S-1/A

As filed with the Securities and Exchange Commission on June 5, 2007

Registration No. 333-142174

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

AMENDMENT NO. 1 TO

FORM S-1

REGISTRATION STATEMENT

UNDER

THE SECURITIES ACT OF 1933

Stallion Oilfield Services, Inc.

(Exact name of registrant as specified in its charter)

Delaware	1389	72-1618455
(State or other jurisdiction of incorporation or organization)	(Primary Standard Industrial Classification Code Number)	(I.R.S. Employer Identification No.)

410 Roberts Street

Houston, Texas 77003

(713) 528-5544

(Address, including zip code, and telephone number, including area code, of registrant’s principal executive offices)

Craig M. Johnson

Chief Executive Officer

410 Roberts Street

Houston, Texas 77003

(713) 528-5544

(Name, address, including zip code, and telephone number, including area code, of agent for service)

Copies to:

Vinson & Elkins L.L.P. First City Tower, Suite 2300 1001 Fannin Street Houston, Texas 77002 (713) 758-2222 Attn: T. Mark Kelly Attn: Christopher S. Collins Baker Botts L.L.P. One Shell Plaza 910 Louisiana Street Houston, Texas 77002 (713) 229-1234 Attn: R. Joel Swanson Attn: Felix P. Phillips

Approximate date of commencement of proposed sale to the public:    As soon as practicable after this Registration Statement becomes effective.

If any of the securities being registered on this Form are to be offered on a delayed or continuous basis pursuant to Rule 415 under the Securities Act of 1933, please check the following box.  ¨

If this form is filed to register additional securities for an offering pursuant to Rule 462(b) under the Securities Act, please check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering.  ¨

If this Form is a post-effective amendment filed pursuant to Rule 462(c) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering.  ¨

If this Form is a post-effective amendment filed pursuant to Rule 462(d) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering.  ¨

The Registrant hereby amends this Registration Statement on such date or dates as may be necessary to delay its effective date until the Registrant shall file a further amendment which specifically states that this Registration Statement shall thereafter become effective in accordance with Section 8(a) of the Securities Act of 1933 or until the Registration Statement shall become effective on such date as the Commission, acting pursuant to said Section 8(a), may determine.

The information in this prospectus is not complete and may be changed. We may not sell these securities until the registration statement filed with the Securities and Exchange Commission is effective. This prospectus is not an offer to sell these securities and it is not soliciting an offer to buy these securities in any state where the offer or sale is not permitted.

Subject to Completion, dated June 5, 2007

PROSPECTUS

             Shares

Common Stock

This is the initial public offering of Stallion Oilfield Services, Inc. common stock. We are offering              shares of our common stock and the selling stockholders, including members of our senior management, are offering              shares of our common stock in this initial public offering. No public market currently exists for our common stock. We will not receive any of the proceeds from the shares of our common stock sold by the selling stockholders.

We have applied for listing of our common stock on The NASDAQ Stock Market LLC under the symbol “SOFS.” We currently estimate that the initial public offering price will be between $             and $             per share.

Investing in our common stock involves risk. See “ Risk Factors” beginning on page 12.

	Per Share	Total
Public offering price	$	$
Underwriting discounts and commissions	$	$
Proceeds to the Company (before expenses)	$	$
Proceeds to the selling stockholders (before expenses)	$	$

We have granted the underwriters a 30-day option to purchase up to an aggregate of              additional shares of common stock on the same terms and conditions set forth above if the underwriters sell more than              shares of common stock in this offering.

Neither the Securities and Exchange Commission nor any state securities commission has approved or disapproved of these securities or passed upon the accuracy or adequacy of this prospectus. Any representation to the contrary is a criminal offense.

Lehman Brothers, on behalf of the underwriters, expects to deliver the shares on or about                     , 2007

LEHMAN BROTHERS CREDIT SUISSE   UBS INVESTMENT BANK

RAYMOND JAMES

                    , 2007

TABLE OF CONTENTS

	Page
Summary	1
Risk Factors	12
Forward-Looking Statements	24
Use of Proceeds	25
Dividend Policy	25
Capitalization	26
Dilution	27
Unaudited Pro Forma Consolidated Financial Data	29
Selected Consolidated Financial Data	34
Management’s Discussion and Analysis of Financial Condition and Results of Operations	36
Business	65
Management	82

	Page
Certain Relationships and Related Party Transactions	97
Principal and Selling Stockholders	101
Description of Capital Stock	102
Shares Eligible For Future Sale	105
Certain United States Federal Tax Considerations for Non-United States Holders	107
Underwriting	110
Legal Matters	116
Experts	116
Where You Can Find More Information	116
Index to Financial Statements	F-1
Appendix A—Glossary of Terms	A-1

Dealer Prospectus Delivery Obligation

Until                     , 2007, 25 days after the date of this prospectus, all dealers that effect transactions in our common stock, whether or not participating in this offering, may be required to deliver a prospectus. This is in addition to the dealers’ obligation to deliver a prospectus when acting as underwriters and with respect to their unsold allotments or subscriptions.

ABOUT THIS PROSPECTUS

You should rely only on the information contained in this prospectus. We and the selling stockholders have not authorized any other person to provide you with information different from that contained in this prospectus. We and the selling stockholders are only offering to sell, and only seeking offers to buy, the common stock in jurisdictions where offers and sales are permitted.

The information contained in this prospectus is accurate only as of the date of this prospectus, regardless of the time of delivery of this prospectus or of any sale of our common stock. Our business, financial condition, results of operations and prospects may have changed since that date.

This prospectus includes market share and industry data and forecasts that we obtained from internal company surveys, market research, consultant surveys, publicly available information and industry publications and surveys. We believe the information included in this prospectus from market research, consultant surveys and industry publications and surveys is reliable.

Non-GAAP Financial Measures

The body of accounting principles generally accepted in the United States of America is commonly referred to as “GAAP.” A non-GAAP financial measure is generally defined by the Securities and Exchange Commission, or SEC, as one that purports to measure historical or future financial performance, financial position or cash flow, but excludes or includes amounts that would not be so adjusted in the most comparable GAAP measures. In this prospectus, we disclose EBITDA, a non-GAAP financial measure. EBITDA is calculated as net income before interest expense, taxes, depreciation and amortization. EBITDA is not a substitute for GAAP measures of earnings and cash flow. EBITDA is included in this prospectus because our management considers it an important supplemental measure of our performance and believes that it is frequently used by security analysts, investors and other interested parties in the evaluation of companies in our industry, some of which present EBITDA when reporting their results.

SUMMARY

This summary highlights selected information in this prospectus, but it does not contain all of the information that you should consider before deciding to invest in our common stock. You should read this entire prospectus carefully, including the “Risk Factors” section and our historical financial statements and pro forma financial data, which are included elsewhere in this prospectus.

Unless otherwise indicated or the context otherwise requires, (i) the information contained in this prospectus assumes that the underwriters’ option to purchase additional shares is not exercised, (ii) the information contained in this prospectus relating to us assumes the completion of the Restructuring as described under the caption “The Restructuring” below and assumes the completion of the pending acquisitions as described under the caption “Recent Developments—Pending Acquisitions” below, which are expected to close in July 2007 for total purchase consideration of $225.8 million, and (iii) references in this prospectus to “Stallion,” “we,” “us” and “our” are references to Stallion Oilfield Services, Inc. together with all of its subsidiaries subsequent to the Restructuring and are references to our predecessor entities and their respective subsidiaries prior to the Restructuring.

Our Company

We are a growth-oriented oilfield service company that provides comprehensive wellsite support services and production and logistics services to exploration and production companies and drilling contractors throughout the United States. Our company slogan, Everything but the Rig ^SM, reflects our business strategy of providing a broad and comprehensive range of critical services to support wellsite operations, including onshore and offshore workforce accommodations, surface equipment rental, solids control, production fluid services, site construction, rig relocation and heavy equipment hauling. Our service offerings are designed to improve living and working conditions at the wellsite, wellsite safety and our customers’ drilling and production operations. We currently focus on oil and natural gas regions within North America that we believe have stable oil and gas drilling activity and which provide attractive long-term potential for growth, including South Texas, the Gulf Coast, ArkLaTex, North Texas, the Permian Basin, the Mid-Continent and Rocky Mountain regions. We also supply offshore workforce accommodations and related equipment for use in the Gulf of Mexico and, to a lesser extent, other international offshore regions. We provide services to a diverse group of over 2,000 customers. The Glossary of Terms included as Appendix A to this prospectus contains a description of some of these regions and a map of these regions appears at the end of the appendix.

Our services span the entire life-cycle of the land-based wellsite—wellsite preparation, rig deployment, drilling activities, production activities and decommissioning. We are typically the first service provider on the wellsite, as we assist in the initial preparation of the wellsite and often haul the rig and related heavy equipment onto the site using our fleet of tractor trucks, trailers, pole trucks and cranes. Throughout the drilling and completion phases of the land-based well, we provide rental equipment and required support services to the wellsite. We also, in some cases, provide continuing support services during the production phase of the well, including construction of production facilities and well connections to existing pipeline infrastructure. We frequently are the last service provider to leave the wellsite as we perform production facility disassembly and site restoration, which are the last phases of the wellsite decommissioning process. In addition, our offshore workforce accommodations business serves our offshore customers during many phases of the offshore drilling and production life-cycle.

1

Our business is comprised of two segments:

Wellsite Support Services. Through our wellsite support services segment, we offer integral services used by oil and natural gas companies, drilling contractors and other wellsite service providers to support wellsite operations. In 2006, this segment generated pro forma revenue of approximately $197.3 million. See “Unaudited Pro Forma Consolidated Financial Data.” This segment includes the following primary service lines:

• Workforce accommodations. We provide onshore workforce accommodations in the United States with, as of March 31, 2007, over 2,000 transportable units in our inventory. Our fleet of land-based units is designed to accommodate various personnel on wellsite locations before, during and after drilling operations. In addition, we design, manufacture, lease and repair offshore workforce accommodation structures, which include units certified by the U.S. Coast Guard and/or the International Convention for the Safety of Life at Sea, 1974, the paramount international treaty concerning the safety of merchant ships (“SOLAS”). Our workforce accommodation units are specifically configured to provide transportable, comfortable living quarters and functional workspaces.

• Surface equipment rental. We provide a variety of surface rental equipment used in and critical to wellsite activities including forklifts, manlifts, power generators, compressors, loaders and water systems.

• Communications services. We provide integrated communications services through our StaRComm^TM/SM satellite system that provides wireless communications via intercoms and telephone, fax and internet/data services throughout the wellsite location.

• Solids control. We provide customized solids control services, closed-loop mud systems and fluid recovery services to help maximize our customers’ operating efficiency at the wellsite. We provide high-quality shakers, mud conditioners, centrifuges and peripheral backside equipment, as well as solids removal and waste handling coordination services.

Production and Logistics Services. Through our production and logistics services segment, we offer services that are critical to establish, maintain and decommission the wellsite, position key equipment prior to, during and after drilling operations and provide fluid logistics and services for drilling completion and production activities. In 2006, this segment generated pro forma revenue of approximately $126.6 million. See “Unaudited Pro Forma Consolidated Financial Data.” This segment includes the following primary service lines:

• Production fluid services. We provide a fleet of vacuum trucks, frac tank rentals, saltwater disposal wells and other assets used for fluid provision, transportation and disposal services. These specialized assets allow our customers to obtain, move, store and dispose of fluids that are involved in the development and production of the wellsite.

• Site construction. We provide construction equipment and services to build and reclaim infrastructure at wellsites before, during and after drilling operations. Our services include site clearing, road construction, mat placement, production facility assembly and construction, pipeline installation, pit remediation, production decommissioning and site restoration. We provide services for wellsites in both land and inland marine environments.

• Rig relocation and heavy equipment hauling. We provide a fleet of tractor trucks, trailers, pole trucks and cranes used for the demobilization, relocation and mobilization of drilling rigs and related heavy equipment. We maintain a focus on providing reliable, efficient and safe transportation services.

Wellsite support services and production and logistics services are critical to establish and operate the land-based wellsite. We believe our scale, access to capital and our ability to provide a single supply source for many of our customers’ needs are strengths of our business. In addition, we provide offshore workforce accommodations to exploration and production companies in the Gulf of Mexico and, to a lesser extent, other international offshore regions.

2

Recent Industry Trends

In recent years, our industry has experienced higher demand for oil and natural gas and a constrained oil and natural gas supply, resulting in higher commodity prices and increased drilling activity. We believe this trend of increased natural gas prices and drilling activity, as well as other industry trends reflected below, will benefit us and facilitate implementation of our business strategy:

• Labor shortages and increasing safety concerns. Due to the increase in the demand for labor in the oilfield and offshore, our customers continue to attempt to improve living and working conditions at the wellsite to help retain employees. Our customers also continue to enhance their safety procedures to help reduce injuries and to help ensure compliance with more stringent regulatory requirements.

• Increasingly complex technologies. The increasing complexity of technology used in the oil and natural gas development process requires a greater number of technicians on location during drilling and, therefore, additional workforce accommodations.

• Geographically dispersed drilling operations. With the shift toward consolidation in the land drilling industry, land crews based in one region may accompany a rig to work on wellsites in geographically dispersed oil and natural gas regions a significant distance away from the home office. This development has resulted in the need for full-time accommodations for multiple shifts of the rig crew.

• Increase in drilling and developing unconventional resources. The decline of conventional North American oil and natural gas reservoirs is leading to a shift toward the drilling and development of onshore unconventional oil and natural gas resources. We believe the increased drilling requirements of these unconventional resources will lead to continued drilling activity. Recently, there has been an increase in the construction of new drilling rigs to meet this demand.

• Environmental sensitivity. In response to increasing regulation and environmental sensitivity, onshore wellsite operators are utilizing closed-loop solids control systems to help reduce onsite discharge of drilling fluids and cuttings in environmentally sensitive areas and when working with oil-based and synthetic drilling fluids. These systems require customized solids control configurations to maximize drilling fluid efficiency.

• Outsourcing ancillary services. Some of the services we provide have been historically handled by drilling contractors themselves. In many instances, these services are only ancillary to the primary activity of drilling and completing wells and represent only a minor portion of the total well drilling cost. Many drilling contractors are increasingly electing to outsource these services to suppliers who can provide high-quality and reliable services.

• Increased deepwater development activity. Deepwater exploration and production activities are typically complex with long durations and require personnel involved in drilling, production and construction. Growth in these deepwater activities has resulted in the need for more workforce accommodations on offshore platforms.

• Increase in fluids used in non-conventional horizontal well completions. Completions of non-conventional horizontal wells in the Barnett Shale region of North Texas require fresh water. The amount of fresh water used for such completions is significantly greater than the amount of fresh water used for completions of vertical wells.

3

Our Business Strategy

Our business strategy consists of the following core elements:

Broaden the suite of services we provide. We have established strong working relationships with our customers which provide us a stable base of operations. We work closely with our customers to define new service offerings that meet specific customer needs in the onshore markets where we operate and also intend to expand our offshore service offerings. We intend to continue to invest in developing or acquiring new high-quality assets and services which add to the breadth and quality of our service portfolio. As an example, we will enter the production fluid services business when we close our pending acquisitions of the assets of various entities operating under the name of Salty’s (together, “Salty’s”) and Bayou Tank Services, Ltd. (“Bayou Tank”), for total consideration of approximately $225.8 million, subject to certain purchase price adjustments. Please read “—Recent Developments—Pending Acquisitions” for a discussion of these acquisitions.

Establish and maintain a leadership position in our principal operating areas. We intend to continue to build upon our market positions in the areas in which we operate by offering a comprehensive and integrated package of services which allows us to provide our customers with wellsite support services required across their drilling locations. We view the incremental steps in achieving this to include:

• Deploying our suite of services across existing land-based operating areas. We believe we have developed expertise in specific service lines which can be effectively marketed across the majority of our land-based operating areas. We intend to continue to roll-out our existing services across our current operating areas in an effort to deliver a comprehensive portfolio of services in each region. We believe our established customer base and strong regional relationships will continue to provide a strategic distribution network for our service deployment efforts.

• Continue to develop our offshore service offerings. We provide offshore workforce accommodations to exploration and production companies. We intend to expand our manufacturing capabilities and offshore service offerings to meet the growing needs of our customers.

Extend our operations into new geographic areas. We intend to apply our expertise in wellsite support services and land-based production and logistics services in markets where we currently do not operate and which provide an attractive platform for future growth. We intend to continue to improve the ease with which our clients can use our services from one wellsite location to the next. We expect to support our customers’ entry into other active drilling regions by introducing our service offerings in those regions.

Expand our services internationally. Our offshore workforce accommodation business predominantly operates in the Gulf of Mexico. We intend to pursue strategic opportunities to expand our service offerings into other international offshore markets by leveraging our custom product design and existing customer base.

Focus on service quality, business performance and safety. Our management team is responsible for assessing our service quality, performance and safety compliance and coordinates with our field offices to help ensure that our quality and performance metrics and safety standards are met at every level of our organization. In addition to our internal safety policies, we adhere to certain external safety regulations, such as certifying certain of our offshore workforce accommodation units with the U.S. Coast Guard and/or SOLAS prior to deployment. We intend to continue to invest in and promote designs, systems and methodologies which improve the reliability, responsiveness, accountability and safety of our operations.

Continue to pursue strategic expansion opportunities. We believe that the markets in which we operate remain fragmented and that there are numerous consolidation opportunities within these markets. We completed 17 acquisitions in 2005 and 2006 and intend to continue pursuing strategic acquisitions which add to the scope

4

and quality of our service portfolio. In evaluating such acquisitions we consider a number of factors, including synergies with existing operations, financial performance and acquisition costs.

Capitalize on regional experience. One component of our acquisition and growth strategy is to acquire assets located in strategic operating areas that include personnel with strong local leadership and regional experience. We believe that by having the administrative functions previously performed at the regional level centralized in and handled by our corporate office, we have enhanced our controls environment and enabled our local management to focus on our customers, our employees and the effective management and deployment of our assets.

For further information on our business strategy, please read “Business—Our Business Strategy.”

Our Competitive Strengths

We believe our operations benefit from a number of competitive strengths, including the following:

• Extensive breadth of service throughout the wellsite life-cycle. We provide a broad array of wellsite services throughout each phase of the land-based drilling and production process. This breadth of service strengthens our relationships with our customers and allows us to identify and cross-sell additional services.

• Extensive geographic footprint with a strong regional and local presence. Our regional operations are located in some of the most active onshore oil and natural gas drilling regions of the United States, including South Texas, the onshore Gulf Coast, ArkLaTex, North Texas, the Permian Basin, the Mid-Continent and Rocky Mountain regions. Within these regions there were approximately 1,548 active land drilling rigs as of May 11, 2007. In addition, our products are utilized in certain offshore markets, including the Gulf of Mexico, and, to a lesser extent, other international offshore regions. Within the offshore Gulf of Mexico market, there were approximately 76 active offshore drilling rigs as of May 11, 2007. Our regional managers have developed strong relationships with our customers throughout their regions and are largely responsible for the sales, marketing and delivery of our services.

• Large scale of operations. We provide comprehensive land-based wellsite services in our operating areas. Our scale enables us to deliver a comprehensive range of reliable and high-quality wellsite services to our customers.

• Experienced management team with proven acquisition track record and control environment. Our senior management team has extensive experience in the oil and natural gas industry, with an average of 22 years of experience. We believe this background provides our management team with an in-depth understanding of our customers’ needs and enhances our ability to deliver customer driven solutions. Our management also has substantial experience in identifying, completing and integrating acquisitions and since our inception through May 31, 2007, we have acquired 26 businesses. We have also implemented a standardized control environment that includes accounting, safety, environmental and maintenance processes and controls.

• Leveraged to drilling activity. We believe that favorable supply and demand fundamentals will maintain the current level of drilling for oil and natural gas. Efforts to maintain current levels of production will necessitate continued drilling for the foreseeable future, which will sustain demand for our services. As our package of services typically comprises less than 15% of total drilling expenditures, our business has not historically experienced the pricing volatility experienced by drilling contractors, who represent a much larger portion of total drilling expenditures.

5

• Leadership position in the offshore workforce accommodation business. We provide U.S. Coast Guard and SOLAS certified offshore workforce accommodation units worldwide. We believe our history, our custom design and the quality of our products and services are strengths of our business.

Our Challenges

We face a number of challenges in implementing our business strategy. For example:

• demand for the services we provide will likely be adversely affected by a prolonged substantial reduction in oil and natural gas prices;

• our ability to broaden the suite of services we provide will be diminished if we encounter difficulties associated with rapid growth and expansion;

• establishing and maintaining a leadership position in our principal operating areas may not be possible if we lose key members of our management team;

• expansion into new geographic areas, both domestically and internationally, will likely be limited if additional capital is not available to us; and

• our ability to focus on service quality, business performance and safety may be negatively impacted by the high rate of employee turnover in our industry and our inability to replace or add personnel.

For a further discussion of these and other challenges we face, please read “Risk Factors.”

Recent Developments

Recent Acquisition. In May 2007, we completed our acquisition of L.E.G. Rentals, Inc. and Fluid Processors, Inc. (together, “FPI”) located in Riverton, Wyoming for a purchase price of approximately $26.7 million in cash, subject to adjustments in accordance with the purchase agreement. This acquisition expanded our solids control business.

Pending Acquisitions. In May 2007, we entered into purchase agreements to acquire Salty’s and Bayou Tank. Completion of these acquisitions will expand our service offerings into the production fluid services business and is subject to customary closing conditions, including consents under certain customer contracts. Our aggregate cash purchase price for these acquisitions is estimated to be $225.8 million, subject to certain purchase price adjustments. We expect these acquisitions to close in July 2007.

Credit Facility. To support the growth of our business, we plan to amend and restate our existing senior secured credit facility in June 2007 to (i) increase the revolving credit line from $125 million to $175 million and (ii) add a $75 million term loan component. For further information on our current and proposed credit facility, please read “Management’s Discussion and Analysis of Financial Condition and Results of Operations—Liquidity and Capital Resources—Credit Facility.”

Risk Factors

You should carefully consider the matters described under “Risk Factors.” These risks could materially and adversely impact our business, financial condition, operating results and cash flows, which could cause the trading price of our common stock to decline and could result in a partial or total loss of your investment.

6

The Restructuring

We were formed as a Delaware corporation in June 2006. In connection with this offering, we will succeed to the business and operations of Stallion Oilfield Holdings, Ltd. (“Stallion Ltd.”), which are described in this prospectus. Prior to the completion of this offering, Stallion Ltd. will merge with and into Stallion Oilfield Services, Inc., with Stallion Oilfield Services, Inc. being the surviving corporate parent and owning all of the operating subsidiaries of Stallion Ltd. (the “Restructuring”). The majority owners of Stallion Ltd. are C/R Stallion Investment Partnership, L.P. and C/R Energy Coinvestment II, L.P. (together, “Carlyle/Riverstone”) and an affiliate of Craig Johnson, our President, Chief Executive Officer and Chairman of the Board. Since the entities are under common ownership and control, the Restructuring will be accounted for at historical cost. In the Restructuring, assuming an initial public offering price of $            , which is the midpoint of the public offering price range set forth on the cover of this prospectus, the partners of Stallion Ltd. will receive an aggregate of              shares of our common stock in exchange for all of the Stallion Ltd. partnership interests held by them. Immediately following completion of the Restructuring and prior to this offering, we will have              shares of common stock outstanding,         % of which will be owned by Carlyle/Riverstone and         % of which will be owned by an affiliate of Craig Johnson.

For additional information about the Restructuring, please read “Certain Relationships and Related Party Transactions—The Restructuring.” Please see “Business—Corporate Structure” for a chart depicting our corporate structure following the Restructuring.

Our Executive Offices

Our principal executive offices are currently located at 410 Roberts Street, Houston, Texas 77003, and our telephone number is (713) 528-5544. Information contained on or accessible from our website, www.stallionoilfield.com, is not part of this prospectus.

7

The Offering

Common stock offered by us              shares or              shares if the underwriters exercise in full their option to purchase additional shares of common stock

Common stock offered by the selling stockholders              shares

Common stock outstanding after this offering              shares or              shares if the underwriters exercise in full their option to purchase additional shares of common stock

Use of proceeds We estimate that our net proceeds from this offering, after deducting underwriting discounts and commissions and estimated offering expenses, will be approximately $             million, assuming an initial public offering price of $            , which is the midpoint of the range set forth on the cover page of this prospectus.

We intend to use the net proceeds we receive from this offering:

• to fund the $         million acquisition of Salty’s and Bayou Tank;

• to repay $             million of indebtedness under our credit facility; and

• for general corporate purposes, including potential acquisitions and capital expenditures in connection with our anticipated growth. See “Use of Proceeds.”

Some of the underwriters are lenders under our credit facility and will receive proceeds of the offering in connection with the repayment.

If we do not close the acquisitions of Salty’s or Bayou Tank, we will use the net proceeds of this offering to repay indebtedness under our credit facility and for general corporate purposes, including future acquisitions and capital expenditures in connection with our anticipated growth.

We will not receive any of the proceeds from the sale of shares of our common stock by the selling stockholders. The selling stockholders include members of our senior management. See “Principal and Selling Stockholders.”

We will use any net proceeds from the exercise of the underwriters’ option to purchase additional shares of common stock for general corporate purposes.

The NASDAQ Stock Market LLC symbol “SOFS”

Risk Factors See “Risk Factors” beginning on page 12 of this prospectus for a discussion of factors that you should carefully consider before deciding to invest in shares of our common stock.

The number of shares of common stock that will be outstanding after the offering includes as of March 31, 2007, an aggregate of              shares of restricted common stock issued to officers and key employees under our 2007 Stock Incentive Plan that are subject to vesting and excludes, as of March 31, 2007, an aggregate of              shares of common stock reserved and available for future issuance under our 2007 Stock Incentive Plan.

8

Summary Historical Financial Information

The following table sets forth our summary historical consolidated financial and operating data as of the dates and for the periods shown. Our operations are currently conducted by Stallion Oilfield Holdings, Ltd., a limited partnership, and its operating subsidiaries. Immediately prior to the closing of this offering, this limited partnership will merge with and into Stallion Oilfield Services, Inc., and we will operate under a corporate parent structure. Stallion Oilfield Services, Inc., the surviving entity of the Restructuring, will serve as the parent holding company under this new structure. The amounts for each historical annual period presented below were derived from our audited consolidated financial statements. The unaudited pro forma consolidated statement of operations data for the year ended December 31, 2006 gives effect to the net proceeds of this offering and to the acquisitions of BLR (acquired March 1, 2006), AOQ (acquired August 1, 2006), FPI (acquired May 31, 2007), Salty’s (expected to be acquired in July 2007) and Bayou Tank (expected to be acquired in July 2007), as if each was acquired on January 1, 2006. Results of BLR and AOQ are included in our historical results of operations from their respective dates of acquisition. Results of operations of FPI will be included in our results of operations beginning June 1, 2007. Results of Salty’s and Bayou Tank will be included in our results of operations from their respective dates of acquisition. The unaudited pro forma consolidated statement of operations data for the three months ended March 31, 2007 gives effect to the net proceeds of this offering and to the acquisition of FPI and the pending acquisitions of Salty’s and Bayou Tank as if each was acquired on January 1, 2007. The following information should be read in conjunction with “Capitalization,” “Management’s Discussion and Analysis of Financial Condition and Results of Operations,” our consolidated financial statements and related notes and the unaudited pro forma consolidated financial data included elsewhere in this prospectus. Stallion Oilfield Holdings, Ltd. was formed in 2002 and commenced operations in 2003. As a result, financial results for 2002 are not presented.

	Stallion Oilfield Holdings, Ltd. Historical Consolidated																		Stallion Oilfield Services, Inc. Pro Forma Consolidated
	Year Ended December 31,												Three Months Ended March 31, 2006			Three Months Ended March 31, 2007			Year Ended December 31, 2006			Three Months Ended March 31, 2007
	2003			2004			2005			2006
													(unaudited)			(unaudited)			(unaudited)			(unaudited)
	(in thousands, except per share amounts)
Statement of Operations Data:
Revenue:
Wellsite support services	$	6,769		$	15,452		$	73,126		$	162,661		$	32,917		$	46,859		$	197,283		$	51,757
Production and logistics services		—			—			—			77,749			6,045			35,212			126,356			59,417
Total revenue		6,769			15,452			73,126			240,410			38,962			82,071			323,639			111,174
Expenses:
Wellsite support services		3,108			8,695			42,281			74,200			16,873			26,236			86,657			27,795
Production and logistics services		—			—			—			42,319			3,955			23,442			58,677			38,049
Selling, general and administrative		2,145			3,745			9,883			43,359			4,570			8,247			61,103			11,484
Depreciation and amortization		836			1,924			7,798			30,068			4,299			10,771			59,640			16,368
Loss on disposal of assets		86			92			499			920			342			320			743			319
Total expenses		6,175			14,456			60,461			190,866			30,039			69,016			266,820			94,015
Operating income		594			996			12,665			49,544			8,923			13,055			56,819	(2)		17,159
Interest expense, net		(489	)		(917	)		(4,565	)		(18,919	)		(4,097	)		(12,048	)		(28,995	)		(12,782	)
Other income (expense)		—			—			(66	)		71			(10	)		77			165			227
Income before taxes		105			79			8,034			30,696			4,816			1,084			27,989			4,604
Income tax(1)		—			—			(598	)		(4,927	)		(911	)		(1,005	)		(10,636	)		(1,750	)
Net income	$	105		$	79		$	7,436		$	25,769		$	3,905		$	79		$	17,353		$	2,854
Pro forma income tax (unaudited)(1)	$	40		$	30		$	3,053		$	11,664		$	1,830		$	412
Pro forma net income (unaudited)	$	65		$	49		$	4,981		$	19,032		$	2,986		$	672
Earnings per share:
Basic
Diluted
Weighted average shares:
Basic
Diluted

9

	Stallion Oilfield Holdings, Ltd. Historical Consolidated
	Year Ended December 31,												Three Months Ended March 31, 2006			Three Months Ended March 31, 2007
	2003			2004			2005			2006
													(unaudited)			(unaudited)
	(in thousands)
Other Financial Data:
EBITDA(2)	$	1,430		$	2,920		$	20,397		$	79,683		$	13,212		$	23,903
Cash flow provided by operating activities		144			1,734			7,087			41,124			10,418			25,038
Cash flow used in investing activities		(7,536	)		(7,142	)		(83,462	)		(280,164	)		(95,516	)		(58,629	)
Cash flow provided by financing activities		7,804			5,046			77,307			242,158			112,555			37,429
Capital expenditures:
Acquisitions, net of cash acquired(3)		5,505			1,158			47,191			178,045			74,097			22,570
Property and equipment		2,046			5,961			35,951			92,029			20,310			36,500

	Stallion Oilfield Holdings, Ltd. Historical Consolidated										Stallion Oilfield Services, Inc. Pro Forma Consolidated
	As of December 31,								As of March 31, 2007		As of March 31, 2007
	2003		2004		2005		2006
									(unaudited)		(unaudited)
	(in thousands)
Balance Sheet Data
Cash and cash equivalents	$	412	$	50	$	982	$	4,100	$	7,938	$	7,938
Net property and equipment		7,131		13,899		74,583		220,777		252,829		320,871
Total assets		16,252		24,713		123,136		446,907		501,728		754,228
Total debt		11,705		18,552		67,795		257,539		303,981		556,481
Total partners’ capital		3,533		3,611		43,597		153,534		153,613		403,613

(1) Historically, we were not subject to taxes on a consolidated basis due to our partnership structure; however, certain of our subsidiary companies are taxable corporations and are subject to income tax. Pro forma net income for the year ended December 31, 2006 includes a provision for taxes on our consolidated income before tax. Pro forma income tax expense has been computed at a blended state and federal tax rate of 38%, which represents the statutory rate, to reflect the pro forma income tax effect on net income for the periods presented assuming that the Restructuring happened on January 1, 2003.

(2) EBITDA consists of net income before interest expense, taxes, depreciation and amortization. EBITDA is used as a supplemental financial measure by our management and by external users of our financial statements, such as investors and commercial banks, to assess:

• the financial performance of our assets without regard to financing methods, capital structure, or historical cost basis;

• the ability of our assets to generate cash sufficient to pay interest on our indebtedness;

• our operating performance and return on invested capital as compared to those of other companies in the oilfield service industry, without regard to financing methods and capital structure; and

• our compliance with certain financial covenants included in our credit facility.

EBITDA has limitations as an analytical tool and should not be considered an alternative to net income, operating income, cash flow from operating activities or any other measure of financial performance or liquidity presented in accordance with accounting principles generally accepted in the United States of America (“GAAP”). EBITDA excludes some, but not all, items that affect net income and operating income and these measures may vary among other companies. Limitations to using EBITDA as an analytical tool include:

• EBITDA does not reflect our cash expenditures or future requirements for capital expenditures or capital commitments;

• EBITDA does not reflect changes in, or cash requirements necessary to service interest or principal payments on, our debt;

• although depreciation and amortization are non-cash charges, the assets being depreciated and amortized will often have to be replaced in the future, and EBITDA does not reflect any cash requirements for such replacements; and

• other companies in our industry may calculate EBITDA differently than we do, limiting its usefulness as a comparative measure.

10

The following table presents a reconciliation of the non-GAAP financial measure of EBITDA to the most directly comparable GAAP financial measure on a historical basis for each of the indicated periods.

	Year Ended December 31,								Three Months Ended March 31,
	2003		2004		2005		2006		2006		2007
	(in thousands)								(unaudited)
Reconciliation of EBITDA to Net income:
Net income	$	105	$	79	$	7,436	$	25,769	$	3,905	$	79
Income taxes		—		—		598		4,927		911		1,005
Interest expense		489		917		4,565		18,919		4,097		12,048
Depreciation and amortization		836		1,924		7,798		30,068		4,299		10,771
EBITDA	$	1,430	$	2,920	$	20,397	$	79,683	$	13,212	$	23,903

(3) Acquisitions, net of cash acquired, consists only of the cash component of acquisitions. It does not include equity and/or notes issued for acquisitions.

11

RISK FACTORS

An investment in our common stock involves a high degree of risk. You should carefully consider the following risk factors, together with the other information contained in this prospectus, before deciding to invest in our common stock. Some of the following risks relate principally to the industry in which we operate and to our business. Other risks relate principally to the securities markets and ownership of our common shares. If any of the following risks develop into actual events, our business, financial condition or results of operations could be materially adversely affected, the trading price of your shares could decline, and you may lose all or part of your investment.

Risks Related to Our Business and Our Industry

Our business depends on domestic drilling activity and spending by the oil and natural gas industry in the United States. Our business may be adversely affected by industry conditions that are beyond our control.

We depend on our customers’ willingness to make expenditures to explore for and to develop and produce oil and natural gas in the United States. Our customers’ willingness to undertake these activities depends largely upon prevailing industry conditions that are influenced by numerous factors over which management has no control, such as:

• the supply of and demand for oil and natural gas;

• long lead times associated with acquiring equipment and shortages of qualified personnel;

• the level of prices, and expectations about future prices, of oil and natural gas;

• the cost of exploring for, developing, producing and delivering oil and natural gas;

• the expected rates of declining current production;

• the discovery rates of new oil and natural gas reserves;

• available pipeline, storage and other transportation capacity;

• weather conditions, including hurricanes that can affect oil and natural gas operations over a wide area;

• domestic and worldwide economic conditions;

• political instability in oil and natural gas producing countries;

• technical advances affecting energy consumption;

• the price and availability of alternative fuels;

• the ability of oil and natural gas producers to raise equity capital and debt financing; and

• merger and divestiture activity among oil and natural gas producers.

The level of oil and natural gas exploration and production activity in the United States is volatile. Expected trends in oil and natural gas production activities may not continue and demand for our services may not reflect the level of activity then existing in the industry. Any prolonged substantial reduction in oil and natural gas prices would likely affect oil and natural gas production levels and, therefore, affect demand for the services we provide. A material decline in oil and natural gas prices or drilling activity levels could have a material adverse effect on our business, financial condition, results of operations and cash flow. In addition, a decrease in the development rate of oil and natural gas reserves in our market areas may also have an adverse impact on our business, even in an environment of stronger oil and natural gas prices.

12

A decline in or substantial volatility of oil and natural gas prices could adversely affect the demand for our services.

The demand for our services is primarily influenced by current and anticipated oil and natural gas prices and the related level of drilling activity and general production spending in the areas in which we have operations. Volatility or weakness in oil and natural gas prices (or the perception that oil and natural gas prices will decrease) affects the spending patterns of our customers and may result in the drilling of fewer new wells. This, in turn, could result in lower demand for our services. As a result, we may experience lower utilization of, and may be forced to lower our rates for, our services and equipment. A decline in oil and natural gas prices or a reduction in drilling and production activities could have a material adverse affect on the demand for our services and our results of operations.

Prices for oil and natural gas historically have been extremely volatile and are expected to continue to be volatile. For example, over the last three years, the WTI Cushing crude oil spot price has ranged from a low of $25.24 per bbl on April 29, 2003 to a high of $77.03 per bbl on July 14, 2006. As of May 31, 2007, the WTI Cushing crude oil spot price was $64.01 per bbl. The Henry Hub natural gas spot price has ranged from $3.99 per mcf on October 31, 2003 to $15.39 per mcf on December 13, 2005. As of May 31, 2007, the Henry Hub natural gas spot price was $7.82 per mcf. Producers generally react to declining oil and natural gas prices by reducing expenditures. This has in the past had, and may in the future have, an adverse effect on our business. Mild weather in January 2007 caused some declines in the price of oil and natural gas and we experienced some signs of softer demand for our services early in the first quarter of 2007, which appeared to stabilize in the latter part of the quarter. We are unable to predict future oil and natural gas prices or the level of oil and natural gas industry activity. A prolonged low level of activity in the oil and natural gas industry will adversely affect both the demand for our products and services and our financial condition and results of operations.

When land-based rig counts are low, our rig relocation customers may not have a need for our services.

Many of the major United States drilling services contractors have significant capabilities to move their own land-based drilling rigs and related oilfield equipment and to mobilize rigs. When regional rig counts are high, drilling contractors often exceed their own capabilities and contract for additional oilfield equipment hauling and onshore rig mobilization capacity. Our rig relocation business activity is correlated to the onshore rig count; however, the correlation varies over the rig count range. The Baker Hughes onshore rotary rig rate for the weeks ended December 29, 2006 and June 1, 2007 were 1,626 and 1,693, respectively. As rig count declines, some drilling contractors reach a point where all of their oilfield equipment hauling and rig mobilization needs can be met by their own fleets. If one or more of our rig relocation customers decide not to outsource their rig and equipment hauling needs, our revenue attributable to rig relocation may decline much faster than the corresponding rig count. This relationship between our rig relocation business activity and the rig count in the areas where we have rig relocation operations can significantly increase the volatility of our earnings with respect to rig relocation.

We may not be able to manage future growth successfully, to grow successfully through future acquisitions, or to integrate the businesses we do acquire effectively.

Our business strategy has included, and will continue to include, growth through the acquisition of other businesses. In 2006, we acquired 11 businesses for a total purchase consideration of approximately $207 million. During the five months ended May 31, 2007, we acquired five businesses for a total purchase consideration of $76.9 million. In addition, we have two pending acquisitions with a total purchase consideration of approximately $225.8 million. We may not be able to continue to identify attractive acquisition opportunities or successfully acquire identified targets on terms favorable to us. Competition for acquisition opportunities is substantial and may escalate, increasing our cost of making future acquisitions or causing us to refrain from making acquisitions. We may be required to incur substantial indebtedness to finance future acquisitions. Such additional debt service requirements may impose a significant burden on our results of operations and financial

13

condition. Our credit agreement and indenture require that we meet certain financial covenants in order to borrow money to fund future acquisitions. In addition, we may not be successful in integrating our current or future acquisitions into our existing operations, which may result in unforeseen operational difficulties, diminished financial performance or our inability to report financial results and may require a disproportionate amount of our management’s attention. For example, if we are unable to effectively apply systems and controls to acquired businesses, including internal controls, the availability or timeliness of financial reports could be materially reduced.

We are vulnerable to the potential difficulties associated with rapid growth and expansion.

We have grown rapidly over the last several years through organic growth and acquisitions of other companies. Since our inception through May 31, 2007, we have acquired 26 businesses, 16 of which have been acquired since January 1, 2006. We believe that our future success depends on our ability to manage the rapid growth that we have experienced and the demands from increased responsibility on our management personnel. The following factors could present difficulties to us:

• lack of sufficient executive-level personnel;

• increased administrative burden;

• increased organizational challenges common to large, expansive operations; and

• long lead times associated with acquiring equipment.

Our operating results could be adversely affected if we do not successfully manage these potential difficulties.

Our operating history may not be sufficient for investors to evaluate our business and prospects.

The historical financial information incorporated herein is not necessarily indicative of the results that would have been achieved had we operated on a fully integrated basis or the results of that may be realized in the future. We have a short operating history. In addition, we have grown significantly over the last few years through acquisitions. This may make it more difficult for investors to evaluate our business and prospects and to forecast our future operating results. Our future results will depend on our ability to efficiently manage our integrated operations and execute our business strategy.

We may require additional capital in the future, which may not be available to us.

Our acquisition strategy requires significant capital. In addition, our business is capital intensive, requiring specialized equipment and trained personnel to provide our services. We may need to raise additional funds through public or private debt or equity financings. Adequate funds may not be available when needed or may not be available on favorable terms. If funding is insufficient at any time in the future, we may be unable to service our equipment, fund acquisitions, take advantage of business opportunities or respond to competitive pressures, any of which could harm our business. Our future capital requirements primarily depend on the frequency, timing, size and success of our acquisitions.

We depend on significant customers.

We derive a significant amount of our revenue from exploration and production companies and drilling contractors who are active in our markets. For the year ended December 31, 2006 and the three months ended March 31, 2007, our top ten customers accounted for approximately 35.2% and 32.3%, respectively, of our total revenue. During 2006, Devon Energy Corporation accounted for approximately 10.5% of our total revenue. For the three months ended March 31, 2007, no customer accounted for more than 10% of our total revenue. Our inability to continue to perform services for a number of our large existing customers could have a material adverse effect on our business and operations.

14

Our success depends on key members of our management, the loss of any of whom could disrupt our business operations.

We depend to a large extent on the services of some of our executive officers and directors. We may not be able to retain our executive officers and may not be able to enforce the non-compete provisions in their employment agreements. The loss of the services of our executive officers, directors, or other key personnel could disrupt and adversely affect our operations. Please see “Management—Employment Agreements.”

Competition within the oilfield service industry may adversely affect our ability to market our services.

The oilfield service industry is competitive and fragmented and includes numerous small companies capable of competing in our markets on a local basis as well as several large companies that possess substantially greater financial and other resources than us. Our larger competitors’ greater resources could allow them to compete more effectively than us. We believe that the principal competitive factors in the market areas that we serve are quality of product and service, price, availability and technical proficiency. Our operations may be adversely affected if our current competitors or new market entrants introduce new products or services with better features, performance, prices or other characteristics, or that better address environmental concerns, than our products and services. Competitive pressures, excess capacity in our industry or other factors also may 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 also affected by each provider’s reputation for safety and quality. If our safety record or the quality of our service declines, we may not be able to maintain our competitive position.

Our industry has experienced a high rate of employee turnover. Any difficulty we experience replacing or adding personnel could adversely affect our business.

We may not be able to find enough skilled labor to meet our needs, which could limit our growth. The oilfield service business has been cyclical in the past and is heavily influenced by oil and natural gas prices. Our services require skilled workers who can perform physically demanding work. As a result of our industry volatility and the demanding nature of the work, workers may choose to pursue employment in fields that offer a more desirable work environment at wage rates that are competitive with ours. We believe that our success is dependent upon our ability to continue to employ, train and retain skilled personnel. The demand for skilled workers is high, and the supply is limited, particularly in the Rocky Mountain region, which is one of our key regions. 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 sufficiently to compensate for wage rate increases, our operating results may be adversely affected. Our inability to employ, train or retain skilled personnel generally could have a material adverse effect on our results of operations.

Our operations are subject to hazards inherent in the oil and natural gas industry.

Through our wellsite construction services, we operate cranes, forklifts, bulldozers and other heavy equipment. In addition, in connection with providing rig logistics services, we transport land-based drilling rigs and related equipment through the use of our heavy hauler trucks and trailers, cranes and other trucking and relocation assets. The operation of heavy equipment at the wellsite and the transportation of rigs and related assets may result in accidents, which can cause personal injury, loss of life, suspension of operations, damage to facilities and damage to or destruction of property. These and other operational risks inherent in our industry could expose us to substantial liability for personal injury, wrongful death, property damage, loss of oil and natural gas production, pollution and other environmental damages. The frequency and severity of such incidents will affect our operating costs, insurability and relationships with customers, employees and regulators. In particular, our customers may elect not to purchase our services if they view our safety record as unacceptable, which could cause us to lose customers and substantial revenue.

We do not have insurance against all foreseeable risks, either because insurance is not available or because of the high premium costs. The occurrence of an event not fully insured against, or the failure of an insurer to

15

meet its insurance obligations, could result in substantial losses. In addition, we may not be able to maintain adequate insurance in the future at rates we consider reasonable, and there can be no assurance that insurance will be available to cover any or all of these risks, or, even if available, that it will be adequate or that insurance premiums or other costs will not rise significantly in the future, so as to make such insurance costs prohibitive. In addition, our insurance is subject to coverage limits and some policies exclude coverage for damages resulting from environmental contamination. See “Business—Operating Risks and Insurance.”

We are subject to federal, state and local regulation regarding issues of health, safety and protection of the environment. Under these regulations, we may become liable for penalties, damages or costs of remediation. Any changes in laws and government regulations could increase our costs of doing business.

Our operations are subject to federal, state and local laws and regulations relating to protection of natural resources and the environment, health and safety, waste management, and transportation of waste and other materials. Liability under these laws and regulations could result in cancellation of landbased wellsite or offshore operations, fines and penalties, expenditures for remediation and liability for property damages and personal injuries. Sanctions for noncompliance with applicable environmental laws and regulations also may include assessment of administrative, civil and criminal penalties, revocation of permits and issuance of corrective action orders. As part of our business, we handle, transport and dispose of a variety of fluids and substances used or produced by our customers in connection with their oil and gas exploration and production activities. We also generate and dispose of hazardous waste. The generation, handling, transportation, and disposal of these fluids, substances, and waste are regulated by a number of laws, including the Resource Recovery and Conservation Act; the Comprehensive Environmental Response, Compensation, and Liability Act; the Clean Water Act; the Safe Drinking Water Act; and analogous state laws. In addition, some of our offshore workforce accommodation units must be certified by the U.S. Coast Guard before we can supply the units to our customers for use offshore. If we are unsuccessful or are delayed in certifying certain of our accommodation units with the U.S. Coast Guard, our business, operating results and financial condition could be harmed.

Laws protecting the environment generally have become more stringent over time and are expected to continue to do so, which could lead to material increases in costs for future environmental compliance and remediation. The modification or interpretation of existing laws or regulations, or the adoption of new laws or regulations, could curtail exploratory or developmental drilling for oil and natural gas and could limit wellsite services opportunities. Some environmental laws and regulations may impose strict liability, which means that in some situations we could be exposed to liability as a result of our conduct that was lawful at the time it occurred as a result of conduct or conditions caused by, prior operators or other third parties. Clean-up costs and other damages arising as a result of environmental laws, and costs associated with changes in environmental laws and regulations could be substantial and could have a material adverse effect on our financial condition. We maintain insurance against some risks associated with underground contamination that may occur as a result of wellsite service activities. However, this insurance is limited to activities at the wellsite, and this insurance may not continue to be available or may not be available at premium levels that justify its purchase. The occurrence of a significant event not fully insured or indemnified against could have a materially adverse effect on our financial condition and operations. Please read “Business—Environmental Matters” for more information on the environmental laws and government regulations that are applicable to us.

We have operations located on lands that are regulated by the Bureau of Land Management of the United States Department of Interior and these operations may be subject to long periods of interruption or suspension.

The Bureau of Land Management (the “BLM”) enforces regulations that protect certain animals, such as deer, sage grouse and raptors that inhabit lands in the northern United States, where we have operations. We provide services in these locations and our revenue attributable to these services accounted for 22.3% and 18.3% of our total revenue for the year ended December 31, 2006 and the three months ended March 31, 2007, respectively. We are affected by this enforcement through the following ways. The BLM may deny or delay the

16

granting of permits to us or our customers necessary to conduct operations in these lands. In addition, the BLM may restrict access to or seek our relocation from these lands for a period of time. As a result of this enforcement, our operations on these lands have been and may be interrupted or suspended for long periods of time. For example, from mid-November until mid-May, the period during which mule deer roam these lands, certain of our operations cease and go on stand-by. In addition, during April and May of each year, sage grouse nesting occurs and as a result, we are required to relocate our operations for a period of time. If these regulations become more stringent and, as a result, our operations are interrupted or suspended for longer periods of time, we could lose revenue. The loss of revenue that could occur could have a material impact on our financial condition and results of our operation.

Delays in obtaining permits by our customers for their operations could impair our business.

Our customers’ business operations require permits from various governmental agencies, including the BLM. The ease of obtaining the necessary permits depends on the type of operation and the state in which the operation will take place. As with all governmental permit processes, permits may not be issued in a timely fashion, or at all, or in a form consistent with our plan of operations. As a result, our operations may be interrupted or suspended for long periods of time, which could cause us to lose revenue and have a material adverse effect on our results of operation.

Our holding company structure makes us dependent on our subsidiaries to meet our financial obligations.

As a holding company, we have no significant assets other than the equity of our subsidiaries. In order to meet financial obligations, we rely exclusively on the cash flow from our subsidiaries. Our operating subsidiaries may be unable to generate sufficient cash flow for us to meet our financial obligations. Substantially all of our operating subsidiaries have guaranteed our 9.75% Senior Notes due February 1, 2015 (the “Senior Notes”) and the debt under our credit facility.

If we fail to develop or maintain an effective system of internal controls, we may not be able to accurately report our financial results or prevent fraud. As a result, our business and the trading price of our common stock could be affected as potential shareholders lose confidence in our financial reporting.

Effective internal controls are necessary for us to provide reliable financial reports and effectively prevent fraud and to operate successfully as a public company. If we cannot provide reliable financial reports or prevent fraud, our reputation and operating results could be harmed. We cannot be certain that our efforts to develop and maintain our internal controls will be successful or that we will be able to maintain adequate controls over our financial processes and reporting in the future, including compliance with the obligations under Section 404 of the Sarbanes-Oxley Act of 2002. Any failure to develop or maintain effective controls, or difficulties encountered in their implementation or other effective improvement of our internal controls could harm our operating results or cause us to fail to meet our reporting obligations. Ineffective internal controls could also cause investors to lose confidence in our reported financial information, which would likely have a negative effect on the trading price of our common stock.

Our indebtedness could restrict our operations and make us more vulnerable to adverse economic conditions.

We now have, and after this offering will continue to have, a significant amount of indebtedness. As of May 31, 2007, our total debt was $373.6 million, including $300.0 million in aggregate principal amount under our Senior Notes and $70.0 million under our revolving credit facility. Following this offering and giving effect to the use of proceeds therefrom, on an as adjusted basis our total debt would have been $             million. Holding all other variables constant, if interest rates on our floating rate debt increased or decreased by 1%, interest expense for the year ended December 31, 2006 and the three months ended March 31, 2007 would have increased or decreased by approximately $0.3 million and $             million, respectively. We will also have the

17

ability to incur substantially more debt. We have a total borrowing capacity of $125.0 million under our credit facility of which $54.1 million was available as of May 31, 2007.

Our current and future indebtedness could have important consequences to you. For example, it could:

• impair our ability to make investments and obtain additional financing for working capital, capital expenditures, acquisitions or other general corporate purposes;

• limit our ability to use operating cash flow in other areas of our business because we must dedicate a substantial portion of these funds to make principal and interest payments on our indebtedness;

• limit our ability to borrow funds that may be necessary to operate or expand our business;

• prevent us from paying dividends to our stockholders, entering into transactions with affiliates or entering into sale and leaseback transactions that may be beneficial to us;

• limit our ability to purchase or acquire property or assets, merge or consolidate with other entities or sell all or substantially all of our assets;

• put us at a competitive disadvantage to competitors that have less debt;

• increase our vulnerability to interest rate increases; and

• hinder our ability to adjust to rapidly changing economic and industry conditions.

Our existing term credit facility requires us to maintain certain financial ratios and to satisfy certain financial conditions. In addition, our credit facility and indenture contain numerous covenants that limit our discretion with respect to business matters, including mergers or acquisitions, paying dividends, repurchasing our common stock, incurring additional debt or disposing of assets. A breach of any of these covenants could result in a default under the agreement. If an event of default were to occur, we and our subsidiary guarantors may not be able to pay our debts or borrow sufficient funds to refinance them. Even if new financing were available, it may not be on terms acceptable to us. As a result of this risk, we could be forced to take actions that we otherwise would not take, or not take actions that we otherwise might take, in order to comply with the covenants in the credit agreement or the indenture. For example, these restrictions could also limit our ability to obtain future financings, make needed capital expenditures, withstand a downturn in our business or the economy in general, or otherwise conduct necessary corporate activities.

Please read “Management’s Discussion and Analysis of Financial Condition and Results of Operations—Liquidity and Capital Resources—Credit Facility” for a discussion of our credit facility.

A terrorist attack or armed conflict could harm our business.

Terrorist activities, anti-terrorist efforts and other armed conflicts involving the United States or other countries may adversely affect the United States and global economies and could prevent us from meeting our financial and other obligations. If any of these events occur, the resulting political instability and societal disruption could reduce overall demand for oil and natural gas, potentially putting downward pressure on demand for our services and causing a reduction in our revenue. Oil and natural gas related facilities could be direct targets of terrorist attacks, and our operations could be adversely impacted if infrastructure integral to our customers’ operations is destroyed or damaged. Costs for insurance and other security may increase as a result of these threats, and some insurance coverage may become more difficult to obtain, if available at all.

Our operations in the Gulf of Mexico and coastal regions of Louisiana and Texas are adversely impacted by the hurricane season, which generally occurs in the second and third calendar quarters of the year.

Hurricanes and the threat of hurricanes during this period will often result in the shut-down of oil and natural gas operations in the Gulf of Mexico, coastal regions and land operations within the hurricane path. Our

18

operations are negatively affected by hurricanes in three ways. First, we may incur significant expenses when we transport our accommodation units and surface and other equipment away from and back to the affected wellsite. Second, during a shut-down period, we are unable to access wellsites and our services are suspended resulting in loss of revenue for this period of time. Third, if we are unsuccessful in transporting our accommodation units and surface equipment away from the storm threatened area, the units and equipment may suffer significant damage resulting in additional expenses incurred to repair or replace the damaged units or equipment. For example, a number of our accommodation units and mats were damaged, displaced or lost during Hurricane Katrina. A period of approximately 60 days passed before we were able to purchase and deploy new accommodation units and mats in this area, resulting in lost revenue during such time. In addition, a significant amount of our offshore workforce accommodation business is conducted in areas susceptible to hurricanes. The occurrence of a hurricane can therefore create unpredictability in activity and utilization rates and lead to the destruction of our property, which can have a material adverse impact on our business, financial condition, results of operations and cash flow.

We have operations in the Gulf of Mexico where we do not maintain business interruption insurance.

Our offshore workforce accommodation business operates in the Gulf of Mexico and, to a lesser extent, other international offshore regions. We are not insured against interruptions of our offshore operations or business activities. If our operations in these areas are disrupted by severe weather conditions such as hurricanes, or otherwise, we will be unable to recoup the lost revenue resulting from these disruptions. If these operations are disrupted frequently and/or for a significant period of time, we could lose substantial revenue.

Our customers may not maintain insurance against damage to or the loss of the offshore products that they lease from us.

In our offshore workforce accommodation business, our customers are contractually obligated to maintain insurance against property damage to or loss of our workforce accommodation units. However, if our customers do not comply with their insurance obligations and our products sustain damage or are lost, then we may be unable to recover the value of the damaged or lost products. For example, certain of our offshore workforce accommodation units were damaged in the hurricanes that occurred in 2004. Some of our customers failed to maintain insurance against the damage to these units. These damaged products were lost or unusable for a substantial period of time. As a result, we incurred additional costs to repair or replace these units and were not able to earn revenue from these units during this time.

Increasing trucking regulations may increase our costs and negatively impact our results of operations.

Through our rig relocation and heavy equipment hauling business, we operate trucks and loaders. As such, we operate as a motor carrier in providing certain of our services and therefore are subject to regulation by the United States Department of Transportation and by various state agencies. These regulatory authorities exercise broad powers governing activities such as the authorization to engage in motor carrier operations and regulatory safety. There are additional regulations specifically relating to the trucking industry, including testing and specifications of equipment and product handling requirements. The trucking industry is subject to possible regulatory and legislative changes that may affect the economics of the industry by requiring changes in operating practices or by changing the demand for common or contract carrier services or the cost of providing truckload services. Some of these possible changes include increasingly stringent environmental regulations, changes in the hours of service regulations which govern the amount of time a driver may drive and/or work in any specific period, onboard black box recorder device requirements or limits on vehicle weight and size.

Interstate motor carrier operations are subject to safety requirements prescribed by the United States Department of Transportation. To a large degree, intrastate motor carrier operations are subject to state safety regulations that mirror federal regulations. Such matters as the weight and dimensions of equipment are also subject to federal and state regulations.

19

From time to time, various legislative proposals are introduced, including proposals to increase federal, state, or local taxes, including taxes on motor fuels, which may increase our costs or adversely impact the recruitment of drivers. We cannot predict whether, or in what form, any increase in such taxes applicable to us will be enacted.

The contract period during which we provide services to our customers is relatively short, which exposes us to volatility in prices and equipment utilization levels. This volatility may have a material adverse effect on our business.

A significant portion of our revenue is derived by charging our customers for the actual period of time during which we provide services to them. The period of time for which our customers contract with us is usually relatively short, ranging from a few days to several months. The short term of these arrangements exposes us to the risks of a rapid reduction in market prices and equipment utilization and volatility in our revenue. These reductions and volatility may have a material adverse effect on our business. We do not maintain significant backlog and are generally dependent on replacement contracts to sustain and build revenue as jobs are completed.

An increase in the importation of liquefied natural gas, or LNG, as a substitute for oil and natural gas drilling activities may reduce the level of these drilling activities in North America, which may have a material adverse effect on our business.

The importation of LNG is becoming increasingly important as a supply source in order to meet domestic natural gas demand. If the importation of LNG continues to increase and replaces oil and natural gas production as a source for natural gas, then the level of North American drilling activity related to oil and natural gas may decrease. Our services support drilling for oil and natural gas. Consequently, a substantial reduction in oil or natural gas production levels could have a material adverse effect on our business, even in an environment of stronger oil and natural gas prices.

Risks Related to this Offering

Certain stockholders’ shares are restricted from immediate resale but may be sold into the market in the near future. This could cause the market price of our common stock to drop significantly.

After this offering, we will have outstanding              shares of common stock. Of these shares, the              shares we and the selling stockholders are selling in this offering, or             shares if the underwriters exercise in full their option to purchase additional shares, will be freely tradable without restriction under the Securities Act except for any shares purchased by any of our “affiliates” as defined in Rule 144 under the Securities Act. A total of              shares, or              shares if the underwriters exercise in full their option to purchase additional shares, will be “restricted securities” (within the meaning of Rule 144 under the Securities Act) or subject to lock-up arrangements. In connection with this offering, we, our officers and directors and substantially all of our existing stockholders (including the selling stockholders) have entered into lock-up agreements under which we and they have agreed not to offer or sell any shares of common stock or securities convertible into or exchangeable or exercisable for shares of common stock for an initial period of 180 days from the date of this prospectus without the prior written consent of Lehman Brothers Inc., Credit Suisse Securities (USA) LLC and UBS Securities LLC. Lehman Brothers Inc., Credit Suisse Securities (USA) LLC and UBS Securities LLC may, at any time and without notice, waive any of the terms of these lock-up agreements. See “Underwriting” for a description of these lock-up agreements.

Following the lock-up period, the holders of              shares of our common stock will have rights, subject to some limited conditions, to demand that we include their shares in registration statements that we file on their behalf, on our behalf or on behalf of other stockholders. The filing of a registration statement in respect of these shares, the exercise of these holders’ registration rights and the sale by these holders of a large number of shares could cause the price of our common stock to decline. Furthermore, if we file a registration statement to offer

20

additional shares of our common stock and have to include shares held by those holders, it could impair our ability to raise needed capital by depressing the price at which we could sell our common stock.

As soon as practicable after this offering, we intend to file one or more registration statements with the SEC on Form S-8 providing for the registration of              shares of our common stock issued or reserved for issuance under our stock plans. Subject to the exercise of unexercised options or the expiration or waiver of vesting conditions for restricted stock and the expiration of lock-ups we and certain of our stockholders have entered into, shares registered under these registration statements on Form S-8 will be available for resale immediately in the public market without restriction.

Purchasers of common stock will experience immediate and substantial dilution.

Based on an assumed initial public offering price of $             per share, purchasers of our common stock in this offering will experience an immediate and substantial dilution of $             per share in the net tangible book value per share of common stock from the initial public offering price, and our pro forma net tangible book value as of December 31, 2006 after giving effect to this offering would be $             per share. You will incur further dilution if outstanding options to purchase common stock are exercised. In addition, our certificate of incorporation allows us to issue significant numbers of additional shares. Please read “Dilution” for a complete description of the calculation of net tangible book value.

Our certificate of incorporation, bylaws and Delaware law contain provisions that could discourage acquisition bids or merger proposals, which may adversely affect the market price of our common stock.

Our certificate of incorporation authorizes our board of directors to issue preferred stock without stockholder approval. If our board of directors elects to issue preferred stock, it could be more difficult for a third party to acquire us. In addition, some provisions of our certificate of incorporation, bylaws and Delaware law could make it more difficult for a third party to acquire control of us, even if the change of control would be beneficial to our stockholders, including:

• limitations on the removal of directors;

• the prohibition of stockholder action by written consent; and

• limitations on the ability of our stockholders to call special meetings and establish advance notice provisions for stockholder proposals and nominations for elections to the board of directors to be acted upon at meetings of stockholders.

Delaware law prohibits us from engaging in any business combination with any “interested stockholder,” meaning generally that a stockholder who beneficially owns more than 15% of our common stock cannot acquire us for a period of three years from the date this person became an interested stockholder, unless various conditions are met, such as approval of the transaction by our board of directors. These provisions could limit the price that investors might be willing to pay in the future for shares of our common stock.

Because we have no plans to pay dividends on our common stock, investors must look solely to stock appreciation for a return on their investment in us.

We do not anticipate paying any cash dividends on our common stock in the foreseeable future. We currently intend to retain all future earnings to fund the development and growth of our business. Any payment of future dividends will be at the discretion of our board of directors and will depend on, among other things, our earnings, financial condition, capital requirements, level of indebtedness, statutory and contractual restrictions applying to the payment of dividends and other considerations that the board of directors deems relevant. The terms of our existing credit facility restrict the payment of dividends without the prior written consent of the lenders. Investors must rely on sales of their common stock after price appreciation, which may never occur, as

21

the only way to realize a return on their investment. Investors seeking cash dividends should not purchase our common stock.

There has been no active trading market for our common stock, and an active trading market may not develop.

Prior to this offering, there has been no public market for our common stock. We have applied for listing of our common stock on The NASDAQ Stock Market LLC. We do not know if an active trading market will develop for our common stock or how the common stock will trade in the future, which may make it more difficult for you to sell your shares. Negotiations between the underwriters, the selling stockholders and us will determine the initial public offering price. You may not be able to resell your shares at or above the initial public offering price.

If our stock price declines after the initial offering, you could lose a significant part of your investment.

In recent years, the stock market has experienced extreme price and volume fluctuations. This volatility has had a significant effect on the market price of securities issued by many companies for reasons unrelated to the operating performance of these companies. The market price of our common stock could similarly be subject to wide fluctuations in response to a number of factors, most of which we cannot control, including:

• changes in securities analysts’ recommendations and their estimates of our financial performance;

• the public’s reaction to our press releases, announcements and our filings with the Securities and Exchange Commission and those of our competitors;

• fluctuations in broader stock market prices and volumes, particularly among securities of oil and natural gas service companies;

• changes in market valuations of similar companies;

• investor perception of our industry or our prospects;

• additions or departures of key personnel;

• commencement of or involvement in litigation;

• changes in environmental and other governmental regulations;

• announcements by us or our competitors of strategic alliances, significant contracts, new technologies, acquisitions, commercial relationships, joint ventures or capital commitments;

• variations in our quarterly results of operations or cash flow or those of other oil and natural gas service companies;

• revenue and operating results failing to meet the expectations of securities analysts or investors in a particular quarter;

• changes in our pricing policies or pricing policies of our competitors;

• future issuances and sales of our common stock;

• demand for and trading volume of our common stock;

• domestic and worldwide supplies and prices of and demand for oil and natural gas; and

• changes in general conditions in the United States economy, financial markets or the oil and natural gas industry.

The realization of any of these risks and other factors beyond our control could cause the market price of our common stock to decline significantly.

22

Risk Factors Relating to Our Relationship with Carlyle/Riverstone

Carlyle/Riverstone controls the outcome of stockholder voting and may exercise this voting power in a manner adverse to our other stockholders. Through its representation on the Board of Directors, Carlyle/Riverstone may be able to effect corporate policy that may not be in your best interests.

Prior to this offering, Carlyle/Riverstone holds approximately         % of our outstanding common stock. Following this offering, Carlyle/Riverstone will hold approximately         % of our outstanding common stock (or         % if the underwriters exercise in full their option to purchase additional shares). Accordingly, Carlyle/ Riverstone is in a position to effectively control the outcome of matters requiring a stockholder vote, including the election of directors, adoption of amendments to our certificate of incorporation or bylaws or approval of transactions involving a change of control. The interests of Carlyle/Riverstone may differ from yours, and Carlyle/Riverstone may vote its common stock in a manner that may adversely affect you.

In addition, we are party to a nominating agreement with Carlyle/Riverstone. Pursuant to this agreement, so long as Carlyle/Riverstone beneficially owns at least 30%, 20% or 10% of our issued and outstanding shares of our common stock, we have agreed to take all corporate action within our power to cause the board of directors at all times to include at least three, two or one member(s), respectively, designated by Carlyle/Riverstone. As discussed below, Carlyle/Riverstone may have interests that differ from your interests. With two or three directors, Carlyle/Riverstone may be able to effect corporate policy that may not be in your best interests.

Two of our directors may have conflicts of interest because they are affiliated with Carlyle/Riverstone.

Two of our directors, John Lancaster and Pierre Lapeyre, are also current directors or officers of Carlyle/Riverstone and its owners. Carlyle/Riverstone also has the right to nominate a third representative to our board of directors. This may create conflicts of interest because these directors have responsibilities to Carlyle/Riverstone and its owners. Their duties as directors or officers of Carlyle/Riverstone and its owners may conflict with their duties as directors of our company. These conflicts may result in these directors not participating in certain decisions regarding business dealings between Carlyle/Riverstone and us and other matters.

Carlyle/Riverstone and its director nominees on our board of directors generally have no obligation to offer us business opportunities.

Affiliates of Carlyle/Riverstone have investments in other oilfield service and energy companies that may compete with us, and Carlyle/Riverstone and its affiliates, other than our company, may invest in other such companies in the future. If an opportunity in the oilfield service industry is presented to a person who is a member of Carlyle/Riverstone or its affiliates, including any of those individuals who also serve as a Carlyle/Riverstone director nominee on our board of directors, no member of Carlyle/Riverstone or any of those individuals has any obligation to communicate or offer the opportunity to us.

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

Carlyle/Riverstone’s exercise of certain registration rights relating to shares of our common stock and sales of a substantial number of shares of our common stock in the public markets following this offering, or the perception that such sales might occur, could have a material adverse effect on the price of our common stock or could impair our ability to obtain capital through an offering of equity securities.

23

FORWARD-LOOKING STATEMENTS

This prospectus contains forward-looking statements. We have based these forward-looking statements largely on our current expectations and projections about future events and financial trends affecting the financial condition of our business. These forward-looking statements are subject to a number of risks, uncertainties and assumptions, including, among other things, the risk factors discussed in this prospectus and other factors, most of which are beyond our control.

The words “believe,” “may,” “will,” “estimate,” “continue,” “anticipate,” “intend,” “plan,” “expect” and similar expressions are intended to identify forward-looking statements. All statements other than statements of current or historical fact contained in this prospectus are forward-looking statements.

Although we believe that the forward-looking statements contained in this prospectus are based upon reasonable assumptions, the forward-looking events and circumstances discussed in this prospectus may not occur and actual results could differ materially from those anticipated or implied in the forward-looking statements.

Important factors that may affect our expectations, estimates or projections include:

• a decline in or substantial volatility of oil and natural gas prices, and any related changes in expenditures by our customers;

• a decline in oil and natural gas drilling activity in the markets in which we operate;

• our ability to complete pending acquisitions;

• the effects of acquisitions on our business;

• changes in customer requirements in markets or industries we serve;

• competition within our industry;

• general economic and market conditions;

• our access to current or future financing arrangements;

• our ability to replace or add workers at economical rates;

• the effects of severe weather on our operations;

• our ability to replace or acquire equipment;

• political instability in oil and natural gas producing countries; and

• environmental and other governmental regulations.

Our forward-looking statements speak only as of the date of this prospectus. Unless otherwise required by law, we undertake no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events or otherwise. Please see “Risk Factors.”

24

USE OF PROCEEDS

We expect to receive net proceeds from this offering of approximately $             million, assuming an initial public offering price of $             per share and after deducting underwriting discounts and commissions and estimated offering expenses. We will not receive any of the net proceeds from any sale of shares of common stock by any selling stockholders. The selling stockholders include members of our senior management. See “Principal and Selling Stockholders.”

We plan to use our net proceeds from this offering as follows:

• $         million to fund the acquisition of Salty’s and Bayou Tank;

• $             million to repay indebtedness under our credit facility; and

• the remainder for general corporate purposes, including other potential future acquisitions and capital expenditures in connection with our anticipated growth. See “Management’s Discussion and Analysis of Financial Condition and Results of Operations—Strategic Acquisitions” for a discussion of other potential acquisitions in 2007.

If we do not close the acquisitions of Salty’s or Bayou Tank, we will use our net proceeds from this offering to repay indebtedness under our credit facility and for general corporate purposes, including future acquisitions and capital expenditures in connection with our anticipated growth.

We will use any net proceeds from the exercise of the underwriters’ option to purchase additional shares of common stock for general corporate purposes.

Our credit facility consists of a $125 million revolver. As of May 31, 2007, we had $70.0 million outstanding under our revolving credit facility and $0.9 million outstanding letters of credit, leaving $54.1 million available for additional borrowing under our credit facility. Interest under our credit facility as of May 31, 2007 was 9.25%. We used the borrowings under our credit facility primarily to fund our acquisitions of Shores Energy, Inc. and FPI and to make earnest money deposits for our pending acquisitions. An affiliate of UBS Securities LLC serves as administrative and collateral agent and affiliates of some of our underwriters are lenders under our credit facility. Accordingly, they will receive some of the proceeds of the offering. See “Underwriting—Other Relationships; NASD Conduct Rules.”

Please read “Management’s Discussion and Analysis of Financial Condition and Results of Operations—Liquidity and Capital Resources—Credit Facility” for a description of our outstanding indebtedness and our credit facility.

A $1.00 increase (decrease) in the assumed initial public offering price of $             per share would increase (decrease) the net proceeds from this offering by approximately $            , assuming no change in the number of shares offered by us as set forth on the cover page of this prospectus and after deducting the estimated underwriting discounts and commissions and estimated offering expenses payable by us.

DIVIDEND POLICY

We have not declared or paid any dividends on our common stock, and we do not currently anticipate paying any dividends on our common stock in the foreseeable future. We currently intend to retain all future earnings to fund the development and growth of our business. Any future determination relating to our dividend policy will be at the discretion of our board of directors and will depend on our results of operations, financial condition, capital requirements and other factors deemed relevant. We are also restricted in our ability to pay dividends under our credit facility and indenture.

25

CAPITALIZATION

We have provided in the table below our capitalization as of March 31, 2007: (1) on an actual basis, and (2) as adjusted for the Restructuring, the new credit facility, the acquisition of FPI, this offering, and the application of the estimated net proceeds from this offering, including the pending acquisitions of Salty’s and Bayou Tank for an estimated aggregate purchase price of $225.8 million, as if each of the following had occurred on March 31, 2007:

You should read this information in conjunction with our consolidated financial statements and the accompanying notes, “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and “Use of Proceeds” included elsewhere in this prospectus.

	March 31, 2007
	Actual		As adjusted
Cash and cash equivalents(1)	$	4,100	$
Total long-term debt, including current portion:
Borrowings under our credit facility(2)	$		$
9.75% Senior Notes		300,000
Other debt and obligations under capital leases		3,981
Total		303,981
Partners’ capital/Stockholders’ equity:
Partnership Interests		153,613		—
Common stock, $.01 par value per share;              shares authorized as further adjusted;              shares issued and outstanding as further adjusted
Retained earnings
Total Partners’ capital/Stockholders’ equity(1)		153,613
Total capitalization(1)	$	457,594	$

(1) A $1.00 increase (decrease) in the assumed initial public offering price of $             per share would increase (decrease) each of cash and cash equivalents, additional paid-in capital, total stockholders’ equity and total capitalization by $            , assuming no change in the number of shares offered by us as set forth on the cover page of this prospectus and after deducting the estimated underwriting discounts and commissions and estimated offering expenses payable by us.

(2) As of May 31, 2007, we had $70.0 million outstanding under our revolving credit facility and $0.9 million of outstanding letters of credit, resulting in approximately $54.1 million available for additional borrowing under our credit facility. As of May 31, 2007, our cash and cash equivalents totaled approximately $39.6 million.

26

DILUTION

Purchasers of the common stock in this offering will experience immediate and substantial dilution in the net tangible book value per share of the common stock for accounting purposes. Adjusted net tangible book value per share represents the amount of the total tangible assets less our total liabilities, divided by the number of shares of common stock outstanding. At December 31, 2006, assuming completion of the Restructuring, we had a net tangible book value of $             million or $             per share of common stock. After giving effect to the sale of              shares of common stock in this offering at an assumed initial public offering price of $             per share and after the deduction of underwriting discounts and commissions and estimated offering expenses, the as adjusted net tangible book value at December 31, 2006 would have been $             million or $             per share. This represents an immediate increase in such net tangible book value of $             per share to existing stockholders and an immediate and substantial dilution of $             per share to new investors purchasing common stock in this offering. The following table illustrates this per share dilution:

Assumed initial public offering price per share		$
Adjusted net tangible book value per share as of December 31, 2006(1)	$
Increase attributable to new public investors
As adjusted net tangible book value per share after this offering
Dilution in as adjusted net tangible book value per share to new investors		$

(1) Assuming completion of the Restructuring as of such date.

A $1.00 increase (decrease) in the assumed initial public offering price of $             per share would increase (decrease) our net tangible book value by $             million, the net tangible book value per share, after giving effect to this offering, by $             per share and the dilution in net tangible book value per share to new investors in this offering by $             per share, assuming no change in the number of shares offered by us as set forth on the cover page of this prospectus, and after deducting the estimated underwriting discounts and commissions and estimated offering expenses payable by us.

The following table summarizes, on the as adjusted basis set forth above as of December 31, 2006, the total number of shares of common stock owned by existing stockholders and to be owned by new investors, the total consideration paid, and the average price per share paid by our existing stockholders and to be paid by new investors in this offering at $            , the mid-point of the range of the initial public offering prices set forth on the cover page of this prospectus, calculated before deduction of estimated underwriting discounts and commissions.

	Shares Purchased(1)			Total Consideration			Average Price Per Share
	Number	%		Amount	%
Existing stockholders(2)				$			$
New public investors				$			$
Total		100.0	%	$	100.0	%

(1) The number of shares disclosed for the existing stockholders includes shares being sold by the selling stockholders in this offering. The number of shares disclosed for the new investors does not include the shares being purchased by the new investors from the selling stockholders in this offering.

(2) With respect to our executive officers, directors and greater-than-10% stockholders, and assuming the exercise of all outstanding warrants and stock options, the number of shares of common stock purchased from us, the total consideration paid to us, and the average price per share paid by all of those affiliated persons, are as follows:

	Shares Purchased(1)		Total Consideration		Average Price Per Share
	Number	%	Amount	%
Affiliated persons			$		$

27

As of                     , 2007, there were              shares of our common stock outstanding, held by              stockholders. Sales by the selling stockholders in this offering will reduce the number of shares of common stock held by existing stockholders to              or approximately         % of the total number of shares of common stock outstanding after this offering and will increase the number of shares of common stock held by new investors to or approximately         % of the total number of shares of common stock outstanding after this offering.

