<PAGE>

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

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

                                   FORM 10-Q

<Table>
<C>         <S>
(MARK ONE)

    [X]     QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(D)
            OF THE SECURITIES EXCHANGE ACT OF 1934

                    FOR THE QUARTERLY PERIOD ENDED JUNE 30, 2005

                                         OR

    [ ]     TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(D)
            OF THE SECURITIES EXCHANGE ACT OF 1934

                 FOR THE TRANSITION PERIOD FROM         TO
</Table>

                       COMMISSION FILE NUMBER: 001-31346

                           W-H ENERGY SERVICES, INC.
             (Exact name of registrant as specified in its charter)

<Table>
<S>                                            <C>
                    TEXAS                                        76-0281502
       (State or other jurisdiction of                         (IRS Employer
        incorporation or organization)                      Identification No.)
</Table>

                             10370 RICHMOND AVENUE
                                   SUITE 990
                              HOUSTON, TEXAS 77042
             (Address of principal executive offices and zip code)

                                 (713) 974-9071
              (Registrant's telephone number, including area code)

     Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934, as amended (the "Act") during the past 12 months (or for such shorter
period that the registrant was required to file such reports), and (2) has been
subject to such filing requirements for the past 90 days.  Yes [X]     No [ ]

     Indicate by check mark whether the registrant is an accelerated filer (as
defined in Rule 12b-2 of the Act).  Yes [X]     No [ ]

     As of August 2, 2005 there were outstanding 28,105,150 shares of common
stock, par value $0.0001 per share, of the registrant.
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
<PAGE>

                           W-H ENERGY SERVICES, INC.

                                     INDEX

<Table>
<Caption>
                                                                               PAGE
                                                                               ----
<S>              <C>                                                           <C>
                                      PART I
                               FINANCIAL INFORMATION
Item 1.
                 Financial Statements........................................    1
                 Consolidated Balance Sheets -- June 30, 2005 (unaudited) and
                 December 31, 2004...........................................    1
                 Consolidated Statements of Operations and Comprehensive
                 Income (Loss) (unaudited) -- Three and six months ended June
                 30, 2005 and 2004...........................................    2
                 Consolidated Statements of Cash Flows (unaudited) -- Six
                 months ended June 30, 2005 and 2004.........................    3
                 Notes to Consolidated Financial Statements (unaudited)......    4
Item 2.
                 Management's Discussion and Analysis of Financial Condition
                 and Results of Operations...................................   10
Item 3.
                 Quantitative and Qualitative Disclosures About Market
                 Risk........................................................   17
Item 4.
                 Controls and Procedures.....................................   17

                                      PART II
                                 OTHER INFORMATION
Item 4.
                 Submission of Matters to a Vote of Security Holders.........   18
Item 6.
                 Exhibits....................................................   18
Signatures...................................................................   19
</Table>

                                        i
<PAGE>

                                     PART I

                             FINANCIAL INFORMATION

ITEM 1.  FINANCIAL STATEMENTS

                           W-H ENERGY SERVICES, INC.

                          CONSOLIDATED BALANCE SHEETS
               (IN THOUSANDS, EXCEPT SHARE AND PER SHARE AMOUNTS)

<Table>
<Caption>
                                                                JUNE 30,      DECEMBER 31,
                                                                  2005            2004
                                                              ------------   ---------------
                                                              (UNAUDITED)
<S>                                                           <C>            <C>
                                           ASSETS
Current Assets:
  Cash and cash equivalents.................................    $ 12,026        $ 10,448
  Accounts receivable, net of allowance of $4,341 and
     $3,890, respectively...................................     127,361         111,728
  Inventories...............................................      53,525          48,317
  Deferred income taxes.....................................       6,669           5,601
  Prepaid expenses and other................................       3,137           9,965
                                                                --------        --------
     Total current assets...................................     202,718         186,059
Property and equipment, net.................................     253,772         235,317
Goodwill and other intangibles, net.........................     117,115         117,801
Other assets, net...........................................      10,202           9,434
                                                                --------        --------
     Total assets...........................................    $583,807        $548,611
                                                                ========        ========

                            LIABILITIES AND SHAREHOLDERS' EQUITY
Current Liabilities:
  Accrued liabilities.......................................    $ 36,893        $ 34,926
  Accounts payable..........................................      27,367          29,572
                                                                --------        --------
     Total current liabilities..............................      64,260          64,498
Long-term debt, net of current maturities...................     190,000         180,805
Deferred income taxes.......................................      34,203          30,849
Other long-term obligations.................................       5,512           3,864

Commitments and Contingencies

Shareholders' Equity:
  Preferred stock, $0.01 par value, 10,000,000 shares
     authorized, none issued and outstanding................          --              --
  Common stock, $0.0001 par value, 100,000,000 shares
     authorized, 27,991,955 and 27,803,130 shares issued and
     outstanding, respectively..............................           3               3
  Additional paid-in capital................................     217,749         214,846
  Deferred compensation.....................................        (463)           (806)
  Other comprehensive income................................       5,583           7,522
  Retained earnings.........................................      66,960          47,030
                                                                --------        --------
     Total shareholders' equity.............................     289,832         268,595
                                                                --------        --------
     Total liabilities and shareholders' equity.............    $583,807        $548,611
                                                                ========        ========
</Table>

  The accompanying notes are an integral part of these consolidated financial
                                  statements.

                                        1
<PAGE>

                           W-H ENERGY SERVICES, INC.

     CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME (LOSS)
               (IN THOUSANDS, EXCEPT SHARE AND PER SHARE AMOUNTS)
                                  (UNAUDITED)

<Table>
<Caption>
                                              FOR THE THREE MONTHS ENDED    FOR THE SIX MONTHS ENDED
                                                       JUNE 30,                     JUNE 30,
                                              ---------------------------   -------------------------
                                                  2005           2004          2005          2004
                                              ------------   ------------   -----------   -----------
<S>                                           <C>            <C>            <C>           <C>
Revenues....................................  $   157,294    $   108,434    $   299,717   $   215,978
Costs and expenses:
  Cost of revenues..........................       87,814         63,531        168,807       126,447
  Selling, general and administrative.......       27,514         20,350         53,407        41,871
  Warehouse fire related costs..............        3,690             --          3,690            --
  Research and development..................        4,523          3,305          9,261         6,343
  Depreciation and amortization.............       13,994         11,031         27,765        21,769
                                              -----------    -----------    -----------   -----------
     Total costs and expenses...............      137,535         98,217        262,930       196,430
                                              -----------    -----------    -----------   -----------
     Operating income.......................       19,759         10,217         36,787        19,548
Other (income) expense:
  Interest expense, net.....................        2,758          5,301          5,005         7,569
  Other (income) expense, net...............          156             (7)           286           (88)
                                              -----------    -----------    -----------   -----------
     Income before income taxes.............       16,845          4,923         31,496        12,067
  Provision for income taxes................        5,598          1,896         11,566         4,646
                                              -----------    -----------    -----------   -----------
     Income from continuing operations......       11,247          3,027         19,930         7,421
     Loss from discontinued operations, net
       of tax...............................           --         (1,432)            --          (859)
                                              -----------    -----------    -----------   -----------
     Net income.............................  $    11,247    $     1,595    $    19,930   $     6,562
                                              ===========    ===========    ===========   ===========
Comprehensive income (loss):
  Net income................................  $    11,247    $     1,595    $    19,930   $     6,562
  Interest rate swap valuations.............         (883)            --           (883)           --
  Foreign currency translation adjustment...       (1,444)        (2,979)        (1,056)          (14)
                                              -----------    -----------    -----------   -----------
  Comprehensive income (loss)...............  $     8,920    $    (1,384)   $    17,991   $     6,548
                                              ===========    ===========    ===========   ===========
Earnings (loss) per share:
  Basic
     From continuing operations.............  $      0.40    $      0.11    $      0.72   $      0.27
     From discontinued operations...........           --          (0.05)            --         (0.03)
                                              -----------    -----------    -----------   -----------
       Total................................  $      0.40    $      0.06    $      0.72   $      0.24
                                              ===========    ===========    ===========   ===========
  Diluted
     From continuing operations.............  $      0.39    $      0.11    $      0.69   $      0.26
     From discontinued operations...........           --          (0.05)            --         (0.03)
                                              -----------    -----------    -----------   -----------
       Total................................  $      0.39    $      0.06    $      0.69   $      0.23
                                              ===========    ===========    ===========   ===========
Number of shares used in calculation of
  earnings per share:
  Basic.....................................   27,898,950     27,449,217     27,854,517    27,429,731
  Diluted...................................   28,684,997     28,174,623     28,678,945    28,134,147
</Table>

  The accompanying notes are an integral part of these consolidated financial
                                  statements.

