
ending December 31, 1999.

Use of Estimates

The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates and
assumptions that affect the amounts reported in the financial statements and
accompanying notes. Actual results could differ from those estimates.

Cash and Cash Equivalents

Cash and cash equivalents include demand deposits with financial
institutions and short-term, highly liquid investments with maturities of three
months or less when purchased.

Concentration of Credit Risk

Cardinal performs periodic credit evaluations of its customers' financial
condition and generally does not require collateral. Credit losses have
historically been within management's expectations.

Cardinal's provision for doubtful accounts receivable was $569,000 and
$750,000 in the years ended December 31, 1997 and 1998, respectively. Write-
offs of uncollectible accounts receivable against the allowance for doubtful
accounts were $0 and $451,000 in the years ended December 31, 1997 and 1998,
respectively. Prior to 1997, Cardinal's experience was such that no provision
for doubtful accounts receivable was necessary.

F-22
<PAGE>

CARDINAL HOLDING CORP.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(Continued)

Revenue Recognition

Vessel and wireline revenue are earned and recognized on a daily basis.
Plugging and abandonment revenue is generally recognized based on the
percentage completed. Other operating revenue consists of goods and services
incidental to vessel, wireline and plugging and abandonment activities and is
recognized as the goods and services are provided.

Property, Plant and Equipment

Property, plant and equipment is stated at cost. Major improvements of
vessels and equipment are capitalized at cost and depreciated. Expenditures for
replacements, maintenance and repairs which do not improve or extend the lives
of the assets are expensed. Interest related to the construction of significant
assets is capitalized. Depreciation is computed using the straight-line method
over the estimated useful lives of the individual assets which are as follows:

<TABLE>
<S> <C>
Furniture and fixtures....................................... 3 years
Buildings.................................................... 15 years
Equipment.................................................... 3-7 years
Vessels...................................................... 5-15 years
</TABLE>

Income Taxes

Cardinal accounts for income taxes using the liability method. Under this
method, deferred income taxes reflect the net tax effects of temporary
differences between the carrying amounts of assets and liabilities for
financial reporting and the amounts used for income tax.

Goodwill

Goodwill is amortized over its expected period of benefit, which ranges from
15 to 30 years, based on the characteristics of each individual business
combination. The recoverability of goodwill is assessed periodically and takes
into account whether the goodwill should be completely or partially written off
or the amortization period accelerated. In evaluating the value and future
benefits of goodwill, the recoverability from operating income is measured.
Under this approach, the carrying value of goodwill would be reduced if it is
probable that management's best estimate of future operating income before
goodwill amortization will be less than the carrying amount of goodwill over
the remaining amortization period. Cardinal assesses long-lived assets for
impairment under FASB Statement No. 121, Accounting for Impairment of Long-
Lived Assets and for Long-Lived Assets to Be Disposed Of (FAS 121). Under those
rules, goodwill associated with assets acquired in a purchase business
combination is included in impairment evaluations when events or circumstances
exist that indicate the carrying amounts of those assets may not be
recoverable. In 1998, Cardinal recorded goodwill amortization of $226,000.

Other Assets

Other assets consisted of deferred debt acquisition costs and a covenant not
to compete. Deferred debt acquisition costs are amortized over the term of the
related debt which is seven years. The covenant not to compete is amortized
over the term of the noncompete agreement which is four years.

Financial Instruments

The carrying amounts reported in the balance sheet for cash and cash
equivalents and advances to related parties approximate their fair values.

F-23
<PAGE>

CARDINAL HOLDING CORP.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(Continued)

Cardinal had no outstanding warrants at December 31, 1998. The fair value of
Cardinal's outstanding warrants at December 31, 1997 was $13,320,000, which was
estimated based on the redemption price paid as part of the Recapitalization
and Refinancing (see Note 2).

The carrying values of Cardinal's long-term debt approximate their fair
values which are estimated using discounted cash flow analyses, based on
Cardinal's incremental borrowing rates for similar types of borrowing
arrangements.

2. Recapitalization and Refinancing

On February 26, 1998, Cardinal completed a recapitalization (the
Recapitalization) which included (i) the issuance of 10,250 shares of Class A
common stock for $30 million, (ii) the issuance of 10,250 shares of Class C
preferred stock for $30 million, (iii) the redemption of 51,583 shares of Class
A common stock and Class B preferred stock for $114.8 million, and (iv) the
redemption of warrants related to 11,870 shares of CSI nonvoting common stock
in exchange for $13.32 million. In addition, Cardinal refinanced substantially
all of its long-term debt. The Recapitalization and Refinancing was funded
through the issuance of $105 million of senior secured debt, $20 million of
subordinated debt which included $2 million accounted for as original issue
discount relating to the issuance of 350 shares of Class A common stock and 350
shares of Class C preferred stock, and $60 million of equity investments
discussed in (i) and (ii) above. In connection with the Recapitalization and
Refinancing, Cardinal (a) recorded an increase in equity of $57,501,000 million
as a result of the net proceeds from the equity issuances discussed in (i) and
(ii) above; (b) incurred $7,117,000 of costs, $4,371,000 of which were recorded
as debt acquisition costs and $2,746,000 of which were recorded as a reduction
of net proceeds from the issuance of stock; (c) recorded a reduction in equity
of $114,755,000 as a result of the stock redemption discussed in (iii) above;
and (d) recorded an extraordinary loss of $10,884,000 which included the
unamortized estimated value of the warrants discussed in (iv) above of
$10,505,000 (which was nondeductible for income tax purposes and therefore had
no income tax benefit) and unamortized debt acquisition costs of $379,000 (net
of $213,000 income tax benefit).

3. Acquisitions of Businesses and Vessels

During 1998, Cardinal completed acquisitions of 100% of the outstanding
common stock of the businesses shown below, which were primarily engaged in
providing services for the oil and gas industry in the southern United States
and the Gulf of Mexico. These businesses were acquired with a combination of
cash and stock as consideration. Each of these acquisitions was accounted for
using the purchase method. The excess cost over the fair value of net assets
acquired has been recorded as goodwill and is being amortized on a straight-
line basis over periods ranging from 15 to 30 years. The operations of the
acquired businesses are included in the consolidated statements of operations
from the date of acquisition.

<TABLE>
<CAPTION>
Shares Issued in Acquisition
------------------------------
Class
A- Class C-
Date Company Name Purchase Price Common Preferred Value
- ------------------------ ------------------------ -------------- ------ --------- -------------
(In Thousands) (In Thousands)
<S> <C> <C> <C> <C> <C>
May 1998................ Moores Wireline, Inc. $10,888 -- -- $ --
May 1998................ Moores Engineering, Inc. 4,846 69 69 398
September 1998.......... Gunn Wireline, Inc. 8,350 186 241 1,000
</TABLE>

F-24
<PAGE>

CARDINAL HOLDING CORP.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(Continued)

4. Details of Certain Balance Sheet Accounts

<TABLE>
<CAPTION>
December 31,
--------------- March 31,
1997 1998 1999
------- ------- -----------
(Unaudited)
<S> <C> <C> <C>
Property, plant and equipment:
Land........................................... $ 217 $ 313 $ 313
Furniture and fixtures......................... 501 1,703 1,772
Buildings...................................... 1,782 2,684 2,696
Equipment...................................... 12,800 21,485 22,547
Vessels........................................ 45,010 56,300 56,300
------- ------- -------
60,310 82,485 83,628
Less accumulated depreciation.................... 16,573 22,157 23,967
------- ------- -------
$43,737 $60,328 $59,661
======= ======= =======
Other assets:
Debt acquisition costs......................... $ 881 $ 4,566 $ 4,962
Covenant not to compete........................ 651 651 651
------- ------- -------
1,532 5,217 5,613
Less accumulated amortization.................... 334 774 994
------- ------- -------
$1,198 $ 4,443 $ 4,619
======= ======= =======
Accrued expenses:
Interest....................................... $ 2,648 $ 911 $ 375
Wages, bonuses and related taxes............... 2,299 1,493 1,004
Income taxes................................... 1,260 -- --
Other.......................................... -- 366 474
------- ------- -------
$6,207 $ 2,770 $ 1,853
======= ======= =======
</TABLE>

5. Notes Payable, Long-Term Debt and Subordinated Note Payable

In connection with the Recapitalization, Cardinal entered into a Credit
Agreement with certain lenders. Amounts due under the Credit Agreement are
collateralized by substantially all the assets of Cardinal. The Credit
Agreement contains certain covenants which restrict Cardinal's ability to pay
dividends and require Cardinal to maintain certain levels of stockholders'
equity (net capital deficiency) and debt service ratios. At December 31, 1998,
Cardinal was in compliance with all such covenants.

In addition to Term Loans A and B described below, the Credit Agreement
provides for up to $10 million of revolving credit advances, subject to an
accounts receivable borrowing base, bearing interest at floating rates and
maturing March 2004, and up to an additional $10 million of term loans (Term
C). At December 31, 1998, considering the borrowing base, there was $5,560,000
available under the revolver. Unused amounts under the revolving credit
commitment are subject to a floating availability fee ranging from .375% to
.50% of the unused balance. At December 31, 1998, no Term C loans were
outstanding. Effective March 31, 1999, the Term C loan facility was eliminated.

F-25
<PAGE>

CARDINAL HOLDING CORP.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(Continued)

Notes Payable

Notes payable consisted of the following (in thousands):

<TABLE>
<CAPTION>
December 31,
------------- March 31,
1997 1998 1999
------ ------ -----------
(Unaudited)
<S> <C> <C> <C>
Revolving credit note payable to GECC, interest
payable monthly at floating rates (8.09% per annum
at December 31, 1998).............................. $ -- $4,440 $ --
Notes payable to insurance finance company, interest
at 7.63%, due in monthly installments including
interest through December 31, 1998, unsecured and
cancelable upon termination of related insurance
policies........................................... 762 1,989 1,505
Revolving credit note payable to bank, paid in 1998
as part of the Refinancing......................... 3,566 -- --
Other............................................... -- 16 --
------ ------ ------
$4,328 $6,445 $1,505
====== ====== ======
</TABLE>

Long-Term Debt

Long-term debt consisted of the following (in thousands):

<TABLE>
<CAPTION>
December 31,
---------------- March 31,
1997 1998 1999
------- -------- -----------
(Unaudited)
<S> <C> <C> <C>
Term Loan A--interest payable monthly at floating
rate (8.0% per annum at December 31, 1998), due
in quarterly installments from June 1998 through
March 2004....................................... $ -- $ 51,250 $ 50,000
Term Loan B--interest payable monthly at floating
rate (8.25% per annum at February 28, 1998), due
in quarterly installments from June 1998 through
March 2005....................................... -- 58,126 58,000
Noninterest-bearing note payable for noncompete
agreements due in annual installments through
August 1, 2001................................... 402 314 314
Term loan note payable to Hibernia, paid in 1998
as part of the Refinancing....................... 13,813 -- --
Revolving construction credit convertible to term
loan note payable to Hibernia, paid in 1998 as
part of the Refinancing.......................... 10,829 -- --
Term loan note payable to New Iberia Bank, paid in
1998 as part of the Refinancing.................. 1,310 -- --
Term loan note payable for the acquisition of
vessels, paid in 1998 as part of the
Refinancing...................................... 450 -- --
------- -------- --------
26,804 109,690 108,314
Less current portion.............................. 5,507 7,096 7,595
------- -------- --------
$21,297 $102,594 $100,719
======= ======== ========
</TABLE>

F-26
<PAGE>

CARDINAL HOLDING CORP.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(Continued)

Future minimum principal payments on long-term debt for each of the next
five years ending December 31 are as follows (in thousands):

Senior Subordinated Notes

In connection with the Recapitalization, Cardinal borrowed $20 million under
the terms of a Senior Subordinated Notes Agreement. The Senior Subordinated
Notes bear interest at a rate of 11% and are due February 2006.

In connection with the Senior Subordinated Notes Agreement, Cardinal issued
350 shares of Class A common stock and 350 shares of Class C preferred stock to
certain parties to that agreement. The value of these shares at issuance was
approximately $2 million, which was recorded as a discount to the Senior
Subordinated Notes and an increase to the respective common stock, preferred
stock and additional paid-in capital accounts. The debt discount will be
amortized to interest expense over the term of the Senior Subordinated Notes.
Additionally, at six-month intervals beginning in August 1998, through February
2000, as long as there are amounts due under the Senior Subordinated Notes
Agreement, the Senior Subordinated Notes Agreement requires Cardinal to issue
54 shares of Class A common stock and 53 shares of Class C preferred stock to
certain parties to that agreement. These additional shares will be accounted
for in the same manner as the shares issued at the time of the
Recapitalization.

The Senior Subordinated Notes contain certain covenants which restrict
Cardinal's ability to pay dividends and require Cardinal to maintain certain
levels of stockholders' equity (net capital deficiency) and debt service
ratios. At December 31, 1998, Cardinal was in compliance with all such
covenants.

6. Capital Stock and Income (Loss) Per Share

At December 31, 1998, 50,000 shares of $0.10 par value Class A preferred
stock were authorized and unissued.

The Class C preferred stock is convertible at the option of the shareholder
into Class A common stock on the basis of one share of Class A common stock for
each full share of Class C preferred stock subject to adjustments for stock
dividends, stock splits and other potential transactions. The Class C preferred
stock is automatically convertible on the same basis described above at the
earlier of the date of an initial public offering or January 16, 2003.
Dividends on the Class C preferred stock are cumulative and payable
semiannually at a rate of 5% per annum on the liquidation preference value
($2,926.83 per share) in cash or equivalent shares of Class C preferred stock.
The holders of Class C preferred stock are entitled to vote together with the
common stock on any matter with respect to which the common stock is entitled
to vote. Each share of Class C preferred stock is entitled to a number of votes
equal to the number of common shares into which the Class C preferred stock is
convertible. On April 20, 1999, the Board of Directors voted to increase the
number of authorized Class C preferred stock from 25,000 to 75,000 (unaudited).

Dividends on common stock shall not be paid so long as there exists any
dividends or redemption payments in arrears related to any preferred stock and
without the consent of certain of Cardinal's lenders.

F-27
<PAGE>

CARDINAL HOLDING CORP.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(Continued)

The Class B common stock is convertible at the option of the shareholder to
Class A common stock at the earlier of the effective date of an initial public
offering or the consummation date of a merger, consolidation, or sale of
securities or assets of Cardinal or CSI. The number of shares of Class A common
stock received upon conversion shall be calculated by dividing the Class B
conversion value ($10,000 per share) by the price per share paid for the Class
A common stock as a result of the transaction.

In 1998, pursuant to a stock awards plan adopted by the board of directors
of Cardinal, 137 shares of Class A common stock and 137 shares of Class C
preferred stock were awarded to certain members of management. The stock vested
immediately, although it will not be delivered to the employees until such time
as there is an initial public offering or the sale of Cardinal. Compensation
expense was recorded for fair value of these awards, as estimated based on
sales of similar stock.

In accordance with FAS 128, Cardinal has presented basic earnings per share,
computed on the basis of the weighted average number of shares outstanding
during the period, and diluted earnings per share, computed on the basis of the
weighted average number of shares and all dilutive potential shares outstanding
during the year. A reconciliation between basic and diluted weighted average
number of shares outstanding is presented below (in thousands, except share
data):

<TABLE>
<CAPTION>
Year ended December Three months
31, ended March 31,
------------------------ -----------------
1996 1997 1998 1998 1999
------ ------ -------- -------- -------
(Unaudited)
<S> <C> <C> <C> <C> <C>
Numerator:
Net income before extraordinary
loss........................... $2,894 $4,321 $ 1,203 $ 984 $ (453)
Dividends on preferred stock.... (60) (30) (738) -- (623)
------ ------ -------- -------- -------
Numerator for basic and diluted
earnings per share before
extraordinary loss -income
available to common
stockholders................... 2,834 4,291 465 984 (1,076)
Extraordinary loss.............. -- -- (10,885) (10,885) --
------ ------ -------- -------- -------
Numerator for basic and diluted
earnings per share............. $2,834 $4,291 $(10,420) $ (9,901) $(1,076)
====== ====== ======== ======== =======
Denominator:
Weighted average shares
outstanding.................... 56,000 56,000 22,047 40,811 16,674
Adjustment for Convertible Class
C Preferred Stock.............. 3,420 3,420 15,809 7,784 --
------ ------ -------- -------- -------
Denominator for diluted earnings
per share--adjusted weighted
average shares and assumed
conversions.................... 59,420 59,420 37,856 48,595 16,674
====== ====== ======== ======== =======
</TABLE>

F-28
<PAGE>

CARDINAL HOLDING CORP.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(Continued)

7. Income Taxes

Significant components of the provisions for income taxes before the income
tax effect of the extraordinary loss were as follows (in thousands):

<TABLE>
<CAPTION>
December 31,
--------------------
1996 1997 1998
------ ------ ------
<S> <C> <C> <C>
Current............................................. $ 816 $2,420 $1,193
Deferred (benefit).................................. 890 1,930 (44)
------ ------ ------
$1,706 $4,350 $1,149
====== ====== ======
</TABLE>

Significant components of Cardinal's deferred tax liabilities and assets
were as follows (in thousands):

<TABLE>
<CAPTION>
December 31,
-------------
1997 1998
------ ------
<S> <C> <C>
Deferred tax liabilities:
Basis of property, plant and equipment.................. $6,888 $5,795
Prepaid expenses........................................ 368 360
------ ------
Total deferred tax liabilities............................ 7,256 6,155
Deferred tax assets:
Alternative minimum tax credit and net operating loss
carryforwards 2,857 776
Allowances and accrued expenses......................... 134 863
------ ------
Total deferred tax assets................................. 2,991 1,639
------ ------
Net deferred tax liabilities.............................. $4,265 $4,516
====== ======
</TABLE>

At December 31, 1998, Cardinal had net operating loss carryforwards of
approximately $250,000 which expire in 2014, and alternative minimum tax
credit carryforwards of approximately $690,000, which have no expiration date.

The reconciliation of income tax computed at the federal statutory rates to
income tax expense, before the income tax effect of the extraordinary loss,
was (in thousands):

<TABLE>
<CAPTION>
Year ended December
31,
--------------------
1996 1997 1998
------ ------ ------
<S> <C> <C> <C>
Tax, at statutory rate.............................. $1,564 $2,949 $ 800
Nondeductible interest related to warrants.......... 95 739 130
Deferred tax liabilities of CMC..................... -- 320 --
Other, primarily state income taxes................. 47 342 219
------ ------ ------
$1,706 $4,350 $1,149
====== ====== ======
</TABLE>

CMC (see Note 1) was an S corporation for income tax purposes prior to
Cardinal acquiring all of its common stock. All taxes were, therefore, the
responsibility of its shareholder and no income tax provision was recorded.
CMC's S corporation election was terminated when it was acquired by Cardinal.
As of that date, a deferred income tax liability was recognized in the amount
of approximately $320,000 for the basis differences between tax and book which
existed at that date.

F-29
<PAGE>

CARDINAL HOLDING CORP.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(Continued)

8. Sales to Major Customers

Cardinal's customer base is primarily concentrated in the oil and gas
industry. Cardinal is not dependent on any one customer. Sales to a single
customer comprising 10% or more of Cardinal's total revenue were $6,686,000 and
$7,079,000 in 1996 and 1997, respectively. No single customer represented 10%
of Cardinal's total revenue in 1998.

9. Profit-Sharing Plan

Cardinal maintains a defined contribution profit-sharing plan for all
employees who have satisfied minimum service and age requirements. Employees
may contribute up to 15% of their earnings to the plan. Cardinal matches
employee contributions up to 5% of an employee's salary. Additionally, Cardinal
may, at the discretion of the board of directors, make an additional profit-
sharing contribution each year. Cardinal made contributions of $60,000,
$208,000 and $298,000, in 1996, 1997 and 1998, respectively.

10. Leases and Related Party Transactions

Cardinal leases vehicles and facilities for its branches and corporate
office under noncancelable operating leases that expire in various years
through 1999 but which have options to extend for various terms. Rental expense
under such operating leases was approximately $131,000 in 1996, $948,000 in
1997 and $749,000 in 1998,. Included in lease expense for 1997 are payments of
$600,000 for lease of an airplane from a related party, wholly owned by a
shareholder, which is leased on a month-to-month basis. The lease was canceled
and there were no such costs in 1998.

Cardinal also paid consulting fees to a related party, wholly owned by a
shareholder, totaling $300,000 and $1,150,000 in 1996 and 1997, respectively.
No such fees were paid in 1998.

11. Commitments and Contingencies

In the normal course of business, Cardinal becomes involved as a defendant
or plaintiff in various lawsuits. Management is of the opinion that it
maintains insurance at levels generally consistent with industry standards to
insure itself against the normal risks of operations and these claims and legal
proceedings will be settled within Cardinal's insurance coverages.

F-30
<PAGE>

APPENDIX A

- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------

AGREEMENT AND PLAN OF MERGER

Among

SUPERIOR ENERGY SERVICES, INC.,

SUPERIOR CARDINAL ACQUISITION COMPANY, INC.,

CARDINAL HOLDING CORP.,

FIRST RESERVE FUND VII, LIMITED PARTNERSHIP, and

FIRST RESERVE FUND VIII, LIMITED PARTNERSHIP

Dated as of April 20, 1999

- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------

A-1
<PAGE>

TABLE OF CONTENTS

<TABLE>
<S> <C>
ARTICLE 1
DEFINED TERMS........................................................... A-5
Section 1.1 Definitions................................................. A-5

ARTICLE 2
THE CLOSING; THE MERGER; EFFECTS OF THE MERGER.......................... A-10
Section 2.1 Closing..................................................... A-10
Section 2.2 The Merger.................................................. A-10
Section 2.3 Effects of the Merger; Certificate of Incorporation;
Directors and Officers................................................. A-10

ARTICLE 3
MERGER CONSIDERATION; CONVERSION OF SHARES.............................. A-11
Section 3.1 Conversion of Shares........................................ A-11
Section 3.2 Exchange of Stock Certificates; Record Date................. A-11
Section 3.3 No Further Rights in Cardinal Common Stock.................. A-12

ARTICLE 4
REPRESENTATIONS AND WARRANTIES OF CARDINAL.............................. A-12
Section 4.1 Organization; Qualification................................. A-12
Section 4.2 Capital Stock; Subsidiaries................................. A-12
Section 4.3 Corporate Authorization; Enforceability..................... A-13
Section 4.4 No Conflict................................................. A-13
Section 4.5 Consents.................................................... A-14
Section 4.6 Cardinal Financial Statements; Undisclosed Liabilities...... A-14
Section 4.7 Accounts Receivable......................................... A-14
Section 4.8 Absence of Certain Changes.................................. A-14
Section 4.9 Material Contracts.......................................... A-14
Section 4.10 Vessels.................................................... A-15
Section 4.11 Real Property.............................................. A-15
Section 4.12 Real Property Leases....................................... A-15
Section 4.13 Personal Property.......................................... A-16
Section 4.14 Compliance with Laws....................................... A-16
Section 4.15 Permits.................................................... A-16
Section 4.16 Litigation................................................. A-16
Section 4.17 Environmental Compliance................................... A-17
Section 4.18 ERISA and Related Matters.................................. A-17
Section 4.19 Taxes...................................................... A-19
Section 4.20 Customers and Suppliers.................................... A-21
Section 4.21 Insurance.................................................. A-21
Section 4.22 Safety and Health.......................................... A-21
Section 4.23 Labor Matters.............................................. A-22
Section 4.24 Transactions with Certain Persons.......................... A-22
Section 4.25 Propriety of Past Payments................................. A-22
Section 4.26 Intellectual Property...................................... A-22
Section 4.27 Director and Officer Indemnification....................... A-23
Section 4.28 Brokers' and Finders' Fee.................................. A-23
</TABLE>

A-2
<PAGE>

<TABLE>
<S> <C>
ARTICLE 5
REPRESENTATIONS AND WARRANTIES OF SESI.................................. A-23
Section 5.1 Organization; Qualification................................. A-23
Section 5.2 Capital Stock; Subsidiaries................................. A-23
Section 5.3 Corporate Authorization; Enforceability..................... A-24
Section 5.4 No Conflict................................................. A-24
Section 5.5 Consents.................................................... A-25
Section 5.6 SESI Financial Statements; Undisclosed Liabilities.......... A-25
Section 5.7 Accounts Receivable......................................... A-25
Section 5.8 Absence of Certain Changes.................................. A-25
Section 5.9 Material Contracts.......................................... A-26
Section 5.10 Citizenship................................................ A-26
Section 5.11 Real Property.............................................. A-26
Section 5.12 Real Property Leases....................................... A-26
Section 5.13 Personal Property.......................................... A-27
Section 5.14 Compliance with Laws....................................... A-27
Section 5.15 Permits.................................................... A-27
Section 5.16 Litigation................................................. A-27
Section 5.17 Environmental Compliance................................... A-27
Section 5.18 ERISA and Related Matters.................................. A-28
Section 5.19 Taxes...................................................... A-30
Section 5.20 Customers and Suppliers.................................... A-31
Section 5.21 Insurance.................................................. A-31
Section 5.22 Safety and Health.......................................... A-32
Section 5.23 Labor Matters.............................................. A-32
Section 5.24 Transactions with Certain Persons.......................... A-32
Section 5.25 Propriety of Past Payments................................. A-32
Section 5.26 Intellectual Property...................................... A-32
Section 5.27 Director and Officer Indemnification....................... A-33
Section 5.28 Brokers' and Finders' Fee.................................. A-33
Section 5.29 Commission Filings: Financial Statements................... A-33

ARTICLE 6
COVENANTS............................................................... A-34
Section 6.1 Legal Requirements.......................................... A-34
Section 6.2 Stockholder Approvals....................................... A-34
Section 6.3 Proxy Statement............................................. A-35
Section 6.4 Equity Contribution to Cardinal............................. A-35
Section 6.5 Financing................................................... A-36
Section 6.6 Repayment of Certain Indebtedness........................... A-36
Section 6.7 Hart-Scott-Rodino........................................... A-36
Section 6.8 Access to Properties and Records............................ A-36
Section 6.9 Consultation and Reporting.................................. A-36
Section 6.10 Conduct of Business By Both Parties Prior to the Closing
Date................................................................... A-37
Section 6.11 Public Statements.......................................... A-38
Section 6.12 No Solicitation............................................ A-38
Section 6.13 Restriction on Funds....................................... A-39
Section 6.14 Update Information......................................... A-39
Section 6.15 Maintenance of Policies.................................... A-40
Section 6.16 Director's and Officer's Indemnification and Insurance..... A-40
Section 6.17 Nasdaq Filing.............................................. A-40
Section 6.18 SESI Employee Benefits..................................... A-40
</TABLE>

A-3
<PAGE>

<TABLE>
<S> <C>
ARTICLE 7
CLOSING CONDITIONS....................................................... A-40
Section 7.1 Conditions Applicable to all Parties......................... A-40
Section 7.2 Conditions to Obligations of SESI............................ A-41
Section 7.3 Conditions to Obligations of Cardinal........................ A-41

ARTICLE 8
TERMINATION AND AMENDMENT................................................ A-42
Section 8.1 Termination.................................................. A-42
Section 8.2 Effect of Termination........................................ A-43

ARTICLE 9
MISCELLANEOUS............................................................ A-44
Section 9.1 Notices...................................................... A-44
Section 9.3 Headings; Gender............................................. A-44
Section 9.4 Entire Agreement; No Third Party Beneficiaries............... A-44
Section 9.5 Governing Law................................................ A-44
Section 9.6 Assignment................................................... A-44
Section 9.7 Severability................................................. A-44
Section 9.8 Counterparts................................................. A-44
Section 9.9 Amendment.................................................... A-44
Section 9.10 Extension; Waiver........................................... A-44
Section 9.11 Expenses.................................................... A-45
</TABLE>

Exhibits
<TABLE>
<S> <C>
A -Cardinal Disclosure Schedules........................................ A-46
B -Superior Disclosure Schedules........................................ A-47
C -Registration Rights Agreement--The Funds............................. A-48
D -Registration Rights Agreement--Other Cardinal Stockholders........... A-57
E -Stockholders' Agreement.............................................. A-67
F -Agreement and Release................................................ A-75
G -Superior Stock Incentive Plan........................................ A-78
H -Form of Opinion of Gardere Wynne Sewell & Riggs, L.L.P............... A-79
I -Form of Opinion of Jones, Walker, Waechter, Poitevent, Carrere &
Denegre, LLP........................................................... A-80
</TABLE>

A-4
<PAGE>

AGREEMENT AND PLAN OF MERGER

This Agreement and Plan of Merger, dated as of April 20, 1999 is by and among
Superior Energy Services, Inc., a Delaware corporation ("SESI"), Superior
Cardinal Acquisition Company, Inc., a Delaware corporation and a wholly-owned
subsidiary of SESI ("Sub"), Cardinal Holding Corp., a Delaware corporation
("Cardinal"), and First Reserve Fund VII, Limited Partnership and First Reserve
Fund VIII, Limited Partnership, each of which is a Delaware limited partnership
(together, the "Funds").

W I T N E S S E T H:

WHEREAS, the Board of Directors of Cardinal and the Board of Directors of
SESI have determined it to be desirable and mutually advantageous to enter into
a business combination to be effected by a merger of Sub with and into Cardinal
as a result of which the separate existence of Sub shall cease and Cardinal
shall be the surviving corporation, on the terms and subject to the conditions
set forth herein (the "Merger"); and

WHEREAS, the parties hereto intend that, for federal income tax purposes,
the Merger will constitute a reorganization within the meaning of Sections
368(a)(1)(A) and 368(a)(2)(E) of the Internal Revenue Code of 1986, as amended,
and that this Agreement constitutes a plan of reorganization.

NOW, THEREFORE, in consideration of the representations, warranties,
covenants and agreements herein contained, the parties hereto agree as follows:

ARTICLE I

DEFINED TERMS

Section 1.1 Definitions. In addition to the other defined terms used herein,
as used in this Agreement, the following terms when capitalized have the
meanings indicated.

"Affiliate" shall have the meaning ascribed by Rule 12b-2 promulgated under
the Exchange Act.

"Agreement" shall mean this Agreement and Plan of Merger, including the
Exhibits hereto, all as amended or otherwise modified from time to time.

"Agreement and Release" shall mean the Agreement and Release to be executed
by the Cardinal Stockholders substantially in the form attached hereto as
Exhibit F.

"Applicable Law" shall mean any statute, law, rule or regulation or any
judgement, order, writ, injunction or decree of any Governmental Entity to
which a specified Person or its property is subject.

"Business Day" shall mean a day other than a Saturday, a Sunday or a day on
which national banks in New York are closed.

"Cardinal Annual Financial Statements" shall mean the audited consolidated
balance sheet and related audited consolidated statements of income,
stockholders equity and cash flows, and the related notes thereto of Cardinal
and its Subsidiaries as of and for the fiscal years ended December 31, 1997 and
1998.

"Cardinal Benefit Program or Agreement" shall have the meaning ascribed to
it in Section 4.18(a) hereof.

"Cardinal Common Stock" shall mean any shares of the authorized common stock
of Cardinal that are issued and outstanding, at the time hereof or at the
Effective Time, including without limitation the common stock, $.01 par value
per share, denominated as either Class A or Class B Common Stock.

A-5
<PAGE>

"Cardinal Disclosure Schedules" shall mean the disclosure schedules and
other documents attached to such schedules prepared by Cardinal in connection
with this Agreement and attached hereto as Exhibit A.

"Cardinal Financial Statements" shall mean the Cardinal Annual Financial
Statements and the Cardinal Interim Financial Statements, collectively.

"Cardinal Interim Financial Statements" shall mean the unaudited
consolidated balance sheet and the related unaudited consolidated statements
of income and cash flows of Cardinal and its Subsidiaries as of and for the
two-month period ended February 28, 1999.

"Cardinal Leased Properties" shall have the meaning ascribed to it in
Section 4.12(a) hereof.

"Cardinal Owned Properties" shall have the meaning ascribed to it in
Section 4.11(a) hereof.

"Cardinal Policies" shall have the meaning ascribed to it in Section
4.21(a) hereof.

"Cardinal Preferred Stock" shall mean any shares of the authorized
preferred stock of Cardinal that are at the time hereof, or become prior to
the Closing, issued and outstanding, including without limitation the Cardinal
Class C preferred stock, $.10 par value per share.

"Cardinal Services" shall mean Cardinal Services, Inc., a Louisiana
corporation.

"Cardinal Stockholders" shall mean the Funds and the other holders of
Cardinal Common Stock and Cardinal Preferred Stock listed on Section 3.1 of
the Cardinal Disclosure Schedules, as it may be amended at Closing in
accordance with Sections 6.4, 6.13 and 7.1(l) hereof.

"Certificate of Merger" shall have the meaning ascribed to it in Section
2.1(b) hereof.

"Charter Amendment" shall have the meaning ascribed to it in Section 6.2(a)
hereof.

"Class A Group Shares" shall mean (i) the shares of Cardinal Class A Common
Stock issued and outstanding at the Effective Time and the Management Common
Shares, and (ii) the shares of Cardinal Class C Preferred Stock, if any,
issued and outstanding at the Effective Time and the Management Preferred
Shares (each share of which for purposes of Article 3 shall be deemed to be
equivalent to a like number of shares of Cardinal Class A Common Stock.

"Class A Group Exchange Ratio" shall mean the quotient, rounded to four
decimal places, of (a) (X) the number of Merger Shares less (Y) the number of
shares of SESI Common Stock into which shares of Cardinal Class B Common Stock
are convertible pursuant to Section 3.1, divided by (b) the number of Class A
Group Shares issued and outstanding at the Effective Time.

"Closing" shall have the meaning ascribed to it in Section 2.1(a) hereof.

"Closing Date" shall have the meaning ascribed to it in Section 2.1(a)
hereof.

"Code" shall mean the Internal Revenue Code of 1986, as amended. All
citations to the Code shall include any amendments or any substitute or
successor provisions thereto.
"DGCL" shall mean the Delaware General Corporation Law.

"Effective Date" and "Effective Time" shall have the meanings ascribed to
them in Section 2.1(b) hereof.

"Employee Plan" shall mean a plan or arrangement as defined in Section 3(3)
of ERISA, that (A) is subject to any provision of ERISA, (B) is maintained,
administered or contributed to by the employer and (C) covers any employee or
former employee of the employer.

"Environmental Laws" shall mean all Applicable Laws relating to pollution
or the protection of the environment.

A-6
<PAGE>

"Equity Contribution" shall have the meaning ascribed to it in Section
6.4(a) hereof.

"ERISA" shall mean the Employee Retirement Income Security Act of 1974, as
amended, and the rules and regulations promulgated thereunder.

"Exchange Act" shall mean the Securities Exchange Act of 1934, as amended.

"Extended Coverage Policy" shall have the meaning ascribed to it in Section
6.16(b) hereof.

"Financing" shall have the meaning ascribed to it in Section 6.5(a) hereof.

"GAAP" means generally accepted accounting principles.

"Governmental Entity" shall mean any court or tribunal in any jurisdiction
or any public, governmental or regulatory body, agency, department, commission,
board, bureau or other authority or instrumentality.

"HSR Act" shall mean the Hart-Scott-Rodino Antitrust Improvements Act of
1976, as amended.

"HSR Form" shall mean the notification and report form required to be filed
under the HSR Act.

"Knowledge" of any Person means the actual knowledge of such Person's
executive and financial officers in each case after reasonable inquiry of such
other officers of such Person with direct responsibility for the Person's
business relating to such knowledge.

"Leases" shall mean any executory lease having future rental payments of
more than $200,000 in the aggregate.

"Liens" shall mean pledges, liens, defects, leases, licenses, conditional
sales contracts, charges, claims, encumbrances, security interests, easements,
restrictions, chattel mortgages, mortgages or deeds of trust, of any kind or
nature whatsoever.

"Management Common Shares" shall mean shares of Cardinal Class A Common
Stock that certain management personnel of Cardinal and Cardinal Services have
the right to acquire pursuant to the Cardinal Holding Corp. Stock Plan, as more
fully described in Section 3.1 of the Cardinal Disclosure Schedules.

"Management Preferred Shares" shall mean shares of Cardinal Class C
Preferred Stock that certain management personnel of Cardinal and Cardinal
Services have the right to acquire pursuant to the Cardinal Holding Corp. Stock
Plan, as more fully described in Section 3.1 of the Cardinal Disclosure
Schedules.

"March Contribution" shall have the meaning ascribed to it in Section 6.4(a)
hereof.