28

UNAUDITED PRO FORMA CONSOLIDATED FINANCIAL DATA

For the year ended December 31, 2006

The following pro forma consolidated financial data are based on our historical financial statements included elsewhere in this prospectus.

On January 1, 2006, we acquired certain of the assets of Trail Blazer Hot Shot, Inc. (“TB”) for total consideration of approximately $14.6 million, which consisted of approximately $13.7 million in cash and a $900,000 note payable to the sellers. TB provides surface equipment rental services for major Oklahoma basins and surrounding areas. The results of operations for TB, are included in the Stallion historical statement of operations for the full year ended December 31, 2006.

The unaudited pro forma consolidated statement of operations for the fiscal year ended December 31, 2006 gives effect to the acquisitions of the BLR Construction Companies, L.L.C. (“BLR”), Abbeville Offshore Quarters, Inc. (“AOQ”), FPI, Salty’s and Bayou Tank, as if each of those acquisitions had occurred on January 1, 2006.

On March 1, 2006, we acquired 100% of the membership interest of BLR for approximately $48.5 million in total consideration, consisting of $46.5 million in cash and $2.0 million in notes payable to the sellers. BLR is a full-service contractor serving the oil, gas and petro-chemical industry since 1990.

On August 1, 2006, we purchased all of the outstanding capital stock of AOQ. AOQ provides workforce accommodations, sewage treatment units, water tanks, generators and other rental support equipment for use in the offshore Gulf Coast oil and natural gas industry. The purchase price consisted of $46.1 million in cash ($1.5 million of which is held in escrow) and 6,943,000 Class C units representing limited partnership interests of Stallion Holdings for a total consideration of $70.2 million.

On May 31, 2007, we acquired all of the issued and outstanding capital stock of FPI for approximately $26.7 million cash. FPI is engaged in the rental of solids control equipment to oil and gas companies and operators at drilling locations principally in the Rocky Mountain region to assist them in separating drill cuttings from drilling fluids.

In July 2007, we expect to acquire substantially all of the operating assets of Salty’s and Bayou Tank. Both of these entities provide services that include frac tank rentals, salt water disposal wells and water logistics.

The following table summarizes the estimated fair value of the assets acquired and liabilities assumed at the dates of acquisition of TB, BLR, AOQ and FPI, all of which were completed as of May 31, 2007 (in thousands):

	TB		BLR		AOQ		FPI		Total
Assets Acquired:
Cash	$	—	$	328	$	1,128	$	5,576	$	7,032
Accounts receivable, net		—		15,833		11,069		—		26,902
Other current assets		—		891		616		—		1,507
Deferred tax assets		—		164		—		152		316
Property and equipment		5,208		14,205		21,500		5,311		46,224
Goodwill and other intangibles		9,427		23,873		43,839		16,163		93,302
Total assets acquired		14,635		55,294		78,152		27,202		175,283
Liabilities assumed:
Accounts payable		—		3,776		1,769				5,545
Accrued expenses		—		945		911		502		2,358
Deferred tax liability		—		2,120		5,274				7,394
Total liabilities assumed		—		6,841		7,954		502		15,297
Net assets acquired	$	14,635	$	48,453	$	70,198	$	26,700	$	159,986

The unaudited pro forma consolidated statement of operations data presented below do not reflect the impact of acquisitions, other than Bayou Tank, that we determined were not individually significant under SEC rules.

29

The Stallion historical statement of operations for the year ended December 31, 2006 is derived from our audited consolidated financial statements. The Stallion historical statement of operations information includes results of operations of all acquired businesses from their dates of acquisition through December 31, 2006. The historical statement of operations of acquired businesses columns represent the statement of operations of the businesses acquired from January 1, 2006 through the dates on which we began consolidating the financial results of such businesses. FPI will be included in our consolidated results of operations beginning June 1, 2007.

The unaudited pro forma consolidated statement of operations data represent management’s preliminary determination of purchase accounting adjustments and are based on available information and assumptions that management considers reasonable under the circumstances. The following table presents pro forma consolidated financial data that gives effect to our completed and pending acquisitions, which we expect to close in July 2007. There can be no assurance that we will complete the pending acquisitions. The pro forma adjustments, which are based upon information available to us on May 31, 2007 and upon assumptions that we believe were reasonable at that time, are described in the accompanying notes. The unaudited pro forma consolidated statement of operations data do not purport to represent what our results would have been had the acquisitions described above been completed on the indicated dates or that may be obtained in the future.

Net proceeds of this offering of $250 million have been assumed to be applied first to fund the acquisitions of Salty’s and Bayou Tank totaling $225.8 million, then to fund $24.2 million of the $26.7 million FPI purchase price. The remaining $2.5 million of the FPI purchase price is assumed to be funded using advances under our existing credit facility at the actual rate in existence on May 31, 2007 of LIBOR plus 2.00%, or 7.32%, and that the acquisition occurred on January 1, 2006.

The following information should be read in conjunction with “Capitalization,” “Management’s Discussion and Analysis of Financial Condition and Results of Operations,” and our financial statements included elsewhere in this prospectus.

	Unaudited Pro Forma Consolidated Financial Data for the year ended December 31, 2006 (in thousands)
	Stallion historical statement of operations			Completed acquisitions									Adjustments			Historical Stallion plus pro forma completed acquisitions(1)			Pending acquisitions						Adjustments			Historical Stallion plus pro forma completed and pending acquisitions
				BLR			AOQ			FPI									Bayou Tank			Salty's
	(in thousands)
Statement of Operations:
Revenue:
Wellsite support services	$	162,661		$	—		$	17,082		$	17,540		$	—		$	197,283		$	—		$	—		$	—		$	197,283
Production & logistics services		77,749			9,683			—			—			—			87,432			21,479			17,445						126,356
Total revenue		240,410			9,683			17,082			17,540			—			284,715			21,479			17,445			—			323,639
Expenses:
Wellsite support services		74,200			—			6,792			5,665			—			86,657			—			—						86,657
Production & logistics services		42,319			5,473			—			—			—			47,792			7,704			3,181						58,677
General and administrative		43,359			2,256			2,617			2,767			—			50,999			4,171			5,933						61,103
Depreciation and amortization		30,068			840			1,483			1,202			10,344	(2)		43,937			3,182			1,421			11,100	(6)		59,640
Loss (gain) on disposal of assets		920			1,518			(408	)		—			(1,243	)(3)		787			(44	)		—						743
Total expenses		190,866			10,087			10,484			9,634			9,101			230,172			15,013			10,535			11,100			266,820
Operating income		49,544			(404	)		6,598			7,906			(9,101	)		54,543			6,466			6,934			(11,100	)		56,819
Interest income																	—						10
Interest expense		(18,919	)		(177	)		(222	)		—			(7,728	)(4)		(27,046	)		(1,350	)		(599	)					(28,995	)
Other income (expense)		71			1			108			10			—			190			18			(43	)					164
Income before taxes		30,696			(580	)		6,484			7,916			(16,829	)		27,687			5,134			6,268			(11,100	)		27,989
Income tax (expense) benefit		(4,927	)		—			—			(2,948	)		(2,646	)(5)		(10,521	)		—			—			(110	)		(10,636	)
Net income (loss)	$	25,769		$	(580	)	$	6,484		$	4,968		$	(19,475	)	$	17,166		$	5,134		$	6,268		$	(11,210	)	$	17,353

(1) Represents historical combined statement of operations data for Stallion and BLR and AOQ from January 1, 2006 through the dates on which we began consolidating the financial results of such businesses, plus the

30

historical results of operations of FPI for the twelve months ended December 31, 2006 as if it was acquired on January 1, 2006. BLR is included in our historical results of operations for the 10 month period from March 1, 2006 to December 31, 2006; AOQ is included in our historical results of operations for the five month period from August 1, 2006 to December 31, 2006.

(2) Depreciation and amortization reflects adjusted fixed assets and depreciable intangible assets assuming that the acquisitions occurred January 1, 2006. Asset values were determined based upon third party and internal appraisals. We estimated the remaining useful lives and salvage values of all acquired assets and depreciated those assets over those estimated useful lives using depreciation policies that have been consistently applied by us. Accordingly, we determined that $14.2 million for BLR and $21.5 million for AOQ, respectively, of the purchase price would be assigned to assets having an average eight-year and twelve-year life, respectively, and $12.5 million and $19.2 million, respectively, would be assigned to intangible assets subject to amortization having an average six-year and seven-year life, respectively.

Our purchase price allocation related to the acquisition of FPI has not been completed. Accordingly, we have made a preliminary determination of the purchase accounting adjustment. For purposes of the pro forma statement of operations we determined that approximately $10.5 million of the purchase price should be assigned to assets having an estimated useful life of eight years and approximately $3.6 million of the purchase price should be assigned to depreciable intangible assets having an estimated useful life of approximately six years.

(3) Elimination of loss on transfer of real estate that was not part of the sale to us of BLR. This transaction was not in the ordinary course of business and occurred simultaneously with our purchase of BLR.

(4) Pro forma interest expense, net reflects advances under our existing senior credit agreement of $45.0 million related to AOQ and $44.5 million related to BLR at actual rates existing at the acquisition dates of 8.58% on the AOQ indebtedness and 7.95% on the BLR indebtedness plus interest on notes to the sellers of BLR of $2 million at 7.5% assuming that the advances occurred January 1, 2006.

The remaining $2.5 million of the FPI purchase price is assumed to be funded using advances under our existing credit facility at the actual rate in existence on May 31, 2007 of LIBOR plus 2.00%, or 7.32%, and that the acquisition occurred on January 1, 2006.

(5) Historically, we were not subject to taxes on a consolidated basis due to our partnership structure; however, certain of our subsidiary companies are taxable corporations and are subject to income tax. Pro forma net income for the year ended December 31, 2006 includes a provision for taxes on our consolidated income before tax that has been computed at a blended state and federal tax rate of 38%, which represents the statutory rate, to reflect the pro forma income tax effect on net income for the year ended December 31, 2006 assuming that the Restructuring occurred on January 1, 2006.

(6) We expect to complete our purchase of substantially all of the operating assets of Salty’s and Bayou Tank in July 2007. Accordingly, our purchase price allocation is preliminary. Depreciation and amortization reflects adjusted fixed assets and depreciable intangible assets assuming that each of the acquisitions occurred on January 1, 2006. We have estimated asset values based upon our acquisition due diligence. Asset values and related depreciation and amortization may change upon completion of final appraisals.

For purposes of the pro forma statement of operations we determined that approximately $10.7 million and $23.7 million of the purchase price related to Bayou Tank and Salty’s, respectively, should be assigned to assets having an estimated useful life of eight years and approximately $8.0 million and $32.8 million of the purchase price related to Bayou Tank and Salty’s, respectively, should be assigned to depreciable intangible assets having an estimated useful life of approximately six years.

31

For the three months ended March 31, 2007

The following pro forma consolidated financial data are based on our historical financial statements included elsewhere in this prospectus.

The Partnership has executed agreements to acquire Salty’s and Bayou Tank. The anticipated purchase price of Salty’s and Bayou Tank is $153.8 million and $72.0 million, respectively. Each of the anticipated purchase prices is subject to adjustment in the event of certain specified events or occurrences. Initial earnest money payments of $10.0 million and $7.2 million have been made to each of Salty’s and Bayou Tank, respectively.

The following represents the preliminary estimated purchase price allocation for the proposed acquisitions of Salty’s and Bayou Tank. The acquisition adjustments are based on currently available information and upon certain assumptions and estimates that we believe are reasonable. Each of the acquisitions will be accounted for using the purchase method of accounting, and the assets acquired and liabilities assumed will be accounted for at their fair values at the acquisition dates based upon preliminary estimates. The preliminary purchase price is an estimate subject to adjustment, and final determination of the required purchase accounting adjustments will be made upon the ultimate completion of the valuation of identified tangible and intangible assets.

Details of the preliminary purchase price allocations are as follows (in thousands):

	Bayou Tank		Salty’s		Total
Assets acquired:
Cash	$	455	$	987	$	1,442
Accounts receivable, net		6,988		8,637		15,625
Inventory		24		1,114		1,138
Other		321		12		333
Property and equipment		32,178		30,553		62,731
Goodwill and other intangibles		32,084		130,150		162,234
Total assets acquired		72,050		171,453		243,503
Liabilities assumed:
Accounts payable				3,710		3,710
Accrued expenses				423		423
Asset retirement obligations		50		1,000		1,050
Long-term debt				12,520		12,520
Total liabilities assumed		50		17,653		17,703
Net assets acquired	$	72,000	$	153,800	$	225,800

The unaudited pro forma statement of operations for the three months ended March 31, 2007 assumed that each of the pending acquisitions occurred on January 1, 2007.

The pro forma balance sheet data at March 31, 2007 have been prepared to give effect to the acquisition of FPI and the pending acquisitions as if each had occurred on March 31, 2007.

32

	Unaudited Pro Forma Consolidated Financial Data for the three months ended March 31, 2007
	Stallion historical statement of operations			Completed acquisition			Adjustments			Historical Stallion plus pro forma completed acquisitions(1)			Pending acquisitions						Adjustments			Historical Stallion plus pro forma completed and pending acquisitions
				FPI									Bayou Tank			Salty's
	(in thousands)
Statement of Operations:
Revenue:
Wellsite support services	$	46,859		$	4,898		$	—		$	51,757		$	—		$	—		$	—		$	51,757
Production & logistics services		35,212			—			—			35,212			7,006			17,199						59,417
Total revenue		82,071			4,898			—			86,969			7,006			17,199			—			111,174
Expenses:
Wellsite support services		26,236			1,559			—			27,795			—			—						27,795
Production & logistics services		23,442			—			—			23,442			3,011			11,596						38,049
General and administrative		8,247			628			—			8,875			657			1,952						11,484
Depreciation and amortization		10,771			—			480	(2)		11,251			1,110			1,232			2,775			16,368
Loss (gain) on disposal of assets		320			—			—			320			(1	)		-0-						319
Total expenses		69,016			2,187			480			71,683			4,777			14,780			2,775	(5)		94,015
Operating income		13,055			2,711			(480	)		15,286			2,229			2,419			(2,775	)(5)		17,159
Interest income											—
Interest expense		(12,048	)		—			(45	)(3)		(12,093	)		(435	)		(254	)		—			(12,782	)
Other income		77			21			—			98			—			129						227
Income before taxes		1,084			2,732			(525	)		3,291			1,794			2,294			(2,775	)(5)		4,604
Income tax (expense) benefit		(1,005	)		(644	)		398	(4)		(1,251	)		—			—			(499	)(4)		(1,750	)
Net income (loss)	$	79		$	2,088		$	(127	)	$	2,040		$	1,794		$	2,294		$	(3,274	)(4)	$	2,854

(1) Represents historical combined statement of operations data for Stallion plus the historical results of operations of FPI for the three months ended March 31, 2007, as if FPI was acquired on January 1, 2007.

(2) Depreciation and amortization reflects adjusted fixed assets and depreciable intangible assets assuming that the acquisition of FPI occurred January 1, 2007. Our purchase price allocation related to the acquisition of FPI has not been completed. Accordingly, we have made a preliminary determination of the purchase accounting adjustment. For purposes of the pro forma statement of operations we determined that approximately $10.5 million of the purchase price should be assigned to assets having an estimated useful life of eight years and approximately $3.6 million of the purchase price should be assigned to depreciable intangible assets having an estimated useful life of approximately six years.

(3) Pro forma interest expense related to our acquisition of FPI assumes advances under our existing credit facility of approximately $2.5 million at the actual rate in existence on May 31, 2007 of LIBOR plus 2.00%, or 7.32%, assuming that the acquisition occurred on January 1, 2007.

(4) Historically, we were not subject to taxes on a consolidated basis due to our partnership structure; however, certain of our subsidiary companies are taxable corporations and are subject to income tax. Pro forma net income for the three months ended March 31, 2007 includes a provision for taxes on our consolidated income before tax that has been computed at a blended state and federal tax rate of 38%, which represents the statutory rate, to reflect the pro forma income tax effect on net income for the three months ended March 31, 2007, assuming that the Restructuring occurred on January 1, 2007.

(5) We expect to complete our purchase of substantially all of the operating assets of Salty’s and Bayou Tank in July 2007. Accordingly, our purchase price allocation is preliminary. Depreciation and amortization reflects adjusted fixed assets and depreciable intangible assets assuming that each of the acquisitions occurred on January 1, 2007. We have estimated asset values based upon our acquisition due diligence. Assets values and related depreciation and amortization may change upon completion of final appraisals.

For purposes of the pro forma statement of operations we determined that approximately $10.7 million and $23.7 million of the purchase price related to Bayou Tank and Salty’s, respectively, should be assigned to assets having an estimated useful life of eight years and approximately $8.0 million and $32.7 million of the purchase price related to Bayou Tank and Salty’s, respectively, should be assigned to depreciable intangible assets having an estimated useful life of approximately six years.

33

SELECTED CONSOLIDATED FINANCIAL DATA

The following table sets forth our selected historical consolidated financial and operating data as of the dates and for the periods shown. The amounts for each historical annual period presented below were derived from our audited consolidated financial statements. The following information should be read in conjunction with “Capitalization,” “Management’s Discussion and Analysis of Financial Condition and Results of Operations,” “Unaudited Pro Forma Consolidated Financial Data” and our consolidated financial statements and related notes included elsewhere in this prospectus. Stallion Oilfield Holdings, Ltd. was formed in 2002 and commenced operations in 2003. As a result, financial results for 2002 are not presented.

	Year Ended December 31,												Three Months Ended March 31,
	2003			2004			2005			2006			2006			2007
	(in thousands)
													(unaudited)
Statement of Operations Data:
Revenue:
Wellsite support services	$	6,769		$	15,452		$	73,126		$	162,661		$	32,917		$	46,859
Production and logistics services		—			—			—			77,749			6,045			35,212
Total revenue		6,769			15,452			73,126			240,410			38,962			82,071
Expenses:
Wellsite support services		3,108			8,695			42,281			74,200			16,873			26,236
Production and logistics services		—			—			—			42,319			3,955			23,442
Selling, general and administrative		2,145			3,745			9,883			43,359			4,570			8,247
Depreciation and amortization		836			1,924			7,798			30,068			4,299			10,771
Loss on disposal of assets		86			92			499			920			342			320
Total expenses		6,175			14,456			60,461			190,866			30,039			68,016
Operating income		594			996			12,665			49,544			8,923			13,055
Interest expense, net		(489	)		(917	)		(4,565	)		(18,919	)		(4,097	)		(12,048	)
Other income (expense)		—			—			(66	)		71			(10	)		77
Income before income taxes		105			79			8,034			30,696			4,816			1,084
Income tax expense(1)		—			—			(598	)		(4,927	)		(911	)		(1,005	)
Net income	$	105		$	79		$	7,436		$	25,769		$	3,905		$	79
Other Financial Data:
EBITDA(2)	$	1,430		$	2,920		$	20,397		$	79,683		$	13,212		$	23,903
Cash flow provided by operating activities		144			1,734			7,087			41,124			10,418			25,038
Cash flow used in investing activities		(7,536	)		(7,142	)		(83,462	)		(280,164	)		(95,516	)		(58,629	)
Cash flow provided by financing activities		7,804			5,046			77,307			242,158			112,555			37,429
Capital expenditures:
Acquisitions, net of cash acquired(3)		5,505			1,158			47,191			178,045			74,097			22,570
Property and equipment		2,046			5,961			35,951			92,029			20,310			36,500
	As of December 31,															As of March 31, 2007
	2003			2004			2005			2006
	(in thousands)
																(unaudited)
Balance Sheet Data
Cash and cash equivalents	$	412		$	50		$	982		$	4,100					$	7,938
Net property and equipment		7,131			13,899			74,583			220,777						252,829
Total assets		16,252			24,713			123,136			446,907						501,728
Total debt		11,705			18,552			67,795			257,539						303,981
Total partners’ capital		3,533			3,611			43,597			153,534						153,613

(1) Historically, we were not subject to taxes on a consolidated basis due to our partnership structure; however, certain of our subsidiary companies are taxable corporations and are subject to income tax.

34

(2) EBITDA consists of net income before interest expense, taxes, depreciation and amortization. EBITDA is used as a supplemental financial measure by our management and by external users of our financial statements, such as investors and commercial banks, to assess:

• period-to-period comparisons of the financial performance of our assets without regard to financing methods, capital structures, tax status or historical cost basis;

• our operating performance and return on invested capital as compared to those of other companies in the oilfield service industry, without regard to financing methods, tax status and capital structure; and

• our compliance with certain financial covenants included in our credit facility and our ability to incur debt under our indenture, which are based in significant part on EBITDA.

EBITDA has limitations as an analytical tool and should not be considered an alternative to net income, operating income, cash flow from operating activities or any other measure of financial performance or liquidity presented in accordance with GAAP. EBITDA excludes some, but not all, items that affect net income and operating income and these measures may vary among other companies. Limitations to using EBITDA as an analytical tool include:

• EBITDA does not reflect our cash expenditures or future requirements for capital expenditures or capital commitments;

• EBITDA does not reflect changes in, or cash requirements necessary to service interest or principal payments, on our debt;

• although depreciation and amortization are non-cash charges, the assets being depreciated and amortized will often have to be replaced in the future, and EBITDA does not reflect any cash requirements for such replacements; and

• other companies in our industry may calculate EBITDA differently than we do, limiting its usefulness as a comparative measure.

The following table presents a reconciliation of the non-GAAP financial measure of EBITDA to the most directly comparable GAAP financial measure, net income, on a historical basis for each of the periods indicated.

	Year ended December 31,								Three Months Ended March 31,
	2003		2004		2005		2006		2006		2007
	(in thousands)								(unaudited)
Reconciliation of Net income to EBITDA:
Net income	$	105	$	79	$	7,436	$	25,769	$	3,905	$	79
Income taxes		—		—		598		4,927		911		1,005
Interest expense		489		917		4,565		18,919		4,097		12,048
Depreciation and amortization		836		1,924		7,798		30,068		4,299		10,771
EBITDA	$	1,430	$	2,920	$	20,397	$	79,683	$	13,212	$	23,903

(3) Acquisitions, net of cash acquired, consist only of the cash component of acquisitions. It does not include equity and/or notes issued for acquisitions.

35

MANAGEMENT’S DISCUSSION AND ANALYSIS

OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

The following discussion and analysis should be read in conjunction with our historical consolidated financial statements and the related notes included within this prospectus. This discussion contains forward-looking statements based on our current expectations, assumptions, estimates and projections about our business and the oilfield service industry. These forward-looking statements involve risks and uncertainties that may be beyond our control. Our actual results could differ materially from the results indicated in these forward-looking statements. Factors that could cause or contribute to such differences include, but are not limited to: market prices for oil and natural gas, the level of oil and natural gas drilling, economic and competitive conditions, capital expenditures, regulatory changes and other uncertainties, as well as those factors discussed elsewhere in this prospectus, particularly in “Risk Factors” and “Forward-Looking Statements.” In light of these risks, uncertainties and assumptions, the forward-looking events discussed below may not occur. Except to the extent required by law, we undertake no obligation to update publicly any forward-looking statements, even if new information becomes available or other events occur in the future.

Overview

We provide wellsite support services and production and logistics services to exploration and production companies and drilling contractors that conduct drilling and production activities throughout the United States. Our company slogan, Everything but the Rig, reflects our business strategy of providing a broad and comprehensive range of critical services to support wellsite operations, including onshore and offshore workforce accommodations, surface equipment rental, solids control, production fluid services, site construction, rig relocation and heavy equipment hauling.

We currently focus on oil and natural gas regions within North America that we believe have attractive long-term potential for growth, including South Texas, the Gulf Coast, ArkLaTex, North Texas, the Permian Basin, the Mid-Continent and Rocky Mountain regions. We also supply offshore workforce accommodations and related equipment for use in the Gulf of Mexico and, to a lesser extent, other international offshore regions. We manage our operations from 38 field service offices located throughout our operating regions.

We operate in two business segments:

• Wellsite Support Services. As of March 31, 2007, our wellsite support services segment includes: (1) workforce accommodations, with a fleet of over 2,000 transportable accommodation units designed to accommodate various personnel on wellsite locations before, during and after drilling operations, (2) surface equipment rentals used in wellsite activities, including forklifts, manlifts, power generators, compressors, loaders and water systems, (3) our StaRComm satellite system, and (4) solids control, which includes closed-loop mud systems and fluid recovery services. For the year ended December 31, 2006 and the three months ended March 31, 2007, revenue relating to our wellsite support services segment was $162.7 million and $46.9 million, respectively.

• Production and Logistics Services. Our production and logistics services segment includes: (1) production fluid services, which includes frac tank rentals, saltwater disposal wells and water logistics, (2) site construction, which includes site clearing, road construction, mat placement, production facility assembly and construction, pipeline installation, pit remediation, production decommissioning, and site restoration and (3) land rig relocation and heavy equipment hauling, through which we operate a fleet of tractor trucks, trailers, pole trucks and cranes used for the demobilization, relocation and mobilization of drilling rigs and related heavy equipment. For the year ended December 31, 2006 and the three months ended March 31, 2007, revenue relating to our production and logistics services segment was $77.7 million and $35.2 million, respectively.

Our customers include exploration and production companies and drilling contractors that conduct drilling and production activities throughout the United States and offshore in the Gulf of Mexico, and, to a lesser extent,

36

in international offshore regions. Please read “Business—Customers” for additional information about our customers. The primary factor influencing demand for our services is the level of drilling and production activity of our customers, which in turn, depends on current and anticipated future oil and natural gas prices, production depletion rates and the resultant levels of cash flow generated and allocated by our customers to their drilling and production budgets. As a result, demand for our services and products can be cyclical.

The following tables summarize average United States and International drilling and well service rig activity, as measured by Baker Hughes Incorporated, a large public oilfield services company (“BHI”), and historical commodity prices as provided by Bloomberg L.P. (“Bloomberg”):

AVERAGE RIG COUNTS

	Year Ended December 31,					Three Months Ended March 31,
	2002	2003	2004	2005	2006	2007
BHI United States Rotary Rig Count:
United States Land	717	924	1,095	1,290	1,559	1,663
United States Offshore	113	108	97	93	90	77
Total United States.	830	1,032	1,192	1,383	1,649	1,740
BHI United States Workover Rig Count:
United States	1,010	1,129	1,235	1,354	1,572	1,496
Total United States Rotary and Workover	1,840	2,161	2,427	2,737	3,221	3,236
BHI International Rotary Rig Count:
International Land	506	544	594	643	656	711
International Offshore	225	226	242	265	269	283
Total International	731	770	836	908	925	994
Source: Baker Hughes Incorporated

AVERAGE OIL AND NATURAL GAS PRICES

Period	Average Daily Closing Henry Hub Spot Natural Gas Prices ($/mcf)		Average Daily Closing WTI Cushing Spot Oil Price ($/bbl)
01/01/02 – 12/31/02	$	3.37	$	26.17
01/01/03 – 12/31/03		5.49		31.06
01/01/04 – 12/31/04		5.90		41.51
01/01/05 – 12/31/05		8.89		56.59
01/01/06 – 12/31/06		6.73		66.09
01/01/07 – 03/31/07		7.19		58.09
Source: Bloomberg

We believe that U.S. drilling rig and workover rig counts are a good indication of spending by our customers in the oil and natural gas industry for exploration and development of new and existing hydrocarbon reserves. We believe the international drilling rig activity is similarly relevant to our offshore workforce accommodation business. Spending levels for these activities are a primary driver of our business, and we believe that our customers tend to invest more in these activities when oil and natural gas prices are at or trending toward higher levels.

37

How We Generate Our Revenue

Most of our revenue is based upon a charge for the actual period of time the service or rental is provided to our customer, usually a few days, several weeks or a few months. By contracting services on a short-term basis, we are exposed to the risks of a rapid reduction in market prices and equipment utilization and volatility in our revenue.

We generate a majority of our revenue from our wellsite support services and production and logistics services by charging our customers a rig-up charge plus a daily rental rate based on the type of equipment used. The rig-up charge is a flat fee generally payable in connection with the initial set up of workforce accommodation units and connection of these units to water, utilities and sewer systems. The rig-up charges, demobilization charges and daily rates are determined by regional price quotes or, in some cases, a competitive bid process and depend upon the type of service to be performed, the equipment and personnel required for the particular job and the market conditions in the region in which the service is performed. We also charge customers for additional services requested while our equipment is on location, including water delivery, general service calls, repairs and waste disposal.

In our construction services business, we install mats at the wellsite where required by the nature of the terrain or requested to help reduce the environmental impact of wellsite activities. In these instances, we generally submit bids based on a 30, 60 or 90 day mat rental period, with an additional daily rental rate if the mats are used beyond this period.

In our rig relocation and heavy equipment hauling business, we generally bid a turn key price which may vary by region, type of rig and the distance the rig is transported.

In our production fluid services business, we transport frac tanks, fresh water, completion fluids, produced water, drilling mud and other fluids to and from our customer’s wellsites. We also dispose of these fluids as well as fluids transported by third parties. Customers are generally charged fees for these services based on the volume of fluids transported and disposed.

In addition, we generate revenue from the manufacture, sale, lease and repair of workforce accommodation units through our offshore workforce accommodation business.

Our operating costs are comprised primarily of labor, including workers’ compensation and health insurance, repair and maintenance, fuel and insurance. A majority of our employees are paid on an hourly basis. With a reduced pool of workers in the industry, it is possible that we will have to raise wage rates to attract workers from other fields and retain or expand our current work force. We also incur costs to employ personnel to sell and supervise our services and perform maintenance on our fleet. These costs are not directly tied to our level of business activity. Compensation for our administrative personnel in local operating yards and in our corporate office is accounted for as general and administrative expenses. Repair and maintenance is performed by our crews, company maintenance personnel and outside service providers. Insurance is generally a fixed cost regardless of utilization and relates to the number of trucks and other equipment in our fleet, employee payroll and safety record. Selling, general and administrative (“SG&A”) expenses were $43.4 million for the twelve months ended December 31, 2006. As a percentage of revenue, the portion of labor expenses included in our SG&A expenses was 13.5%, 6.6% and 9.1% in 2004, 2005 and 2006, respectively. Our corporate overhead makes up less than half of our SG&A expenses. A significant component of SG&A are expenses related to our field-level office personnel and other overhead, which are necessary for operations.

How We Evaluate Our Operations

Our management utilizes a variety of financial and operational measurements to analyze and monitor the performance of our services. These measurements include the following:

• operating income per operating segment (each segment is further analyzed by field office and/or region for trending and to improve overall segment profitability);

38

• material and labor expenses as a percentage of revenue;

• EBITDA;

• EBIT;

• revenue and EBITDA per employee;

• return on capital employed; and

• safety performance rates.

We manage our operations through two operating segments. Each segment is further analyzed across seven operating regions. Our operating regions include one or more field service offices, depending on the level of activity and the size of the region. The data generated in each of our operating regions using the foregoing measurement tools is an important part of our operational analysis. We apply these measurement tools to monitor operations separately for each of our operating regions and to analyze trends to determine our relative performance in each region. By comparing our operations on an operating region basis, we can identify and react to trends in the geographic areas in which we operate to improve productivity and margins. We seek to have strong centralized financial analysis and control to allocate our resources and local decision-making and flexibility in the delivery of services to maximize customer satisfaction.

Trends Impacting Our Business

In recent years, our industry has experienced higher demand for oil and natural gas and a constrained oil and natural gas supply which factors have resulted in higher commodity prices and increased drilling activity. We believe this trend of increased prices and drilling activity, as well as other industry trends reflected below, benefit us and facilitate implementation of our business strategy:

• Labor shortages and increasing safety concerns. Due to the increase in rig count and the corresponding increase in demand for labor in the oilfield and offshore, our customers continue to attempt to improve living and working conditions at the wellsite to help retain employees. We believe our workforce accommodations solutions and custom configurations for crew quarters have generally improved living and working conditions at the wellsite resulting in better employee morale and reduced turnover. Our customers also continue to enhance their safety procedures to help reduce injuries and to help ensure compliance with more stringent regulatory requirements. We supply equipment designed to improve onshore wellsite safety and productivity. For example, our extended-reach forklifts eliminate the need to manually roll drill pipe across pipe racks reducing hazards such as pinched fingers or falls. Our manlifts are used to safely place crew members under the rig floor during rig-up and rig-down of wellhead pressure control equipment. Also, our light plants provide safe lighting conditions for night time operations at the wellsite. In addition, offshore workforce accommodations are increasingly required to meet safety standards of the United States Coast Guard and/or the international safety standards of SOLAS.

• Increasingly complex technologies. The development of unconventional oil and natural gas resources is driving the need for complex, new technologies to help increase recovery rates, lower production costs and accelerate field development both onshore and offshore. The increasing complexity of technology used in the oil and natural gas development process requires additional technicians on location during drilling and, therefore, additional workforce accommodations. In particular, the increasing trend of pursuing horizontal and directional wells, as indicated in the chart below, as opposed to vertical wells requires additional expertise on location and, typically, longer drilling times. In some cases, up to six to nine workforce accommodation units are used during a drilling project, an increase over traditional utilization levels. Workforce accommodations are required for the company-man (oil and natural gas operator representative), the rig tool pusher (drilling rig supervisor), the rig crew (which typically includes 12-14 persons), a directional driller, a mud engineer, a safety engineer, solids control service personnel (between one and five persons), and other company and service personnel as necessary.

39

• Geographically dispersed drilling operations. Before the consolidation of land-based drilling contractors that began in earnest in the 1990’s, most drilling contractors were regional operators serving an area within a radius of approximately 100 to 200 miles from their home office. Most personnel working at the wellsite would drive to and from the wellsite on a daily basis. With the shift toward industry consolidation, land crews based in one region may now be sent along with a rig to work on wellsites in geographically dispersed oil and natural gas regions significant distances away. This development has resulted in the need for full-time accommodations for multiple shifts of the rig crew. Additionally, the increasing pursuit of unconventional resources has resulted in increasingly remote drilling locations that do not have adequate infrastructure. These remote locations require accommodation units and other equipment and services of the type provided by us.

• Increase in drilling and developing unconventional resources. The decline of conventional North American oil and natural gas reservoirs is leading to a shift toward the drilling and development of onshore unconventional oil and natural gas resources, including tight sands, shales and coalbed methane, that require more wells to be drilled and maintained and are also characterized by high decline rates. We believe the increased drilling requirements of these unconventional resources will lead to continued drilling activity. Consequently, there has been an increase in the construction of new drilling rigs to meet this demand.

• Increased environmental sensitivity. Continued sensitivity to the environmental impact of drilling and production activities has resulted in increasing regulation of the oil and natural gas industry. Normal onshore wellsite operations use an earthen pit to temporarily store drilling fluids and cuttings. When drilling in environmentally sensitive areas such as marshes or when drilling with oil-based or other synthetic drilling fluids, however, wellsite operations must use closed-loop solids control systems, which require zero discharge of drilling fluids and cuttings at the wellsite. In order to help reduce drill cuttings and fluids disposal costs, operators require customized solids control configurations that attempt to maximize drilling fluid efficiency. Additionally, in some areas of the Rocky Mountains, federal regulators have mandated a reduction of long-term environmental impacts at drilling locations. In some cases, this has required the use of mats in place of traditional scraping by earth moving equipment to preserve prairie sage brush recoverability after wellsite operations cease. We believe that continued sensitivity to the environmental impact of wellsite operations will enhance the demand for our solids control and construction services.

• Outsourcing ancillary services. Some of the services we provide have been historically handled by drilling contractors themselves. In many instances, these services are only ancillary to the primary activity of drilling and completing wells and represent only a minor portion of the total well drilling cost. Many drilling contractors are increasingly electing to outsource these services to suppliers who can provide high-quality and reliable services.

• Increased deepwater development activity. Advances in subsea exploration and production technology allow oil and natural gas companies to pursue reserves that have historically been considered too remote

40

or uneconomical to exploit, particularly in deepwater regions. In addition to the growth in offshore drilling activity, these advanced technologies require a greater number of technicians during drilling, production and construction activity. We believe these technological advances are leading to significant growth in offshore drilling and production engineering projects. These advances have resulted in the need for significantly greater offshore workforce accommodations.

• Increase in fluids used in non-conventional horizontal well completions. Completions of non-conventional horizontal wells in the Barnett Shale region of North Texas require fresh water. The amount of fresh water used for such completions is significantly greater than the amount of fresh water used for completions of vertical wells.

Growth Opportunities

We intend to capitalize on emerging trends in the United States oil and natural gas industry through the execution of a growth strategy focused on internal growth opportunities complemented by strategic acquisitions. We also intend to analyze expansion opportunities in international markets.

• Internal Growth Opportunities. We plan to continue to roll-out our existing services across our current operating regions in an effort to deliver a comprehensive service portfolio in each region where we operate. Additionally, we seek to continue to invest in the development of new assets and services based on customer demand to supplement the breadth and quality of our service portfolio. We also intend to continue expanding our operations into new domestic geographic regions to provide our service offerings to existing customers in markets that we have not historically served, as well as to attract new customers in these markets. We believe our established customer base and strong regional relationships will continue to provide a distribution network for deployment of our services.

• Acquisitions. We believe that our segment of the oilfield service industry has historically experienced underinvestment. Consequently, most of our competitors are smaller operators offering a limited set of wellsite support services. As a result of the fragmented nature of our markets, we believe that there are numerous consolidation opportunities within these markets. We intend to continue to leverage our proven capabilities of identifying, executing on and integrating acquisitions to further differentiate our service portfolio and grow our business.

• International Expansion. We recently established a subsidiary in The Netherlands, which will provide a base for us to capitalize on strategic growth opportunities in international offshore markets.

41

Strategic Acquisitions

From inception through May 31, 2007, we have completed 26 acquisitions, with two acquisitions pending, as part of our acquisition and expansion program as reflected in the table below:

Entity	Acquisition Date	Service Sector	Location
Aero Oilfield Services, Inc.	12/02	workforce accommodations	South Texas
Ray’s Mobile Homes, Ltd	4/03	workforce accommodations	South Texas
Gator Services, Inc.	10/03	workforce accommodations	ArkLaTex
Rebel Testers, Inc.	2/04	workforce accommodations	(assets relocated)
Trinity Valley Rental, Inc.	1/05	surface equipment rentals	East Texas
Envirotech, Inc.	1/05	workforce accommodations	Wyoming
Double-D Enterprises, Inc.	1/05	surface equipment rentals	Wyoming
Separation Services, Inc.	1/05	solids control	Gulf Coast
Bob’s Equipment Rental, Inc.	6/05	workforce accommodations	Wyoming
GL Trucking & Rental, Inc.	9/05	workforce accommodations	North Dakota
Trail Blazer Hot Shot, Inc.	1/06	surface equipment rentals	Mid-Continent
Pioneer RSC, LP	2/06	solids control	Gulf Coast
BLR Construction Companies, L.L.C.	3/06	wellsite construction	Gulf Coast
Rental One, LLC	3/06	surface equipment rentals	Gulf Coast
Oilfield Heavy Haulers, LLC	3/06	rig logistics/trucking	Gulf Coast
R&G Crane & Rigging & Trucking, LLC	3/06	rig logistics/trucking	East Texas
Bowie Dozer Service, Inc.	5/06	wellsite construction	Fort Worth Basin
Abbeville Offshore Quarters, Inc.	8/06	offshore workforce accommodations	Gulf Coast/ International
G&N Rentals	9/06	surface equipment rentals	North Dakota
Erlandson Construction Company	11/06	wellsite construction	Fort Worth Basin
Norton Transport, Inc.	12/06	rig logistics/trucking	East Texas/Fort Worth Basin
Suttee Enterprises	2/07	surface equipment rentals	Oklahoma
La Mission Rentals	2/07	workforce accommodations	West Texas
The Waterline Company, LLC	3/07	wellsite construction	Fort Worth Basin
Shores Energy, Inc.	4/07	rig logistics/trucking	Oklahoma
Fluid Processors, Inc.	5/07	solids control	Wyoming
Bayou Tank Services, Ltd.(1)	7/07E	production fluid services	East Texas
Salty’s Entities(1)	7/07E	production fluid services	Forth Worth Basin/ArkLaTex

(1) Pending.

We expect that completion of our acquisitions of Salty’s and Bayou Tank will greatly expand our service offerings and our geographic reach. In addition, we have entered into nonbinding letters of intent to purchase the assets or equity of four companies that would supplement our operations in Louisiana, the Rockies and the Barnett Shale, expand our production fluid services business and add personnel to our wellsite construction services business. The aggregate purchase price for these acquisitions is estimated to be $68.5 million, subject to customary purchase price adjustments. We are in the process of completing our diligence and negotiating definitive acquisition agreements with these companies and expect to close these acquisitions in the second quarter of 2007; however, there can be no assurance that these acquisitions will be consummated.

We intend to continue to develop or acquire new high-quality, strategic assets and services which add to the scope and quality of our service portfolio. Since our inception through May 31, 2007, we have invested an aggregate of approximately $348.3 million in acquisitions.

42

We evaluate our acquisitions based on a number of factors including: market region, service line, asset quality, customers, management, service and safety quality and financial performance. We base our valuations on several factors including: revenue multiples, EBITDA multiples, asset value, earnings accretion and strategic value.

The following is a description of some of the strategic acquisitions that expanded our service offerings and geographic reach:

Expansion of Service Offerings

Workforce Accommodations and Surface Equipment Rental. In April 2003, we acquired the assets of Ray’s Mobile Homes, Ltd. (“Ray’s Mobile Homes”). Ray’s Mobile Homes was engaged in the business of providing workforce accommodations, sewer and water systems, trash containers and other related equipment to wellsites in South Texas. With this acquisition, we entered the workforce accommodations and surface equipment rental business.

Solids Control. In January 2005, we acquired Separation Services, Inc. (“SSI”), a Texas company engaged in customized solids control services to oil and natural gas companies and drilling contractors at wellsite locations. With this acquisition, we entered into the solids control business.

Site Construction. In March 2006, we acquired BLR. BLR provides customers with experienced personnel and high-quality equipment, specializing in location construction, pipeline construction, marine services, production facility construction, crew services, heavy equipment and trucking services, remediation services, production decommissioning and vegetation control. BLR also provides inland marine site construction services. With this acquisition, we moved into the wellsite construction business.

Logistics. In March 2006, we acquired the assets of Oilfield Heavy Haulers (“OHH”). OHH provides heavy-duty drilling rig trucking and hauling services to the oilfield. OHH’s assets included a fleet of cranes, rig-hauling trucks, trailers and loaders specifically designed for the oil and natural gas industry. With this acquisition, we entered the rig relocation and heavy equipment hauling business.

Production Fluid Services. In May 2007, we entered into agreements to purchase the assets of Salty’s and Bayou Tank, which we expect to close in July 2007. Salty’s provides frac tank rentals and sales and salt water hauling and disposal services. Salty’s assets include vacuum trucks, frac tanks and salt water disposal wells. Bayou Tank leases frac tanks to and performs other oilfield-related services for oilfield, refining and industrial customers. Bayou Tank’s assets include frac tanks and other equipment. With these acquisitions, we will enter the production fluid services business.

Expansion of Geographic Reach

Rocky Mountains Expansion. In January 2005, we acquired the assets of Envirotech, Inc. (“Envirotech”), a company engaged in the rental of workforce accommodations, water systems, sewer systems and other related equipment. This acquisition provided a platform for expansion into the Rocky Mountain region, which is a region currently experiencing high levels of drilling activity.

Williston Basin Expansion. In September 2005, we acquired the assets of GL Trucking & Rental, Inc. (“GL Trucking”). GL Trucking provides integrated drilling support services for the Williston Basin, which is located in parts of North and South Dakota, Montana and Canada and surrounding areas. Its assets included over 100 workforce accommodation units, significant heavy equipment hauling capacity, loaders and equipment setting cranes. This acquisition extended our geographic footprint in the Rocky Mountains and brought our services to the Williston Basin.

43

North Texas Expansion. In May 2006, we acquired the assets of Bowie Dozer Service, Inc. (“Bowie”). Bowie is an oilfield construction company that provides location construction and heavy equipment services for rig sites in the Fort Worth Basin. The purchased assets included dozers, loaders, graders, backhoes, trackhoes and rollers. This acquisition provided a platform for us to expand into North Texas, an active natural gas producing area.

Gulf of Mexico. In August 2006, we acquired all of the outstanding capital stock of AOQ. AOQ provides offshore workforce accommodations, sewage treatment units, water systems, and other rental support equipment for use in the Gulf of Mexico oil and natural gas industry and, to a lesser extent, other international offshore regions.

Items Impacting Comparability of Our Financial Results

Our historical results of operations for the periods presented may not be comparable to our results of operations in the future for the reasons discussed below.

Changes in Our Legal Structure

We were formed as a Delaware corporation in June 2006. Our operations have historically been conducted by Stallion Oilfield Holdings, Ltd., a Texas limited partnership, and its operating subsidiaries. Pursuant to an agreement and plan of merger, Stallion Oilfield Holdings, Ltd. will be merged with and into Stallion Oilfield Services, Inc. immediately prior to the closing of this offering with Stallion Oilfield Services, Inc. as the surviving parent company. Since the entities are under common ownership and control, the Restructuring will be accounted for at historical cost. Following this offering, we will report our results of operations and financial condition as a corporation on a consolidated basis. For more information about the restructuring, please see “Certain Relationships and Related Party Transactions—The Restructuring.”

Historically, we were not subject to federal or state income taxes on a consolidated basis due to our partnership structure; however, certain of our subsidiary companies are taxable corporations and are subject to income tax. Our combined financial statements included in this prospectus include a pro forma adjustment for income taxes calculated at the statutory rate resulting in a pro forma net income adjusted for income taxes. In 2005 and 2006, Stallion Oilfield Holdings, Ltd. made a capital distribution to its partners to fund tax obligations resulting from the partners being taxed on their proportionate share of Stallion Oilfield Holdings, Ltd.’s taxable income. As a result of the Restructuring, we will record deferred tax assets and liabilities to reflect net tax effects of temporary differences between the carrying amounts of assets and liabilities for financial and tax reporting purposes. As of March 31, 2007, we estimate that our noncurrent net deferred tax liability would have been approximately $10.9 million, resulting primarily from accelerated depreciation taken by Stallion Oilfield Holdings, Ltd. and its subsidiaries. Following this offering, we will incur income taxes under our new corporate structure and our consolidated financial statements will reflect the actual impact of income taxes.

Public Company Expenses

We believe that our selling, general and administrative expenses will increase as a result of becoming a public company following this offering. We currently anticipate that our total annual selling, general and administrative expenses following the completion of this offering will increase by approximately $3.0 million to $5.0 million. This increase will be due to the cost of tax return preparations, accounting support services, filing annual and quarterly reports with the SEC, investor relations, directors’ fees, directors’ and officers’ insurance and registrar and transfer agent fees, which we expect to incur after the completion of this offering. Our consolidated financial statements following this offering will reflect the impact of these increased expenses and will affect the comparability of our financial statements with periods prior to the completion of this offering.

44

Acquisitions

Since our inception through May 31, 2007, we have completed 26 acquisitions as part of our acquisition and expansion program. Following this offering, we intend to continue pursuing strategic acquisitions. Our consolidated financial statements included elsewhere in this prospectus do not reflect the results of operations of businesses we acquired or will acquire following the date of the financial statements.

Critical Accounting Policies and Estimates

Our consolidated financial statements are impacted by the accounting policies used and the estimates and assumptions made by management during their preparation. A complete summary of these policies is included in Note 1 of the notes to our historical consolidated financial statements. The following is a discussion of our critical accounting policies and estimates.

Critical Accounting Policies

We have identified below accounting policies that are of particular importance in the presentation of our financial position, results of operations and cash flow and which require the application of significant judgment by management.

Property and Equipment. Property and equipment, including renewals and betterments, are stated at cost, while maintenance and repairs are expensed as incurred. We review our assets for impairment when events or changes in circumstances indicate that the carrying amount of a long-lived asset may not be recovered over its remaining service life. Provisions for asset impairment are charged to income when the sum of the estimated future cash flow, on an undiscounted basis, is less than the assets’ carrying amount. If impairment is indicated, an impairment charge is recorded based on an estimate of future discounted cash flow.

Self-Insured Risk Accruals. One of our subsidiary companies is partially self-insured for certain losses relating to workers’ compensation and general liability insurance claims. We maintain accruals to cover the self-insured risks, which are based on third-party data and historical claims history.

Revenue Recognition. Generally, we provide our services over a relatively short period of time pursuant to short-term arrangements at pre-determined service rates or on a project bid basis. Revenue from rental agreements is recognized over the rental period, and revenue from service agreements is recognized when services have been rendered. Certain of our operations recognize revenue related to wellsite construction using the percentage-of-completion method determined by the ratio of costs incurred to total estimated costs at completion. All known or anticipated losses on contracts are recognized in full when such losses become apparent. Our percentage-of-completion contracts typically range from two to six months in duration.

In our wellsite support services segment we charge our customers a rig-up/rig-down charge in connection with the initial set up or takedown of workforce accommodation units and for the connection or disconnection of these units to or from water, power and sewer systems. Revenue related to rig-up/rig-down charges is recognized upon completion of the service. We recognize revenue when it is earned and realized. We consider revenue earned and realized when the services are performed, collection of the relevant receivables is reasonably assured, persuasive evidence of the arrangement exists and the price is fixed and determinable.

Income Taxes. We account for income taxes based upon Statement of Financial Accounting Standards (“SFAS”) No. 109, “Accounting for Income Taxes”. Under SFAS No. 109, deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases. Deferred tax assets and liabilities are measured using statutory tax rates expected to apply to taxable income in years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rate is recognized in the period that includes the statutory enactment date. A valuation allowance for deferred tax assets is recognized when it is more likely than not that the benefit of deferred tax assets will not be realized.

45

Historically, we were not subject to federal or state income taxes on a consolidated basis due to our partnership structure; however, certain of our subsidiary companies are taxable corporations and are subject to income tax. Our income tax expense will be comprised of current and deferred tax expense. These taxes added together provide an indication of an effective rate of income tax.

Critical Accounting Estimates

The preparation of our financial statements in conformity with GAAP requires management to make certain estimates and assumptions. These estimates and assumptions affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities at the balance sheet dates and the amounts of revenue and expenses recognized during the reporting periods. We analyze our estimates based on historical experience and various other assumptions that we believe to be reasonable under the circumstances. However, actual results could differ from such estimates. The following is a discussion of our critical accounting estimates.

Impairment of Long-Lived Assets and Goodwill. Our review for potential impairment of property and equipment requires us to estimate undiscounted future cash flow. Actual impairment charges are recorded using an estimate of discounted future cash flow. The determination of future cash flow requires us to estimate rates and utilization in future periods and such estimates can change based on market conditions, technological advances in industry or changes in regulations governing the industry. In accordance with SFAS No. 144, “Accounting for the Impairment or Disposal of Long-Lived Assets,” long-lived assets, such as property and equipment, are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. Recoverability of assets to be held and used in operations is measured by a comparison of the carrying amount of an asset to estimated undiscounted cash flow expected to be generated by the asset. If the carrying amount of an asset exceeds its estimated future cash flow, an impairment charge is recognized in the amount by which the carrying amount of the asset exceeds the fair value of the asset. Assets to be disposed of would be separately presented in the balance sheet and reported at the lower of carrying amount or the fair value less anticipated cost to sell, and they would no longer be depreciated.

We have adopted SFAS No. 142, “Goodwill and Other Intangible Assets,” which requires us to annually test goodwill and intangible assets with indefinite useful lives recorded in business combinations for potential impairment. All of our intangible assets other than goodwill are subject to amortization. This requires us to estimate the fair values of our own assets and liabilities at the reporting unit level. Therefore, considerable judgment, similar to that described above in connection with our estimation of the fair value of an acquired company, is required to assess goodwill and certain other intangible assets for impairment.

Goodwill and Other Intangible Assets. The initial recording of goodwill and other intangibles requires estimation of the fair value of assets and liabilities using fair value measurements, which include quoted market price, present value techniques (estimate of future cash flows), and other valuation techniques. Additionally, SFAS No. 142 requires goodwill and other intangible assets to be reviewed for possible impairment on an annual basis, or if circumstances indicate that an impairment may exist. Determining fair value and implied fair value is subjective and often involves the use of estimates and assumptions. These estimates and assumptions could have a significant impact on the recording of intangible assets, whether or not an impairment charge is recognized and also the magnitude of the impairment charge. Our estimates of fair value are primarily determined using present value techniques of projected cash flows. This approach uses significant assumptions such as multi-year sales projections with associated expenses. We have performed impairment analyses on our goodwill, which indicated as of December 31, 2006 an impairment charge was not appropriate. No events have occurred since December 31, 2006 which would cause us to reevaluate goodwill.

Allowance for Doubtful Accounts. We extend credit to our customers based on an evaluation of their financial condition, and generally, we do not require collateral nor do we charge interest on our accounts receivable. We estimate our allowance for doubtful accounts based on an analysis of historical collection activity and specific identification of overdue accounts. Factors that may affect this estimate include (1) changes in the

46

financial position of significant customers and (2) a decline in commodity prices that could affect our entire customer base. If these factors are less favorable than those projected by management or if our historical experience is materially different from our future experience, additional allowances may be required.

Litigation and Other Risk Reserves. We estimate required reserves related to litigation and insurance deductibles based on the facts and circumstances specific to the litigation and insurance claims and our past experience with similar claims. The actual outcome of litigated and insured claims could differ significantly from estimated amounts. Any such accruals are based on certain assumptions developed using third-party and historical data to project future losses. Loss estimates in the calculation of these accruals are adjusted based upon actual settlements.

Depreciation and Amortization. In order to depreciate and amortize our property and equipment and our intangible assets with finite lives, we estimate the useful lives and salvage values of these items. Our estimates may be affected by such factors as changing market conditions, technological advances in industry or changes in regulations governing the industry.

Fair Value of Assets Acquired and Liabilities Assumed. We estimate the value of assets acquired and liabilities assumed in business combinations, which involves the use of various assumptions. These estimates may be affected by such factors as changing market conditions, technological advances in the oil and natural gas industry or changes in regulations governing that industry. The most significant assumptions, and the ones requiring the most judgment, involve the estimated fair value of property and equipment, and the resulting amount of goodwill, if any. To finalize purchase accounting, for significant acquisitions we utilize the services of independent valuation specialists to assist in the determination of the fair value of acquired assets. These estimates are revised during an allocation period as necessary when, and if, information becomes available to further define and quantify the value of the assets acquired and liabilities assumed. To the extent additional information to refine the original allocation becomes available during the allocation period, the allocation of the purchase price is adjusted. If information becomes available after the allocation period, those items are reflected in operating results.

Income Taxes. Our income tax expense includes local, state and federal income taxes. We account for tax ramifications using SFAS No. 109 “Accounting for Income Tax.” Under SFAS No. 109, we record deferred income tax assets and liabilities based upon temporary differences between the carrying amount and tax basis of our assets and liabilities and measure tax expense using enacted tax rates and laws that will be in effect when the differences are expected to reverse. The effect of a change in tax rate is recognized in income in the period of the change. Furthermore, SFAS No. 109 requires a valuation allowance for any net deferred income tax assets which we believe are likely to not be used through future operations. If our estimates and assumptions related to our deferred tax position change in the future, we may be required to record additional valuation allowances against our deferred tax assets and our effective tax rate may increase, which could result in a material adverse effect on our financial position, results of operations and cash flow.

Stock-Based Compensation. In December 2004, the FASB issued SFAS No. 123R, “Share-based Payment,” which revises SFAS No. 123 and supersedes APB Opinion No. 25. SFAS No. 123R requires us to measure the cost of employee services received in exchange for an award of equity instruments based on the grant date fair value of the award, with limited exceptions. The fair value of the award must be re-measured at each reporting date through the settlement date, with changes in fair value recognized as compensation expense of the period. SFAS No. 123R requires that we use an option-pricing model, adjusted for the unique characteristics of those instruments, to determine fair value as of the grant date of the stock options. In so doing, we use an option-pricing model (Black-Scholes), which requires various assumptions as to interest rates, volatility, dividend yields and expected lives of stock-based awards.

Cash Flow Estimates. Our estimates of future cash flow are based on the most recent available market and operating data for the applicable asset or reporting unit at the time we made the estimate. Our cash flow estimates are used for asset impairment analyses.

47

The following table describes estimates, assumptions and methods regarding critical accounting estimates used to prepare our consolidated financial statements. We consider an estimate to be critical if it is subjective and if changes in the estimate using different assumptions would result in a material impact on our financial position or results of operations:

Description	Estimates/Assumptions Used	Variability in Accounting	Historical Results
Revenue Recognition	We recognize revenue when it is realizable and earned as services are performed. We defer unearned revenue until earned.	There is a risk that we may not record revenue in the proper period.	We did not record material adjustments resulting from revenue recognition issues for the years ended December 31, 2004, 2005 and 2006 or the three months ended March 31, 2006 and 2007.
	On uncompleted contracts, we estimate the revenue to be recognized using the percentage-of-completion method based on the ratio of costs incurred to total estimated costs at completion.	There is a risk that management’s estimate of total costs at completion is incorrect, and that the result could materially impact our financial position and results of operations.	With the purchase of AOQ and BLR in 2006, revenue recognition on uncompleted contracts became a significant management estimate. If total estimated costs at completion had increased or decreased by 1% of revenue for the year ended December 31, 2006 or the three months ended March 31, 2007, revenue would be overstated or understated by approximately $3,000 and $20,300, respectively.
Impairment of Long-lived Assets	We evaluate the recoverability of assets periodically, but at least annually for goodwill and intangible assets with indefinite lives, by reviewing operational performance and expected cash flows. Our management estimates future cash flows for this purpose and for intangible assets, discounts these cash flows at an applicable rate.	There is a risk that management’s estimates of future performance may not approximate actual performance or that rates used for discounting cash flows are not consistent with the actual discount rates. Our assets could be overstated if impairment losses are not identified in a timely manner.	We tested goodwill for impairment for each of the years ended December 31, 2004, 2005 and 2006, and management determined that goodwill was not impaired. No events have occurred since December 31, 2006 that would cause us to reevaluate goodwill. A significant decline in expected future cash flow as a result of lower revenue, could result in an impairment charge. For example, an impairment of 10% of goodwill at December 31, 2006 and March 31, 2007, would

48

Description	Estimates/Assumptions Used	Variability in Accounting	Historical Results
			have resulted in a decrease in operating income of $11.0 million for the year ended December 31, 2006 and $12.8 million for the three months ended March 31, 2007, respectively.
Allowance for Doubtful Accounts	We estimate the recoverability of receivables on an individual basis based upon historical experience and management’s judgment.	There is a risk that management may not detect uncollectible accounts in the correct accounting period.	Bad debt expense has been less than 1% of revenue for each of the years ended December 31, 2004, 2005 and 2006. For the three months ended March 31, 2006 and 2007, bad debt expense was 0.5% and 1.2% of revenue, respectively. If bad debt expense had increased by 1% of revenue for the year ended December 31, 2006 and the three months ended March 31, 2007, net income would have declined by $2.4 million and $0.8 million, respectively.
Litigation and Self-Insured Risk Reserves	We estimate our reserves related to litigation and self-insured risk based on facts and circumstances specific to the litigation and self-insured risk claims and our past experiences with similar claims.	There is a risk that the actual outcome of litigation and/or self insured claims could differ significantly from our estimates.	Expense related to litigation and self-insured risk has been less than 1% of revenue for each of the years ended December 31, 2004, 2005 and 2006 and the three months ended March 31, 2006 and 2007. If this expense had increased by 1% of revenue for the year ended December 31, 2006 and the three months ended March 31, 2007, net income would have declined by $2.4 million and $0.8 million, respectively.

49

Description	Estimates/Assumptions Used	Variability in Accounting	Historical Results
Property, Plant and Equipment	Our management estimates useful lives of depreciable equipment and salvage values. The depreciation method used is generally the straight-line method, except for furniture and office equipment which is depreciated on an accelerated basis.	GAAP permits various depreciation methods to recognize the use of assets. Use of a different depreciation method or different depreciable lives could result in materially different results. The estimated useful lives are consistent with industry averages. There is a risk that the asset’s useful life used for our depreciation calculation will not approximate the actual useful life of the asset.	We evaluate property, plant and equipment for impairment when there are indicators of impairment. There have been no impairment charges related to our long-term assets during the years ended December 31, 2004, 2005 and 2006. Depreciation expense for the year ended December 31, 2006 and the three months ended March 31, 2007 represented 16.0% of the average depreciable asset base for that period. An increase in depreciation relative to the depreciable base of 1%, from 16.0% to 17.0% at March 31, 2007 and December 31, 2006, would have reduced net income by approximately $1.7 million and $2.3 million, respectively.
Valuation Allowance for Income Taxes	We apply the provisions of SFAS No. 109 to account for income taxes. Differences between depreciation methods used for financial reporting purposes compared to tax purposes as well as other items, including loss carry forwards and valuation allowances against deferred tax assets require management’s judgment related to the realizability of deferred tax accounts.	There is a risk that estimates related to the use of loss carry forwards and the realizability of deferred tax accounts may be incorrect, and that the result could materially impact our financial position and results of operations. In addition, future changes in tax laws could result in additional valuation allowances.	Historically, we have not had to record a valuation allowance to reflect that our deferred tax assets would not be utilized through future operations. Deferred income tax assets totaled $0.2 million and $     million at December 31, 2006 and March 31, 2007, respectively. We have not recorded a valuation allowance since we believe that the deferred tax asset is realizable. If we were required to record a valuation allowance it would affect our net income on a dollar for dollar basis.

50

Description	Estimates/Assumptions Used	Variability in Accounting	Historical Results
Stock-Based Compensation	We have adopted the provisions of SFAS No. 123R which requires that we measure the cost of employee services received in exchange for an award of equity instruments based on the fair value of those instruments on their grant date. The fair value of these instruments must be re-evaluated at each reporting date through the settlement date with changes in fair value recognized as compensation expense of the period.	GAAP permits the use of various models to determine the fair value of stock options and the variables used for the model are subjective. We have estimated the value of stock grants in accordance with conventional valuation techniques including but not limited to net book value and comparable company multiples of EBITDA as applicable. The use of different assumptions or a different model may have a material impact on our results of operations and related disclosures.	Historically, we granted restricted equity in Stallion Holdings, Ltd. to employees. We have not granted stock options to employees. In the year ended December 31, 2006, compensation expense from stock grants was insignificant based on management’s valuation at the time of grant.

51

Results of Operations

Prior to 2003, we did not have significant operations. We began our strategic acquisition and expansion program early in 2003 and operated in one business segment, wellsite support services, which at that time consisted only of our workforce accommodations and surface equipment rental business. In 2005, with our acquisition of SSI, we established our solids control service line, which is part of our wellsite support services operating segment. In March 2006, we established our second operating segment, production and logistics services, when we acquired OHH and BLR. In August 2006, we substantially augmented our wellsite support services segment and entered the offshore workforce accommodation business by acquiring AOQ. When we acquire a business or make capital expenditures we immediately integrate those newly acquired assets into the operations of one of the business units in our existing operating segments for financial accounting purposes. We do not generally maintain separate accounting records of those acquisitions; rather we evaluate them based upon the overall results of the business units into which they were integrated. Please read “How We Evaluate Our Operations.”

The following table sets forth our results of operations for the periods indicated. Our results of operations between the periods presented vary significantly primarily due to the number of acquisitions made during the presented periods and the relative timing of the acquisitions during those periods. All acquisitions are included in our historical results of operations from their respective dates of acquisition. See the notes to our historical consolidated financial statements for more detail.

	Year ended December 31,												Variance 2003 to 2004					Variance 2004 to 2005					Variance 2005 to 2006					Three Months Ended March 31,						Variance 2006 to 2007
	2003			2004			2005			2006			$			%		$			%		$			%		2006			2007			$			%
	(dollars in thousands)																											(dollars in thousands)
Statement of Operations
Revenue:
Wellsite support services	$	6,769		$	15,452		$	73,126		$	162,661		$	8,683		128.3	%	$	57,674		373.2	%	$	89,535		122.4	%	$	32,917		$	46,859		$	13,942		42.4	%
Production and logistics services											77,749													77,749					6,045			35,212			29,167		482.5	%
Total revenue		6,769			15,452			73,126			240,410			8,683		128.3	%		57,674		373.2	%		167,284		228.8	%		38,962			82,071			43,109		110.6	%
Expenses:
Wellsite support services		3,108			8,695			42,281			74,200			5,587		179.8	%		33,586		386.3	%		31,919		75.5	%		16,873			26,236			9,363		55.5	%
Production and logistics services											42,319													42,319					3,955			23,442			19,487		492.7	%
Selling, general and administrative		2,145			3,745			9,883			43,359			1,600		74.6	%		6,138		163.9	%		33,476		338.7	%		4,570			8,247			3,677		80.5	%
Depreciation and amortization		836			1,924			7,798			30,068			1,088		130.1	%		5,874		305.3	%		22,270		285.6	%		4,299			10,771			6,472		150.5	%
Loss on disposal of assets		86			92			499			920			6		7.0	%		407		442.4	%		421		84.4	%		342			320			(22	)	(6.4	)%
Total expenses		6,175			14,456			60,461			190,866			8,281		134.1	%		46,005		318.2	%		130,405		215.7	%		30,039			69,016			38,977		129.8	%
Operating income		594			996			12,665			49,544			402		67.7	%		11,669		NM			36,879		291.2	%		8,923			13,055			4,132		46.3	%
Interest expense, net		(489	)		(917	)		(4,565	)		(18,919	)		(428	)	87.5	%		(3,648	)	397.8	%		(14,354	)	314.4	%		(4,097	)		(12,048	)		(7,951	)	194.1	%
Other income (expense)		—			—			(66	)		71			—		NM			(66	)	NM			137		NM			(10	)		77			87		(870.0	)%
Income before income tax		105			79			8,034			30,696			(26	)	(24.8	)%		7,955		NM			22,662		282.1	%		4,816			1,084			(3,732	)	(77.5	)%
Income tax income (expense)		—			—			(598	)		(4,927	)		—		NM			(598	)	NM			(4,329	)	NM			(911	)		(1,005	)		(94	)	10.3	%
Net income	$	105		$	79		$	7,436		$	25,769		$	(26	)	(24.8	)%	$	7,357		NM		$	18,333		246.5	%	$	3,905		$	79		$	(3,826	)	(98.0	)%

52

Three Months Ended March 31, 2007 Compared to Three Months Ended March 31, 2006

Revenue.

Our revenue for the three months ended March 31, 2007 increased $43.1 million, or 110.6%, compared to the same period of 2006. The increase by operating segment was as follows:

Wellsite Support Services—Segment revenue increased $13.9 million, or 42.4%, to $46.9 million for the three months ended March 31, 2007 compared to the same period of 2006. The increase in segment revenue resulted principally from acquisitions made subsequent to March 1, 2006 combined with organic growth as we execute our capital expenditures program. In addition, the increase in revenue also resulted from modest improvement in our pricing from the first quarter of 2006.

Production and Logistics Services—Segment revenue increased $29.2 million, or 482.5%, for the three months ended March 31, 2007 compared to the same period of 2006 as a result of supplementing segment operations in 2006 when we acquired BLR and OHH. Subsequent to our acquisition of BLR and OHH, we acquired five additional businesses that are accounted for in this segment.

Throughout most of the first quarter of 2007, we experienced decreased utilization of our services in some of our operating areas resulting from reduced rig counts principally in Wyoming, some delays in our customers obtaining permits in the Rockies, unusually harsh winter weather in the Rockies, Mid-Continent, Texas and Louisiana, and what we believe was a rig transitioning marketplace where operators were turning in old inefficient rigs and waiting on new-build deployment while also pressuring drilling day rates.

Our offshore operations also experienced lower utilization of its accommodation units due to the de-mobilization in December 2006 of a flotel project in the Gulf of Mexico, some seasonal slowdowns in maintenance projects and the completion of certain offshore hurricane related projects. Additionally, our solids control business experienced lower utilization due to some customers performing services for themselves that we had previously provided to them or utilizing methods of solids control that do not require our services.

Late in the first quarter, we believe the downward trend in utilization began to reverse itself and began to improve; however, this turnaround in utilization was not soon enough or strong enough to have a significant impact on our margins.

Operating Expense.

Our operating expense for the three months ended March 31, 2007 increased $39.0 million, or 129.8%, compared to the same period of 2006.

Expenses directly related to the operation of each of our operating segments include labor costs associated with the execution and support of our services, materials used in the performance of those services and other costs directly related to the support and maintenance of our equipment. The decreased utilization in both of our operating segments resulted in our fixed operating expenses making up a relatively larger percentage of our cost thereby reducing our operating margins. For the three months ended March 31, 2007, these expenses increased 138.5%, or $28.9 million, compared to the same period of 2006. The increase in these costs by operating segment was as follows:

Wellsite Support Services—Direct segment operating cost increased $9.4 million, or 55.5%, for the three months ended March 31, 2007 compared to the same period in 2006 as a result of four acquisitions made subsequent to March 31, 2006. Direct operating expenses as a percentage of segment revenue increased from 51.3% for the first quarter of 2006 to 56.0% for the similar quarter of 2007. The increase in these costs as a percentage of revenue resulted principally from our fixed operating expenses making up a relatively larger percentage of our cost, thereby reducing our operating margins.

53

Production and Logistics Services—Our acquisition of OHH and BLR in March 2006 marked the establishment of our production and logistics services operating segment. Direct segment operating costs increased $19.5 million for the quarter ended March 31, 2007 from $4.0 million in the same period of 2006 due to adding segment operations in 2006. As a percentage of segment revenue, direct segment operating costs were 66.6% for the quarter ended March 31, 2007 compared to 65.4% for the quarter ended March 31, 2006, principally as a result of increased critical mass within this segment resulting from the five acquisitions completed during the period.

Selling, General and Administrative Expense.

Selling, general and administrative expense consists primarily of salaries and other related expenses for our sales, marketing, administrative, finance, information technology and human resources functions. For the three months ended March 31, 2007, selling, general and administrative expenses increased $3.7 million, or 80.5%, compared to the same period of 2006. This increase was primarily due to (i) the acquisitions that we made subsequent to March 31, 2006, which added field support personnel who are accounted for in selling, general and administrative expenses and (ii) an increase in our corporate headcount of 22 during the same period. Additional costs were incurred for outside consulting services for accounting, tax and information technology in connection with integration of acquired companies into our business network. As a percentage of revenue, selling, general and administrative expenses decreased from 11.7% for the quarter ended March 31, 2006 to 10.1% for the quarter ended March 31, 2007.

Depreciation and Amortization Expense.

Depreciation and amortization expense for the three months ended March 31, 2007 increased 150.5%, or $6.5 million, compared to the same period of 2006. The increase in depreciation and amortization expense was the result of additional equipment and intangible assets acquired through capital expenditures and acquisitions. As a percentage of revenue, depreciation and amortization expense was 13.1% for the quarter ended March 31, 2007 compared to 11.0% for the same period of 2006.

Interest Expense.

Interest expense was $12.0 million for the three months ended March 31, 2007 compared to the same period of 2006. Included in interest expense for the three months ended March 31, 2007 is $4.8 million of unamortized deferred debt issuance cost related to our Term B Loan that was retired with a portion of the proceeds from the issuance of our 9.75% Senior Notes in January 2007. In the first quarter of 2006, we also expensed $1.6 million of unamortized debt issuance cost related to our 2005 credit facility. Additionally in 2007, an increase in the average amount of debt outstanding contributed to the increase in interest expense. This increase in debt resulted from debt incurred in connection with acquisitions completed, capital expenditures made in 2006 and 2007 and our issuance of $300 million of 9.75% Senior Notes in January 2007.

The weighted average interest rate on our outstanding debt increased from 7.55% at March 31, 2006 to 9.55% at March 31, 2007. The increase in our weighted average interest rate is principally related to the issuance of our $300 million 9.75% Senior Notes. As a consequence of the increased level of debt and charges in debt structure resulting from the issuance of the notes in January 2007 and the amendment and restatement of our existing secured credit facility, we expect interest expense to increase. Our actual interest expense will depend in part on our revolving credit balances, which in turn will depend on our available cash flow from operations.

Income Tax Expense.

We are not subject to federal or state income taxes on a consolidated basis due to our partnership structure; however, certain of our subsidiary companies are taxable corporations and are subject to income tax. Our income tax expense is comprised of current and deferred tax expense. These taxes added together provide an indication

54

of an effective rate of income tax. Our tax expense was $0.9 million and $1.0 million for the quarters ended March 31, 2006 and 2007, respectively. This increase was due primarily to our acquisition of certain entities which were taxable and increased operations in certain of our taxable subsidiaries.

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

Revenue.

Our revenue for the year ended December 31, 2006 increased $167.3 million, or 228.8%, over the year ended December 31, 2005. The increase by operating segment was as follows:

Wellsite Support Services—Segment revenue increased $89.5 million, or 122.4%, to $162.7 million for the year ended December 31, 2006, compared to the same period of 2005. The increase in segment revenue resulted principally from acquisitions made subsequent to January 1, 2006 combined with organic growth as a result of our capital expenditures program. In addition, we have seen modest improvement in our pricing.

Production and Logistics Services—Our acquisition of OHH and BLR in March 2006 established our production and logistics services operating segment. Segment revenue increased $77.7 million for the year ended December 31, 2006 from none in the same period of 2005 due to adding the additional segment operations in 2006.

Operating Expense.

Our operating expense for the year ended December 31, 2006 increased $130.4 million, or 215.7%, over the year ended December 31, 2005.

Expenses directly related to the operation of each of our operating segments include labor costs associated with the execution and support of our services, materials used in the performance of those services and other costs directly related to the support and maintenance of our equipment. For the year ended December 31, 2006, these expenses increased 175.6%, or $74.2 million, compared to the same period of 2005. The increase in these costs by operating segment was as follows:

Wellsite Support Services—Direct segment operating cost increased $31.9 million, or 75.5%, for the twelve month period ended December 31, 2006 compared to the same period in 2005 as a result of acquisitions made during the period. Direct operating expenses as a percentage of segment revenue decreased from 57.8% for the year ended December 31, 2005 to 45.6% for the year ended December 31, 2006. The decrease in these costs as a percentage of revenue resulted principally from improved pricing and a more favorable mix of higher margin services.

Production and Logistics Services—Direct segment operating costs increased $42.3 million for the year ended December 31, 2006 from none in the same period of 2005 due to adding the segment operations in 2006. As a percentage of segment revenue direct segment operating costs were 54.4% for the year ended December 31, 2006.

Selling, General and Administrative Expense.

Selling, general and administrative expense consists primarily of salaries and other related expenses for our sales, marketing, administrative, finance, information technology and human resources functions. Selling, general and administrative expenses for the year ended December 31, 2006 increased $33.5 million, or 338.7%, over the year ended December 31, 2005. This increase was primarily due to (i) the acquisitions that we made during 2005 and 2006, which added 37 personnel providing support to field offices who are accounted for in selling, general and administrative expenses and (ii) the write off of approximately $0.9 million of deferred offering expenses associated with our withdrawn 2006 IPO. Additionally, we increased our corporate headcount

55

by 41 during the same period. Additional costs were incurred for outside consulting services for accounting, tax and information technology in connection with integration of acquired companies into our business network. As a percentage of revenue, selling, general and administrative expenses increased from 13.5% for the year ended December 31, 2005 to 18.0% for the year ended December 31, 2006.

Depreciation and Amortization Expense.

Depreciation and amortization expense for the year ended December 31, 2006 increased 285.6%, or $22.3 million, over the year ended December 31, 2005. The increase in depreciation and amortization expense was the result of additional equipment and intangible assets acquired through capital expenditures and acquisitions. As a percentage of revenue, depreciation and amortization expense was 12.5% for the year ended December 31, 2006 compared to 10.7% for the same period of 2005.

Interest Expense.

Interest expense was $18.9 million for the year ended December 31, 2006 compared to $4.6 million for the same period ended December 31, 2005. Interest expense for the year ended December 31, 2006 includes $1.2 million of expense related to the write off of certain debt issuance cost associated with our 2005 credit facility. We replaced that credit facility with a new credit facility during the first quarter of 2006. See “—Liquidity and Capital Resources—Credit Facility.” Additionally, the increase in interest expense was attributable to an increase in the average amount of debt outstanding as a result of acquisitions completed and capital expenditures incurred in 2005 and 2006. The weighted average interest rate on our outstanding debt increased from 6.75% at December 31, 2005 to 7.84% at December 31, 2006. The increase in our weighted average interest rate is related to borrowings under our variable interest rate facilities combined with a general increase in the prime rate of interest during that same time period. As a consequence of the increased level of debt and charges in debt structure resulting from the issuance of the notes in January 2007 and the amendment and restatement of our existing secured credit facility, we expect interest expense to increase. Our actual interest expense will depend in part on our revolving credit balances, which in turn will depend on our available cash flow from operations.

Income Tax Expense.

