##### Table of Contents



UNITED STATES SECURITIES AND EXCHANGE COMMISSION
 WASHINGTON, D.C. 20549
 FORM 10-Q
 þ
    
    QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
 For the quarterly period ended September 30, 2005
 OR
 o
    
    TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
 Commission File Number 000-51435
 SUPERIOR WELL SERVICES, INC.
  Delaware
(State or other jurisdiction
of incorporation or organization)
    
    20-2535684
(I.R.S. Employer
Identification No.)
 1380 Rt. 286 East, Suite #121
Indiana, Pennsylvania 15701
  (724) 465-8904
 o þ
 o þ
 o þ




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SUPERIOR WELL SERVICES, INC. QUARTERLY REPORT ON FORM 10-Q
FOR THE QUARTERLY PERIOD ENDED SEPTEMBER 30, 2005
 TABLE OF CONTENTS
 PAGEPART I FINANCIAL INFORMATIONItem 1. Unaudited Financial Statements- Unaudited Consolidated Balance Sheets
    
    
    1- Unaudited Consolidated Statement of Income
    
    
    2- Unaudited Consolidated Statement of Capital and Stockholders Equity
    
    
    3- Unaudited Consolidated Statement of Cash Flows
    
    
    4- Notes to Unaudited Consolidated Financial Statements
    
    
    5Item 2. Managements Discussion and Analysis of Financial Condition
and Results of Operations
    
    
    12Item 3. Quantitative and Qualitative Disclosures about Market Risk
    
    
    25Item 4. Controls and Procedures
    
    
    25PART II OTHER INFORMATIONItem 1. Legal Proceedings
    
    
    27Item 2. Use of Proceeds
    
    
    27Item 6. Exhibits
    
    
    27Signatures
    
    
    28Index to Exhibits
    
    
    29Exhibit 31.1Exhibit 31.2Exhibit 32.1Exhibit 32.2
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##### Table of Contents



PART I  FINANCIAL INFORMATION
 
 Item 1. Financial Statements.
 SUPERIOR WELL SERVICES, INC. AND SUBSIDIARIES
 
 CONSOLIDATED BALANCE
SHEETS
(Unaudited)
 September 30,December 31,
    
    
    20052004
    
    
    (Superior Well(Partnerships)
    
    
    Services, Inc.)(in thousands, except per share data)Current Assets:Cash and cash equivalents
    
    $
    1,544
    
    
    $
    17,920Trade accounts receivable
    
    
    11,292
    
    
    
    25,169Inventories
    
    
    1,835
    
    
    
    2,892Prepaid expenses
    
    
    336
    
    
    
    541Deferred income taxes
    
    
    
    
    
    
    500Total current assets
    
    
    15,007
    
    
    
    47,022Property, Plant and Equipment:Land
    
    
    320
    
    
    
    420Building and improvements
    
    
    961
    
    
    
    1,759Equipment and vehicles
    
    
    53,347
    
    
    
    72,761Construction in progress
    
    
    792
    
    
    
    7,73755,420
    
    
    
    82,677Accumulated depreciation
    
    
    (14,826
    )
    
    
    (20,774
    )Total property, plant and equipment, net
    
    
    40,594
    
    
    
    61,903Intangible assets, net of accumulated
amortization of $380 and $594,
respectively
    
    
    1,045
    
    
    
    831Other assets
    
    
    36
    
    
    
    64Total assets
    
    $
    56,682
    
    
    $
    109,820Current Liabilities:Accounts payable-trade
    
    $
    4,240
    
    
    $
    7,476Income taxes payable
    
    
    
    
    
    
    2,226Notes payable
    
    
    3,955
    
    
    
    Current portion of long-term debt
    
    
    1,860
    
    
    
    200401(k) plan contribution and withholding
    
    
    651
    
    
    
    541Accrued wages and health benefits
    
    
    665
    
    
    
    1,438Other accrued liabilities
    
    
    399
    
    
    
    800Total current liabilities
    
    
    11,770
    
    
    
    12,681Long-term debt
    
    
    11,093
    
    
    
    1,293Deferred income taxes
    
    
    
    
    
    
    9,134Partners capital
    
    
    33,819Total liabilities and partners capital
    
    $
    56,682
    
    
    
    Stockholders Equity:Common stock, voting, par $.01 per
share, 70,000,000 shares authorized,
19,376,667 shares issued
    
    
    
    
    
    
    194Additional paid-in capital
    
    
    
    
    
    
    91,757Retained deficit
    
    
    
    
    
    
    (5,239
    )Total stockholders equity
    
    
    
    
    
    
    86,712Total liabilities and stockholders equity
    
    
    
    
    
    $
    109,820
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SUPERIOR WELL SERVICES, INC. AND SUBSIDIARIES
 
 CONSOLIDATED STATEMENT OF INCOME
(Unaudited)
 Three Months Ended
    
    
    Nine Months EndedSeptember 30,
    
    
    September 30,2005
    
    
    
    
    
    
    20052004
    
    
    (Superior Well
    
    
    2004
    
    
    (Superior Well(Partnerships)
    
    
    Services, Inc.)
    