                                        2
<PAGE>

                           W-H ENERGY SERVICES, INC.

                     CONSOLIDATED STATEMENTS OF CASH FLOWS
                                 (IN THOUSANDS)
                                  (UNAUDITED)

<Table>
<Caption>
                                                               FOR THE SIX MONTHS
                                                                 ENDED JUNE 30,
                                                              --------------------
                                                                2005       2004
                                                              --------   ---------
<S>                                                           <C>        <C>
Cash Flows from Operating Activities:
  Net income................................................  $ 19,930   $   6,562
  Adjustments to reconcile net income to cash provided by
     operating activities -- Depreciation and
     amortization...........................................    27,765      21,769
     Gain on the sale of assets.............................    (3,662)     (5,720)
     Deferred tax provision.................................     1,735       3,145
     Amortization of deferred compensation..................       343         109
     Write-off of deferred financing costs..................        --       3,123
     Amortization of deferred financing costs...............       211         685
     Tax benefit from employee stock option plan............     1,269         387
     Changes in operating assets and liabilities, excluding
      effects of acquisitions and discontinued operations --
       Increase in accounts receivable, net.................   (15,583)     (8,057)
       Increase in inventories..............................    (5,219)     (8,737)
       Decrease in prepaid expenses and other...............     6,829       2,641
       Increase in other assets, net........................      (400)     (1,695)
       Increase in accounts payable, accrued liabilities and
        other long-term liabilities.........................       835       8,089
                                                              --------   ---------
          Net cash provided by operating activities.........    34,053      22,301
                                                              --------   ---------
Cash Flows from Investing Activities:
  Additions to property and equipment.......................   (50,788)    (36,232)
  Proceeds from sale of property and equipment..............     6,313       9,428
                                                              --------   ---------
          Net cash used in investing activities.............   (44,475)    (26,804)
                                                              --------   ---------
Cash Flows from Financing Activities:
  Proceeds from the issuance of debt........................    61,783     181,802
  Payments on debt..........................................   (52,588)   (199,217)
  Proceeds from the exercise of stock options and stock
     purchase warrants......................................     1,634         370
                                                              --------   ---------
          Net cash provided by (used in) financing
            activities......................................    10,829     (17,045)
                                                              --------   ---------
Effect of exchange rate changes on cash.....................     1,171        (130)
Effect of discontinued operations on cash...................        --      21,406
Net increase (decrease) in Cash and Cash Equivalents........     1,578        (272)
Cash and Cash Equivalents, beginning of period..............    10,448      11,878
                                                              --------   ---------
Cash and Cash Equivalents, end of period....................  $ 12,026   $  11,606
                                                              ========   =========
</Table>

  The accompanying notes are an integral part of these consolidated financial
                                  statements.

                                        3
<PAGE>

                           W-H ENERGY SERVICES, INC.

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                  (UNAUDITED)

1.  BUSINESS ORGANIZATION

  DESCRIPTION OF COMPANY

     W-H Energy Services, Inc., a Texas corporation, and its subsidiaries
(collectively, "W-H") is a diversified oilfield service company that provides
products and services used primarily for the drilling, completion and production
of oil and natural gas wells. W-H has the following primary lines of business:
(i) drilling related products and services, which include
logging-while-drilling, measurement-while-drilling, directional drilling,
down-hole drilling motors, rental tools (including drill pipe) and drilling
fluids; and (ii) completion and workover related products and services, which
include cased-hole wireline logging, perforating, tubing conveyed perforating
and associated rental equipment, polymers and specialty chemicals, rental tools
(including tubing) and coiled tubing.

  BASIS OF PRESENTATION

     The unaudited Consolidated Financial Statements have been prepared in
accordance with accounting principles generally accepted in the United States
for interim financial information and the instructions to Form 10-Q and Rule 10
of Regulation S-X. Accordingly, they do not include all of the information and
footnotes required by accounting principles generally accepted in the United
States for complete financial statements. For further information, refer to the
Consolidated Financial Statements and footnotes thereto included in W-H's Annual
Report on Form 10-K for the year ended December 31, 2004 filed with the
Securities and Exchange Commission ("SEC"). In the opinion of management, all
necessary adjustments (which include only normal recurring adjustments)
considered necessary for a fair presentation have been included. Operating
results for the three and six months ended June 30, 2005 are not necessarily
indicative of the results that may be expected for the year ending December 31,
2005.

  DISCONTINUED OPERATIONS

     In March 2004, W-H committed to the divestiture of its maintenance and
safety related products and services segment. Accordingly, this segment has been
included in the Consolidated Statements of Operations and Comprehensive Income
for 2004 as discontinued operations. In April 2004, W-H completed the sale of
Well Safe, Inc., one of the two companies that formerly comprised the
maintenance and safety related products and services segment, for cash
consideration of $28.0 million. In December 2004, W-H sold the remaining entity,
Charles Holston, Inc., that formerly comprised this segment, for consideration
of $2.0 million, consisting of $1.0 million in cash and a $1.0 million
subordinated promissory note due December 31, 2009. These sales resulted in a
loss of $5.1 million for the year ended December 31, 2004. Summary financial
results for this segment are as follows:

<Table>
<Caption>
                                                        THREE MONTHS      SIX MONTHS
                                                       ENDED JUNE 30,   ENDED JUNE 30,
                                                       --------------   --------------
                                                       2005    2004     2005    2004
                                                       ----   -------   ----   -------
<S>                                                    <C>    <C>       <C>    <C>
Revenues.............................................   --    $ 3,483    --    $13,238
Income (loss) before taxes...........................   --    $(2,295)   --    $(1,362)
</Table>

     W-H sold Well Safe, Inc. and Charles Holston, Inc. pursuant to customary
stock purchase agreements in which it made customary representations and
warranties, agreed to customary covenants and agreed to indemnify the buyers of
these businesses for certain matters, subject to certain caps, limitations and
deductibles.

                                        4
<PAGE>

  RECLASSIFICATIONS

     Certain prior period amounts have been reclassified to conform to the
current presentation.

  WAREHOUSE FIRE

     On April 17, 2005, a Houston warehouse facility operated by a W-H
subsidiary was destroyed in a fire. The facility was closed at the time and
there were no persons at the facility who suffered injuries as a result of the
fire. The cause of the fire remains undetermined. W-H has incurred a variety of
costs, including clean-up and debris removal costs, associated with the fire.
For the quarter ended June 30, 2005, W-H reported $3.7 million in costs
associated with this fire, net of approximately $0.8 million in anticipated
insurance reimbursements. This amount has been reflected in the Consolidated
Statements of Operations and Comprehensive Income (Loss) under the caption
"Warehouse fire related costs" and as a reduction to operating income for the
drilling segment in Footnote 8 "Operating Segments" for the three and six months
ended June 30, 2005.

  ACCOUNTING POLICIES AND PROCEDURES

     W-H has not added to or changed its accounting policies since December 31,
2004. For a description of these policies, refer to Note 2 of the Consolidated
Financial Statements in W-H's Annual Report on Form 10-K for the year ended
December 31, 2004.