We are not subject to federal or state income taxes on a consolidated basis due to our partnership structure; however, certain of our subsidiary companies are taxable corporations and are subject to income tax. Our income tax expense is comprised of current and deferred tax expense. These taxes added together provide an indication of an effective rate of income tax. Our tax expense was $0.6 million and $4.9 million for the years ended December 31, 2005 and 2006, respectively. This increase was due primarily to our acquisition of certain entities which were taxable and increased operations in certain of our taxable subsidiaries. Following this offering we will be subject to income taxes.

Year Ended December 31, 2005 Compared to Year Ended December 31, 2004

In 2005 and 2004, we operated only in the wellsite support services operating segment.

Revenue.

Our revenue for the year ended December 31, 2005 increased $57.7 million, or 373.2%, over the same period ended December 31, 2004. Our increased revenue resulted from a combination of the acquisitions that we made during 2005 and from additional capital investment in rental equipment as well as improved market conditions, including favorable pricing for our services and products.

Operating Expense.

Our operating expense for the year ended December 31, 2005 increased $46.0 million or 318.2%, over the same period ended December 31, 2004 principally as a result of acquisitions made in the last quarter of 2004 and the first nine months of 2005.

56

Expenses directly related to our operations include labor costs associated with the execution and support of our services, materials used in the performance of those services and other costs directly related to the support and maintenance of our equipment. These expenses increased 386.3%, or $33.6 million, from $8.7 million for the year ended December 31, 2004 to $42.3 million for the twelve months ended December 31, 2005.

Direct operating expense as a percentage of revenue increased from 56.3% in 2004 to 57.8% in 2005. The slight increase in direct operating expense as a percentage of revenue was primarily attributable to a temporary decrease in our margins as we integrated our recent acquisitions into our business.

Selling, General and Administrative Expense.

Selling, general and administrative expense consists primarily of salaries and other related expenses for our sales, marketing, administrative, finance, information technology and human resources functions. Selling, general and administrative expenses for the year ended December 31, 2005 increased $6.1 million, or 163.9%, over the same period ended December 31, 2004. This increase was primarily due to the acquisitions that we made during 2005, which provided additional headcount and general expenses. Additional costs were incurred in 2005 for outside consulting services for accounting, tax and information technology. As a percentage of revenue, selling, general and administrative expenses decreased from 24.2% in 2004 to 13.5% in 2005, as these expenses were spread over a larger revenue base.

Depreciation and Amortization Expense.

Depreciation and amortization expense for the year ended December 31, 2005 increased 305.3% over the same period ended December 31, 2004, or $5.9 million. The increase in depreciation and amortization expense was the result of equipment and intangible assets acquired through capital expenditures and purchase acquisitions. As a percentage of revenue, depreciation and amortization expense decreased from 12.5% in 2004 to 10.7% in 2005, as these expenses were spread over a larger revenue base.

Interest Expense.

Interest expense was $4.6 million for the twelve months ended December 31, 2005 compared to $0.9 million for the same period ended December 31, 2004. The increase in interest expense was attributable to an increase in the average amount of debt outstanding as a result of acquisitions and capital expenditures completed in 2004 and 2005. The weighted average interest rate on our outstanding debt increased from 5.09% at December 31, 2004 to 6.75% at December 31, 2005. This increase related to borrowings under variable interest rate facilities and a general increase in the prime rate of interest during that same time period.

Income Tax Expense.

We are not subject to federal or state income taxes on a consolidated basis due to our partnership structure; however, certain of our subsidiary companies are taxable corporations and are subject to income tax. Our income tax expense is comprised of current and deferred tax expense. Together these taxes provide an indication of an effective rate of income tax. Our tax expense was $0.6 million for the year ended December 31, 2005. We had no tax expense for the year ended December 31, 2004. This increase was due primarily to our acquisition of certain entities which were taxable and increased operations in certain of our taxable subsidiaries.

Year Ended December 31, 2004 Compared to Year Ended December 31, 2003

In 2004 and 2003, we operated only in the wellsite support services operating segment.

Revenue.

Our revenue for the year ended December 31, 2004 increased $8.7 million, or 128.3%, over the same period ended December 31, 2003. The increased revenue resulted principally from our capital investment in new rental

57

equipment and improved market conditions. During 2004, we invested $6.0 million in new rental equipment and $1.2 million for the acquisition of Rebel Testers, Inc., which did not have a significant impact on our 2004 operating results.

Operating Expense.

Our operating expense for the year ended December 31, 2004 increased $8.3 million, or 134.1%, over the same period ended December 31, 2003. Expenses directly related to the operation of our wellsite support services operating segment includes labor costs associated with the execution and support of our services, materials used in the performance of those services and other costs directly related to the support and maintenance of our equipment. For the year ended December 31, 2004, these expenses increased 179.8%, or $5.6 million, over the same period ended December 31, 2003. Direct operating expenses as a percentage of revenue increased from 45.9% for the year ended December 31, 2003 to 56.3% for the year ended December 31, 2004.

Selling, General and Administrative Expense.

Selling, general and administrative expense consists primarily of salaries and other related expenses for our sales, marketing, administrative, finance, information technology and human resources functions. Selling, general and administrative expenses for the year ended December 31, 2004 increased $1.6 million, or 74.6%, over the same period ended December 31, 2003. As a percentage of revenue, selling, general and administrative expenses decreased from 31.7% in 2003 to 24.2% in 2004, as these expenses were spread over a much larger revenue base.

Depreciation and Amortization Expense.

Depreciation and amortization expense for the year ended December 31, 2004 increased 130.1% over the same period ended December 31, 2003, or $1.1 million. The increase in depreciation and amortization expense was principally the result of capital expenditures made to expand our inventory of rental equipment. As a percentage of revenue, depreciation and amortization expense was 12.4% for the year ended December 31, 2003 and 12.5% for the year ended December 31, 2004.

Interest Expense.

Interest expense was $0.9 million for the twelve months ended December 31, 2004 compared to $0.5 million for the same period ended December 31, 2003. The increase in interest expense was attributable to an increase in the average amount of debt outstanding principally as a result of our capital expenditures completed in 2003 and 2004. The weighted average interest rate on our outstanding debt decreased slightly from 5.2% at December 31, 2003 to 5.09% at December 31, 2004.

Income Tax Expense.

Historically, we were not subject to federal or state income taxes on a consolidated basis due to our partnership structure; however, certain of our subsidiary companies are taxable corporations and are subject to income tax. As such, our income tax expense will be comprised of current and deferred tax expense. Together these taxes provide an indication of an effective rate of income tax. We had no income tax expense for the years ended December 31, 2004 and 2003.

Liquidity and Capital Resources

Our primary liquidity needs are to fund acquisitions and capital expenditures, such as acquiring new rental equipment and funding our general working capital requirements. Our primary capital resources are net cash flow from our operations and borrowings under our $125.0 million revolving credit facility, of which approximately $54.1 million was available at May 31, 2007.

58

On January 19, 2007, Stallion Oilfield Services Ltd. issued $300.0 million of 9.75% Senior Notes due February 1, 2015 in a private placement. Proceeds from the sale of the Senior Notes were used to retire the outstanding balance on the $210.0 million Term B Loan and to pay down approximately $44.5 million under our revolving credit facility. Concurrent with the placement of the Senior Notes, we amended our existing senior secured credit facility to increase the revolving line from $70.0 million to $125.0 million and reduced the applicable interest rate to LIBOR plus 2.00%. Additionally, the revolving credit covenant package was adjusted to provide greater operating flexibility.

We anticipate that we will rely on cash generated from operations and borrowings under our amended and restated revolving credit facility to satisfy our liquidity needs. We believe that funds from these sources will be sufficient to meet our working capital requirements for at least the next 12 months. Our ability to fund future capital expenditures and to make strategic acquisitions will depend upon our future operating performance and, more broadly, on the availability of equity and debt financing, which will be affected by prevailing economic conditions in our industry, and general financial, business and other factors, some of which are beyond our control.

Operating Activities

Our cash flow provided by operating activities for the quarter ended March 31, 2007 increased $14.6 million compared to the quarter ended March 31, 2006. The increase in cash flow provided by operations was primarily related to our 2006 and 2007 capital expenditures for equipment and the acquisition of businesses.

Our cash flow provided by operating activities for the year ended December 31, 2006 increased $34.0 million compared to the year ended December 31, 2005. Our gross receipts increased during 2006 as demand for our services continued to grow, resulting in more billable days and more favorable billing rates, while we expanded our current business and entered new markets through acquisitions and capital investments. The increase in cash flow provided by operations was primarily related to our increased revenue resulting from our 2005 and 2006 capital expenditures for equipment and the acquisition of businesses.

Cash flow provided by operating activities was $7.1 million in 2005 as compared to $1.7 million in 2004. The increase in operating cash flow in 2005 over 2004 was primarily due to an increase in our gross receipts as a result of increased revenue. Our gross receipts increased during 2005 as demand for our services grew while we expanded our existing business and entered new markets through acquisitions and capital investments. The 2004 operating cash flow, as compared to 2003, also increased as a result of our improved operating results which were directly related to improved demand for our services, better billing rates and our entry into new markets.

Investing Activities

Cash flow used in investing activities was $58.6 million for the quarter ended March 31, 2007 as compared to $95.5 million for the same period of 2006. During the quarter ended March 31, 2007, we made property and equipment capital expenditures of $36.5 million compared to $20.3 million in the same period of 2006. Additionally, during the first quarter of 2007, we paid total consideration of $22.6 million for the acquisition of three businesses. During the quarter ended March 31, 2006, we made six acquisitions for purchase consideration totaling $79.2 million. Those acquisitions used cash of $22.5 million and $74.1 million for the quarters ended March 31, 2007 and 2006, respectively.

Cash flow used in investing activities was $280.2 million for the year ended December 31, 2006 as compared to $83.5 million for the same period of 2005. During 2006, we made property and equipment capital expenditures of $92.0 million compared to $36.0 million in the same period of 2005. Additionally in 2006, we paid total consideration of $206.6 million for the acquisition of eleven businesses. During 2005, we made six acquisitions totaling $51.4 million. Those acquisitions used cash of $178.0 million and $47.2 million for the year ended December 31, 2006 and 2005, respectively. In addition, we used cash of $1.4 million and $0.4 million for related acquisition costs in the years ended December 31, 2006 and 2005, respectively.

59

Cash flow used in investing activities was $83.5 million for the twelve months ended December 31, 2005 as compared to $7.1 million in 2004 and $7.5 million in 2003. The increase in cash flow used in investing activities in 2005 over 2004 was primarily due to our acquisition of six businesses during 2005 for a total consideration of $51.4 million and property and equipment capital expenditures we made to expand our fleet of rental and service equipment totaling $36.0 million. In 2005, we used cash of $47.2 million compared to $1.2 million in 2004 for the acquisition of businesses. In addition, we used cash of $0.4 million and $0.1 million for related acquisition costs in the years ended December 31, 2005 and 2004, respectively. In 2004, we spent $0.4 million less on investing activities than we did in 2003. We acquired one business in 2004 as compared to three businesses in 2003. Our cash used for acquisitions in 2003 was $5.5 million. The lower spending in 2004 on acquisitions was offset however as our capital expenditures for property and equipment increased $3.9 million in 2004 as compared to 2003.

Capital Expenditures

Capital expenditures for the purchase of property and equipment and acquisitions of businesses are the main component of our investing activities. We made total capital expenditures for property and equipment for our existing business of $36.5 million during the quarter ended March 31, 2007. In 2007, we have expanded our wellsite support services segment with capital expenditures of $25.6 million to acquire additional equipment and $10.4 million to acquire two businesses that operate in the workforce accommodations and surface equipment rental service line. Additionally, we have expanded our production and logistics segment with capital expenditures of $10.9 million to acquire additional equipment and $12.2 million to acquire one business that operates in this segment.

We made total capital expenditures for property and equipment for our existing business of $92.0 million during the year ended December 31, 2006. In 2006, we significantly expanded our wellsite support services segment with capital expenditures of $60.9 million to acquire additional equipment and $98.1 million to acquire five businesses that operate in the workforce accommodations and surface equipment rental service line. Additionally, we expanded our construction and logistics segment with capital expenditures of $29.2 million in 2006.

In addition to making investments in property and equipment capital expenditures, we will continue to evaluate acquisitions of complementary companies. We currently expect to spend approximately $95.4 million in 2007 for investment in property and equipment capital expenditures, including approximately $18.0 million for maintenance capital expenditures. In addition, we currently expect to spend approximately $373.0 million in 2007 for acquisitions.

Financing Activities

We generated cash from our financing activities in the first quarter of 2007 totaling $37.4 million. In January 2007, we issued $300.0 million of our 9.75% Senior Notes and paid $8.9 million of related issuance costs. This increase in long-term debt was partially offset by payments on long-term debt totaling approximately $209.0 million and payments of $44.5 million under the revolving credit facility.

We also generated cash from our financing activities in 2006 totaling $242.2 million. Approximately $62.8 million of this amount resulted from contributions of capital, net of distributions, made by the partners. The remaining amount was attributable to new notes payable and long-term debt of $209.5 million net of issuance costs that were offset by payments on the notes and long-term debt totaling $74.2 million.

Cash flow provided by financing activities was $77.3 million for the year ended December 31, 2005 as compared to $5.0 million in 2004 and $7.8 million in 2003. The increase in cash flow provided by financing activities in 2005 over 2004 was primarily due to capital contributions made by our partners totaling $32.4 million, increased borrowings under our credit agreement and through seller financing of a portion of

60

certain of our 2005 acquisitions. These increases were partially offset by payments on our long-term debt totaling $21.5 million. The decline in 2004 cash flow provided by financing activities, as compared to 2003, was principally related to our use of operating cash flow to fund certain of our capital expenditures of approximately $6.0 million and to payments on our long-term debt of $5.2 million.

Credit Facility

On March 28, 2006, we amended and restated our then existing credit facility (as amended and restated, the “Credit Agreement”) with UBS AG Stamford Branch, as Issuing Bank, Administrative Agent and Collateral Agent and certain other financial institutions. The Credit Agreement provided for a $165 million term loan and a $50 million revolving credit facility.

The Credit Agreement was further amended on July 31, 2006 to increase the Term Loan Facility by $45 million and the Revolving Credit Facility by $20 million.

As of December 31, 2006, $25.5 million was available to be drawn under the Revolving Credit Facility. For the years ended December 31, 2006, 2005 and 2004, our weighted average interest rate on outstanding borrowings were approximately 7.84%, 6.75%, and 5.09%, respectively.

Concurrent with the placement of the Senior Notes described below, we amended and restated the Credit Agreement, as amended, to increase the revolving line from $70 million to $125 million and reduced the applicable interest rate to LIBOR plus 2.00% (the “2007 Credit Agreement”).

The 2007 Credit Agreement contains certain covenants that limit our ability and our restricted subsidiaries’ ability to, among other things: incur additional debt, incur layered debt, consolidate or merge with or into other companies, comply with limitations on asset sales, limitations on restricted payments, limitations on dividends and other restrictions, limitations on transactions with affiliates, and additional note guarantees. Additionally the 2007 Credit Agreement requires that we maintain a secured leverage ratio that is less than 2.5 to 1.0 and a minimum interest coverage ratio of at least 2.5 to 1.0. As of March 31, 2007, we were in compliance with the covenants contained in the 2007 Credit Agreement.

To support the growth of our business, we plan to amend and restate the 2007 Credit Agreement in June 2007 to (i) increase the revolving credit line from $125 million to $175 million and (ii) add a $75 million term loan component.

9.75% Senior Notes

In a private placement on January 19, 2007, Stallion Oilfield Services Ltd. issued $300.0 million of 9.75% Senior Notes due February 1, 2015. Proceeds from the sale of the Senior Notes were used to retire the outstanding balance on the $210.0 million Term B Loan and to pay down approximately $44.5 million under the revolving credit facility.

Interest payments on the Senior Notes are due semi-annually, on February 1 and August 1, commencing on August 1, 2007. The Senior Notes are non-convertible, unsecured and guaranteed by all the subsidiaries of the Partnership. In connection with the retirement of the Term B Loan on January 19, 2007, we expensed the remaining unamortized deferred debt issuance costs which amounted to approximately $4.8 million in the first quarter of 2007.

The Senior Notes are redeemable at the option of Stallion Oilfield Services Ltd. on or after February 1, 2011 at the specified redemption price as described in the Indenture. The Senior Notes will be redeemable by Stallion Oilfield Services Ltd., in whole or in part, at any time prior to February 1, 2011 at a discount rate of the U.S. Treasury rate plus 50 basis points. Prior to February 1, 2010 Stallion Oilfield Services Ltd. may redeem up to

61

35% of the Senior Notes with the proceeds of certain equity offerings at a redemption price equal to 109.75% of the principal amount of the Senior Notes, plus accrued and unpaid interest and liquidated damages, if any, to the date of redemption. This redemption must occur less than 90 days after the date of the closing of any such qualified equity offering.

Following a change of control, as defined in the Indenture, Stallion Oilfield Services Ltd. will be required to make an offer to repurchase all or any portion of the Senior Notes at a purchase price of 101% of the principal amount, plus accrued and unpaid interest and liquidated damages, if any, to the date of repurchase.

The Senior Notes contain certain covenants that limit the ability of Stallion Oilfield Services Ltd. and its restricted subsidiaries to, among other things: incur additional debt, incur layered debt, consolidate or merge with or into other companies. The Senior Notes also have limitations on asset sales, limitations on restricted payments, limitations on dividends and other restrictions, limitations on transactions with affiliates, and limitations on additional note guarantees. The restrictive covenants are subject to a number of important exemptions and qualifications set forth in the Indenture.

As of March 31, 2007, we were in compliance with the covenants contained in the Indenture.

As part of the issuance of the Senior Notes, Stallion Oilfield Services Ltd. incurred debt issuance costs of approximately $8.9 million, which are being amortized to interest expense using the straight line method, which approximates the effective interest method over the term of the Senior Notes.

Other Debt

We have a variety of other capital leases and notes payable outstanding that are customary in our industry. None of these debt instruments are significant individually.

Outstanding Debt and Operating Lease Commitments

We have significant contractual obligations in the future that will require capital resources. Our primary contractual cash obligations are (1) our debt, (2) our capital lease obligations and (3) our operating leases.

The following table summarizes our known contractual obligations as of December 31, 2006 (in thousands):

Payments Due by Period

Contractual Obligations	Total		2007		2008-2009		2010-2011		Thereafter
Long-term debt	$	257,229	$	1,913	$	2,157	$	119	$	253,040
Capital lease obligations		310		127		183		—		—
Operating lease obligations		3,851		1,549		1,666		636		—
Total contractual obligations	$	261,390	$	3,589	$	4,006	$	755	$	253,040

Subsequent to December 31, 2006, we entered into a 99-month operating lease for approximately 60,000 square feet of office space with an annual rent expense of approximately $1.4 million beginning in August 2007.

Off-Balance Sheet Arrangements

We have entered into operating lease arrangements for certain of our specialized equipment and for our office and field operating locations in the normal course of business. The terms of our facility leases range from monthly to five years. The terms of the specialized equipment leases range from one to five years. Annual payments pursuant to these leases are included in the above table under “Operating lease obligations.”

62

Quantitative and Qualitative Disclosures about Market Risk

The demand, pricing and terms for oil and natural gas services that we provide are largely dependent upon the level of activity in the U.S. oil and natural gas industry. Industry conditions are influenced by numerous factors over which we have little or no control, including, but not limited to: the supply of and demand for oil and natural gas; the level of prices and expectations about future prices of oil and natural gas; the expected rates of declining current production; the discovery rate of new oil and natural gas reserves; available pipeline and other transportation capacity; weather conditions; domestic and worldwide economic conditions; political instability in oil-producing countries; technical advances affecting energy consumption; the price and availability of alternative fuels; the ability of oil and natural gas producers to raise equity capital and debt financing; and merger and divesture activity among oil and natural gas producers.

The level of activity in the oil and natural gas exploration and production industry is volatile. Expected trends in oil and natural gas production activities may not continue and demand for our services may not reflect the level of activity in the industry. Any prolonged substantial reduction in oil and natural gas prices that would likely affect drilling activity levels could have a material adverse effect on our business, financial condition, results of operations and cash flow.

In addition, as of December 31, 2006, we had interest rate caps on LIBOR at 6.15% with notional amounts of approximately $82.5 million. The cost of the caps of approximately $183,000 is amortized as interest expense over the life of the contract, which approximates the interest method. These interest rate caps were settled and terminated in February 2007.

We are exposed to changes in interest rates as a result of our credit facility which has a floating rate. We had a total of $70.0 million of indebtedness outstanding under our credit facility at May 31, 2007. The impact of a 1% increase in interest rates on this amount of debt would result in an annual increase in interest expense, and a corresponding decrease in net income, of approximately $0.7 million.

Recent Accounting Pronouncements

In February 2006, the FASB issued Statement of Financial Accounting Standards No. 155, “Accounting for Certain Hybrid Financial Instruments,” (“SFAS No. 155”). SFAS No. 155 provides entities with relief from having to separately determine the fair value of an embedded derivative that would otherwise be required to be bifurcated from its host contract in accordance with SFAS No. 133, Accounting for Derivative Instruments and Hedging Activities. SFAS No. 155 allows an entity to make an irrevocable election to measure such a hybrid financial instrument at fair value in its entirety, with changes in fair value recognized in earnings. SFAS No. 155 is effective for all financial instruments acquired, issued or subject to re-measurement event occurring after the beginning of an entity’s first fiscal year that begins after September 15, 2006. We believe that the adoption of SFAS No. 155 will not have a material impact on our financial position, results of operations or cash flows.

In March 2006, the FASB issued Statement of Financial Accounting Standards No. 156, “Accounting for Servicing of Financial Assets—An Amendment to FASB Statement No. 140,” (“SFAS No. 156”). SFAS No. 156 requires entities to recognize a servicing asset or liability each time they undertake an obligation to service a financial asset by entering into a servicing contract in certain situations. This statement also requires all separately recognized servicing assets and servicing liabilities to be initially measured at fair value and permits a choice of either the amortization or fair value measurement method for subsequent measurement. The effective date of this statement is for annual periods beginning after September 15, 2006, with earlier adoption permitted as of the beginning of an entity’s fiscal year provided the entity has not issued any financial statements for that year. We do not plan to adopt SFAS No. 156 early, and we are currently assessing the impact on our Consolidated Financial Statements.

In July 2006, the FASB issued an interpretation entitled “Accounting for Uncertainty in Income Taxes—an interpretation of FASB No. 109,” referred to as “FIN 48.” FIN 48 clarifies the accounting for uncertain tax provisions that may have been taken by an entity. Specifically, FIN 48 prescribes a more-likely-than-not

63

recognition threshold to measure a tax position taken or expected to be taken in a tax return through a two-step process: (1) determining whether it is more likely than not that a tax position will be sustained upon examination by taxing authorities, after all appeals, based upon the technical merits of the position; and (2) measuring to determine the amount of benefit/expense to recognize in the financial statements, assuming taxing authorities have all relevant information concerning the issue. That tax position is measured at the largest amount of benefit/expense that is greater than 50 percent likely of being realized upon ultimate settlement. This pronouncement also specifies how to present a liability for unrecognized tax benefits in a classified balance sheet, but does not change the classification requirements for deferred taxes. Under FIN 48, if a tax position previously failed the more-likely-than-not recognition threshold, it should be recognized in the first subsequent financial reporting period in which the threshold is met. Similarly, a position that no longer meets this recognition threshold should be derecognized in the first financial reporting period that the threshold is no longer met. FIN 48 becomes effective for fiscal years beginning after December 15, 2006, with earlier adoption encouraged. We are currently evaluating the impact this statement may have on our financial position, results of operations and cash flow.

In September 2006, the FASB issued SFAS No. 157, “Fair Value Measurements,” a pronouncement which provides additional guidance for using fair value to measure assets and liabilities. The pronouncement states that fair value should be based upon assumptions market participants would use to price an asset or liability, and establish a hierarchy that prioritizes the information used to determine fair value, whereby quoted marked prices in active markets would be given highest priority with lowest priority given to data provided by the reporting entity based on unobservable facts. This standard requires disclosure of fair value measurements by level within this hierarchy. SFAS No. 157 becomes effective in the first interim reporting period for the fiscal years beginning after November 15, 2006, with early adoption permitted. We are currently evaluating the impact this statement may have on our financial position, results of operations and cash flow.

In September 2006, the Securities and Exchange Commission staff issued Staff Accounting Bulletin (“SAB”) No. 108, incorporated into the SEC Rules and Regulations as Section N to Topic 1, “Financial Statements,” which provides guidance concerning the effects of prior year misstatements in quantifying current year misstatements for the purpose of materiality assessments. Specifically, entities must consider the effects of prior year unadjusted misstatements when determining whether a current year misstatement will be considered material to the financial statements at the current reporting period and record the adjustment, if deemed material. SAB No. 108 provides a dual approach in order to quantify errors under the following methods: (1) a roll-over method which quantifies the amount by which the current year income statement is misstated, and (2) the “iron curtain” method which quantifies a cumulative error by which the current year balance sheet is misstated. Entities may be required to record errors that occurred in prior years even if those errors were insignificant to the financial statements during the year in which the errors arose. SAB No. 108 became effective as of the beginning of the fiscal year ending after November 15, 2006. Upon adoption, entities may either restate the financial statements for each period presented or record the cumulative effect of the error correction as an adjustment to the opening balance of retained earnings at the beginning of the period of adoption, and provide disclosure of each individual error being corrected within the cumulative adjustment, stating when and how each error arose and the fact that the error was previously considered immaterial. This authoritative guidance had no impact on our financial position, results of operations and cash flows.

In February 2007, the FASB issued Statement of Financial Accounting Standards No. 159, “The Fair Value Option for Financial Assets and Financial Liabilities—Including an Amendment of FASB Statement No. 115,” (“SFAS No. 159”). This pronouncement permits entities to use the fair value method to measure certain financial assets and liabilities by electing an irrevocable option to use the fair value method at specified election dates. After election of the option, subsequent changes in fair value would result in the recognition of unrealized gains or losses as period costs during the period the change occurred. SFAS No. 159 becomes effective as of the beginning of the first fiscal year that begins after November 15, 2007, with early adoption permitted. However, entities may not retroactively apply the provisions of SFAS No. 159 to fiscal years preceding the date of adoption. We are currently evaluating the impact that SFAS No. 159 may have on our financial position, results of operations and cash flows.

64

BUSINESS

General

We provide wellsite support services and production and logistics services to exploration and production companies and drilling contractors throughout the United States. Our company slogan, Everything but the Rig, reflects our business strategy of providing a broad and comprehensive range of critical services to support wellsite operations, including onshore and offshore workforce accommodations, surface equipment rental, solids control, production fluid services, site construction, rig relocation and heavy equipment hauling. We seek to differentiate ourselves by offering a broad array of wellsite services with a focus on quality and reliability. Our service offerings are designed to improve living and working conditions at the wellsite, wellsite safety and our customers’ drilling and production operations.

Our services span the entire life-cycle of the land-based wellsite—wellsite preparation, rig deployment, drilling activities, production activities and decommissioning. We are typically the first service provider on the wellsite, as we assist in the initial preparation of the wellsite and often haul the rig and related heavy equipment onto the site using our fleet of tractor trucks, trailers, pole trucks and cranes. Throughout the drilling and completion phases of the land-based well, we provide rental equipment and required support services to the wellsite. We also, in some cases, provide continuing support services during the production phase of the well, including construction of production facilities and well connections to existing pipeline infrastructure. We frequently are the last service provider to leave the wellsite as we perform production facility disassembly and site restoration, which are the last phases of the wellsite decommissioning process. In addition, our offshore workforce accommodations business serves our offshore customers during many phases of the offshore drilling and production life-cycle.

We currently focus on oil and natural gas regions within North America that we believe have attractive long-term potential for growth, including South Texas, the Gulf Coast, ArkLaTex, North Texas, the Permian Basin, the Mid-Continent and Rocky Mountain regions. We also supply offshore workforce accommodations and

65

related equipment for use in the Gulf of Mexico and, to a lesser extent, other international offshore regions. We manage our operations from field service offices located throughout our operating areas.

We conduct our operations through the following two business segments:

Wellsite Support Services. Through our wellsite support services segment, we offer integral services used by oil and natural gas companies, drilling contractors and other wellsite service providers to support wellsite operations. This segment includes the following primary service lines:

• Workforce accommodations. We provide onshore workforce accommodations in the United States with, as of March 31, 2007, over 2,000 transportable units in our inventory. Our fleet of land-based units is designed to accommodate various personnel on wellsite locations before, during and after drilling operations. Certain trends in the oil and natural gas exploration and production industry, including increased drilling complexity and a tight supply of labor, have resulted in wellsite personnel spending more time at the wellsite. These trends have contributed to an increase in demand for high-quality, reliable workforce accommodations. In addition, we design, manufacture, lease and repair offshore workforce accommodation structures, which include U.S. Coast Guard certified and/or SOLAS certified units. Our onshore and offshore workforce accommodation units are specifically configured to provide transportable, comfortable living quarters and functional workspaces.

• Surface equipment rental. We provide a variety of surface rental equipment used in and critical to wellsite activities including forklifts, manlifts, power generators, compressors, loaders and water systems.

• Communications services. We provide integrated communications services through our StaRComm satellite system that provides wireless communications via intercoms and telephone, fax and internet/data services throughout the wellsite location.

• Solids control. We provide customized solids control services, closed-loop mud systems and fluid recovery services to help maximize our customers’ operating efficiency at the wellsite. We provide high-quality shakers, mud conditioners, centrifuges and peripheral backside equipment, as well as solids removal and waste handling coordination services.

Production and Logistics Services. Through our production and logistics services segment, we offer services that are critical to establish, maintain and decommission the wellsite and position key equipment prior to, during and after drilling operations. This segment includes the following primary service lines:

• Production fluid services. We provide a fleet of vacuum trucks, frac tank rentals, saltwater disposal wells and other assets used for fluid provision, transportation and disposal services. These specialized assets allow our customers to obtain, move, store and dispose of fluids that are involved in the development and production of the wellsite.

• Site construction. We provide construction equipment and services to build and reclaim infrastructure at wellsites before, during and after drilling operations. Our services include site clearing, road construction, mat placement, production facility assembly and construction, pipeline installation, pit remediation, production decommissioning and site restoration. We provide services for wellsites in both land and inland marine environments.

• Rig relocation and heavy equipment hauling. We provide a fleet of tractor trucks, trailers, pole trucks and cranes used for the demobilization, relocation and mobilization of drilling rigs and related heavy equipment. We maintain a focus on providing reliable, efficient and safe transportation and mobilization services.

Wellsite support services and production and logistics services are critical to establish and operate the land-based wellsite. We believe our scale, our access to capital and our ability to provide a single supply source for

66

many of our customers’ needs are strengths of our business. We believe we differentiate ourselves and thus are able to achieve growth by offering our customers high-quality, professional and reliable equipment and services on a large scale. In addition, we provide offshore workforce accommodations to exploration and production companies in the Gulf of Mexico and, to a lesser extent, other international offshore regions.

Corporate Structure

The chart below illustrates our corporate structure following the Restructuring.

Industry

Our business depends on the level of exploration, development and production expenditures made by our customers. These expenditures are driven by the current and expected future prices for oil and natural gas, and the perceived stability and sustainability of those prices. Our services comprise a relatively small portion of the total cost of drilling the well and, accordingly, our revenue does not tend to vary significantly with changing drilling rig rates. Our business is primarily driven by natural gas and oil drilling and production activities in North America. We believe the following three principal economic factors will positively affect our industry in the coming years:

• Higher demand for natural gas in North America. We believe that natural gas will be in high demand in North America over the next several years because of its growing popularity as a cleaner burning fuel. According to the International Energy Agency’s 2006 World Energy Outlook, natural gas demand in North America (United States, Canada and Mexico) is projected to grow by approximately 29% from 2004 to 2030.

• Constrained North American gas supply. Although the demand for natural gas is projected to increase, supply is likely to be constrained as North American natural gas basins are becoming more mature and

67

experiencing increased decline rates. Even though the number of wells drilled in North America has increased significantly in recent years, a corresponding increase in domestic production has not occurred. As a result, producers are required to increase drilling to maintain existing levels of production. This is coupled with the recent development of reserve plays characterized by multiple wells having smaller average reserves per well. To supply the growing demand for natural gas, certain of the alternatives are to increase drilling and enhance recovery rates on domestic production.

• Increased oil drilling activity and sustained higher oil prices. We believe that historical data and industry forecasts suggest an increasing demand for oil coupled with a flat or declining production curve. The average West Texas Intermediate oil price has increased 153% from an average price of $26.17 for 2002 to an average price of $66.09 for 2006. According to BHI, the average number of drilling rigs in the United States dedicated to drilling for crude oil has increased 100% from an average of 137 for 2002 to an average of 274 in 2006. We believe that this increasing demand for crude oil is reflected in the sharp increase in crude oil prices and utilization of oil drilling rigs. According to the U.S. Department of Energy, the average daily oil production in the United States has decreased 12.0%, from 5,822 MBbl per day in 2000 to 5,121 MBbl per day in 2005. We believe that sustained domestic drilling activity for crude oil will continue as exploration and production companies contend with constrained supply and increased demand.

As a result of the above factors, we expect that there will continue to be a tight supply of, and high demand for, natural gas and oil in North America in the near future. We believe these trends will continue to support high levels of drilling activity.

Our Business Strategy

Our business strategy consists of the following core elements:

Broaden the suite of services we provide. We have established strong working relationships with our customers which provide us a stable base of operations. We work closely with our customers to define new service offerings that meet specific customer needs in the onshore markets where we operate and also intend to expand our offshore service offerings. For example, our StaRComm system was first deployed in December 2005 after a series of customer driven studies and trials. We have 227 StaRComm systems deployed at March 31, 2007. Also in 2006, we completed a number of acquisitions which provided us the capability in certain operating

68

areas to provide more extensive rig relocation and heavy equipment hauling services. These acquisitions not only enhanced our revenue generating capacity but also provided us the opportunity to be the first service supplier at the wellsite and to cross-sell other services. We intend to continue to invest in developing or acquiring new high-quality assets and services which add to the equipment breadth and quality of our service portfolio.

Establish and maintain a leadership position in our principal operating areas. We intend to continue to build upon our market positions in the areas in which we operate by offering a comprehensive and integrated package of services which allows us to provide our customers with wellsite support services required across their drilling locations. We view the incremental steps in achieving this to include:

• Deploying our suite of services across existing land-based operating areas. We believe we have developed expertise in specific service lines which can be effectively marketed across the majority of our land-based operating areas. We intend to continue to roll-out our existing services across our current operating areas in an effort to deliver a comprehensive portfolio of services in each region. We believe our established customer base and strong regional relationships will continue to provide a strategic distribution network for our service deployment efforts.

• Continue to develop our offshore service offerings. We provide offshore workforce accommodations to exploration and production companies. We intend to expand our manufacturing capabilities and offshore service offerings to meet the growing needs of these customers.

Extend our operations into new geographic areas. We intend to apply our expertise in wellsite support services and land-based production and logistics services in markets where we currently do not operate and which provide an attractive platform for future growth. We believe our customers will continue to find value in our ability to provide services across multiple operating regions. We intend to continue to improve the ease with which our clients can use our services from one wellsite location to the next. We expect to support our customers’ entry into other active drilling regions by introducing our service offerings in those regions. In addition, we will also seek opportunities for expanding into new geographic areas where market conditions are favorable in order to attract new customers.

Expand our services internationally. Our offshore workforce accommodation business predominantly operates in the Gulf of Mexico. We intend to pursue strategic opportunities to expand our service offerings into other international offshore markets by leveraging our custom product design and existing customer base.

Focus on service quality, business performance and safety. Our management team is responsible for assessing our service quality, performance and safety compliance and coordinates with our field offices to help ensure that our quality and performance metrics and safety standards are met at every level of our organization. In addition to our internal safety policies, we adhere to certain external safety regulations, such as certifying certain of our offshore workforce accommodation units with the U.S. Coast Guard and/or SOLAS prior to deployment. We believe that our pursuit of a reliable, comprehensive and professional service solution differentiates us from smaller regional competitors. We intend to continue to invest in and promote designs, systems and methodologies which improve the reliability, responsiveness, accountability and safety of our operations.

Continue to pursue strategic expansion opportunities. We believe that the markets in which we operate remain fragmented and that there are numerous consolidation opportunities within these markets. We completed 17 acquisitions in 2005 and 2006 and intend to continue pursuing strategic acquisitions which add to the scope and quality of our service portfolio. In evaluating such acquisitions we consider a number of factors, including synergies with existing operations, financial performance and acquisition costs.

Capitalize on regional experience. One component of our acquisition and growth strategy is to acquire assets located in strategic operating areas that include personnel with strong local leadership and regional experience. We believe that by having the administrative functions previously performed at the regional level

69

centralized in and handled by our corporate office, we have enhanced our controls environment and enabled our local management to focus on our customers, our employees and the effective management and deployment of our assets.

Our Competitive Strengths

We believe our operations benefit from a number of competitive strengths, including the following:

• Extensive breadth of service throughout the wellsite life-cycle. We provide a broad array of wellsite services throughout each phase of the land-based drilling and production process. This breadth of service strengthens our relationships with our customers and allows us to identify and cross-sell additional services.

• Extensive geographic footprint with a strong regional and local presence. Our regional operations are located in some of the most active onshore oil and natural gas drilling regions of the United States, including South Texas, the onshore Gulf Coast, ArkLaTex, North Texas, the Permian Basin, the Mid-Continent and Rocky Mountain regions. Within these regions there were approximately 1,548 active land drilling rigs as of May 11, 2007. In addition, our products are utilized in certain offshore markets, including the Gulf of Mexico and, to a lesser extent, other international offshore regions. Within the offshore Gulf of Mexico market, there were approximately 76 active offshore drilling rigs as of May 11, 2007. Our regional managers have developed strong relationships with our customers throughout their regions and are largely responsible for the sales, marketing and delivery of our services. Our broad geographic and multi-basin footprint decreases regional and specific play risk which could impact region-focused competitors.

• Large scale of operations. We provide comprehensive land-based wellsite services in our operating areas. Our scale enables us to deliver a comprehensive range of reliable and high-quality wellsite services to our customers. Our size also provides us with increased access to capital resources and reduces our administrative burden as a percentage of sales.

• Experienced management team with proven acquisition track record and control environment. Our senior management team has extensive experience in the oil and natural gas industry, with an average of 22 years of experience. We believe that this background provides our management team with an in-depth understanding of our customers’ needs and enhances our ability to deliver customer driven solutions. Our management also has substantial experience in identifying, completing and integrating acquisitions and since our inception through May 31, 2007, we have acquired 26 businesses. We have also implemented a standardized control environment that includes accounting, safety, environmental and maintenance processes and controls. Our integrated systems allow us to monitor operating performance, maintain financial, accounting and asset management controls, integrate acquisitions, prepare timely financial reports and manage contractual risk. In addition, our control environment provides transparency for our management team to track regional and project level performance and reliability and frees our local personnel to focus on customer service and performance.

• Leveraged to drilling activity. We believe that favorable supply and demand fundamentals will maintain the current level of drilling for oil and natural gas. Efforts to maintain current levels of production will, in turn, necessitate continued drilling for the foreseeable future, which will sustain demand for our services. As our package of services typically comprises less than 15% of total drilling expenditures, our business has not historically experienced the pricing volatility experienced by drilling contractors, who represent a much larger portion of total drilling expenditures.

• Leadership position in the offshore workforce accommodation business. We provide U.S. Coast Guard and SOLAS certified offshore workforce accommodations units worldwide. We believe our history, our custom design and the quality of our products and services are strengths of our business.

70

Overview of Our Segments

We manage our business through two segments: wellsite support services and production and logistics services. Through these segments, we offer services that are essential to the successful set-up, drilling and completion of a land-based wellsite. Our ability to provide timely and reliable service, our extensive inventory of readily-available equipment, and our reputation for high-quality are important to drilling contractors looking to stay on schedule and attract the best crews. We also believe that larger exploration and production companies often prefer to work with service providers who offer regional and even national supply options, which many smaller vendors cannot provide. Unlike some of our competitors, we offer a comprehensive suite of wellsite support services and are well positioned to be the preferred provider of these services to our customers. In addition, through our entry into the offshore workforce accommodation business, which is part of our wellsite support service segment, we provide products and services that are critical to offshore exploration and production activities.

We have the ability to provide a broad array of wellsite support services through our extensive inventory of equipment and services and network of regional offices. Our diverse and integrated product offerings enhance the value of our services to our customers, while reducing our reliance on a single product line. Our core business involves offering integrated services which provides us opportunities to cross-sell our other services. For example, our construction services operations are the first service provider to begin work on a new land-based wellsite. By delivering this service, we are strategically positioned to market our workforce accommodations and surface equipment services to the wellsite operator. Further, by staying in contact with the customer throughout the drilling phase, we are also well positioned to win business from the same customer for post drilling work, such as assembly of production facilities and pipelines, site remediation and other services. Finally, by providing land-based rig hauling and relocation services, we transition with the client to the next wellsite location. In addition to diversifying our revenue streams, we believe we can obtain a competitive advantage by supporting our customers before, during and after their drilling activities. Maintaining an ongoing dialogue with our customers also provides us with real-time information that ultimately helps us anticipate and support our customers’ needs.

Our products and services represent only a fraction of the overall costs of a well, providing an opportunity for pricing leverage as demand for higher quality workforce accommodations, surface equipment and other services increases.

We currently provide the following types of services for our customers to support their operations before, during and after wellsite operations:

Service Line	South Texas	Gulf Coast	ArkLaTex	North Texas	Permian Basin	Mid- Continent	Rocky Mountains	Offshore
Wellsite Support Services
Workforce Accommodations	ü	ü	ü	ü	ü	ü	ü	ü
Surface Equipment Rental	ü	ü	ü	ü	ü	ü	ü
Communications Services	ü	ü	ü	ü	ü	ü	ü
Solids Control	ü	ü	ü	ü	ü		ü
Production and Logistics Services
Production Fluid Services			ü	ü
Site Construction		ü		ü
Mat Rental		ü
Production Equipment Assembly and Installation		ü
Pipeline Installation		ü
Production Facility Disassembly		ü
Site Remediation		ü	ü
Rig Relocation and Heavy Equipment Hauling		ü	ü	ü

71

Wellsite Support Services

Through our wellsite support services segment, integral services are delivered to oil and natural gas companies, drilling contractors and other wellsite service providers that are required to support wellsite operations. This segment includes onshore and offshore workforce accommodations, surface equipment rental, communications services and solids control services.

Workforce Accommodations

We provide basic living accommodations and rental services, primarily through equipment rental at the onshore wellsite location. As of March 31, 2007, we owned and operated over 2,000 transportable units. These onshore accommodation services include mobile and skid-mounted units, portable bathrooms, change houses and crew quarters; water, sewer, and other specialized vehicles; and on-site water and sewer systems. We provide wellsite accommodation services in all of the regions in which we operate. In addition, we design, manufacture, lease and repair offshore workforce accommodation structures, which include U.S. Coast Guard board certified and/or SOLAS-certified units. We provide basic living accommodations and related equipment to exploration and production companies conducting operations offshore. Each of our accommodation units is manufactured to our custom specifications for use in the oilfield environment and includes the equipment we believe is necessary to provide comfortable living quarters and functional workspaces.

In 1997, we built our first U.S. Coast Guard approved building for lease to meet customers’ deepwater needs in the Gulf of Mexico. We continue to design and manufacture customized U.S. Coast Guard certified offshore workforce accommodation units. In addition, we maintain a rental fleet of over 330 buildings, which includes sleeping quarters, galleys, offices and laundry buildings. We also provide repair services, including offshore refurbishment, maintenance and rig repair, to our customers in the offshore workforce accommodation business. We have a team of experienced craftsmen that may be deployed at the wellsite to provide these repair services to our customers. We have successfully completed many platform, workforce accommodation and vessel renovation and repair projects.

Our primary competition in most of our operating regions for our onshore workforce accommodations includes a fragmented group of smaller, independent service providers. Contracts for these workforce accommodations are awarded based on the quality of accommodations and services and pricing is determined by regional supply and demand. Our revenue relating to our onshore workforce accommodations for the year ended December 31, 2006 and the three months ended March 31, 2007 was $92.3 million and $25.9 million, respectively.

Our primary competition in the offshore workforce accommodation market includes two domestic oilfield service companies and two service providers in the United Kingdom that focus on the workforce accommodation business. Contracts for offshore workforce accommodations are awarded based on the quality of accommodations and service and pricing is determined by market conditions and availability. Our revenue relating to our offshore workforce accommodation business for the year ended December 31, 2006 and the three months ended March 31, 2007 was $11.1 million and $5.4 million, respectively.

Surface Equipment Rental

We also offer a wide range of surface equipment for every phase of a client’s operations at the land-based wellsite. As of March 31, 2007, we owned and operated a fleet of over 470 forklifts and loaders, including standard forklifts, extended-reach forklifts and articulating loaders. In addition, we have a number of manlifts, backhoes, generators, air compressors, light plants and trash containers as well as air, diesel and gasoline powered trash pumps, all of which can be coordinated and dispatched according to a customer’s needs.

Our primary competition in surface equipment rental includes various small service providers as well as large equipment rental companies. Contracts for our surface equipment are awarded based on the quality of

72

equipment and service reliability and pricing is determined by regional supply and demand. Our revenue relating to surface equipment rental for the year ended December 31, 2006 and the three months ended March 31, 2007 was $31.0 million and $8.1 million, respectively. Our workforce accommodations and surface equipment rental business operates in all of our operating regions.

Communications Services

We also offer our onshore customers StaRComm, a comprehensive technology solution with intercoms, television, integrated telephone, fax and internet communications delivered via satellite. Communications services are critical to the productivity and reporting at the wellsite. StaRComm provides a means of delivering these communications services in remote locations where land-based communications services are not available. Our revenue relating to communications services for the year ended December 31, 2006 and the three months ended March 31, 2007 was $6.1 million and $2.7 million, respectively.

Solids Control

Through our solids control business, we offer customized solids control and fluid management services to the land-based wellsite, including the designing and planning of waste control systems and the installation, operation and management of solids control equipment. These services help to reduce waste, maximize fluid recovery and lower costs for our customers. To assist us in providing innovative and effective solids control solutions to our customers, we maintain an inventory of customized solids control equipment. As of March 31, 2007, we owned over 700 various pieces of solids control equipment, including centrifuges, mud conditioners, flow line shakers, drying shakers and peripheral backside equipment. This equipment is delivered and configured at the wellsite and operated by our trained technicians to maximize our customers’ fluids recovery and efficiency and to help reduce the environmental impact of fluids and solids generated during drilling and production activities at the wellsite. Our solids control business provides packaged and ad-hoc rental services. Packaged services include closed-loop and de-watering systems.

• Closed-Loop Systems. We provide closed-loop mud systems which provide our customers with economic and environmental advantages over traditional earthen pit disposal at the wellsite. Drilling rigs have some solids control equipment, typically shakers and mud conditioning equipment. However, this equipment often is not properly maintained and provides only basic solids control capability, which limits drilling efficiency. Closed-loop systems are used to help reduce solids disposal, fluids disposal and the environmental impact at the wellsite while enhancing drilling efficiency. Closed-loop systems are required in environmentally sensitive areas including wellsites in or around coastal waters as well as in close proximity to residential communities. Closed-loop systems include a combination of flowline shakers, drying shakers, mud conditioners (desanders and desilters), centrifuges, pumps, tanks and other equipment in a customized configuration for a specific drilling rig.

• Solids Control Coordination. We also provide coordination and management services, as needed, for all of our solids control system installations. For a particular project, we will engineer custom comprehensive solids control solutions which includes equipment rental, equipment monitoring services and waste handling coordination services in a turnkey solution package.

Our solids control business also rents individual pieces of equipment on an ad-hoc basis. As part of our solids control services, we also provide remediation services to our customers including land farm location maintenance, slurry treatment, fluid treatment, de-watering services and pit closures.

Our primary competition in solids control includes nationally focused oilfield service companies. Contracts for our solids control services are generally awarded based on a bid basis and pricing is determined by availability of equipment and ability to meet the customer’s deadlines. Our revenue relating to solids control for the year ended December 31, 2006 and the three months ended March 31, 2007 was $22.6 million and $4.8 million, respectively. Our solids control business operates in Texas, Louisiana, New Mexico and Oklahoma.

73

Production and Logistics Services

Through our production and logistics services segment, we offer services that are critical to establish, maintain and decommission the onshore wellsite and position key equipment prior to, during and after land-based drilling operations. This segment includes production fluid services, site construction, rig relocation and heavy equipment hauling. We established this operating segment in March 2006 when we acquired BLR and OHH.

Production Fluid Services

Oil and gas operations use and produce significant quantities of fluids. We provide a variety of services to assist our customers to obtain, move, store and dispose of fluids that are involved in the development and production of their reservoirs. We provide fluid handling services in Texas, Oklahoma and Arkansas.

• Fluid Transportation. We operate specialized vacuum trucks to deliver, transport and dispose of fluids safely and efficiently. We transport fresh water, completion fluids, produced water, drilling mud and other fluids to and from our customers’ wellsites. Our assets include U.S. Department of Transportation certified equipment for transportation of hazardous waste.

• Frac Tank Rental. We operate a fleet of frac tanks that are often used during hydraulic fracturing operations. We use our fleet of fluid transport assets to fill and empty these tanks and we deliver and remove these tanks from the wellsite with our fleet of winch trucks.

• Fluid Disposal. Upon completion of the Salty’s acquisition, we will own 10 disposal wells that are permitted to dispose of salt water and incidental non-hazardous oil and gas wastes. Our vacuum trucks transport fluids that are disposed of in these salt water disposal wells. The disposal wells have injection capacities ranging up to 20,000 barrels per day at various permitted injection pressures. The salt water disposal wells are located in close proximity to customers’ producing wells. Most oil and gas wells produce varying amounts of salt water throughout their productive lives. In the areas in which we operate oil and gas wastes and salt water produced from oil and gas wells are required by law to be disposed of in authorized facilities, including permitted salt water disposal wells. Injection wells are licensed by state authorities and are completed in permeable formations below the fresh water table. Separators are maintained at most of our disposal wells permitting us to salvage residual crude oil, which is later sold for our account.

• Other Services. We also sell fluids used during well completions, such as fresh water, which we move to our customers’ wellsites using our fluid transportation services.

Site Construction

Through our site construction business, we offer equipment and services to build and reclaim infrastructure at wellsites before, during and after drilling operations. We build roads, dig pits, clear land, move earth and provide a number of construction services to oil and natural gas producers. Site construction requires the use of heavy equipment used in road construction. As of March 31, 2007, we owned and operated approximately 155 pieces of heavy construction equipment, including bulldozers, excavators, backhoes, compactors, road graders, dump trucks and cranes, and approximately 56,000 mats.

We also provide oilfield construction services for inland marine environments in bays and marshes of the Gulf Coast. Our inland marine construction services utilize tug boats, barges, crew boats, marsh hoes and cranes. Construction of production facilities in the coastal areas requires driving up to 100 to 200 pilings deep into the seafloor in order to provide an adequate foundation from which to construct and assemble production equipment above sea level.

Our primary competition in wellsite construction services includes various small service providers as well as large, integrated oilfield service companies. Contracts for our wellsite construction services are awarded based on

74

availability of equipment and the ability to meet the customer’s deadlines and pricing is determined by regional supply and demand. Our construction business operates in Louisiana and Texas, and our services are offered for wellsites in both land and inland marine environments.

Mat Rental

In areas near coastal wetlands or areas that receive significant rainfall, mats are used to stabilize locations and roads. Mats are made of hardwood and/or composite materials and are layered on roads and the wellsite to stabilize the location and prepare it for heavy equipment including the drilling rig. In some cases, pilings must be driven into the soil using hammer systems on cranes to provide strongback foundations to support the drilling rig. Mats are then layered across the location to provide a stable and dry area for wellsite operations. In areas with more stable foundations and soil conditions, mats are not required and crushed rock is brought in and graded to level and stabilize the wellsite pad.

Production Equipment Assembly and Installation

After the well is drilled, we also prepare the wellsite for production operations. Construction of wellsite production facilities includes the assembly and installation of tank batteries, containment barriers, condensers, heaters, compressors, flow lines and other specified production equipment.

Pipeline Installation

For natural gas wellsites, pipelines must be constructed to connect the new well to the nearest natural gas gathering system. We construct pipelines from the production site to the nearest gathering system or marketing line where the product may go to market.

Production Facility Disassembly and Site Remediation

After a well is plugged and abandoned, we provide decommissioning services including the disassembly of production equipment, removal of stabilization material or pad rock and re-seeding of native grasses to return the location to its original condition. This final process ends the life-cycle of the wellsite.

Rig Relocation and Heavy Equipment Hauling

We move land-based drilling rigs and related equipment to and from the wellsite. We own and operate a fleet of tractor trucks, trailers, pole trucks and cranes used for the demobilization, relocation and mobilization of drilling rigs and related heavy equipment. Our capabilities allow us to move some of the largest rigs in the United States. Our land-based rig relocation and heavy equipment hauling operations are located in regions where a high concentration of the land drilling rigs in the United States are located. We maintain a focus on providing reliable, efficient and safe transportation services.

Our primary competition in rig relocation and heavy equipment hauling includes regionally based oilfield service companies. In addition, most drilling contractors also maintain some dedicated rig hauling capacity. Contracts for our rig and heavy equipment hauling services are awarded based on availability of equipment and the ability to meet the customer’s deadlines and pricing is determined by regional supply and demand.

Properties

Our principal executive offices are currently located at 410 Roberts Street, Houston, Texas 77003. We plan to relocate our principal executive offices to 950 Corbindale Road, Suite 300, Houston, Texas 77024 in the third

75

quarter of 2007. As of May 31, 2007, we conducted our business from 40 field offices, three of which we own and 37 of which we lease. Each field office typically includes a yard, administrative office and maintenance facility. Our 40 field offices are located in Texas, Louisiana, Oklahoma, Colorado, Wyoming, North Dakota and New Mexico. We believe that our leased and owned properties are adequate for our current needs.

Sales and Marketing

Our sales and marketing activities are generally performed through our local operations in each geographic region. We believe our local field sales personnel understand basin-specific issues and customer operating procedures and, therefore, can effectively target marketing activities. We also have a corporate sales team located in our Houston headquarters that supplements our field sales efforts and focuses on large accounts and selling our complementary services.

Customers

In our onshore business, we serve numerous major and independent oil and natural gas companies, operators and drilling contractors that are active in our core areas of operations. For the twelve months ended December 31, 2006, we provided services to several hundred customers, with our top 10 customers comprising 35.2% of our total revenue. During 2006, Devon Energy Corporation accounted for approximately 10.5% of our total revenue. For the three months ended March 31, 2007, our top ten customers comprised approximately 32.3% of our total revenue, with no customer accounting for more than 10% of our total revenue. The majority of our onshore business is with major and independent oil and natural gas companies. Our top customers in our onshore business include Devon Energy Corp., Grey Wolf Drilling Company, Questar Exploration, Encana Oil & Gas and EOG Resources. Our area managers and supervisors maintain relationships with customers whose operating decisions are generally made in the field. We serve numerous major and independent oil and natural gas companies conducting drilling operations offshore. Our top customers in our offshore business include C&M Group, LTD, Devon Energy Corp., EOG Resources, Trinidad Limited, Total E&P USA, Inc. and Chevron/Texaco, Inc.

Operating Risks and Insurance

Our operations are subject to hazards inherent in the oil and natural gas industry, such as accidents, blowouts, explosions, craterings, fires and oil spills that can cause:

• personal injury or loss of life;

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

• suspension of operations.

In addition, claims for loss of oil and natural gas production and damage to formations can occur in the well services business. If a serious accident were to occur at a location where our equipment and services were being used, it could result in our being named as a defendant in lawsuits asserting substantial claims.

Because our business involves the transportation of heavy equipment and materials, we may also experience traffic accidents which could result in spills, property damage and personal injury.

Despite our efforts to maintain high safety standards, we from time to time have suffered accidents and anticipate that we will experience accidents in the future. In addition to the property and personal losses from these accidents, the frequency and severity of these incidents affect our operating costs and insurability, and our relationships with our customers, employees and regulatory agencies. Any significant increase in the frequency or severity of these incidents or the general level of compensation awards could adversely affect the cost of, or our ability to obtain, workers’ compensation and other forms of insurance and could have other material adverse effects on our financial condition and results of operations.

76

Although we maintain insurance coverage of types and amounts that we believe to be customary in the industry, we are not fully insured against all risks, either because insurance is not available or because of the high premium costs. We do maintain employer’s liability, pollution, cargo, umbrella, comprehensive commercial general liability, workers’ compensation and limited physical damage insurance. There can be no assurance, however, that any insurance obtained by us will be adequate to cover any losses or liabilities, or that this insurance will continue to be available or available on terms which are acceptable to us. Liabilities for which we are not insured, or which exceed the policy limits of our applicable insurance, could have a material adverse effect on us.

In our offshore workforce accommodation business, our customers are contractually obligated to maintain insurance against property damage to or loss of our workforce accommodation units. However, if our customers do not comply with their insurance obligations and our products sustain damage or are lost, then we may be unable to recover the value of the damaged or lost products.

Competition

We operate in competitive markets. To compete successfully in those markets, a company must provide high-quality, reliable services that meet the specific needs of oil and natural gas exploration companies and drilling contractors at competitive prices. In our core land-based market areas, we compete against different companies in each of our business segments. Our competition includes many private “mom & pop” shops, as well as larger public companies including Superior Energy Services, Inc. (with respect to workforce accommodations), Key Energy Services (with respect to production fluid services), Basic Energy Services (with respect to production fluid and site construction services), Newpark Resources, Inc. (with respect to site construction), National Oilwell Varco Inc. (with respect to solids control), Complete Production Services, Inc. (with respect to rig and heavy equipment hauling and production fluid services), Hertz Equipment Rental Corporation (with respect to surface equipment rental) and RSC Equipment Rental (with respect to surface equipment rental). In our onshore workforce accommodation business, we compete primarily with smaller, independent service providers and in our offshore workforce accommodation business, we compete against U.S. based oilfield service companies and certain international workforce accommodation providers. Our competition in this market includes Superior Energy Services, Inc., Oil States International, Inc. and Ferguson Modulars.

We believe that the principal competitive factors in the market areas that we serve are quality of service, reputation for safety and technical expertise, availability and price. While we must be price competitive, we believe that our customers select our services based primarily on our professional, reliable and comprehensive provision of services in each of our service areas and the experience of our service professionals who deliver those services.

Safety Program

In the wellsite support services industry, an important competitive factor in establishing and maintaining long-term customer relationships is having an experienced and skilled work force. In recent years, many of our larger customers have placed an emphasis not only on pricing, but also on safety records and quality management systems of contractors. We believe that these factors will gain further importance in the future. We have directed substantial resources toward employee safety and quality management training programs as well as our employee review process. Many of our competitors, particularly small contractors, have not undertaken similar training programs for their employees or managers.

Environmental Matters

Extensive federal, state and local laws regulating the discharge of materials into the environment or otherwise relating to health and safety or the protection of the environment affect our business. Numerous governmental departments issue regulations to implement and enforce these laws, which are often difficult and costly to comply with. Failure to comply with these laws and regulations often carries substantial administrative, civil and even criminal penalties. Some laws and regulations relating to protection of the environment may, in

77

some circumstances, impose strict liability for environmental contamination, rendering a person liable for environmental damages and cleanup costs without regard to negligence or fault on the part of that person. Compliance with these regulatory requirements increases our cost of doing business and consequently affects our profitability. We believe that, except as noted below, we are in substantial compliance with current applicable environmental laws and regulations and that continued compliance with existing requirements will not have a material adverse impact on our operations. However, environmental laws and regulations have been subject to frequent changes over the years, and the imposition of more stringent requirements could have a materially adverse effect upon our capital expenditures, earnings or our competitive position.

In November 2006, we were notified by a local agency that a discharge of wash water from equipment cleaning activities at our Houston, Texas solids controls facility into a drainage swale adjacent to the facility was not authorized. We stopped the discharge of equipment wash water immediately, and promptly remediated areas of impacted soil next to the equipment wash pad and in the adjacent drainage area. Although no proceeding has been commenced, it is possible that an enforcement action could be brought against us with respect to this discharge. Under the Texas Water Code, unauthorized discharges of wastewater may be subject to either civil or criminal fines and penalties. We are unable to predict whether the apparently unauthorized discharge will result in any enforcement action, but we do not expect this matter to have a material adverse effect on our operations or financial condition.

We generate non-hazardous and hazardous solid wastes that are subject to the requirements of the federal Solid Waste Disposal Act, as amended by the Resource Conservation and Recovery Act of 1976, referred to as “RCRA” in this prospectus, and comparable state statutes. Our operations generate minimal quantities of hazardous wastes because RCRA currently excludes drilling fluids, produced waters and other wastes associated with the exploration, development or production of oil and natural gas from regulation as hazardous waste. Disposal of wastes from oil and natural gas exploration, development and production that are non-hazardous wastes is usually regulated under state law. Other wastes handled at exploration and production sites or used in the course of providing well services may not fall within this exclusion from RCRA and may be regulated as hazardous waste. In addition, stricter standards for waste handling and disposal may be imposed on the oil and natural gas industry in the future. For instance, from time to time legislation has been proposed in Congress that would revoke or alter the current exclusion of exploration, development and production wastes from the RCRA definition of “hazardous wastes,” potentially subjecting these wastes to more stringent handling, disposal and cleanup requirements. If this legislation were enacted it could have a significant adverse impact on our operating costs, as well as the oil and natural gas industry and well servicing industry in general.

In the course of our operations, some of our equipment may be exposed to naturally occurring radiation associated with oil and gas deposits, and this exposure may result in the generation of wastes containing naturally occurring radioactive materials or “NORM.” NORM wastes exhibiting trace levels of naturally occurring radiation in excess of established state standards are subject to special handling and disposal requirements, and any storage vessels, piping, and work area affected by NORM may be subject to remediation or restoration requirements. Because many of the properties presently or previously owned, operated, or occupied by us have been used for oil and gas production operations for many years, it is possible that we may incur costs or liabilities associated with elevated levels of NORM.

Our underground injection operations are subject to the federal Safe Drinking Water Act, as well as analogous state and local laws and regulations. Under Part C of the Safe Drinking Water Act, the EPA established the Underground Injection Control program, which established the minimum program requirements for state and local programs regulating underground injection activities. The Underground Injection Control program includes requirements for permitting, testing, monitoring, record keeping and reporting of injection well activities, as well as a prohibition against the migration of fluid containing any contaminant into underground sources of drinking water. State regulations require us to obtain a permit from the applicable regulatory agencies to operate our underground injection wells. We believe that we have obtained the necessary permits from these agencies for our underground injection wells and that we are in substantial compliance with permit conditions

78

and state rules. Nevertheless, these regulatory agencies have the general authority to suspend or modify one or more of these permits if continued operation of one of our underground injection wells is likely to result in pollution of freshwater, substantial violation of permit conditions or applicable rules, or leaks to the environment. Although we monitor the injection process of our wells, any leakage from the subsurface portions of the injection wells could cause degradation of fresh groundwater resources, potentially resulting in cancellation of operations of a well, issuance of fines and penalties from governmental agencies, incurrence of expenditures for remediation of the affected resource and imposition of liability by third parties for property damages and personal injuries.

In addition, our sales of residual crude oil collected as part of the saltwater injection process could impose liability on us in the event that the entity to which the oil was transferred fails to manage the residual crude oil in accordance with applicable environmental health and safety laws.

The Comprehensive Environmental Response, Compensation and Liability Act, referred to as “CERCLA” in this prospectus, and comparable state laws impose liability, without regard to fault on some classes of persons that are considered to be responsible for the release of a hazardous substance into the environment. These persons include the current or former owner or operator of the disposal site or sites where the release occurred and companies that disposed or arranged for the disposal of hazardous substances. Under CERCLA, these persons may be subject to joint and several liability for the costs of investigating and cleaning up hazardous substances that have been released into the environment, for damages to natural resources and for the costs of some health studies. In addition, companies that incur liability frequently confront additional claims because it is not uncommon for neighboring landowners and other third parties to file claims for personal injury and property damage allegedly caused by hazardous substances or other pollutants released into the environment from a polluted site. We generally conduct site assessments prior to acquiring new property and have taken measures to protect ourselves from liability for hazardous substance releases. Accordingly, we believe that we do not have any material liability for remediation of site contamination or related damages. However, because we may not have identified all instances of existing site contamination and because hazardous substance releases could occur in the future, we cannot assure you that we will not incur such liabilities in the future or that such liabilities will not be material.

Our operations are also subject to the federal Clean Water Act and analogous state laws. Under the Clean Water Act, the Environmental Protection Agency has adopted regulations concerning discharges of storm water runoff. This program requires covered facilities to obtain individual permits, participate in a group permit or seek coverage under an Environmental Protection Agency general permit. Some of our properties may require permits for discharges of storm water runoff and as part of our overall evaluation of our current operations. We are applying for storm water discharge permit coverage and updating storm water discharge management practices at some of our facilities. We believe that, where necessary, we will be able to obtain, or be included under, these permits and make minor modifications to existing facilities and operations that would not have a material effect on us.

The federal Clean Water Act and the federal Oil Pollution Act of 1990, which contains numerous requirements relating to the prevention of and response to oil spills into waters of the United States, require some owners or operators of facilities that store or otherwise handle oil to prepare and implement spill prevention, control, countermeasure and response plans relating to the possible discharge of oil into surface waters. We believe we are in substantial compliance with these regulations.

We maintain insurance against some risks associated with underground contamination that may occur as a result of wellsite service activities. However, this insurance is limited to activities at the wellsite, and this insurance may not continue to be available or may not be available at premium levels that justify its purchase. The occurrence of a significant event not fully insured or indemnified against could have a materially adverse effect on our financial condition and operations.

79

Government Regulation

We operate under the jurisdiction of a number of regulatory bodies that regulate worker safety standards, the hauling of hazardous materials, the transportation of explosives, the protection of the environment and driving standards of operation. Regulations concerning equipment certifications create an ongoing need for regular maintenance which is incorporated into our daily operating procedures.

Among the services that we provide, we operate as a motor carrier and therefore we are subject to regulation by the U.S. Department of Transportation (the “DOT”) and by various state agencies. These regulatory authorities exercise broad powers, governing activities such as the authorization to engage in motor carrier operations, and regulatory safety, financial reporting and certain mergers, consolidations and acquisitions. There are additional regulations specifically related to the trucking industry, including testing and specification of equipment and product handling requirements. The trucking industry is subject to possible regulatory and legislative changes that may affect the economics of the industry by requiring changes in operating practices or by changing the demand for common or contract carrier services or the cost of providing truckload services. Some of the possible changes include increasingly stringent environmental regulations; changes in hours of service regulations which govern the amount of time a driver may drive or work in any specific time period, onboard black box recorder devices or limits on vehicle weight and size.

Interstate motor carrier operations are also subject to safety requirements prescribed by the DOT. To a large extent, interstate motor carrier operations are subject to safety regulations that mirror federal regulations. Such matters as weight and dimension of equipment are also subject to federal and state regulations. DOT regulations also mandate regular drug testing of drivers.

In addition, through our construction and logistic service business we operate a fleet of barges that are subject to the safety requirements of the United States Coast Guard. Also, in our offshore workforce accommodation business, the units we design and manufacture are subject to the safety requirements of the U.S. Coast Guard.

From time to time, various legislative proposals are introduced, including proposals to increase federal, state, or local taxes, including taxes on motor fuels, which may increase our costs or adversely impact the recruitment of drivers. We cannot predict whether, or in what form, any increase in such taxes applicable to us will be enacted.

We are also subject to the requirements of the federal Occupational Safety and Health Act (“OSHA”) and comparable state statutes that regulate the protection of the health and safety of workers. In addition, the OSHA hazard communication standard requires that information be maintained about hazardous materials used or produced in operations and that this information be provided to employees, state and local government authorities and citizens. We believe that our operations are in substantial compliance with the OSHA requirements, including general industry standards, record keeping requirements, and monitoring of occupational exposure to regulated substances.

Employees

As of May 31, 2007, we employed approximately 1,648 people, 89 of which were administrative employees located in our Houston headquarters, and 1,559 of which were field workers and others employed in regional operations. Approximately 76.2% of our employees are employed on an hourly basis. Our future success will depend in part on our ability to attract, retain and motivate qualified personnel. We are not a party to any collective bargaining agreements, and we consider our relations with our employees to be satisfactory.

80

Legal Proceedings

From time to time, we are a party to litigation or other legal proceedings that we consider to be a part of the ordinary course of our business. We are not currently involved in any legal proceedings that could reasonably be expected to have a material adverse affect on our financial condition or results of operations.

On January 11, 2007, Enrique Mayoral, et al. (including various family members and estates) filed a suit against Stallion Ltd. in the 79th Judicial District of Jim Wells County, Texas, Case # 07-01-45395-CV, alleging three wrongful deaths and three personal injuries caused by an auto accident involving the driver of a vehicle owned by Stallion Ltd. Plaintiffs are seeking damages in an unspecified amount at this time. We believe that plaintiffs’ allegations are without merit, and we intend to defend the action vigorously. Mediation has been proposed for June 27, 2007. Stallion Ltd. believes it has sufficient insurance coverage available to it to conclude the matter.

81

MANAGEMENT

Directors and Executive Officers

Our directors and executive officers and their ages and positions, as of March 31, 2007, are as follows:

Name	Age	Position
Craig M. Johnson	44	President, Chief Executive Officer and Chairman of the Board
David S. Schorlemer	40	Vice President, Chief Financial Officer and Director
Hill Dishman	47	Vice President and Chief Operating Officer
Jennifer Guidry	32	Chief Accounting Officer, Treasurer and Assistant Secretary
N. John Lancaster, Jr.	38	Director
Pierre F. Lapeyre, Jr.	44	Director

Set forth below is a description of the backgrounds of our directors and executive officers.

Craig M. Johnson. Mr. Johnson has over 20 years of experience in the oilfield service industry. Mr. Johnson has served as our Chief Executive Officer, President and Chairman of our board of directors since our formation in June 2006. Prior to our formation, he established Stallion Oilfield Holdings, Ltd., our predecessor, and served as the Chief Executive Officer, President and Chairman of its general partner, Stallion Oilfield Holdings GP, LLC, since December 2002. From September 2002 until December 2002, Mr. Johnson surveyed various investment and employment opportunities. Prior to September 2002, Mr. Johnson managed the rental and fishing tools division at Key Energy Services, Inc, a publicly traded well servicing and workover company. Mr. Johnson joined Key in July 2002 in connection with Key’s purchase of Q Services, Inc., a private production services company. From 1997 through July 2002, Mr. Johnson served as President and Chief Operating Officer of Q Services, Inc. Mr. Johnson earned his Bachelor of Arts degree from the University of Mississippi. Mr. Johnson served on the board of Remote Knowledge, Inc. between September 2004 and August 2005.

David S. Schorlemer. Mr. Schorlemer serves as our Chief Financial Officer, Vice President and director. Prior to our formation, he served in the same positions with Stallion Oilfield Holdings GP, LLC, the general partner of our predecessor, since September 2004. From July 2002 until September 2004, Mr. Schorlemer served as the Vice President of Marketing and Strategic Planning at Key Energy Services, Inc. From 1997 until July 2002, Mr. Schorlemer served as the Chief Financial Officer of Q Services, Inc. Prior to that, Mr. Schorlemer was with Andersen Consulting (now Accenture) where he worked on a variety of projects for numerous oil and natural gas companies, including Shell Oil Company, Conoco, PEMEX and Tenneco. Mr. Schorlemer earned his BBA at the University of Texas at Austin and his MBA at Texas A&M University.

Hill Dishman. Mr. Dishman serves as our Chief Operating Officer and Vice President. Prior to our formation, he served in the same positions with Stallion Oilfield Holdings GP, LLC, the general partner of our predecessor, since December 2002. From 1997 until December 2002, Mr. Dishman served as Vice President of Texas Operations for SOLOCO Texas, LP, an operating unit of Newpark Resources, Inc., an NYSE-listed oilfield service company. Mr. Dishman earned his Bachelor of Arts degree from Lamar University.

Jennifer Guidry. Ms. Guidry serves as our Chief Accounting Officer, Treasurer and Assistant Secretary. Prior to our formation, she served as Controller, Treasurer and Assistant Secretary with Stallion Oilfield Holdings GP, LLC, the general partner of our predecessor, since August 2003. From September 2002 to August 2003, Ms. Guidry served as Financial Reporting Manager for 3TEC Energy Services, Inc., a publicly traded company. From April 2002 to September 2002, Ms. Guidry served as Director of Financial Reporting of Q Services, Inc., which was acquired by Key Energy Services, Inc. in July 2002. From September 1996 through April 2002, Ms. Guidry was with Arthur Andersen where she worked on a variety of audits for numerous oil and gas companies. Ms. Guidry is a CPA and earned her Bachelor of Science (Accounting) degree from Louisiana Tech University.

82

N. John Lancaster, Jr. Mr. Lancaster has served as one of our directors since our formation in June 2006. Prior to our formation, he served as a director of Stallion Oilfield Holdings GP, LLC, the general partner of our predecessor, since January 2005. Mr. Lancaster is a Managing Director of Riverstone Holdings, LLC (“Riverstone”), an affiliate of Carlyle/Riverstone. Prior to joining Riverstone in 2000, Mr. Lancaster was a Director with The Beacon Group, LLC, a privately held firm specializing in principal investing and strategic advisory services in the energy and other industries. Prior to Beacon, Mr. Lancaster was a Vice President with Credit Suisse First Boston’s Natural Resources Group. Mr. Lancaster received his BBA from the University of Texas at Austin and his MBA from Harvard Business School. Mr. Lancaster serves on the boards of directors (or equivalent governing bodies) of Frontier Drilling ASA, International Logging, Inc., Red Technology Alliance, LLC, Moreno Group Holdings, LLC, Titan Specialties, Ltd. and 4Gas International. Mr. Lancaster was nominated pursuant to the Nominating Agreement.

Pierre F. Lapeyre, Jr. Mr. Lapeyre has served as one of our directors since our formation in June 2006. Prior to our formation, he served as a director of Stallion Oilfield Holdings GP, LLC, the general partner of our predecessor, since January 2005. Mr. Lapeyre is a founder and Senior Managing Director of Riverstone. Prior to founding Riverstone in 2000, Mr. Lapeyre was a Managing Director of Goldman, Sachs & Co. in its Global Energy & Power Group. While at Goldman, Sachs, Mr. Lapeyre’s responsibilities included client coverage and leading the execution of a wide variety of M&A, IPO, strategic advisory and capital markets financings for clients across all sectors of the industry, and he was involved extensively in the origination and execution of energy private equity investments on behalf of the firm. Mr. Lapeyre received his BS in finance/economics from the University of Kentucky and his MBA from the University of North Carolina at Chapel Hill. Mr. Lapeyre serves on the boards of directors (or equivalent governing bodies) of SemGroup, L.P., Legend Natural Gas, LP, Legend Natural Gas II, LP, Legend Natural Gas III, LP, CDM Resource Management, Ltd., Topaz Power Group, LLC, Cobalt International Energy, L.P., Phoenix Exploration Company LP, Frontier Drilling ASA, 4Gas International, Targe Energy LLC, Coastal Carolina Clean Power, LLC, Moreno Group Holdings, LLC, Titan Specialties, Ltd., Niska GS Holdings I, L.P. and Niska GS Holdings II, L.P. Mr. Lapeyre was nominated pursuant to the Nominating Agreement.

Board of Directors

Our board of directors currently consists of four members. In compliance with the requirements of the Sarbanes-Oxley Act of 2002, the rules of The Nasdaq Stock Market LLC and SEC rules and regulations, a majority of the directors on our corporate governance and nominating and compensation committees will be independent within 90 days of listing on The NASDAQ Stock Market LLC and, within one year, these committees will be fully independent and a majority of our board will be independent. A majority of the directors on our audit committee will be independent within 90 days of the effectiveness of the registration statement and, within one year, the committee will be fully independent.

Committees

Audit Committee

We will have an audit committee comprised of three independent directors, as defined under and required by the federal securities laws and the rules of The Nasdaq Stock Market LLC. One member of the audit committee will be designated as the audit committee financial expert, as defined by Item 401(h) of Regulation S-K of the Securities Exchange Act of 1934, as amended. The audit committee will be responsible for reviewing our external financial reporting, engaging our independent auditors and reviewing procedures for internal auditing and the adequacy of our internal accounting controls.

Our board of directors will adopt a written charter for the audit committee which will be available on our website.

83

Corporate Governance and Nominating Committee

We will establish a corporate governance and nominating committee consisting of independent directors after the closing of this offering. The principal duties of the corporate governance and nominating committee will be as follows:

• to recommend to the board of directors proposed nominees for election to the board of directors by the stockholders at annual meetings, including an annual review as to the renominations of incumbents and proposed nominees for election by the board of directors to fill vacancies that occur between stockholder meetings; and

• to make recommendations to the board of directors regarding corporate governance matters and practices.