    
    (Partnerships)
    
    
    Services, Inc.)(in thousands)Revenue
    
    $
    20,738
    
    
    $
    34,934
    
    
    $
    53,280
    
    
    $
    90,544Cost of revenue
    
    
    14,271
    
    
    
    23,303
    
    
    
    36,877
    
    
    
    60,995Gross profit
    
    
    6,467
    
    
    
    11,631
    
    
    
    16,403
    
    
    
    29,549Selling, general and administrative
expenses
    
    
    3,447
    
    
    
    5,491
    
    
    
    8,740
    
    
    
    13,449Operating income
    
    
    3,020
    
    
    
    6,140
    
    
    
    7,663
    
    
    
    16,100Interest expense
    
    
    (68
    )
    
    
    (169
    )
    
    
    (171
    )
    
    
    (552
    )Other (expense) income
    
    
    9
    
    
    
    246
    
    
    
    (121
    )
    
    
    285Income before income taxes
    
    
    2,961
    
    
    
    6,217
    
    
    
    7,371
    
    
    
    15,833Income taxesCurrent
    
    
    
    
    
    
    2,226
    
    
    
    
    
    
    
    2,226Deferred
    
    
    
    
    
    
    8,634
    
    
    
    
    
    
    
    8,63410,860
    
    
    
    
    
    
    
    10,860Net income
    
    $
    2,961
    
    
    $
    (4,643
    )
    
    $
    7,371
    
    
    $
    4,973Pro forma data (unaudited):Historical income before taxes
    
    $
    2,961
    
    
    
    
    
    
    $
    7,371Pro forma income tax expense
    
    
    1,109
    
    
    
    
    
    
    
    3,022Net income adjusted for pro forma
income tax expense
    
    $
    1,852
    
    
    
    
    
    
    $
    4,349Earnings per common share:Basic and fully diluted
    
    
    
    
    
    $
    (0.24
    )
    
    
    
    
    
    $
    0.26Pro forma basic and fully diluted
    
    $
    0.10
    
    
    
    
    
    
    $
    0.22
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SUPERIOR WELL SERVICES, INC. AND SUBSIDIARIES
 
 CONSOLIDATED STATEMENT OF CHANGES IN CAPITAL AND STOCKHOLDERS EQUITY
(Unaudited)
 Partnerships
    
    
    Superior Well Services, Inc.Accumulated
    
    
    
    
    
    
    
    
    
    
    AdditionalPartners
    
    
    Comprehensive
    
    
    Comprehensive
    
    
    Less: Notes
    
    
    Common
    
    
    Paid-in
    
    
    RetainedCapital
    
    
    Income
    
    
    Income (Loss)
    
    
    Receivable
    
    
    Stock
    
    
    Capital
    
    
    Deficit
    
    
    Total(in thousands)BALANCE, DECEMBER 31, 2004
    
    $
    33,885
    
    
    $
    
    
    
    $
    2
    
    
    $
    (68
    )
    
    $
    
    
    
    $
    
    
    
    $
    
    
    
    $
    33,819Net income prior to reorganization
(unaudited)
    
    
    10,212
    
    
    
    10,212
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    10,212Termination of interest rate swap
(unaudited)
    
    
    
    
    
    
    (2
    )
    
    
    (2
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (2
    )Total comprehensive income
    
    
    
    
    
    $
    10,210Distributions to partners (unaudited)
    
    
    (13,719
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (13,719
    )Collection of notes receivable
(unaudited)
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    68
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    68Reorganization effected through
contribution of partnership
interests to Superior Well Services,
Inc. (unaudited)
    
    
    (30,378
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    141
    
    
    
    30,237
    
    
    
    
    
    
    
    Issuance of common stock in
connection with initial public
offering (unaudited)
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    53
    
    
    
    61,520
    
    
    
    
    
    
    
    61,573Net (loss) after reorganization
(unaudited)
    
    
    
    
    