     In December 2004, the Financial Accounting Standards Board ("FASB") issued
Statement of Financial Accounting Standards No. 123R "Share-Based Payment"
("SFAS 123R"). SFAS 123R revises SFAS 123, supersedes APB No. 25 and requires
companies to recognize the cost of employee stock options and other awards of
stock-based compensation based on the fair value of the award as of the grant
date. The FASB established the beginning of the first interim or annual period
that begins after June 15, 2005 as the effective date for SFAS 123R. W-H had
planned to adopt the requirements of SFAS 123R effective January 1, 2005.
However, on April 14, 2005, the SEC announced the adoption of a new rule that
amended the required adoption dates for SFAS 123R. The SEC's rule allows most
larger reporting companies to implement SFAS 123R at the beginning of their next
fiscal year, instead of the next reporting period, that begins after June 15,
2005. As a result of the SEC's new rule, W-H plans to delay the adoption of the
requirements of SFAS 123R until the beginning of its fiscal year that begins on
January 1, 2006.

2.  EARNINGS PER SHARE

     Basic earnings per share excludes dilution and is computed by dividing
income from continuing and discontinued operations available to common
shareholders by the weighted average number of common shares outstanding for the
period. Diluted earnings per share is computed considering the dilutive effect
of stock options and restricted shares. For the three months ended June 30, 2005
and 2004, shares of 799,371 and 725,406, respectively, resulting from the
assumed exercise of outstanding options and the existence of outstanding
restricted shares were added to the denominator because the inclusion thereof
would be dilutive. For the six months ended June 30, 2005 and 2004, shares of
831,196 and 704,416, respectively, resulting from the assumed exercise of
outstanding options and the existence of outstanding restricted shares, were
added to the denominator because the inclusion of such shares would be dilutive.
For the three months ended June 30, 2005 and 2004, shares of 92,000 and
1,799,492, respectively, resulting from the assumed exercise of outstanding
options and the existence of outstanding restricted shares were excluded from
the computation of earnings per common share, because the inclusion thereof
would be anti-dilutive. For the six months ended June 30, 2005 and 2004, shares
of 92,000 and 1,841,811, respectively, were excluded from the computation of
earnings per common share, because the inclusion of such shares would be
anti-dilutive.

                                        5
<PAGE>

3.  INVENTORY

     The components of inventories as of June 30, 2005 and December 31, 2004 are
as follows (in thousands):

<Table>
<Caption>
                                                           JUNE 30, 2005      DECEMBER 31, 2004
                                                          ----------------   --------------------
<S>                                                       <C>                <C>
Finished goods..........................................      $46,000              $43,380
Work-in-process.........................................        4,726                3,646
Raw materials and supplies..............................        9,134                7,152
Inventory reserve.......................................       (6,335)              (5,861)
                                                              -------              -------
  Inventories...........................................      $53,525              $48,317
                                                              =======              =======
</Table>

4.  DEBT

  CREDIT FACILITY

     On May 5, 2005, W-H entered into a First Amendment to its credit facility
(the "First Amendment"). The First Amendment, among other things, increased the
amount W-H may borrow under its credit facility to $375.0 million from $237.5
million, extended the maturity date of such borrowings to May 5, 2010 from June
30, 2009, improved certain of the pricing terms associated with the credit
facility and relaxed obligations under certain of the operational and financial
covenants imposed by the credit facility.

     As of June 30, 2005, W-H had an outstanding loan balance of $190.0 million
and approximately $5.6 million in letters of credit issued under its credit
facility, resulting in an available borrowing capacity on such date of
approximately $179.4 million.

     Amounts borrowed under the credit facility bear interest, at W-H's
election, at either a variable rate equal to LIBOR, plus a margin ranging from
1.0% to 2.0%, depending upon W-H's leverage ratio, or an alternate base rate
equal to the higher of (1) the prime rate or (2) the federal funds rate plus
0.5%, plus a margin ranging from zero to 1.0%, depending upon W-H's leverage
ratio. As of June 30, 2005, borrowings under the credit facility bore interest
at LIBOR plus the then applicable margin of 1.5%.

     The credit facility is secured by a lien on substantially all of W-H's
property and assets, a pledge of all the capital stock of W-H's domestic
subsidiaries and a pledge of not greater than 65% of the capital stock of each
of W-H's top tier foreign subsidiaries. In addition, the credit facility is
guaranteed by all of W-H's domestic subsidiaries. The credit facility requires,
among other things, that W-H maintain certain financial ratios, including a
leverage ratio and an interest coverage ratio, and a specified net worth. The
credit facility limits the amount of capital expenditures W-H may make, the
amount of debt W-H may incur outside of the credit facility, the amount of
future investments W-H may make, the ability of W-H to pay dividends and the
ability of W-H to engage in certain business combination transactions.

     Financing costs associated with W-H's credit facility of approximately $1.6
million and financing costs associated with the First Amendment of approximately
$1.0 million will be ratably amortized to interest expense over the five year
term of the credit facility. As a result of the repayment of W-H's previous
credit facility, W-H wrote-off approximately $3.1 million in non-cash financing
costs to interest expense during the second quarter of 2004 that had previously
been deferred.

5.  INTEREST RATE SWAP AGREEMENTS

     On May 18, 2005, W-H entered into interest rate swap agreements with a
total notional amount of $150.0 million related to its credit facility. Under
these agreements, W-H receives interest at a floating rate of three month LIBOR
plus the applicable spread on the revolving credit facility and pays interest at
a fixed rate of 4.24% plus the applicable spread on the revolving credit
facility. The interest rate swap agreements have been designated and qualify as
cash flow hedging instruments. The interest rate swap agreements are fully
effective, resulting in no gain or loss being recorded in the Consolidated
Statement of Operations and Comprehensive Income (Loss). W-H recorded the fair
value of the interest rate swap agreements, which was in aggregate a $1.3
million liability at June 30, 2005, based on the fair value of the instruments.

                                        6
<PAGE>

6.  STOCK OPTIONS

     A summary of W-H's stock options as of June 30, 2005 and December 31, 2004
is as follows:

<Table>
<Caption>
                                                                        WEIGHTED AVERAGE
                                                            NUMBER OF       EXERCISE
                                                             OPTIONS    PRICE PER SHARE
                                                            ---------   ----------------
<S>                                                         <C>         <C>
Outstanding December 31, 2004.............................  3,745,192        $14.43
Granted...................................................    475,000         22.95
Exercised/exchanged.......................................   (203,750)         8.58
Expired/canceled..........................................    (56,456)        20.44
                                                            ---------
Outstanding June 30, 2005.................................  3,959,986         15.67
                                                            ---------
Exercisable as of June 30, 2005...........................  2,459,747         12.79
                                                            ---------
</Table>

     The fair value of each option was estimated on the date of grant using the
Black-Scholes option valuation model. The following assumptions were used for
the historical option grants: risk-free interest rate of 3.9%; dividend rates of
zero; average expected life of 5.6 years and expected volatility of 49.8%. The
3,959,986 options outstanding as of June 30, 2005 have a weighted average
remaining contractual life of 7.0 years.

     The Black-Scholes option valuation model and other existing models were
developed for use in estimating the fair value of traded options that have no
vesting restrictions and are fully transferable. In addition, option valuation
models require the input of and are highly sensitive to subjective assumptions,
including the expected stock price volatility. W-H's stock options have
characteristics significantly different from those of traded options, and
changes in the subjective input assumptions can materially affect the fair value
estimate.

