<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 MARCH 31, 2004

                                  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 000-31346

                           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 May 4, 2004 there were outstanding 27,451,220 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 (unaudited) -- March 31, 2004
                   and December 31, 2003.....................................    1
                 Consolidated Statements of Operations and Comprehensive
                   Income (unaudited) -- Three months ended March 31, 2004
                   and 2003..................................................    2
                 Consolidated Statements of Cash Flows (unaudited) -- Three
                   months ended March 31, 2004 and 2003......................    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......................................................   15
Item 4.          Controls and Procedures.....................................   15

PART II
OTHER INFORMATION
Item 1.          Legal Proceedings...........................................   16
Item 6.          Exhibits and Reports on Form 8-K............................   16
Signatures...................................................................   17
</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)
                                  (UNAUDITED)

<Table>
<Caption>
                                                              MARCH 31,   DECEMBER 31,
                                                                2004          2003
                                                              ---------   ------------
<S>                                                           <C>         <C>
Current Assets:
  Cash and cash equivalents.................................  $ 17,246      $ 11,878
  Accounts receivable, net of allowance of $4,478 and
     $4,465, respectively...................................    84,201        80,888
  Inventories...............................................    40,079        37,384
  Deferred income taxes.....................................     4,788         6,600
  Prepaid expenses and other................................     4,708         5,930
  Assets held for sale......................................    32,293        30,652
                                                              --------      --------
     Total current assets...................................   183,315       173,332
Property and equipment, net.................................   204,389       201,176
Goodwill and other intangibles, net.........................   116,532       116,876
Other assets, net...........................................     9,661         9,941
                                                              --------      --------
       Total assets.........................................  $513,897      $501,325
                                                              ========      ========
Current Liabilities:
  Accrued liabilities.......................................  $ 22,881      $ 26,388
  Accounts payable..........................................    19,541        16,120
  Current maturities of long-term debt......................     8,800        10,763
  Liabilities associated with assets held for sale..........     5,902         5,511
                                                              --------      --------
     Total current liabilities..............................    57,124        58,782
Long-term debt, net of current maturities...................   172,538       166,962
Deferred income taxes.......................................    25,779        25,269
Other long-term obligations.................................     2,850         2,852

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 27,421,491 and 27,400,878 shares issued and
     outstanding, respectively..............................         3             3
  Additional paid-in capital................................   211,897       211,683
  Other comprehensive income................................     9,632         6,667
  Retained earnings.........................................    34,074        29,107
                                                              --------      --------
     Total shareholders' equity.............................   255,606       247,460
                                                              --------      --------
       Total liabilities and shareholders' equity...........  $513,897      $501,325
                                                              ========      ========
</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
               (IN THOUSANDS, EXCEPT SHARE AND PER SHARE AMOUNTS)
                                  (UNAUDITED)