    $
    (5,239
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (5,239
    )
    
    
    (5,239
    )BALANCE, SEPTEMBER 30, 2005
(unaudited)
    
    $
    
    
    
    
    
    
    
    $
    
    
    
    $
    
    
    
    $
    194
    
    
    $
    91,757
    
    
    $
    (5,239
    )
    
    $
    86,712
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SUPERIOR WELL SERVICES, INC. AND SUBSIDIARIES
 
 CONSOLIDATED STATEMENT OF CASH FLOWS
(Unaudited)
 Nine Months EndedSeptember 3020052004
    
    
    (Superior Well(Partnerships)
    
    
    Services, Inc.)(in thousands)Cash flows from operations:Net income
    
    $
    7,371
    
    
    $
    4,973Adjustments to reconcile net income to net
cash provided by
operations:Deferred income taxes
    
    
    
    
    
    
    8,634Depreciation and amortization
    
    
    3,493
    
    
    
    6,162Loss on disposal of equipment
    
    
    183
    
    
    
    Changes in assets and liabilities:Trade accounts receivable
    
    
    (6,091
    )
    
    
    (13,877
    )Inventory
    
    
    (840
    )
    
    
    (1,057
    )Prepaid expenses and other assets
    
    
    190
    
    
    
    (205
    )Accounts payable
    
    
    1,403
    
    
    
    3,236Income taxes payable
    
    
    
    
    
    
    2,226401(k) plan contribution and
withholding
    
    
    (85
    )
    
    
    (110
    )Accrued wages and health benefits
    
    
    814
    
    
    
    773Other accrued liabilities
    
    
    (118
    )
    
    
    401Net cash provided by operations
    
    
    6,320
    
    
    
    11,156Cash flows from investing:Expenditure for property, plant and
equipment
    
    
    (14,554
    )
    
    
    (27,257
    )Proceeds (expenditures) for other assets
    
    
    295
    
    
    
    (88
    )Notes receivable repayments
    
    
    
    
    
    
    68Proceeds from notes receivable
    
    
    7
    
    
    
    Net cash used in investing
    
    
    (14,252
    )
    
    
    (27,277
    )Cash flows from financing:Principal payments on long-term debt
    
    
    (227
    )
    
    
    (12,180
    )Proceeds from long-term borrowings
    
    
    901
    
    
    
    720Proceeds from notes payable
    
    
    15,182
    
    
    
    10,511Payments on notes payable
    
    
    (2,357
    )
    
    
    (14,466
    )Net proceeds from initial public offering
    
    
    
    
    
    
    61,631Distributions to partners
    
    
    (3,647
    )
    
    
    (13,719
    )Net cash provided by financing
    
    
    9,852
    
    
    
    32,497Net increase in cash and cash equivalents
    
    
    1,920
    
    
    
    16,376Cash and cash equivalents, beginning of
period
    
    
    1,293
    
    
    
    1,544Cash and cash equivalents, end of period
    
    $
    3,213
    
    
    $
    17,920Supplemental disclosure of cash flow data:Interest paid
    
    $
    171
    
    
    $
    552
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SUPERIOR WELL SERVICES, INC. AND SUBSIDIARIES
 
 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)
 1. Organization
     2. Summary of Significant Accounting Policies
 Basis of Presentation
   5




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SUPERIOR WELL SERVICES, INC. AND SUBSIDIARIES
 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)
 Estimates and Assumptions
  Cash and Cash Equivalents
  Trade Accounts Receivable
  Property, Plant and Equipment
    Revenue Recognition
  6




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SUPERIOR WELL SERVICES, INC. AND SUBSIDIARIES
 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)
 Inventories
  Insurance Expense
  Income Taxes
 Accounting for Income Taxes.
 Interest Rate Risk Management
  Fair Value of Financial Instruments
    Intangible Assets
  7




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SUPERIOR WELL SERVICES, INC. AND SUBSIDIARIES
 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)
 Concentration of Credit Risk
  Weighted
Average Shares Outstanding
  Recently Issued Guidance
   3. Notes Receivable  Limited Partners
  4. Debt
   8




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SUPERIOR WELL SERVICES, INC. AND SUBSIDIARIES
 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)
   2004
    
    
    2005Notes payable to sellers with nominal interest rates
due through December 2010, collateralized by specific
buildings and equipment
    
    $
    127
    
    
    $
    327Mortgage notes payable to a bank with interest at the
banks prime lending rate minus 1%, payable in
monthly installments of $7,111 plus interest through
January 2019, collateralized by real property
    
    
    826
    
    
    