     Had compensation expense for the stock options granted to employees and
directors been determined using the fair value method, net income and diluted
net income per share for the three and six months ended June 30, 2005 and 2004,
respectively would have been reduced to the following pro forma amounts:

<Table>
<Caption>
                                                    THREE MONTHS        SIX MONTHS
                                                   ENDED JUNE 30,     ENDED JUNE 30,
                                                  ----------------   -----------------
                                                   2005      2004     2005      2004
                                                  -------   ------   -------   -------
<S>                                               <C>       <C>      <C>       <C>
Net income, as reported.........................  $11,247   $1,595   $19,930   $ 6,562
Add: Total stock-based employee compensation
  expense included in reported net income, net
  of related tax effect.........................       95       67       214        67
Deduct: Total stock-based employee compensation
  expense determined under fair value based
  method for all awards, net of related tax
  effect........................................     (588)    (596)   (1,114)   (1,192)
                                                  -------   ------   -------   -------
Pro forma net income............................  $10,754   $1,066   $19,030   $ 5,437
                                                  =======   ======   =======   =======
Earnings per share:
  As reported:
     Basic......................................  $  0.40   $ 0.06   $  0.72   $  0.24
     Diluted....................................  $  0.39   $ 0.06   $  0.69   $  0.23
  Pro forma:
     Basic......................................  $  0.39   $ 0.04   $  0.68   $  0.20
     Diluted....................................  $  0.37   $ 0.04   $  0.66   $  0.19
Weighted-average fair value per share of options
  granted.......................................  $ 22.95   $17.75   $ 22.95   $ 15.97
</Table>

7.  INCOME TAXES

     In December 2004, the FASB published the following two final FASB Staff
Positions: (I) FAS 109-1, "Application of FASB Statement No. 109, Accounting for
Income Taxes, to the Tax Deduction on Qualified

                                        7
<PAGE>

Production Activities Provided by the American Jobs Creation Act of 2004,"
giving guidance on applying FASB Statement No. 109, Accounting for Income Taxes,
to the tax deduction on qualified production activities provided by the American
Jobs Creation Act of 2004 and (II) FAS 109-2 "Accounting and Disclosure Guidance
for that Foreign Earnings Repatriation Provision within the American Jobs
Creation Act of 2004" provides guidance on the Act's repatriation provision.
Management has reviewed FAS 109-1 and FAS 109-2 and does not believe that the
adoption of these staff positions will have a material impact on W-H's
consolidated financial position, results of operations or cash flows.

8.  OPERATING SEGMENTS

     Management has elected to aggregate W-H's business unit segments based on
the differences in each segment's customers, the products and services offered
and other economic characteristics. Based on these criteria, management has
identified the following reportable segments: (i) drilling related products and
services and (ii) completion and workover related products and services. The
accounting policies of the operating segments are the same as those described in
the summary of significant accounting policies in W-H's Annual Report on Form
10-K for the year ended December 31, 2004.

  DRILLING RELATED PRODUCTS AND SERVICES

     The drilling segment provides products and services used by oil and natural
gas companies, drilling contractors and other oilfield service companies for the
drilling of oil and natural gas wells. These products and services are used
primarily throughout North America and in select areas internationally. This
segment includes the following business lines: (i) logging-while-drilling; (ii)
measurement-while-drilling; (iii) directional drilling; (iv) down-hole drilling
motors; (v) rental tools (including drill pipe) and (vi) drilling fluids.

  COMPLETION AND WORKOVER RELATED PRODUCTS AND SERVICES

     The completion and workover segment provides products and services
primarily to North American customers onshore in the Gulf Coast region and
offshore in the Gulf of Mexico. These products and services include: (i)
cased-hole wireline logging, perforating, tubing conveyed perforating and
associated rental equipment; (ii) polymers and specialty chemicals; (iii) rental
tools (including tubing) and (iv) coiled tubing.

  SUMMARY INFORMATION

     W-H recognizes revenues, operating income, depreciation and amortization
expense, total assets and capital expenditures by segment. Interest expense and
other income (expense) are not monitored by segment. Summarized information for
W-H's reportable segments is contained in the following tables (in thousands):

     As of and for the three months ended June 30, 2005 (unaudited):

<Table>
<Caption>
                                             DRILLING   COMPLETION   CORPORATE    TOTAL
                                             --------   ----------   ---------   --------
<S>                                          <C>        <C>          <C>         <C>
Revenues...................................  $100,743    $ 56,551     $    --    $157,294
Operating income...........................     8,942      13,783      (2,966)     19,759
Depreciation and amortization..............     8,925       5,005          64      13,994
Total assets...............................   351,759     216,054      15,994     583,807
Capital expenditures.......................    10,866       5,556           8      16,430
</Table>

     As of and for the three months ended June 30, 2004 (unaudited):

<Table>
<Caption>
                                             DRILLING   COMPLETION   CORPORATE    TOTAL
                                             --------   ----------   ---------   --------
<S>                                          <C>        <C>          <C>         <C>
Revenues...................................  $ 67,838    $ 40,596     $    --    $108,434
Operating income...........................     3,986       8,749      (2,518)     10,217
Depreciation and amortization..............     7,117       3,848          66      11,031
Total assets, net of assets held for
  sale.....................................   294,491     187,495      10,158     492,144
Capital expenditures.......................    15,345       6,246          49      21,640
</Table>

                                        8
<PAGE>

     As of and for the six months ended June 30, 2005 (unaudited):

<Table>
<Caption>
                                             DRILLING   COMPLETION   CORPORATE    TOTAL
                                             --------   ----------   ---------   --------
<S>                                          <C>        <C>          <C>         <C>
Revenues...................................  $192,541    $107,176     $    --    $299,717
Operating income...........................    16,768      25,835      (5,816)     36,787
Depreciation and amortization..............    17,806       9,829         130      27,765
Total assets...............................   351,759     216,054      15,994     583,807
Capital expenditures.......................    31,131      19,634          23      50,788
</Table>

     As of and for the six months ended June 30, 2004 (unaudited):

<Table>
<Caption>
                                             DRILLING   COMPLETION   CORPORATE    TOTAL
                                             --------   ----------   ---------   --------
<S>                                          <C>        <C>          <C>         <C>
Revenues...................................  $140,893    $ 75,085     $    --    $215,978
Operating income...........................     9,971      14,634      (5,057)     19,548
Depreciation and amortization..............    14,106       7,532         131      21,769
Total assets, net of assets held for
  sale.....................................   294,491     187,495      10,158     492,144
Capital expenditures.......................    24,220      11,924          88      36,232
</Table>

     W-H operates in the United States, the North Sea and other geographic
regions. The following is summary information by geographic region (in
thousands) (unaudited):

  REVENUES

<Table>
<Caption>
                                             FOR THE THREE MONTHS    FOR THE SIX MONTHS
                                                ENDED JUNE 30,         ENDED JUNE 30,
                                             ---------------------   -------------------
                                               2005        2004        2005       2004
                                             ---------   ---------   --------   --------
<S>                                          <C>         <C>         <C>        <C>
United States..............................  $141,671    $ 98,263    $269,010   $188,742
North Sea..................................     7,205       4,119      14,081     11,552
Other......................................     8,418       6,052      16,626     15,684
                                             --------    --------    --------   --------
  Total....................................  $157,294    $108,434    $299,717   $215,978
                                             ========    ========    ========   ========
</Table>

  OPERATING INCOME

<Table>
<Caption>
                                                 FOR THE THREE MONTHS    FOR THE SIX MONTHS
                                                    ENDED JUNE 30,         ENDED JUNE 30,
                                                 ---------------------   -------------------
                                                   2005        2004        2005       2004
                                                 ---------   ---------   --------   --------
<S>                                              <C>         <C>         <C>        <C>
United States..................................   $20,696     $10,894    $36,335    $20,400
North Sea......................................      (496)     (1,911)      (754)    (3,271)
Other..........................................      (441)      1,234      1,206      2,419
                                                  -------     -------    -------    -------
  Total........................................   $19,759     $10,217    $36,787    $19,548
                                                  =======     =======    =======    =======
</Table>

  LONG-LIVED ASSETS

<Table>
<Caption>
                                                              JUNE 30,   DECEMBER 31,
                                                                2005         2004
                                                              --------   ------------
<S>                                                           <C>        <C>
United States...............................................  $359,060     $336,740
North Sea...................................................    12,224       15,494
Other.......................................................     9,805       10,318
                                                              --------     --------
  Total.....................................................  $381,089     $362,552
                                                              ========     ========
</Table>

                                        9
<PAGE>

ITEM 2.  MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
         OF OPERATIONS