Our board of directors will adopt a written charter for the corporate governance and nominating committee which will be available on our website.

We are a party to the Nominating Agreement. Please read “Certain Relationships and Related Party Transactions—Nominating Agreement” for additional information about the Nominating Agreement.

Compensation Committee

Following the completion of this offering, we will establish a compensation committee comprised of independent directors. The compensation committee will administer our stock plans and incentive compensation plans, including our 2007 Stock Incentive Plan, and in this capacity will make all option grants or awards to our non-independent directors and employees under such plans. In addition, the compensation committee will be responsible for making recommendations to the board of directors with respect to the compensation of our chief executive officer and our other executive officers and for establishing compensation and employee benefit policies.

Our board of directors will adopt a written charter for the compensation committee which will be available on our website.

Compensation Committee Interlocks and Insider Participation

None of our executive officers serve as a member of the board of directors or compensation committee of any entity that has one or more of its executive officers serving as a member of our board of directors or compensation committee.

Compensation Discussion and Analysis

We were formed as a Delaware corporation in June 2006 and will commence business operations upon completion of the Restructuring. Consequently, our executive officers were not specifically compensated for time expended with respect to our business during 2006. In connection with this offering, we will succeed to the business and operations of Stallion Ltd. The executive officers of Stallion Ltd. are also serving as our executive officers and will continue to serve as our executive officers following the Restructuring. For 2006, the Compensation Committee (the “Committee”) of Stallion Oilfield Holdings GP, LLC (“Holdings GP”), the general partner of Stallion Ltd., approved compensation for Stallion Ltd.’s executive officers. The following analysis discusses the compensation objectives and decisions of the Committee with respect to compensation paid to Stallion Ltd.’s executive officers in 2006. Following this offering, the Compensation Committee of our Board of Directors will determine the objectives, philosophy and procedures for our compensation program, which we expect will be similar to the objectives and philosophy instituted by the Committee, except that we expect our compensation program will have a greater focus on long-term incentives through equity awards.

The following analysis contains statements regarding future individual and company performance targets and goals. These targets and goals are disclosed in the limited context of Stallion Ltd.’s executive compensation

84

program and should not be understood to be statements of management’s expectations or estimates of results or other guidance. We specifically caution investors not to apply these statements to other contexts.

Overview of Executive Compensation Program

Stallion Ltd.’s success is contingent on its ability to recruit, develop, motivate and retain top executive talent with the requisite skills and experience to develop, expand and execute its business strategy. As a result, Stallion Ltd. seeks to deliver fair and competitive compensation for its executive officers by structuring its executive compensation program principally around two goals. First, it targets compensation at competitive market levels. Second, it believes its executive officers should be rewarded for executing goals designed to generate returns for its unitholders but not for poor performance. As a result, it ties selected elements of its executive compensation program to individual and company performance goals.

The Chief Executive Officer (“CEO”) annually reviews the performance of the Chief Financial Officer (“CFO”) and Chief Operating Officer (“COO”). The Committee evaluates the performance of all executive officers including the CEO, CFO and COO. The information and recommendations based on the CEO’s review, including base salary adjustments and annual cash incentive award amounts, are presented to the Committee. The Committee can exercise its discretion in modifying any recommended adjustments or awards prior to presenting to the full Board for approval.

Throughout this Compensation Discussion and Analysis and related tables, the individuals who served as Stallion’s Ltd.’s CEO and CFO during the fiscal year ended December 31, 2006, as well as the other individuals included in the Summary Compensation Table, are referred to as “Named Executive Officers.”

Objectives of Our Executive Compensation Program

Holdings GP has developed an executive compensation program that is designed to (1) recruit, develop and retain key executive officers responsible for Stallion Ltd.’s success and (2) motivate management to enhance long-term unitholder value. To that end, the Committee bases its executive compensation decisions on the following objectives:

• Compensation should reflect the value of the officer’s job in the marketplace. To recruit, develop and retain a highly skilled work force, Stallion Ltd. must remain competitive with the pay of other employers who compete with it for talent.

• Compensation should be based on the level of job responsibility as well as individual and company performance. As employees progress to higher levels in Stallion Ltd.’s organization, an increasing proportion of their pay should be linked to company performance and unitholder returns, rather than individual performance, because they are in a position to have greater influence on company results.

• Compensation should reward performance. Stallion Ltd.’s programs should deliver higher compensation given top-tier individual and company performance; likewise, where individual performance falls short of expectations and/or Stallion Ltd.’s performance lags the industry, its executive compensation program should deliver lower compensation. In addition, the objectives of pay-for-performance and retention must be balanced. Even in periods of temporary downturns in company performance, the executive compensation program should continue to ensure that successful, high-achieving employees will remain motivated and committed to Stallion Ltd.

The Committee has established a number of processes to assist it in ensuring that Stallion Ltd.’s executive compensation program is achieving these objectives. Among those are:

• Competitive Benchmarking. The Committee reviews information provided in an annual internal analysis conducted by David S. Schorlemer, Stallion Ltd.’s CFO, regarding relevant market data for compensation of its executive officers. Mr. Schorlemer’s analysis provides insight into base pay levels,

85

cash and non-cash bonus payments, the scope of duties for individuals by pay level and compensation levels by company size, performance and strategy. This analysis allows the Committee to track and benchmark its executive compensation program with a group of peer companies (“Peer Companies”) in the oilfield services sector of the oil and gas industry. The Peer Companies were selected based on the following characteristics: (i) compensation information for the company is publicly, or otherwise, available for review, (ii) the company has grown through acquisitions, (iii) the company employs a strategy similar to that of Stallion Ltd. and/or (iv) the company operates in service lines similar to those in which Stallion Ltd. operates.

In 2006, Stallion Ltd.’s group of Peer Companies included: Superior Energy Services, Inc.; W-H Energy Services Inc.; Oil States International, Inc.; Tetra Technologies Inc.; and Complete Production Services, Inc.

Generally, the Committee uses the data on the Peer Companies primarily to ensure that its executive compensation program as a whole is competitive, meaning generally within the range of pay offered by the Peer Companies, when Stallion Ltd. achieves the targeted performance levels.

• Assessment of Individual and Company Performance. The Committee has established specific company performance measures that determine the size of incentive payouts for Stallion Ltd.’s executive officers. In addition, a portion of the incentive bonuses are based on informal evaluations of individual performance. These performance measures are discussed in more detail below.

• Total Compensation Review. Each December, the Committee reviews each executive officer’s base pay and annual cash incentives. In addition to these primary compensation elements, the Committee periodically reviews perquisites and other compensation, as well as post-termination payments that would be required under the Company’s employment agreements. Following the 2006 review, the Committee determined that these elements of compensation were reasonable in the aggregate.

Elements of Our Executive Compensation Program

The Committee evaluates both performance and compensation to ensure that Stallion Ltd. maintains its ability to attract and retain superior employees in key positions and that compensation provided to its key employees remains competitive relative to the compensation paid to similarly situated executive officers of Stallion Ltd.’s Peer Companies. In furtherance of these goals, the executive compensation program consists of three basic components:

• base salary;

• annual cash incentive; and

• termination benefits.

Base Salaries

Stallion Ltd. provides its executive officers and other employees with an annual base salary to compensate them for services rendered during the year. Its goal is to set base salaries for its executive officers at levels that are competitive with comparable companies for the skills and requirements of similar positions. To achieve this goal, the Committee uses benchmarking as previously discussed. In addition, the Committee considers the officer’s responsibilities, experience, leadership, potential future contribution and demonstrated individual performance as well as Stallion Ltd.’s cash flows, earning levels and progress in implementing its business strategy in establishing increases in base salaries for Stallion Ltd.’s executive officers.

Annual Cash Incentive Awards

At the core of Stallion Ltd.’s executive compensation philosophy is a belief that pay should be linked directly to performance. Accordingly, it has adopted a set of performance measurements that are designed to

86

provide specific goal-oriented incentives to its executive officers and to tie the annual cash incentive compensation of those officers to individual and company performance guidelines. In adopting the performance measures, the Committee and Stallion Ltd.’s Board determined that such measures should be based on a subjective and discretionary formula to recognize the company’s strategy of rapid growth, the achievement of which may not result in short-term improvements conducive to an objective or formula-driven plan. The subjective measures considered by the Committee are the executive officer’s overall duties, responsibilities and expertise as well as the officer’s role in accomplishing Stallion Ltd.’s non-financial goals, including capital deployment, capital efficiency, capital structure management, growth, acquisition integration, financial controls, reporting efficiency, safety performance and employee retention. The subjective measures are aimed at recognizing performance and achievements that are difficult to quantify, such as the successful supervision of major corporate projects, demonstrated leadership ability and contributions to the industry and community development. Company performance metrics are based on metrics the Committee believes would be used by management of a public company to evaluate performance. Payment amounts and recommendations for Stallion Ltd.’s executive officers are presented to the Committee by the CEO along with the performance measures and results. Cash awards for all executive officers are determined by the Committee and presented to the Board for approval. The Committee and Stallion Ltd.’s Board informally reviews each executive officer, including the CEO, throughout the year. Based on these informal reviews, the Committee recommends performance payouts for the executive officers.

The performance components chosen for the fiscal year ended December 31, 2006, and the corresponding payout level as a percentage of the available payout amount, are set forth in the table below.

Performance Achieved	Earnings (25%)		Return on Equity (30%)		Individual Performance (45%)
Exceed	125	%	125	%	125	%
Expected	85	%	85	%	85	%
Entry	50	%	50	%	50	%

Each performance component is weighted by its relative importance to the Company and a percentage of the executive officer’s base salary equal to this weighting (25%, 30% or 45% for 2006, depending on the performance component) is used to determine the annual cash incentive award to be paid based on the performance achieved for each component. Possible performance results for each performance component are Entry, Expected and Exceed. The following example illustrates the mechanics of our annual incentive plan. For 2006, our CFO achieved “Exceed” performance in the Individual Performance component. Pursuant to the incentive plan, the CFO’s performance in this category contributed $126,563 to the total cash incentive award paid to the CFO for 2006. The contributed amount is calculated by multiplying the CFO’s base salary for 2006 ($225,000) by the weighting attributed to the Individual Performance component for 2006 (45%) and the payout level attributed to the “Exceed” level of performance for 2006 (125%). Please see “Executive Compensation—Summary Compensation—Summary Compensation for Year Ended December 31, 2006” for the base salaries of our executive officers for 2006. We do not pro-rate the amounts of awards for performance achieved between the three performance levels.

We establish the performance targets for the Expected level of achievement to match the financial performance on which our budget for the applicable fiscal year is based. While this achievement level is budgeted and planned for, we believe it to be moderately difficult for the Company and the named executive officers to reach this achievement level. We expect the Company and our named executive officers to achieve an Entry level performance without undue effort. We do not expect the Company and our named executive officers to achieve an Exceed level of performance and achieving such a level requires significant effort. With respect to the Earnings and Return on Equity components, Stallion Ltd. achieved “Exceed” performance for 2005 and achieved “Expected” performance for 2006. With respect to the Individual Performance component, our CEO, CFO and COO each achieved “Expected” performance for 2005 and each achieved “Exceed” performance for

87

2006. For 2007, we do not expect achieving an Entry, Expected or Exceed level of performance for each performance component to be more or less difficult than achieving such performance levels was for 2006.

We appointed Jennifer Guidry as our Chief Accounting Officer (“CAO”) in February 2007. For 2006, only Entry and Expected bonus grades were applicable for Ms. Guidry, with a potential bonus of 30% of base salary for the Entry category and 60% of base salary for the Expected category. The bonus components for Ms. Guidry were Earnings, Financial Reporting Efficiency and Individual Performance weighted 25%, 50% and 25%, respectively. Ms. Guidry achieved Expected performance for the Earnings, Financial Reporting Efficiency and Individual Performance components for 2006.

The performance measures are annually reviewed and updated and amended as the Committee deems necessary. The Committee also determines whether the performance measures and standards are appropriate for Stallion Ltd. and whether the full range of possible payouts makes sense relative to each applicable performance measure, as well as total compensation. Also, the Committee reviews potential results of the subjective performance measures and determines whether or not the guidelines being tied to an individual’s annual salary are appropriate.

Termination Benefits

Please see “Executive Compensation—Potential Payments Upon Termination or Change in Control” for a discussion of termination benefits payable to the Names Executive Officers pursuant to their employment agreements with Stallion Ltd.

Other Benefits

In addition to base pay, annual cash incentives and termination benefits, Stallion Ltd. provides the following forms of compensation:

• 401(k) Savings Plan Matching. Stallion Ltd. has a defined contribution profit sharing plan designed to assist eligible officers and employees in providing for their retirement. Stallion Ltd. matches the contributions of all of its employees to the plan in cash, up to a maximum of 3% of eligible deferral. Employees become 100% vested in company contributions upon completion of three years of service.

• Health and Welfare Benefits. Stallion Ltd.’s executive officers are eligible to participate in medical, dental, vision, disability insurance and life insurance to meet their health and welfare needs. These benefits are provided so as to assure that Stallion Ltd. is able to maintain a competitive position in terms of attracting and retaining officers and other employees. This is a fixed component of compensation and the benefits are provided on a non-discriminatory basis to all employees.

• Perquisites. Stallion Ltd. does not provide significant perquisites or personal benefits to its executive officers. To the extent perquisites or other personal benefits are provided, they are determined on an individual basis as appropriate in light of competitive standards and the performance of the executive officers.

Other Matters

Long-Term Equity-Based Incentives

Stallion Ltd. does not grant options or restricted units to its employees and did not grant options or restricted units to its Named Executive Officers in 2006. Stallion Ltd. has not adopted an equity-based incentive plan and during 2006 Stallion Ltd. did not make any equity grants to its executive officers.

Unit Ownership Guidelines and Hedging Prohibition

Unit ownership guidelines have not been implemented by the Committee for Stallion Ltd.’s executive officers. In addition, Stallion Ltd. does not have a policy that restricts its executive officers from limiting their economic exposure to the price of its units. Stallion Ltd. periodically reviews best practices and re-evaluates its position with respect to unit ownership guidelines and hedging prohibitions.

88

Tax Treatment of Executive Compensation Decisions

Holdings GP’s Board has not adopted a policy with respect to the limitation under Section 162(m) of the Internal Revenue Code, which generally limits a company’s ability to deduct compensation in excess of $1,000,000 to a particular executive officer in any year. The American Jobs Creation Act of 2004 changed the tax rules applicable to nonqualified deferred compensation arrangements. The Committee evaluates the potential impact of new rules impacting compensation.

COMPENSATION COMMITTEE REPORT

The Board of Directors of Stallion Oilfield Services, Inc. has reviewed and discussed the disclosure set forth above under the heading “Compensation Discussion and Analysis” with our management and, based on the review and discussions, it has recommended that the “Compensation Discussion and Analysis” be included in this prospectus.

Respectfully submitted by the Board of Directors,

Craig M. Johnson

David S. Schorlemer

N. John Lancaster, Jr.

Pierre F. Lapeyre, Jr.

89

EXECUTIVE COMPENSATION

Summary Compensation

The following table summarizes, with respect to the Named Executive Officers, information relating to the compensation earned for services rendered in all capacities to Stallion Ltd. The Named Executive Officers consist of Stallion Ltd.’s four current executive officers, including its Chief Executive Officer and Chief Financial Officer.

Summary Compensation for Year Ended December 31, 2006

Name and Principal Position	Year	Salary		Non-Equity Incentive Plan Compensation		All Other Compensation(1)		Total
Craig M. Johnson President, Chief Executive Officer and Chairman	2006	$	250,000	$	257,500	$	10,220	$	517,720
David S. Schorlemer Vice President, Chief Financial Officer and Director	2006		225,000		231,750		12,664		469,414
Hill Dishman Vice President and Chief Operating Officer	2006		185,385		206,000		7,717		399,102
Jennifer Guidry Chief Accounting Officer, Treasurer and Assistant Secretary	2006		114,831		69,000		10,544		194,375

(1) For 2006 “All Other Compensation” includes the aggregate value of matching contributions to our 401(k) plan, the dollar value of life insurance coverage, disability insurance and automobile benefits.

Name	401(k) Plan		Dollar Value of Life Insurance		Disability Insurance		Automobile Benefits		Total
Craig M. Johnson	$	4,904	$	650	$	830	$	3,836	$	10,220
David S. Schorlemer		6,750		696		780		4,438		12,664
Hill Dishman		5,562		624		968		563		7,717
Jennifer Guidry		2,503		327		714		7,000		10,544

Narrative Disclosure to Summary Compensation Table

The following is a discussion of material factors necessary to an understanding of the information disclosed in the Summary Compensation Table.

Appointment of Jennifer Guidry. On February 21, 2007, the Board of Directors of Holdings GP appointed Jennifer Guidry as Chief Accounting Officer. Ms. Guidry’s annual base salary is $135,000 and she is eligible to receive an annual bonus of up to 60% of her base salary.

Employment agreements. Stallion Ltd. has entered into a separate employment agreement with each of Messrs. Johnson, Schorlemer and Dishman (together the “Employees” and each an “Employee”), the initial term of which terminates on January 31, 2008 (together, the “Employment Agreements,” and each an “Employment

90

Agreement”). Unless either party to an Employment Agreement gives notice of its intention not to renew prior to November 2, 2007, the term of such agreement will be automatically extended for successive one-year periods until notice is given by either party prior to November 2nd of any subsequent year that the term of employment will expire on January 31 of the following year. The Employment Agreements provide for an annual base salary of $250,000, $225,000 and $180,000 for each of Messrs. Johnson, Schorlemer and Dishman, respectively, subject to increase from time to time. Messrs. Johnson, Schorlemer and Dishman are also eligible to receive an annual discretionary performance bonus with respect to each calendar year during the term of their Employment Agreement to the extent such bonuses are declared by the Board of Holdings GP. Each Employee is also entitled to participate in all employee benefit plans and programs that we may provide from time to time.

In connection with Messrs. Johnson’s and Schorlemer’s employment agreements, each of Mr. Johnson and Mr. Schorlemer indirectly received 600,000 Class E Units representing limited partnership interests of our predecessor. In addition, Mr. Johnson indirectly received 7,653,061 Class F Units representing limited partnership interests of our predecessor.

In connection with Mr. Dishman’s employment agreement, Mr. Dishman indirectly received 300,000 Class E Units representing limited partnership interests of our predecessor.

The Class E Units were granted directly to Stallion Value, L.P, in which Messrs. Johnson, Schorlemer and Dishman and certain of our other employees own interests.

Stallion Value, L.P. Stallion Value, L.P. (“Stallion Value”) owns all the E Units of Stallion Ltd. The partnership interests in Stallion Value are divided into two classes: E-1 and E-2 Units. Class E-1 and Class E-2 Units have the same rights and preferences, except that Class E-1 Units are entitled to receive a preferential distribution prior to any distributions to Class E-2 Units. The Class E-1 Units are held by Messrs. Johnson, Schorlemer and Dishman and other partners in Stallion Value that received units in Stallion Value early in Stallion Ltd.’s formation. The preferential distribution will be an amount of cash or property with a value of $1/Class E-1 Unit. The preferential distribution will be made to each Class E-1 unitholder in the proportion of his or her Class E-1 Units over the aggregate number of Class E-1 Units held by all Class E-1 unitholders. Further distributions from Stallion Ltd. to its partners after the preferential distribution has been made to the Class E-1 unitholders will be made to all of the unitholders of Stallion Value in the ratio of each such unitholder’s Class E-1 and Class E-2 Units divided by the aggregate number of Class E-1 and Class E-2 Units held by all unitholders. At or prior to this initial public offering, the Class E-1 unitholders will contribute their rights in and to Class E-1 Units to us in exchange for shares of our common stock which will have a value (based on the offering price to the public) equal to the preferential distribution.

2007 Stock Incentive Plan

We currently anticipate that, prior to the consummation of this offering, the Company’s board of directors and stockholders will adopt the 2007 Stock Incentive Plan (the “Plan”). The principal purpose of the Plan will be to promote our success, enhance our value, and attract, retain and motivate selected employees, consultants and directors through the granting of stock-based compensation awards. The Plan will provide for a variety of such incentive awards, including nonstatutory stock options, incentive stock options (within the meaning of Section 422 of the Internal Revenue Code, or the “Code”), stock appreciation rights, restricted stock awards, restricted stock unit awards, performance-based awards, and other stock-based awards. We currently anticipate that              shares of the Company’s common stock will be reserved for issuance under the Plan.

Administration

Prior to the consummation of this offering, the Plan will be administered by the committee appointed by the Company’s board of directors. Upon and following the consummation of this offering, the Plan will be administered by a compensation committee of the board of directors. The board of directors, or the compensation

91

committee if so empowered, has the authority to interpret the Plan and to adopt such rules for the administration, interpretation and application of the Plan according to its terms. However, the board of directors may not delegate, to the compensation committee or otherwise, the power to grant awards to independent directors.

Grant of Awards

Certain employees, consultants and directors will be eligible to be granted awards under the Plan. The Company’s board of directors, or the compensation committee if so empowered, will determine:

• which employees, consultants and directors are to be granted awards;

• the type of award that is granted (only employees can be granted incentive stock options under Code Section 422);

• the number of shares subject to the awards; and

• terms and conditions of each award, as consistent with the Plan.

Under the Plan, performance-based awards are intended to comply with the requirements of Code Section 162(m), in order to allow those awards, when payable, to be fully tax deductible by the Company.

Expiration of Stock Options

The term of an option will be set by the Company’s board of directors, or the compensation committee if so empowered, subject to the following conditions: (1) no option term will be longer than ten years from the date of grant; and (2) the option term for an incentive stock option granted to an employee owning more than 10% of the total combined voting power of all classes of the Company’s capital stock will not exceed five years from the date of grant. Upon termination of an outstanding option holder’s services, the holder may exercise his or her options within the time period specified in the option grant, to the extent that the options were vested as of the termination date.

Adjustments of Awards

If the Company shall effect any stock dividend, stock split, subdivision, consolidation, recapitalization, or other capital readjustment, without receiving compensation therefor, then the number of outstanding shares under the Plan and the option price or fair market value of awards shall be proportionately adjusted.

The board of directors, or the compensation committee if so empowered, shall take such action as it deems appropriate in order that the value of each outstanding award shall not be adversely affected by any of these events.

Amendment or Termination

The board of directors may generally amend or terminate the Plan at any time; however, the board must generally obtain approval of the shareholders: (i) to increase the number of shares of common stock that may be issued under the Plan; (ii) to amend the group of employees eligible for awards under the Plan; (iii) to extend the term of the Plan; (iv) to increase the per person limits on awards intended to qualify for the performance-based exception; or (v) to the extent otherwise required by applicable law, rule or regulation.

Potential Payments Upon Termination or Change in Control

Under the Employment Agreements, if an Employee’s employment is terminated (other than during any 12-month period following any Change of Control (as such term is defined in the Employee’s Employment Agreement)) (1) by the Employee for Good Reason (as defined in the Employee’s Employment Agreement), (2)

92

by us for any reason other than for Cause (as such term is defined in the Employee’s Employment Agreement) or (3) because we do not extend the Employee’s term (and with respect to a non-extension of the Employee’s term, the Employee complies with the provisions relating to non-competition, non-disclosure of proprietary information, and inventions), the Employee will be entitled to receive the following benefits, subject to the non-compete, confidentiality and inventions provisions, and provided that the Employee executes a general waiver and release:

(A) an amount equal to the Employee’s annual base salary accrued through the date of termination and not previously paid plus any reimbursable expenses paid by and owed to the Employee plus any accrued vacation pay owed to the Employee and any accrued vested benefits under our employee benefit plans, programs and arrangements (which shall be payable in accordance with the terms and conditions of such employee benefit plans, programs or arrangements);

(B) an amount equal to the Employee’s annual base salary that the Employee would have received if he had continued his employment under his Employment Agreement for a period equal to the greater of 24 months following the date of termination and the remainder of the Employee’s term under his Employment Agreement; and

(C) an amount equal to any earned portion of the Employee’s annual bonus for the completed year preceding the date of termination that remains unpaid.

Under the Employment Agreements, if during the 12-month period immediately following a Change of Control, an Employee’s employment is terminated by the Employee for Good Reason or by us for any reason other than for Cause, the Employee will be entitled to receive the following benefits, subject to the non-compete and confidentiality provisions, and provided that the Employee executes a general waiver and release:

(A) an amount equal to the Employee’s annual base salary accrued through the date of termination and not previously paid plus any reimbursable expenses paid by and owed to the Employee plus any accrued vacation pay owed to the Employee and any accrued vested benefits under our employee benefit plans, programs and arrangements (which shall be payable in accordance with the terms and conditions of such employee benefit plans, programs or arrangements);

(B) an amount equal to three times his annual base salary;

(C) an amount equal to any earned portion of the Employee’s annual bonus for the completed year preceding the date of termination that remains unpaid; and

(D) continued coverage for the Employee and his dependents under our health benefit plans until the earlier date of the Employee’s coverage under another employee benefit plan or 18 months after the date of termination.

The disclosure that follows delineates the amount of compensation and other benefits due to Messrs. Johnson, Schorlemer and Dishman in the event of their termination of employment, including, but not limited to, in connection with a Change in Control of the Company. The amounts shown assume that such termination was effective as of December 31, 2006, and thus includes amounts earned through such time and are estimates of the amounts which would be paid out to the executives upon their respective termination. In addition, in the case of a qualifying termination within 12 months after a Change of Control, the amounts shown assume continued coverage under our health benefit plans for 18 months after the date of termination. The actual amounts to be paid out can only be determined at the time of such executive’s separation from the Company.

A summary of the potential payments and benefits upon a qualifying termination (other than a termination during the 12-month period immediately following a Change of Control) is as follows:

1. Craig M. Johnson: $505,479 in cash.

2. David S. Schorlemer: $454,932 in cash.

93

3. Hill Dishman: $404,384 in cash.

A summary of the potential payments and benefits upon a qualifying termination during the 12-month period immediately following a Change of Control is as follows:

1. Craig M. Johnson: $755,479 in cash; $3,069 in health benefit plan continuation coverage.

2. David S. Schorlemer: $679,932 in cash; $3,069 in health benefit plan continuation coverage.

3. Hill Dishman: $604,384 in cash; $2,813 in health benefit plan continuation coverage.

Under the terms of the Employment Agreements, subject to certain exceptions, during their employment and for 24 months following the termination of their employment, the Employees may not compete in the markets in which we and our affiliates engage in business or planned to engage in business as of the date of termination.

DIRECTOR COMPENSATION

Compensation of Directors of Holdings GP

The directors of Holdings GP did not receive compensation for their services as directors of Holdings GP during 2006. In connection with this offering, our Compensation Committee will approve the cash retainer fees, meeting fees and equity awards that will be provided to our directors, which compensation is described below. We expect that directors who are our full-time employees will receive no compensation for serving as directors.

Compensation of Directors of the Company

Directors who are our employees do not receive a retainer or fees for service on the board or any committees. Following this offering, we expect to pay non-employee members of the board for their service as directors. Directors who are not employees are expected to receive a fee of $             for each board meeting attended in person, and a fee of $             for attendance at a meeting held telephonically. In addition, each non-employee director is expected to receive, upon election to the board, a stock option to purchase shares of our common stock at the market price on the date of grant that vests ratably over three years. Directors are reimbursed for reasonable out-of-pocket expenses incurred in attending meetings of the board or committees and for other reasonable expenses related to the performance of their duties as directors.

Employment Agreements

We have entered into a separate employment agreement with each of Messrs. Johnson, Schorlemer and Dishman (together the “Employees,” and each an “Employee”), the initial term of which terminates on January 31, 2008 (together, the “Employment Agreements,” and each an “Employment Agreement”). Unless either party to an Employment Agreement gives notice of its intention not to renew prior to November 2, 2007, the term of such agreement will be automatically extended for successive one-year periods until notice is given by either party prior to November 2 of any subsequent year that the term of employment will expire on January 31 of the following year. Messrs. Johnson’s, Schorlemer’s and Dishman’s annual base salaries are $250,000, $225,000 and $180,000, respectively, subject to increase at the discretion of our board of directors, and they will be eligible to receive an annual bonus, if any, as determined by our board of directors, taking into account our profitability and each Employee’s performance during that calendar year. Each Employee is also entitled to participate in all employee benefit plans and programs that we may provide from time to time.

In connection with Messrs. Johnson’s and Schorlemer’s employment agreements, each of Mr. Johnson and Mr. Schorlemer indirectly received 600,000 Class E Units representing limited partnership interests of our predecessor. In addition, Mr. Johnson indirectly received 7,653,061 Class F Units representing limited partnership interests of our predecessor.

In connection with Mr. Dishman’s employment agreement, Mr. Dishman indirectly received 300,000 Class E Units representing limited partnership interests of our predecessor.

94

The Class E Units were granted directly to Stallion Value, L.P, in which Messrs. Johnson, Schorlemer and Dishman and certain of our other employees own interests.

Upon the closing of the Restructuring, the Class E Units and the Class F Units will be converted into shares of our common stock. Upon this conversion, Messrs. Johnson, Schorlemer and Dishman will receive             ,              and              shares of our common stock, respectively. In connection with the closing of this offering, these shares will no longer be subject to the forfeiture restrictions that previously encumbered the Class E Units and the Class F Units.

Under the Employment Agreements, if an Employee’s employment is terminated (other than during any 12 month period following any Change of Control (as such term is defined in the Employee’s Employment Agreement)) (1) by the Employee for Good Reason (as defined in the Employee’s Employment Agreement), (2) by us for any reason other than for Cause (as such term is defined in the Employee’s Employment Agreement) or (3) because we do not extend the Employee’s term (and with respect to a non-extension of the Employee’s term, the Employee complies with the provisions relating to non-competition, non-disclosure of proprietary information, and inventions), the Employee will be entitled to receive the following benefits, subject to the non-compete, confidentiality and inventions provisions, and provided that the Employee executes a general waiver and release:

(A) an amount equal to the Employee’s annual base salary accrued through the date of termination and not previously paid plus any reimbursable expenses paid by and owed to the Employee plus any accrued vacation pay owed to the Employee and any accrued vested benefits under our employee benefit plans, programs and arrangements (which shall be payable in accordance with the terms and conditions of such employee benefit plans, programs or arrangements),

(B) an amount equal to the Employee’s annual base salary that the Employee would have received if he had continued his employment under his Employment Agreement for a period equal to the greater of 24 months following the date of termination and the remainder of the Employee’s term under his Employment Agreement,

(C) an amount equal to any earned portion of the Employee’s annual bonus for the completed year preceding the date of termination that remains unpaid, and

(D) certain unvested Class E and/or Class F Units will become fully vested.

Under the Employment Agreements, if during the 12-month period immediately following a Change of Control, an Employee’s employment is terminated by the Employee for Good Reason or by us for any reason other than for Cause, the Employee will be entitled to receive the following benefits, subject to the non-compete and confidentiality provisions, and provided that the Employee executes a general waiver and release:

(A) an amount equal to the Employee’s annual base salary accrued through the date of termination and not previously paid plus any reimbursable expenses paid by and owed to the Employee plus any accrued vacation pay owed to the Employee and any accrued vested benefits under our employee benefit plans, programs and arrangements (which shall be payable in accordance with the terms and conditions of such employee benefit plans, programs or arrangements),

(B) an amount equal to three times his annual base salary,

(C) an amount equal to any earned portion of the Employee’s annual bonus for the completed year preceding the date of termination that remains unpaid,

(D) continued coverage for the Employee and his dependents under our health benefit plans until the earlier date of the Employee’s coverage under another employee benefit plan or 18 months after the date of termination, and

(E) certain unvested Class E and/or Class F Units will become fully vested.

95

Under the terms of the Employment Agreements, subject to certain exceptions, during their employment and for 24 months following the termination of their employment, the Employees may not compete in the markets in which we and our affiliates engage in business or planned to engage in business as of the date of termination of each Employee’s respective employment.

Indemnification Agreements

We have entered into indemnification agreements with all of our directors and some of our officers under which we indemnify such persons against expenses (including attorneys’ fees), judgments, fines and amounts paid in settlement incurred as a result of the fact that such person, in his or her capacity as a director or officer, is made or threatened to be made a party to any suit or proceeding. These persons are indemnified to the fullest extent now or hereafter permitted by the General Corporation Law of the State of Delaware. The indemnification agreements also provide for the advancement of expenses to these directors and officers in connection with any suit or proceeding.

96

CERTAIN RELATIONSHIPS AND RELATED PARTY TRANSACTIONS

The descriptions set forth below are qualified in their entirety by reference to the applicable agreements.

Offering By Selling Stockholders

We are paying the expenses of this offering by the selling stockholders, other than underwriting discounts, commissions and transfer taxes with respect to shares of our common stock sold by the selling stockholders. We have agreed to indemnify the selling stockholders against liabilities under the Securities Act, or contribute to payments that the selling stockholders may be required to make in that respect.

Registration Rights Agreement

Stallion and Carlyle/Riverstone are parties to a registration rights agreement (the “Registration Rights Agreement”).

Demand Registration Rights

Under the Registration Rights Agreement, at any time after 180 days following this offering, Carlyle/Riverstone has the right, subject to certain limitations, to demand on six occasions that we register all or any portion of their registrable securities so long as the registrable securities proposed to be sold on an individual registration statement have an aggregate gross offering price of at least $20.0 million. After such time as we become eligible to use Form S-3 (or comparable form) for the registration under the Securities Act of any securities, Carlyle/Riverstone may request that securities be registered on a delayed or continuous basis pursuant to Rule 415 under the Securities Act, provided that any such registration will be treated as two demand registrations.

Piggyback Registration Rights

If we propose to file a registration statement under the Securities Act relating to an offering of our common stock, upon the written request of Carlyle/Riverstone, we will include in such registration, and any related underwriting, all of the registrable securities included in such requests, subject to customary cutback provisions.

Registration Procedures and Expenses

The Registration Rights Agreement contains customary procedures relating to underwritten offerings and the filing of registration statements. We have agreed to pay all registration expenses incurred in connection with any registration, up to a total of six registrations, including all registration, qualification and filing fees, printing expenses, reasonable fees of one counsel to Carlyle/Riverstone, blue sky fees and expenses and the expense of any special audits incident to or required by any such registration. All underwriting discounts and selling commissions and stock transfer taxes applicable to securities registered by holders and fees of counsel to any such holder (other than as described above) will be payable by holders of registrable securities.

Nominating Agreement

We are party to a nominating agreement (the “Nominating Agreement”) with C/R Stallion Investment Partnership, L.P. (“Investment Partnership”). Pursuant to the Nominating Agreement, as long as Investment Partnership beneficially owns at least 30%, 20% or 10% of our issued and outstanding shares of common stock, we have agreed to take all corporate action within our power required to cause the board of directors at all times to include at least three, two or one member(s), respectively, designated by Investment Partnership. In addition, as long as Investment Partnership beneficially owns at least a majority of the aggregate amount of shares of common stock it held immediately following the Restructuring, we have agreed to take all corporate action

97

within our power required to cause the board of directors at all times to include at least one member designated by Investment Partnership. In the event that such designees are not elected to our board of directors, Investment Partnership will have the right to appoint observers to our board of directors.

The Restructuring

We were formed as a Delaware corporation in June 2006. In connection with this offering, we will succeed to the business and operations of Stallion Ltd, which are described in this prospectus. Prior to the completion of this offering, Stallion Ltd will merge with and into Stallion Oilfield Services, Inc., with Stallion Oilfield Services, Inc. being the surviving corporate parent and owning all of the operating subsidiaries of Stallion Ltd. The majority owners of Stallion Ltd are Carlyle/Riverstone and an affiliate of Craig Johnson, our President, Chief Executive Officer and Chairman of the Board. Since the entities are under common ownership and control, the Restructuring will be accounted for at historical cost. In the Restructuring, assuming an initial public offering price of $            , which is the midpoint of the range set forth on the cover of this prospectus, the partners of Stallion Ltd will receive an aggregate of              shares of our common stock in exchange for all of the Stallion Ltd partnership interests held by them. Immediately following completion of the Restructuring and prior to this offering, we will have shares of common stock outstanding,         % of which will be owned by Carlyle/Riverstone and         % of which will be owned by an affiliate of Craig Johnson.

Transactions with Our Significant Stockholder

The partnership agreement governing our predecessor required our predecessor to pay Carlyle/Riverstone an annual fee equal to 1% of our predecessor’s consolidated pro forma EBITDA for the provision of support services. Our obligation to pay this fee terminates upon the closing of our initial public offering.

In December 2006, Carlyle/Riverstone entered into a Contribution Agreement pursuant to which Carlyle/Riverstone agreed to acquire Class A partnership units in Stallion Oilfield Holdings, Ltd., our predecessor, for an aggregate investment of $125 million. Purchasers of units under the Contribution Agreement are subject to various conditions including approval of the board of the general partner of Stallion Oilfield Holdings, Ltd. As of December 31, 2006, $45 million has been funded under the Contribution Agreement. This investment arrangement will terminate upon completion of our initial public offering.

Transactions with Officers and Directors

Two of our directors, Mr. John Lancaster and Mr. Pierre Lapeyre, are affiliated with Riverstone, an affiliate of Carlyle/Riverstone.

Mr. Craig Johnson, our President, Chief Executive Officer and Chairman of the Board, was party to a promissory note with us pursuant to which we borrowed $7.3 million at an annual interest rate of 6% from Mr. Johnson. We repaid Mr. Johnson in full on January 31, 2005.

On November 30, 2006, we made certain loans aggregating $10 million to certain of our executive officers (Mr. Johnson—$6 million, Mr. Schorlemer—$2 million and Mr. Dishman—$2 million). These notes had a ten-year maturity but could be accelerated by us upon certain acceleration events including an initial public offering. The notes bore interest at a rate of 4.97% per year. The full principal amounts of these loans were repaid by Messrs Johnson, Schorlemer and Dishman along with related interest accrued since November 30, 2006 of $108,659, $36,220 and $36,220, respectively.

We lease an industrial facility in Alice, Texas from Q2 Rentals, L.L.C. for approximately $90,000 per year. Pursuant to an informal arrangement, we lease a houseboat and certain other recreational boats in coastal Louisiana on a month-to-month basis from Q2 Rentals in exchange for paying the operating expenses of the facilities which were approximately $160,000 for the year ended December 31, 2006. Q2 Rentals is operated by

98

Mr. David M. Johnson, Mr. Craig Johnson’s father, and owned equally by Mr. Craig Johnson, Mr. Clayton D. Johnson, Mr. Craig Johnson’s brother, and Mr. David M. Johnson.

In addition, we lease a King-Air airplane from Permian Mud Service, Inc. and have entered into an operating agreement to operate the aircraft with ChampAir, L.L.C. We share in the operating expenses and pay direct expenses of approximately $600,000 annually. ChampAir is owned and operated by Permian Mud Service, Inc., of which Mr. David Johnson and our Chief Executive Officer, President and Chairman of the Board are minority shareholders. Our executive officers reimburse us for operating expenses associated with the personal use of the aircraft. The term of our lease for this plane expired on December 31, 2006, but is continuing on a month-to-month basis.

Prior to February 2007, we utilized a Pilatus single-engine airplane from Rivers Aviation, L.L.C. in connection with our solids control business. We had an arrangement to use this plane on a month-to-month basis which was cancellable by either party with 30 days notice. Under this agreement, we shared in the operating expenses and paid Rivers Aviation approximately $20,000 per month for the use of this aircraft. Rivers Aviation is owned by Fred Lausen, who was previously division manager of our solids control business. This agreement was terminated in February 2007.

It is customary for us to lease real property from the former owners of businesses that we acquire. It is typical for many of these former owners to be employed by us. Thus, we and certain of our employees may be parties to leases relating to real property.

All loans made to our executive officers have been repaid to us and we will not make loans to executive officers in the future. We believe that our other related party transactions were either on terms at least as favorable to us as could have been obtained through arm’s-length negotiations with unaffiliated third parties or were negotiated in connection with acquisitions, the overall terms of which were as favorable to us as could have been obtained through arm’s-length negotiations with unaffiliated third parties.

Policies and Procedures for Approval of Related Party Transactions

From time to time we engage in transactions with a related party. Prior to this offering, these interested transactions were reviewed and approved or ratified by our board of directors and no policies and procedures were in place to assist the board of directors in its review, approval or ratification. Upon the listing of our common stock on The NASDAQ Stock Market LLC, the review of certain interested transactions will be governed by the policies and procedures contained in our Related-Party Transaction Policy (the “Related-Party Policy”) and the Audit Committee charter.

A “related party” is a director, executive officer, an immediate family member of a director or executive officer, stockholder owning more than 5% of our common stock, or any entity in which any of the foregoing persons is employed or is a partner or principal or in a similar position or in which such person has a 5% or greater beneficial ownership interest. The Audit Committee is responsible for reviewing certain interested transactions with related parties. An interested transaction is any transaction, arrangement or relationship or series of similar transactions, arrangements or relationships in which (i) the aggregate amount involved will or may be expected to exceed $120,000 in any calendar year, (ii) the Company is a participant and (iii) any related party has or will have a direct or indirect (other than solely as a result of being a director or a less than 10% beneficial owner of another entity).

In the course of its review and approval or ratification of such interested transactions, the Audit Committee will consider various aspects of the transaction it deems appropriate, which will include:

• whether the interested transaction is on terms no less favorable than terms generally available to an unaffiliated third-party under the same or similar circumstances; and

99

• the extent of the related party’s interest in the transaction.

We have various processes for identifying, reporting and reviewing conflicts of interests, including related person transactions. Our Proper Business Practices and Ethics Policy (“Ethics Policy”) provides that no director, officer or other employee shall engage in business or conduct, or enter into agreements or arrangements, which would give rise to actual, potential or the appearance of conflicts of interest. The Ethics Policy also provides procedures for reporting any actual or potential conflicts of interest. In addition, we annually distribute and review a questionnaire to our executive officers and directors requesting certain information regarding, among other things, certain transactions with us in which they or their family members have an interest.

No director will participate in any discussion or approval of an interested transaction for which he or she is a related party, except that the director shall provide all material information concerning the interested transaction to the Audit Committee.

Pursuant to the Related-Party Policy, the Audit Committee has reviewed the following interested transactions and such transactions are deemed to be preapproved by the Audit Committee:

1. Employment of executive officers. Any employment by the Company of an executive officer of the Company if:

a. the related compensation is required to be reported in the Company’s proxy statement; or

b. the executive officer is not an immediate family member of another executive officer or director of the Company, the related compensation would be reported in the Company’s proxy statement if the executive officer was a “named executive officer”, and the Company’s Compensation Committee approved (or recommended that the board of directors approve) such compensation.

2. Director compensation. Any compensation paid to a director if the compensation is required to be reported in the Company’s proxy statement;

3. Certain transactions with other companies. Any transaction with another company at which a related party’s only relationship is as an employee (other than an executive officer), director or beneficial owner of less than ten percent (10%) of that company’s shares, if the aggregate amount involved does not exceed the greater of $200,000, or five percent (5%), of that company’s total annual revenues;

4. Certain Company charitable contributions. Any charitable contribution, grant or endowment by the Company to a charitable organization, foundation or university at which a related party’s only relationship is as an employee (other than an executive officer) or a director, if the aggregate amount involved does not exceed the lesser of $200,000, or five percent (5%), of the charitable organization’s total annual receipts;

5. Transactions where all shareholders receive proportional benefits. Any transaction where the related party’s interest arises solely from the ownership of the Company’s common stock and all holders of the Company’s common stock received the same benefit on a pro rata basis.

6. Transactions involving competitive bids. Any transaction involving a related party where the rates or charges involved are determined by competitive bids.

7. Regulated transactions. Any transaction with a related party involving the rendering of services as a common or contract carrier, or public utility, at rates or charges fixed in conformity with law or governmental authority.

8. Certain banking-related services. Any transaction with a related party involving services as a bank depositary of funds, transfer agent, registrar, trustee under a trust indenture, or similar services.

100

PRINCIPAL AND SELLING STOCKHOLDERS

The following table sets forth information with respect to the beneficial ownership of our common stock as of May 31, 2007, assuming the Restructuring had taken place prior to such date, by:

• each selling stockholder in this offering;

• each person who is known by us to own beneficially 5% or more of our outstanding common stock;

• our named executive officers;

• our directors; and

• all of our executive officers and directors as a group.

Except as otherwise indicated, the person or entities listed below have sole voting and investment power with respect to all shares of our common stock beneficially owned by them, except to the extent this power may be shared with a spouse. Unless otherwise indicated, the address of each stockholder listed below is 410 Roberts Street, Houston, Texas 77003.

	Shares Beneficially Owned Prior to this Offering		Number of Shares Offered	Shares Beneficially Owned After this Offering
Name of Beneficial Owner	Number	%		Number	%
C/R Stallion Investment Partnership, L.P.(1)(2)		%			%
C/R Energy Coinvestment II, L.P.(1)(2)
Cardigan Holdings, Inc.(2)(3)
Craig M. Johnson(2)
David S. Schorlemer(2)
Hill Dishman(2)
Jennifer Guidry
John Lancaster(1)(4)
Pierre Lapeyre(1)(5)
Directors and Executive Officers as a Group (6 persons)(3)(4)(5)

* Less than 1%.

(1) The address of this stockholder is c/o The Carlyle Group, 1001 Pennsylvania Avenue, N.W., Suite 200, Washington, D.C. 20004.

(2) A selling stockholder in this offering.

(3) Craig M. Johnson is the natural person who has voting and investment control over the securities owned by Cardigan Holdings, Inc. Mr. Johnson serves as Chief Executive Officer and the sole stockholder of Cardigan Holdings, Inc.

(4) Mr. Lancaster serves as a Managing Director of Riverstone, an affiliate of Carlyle/Riverstone. As such, Mr. Lancaster may be deemed to have voting and dispositive power over the shares beneficially owned by Carlyle/Riverstone. Mr. Lancaster disclaims beneficial ownership of the shares owned by Carlyle/Riverstone.

(5) Mr. Lapeyre serves as a Senior Managing Director of Riverstone, an affiliate of Carlyle/Riverstone. As such, Mr. Lapeyre may be deemed to have voting and dispositive power over the shares beneficially owned by Carlyle/Riverstone. Mr. Lapeyre disclaims beneficial ownership of the shares owned by Carlyle/Riverstone.

101

DESCRIPTION OF CAPITAL STOCK

Upon the completion of this offering, our authorized capital stock will consist of:

•              shares of common stock, $0.01 par value; and

•              shares of preferred stock, $0.01 par value, none of which are currently designated.

Upon the completion of this offering,              shares of common stock and no shares of preferred stock will be outstanding.

The following summarizes the material provisions of our capital stock and important provisions of our certificate of incorporation and bylaws. This summary is qualified by our certificate of incorporation and bylaws, copies of which have been filed as exhibits to the registration statement of which this prospectus is a part and by the provisions of applicable law.

Common Stock

Holders of common stock are entitled to one vote per share on all matters to be voted upon by the stockholders. Because holders of common stock do not have cumulative voting rights, the holders of a majority of the shares of common stock can elect all of the members of the board of directors standing for election. The holders of common stock are entitled to receive dividends as may be declared by the board of directors. Upon our liquidation, dissolution or winding up, and subject to any prior rights of outstanding preferred stock, the holders of our common stock will be entitled to share pro rata in the distribution of all of our assets available for distribution to our stockholders after satisfaction of all of our liabilities and the payment of the liquidation preference of any preferred stock that may be outstanding. There are no redemption or sinking fund provisions applicable to the common stock. All outstanding shares of common stock are fully paid and non-assessable. The holders of our common stock will have no preemptive or other subscription rights to purchase our common stock.

Preferred Stock

Subject to the provisions of the certificate of incorporation and limitations prescribed by law, the board of directors will have the authority to issue up to              shares of preferred stock in one or more series and to fix the rights, preferences, privileges and restrictions of the preferred stock, including dividend rights, dividend rates, conversion rates, voting rights, terms of redemption, redemption prices, liquidation preferences and the number of shares constituting any series or the designation of the series, which may be superior to those of the common stock, without further vote or action by the stockholders. We have no present plans to issue any shares of preferred stock.

One of the effects of undesignated preferred stock may be to enable the board of directors to render more difficult or to discourage an attempt to obtain control of us by means of a tender offer, proxy contest, merger or otherwise, and, as a result, protect the continuity of our management. The issuance of shares of the preferred stock under the board of directors’ authority described above may adversely affect the rights of the holders of common stock. For example, preferred stock issued by us may rank prior to the common stock as to dividend rights, liquidation preference or both, may have full or limited voting rights and may be convertible into shares of common stock. Accordingly, the issuance of shares of preferred stock may discourage bids for the common stock or may otherwise adversely affect the market price of the common stock.

Provisions of Our Certificate of Incorporation and Bylaws

Written Consent of Stockholders

Our certificate of incorporation and bylaws provide that any action required or permitted to be taken by our stockholders must be taken at a duly called meeting of stockholders and not by written consent.

102

Amendment of the Bylaws

Under Delaware law, the power to adopt, amend or repeal bylaws is conferred upon the stockholders. A corporation may, however, in its certificate of incorporation also confer upon the board of directors the power to adopt, amend or repeal its bylaws. Our charter and bylaws grant our board the power to adopt, amend and repeal our bylaws on the affirmative vote of a majority of the directors then in office. Our stockholders may adopt, amend or repeal our bylaws but only at any regular or special meeting of stockholders by the holders of not less than              of the voting power of all outstanding voting stock.

Special Meetings of Stockholders

Our bylaws preclude the ability of our stockholders to call special meetings of stockholders.

Other Limitations on Stockholder Actions

Advance notice is required for stockholders to nominate directors or to submit proposals for consideration at meetings of stockholders. In addition, the ability of our stockholders to remove directors without cause is precluded.

Limitation of Liability of Officers and Directors

Our certificate of incorporation provides that no director shall be personally liable to us or our stockholders for monetary damages for breach of fiduciary duty as a director, except for liability as follows:

• for any breach of the director’s duty of loyalty to us or our stockholders;

• for acts or omissions not in good faith or which involve intentional misconduct or a knowing violation of laws;

• for unlawful payment of a dividend or unlawful stock purchase or stock redemption; and

• for any transaction from which the director derived an improper personal benefit.

The effect of these provisions is to eliminate our rights and our stockholders’ rights, through stockholders’ derivative suits on our behalf, to recover monetary damages against a director for a breach of fiduciary duty as a director, including breaches resulting from grossly negligent behavior, except in the situations described above.

Business Combination Under Delaware Law

We are subject to the provisions of Section 203 of the Delaware General Corporation Law. In general, Section 203 prohibits a publicly held Delaware corporation from engaging in a “business combination” with an “interested stockholder” for a period of three years after the date of the transaction in which the person became an interested stockholder, unless the business combination is approved in a prescribed manner.

Section 203 defines a “business combination” as a merger, asset sale or other transaction resulting in a financial benefit to the interested stockholders. Section 203 defines an “interested stockholder” as a person who, together with affiliates and associates, owns, or, in some cases, within three years prior, did own, 15% or more of the corporation’s voting stock. Under Section 203, a business combination between us and an interested stockholder is prohibited unless:

• our board of directors approved either the business combination or the transaction that resulted in the stockholders becoming an interested stockholder prior to the date the person attained the status;

• upon consummation of the transaction that resulted in the stockholder becoming an interested stockholder, the interested stockholder owned at least 85% of our voting stock outstanding at the time

103

the transaction commenced, excluding, for purposes of determining the number of shares outstanding, shares owned by persons who are directors and also officers and issued under employee stock plans, under which employee participants do not have the right to determine confidentially whether shares held under the plan will be tendered in a tender or exchange offer; or

• the business combination is approved by our board of directors on or subsequent to the date the person became an interested stockholder and authorized at an annual or special meeting of the stockholders by the affirmative vote of the holders of at least 66 ²/3% of the outstanding voting stock that is not owned by the interested stockholder.

This provision has an anti-takeover effect with respect to transactions not approved in advance by our board of directors, including discouraging takeover attempts that might result in a premium over the market price for the shares of our common stock. With approval of our stockholders, we could amend our certificate of incorporation in the future to elect not to be governed by the anti-takeover law. This election would be effective 12 months after the adoption of the amendment and would not apply to any business combination between us and any person who became an interested stockholder on or before the adoption of the amendment.

Transfer Agent and Registrar

The transfer agent and registrar for the common stock is                     .

Quotation of Common Stock

We have applied to include our shares of common stock for quotation on The NASDAQ Stock Market LLC under the symbol “SOFS.”

104

SHARES ELIGIBLE FOR FUTURE SALE

Prior to this offering, there has been no public market for our common stock. The market price of our common stock could drop due to sales of a large number of shares of our common stock or the perception that these sales could occur. These factors also could make it more difficult to raise funds through future offerings of common stock.

After this offering,              shares of common stock will be outstanding, or              shares if the underwriters exercise in full their option to purchase additional shares. Of these shares, the              shares sold in this offering, or              shares if the underwriters exercise in full their option to purchase additional shares, will be freely tradable without restriction under the Securities Act, except for any shares purchased by one of our “affiliates” as defined in Rule 144 under the Securities Act. A total of              shares will be “restricted securities” within the meaning of Rule 144 under the Securities Act or subject to lock-up arrangements.

The restricted securities generally may not be sold unless they are registered under the Securities Act or are sold under an exemption from registration, such as the exemption provided by Rule 144 under the Securities Act. After this offering, the holders of              shares of our common stock will have rights, subject to some limited conditions, to demand that we include their shares in registration statements that we file on their behalf, on our behalf or on behalf of other stockholders. By exercising their registration rights and selling a large number of shares, these holders could cause the price of our common stock to decline. Furthermore, if we file a registration statement to offer additional shares of our common stock and have to include shares held by those holders, it could impair our ability to raise needed capital by depressing the price at which we could sell our common stock.

Our officers and directors and substantially all of our stockholders have entered into lock-up agreements described in “Underwriting.” Approximately              shares, representing approximately         %, of our common stock will not be subject to any lock-up arrangements. These shares may be freely tradable upon the consummation of this offering.

As restrictions on resale end, the market price of our common stock could drop significantly if the holders of these restricted shares sell them, or are perceived by the market as intending to sell them.

As soon as practicable after this offering, we intend to file one or more registration statements with the SEC on Form S-8 providing for the registration of              shares of our common stock issued or reserved for issuance under our stock option plans. Subject to the exercise of unexercised options or the expiration or waiver of vesting conditions for restricted stock and the expiration of lock-ups we and our stockholders have entered into, shares registered under these registration statements on Form S-8 will be available for resale immediately in the public market without restriction.

Rule 144

In general, under Rule 144 as currently in effect, any person (or persons whose shares are aggregated), including an affiliate, who has beneficially owned shares for a period of at least one year is entitled to sell, within any three-month period, a number of shares that does not exceed the greater of:

• 1% of the then outstanding shares of common stock; and

• the average weekly trading volume of the common stock on The NASDAQ Stock Market LLC during the four calendar weeks immediately proceeding the date on which the notice of the sale on Form 144 is filed with the Securities Exchange Commission.

Sales under Rule 144 are also subject to other provisions relating to notice and manner of sale and the availability of current public information about us.

105

Rule 144(k)

Under Rule 144(k), a person who is not deemed to have been one of our affiliates at any time during the 90 days preceding a sale, and who has beneficially owned the shares proposed to be sold for at least two years, including the holding period of any prior owner other than an “affiliate,” is entitled to sell the shares without complying with the manner of sale, public information, volume limitation or notice provisions of Rule 144.

106

CERTAIN UNITED STATES FEDERAL TAX CONSIDERATIONS

FOR NON-UNITED STATES HOLDERS

The following is a general discussion of the principal United States federal income and estate tax consequences of the ownership and disposition of our common stock by a non-U.S. holder. As used in this discussion, the term “non-U.S. holder” means a beneficial owner of our common stock that is not, for U.S. federal income tax purposes:

• an individual who is a citizen or resident of the United States;

• a corporation or partnership (including any entity treated as a corporation or partnership for U.S. federal income tax purposes) created or organized in or under the laws of the United States, or of any political subdivision of the United States;

• an estate whose income is subject to U.S. federal income taxation regardless of its source; or

• a trust, in general, if a U.S. court is able to exercise primary supervision over the administration of the trust and one or more U.S. persons have authority to control all substantial decisions of the trust, or if it has a valid election in effect under applicable U.S. Treasury Regulations to be treated as a U.S. person.

An individual may be treated as a resident of the United States in any calendar year for U.S. federal income tax purposes, instead of a nonresident, by, among other ways, being present in the United States for at least 31 days in that calendar year and for an aggregate of at least 183 days during a three-year period ending in the current calendar year. For purposes of this calculation, you would count all of the days present in the current year, one-third of the days present in the immediately preceding year and one-sixth of the days present in the second preceding year. Residents are taxed for U.S. federal income tax purposes as if they were U.S. citizens. This discussion does not consider:

• U.S. state or local or non-U.S. tax consequences;

• all aspects of U.S. federal income and estate taxes or specific facts and circumstances that may be relevant to a particular non-U.S. holder’s tax position, including the fact that in the case of a non-U.S. holder that is an entity treated as a partnership for U.S. federal income tax purposes, the U.S. tax consequences of holding and disposing of our common stock may be affected by certain determinations made at the partner level;

• the tax consequences for the stockholders, partners or beneficiaries of a non-U.S. holder;

• special tax rules that may apply to particular non-U.S. holders, such as financial institutions, insurance companies, tax-exempt organizations, U.S. expatriates, broker-dealers, traders in securities, common trust funds, controlled foreign corporations or persons that have a functional currency other than the U.S. dollar; or

• special tax rules that may apply to a non-U.S. holder that holds our common stock as part of a “straddle,” “hedge,” “conversion transaction,” “synthetic security” or other integrated investment.

The following discussion is based on provisions of the U.S. Internal Revenue Code of 1986, as amended, existing and proposed Treasury regulations and administrative and judicial interpretations, all as of the date of this prospectus, and all of which are subject to change, retroactively or prospectively. The following summary assumes that a non-U.S. holder holds our common stock as a capital asset.

Prospective purchasers should consult a tax advisor regarding the U.S. Federal, state, local and non-U.S. income and other tax consequences of acquiring, holding and disposing of shares of our common stock.

Distributions on Common Stock

In the event that we make cash distributions on our common stock, these distributions generally will constitute dividends for U.S. federal income tax purposes to the extent paid from our current or accumulated

107

earnings and profits, as determined under U.S. federal income tax principles. Dividends paid to non-U.S. holders of our common stock that are not effectively connected with the non-U.S. holder’s conduct of a U.S. trade or business will be subject to U.S. withholding tax at a 30% rate, or if a tax treaty applies, a lower rate specified by the treaty. Non-U.S. holders should consult their tax advisors regarding their entitlement to benefits under a relevant income tax treaty.

Dividends that are effectively connected with a non-U.S. holder’s conduct of a trade or business in the United States and, if an income tax treaty applies, are attributable to a permanent establishment in the United States, are taxed on a net income basis at the regular graduated rates and in the manner applicable to U.S. persons. In that case, we will not have to withhold U.S. federal withholding tax if the non-U.S. holder complies with applicable certification and disclosure requirements. In addition, a “branch profits tax” may be imposed at a 30% rate, or a lower rate under an applicable income tax treaty, on dividends received by a foreign corporation that are effectively connected with the conduct of a trade or business in the United States.

A non-U.S. holder who claims the benefit of an applicable income tax treaty generally will be required to satisfy applicable certification and other requirements. However,

• in the case of common stock held by a foreign partnership, the certification requirement will generally be applied to the partners of the partnership and the partnership will be required to provide certain information;

• in the case of common stock held by a foreign trust, the certification requirement will generally be applied to the trust or the beneficial owners of the trust depending on whether the trust is a “foreign complex trust,” “foreign simple trust” or “foreign grantor trust” as defined in the U.S. Treasury regulations; and

• look-through rules will apply for tiered partnerships, foreign simple trusts and foreign grantor trusts.

A non-U.S. holder that is a foreign partnership or a foreign trust is urged to consult its own tax advisor regarding its status under these U.S. Treasury regulations and the certification requirements applicable to it.

A non-U.S. holder that is eligible for a reduced rate of U.S. federal withholding tax under an income tax treaty may obtain a refund or credit of any excess amounts withheld by filing an appropriate claim for a refund with the U.S. Internal Revenue Service.

Gain on Disposition of Common Stock

A non-U.S. holder generally will not be subject to U.S. federal income tax on gain recognized on a disposition of our common stock unless:

• the gain is effectively connected with the non-U.S. holder’s conduct of a trade or business in the United States and, if an income tax treaty applies, is attributable to a permanent establishment maintained by the non-U.S. holder in the United States; in these cases, the gain will be taxed on a net income basis at the regular graduated rates and in the manner applicable to U.S. persons and, if the non-U.S. holder is a foreign corporation, the “branch profits tax” described above may also apply;

• the non-U.S. holder is an individual who is present in the United States for 183 days or more in the taxable year of the disposition and meets other requirements; or

• we are or have been a “United States real property holding corporation” for U.S. federal income tax purposes at any time during the shorter of the five-year period ending on the date of disposition or the period that the non-U.S. holder held our common stock.

Generally, a corporation is a “United States real property holding corporation” if the fair market value of its “United States real property interests” equals or exceeds 50% of the sum of the fair market value of its

108

worldwide real property interests plus its other assets used or held for use in a trade or business. The tax relating to stock in a “United States real property holding corporation” generally will not apply to a non-U.S. holder whose holdings, direct and indirect, at all times during the applicable period, constituted 5% or less of our common stock, provided that our common stock was regularly traded on an established securities market. We believe that we are not currently, and we do not anticipate becoming in the future, a “United States real property holding corporation” for U.S. federal income tax purposes.

U.S. Federal Estate Tax

Common stock owned or treated as owned by an individual who is not a citizen or resident of the United States (as defined for U.S. federal estate tax purposes) at the time of death will be included in the individual’s gross estate for U.S. federal estate tax purposes, unless an applicable estate tax or other treaty provides otherwise and, therefore, may be subject to U.S. federal estate tax.

Information Reporting and Backup Withholding Tax

Dividends paid to you may be subject to information reporting and U.S. backup withholding. If you are a non-U.S. holder you will be exempt from this backup withholding tax if you properly provide a Form W-8BEN certifying that you are a non-U.S. holder or you otherwise meet documentary evidence requirements for establishing that you are a non-U.S. holder or otherwise establish an exemption.

The gross proceeds from the disposition of our common stock may be subject to information reporting and backup withholding. If you sell your common stock outside the United States through a non-U.S. office of a non-U.S. broker and the sales proceeds are paid to you outside the United States, then the U.S. backup withholding and information reporting requirements generally will not apply to that payment. However, U.S. information reporting, but not backup withholding, will generally apply to a payment of sales proceeds, even if that payment is made outside the United States, if you sell your common stock through a non-U.S. office of a broker that:

• is a U.S. person;

• derives 50% or more of its gross income in specific periods from the conduct of a trade or business in the United States;

• is a “controlled foreign corporation” for U.S. tax purposes; or

• is a foreign partnership, if at any time during its tax year:

i. one or more of its partners are U.S. persons who in the aggregate hold more than 50% of the income or capital interest in the partnership; or

ii. the foreign partnership is engaged in a U.S. trade or business,

unless the broker has documentary evidence in its files that you are a non-U.S. person and certain other conditions are met or you otherwise establish an exemption.

If you receive payments of the proceeds of a sale of our common stock to or through a U.S. office of a broker, the payment is subject to both U.S. backup withholding and information reporting unless you properly provide a Form W-8BEN certifying that you are a non-U.S. person or you otherwise establish an exemption.

You generally may obtain a refund of any amounts withheld under the backup withholding rules that exceed your U.S. federal income tax liability by timely filing a properly completed refund claim with the U.S. Internal Revenue Service.

109

UNDERWRITING

Lehman Brothers Inc., Credit Suisse Securities (USA) LLC and UBS Securities LLC are acting as joint book-running managers and representatives of the underwriters of this offering. Under the terms of an underwriting agreement, which will be filed as an exhibit to the registration statement, each of the underwriters named below has severally agreed to purchase from us and the selling shareholders the respective number of common stock shown opposite its name below:

Underwriters	Number of Shares
Lehman Brothers Inc.
Credit Suisse Securities (USA) LLC
UBS Securities LLC
Raymond James & Associates, Inc.
Total

The underwriting agreement provides that the underwriters’ obligation to purchase shares of common stock depends on the satisfaction of the conditions contained in the underwriting agreement including:

• the obligation to purchase all of the shares of common stock offered hereby (other than those shares of common stock covered by their option to purchase additional shares as described below), if any of the shares are purchased;

• the representations and warranties made by us and the selling stockholders to the underwriters are true;

• there is no material change in our financial condition or the financial markets; and

• we deliver customary closing documents to the underwriters.

Commissions and Expenses

The following table summarizes the underwriting discounts and commissions we and the selling stockholders will pay to the underwriters. These amounts are shown assuming both no exercise and full exercise of the underwriters’ option to purchase additional shares. The underwriting fee is the difference between the initial price to the public and the amount the underwriters pay to us and the selling stockholders for the shares.

	Per Share		Total
	No Exercise	Full Exercise	No Exercise	Full Exercise
Paid by us	$	$	$	$
Paid by selling stockholders	$	$	$	$

The representatives of the underwriters have advised us that the underwriters propose to offer the shares of common stock directly to the public initially at the public offering price on the cover of this prospectus and to selected dealers, which may include the underwriters, at such offering price less a selling concession not in excess of $             per share. After the initial offering, the representatives may change the offering price and other selling terms.

The expenses of the offering that are payable by us and the selling stockholders are estimated to be $            (excluding underwriting discounts and commissions). We have agreed to pay expenses incurred by the selling stockholders in connection with the offering, other than the underwriting discounts and commission.

Option to Purchase Additional Shares

We have granted the underwriters an option exercisable for 30 days after the date of this prospectus, to purchase, from time to time, in whole or in part, up to an aggregate of            shares at the public offering price

110

less underwriting discounts and commissions. This option may be exercised if the underwriters sell more than              shares in connection with this offering. To the extent that this option is exercised, each underwriter will be obligated, subject to certain conditions, to purchase its pro rata portion of these additional shares based on the underwriter’s underwriting commitment in the offering as indicated in the table at the beginning of this underwriting section.

Lock-Up Agreements

We, all of our directors and executive officers and the selling stockholders have agreed that, subject to certain exceptions, without the prior written consent of each of Lehman Brothers Inc., Credit Suisse Securities (USA) LLC and UBS Securities LLC, we and they will not directly or indirectly, (1) offer for sale, sell, pledge, or otherwise dispose of (or enter into any transaction or device that is designed to, or could be expected to, result in the disposition by any person at any time in the future of) any shares of common stock (including, without limitation, shares of common stock that may be deemed to be beneficially owned by us or them in accordance with the rules and regulations of the Securities and Exchange Commission and shares of common stock that may be issued upon exercise of any options or warrants) or securities convertible into or exercisable or exchangeable for common stock, (2) enter into any swap or other derivatives transaction that transfers to another, in whole or in part, any of the economic consequences of ownership of the common stock, (3) make any demand for or exercise any right or file or cause to be filed a registration statement, including any amendments thereto, with respect to the registration of any shares of common stock or securities convertible, exercisable or exchangeable into common stock or any of our other securities, or (4) publicly disclose the intention to do any of the foregoing for a period of 180 days after the date of this prospectus.

The 180-day restricted period described in the preceding paragraph will be extended if:

• during the last 17 days of the 180-day restricted period we issue an earnings release or material news or announce a material event relating to us; or

• prior to the expiration of the 180-day restricted period, we announce that we will release earnings results during the 16-day period beginning on the last day of the 180-day period,

in which case the restrictions described in the preceding paragraph will continue to apply until the expiration of the 18-day period beginning on the issuance of the earnings release or the announcement of the material news or material event.

Lehman Brothers Inc., Credit Suisse Securities (USA) LLC and UBS Securities LLC in their sole discretion, may release the common stock and other securities subject to the lock-up agreements described above in whole or in part at any time with or without notice. When determining whether or not to release common stock and other securities from lock-up agreements, Lehman Brothers Inc., Credit Suisse Securities (USA) LLC and UBS Securities LLC will consider, among other factors, the holder’s reasons for requesting the release, the number of shares of common stock and other securities for which the release is being requested and market conditions at the time. The underwriters have no present intent, agreements or understandings to release any of the lock-up agreements early.

Offering Price Determination

Prior to this offering, there has been no public market for our common stock. The initial public offering price will be negotiated between the representatives and us. In determining the initial public offering price of our common stock, the representatives will consider:

• the history and prospects for the industry in which we compete;

• our financial information;

• the ability of our management and our business potential and earning prospects;

111

• the prevailing securities markets at the time of this offering; and

• the recent market prices of, and the demand for, publicly traded shares of generally comparable companies.

Indemnification

We and the selling stockholders have agreed to indemnify the underwriters against certain liabilities, including liabilities under the Securities Act, and to contribute to payments that the underwriters may be required to make for these liabilities.

Directed Share Program

At our request, the underwriters have reserved for sale at the initial public offering price up to         % of the total shares of our common stock offered hereby (excluding any shares to be sold pursuant to the over-allotment option) for employees, directors and other persons associated with us who have expressed an interest in purchasing common stock in the offering. The number of shares available for sale to the general public in the offering will be reduced to the extent these persons purchase the reserved shares. Any reserved shares not so purchased will be offered by the underwriters to the general public on the same terms as the other shares offered hereby. The purchasers under the directed share program will be subject to lock-up provisions identical to those described above.

Stabilization, Short Positions and Penalty Bids

The representatives may engage in stabilizing transactions, short sales and purchases to cover positions created by short sales, and penalty bids or purchases for the purpose of pegging, fixing or maintaining the price of the common stock, in accordance with Regulation M under the Securities Exchange Act of 1934:

• Stabilizing transactions permit bids to purchase the underlying security so long as the stabilizing bids do not exceed a specified maximum.

• A short position involves a sale by the underwriters of shares in excess of the number of shares the underwriters are obligated to purchase in the offering, which creates the syndicate short position. This short position may be either a covered short position or a naked short position. In a covered short position, the number of shares involved in the sales made by the underwriters in excess of the number of shares they are obligated to purchase is not greater than the number of shares that they may purchase by exercising their option to purchase additional shares. In a naked short position, the number of shares involved is greater than the number of shares in their option to purchase additional shares. The underwriters may close out any short position by either exercising their option to purchase additional shares and/or purchasing shares in the open market. In determining the source of shares to close out the short position, the underwriters will consider, among other things, the price of shares available for purchase in the open market as compared to the price at which they may purchase shares through their option to purchase additional shares. A naked short position is more likely to be created if the underwriters are concerned that there could be downward pressure on the price of the shares in the open market after pricing that could adversely affect investors who purchase in the offering.

• Syndicate covering transactions involve purchases of the common stock in the open market after the distribution has been completed in order to cover syndicate short positions.

• Penalty bids permit the representatives to reclaim a selling concession from a syndicate member when the common stock originally sold by the syndicate member is purchased in a stabilizing or syndicate covering transaction to cover syndicate short positions.

These stabilizing transactions, syndicate covering transactions and penalty bids may have the effect of raising or maintaining the market price of our common stock or preventing or retarding a decline in the market

112

price of the common stock. As a result, the price of the common stock may be higher than the price that might otherwise exist in the open market. These transactions may be effected on The NASDAQ Stock Market LLC or otherwise and, if commenced, may be discontinued at any time.

Neither we nor any of the underwriters make any representation or prediction as to the direction or magnitude of any effect that the transactions described above may have on the price of the common stock. In addition, neither we nor any of the underwriters make representations that the representatives will engage in these stabilizing transactions or that any transaction, once commenced, will not be discontinued without notice.

Electronic Distribution

A prospectus in electronic format may be made available on the Internet sites or through other online services maintained by one or more of the underwriters and/or selling group members participating in this offering, or by their affiliates. In those cases, prospective investors may view offering terms online and, depending upon the particular underwriter or selling group member, prospective investors may be allowed to place orders online. The underwriters may agree with us to allocate a specific number of shares for sale to online brokerage account holders. Any such allocation for online distributions will be made by the representatives on the same basis as other allocations.

Other than the prospectus in electronic format, the information on any underwriter’s or selling group member’s web site and any information contained in any other web site maintained by an underwriter or selling group member is not part of the prospectus or the registration statement of which this prospectus forms a part, has not been approved and/or endorsed by us or any underwriter or selling group member in its capacity as underwriter or selling group member and should not be relied upon by investors.

Listing

We have applied to list our shares of common stock for quotation on The NASDAQ Stock Market LLC under the symbol “SOFS.”

Discretionary Sales

The underwriters have informed us that they do not intend to confirm sales to discretionary accounts that exceed 5% of the total number of shares offered by them.

Stamp Taxes

If you purchase shares of common stock offered in this prospectus, you may be required to pay stamp taxes and other charges under the laws and practices of the country of purchase, in addition to the offering price listed on the cover page of this prospectus.

Other Relationships; NASD Conduct Rules

Some of the underwriters and their affiliates have engaged in transactions with, and performed commercial and investment banking financial advisor or lending services for, us and our affiliates from time to time, for which they have received customary compensation and may do so in the future. Affiliates of Lehman Brothers Inc., Credit Suisse Securities (USA) LLC and UBS Securities LLC will serve as lenders under our proposed new credit facility. Affiliates of UBS Securities LLC are arrangers and agents under our current credit facility and receive fees customary for performing these services and interest on such. In addition, we expect to use a portion of the net proceeds from this offering to repay a portion of our credit facility, in which case lenders under such facility, including affiliates of some of the underwriters, will receive their proportionate share of the net proceeds used to repay such debt. Because of these relationships, this offering is being conducted in accordance with Rules

113

2720 and 2710(h) of the National Association of Securities Dealers, or NASD. This rule requires that the initial public offering price for our shares cannot be higher than the price recommended by a “qualified independent underwriter,” as defined by the NASD. Raymond James & Associates Inc. is serving as a qualified independent underwriter and will assume the customary responsibilities of acting as a qualified independent underwriter in pricing the offering and conducting due diligence. We have agreed to indemnify Raymond James & Associates Inc. against any liabilities arising in connection with its role as a qualified independent underwriter, including liabilities under the Securities Act.

Foreign Selling Restrictions

United Kingdom

This document is only being distributed to and is only directed at (i) persons who are outside the United Kingdom or (ii) to investment professionals falling within Article 19(5) of the Financial Services and Markets Act 2000 (Financial Promotion) Order 2005 (the “Order”) or (iii) high net worth entities, and other persons to whom it may lawfully be communicated, falling within Article 49(2)(a) to (e) of the Order (all such persons together being referred to as “relevant persons”). The shares of common stock are only available to, and any invitation, offer or agreement to subscribe, purchase or otherwise acquire such common stock will be engaged in only with, relevant persons. Any person who is not a relevant person should not act or rely on this document or any of its contents.

Each of the underwriters has represented and agreed that:

(a) it has only communicated or caused to be communicated and will only communicate or cause to be communicated an invitation or inducement to engage in investment activity (within the meaning of Section 21 of the Financial Services and Markets Act 2000 or FSMA) received by it in connection with the issue or sale of the shares in circumstances in which Section 21(1) of the FSMA does not apply to us, and

(b) it has complied with, and will comply with all applicable provisions of the FSMA with respect to anything done by it in relation to the shares in, from or otherwise involving the United Kingdom.

European Economic Area

To the extent that the offer of the common stock is made in any Member State of the European Economic Area that has implemented the Prospectus Directive before the date of publication of a prospectus in relation to the common stock which has been approved by the competent authority in the Member State in accordance with the Prospectus Directive (or, where appropriate, published in accordance with the Prospectus Directive and notified to the competent authority in the Member State in accordance with the Prospectus Directive), the offer (including any offer pursuant to this document) is only addressed to qualified investors in that Member State within the meaning of the Prospectus Directive or has been or will be made otherwise in circumstances that do not require us to publish a prospectus pursuant to the Prospectus Directive.

In relation to each Member State of the European Economic Area which has implemented the Prospectus Directive (each, a “Relevant Member State”), each underwriter has represented and agreed that with effect from and including the date on which the Prospectus Directive is implemented in that Relevant Member State (the “Relevant Implementation Date”) it has not made and will not make an offer of shares to the public in that Relevant Member State prior to the publication of a prospectus in relation to the shares which has been approved by the competent authority in that Relevant Member State or, where appropriate, approved in another Relevant Member State and notified to the competent authority in that Relevant Member State, all in accordance with the Prospectus Directive, except that it may, with effect from and including the Relevant Implementation Date, make an offer of shares to the public in that Relevant Member State at any time:

(a) to legal entities which are authorized or regulated to operate in the financial markets or, if not so authorized or regulated, whose corporate purpose is solely to invest in securities,

114

(b) to any legal entity which has two or more of (1) an average of at least 250 employees during the last financial year; (2) a total balance sheet of more than €43,000,000 and (3) an annual net turnover of more than €50,000,000, as shown in its last annual or consolidated accounts, or

(c) in any other circumstances which do not require the publication by us of a prospectus pursuant to Article 3 of the Prospectus Directive.