"Material Adverse Effect" shall mean, with respect to a Person, any fact,
circumstance, event or condition that has or would have a material adverse
effect on the business, operations, assets, or financial condition of such
Person and its Subsidiaries, taken as a whole, or on such Person's ability to
carry out the transactions contemplated hereby, except for changes affecting
the United States economy or the energy services industry generally.

"Material Contract" shall mean any executory contract, agreement or other
understanding, whether or not reduced to writing, to which a party hereto or
its property is subject, which provides for future payments by such party of
more than $200,000 in the aggregate.

"Merger Shares" shall mean a number of shares of SESI Common Stock equal to
51% of the SESI Common Stock outstanding immediately after the Effective Time
(including without limitation giving effect to the issuance of shares of SESI
Common Stock pursuant to the Merger) calculated based on the number of shares
of SESI Common Stock used by SESI in calculating its fully diluted earnings per
share in accordance with GAAP for the quarter ended June 30, 1999.

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"Multiemployer Plan" shall mean a plan or arrangement as defined in Section
4001(a)(3) and 3(37) of ERISA.

"NASD" shall mean the National Association of Securities Dealers, Inc.

"Nasdaq" shall mean The Nasdaq Stock Market, Inc.

"Permitted Liens"shall mean (a) Liens other than for borrowed money that do
not materially reduce the value or materially interfere with the present use by
the applicable Person of the property subject thereto or affected thereby, (b)
Liens for taxes, assessments or similar governmental charges, which in each
case constitute a Lien not yet due and payable or which are being contested in
good faith and by appropriate proceedings if adequate reserves with respect
thereto are maintained by the applicable party on their books in accordance
with GAAP, and (c) mechanic's, workmen's, landlord's, operator's,
materialmen's, maritime or other similar Liens with respect to amounts not yet
due and payable or which are being contested in good faith by appropriate
proceedings with adequate reserves with respect thereto maintained on the
applicable Person's books in accordance with GAAP.

"Person" shall mean an individual, firm, corporation, general or limited
partnership, limited liability company, limited liability partnership, joint
venture, trust, governmental authority or body, association, unincorporated
organization or other entity.

"Personal Property" shall mean all machinery, equipment, furniture, fixtures
and other corporeal or incorporeal (tangible or intangible) personal property
used by Cardinal Services or SESI, as the case may be, to carry on its business
as presently conducted.

"Pre-Closing Periods" shall mean all Tax periods ending on or before the
Closing Date and, with respect to any Tax period that includes but does not end
on the Closing Date, the portion of such period that ends on and includes the
Closing Date.

"Proceedings" shall mean any suit, action, proceeding, dispute or claim
before or investigation by any Governmental Entity.

"Proxy Statement" shall have the meaning ascribed to it in Section 6.3
hereof.

"Registration Rights Agreements" shall mean (a) the Registration Rights
Agreement to be executed between SESI and the Funds in the form attached hereto
as Exhibit C, and the Registration Rights Agreement to be executed between SESI
and certain other stockholders of Cardinal in the form attached hereto as
Exhibit D.

"Returns" shall mean all returns, declarations, reports, estimates,
declarations and statements of any nature required to be filed in respect of
Taxes for any Pre-Closing Period, and any claims for refund of Taxes, including
any amendments or supplements to any of the foregoing. The term "Return" means
any of the foregoing Returns.

"Sale Transaction" shall mean with respect to SESI, Cardinal and Cardinal
Services (for purposes of this definition, each an "issuer") (a) the
acquisition (by direct issuance from the issuer, from existing security holders
or otherwise), by any Person or group of Persons deemed a "person" under
Section 13(a)(3) of the Exchange Act, of beneficial ownership of securities
representing a majority of the combined voting power of the outstanding capital
stock of the applicable issuer, generally or as a separate class or series or
together with one or more class or series of shares or stock, in the election
of directors of such issuer, the result of which would give such Person or
Persons (or group) the ability to elect a majority of the Board of Directors of
such issuer, (b) a reorganization, recapitalization, merger, consolidation or
similar business combination or transaction involving the applicable issuer
(unless the holders of the outstanding securities of such issuer entitled to
vote in the election of directors prior to such transaction continue to own
securities of the entity

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resulting from or surviving such transaction (a "Surviving Entity") entitled
to vote in the election of directors sufficient to allow such holders to elect
a majority of the board of directors of the Surviving Entity upon the
completion of such transaction) or (c) a sale or other disposition (in a
single transaction or a series of related transactions) of assets with an
asset value in excess of 25% of the market value of the assets of the
applicable issuer and its Subsidiaries as a whole; provided, however, such
term shall not include the Equity Contribution or the transactions
contemplated by this Agreement, the Registration Rights Agreements or the
Stockholders' Agreement.

"SEC" shall mean the Securities and Exchange Commission.

"Securities Act" shall mean the Securities Act of 1933, as amended.

"SESI Annual Financial Statements" shall mean the audited consolidated
balance sheet and related audited consolidated statements of income,
stockholders' equity and cash flows, and the related notes thereto of SESI and
its Subsidiaries as of and for the fiscal years ended December 31, 1997 and
1998.

"SESI Annual Meeting" shall have the meaning ascribed to it in Section
6.2(a) hereof.

"SESI Benefit Program or Agreement" shall have the meaning ascribed to it
in Section 5.18(a) hereof.

"SESI Commission Filings" shall have the meaning ascribed to it in Section
5.29 hereof.

"SESI Common Stock" shall mean the shares of common stock, $.001 par value
per share, of SESI.

"SESI Financial Statements" shall mean the SESI Annual Financial Statements
and the SESI Interim Financial Statements, collectively.

"SESI Interim Financial Statements" shall mean the unaudited consolidated
balance sheet and the related unaudited consolidated statements of income and
cash flows of SESI and its Subsidiaries as of and for the two-month period
ended February 28, 1999.

"SESI Leased Properties" shall have the meaning ascribed to it in Section
5.12(a) hereof.

"SESI Owned Properties" shall have the meaning ascribed to it in Section
5.11 hereof.

"SESI Policies" shall have the meaning ascribed to it in Section 5.21(a)
hereof.

"SESI Stock Incentive Plan" means the 1999 Stock Incentive Plan to be
adopted by SESI following the SESI Annual Meeting in the form attached hereto
as Exhibit G.

"Settlement Agreement" shall mean that certain Settlement Agreement
executed effective as of March 16, 1999 by and among Cardinal Holding Corp.,
the Funds and the other Persons specified therein.

"Stockholders' Agreement" shall mean the Stockholders' Agreement to be
executed by and among SESI and the Funds in the form attached hereto as
Exhibit E.

"Subsidiary" means, with respect to a Person, any corporation, partnership,
joint venture or other legal entity that is consolidated with the Person in
the Person's financial statements prepared using GAAP.

"Superior Disclosure Schedules" shall mean the disclosure schedules and
other documents attached to such schedules prepared by SESI in connection with
this Agreement and attached hereto as Exhibit B.

"Surviving Corporation" shall have the meaning ascribed to it in Section
2.2 hereof.

"Taxes" shall mean any federal, state, local, foreign or other taxes
(including, without limitation, income, corporation, alternative minimum,
gross receipts, profits, capital stock, franchise, property, sales, use,
lease,

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excise, premium, payroll, wage, employment or withholding taxes, estimated or
other similar tax), fees, duties, assessments, withholdings or governmental
charges of any kind whatsoever in the nature of or in lieu of any tax
(including interest, penalties and additions to tax) and any liability in
respect of any tax as a result of being a member of any affiliated,
consolidated, combined, unitary or similar group.

"Vessels" shall have the meaning ascribed to it in Section 4.10 hereof.

ARTICLE 2

THE CLOSING; THE MERGER; EFFECTS OF THE MERGER

Section 2.1 Closing. (a) The closing of the transactions contemplated herein
(the "Closing") will take place, assuming satisfaction or waiver of each of the
conditions set forth in Article 7 hereof, at the offices of Jones, Walker,
Waechter, Poitevent, Carrere & Denegre, L.L.P., 201 St. Charles Avenue, New
Orleans, Louisiana, at 10:00 A.M. (Central Time) on such date as may be
mutually agreed upon between the parties following satisfaction of the latest
to occur of the conditions set forth in Section 7.1, or if no date has been
agreed to, on any date specified by one party to the others upon three days'
notice following satisfaction of such conditions, provided, in each case, that
the other conditions set forth in Article 7 shall have been satisfied or waived
as provided in Article 7 at or prior to the Closing (the date of the Closing
being referred to herein as the "Closing Date").

(b) At the Closing, the parties shall (i) deliver the documents,
certificates and opinions required to be delivered by Article 7 hereof, (ii)
provide written evidence, if applicable, of the satisfaction or waiver of each
of the conditions to the other party's obligations set forth in Article 7
hereof, (iii) cause the appropriate officer of Cardinal to execute and deliver
the certificate of merger in accordance with the provisions of the DGCL (the
"Certificate of Merger"), and (iv) consummate the Merger by causing to be filed
such properly executed Certificate of Merger with the Secretary of State of the
State of Delaware in accordance with the provisions of the DGCL. The Merger
shall be effective as of the date and time the Certificate of Merger is duly
filed with the Secretary of State of the State of Delaware, or at such later
time as may be specified in the Certificate of Merger (such date and time being
hereinafter referred to respectively as the "Effective Date" and the "Effective
Time").

Section 2.2 The Merger. Subject to the terms and conditions of this
Agreement, Sub shall be merged with and into Cardinal at the Effective Time.
Following the Merger, the separate corporate existence of Sub shall cease and
Cardinal shall be the surviving corporation in accordance with the provisions
of the DGCL (the "Surviving Corporation").

Section 2.3 Effects of the Merger; Certificate of Incorporation; Directors
and Officers.

(a) The Merger shall have the effects specified in the DGCL.

(b) The certificate of incorporation of Cardinal, as in effect at the
Effective Time, shall be amended in its entirety in the Certificate of Merger
to conform to the certificate of incorporation of Sub in every respect except
for the name of the corporation, which shall remain "Cardinal Holding Corp.,"
and as so amended shall be the certificate of incorporation of the Surviving
Corporation thereafter unless and until amended in accordance with its terms
and as provided by the DCGL.

(c) The bylaws of Sub as in effect at the Effective Time shall be the bylaws
of the Surviving Corporation thereafter unless and until amended in accordance
with its terms, the terms of the certificate of incorporation of the Surviving
Corporation and as provided by law.

(d) The directors and officers of Sub at the Effective Time shall be the
directors and officers of the Surviving Corporation thereafter, each to hold
office in accordance with the certificate of incorporation and bylaws of the
Surviving Corporation until their respective successors are duly elected and
qualified.

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ARTICLE 3

MERGER CONSIDERATION; CONVERSION OF SHARES

Section 3.1 Conversion of Shares.

(a) At the Effective Time, by virtue of the Merger and without any further
action on the part of SESI, Sub, Cardinal or the Surviving Corporation, or any
holder of any of the following securities:

(i) each share of common stock of Sub issued and outstanding at the
Effective Time shall be converted into one share of the common stock of the
Surviving Corporation;

(ii) each of the Class A Group Shares shall be converted into the right
to receive a number of shares of SESI Common Stock equal to the Class A
Group Exchange Ratio;

(iii) all outstanding shares of Cardinal Class B Common Stock shall be
converted into the right to receive an aggregate of 1 million shares of
SESI Common Stock (subject to adjustment for any stock splits, combinations
or recapitalizations relating to SESI Common Stock effected after the date
hereof); and

(iv) each issued share of Cardinal Common Stock that is held in treasury
by Cardinal or held by any subsidiary of Cardinal shall be canceled and no
stock of SESI or other consideration shall be delivered in exchange
therefor.

(b) Upon conversion of the shares of the Class A Group Shares and Cardinal
Class B Common Stock into the right to receive the Merger Shares in the manner
described in paragraph 3.1(a) above, each holder of shares of Class A Group
Shares and Cardinal Class B Common Stock shall have the right to receive in
exchange therefor a certificate representing such whole number of Merger Shares
as is determined in accordance with the exchange ratio applicable to such
shares.

(c) In lieu of the issuance of fractional shares of Superior Common Stock,
each holder of record of issued and outstanding shares of Class A Group Shares
or Cardinal Class B Common Stock as of the Effective Time that would otherwise
be entitled to a fractional share pursuant to the exchange ratio applicable to
such shares shall be entitled to receive a cash payment (without interest)
equal to the fraction of a share of Superior Common Stock to which such holder
would be entitled but for this provision multiplied by the closing price of the
Superior Common Stock on Nasdaq on the Effective Date.

Section 3.2 Exchange of Stock Certificates; Record Date.

(a) After the Closing Date, each holder of certificates representing shares
of Class A Group Shares and Cardinal Class B Common Stock that were converted
into Merger Shares pursuant to Section 3.1 hereof shall surrender such
certificates for cancellation to SESI, together with a duly executed letter of
transmittal in form and substance reasonably satisfactory to SESI. In exchange
therefor, SESI shall issue and deliver to such holder of Class A Group Shares
and Cardinal Class B Common Stock a certificate representing the whole number
of Merger Shares that such holder has the right to receive pursuant to the
provisions of Section 3.1(b) and a check for any cash payment in lieu of a
fractional Merger Share pursuant to Section 3.1(c); provided, however, that (i)
the holders of the Management Common Shares or Management Preferred Shares
shall not be required to deliver a transmittal letter or stock certificates
representing such Management Common Shares or Management Preferred Shares, and
(ii) SESI shall deliver to such escrow agent as a holder of Class A Group
Shares may direct such portion of that Person's Merger Shares as the holder may
direct. The certificates representing shares of Class A Group Shares and
Cardinal Class B Common Stock so surrendered shall be canceled by SESI.

(b) In the event any certificate representing shares of Class A Group Shares
or Cardinal Class B Common Stock shall have been lost, stolen or destroyed,
upon the making of an affidavit of that fact by the Person claiming such
certificate to be lost, stolen or destroyed, SESI shall cause to be issued in
exchange for such lost, stolen or destroyed certificate the number of Merger
Shares issuable in exchange therefor pursuant to Section 3.1(b) and to make any
cash payment in lieu of a fractional Merger Share pursuant to Section 3.1(c).
The

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Board of Directors of SESI may, in its discretion and as a condition precedent
to the issuance thereof, require the owner of such lost, stolen or destroyed
certificate to indemnify SESI against any claim that may be made against SESI
with respect to the certificate alleged to have been lost, stolen or destroyed.

(c) After the Closing Date, the Surviving Corporation shall deliver to SESI
a stock certificate (issued in the name of SESI and dated as of the Effective
Date) representing 1,000 shares of the common stock of the Surviving
Corporation in exchange for SESI's shares of Sub that were converted into
shares of the Surviving Corporation at the Effective Time in the manner
described in Section 3.1(a)(i). The certificate representing the shares of Sub
shall be canceled by SESI.

Section 3.3 No Further Rights in Cardinal Common Stock. As of the Effective
Time, all shares of Class A Group Shares and Cardinal Class B Common Stock
outstanding prior to the Effective Time shall no longer be outstanding and
shall automatically be canceled and retired and shall cease to exist, and each
holder of a certificate representing shares of Class A Group Shares and
Cardinal Class B Common Stock as of the Effective Time shall cease to have any
rights with respect thereto, except the right to receive the number of Merger
Shares into which such shares shall have been converted upon surrender of such
certificate as provided in Section 3.2.

ARTICLE 4

REPRESENTATIONS AND WARRANTIES OF CARDINAL

Cardinal represents and warrants to SESI as follows with respect to the
matters set forth below.

Section 4.1 Organization; Qualification. Each of Cardinal and Cardinal
Services is a corporation duly organized, validly existing and in good standing
under the laws of the state of its incorporation and has the requisite
corporate power and authority to own its property and to carry on its business
as it is now being conducted. No actions or proceedings to dissolve either
Cardinal or Cardinal Services are pending. Section 4.1 of the Cardinal
Disclosure Schedules sets forth the jurisdictions in which each of Cardinal and
Cardinal Services is qualified to do business as a foreign corporation. Copies
of the certificate or articles of incorporation and by-laws of each of Cardinal
and Cardinal Services, with all amendments to the date hereof, have been
furnished to SESI or its representatives, and such copies are accurate and
complete as of the date hereof. Cardinal and Cardinal Services have made
available to SESI accurate and complete copies of the minutes of all meetings
of their respective boards of directors, any committees of such boards and
stockholders (and all consents in lieu of such meetings). Such records, minutes
and consents accurately reflect in all material respects all actions taken by
their respective boards of directors, committees and stockholders as of the
date hereof. Neither Cardinal nor Cardinal Services is in violation of any
provision of its certificate or articles of incorporation or its by-laws other
than such violations, that in the aggregate, would not have a Material Adverse
Effect on Cardinal.

Section 4.2 Capital Stock; Subsidiaries.

(a) As of the date of this Agreement, the authorized capital stock of
Cardinal consists of 1,100,000 shares of Cardinal Common Stock, of which
18,473.907 shares are issued and outstanding, 17,473.907 shares of which are
denominated as Class A, 1,000 shares of which are denominated as Class B, and
none are held in its treasury, and 47,500 shares of Cardinal Preferred Stock,
of which 23,123.616 shares are issued and outstanding and denominated as Class
C Preferred Stock and none are held in its treasury. All issued and outstanding
shares of Cardinal Common Stock and Cardinal Preferred Stock have been duly
authorized and are validly issued, fully paid and non-assessable. All
outstanding shares of Cardinal Common Stock and Cardinal Preferred Stock are
held of record and beneficially by the Persons set forth in Section 3.1 of the
Cardinal Disclosure Schedules, as it may be amended as of the Closing Date in
accordance with Sections 6.4, 6.13 and 7.1(l) hereof.

(b) The authorized capital stock of Cardinal Services consists of 300,000
shares of Cardinal Services common stock (consisting of 150,000 shares
designated as voting common stock and 150,000 shares designated

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as non-voting common stock), of which 120,000 shares of voting common stock are
issued and outstanding, no shares of non-voting common stock are issued and
outstanding and none are held in its treasury. All issued and outstanding
shares of Cardinal Services common stock have been duly authorized and are
validly issued, fully paid and non-assessable, and are held of record and
beneficially by Cardinal.

(c) Except as set forth in Section 4.2 of the Cardinal Disclosure Schedules,
there are no outstanding stock options or other rights to acquire any shares of
the capital stock of Cardinal or Cardinal Services or any security convertible
into Cardinal Common Stock, and except as contemplated by Sections 6.4, 6.13 or
7.1(l) hereof or as set forth in Section 4.2 of the Cardinal Disclosure
Schedules, neither Cardinal nor Cardinal Services has any obligation or other
commitment to issue, sell or deliver any of the foregoing or any shares of its
capital stock. All issued and outstanding shares of Cardinal Common Stock and
Cardinal Services common stock have been issued in compliance with all legal
requirements and without violation of any preemptive or similar rights.

(d) Cardinal owns, directly or indirectly, no interest in any Person other
than Cardinal Services. Cardinal Services has no interest in any other Person.

(e) Cardinal (i) was formed solely to own the Cardinal Services common stock
and engage in financing transactions relative to its acquisition of Cardinal
Services common stock, (ii) has never conducted any business operations, (iii)
has never had any employees, (iv) owns no assets (other than the Cardinal
Services common stock) and (v) has no material liabilities that are not
reflected in the Cardinal Financial Statements.

Section 4.3 Corporate Authorization; Enforceability.

(a) The execution, delivery and performance of this Agreement by Cardinal
has been duly authorized by the board of directors of Cardinal. Upon an
affirmative vote or consent of the holders of a (i) majority of the outstanding
Cardinal Common Stock, (ii) a majority of the outstanding shares of Cardinal
Common Stock designated as Class B voting as a separate class and (iii) 80% of
any outstanding shares of Cardinal Preferred Stock voting as a separate class,
approving this Agreement and the transactions contemplated hereunder, and the
conversion of the Cardinal Preferred Stock into shares of Cardinal Common Stock
as contemplated hereunder (or approval by the holders of any outstanding shares
of Cardinal Preferred Stock as provided in subsection (a)(iii) above), no
further vote or consent of stockholders or directors of Cardinal and no further
corporate acts or other corporate proceedings are required of Cardinal for the
due and valid authorization, execution, delivery and performance of this
Agreement or the consummation of the Merger.

(b) This Agreement is the legal, valid and binding obligation of Cardinal
enforceable against it in accordance with its terms, except that enforcement
may be limited by applicable bankruptcy, insolvency, reorganization, moratorium
and other similar laws affecting creditors' rights generally and equitable
principles which may limit the availability of certain equitable remedies in
certain instances.

Section 4.4 No Conflict. Except as set forth in Section 4.4 of the Cardinal
Disclosure Schedules, neither the execution, delivery or performance of this
Agreement by Cardinal nor the consummation of the transactions contemplated
hereby will (a) if the requisite Cardinal stockholder approval is obtained,
conflict with or result in any breach of the provisions of the certificate or
articles of incorporation or by-laws of Cardinal or Cardinal Services, (b)
result in the violation or breach of, or constitute (with or without due notice
or the lapse of time or both) a default (or give rise to any right of
termination, cancellation or acceleration) under, any of the terms, conditions
or provisions of any note, bond, mortgage, indenture, or any material license,
contract, agreement or other instrument or obligation to which either of
Cardinal or Cardinal Services is a party or by which either of them or their
respective properties or assets may be bound, except for such violations,
breaches or defaults that would not, individually or in the aggregate, have a
Material Adverse Effect on Cardinal, or (c) violate any order, writ,
injunction, decree, statute, rule or regulation applicable to Cardinal or
Cardinal Services or any of their respective properties or assets, except for
such violations, that in the aggregate, would not have a Material Adverse
Effect on Cardinal.

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Section 4.5 Consents. No consent, approval, order or authorization of, or
declaration, filing or registration with, any Governmental Entity or other
Person is required to be obtained or made by Cardinal or Cardinal Services in
connection with the execution, delivery or performance by Cardinal or Cardinal
Services of this Agreement or the consummation by either Cardinal or Cardinal
Services of the transactions contemplated hereby except for (a) those required
by the HSR Act, (b) as set forth in Section 4.5 of the Cardinal Disclosure
Schedules, (c) the requisite Cardinal Stockholder approval and action set forth
in Section 4.3(a) hereof and (d) such other consents, approvals, orders,
authorizations, declarations, filings, or registrations, the failure of which
to obtain or make would not have, in the aggregate, a Material Adverse Effect
on Cardinal.

Section 4.6 Cardinal Financial Statements; Undisclosed Liabilities.

(a) The Cardinal Annual Financial Statements have been audited by Ernst &
Young, LLP, independent accountants, in accordance with generally accepted
auditing standards, have been prepared in accordance with GAAP applied on a
basis consistent with prior periods, and present fairly the financial position
of Cardinal and its Subsidiaries at such dates and the results of operations
and cash flows for the periods then ended.

(b) The Cardinal Interim Financial Statements have been prepared in
accordance with GAAP on a basis consistent with the prior periods and reflect
all adjustments, consisting only of normal, recurring adjustments, that are
necessary for a fair statement of the results for the interim period presented
therein. To the Knowledge of Cardinal, except as disclosed in Section 4.6 of
the Cardinal Disclosure Schedules, none of Cardinal, Cardinal Services, nor any
of their respective assets, is subject to any liability, commitment, debt or
obligation that would be required to be disclosed in financial statements
prepared in accordance with GAAP, except (i) as and to the extent reflected on
the Cardinal Interim Financial Statements, or (ii) as may have been incurred or
may have arisen since the date of the Cardinal Interim Financial Statements in
the ordinary course of business and that are permitted by this Agreement, or,
in the aggregate, would not have a Material Adverse Effect on Cardinal.

Section 4.7 Accounts Receivable. All of the accounts receivable reflected on
the Cardinal Interim Financial Statements or created thereafter (a) have arisen
only from bona fide transactions in the ordinary course of business, (b)
represent valid obligations owing to Cardinal Services, (c) except as may be
reserved against in the Cardinal Interim Financial Statements, are subject to
no material valid counterclaims or setoffs, and (d) have been accrued in
accordance with GAAP. Section 4.7 of the Cardinal Disclosure Schedules sets
forth a summary listing of all accounts receivable of Cardinal Services as of
the date specified therein and reflects receivables aged less than 90 days from
the date of invoice as a group and sets forth all receivables aged more than 90
days individually by customer, invoice and amount. No representation or
warranty is made that any account receivable will be collected when due or
thereafter.

Section 4.8 Absence of Certain Changes.

(a) Since February 28, 1999, Cardinal Services has operated in the ordinary
course of business consistent with past practice and there has been no event or
condition of any character that has had, or can reasonably be expected to have,
a Material Adverse Effect on Cardinal.

(b) Except as set forth in Section 4.8 of the Cardinal Disclosure Schedules,
since February 28, 1999, Cardinal Services has not taken any actions of a type
referred to in Section 6.10 that would have required the consent of SESI if
such action were to have been taken during the period between the date hereof
and the Closing Date.

Section 4.9 Material Contracts.

(a) Section 4.9 of the Cardinal Disclosure Schedules contains a list and
brief description (including the names of the parties and the date and nature
of the agreement) of each Material Contract to which either Cardinal or
Cardinal Services is a party, or to which any of their respective properties is
subject. SESI has been provided a complete and accurate copy of each Material
Contract listed on Section 4.9 of the Cardinal Disclosure Schedules. Except as
set forth in Section 4.9 of the Cardinal Disclosure Schedules, each such

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Material Contract is a legal, valid, binding and enforceable obligation of
Cardinal or Cardinal Services, as the case may be, except to the extent that
enforcement may be limited by (i) bankruptcy, insolvency, reorganization,
moratorium or other similar laws relating to or affecting the enforcement of
creditors' rights generally and (ii) general equitable principles.

(b) Except as set forth in Section 4.9 of the Cardinal Disclosure Schedules,
neither Cardinal nor Cardinal Services is in material breach of or default
(and, to the Knowledge of Cardinal, no event has occurred which, with due
notice or lapse of time or both, would constitute such a breach or default)
under any Material Contract except where any such breaches or defaults, in the
aggregate, would not have a Material Adverse Effect on Cardinal, and no party
to any Material Contract has given Cardinal or Cardinal Services written notice
of or made a claim in writing with respect to any breach or default under any
such Material Contract.

Section 4.10 Vessels. Section 4.10 of the Cardinal Disclosure Schedules sets
forth a list of all vessels owned, leased, chartered or managed by Cardinal
Services on the date hereof (such vessels being referred to herein as the
"Vessels"). Cardinal Services has good and marketable title to each Vessel free
and clear of all Liens, except for (a) Liens set forth in Section 4.10 of the
Cardinal Disclosure Schedules (b) Liens that collateralize indebtedness that is
reflected in the Cardinal Interim Financial Statements, and (c) Permitted
Liens. All of the Vessels are U.S. flagged vessels and are qualified to engage
in the coastwise trade. At all relevant times each of Cardinal Services and
Cardinal has been "a citizen of the United States" within the meaning of
Section 2 of the Shipping Act of 1916, as amended, and is qualified to own and
operate vessels in the coastwise trade. The Vessels are duly documented in the
name of Cardinal Services with the U.S. Coast Guard (to the extent required)
and each of the Vessels has current certificates of inspection and
documentation issued by the U.S. Coast Guard and all other certificates and
documentation required by any Governmental Entity to operate offshore in the
U.S. Gulf of Mexico, in each case free of reportable exceptions or notations of
record and each of the Vessels is currently operating within the U.S. Gulf of
Mexico. Except as provided in Section 4.10 of the Cardinal Disclosure Schedules
or where the failure to be in such condition would not have a Material Adverse
Effect on Cardinal, the Vessels taken as a whole are in a good state of repair
and operating condition, ordinary wear and tear excepted, which is adequate to
enable such Vessels to perform the functions for Cardinal Services for which
they have been historically used and operated in the ordinary course of
business.

Section 4.11 Real Property.

(a) Section 4.11 of the Cardinal Disclosure Schedules sets forth a true and
complete list of all real property owned in fee simple title by Cardinal
Services (collectively, the "Cardinal Owned Properties"). Except as set forth
in Section 4.11 of the Cardinal Disclosure Schedules, Cardinal Services has
good and marketable title to all Cardinal Owned Properties. Except as disclosed
in Section 4.11 of the Cardinal Disclosure Schedules, none of the Cardinal
Owned Properties is subject to any Liens, except for (i) Liens that
collateralize indebtedness that is reflected in the Cardinal Interim Financial
Statements and (ii) Permitted Liens.

(b) Except as set forth in Section 4.11 of the Cardinal Disclosure
Schedules, all improvements on the Cardinal Owned Properties and the operations
therein conducted conform in all material respects to all applicable health,
fire, safety, zoning and building laws, ordinances and administrative
regulations, except for possible nonconforming uses or violations which do not
materially interfere with the present use, operation or maintenance thereof or
access thereto by Cardinal Services, and, individually or in the aggregate,
would not otherwise have a Material Adverse Effect on Cardinal. The operating
condition and state of repair of all buildings, structures, improvements and
fixtures on the Cardinal Owned Properties are sufficient to permit the use and
operation of all such buildings, structures, improvements and fixtures as now
used or operated by Cardinal Services except where the failure to be in such
condition would not have a Material Adverse Effect on Cardinal.

Section 4.12 Real Property Leases.

(a) Section 4.12 of the Cardinal Disclosure Schedules sets forth a list of
all Leases with respect to all real properties in which Cardinal Services has a
leasehold, subleasehold, or other occupancy interest (the "Cardinal

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Leased Properties"). Complete and accurate copies of all such Leases and all
amendments thereto have been provided to SESI. All of the Leases for the
Cardinal Leased Properties are valid and effective against Cardinal Services in
accordance with their respective terms, except that the enforcement thereof may
be subject to (i) bankruptcy, insolvency, reorganization, moratorium or other
similar laws affecting or relating to enforcement of creditors' rights
generally and (ii) general equitable principles.

(b) Cardinal Services has not received written notice that it is in material
breach of or default (and, to the Knowledge of Cardinal, no event has occurred,
that, with due notice or lapse of time or both, would constitute such a breach
or default) under any Lease.

(c) Except as set forth in Section 4.12 of the Cardinal Disclosure
Schedules, no Cardinal Leased Property is subject to any material sublease,
license or other agreement granting to any Person any right to the use,
occupancy or enjoyment of Cardinal Leased Property or any portion thereof
through Cardinal Services.

Section 4.13 Personal Property.

(a) Except as set forth in Section 4.13 of the Cardinal Disclosure
Schedules, Cardinal Services has good title to all Personal Property (other
than the Vessels) owned by Cardinal Services, free and clear of all Liens other
than (i) Liens that collateralize indebtedness that is reflected in the
Cardinal Interim Financial Statements and (ii) Permitted Liens.

(b) Except as set forth in Section 4.13 of the Cardinal Disclosure
Schedules, Cardinal Services holds valid leaseholds in all of the Personal
Property leased by it, which leases are enforceable against Cardinal Services
in accordance with their respective terms, except that the enforcement thereof
may be subject to (i) bankruptcy, insolvency, reorganization, moratorium or
other similar laws affecting or relating to enforcement of creditors' rights
generally, and (ii) general equitable principles.

(c) Except as set forth in Section 4.13 of the Cardinal Disclosure
Schedules, Cardinal Services is not in breach of or default (and, to the
Knowledge of Cardinal, no event has occurred that, with due notice or lapse of
time or both, would constitute such a lapse or default) under any lease of any
item of Personal Property leased by it, except for any such breach or default
that would not, individually or in the aggregate, have a Material Adverse
Effect on Cardinal.

(d) Except as set forth in Section 4.13 of the Cardinal Disclosure
Schedules, the Personal Property (other than the Vessels) now owned, leased or
used by Cardinal Services is sufficient and adequate to carry on its business
as presently conducted and the operating condition and the state of repair
thereof is sufficient to permit Cardinal Services to carry on its business as
presently conducted except where the failure to be in such condition would not
have a Material Adverse Effect on Cardinal.

Section 4.14 Compliance with Laws. Except as set forth in Sections 4.14,
4.17, 4.22 or 4.23 of the Cardinal Disclosure Schedules, neither Cardinal nor
Cardinal Services is in violation of any Applicable Law, nor is it in default
with respect to any order, writ, judgment, award, injunction or other decree of
any Governmental Entity applicable to it or any of its respective assets,
properties or operations except such violations or defaults that, in the
aggregate, would not have a Material Adverse Effect on Cardinal.

Section 4.15 Permits. Except as set forth in Sections 4.15 or 4.17 of the
Cardinal Disclosure Schedules, Cardinal Services has all permits, licenses and
governmental authorizations that are required for the lease, ownership,
occupancy or operation of its properties and assets and the carrying on of its
business except where the failure to have any such permits, licenses or
authorizations would not, in the aggregate, have a Material Adverse Effect on
Cardinal.

Section 4.16 Litigation.

(a) Except as set forth in Section 4.16 of the Cardinal Disclosure
Schedules, there are no Proceedings pending or, to the Knowledge of Cardinal,
threatened, against either Cardinal or Cardinal Services (i) for which

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an indemnification claim has been asserted, (ii) that could reasonably be
expected to have a Material Adverse Effect on Cardinal or (iii) that seeks to
prohibit or restrict consummation of the transactions contemplated by this
Agreement.

(b) Except as set forth in Section 4.16 of the Cardinal Disclosure
Schedules, neither Cardinal, Cardinal Services nor any of their respective
assets or properties is subject to any material order, writ, judgment, award,
injunction or decree of any Governmental Entity.

Section 4.17 Environmental Compliance.

(a) Except as set forth in Section 4.17 of the Cardinal Disclosure
Schedules, to the Knowledge of Cardinal, Cardinal Services possesses all
licenses, permits and other approvals and authorizations that are required
under, and at all times for the past two years has been in compliance with, all
Environmental Laws, including all Environmental Laws governing the generation,
use, collection, treatment, storage, transportation, recover, removal,
discharge or disposal of hazardous substances or wastes, and all Environmental
Laws imposing record-keeping, maintenance, testing, inspection, notification
and reporting requirements with respect to hazardous substances or wastes
except where noncompliance would not, individually or in the aggregate, have a
Material Adverse Effect on Cardinal, and, to the Knowledge of Cardinal, except
as set forth in Section 4.17 of the Cardinal Disclosure Schedules, there is no
condition that would materially interfere with such compliance in the future.
For purposes of this Agreement, "hazardous substances" and "hazardous wastes"
are materials defined as "hazardous substances," "hazardous wastes," or
"hazardous constituents" in (i) the Comprehensive Environmental Response,
Compensation and Liability Act of 1980, 42 U.S.C. Sections 9601-9675, as
amended by the Superfund Amendments and Reauthorization Act of 1986, and any
amendments thereto and regulations thereunder; (ii) the Resource Conservation
and Recovery Act of 1976, 42 U.S.C. Sections 6901-6992, as amended by the
Hazardous and Solid Waste Amendments of 1984, and any amendments thereto and
regulations thereunder; (iii) the Oil Pollution Act of 1990, 33 U.S.C. Sections
2701-2761, and any amendments thereto and regulations thereunder; and (iv) any
other applicable Environmental Law.

(b) Except as set forth in Section 4.17 of the Cardinal Disclosure
Schedules, for the past two years neither Cardinal nor Cardinal Services has
been subject to any Proceeding pursuant to, or has received any notice of any
violation of, or claim alleging liability under, any Environmental Laws. To the
Knowledge of Cardinal, no facts or circumstances exist that would reasonably be
likely to result in a claim, citation or allegation against either Cardinal or
Cardinal Services for a violation of, or alleging liability under any
Environmental Laws, except such violations or liabilities that would not,
individually or in the aggregate, have a Material Adverse Effect on Cardinal.

(c) Except as set forth in Section 4.17 of the Cardinal Disclosure
Schedules, to the Knowledge of Cardinal, there are no underground tanks of any
type (including tanks storing gasoline, diesel fuel, oil or other petroleum
products) or disposal sites for hazardous substances, hazardous wastes or any
other regulated waste, located on or under the Cardinal Owned Properties or
Cardinal Leased Properties.

(d) Except as set forth in Section 4.17 of the Cardinal Disclosure
Schedules, to the Knowledge of Cardinal, except in the ordinary course of
business, and in all cases in material compliance with all Environmental Laws,
Cardinal Services has not engaged any third party to handle, transport or
dispose of hazardous substances or wastes (including for this purpose,
gasoline, diesel fuel, oil or other petroleum products, or bilge waste) on its
behalf.

Section 4.18 ERISA and Related Matters.