<Table>
<Caption>
                                                              FOR THE THREE MONTHS ENDED
                                                                       MARCH 31,
                                                              ---------------------------
                                                                  2004           2003
                                                              ------------   ------------
<S>                                                           <C>            <C>
Revenues....................................................  $   107,544    $    87,167
Costs and expenses:
  Cost of revenues..........................................       62,916         47,396
  Selling, general and administrative.......................       21,521         17,119
  Research and development..................................        3,038          2,553
  Depreciation and amortization.............................       10,738          8,424
                                                              -----------    -----------
     Total costs and expenses...............................       98,213         75,492
                                                              -----------    -----------
     Operating income.......................................        9,331         11,675
Other (income) expense:
  Interest expense, net.....................................        2,268          1,788
  Other income, net.........................................          (81)           (93)
                                                              -----------    -----------
     Income before income taxes.............................        7,144          9,980
  Provision for income taxes................................        2,750          3,843
                                                              -----------    -----------
     Income from continuing operations......................        4,394          6,137
  Income (loss) from discontinued operations, net of tax....          573           (269)
                                                              -----------    -----------
     Net income.............................................  $     4,967    $     5,868
                                                              ===========    ===========
Comprehensive income:
  Net income................................................  $     4,967    $     5,868
  Foreign currency translation adjustment...................        2,965           (761)
                                                              -----------    -----------
  Comprehensive income......................................  $     7,932    $     5,107
                                                              ===========    ===========
Earnings (loss) per share:
  Basic.....................................................
       From continuing operations...........................  $      0.16    $      0.23
       From discontinued operations.........................         0.02          (0.01)
                                                              -----------    -----------
          Total.............................................  $      0.18    $      0.22
                                                              ===========    ===========
  Diluted...................................................
       From continuing operations...........................  $      0.16    $      0.22
       From discontinued operations.........................         0.02          (0.01)
                                                              -----------    -----------
          Total.............................................  $      0.18    $      0.21
                                                              ===========    ===========
Number of shares used in calculation of earnings per share:
  Basic.....................................................   27,410,246     27,042,193
  Diluted...................................................   28,122,212     27,938,583
</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 THREE MONTHS
                                                                 ENDED MARCH 31,
                                                              ---------------------
                                                                2004        2003
                                                              ---------   ---------
<S>                                                           <C>         <C>
Cash Flows from Operating Activities:
  Net income................................................  $  4,967    $  5,868
  Adjustments to reconcile net income to cash provided by
     operating activities --
     Depreciation and amortization..........................    10,738       8,424
     Gain on the sale of assets.............................    (3,491)     (2,603)
     Deferred tax provision.................................     2,322       2,725
     Amortization of deferred compensation..................        --         101
     Amortization of deferred financing costs...............       343         220
     Tax benefit from employee stock option plan............       117         124
     Changes in operating assets and liabilities, excluding
      effects of discontinued operations --
       Increase in accounts receivable, net.................    (3,333)     (3,472)
       Increase in inventories..............................    (2,705)       (386)
       Decrease (increase) in prepaid expenses and other....     1,222        (490)
       (Increase) decrease in other assets, net.............       (17)        807
       Decrease in accounts payable and accrued
        liabilities.........................................      (105)     (4,143)
                                                              --------    --------
          Net cash provided by operating activities.........    10,058       7,175
                                                              --------    --------
Cash Flows from Investing Activities:
  Additions to property and equipment.......................   (14,592)    (13,342)
  Proceeds from sale of property and equipment..............     5,463       4,233
                                                              --------    --------
          Net cash used in investing activities.............    (9,129)     (9,109)
                                                              --------    --------
Cash Flows from Financing Activities:
  Proceeds from the issuance of debt........................    21,492      26,185
  Payments on debt..........................................   (17,879)    (23,060)
  Proceeds from the exercise of stock options and stock
     purchase warrants......................................        97          84
                                                              --------    --------
          Net cash provided by financing activities.........     3,710       3,209
                                                              --------    --------
Effect of exchange rate changes on cash.....................     1,979      (1,012)
Effect of discontinued operations on cash...................    (1,250)       (721)
Net increase (decrease) in Cash and Cash Equivalents........     5,368        (458)
Cash and Cash Equivalents, beginning of period..............    11,878       9,098
                                                              --------    --------
Cash and Cash Equivalents, end of period....................  $ 17,246    $  8,640
                                                              ========    ========
</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, rental
tools (including drill pipe), down-hole drilling motors 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, 2003 filed with the
Securities and Exchange Commission. 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 months ended March 31, 2004 are not necessarily indicative of the results
that may be expected for the year ending December 31, 2004.

  DISCONTINUED OPERATIONS

     At the end of March 2004, W-H committed to the divestiture of the
maintenance and safety related products and services segment. Accordingly, this
segment has been included in the income statement as discontinued operations and
in the balance sheet as assets and liabilities held for sale. Summary financial
results for this segment are as follows:

<Table>
<Caption>
                                                               FOR THE THREE
                                                               MONTHS ENDED
                                                                 MARCH 31,
                                                              ---------------
                                                               2004     2003
                                                              ------   ------
<S>                                                           <C>      <C>
Revenues....................................................  $9,755   $7,523
Income (loss) before taxes..................................  $  932   $ (438)
</Table>

  RECLASSIFICATIONS

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

ACCOUNTING POLICIES AND PROCEDURES

     W-H has not added to or changed its accounting policies since December 31,
2003. 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, 2003.

                                        4
<PAGE>
                           W-H ENERGY SERVICES, INC.

           NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

2.  EARNINGS PER SHARE

     Basic earnings per share excludes dilution and is computed by dividing net
income 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 warrants. For the three
months ended March 31, 2004 and 2003, shares of 711,996 and 896,390,
respectively, resulting from the assumed exercise of outstanding options and
warrants, were added to the denominator because the inclusion of such shares
would be dilutive. For the three months ended March 31, 2004 and 2003, shares of
2,053,550 and 1,590,074, respectively, were excluded from the computation of
earnings per common share, because the inclusion of such shares would be
anti-dilutive.