For the purposes of this provision, the expression an “offer of shares to the public” in relation to any shares in any Relevant Member State means the communication in any form and by any means of sufficient information on the terms of the offer and the shares to be offered so as to enable an investor to decide to purchase or subscribe the shares, as the same may be varied in that Member State by any measure implementing the Prospectus Directive in that Member State and the expression “Prospectus Directive” means Directive 2003/71/ EC and includes any relevant implementing measure in each Relevant Member State.

115

LEGAL MATTERS

The validity of the shares of common stock offered by this prospectus and certain other legal matters in connection with this offering will be passed upon for us by Vinson & Elkins L.L.P., Houston, Texas. Certain legal matters in connection with this offering will be passed on for certain of the selling stockholders by Latham & Watkins LLP, Washington, D.C. Certain legal matters in connection with this offering will be passed upon for the underwriters by Baker Botts L.L.P., Houston, Texas.

EXPERTS

The audited financial statements included in this prospectus, except as they relate to Bayou Tank Company and Subsidiary, BLR Construction Companies, L.L.C. and affiliate, BLR Construction Co., Inc. and affiliates, Abbeville Offshore Quarters, Inc. (report dated August 25, 2006), Trail Blazer Hot Shot, Inc., GL Trucking & Rental, Inc., Separation Services, Inc., Stallion Rentals, LP dba Trinity Valley Rentals, Envirotech, Inc., and Double-D Enterprises, Inc., have been audited by UHY LLP, independent registered public accountants as indicated in their reports with respect thereto, and, insofar as they relate to Bayou Tank Company and subsidiary, by Melton & Melton, L.L.P., independent certified public accountants as indicated in their report with respect thereto, and, insofar as they relate to BLR Construction Companies, L.L.C. and affiliate and BLR Construction Co., Inc. and affiliates, by Wright, Moore, DeHart, Dupuis & Hutchinson, LLC, independent public accountants as indicated in their reports with respect thereto, and, insofar as they relate to Abbeville Offshore Quarters, Inc. (report dated August 25, 2006), Trail Blazer Hot Shot, Inc., GL Trucking & Rental, Inc., Separation Services, Inc., Stallion Rentals, LP dba Trinity Valley Rentals, Envirotech, Inc., and Double-D Enterprises, Inc., by UHY Mann Frankfort Stein & Lipp CPAs, LLP, independent public accountants as indicated in their reports with respect thereto, whose reports thereon appear herein. Such financial statements have been so included in reliance on the reports of such independent accountants given on the authority of such firms as experts in auditing and accounting.

WHERE YOU CAN FIND MORE INFORMATION

We have filed with the SEC a registration statement on Form S-1 regarding the common stock. This prospectus does not contain all of the information found in the registration statement. For further information regarding us and the common stock offered in this prospectus, you may desire to review the full registration statement, including its exhibits. The registration statement, including the exhibits, may be inspected and copied at the public reference facilities maintained by the SEC at 100 F Street, N.E., Washington, D.C. 20549. Copies of this material can also be obtained upon written request from the Public Reference Section of the SEC at 100 F Street, N.E., Washington, D.C. 20549, at prescribed rates or from the SEC’s website on the Internet at http://www.sec.gov. Please call the SEC at 1-800-SEC-0330 for further information on its public reference room. In addition, our future public filings can also be inspected and copied at the offices of The NASDAQ Stock Market LLC, Reports Section, 1735 K Street, N.W., Washington, D.C. 2006.

You should rely only on the information contained in this prospectus. We have not, and the underwriters have not, authorized any other person to provide you with different information. If anyone provides you with different or inconsistent information, you should not rely on it. We are not, and the underwriters are not, making an offer to sell these securities in any jurisdiction where an offer or sale is not permitted. You should assume that the information appearing in this prospectus is accurate as of the date on the front cover of this prospectus only. Our business, financial condition, results of operations and prospects may have changed since that date.

Following the completion of this offering, we will file with or furnish to the SEC periodic reports and other information. These reports and other information may be inspected and copied at the public reference facilities maintained by the SEC or obtained from the SEC’s website as provided above. Our website on the Internet is

116

located at http://www.stallionoilfield.com, and we expect to make our periodic reports and other information filed with or furnished to the SEC available, free of charge, through our website, as soon as reasonably practicable after those reports and other information are electronically filed with or furnished to the SEC. Information on our website or any other website is not incorporated by reference into this prospectus and does not constitute a part of this prospectus. You may also request a copy of these filings at no cost, by writing or telephoning us at the following address: 410 Roberts Street, Houston, Texas 77003, Attention: Chief Financial Officer, (713) 528-5544.

We intend to furnish or make available to our stockholders annual reports containing our audited financial statements prepared in accordance with GAAP. We also intend to furnish or make available to our stockholders quarterly reports containing our unaudited interim financial information, including the information required by Form 10-Q, for the first three fiscal quarters of each fiscal year.

117

INDEX TO FINANCIAL STATEMENTS

	Page
Audited Balance Sheet—Stallion Oilfield Services, Inc.
Report of Independent Registered Public Accounting Firm	F-4
Balance Sheet as of April 12, 2007	F-5
Notes to Financial Statement	F-6
Audited Consolidated Financial Statements—Stallion Oilfield Services Ltd.
Report of Independent Registered Public Accounting Firm	F-7
Consolidated Balance Sheets as of December 31, 2005 and 2006	F-8
Consolidated Statements of Operations for the Years Ended December 31, 2004, 2005, and 2006	F-9
Consolidated Statements of Changes in Partners’ Capital for the Years Ended December 31, 2004, 2005 and 2006	F-10
Consolidated Statements of Cash Flows for the Years Ended December 31, 2004, 2005 and 2006	F-11
Notes to Consolidated Financial Statements for the Years Ended December 31, 2004, 2005 and 2006	F-12
Unaudited Consolidated Financial Statements—Stallion Oilfield Services Ltd.
Consolidated Balance Sheets as of December 31, 2006 and March 31, 2007	F-34
Consolidated Statements of Operation for the Three Months Ended March 31, 2006 and 2007	F-35
Consolidated Statements of Partners’ Capital for the Three Months Ended March 31, 2007	F-36
Consolidated Statements of Cash Flows for the Three Months Ended March 31, 2006 and 2007	F-37
Notes to Consolidated Financial Statements for the Three Months Ended March 31, 2006 and 2007	F-38
Audited Combined Financial Statements—Salty’s Group (Pending Acquisition)
Independent Auditors’ Report	F-50
Combined Balance Sheets as of December 31, 2005 and 2006	F-51
Combined Statements of Operations for the period from inception (August 3, 2005) through December 31, 2005 and the Year ended December 31, 2006	F-52
Combined Statements of Changes in Partners’ Capital (Deficit) for the period from inception (August 3, 2005) through December 31, 2005 and the Year ended December 31, 2006	F-53
Combined Statements of Cash Flows for the period from inception (August 3, 2005) through December 31, 2005 and the Year ended December 31, 2006	F-54
Notes to Combined Financial Statements for the Years Ended December 31, 2005 and 2006	F-55-59
Audited Consolidated Financial Statements—Bayou Tank Company and Subsidiary (Pending Acquisition)
Report of Independent Certified Public Accountants	F-60
Consolidated Balance Sheet as of December 31, 2006	F-61
Consolidated Statement of Operations and Accumulated Deficit for the Year ended December 31, 2006	F-62
Consolidated Statement of Cash Flows for the Year ended December 31, 2006	F-63
Notes to Consolidated Financial Statements for the Year ended December 31, 2006	F-64
Audited Combined Financial Statements—L.E.G. Rentals, Inc. and Fluid Processors, Inc. (Acquired Entity)
Independent Auditors’ Report	F-70
Combined Balance Sheet as of December 31, 2006	F-71
Combined Statement of Income for the Year ended December 31, 2006	F-72
Combined Statement of Changes in Stockholders’ Equity for the Year ended December 31, 2006	F-73
Combined Statement of Cash Flows for the Year ended December 31, 2006	F-74
Notes to Combined Financial Statements for the Year ended December 31, 2006	F-75
Combined Schedule of Operating Expenses	F-79
Audited Financial Statements—Abbeville Offshore Quarters, Inc. (Acquired Entity)
Independent Auditors’ Report	F-80
Balance Sheet as of July 31, 2006	F-81
Statement of Operations for the Seven Months Ended July 31, 2006	F-82
Statement of Stockholders’ Equity for the Seven Months Ended July 31, 2006	F-83
Statements of Cash Flows for the Seven Months Ended July 31, 2006	F-84
Notes to Financial Statements for the Seven Months Ended July 31, 2006	F-85
Supplementary Information	F-90
Schedule of Cost of Revenue and Operating Expenses for the Seven Months Ended July 31, 2006	F-91

F-1

	Page
Audited Financial Statements—Abbeville Offshore Quarters, Inc. (Acquired Entity)
Independent Auditors’ Report	F-92
Balance Sheet as of December 31, 2004 and 2005	F-93
Statement of Operations for the Years ended December 31, 2003, 2004 and 2005	F-94
Statement of Stockholders’ Equity for the Years ended December 31, 2003, 2004 and 2005	F-95
Statement of Cash flows for the Years ended December 31, 2003, 2004 and 2005	F-96
Notes to Financial Statements for the Years ended December 31, 2003, 2004 and 2005	F-97
Supplementary Information	F-102
Schedule of Cost of Revenue and Operating Expenses for the Years ended December 31, 2003, 2004 and 2005	F-103
Audited Combined Financial Statements—BLR Construction Companies, L.L.C. and Affiliate (Acquired Entity)
Independent Auditors’ Report	F-104
Combined Balance Sheet as of December 31, 2005	F-105
Combined Statement of Income for the Year ended December 31, 2005	F-106
Combined Statement of Changes in Members’ Equity for the Year ended December 31, 2005	F-107
Combined Statement of Cash Flows for the Year ended December 31, 2005	F-108
Notes to Combined Financial Statements for the Year ended December 31, 2005	F-109
Independent Auditors’ Report on Supplementary Information	F-116
Combined Schedule of General and Administrative Expenses	F-117
Audited Combined Financial Statements—BLR Construction Co., Inc. and Affiliates (Acquired Entity)
Independent Auditors’ Report	F-118
Combined Balance Sheet as of December 31, 2004	F-119
Combined Statement of Income for the Year ended December 31, 2004	F-120
Combined Statement of Retained Earnings for the Year ended December 31, 2004	F-121
Combined Statement of Cash Flows for the Year ended December 31, 2004	F-122
Notes to Combined Financial Statements for the Year ended December 31, 2004	F-123
Independent Auditors’ Report on Supplementary Information	F-130
Combined Schedule of General and Administrative Expenses	F-131
Audited Combined Financial Statements—BLR Construction Co., Inc. and Affiliates (Acquired Entity)
Independent Auditors’ Report	F-132
Combined Balance Sheet as of December 31, 2003	F-133
Combined Statement of Income for the Year ended December 31, 2003	F-134
Combined Statement of Retained Earnings for the Year ended December 31, 2003	F-135
Combined Statement of Cash Flows for the Year ended December 31, 2003	F-136
Notes to Combined Financial Statements for the Year ended December 31, 2003	F-137
Independent Auditors’ Report on Supplementary Information	F-145
Combined Schedule of General and Administrative Expenses	F-146
Audited Financial Statements—Trail Blazer Hot Shot, Inc. (Acquired Entity)
Independent Auditors’ Report	F-147
Balance Sheets as of December 31, 2004 and 2005	F-148
Statements of Operations for the Years ended December 31, 2004 and 2005	F-149
Statement of Changes in Stockholder’s Equity for the Years ended December 31, 2004 and 2005	F-150
Statements of Cash flows for the Years ended December 31, 2004 and 2005	F-151
Notes to Financial Statements for the Years ended December 31, 2004 and 2005	F-152
Supplemental Schedule	F-155
Schedule of Operating Expenses for the Years ended December 31, 2004 and 2005	F-156

F-2

	Page
Audited Financial Statements—GL Trucking & Rental, Inc. (Acquired Entity)
Independent Auditors’ Report	F-157
Balance Sheets as of December 31, 2004 and September 12, 2005	F-158
Statements of Operations for the Year ended December 31, 2004 and the Period January 1, 2005 through September 12, 2005	F-159
Statements of Changes in Stockholders’ Equity for the Year ended December 31, 2004 and the Period January 1, 2005 through September 12, 2005	F-160
Statements of Cash flows for the Year ended December 31, 2004 and the Period January 1, 2005 through September 12, 2005	F-161
Notes to Financial Statements for the Year ended December 31, 2004 and the Period January 1, 2005 through September 12, 2005	F-162
Supplemental Schedule	F-166
Schedule of Operating Expenses for the Year ended December 31, 2004 and the Period January 1, 2005 through September 12, 2005	F-167
Audited Financial Statements—Separation Services, Inc. (Acquired Entity)
Independent Auditors’ Report	F-168
Balance Sheet as of December 31, 2004	F-169
Statement of Operations for the Year ended December 31, 2004	F-170
Statement of Changes in Stockholder’s Equity for the Year ended December 31, 2004	F-171
Statement of Cash flows for the Year ended December 31, 2004	F-172
Notes to Financial Statements for the Year ended December 31, 2004	F-173
Supplemental Schedule	F-176
Schedule of Operating Expenses for the Year ended December 31, 2004	F-177
Audited Combined Financial Statements—Stallion Rentals, LP dba Trinity Valley Rentals (Acquired Entity)
Independent Auditors’ Report	F-178
Balance Sheet as of December 31, 2004	F-179
Combined Statement of Operations for the Year ended December 31, 2004	F-180
Combined Statement of Changes in Partners’ Deficit for the Year ended December 31, 2004	F-181
Combined Statement of Cash flows for the Year ended December 31, 2004	F-182
Notes to Combined Financial Statements for the Year ended December 31, 2004	F-183
Supplemental Schedule	F-188
Schedule of Combined Operating Expenses for the Year ended December 31, 2004	F-189
Audited Financial Statements—Envirotech, Inc. (Acquired Entity)
Independent Auditors’ Report	F-190
Balance Sheet as of December 31, 2004	F-191
Statement of Operations for the Year ended December 31, 2004	F-192
Statement of Changes in Stockholders’ Equity for the Year ended December 31, 2004	F-193
Statement of Cash flows for the Year ended December 31, 2004	F-194
Notes to Financial Statements for the Year ended December 31, 2004	F-195
Supplemental Schedule	F-199
Schedule of Operating Expenses for the Year ended December 31, 2004	F-200
Audited Financial Statements—Double-D Enterprises, Inc. (Acquired Entity)
Independent Auditors’ Report	F-201
Balance Sheet as of December 31, 2004	F-202
Statement of Operations for the Year ended December 31, 2004	F-203
Statement of Changes in Stockholder’s Equity for the Year ended December 31, 2004	F-204
Statement of Cash flows for the Year ended December 31, 2004	F-205
Notes to Financial Statements for the Year ended December 31, 2004	F-206
Supplemental Schedule	F-210
Schedule of Operating Expenses for the Year ended December 31, 2004	F-211

F-3

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Board of Directors

Stallion Oilfield Services, Inc.

We have audited the accompanying balance sheet of Stallion Oilfield Services, Inc. (“Stallion”) as of April 12, 2007. This financial statement is the responsibility of Stallion’s management. Our responsibility is to express an opinion on this financial statement 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 the financial statement is free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statement. 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 audit provides a reasonable basis for our opinion.

In our opinion, the financial statement referred to above presents fairly, in all material respects, the financial position of Stallion as of April 12, 2007 in conformity with accounting principles generally accepted in the United States of America.

/s/    UHY LLP      

UHY LLP

Houston, Texas

April 17, 2007

F-4

STALLION OILFIELD SERVICES, INC.

BALANCE SHEET

	April 12, 2007
	(in thousands)
Assets
Current assets
Cash and cash equivalents	$	1
Total current assets		1
Total assets	$	1
Liabilities and stockholders’ equity
Liabilities	$	—
Commitments and contingencies		—
Stockholders’ equity
Common stock, voting, par value $.01 per share, 1,000 shares authorized, 1,000 shares issued		—
Additional paid-in capital		1
Retained earnings		—
Total stockholders’ equity		1
Total liabilities and stockholders’ equity	$	1

The accompanying notes are an integral part of this balance sheet

F-5

STALLION OILFIELD SERVICES, INC.

NOTES TO FINANCIAL STATEMENT

1. Organization

Stallion Oilfield Services, Inc. (“Stallion”) was formed as a Delaware corporation on June 27, 2006. The corporation was formed for the purpose of becoming a holding company for Stallion Oilfield Services Ltd. (“Stallion Oilfield”) in connection with a proposed initial public offering of Stallion’s common stock. Stallion and the partners of Stallion Oilfield have entered into a contribution agreement which, if consummated, would result in the partners of Stallion Oilfield contributing their respective partnership interests to Stallion in exchange for shares of common stock of Stallion.

Stallion Oilfield provides a wide range of wellsite support services and construction and logistics services to drilling contractors and oil and gas exploration and production companies, including workforce accommodation units, surface equipment rental, logistics services, solids control services and equipment, communications infrastructure and rig relocation and oilfield heavy hauling services in the drilling regions in the United States, including the Gulf Coast, South Texas, ArkLaTex, North Texas, the Mid-Continent, Permian Basin, Rocky Mountain Regions, offshore Texas and Louisiana Gulf Coast and in international waters. Stallion Oilfield is headquartered in Houston, Texas.

2. Summary of Significant Accounting Policies

Basis of Presentation

The balance sheet is prepared in accordance with accounting principles generally accepted in the United States of America (GAAP).

Cash and Cash Equivalents

All cash equivalents are stated at cost, which approximates market. The company considers all highly liquid investments purchased with a maturity of three months or less to be cash equivalents.

F-6

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Board of Directors and Partners

of Stallion Oilfield Services Ltd. and subsidiaries:

We have audited the accompanying consolidated balance sheets of Stallion Oilfield Services Ltd. and subsidiaries as of December 31, 2005 and 2006, and the related consolidated statements of operations, changes in partners’ capital and cash flows for each of the three years ended December 31, 2006. These consolidated financial statements are the responsibility of the Partnership’s management. Our responsibility is to express an opinion on these consolidated 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 audits to obtain reasonable assurance about whether the consolidated financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the consolidated financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall consolidated 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 consolidated financial position of Stallion Oilfield Services Ltd. and subsidiaries as of December 31, 2005 and 2006, and the consolidated results of their operations and their cash flows for each of the three years ended December 31, 2006, in conformity with accounting principles generally accepted in the United States of America.

/s/    UHY LLP      

UHY LLP

Houston, Texas

March 30, 2007

F-7

STALLION OILFIELD SERVICES LTD. AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS

	December 31,
	2005		2006
	(in thousands)
Assets
Current assets
Cash and cash equivalents	$	982	$	4,100
Accounts receivable, net		22,348		67,777
Costs and estimated earnings in excess of billings on uncompleted contracts		—		1,741
Prepaid expenses		430		7,437
Deferred tax assets, net		259		29
Total current assets		24,019		81,084
Property and equipment, net		74,583		220,777
Notes receivable—officers		—		10,000
Goodwill		19,125		110,410
Intangible and other assets, net		5,409		24,636
Total assets	$	123,136	$	446,907
Liabilities and partners’ capital
Current liabilities
Accounts payable—trade	$	4,244	$	12,462
Distribution payable		786		1,800
Accrued expenses		5,425		11,342
Current portion of long-term debt and notes payable		11,933		1,913
Current portion of capital leases		393		127
Total current liabilities		22,781		27,644
Long-term debt and notes payable, net of current portion		55,101		255,316
Obligations under capital leases, net of current portion		368		183
Deferred income tax liabilities		1,289		10,230
Total liabilities		79,539		293,373
Commitments and contingencies		—		—
Partners’ capital		43,597		153,534
Total liabilities and partners’ capital	$	123,136	$	446,907

See notes to consolidated financial statements.

F-8

STALLION OILFIELD SERVICES LTD. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF OPERATIONS

	Years Ended December 31,
	2004			2005			2006
	(in thousands)
Service revenue	$	15,452		$	73,126		$	240,410
Operating expenses:
Cost of services		8,695			42,281			116,519
Selling, general and administrative expenses		3,745			9,883			43,359
Depreciation and amortization		1,924			7,798			30,068
Loss on disposal of property and equipment		92			499			920
Total operating expenses		14,456			60,461			190,866
Income from operations		996			12,665			49,544
Other income (expense):
Interest expense		(917	)		(4,565	)		(18,919	)
Other		—			(66	)		71
Total other income (expense)		(917	)		(4,631	)		(18,848	)
Income before income taxes		79			8,034			30,696
Provision for income taxes		—			598			4,927
Net income	$	79		$	7,436		$	25,769

See notes to consolidated financial statements.

F-9

STALLION OILFIELD SERVICES LTD. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CHANGES IN PARTNERS’ CAPITAL

	General Partner		Limited Partner			Total
Balances as of January 1, 2004	$	34	$	3,498		$	3,532
Net income		—		79			79
Balances as of December 31, 2004		34		3,577			3,611
Contributions, net of issuance costs		—		32,406			32,406
Distributions		—		(786	)		(786	)
Conversion of notes payable into limited partner interest		—		500			500
Limited partner interest issued in connection with note payable		—		430			430
Net income		1		7,435			7,436
Balances as of December 31, 2005		35		43,562			43,597
Contributions, net of issuance costs		—		63,282			63,282
Conversion of notes payable into limited partner interest		—		250			250
Limited partner interest issued in connection with acquisition		—		22,950			22,950
Distributions		—		(2,314	)		(2,314	)
Net income		3		25,766			25,769
Balances as of December 31, 2006	$	38	$	153,496		$	153,534

See notes to consolidated financial statements.

F-10

STALLION OILFIELD SERVICES LTD. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS

	Years Ended December 31,
	2004			2005			2006
	(in thousands)
Cash flows from operating activities
Net income	$	79		$	7,436		$	25,769
Adjustments to reconcile net income to net cash provided by operating activities
Depreciation and amortization		1,924			7,798			30,068
Amortization of debt issuance costs		—			423			2,069
Amortization of discount		—			72			358
Loss on disposal of property and equipment		92			499			920
Deferred tax expense (benefit)		—			(73	)		1,776
Bad debt expense		70			465			683
Other		—			—			19
Changes in operating assets and liabilities, net of acquired assets and liabilities
Accounts receivable		(1,947	)		(13,709	)		(22,825	)
Costs and estimated earnings in excess of billings on uncompleted contracts		—			—			2,015
Other assets		(17	)		(209	)		(5,498	)
Accounts payable		1,079			1,368			2,673
Accrued expenses		454			3,017			3,097
Net cash provided by operating activities		1,734			7,087			41,124
Cash flows from investing activities
Cash paid for acquisitions, net of cash received		(1,158	)		(47,191	)		(178,045	)
Cash paid for acquisition costs		(118	)		(433	)		(1,399	)
Cash paid for property and equipment		(5,961	)		(35,951	)		(92,029	)
Proceeds received from disposal of property and equipment		95			113			1,309
Notes receivable—officers		—			—			(10,000	)
Net cash used in investing activities		(7,142	)		(83,462	)		(280,164	)
Cash flows from financing activities
Partners’ capital contributions, net		—			32,406			63,282
Distribution to partners		—			—			(514	)
Proceeds from partner note		3,975			—			—
Proceeds from long-term debt		5,500			64,133			216,000
Payments of long-term debt		(5,198	)		(21,454	)		(68,095	)
Proceeds from line of credit		1,900			23,200			44,500
Payments on line of credit		(785	)		(19,000	)		(6,100	)
Payments for debt issuance costs		(96	)		(1,545	)		(6,464	)
Payments for capital leases		(250	)		(433	)		(451	)
Net cash provided by financing activities		5,046			77,307			242,158
Net increase (decrease) in cash		(362	)		932			3,118
Cash at beginning of year		412			50			982
Cash at end of year	$	50		$	982		$	4,100

See notes to consolidated financial statements.

F-11

STALLION OILFIELD SERVICES LTD. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

DECEMBER 31, 2005 AND 2006

1. Significant Accounting Policies

Nature of Business: Stallion Oilfield Services Ltd. and subsidiaries (collectively the “Partnership”, “Stallion” or “We”) provide a wide range of wellsite support services and construction and logistics services to drilling contractors and oil and gas exploration and production companies, including workforce accommodation units, surface equipment rental, logistics services, solids control services and equipment, communications infrastructure and rig relocation and oilfield heavy hauling services in the drilling regions in the United States, including the Gulf Coast, South Texas, ArkLaTex, North Texas, the Mid-Continent, Permian Basin, Rocky Mountain Regions, offshore Texas and Louisiana Gulf Coast and in international waters. Stallion is headquartered in Houston, Texas. Stallion is a limited partnership with Stallion Oilfield Holdings, Ltd. as the 99.99 percent limited partner and Stallion Interests, LLC as the .01 percent general partner of the Partnership.

Principles of Consolidation: The consolidated financial statements include the financial statements of Stallion Oilfield Services Ltd. and its wholly owned subsidiaries. Stallion has no interest in any other organization, entity, partnership, or contract that could require any evaluation under FASB Interpretation No. 46 or Accounting Research Bulletin No. 51. All significant inter-company balances and transactions have been eliminated in consolidation.

Cash and Cash Equivalents: The Partnership considers all investments with original maturities of three months or less when purchased to be cash equivalents.

Fair Value of Financial Instruments: The carrying value amount of cash, accounts receivable, accounts payable and accrued liabilities approximate fair value due to the short maturity of these instruments. The carrying amount of all debt approximates fair value because Stallion’s current borrowing rate is based on a variable market rate of interest. The Partnership has interest rate caps on LIBOR at 6.15 percent with notional amounts of approximately $82.5 million. The cost of the caps of approximately $183,000 is amortized as interest expense over the life of the contract, which approximates the interest method.

Accounts Receivable: The Partnership extends credit to its customers based on an evaluation of the customer’s financial condition and generally collateral is not required nor is interest charged on outstanding balances. Outstanding accounts receivable are routinely evaluated and an allowance is set up when accounts are deemed uncollectible. The allowance for doubtful accounts is based on an analysis of historical collection activity and specific identification of overdue accounts. Factors that may affect this estimate include (1) changes in the financial position of significant customers and (2) a decline in oil and natural gas prices that could affect the entire customer base.

Unbilled Accounts Receivable: Unbilled receivables represent revenue earned for rental agreements and certain construction contracts in the current period but not yet billed to the customer.

Property and Equipment: Property and equipment are stated at cost. Depreciation is provided on the straight line method over the estimated useful lives of the related assets. All expenditures for major renewals and betterments are capitalized. Expenditures for maintenance and repairs are charged to expense as incurred. Leasehold improvements are amortized over the shorter of the life of the lease or the life of the improvement.

Deferred Debt Costs: Certain costs such as, lender’s fees and related attorney’s fees incurred in connection with obtaining financing are capitalized. These costs are amortized to interest expense using the straight line method, which approximates the effective interest method over the terms of the related debt.

F-12

STALLION OILFIELD SERVICES LTD. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

DECEMBER 31, 2005 AND 2006

Intangible Assets: For financial statement purposes, identifiable intangible assets with a defined life are being amortized using the straight-line method over the useful lives of the assets. Identifiable intangible assets with an indefinite life are not amortized in accordance with Statement of Financial Accounting Standards No. 142, “Goodwill and Other Intangible Assets.” These assets are required to be tested at least annually for impairment.

Goodwill: Goodwill represents the excess of costs over the fair value of net assets of acquired businesses. Goodwill acquired in a business combination is not amortized, but instead tested for impairment at least annually in the fourth quarter. Under this goodwill impairment test, if the fair value of a reporting unit does not exceed its carrying value, the excess of fair value of the reporting unit over the fair value of its net assets is considered to be the implied fair value of goodwill. If the carrying value of goodwill exceeds its implied fair value, the difference is recognized as an impairment loss. Goodwill was evaluated for impairment as of December 31, 2005 and 2006. The Partnership determined that goodwill was not impaired, and thus no impairment charge has been recorded related to goodwill for the years ended December 31, 2005 and 2006.

Impairment: In accordance with Statement of Financial Accounting Standards No. 144, “Accounting for the Impairment or Disposal of Long-Lived Assets”, long-lived assets, such as property, plant and equipment, and purchased intangibles subject to amortization, are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. Recoverability of assets to be held and used in operations is measured by a comparison of the carrying amount of an asset to estimated undiscounted cash flows expected to be generated by the asset. If the carrying amount of an asset exceeds its estimated future cash flows, an impairment charge is recognized in the amount by which the carrying amount of the asset exceeds the fair value of the asset. Assets to be disposed of would be separately presented in the balance sheet and reported at the lower of their carrying amount or their fair value less anticipated cost to sell, and they would no longer be depreciated. No impairment losses have been recorded through December 31, 2006.

Self-Insured Risk Accruals: The Partnership is partially self-insured for certain losses relating to workers’ compensation and general liability insurance claims. The Partnership maintains accruals to cover the self-insured risks, which are based on third-party data and historical claims history.

Federal Income Taxes: The Partnership is not subject to federal or state income taxes on a consolidated basis due to its partnership structure; however, certain of its subsidiary companies are taxable corporations and are subject to income tax. The Partnership accounts for income taxes based upon Statement of Financial Accounting Standards No. 109, “Accounting for Income Taxes” (“SFAS No. 109”) for its subsidiaries which are subject to income taxes. Under SFAS 109, deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases. Deferred tax assets and liabilities are measured using statutory rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. A valuation allowance for deferred tax assets is recognized when it is more likely than not that the benefit of deferred tax assets will not be realized.

Revenue Recognition: The Partnership’s revenue recognition policies are as follows:

Rental and Service Revenue

The Partnership recognizes revenue when it is realized and earned. The Partnership considers revenue to be realized and earned when services have been provided to the customer, the product has been delivered, the sales

F-13

STALLION OILFIELD SERVICES LTD. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

DECEMBER 31, 2005 AND 2006

price has been fixed or determinable and collection is reasonably assured. Revenue from rental agreements is recognized over the rental period and revenue from service agreements is recognized when services have been rendered. Generally services are provided over a relatively short time.

Construction Revenue

Certain of our operations recognize revenue related to wellsite construction and offshore workforce accommodations unit construction using the percentage-of-completion method determined by the ratio of costs incurred to total estimated costs at completion. All known or anticipated losses on contracts are recognized in full when such losses become apparent. Contracts typically range from two to six months in duration.

Mobilization and Demobilization Revenue

In the Partnership’s wellsite support services segment, the Partnership charges its customers a rig-up/rig-down charge in connection with the initial setup or takedown of workforce accommodation units and for the connection or disconnection of these units to or from water, utilities, and sewer systems. Revenue related to rig-up/rig-down charges is recognized upon completion of the service.

Concentration of Risk: During 2005 and 2006, the Partnership had cash in excess of federally insured limits deposited in a bank. The Partnership monitors the financial condition of the bank and has experienced no losses associated with its accounts.

The Partnership’s customer base consists primarily of oil and natural gas exploration and production companies and drilling contractors. The Partnership performs ongoing evaluations of its customers but generally does not require collateral on its trade receivables. During the year ended December 31, 2004, sales to one customer accounted for approximately 12 percent of total sales. In 2005, no customer accounted for more than 10 percent of total sales. During the year ended December 31, 2006, one customer accounted for 10.5 percent of total sales. The balance due from this customer as of December 31, 2006 was approximately $6.6 million.

Partnership Allocations: Income or loss is allocated to the partners in accordance with the Partnership Agreement. In December 2006, Stallion Oilfield Holdings, our parent, entered into a Contribution Agreement with Carlyle/Riverstone wherein Carlyle/Riverstone agreed to invest up to $125 million in Class A partnership units. This investment arrangement continues for a two year period and purchases of Class A units are subject to various conditions including approval of the board of the general partner of Stallion Oilfield Holdings. As of December 31, 2006, Carlyle/Riverstone has funded $45 million under the Contribution Agreement.

Stock-based Compensation: We have adopted the provisions of SFAS No. 123R which requires that we measure the cost of employee services received in exchange for an award of equity instruments based on the fair value of those instruments on their grant date. The fair value of these instruments must be re-evaluated at each reporting date through the settlement date with changes in fair value recognized as compensation expense of the period. GAAP permits the use of various models to determine the fair value of stock options and the variables used for the model are subjective. We have estimated the value of stock grants in accordance with conventional valuation techniques including but not limited to net book value and comparable company multiples of EBITDA as applicable. The use of different assumptions or a different model may have a material impact on our results of operations and related disclosures. Historically, we granted shares of restricted stock in Stallion Oilfield Holdings, Ltd. to employees. We have not granted stock options to employees. In the year ended December 31, 2006, compensation expense from stock grants was insignificant based on management’s valuation at the time of grant.

F-14

STALLION OILFIELD SERVICES LTD. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

DECEMBER 31, 2005 AND 2006

Use of Estimates: The preparation of consolidated financial statements in conformity with accounting principles generally accepted in the United States of America (“GAAP”) requires management to make certain estimates and assumptions. These estimates and assumptions affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities at the balance sheet date and the amounts of revenue and expenses recognized during the reporting period. Areas where critical accounting estimates are made by management include:

• Depreciation and amortization of property and equipment and intangible assets,

• Impairment of property and equipment and goodwill,

• Allowance for doubtful accounts,

• Revenue recognition on uncompleted contracts,

• Litigation and self-insured risk reserves,

• Fair value of assets acquired and liabilities assumed, and

• Income taxes.

The Partnership analyzes its estimates based on historical experience and various other assumptions that it believes to be reasonable under the circumstances. Under different assumptions or conditions, the actual results could differ, possibly materially from those previously estimated. Many of the conditions impacting these assumptions are outside of Stallion’s control.

Reclassifications: Certain reclassifications have been made to the prior years’ financial statements to conform to the current year presentation. These reclassifications had no effect on previously reported results of operations or partners’ capital.

2. Acquisitions

The Partnership began a strategic acquisition and expansion program early in 2003. Each of its acquisitions has been included in the results of operations from their respective dates of acquisition.

F-15

STALLION OILFIELD SERVICES LTD. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

DECEMBER 31, 2005 AND 2006

In 2004, 2005, and 2006, Stallion acquired either substantially all of the assets or all of the outstanding capital stock of the following businesses, each of which was accounted for using the purchase method of accounting (in thousands):

	Closing Date	Total Cash Paid (net of cash acquired)
Rebel Testers, Inc.	February 1, 2004	$	1,158
Total 2004		$	1,158
Stallion Rentals, L.P.	January 31, 2005	$	2,925
Double-D Enterprises, Inc.	January 31, 2005		4,686
Envirotech, Inc.	January 31, 2005		11,208
Separation Services, Inc.	January 31, 2005		7,356
Bob’s Equipment Rental, Inc.	June 30, 2005		9,312
GL Trucking & Rental, Inc.	September 12, 2005		11,704
Total 2005		$	47,191
Trail Blazer Hot Shot, Inc	January 1, 2006	$	13,735
Pioneer RSC, LP	February 15, 2006		2,817
BLR Construction Companies, L.L.C	March 1, 2006		46,124
Rental One, LLC	March 1, 2006		3,781
Oilfield Heavy Haulers, LLC	March 20, 2006		10,710
Bowie Dozer Services, Inc	May 19, 2006		10,952
R&G Crane & Rigging & Trucking, LLC	July 21, 2006		5,032
Abbeville Offshore Quarters, Inc	August 1, 2006		46,118
G&N Rentals	September 26, 2006		6,400
Erlandson Construction Company	November 1, 2006		5,482
Norton Transport, Inc	December 15, 2006		26,894
Total 2006		$	178,045

F-16

STALLION OILFIELD SERVICES LTD. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

DECEMBER 31, 2005 AND 2006

The following table summarizes the estimated fair value of the assets acquired and liabilities assumed at the dates of acquisition of the businesses acquired in 2004, 2005 and 2006 (in thousands):

	2004		2005		2006		Total
Assets acquired:
Cash	$	—	$	568	$	1,456	$	2,024
Accounts receivable, net		—		5,222		26,901		32,123
Other current assets		—		478		1,506		1,984
Deferred tax assets		—		—		164		164
Property and equipment		1,132		32,139		82,811		116,082
Goodwill and other intangibles		26		16,720		108,554		125,300
Total assets acquired		1,158		55,127		221,392		277,677
Liabilities assumed:
Accounts payable		—		1,306		5,545		6,851
Accrued expenses		—		768		1,856		2,624
Deferred tax liability		—		1,489		7,394		8,883
Notes payable		—		169		—		169
Total liabilities assumed		—		3,732		14,795		18,527
Net assets acquired	$	1,158	$	51,395	$	206,597	$	259,150

2004 Acquisitions

In 2004, the Partnership acquired certain equipment from Rebel Testers, Inc. (“Rebel”) for total cash consideration of $1.2 million. Rebel was engaged in the business of providing workforce accommodations, sewer and water systems, trash containers and other related equipment to the drilling industry primarily in Brookhaven, Mississippi. The Partnership acquired Rebel to increase wellsite support services operations in Texas by redeploying the acquired assets.

2005 Acquisitions

In January 2005, the Partnership acquired the net assets of Stallion Rentals, L.P. formerly known as Trinity Valley Rentals, Inc. (“Stallion Rentals”), which was engaged in the rental of forklifts, manlifts, generators, light towers and other surface equipment to the drilling industry. Stallion Rentals was acquired for a total purchase price of $3.4 million, consisting of $2.9 million in cash and $500,000 in convertible notes payable to seller. The seller notes are convertible into Class C units of Stallion Holdings. In April 2005, the convertible notes payable to seller were converted into 500,000 Class C units of Stallion Holdings.

In January 2005, the Partnership acquired the net assets of Double-D Enterprises, Inc. (“Double-D”) a company engaged in the rental of loaders, manlifts, mud vacs and other related equipment to the drilling industry, specifically located in the Rocky Mountain region. Double-D was acquired for a total purchase price of $5.1 million, consisting of $4.7 million in cash and $450,000 in a convertible note payable to seller. The convertible note payable to seller was paid in full in January 2006.

In January 2005, the Partnership acquired the net assets of Envirotech, Inc. (“Envirotech”), a company engaged in the rental of workforce accommodations, water systems, sewer systems and other related equipment

F-17

STALLION OILFIELD SERVICES LTD. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

DECEMBER 31, 2005 AND 2006

to the drilling industry, specifically in the Rocky Mountain region. Envirotech was acquired for a total purchase price of $11.7 million, consisting of $11.2 million in cash and $525,000 in convertible notes payable to seller. This note was paid in full in January 2006.

In January 2005, the Partnership purchased the stock of Separation Services, Inc. (“SSI”), a company engaged in the rental of solids control equipment to oil and gas companies and operators at drilling locations in order to separate drill cuttings from the drilling fluids. SSI was acquired for a total purchase price of $9.1 million, consisting of $7.4 million in cash net of cash acquired of approximately $568,000, $660,000 in deferred compensation, approximately 352,000 Class D units of Stallion Holdings and a $500,000 convertible note payable to seller.

In June 2005, the Partnership acquired the assets of Bob’s Equipment Rentals, Inc. (“Bob’s”) a company engaged in the rental of workforce accommodations, water systems, sewer systems and other related equipment to the drilling industry, specifically in the Rocky Mountain region for total cash consideration of $9.3 million.

In September 2005, the Partnership acquired the assets of GL Trucking & Rental, Inc. (“GL”), located in Williston, North Dakota, for total consideration of $12.7 million, consisting of $11.7 million in cash and a $1.0 million note payable to seller. GL is a leading provider of integrated drilling support services for the Williston Basin and surrounding areas. GL assets included over 100 workforce accommodation units, significant oilfield equipment hauling capacity, loaders and equipment setting cranes.

The following table summarizes the estimated fair value of the assets acquired and liabilities assumed at the dates of acquisition of the businesses acquired all of which were included in our wellsite support services segment in 2005 (in thousands):

	Double-D and Envirotech		SSI		Bob’s		GL		Stallion Rentals		Total 2005
Assets acquired:
Cash	$	—	$	568	$	—	$	—	$	—	$	568
Accounts receivable, net		1,559		2,644		—		—		1,019		5,222
Other current assets		—		424		—		—		54		478
Property and equipment		9,347		2,075		9,312		8,824		2,581		32,139
Goodwill and other intangibles		6,103		6,225		—		3,880		512		16,720
Total assets acquired		17,009		11,936		9,312		12,704		4,166		55,127
Liabilities assumed:
Accounts payable		—		684		—		—		622		1,306
Accrued expenses		—		650		—		—		118		768
Deferred tax liability		—		1,489		—		—		—		1,489
Notes payable		140		29		—		—		—		169
Total liabilities assumed		140		2,852		—		—		740		3,732
Net assets acquired	$	16,869	$	9,084	$	9,312	$	12,704	$	3,426	$	51,395

2006 Acquisitions

In January 2006, the Partnership acquired certain of the assets of Trail Blazer Hot Shot, Inc. (“TB”) for total consideration of approximately $14.6 million, which consisted of approximately $13.7 million in cash and

F-18

STALLION OILFIELD SERVICES LTD. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

DECEMBER 31, 2005 AND 2006

$900,000 in a note payable to the seller. TB is a provider of surface equipment rental services for the major Oklahoma basins and surrounding areas. Assets include over 120 forklifts and man lifts, 38 generators, and a variety of other surface rental equipment such as pumps and heavy-duty service trucks.

On February 15, 2006, the Partnership acquired Pioneer RSC, LP (“Pioneer”) for approximately $2.8 million in cash consideration. Headquartered in Rayne, Louisiana, Pioneer provides oilfield and industrial services such as removal of drilling waste, water treatment and solids control rentals, including “closed loop” systems. Pioneer owns a fleet of 201 units of equipment including centrifuges, shale shakers, desilters, desanders, injection systems, dozers, backhoes and excavators, as well as automobiles and pickup trucks.

In March 2006, the Partnership acquired 100 percent of the membership interest of the BLR Construction Companies, L.L.C. (“BLR”) for approximately $48.5 million in total consideration, consisting of $46.5 million in cash and $2.0 million in notes payable to the sellers. BLR is a full-service contractor serving the oil, gas and petro-chemical industry since 1990. BLR provides customers with experienced personnel and equipment, specializing in location construction, pipeline construction, marine services, production facility construction, crew services, heavy equipment and trucking services, solids control, remediation services, plugging and abandonment, and weed and vegetation control, through its inventory of bulldozers, mats, tools and other construction-related equipment. BLR also provides inland marine wellsite construction services through a fleet of crew boats, tugboats and barges.

Also in March 2006, the Partnership acquired the assets of Oilfield Heavy Haulers, LLC (“OHH”) for total consideration of approximately $11.2 million consisting of $10.7 million in cash and a note payable to seller of $500,000. OHH provides heavy-duty drilling rig trucking and hauling services to the oilfield. OHH’s assets include a fleet of cranes, rig-hauling trucks, trailers and loaders specifically designed for the oil and gas industry.

The Partnership acquired the assets of Rental One, LLC (“RO”) in March 2006 for a total purchase of $4.0 million, consisting of $3.8 million in cash and $240,000 in a note payable to seller. RO provides traditional surface equipment rental through a fleet of 15 rig housing units, 26 water systems/tanks, four generators, 15 pumps and 19 units of other types of surface and heavy equipment for rent.

On May 19, 2006 BLR acquired the assets of Bowie Dozer Services, Inc. (“Bowie”) located in Bowie, Texas for a purchase price of $11.5 million. The purchase price consisted of $11.0 million in cash and $500,000 in a note payable. The Bowie acquisition expanded our wellsite construction service capacity in the Fort Worth Basin.

On July 21, 2006, Stallion Heavy Haulers, LP (“SHH”) acquired the assets of R&G Crane & Rigging & Trucking, LLC (“R&G”) expanding our rig trucking and hauling services capacity in East Texas. R&G provides heavy-duty drilling rig trucking and hauling services to the oilfield. R&G’s assets include a fleet of cranes, rig-hauling trucks, trailers and loaders specifically designed for the oil & gas industry.

On August 1, 2006, the Partnership purchased all of the outstanding capital stock of Abbeville Offshore Quarters, Inc., a Louisiana corporation (“AOQ”). AOQ provides workforce accommodations, sewage treatment units, water tanks, generators and other rental support equipment for use in the offshore Gulf Coast oil and natural gas industry. The purchase price consisted of $46.1 million in cash ($1.5 million of which is held in escrow) and 6,943,000 Class C units representing limited partnership interests of Stallion Holdings for a total consideration of $70.2 million. The acquisition of AOQ augments the Partnership’s workforce accommodations and surface equipment rental service lines.

F-19

STALLION OILFIELD SERVICES LTD. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

DECEMBER 31, 2005 AND 2006

On September 26, 2006, Stallion Rockies, Ltd. (SR”) acquired the assets of G&N Rentals (“G&N”). G&N provides workforce accommodations, sewage treatment units, water tanks, generators and other rental support equipment. The acquisition of G&N expanded our workforce accommodations and surface equipment rental service line in the Rocky Mountain region.

On November 1, 2006, BLR completed the acquisition of the assets of Erlandson Construction Company (“Erlandson”) located in Gainesville, Texas for a purchase price of $5.5 million subject to adjustments in accordance with the purchase agreement. This acquisition expanded our wellsite construction service capacity in the Fort Worth Basin. Erlandson also operates a rock quarry in Gainesville, TX.

On December 15, 2006 Stallion Heavy Haulers, LP acquired substantially all of the operating assets of Norton Transport, Inc. (“Norton”), a Texas corporation, for approximately $26.9 million. Norton provides heavy-duty drilling rig trucking and hauling services to the oilfield. Norton’s assets include a fleet of rig-hauling trucks trailer and loaders specifically designed for the oil and gas industry.

The following tables summarize the estimated fair value of the assets acquired and liabilities assumed at the dates of acquisition of the businesses acquired in 2006 by segment (in thousands):

	TB		Pioneer		RO		AOQ		G&N		Total Wellsite Support Services Segment
Assets acquired:
Cash	$	—	$	—	$	—	$	1,128	$	—	$	1,128
Accounts receivable, net		—		—		—		11,069		—		11,069
Other current assets		—		—		—		616		—		616
Property and equipment		5,208		2,621		1,427		21,500		5,396		36,152
Goodwill and other intangibles		9,427		196		2,595		43,839		1,004		57,061
Total assets acquired		14,635		2,817		4,022		78,152		6,400		106,026
Liabilities assumed:
Accounts payable		—		—		—		1,769		—		1,769
Accrued expenses		—		—		—		911		—		911
Deferred tax liability		—		—		—		5,274		—		5,274
Total liabilities assumed		—		—		—		7,954		—		7,954
Net assets acquired	$	14,635	$	2,817	$	4,022	$	70,198	$	6,400	$	98,072

F-20

STALLION OILFIELD SERVICES LTD. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

DECEMBER 31, 2005 AND 2006

	BLR		OHH		Erlandson		Norton		R&G		Bowie		Total Construction and Logistics Services Segment
Assets acquired:
Cash	$	328	$	—	$	—	$	—	$	—	$	—	$	328
Accounts receivable, net		15,833		—		—		—		—		—		15,833
Other current assets		891		—		—		—		—		—		891
Deferred tax assets		164		—		—		—		—		—		164
Property and equipment		14,205		7,907		3,545		9,579		4,269		7,153		46,658
Goodwill and other intangibles		23,873		3,303		1,938		17,316		763		4,299		51,492
Total assets acquired		55,294		11,210		5,483		26,895		5,032		11,452		115,366
Liabilities assumed:								—
Accounts payable		3,776		—		—		—		—		—		3,776
Accrued expenses		945		—		—		—		—		—		945
Deferred tax liability		2,120		—		—		—		—		—		2,120
Total liabilities assumed		6,841		—		—		—		—		—		6,841
Net assets acquired	$	48,453	$	11,210	$	5,483	$	26,895	$	5,032	$	11,452	$	108,525

Pro Forma Effect of 2006 Acquisitions on Operations

The following table provides pro forma information related to the acquisitions of TB, BLR, and AOQ assuming each acquisition occurred January 1, 2005 (in thousands):

	Years Ended December 31,
	2005		2006
	(Unaudited)
Revenue	$	143,157	$	267,175
Net income		7,677		26,743

To calculate the pro forma amounts for the years ended December 31, 2005 and 2006, the Partnership used the internal financial statements of TB, BLR and AOQ for the periods prior to acquisition. TB was acquired on January 1, 2006 therefore it is included in the Partnership’s historical results of operations for the full year ended December 31, 2006. Stallion does not believe the pro forma effect of the other acquisitions is material.

The combined results of operations of the acquired businesses have been adjusted to reflect additional depreciation of fixed assets and amortization of intangible assets subject to amortization. The Partnership estimated the remaining useful lives and salvage values of all acquired assets and depreciated those assets over those useful lives using policies that were consistently applied.

Pro forma interest expense was calculated on notes payable to the sellers of acquired businesses and draws on the Partnership’s available line of credit at rates ranging from 6.25 percent to 8.60 percent, assuming that the businesses were acquired on January 1, 2005.

F-21

STALLION OILFIELD SERVICES LTD. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

DECEMBER 31, 2005 AND 2006

Although we believe the accounting policies and procedures we used to prepare the pro forma results are reasonable, these pro forma results do not purport to be indicative of the actual results which would have been achieved had the acquisitions been consummated on January 1, of the respective year, and are not intended to be a projection of future results.

3. Property and Equipment

Major classifications and estimated depreciable lives of property and equipment are as follows (in thousands):

	Estimated Life	December 31,
		2005			2006
Rental equipment	3-20 years	$	67,381		$	211,051
Auto and trucks	1-5 years		11,537			29,052
Machinery and equipment	5 years		—			587
Office buildings	4-15 years		279			1,844
Computer equipment and software	3-4 years		915			1,785
Furniture and fixtures	4 years		614			939
Leasehold improvements	3-5 years		419			1,458
Office equipment and furniture	3-5 years		150			475
			81,295			247,191
Less: accumulated depreciation			(9,494	)		(34,728	)
			71,801			212,463
Construction in progress			—			2,394
Assets not yet placed in service			2,782			5,077
Land			—			843
		$	74,583		$	220,777

Depreciation expense for the years ended December 30, 2004, 2005 and 2006 was approximately $1.8 million, $7.2 million and $26.2 million, respectively.

4. Intangible and Other Assets

Intangible and other assets are summarized as follows (in thousands):

	December 31,
	2005			2006
Intangible and other assets subject to amortization:
Customer lists	$	3,200		$	20,151
Non-compete agreements		1,596			3,373
Debt issuance costs		1,545			7,753
Consulting agreement		96			96
		6,437			31,373
Less: accumulated amortization		(1,028	)		(6,737	)
Total intangible and other assets	$	5,409		$	24,636

F-22

STALLION OILFIELD SERVICES LTD. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

DECEMBER 31, 2005 AND 2006

Amortization expense was approximately $0.1 million, $0.6 million and $3.8 million for the years ended December 31, 2004, 2005 and 2006, respectively. The estimated amortization expense for intangibles subject to amortization is projected to be $3.5 million for 2007, $2.7 million for 2008, $2.2 million for 2009, $1.8 million for 2010, $1.8 million for 2011, and $7.6 million thereafter. Amortization expense for debt issuance costs, which will be charged to interest expense, is projected to be $5.0 million for 2007.

The Partnership performed its annual impairment analysis of intangible assets not subject to amortization as of December 31, 2005 and 2006 and concluded that an impairment charge was not required.

5. Detail of Certain Balance Sheet Accounts

Accounts receivable consisted of the following (in thousands):

	December 31,
	2005			2006
Billed accounts receivable	$	21,454		$	64,338
Unbilled receivables		1,122			4,073
Other receivables		45			353
		22,621			68,764
Less: allowance for doubtful accounts		(273	)		(987	)
Net trade receivables	$	22,348		$	67,777

Accrued liabilities consisted of the following (in thousands):

	December 31,
	2005		2006
Accrued payroll and payroll taxes		750	$	3,322
Accrued other taxes		877		1,758
Accrued bonuses		798		1,363
Accrued interest		403		949
Accrued federal and state income taxes		795		617
Accrued insurance		544		617
Other accrued expenses		1,258		2,716
Total accrued expenses	$	5,425	$	11,342

6. Long-Term Debt and Notes Payable

On March 28, 2006 the Partnership amended and restated its existing secured credit facility (as amended and restated, the “Credit Agreement”) with UBS AG, Stamford Branch as Issuing Bank, Administrative Agent and Collateral Agent (“UBS AG”) and certain other financial institutions. The Credit Agreement provides for a $165 million term loan (the “Term Loan Facility”) that will mature on March 1, 2012, and up to $50 million in borrowing capacity under a revolving credit facility (the “Revolving Credit Facility”) that will mature on March 1, 2011. The Credit Agreement also provides up to $20 million for the issuance of letters of credit. Any outstanding letters of credit reduce borrowing capacity under the Revolving Credit Facility.

F-23

STALLION OILFIELD SERVICES LTD. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

DECEMBER 31, 2005 AND 2006

In conjunction with our acquisition of AOQ we further amended and restated our Credit Agreement on July 31, 2006 to provide for a Term Loan of $210 million and a Revolving Credit Facility of $70 million. All other significant terms and conditions were unchanged.

Subject to certain limitations, the Partnership has the ability to elect how interest under the Credit Agreement will be computed. Interest under the Credit Agreement may be determined by reference to (1) the London Interbank Offered Rate (“LIBOR”) plus an applicable margin between 2.75 percent and 3.25 percent depending on the credit rating of commitments under the Credit Agreement, or (2) the greater of (a) the base rate charged by UBS AG and (b) the Federal Funds Rate, plus 0.5 percent, plus an applicable margin between 1.75 percent and 2.25 percent depending on the credit rating of commitments under the Credit Agreement. If an event of default exists under the Credit Agreement, advances will bear interest at the then applicable rate plus 2 percent. Interest is payable quarterly in arrears for base rate loans and at the end of the applicable interest periods for LIBOR loans.

All of the Partnership’s obligations under the Credit Agreement are secured by first priority security interests on substantially all assets of the Partnership. Additionally, all of the Partnership’s subsidiaries have guaranteed our obligations under the Credit Agreement.

The Credit Agreement contains various standard covenants that place limits on the operation of the Partnership. Some of these covenants require the Partnership and its subsidiaries, on a consolidated basis, to maintain specific ratios or conditions (with such ratios tested at the end of each fiscal quarter).

Under the Credit Agreement, the Partnership is permitted to prepay certain borrowings. In addition, the Credit Agreement requires the Partnership to make prepayments in certain situations.

If an event of default exists under the Credit Agreement, the lenders may accelerate the maturity of the obligations outstanding under the Credit Agreement and they may exercise other rights and remedies. While an event of default is continuing, advances will bear interest at the then applicable rate plus 2 percent. As of December 31, 2006, the Partnership was in compliance with all of its debt covenants.

For the years ended December 31, 2004, 2005 and 2006, our weighted average interest rate on outstanding borrowings was approximately 5.09 percent, 6.75 percent and 7.84 percent, respectively.

Long-term debt and notes payable consists of the following (in thousands):

	December 31,
	2005			2006
Term Loan and Revolving Credit pursuant to Credit Agreement	$	52,316		$	253,040
Note payable to a partner		9,642			—
Notes payable to sellers of acquired businesses		3,509			4,189
Other notes payable		1,567			—
		67,034			257,229
Less: current maturities		(11,933	)		(1,913	)
	$	55,101		$	255,316

F-24

STALLION OILFIELD SERVICES LTD. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

DECEMBER 31, 2005 AND 2006

As of December 31, 2005 notes payable to the sellers of acquired businesses included two unsecured subordinated convertible notes payable to the sellers of acquired businesses of approximately $975,000 bearing interest at 7 percent as of December 31, 2005. The notes and related interest were payable in monthly installments of approximately $16,250 maturing January 2009. Under the terms of the note agreements, 50 percent of the unpaid principal balances and any accrued interest thereon became convertible into Class C units of Stallion Holdings at the option of the note holder. This conversion option was scheduled to expire on January 31, 2007. All amounts outstanding were paid in full in January 2006.

As part of the reorganization of the Partnership in January 2005, the Partnership issued a subordinated note payable to a partner bearing interest of 12 percent, maturing in July of 2010. The note had a face amount of $10.0 million and was issued with 430,133 C units of Stallion Holdings. The note balance as of December 31, 2005 was $9.61 million net of unamortized discount of approximately $358,000. This note was paid in full and the remaining discount was charged to interest expense in March 2006.

As of December 31, 2006 notes payable to sellers of acquired businesses had a principal balance outstanding of approximately $4.2 million. The notes are due in monthly installments totaling approximately $134,000 plus interest at rates ranging from 7 percent to the prime rate. One note is due in quarterly installments of $75,000 plus interest at 5 percent. All of the notes are subordinated to the Partnership’s bank debt.

In January 2007, we completed a private offering for $300.0 million aggregate principal amount of 9.75 percent Senior Notes due February 1, 2015. The net proceeds from the offering were used to retire the then outstanding Term B Loan balance and to repay current borrowings under the revolving credit facility. Future maturities of long-term debt, updated for the 9.75 percent Senior Notes offering and the concurrent restructuring of the Revolving Credit Agreement (see Note 15), are as follows (in thousands):

Year Ending December 31,
2007	$	1,913
2008		1,480
2009		677
2010		119
2011		—
Thereafter		253,040
	$	257,229

7. Capital Lease Obligations

The Partnership leases certain equipment which has been classified as capital leases. The aggregate cost and accumulated depreciation of assets under capital leases are as follows (in thousands):

	December 31,
	2005			2006
Workforce accommodation units	$	768		$	768
Vehicles		577			514
Forklifts		171			171
Trash containers		87			87
		1,603			1,540
Less: accumulated depreciation		(684	)		(855	)
	$	919		$	685

F-25

STALLION OILFIELD SERVICES LTD. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

DECEMBER 31, 2005 AND 2006

Depreciation for such assets is included in depreciation expense.

8. Lease Commitments

The Partnership leases equipment and office space from a related party (see Note 10) and various unrelated parties in various locations under non-cancelable operating leases. Aggregate rent expense under these operating leases and other vehicle leases charged to income was approximately $0.6 million, $1.3 million and $1.7 million for the twelve months ended December 31, 2004, 2005 and 2006, respectively.

The minimum future lease payments required under current non-cancelable operating lease agreements as of December 31, 2006, having remaining terms in excess of one year as of December 31, 2006 for each of the next five years and in the aggregate, are as follows (in thousands):

Years Ending December 31,
2007	$	1,549
2008		1,021
2009		645
2010		504
2011		132
	$	3,851

9. Income Taxes

Certain subsidiaries of the Partnership are ‘C’ corporations and are subject to federal and state income taxes. Those subsidiaries account for income taxes in accordance with the asset and liability approach prescribed by SFAS No. 109. Deferred income tax assets and liabilities are determined based upon differences between financial reporting and tax bases of assets and liabilities and are measured using the enacted tax rates and laws that will be in effect when the differences are expected to reverse.

Prior to January 2005 the Partnership did not have any subsidiaries that were ‘C’ Corporations. The Partnership’s income tax (benefit) provision attributable to income before income tax consisted of the following (in thousands):

	Years Ended December 31,
	2005			2006
Current:
U.S. federal	$	561		$	2,651
State		110			500
Total current		671			3,151
Deferred:
U.S. federal		(73	)		1,465
State		—			311
Total deferred		(73	)		1,776
	$	598		$	4,927

F-26

STALLION OILFIELD SERVICES LTD. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

DECEMBER 31, 2005 AND 2006

The difference between the tax provision at the statutory federal income tax rate and the tax provision attributable to income before income tax for the years ended December 31, 2005, and 2006 is analyzed below (in thousands):

	Years Ended December 31,
	2005			%		2006			%
Statutory federal income tax rate	$	2,809		35.00	%	$	10,744		35.00	%
Effect of state income tax, net		71		0.89			529		1.72
Partnership income tax attributable to partners		(2,312	)	(28.80	)		(6,504	)	(21.19	)
Effect of nondeductible expenses		37		0.46			127		.42
Other		(7	)	(0.10	)		31		.10
	$	598		7.45	%	$	4,927		16.05	%

In accordance with SFAS No. 109, deferred tax assets and liabilities are recognized for future tax effects of temporary differences between the tax basis of an asset or liability and its reported amount in the financial statements. The measurement of deferred tax assets and liabilities is based on enacted tax laws and rates currently in effect in each of the taxing jurisdictions in which the Partnership has operations (U.S. federal and states only).

Deferred tax assets and liabilities are classified as current or non-current according to the classification of the related asset or liability for financial reporting purposes. The components of the net deferred tax assets (liabilities) were as follows (in thousands):

	December 31,
	2005		2006
Deferred tax assets (liabilities)—current:
Deferred compensation	$	232	$	44
Bad debt allowances		27		110
Accrued bonuses		—		143
Prepaid insurance and other		—		(125	)
Inventory		—		(98	)
Other		—		(45	)
Deferred tax assets—current, net	$	259	$	29
Deferred tax liabilities—noncurrent:
Property, plant and equipment	$	584	$	9,391
Intangibles		705		705
Other		—		134
Deferred tax liabilities—noncurrent	$	1,289	$	10,230

10. Related Party Transactions

In December 2006, we made certain loans aggregating approximately $10 million to certain of our executive officers. These notes have a ten year maturity and bear interest at the “Annually Compounded Short Term Applicable Federal Rate” as published monthly by the Internal Revenue Service under Section 1274(d) of the Internal Revenue Code. The notes can be accelerated by us upon certain acceleration events including an initial public offering.

F-27

STALLION OILFIELD SERVICES LTD. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

DECEMBER 31, 2005 AND 2006

The Partnership leases office space and vehicles from a number of related parties. Rent expense under these non-cancelable operating leases charged to income was approximately $130,000, $378,000 and $593,000 for the years ended December 31, 2004, 2005 and 2006, respectively.

Sales commissions are payable to a company owned by an employee of the Partnership for sales originating from this entity. These commissions were charged to income and amounted to approximately $206,000, $325,000 and $205,000 for the years ended December 31, 2004, 2005 and 2006, respectively.

In addition, the Partnership leases certain chartered aircraft from Permian Mud Service and Champ Air. Stallion shares in the operating expenses and pays direct expenses of approximately $600,000 annually. Permian Mud Service and Champ Air are also owned and operated by the father of Stallion’s Chief Executive Officer, President and Chairman of the board of directors. Stallion incurred expenses related to Permian Mud Service and Champ Air of approximately $0, $129,000 and $595,000 for the years ended December 31, 2004, 2005 and 2006, respectively. The term of the lease for this plane will expire on December 31, 2006, but will continue on a month-to-month basis thereafter.

During 2006, Stallion also leased an aircraft from Rivers Aviation in connection with the performance of the duties of the division manager of the solids control service line. Rivers Aviation is owned by the former division manager of the solids control service line. Stallion incurred expenses related to Rivers Aviation of approximately $0, $172,000 and $365,000 for the years ended December 31, 2004, 2005 and 2006, respectively.

We lease an industrial facility in Alice, Texas from Q2 Rentals, L.L.C. for approximately $90,000 per year. Pursuant to an informal arrangement, we lease a houseboat and certain other recreational boats in coastal Louisiana on a month-to-month basis from Q2 Rentals in exchange for paying the operating expenses of the facilities which were approximately $160,000 for the year ended December 31, 2006. Q2 Rentals is operated by Mr. David M. Johnson, Mr. Craig Johnson’s father, and owned equally by Mr. Craig Johnson, Mr. Clayton D. Johnson, Mr. Craig Johnson’s brother, and Mr. David M. Johnson.

It is customary for the Partnership to lease real property from the former owners of acquired businesses. It is typical for many of these former owners to also be employed by the Partnership. Thus, Stallion and certain of its employees may be parties to leases relating to real property.

All loans made to our executive officers have been repaid to us and we will not make loans to executive officers in the future. We believe that our other related party transactions were either on terms at least as favorable to us as could have been obtained through arm’s-length negotiations with unaffiliated third parties or were negotiated in connection with acquisitions, the overall terms of which were as favorable to us as could have been obtained through arm’s-length negotiations with unaffiliated third parties.

F-28

STALLION OILFIELD SERVICES LTD. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

DECEMBER 31, 2005 AND 2006

11. Supplemental Information for Statements of Cash Flows

	Years Ended December 31,
	2004		2005		2006
Interest paid	$	768	$	3,596	$	16,185
Non-cash investing and financing activities:
Accounts receivable and property and equipment purchases financed with debt and capital leases	$	1,707	$	511	$	—
Conversion of notes payable into limited partner interest	$	—	$	500	$	250
Limited partner interest issued in connection with note payable	$	—	$	430	$	—
Distribution payable	$	—	$	786	$	1,800
Limited partner interest issued in connection with acquisition	$	—	$	—	$	22,950

12. Business Segment Information

Statement of Financial Accounting Standards No. 131 “Disclosure about Segments of an Enterprise and Related Information” establishes standards for the reporting of information about operating segments, products and services, geographic area and major customers. The method of determining what information to report is based on the way management organizes the operating segments within the Partnership for making operational decisions and assessments of financial performance.

During December 31, 2006, the Partnership provided its services through two operating segments to customers to support its operations before, during and after drilling operations. Prior to the acquisition of BLR in March 2006, the Partnership operated in only one segment. The following is a description of operating segments as of December 31, 2006:

Wellsite Support Services. The Partnership offers two types of wellsite support services: workforce accommodation and solids control. Workforce accommodation services include workforce accommodation and related services, which are designed to house various personnel on location before, during and after drilling operations. In addition to workforce accommodation services, the Partnership also provides surface rental equipment including forklifts, manlifts, light plants, generators, compressors, loaders, trash containers and water systems. Integrated communications services are provided with the StaRComm service offering. The StaRComm system includes a satellite communication system that provides wireless intercoms integrated with telephone, fax and internet/data services throughout the drilling location.

Construction and Logistics Services. Through the construction and logistics services segment the Partnership offers two types of services: rig hauling and wellsite construction. Rig hauling services involve the moving and rig-up/rig-down of drilling rigs and related equipment. Heavy haul trucks, trailers and cranes provide the capability of rigging-down, transporting to the next drilling location and rigging-up of the drilling rig. The Partnership provides construction services as the initial step of any new well project on land and inland marine environments. Location construction is the first step to occur after the well stake is placed marking the location for the well. In marshy areas and areas subject to greater rainfall and flooding, drilling locations require mats to maintain stability of the soil and drilling site. In addition, it also performs wellsite configuration and setup of production equipment, pipeline construction and tie-in, and location decommissioning.

F-29

STALLION OILFIELD SERVICES LTD. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

DECEMBER 31, 2005 AND 2006

Corporate expenses include general corporate expenses associated with managing all reportable operating segments. Corporate assets consist principally of working capital and debt financing costs.

The following table sets forth certain financial information with respect to reportable segments for the years ended December 31, 2004, 2005 and 2006 (in thousands):

	Wellsite Support Services		Construction and Logistics		Corporate and Eliminations			Total
2004:
Revenue	$	15,452	$	—	$	—		$	15,452
Cost of services		8,695		—		—			8,695
Segment operating profit		6,023		—		(3,011	)		3,012
Depreciation and amortization		1,847		—		77			1,924
Capital expenditures(1)		5,901		—		60			5,961
Identifiable assets		24,220		—		493			24,713
2005:
Revenue	$	73,126	$	—	$	—		$	73,126
Cost of services		42,281		—		—			42,281
Segment operating profit		24,765		—		(3,803	)		20,962
Depreciation and amortization		7,461		—		337			7,798
Capital expenditures(1)		35,361		—		590			35,951
Identifiable assets		118,744		—		4,392			123,136
2006:
Revenue	$	162,661	$	77,749	$	—		$	240,410
Cost of services		74,200		42,319		—			116,519
Segment operating profit		70,722		21,166		(11,357	)		80,531
Depreciation and amortization		19,214		9,162		1,692			30,068
Capital expenditures(1)		60,887		29,182		1,960			92,029
Identifiable assets		284,098		146,750		16,059			446,907

(1) Excludes acquisitions

The following table summarizes the changes in the carrying amount of goodwill by segment for the three years ended December 31, 2006 (in thousands):

	Wellsite Support Services		Construction and Logistics		Total
Balance as of January 1, 2004	$	6,196	$	—	$	6,196
2004 acquisitions		248		—		248
Balance as of December 31, 2004		6,444		—		6,444
2005 acquisitions		12,681		—		12,681
Balance as of December 31, 2005		19,125		—		19,125
2006 acquisitions		53,109		38,176		91,285
Balance as of December 31, 2006	$	72,234	$	38,176	$	110,410

F-30

STALLION OILFIELD SERVICES LTD. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

DECEMBER 31, 2005 AND 2006

13. Legal Matters and Contingencies

In the normal course of our business, we are party to various pending or threatened claims, lawsuits and administrative proceedings seeking damages or other remedies concerning our commercial operations, employees and other matters. Many of the claims against us relate to motor vehicle accidents which can result in loss of life or serious bodily injury. Although we cannot know the outcome of pending legal proceedings and the effect such outcomes may have on us, we believe that any liability resulting from the outcome of such proceedings, to the extent not otherwise provided for or covered by insurance, will not have a material adverse effect on our financial position, results of operations or liquidity.

14. Recent Accounting Pronouncements

In February 2006, the FASB issued Statement of Financial Accounting Standards No. 155, “Accounting for Certain Hybrid Financial Instruments.” (“SFAS No. 155”). SFAS No. 155 provides entities with relief from having to separately determine the fair value of an embedded derivative that would otherwise be require to be bifurcated from its host contract in accordance with SFAS No. 133, Accounting for Derivative Instruments and Hedging Activities. SFAS No. 155 allows an entity to make an irrevocable election to measure such a hybrid financial investment at fair value in its entirety, with changes in fair value recognized in earning. SFAS No. 155 is effective for all financial instruments acquired, issued or subject to a re-measurement event occurring after the beginning of an entity’s first fiscal year that begins after September 15, 2006. We believe that the adoption of SFAS No. 155 will not have a material impact on our financial position, results of operations or cash flows.

In March 2006, the FASB issued Statement of Financial Accounting Standards No. 156 “Accounting for Servicing of Financial Assets – An Amendment to FASB Statement No. 140.” (SFAS No. 156”). SFAS No. 156 require entities to recognize a servicing asset or liability each time they undertake an obligation to service a financial asset by entering into a servicing contract in certain situations. This statement also requires all separately recognized servicing assets and servicing liabilities to be initially measured at fair value and permits a choice of either the amortization or fair value measurement method for subsequent measurement. The effective date of this statement is for annual periods beginning after September 15, 2006, with earlier adoption permitted as of the beginning of an entity’s fiscal year provided the entity has not issued any financial statements for that year. We do not plan to adopt SFAS No. 156 early, and we are currently assessing the impact on our Consolidated Financial Statements.

In July 2006, the FASB issued an interpretation entitled “Accounting for Uncertainty in Income Taxes—an interpretation of FASB No. 109,” (“FIN 48”). FIN 48 clarifies the accounting for uncertain tax provisions that may have been taken by an entity. Specifically, FIN 48 prescribes a more-likely-than-not recognition threshold to measure a tax position taken or expected to be taken in a tax return through a two-step process: (1) determining whether it is more likely than not that a tax position will be sustained upon examination by taxing authorities, after all appeals, based upon the technical merits of the position; and, (2) measuring to determine the amount of benefit/expense to recognize in the financial statements, assuming taxing authorities have all relevant information concerning the issue. That tax position is measured at the largest amount of benefit/expense that is greater than 50 percent likely of being realized upon ultimate settlement. This pronouncement also specifies how to present a liability for unrecognized tax benefits in a classified balance sheet, but does not change the classification requirements for deferred taxes. Under FIN 48, if a tax position previously failed the more-likely-than-not recognition threshold, it should be recognized in the first subsequent financial reporting period in which the threshold is met. Similarly, a position that no longer meets this recognition threshold should be derecognized in the first financial reporting period that the threshold is no longer met. FIN 48 becomes effective for fiscal years

F-31

STALLION OILFIELD SERVICES LTD. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

DECEMBER 31, 2005 AND 2006

beginning after December 15, 2006, with earlier adoption encouraged. We are currently evaluating the impact this statement may have on our financial position, results of operations and cash flow.

In September 2006, the Securities and Exchange Commission staff issued Staff Accounting Bulletin (“SAB”) No. 108, incorporated into the SEC Rules and Regulations as Section N to Topic 1, “Financial Statements,” which provided guidance concerning the effects of prior year misstatements in quantifying current year misstatements for the purpose of materiality assessments. Specifically, entities must consider the effects of prior year unadjusted misstatements when determining whether a current year misstatement will be considered immaterial to the financial statements at the current reporting period and record the adjustment, if deemed material. SAB No. 108 provides a dual approach in order to quantify errors under the following methods: (1) a roll-over method which quantifies the amount by which the current year income statement is misstated, and (2) the “iron curtain” method which quantifies a cumulative error by which the current year balance sheet is misstated. Entities may be required to record errors that occurred in prior years even if those errors were insignificant to the financial statements during the year in which the errors arose. SAB No. 108 became effective as of the beginning of the fiscal year ending after November 15, 2006. Upon adoption, entities may either restate the financial statements for each period presented or record the cumulative effect of the error correction as an adjustment to the opening balance of retained earnings at the beginning of the period of adoption, and provide disclosure of each individual error being corrected within the cumulative adjustment, stating when and how each error arose and the fact that the error was previously consider immaterial. The authoritative guidance has no impact on our financial position, results of operations and cash flows,

In September 2006, the FASB issued Statement of Financial Accounting Standards No. 157, “Fair Value Measurements,” (“SFAS No. 157”) a pronouncement which provides additional guidance for using fair value to measure assets and liabilities. The pronouncement states that fair value should be based upon assumptions market participants would use to price an asset or liability, and establishes a hierarchy that prioritizes the information used to determine fair value, whereby quoted marked prices in active markets would be given highest priority with lowest priority given to data provided by the reporting entity based on unobservable facts. This standard requires disclosure of fair value measurements by level within this hierarchy. SFAS No. 157 becomes effective in the first interim reporting period for the fiscal years beginning after November 15, 2006, with early adoption permitted. We are currently evaluating the impact this statement may have on our financial position, results of operations and cash flow.

In September 2006, the FASB issued FASB Staff Position No. AUG AIR-1 “Accounting for Planned Major Maintenance Activities” (“FSP No. AUG AIR-1”) FSP No. AUGAIR-1 prohibits the use of accrued-in-advance method for accounting for major maintenance activities and confirms the acceptable methods for planned major maintenance activities. FSP No. AUG AIR-1 is effective the first fiscal year beginning after December 15, 2006. We believe the adoption of FSP No. AUG AIR-1 will not have a material impact on our financial position, results of operations or cash flows.

In February 2007, the FASB issued Statement of Financial Accounting Standards No. 159, “The Fair Value Option for Financial Assets and Financial Liabilities — Including an Amendment of FASB Statement No. 115,” (“SFAS No. 159”). This pronouncement permits entities to use the fair value method to measure certain financial assets and liabilities by electing an irrevocable option to use the fair value method at specified election dates. After election of the option, subsequent changes in fair value would result in the recognition of unrealized gains or losses as period costs during the period the change occurred. SFAS No. 159 becomes effective as of the beginning of the first fiscal year that begins after November 15, 2007, with early adoption permitted. However, entities may not retroactively apply the provisions of SFAS No. 159 to fiscal years preceding the date of adoption. We are currently evaluating the impact that SFAS No. 159 may have on our financial position, results of operations and cash flows.

F-32

STALLION OILFIELD SERVICES LTD. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

DECEMBER 31, 2005 AND 2006

15. Subsequent Events

Senior Notes

In a private placement on January 19, 2007, Stallion issued $300.0 million of 9.75 percent Senior Notes due February 1, 2015 (“Senior Notes”). Proceeds from the sale of the Senior Notes were used to retire the outstanding balance on the $210.0 million Term B Loan and to pay down approximately $44.5 million under the revolving credit facility. Concurrent with the placement of the Senior Notes, we amended our existing senior secured credit facility to increase the revolving line from $70.0 million to $125.0 million and reduced the applicable interest rate to LIBOR plus 2.00 percent. The revolving credit covenant package was also amended to provide greater operating flexibility.

Interest payments on the Senior Notes are due semi-annually, on February 1 and August 1, commencing on August 1, 2007. The Senior Notes are non-convertible, unsecured and guaranteed by all the subsidiaries of the Partnership. In connection with the retirement of the Term B Loan on January 19, 2007, we will expense the remaining unamortized deferred debt issuance costs which amounted to approximately $4.8 million.

The Senior Notes are redeemable at the option of the Partnership on or after February 1, 2011 at the specified redemption price as described in the Indenture. The Senior Notes will be redeemable by the Partnership, in whole or in part, at any time prior to February 1, 2011 at a discount rate of the U.S. Treasury Rate for a specified period of time plus 50 basis points. Prior to February 1, 2010 Stallion may redeem up to 35 percent of the Senior Notes with the proceeds of certain equity offerings at a redemption price equal to 109.75 percent of the principal amount of the Senior Notes, plus accrued and unpaid interest and liquidated damages, if any, to the date of redemption. This redemption must occur less than 90 days after the date of the closing of any such qualified equity offering.