(a) Section 4.18 of the Cardinal Disclosure Schedules provides a list of
each of the following which Cardinal or Cardinal Services or any corporation,
trade, business or entity under common control with Cardinal or a Cardinal
Services within the meaning of section 414(b), (c), (m) or (o) of the Code
sponsors, maintains or

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contributes to, or has contingent liability with respect thereto for the
benefit of its current or former employees, officers or directors as of the
Closing Date:

(i) each Employee Plan; and

(ii) each personnel policy, stock option plan, collective bargaining
agreement, bonus plan or arrangement, incentive award plan or arrangement,
vacation policy, severance pay plan, policy or agreement, deferred
compensation agreement or arrangement, executive compensation or
supplemental income arrangement, consulting agreement, employment agreement
and each other employee benefit plan, agreement, arrangement, program,
practice or understanding that is not described in Section 4.18(a)(i)
("Cardinal Benefit Program or Agreement").

True and complete copies of each of the Employee Plans, Cardinal Benefit
Programs or Agreements, current summary plan descriptions, related trusts, if
applicable, and all amendments thereto, have been or on request will be
furnished to SESI. Further, a copy of the most recent annual report, if
applicable, for each Employee Plan, Cardinal Benefit Program or Agreement and
all material communications received from or sent to the Internal Revenue
Service or the Department of Labor in the last two years regarding any Employee
Plan, Cardinal Benefit Program or Agreement will be provided to SESI upon
request.

(b) Benefits under any Employee Plan or Cardinal Benefit Program or
Agreement are as represented in said documents and have not been increased or
modified (whether written or not written) subsequent to the dates of such
documents. Neither Cardinal nor Cardinal Services has communicated to any
employee or former employee any intention or commitment to modify any Employee
Plan or Cardinal Benefit Program or Agreement or to establish or implement any
other employee or retiree benefit or compensation arrangement.

(c) Neither Cardinal or Cardinal Services, nor any trade or business under
common control with Cardinal or Cardinal Services within the meaning of Section
414(b) or (c) of the Code prior to the Closing Date maintains or has ever
maintained or become obligated to contribute to any employee benefit plan (i)
that is subject to Title IV of ERISA, (ii) to which Section 412 of the Code
applies, (iii) that is a Multiemployer Plan, or (iv) in connection with any
trust described in Section 501(c)(9) of the Code. Neither Cardinal nor Cardinal
Services has within the last five years engaged in, or is a successor
corporation to an entity that has engaged in, a transaction described in
Section 4069 of ERISA.

(d) Except as otherwise set forth in Section 4.18 of the Cardinal Disclosure
Schedules:

(i) each Employee Plan and each Cardinal Benefit Program or Agreement
has been administered, maintained and operated in all material respects in
accordance with the terms thereof and in compliance with its governing
documents and Applicable Law (including where applicable, ERISA and the
Code);

(ii) each of the Employee Plans intended to be qualified under section
401 of the Code (A) satisfies in form the requirements of such section
except to the extent amendments are not required by law to be made until a
date after the Closing Date, (B) has received a favorable determination
letter from the Internal Revenue Service regarding such qualified status,
(C) has not, since receipt of the most recent favorable determination
letter, been amended, and (D) has not been operated in a way that would
adversely affect its qualified status;

(iii) no act, omission or transaction has occurred which would result in
the imposition on Cardinal or Cardinal Services of a breach of fiduciary
duty liability or damages under Section 409 of ERISA, a civil penalty
assessed pursuant to Subsections (c), (i) or (l) of Section 502 of ERISA or
a Tax imposed pursuant to Chapter 43 of Subtitle D of the Code;

(iv) neither Cardinal or Cardinal Services, nor any of their directors,
officers or employees has engaged in any transaction with respect to an
Employee Plan that could subject Cardinal or Cardinal Services to a Tax,
penalty or liability for a prohibited transaction, as defined in Section
406 of ERISA or Section 4975 of the Code. None of the assets of any
Employee Plan are invested in employer securities or employer real
property.

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(v) full payment has been made of all amounts which Cardinal Services is
or has been required to have paid as contributions to or benefits due under
any Employee Plan or Cardinal Benefit Program or Agreement under Applicable
Law or under the terms of any such plan or any arrangement; and

(vi) there is no Proceeding or other dispute pending or, to the
Knowledge of Cardinal, threatened that involves any Employee Plan or
Cardinal Benefit Program or Agreement that could reasonably be expected to
result in a material liability to Cardinal or Cardinal Services.

(e) Except as set forth in Section 4.18 of the Cardinal Disclosure
Schedules, in connection with the consummation of the transactions contemplated
in this Agreement, no employee or former employee of Cardinal or Cardinal
Services will become entitled to any bonus, retirement, severance, job security
or similar benefit or enhanced benefit (including acceleration of an award,
vesting or exercise of an incentive award) or any fee or payment of any kind
solely as a result of any of the transactions contemplated hereby, and no such
disclosed payment constitutes a parachute payment described in Section 280G of
the Code.

(f) All group health plans of Cardinal or Cardinal Services have at all
times fully complied in all material respects with all applicable notification
and continuation coverage requirements of Section 4980B(f) of the Code and
Section 601 of ERISA. Neither Cardinal nor Cardinal Services has any current or
projected liability in respect of post-retirement or post-employment welfare
benefits for retired, current or former employees, or for any stockholder or
director who is not an employee, former employee or beneficiary thereof, except
to the extent otherwise required by the continuation requirements of Section
4980B(f) of the Code and Section 601 of ERISA.

(g) All group health plans (within the meaning of Section 5000(b)(1) of the
Code) of Cardinal or Cardinal Services have at all times fully complied in all
material respects with, and have been maintained and operated in all material
respects in accordance with (i) the health care requirements relating to
portability, access, and renewability of Sections 9801 through 9803 of the Code
and Part 7 of Title I, Subtitle B of ERISA, (ii) the health care requirements
relating to the benefits for mothers and newborns under Section 9811 of the
Code and Section 711 of ERISA, and (iii) the health care requirements relating
to the parity provisions applicable to mental health benefits under Section
9812 of the Code and Section 712 of ERISA.

(h) Except as set forth in Section 4.18 of the Cardinal Disclosure
Schedules, no employee or former employee, officer or director of Cardinal or
Cardinal Services is or will become entitled to receive any award under
Cardinal's discretionary or other bonus plans except for amounts reflected on
the Cardinal Financial Statements.

Section 4.19 Taxes.

(a) Except as set forth in Section 4.19 of the Cardinal Disclosure
Schedules, all Returns required to be filed by or on behalf of Cardinal and
Cardinal Services have been duly filed and such Returns (including all attached
statements and schedules) are true, complete and correct in all material
respects. All Taxes due have been paid in full on a timely basis, and no other
Taxes are payable by Cardinal or Cardinal Services with respect to items or
periods covered by such Returns (whether or not shown on or reportable on such
Returns) or with respect to any period prior to the Closing Date.

(b) Except as set forth in Section 4.19 of the Cardinal Disclosure
Schedules, each of Cardinal and Cardinal Services has withheld and paid over
all Taxes required to have been withheld and paid over (including any estimated
taxes and Taxes pursuant to Section 1441 or 1442 of the Code or similar
provisions under any foreign laws), and has complied in all material respects
with all information reporting and backup withholding requirements, including
maintenance of required records with respect thereto, in connection with
amounts paid or owing to any employee, creditor, independent contractor, or
other third party.

(c) Except as set forth in Section 4.19 of the Cardinal Disclosure
Schedules, there are no Liens on any of the assets of Cardinal or Cardinal
Services with respect to Taxes, other than Permitted Liens.

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(d) Each of Cardinal and Cardinal Services has furnished or made available
to SESI true and complete copies of: (i) all federal and state income and
franchise tax returns of Cardinal and Cardinal Services for all periods
beginning on or after January 1, 1996, and (ii) all tax audit reports, work
papers, statements of deficiencies, closing or other agreements received by
Cardinal or Cardinal Services or on their behalf relating to Taxes for all
periods beginning on or after January 1, 1996.

(e) Except as disclosed in Section 4.19 of the Cardinal Disclosure
Schedules:

(i) The Returns of Cardinal and Cardinal Services have never been
audited by a Governmental Entity, nor is any such audit in process, pending
or, to the Knowledge of Cardinal, threatened (formally or informally)
except with respect to Returns where audits have been concluded or for
periods for which the applicable statutes of limitations have not run.

(ii) No deficiencies exist or have been asserted (either in writing or
verbally, formally or informally) or, to the Knowledge of Cardinal, are
expected to be asserted with respect to Taxes of Cardinal or Cardinal
Services, and no notice (either formal or informal) has been received by
Cardinal or Cardinal Services that it has not filed a Return or paid Taxes
required to be filed or paid by it.

(iii) Neither Cardinal nor Cardinal Services is a party to any pending
Proceeding for assessment or collection of Taxes, nor has such Proceeding
been asserted or, to the Knowledge of Cardinal, threatened (either formally
or informally), against it or any of its assets.

(iv) Except as reflected in the Returns, no waiver or extension of any
statute of limitations is in effect with respect to Taxes or Returns of
Cardinal or Cardinal Services.

(v) There are no requests for rulings, subpoenas or requests for
information pending with respect to Cardinal or Cardinal Services.

(vi) No power of attorney has been granted by Cardinal or Cardinal
Services with respect to any matter relating to Taxes.

(vii) The amount of liability for unpaid Taxes of Cardinal or Cardinal
Services for all periods ending on or before the Closing Date will not, in
the aggregate, exceed the amount of the current liability accruals for
Taxes (excluding reserves for deferred taxes), as such accruals are
reflected on the consolidated balance sheet of Cardinal as of the Closing
Date.

(f) Except as disclosed in Section 4.19 of the Cardinal Disclosure
Schedules:

(i) Neither Cardinal nor Cardinal Services has issued or assumed any
indebtedness that is subject to section 279(b) of the Code.

(ii) Neither Cardinal nor Cardinal Services has entered into any
compensatory agreements with respect to the performance of services which
payment thereunder would result in a nondeductible expense pursuant to
Section 280G or 162(m) of the Code or an excise tax to the recipient of
such payment pursuant to Section 4999 of the Code.

(iii) No election has been made under Section 338 of the Code with
respect to either Cardinal or Cardinal Services and no action has been
taken that would result in any income tax liability to either Cardinal or
Cardinal Services as a result of deemed election within the meaning of
Section 338 of the Code.

(iv) No consent under Section 341(f) of the Code has been filed with
respect to either Cardinal or Cardinal Services.

(v) Neither Cardinal nor Cardinal Services has agreed, nor is it
required, to make any adjustment under Code Section 481(a) by reason of a
change in accounting method or otherwise.

(vi) Neither Cardinal nor Cardinal Services has disposed of any property
that has been accounted for under the installment method.

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(vii) Neither Cardinal nor Cardinal Services has made any of the
foregoing elections and is not required to apply any of the foregoing rules
under any comparable state or local income tax provisions.

(viii) Neither Cardinal nor Cardinal Services is a party to any tax
sharing or allocation agreement nor does either Cardinal or Cardinal
Services owe any amount under any tax sharing or allocation agreement.

(ix) Neither Cardinal nor Cardinal Services has ever been (or has any
liability for unpaid Taxes because it once was) a member of an affiliated
group within the meaning of Section 1502 of the Code during any part of any
consolidated return year during any part of which year any corporation other
than Cardinal and Cardinal Services was also a member of such affiliated
group.

(g) Cardinal is not an investment company. For purposes of this
representation, the term "investment company" means a regulated investment
company, a real estate investment trust, or a corporation 50% or more of the
value of whose total assets are stock and securities and 80% or more of the
value of whose total assets are assets held for investment. In making the 50%
and the 80% determinations under the preceding sentence, stock and securities
in any subsidiary corporation will be disregarded and the parent corporation
will be deemed to own its ratable share of the subsidiary's assets.

(h) Cardinal is not under the jurisdiction of a court in a Title 11 or
similar case within the meaning of Section 368(a)(3)(A) of the Code.

Section 4.20 Customers and Suppliers. Section 4.20 of the Cardinal
Disclosure Schedules sets forth a complete and correct list of all customers
whose purchases exceeded 5% of the aggregate net sales of Cardinal Services for
the fiscal year ended December 31, 1998.

Section 4.21 Insurance.

(a) Section 4.21 of the Cardinal Disclosure Schedules sets forth a true and
complete list of all policies of hull and machinery insurance, increased value,
protection and indemnity, title insurance, liability and casualty insurance,
property insurance, auto insurance, business interruption insurance, tenant's
insurance, workers' compensation, life insurance, disability insurance, excess
or umbrella insurance, directors' and officers' liability insurance and any
other type of insurance insuring the properties, assets, employees or
operations of Cardinal Services (collectively the "Cardinal Policies").
Cardinal has made available to SESI a true, complete and accurate copy of all
Cardinal Policies.

(b) All Cardinal Policies are in full force and effect except where failures
to have any Cardinal Policies in full force and effect would not, in the
aggregate, have a Material Adverse Effect on Cardinal.

(c) There is no claim by Cardinal or any other Person pending under any of
the Cardinal Policies as to which, to the Knowledge of Cardinal, coverage has
been denied or disputed by the underwriters or issuers of such Cardinal
Policies. Neither Cardinal Services nor Cardinal has received any notice of
default, and Cardinal Services is not in default, under any provision of the
Cardinal Policies where any such defaults, in the aggregate, would have a
Material Adverse Effect on Cardinal.

(d) Cardinal has not since January 1, 1999 received any written notice from
or on behalf of any insurance carrier or other issuer issuing such Cardinal
Policies that insurance rates or other annual premiums or fees in effect as of
the date hereof will hereafter be materially increased, that there will be a
non-renewal, cancellation or increase in a deductible (or a material increase
in premiums in order to maintain an existing deductible) of any of the Cardinal
Policies in effect as of the date hereof, or that material alteration of any
equipment or any improvements to any Vessel, the Cardinal Owned Properties or
the Cardinal Leased Properties, purchase of additional material equipment, or
material modification of any of the methods of doing business of Cardinal
Services will be required after the date hereof.

Section 4.22 Safety and Health. Except as set forth in Section 4.22 of the
Cardinal Disclosure Schedules, to the Knowledge of Cardinal, the property and
assets of Cardinal Services have been and are being operated in

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compliance in all respects with all Applicable Laws designed to protect safety
or health, or both, including without limitation, the Occupational Safety and
Health Act, and the regulations promulgated pursuant thereto, except for any
violations or deficiency that would not have a Material Adverse Effect on
Cardinal. Neither Cardinal nor Cardinal Services has received any written
notice of any violations, deficiency, investigation or inquiry from any
Governmental Entity, employer or third party under any such law and, to the
Knowledge of Cardinal, no such investigation or inquiry is planned or
threatened, which, if adversely determined would, individually or in the
aggregate, have a Material Adverse Effect on Cardinal.

Section 4.23 Labor Matters.

(a) Set forth in Section 4.23 of the Cardinal Disclosure Schedules is a list
of all: (i) outstanding employment, consulting or management agreements or
contracts with officers, directors or employees of Cardinal Services (other
than those that are terminable on no more than 30 days notice) that provide for
the payment of any bonus or commission; (ii) agreements, policies or practices
that require Cardinal Services to pay termination or severance pay to salaried,
non-exempt or hourly employees in excess of 30 days' salary and benefits to any
employee upon termination of such employee's employment (other than as required
by law); and (iii) collective bargaining agreements or other labor union
contracts applicable to persons employed by Cardinal Services. Cardinal
Services has made available to SESI complete and correct copies of all such
employment and labor agreements. Except as set forth in Section 4.23 of the
Cardinal Disclosure Schedules, to the Knowledge of Cardinal, Cardinal Services
has not breached or otherwise failed to comply in any material respect with any
provisions of any employment or labor agreement, and there are no grievances
outstanding thereunder.

(b) Except as set forth in Section 4.23 of the Cardinal Disclosure
Schedules: (i) Cardinal Services is in compliance in all material respects with
all Applicable Laws relating to employment and employment practices, wages,
hours, and terms and conditions of employment; (ii) there is no unfair labor
practice charge or complaint against Cardinal Services pending before any
Governmental Entity; (iii) there is no labor strike, material slowdown or
material work stoppage or lockout actually pending or, to the Knowledge of
Cardinal, threatened, against or affecting Cardinal Services; (iv) there is no
representation claim or petition pending before any Governmental Entity; (v)
there are no charges with respect to or relating to Cardinal Services pending
before any Governmental Entity responsible for the prevention of unlawful
employment practices; and (vi) Cardinal Services has not had formal notice from
any Governmental Entity responsible for the enforcement of labor or employment
laws of an intention to conduct an investigation of Cardinal Services and, to
the Knowledge of Cardinal, no such investigation is in progress.

Section 4.24 Transactions with Certain Persons. Except as set forth in
Sections 4.23 or 4.24 of the Cardinal Disclosure Schedules, no director,
officer or employee of either Cardinal, Cardinal Services or any of their
respective Affiliates is presently a party to any transaction with Cardinal
Services, including any contract, agreement or other arrangement providing for
the furnishing of services by or the rental of real or personal property from
any such Person or from any of its Affiliates.

Section 4.25 Propriety of Past Payments. Except as set forth in Section 4.25
of the Cardinal Disclosure Schedules, neither Cardinal nor Cardinal Services
nor any director, officer, employee or agent of Cardinal or Cardinal Services
has (a) used any funds for unlawful contributions, gifts, entertainment or
other unlawful payments or expenses relating to political activity or (b) made
any bribe, rebate, payoff, influence payment, kick-back or other unlawful
payment that is in violation of Applicable Law.

Section 4.26 Intellectual Property. Cardinal Services either owns or has
valid licenses to use all patents, copyrights, trademarks, software, databases,
and other technical information used in its business as presently conducted,
subject to limitations contained in the agreements governing the use of same,
which limitations are customary for companies engaged in businesses similar to
Cardinal Services. Cardinal Services is in compliance with all such licenses
and agreements except where any noncompliance would not, in the aggregate, have
a Material Adverse Effect on Cardinal, and there are no pending or, to the
Knowledge of

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Cardinal, threatened Proceedings challenging or questioning the validity or
effectiveness of any license or agreement relating to such property or the
right of Cardinal Services to use, copy, modify or distribute the same.

Section 4.27 Director and Officer Indemnification. The directors, officers
and employees of Cardinal and Cardinal Services are not entitled to
indemnification by either Cardinal or Cardinal Services, except to the extent
that indemnification rights are provided for generally by Applicable Law or
such corporation's charter, by-laws or directors' and officers' liability
insurance policies described in Section 4.21 of the Cardinal Disclosure
Schedules or in employment agreements described in Section 4.23 of the Cardinal
Disclosure Schedules, and there are no pending claims for indemnification by
any such director, officer or employee.

Section 4.28 Brokers' and Finders' Fee. Except for Simmons & Company
International, no agent, broker, person or firm acting on behalf of Cardinal or
Cardinal Services or the Funds is or will be entitled to any commission or
brokers' or finders' fees payable by Cardinal or Cardinal Services in
connection with any of the transactions contemplated herein.

Section 4.29 No Other Representations or Warranties. There are no
representations or warranties, express or implied, made by or on behalf of
Cardinal, with respect to the assets of Cardinal and Cardinal Services, except
for the representations and warranties contained in this Agreement, including,
except as otherwise specifically provided for in this Agreement, any
representation or warranty with respect to the present condition of Cardinal's
and Cardinal Services' assets or the present or future suitability thereof for
any intended use by SESI. Cardinal and the Funds make no representation or
warranty except as expressly contained in this Agreement (including the
Cardinal Disclosure Schedules).

ARTICLE 5

REPRESENTATIONS AND WARRANTIES OF SESI

SESI represents and warrants to Cardinal and the Funds as follows (each of
the representations and warranties made with respect to SESI, unless stated to
the contrary, includes all of SESI's Subsidiaries).

Section 5.1 Organization; Qualification. Each of SESI and Sub is a
corporation duly organized, validly existing and in good standing under the
laws of the State of Delaware and has the requisite corporate power and
authority to own its property and to carry on its business as it is now being
conducted. No actions or proceedings to dissolve SESI are pending. Copies of
the certificates of incorporation and by-laws of each of SESI and Sub with all
amendments to the date hereof, have been furnished to Cardinal or its
representatives, and such copies are accurate and complete as of the date
hereof. SESI has made available to Cardinal access to the minutes of all
meetings of its board of directors, any committees of such board and
stockholders (and all consents in lieu of such meetings). Such records, minutes
and consents accurately reflect in all material respects all actions taken by
the board of directors, committees and stockholders as of the date hereof.
Neither SESI nor Sub is in violation of any provision of its certificate of
incorporation or bylaws except for any such violations that, in the aggregate,
would not have a Material Adverse Effect on SESI.

Section 5.2 Capital Stock; Subsidiaries.

(a) (i) As of the date of this Agreement, the authorized capital stock of
SESI consists of 40,000,000 shares of SESI Common Stock, of which 28,792,523
shares of SESI Common Stock are issued and outstanding and 474,500 shares are
held in its treasury, and 5,000,000 shares of preferred stock, $.01 par value
per share, none of which are issued and outstanding and none are held in its
treasury. All issued and outstanding shares of SESI Common Stock have been duly
authorized and are validly issued, fully paid and non-assessable.

(ii) Except as set forth in Section 5.2 of the SESI Disclosure
Schedules, there are no outstanding options or other rights to acquire any
shares of SESI Common Stock or any security convertible into SESI Common
Stock and SESI has no obligation or other commitment to issue, sell or
deliver any of the

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foregoing or any shares of SESI Common Stock. Except as set forth in
Section 5.2 of the SESI Disclosure Schedules, no Person has any
registration rights with respect to any of SESI's capital stock.

(iii) All issued and outstanding shares of common stock of SESI's
Subsidiaries have been duly authorized and are validly issued, fully paid
and non-assessable. All outstanding capital stock of SESI's Subsidiaries
are held of record and beneficially by SESI.

(iv) All shares of SESI Common Stock to be issued pursuant to this
Agreement will be, when issued in exchange for shares of Cardinal Common
Stock upon consummation of the Merger, duly authorized, validly issued,
fully paid and non-assessable.

(b) (i) The authorized capital stock of Sub consists of 1,000 shares of
common stock, all of which are issued and outstanding and none are held in its
treasury. All issued and outstanding shares of Sub common stock have been duly
authorized and are validly issued, fully paid and non-assessable and held by
SESI.

(ii) There are no outstanding options or other rights to acquire any shares
of Sub common stock or any security convertible into Sub common stock and Sub
has no obligation or other commitment to issue, sell or deliver any of the
foregoing or any shares of Sub common stock.

(iii) Sub was formed solely for the purpose of engaging in the transactions
contemplated hereby, has engaged in no other business activities and has
conducted its operations only as contemplated hereby.

(c) Section 5.2 of the SESI Disclosure Schedules contains a list of all of
SESI's Subsidiaries. Except for its Subsidiaries, SESI owns, directly or
indirectly, no interest in any other Person.

Section 5.3 Corporate Authorization; Enforceability.

(a) The execution, delivery and performance of this Agreement by SESI has
been duly authorized by the board of directors of SESI. Upon an affirmative
vote of the holders of a majority of the outstanding shares of SESI Common
Stock present or represented at the SESI Annual Meeting approving this
Agreement and the transactions contemplated hereby, no further vote or consent
of stockholders or directors of SESI and no further corporate acts or other
corporate proceedings are required of SESI for the due and valid authorization,
execution, delivery and performance of this Agreement or the consummation of
the Merger.

(b) This Agreement is, and the Stockholders' Agreement and the Registration
Rights Agreements when executed by SESI in accordance with the terms hereof
will be, the legal, valid and binding obligations of SESI enforceable against
it in accordance with their respective terms, except that enforcement may be
limited by applicable bankruptcy, insolvency, reorganization, moratorium and
other similar laws affecting creditors' rights generally and equitable
principles which may limit the availability of certain equitable remedies in
certain instances.

(c) The execution, delivery and performance of this Agreement by Sub has
been duly authorized by the board of directors of Sub and approved by SESI as
sole stockholder of Sub and no further vote or consent of stockholders or
directors of Sub and no further corporate acts or other corporate proceedings
are required of Sub for the due and valid authorization, execution, delivery
and performance of this Agreement or the consummation of the Merger.

Section 5.4 No Conflict. Except as set forth in Section 5.4 of the SESI
Disclosure Schedules, neither the execution, delivery or performance of this
Agreement, the Stockholders' Agreement or the Registration Rights Agreements by
SESI, nor the consummation of the transactions contemplated hereby or thereby,
will (a) if the requisite SESI stockholder approval set forth in Section 5.39a)
is obtained, conflict with or result in any breach of the provisions of the
certificate of incorporation or by-laws of SESI, (b) result in the violation or
breach of, or constitute (with or without due notice or the lapse of time or
both) a default (or give rise to any right of termination, cancellation or
acceleration) under, any of the terms, conditions or provisions of any note,
bond, mortgage, indenture, or any material license, contract, agreement or
other instrument or obligation to which

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SESI is a party or by which its properties or assets may be bound, except for
such violations, breaches or defaults that would not, individually or in the
aggregate, have a Material Adverse Effect on SESI, or (c) violate any order,
writ, injunction, decree, statute, rule or regulation applicable to SESI or any
of its respective properties or assets, except for such violations that, in the
aggregate, would not have a Material Adverse Effect on SESI.

Section 5.5 Consents. Except as set forth in Section 5.5 of the SESI
Disclosure Schedules, no consent, approval, order or authorization of, or
declaration, filing or registration with, any Governmental Entity or other
Person is required to be obtained or made by SESI in connection with the
execution, delivery or performance by SESI of this Agreement or the
consummation by SESI of the transactions contemplated hereby except for (a)
those required by the HSR Act and (b) any filings required to be made under the
Securities Act (i) in connection with the Financing or (ii) in compliance with
the Registration Rights Agreements, (c) the requisite SESI stockholder approval
set forth in Section 5.3(a) and (d) such other consents, approvals, orders,
authorizations, declarations, filings or registrations, the failure of which to
obtain or make would not have, in the aggregate, a Material Adverse Effect on
SESI.

Section 5.6 SESI Financial Statements; Undisclosed Liabilities.

(a) The SESI Annual Financial Statements have been audited by KPMG Peat
Marwick, LLP, independent accountants, in accordance with generally accepted
auditing standards, have been prepared in accordance with GAAP applied on a
basis consistent with prior periods, and present fairly the financial position
of SESI at such dates and the results of operations and cash flows for the
periods then ended.

(b) The SESI Interim Financial Statements have been prepared in accordance
with GAAP on a basis consistent with the prior periods and reflect all
adjustments, consisting only of normal, recurring adjustments, that are
necessary for a fair statement of the results for the interim period presented
therein. Neither SESI nor any of its assets are subject to any liability,
commitment, debt or obligation that would be required to be disclosed in
financial statements prepared in accordance with GAAP, except (i) as and to the
extent reflected on the SESI Interim Financial Statements, or (ii) as may have
been incurred or may have arisen since the date of the SESI Interim Financial
Statements in the ordinary course of business and that are permitted by this
Agreement, or, in the aggregate, would not have a Material Adverse Effect on
SESI.

Section 5.7 Accounts Receivable. All of the accounts receivable reflected on
the SESI Interim Financial Statements or created thereafter (a) have arisen
only from bona fide transactions in the ordinary course of business, (b)
represent valid obligations owing to SESI, (c) except as may be reserved
against in the SESI Interim Financial Statements, are subject to no valid
material counterclaims or setoffs, and (d) have been accrued in accordance with
GAAP. Section 5.7 of the SESI Disclosure Schedules sets forth a summary listing
of all accounts receivable of SESI as of the date specified therein and
reflects receivables aged less than 90 days from the date of invoice as a group
and sets forth all receivables aged more than 90 days individually by customer,
invoice and amount. No representation or warranty is made that any account
receivable will be collected when due or thereafter.

Section 5.8 Absence of Certain Changes.

(a) Since February 28, 1999, SESI has operated in the ordinary course of
business consistent with past practice and there has been no event or condition
of any character that has had, or can reasonably be expected to have, a
Material Adverse Effect on SESI.

(b) Since February 28, 1999, SESI has not taken any actions of a type
referred to in Section 6.10 that would have required the consent of Cardinal if
such action were to have been taken during the period between the date hereof
and the Closing Date.

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Section 5.9 Material Contracts.

(a) Section 5.9 of the SESI Disclosure Schedules contains a list and brief
description (including the names of the parties and the date and nature of the
agreement) of each Material Contract to which SESI is a party or to which any
of its properties is subject. Cardinal has been provided a complete and
accurate copy of each Material Contract listed on Section 5.9 of the SESI
Disclosure Schedules. Each such Material Contract is a legal, valid, binding
and enforceable obligation of SESI except to the extent that enforcement may be
limited by (i) bankruptcy, insolvency, reorganization, moratorium or other
similar laws relating to or affecting the enforcement of creditors' rights
generally and (ii) general equitable principles.

(b) Except as set forth in Section 5.9 of the SESI Disclosure Schedules,
SESI is not in material breach of or default (and, to the Knowledge of SESI, no
event has occurred which, with due notice or lapse of time or both, would
constitute such a breach or default) under any Material Contract except where
any such breaches or defaults, in the aggregate, would not have a Material
Adverse Effect on SESI, and no party to any Material Contract has given SESI
written notice of or made a claim in writing with respect to any breach or
default under any such Material Contract.

Section 5.10 Citizenship. SESI is "a citizen of the United States" within
the meaning of Section 2 of the Shipping Act of 1916, as amended, and is
qualified to own and operate vessels in the coastwise trade.

Section 5.11 Real Property.

(a) Section 5.11 of the SESI Disclosure Schedules sets forth a true and
complete list of all real property owned in fee simple title by SESI
(collectively, the "SESI Owned Properties"). SESI has good and marketable title
to all SESI Owned Properties. None of the SESI Owned Properties is subject to
any Liens, except for (i) Liens that collateralize indebtedness that is
reflected in the SESI Interim Financial Statements and (ii) Permitted Liens.

(b) Except as set forth in Section 5.11 of the SESI Disclosure Schedules,
all improvements on the SESI Owned Properties and the operations therein
conducted conform in all material respects to all applicable health, fire,
safety, zoning and building laws, ordinances and administrative regulations,
except for possible nonconforming uses or violations which do not materially
interfere with the present use, operation or maintenance thereof or access
thereto by SESI, and, individually or in the aggregate, would not otherwise
have a Material Adverse Effect on SESI. The operating condition and state of
repair of all buildings, structures, improvements and fixtures on the SESI
Owned Properties are sufficient to permit the use and operation of all such
buildings, structures, improvements and fixtures as now used or operated by
SESI except where the failure to be in such condition would not have a Material
Adverse Effect on SESI.

Section 5.12 Real Property Leases.

(a) Section 5.12 of the SESI Disclosure Schedules sets forth a list of all
Leases with respect to all real properties in which SESI has a leasehold,
subleasehold, or other occupancy interest (the "SESI Leased Properties").
Complete and accurate copies of all such Leases and all amendments thereto have
been provided to Cardinal. Except as set forth in Section 5.12 of the SESI
Disclosure Schedules, all of the Leases for the SESI Leased Properties are
valid and effective against SESI in accordance with their respective terms,
except that the enforcement thereof may be subject to (i) bankruptcy,
insolvency, reorganization, moratorium or other similar laws affecting or
relating to enforcement of creditors' rights generally and (ii) general
equitable principles.

(b) SESI has not received written notice that it is in material breach of or
default (and, to SESI's Knowledge, no event has occurred, that, with due notice
or lapse of time or both, would constitute such a breach or default) under any
Lease.

(c) Except as set forth in Section 5.12 of the SESI Disclosure Schedules, no
SESI Leased Property is subject to any material sublease, license or other
agreement granting to any Person any right to the use, occupancy or enjoyment
of Leased Property or any portion thereof through SESI.

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Section 5.13 Personal Property.

(a) Except as set forth in Section 5.13 of the SESI Disclosure Schedules,
SESI has good title to all Personal Property owned by SESI, free and clear of
all Liens other than (i) Liens that collateralize indebtedness that is
reflected in the SESI Interim Financial Statements and (ii) Permitted Liens.

(b) Except as set forth in Section 5.13 of the SESI Disclosure Schedules,
SESI holds valid leaseholds in all of the Personal Property leased by it, which
leases are enforceable against SESI in accordance with their respective terms,
except that the enforcement thereof may be subject to (i) bankruptcy,
insolvency, reorganization, moratorium or other similar laws affecting or
relating to enforcement of creditors' rights generally, and (ii) general
equitable principles.

(c) Except as set forth in Section 5.13 of the SESI Disclosure Schedules,
SESI is not in breach of or default (and no event has occurred that, with due
notice or lapse of time or both, would constitute such a lapse or default)
under any lease of any item of Personal Property leased by it, except for any
such breach or default that would not, individually or in the aggregate, have a
Material Adverse Effect on SESI.

(d) Except as set forth in Section 5.13 of the SESI Disclosure Schedules,
the Personal Property now owned, leased or used by SESI is sufficient and
adequate to carry on its business as presently conducted and the operating
condition and the state of repair thereof is sufficient to permit SESI to carry
on its business as presently conducted except where the failure to be in such
condition would not have a Material Adverse Effect on SESI.

Section 5.14 Compliance with Laws. Except as set forth in Sections 5.14,
5.17, 5.22 or 5.23 of the SESI Disclosure Schedules, SESI is not in violation
of any Applicable Law, nor is it in default with respect to any order, writ,
judgment, award, injunction or other decree of any Governmental Entity
applicable to it or any of its respective assets, properties or operations
except such violations or defaults that, in the aggregate, would not have a
Material Adverse Effect on SESI.

Section 5.15 Permits. Except as set forth in Sections 5.15 or 5.17 of the
SESI Disclosure Schedules, SESI has all permits, licenses and governmental
authorizations that are required for the lease, ownership, occupancy or
operation of its properties and assets and the carrying on of its business,
except where the failure to have any such permits, licenses or authorizations
would not, in the aggregate, have a Material Adverse Effect on SESI.

Section 5.16 Litigation.

(a) Except as set forth in Section 5.16 of the SESI Disclosure Schedules,
there are no Proceedings pending or, to the Knowledge of the SESI, threatened,
against SESI (i) for which an indemnification claim has been asserted, (ii)
that could reasonably be expected to have a Material Adverse Effect on SESI or
(iii) that seeks to prohibit or restrict consummation of the transactions
contemplated by this Agreement.

(b) Except as set forth in Section 5.16 of the SESI Disclosure Schedules,
neither SESI nor any of its assets or properties is subject to any material
order, writ, judgment, award, injunction or decree of any Governmental Entity.

Section 5.17 Environmental Compliance.

(a) Except as set forth in Section 5.17 of the SESI Disclosure Schedules, to
the Knowledge of SESI, SESI possesses all licenses, permits and other approvals
and authorizations that are required under, and at all times for the past two
years has been in compliance with, all Environmental Laws, including all
Environmental Laws governing the generation, use, collection, treatment,
storage, transportation, recover, removal, discharge or disposal of hazardous
substances or wastes and all Environmental Laws imposing record-keeping,
maintenance, testing, inspection, notification and reporting requirements with
respect to hazardous substances or wastes except where noncompliance would not,
individually or in the aggregate, have a Material Adverse Effect on

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SESI, and, to the Knowledge of SESI, there is no condition that would
materially interfere with compliance in the future.

(b) Except as set forth in Section 5.17 of the SESI Disclosure Schedules,
for the past two years SESI has not been subject to any Proceeding pursuant to,
nor has it received any notice of any violation of, or claim alleging liability
under, any Environmental Laws. To the Knowledge of SESI, no facts or
circumstances exist that would reasonably be likely to result in a claim,
citation or allegation against SESI for a violation of, or alleging liability
under any Environmental Laws, except such violations or liabilities that would
not, individually or in the aggregate, have a Material Adverse Effect on SESI.

(c) Except as set forth in Section 5.17 of the SESI Disclosure Schedules, to
the Knowledge of SESI, there are no underground tanks of any type (including
tanks storing gasoline, diesel fuel, oil or other petroleum products) or
disposal sites for hazardous substances, hazardous wastes or any other
regulated waste, located on or under the SESI Owned Properties or SESI Leased
Properties.

(d) Except as set forth in Section 5.17 of the SESI Disclosure Schedules, to
the Knowledge of SESI, except in the ordinary course of business, and in all
cases in material compliance with all Environmental Laws, SESI has not engaged
any third party to handle, transport or dispose of hazardous substances or
wastes (including for this purpose, gasoline, diesel fuel, oil or other
petroleum products, or bilge waste) on its behalf.

Section 5.18 ERISA and Related Matters.