3.  DEBT

  CREDIT FACILITY

     In the first quarter of 2003, W-H obtained an additional revolving loan
commitment of $10.0 million and a supplemental Term B loan of $5.0 million under
its credit facility. During the third quarter of 2003, W-H amended its credit
facility to, among other things, include a $70.0 million Term C loan facility.
As so amended, the credit facility includes the following features:

     - a $40.0 million Term A loan facility, of which $17.0 million was
       outstanding as of March 31, 2004, that amortizes over five years, matures
       on October 16, 2005 and requires that W-H make annual principal
       repayments ranging from zero in the first year to $12.3 million in the
       fifth year;

     - an $85.0 million Term B loan facility, of which $82.3 million was
       outstanding as of March 31, 2004, that amortizes over six and one-half
       years, matures on April 16, 2007 and requires that W-H make annual
       principal repayments of $0.85 million in each of the first six years with
       the outstanding balance due on the maturity date;

     - a $70.0 million Term C loan facility, of which $69.5 million was
       outstanding as of March 31, 2004, that amortizes over three and one-half
       years, matures on April 16, 2007 and requires that W-H make annual
       principal repayments of $0.7 million in each of the first three years
       with the outstanding balance due on the maturity date; and

     - a $55.0 million revolving credit facility, of which $12.5 million was
       outstanding as of March 31, 2004, that may be borrowed, repaid and
       reborrowed from time to time and matures on October 16, 2005. The credit
       facility provides that W-H may request the issuance of letters of credit.
       Outstanding letters of credit reduce the available amount that W-H may
       borrow under the revolving credit facility. As of March 31, 2004,
       approximately $4.7 million in letters of credit had been issued under the
       credit facility to guarantee payment of claims for commercial insurance
       purposes. These letters of credit are issued for a period of one year,
       with automatic one year extensions. Partial drawings against each letter
       of credit are permitted.

     At W-H's option, amounts borrowed under the credit facility bear interest
at either a variable rate equal to the reserve-adjusted LIBOR or an alternate
base rate, plus, in each case, an applicable margin. The applicable margin (1)
ranges from 1.75% to 3.00% in the case of a LIBOR based loan under the revolving
loan facility or the Term A loan facility, (2) is equal to 3.25% in the case of
a LIBOR based loan under the Term B loan facility and (3) is equal to 3.00% in
the case of a LIBOR based loan under the Term C loan facility. For alternate
base rate loans, the applicable margin (1) ranges from 0.75% to 2.00% under the
revolving loan facility and the Term A loan facility, (2) is equal to 2.25%
under the Term B loan facility and (3) is equal to 2.00% under the Term C loan
facility. The foregoing margins are subject to adjustment based on a debt
service coverage ratio and a leverage ratio.

                                        5
<PAGE>
                           W-H ENERGY SERVICES, INC.

           NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

     The credit facility is secured by a lien on substantially all of W-H's
property and assets, a pledge of all of the capital stock of W-H's material
domestic subsidiaries and a pledge of not greater than 65% of the capital stock
of each of W-H's foreign subsidiaries. In addition, the credit facility is
guaranteed by all of W-H's material domestic subsidiaries. The credit facility
requires, among other things, that W-H maintain certain financial ratios and
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 and
W-H's ability to pay dividends. As of March 31, 2004, W-H was in compliance with
these restrictive covenants. As of March 31, 2004 and December 31, 2003,
respectively, W-H had outstanding borrowings under the credit facility of $181.3
million and $173.2 million, respectively, of which $12.5 million and $4.0
million, respectively, were outstanding under the revolving credit facility.

     In connection with the Coil Tubing Services, L.L.C. ("CTS") acquisition in
May 2001, W-H issued $4.5 million in 9% convertible subordinated notes to eight
individuals as partial consideration for the acquisition of CTS. The notes were
paid in full in January 2004.

4.  STOCK OPTIONS

     A summary of W-H's stock options as of March 31, 2004 and December 31, 2003
is as follows:

<Table>
<Caption>
                                                            NUMBER OF    WEIGHTED AVERAGE
                                                             OPTIONS     PRICE PER SHARE
                                                            ----------   ----------------
<S>                                                         <C>          <C>
Outstanding December 31, 2003.............................  3,633,458         $13.20
Granted...................................................    181,500          15.28
Exercised/exchanged.......................................    (26,813)          3.87
Expired/canceled..........................................     (1,250)         22.88
                                                            ---------
Outstanding March 31, 2004................................  3,786,895          13.36
                                                            ---------
Exercisable at March 31, 2004.............................  2,355,557           9.66
                                                            ---------
</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 3.8%; dividend rates of
zero; average expected life of 6.5 years and expected volatility of 53.3%. The
3,786,895 options outstanding as of March 31, 2004 have a weighted average
remaining contractual life of 7.2 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.