Following a change of control, as defined in the indenture, the Partnership will be required to make an offer to repurchase all or any portion of the 9.75 percent Senior Notes at a purchase price of 101 percent of the principal amount, plus accrued and unpaid interest and liquidated damages, if any, to the date of repurchase.

The Senior Notes contain certain covenants that limit the ability of the Partnership and its restricted subsidiaries to, among other things: incur additional debt, incur layered debt, consolidate or merge with or into other companies, comply with limitations on asset sales, limitations on restricted payments, limitations on dividends and other restrictions, limitations on transactions with affiliates, and additional note guarantees. The restrictive covenants are subject to a number of important exemptions and qualifications set forth in the Indenture.

As part of the issuance of the above-mentioned Senior Notes, the Partnership incurred debt issuance costs of approximately $8.5 million, which will be amortized to interest expense using the straight line method, which approximates the effective interest method over the term of the Senior Notes.

F-33

STALLION OILFIELD SERVICES LTD. AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS

	December 31, 2006 (audited)		March 31, 2007 (unaudited)
	(in thousands)
Assets
Current assets
Cash and cash equivalents	$	4,100	$	7,938
Accounts receivable, net		67,777		67,192
Costs and estimated earnings in excess of billings on uncompleted contracts		1,741		3,175
Prepaid expenses		7,437		5,886
Deferred tax assets		29		173
Total current assets		81,084		84,364
Property and equipment, net		220,777		252,829
Notes and accrued interest receivable—officers		10,000		10,159
Goodwill		110,410		127,523
Deferred debt issuance cost, net of accumulated amortization of $172 and $834, respectively		5,683		9,528
Intangible and other assets, net of accumulated amortization of $6,300 and $6,700, respectively		18,953		17,325
Total assets	$	446,907	$	501,728
Liabilities and partners’ capital
Current liabilities
Accounts payable—trade	$	12,462	$	14,800
Distribution payable		1,800		1,800
Billings in excess of costs and estimated earnings on uncompleted contracts		—		107
Accrued expenses		11,342		16,389
Current portion of long-term debt and notes payable		1,913		1,913
Current portion of capital leases		127		109
Total current liabilities		27,644		35,118
Long-term debt and notes payable, net of current portion		255,316		301,797
Obligations under capital leases, net of current portion		183		162
Deferred income tax liabilities		10,230		11,038
Total liabilities		293,373		348,115
Commitments and contingencies		—		—
Partners’ capital		153,534		153,613
Total liabilities and partners’ capital	$	446,907	$	501,728

See notes to consolidated financial statements.

F-34

STALLION OILFIELD SERVICES LTD. AND SUBSIDIARIES

UNAUDITED CONSOLIDATED STATEMENTS OF OPERATIONS

	Three Months Ended March 31,
	2006		2007
	(in thousands)
Service revenue	$	38,962	$	82,071
Operating expenses
Cost of services		20,828		49,678
Selling, general and administrative		4,570		8,247
Depreciation and amortization		4,299		10,771
Loss on disposal of property and equipment		342		320
Total operating expenses		30,039		69,016
Income from operations		8,923		13,055
Other income (expense)
Interest expense		4,097		12,048
Other income (expense)		10		(77	)
Total other expense		4,107		11,971
Income before income taxes		4,816		1,084
Provision for income taxes		911		1,005
Net income	$	3,905	$	79

See notes to consolidated financial statements.

F-35

STALLION OILFIELD SERVICES LTD. AND SUBSIDIARIES

UNAUDITED CONSOLIDATED STATEMENTS OF CHANGES IN PARTNERS’ CAPITAL

	General Partner		Limited Partner		Total
	(in thousands)
Balances, January 1, 2007	$	38	$	153,496	$	153,534
Net income		—		79		79
Balance, March 31, 2007	$	38	$	153,575	$	153,613

See notes to consolidated financial statements.

F-36

STALLION OILFIELD SERVICES LTD. AND SUBSIDIARIES

UNAUDITED CONSOLIDATED STATEMENTS OF CASH FLOWS

	Three Months Ended March 31,
	2006			2007
	(in thousands)
Cash flows from operating activities
Net income	$	3,905		$	79
Adjustments to reconcile net income to net cash provided by operating activities
Depreciation and amortization		4,299			10,771
Amortization of debt issuance costs		1,358			5,170
Amortization of discount		358			—
Interest income on notes receivable—officers		—			(159	)
Loss on disposal of property and equipment		342			320
Deferred tax benefit (expense)		(65	)		664
Bad debt expense		220			911
Changes in operating assets and liabilities, net of acquired assets and liabilities
Accounts receivable		(1,445	)		(326	)
Costs and estimated earnings in excess of billings on uncompleted contracts		(1,128	)		(1,434	)
Prepaid expenses		(1,865	)		1,551
Accounts payable—trade		718			2,445
Billings in excess of costs and estimated earnings on uncompleted contracts		—			107
Accrued expenses		3,721			4,940
Net cash provided by operating activities		10,418			25,039
Cash flows from investing activities
Cash paid for acquisitions, net of cash received		(74,097	)		(22,570	)
Cash paid for acquisition costs		(1,166	)		(128	)
Cash paid for property and equipment		(20,310	)		(36,500	)
Proceeds received from disposal of property and equipment		57			569
Net cash used in investing activities		(95,516	)		(58,629	)
Cash flows from financing activities
Partners’ capital contributions, net of issuance fees		17,365			—
Proceeds from long-term debt		171,000			300,000
Payment of long-term debt		(65,032	)		(209,018	)
Payment on line of credit		(6,100	)		(44,500	)
Payment of debt issuance costs		(4,537	)		(9,015	)
Payment on capital leases		(141	)		(39	)
Net cash provided by financing activities		112,555			37,428
Net increase in cash		27,457			3,838
Cash at beginning of period		982			4,100
Cash at end of period	$	28,439		$	7,938

See notes to consolidated financial statements.

F-37

STALLION OILFIELD SERVICES LTD. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

MARCH 31, 2006 AND 2007

1. Significant Accounting Policies

Basis of Presentation: The accompanying unaudited consolidated financial statements as of March 31, 2007 and for the three months ended March 31, 2006 and 2007 have been prepared in accordance with accounting principles generally accepted in the United States of America for interim financial information and with the instructions to Form 10-Q and Article 10 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by accounting principles generally accepted in the United States of America (“GAAP”) for complete financial statements. In the opinion of management, all material adjustments (consisting only of normal and recurring adjustments) necessary to present a fair statement of our financial position and results of operations for the interim periods included herein have been made, and the disclosures contained herein are adequate to make the information presented not misleading. Operating results for the three months ended March 31, 2007 are not necessarily indicative of the results that may be expected for the year ending December 31, 2007.

Nature of Business: Stallion Oilfield Services Ltd. and subsidiaries (collectively the “Partnership”, “Stallion” or “We”) provide a wide range of wellsite support services and construction and logistics services to drilling contractors and oil and gas exploration and production companies, including workforce accommodation units, surface equipment rental, logistics services, solids control services and equipment, communications infrastructure and rig relocation and oilfield heavy hauling services in the drilling regions in the United States, including the Gulf Coast, South Texas, ArkLaTex, North Texas, the Mid-Continent, Permian Basin, Rocky Mountain Regions, offshore Texas and Louisiana Gulf Coast and in international waters. Stallion is headquartered in Houston, Texas. Stallion is a limited partnership with Stallion Oilfield Holdings, Ltd. as the 99.99 percent limited partner and Stallion Interests, LLC as the .01 percent general partner of the Partnership.

Principles of Consolidation: The consolidated financial statements include the financial statements of Stallion Oilfield Services Ltd. and its wholly owned subsidiaries. Stallion has no interest in any other organization, entity, partnership, or contract that could require any evaluation under FASB Interpretation No. 46 or Accounting Research Bulletin No. 51. All significant intercompany balances and transactions have been eliminated in consolidation.

Fair Value of Financial Instruments: The carrying value amount of cash, accounts receivable, accounts payable and accrued liabilities approximate fair value due to the short maturity of these instruments. The carrying amount of all debt approximates fair value because Stallion’s current borrowing rate is based on a variable market rate of interest.

Goodwill: Goodwill represents the excess of costs over the fair value of net assets of acquired businesses. Statement of Financial Accounting Standards No. 142, “Goodwill and Other Intangible Assets” eliminates the amortization of goodwill and other intangible assets with indefinite lives. Intangible assets with lives restricted by contractual, legal or other means will continue to be amortized over their useful lives. Goodwill acquired in a business combination is not amortized, but instead tested for impairment at least annually in the fourth quarter. Under this goodwill impairment test, if the fair value of a reporting unit does not exceed its carrying value, the excess of fair value of the reporting unit over the fair value of its net assets is considered to be the implied fair value of goodwill. If the carrying value of goodwill exceeds its implied fair value, the difference is recognized as an impairment loss. Based on its evaluation of goodwill as of December 31, 2006, the Partnership determined that goodwill was not impaired, and thus recorded no impairment charge. No events have occurred that would require a re-evaluation as of March 31, 2007.

F-38

STALLION OILFIELD SERVICES LTD. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

MARCH 31, 2006 AND 2007

Impairment: In accordance with Statement of Financial Accounting Standards No. 144, “Accounting for the Impairment or Disposal of Long-Lived Assets”, long-lived assets, such as property, plant and equipment, and purchased intangibles subject to amortization, are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. Recoverability of assets to be held and used in operations is measured by a comparison of the carrying amount of an asset to estimated undiscounted cash flows expected to be generated by the asset. If the carrying amount of an asset exceeds its estimated future cash flows, an impairment charge is recognized in the amount by which the carrying amount of the asset exceeds the fair value of the asset. Assets to be disposed of would be separately presented in the balance sheet and reported at the lower of carrying amount or the fair value less anticipated cost to sell, and they would no longer be depreciated. No impairment losses have been recorded through March 31, 2007.

Self-Insured Risk Accruals: The Partnership is partially self-insured for certain losses relating to workers’ compensation and general liability insurance claims. The Partnership maintains accruals to cover the self-insured risks, which are based on third-party data and historical claims history.

Revenue Recognition: The Partnership’s revenue recognition policies are as follows:

Rental and Service Revenue

The Partnership recognizes revenue when it is realized and earned. The Partnership considers revenue to be realized and earned when services have been provided to the customer, the product has been delivered, the sales price has been fixed or determinable and collection is reasonably assured. Revenue from rental agreements is recognized over the rental period and revenue from service agreements is recognized when services have been rendered. Generally services are provided over a relatively short period of time.

Construction Revenue

Certain of our operations recognize revenue related to wellsite construction and offshore workforce accommodations unit construction using the percentage-of-completion method determined by the ratio of costs incurred to total estimated costs at completion. All known or anticipated losses on contracts are recognized in full when such losses become apparent. Contracts typically range from two to six months in duration.

Mobilization and Demobilization Revenue

In the Partnership’s wellsite support services segment, the Partnership charges its customers a rig-up/rig-down charge in connection with the initial setup or takedown of workforce accommodation units and for the connection or disconnection of these units to or from water, utilities, and sewer systems. Revenue related to rig-up/rig-down charges is recognized upon completion of the service.

Use of Estimates: The preparation of consolidated financial statements in conformity with GAAP requires management to make certain estimates and assumptions. These estimates and assumptions affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities at the balance sheet date and the amounts of revenue and expenses recognized during the reporting period. Areas where critical accounting estimates are made by management include:

• Depreciation and amortization of property and equipment and intangible assets,

• Impairment of property and equipment and goodwill,

• Allowance for doubtful accounts,

F-39

STALLION OILFIELD SERVICES LTD. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

MARCH 31, 2006 AND 2007

• Litigation and self-insured risk reserves, Revenue recognition on uncompleted contracts,

• Fair value of assets acquired and liabilities assumed, and

• Income taxes.

The Partnership analyzes its estimates based on historical experience and various other assumptions that it believes to be reasonable under the circumstances. Under different assumptions or conditions, the actual results could differ, possibly materially from those previously estimated. Many of the conditions impacting these assumptions are outside of Stallion’s control.

2. Acquisitions

During the three months ended March 31, 2007, we acquired substantially all of the assets of three oilfield service companies for a combined cash purchase price of approximately $22.6 million, resulting in goodwill of approximately $16.3 million. One of the acquired companies is located in Maysville, Oklahoma and provides surface equipment rentals that are used in oilfield operations. This acquisition has been integrated into our existing Elk City, Oklahoma operations. The second company located in Odessa, Texas provides workforce accommodation unit and related equipment rentals to our customers located in the Permian Basin area. Both of these acquisitions have been included in our wellsite support services operating segment. The third company is located in Cleburne, Texas and provides waterline supply services to support customers in the southern Ft. Worth Basin. This acquisition is included in our construction and logistic services segment.

Results of each of these acquired businesses are included in our accounts and consolidated results of operations from their respective dates of acquisition. No pro forma disclosure is provided as these acquisitions were not significant to our consolidated operations for the three months ended March 31, 2007. The following table summarizes the estimated fair value of the assets acquired and liabilities assumed during the first quarter of 2007 (in thousands):

	Total
	(Unaudited)
Assets acquired:
Property and equipment	$	6,286
Goodwill and other intangibles		16,284
Total assets acquired		22,570
Total liabilities assumed		—
Net assets acquired	$	22,570

Additionally in the three months ended March 31, 2007 we finalized the purchase accounting for two of the acquisitions that occurred in 2006 resulting in additional goodwill of approximately $0.8 million.

F-40

STALLION OILFIELD SERVICES LTD. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

MARCH 31, 2006 AND 2007

3. Property and Equipment

Major classifications and estimated depreciable lives of property and equipment are as follows (in thousands):

	Estimated Life	December 31, 2006			March 31, 2007
					(Unaudited)
Rental equipment	3-20 years	$	211,051		$	220,277
Auto and trucks	1-5 years		29,052			55,006
Machinery and equipment	5 years		587			1,622
Office buildings	4-15 years		1,844			631
Computer equipment and software	3-4 years		1,785			1,877
Furniture and fixtures	4 years		939			1,063
Leasehold improvements	3-5 years		1,458			1,615
Office equipment and furniture	3-5 years		475			748
			247,191			282,839
Less: accumulated depreciation			(34,728	)		(43,538	)
			212,463			239,301
Assets not yet placed in service			5,077			8,134
Construction in progress			2,394			4,551
Land			843			843
		$	220,777		$	252,829

Depreciation expense for the three months ended March 31, 2006 and 2007 was approximately $3,836,000 million and $9,143,000, respectively.

4. Intangible and Other Assets

Intangible and other assets consist principally of acquired customer lists and non-compete agreements. Amortization expense related to intangible assets was $458,000 and $1,628,000 for the three months ended March 31, 2006 and 2007, respectively.

F-41

STALLION OILFIELD SERVICES LTD. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

MARCH 31, 2006 AND 2007

5. Detail of Certain Balance Sheet Accounts

Accounts receivable consisted of the following (in thousands):

	December 31, 2006			March 31, 2007
				(unaudited)
Billed accounts receivable	$	64,338		$	62,443
Unbilled receivables		4,073			5,655
Other receivables		353			1,074
		68,764			69,172
Less: allowance for doubtful accounts		(987	)		(1,980	)
Net trade receivables	$	67,777		$	67,192

Accrued expenses consisted of the following (in thousands):

	December 31, 2006		March 31, 2007
			(unaudited)
Accrued interest	$	949	$	5,614
Accrued payroll and payroll taxes		3,322		3,614
Accrued insurance		617		1,706
Accrued other taxes		1,758		1,570
Accrued federal and state income taxes		617		907
Accrued bonuses		1,363		552
Other accrued expenses		2,716		2,426
Total accrued expenses	$	11,342	$	16,389

6. Long-Term Debt and Notes Payable

In a private placement on January 19, 2007, Stallion issued $300.0 million of 9.75 percent Senior Notes due February 1, 2015 (“Senior Notes”). Proceeds from the sale of the Senior Notes were used to retire the outstanding balance on the $210.0 million Term B Loan and to pay down approximately $44.5 million under the revolving credit facility. Concurrent with the placement of the Senior Notes, we amended our existing senior secured credit facility to increase the revolving line from $70.0 million to $125.0 million and reduced the applicable interest rate to LIBOR plus 2.00 percent. The revolving credit covenant package was also amended to provide greater operating flexibility.

Interest payments on the Senior Notes are due semi-annually, on February 1 and August 1, commencing on August 1, 2007. The Senior Notes are non-convertible, unsecured and guaranteed by all the subsidiaries of the Partnership. In connection with the retirement of the Term B Loan on January 19, 2007, we expensed the remaining unamortized deferred debt issuance costs which amounted to approximately $4.8 million in the first quarter of 2007.

The Senior Notes are redeemable at the option of the Partnership on or after February 1, 2011 at the specified redemption price as described in the Indenture. The Senior Notes will be redeemable by the Partnership, in whole or in part, at any time prior to February 1, 2011 at a discount rate of the U.S. Treasury

F-42

STALLION OILFIELD SERVICES LTD. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

MARCH 31, 2006 AND 2007

Rate for a specified period of time plus 50 basis points. Prior to February 1, 2010 Stallion may redeem up to 35 percent of the Senior Notes with the proceeds of certain equity offerings at a redemption price equal to 109.75 percent of the principal amount of the Senior Notes, plus accrued and unpaid interest and liquidated damages, if any, to the date of redemption. This redemption must occur less than 90 days after the date of the closing of any such qualified equity offering.

Following a change of control, as defined in the indenture, the Partnership will be required to make an offer to repurchase all or any portion of the 9.75 percent Senior Notes at a purchase price of 101 percent of the principal amount, plus accrued and unpaid interest and liquidated damages, if any, to the date of repurchase.

The Senior Notes contain certain covenants that limit the ability of the Partnership and its restricted subsidiaries to, among other things: incur additional debt, incur layered debt, consolidate or merge with or into other companies, make certain asset sales, limit certain restricted payments, place limits on dividends and other distributions, limit transactions with affiliates, and prohibit additional note guarantees. The restrictive covenants are subject to a number of important exemptions and qualifications set forth in the Indenture.

In connection with the issuance of the Senior Notes the Partnership incurred debt issuance costs of approximately $8.9 million. These costs will be amortized to interest expense using the straight line method, which approximates the effective interest method, over the term of the Senior Notes.

For the three months ended March 31, 2006 and 2007, our weighted average interest rate on outstanding borrowings was approximately 7.55 percent and 9.55 percent, respectively.

Long-term debt and notes payable consists of the following (in thousands):

	December 31, 2006			March 31, 2007
				(unaudited)
9.75% Senior Notes	$	—		$	300,000
Term Loan pursuant to Credit Agreement		253,040			—
Notes payable to sellers of acquired businesses		4,189			3,710
		257,229			303,710
Less: current maturities		(1,913	)		(1,913	)
	$	255,316		$	301,797

F-43

STALLION OILFIELD SERVICES LTD. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

MARCH 31, 2006 AND 2007

7. Capital Leases

The Partnership leases certain equipment which has been classified as capital leases. The aggregate cost and accumulated depreciation of assets under capital leases is as follows (in thousands):

	December 31, 2006			March 31, 2007
				(unaudited)
Workforce accommodation units	$	768		$	768
Vehicles		514			514
Forklifts		171			171
Trash containers		87			87
		1,540			1,540
Less: accumulated depreciation		(855	)		(883	)
	$	685		$	657

Depreciation for such assets is included in depreciation expense.

8. Lease Commitments

The Partnership leases equipment and office spaces from a related party (see Note 10) and various unrelated parties in various locations under non-cancelable operating leases. Aggregate rent expense under these operating leases and other vehicle leases charged to income was approximately $37,000 and $169,000 for the three months ended March 31, 2006 and 2007, respectively.

9. Income Taxes

Certain subsidiaries of the Partnership are ‘C’ corporations and are subject to federal and state income taxes. Those subsidiaries account for income taxes in accordance with the asset and liability approach prescribed by SFAS No. 109. Deferred income tax assets and liabilities are determined based upon differences between financial reporting and tax bases of assets and liabilities and are measured using the enacted tax rates and laws that will be in effect when the differences are expected to reverse.

FASB Interpretation No. 48 “Accounting for Uncertainty in Income Taxes” (“Interpretation No. 48”) became effective for the Partnership as of January 1, 2007. Interpretation No. 48 clarifies the accounting for uncertainty in income taxes recognized in an enterprise’s financial statements in accordance with SFAS No. 109, “Accounting for Income Taxes.” Interpretation No. 48 prescribes a recognition threshold and measurement attribute for the financial statement recognition and measurement of a tax position taken or expected to be taken in a tax return. Interpretation No. 48 also provides guidance on derecognition, classification, interest and penalties, accounting in interim periods, disclosure and transition. Implementation of Interpretation No. 48 did not have a material impact on our consolidated financial statements.

We recognize interest and penalties related to uncertain tax positions in income tax expense. As of and for the three month periods ended March 31, 2006 and 2007, we did not recognize any income tax related interest or penalties.

As of March 31, 2007, the Partnership had no unrecognized tax benefits.

F-44

STALLION OILFIELD SERVICES LTD. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

MARCH 31, 2006 AND 2007

Certain of our subsidiaries are subject to U.S. federal income tax as well as income tax of multiple state jurisdictions. Federal income tax returns for 2003 through 2006 remain open to examination, while state and local income tax returns for 2003 through 2006 remain open to examination.

The Partnership’s income tax (benefit) provision attributable to income before income tax consisted of the following (in thousands):

	Three Months Ended March 31,
	2006			2007
	(unaudited)
Current:
U.S. federal	$	830		$	257
State		146			84
Total current		976			341
Deferred:
U.S. federal		(57	)		569
State		(8	)		95
Total deferred		(65	)		664
	$	911		$	1,005

The difference between the tax provision at the statutory federal income tax rate and the tax provision attributable to income before income tax for the three months ended March 31, 2006 and 2007 is analyzed below:

	Three Months Ended March 31,
	2006		2007
	(unaudited)
Statutory federal income tax rate	35.00	%	35.00	%
Effect of state income tax, net	1.98		11.05	%
Effect of partnership (income) loss tax attributable to partners	(18.63	)	39.4	%
Effect of nondeductible expenses	0.73		6.67	%
Other	(0.16	)	(1.60	)%
	18.92	%	90.52	%

In accordance with SFAS No. 109, deferred tax assets and liabilities are recognized for future tax effects of temporary differences between the tax basis of an asset or liability and its reported amount in the financial statements.

F-45

STALLION OILFIELD SERVICES LTD. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

MARCH 31, 2006 AND 2007

Deferred tax assets and liabilities are classified as current or non-current according to the classification of the related asset or liability for financial reporting purposes. The components of the net deferred tax asset (liability) were as follows (in thousands):

	December 31, 2006			March 31, 2007
				(unaudited)
Deferred tax assets (liabilities)—current:
Deferred compensation	$	44		$	—
Bad debt allowances		110			173
Accrued bonuses		143			—
Prepaid insurance		(125	)		—
Inventory		(98	)		—
Other		(45	)		—
Deferred tax assets—current, net	$	29		$	173
Deferred tax liabilities—noncurrent:
Property, plant and equipment		9,391			10,036
Intangibles		705			705
Other		134			297
Deferred tax liabilities—noncurrent	$	10,230		$	11,038

10. Related Party Transactions

In December 2006, we made certain loans aggregating approximately $10 million to certain of our executive officers. These notes have a ten year maturity and bear interest at the “Annually Compounded Short Term Applicable Federal Rate” as published monthly by the Internal Revenue Service under Section 1274(d) of the Internal Revenue Code. The notes, including accrued interest, were repaid by the officers in April 2007. Interest income related to these notes of $159,000 was recorded during the quarter ended March 31, 2007.

Stallion leases an industrial facility in Alice, Texas from Q2 Rentals; a company owned and operated by the father of the Chief Executive Officer, President and Chairman of the board of directors, for approximately $90,000 per year. Pursuant to an informal arrangement the Partnership also leases a houseboat and certain other recreational boats in coastal Louisiana on a month-to-month basis from this same company in exchange for paying certain operating costs of the boats. During the three months ended March 31, 2006 and 2007, the Partnership paid operating expenses totaling approximately $33,000 and $19,000, respectively, on behalf of Q2 Rentals.

In addition, the Partnership leases certain chartered aircraft from Permian Mud Service and Champ Air. Stallion shares in the operating expenses and pays direct expenses of approximately $600,000 annually. Permian Mud Service and Champ Air are also owned and operated by the father of the Chief Executive Officer, President and Chairman of the board of directors. Stallion incurred expenses related to Permian Mud Service and Champ Air of approximately $50,000 and $66,000 during the three months ended March 31, 2006 and 2007, respectively. The term of the lease for this plane expired on December 31, 2006, but it continues on a month-to-month basis thereafter.

Prior to February 2007, Stallion utilized a Pilatus single-engine airplane from Rivers Aviation, L.L.C. in connection with its solids control business. The Partnership had an arrangement to use this plane on a

F-46

STALLION OILFIELD SERVICES LTD. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

MARCH 31, 2006 AND 2007

month-to-month basis which was cancellable by either party with 30 days notice. Under this agreement, Stallion shared in the operating expenses and paid Rivers Aviation approximately $20,000 per month for the use of this aircraft. Rivers Aviation is owned by Fred Lausen, who was previously division manager of Stallion’s solids control business. This agreement was terminated in February 2007. Stallion incurred expenses related to Rivers Aviation of approximately $60,000 and $19,000 during the three months ended March 31, 2006 and 2007, respectively.

It is customary for the Partnership to lease real property from the former owners of acquired businesses. It is typical for many of these former owners to also be employed by the Partnership. Thus, Stallion and certain of its employees may be parties to leases relating to real property.

11. Supplemental Information for Statements of Cash Flows

	Three Months Ended March 31,
	2006		2007
	(unaudited)
	(in thousands)
Interest paid	$	1,719	$	2,037
Taxes paid	$	500	$	610

12. Business Segment Information

The Partnership provides its services through two operating segments to customers to support their operations before, during and after drilling operations. The following is a description of our operating segments as of March 31, 2007:

Wellsite Support Services. The Partnership offers two types of wellsite support services: workforce accommodation and solids control. Workforce accommodation services include workforce accommodation and related services, which are designed to house various personnel on location before, during and after drilling operations. In addition to workforce accommodation services, the Partnership also provides surface rental equipment including forklifts, manlifts, light plants, generators, compressors, loaders, trash containers and water systems. Integrated communications services are provided with the StaRComm service offering. The StaRComm system includes a satellite communication system that provides wireless intercoms integrated with telephone, fax and internet/data services throughout the drilling location.

Production and Logistics Services. Through the production and logistics services segment the Partnership offers three types of services: rig hauling, wellsite construction and production fluid services. Rig hauling services involve the moving and rig-up/rig-down of drilling rigs and related equipment. Heavy haul trucks, trailers and cranes provide the capability of rigging-down, transporting to the next drilling location and rigging-up of the drilling rig.

The Partnership provides construction services as the initial step of any new well project on land and inland marine environments. Location construction is the first step to occur after the well stake is placed marking the location for the well. In marshy areas and areas subject to greater rainfall and flooding, drilling locations require mats to maintain stability of the soil and drilling site. In addition, it also performs wellsite configuration and setup of production equipment, pipeline construction and tie-in, and location decommissioning.

F-47

STALLION OILFIELD SERVICES LTD. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

MARCH 31, 2006 AND 2007

Our production fluid services include a fleet of vacuum trucks, frac tank rentals, saltwater disposal wells and other assets used for fluid provision, transportation and disposal services.

Corporate expenses include general corporate expenses associated with managing all reportable operating segments. Corporate assets consist principally of working capital and debt financing costs.

The following table sets forth certain financial information with respect to reportable segments for the three months ended March 31, 2006 and 2007 (in thousands):

	Wellsite Support Services		Production and Logistics		Corporate			Total
	(unaudited)
2006:
Revenue	$	32,917	$	6,045	$	—		$	38,962
Cost of services		16,873		3,955		—			20,828
Segment operating profit		10,856		1,533		(3,466	)		8,923
Depreciation and amortization		3,118		485		696			4,299
Capital expenditures (1)		13,711		6,446		153			20,310
Identifiable assets		154,807		71,215		32,011			258,033
2007:
Revenue	$	46,859	$	35,213	$	—		$	82,071
Cost of services		26,236		23,442		—			49,678
Segment operating profit		11,362		6,904		(5,211	)		13,055
Depreciation and amortization		6,225		3,983		563			10,771
Capital expenditures (1)		25,600		10,900		—			36,500
Identifiable assets		299,724		167,011		34,994			501,728

(1) Excludes acquisitions

Stallion has identified its reportable segments to be wellsite support services and construction and logistics services, with goodwill allocated to each reportable segment as of March 31, 2007 of $78.6 million and $48.9 million, respectively. The change in total goodwill from December 31, 2006 to March 31, 2007 results from acquisitions made during the first three months of 2007.

13. Legal Matters and Contingencies

In the normal course of our business, we are party to various pending or threatened claims, lawsuits and administrative proceedings seeking damages or other remedies concerning our commercial operations, employees and other matters. Many of the claims against us relate to motor vehicle accidents which can result in loss of life or serious bodily injury. Although we cannot know the outcome of pending legal proceedings and the effect such outcomes may have on us, we believe that any liability resulting from the outcome of such proceedings, to the extent not otherwise provided for or covered by insurance, will not have a material adverse effect on our financial position, results of operations or liquidity.

14. Recent Accounting Pronouncements

In September 2006, the FASB issued Statement of Financial Accounting Standards No. 157, “Fair Value Measurements,” (“SFAS No. 157”) a pronouncement which provides additional guidance for using fair value to measure assets and liabilities. The pronouncement states that fair value should be based upon assumptions market participants would use to price an asset or liability, and establishes a hierarchy that prioritizes the information used to determine fair value, whereby quoted marked prices in active markets would be given highest priority

F-48

STALLION OILFIELD SERVICES LTD. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

MARCH 31, 2006 AND 2007

with lowest priority given to data provided by the reporting entity based on unobservable facts. This standard requires disclosure of fair value measurements by level within this hierarchy. SFAS No. 157 becomes effective in the first interim reporting period for the fiscal years beginning after November 15, 2006, with early adoption permitted. We are currently evaluating the impact this statement may have on our financial position, results of operations and cash flow.

In September 2006, the FASB issued FASB Staff Position No. AUG AIR-1 “Accounting for Planned Major Maintenance Activities” (“FSP No. AUG AIR-1”) FSP No. AUGAIR-1 prohibits the use of accrued-in-advance method for accounting for major maintenance activities and confirms the acceptable methods for planned major maintenance activities. FSP No. AUG AIR-1 is effective the first fiscal year beginning after December 15, 2006. We believe the adoption of FSP No. AUG AIR-1 will not have a material impact on our financial position, results of operations or cash flows.

In February 2007, the FASB issued Statement of Financial Accounting Standards No. 159, “The Fair Value Option for Financial Assets and Financial Liabilities — Including an Amendment of FASB Statement No. 115,” (“SFAS No. 159”). This pronouncement permits entities to use the fair value method to measure certain financial assets and liabilities by electing an irrevocable option to use the fair value method at specified election dates. After election of the option, subsequent changes in fair value would result in the recognition of unrealized gains or losses as period costs during the period the change occurred. SFAS No. 159 becomes effective as of the beginning of the first fiscal year that begins after November 15, 2007, with early adoption permitted. However, entities may not retroactively apply the provisions of SFAS No. 159 to fiscal years preceding the date of adoption. We are currently evaluating the impact that SFAS No. 159 may have on our financial position, results of operations and cash flows.

15. Subsequent Events

In April 2007, Stallion Heavy Haulers, LP, acquired substantially all of the operating assets of Shores Energy, Inc. located in Ratliff City, Oklahoma, for a purchase price of $29.4 million. Shores specializes in rig relocation and heavy equipment hauling and marked Stallion’s entry into the Oklahoma and the Texas Panhandle regions for its heavy haulers division.

In May 2007, the Partnership acquired Fluid Processors, Inc. located in Riverton, Wyoming, for a purchase price of $26.7 million, subject to adjustments in accordance with the purchase agreement. This acquisition expanded Stallion’s solids control service business into the Rocky Mountain region.

Also in May 2007, Stallion executed two purchase agreements to acquire the assets of Bayou Tank Services, Ltd. and various entities operating under the name of Salty’s, which marked its entry into production services.

F-49

INDEPENDENT AUDITORS’ REPORT

To the Partners

Salty’s Group

Lufkin, TX

We have audited the accompanying combined balance sheets of Salty’s Group (the “Group”) as of December 31, 2005 and 2006, and the related combined statements of operations, changes in partners’ capital (deficit) and cash flows for the period from inception (August 3, 2005) through December 31, 2005 and for the year ended December 31, 2006. These combined financial statements are the responsibility of the Group’s management. Our responsibility is to express an opinion on these combined financial statements based on our audits.

We conducted our audits in accordance with auditing standards generally accepted in the United States of America. Those standards require that we plan and perform the audits to obtain reasonable assurance about whether the combined financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the combined 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 combined financial statements referred to above present fairly, in all material respects, the combined financial position of Salty’s Group as of December 31, 2005 and 2006, and the combined results of their operations and their cash flows for the period from inception (August 3, 2005) through December 31, 2005 and for the year ended December 31, 2006, in conformity with accounting principles generally accepted in the United States of America.

/s/    UHY LLP      

UHY LLP

Houston, Texas

June 4, 2007

F-50

SALTY’S GROUP

COMBINED BALANCE SHEETS

	December 31,
	2005			2006
Assets
Current assets
Cash and cash equivalents	$	—		$	22,471
Accounts receivable—trade, net		496,712			4,695,520
Accounts receivable—related parties		—			430,210
Inventories		—			1,637,850
Prepaid expenses and other current assets		—			123,405
Total current assets		496,712			6,909,456
Property and equipment, net		4,345,810			27,697,514
Other assets		—			14,079
Total assets	$	4,842,522		$	34,621,049
Liabilities and partners’ capital
Current liabilities
Overdrafts payable	$	272,464		$	—
Accounts payable		31,945			1,768,378
Borrowings from related parties		3,135,016			10,439,635
Accrued interest		—			110,212
Deferred revenue		—			186,000
Current maturities of long-term debt		407,373			2,150,942
Total current liabilities		3,846,798			14,655,167
Asset retirement obligations		609,908			870,318
Long-term debt, net of current maturities		579,065			3,057,905
Total liabilities		5,035,771			18,583,390
Commitments and contingencies		—			—
Partners’ capital (deficit)		(193,249	)		16,037,659
Total liabilities and partners’ capital (deficit)	$	4,842,522		$	34,621,049

See notes to combined financial statements.

F-51

SALTY’S GROUP

COMBINED STATEMENTS OF OPERATIONS

	Period from inception (August 3, 2005) through December 31, 2005			Year ended December 31, 2006
Revenue	$	986,584		$	17,444,528
Operating expenses
Cost of revenue		619,807			3,146,076
Selling, general and administrative expenses		143,351			5,933,137
Depreciation		381,612			1,421,188
Accretion on asset retirement obligations		—			34,268
Total operating expenses		1,144,770			10,534,669
Income (loss) from operations		(158,186	)		6,909,859
Other income (expense)
Interest expense		(75,923	)		(598,797	)
Other income (expense)		35,860			(43,476	)
Total other expense		(40,063	)		(642,273	)
Net income (loss)	$	(198,249	)	$	6,267,586

See notes to combined financial statements.

F-52

SALTY’S GROUP

COMBINED STATEMENTS OF CHANGES IN PARTNERS’ CAPITAL (DEFICIT)

Balance at inception (August 3, 2005)	$	—
Contributions		5,000
Net loss		(198,249	)
Balance at December 31, 2005		(193,249	)
Contributions		12,265,521
Net income		6,267,586
Distributions		(2,302,199	)
Balance at December 31, 2006	$	16,037,659

See notes to combined financial statements.

F-53

SALTY’S GROUP

C OMBINED STATEMENTS OF CASH FLOWS

	Period from inception (August 3, 2005) through December 31, 2005			Year Ended December 31, 2006
Cash flows from operating activities
Net (loss) income	$	(198,249	)	$	6,267,586
Adjustments to reconcile net (loss) income to net cash (used in) provided by operating activities:
Depreciation		381,612			1,421,188
Loss on disposal of fixed assets		—			33,247
Provision for bad debts		—			808,538
Accretion on asset retirement obligations		—			34,268
Change in operating assets and liabilities:
Accounts receivable		(496,712	)		(5,437,556	)
Prepaid expenses and other current assets		—			(123,405	)
Other assets		—			(14,079	)
Inventories		—			(1,637,850	)
Accounts payable		31,945			1,736,433
Accrued interest		—			110,212
Deferred revenue		—			186,000
Net cash (used in) provided by operating activities		(281,404	)		3,384,582
Cash flows from investing activities:
Purchases of property and equipment		(4,117,514	)		(24,579,997	)
Net cash used in investing activities		(4,117,514	)		(24,529,997	)
Cash flows from financing activities
Bank overdraft		272,464			(272,464	)
Contributions		5,000			12,265,521
Distributions		—			(2,302,199	)
Borrowings from related parties, net		3,135,016			7,304,619
Proceeds from long-term debt		1,089,901			6,932,274
Payments on long-term debt		(103,463	)		(2,709,865	)
Net cash provided by financing activities		4,398,918			21,217,886
Net increase in cash and cash equivalents		—			22,471
Cash and cash equivalents, beginning of period		—			—
Cash and cash equivalents, end of period	$	—		$	22,471
Supplemental of cash flow information
Cash paid for interest	$	75,923		$	488,585
Non-cash operating and investing activity
Asset retirement obligation additions	$	609,908		$	226,142

See notes to combined financial statements.

F-54

SALTY’S GROUP

NOTES TO COMBINED FINANCIAL STATEMENTS

DECEMBER 31, 2005 AND 2006

1. Nature of Operations

Salty’s Group (the “Group” or “Salty’s”) is headquartered in Lufkin, Texas and provides frac tank rentals and sales, and saltwater hauling and disposal services in the United States of America, primarily in Texas.

Ten Texas limited partnerships under common control are combined under Salty’s for financial statement presentation (the “Group”). The ten entities include Salty’s Manufacturing, Ltd. (“Mfg”), Salty’s Well Service, Ltd. (“Well Service”), Salty’s Well Johnson No. 1, Ltd. (“Johnson 1”), Salty’s Well Johnson No. 2, Ltd. (“Johnson 2”), Salty’s Well Johnson No. 3, Ltd. (“Johnson 3”), Salty’s Well Johnson No. 4, Ltd. (“Johnson 4”), Salty’s Parker No. 1, Ltd. (“Parker”), Salty’s Well Shelby No. 1, Ltd. (“Shelby 1”), Salty’s Panola 1, Ltd. (“Panola”), and Salty’s Nacogdoches 1, Ltd. (“Nacogdoches”). Salty’s first limited partnership was formed on August 3, 2005 in Texas.

2. Summary of Significant Accounting Policies

Principles of Combination: The combined financial statements include the financial statements of the commonly controlled partnerships: Mfg, Well Service, Johnson 1, Johnson 2, Johnson 3, Johnson 4, Parker, Shelby 1, Panola and Nacogdoches. All significant intercompany balances and transactions have been eliminated in combination. The Group has no interest in any other organization, entity, company, or contract that could require any evaluation under FASB Interpretation No. 46 or Accounting Research Bulletin No. 51.

Cash and Cash Equivalents: For purposes of the statements of cash flows, the Group considers all highly liquid debt instruments purchased with a maturity of three months or less to be cash equivalents. There were no cash equivalents as of December 31, 2005 and 2006.

Fair Value of Financial Instruments: The carrying value amount of cash, accounts receivable, accounts payable and accrued liabilities approximate fair value due to the short maturity of these instruments. The carrying amount of all debt approximates fair value because the Group’s current borrowing rate is based on a variable market rate of interest.

Accounts Receivable: The Group extends credit to its customers based on informal discussions with management and generally collateral is not required. Outstanding accounts receivable are assessed routinely and an allowance is set up when accounts are deemed uncollectible. Accounts receivable are net of allowance for doubtful accounts of approximately $0 and $809,000 as of December 31, 2005 and 2006, respectively.

Inventories: Inventories are valued at the lower of cost or market with cost being determined using the average costing method. Cost includes applicable overhead and labor. Market is considered as the lower of either estimated replacement cost or estimated realizable value. The Group had no inventories as of December 31, 2005. Inventories consisted of raw materials and finished goods of approximately $1,400,000 and $240,000, respectively, as of December 31, 2006.

Property and Equipment: Property and equipment are stated at cost. Depreciation is provided on the straight-line method over the estimated useful lives of the related assets, which range from three to fifteen years. All expenditures for major renewals and betterments are capitalized. Expenditures for maintenance and repairs are charged to expense as incurred.

Impairment of Long-Lived Assets: The Group evaluates an asset for impairment when events or circumstances indicate that a long-lived asset’s carrying value may not be recovered. These events include

F-55

SALTY’S GROUP

NOTES TO COMBINED FINANCIAL STATEMENTS—(Continued)

DECEMBER 31, 2005 AND 2006

market declines, changes in the manner in which the Group intends to use an asset, decisions to sell an asset and adverse changes in the legal or business environment.

If events or circumstances indicate that a long-lived asset’s carrying value may not be recoverable, the Group estimates the future discounted cash flows from the asset for which the lowest level of separate cash flows can be measured, to determine if the asset is impaired. If the total undiscounted future cash flows are less than the carrying amount for the asset, the Group estimates the fair value of the asset either through reference to sales data for similar assets, or by using a discounted cash flow approach. The asset’s carrying value is then adjusted downward to the fair value. These cash flow estimates require the Group to make estimates and assumptions for many years into the future for pricing demand, competition, operating costs, legal, regulatory and other factors and these estimates or assumptions could change significantly either positively or negatively. No impairment losses have been recorded through December 31, 2006.

Federal Income Taxes: Salty’s is treated as a partnership for federal income tax purposes; accordingly, a provision for income taxes has not been recorded in the accompanying financial statements. Partnership income or losses are reflected in the partners’ income tax returns in accordance with their ownership percentages.

Revenue Recognition: The Group recognizes revenue when it is realized and earned. The Group considers revenue to be realized and earned when services have been provided to the customer, the product has been delivered, the sales price has been fixed or determinable and collectibility is reasonably assured. Revenue from rental agreements is recognized over the rental period and revenue from service agreements is recognized when services have been rendered. Generally services are provided over a relatively short time.

Asset Retirement Obligations: The Group accounts for asset retirement obligations in accordance with Financial Accounting Standards Board (FASB) No. 143 Accounting for Asset Retirement Obligations. SFAS No. 143 requires the Group to record the fair value of an asset retirement obligation as a liability in the period in which it incurs a legal obligation associated with the retirement of tangible long-lived assets and capitalize on equal amount as a cost of the asset depreciating it over the life of the asset. Subsequent to the initial measurement of the asset retirement obligation, the obligation is adjusted at the end of each quarter to reflect the passage of time, changes in the estimated future cash flows underlying the obligation, acquisition or construction of assets, and settlements of obligations.

The Group owns and operates salt water disposal sites which are subject to rules and regulations regarding usage and eventual closure. The following table reflects the changes in the liability during 2005 and 2006:

	2005		2006
Liability for asset retirement obligations, beginning of the period	$	—	$	609,908
Accretion expense		—		34,268
Obligations for new wells drilled		609,908		226,142
Liability for asset retirement obligations, end of the period	$	609,908	$	870,318

Concentration of Credit Risk: The Group’s customer base consists primarily of oil and natural gas exploration and production companies and drilling contractors. The Group performs ongoing evaluations of its customers but generally does not require collateral on its trade receivables. During the period ended December 31, 2005, no customer accounted for more than 10 percent of total sales. During the year ended December 31, 2006, one customer accounted for 12.3 percent of total sales. The balance due from this customer as of December 31, 2006 was zero.

F-56

SALTY’S GROUP

NOTES TO COMBINED FINANCIAL STATEMENTS—(Continued)

DECEMBER 31, 2005 AND 2006

During 2005 and 2006, the Group had cash in excess of federally insured limits deposited in a bank. The Group monitors the financial condition of the bank and has experienced no losses associated with its accounts.

Company Allocations: The income or loss is allocated to the partners in accordance with the individual limited partnership agreements. Partners’ capital (deficit) consists of the following as of December 31, 2005 and 2006:

	2005			2006
General partner	$	(1,982	)	$	64,658
Limited partners		(191,267	)		15,973,001
	$	(193,249	)	$	16,037,659

Use of Estimates: The preparation of consolidated financial statements in conformity with accounting principles generally accepted in the United States of America (“GAAP”) requires management to make certain estimates and assumptions. These estimates and assumptions affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities at the balance sheet date and the amounts of revenue and expenses recognized during the reporting period. Areas where critical accounting estimates are made by management include:

• Depreciation of property and equipment,

• Impairment of property and equipment,

• Allowance for doubtful accounts, and

• Asset retirement obligations.

The Group analyzes its estimates based on historical experience and various other assumptions that it believes to be reasonable under the circumstances. Under different assumptions or conditions, the actual results could differ, possibly materially from those previously estimated. Many of the conditions impacting these assumptions are outside of the Group’s control.

F-57

SALTY’S GROUP

NOTES TO COMBINED FINANCIAL STATEMENTS—(Continued)

DECEMBER 31, 2005 AND 2006

3. Property and Equipment

Major classifications of property and equipment are as follows:

	Estimated Useful Life	December 31,
		2005			2006
Disposal facilities	5-15 years	$	2,827,265		$	17,349,762
Frac tanks	10 years		160,130			3,683,263
Automobiles and trucks	3-5 years		839,122			1,903,859
Buildings	15 years		11,246			1,740,964
Equipment	3-7 years		—			1,425,077
Trailers	3-5 years		495,673			1,312,163
Other depreciable property	3-5 years		—			296,582
			4,333,436			27,711,670
Less: accumulated depreciation			(381,612	)		(1,594,736	)
			3,951,824			26,116,934
Land			393,986			1,580,580
Total property and equipment		$	4,345,810		$	27,697,514

4. Borrowings from Related Parties

From time to time, the Group borrows from its affiliates for purchases of equipment and the funding of operations. The amounts owed to affiliates do not generally have formal agreements, thus all amounts have been classified as current in borrowings from related parties. Interest expense on borrowings from related parties was approximately $14,000 and $441,000 for the period from inception (August 3, 2005) through December 31, 2005 and the year ended December 31, 2006, respectively.

5. Long-Term Debt

	December 31,
	2005			2006
Various notes payable to a bank, payable in monthly installments from $3,345 to $60,679, including interest at rates from 7.00% to 8.25% per annum, collateralized by inventory and equipment. Notes mature from August 2008 to November 2009.	$	231,147		$	2,946,587
Various notes payable to a financing company, payable in monthly installments from $1,794 to $20,118, including interest at rates from 6.99% to 8.00% per annum, collateralized by vehicles. Notes mature from July 2008 to September 2011.		755,291			1,662,044
Various notes payable to a bank, payable in monthly installments from $1,004 to $19,161, including interest at rates from 8.00% to 8.25% per annum, collateralized by trailers. Notes mature from March 2009 to September 2011.		—			600,216
Total long-term debt		986,438			5,208,847
Less: current maturities		(407,373	)		(2,150,942	)
	$	579,065		$	3,057,905

F-58

SALTY’S GROUP

NOTES TO COMBINED FINANCIAL STATEMENTS—(Continued)

DECEMBER 31, 2005 AND 2006

Estimated future maturities of long-term debt are as follows:

Year Ending December 31,
2007	$	2,150,942
2008		2,104,720
2009		943,454
2010		9,731
	$	5,208,847

6. Related Party Transactions

During 2005, the Group purchased land for one of its well sites from a related party for approximately $150,000. In addition, the Group earned revenue from a related party of approximately $54,000 and $201,000 for the period from inception (August 3, 2005) through December 31, 2005 and the year ended December 31, 2006, respectively.

7. Commitments and Contingencies

Environmental: Salty’s is subject to various federal, state and local environmental laws and regulations that establish standards and requirements for protection of the environment. Salty’s cannot predict the future impact of such standards and requirements which are subject to change and can have retroactive effectiveness. Salty’s continues to monitor the status of these laws and regulations. Management believes that the likelihood of the disposition of any of these items resulting in a material adverse impact to Salty’s financial position, liquidity, capital resources or future results of operations is remote.

Currently, Salty’s has not been fined, cited or notified of any environmental violations that would have a material adverse effect upon its financial position, liquidity or capital resources. However, management does recognize that by the very nature of its business, material costs could be incurred in the near term to bring Salty’s into total compliance. The amount of such future expenditures is not determinable due to several factors including the unknown magnitude of possible contamination, the unknown timing and extent of the corrective actions which may be required, the determination of Salty’s liability in proportion to other responsible parties and the extent to which such expenditures are recoverable from insurance or indemnification.

Litigation: From time to time, Salty’s is a party to litigation or other legal proceedings that Salty’s considers to be a part of the ordinary course of business. Salty’s is not currently involved in any legal proceedings that it considers probable or reasonably possible, individually or in the aggregate, to result in a material adverse effect on its financial condition, results of operations or liquidity.

F-59

REPORT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS

April 16, 2007

To the Board of Directors of

Bayou Tank Company and Subsidiary

We have audited the accompanying consolidated balance sheet of Bayou Tank Company and Subsidiary (the “Company”) as of December 31, 2006, and the related consolidated statements of operations and accumulated deficit and cash flows for the year then ended. These consolidated financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on these consolidated financial statements based on our audit.

We conducted our audit in accordance with auditing standards generally accepted in the United States of America. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the consolidated financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the consolidated financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall consolidated financial statements presentation. We believe that our audit provides 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 Bayou Tank Company and Subsidiary as of December 31, 2006, and the results of their operations and their cash flows for the year then ended in conformity with accounting principles generally accepted in the United States of America.

/s/ Melton & Melton, L.L.P.

F-60

BAYOU TANK COMPANY AND SUBSIDIARY

CONSOLIDATED BALANCE SHEET

DECEMBER 31, 2006

Assets
Current assets
Cash				$	207,711
Restricted cash					406,303
Accounts receivable					6,026,607
Unbilled revenue					465,865
Inventory					23,873
Prepaid insurance					588,775
Total current assets					7,719,134
Fixed assets, net					31,758,465
Other assets					71,850
				$	39,549,449
Liabilities and stockholders’ equity
Current liabilities
Current maturities of long-term debt				$	7,289,874
Accounts payable					5,328,199
Accrued liabilities					409,677
Total current liabilities					13,027,750
Long-term debt, net of current maturities					17,638,231
Minority interest in subsidiary					7,984,761
Stockholders’ equity
Common stock—$1 par value, 10,000 shares authorized, 2,000 shares issued and outstanding	$	2,000
Additional paid-in capital		1,407,572
Accumulated deficit		(510,865	)		898,707
				$	39,549,449

See notes to financial statements.

F-61

BAYOU TANK COMPANY AND SUBSIDIARY

CONSOLIDATED STATEMENT OF OPERATIONS

AND ACCUMULATED DEFICIT

FOR THE YEAR ENDED DECEMBER 31, 2006

Revenue
Rental	$	10,201,205
Vacuum		8,343,676
Delivery		1,871,265
Pumping		776,533
Product		248,475
Disposal		37,828		$	21,478,982
Operating expenses
Sales		6,608,423
General and administrative		1,533,692
Depreciation		3,181,692
Automobile and transportation		1,877,984
Maintenance and repairs		1,095,386
Insurance		759,899			15,057,076
Other income (expense)
Interest		(1,350,058	)
Gain on sale of fixed assets		43,533
Other		17,548			(1,288,977	)
Income before minority interest in income of subsidiary					5,132,929
Minority interest in income of subsidiary					(5,023,190	)
Net income					109,739
Accumulated deficit
Balance, beginning of year					(620,604	)
Balance, end of year				$	(510,865	)

See notes to financial statements.

F-62

BAYOU TANK COMPANY AND SUBSIDIARY

CONSOLIDATED STATEMENT OF CASH FLOWS

FOR THE YEAR ENDED DECEMBER 31, 2006

Cash flows from operating activities
Net income	$	109,739
Adjustments to reconcile net income to net cash provided by operating activities
Depreciation		3,181,692
Gain on sale of fixed assets		(43,533	)
Minority interest in income of subsidiary		5,023,190
Cash provided by (used for) the change in
Restricted cash		34,999
Accounts receivable		(2,887,373	)
Unbilled revenue		(465,865	)
Inventory		(3,133	)
Prepaid insurance and other assets		(338,145	)
Accounts payable		1,322,256
Accrued liabilities		315,242
Net cash provided by operating activities		6,249,069
Cash flows from investing activities
Purchase of fixed assets		(4,920,365	)
Proceeds from sale of fixed assets		97,239
Net cash used in investing activities		(4,823,126	)
Cash flows from financing activities
Additions to long-term debt		3,265,966
Payments on long-term debt		(3,106,616	)
Payments on capital lease obligations		(1,377,582	)
Net cash used in financing activities		(1,218,232	)
Net increase in cash		207,711
Cash, beginning of year		0
Cash, end of year	$	207,711
Supplemental cash flows information
Cash paid for:
Interest	$	1,071,382
Supplemental noncash investing and financing information
Fixed assets acquired through the assumption of long-term debt	$	12,522,342
Fixed assets acquisitions included in accounts payable	$	2,010,871
Refinancing of capital leases with long-term debt	$	11,862,447

See notes to financial statements.

F-63

BAYOU TANK COMPANY AND SUBSIDIARY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

DECEMBER 31, 2006

1. Summary of Significant Accounting Policies

Nature of Business

Bayou Tank Company (a Texas corporation) and Bayou Tank Services, LTD. (a Texas limited partnership) (the “Partnership”) are engaged to lease frac tanks to and perform other oil field-related services for oil field, refining, and industrial customers.

Bayou Tank Company and the Partnership (together the “Company”) are headquartered in Houston, Texas, and their primary market is in east Texas. If the oil and gas industry declined in east Texas, the Company would suffer significantly, although frac tanks and other equipment would be moved to other higher activity areas in such an event.

Principles of Consolidation

Bayou Tank Company is the general partner of the Partnership. Bayou Tank Company’s profit/loss-sharing interest was 82.26% upon the contribution of substantially all of its assets and liabilities to the Partnership in March 2001. This interest gradually decreased to 1% in 2006. As the general partner, Bayou Tank Company has sole voting and management control over the operations of the Partnership. Accordingly, the accounts of the Partnership are consolidated with those of Bayou Tank Company in the accompanying consolidated financial statements. All intercompany transactions and balances have been eliminated in the consolidation.

Use of Estimates

The preparation of the Company’s consolidated financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenues and expenses during the reporting period. Accordingly, actual results could differ from those estimates. Management believes that these estimates and assumptions provide a reasonable basis for the fair presentation of the consolidated financial statements.

Revenue Recognition, Receivables, and Unbilled Revenue

Revenue is recognized as services are performed. Accounts receivable represent the revenue recognized on the Company’s completed services that have been billed but not collected. Unbilled revenue represents the revenues recognized on the Company’s completed services that have not been billed.

Trade and other receivables are recorded at their outstanding balances adjusted for an allowance for doubtful accounts when necessary. The allowance for doubtful accounts is determined by analyzing the payment history and credit worthiness of each customer. Receivable balances are charged off against the allowance for doubtful accounts when they are considered uncollectible by management. Recoveries of receivables previously charged off are recorded as income when received. No allowance for doubtful accounts was considered necessary as of December 31, 2006.

Restricted Cash

In accordance with a long-term debt agreement (Note 4), the Company is required to maintain a minimum cash balance of $400,000 in a separate bank account.

F-64

BAYOU TANK COMPANY AND SUBSIDIARY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

DECEMBER 31, 2006

Inventory

Inventory of supplies is stated at the lower of cost or market. Cost is determined using the first-in, first-out (FIFO) method.

Fixed Assets

Fixed assets are recorded at cost. Improvements or betterments of a permanent nature are capitalized. Expenditures for maintenance and repairs are charged to expense as incurred. The cost of assets retired or otherwise disposed of and the related accumulated depreciation are eliminated from the accounts in the year of disposal. Gains or losses resulting from property disposals are credited or charged to operations.

Depreciation is provided for using the straight-line method over the estimated service lives of the respective classes of assets. The estimated service lives of the respective classes of assets are as follows:

Frac tanks	2 - 10 years
Trucks	2 - 5 years
Salt water disposal well	15 years
Miscellaneous equipment	2 - 5 years
Yard facility and improvements	3 - 39 years
Capital improvements	2 years

Other Assets

Other assets are recorded at cost and consist primarily of loan costs incurred in obtaining long-term debt financing. The costs are amortized using the straight-line method over the terms of the loans. Amortization of approximately $16,000 is included in general and administrative expenses in the consolidated statement of operations and accumulated deficit.

Income Taxes

Deferred income tax assets and liabilities are recognized based on temporary differences between the financial statement and tax bases of assets and liabilities that will result in taxable or deductible amounts in the future using enacted tax laws and rates applicable to the periods in which the differences are expected to affect taxable income. Valuation allowances are established when necessary to reduced deferred tax assets to the amount expected to be realized.

2. Fixed Assets

Fixed assets at December 31, 2006 consist of the following:

Land	$	39,919
Frac tanks		26,866,391
Trucks		6,879,989
Salt water disposal well		3,336,998
Miscellaneous equipment		642,622
Yard facility and improvements		604,662
Capital improvements		192,496
		38,563,077
Less: Accumulated depreciation		6,804,612
	$	31,758,465

F-65

BAYOU TANK COMPANY AND SUBSIDIARY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

DECEMBER 31, 2006

3. Capital Lease Obligations

The Company leased certain frac tanks and trucks under noncancelable long-term lease agreements expiring in November 2006 through August 2010. These leases were classified as capital leases. In May 2006, the Company refinanced these capital lease obligations through the issuance of long-term debt totaling $12,293,986, including a prepayment penalty fee of $431,539. The Company incurred approximately $508,000 in interest expense with respect to these capital leases in 2006.

4. Long-Term Debt

Note, payable to a financial institution in monthly installments of $301,366, including interest at 7.25%, maturing in May 2010, collateralized by certain trucks and frac tanks previously under capital leases (Note 3), pledged by a $400,000 escrow account, and a $6 million guaranty by a stockholder of the Company	$	10,635,047
Note, advanced to the Partnership in three separate tranches, principal payable four months subsequent to the date of the advance for a combined total of $251,374, interest payable monthly at 7.25%, maturing on various dates from April 2010 to August 2010, and collateralized by certain frac tanks		9,238,091
Note, payable to a financial institution, interest payable at 8.5% beginning in October 2006, principal payable in monthly installments of $46,937 beginning in February 2007, maturing in January 2011, collateralized by substantially all of the Company’s assets, and a $1.9 million guaranty by a stockholder of the Company		1,769,710
Four notes included in one debt agreement, payable to a financial institution in combined monthly installments of $30,933, including interest at 7.25%, maturing on various dates from November 2010 to April 2011, and collateralized by certain trucks	$	1,338,173
Line of credit with a financial institution for $1,000,000, interest payable monthly at prime plus 0.5%, principal due at maturity in April 2007, collateralized by substantially all of the Partnership’s assets, and guaranteed by a stockholder of the Company		600,000
Note, payable to a financial institution in monthly installments of $18,606, including interest at 6.5%, maturing in July 2008, collateralized by substantially all of the Partnership’s assets and life insurance on a stockholder of the Company, and guaranteed by a stockholder of the Company		332,621
Note, payable to a financial institution in monthly installments of $5,021, including interest at 7%, maturing in December 2006, collateralized by a building		230,295
Notes (28 total), payable to financial institutions in combined monthly installments of $29,630 including interest from 7.49% to 10.95%, maturing on various dates from December 2007 to December 2011, collateralized by certain vehicles and equipment		784,168
		24,928,105
Less: Current maturities		(7,289,874	)
	$	17,638,231

F-66

BAYOU TANK COMPANY AND SUBSIDIARY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

DECEMBER 31, 2006

The prime rate in effect at December 31, 2006 was 8.25%.

Future maturities of long-term debt are as follows:

For the Year Ending December 31:
2007	$	7,289,874
2008		6,923,118
2009		7,162,094
2010		3,472,550
2011		80,469
	$	24,928,105

5. Letter of Credit

The Company has a letter of credit for the benefit of the Railroad Commission for $25,000. The letter of credit matures on April 1, 2008. There is no outstanding balance owed at December 31, 2006 on this letter of credit.

6. Accounts Payable

Accounts payable at December 31, 2006 consist of the following:

Trade	$	4,192,068
Related parties (Note 7)		1,136,131
	$	5,328,199

7. Related Parties

The Company had the following accounts payable to related parties at December 31, 2006:

Wapiti Energy, LLC and subsidiaries (affiliated through common ownership)	$	642,013
Stockholder of Bayou Tank Company and limited partner of the Partnership		494,118
	$	1,136,131

The Company received administrative services from Wapiti Energy, LLC. For the year ended December 31, 2006, the Company paid this affiliate a total of approximately $180,000 for these services.

For the year ended December 31, 2006, the Company incurred expenses for consulting services from a stockholder of the Company of approximately $240,000.

The Company leases office space on a month-to-month basis from Wapiti Energy, LLC. Rental expense to this affiliated company amounted to approximately $74,000 in 2006.

F-67

BAYOU TANK COMPANY AND SUBSIDIARY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

DECEMBER 31, 2006

8. Income Taxes

At December 31, 2006, the Company had approximately $1,124,000 of net operating loss carryforwards available to offset its taxable income in future years. These net operating losses will expire through 2022.

The Company’s net deferred tax asset consisted of the following at December 31, 2006:

Deferred tax asset arising from net operating loss carryforwards	$	382,060
Valuation allowance on deferred tax assets		(382,060	)
Net deferred tax asset	$	0

The income tax provision differs from the amount computed at the statutory rate as follows:

Income tax expense at the statutory rate	$	37,311
Decrease in deferred tax asset valuation allowance		(37,311	)
	$	0

9. Employee Benefits

The Company has a SIMPLE-IRA (the “Plan”). Under the terms of the Plan, the Company matches each participant’s contribution 100% up to the lesser of 3% of the participant’s total compensation or $6,000. For the year ended December 31, 2006, the Company contributed approximately $40,000 to the Plan.

10. Concentrations of Credit Risk

Financial instruments that subject the Company to concentrations of credit risk consist primarily of cash and trade accounts receivable. The Company maintains its cash with a bank that it believes has high credit quality. At times, cash balances may be in excess of federally insured limits. Trade accounts receivable arise primarily from the leasing of frac tanks and services provided to oil field, refining, and industrial customers in Texas. The Company manages this credit risk by regularly monitoring the payment history and credit worthiness of its customers.

F-68

BAYOU TANK COMPANY AND SUBSIDIARY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

DECEMBER 31, 2006

11. Significant Customer

Effective February 1, 2005, the Company entered into an Equipment Supply Agreement (the “Agreement”) with its significant customer. Under the terms of the Agreement, the Company supplies a total of 300 new frac tanks to the customer within the times and specifications as described in the Agreement. In return, the customer pays the Company $35 per day for the number of tanks in use. If payment is not made within 30 days of receipt of the invoice, interest at 12% accrues until the invoice is paid by the customer. The Agreement terminates in February 2008 with an option, at the end of the term, to renew the Agreement for an additional three years. Upon renewal, the amount the customer pays per day for the number of tanks in use will decrease to $25 per day. Approximately 41% of trade accounts receivable at December 31, 2006, and 62% of total sales for the year then ended arose from this customer.

F-69

INDEPENDENT AUDITORS’ REPORT

To the Stockholders

L.E.G. Rentals, Inc. and Fluid Processors, Inc.

Riverton, WY

We have audited the accompanying combined balance sheet of L.E.G. Rentals, Inc. and Fluid Processors, Inc., collectively (the “Company”) as of December 31, 2006 and related combined statements of operations, stockholders’ equity and cash flows for the year then ended. These financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on these combined financial statements based on our audit.

We conducted our audit in accordance with auditing standards generally accepted in the United States of America. 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 audit provides a reasonable basis for our opinion.

In our opinion, the combined financial statements referred to above present fairly, in all material respects, the financial position of the Company as of December 31, 2006 and the results of its combined operations and its combined cash flows for the year then ended, in conformity with accounting principles generally accepted in the United States of America.

Our audit was conducted for the purpose of forming an opinion on the combined financial statements taken as a whole. The supplemental schedule on page F-79 is presented for purposes of additional analysis and is not required as part of the combined financial statements. Such information has been subjected to the auditing procedures applied in the audit of the combined financial statements and, in our opinion, is fairly stated in all material respects in relation to the combined financial statements taken as a whole.

/s/    UHY LLP      

UHY LLP

Houston, Texas

May 30, 2007

F-70

L.E.G. RENTALS, INC. AND FLUID PROCESSORS, INC.

COMBINED BALANCE SHEET

DECEMBER 31, 2006

Assets
Current assets
Cash and cash equivalents	$	3,842,575
Accounts receivable-trade, less allowance for doubtful accounts of $20,991		1,977,302
Prepaid expenses and other current assets		7,099
Total current assets		5,826,976
Property and equipment, net		5,119,926
Total assets	$	10,946,902
Liabilities and Stockholders’ Equity
Current liabilities
Accounts payable-trade	$	302,166
Accrued expenses		288,675
Income tax payable		1,635,036
Total current liabilities		2,225,877
Deferred tax liability		164,832
Total liabilities		2,390,709
Stockholders’ equity		8,556,193
Total liabilities and stockholders’ equity	$	10,946,902

See notes to combined financial statements.

F-71

L.E.G. RENTALS, INC. AND FLUID PROCESSORS, INC.

COMBINED STATEMENT OF INCOME

YEAR ENDED DECEMBER 31, 2006

Service revenue	$	17,540,440
Operating expenses
Cost of services		5,664,762
Selling, general and administrative		2,767,758
Depreciation and amortization		1,202,278
Total operating expenses		9,634,798
Operating income		7,905,642
Other income (expense)
Other income		25,397
Other expense		(15,171	)
Total other income		10,226
Income before provision for income taxes		7,915,868
Provision for income taxes
Federal-current		3,335,062
Federal-deferred		(611,755	)
State		224,614
		2,947,921
Net income	$	4,967,947

See notes to combined financial statements.

F-72

L.E.G. RENTALS, INC. AND FLUID PROCESSORS, INC.

COMBINED STATEMENT OF CHANGES IN STOCKHOLDERS’ EQUITY

YEAR ENDED DECEMBER 31, 2006

	Common Stock		Retained Earnings			Accumulated Other Comprehensive Loss			Total
Balances, January 1, 2006	$	16,500	$	4,144,167		$	(12,275	)	$	4,148,392
Dividends		—		(572,421	)		—			(572,421	)
Unrealized gain (loss) on investments		—		—			14,730			14,730
Realized gain on investments		—		—			(2,455	)		(2,455	)
Net income		—		4,967,947			—			4,967,947
Balances, December 31, 2006	$	16,500	$	8,539,693		$	—		$	8,556,193

See notes to combined financial statements.

F-73

L.E.G. RENTALS, INC. AND FLUID PROCESSORS, INC.

COMBINED STATEMENT OF CASH FLOWS

YEAR ENDED DECEMBER 31, 2006

Cash flows from operating activities
Net income	$	4,967,947
Adjustments to reconcile net income to net cash provided by operating activities
Depreciation		1,202,278
Bad debts		20,991
Deferred tax expense		(611,755	)
Gain on sale of available for sale securities		(2,455	)
Changes in operating assets and liabilities
Accounts receivable-trade		(809,405	)
Accounts receivable-stockholder		10,000
Prepaid expenses and other current assets		1,316
Accounts payable		(23,018	)
Income tax payable		685,241
Net cash provided by operating activities		5,441,140
Cash flows from investing activities
Cash paid for property and equipment		(2,898,543	)
Proceeds received from sale of investments		113,250
Net cash used in investing activities		(2,785,293	)
Cash flows from financing activities
Distribution to shareholders		(410,000	)
Net cash used in financing activities		(410,000	)
Increase in cash and cash equivalents		2,245,847
Cash and cash equivalents-beginning of period		1,596,728
Cash and cash equivalents-end of period	$	3,842,575
Supplemental cash flow information
Cash paid for taxes	$	2,874,435
Non-cash financing and investing activity
Property and equipment distributed to stockholders	$	162,421

See notes to combined financial statements.

F-74

L.E.G. RENTALS, INC. AND FLUID PROCESSORS, INC.

NOTES TO COMBINED FINANCIAL STATEMENTS

DECEMBER 31, 2006

1. Significant Accounting Policies

Nature of Business: L.E.G. Rentals, Inc. (“LEG”) and Fluid Processors, Inc. (“FPI”), collectively known as (the “Company”) is engaged in the rental of equipment to oil and gas companies and operators at drilling locations in order to separate the waste disposal from the well into solid and liquid forms. The process separates the solid waste from the liquid material into a dry solid form so that liquids can be recycled back into the well. This allows the customers to reduce the amount of waste produced in the drilling operations. The Company’s primary market area is the Rocky Mountain region of the United States of America. The Company operates from Riverton, Wyoming.

LEG was incorporated in Wyoming on September 6, 1977, and is authorized to issue unlimited shares of no par common voting stock and unlimited shares of no par common non-voting stock. As of December 31, 2006, there are 22,800 common voting shares issued and outstanding.

FPI was incorporated in Wyoming on June 27, 1990, and is authorized to issue unlimited shares of no par common voting stock and unlimited shares of no par common non-voting stock. As of December 31, 2006, there are 6,500 common voting shares issued and outstanding.

Principles of Combination: The accompanying Combined Financial Statements include the accounts LEG and FPI, which are under common control and ownership. All significant intercompany profits, accounts, and transactions have been eliminated in the combination. Stallion has no interest in any other organization, entity, partnership, or contract that could require any evaluation under FASB Interpretation No. 46 or Accounting Research Bulletin No. 51. All significant intercompany balances and transactions have been eliminated in consolidation.

Cash and Cash Equivalents: For purposes of the statement of cash flows, cash equivalents include time deposits, certificates of deposit and all highly liquid debt instruments with original maturities of three months or less.

Accounts Receivable: The Company extends credit to its customers based on informal discussions with the management of potential customers. Outstanding accounts receivable are assessed routinely and an allowance is set up when accounts are deemed uncollectible.

Investments: The Company determines the appropriate classification of its investments in debt and equity securities at the time of purchase and reevaluates such determinations at each balance sheet date. Debt securities are classified as held-to-maturity when the Company has the positive intent and ability to hold the securities to maturity. Debt securities for which the Company does not have the intent or ability to hold to maturity are classified as available-for-sale. Held-to-maturity securities are recorded as either short-term or long-term on the balance sheet based on contractual maturity date and are stated at amortized cost. Marketable securities that are bought and held principally for the purpose of selling them in the near term are classified as trading securities and are reported at fair value, with unrealized gains and losses recognized in earnings. Debt and marketable equity securities not classified as held-to-maturity or as trading, are classified as available-for-sale, and are carried at fair market value, with the unrealized gains and losses, included in the determination of comprehensive income and reported in stockholder’s equity.

Property and Equipment: Property and equipment are stated at cost. Depreciation is provided on the straight line method over the estimated useful lives of the related assets. All expenditures for major renewals and betterments are capitalized. Expenditures for maintenance and repairs are charged to expense as incurred.

F-75

L.E.G. RENTALS, INC. AND FLUID PROCESSORS, INC.

NOTES TO COMBINED FINANCIAL STATEMENTS—(Continued)

DECEMBER 31, 2006

Impairment of Long-lived Assets: The Company evaluates an asset for impairment when events or circumstances indicate that a long-lived asset’s carrying value may not be recovered. These events include market declines, changes in the manner in which the Company intends to use an asset, decisions to sell an asset and adverse changes in the legal or business environment.

If events or circumstances indicate that a long-lived asset’s carrying value may not be recoverable, the Company estimates the future undiscounted cash flows from the asset for which the lowest level of separate cash flows can be measured, to determine if the asset is impaired. If the total undiscounted future cash flows are less than the carrying amount for the asset, the Company estimates the fair value of the asset either through reference to sales data for similar assets, or by using a discounted cash flow approach. The asset’s carrying value is then adjusted downward to the fair value. These cash flow estimates require the Company to make estimates and assumptions for many years into the future for pricing demand, competition, operating costs, legal, regulatory and other factors and these estimates or assumptions could change significantly either positively or negatively.

Income Taxes: The Company accounts for income taxes under FASB Statement No. 109, “Accounting for Income Taxes”. Deferred income tax assets and liabilities are determined based upon differences between financial reporting and tax basis of assets and liabilities and are measured using the enacted tax rates and laws that will be in effect when the differences are expected to reverse. Deferred taxes result primarily from property and equipment.

Revenue Recognition: Revenue from rental agreements are recognized over the rental period and revenue from service agreements are recognized when services have been rendered.

Advertising: The Company’s policy is to expense advertising costs as incurred. Advertising costs amounted to approximately $6,000 for the year ended December 31, 2006.

Concentration of Risk: During 2006, the Company had cash deposited in a bank which was in excess of federally insured limits. The Company monitors the financial condition of the bank and has experienced no losses associated with its account.

The Company’s customer base consists primarily of independent oil and natural gas producers. The Company performs ongoing evaluations of its customers but generally does not require collateral on its trade receivables. During the year ended December 31, 2006, sales to two customers accounted for approximately 55% and 15% of total sales, respectively, and approximately $1,023,000 and $209,000 are due from customers as of December 31, 2006, respectively.

Use of Estimates: The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect certain reported amounts of assets and liabilities and 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.

F-76

L.E.G. RENTALS, INC. AND FLUID PROCESSORS, INC.

NOTES TO COMBINED FINANCIAL STATEMENTS—(Continued)

DECEMBER 31, 2006

2. Property and Equipment

Major classifications of property and equipment and estimated depreciable lives as of December 31, 2006 are as follows:

	Estimated Life
Rental equipment	5-10 years	$	7,721,632
Vehicles	3-5 years		431,982
Leasehold improvements	various		58,279
Office equipment	3-5 years		14,592
			8,226,485
Less: accumulated depreciation			(3,117,702	)
			5,108,783
Construction in progress-building	N/A		11,143
		$	5,119,926

3. Lease Commitments

The Company leases office space from a shareholder with no formal rental agreement in place as of December 31, 2006. Rent expense incurred for this office space was approximately $52,000 for the year ended December 31, 2006.

The Company also leases equipment on a day-to-day basis from several vendors. The rental expense incurred for this amounted to approximately $25,000 for the year ended December 31, 2006 and is included in cost of revenue in the statement of operations. Amounts re-billed to the customer are included in revenue. There are no formal rental agreements in place for the rental of equipment.

F-77

SUPPLEMENTAL SCHEDULE

F-78

L.E.G. RENTALS, INC. AND FLUID PROCESSORS, INC.

COMBINED SCHEDULE OF OPERATING EXPENSES

YEAR ENDED DECEMBER 31, 2006

Cost of services
Wages	$	2,815,407
Repairs and maintenance		1,005,590
Supplies		941,036
Subcontracting		247,092
Transportation cost		235,611
Travel and per diem		370,109
Other		49,917
Total cost of services	$	5,664,762
Selling, general and administrative
Salaries, wages and benefits	$	1,793,100
Taxes and insurance		564,175
Vehicle expense		105,098
Rent-office space		96,211
Legal and professional		69,410
Telecommunications		58,900
Other		80,864
Total selling, general and administrative	$	2,767,758

F-79

INDEPENDENT AUDITORS’ REPORT

To the Board of Directors

    Abbeville Offshore Quarters, Inc.

Abbeville, Louisiana

We have audited the accompanying balance sheet of Abbeville Offshore Quarters, Inc. (an S Corporation) as of July 31, 2006, and the related statements of operations, stockholders’ equity and cash flows for the seven month period ended July 31, 2006. The financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on these financial statements based on our audit.

We conducted our audit in accordance with auditing standards generally accepted in the United States of America. 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 audit provides a reasonable basis for our opinion.

In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of Abbeville Offshore Quarters, Inc. as of July 31, 2006, and the results of its operations and its cash flows for the seven month period then ended, in conformity with accounting principles generally accepted in the United States of America.

Our audit was conducted for the purpose of forming an opinion on the basic financial statements taken as a whole. The supplemental schedule on page F-91 is presented for the purposes of additional analysis and is not required as part of the basic financial statements. Such information has been subjected to the auditing procedures applied in the audit of the basic financial statements and, in our opinion, is fairly stated in all material respects in relation to the basic financial statements taken as a whole.

/s/    UHY LLP      

UHY LLP

Houston, Texas

April 11, 2007

F-80

ABBEVILLE OFFSHORE QUARTERS, INC.