(a) Section 5.18 of the SESI Disclosure Schedules provides a list of each of
the following which SESI or any corporation, trade, business or entity under
common control with SESI within the meaning of section 414(b), (c), (m) or (o)
of the Code sponsors, maintains or contributes to, or has contingent liability
with respect thereto for the benefit of its current or former employees,
officers or directors as of the Closing Date:

(i) each Employee Plan; and

True and complete copies of each of the Employee Plans, SESI Benefit
Programs or Agreements, current summary plan descriptions, related trusts, if
applicable, and all amendments thereto, have been or on request will be
furnished to Cardinal. Further, a copy of the most recent annual report, if
applicable, for each Employee Plan, SESI Benefit Program or Agreement and all
material communications received from or sent to the Internal Revenue Service
or the Department of Labor in the last two years regarding any Employee Plan,
SESI Benefit Program or Agreement will be provided to Cardinal upon request.

(b) Benefits under any Employee Plan or SESI Benefit Program or Agreement
are as represented in said documents and have not been increased or modified
(whether written or not written) subsequent to the dates of such documents.
SESI has not communicated to any employee or former employee any intention or
commitment to modify any Employee Plan or SESI Benefit Program or Agreement or
to establish or implement any other employee or retiree benefit or compensation
arrangement.

(c) Neither SESI nor any trade or business under common control with SESI
within the meaning of Section 414(b) or (c) of the Code prior to the Closing
Date maintains or has never maintained or become obligated to contribute to any
employee benefit plan (i) that is subject to Title IV of ERISA, (ii) to which
Section 412 of the Code applies, (iii) that is a Multiemployer Plan, or (iv) in
connection with any trust described in Section 501(c)(9) of the Code. SESI has
not within the last five years engaged in, and is not a successor corporation
to an entity that has engaged in, a transaction described in Section 4069 of
ERISA.

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(d) Except as otherwise set forth in Section 5.18 of the SESI Disclosure
Schedules:

(i) each Employee Plan and each SESI Benefit Program or Agreement has
been administered, maintained and operated in all material respects in
accordance with the terms thereof and in compliance with its governing
documents and Applicable Law (including where applicable, ERISA and the
Code);

(iii) no act, omission or transaction has occurred which would result in
the imposition on SESI of a breach of fiduciary duty liability or damages
under Section 409 of ERISA, a civil penalty assessed pursuant to
Subsections (c), (i) or (l) of Section 502 of ERISA or a Tax imposed
pursuant to Chapter 43 of Subtitle D of the Code;

(iv) neither SESI nor any of its directors, officers or employees has
engaged in any transaction with respect to an Employee Plan that could
subject SESI to a Tax, penalty or liability for a prohibited transaction,
as defined in Section 406 of ERISA or Section 4975 of the Code. None of the
assets of any Employee Plan are invested in employer securities or employer
real property.

(v) full payment has been made of all amounts which SESI is or has been
required to have paid as contributions to or benefits due under any
Employee Plan or SESI Benefit Program or Agreement under Applicable Law or
under the terms of any such plan or any arrangement; and

(vi) there is no Proceeding or other dispute pending or, to the
Knowledge of SESI, threatened that involves any Employee Plan or SESI
Benefit Program or Agreement that could reasonably be expected to result in
a material liability to SESI.

(e) In connection with the consummation of the transactions contemplated in
this Agreement, no employee or former employee of SESI will become entitled to
any bonus, retirement, severance, job security or similar benefit or enhanced
benefit (including acceleration of an award, vesting or exercise of an
incentive award) or any fee or payment of any kind solely as a result of any of
the transactions contemplated hereby, and no such disclosed payment constitutes
a parachute payment described in Section 280G of the Code.

(f) All group health plans of SESI have at all times fully complied in all
material respects with all applicable notification and continuation of coverage
requirements of Section 4980B(f) of the Code and Section 601 of ERISA. SESI
does not have any current or projected liability in respect of post-retirement
or post-employment welfare benefits for retired, current or former employees,
or for any stockholder or director who is not an employee, former employee or
beneficiary thereof, except to the extent otherwise required by the
continuation requirements of Section 4980B(f) of the Code and Section 601 of
ERISA.

(g) All group health plans (within the meaning of Section 5000(b)(1) of the
Code) of SESI have at all times fully complied in all material respects with,
and have been maintained and operated in all material respects in accordance
with (i) the health care requirements relating to portability, access, and
renewability requirements of Sections 9801 through 9803 of the Code and Part 7
of Title I, Subtitle B of ERISA, (ii) the health care requirements relating to
the benefits for mothers and newborns under Section 9811 of the Code and
Section 711 of ERISA, and (iii) the health care requirements relating to the
parity provisions applicable to mental health benefits under Section 9812 of
the Code and Section 712 of ERISA.

(h) No employee or former employee, officer or director of SESI is or will
become entitled to receive any award under SESI's discretionary or other bonus
plans except for amounts reflected on the SESI Financial Statements.

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Section 5.19 Taxes.

(a) Except as set forth in Section 5.19 of the SESI Disclosure Schedules,
all Returns required to be filed by or on behalf of SESI have been duly filed
and such Returns (including all attached statements and schedules) are true,
complete and correct in all material respects. All Taxes due have been paid in
full on a timely basis, and no other Taxes are payable by SESI with respect to
items or periods covered by such Returns (whether or not shown on or
reportable on such Returns) or with respect to any period prior to the Closing
Date.

(b) Except as set forth in Section 5.19 of the SESI Disclosure Schedules,
SESI has withheld and paid over all Taxes required to have been withheld and
paid over (including any estimated taxes and Taxes pursuant to Section 1441 or
1442 of the Code or similar provisions under any foreign law), and has
complied in all material respects with all information reporting and backup
withholding requirements, including maintenance of required records with
respect thereto, in connection with amounts paid or owing to any employee,
creditor, independent contractor, or other third party.

(c) Except as set forth in Section 5.19 of the SESI Disclosure Schedules,
there are no Liens on any of the assets of SESI with respect to Taxes, other
than Permitted Liens.

(d) SESI has furnished or made available to Cardinal true and complete
copies of: (i) all federal and state income and franchise tax returns of SESI
for all periods beginning on or after January 1, 1996, and (ii) all tax audit
reports, work papers, statements of deficiencies, closing or other agreements
received by SESI or on its behalf relating to Taxes for all periods beginning
on or after January 1, 1996.

(e) Except as disclosed in Section 5.19 of the SESI Disclosure Schedules:

(i) The Returns of SESI have never been audited by a Governmental
Entity, nor is any such audit in process, pending or, to the Knowledge of
the SESI, threatened (formally or informally) except with respect to
Returns where audits have been concluded or for Periods for which the
applicable statutes of limitations have not run.

(ii) No deficiencies exist or have been asserted (either in writing or
verbally, formally or informally) or, to the Knowledge of SESI, are
expected to be asserted with respect to Taxes of SESI and no notice (either
formal or informal) has been received by SESI that it has not filed a
Return or paid Taxes required to be filed or paid by it.

(iii) SESI is not a party to any pending Proceeding for assessment or
collection of Taxes, nor has such Proceeding been asserted or, to the
Knowledge of the SESI, threatened (either formally or informally), against
it or any of its assets.

(iv) Except as reflected in the Returns, no waiver or extension of any
statute of limitations is in effect with respect to Taxes or Returns of
SESI.

(v) There are no requests for rulings, subpoenas or requests for
information pending with respect to SESI.

(vi) No power of attorney has been granted by SESI with respect to any
matter relating to Taxes.

(vii) The amount of liability for unpaid Taxes of SESI for all periods
ending on or before the Closing Date will not, in the aggregate, exceed the
amount of the current liability accruals for Taxes (excluding reserves for
deferred taxes), as such accruals are reflected on the consolidated balance
sheet of SESI as of the Closing Date.

(f) Except as disclosed in Section 5.19 of the SESI Disclosure Schedules:

(i) SESI has not issued or assumed any indebtedness that is subject to
section 279(b) of the Code.

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(ii) SESI has not entered into any compensatory agreements with respect
to the performance of services which payment thereunder would result in a
nondeductible expense pursuant to Section 280G or 162(m) of the Code or an
excise tax to the recipient of such payment pursuant to Section 4999 of the
Code.

(iii) No election has been made under Section 338 of the Code with
respect to SESI and no action has been taken that would result in any
income tax liability to either SESI as a result of deemed election within
the meaning of Section 338 of the Code.

(iv) No consent under Section 341(f) of the Code has been filed with
respect to SESI.

(v) SESI has not agreed, nor is it required, to make any adjustment
under Code Section 481(a) by reason of a change in accounting method or
otherwise.

(vi) SESI has not disposed of any property that has been accounted for
under the installment method.

(vii) SESI has not made any of the foregoing elections and is not
required to apply any of the foregoing rules under any comparable state or
local income tax provisions.

(viii) SESI is not a party to any tax sharing or allocation agreement
nor does SESI owe any amount under any tax sharing or allocation agreement.

(ix) SESI has never been (nor has any liability for unpaid Taxes because
it once was) a member of an affiliated group within the meaning of Section
1502 of the Code during any part of any consolidated return year during any
part of which year any corporation other than SESI was also a member of
such affiliated group.

(g) SESI is not an investment company. For purposes of this representation,
the term "investment company" means a regulated investment company, a real
estate investment trust, or a corporation 50% or more of the value of whose
total assets are stock and securities and 80% or more of the value of whose
total assets are assets held for investment. In making the 50% and the 80%
determinations under the preceding sentence, stock and securities in any
subsidiary corporation will be disregarded and the parent corporation will be
deemed to own its ratable share of the subsidiary's assets.

(h) SESI is not under the jurisdiction of a court in a Title 11 or similar
case within the meaning of Section 368(a)(3)(A) of the Code.

Section 5.20 Customers and Suppliers. Section 5.20 of the SESI Disclosure
Schedules sets forth a complete and correct list of all customers whose
purchases exceeded 5% of the aggregate net sales of SESI for the fiscal year
ended December 31, 1998.

Section 5.21 Insurance.

(a) Section 5.21 of the SESI Disclosure Schedules sets forth a true and
complete list of all policies of machinery insurance, increased value,
protection and indemnity, title insurance, liability and casualty insurance,
property insurance, auto insurance, business interruption insurance, tenant's
insurance, workers' compensation, life insurance, disability insurance, excess
or umbrella insurance, directors' and officers' liability insurance and any
other type of insurance insuring the properties, assets, employees or
operations of SESI (collectively the "SESI Policies"). SESI has made available
to Cardinal a true, complete and accurate copy of all SESI Policies.

(b) All SESI Policies are in full force and effect except where failures to
have any SESI Policies in full force and effect would not in the aggregate,
have a Material Adverse Effect on SESI.

(c) Except as described in Section 5.21 of the SESI Disclosure Schedules,
there is no claim by SESI or any other Person pending under any of the SESI
Policies as to which coverage has been denied or disputed by the underwriters
or issuers of such SESI Policies. SESI has not received any notice of default,
and is not in default, under any provision of the SESI Policies.

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(d) SESI has not since January 1, 1999 received any written notice from or
on behalf of any insurance carrier or other issuer issuing such SESI Policies
that insurance rates or other annual premiums or fees in effect as of the date
hereof will hereafter be materially increased, that there will be a non-
renewal, cancellation or increase in a deductible (or a material increase in
premiums in order to maintain an existing deductible) of any of the SESI
Policies in effect as of the date hereof, or that material alteration of any
equipment or any improvements to the SESI Owned Properties or the SESI Leased
Properties, purchase of additional material equipment, or material modification
of any of the methods of doing business of SESI will be required after the date
hereof.

Section 5.22 Safety and Health. To the Knowledge of SESI, the property and
assets of SESI have been and are being operated in compliance in all respects
with all Applicable Laws designed to protect safety or health, or both,
including without limitation, the Occupational Safety and Health Act, and the
regulations promulgated pursuant thereto, except for any violations or
deficiency that would not have a Material Adverse Effect on SESI. SESI has not
received any written notice of any violations, deficiency, investigation or
inquiry from any Governmental Entity, employer or third party under any such
law and, to the Knowledge of SESI, no such investigation or inquiry is planned
or threatened, which, if adversely determined would, individually or in the
aggregate, have a Material Adverse Effect on SESI.

Section 5.23 Labor Matters.

(a) Set forth in Section 5.23 of the SESI Disclosure Schedules is a list of
all: (i) outstanding employment, consulting or management agreements or
contracts with officers, directors or employees of SESI (other than those that
are terminable on no more than 30 days notice) that provide for the payment of
any bonus or commission; (ii) agreements, policies or practices that require
SESI to pay termination or severance pay to salaried, non-exempt or hourly
employees in excess of 30 days' salary and benefits to any employee upon
termination of such employee's employment (other than as required by law); and
(iii) collective bargaining agreements or other labor union contracts
applicable to persons employed by SESI. SESI has made available to Cardinal
complete and correct copies of all such employment and labor agreements. SESI
has not breached or otherwise failed to comply in any material respect with any
provisions of any employment or labor agreement, and there are no grievances
outstanding thereunder.

(b) Except as set forth in Section 5.23 of the SESI Disclosure Schedules:
(i) SESI is in compliance in all material respects with all Applicable Laws
relating to employment and employment practices, wages, hours, and terms and
conditions of employment; (ii) there is no unfair labor practice charge or
complaint against SESI pending before any Governmental Entity; (iii) there is
no labor strike, material slowdown or material work stoppage or lockout
actually pending or, to the Knowledge of SESI threatened, against or affecting
SESI; (iv) there is no representation claim or petition pending before any
Governmental Entity; (v) there are no charges with respect to or relating to
SESI pending before any Governmental Entity responsible for the prevention of
unlawful employment practices; and (vi) SESI has not had formal notice from any
Governmental Entity responsible for the enforcement of labor or employment laws
of an intention to conduct an investigation of SESI and, to the Knowledge of
SESI, no such investigation is in progress.

Section 5.24 Transactions with Certain Persons. Except as set forth in
Section 5.24 of the Disclosure Schedules, no director, officer or employee of
SESI or any of its respective Affiliates is presently a party to any
transaction with SESI, including any contract, agreement or other arrangement
providing for the furnishing of services by or the rental of real or personal
property from any such Person or from any of its Affiliates.

Section 5.25 Propriety of Past Payments. Neither SESI or any of its
Subsidiaries nor any director, officer, employee or agent of SESI or any of its
Subsidiaries has (a) used any funds for unlawful contributions, gifts,
entertainment or other unlawful payments or expenses relating to political
activity or (b) made any bribe, rebate, payoff, influence payment, kick-back or
other unlawful payment that is in violation of Applicable Law.

Section 5.26 Intellectual Property. SESI either owns or has valid licenses
to use all patents, copyrights, trademarks, software, databases, and other
technical information used in its business as presently conducted,

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subject to limitations contained in the agreements governing the use of same,
which limitations are customary for companies engaged in businesses similar to
SESI. SESI is in compliance with all such licenses and agreements except where
any noncompliance would not, in the aggregate, have a Material Adverse Effect
on SESI and there are no pending or, to the Knowledge of SESI, threatened
Proceedings challenging or questioning the validity or effectiveness of any
license or agreement relating to such property or the right of SESI to use,
copy, modify or distribute the same.

Section 5.27 Director and Officer Indemnification. The directors, officers
and employees of SESI are not entitled to indemnification by SESI except to the
extent that indemnification rights are provided for generally by Applicable Law
or SESI's charter, by-laws or directors' and officers' liability insurance
policies as described in Section 5.21 of the SESI Disclosure Schedules or in
employment agreements described in Section 5.23 of the SESI Disclosure
Schedules, and there are no pending claims for indemnification by any such
director, officer or employee.

Section 5.28 Brokers' and Finders' Fee . Except for the firm of Johnson Rice
& Company LLC, no agent, broker, person or firm acting on behalf of SESI is or
will be entitled to any commission or brokers' or finders' fees payable by SESI
in connection with any of the transactions contemplated herein.

Section 5.29 Commission Filings: Financial Statements. SESI has timely filed
all reports, registration statements and other filings, together with any
amendments required to be made with respect thereto, that it has been required
to file with the SEC under the Securities Act and the Exchange Act. All
reports, registration statements and other filings (including all notes,
exhibits and schedules thereto and documents incorporated by reference therein)
filed by SESI with the SEC since January 1, 1997 through the date of this
Agreement, together with any amendments thereto, are sometimes collectively
referred to as the "SESI Commission Filings." As of the respective dates of
their filing with the Commission, the SESI Commission Filings complied in all
material respects with the Securities Act or the Exchange Act, as applicable,
and the rules and regulations of the SEC thereunder, and did not contain any
untrue statement of a material fact or omit to state a material fact required
to be stated therein or necessary to make the statements made therein, in light
of the circumstances under which they were made, not misleading.

Section 5.30 Takeover Laws. The Board of Directors of Superior has taken all
action required to be taken by it in order to exempt this Agreement, and the
transactions contemplated hereby from, and this Agreement and the transactions
contemplated hereby are exempt from, the requirements of any "moratorium,"
"control share," "fair price," "affiliate transaction," "business combination"
or other antitakeover laws and regulations of any state, including, without
limitation, the State of Delaware, and including, without limitation, Section
203 of the DGCL and as a result, any requirements of such antitakeover laws and
regulations are inapplicable to this Agreement and the transactions
contemplated by this Agreement.

Section 5.31 No Other Representations or Warranties. There are no
representations or warranties, express or implied, made by or on behalf of SESI
with respect to the assets of SESI except for the representations and
warranties contained in this Agreement, including, except as otherwise
specifically provided for in this Agreement, any representation or warranty
with respect to the present condition of SESI's assets or the present or future
suitability thereof for any intended use by SESI. SESI makes no representation
or warranty except as expressly contained in this Agreement (including the SESI
Disclosure Schedules).

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ARTICLE 6

COVENANTS

Section 6.1 Legal Requirements. Subject to the conditions set forth in
Section 7 and to the other terms and provisions of this Agreement, each of the
parties to this Agreement agrees to take, or cause to be taken, all reasonable
actions necessary to comply promptly with all legal requirements applicable to
it with respect to the transactions contemplated by this Agreement and will
promptly cooperate with and furnish information to each other in connection
with any such requirements imposed upon any of them. Without limiting the
preceding sentence, each of SESI, Cardinal and the Funds agrees to take all
reasonable actions necessary to (a) obtain, and cooperate with each other in
obtaining, any consent, authorization, order or approval of, or any exemption
by, any Governmental Entity or other public or private party, required to be
obtained or made by it or the taking of any action contemplated by this
Agreement, including, without limitation, preparation of any registration
statement under the Securities Act that may be filed in connection with the
Financing, and (b) effect the Merger at the earliest possible date.

Section 6.2 Stockholder Approvals.

(a) As soon as practicable following the date of this Agreement, SESI shall
convene an annual meeting of its stockholders (the "SESI Annual Meeting") for
the purposes of: (i) approving the adoption of this Agreement, (ii) approving
the amendment of SESI's certificate of incorporation to (A) increase the number
of authorized shares of SESI Common Stock to 125 million shares and (B) impose
limits on ownership of SESI Common Stock by non-U.S. citizens as required by
Section 2 of the Shipping Act of 1916, as amended (the "Charter Amendment"),
(iii) approving the SESI Stock Incentive Plan, and (iv) electing the slate of
directors as shall have been nominated pursuant to the procedures described in
Section 6.2(b) hereof to the Board of Directors of SESI. Subject to the terms
and conditions of Section 6.13, the Board of Directors of SESI shall (i)
recommend at such SESI Annual Meeting that the stockholders of SESI adopt and
approve all such matters; (ii) use its reasonable efforts to solicit from the
stockholders of SESI proxies in favor of such adoption and approval; and (iii)
take all other actions reasonably necessary to secure a vote of its
stockholders in favor of adoption and approval of all such other matters. SESI
shall give notice to Cardinal and the Funds by facsimile transmission of the
outcome of the vote of its stockholders no later than the end of business on
the day of the SESI Annual Meeting.

(b) Prior to the SESI Annual Meeting, the Board of Directors of SESI shall
nominate a slate of directors to be elected at the SESI Annual Meeting which
shall consist of (i) two individuals designated by SESI, one of whom shall be
the Chief Executive Officer of SESI, (ii) two individuals designated by
Cardinal, and (iii) two individuals who shall be independent of both SESI and
Cardinal and who shall be designated by Cardinal. If at any time prior to the
Effective Time any individual who is nominated pursuant to the provisions
hereof shall be unable or unwilling to serve as a director at the Effective
Time, the party that designated such individual as provided herein shall
designate a replacement for such individual.

(c) As soon as practicable after the date of this Agreement, Cardinal shall
submit this Agreement for approval by the Cardinal Stockholders at either a
special meeting of stockholders or by written consent in lieu of a meeting.
Subject to the terms and conditions of Section 6.12 hereof, the Board of
Directors of Cardinal shall recommend that the Cardinal Stockholders approve
the adoption of this Agreement and take all other actions reasonably necessary
to secure a vote of the Cardinal Stockholders in favor of adoption of this
Agreement. Cardinal shall give notice to SESI by facsimile transmission of the
outcome of the vote of the Cardinal Stockholders, no later than the end of
business on the day the special meeting is held or the consent is executed.

(d) In connection with the stockholder approvals provided for herein, each
party agrees to cooperate with the other and take all actions reasonably
necessary or appropriate to obtain such approvals.

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(e) In the event the SESI stockholders approve the SESI Stock Incentive Plan
and the Charter Amendment at the SESI Annual Meeting, SESI shall adopt the SESI
Stock Incentive Plan and shall cause the Charter Amendment to be effected in
accordance with the DGCL.

Section 6.3 Proxy Statement.

(a) As soon as practicable after the date of this Agreement, SESI shall
prepare and file with the Commission under the Exchange Act, and shall use its
reasonable efforts to have cleared by the Commission, a proxy statement with
respect to the SESI Annual Meeting (the "Proxy Statement"). SESI shall cause
the Proxy Statement (except with respect to information concerning Cardinal and
Cardinal Services furnished in writing by or on behalf of Cardinal specifically
for use therein, for which information Cardinal shall be responsible) to comply
as to form in all material respects with the requirements of the Exchange Act
and the rules and regulations adopted thereunder, and the Proxy Statement
(except with respect to the information concerning Cardinal furnished in
writing by or on behalf of Cardinal specifically for use therein, for which
information Cardinal shall be responsible) to not contain any untrue statement
of a material fact or omit to state a material fact required to be stated
therein necessary to make the statements therein not misleading. SESI will
advise Cardinal promptly in writing if prior to the Closing Date it shall
obtain Knowledge of any facts that would make it necessary to amend or
supplement the Proxy Statement in order to make the statements therein not
misleading or to comply with Applicable Law.

(b) In connection with the Proxy Statement, Cardinal shall cooperate in good
faith and take all actions reasonably necessary or appropriate, including
providing necessary information with respect to Cardinal, to assist SESI in
preparing the Proxy Statement.

(c) None of the information to be supplied by Cardinal for inclusion in the
Proxy Statement will, (i) at the time the Proxy Statement is filed, (ii) at the
time the Proxy Statement, or any amendment or supplement thereto, is first
mailed to the stockholders of SESI, or (iii) at the time such stockholders vote
on approval and adoption of this Agreement, contain any untrue statement of a
material fact or omit to state any material fact required to be made therein or
necessary in order to make the statements made therein, in light of the
circumstances under which they were made, not misleading.

Section 6.4 Equity Contribution to Cardinal.

(a) In March 1999, Cardinal completed an offering of $5 million of equity to
the current holders of Cardinal Common Stock and Cardinal Preferred Stock (the
"March Contribution"). Between the date hereof and the Closing Date, Cardinal
shall complete an offering (or offerings) of an aggregate of $45 million of
equity to the current holders of Cardinal Common Stock and Cardinal Preferred
Stock or other institutional investors on a private placement basis (the
"Equity Contribution"), all of the net proceeds of which Equity Contribution
and March Contribution shall be used to reduce Cardinal's indebtedness at
Closing, and Section 3.1 of the Cardinal Disclosure Schedules shall be amended
accordingly to reflect the results of such Equity Contribution. Prior to
Cardinal's accepting the Equity Contribution, Cardinal and the Funds shall
notify SESI of the terms and conditions of the proposed Equity Contribution,
and Cardinal shall not accept such Equity Contribution unless its terms and
conditions are reasonably acceptable to SESI.

(b) In connection with the Equity Contribution SESI shall cooperate in good
faith and take all actions reasonably necessary or appropriate, including
providing necessary information with respect to SESI, to assist Cardinal in
completing the offering in connection with the Equity Contribution, including
(i) providing prompt assistance in the preparation of an offering or
information memorandum and other materials for the Equity Contribution, (ii)
providing all information about SESI reasonably deemed necessary by Cardinal to
complete the Equity Contribution, (iii) assisting the participants in the
Equity Contribution in connection with their confirmation of the accuracy and
completeness of the materials and information referenced in clauses (i) and
(ii) above, and (iv) causing SESI's senior management to participate in
meetings and conference calls with potential participants in the Equity
Contribution at such times and places as Cardinal may reasonably request.

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Section 6.5 Financing.

(a) Prior to the Closing, SESI shall obtain a new credit facility, which may
be in the form of an offering of senior notes, or secured or unsecured bank
debt, or any other form reasonably satisfactory to Cardinal and the Funds,
containing usual and customary covenants, and on terms that are mutually agreed
upon by SESI and Cardinal, in a principal amount (the "Financing") that will
produce proceeds sufficient to repay or refinance the indebtedness referred to
in Section 6.6 hereof.

(b) Cardinal and Cardinal Services agree to provide, and will cause their
respective officers, employees and advisors to provide, all reasonable
cooperation in connection with the arrangement of the Financing, including (i)
providing prompt assistance in the preparation of any offering or information
memorandum and other offering materials for the Financing, (ii) providing all
information reasonably deemed necessary by any syndication agent to complete
the Financing, (iii) assisting the providers of the Financing in connection
with their confirmation of the accuracy and completeness of the materials and
information referenced in clauses (i), (ii) above, and (iv) causing Cardinal's
and Cardinal Services' senior management to participate in meetings and
conference calls with potential participants in the Financing at such times and
places as any syndication agent for the Financing may reasonably request.

Section 6.6 Repayment of Certain Indebtedness. Prior to the Closing, SESI
shall either repay or refinance all outstanding indebtedness (together with any
applicable premium) of Cardinal and Cardinal Services specified in Section 6.6
of the Cardinal Disclosure Schedules and the indebtedness of SESI specified in
Section 6.6 of the SESI Disclosure Schedules, together with all accrued and
unpaid interest thereon, with the proceeds of the Financing and the Equity
Contribution.

Section 6.7 Hart-Scott-Rodino.

(a) Cardinal, the Funds and SESI shall cooperate in good faith and take all
actions reasonably necessary or appropriate to file, and expeditiously and
diligently prosecute to a favorable conclusion, the HSR Forms required to be
filed by each of them in connection herewith with the Federal Trade Commission
and the Department of Justice pursuant to the HSR Act.

(b) Cardinal, the Funds and SESI agree that from the date of this Agreement
through the Effective Time, neither party nor any of its subsidiaries or
Affiliates shall enter into any transaction with a third party or take any
other action that would have the effect of impeding the ability to obtain HSR
Act clearance for the transactions contemplated by this Agreement.

Section 6.8 Access to Properties and Records. Until the Closing Date, each
of SESI and Cardinal shall, and shall cause each of its Subsidiaries to, allow
the other party and its authorized representatives full access, during normal
business hours and on reasonable notice, to all of its properties, offices,
vehicles, equipment, inventory and other assets, documents, files, books and
records, in order to allow the other party a full opportunity to make such
investigation and inspection as the other party desires of its business and
assets. Each of SESI and Cardinal shall, and shall cause each of its
Subsidiaries to, (a) further use its reasonable best efforts to cause its
employees, counsel and regular independent certified public accountants to be
available upon reasonable notice to answer questions of the other party's
representatives concerning its business and affairs and (b) further use its
reasonable best efforts to cause them to make available all relevant books and
records in connection with such inspection and examination, including without
limitation work papers for all audits and reviews of its financial statements.

Section 6.9 Consultation and Reporting. During the period from the date of
this Agreement to the Closing Date, each of Cardinal and SESI will, subject to
any applicable legal or contractual restrictions, confer on a regular and
frequent basis with the other to report material operational matters and to
report on the general status of ongoing operations. Each of Cardinal and SESI
will notify the other of any unexpected emergency or other change in the normal
course of its business or in the operation of its properties and of any
governmental complaints, investigations, adjudicatory proceedings or hearings
(or communications indicating that the same

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may be contemplated) and will keep the other fully informed of such events and
permit its representatives prompt access to all materials prepared by or on
behalf of such party or served on them, in connection therewith. Immediately
following the Effective Time, the Funds shall escrow or cause to be escrowed
892,000 shares of SESI Common Stock in accordance with the terms of the
Settlement Agreement.

Section 6.10 Conduct of Business By Both Parties Prior to the Closing Date .
During the period from the date of this Agreement to Closing Date, Cardinal and
SESI shall each use its reasonable best efforts to preserve the goodwill of
suppliers, customers and others having business relations with it and its
Subsidiaries and to do nothing knowingly to impair its ability to keep and
preserve its business as it exists on the date of this Agreement. Without
limiting the generality of the foregoing, except as otherwise specifically
provided in this Agreement, during the period from the date of this Agreement
to the Closing Date neither SESI (and SESI shall cause its Subsidiaries not to)
nor Cardinal shall (and Cardinal shall cause Cardinal Services not to), without
the prior written consent of the other:

(a) except for dividends that Cardinal may be required to pay in kind
pursuant to obligations set forth in Section 4.2 of the Disclosure
Schedule, declare, set aside, increase or pay any dividend (including any
stock dividends), or declare or make any distribution on, or directly or
indirectly combine, redeem, reclassify, purchase, or otherwise acquire, any
shares of its capital stock;

(b) other than as contemplated by Section 6.2 hereof or as described in
Section 6.10 of the Cardinal Disclosure Schedules, amend its certificate or
articles of incorporation or by-laws, or adopt or amend any resolution or
agreement concerning indemnification of its directors, officers, employees
or agents;

(c) commit any act which act would cause any representation or warranty
contained in this Agreement to become untrue in any material respect, as if
each such representation and warranty were continuously made from and after
the date hereof;

(d) violate any Applicable Law that would have a Material Adverse Effect
on such party;

(e) fail to maintain its books, accounts and records in the usual manner
on a basis consistent with that heretofore employed in all material
respects;

(f) fail to pay, or to make adequate provision in all material respects
for the payment of, all Taxes, interest payments and penalties due and
payable (for all periods up to the Closing Date, including that portion of
its fiscal year to and including the Closing Date) to any city, parish,
state, the United States, foreign or any other taxing authority, except
those being contested in good faith by appropriate proceedings and for
which sufficient reserves have been established, or make any elections with
respect to Taxes;

(g) make any material change in the conduct of its businesses and
operations or enter into any transaction other than in the ordinary course
of business consistent with past practices;

(h) except for the Equity Contribution and the conversion, if any, of
Cardinal Preferred Stock into Cardinal Common Stock in accordance with
Section 7.1(l) hereof, issue any additional shares of capital stock or
equity securities or grant any option, warrant or right to acquire any
capital stock or equity securities; issue any security convertible into or
exchangeable for its capital stock; alter any material term of any of its
outstanding securities or make any change in its outstanding shares of
capital stock or other ownership interests or its capitalization, whether
by reason of exchange or readjustment of shares, stock dividend or
otherwise; provided, however, that SESI may issue shares of SESI Common
Stock pursuant to the exercise of options, if any, set forth in Section 5.2
of the SESI Disclosure Schedules, and Cardinal may issue shares of Cardinal
Common Stock and Cardinal Preferred Stock pursuant to obligations set forth
in Section 4.2 of the Cardinal Disclosure Schedules;

(i) except for the Financing, incur, assume or guarantee any
indebtedness for borrowed money or any other obligation of any other
Person, issue any notes, bonds, debentures or other corporate debt
securities or grant any option, warrant or right to purchase any thereof
other than for working capital under an existing line of credit and to fund
capital expenditures disclosed in such party's Disclosure Schedules;

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(j) make any sale, assignment, transfer, abandonment or other conveyance
of any of its material assets or any part thereof, except transactions
pursuant to existing contracts set forth in such party's Disclosure
Schedules and dispositions of worn-out or obsolete equipment for fair or
reasonable value in the ordinary course of business consistent with past
practices;

(k) subject any of its assets or properties to a Lien other than a
Permitted Lien;

(l) make or commit to make capital expenditures that in the aggregate
are in excess of $500,000 except as described in Section 6.10(l) of either
party's Disclosure Schedules;

(m) except for loans by Cardinal to Cardinal Services or by SESI to one
or more of its Subsidiaries, make any loan, advance or capital contribution
to or investment in, or sell, transfer or lease any properties or assets
to, or enter into any agreement or arrangement with, any of its Affiliates
other than in the ordinary course of business;

(n) make any change in any method of accounting or accounting principle,
method, estimate or practice except for any such change required by reason
of a concurrent change in generally accepted accounting principles or write
down the value of any inventory or write off as uncollectible any accounts
receivable except in the ordinary course of business consistent with past
practices;

(o) enter into or modify any employment, severance or similar agreement
or arrangement with any director or employee, or grant any increase in the
rate of wages, salaries, bonuses or other compensation or benefits of any
executive officer or other employee other than increases in wages,
salaries, bonuses, compensation or benefits (i) required by contracts,
agreements, policies or collective bargaining agreements set forth in
Sections 4.2, 4.18 and 4.23 of the Cardinal Disclosure Schedules with
respect to Cardinal and Cardinal Services, and Sections 5.18 and 5.23 of
the SESI Disclosure Schedules with respect to SESI, or (ii) to field or
operating employees made in the ordinary course of business;

(p) enter into any new line of business;

(q) make any Tax election that is inconsistent with any corresponding
election made on a prior Return or settle or compromise any Tax liability
for an amount in excess of the liability therefor that is reflected on the
Cardinal Financial Statements or the SESI Financial Statements, as the case
may be; or

(r) authorize any of, or agree or commit to do any of, the foregoing
actions.

Section 6.11 Public Statements. Prior to the Closing Date, none of the
parties to this Agreement shall (and each party shall use its best efforts so
that none of its advisors, officers, directors or employees shall) except with
the prior consent of the other parties, which consent shall not be unreasonably
withheld, publicize, announce or describe to any third person (except their
respective advisors and employees) the execution or terms of this Agreement,
the parties hereto or the transactions contemplated hereby, except that SESI
may make such disclosures and announcements as may be necessary or advisable
under applicable securities laws after giving reasonable prior notice to
Cardinal of any such disclosure or announcement and allowing Cardinal to
comment on the same.

Section 6.12 No Solicitation.

(a) None of SESI and its Subsidiaries, Cardinal and Cardinal Services will
(nor will they permit any of their respective Affiliates, officers, directors,
representatives, or agents to), prior to the earlier of the Closing Date or the
termination of this Agreement pursuant to Section 8.1, directly or indirectly,
(i) solicit, initiate or encourage the submission of any proposal for a Sale
Transaction, (ii) enter into any agreement with respect to any Sale Transaction
or give any approval with respect to any Sale Transaction, or (iii) participate
in any discussions or negotiations regarding, or furnish to any Person any
information with respect to or take any other action to facilitate any
inquiries or the making of any proposal that constitutes, or may reasonably be
expected to lead to, any Sale Transaction or any proposal for a Sale
Transaction. Notwithstanding the preceding sentence, if at any time the Board
of Directors of SESI or Cardinal determines in good faith, based on the advice
of outside counsel, that it is necessary to do so in order to comply with its
fiduciary duties to its

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stockholders under Applicable Law, SESI or Cardinal (and their respective
officers, directors, representatives or agents) may in response to a written
proposal for a Sale Transaction not solicited on or after the date hereof,
subject to compliance with Section 6.12(c), (A) furnish information with
respect to itself or a Subsidiary pursuant to a customary confidentiality
agreement to any Person making such proposal, and (B) participate in
negotiations regarding such proposal. Without limiting the foregoing, it is
understood that any violations of the restrictions set forth in this Section
6.12(a) by any of a party's officers, directors, representatives, agents,
Affiliates or Subsidiaries, whether or not such Person is purporting to act on
behalf of such party or any of its Subsidiaries or otherwise, shall be deemed
to be a breach of this Section 6.12(a) by such party.

