10-K

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

Form 10-K

ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT of 1934
For the fiscal year ended December 31, 2007

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)	(I.R.S. Employer Identification No.)

2000 West Sam Houston Parkway South, Suite 500
Houston, Texas 77042
(713) 974-9071
(Address, including zip code, and telephone number,

including area code, of registrant’s principal executive offices)

Securities registered pursuant to Section 12(b) of the Act:

Title of Each Class	Name of Each Exchange on which Registered
Common Stock, par value $0.0001 per share	New York Stock Exchange
Rights to Purchase Series A Junior Participating	New York Stock Exchange
Preferred Stock, par value $0.01 per share

Securities registered pursuant to Section 12(g) of the Act: None

Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act.  Yes þ     No o

Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Exchange Act.  Yes o     No þ

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Exchange Act during the preceding 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 þ     No o

Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is not contained herein, and will not be contained, to the best of registrant’s knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K.  þ

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act. (Check one):

Large accelerated filer þ	Accelerated filer o	Non-accelerated filer o	Smaller reporting Company o
	(Do not check if a smaller reporting company)

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).  Yes o     No þ

As of June 30, 2007, approximately 30,605,196 shares of common stock, par value $0.0001 per share, of the registrant were outstanding, and the aggregate market value of the outstanding shares of common stock of the registrant held by non-affiliates (based on the closing price of such shares on the New York Stock Exchange on such date) was approximately $1.9 billion. The determination of stock ownership by non-affiliates was made solely for the purpose of providing the foregoing market capitalization information, and the registrant is not bound by such determination for any other purpose.

As of February 15, 2008, approximately 30,852,141 shares of common stock, par value $0.0001 per share, of the registrant were outstanding and the aggregate market value of the outstanding shares of common stock of the registrant held by non-affiliates (based on the closing price of such shares on the New York Stock Exchange on such date) was approximately $1.8 billion. The determination of stock ownership by non-affiliates was made solely for the purpose of providing the foregoing market capitalization information, and the registrant is not bound by such determination for any other purpose.

DOCUMENTS INCORPORATED BY REFERENCE

Portions of the registrant’s Proxy Statement for its 2008 Annual Meeting of Shareholders, which the Registrant intends to file within 120 days of December 31, 2007, are incorporated by reference into Part III of this Form 10-K.

W-H ENERGY SERVICES, INC.

ANNUAL REPORT ON FORM 10-K
For the Fiscal Year Ended December 31, 2007

TABLE OF CONTENTS

			Page
PART I
	Item 1.	Business		1
	Item 1A.	Risk Factors		9
	Item 1B.	Unresolved Staff Comments		16
	Item 2.	Properties		16
	Item 3.	Legal Proceedings		16
	Item 4.	Submission of Matters to a Vote of Security Holders		16
PART II
	Item 5.	Market for Registrant’s Common Equity and Related Stockholder Matters and Issuer Purchases of Equity Securities		17
	Item 6.	Selected Financial Data		19
	Item 7.	Management’s Discussion and Analysis of Financial Condition and Results of Operations		20
	Item 7A.	Quantitative and Qualitative Disclosures about Market Risk		30
	Item 8.	Financial Statements and Supplementary Data		30
	Item 9.	Changes in and Disagreements with Accountants on Accounting and Financial Disclosure		30
	Item 9A.	Controls and Procedures		30
	Item 9B.	Other Information		31
PART III
	Item 10.	Directors, Executive Officers and Corporate Governance		31
	Item 11.	Executive Compensation		31
	Item 12.	Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters		31
	Item 13.	Certain Relationships and Related Transactions, and Director Independence		31
	Item 14.	Principal Accounting Fees and Services		31
PART IV
	Item 15.	Exhibits and Financial Statement Schedules		32
Signatures				33
Index to Consolidated Financial Statements				F-1
Amended and Restated Employment Agreement - Kenneth T. White, Jr.
Amended and Restated Employment Agreement - Jeffrey L. Tepera
Amended and Restated Employment Agreement - William J. Thomas III
Third Amendment to Credit Facility
Amended and Restated Employment Agreement - Glen J. Ritter
Amended and Restated Employment Agreement - Ernesto Bautista, III
Amended and Restated Employment Agreement - Stuart J. Ford
List of Significant Subsidiaries
Consent of Grant Thornton LLP
Certification of CEO Pursuant to Section 302
Certification of CFO Pursuant to Section 302
Certification of CEO Pursuant to Section 1350
Certification of CFO Pursuant to Section 1350

PART I

Item 1.   Business.

Overview

We are a diversified oilfield service company that provides products and services used in connection with the drilling and completion of oil and natural gas wells and the production of oil and natural gas. We have operations in North America and select areas internationally. Since our formation in 1989, we have entered the following lines of business through acquisitions, and we have expanded our product and service offerings through a combination of acquisitions, internal growth and research and development:

•  drilling related products and services, which include logging-while-drilling, measurement-while-drilling, directional drilling, down-hole drilling motors, drilling fluids and rental tools; and

•  completion and workover related products and services, which include cased-hole wireline logging, perforating, tubing conveyed perforating and associated rental equipment, coiled tubing, completion fluids and rental tools.

We focus on products and services that provide our customers with alternatives to the services typically marketed by the major integrated oilfield service companies. We believe our business approach enables us to compete successfully against these larger oilfield service companies by:

•  operating our business lines autonomously and marketing our product offerings independently;

•  focusing on niche markets in which leading market positions can be achieved;

•  emphasizing customer service, responsiveness and reliability; and

•  offering technologically advanced and cost effective products and services.

Our customers include major and independent oil and natural gas companies, drilling contractors and other oilfield service companies.

In this report, unless otherwise specified, “W-H” and “we,” “our,” “us” and “our company” refer to W-H Energy Services, Inc., a Texas corporation, and/or one or more of its subsidiaries. General information about our company can be found on our website (www.whes.com). Our annual reports on Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K and other reports and forms that we file with the U.S. Securities and Exchange Commission, or SEC, or that are filed with the SEC in respect of our company, such as Forms 3, 4 and 5, as well as any amendments and exhibits to the foregoing reports and forms, are available free of charge through our website as soon as reasonably practicable after we file them with, or furnish them to, the SEC.

Information regarding our corporate governance policies and guidelines, including our Corporate Governance Guidelines, Corporate Code of Business Conduct and Ethics, Financial Code of Ethics for Senior Officers, as well as the charters for the Audit, Compensation and Corporate Governance and Nominating Committees of our Board of Directors are also available on our internet website or in print to any shareholder who requests them.

Following is a discussion of our business lines, our strategy, our research and development initiatives and risks related to our business.

Businesses

Drilling Related Products and Services

Our drilling related products and services segment provides a broad range of 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. Our drilling related products and services are used primarily onshore and offshore in the United States and select areas internationally. We are currently conducting international operations onshore in Canada, Brazil,

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Europe, North Africa and the Middle East and offshore in the North Sea, the Gulf of Suez, the Mediterranean Sea and off the coast of Brazil. Our drilling related products and services segment includes the following business lines:

•  logging-while-drilling, measurement-while-drilling, directional drilling and down-hole drilling motors;

•  drilling fluids; and

•  rental tools.

Logging-while-drilling, Measurement-while-drilling, Directional Drilling and Down-hole Drilling Motors.  We are one of a few companies worldwide that currently has the technological capability to offer a full complement of logging-while-drilling products and services. Logging-while-drilling tools provide real-time data about the physical properties of downhole formations. In addition to indicating the possible presence of hydrocarbons, this data also assists in improving drilling performance.

Before the introduction of logging-while-drilling technology, well formation data was typically obtained by lowering evaluation, or logging, tools into the well with armored electro-mechanical cable, or wireline, from a truck on land or a skid unit offshore by an open-hole wireline operator. Traditional open-hole wireline information can only be obtained after the well has been drilled or during the drilling process if drilling is halted and the drill string is removed from the well. An advantage that logging-while-drilling has over traditional open-hole wireline logging is that costs are reduced because the logging-while-drilling tools accompany the drill string and downhole data is provided during drilling operations. Drilling rig downtime is thereby minimized and the resulting rig cost savings to our customers can be substantial. In addition, the real-time information transmitted during the drilling process can assist in making drilling decisions such as altering the path of the well bore to a point in the formation which, when compared with previously obtained seismic data, provides for enhanced recovery of oil and natural gas.

We also offer measurement-while-drilling products and services, which use down-hole tools to help locate and direct the drill bit to the intended target. This capability is particularly advantageous when drilling directional (non-vertical) wells, which represent an increasing percentage of overall drilling activity. In order to drill a directional well, the driller must be able to determine the precise direction the drill bit is moving during the drilling operation. Measurement-while-drilling tools assist the driller in making this determination by transmitting data to the surface enabling the driller to adjust the drilling path as necessary during the drilling process.

Additionally we provide directional drilling services, which involve skilled personnel directing the well-bore along a predetermined path to optimally recover oil and natural gas from a reservoir. These services are used to more accurately drill vertical wells and to drill deviated or directional wells (which deviate from vertical by a planned angle and direction), horizontal wells (which are sections of wells drilled perpendicular or nearly perpendicular to vertical) and extended reach wells (which are deviated over extended distances).

Our logging-while-drilling, measurement-while-drilling and directional drilling services are provided by our wholly-owned subsidiary, PathFinder Energy Services, Inc. (“PathFinder”). We market these services through an internal sales force. Our customers typically utilize these services on a per well or per project basis. We generally charge our customers for these services on a per day basis.

We are also a supplier of down-hole drilling motors and a manufacturer of certain of their components and replacement parts. We provide down-hole drilling motors internally to PathFinder’s directional drilling business and to other oilfield service companies. Our drilling motors business is conducted by PathFinder Drilling Motors, a division of PathFinder, and our wholly-owned subsidiary, Dyna-Drill Technologies, Inc. (“Dyna-Drill”).

PathFinder Drilling Motors’ rental product line consists of a wide range of sizes of down-hole drilling motors ranging from 111/16-inch to 111/2-inches in outside diameter for use at various drilling depths and down-hole environments. The components of the drill motor are designed to operate at various speeds and torque levels and to withstand severe environmental conditions such as high temperatures, hard rock and abrasive drilling fluids.

Power sections and bearing packs for Dyna-Drill^® down-hole drilling motors are manufactured by Dyna-Drill. In addition to complementing our PathFinder Drilling Motors line of down-hole drilling motors, our manufacturing capability enables us to support our own motor lines and to provide manufacturing and repair services for other

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oilfield service companies. Dyna-Drill is one of only a limited number of companies worldwide that manufactures the power sections and bearing packs for down-hole drilling motors.

We typically charge our customers for the use of our rental fleet of drilling motors on the basis of hours of usage. We charge our customers for our manufactured motor components and repair services when products are shipped and services are completed. We market our down-hole drilling motors and services directly through our internal sales force.

Drilling Fluids.  Drilling fluid products are used to cool and lubricate the drill bit during drilling operations, to contain formation pressures and to suspend and remove rock cuttings from the borehole while maintaining the stability of the well-bore. We manufacture, package, transport, warehouse and wholesale drilling fluids and drilling fluid chemicals and additives. We also provide size reduction services of solids that are added to drilling fluids to control loss circulation and seepage. Our customers, which include retail drilling fluid companies, specialty fluid companies and other oilfield service companies, use our drilling fluid products throughout the world.

Our drilling fluid chemicals and additives are used in the production and maintenance of:

•  water-based drilling fluids, which are the most widely used drilling fluids, having application in both onshore and offshore environments;

•  oil-based drilling fluids, which are used primarily to drill water-sensitive shale and in situations where stuck pipe is more likely to occur; and

•  synthetic-based drilling fluids, which are used where oil-based fluids are prohibited for environmental reasons, or where high performance and safety are an issue.

We manufacture a large portion of our drilling fluid products which enables us to manage the cost and maintain the proprietary nature of these products. Our drilling fluids business is conducted through our wholly-owned subsidiaries, Agri-Empresa, Inc., Grinding and Sizing Company, Inc., Integrity Industries, Inc. and Mt. Pulaski, Inc. We market and sell these products through our internal sales force.

Rental Tools.  We provide a broad range of rental equipment and tools for the drilling of oil and natural gas wells. Our rental equipment allows our customers, primarily oil and natural gas companies, the ability to have access to inventories of tools and other equipment without the cost of maintaining or storing that equipment in their own inventory. Our rental tool inventory includes:

•  drilling equipment, such as large diameter drill pipe, heavy weight drill pipe, high torque drill pipe, drill collars and other required accessories;

•  pressure control equipment, such as blowout preventers, high pressure valves, choke and kill manifolds and test pumps;

•  down-hole tools, such as milling tools and casing scrapers;

•  pipe handling equipment; and

•  side entry subs and our patented lockdown lubricator system.

We have various sizes of drill pipe and related handling tools, providing our customers with a wide range of equipment for drilling at a variety of well depths and conditions. In response to the growth in directional drilling, we have expanded our inventory of premium, high torque drill pipe, which also provides operators with the technical characteristics demanded by deeper wells and wells expected to encounter adverse conditions. We also offer all corresponding handling and sub-surface tools and pressure control equipment that support high torque drill pipe.

Our drilling related rental tool business is conducted by our wholly-owned subsidiaries, Thomas Energy Services, Inc. (which conducts business as Thomas Tools), and Boyd’s Bit Service, Inc., which conducts business as Boyd’s Rental Tools (“Boyd’s”). These rental tools and related services are marketed through our internal sales force. The majority of our equipment and tools are rented to our customers on a per day basis.

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Completion and Workover Related Products and Services

Our completion and workover related products and services segment provides a broad range of products and services used by oil and natural gas companies and other oilfield service companies for the completion and workover of oil and natural gas wells. Our completion and workover related products and services are used primarily onshore and offshore in North America. These products and services include:

•  cased-hole wireline logging, perforating, tubing conveyed perforating and associated rental equipment and services;

•  coiled tubing;

•  completion fluids; and

•  rental tools.

Cased-hole wireline logging, perforating, tubing conveyed perforating and associated rental equipment and services.  Cased-holes are wells that have been drilled and in which casing has been installed to stabilize the hole. Cased-holes typically are either ready to produce or are already producing oil and natural gas. Our services include:

•  Logging Services.  Logging involves the gathering of down-hole information to identify various characteristics about the formation or the well bore. Logging services are performed by lowering armored electro-mechanical cable, or wireline, into a well from a truck on land or a skid unit offshore. These units contain instrumentation and computer equipment used to chart and record down-hole information.

•  Perforating Services.  Perforating involves creating a pathway for oil and natural gas to flow into a completed and cased well from a reservoir. Once a well has been drilled, cased and is ready for production, a perforating gun is introduced into the well using wireline and a shaped explosive charge is detonated in the zone from which production is desired. The resulting perforations in the casing allow oil and natural gas to flow into the casing where they are carried to the surface. Perforating is also used in wells that are already producing to improve the production rate of oil and natural gas. For example, perforating might be used to restore or improve production in a producing well that has become congested by sand or might be used to create production from a new zone once a deeper zone or formation has been depleted.

•  Tubing Conveyed Perforating.  Tubing conveyed perforating involves the use of drill pipe, tubing or coiled tubing, to convey the perforating assembly to the required depth.

•  Rental Equipment and Services.  Wireline rental equipment includes grease injector units, pipe recovery lubricators, air compressors, high pressure risers, wireline blow-out preventers and flanges.

We conduct our cased-hole wireline logging and perforating business through our wholly-owned subsidiaries, Enertech Wireline Services, L.P. and Perf-O-Log, Inc. Our wireline rental equipment is offered through Boyd’s. A wireline job typically involves the use by a skilled operator of a logging and perforating unit and specialized rental equipment at a customer’s well site. We market these services through an internal sales force and our customers typically utilize these services on a per well basis. We charge our customers on a per day or per job basis.

Coiled Tubing.  A typical coiled tubing job involves the use of a coiled tubing unit and one or more pumping units which are operated by skilled personnel at a customer well site. We own and operate a fleet of coiled tubing units and associated equipment that are used in a variety of well-bore applications, including foam washing, acidizing, displacing, fishing, milling, drilling, cementing, gravel packing and jetting. In addition to these services, we use modeling software for coiled tubing applications to provide optimal job design and cost saving solutions for our customers.

Coiled tubing continues to be one of the fastest growing segments of the well service industry. For many applications, the economics of coiled tubing operations are often far superior to the use of conventional workover rigs. The growth in deep well and horizontal drilling has increased the market for coiled tubing. Logging, milling and down-hole tool manipulation in highly deviated and horizontal wells previously performed with other equipment can now be accomplished under pressure and more efficiently utilizing coiled tubing services.

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Our coiled tubing business is conducted by our wholly-owned subsidiary, Coil Tubing Services, L.L.C. We market these services through an internal sales force and our customers typically utilize these services on a per well basis. We charge our customers on a per day or per job basis.

Completion Fluids.  Completion fluids are generally solids-free solutions with high specific gravities that are designed not to damage the producing formation. Oil and natural gas operators use completion fluids in combination with specialty chemical products to control bottom-hole pressures during the completion and workover phase of a well. We manufacture, package, transport, warehouse and wholesale completion fluids and completion fluid chemicals and additives. We produce polymers and specialty chemicals for niche applications related to completion and workover activities. Our fluid products are sold to customers for use around the world.

Our three classes of completion and workover related fluid products are:

•  oilfield products, which include enhanced recovery chemicals, lubricants, well treating chemicals and liquefied polymers;

•  industrial products, which include cleaners, lubricants and environmentally sensitive solvents; and

•  environmental remediation products.

We conduct our completion and workover related fluids business through our wholly-owned subsidiaries, Agri-Empresa, Inc. and Integrity Industries, Inc. We market and sell our completion fluids through an internal sales force.

Rental Tools.  We provide rental of premium tubing work strings, high pressure blowout preventers, flow iron packages, high pressure manifolds, tanks and tubing handling tools for conventional well remediation, as well as specialized equipment for snubbing and coiled tubing applications.

Our completion and workover related rental tool business is conducted by our wholly-owned subsidiary, Thomas Energy Services, Inc., through its Thomas Tubing Specialists division. We market our rental tools through an internal sales force. Our customers typically utilize tools on a per well basis and we charge our customers for rental tools primarily on a per day rental basis.

For a summary of our reportable segments and operations by geographical region as of and for the years ended December 31, 2007, 2006 and 2005, see Note 13 to our Consolidated Financial Statements, which information is incorporated herein by reference.

Strategy

Our strategy is to grow revenues, cash flow and earnings by providing our customers with an alternative to the major integrated oilfield service companies while preserving our entrepreneurial culture. Our strategy consists of the following key components:

Provide Leading Technology Solutions to Our Customers.  We believe technology is an important aspect of our business. Improving technology helps us provide our customers with more efficient and cost effective tools to find and produce oil and natural gas. In fiscal year 2007, we spent approximately $21.4 million on research and development initiatives, and we plan to spend $26.0 million to $27.0 million on research and development in 2008. We are committed to investing substantial time and resources in building our technology-based products and services. We believe our new products and services are among the best in the industry and will provide us with the opportunity to grow our business and service the needs of our customers.

Maintain a Diverse Source of Revenues within the Oilfield Services Industry.  We believe that the value and stability of our company will be enhanced if we continue to broaden and diversify our revenue base, both operationally and geographically. We believe that the products and services provided by our completion and workover segment provide a measure of revenue stability during periods of low drilling activity when demand for our drilling related products and services is reduced. We have devoted substantial time and capital to accomplish this diversification of our business lines, both through organic growth and through acquisitions, and we expect to continue to do so in the future.

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Capitalize on the Growth of Select Emerging Markets.  We believe that the longer-term domestic outlook will continue to reflect upward pressure on oil and natural gas prices as supply struggles to keep up with demand. As a result, we expect the domestic search for energy, and especially natural gas, to continue, recognizing that there will be occasional interruptions. Our response to this expectation is to expand our geographic coverage in North America. For example, we have invested approximately $77.0 million to date in capital expenditures to construct and equip a facility in southwestern Wyoming to increase our presence in the Rocky Mountain region. We are also further expanding products and services used in the development of unconventional natural gas reservoirs such as coalbed methane, shale and tight gas.

Capitalize on Trends in More Mature Markets.  We believe that independent oil and natural gas companies are becoming more prominent players in exploration, development and production activity in the Gulf of Mexico, the North Sea and in the North American onshore market. We believe that we have good working relationships with many of these independent oil and natural gas companies, and we plan to capitalize on these relationships to increase the utilization of our tools and personnel in these regions.

Capitalize on the Growth of Directional Drilling.  A substantial portion of our drilling related products and services are designed for use in directional drilling. We believe that the long-term trends in directional drilling are positive. We provide directional drilling services in North America and in select areas internationally. We believe that providing directional drilling services will continue to increase the utilization of our measurement-while-drilling and logging-while-drilling tools, down-hole drilling motors and rental tools.

Expand the Breadth and Scope of Our International Operations.  Although our operations are focused primarily in the United States, we believe that the larger oil and natural gas projects will increasingly be located in other countries. We will continue to seek to capitalize on this trend by increasing our market share in existing international locations and by selectively establishing new locations where we believe the risks and other market factors are acceptable. Our international operations consist primarily of our measurement-while-drilling and logging-while-drilling services, directional drilling services and down-hole drilling motors.

Selectively Acquire Complementary Businesses and Technologies.  We expect to continue to pursue acquisitions of complementary businesses, which increase the technological base and expand the market reach of our product and service offerings. We intend to focus on acquisitions that expand our operations with new products and services, broaden our geographic scope, increase our market share and improve our ability to compete. Generally, we continue to market the products and services of these companies under their established names.

Research and Development

We engage in research and development activities in an effort to improve our existing product and service offerings and to satisfy customer demand for tools, products and services that will increase the efficiency of their operations. Our expenditures for research and development were $21.4 million, $17.2 million and $16.3 million for the years ended December 31, 2007, 2006 and 2005, respectively. While several of our subsidiaries conduct research and development at their facilities, our largest research and development effort is conducted by PathFinder through its research and development facility in Houston, Texas, where our logging-while-drilling, measurement-while-drilling and directional drilling technology is developed.

We own or have licenses to use various patents covering a variety of technologies embodied in our portfolio of products and services. Although in the aggregate these patents are of importance to us, we do not consider any single patent to be of a critical or essential nature. Some of our products and services enjoy brand name recognition. We own trademarks in respect of these brands. Some of these trademarks are registered or are pending registration.

While we are developing and deploying many of our own technologies, our logging-while-drilling business is still dependent upon technologies that we acquired when we acquired PathFinder. We have the right to use substantially all of these acquired technologies pursuant to worldwide, royalty-free, irrevocable license rights. We have the right to use a small number of these acquired technologies under licenses from other third party licensors. The terms of certain of these licenses may be subject to change if there is a change in control of our company.

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Potential Liabilities and Insurance

Our industry involves a high degree of operational risk. Failure of equipment could result in property damage, personal injury, loss of life, environmental pollution and other damages for which we could be liable. Litigation arising from a catastrophic occurrence at a location where our equipment or services are used may result in our being named as a defendant in lawsuits asserting potentially large claims.

We maintain insurance policies providing coverage for risks that we believe are consistent with industry standards and that meet the requirements of our customers. We have deductibles under these policies in amounts we believe to be customary and reasonable. Although we believe that we maintain insurance coverages that are adequate in amount and type for the risks associated with our businesses, there is always a risk that our insurance may not be sufficient to cover any particular loss. In addition, our insurance does not provide coverage for all liabilities. Insurance rates are subject to fluctuations. During the last five fiscal years our cost of insurance has increased substantially due principally to growth in our operations. Changes in coverage, insurance markets and our industry, and events affecting our company, may result in future increases in our insurance costs and in higher deductibles and retentions.

Government Regulation

Our business is significantly affected by foreign, federal, state and local laws and regulations relating to the oil and natural gas industry, worker safety and environmental protection. Changes in these laws, including more stringent administrative regulations and increased levels of enforcement of these laws and regulations, could affect our business. These regulatory systems are complex and in a constant state of change. We cannot predict the level of enforcement of existing laws and regulations or how these laws and regulations may be interpreted by enforcement agencies or court rulings or the effect changes in these laws and regulations may have on us or our businesses, our results of operations, our cash flows or our financial condition. We also are not able to predict whether additional laws and regulations will be adopted.

We depend on the demand for our products and services from oil and natural gas companies, drilling contractors and other oilfield service companies. This demand is affected by changing taxes, price controls and other laws and regulations relating to the oil and natural gas industry. The adoption of laws and regulations curtailing exploration and development drilling for oil and natural gas in our areas of operation for economic, environmental or other policy reasons could also adversely affect our operations by limiting demand for our products and services. We cannot determine the extent to which our future operations and earnings may be affected by new laws or legislation, new regulations or changes in existing laws, regulations or enforcement.

Some of our employees who perform services on offshore platforms and vessels are covered by the provisions of the Jones Act, the Death on the High Seas Act and general maritime law. These laws have the effect of making the liability limits established under state workers’ compensation laws inapplicable to these employees and, instead, permit them or their representatives to pursue actions against us for damages from job-related injuries, with generally no limitations on our potential liability.

Our operations are subject to numerous foreign, federal, state and local laws and regulations governing the manufacture, management and/or disposal of materials and wastes in the environment and otherwise relating to environmental protection. Numerous governmental agencies issue regulations to implement and enforce these laws. Compliance with these regulations is often difficult and costly. The violation of such laws may result in the revocation of permits, issuance of corrective action orders and assessment of administrative, civil and even criminal penalties. For example, state and federal agencies have issued regulations implementing environmental laws that regulate environmental and safety matters, such as restrictions on the types, quantities and concentration of various substances that can be released into the environment in connection with specialty chemical manufacturing or other field service operations, remedial measures to prevent pollution arising from current and former operations and requirements for worker safety training and equipment usage. While our management believes that we are in compliance in all material respects with applicable environmental laws and regulations, there can be no assurance that future compliance with environmental laws and regulations will not have a material effect on us.

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We generate wastes, including hazardous wastes, which are subject to the federal Resource Conservation and Recovery Act, or RCRA, and comparable state statutes. The U.S. Environmental Protection Agency and state agencies have limited the approved methods of disposal for some types of hazardous and non-hazardous wastes. Furthermore, it is possible that certain wastes handled by us in connection with our field service activities that currently are exempt from treatment as “hazardous wastes” may in the future be designated as “hazardous wastes” under RCRA or other applicable statutes and therefore be subject to more rigorous and costly operating and disposal requirements.

The federal Comprehensive Environmental Response, Compensation and Liability Act, or CERCLA, also known as the “Superfund” law and comparable state statutes impose liability, without regard to fault or legality of the original conduct, on classes of persons that are considered to have contributed to the release of a “hazardous substance” into the environment. These persons include the owner or operator of the disposal site or sites where the release occurred and companies that disposed of or arranged for the disposal of the hazardous substances at the site where the release occurred. Under CERCLA, these persons may be subject to strict joint and several liability for the costs of cleaning up the hazardous substances that have been released into the environment and for damages to natural resources, and it is not uncommon for neighboring landowners and other third parties to file claims for personal injury and property damage allegedly caused by the hazardous substances released into the environment. We currently lease a number of properties upon which activities involving the handling of hazardous substances or wastes may have been conducted by third parties not under our control and prior to our occupation of the subject property. These properties may be subject to CERCLA, RCRA and analogous state laws in the future. Under these laws and implementing regulations, we could be required to remove or remediate previously discarded hazardous substances and wastes or property contamination that was caused by these third parties. These laws and regulations may also expose us to liability for our acts, including acts that were in compliance with applicable laws at the time they were performed.

Other potentially applicable laws and regulations include the federal Clean Air Act of 1970, or the CAA, the federal Clean Water Act of 1972, or the CWA, and the Oil Pollution Act of 1990, or the OPA. The CAA is the principal federal statute governing air emissions. Compliance and permitting for point source air emissions is regulated by each individual state. Each state must submit a State Implementation Plan (SIP) to the EPA for approval, outlining the requirements for air emissions within that state. These requirements establish guidelines, limits and permitting requirements for individual operators/businesses. The CWA is the principal federal statute protecting navigable waters and adjoining shorelines from pollution. The CWA imposes specific requirements for pollution prevention and response measures. In conjunction with similar state laws the CWA imposes effluent limitations regulating the amount of pollutants that may be discharged from specific point sources into state waters and waters of the United States through a system of permitting, compliance and spill prevention program requirements. Under the OPA, the government has adopted requirements related to the prevention of oil spills and the liability for damages resulting from such spills into waters of the United States. The OPA imposes strict, joint and several liability on the owners or operators of facilities or vessels, and/or the lessee or permittee of the area in which an offshore facility is located for oil removal costs and a variety of public and private damages, including natural resource damages. Our management believes that we possess and are in material compliance with applicable permits and plans required under the CWA and OPA. We are currently updating our existing and or developing new spill prevention, control and countermeasure (SPCC) plans which are required under the CWA and OPA for certain facilities that store oils. The SPCC regulations have been amended in recent years and their applicability is under consideration as each subsidiary evaluates its obligations under these regulations in light of the changing dynamics of the operations.

The Atomic Energy Act, which provides for the development and regulation of commercial nuclear power, authorizes the Nuclear Regulatory Commission, or NRC, to regulate radioactive “source material.” The “source material” used in the conduct of our business includes cesium-137, americium-241, iridium, iodine, radium, californium-252 and cobalt. Under the Atomic Energy Act, the NRC has entered into cooperative agreements with the states of Texas, Louisiana, Mississippi and New Mexico that authorize those states to regulate and license the use of source material. Source material is used by several of our companies, including PathFinder, Perf-O-Log, Inc. and Enertech Wireline Services, L.P., in connection with logging exploratory and producing wells in those states. We have obtained licenses from the Louisiana Department of Environmental Quality, the Texas Department of State

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Health Services (Radiation Control Program), and the Mississippi Department of Health and Radiological Control, as well as an NRC license, that allow us to store and use these source materials in connection with our well logging activities in these three states and other agreement states, as well as offshore in federal waters. We believe that we are in compliance with the terms and conditions of our radioactive material licenses.

Customers

Our customers include national, international and independent oil and natural gas companies, drilling contractors and other oilfield service companies operating in North America and select areas internationally. We provide services and equipment to a broad range of customers, and, therefore, we believe that we are not dependent on any single customer or group of customers. For the years ended December 31, 2007, 2006 and 2005, no single customer or group of affiliated customers accounted for 10% or more of our revenues. We typically enter into master service agreements with our customers. These agreements govern the terms of our relationship with our customers, but they generally do not create binding commitments on the part of our customers to use our services or on us to provide services.

Suppliers

We obtain our coiled tubing units, wireline equipment and rental tools, certain parts and components of our drilling motors and logging-while-drilling and measurement-while-drilling tools and certain chemicals and additives used in producing our drilling fluids from various third-party suppliers. We have not experienced and do not foresee experiencing a shortage of any of these products. Lead times for most of these products have increased, however, during the last two to three years.

Competition

We principally compete on the basis of product capability, reputation, quality, price, reliability, experience, availability and range of services offered. Competitors in our logging-while-drilling business include divisions of Baker Hughes, Halliburton, Schlumberger and Weatherford International. In our other businesses, our competitors include the major integrated oilfield service companies and both small and large independent oilfield service companies.

Employees

As of December 31, 2007, 2006 and 2005 we had 3,458, 2,959 and 2,333 employees, respectively. None of our employees are represented by a union or covered by a collective bargaining agreement. We believe that our relations with our employees are satisfactory.

Factors That May Affect Future Results and Accuracy of Forward Looking Statements

In addition to historical information, this Annual Report on Form 10-K contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, or the Securities Act, and Section 21E of the Securities Exchange Act of 1934, or the Exchange Act, 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, the risk factors discussed below. You should not place undue reliance on these forward-looking statements, which speak only of the date of this report. We undertake no obligation to publicly update such forward-looking statements to reflect events or circumstances after the date of this report.

Item 1A.   Risk Factors.

Set forth below is a discussion of some of the risks that we face and that could affect our business and financial position for 2008 and beyond. However, they are not the only risks that we face. There may be additional risks that we do not presently know of or that we currently believe are immaterial which could also impair our business and financial position.

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Risks Related to Our Business

Demand for our products and services depends on oil and natural gas industry activity and expenditure levels that are directly affected by trends in oil and natural gas prices.

Demand for our products and services is substantially dependent on the level of exploration, development and production activity of, and the corresponding capital spending by, oil and natural gas companies. Oil and natural gas companies typically reduce exploration and development activity during periods of low or volatile oil and natural gas prices. The markets for oil and natural gas historically have been volatile and are likely to continue to be so in the future. 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 that are beyond our control. Any prolonged reduction in oil and natural gas prices will depress the level of exploration, development and production activity by our customers which will result in a decrease in the demand for our products and services and could have a material adverse effect on our financial condition or results of operations.

Factors affecting the prices of oil and natural gas include:

•  the level of demand for oil and natural gas;

•  worldwide political, military and economic conditions, including, but not limited to, the ability of the Organization of Petroleum Exporting Countries to set and maintain production levels and prices for oil;

•  oil and natural gas production/inventory levels;

•  the policies of governments regarding the exploration for and production and development of their oil and natural gas reserves;

•  global weather conditions;

•  interest rates and cost of capital; and

•  tax laws.

Demand for our completion and workover related products and services is less immediately affected by changing oil and natural gas prices and, thus, tends to be less directly impacted by the above factors than our drilling related products and services. However, production activity typically decreases when oil and natural gas prices decline which could also adversely affect our completion and workover related products and services segment.

Because many of our products and services are used in potentially hazardous applications and operations, our business is subject to 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.

Many of our products and services are used in potentially hazardous drilling, completion and production applications. These activities are dangerous and accidents can result in:

•  personal injury;

•  loss of life;

•  damage to or destruction of property, equipment and the environment; and

•  suspension of operations.

Litigation arising from a catastrophic occurrence at a location where our equipment or services are used may result, in the future, in our being named as a defendant in lawsuits asserting potentially large claims.

In addition, many of our employees who perform services on offshore platforms and vessels are covered by provisions of the Jones Act, the Death on the High Seas Act and general maritime law. These laws have the effect of making the liability limits established by state workers’ compensation laws inapplicable to these employees and, instead, permit them or their representatives to pursue actions against us for damages from job-related injuries, with generally no limitations on our potential liability.

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The frequency and severity of these incidents affect our operating costs, insurability and relationships with customers, employees and regulators. Any increase in the frequency or severity of these incidents, or the general level of compensation awards resulting from these incidents, could affect our ability to obtain projects from oil and natural gas companies or insurance covering these incidents.

Unavailability of, or costs associated with insurance could affect us adversely.

We maintain insurance policies providing coverage for risks that we believe are consistent with industry standards and that meet the requirements of our customers. However, our insurance may not be sufficient to cover any particular loss, and it does not provide coverage for all liabilities. In addition, many of our insurance policies contain deductibles for which we are responsible.

Insurance rates for our industry have been subject to fluctuations during the last five years. Continuing increases in the costs of insurance could adversely affect our financial condition and results of operations. We may not be able to maintain adequate insurance at rates we consider commercially reasonable. The occurrence of an event not fully covered by insurance could have a material adverse effect on our financial condition or results of operations.

We may encounter difficulty in continuing to develop, produce and commercialize technologically advanced products and services.

Our customers continually demand new and improved products and services that increase the precision of and reduce the uncertainty associated with the exploration for and development of oil and natural gas. Many of our competitors are much larger and have greater research and development, financial and other resources. If we are not able to develop commercially competitive products and services that we can offer at competitive prices in a timely manner, our financial condition and results of operations may be adversely affected. New product development is a lengthy and costly process and depends upon our ability to:

•  foresee the needs of our customers and the new technologies likely to be introduced by our competitors;

•  successfully design, test, manufacture, market and commercialize our own competing technologies; and

•  obtain and maintain exclusive technology positions through patent and trade secret protection.

We may encounter resource constraints or technical or other difficulties that could delay the introduction of new products and services in the future. In addition, our competitors may introduce new products before we are able to, thereby possibly achieving a commercial advantage over us.

If we are unable to develop, produce and commercialize new products and services that we can offer to our customers at a competitive price, our financial position and results of operations could be adversely affected.

Our business could be adversely affected by disputes regarding intellectual property or our inability to obtain protection for technologies we develop.

Many of our operations, especially those dependent on our logging-while-drilling and measurement-while-drilling products and services and specialty chemical sales, rely substantially on proprietary rights in technologies for which we hold licenses or patents. In addition, we are pursuing patent and trademark protection for our newly developed technologies and brands. The market success of our technologies will depend, in part, on our ability to obtain and enforce our proprietary rights in these technologies, to preserve rights in our trade secret and non-public information, and to operate without infringing the proprietary rights of others. We rely on a combination of patent, trademark and trade secret laws and restrictions on disclosure of our proprietary information to protect our intellectual property rights. We also seek to obtain confidentiality agreements from our employees, consultants and business partners and control access to and distribution of our documentation and other forms of our proprietary information. It is possible that these measures may not:

•  prevent the challenge, invalidation, narrowing or circumvention of our existing patents;

•  prevent our competitors from independently developing similar products or services, duplicating our products or services, or designing around the patents owned by us;

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•  prevent third-parties from enforcing patents against us that eventually limit our ability to do business in some areas of the market;

•  provide adequate protection for our intellectual property rights and technologies;

•  prevent disclosure of our trade secrets and know-how to third parties or the public; or

•  result in intellectual property rights adequate to protect our business from competition from foreign sources.

If any of our patents or other intellectual property rights are determined to be invalid or unenforceable, or if a court limits the scope of claims in a patent or fails to recognize our trade secret rights, our competitive advantages could be significantly reduced in the relevant technology, allowing competition for our customer base to increase. The resulting loss in revenues could adversely affect our operational results. In addition, unauthorized parties may attempt to obtain or use our proprietary technologies. Monitoring unauthorized use of our technology may be difficult and we cannot be certain that the steps that we have taken will prevent unauthorized use of our technology particularly in foreign countries or markets where the laws may not protect our proprietary rights as fully as in the United States.

Numerous patents have been issued to oilfield service companies covering a wide variety of products and services. Although we endeavor to avoid infringing the proprietary rights of others in bringing new technologies and brands to market, there can be no assurance that third parties will not make claims of infringement. Intellectual property litigation is inherently expensive, whether enforcing our own proprietary rights or defending against the infringement claims of others. If a commercially significant intellectual property dispute arises, we could incur substantial litigation costs or be subject to claims for damages or injunctive relief, the impact of which upon our business could be material.

Intense competition in our industry could adversely affect our results of operations.

We operate in highly competitive areas of the oilfield products and services markets. The volatility of oil and natural gas prices has led to a consolidation of a number of companies providing products and services similar to those we provide. As a result of these consolidations, many of our competitors are much larger and have greater research and development, marketing, distribution, financial and other resources than we do. If these or other of our competitors or new market entrants introduce new products or services with better features, performance, prices or other characteristics than our products and services, our financial condition or results of operations may be adversely affected. In addition, the intense competition in our industry could result in significant price competition that could have a material adverse effect on our results of operations and financial condition. Finally, competition among oilfield service and equipment providers is partly based on the provider’s reputation for safety and quality. Although we believe that our reputation for safety and quality service is good, there can be no assurance that we will be able to maintain this reputation and, thus our competitive position.

The volatility of the oil and natural gas industry may affect our ability to attract and retain the skilled workers on which our operations depend.

We may not be able to find enough skilled workers to meet our needs, which could limit our growth. Business activity in the oil and natural gas industry historically decreases or increases with the price of oil and natural gas. Even though the prices of oil and natural gas have increased, industry-wide downsizing, resulting from low oil and natural gas prices in the late 1990s and industry consolidation, caused oilfield workers to look for and secure work in other industries and locations. The oil and natural gas industry has not fully recovered from the earlier employment migration away from the oil and natural gas industry. As a result, we may have problems finding enough skilled workers in the future.

With a reduced pool of workers, it is possible that we will have to raise wage rates to attract workers from other fields and to retain or expand our current work force. If we are not able to increase our service rates to our customers to compensate for wage rate increases, our financial condition or results of operations may be adversely affected.

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Our success depends on attracting and retaining key employees.

We depend on attracting and retaining the services of key employees, including executive officers and directors. We have employment agreements with certain key employees that contain non-compete provisions. Despite these agreements, we may not be able to retain these key employees and may not be able to enforce the non-compete provisions in their employment agreements.

Increases in the prices of raw materials could affect our results of operations.

We use raw materials in the production of our products. If we encounter difficulty in procuring or arranging for the transportation of these raw materials, and we are unable to pass corresponding cost increases on to our customers, our financial position and results of operations could be adversely affected.

Adverse weather conditions could result in fluctuations in our operating results.

Demand for our products and services in the Gulf of Mexico may be adversely affected by the hurricanes and other storms prevalent in the Gulf of Mexico and along the Gulf Coast during the summer and fall months. The threat of a hurricane or tropical storm in the vicinity of a drilling rig or production platform where we have personnel and equipment deployed often requires us to evacuate our personnel and equipment. An evacuation and the amount of time required to redeploy personnel and equipment after the threat of a storm has passed may result in significant downtime and lost revenues, especially in the case of a large storm. In addition, equipment that we are unable to remove from the path of a storm may be damaged, lost or destroyed.

In the North Sea, demand for our products and services is also affected by periods of adverse weather, although the storms experienced in the North Sea typically do not require the evacuation of personnel and equipment.

As a result, our operating results may vary from quarter to quarter, depending upon factors outside of our control and full year results are not likely to be a direct multiple of any particular quarter or combination of quarters.

Compliance with environmental and other government regulations could adversely affect our business.

Our business is significantly affected by foreign, federal, state and local laws and regulations including those relating to:

•  the oil and natural gas industry;

•  worker safety and environmental protection; and

•  foreign corrupt practices.

We depend on the demand for our products and services from oil and natural gas companies, drilling contractors and other oilfield service companies. This demand is affected by a variety of factors, including taxes, price controls and the adoption or amendment of laws and regulations. For example, the adoption of laws and regulations curtailing the exploration and development of oil and natural gas in our areas of operation for economic, environmental or other policy reasons could adversely affect our operations by limiting demand for our products and services.