BALANCE SHEET

JULY 31, 2006

Assets
Current assets
Cash and cash equivalents	$	1,128,374
Accounts receivable—trade, net		9,984,444
Accounts receivable—other		62,422
Due from stockholders		47,409
Costs and estimated earnings in excess of billings on uncompleted contracts		323,194
Inventory		199,404
Prepaid expenses and other current assets		426,233
Total current assets		12,171,480
Property and equipment, net		18,017,317
Total assets	$	30,188,797
Liabilities and stockholders’ equity
Current liabilities
Accounts payable and accrued expenses	$	2,185,325
Billings in excess of costs and estimated earnings on uncompleted contracts		1,577
Deferred revenue		31,860
Notes payable—related party		454,018
Current maturities of long-term debt		1,676,935
Total current liabilities		4,349,715
Long-term liabilities
Long-term debt, net of current maturities		2,511,348
Total long-term liabilities		2,511,348
Total liabilities		6,861,063
Stockholders’ equity		23,327,734
Total liabilities and stockholders’ equity	$	30,188,797

See notes to financial statements.

F-81

ABBEVILLE OFFSHORE QUARTERS, INC.

STATEMENT OF OPERATIONS

SEVEN MONTHS ENDED JULY 31, 2006

Revenue	$	17,082,386
Cost of revenue		8,085,837
Gross profit		8,996,549
Operating expenses		2,397,685
Operating income		6,598,864
Other income (expense)
Interest income		1,278
Interest expense		(223,954	)
Other income		107,941
Total other income (expense)		(114,735	)
Net income	$	6,484,129

See notes to financial statements.

F-82

ABBEVILLE OFFSHORE QUARTERS, INC.

STATEMENT OF STOCKHOLDERS’ EQUITY

SEVEN MONTHS ENDED JULY 31, 2006

	Additional Paid-in Capital		Retained Earnings			Total Stockholders’ Equity
Balance as of January 1, 2006	$	215,421	$	16,670,184		$	16,885,605
Distributions		—		(42,000	)		(42,000	)
Net income		—		6,484,129			6,484,129
Balance as of July 31, 2006	$	215,421	$	23,112,313		$	23,327,734

See notes to financial statements.

F-83

ABBEVILLE OFFSHORE QUARTERS, INC.

STATEMENT OF CASH FLOWS

SEVEN MONTHS ENDED JULY 31, 2006

Cash flows from operating activities
Net income	$	6,484,129
Adjustments to reconcile net income to net cash provided by operating activities
Depreciation		1,483,420
Bad-debt expense		660,866
Gain on sale of property and equipment		(407,454	)
Change in operating assets and liabilities
Accounts receivable—trade		(3,930,316	)
Accounts receivable—other		899,694
Costs and estimated earnings in excess of billings on uncompleted contracts		727,694
Prepaid expenses and other current assets		(194,771	)
Inventory		(3,537	)
Accounts payable and accrued expenses		283,311
Deferred revenue		31,860
Billings in excess of costs and estimated earnings on uncompleted contracts		(275,994	)
Net cash provided by operating activities		5,758,902
Cash flows from investing activities
Purchase of fixed assets		(4,526,797	)
Proceeds received from disposal of property and equipment		566,946
Change in other noncurrent assets		15,155
Net cash used in investing activities		(3,944,696	)
Cash flows from financing activities
Proceeds from issuance of long-term debt		408,186
Repayment of long-term debt		(1,188,776	)
Net borrowings on notes payable—related party		99,906
Distributions		(42,000	)
Net decrease on due from stockholders		(105,772	)
Net cash used in financing activities		(828,456	)
Net increase in cash and cash equivalents		985,750
Cash and cash equivalents, beginning of year		142,624
Cash and cash equivalents, end of year	$	1,128,374
Supplemental disclosures of cash flows information
Cash paid for interest	$	248,405

See notes to financial statements.

F-84

ABBEVILLE OFFSHORE QUARTERS, INC.

NOTES TO FINANCIAL STATEMENTS

JULY 31, 2006

1. Accounting Policies

Nature of Business: Abbeville Offshore Quarters, Inc. (the “Company”), designs, manufactures and leases building units to be used offshore. The Company has two manufacturing facilities located in Abbeville and the Port of Vermilion, Louisiana. The Company also specializes in offshore refurbishment and maintenance, as well as offering a complete camp setup service including water tanks, pressure sets, sewage treatment units, lights, generators, and linens.

The Company has one class of common stock, no par value, 900 shares authorized. As of July 31, 2006, 900 shares were issued and outstanding.

Cash and Cash Equivalents: For purposes of the statement of cash flows, the Company considers all highly liquid debt instruments purchased with a maturity of three months or less to be cash equivalents. There were no cash equivalents as of July 31, 2006.

Accounts Receivable: The Company extends credit to its customers based on informal discussions with the management and generally collateral is not required. Outstanding accounts receivable are assessed routinely and an allowance is set up when accounts are deemed uncollectible. Accounts receivable are net of allowance for doubtful account of approximately $673,000 as of July 31, 2006.

Inventory: Inventories are valued at the lower of cost or market with cost being determined using the First-in First-out (“FIFO”) method. Market is considered as the lower of either estimated replacement cost or estimated realizable value.

Property and Equipment: Property and equipment are stated at cost. Depreciation is provided by the straight-line method over the estimated useful lives of the related assets. All expenditures for major renewals and betterments are capitalized. Amortization of leasehold improvements is computed using the straight-line method over the shorter of the remaining lease term or the estimated useful lives of the improvements. Expenditures for maintenance and repairs are charged to expense as incurred.

Impairment of Long-lived Assets: The Company evaluates an asset for impairment when events or circumstances indicate that a long-lived asset’s carrying value may not be recovered. These events include market declines, changes in the manner in which the Company intends to use an asset, decisions to sell an asset and adverse changes in the legal or business environment.

If events or circumstances indicated that a long-lived asset’s carrying value may not be recoverable, the Company estimates the future undiscounted cash flows from the asset for which the lowest level of separate cash flows can be measured, to determine if the asset is impaired. If the total undiscounted future cash flows are less than the carrying amount for the asset, the Company estimates the fair value of the asset either through reference to sales data for similar assets, or by using a discounted cash flow approach. The asset’s carrying value is then adjusted downward to the fair value. These cash flow estimates require the Company to make estimates and assumptions for many years into the future for pricing demand, competition, operating costs, legal, regulatory and other factors and these estimates or assumptions could change significantly either positively or negatively.

Revenue and Cost Recognition: Revenue from construction contracts are recognized under the percentage-of-completion method of accounting determined by the ratio of costs incurred to total estimated costs at completion. All known or anticipated losses on contracts are recognized in full when such losses become apparent. Contracts typically range from two to six months in duration. Revenue for contracts based on time and materials are recognized as labor and material costs are incurred. Revenue from other services is recognized as the service is performed.

F-85

ABBEVILLE OFFSHORE QUARTERS, INC.

NOTES TO FINANCIAL STATEMENTS—(Continued)

JULY 31, 2006

Income Taxes: The Company has elected to be taxed under the provisions of Subchapter S of the Internal Revenue Code. Under those provisions, the Company does not pay federal corporate income taxes on its taxable income, and is not allowed a net operating loss carryover or carryback as a deduction. Instead, the stockholders are liable for individual federal and state income taxes on their respective shares of the Company’s taxable income.

Advertising Costs: Advertising costs are expensed as incurred. Advertising expense for the seven months ended July 31, 2006 was approximately $78,000.

Concentration of Risk: The Company provides services to a diversified group of customers in the petroleum industry, including major oil companies, located primarily in the Southern United States. Credit is extended based on an evaluation of each customer’s financial condition. Credit losses, upon occurrence, are provided for within the financial statements.

The Company maintains its cash in bank deposit accounts at high credit quality financial institutions. The balances, at times, may exceed federally insured limits. However, these funds are secured by repurchase agreements in the Company’s name.

The customer base for the Company is primarily concentrated in the oil and gas industry. The revenue earned from each customer varies from year to year based on the contracts awarded. During the seven months ended July 31, 2006, the Company had sales to one customer totaling 25% of total revenue with accounts receivable as of July 31, 2006 of approximately $4,797,000.

Use of Estimates: The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America, requires management to make estimates and assumptions that affect the reported amounts of 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.

F-86

ABBEVILLE OFFSHORE QUARTERS, INC.

NOTES TO FINANCIAL STATEMENTS—(Continued)

JULY 31, 2006

2. Costs and Estimated Earnings on Uncompleted Contracts

The asset, “Costs and estimated earnings in excess of billings on uncompleted contracts,” represents revenue recognized in excess of amounts billed. The liability, “Billings in excess of costs and estimated earnings on uncompleted contracts,” represents billings in excess of revenue recognized.

Amounts billed and costs and earnings recognized on contracts in progress were:

	July 31, 2006
Costs incurred on uncompleted contracts	$	318,841
Estimated earnings		147,151
Total costs and estimated earnings		465,992
Less: billings to date		(144,375	)
	$	321,617

Included in the accompanying balance sheet under the following captions:

	July 31, 2006
Costs and estimated earnings in excess of billings on uncompleted contracts	$	323,194
Billings in excess of costs and estimated earnings on uncompleted contracts		(1,577	)
	$	321,617

3. Property and Equipment

Major classifications of property and equipment and estimated depreciable lives are as follows:

	Estimated Life	July 31, 2006
United States Coast Guard modular rental units	7 years	$	12,413,715
Modular rental units	5 years		4,893,424
Machinery and equipment	Various		1,140,065
Rental equipment	3 years		1,156,800
Buildings and leasehold improvements	5-39 years		924,133
Autos and trucks	3-7 years		557,194
Furniture and fixtures	5-7 years		144,307
			21,229,638
Construction in progress			5,196,810
			26,426,448
Less: accumulated depreciation			(8,409,131	)
		$	18,017,317

F-87

ABBEVILLE OFFSHORE QUARTERS, INC.

NOTES TO FINANCIAL STATEMENTS—(Continued)

JULY 31, 2006

4. Notes Payable—Related Party

Notes payable—related party consists of four unsecured notes payable to Abbeville Lumber Company, bearing interest at prime, due on demand, with principal balances totaling approximately $454,000 as of July 31, 2006. Interest expense incurred for the seven months ended July 31, 2006 was approximately $52,000.

5. Long-Term Debt

Long-term debt consists of the following:

	July 31, 2006
Notes payable to a bank, in the original amount of $4,250,000, payable in 35 monthly installments of $71,096, with a final payment of $2,396,334 in January 2008, bearing interest at 6.25% per annum, collateralized by equipment, inventory and movable buildings.	$	3,343,416
Notes payable to a bank in original amounts ranging from $34,160 to $1,146,060, payable in monthly installments from $782 to $34,029, bearing interest at rates from 4.0% to 6.5% per annum, collateralized by a commercial security agreement. Notes mature from August 2007 to February 2009.		340,719
Notes payable to a bank, in original amounts ranging from $190,954 to $691,030, payable in monthly installments from $3,670 to $20,404, bearing interest at rates from 4.0% to 5.75% per annum, collateralized by equipment, inventory, and movable buildings. Notes mature from August 2006 to August 2007.		161,384
Note payable to an insurance financing company in the original amount of $309,794, payable in monthly installments, bearing interest at 3.2% per annum, collateralized by insurance policies.		309,794
Note payable to a financing company in the original amount of $21,698, payable in 36 monthly installments from $410 to $684, bearing interest at 6.74% per annum, collateralized by a vehicle. Notes mature from October 2007 to December 2008.		32,970
Total long-term debt		4,188,283
Less: current maturities		(1,676,935	)
	$	2,511,348

The Company is required to meet certain financial covenants on a monthly reporting basis. Among other restrictions, such covenants include the maintenance of minimum tangible net worth requirements, as well as the maintenance of sufficient levels of earnings to meet the Company’s required debt servicing obligations. As of July 31, 2006, the Company was in compliance with these covenants.

Maturities of long-term debt are as follows:

Seven Months Ended July 31,
2007	$	1,676,935
2008		2,506,462
2009		4,886
	$	4,188,283

F-88

ABBEVILLE OFFSHORE QUARTERS, INC.

NOTES TO FINANCIAL STATEMENTS—(Continued)

JULY 31, 2006

6. Operating Leases

The Company leases certain equipment and buildings under noncancelable operating leases. Rent expense for all operating leases during the seven months ended July 31, 2006 totaled approximately $73,000.

As of July 31, 2006, estimated future minimum lease payments required under the operating leases are as follows:

Seven Months Ended July 31,
2007	$	51,000
2008		51,000
2009		31,000
2011		26,000
2010		20,000
	$	179,000

7. Related Party Transactions

The Company leases its office space on a month-to-month basis from the Putnam family, including George and Emmet Putnam, stockholders. Total related party rent expense for the seven months ended July 31, 2006 was approximately $7,000. The Company also began leasing additional building space from George and Emmet Putnam beginning in May 2005. Total rent expense associated with this lease was approximately $35,000 for the seven months ended July 31, 2006.

8. Stock Restriction

The Articles of Incorporation do not allow any stock of the Company to be transferred by any stockholder unless the stock is first offered for sale to the Company. If the Company fails or refuses to accept the offer, then such offer may be accepted by the other stockholders.

The Company and/or remaining stockholders shall have an option to purchase the stock to be transferred at the same price and on the same terms and conditions as the offer or shall have been offered by a third person in an arm’s length transaction, acting in good faith. The offer shall be in writing and open for a period of 60 days. After the offer period has expired, the stockholder may complete the transfer to a third party under the same terms and conditions of the offer to the Company.

9. Retirement Plans

The Company has established a 401(k) type pension plan for all eligible employees. Employees who have attained the age of eighteen are eligible to participate in the plan if they have been employed by the Company for one year and work at least 1,000 hours per year. Generally, employees can defer up to 15% of their gross salary into the plan, not to exceed $15,000 for 2006. The Company can make a matching discretionary contribution for the employees. Employer contributions for the seven months ended July 31, 2006 were approximately $9,200.

10. Subsequent Event

On August 1, 2006, the Company was purchased in a stock transaction by Stallion Oilfield Services Ltd., headquartered in Houston, Texas.

F-89

SUPPLEMENTARY INFORMATION

F-90

ABBEVILLE OFFSHORE QUARTERS, INC.

SCHEDULE OF COST OF REVENUE AND OPERATING EXPENSES

SEVEN MONTHS ENDED JULY 31, 2006

Cost of revenue
Rentals	$	765,520
Materials		2,555,781
Labor		1,835,174
Depreciation		1,294,155
Repairs and maintenance		379,271
Insurance		368,880
Payroll taxes		241,140
Workers’ compensation		244,852
Freight		56,515
Auto and truck maintenance		142,660
Port expenses		107,874
Travel		72,952
Tools		21,063
Total cost of revenue	$	8,085,837
Operating expenses
Salaries, taxes and fringe benefits	$	1,150,668
Bad debt		660,866
Gain on sale of fixed assets		(407,454	)
Depreciation		189,265
Advertisement		77,577
Utilities		66,367
Travel and entertainment		75,435
Supplies		95,453
Rent		73,530
Legal and accounting		172,695
Taxes and licenses		27,364
Telephone		57,040
Education		47,559
Medical		33,475
Office expense		55,310
Miscellaneous		22,535
Total operating expenses	$	2,397,685

F-91

INDEPENDENT AUDITORS’ REPORT

To the Board of Directors

Abbeville Offshore Quarters, Inc.

Abbeville, Louisiana

We have audited the accompanying balance sheets of Abbeville Offshore Quarters, Inc. (an S Corporation) as of December 31, 2004 and 2005, and the related statements of operations, stockholders’ equity and cash flows for each of the three years ended December 31, 2005. The 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 auditing standards generally accepted in the United States of America. Those standards require that we plan and perform the audits 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 financial statements referred to above present fairly, in all material respects, the financial position of Abbeville Offshore Quarters, Inc. as of December 31, 2004 and 2005, and the results of its operations and its cash flows for each of the three years ended December 31, 2005, in conformity with accounting principles generally accepted in the United States of America.

Our audits were conducted for the purpose of forming an opinion on the basic financial statements taken as a whole. The supplemental schedule on page F-103 is presented for the purposes of additional analysis and are not required as part of the basic financial statements. Such information has been subjected to the auditing procedures applied in the audits of the basic financial statements and, in our opinion, is fairly stated in all material respects in relation to the basic financial statements taken as a whole.

/S/    UHY MANN FRANKFORT STEIN & LIPP CPAS, LLP      

UHY Mann Frankfort Stein & Lipp CPAs, LLP

Houston, Texas

August 25, 2006

F-92

ABBEVILLE OFFSHORE QUARTERS, INC.

BALANCE SHEETS

	December 31,
	2004		2005
Assets
Current assets
Cash and cash equivalents	$	399,611	$	142,624
Accounts receivable—trade, net		2,429,146		6,714,994
Accounts receivable—other		492,924		962,116
Costs and estimated earnings in excess of billings on uncompleted contracts		1,364,550		1,050,888
Inventory		152,994		195,867
Prepaid expenses and other current assets		210,676		231,462
Total current assets		5,049,901		9,297,951
Property and equipment		11,380,520		15,133,432
Other assets		11,395		15,155
Total assets	$	16,441,816	$	24,446,538
Liabilities and stockholders’ equity
Current liabilities
Accounts payable and accrued expenses	$	3,848,368	$	1,902,014
Billings in excess of costs and estimated earnings on uncompleted contracts		—		277,571
Deferred revenue		369,460		—
Notes payable—related party		422,505		354,112
Current maturities of long-term debt		2,350,631		1,698,856
Due to stockholders		200,053		58,363
Total current liabilities		7,191,017		4,290,916
Long-term liabilities
Long-term debt, net of current maturities		1,086,480		3,270,017
Total liabilities		8,277,497		7,560,933
Stockholders’ equity		8,164,319		16,885,605
Total liabilities and stockholders’ equity	$	16,441,816	$	24,446,538

See notes to financial statements.

F-93

ABBEVILLE OFFSHORE QUARTERS, INC.

STATEMENTS OF OPERATIONS

	Year Ended December 31,
	2003			2004			2005
Revenue	$	8,438,252		$	13,397,496		$	22,369,582
Cost of revenue		5,002,969			7,666,220			11,225,371
Gross profit		3,435,283			5,731,276			11,144,211
Operating expenses		957,839			1,814,130			2,077,337
Operating income		2,477,444			3,917,146			9,066,874
Other income (expense)
Interest income		23,172			14,643			5,956
Interest expense		(136,011	)		(145,858	)		(327,770	)
Other income		8,194			2,157			8,376
Total other income (expense)		(104,645	)		(129,058	)		(313,438	)
Net income	$	2,372,799		$	3,788,088		$	8,753,436

See notes to financial statements.

F-94

ABBEVILLE OFFSHORE QUARTERS, INC.

STATEMENTS OF STOCKHOLDERS’ EQUITY

	Additional Paid-in Capital		Retained Earnings			Total Stockholders’ Equity
Balance as of January 1, 2003	$	215,421	$	3,005,759		$	3,221,180
Net distributions		—		(737,275	)		(737,275	)
Net income		—		2,372,799			2,372,799
Balance as of December 31, 2003		215,421		4,641,283			4,856,704
Net distributions		—		(480,473	)		(480,473	)
Net income		—		3,788,088			3,788,088
Balance as of December 31, 2004		215,421		7,948,898			8,164,319
Net distributions		—		(32,150	)		(32,150	)
Net income		—		8,753,436			8,753,436
Balance as of December 31, 2005	$	215,421	$	16,670,184		$	16,885,605

See notes to financial statements.

F-95

ABBEVILLE OFFSHORE QUARTERS, INC.

STATEMENTS OF CASH FLOWS

	Year Ended December 31,
	2003			2004			2005
Cash flows from operating activities
Net income	$	2,372,799		$	3,788,088		$	8,753,436
Adjustments to reconcile net income to net cash provided by operating activities
Depreciation		855,886			1,283,463			2,177,293
Bad-debt expense		5,238			6,263			90,462
Gain on sale of fixed assets		(594,629	)		(43,793	)		(502,347	)
Change in operating assets and liabilities
Accounts receivable—trade		(265,016	)		(1,027,094	)		(4,376,310	)
Accounts receivable—other		(260,484	)		(99,937	)		(469,192	)
Costs and estimated earnings in excess of billings on uncompleted contracts		134,780			(1,317,767	)		313,662
Prepaid expenses and other current assets		(56,751	)		126,464			(24,546	)
Inventory		(3,362	)		(76,569	)		(42,873	)
Accounts payable and accrued expenses		310,532			2,960,295			(1,909,978	)
Deferred revenue		—			369,460			(369,460	)
Billings in excess of costs and estimated earnings on uncompleted contracts		102,736			(102,736	)		277,571
Net cash provided by operating activities		2,601,729			5,866,137			3,917,718
Cash flows from investing activities
Purchase of fixed assets		(3,205,666	)		(6,211,789	)		(6,190,073	)
Proceeds from sale of assets		780,801			94,900			762,215
Net cash used in investing activities		(2,424,865	)		(6,116,889	)		(5,427,858	)
Cash flows from financing activities
Proceeds from issuance of long-term debt		1,826,201			1,902,114			4,526,587
Repayment of long-term debt		(676,287	)		(1,609,481	)		(3,031,201	)
Net payments on notes payable—related party		78,520			3,985			(68,393	)
Net distributions		(737,275	)		(480,473	)		(32,150	)
Net (decrease) increase due to stockholders		257			(90,043	)		(141,690	)
Net cash provided by (used in) financing activities		491,416			(273,898	)		1,253,153
Net increase (decrease) in cash and cash equivalents		668,280			(524,650	)		(256,987	)
Cash and cash equivalents, beginning of year		255,981			924,261			399,611
Cash and cash equivalents, end of year	$	924,261		$	399,611		$	142,624
Supplemental disclosures of cash flows information
Cash paid for interest	$	136,011		$	145,858		$	327,770

See notes to financial statements.

F-96

ABBEVILLE OFFSHORE QUARTERS, INC.

NOTES TO FINANCIAL STATEMENTS

DECEMBER 31, 2004 AND 2005

1. Accounting Policies

Nature of Business: Abbeville Offshore Quarters, Inc. (the “Company”), designs, manufactures and leases building units to be used offshore. The Company has two manufacturing facilities located in Abbeville and the Port of Vermilion, Louisiana. The Company also specializes in offshore refurbishment and maintenance, as well as offering a complete camp setup service including water tanks, pressure sets, sewage treatment units, lights, generators, and linens.

The Company has one class of common stock, no par value, 900 shares authorized. As of December 31, 2004 and 2005, 900 shares were issued and outstanding.

Cash and Cash Equivalents: For purposes of the statement of cash flows, the Company considers all highly liquid debt instruments purchased with a maturity of three months or less to be cash equivalents. There were no cash equivalents as of December 31, 2004 and 2005.

Accounts Receivable: The Company extends credit to its customers based on informal discussions with the management and generally collateral is not required. Outstanding accounts receivable are assessed routinely and an allowance is set up when accounts are deemed uncollectible. Accounts receivable are net of allowance for doubtful accounts of approximately $25,000 and $116,000 as of December 31, 2004 and 2005, respectively.

Inventory: Inventories are valued at the lower of cost or market with cost being determined using the First-in First-out (FIFO) method. Market is considered as the lower of either estimated replacement cost or estimated realizable value.

Property and Equipment: Property and equipment are stated at cost. Depreciation is provided by the straight-line method over the estimated useful lives of the related assets. All expenditures for major renewals and betterments are capitalized. Amortization of leasehold improvements is computed using the straight-line method over the shorter of the remaining lease term or the estimated useful lives of the improvements. Expenditures for maintenance and repairs are charged to expense as incurred.

Impairment of Long-lived Assets: The Company evaluates an asset for impairment when events or circumstances indicate that a long-lived asset’s carrying value may not be recovered. These events include market declines, changes in the manner in which the Company intends to use an asset, decisions to sell an asset and adverse changes in the legal or business environment.

If events or circumstances indicated that a long-lived asset’s carrying value may not be recoverable, the Company estimates the future undiscounted cash flows from the asset for which the lowest level of separate cash flows can be measured, to determine if the asset is impaired. If the total undiscounted future cash flows are less than the carrying amount for the asset, the Company estimates the fair value of the asset either through reference to sales data for similar assets, or by using a discounted cash flow approach. The asset’s carrying value is then adjusted downward to the fair value. These cash flow estimates require the Company to make estimates and assumptions for many years into the future for pricing demand, competition, operating costs, legal, regulatory and other factors and these estimates or assumptions could change significantly either positively or negatively.

Revenue and Cost Recognition: Revenue from construction contracts are recognized under the percentage-of-completion method of accounting determined by the ratio of costs incurred to total estimated costs at completion. All known or anticipated losses on contracts are recognized in full when such losses become apparent. Contracts typically range from two to six months in duration. Revenue for contracts based on time and materials are recognized as labor and material costs are incurred. Revenue from other services is recognized as the service is performed.

F-97

ABBEVILLE OFFSHORE QUARTERS, INC.

NOTES TO FINANCIAL STATEMENTS—(Continued)

DECEMBER 31, 2004 AND 2005

Income Taxes: The Company has elected to be taxed under the provisions of Subchapter S of the Internal Revenue Code. Under those provisions, the Company does not pay federal corporate income taxes on its taxable income, and is not allowed a net operating loss carryover or carryback as a deduction. Instead, the stockholders are liable for individual federal and state income taxes on their respective shares of the Company’s taxable income.

Advertising Costs: Advertising costs are expensed as incurred. Advertising expense for the years ended December 31, 2003, 2004 and 2005 was approximately $28,000, $44,000 and $129,000, respectively.

Concentration of Risk: The Company provides services to a diversified group of customers in the petroleum industry, including major oil companies, located primarily in the Southern United States. Credit is extended based on an evaluation of each customer’s financial condition. Credit losses, upon occurrence, are provided for within the financial statements.

The Company maintains its cash in bank deposit accounts at high credit quality financial institutions. The balances, at times, may exceed federally insured limits. However, these funds are secured by repurchase agreements in the Company’s name.

The customer base for the Company is primarily concentrated in the oil and gas industry. The revenue earned from each customer varies from year to year based on the contracts awarded. During the year ended December 31, 2003, the Company had sales to three customers totaling 13%, 12%, and 12% of total revenue, respectively, with accounts receivable balances of approximately $43,000, $12,000 and $83,000, respectively. During the year ended December 31, 2004, the Company had sales to one customer totaling 13% of total revenue, with an accounts receivable balance of approximately $95,000 at year-end. During the year ended December 31, 2005, the Company had sales to two customers totaling 38% and 14% of total revenue with accounts receivable at year-end of approximately $2,030,000 and $951,000, respectively.

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

2. Costs and Estimated Earnings on Uncompleted Contracts

The asset, “Costs and estimated earnings in excess of billings on uncompleted contracts,” represents revenue recognized in excess of amounts billed. The liability, “Billings in excess of costs and estimated earnings on uncompleted contracts,” represents billings in excess of revenue recognized.

F-98

ABBEVILLE OFFSHORE QUARTERS, INC.

NOTES TO FINANCIAL STATEMENTS—(Continued)

DECEMBER 31, 2004 AND 2005

Amounts billed and costs and earnings recognized on contracts in progress were:

	December 31,
	2004			2005
Costs incurred on uncompleted contracts	$	2,756,967		$	2,448,409
Estimated earnings		382,804			753,652
Total costs and estimated earnings		3,139,771			3,202,061
Less: billings to date		(1,775,221	)		(2,428,744	)
	$	1,364,550		$	773,317

Included in the accompanying balance sheets under the following captions:

	2004		2005
Costs and estimated earnings in excess of billings on uncompleted contracts	$	1,364,550	$	1,050,888
Billings in excess of costs and estimated earnings on uncompleted contracts		—		(277,571	)
	$	1,364,550	$	773,317

3. Property and Equipment

Major classifications of property and equipment and estimated depreciable lives are as follows:

		December 31,
	Estimated Life	2004			2005
United States Coast Guard modular rental units	7 years	$	9,527,075		$	12,063,025
Modular rental units	5 years		3,701,558			4,108,499
Machinery and equipment	Various		920,231			1,118,835
Rental equipment	3 years		651,316			974,764
Buildings and leasehold improvements	5-39 years		796,630			883,638
Autos and trucks	3-7 years		375,804			520,528
Furniture and fixtures	5-7 years		78,185			103,910
			16,050,799			19,773,199
Construction in progress			590,480			2,459,514
			16,641,279			22,232,713
Less: accumulated depreciation			(5,260,759	)		(7,099,281	)
		$	11,380,520		$	15,133,432

4. Notes Payable—Related Party

Notes payable—related party consists of four unsecured notes payable to Abbeville Lumber Company, bearing interest at prime, due on demand, with principal balances outstanding of $422,505 and $354,112 as of December 31, 2004 and 2005, respectively. Interest expense incurred for the years ended December 31, 2003, 2004 and 2005 was approximately $10,000, $26,000 and $26,000, respectively.

F-99

ABBEVILLE OFFSHORE QUARTERS, INC.

NOTES TO FINANCIAL STATEMENTS—(Continued)

DECEMBER 31, 2004 AND 2005

5. Long-term Debt

Long-term debt consists of the following:

	December 31,
	2004			2005
Notes payable to a bank, in the original amount of $4,250,000, payable in 35 monthly installments of $71,096, with a final payment of $2,396,334 in January 2008, bearing interest at 6.25% per annum, collateralized by equipment, inventory and movable buildings.	$	—		$	3,697,579
Notes payable to a bank in original amounts ranging from $24,934 to $1,146,060 in monthly installments from $765 to $34,029, bearing interest at rates from 4.0% to 6.5% per annum, collateralized by a commercial security agreement.		1,538,508			746,058
Notes payable to a bank, in original amounts ranging from $190,954 to $691,030, payable in monthly installments from $3,670 to $20,404, bearing interest at rates from 4.0% to 5.75% per annum, collateralized by equipment, inventory, and movable buildings. Notes mature from August 2006 to August 2007.		796,380			387,932
Notes payable to an insurance financing company in the original amounts of $222,607 and $154,744 payable in monthly installments, bearing interest at 0% and 4.95% per annum, respectively, collateralized by insurance policies.		52,223			89,043
Notes payable to a financing company in original amounts ranging from $13,293 to $20,463, payable in 36 monthly installments from $410 to $631, bearing interest at 6.74% per annum, collateralized by a vehicle. Notes mature from October 2007 to December 2008.		—			48,261
Notes payable to a bank in original amounts from $ 200,000, to $500,000 payable in one payment from January to May 2005 bearing interest from 5% to 5.25%, collateralized by a commercial security agreement.		1,050,000			—
Total long-term debt		3,437,111			4,968,873
Less: current maturities		(2,350,631	)		(1,698,856	)
	$	1,086,480		$	3,270,017

The Company is required to meet certain financial covenants on a monthly reporting basis. Among other restrictions, such covenants include the maintenance of minimum tangible net worth requirements, as well as the maintenance of sufficient levels of earnings to meet the Company’s required debt servicing obligations. As of December 31, 2005, the Company was in compliance with these covenants.

Maturities of long-term debt are as follows:

Year ending December 31,
2006	$	1,698,856
2007		878,576
2008		2,391,441
	$	4,968,873

F-100

ABBEVILLE OFFSHORE QUARTERS, INC.

NOTES TO FINANCIAL STATEMENTS—(Continued)

DECEMBER 31, 2004 AND 2005

6. Operating Leases

The Company leases certain equipment and buildings under noncancelable operating leases. Rent expense for all operating leases during 2003, 2004, and 2005 totaled approximately $41,600, $44,100 and $78,000, respectively.

As of December 31, 2005, estimated future minimum lease payments required under the operating leases are as follows:

Year ending December 31,
2006	$	24,000
2007		24,000
2008		4,000
	$	52,000

7. Related Party Transactions

The Company leases its office space on a month-to-month basis from the Putnam family, including George and Emmet Putnam, stockholders. Total annual related party rent expense for the years ended December 31, 2003, 2004, and 2005 was $12,600 during each year. The Company also began leasing additional building space from George and Emmet Putnam beginning in May 2005. Total annual rent expense associated with this lease was $35,000 for the year ended December 31, 2005.

8. Stock Restriction

The Articles of Incorporation do not allow any stock of the Company to be transferred by any stockholder unless the stock is first offered for sale to the Company. If the Company fails or refuses to accept the offer, then such offer may be accepted by the other stockholders.

The Company and/or remaining stockholders shall have an option to purchase the stock to be transferred at the same price and on the same terms and conditions as the offer or shall have been offered by a third person in an arm’s length transaction, acting in good faith. The offer shall be in writing and open for a period of 60 days. After the offer period has expired, the stockholder may complete the transfer to a third party under the same terms and conditions of the offer to the Company.

9. Retirement Plans

The Company has established a 401(k) type pension plan for all eligible employees. Employees who have attained the age of eighteen are eligible to participate in the plan if they have been employed by the Company for one year and work at least 1,000 hours per year. Generally, employees can defer up to 15% of their gross salary into the plan, not to exceed $12,000 for 2003, $13,000 for 2004, and $14,000 for 2005. The Company can make a matching discretionary contribution for the employees. Employer contributions for 2003, 2004, and 2005 were approximately $9,000, $9,000, and $12,000, respectively.

10. Subsequent Event

On August 1, 2006, the Company was purchased in a stock transaction by Stallion Oilfield Services Ltd., headquartered in Houston, Texas.

F-101

SUPPLEMENTARY INFORMATION

F-102

ABBEVILLE OFFSHORE QUARTERS, INC.

SCHEDULE OF COST OF REVENUE AND OPERATING EXPENSES

	Year Ended December 31,
	2003			2004			2005
Cost of revenue
Rentals	$	331,749		$	1,137,484		$	2,279,926
Materials		1,379,023			2,884,967			2,165,922
Labor		1,111,660			803,718			2,034,245
Depreciation		641,655			1,057,159			1,912,715
Repairs and maintenance		253,168			331,556			891,642
Insurance		357,912			383,558			539,948
Payroll taxes		181,023			187,766			290,511
Workers’ compensation		165,618			168,979			259,604
Commissions		—			—			233,708
Freight		74,583			340,967			177,081
Auto and truck maintenance		107,132			106,782			153,102
Port expenses		65,596			77,171			149,723
Travel		27,620			92,114			76,583
Tools		47,299			39,268			42,753
Miscellaneous services		258,931			54,731			17,908
Total cost of revenue	$	5,002,969		$	7,666,220		$	11,225,371
Operating expenses
Salaries, taxes and fringe benefits	$	883,093		$	1,100,309		$	1,401,006
Gain on sale of fixed assets		(594,629	)		(43,793	)		(502,347	)
Depreciation		214,231			226,304			264,578
Advertisement		28,015			43,714			128,539
Utilities		36,101			65,846			93,256
Bad debt		5,238			6,263			90,462
Meals and entertainment		58,943			56,265			87,518
Supplies		31,421			35,041			78,156
Rent		41,568			44,100			78,051
Legal and accounting		79,979			82,626			75,736
Telephone		42,097			58,412			74,841
Education		20,022			30,657			44,117
Medical		13,941			12,676			42,178
Office expense		31,146			27,277			39,345
Miscellaneous		66,673			68,433			81,901
Total operating expenses	$	957,839		$	1,814,130		$	2,077,337

See independent auditors’ report on additional information.

F-103

WRIGHT, MOORE, DEHART, DUPUIS & HUTCHINSON, L.L.C.

	Certified Public Accountants
	100 Petroleum Drive, 70508
JOHN W. WRIGHT, CPA*	P. O. Box 80569 • Lafayette, Louisiana 70598-0569
JAMES H. DUPUIS, CPA, CFP*	(337) 232-3637 • FAX (337) 235-8557	CHRISTINE R. DUNN, CPA
JOE D. HUTCHINSON, CPA*	www.wmddh.com	ANDRE D. BROUSSARD, CPA
JAN H. COWEN, CPA*		MARY PATRICIA KEELEY, CPA
LANCE E. CRAPPELL, CPA*		KRISTIE C. BOUDREAUX, CPA
PAT BAHAM DOUGHT, CPA*		BRIDGET B. TILLEY, CPA, MT
MICAH R. VIDRINE, CPA*		DAMIAN H. SPIESS, CPA, CFP
TRAVIS M. BRINSKO, CPA*		TASHA A. RALEY, CPA
RICK STUTES, CPA, CVA		PATRICK WAGUESPACK, CPA
		CHIP CANTRELL, CPA
*  A PROFESSIONAL CORPORATION		DANE P. FALGOUT, CPA
		ROBIN G. STOCKTON, CPA
RETIRED
M. TROY MOORE, CPA*
MICHAEL G. DeHART, CPA, CVA, MBA*

INDEPENDENT AUDITORS’ REPORT

To the Board of Directors

BLR Construction Companies, L.L.C.

Duson, Louisiana

We have audited the accompanying combined balance sheet of BLR Construction Companies, L.L.C. as of December 31, 2005, and the related combined statements of income, members’ equity and cash flows for the year then ended. 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 audit.

We conducted our audit in accordance with auditing standards generally accepted in the United States of America. 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 audit provides a reasonable basis for our opinion.

In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of BLR Construction Companies, L.L.C. as of December 31, 2005, and the results of its operations and its cash flows for the year then ended in conformity with accounting principles generally accepted in the United States of America.

CERTIFIED PUBLIC ACCOUNTANTS

March 17, 2006

F-104

BLR CONSTRUCTION COMPANIES, L.L.C. AND AFFILIATE

COMBINED BALANCE SHEET

DECEMBER 31, 2005

Assets
Current assets
Cash	$	184,048
Cash—restricted		623,008
Accounts receivable
Trade (net of allowance for doubtful accounts of $210,000)		11,202,726
Other		4,446,779
Interest receivable		126,703
Prepaid expenses		234,857
Due from members		1,186,667
Due from affiliates		325,093
Total current assets		18,329,881
Property and equipment
Vehicles		1,537,202
Buildings and improvements		1,232,403
Machinery and equipment		6,332,109
Furniture and fixtures		155,303
Mats		12,262,559
Land		49,987
Total		21,569,563
Less: Accumulated depreciation		7,127,688
Property and equipment—net		14,441,875
Other assets
Deposits		1,234
Total assets	$	32,772,990
Liabilities and members’ equity
Current liabilities
Accounts payable	$	5,683,712
Notes payable		6,757,139
Current maturities of long-term debt		3,269,529
Current maturities of capital lease obligation		7,216
Interest payable		36,302
Accrued expenses and other current liabilities		2,507,715
Total current liabilities		18,261,613
Long-term liabilities
Long-term debt, less current maturities		3,446,834
Capital lease obligation, less current maturities		32,649
Total long-term liabilities		3,479,483
Members’ equity		11,031,894
Total liabilities and members’ equity	$	32,772,990

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

F-105

BLR CONSTRUCTION COMPANIES, L.L.C. AND AFFILIATE

COMBINED STATEMENT OF INCOME

FOR THE YEAR ENDED DECEMBER 31, 2005

Revenue	$	39,630,002
Cost of revenue
Depreciation		4,556,234
Labor and related costs		7,261,103
Materials and supplies		5,006,038
Rent		8,405,047
Other costs		3,680,723
Total cost of revenue		28,909,145
Gross profit		10,720,857
Operating expenses
General and administrative expenses		6,327,842
Depreciation		39,332
Total operating expenses		6,367,174
Operating income		4,353,683
Other income (expense)
Gain on sale of assets		245,403
Interest income		105,659
Interest expense		(672,358	)
Loss on investment		(30,000	)
Miscellaneous		18,908
Total other income (expense)		(332,388	)
Income before income taxes		4,021,295
Income tax benefit
Deferred		909,343
Net income	$	4,930,638

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

F-106

BLR CONSTRUCTION COMPANIES, L.L.C. AND AFFILIATE

COMBINED STATEMENT OF CHANGES IN MEMBERS’ EQUITY

FOR THE YEAR ENDED DECEMBER 31, 2005

Members’ equity at December 31, 2004	$	4,601,256
Additions (deductions)
Net income		4,930,638
Contributions		1,500,000
Members’ equity at December 31, 2005	$	11,031,894

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

F-107

BLR CONSTRUCTION COMPANIES, L.L.C. AND AFFILIATE

COMBINED STATEMENT OF CASH FLOWS

FOR THE YEAR ENDED DECEMBER 31, 2005

Cash flows from operating activities
Net income	$	4,930,638
Adjustments to reconcile net income to net cash provided by operating activities
Depreciation		4,595,566
Gain on sale of assets		(245,403	)
Loss on investment		30,000
Deferred income taxes		(909,343	)
Changes in assets and liabilities
Accounts receivable		(8,614,555	)
Income tax refund receivable		7,167
Due from affiliates		(13,157	)
Prepaid expenses		(24,258	)
Accounts payable		3,543,308
Income taxes payable		(28,847	)
Interest payable		17,970
Accrued expenses and other current liabilities		1,278,968
Net cash provided by operating activities		4,568,054
Cash flows from investing activities
Proceeds from sale of property and equipment		627,025
Purchases of property and equipment		(3,074,774	)
Interest receivable		(126,703	)
Due from members		(259,988	)
Deposits		(934	)
Net cash used in investing activities		(2,835,374	)
Cash flows from financing activities
Proceeds from issuance of debt		155,119
Net borrowing on lines of credit		1,636,543
Repayment of debt and capital lease obligation		(3,060,793	)
Net cash used in financing activities		(1,269,131	)
Net increase in cash	$	463,549
Cash at beginning of year		343,507
Cash at end of year	$	807,056
Additional cash flow disclosures
Cash paid during the year for
Interest	$	653,699
Income taxes	$	28,847
Non cash investing and financing activities
Equipment purchased under installment note obligations and capital leases	$	6,514,772
Capital contribution financed through due from member	$	1,500,000

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

F-108

BLR CONSTRUCTION COMPANIES, L.L.C. AND AFFILIATE

NOTES TO COMBINED FINANCIAL STATEMENTS

1. Organization

Effective January 1, 2005, BLR Construction Company, Inc., BLR Crewboats, Inc., BLR Marine Services, Inc., BLR Roustabout, Inc., and Louisiana Pipeline and Construction Co., Inc. merged to form BLR Construction Companies, L.L.C. The newly formed company was organized in the state of Louisiana on January 1, 2005. The Company is engaged in various enterprises including oilfield construction, pipeline construction, crewboat and tugboat rentals, and contract labor. The Company operates in the Southern United States.

2. Summary of Significant Accounting Policies

Principles of Combination: The accompanying financial statements for the year ended December 31, 2005 include the combined accounts of BLR Construction Companies, L.L.C. and its affiliate, LPCC, Inc., collectively referred to as “the Company”. All material intercompany balances and transactions have been eliminated in the combination.

Property and Equipment: Property and equipment are stated at cost. Expenditures for property and equipment and items which substantially increase the useful lives of existing assets are capitalized at cost and depreciated. Routine expenditures for repairs and maintenance are expensed as incurred. The cost and related accumulated depreciation of property and equipment disposed of are eliminated from the accounts, and any resulting gain or loss is recognized.

Depreciation is provided utilizing the straight-line method. Depreciation expense amounts to $4,595,566 for the year ended December 31, 2005.

Use of Estimates: The preparation of financial statements requires management to make estimates and assumptions that affect certain reported amounts and disclosures. Accordingly, actual results could differ from those estimates.

Cash Flows: For purposes of the statements of cash flows, the Company considers all highly liquid investments with an original maturity of three months or less to be cash equivalents.

Accounts Receivable: Trade accounts receivable are carried at their estimated collectible amounts. Trade credit is generally extended on a short-term basis; thus receivables do not bear interest, although a finance charge may be applied to amounts past due. The Company generally does not require collateral, and the majority of its trade receivables are unsecured. Trade accounts receivable are periodically evaluated for collectibility based on past credit history with customers and their current financial condition, and are charged against allowance for doubtful accounts when they are deemed uncollectible.

Advertising: Advertising costs, except for costs associated with direct-response advertising, are charged to operations when incurred. The costs of direct-response advertising are capitalized and amortized over the period during which future benefits are expected to be received. Advertising expense was $73,284 for the year ended December 31, 2005.

Credit Risk: Financial instruments which potentially subject the Company to concentrations of credit risk include cash and receivables. Concentration of credit risk with respect to receivables is limited due to the Company’s large number of customers. However, at December 31, 2005, a customer comprised approximately 11% of total receivables. The Company maintains cash accounts at several institutions. The balances are insured by the Federal Deposit Insurance Corporation up to $100,000 per institution. At December 31, 2005, the Company exceeded the insured limit by $67,052.

F-109

BLR CONSTRUCTION COMPANIES, L.L.C. AND AFFILIATE

NOTES TO COMBINED FINANCIAL STATEMENTS—(Continued)

3. Notes Payable—Short-Term

Notes payable at December 31, 2005 consist of the following:

Regions Bank, $4,000,000 line of credit, due March 23, 2006, interest rate LIBOR + 3.00%, currently at 7.37%, secured by accounts receivable, equipment, real estate and personal guarantees of stockholders	$	3,902,619
Regions Bank, $1,500,000 line of credit, due March 23, 2006, interest rate LIBOR + 3.00%, currently at 7.37%, secured by accounts receivable, equipment, real estate and personal guarantees of stockholders		920,654
Regions Bank, $740,000 line of credit, due April 12, 2006, interest rate LIBOR + 3.50%, currently at 7.87%, secured by accounts receivable, equipment, real estate, and guaranty of stockholders		740,000
Regions Bank, $1,000,000 line of credit, due October 12, 2006, interest rate LIBOR + 3.50%, currently at 7.87%, secured by accounts receivable, equipment, real estate, and guaranty of stockholders		17,600
AICCO, Inc., $149,119 note dated April 29, 2005, due January 1, 2006, interest rate 7.25%, payable in monthly installments of $15,412, secured by insurance policy		15,319
AICCO, Inc., $6,000 note dated July 27, 2005, due January 1, 2006, interest rate 7.25%, payable in monthly installments of $1,229, secured by insurance policy		1,219
Duphil, $636,000 note dated February 16, 2005, due February 16, 2006, interest rate 6.00%, payable in monthly installments of $54,738, unsecured		162,586
Duphil, $158,710 note dated November 11, 2005, due January 29, 2006, no interest, payable in monthly installments of $52,903, unsecured		105,807
Duphil, $513,960 note dated October 31, 2005, due October 30, 2006, interest rate 6.00%, payable in monthly installments of $44,235, unsecured		472,295
Duphil, $419,040 note dated December 9, 2005, due December 9, 2006, interest rate 8.00%, payable in monthly installments of $29,161, unsecured		419,040
Total	$	6,757,139

F-110

BLR CONSTRUCTION COMPANIES, L.L.C. AND AFFILIATE

NOTES TO COMBINED FINANCIAL STATEMENTS—(Continued)

4. Long-Term Debt

Notes payable at December 31, 2005 consist of the following:

CNH Credit, notes dated November 30, 2000 to December 1, 2005, for various amounts, due January 1, 2006 to December 1, 2010, payable in monthly installments of $989 to $2,817, interest rate 4.90% to 8.10%, secured by equipment	$	522,005
Caterpillar Finance, notes dated August 6, 2004 to July 25, 2005, for various amounts, due July 28, 2009 to August 6, 2009, payable in monthly installments of $3,371 to $3,901, interest rate 5.98% to 6.76%, secured by equipment		282,094
Chase, notes dated May 9, 2005 to October 31, 2005, for various amounts, due May 9, 2008 to November 5, 2008, payable in monthly installments of $567 to $1,180, interest rate 6.39% to 7.99%, secured by vehicles		121,469
CIT, $93,487 note, dated January 11, 2005, due February 14, 2010, payable in monthly installments of $1,717, interest rate 3.90%, secured by equipment		77,682
Duphil, notes dated December 1, 2004 to December 22, 2005, for various amounts, due May 1, 2006 to June 22, 2007, payable in monthly installments of $29,783 to $87,348, interest rate 6.00% to 8.00%, unsecured		1,144,535
Ford Motor Credit, notes dated October 6, 2003 to August 9, 2005, for various amounts, due October 20, 2006 to April 14, 2010, payable in monthly installments of $486 to $940, interest rate 3.90% to 7.99%, secured by vehicles		211,218
GMAC, notes dated August 25, 2004 to August 26, 2004, for various amounts, due August 25, 2007, payable in monthly installments of $669 to $880, interest rate 8.74%, secured by vehicles		44,759
Gulf Coast Bank, $28,233 note dated October 31, 2005, due November 5, 2008, payable in monthly installments of $876, interest rate 7.25%, secured by vehicles		27,529
Iberia Bank, notes dated January 11, 2005 to August 12, 2005, for various amounts, due January 10, 2008 to August 12, 2008, payable in monthly installments of $670 to $779, interest rate 5.85% to 6.59%, secured by vehicles		92,504
Kubota Credit, notes dated August 29, 2005 to September 20, 2005, for various amounts, due August 29, 2008 to September 20, 2008, payable in monthly installments of $1,341 to $1,760, no interest, secured by equipment		100,583
Midsouth National Bank, notes dated August 22, 2003, for various amounts, due August 25, 2006, payable in monthly installments of $553 to $833, interest rate 5.75%, secured by vehicles		10,777
US Bank, notes dated December 7, 2005 to December 21, 2005, for various amounts, due December 7, 2009 to December 21, 2009, payable in monthly installments of $1,009 to $1,020, interest rate 7.65%, secured by vehicles		125,305
Regions Bank, notes dated October 6, 2003 to October 12, 2005, for various amounts, due December 5, 2006 to October 12, 2012, payable in monthly installments of $569 to $46,217, interest rate LIBOR + 3.00% to 6.05%, secured by accounts receivable, equipment, real estate, guaranty of stockholders, trailer, and vehicles		3,955,903
		6,716,363
Less: current portion		(3,269,529	)
Long-term portion	$	3,446,834

F-111

BLR CONSTRUCTION COMPANIES, L.L.C. AND AFFILIATE

NOTES TO COMBINED FINANCIAL STATEMENTS—(Continued)

Annual maturities of long-term debt during each year ended December 31 are as follows:

2006	$	3,269,529
2007		1,592,795
2008		910,295
2009		545,207
2010		152,566
Later		245,971
Total	$	6,716,363

At December 31, 2005, the Company has available approximately $1,659,127 of unused lines of credit with Regions Bank to be drawn upon. The interest rates on the lines of credit range from LIBOR + 3.00% to LIBOR + 3.50%.

On January 10, 2006, the $4,000,000 line of credit with Regions Bank was increased to $7,000,000.

5. Major Customer

Sales to customers for the year ended December 31, 2005, which amounted to 10% or more of the Company’s revenue is as follows:

	Total Amount		% of Total Revenue
Customer A	$	4,532,780	11.50	%

6. 401(k) Plan

The Company contributes to a 401(k) plan that is a qualified plan under the Employees Retirement Income Security Act of 1974. All employees who are at least 21 years old and have at least three months of service at the end of each calendar quarter are eligible to participate in the plan. The Company matches one-half of employee contributions up to 3% of compensation. For the year ended December 31, 2005, the Company made matching contributions of $35,163 to the plan.

7. Related Party Transactions

The Company engaged in transactions during the year with members and the following related companies:

Rental One, L.L.C.

NJM Technology, L.L.C.

Flow Chem Technologies, L.L.C.

Oilfield Heavy Haulers, L.L.C.

F-112

BLR CONSTRUCTION COMPANIES, L.L.C. AND AFFILIATE

NOTES TO COMBINED FINANCIAL STATEMENTS—(Continued)

These transactions resulted in the following amounts that are included in the financial statements for the year ended December 31, 2005.

Accounts receivable	$	14,529
Interest receivable		126,703
Due from members		1,186,667
Due from affiliates		325,093
Accounts payable		838,595
Revenue		44,555
Cost of revenue		1,222,896
Interest expense		21,717
Rent expense		36,000

8. Investment

At December 31, 2004, the Company’s investment consisted of a six percent working interest in an oil well. During 2005, the investment became totally impaired and has been written down to its estimated realizable value. The amount of the write-down of $30,000 has been charged to loss on investment, which is shown in other income on the income statement.

9. Rentals Under Operating Leases

The Company leases vehicles and equipment under operating leases expiring in various years through 2010. Future minimum lease payments under noncancelable operating leases having remaining terms in excess of one year as of December 31, 2005 are:

Year Ending December 31,	Amount
2006	$	294,103
2007		219,840
2008		138,005
2009		123,800
2010		115,799
	$	891,547

Rent expense relating to these leases was $203,156 for the year ended December 31, 2005.

10. Capital Lease

The Company became the lessee of a telephone system under a capital lease expiring on June 1, 2010. The asset and liability is recorded at the lower of the present value of the minimum lease payments or the fair value of the asset. The asset is depreciated over the lower of the related lease term or its estimated productive life. Depreciation of the asset under capital lease amounts to $2,161 and is included in depreciation expense for the year ended December 31, 2005.

F-113

BLR CONSTRUCTION COMPANIES, L.L.C. AND AFFILIATE

NOTES TO COMBINED FINANCIAL STATEMENTS—(Continued)

Following is a summary of property held under capital lease:

Furniture and fixtures	$	43,225
Less: Accumulated depreciation		(2,161	)
	$	41,064

Minimum future lease payments under capital leases as of December 31, 2005 are as follows:

2006	$	11,345
2007		11,345
2008		11,345
2009		11,345
2010		5,673
Less: Amounts representing interest		(11,188	)
Present value of minimum lease payments	$	39,865

11. Income Taxes

Prior to the merger and reorganization effective January 1, 2005, the Companies operated as C corporations. Effective January 1, 2005, the Company reorganized as a limited liability company and, with the consent of its members, has elected under the Internal Revenue Code to be taxed as an S Corporation. As an S Corporation, the members are taxed on their proportionate share of the Company’s taxable income. Therefore, no provision or liability for federal income taxes has been included in the financial statements. Certain specific deductions and credits flow through the Company to its members.

As a result of this election, the Company will not incur any additional income tax obligations, and future financial statements will not include a provision for income taxes. Prior to the change to S Corporation status, income taxes currently payable and deferred income taxes were recorded in the Company’s financial statements.

The provision for income taxes consists of the following:

Deferred $ 909,343

All of the deferred income tax provisions in 2005 relate to the elimination of the deferred tax liability of $909,343 at the date the election for the change to Subchapter S Status was filed.

12. Commitments and Contingencies

Insurance Program: The Company self-insures for business automobile liability, commercial general liability and worker’s compensation. Under the self-insured plan, the Company is liable for the first $50,000 of claims per occurrence. Claims in excess of $50,000 are covered by an excess liability policy. The plan provides for aggregate protection by establishing an aggregate loss fund based on incurred payroll. The aggregate loss fund totalled $623,008 at December 31, 2005 and is shown as restricted cash on the balance sheet. A self-insurance reserve for claims payable totalled $198,162 at December 31, 2005 and is shown as accrued expenses and other current liabilities on the balance sheet.

F-114

BLR CONSTRUCTION CO., INC. AND AFFILIATES

NOTES TO COMBINED FINANCIAL STATEMENTS—(Continued)

Litigation: The Company is subject to various claims and legal proceedings covering matters that arise in the ordinary course of its business activities. Management believes that any liability that may ultimately result from the resolution of these matters will not have a material adverse effect on the financial condition or results of operations of the Company.

13. Subsequent Events

On February 7, 2006, the owners of BLR Construction Companies, L.L.C. entered into an agreement with Stallion Oilfield Services, LTD to sell their membership interests in the Company. On February 28, 2006, the change in ownership became effective. LPCC, Inc., an affiliate of BLR Construction Companies, L.L.C., was excluded from the transaction.

The Company entered into a three year employment agreement with its CEO on January 1, 2005, which provides for certain compensation upon the sale of the Company. At February 28, 2006, the Company’s commitment as a result of the sale amounts to $380,769.

F-115

WRIGHT, MOORE, DEHART, DUPUIS & HUTCHINSON, L.L.C.

	Certified Public Accountants
	100 Petroleum Drive, 70508
JOHN W. WRIGHT, CPA*	P. O. Box 80569 • Lafayette, Louisiana 70598-0569	CHRISTINE R. DUNN, CPA
JAMES H. DUPUIS, CPA, CFP*	(337) 232-3637 • FAX (337) 235-8557	ANDRE D. BROUSSARD, CPA
JOE D. HUTCHINSON, CPA*	www.wmddh.com	MARY PATRICIA KEELEY, CPA
JAN H. COWEN, CPA*		KRISTIE C. BOUDREAUX, CPA
LANCE E. CRAPPELL, CPA*		BRIDGET B. TILLEY, CPA, MT
PAT BAHAM DOUGHT, CPA*		DAMIAN H. SPIESS, CPA, CFP
MICAH R. VIDRINE, CPA*		TASHA A. RALEY, CPA
TRAVIS M. BRINSKO, CPA*		PATRICK WAGUESPACK, CPA
RICK STUTES, CPA, CVA		CHIP CANTRELL, CPA
		DANE P. FALGOUT, CPA
*  A PROFESSIONAL CORPORATION		ROBIN G. STOCKTON, CPA
RETIRED
M. TROY MOORE, CPA*
MICHAEL G. DeHART, CPA. CVA, MBA*

Independent Auditors’ Report on Supplementary Information

To the Board of Directors

BLR Construction Companies. L.L.C.

Duson, Louisiana

Our audit of the basic financial statements for the year ended December 31, 2005 was made primarily to form an opinion on such financial statements taken as a whole. The supplementary information is presented for purposes of additional analysis and is not a required part of the basic financial statements. The supplementary information has been subjected to the audit procedures applied in the examination of the basic financial statements and is, in our opinion, fairly presented in all material respects in relation to the basic financial statements taken as a whole.

CERTIFIED PUBLIC ACCOUNTANTS

March 17, 2006

F-116

BLR CONSTRUCTION CO., INC. AND AFFILIATES

COMBINED SCHEDULE OF GENERAL AND ADMINISTRATIVE EXPENSES

FOR THE YEAR ENDED DECEMBER 31, 2005

Advertising	$	73,284
Auto and truck expense		566,865
Bad debt		144,225
Bank charges		4,286
Contract labor		21,483
Contributions		12,736
Customer relations		22,707
Drug testing		5,455
Dues and subscriptions		4,327
Employee benefits		2,442
Fuel		97,677
Insurance		785,320
Janitorial		1,040
Legal and professional		310,134
Medical		22,865
Office expense		71,164
Penalties		8,146
Rent expense		59,930
Repairs and maintenance		35,889
Retirement		35,163
Safety		95,751
Salaries and wages		2,742,966
Supplies		245,014
Taxes and licenses		312,352
Travel and entertainment		474,101
Uniforms		24,573
Utilities		147,947
Total general and administrative expenses	$	6,327,842

See Independent Auditors’ Report on Supplementary Information.

F-117

WRIGHT, MOORE, DEHART, DUPUIS & HUTCHINSON, L.L.C.

	Certified Public Accountants 100 Petroleum Drive, 70508
JOHN W. WRIGHT, CPA* JAMES H. DUPUIS, CPA, CFP* JOE D. HUTCHINSON, CPA* JAN H. COWEN, CPA* LANCE E. CRAPPELL, CPA* PAT BAHAM DOUGHT, CPA* MICAH R. VIDRINE, CPA* TRAVIS M. BRINSKO, CPA* * A PROFESSIONAL CORPORATION RETIRED M. TROY MOORE, CPA* MICHAEL G. DeHART, CPA, CVA, MBA*	P.O. Box 80569 Ÿ Lafayette, Louisiana 70598-0569 (337) 232-3637 Ÿ FAX (337) 235-8557 www.wmddh.com	CHRISTINE R. DUNN, CPA RICK STUTES, CPA, CVA ANDRE D. BROUSSARD, CPA MARY PATRICIA KEELEY, CPA KRISTIE C. BOUDREAUX, CPA BRIDGET B. TILLEY, CPA, MT DAMIAN H. SPIESS, CPA, CFP TASHA A. RALEY, CPA PATRICK WAGUESPACK, CPA CHIP CANTRELL, CPA DANE P. FALGOUT, CPA

INDEPENDENT AUDITORS’ REPORT

To the Board of Directors

BLR Construction Co., Inc. and Affiliates

Duson, Louisiana

We have audited the accompanying Combined Balance Sheet of BLR Construction Co., Inc. and Affiliates as of December 31, 2004 and the related Combined Statements of Income, Retained Earnings and Cash Flows for the year then ended. 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 audit.

We conducted our audit in accordance with auditing standards generally accepted in the United States of America. 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 financial statements referred to above present fairly, in all material respects, the financial position of BLR Construction Co., Inc. and Affiliates as of December 31, 2004 and the results of its operations and cash flows for the year then ended in conformity with accounting principles generally accepted in the United States of America.

WRIGHT, MOORE, DEHART,

DUPUIS & HUTCHINSON, L.L.C.

CERTIFIED PUBLIC ACCOUNTANTS

May 27, 2005

F-118

BLR CONSTRUCTION CO., INC. AND AFFILIATES

COMBINED BALANCE SHEET

DECEMBER 31, 2004

Assets
Current assets
Cash	$	74,803
Cash—restricted		268,704
Accounts receivable
Trade (net of allowance for doubtful accounts of $95,000)		3,829,500
Other		3,205,450
Income tax refund receivable		7,167
Due from affiliates		311,936
Prepaid expenses		210,599
Total current assets		7,908,159
Property and equipment
Vehicles		1,079,723
Buildings and improvements		583,701
Machinery and equipment		2,395,630
Furniture and fixtures		589,494
Mats		9,000,918
Land		49,987
Total		13,699,453
Less: Accumulated depreciation		3,869,836
Property and equipment—net		9,829,617
Other assets
Investment, at cost		30,000
Deposits		300
Total other assets		30,300
Total assets	$	17,768,076
Liabilities and stockholders’ equity
Current liabilities
Accounts payable	$	2,140,404
Notes payable		4,434,467
Current maturities of long-term debt		1,703,036
Income taxes payable		28,847
Interest payable		18,332
Accrued expenses and other current liabilities		1,228,747
Total current liabilities		9,553,833
Long-term liabilities
Notes payable, less current portion		2,130,223
Deferred income taxes		909,343
Due to stockholders		573,321
Total long-term liabilities		3,612,887
Stockholders’ equity
Common stock		25,600
Additional paid in capital		275,948
Retained earnings		4,549,808
Less: 100 shares of treasury stock, at cost		(250,000	)
Total stockholders’ equity		4,601,356
Total liabilities and stockholders’ equity	$	17,768,076

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

F-119

BLR CONSTRUCTION CO., INC. AND AFFILIATES

COMBINED STATEMENT OF INCOME

FOR THE YEAR ENDED DECEMBER 31, 2004

Revenue	$	23,953,441
Cost of revenue
Depreciation		1,824,146
Labor and related costs		5,727,106
Materials and supplies		3,371,246
Rent		2,288,127
Other costs		2,385,172
Total cost of revenue		15,595,797
Gross profit		8,357,644
Operating expenses
General and administrative expenses		3,927,607
Depreciation		26,994
Total operating expenses		3,954,601
Operating income		4,403,043
Other income (expense)
Interest expense		(468,010	)
Loss on sale of assets		(216,487	)
Miscellaneous		152,066
Interest income		26,123
Total other expense		(506,308	)
Income before income taxes		3,896,735
Income taxes
Current		21,306
Deferred		579,856
Total income taxes		601,162
Net income	$	3,295,573

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

F-120

BLR CONSTRUCTION CO., INC. AND AFFILIATES

COMBINED STATEMENT OF RETAINED EARNINGS

FOR THE YEAR ENDED DECEMBER 31, 2004

Balance at beginning of year as previously reported	$	1,785,563
Prior period adjustments—see Note 15		(531,328	)
Balance at beginning of year as restated		1,254,235
Additions
Net income		3,295,573
Balance at end of year	$	4,549,808

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

F-121

BLR CONSTRUCTION CO., INC. AND AFFILIATES

COMBINED STATEMENT OF CASH FLOWS

FOR THE YEAR ENDED DECEMBER 31, 2004

Cash flows from operating activities
Net income	$	3,295,573
Adjustments to reconcile net income to net cash provided by operating activities
Depreciation		1,851,140
Loss on sale of assets		216,487
Deferred income taxes		579,856
Changes in assets and liabilities
Accounts receivable		(3,059,274	)
Inventories		2,213
Income tax refund receivable		12,685
Prepaid expenses		118,691
Accounts payable		722,019
Income taxes payable		8,031
Interest payable		18,332
Accrued expenses and other current liabilities		951,595
Net cash provided by operating activities		4,717,348
Cash flows from investing activities
Proceeds from sale of property and equipment		349,755
Purchases of property and equipment		(4,557,278	)
Loans to affiliates		(311,936	)
Purchases of investments		(30,000	)
Net cash used in investing activities		(4,549,459	)
Cash flows from financing activities
Decrease in due to stockholders		(224,590	)
Proceeds from issuance of debt		500,000
Net borrowing on lines of credit		1,804,794
Repayment of debt		(2,164,538	)
Net cash used in financing activities		(84,334	)
Net increase in cash	$	83,555
Cash at beginning of year		259,952
Cash at end of year	$	343,507

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

F-122

BLR CONSTRUCTION CO., INC. AND AFFILIATES

NOTES TO COMBINED FINANCIAL STATEMENTS

1. Organization

BLR Construction Co., Inc. was incorporated in the state of Louisiana on December 15, 1994. The affiliated group of companies is engaged in various enterprises including oilfield construction, pipeline construction, crewboat and tugboat rentals, and contract labor. The affiliated group of companies operates in the Southern United States.

2. Summary of Significant Accounting Policies

Principles of Combination: The accompanying financial statements for the year ended December 31, 2004 include the combined accounts of BLR Construction Co., Inc. and its affiliates, BLR Crewboats, Inc., BLR Marine Services, Inc., BLR Roustabout, Inc., Louisiana Pipeline and Construction Co., Inc. (an S-corporation), and LPCC, Inc., collectively referred to as “the Company”. All material intercompany balances and transactions have been eliminated in the combination.

Property and Equipment: Property and equipment are stated at cost. Expenditures for property and equipment and items which substantially increase the useful lives of existing assets are capitalized at cost and depreciated. Routine expenditures for repairs and maintenance are expensed as incurred. The cost and related accumulated depreciation of property and equipment disposed of are eliminated from the accounts, and any resulting gain or loss is recognized.

Depreciation is provided utilizing the straight-line method. Depreciation expense amounts to $1,851,140 for the year ended December 31, 2004.

Use of Estimates: The preparation of financial statements requires management to make estimates and assumptions that affect certain reported amounts and disclosures. Accordingly, actual results could differ from those estimates.

Cash Flows: For purposes of the statements of cash flows, the Company considers all highly liquid investments with an original maturity of three months or less to be cash equivalents.

Advertising: Advertising costs, except for costs associated with direct-response advertising, are charged to operations when incurred. The costs of direct-response advertising are capitalized and amortized over the period during which future benefits are expected to be received. Advertising expense was $17,710 for the year ended December 31, 2004.

Accounts Receivable: Trade accounts receivable are carried at their estimated collectible amounts. Trade credit is generally extended on a short-term basis; thus receivables do not bear interest, although a finance charge may be applied to amounts past due. The Company generally does not require collateral, and the majority of its trade receivables are unsecured. Trade accounts receivable are periodically evaluated for collectibility based on past credit history with customers and their current financial condition, and are charged against allowance for doubtful accounts when they are deemed uncollectible.

Credit Risk: Financial instruments which potentially subject the Company to concentrations of credit risk include cash and receivables. Concentration of credit risk with respect to receivables is limited due to the Company’s large number of customers. However, at December 31, 2004, three customers comprised approximately 59% of total receivables. The Company maintains cash accounts at several institutions. The balances are insured by the Federal Deposit Insurance Corporation up to $100,000 per institution. At December 31, 2004, the Company did not exceed the insured limit.

F-123

BLR CONSTRUCTION CO., INC. AND AFFILIATES

NOTES TO COMBINED FINANCIAL STATEMENTS—(Continued)

3. Notes Payable—Short-Term

Notes payable at December 31, 2004 consist of the following:

Regions Bank, $4,000,000 line of credit dated November 20, 2004, due November 20, 2005, interest rate LIBOR + 3.00%, secured by accounts receivable, equipment, real estate and personal guarantees of stockholders	$	1,399,243
Regions Bank, $1,750,000 line of credit dated May 17, 2004, due May 17, 2005, interest rate LIBOR + 3.50%, secured by accounts receivable, equipment, real estate and guaranty of stockholders		1,750,000
Regions Bank, $1,000,000 line of credit dated May 17, 2004, due May 17, 2005, interest rate LIBOR + 3.50%, secured by accounts receivable, equipment, real estate and guaranty of stockholders		220,523
Duphil, $998,360 note dated May 1, 2004, due April 1, 2005, interest rate 6.00%, payable in monthly installments or $85,925, unsecured		423,256
Duphil, $396,325 note dated June 4, 2004, due November 4, 2004, interest rate 6.00%, payable in monthly installments of $67,215, unsecured, note paid off on January 13, 2005		66,881
Regions Bank, $1,500,000 line of credit dated September 23, 2004, due September 23, 2005, interest rate LIBOR + 3.00%, secured by accounts receivable, equipment, real estate and personal guarantees of stockholders		574,564
Total	$	4,434,467

F-124

BLR CONSTRUCTION CO., INC. AND AFFILIATES

NOTES TO COMBINED FINANCIAL STATEMENTS—(Continued)

4. Notes Payable

Notes payable at December 31, 2004 consist of the following:

Regions Bank, $1,206,963 note dated November 20, 2003, due December 5, 2006, payable in monthly installments of $23,153 and one final payment estimated to be $417,815, interest rate 5.50%, secured by accounts receivable, equipment, real estate and personal guarantees of stockholders	$	880,416
Regions Bank, $32,000 note dated October 6, 2003, due October 20, 2008, interest rate LIBOR + 3.50%, payable in monthly installments of $600, secured by equipment		24,694
Regions Bank, $36,000 note dated January 22, 2004, due January 23, 2008, interest rate LIBOR + 3.50%, payable in monthly installments of $824, secured by vehicle		28,430
Regions Bank, $24,800 note dated January 9, 2004, due January 23, 2008, interest rate LIBOR + 3.50%, payable in monthly installments of $569, secured by trailer		19,022
Regions Bank, $500,000 note dated May 17, 2004, due May 17, 2007, interest rate LIBOR + 3.50%, payable in monthly installments of $14,923, secured by accounts receivable and equipment		409,437
Regions Bank, $34,000 note dated March 3, 2004, due March 17, 2009, interest rate 6.05%, payable in monthly installments of $661, secured by vehicle		29,615
Midsouth National Bank, $27,423 note dated August 22, 2003, due August 25, 2006, interest rate 5.75%, payable in monthly installments of $883, secured by vehicle		15,805
Case Credit, notes dated November 30, 2000 to December 31, 2004, for various amounts, due December 1, 2005 to January 15, 2010, payable in monthly installments of $989 to $1,860, interest rate 4.90% to 6.25%, secured by equipment		213,948
Ford Motor Credit, notes dated July 8, 2004 to July 23, 2004, for various amounts, due July 21, 2007 to August 5, 2008, payable in monthly installments of $668 to $812, interest rate 5.99% to 6.49%, secured by vehicles		69,825
GMAC, $21,129 note dated August 26, 2004, due August 25, 2007, interest rate 8.74%, payable in monthly installments of $669, secured by vehicle		19,042
Caterpillar, $174,490 note dated August 6, 2004, due August 6, 2009, interest rate 5.98%, payable in monthly installments of $3,371, secured by vehicle		165,097
Duphil, $1,500,000 note dated December 1, 2004, due May 1, 2006, interest rate 6.00%, payable in monthly installments of $87,348, unsecured		1,420,152
Regions Bank, $444,833 note dated November 20, 2003, due December 5, 2006, payable in monthly installments of $8,533 and one final payment estimated to be $200,076, interest rate 5.50%, secured by accounts receivable, equipment, real estate and personal guarantees of stockholders		290,151
Midsouth National Bank, $18,202 note dated August 22, 2003, due August 25, 2006, payable in monthly installments of $553, interest rate 5.75%, secured by vehicle		10,210
GMAC, $27,768 note dated August 25, 2004, due August 25, 2007, interest rate 8.74%, payable in monthly installments of $880, secured by vehicle		25,028
GMAC, $27,280 note dated August 25, 2004, due August 25, 2007, interest rate 8.74%, payable in monthly installments of $864, secured by vehicle		24,588
Case Credit, $81,648 note dated July 25, 2002, due July 25, 2007, payable in monthly installments of $1,537, interest rate 4.90%, secured by equipment		44,671
Case Credit, $110,750 note dated June 21, 2004, due June 21, 2009, payable in monthly installments of $2,136, interest rate 5.91%, secured by equipment		101,118
Ford Motor Credit, notes dated November 19, 2002 to October 6, 2003, for various amounts, due November 19, 2005 to October 20, 2006, payable in monthly installments of $790 to $805, interest rate 0.00% to 5.00%, secured by vehicles		42,010
		3,833,259
Less: current portion		(1,703,036	)
Long-term portion	$	2,130,223

F-125

BLR CONSTRUCTION CO., INC. AND AFFILIATES

NOTES TO COMBINED FINANCIAL STATEMENTS—(Continued)

Annual maturities of long-term debt during each year ended December 31 are as follows:

2006	$	1,659,770
2007		257,224
2008		125,199
2009		86,050
Later		1,980
Total	$	2,130,223

At December 31, 2004, the Company has available approximately $3,067,382 of unused lines of credit with Regions Bank to be drawn upon. The interest rates on the lines of credit are LIBOR + 3.00% and 3.50%.

5. Major Customers

Sales to customers for the year ended December 31, 2004, which amounted to 10% or more of the Company’s revenue is as follows:

	Total Amount		% of Total Revenue
Customer A	$	3,572,041	14.91	%
Customer B		3,186,949	13.30	%

6. 401(k) Plan

The Company contributes to a 401(k) plan that is a qualified plan under the Employees Retirement Income Security Act of 1974. All employees who are at least 21 years old and have at least three months of service at the end of each calendar quarter are eligible to participate in the plan. The Company matches one-half of employee contributions up to 3% of compensation. For the year ended December 31, 2004, the Company made matching contributions of $25,631 to the plan.

7. Related Party Transactions

The Company engaged in transactions during the year with stockholders and the following related companies:

Rental One, L.L.C.

NJM Technology, L.L.C.

Flow Chem Technologies, L.L.C.

Oilfield Heavy Haulers, L.L.C.

F-126

BLR CONSTRUCTION CO., INC. AND AFFILIATES

NOTES TO COMBINED FINANCIAL STATEMENTS—(Continued)

These transactions resulted in the following amounts that are included in the financial statements for the year ended December 31, 2004.

Accounts receivable	$	26,392
Due from affiliates		311,936
Accounts payable		35,783
Due to stockholders		573,321
Accrued interest		5,134
Revenue		211,073
Rent expense		37,500
Interest expense		67,075
Interest income		26,055
Miscellaneous income		23,900

Due to stockholders consists of various advances to the Company that are due on demand at an interest rate of 6.00%. However, since it is not the intent of the stockholders to call these amounts in the near future, the balance is included in the Long-Term Liabilities section on the balance sheet.

8. Income Taxes (Benefit)

The Company has provided for income tax as follows:

Currently payable (receivable):
Federal tax		($475	)
State tax		21,781
Deferred		579,856
Total provision for income taxes	$	601,162

The Company’s effective income tax rate varies from what would be expected if the statutory rate were applied to income before income taxes primarily because of certain expenses deductible for financial reporting purposes that are not deductible for tax purposes and tax exempt income.

Deferred income taxes reflect the net tax effects of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes. The major temporary differences that give rise to the deferred tax assets and liabilities are allowance for doubtful accounts and depreciation.

The balance in deferred tax asset (liability) as of December 31, 2004 is as follows:

Deferred tax asset	$	25,241
Deferred tax liability		(934,584	)
Deferred tax asset (liability) before valuation allowance		(909,343	)
Less: valuation allowance		—
Net deferred tax liability	($	909,343	)

F-127

BLR CONSTRUCTION CO., INC. AND AFFILIATES

NOTES TO COMBINED FINANCIAL STATEMENTS—(Continued)

9. Additional Cash Flow Disclosures

Cash paid during the year for:
Interest	$	484,367
Income taxes	$	12,758
Non cash investing and financing activities:
Equipment purchased under installment note obligations	$	3,630,972

10. Rentals Under Operating Leases

The Company leases vehicles and equipment under operating leases expiring in various years through 2008. Future minimum lease payments under noncancelable operating leases having remaining terms in excess of one year as of December 31, 2004 are:

Year Ending December 31,	Amount
2005	$	187,573
2006		154,278
2007		90,985
2008		14,205
2009		—
	$	447,041

Rent expense relating to these leases was $187,573 for the year ended December 31, 2004.