    1,166Note payable to a bank with interest at LIBOR plus
1.2%, due in monthly installments of $142,857 plus
interest and a balloon payment of $3.4 million due
January 2010, collateralized by all of the equipment
    
    
    12,000
    
    
    
    12,953
    
    
    
    1,493Less  Payments due within one year
    
    
    1,860
    
    
    
    200Total
    
    $
    11,093
    
    
    $
    1,293
 5. Note Payable
  6. Income taxes
    Date ofreorganization
    
    

    September 30, 2005Current:State and local
    
    
    
    
    
    $
    369U.S. federal
    
    
    
    
    
    
    1,857Total current
    
    
    
    
    
    
    2,226Deferred:State and local
    
    $
    1,421
    
    
    $
    1,426U.S. federal
    
    
    7,156
    
    
    
    7,208Total deferred
    
    
    8,577
    
    
    
    8,634Provision for income tax expense
    
    $
    8,577
    
    
    $
    10,860
 9




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SUPERIOR WELL SERVICES, INC. AND SUBSIDIARIES
 NOTES
TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)
  Date of
    
    
    September 30,reorganization
    
    
    2005Deferred tax assets:Accrued expenses and other
    
    $
    297
    
    
    $
    474Allowance for doubtful accounts receivable
    
    
    8
    
    
    
    26Total deferred tax assets
    
    
    305
    
    
    
    500Deferred tax liabilities:Depreciation differences on property, plant and equipment
    
    
    (8,882
    )
    
    
    (9,134
    )Total deferred
    
    
    (8,882
    )
    
    
    (9,134
    )Net deferred taxes
    
    $
    8,577
    
    
    $
    8,634
  Period ended September 30, 2005Three months
    
    
    Nine monthsended
    
    
    endedIncome before income taxes
    
    $
    6,217
    
    
    $
    15,833Statutory U.S. income tax rate
    
    
    35
    %
    
    
    35
    %Tax expense using statutory U.S. income tax rate
    
    $
    2,176
    
    
    $
    5,542State income taxes
    
    
    369
    
    
    
    369Deferred income taxes established at date of reorganization
    
    
    8,577
    
    
    
    8,577Pre-tax income prior to reorganization not subject to
federal income taxes
    
    
    (208
    )
    
    
    (3,574
    )Other
    
    
    (54
    )
    
    
    (54
    )Income tax expense
    
    $
    10,860
    
    
    $
    10,860Effective income tax rate
    
    
    175
    %
    
    
    69
    %
 7. 401(k) Plan
  10




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SUPERIOR WELL SERVICES, INC. AND SUBSIDIARIES
 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)
 8. Related-Party Transactions
     9. Commitments and Contingencies
     10. Stock Incentive Plan
  11




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Item 2. Managements Discussion and Analysis of Financial Condition and Results of Operations.
 The following discussion and analysis should be read in conjunction with the unaudited
consolidated financial statements and notes thereto included elsewhere in this report. The terms
Superior Well Services, Superior, we, us and our refer to Superior Well Services, Inc.,
together with its two operating partnerships, Superior Well Services, Ltd. and Bradford Resources,
Ltd., and their general partner, Superior GP, L.L.C., each of which became wholly owned
subsidiaries of Superior Well Services, Inc. in connection with its initial public offering.
 Overview
   Three Months Ended September 30,
    
    
    Nine Months Ended September 30,2004
    
    
    2005
    
    
    2004
    
    
    2005Technical pumping services
    
    $
    18,509
    
    
    
    89.3
    %
    
    $
    31,560
    
    
    
    90.3
    %
    
    $
    47,649
    
    
    
    89.4
    %
    
    $
    81,820
    
    
    
    90.3
    %Down-hole surveying services
    
    
    2,229
    
    
    
    10.7
    
    
    
    3,374
    
    
    
    9.7
    
    
    
    5,631
    
    
    
    10.6
    
    
    
    8,724
    
    
    
    9.7Total revenue
    
    $
    20,738
    
    
    
    100.0
    %
    
    $
    34,934
    
    
    
    100.0
    %
    
    $
    53,280
    
    
    
    100.0
    %
    
    $
    90,544
    
    
    
    100.0
    %
  Technical Pumping Services
  Down-Hole Surveying Services
  12




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How We Generate Our Revenue
   How We Evaluate Our Operations
  Operating Income per Operating Region.
   Material and Labor Expenses as a Percentage of Revenue.
   13




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Selling, General and Administrative Expenses as a Percentage of Revenue.
  EBITDA.
  