                                        6
<PAGE>
                           W-H ENERGY SERVICES, INC.

           NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

     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 months ended March 31, 2004 and 2003,
respectively would have been reduced to the following pro forma amounts:

<Table>
<Caption>
                                                               THREE MONTHS
                                                              ENDED MARCH 31,
                                                              ---------------
                                                               2004     2003
                                                              ------   ------
<S>                                                           <C>      <C>
Net income, as reported.....................................  $4,967   $5,868
Add: Total stock-based employee compensation expense
  included in reported net income, net of related tax
  effect....................................................      --      248
Deduct: Total stock-based employee compensation expense
  determined under fair value based method for all awards,
  net of related tax effect.................................    (577)    (558)
                                                              ------   ------
Pro forma net income........................................  $4,390   $5,558
                                                              ======   ======
Earnings per share:
  Basic, as reported........................................  $ 0.18   $ 0.22
  Diluted, as reported......................................  $ 0.18   $ 0.21
  Basic, pro forma..........................................  $ 0.16   $ 0.21
  Diluted, pro forma........................................  $ 0.16   $ 0.20
Weighted-average fair value per share of options granted....  $15.28   $   --
</Table>

5.  SEGMENTS

     Management has elected to aggregate its business unit segments based on the
differences in each segment's customers, the products and services offered and
other economic characteristics. Based on these requirements, 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.

  DRILLING RELATED PRODUCTS AND SERVICES

     The drilling related products and services 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, Brazil and in
selected areas of the Eastern Hemisphere. This segment includes the following
business lines: (i) LWD; (ii) MWD; (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 related products and services segment provides
products and services primarily to 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, cost of revenues, selling, general and
administrative expense, research and development expense and depreciation and
amortization expense by segment. Interest expense and other

                                        7
<PAGE>
                           W-H ENERGY SERVICES, INC.

           NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

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 March 31, 2004 (unaudited):

<Table>
<Caption>
                                             DRILLING   COMPLETION   CORPORATE    TOTAL
                                             --------   ----------   ---------   --------
<S>                                          <C>        <C>          <C>         <C>
Revenues...................................  $73,055     $34,489      $    --    $107,544
Operating income...........................    5,985       5,885       (2,539)      9,331
Depreciation and amortization..............    6,989       3,684           65      10,738
Total assets, net of assets held for
  sale.....................................  285,377     181,695       14,532     481,604
Capital expenditures.......................    8,875       5,678           39      14,592
</Table>

     As of and for the three months ended March 31, 2003 (unaudited):

<Table>
<Caption>
                                              DRILLING   COMPLETION   CORPORATE    TOTAL
                                              --------   ----------   ---------   -------
<S>                                           <C>        <C>          <C>         <C>
Revenues....................................  $56,033     $31,134      $    --    $87,167
Operating income............................    6,995       6,886       (2,206)    11,675
Depreciation and amortization...............    5,404       2,952           68      8,424
Total assets, net of assets held for sale...  242,070     162,659       10,315    415,044
Capital expenditures........................    8,130       5,112          100     13,342
</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
                                                                ENDED MARCH 31,
                                                              --------------------
                                                                2004        2003
                                                              ---------   --------
<S>                                                           <C>         <C>
United States...............................................  $ 90,479    $73,173
North Sea...................................................     7,433      8,130
Other.......................................................     9,632      5,864
                                                              --------    -------
  Total.....................................................  $107,544    $87,167
                                                              ========    =======
</Table>

  OPERATING INCOME

<Table>
<Caption>
                                                              FOR THE THREE MONTHS
                                                                 ENDED MARCH 31,
                                                              ---------------------
                                                                2004        2003
                                                              ---------   ---------
<S>                                                           <C>         <C>
United States...............................................   $ 9,506     $ 9,515
North Sea...................................................    (1,360)        963
Other.......................................................     1,185       1,197
                                                               -------     -------
  Total.....................................................   $ 9,331     $11,675
                                                               =======     =======
</Table>

                                        8
<PAGE>
                           W-H ENERGY SERVICES, INC.

           NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

  LONG-LIVED ASSETS

<Table>
<Caption>
                                                              MARCH 31,   DECEMBER 31,
                                                                2004          2003
                                                              ---------   ------------
<S>                                                           <C>         <C>
United States...............................................  $302,717      $299,461
North Sea...................................................    17,950        18,262
Other.......................................................     9,915        10,270
                                                              --------      --------
  Total.....................................................  $330,582      $327,993
                                                              ========      ========
</Table>

6.  SUBSEQUENT EVENT

     On April 20, 2004, W-H completed the sale of Well Safe, Inc., one of the
two companies that comprise the maintenance and safety related products and
services segment, for cash consideration of $28.0 million.

     The maintenance and safety related products and services segment has been
included in the income statement as discontinued operations and in the balance
sheet as assets and liabilities held for sale.

                                        9
<PAGE>

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

FORWARD-LOOKING STATEMENTS

     The following discussion and analysis may contain forward-looking
statements. 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, the current and expected future
prices of crude oil and natural gas, capital expenditures by customers, activity
levels in the oil and natural gas exploration and production industry, the
development and implementation of new technologies, weather conditions in
offshore markets, risks associated with the occurrence of personal injuries,
loss of life, damage or destruction of property, equipment or the environment
and suspension of operations, 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, an impairment of goodwill, 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.

OVERVIEW OF THE MARKETS FOR OUR PRODUCTS AND SERVICES

     We are a diversified oilfield service company that provides (1) drilling
related products and services and (2) completion and workover related products
and services. Our customers include major and independent oil and natural gas
companies and other oilfield service companies.

     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 68% of our total consolidated revenue for the first three months
of 2004. Approximately 77% of our drilling segment revenue for the first three
months of 2004 was generated in the United States, including the Gulf of Mexico.
The remaining 23% was generated in various international locations, including
Canada, Brazil, Europe, North Africa and the Middle East. The majority of our
revenue continues to be generated domestically. 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. This increase, however, resulted 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
830, 1,032 and 1,122 for 2002, 2003 and the three months ended March 31, 2004,
respectively. Of these figures, land rigs comprised 717, 924 and 1,025,
respectively, and offshore rigs comprised 113, 108 and 97, respectively, for the
same periods.

     The modest 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, the offshore
rig count, where we experience our highest operating margins, has yet to respond
to the

                                        10
<PAGE>

higher levels of natural gas prices and has even declined slightly from 2003. We
believe that the overall outlook for natural gas exploration and development
activity, nonetheless, remains positive. Natural gas production continues to
decline, which should keep upward pressure on natural gas prices and should
eventually generate a recovery in offshore drilling activity. However, the
extent and timing of a recovery in offshore drilling activity remains difficult
to predict.

     Outside of the United States, the North Sea remains our largest drilling
segment market. However, due to the United Kingdom tax law imposing a 10%
supplementary tax on oil and natural gas profits derived from certain North Sea
properties, many of our customers reduced drilling activity in this region.
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 46 in March 2004, after having reached a low of 35 in January 2004.
We do not expect any marked increase in activity levels in the North Sea in the
near term.

     As offshore drilling activity in the United States has stagnated over the
last 24 months, the importance of maintaining market share has become critical.
In response to this market condition, 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 of 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 ("MWD") and
down-hole drilling motor fleet. The increased utilization of our MWD and
down-hole drilling motor fleet has helped to offset decreases in utilization of
our logging-while-drilling ("LWD") fleet, which is primarily driven by the
United States offshore rig count.

     Additionally, our 3-Dimensional Rotary Steerable ("3DRS") and Array Wave
Resistivity ("AWR") technologies are expected to be available for commercial
service during the second half of 2004. These are the first new technologies to
have been developed since PathFinder Energy Services, Inc., our LWD/
MWD/directional drilling subsidiary, was acquired in March 1999. Both
technologies are currently being tested in live-well environments.
Commercialization of the 3DRS technology has been prioritized to improve the
utilization of our LWD, MWD and directional drilling services, as our customers
often require that this type of technology be offered by a service company as a
prerequisite to submitting a bid for a drilling project or contract.
Introduction of our AWR technology is the first of our next generation of LWD
tools, and we expect that it will allow us to offer our customers advanced
resistivity measurements in both high pressure and high temperature well
conditions. We will initially deploy these technologies in the Gulf of Mexico,
Brazil and the North Sea. We believe that the commercialization of these tools
will have a meaningful impact on our future results of operations.