FORWARD-LOOKING STATEMENTS

     In addition to historical information, this report contains forward-looking
statements within the meaning of Section 27A of the Securities Act of 1933 and
Section 21E of the Securities Exchange Act of 1934 that involve risks,
uncertainties and assumptions. The words "believe," "expect," "plan," "intend,"
"estimate," "project," "will," "could," "may," and similar expressions are
intended to identify forward-looking statements. Actual results may differ
materially from the results discussed in the forward-looking statements as a
result of important risk factors including, but not limited to, trends in oil
and natural gas prices, capital expenditures by customers, oil and natural gas
industry activity, difficulty in continuing to develop, produce and
commercialize technologically advanced products and services, weather conditions
in offshore markets, risks associated with events that result in personal
injuries, loss of life, damage to or destruction of property, equipment or the
environment and suspension of operations, unavailability of or costs associated
with insurance, our ability to attract and retain skilled workers, the loss of
key members of management, competition in our industry, compliance with and
developments in environmental and other governmental regulations, loss of use of
certain technologies, the concentration of customers in the energy industry, our
ability to successfully integrate future acquisitions, political and economic
risks, as well as restrictions on our ability to raise additional funds. For
additional discussion of these risks, please see the discussion set forth under
the heading "Factors That May Affect Future Results and Accuracy of
Forward-Looking Statements" contained in our most recent Annual Report filed on
Form 10-K with the Securities and Exchange Commission ("SEC").

OVERVIEW OF OUR PRODUCTS AND SERVICES

     We provide drilling related products and services and completion and
workover related products and services to major and independent oil and natural
gas companies, drilling contractors and other oilfield service companies. The
majority of our revenues are generated from charging our customers day rates,
based on the number of days our products and services are used. We also sell
certain products used in the exploration for and production of oil and natural
gas and receive revenues from our customers in connection with these sales. Our
primary expenses are salaries for our personnel and the costs associated with
expendable parts and supplies, research and development, repair and maintenance
of equipment and costs of products sold as well as general operational costs.

     Prices for oil and natural gas are subject to large fluctuations in
response to relatively minor changes in the supply of and demand for oil and
natural gas, market uncertainty and a variety of other factors. Any prolonged
increase or decrease in oil and natural gas prices affects the levels of
exploration, development and production activity as well as the entire health of
the oil and natural gas industry. Demand for our drilling related products and
services is directly affected by the level of exploration, development and
production activity of, and the corresponding capital spending by, oil and
natural gas companies. Demand for our completion and workover related products
and services depends more on oil and natural gas production activity, which is
less immediately affected by changes in oil and natural gas prices.

  DRILLING RELATED PRODUCTS AND SERVICES

     Revenue from our drilling related products and services segment constituted
approximately 64% of our consolidated revenue for the first six months of 2005.
Approximately 84% of our drilling segment revenue for the first six months of
2005 was generated in the United States, including the Gulf of Mexico. The
remaining 16% was generated in various international locations.

     In July 2001, exploration and development activity levels in the United
States peaked and began to decline primarily as a result of lower natural gas
prices. This decline continued through April 2002, at which point the United
States drilling rig count levels reached a low of 738, which was comprised of
110 offshore rigs and 628 land rigs. As natural gas prices climbed and remained
relatively strong, rig count levels began to recover in 2003 and this recovery
continued through the first six months of 2005. This increase, however, resulted
almost entirely from an increase in land-based rigs. According to statistics
published by Baker Hughes, the average number of rotary rigs operating in the
United States was 1,032, 1,192 and 1,311 for 2003,

                                        10
<PAGE>

2004 and the six months ended June 30, 2005, respectively. Of these figures,
land rigs comprised 924, 1,095 and 1,214, respectively, and offshore rigs
comprised 108, 97 and 97, respectively, for the same periods.

     The recovery in exploration and development activity levels in the United
States has impacted our revenue and earnings generated in this market. Although
the overall rig count in the United States has increased each of the last ten
consecutive quarters, the offshore rig count has not responded in the same
manner. In fact, the average offshore rig count during the second quarter of
2005 was 3% lower than the same period in the prior year and was approximately
24% lower than the preceding five year average for the same period. The offshore
rig count did improve modestly in the fourth quarter of 2004 and into early
2005, but has since retreated to the level of mid-2004 activity. Whether this
trend will continue throughout the remainder of 2005 is unclear at this time. We
do believe that the overall outlook for domestic natural gas exploration and
development activity remains positive as natural gas production has yet to
respond to the higher level of natural gas prices and higher rig counts. This
factor should keep upward pressure on natural gas prices.

     Outside of the United States, the North Sea remains our largest drilling
segment market. According to statistics published by Baker Hughes, the number of
rotary rigs operating in the North Sea declined from an average of 67 in January
2002 to an average of 51 in June 2005, after having reached a low of 31 in July
2004. We expect a moderate increase in activity levels in the North Sea in the
near term.

     As the primary area of improvement in drilling activity in the United
States has been onshore, the importance of improving our market share for
land-based services became critical. We started to see this trend developing
and, in October 2002, we made a strategic decision to enter the directional
drilling business in North America. As a result of this decision and the growth
in the United States land rig count, we have successfully leveraged our new
directional drilling business to effect an increase in the utilization of our
measurement-while-drilling and down-hole drilling motor fleet. The increased
utilization of our measurement-while-drilling and down-hole drilling motor fleet
has helped to offset decreases in utilization of our higher margin
logging-while-drilling fleet, which is primarily driven by the United States
offshore rig count.

     Another key challenge that our drilling related products and services
segment faces is the demand by our customers for more efficient and
technologically advanced services and tools. We have invested a substantial
amount of our time and capital into developing and commercializing technologies
that are of value to our customers and that enable us to compete effectively
with the major integrated oilfield service companies. During the third quarter
of 2004, we began to market our PathMaker(R) 12 1/4" 3-Dimensional Rotary
Steerable technology. We expect commercialization of the 3-Dimensional Rotary
Steerable technology to improve the utilization of our logging-while-drilling,
measurement-while-drilling and directional drilling services, as our customers
are increasingly requiring this type of technology as a prerequisite for a
drilling project or contract. We are currently developing a PathMaker(R) 8 1/2"
3-Dimensional Rotary Steerable tool and we expect to be able to offer this tool
on a commercial basis during the second half of 2005.

     Introduced on a commercial basis in late 2004, our Array Wave Resistivity
technology is the first of our next generation of logging-while-drilling tools.
We believe that our Array Wave Resistivity tools provide a more robust and
accurate resistivity measurement. Tools and data analysis in this technology
improve the precision and reliability of formation data obtained through the
analysis of electromagnetic wave transmissions through the formation surrounding
a well-bore. Our Array Wave Resistivity tools are also designed to withstand
high pressure (25,000 psi) and high temperature (3507F) well conditions.

  COMPLETION AND WORKOVER RELATED PRODUCTS AND SERVICES

     Our completion and workover related products and services segment provided
approximately 36% of our total consolidated revenue for the first six months of
2005. Revenues provided by this segment are almost entirely derived from the
United States and the Gulf of Mexico. While revenues from this segment are
affected by the level of oil and natural gas prices, activity in this segment is
only modestly affected by drilling activity (see the discussion under Drilling
Related Products and Services above). As a result, our completion and workover
segment has provided stability during prolonged downturns in drilling activity.

                                        11
<PAGE>

     We have increased our revenue capacity in this segment through capital
spending in 2003, 2004 and the first six months of 2005, which, when combined
with our acquisitions, has strengthened and further diversified our operations.
Continued growth in this segment will be dependent upon, among other factors,
industry activity levels, prices of oil and natural gas, our capital expenditure
program and our ability to attract and retain qualified service personnel and
field engineers required to operate the specialized equipment used in this
business.