The technical requirements of the foreign, federal, state and local laws and regulations affecting our businesses are becoming increasingly complex and stringent. For instance, some environmental laws may provide for “strict liability” for damages to natural resources or threats to public health and safety, rendering a party liable for environmental damage without regard to negligence or fault on the part of the party. Sanctions for noncompliance with these laws and regulations may include:

•  revocation of permits;

•  issuance of corrective action orders;

•  assessment of administrative, civil or criminal penalties; and

•  issuance of injunctions restricting or prohibiting our operations.

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Some environmental laws provide for joint and several strict liability for remediation of spills and releases of hazardous substances. In addition, we may be subject to claims alleging personal injury or property damage as a result of alleged exposure to hazardous substances, as well as damage to natural resources. These laws and regulations also may expose us to liability for the conduct of, or conditions caused by, others, or for our acts that were in compliance with applicable laws at the time the acts were performed.

The concentration of our customers in the energy industry could materially and adversely affect our earnings.

Substantially all of our customers are in the energy industry. This concentration of customers may impact our overall exposure to credit risk, either positively or negatively, in that customers may be similarly affected by changes in economic and industry conditions. Many of our customers slow the payment of their accounts when industry conditions decline. We perform ongoing credit evaluations of our customers, but do not generally require collateral in support of our trade receivables.

A significant amount of our growth has occurred through the acquisition of existing businesses; however, future acquisitions may be difficult to integrate, may disrupt our existing businesses and may adversely affect our operating results.

We may acquire other companies, assets and product lines that complement or expand our existing business. Each acquisition, however, involves a number of risks. These risks include:

•  the diversion of our management’s attention from our existing businesses to integrate the operations and personnel of the acquired business;

•  possible adverse effects on our operating results during the integration process; and

•  our possible inability to achieve the intended objectives of the combination.

We may seek to finance an acquisition through borrowings under our credit facility or through the issuance of new debt or equity securities. If we should proceed with a relatively large cash acquisition, we could deplete a substantial portion of our financial resources to the possible detriment of our other operations. Any future acquisitions could also dilute the equity interests of our shareholders, require us to write off assets for accounting purposes or create other accounting issues.

Our international operations may experience interruptions due to political and economic risks.

We operate our business and market our products and services in oil and natural gas producing areas outside the United States. We are, therefore, subject to the risks common in international operations and investments in foreign countries. These risks include:

•  nationalization and expropriation;

•  acts of terrorism, war and civil disturbances;

•  restrictive actions by local governments;

•  limitations on repatriation of earnings;

•  changes in foreign tax laws; and

•  changes in currency exchange rates and currency devaluations.

The occurrence of any of these events could have an adverse effect on regional demand for our products and services or our ability to provide our products and services in a particular region. An interruption of our international operations could have a material adverse effect on our results of operations and financial condition.

Our credit facility contains restrictive covenants that limit our financial and operational flexibility and our ability to pay dividends.

Our credit facility contains restrictive covenants that limit the incurrence of debt by our company, require us to maintain certain financial ratios, including a leverage ratio and an interest coverage ratio, and a specified net worth.

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Our credit facility also limits the amount of capital expenditures we may make, limits the amount of debt we may incur outside the credit facility, limits the amount of future investments we may make, restricts our ability to pay dividends and restricts our ability to engage in certain business combination transactions. These restrictions may adversely affect our ability to conduct and expand our operations as our business is capital intensive and requires specialized equipment. We may need to raise additional funds through public or private debt or equity financing to acquire new or additional equipment or for other purposes. Adequate funds may not be available when needed or may not be available on favorable terms. Even if adequate funds are available, our credit facility may restrict our ability to raise additional funds. If we are unable to raise capital, our financial condition and results of operations may be adversely affected.

As a holding company, we are dependent on cash flows from our operating subsidiaries to pay our obligations.

We are a holding company with no business operations. Our only significant asset is the outstanding capital stock of our subsidiaries. As a result, we must rely on cash flows from our subsidiaries to provide funding to meet our debt obligations and operating expenses. We currently intend to retain our earnings and cash flow for growth and general corporate expenditures and not to pay any dividends. Even if we decided to pay a dividend on or make a distribution in respect of our common stock, our subsidiaries may not be able to generate sufficient cash flow to distribute funds to us. At present, we are restricted from paying dividends under our credit facility. Future credit facilities and other future debt obligations, as well as statutory provisions, may also limit our ability to pay dividends.

Risks Related to the Market for Our Common Stock

The availability of shares of our common stock for future sale could depress our stock price.

Sales of a substantial number of shares of our common stock in the public market, or the perception that such sales might occur, could have a material adverse effect on the price of our common stock. We have registered the sale of 6,900,075 shares of our common stock which have been and may in the future be issued under our stock awards plans as restricted stock or upon the exercise of options. All of the shares issued upon exercise of these options and the shares of restricted stock upon vesting will be freely tradable without restrictions or registration under the Securities Act of 1933, by persons other than our affiliates. Our affiliates would be able to sell these shares under Rule 144 after compliance with any lock-up agreement to which they are subject.

Our stock price could be extremely volatile as a result of the effect that variations in oil and natural gas prices and other factors beyond our control could have on the market price of our stock.

The market price of our common stock may be influenced by many real or perceived factors, including:

•  variations in our quarterly or annual results of operations;

•  variations in oil and natural gas prices and production/ inventory levels;

•  drilling activity levels worldwide;

•  investor perceptions of us and other oilfield service companies, in general;

•  general economic conditions and industry competition; and

•  the liquidity of the market for our common stock.

These factors may cause the price of our common stock to fluctuate significantly.

In particular, the market price of our common stock may be influenced by variations in oil and natural gas prices because demand for our products and services is closely related to the prices of these commodities. Our stock price may fluctuate due to current or expected changes in commodity prices, which are highly volatile.

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Item 1B.   Unresolved Staff Comments.

None.

Item 2.   Properties.

Our principal executive offices are located in Houston, Texas. We lease or own numerous service centers, shops and sales and administrative offices throughout the United States and in select areas internationally. We believe that we have good title to the properties that we own and that all of our leases are at competitive or market rates, and we do not anticipate any difficulty in renewing these leases or in leasing suitable alternative space upon expiration of our current lease terms.

Item 3.   Legal Proceedings.

We are from time to time a party or otherwise subject to legal proceedings, claims, investigations and other proceedings in the ordinary course of our business. These matters typically involve tort, workers compensation, employment, commercial and infringement and other intellectual property claims. Where appropriate, we make provision for a liability with respect to these claims in our financial statements in accordance with generally accepted accounting principles. These provisions are reviewed periodically and adjusted to reflect the impacts of negotiations, settlements, rulings, advice of legal counsel and events pertaining to a particular case. Litigation is inherently unpredictable. Based upon information currently available, we do not believe that our ultimate liability with respect to these proceedings and claims would materially affect our consolidated results of operations or financial position.

Item 4.   Submission of Matters to a Vote of Security Holders.

No matters were submitted to a vote of our security holders during the fourth quarter of 2007.

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PART II

Item 5.   Market for Registrant’s Common Equity and Related Stockholder Matters and Issuer Purchases of Equity Securities.

Market for, Holders of and Dividends on Common Equity

Our common stock is traded on the New York Stock Exchange under the symbol “WHQ”. The following table sets forth the high and low intra-day prices per share of our common stock as reported by the New York Stock Exchange.

	High		Low
2006
First Quarter	$	49.00	$	33.33
Second Quarter		57.98		42.17
Third Quarter		56.38		38.96
Fourth Quarter		50.49		37.78
2007
First Quarter		48.54		39.91
Second Quarter		67.05		46.75
Third Quarter		77.42		55.33
Fourth Quarter		74.25		48.69

As of February 15, 2008, there were 30,852,141 shares of our common stock outstanding, which were held by approximately 112 record holders.

We have not declared or paid any cash dividends on our common stock since our initial public offering and do not intend to declare or pay any cash dividends on our common stock in the foreseeable future. Instead, we currently intend to retain our earnings, if any, to finance our business and for general corporate purposes. Furthermore, our credit facility restricts our ability to pay dividends. Please read “Management’s Discussion and Analysis of Financial Condition and Results of Operations — Liquidity and Capital Resources” in Item 7 for a discussion of restrictions on our ability to pay dividends. Any future determination as to the declaration and payment of dividends will be at the discretion of our Board of Directors and will depend on then existing conditions, including our financial condition, results of operations, contractual restrictions, capital requirements, business prospects and other factors that our Board of Directors considers relevant.

Equity Compensation Plans

The table below provides information relating to our equity compensation plans as of December 31, 2007, including the W-H Energy Services, Inc. 2006 Stock Awards Plan and the W-H Energy Services, Inc. 1997 Stock Option Plan, both of which have been approved by our shareholders.

	Number of
	Unvested Shares					Number of Securities
	of Restricted Stock and					Remaining Available for
	Number of Securities			Weighted-Average		Future Issuance Under
	to be Issued Upon			Exercise Price of		Compensation Plans
	Exercise of			Outstanding		(Excluding Securities
Plan Category	Outstanding Options			Options		Reflected in First Column)
Equity compensation plans approved by security holders		1,368,222	(1)	$	20.22		787,200
Equity compensation plans not approved by security holders		345,000	(2)	$	4.55		—
Total		1,713,222	(1)	$	16.76		787,200

(1) Includes 148,084 shares of unvested restricted stock issued to various employees and directors. These restricted shares do not have an exercise price; they have, thus, been excluded in calculating the weighted average exercise price.

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(2) On March 29, 1999, prior to our initial public offering, we granted to Kenneth T. White, Jr., our Chairman, President and Chief Executive Officer, options to purchase 900,900 shares of our common stock at a purchase price of $4.55 per share. The issuance of these options was approved by our Board of Directors but was not submitted to our shareholders for their approval. These options, which are fully vested, are exercisable by Mr. White at any time until March 29, 2009 and are not transferable. Upon Mr. White’s death or disability, or the termination of his employment for any reason, these options will terminate and expire; although, Mr. White (or his estate or the person who acquires these options by will or the laws of descent or distribution or otherwise by the reason of Mr. White’s death) may exercise these options for a period of three months following any such event. As of December 31, 2007, 345,000 of these options have not been exercised.

PERFORMANCE GRAPH

The graph below compares the total shareholder return on the Company’s Common Stock from December 31, 2002, to December 31, 2007, with the total return on the S&P 500 Index, the S&P 500 Oil & Gas (Equipment and Services) Index and the Dow Jones U.S. Oil Equipment & Services Index for the same period. The information in the graph is based on the assumption of (1) a $100 investment on December 31, 2002 at closing prices on December 31, 2002 and (2) reinvestment of all dividends.

COMPARISON OF FIVE-YEAR CUMULATIVE TOTAL RETURN
Among W-H Energy Services, Inc., the S&P 500 Index,
the S&P Oil & Gas Equipment & Services Index
and the Dow Jones U.S. Oil Equipment & Services Index

	2002		2003		2004		2005		2006		2007
W-H Energy Services, Inc.	$	100.00	$	111.03	$	153.26	$	226.73	$	333.72	$	385.26
S&P 500 Index		100.00		128.68		142.69		149.70		173.34		182.86
S&P 500 Oil & Gas Equipment & Services		100.00		124.74		164.49		244.38		282.35		417.58
Dow Jones U.S. Oil Equipment & Services		100.00		114.70		155.29		235.66		267.40		387.58

The information set forth in this section entitled “Performance Graph” shall not be deemed “soliciting material” or to be “filed” with the SEC, nor shall such information be incorporated by reference into any future filing under the Securities Act or the Exchange Act, except to the extent that we specifically incorporate it by reference into such filing.

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Item 6.   Selected Financial Data.

Our selected consolidated financial data set forth below is derived from our Consolidated Financial Statements and should be read in conjunction with our Consolidated Financial Statements and the accompanying notes and “Management’s Discussion and Analysis of Financial Condition and Results of Operations” included elsewhere in this Form 10-K. In particular, Note 3 to our Consolidated Financial Statements describes acquisitions consummated since January 1, 2005, which could affect the year to year comparability of the information presented below. The Consolidated Financial Statements as of and for the years ended December 31, 2006, 2005, 2004 and 2003 are labeled “as adjusted” to reflect that they have been adjusted relative to amounts previously reported due to a change in accounting principle (see Note 2 to our Consolidated Financial Statements — Summary of Significant Accounting Policies — Cost of Revenues for more information.

The Consolidated Financial Statements for the years ended December 31, 2007, 2006 and 2005 have been audited by Grant Thornton LLP. The Consolidated Financial Statements for the years ended December 31, 2004 and 2003 were audited by PricewaterhouseCoopers LLP.

	As of and For the Years Ended December 31,
	2007		2006		2005		2004			2003
			(as adjusted)		(as adjusted)		(as adjusted)			(as adjusted)
	(In thousands, except per share data)
Statements of Operations Information:
Revenues:
Drilling	$	738,413	$	563,945	$	409,155	$	302,788		$	242,085
Completion and workover		388,594		330,809		225,206		159,640			125,098
Total revenues		1,127,007		894,754		634,361		462,428			367,183
Cost of revenues		610,500		471,896		356,816		269,717			208,848
Selling, general and administrative expense		175,900		147,202		108,946		87,772			71,078
Warehouse fire related costs		—		—		3,690		—			—
Research and development expense		21,362		17,189		16,275		15,474			11,241
Depreciation and amortization		79,286		62,713		56,639		45,665			36,032
Income from operations		239,959		195,754		91,995		43,800			39,984
Interest expense and other expense, net(1)		8,355		8,936		10,777		11,023			8,168
Provision for income taxes		85,193		71,212		31,608		12,608			12,184
Income from continuing operations		146,411		115,606		49,610		20,169			19,632
Loss from discontinued operations, net of tax(2)		—		—		—		(2,126	)		(140	)
Net income	$	146,411	$	115,606	$	49,610	$	18,043		$	19,492
Earnings (loss) per share:
Basic:
From continuing operations	$	4.82	$	3.90	$	1.76	$	0.73		$	0.72
From discontinued operations		—		—		—		(0.08	)		—
Total	$	4.82	$	3.90	$	1.76	$	0.65		$	0.72
Diluted:
From continuing operations	$	4.70	$	3.78	$	1.71	$	0.72		$	0.70
From discontinued operations		—		—		—		(0.08	)		—
Total	$	4.70	$	3.78	$	1.71	$	0.64		$	0.70
Number of shares used in computing
earnings (loss) per share:
Basic		30,351		29,656		28,135		27,528			27,190
Diluted		31,154		30,572		29,086		28,201			27,942
Balance Sheet Information:
Total assets	$	1,007,030	$	824,281	$	621,975	$	548,125		$	500,899
Total debt	$	150,000	$	150,000	$	165,000	$	180,805		$	177,725

(1) The 2004 amount includes the write-off of approximately $3.1 million ($1.9 million, after tax) of non-cash financing costs associated with our previous credit facility.

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(2) 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 our Selected Financial Data and our Consolidated Statements of Operations and Comprehensive Income for fiscal years ended on or before December 31, 2004 as discontinued operations. In April 2004, we completed the sale of Well Safe, Inc., one of the two companies that formerly comprised our maintenance and safety related products and services segment, for cash consideration of $28.0 million. Additionally, in December 2004, we sold Charles Holston, Inc., the remaining entity that formerly comprised this segment, for consideration of $2.0 million. These sales resulted in a loss of $5.1 million for the year ended December 31, 2004.

Item 7.   Management’s Discussion and Analysis of Financial Condition and Results of Operations.

Set forth below is a description of the matters that we consider to be important to understanding the results of our operations for each of the three years in the period ended December 31, 2007, and our capital resources and liquidity as of December 31, 2007 and 2006. Our discussion begins with an overview of the significant factors that have recently affected our company, including a discussion of industry market trends and management’s perspectives regarding the opportunities and challenges we face during 2008 and beyond. Next, we analyze the results of our operations for the last three years. A summary follows of the critical accounting judgments and estimates that we have made which we believe are most important to an understanding of our Management’s Discussion and Analysis and our consolidated financial statements, as well as a discussion of recently issued accounting pronouncements. Finally, we review our cash flows and liquidity, capital resources and contractual commitments.

The following discussion includes various forward-looking statements about the markets in which we operate, the demand for our products and services and our future results. These statements are based on certain assumptions that we believe are reasonable. For information about some of the risks that could cause actual results to differ from these forward looking statements, please refer to the section entitled “Item 1. Business — Factors That May Affect Future Results and Accuracy of Forward-Looking Statements.”

The following discussion and analysis of our financial condition and results of operations should be read in conjunction with our Consolidated Financial Statements and related notes appearing elsewhere in this Form 10-K.

Overview of Our Business

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 rental equipment and costs of products sold as well as general operational costs. As a result of increased demand and competition for skilled personnel, compensation costs to attract and retain employees have continued to rise. A detailed description of the products and services that we provide, the manner in which we market these products and services and the way in which we charge our customers for these products and services is contained under “Item 1. Business — Businesses.”

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, expectations 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 also depends on oil and natural gas production activity, which may be less immediately affected by changes in oil and natural gas prices.

In July 2001, exploration and development activity levels in the United States peaked and subsequently 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 reached a low of 738, which consisted of 110 offshore rigs and 628 land rigs. As

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natural gas prices climbed and remained relatively strong, rig count levels began to recover in 2003, and this trend has continued through 2007. This increase, however, resulted 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 1,383, 1,649 and 1,768 for 2005, 2006 and 2007, respectively. Of these figures, land rigs comprised 1,290, 1,559 and 1,695 respectively, and offshore rigs comprised 93, 90 and 73, respectively, for the same periods. For the week ended February 15, 2008, an average of 55 rotary rigs were operating offshore in the United States.

The search for natural gas has been the primary focus of domestic drilling for the last several years as approximately 80% of the domestic drilling rig count has been natural gas drilling. We believe that the outlook for domestic natural gas exploration and development activity remains positive. First, due to significantly higher natural gas production decline rates, more wells must be drilled to maintain or increase natural gas production. As reported by RigData, the number of wells drilled annually has increased approximately 47% from 27,252 in 2003 to an estimated 39,980 in 2007. Second, our supply of natural gas continues to be provided primarily by domestic drilling. We believe these factors should keep upward pressure on long-term natural gas prices and domestic drilling. As a result, we are focusing our capital expenditure investments in locations which are attracting long-term investment in oil and natural gas exploration and development.

Drilling Related Products and Services

Revenue from our drilling related products and services segment constituted approximately 66% of our total 2007 consolidated revenue. Approximately 83% of our drilling segment revenue for 2007 was generated in the United States, including the Gulf of Mexico. The remaining 17% was generated in various international locations.

As the improvement in drilling activity in the United States has been onshore, we have sought to increase the content of our land-based services. As a result of growth in the domestic non-vertical rig count, we have successfully leveraged our directional drilling business to effect an increase in the utilization of our measurement-while-drilling and logging-while-drilling tools and down-hole drilling motor fleet. The increased utilization of our measurement-while-drilling and logging-while-drilling tools and down-hole drilling motor fleet has helped to offset the slowdown in domestic offshore activity.

Outside of the United States, the North Sea remains our largest market segment. In 2008, we expect to see increasing drilling activity in the Middle East and a modest increase in activity levels in the North Sea and our other foreign markets.

A 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 substantial 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 2004, we began to market our PathMaker^® 3-Dimensional Rotary Steerable line of tools with the introduction of our PathMaker^® tool in the 121/4-inch hole size. The PathMaker^® tool in the 81/2-inch hole size became available on a commercial basis during the first quarter of 2007. Other sizes of the PathMaker^® tool are currently in development. We expect commercialization of the 3-Dimensional Rotary Steerable technology to further 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 submitting bids on a drilling project or contract.

In 2004, our subsidiary, PathFinder Energy Services, Inc. (“PathFinder”), introduced the first of the Survivor^tm tools designed for use in high pressure and high temperature conditions (up to 25,000 psi and 350°F) with the commercialization of its dual frequency Array Wave Resistivity tool. That tool is now available in 63/4, 8 and 91/2-inch outside diameter sizes and now also includes a slim version which is our SAWR^tm (43/4 inch outside diameter Slim Array Wave Resistivity tool). The Survivor^tm tool series currently also includes Survivor^tm HDS-1^tm (a high precision directional survey tool), Survivor^tm DPM^tm (Dynamic Pressure Module) and Survivor^tm SDNSC^tm (43/4-inch outside diameter Slim Density Neutron Standoff Caliper tool).

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Completion and Workover Related Products and Services

Our completion and workover related products and services segment provided approximately 34% of our total consolidated revenue for 2007. Revenues provided by this segment are almost entirely derived from the United States and the Gulf of Mexico. Demand for this segment’s products and services has historically been less immediately affected by changing oil and natural gas prices and, thus, has tended to be less directly impacted by these changes than is our drilling related products and services segment. However, the onshore content of our business line has increased over the past few years and has resulted in a proportionately greater amount of completion services which are associated with exploration and development activity, rather than workover services which are associated with production activity.

We have increased our revenue capacity in this segment through capital spending which, when combined with our acquisitions and strategic land-based expansion efforts, 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. Increased competition in certain markets within this segment has adversely impacted utilization and pricing and increased the demand for qualified personnel.

Geographic Expansion

We recently established a larger presence in the Rocky Mountain region of the United States with construction of a new facility and the hiring of key local personnel. We have invested approximately $77.0 million to date in capital expenditures to construct and equip this facility which provides rental tools and coiled tubing and cased-hole wireline services. We began generating revenues from this facility during 2007 and expect to increase our capacity and utilization in this market during 2008.

Results of Operations

Year Ended December 31, 2007 Compared to the Year Ended December 31, 2006

Revenues.  Revenues increased by $232.2 million, or approximately 26%, to $1,127.0 million for the year ended December 31, 2007 from $894.8 million for the year ended December 31, 2006. This increase was primarily attributable to higher levels of activity and demand for certain of our products and services and additional revenue capacity from our capital expenditure investments.

Revenues from our drilling related products and services increased by $174.5 million, or approximately 31%, to $738.4 million for the year ended December 31, 2007 from $563.9 million for the year ended December 31, 2006. We attribute the increase in revenues in this segment to:

•  an increase in demand for our directional drilling services and technologically advanced services and tools and drilling fluids products due, in part, to a 7% higher average number of rotary rigs and a 11% higher average number of rigs drilling non-vertical wells operating in the United States;

•  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 North Sea, North Africa, and the Middle East; and

•  onshore geographic expansion.

Revenues from our completion and workover related products and services increased by $57.8 million, or approximately 18%, to $388.6 million for the year ended December 31, 2007 from $330.8 million for the year ended December 31, 2006. We attribute the increase in revenues in this segment to:

•  higher demand for our cased-hole wireline and coiled tubing services;

•  an increase in our coiled tubing and cased-hole wireline fleets and other capital expenditure investments; and

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•  onshore geographic expansion.

Cost of Revenues.  Cost of revenues increased by $138.6 million, or approximately 29%, to $610.5 million for the year ended December 31, 2007 from $471.9 million for the year ended December 31, 2006. As a percentage of revenues, cost of revenues were 54% and 53% for the years ended December 31, 2007 and 2006, respectively. The increase in the cost of revenues as a percentage of revenues for 2007 period as compared to 2006 period was due primarily to (1) revenue mix across our business lines including increases in our fluids businesses which have a higher cost of revenue component, (2) lower utilization and pricing pressure in our coiled tubing business line, and (3) higher personnel and other operating costs due, in part, to the start-up costs associated with expansion in the Rocky Mountain region.

Selling, General and Administrative Expenses.  Selling, general and administrative expenses increased by $28.7 million, or approximately 20%, to $175.9 million for the year ended December 31, 2007 from $147.2 million for the year ended December 31, 2006. The increase was primarily attributable to increased selling costs attributable to our revenue growth and other personnel costs related to expansion efforts within all of our business lines. As a percentage of revenues, selling, general and administrative expenses were 16% for the years ended December 31, 2007 and 2006.

Research and Development Expenses.  Research and development expenses increased by $4.2 million, or approximately 24%, to $21.4 million for the year ended December 31, 2007 from $17.2 million for the year ended December 31, 2006. The costs incurred in 2007 were for development of PathFinder technologies, including our PathMaker^® 3-Dimensional Rotary Steerable technology.

Depreciation and Amortization.  Depreciation and amortization increased by $16.6 million, or approximately 27%, to $79.3 million for the year ended December 31, 2007 from $62.7 million for the year ended December 31, 2006. This increase was principally the result of a larger depreciable asset base resulting from our capital expenditure investments.

Interest and Other Expense.  Interest and other expense for the year ended December 31, 2007 was $8.4 million, a decrease of $0.5 million, or approximately 6%, from $8.9 million for the year ended December 31, 2006. This decrease was principally due to lower outstanding borrowings under our credit facility and an increase in capitalization of interest expense of $0.2 million related to the construction of our facility in the Rocky Mountain region. For the years ended December 31, 2007 and 2006 we recognized approximately $1.7 million and $1.2 million, respectively, in net gains as decreases to interest expense resulting from the impact of our interest rate swap agreements (discussed more fully under “Capital Resources”).

Provision for Income Taxes.  Our effective income tax rates for the years ended December 31, 2007 and 2006 were 37% and 38%, respectively. We anticipate that our effective income tax rate for 2008 will range from 37% to 38% assuming no discrete tax items. Factors that impact our effective tax rate include fluctuations in income across taxing jurisdictions with different tax rates.

Year Ended December 31, 2006 Compared to the Year Ended December 31, 2005

Revenues.  Revenues increased by $260.4 million, or approximately 41%, to $894.8 million for the year ended December 31, 2006 from $634.4 million for the year ended December 31, 2005. This increase was primarily attributable to higher levels of activity and demand for certain of our products and services, additional revenue capacity from our capital expenditure investments and favorable pricing.

Revenues from our drilling related products and services increased by $154.7 million, or approximately 38%, to $563.9 million for the year ended December 31, 2006 from $409.2 million for the year ended December 31, 2005. We attribute the increase in revenues in this segment to:

•  a 19% increase in the 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;

•  our larger asset base resulting from our capital expenditure investments;

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•  improved pricing;

•  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; and

•  recovery of activity levels in the Gulf of Mexico as the infrastructure damage caused by Hurricanes Katrina and Rita in 2005 was repaired; and

•  onshore geographic expansion.

Revenues from our completion and workover related products and services increased by $105.6 million, or approximately 47%, to $330.8 million for the year ended December 31, 2006 from $225.2 million for the year ended December 31, 2005. We attribute the increase in revenues in this segment to:

•  higher demand for our tools and services as a result of an overall increase in activity levels;

•  a rebound in offshore activity and a less active 2006 hurricane season;

•  an increase in our cased-hole wireline and coiled tubing fleets and other capital expenditure investments;

•  improved pricing; and

•  onshore geographic expansion.

Cost of Revenues.  Cost of revenues increased by $115.1 million, or approximately 32%, to $471.9 million for the year ended December 31, 2006 from $356.8 million for the year ended December 31, 2005. As a percentage of revenues, cost of revenues decreased to 53% for the year ended December 31, 2006 from 56% for the year ended December 31, 2005. The decrease in cost of revenues as a percentage of revenues was primarily due to a change in our revenue mix, improved utilization in both business segments and improved pricing. In particular, our revenue mix was affected by revenue increases in our higher margin logging-while-drilling, measurement-while-drilling, directional drilling, rental tools, wireline and coiled tubing operations. These margin improvements were partially offset by higher employee compensation expenses, start-up costs in the Middle East and Rocky Mountain region and other operational costs.

Selling, General and Administrative Expenses.  Selling, general and administrative expenses increased by $38.3 million, or approximately 35%, to $147.2 million for the year ended December 31, 2006 from $108.9 million for the year ended December 31, 2005. The increase was primarily attributable to increased selling costs attributable to our revenue growth, other personnel costs related to expansion efforts within all of our business lines and higher share-based compensation expense due to adoption of SFAS No. 123R as of January 1, 2006. As a percentage of revenues, selling, general and administrative expenses were 16% and 17% for the years ended December 31, 2006 and 2005, respectively.

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 year ended December 31, 2005, we reported $3.7 million in costs associated with this fire. This amount has been reflected in the Consolidated Statements of Operations and Comprehensive Income under the caption “Warehouse fire related costs” and as a reduction to operating income for the drilling segment in Footnote 13 “Operating Segments” for the year ended December 31, 2005.

Research and Development Expenses.  Research and development expenses increased by $0.9 million, or approximately 6%, to $17.2 million for the year ended December 31, 2006 from $16.3 million for the year ended December 31, 2005. The costs incurred in 2006 were for development of various PathFinder technologies, including our PathMaker^® 3-Dimensional Rotary Steerable line of tools.

Depreciation and Amortization.  Depreciation and amortization increased by $6.1 million, or approximately 11%, to $62.7 million for the year ended December 31, 2006 from $56.6 million for the year ended December 31, 2005. This increase was principally the result of a larger depreciable asset base resulting from our capital expenditure investments.

Interest and Other Expense.  Interest and other expense for the year ended December 31, 2006 was $8.9 million, a decrease of $1.9 million, or approximately 18%, from $10.8 million for the year ended December 31,

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2005. This decrease was principally due to lower outstanding borrowings under our credit facility, partially offset by higher interest costs associated with rising interest rates. We recognized approximately $1.2 million in net gains in 2006 as decreases to interest expense during 2006 and we recognized $0.5 million in net losses in 2005 as increases to interest expense resulting from the impact of our interest rate swap agreements (discussed more fully under “Capital Resources”).

Provision for Income Taxes.  Our effective income tax rates for the years ended December 31, 2006 and 2005 were 38% and 39%, respectively.

Critical Accounting Policies and Estimates

The preparation of our consolidated financial statements requires that we make estimates and judgments that affect the reported amounts of assets, liabilities, revenues and expenses and related disclosure of contingent assets and liabilities. We evaluate our estimates on an on-going basis, based on historical experience and on various other assumptions that we believe are reasonable under the circumstances. The most significant areas involving management judgment and estimates are described below. Actual results may differ from these estimates under different assumptions or conditions.

Allowance for doubtful accounts

We extend credit to customers and other parties in the normal course of business. We regularly review outstanding receivables and provide for estimated losses through an allowance for doubtful accounts. In evaluating the level of established reserves, we make judgments regarding our customers’ ability to make required payments, economic events and other factors. As the financial condition of these parties change, circumstances develop or additional information becomes available, adjustments to the allowance for doubtful accounts may be required. In the event we were to determine that a customer may not be able to make required payments, we would increase the allowance through a charge to income in the period in which that determination is made. Historically, we have not incurred material write-offs against the allowance for doubtful accounts that had not been adequately provided for. See Note 2 to the Consolidated Financial Statements for further discussion.

Income taxes

We account for income taxes in accordance with Statement of Financial Accounting Standard No. 109, or FAS 109, “Accounting for Income Taxes,” as clarified by FASB Interpretation No. 48, “Accounting for Uncertainty in Income Taxes” (“FIN 48”). Under this method, deferred income taxes are determined based on the estimated future tax effects of differences between the financial statement and tax bases of assets and liabilities given the provisions of enacted tax laws. Deferred income tax provisions and benefits are based on changes to the assets or liabilities from year to year. In providing for deferred taxes, we consider tax regulations of the jurisdictions in which we operate, estimates of future taxable income, and available tax planning strategies. If tax regulations, operating results or the ability to implement tax-planning strategies vary, adjustments to the carrying value of deferred tax assets and liabilities may be required. Valuation allowances are recorded related to deferred tax assets based on the “more likely than not” criteria of FAS No. 109.

FIN 48 requires that we recognize the financial statement benefit of a tax position only after determining that the relevant tax authority would more likely than not sustain the position following an audit. For tax positions meeting the more-likely-than-not threshold, the amount recognized in the financial statements is the largest benefit that has a greater than 50 percent likelihood of being realized upon ultimate settlement with the relevant tax authority.

Insurance reserves

We are subject to legal proceedings and claims from time to time, the outcomes of which are subject to significant uncertainty. Although we maintain policies of insurance that cover claims asserted against our company, many of our policies provide for large deductibles. In addition, our insurance policies may not cover certain types of claims. We determine whether to disclose and accrue for loss contingencies based on the coverages we maintain and our assessment of whether the risk of loss is remote, reasonably possible, or probable. While we make these

25

judgments with the advice of legal counsel and our insurers, these judgments are inherently subjective. As claims develop and additional information becomes available, adjustments to loss reserves may be required. Historically, our actual claims losses have not differed materially from our loss reserves.

Impairment of long-lived assets

Our long-lived assets are carried on our financial statements based on their cost less accumulated depreciation. However, accounting standards require us to write down assets or groups of assets if they become impaired. If significant events or changes in circumstances indicate that the carrying value of an asset or asset group may not be recoverable, we perform a test of recoverability by comparing the carrying value of the asset or asset group to its undiscounted expected future cash flows. If cash flows cannot be separately and independently identified for a single asset, we will determine whether an impairment has occurred for the group of assets for which we can identify the projected cash flows. If the carrying values are in excess of undiscounted expected future cash flows, we measure any impairment by comparing the fair value of the asset or asset group to its carrying value. Fair value is typically determined by an internally developed discounted projected cash flow analysis of the asset or asset group. If the fair value of an asset or asset group is determined to be less than the carrying amount of the asset or asset group, an impairment in the amount of the difference is recorded in the period that the impairment indicator occurs.

Typical indicators that an asset may be impaired include:

•  significant underperformance relative to expected historical or projected future operating results;

•  significant changes in the manner of our use of the assets or the strategy for our overall business;

•  significant negative industry or economic trends;

•  significant decline in our stock price for a sustained period; and

•  market capitalization relative to net book value.

If any of these or other indicators occurs, we review the asset to determine whether there has been an impairment. Several of these indicators are beyond our control, and we cannot predict with any certainty whether or not they will occur. In addition, determination of future cash flows requires us to make judgments and estimates based upon the most recent market and operating data for the applicable asset at the time the estimate is made, and such estimates can change based on market conditions, technological advances in the industry or changes in regulations governing the industry.

Goodwill and intangible assets

Goodwill and intangible assets deemed to have indefinite lives are not amortized, but are subject to annual impairment testing or more frequently if indicators arise. The identification and measurement of goodwill impairment involves the estimation of the fair value of reporting units. The estimates of fair value of reporting units are based on the best information available as of the date of the assessment, which primarily incorporate management assumptions about expected future cash flows but are also based on other valuation techniques. Future cash flows can be affected by changes in industry or market conditions or the rate and extent to which anticipated synergies or cost savings are realized with newly acquired entities. Although no goodwill impairment has been recorded to date, there can be no assurances that future goodwill impairments will not occur. See Notes 2 and 5 to the Consolidated Financial Statements for more information.

Recent Accounting Pronouncements

In September 2006, the FASB issued SFAS No. 157, “Fair Value Measurements” (“SFAS No. 157”), which is intended to increase consistency and comparability in fair value measurements in financial statements by defining fair value, establishing a framework for measuring fair value and expanding disclosures about fair value measurements. SFAS No. 157 is effective for financial statements issued for fiscal years beginning after November 15, 2007, and interim periods within those fiscal years. We will adopt SFAS No. 157 on January 1, 2008 and do not anticipate it will have a material impact on our Consolidated Financial Statements. FASB Staff Position FAS 157-2, “Effective Date of FASB Statement No. 157,” provides a one-year deferral of the effective date of FASB Statement

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157, Fair Value Measurements, for nonfinancial assets and nonfinancial liabilities, except those that are recognized or disclosed in financial statements at fair value on a recurring basis.

In February 2007, the FASB issued SFAS No. 159, “The Fair Value Option for Financial Assets and Financial Liabilities (as amended)” (“SFAS No. 159”), which permits entities to choose to measure most financial instruments and certain other items at fair value. SFAS No. 159 is effective for financial statements issued for fiscal years beginning after November 15, 2007, and interim periods within those fiscal years. We will adopt SFAS No. 159 on January 1, 2008 and do not anticipate it will have a material impact on our Consolidated Financial Statements.

In December 2007, the FASB issued SFAS No. 141 (revised 2007), “Business Combinations” (“SFAS No. 141R”) to change how an entity accounts for the acquisition of a business. SFAS No. 141R carries forward the existing requirements to account for all business combinations using the acquisition method (formerly called the purchase method). In general, SFAS No. 141R will require acquisition-date fair value measurement of identifiable assets acquired, liabilities assumed and non-controlling interests in the acquiree. SFAS 141R will eliminate the current cost — based purchase method under SFAS No. 141. The new measurement requirements will result in the recognition of the full amount of acquisition-date goodwill, which includes amounts attributable to non-controlling interests. The acquirer will recognize in income any gain or loss on the remeasurement to acquisition-date fair value of consideration transferred or of previously acquired equity interests in the acquiree. The direct costs incurred to effect a business combination and the costs the acquirer expects to incur under a plan to restructure an acquired business will be charged to expense when incurred. SFAS No. 141R will also change the accounting for contingent consideration, in process research and development, contingencies, and restructuring costs. In addition, changes in deferred tax asset valuation allowances and acquired income tax uncertainties in a business combination that occur after the measurement period will impact income taxes under SFAS No. 141R. SFAS No. 141R is effective for fiscal years beginning on or after December 15, 2008 and interim periods within those years. We intend to adopt SFAS No. 141R effective January 1, 2009 and apply its provisions prospectively. We currently do not believe that the adoption of Statement No. 141R will have a significant effect on our financial statements; however, the effect is dependent upon whether we make any future acquisitions and the specific terms of those acquisitions.

SFAS No. 141R amends the goodwill impairment test requirements in SFAS No. 142. For a goodwill impairment test as of a date after the effective date of SFAS No. 141R, the value of the reporting unit and the amount of implied goodwill, calculated in the second step of the test, will be determined in accordance with the measurement and recognition guidance on accounting for business combinations under SFAS No. 141R. This change could effect the determination of what amount, if any, should be recognized as an impairment loss for goodwill recorded before the effective date of SFAS No. 141R. We have not determined what effect, if any, SFAS No. 141R will have on the results of our goodwill impairment testing subsequent to December 31, 2008.

Liquidity and Capital Resources

Our primary uses for cash are capital expenditures, working capital, 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 $290.0 million as of December 31, 2007 and $220.6 million as of December 31, 2006. Net cash provided by operating activities was $143.9 million for the year ended December 31, 2007 and $144.1 million for the year ended December 31, 2006. The increase in working capital was largely due to increases in accounts receivable and inventories due to increased activity levels across all business lines.

Net cash used in investing activities was $169.6 million for the year ended December 31, 2007 and $133.7 million for the year ended December 31, 2006. The increase in net cash used in investing activities was principally the result of increased capital expenditures which was partially offset by an increase in proceeds

27

from sales of equipment, which are primarily lost-in-hole proceeds which represent funds we receive from a customer when our rental equipment is involuntarily damaged or lost down-hole. Additionally, we invested $12.6 million in 2007 and $8.7 million in 2006, net of cash acquired, to acquire businesses.

Net cash provided by financing activities was $12.4 million for the year ended December 31, 2007 and $15.7 million for the year ended December 31, 2006. The decrease in cash provided by financing activities was primarily due to a decrease in proceeds from the exercise of stock options and the related tax benefits in 2007 as compared to 2006 offset, in part, by net repayments of borrowings during the 2006 period of $15.0 million.

For the year ended December 31, 2007, we made capital expenditures, primarily for rental equipment of $200.1 million, which included expenditures for the replacement of rental equipment, including rental tools damaged or lost-in-hole. In addition, we incurred $21.4 million in research and development expenses for the year ended December 31, 2007.

Acquisitions

During 2007, we consummated two acquisitions of businesses for total consideration of approximately $19.6 million, including cash of approximately $15.7 million ($12.6 million net of cash acquired) and 90,556 shares of our common stock. See Note 3 to the Consolidated Financial Statements for additional information.

Capital resources

We maintain a revolving credit facility with certain lenders to provide for our cash, liquidity and other borrowing needs. The credit facility provides for aggregate borrowings of up to $375.0 million and matures on May 5, 2010. As of December 31, 2007, we had an outstanding loan balance of $150.0 million and approximately $10.6 million in letters of credit issued under our credit facility, resulting in an available borrowing capacity on such date of approximately $214.4 million.

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.

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. As of December 31, 2007, we are in compliance with the financial ratios and other limitations of the credit facility.

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.

The descriptions of our credit facility, as amended, are qualified in their entirety by reference to the original credit facility which is filed as Exhibit 10.8 to our Quarterly Report on Form 10-Q for the quarter ended June 30, 2004, 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, the second amendment which is filed as Exhibit 10.8(b) to our Annual Report on Form 10-K for the year ended December 31, 2005, and the third amendment to our credit facility as described in our Current Report on Form 8-K dated January 3, 2008.

In May 2005, we 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 equal to three-month

28

LIBOR and pay interest at a fixed rate of 4.24%. Including the effect of the interest rate swap agreements we were incurring interest at a weighted average rate of approximately 5.2% on our total outstanding borrowings as of December 31, 2007.

Contractual obligations

The following table aggregates information about our contractual cash obligations (in thousands) as of December 31, 2007:

	Payments Due by Period
									More than
Contractual Obligations	Total		0-1 Year		2-3 Years		4-5 Years		5 Years
Debt	$	150,000	$	—	$	150,000	$	—	$	—
Operating leases		45,159		9,980		14,932		10,212		10,035
Purchase obligations(1)		99,883		97,240		2,643		—		—
Other(2)		9,028		—		—		—		—
Total	$	304,070	$	107,220	$	167,575	$	10,212	$	10,035

(1)	Purchase obligations represent orders to purchase various rental equipment, inventory items and other supplies that have not yet been delivered.
(2)	As of December 31, 2007, we had a net liability for unrecognized tax benefits of approximately $9.0 million. We are unable to reliably estimate the timing and amount of any payments related to this liability because there are currently no outstanding unpaid assessments from any tax authority.

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. Such transactions can be effected quickly and may occur at any time. Likewise, we will continue to need to make capital expenditures for rental 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 $180.0 million in 2008, and will make research and development expenditures of approximately $26.0 million to $27.0 million in 2008.

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 operating, capital expenditure, 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.