  COMPLETION AND WORKOVER RELATED PRODUCTS AND SERVICES

     This sector is our second largest business segment and provided
approximately 32% of our total consolidated revenue for the first three months
of 2004. Revenues provided by the completion and workover segment are almost
entirely derived from the United States and the Gulf of Mexico. Although
activity levels in the completion and workover of existing oil and natural gas
wells are linked to commodity prices, our completion segment is less commodity
price sensitive than our drilling segment. As a result, our completion and
workover segment has provided stability during prolonged downturns in drilling
activity. We have increased our revenue capacity in this segment through capital
spending in 2002, 2003 and the first three months of 2004, which, when combined
with our acquisitions, has strengthened and further diversified the operations
of this segment.

  DISCONTINUED OPERATIONS

     At the end of March 2004, we committed to the divestiture of our
maintenance and safety related products and services segment. The net book value
of this segment was approximately $26.4 million at March 31, 2004. On April 20,
2004, we completed the sale of Well Safe, Inc., one of the two companies that
comprise this segment, for cash consideration of $28.0 million. We anticipate
that our future operating performance will be enhanced by this divestiture, as
our attention will be focused entirely on our core business segments.

                                        11
<PAGE>

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 MARCH 31, 2004 COMPARED TO THE THREE MONTHS ENDED MARCH 31,
  2003

     Revenues.  Revenues increased by $20.3 million, or approximately 23%, to
$107.5 million for the three months ended March 31, 2004 from $87.2 million for
the three months ended March 31, 2003. This increase was attributable to higher
demand for certain of our products and services, particularly
drilling/completion fluids, directional drilling services, cased-hole wireline
and coiled tubing, as well as the revenue contributions of Continental
Directional Corp. and HydraCoil, Inc., which were acquired in November 2003 and
Dutch, Inc., which was acquired in December 2003.

     Revenues from our drilling related products and services increased by $17.1
million, or approximately 31%, to $73.1 million for the three months ended March
31, 2004 from $56.0 million for the three months ended March 31, 2003. This
increase was primarily attributable to the growth of our North American
directional drilling business, driven by the increase in land drilling activity
levels in the United States, enhanced demand for our drilling fluids products
and the impact of the acquisitions that we consummated during the fourth quarter
of 2003.

     Revenues from our completion and workover related products and services
increased by $3.4 million, or approximately 11%, to $34.5 million for the three
months ended March 31, 2004 from $31.1 million for the three months ended March
31, 2003. This increase was the result of higher utilization of our coiled
tubing and cased-hole wireline fleet, demand for our completion fluids and the
impact of the acquisitions that we consummated during the fourth quarter of
2003.

     Cost of Revenues.  Cost of revenues increased by $15.5 million, or
approximately 33% to $62.9 million for the three months ended March 31, 2004
from $47.4 million for the three months ended March 31, 2003. As a percentage of
revenues, cost of revenues increased to 58.5% for the three months ended March
31, 2004 from 54.4% for the three months ended March 31, 2003. The increase in
cost of revenues as a percentage of revenues was due to the continued effects of
softness in pricing, increased insurance costs and our revenue mix. In
particular, our revenue mix was affected by sales increases in our lower margin
fluids products and directional drilling services.

     Selling, General and Administrative Expenses.  Selling, general and
administrative expenses increased by $4.4 million, or approximately 26%, to
$21.5 million for the three months ended March 31, 2004 from $17.1 million for
the three months ended March 31, 2003. The increase was primarily attributable
to the operating expenses of Continental Directional, HydraCoil and Dutch, which
were acquired in the fourth quarter of 2003, as well as increased personnel
costs related to expansion efforts within our directional drilling business and
corporate compliance initiatives as mandated by law. As a percentage of
revenues, selling, general and administrative expenses increased to 20.0% for
the three months ended March 31, 2004 from 19.6% for the three months ended
March 31, 2003.

     Research and Development Expenses.  Research and development expenses
increased by $0.4 million, or approximately 15%, to $3.0 million for the three
months ended March 31, 2004 from $2.6 million for the three months ended March
31, 2003. This increase was the result of increased research and development
spending on our PathFinder technologies, including our 3DRS and AWR tools and
other research and development initiatives. We believe that we must continue to
develop new technologies in order to improve our market position, especially in
the offshore drilling market.

     Depreciation and Amortization.  Depreciation and amortization increased by
$2.3 million, or approximately 27%, to $10.7 million for the three months ended
March 31, 2004 from $8.4 million for the three months ended March 31, 2003. This
increase was the result of depreciation associated with our continued capital
expenditures, as well as additional depreciation and amortization due to our
acquisitions.