    
    as a measure of operating performance because it assists us in comparing our performance
on a consistent basis, since it removes the impact of our capital structure and asset base
from our operating results;
    
    as a measure for planning and forecasting overall expectations and for evaluating actual
results against such expectations;
    
    to assess compliance with financial ratios and covenants included in credit facilities;
    
    in communications with lenders concerning our financial performance; and
    
    to evaluate the viability of potential acquisitions and overall rates of return.
 How We Manage Our Operations
  Service Crew Performance.
  Equipment Maintenance Performance.
  14




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Inventory Turnover Rates.
  Customer Satisfaction.
  Safety Performance.
  Our Growth Strategy
   Three Months Ended September 30,
    
    
    Nine Months Ended September 30,2004
    
    
    2005
    
    
    2004
    
    
    2005RegionAppalachian
    
    $
    12,571
    
    
    
    60.6
    %
    
    $
    19,297
    
    
    
    55.2
    %
    
    $
    33,809
    
    
    
    63.5
    %
    
    $
    50,762
    
    
    
    56.1
    %Southeast
    
    
    5,675
    
    
    
    27.4
    
    
    
    8,954
    
    
    
    25.6
    
    
    
    15,453
    
    
    
    29.0
    
    
    
    24,338
    
    
    
    26.9Rocky Mountain
    
    
    
    
    
    
    
    
    
    
    1,238
    
    
    
    3.6
    
    
    
    
    
    
    
    
    
    
    
    1,594
    
    
    
    1.7Mid-Continent
    
    
    2,492
    
    
    
    12.0
    
    
    
    5,445
    
    
    
    15.6
    
    
    
    4,018
    
    
    
    7.5
    
    
    
    13,850
    
    
    
    15.3Total
    
    $
    20,738
    
    
    
    100.0
    %
    
    $
    34,934
    
    
    
    100.0
    %
    
    $
    53,280
    
    
    
    100.0
    %
    
    $
    90,544
    
    
    
    100.0
    %
  15




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Cautionary Statement Regarding Forward-Looking Statements
  
    
    a decrease in domestic spending by the oil and natural gas exploration and production industry;
    
    a decline in or substantial volatility of crude oil and natural gas commodity prices;
    
    the loss of one or more significant customers;
    
    the loss of or interruption in operations of one or more key suppliers;
    
    the incurrence of significant costs and liabilities in the future resulting from our
failure to comply with new or existing environmental regulations or an accidental release
of hazardous substances into the environment; and
    
    other financial, operational and legal risks and uncertainties detailed from time to
time in our Securities and Exchange Commission filings.
  Our Results of Operations
  16




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Three Months Ended September 30,
    
    
    Nine Months Ended September 30,2004
    
    
    2005
    
    
    2004
    
    
    2005Statement of Operations Data:Revenues:Technical pumping services
    
    $
    18,509
    
    
    $
    31,560
    
    
    $
    47,649
    
    
    $
    81,820Down-hole surveying services
    
    
    2,229
    
    
    
    3,374
    
    
    
    5,631
    
    
    
    8,724Total revenues
    
    
    20,738
    
    
    
    34,934
    
    
    
    53,280
    
    
    
    90,544Expenses:Cost of revenue
    
    
    14,271
    
    
    
    23,303
    
    
    
    36,877
    
    
    
    60,995Selling, general and administrative
    
    
    3,447
    
    
    
    5,491
    
    
    
    8,740
    
    
    
    13,449Total expense
    
    
    17,718
    
    
    
    28,794
    
    
    
    45,617
    
    
    
    74,444Operating income
    
    $
    3,020
    
    
    $
    6,140
    
    
    $
    7,663
    
    
    $
    16,100
 Three Months Ended September 30, 2005 Compared to Three Months Ended September 30, 2004
 Revenue.
    Cost of Revenue.
  17




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##### Table of Contents



Selling, General and Administrative Expenses (SG&A).
  Operating Income.
  Nine Months Ended September 30, 2005 Compared to Nine Months Ended September 30, 2004
 Revenue.
   18




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##### Table of Contents



Cost of Revenue.
  Selling, General and Administrative Expenses.
  Operating Income.
  19




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##### Table of Contents



Items Impacting Comparability of Our Financial Results
  Changes in Our Legal Structure.
   Public Company Expenses.
  Liquidity and Capital Resources
  Financial Condition and Cash Flows
 Financial Condition.
  20