  DISCONTINUED OPERATIONS

     In March 2004, we committed to the divestiture of our maintenance and
safety related products and services segment. Accordingly, this segment has been
included in the Consolidated Statements of Operations and Comprehensive Income
for 2004 as discontinued operations. In April 2004, we completed the sale of
Well Safe, Inc., one of the two companies that formerly comprised the
maintenance and safety related products and services segment, for cash
consideration of $28.0 million. Additionally, in December 2004, we sold the
remaining entity that formerly comprised this segment, Charles Holston, Inc.,
for consideration of $2.0 million, consisting of $1.0 million in cash and a $1.0
million subordinated promissory note due December 31, 2009. We sold Well Safe
and Charles Holston pursuant to customary stock purchase agreements in which we
made customary representations and warranties, agreed to customary covenants and
agreed to indemnify the buyers of these businesses for certain matters, subject
to certain caps, limitations and deductibles. These sales resulted in a loss of
$5.1 million for the year ended December 31, 2004.

RESULTS OF OPERATIONS

     The following information should be read in conjunction with our
Consolidated Financial Statements and the accompanying notes presented elsewhere
in this Form 10-Q.

  THREE MONTHS ENDED JUNE 30, 2005 COMPARED TO THE THREE MONTHS ENDED JUNE 30,
  2004

     Revenues.  Revenues increased by $48.9 million, or approximately 45%, to
$157.3 million for the three months ended June 30, 2005 from $108.4 million for
the three months ended June 30, 2004. This increase was primarily attributable
to higher demand for certain of our products and services, combined with the
benefit of increased revenue capacity from our capital expenditures.

     Revenues from our drilling related products and services increased by $32.9
million, or approximately 49%, to $100.7 million for the three months ended June
30, 2005 from $67.8 million for the three months ended June 30, 2004. This
increase, primarily attributable to higher demand for our
logging-while-drilling, measurement-while-drilling and directional drilling
services, rental tools and drilling fluids products, included an increase in
revenues from services provided offshore in the Gulf of Mexico despite the
relatively flat activity in that market. The increase in service revenues
provided offshore in the Gulf of Mexico was attributable to improved utilization
of our tools and services used in this market and included an increase in
revenues from our new technologies, including the Pathmaker(R) and Array Wave
Resistivity tools discussed earlier.

     Revenues from our completion and workover related products and services
increased by $16.0 million, or approximately 39%, to $56.6 million for the three
months ended June 30, 2005 from $40.6 million for the three months ended June
30, 2004. This increase was the result of higher utilization of our coiled
tubing and cased-hole wireline fleet and higher demand for our completion
fluids.

     Cost of Revenues.  Cost of revenues increased by $24.3 million, or
approximately 38% to $87.8 million for the three months ended June 30, 2005 from
$63.5 million for the three months ended June 30, 2004. As a percentage of
revenues, cost of revenues decreased to 56% for the three months ended June 30,
2005 from 59% for the three months ended June 30, 2004. The decrease in cost of
revenues as a percentage of revenues was primarily due to improved pricing and a
change in our revenue mix. In particular, our revenue mix was affected by sales
increases in our higher margin rental tool, coiled tubing and cased-hole
wireline operations.

     Selling, General and Administrative Expenses.  Selling, general and
administrative expenses increased by $7.1 million, or approximately 35%, to
$27.5 million for the three months ended June 30, 2005 from

                                        12
<PAGE>

$20.4 million for the three months ended June 30, 2004. The increase was
primarily attributable to increased personnel costs related to expansion efforts
within all of our business lines. As a percentage of revenues, selling, general
and administrative expenses decreased to 17% for the three months ended June 30,
2005 from 19% for the three months ended June 30, 2004.

     Warehouse Fire Related Costs.  On April 17, 2005, a Houston warehouse
facility operated by one of our subsidiaries was destroyed by a fire. For the
quarter ended June 30, 2005, we reported $3.7 million in costs associated with
this fire, net of approximately $0.8 million in anticipated insurance
reimbursements. This amount has been reflected in the Consolidated Statements of
Operations and Comprehensive Income (Loss) under the caption "Warehouse fire
related costs" and as a reduction to operating income for the drilling segment
in Footnote 8 "Operating Segments" for the three and six months ended June 30,
2005.

     Research and Development Expenses.  Research and development expenses
increased by $1.2 million, or approximately 36%, to $4.5 million for the three
months ended June 30, 2005 from $3.3 million for the three months ended June 30,
2004. This increase was the result of increased research and development
spending on our PathFinder Energy Services, Inc. technologies, including our
PathMaker(R) 8 1/2" 3-Dimensional Rotary Steerable tool, our slim density
neutron stand-off caliper tool and other research and development initiatives.

     Depreciation and Amortization.  Depreciation and amortization increased by
$3.0 million, or approximately 27%, to $14.0 million for the three months ended
June 30, 2005 from $11.0 million for the three months ended June 30, 2004. This
increase was largely the result of depreciation expense associated with our
capital expenditures.

     Interest and Other Expense.  Interest and other expense for the three
months ended June 30, 2005 was $2.9 million, a decrease of $2.4 million, or
approximately 45%, from $5.3 million for the three months ended June 30, 2004.
This decrease was primarily due to the write-off of deferred financing costs of
$3.1 million in June 2004 associated with the retirement of our previous credit
facility, partially offset by interest costs associated with our interest rate
swap agreements and rising interest rates experienced during the quarter ended
June 30, 2005.

     Net Income.  Net income for the three months ended June 30, 2005 was $11.2
million, an increase of $9.6 million, or approximately 600%, from the $1.6
million reported for the three months ended June 30, 2004. During the quarter
ended June 30, 2005, we settled an audit that was being conducted by the United
Kingdom's Inland Revenue, regarding our 1999 and 2000 accounts. The settlement
was less than the amount which we had reserved for this contingency. As such we
had a related tax benefit arise during the second quarter of 2005 which reduced
our effective tax rate for the quarter to approximately 33.2%. We expect,
however, that our effective tax rate will approximate 40% from the remainder of
2005.

  SIX MONTHS ENDED JUNE 30, 2005 COMPARED TO THE SIX MONTHS ENDED JUNE 30, 2004

     Revenues.  Revenues increased by $83.7 million, or approximately 39%, to
$299.7 million for the six months ended June 30, 2005 from $216.0 million for
the six months ended June 30, 2004. This increase was primarily attributable to
higher demand for certain of our products and services, combined with the
benefit of increased revenue capacity from our capital expenditures.

     Revenues from our drilling related products and services increased by $51.6
million, or approximately 37%, to $192.5 million for the six months ended June
30, 2005 from $140.9 million for the six months ended June 30, 2004. This
increase, primarily attributable to higher demand for our
logging-while-drilling, measurement-while-drilling and directional drilling
services, rental tools and drilling fluids products, included an increase in
revenues from services provided offshore in the Gulf of Mexico despite the
relatively flat activity in that market. The increase in service revenues
provided offshore in the Gulf of Mexico was attributable to improved utilization
of our tools and services used in this market and included an increase in
revenues from our new technologies, including the Pathmaker(R) and Array Wave
Resistivity tools discussed earlier.

     Revenues from our completion and workover related products and services
increased by $32.1 million, or approximately 43%, to $107.2 million for the six
months ended June 30, 2005 from $75.1 million for the six

                                        13
<PAGE>

months ended June 30, 2004. This increase was the result of higher utilization
of our coiled tubing and cased-hole wireline fleet and higher demand for our
completion fluids.

     Cost of Revenues.  Cost of revenues increased by $42.4 million, or
approximately 34%, to $168.8 million for the six months ended June 30, 2005 from
$126.4 million for the six months ended June 30, 2004. As a percentage of
revenues, cost of revenues decreased to 56% for the six months ended June 30,
2005 from 59% for the six months ended June 30, 2004. The decrease in cost of
revenues as a percentage of revenues was primarily due to improved pricing and a
change in our revenue mix. In particular, our revenue mix was affected by sales
increases in our higher margin rental tool, coiled tubing and cased-hole
wireline operations.