Off-balance sheet arrangements

With the exception of operating leases on real property and automobile leases discussed in Note 8 of our consolidated financial statements, we have no off-balance sheet debt or other off-balance sheet financing arrangements.

29

Item 7A.   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 equal to three-month LIBOR and pay interest at a fixed rate of 4.24%. Assuming our current level of borrowings and considering the effect of the interest rate swap agreements, a 100 basis point increase in the LIBOR-based interest rate we pay under our credit facility would have had no impact on our net interest expense for the year ended December 31, 2007.

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 common stock. The market price of our common stock may be influenced by many factors including real or perceived 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 8.   Financial Statements and Supplementary Data.

Our consolidated financial statements, together with the notes thereto and our independent registered public accounting firm’s reports thereon appear on pages F-1 through F-26 of this Annual Report on Form 10-K and are incorporated herein by reference.

Item 9.   Changes in and Disagreements with Accountants on Accounting and Financial Disclosure.

None.

Item 9A.   Controls and Procedures.

Disclosure Controls and Procedures.  We maintain disclosure controls and procedures, which are 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 provide reasonable assurance 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.

Management’s Report on Internal Control over Financial Reporting.  Our management is responsible for establishing and maintaining adequate internal control over financial reporting. Our internal control over financial reporting is a process designed under the supervision of our Chief Executive Officer and Chief Financial Officer to provide reasonable assurance regarding the reliability of financial reporting and the preparation of our financial statements for external reporting purposes in accordance with U.S. generally accepted accounting principles.

As of December 31, 2007, our management, with the participation of our Chief Executive Officer and Chief Financial Officer, conducted an assessment of the effectiveness of our internal control over financial reporting based on the framework established in Internal Control — Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission, or COSO. Based on this assessment, our management has determined that our internal control over financial reporting as of December 31, 2007 was effective.

30

Other Matters.  During the quarterly period ended December 31, 2007, 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.

Item 9B.   Other Information.

None.

PART III

Item 10.   Directors, Executive Officers and Corporate Governance.

Information required by this item is hereby incorporated by reference to the sections entitled “Information About Directors” and “Executive Officers of the Company” in our definitive proxy statement to be filed with the SEC pursuant to the Exchange Act within 120 days of the end of our fiscal year ended December 31, 2007.

Item 11.   Executive Compensation.

Information required by this item is hereby incorporated by reference to the sections entitled “Director Compensation” and “Executive Compensation” of our definitive proxy statement to be filed with the SEC pursuant to the Exchange Act within 120 days of the end of our fiscal year ended December 31, 2007.

Item 12.   Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters.

Information required by this item is hereby incorporated by reference to the section entitled “Principal Shareholders” of our definitive proxy statement to be filed with the SEC pursuant to the Exchange Act within 120 days of the end of our fiscal year ended December 31, 2007 and under the heading “Equity Compensation Plans” in Item 5 of this Annual Report on Form 10-K.

Item 13.   Certain Relationships and Related Transactions, and Director Independence.

Information required by this item is hereby incorporated by reference to the sections entitled “Certain Relationships and Related Transactions” and “Election of Directors” of our definitive proxy statement to be filed with the SEC pursuant to the Exchange Act within 120 days of the end of our fiscal year ended December 31, 2007.

Item 14.   Principal Accounting Fees and Services.

Information required by this item is hereby incorporated by reference to the section entitled “Audit Committee Report” of our definitive proxy statement to be filed with the SEC pursuant to the Exchange Act within 120 days of the end of our fiscal year ended December 31, 2007.

31

PART IV

Item 15.   Exhibits and Financial Statement Schedules.

Our consolidated financial statements, together with the notes thereto and our independent accountants’ reports thereon appear on pages F-1 through F-26 of this Annual Report on Form 10-K. An index to such financial statements appears on page F-1, and such index is incorporated herein by reference. All schedules not filed herewith for which provision is made under SEC Regulation S-X have been omitted as not applicable or not required or the information required has been included in the notes to our consolidated financial statements.

The Exhibit Index, which index follows page F-26 of this report and is incorporated herein by reference, sets forth a list of those exhibits filed herewith, and includes and identifies management contracts or compensatory plans or arrangements required to be filed as exhibits to this Form 10-K by Item 601(b)(10)(iii) of Regulation S-K.

32

SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) 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.

By:  /s/  Kenneth T. White, Jr.

Kenneth T. White, Jr.

Chairman, President and Chief Executive Officer

Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the Registrant and in the capacities indicated on the 28th day of February, 2008.

Signature
/s/  Kenneth T. White, Jr. Kenneth T. White, Jr.	Chairman of the Board, President and Chief Executive Officer (Principal Executive Officer)
/s/  Ernesto Bautista, III Ernesto Bautista, III	Vice President and Chief Financial Officer (Principal Financial and Accounting Officer)
/s/  John R. Brock John R. Brock	Director
/s/  James D. Lightner James D. Lightner	Director
/s/  Christopher Mills Christopher Mills	Director
/s/  Milton L. Scott Milton L. Scott	Director
/s/  Robert H. Whilden, Jr. Robert H. Whilden, Jr.	Director

33

INDEX TO CONSOLIDATED FINANCIAL STATEMENTS

Reports of Independent Registered Public Accounting Firm	F-2
Consolidated Balance Sheets as of December 31, 2007 and 2006	F-4
Consolidated Statements of Operations and Comprehensive Income for the Years Ended December 31, 2007, 2006 and 2005	F-5
Consolidated Statement of Shareholders’ Equity for the Years Ended December 31, 2007, 2006 and 2005	F-6
Consolidated Statements of Cash Flows for the Years Ended December 31, 2007, 2006 and 2005	F-7
Notes to Consolidated Financial Statements	F-8

F-1

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

Board of Directors and

Shareholders of W-H Energy Services, Inc.

We have audited the accompanying consolidated balance sheets of W-H Energy Services, Inc. (a Texas corporation) and subsidiaries as of December 31, 2007 and 2006, and the related consolidated statements of operations and comprehensive income, shareholders’ equity, and cash flows for each of the three years in the period ended December 31, 2007. These financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on these financial statements based on our audits.

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

In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the financial position of W-H Energy Services, Inc. and subsidiaries as of December 31, 2007 and 2006, and the results of their operations and their cash flows for each of the three years in the period ended December 31, 2007, in conformity with accounting principles generally accepted in the United States of America.

As discussed in Note 2 to the consolidated financial statements, the Company adopted FASB Interpretation No. 48, Accounting for Uncertainty in Income Taxes on January 1, 2007.

We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States), W-H Energy Services, Inc. and subsidiaries’ internal control over financial reporting as of December 31, 2007, based on criteria established in Internal Control — Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO) and our report dated February 27, 2008, expressed an unqualified opinion that W-H Energy Services, Inc. and subsidiaries maintained, in all material respects, effective internal control over financial reporting.

GRANT THORNTON LLP

Houston, Texas

February 27, 2008

F-2

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

Board of Directors and Shareholders

W-H Energy Services, Inc.

We have audited W-H Energy Services, Inc.’s (a Texas corporation) internal control over financial reporting as of December 31, 2007, based on criteria established in Internal Control — Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). The management of W-H Energy Services, Inc. and its subsidiaries is responsible for maintaining effective internal control over financial reporting and for its assessment of the effectiveness of internal control over financial reporting, included in the accompanying Management’s Report on Internal Control over Financial Reporting. Our responsibility is to express an opinion on W-H Energy Services, Inc.’s internal control over financial reporting based on our audit.

We conducted our audit in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether effective internal control over financial reporting was maintained in all material respects. Our audit included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, testing and evaluating the design and operating effectiveness of internal control based on the assessed risk, and performing such other procedures as we considered necessary in the circumstances. We believe that our audit provides a reasonable basis for our opinion.

A company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company’s internal control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s assets that could have a material effect on the financial statements.

Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

In our opinion, W-H Energy Services, Inc. and its subsidiaries maintained, in all material respects, effective internal control over financial reporting as of December 31, 2007, based on criteria established in Internal Control — Integrated Framework issued by COSO.

We have also audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States), the consolidated balance sheets of W-H Energy Services, Inc. and subsidiaries as of December 31, 2007 and 2006, and the related consolidated statements of operations and comprehensive income, shareholders’ equity, and cash flows for each of the three years in the period ended December 31, 2007, and our report dated February 27, 2008 expressed an unqualified opinion on those consolidated financial statements.

GRANT THORNTON LLP

Houston, Texas

February 27, 2008

F-3

W-H ENERGY SERVICES, INC.

CONSOLIDATED BALANCE SHEETS

(In thousands, except per share amounts)

	December 31,
	2007		2006
			(as adjusted)
Current Assets:
Cash and cash equivalents	$	23,076	$	36,329
Accounts receivable, net of allowance of $6,696 and $5,596, respectively		252,313		204,755
Inventories		102,584		78,127
Deferred income taxes		13,401		7,870
Prepaid expenses and other		15,479		14,906
Total current assets		406,853		341,987
Property and equipment, net		448,913		343,496
Goodwill		135,928		119,550
Other assets, net		15,336		19,248
Total assets	$	1,007,030	$	824,281
Current Liabilities:
Accrued liabilities	$	62,059	$	64,759
Accounts payable		54,756		56,668
Total current liabilities		116,815		121,427
Long-term debt		150,000		150,000
Deferred income taxes		73,526		56,637
Other long-term obligations		11,161		993
Commitments and Contingencies
Shareholders’ 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, 30,699 and 30,158 shares issued and outstanding, respectively		3		3
Additional paid-in capital		293,424		272,010
Other comprehensive income		6,291		9,759
Retained earnings		355,810		213,452
Total shareholders’ equity		655,528		495,224
Total liabilities and shareholders’ equity	$	1,007,030	$	824,281

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

F-4

W-H ENERGY SERVICES, INC.

CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME

(In thousands, except per share amounts)

	For the Years Ended December 31,
	2007			2006		2005
				(as adjusted)		(as adjusted)
Revenues	$	1,127,007		$	894,754	$	634,361
Costs and expenses:
Cost of revenues		610,500			471,896		356,816
Selling, general and administrative		175,900			147,202		108,946
Warehouse fire related costs		—			—		3,690
Research and development expenses		21,362			17,189		16,275
Depreciation and amortization		79,286			62,713		56,639
Total costs and expenses		887,048			699,000		542,366
Operating income		239,959			195,754		91,995
Other (income) expense:
Interest expense, net		8,388			8,864		10,498
Other (income) expense, net		(33	)		72		279
Income before income taxes		231,604			186,818		81,218
Provision for income taxes		85,193			71,212		31,608
Net income	$	146,411		$	115,606	$	49,610
Comprehensive income:
Net income	$	146,411		$	115,606	$	49,610
Increase (decrease) in interest rate swap valuations		(3,325	)		353		2,030
Foreign currency translation adjustment		(143	)		1,554		(1,700	)
Comprehensive income	$	142,943		$	117,513	$	49,940
Earnings per share:
Basic	$	4.82		$	3.90	$	1.76
Diluted	$	4.70		$	3.78	$	1.71
Number of shares used in calculation of earnings per share:
Basic		30,351			29,656		28,135
Diluted		31,154			30,572		29,086

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

F-5

W-H ENERGY SERVICES, INC.

CONSOLIDATED STATEMENT OF SHAREHOLDERS’ EQUITY

(In thousands)

	Common
	Stock				Additional						Other
			Par		Paid-In			Deferred Stock			Comprehensive			Retained
	Shares		Value		Capital			Compensation			Income			Earnings			Total
Balance, January 1, 2005 (as adjusted)		27,803	$	3	$	214,846		$	(806	)	$	7,522		$	48,236		$	269,801
Amortization of deferred stock compensation		—		—		—			526			—			—			526
Issuance of common stock — stock option exercises		992		—		12,991			—			—			—			12,991
Issuance of common stock — acquisitions		31		—		882			—			—			—			882
Tax benefit from employee stock option plan		—		—		6,673			—			—			—			6,673
Interest rate swap valuations, net of tax of $1,092		—		—		—			—			2,030			—			2,030
Foreign currency translation adjustment		—		—		—			—			(1,700	)		—			(1,700	)
Net income (as adjusted)		—		—		—			—			—			49,610			49,610
Balance, December 31, 2005		28,826		3		235,392			(280	)		7,852			97,846			340,813
Elimination of deferred stock compensation in accordance with the adoption of SFAS 123R		—		—		(280	)		280			—			—			—
Share-based compensation		117		—		5,291			—			—			—			5,291
Issuance of common stock — stock option exercises		1,195		—		17,385			—			—			—			17,385
Issuance of common stock — acquisitions		20		—		889			—			—			—			889
Tax benefit from employee stock option plan		—		—		13,333			—			—			—			13,333
Interest rate swap valuations, net of tax of $189		—		—		—			—			353			—			353
Foreign currency translation adjustment		—		—		—			—			1,554			—			1,554
Net income (as adjusted)		—		—		—			—			—			115,606			115,606
Balance, December 31, 2006		30,158		3		272,010			—			9,759			213,452			495,224
Cumulative effect adjustment due to adoption of FIN 48		—		—		—			—			—			(4,053	)		(4,053	)
Share-based compensation		67		—		5,543			—			—			—			5,543
Issuance of common stock — stock option exercises		384		—		6,814			—			—			—			6,814
Issuance of common stock — acquisitions		90		—		3,500			—			—			—			3,500
Tax benefit from employee stock option plan		—		—		5,557			—			—			—			5,557
Interest rate swap valuations, net of tax of ($1,791)		—		—		—			—			(3,325	)		—			(3,325	)
Foreign currency translation adjustment		—		—		—			—			(143	)		—			(143	)
Net income		—		—		—			—			—			146,411			146,411
Balance, December 31, 2007		30,699	$	3	$	293,424		$	—		$	6,291		$	355,810		$	655,528

The accompanying notes are an integral part of this financial statement.

F-6

W-H ENERGY SERVICES, INC.

CONSOLIDATED STATEMENTS OF CASH FLOWS

(In thousands)

	For the Years Ended December 31,
	2007			2006			2005
				(as adjusted)			(as adjusted)
Cash Flows from Operating Activities:
Net income	$	146,411		$	115,606		$	49,610
Adjustments to reconcile net income to cash provided by operating activities —
Depreciation and amortization		79,286			62,713			56,639
Provision for doubtful accounts		1,851			1,443			2,103
Gain on sales of equipment, net		(24,597	)		(18,987	)		(12,158	)
Deferred tax provision		12,393			10,844			3,290
Share-based compensation		5,543			5,291			526
Amortization of deferred financing costs		574			574			488
Excess tax benefit from share-based compensation		(5,557	)		(13,333	)		—
Change in operating assets and liabilities, excluding effects of acquisitions —
Accounts receivable, net		(44,589	)		(53,174	)		(42,230	)
Inventories		(24,122	)		(22,448	)		(6,572	)
Prepaid expenses and other		(2,001	)		(2,776	)		2,007
Other assets, net		(289	)		23			576
Accounts payable, accrued liabilities and other		(966	)		58,289			18,407
Net cash provided by operating activities		143,937			144,065			72,686
Cash Flows from Investing Activities:
Acquisition of businesses, net of cash acquired of $3,152, $693 and $ — , respectively		(12,583	)		(8,724	)		(2,496	)
Additions to property and equipment		(200,088	)		(153,790	)		(88,967	)
Proceeds from sales of equipment		43,096			28,824			22,934
Net cash used in investing activities		(169,575	)		(133,690	)		(68,529	)
Cash Flows from Financing Activities:
Proceeds from the issuance of debt		112,596			25,760			61,783
Payments on debt		(112,596	)		(40,760	)		(77,588	)
Debt issuance costs		—			—			(1,089	)
Proceeds from exercise of stock options		6,814			17,385			12,991
Excess tax benefit from share-based compensation		5,557			13,333			—
Net cash provided by (used in) financing activities		12,371			15,718			(3,903	)
Effect of exchange rate changes on cash		14			322			(788	)
Net Increase (Decrease) in Cash and Cash Equivalents		(13,253	)		26,415			(534	)
Cash and Cash Equivalents, beginning of period		36,329			9,914			10,448
Cash and Cash Equivalents, end of period	$	23,076		$	36,329		$	9,914
Supplemental Disclosure of Cash Flow Information:
Interest paid during the period, net	$	8,873		$	8,673		$	9,366
Income taxes paid during the period	$	69,648		$	40,075		$	15,647
Supplemental Disclosure of Non-cash Transactions:
Transactions:
Issuance of common stock for acquisitions	$	3,500		$	889		$	882

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

F-7

W-H ENERGY SERVICES, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

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 in connection with the drilling and completion of oil and natural gas wells and the production of oil and natural gas. W-H has the following primary lines of business: (1) drilling related products and services, which include logging-while-drilling, measurement-while-drilling, directional drilling, down-hole drilling motors, drilling fluids and rental tools; and (2) completion and workover related products and services, which include cased-hole wireline logging, perforating, tubing conveyed perforating and associated rental equipment, coiled tubing, completion fluids and rental tools.

W-H’s business depends in large part on the conditions in the oil and natural gas industry and specifically on the amount of capital spending by its customers. 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. Changes in prices could have a material effect on W-H’s results of operations and financial condition, particularly with respect to its drilling related products and services segment. Demand for W-H’s 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 W-H’s completion and workover related products and services also depends on oil and natural gas production activity, which is less immediately affected by changes in oil and natural gas prices. 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 that are beyond W-H’s control. Any prolonged reduction in oil and natural gas prices may depress the level of exploration, development and production activity. Lower levels of activity result in a corresponding decline in the demand for W-H’s drilling related products and services which could have a material adverse effect on its revenues and profitability. Other risk factors include, but are not limited to, risks associated with (1) W-H’s ability to develop and commercialize competitive tools and technologies, (2) explosions, spills, fires and other accidents, (3) the competitive nature of W-H’s business, (4) the cost and availability of insurance, (5) the ability to attract and retain skilled employees and managers and (6) weather conditions in offshore markets.

2.   Summary of Significant Accounting Policies

Consolidation and Presentation

The accompanying consolidated financial statements include the accounts of W-H and its subsidiaries. All significant intercompany balances and transactions have been eliminated. Certain prior period amounts have been reclassified to conform to the current presentation.

Cash and Cash Equivalents

W-H considers all highly liquid investments with a maturity of three months or less when purchased to be cash equivalents.

Accounts Receivable

Accounts receivable have a concentration of credit risk in the oil and natural gas industry. W-H relies upon credit approval, balance limitation and monitoring procedures to control credit risk on trade accounts receivable. W-H generally does not require collateral.

F-8

W-H ENERGY SERVICES, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

Allowance for Doubtful Accounts

W-H extends credit to customers and other parties in the normal course of business. W-H regularly reviews outstanding receivables and provides for estimated losses through an allowance for doubtful accounts. In evaluating the level of established reserves, W-H makes judgments regarding its customers’ ability to make required payments, economic events and other factors. As the financial condition of these parties change, circumstances develop or additional information becomes available, adjustments to the allowance for doubtful accounts may be required. In the event W-H was to determine that a customer may not be able to make required payments, W-H would increase the allowance through a charge to income in the period in which that determination is made.

Inventories

Inventories are stated at the lower of cost or market, determined on a first-in, first-out basis. Inventories consist primarily of equipment, parts, raw materials and supplies. W-H assesses the realizability of its inventories based upon specific usage and future utility. A charge to results of operations is taken when factors that would result in a need for a reduction in the valuation, such as excess or obsolete inventory, are noted.

Property and Equipment

Property and equipment are recorded at cost. Expenditures for major additions and improvements are capitalized while minor replacements, maintenance and repairs, which do not improve or extend the life of such assets, are charged to operations as the services are provided. Disposals are removed at cost, less accumulated depreciation, and any resulting gain or loss is reflected in the accompanying consolidated statements of operations and comprehensive income. Proceeds from customers for rental equipment that is involuntarily damaged or lost down-hole are reflected as revenues, with the resulting carrying value of the related rental equipment charged to cost of revenues. Interest costs of $0.4 million and $0.2 million were capitalized during the years ended December 31, 2007 and 2006, respectively, related to its construction of the Rocky Mountain region facilities.

Proceeds from sales of equipment, including sales of equipment involuntarily damaged or lost down-hole, are reported as cash inflows from investing activities in the accompanying consolidated statements of cash flows. For the years ended December 31, 2007, 2006 and 2005, proceeds from sales of equipment involuntarily damaged or lost down-hole were $42.7 million, $27.9 million and $20.8 million, respectively. For the years ended December 31, 2007, 2006 and 2005, the gain on sales of equipment involuntarily damaged or lost down-hole was $26.4 million, $20.0 million and $13.7 million, respectively.

Depreciation is calculated using the straight-line method over the estimated useful lives of the depreciable assets. Leasehold improvements are amortized over the shorter of their useful lives or the term of the lease. The useful lives of the major classes of property and equipment are as follows:

	Life in
	Years
Rental equipment		2-10
Machinery and equipment		5-10
Automobiles and trucks		2-10
Office equipment, furniture and fixtures		3-7
Buildings and leasehold improvements		5-40

Realization of Long-Lived Assets

W-H evaluates the carrying value of long-lived assets whenever changes in circumstances indicate the carrying amount of such assets may not be recoverable. If necessary, W-H measures the carrying amount of the assets against the estimated undiscounted future cash flows associated with them. If such evaluations indicate that the future

F-9

W-H ENERGY SERVICES, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

undiscounted cash flows of certain long-lived assets are not sufficient to recover the carrying value of such assets, the assets are adjusted to their fair values. There have been no significant events or changes in circumstances indicating that the carrying value of W-H’s long-lived assets may not be recoverable; therefore, no adjustments were made to the carrying value of long-lived assets during the three years ended December 31, 2007.

Goodwill and Other Intangibles

Goodwill represents the excess of the aggregate price paid by W-H in acquisitions over the fair market value of the tangible and identifiable intangible net assets acquired. In accordance with Statement of Financial Accounting Standards No. 142, “Goodwill and Other Intangible Assets,” separable intangible assets that are not deemed to have indefinite lives will be amortized over their useful lives.

Under SFAS No. 142, goodwill and intangible assets with indefinite lives are not amortized but are reviewed annually (or more frequently if indicators arise) for impairment. According to SFAS No. 142, companies are required to identify their reporting units and determine the aggregate carrying values and fair values of all such reporting units. If the carrying value of a reporting unit exceeds its relative fair value, SFAS No. 142 requires that a second impairment test be performed. This second step requires the comparison of the implied fair value of the reporting unit goodwill to its related carrying value, both of which must be measured by the company at the same point in time each year. W-H performed the required assessments in accordance with SFAS No. 142 for the three years ended December 31, 2007, which resulted in W-H recording no goodwill impairment expense.

Debt Issue Costs

Other assets includes debt issue costs related to W-H’s revolving credit facility. W-H amortizes these costs as interest expense over the scheduled maturity period of the debt. Financing costs associated with W-H’s current credit facility, as amended, totaled approximately $2.6 million, and are amortized ratably to interest expense over the remaining term of the credit facility.

Revenue Recognition

W-H provides rental equipment and services to its customers on a day/hourly rate basis and recognizes the related revenue on a per-day/hourly basis as the work progresses. W-H also sells products to customers and recognizes the related revenue as items are shipped from its facilities. Proceeds from customers for the cost of oilfield rental equipment that is involuntarily damaged or lost down-hole are reflected as revenues. For the years ended December 31, 2007, 2006 and 2005, proceeds from sales of equipment involuntarily damaged or lost down-hole included in revenues were $42.7 million, $27.9 million and $20.8 million, respectively.

Cost of Revenues

The primary components of cost of revenues are those salaries, expendable supplies, repairs and maintenance, costs of products sold and general operational costs that are directly associated with the services W-H performed for or products sold by W-H to its customers.

In September 2006, the FASB issued FASB Staff Position (“FSP”) AUG AIR-1 — “Accounting for Planned Major Maintenance Activities”. FSP AUG AIR-1 prohibits the use of the accrue-in-advance method of accounting for planned major maintenance activities because it results in the recognition of a liability in a period prior to the occurrence of the transaction or event obligating the entity. W-H adopted the guidance in FSP AUG AIR-1 as of January 1, 2007 and applied it retrospectively for all prior periods presented. The Consolidated Financial Statements as of and for the years ended December 31, 2006 and 2005 are labeled “as adjusted” to reflect they have been adjusted to amounts previously reported. As of January 1, 2007, the cumulative effect of this accounting change decreased accrued liabilities by $3.5 million, decreased deferred tax assets by $1.0 million and increased retained earnings by $2.5 million. For the years ended December 31, 2006 and 2005, the effect of this accounting

F-10

W-H ENERGY SERVICES, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

change resulted in adjustments that decreased cost of revenues by $0.8 million and $1.0 million, increased net income by $0.6 million and $0.7 million, and increased diluted earnings per share by $0.02 and $0.02, respectively, as compared to amounts previously reported.

Research and Development

Research and development costs primarily represent salaries of research personnel and their related expenditures. Such activities are expensed when incurred. For the years ended December 31, 2007, 2006 and 2005, research and development costs were $21.4 million, $17.2 million and $16.3 million, respectively.

Income Taxes

W-H utilizes the liability method of accounting for income taxes. Under the liability method, deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying values of existing assets and liabilities and their respective tax bases based on enacted tax rates. W-H recognizes liabilities for anticipated tax issues based on its estimate of whether, and the extent to which, additional taxes will be due. These liabilities are adjusted accordingly as information on the associated tax issues becomes available.

In June 2006, the Financial Accounting Standards Board (“FASB”) issued FASB Interpretation No. 48, “Accounting for Uncertainty in Income Taxes” (“FIN 48”). FIN 48 clarifies the application of SFAS No. 109, “Accounting for Income Taxes,” by establishing a threshold condition that a tax position must meet for any part of the benefit of that position to be recognized in the financial statements. In addition to recognition, FIN 48 provides guidance concerning measurement, recognition, classification and disclosure of tax positions. FIN 48 is effective for fiscal years beginning after December 15, 2006; accordingly, W-H adopted FIN 48 effective as of January 1, 2007. Upon adoption, W-H recognized a cumulative effect adjustment of approximately $4.1 million as a reduction to retained earnings to increase the liability for unrecognized tax benefits. See Note 9 for more information.

In May 2007, the FASB issued FSP FIN 48-1, an amendment to FIN 48, which provides guidance on how an entity is to determine whether a tax position has effectively settled for purposes of recognizing previously unrecognized tax benefits. Specifically, this guidance states that an entity would recognize a benefit when a tax position is effectively settled using the following criteria: (1) the taxing authority has completed its examination including all appeals and administrative reviews; (2) the entity does not plan to appeal or litigate any aspect of the tax position; and (3) it is remote that the taxing authority would examine or reexamine any aspect of the tax position, assuming the taxing authority has full knowledge of all relevant information relative to making their assessment on the position. W-H applied this guidance in its adoption of FIN 48 and it will continue to apply this guidance as applicable in future periods.

Use of Estimates and Assumptions

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

Financial Instruments

W-H considers the fair value of all financial instruments (primarily long-term debt) not to be materially different from their carrying values at the end of each fiscal year based on management’s estimate of W-H’s ability to borrow funds under terms and conditions similar to those of W-H’s existing debt.

F-11

W-H ENERGY SERVICES, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

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. The interest rate swap agreements have been designated as and qualify as cash flow hedging instruments. The interest rate swap agreements are fully effective, and have resulted in no gain or loss due to ineffectiveness being recorded in net income in the Consolidated Statement of Operations and Comprehensive Income. W-H records the fair values of the interest rate swap agreements on its Consolidated Balance Sheet. See Note 7 to the Consolidated Financial Statements for more information.

With the exception of the operating leases on real property and automobile leases discussed in Note 8 to the Consolidated Financial Statements, W-H has no off-balance sheet debt or other off-balance sheet financing arrangements.

Accounting for Share-Based Compensation

W-H expenses the grant-date fair value of stock options and other equity-based compensation issued to employees. For awards with service conditions and a graded vesting schedule only, W-H recognizes compensation expense on a straight-line basis over the requisite service period for the entire award. W-H’s policy is to issue new shares of common stock to satisfy stock option exercises or grants of restricted shares.

The fair value of option awards will be estimated on the date of grant using a binomial lattice-based option valuation model, which incorporates ranges of assumptions for inputs. The assumptions will be determined as follows:

•  the expected volatility will be a blend of implied volatility based on market-traded options on W-H’s common stock and historical volatility of W-H’s stock over the contractual life of the options;

•  historical data will be used to estimate option exercise and employee termination behavior within the valuation model; separate groups of employees that have similar historical exercise behavior are considered separately for valuation purposes. The expected life of options granted will be derived from the output of the option valuation model and represents the period of time the options are expected to be outstanding; and

•  the risk-free interest rate will be based on the U.S. Treasury yield curve in effect at the time of grant for periods within the contractual life of the option.

Through December 31, 2005, W-H accounted for all stock-based employee compensation plans under the recognition and measurement provisions of APB Opinion No. 25, “Accounting for Stock Issued to Employees,” and related interpretations. Under APB No. 25, no stock-based employee costs are reflected in net income, as all options granted under those plans had an exercise price equal to or in excess of the market value of the underlying common stock on the date of grant.

F-12

W-H ENERGY SERVICES, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

The following table illustrates the effect on net income and earnings per share as if W-H had applied the fair value recognition provisions of SFAS No. 123, “Accounting for Stock-Based Compensation,” to stock-based employee compensation:

	Year Ended
	December 31, 2005
	(as adjusted)
Net income, as reported	$	49,610
Add: Total stock-based employee compensation expense included in reported net income, net of related tax effect		321
Deduct: Total stock-based employee compensation expense determined under fair value based method for all awards, net of related tax effect		(2,489	)
Pro forma net income	$	47,442
Earnings per share:
As reported:
Basic	$	1.76
Diluted	$	1.71
Pro forma:
Basic	$	1.69
Diluted	$	1.63
Weighted-average fair value per share of options granted	$	11.85

In calculating the amount of the deduction in the table above, the fair value of each option was estimated on the date of grant using the Black-Scholes option valuation model.

Foreign Currency Translations

The operations of foreign locations were translated into U.S. dollars based on the current exchange rates at the respective balance sheet dates and the weighted-average rates during each year for the statements of operations and comprehensive income. For the years ended December 31, 2007, 2006 and 2005, the translation adjustments were a loss of $0.1 million, a gain of $1.6 million, and a loss of $1.7 million, respectively, and are reflected as foreign currency translation adjustments in the consolidated statements of operations and comprehensive income.

Earnings per Share

Basic earnings per share is computed by dividing net income by the weighted average number of shares of common stock outstanding for the period. Diluted earnings per share is computed by dividing net income by the weighted average number of shares of common stock outstanding for the period as adjusted for the dilutive effect of stock options and restricted shares. For the years ended December 31, 2007 and 2006, there were no anti-dilutive stock options, therefore, the effect of all stock options were included in the diluted earnings per share calculation. For the year ended December 31, 2005, 2,382 shares were excluded from the calculation because the exercise price of the underlying stock options exceeded the average price of our common stock for the applicable period.

F-13

W-H ENERGY SERVICES, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

The following reconciles basic and diluted weighted average shares outstanding (in thousands):

	Year Ended December 31,
	2007		2006		2005
Basic weighted average shares outstanding		30,351		29,656		28,135
Dilutive effect of stock options and restricted shares		803		916		951
Diluted weighted average shares outstanding		31,154		30,572		29,086

Recent Accounting Pronouncements

In September 2006, the FASB issued SFAS No. 157, “Fair Value Measurements” (“SFAS No. 157”), which is intended to increase consistency and comparability in fair value measurements in financial statements by defining fair value, establishing a framework for measuring fair value and expanding disclosures about fair value measurements. SFAS No. 157 is effective for financial statements issued for fiscal years beginning after November 15, 2007, and interim periods within those fiscal years. W-H will adopt SFAS No. 157 on January 1, 2008 and does not anticipate it will have a material impact on its Consolidated Financial Statements. FSP FAS 157-2, “Effective Date of FASB Statement No. 157,” provides a one-year deferral of the effective date of FASB Statement 157, Fair Value Measurements, for nonfinancial assets and nonfinancial liabilities, except those that are recognized or disclosed in financial statements at fair value on a recurring basis.

In February 2007, the FASB issued SFAS No. 159, “The Fair Value Option for Financial Assets and Financial Liabilities (as amended)” (“SFAS No. 159”), which permits entities to choose to measure most financial instruments and certain other items at fair value. SFAS No. 159 is effective for financial statements issued for fiscal years beginning after November 15, 2007, and interim periods within those fiscal years. W-H will adopt SFAS No. 159 on January 1, 2008 and does not anticipate it will have a material impact on its Consolidated Financial Statements.

In December 2007, the FASB issued SFAS No. 141 (revised 2007), “Business Combinations” (“SFAS No. 141R”) to change how an entity accounts for the acquisition of a business. SFAS No. 141R carries forward the existing requirements to account for all business combinations using the acquisition method (formerly called the purchase method). In general, SFAS No. 141R will require acquisition-date fair value measurement of identifiable assets acquired, liabilities assumed and non-controlling interests in the acquiree. SFAS 141R will eliminate the current cost — based purchase method under SFAS No. 141. The new measurement requirements will result in the recognition of the full amount of acquisition-date goodwill, which includes amounts attributable to non-controlling interests. The acquirer will recognize in income any gain or loss on the remeasurement to acquisition-date fair value of consideration transferred or of previously acquired equity interests in the acquiree. The direct costs incurred to effect a business combination and the costs the acquirer expects to incur under a plan to restructure an acquired business will be charged to expense when incurred. SFAS No. 141R will also change the accounting for contingent consideration, in process research and development, contingencies, and restructuring costs. In addition, changes in deferred tax asset valuation allowances and acquired income tax uncertainties in a business combination that occur after the measurement period will impact income taxes under SFAS No. 141R. SFAS No. 141R is effective for fiscal years beginning on or after December 15, 2008 and interim periods within those years. W-H intends to adopt SFAS No. 141R effective January 1, 2009 and apply its provisions prospectively. W-H currently does not believe that the adoption of Statement No. 141R will have a significant effect on its financial statements; however, the effect is dependent upon whether W-H makes any future acquisitions and the specific terms of those acquisitions.

SFAS No. 141R amends the goodwill impairment test requirements in SFAS No. 142. For a goodwill impairment test as of a date after the effective date of SFAS No. 141R, the value of the reporting unit and the amount of implied goodwill, calculated in the second step of the test, will be determined in accordance with the measurement and recognition guidance on accounting for business combinations under SFAS No. 141R. This

F-14

W-H ENERGY SERVICES, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

change could effect the determination of what amount, if any, should be recognized as an impairment loss for goodwill recorded before the effective date of SFAS No. 141R. W-H has not determined what effect, if any, SFAS No. 141R will have on the results of its goodwill impairment testing subsequent to December 31, 2008.

3.   Acquisitions

On January 18, 2007, W-H acquired a distributor of drilling fluids products for cash consideration of approximately $4.9 million. On February 15, 2007, W-H acquired a directional drilling company for total consideration of approximately $14.7 million including cash of $10.8 million and 90,556 shares of W-H common stock.

In 2006, W-H acquired Mt. Pulaski Products, Inc., including its related companies (“Mt. Pulaski”). Mt. Pulaski supplies products used in various industrial applications including drilling fluids. Total consideration for this acquisition of approximately $10.4 million included $9.4 million in cash and 20,358 shares of W-H common stock.

In 2005, W-H acquired Madden Systems, Inc. (“Madden”) to enhance the technology of W-H’s operating companies that offer wireline logging services. Total consideration for this acquisition of $3.5 million included $2.5 million in cash and 31,422 shares of W-H common stock.

Unaudited proforma consolidated financial information for these acquisitions have not been included as the results were not material to current operations.

4.   Detail of Certain Balance Sheet Accounts

Activity in W-H’s allowance for doubtful accounts consists of the following (in thousands):

	Years Ended December 31,
	2007			2006			2005
Balance, beginning of year	$	5,596		$	5,243		$	3,890
Deductions for uncollectible receivables written off		(751	)		(1,090	)		(750	)
Additions charged to expense		1,851			1,443			2,103
Balance, end of year	$	6,696		$	5,596		$	5,243

The components of inventories are as follows (in thousands):

	December 31,
	2007			2006
Finished goods	$	73,999		$	66,069
Work-in-process		10,937			7,626
Raw materials and supplies		27,227			16,594
Inventory reserve		(9,579	)		(12,162	)
Inventories	$	102,584		$	78,127

F-15

W-H ENERGY SERVICES, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

Net property and equipment consists of the following (in thousands):

	December 31,
	2007			2006
Rental equipment	$	515,903		$	426,129
Machinery and equipment		104,502			71,942
Automobiles and trucks		36,138			30,396
Office equipment, furniture and fixtures		11,453			9,151
Construction-in-progress		—			10,124
Buildings and leasehold improvements		76,821			33,643
Total		744,817			581,385
Less — accumulated depreciation		(295,904	)		(237,889	)
Property and equipment, net	$	448,913		$	343,496

Construction-in-progress during 2006 related to the construction of the Rocky Mountain region facilities completed during 2007. Depreciation expense charged to operations totaled approximately $78.2 million, $61.8 million and $55.4 million for the years ended December 31, 2007, 2006 and 2005, respectively.

Other intangibles, included in other assets, net, consist of the following (in thousands):

	December 31,						Life in
	2007			2006			Years
License agreements and patents	$	6,931		$	6,784			4-17
Non-compete agreements		3,097			2,905			3-5
Trade secret technology		2,100			2,100			—
Trade name		530			530			—
Total		12,658			12,319
Less — accumulated amortization		(7,966	)		(6,991	)
Other intangibles, net	$	4,692		$	5,328

Amortization expense charged to operations totaled approximately $1.1 million, $0.9 million and $1.2 million for the years ended December 31, 2007, 2006 and 2005, respectively.

Estimated aggregate amortization of intangible assets (in thousands) for the next 5 years is as follows:

	2008		2009		2010		2011		2012
Amortization	$	733	$	673	$	380	$	94	$	10

F-16

W-H ENERGY SERVICES, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

Accrued liabilities consist of the following (in thousands):

	December 31,
	2007		2006
			(as adjusted)
Accrued compensation and benefits	$	29,179	$	25,415
Accrued taxes		6,578		14,851
Accrued insurance		3,483		1,775
Accrued professional fees		1,816		2,332
Other accrued liabilities		21,003		20,386
Accrued liabilities	$	62,059	$	64,759

5.   Goodwill:

The changes in the carrying amount of goodwill for each of W-H’s reportable business segments for the years ended December 31, 2006 and 2007 were as follows (in thousands):

	Drilling			Completion			Total
Balances as of January 1, 2006	$	38,585		$	74,984		$	113,569
Goodwill acquired during the period		5,807			—			5,807
Goodwill adjustments		(2	)		176			174
Balances as of December 31, 2006		44,390			75,160			119,550
Goodwill acquired during the period		15,257			—			15,257
Goodwill adjustments		1,214			(93	)		1,121
Balances as of December 31, 2007	$	60,861		$	75,067		$	135,928

6.   Credit Facility:

W-H maintains a revolving credit facility with certain lenders to provide for its cash, liquidity and other borrowing needs. The credit facility provides for aggregate borrowings of up to $375.0 million and matures on May 5, 2010. As of December 31, 2007, W-H had an outstanding loan balance of $150.0 million and approximately $10.6 million in letters of credit issued under its credit facility, resulting in an available borrowing capacity on such date of approximately $214.4 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. Including the effect of the interest rate swap agreements described in Note 7, W-H was incurring interest at a weighted average rate of approximately 5.2% on its total outstanding borrowings as of December 31, 2007.

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. As of December 31, 2007, W-H is in compliance with the financial ratios and other limitations of the credit facility.

F-17

W-H ENERGY SERVICES, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

7.   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 equal to three month LIBOR and pays interest at a fixed rate of 4.24%. The interest rate swap agreements have been designated as and qualify as cash flow hedging instruments. The interest rate swap agreements are fully effective, and have resulted in no gain or loss due to ineffectiveness being recorded in net income in the Consolidated Statement of Operations and Comprehensive Income. For the years ended December 31, 2007, 2006 and 2005, W-H recognized net gains of $1.7 million and $1.2 million, and net losses of $0.5 million, respectively, to interest expense resulting from the impact of the swap agreements. W-H has recorded the fair value of the interest rate swap agreements on its Consolidated Balance Sheet, which was in aggregate a liability of $1.5 million at December 31, 2007 and an asset of $3.7 million at December 31, 2006 based on the fair value of the instruments. As of December 31, 2007, W-H anticipates that approximately $0.1 million of the liability will be recognized as losses resulting in additions to interest expense during 2008.

8.   Commitments and Contingencies

Operating Leases

W-H leases certain real property and automobiles under operating leases that expire at various dates through 2014. Additionally, W-H rents various equipment under short-term, cancelable arrangements. Rental expense under operating leases and short-term rentals was approximately $42.6 million, $37.7 million and $25.5 million for the years ended December 31, 2007, 2006 and 2005, respectively. Future minimum lease payments under non-cancelable operating leases are as follows (in thousands):

For the Year Ended December 31,
2008	$	9,980
2009		8,278
2010		6,654
2011		5,837
2012		4,375
Thereafter		10,035
Total	$	45,159

Employment Agreements

W-H has entered into employment agreements with its corporate officers. Under these agreements, each officer receives a set base salary, subject to adjustment, an annual discretionary bonus based on specific objectives to be determined by the compensation committee, an automobile allowance and certain fringe benefits as may be available to such executive officers. The agreements are generally for original terms of two to three years, with certain automatic renewal provisions. The agreements also contain a termination clause, which requires a two-year payment (2.5 years in the case of W-H’s Chief Executive Officer) based on the officer’s salary and historical bonus amounts received, in the event of termination without cause or certain change of control events.

W-H also has employment agreements with certain non-corporate officers and other key employees. The agreements are for original terms of two to three years and provide for severance pay upon the occurrence of certain events including involuntary termination.