(b) Neither of the Boards of Directors of SESI or Cardinal shall (i)
withdraw or modify, or propose to withdraw or modify, in a manner adverse to
the approval (including, without limitation, the Board of Directors' resolution
providing for such approval) of this Agreement or the transactions contemplated
hereby or (ii) approve or recommend, or propose to approve or recommend, any
Sale Transaction, except in the event the Board of Directors of a party
determines in good faith, based on the advice of outside counsel, that it is
necessary to do so in order to comply with its fiduciary duties to its
stockholders under Applicable Law, and then only at or after the termination of
this Agreement pursuant to Section 8.1(f) or 8.1(g).

(c) In addition to the obligations set forth in subsections (a) and (b) of
this Section 6.12, each party promptly shall advise the others orally and in
writing of any request for information or of any proposed Sale Transaction or
any inquiry with respect to or which could reasonably be expected to lead to
any proposed Sale Transaction, the identity of the Person making any such
request, proposed Sale Transaction or inquiry and the terms and conditions
thereof. Each party will keep the others fully informed of the status and
details (including amendments or proposed amendments) of any such request,
proposed Sale Transaction or inquiry, and each party shall keep confidential
such information provided to it by another party pursuant to this Section
6.12(c), subject to any judicial or other legal order, directions or
obligations to disclose such information.

(d) Nothing contained in this Section 6.12 shall prohibit SESI from taking
and disclosing to its stockholders a position contemplated by Rule 14d-9 or
Rule 14e-2 promulgated under the Exchange Act.

Section 6.13 Restriction on Funds.

(a) Each of the Funds hereby covenants and agrees that, prior to the
Closing, it shall not sell, transfer or otherwise dispose of all or any part of
the shares of Cardinal Common Stock owned by it or grant any proxy relating
thereto other than to existing Cardinal Stockholders as of the date hereof. In
the event of any transfer by operation of law with respect to the Cardinal
Common Stock owned by the Funds, the provisions of this Section 6.13 are
intended to be binding upon the transferee, and such transferee will be bound
hereby. If any transfers of Cardinal Common Stock are made pursuant to this
Section 6.13, Section 3.1 of the Cardinal Disclosure Schedules shall be amended
accordingly.

(b) So long as this Agreement remains in effect, the Funds agree and
undertake to vote or cause to be voted all of the shares of Cardinal Common
Stock as to which the Funds have voting power at any meeting or meetings
(including any adjournments thereof) before which, or on any written consents
with respect to which, the Agreement or any similar agreement may come for
consideration by the Cardinal Stockholders, in favor of the approval of this
Agreement and against any similar agreement unless SESI then is in breach or
default in any material respect with respect to any covenant, representation or
warranty to an extent that would permit Cardinal to terminate this Agreement.

Section 6.14 Update Information. Each party hereto will promptly disclose to
the other any information contained in its representations and warranties that
because of an event occurring after the date hereof is incomplete or no longer
correct; provided, however, that except as contemplated by Sections 6.4, 6.13
and 7.1(l) hereof relative to Section 3.1 of the Cardinal Disclosure Schedules,
none of such disclosures will be deemed to modify, amend, or supplement the
representations and warranties of such party, unless the other party consents
to such modification, amendment, or supplement in writing. Each party shall
promptly advise the

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other party orally and in writing of any change or event having or which
insofar as reasonably can be foreseen would have, a Material Adverse Effect on
the party providing such notification.

Section 6.15 Maintenance of Policies. SESI and Cardinal shall maintain the
coverage under the SESI Policies and the Cardinal Policies respectively, in
full force and effect until the Closing Date.

Section 6.16 Director's and Officer's Indemnification and Insurance.

(a) For four years after the Effective Time, SESI shall indemnify and hold
harmless the present and former officers and directors of Cardinal or Cardinal
Services in respect of acts or omissions prior to the Effective Time to the
fullest extent provided under Cardinal's Certificate of Incorporation in effect
on the date hereof or pursuant to any agreements set forth in Section 4.23 of
the Disclosure Schedule; provided that such indemnification shall be subject to
any limitation imposed from time to time under Applicable Law.

(b) SESI shall pay the insurance premiums required for any extension of
Cardinal's officers' and directors' liability insurance policy that is in force
at the date hereof following the Closing Date for a "discovery" period elected
under such insurance policy covering the officers and directors of Cardinal
(the "Extended Coverage Policy") for a period of four years or shall provide
substantially similar coverage for the same period under SESI's directors' and
officers' insurance policy for all directors and officers of Cardinal or
Cardinal Services.

Section 6.17 Nasdaq Filing. SESI shall timely file with Nasdaq the notice of
issuance of the Merger Shares as required pursuant to NASD Rule 4310(c)(17),
and in connection therewith, remit the fee specified in NASD Rule 4510(b)(2).

Section 6.18 SESI Employee Benefits. As soon as practicable after the
Effective Time, those employees of Cardinal and Cardinal Services who become
employees of the Surviving Corporation or a Subsidiary of the Surviving
Corporation or SESI or an SESI Subsidiary shall be entitled to participate in
all employee benefit plans of SESI, including, without limitation, its 401(k)
savings plan, in respect of their service after the Effective Time to the same
extent that employees of SESI who are employed in comparable positions are
entitled to participate. SESI and Cardinal further agree that any such
employees shall be credited for their service with Cardinal or Cardinal
Services, as the case may be, for purposes of eligibility, benefit entitlement
and vesting in the plans provided by SESI. Such employees' benefits under the
SESI's medical benefit plan shall not be subject to any exclusions for any pre-
existing conditions (to the extent such exclusions did not apply under
Cardinal's medical benefit plan), and credit shall be received for any
deductibles or out-of-pocket amounts previously paid.

ARTICLE 7

CLOSING CONDITIONS

Section 7.1 Conditions Applicable to all Parties. The respective obligations
of each party to consummate the transactions contemplated by this Agreement
shall be subject to the satisfaction or, where permissible, waiver by such
party of the following conditions at or prior to the Closing Date:

(a) No statute, rule, regulation, executive order, decree, preliminary or
permanent injunction or restraining order shall have been enacted, entered,
promulgated or enforced by any court of competent jurisdiction or other
Governmental Entity which prohibits or restricts the consummation of the
transactions contemplated by this Agreement, and no Proceeding shall have been
commenced and be pending which seeks to prohibit or restrict the consummation
of the transactions contemplated by this Agreement.

(b) The SESI stockholders shall have met and (i) approved this Agreement,
the Charter Amendment and the SESI Stock Incentive Plan, and (ii) elected the
slate of directors designated pursuant to Section 6.2(b) hereof.

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(d) SESI and Cardinal shall have received an opinion of Jones, Walker,
Waechter, Poitevent, Carrere & Denegre L.L.P. to the effect that the Merger
constitutes a reorganization within the meaning of Sections 368(a)(1)(A) and
368(a)(2)(E) of the Code, that the Cardinal Stockholders will recognize no gain
or loss for federal income tax purposes with respect to SESI Common Stock
received by them in connection with the Merger, and that no gain or loss for
federal income tax purposes will be recognized by SESI or Cardinal as a result
of the Merger.

(e) SESI shall have completed the Financing on terms reasonably acceptable
to Cardinal.

(f) Cardinal shall have received the Equity Contribution on terms reasonably
acceptable to SESI.

(g) SESI and the Funds shall have executed and delivered to each other the
Stockholders' Agreement.

(h) The waiting period applicable to the consummation of the Merger under
the HSR Act shall have expired or been terminated.

(i) All Cardinal Stockholders as of the Closing Date shall have executed and
delivered the Agreement and Release to SESI.

(j) All consents and approvals of third parties necessary for consummation
of the transactions contemplated by this Agreement shall have been obtained.

(k) The Merger Shares shall have been approved for listing, subject to
notice of official issuance, on the Nasdaq National Market.

(l) All issued and outstanding shares of Cardinal Preferred Stock shall have
been either redeemed by Cardinal or converted into Cardinal Common Stock by the
holders of such Cardinal Preferred Stock, and there shall be no shares of
Cardinal Preferred Stock issued and outstanding at the Effective Time and
Section 3.1 of the Cardinal Disclosure Schedules shall have been amended to
reflect any such conversion, or the holders thereof shall have approved this
Agreement as provided in Section 6.2(c).

(m) The Escrow Agreement (as defined in the Settlement Agreement) shall have
been executed and delivered and arrangements shall have been made to escrow
thereunder 892,000 shares of SESI Common Stock issued in connection with the
Merger.

Section 7.2 Conditions to Obligations of SESI. The obligations of SESI to
consummate the transactions contemplated by this Agreement are subject to the
satisfaction of the following conditions unless waived by SESI:

(a) Each of the representations and warranties of Cardinal and the Funds
set forth in this Agreement that is qualified as to materiality shall be
true and correct, and each of such representations and warranties that is
not so qualified as to materiality shall be true and correct in all
material respects, as of the date of this Agreement and as of the Closing
Date as though made on and as of the Closing Date, except as otherwise
contemplated by this Agreement, and Cardinal and the Funds shall have
performed in all material respects all obligations required to be performed
by them under this Agreement at or prior to the Closing Date.

(b) SESI shall have received an opinion of Gardere, Wynne, Sewell &
Riggs, L.L.P., counsel for Cardinal, substantially in the form attached
hereto as Exhibit F.

Section 7.3 Conditions to Obligations of Cardinal. The obligations of
Cardinal to consummate the transactions contemplated by this Agreement are
subject to the satisfaction for the following conditions, unless waived by
Cardinal and the Funds:

(a) Each of the representations and warranties of SESI set forth in this
Agreement that is qualified as to materiality shall be true and correct,
and each of such representations and warranties that is not so

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qualified as to materiality shall be true and correct in all material
respects, as of the date of this Agreement and as of the Closing Date as
though made on and as of the Closing Date, except as otherwise contemplated
by this Agreement, and SESI shall have performed in all material respects
all obligations required to be performed by it under this Agreement on or
prior to the Closing Date.

(b) Cardinal shall have received an opinion of Jones, Walker, Waechter,
Poitevent, Carrere & Denegre, L.L.P., counsel for SESI, substantially in
the form attached hereto as Exhibit G.

(d) Cardinal shall have received evidence satisfactory to them that the
Extended Coverage Policy is in force.

(e) SESI shall have fulfilled the covenants contained in Section 6.2(e).

ARTICLE 8

TERMINATION AND AMENDMENT

Section 8.1 Termination. This Agreement may be terminated and abandoned at
any time prior to the Closing Date:

(a) by mutual consent of SESI and Cardinal;

(b) by SESI, if there shall have been a breach of any representation,
warranty, covenant or agreement on the part of Cardinal or the Funds that
is qualified as to materiality, or a material breach of any such
representation, warrant, covenant or agreement that is not so qualified as
to materiality, which breach shall not have been cured prior to the earlier
of (i) 30 days following notice of such breach and (ii) the Closing Date;

(c) by Cardinal, if there shall have been a breach of any
representation, warranty, covenant or agreement on the part of SESI that is
qualified as to materiality, or a material breach of any such
representation, warrant, covenant or agreement that is not so qualified as
to materiality, which breach shall not have been cured prior to the earlier
of (i) 30 days following notice of such breach and (ii) the Closing Date;

(d) by either SESI on the one hand, or Cardinal on the other hand, if
any permanent injunction or other order of a court or other competent
Governmental Entity preventing the transactions contemplated by this
agreement shall have become final and nonappealable;

(e) by either SESI on the one hand, or Cardinal on the other hand, if
the transactions contemplated by this Agreement shall not have been
consummated on or before October 15, 1999; provided, that the right to
terminate this Agreement under this Section 8.1(e) shall not be available
to any party whose breach of its representations and warranties in this
Agreement or whose failure to perform any of its covenants and agreements
under this Agreement has resulted in the failure of the transactions
contemplated by this agreement to occur on or before such date;

(f) by SESI, if (i) the Board of Directors of Cardinal withdraws,
modifies or changes its recommendation of this Agreement or the Merger or
shall have resolved to do any of the foregoing or the Board of Directors of
Cardinal shall have recommended to the stockholders of Cardinal any
proposed Sale Transaction or resolved to do so; (ii) a tender offer or
exchange offer for 30% or more of the outstanding shares of Cardinal Common
Stock is commenced and the Board of Directors of Cardinal, within 10
Business Days after such tender offer or exchange offer is so commenced,
either fails to recommend against acceptance of such tender or exchange
offer by its stockholders or takes no position with respect to the
acceptance of such tender or exchange offer by its stockholders; or (iii)
except as contemplated by this Agreement, any person shall have acquired
beneficial ownership or the right to acquire beneficial ownership of, or
any "group" (as such term is defined under Section 13(d) of the Exchange
Act and the

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regulations promulgated thereunder), shall have been formed which
beneficially owns, or has the right to acquire beneficial ownership of, 30%
or more of the then outstanding shares of Cardinal Common Stock;

(g) by Cardinal if (i) the Board of Directors of SESI withdraws,
modifies or changes its recommendation of this Agreement or the Merger or
shall have resolved to do any of the foregoing or the Board of Directors of
SESI shall have recommended to the stockholders of SESI any proposed Sale
Transaction or resolved to do so; (ii) a tender offer or exchange offer for
30% or more of the outstanding shares of SESI Common Stock is commenced and
the Board of Directors of SESI, within 10 Business Days after such tender
offer or exchange offer is so commenced, either fails to recommend against
acceptance of such tender or exchange offer by its stockholders or takes no
position with respect to the acceptance or such tender or exchange offer by
its stockholders; or (iii) except as contemplated by this Agreement, any
person shall have acquired beneficial ownership or the right to acquire
beneficial ownership of, or any "group" (as such term is defined under
Section 13(d) of the Exchange Act and the regulations promulgated
thereunder), shall have been formed which beneficially owns, or has the
right to acquire beneficial ownership of, 30% or more of the then
outstanding shares of SESI Common Stock;

(h) by either SESI on the one hand, or Cardinal on the other hand, if

(i) Cardinal accepts a proposed Sale Transaction, which shall have
been approved by Cardinal's Board of Directors in accordance with
Section 6.12(b);

(ii) SESI accepts a proposed Sale Transaction, which shall have been
approved by SESI's Board of Directors in accordance with Section
6.12(b);

(iii) if the required approval of the stockholders of SESI of this
Agreement is not received at the SESI Annual Meeting; or

(iv) if the required approval of the Cardinal stockholders of this
Agreement is not obtained.

Section 8.2 Effect of Termination. (a) Except as provided in this Section
8.2, in the event of a termination of this Agreement as provided in Section
8.1, this Agreement shall forthwith become void, the representations and
warranties shall not survive, and there shall be no further liability or
obligation under any provisions hereof on the part of the parties hereto or
their respective officers, directors or stockholders.

(b) To the extent that a termination of this Agreement pursuant to Section
8.1(b) or (c) results from a willful breach of any of a party's
representations, warranties, covenants or agreements set forth in this
Agreement, the injured party shall have a right to recover its damages caused
thereby, provided, however, that such injured party, shall not be entitled to
consequential or punitive damages.

(c) In the event of a termination of this Agreement pursuant to Sections
8.1(b), 8.1(f) or 8.1(h)(iv) and within three months of any such termination,
Cardinal accepts a written offer or enters into a written agreement to
consummate a Sale Transaction and such Sale Transaction is ultimately
consummated, then Cardinal shall at the closing of such Sale Transaction (and
as a condition of such closing) pay to SESI a termination fee equal to $3
million.

(d) In the event of a termination of this Agreement pursuant to Sections
8.1(c), 8.1(g) or 8.1(h)(iii) and within three months of any such termination,
SESI accepts a written offer or enters into a written agreement to consummate a
Sale Transaction and such Sale Transaction is subsequently consummated, then
SESI shall at the closing of such Sale Transaction (and as a condition of such
closing) pay to Cardinal a termination fee equal to $3 million.

(e) In the event of a termination of this Agreement pursuant to Section
8.1(h)(i) or (ii) hereof, then the party who has accepted a proposed Sale
Transaction shall pay to the other immediately a termination fee equal to $3
million.

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ARTICLE 9

MISCELLANEOUS

Section 9.1 Notices. Any notice or other communication required or permitted
hereunder shall be in writing or by telex, telephone or facsimile transmission
with subsequent written confirmation, and may be personally served or sent by
United States mail and shall be deemed to have been given upon receipt by the
party notified. For purposes hereof, the addresses of the parties hereto (until
notice of a change thereof is delivered as provided in this Section 9.1) shall
be as set forth opposite each party's name on the signature page hereof.

Section 9.2 Non-Survival of Representations and Warranties. The
representations and warranties of the parties shall not survive the Closing.

Section 9.3 Headings; Gender. When a reference is made in this Agreement to
a section, exhibit or schedule, such reference shall be to a section, exhibit
or schedule of this Agreement unless otherwise indicated. The table of contents
and headings contained in this Agreement are for reference purposes only and
shall not affect in any way the meaning or interpretation of this Agreement.
All personal pronouns used in this Agreement shall include the other genders,
whether used in the masculine, feminine or neuter gender, and the singular
shall include the plural and vice versa, whenever and as often as may be
appropriate.

Section 9.4 Entire Agreement; No Third Party Beneficiaries. This Agreement
(including the documents, exhibits and instruments referred to herein) (a)
constitutes the entire agreement and supersedes all prior agreements, and
understandings and communications, both written and oral, among the parties
with respect to the subject matter hereof, and (b) except as provided in
Section 6.16 hereof, is not intended to confer upon any person other than the
parties hereto any rights or remedies hereunder.

Section 9.5 Governing Law. This Agreement shall be governed and construed in
accordance with the laws of the State of Delaware without regard to any
applicable principles of conflicts of law.

Section 9.6 Assignment. Neither this Agreement nor any of the rights,
interests or obligations hereunder shall be assigned by any of the parties
hereto (whether by operation of law or otherwise) without the prior written
consent of the other parties.

Section 9.7 Severability. If any term or other provision of this Agreement
is invalid, illegal or incapable of being enforced by reason of any rule of law
or public policy, all other conditions and provisions of this Agreement shall
nevertheless remain in full force and effect so long as the economic or legal
substance of the transactions contemplated hereby is not affected in any
adverse manner to either party. Upon such determination that any term or other
provision is invalid, illegal or incapable of being enforced, the parties
hereto shall negotiate in good faith to modify this Agreement so as to effect
the original intent of the parties as closely as possible in an acceptable
manner to the end that the transactions contemplated hereby are fulfilled to
the extent possible, and in any case such term or provision shall be deemed
amended to the extent necessary to make it no longer invalid, illegal or
unenforceable.

Section 9.8 Counterparts. This Agreement may be executed in multiple
counterparts, each of which shall be deemed an original and all of which taken
together shall constitute one and the same document.

Section 9.9 Amendment. This Agreement may not be amended except by an
instrument in writing signed by each of the parties hereto.

Section 9.10 Extension; Waiver. At any time prior to the Closing Date, the
parties hereto may, in their respective sole discretion and to the extent
legally allowed, (a) extend the time for the performance of any of the
obligations or other acts of the other parties hereto; (b) waive any
inaccuracies in the representations and warranties contained herein or in any
document delivered pursuant thereto; and (c) waive compliance with any

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of the agreements or conditions contained herein. Any agreement on the part of
a party hereto to any such extension or waiver shall be valid only if set forth
in a written instrument signed by or on behalf of such party.

Section 9.11 Expenses. Except as provided in Section 8.2, whether or not the
transactions contemplated herein are consummated, payment for all costs and
expenses incurred in connection with this Agreement and the transactions
contemplated hereby shall be made by the party incurring such costs and
expenses.

IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
signed themselves or by their respective duly authorized officers as of the
date first written above.

Address: SUPERIOR ENERGY SERVICES, INC.

1105 Peters Road By:__________________________________
Harvey, Louisiana 70058 Terence E. Hall
Attn: Terence E. Hall President

Fax: 504-362-1818
Address: SUPERIOR CARDINAL ACQUISITION
1105 Peters Road COMPANY, INC.

Harvey, Louisiana 70058 By:__________________________________
Attn: Terence E. Hall Terence E. Hall
Fax: 504-362-1818 President

Address: CARDINAL HOLDING CORP.

600 Travis, Suite 6000 By:__________________________________
Houston, Texas 77002 Ben A. Guill
Attn: Ben A. Guill Interim Chief Executive Officer

Fax: 713-224-077l
Address: FIRST RESERVE FUND VII,
600 Travis, Suite 6000 LIMITED PARTNERSHIP
Houston, Texas 77002 By: First Reserve GP VII, L.P., its
General Partner

Attn: Ben A. Guill By: First Reserve Corporation, its
General Partner

Fax: 713-224-0771 By:__________________________________
Ben A. Guill
President

Address: FIRST RESERVE FUND VIII,
600 Travis, Suite 6000 LIMITED PARTNERSHIP
Houston, Texas 77002 By: First Reserve GP VIII, L.P., its
General Partner

Attn: Ben A. Guill By: First Reserve Corporation, its
General Partner

Fax: 713-224-0771 By:__________________________________
Ben A. Guill
President

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Exhibit "A"

CARDINAL DISCLOSURE SCHEDULES

(Intentionally Omitted)

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<PAGE>

Exhibit "B"

SUPERIOR DISCLOSURE SCHEDULES

(Intentionally Omitted)

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<PAGE>

Exhibit "C"

- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------

REGISTRATION RIGHTS AGREEMENT

Among

SUPERIOR ENERGY SERVICES, INC.

And

FIRST RESERVE FUND VII, LIMITED PARTNERSHIP

FIRST RESERVE FUND VIII, LIMITED PARTNERSHIP

, 1999

- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------

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<PAGE>

REGISTRATION RIGHTS AGREEMENT

This Registration Rights Agreement (this "Agreement") is entered into this
day of April , 1999, by and among Superior Energy Services, Inc., a
Delaware corporation ("Superior"), and First Reserve Fund VII, Limited
Partnership, a Delaware limited partnership, and First Reserve Fund VIII,
Limited Partnership, a Delaware limited partnership (each a "First Reserve
Fund" and, collectively, the "First Reserve Funds").

W I T N E S S E T H:

WHEREAS, pursuant to that certain Agreement and Plan of Merger (the "Merger
Agreement") dated April , 1999 entered into by and among, inter alia,
Superior, Cardinal Holding Corp. ("Cardinal") and the First Reserve Funds, each
First Reserve Fund received upon consummation of the Merger contemplated by the
Merger Agreement, shares of Superior Common Stock in exchange for the shares of
common stock of Cardinal it holds; and

WHEREAS, the parties hereto desire to set forth certain additional
agreements among them relating to the Registrable Securities owned by the First
Reserve Funds.

NOW, THEREFORE, in consideration of the mutual promises and covenants herein
contained, the parties hereto agree as follows:

1. Defined Terms. The following capitalized terms when used in this
Agreement shall have the following meanings:

"Cardinal Holders" means the holders of registerable securities in
accordance with the terms of the Cardinal Registration Rights Agreement.

"Cardinal Registration Rights Agreement" means that certain Registration
Rights Agreement, dated as of the date hereof, by and among Superior and all of
Cardinal's stockholders other than the First Reserve Funds.

"Common Stock" means the common stock, $.001 par value per share, of
Superior.

"Demand Registration" means a demand registration as defined in Section 2(a)
hereof.

"Exchange Act" means the Securities Exchange Act of 1934, as amended.

"Holders" means the holders of the Registrable Securities in accordance with
the terms of this Agreement.

"Person" means an individual, corporation, partnership, limited liability
company, business trust, joint stock company, unincorporated association, or
other entity of whatever nature.

"Piggyback Registration" means a piggyback registration as defined in
Section 2(b) hereof.

"Prospectus" means the prospectus included in any Registration Statement
(including, without limitation, a prospectus that discloses information
previously omitted from a prospectus filed as part of an effective registration
statement in reliance upon Rule 430A under the Securities Act), as amended or
supplemented by any prospectus supplement, with respect to the terms of the
offering of any portion of the Registrable Securities covered by such
Registration Statement and all other amendments and supplements to the
prospectus, including post-effective amendments, and all material incorporated
by reference or deemed to be incorporated by reference in such prospectus.

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"Registrable Securities" means (a) all shares of Common Stock issued to the
First Reserve Funds pursuant to the Merger Agreement and (b) any other
securities issued by Superior after the date hereof with respect to such shares
of Common Stock by means of exchange, reclassification, dividend, distribution,
split up, combination, subdivision, recapitalization, merger, spin-off,
reorganization or otherwise; provided, however, that as to any Registrable
Securities, such securities shall cease to constitute Registrable Securities
for the purposes of this Agreement if and when: (i) a Registration Statement
with respect to the sale of such securities shall have been declared effective
by the SEC and such securities shall have been sold pursuant thereto; (ii) such
securities shall have been sold in compliance with of all applicable resale
provisions of Rule 144 under the Securities Act; or (iii) such securities cease
to be issued and outstanding for any reason.

"Registration Statement" means any registration statement filed by Superior
that covers any of the Registrable Securities pursuant to the provisions of
this Agreement, including the Prospectus included therein, amendments and
supplements to such registration statement, including post-effective
amendments, all exhibits, and all material incorporated by reference or deemed
to be incorporated by reference in such registration statement.

"SEC" means the Securities and Exchange Commission, or any successor agency
thereto.

"Securities Act" means the Securities Act of 1933, as amended.

2. Registration Rights

(a) Demand Registration. (i) At any time after , 2000 [one year from
date of Agreement], the First Reserve Funds may at any time and from time to
time make a written request for registration under the Securities Act of not
less than 20% of the Registrable Securities owned by them (a "Demand
Registration"); provided that Superior shall not be obligated to effect more
than one Demand Registration in any 12-month period or more than an aggregate
of four Demand Registrations pursuant to this Section 2(a). Such request will
specify the number of shares of Registrable Securities proposed to be sold and
will also specify the intended method of disposition thereof. A registration
will not count as a Demand Registration until the Registration Statement filed
pursuant to such registration has been declared effective by the SEC and
remains effective for the period specified in Section 2(e)(i).

(ii) If the First Reserve Funds so elect, the offering of such
Registrable Securities pursuant to such Demand Registration shall be in the
form of an underwritten offering. The First Reserve Funds shall select the
managing underwriters and any additional investment bankers and managers to
be used in connection with the offering; provided that the lead managing
underwriter must be reasonably satisfactory to Superior.

(iii) Neither Superior nor any of its security holders (other than the
holders of Registrable Securities in such capacity) shall be entitled to
include any of Superior's securities in a Registration Statement initiated
as a Demand Registration under this Section 2(a) without the consent of The
First Reserve Funds.

(b) Piggyback Registration. If Superior proposes to file a registration
statement under the Securities Act with respect to an offering of Common Stock
(i) for Superior's own account (other than a registration statement on Form S-4
or S-8 (or any substitute form that may be adopted by the SEC for transactions
traditionally registered on Form S-4 or S-8)) or (ii) for the account of any of
its holders of Common Stock (other than pursuant to a Demand Registration under
Section 2(a)), except for the Shelf Registration (as that term is defined in
the Cardinal Registration Rights Agreement, then Superior shall give written
notice of such proposed filing to the First Reserve Funds as soon as
practicable (but in no event later than the earlier to occur of (i) the tenth
day following receipt by Superior of notice of exercise of other Demand
Registration rights and (ii) 30 days before the filing date), and such notice
shall offer the First Reserve Funds the opportunity to register such number of
shares of Registrable Securities as the First Reserve Funds may request within
20 days after receipt by the First Reserve Funds of Superior's notice on the
same terms and conditions as Superior's or such holder's Common Stock (a
"Piggyback Registration"). The First Reserve Funds will be permitted to
withdraw all or any part of their Registrable Securities from a Piggyback
Registration at any time prior to the date the Registration Statement filed
pursuant to such Piggyback Registration becomes effective with the SEC.

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<PAGE>

(c) Reduction of Offering. Notwithstanding anything contained herein, if the
Piggyback Registration is an underwritten offering and the lead managing
underwriter of such offering delivers a written opinion to Superior that the
size of the offering that Superior, the First Reserve Funds, the Cardinal
Holders and any other Persons whose securities are proposed to be included in
such offering is such that the offering or the offering price would be
materially and adversely affected, Superior will include in such Piggyback
Registration in the following order of priority (i) first, all of the
Registrable Securities requested by the First Reserve Funds and the Cardinal
Holders, on a pro rata basis based on the amount of securities sought to be
registered, and (ii) second, the securities proposed to be registered by any
other Persons; provided, that in no event shall the number of securities
included in a Piggyback Registration for Persons pursuant to Section (c)(ii) be
reduced below the lesser of (i) the number of securities such persons would be
entitled to include in such Piggyback Registration if, in the event of a
reduction of the size of the offering pursuant to this Section 2(c), they were
entitled, notwithstanding the terms of this Section 2(c), to include their
securities in such Piggyback Registration on a pro rata basis with the First
Reserve Funds and the Cardinal Holders based on the amount of securities sought
to be registered and (ii) 20% of the total amount of securities included in
such offering for Persons other than Superior and the Persons, if any,
demanding such registration.

(d) Filings; Information. Whenever the First Reserve Funds request that any
Registrable Securities be registered pursuant to Section 2(a) hereof, Superior
will use its reasonable best efforts to effect the registration of such
Registrable Securities and to permit the sale of such Registrable Securities in
accordance with the intended method of disposition thereof, as promptly as is
practicable, and in connection with any such request:

(i) Superior will as expeditiously as possible, but in no event later
than 30 days after receipt of a request to file a registration statement
with respect to such Registrable Securities, prepare and file with the SEC
a Registration Statement on any form for which Superior then qualifies and
which counsel for Superior shall deem appropriate and available for the
sale of the Registrable Securities to be registered thereunder in
accordance with the intended method of distribution thereof and which is
reasonably satisfactory to the First Reserve Funds, and use its reasonable
best efforts to cause such Registration Statement to become and remain
effective for a period of not less than 90 days (or such shorter period
which will terminate when all Registrable Securities covered by such
Registration Statement have been sold); provided that if at the time
Superior receives a request to file a registration statement with respect
to Registrable Securities, Superior is engaged in confidential negotiations
or other confidential business activities, disclosure of which would be
required in such registration statement (but would not be required if such
registration statement were not filed) and the board of directors of
Superior determines in good faith that such disclosure would be materially
detrimental to Superior and its stockholders, Superior shall have a period
of not more than 120 days (less the number of days during the previous 12
months that the use of a Prospectus was suspended pursuant to Section
2(d)(vi) and/or this Section 2(d)(i)) within which to file such
registration statement measured from the date of Superior's receipt of the
First Reserve Funds's request for registration in accordance with Section
2(a) hereof. The filing of a registration statement may only be deferred
once for any potential transaction or event or related transactions or
events that could arise as a result of negotiations or other activities and
any registration statement whose filing has been deferred as a result shall
be filed forthwith if the negotiations or other activities are disclosed or
terminated. In order to defer the filing of a registration statement
pursuant to this Section 2(d)(i), Superior shall promptly, upon determining
to seek such deferral, deliver to the First Reserve Funds a certificate
signed by the President or Chief Financial Officer of Superior stating that
Superior is deferring such filing pursuant to this Section 2(d)(i).

(ii) Superior will prepare and file with the SEC such amendments and
supplements to such Registration Statement and the Prospectus used in
connection therewith as may be necessary to keep such Registration
Statement effective for the period set forth in Section 2(d)(i) and comply
with the provisions of the Securities Act with respect to the disposition
of all securities covered by such Registration Statement during such period
in accordance with the intended methods of disposition by the sellers
thereof set forth in such Registration Statement.

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(iii) Superior will, if requested, prior to filing a Registration
Statement or any amendment or supplement thereto, furnish to the First
Reserve Funds and each applicable managing underwriter, if any, copies
thereof, and thereafter furnish to the First Reserve Funds and each such
underwriter, if any, such number of copies of such Registration Statement,
amendment and supplement thereto (in each case including all exhibits
thereto and documents incorporated by reference therein) and the Prospectus
included in such Registration Statement (including each preliminary
Prospectus) as the First Reserve Funds or each such underwriter may
reasonably request in order to facilitate the sale of the Registrable
Securities.

(iv) After the filing of the Registration Statement, Superior will
promptly notify the First Reserve Funds of any stop order issued or, to
Superior's knowledge, threatened to be issued by the SEC and take all
reasonable actions required to prevent the entry of such stop order or to
remove it as soon as possible if entered.

(v) Superior will use its reasonable best efforts to qualify the
Registrable Securities for offer and sale under such other securities or
blue sky laws of such jurisdictions in the United States as the First
Reserve Funds reasonably request; provided that Superior will not be
required to (A) qualify generally to do business in any jurisdiction where
it would not otherwise be required to qualify but for this subparagraph
2(d)(v), (B) subject itself to taxation in any such jurisdiction or (C)
consent to general service of process in any such jurisdiction.

(vi) Superior will as promptly as is practicable notify the First
Reserve Funds, at any time when a Prospectus is required by law to be
delivered in connection with sales by an underwriter or dealer, of the
occurrence of any event requiring the preparation of a supplement or
amendment to such Prospectus so that, as thereafter delivered to the
purchasers of such Registrable Securities, such Prospectus will not contain
an untrue statement of a material fact or omit to state any material fact
required to be stated therein or necessary to make the statements therein,
in the light of the circumstances under which they were made, not
misleading and promptly make available to the First Reserve Funds and to
the underwriters any such supplement or amendment. The First Reserve Funds
agree that, upon receipt of any notice from Superior of the occurrence of
any event of the kind described in the preceding sentence, the First
Reserve Funds will forthwith discontinue the offer and sale of Registrable
Securities pursuant to the Registration Statement covering such Registrable
Securities until receipt by the First Reserve Funds and the underwriters of
the copies of such supplemented or amended Prospectus and, if so directed
by Superior, the First Reserve Funds will deliver to Superior all copies,
other than permanent file copies, then in the First Reserve Funds'
possession of the most recent Prospectus covering such Registrable
Securities at the time of receipt of such notice. In the event Superior
shall give such notice, Superior shall extend the period during which such
Registration Statement shall be maintained effective as provided in Section
2(e)(i) by the number of days during the period from and including the date
of the giving of such notice to the date when Superior shall make available
to the First Reserve Funds such supplemented or amended Prospectus.

(vii) Superior will enter into customary agreements (including an
underwriting agreement in customary form) and take such other actions as
are reasonably required in order to expedite or facilitate the sale of such
Registrable Securities.

(viii) Superior will furnish to the First Reserve Funds and to each
underwriter a signed counterpart, addressed to the First Reserve Funds or
such underwriter, of an opinion or opinions of counsel to Superior and a
comfort letter or comfort letters from Superior's independent public
accountants, each in customary form and covering such matters of the type
customarily covered by opinions or comfort letters, as the case may be, as
the First Reserve Funds or the managing underwriter reasonably requests.

(ix) Superior will make generally available to its security holders, as
soon as reasonably practicable, an earnings statement covering a period of
12 months, beginning within three months after the effective date of the
Registration Statement, which earnings statement shall satisfy the
provisions of Section 11(a) of the Securities Act and the rules and
regulations of the SEC thereunder.

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(x) Superior will use its reasonable best efforts to cause all such
Registrable Securities to be listed on each securities exchange or market
on which the Common Stock is then listed.

Superior may require the First Reserve Funds to furnish promptly in writing
to Superior such information regarding the First Reserve Funds, the plan of
distribution of the Registrable Securities and other information as Superior
may from time to time reasonably request or as may be legally required in
connection with such registration.

(e) Registration Expenses. In connection with any Demand Registration or any
Piggyback Registration, Superior shall pay the following expenses incurred in
connection with such registration: (i) filing fees with the SEC; (ii) fees and
expenses of compliance with securities or blue sky laws (including reasonable
fees and disbursements of counsel in connection with blue sky qualifications of
the Registrable Securities); (iii) printing expenses; (iv) fees and expenses
incurred in connection with the listing of the Registrable Securities; (v) fees
and expenses of counsel and independent certified public accountants for
Superior and (vi) the reasonable fees and expenses of any additional experts
retained by Superior in connection with such registration. In connection with
the preparation and filing of a Registration Statement pursuant to Section
2(a), Superior will also pay the reasonable fees and expenses of a single legal
counsel chosen by the First Reserve Funds. The First Reserve Funds shall pay
any underwriting fees, discounts or commissions attributable to the sale of
Registrable Securities and any other expenses of the First Reserve Funds.

(f) Participation in Underwritten Registrations. No Person may participate
in any underwritten registered offering contemplated hereunder unless such
Person (a) agrees to sell its securities on the basis provided in any
underwriting arrangements approved by the Persons entitled hereunder to approve
such arrangements and (b) completes and executes all questionnaires, powers of
attorney, indemnities, underwriting agreements and other documents reasonably
required under the terms of such underwriting arrangements and this Agreement.