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##### Table of Contents



Cash flows from operations.
  Cash flows used in investing activities.
  Cash flows from financing activities.
  Capital Requirements
  
    
    expansion capital expenditures, such as those to acquire additional equipment and other
assets to grow our business; and
    
    maintenance or upgrade capital expenditures, which are capital expenditures made to
replace partially or fully depreciated assets or to upgrade the operational capabilities of
existing assets.
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##### Table of Contents



Off-Balance Sheet Arrangements
  Description of Our Indebtedness
   
    
    merge with or acquire another company;
 
    
    incur indebtedness;
 
    
    grant certain liens;
 
    
    engage in certain transaction with its affiliates;
 
    
    make any material change to the nature or accounting practices of the business;
 
    
    self-insure, except workers compensation insurance; and
 
    
    dispose of assets.
  
    
    a leverage ratio of up to 3:1 of consolidated total debt to EBITDA (as defined
in the credit agreement); and
    
    an adjusted tangible net worth of Superior and its subsidiaries, on a
consolidated basis, of at least $75 million at all times through April 30, 2006.
  
    
    a failure to make required payments of principal, interest or fees within five
days of when due;
    
    a failure of any representation or warranty to be true and correct;
    
    a breach of any covenant in the credit agreement for a period of over 30 days
after written notice from the lender to Superior that such covenant had been breached;
    
    a default on any other indebtedness or guarantee obligation in excess of
$2,500,000;
 
    
    an institution of insolvency proceedings by Superior;
    
    the rendering of any final judgments against Superior, not covered by
insurance, which, separately or in the aggregate, exceed $2,500,000 and remain in force for
more than 30 days;
    
    a failure to discharge, within 30 days after issuance, any writ or warrant of
attachment, garnishment, execution, distraint or similar process against Superior or any of
its properties in excess of $2,500,000;
    
    the occurrence of certain ERISA events;
    
    a material damage or loss to the value of the collateral in excess of $2,500,000;
    
    termination of the credit agreement or any other loan documents, except in
accordance with the express terms of the credit agreement or such other loan documents; or
    
    a change of control transaction that occurs without the lenders consent.
  Recent Accounting Pronouncements
 Consolidation of Variable Interest Entities
 Share-Based Payment Accounting for Stock Based Compensation,
 Critical Accounting Policies
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##### Table of Contents



Revenue Recognition
   Property, Plant and Equipment
  Impairment of Long-Lived Assets
 Accounting for the Impairment or Disposal of Long-Lived
Assets,
  
    
    changes in general economic conditions in regions in which our services are located;
    
    the price of crude oil and natural gas;
    
    our ability to negotiate favorable sales arrangements; and
    
    our competition from other service providers.
  23




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##### Table of Contents



Intangible Assets
  Contingent Liabilities
  Insurance Expenses
   Non-GAAP Accounting Measures
  
    
    as a measure of operating performance because it assists us in comparing our performance
on a consistent basis as it removes the impact of our capital structure and asset base from
our operating results;
    
    as a measure for planning and forecasting overall expectations and for evaluating actual
results against such expectations;
    
    to assess compliance with financial ratios and covenants included in credit facilities;
    
    in communications with lenders concerning our financial performance; and
    
    to evaluate the viability of potential acquisitions and overall rates of return.
  24




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##### Table of Contents



Three Months Ended
    
    
    Nine Months EndedSeptember 30,
    
    
    September 30,2005
    
    
    
    
    
    
    20052004
    
    
    (Superior Well
    
    
    2004
    
    
    (Superior Well(Partnerships)
    
    
    Services, Inc.)
    
    
    (Partnerships)
    
    
    Services, Inc.)Reconciliation of EBITDA to Net Income:Net income (1)
    
    $
    1,852
    
    
    $
    (4,643
    )
    
    $
    4,349
    
    
    $
    4,973Income tax expense
    
    
    1,109
    
    
    
    10,860
    
    
    
    3,022
    
    
    
    10,860Interest expense
    
    
    68
    
    
    
    169
    
    
    
    171
    
    
    
    552Depreciation and amortization
    
    
    1,241
    
    
    
    2,005
    
    
    
    3,493
    
    
    
    6,162EBITDA
    
    $
    4,270
    
    
    $
    8,391
    
    
    $
    11,035
    
    
    $
    22,547
 
 (1)  2004 amounts include pro forma income tax expense 
 Item 3. Quantitative and Qualitative Disclosures about Market Risk.
  Interest Rate Risk.
 Concentration of Credit Risk.
 Commodity Price Risk.
 
 Item 4. Controls and Procedures.
   25




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26




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##### Table of Contents



PART
II  OTHER INFORMATION
 
 Item 1. Legal Proceedings.
  