Litigation

W-H is from time to time a party or otherwise subject to legal proceedings, claims, investigations and other proceedings in the ordinary course of its business. These matters typically involve tort, workers compensation, employment, commercial and infringement and other intellectual property claims. Where appropriate, W-H makes

F-18

W-H ENERGY SERVICES, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

provision for a liability with respect to these claims in its financial statements in accordance with generally accepted accounting principles. These provisions are reviewed periodically and adjusted to reflect the impact of negotiations, settlements, rulings, advice of legal counsel and events pertaining to a particular case. Litigation is inherently unpredictable. Based upon information currently available, W-H believes that its ultimate liability with respect to these proceedings and claims will not materially affect its consolidated results of operations or financial position.

9.   Income Taxes

The components of W-H’s income tax provision are as follows (in thousands):

	Years Ended December 31,
	2007			2006			2005
Current
U.S. federal and state income taxes	$	66,202		$	53,495		$	26,114
Foreign		6,598			6,873			2,204
Total current		72,800			60,368			28,318
Deferred
U.S. federal and state income taxes		13,464			14,059			4,446
Foreign		(1,071	)		(3,215	)		(1,156	)
Total deferred		12,393			10,844			3,290
Total provision	$	85,193		$	71,212		$	31,608

The United States and foreign components of income before income taxes are as follows (in thousands):

	Years Ended December 31,
	2007		2006		2005
United States	$	213,629	$	182,760	$	78,240
Foreign		17,975		4,058		2,978
Total	$	231,604	$	186,818	$	81,218

The total provision for income taxes differs from an amount computed at the statutory federal income tax rate as follows (in thousands):

	Years Ended December 31,
	2007			2006			2005
Federal income tax at statutory rate of 35%	$	81,061		$	65,386		$	28,426
State income taxes, net of federal benefit		5,334			4,693			2,702
Other		174			144			(70	)
Foreign income taxes, net of credits		268			(653	)		(436	)
Nondeductible items		1,155			1,120			1,233
Increase (decrease) in valuation allowance		(1,507	)		1,362			334
Credits		(583	)		(840	)		(581	)
FIN 48 adjustments		(299	)		—			—
Change in tax laws		(410	)		—			—
Total provision	$	85,193		$	71,212		$	31,608

F-19

W-H ENERGY SERVICES, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

The significant components of the deferred tax assets and liabilities are as follows (in thousands):

	December 31,
	2007			2006
Deferred tax assets —
Net operating loss carry-forwards	$	4,333		$	4,594
Accruals not currently deductible for tax purposes		5,770			6,932
Write-off of bad debts		1,858			1,413
Inventory costs capitalized for tax purposes		803			506
Share-based compensation		2,345			1,371
Credit carry forwards		160			1,635
Other		3,464			2,956
Total gross deferred tax assets		18,733			19,407
Less — valuation allowance		(1,726	)		(3,233	)
Net deferred tax assets		17,007			16,174
Deferred tax liabilities —
Tax depreciation in excess of book depreciation		(53,484	)		(41,540	)
Tax amortization in excess of book amortization		(16,986	)		(14,497	)
Other		(3,212	)		(4,756	)
Total gross deferred tax liabilities		(73,682	)		(60,793	)
Net deferred tax liabilities	$	(56,675	)	$	(44,619	)

U.S. deferred income taxes and related foreign dividend withholding taxes have not been provided on the undistributed earnings and profits of the company’s foreign subsidiaries. W-H considers such earnings to be permanently reinvested outside the United States. It is not practicable to estimate the amount of deferred income taxes associated with these unremitted earnings.

As of December 31, 2007, W-H had deferred tax assets of $4.3 million relating to $1.3 million of state net operating loss (“NOL”) carry-forwards and $3.0 million of foreign NOL carry-forwards. The foreign NOL’s have no expiration date. State NOL carry-forwards expire beginning in 2008 until 2021. The NOL and credit carry-forwards can be used to reduce W-H’s federal, state and foreign income taxes payable in future years. W-H’s ability to realize the entire benefit of its deferred tax assets requires that W-H achieve certain future earnings levels prior to the expiration of its NOL carry-forwards.

Valuation allowances have been established for uncertainties in realizing the benefit of tax loss and credit carry-forwards. While W-H expects to realize the net deferred tax assets, changes in future taxable income or in tax laws may alter this expectation. W-H could be required to record an additional valuation allowance against certain or all of its remaining deferred tax assets if market conditions deteriorate or future earnings are below current estimates. As of December 31, 2007, the valuation allowance relates principally to foreign NOL’s. The valuation allowance decreased approximately $1.5 million in 2007, increased $1.4 million in 2006 and increased $0.3 million in 2005. The change related principally to amounts provided on foreign NOL’s in jurisdictions where management does not believe W-H will be able to utilize the losses in future periods.

W-H is subject to periodic audits by the Internal Revenue Service and other foreign, state and local taxing authorities. Currently, W-H is involved in various federal, state and foreign income tax examinations by tax authorities for years ranging from 2000 through 2005. These audits may challenge certain of W-H’s tax positions such as the timing and amount of deductions and allocation of taxable income to the various tax jurisdictions.

F-20

W-H ENERGY SERVICES, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

Income tax contingencies are accounted for in accordance with the provisions FIN 48, and may require significant management judgment in estimating final outcomes. Actual results could materially differ from these estimates and could significantly affect the effective tax rate and cash flows in future years.

Prior to adoption of FIN 48, W-H recognized liabilities for anticipated tax issues based on its estimate of whether, and the extent to which, additional taxes will be due. These liabilities were adjusted accordingly as information on the associated tax issues becomes available. As of December 31, 2006, amounts reserved for such contingencies were $6.2 million.

W-H adopted the provisions of FIN 48 effective as of January 1, 2007. Upon adoption, W-H recognized a cumulative effect adjustment of approximately $4.1 million as a reduction to retained earnings to increase the liability for unrecognized tax benefits. A reconciliation of the beginning and ending amount of the unrecognized tax benefits is as follows (in thousands):

Balance at January 1, 2007	$	13,560
Increases based on tax positions taken in the current year		706
Increases based on tax positions taken in prior years		50
Decreases due to lapse of applicable statute of limitations		(1,125	)
Decreases based on tax positions taken in prior years		(525	)
Decreases due to settlements with tax authorities		(158	)
Balance at December 31, 2007	$	12,508

As of December 31, 2007, W-H had unrecognized tax benefits of $12.5 million, of which $7.4 million would have an impact on the annual effective tax rate upon recognition. Of the remaining balance, W-H had $2.9 million of various tax positions for which the ultimate deductibility is highly certain but for which there is uncertainty about the timing of such deductibility. Because of the impact of deferred tax accounting, other than interest and penalties, the disallowance of the shorter deductibility period would not affect the annual effective tax rate but would accelerate the payment of cash to the taxing authority to an earlier period.

W-H recognizes interest and penalties related to unrecognized tax benefits in income tax expense. This is an accounting policy election that is consistent with W-H’s historical policy. As of January 1, 2007, W-H had recorded approximately $1.4 million for the payment of tax-related interest and penalties including amounts recorded upon adoption of FIN 48. For the year ended December 31, 2007, W-H recorded approximately $1.4 million and $0.1 million for the payment of tax-related interest and penalties, respectively. To the extent interest and penalties are not assessed with respect to uncertain tax positions, amounts accrued will be reduced and reflected as a reduction of the overall income tax provision.

It is reasonably possible that within the next 12 months, W-H will see a decrease of approximately $2.2 million in unrecognized tax benefits and a related $0.3 million of interest and penalties a result of the expiration of various applicable statute of limitations and the settlement of various federal, state, and international audits.

10.   Related-Party Transactions

In July 2007, one of W-H’s subsidiaries purchased real property from entities that were owned by a W-H officer and an immediate relative of such officer. The purchase price of the property totaled approximately $3.6 million. That subsidiary had previously leased such property for its operations. For the years ended December 31, 2007, 2006 and 2005, W-H paid $63,000, $108,000, and $108,000, respectively, for such annual lease costs.

An additional W-H subsidiary leases its facilities from a company that is partially owned by a W-H officer. For the years ended December 31, 2007, 2006 and 2005, W-H paid the company approximately $378,000, $372,000 and $312,000, respectively for such annual lease costs.

F-21

W-H ENERGY SERVICES, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

W-H’s Chairman, President and Chief Executive Officer is the owner of a publishing company which made payments to W-H of approximately $14,000, $59,000 and $42,000 for the years ended December 31, 2007, 2006 and 2005, respectively, primarily for rental of office space.

11.   Shareholders’ Equity

Stock options

On May 10, 2006, W-H’s shareholders approved W-H’s 2006 Stock Awards Plan (the “2006 Plan”). Under the 2006 Plan, W-H may grant equity-based awards including stock options, stock appreciation rights, restricted stock, restricted stock units, performance units and other stock-based awards. An aggregate of 1,100,000 shares of W-H’s common stock are reserved for issuance under the plan, subject to adjustments as described in the plan. The number of shares reserved for issuance will be reduced only by the number of shares of common stock delivered in payment or settlement of awards. Any shares of common stock issued in connection with restricted stock, restricted stock units, performance units or other full value awards will count against the limit of reserved shares as 1.7 shares of common stock for every one share of common stock issued. Shares of common stock issued in connection with other types of awards will be counted against the limit of reserved shares as one share of common stock for every one share of common stock issued. Each award granted under the 2006 Plan is subject to such terms and conditions as the compensation committee of W-H’s Board of Directors may approve.

Under the 2006 Plan, W-H is no longer permitted to issue new awards under its 1997 Stock Option Plan (the “1997 Plan”). As of December 31, 2007, options to purchase 1,220,138 shares of W-H’s common stock were outstanding under the 1997 Plan. The options currently outstanding under the 1997 Option Plan vest ratably over a four-year period, commencing on the grant date, in 25% increments after each year of service has been completed, and will expire ten years from their respective grant dates. The terms of each option also provide that if an optionee’s employment terminates for any reason, the option may be exercised during the three-month period following such termination, but only to the extent vested at the time of such termination.

On March 29, 1999, prior to its initial public offering, W-H issued options to purchase 900,900 shares of W-H’s common stock to its chief executive officer under a separate non-statutory option plan. These options have a 10-year term and an exercise price of $4.55 per share. As of December 31, 2007, the remaining unexercised options to purchase 345,000 shares of common stock were vested.

As of December 31, 2007, there was approximately $2.6 million of total unrecognized compensation cost related to nonvested stock option awards that is expected to be recognized over a weighted-average period of 1.3 years. The intrinsic value for stock options is defined as the difference between the current market value and the grant price. During the years ended December 31, 2007 and 2006, cash received from options exercised was approximately $6.8 million and $17.4 million, respectively, and the excess tax benefit from share-based compensation totaled approximately $5.6 million and $13.3 million, respectively.

F-22

W-H ENERGY SERVICES, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

A summary of W-H’s stock option activity for the three years ended December 31, 2007 is as follows:

						Weighted Average		Aggregate
				Weighted		Remaining		Intrinsic Value
	Number of			Average Price		Contractual Term		(Amounts in
	Options			Per Share		(Years)		thousands)
Outstanding December 31, 2004		3,745,192		$	14.43
Granted		503,500			23.27
Exercised		(990,045	)		13.09			$	17,861
Expired/canceled		(90,981	)		20.77
Outstanding December 31, 2005		3,167,666			16.07
Granted		—			—
Exercised		(1,197,137	)		14.58				39,335
Expired/canceled		(18,625	)		20.84
Outstanding December 31, 2006		1,951,904			16.94
Granted		—
Exercised		(380,628	)		17.81				15,235
Expired/canceled		(6,138	)		17.22
Outstanding December 31, 2007		1,565,138			16.76		4.6		61,737
Exercisable at December 31, 2007		1,209,013			15.35		3.9		49,401

The following table summarizes information about stock options outstanding at December 31, 2007:

	Options Outstanding						Options Exercisable
	Outstanding		Weighted Average		Weighted		Exercisable		Weighted
	as of		Remaining		Average		as of		Average
Range of Exercise	December 31,		Contractual Life		Exercise		December 31,		Exercise
Prices	2007		(in Years)		Price		2007		Price
$  2.21- 5.30		384,738		1.27	$	4.57		384,738	$	4.57
15.28-21.75		563,425		5.44		18.11		444,050		18.09
22.88-31.39		616,975		5.99		23.14		380,225		23.05
2.21- 31.39		1,565,138		4.63		16.76		1,209,013		15.35

Restricted Stock

On February 7, 2007, W-H awarded a total of 52,000 shares of restricted stock under its 2006 Stock Awards Plan to certain employees, including 20,000 shares awarded to W-H’s Chairman, President and Chief Executive Officer. The fair value of the restricted stock issued was approximately $2.3 million and is being recognized as compensation expense over the vesting periods ranging from 31 months to 48 months.

On May 9, 2007, W-H awarded a total of 15,000 shares of restricted stock under its 2006 Stock Awards Plan to its independent directors. The fair value of the restricted stock issued was approximately $0.9 million and is being recognized as compensation expense over the 48 month vesting period.

For the years ended December 31, 2007, 2006 and 2005, W-H recognized $2.5 million, $1.2 million and $0.5 million in compensation expense relating to restricted stock awards.

F-23

W-H ENERGY SERVICES, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

A summary of W-H’s restricted stock from December 31, 2006 to December 31, 2007 is as follows:

				Weighted
				Average
	Number of			Fair Value
	Shares			Per Share
Nonvested balance at December 31, 2006		142,000		$	49.51
Granted		67,000			47.91
Vested		(60,916	)		39.16
Forfeited		—			—
Nonvested balance at December 31, 2007		148,084			53.05

The total grant-date fair value of restricted stock vested during the year ended December 31, 2007 was approximately $2.4 million. As of December 31, 2007, there was approximately $6.4 million of total unrecognized compensation cost related to nonvested restricted stock awards that is expected to be recognized over a weighted-average period of 2.6 years.

12.   401(k) Plan

W-H maintains a 401(k) plan that enables employees to defer up to specified percentages of their annual compensation and contribute such amount to the plan. W-H may contribute a matching amount for each participant equal to a discretionary percentage determined annually by W-H. W-H may also contribute additional amounts at its sole discretion. W-H matching contributions were approximately $7.2 million, $4.8 million and $2.7 million for the years ended December 31, 2007, 2006 and 2005, respectively.

13.   Operating 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: (1) drilling related products and services and (2) 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 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 international areas. This segment includes the following business lines: (1) logging-while-drilling; (2) measurement-while-drilling; (3) directional drilling; (4) down-hole drilling motors; (5) drilling fluids and (6) rental tools.

Completion and Workover Related Products and Services

The completion and workover segment provides products and services primarily to customers onshore in the United States and offshore in the Gulf of Mexico. These products and services include: (1) cased-hole wireline logging, perforating, tubing conveyed perforating and associated rental equipment; (2) coiled tubing; (3) completion fluids and (4) rental tools.

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 income

F-24

W-H ENERGY SERVICES, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

(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 year ended December 31, 2007:

	Drilling		Completion		Corporate			Total
Revenues	$	738,413	$	388,594	$	—		$	1,127,007
Operating Income		159,675		99,928		(19,644	)		239,959
Depreciation & Amortization		48,452		30,603		231			79,286
Total assets		628,608		334,586		43,836			1,007,030
Capital expenditures		121,858		77,461		769			200,088

As of and for the year ended December 31, 2006 (as adjusted):

	Drilling		Completion		Corporate			Total
Revenues	$	563,945	$	330,809	$	—		$	894,754
Operating Income		116,420		96,295		(16,961	)		195,754
Depreciation & Amortization		38,563		23,908		242			62,713
Total assets		480,962		287,545		55,774			824,281
Capital expenditures		92,281		61,412		97			153,790

As of and for the year ended December 31, 2005 (as adjusted):

	Drilling		Completion		Corporate			Total
Revenues	$	409,155	$	225,206	$	—		$	634,361
Operating Income		52,052		51,761		(11,818	)		91,995
Depreciation & Amortization		36,136		20,253		250			56,639
Total assets		369,930		228,169		23,876			621,975
Capital expenditures		54,710		34,154		103			88,967

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

	For the Years Ended December 31,
	2007		2006		2005
Revenues:
United States	$	1,000,138	$	806,468	$	564,439
North Sea		61,173		39,269		33,196
Other		65,696		49,017		36,726
Total	$	1,127,007	$	894,754	$	634,361

	For the Years Ended December 31,
	2007		2006			2005
Operating Income:				(as adjusted	)		(as adjusted	)
United States	$	215,946	$	186,573		$	87,183
North Sea		13,271		4,202			1,720
Other		10,742		4,979			3,092
Total	$	239,959	$	195,754		$	91,995

F-25

W-H ENERGY SERVICES, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

The following presents property and equipment, net, by geographic region (in thousands):

	As of December 31,
	2007		2006
United States	$	404,111	$	306,357
North Sea		13,588		13,986
Other		31,214		23,153
Total	$	448,913	$	343,496

14.   Interim Financial Information (Unaudited)

The following is a summary of consolidated interim information for each of the quarters in the years ended December 31, 2007 and 2006 (amounts in thousands, except per share data):

	Three Months Ended
	March 31,		June 30,		September 30,		December 31,
2007
Revenues	$	272,887	$	277,752	$	282,992	$	293,376
Operating income		59,920		62,755		56,693		60,591
Net income		35,824		39,074		34,712		36,801
Earnings per common share:
Basic		1.19		1.29		1.14		1.21
Diluted		1.16		1.25		1.11		1.18

	Three Months Ended
	March 31,		June 30,		September 30,		December 31,
2006
Revenues	$	201,809	$	215,755	$	238,851	$	238,339
Operating income		40,226		46,630		54,458		54,440
Net income		23,327		28,466		31,513		32,300
Earnings per common share:
Basic		0.80		0.96		1.05		1.08
Diluted		0.77		0.93		1.02		1.05

15.   Subsequent Events

On February 1, 2008, W-H awarded a total of 140,500 shares of restricted stock under the 2006 Plan to certain executives and employees. The fair value of the restricted stock issued was approximately $7.9 million and will be recognized as compensation expense over the vesting period of four years.

On February 22, 2008, W-H acquired a company that provides drilling jars and related parts to the oil and natural gas industry for cash consideration of approximately $47.5 million.

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EXHIBIT INDEX

Exhibit
Number				Description
	3	.1	—	Restated Articles of Incorporation of the Company (incorporated by reference to Exhibit 3.1 of the Company’s Registration Statement No. 333-43411 on Form S-1)
	3	.2	—	Second Amended and Restated Bylaws of the Company (incorporated by reference to Exhibit 3.2 of the Company’s Current Report on Form 8-K filed with the Commission on October 18, 2007)
	3	.3	—	Statement of Designations of Series A Junior Participating Preferred Stock of the Company (included as Exhibit A to the Rights Agreement (Exhibit 4.2 hereto)) setting forth the terms of the Series A Junior Participating Preferred Stock, par value $0.01 per share
	4	.1	—	Specimen Common Stock certificate (incorporated by reference to Exhibit 4.1 of the Company’s Registration Statement on Form 8-A filed with the SEC on July 28, 2003)
	4	.2	—	Rights Agreement, dated as of May 31, 2002, between the Company and Computershare Trust Company, Inc., as Rights Agent (incorporated by reference to Exhibit 4.2 of to the Company’s Registration Statement on Form 8-A filed with the SEC on July 28, 2003)
	9	.1	—	Amended and Restated Stockholders Agreement, dated March 26, 1999 (incorporated by reference to Exhibit 9.1 of the Company’s Registration Statement No. 333-43411 on Form S-1)
	10	.1*	—	Amended and Restated Employment Agreement of Kenneth T. White, Jr., effective as of January 1, 2008
	10	.2*	—	Amended and Restated Employment Agreement of Jeffrey L. Tepera, effective as of January 1, 2008
	10	.3*	—	Amended and Restated Employment Agreement of William J. Thomas III, effective as of January 1, 2008
	10	.4	—	W-H Energy Services, Inc. 1997 Stock Option Plan as restated, effective as of May 12, 2004 (incorporated by reference to Appendix B of the Company’s Definitive Proxy Statement on Schedule 14A, filed April 6, 2004)
	10	.5	—	Non-Statutory Stock Option Agreement for Kenneth T. White, Jr., dated March 29, 1999 (incorporated by reference to Exhibit 10.5 of the Company’s Registration Statement No. 333-43411 on Form S-1)
	10	.6	—	Form of Indemnification Agreement (incorporated by reference to Exhibit 10.8 of the Company’s Registration Statement No. 333-43411 on Form S-1)
	10	.7	—	Amended and Restated TJC Transaction Advisory Agreement with TJC Management Corp., dated March 26, 1999 (incorporated by Reference to Exhibit 10.11 of the Company’s Registration Statement No. 333-43411 on Form S-1)
	10	.8	—	Credit Agreement, dated as of June 30, 2004, among the Company, Various Financial Institutions, and Wells Fargo Bank, N.A. (incorporated by reference to Exhibit 10.8 to the Company’s Quarterly Report on Form 10-Q for the quarterly period ended June 30, 2004)
	10	.8(a)	—	First Amendment to Credit Agreement dated as of May 5, 2005 among the Company; Wells Fargo Bank, National Association, as Administrative Agent, Co-Lead Arranger and Sole Book Running Manager; JP Morgan Chase Bank, N.A., as Co-Lead Arranger and Co-Syndication Agent; Comerica Bank, as Co-Syndication Agent; The Bank of Nova Scotia, as Co-Documentation Agent; Wachovia Bank, N.A., as Co-Documentation Agent; Citibank Texas, N.A., as Managing Agent; and various other financial institutions parties thereto (incorporated by reference to Exhibit 10.8(a) to the Company’s Quarterly Report on Form 10-Q for the quarterly period ended March 31, 2005)

Exhibit
Number				Description
	10	.8(b)	—	Second Amendment to Credit Agreement dated as of February 3, 2006 among the Company; Wells Fargo Bank, National Association, as Administrative Agent, Co-Lead Arranger and Sole Book Running Manager; JP Morgan Chase Bank, N.A., as Co-Lead Arranger and Co-Syndication Agent; Comerica Bank, as Co-Syndication Agent; The Bank of Nova Scotia, as Co-Documentation Agent; Wachovia Bank, N.A., as Co-Documentation Agent; Citibank Texas, N.A., as Managing Agent; and various other financial institutions parties thereto (incorporated by reference to Exhibit 10.8(b)of the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2005)
	10	.8(c)*	—	Third Amendment to Credit Facility dated as of December 28, 2007 among the Company; Wells Fargo Bank, National Association, as Administrative Agent, Co-Lead Arranger and Sole Book Running Manager; JP Morgan Chase Bank, N.A., as Co-Lead Arranger and Co-Syndication Agent; Comerica Bank, as Co-Syndication Agent; The Bank of Nova Scotia, as Co-Documentation Agent; Wachovia Bank, N.A., as Co-Documentation Agent; Citibank Texas, N.A., as Managing Agent; and various other financial institutions parties thereto.
	10	.9*	—	Amended and Restated Employment Agreement of Glen J. Ritter, effective as of January 1, 2008
	10	.10*	—	Amended and Restated Employment Agreement of Ernesto Bautista, III, effective as of January 1, 2008
	10	.11*	—	Amended and Restated Employment Agreement of Stuart J. Ford, effective as of January 1, 2008
	10	.12	—	Restricted Stock Agreement between the Company and Kenneth T. White, Jr. dated as of May 12, 2004 (incorporated by reference to Exhibit 10.12 to the Company’s Quarterly Report on Form 10-Q for the quarterly period ended June 30, 2004)
	10	.13	—	W-H Energy Services, Inc. 2006 Stock Awards Plan, effective as of May 10, 2006 (incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K filed with the Commission on May 10, 2006)
	10	.14	—	Form of non-qualified stock option award agreement (incorporated by reference to Exhibit 10.2 to the Company’s Current Report on Form 8-K filed with the Commission on May 10, 2006)
	10	.15	—	Form of restricted stock award agreement (incorporated by reference to Exhibit 10.3 to the Company’s Current Report on Form 8-K filed with the Commission on May 10, 2006)
	21	.1*	—	List of Significant Subsidiaries of the Company
	23	.1*	—	Consent of Grant Thornton LLP
	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 to 18 U.S.C. Section 1350
	32	.2*	—	Certification of Chief Financial Officer of W-H Energy Services, Inc. pursuant to 18 U.S.C. Section 1350

* filed herewith

EX-10.1

Exhibit 10.1

AMENDED AND RESTATED EMPLOYMENT AGREEMENT

     THIS AMENDED AND RESTATED EMPLOYMENT AGREEMENT (as amended from time to time, this “Agreement”), effective as of January 1, 2008, is between W-H Energy Services, Inc., a Texas corporation (“Company”), and Kenneth T. White, Jr. (“Executive”).

W I T N E S S E T H:

     WHEREAS, Company and Executive are currently parties to an Employment Agreement effective as of October 1, 2003, as amended by a First Amendment thereto effective as of October 27, 2006 and a Second Amendment thereto executed as of March 30, 2007 (such Employment Agreement, as so amended, the “Original Employment Agreement”); and

     WHEREAS, Company and Executive desire to amend and restate the Original Employment Agreement to reflect therein the amendments thereto effected by the First Amendment thereto and the Second Amendment thereto and to make certain other amendments, including those required by Section 409A of the Internal Revenue Code of 1986, as amended (the “Code”).

     NOW, THEREFORE, for and in consideration of the mutual promises, covenants and obligations contained herein, Company and Executive agree as follows:

ARTICLE 1: EMPLOYMENT AND DUTIES

     1.1 Employment; Effective Date. Effective as of October 1, 2003 (the “Effective Date”), and continuing for the period of time set forth in Article 2 of this Agreement, Company agrees to employ Executive and Executive agrees to be employed by Company, subject to the terms and conditions of this Agreement.

     1.2 Positions. From and after the Effective Date, Company shall employ Executive in the position of President and Chief Executive Officer of Company, or in such other positions as the parties mutually may agree.

     1.3 Duties and Services. Executive agrees to serve in the position referred to in paragraph 1.2 and to perform diligently and to the best of his abilities the duties and services appertaining to such offices, as well as such additional duties and services appropriate to such offices which the parties mutually may agree upon from time to time. Executive’s employment shall also be subject to the policies maintained and established by Company that are of general applicability to Company’s executive employees, as such policies may be amended from time to time.

     1.4 Other Interests. Executive agrees, during the period of his employment by Company, to devote his primary business time, energy and best efforts to the business and affairs of Company and its affiliates and not to engage, directly or indirectly, in any other business or businesses, whether or not similar to that of Company, except with the consent of the Board of Directors. The foregoing notwithstanding, the parties recognize and agree that Executive may engage in other business activities that do not conflict with the business and affairs of Company

or interfere with Executive’s performance of his duties hereunder, which shall be at the sole determination of the Company’s Board of Directors.

     1.5 Duty of Loyalty. Executive acknowledges and agrees that Executive owes a fiduciary duty of loyalty to act at all times in the best interests of Company. In keeping with such duty, Executive shall make full disclosure to Company of all business opportunities pertaining to Company’s business and shall not appropriate for Executive’s own benefit business opportunities concerning Company’s business.

     1.6 Option To Revise Employment Duties. Notwithstanding anything herein to the contrary, Executive may, at any time during the term hereof, with the consent of the Board of Directors, resign from his position as Executive and Chief Executive Officer of the Company (a “Partial Resignation”). If Executive desires to exercise his Partial Resignation right, he shall provide written notice thereof to the Board of Directors no less than 180 days prior to the effective date of such Partial Resignation, which effective date shall be set forth in such notice. The Board of Directors shall have 90 days from the date of receipt of such notice to consent to such request for Partial Resignation. If the Board of Directors does not respond to such request for Partial Resignation or if it shall otherwise not provide its consent thereto, the Executive shall continue to serve as President and Chief Executive Officer of the Company and Chairman of the Board of Directors pursuant hereto, subject to Executive’s rights set forth in Section 2.3 hereof. If the Board of Directors consents to such Partial Resignation, it may specify an earlier effective date for such Partial Resignation, and, if it does so, such date specified by the Board of Directors shall be the effective date of such Partial Resignation. Between the date of the Board of Directors’ consent to a Partial Resignation and the effective date thereof, Executive shall cooperate with and assist the Company in making appropriate and necessary arrangements occasioned by Executive’s exercise of his Partial Resignation right. Following the effective date of such Partial Resignation, (i) Executive shall continue to be an employee of the Company and shall continue to have all of the rights provided to Executive herein, (ii) Executive shall continue to serve as Chairman of the Company’s Board of Directors, (iii) this Agreement shall continue in full force and effect as provided herein and (iv) Executive shall continue a level of bona fide services rendered with respect to his employment at a level that is at least 50% of the average level of services that he has provided to Company during the previous 36 months (and, consequently, a Partial Resignation shall not constitute a separation from service for purposes of Section 409A of the Code).

ARTICLE 2: TERM AND TERMINATION OF EMPLOYMENT

     2.1 Term. Unless sooner terminated pursuant to other provisions hereof, Company agrees to employ Executive for the period beginning on the Effective Date and ending on September 30, 2009. If Executive exercises the Partial Resignation right pursuant to paragraph 1.6, the term of this Agreement shall be extended automatically for three (3) years (the “Option Term”), such Option Term to commence on the effective date of such Partial Resignation and to end on the third anniversary of such date.

     2.2 Company’s Right to Terminate. Notwithstanding the provisions of paragraph 2.1, Company shall have the right to terminate Executive’s employment under this Agreement at any time for any of the following reasons:

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     (i) upon Executive’s becoming incapacitated by accident, sickness or other circumstance which, in the reasonable opinion of a physician selected by Company, renders him mentally or physically incapable of performing the duties and services required of him hereunder;

     (ii) for cause, which for purposes of this Agreement shall mean Executive (A) has willfully breached any of his duties and obligations hereunder resulting in materially adverse consequences to Company or any of its affiliates, (B) has misappropriated funds or property of Company or any of its affiliates, or (C) has engaged in conduct that is materially adverse to the interests of Company or any of its affiliates; or

     (iii) for any other reason whatsoever, in the sole discretion of the Board of Directors.

     2.3 Executive’s Right to Terminate. Notwithstanding the provisions of paragraph 2.1, Executive shall have the right to terminate his employment under this Agreement for any of the following reasons:

     (i) within 60 days of the initial existence of (A) a material breach by Company of any material provision of this Agreement, (B) a material decrease in Executive’s base salary; (C) a material decrease in the duties and responsibilities assigned to Executive as compared to the positions referred to in paragraph 1.2; or (D) Executive being required to relocate to a site more than 25 miles from his present business address; provided, however, that, prior to termination pursuant to clause (A), Company shall give Executive written notice of the grounds for termination and Executive shall have ten days after receipt thereof to cure same;

     (ii) at any time after there is a Change in Control (as such term is defined in paragraph 6.1); or

     (iii) at any time for any other reason whatsoever, in the sole discretion of Executive;

provided, however, that in the case of a termination under paragraph 2.3(i), (A) Executive must provide Company with written notice of the event giving rise to the right of termination within 60 days of the initial existence thereof, and Company shall have 30 days to remedy the same and (B) in no event may the effective date of Executive’s termination be more than 24 months following the initial existence of the event giving rise to the right of termination.

     2.4 Notice of Termination. If Company or Executive desires to terminate Executive’s employment hereunder at any time prior to expiration of the term of employment as provided in paragraph 2.1, it or he shall do so by giving written notice to the other party that it or he has elected to terminate Executive’s employment hereunder and stating the effective date and reason for such termination, provided that no such action shall alter or amend any other provisions hereof or rights arising hereunder.

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ARTICLE 3: COMPENSATION AND BENEFITS

     3.1 Base Salary. Commencing January 1, 2007, Executive shall receive a minimum annual base salary of $500,000. Executive’s annual base salary shall be reviewed by the Board of Directors (or a committee thereof) on an annual basis, and, in the sole discretion of the Board of Directors (or such committee), such annual base salary may be increased, but not decreased, effective as of January 1 of each year. Executive’s annual base salary shall be paid during his employment hereunder in equal installments in accordance with the Company’s standard policy regarding payment of compensation to executives but no less frequently than monthly. On and after the effective date of a Partial Resignation, Executive shall continue to receive his annual base salary which shall be paid at the same time and in the same form and amount that it would otherwise be paid under this paragraph 3.1 as if no Partial Resignation took place.

     3.2 Incentive Compensation. During the period of this Agreement, other than during the Option Term, during which Executive shall not be entitled to receive incentive compensation, Executive shall be eligible to receive incentive compensation up to a maximum of 200% of his annual base salary each calendar year as shall be determined in the sole discretion of the Board of Directors (or a committee thereof), which compensation, if any, shall be paid to Executive in the form of a lump-sum payment between January 1 and March 15 of the calendar year following the calendar year to which the incentive compensation relates.

     3.3 Other Perquisites. During his employment hereunder, Executive shall be afforded the following benefits as incidences of his employment:

     (i) Car Allowance - Company shall provide to Executive an automobile or automobile allowance as approved by the Board of Directors (or committee thereof), which shall be paid in equal installments on a monthly basis in accordance with the Company’s standard policy regarding payment of compensation to its other employees. On and after the effective date of a Partial Resignation, Executive shall continue to receive his car allowance which shall be paid at the same time and in the same form and amount that it would otherwise be paid under this paragraph 3.3(i) as if no Partial Resignation took place.

     (ii) Other Company Benefits - Executive and, to the extent applicable, Executive’s spouse, dependents and beneficiaries, shall be allowed to participate in the health and welfare plans and programs, including improvements or modifications of the same, which are now, or may hereafter be, available to the other executive officers of Company. Such plans and programs include, without limitation, health insurance, life insurance and disability insurance and vacation and sick leave plans, which may be maintained by Company. Company shall not, however, by reason of this paragraph be obligated to institute, maintain, or refrain from changing, amending, or discontinuing, any such plan or program, so long as such changes are similarly applicable to the other executive officers of Company. On and after the effective date of a Partial Resignation, Executive shall, to the extent Executive is eligible under the terms of the applicable plan agreements, continue to participate in such plans and programs as if no Partial Resignation took place.

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ARTICLE 4: PROTECTION OF INFORMATION

     4.1 Disclosure to Executive. Company shall disclose to Executive, or place Executive in a position to have access to or develop, trade secrets or confidential information of Company or its affiliates; and/or shall entrust Executive with business opportunities of Company or its affiliates; and/or shall place Executive in a position to develop business good will on behalf of Company or its affiliates.

     4.2 Property of Company. All documents, drawings, memoranda, notes, records, files, correspondence, manuals, models, specifications, computer programs, e-mail, voice mail, electronic databases, maps, and all other writings or materials of any type embodying any information relating to Company or its business are and shall be the sole and exclusive property of Company. Upon termination of Executive’s employment by Company, for any reason, Executive promptly shall deliver the same, and all copies thereof, to Company. For the avoidance of doubt, this paragraph 4.2 shall not prohibit Executive from retaining his only personal property following termination or expiration of this Agreement.

     4.3 No Unauthorized Use or Disclosure. Executive will not, at any time during or after Executive’s employment by Company, make any unauthorized disclosure of any confidential business information or trade secrets of Company or its affiliates, or make any use thereof, except in the carrying out of Executive’s employment responsibilities hereunder. Affiliates of the Company shall be third party beneficiaries of Executive’s obligations under this paragraph. As a result of Executive’s employment by Company, Executive may also from time to time have access to, or knowledge of, confidential business information or trade secrets of third parties, such as customers, suppliers, partners, joint venturers, and the like, of Company and its affiliates. Executive also agrees to preserve and protect the confidentiality of such third party confidential information and trade secrets to the same extent, and on the same basis, as Company’s confidential business information and trade secrets.

     4.4 Remedies. Executive acknowledges that money damages would not be sufficient remedy for any breach of this Article by Executive, and Company shall be entitled to specific performance and injunctive relief as remedies for such breach or any threatened breach. Such remedies shall not be deemed the exclusive remedies for a breach of this Article, but shall be in addition to all remedies available at law or in equity to Company, including the recovery of damages from Executive.

ARTICLE 5: NONCOMPETITION OBLIGATIONS

     5.1 In General. As part of the consideration for the compensation and benefits to be paid to Executive hereunder; to protect the trade secrets and confidential information of Company and its affiliates that have been and will in the future be disclosed or entrusted to Executive, the business good will of Company and its affiliates that has been and will in the future be developed in Executive, or the business opportunities that have been and will in the future be disclosed or entrusted to Executive by Company and its affiliates; and as an additional incentive for Company to enter into this Agreement, Company and Executive agree to the noncompetition obligations hereunder. Executive shall not, directly or indirectly for Executive or for others, in the State of Texas and in all parishes of the State of Louisiana:

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     (i) engage in any business competitive with the business conducted by Company during the term of employment of Executive in such states; or

     (ii) render advice or services to, be employed by, acquire an ownership interest in, or otherwise assist, any other person, association, or entity who is engaged, directly or indirectly, in any business competitive with the business conducted by Company during the term of employment of Executive in such states with respect to such competitive business, except that Executive may hold up to 2% of the outstanding shares of any publicly held company engaged in such competitive activities.

The noncompetition obligations set forth above shall apply only during the period that Executive is employed by Company and for two years thereafter; provided, however, that such noncompetition obligations shall only apply after Executive’s termination of employment hereunder if such termination shall be as a result of a resignation by Executive other than under circumstances described in paragraph 2.3(i). For the avoidance of doubt, such obligations shall not apply following the termination or expiration of this Agreement under any other provision hereof.

     5.2 Enforcement and Remedies. Executive acknowledges that money damages would not be sufficient remedy for any breach of this Article by Executive, and Company shall be entitled to specific performance and injunctive relief as remedies for such breach or any threatened breach. Such remedies shall not be deemed the exclusive remedies for a breach of this Article, but shall be in addition to all remedies available at law or in equity to Company, including without limitation, the recovery of damages from Executive.

     5.3 Reformation. It is expressly understood and agreed that Company and Executive consider the restrictions contained in this Article to be reasonable and necessary to protect the proprietary information of Company. Nevertheless, if any of the aforesaid restrictions are found by a court having jurisdiction to be unreasonable, or overly broad as to geographic area or time, or otherwise unenforceable, the parties intend for the restrictions therein set forth to be modified by such court so as to be reasonable and enforceable and, as so modified by the court, to be fully enforced.

ARTICLE 6: EFFECT OF TERMINATION ON COMPENSATION;
ADDITIONAL PAYMENTS

     6.1 Defined Terms. For purposes of this Article 6, the following terms shall have the meanings indicated:

     “Change in Control” means (i) a merger of Company with another entity, a consolidation involving Company, or the sale of all or substantially all of the assets of Company to another entity if, in any such case, (A) the holders of equity securities of Company immediately prior to such transaction or event do not beneficially own immediately after such transaction or event equity securities of the resulting entity entitled to 60% or more of the votes then eligible to be cast in the election of directors generally (or comparable governing body) of the resulting entity in substantially the same proportions that they owned the equity securities of Company immediately prior to such

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transaction or event or (B) the persons who were members of the Board of Directors immediately prior to such transaction or event shall not constitute at least a majority of the board of directors of the resulting entity immediately after such transaction or event, (ii) the dissolution or liquidation of Company, (iii) when any person or entity, including a “group” as contemplated by Section 13(d)(3) of the Securities Exchange Act of 1934, as amended, acquires or gains ownership or control (including, without limitation, power to vote) of more than 50% of the combined voting power of the outstanding securities of, (A) if Company has not engaged in a merger or consolidation, Company, or (B) if Company has engaged in a merger or consolidation, the resulting entity, or (iv) as a result of or in connection with a contested election of directors, the persons who were members of the Board of Directors immediately before such election shall cease to constitute a majority of the Board of Directors. For purposes of the preceding sentence, (1) “resulting entity” in the context of a transaction or event that is a merger, consolidation or sale of all or substantially all assets shall mean the surviving entity (or acquiring entity in the case of an asset sale) unless the surviving entity (or acquiring entity in the case of an asset sale) is a subsidiary of another entity and the holders of common stock of Company receive capital stock of such other entity in such transaction or event, in which event the resulting entity shall be such other entity, and (2) subsequent to the consummation of a merger or consolidation that does not constitute a Change in Control, the term “Company” shall refer to the resulting entity and the term “Board of Directors” shall refer to the board of directors (or comparable governing body) of the resulting entity.

     “Termination Benefits” means (i) a lump sum cash payment equal to 250% (the “Applicable Percentage”) of the sum of (A) Executive’s annual base salary at the rate in effect under paragraph 3.1 on the date of termination of Executive’s employment and (B) the highest annual incentive compensation payment paid, or determined by the Board (or the applicable committee thereof) and to be paid, to Executive by Company (pursuant to paragraph 3.2 or otherwise) in respect of any of the three years immediately prior to the date of termination of Executive’s employment, (ii) notwithstanding anything to the contrary set forth in the Company’s other applicable plans and agreements, all of the outstanding stock options, restricted awards and other equity based awards granted by Company to Executive shall become fully vested and immediately exercisable in full on the date of termination of Executive’s employment, (iii) a consulting arrangement whereby Executive shall continue to perform services as a consultant to Company for up to twenty (20) hours per month for a term of five (5) years for consideration of $25,000 per annum (payable in equal monthly installments in accordance with the Company’s standard policy regarding payment of compensation to its service providers (which shall at all times constitute a right to a series of separate payments for purposes of Section 409A of the Code, if applicable) commencing on the first regular payroll period for employees following the date of termination of Executive’s employment), and (iv) continuation of participation in all of Company’s health, medical and life insurance plans that may be in effect from time to time, but only to the extent Executive is eligible under the terms of such plans, from the date of termination of Executive’s employment for a period of five (5) years; provided, however, that in the event that the event giving rise to the termination occurs during the Option Term, then the Applicable Percentage shall be 125%. Company and Executive do not (and will not, as of the date of termination) anticipate that Executive’s consulting services hereunder will involve a level

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of services to the Company in excess of 20% of the average level of services provided during the previous 36 months, whether as an employee or an independent contractor (and the termination of Executive’s employment preceding the consulting arrangement shall thus constitute a separation of service for purposes of Section 409A of the Code). Notwithstanding anything in this Agreement to the contrary, if Executive is entitled to Termination Benefits under any clause in this Agreement, then Executive shall not also be entitled to additional Termination Benefits under any other clause of this Agreement.