                                        12
<PAGE>

     Interest and Other Expense.  Interest and other expense for the three
months ended March 31, 2004 was $2.2 million, an increase of $0.5 million, or
approximately 29% from $1.7 million for the three months ended March 31, 2003.
This increase was primarily due to the increase in the amounts outstanding under
our credit facility.

     Net Income.  Net income for the three months ended March 31, 2004 was $5.0
million, a decrease of $0.9 million, or approximately 15%, from the $5.9 million
reported for the three months ended March 31, 2003.

LIQUIDITY AND CAPITAL RESOURCES

     Our primary uses for cash are working capital, capital expenditures,
acquisitions and principal and interest payments on indebtedness. To the extent
our cash requirements for working capital, capital expenditures, acquisitions
and principal and interest payments on indebtedness exceed our cash flow from
operations, we must fund our cash requirements primarily through debt and equity
financing activities.

  CASH FLOW

     Working capital was $126.2 million as of March 31, 2004 and $114.6 million
as of December 31, 2003. Net cash provided by operating activities was $10.1
million for the three months ended March 31, 2004 and $7.2 million for the three
months ended March 31, 2003. The increase in working capital was due to
increases in activity levels and the reclassification of our maintenance and
safety related products and services segment to assets and liabilities held for
sale. The increase in cash flow from operating activities was principally
attributable to higher operating levels across all business segments.

     Net cash used in investing activities was $9.1 million for the three months
ended March 31, 2004 and $9.1 million for the three months ended March 31, 2003.
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 $3.7 million for the three
months ended March 31, 2004 and $3.2 million for the three months ended March
31, 2003. Changes in net cash provided by financing activities were primarily
the result of borrowings and repayments under our credit facility.

     For the three months ended March 31, 2004, we made capital expenditures,
primarily for rental tool inventory, LWD and MWD tools, wireline equipment and
coil tubing units, of $14.6 million, including expenditures for the replacement
of equipment lost-in-hole. In addition, we incurred $3.0 million in research and
development expenses for the three months ended March 31, 2004.

  CAPITAL RESOURCES

     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. We have not entered into any derivative or other financial
instruments for trading or speculative purposes.

     In the first quarter of 2003, we obtained an additional revolving loan
commitment of $10.0 million and a supplemental Term B loan of $5.0 million under
our credit facility. During the third quarter of 2003, we amended our credit
facility to, among other things, include a $70.0 million Term C loan facility.
As so amended, our credit facility includes the following features:

     - a $40.0 million Term A loan facility, of which $17.0 million was
       outstanding as of March 31, 2004, that amortizes over five years, matures
       on October 16, 2005 and requires that we make annual principal repayments
       ranging from zero in the first year to $12.3 million in the fifth year;

     - an $85.0 million Term B loan facility, of which $82.3 million was
       outstanding as of March 31, 2004, that amortizes over six and one-half
       years, matures on April 16, 2007 and requires that we make annual
       principal repayments of $0.85 million in each of the first six years with
       the outstanding balance due on the maturity date;

                                        13
<PAGE>

     - a $70.0 million Term C loan facility, of which $69.5 million was
       outstanding as of March 31, 2004, that amortizes over three and one-half
       years, matures on April 16, 2007 and requires that we make annual
       principal repayments of $0.7 million in each of the first three years
       with the outstanding balance due on the maturity date; and

     - a $55.0 million revolving credit facility, of which $12.5 million was
       outstanding as of March 31, 2004, that may be borrowed, repaid and
       reborrowed from time to time and matures on October 16, 2005. Our credit
       facility provides that we may request the issuance of letters of credit.
       Outstanding letters of credit reduce the available amount that we may
       borrow under our revolving credit facility. As of March 31, 2004,
       approximately $4.7 million in letters of credit had been issued under our
       credit facility to guarantee payment of claims for commercial insurance
       purposes. These letters of credit are issued for a period of one year,
       with automatic one year extensions. Partial drawings against each letter
       of credit are permitted.

     At our option, amounts borrowed under the credit facility bear interest at
either a variable rate equal to the reserve-adjusted LIBOR or an alternate base
rate, plus, in each case, an applicable margin. The applicable margin (1) ranges
from 1.75% to 3.00% in the case of a LIBOR based loan under the revolving loan
facility or the Term A loan facility, (2) is equal to 3.25% in the case of a
LIBOR based loan under the Term B loan facility and (3) is equal to 3.00% in the
case of a LIBOR based loan under the Term C loan facility. For alternate base
rate loans, the applicable margin (1) ranges from 0.75% to 2.00% under the
revolving loan facility and the Term A loan facility, (2) is equal to 2.25%
under the Term B loan facility and (3) is equal to 2.00% under the Term C loan
facility. The foregoing margins are subject to adjustment based on a debt
service coverage ratio and a leverage ratio.