 Item 2. Use of Proceeds.
    AggregatePrice of
    
    
    
    
    
    AggregateShares
    
    Shares
    
    
    
    
    
    Price ofRegistered
    
    Registered
    
    Shares Sold
    
    Shares SoldSuperior Well Services, Inc.
    
    
    5,273,193
    
    
    $
    68,551,509
    
    
    
    5,273,193
    
    
    $
    68,551,509Selling Stockholders
    
    
    1,186,807
    
    
    $
    15,428,491
    
    
    
    1,186,807
    
    
    $
    15,428,491
   
 Item 6. Exhibits.
  27




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##### Table of Contents



SIGNATURES
  SUPERIOR WELL SERVICES, INC.RegistrantDated: November 8, 2005
    
    By:
    
    /s/ David E. WallaceDavid E. WallaceChief Executive Officer andChairman of the Board of DirectorsDated: November 8, 2005
    
    By:
    
    /s/ Thomas W. StoelkThomas W. StoelkVice President and Chief Financial Officer
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##### Table of Contents



INDEX TO EXHIBITS
 OF
 SUPERIOR WELL SERVICES, INC.
 (a) Exhibits
 3.1
    
    Amended and Restated Certificate of Incorporation (incorporated by
reference to Exhibit 3.1 to Form 8-K filed on August 3, 2005).3.2
    
    Amended and Restated Bylaws (incorporated by reference to Exhibit
3.2 to Form 8-K filed on August 3, 2005).4.1
    
    Specimen Stock Certificate representing our common stock
(incorporated by reference to Exhibit 4.1 to Registration
Statement on Form S-1/A (Registration No. 333-124674) filed on
June 24, 2005).4.2
    
    Registration Rights Agreement dated as of July 28, 2005 by and
among the Company and the stockholders signatory thereto
(incorporated by reference to Exhibit 10.1 to Form 8-K filed on
August 3, 2005).10.1
    
    Credit Agreement dated as of October 18, 2005, among Superior Well
Services, Inc., Superior Well Services, Ltd., Bradford Resources,
Ltd. and Citizens Bank of Pennsylvania (incorporated by reference
to Exhibit 10.1 to Form 8-K filed on10.2
    
    Employment Agreement between David E. Wallace and Superior Well
Services, Inc., dated August 3, 2005 (incorporated by reference to
Exhibit 10.2 to Form 8-K filed on August 3, 2005).10.3
    
    Employment Agreement between Jacob B. Linaberger and Superior Well
Services, Inc., dated August 3, 2005 (incorporated by reference to
Exhibit 10.3 to Form 8-K filed on August 3, 2005)10.4
    
    Employment Agreement between Thomas W. Stoelk and Superior Well
Services, Inc., effective as of June 1, 2005 (incorporated by
reference to Exhibit 10.4 to Form 8-K filed on August 3, 2005).10.5
    
    Employment Agreement between Rhys R. Reese and Superior Well
Services, Inc., dated August 3, 2005 (incorporated by reference to
Exhibit 10.5 to Form 8-K filed on August 3, 2005).10.6
    
    Employment Agreement between Fred E. Kistner and Superior Well
Services, Inc., dated August 3, 2005 (incorporated by reference to
Exhibit 10.6 to Form 8-K filed on August 3, 2005).10.7
    
    Indemnification Agreement between David E. Wallace and Superior
Well Services, Inc., dated August 3, 2005 (incorporated by
reference to Exhibit 10.7 to Form 8-K filed on August 3, 2005).10.8
    
    Indemnification Agreement between Jacob B. Linaberger and Superior
Well Services, Inc., dated August 3, 2005 (incorporated by
reference to Exhibit 10.8 to Form 8-K filed on August 3, 2005).10.9
    
    Indemnification Agreement between Thomas W. Stoelk and Superior
Well Services, Inc., dated August 3, 2005 (incorporated by
reference to Exhibit 10.9 to Form 8-K filed on August 3, 2005).10.10
    
    Indemnification Agreement between Rhys R. Reese and Superior Well
Services, Inc., dated August 3, 2005 (incorporated by reference to
Exhibit 10.10 to Form 8-K filed on August 3, 2005).10.11
    
    Indemnification Agreement between Fred E. Kistner and Superior
Well Services, Inc., dated August 3, 2005 (incorporated by
reference to Exhibit 10.11 to Form 8-K filed on August 3, 2005).10.12
    