(g) Holdback Agreements. The First Reserve Funds agree not to effect any
public sale (including a sale pursuant to Rule 144 of the Securities Act) of
any Registrable Securities, or any securities convertible into or exchangeable
or exercisable for such securities, during the 14 days prior to, and during the
120-day period beginning on, the effective date of any underwritten Demand
Registration or any underwritten Piggyback Registration in which the First
Reserve Funds participate, other than the Registrable Securities to be sold
pursuant to such registration statement.

3. Indemnification

(a) Indemnification by Superior. Superior agrees to indemnify and hold
harmless the First Reserve Funds, its general partner and their officers and
directors, and each Person, if any, who controls the First Reserve Funds within
the meaning of either Section 15 of the Securities Act or Section 20 of the
Exchange Act from and against any and all losses, claims, damages, liabilities
and expenses arising out or based upon any untrue statement or alleged untrue
statement of a material fact contained in any Registration Statement or
prospectus relating to the Registrable Securities or any preliminary
Prospectus, or arising out of or based upon any omission or alleged omission to
state therein a material fact required to be stated therein or necessary to
make the statements therein not misleading, except insofar as such losses,
claims, damages, liabilities and expenses are caused by any untrue statement or
omission or alleged untrue statement or omission based upon information
relating to the First Reserve Funds or the plan of distribution furnished in
writing to Superior by or on behalf of the First Reserve Funds expressly for
use therein; provided that the foregoing indemnity with respect to any
preliminary Prospectus shall not inure to the benefit of the First Reserve
Funds if a copy of the most current Prospectus at the time of the delivery of
the Registrable Securities was not provided to the purchaser, Superior had
previously furnished the First Reserve Funds with a sufficient number of copies
of the current Prospectus and such current Prospectus would have cured the
defect giving rise to such loss, claim, damage or liability. Superior also
agrees to indemnify any underwriters of the Registrable Securities, their
officers and directors and each Person who controls such underwriters on
substantially the same basis as that of the indemnification of the First
Reserve Funds provided in this Section 3(a).

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<PAGE>

(b) Indemnification by The First Reserve Funds. The First Reserve Funds
agree to indemnify and hold harmless Superior, its officers and directors, and
each Person, if any, who controls Superior within the meaning of either Section
15 of the Securities Act or Section 20 of the Exchange Act to the same extent
as the foregoing indemnity from Superior to the First Reserve Funds, but only
with reference to information relating to the First Reserve Funds or the plan
of distribution furnished in writing by or on behalf of the First Reserve Funds
expressly for use in any Registration Statement or Prospectus, or any amendment
or supplement thereto, or any preliminary Prospectus. The First Reserve Funds
also agree to indemnify and hold harmless any underwriters of the Registrable
Securities, their officers and directors and each person who controls such
underwriters on substantially the same basis as that of the indemnification of
Superior provided in this Section 3(b).

(c) Conduct of Indemnification Proceedings. In case any proceeding
(including any governmental investigation) shall be instituted involving any
Person in respect of which indemnity may be sought pursuant to Section 3(a) or
Section 3(b), such Person (the "Indemnified Party") shall promptly notify the
Person against whom such indemnity may be sought (the "Indemnifying Party") in
writing and the Indemnifying Party shall have the right to assume the defense
of such proceeding and retain counsel reasonably satisfactory to such
Indemnified Party to represent such Indemnified Party and any others the
Indemnifying Party may designate in such proceeding and shall pay the fees and
disbursements of such counsel related to such proceeding. In any such
proceeding, any Indemnified Party shall have the right to retain its own
counsel, but the fees and expenses of such counsel shall be at the expense of
such Indemnified Party unless (i) the Indemnifying Party and the Indemnified
Party shall have mutually agreed to the retention of such counsel or (ii) the
named parties to any such proceeding (including any impleaded parties) include
both the Indemnified Party and the Indemnifying Party and representation of
both parties by the same counsel would be inappropriate due to actual or
potential differing interests between them. It is understood that the
Indemnifying Party shall not, in connection with any proceeding or related
proceedings in the same jurisdiction, be liable for the fees and expenses of
more than one separate firm of attorneys (in addition to any local counsel) at
any time for all such Indemnified Parties, and that all such fees and expenses
shall be reimbursed as they are incurred. In the case of any such separate firm
for the Indemnified Parties, such firm shall be designated in writing by the
Indemnified Parties. The Indemnifying Party shall not be liable for any
settlement of any proceeding effected without its written consent, but if
settled with such consent, or if there be a final judgment for the plaintiff,
the Indemnifying Party shall indemnify and hold harmless such Indemnified
Parties from and against any loss or liability (to the extent stated above) by
reason of such settlement or judgment.

(d) Contribution. If the indemnification provided for in this Agreement is
unavailable to an Indemnified Party in respect of any losses, claims, damages,
liabilities or expenses referred to herein, then each such Indemnifying Party,
in lieu of indemnifying such Indemnified Party, shall contribute to the amount
paid or payable by such Indemnified Party as a result of such losses, claims,
damages, liabilities or expenses in such proportion as is appropriate to
reflect the relative fault of Superior and, the First Reserve Funds and the
underwriters in connection with the statements or omissions that resulted in
such losses, claims, damages or liabilities. The relative fault of Superior
and, the First Reserve Funds and the underwriters shall be determined by
reference to, among other things, whether the untrue or alleged untrue
statement of a material fact or the omission or alleged omission to state a
material fact relates to information supplied by such party and the parties'
relative intent, knowledge, access to information and opportunity to correct or
prevent such statement or omission.

Superior and the First Reserve Funds agree that it would not be just and
equitable if contribution pursuant to this Section 3(d) were determined by pro
rata allocation or by any other method of allocation that does not take account
of the equitable considerations referred to in the immediately preceding
paragraph. The amount paid or payable by an Indemnified Party as a result of
the losses, claims, damages or liabilities referred to in the immediately
preceding paragraph shall be deemed to include, subject to the limitations set
forth above, any legal or other expenses reasonably incurred by such
Indemnified Party in connection with investigating or defending any such action
or claim. No person guilty of fraudulent misrepresentation (within the meaning
of Section 11(f) of the Securities Act) shall be entitled to contribution from
any Person who was not guilty of such fraudulent misrepresentation.

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<PAGE>

4. Rule 144. Superior covenants that it will file any reports required to be
filed by it under the Securities Act and the Exchange Act and that it will take
such further action as the First Reserve Funds may reasonably request to the
extent required from time to time to enable the First Reserve Funds to sell
Registrable Securities without registration under the Securities Act within the
limitation of the exemptions provided by Rule 144 under the Securities Act, as
such Rule may be amended from time to time, or any similar rule or regulation
hereafter adopted by the SEC. Upon the request of the First Reserve Funds,
Superior will deliver to the First Reserve Funds a written statement as to
whether it has complied with such reporting requirements.

5. Miscellaneous.

(a) Notices. Any notice or other communication required or permitted
hereunder shall be in writing or by telex, telephone or facsimile transmission
with subsequent written confirmation, and may be personally served or sent by
United States mail and shall be deemed to have been given upon receipt by the
party notified. For purposes hereof, the addresses of the parties hereto (until
notice of a change thereof is delivered as provided in this Section 5) shall be
as set forth opposite each party's name on the signature page hereof.

(b) Termination. This Agreement will terminate upon the earlier of (i) the
date upon which the Company and the First Reserve Funds mutually agree in
writing to terminate this Agreement and (ii) the first date on which there
ceases to be any Registrable Securities.

(c) Transfer of Registration Rights. The rights of Holders hereunder may be
assigned by Holders to a transferee or assignee of any Registrable Securities
provided that Superior is given written notice at the time of or within a
reasonable time after said transfer, stating the name and address of such
transferee or assignee and identifying the securities with respect to which
such registration rights are being assigned; and provided further that the
registration rights granted by Superior in Section 2 may only be transferred
to, and the definition of "Holders" shall only include, transferees who meet
either of the following criteria: such transferee is (i) a holder of 100,000 or
more shares of the Registrable Securities before giving effect to the transfer,
(ii) any partner of the First Reserve Funds, or (iii) a bank, trust company or
other financial institution, any pension plan, any investment company, any
insurance company, any broker or dealer, or any other similar financial
institution or entity, regardless of legal form. To the extent the rights under
Section 2(a) of this Agreement are assigned to multiple Holders, all rights
hereunder that may be exercised by the First Reserve Funds may only be
exercised by one or more Holders holding 50% or more of the Registrable
Securities in the aggregate.

(d) Waivers and Amendments; Noncontractual Remedies; Preservation of
Remedies. This Agreement may be amended, superseded, canceled, renewed or
extended, and the terms hereof may be waived, only by a written instrument
signed by Superior and the Holders of a majority of the Registrable Securities
or, in the case of a waiver, by the party waiving compliance. No delay on the
part of any party in exercising a right, power or privilege hereunder shall
operate as a waiver thereof, nor shall any waiver on the part of any party of
any such right, power or privilege, nor any single or partial exercise of any
such right, power or privilege, preclude a further exercise thereof or the
exercise of any other such right, power or privilege. The rights and remedies
herein provided are cumulative and are not exclusive of any rights or remedies
that any party may otherwise have at law or in equity. The rights and remedies
of any party based upon, arising out of or otherwise in respect of any breach
of any provision of this Agreement shall in no way be limited by the fact that
the act, omission, occurrence or other state of facts upon which any claim of
any such breach is based may also be the subject matter of any other provision
of this Agreement (or of any other Agreement between the parties) as to which
there is no breach.

(e) Severability. If any provision of this Agreement or the applicability of
any such provision to a person or circumstances shall be determined by any
court of competent jurisdiction to be invalid or unenforceable to any extent,
the remainder of this Agreement or the application of such provision to Persons
or circumstances other than those for which it is so determined to be invalid
and unenforceable, shall not be affected thereby, and each provision of this
Agreement shall be valid and shall be enforced to the fullest extent permitted
by law. To the extent permitted by applicable law each party hereto hereby
waives any provision or provisions of law which would otherwise render any
provision of this Agreement invalid, illegal or unenforceable in any respect.

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<PAGE>

(f) Counterparts. This Agreement may be executed by the parties hereto in
separate counterparts and when so executed shall constitute one Agreement,
notwithstanding that all parties are not signatories to the same counterpart.

(g) Governing Law. This Agreement shall be governed and construed in
accordance with the laws of the State of Delaware applicable to agreements made
and to be performed entirely within such state.

(h) Successors and Assigns. Subject to Section 5(c), this Agreement shall be
binding upon and inure to the benefit of and be enforceable by the successors
and assigns of the parties hereto.

(i) Other Registration Rights Agreements. Without the prior written consent
of the First Reserve Funds, Superior will neither enter into any new
registration rights agreements that conflict with the terms of this Agreement
nor permit the exercise of any other registration rights in a manner that
conflicts with the terms of the registration rights granted hereunder.

IN WITNESS WHEREOF, this Agreement has been executed as of the date the
First above written.

Addresses: SUPERIOR ENERGY SERVICES, INC.

1105 Peters Road By:
Harvey, Louisiana 70058 -------------------------------------------
Attn: Terence E. Hall Terence E. Hall
Fax: 504-362-1818 President

600 Travis--Suite 6000 FIRST RESERVE FUND VII, LIMITED PARTNERSHIP
Houston, Texas 77002
Attn: Ben A. Guill By: First Reserve GP VII, L.P., its General
Fax: 713-224-0771 Partner

By: First Reserve Corporation, its General
Partner

By:
-------------------------------------------
Ben A. Guill
President

FIRST RESERVE FUND VIII, LIMITED PARTNERSHIP

By: First Reserve GP VIII, L.P., its General
Partner

By: First Reserve Corporation, its General
Partner

By:
-------------------------------------------
Ben A. Guill
President

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<PAGE>

Exhibit "D"

- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------

REGISTRATION RIGHTS AGREEMENT

Among

SUPERIOR ENERGY SERVICES, INC.

And

THE PARTIES SPECIFIED HEREIN

, 1999

- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------

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<PAGE>

REGISTRATION RIGHTS AGREEMENT

This Registration Rights Agreement (this "Agreement") is entered into this
day of 1999, by and among Superior Energy Services, Inc., a
Delaware corporation ("Superior"), and the parties listed on the signature page
hereof under the heading "Shareholders" (each a "Shareholder" and,
collectively, the "Shareholders").

W I T N E S S E T H:

WHEREAS, pursuant to that certain Agreement and Plan of Merger (the "Merger
Agreement") dated April , 1999 entered into by and between, inter alia,
Superior and Cardinal Holding Corp. ("Cardinal"), each Shareholder received
upon consummation of the merger contemplated by the Merger Agreement, shares of
Superior Common Stock in exchange for the shares of common stock of Cardinal it
holds; and

WHEREAS, the parties hereto desire to set forth certain additional
agreements among them relating to the Registrable Securities owned by the
Shareholders.

NOW, THEREFORE, in consideration of the mutual promises and covenants herein
contained, the parties hereto agree as follows:

1. Defined Terms. The following capitalized terms when used in this
Agreement shall have the following meanings:

"Affiliate" shall have the meaning ascribed by Rule 12b-2 promulgated under
the Exchange Act.

"Common Stock" means the common stock, $.001 par value per share, of
Superior.

"Exchange Act" means the Securities Exchange Act of 1934, as amended.

"First Reserve Funds" means First Reserve Fund VII, Limited Partnership and
First Reserve Fund VIII, Limited Partnership, both Delaware limited
partnerships.

"Fully Diluted Basis" means all issued and outstanding shares of Common
Stock, plus all shares of Common Stock issuable upon the exercise of any
warrants, options or rights to acquire Common Stock which are then outstanding,
regardless of whether such warrants, options or other rights are at the time
exercisable.

"Holders" means the holders of the Registrable Securities in accordance with
the terms of this Agreement.

"Person" means an individual, corporation, partnership, limited liability
company, joint venture, or other business trust, joint stock company, trust,
unincorporated association or other legal entity of whatever nature.

"Piggyback Registration" means a piggyback registration as defined in
Section 2(b) hereof.

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"Registrable Securities" means (a) all shares of Common Stock issued to the
Shareholders pursuant to the Merger Agreement and (b) any other securities
issued by Superior after the date hereof with respect to such shares of Common
Stock by means of exchange, reclassification, dividend, distribution, split up,
combination, subdivision, recapitalization, merger, spin-off, reorganization or
otherwise; provided, however, that as to any Registrable Securities, such
securities shall cease to constitute Registrable Securities for the purposes of
this Agreement if and when (i) a Registration Statement with respect to the
sale of such securities shall have been declared effective by the SEC and such
securities shall have been sold pursuant thereto; (ii) such securities shall
have been sold in compliance with all applicable resale provisions of Rule 144
under the Securities Act; or (iii) such securities cease to be issued and
outstanding for any reason.

"SEC" means the Securities and Exchange Commission, or any successor agency
thereto.

"Securities Act" means the Securities Act of 1933, as amended.

"Shelf Registration" means the shelf registration as defined in Section
2(a).

"Suspension Period" means a period of time (a) commencing on the date on
which Superior provides notice that the Registration Statement for the Shelf
Registration is no longer effective, the Prospectus included therein no longer
complies with the requirements prescribed by Section 10(a) of the Securities
Act or the occurrence of any event requiring the preparation of a supplement or
amendment to the Prospectus included so that, as thereafter delivered to the
purchasers of such Registrable Securities, such Prospectus will not contain an
untrue statement of a material fact or omit to state any material fact required
to be stated therein or necessary to make the statements therein, in light of
the circumstances under which they were made, not misleading, and (b) ending on
the date when each Shareholder either receives copies of the supplemented or
amended Prospectus contemplated by subparagraph (a) above or otherwise is
advised in writing by the Company that the use of the Prospectus may be
resumed.

2. Registration Rights

(a) Shelf Registration. (i) Superior shall prepare and file with the SEC
within 90 days after the date hereof, a Registration Statement relating to the
resale from time to time of the Registrable Securities by the Shareholders in
accordance with the plan and method of distribution set forth in the Prospectus
forming part of such Registration Statement (the "Shelf Registration").

(ii) Superior agrees to use its reasonable best efforts to keep the
Shelf Registration continuously effective until the first to occur of (A)
, 2001 [the second anniversary of the date hereof] and (B) the date
on which all of the Registrable Securities covered by the Shelf
Registration have been sold pursuant thereto or may be sold pursuant to
Rule 144(k) under the Securities Act (or any successor rule thereof).

(iii) Each Shareholder agrees that it will not sell any Registrable
Securities pursuant to the Shelf Registration during any Suspension Period.
Superior agrees to cause any Suspension Period to end as soon as reasonably
practicable.

(iv) No Shareholder shall sell pursuant to the Shelf Registration a
greater number of Registrable Securities than could be sold without
registration under the Securities Act pursuant to Rule 144(e) as presently
in effect.

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<PAGE>

registered on Forms S-4 or S-8)) or (ii) for the account of any of its holders
of Common Stock [other than the First Reserve Funds], then Superior shall give
written notice of such proposed filing to the Shareholders as soon as
practicable (but in no event later than 30 days before the filing date), and
such notice shall offer the Shareholders the opportunity to register such
number of shares of Registrable Securities as the Shareholders may request
within 20 days after receipt by the Shareholders of Superior's notice on the
same terms and conditions as Superior's or such Holder's Common Stock (a
"Piggyback Registration"). The Shareholders will be permitted to withdraw all
or any part of their Registrable Securities from a Piggyback Registration at
any time prior to the date the Registration Statement filed pursuant to such
Piggyback Registration becomes effective with the SEC.

Notwithstanding anything contained herein, if the Piggyback Registration is
an underwritten offering and the lead managing underwriter of such offering
delivers a written opinion to Superior that the size of the offering that
Superior, the First Reserve Funds, the Holders and any other Persons whose
securities are proposed to be included in such offering is such that the
offering or the offering price would be materially and adversely affected,
Superior will include in such Piggyback Registration in the following order of
priority (i) first, all of the Registrable Securities requested by the First
Reserve Funds and the Holders, on a pro rata basis based on the amount of
securities sought to be registered, and (ii) second, the securities proposed to
be registered by any other Persons; provided, that in no event shall the number
of securities included in a Piggyback Registration for Persons pursuant to
Section (c)(ii) be reduced below the lesser of (i) the number of securities
such Persons would be entitled to include in such Piggyback Registration if, in
the event of a reduction of the size of the offering pursuant to this Section
2(c), they were entitled, notwithstanding the terms of this Section 2(c), to
include their securities in such Piggyback Registration on a pro rata basis
with the First Reserve Funds and the Cardinal Holders based on the amount of
securities sought to be registered and (ii) 20% of the total amount of
securities included in such offering for Persons other than Superior and the
Persons, if any, demanding such registration.

(i) Superior will prepare and file with the SEC a Registration Statement
on any form of the SEC for which Superior then qualifies and which counsel
for Superior shall deem appropriate and available for the sale of the
Registrable Securities to be registered thereunder in accordance with the
intended method of distribution thereof.

(ii) Superior will prepare and file with the SEC such amendments and
supplements to the Registration Statement and Prospectus used in connection
therewith as may be necessary to keep the Registration Statement effective
for the period specified in Section 2(a)(ii) and comply with the provisions
of the Securities Act with respect to the disposition of all securities
covered by such Registration Statement during such period in accordance
with the intended methods of disposition by the sellers thereof set forth
in such Registration Statement.

(iii) Superior will, if requested, prior to filing the Registration
Statement or any amendment or supplement thereto, furnish to any
Shareholder, copies thereof, and thereafter furnish to each Shareholder,
such number of copies of such Registration Statement, amendment and
supplement thereto (in each case including all exhibits thereto and
documents incorporated by reference therein) and the Prospectus included in
the Registration Statement as such Shareholder may reasonably request in
order to facilitate the sale of the Registrable Securities.

(iv) Superior will promptly notify each Shareholder when the SEC
declares the Registration Statement effective.

(v) Superior will promptly notify the Shareholders of any stop order
issued or, to Superior's knowledge, threatened to be issued by the SEC and
take all reasonable actions required to prevent the entry of such stop
order or to remove it as soon as practicable if entered.

(vi) Superior will use its reasonable best efforts to qualify the
Registrable Securities for offer and sale under such other securities or
blue sky laws of such jurisdictions in the United States as the
Shareholders

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<PAGE>

reasonably request; provided that Superior will not be required to (A)
qualify generally to do business in any jurisdiction where it would not
otherwise be required to qualify but for this subparagraph 2(c)(vi), (B)
subject itself to taxation in any such jurisdiction or (C) consent to
general service of process in any such jurisdiction.

(vii) Superior will notify the Shareholders of the commencement and
termination of a Suspension Period. The Shareholders agree that during any
Suspension Period, the Shareholders will forthwith discontinue the offer
and sale of Registrable Securities pursuant to the Registration Statement
until receipt by the Shareholders of the copies of such supplemented or
amended Prospectus as may be required and, if so directed by Superior, the
Shareholders will deliver to Superior all copies, other than permanent file
copies, then in the Shareholders' possession of the most recent Prospectus
at the time of receipt of such notice.

(viii) Superior will enter into customary agreements and take such other
actions as are reasonably required in order to expedite or facilitate the
sale of the Registrable Securities pursuant to the Registration Statement.

(ix) Superior will make generally available to the Shareholders, as soon
as reasonably practicable, but not later than the first day of the
fifteenth full calendar month following the effective date of the
Registration Statement, an earnings statement covering a period of 12
months, beginning within three months after the effective date of the
Registration Statement, which earnings statement shall satisfy the
provisions of Section 11(a) of the Securities Act and the rules and
regulations of the SEC thereunder.

(x) Superior will use its reasonable best efforts to cause all such
Registrable Securities to be listed on each securities exchange or market
on which the Common Stock is then listed.

(xi) Superior will furnish to each Shareholder a signed counterpart,
addressed to the Shareholder, of an opinion or opinions of counsel of
Superior and a comfort letter or comfort letters from Superior's
independent public accountants, each in customary form and covering such
matters of the type customarily covered by opinions or comfort letters
delivered to underwriters in underwritten public offerings of securities.

Superior may require the Shareholders to furnish promptly in writing to
Superior such information regarding the Shareholders, the plan of distribution
of the Registrable Securities and other information as Superior may from time
to time reasonably request or as may be legally required in connection with the
Registration Statement.

(d) Registration Expenses. In connection with the Shelf Registration or any
Piggyback Registration, Superior shall pay the following expenses incurred in
connection with such registration: (i) filing fees with the SEC; (ii) fees and
expenses of compliance with securities or blue sky laws (including reasonable
fees and disbursements of counsel in connection with blue sky qualifications of
the Registrable Securities); (iii) printing expenses; (iv) fees and expenses
incurred in connection with the listing of the Registrable Securities; (v) fees
and expenses of counsel and independent certified public accountants for
Superior and (vi) the reasonable fees and expenses of any additional experts
retained by Superior in connection with such registration. The Shareholders
shall pay any underwriting fees, discounts or commissions attributable to the
sale of Registrable Securities and any other out-of-pocket expenses of the
Shareholders.

(e) Participation in Underwritten Registrations. No Person may participate
in any underwritten registered offering contemplated hereunder unless such
Person (a) agrees to sell its securities on the basis provided in any
underwriting arrangements approved by the Persons entitled hereunder to approve
such arrangements and (b) completes and executes all questionnaires, powers of
attorney, indemnities, underwriting agreements and other documents reasonably
required under the terms of such underwriting arrangements and this Agreement.

(f) Holdback Agreements. Any Shareholder owning more than 2% of the Common
Stock on a Fully Diluted Basis agrees not to offer, sell, contract to sell or
otherwise dispose of any Registrable Securities, or any

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securities convertible into or exchangeable or exercisable for such securities,
during the 14 days prior to, and during the 120-day period beginning on, the
effective date of any underwritten Piggyback Registration in which such
Shareholder participates other than the Registrable Securities to be sold
pursuant to such registration statement.

3. Indemnification

(a) Indemnification by Superior. Superior agrees to indemnify and hold
harmless the Shareholders, their respective general partners or managers, if
any, and their respective officers and directors, and each Person, if any, who
controls the Shareholders within the meaning of either Section 15 of the
Securities Act or Section 20 of the Exchange Act from and against any and all
losses, claims, damages, liabilities and expenses arising out of or based upon
any untrue statement or alleged untrue statement of a material fact contained
in any Registration Statement or prospectus relating to the Registrable
Securities or any preliminary Prospectus, or arising out of or based upon any
omission or alleged omission to state therein a material fact required to be
stated therein or necessary to make the statements therein not misleading,
except insofar as such losses, claims, damages, liabilities or expenses are
caused by any untrue statement or omission or alleged untrue statement or
omission based upon information relating to the Shareholders or the plan of
distribution furnished in writing to Superior by or on behalf of the
Shareholders expressly for use therein; provided that the foregoing indemnity
with respect to any preliminary Prospectus shall not inure to the benefit of
the Shareholders if a copy of the most current Prospectus at the time of the
delivery of the Registrable Securities was not provided to the purchaser,
Superior had previously furnished the Shareholders with a sufficient number of
copies of the current Prospectus and such current Prospectus would have cured
the defect giving rise to such loss, claim, damage, liability or expense.
Superior also agrees to indemnify any underwriters of the Registrable
Securities, their officers and directors and each Person who controls such
underwriters on substantially the same basis as that of the indemnification of
the Shareholders provided in this Section 3(a).

(b) Indemnification by The Shareholders. The Shareholders agree to indemnify
and hold harmless Superior, its officers and directors, and each Person, if
any, who controls Superior within the meaning of either Section 15 of the
Securities Act or Section 20 of the Exchange Act to the same extent as the
foregoing indemnity from Superior to the Shareholders, but only with reference
to information relating to the Shareholders or the plan of distribution
furnished in writing by or on behalf of the Shareholders expressly for use in
any Registration Statement or Prospectus, or any amendment or supplement
thereto, or any preliminary Prospectus. The Shareholders also agree to
indemnify and hold harmless any underwriters of the Registrable Securities,
their officers and directors and each Person who controls such underwriters on
substantially the same basis as that of the indemnification of Superior
provided in this Section 3(b).

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for the Indemnified Parties, such firm shall be designated in writing by the
Indemnified Parties. The Indemnifying Party shall not be liable for any
settlement of any proceeding effected without its written consent, but if
settled with such consent, or if there be a final judgment for the plaintiff,
the Indemnifying Party shall indemnify and hold harmless such Indemnified
Parties from and against any loss or liability (to the extent stated above) by
reason of such settlement or judgment.

(d) Contribution. If the indemnification provided for in this Agreement is
unavailable to an Indemnified Party in respect of any losses, claims, damages,
liabilities or expenses referred to herein, then each such Indemnifying Party,
in lieu of indemnifying such Indemnified Party, shall contribute to the amount
paid or payable by such Indemnified Party as a result of such losses, claims,
damages, liabilities or expenses in such proportion as is appropriate to
reflect the relative fault of Superior and the Shareholders and the
underwriters in connection with the statements or omissions that resulted in
such losses, claims, damages, liabilities or expenses, as well as any other
relevant equitable considerations. The relative fault of Superior and the
Shareholders and the underwriters shall be determined by reference to, among
other things, whether the untrue or alleged untrue statement of a material fact
or the omission or alleged omission to state a material fact relates to
information supplied by such party and the parties' relative intent, knowledge,
access to information and opportunity to correct or prevent such statement or
omission.

Superior and the Shareholders agree that it would not be just and equitable
if contribution pursuant to this Section 3(d) were determined by pro rata
allocation or by any other method of allocation that does not take account of
the equitable considerations referred to in the immediately preceding
paragraph. The amount paid or payable by an Indemnified Party as a result of
the losses, claims, damages or liabilities referred to in the immediately
preceding paragraph shall be deemed to include, subject to the limitations set
forth above, any legal or other expenses reasonably incurred by such
Indemnified Party in connection with investigating or defending any such action
or claim. No person guilty of fraudulent misrepresentation (within the meaning
of Section 11(f) of the Securities Act) shall be entitled to contribution from
any Person who was not guilty of such fraudulent misrepresentation.

4. Rule 144. Superior covenants that it will file any reports required to be
filed by it under the Securities Act and the Exchange Act, maintain
registration of the Common Stock under the Exchange Act and take such further
action as the Shareholders may reasonably request to the extent required from
time to time to enable the Shareholders to sell Registrable Securities without
registration under the Securities Act within the limitation of the exemptions
provided by Rule 144 under the Securities Act, as such Rule may be amended from
time to time, or any similar rule or regulation hereafter adopted by the SEC.
Upon the request of the Shareholders, Superior will deliver to the Shareholders
a written statement as to whether it has complied with such reporting
requirements.

5. Miscellaneous.

(b) Termination. This Agreement will terminate upon the earlier of (i) the
date upon which the Company and Shareholders owning a majority of the
Registrable Securities mutually agree in writing to terminate this Agreement
and (ii) the first date on which there ceases to be any Registrable Securities.

(c) Transfer of Registration Rights. The rights of the Holders hereunder may
be assigned by Holders to a transferee or assignee of any Registrable
Securities provided that Superior is given written notice at the time of or
within a reasonable time after said transfer, stating the name and address of
such transferee or assignee and identifying the securities with respect to
which such registration rights are being assigned; and provided

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further that the registration rights granted by Superior in Section 2 may only
be transferred to transferees who meet the following criteria: such transferee
is (i) a holder of 100,000 shares of the Registrable Securities before giving
effect to the transfer, (ii) a family limited partnership, trust or similar
entity formed solely for the benefit of the Holder, for such Holder's spouse,
or their children (any such entity, a "Holder's Trust"), provided that such
Holder acts as sole general partner, trustee, managing member or in such other
unilaterally authoritative capacity as is applicable and retains the sole power
to direct voting and disposition of such Registrable Securities, and provided,
further, that any such Holder's Trust shall agree in a writing in form and
substance reasonably satisfactory to Superior to be bound and shall become
bound by the terms of this Agreement, or (iii) an Affiliate of a Holder.

(d) Waivers and Amendments; Noncontractual Remedies; Preservation of
Remedies. This Agreement may be amended, superseded, canceled, renewed or
extended, and the terms hereof may be waived, only by a written instrument
signed by Superior and Shareholders holding two-thirds or more of the
Registrable Securities in the aggregate or, in the case of a waiver, by the
party waiving compliance. No delay on the part of any party in exercising a
right, power or privilege hereunder shall operate as a waiver thereof, nor
shall any waiver on the part of any party of any such right, power or
privilege, nor any single or partial exercise of any such right, power or
privilege, preclude a further exercise thereof or the exercise of any other
such right, power or privilege. The rights and remedies herein provided are
cumulative and are not exclusive of any rights or remedies that any party may
otherwise have at law or in equity. The rights and remedies of any party based
upon, arising out of or otherwise in respect of any breach of any provision of
this Agreement shall in no way be limited by the fact that the act, omission,
occurrence or other state of facts upon which any claim of any such breach is
based may also be the subject matter of any other provision of this Agreement
(or of any other Agreement between the parties) as to which there is no breach.

(f) Counterparts. This Agreement may be executed by the parties hereto in
separate counterparts and when so executed shall constitute one agreement,
notwithstanding that all parties are not signatories to the same counterpart.

(g) Governing Law. This Agreement shall be governed and construed in
accordance with the laws of the State of Delaware applicable to agreements made
and to be performed entirely within such state.

(h) Successors and Assigns. Subject to Section 5(c), this Agreement shall be
binding upon and inure to the benefit of and be enforceable by the successors
and assigns of the parties hereto.

(i) Registration Rights Agreements. Without the prior written consent of one
or more Shareholders holding two-thirds or more of the Registrable Securities
in the aggregate, Superior will neither enter into any new registration rights
agreements that conflict with the terms of this Agreement nor permit the
exercise of any other registration rights in a manner that conflicts with the
terms of the registration rights granted hereunder.

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<PAGE>

IN WITNESS WHEREOF, this Agreement has been executed as of the date the
First above written.

Addresses: SUPERIOR ENERGY SERVICES, INC.

1105 Peters Road By:
Harvey, Louisiana 70058 -------------------------------------------
Attn: Terence E. Hall Terence E. Hall
Fax: 504-362-1818 President

SHAREHOLDERS:

[Addresses to come]
GENERAL ELECTRIC CAPITAL CORPORATION

By:
-------------------------------------------
Name:
Title:

DLJ INVESTMENT PARTNERS, L.P.

By: DLJ Investment Partners, Inc.,
its Managing General Partner

By:
-------------------------------------------
Name:
Title:

DLJ INVESTMENT FUNDING, INC.

By:
-------------------------------------------
Name:
Title:

By: DLJ LBO Plans Management Corporation

By:
-------------------------------------------
Name:
Title:

HIBERNIA CAPITAL CORPORATION

By:
-------------------------------------------
Name:
Title:

HIBERNIA CORPORATION

By:
-------------------------------------------
Name:
Title:

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<PAGE>

KOTTS CAPITAL HOLDINGS, LIMITED PARTNERSHIP

By:
-------------------------------------------
Name:
Title:

-------------------------------------------
Keith Acker

-------------------------------------------
John R. Gunn

-------------------------------------------
Robert J. Gunn

-------------------------------------------
John F. Kerker

[Other Shareholders to be included at
Closing]

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<PAGE>

Exhibit "E"

- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------

STOCKHOLDERS' AGREEMENT

Among

SUPERIOR ENERGY SERVICES, INC.

And

FIRST RESERVE FUND VII, LIMITED PARTNERSHIP

FIRST RESERVE FUND VIII, LIMITED PARTNERSHIP

, 1999

- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------

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<PAGE>

STOCKHOLDERS' AGREEMENT

This Stockholders' Agreement (this "Agreement") is entered into this
day of 1999, is by and among Superior Energy Services, Inc., a
Delaware corporation ("Superior"), and First Reserve Fund VII, Limited
Partnership, a Delaware limited partnership, and First Reserve Fund VIII,
Limited Partnership, a Delaware limited partnership (each a "First Reserve
Fund" and, collectively, the "First Reserve Funds").

W I T N E S S E T H

WHEREAS, pursuant to that certain Agreement and Plan of Merger (the "Merger
Agreement") dated as of April , 1999 entered into by and among, inter alia,
the First Reserve Funds and Superior, each of the First Reserve Funds received
upon consummation of the Merger contemplated by the Merger Agreement, shares of
Superior Common Stock in exchange for the shares of common stock of Cardinal
Holding Corp. owned by it; and

WHEREAS, the parties hereto desire to set forth certain additional
agreements among them relating to the First Reserve Group's (as defined below)
acquisition and ownership of Superior Securities.

NOW, THEREFORE, in consideration of the mutual promises and covenants herein
contained, the parties hereto agree as follows:

ARTICLE 1

DEFINED TERMS

Section 1.1 Defined Terms. The following capitalized terms when used in this
Agreement shall have the following meanings:

"Affiliate" shall have the respective meanings assigned thereto in Rule 405
as presently promulgated under the Securities Act.

"beneficial ownership" and "group" shall have the respective meanings
assigned thereto in Rules 13d-3 and 13d-5 as presently promulgated under the
Exchange Act.

"Board" means the Board of Directors of Superior.

"Common Stock" means the common stock, $.001 par value per share, of
Superior.

"Director" means any member of the Board.

"Exchange Act" means the Securities Exchange Act of 1934, as amended.

"First Reserve Group" means, collectively, the First Reserve Funds and their
respective Affiliates; provided, however, that a Person shall not be deemed a
member of the First Reserve Group if the only reason that such Person would be
deemed an Affiliate of the First Reserve Funds is because it is (a) a limited
partner of either or both of the First Reserve Funds, (b) an operating company
in which either or both of the First Reserve Funds (and/or any other fund or
funds similar to the First Reserve Funds that is controlled by, controlling or
under common control with the First Reserve Funds) have an investment, but in
which the First Reserve Funds and such other funds do not, in the aggregate (i)
have at least a majority of the voting power (defined in a manner consistent
with the definition of Voting Power set forth herein with respect to Superior)
of the securities of such operating company, or (ii) the contractual right to
designate at least a majority of the members of the board of directors (or
similar governing body) of such operating company, or (c) an Affiliate of an
operating company described in clause (b) who is otherwise an Affiliate of the
First Reserve Group.

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"Fund Directors" shall have the meaning assigned to it in Section 2.1(b)
hereof.

"Independent Director" means, at any time, any Director who both (a) would
qualify as an "independent director" within the meaning given to such term
under the rules of the principal securities exchange or market on which the
Common Stock is then listed or admitted for trading and (b) is not an Affiliate
of either Superior or the first Reserve Funds (other than solely as the result
of being a director of Superior).