     6.2 By Expiration. If Executive’s employment hereunder shall terminate upon expiration of the term provided in paragraph 2.1 hereof (whether the regular term hereof or the Option Term), then (i) all compensation and all benefits to Executive hereunder shall continue to be provided until the expiration of such term, (ii) such compensation and benefits shall terminate contemporaneously with termination of his employment, and (iii) Company shall provide Executive with the Termination Benefits. Any lump sum cash payment due to Executive pursuant to clause (iii) of the preceding sentence shall be paid to Executive within five business days of the date of Executive’s termination of employment with Company.

     6.3 By Company. If Executive’s employment hereunder shall be terminated by Company prior to expiration of the term provided in paragraph 2.1, then, upon such termination, regardless of the reason therefor, all compensation and benefits to Executive hereunder shall terminate contemporaneously with the termination of such employment; provided, however, that:

     (i) if such termination shall be for a reason encompassed by paragraph 2.2(i), then Company shall pay to Executive (or in the event of Executive’s death, his designated beneficiary or his estate if Executive does not have a beneficiary designation on file with Company for this purpose) a lump-sum payment equal to six months of his base salary at the rate in effect under paragraph 3.1 on the date of such termination; and

     (ii) if such termination shall be for any reason other than those encompassed by paragraphs 2.2 (i) or (ii), then Company shall provide Executive with the Termination Benefits.

Any lump-sum cash payment due to Executive (or his designated beneficiary, as the case may be) pursuant to the preceding sentence shall be paid to Executive within five business days of the date of Executive’s termination of employment with Company.

     6.4 By Executive. If Executive’s employment hereunder shall be terminated by Executive prior to expiration of the term provided in paragraph 2.1, then, upon such termination, regardless of the reason therefor, all compensation and benefits to Executive hereunder shall terminate contemporaneously with the termination of such employment; provided, however, that:

     (i) if such termination occurs for a reason encompassed by paragraph 2.3(i), then Company shall provide Executive with the Termination Benefits; and

     (ii) if such termination shall occur within the 180-day period beginning on the date upon which a Change in Control occurs, then Company shall provide Executive with the Termination Benefits;

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     (iii) if such termination shall occur under paragraph 2.3(iii) within the 30-day period beginning on the date that the Board of Directors fails or refuses to grant its consent to Executive’s Partial Resignation pursuant to paragraph 1.6 hereof, then Company shall provide Executive with the Termination Benefits; and

     (iv) if such termination occurs after September 30, 2009 for a reason encompassed by paragraph 2.3(iii), then the Company shall provide the Executive with the Termination Benefits.

Any lump sum cash payment due to Executive pursuant to this paragraph shall be paid to Executive within five business days of the date of Executive’s termination of employment with Company.

     6.5 Death of Executive. Upon the date of death of Executive, the Agreement shall terminate and Company shall pay to Executive’s designated beneficiary (or his estate if Executive does not have a beneficiary designation on file with Company for this purpose) a lump-sum payment equal to six months of his base salary at the rate in effect under paragraph 3.1 on the date of such termination, such payment to be made as soon as practicable following such death, but in no event later than the later of (i) the end of the calendar year of the date of death of Executive or (ii) the 75^th day following the date of death of Executive.

     6.6 Additional Payments by Company.

     (a) Notwithstanding anything to the contrary in this Agreement, in the event that any payment or distribution by Company to or for the benefit of Executive, whether paid or payable or distributed or distributable pursuant to the terms of this Agreement or otherwise (a “Payment”), would be subject to the excise tax imposed by Section 4999 of the Code or any interest or penalties with respect to such excise tax (such excise tax, together with any such interest or penalties, are hereinafter collectively referred to as the “Excise Tax”), Company shall pay to Executive an additional payment (a “Gross-up Payment”) in an amount such that after payment by Executive of all taxes (including any interest or penalties imposed with respect to such taxes), including any Excise Tax imposed on any Gross-up Payment, Executive retains an amount of the Gross-up Payment equal to the Excise Tax imposed upon the Payments. Company and Executive shall make an initial determination as to whether a Gross-up Payment is required and the amount of any such Gross-up Payment, and any Gross-up Payment so determined shall be paid to Executive as a lump-sum payment on the date the related Payment is made. Unless withheld and remitted by the Company, Executive shall timely remit any required Excise Tax payments to the Internal Revenue Service.

     (b) Executive shall notify Company in writing of any claim by the Internal Revenue Service which, if successful, would require Company to make a Gross-up Payment (or a Gross-up Payment in excess of that, if any, initially determined by Company and Executive) within 10 days of the receipt of such claim. Company shall notify Executive in writing at least 10 days prior to the due date of any response required with respect to such claim if it plans to contest the claim. If Company fails to timely notify Executive whether it will contest such claim or Company determines not to contest such claim, then Company shall immediately pay to Executive the portion of such claim, if any, which it has not previously paid to Executive. If

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Company decides to contest such claim, Executive shall cooperate fully with Company in such action; provided, however, Company shall bear and pay directly or indirectly all costs and expenses (including additional interest and penalties) incurred in connection with such action and shall indemnify and hold Executive harmless, on an after-tax basis, for any Excise Tax or income tax, including interest and penalties with respect thereto, imposed as a result of Company’s action.

     (c) Any Gross-up Payment, reimbursement, indemnification or in-kind provision of expenses under clause (b) shall be made by Company to Executive promptly after incurrence thereof by Executive but in no event later than the end of the calendar year next following the calendar year in which Executive remits the related taxes that are the subject of the audit or litigation to the Internal Revenue Service (or, if no taxes are remitted, the end of the calendar year following the calendar year in which the audit is completed, settled or otherwise resolved) provided, that Executive must provide reasonable documentation to Company to substantiate taxes paid and expenses incurred. If, as a result of Company’s action with respect to a claim, Executive receives a refund of any amount paid by Company with respect to such claim, Executive shall promptly pay such refund to Company

     6.7 No Duty to Mitigate Losses. Executive shall have no duty to find new employment following the termination of his employment under circumstances which require Company to pay any amount to Executive pursuant to this Article 6. Any salary or remuneration received by Executive from a third party for the providing of personal services (whether by employment or by functioning as an independent contractor) following the termination of his employment under circumstances pursuant to which this Article 6 apply shall not reduce Company’s obligation to make a payment to Executive (or the amount of such payment) pursuant to the terms of this Article 6.

     6.8 Liquidated Damages. In light of the difficulties in estimating the damages for an early termination of this Agreement, Company and Executive hereby agree that the payments, if any, to be received by Executive pursuant to this Article 6 shall be received by Executive as liquidated damages. Employee shall have no liability for his termination of this Agreement in accordance with paragraph 2.3.

     6.9 Other Benefits. This Agreement governs the rights and obligations of Executive and Company with respect to Executive’s base salary and certain perquisites of employment. Except as expressly provided herein, Executive’s rights and obligations both during the term of his employment and thereafter with respect to stock options, restricted stock, incentive and deferred compensation, life insurance policies insuring the life of Executive, and other benefits under the plans and programs maintained by Company shall be governed by the separate agreements, plans and other documents and instruments governing such matters.

ARTICLE 7: MISCELLANEOUS

     7.1 Notices. For purposes of this Agreement, notices and all other communications provided for herein shall be in writing and shall be deemed to have been duly given when personally delivered or when mailed by United States registered or certified mail, return receipt requested, postage prepaid, addressed as follows:

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If to Company to:	W-H Energy Services, Inc.
	2000 West Sam Houston Parkway South
	Suite 500
	Houston, Texas 77042
	Attention: Chief Operating Officer
If to Executive to:	Kenneth T. White, Jr.
	610 Sugar Creek Blvd.
	Sugar Land, Texas 77478

or to such other address as either party may furnish to the other in writing in accordance herewith, except that notices or changes of address shall be effective only upon receipt.

     7.2 Applicable Law. This Agreement is entered into under, and shall be governed for all purposes by, the laws of the State of Texas.

     7.3 No Waiver. No failure by either party hereto at any time to give notice of any breach by the other party of, or to require compliance with, any condition or provision of this Agreement shall be deemed a waiver of similar or dissimilar provisions or conditions at the same or at any prior or subsequent time.

     7.4 Severability. If a court of competent jurisdiction determines that any provision of this Agreement is invalid or unenforceable, then the invalidity or unenforceability of that provision shall not affect the validity or enforceability of any other provision of this Agreement, and all other provisions shall remain in full force and effect.

     7.5 Counterparts. This Agreement may be executed in one or more counterparts, each of which shall be deemed to be an original, but all of which together will constitute one and the same Agreement.

     7.6 Withholding of Taxes and Other Employee Deductions. Company may withhold from any benefits and payments made pursuant to this Agreement all federal, state, city and other taxes as may be required pursuant to any law or governmental regulation or ruling and all other normal employee deductions made with respect to Company’s employees generally.

     7.7 Headings. The paragraph headings have been inserted for purposes of convenience and shall not be used for interpretive purposes.

     7.8 Gender and Plurals. Wherever the context so requires, the masculine gender includes the feminine or neuter, and the singular number includes the plural and conversely.

     7.9 Affiliate. As used in this Agreement, the term “affiliate” shall mean any entity which owns or controls, is owned or controlled by, or is under common ownership or control with, Company.

     7.10 Assignment. This Agreement shall be binding upon and inure to the benefit of Company and any successor of Company, by merger or otherwise. Except as provided in the

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preceding sentence, this Agreement, and the rights and obligations of the parties hereunder, are personal and neither this Agreement, nor any right, benefit, or obligation of either party hereto, shall be subject to voluntary or involuntary assignment, alienation or transfer, whether by operation of law or otherwise, without the prior written consent of the other party.

     7.11 Term. This Agreement has a term co-extensive with the term of employment provided in paragraph 2.1. Termination shall not affect any right or obligation of any party which is accrued or vested prior to such termination.

     7.12 Entire Agreement. Except as provided in (i) the written benefit plans and programs referenced in paragraph 6.8 (and any agreements between Company and Executive that have been executed under such plans and programs) and (ii) any signed written agreement contemporaneously or hereafter executed by Company and Executive, this Agreement constitutes the entire agreement of the parties with regard to the subject matter hereof, and contains all the covenants, promises, representations, warranties and agreements between the parties with respect to employment of Executive by Company. Without limiting the scope of the preceding sentence, all understandings and agreements preceding the date of execution of this Agreement and relating to the subject matter hereof (other than the agreements described in clause (i) of the preceding sentence) are hereby null and void and of no further force and effect. Any modification of this Agreement will be effective only if it is in writing and signed by the party to be charged.

     7.13 Section 409A. The parties intend that this Agreement be interpreted in a manner to be exempt from the requirements of Section 409A of the Code, and, where not so exempt, to be in compliance therewith. Executive (or his estate or beneficiary) shall have no right to dictate the taxable year in which any payment hereunder should be paid. Notwithstanding any provision of this Agreement to the contrary, only to the extent that this Agreement is subject to the requirements of Section 409A of the Code and is not exempted from such requirements, if at the time of Executive’s termination of employment with the Company, Executive is a “specified employee” as defined in Section 409A of the Code, no payment or benefit that results from Executive’s termination of employment will be provided until the date which is six months after the date of Executive’s termination of employment. Payments to which Executive would otherwise be entitled during the six-month period described above will be accumulated and paid in a lump sum on the first day of the seventh month after the date of Executive’s termination of employment. Notwithstanding anything to the contrary, to the extent required by Section 409A of the Code (a) the amount of expenses eligible for reimbursement or to be provided as an in-kind benefit under this Agreement with respect to a calendar year may not affect the expenses eligible for reimbursement or to be provided as an in-kind benefit in any other calendar year and (b) the right to reimbursement or in-kind benefits under this Agreement shall not be subject to liquidation or exchange for another benefit.

(Signature page follows)

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     IN WITNESS WHEREOF, the parties hereto have executed this Agreement on the ___day of January, 2008, to be effective as of the Effective Date.

W-H ENERGY SERVICES, INC.
By:	/s/ Jeffrey L. Tepera
Name:		Jeffrey L. Tepera
Title:		Vice President and Chief Operating Officer

/s/ Kenneth T. White, Jr. 

Kenneth T. White, Jr. 

EX-10.2

Exhibit 10.2

AMENDED AND RESTATED EMPLOYMENT AGREEMENT

     THIS AMENDED AND RESTATED EMPLOYMENT AGREEMENT (as amended from time to time, this “Agreement”), effective as of January 1, 2008 is between W-H Energy Services, Inc., a Texas corporation (“Company”), and Jeffrey L. Tepera (“Executive”).

W I T N E S S E T H:

     WHEREAS, Company and Executive are currently parties to an Employment Agreement effective as of January 1, 2004, as amended by a First Amendment thereto executed as of March 30, 2007 (such Employment Agreement, as so amended, the “Original Employment Agreement”); and

     WHEREAS, Company and Executive desire to amend and restate the Original Employment Agreement to reflect therein the amendments thereto effected by the First Amendment thereto and to make certain other amendments, including those required by Section 409A of the Internal Revenue Code of 1986, as amended (the “Code”).

     NOW, THEREFORE, for and in consideration of the mutual promises, covenants and obligations contained herein, Company and Executive agree as follows:

ARTICLE 1: EMPLOYMENT AND DUTIES

     1.1 Employment; Effective Date. Effective as of January 1, 2004 (the “Effective Date”), and continuing for the period of time set forth in Article 2 of this Agreement, Company agrees to employ Executive and Executive agrees to be employed by Company, subject to the terms and conditions of this Agreement.

     1.2 Positions. Company shall employ Executive in the position of Vice President and Chief Operating Officer of Company, or in such other positions as the parties mutually may agree.

     1.3 Duties and Services. Executive agrees to serve in the position referred to in paragraph 1.2 and to perform diligently and to the best of his abilities the duties and services appertaining to such offices, as well as such additional duties and services appropriate to such offices which the parties mutually may agree upon from time to time. Executive’s employment shall also be subject to the policies maintained and established by Company that are of general applicability to Company’s executive employees; as such policies may be amended from time to time.

     1.4 Other Interests. Executive agrees, during the period of his employment by Company, to devote his primary business time, energy and best efforts to the business and affairs of Company and its affiliates and not to engage, directly or indirectly, in any other business or businesses, whether or not similar to that of Company, except with the consent of the Board of Directors. The foregoing notwithstanding, the parties recognize and agree that Executive may engage in other business activities that do not conflict with the business and affairs of Company or interfere with Executive’s performance of his duties hereunder, which shall be at the sole determination of the Company’s President and Chief Executive Officer.

     1.5 Duty of Loyalty. Executive acknowledges and agrees that Executive owes a fiduciary duty of loyalty to act at all times in the best interests of Company. In keeping with such duty, Executive shall make full disclosure to Company of all business opportunities pertaining to Company’s business and shall not appropriate for Executive’s own benefit business opportunities concerning Company’s business.

ARTICLE 2: TERM AND TERMINATION OF EMPLOYMENT

     2.1 Term. Unless sooner terminated pursuant to other provisions hereof, Company agrees to employ Executive for the period beginning on the Effective Date and ending on December 31, 2009 (the “Initial Expiration Date”); provided, however, that beginning on the Initial Expiration Date, and on each anniversary of the Initial Expiration Date thereafter, if this Agreement has not been terminated pursuant to paragraph 2.2 or 2.3, then said term of employment shall automatically be extended for an additional one-year period unless on or before the date that is 90 days prior to the first day of any such extension period either party shall give written notice to the other that no such automatic extension shall occur.

     2.2 Company’s Right to Terminate. Notwithstanding the provisions of paragraph 2.1, Company shall have the right to terminate Executive’s employment under this Agreement at any time for any of the following reasons:

     (i) upon Executive’s becoming incapacitated by accident, sickness or other circumstance which, in the reasonable opinion of a physician selected by Company, renders him mentally or physically incapable of performing the duties and services required of him hereunder;

     (ii) for cause, which for purposes of this Agreement shall mean Executive (A) has willfully breached any of his duties and obligations hereunder resulting in materially adverse consequences to Company or any of its affiliates, (B) has misappropriated funds or property of Company or any of its affiliates, or (C) has engaged in conduct that is materially adverse to the interests of Company or any of its affiliates; provided, however, that, prior to termination pursuant to clause (A), Company shall give Executive written notice of the grounds for termination and Executive shall have ten days after receipt thereof to cure same; or

     (iii) for any other reason whatsoever, in the sole discretion of the Board of Directors.

     2.3 Executive’s Right to Terminate. Notwithstanding the provisions of paragraph 2.1, Executive shall have the right to terminate his employment under this Agreement for any of the following reasons:

     (i) within 60 days of the initial existence of (A) a material breach by Company of any material provision of this Agreement, (B) a material decrease in Executive’s base salary; (C) a material decrease in the duties and responsibilities assigned to Executive as compared to the positions referred to in paragraph 1.2; or (D) Executive being required to relocate to a site more than 25 miles from his present business address; or

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     (ii) at any time after there is a Change in Control (as such term is defined in paragraph 6.1); or

     (iii) at any time for any other reason whatsoever, in the sole discretion of Executive;

provided, however, that in the case of a termination under paragraph 2.3(i), (A) Executive must provide Company with written notice of the event giving rise to the right of termination within 60 days of the initial existence thereof, and Company shall have 30 days to remedy the same and (B) in no event may the effective date of Executive’s termination be more than 24 months following the initial existence of the event giving rise to the right of termination.

     2.4 Notice of Termination. If Company or Executive desires to terminate Executive’s employment hereunder at any time prior to expiration of the term of employment as provided in paragraph 2.1, it or he shall do so by giving written notice to the other party that it or he has elected to terminate Executive’s employment hereunder and stating the effective date and reason for such termination, provided that no such action shall alter or amend any other provisions hereof or rights arising hereunder.

ARTICLE 3: COMPENSATION AND BENEFITS

     3.1 Base Salary. Commencing January 1, 2008, Executive shall receive a minimum annual base salary of three hundred seventy thousand dollars ($370,000.00). Executive’s annual base salary shall be reviewed by the Board of Directors (or a committee thereof) on an annual basis, and, in the sole discretion of the Board of Directors (or such committee), such annual base salary may be increased, but not decreased, effective as of January 1 of each year. Executive’s annual base salary shall be paid during his employment hereunder in equal installments in accordance with the Company’s standard policy regarding payment of compensation to executives but no less frequently than monthly.

     3.2 Incentive Compensation. During his employment hereunder, Executive shall be eligible to receive incentive compensation up to a maximum of 133% of his annual base salary each calendar year as shall be determined in the sole discretion of the Board of Directors (or a committee thereof), which compensation, if any, shall be paid to Executive in the form of a lump-sum payment between January 1 and March 15 of the calendar year following the calendar year to which the incentive compensation relates.

     3.3 Other Perquisites. During his employment hereunder, Executive shall be afforded the following benefits as incidences of his employment:

     (i) Car Allowance - Company shall provide to Executive an automobile or automobile allowance as approved by the President and Chief Executive Officer, which shall be paid in equal installments on a monthly basis in accordance with the Company’s standard policy regarding payment of compensation to its other employees.

     (ii) Other Company Benefits - Executive and, to the extent applicable, Executive’s spouse, dependents and beneficiaries, shall be allowed to participate in the health and welfare plans and programs, including improvements or modifications of the

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same, which are now, or may hereafter be, available to the other executive officers of Company. Such plans and programs include, without limitation, health insurance, life insurance and disability insurance and vacation and sick leave plans, which may be maintained by Company. Company shall not, however, by reason of this paragraph be obligated to institute, maintain, or refrain from changing, amending, or discontinuing, any such plan or program, so long as such changes are similarly applicable to the other executive officers of Company.

ARTICLE 4: PROTECTION OF INFORMATION

     4.1 Disclosure to Executive. Company shall disclose to Executive, or place Executive in a position to have access to or develop, trade secrets or confidential information of Company or its affiliates; and/or shall entrust Executive with business opportunities of Company or its affiliates; and/or shall place Executive in a position to develop business good will on behalf of Company or its affiliates.

4.2 Property of Company. All documents, drawings, memoranda, notes, records, files, correspondence, manuals, models, specifications, computer programs, e-mail, voice mail, electronic databases, maps, and all other writings or materials of any type embodying any information relating to Company or its business are and shall be the sole and exclusive property of Company. Upon termination of Executive’s employment by Company, for any reason, Executive promptly shall deliver the same, and all copies thereof, to Company. For the avoidance of doubt, this paragraph 4.2 shall not prohibit Executive from retaining his only personal property following termination or expiration of this Agreement.

     4.3 No Unauthorized Use or Disclosure. Executive will not, at any time during or after Executive’s employment by Company, make any unauthorized disclosure of any confidential business information or trade secrets of Company or its affiliates, or make any use thereof, except in the carrying out of Executive’s employment responsibilities hereunder. Affiliates of the Company shall be third party beneficiaries of Executive’s obligations under this paragraph. As a result of Executive’s employment by Company, Executive may also from time to time have access to, or knowledge of, confidential business information or trade secrets of third parties, such as customers, suppliers, partners, joint venturers, and the like, of Company and its affiliates. Executive also agrees to preserve and protect the confidentiality of such third party confidential information and trade secrets to the same extent, and on the same basis, as Company’s confidential business information and trade secrets.

     4.4 Remedies. Executive acknowledges that money damages would not be sufficient remedy for any breach of this Article by Executive, and Company shall be entitled to specific performance and injunctive relief as remedies for such breach or any threatened breach. Such remedies shall not be deemed the exclusive remedies for a breach of this Article, but shall be in addition to all remedies available at law or in equity to Company, including the recovery of damages from Executive.

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ARTICLE 5: NONCOMPETITION OBLIGATIONS

     5.1 In General. As part of the consideration for the compensation and benefits to be paid to Executive hereunder; to protect the trade secrets and confidential information of Company and its affiliates that have been and will in the future be disclosed or entrusted to Executive, the business good will of Company and its affiliates that has been and will in the future be developed in Executive, or the business opportunities that have been and will in the future be disclosed or entrusted to Executive by Company and its affiliates; and as an additional incentive for Company to enter into this Agreement, Company and Executive agree to the noncompetition obligations hereunder. Executive shall not, directly or indirectly for Executive or for others, in the State of Texas and in all parishes of the State of Louisiana:

     (i) engage in any business competitive with the business conducted by Company during the term of employment of Executive in such states; or

     (ii) render advice or services to, be employed by, acquire an ownership interest in, or otherwise assist, any other person, association, or entity who is engaged, directly or indirectly, in any business competitive with the business conducted by Company during the term of employment of Executive in such states with respect to such competitive business, except that Executive may hold up to 2% of the outstanding shares of any publicly held company engaged in such competitive activities.

The noncompetition obligations set forth above shall apply only during the period that Executive is employed by Company and for two years thereafter; provided, however, that such noncompetition obligations shall only apply after Executive’s termination of employment hereunder if such termination shall be as a result of a resignation by Executive other than under circumstances described in paragraph 2.3(i). For the avoidance of doubt, such obligations shall not apply following the termination or expiration of this Agreement under any other provision hereof.

     5.2 Enforcement and Remedies. Executive acknowledges that money damages would not be sufficient remedy for any breach of this Article by Executive, and Company shall be entitled to specific performance and injunctive relief as remedies for such breach or any threatened breach. Such remedies shall not be deemed the exclusive remedies for a breach of this Article, but shall be in addition to all remedies available at law or in equity to Company, including without limitation, the recovery of damages from Executive.

     5.3 Reformation. It is expressly understood and agreed that Company and Executive consider the restrictions contained in this Article to be reasonable and necessary to protect the proprietary information of Company. Nevertheless, if any of the aforesaid restrictions are found by a court having jurisdiction to be unreasonable, or overly broad as to geographic area or time, or otherwise unenforceable, the parties intend for the restrictions therein set forth to be modified by such court so as to be reasonable and enforceable and, as so modified by the court, to be fully enforced.¹

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ARTICLE 6: EFFECT OF TERMINATION ON COMPENSATION;
ADDITIONAL PAYMENTS

     6.1 Defined Terms. For purposes of this Article 6, the following terms shall have the meanings indicated:

     “Change in Control” means (i) a merger of Company with another entity, a consolidation involving Company, or the sale of all or substantially all of the assets of Company to another entity if, in any such case, (A) the holders of equity securities of Company immediately prior to such transaction or event do not beneficially own immediately after such transaction or event equity securities of the resulting entity entitled to 60% or more of the votes then eligible to be cast in the election of directors generally (or comparable governing body) of the resulting entity in substantially the same proportions that they owned the equity securities of Company immediately prior to such transaction or event or (B) the persons who were members of the Board of Directors immediately prior to such transaction or event shall not constitute at least a majority of the board of directors of the resulting entity immediately after such transaction or event, (ii) the dissolution or liquidation of Company, (iii) when any person or entity, including a “group” as contemplated by Section 13(d)(3) of the Securities Exchange Act of 1934, as amended, acquires or gains ownership or control (including, without limitation, power to vote) of more than 50% of the combined voting power of the outstanding securities of, (A) if Company has not engaged in a merger or consolidation, Company, or (B) if Company has engaged in a merger or consolidation, the resulting entity, or (iv) as a result of or in connection with a contested election of directors, the persons who were members of the Board of Directors immediately before such election shall cease to constitute a majority of the Board of Directors. For purposes of the preceding sentence, (1) “resulting entity” in the context of a transaction or event that is a merger, consolidation or sale of all or substantially all assets shall mean the surviving entity (or acquiring entity in the case of an asset sale) unless the surviving entity (or acquiring entity in the case of an asset sale) is a subsidiary of another entity and the holders of common stock of Company receive capital stock of such other entity in such transaction or event, in which event the resulting entity shall be such other entity, and (2) subsequent to the consummation of a merger or consolidation that does not constitute a Change in Control, the term “Company” shall refer to the resulting entity and the term “Board of Directors” shall refer to the board of directors (or comparable governing body) of the resulting entity.

     “Termination Benefits” means (i) a lump sum cash payment equal to 200% of the sum of (A) Executive’s annual base salary at the rate in effect under paragraph 3.1 on the date of termination of Executive’s employment and (B) the highest annual incentive compensation payment paid, or determined by the Board (or the applicable committee thereof) and to be paid, to Executive by Company (pursuant to paragraph 3.2 or otherwise) in respect of any of the three years immediately prior to the date of termination of Executive’s employment, and (ii) notwithstanding anything to the contrary set forth in the Company’s other applicable plans and agreements, all of the outstanding stock options, restricted awards and other equity based awards granted by Company to Executive shall become fully vested and immediately exercisable in full on the date of termination of Executive’s employment. Notwithstanding anything in this Agreement to

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the contrary, if Executive is entitled to Termination Benefits under any clause in this Agreement, then Executive shall not also be entitled to additional Termination Benefits under any other clause of this Agreement.

     6.2 By Expiration. If Executive’s employment hereunder shall terminate upon expiration of the term provided in paragraph 2.1 hereof because Executive has provided the notice contemplated in such paragraph to Company, then all compensation and all benefits to Executive hereunder shall continue to be provided until the expiration of such term and such compensation and benefits shall terminate contemporaneously with termination of his employment. If Executive’s employment hereunder shall terminate upon expiration of the term provided in paragraph 2.1 hereof because Company has provided the notice contemplated in such paragraph to Executive, then (i) all compensation and all benefits to Executive hereunder shall continue to be provided until the expiration of such term, (ii) such compensation and benefits shall terminate contemporaneously with termination of his employment, and (iii) Company shall provide Executive with the Termination Benefits. Any lump sum cash payment due to Executive pursuant to clause (iii) of the preceding sentence shall be paid to Executive within five business days of the date of Executive’s termination of employment with Company.

     6.3 By Company. If Executive’s employment hereunder shall be terminated by Company prior to expiration of the term provided in paragraph 2.1, then, upon such termination, regardless of the reason therefor, all compensation and benefits to Executive hereunder shall terminate contemporaneously with the termination of such employment; provided, however, that:

     (i) if such termination shall be for a reason encompassed by paragraph 2.2(i), then Company shall pay to Executive (or, in the event of Executive’s death, his designated beneficiary or his estate if Executive does not have a beneficiary designation on file with Company for this purpose) a lump-sum payment equal to six months of his base salary at the rate in effect under paragraph 3.1 on the date of such termination; and

     (ii) if such termination shall be for any reason other than those encompassed by paragraphs 2.2 (i) or (ii), then Company shall provide Executive with the Termination Benefits.

Any lump-sum cash payment due to Executive (or his designated beneficiary, as the case may be) pursuant to the preceding sentence shall be paid to Executive within five business days of the date of Executive’s termination of employment with Company.

     6.4 By Executive. If Executive’s employment hereunder shall be terminated by Executive prior to expiration of the term provided in paragraph 2.1, then, upon such termination, regardless of the reason therefor, all compensation and benefits to Executive hereunder shall terminate contemporaneously with the termination of such employment; provided, however, that:

     (i) if such termination occurs for a reason encompassed by paragraph 2.3(i), then Company shall provide Executive with the Termination Benefits; and

     (ii) if such termination shall occur within the 180-day period beginning on the date upon which a Change in Control occurs, then Company shall provide Executive with the Termination Benefits.

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Any lump sum cash payment due to Executive pursuant to this paragraph shall be paid to Executive within five business days of the date of Executive’s termination of employment with Company.

     6.5 Death of Executive. Upon the date of death of Executive, the Agreement shall terminate and Company shall pay to Executive’s designated beneficiary (or his estate if Executive does not have a beneficiary designation on file with Company for this purpose) a lump-sum payment equal to six months of his base salary at the rate in effect under paragraph 3.1 on the date of such termination, such payment to be made as soon as practicable following such death, but in no event later than the later of (i) the end of the calendar year of the date of death of Executive or (ii) the 75^th day following the date of death of Executive.

     6.6 Additional Payments by Company.

     (a) Notwithstanding anything to the contrary in this Agreement, in the event that any payment or distribution by Company to or for the benefit of Executive, whether paid or payable or distributed or distributable pursuant to the terms of this Agreement or otherwise (a “Payment”), would be subject to the excise tax imposed by Section 4999 of the Code or any interest or penalties with respect to such excise tax (such excise tax, together with any such interest or penalties, are hereinafter collectively referred to as the “Excise Tax”), Company shall pay to Executive an additional payment (a “Gross-up Payment”) in an amount such that after payment by Executive of all taxes (including any interest or penalties imposed with respect to such taxes), including any Excise Tax imposed on any Gross-up Payment, Executive retains an amount of the Gross-up Payment equal to the Excise Tax imposed upon the Payments. Company and Executive shall make an initial determination as to whether a Gross-up Payment is required and the amount of any such Gross-up Payment, and any Gross-up Payment so determined shall be paid to Executive as a lump-sum payment on the date the related Payment is made. Unless withheld and remitted by the Company, Executive shall timely remit any required Excise Tax payments to the Internal Revenue Service.

     (b) Executive shall notify Company in writing of any claim by the Internal Revenue Service which, if successful, would require Company to make a Gross-up Payment (or a Gross-up Payment in excess of that, if any, initially determined by Company and Executive) within 10 days of the receipt of such claim. Company shall notify Executive in writing at least 10 days prior to the due date of any response required with respect to such claim if it plans to contest the claim. If Company fails to timely notify Executive whether it will contest such claim or Company determines not to contest such claim, then Company shall immediately pay to Executive the portion of such claim, if any, which it has not previously paid to Executive. If Company decides to contest such claim, Executive shall cooperate fully with Company in such action; provided, however, Company shall bear and pay directly or indirectly all costs and expenses (including additional interest and penalties) incurred in connection with such action and shall indemnify and hold Executive harmless, on an after-tax basis, for any Excise Tax or income tax, including interest and penalties with respect thereto, imposed as a result of Company’s action.

     (c) Any Gross-up Payment, reimbursement, indemnification or in-kind provision of expenses under clause (b) shall be made by Company to Executive promptly after incurrence

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thereof by Executive but in no event later than the end of the calendar year next following the calendar year in which Executive remits the related taxes that are the subject of the audit or litigation to the Internal Revenue Service (or, if no taxes are remitted, the end of the calendar year following the calendar year in which the audit is completed, settled or otherwise resolved) provided, that Executive must provide reasonable documentation to Company to substantiate taxes paid and expenses incurred. If, as a result of Company’s action with respect to a claim, Executive receives a refund of any amount paid by Company with respect to such claim, Executive shall promptly pay such refund to Company.

     6.7 No Duty to Mitigate Losses. Executive shall have no duty to find new employment following the termination of his employment under circumstances which require Company to pay any amount to Executive pursuant to this Article 6. Any salary or remuneration received by Executive from a third party for the providing of personal services (whether by employment or by functioning as an independent contractor) following the termination of his employment under circumstances pursuant to which this Article 6 apply shall not reduce Company’s obligation to make a payment to Executive (or the amount of such payment) pursuant to the terms of this Article 6.

     6.8 Liquidated Damages. In light of the difficulties in estimating the damages for an early termination of this Agreement, Company and Executive hereby agree that the payments, if any, to be received by Executive pursuant to this Article 6 shall be received by Executive as liquidated damages. Employee shall have no liability for his termination of this Agreement in accordance with paragraph 2.3.

     6.9 Other Benefits. This Agreement governs the rights and obligations of Executive and Company with respect to Executive’s base salary and certain perquisites of employment. Except as expressly provided herein, Executive’s rights and obligations both during the term of his employment and thereafter with respect to stock options, restricted stock, incentive and deferred compensation, life insurance policies insuring the life of Executive, and other benefits under the plans and programs maintained by Company shall be governed by the separate agreements, plans and other documents and instruments governing such matters.

ARTICLE 7: MISCELLANEOUS

     7.1 Notices. For purposes of this Agreement, notices and all other communications provided for herein shall be in writing and shall be deemed to have been duly given when personally delivered or when mailed by United States registered or certified mail, return receipt requested, postage prepaid, addressed as follows:

If to Company to:	W-H Energy Services, Inc.
	2000 West Sam Houston Parkway South
	Suite 500
	Houston, Texas 77042
	Attention: Chief Executive Officer

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If to Executive to:	Jeffrey L. Tepera
	16302 Mahogany Crest
	Cypress, TX 77429

or to such other address as either party may furnish to the other in writing in accordance herewith, except that notices or changes of address shall be effective only upon receipt.

     7.2 Applicable Law. This Agreement is entered into under, and shall be governed for all purposes by, the laws of the State of Texas.

     7.3 No Waiver. No failure by either party hereto at any time to give notice of any breach by the other party of, or to require compliance with, any condition or provision of this Agreement shall be deemed a waiver of similar or dissimilar provisions or conditions at the same or at any prior or subsequent time.

     7.4 Severability. If a court of competent jurisdiction determines that any provision of this Agreement is invalid or unenforceable, then the invalidity or unenforceability of that provision shall not affect the validity or enforceability of any other provision of this Agreement, and all other provisions shall remain in full force and effect.

     7.5 Counterparts. This Agreement may be executed in one or more counterparts, each of which shall be deemed to be an original, but all of which together will constitute one and the same Agreement.

     7.6 Withholding of Taxes and Other Employee Deductions. Company may withhold from any benefits and payments made pursuant to this Agreement all federal, state, city and other taxes as may be required pursuant to any law or governmental regulation or ruling and all other normal employee deductions made with respect to Company’s employees generally.

     7.7 Headings. The paragraph headings have been inserted for purposes of convenience and shall not be used for interpretive purposes.

     7.8 Gender and Plurals. Wherever the context so requires, the masculine gender includes the feminine or neuter, and the singular number includes the plural and conversely.

     7.9 Affiliate. As used in this Agreement, the term “affiliate” shall mean any entity which owns or controls, is owned or controlled by, or is under common ownership or control with, Company.

     7.10 Assignment. This Agreement shall be binding upon and inure to the benefit of Company and any successor of Company, by merger or otherwise. Except as provided in the preceding sentence, this Agreement, and the rights and obligations of the parties hereunder, are personal and neither this Agreement, nor any right, benefit, or obligation of either party hereto, shall be subject to voluntary or involuntary assignment, alienation or transfer, whether by operation of law or otherwise, without the prior written consent of the other party.

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     7.11 Term. This Agreement has a term co-extensive with the term of employment provided in paragraph 2.1. Termination shall not affect any right or obligation of any party which is accrued or vested prior to such termination.

     7.12 Entire Agreement. Except as provided in (i) the written benefit plans and programs referenced in paragraph 6.8 (and any agreements between Company and Executive that have been executed under such plans and programs) and (ii) any signed written agreement contemporaneously or hereafter executed by Company and Executive, this Agreement constitutes the entire agreement of the parties with regard to the subject matter hereof, and contains all the covenants, promises, representations, warranties and agreements between the parties with respect to employment of Executive by Company. Without limiting the scope of the preceding sentence, all understandings and agreements preceding the date of execution of this Agreement and relating to the subject matter hereof (other than the agreements described in clause (i) of the preceding sentence) are hereby null and void and of no further force and effect. Any modification of this Agreement will be effective only if it is in writing and signed by the party to be charged.

     7.13 Section 409A. The parties intend that this Agreement be interpreted in a manner to be exempt from the requirements of Section 409A of the Code and, where not so exempt, to be in compliance therewith. Executive (or his estate or beneficiary) shall have no right to dictate the taxable year in which any payment hereunder should be paid. Notwithstanding any provision of this Agreement to the contrary, only to the extent that this Agreement is subject to the requirements of Section 409A of the Code and is not exempted from such requirements, if at the time of Executive’s termination of employment with the Company, Executive is a “specified employee” as defined in Section 409A of the Code, no payment or benefit that results from Executive’s termination of employment will be provided until the date which is six months after the date of Executive’s termination of employment. Payments to which Executive would otherwise be entitled during the six-month period described above will be accumulated and paid in a lump sum on the first day of the seventh month after the date of Executive’s termination of employment. Notwithstanding anything to the contrary, to the extent required by Section 409A of the Code (a) the amount of expenses eligible for reimbursement or to be provided as an in-kind benefit under this Agreement with respect to a calendar year may not affect the expenses eligible for reimbursement or to be provided as an in-kind benefit in any other calendar year and (b) the right to reimbursement or in-kind benefits under this Agreement shall not be subject to liquidation or exchange for another benefit.

(Signature page follows)

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     IN WITNESS WHEREOF, the parties hereto have executed this Agreement on the first day of January, 2008, to be effective as of the Effective Date.

W-H ENERGY SERVICES, INC.
By:	/s/ Kenneth T. White, Jr.
	Name:	Kenneth T. White, Jr.
	Title:	Chairman, President and Chief Executive Officer
By:	/s/ Jeffrey L. Tepera
	Jeffrey L. Tepera

EX-10.3

Exhibit 10.3

AMENDED AND RESTATED EMPLOYMENT AGREEMENT

     THIS AMENDED AND RESTATED EMPLOYMENT AGREEMENT (as amended from time to time, this “Agreement”), effective as of January 1, 2008 is between W-H Energy Services, Inc., a Texas corporation (“Company”), and William J. Thomas (“Executive”).

W I T N E S S E T H:

     WHEREAS, Company and Executive are currently parties to an Employment Agreement effective as of January 1, 2004, as amended by a First Amendment thereto executed as of March 30, 2007 (such Employment Agreement, as so amended, the “Original Employment Agreement”); and

     WHEREAS, Company and Executive desire to amend and restate the Original Employment Agreement to reflect therein the amendments thereto effected by the First Amendment thereto and to make certain other amendments, including those required by Section 409A of the Internal Revenue Code of 1986, as amended (the “Code”).

     NOW, THEREFORE, for and in consideration of the mutual promises, covenants and obligations contained herein, Company and Executive agree as follows:

ARTICLE 1: EMPLOYMENT AND DUTIES

     1.1 Employment; Effective Date. Effective as of January 1, 2004 (the “Effective Date”), and continuing for the period of time set forth in Article 2 of this Agreement, Company agrees to employ Executive and Executive agrees to be employed by Company, subject to the terms and conditions of this Agreement.

     1.2 Positions. Company shall employ Executive in the position of Vice President and of Company, or in such other positions as the parties mutually may agree.

     1.3 Duties and Services. Executive agrees to serve in the position referred to in paragraph 1.2 and to perform diligently and to the best of his abilities the duties and services appertaining to such offices, as well as such additional duties and services appropriate to such offices which the parties mutually may agree upon from time to time. Executive’s employment shall also be subject to the policies maintained and established by Company that are of general applicability to Company’s executive employees; as such policies may be amended from time to time.

     1.4 Other Interests. Executive agrees, during the period of his employment by Company, to devote his primary business time, energy and best efforts to the business and affairs of Company and its affiliates and not to engage, directly or indirectly, in any other business or businesses, whether or not similar to that of Company, except with the consent of the Board of Directors. The foregoing notwithstanding, the parties recognize and agree that Executive may engage in other business activities that do not conflict with the business and affairs of Company or interfere with Executive’s performance of his duties hereunder, which shall be at the sole determination of the Company’s President and Chief Executive Officer.

     1.5 Duty of Loyalty. Executive acknowledges and agrees that Executive owes a fiduciary duty of loyalty to act at all times in the best interests of Company. In keeping with such duty, Executive shall make full disclosure to Company of all business opportunities pertaining to Company’s business and shall not appropriate for Executive’s own benefit business opportunities concerning Company’s business.

ARTICLE 2: TERM AND TERMINATION OF EMPLOYMENT

     2.1 Term. Unless sooner terminated pursuant to other provisions hereof, Company agrees to employ Executive for the period beginning on the Effective Date and ending on December 31, 2009 (the “Initial Expiration Date”); provided, however, that beginning on the Initial Expiration Date, and on each anniversary of the Initial Expiration Date thereafter, if this Agreement has not been terminated pursuant to paragraph 2.2 or 2.3, then said term of employment shall automatically be extended for an additional one-year period unless on or before the date that is 90 days prior to the first day of any such extension period either party shall give written notice to the other that no such automatic extension shall occur.

