##### Table of Contents



UNITED STATES SECURITIES AND
    EXCHANGE COMMISSION
 Washington, D.C.
    20549
  FORM 10-Q
  (Mark One)þ

QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
    SECURITIES EXCHANGE ACT OF 1934For the quarterly period ended
    June 30, 2007oro

TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
    SECURITIES EXCHANGE ACT OF 1934For the transition period
    from          to   Commission file
    number: 001-31346
  W-H
    Energy Services, Inc.
 (Exact name of registrant as
    specified in its charter)
  Texas

76-0281502(State or other jurisdiction
    of
    incorporation or organization)

(IRS Employer
    Identification No.)   2000 West Sam Houston Parkway South,
    Suite 500
    Houston, Texas 77042 (Address of principal
    executive offices and zip code)
  (713) 974-9071
 (Registrants telephone
    number, including area code)
  þ o
  Rule 12b-2
  Large
    accelerated filer þ
    Accelerated
    filer o
    Non-accelerated
    filer o  Rule 12b-2 o þ




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##### 



W-H
    ENERGY SERVICES, INC.
  INDEX
  PagePART I
    FINANCIAL INFORMATIONItem 1.

Financial
    Statements


1Consolidated
    Balance Sheets (unaudited)  June 30, 2007 and
    December 31, 2006
    (as adjusted)


1Consolidated
    Statements of Operations and Comprehensive Income
    (unaudited)  Three months and six months ended
    June 30, 2007 and 2006 (as adjusted)


2Consolidated
    Statements of Cash Flows (unaudited)  Six months
    ended June 30, 2007 and 2006 (as adjusted)


3Notes to
    Consolidated Financial Statements (unaudited)


4Item 2.

Managements
    Discussion and Analysis of Financial Condition and Results of
    Operations


11Item 3.

Quantitative and
    Qualitative Disclosures About Market Risk


17Item 4.

Controls and
    Procedures


18PART II
    OTHER INFORMATIONItem 4.

Submission of
    Matters to a Vote of Security Holders


19Item 6.

Exhibits


19Signatures


20Certification of CEO Pursuant to Section 302Certification of CFO Pursuant to Section 302Certification of CEO Pursuant to Section 1350Certification of CFO Pursuant to Section 1350   i




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##### Table of Contents



PART I



FINANCIAL
    INFORMATION  Item 1.
    Financial
    Statements  W-H
    ENERGY SERVICES, INC.
 CONSOLIDATED
    BALANCE SHEETS
    (In thousands, except per share amounts)
    (Unaudited)  June 30,


December 31,2007


2006(as adjusted)Current Assets:Cash and cash equivalents

$
21,343


$
36,329Accounts receivable, net of
    allowance of $6,178 and $5,596, respectively


238,709



204,755Inventories


93,552



78,127Deferred income taxes


9,860



7,870Prepaid expenses and other


22,259



14,906Total current assets


385,723



341,987Property and equipment, net


396,643



343,496Goodwill, net


134,755



119,550Other assets, net


20,752



19,248Total assets

$
937,873


$
824,281Current Liabilities:Accrued liabilities

$
64,174


$
64,757Accounts payable


52,303



56,668Total current liabilities


116,477



121,425Long-term debt


170,075



150,000Deferred income taxes


52,732



56,637Other long-term obligations


16,883



993Commitments and ContingenciesShareholders Equity:Preferred stock, $0.01 par
    value, 10,000 shares authorized, none issued and outstanding






Common stock, $0.0001 par
    value, 100,000 shares authorized 30,605 and
    30,158 shares issued and outstanding, respectively


3



3Additional paid-in capital


287,037



272,010Other comprehensive income


10,369



9,759Retained earnings


284,297



213,454Total shareholders equity


581,706



495,226Total liabilities and
    shareholders equity

$
937,873


$
824,281    1




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##### Table of Contents



W-H
    ENERGY SERVICES, INC.
 CONSOLIDATED
    STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME
    (In thousands, except per share amounts)
    (Unaudited)  For the Three Months


For the Six MonthsEnded June 30,


Ended June 30,2007


2006


2007


2006(as adjusted)





(as adjusted)Revenues

$
277,752


$
215,755


$
550,639


$
417,564Costs and expenses:Cost of revenues


145,386



112,327



292,805



220,542Selling, general and administrative


44,964



37,541



88,244



72,021Research and development


5,485



4,001



10,201



7,845Depreciation and amortization


19,162



15,256



36,714



30,300Total costs and expenses


214,997



169,125



427,964



330,708Operating income


62,755



46,630



122,675



86,856Other (income) expense:Interest expense, net


1,896



2,195



3,889



4,370Other (income) expense, net


(70
)