"Person" means an individual, partnership, corporation, limited liability
company, business trust, joint stock company, trust, unincorporated
association, joint venture or other entity of whatever nature.

"Registration Rights Agreement" means that certain Registration Rights
Agreement dated the date hereof among Superior and the First Reserve Funds, as
amended, modified or supplemented from time to time.

"Securities Act" means the Securities Act of 1933, as amended.

"Superior Securities" means, collectively, the Common Stock and any class or
series of Superior's preferred stock, and any other securities, warrants or
options or rights of any nature (whether or not issued by Superior) that are
convertible into, exchangeable for, or exercisable for the purchase of, or
otherwise give the holder thereof any rights in respect of common stock, or any
class or series of Superior preferred stock that is entitled to vote generally
for the election of directors or otherwise.

"Termination Date" means , 2009 [ten years from the date of this
Agreement].

"Voting Power" means, at, any measurement date, the total number of votes
that could have been cast in an election of directors of Superior had a meeting
of the stockholders of Superior been duly held based upon a record date as of
the measurement date if all Superior Securities then outstanding and entitled
to vote at such meeting were present and voted to the fullest extent possible
at such meeting.

Section 1.2 Other Definitional Provisions. The words "hereof" "herein" and
"hereunder" and words of similar import when used in this Agreement shall refer
to this Agreement as a whole and not to any particular provision of this
Agreement, and section references are to this Agreement unless otherwise
specified. The meanings given to terms defined herein shall be equally
applicable to both the singular and plural forms of such terms.

ARTICLE 2

BOARD OF DIRECTORS; VOTING

Section 2.1 Election of Directors. Each of the First Reserve Funds hereby
agrees that it shall vote all of the Superior Securities over which it has
voting control and shall take, and cause all other members of the First Reserve
Group to take, all other necessary or desirable actions within its control
(whether in its capacity as a stockholder or otherwise) in order to cause the
following:

(a) The Board shall at all times consist of six Directors.

(b) The election to the Board of: (i) two designees of the First Reserve
Funds (the designees of the First Reserve Funds are collectively referred
to as the "Fund Directors"); (ii) two designees of the First Reserve Funds
who are Independent Directors and acceptable to the Board as evidenced by a
majority vote of the Board; (iii) Superior's Chief Executive Officer; and
(iv) subject to the provisions of Section 2.1(c), such number of
Independent Directors as may be designated from time to time by a majority
vote of the Board in order to complete the Board and fill any vacancies as
contemplated by this Section 2.1(b); provided, however, that if at any time
(A) the First Reserve Funds cease to beneficially own, in the aggregate, at
least 15% of the Voting Power, the First Reserve Funds shall cease to have
the right to designate any Independent Directors pursuant to Section
2.1(b)(ii) and (B) the First Reserve Funds cease to beneficially own, in
the aggregate, at least 5% of the Voting Power, unless the Board otherwise
consents, all of the Fund Directors shall immediately resign.

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(c) The reelection to the Board at the first annual meeting of the
stockholders that is held after the date of this Agreement of one incumbent
Director to be designated by Superior's Chief Executive Officer, which
Director will serve in lieu of one of the Independent Directors to be
elected pursuant to Section 2.1(b)(iv) until the termination of such
Director's term at the second annual meeting of Superior's stockholders.

(d) In the event that any Director designated pursuant to Section 2.1(b)
for any reason ceases to serve as a member of the Board during his term of
office, the Person or Persons who previously designated such Director
pursuant to Section 2.1(b) shall be entitled to designate a successor
Director to fill the vacancy created thereby on the terms and subject to
the conditions of this Section 2.1. If and to the extent that the remaining
members of the Board are entitled to fill vacancies on the Board, upon the
occurrence of any vacancy, the Board will promptly take any actions
necessary to fill such vacancies in accordance with the foregoing
provision.

(e) The First Reserve Funds shall cause their designees on the Board to
take all necessary or appropriate action to assist in the nomination for
election as Directors of such other nominees as may be selected in
accordance with Section 2.1(b), and the First Reserve Funds shall vote, and
cause all Superior Securities beneficially owned by any member of the First
Reserve Group to be voted, for the election of such other nominees as well
as for the election of all nominees of the First Reserve Group designated
by them pursuant to Section 2.1(b).

Section 2.2 Superior Actions. Superior hereby agrees to take all necessary
or appropriate action to assist in the nomination for election as Directors the
person or persons designated pursuant to the provisions of Section 2.1.
Superior hereby agrees not to take any action inconsistent with the provisions
of Section 2.1. Superior shall vote all management proxies in favor of such
nominees, except for such proxies that specifically indicate to the contrary.
Superior's Board shall recommend that its stockholders vote in favor of such
nominees, and shall use reasonable best efforts to solicit from its
stockholders proxies voted in favor of such nominees.

ARTICLE 3

ACQUISITION AND SALE OF SUPERIOR SECURITIES

Section 3.1. Superior Securities. The first Reserve Funds covenant and agree
with Superior that except for the Superior Securities acquired pursuant to the
Merger Agreement, no member of the First Reserve Group shall, directly or
indirectly, acquire any Superior Securities, if the effect of such acquisition,
agreement or other action would be to increase the aggregate beneficial
ownership of Superior Securities by the First Reserve Group (without
considering the Superior Securities acquired by the First Reserve Group
pursuant to the Merger Agreement and any Superior Securities issued pursuant to
a stock split, stock dividend or recapitalization with respect to such Superior
Securities) to 10% or more of either the Voting Power or the number of
outstanding shares of any class or series of Superior Securities.

Section 3.2 Distribution of Superior Securities. Each of the First Reserve
Funds covenants that it shall not, and that it shall cause each other member of
the First Reserve Group not to, directly or indirectly, sell, transfer any
beneficial interest in, or beneficial ownership of, pledge, hypothecate or
otherwise dispose of any Superior Securities, except by conversion, exchange or
exercise of such Superior Securities pursuant to their terms in a manner not
otherwise in violation of Section 3.1 or pursuant to:

(a) a bona fide pledge of or the granting of a security interest or any
other lien or encumbrance in such Superior Securities to a lender that is
not a member of the First Reserve Group to secure a bona fide loan for
money borrowed made to one or more members of the First Reserve Group, the
foreclosure of such pledge or security interest or any other lien or
encumbrance that may be placed involuntarily upon any Superior Securities,
or the subsequent sale or other disposition of such Superior Securities by
such lender or its agent;

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(b) a transfer, assignment, sale or disposition of such Superior
Securities to another member of the First Reserve Group that has signed
this Agreement;

(c) a distribution of Superior Securities to any partner of a First
Reserve Fund; provided that any distributee that is a member of the First
Reserve Group has signed this Agreement; and provided, further that any
arrangements coordinated or initiated by or on behalf of a First Reserve
Fund to assist its limited partners in the sale of Superior Securities
distributed to them must comply with the provisions of this Section 3.2;

(d) sales in public offerings registered under the Securities Act;

(e) sales effected in compliance with the provisions of Rule 144 under
the Securities Act;

(f) other privately negotiated sales of Superior Securities;

(g) upon consummation of or otherwise in connection with a business
combination or similar transaction involving Superior that is approved by
the Board; or

(h) sales provided for in Section 3.6.

Notwithstanding anything to the contrary in this Section 3.2, in effecting any
sale, transfer of any beneficial interest in or other disposition of Superior
Securities pursuant to Sections 3.2(c) and (f), above, the members of the First
Reserve Group selling, transferring or disposing such Superior Securities
shall, unless the Board consents otherwise, use their reasonable best efforts
to refrain from knowingly selling, transferring or disposing of such number of
Superior Securities as represent either the right to acquire or ownership of 5%
or more of the Voting Power to any one Person or group of Persons.

Section 3.3 Proxy Solicitations. As a stockholder, the First Reserve Group
shall vote or cause to be voted all Superior Securities of which any member of
the First Reserve Group is the beneficial owner with respect to each matter
submitted to Superior's stockholders providing for, involving, expected to
facilitate or that could reasonably be expected to result in a business
combination or other change in control of Superior that has not been approved
by the Board (including without limitation the election or removal of one or
more Superior directors or one or more nominees for director proposed by the
Board), in the manner recommended by the Board.

Section 3.4. Groups. Each of the First Reserve Funds covenants that it shall
not, and that no other member of the First Reserve Group shall, join a
partnership, limited partnership, syndicate or other group, or otherwise act in
concert with any other Person, for the purpose of acquiring, holding, voting or
disposing of any Superior Securities, other than the First Reserve Group
itself.

Section 3.5 Takeover Offers. Each of the First Reserve Funds covenants that
it shall not, and that no other member of the First Reserve Group shall,
directly or indirectly advise, assist, act as a financing source for or
otherwise invest in any other Person in connection with a transaction or group
of transactions that would result in a change of control of Superior (as such
term is defined in Superior's 1999 Stock Incentive Plan), publicly disclose any
intention, plan or arrangement inconsistent with the foregoing, or initiate,
induce or attempt to induce any other Person to initiate any proposal that can
reasonably be expected to result in a change of control of Superior. Subject to
compliance with this Section 3.5, on and after the eleventh business day after
commencement of a tender or exchange offer made by a Person who is not a member
of the First Reserve Group for outstanding Superior Securities (a "Qualifying
Offer"), any member of the First Reserve Group may tender or exchange any
Superior Securities beneficially owned by it pursuant to such Qualifying Offer,
provided the Qualifying Offer shall have been approved, or not opposed, by the
Board. If a Qualifying Offer is opposed by the Board, then, from and after the
eleventh business day after commencement of such Qualifying Offer, any member
of the First Reserve Group may tender or exchange shares of Superior Securities
pursuant to such Qualifying Offer only if (i) no tender or exchange of, or
indication of an intention to tender or exchange, Superior Securities is made
by any member of the First Reserve Group earlier than 24 hours prior to the
expiration of any time after which Superior Securities tendered may be treated
less favorably than other Superior Securities tendered or exchanged prior
thereto, and (ii) a binding agreement is

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reached with the bidder or offeror prior to any tender or exchange specifying
that only such number of Superior Securities submitted for tender or exchange
shall be accepted by the bidder or offeror as are equal to (A) the percentage
of such Superior Securities not beneficially owned by the First Reserve Group
that have been tendered or exchanged, multiplied by (B) the total number of
such Superior Securities beneficially owned by the member of the First Reserve
Group. Notwithstanding the foregoing, the provisions of this Section 3.5 shall
terminate upon the earlier of the fifth anniversary of this Agreement or such
time as the First Reserve Group beneficially owns less than 15% of the Voting
Power.

Section 3.6. Limitation on Covenants. Notwithstanding any provision to the
contrary in this Agreement, during any period that any person designated by the
First Reserve Funds to serve as a Director in accordance with the provisions of
Section 2.1(b) is not serving as a Director as a result of the failure of
Superior or the Board to comply with the terms of this Agreement, or if any
such designee is not elected by the stockholders (and Section 2.1(b) is
complied with), then the covenants set forth in this Article 3 shall cease to
be effective during such period; provided, however, that if a person designated
by the First Reserve Funds ceases to be a Director by reason of death or
resignation, then the provisions of this Section 3.6 shall not apply if the
Board appoints First Reserve Funds' designated replacement to fill any such
vacancy within 15 business days after Superior receives notice of such
designation. The provisions of this Section 3.6 shall be in addition to any
other remedies that the First Reserve Funds may have in connection with a
breach of the provisions of Article 2 hereof.

ARTICLE 4

LEGEND AND STOP TRANSFER ORDER

Section 4.1 Legend and Stop Transfer Order. To assist in effectuating the
provisions of this Agreement, the First Reserve Funds hereby consent: (a) to
the placement, on certificates issued with respect to the shares of Common
Stock issued to them pursuant to the Merger Agreement or otherwise promptly
after any Superior Securities become subject to the provisions of this
Agreement, of the following legend on all certificates representing ownership
of Superior Securities owned of record by any member of the First Reserve Group
or by any Person where a member of the First Reserve Group is the beneficial
owner thereof, until such shares are sold, transferred or disposed in a manner
permitted hereby to a Person who is not then a member of the First Reserve
Group;

The shares represented by this certificate are subject to the
provisions of an Agreement among, inter alia, Superior Energy
Services, Inc. and First Reserve Fund VII, Limited
Partnership, and First Reserve Fund VIII, Limited
Partnership, and may not be voted, sold, transferred,
pledged, hypothecated or otherwise disposed of except in
accordance therewith. Copies of the Agreement are on file at
the office of the Corporate Secretary of Superior Energy
Services, Inc.

; and (b) to the entry of stop transfer order with the transfer agent or agents
of Superior Securities against the transfer of Superior Securities except in
compliance with the requirements of this Agreement, or if Superior acts as its
own transfer agent with respect to any Superior Securities, to the refusal by
Superior to transfer any such securities except in compliance with the
requirements of this Agreement. Superior agrees to remove promptly all legends
and stop transfer orders with respect to the transfer of Superior Securities
being made to a Person who is not then a member of the First Reserve Group in
compliance with the provisions of this Agreement.

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ARTICLE 5

MISCELLANEOUS

Section 5.1 Termination. Except as provided in this Section 5.1, the
respective covenants and agreements of the First Reserve Funds and Superior
contained in this Agreement will continue in full force and effect until the
earliest to occur of either of the following: (i) the Termination Date. or (ii)
the sale or other disposition in accordance with this Agreement by the First
Reserve Group of such number of Superior Securities such that, solely as a
result of such sale or other disposition, the First Reserve Group beneficially
owns in the aggregate Superior Securities representing less than 5% of the
Voting Power. Upon any termination of this Agreement pursuant to this Section
5.1 all of the obligations of Superior and the First Reserve Funds hereunder
shall terminate.

Section 5.2 Notices. Any notice or other communication required or permitted
hereunder shall be in writing or by telex, telephone or facsimile transmission
with subsequent written confirmation, and may be personally served or sent by
United States mail and shall be deemed to have been given upon receipt by the
party notified. For purposes hereof, the addresses of the parties hereto (until
notice of a change thereof is delivered as provided in this Section 5.2) shall
be as set forth opposite each party's name on the signature page hereof.

Section 5.3 Waivers and Amendments; Noncontractual Remedies: Preservation of
Remedies. This Agreement may be amended, superseded, canceled, renewed or
extended, and the terms hereof may be waived, only by a written instrument
signed by Superior and the holders of a majority of the Superior Securities
held by the First Reserve Funds of, in the case of a waiver, by the party
waiving compliance. No delay on the part of any party in exercising a right,
power or privilege hereunder shall operate as a waiver thereof, nor shall any
waiver on the part of any party of any such right, power or privilege, nor any
single or partial exercise of any such right, power or privilege, preclude a
further exercise thereof or the exercise of any other such right, power or
privilege. The rights and remedies herein provided are cumulative and are not
exclusive of any rights or remedies that any party may otherwise have at law or
in equity. The rights and remedies of any party based upon, arising out of or
otherwise in respect of any breach of any provision of this Agreement shall in
no way be limited by the fact that the act, omission, occurrence or other state
of facts upon which any claim of any such breach is based may also be the
subject matter of any other provision of this Agreement (or of any other
agreement between the parties) as to which there is no breach.

Section 5.4 Severability. If any provision of this Agreement or the
applicability of any such provision to a person or circumstances shall be
determined by any court of competent jurisdiction to be invalid or
unenforceable to any extent, the remainder of this Agreement or the application
of such provision to persons or circumstances other than those for which it is
so determined to be invalid and unenforceable, shall not be affected thereby,
and each provision of this Agreement shall be valid and shall be enforced to
the fullest extent permitted by law. To the extent permitted by applicable law
each party hereto hereby waives any provision or provisions of law which would
otherwise render any provision of this Agreement invalid, illegal or
unenforceable in any respect.

Section 5.5 Counterparts. This Agreement may be executed by the parties
hereto in separate counterparts and when so executed shall constitute one
Agreement, notwithstanding that all parties are not signatories to the same
counterpart.

Section 5.6 Governing Law. This Agreement shall be governed and construed in
accordance with the laws of the State of Delaware applicable to agreements made
and to be performed entirely within such state, without giving effect to the
conflict of laws principles of such state.

Section 5.7 Successors and Assigns. Subject to Section 4, this Agreement
shall be binding upon and inure to the benefit of and be enforceable by the
successors and assigns of the parties hereto.

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<PAGE>

IN WITNESS WHEREOF, this Agreement has been executed as of the date the
first above written.

Address: SUPERIOR ENERGY SERVICES, INC.

1105 Peters Road By:
Harvey, Louisiana 70058 -------------------------------------------
Attn: Terence E. Hall Terence E. Hall
Fax: 504-362-1818 President

Address: FIRST RESERVE FUND VII, LIMITED PARTNERSHIP

600 Travis, Suite 6000 By: First Reserve GP VII, L.P., its General
Partner

Houston, Texas 77002 By: First Reserve Corporation, its General
Partner

Attn: Ben A. Guill By:
Fax: 713-224-0771 -------------------------------------------
Attn: Ben A. Guill Ben A. Guill
President

FIRST RESERVE FUND VIII, LIMITED PARTNERSHIP

By: First Reserve GP VIII, L.P., its General
Partner

By: First Reserve Corporation, its General
Partner

By:
-------------------------------------------
Ben A. Guill
President

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<PAGE>

Exhibit "F"

AGREEMENT AND RELEASE

This Agreement and Release (the "Release"), dated , 1999, is by the
undersigned Stockholder of Cardinal Holding Corp., a Delaware corporation
("Cardinal").

RECITALS

WHEREAS, Cardinal, Superior Energy Services, Inc. a Delaware corporation
("Superior") and Superior Cardinal Acquisition Company, Inc., a Delaware
corporation, among others, have entered into an Agreement and Plan of Merger
dated as of April , 1999 (the "Merger Agreement"); and

WHEREAS, it is a condition to the consummation of the transactions
contemplated by the Merger Agreement, that the undersigned Stockholder provide
the agreements, representations, waivers and releases provided herein;

NOW THEREFORE, in consideration of the benefits to be derived by Cardinal
and its stockholders pursuant to the transactions contemplated by the Merger
Agreement, the undersigned Stockholder hereby agrees with Superior and Cardinal
and the other stockholders of Cardinal as follows:

1. Definitions. All capitalized terms used herein but not defined herein
shall have the meaning ascribed to such terms in the Merger Agreement.

2. Investment Representations.

(a) The Stockholder will acquire SESI Common Stock in the Merger for
investment for his or its own account and not with a view to, or for sale or
other disposition in connection with, any distribution of all or any part
thereof except (i) in an offering covered by a registration statement filed
with the Securities and Exchange Commission under the Securities Act covering
SESI Common Stock acquired by the Stockholder or (ii) pursuant to an applicable
exemption under the Securities Act. In receiving SESI Common Stock, such
Stockholder is not offering or selling, and will not offer and sell, for SESI
in connection with any distribution of such SESI Common Stock, except in
compliance with Applicable Law, and such Stockholder does not have any
contract, undertaking, agreement or arrangement with any person for the
distribution of SESI Common Stock and will not participate in any undertaking
or in any underwriting of such an undertaking except in compliance with
Applicable Law.

(b) The Stockholder is an "accredited investor" as that term is defined in
Rule 501 of Regulation D under the Securities Act.

(c) The Stockholder has received from SESI and has reviewed with his or its
representatives a copy of each of the SESI Commission Filings that the
Stockholder has requested. The Stockholder has also been afforded access to
information about SESI and SESI's financial position, results of operations,
business, property and management sufficient to enable him or it to evaluate an
investment in SESI Common Stock, and has had the opportunity to ask questions
of and has received satisfactory answers from SESI concerning the foregoing
matters.

(d) The Stockholder understands that shares of SESI Common Stock acquired
pursuant hereto have not been registered under the Securities Act on the basis
that the sale provided for in the Merger Agreement and the issuance of SESI's
Common Stock upon consummation of the Merger is exempt from registration under
the Securities Act, and that SESI's reliance on such exemption is based, in
part, upon such Stockholder's representations set forth herein.

A-75
<PAGE>

3. Conversion of Class C Preferred Stock. The Stockholder acknowledges and
agrees that Section 3.1 of the Cardinal Disclosure Schedules sets forth all
shares of Class C Cardinal Preferred Stock currently owned by the Stockholder
or which may be issuable to the Stockholder prior to the Closing Date. The
execution of this Release shall constitute the "Conversion Notice" contemplated
by the Certificate of Incorporation of Cardinal and the election by the
Stockholder to convert all of the shares of Class C Cardinal Preferred Stock
held by the Stockholder (including any such shares of Class C Cardinal
Preferred Stock which may be issuable to the Stockholder prior to the Closing
Date) into Class A Common Stock, on the basis of one share of Class A Common
Stock for each full share of Class C Cardinal Preferred Stock to be converted
(and to receive cash in lieu of any fractional shares of Class A Common Stock
that would otherwise be issuable pursuant to such conversion). The Stockholder
further acknowledges and agrees that Exhibit 1 attached hereto accurately sets
forth the number of shares of Class A Common Stock which are to be issued to
the Stockholder as a result of such conversion. Attached hereto are the stock
certificates evidencing the Class C Cardinal Preferred Stock to be converted by
the Stockholder, properly endorsed for transfer or accompanied by duly executed
stock powers, in either case executed in blank, or in favor of Cardinal or its
nominee. Notwithstanding anything to the contrary, the foregoing conversion of
the Stockholder's Class C Cardinal Preferred Stock shall be null and void and
have no force and effect if the Merger is not consummated prior to October 15,
1999. [May be omitted if holders of Class C Cardinal Preferred vote in favor of
the Merger and convert directly to Merger Shares.]

4. Release of Cardinal. Such Stockholder hereby releases and discharges
Cardinal, its Subsidiaries, and its officers and directors, from any
obligations (including indemnification obligations) arising under charter
documents, any contract (other than the Merger Agreement), the Delaware General
Corporation Law, or the Louisiana Business Corporation Law, in each case, to
the extent relating to actions or omissions of Cardinal, its Subsidiaries, or
any acts or omissions of the directors, stockholders or officers (former or
present) including those committed while serving in their capacity as
stockholders, directors, officers, employees or similar capacities of Cardinal
or its Subsidiaries prior to the Closing. Each Stockholder further hereby
waives any preemptive rights that he or it may have, or ever had, with respect
to any of the capital stock of Cardinal or any of its Subsidiaries, or any
other claim the Stockholder may have relating to the dilution of its interest
in Cardinal or any other claim to receive any additional securities of
Cardinal, and waives any right that he or it may have under the constituent
documents of Cardinal, or its Subsidiaries, or otherwise to acquire any shares
of capital stock of Cardinal being exchanged pursuant to, or as contemplated
by, the Merger Agreement or any transfer that occurred prior to the date
hereof, including the $45,000,000 of Class A Cardinal Common Stock to be issued
as part of the Equity Contribution as contemplated by the Merger Agreement, the
offering price for which issuance shall be determined on the basis of the price
per share of the Superior Common Stock on April 20, 1999 ($3.875 per share),
and the Stockholder consents and approves of such issuance in all respects,
subject to the right of the Stockholder to acquire a portion of the securities
to be offered in connection with the Equity Contribution to the extent that
such Stockholder has heretofore exercised its preemptive rights provided for in
the Cardinal Stockholders Agreement in connection with such issuance.

5. Acceptance of Merger Shares. The Stockholder hereby acknowledges that the
portion of the Merger Shares received by such Stockholder, and cash in lieu of
any fractional share to which such Stockholder would be entitled pursuant to
the Merger, represents full payment by SESI for the Class A Group Shares and/or
Cardinal Class B Common Stock owned by such Stockholder (including any such
portion delivered into escrow pursuant to the instructions of the Stockholder).
The Stockholder waives all rights of appraisal with respect to Class A Group
Shares and/or Cardinal Class B Common Stock under charter documents, any
contract, the Delaware General Corporation Law, or the Louisiana Business
Corporation Law.

6. Termination of Registration Rights and Stockholder Agreement. By
execution of this Release, the Stockholder hereby agrees that (a) all
registration rights, if any, that such Stockholder has with respect to any of
the capital stock of Cardinal are hereby terminated, and (b) the Stockholders
Agreement by and among Cardinal and its stockholders dated February 26, 1998,
as amended, is hereby terminated and of no other force

A-76
<PAGE>

or effect, except as expressly provided to the contrary in Section 6.1(c) of
such Stockholders Agreement. Notwithstanding anything to the contrary, the
foregoing termination of the Stockholder's registration rights and the Cardinal
Stockholders Agreement shall be null and void and have no force and effect if
the Merger is not consummated prior to October 15, 1999.

7. Representations and Warranties. The Stockholder hereby represents and
warrants to and agrees with SESI as follows:

(a) Ownership. The Stockholder is the record and beneficial owner of the
number of shares of Cardinal Common Stock shown opposite his or its name in
Exhibit 1. The Stockholder has good and valid title to all such shares and
the absolute right to deliver such shares in accordance with the terms
hereof, free and clear of all Liens, except for restrictions on transfer
under federal and state securities laws, and any Liens that may be created
by SESI.

(b) Authority. The Stockholder has full legal right, power and authority
to execute, deliver and perform this Agreement and to consummate the
transactions contemplated hereby and by the Merger Agreement. This
Agreement and each other agreement, instrument or document executed or to
be executed by such Stockholder in connection with the transactions
contemplated by the Merger Agreement, has been duly executed and delivered
by such Stockholder and constitutes, a valid and legally binding obligation
of such Stockholder, enforceable against such Stockholder in accordance
with their respective terms, except that such enforceability may be limited
by applicable bankruptcy, insolvency, reorganization, moratorium and
similar laws affecting creditors' rights generally and equitable principles
which may limit the availability of certain equitable remedies in certain
instances.

(c) Noncontravention. The execution, delivery and performance by the
Stockholder of this Agreement and the consummation by the Stockholder of
the transactions contemplated hereby and by the Merger Agreement do not (i)
result in the creation or imposition of any Lien upon the Cardinal Shares
held by such Stockholder or (ii) violate any Applicable Law binding upon
such Stockholder.

The undersigned Stockholder has executed this Agreement as of the date first
set forth above.

-------------------------------------

A-77
<PAGE>

Exhibit "G"

SUPERIOR ENERGY SERVICES, INC. 1999 STOCK INCENTIVE PLAN
(Intentionally Omitted)

A-78
<PAGE>

Exhibit "H"

FORM OF GARDERE WYNNE SEWELL & RIGGS, L.L.P. OPINION
(Intentionally Omitted)

A-79
<PAGE>

Exhibit "I"

FORM OF JONES, WALKER, WAECHTER, POITEVENT, CARRERE & DENEGRE, L.L.P. OPINION
(Intentionally Omitted)

A-80
<PAGE>

APPENDIX B

June 17, 1999

Board of Directors
Superior Energy Services, Inc.
1105 Peters Road
Harvey, LA 70058

Gentlemen:

You have asked our opinion as investment bankers as to the fairness from a
financial point of view of the terms and consideration to be given to
shareholders of Superior Energy Services, Inc., a Louisiana corporation (the
"Company") by the proposed merger with Cardinal Services, Inc. ("Cardinal").

Johnson Rice & Company L.L.C. ("Johnson Rice"), as a part of its investment
banking business, is regularly engaged in the valuation of businesses and their
securities in connection with mergers and acquisitions, negotiated
underwritings, secondary distributions of listed and unlisted securities,
private placements and valuations for estate, corporate and other purposes.
Neither Johnson Rice nor its principals have a material ownership interest in
the Company or Cardinal.

In connection with the opinion described below, we have reviewed certain
business and financial information relating to the Company and Cardinal and
performed the following functions:

1. Reviewed the historical financial statements of Cardinal over the
last three years;

2. Discussed with certain members of the senior management of the
Company concerning certain business operations, the financial condition and
future prospects of Cardinal;

3. Discussed the terms of the Merger including the methodology used in
determining the Merger value with the senior management of the Company;

4. Analyzed the pro forma effect of the proposed Merger on both Cardinal
and the Company utilizing information provided by Cardinal management and
the Company; and,

5. Considered and analyzed the public information with respect to the
terms of certain other transactions in the Company's industry.

In addition, we have considered such other information and have conducted
such other analyses as we deemed appropriate under the circumstances. In
connection with our review, we have relied upon and assumed the accuracy and
completeness of the financial and other information furnished to us by the
Company and Cardinal and/or their representatives. We have not independently
verified the accuracy or completeness of such information and have not made any
independent evaluation or appraisal of the assets or liabilities of Cardinal.

Our opinion is limited in that it relates solely to the fairness from a
financial point of view of the terms and consideration to be given to the
shareholders of the Company in the Merger. We express no opinion as to the
market value of Cardinal or any security constituting a part thereof, prior to,
on the date of, or after consummation of, the Merger. Our opinion herein is
based upon conditions and circumstances existing on the date hereof, including
current public and private equity markets, and is subject to considerable
uncertainty concerning such conditions and circumstances in the future.

Subject to the foregoing and based upon our experience as investment bankers
and other factors we deemed relevant, we are of the opinion that, as of the
date hereof, the terms and consideration to be received by the Company's
shareholders in the Merger are fair from a financial point of view to the
shareholders of the Company.

Sincerely,

/s/ Johnson Rice & Company L.L.C.

-------------------------------------
Johnson Rice & Company L.L.C.

B-1
<PAGE>

APPENDIX C

AUTHORIZED SHARE AMENDMENT

The Board of Directors of the Superior Energy Services, Inc. (the
"Corporation"), at a meeting on April 13, 1999, did duly adopt resolutions
setting forth the proposed amendment to the first sentence of paragraph FOURTH
of the Certificate of Incorporation of the Corporation, resolving that said
amendment become effective upon consummation of the Merger, declaring said
amendment to be advisable and directing that the proposed amendment be
submitted to a vote of the Corporation's stockholders.

FOURTH: The aggregate number of shares which the Corporation shall have
authority to issue is One Hundred Thirty Million (130,000,000) shares, of
which One Hundred Twenty-Five Million (125,000,000) shares shall be
designated Common Stock, par value $.001 per share, and Five Million
(5,000,000) shares shall be designated Preferred Stock, par value $.01 per
share.

C-1
<PAGE>

APPENDIX D

CITIZENSHIP AMENDMENT

The Board of Directors of the Superior Energy Services, Inc. (the
"Corporation"), at a meeting on April 13, 1999, did duly adopt resolutions
setting forth the proposed amendment adding a new paragraph TWELFTH to the
Certificate of Incorporation of the Corporation, resolving that the amendment
become effective upon consummation of the Merger, declaring said amendment to
be advisable and directing that the proposed amendment be submitted to a vote
of the Corporation's stockholders.

TWELFTH: A. Purpose. The provisions of this Article TWELFTH are intended
to assure that the Corporation remains in continuous compliance with the
citizenship requirements of the Merchant Marine Act, 1920, as amended, the
Merchant Marine Act, 1936, as amended, the Shipping Act, 1916, as amended,
and the regulations promulgated thereunder, as such laws and regulations
are amended from time to time (collectively, the "Maritime Laws"). It is
the policy of the Corporation that Non-Citizens should not Beneficially
Own, individually or in the aggregate, any shares of the Corporation's
Capital Stock in excess of the Permitted Amount. If the Board of Directors
of the Corporation should conclude in its sole discretion at any time that
Non-Citizens have become, or are about to become, the Beneficial Owners,
individually or in the aggregate, of shares of Capital Stock in excess of
the Permitted Amount, the Board of Directors may by resolution duly adopted
declare that any or all of the provisions of subparagraphs C, D and E of
this Article TWELFTH shall apply. Certificates representing shares of the
Capital Stock of the Corporation shall bear a legend concerning the
restrictions on ownership by Non-Citizens contained in this Article
TWELFTH.

B. Definitions. For purposes of this Article TWELFTH, the following
terms shall have the meanings specified below:

1. A Person shall be deemed to be the "Beneficial Owner" of, or to
"Beneficially Own," shares of Capital Stock to the extent such Person
would be deemed to be the beneficial owner thereof pursuant to Rule
13d-3 promulgated by the Securities and Exchange Commission under the
Securities Exchange Act of 1934, as such rule may be amended from time
to time.

2. "Capital Stock" shall mean any class or series of capital stock
of the Corporation other than any class or series of capital stock of
the Corporation that is permitted by the Maritime Administration of the
United States Department of Transportation ("MARAD") to be excluded
from the determination of whether the Corporation is in compliance with
the citizenship requirements of the Maritime Laws.

3. "Citizen" shall mean:

(a) any individual who is a citizen of the United States, by
birth, naturalization or as otherwise authorized by law;

(b) any corporation (i) that is organized under the laws of the
United States or of a state, territory, district or possession
thereof, (ii) not less than 75% of the capital stock of which is
Beneficially Owned by Persons who are Citizens, (iii) whose
president or chief executive officer, chairman of the board of
directors and all officers authorized to act in the absence or
disability of such Persons are Citizens and (iv) of which more than
50% of the number of its directors necessary to constitute a quorum
are Citizens;

(c) any partnership (i) that is organized under the laws of the
United States or of a state, territory, district or possession
thereof, (ii) all general partners of which are Citizens and (iii)
not less than a 75% interest in which is Beneficially Owned by
Persons who are Citizens;

(d) any association or limited liability company (i) that is
organized under the laws of the United States or of a state,
territory, district or possession thereof, (ii) whose president or
chief executive officer (or the Person serving in an equivalent
position), chairman of the board of

D-1
<PAGE>

directors (or equivalent position) and all Persons authorized to act
in the absence or disability of such Persons are Citizens, (iii) not
less than a 75% interest in which or 75% of the voting power of
which is Beneficially Owned by Citizens and (iv) of which more than
50% of the number of its directors (or the Persons serving in
equivalent positions) necessary to constitute a quorum are Citizens;

(e) any joint venture (if not an association, corporation or
partnership) (i) that is organized under the laws of the United
States or of a state, territory, district or possession thereof and
(ii) all co-venturers of which are Citizens; and

(f) any trust (i) that is domiciled in and existing under the
laws of the United States or of a state, territory, district or
possession thereof, (ii) the trustee of which is a Citizen and (iii)
of which not less than a 75% of the beneficial interests in both
income and principal are held for the benefit of Citizens.

4. "Non-Citizen" shall mean any Person other than a Citizen.

5. "Permitted Amount" shall mean shares of Capital Stock that,
individually or in the aggregate (a) have Voting Power not in excess of
23% of Total Voting Power or (b) constitute not more than 23% of the
total number of the issued and outstanding shares of Capital Stock;
provided that, if the Maritime Laws are amended to change the amount of
Capital Stock that a Non-Citizen may own or have the power to vote,
then the Permitted Amount shall be changed to a percentage that is two
percentage points less than the percentage that would cause the
Corporation to be no longer qualified under the Maritime Laws, after
giving effect to such amendment, as a Citizen qualified to (i) engage
in coastwise trade, (ii) participate in MARAD's Title XI or comparable
financing programs, or (iii) participate in operating differential
subsidies or similar programs.

6. "Person" shall mean an individual, partnership, corporation,
limited liability company, trust, joint venture or other entity.

7. "Total Voting Power" shall mean the total number of votes that
may be cast by all outstanding shares of Capital Stock having Voting
Power.

8. "Voting Power" shall mean the power to vote with respect to the
election of the Corporation's directors.

C. Restrictions on Transfer.

1. Any transfer, or attempted or purported transfer, of any shares of the
Capital Stock of the Corporation or any interest therein or right thereof, that
would result in the Beneficial Ownership by Non-Citizens, individually or in
the aggregate, of shares of Capital Stock in excess of the Permitted Amount
will, until such excess no longer exists, be void and ineffective as against
the Corporation and the Corporation will not recognize, with respect to those
shares that caused the Permitted Amount to be exceeded, the purported
transferee as a stockholder of the Corporation for any purpose other than the
transfer by the purported transferee of such excess to a person who is not a
Non-Citizen or to the extent necessary to effect any other remedy available to
the Corporation under this Article TWELFTH.

2. The Board of Directors is hereby authorized to effect any and all
measures necessary or desirable (consistent with applicable law and the
provisions of this Certificate of Incorporation) to fulfill the purpose and
implement the provisions of this Article TWELFTH, including without limitation,
obtaining, as a condition to recording the transfer of shares on the stock
records of the Corporation, affidavits or other proof as to the citizenship of
existing or prospective stockholders on whose behalf shares of the Capital
Stock of the Corporation or any interest therein or right thereof are or are to
be held, or establishing and maintaining a dual stock certificate system under
which different forms of stock certificates representing outstanding shares of
the Capital Stock of the Corporation are issued to Citizens or Non-Citizens.