     2.2 Company’s Right to Terminate. Notwithstanding the provisions of paragraph 2.1, Company shall have the right to terminate Executive’s employment under this Agreement at any time for any of the following reasons:

     (i) upon Executive’s becoming incapacitated by accident, sickness or other circumstance which, in the reasonable opinion of a physician selected by Company, renders him mentally or physically incapable of performing the duties and services required of him hereunder;

     (ii) for cause, which for purposes of this Agreement shall mean Executive (A) has willfully breached any of his duties and obligations hereunder resulting in materially adverse consequences to Company or any of its affiliates, (B) has misappropriated funds or property of Company or any of its affiliates, or (C) has engaged in conduct that is materially adverse to the interests of Company or any of its affiliates; provided, however, that, prior to termination pursuant to clause (A), Company shall give Executive written notice of the grounds for termination and Executive shall have ten days after receipt thereof to cure same; or

     (iii) for any other reason whatsoever, in the sole discretion of the Board of Directors.

     2.3 Executive’s Right to Terminate. Notwithstanding the provisions of paragraph 2.1, Executive shall have the right to terminate his employment under this Agreement for any of the following reasons:

     (i) within 60 days of the initial existence of (A) a material breach by Company of any material provision of this Agreement, (B) a material decrease in Executive’s base salary; (C) a material decrease in the duties and responsibilities assigned to Executive as compared to the positions referred to in paragraph 1.2; or (D) Executive being required to relocate to a site more than 25 miles from his present business address; or

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     (ii) at any time after there is a Change in Control (as such term is defined in paragraph 6.1); or

     (iii) at any time for any other reason whatsoever, in the sole discretion of Executive;

provided, however, that in the case of a termination under paragraph 2.3(i), (A) Executive must provide Company with written notice of the event giving rise to the right of termination within 60 days of the initial existence thereof, and Company shall have 30 days to remedy the same and (B) in no event may the effective date of Executive’s termination be more than 24 months following the initial existence of the event giving rise to the right of termination.

     2.4 Notice of Termination. If Company or Executive desires to terminate Executive’s employment hereunder at any time prior to expiration of the term of employment as provided in paragraph 2.1, it or he shall do so by giving written notice to the other party that it or he has elected to terminate Executive’s employment hereunder and stating the effective date and reason for such termination, provided that no such action shall alter or amend any other provisions hereof or rights arising hereunder.

ARTICLE 3: COMPENSATION AND BENEFITS

     3.1 Base Salary. Commencing January 1, 2008, Executive shall receive a minimum annual base salary of four hundred thousand dollars ($400,000.00). Executive’s annual base salary shall be reviewed by the Board of Directors (or a committee thereof) on an annual basis, and, in the sole discretion of the Board of Directors (or such committee), such annual base salary may be increased, but not decreased, effective as of January 1 of each year. Executive’s annual base salary shall be paid during his employment hereunder in equal installments in accordance with the Company’s standard policy regarding payment of compensation to executives but no less frequently than monthly.

     3.2 Incentive Compensation. During his employment hereunder, Executive shall be eligible to receive incentive compensation up to a maximum of 125% of his annual base salary each calendar year as shall be determined in the sole discretion of the Board of Directors (or a committee thereof), which compensation, if any, shall be paid to Executive in the form of a lump-sum payment between January 1 and March 15 of the calendar year following the calendar year to which the incentive compensation relates.

     3.3 Other Perquisites. During his employment hereunder, Executive shall be afforded the following benefits as incidences of his employment:

     (i) Car Allowance - Company shall provide to Executive an automobile or automobile allowance as approved by the President and Chief Executive Officer, which shall be paid in equal installments on a monthly basis in accordance with the Company’s standard policy regarding payment of compensation to its other employees.

     (ii) Other Company Benefits - Executive and, to the extent applicable, Executive’s spouse, dependents and beneficiaries, shall be allowed to participate in the health and welfare plans and programs, including improvements or modifications of the

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same, which are now, or may hereafter be, available to the other executive officers of Company. Such plans and programs include, without limitation, health insurance, life insurance and disability insurance and vacation and sick leave plans, which may be maintained by Company. Company shall not, however, by reason of this paragraph be obligated to institute, maintain, or refrain from changing, amending, or discontinuing, any such plan or program, so long as such changes are similarly applicable to the other executive officers of Company.

ARTICLE 4: PROTECTION OF INFORMATION

     4.1 Disclosure to Executive. Company shall disclose to Executive, or place Executive in a position to have access to or develop, trade secrets or confidential information of Company or its affiliates; and/or shall entrust Executive with business opportunities of Company or its affiliates; and/or shall place Executive in a position to develop business good will on behalf of Company or its affiliates.

     4.2 Property of Company. All documents, drawings, memoranda, notes, records, files, correspondence, manuals, models, specifications, computer programs, e-mail, voice mail, electronic databases, maps, and all other writings or materials of any type embodying any information relating to Company or its business are and shall be the sole and exclusive property of Company. Upon termination of Executive’s employment by Company, for any reason, Executive promptly shall deliver the same, and all copies thereof, to Company. For the avoidance of doubt, this paragraph 4.2 shall not prohibit Executive from retaining his only personal property following termination or expiration of this Agreement.

     4.3 No Unauthorized Use or Disclosure. Executive will not, at any time during or after Executive’s employment by Company, make any unauthorized disclosure of any confidential business information or trade secrets of Company or its affiliates, or make any use thereof, except in the carrying out of Executive’s employment responsibilities hereunder. Affiliates of the Company shall be third party beneficiaries of Executive’s obligations under this paragraph. As a result of Executive’s employment by Company, Executive may also from time to time have access to, or knowledge of, confidential business information or trade secrets of third parties, such as customers, suppliers, partners, joint venturers, and the like, of Company and its affiliates. Executive also agrees to preserve and protect the confidentiality of such third party confidential information and trade secrets to the same extent, and on the same basis, as Company’s confidential business information and trade secrets.

     4.4 Remedies. Executive acknowledges that money damages would not be sufficient remedy for any breach of this Article by Executive, and Company shall be entitled to specific performance and injunctive relief as remedies for such breach or any threatened breach. Such remedies shall not be deemed the exclusive remedies for a breach of this Article, but shall be in addition to all remedies available at law or in equity to Company, including the recovery of damages from Executive.

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ARTICLE 5: NONCOMPETITION OBLIGATIONS

     5.1 In General. As part of the consideration for the compensation and benefits to be paid to Executive hereunder; to protect the trade secrets and confidential information of Company and its affiliates that have been and will in the future be disclosed or entrusted to Executive, the business good will of Company and its affiliates that has been and will in the future be developed in Executive, or the business opportunities that have been and will in the future be disclosed or entrusted to Executive by Company and its affiliates; and as an additional incentive for Company to enter into this Agreement, Company and Executive agree to the noncompetition obligations hereunder. Executive shall not, directly or indirectly for Executive or for others, in the State of Texas and in all parishes of the State of Louisiana:

     (i) engage in any business competitive with the business conducted by Company during the term of employment of Executive in such states; or

     (ii) render advice or services to, be employed by, acquire an ownership interest in, or otherwise assist, any other person, association, or entity who is engaged, directly or indirectly, in any business competitive with the business conducted by Company during the term of employment of Executive in such states with respect to such competitive business, except that Executive may hold up to 2% of the outstanding shares of any publicly held company engaged in such competitive activities.

The noncompetition obligations set forth above shall apply only during the period that Executive is employed by Company and for two years thereafter; provided, however, that such noncompetition obligations shall only apply after Executive’s termination of employment hereunder if such termination shall be as a result of a resignation by Executive other than under circumstances described in paragraph 2.3(i). For the avoidance of doubt, such obligations shall not apply following the termination or expiration of this Agreement under any other provision hereof.

     5.2 Enforcement and Remedies. Executive acknowledges that money damages would not be sufficient remedy for any breach of this Article by Executive, and Company shall be entitled to specific performance and injunctive relief as remedies for such breach or any threatened breach. Such remedies shall not be deemed the exclusive remedies for a breach of this Article, but shall be in addition to all remedies available at law or in equity to Company, including without limitation, the recovery of damages from Executive.

     5.3 Reformation. It is expressly understood and agreed that Company and Executive consider the restrictions contained in this Article to be reasonable and necessary to protect the proprietary information of Company. Nevertheless, if any of the aforesaid restrictions are found by a court having jurisdiction to be unreasonable, or overly broad as to geographic area or time, or otherwise unenforceable, the parties intend for the restrictions therein set forth to be modified by such court so as to be reasonable and enforceable and, as so modified by the court, to be fully enforced.

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ARTICLE 6: EFFECT OF TERMINATION ON COMPENSATION;
ADDITIONAL PAYMENTS

     6.1 Defined Terms. For purposes of this Article 6, the following terms shall have the meanings indicated:

     “Change in Control” means (i) a merger of Company with another entity, a consolidation involving Company, or the sale of all or substantially all of the assets of Company to another entity if, in any such case, (A) the holders of equity securities of Company immediately prior to such transaction or event do not beneficially own immediately after such transaction or event equity securities of the resulting entity entitled to 60% or more of the votes then eligible to be cast in the election of directors generally (or comparable governing body) of the resulting entity in substantially the same proportions that they owned the equity securities of Company immediately prior to such transaction or event or (B) the persons who were members of the Board of Directors immediately prior to such transaction or event shall not constitute at least a majority of the board of directors of the resulting entity immediately after such transaction or event, (ii) the dissolution or liquidation of Company, (iii) when any person or entity, including a “group” as contemplated by Section 13(d)(3) of the Securities Exchange Act of 1934, as amended, acquires or gains ownership or control (including, without limitation, power to vote) of more than 50% of the combined voting power of the outstanding securities of, (A) if Company has not engaged in a merger or consolidation, Company, or (B) if Company has engaged in a merger or consolidation, the resulting entity, or (iv) as a result of or in connection with a contested election of directors, the persons who were members of the Board of Directors immediately before such election shall cease to constitute a majority of the Board of Directors. For purposes of the preceding sentence, (1) “resulting entity” in the context of a transaction or event that is a merger, consolidation or sale of all or substantially all assets shall mean the surviving entity (or acquiring entity in the case of an asset sale) unless the surviving entity (or acquiring entity in the case of an asset sale) is a subsidiary of another entity and the holders of common stock of Company receive capital stock of such other entity in such transaction or event, in which event the resulting entity shall be such other entity, and (2) subsequent to the consummation of a merger or consolidation that does not constitute a Change in Control, the term “Company” shall refer to the resulting entity and the term “Board of Directors” shall refer to the board of directors (or comparable governing body) of the resulting entity.

     “Termination Benefits” means (i) a lump sum cash payment equal to 200% of the sum of (A) Executive’s annual base salary at the rate in effect under paragraph 3.1 on the date of termination of Executive’s employment and (B) the highest annual incentive compensation payment paid, or determined by the Board (or the applicable committee thereof) and to be paid, to Executive by Company (pursuant to paragraph 3.2 or otherwise) in respect of any of the three years immediately prior to the date of termination of Executive’s employment, and (ii) notwithstanding anything to the contrary set forth in the Company’s other applicable plans and agreements, all of the outstanding stock options, restricted awards and other equity based awards granted by Company to Executive shall become fully vested and immediately exercisable in full on the date of termination of Executive’s employment. Notwithstanding anything in this Agreement to

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the contrary, if Executive is entitled to Termination Benefits under any clause in this Agreement, then Executive shall not also be entitled to additional Termination Benefits under any other clause of this Agreement.

     6.2 By Expiration. If Executive’s employment hereunder shall terminate upon expiration of the term provided in paragraph 2.1 hereof because Executive has provided the notice contemplated in such paragraph to Company, then all compensation and all benefits to Executive hereunder shall continue to be provided until the expiration of such term and such compensation and benefits shall terminate contemporaneously with termination of his employment. If Executive’s employment hereunder shall terminate upon expiration of the term provided in paragraph 2.1 hereof because Company has provided the notice contemplated in such paragraph to Executive, then (i) all compensation and all benefits to Executive hereunder shall continue to be provided until the expiration of such term, (ii) such compensation and benefits shall terminate contemporaneously with termination of his employment, and (iii) Company shall provide Executive with the Termination Benefits. Any lump sum cash payment due to Executive pursuant to clause (iii) of the preceding sentence shall be paid to Executive within five business days of the date of Executive’s termination of employment with Company.

     6.3 By Company. If Executive’s employment hereunder shall be terminated by Company prior to expiration of the term provided in paragraph 2.1, then, upon such termination, regardless of the reason therefor, all compensation and benefits to Executive hereunder shall terminate contemporaneously with the termination of such employment; provided, however, that:

     (i) if such termination shall be for a reason encompassed by paragraph 2.2(i), then Company shall pay to Executive (or, in the event of Executive’s death, his designated beneficiary or his estate if Executive does not have a beneficiary designation on file with Company for this purpose) a lump-sum payment equal to six months of his base salary at the rate in effect under paragraph 3.1 on the date of such termination; and

     (ii) if such termination shall be for any reason other than those encompassed by paragraphs 2.2 (i) or (ii), then Company shall provide Executive with the Termination Benefits.

Any lump-sum cash payment due to Executive (or his designated beneficiary, as the case may be) pursuant to the preceding sentence shall be paid to Executive within five business days of the date of Executive’s termination of employment with Company.

     6.4 By Executive. If Executive’s employment hereunder shall be terminated by Executive prior to expiration of the term provided in paragraph 2.1, then, upon such termination, regardless of the reason therefor, all compensation and benefits to Executive hereunder shall terminate contemporaneously with the termination of such employment; provided, however, that:

     (i) if such termination occurs for a reason encompassed by paragraph 2.3(i), then Company shall provide Executive with the Termination Benefits; and

     (ii) if such termination shall occur within the 180-day period beginning on the date upon which a Change in Control occurs, then Company shall provide Executive with the Termination Benefits.

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Any lump sum cash payment due to Executive pursuant to this paragraph shall be paid to Executive within five business days of the date of Executive’s termination of employment with Company.

     6.5 Death of Executive. Upon the date of death of Executive, the Agreement shall terminate and Company shall pay to Executive’s designated beneficiary (or his estate if Executive does not have a beneficiary designation on file with Company for this purpose) a lump-sum payment equal to six months of his base salary at the rate in effect under paragraph 3.1 on the date of such termination, such payment to be made as soon as practicable following such death, but in no event later than the later of (i) the end of the calendar year of the date of death of Executive or (ii) the 75^th day following the date of death of Executive.

     6.6 Additional Payments by Company.

     (a) Notwithstanding anything to the contrary in this Agreement, in the event that any payment or distribution by Company to or for the benefit of Executive, whether paid or payable or distributed or distributable pursuant to the terms of this Agreement or otherwise (a “Payment”), would be subject to the excise tax imposed by Section 4999 of the Code or any interest or penalties with respect to such excise tax (such excise tax, together with any such interest or penalties, are hereinafter collectively referred to as the “Excise Tax”), Company shall pay to Executive an additional payment (a “Gross-up Payment”) in an amount such that after payment by Executive of all taxes (including any interest or penalties imposed with respect to such taxes), including any Excise Tax imposed on any Gross-up Payment, Executive retains an amount of the Gross-up Payment equal to the Excise Tax imposed upon the Payments. Company and Executive shall make an initial determination as to whether a Gross-up Payment is required and the amount of any such Gross-up Payment, and any Gross-up Payment so determined shall be paid to Executive as a lump-sum payment on the date the related Payment is made. Unless withheld and remitted by the Company, Executive shall timely remit any required Excise Tax payments to the Internal Revenue Service.

     (b) Executive shall notify Company in writing of any claim by the Internal Revenue Service which, if successful, would require Company to make a Gross-up Payment (or a Gross-up Payment in excess of that, if any, initially determined by Company and Executive) within 10 days of the receipt of such claim. Company shall notify Executive in writing at least 10 days prior to the due date of any response required with respect to such claim if it plans to contest the claim. If Company fails to timely notify Executive whether it will contest such claim or Company determines not to contest such claim, then Company shall immediately pay to Executive the portion of such claim, if any, which it has not previously paid to Executive. If Company decides to contest such claim, Executive shall cooperate fully with Company in such action; provided, however, Company shall bear and pay directly or indirectly all costs and expenses (including additional interest and penalties) incurred in connection with such action and shall indemnify and hold Executive harmless, on an after-tax basis, for any Excise Tax or income tax, including interest and penalties with respect thereto, imposed as a result of Company’s action.

     (c) Any Gross-up Payment, reimbursement, indemnification or in-kind provision of expenses under clause (b) shall be made by Company to Executive promptly after incurrence

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thereof by Executive but in no event later than the end of the calendar year next following the calendar year in which Executive remits the related taxes that are the subject of the audit or litigation to the Internal Revenue Service (or, if no taxes are remitted, the end of the calendar year following the calendar year in which the audit is completed, settled or otherwise resolved) provided, that Executive must provide reasonable documentation to Company to substantiate taxes paid and expenses incurred. If, as a result of Company’s action with respect to a claim, Executive receives a refund of any amount paid by Company with respect to such claim, Executive shall promptly pay such refund to Company.

     6.7 No Duty to Mitigate Losses. Executive shall have no duty to find new employment following the termination of his employment under circumstances which require Company to pay any amount to Executive pursuant to this Article 6. Any salary or remuneration received by Executive from a third party for the providing of personal services (whether by employment or by functioning as an independent contractor) following the termination of his employment under circumstances pursuant to which this Article 6 apply shall not reduce Company’s obligation to make a payment to Executive (or the amount of such payment) pursuant to the terms of this Article 6.

     6.8 Liquidated Damages. In light of the difficulties in estimating the damages for an early termination of this Agreement, Company and Executive hereby agree that the payments, if any, to be received by Executive pursuant to this Article 6 shall be received by Executive as liquidated damages. Employee shall have no liability for his termination of this Agreement in accordance with paragraph 2.3.

     6.9 Other Benefits. This Agreement governs the rights and obligations of Executive and Company with respect to Executive’s base salary and certain perquisites of employment. Except as expressly provided herein, Executive’s rights and obligations both during the term of his employment and thereafter with respect to stock options, restricted stock, incentive and deferred compensation, life insurance policies insuring the life of Executive, and other benefits under the plans and programs maintained by Company shall be governed by the separate agreements, plans and other documents and instruments governing such matters.

ARTICLE 7: MISCELLANEOUS

     7.1 Notices. For purposes of this Agreement, notices and all other communications provided for herein shall be in writing and shall be deemed to have been duly given when personally delivered or when mailed by United States registered or certified mail, return receipt requested, postage prepaid, addressed as follows:

If to Company to:	W-H Energy Services, Inc.
	2000 West Sam Houston Parkway South
	Suite 500
	Houston, Texas 77042
	Attention: Chief Executive Officer

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If to Executive to:	William J. Thomas
	4301 Sugar Oaks Road
	New Iberia, LA 70560

or to such other address as either party may furnish to the other in writing in accordance herewith, except that notices or changes of address shall be effective only upon receipt.

     7.2 Applicable Law. This Agreement is entered into under, and shall be governed for all purposes by, the laws of the State of Texas.

     7.3 No Waiver. No failure by either party hereto at any time to give notice of any breach by the other party of, or to require compliance with, any condition or provision of this Agreement shall be deemed a waiver of similar or dissimilar provisions or conditions at the same or at any prior or subsequent time.

     7.4 Severability. If a court of competent jurisdiction determines that any provision of this Agreement is invalid or unenforceable, then the invalidity or unenforceability of that provision shall not affect the validity or enforceability of any other provision of this Agreement, and all other provisions shall remain in full force and effect.

     7.5 Counterparts. This Agreement may be executed in one or more counterparts, each of which shall be deemed to be an original, but all of which together will constitute one and the same Agreement.

     7.6 Withholding of Taxes and Other Employee Deductions. Company may withhold from any benefits and payments made pursuant to this Agreement all federal, state, city and other taxes as may be required pursuant to any law or governmental regulation or ruling and all other normal employee deductions made with respect to Company’s employees generally.

     7.7 Headings. The paragraph headings have been inserted for purposes of convenience and shall not be used for interpretive purposes.

     7.8 Gender and Plurals. Wherever the context so requires, the masculine gender includes the feminine or neuter, and the singular number includes the plural and conversely.

     7.9 Affiliate. As used in this Agreement, the term “affiliate” shall mean any entity which owns or controls, is owned or controlled by, or is under common ownership or control with, Company.

     7.10 Assignment. This Agreement shall be binding upon and inure to the benefit of Company and any successor of Company, by merger or otherwise. Except as provided in the preceding sentence, this Agreement, and the rights and obligations of the parties hereunder, are personal and neither this Agreement, nor any right, benefit, or obligation of either party hereto, shall be subject to voluntary or involuntary assignment, alienation or transfer, whether by operation of law or otherwise, without the prior written consent of the other party.

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     7.11 Term. This Agreement has a term co-extensive with the term of employment provided in paragraph 2.1. Termination shall not affect any right or obligation of any party which is accrued or vested prior to such termination.

     7.12 Entire Agreement. Except as provided in (i) the written benefit plans and programs referenced in paragraph 6.8 (and any agreements between Company and Executive that have been executed under such plans and programs) and (ii) any signed written agreement contemporaneously or hereafter executed by Company and Executive, this Agreement constitutes the entire agreement of the parties with regard to the subject matter hereof, and contains all the covenants, promises, representations, warranties and agreements between the parties with respect to employment of Executive by Company. Without limiting the scope of the preceding sentence, all understandings and agreements preceding the date of execution of this Agreement and relating to the subject matter hereof (other than the agreements described in clause (i) of the preceding sentence) are hereby null and void and of no further force and effect. Any modification of this Agreement will be effective only if it is in writing and signed by the party to be charged.

     7.13 Section 409A. The parties intend that this Agreement be interpreted in a manner to be exempt from the requirements of Section 409A of the Code and, where not so exempt, to be in compliance therewith. Executive (or his estate or beneficiary) shall have no right to dictate the taxable year in which any payment hereunder should be paid. Notwithstanding any provision of this Agreement to the contrary, only to the extent that this Agreement is subject to the requirements of Section 409A of the Code and is not exempted from such requirements, if at the time of Executive’s termination of employment with the Company, Executive is a “specified employee” as defined in Section 409A of the Code, no payment or benefit that results from Executive’s termination of employment will be provided until the date which is six months after the date of Executive’s termination of employment. Payments to which Executive would otherwise be entitled during the six-month period described above will be accumulated and paid in a lump sum on the first day of the seventh month after the date of Executive’s termination of employment. Notwithstanding anything to the contrary, to the extent required by Section 409A of the Code (a) the amount of expenses eligible for reimbursement or to be provided as an in-kind benefit under this Agreement with respect to a calendar year may not affect the expenses eligible for reimbursement or to be provided as an in-kind benefit in any other calendar year and (b) the right to reimbursement or in-kind benefits under this Agreement shall not be subject to liquidation or exchange for another benefit.

(Signature page follows)

-11-

     IN WITNESS WHEREOF, the parties hereto have executed this Agreement on the first day of January, 2008, to be effective as of the Effective Date.

W-H ENERGY SERVICES, INC.
By:	/s/ Kenneth T. White, Jr.
Name:	Kenneth T. White, Jr.
Title:	Chairman, President and Chief Executive Officer
By:	/s/ William J. Thomas
	William J. Thomas

EX-10.8.C

Exhibit 10.8C

THIRD AMENDMENT TO CREDIT AGREEMENT

     THIS THIRD AMENDMENT TO CREDIT AGREEMENT (this “Third Amendment”), dated as of December 28, 2007, is entered into among W-H ENERGY SERVICES, INC., a Texas corporation (the “Borrower”), each Subsidiary Guarantor, the lenders listed on the signature pages hereof as Lenders (the “Lenders”), and WELLS FARGO BANK, NATIONAL ASSOCIATION, as Administrative Agent, Swing Line Lender and Issuer.

BACKGROUND

     A. The Borrower, the Lenders and the Administrative Agent are parties to that certain Credit Agreement, dated as of June 30, 2004, as amended by that certain First Amendment to Credit Agreement, dated as of May 5, 2005, and that certain Second Amendment to Credit Agreement, dated as of February 3, 2006 (the “Credit Agreement”). The terms defined in the Credit Agreement and not otherwise defined herein shall be used herein as defined in the Credit Agreement.

     B. The Borrower has requested an amendment to the Credit Agreement with respect to Capital Expenditures.

     C. The Lenders and the Administrative Agent hereby agree to amend the Credit Agreement, subject to the terms and conditions set forth herein.

     NOW, THEREFORE, in consideration of the covenants, conditions and agreements hereafter set forth, and for other good and valuable consideration, the receipt and adequacy of which are all hereby acknowledged, the Borrower, the Subsidiary Guarantors, the Lenders and the Administrative Agent covenant and agree as follows:

     1. AMENDMENTS.

     (a) Section 7.2.7 of the Credit Agreement is hereby amended to read as follows:

     Section 7.2.7 Capital Expenditures, etc. The Borrower will not, and will not permit any of its Subsidiaries to, make or commit to make Capital Expenditures in Fiscal Year 2007 or in any Fiscal Year thereafter in excess of $180,000,000 in aggregate amount.

     (b) Exhibit F, the Compliance Certificate, is hereby amended to be in the form of Exhibit F hereto.

     2. REPRESENTATIONS AND WARRANTIES TRUE; NO EVENT OF DEFAULT. By its execution and delivery hereof, the Borrower represents and warrants that, as of the date hereof:

     (a) the representations and warranties contained in the Credit Agreement and the other Loan Documents are true and correct in all material respects on and as of the date hereof as made on and as of such date (unless stated to relate solely to an earlier date, in which case such

1

representations and warranties shall be true and correct in all material respects as of such earlier date);

     (b) no event has occurred and is continuing which constitutes a Default or an Event of Default;

     (c) (i) the Borrower has full power and authority to execute and deliver this Third Amendment, (ii) this Third Amendment has been duly executed and delivered by the Borrower, and (iii) this Third Amendment and the Credit Agreement, as amended hereby, constitute the legal, valid and binding obligations of the Borrower, enforceable in accordance with their respective terms, except as enforceability may be limited by applicable Debtor Relief Laws and by general principles of equity (regardless of whether enforcement is sought in a proceeding in equity or at law) and except as rights to indemnity may be limited by federal or state securities laws;

     (d) neither the execution, delivery and performance of this Third Amendment, or the Credit Agreement, as amended hereby, nor the consummation of any transactions contemplated herein or therein, will conflict with or contravene (i) any Organizational Document of the Borrower, (ii) any law or governmental regulation or court decree or order binding on or affecting the Borrower that could reasonably be expected to have a Material Adverse Effect, or (iii) any indenture, agreement or other instrument to which the Borrower or any of its property is subject, that could reasonably be expected to have a Material Adverse Effect; and

     (e) no authorization, approval, consent, or other action by, notice to, or filing with, any governmental authority or other Person not previously obtained or made is required for the (i) due execution, delivery or performance by the Borrower of this Third Amendment, or (ii) the acknowledgment by any Subsidiary Guarantor of this Third Amendment.

     3. CONDITIONS TO EFFECTIVENESS. This Third Amendment shall be effective upon satisfaction or completion of the following:

     (a) the Administrative Agent shall have received counterparts of this Third Amendment executed by Lenders comprising the Required Lenders;

     (b) the Administrative Agent shall have received counterparts of this Third Amendment executed by the Borrower and acknowledged by each Subsidiary Guarantor; and

     (c) the Administrative Agent shall have received, in form and substance satisfactory to the Administrative Agent and its counsel, such other documents, certificates and instruments as the Administrative Agent shall require.

     4. REFERENCE TO THE CREDIT AGREEMENT.

     (a) Upon the effectiveness of this Third Amendment, each reference in the Credit Agreement to “this Agreement”, “hereunder”, or words of like import shall mean and be a reference to the Credit Agreement, as affected and amended hereby.

2

     (b) The Credit Agreement, as amended by the amendments referred to above, shall remain in full force and effect and is hereby ratified and confirmed.

     5. COSTS, EXPENSES AND TAXES. The Borrower agrees to pay on demand all out-of-pocket costs and expenses of the Administrative Agent in connection with the preparation, reproduction, execution and delivery of this Third Amendment and the other instruments and documents to be delivered hereunder (including the reasonable fees and out-of-pocket expenses of counsel for the Administrative Agent with respect thereto).

     6. SUBSIDIARY GUARANTOR’S ACKNOWLEDGMENT. By signing below, each Subsidiary Guarantor (a) acknowledges, consents and agrees to the execution, delivery and performance by the Borrower of this Third Amendment, (b) acknowledges and agrees that its obligations in respect of its Subsidiary Guaranty are not released, diminished, waived, modified, impaired or affected in any manner by this Third Amendment or any of the provisions contemplated herein, (c) ratifies and confirms its obligations under its Subsidiary Guaranty, and (d) acknowledges and agrees that it has no claims or offsets against, or defenses or counterclaims to, its Subsidiary Guaranty.

     7. EXECUTION IN COUNTERPARTS. This Third Amendment may be executed in any number of counterparts and by different parties hereto in separate counterparts, each of which when so executed and delivered shall be deemed to be an original and all of which when taken together shall constitute but one and the same instrument. For purposes of this Third Amendment, a counterpart hereof (or signature page thereto) signed and transmitted by any Person party hereto to the Administrative Agent (or its counsel) by facsimile machine, telecopier or electronic mail is to be treated as an original. The signature of such Person thereon, for purposes hereof, is to be considered as an original signature, and the counterpart (or signature page thereto) so transmitted is to be considered to have the same binding effect as an original signature on an original document.

     8. GOVERNING LAW; BINDING EFFECT. This Third Amendment shall be governed by and construed in accordance with the internal laws of the State of Texas, provided that each party shall retain all rights arising under federal law, and shall be binding upon the parties hereto and their respective successors and assigns.

     9. HEADINGS. Section headings in this Third Amendment are included herein for convenience of reference only and shall not constitute a part of this Third Amendment for any other purpose.

ENTIRE AGREEMENT. THE CREDIT AGREEMENT, AS AMENDED BY THIS THIRD AMENDMENT, AND THE OTHER LOAN DOCUMENTS REPRESENT THE FINAL AGREEMENT BETWEEN THE PARTIES AND MAY NOT BE CONTRADICTED BY EVIDENCE OF PRIOR, CONTEMPORANEOUS, OR SUBSEQUENT ORAL AGREEMENTS BETWEEN THE PARTIES. THERE ARE NO UNWRITTEN ORAL AGREEMENTS BETWEEN THE PARTIES.

3

          IN WITNESS WHEREOF, this Third Amendment is executed as of the date first set forth above.

W-H ENERGY SERVICES, INC.
By:	/s/ Ernesto Bautista III
	Ernesto Bautista III
	Vice President, Chief Financial Officer and Assistant Secretary

4

WELLS FARGO BANK, NATIONAL ASSOCIATION, as Administrative Agent, as Swing Line Lender, as Issuer and as Lender
By:	/s/ Michael W. Nygren
	Michael W. Nygren
	Vice President

5

JPMORGAN CHASE BANK, NA, successor by merger with Bank One, NA, as Co-Syndication Agent and as a Lender
By:
	Name:
	Title:

6

THE BANK OF NOVA SCOTIA , as Co-Documentation Agent and as a Lender
By:
	Name:
	Title:

7

COMERICA BANK, as Co-Syndication Agent and as a Lender
By:
	Name:
	Title:

8

CITIBANK, N.A., formerly known as First American Bank, S.S.B., as Managing Agent and as a Lender
By:
	Name:
	Title:

9

WACHOVIA BANK, NATIONAL ASSOCIATION, as Co-Documentation Agent and as a Lender
By:
	Name:
	Title:

10

SCOTIABANC INC.
By:
	Name:
	Title:

11

BANK OF SCOTLAND
By:
	Name:
	Title:

12

DnB NOR BANK ASA
By:
	Name:
	Title:
By:
	Name:
	Title:

13

CAPITAL ONE, N.A.
By:
	Name:
	Title:

14

NATIXIS
By:
	Name:
	Title:
By:
	Name:
	Title:

15

REGIONS BANK, successor by merger with Union Planters Bank NA
By:
	Name:
	Title:

16

ACKNOWLEDGED AND AGREED:

AGRI-EMPRESA, INC.
AGRI-EMPRESA TRANSPORTATION, INC.
BOYD’S BIT SERVICE, INC.
BOYD’S HOLDINGS, L.L.C.
COIL TUBING SERVICES, L.L.C.
DIAMOND WIRELINE SERVICES, INC.
DUTCH, INC.
DYNA DRILL TECHNOLOGIES, INC.
GRINDING AND SIZING COMPANY, INC.
INTEGRITY INDUSTRIES, INC.
PATHFINDER ENERGY HOLDINGS, INC.
PATHFINDER ENERGY, INC.
PATHFINDER MEXICO HOLDINGS, L.L.C.
PATHFINDER ENERGY SERVICES HOLDINGS, INC.
PATHFINDER ENERGY SERVICES, INC.
PERF-O-LOG, INC.
STG TRANSPORTATION, INC.
SUPERIOR LONESTAR GP, L.L.C.
SUPERIOR LONESTAR LP, L.L.C.
THOMAS ENERGY SERVICES, INC.
W-H ACQUISITIONS, LLC
W-H DRILLING SOLUTIONS, INC.
W-H ENERGY HOLDINGS, INC.
W-H ENERGY HOLDINGS II, INC.
WHES MANAGEMENT, INC.
ENTERTECH WIRELINE SERVICES, L.P.
LSDI, L.P.
           By:      Superior Lonestar GP, L.L.C.
PATHFINDER ENERGY SERVICES, LP
          By:      Pathfinder Energy, Inc.
PATHFINDER INTERNATIONAL, L.P.
          By:      WHES Management, Inc.
SUPERIOR PACKAGING & DISTRIBUTION, L.P.
          By:     Superior Lonestar GP, L.L.C.
U.S. CLAY, L.P.
          By:      Agri-Empresa, Inc.
W-H ENERGY FINANCING, L.P.
          By:     WHES Management, Inc.

17

W-H ENERGY SERVICES, L.P.
	By:      WHES Management, Inc.
By:	/s/ Ernesto Bautista III
	Ernesto Bautista III
	Vice President, Chief Financial Officer and
	Assistant Secretary for all
WHES PARTNERS, INC.
By:	/s/ Kenneth T. White, Jr.
	Kenneth T. White, Jr.
	President

18

EXHIBIT F

COMPLIANCE CERTIFICATE

W-H Energy Services, Inc.

     This Compliance Certificate is delivered pursuant to clause (c) of Section 7.1.1 of the Credit Agreement dated as of June 30, 2004 (such agreement, together with all amendments and restatements, the “Credit Agreement”), among W-H Energy Services, Inc., a Texas corporation (the “Borrower”), the various financial institutions as are, or may from time to time become, parties thereto (the “Lenders”), and Wells Fargo Bank, National Association, as Administrative Agent. Unless otherwise defined herein or the context otherwise requires, terms used herein or in any of the attachments hereto have the meanings provided in the Credit Agreement.

     The Borrower hereby certifies, represents and warrants in respect of the period (the “Computation Period”) commencing on                                            , and ending on                                            (such latter date being the “Computation Date”):

     (a) As of the Computation Date, no Default had occurred and was continuing.

     (b) As of the Computation Date, the Borrower is in compliance with Sections 7.2.2, 7.2.3, 7.2.5, 7.2.6, 7.2.8, 7.2.9 and 7.2.13 of the Credit Agreement.

     (c) EBITDA was $                    , as computed on Attachment 1 hereto.

     (d) The Leverage Ratio was ___, as computed on Attachment 2 hereto. The maximum Leverage Ratio permitted pursuant to clause (a) of Section 7.2.4 of the Credit Agreement on the Computation Date was ___:1: Based upon such Leverage Ratio, (x) the Applicable Margin for Base Rate Loans is ___%, (y) the Applicable Margin for LIBO Rate Loans is ___%, and (z) the Applicable Commitment Fee is ___%.

     (e) The Interest Coverage Ratio was                     , as computed on Attachment 3 hereto. The minimum Interest Coverage Ratio permitted pursuant to clause (b) of Section 7.2.4 of the Credit Agreement on the Computation Date was 3.00:1.

     (f) Net Worth was $                    , as computed on Attachment 4 hereto. The minimum Net Worth permitted pursuant to clause (c) of Section 7.2.4 of the Credit Agreement on the Computation Date was $                    , as computed on Attachment 4 hereto.

     (g) Year-to-date Capital Expenditures are $                    , as computed on Attachment 5 hereto. The maximum Capital Expenditures permitted pursuant to Section 7.2.7 of the Credit Agreement during the current Fiscal Year is $180,000,000.

     (h) Availability as of the Computation Date was                     , as computed on Attachment 6 hereto.

     Except as indicated on Item A of Attachment 7 hereto, the chief executive offices of the Borrower and all Subsidiaries and any other office where the Borrower or any Subsidiary keeps

Exhibit F - 1

records concerning the Receivables (as defined in the Security Agreement) or any originals of all chattel paper which evidences Receivables are as set forth on the relevant item of the relevant Security Agreement or in a previous Compliance Certificate.

     Neither the Borrower nor any Subsidiary has changed its legal name, jurisdiction of organization, or type of entity (except as listed in the Borrower Security Agreement or the Subsidiary Security Agreement (as applicable)) or been the subject of any merger or other reorganization except (i) as indicated on Item B of Attachment 7 hereto, (ii) as set forth on the relevant item of the relevant Security Agreement or (iii) as set forth in a previous Compliance Certificate.

     IN WITNESS WHEREOF, the Borrower has caused this Compliance Certificate to be executed and delivered, and the certification and warranties contained herein to be made, by its Chief Financial Authorized Officer on                     .

W-H ENERGY SERVICES, INC.
By:
	Name:
	Title:

Exhibit F - 2

Attachment 1
(to __/__/__ Compliance
Certificate)

EBITDA
on Computation Date

1. Net Income (the net income or net loss of the Borrower and its Subsidiaries for the Computation Period on a consolidated basis, excluding extraordinary gains and extraordinary losses)	$
2. the amount deducted in determining Net Income representing non-cash charges, including depreciation and amortization	$
3. the amount deducted in determining Net Income representing income tax expense (whether paid or deferred)	$
4. the amount deducted in determining Net Income representing Interest Expense (the aggregate consolidated interest expense of the Borrower and its Subsidiaries for the Computation Period, as determined in accordance with GAAP, including the portion of any payments made in respect of Capitalized Lease Liabilities allocable to interest expense, but excluding (to the extent included in interest expense), up-front fees and expenses and other deferred financing costs incurred in connection with any Permitted Acquisitions and not to exceed $3,300,000 for fees and expenses and other deferred financing costs incurred in connection with the Existing Credit Agreement)	$
5. the amount deducted in determining Net Income representing Non-Recurring Costs ((i) non-recurring charges and reserves, and (ii) non-recurring fees, expenses and non-capitalized financing costs incurred in connection with permitted Refinancing Debt or any Permitted Acquisitions)	$

Exhibit F - 3

6. an amount equal to all non-cash credits included in determining Net Income	$
7. EBITDA: The sum of Items 1 through 5 minus Item 6	$

Exhibit F - 4

Attachment 2
(to __/__/__ Compliance
Certificate)

LEVERAGE RATIO
on Computation Date

1. Debt of the Borrower and its Subsidiaries on a consolidated basis outstanding on the Computation Date	$
2. EBITDA (on a Pro Forma Basis to the extent of any acquisitions or dispositions during such period as if such acquisition or disposition was made on the first day of such period) (see Item 7 of Attachment  1)	$
3. LEVERAGE RATIO: ratio of Item 1 to Item 2		:1

Exhibit F - 5

Attachment 3
(to __/__/__ Compliance
Certificate)

INTEREST COVERAGE RATIO
on Computation Date

1. EBITDA (on a Pro Forma Basis to the extent of any acquisitions or dispositions during such period as if such acquisition or disposition was made on the first day of such period) (see Item 7 of Attachment  1)	$
2. Interest Expense for the Computation Period	$
3. INTEREST COVERAGE RATIO: the ratio of Item 1 to Item 2		:1

Exhibit F - 6

Attachment 4
(to __/__/__ Compliance
Certificate)

NET WORTH
on Computation Date

1. Net Worth (total stockholders’ equity for the Borrower and Subsidiaries, on a consolidated basis, determined in accordance with GAAP)	$
2. $204,484,800	$	204,484,800
3. 50% of Net Income earned after March 31, 2004 (excluding any Fiscal Quarter in which there is a loss)	$
4. 75% of any Net Issuance Proceeds received after March 31, 2004 by the Borrower or any of its Subsidiaries	$
5. 75% of the net worth of any Person that becomes a Subsidiary to the extent that the purchase price therefor is paid in Capital Stock of the Borrower or any of its Subsidiaries or pursuant to the conversion or exchange of any convertible subordinated debt or redeemable preferred stock into Capital Stock of the Borrower or any of its Subsidiaries	$
6. MINIMUM NET WORTH: The sum of Items 2, 3, 4 and 5	$

Exhibit F - 7

Attachment 5
(to __/__/__ Compliance
Certificate)

CAPITAL EXPENDITURES
on Computation Date

1. aggregate amount of all expenditures during current Fiscal Year (without duplication) with respect to Borrower and its Subsidiaries for fixed or capital assets made during such period which, in accordance with GAAP, would be classified as capital expenditures	$
2. aggregate amount of all Capitalized Lease Liabilities during current Fiscal Year (includes all monetary obligations of Borrower and its Subsidiaries determined on a consolidated basis under any leasing or similar arrangement which, in accordance with GAAP, would be classified as capitalized leases)	$
3. aggregate amount of expenditures for the purchase of replacement assets using Net Disposition Proceeds or Casualty Proceeds (provided such expenditures were made within 365 days of receipt)	$
4. aggregate amount of expenditures for the purchase of replacement assets relating to “lost-in-hole” assets or damaged beyond repair or not returned, in each case using proceeds received in respect of such loss (if expended within one year of receipt of the applicable proceeds)	$
5. with respect to the trade-in of replaced assets, the aggregate trade-in value of such assets	$
6. CAPITAL EXPENDITURES: with respect to the Borrower and any of its Subsidiaries, during current Fiscal Year, Item 1 plus Item 2 minus Item 3 minus Item 4, minus Item 5	$

Exhibit F - 8

Attachment 6
(to __/__/__ Compliance
Certificate)

AVAILABILITY
on Computation Date

1. Revolving Loan Commitment Amount	$
2. outstanding principal amount of all Revolving Loans	$
3. Letter of Credit Outstandings	$
4. outstanding principal amount of all Swing Line Loans	$
5. the sum of Items 2, 3, and 4	$
6. AVAILABILITY: Item 1 minus Item 5	$

Exhibit F - 9

Attachment 7
(to __/__/__ Compliance
Certificate)

Item A. Change of Place of Business, etc.