76



(41
)


95Income before income taxes


60,929



44,359



118,827



82,391Provision for income taxes


21,855



15,893



43,929



30,598Net income

$
39,074


$
28,466


$
74,898


$
51,793Comprehensive income:Net income

$
39,074


$
28,466


$
74,898


$
51,793Increase in interest rate swap
    valuations


989



914



416



2,311Foreign currency translation
    adjustment


16



1,586



194



1,102Comprehensive income

$
40,079


$
30,966


$
75,508


$
55,206Earnings per share:Basic

$
1.29


$
0.96


$
2.48


$
1.76Diluted

$
1.25


$
0.93


$
2.42


$
1.71Number of shares used in
    calculation of earnings per share:Basic


30,315



29,586



30,196



29,360Diluted


31,140



30,550



31,008



30,369    2




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W-H
    ENERGY SERVICES, INC.
 CONSOLIDATED
    STATEMENTS OF CASH FLOWS
    (In thousands)
    (Unaudited)  For the Six MonthsEnded June 30,2007


2006(as adjusted)Cash Flows from Operating
    Activities:Net income

$
74,898


$
51,793Adjustments to reconcile net
    income to cash provided by operating activities Depreciation and amortization


36,714



30,300Provision for doubtful accounts


813



1,718Gain on sales of equipment


(10,689
)


(10,654
)Deferred tax provision


(2,365
)


(1,473
)Share-based compensation


2,888



2,424Amortization of deferred financing
    costs


287



232Excess tax benefit from
    share-based compensation


(3,434
)


(10,809
)Changes in operating assets and
    liabilities, excluding effects of acquisitions Accounts receivable, net


(29,875
)


(32,728
)Inventories


(15,112
)


(15,539
)Prepaid expenses and other


(6,917
)


2,233Other assets, net


976



(255
)Accounts payable, accrued
    liabilities and other


(2,920
)


27,094Net cash provided by operating
    activities


45,264



44,336Cash Flows from Investing
    Activities:Additions to property and equipment


(97,776
)


(63,520
)Acquisition of businesses, net of
    cash acquired


(12,583
)


Proceeds from sales of equipment


21,137



14,997Net cash used in investing
    activities


(89,222
)


(48,523
)Cash Flows from Financing
    Activities:Proceeds from the issuance of debt


76,931



21,732Payments on debt


(56,856
)


(36,732
)Proceeds from the exercise of
    stock options


5,205



15,199Excess tax benefit from
    share-based compensation


3,434



10,809Net cash provided by financing
    activities


28,714



11,008Effect of exchange rate changes on
    cash


258



1,068Net increase (decrease) in cash
    and cash equivalents


(14,986
)


7,889Cash and cash equivalents,
    beginning of period


36,329



9,914Cash and cash equivalents, end of
    period

$
21,343


$
17,803    3




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##### Table of Contents



W-H
    ENERGY SERVICES, INC.
  NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
 (Unaudited)
  1.
    Business
    Organization  Description
    of Company
    Basis
    of Presentation
  Form 10-Q Regulation S-X. Form 10-K
  Reclassifications
    Accounting
    Policies and Procedures
  Accounting for Uncertainty in Income Taxes Accounting for Income
    Taxes
  FIN 48-1,
  accrue-in-advance
 4




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##### Table of Contents



Form 10-K
  Fair Value Measurements
  The
    Fair Value Option for Financial Assets and Financial Liabilities
    (as amended)
  2.
    Acquisitions    3.
    Earnings
    per Share      Three Months Ended


Six Months EndedJune 30,


June 30,2007


2006


2007


2006Basic weighted average shares
    outstanding


30,315



29,586



30,196



29,360Dilutive effect of stock options
    and restricted shares


825



964



812



1,009Diluted weighted average shares
    outstanding


31,140



30,550



31,008



30,369  5




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##### Table of Contents



4.
    Inventories    June 30, 2007


December 31, 2006Finished goods

$
72,356


$
66,069Work-in-process


9,699



7,626Raw materials and supplies


23,689



16,594Inventory reserve


(12,192
)