D-2
<PAGE>

D. Suspension of Voting, Dividend and Distribution Rights with Respect to
Excess Shares. If any shares of Capital Stock in excess of the Permitted Amount
are Beneficially Owned by Non-Citizens, individually or in the aggregate, any
such excess shares determined in accordance with this subparagraph D (the
"Excess Shares"), shall, until such excess no longer exists, not be entitled to
(1) receive any dividends or distributions of assets declared payable or paid
to the holders of the Capital Stock of the Corporation during such period or
(2) vote with respect to any matter submitted to a vote of the stockholders of
the Corporation, and such Excess Shares shall not be deemed to be outstanding
for purposes of determining the vote required on any matter properly submitted
to a vote of the stockholders of the Corporation. At such time as the Permitted
Amount is no longer exceeded, full voting rights shall be restored to any
shares previously deemed to be Excess Shares, and any dividends or
distributions with respect thereto that have been withheld shall be due and
paid to the holders of such shares. If the number of shares of Capital Stock
Beneficially Owned by Non-Citizens is in excess of the Permitted Amount, the
shares deemed to be Excess Shares for purposes of this Article TWELFTH will be
those shares Beneficially Owned by Non-Citizens that the Board of Directors
determines became so Beneficially Owned most recently, and such determination
shall be conclusive.

E. Redemption of Excess Shares. The Corporation shall have the power, but
not the obligation, to redeem Excess Shares subject to the following terms and
conditions:

1. The per share redemption price (the "Redemption Price") to be paid
for the Excess Shares to be redeemed shall be the sum of (a) the average
closing sales price of the Capital Stock and (b) any dividend or
distribution declared with respect to such shares prior to the date such
shares are called for redemption hereunder but which has been withheld by
the Corporation pursuant to subparagraph D. As used herein, the term
"average closing sales price" shall mean the average of the closing sales
prices of the Capital Stock as quoted on the Nasdaq National Market during
the 10 trading days immediately prior to the date the notice of redemption
is given, or if not so quoted, on the New York Stock Exchange, or on any
other national securities exchange selected by the Corporation on which
such Capital Stock is listed, or if not so quoted or listed on any national
securities exchange, the mean between the representative bid and ask prices
as quoted by Nasdaq or another generally recognized reporting system, on
each of such 10 trading days, and if not so quoted, as may be determined in
good faith by the Board of Directors.

2. The Redemption Price may be paid in cash or by delivery of a
promissory note of the Corporation, at the election of the Corporation. Any
such promissory note shall have a maturity of not more than 10 years from
the date of issuance and shall bear interest at the rate equal to the then
current coupon rate of a 10-year Treasury note as such rate is published in
The Wall Street Journal or comparable publication.

3. A notice of redemption shall be given by first class mail, postage
prepaid, mailed not less than 10 days prior to the redemption date to each
holder of record of the shares to be redeemed, at such holder's address as
the same appears on the stock records of the Corporation. Each such notice
shall state (a) the redemption date, (b) the number of shares of Capital
Stock to be redeemed from such holder, (c) the Redemption Price, and the
manner of payment thereof, (d) the place where certificates for such shares
are to be surrendered for payment of the Redemption Price, and (e) that
dividends on the shares to be redeemed will cease to accrue on such
redemption date.

4. From and after the redemption date, dividends on the shares of
Capital Stock called for redemption shall cease to accrue and such shares
shall no longer be deemed to be outstanding and all rights of the holders
thereof as stockholders of the Corporation (except the right to receive
from the Corporation the Redemption Price) shall cease. Upon surrender of
the certificates for any shares so redeemed in accordance with the
requirements of the notice of redemption (properly endorsed or assigned for
transfer if the notice shall so state), such shares shall be redeemed by
the Corporation at the Redemption Price. In case fewer than all shares
represented by any such certificate are redeemed, a new certificate shall
be issued representing the shares not redeemed without cost to the holder
thereof.

5. Such other terms and conditions as the Board of Directors may
reasonably determine.

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<PAGE>

APPENDIX E

SUPERIOR ENERGY SERVICES, INC. 1999 STOCK INCENTIVE PLAN

1. Purpose. The purpose of the 1999 Stock Incentive Plan (the "Plan") of
Superior Energy Services, Inc. ("Superior") is to increase stockholder value
and to advance the interests of Superior and its subsidiaries (collectively,
the "Company") by furnishing a variety of equity incentives (the "Incentives")
designed to attract, retain and motivate officers, directors, key employees,
consultants and advisers and to strengthen the mutuality of interests between
such persons and Superior stockholders. Incentives may consist of opportunities
to purchase or receive shares of common stock, $.001 par value per share, of
Superior (the "Common Stock"), on terms determined under the Plan.

2. Administration.

2.1. Composition. The Plan shall be administered by the compensation
committee of the Board of Directors of Superior, or by a subcommittee of the
compensation committee. The committee or subcommittee that administers the Plan
shall hereinafter be referred to as the "Committee". The Committee shall
consist of not fewer than two members of the Board of Directors, each of whom
shall (a) qualify as a "disinterested person" under Rule 16b-3 under the
Securities Exchange Act of 1934 (the "1934 Act"), as currently in effect or any
successor rule, and (b) qualify as an "outside director" under Section 162(m)
of the Internal Revenue Code (the "Code"), as currently in effect or any
successor provision.

2.2. Authority. The Committee shall have plenary authority to award
Incentives under the Plan, to interpret the Plan, to establish any rules or
regulations relating to the Plan that it determines to be appropriate, to enter
into agreements with participants as to the terms of the Incentives (the
"Incentive Agreements") and to make any other determination that it believes
necessary or advisable for the proper administration of the Plan. Its decisions
in matters relating to the Plan shall be final and conclusive on the Company
and participants. The Committee may delegate its authority hereunder to the
extent provided in Section 3 hereof.

3. Eligible Participants.

3.1. Officers, Key Employees, Consultants and Advisers. Officers (including
officers who also serve as directors of the Company), key employees,
consultants and advisers to the Company shall become eligible to receive
Incentives under the Plan when designated by the Committee. Participants may be
designated individually or by groups or categories, as the Committee deems
appropriate. With respect to participants not subject to Section 16 of the 1934
Act or Section 162(m) of the Code, the Committee may delegate to appropriate
personnel of the Company its authority to designate participants, to determine
the size and type of Incentives to be received by those participants and to
determine or modify performance objectives for those participants.

3.2. Outside Directors. Members of the Board of Directors of Superior who
are not also full-time employees of the Company ("Outside Directors") may
receive awards under the Plan only as specifically provided in Section 9
hereof.

4. Shares Subject to the Plan.

4.1. Number of Shares.

(A) Subject to adjustment as provided in Section 10.6, a total of
[an amount equal to 10% of the outstanding common stock on a fully
diluted basis after giving effect to the Merger] shares of Common Stock are
authorized to be issued under the Plan. Awards that by their terms may be
paid only in cash shall not be counted against such share limit.

(B) Subject to adjustment as provided in Section 10.6, Incentives with
respect to no more than 1,000,000 shares of Common Stock may be granted
through the Plan to a single participant in one calendar year.

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(C) In the event that a stock option or other award granted hereunder
expires or is terminated or cancelled prior to exercise or issuance of
shares, any shares of Common Stock that were issuable thereunder may again
be issued under the Plan.

(D) In the event that shares of Common Stock are issued as Incentives
under the Plan and thereafter are forfeited or reacquired by the Company
pursuant to rights reserved upon issuance thereof, such forfeited and
reacquired shares may again be issued under the Plan.

(E) The number of shares of Common Stock that may be issued pursuant to
incentive stock options under Section 422 of the Code may not exceed
250,000 shares.

(F) Subject to the other provisions of this Section 4.1, the maximum
number of shares of Common Stock with respect to which awards may be issued
in the form of restricted stock and Other Stock-Based Awards (as defined
herein) payable in shares of Common Stock shall be 250,000 shares.

(G) If the exercise price of any option is satisfied by tendering shares
of Common Stock to the Company, only the number of shares issued net of the
shares tendered shall be deemed issued for purposes of determining the
maximum number of shares available for issuance under Section 4.1.A.
However, all of the shares issued upon exercise shall be deemed issued for
purposes of determining the maximum number of shares that may be issued
pursuant to incentive stock options under Section 4.1.E.

(H) Additional rules for determining the number of shares granted under
the Plan may be made by the Committee, as it deems necessary or
appropriate.

4.2. Type of Common Stock. Common Stock issued under the Plan may be
authorized and unissued shares or issued shares held as treasury shares,
including shares acquired in the open market or otherwise obtained by the
Company.

5. Types of Incentives. Incentives may be granted under the Plan to eligible
participants in any of the following forms, either individually or in
combination, (a) incentive stock options and non-qualified stock options; (b)
restricted stock; and (c) other stock-based awards.

6. Stock Options. A stock option is a right to purchase shares of Common
Stock from Superior. Stock options granted under this Plan may be incentive
stock options under Section 422 of the Code, as amended (the "Code") or non-
qualified stock options. Any option that is designated as a non-qualified stock
option shall not be treated as an incentive stock option. Each stock option
granted by the Committee under this Plan shall be subject to the following
terms and conditions:

6.1. Price. The exercise price per share shall be determined by the
Committee, subject to adjustment under Section 10.6; provided that in no
event shall the exercise price be less than the Fair Market Value of a
share of Common Stock on the date of grant.

6.2. Number. The number of shares of Common Stock subject to the option
shall be determined by the Committee, subject to Section 4.1 and subject to
adjustment as provided in Section 10.6.

6.3. Duration and Time for Exercise. The term of each stock option shall
be determined by the Committee. Subject to the automatic acceleration of
exercisability under Section 10.12, each stock option shall become
exercisable at such time or times during its term as shall be determined by
the Committee. Notwithstanding the foregoing, the Committee may accelerate
the exercisability of any stock option at any time.

6.4. Repurchase. Upon approval of the Committee, the Company may
repurchase a previously granted stock option from a participant by mutual
agreement before such option has been exercised by payment to the
participant of the amount per share by which: (i) the Fair Market Value (as
defined in Section 10.13) of the Common Stock subject to the option on the
business day immediately preceding the date of purchase exceeds (ii) the
exercise price.

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6.5. Manner of Exercise. A stock option may be exercised, in whole or in
part, by giving written notice to the Company, specifying the number of
shares of Common Stock to be purchased. The exercise notice shall be
accompanied by the full purchase price for such shares. The option price
shall be payable in United States dollars and may be paid by (a) cash; (b)
uncertified or certified check; (c) unless otherwise determined by the
Committee, by delivery of shares of Common Stock held by the optionee for
at least six months, which shares shall be valued for this purpose at the
Fair Market Value on the business day immediately preceding the date such
option is exercised; (d) delivering a properly executed exercise notice
together with irrevocable instructions to a broker approved in advance by
Superior (with a copy to Superior) to promptly deliver to Superior the
amount of sale or loan proceeds to pay the exercise price; or (e) in such
other manner as may be authorized from time to time by the Committee. In
the case of delivery of an uncertified check upon exercise of a stock
option, no shares shall be issued until the check has been paid in full.
Prior to the issuance of shares of Common Stock upon the exercise of a
stock option, a participant shall have no rights as a stockholder.

6.6. Incentive Stock Options. Notwithstanding anything in the Plan to
the contrary, the following additional provisions shall apply to the grant
of stock options that are intended to qualify as incentive stock options
(as such term is defined in Section 422 of the Code):

(A) Any incentive stock option agreement authorized under the Plan
shall contain such other provisions as the Committee shall deem
advisable, but shall in all events be consistent with and contain or be
deemed to contain all provisions required in order to qualify the
options as incentive stock options.

(B) All incentive stock options must be granted within ten years
from the date on which this Plan is adopted by the Board of Directors.

(D) No incentive stock options shall be granted to any participant
who, at the time such option is granted, would own (within the meaning
of Section 422 of the Code) stock possessing more than 10% of the total
combined voting power of all classes of stock of the employer
corporation or of its parent or subsidiary corporation.

(E) The aggregate Fair Market Value (determined with respect to each
incentive stock option as of the time such incentive stock option is
granted) of the Common Stock with respect to which incentive stock
options are exercisable for the first time by a participant during any
calendar year (under the Plan or any other plan of Superior or any of
its subsidiaries) shall not exceed $100,000. To the extent that such
limitation is exceeded, such options shall not be treated, for federal
income tax purposes, as incentive stock options.

7. Restricted Stock

7.1. Grant of Restricted Stock. The Committee may award shares of restricted
stock to such persons as the Committee determines to be eligible pursuant to
the terms of Section 3. An award of restricted stock may be subject to the
attainment of specified performance goals or targets, restrictions on transfer,
forfeitability provisions and such other terms and conditions as the Committee
may determine, subject to the provisions of the Plan. To the extent restricted
stock is intended to qualify as performance based compensation under Section
162(m) of the Code, it must meet the additional requirements imposed thereby.

7.2. The Restricted Period. The Committee shall establish a period of time
during which the transfer of the shares of restricted stock shall be restricted
(the "Restricted Period"). Each award of restricted stock may have a different
Restricted Period. The expiration of the Restricted Period shall also occur
under the conditions described in Section 10.12 hereof and may occur upon
death, disability or retirement, if so determined by the Committee. A
Restricted Period of at least three years is required, except that if vesting
of the shares is subject

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to the attainment of specified performance goals, a Restricted Period of one
year or more is permitted. The expiration of the Restricted Period shall also
occur as provided under Section 10.12.

7.3. Escrow. The participant receiving restricted stock shall enter into an
Incentive Agreement with the Company setting forth the conditions of the grant.
Certificates representing shares of restricted stock shall be registered in the
name of the participant and deposited with the Company, together with a stock
power endorsed in blank by the participant. Each such certificate shall bear a
legend in substantially the following form:

The transferability of this certificate and the shares of Common
Stock represented by it are subject to the terms and conditions
(including conditions of forfeiture) contained in the Superior Energy
Services, Inc. 1999 Stock Incentive Plan (the "Plan"), and an
agreement entered into between the registered owner and Superior
Energy Services, Inc. thereunder. Copies of the Plan and the agreement
are on file at the principal office of the Company.

7.4. Dividends on Restricted Stock. Any and all cash and stock dividends
paid with respect to the shares of restricted stock shall be subject to any
restrictions on transfer, forfeitability provisions or reinvestment
requirements as the Committee may, in its discretion, prescribe in the
Incentive Agreement.

7.5. Forfeiture. In the event of the forfeiture of any shares of restricted
stock under the terms provided in the Incentive Agreement (including any
additional shares of restricted stock that may result from the reinvestment of
cash and stock dividends, if so provided in the Incentive Agreement), such
forfeited shares shall be surrendered and the certificates cancelled. The
participants shall have the same rights and privileges, and be subject to the
same forfeiture provisions, with respect to any additional shares received
pursuant to Section 10.6 due to a recapitalization, merger or other change in
capitalization.

7.6. Expiration of Restricted Period. Upon the expiration or termination of
the Restricted Period and the satisfaction of any other conditions prescribed
by the Committee, the restrictions applicable to the restricted stock shall
lapse and a stock certificate for the number of shares of restricted stock with
respect to which the restrictions have lapsed shall be delivered, free of all
such restrictions and legends, except any that may be imposed by law, to the
participant or the participant's estate, as the case may be.

7.7. Rights as a Stockholder. Subject to the terms and conditions of the
Plan and subject to any restrictions on the receipt of dividends that may be
imposed in the Incentive Agreement, each participant receiving restricted stock
shall have all the rights of a stockholder with respect to shares of stock
during any period in which such shares are subject to forfeiture and
restrictions on transfer, including without limitation, the right to vote such
shares.

7.8. Performance-Based Restricted Stock. The Committee shall determine at
the time of grant if a grant of restricted stock is intended to qualify as
"performance-based compensation" as that term is used in Section 162(m) of the
Code. Any such grant shall be conditioned on the achievement of one or more
performance measures. The performance measures pursuant to which the restricted
stock shall vest shall be any or a combination of the following: earnings per
share, return on assets, an economic value added measure, stockholder return,
earnings, return on equity, return on investment, cash provided by operating
activities, increase in cash flow, or safety performance of the Company, a
division of the Company or a Subsidiary. For any performance period, such
performance objectives may be measured on an absolute basis or relative to a
group of peer companies selected by the Committee, relative to internal goals
or relative to levels attained in prior years. For grants of restricted stock
intended to qualify as "performance-based compensation," the grants of
restricted stock and the establishment of performance measures shall be made
during the period required under Section 162(m).

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8. Other Stock-Based Awards.

8.1. Grant of Other Stock-Based Awards. The Committee is authorized to grant
"Other Stock-Based Awards," which shall consist of awards the value of which is
based in whole or in part on the value of shares of Common Stock, that is not
an instrument or award specified in Sections 6 of 7 of the Plan. Other Stock-
Based Awards may be awards of shares of Common Stock or may be denominated or
payable in, valued in whole or in part by reference to, or otherwise based on
or related to, shares of Common Stock (including, without limitation,
restricted stock units or securities convertible or exchangeable into or
exercisable for shares of Common Stock ), as deemed by the Committee consistent
with the purposes of the Plan. The Committee shall determine the terms and
conditions of any such Other Stock-Based Award and may provide that such awards
would be payable in whole or in part in cash. An Other Stock-Based Award may be
subject to the attainment of such specified performance goals or targets as the
Committee may determine, subject to the provisions of the Plan. To the extent
that an Other Stock-Based Award is intended to qualify as "performance-based
compensation" under Section 162(m) of the Code, it must meet the additional
requirements imposed thereby. Except in the case of an Other Stock-Based Award
granted in assumption of or in substitution for an outstanding award of a
company acquired by the Company or with which the Company combines, the price
at which securities may be purchased pursuant to any Other Stock-Based Award
granted under this Plan, or the provision, if any, of any such Award that is
analogous to the purchase or exercise price, shall not be less than 100% of the
fair market value of the securities to which such Award relates on the date of
grant. An Other-Stock Based Award, including an outright grant of shares of
Common Stock, may be made in lieu of the payment of cash compensation otherwise
due to a participant.

8.2. Performance-Based Other Stock-Based Awards. The Committee shall
determine at the time of grant if the grant of an Other Stock-Based Award is
intended to qualify as "performance-based compensation" as that term is used in
Section 162(m) of the Code. Any such grant shall be conditioned on the
achievement of one or more performance measures. The performance measures
pursuant to which the Other Stock-Based Award shall vest shall be any or a
combination of the following: earnings per share, return on assets, an economic
value added measure, stockholder return, earnings, return on equity, return on
investment, cash provided by operating activities, increase in cash flow, or
the safety record of the Company, a division of the Company or a Subsidiary.
For any performance period, such performance objectives may be measured on an
absolute basis or relative to a group of peer companies selected by the
Committee, relative to internal goals or relative to levels attained in prior
years. For grants of Other Stock-Based Awards intended to qualify as
"performance-based compensation," the grants of Other Stock-Based Awards and
the establishment of performance measures shall be made during the period
required under Section 162(m) of the Code.

9. Stock Options for Outside Directors

9.1. Eligibility. Each person who serves as an Outside Director shall be
entitled to participate and automatically granted (a) a non-qualified stock
option to acquire 20,000 shares of Common Stock on the day that such person
first becomes a member of the Board and (b) a non-qualified stock option to
acquire 5,000 shares of Common Stock on the day following the 2000 annual
meeting of stockholders and thereafter on the day following subsequent annual
meetings of stockholders, for as long as the Plan remains in effect and shares
of Common Stock remain available for grant under Section 4.1 hereof. The exact
number of shares with respect to which options shall be granted each year to
Outside Directors within the range specified above shall be determined by the
Committee.

9.2. Exercisability of Stock Options. The stock options granted to Outside
Directors under this Section 9 shall become exercisable as follows:

25% of the total number of shares covered by the stock options beginning
one year after the date of grant;

50% of the total number of shares covered by the stock options beginning
two years after the date of grant, less any shares previously issued;

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75% of the total number of shares covered by the stock options beginning
three years after the date of grant, less any shares previously issued;

100% of the total number of shares covered by the stock options beginning
four years after the date of grant, less any shares previously issued;

provided, however, that such stock options shall become immediately exercisable
under (S)10.12 hereof and in the event of retirement from the Board on or after
reaching age 65, death or disability. No stock option granted to an Outside
Director under the terms of this Section 9 may be exercised more than ten years
after the date of grant.

9.3. Exercise Price. The per share exercise price of stock options granted
to Outside Directors shall be equal to 100% of the Fair Market Value as defined
in the Plan, of a share of Common Stock on the date of grant.

9.4. Exercise after Termination of Board Service. In the event that an
Outside Director ceases to serve on the Board of Directors for any reason, the
stock options granted hereunder must be exercised, to the extent otherwise
exercisable at the time of termination of service, within one year from the
date of termination of Board service, but in no event later than ten years
after the date of grant.

10. General.

10.1. Duration. Subject to Section 10.11, the Plan shall remain in effect
until all Incentives granted under the Plan have either been satisfied by the
issuance of shares of Common Stock or terminated under the terms of the Plan
and all restrictions imposed on shares of Common Stock in connection with their
issuance under the Plan have lapsed.

10.2. Transferability of Incentives. Options granted under the Plan shall
not be transferable except:

(A) by will;

(B) by the laws of descent and distribution; or

(C) in the case of stock options only, if permitted by the Committee and
so provided in the Incentive Agreement or an amendment thereto, (i)
pursuant to a domestic relations order, as defined in the Code, (ii) to
Immediate Family Members, (iii) to a partnership in which Immediate Family
Members, or entities in which Immediate Family Members are the sole owners,
members or beneficiaries, as appropriate, are the only partners, (iv) to a
limited liability company in which Immediate Family Members, or entities in
which Immediate Family Members are the sole owners, members or
beneficiaries, as appropriate, are the only members, or (v) to a trust for
the sole benefit of Immediate Family Members. "Immediate Family Members"
shall be defined as the spouse and natural or adopted children or
grandchildren of the participant and their spouses. To the extent that an
incentive stock option is permitted to be transferred during the lifetime
of the participant, it shall be treated thereafter as a non-qualified stock
option.

Any attempted assignment, transfer, pledge, hypothecation or other
disposition of an Incentive, or levy of attachment or similar process upon
the Incentive not specifically permitted herein, shall be null and void and
without effect.

10.3. Dividend Equivalents. In the sole and complete discretion of the
Committee, an Incentive may provide the holder thereof with dividends or
dividend equivalents, payable in cash, shares, other securities or other
property on a current or deferred basis.

10.4. Effect of Termination of Employment or Death. In the event that a
participant, other than an Outside Director, ceases to be an employee of the
Company or to provide services to the Company for any reason, including death,
disability, early retirement or normal retirement, any Incentives may be
exercised, shall vest or shall expire at such times as may be determined by the
Committee in the Incentive Agreement.

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10.5. Additional Condition. Anything in this Plan to the contrary
notwithstanding: (a) the Company may, if it shall determine it necessary or
desirable for any reason, at the time of award of any Incentive or the issuance
of any shares of Common Stock pursuant to any Incentive, require the recipient
of the Incentive, as a condition to the receipt thereof or to the receipt of
shares of Common Stock issued pursuant thereto, to deliver to the Company a
written representation of present intention to acquire the Incentive or the
shares of Common Stock issued pursuant thereto for his own account for
investment and not for distribution; and (b) if at any time the Company further
determines, in its sole discretion, that the listing, registration or
qualification (or any updating of any such document) of any Incentive or the
shares of Common Stock issuable pursuant thereto is necessary on any securities
exchange or under any federal or state securities or blue sky law, or that the
consent or approval of any governmental regulatory body is necessary or
desirable as a condition of, or in connection with the award of any Incentive,
the issuance of shares of Common Stock pursuant thereto, or the removal of any
restrictions imposed on such shares, such Incentive shall not be awarded or
such shares of Common Stock shall not be issued or such restrictions shall not
be removed, as the case may be, in whole or in part, unless such listing,
registration, qualification, consent or approval shall have been effected or
obtained free of any conditions not acceptable to the Company.

10.6. Adjustment. In the event of any recapitalization, stock dividend,
stock split, combination of shares or other change in the Common Stock, the
number of shares of Common Stock then subject to the Plan, including shares
subject to outstanding Incentives, shall be adjusted in proportion to the
change in outstanding shares of Common Stock. In the event of any such
adjustments, the purchase price of any option shall be adjusted as and to the
extent appropriate, in the reasonable discretion of the Committee, to provide
participants with the same relative rights before and after such adjustment.

10.7. Incentive Agreements. The terms of each Incentive shall be stated in
an agreement or notice approved by the Committee. The Committee may also
determine to enter into agreements with holders of options to reclassify or
convert certain outstanding options, within the terms of the Plan, as incentive
stock options or as non-qualified stock options.

10.8. Withholding. At any time that a participant is required to pay to the
Company an amount required to be withheld under the applicable tax laws in
connection with the issuance of shares of Common Stock under the Plan or upon
the lapse of restrictions on shares of restricted stock, the participant may,
subject to the Committee's right of disapproval, satisfy this obligation in
whole or in part by electing (the "Election") to have the Company withhold from
the distribution shares of Common Stock having a value equal to the amount
required to be withheld. The value of the shares withheld shall be based on the
Fair Market Value of the Common Stock on the date that the amount of tax to be
withheld shall be determined (the "Tax Date").

Each Election must be made prior to the Tax Date. The Committee may
disapprove of any Election or may suspend or terminate the right to make
Elections. If a participant makes an election under Section 83(b) of the Code
with respect to shares of restricted stock or an Other Stock-Based Award, an
Election is not permitted to be made.

A participant may also satisfy his or her total tax liability related to the
Incentive by delivering shares of Common Stock that have been owned by the
participant for at least six months. The value of the shares delivered shall be
based on the Fair Market Value of the Common Stock on the Tax Date.

10.9. No Continued Employment. No participant under the Plan shall have any
right, because of his or her participation, to continue in the employ of the
Company for any period of time or to any right to continue his or her present
or any other rate of compensation.

10.10. Deferral Permitted. Distribution of shares of Common Stock or cash to
which a participant is entitled under any Incentive shall be made as provided
in the Incentive Agreement. Payment may be deferred at the option of the
participant if provided in the Incentive Agreement.

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10.11. Amendment of the Plan. The Board may amend or discontinue the Plan at
any time. In addition, no amendment or discontinuance shall, subject to
adjustments permitted under Section 10.6, materially impair, without the
consent of the recipient, an Incentive previously granted, except that the
Company retains the right to (a) convert any outstanding incentive stock option
to a non-qualified stock option, or (b) exercise all rights under Section
10.12.

10.12. Change of Control.

(A) A Change of Control shall mean:

(i) the acquisition by any individual, entity or group (within the
meaning of Section 13(d)(3) or 14(d)(2) of the 1934 Act) of beneficial
ownership (within the meaning of Rule 13d-3 promulgated under the 1934 Act)
of more than 30% of the outstanding shares of the Common Stock; provided,
however, that for purposes of this subsection (i), the following
acquisitions shall not constitute a Change of Control:

a) any acquisition of Common Stock directly from the Company,

b) any acquisition of Common Stock by the Company,

c) any acquisition of Common Stock by any employee benefit plan (or
related trust) sponsored or maintained by the Company or any
corporation controlled by the Company, or

d) any acquisition of Common Stock by any corporation pursuant to a
transaction that complies with clauses a), b) and c) of subsection
(iii) of this Section 10.12(A); or

(ii) individuals who, as of the date this Plan was adopted by the Board
of Directors (the "Approval Date"), constitute the Board (the "Incumbent
Board") cease for any reason to constitute at least a majority of the
Board; provided, however, that any individual becoming a director
subsequent to the Approval Date whose election, or nomination for election
by the stockholders of the Company, was approved by a vote of at least a
majority of the directors then comprising the Incumbent Board shall be
considered a member of the Incumbent Board, unless such individual's
initial assumption of office occurs as a result of an actual or threatened
election contest with respect to the election or removal of directors or
other actual or threatened solicitation of proxies or consents by or on
behalf of a person other than the Incumbent Board; or

(iii) consummation of a reorganization, merger or consolidation, or sale
or other disposition of all or substantially all of the assets of the
Company (a "Business Combination"), in each case, unless, following such
Business Combination,

a) all or substantially all of the individuals and entities who were
the beneficial owners of the outstanding Common Stock and the voting
securities of the Company entitled to vote generally in the election of
directors immediately prior to such Business Combination have direct or
indirect beneficial ownership, respectively, of more than 50% of the
then outstanding shares of common stock, and more than 50% of the
combined voting power of the then outstanding voting securities
entitled to vote generally in the election of directors, of the
corporation resulting from such Business Combination (which, for
purposes of this clause a) and clauses b) and c), shall include a
corporation that as a result of such transaction owns the Company or
all or substantially all of the assets of the Company either directly
or through one or more subsidiaries), and

b) except to the extent that such ownership existed prior to the
Business Combination, no person (excluding any corporation resulting
from such Business Combination or any employee benefit plan or related
trust of the Company or such corporation resulting from such Business
Combination) beneficially owns, directly or indirectly, 20% or more of
the then outstanding shares of common stock of the corporation
resulting from such Business Combination or 20% or more of the combined
voting power of the then outstanding voting securities of such
corporation, and

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c) at least a majority of the members of the board of directors of
the corporation resulting from such Business Combination were members
of the Incumbent Board at the time of the execution of the initial
agreement, or of the action of the Board, providing for such Business
Combination; or

(iv) approval by the stockholders of the Company of a plan of complete
liquidation or dissolution of the Company.

(B) Upon a Change of Control, or immediately prior to the closing of a
transaction that will result in a Change of Control if consummated, all
outstanding options granted pursuant to the Plan shall automatically become
fully exercisable, all restrictions or limitations on any Incentives shall
lapse and all performance criteria and other conditions relating to the payment
of Incentives shall be deemed to be achieved and waived by the Company, without
the necessity of action by any person.

(C) No later than 30 days after the approval by the Board of a Change of
Control of the types described in subsections (iii) or (iv) of Section 10.12(A)
and no later than 30 days after a Change of Control of the type described in
subsections (i) and (ii) of Section 10.12(A), the Committee (as the Committee
was composed immediately prior to such Change of Control and notwithstanding
any removal or attempted removal of some or all of the members thereof as
directors or Committee members), acting in its sole discretion without the
consent or approval of any participant, may act to effect one or more of the
alternatives listed below and such act by the Committee may not be revoked or
rescinded by persons not members of the Committee immediately prior to the
Change of Control:

(i) require that all outstanding options be exercised on or before a
specified date (before or after such Change of Control) fixed by the
Committee, after which specified date all unexercised options shall
terminate,

(ii) make such equitable adjustments to Incentives then outstanding as
the Committee deems appropriate to reflect such Change of Control
(provided, however, that the Committee may determine in its sole discretion
that no adjustment is necessary),

(iii) provide for mandatory conversion of some or all of the outstanding
options held by some or all participants as of a date, before or after such
Change of Control, specified by the Committee, in which event such options
shall be deemed automatically cancelled and the Company shall pay, or cause
to be paid, to each such participant an amount of cash per share equal to
the excess, if any, of the Change of Control Value of the shares subject to
such option or, as defined and calculated below, over the exercise price(s)
of such options or, in lieu of such cash payment, the issuance of Common
Stock or securities of an acquiring entity having a Fair Market Value equal
to such excess, or

(iv) provide that thereafter upon any exercise of an option the
participant shall be entitled to purchase under such option, in lieu of the
number of shares of Common Stock then covered by such option, the number
and class of shares of stock or other securities or property (including,
without limitation, cash) to which the participant would have been entitled
pursuant to the terms of the agreement providing for the reorganization,
merger, consolidation or asset sale, if, immediately prior to such Change
of Control, the participant had been the holder of record of the number of
shares of Common Stock then covered by such options.

(v) For the purposes of paragraph (iii) of this Section 10.12(C) the
"Change of Control Value" shall equal the amount determined by whichever of
the following items is applicable:

a) the per share price to be paid to stockholders of Superior in any
such merger, consolidation or other reorganization.

b) the price per share offered to stockholders of Superior in any
tender offer or exchange offer whereby a Change of Control takes place,
or

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c) in all other events, the Fair Market Value per share of Common
Stock into which such options being converted are exercisable, as
determined by the Committee as of the date determined by the Committee
to be the date of conversion of such options.

d) in the event that the consideration offered to stockholders of
Superior in any transaction described in this Section 10.12 consists of
anything other than cash, the Committee shall determine the fair cash
equivalent of the portion of the consideration offered that is other
than cash.

10.13. Definition of Fair Market Value. Whenever "Fair Market Value" of
Common Stock shall be determined for purposes of this Plan, it shall be
determined as follows: (i) if the Common Stock is listed on an established
stock exchange or any automated quotation system that provides sale quotations,
the closing sale price for a share of the Common Stock on such exchange or
quotation system on the applicable date; (ii) if the Common Stock is not listed
on any exchange or quotation system, but bid and asked prices are quoted and
published, the mean between the quoted bid and asked prices on the applicable
date, and if bid and asked prices are not available on such day, on the next
preceding day on which such prices were available; and (iii) if the Common
Stock is not regularly quoted, the fair market value of a share of Common Stock
on the applicable date as established by the Committee in good faith.

11. Stockholder Approval. Adoption of this plan by the Board of Directors is
subject to approval by the holders of a majority of the Common Stock present
and voting at a meeting of the stockholders to be held no later than the date
of the first annual meeting after the date of the adoption hereof by the Board
of Directors.

E-10
<PAGE>

PROXY
SUPERIOR ENERGY SERVICES, INC.
1105 PETERS ROAD, HARVEY, LOUISIANA 70058

THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
OF SUPERIOR ENERGY SERVICES, INC.

The undersigned hereby appoints Robert S. Taylor, as proxy, and hereby
authorizes him to represent and to vote, as designated below, all shares of
common stock of Superior Energy Services, Inc. ("SUPERIOR") held of record by
the undersigned on June 16, 1999 at the annual meeting of shareholders to be
held on July 15, 1999, or any adjournment thereof.

THIS PROXY, WHEN PROPERLY EXECUTED, WILL BE VOTED IN THE MANNER DIRECTED
HEREIN BY THE UNDERSIGNED STOCKHOLDER. IF NO DIRECTIONS ARE GIVEN, THIS PROXY
WILL BE VOTED FOR PROPOSALS 1 THROUGH 5. THE PROXY HOLDER NAMED ABOVE WILL VOTE
IN HIS DISCRETION ON ANY OTHER MATTER THAT MAY PROPERLY COME BEFORE THE
MEETING.

The Board of Directors recommends a vote FOR the proposals by
checking the box marked "FOR":

PLEASE MARK, SIGN, DATE AND RETURN THIS PROXY PROMPTLY USING THE ENCLOSED
ENVELOPE.
(To be Signed on Reverse Side)

SEE REVERSE
SIDE

X Please mark your
votes as in this
example.

1. Election of FOR WITHHELD
six Directors [_] [_]

To withhold authority to vote for any specific nominee(s), mark the "FOR" box
and write the name of each such nominee on the line provided below

- -------------------------------------------------------------------------------
Nominees: Terence E. Hall William E. Macaulay
Justin L. Sullivan Ben A. Guill
Richard A. Bachman Robert E. Rose

2. Approval of the issuance of a number of shares of SUPERIOR common stock
equal to 51% of the outstanding shares after giving effect to such issuance,
calculated on a fully diluted basis, in accordance with the terms of an
Agreement and Plan of Merger, pursuant to which a wholly-owned subsidiary of
SUPERIOR would merge (the "Merger") with and into CARDINAL HOLDING CORP.
("CARDINAL") and CARDINAL would become a wholly-owned subsidiary of SUPERIOR;

FOR AGAINST ABSTAIN
[_] [_] [_]

3. Approval of an amendment to SUPERIOR'S Certificate of Incorporation to
increase the number of authorized shares of SUPERIOR common stock from
40,000,000 to 125,000,000;

FOR AGAINST ABSTAIN
[_] [_] [_]

4. Approval of an amendment to SUPERIOR'S Certificate of Incorporation to
regulate the ownership of the capital stock of SUPERIOR by persons who are
not citizens of the United States;

FOR AGAINST ABSTAIN
[_] [_] [_]

5. Approval of the Superior Energy Services, Inc. 1999 Stock Incentive Plan;
and

FOR AGAINST ABSTAIN
[_] [_] [_]

6. In their discretion, to transact such other business as may properly come
before the meeting and any adjournments thereof.

SIGNATURE(S) ______________________________________________ DATE____________
NOTE: Please sign exactly as name appears hereon. When signing as attorney,
executor, administrator, trustee or guardian, please give full title as
such. If a corporation, please sign full corporate name by president or
other authorized officer. If a partnership, please sign in partnership
name by authorized person.