Name of Borrower or Subsidiary	New Address
1.
2.
3.

Item B. Change of Name, Jurisdiction of Organization, or Entity

	New Name, Jurisdiction of Organization, or
Name of Borrower or Subsidiary	Entity
1.
2.
3.

Exhibit F - 10

EX-10.9

Exhibit 10.9

AMENDED AND RESTATED EMPLOYMENT AGREEMENT

     THIS AMENDED AND RESTATED EMPLOYMENT AGREEMENT (as amended from time to time, this “Agreement”), effective as of January 1, 2008 is between W-H Energy Services, Inc., a Texas corporation (“Company”), and Glen J. Ritter (“Executive”).

W I T N E S S E T H:

     WHEREAS, Company and Executive are currently parties to an Employment Agreement effective as of April 14, 2005, as amended by a First Amendment thereto executed as of March 30, 2007 (such Employment Agreement, as so amended, the “Original Employment Agreement”); and

     WHEREAS, Company and Executive desire to amend and restate the Original Employment Agreement to reflect therein the amendments thereto effected by the First Amendment thereto and to make certain other amendments, including those required by Section 409A of the Internal Revenue Code of 1986, as amended (the “Code”).

     NOW, THEREFORE, for and in consideration of the mutual promises, covenants and obligations contained herein, Company and Executive agree as follows:

ARTICLE 1: EMPLOYMENT AND DUTIES

     1.1 Employment; Effective Date. Effective as of April 14, 2005 (the “Effective Date”), and continuing for the period of time set forth in Article 2 of this Agreement, Company agrees to employ Executive and Executive agrees to be employed by Company, subject to the terms and conditions of this Agreement.

     1.2 Positions. Company shall employ Executive in the position of Vice President of Company, or in such other positions as the parties mutually may agree.

     1.3 Duties and Services. Executive agrees to serve in the position referred to in paragraph 1.2 and to perform diligently and to the best of his abilities the duties and services appertaining to such offices, as well as such additional duties and services appropriate to such offices which the parties mutually may agree upon from time to time. Executive’s employment shall also be subject to the policies maintained and established by Company that are of general applicability to Company’s executive employees; as such policies may be amended from time to time.

     1.4 Other Interests. Executive agrees, during the period of his employment by Company, to devote his primary business time, energy and best efforts to the business and affairs of Company and its affiliates and not to engage, directly or indirectly, in any other business or businesses, whether or not similar to that of Company, except with the consent of the Board of Directors. The foregoing notwithstanding, the parties recognize and agree that Executive may engage in other business activities that do not conflict with the business and affairs of Company or interfere with Executive’s performance of his duties hereunder, which shall be at the sole determination of the Company’s President and Chief Executive Officer.

     1.5 Duty of Loyalty. Executive acknowledges and agrees that Executive owes a fiduciary duty of loyalty to act at all times in the best interests of Company. In keeping with such duty, Executive shall make full disclosure to Company of all business opportunities pertaining to Company’s business and shall not appropriate for Executive’s own benefit business opportunities concerning Company’s business.

ARTICLE 2: TERM AND TERMINATION OF EMPLOYMENT

     2.1 Term. Unless sooner terminated pursuant to other provisions hereof, Company agrees to employ Executive for the period beginning on the Effective Date and ending on December 31, 2009 (the “Initial Expiration Date”); provided, however, that beginning on the Initial Expiration Date, and on each anniversary of the Initial Expiration Date thereafter, if this Agreement has not been terminated pursuant to paragraph 2.2 or 2.3, then said term of employment shall automatically be extended for an additional one-year period unless on or before the date that is 90 days prior to the first day of any such extension period either party shall give written notice to the other that no such automatic extension shall occur.

     2.2 Company’s Right to Terminate. Notwithstanding the provisions of paragraph 2.1, Company shall have the right to terminate Executive’s employment under this Agreement at any time for any of the following reasons:

     (i) upon Executive’s becoming incapacitated by accident, sickness or other circumstance which, in the reasonable opinion of a physician selected by Company, renders him mentally or physically incapable of performing the duties and services required of him hereunder;

     (ii) for cause, which for purposes of this Agreement shall mean Executive (A) has willfully breached any of his duties and obligations hereunder resulting in materially adverse consequences to Company or any of its affiliates, (B) has misappropriated funds or property of Company or any of its affiliates, or (C) has engaged in conduct that is materially adverse to the interests of Company or any of its affiliates; provided, however, that, prior to termination pursuant to clause (A), Company shall give Executive written notice of the grounds for termination and Executive shall have ten days after receipt thereof to cure same; or

     (iii) for any other reason whatsoever, in the sole discretion of the Board of Directors.

     2.3 Executive’s Right to Terminate. Notwithstanding the provisions of paragraph 2.1, Executive shall have the right to terminate his employment under this Agreement for any of the following reasons:

     (i) within 60 days of the initial existence of (A) a material breach by Company of any material provision of this Agreement, (B) a material decrease in Executive’s base salary; (C) a material decrease in the duties and responsibilities assigned to Executive as compared to the positions referred to in paragraph 1.2; or (D) Executive being required to relocate to a site more than 25 miles from his present business address; or

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     (ii) at any time after there is a Change in Control (as such term is defined in paragraph 6.1); or

     (iii) at any time for any other reason whatsoever, in the sole discretion of Executive;

provided, however, that in the case of a termination under paragraph 2.3(i), (A) Executive must provide Company with written notice of the event giving rise to the right of termination within 60 days of the initial existence thereof, and Company shall have 30 days to remedy the same and (B) in no event may the effective date of Executive’s termination be more than 24 months following the initial existence of the event giving rise to the right of termination.

     2.4 Notice of Termination. If Company or Executive desires to terminate Executive’s employment hereunder at any time prior to expiration of the term of employment as provided in paragraph 2.1, it or he shall do so by giving written notice to the other party that it or he has elected to terminate Executive’s employment hereunder and stating the effective date and reason for such termination, provided that no such action shall alter or amend any other provisions hereof or rights arising hereunder.

ARTICLE 3: COMPENSATION AND BENEFITS

     3.1 Base Salary. Commencing January 1, 2008, Executive shall receive a minimum annual base salary of four hundred thousand dollars ($400,000.00). Executive’s annual base salary shall be reviewed by the Board of Directors (or a committee thereof) on an annual basis, and, in the sole discretion of the Board of Directors (or such committee), such annual base salary may be increased, but not decreased, effective as of January 1 of each year. Executive’s annual base salary shall be paid during his employment hereunder in equal installments in accordance with the Company’s standard policy regarding payment of compensation to executives but no less frequently than monthly.

     3.2 Incentive Compensation. During his employment hereunder, Executive shall be eligible to receive incentive compensation up to a maximum of 125% of his annual base salary each calendar year as shall be determined in the sole discretion of the Board of Directors (or a committee thereof), which compensation, if any, shall be paid to Executive in the form of a lump-sum payment between January 1 and March 15 of the calendar year following the calendar year to which the incentive compensation relates.

     3.3 Other Perquisites. During his employment hereunder, Executive shall be afforded the following benefits as incidences of his employment:

     (i) Car Allowance - Company shall provide to Executive an automobile or automobile allowance as approved by the President and Chief Executive Officer, which shall be paid in equal installments on a monthly basis in accordance with the Company’s standard policy regarding payment of compensation to its other employees.

     (ii) Other Company Benefits - Executive and, to the extent applicable, Executive’s spouse, dependents and beneficiaries, shall be allowed to participate in the health and welfare plans and programs, including improvements or modifications of the

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same, which are now, or may hereafter be, available to the other executive officers of Company. Such plans and programs include, without limitation, health insurance, life insurance and disability insurance and vacation and sick leave plans, which may be maintained by Company. Company shall not, however, by reason of this paragraph be obligated to institute, maintain, or refrain from changing, amending, or discontinuing, any such plan or program, so long as such changes are similarly applicable to the other executive officers of Company.

ARTICLE 4: PROTECTION OF INFORMATION

     4.1 Disclosure to Executive. Company shall disclose to Executive, or place Executive in a position to have access to or develop, trade secrets or confidential information of Company or its affiliates; and/or shall entrust Executive with business opportunities of Company or its affiliates; and/or shall place Executive in a position to develop business good will on behalf of Company or its affiliates.

     4.2 Property of Company. All documents, drawings, memoranda, notes, records, files, correspondence, manuals, models, specifications, computer programs, e-mail, voice mail, electronic databases, maps, and all other writings or materials of any type embodying any information relating to Company or its business are and shall be the sole and exclusive property of Company. Upon termination of Executive’s employment by Company, for any reason, Executive promptly shall deliver the same, and all copies thereof, to Company. For the avoidance of doubt, this paragraph 4.2 shall not prohibit Executive from retaining his only personal property following termination or expiration of this Agreement.

     4.3 No Unauthorized Use or Disclosure. Executive will not, at any time during or after Executive’s employment by Company, make any unauthorized disclosure of any confidential business information or trade secrets of Company or its affiliates, or make any use thereof, except in the carrying out of Executive’s employment responsibilities hereunder. Affiliates of the Company shall be third party beneficiaries of Executive’s obligations under this paragraph. As a result of Executive’s employment by Company, Executive may also from time to time have access to, or knowledge of, confidential business information or trade secrets of third parties, such as customers, suppliers, partners, joint venturers, and the like, of Company and its affiliates. Executive also agrees to preserve and protect the confidentiality of such third party confidential information and trade secrets to the same extent, and on the same basis, as Company’s confidential business information and trade secrets.

     4.4 Remedies. Executive acknowledges that money damages would not be sufficient remedy for any breach of this Article by Executive, and Company shall be entitled to specific performance and injunctive relief as remedies for such breach or any threatened breach. Such remedies shall not be deemed the exclusive remedies for a breach of this Article, but shall be in addition to all remedies available at law or in equity to Company, including the recovery of damages from Executive.

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ARTICLE 5: NONCOMPETITION OBLIGATIONS

     5.1 In General. As part of the consideration for the compensation and benefits to be paid to Executive hereunder; to protect the trade secrets and confidential information of Company and its affiliates that have been and will in the future be disclosed or entrusted to Executive, the business good will of Company and its affiliates that has been and will in the future be developed in Executive, or the business opportunities that have been and will in the future be disclosed or entrusted to Executive by Company and its affiliates; and as an additional incentive for Company to enter into this Agreement, Company and Executive agree to the noncompetition obligations hereunder. Executive shall not, directly or indirectly for Executive or for others, in the State of Texas and in all parishes of the State of Louisiana:

     (i) engage in any business competitive with the business conducted by Company during the term of employment of Executive in such states; or

     (ii) render advice or services to, be employed by, acquire an ownership interest in, or otherwise assist, any other person, association, or entity who is engaged, directly or indirectly, in any business competitive with the business conducted by Company during the term of employment of Executive in such states with respect to such competitive business, except that Executive may hold up to 2% of the outstanding shares of any publicly held company engaged in such competitive activities.

The noncompetition obligations set forth above shall apply only during the period that Executive is employed by Company and for two years thereafter; provided, however, that such noncompetition obligations shall only apply after Executive’s termination of employment hereunder if such termination shall be as a result of a resignation by Executive other than under circumstances described in paragraph 2.3(i). For the avoidance of doubt, such obligations shall not apply following the termination or expiration of this Agreement under any other provision hereof.

     5.2 Enforcement and Remedies. Executive acknowledges that money damages would not be sufficient remedy for any breach of this Article by Executive, and Company shall be entitled to specific performance and injunctive relief as remedies for such breach or any threatened breach. Such remedies shall not be deemed the exclusive remedies for a breach of this Article, but shall be in addition to all remedies available at law or in equity to Company, including without limitation, the recovery of damages from Executive.

     5.3 Reformation. It is expressly understood and agreed that Company and Executive consider the restrictions contained in this Article to be reasonable and necessary to protect the proprietary information of Company. Nevertheless, if any of the aforesaid restrictions are found by a court having jurisdiction to be unreasonable, or overly broad as to geographic area or time, or otherwise unenforceable, the parties intend for the restrictions therein set forth to be modified by such court so as to be reasonable and enforceable and, as so modified by the court, to be fully enforced.¹

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ARTICLE 6: EFFECT OF TERMINATION ON COMPENSATION;
ADDITIONAL PAYMENTS

     6.1 Defined Terms. For purposes of this Article 6, the following terms shall have the meanings indicated:

     “Change in Control” means (i) a merger of Company with another entity, a consolidation involving Company, or the sale of all or substantially all of the assets of Company to another entity if, in any such case, (A) the holders of equity securities of Company immediately prior to such transaction or event do not beneficially own immediately after such transaction or event equity securities of the resulting entity entitled to 60% or more of the votes then eligible to be cast in the election of directors generally (or comparable governing body) of the resulting entity in substantially the same proportions that they owned the equity securities of Company immediately prior to such transaction or event or (B) the persons who were members of the Board of Directors immediately prior to such transaction or event shall not constitute at least a majority of the board of directors of the resulting entity immediately after such transaction or event, (ii) the dissolution or liquidation of Company, (iii) when any person or entity, including a “group” as contemplated by Section 13(d)(3) of the Securities Exchange Act of 1934, as amended, acquires or gains ownership or control (including, without limitation, power to vote) of more than 50% of the combined voting power of the outstanding securities of, (A) if Company has not engaged in a merger or consolidation, Company, or (B) if Company has engaged in a merger or consolidation, the resulting entity, or (iv) as a result of or in connection with a contested election of directors, the persons who were members of the Board of Directors immediately before such election shall cease to constitute a majority of the Board of Directors. For purposes of the preceding sentence, (1) “resulting entity” in the context of a transaction or event that is a merger, consolidation or sale of all or substantially all assets shall mean the surviving entity (or acquiring entity in the case of an asset sale) unless the surviving entity (or acquiring entity in the case of an asset sale) is a subsidiary of another entity and the holders of common stock of Company receive capital stock of such other entity in such transaction or event, in which event the resulting entity shall be such other entity, and (2) subsequent to the consummation of a merger or consolidation that does not constitute a Change in Control, the term “Company” shall refer to the resulting entity and the term “Board of Directors” shall refer to the board of directors (or comparable governing body) of the resulting entity.

     “Termination Benefits” means (i) a lump sum cash payment equal to 200% of the sum of (A) Executive’s annual base salary at the rate in effect under paragraph 3.1 on the date of termination of Executive’s employment and (B) the highest annual incentive compensation payment paid, or determined by the Board (or the applicable committee thereof) and to be paid, to Executive by Company (pursuant to paragraph 3.2 or otherwise) in respect of any of the three years immediately prior to the date of termination of Executive’s employment, and (ii) notwithstanding anything to the contrary set forth in the Company’s other applicable plans and agreements, all of the outstanding stock options, restricted awards and other equity based awards granted by Company to Executive shall become fully vested and immediately exercisable in full on the date of termination of Executive’s employment. Notwithstanding anything in this Agreement to

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the contrary, if Executive is entitled to Termination Benefits under any clause in this Agreement, then Executive shall not also be entitled to additional Termination Benefits under any other clause of this Agreement.

     6.2 By Expiration. If Executive’s employment hereunder shall terminate upon expiration of the term provided in paragraph 2.1 hereof because Executive has provided the notice contemplated in such paragraph to Company, then all compensation and all benefits to Executive hereunder shall continue to be provided until the expiration of such term and such compensation and benefits shall terminate contemporaneously with termination of his employment. If Executive’s employment hereunder shall terminate upon expiration of the term provided in paragraph 2.1 hereof because Company has provided the notice contemplated in such paragraph to Executive, then (i) all compensation and all benefits to Executive hereunder shall continue to be provided until the expiration of such term, (ii) such compensation and benefits shall terminate contemporaneously with termination of his employment, and (iii) Company shall provide Executive with the Termination Benefits. Any lump sum cash payment due to Executive pursuant to clause (iii) of the preceding sentence shall be paid to Executive within five business days of the date of Executive’s termination of employment with Company.

     6.3 By Company. If Executive’s employment hereunder shall be terminated by Company prior to expiration of the term provided in paragraph 2.1, then, upon such termination, regardless of the reason therefor, all compensation and benefits to Executive hereunder shall terminate contemporaneously with the termination of such employment; provided, however, that:

     (i) if such termination shall be for a reason encompassed by paragraph 2.2(i), then Company shall pay to Executive (or, in the event of Executive’s death, his designated beneficiary or his estate if Executive does not have a beneficiary designation on file with Company for this purpose) a lump-sum payment equal to six months of his base salary at the rate in effect under paragraph 3.1 on the date of such termination; and

     (ii) if such termination shall be for any reason other than those encompassed by paragraphs 2.2 (i) or (ii), then Company shall provide Executive with the Termination Benefits.

Any lump-sum cash payment due to Executive (or his designated beneficiary, as the case may be) pursuant to the preceding sentence shall be paid to Executive within five business days of the date of Executive’s termination of employment with Company.

     6.4 By Executive. If Executive’s employment hereunder shall be terminated by Executive prior to expiration of the term provided in paragraph 2.1, then, upon such termination, regardless of the reason therefor, all compensation and benefits to Executive hereunder shall terminate contemporaneously with the termination of such employment; provided, however, that:

     (i) if such termination occurs for a reason encompassed by paragraph 2.3(i), then Company shall provide Executive with the Termination Benefits; and

     (ii) if such termination shall occur within the 180-day period beginning on the date upon which a Change in Control occurs, then Company shall provide Executive with the Termination Benefits.

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Any lump sum cash payment due to Executive pursuant to this paragraph shall be paid to Executive within five business days of the date of Executive’s termination of employment with Company.

     6.5 Death of Executive. Upon the date of death of Executive, the Agreement shall terminate and Company shall pay to Executive’s designated beneficiary (or his estate if Executive does not have a beneficiary designation on file with Company for this purpose) a lump-sum payment equal to six months of his base salary at the rate in effect under paragraph 3.1 on the date of such termination, such payment to be made as soon as practicable following such death, but in no event later than the later of (i) the end of the calendar year of the date of death of Executive or (ii) the 75^th day following the date of death of Executive.

     6.6 Additional Payments by Company.

     (a) Notwithstanding anything to the contrary in this Agreement, in the event that any payment or distribution by Company to or for the benefit of Executive, whether paid or payable or distributed or distributable pursuant to the terms of this Agreement or otherwise (a “Payment”), would be subject to the excise tax imposed by Section 4999 of the Code or any interest or penalties with respect to such excise tax (such excise tax, together with any such interest or penalties, are hereinafter collectively referred to as the “Excise Tax”), Company shall pay to Executive an additional payment (a “Gross-up Payment”) in an amount such that after payment by Executive of all taxes (including any interest or penalties imposed with respect to such taxes), including any Excise Tax imposed on any Gross-up Payment, Executive retains an amount of the Gross-up Payment equal to the Excise Tax imposed upon the Payments. Company and Executive shall make an initial determination as to whether a Gross-up Payment is required and the amount of any such Gross-up Payment, and any Gross-up Payment so determined shall be paid to Executive as a lump-sum payment on the date the related Payment is made. Unless withheld and remitted by the Company, Executive shall timely remit any required Excise Tax payments to the Internal Revenue Service.

     (b) Executive shall notify Company in writing of any claim by the Internal Revenue Service which, if successful, would require Company to make a Gross-up Payment (or a Gross-up Payment in excess of that, if any, initially determined by Company and Executive) within 10 days of the receipt of such claim. Company shall notify Executive in writing at least 10 days prior to the due date of any response required with respect to such claim if it plans to contest the claim. If Company fails to timely notify Executive whether it will contest such claim or Company determines not to contest such claim, then Company shall immediately pay to Executive the portion of such claim, if any, which it has not previously paid to Executive. If Company decides to contest such claim, Executive shall cooperate fully with Company in such action; provided, however, Company shall bear and pay directly or indirectly all costs and expenses (including additional interest and penalties) incurred in connection with such action and shall indemnify and hold Executive harmless, on an after-tax basis, for any Excise Tax or income tax, including interest and penalties with respect thereto, imposed as a result of Company’s action.

     (c) Any Gross-up Payment, reimbursement, indemnification or in-kind provision of expenses under clause (b) shall be made by Company to Executive promptly after incurrence

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thereof by Executive but in no event later than the end of the calendar year next following the calendar year in which Executive remits the related taxes that are the subject of the audit or litigation to the Internal Revenue Service (or, if no taxes are remitted, the end of the calendar year following the calendar year in which the audit is completed, settled or otherwise resolved) provided, that Executive must provide reasonable documentation to Company to substantiate taxes paid and expenses incurred. If, as a result of Company’s action with respect to a claim, Executive receives a refund of any amount paid by Company with respect to such claim, Executive shall promptly pay such refund to Company.

     6.7 No Duty to Mitigate Losses. Executive shall have no duty to find new employment following the termination of his employment under circumstances which require Company to pay any amount to Executive pursuant to this Article 6. Any salary or remuneration received by Executive from a third party for the providing of personal services (whether by employment or by functioning as an independent contractor) following the termination of his employment under circumstances pursuant to which this Article 6 apply shall not reduce Company’s obligation to make a payment to Executive (or the amount of such payment) pursuant to the terms of this Article 6.

     6.8 Liquidated Damages. In light of the difficulties in estimating the damages for an early termination of this Agreement, Company and Executive hereby agree that the payments, if any, to be received by Executive pursuant to this Article 6 shall be received by Executive as liquidated damages. Employee shall have no liability for his termination of this Agreement in accordance with paragraph 2.3.

     6.9 Other Benefits. This Agreement governs the rights and obligations of Executive and Company with respect to Executive’s base salary and certain perquisites of employment. Except as expressly provided herein, Executive’s rights and obligations both during the term of his employment and thereafter with respect to stock options, restricted stock, incentive and deferred compensation, life insurance policies insuring the life of Executive, and other benefits under the plans and programs maintained by Company shall be governed by the separate agreements, plans and other documents and instruments governing such matters.

ARTICLE 7: MISCELLANEOUS

     7.1 Notices. For purposes of this Agreement, notices and all other communications provided for herein shall be in writing and shall be deemed to have been duly given when personally delivered or when mailed by United States registered or certified mail, return receipt requested, postage prepaid, addressed as follows:

If to Company to:	W-H Energy Services, Inc.
	2000 West Sam Houston Parkway South
	Suite 500
	Houston, Texas 77042
	Attention: Chief Executive Officer

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If to Executive to:	Glen J. Ritter
	3903 Loreauville road
	New Iberia, LA 70563

or to such other address as either party may furnish to the other in writing in accordance herewith, except that notices or changes of address shall be effective only upon receipt.

     7.2 Applicable Law. This Agreement is entered into under, and shall be governed for all purposes by, the laws of the State of Texas.

     7.3 No Waiver. No failure by either party hereto at any time to give notice of any breach by the other party of, or to require compliance with, any condition or provision of this Agreement shall be deemed a waiver of similar or dissimilar provisions or conditions at the same or at any prior or subsequent time.

     7.4 Severability. If a court of competent jurisdiction determines that any provision of this Agreement is invalid or unenforceable, then the invalidity or unenforceability of that provision shall not affect the validity or enforceability of any other provision of this Agreement, and all other provisions shall remain in full force and effect.

     7.5 Counterparts. This Agreement may be executed in one or more counterparts, each of which shall be deemed to be an original, but all of which together will constitute one and the same Agreement.

     7.6 Withholding of Taxes and Other Employee Deductions. Company may withhold from any benefits and payments made pursuant to this Agreement all federal, state, city and other taxes as may be required pursuant to any law or governmental regulation or ruling and all other normal employee deductions made with respect to Company’s employees generally.

     7.7 Headings. The paragraph headings have been inserted for purposes of convenience and shall not be used for interpretive purposes.

     7.8 Gender and Plurals. Wherever the context so requires, the masculine gender includes the feminine or neuter, and the singular number includes the plural and conversely.

     7.9 Affiliate. As used in this Agreement, the term “affiliate” shall mean any entity which owns or controls, is owned or controlled by, or is under common ownership or control with, Company.

     7.10 Assignment. This Agreement shall be binding upon and inure to the benefit of Company and any successor of Company, by merger or otherwise. Except as provided in the preceding sentence, this Agreement, and the rights and obligations of the parties hereunder, are personal and neither this Agreement, nor any right, benefit, or obligation of either party hereto, shall be subject to voluntary or involuntary assignment, alienation or transfer, whether by operation of law or otherwise, without the prior written consent of the other party.

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     7.11 Term. This Agreement has a term co-extensive with the term of employment provided in paragraph 2.1. Termination shall not affect any right or obligation of any party which is accrued or vested prior to such termination.

     7.12 Entire Agreement. Except as provided in (i) the written benefit plans and programs referenced in paragraph 6.8 (and any agreements between Company and Executive that have been executed under such plans and programs) and (ii) any signed written agreement contemporaneously or hereafter executed by Company and Executive, this Agreement constitutes the entire agreement of the parties with regard to the subject matter hereof, and contains all the covenants, promises, representations, warranties and agreements between the parties with respect to employment of Executive by Company. Without limiting the scope of the preceding sentence, all understandings and agreements preceding the date of execution of this Agreement and relating to the subject matter hereof (other than the agreements described in clause (i) of the preceding sentence) are hereby null and void and of no further force and effect. Any modification of this Agreement will be effective only if it is in writing and signed by the party to be charged.

     7.13 Section 409A. The parties intend that this Agreement be interpreted in a manner to be exempt from the requirements of Section 409A of the Code and, where not so exempt, to be in compliance therewith. Executive (or his estate or beneficiary) shall have no right to dictate the taxable year in which any payment hereunder should be paid. Notwithstanding any provision of this Agreement to the contrary, only to the extent that this Agreement is subject to the requirements of Section 409A of the Code and is not exempted from such requirements, if at the time of Executive’s termination of employment with the Company, Executive is a “specified employee” as defined in Section 409A of the Code, no payment or benefit that results from Executive’s termination of employment will be provided until the date which is six months after the date of Executive’s termination of employment. Payments to which Executive would otherwise be entitled during the six-month period described above will be accumulated and paid in a lump sum on the first day of the seventh month after the date of Executive’s termination of employment. Notwithstanding anything to the contrary, to the extent required by Section 409A of the Code (a) the amount of expenses eligible for reimbursement or to be provided as an in-kind benefit under this Agreement with respect to a calendar year may not affect the expenses eligible for reimbursement or to be provided as an in-kind benefit in any other calendar year and (b) the right to reimbursement or in-kind benefits under this Agreement shall not be subject to liquidation or exchange for another benefit.

(Signature page follows)

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     IN WITNESS WHEREOF, the parties hereto have executed this Agreement on the first day of January, 2008, to be effective as of the Effective Date.

W-H ENERGY SERVICES, INC.
By:	/s/ Kenneth T. White, Jr.
Name:	Kenneth T. White, Jr.
Title:	Chairman, President and Chief Executive
	Officer
By:	/s/ Glen J. Ritter
	Glen J. Ritter

EX-10.10

Exhibit 10.10

AMENDED AND RESTATED EMPLOYMENT AGREEMENT

     THIS AMENDED AND RESTATED EMPLOYMENT AGREEMENT (as amended from time to time, this “Agreement”), effective as of January 1, 2008 is between W-H Energy Services, Inc., a Texas corporation (“Company”), and Ernesto Bautista III (“Executive”).

W I T N E S S E T H:

     WHEREAS, Company and Executive are currently parties to an Employment Agreement effective as of January 1, 2004, as amended by a First Amendment thereto executed as of March 30, 2007 (such Employment Agreement, as so amended, the “Original Employment Agreement”); and

     WHEREAS, Company and Executive desire to amend and restate the Original Employment Agreement to reflect therein the amendments thereto effected by the First Amendment thereto and to make certain other amendments, including those required by Section 409A of the Internal Revenue Code of 1986, as amended (the “Code”).

     NOW, THEREFORE, for and in consideration of the mutual promises, covenants and obligations contained herein, Company and Executive agree as follows:

ARTICLE 1: EMPLOYMENT AND DUTIES

     1.1 Employment; Effective Date. Effective as of January 1, 2004 (the “Effective Date”), and continuing for the period of time set forth in Article 2 of this Agreement, Company agrees to employ Executive and Executive agrees to be employed by Company, subject to the terms and conditions of this Agreement.

     1.2 Positions. Company shall employ Executive in the position of Vice President and Chief Financial Officer of Company, or in such other positions as the parties mutually may agree.

     1.3 Duties and Services. Executive agrees to serve in the position referred to in paragraph 1.2 and to perform diligently and to the best of his abilities the duties and services appertaining to such offices, as well as such additional duties and services appropriate to such offices which the parties mutually may agree upon from time to time. Executive’s employment shall also be subject to the policies maintained and established by Company that are of general applicability to Company’s executive employees; as such policies may be amended from time to time.

     1.4 Other Interests. Executive agrees, during the period of his employment by Company, to devote his primary business time, energy and best efforts to the business and affairs of Company and its affiliates and not to engage, directly or indirectly, in any other business or businesses, whether or not similar to that of Company, except with the consent of the Board of Directors. The foregoing notwithstanding, the parties recognize and agree that Executive may engage in other business activities that do not conflict with the business and affairs of Company or interfere with Executive’s performance of his duties hereunder, which shall be at the sole determination of the Company’s President and Chief Executive Officer.

     1.5 Duty of Loyalty. Executive acknowledges and agrees that Executive owes a fiduciary duty of loyalty to act at all times in the best interests of Company. In keeping with such duty, Executive shall make full disclosure to Company of all business opportunities pertaining to Company’s business and shall not appropriate for Executive’s own benefit business opportunities concerning Company’s business.

ARTICLE 2: TERM AND TERMINATION OF EMPLOYMENT

     2.1 Term. Unless sooner terminated pursuant to other provisions hereof, Company agrees to employ Executive for the period beginning on the Effective Date and ending on December 31, 2009 (the “Initial Expiration Date”); provided, however, that beginning on the Initial Expiration Date, and on each anniversary of the Initial Expiration Date thereafter, if this Agreement has not been terminated pursuant to paragraph 2.2 or 2.3, then said term of employment shall automatically be extended for an additional one-year period unless on or before the date that is 90 days prior to the first day of any such extension period either party shall give written notice to the other that no such automatic extension shall occur.

     2.2 Company’s Right to Terminate. Notwithstanding the provisions of paragraph 2.1, Company shall have the right to terminate Executive’s employment under this Agreement at any time for any of the following reasons:

     (i) upon Executive’s becoming incapacitated by accident, sickness or other circumstance which, in the reasonable opinion of a physician selected by Company, renders him mentally or physically incapable of performing the duties and services required of him hereunder;

     (ii) for cause, which for purposes of this Agreement shall mean Executive (A) has willfully breached any of his duties and obligations hereunder resulting in materially adverse consequences to Company or any of its affiliates, (B) has misappropriated funds or property of Company or any of its affiliates, or (C) has engaged in conduct that is materially adverse to the interests of Company or any of its affiliates; provided, however, that, prior to termination pursuant to clause (A), Company shall give Executive written notice of the grounds for termination and Executive shall have ten days after receipt thereof to cure same; or

     (iii) for any other reason whatsoever, in the sole discretion of the Board of Directors.

     2.3 Executive’s Right to Terminate. Notwithstanding the provisions of paragraph 2.1, Executive shall have the right to terminate his employment under this Agreement for any of the following reasons:

     (i) within 60 days of the initial existence of (A) a material breach by Company of any material provision of this Agreement, (B) a material decrease in Executive’s base salary; (C) a material decrease in the duties and responsibilities assigned to Executive as compared to the positions referred to in paragraph 1.2; or (D) Executive being required to relocate to a site more than 25 miles from his present business address; or

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     (ii) at any time after there is a Change in Control (as such term is defined in paragraph 6.1); or

     (iii) at any time for any other reason whatsoever, in the sole discretion of Executive;

provided, however, that in the case of a termination under paragraph 2.3(i), (A) Executive must provide Company with written notice of the event giving rise to the right of termination within 60 days of the initial existence thereof, and Company shall have 30 days to remedy the same and (B) in no event may the effective date of Executive’s termination be more than 24 months following the initial existence of the event giving rise to the right of termination.

     2.4 Notice of Termination. If Company or Executive desires to terminate Executive’s employment hereunder at any time prior to expiration of the term of employment as provided in paragraph 2.1, it or he shall do so by giving written notice to the other party that it or he has elected to terminate Executive’s employment hereunder and stating the effective date and reason for such termination, provided that no such action shall alter or amend any other provisions hereof or rights arising hereunder.

ARTICLE 3: COMPENSATION AND BENEFITS

     3.1 Base Salary. Commencing January 1, 2008, Executive shall receive a minimum annual base salary of two hundred sixty three thousand dollars ($263,000.00). Executive’s annual base salary shall be reviewed by the Board of Directors (or a committee thereof) on an annual basis, and, in the sole discretion of the Board of Directors (or such committee), such annual base salary may be increased, but not decreased, effective as of January 1 of each year. Executive’s annual base salary shall be paid during his employment hereunder in equal installments in accordance with the Company’s standard policy regarding payment of compensation to executives but no less frequently than monthly.

     3.2 Incentive Compensation. During his employment hereunder, Executive shall be eligible to receive incentive compensation up to a maximum of 125% of his annual base salary each calendar year as shall be determined in the sole discretion of the Board of Directors (or a committee thereof), which compensation, if any, shall be paid to Executive in the form of a lump-sum payment between January 1 and March 15 of the calendar year following the calendar year to which the incentive compensation relates.

     3.3 Other Perquisites. During his employment hereunder, Executive shall be afforded the following benefits as incidences of his employment:

     (i) Car Allowance - Company shall provide to Executive an automobile or automobile allowance as approved by the President and Chief Executive Officer, which shall be paid in equal installments on a monthly basis in accordance with the Company’s standard policy regarding payment of compensation to its other employees.

     (ii) Other Company Benefits - Executive and, to the extent applicable, Executive’s spouse, dependents and beneficiaries, shall be allowed to participate in the health and welfare plans and programs, including improvements or modifications of the

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same, which are now, or may hereafter be, available to the other executive officers of Company. Such plans and programs include, without limitation, health insurance, life insurance and disability insurance and vacation and sick leave plans, which may be maintained by Company. Company shall not, however, by reason of this paragraph be obligated to institute, maintain, or refrain from changing, amending, or discontinuing, any such plan or program, so long as such changes are similarly applicable to the other executive officers of Company.

ARTICLE 4: PROTECTION OF INFORMATION

     4.1 Disclosure to Executive. Company shall disclose to Executive, or place Executive in a position to have access to or develop, trade secrets or confidential information of Company or its affiliates; and/or shall entrust Executive with business opportunities of Company or its affiliates; and/or shall place Executive in a position to develop business good will on behalf of Company or its affiliates.

     4.2 Property of Company. All documents, drawings, memoranda, notes, records, files, correspondence, manuals, models, specifications, computer programs, e-mail, voice mail, electronic databases, maps, and all other writings or materials of any type embodying any information relating to Company or its business are and shall be the sole and exclusive property of Company. Upon termination of Executive’s employment by Company, for any reason, Executive promptly shall deliver the same, and all copies thereof, to Company. For the avoidance of doubt, this paragraph 4.2 shall not prohibit Executive from retaining his only personal property following termination or expiration of this Agreement.

     4.3 No Unauthorized Use or Disclosure. Executive will not, at any time during or after Executive’s employment by Company, make any unauthorized disclosure of any confidential business information or trade secrets of Company or its affiliates, or make any use thereof, except in the carrying out of Executive’s employment responsibilities hereunder. Affiliates of the Company shall be third party beneficiaries of Executive’s obligations under this paragraph. As a result of Executive’s employment by Company, Executive may also from time to time have access to, or knowledge of, confidential business information or trade secrets of third parties, such as customers, suppliers, partners, joint venturers, and the like, of Company and its affiliates. Executive also agrees to preserve and protect the confidentiality of such third party confidential information and trade secrets to the same extent, and on the same basis, as Company’s confidential business information and trade secrets.

     4.4 Remedies. Executive acknowledges that money damages would not be sufficient remedy for any breach of this Article by Executive, and Company shall be entitled to specific performance and injunctive relief as remedies for such breach or any threatened breach. Such remedies shall not be deemed the exclusive remedies for a breach of this Article, but shall be in addition to all remedies available at law or in equity to Company, including the recovery of damages from Executive.

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ARTICLE 5: NONCOMPETITION OBLIGATIONS

     5.1 In General. As part of the consideration for the compensation and benefits to be paid to Executive hereunder; to protect the trade secrets and confidential information of Company and its affiliates that have been and will in the future be disclosed or entrusted to Executive, the business good will of Company and its affiliates that has been and will in the future be developed in Executive, or the business opportunities that have been and will in the future be disclosed or entrusted to Executive by Company and its affiliates; and as an additional incentive for Company to enter into this Agreement, Company and Executive agree to the noncompetition obligations hereunder. Executive shall not, directly or indirectly for Executive or for others, in the State of Texas and in all parishes of the State of Louisiana:

     (i) engage in any business competitive with the business conducted by Company during the term of employment of Executive in such states; or

     (ii) render advice or services to, be employed by, acquire an ownership interest in, or otherwise assist, any other person, association, or entity who is engaged, directly or indirectly, in any business competitive with the business conducted by Company during the term of employment of Executive in such states with respect to such competitive business, except that Executive may hold up to 2% of the outstanding shares of any publicly held company engaged in such competitive activities.

The noncompetition obligations set forth above shall apply only during the period that Executive is employed by Company and for two years thereafter; provided, however, that such noncompetition obligations shall only apply after Executive’s termination of employment hereunder if such termination shall be as a result of a resignation by Executive other than under circumstances described in paragraph 2.3(i). For the avoidance of doubt, such obligations shall not apply following the termination or expiration of this Agreement under any other provision hereof.

     5.2 Enforcement and Remedies. Executive acknowledges that money damages would not be sufficient remedy for any breach of this Article by Executive, and Company shall be entitled to specific performance and injunctive relief as remedies for such breach or any threatened breach. Such remedies shall not be deemed the exclusive remedies for a breach of this Article, but shall be in addition to all remedies available at law or in equity to Company, including without limitation, the recovery of damages from Executive.

     5.3 Reformation. It is expressly understood and agreed that Company and Executive consider the restrictions contained in this Article to be reasonable and necessary to protect the proprietary information of Company. Nevertheless, if any of the aforesaid restrictions are found by a court having jurisdiction to be unreasonable, or overly broad as to geographic area or time, or otherwise unenforceable, the parties intend for the restrictions therein set forth to be modified by such court so as to be reasonable and enforceable and, as so modified by the court, to be fully enforced.¹

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ARTICLE 6: EFFECT OF TERMINATION ON COMPENSATION;
ADDITIONAL PAYMENTS

     6.1 Defined Terms. For purposes of this Article 6, the following terms shall have the meanings indicated:

     “Change in Control” means (i) a merger of Company with another entity, a consolidation involving Company, or the sale of all or substantially all of the assets of Company to another entity if, in any such case, (A) the holders of equity securities of Company immediately prior to such transaction or event do not beneficially own immediately after such transaction or event equity securities of the resulting entity entitled to 60% or more of the votes then eligible to be cast in the election of directors generally (or comparable governing body) of the resulting entity in substantially the same proportions that they owned the equity securities of Company immediately prior to such transaction or event or (B) the persons who were members of the Board of Directors immediately prior to such transaction or event shall not constitute at least a majority of the board of directors of the resulting entity immediately after such transaction or event, (ii) the dissolution or liquidation of Company, (iii) when any person or entity, including a “group” as contemplated by Section 13(d)(3) of the Securities Exchange Act of 1934, as amended, acquires or gains ownership or control (including, without limitation, power to vote) of more than 50% of the combined voting power of the outstanding securities of, (A) if Company has not engaged in a merger or consolidation, Company, or (B) if Company has engaged in a merger or consolidation, the resulting entity, or (iv) as a result of or in connection with a contested election of directors, the persons who were members of the Board of Directors immediately before such election shall cease to constitute a majority of the Board of Directors. For purposes of the preceding sentence, (1) “resulting entity” in the context of a transaction or event that is a merger, consolidation or sale of all or substantially all assets shall mean the surviving entity (or acquiring entity in the case of an asset sale) unless the surviving entity (or acquiring entity in the case of an asset sale) is a subsidiary of another entity and the holders of common stock of Company receive capital stock of such other entity in such transaction or event, in which event the resulting entity shall be such other entity, and (2) subsequent to the consummation of a merger or consolidation that does not constitute a Change in Control, the term “Company” shall refer to the resulting entity and the term “Board of Directors” shall refer to the board of directors (or comparable governing body) of the resulting entity.

     “Termination Benefits” means (i) a lump sum cash payment equal to 200% of the sum of (A) Executive’s annual base salary at the rate in effect under paragraph 3.1 on the date of termination of Executive’s employment and (B) the highest annual incentive compensation payment paid, or determined by the Board (or the applicable committee thereof) and to be paid, to Executive by Company (pursuant to paragraph 3.2 or otherwise) in respect of any of the three years immediately prior to the date of termination of Executive’s employment, and (ii) notwithstanding anything to the contrary set forth in the Company’s other applicable plans and agreements, all of the outstanding stock options, restricted awards and other equity based awards granted by Company to Executive shall become fully vested and immediately exercisable in full on the date of termination of Executive’s employment. Notwithstanding anything in this Agreement to

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the contrary, if Executive is entitled to Termination Benefits under any clause in this Agreement, then Executive shall not also be entitled to additional Termination Benefits under any other clause of this Agreement.