(12,162
)Inventories

$
93,552


$
78,127   5.
    Credit
    Facility  W-H W-H
  W-Hs W-Hs W-Hs
  W-H W-H W-H
  W-Hs W-Hs W-Hs W-Hs W-H W-H W-H W-H W-H W-H
  6.
    Litigation  W-H W-H W-Hs
  7.
    Income
    Taxes  W-H W-Hs
 6




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##### Table of Contents



W-H W-H W-H W-H W-Hs W-Hs W-Hs W-H
  W-H W-Hs W-H W-H
  8.
    Shareholders
    Equity  Stock
    options
  W-Hs
  Weighted AverageNumber of


Weighted Average


Remaining


AggregateOptions


Price per Share


Contractual Term


Intrinsic Value(Years)


(Amounts in thousands)Outstanding at December 31,
    2006


1,951,904


$
16.94Granted






Exercised


(272,308
)


17.97






$
10,670Expired/canceled


(11,113
)


15.60Outstanding at June 30, 2007


1,668,483



16.81



5.3



28,047Exercisable at June 30, 2007


1,206,983



15.12



4.4



18,249   Restricted
    Stock
  W-H W-Hs
   7




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##### Table of Contents



WeightedAverageNumber of


Fair ValueShares


Per ShareNonvested balance at
    December 31, 2006


142,000


$
49.51Granted


67,000



47.91Vested


(54,250
)


38.47Forfeited






Nonvested balance at June 30,
    2007


154,750



52.69   9.
    Operating
    Segments  Form 10-K
  Drilling
    Related Products and Services
    Completion
    and Workover Related Products and Services
    Summary
    Information
      Drilling


Completion


Corporate


TotalRevenues

$
179,141


$
98,611


$



$
277,752Operating income


41,307



26,032



(4,584
)


62,755Depreciation and amortization


11,600



7,493



69



19,162Total assets


578,163



320,623



39,087



937,873Capital expenditures


28,681



21,428



426



50,535  8




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##### Table of Contents



Drilling


Completion


Corporate


TotalRevenues

$
134,607


$
81,148


$



$
215,755Operating income


26,638



24,639



(4,647
)


46,630Depreciation and amortization


9,300



5,899



57



15,256Total assets


422,812



256,194



30,122



709,128Capital expenditures


21,610



9,408



17



31,035     Drilling


Completion


Corporate


TotalRevenues

$
358,402


$
192,237


$



$
550,639Operating income


80,289



51,884



(9,498
)


122,675Depreciation and amortization


22,173



14,426



115



36,714Total assets


578,163



320,623



39,087



937,873Capital expenditures


54,593



42,530



653



97,776     Drilling


Completion


Corporate


TotalRevenues

$
263,657


$
153,907


$



$
417,564Operating income


51,435



43,990



(8,569
)


86,856Depreciation and amortization


18,743



11,420



137



30,300Total assets


422,812



256,194



30,122



709,128Capital expenditures


38,279



25,200



41



63,520    W-H
  Revenues
  For the Three Months


For the Six MonthsEnded June 30,


Ended June 30,2007


2006


2007


2006United States

$
249,898


$
194,070


$
487,185


$
375,653North Sea


12,923



11,317



28,723



18,624Other


14,931



10,368



34,731



23,287Total

$
277,752


$
215,755


$
550,639


$
417,564  9




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##### Table of Contents



Operating
    Income
  For the Three Months


For the Six MonthsEnded June 30,


Ended June 30,2007


2006


2007


2006(as adjusted)





(as adjusted)United States

$
57,304


$
44,482


$
111,035


$
81,788North Sea


2,864



1,797



4,616



2,329Other


2,587



351



7,024



2,739Total

$
62,755


$
46,630


$
122,675


$
86,856   Property
    and equipment, net
  June 30,


December 31,2007


2006United States

$
357,210


$
306,357North Sea


12,230



13,986Other


27,203



23,153Total

$
396,643


$
343,496  10




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##### Table of Contents



Item 2.
    Managements
    Discussion and Analysis of Financial Condition and Results of
    Operations  Forward-Looking
    Statements
  Form 10-K
  Overview
    of Our Products and Services
         11




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Drilling
    Related Products and Services
        ® 3-Dimensional 1 4 ® 1 2 ® ® 3-Dimensional
  tm tm 3 4 1 2 tm 3 4 tm tm tm tm tm tm tm 3 4
  Completion
    and Workover Related Products and Services
     12