     Selling, General and Administrative Expenses.  Selling, general and
administrative expenses increased by $11.5 million, or approximately 27%, to
$53.4 million for the six months ended June 30, 2005 from $41.9 million for the
six months ended June 30, 2004. The increase was primarily attributable to
increased personnel costs related to expansion efforts within all of our
business lines. As a percentage of revenues, selling, general and administrative
expenses decreased to 18% for the six months ended June 30, 2005 from 19% for
the six months ended June 30, 2004.

     Warehouse Fire Related Costs.  On April 17, 2005, a Houston warehouse
facility operated by one of our subsidiaries was destroyed by a fire. For the
six months ended June 30, 2005, we reported $3.7 million in costs associated
with this fire, net of approximately $0.8 million in anticipated insurance
reimbursements. This amount has been reflected in the Consolidated Statements of
Operations and Comprehensive Income (Loss) under the caption "warehouse fire
related costs" and as a reduction to operating income for the drilling segment
in Footnote 8 "Operating Segments" for the three and six months ended June 30,
2005.

     Research and Development Expenses.  Research and development expenses
increased by $3.0 million, or approximately 48%, to $9.3 million for the six
months ended June 30, 2005 from $6.3 million for the six months ended June 30,
2004. This increase was the result of increased research and development
spending on our PathFinder Energy Services, Inc. technologies, including our
PathMaker(R) 8 1/2" 3-Dimensional Rotary Steerable tool, our slim density
neutron stand-off caliper tool and other research and development initiatives.

     Depreciation and Amortization.  Depreciation and amortization increased by
$6.0 million, or approximately 28%, to $27.8 million for the six months ended
June 30, 2005 from $21.8 million for the six months ended June 30, 2004. This
increase was largely the result of depreciation expense associated with our
capital expenditures.

     Interest and Other Expense.  Interest and other expense for the six months
ended June 30, 2005 was $5.3 million, a decrease of $2.2 million, or
approximately 29%, from $7.5 million for the six months ended June 30, 2004.
This decrease was primarily due to the write off of deferred financing costs of
$3.1 million in June 2004 associated with the retirement of our previous credit
facility, partially offset by interest costs associated with our interest rate
swap agreements and rising interest rates experienced during the first half of
2005.

     Net Income.  Net income for the six months ended June 30, 2005 was $19.9
million, an increase of $13.3 million, or approximately 202%, from the $6.6
million reported for the six months ended June 30, 2004. During the quarter
ended June 30, 2005, we settled an audit that was being conducted by the United
Kingdom's Inland Revenue, regarding our 1999 and 2000 accounts. The settlement
was less than the amount which we had reserved for this contingency. As such we
had a related tax benefit arise during the second quarter of 2005 which reduced
our effective tax rate for the six months ended June 30, 2005 to approximately
36.7%. We expect, however, that our effective tax rate will approximate 40% from
the remainder of 2005.

RECENT ACCOUNTING PRONOUNCEMENTS

     In December 2004, the Financial Accounting Standards Board ("FASB") issued
Statement of Financial Accounting Standards No. 123R "Share-Based Payment"
("SFAS 123R"). SFAS 123R revises SFAS 123, supersedes APB No. 25 and requires
companies to recognize the cost of employee stock options and other awards of
stock-based compensation based on the fair value of the award as of the grant
date. The FASB

                                        14
<PAGE>

established the beginning of the first interim or annual period that begins
after June 15, 2005 as the effective date for SFAS 123R, and we had planned to
adopt the requirements of SFAS 123R effective January 1, 2005. However, on April
14, 2005, the SEC announced the adoption of a new rule that amended the required
adoption dates for SFAS 123R. The SEC's rule allows most larger reporting
companies to implement SFAS 123R at the beginning of their next fiscal year,
instead of the next reporting period, that begins after June 15, 2005. As a
result of the SEC's new rule, we plan to delay the adoption of the requirements
of SFAS 123R until the beginning of our fiscal year that begins on January 1,
2006.

LIQUIDITY AND CAPITAL RESOURCES

     Our primary uses for cash are working capital, capital expenditures,
research and development expenditures, acquisitions and principal and interest
payments on indebtedness. Our primary sources of liquidity are cash reserves,
cash generated by operations and amounts available to be drawn under our
revolving credit facility. To the extent our cash requirements exceed our
sources of liquidity, we will be required to fund our cash requirements through
other means, such as through debt and equity financing activities, or we will be
required to curtail our expenditures.

  CASH FLOW

     Working capital was $138.5 million as of June 30, 2005 and $121.6 million
as of December 31, 2004. Net cash provided by operating activities was $34.1
million for the six months ended June 30, 2005 and $22.3 million for the six
months ended June 30, 2004. The increase in working capital and cash flow from
operating activities was principally attributable to higher operating levels
across all business segments.

     Net cash used in investing activities was $44.5 million for the six months
ended June 30, 2005 and $26.8 million for the six months ended June 30, 2004.
The increase in net cash used in investing activities was principally the result
of capital expenditures, offset by lost-in-hole proceeds.

     Net cash provided by financing activities was $10.8 million for the six
months ended June 30, 2005. Net cash used in financing activities was $17.0
million for the six months ended June 30, 2004. Changes in net cash related to
financing activities were primarily the result of borrowings and repayments
under our Credit Facility, which is described below.

     For the six months ended June 30, 2005, we made capital expenditures of
$50.8 million, primarily for rental tool inventory, logging-while-drilling and
measurement-while-drilling tools, wireline equipment and coil tubing units,
including expenditures for the replacement of equipment lost-in-hole. In
addition, we incurred $9.3 million in research and development expenses for the
six months ended June 30, 2005.

  CAPITAL RESOURCES

     On May 5, 2005, we entered into a First Amendment to our credit facility
(the "First Amendment") that, among other things, increased the amount we may
borrow under our credit facility to $375.0 million from $237.5 million, extended
the maturity date of such borrowings to May 5, 2010 from June 30, 2009, improved
certain of the pricing terms associated with our credit facility and relaxed
obligations under certain of the operational and financial covenants imposed by
our credit facility.

     As of June 30, 2005, we had an outstanding loan balance of $190.0 million
and approximately $5.6 million in letters of credit issued under our credit
facility, resulting in an available borrowing capacity on such date of
approximately $179.4 million. As of June 30, 2005, we had elected to pay
interest on our outstanding borrowings at LIBOR plus the then applicable margin
of 1.5%.

     Amounts borrowed under our credit facility bear interest, at our election,
at either a variable rate equal to LIBOR, plus a margin ranging from 1.0% to
2.0% depending upon our leverage ratio, or an alternate base rate equal to the
higher of (1) the prime rate or (2) the federal funds rate plus 0.5%, plus a
margin ranging from zero to 1.0% depending upon our leverage ratio.

                                        15
<PAGE>

     Our credit facility is secured by a lien on substantially all of our
property and assets, a pledge of all of the capital stock of our domestic
subsidiaries and a pledge of not greater than 65% of the capital stock of each
of our top tier foreign subsidiaries. In addition, our credit facility is
guaranteed by all of our domestic subsidiaries. Our credit facility requires,
among other things, that we maintain certain financial ratios, including a
leverage ratio and an interest coverage ratio, and a specified net worth. Our
credit facility limits the amount of capital expenditures we may make, the
amount of debt we may incur outside of the credit facility, the amount of future
investments we may make, our ability to pay dividends and our ability to engage
in certain business combination transactions.

     Our credit facility contains customary events of default, including payment
defaults, breaches of representations and warranties, covenant defaults,
cross-defaults to certain other indebtedness agreements in excess of specified
amounts, certain events of bankruptcy and insolvency, judgments in excess of
specified amounts, ERISA defaults, certain failures of guaranty or security
documents supporting our credit facility to be in full force and effect and a
change of control.

     Financing costs associated with our credit facility of approximately $1.6
million and financing costs associated with the First Amendment of approximately
$1.0 million will be ratably amortized to interest expense over the five year
term of the credit facility. As a result of the approximate $160.0 million
repayment of our previous credit facility in June 2004, we wrote-off
approximately $3.1 million in non-cash financing costs to interest expense
during the second quarter of 2004 that had previously been deferred.