     6.2 By Expiration. If Executive’s employment hereunder shall terminate upon expiration of the term provided in paragraph 2.1 hereof because Executive has provided the notice contemplated in such paragraph to Company, then all compensation and all benefits to Executive hereunder shall continue to be provided until the expiration of such term and such compensation and benefits shall terminate contemporaneously with termination of his employment. If Executive’s employment hereunder shall terminate upon expiration of the term provided in paragraph 2.1 hereof because Company has provided the notice contemplated in such paragraph to Executive, then (i) all compensation and all benefits to Executive hereunder shall continue to be provided until the expiration of such term, (ii) such compensation and benefits shall terminate contemporaneously with termination of his employment, and (iii) Company shall provide Executive with the Termination Benefits. Any lump sum cash payment due to Executive pursuant to clause (iii) of the preceding sentence shall be paid to Executive within five business days of the date of Executive’s termination of employment with Company.

     6.3 By Company. If Executive’s employment hereunder shall be terminated by Company prior to expiration of the term provided in paragraph 2.1, then, upon such termination, regardless of the reason therefor, all compensation and benefits to Executive hereunder shall terminate contemporaneously with the termination of such employment; provided, however, that:

     (i) if such termination shall be for a reason encompassed by paragraph 2.2(i), then Company shall pay to Executive (or, in the event of Executive’s death, his designated beneficiary or his estate if Executive does not have a beneficiary designation on file with Company for this purpose) a lump-sum payment equal to six months of his base salary at the rate in effect under paragraph 3.1 on the date of such termination; and

     (ii) if such termination shall be for any reason other than those encompassed by paragraphs 2.2 (i) or (ii), then Company shall provide Executive with the Termination Benefits.

Any lump-sum cash payment due to Executive (or his designated beneficiary, as the case may be) pursuant to the preceding sentence shall be paid to Executive within five business days of the date of Executive’s termination of employment with Company.

     6.4 By Executive. If Executive’s employment hereunder shall be terminated by Executive prior to expiration of the term provided in paragraph 2.1, then, upon such termination, regardless of the reason therefor, all compensation and benefits to Executive hereunder shall terminate contemporaneously with the termination of such employment; provided, however, that:

     (i) if such termination occurs for a reason encompassed by paragraph 2.3(i), then Company shall provide Executive with the Termination Benefits; and

     (ii) if such termination shall occur within the 180-day period beginning on the date upon which a Change in Control occurs, then Company shall provide Executive with the Termination Benefits.

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Any lump sum cash payment due to Executive pursuant to this paragraph shall be paid to Executive within five business days of the date of Executive’s termination of employment with Company.

     6.5 Death of Executive. Upon the date of death of Executive, the Agreement shall terminate and Company shall pay to Executive’s designated beneficiary (or his estate if Executive does not have a beneficiary designation on file with Company for this purpose) a lump-sum payment equal to six months of his base salary at the rate in effect under paragraph 3.1 on the date of such termination, such payment to be made as soon as practicable following such death, but in no event later than the later of (i) the end of the calendar year of the date of death of Executive or (ii) the 75^th day following the date of death of Executive.

     6.6 Additional Payments by Company.

     (a) Notwithstanding anything to the contrary in this Agreement, in the event that any payment or distribution by Company to or for the benefit of Executive, whether paid or payable or distributed or distributable pursuant to the terms of this Agreement or otherwise (a “Payment”), would be subject to the excise tax imposed by Section 4999 of the Code or any interest or penalties with respect to such excise tax (such excise tax, together with any such interest or penalties, are hereinafter collectively referred to as the “Excise Tax”), Company shall pay to Executive an additional payment (a “Gross-up Payment”) in an amount such that after payment by Executive of all taxes (including any interest or penalties imposed with respect to such taxes), including any Excise Tax imposed on any Gross-up Payment, Executive retains an amount of the Gross-up Payment equal to the Excise Tax imposed upon the Payments. Company and Executive shall make an initial determination as to whether a Gross-up Payment is required and the amount of any such Gross-up Payment, and any Gross-up Payment so determined shall be paid to Executive as a lump-sum payment on the date the related Payment is made. Unless withheld and remitted by the Company, Executive shall timely remit any required Excise Tax payments to the Internal Revenue Service.

     (b) Executive shall notify Company in writing of any claim by the Internal Revenue Service which, if successful, would require Company to make a Gross-up Payment (or a Gross-up Payment in excess of that, if any, initially determined by Company and Executive) within 10 days of the receipt of such claim. Company shall notify Executive in writing at least 10 days prior to the due date of any response required with respect to such claim if it plans to contest the claim. If Company fails to timely notify Executive whether it will contest such claim or Company determines not to contest such claim, then Company shall immediately pay to Executive the portion of such claim, if any, which it has not previously paid to Executive. If Company decides to contest such claim, Executive shall cooperate fully with Company in such action; provided, however, Company shall bear and pay directly or indirectly all costs and expenses (including additional interest and penalties) incurred in connection with such action and shall indemnify and hold Executive harmless, on an after-tax basis, for any Excise Tax or income tax, including interest and penalties with respect thereto, imposed as a result of Company’s action.

     (c) Any Gross-up Payment, reimbursement, indemnification or in-kind provision of expenses under clause (b) shall be made by Company to Executive promptly after incurrence

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thereof by Executive but in no event later than the end of the calendar year next following the calendar year in which Executive remits the related taxes that are the subject of the audit or litigation to the Internal Revenue Service (or, if no taxes are remitted, the end of the calendar year following the calendar year in which the audit is completed, settled or otherwise resolved) provided, that Executive must provide reasonable documentation to Company to substantiate taxes paid and expenses incurred. If, as a result of Company’s action with respect to a claim, Executive receives a refund of any amount paid by Company with respect to such claim, Executive shall promptly pay such refund to Company.

     6.7 No Duty to Mitigate Losses. Executive shall have no duty to find new employment following the termination of his employment under circumstances which require Company to pay any amount to Executive pursuant to this Article 6. Any salary or remuneration received by Executive from a third party for the providing of personal services (whether by employment or by functioning as an independent contractor) following the termination of his employment under circumstances pursuant to which this Article 6 apply shall not reduce Company’s obligation to make a payment to Executive (or the amount of such payment) pursuant to the terms of this Article 6.

     6.8 Liquidated Damages. In light of the difficulties in estimating the damages for an early termination of this Agreement, Company and Executive hereby agree that the payments, if any, to be received by Executive pursuant to this Article 6 shall be received by Executive as liquidated damages. Employee shall have no liability for his termination of this Agreement in accordance with paragraph 2.3.

     6.9 Other Benefits. This Agreement governs the rights and obligations of Executive and Company with respect to Executive’s base salary and certain perquisites of employment. Except as expressly provided herein, Executive’s rights and obligations both during the term of his employment and thereafter with respect to stock options, restricted stock, incentive and deferred compensation, life insurance policies insuring the life of Executive, and other benefits under the plans and programs maintained by Company shall be governed by the separate agreements, plans and other documents and instruments governing such matters.

ARTICLE 7: MISCELLANEOUS

     7.1 Notices. For purposes of this Agreement, notices and all other communications provided for herein shall be in writing and shall be deemed to have been duly given when personally delivered or when mailed by United States registered or certified mail, return receipt requested, postage prepaid, addressed as follows:

If to Company to:	W-H Energy Services, Inc.
	2000 West Sam Houston Parkway South
	Suite 500
	Houston, Texas 77042
	Attention: Chief Executive Officer

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If to Executive to:	Ernesto Bautista, III
	24935 Laguna Edge Drive
	Katy, TX 77494

or to such other address as either party may furnish to the other in writing in accordance herewith, except that notices or changes of address shall be effective only upon receipt.

     7.2 Applicable Law. This Agreement is entered into under, and shall be governed for all purposes by, the laws of the State of Texas.

     7.3 No Waiver. No failure by either party hereto at any time to give notice of any breach by the other party of, or to require compliance with, any condition or provision of this Agreement shall be deemed a waiver of similar or dissimilar provisions or conditions at the same or at any prior or subsequent time.

     7.4 Severability. If a court of competent jurisdiction determines that any provision of this Agreement is invalid or unenforceable, then the invalidity or unenforceability of that provision shall not affect the validity or enforceability of any other provision of this Agreement, and all other provisions shall remain in full force and effect.

     7.5 Counterparts. This Agreement may be executed in one or more counterparts, each of which shall be deemed to be an original, but all of which together will constitute one and the same Agreement.

     7.6 Withholding of Taxes and Other Employee Deductions. Company may withhold from any benefits and payments made pursuant to this Agreement all federal, state, city and other taxes as may be required pursuant to any law or governmental regulation or ruling and all other normal employee deductions made with respect to Company’s employees generally.

     7.7 Headings. The paragraph headings have been inserted for purposes of convenience and shall not be used for interpretive purposes.

     7.8 Gender and Plurals. Wherever the context so requires, the masculine gender includes the feminine or neuter, and the singular number includes the plural and conversely.

     7.9 Affiliate. As used in this Agreement, the term “affiliate” shall mean any entity which owns or controls, is owned or controlled by, or is under common ownership or control with, Company.

     7.10 Assignment. This Agreement shall be binding upon and inure to the benefit of Company and any successor of Company, by merger or otherwise. Except as provided in the preceding sentence, this Agreement, and the rights and obligations of the parties hereunder, are personal and neither this Agreement, nor any right, benefit, or obligation of either party hereto, shall be subject to voluntary or involuntary assignment, alienation or transfer, whether by operation of law or otherwise, without the prior written consent of the other party.

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     7.11 Term. This Agreement has a term co-extensive with the term of employment provided in paragraph 2.1. Termination shall not affect any right or obligation of any party which is accrued or vested prior to such termination.

     7.12 Entire Agreement. Except as provided in (i) the written benefit plans and programs referenced in paragraph 6.8 (and any agreements between Company and Executive that have been executed under such plans and programs) and (ii) any signed written agreement contemporaneously or hereafter executed by Company and Executive, this Agreement constitutes the entire agreement of the parties with regard to the subject matter hereof, and contains all the covenants, promises, representations, warranties and agreements between the parties with respect to employment of Executive by Company. Without limiting the scope of the preceding sentence, all understandings and agreements preceding the date of execution of this Agreement and relating to the subject matter hereof (other than the agreements described in clause (i) of the preceding sentence) are hereby null and void and of no further force and effect. Any modification of this Agreement will be effective only if it is in writing and signed by the party to be charged.

     7.13 Section 409A. The parties intend that this Agreement be interpreted in a manner to be exempt from the requirements of Section 409A of the Code and, where not so exempt, to be in compliance therewith. Executive (or his estate or beneficiary) shall have no right to dictate the taxable year in which any payment hereunder should be paid. Notwithstanding any provision of this Agreement to the contrary, only to the extent that this Agreement is subject to the requirements of Section 409A of the Code and is not exempted from such requirements, if at the time of Executive’s termination of employment with the Company, Executive is a “specified employee” as defined in Section 409A of the Code, no payment or benefit that results from Executive’s termination of employment will be provided until the date which is six months after the date of Executive’s termination of employment. Payments to which Executive would otherwise be entitled during the six-month period described above will be accumulated and paid in a lump sum on the first day of the seventh month after the date of Executive’s termination of employment. Notwithstanding anything to the contrary, to the extent required by Section 409A of the Code (a) the amount of expenses eligible for reimbursement or to be provided as an in-kind benefit under this Agreement with respect to a calendar year may not affect the expenses eligible for reimbursement or to be provided as an in-kind benefit in any other calendar year and (b) the right to reimbursement or in-kind benefits under this Agreement shall not be subject to liquidation or exchange for another benefit.

(Signature page follows)

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     IN WITNESS WHEREOF, the parties hereto have executed this Agreement on the first day of January, 2008, to be effective as of the Effective Date.

W-H ENERGY SERVICES, INC.
By:	/s/ Kenneth T. White, Jr.
Name:	Kenneth T. White, Jr.
Title:	Chairman, President and Chief Executive Officer
By:	/s/ Ernesto Bautista III
	Ernesto Bautista III

EX-10.11

Exhibit 10.11

AMENDED AND RESTATED EMPLOYMENT AGREEMENT

     THIS AMENDED AND RESTATED EMPLOYMENT AGREEMENT (as amended from time to time, this “Agreement”), effective as of January 1, 2008 is between W-H Energy Services, Inc., a Texas corporation (“Company”), and Stuart J. Ford (“Executive”).

W I T N E S S E T H:

     WHEREAS, Company and Executive are currently parties to an Employment Agreement effective as of January 1, 2004, as amended by a First Amendment thereto executed as of March 30, 2007 (such Employment Agreement, as so amended, the “Original Employment Agreement”); and

     WHEREAS, Company and Executive desire to amend and restate the Original Employment Agreement to reflect therein the amendments thereto effected by the First Amendment thereto and to make certain other amendments, including those required by Section 409A of the Internal Revenue Code of 1986, as amended (the “Code”).

     NOW, THEREFORE, for and in consideration of the mutual promises, covenants and obligations contained herein, Company and Executive agree as follows:

ARTICLE 1: EMPLOYMENT AND DUTIES

     1.1 Employment; Effective Date. Effective as of January 1, 2004 (the “Effective Date”), and continuing for the period of time set forth in Article 2 of this Agreement, Company agrees to employ Executive and Executive agrees to be employed by Company, subject to the terms and conditions of this Agreement.

     1.2 Positions. Company shall employ Executive in the position of Vice President and Intellectual Property Counsel of Company, or in such other positions as the parties mutually may agree.

     1.3 Duties and Services. Executive agrees to serve in the position referred to in paragraph 1.2 and to perform diligently and to the best of his abilities the duties and services appertaining to such offices, as well as such additional duties and services appropriate to such offices which the parties mutually may agree upon from time to time. Executive’s employment shall also be subject to the policies maintained and established by Company that are of general applicability to Company’s executive employees, as such policies may be amended from time to time.

     1.4 Other Interests. Executive agrees, during the period of his employment by Company, to devote his primary business time, energy and best efforts to the business and affairs of Company and its affiliates and not to engage, directly or indirectly, in any other business or businesses, whether or not similar to that of Company, except with the consent of the Board of Directors. The foregoing notwithstanding, the parties recognize and agree that Executive may engage in other business activities that do not conflict with the business and affairs of Company or interfere with Executive’s performance of his duties hereunder, which shall be at the sole determination of the Company’s President and Chief Executive Officer.

     1.5 Duty of Loyalty. Executive acknowledges and agrees that Executive owes a fiduciary duty of loyalty to act at all times in the best interests of Company. In keeping with such duty, Executive shall make full disclosure to Company of all business opportunities pertaining to Company’s business and shall not appropriate for Executive’s own benefit business opportunities concerning Company’s business.

ARTICLE 2: TERM AND TERMINATION OF EMPLOYMENT

     2.1 Term. Unless sooner terminated pursuant to other provisions hereof, Company agrees to employ Executive for the period beginning on the Effective Date and ending on December 31, 2009 (the “Initial Expiration Date”); provided, however, that beginning on the Initial Expiration Date, and on each anniversary of the Initial Expiration Date thereafter, if this Agreement has not been terminated pursuant to paragraph 2.2 or 2.3, then said term of employment shall automatically be extended for an additional one-year period unless on or before the date that is 90 days prior to the first day of any such extension period either party shall give written notice to the other that no such automatic extension shall occur.

     2.2 Company’s Right to Terminate. Notwithstanding the provisions of paragraph 2.1, Company shall have the right to terminate Executive’s employment under this Agreement at any time for any of the following reasons:

     (i) upon Executive’s becoming incapacitated by accident, sickness or other circumstance which, in the reasonable opinion of a physician selected by Company, renders him mentally or physically incapable of performing the duties and services required of him hereunder;

     (ii) for cause, which for purposes of this Agreement shall mean Executive (A) has willfully breached any of his duties and obligations hereunder resulting in materially adverse consequences to Company or any of its affiliates, (B) has misappropriated funds or property of Company or any of its affiliates, or (C) has engaged in conduct that is materially adverse to the interests of Company or any of its affiliates; ; provided, however, that, prior to termination pursuant to clause (A), Company shall give Executive written notice of the grounds for termination and Executive shall have ten days after receipt thereof to cure same; or

     (iii) for any other reason whatsoever, in the sole discretion of the Board of Directors.

     2.3 Executive’s Right to Terminate. Notwithstanding the provisions of paragraph 2.1, Executive shall have the right to terminate his employment under this Agreement for any of the following reasons:

     (i) within 60 days of the initial existence of (A) a material breach by Company of any material provision of this Agreement, (B) a material decrease in Executive’s base salary; (C) a material decrease in the duties and responsibilities assigned to Executive as compared to the positions referred to in paragraph 1.2; or (D) Executive being required to relocate to a site more than 25 miles from his present business address; or

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     (ii) at any time after there is a Change in Control (as such term is defined in paragraph 6.1); or

     (iii) at any time for any other reason whatsoever, in the sole discretion of Executive;

provided, however, that in the case of a termination under paragraph 2.3(i), (A) Executive must provide Company with written notice of the event giving rise to the right of termination within 60 days of the initial existence thereof, and Company shall have 30 days to remedy the same and (B) in no event may the effective date of Executive’s termination be more than 24 months following the initial existence of the event giving rise to the right of termination.

     2.4 Notice of Termination. If Company or Executive desires to terminate Executive’s employment hereunder at any time prior to expiration of the term of employment as provided in paragraph 2.1, it or he shall do so by giving written notice to the other party that it or he has elected to terminate Executive’s employment hereunder and stating the effective date and reason for such termination, provided that no such action shall alter or amend any other provisions hereof or rights arising hereunder.

ARTICLE 3: COMPENSATION AND BENEFITS

     3.1 Base Salary. Commencing January 1, 2008, Executive shall receive a minimum annual base salary of two hundred seventy three thousand dollars ($273,000.00). Executive’s annual base salary shall be reviewed by the Board of Directors (or a committee thereof) on an annual basis, and, in the sole discretion of the Board of Directors (or such committee), such annual base salary may be increased, but not decreased, effective as of January 1 of each year. Executive’s annual base salary shall be paid during his employment hereunder in equal installments in accordance with the Company’s standard policy regarding payment of compensation to executives but no less frequently than monthly.

     3.2 Incentive Compensation. During his employment hereunder, Executive shall be eligible to receive incentive compensation up to a maximum of 100 % of his annual base salary each calendar year as shall be determined in the sole discretion of the Board of Directors (or a committee thereof), which compensation, if any, shall be paid to Executive in the form of a lump-sum payment between January 1 and March 15 of the calendar year following the calendar year to which the incentive compensation relates.

     3.3 Other Perquisites. During his employment hereunder, Executive shall be afforded the following benefits as incidences of his employment:

     (i) Car Allowance - Company shall provide to Executive an automobile or automobile allowance as approved by the President and Chief Executive Officer, which shall be paid in equal installments on a monthly basis in accordance with the Company’s standard policy regarding payment of compensation to its other employees.

     (ii) Other Company Benefits - Executive and, to the extent applicable, Executive’s spouse, dependents and beneficiaries, shall be allowed to participate in the health and welfare plans and programs, including improvements or modifications of the

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same, which are now, or may hereafter be, available to the other executive officers of Company. Such plans and programs include, without limitation, health insurance, life insurance and disability insurance and vacation and sick leave plans, which may be maintained by Company. Company shall not, however, by reason of this paragraph be obligated to institute, maintain, or refrain from changing, amending, or discontinuing, any such plan or program, so long as such changes are similarly applicable to the other executive officers of Company.

ARTICLE 4: PROTECTION OF INFORMATION

     4.1 Disclosure to Executive. Company shall disclose to Executive, or place Executive in a position to have access to or develop, trade secrets or confidential information of Company or its affiliates; and/or shall entrust Executive with business opportunities of Company or its affiliates; and/or shall place Executive in a position to develop business good will on behalf of Company or its affiliates.

     4.2 Property of Company. All documents, drawings, memoranda, notes, records, files, correspondence, manuals, models, specifications, computer programs, e-mail, voice mail, electronic databases, maps, and all other writings or materials of any type embodying any information relating to Company or its business are and shall be the sole and exclusive property of Company. Upon termination of Executive’s employment by Company, for any reason, Executive promptly shall deliver the same, and all copies thereof, to Company. For the avoidance of doubt, this paragraph 4.2 shall not prohibit Executive from retaining his only personal property following termination or expiration of this Agreement.

     4.3 No Unauthorized Use or Disclosure. Executive will not, at any time during or after Executive’s employment by Company, make any unauthorized disclosure of any confidential business information or trade secrets of Company or its affiliates, or make any use thereof, except in the carrying out of Executive’s employment responsibilities hereunder. Affiliates of the Company shall be third party beneficiaries of Executive’s obligations under this paragraph. As a result of Executive’s employment by Company, Executive may also from time to time have access to, or knowledge of, confidential business information or trade secrets of third parties, such as customers, suppliers, partners, joint venturers, and the like, of Company and its affiliates. Executive also agrees to preserve and protect the confidentiality of such third party confidential information and trade secrets to the same extent, and on the same basis, as Company’s confidential business information and trade secrets.

     4.4 Remedies. Executive acknowledges that money damages would not be sufficient remedy for any breach of this Article by Executive, and Company shall be entitled to specific performance and injunctive relief as remedies for such breach or any threatened breach. Such remedies shall not be deemed the exclusive remedies for a breach of this Article, but shall be in addition to all remedies available at law or in equity to Company, including the recovery of damages from Executive.

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ARTICLE 5: NONCOMPETITION OBLIGATIONS

     5.1 In General. Nothing in this Agreement shall be construed to prevent or restrain Executive from practicing law upon termination or expiration of this Agreement for any reason; provided however, that Executive shall, for the term of employment by the Company and thereafter, avoid conflicts of interest with the Company and its Affiliates according to the obligations and duties of loyalty to Company placed upon Executive by law.

     5.2 Enforcement and Remedies. Executive acknowledges that money damages would not be sufficient remedy for any breach of this Article by Executive, and Company shall be entitled to specific performance and injunctive relief as remedies for such breach or any threatened breach. Such remedies shall not be deemed the exclusive remedies for a breach of this Article, but shall be in addition to all remedies available at law or in equity to Company, including without limitation, the recovery of damages from Executive.

ARTICLE 6: EFFECT OF TERMINATION ON COMPENSATION;
ADDITIONAL PAYMENTS

     6.1 Defined Terms. For purposes of this Article 6, the following terms shall have the meanings indicated:

     “Change in Control” means (i) a merger of Company with another entity, a consolidation involving Company, or the sale of all or substantially all of the assets of Company to another entity if, in any such case, (A) the holders of equity securities of Company immediately prior to such transaction or event do not beneficially own immediately after such transaction or event equity securities of the resulting entity entitled to 60% or more of the votes then eligible to be cast in the election of directors generally (or comparable governing body) of the resulting entity in substantially the same proportions that they owned the equity securities of Company immediately prior to such transaction or event or (B) the persons who were members of the Board of Directors immediately prior to such transaction or event shall not constitute at least a majority of the board of directors of the resulting entity immediately after such transaction or event, (ii) the dissolution or liquidation of Company, (iii) when any person or entity, including a “group” as contemplated by Section 13(d)(3) of the Securities Exchange Act of 1934, as amended, acquires or gains ownership or control (including, without limitation, power to vote) of more than 50% of the combined voting power of the outstanding securities of, (A) if Company has not engaged in a merger or consolidation, Company, or (B) if Company has engaged in a merger or consolidation, the resulting entity, or (iv) as a result of or in connection with a contested election of directors, the persons who were members of the Board of Directors immediately before such election shall cease to constitute a majority of the Board of Directors. For purposes of the preceding sentence, (1) “resulting entity” in the context of a transaction or event that is a merger, consolidation or sale of all or substantially all assets shall mean the surviving entity (or acquiring entity in the case of an asset sale) unless the surviving entity (or acquiring entity in the case of an asset sale) is a subsidiary of another entity and the holders of common stock of Company

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receive capital stock of such other entity in such transaction or event, in which event the resulting entity shall be such other entity, and (2) subsequent to the consummation of a merger or consolidation that does not constitute a Change in Control, the term “Company” shall refer to the resulting entity and the term “Board of Directors” shall refer to the board of directors (or comparable governing body) of the resulting entity.

     “Termination Benefits” means (i) a lump sum cash payment equal to 200% of the sum of (A) Executive’s annual base salary at the rate in effect under paragraph 3.1 on the date of termination of Executive’s employment and (B) the highest annual incentive compensation payment paid, or determined by the Board (or the applicable committee thereof) and to be paid, to Executive by Company (pursuant to paragraph 3.2 or otherwise) in respect of any of the three years immediately prior to the date of termination of Executive’s employment, and (ii) notwithstanding anything to the contrary set forth in the Company’s other applicable plans and agreements, all of the outstanding stock options, restricted awards and other equity based awards granted by Company to Executive shall become fully vested and immediately exercisable in full on the date of termination of Executive’s employment. Notwithstanding anything in this Agreement to the contrary, if Executive is entitled to Termination Benefits under any clause in this Agreement, then Executive shall not also be entitled to additional Termination Benefits under any other clause of this Agreement.

     6.2 By Expiration. If Executive’s employment hereunder shall terminate upon expiration of the term provided in paragraph 2.1 hereof because Executive has provided the notice contemplated in such paragraph to Company, then all compensation and all benefits to Executive hereunder shall continue to be provided until the expiration of such term and such compensation and benefits shall terminate contemporaneously with termination of his employment. If Executive’s employment hereunder shall terminate upon expiration of the term provided in paragraph 2.1 hereof because Company has provided the notice contemplated in such paragraph to Executive, then (i) all compensation and all benefits to Executive hereunder shall continue to be provided until the expiration of such term, (ii) such compensation and benefits shall terminate contemporaneously with termination of his employment, and (iii) Company shall provide Executive with the Termination Benefits. Any lump sum cash payment due to Executive pursuant to clause (iii) of the preceding sentence shall be paid to Executive within five business days of the date of Executive’s termination of employment with Company.

     6.3 By Company. If Executive’s employment hereunder shall be terminated by Company prior to expiration of the term provided in paragraph 2.1, then, upon such termination, regardless of the reason therefor, all compensation and benefits to Executive hereunder shall terminate contemporaneously with the termination of such employment; provided, however, that:

     (i) if such termination shall be for a reason encompassed by paragraph 2.2(i), then Company shall pay to Executive (or, in the event of Executive’s death, his designated beneficiary or his estate if Executive does not have a beneficiary designation on file with Company for this purpose) a lump-sum payment equal to six months of his base salary at the rate in effect under paragraph 3.1 on the date of such termination; and

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     (ii) if such termination shall be for any reason other than those encompassed by paragraphs 2.2 (i) or (ii), then Company shall provide Executive with the Termination Benefits.

Any lump-sum cash payment due to Executive (or his designated beneficiary, as the case may be) pursuant to the preceding sentence shall be paid to Executive within five business days of the date of Executive’s termination of employment with Company.

     6.4 By Executive. If Executive’s employment hereunder shall be terminated by Executive prior to expiration of the term provided in paragraph 2.1, then, upon such termination, regardless of the reason therefor, all compensation and benefits to Executive hereunder shall terminate contemporaneously with the termination of such employment; provided, however, that:

     (i) if such termination occurs for a reason encompassed by paragraph 2.3(i), then Company shall provide Executive with the Termination Benefits; and

     (ii) if such termination shall occur within the 180-day period beginning on the date upon which a Change in Control occurs, then Company shall provide Executive with the Termination Benefits.

     Any lump sum cash payment due to Executive pursuant to this paragraph shall be paid to Executive within five business days of the date of Executive’s termination of employment with Company.

     6.5 Death of Executive. Upon the date of death of Executive, the Agreement shall terminate and Company shall pay to Executive’s designated beneficiary (or his estate if Executive does not have a beneficiary designation on file with Company for this purpose) a lump-sum payment equal to six months of his base salary at the rate in effect under paragraph 3.1 on the date of such termination, such payment to be made as soon as practicable following such death, but in no event later than the later of (i) the end of the calendar year of the date of death of Executive or (ii) the 75^th day following the date of death of Executive.

     6.6 Additional Payments by Company.

     (a) Notwithstanding anything to the contrary in this Agreement, in the event that any payment or distribution by Company to or for the benefit of Executive, whether paid or payable or distributed or distributable pursuant to the terms of this Agreement or otherwise (a “Payment”), would be subject to the excise tax imposed by Section 4999 of the Code or any interest or penalties with respect to such excise tax (such excise tax, together with any such interest or penalties, are hereinafter collectively referred to as the “Excise Tax”), Company shall pay to Executive an additional payment (a “Gross-up Payment”) in an amount such that after payment by Executive of all taxes (including any interest or penalties imposed with respect to such taxes), including any Excise Tax imposed on any Gross-up Payment, Executive retains an amount of the Gross-up Payment equal to the Excise Tax imposed upon the Payments. Company and Executive shall make an initial determination as to whether a Gross-up Payment is required and the amount of any such Gross-up Payment, and any Gross-up Payment so determined shall be paid to Executive as a lump-sum payment on the date the related Payment is made. Unless

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withheld and remitted by the Company, Executive shall timely remit any required Excise Tax payments to the Internal Revenue Service.

     (b) Executive shall notify Company in writing of any claim by the Internal Revenue Service which, if successful, would require Company to make a Gross-up Payment (or a Gross-up Payment in excess of that, if any, initially determined by Company and Executive) within 10 days of the receipt of such claim. Company shall notify Executive in writing at least 10 days prior to the due date of any response required with respect to such claim if it plans to contest the claim. If Company fails to timely notify Executive whether it will contest such claim or Company determines not to contest such claim, then Company shall immediately pay to Executive the portion of such claim, if any, which it has not previously paid to Executive. If Company decides to contest such claim, Executive shall cooperate fully with Company in such action; provided, however, Company shall bear and pay directly or indirectly all costs and expenses (including additional interest and penalties) incurred in connection with such action and shall indemnify and hold Executive harmless, on an after-tax basis, for any Excise Tax or income tax, including interest and penalties with respect thereto, imposed as a result of Company’s action.

     (c) Any Gross-up Payment, reimbursement, indemnification or in-kind provision of expenses under clause (b) shall be made by Company to Executive promptly after incurrence thereof by Executive but in no event later than the end of the calendar year next following the calendar year in which Executive remits the related taxes that are the subject of the audit or litigation to the Internal Revenue Service (or, if no taxes are remitted, the end of the calendar year following the calendar year in which the audit is completed, settled or otherwise resolved) provided, that Executive must provide reasonable documentation to Company to substantiate taxes paid and expenses incurred. If, as a result of Company’s action with respect to a claim, Executive receives a refund of any amount paid by Company with respect to such claim, Executive shall promptly pay such refund to Company.

     6.7 No Duty to Mitigate Losses. Executive shall have no duty to find new employment following the termination of his employment under circumstances which require Company to pay any amount to Executive pursuant to this Article 6. Any salary or remuneration received by Executive from a third party for the providing of personal services (whether by employment or by functioning as an independent contractor) following the termination of his employment under circumstances pursuant to which this Article 6 apply shall not reduce Company’s obligation to make a payment to Executive (or the amount of such payment) pursuant to the terms of this Article 6.

     6.8 Liquidated Damages. In light of the difficulties in estimating the damages for an early termination of this Agreement, Company and Executive hereby agree that the payments, if any, to be received by Executive pursuant to this Article 6 shall be received by Executive as liquidated damages. Employee shall have no liability for his termination of this Agreement in accordance with paragraph 2.3.

     6.9 Other Benefits. This Agreement governs the rights and obligations of Executive and Company with respect to Executive’s base salary and certain perquisites of employment. Except as expressly provided herein, Executive’s rights and obligations both during the term of

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his employment and thereafter with respect to stock options, restricted stock, incentive and deferred compensation, life insurance policies insuring the life of Executive, and other benefits under the plans and programs maintained by Company shall be governed by the separate agreements, plans and other documents and instruments governing such matters.

ARTICLE 7: MISCELLANEOUS

     7.1 Notices. For purposes of this Agreement, notices and all other communications provided for herein shall be in writing and shall be deemed to have been duly given when personally delivered or when mailed by United States registered or certified mail, return receipt requested, postage prepaid, addressed as follows:

If to Company to:	W-H Energy Services, Inc.
	2000 West Sam Houston Parkway South
	Suite 500
	Houston, Texas 77042
	Attention: Chief Executive Officer
If to Executive to:	Stuart J. Ford
	18706 Autumn Breeze
	Spring, TX 77379

or to such other address as either party may furnish to the other in writing in accordance herewith, except that notices or changes of address shall be effective only upon receipt.

     7.2 Applicable Law. This Agreement is entered into under, and shall be governed for all purposes by, the laws of the State of Texas.

     7.3 No Waiver. No failure by either party hereto at any time to give notice of any breach by the other party of, or to require compliance with, any condition or provision of this Agreement shall be deemed a waiver of similar or dissimilar provisions or conditions at the same or at any prior or subsequent time.

     7.4 Severability. If a court of competent jurisdiction determines that any provision of this Agreement is invalid or unenforceable, then the invalidity or unenforceability of that provision shall not affect the validity or enforceability of any other provision of this Agreement, and all other provisions shall remain in full force and effect.

     7.5 Counterparts. This Agreement may be executed in one or more counterparts, each of which shall be deemed to be an original, but all of which together will constitute one and the same Agreement.

     7.6 Withholding of Taxes and Other Employee Deductions. Company may withhold from any benefits and payments made pursuant to this Agreement all federal, state, city and other taxes as may be required pursuant to any law or governmental regulation or ruling and all other normal employee deductions made with respect to Company’s employees generally.

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     7.7 Headings. The paragraph headings have been inserted for purposes of convenience and shall not be used for interpretive purposes.

     7.8 Gender and Plurals. Wherever the context so requires, the masculine gender includes the feminine or neuter, and the singular number includes the plural and conversely.

     7.9 Affiliate. As used in this Agreement, the term “affiliate” shall mean any entity which owns or controls, is owned or controlled by, or is under common ownership or control with, Company.

     7.10 Assignment. This Agreement shall be binding upon and inure to the benefit of Company and any successor of Company, by merger or otherwise. Except as provided in the preceding sentence, this Agreement, and the rights and obligations of the parties hereunder, are personal and neither this Agreement, nor any right, benefit, or obligation of either party hereto, shall be subject to voluntary or involuntary assignment, alienation or transfer, whether by operation of law or otherwise, without the prior written consent of the other party.

     7.11 Term. This Agreement has a term co-extensive with the term of employment provided in paragraph 2.1. Termination shall not affect any right or obligation of any party which is accrued or vested prior to such termination.

     7.12 Entire Agreement. Except as provided in (i) the written benefit plans and programs referenced in paragraph 6.8 (and any agreements between Company and Executive that have been executed under such plans and programs) and (ii) any signed written agreement contemporaneously or hereafter executed by Company and Executive, this Agreement constitutes the entire agreement of the parties with regard to the subject matter hereof, and contains all the covenants, promises, representations, warranties and agreements between the parties with respect to employment of Executive by Company. Without limiting the scope of the preceding sentence, all understandings and agreements preceding the date of execution of this Agreement and relating to the subject matter hereof (other than the agreements described in clause (i) of the preceding sentence) are hereby null and void and of no further force and effect. Any modification of this Agreement will be effective only if it is in writing and signed by the party to be charged.

     7.13 Section 409A. The parties intend that this Agreement be interpreted in a manner to be exempt from the requirements of Section 409A of the Code and, where not so exempt, to be in compliance therewith. Executive (or his estate or beneficiary) shall have no right to dictate the taxable year in which any payment hereunder should be paid. Notwithstanding any provision of this Agreement to the contrary, only to the extent that this Agreement is subject to the requirements of Section 409A of the Code and is not exempted from such requirements, if at the time of Executive’s termination of employment with the Company, Executive is a “specified employee” as defined in Section 409A of the Code, no payment or benefit that results from Executive’s termination of employment will be provided until the date which is six months after the date of Executive’s termination of employment. Payments to which Executive would otherwise be entitled during the six-month period described above will be accumulated and paid in a lump sum on the first day of the seventh month after the date of Executive’s termination of employment. Notwithstanding anything to the contrary, to the extent required by Section 409A

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of the Code (a) the amount of expenses eligible for reimbursement or to be provided as an in-kind benefit under this Agreement with respect to a calendar year may not affect the expenses eligible for reimbursement or to be provided as an in-kind benefit in any other calendar year and (b) the right to reimbursement or in-kind benefits under this Agreement shall not be subject to liquidation or exchange for another benefit.

(Signature page follows)

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     IN WITNESS WHEREOF, the parties hereto have executed this Agreement on the first day of January, 2008, to be effective as of the Effective Date.

W-H ENERGY SERVICES, INC.
By:	/s/ Kenneth T. White, Jr.
Name:	Kenneth T. White, Jr.
Title:	Chairman, President and Chief Executive Officer
By:	/s/ Stuart J. Ford
	Stuart J. Ford

EX-21.1

Exhibit 21.1

LIST OF SUBSIDIARIES OF THE COMPANY

1.	Agri-Empresa Transportation, Inc. (TX)
2.	Agri-Empresa, Inc. (TX)
3.	Boyd’s Bit Service, Inc. (LA)
4.	Boyd’s Holdings, L.L.C. (DE)
5.	Boyd’s Rental Tools S. de R.L. de C.V. (Mexico)
6.	Boyd’s Rental Tools Servicios S. de R.L. de C.V. (Mexico)
7.	Coil Tubing Services, L.L.C. (LA)
8.	Dyna Drill Technologies, Inc. (TX)
9.	Dyna-Drill Technologies Canada L.P. (Canada)
10.	Dyna-Drill Technologies Canada Ltd. (Canada)
11.	Enertech Wireline Services, L.P. (TX)
12.	Grinding and Sizing Company, Inc. (TX)
13.	Integrity Industries, Inc. (TX)
14.	LSDI, L.P. (DE)
15.	Madden Systems, Inc. (TX)
16.	Mt. Pulaski Products, Inc. (DE)
17.	P.E.S. Management C.V. (Netherlands)
18.	PathFinder Saudi Arabia Limited (Saudi Arabia)
19.	PathFinder Energy Services B.V. (Netherlands)
20.	PathFinder Energy Services II B.V. (Netherlands)
21.	PathFinder Energy Services Canada Ltd. (Canada)
22.	PathFinder Energy Services Holding B.V. (Netherlands)
23.	PathFinder Energy Services Holdings, Inc. (DE)
24.	PathFinder Energy Services Limited (UK)
25.	PathFinder Energy Services, Inc. (LA)
26.	Perf-O-Log, Inc. (TX)
27.	STG Transportation, Inc. (TX)
28.	Superior Lonestar LP, L.L.C. (DE)
29.	Superior Packaging & Distribution, L.P. (DE)
30.	Thomas Energy Services, Inc. (LA)
31.	U. S. Clay, L.P. (TX)
32.	W-H Acquisitions, L.L.C. (DE)
33.	W-H Energy Holdings, Inc. (DE)
34.	W-H Energy Holdings II, Inc. (DE)
35.	W-H Energy Rocky Mountains, Inc. (DE)
36.	W-H Energy Services, L.P. (DE)

EX-23.1

Exhibit 23.1

CONSENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

We have issued our reports dated February 27, 2008, accompanying the consolidated financial statements and management’s assessment of the effectiveness of internal control over financial reporting included in the Annual Report of W-H Energy Services, Inc. on Form 10-K for the year ended December 31, 2007. We hereby consent to the incorporation by reference of said reports in the Registration Statements of W-H Energy Services, Inc. on Forms S-8 (File Nos. 333-69480, 333-56116, 333-115784 and 333-134597).

Houston, Texas
February 27, 2008

EX-31.1

Exhibit 31.1

CERTIFICATION PURSUANT TO SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002

I, Kenneth T. White, Jr., Chief Executive Officer of W-H Energy Services, Inc., certify that:

     1. I have reviewed this annual report on Form 10-K of W-H Energy Services, Inc.;

     2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

     3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

     4. The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

a) designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b) designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c) evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d) disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

     5. The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of registrant’s board of directors (or persons performing the equivalent functions):

a) all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

b) any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: February 28, 2008

	/s/ Kenneth T. White, Jr.
Name:	Kenneth T. White, Jr.
Title:	Chairman, President and Chief Executive Officer

EX-31.2

Exhibit 31.2

CERTIFICATION PURSUANT TO SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002

I, Ernesto Bautista III, Chief Financial Officer of W-H Energy Services, Inc., certify that:

     1. I have reviewed this annual report on Form 10-K of W-H Energy Services, Inc.;

     2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

     3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

     4. The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

a) designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b) designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c) evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d) disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

     5. The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of registrant’s board of directors (or persons performing the equivalent functions):

a) all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

b) any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: February 28, 2008

/s/ Ernesto Bautista III
Name:	Ernesto Bautista III
Title:	Vice President and Chief Financial Officer

EX-32.1

EXHIBIT 32.1

CERTIFICATION OF CHIEF EXECUTIVE OFFICER
W-H ENERGY SERVICES, INC.
PURSUANT TO 18 U.S.C. SECTION 1350

     In connection with the annual report on Form 10-K for the period ended December 31, 2007 filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, Kenneth T. White, Jr., the Chief Executive Officer of W-H Energy Services, Inc. (the “Company”), hereby certify, to my knowledge, that:

1. The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

2. The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

/s/ Kenneth T. White, Jr.
Name:	Kenneth T. White, Jr.
Date:	February 28, 2008

This certification is furnished solely to comply with the requirements of Rule 13a-14(b) under the Securities Exchange Act of 1934 and 18 U.S.C. section 1350, is subject to the knowledge standard contained therein and shall not be deemed to be a part of the Report or “filed” for any purpose whatsoever.

EX-32.2

EXHIBIT 32.2

CERTIFICATION OF CHIEF FINANCIAL OFFICER
W-H ENERGY SERVICES, INC.
PURSUANT TO 18 U.S.C. SECTION 1350

     In connection with the annual report on Form 10-K for the period ended December 31, 2007 filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, Ernesto Bautista III, the Chief Financial Officer of W-H Energy Services, Inc. (the “Company”), hereby certify, to my knowledge, that:

1. The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

2. The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

	/s/ Ernesto Bautista III
Name:	Ernesto Bautista III
Date:	February 28, 2008

This certification is furnished solely to comply with the requirements of Rule 13a-14(b) under the Securities Exchange Act of 1934 and 18 U.S.C. section 1350, is subject to the knowledge standard contained therein and shall not be deemed to be a part of the Report or “filed” for any purpose whatsoever.