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##### Table of Contents



Geographic
    Expansion
    Results
    of Operations
  Form 10-Q.
  Three
    Months Ended June 30, 2007 Compared to the Three Months
    Ended June 30, 2006
  Revenues.
    
    an 8% higher average number of rotary rigs operating in the
    United States resulting in an increase in demand for our
    directional drilling services and technologically advanced
    services and tools, rental tools and drilling fluids products;
    an increase in our Gulf of Mexico market share, resulting from
    higher utilization of our existing logging-while-drilling tools
    and commercialization of certain of our new technologies
    discussed earlier;
    our larger asset base resulting from our capital expenditure
    investments;
    increased international activity in the Middle East, North
    Africa and the North Sea; and
    onshore geographic expansion supported by an increasing
    non-vertical rig count.    
    higher demand for our coiled tubing and cased-hole wireline
    services as a result of an overall increase in activity levels;
    an increase in our coiled tubing and cased-hole wireline fleets
    and other capital expenditure investments; and
    onshore geographic expansion.  Cost of Revenues.
  Selling, General and Administrative
    Expenses.
 13




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##### Table of Contents



Research and Development Expenses. ® 3-Dimensional
  Depreciation and Amortization.
  Interest and Other Expense.
  Provision for Income Taxes.
  Six
    Months Ended June 30, 2007 Compared to the Six Months Ended
    June 30, 2006
  Revenues.
    
    an 11% higher average number of rotary rigs operating in the
    United States, resulting in an increase in demand for our
    directional drilling services and technologically advanced
    services and tools, rental tools and drilling fluids products;
    an increase in our Gulf of Mexico market share, resulting from
    higher utilization of our existing logging-while-drilling tools
    and commercialization of certain of our new technologies
    discussed earlier;
    our larger asset base resulting from our capital expenditure
    investments;
    increased international activity in North Africa, the North Sea
    and the Middle East;
    onshore geographic expansion supported by an increasing
    non-vertical rig count; and
    improved pricing.    
    higher demand for our coiled tubing and cased-hole wireline
    services as a result of an overall increase in activity levels;
    an increase in our coiled tubing and cased-hole wireline fleets
    and other capital expenditure investments;
    onshore geographic expansion;
    increased activity offshore; and
    improved pricing. 14




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##### Table of Contents



Cost of Revenues.
  Selling, General and Administrative
    Expenses.
  Research and Development Expenses. ® 3-Dimensional
  Depreciation and Amortization.
  Interest and Other Expense.
  Provision for Income Taxes.
  Recent
    Accounting Pronouncements
  Accounting for Uncertainty in Income Taxes Accounting for Income
    Taxes
  FIN 48-1,
  accrue-in-advance
 15




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##### Table of Contents



Fair Value Measurements
  The
    Fair Value Option for Financial Assets and Financial Liabilities
    (as amended)
  Liquidity
    and Capital Resources
    Cash
    flow
         16




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##### Table of Contents



Capital
    resources
  Credit
    Agreement
    Future
    capital requirements
        Off
    balance sheet arrangements
    Item 3.
    Quantitative
    and Qualitative Disclosures about Market Risk    Interest Rate Risk.
 17




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##### Table of Contents



Foreign Currency Exchange Risk.
  Stock Price Volatility.
  Item 4.
    Controls
    and Procedures  Disclosure Controls and Procedures.
  Internal Control over Financial
    Reporting.
  and/or
 18




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##### Table of Contents



PART II  OTHER INFORMATION
  Item 4.
    Submission
    of Matters to a Vote of Security Holders      For


WithheldKenneth T. White, Jr.


25,903,943



1,073,095John R. Brock


25,471,542



1,505,496James D. Lightner


25,471,542



1,505,496Christopher Mills


23,902,027



3,075,011Milton L. Scott


24,449,940



2,527,098Robert H. Whilden, Jr.


25,905,243



1,071,795   Item 6.
    Exhibits    Form 10-Q,
 19




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##### Table of Contents



SIGNATURES    W-H Energy Services, Inc.
  Date: August 7, 2007

By: /s/  Kenneth
    T. White,
    Jr.Kenneth
    T. White, Jr.Chairman of the Board, President and Chief
    Executive Officer (Principal Executive Officer)Date: August 7, 2007

By: /s/  Ernesto
    Bautista,
    IIIErnesto
    Bautista, IIIVice President and Chief Financial Officer
    (Principal Financial and Accounting Officer)  20




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##### Table of Contents



EXHIBIT INDEX
  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*     *
    
    Filed herewith