    Indemnification Agreement between Mark A. Snyder and Superior Well
Services, Inc., dated August 3, 2005 (incorporated by reference to
Exhibit 10.12 to Form 8-K filed on August 3, 2005).10.13
    
    Indemnification Agreement between David E. Snyder and Superior
Well Services, Inc., dated August 3, 2005 (incorporated by
reference to Exhibit 10.13 to Form 8-K filed on August 3, 2005).10.14
    
    Indemnification Agreement between Charles C. Neal and Superior
Well Services, Inc., dated August 3, 2005 (incorporated by
reference to Exhibit 10.14 to Form 8-K filed on August 3, 2005).10.15
    
    Indemnification Agreement between John A. Staley, IV and Superior
Well Services, Inc., dated August 3, 2005 (incorporated by
reference to Exhibit 10.15 to Form 8-K filed on August 3, 2005).10.16
    
    Indemnification Agreement between Anthony J. Mendicino and
Superior Well Services, Inc. dated August 30, 2005.10.17
    
    Fifth Amended and Restated Promissory Note dated March 31, 2005
(incorporated by reference to Exhibit 10.8 to Registration
Statement on Form S-1/A (Registration No. 333-124674) filed on
July 15, 2005).10.18
    
    Credit Agreement dated June 3, 2004 by and between Bradford
Resources, Ltd. and Citizens Bank of Pennsylvania (incorporated by
reference to Exhibit 10.9 to Registration Statement on Form S-1/A
(Registration No. 333-124674) filed on July 15, 2005).10.19
    
    Second Amendment to Credit Agreement dated January 31, 2005 by and
between Bradford Resources, Ltd. and Citizens Bank of Pennsylvania
(incorporated by reference to Exhibit 10.10 to Registration
Statement on Form S-1/A (Registration No. 333-124674) filed on
July 15, 2005).10.20
    
    Second Amended and Restated Stand By Term Loan Note dated January
31, 2005 (incorporated by reference to Exhibit 10.11 to
Registration Statement on Form S-1/A (Registration No. 333-124674)
filed on July 15, 2005).10.21
    
    Guaranty and Suretyship Agreement dated June 3, 2005 by Superior
Well Services, Ltd. (incorporated by reference to Exhibit 10.12 to
Registration Statement on Form S-1/A (Registration No. 333-124674)
filed on July 15, 2005).10.22
    
    Guaranty and Suretyship Agreement dated June 3, 2005 by Allegheny
Mineral Corporation (incorporated by reference to Exhibit 10.13 to
Registration Statement on Form S-1/A (Registration No. 333-124674)
filed on July 15, 2005).
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##### Table of Contents



10.23
    
    Guaranty and Suretyship Agreement dated June 3, 2005 by Armstrong
Cement & Supply Corporation (incorporated by reference to Exhibit
10.14 to Registration Statement on Form S-1/A (Registration No.
333-124674) filed on July 15, 2005).10.24
    
    Guaranty and Suretyship Agreement dated June 3, 2005 by Glacial
Sand & Gravel Company (incorporated by reference to Exhibit 10.15
to Registration Statement on Form S-1/A (Registration No.
333-124674) filed on July 15, 2005).10.25
    
    Guaranty and Suretyship Agreement dated August 22, 1997 by
Allegheny Mineral Corporation (incorporated by reference to
Exhibit 10.16 to Registration Statement on Form S-1/A
(Registration No. 333-124674) filed on July 15, 2005).10.26
    
    Credit Agreement, dated as of October 18, 2005, among Superior
Well Services, Inc., Superior Well Services, Ltd., and Bradford
Resources, Ltd. and Citizens Bank of Pennsylvania (incorporated by
reference to Exhibit 10.1 to Form 8-K filed on October 24, 2005).31.1*
    
    Sarbanes-Oxley Section 302 certification of David E. Wallace for
Superior Well Services, Inc. for the September 30, 2005 Quarterly
Report on Form 10-Q.31.2*
    
    Sarbanes-Oxley Section 302 certification of. Thomas W. Stoelk for
Superior Well Services, Inc. for the September 30, 2005 Quarterly
Report on Form 10-Q.32.1*
    
    Sarbanes-Oxley Section 906 certification of David E. Wallace for
Superior Well Services, Inc. for the September 30, 2005 Quarterly
Report on Form 10-Q.32.2*
    
    Sarbanes-Oxley Section 906 certification of Thomas W. Stoelk for
Superior Well Services, Inc. for the September 30, 2005 Quarterly
Report on Form 10-Q.
 
 *
    
    Filed herewith. 
 30