     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 material
domestic subsidiaries and a pledge of not greater than 65% of the capital stock
of each of our foreign subsidiaries. In addition, our credit facility is
guaranteed by all of our material domestic subsidiaries. The credit facility
requires, among other things, that we maintain certain financial ratios and
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 and our
ability to pay dividends. As of March 31, 2004, we were in compliance with these
restrictive covenants. As of March 31, 2004 and December 31, 2003, respectively,
we had outstanding borrowings under our credit facility of $181.3 million and
$173.2 million, respectively, of which $12.5 million and $4.0 million,
respectively, were outstanding under the revolving credit facility.

     In connection with the CTS acquisition in May 2001, we issued $4.5 million
in 9% convertible subordinated notes to eight individuals as partial
consideration for the acquisition of CTS. The notes were paid in full in January
2004.

  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 currently estimate that we will make capital expenditures of
approximately $50 to $55 million in 2004 and will make research and development
expenditures of approximately $12 to $14 million in 2004.

     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 expenditure requirements, 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.

                                        14
<PAGE>

     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. On April 20, 2004, we
received $28.0 million in cash in connection with the sale of Well Safe, Inc. We
expect to use these sale proceeds for capital expenditures, research and
development and acquisitions. We may also use these proceeds to reduce our
outstanding indebtedness.

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. We have not entered into
derivative or other financial instruments for trading or speculative purposes.
Our market risk could arise from changes in interest rates and foreign currency
exchange rates.

     Interest Rate Risk.  We are subject to market risk exposure related to
changes in interest rates. Assuming our current level of borrowings, a 100 basis
point increase in interest rates under these borrowings would have increased our
interest expense by approximately $0.5 million for the three months ended March
31, 2004 and $0.4 million for the three months ended March 31, 2003.

     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

     (a) Disclosure Controls and Procedures.  We maintain controls and
procedures designed to ensure that we are able to collect the information we are
required to disclose in the reports we file with the SEC, and to process,
summarize and disclose this information within the time periods specified in the
rules 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.

     (b) Internal Control over Financial Reporting.  During the period covered
by this report, there have been 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.

                                        15
<PAGE>

                                    PART II

                               OTHER INFORMATION

ITEM 1.  LEGAL PROCEEDINGS

     One of our subsidiaries, Charles Holston, Inc., has been named as a
defendant in a case styled Bryson Adams, et al v. Environmental Purification
Advancement Corporation, No. 99-1998, which was filed in Federal District Court
for the Middle District of Louisiana. This lawsuit involves several hundred
plaintiffs alleging personal injury and property damage associated with oilfield
waste disposal practices over a 30-year period at a waste disposal facility
located near Bayou Sorrel, west of Plaquemine Louisiana. The plaintiffs in these
cases are seeking unspecified amounts of general, special and exemplary damages.
A joint settlement agreement among the defendants in the case was approved by
the plaintiffs and is pending final court approval, pursuant to which Charles
Holston, Inc. would be dismissed from the case.

ITEM 6.  EXHIBITS AND REPORTS ON FORM 8-K

     a. 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.

     b. Reports on Form 8-K

     On January 29, 2004, the Company filed a Current Report on Form 8-K
pursuant to which the Company furnished its earnings information for the quarter
and year ended December 31, 2003.

                                        16
<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.

                                          W-H ENERGY SERVICES, INC.

Date: May 7, 2004                         By:     /s/ JEFFREY L. TEPERA
                                            ------------------------------------
                                                     Jeffrey L. Tepera
                                             Vice President and Chief Financial
                                                           Officer
                                               (Principal Financial Officer)

Date: May 7, 2004                         By:   /s/ ERNESTO BAUTISTA, III
                                            ------------------------------------
                                                   Ernesto Bautista, III
                                                Vice President and Corporate
                                                          Controller
                                               (Principal Accounting Officer)

                                        17
<PAGE>

                                 EXHIBIT INDEX

<Table>
<Caption>
NUMBER                                      EXHIBIT TITLE
------                                      -------------
<C>            <S>   <C>
    10.3       --    Employment Agreement of William J. Thomas, effective January
                     1, 2004
    10.11      --    Employment Agreement of Stuart J. Ford, effective January 1,
                     2004
    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>