     The descriptions of our credit facility and the First Amendment are
qualified in their entirety by reference to the credit facility which is filed
as Exhibit 10.8 to our Quarterly Report on Form 10-Q for the quarter ended June
30, 2004 and to the First Amendment which is filed as Exhibit 10.8(a) to our
Quarterly Report on Form 10-Q for the quarter ended March 31, 2005.

  FUTURE CAPITAL REQUIREMENTS

     We anticipate that acquisitions of complementary companies, assets and
product lines will continue to play an important role in our business strategy.
While there are currently no unannounced agreements or ongoing negotiations for
the acquisition of any material businesses or assets, such transactions can be
effected quickly and may occur at any time. Likewise, we will continue to need
to make capital expenditures for tools and equipment and to make research and
development expenditures to maintain and improve the quality of our products and
services. We have made capital expenditures of $50.8 million through June 30,
2005 and currently estimate that we will make an aggregate of approximately
$90.0 million of such expenditures in 2005. We have made research and
development expenditures of $9.3 million through June 30, 2005 and currently
estimate that we will make an aggregate of approximately $18.0 million of such
expenditures in 2005.

     We believe that our internally generated cash flow, combined with access to
our credit facility will be sufficient to meet the liquidity requirements
necessary to fund our operations, capital expenditures, research and development
and debt service requirements for at least the next 12 months. However, our
ability to maintain our credit facility and the sufficiency of our internally
generated cash flow can be impacted by economic conditions outside of our
control.

     The continuation of our acquisition strategy will require substantial
capital. We currently intend to finance future acquisitions through issuances of
our equity or debt securities and through borrowings under our credit facility.
Using debt to complete acquisitions could substantially limit our operational
and financial flexibility and using stock could dilute the ownership interests
of our existing shareholders. The extent to which we will be able or are willing
to use our common stock to make acquisitions will depend on its market value
from time to time and the willingness of potential sellers to accept it as full
or partial payment. If we are unable to obtain additional capital on acceptable
terms, we may be unable to grow through acquisitions.

                                        16
<PAGE>

  OFF BALANCE SHEET ARRANGEMENTS

     With the exception of operating leases on real property and automobile
leases, we have no off-balance sheet debt or other off-balance sheet financing
arrangements.

ITEM 3.  QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

     We are exposed to market risks. Market risk is the potential loss arising
from adverse changes in market prices and rates. Our market risk could arise
from changes in interest rates and foreign currency exchange rates. We have
utilized, and may continue to utilize, derivative and other financial
instruments to manage these market risks. We have not entered into derivative or
other financial instruments for trading or speculative purposes.

     Interest Rate Risk.  We are subject to market risk exposure related to
changes in interest rates. To manage this risk, we have entered into interest
rate swap agreements with a total notional amount of $150.0 million related to
our credit facility. Under these agreements, we receive interest at a floating
rate of three month LIBOR plus the applicable spread on the revolving credit
facility and pay interest at a fixed rate of 4.24% plus the applicable spread on
the revolving credit facility. Assuming our current level of borrowings and
considering the effect of the interest rate swap agreements, a 100 basis point
increase in interest rates under these borrowings would have increased our
interest expense by approximately $0.8 million for the six months ended June 30,
2005 and 2004.

     Foreign Currency Exchange Risk.  Our earnings and financial position are
affected by foreign exchange rate fluctuations. We currently do not hedge
against foreign currency translation risks and we believe that foreign currency
exchange risk is unlikely to be significant to our operations.

     Stock Price Volatility.  Our ability to raise capital at a reasonable cost
of capital is, in part, affected by the market price of our stock. The market
price of our stock may be influenced by many factors including variations in our
earnings, variations in oil and natural gas prices, the level of exploration,
development and production activity of, and the corresponding capital spending
by, our customers, investor perceptions of us and other oilfield service
companies and the liquidity of the market for our common stock.

ITEM 4.  CONTROLS AND PROCEDURES

     Disclosure Controls and Procedures.  We maintain disclosure controls and
procedures designed to ensure that the information we are required to disclose
in the reports we file with the SEC is recorded, processed, summarized and
reported within the time periods specified in the rules and forms of the SEC.
Based on an evaluation of our disclosure controls and procedures as of the end
of the period covered by this report conducted by our management, with the
participation of our Chief Executive Officer and Chief Financial Officer, our
Chief Executive Officer and Chief Financial Officer believe that these controls
and procedures are effective to ensure that we are able to collect, process and
disclose the information we are required to disclose in the reports we file with
the SEC within the required time periods.

     Internal Control over Financial Reporting.  During the period covered by
this report, there were no changes in our internal control over financial
reporting that have materially affected or are reasonably likely to materially
affect our internal control over financial reporting.

     Our management, including our Chief Executive Officer and Chief Financial
Officer, does not expect that our disclosure controls and procedures or our
internal control over financial reporting will prevent and/or detect all error
and all fraud. A control system, no matter how well conceived and operated, can
provide only reasonable, not absolute, assurance that the objectives of the
control system are met. Further, the design of a control system must reflect the
fact that there are resource constraints, and the benefits of controls must be
considered relative to their costs. Because of the inherent limitations in all
control systems, no evaluation of controls can provide absolute assurance that
all control issues and instances of fraud, if any, within our company have been
detected.

                                        17
<PAGE>

                                    PART II

                               OTHER INFORMATION

ITEM 4.  SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

     The 2004 annual meeting of the shareholders of the Company was held on May
11, 2005. The purpose of the meeting was to elect members of our Board of
Directors.

     At the annual meeting, each of the directors nominated by our Board of
Directors was re-elected. The votes cast for each nominee and the votes withheld
were as follows:

<Table>
<Caption>
                                                                 FOR       WITHHELD
                                                              ----------   --------
<S>                                                           <C>          <C>
Kenneth T. White, Jr. ......................................  21,663,036   507,182
John R. Brock...............................................  21,629,999   540,219
James D. Lightner...........................................  21,759,726   410,492
Christopher Mills...........................................  21,697,486   472,732
Milton L. Scott.............................................  21,630,199   540,019
Robert H. Whilden, Jr. .....................................  21,697,354   472,864
</Table>

ITEM 6.  EXHIBITS

     The documents listed on the Exhibit Index following the signature pages
hereto are filed with this Quarterly Report on Form 10-Q, and the contents of
such Exhibit Index are hereby incorporated herein by reference.

                                        18
<PAGE>

                                   SIGNATURES

     Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned, thereunto duly authorized.

<Table>
<S>                                      <C>
                                         W-H ENERGY SERVICES, INC.

Date: August 5, 2005                                       By: /s/ JEFFREY L. TEPERA
                                           ----------------------------------------------------------
                                                               Jeffrey L. Tepera
                                                   Vice President and Chief Financial Officer
                                                         (Principal Financial Officer)

Date: August 5, 2005                                     By: /s/ ERNESTO BAUTISTA, III
                                           ----------------------------------------------------------
                                                             Ernesto Bautista, III
                                                    Vice President and Corporate Controller
                                                         (Principal Accounting Officer)
</Table>

                                        19
<PAGE>

                                 EXHIBIT INDEX

<Table>
<Caption>
   NUMBER                                   EXHIBIT TITLE
   ------                                   -------------
<S>            <C>   <C>
   11.1*       --    Computation of Per Share Earnings

   31.1*       --    Certification of Chief Executive Officer of W-H Energy
                     Services, Inc. pursuant to Section 302 of the Sarbanes-Oxley
                     Act of 2002

   31.2*       --    Certification of Chief Financial Officer of W-H Energy
                     Services, Inc. pursuant to Section 302 of the Sarbanes-Oxley
                     Act of 2002

   32.1*       --    Certification of Chief Executive Officer of W-H Energy
                     Services, Inc. pursuant 18 U.S.C. Section 1350

   32.2*       --    Certification of Chief Financial Officer of W-H Energy
                     Services, Inc. pursuant 18 U.S.C. Section 1350
</Table>

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

* Filed herewith