11. Common Stock

Common stock at December 31, 2004 is as follows:

BLR Construction Co., Inc.
Common stock, no par value, 1,000 shares authorized, 888 shares issued and outstanding	$	6,000
BLR Crewboats, Inc.
Common stock, no par value, 1,000 shares authorized, 501 shares issued and outstanding		10,000
BLR Marine Services, Inc.
Common stock, no par value, 1,000 shares authorized, 502 shares issued and outstanding		5,000
BLR Roustabout, Inc.
Common stock, no par value, 1,000 shares authorized, 660 shares issued and outstanding		3,500
Louisiana Pipeline and Construction Co., Inc.
Common stock, no par value, 10,000 shares authorized, 200 shares issued, 100 shares outstanding		1,000
LPCC, Inc.
Common stock, no par value, 1,000 shares authorized, 200 shares issued and outstanding		100
Total common stock	$	25,600

12. Investment

The Company’s investment consists of a six percent working interest in an oil well. The investment is stated at cost, which does not exceed estimated net realizable value.

F-128

BLR CONSTRUCTION CO., INC. AND AFFILIATES

NOTES TO COMBINED FINANCIAL STATEMENTS—(Continued)

13. Commitments and Contingencies

Insurance Program: The Company self-insures for business automobile liability, commercial general liability and worker’s compensation. Under the self-insured plan, the Company is liable for the first $50,000 of claims per occurrence. Claims in excess of $50,000 are covered by an excess liability policy. The plan provides for aggregate protection by establishing an aggregate loss fund based on incurred payroll. The aggregate loss fund totaled $268,704 at December 31, 2004 and is shown as restricted cash on the balance sheet.

Litigation: The Company is subject to various claims and legal proceedings covering matters that arise in the ordinary course of its business activities. Management believes that any liability that may ultimately result from the resolution of these matters will not have a material adverse effect on the financial condition or results of operations of the Company.

14. Subsequent Event

Effective January 1, 2005, the group of affiliated companies referred to in Note 2 merged to form BLR Construction Company, L.L.C. The newly formed company is a limited liability company that will be regarded as a S-corporation for income tax purposes. Accordingly, the deferred tax liability as of December 31, 2004 will be eliminated on January 1, 2005.

15. Prior Period Adjustment

Retained earnings as of December 31, 2003 has been adjusted to dispose of mats that should have been disposed of in previous years. Had the error not been made, combined net income for 2001, 2002 and 2003 would have been decreased by $644,657.		($644,657	)
Retained earnings as of December 31, 2003 has also been adjusted to record revenue that should have recorded in 2003. Had the error not been made, net income for 2003 would have increased by $113,329.		113,329
Total	$	(531,328	)

F-129

WRIGHT, MOORE, DEHART, DUPUIS & HUTCHINSON, L.L.C.

	Certified Public Accountants 100 Petroleum Drive, 70508
JOHN W. WRIGHT, CPA* JAMES H. DUPUIS, CPA, CFP* JOE D. HUTCHINSON, CPA* JAN H. COWEN, CPA* LANCE E. CRAPPELL, CPA* PAT BAHAM DOUGHT, CPA* MICAH R. VIDRINE, CPA* TRAVIS M. BRINSKO, CPA* * A PROFESSIONAL CORPORATION RETIRED M. TROY MOORE, CPA* MICHAEL G. DeHART, CPA, CVA, MBA*	P.O. Box 80569 · Lafayette, Louisiana 70598-0569 (337) 232-3637 · FAX (337) 235-8557 www.wmddh.com	CHRISTINE R. DUNN, CPA RICK STUTES, CPA, CVA ANDRE D. BROUSSARD, CPA MARY PATRICIA KEELEY, CPA KRISTIE C. BOUDREAUX, CPA BRIDGET B. TILLEY, CPA, MT DAMIAN H. SPIESS, CPA, CFP TASHA A. RALEY, CPA PATRICK WAGUESPACK, CPA CHIP CANTRELL, CPA DANE P. FALGOUT, CPA

INDEPENDENT AUDITORS’ REPORT ON SUPPLEMENTARY INFORMATION

To the Board of Directors

BLR Construction Co., Inc. and Affiliates

Duson, Louisiana

Our report on our audit of the basic financial statements of BLR Construction Co., Inc. and Affiliates for December 31, 2004 appears on page two. That audit was conducted for the purpose of forming an opinion on the basic financial statements taken as a whole. The Combined Schedule of General and Administrative Expenses is presented for purposes of additional analysis and is not a required part of the basic financial statements. Such information has been subjected to the auditing procedures applied in the audit of the basic financial statements and, in our opinion, is fairly stated in all material respects in relation to the basic financial statements taken as a whole.

WRIGHT, MOORE, DEHART,

DUPUIS & HUTCHINSON, L.L.C.

CERTIFIED PUBLIC ACCOUNTANTS

May 27, 2005

F-130

BLR CONSTRUCTION CO., INC. AND AFFILIATES

COMBINED SCHEDULE OF GENERAL AND ADMINISTRATIVE EXPENSES

FOR THE YEAR ENDED DECEMBER 31, 2004

Advertising	$	17,710
Auto and truck expense		301,897
Bad debt		465,702
Bank charges		3,738
Contract labor		84,177
Contributions		11,533
Customer relations		30,566
Drug testing		9,443
Dues and subscriptions		13,343
Employee benefits		1,300
Fuel		97,156
Insurance		645,224
Legal and professional		262,246
Medical		18,764
Office expense		49,131
Penalties		1,830
Rent expense		49,201
Repairs and maintenance		329,896
Retirement expense		25,631
Safety		47,200
Salaries and wages		817,951
Supplies		40,902
Taxes and licenses		122,027
Travel and entertainment		324,282
Uniforms		35,241
Utilities		121,516
Total general and administrative expenses	$	3,927,607

F-131

WRIGHT, MOORE, DEHART, DUPUIS & HUTCHINSON, L.L.C.

	Certified Public Accountants 100 Petroleum Drive, 70508
JOHN W. WRIGHT, CPA* JAMES H. DUPUIS, CPA, CFP* JOE D. HUTCHINSON, CPA* JAN H. COWEN, CPA* LANCE E. CRAPPELL, CPA* PAT BAHAM DOUGHT, CPA* MICAH R. VIDRINE, CPA* TRAVIS M. BRINSKO, CPA* RICK STUTES CPA, CVA * A PROFESSIONAL CORPORATION RETIRED M. TROY MOORE, CPA* MICHAEL G. DeHART, CPA, CVA, MBA*	P.O. Box 80569 · Lafayette, Louisiana 70598-0569 (337) 232-3637 · FAX (337) 235-8557 www.wmddh.com	CHRISTINE R. DUNN, CPA ANDRE D. BROUSSARD, CPA MARY PATRICIA KEELEY, CPA KRISTIE C. BOUDREAUX, CPA BRIDGET B. TILLEY, CPA, MT DAMIAN H. SPIESS, CPA, CFP TASHA A. RALEY, CPA PATRICK WAGUESPACK, CPA CHIP CANTRELL, CPA DANE P. FALGOUT, CPA ROBIN G. STOCKTON. CPA

INDEPENDENT AUDITORS’ REPORT

To the Board of Directors

BLR Construction Co. Inc. and Affiliates

Duson. Louisiana

We have audited the accompanying combined balance sheet of BLR Construction Co. Inc. and Affiliates as of December 31, 2003, and the related combined statements of income, retained earnings and cash flows for the year then ended. 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 audit.

We conducted our audit in accordance with auditing standards generally accepted in the United States of America. 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 audit provides a reasonable basis for our opinion.

In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of BLR Construction Co. Inc. and Affiliates as of December 31, 2003, and the results of its operations and its cash flows for the year then ended in conformity with accounting principles generally accepted in the United States of America.

WRIGHT, MOORE, DEHART,

DUPUIS & HUTCHINSON, L.L.C.

CERTIFIED PUBLIC ACCOUNTANTS

March 27, 2006

F-132

BLR CONSTRUCTION CO., INC. AND AFFILIATES

COMBINED BALANCE SHEET

DECEMBER 31, 2003

Assets
Current assets
Cash	$	266,422
Accounts receivable
Trade		3,117,283
Other		857,997
Inventories		2,213
Income tax refund receivable		19,852
Prepaid expenses		329,290
Deferred income taxes		36,053
Total current assets		4,629,110
Property and equipment
Vehicles		1,435,364
Buildings and improvements		400,146
Machinery and equipment		1,713,475
Furniture and fixtures		718,701
Mats		3,422,087
Property held under capital lease		21,721
Land		23,454
Total		7,734,948
Less: accumulated depreciation		3,676,199
Property and equipment—net		4,058,749
Other assets
Deposits		300
Total other assets		300
Total assets	$	8,688,159
Liabilities and stockholders’ equity
Current liabilities
Accounts payable	$	1,418,385
Notes payable		2,387,016
Current maturities of long-term debt		483,273
Current maturities of capital lease obligation		4,268
Income taxes payable		20,816
Interest payable		34,689
Accrued expenses and other current liabilities		248,537
Total current liabilities		4,596,984
Long-term liabilities
Long-term debt, less current maturities		1,611,988
Capital lease obligation, less current maturities		9,953
Deferred income taxes		365,540
Due to stockholders		797,911
Total long-term liabilities		2,785,392
Stockholders’ equity
Common stock		25,600
Additional paid in capital		275,948
Retained earnings		1,254,235
Less: 100 shares of treasury stock, at cost		(250,000	)
Total stockholders’ equity		1,305,783
Total liabilities and stockholders’ equity	$	8,688,159

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

F-133

BLR CONSTRUCTION CO., INC. AND AFFILIATES

COMBINED STATEMENT OF INCOME

FOR THE YEAR ENDED DECEMBER 31, 2003

Revenue	$	13,727,096
Cost of revenue
Depreciation		1,133,214
Labor and related costs		4,066,514
Materials and supplies		1,849,804
Rent		1,459,143
Other costs		2,190,515
Total cost of revenue		10,699,190
Gross profit		3,027,906
Operating expenses
General and administrative expenses		2,252,785
Depreciation		19,388
Total operating expenses		2,272,173
Operating income		755,733
Other income (expense)
Interest expense		(338,871	)
Loss on sale of assets		(138,429	)
Miscellaneous		34,981
Interest income		141
Total other income (expense)		(442,178	)
Income before income taxes		313,555
Income taxes
Current		7,371
Deferred		16,377
Total income taxes		23,748
Net income	$	289,807

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

F-134

BLR CONSTRUCTION CO., INC. AND AFFILIATES

COMBINED STATEMENT OF RETAINED EARNINGS

FOR THE YEAR ENDED DECEMBER 31, 2003

Balance at beginning of year as previously reported	$	1,630,615
Prior period adjustments—see note 15		(666,187	)
Balance at beginning of year as restated		964,428
Additions
Net income		289,807
Balance at end of year	$	1,254,235

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

F-135

BLR CONSTRUCTION CO., INC. AND AFFILIATES

COMBINED STATEMENT OF CASH FLOWS

FOR THE YEAR ENDED DECEMBER 31, 2003

Cash flows from operating activities
Net income	$	289,807
Adjustments to reconcile net income to net cash provided by operating activities
Depreciation		1,152,602
Loss on sale of assets		138,429
Deferred income taxes		16,377
Changes in assets and liabilities
Accounts receivable		(871,801	)
Income tax refund receivable		(19,852	)
Prepaid expenses		(157,979	)
Accounts payable		(63,909	)
Income taxes payable		(9,802	)
Accrued expenses and other current liabilities		211,431
Net cash provided by operating activities		685,303
Cash flows from investing activities
Proceeds from sale of property and equipment		93,779
Purchases of property and equipment		(1,227,840	)
Net cash used in investing activities		(1,134,061	)
Cash flows from financing activities
Increase in due to stockholders		63,605
Proceeds from issuance of debt		2,147,917
Net borrowings on lines of credit		1,037,573
Repayment of debt and capital lease obligations		(2,553,651	)
Net cash provided by financing activities		695,444
Net increase in cash		246,686
Cash at beginning of year		19,736
Cash at end of year	$	266,422

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

F-136

BLR CONSTRUCTION CO., INC. AND AFFILIATES

NOTES TO COMBINED FINANCIAL STATEMENTS

1. Organization

BLR Construction Co., Inc. was incorporated in the state of Louisiana on December 15, 1994. The affiliated group of companies is engaged in various enterprises including oilfield construction, pipeline construction, crewboat and tugboat rentals, and contract labor. The affiliated group of companies operates in the states of Louisiana and Texas.

2. Summary of Significant Accounting Policies

Principles of Combination: The accompanying financial statements for the year ended December 31, 2003 include the combined accounts of BLR Construction Co., Inc. and its affiliates, BLR Crewboats, Inc., BLR Marine Services, Inc. BLR Roustabout, Inc., Louisiana Pipeline and Construction Co., Inc. (an S-corporation) and LPCC, Inc., collectively referred to as “the Company”. All material intercompany balances and transactions have been eliminated in the combination.

Inventories: Inventories are carried at the lower of cost (first-in, first-out method) or market.

Property and Equipment: Property and equipment are stated at cost. Expenditures for property and equipment and items which substantially increase the useful lives of existing assets are capitalized at cost and depreciated. Routine expenditures for repairs and maintenance are expensed as incurred. The cost and related accumulated depreciation of property and equipment disposed of are eliminated from the accounts, and any resulting gain or loss is recognized.

Depreciation is provided utilizing the straight-line method. Depreciation expense amounts to $1,152,602 for the year ended December 31, 2003.

Use of Estimates: The preparation of financial statements requires management to make estimates and assumptions that affect certain reported amounts and disclosures. Accordingly, actual results could differ from those estimates.

Cash Flows: For purposes of the statements of cash flows, the Company considers all highly liquid investments with an original maturity of three months or less to be cash equivalents.

Advertising: Advertising costs, except for costs associated with direct-response advertising, are charged to operations when incurred. The costs of direct-response advertising are capitalized and amortized over the period during which future benefits are expected to be received. Advertising expense was $15,256 for the year ended December 31, 2003.

Accounts Receivable: Trade accounts receivable are carried at their estimated collectible amounts. Trade credit is generally extended on a short-term basis; thus receivables do not bear interest, although a finance charge may be applied to amounts past due. The Company generally does not require collateral, and the majority of its trade receivables are unsecured. Trade accounts receivable are periodically evaluated for collectibility based on past credit history with customers and their current financial condition, and are charged against bad debt expense when they are deemed uncollectible. Use of this method does not result in a material difference from the valuation method required by generally accepted accounting principles.

Credit Risk: Financial instruments which potentially subject the Company to concentrations of credit risk include temporary cash investments and receivables. Concentration of credit risk with respect to receivables is limited due to the Company’s large number of customers. However, at December 31, 2003, two customers

F-137

BLR CONSTRUCTION CO., INC. AND AFFILIATES

NOTES TO COMBINED FINANCIAL STATEMENTS—(Continued)

comprised approximately 28% of accounts receivable. The Company maintains cash accounts at several institutions. The balances are insured by the Federal Deposit Insurance Corporation up to $100,000 per institution. At December 31, 2003, the Company exceeded the insured limit by $88,147.

3. Notes Payable—Short-Term

Notes payable at December 31, 2003 consists of the following:

Regions Bank, $2,050,000 line of credit dated November 20, 2003, due November 20, 2004, interest rate LIBOR + 3.00%, currently at 4.12%, secured by accounts receivable, equipment, real estate and personal guarantees of stockholders	$	1,544,277
A-l Credit, notes dated July 22, 2003 to August 22, 2003, due May 22, 2004, for various amounts, interest rate 5.83%, payable in monthly installments from $7,389 to $34,146, unsecured		166,467
Regions Bank, $700,000 line of credit dated November 20, 2003. due November 20, 2004, interest rate LIBOR + 3.00%, currently at 4.12%, secured by accounts receivable, equipment, real estate and personal guarantees of stockholders		595,259
A-l Credit, note dated July 22, 2003, due May 22, 2004, payable in monthly installments of $14,876, interest rate 5.83%, unsecured		81,013
Total	$	2,387,016

At December 31, 2003, the Company has available approximately $610,464 of unused lines of credit with Regions Bank to be drawn upon as needed. The interest rate on the lines of credit is LIBOR + 3.00%.

F-138

BLR CONSTRUCTION CO., INC. AND AFFILIATES

NOTES TO COMBINED FINANCIAL STATEMENTS—(Continued)

4. Long-Term Debt

Notes payable at December 31, 2003 consists of the following:

Regions Bank, $1,206,963 note dated November 20, 2003, due December 5, 2006, payable in monthly installments of $23,153 and one final payment estimated to be $545,353, interest rate 5.50%, secured by accounts receivable, equipment, real estate and personal guarantees of stockholders	$	1,206,963
Regions Bank, $32,000 note dated October 6, 2003, due October 20, 2008, interest rate LIBOR + 3.50%, currently at 4.62%, payable in monthly installments of $600, secured by equipment		31,106
Midsouth National Bank, $27,423 note dated August 22, 2003, due August 25, 2006, interest rate 5.75%, payable in monthly installments of $883, secured by vehicle		24,611
Case Credit, notes dated November 15, 1999 to July 25, 2002, for various amounts, due October 18, 2004 to July 25, 2007, payable in monthly installments of $1,068 to $1,950, interest rate 4.90% to 5.90%, secured by equipment		128,154
Ford Motor Credit, notes dated May 11, 2001 to October 2, 2001, for various amounts, due May 11, 2004 to October 17, 2004, payable in monthly installments of $471 to $528, interest rate 0.00% to 3.90%, secured by vehicles		9,473
Regions Bank, $444,833 note dated November 20, 2003, due December 5, 2006, payable in monthly installments of $8,538 and one final payment estimated to be $200,993, interest rate 5.50%, secured by accounts receivable, equipment, real estate and personal guarantees of stockholders		444,833
Midsouth National Bank, $18,202 note dated August 22, 2003, due August 25, 2006, payable in monthly installments of $553, interest rate 5.75%, secured by vehicle		16,335
GMAC, $49,011 note dated October 6, 2003, due October 6, 2008, payable in monthly installments of $817, interest rate 0.00%, secured by vehicle		47,377
Ford Motor Credit, two notes dated October 6, 2003, due October 20, 2006, payable in monthly installments of $790 each, interest rate 5.00%, secured by vehicles		50,006
Case Credit, $81,648 note dated July 25, 2002, due July 25, 2007, payable in monthly installments of $1,537, interest rate 4.90%, secured by equipment		60,503
Ford Motor Credit, notes dated August 10, 2001 to November 19, 2002, for various amounts, due November 12, 2004 to November 19, 2005, payable in monthly installments of $690 to $995, interest rate 0.00% to 0.90%, secured by vehicles		69,472
Midsouth National Bank, $29,751 note dated November 3, 1999, due November 3, 2004, payable in monthly installments of $607, interest rate 8.25%, secured by equipment		6,428
		2,095,261
Less: current portion		(483,273	)
Long-term portion	$	1,611,988

F-139

BLR CONSTRUCTION CO., INC. AND AFFILIATES

NOTES TO COMBINED FINANCIAL STATEMENTS—(Continued)

Annual maturities of long-term debt during each year ended December 31 are as follows:

2004		483,273
2005		429,781
2006		1,127,740
2007		40,481
2008		13,986
Later		—
Total	$	2,095,261

5. 401(k) Plan

The Company contributes to a 401(k) plan that is a qualified plan under the Employees Retirement Income Security Act of 1974. All employees who are at least 21 years old and have at least three months of service at the end of each calendar quarter are eligible to participate in the plan. The Company matches one-half of employee contributions up to 3% of compensation. For the year ended December 31, 2003, the Company made matching contributions of $18,306 to the plan.

6. Income Taxes

The Company has provided for income tax as follows:

Currently payable (receivable):
Federal tax	$	11,059
State tax		(3,688	)
Deferred		16,377
Total Provision for Income Taxes	$	23,748

The Company’s effective income tax rate varies from what would be expected if the statutory rate were applied to income before income taxes primarily because of certain expenses deductible for financial reporting purposes that are not deductible for tax purposes and tax exempt income.

Deferred income taxes reflect the net tax effects of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes. The major temporary differences that give rise to the deferred tax assets and liabilities are as follows: inventory capitalization, allowance for doubtful accounts, depreciation, net operating loss carryforwards, and tax credit carryforwards.

As of December 31, 2003, the Company has available $205,557 of unused federal operating loss carryforwards. $104,310 of unused state operating loss carryforwards and $5,171 of unused charitable contribution carryforwards that may be applied against future taxable income and that expire in various years from 2004 to 2023.

F-140

BLR CONSTRUCTION CO., INC. AND AFFILIATES

NOTES TO COMBINED FINANCIAL STATEMENTS—(Continued)

The balance in deferred tax asset (liability) as of December 31, 2003 is as follows:

Deferred tax asset	$	36,053
Deferred tax liability		(365,540	)
Deferred tax asset (liability) before valuation allowance		(329,487	)
Less: valuation allowance		—
Net deferred tax liability	($	329,487	)

The Company did not record a valuation allowance as of December 31, 2003 because amounts recorded as deferred tax assets are currently expected to be realized.

7. Related Party Transactions

The Company engaged in transactions during the year with the stockholders of the affiliated group of companies. These transactions resulted in the following amounts that are included in the financial statements for the year ended December 31, 2003.

Due to stockholders	$	797,911
Interest payable		18,267
Rent expense		45,000
Interest expense		68,193

Due to stockholders consists of various advances to the Company that are due on demand at an interest rate of 6.00%. However, since it is not the intent of the stockholders to call these amounts in the near future, the balance is included in the Long-Term Liabilities section on the balance sheet.

8. Major Customers

Sales to customers for the year ended December 31, 2003 which amounted to 10% or more of the Company’s revenue are as follows:

	Amount		% of Total Revenue
Customer A	$	1,491,477	10.87	%
Customer B		1,657,104	12.07	%

F-141

BLR CONSTRUCTION CO., INC. AND AFFILIATES

NOTES TO COMBINED FINANCIAL STATEMENTS—(Continued)

9. Rentals Under Operating Leases

The Company leases vehicles and equipment under operating leases expiring in various years through 2008. Future minimum lease payments under noncancelable operating leases have remaining terms in excess of one year as of December 31, 2003 are:

Year Ending December 31,	Amount
2004	$	181,657
2005		181,657
2006		154,278
2007		95,455
2008		16,005
Thereafter		—
	$	629,052

Rent expense relating to these leases was $138,826 for the year ended December 31, 2003.

10. Capital Lease

The Company leases equipment under a capital lease expiring in 2006. The assets and liabilities are recorded at the lower of the present value of the minimum lease payments or the fair value of the asset. The asset is depreciated over the lower of the related lease term or its estimated productive life. Depreciation of assets under capital lease is included in depreciation expense for 2003. The cost of the machine is $21,721 and accumulated depreciation at December 31, 2003 is $9,050.

Minimum future lease payments under capital leases as of December 31, 2003 for each of the next five years and is the aggregate are:

2004	$	5,916
2005		5,916
2006		5,423
Total		17,255
Less: amount representing interest		(3,034	)
Present value of minimum lease payments	$	14,221

11. Additional Cash Flow Disclosures

Cash paid during the year for:
Interest	$	304,182
Income taxes	$	17,280
Non cash investing and financing activities:
Equipment purchased under installment note obligations	$	179,268

F-142

BLR CONSTRUCTION CO., INC. AND AFFILIATES

NOTES TO COMBINED FINANCIAL STATEMENTS—(Continued)

12. Common Stock

Common stock at December 31, 2003 is as follows:

	Amount
BLR Construction Co., Inc. Common stock, no par value, 1,000 shares authorized, 888 shares issued and outstanding	$	6,000
BLR Crewboats, Inc. Common stock, no par value, 1,000 shares authorized, 501 shares issued and outstanding		10,000
BLR Marine Services, Inc. Common stock, no par value, 1,000 shares authorized, 502 shares issued and outstanding		5,000
BLR Roustabout, Inc. Common stock, no par value, 1,000 shares authorized, 660 shares issued and outstanding		3,500
LPCC, Inc. Common stock, no par value, 1,000 shares authorized, 200 shares issued and outstanding		100
Louisiana Pipeline and Construction Co., Inc. Common stock, no par value, 10,000 shares authorized, 200 shares issued, 100 shares outstanding		1,000
Total common stock	$	25,600

13. Subsequent Events

On February 17, 2004, the Company purchased excess coverage and became subject to a specific and aggregate self-insured retention with respect to workers” compensation, automobile liability, general liability and excess umbrella insurance coverage. The primary policies provide statutory limits for workers’ compensation, employer liability, automobile and general liability policies and are subject to retention amounts of $50,000 per occurrence and an aggregated loss fund of approximately $425,000 subject to incurred payroll. Under this plan, the Company will establish an escrowed loss fund and letter of credit with the insurance carrier.

Effective January 1, 2005, the group of affiliated companies referred to in Note 2, except for LPCC, Inc., merged to form BLR Construction Company, L.L.C. The newly formed company is a limited liability company that will be regarded as a S-corporation for income tax purposes. Accordingly, deferred taxes will be eliminated on January 1, 2005.

On February 7, 2006. the owners of BLR Construction Companies. L.L.C. entered into an agreement with Stallion Oilfield Services, LTD to sell their membership interests in the Company. On February 28. 2006, the change in ownership became effective. LPCC, Inc., an affiliate of BLR Construction Companies. L.L.C. was excluded from the transaction.

The Company entered into a three year employment agreement with its CEO on January 1, 2005. which provides for certain compensation upon the sale of the Company. At February 28, 2006. the Company’s commitment as a result of the sale amounts to $380,769.

F-143

BLR CONSTRUCTION CO., INC. AND AFFILIATES

NOTES TO COMBINED FINANCIAL STATEMENTS—(Continued)

14. Commitments and Contingencies

Insurance Program: Under the Company’s insurance program, coverage is obtained for catastrophic exposure under a self-insured retention program. It is the policy of the Company to retain a significant portion of certain expected losses related to general liability insurance. A provision for losses expected under the program is recorded based upon the Company’s estimates of the aggregate liability for claims incurred.

Under the general liability plan, the Company is liable for the first $200,000 of claims per occurrence. The co-insurer reimburses claims in excess of $200,000. The Company had no claims outstanding and no claims to be reimbursed by the co-insurer at December 31, 2003.

Litigation: The Company is subject to various claims and legal proceedings covering matters that arise in the ordinary course of its business activities. Management believes that any liability that may ultimately result from the resolution of these matters will not have a material adverse effect on the financial condition or results of operations of the Company.

15. Prior Period Adjustments

Retained earnings as of December 31, 2002 has been adjusted to dispose of mats that should have been disposed of in previous years. Had the error not been made, combined net income for 2001 and 2002 would have been decreased by $791,560	($	791,560	)
Retained earnings as of December 31, 2002 has also been adjusted to reflect write-offs of accounts receivable. Had the error not been made, net income for 2002 would have decreased by $132,234		(132,234	)
Retained earnings as of December 31, 2002 has also been adjusted to record accounts receivable that should have been recorded in 2002. Had the error not been made, net income for 2002 would have increased by $257,607		257,607
Total	($	666,187	)

F-144

WRIGHT, MOORE, DEHART, DUPUIS & HUTCHINSON, L.L.C.

	Certified Public Accountants 100 Petroleum Drive, 70508
JOHN W. WRIGHT, CPA* JAMES H. DUPUIS, CPA, CFP* JOE D. HUTCHINSON, CPA* JAN H. COWEN, CPA* LANCE E. CRAPPELL, CPA* PAT BAHAM DOUGHT, CPA* MICAH R. VIDRINE, CPA* TRAVIS M. BRINSKO, CPA* RICK STUTES, CPA, CVA * A PROFESSIONAL CORPORATION RETIRED M. TROY MOORE, CPA* MICHAEL G. DeHART, CPA, CVA, MBA*	P.O. Box 80569 · Lafayette, Louisiana 70598-0569 (337) 232-3637 · FAX (337) 235-8557 www.wmddh.com	CHRISTINE R. DUNN, CPA ANDRE D. BROUSSARD, CPA MARY PATRICIA KEELEY, CPA KRISTIE C. BOUDREAUX, CPA BRIDGET B. TILLEY, CPA, MT DAMIAN H. SPIESS, CPA, CFP TASHA A. RALEY, CPA PATRICK WAGUESPACK, CPA CHIP CANTRELL, CPA DANE P. FALGOUT, CPA ROBIN G. STOCKTON, CPA

INDEPENDENT AUDITORS’ REPORT ON SUPPLEMENTARY INFORMATION

To the Board of Directors

BLR Construction Co., Inc. and Affiliates

Duson. Louisiana

Our report on our audit of the basic financial statements of BLR Construction Co., Inc. and Affiliates appears on page two. That audit was conducted for the purpose of forming an opinion on the basic financial statements taken as a whole. The combined schedule of general and administrative expenses is presented for purposes of additional analysis and is not a required part of the basic financial statements. Such information has been subjected to the audit procedures applied in the examination of the basic financial statements and is in, our opinion, fairly presented in all material respects in relation to the basic financial statements taken as a whole.

WRIGHT, MOORE, DEHART,

DUPUIS & HUTCHINSON, L.L.C.

CERTIFIED PUBLIC ACCOUNTANTS

March 27, 2006

F-145

BLR CONSTRUCTION CO., INC. AND AFFILIATES

COMBINED SCHEDULE OF GENERAL AND ADMINISTRATIVE EXPENSES

For the year ended December 31, 2003

Advertising	$	15,296
Auto and truck expense		121,020
Bad debt		80,554
Bank charges		4,520
Contract labor		9,276
Contributions		7,214
Customer relations		35,872
Drug testing		31,204
Dues and subscriptions		6,693
Employee benefits		8,470
Fuel		23,807
Insurance		231,350
Janitorial		500
Legal and professional		172,707
Medical		36,710
Office expense		32,105
Penalties		30,624
Rent expense		60,974
Repairs and maintenance		194,583
Retirement		18,306
Safety		6,029
Salaries and wages		637,272
Supplies		15,293
Taxes and licenses		120,210
Travel and entertainment		206,861
Uniforms		24,562
Utilities		120,773
Total general and administrative expenses	$	2,252,785

See independent auditors’ report on supplementary information.

F-146

INDEPENDENT AUDITORS’ REPORT

To the Stockholder

Trail Blazer Hot Shot, Inc.

Elk City, Oklahoma

We have audited the accompanying balance sheets of Trail Blazer Hot Shot, Inc. as of December 31, 2004 and 2005, and related statements of operations, stockholder’s equity and cash flows for the years then ended. 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 auditing standards generally accepted in the United States of America. Those standards require that we plan and perform the audits 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 financial statements referred to above present fairly, in all material respects, the financial position of Trail Blazer Hot Shot, Inc. as of December 31, 2004 and 2005, and the results of its operations and its cash flows for the years then ended, in conformity with accounting principles generally accepted in the United States of America.

Our audits were conducted for the purpose of forming an opinion on the basic financial statements taken as a whole. The supplemental schedule on page F-156 is presented for purposes of additional analysis and is not required as part of the basic financial statements. Such information has been subjected to the auditing procedures applied in the audits of the basic financial statements, and, in our opinion, is fairly stated in all material respects in relation to the basic financial statements taken as a whole.

/S/    UHY MANN FRANKFORT STEIN & LIPP CPAS, LLP      

UHY Mann Frankfort Stein & Lipp CPAs, LLP

Houston, Texas

June 9, 2006

F-147

TRAIL BLAZER HOT SHOT, INC.

BALANCE SHEETS

	December 31,
	2004		2005
Assets
Current assets
Cash and cash equivalents	$	670,772	$	1,595,882
Accounts receivable—trade		1,274,093		1,573,104
Prepaid expenses and other current assets		83,669		100,051
Total current assets		2,028,534		3,269,037
Property and equipment, net		3,328,066		3,216,408
Total assets	$	5,356,600	$	6,485,445
Liabilities and stockholder’s equity
Current liabilities
Accounts payable	$	142,445	$	72,122
Accrued expenses		108,251		76,725
Current portion of long-term debt		43,695		—
Total current liabilities		294,391		148,847
Long-term debt, less current portion		2,347		—
Total liabilities		296,738		148,847
Commitments and contingencies		—		—
Stockholder’s equity		5,059,862		6,336,598
Total liabilities and stockholder’s equity	$	5,356,600	$	6,485,445

See notes to financial statements.

F-148

TRAIL BLAZER HOT SHOT, INC.

STATEMENTS OF OPERATIONS

	Year Ended December 31,
	2004		2005
Service revenue	$	5,875,919	$	8,098,513
Operating expenses
Cost of services		2,524,276		3,369,813
Selling, general and administrative		443,925		502,813
Depreciation and amortization		681,235		722,220
Total operating expenses		3,649,436		4,594,846
Operating income		2,226,483		3,503,667
Other income
Interest income		1,765		4,876
Other income		35,933		18,673
Total other income		37,698		23,549
Net income	$	2,264,181	$	3,527,216

See notes to financial statements.

F-149

TRAIL BLAZER HOT SHOT, INC.

STATEMENTS OF CHANGES IN STOCKHOLDER’S EQUITY

YEARS ENDED DECEMBER 31, 2004 AND 2005

	Common Stock		Retained Earnings			Total
Balances, January 1, 2004	$	1,000	$	3,165,272		$	3,166,272
Net income		—		2,264,181			2,264,181
Distributions		—		(370,591	)		(370,591	)
Balances, December 31, 2004		1,000		5,058,862			5,059,862
Net income		—		3,527,216			3,527,216
Distributions		—		(2,250,480	)		(2,250,480	)
Balances, December 31, 2005	$	1,000	$	6,335,598		$	6,336,598

See notes to financial statements.

F-150

TRAIL BLAZER HOT SHOT, INC.

STATEMENTS OF CASH FLOWS

	Year Ended December 31,
	2004			2005
Cash flows from operating activities
Net income	$	2,264,181		$	3,527,216
Adjustments to reconcile net income to net cash provided by operating activities
Depreciation		681,235			722,220
Changes in operating assets and liabilities
Accounts receivable		(495,876	)		(299,011	)
Prepaid expenses and other current assets		(27,047	)		(16,382	)
Accounts payable		36,115			(70,323	)
Accrued expenses		29,016			(31,526	)
Net cash provided by operating activities		2,487,624			3,832,194
Cash flows from investing activities
Cash paid for property and equipment		(1,610,521	)		(639,793	)
Proceeds received from disposal of property and equipment		(50,016	)		29,231
Net cash used in investing activities		(1,660,537	)		(610,562	)
Cash flows from financing activities
Payments on notes payable long-term debt		46,042			(46,042	)
Distributions paid		(370,591	)		(2,250,480	)
Net cash used in financing activities		(324,549	)		(2,296,522	)
Increase in cash		502,538			925,110
Cash at beginning of period		168,234			670,772
Cash at end of period	$	670,772		$	1,595,882

See notes to financial statements.

F-151

TRAIL BLAZER HOT SHOT, INC.

NOTES TO FINANCIAL STATEMENTS

DECEMBER 31, 2004 AND 2005

1. Significant Accounting Policies

Nature of Business: Trail Blazer Hot Shot, Inc. (the “Company”) is engaged in the rental of forklifts, manlifts, backhoes, generators, trucks and other related equipment to oil and gas companies, operators and service companies. The Company’s equipment and housing is manufactured for the tough environments of the drilling industry. The Company’s primary market area is Oklahoma, and the Company operates from Elk City, Oklahoma.

The Company was incorporated in Oklahoma in 1982. There are 3,000 shares of $10 par value common stock authorized. The Company elected S corporation status on December 31, 1982. The Company is 100% owned by one individual.

Cash and Cash Equivalents: For purposes of the statements of cash flows, cash equivalents include time deposits, certificates of deposit and all highly liquid debt instruments with original maturities of three months or less.

Accounts Receivable: The Company extends credit to its customers based on an evaluation of the customer’s financial condition and generally collateral is not required. Outstanding accounts receivable are assessed routinely and an allowance is set up when accounts are deemed uncollectible. The allowance for doubtful accounts was zero as of December 31, 2004 and 2005.

Property and Equipment: Property and equipment are stated at cost. Depreciation is provided on the straight-line method over the estimated useful lives of the related assets. All expenditures for major renewals and betterments are capitalized. Expenditures for maintenance and repairs are charged to expense as incurred.

Impairment of Long-lived Assets: The Company evaluates an asset for impairment when events or circumstances indicate that a long-lived asset’s carrying value may not be recovered. These events include market declines, changes in the manner in which the Company intends to use an asset, decisions to sell an asset and adverse changes in the legal or business environment.

If events or circumstances indicate that a long-lived asset’s carrying value may not be recoverable, the Company estimates the future undiscounted cash flows from the asset for which the lowest level of separate cash flows can be measured, to determine if the asset is impaired. If the total undiscounted future cash flows are less than the carrying amount for the asset, the Company estimates the fair value of the asset either through reference to sales data for similar assets, or by using a discounted cash flow approach. The asset’s carrying value is then adjusted downward to the fair value. These cash flow estimates require the Company to make estimates and assumptions for many years into the future for pricing demand, competition, operating costs, legal, regulatory and other factors and these estimates or assumptions could change significantly either positively or negatively.

Federal Income Taxes: The Company, with the consent of its stockholder, has elected under the Internal Revenue Code to be taxed as an S corporation. The stockholder’s of an S corporation are taxed on their proportionate share of the Company’s taxable income. Therefore, no provision or liability for federal income taxes has been included in the financial statements. Certain specific deductions and credits flow through the Company to its stockholder.

Revenue Recognition: Revenue from rental agreements are recognized over the rental period.

Advertising: The Company’s policy is to expense advertising costs as incurred. Advertising costs amounted to approximately $10,000 for each of the years ended December 31, 2004 and 2005, respectively.

F-152

TRAIL BLAZER HOT SHOT, INC.

NOTES TO FINANCIAL STATEMENTS—(Continued)

DECEMBER 31, 2004 AND 2005

Concentration of Risk: During 2004 and 2005, the Company had cash deposited in a bank which was in excess of federally insured limits. The Company monitors the financial condition of the bank and has experienced no losses associated with its account.

The Company’s customer base consists primarily of independent oil and natural gas producers. The Company performs ongoing evaluations of its customers but generally does not require collateral on its trade receivables. Sales to Apache Corporation, Cimarex Energy Co., and H & P Drilling account for 17%, 20% and 11%, respectively, during 2004 and 17%, 17% and 12%, respectively, during 2005. Accounts receivable due from these customers were approximately $99,400, $156,000 and $86,000 as of December 31, 2004 and $195,900, $133,100 and $114,300 as of December 31, 2005.

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

Reclassifications: Certain reclassifications have been made to the prior years’ financial statements to conform to the current year presentation. These reclassifications had no effect on previously reported results of operations or retained earnings.

2. Property and Equipment

Major classifications of property and equipment and their estimated depreciable lives as of December 31, 2004 and 2005, are as follows:

	Estimated Life	December 31,
		2004			2005
Rental equipment and vehicles	5-7 years	$	5,350,237		$	5,817,493
Trash trailers	5-7 years		281,087			283,587
Polypipe	5 years		83,776			190,628
Pumps	5-7 years		85,782			119,736
Tanks	5 years		3,180			3,180
			5,804,062			6,414,624
Less: accumulated depreciation			(2,475,996	)		(3,198,216	)
		$	3,328,066		$	3,216,408

3. Notes Payable and Long-Term Debt

As of December 31, 2004, the Company had two notes payable to financing companies which are payable in monthly installments of $4,228 and $352, respectively, bearing interest at 5.39%. The notes matured in September 2005 and August 2006. Both notes are secured by equipment. These notes were paid in full during 2005.

F-153

TRAIL BLAZER HOT SHOT, INC.

NOTES TO FINANCIAL STATEMENTS—(Continued)

DECEMBER 31, 2004 AND 2005

4. Lease Commitments

The Company leases office space from an unrelated party under a one year lease dated April 20, 2005. Rent expense under this operating lease was approximately $0 and $4,500 for the year ended December 31, 2004 and 2005, respectively. As of December 31, 2005, future lease expense is $2,220 due in April 2006.

The Company also rents equipment under informal rental agreements. Equipment rental expense was approximately $18,153 and $31,685 for the years ended December 31, 2004 and 2005, respectively.

5. Subsequent Event

In January 2006, certain assets of the Company were purchased by Stallion Oilfield Services Ltd., headquartered in Houston, Texas.

F-154

SUPPLEMENTAL SCHEDULE

F-155

TRAIL BLAZER HOT SHOT, INC.

SCHEDULE OF OPERATING EXPENSES

	Year Ended December 31,
	2004		2005
Cost of services
Salaries and wages	$	917,541	$	987,544
Outside services		307,083		732,164
Repairs and maintenance		509,614		703,077
Taxes		222,902		293,479
Fuel		168,195		217,008
Insurance		151,604		200,930
Auto		111,113		110,118
Disposal		55,500		57,528
Other		80,724		67,965
Total cost of services	$	2,524,276	$	3,369,813
Selling, general and administrative
Salaries and wages	$	328,700	$	364,000
Office expenses		19,461		23,296
Taxes		10,539		18,844
Travel and entertainment		26,893		17,481
Professional fees		6,036		12,348
Advertising		9,577		10,389
Employee contribution cost		5,922		—
Other		36,797		56,455
Total selling, general and administrative	$	443,925	$	502,813

F-156

INDEPENDENT AUDITORS’ REPORT

To the Stockholders

GL Trucking and Rental, Inc.

Williston, ND

We have audited the accompanying balance sheets of GL Trucking and Rental, Inc. as of December 31, 2004 and September 12, 2005, and related statements of operations, stockholders’ equity and cash flows for the year ended December 31, 2004 and the period January 1, 2005 through September 12, 2005. 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 auditing standards generally accepted in the United States of America. Those standards require that we plan and perform the audits 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 financial statements referred to above present fairly, in all material respects, the financial position of GL Trucking and Rental, Inc. as of December 31, 2004 and September 12, 2005, and the results of its operations and its cash flows for the year ended December 31, 2004 and the period January 1, 2005 through September 12, 2005, in conformity with accounting principles generally accepted in the United States of America.

Our audits were conducted for the purpose of forming an opinion on the basic financial statements taken as a whole. The supplemental schedule on page F-167 is presented for purposes of additional analysis and is not required as part of the basic financial statements. Such information has been subjected to the auditing procedures applied in the audits of the basic financial statements, and, in our opinion, is fairly stated in all material respects in relation to the basic financial statements taken as a whole.

/S/    UHY MANN FRANKFORT STEIN & LIPP CPAS, LLP      

UHY Mann Frankfort Stein & Lipp CPAs, LLP

Houston, Texas

April 20, 2006

F-157

GL TRUCKING AND RENTAL, INC.

BALANCE SHEETS

	December 31, 2004		September 12, 2005
Assets
Current assets
Cash and cash equivalents	$	209,866	$	1,836,201
Accounts receivable—trade, less allowance for doubtful accounts of $77,032 and $78,063, respectively		1,607,147		2,454,615
Prepaid expenses and other current assets		134,075		30,857
Available-for-sale securities		36,843		33,342
Federal income tax receivable		21,743		—
Total current assets		2,009,674		4,355,015
Property and equipment, net		3,158,761		4,264,223
Other receivable		31,045		31,045
Total assets	$	5,199,480	$	8,650,283
Liabilities and stockholders’ equity
Current liabilities
Accounts payable—trade	$	94,377	$	285,186
Accrued expenses		105,539		63,106
Profit sharing plan payable		400,000		—
Current portion of long-term debt		139,719		186,900
Deferred tax liability		—		27,946
Federal income tax payable		—		869,162
State income tax payable		—		216,378
Other current liabilities		—		34,707
Total current liabilities		739,635		1,683,385
Long-term debt, less current portion		136,068		483,128
Deferred tax liability		573,975		580,818
Total liabilities		1,449,678		2,747,331
Commitments and contingencies		—		—
Stockholders’ equity		3,749,802		5,902,952
Total liabilities and stockholders’ equity	$	5,199,480	$	8,650,283

See notes to financial statements.

F-158

GL TRUCKING AND RENTAL, INC.

STATEMENTS OF OPERATIONS

	Year Ended December 31, 2004			January 1, 2005 through September 12, 2005
Service revenue	$	7,626,606		$	7,811,003
Operating expenses
Cost of services		3,394,046			2,500,808
Selling, general and administrative		1,668,685			1,121,745
Depreciation and amortization		727,926			741,533
Total operating expenses		5,790,657			4,364,086
Operating income		1,835,949			3,446,917
Other income (expense)
Interest income		1,530			—
Other income		20,364			104,989
Interest expense		(15,699	)		(28,243	)
Total other income		6,195			76,746
Income before income taxes		1,842,144			3,523,663
Provision for income taxes
Federal
Current		342,874			1,091,961
Deferred		244,286			34,789
State income tax		75,887			240,262
Total provision for income taxes		663,047			1,367,012
Net income	$	1,179,097		$	2,156,651

See notes to financial statements.

F-159

GL TRUCKING AND RENTAL, INC.

STATEMENTS OF CHANGES IN STOCKHOLDERS’ EQUITY

	Common Stock		Retained Earnings			Accumulated Other Comprehensive Loss			Total
Balances, January 1, 2004	$	21,000	$	2,592,805		$	(19,206	)	$	2,594,599
Dividends		—		(21,000	)		—			(21,000	)
Unrealized loss on investments		—		—			(2,894	)		(2,894	)
Net income		—		1,179,097			—			1,179,097
Total comprehensive income										1,176,203
Balances, December 31, 2004		21,000		3,750,902			(22,100	)		3,749,802
Unrealized loss on investments		—					(3,501	)		(3,501	)
Net income		—		2,156,651			—			2,156,651
Total comprehensive income										2,153,150
Balances, September 12, 2005	$	21,000	$	5,907,553		$	(25,601	)	$	5,902,952

See notes to financial statements.

F-160

GL TRUCKING AND RENTAL, INC.

STATEMENTS OF CASH FLOWS

	Year Ended December 31, 2004			January 1, 2005 through September 12, 2005
Cash flows from operating activities
Net income	$	1,179,097		$	2,156,651
Adjustments to reconcile net income to net cash provided by operating activities
Depreciation and amortization		727,926			741,533
Bad debt expense		8,512			—
Deferred tax expense		244,286			34,789
Gain on sale of assets		(13,760	)		—
Changes in operating assets and liabilities
Accounts receivable—trade		(477,079	)		(847,468	)
Prepaid expenses and other current assets		(11,970	)		103,218
Other receivable		(4,179	)		—
Accounts payable—trade		78,423			190,809
Accrued expenses		(54,811	)		(42,433	)
Profit sharing plan payable		71,846			(400,000	)
Income taxes payable and other current liabilities		(91,409	)		1,141,990
Net cash provided by operating activities		1,656,882			3,079,089
Cash flows from investing activities
Cash paid for property and equipment		(1,731,470	)		(1,046,995	)
Proceeds received from disposal of property and equipment		20,000			—
Proceeds received from sale of investments		1,057			—
Net cash used in investing activities		(1,710,413	)		(1,046,995	)
Cash flows from financing activities
Repayment of long-term debt		(124,213	)		(405,759	)
Dividends paid		(21,000	)		—
Net cash used in financing activities		(145,213	)		(405,759	)
Net increase (decrease) in cash and cash equivalents		(198,744	)		1,626,335
Cash and cash equivalents at beginning of period		408,610			209,866
Cash and cash equivalents at end of period	$	209,866		$	1,836,201
Supplemental cash flow information
Interest paid	$	15,442		$	12,570
Non-cash financing and investing activities
Property and equipment financed with notes payable	$	200,000		$	800,000

See notes to financial statements.

F-161

GL TRUCKING AND RENTAL, INC.

NOTES TO FINANCIAL STATEMENTS

YEAR ENDED DECEMBER 31, 2004 AND JANUARY 1, 2005 THROUGH SEPTEMBER 12, 2005

1. Significant Accounting Policies

Nature of Business: GL Trucking and Rental, Inc. (the “Company”) is engaged in the rental of cranes, trailers, skid houses, and other related equipment to oil and gas companies, operators, and service companies. The Company’s equipment and housing is manufactured for the tough environments of the drilling industry. The Company’s primary market area is North Dakota, and the Company operates from locations in Williston and Fairfield, ND.

The Company was incorporated in North Dakota in 1979. There are 3,000 shares of $10 par value common stock authorized. As of December 31, 2004 and September 12, 2005, there were 2,100 shares issued and outstanding.

Cash and Cash Equivalents: For purposes of the statements of cash flows, cash equivalents include time deposits, certificates of deposit and all highly liquid debt instruments with original maturities of three months or less.

Accounts Receivable: The Company extends credit to its customers based on an evaluation of the customer’s financial condition and generally collateral is not required. Outstanding accounts receivable are assessed routinely and an allowance is set up when accounts are deemed uncollectible.

Investments: The Company determines the appropriate classification of its investments in debt and equity securities at the time of purchase and reevaluates such determinations at each balance sheet date. Debt securities are classified as held-to-maturity when the Company has the positive intent and ability to hold the securities to maturity. Debt securities for which the Company does not have the intent or ability to hold to maturity are classified as available-for-sale. Held-to-maturity securities are recorded as either short term or long term on the balance sheet based on contractual maturity date and are stated at amortized cost. Marketable securities that are bought and held principally for the purpose of selling them in the near term are classified as trading securities and are reported at fair value, with unrealized gains and losses recognized in earnings. Debt and marketable equity securities not classified as held-to-maturity or as trading, are classified as available-for-sale, and are carried at fair market value, with the unrealized gains and losses, net of tax, included in the determination of comprehensive income and reported in stockholders’ equity.

Property and Equipment: Property and equipment are stated at cost. Depreciation is provided on the straight line method over the estimated useful lives of the related assets. All expenditures for major renewals and betterments are capitalized. Expenditures for maintenance and repairs are charged to expense as incurred.

Impairment of Long-lived Assets: The Company evaluates an asset for impairment when events or circumstances indicate that a long-lived asset’s carrying value may not be recovered. These events include market declines, changes in the manner in which the Company intends to use an asset, decisions to sell an asset and adverse changes in the legal or business environment.

If events or circumstances indicate that a long-lived asset’s carrying value may not be recoverable, the Company estimates the future undiscounted cash flows from the asset for which the lowest level of separate cash flows can be measured, to determine if the asset is impaired. If the total undiscounted future cash flows are less than the carrying amount for the asset, the Company estimates the fair value of the asset either through reference to sales data for similar assets, or by using a discounted cash flow approach. The asset’s carrying value is then adjusted downward to the fair value. These cash flow estimates require the Company to make estimates and

F-162

GL TRUCKING AND RENTAL, INC.

NOTES TO FINANCIAL STATEMENTS—(Continued)

YEAR ENDED DECEMBER 31, 2004 AND JANUARY 1, 2005 THROUGH SEPTEMBER 12, 2005

assumptions for many years into the future for pricing, demand, competition, operating costs, legal, regulatory and other factors, and these estimates or assumptions could change significantly either positively or negatively.

Federal Income Taxes: The Company accounts for income taxes under FASB Statement No. 109, “Accounting for Income Taxes.” Deferred income tax assets and liabilities are determined based upon differences between financial reporting and tax bases of assets, and liabilities and are measured using the enacted tax rates and laws that will be in effect when the differences are expected to reverse. Deferred taxes result primarily from property and equipment.

Revenue Recognition: Revenue from rental agreements is recognized over the rental period.

Advertising: The Company’s policy is to expense advertising costs as incurred. Advertising costs amounted to approximately $12,000 in 2004 and $33,000 in 2005.

Concentration of Risk: During 2004 and 2005, the Company had cash deposited in a bank which was in excess of federally insured limits. The Company monitors the financial condition of the bank and has experienced no losses associated with its account.

The Company’s customer base consists primarily of independent oil and natural gas producers. The Company performs ongoing evaluations of its customers, but generally does not require collateral on its trade receivables. During the year ended December 31, 2004, sales to one customer accounted for 12% of total sales and the balance due from this customer was $202,000 as of December 31, 2004. During the period ended September 12, 2005, no customer comprised 10% of total sales.

During the year ended December 31, 2004, the Company purchased a significant amount of goods and services from one vendor. Amounts payable to this vendor as of December 31, 2004 were approximately $56,000. During the period ended September 12, 2005, the Company purchased a significant amount of goods from two vendors which totaled 23% and 12%, respectively, of cost of revenue. Amounts payable to these vendors as of September 12, 2005 totaled approximately $94,000.

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

Reclassifications: Certain reclassifications have been made to the prior years’ financial statements to conform to the current year presentation. These reclassifications had no effect on previously reported results of operations or retained earnings.

F-163

GL TRUCKING AND RENTAL, INC.

NOTES TO FINANCIAL STATEMENTS—(Continued)

YEAR ENDED DECEMBER 31, 2004 AND JANUARY 1, 2005 THROUGH SEPTEMBER 12, 2005

2. Property and Equipment

Major classifications of property and equipment and estimated depreciable lives are as follows:

	Estimated Life	December 31, 2004		September 12, 2005
Tanks and skid houses	5-7 years	$	3,485,649	$	5,211,043
Autos and trucks	5 years		2,853,697		2,902,142
Trailers	5 years		695,069		752,548
Other rental equipment	5-7 years		479,315		491,795
Office Equipment	5-7 years		285,309		207,529
Buildings	39 years		251,890		332,867
			8,050,929		9,897,924
Less: accumulated depreciation			4,892,168		5,633,701
		$	3,158,761	$	4,264,223

3. Available for Sale Securities

Available for sale securities as of December 31, 2004 and September 12, 2005 included equity securities at an estimated fair value of $36,843 and $33,342, respectively, resulting in an overall unrealized loss of $22,100 and $25,601, respectively.

4. Notes Payable and Long-term Debt

As of December 31, 2004, the Company had a note payable to a bank for $102,503 dated December 19, 2003, payable in monthly installments of $8,776 bearing interest at 5.0%. The note was secured by equipment and paid off on May 17, 2005.

As of December 31, 2004, the Company had a note payable to a bank for $173,284 dated March 31, 2004, payable in monthly installments of $3,818 bearing interest at 5.5%. The note was secured by equipment and paid off on July 19, 2005.

In April 2005, the Company entered into a multiple advance agreement with a bank to purchase skid houses. The Company received advances of $400,000 in April 2005 and $400,000 in May 2005. Principal payments are due in installments of $15,575 plus interest at a variable rate. The interest rate is 6.25% through August 1, 2005, then variable at 0.5% above the Bank of North Dakota base rate. The loan matures in April 2010 and is secured by skid houses. As of September 12, 2005, the balance on the note was $670,028, which was paid in full on September 13, 2005 with proceeds from sale of certain assets (See Note 6).

Future maturities of the note payable is as follows:

Year Ending September 12,
2006	$	186,900
2007		186,900
2008		186,900
2009		109,328
	$	670,028

F-164

GL TRUCKING AND RENTAL, INC.

NOTES TO FINANCIAL STATEMENTS—(Continued)

YEAR ENDED DECEMBER 31, 2004 AND JANUARY 1, 2005 THROUGH SEPTEMBER 12, 2005

5. Lease Commitments

The Company leases office space from a related party under a month-to-month lease. Rent expense under this operating lease and was approximately $70,000 for the year ended December 31, 2004 and $53,000 for the period ended September 12, 2005.

6. Subsequent Event

On September 13, 2005, certain assets of the Company were purchased by Stallion Oilfield Services Ltd., headquartered in Houston, Texas.

F-165

SUPPLEMENTAL SCHEDULE

F-166

GL TRUCKING AND RENTAL, INC.

SCHEDULE OF OPERATING EXPENSES

	Year Ended December 31, 2004		January 1, 2005 through September 12, 2005
Cost of services
Salaries and wages	$	1,337,041	$	937,754
Truck expenses		491,630		451,833
Skid house expenses		288,705		238,890
Profit sharing expense		244,000		—
Payroll taxes		102,694		79,865
Trailer expenses		89,510		70,386
Travel and entertainment		54,130		31,896
Other		786,336		690,184
Total cost of services	$	3,394,046	$	2,500,808
Selling, general and administrative
Salaries	$	854,829	$	599,548
Insurance		226,472		178,805
Profit sharing expense		156,000		—
Rent—office space		70,300		52,625
Payroll taxes		65,656		51,062
Vehicle		51,178		167,464
Telecommunications		32,290		25,128
Office expenses		19,409		15,548
Other		192,551		31,565
Total selling, general and administrative	$	1,668,685	$	1,121,745

See independent auditors’ report.

F-167

INDEPENDENT AUDITORS’ REPORT

To the Stockholder

Separation Services, Inc.

Houston, Texas

We have audited the accompanying balance sheet of Separation Services, Inc. (the “Company”) as of December 31, 2004 and related statements of operations, stockholder’s equity and cash flows for the year then ended. 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 audit.

We conducted our audit in accordance with auditing standards generally accepted in the United States of America. 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 audit provides a reasonable basis for our opinion.

In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of Separation Services, Inc. as of December 31, 2004 and the results of its operations and its cash flows for the year then ended, in conformity with accounting principles generally accepted in the United States of America.

Our audit was conducted for the purpose of forming an opinion on the basic financial statements taken as a whole. The supplemental schedule on page F-177 is presented for purposes of additional analysis and is not required as part of the basic financial statements. Such information has been subjected to the auditing procedures applied in the audits of the basic financial statements and, in our opinion, is fairly stated in all material respects in relation to the basic financial statements taken as a whole.

/S/    UHY MANN FRANKFORT STEIN & LIPP CPAS, LLP       

UHY Mann Frankfort Stein & Lipp CPAs, LLP

Houston, Texas

December 20, 2005

F-168

SEPARATION SERVICES, INC.

BALANCE SHEET

DECEMBER 31, 2004

Assets
Current assets
Cash and cash equivalents	$	915,000
Accounts receivable—trade, less allowance for doubtful accounts of $102,008		2,411,767
Accounts receivable—affiliate and other		3,752
Prepaid expenses and other current assets		40,215
Total current assets		3,370,734
Property and equipment, net		1,093,799
Total assets	$	4,464,533
Liabilities and stockholder’s equity
Current liabilities
Accounts payable—trade	$	642,320
Sales tax refunds payable		149,828
Sales tax payable		52,988
State income tax payable		75,411
Federal income tax payable		234,498
Current maturities of long-term debt		6,521
Total current liabilities		1,161,566
Long-term debt, less current portion		23,944
Deferred tax liability		220,581
Total liabilities		1,406,091
Commitments and contingencies		—
Stockholder’s equity		3,058,442
Total liabilities and stockholder’s equity	$	4,464,533

See notes to financial statements.

F-169

SEPARATION SERVICES, INC.

STATEMENT OF OPERATIONS

YEAR ENDED DECEMBER 31, 2004

Service revenue	$	9,494,511
Operating expenses
Cost of services		5,017,254
Selling, general and administrative		1,818,251
Depreciation and amortization		431,520
Total operating expenses		7,267,025
Income from operations		2,227,486
Other expense income (expense)
Interest income		1,632
Interest expense		(2,949	)
Total other expense		(1,317	)
Income before provision for income taxes		2,226,169
Provision for income taxes
Federal—current		666,998
Federal—deferred		54,612
State		78,240
		799,850
Net income	$	1,426,319

See notes to financial statements.

F-170

SEPARATION SERVICES, INC.

STATEMENT OF CHANGES IN STOCKHOLDER’S EQUITY

YEAR ENDED DECEMBER 31, 2004

	Common Stock		Retained Earnings			Total
Balances, December 31, 2003	$	1,000	$	1,784,089		$	1,785,089
Dividends in lieu of loan repayment		—		(152,966	)		(152,966	)
Net income		—		1,426,319			1,426,319
Balances, December 31, 2004	$	1,000	$	3,057,442		$	3,058,442

See notes to financial statements.

F-171

SEPARATION SERVICES, INC.

STATEMENT OF CASH FLOWS

YEAR ENDED DECEMBER 31, 2004

Cash flows from operating activities
Net income	$	1,426,319
Adjustments to reconcile net income to net cash provided by operating activities
Depreciation		431,520
Bad debt expense		55,401
Deferred tax expense		54,612
Changes in operating assets and liabilities
Accounts receivable		(1,629,990	)
Loan from stockholder		(122,033	)
Prepaid expenses and other current assets		241
Accounts payable		353,193
Taxes payable		370,774
Net cash provided by operating activities		940,037
Cash flows from investing activities
Cash paid for property and equipment		(385,665	)
Net cash used in investing activities		(385,665	)
Cash flows from financing activities
Payments on long-term debt		(50,465	)
Net cash used in financing activities		(50,465	)
Increase in cash		503,907
Cash at beginning of period		411,093
Cash at end of period	$	915,000
Supplemental cash flow information
Cash paid for
Interest	$	1,973
Taxes		432,500
	$	434,473
Non-cash financing and investing activities
Property and equipment purchased financed with notes payable	$	35,000
Dividend issued to stockholder in lieu of loan repayment	$	152,966

See notes to financial statements.

F-172

SEPARATION SERVICES, INC.

NOTES TO FINANCIAL STATEMENTS

DECEMBER 31, 2004

1. Significant Accounting Policies

Nature of Business: Separation Services, Inc. (the “Company”) is engaged in the rental of equipment to oil and gas companies and operators at drilling locations in order to separate the waste disposal from the well into solid and liquid forms. The process separates the solid waste from the liquid material into a dry solid form so that liquids can be recycled back into the well. This allows the customers to reduce the amount of waste produced in the drilling operations. The Company contracts with a third party for labor for operations at the wellsite, as well as various third parties for trucking services to haul equipment and waste. The Company’s primary market area is the Gulf Coast region of Texas. The Company operates from Houston, Texas.

The Company was incorporated in Texas on May 1, 1999, and is authorized to issue 100,000 shares of Class A common stock (par value $0.01) and 100,000 shares of Class B common stock (par value $0.01). As of December 31, 2004, there are 100,000 shares issued and outstanding.

Cash and Cash Equivalents: For purposes of the statement of cash flows, cash equivalents include time deposits, certificates of deposit and all highly liquid debt instruments with original maturities of three months or less.

Accounts Receivable: The Company extends credit to its customers based on informal discussions with the management of potential customers. Outstanding accounts receivable are assessed routinely and an allowance is set up when accounts are deemed uncollectible.

Property and Equipment: Property and equipment are stated at cost. Depreciation is provided on the straight line method over the estimated useful lives of the related assets. All expenditures for major renewals and betterments are capitalized. Expenditures for maintenance and repairs are charged to expense as incurred.

Impairment of Long-lived Assets: The Company evaluates an asset for impairment when events or circumstances indicate that a long-lived asset’s carrying value may not be recovered. These events include market declines, changes in the manner in which the Company intends to use an asset, decisions to sell an asset and adverse changes in the legal or business environment.

If events or circumstances indicate that a long-lived asset’s carrying value may not be recoverable, the Company estimates the future undiscounted cash flows from the asset for which the lowest level of separate cash flows can be measured, to determine if the asset is impaired. If the total undiscounted future cash flows are less than the carrying amount for the asset, the Company estimates the fair value of the asset either through reference to sales data for similar assets, or by using a discounted cash flow approach. The asset’s carrying value is then adjusted downward to the fair value. These cash flow estimates require the Company to make estimates and assumptions for many years into the future for pricing demand, competition, operating costs, legal, regulatory and other factors and these estimates or assumptions could change significantly either positively or negatively.

Federal Income Taxes: The Company accounts for income taxes under FASB Statement No. 109, “Accounting for Income Taxes.” Deferred income tax assets and liabilities are determined based upon differences between financial reporting and tax basis of assets and liabilities and are measured using the enacted tax rates and laws that will be in effect when the differences are expected to reverse. Deferred taxes result primarily from property and equipment.

F-173

SEPARATION SERVICES, INC.

NOTES TO FINANCIAL STATEMENTS—(Continued)

DECEMBER 31, 2004

Revenue Recognition: Revenue from rental agreements are recognized over the rental period and revenue from service agreements are recognized when services have been rendered.

Advertising: The Company’s policy is to expense advertising costs as incurred. Advertising costs amounted to approximately $14,000 for the year ended December 31, 2004.

Concentration of Risk: During 2004, the Company had cash deposited in a bank which was in excess of federally insured limits. The Company monitors the financial condition of the bank and has experienced no losses associated with its account.

The Company’s customer base consists primarily of independent oil and natural gas producers. The Company performs ongoing evaluations of its customers but generally does not require collateral on its trade receivables. During the year ended December 31, 2004, sales to two customers accounted for approximately 18% and 11% of total sales, respectively, and approximately $370,000 and $0 are due from customers as of December 31, 2004, respectively.

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

Reclassifications: Certain reclassifications have been made to the prior years’ financial statements to conform to the current year presentation. These reclassifications had no effect on previously reported results of operations or retained earnings.

2. Property and Equipment

Major classifications of property and equipment and estimated depreciable lives as of December 31, 2004 are as follows:

	Estimated Life
Rental Equipment	5-10 years	$	2,556,806
Vehicles	3-5 years		170,954
Office Equipment	3-5 years		82,259
Leasehold Improvements	Various		29,244
			2,839,263
Less: accumulated depreciation			(1,745,464	)
		$	1,093,799

3. Notes Payable and Long-term Debt

As of December 31, 2004, the Company has a term note payable to a bank for $30,465. The note is dated June 24, 2004 and is payable in monthly installments of $653 including interest at 4.59%, through September 15, 2004. The monthly payments increased to $1,000 including interest effective September 15, 2004. The note matures in June 2009 and is secured by an automobile.

F-174

SEPARATION SERVICES, INC.

NOTES TO FINANCIAL STATEMENTS—(Continued)

DECEMBER 31, 2004

Future maturities of long-term debt are as follows:

Year Ending December 31,
2005	$	6,521
2006		6,827
2007		7,147
2008		7,482
2009		2,488
	$	30,465

4. Lease Commitments

The Company leases office space from a related party with no formal rental agreement in place as of December 31, 2004. Rent expense incurred for this office space was approximately $79,000 for the year ended December 31, 2004.

The Company also leases equipment on a day-to-day basis from several vendors. The rental expense incurred for this amounted to approximately $446,000 for the year ended December 31, 2004 and is included in cost of revenue in the statement of income. Amounts re-billed to the customer are included in revenue. There are no formal rental agreements in place for rental of equipment.

The minimum future lease payments required under current non-cancelable operating lease agreements as of December 31, 2004, including operating leases executed subsequent to December 31, 2004, as described in Note 6, having remaining terms in excess of one year as of December 31, 2004 for each of the next five years and in the aggregate, are as follows:

Year Ending December 31,
2005	$	90,000
2006		90,000
2007		90,000
	$	270,000

5. Related Party Transactions

During the year ended December 31, 2004, the Company rented equipment from an entity owned by a member of the Company’s management. Total rentals from this company totaled approximately $51,000 and are included in cost of sales in the Statement of Income. The Company had related accounts payable of $1,200 as of December 31, 2004. See additional related party disclosures in Note 6—Subsequent Events.

6. Subsequent Events

In January, 2005, the Company entered into a lease agreement with a related party for the office space located in Houston, Texas. The lease agreement specifies $90,000 in annual rent expiring in December 2007.

In January 2005, the Company’s owner formed a company to provide consulting services to the Company at a monthly rate of $13,000 plus $1,000 for expenses. The consulting agreement was terminated in December 2005, and the Company paid an additional $224,000 to terminate the contract.

On January 31, 2005, the Company was purchased by Stallion Oilfield Services Ltd., headquartered in Houston, Texas.

F-175

SUPPLEMENTAL SCHEDULE

F-176

SEPARATION SERVICES, INC.

SCHEDULE OF OPERATING EXPENSES

YEAR ENDED DECEMBER 31, 2004

Cost of services
Trash and sewer disposal	$	1,642,927
Wages		1,311,695
Supplies expense		701,402
Leased equipment costs		446,215
Transportation cost		195,587
Repairs & maintenance		186,766
Payroll taxes		150,003
Insurance		29,670
Other		352,989
Total cost of services	$	5,017,254
Selling, general and administrative
Salaries		905,887
Insurance		147,510
Travel and entertainment		139,974
Telecommunications		104,805
Rent—office space		79,275
Property and other taxes		75,435
Bad debts		55,401
Office expenses		39,711
Vehicle		38,958
Legal and professional		20,673
Payroll taxes		20,659
Other		189,963
Total selling, general and administrative	$	1,818,251

See independent auditors’ report.

F-177

INDEPENDENT AUDITORS’ REPORT

To the Partners

Stallion Rentals, L.P.

Liberty, Texas

We have audited the accompanying balance sheet of Stallion Rentals (the “Partnership”), L.P. dba Trinity Valley Rentals, as of December 31, 2004, and related combined statements of operations, changes in partners’ deficit and cash flows for the six month periods ended June 30, 2004 and December 31, 2004 of Trinity Valley Rentals, Inc. and Stallion Rentals, L.P., respectively. These financial statements are the responsibility of the Partnership’s management. Our responsibility is to express an opinion on these financial statements based on our audit.

We conducted our audit in accordance with auditing standards generally accepted in the United States of America. 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 audit provides a reasonable basis for our opinion.

In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of Stallion Rentals, L.P. dba Trinity Valley Rentals, as of December 31, 2004, and the combined results of their operations and their cash flows for the six months periods ended June 30, 2004 and December 31, 2004 of Trinity Valley Rentals, Inc. and Stallion Rentals, L.P., respectively, in conformity with accounting principles generally accepted in the United States of America.

Our audit was conducted for the purpose of forming an opinion on the basic financial statements taken as a whole. The supplemental schedule on page F-189 is presented for the purposes of additional analysis and is not required as part of the basic financial statements. Such information has been subjected to the auditing procedures applied in the audit of the basic financial statements and, in our opinion, is fairly stated in all material respects in relation to the basic financial statements taken as a whole.

/S/    UHY MANN FRANKFORT STEIN & LIPP CPAS, LLP      

UHY Mann Frankfort Stein & Lipp CPAs, LLP

Houston, Texas

January 19, 2006

F-178

TRINITY VALLEY RENTALS

BALANCE SHEET

DECEMBER 31, 2004

Assets
Current assets
Cash and cash equivalents	$	67,401
Accounts receivable—less allowance for doubtful accounts of $95,086		957,934
Prepaid expense and other current assets		72,240
Total current assets		1,097,575
Property and equipment, net		1,958,701
Total assets	$	3,056,276
Liabilities and partners’ deficit
Current liabilities
Accounts payable—trade	$	648,676
Accounts payable—related party		23,993
Accrued expenses		63,638
Sales tax payable		75,358
Current portion of long-term debt		819,341
Current portion of notes payable—related party		190,160
Current portion of capital lease obligations		30,112
Total current liabilities		1,851,278
Long-term debt, less current portion		1,252,440
Notes payable—related party, less current portion		231,407
Long-term capital lease obligations, less current portion		37,931
Total liabilities		3,373,056
Commitments and contingencies		—
Partners’ deficit		(316,780	)
Total liabilities and partners’ deficit	$	3,056,276

See notes to combined financial statements.

F-179

TRINITY VALLEY RENTALS

COMBINED STATEMENT OF OPERATIONS

YEAR ENDED DECEMBER 31, 2004

Service revenue	$	3,893,380
Operating expenses
Cost of services		2,286,188
Selling, general and administrative		1,366,968
Depreciation and amortization		584,262
Total operating expenses		4,237,418
Operating loss		(344,038	)
Interest expense		(94,598	)
Net loss	$	(438,636	)

See notes to combined financial statements.

F-180

TRINITY VALLEY RENTALS

COMBINED STATEMENT OF CHANGES IN PARTNERS’ DEFICIT

YEAR ENDED DECEMBER 31, 2004

Balance as of December 31, 2003	$	(278,144	)
Contributions		400,000
Net loss		(438,636	)
Balance as of December 31, 2004	$	(316,780	)

See notes to combined financial statements.

F-181

TRINITY VALLEY RENTALS

COMBINED STATEMENT OF CASH FLOWS

YEAR ENDED DECEMBER 31, 2004

Cash flows from operating activities
Net loss	$	(438,636	)
Adjustments to reconcile net income to net cash used in operating activities
Depreciation		584,262
Bad debt expense		81,054
Changes in operating assets and liabilities
Accounts receivable		(316,685	)
Prepaid expenses and other current assets		(41,919	)
Accounts payable		156,512
Accounts payable—related party		23,993
Accrued expenses		8,738
Sales tax payable		18,336
Net cash provided by operating activities		75,655
Cash flows from investing activities
Cash paid for property and equipment		(150,266	)
Proceeds received from disposal of property and equipment		2,500
Net cash used in investing activities		(147,766	)
Cash flows from financing activities
Proceeds from long-term debt		950,751
Payments on long-term debt		(1,360,816	)
Proceeds from line of credit		427,289
Payments on capital leases		(25,356	)
Capital contributions by partners of Stallion Rentals, LP		360,000
Payment of note payable to Trinity Valley Rental stockholders		(213,927	)
Net cash provided by financing activities		137,941
Increase in cash		65,830
Cash at beginning of period		1,571
Cash at end of period	$	67,401
Supplemental cash flow information
Interest paid	$	94,598
Non-cash transactions
Property and equipment financed with long-term debt	$	239,577
Property and equipment financed with proceeds from line of credit	$	787,711
Property and Equipment financed with stockholder note payable	$	192,635
Contribution of stockholder loan receivable	$	40,000

See notes to combined financial statements.

F-182

TRINITY VALLEY RENTALS

NOTES TO COMBINED FINANCIAL STATEMENTS

DECEMBER 31, 2004

1. Significant Accounting Policies

Nature of Business: Stallion Rentals, LP, dba Trinity Valley Rentals (the “Partnership”) is engaged in the rental of forklifts, manlifts, light towers, generators and other surface equipment to the drilling industry. The Partnership’s equipment is manufactured for the tough environments of the drilling industry and provides its customers with living and work spaces. The Partnership’s primary market area is the Gulf Coast region of Texas and it operates from Liberty, TX.

The Partnership is the successor entity of Trinity Valley Rentals, Inc. (the “Predecessor Company”). On July 1, 2004, the Partnership acquired 100% of the stock of the Predecessor Company. For financial reporting purposes, the combined financial statements of the Predecessor Company and the Partnership have been presented at historical cost and do not reflect the effects of any purchase price adjustments as the change in control at July 1, 2004 was a step transaction in connection with the ownership change described in Note 8.

Cash and Cash Equivalents: For purposes of the statement of cash flows, cash equivalents include time deposits, certificates of deposit and all highly liquid debt instruments with original maturities of three months or less.

Accounts Receivable: The Partnership extends credit to its customers based on informal discussions with the management and generally collateral is not required. Outstanding accounts receivable are assessed routinely and an allowance is set up when accounts are deemed uncollectible.

Property and Equipment: Property and equipment are stated at cost. Depreciation is provided on the straight-line method over the estimated useful lives of the related assets. All expenditures for major renewals and betterments are capitalized. Expenditures for maintenance and repairs are charged to expense as incurred.

Impairment of Long-lived Assets: The Partnership evaluates an asset for impairment when events or circumstances indicate that a long-lived asset’s carrying value may not be recovered. These events include market declines, changes in the manner in which the Partnership intends to use an asset, decisions to sell an asset and adverse changes in the legal or business environment.

If events or circumstances indicate that a long-lived asset’s carrying value may not be recoverable, the Partnership estimates the future undiscounted cash flows from the asset for which the lowest level of separate cash flows can be measured, to determine if the asset is impaired. If the total undiscounted future cash flows are less than the carrying amount for the asset, the Partnership estimates the fair value of the asset either through reference to sales data for similar assets, or by using a discounted cash flow approach. The asset’s carrying value is then adjusted downward to the fair value. These cash flow estimates require the Partnership to make estimates and assumptions for many years into the future for pricing demand, competition, operating costs, legal, regulatory and other factors and these estimates or assumptions could change significantly either positively or negatively.

Federal Income Taxes: The Predecessor Company elected S Corporation status on July 1, 2001. Generally, an S Corporation is not subject to tax as its income/loss is reported by the corporation’s shareholders on their individual returns.

Under Internal Revenue Code Section 1374, an S Corporation may be subject to corporate level tax if it has any built-in gain as of the date of the S Corporation election and that gain is realized within a ten year period from the date of the election. The prior owners of the company have represented that no built-in gain exists as of

F-183

TRINITY VALLEY RENTALS

NOTES TO COMBINED FINANCIAL STATEMENTS—(Continued)

DECEMBER 31, 2004

the date of the S corporation election. Accordingly, no provision for potential corporate level built-in gain tax has been provided in relation to the operations of the Predecessor Company.

While the Predecessor Company was an S Corporation, Stallion Rentals, L.P. is treated as a partnership for federal income tax purposes; accordingly, a provision for income taxes has not been recorded in the accompanying financial statements. Partnership income or losses are reflected in the partners’ individual or corporate income tax returns in accordance with their ownership percentages.

Revenue Recognition: Revenue from rental agreements are recognized over the rental period.

Advertising: The Partnership’s policy is to expense advertising costs as incurred. Advertising costs amounted to approximately $16,000 for the year ended December 31, 2004.

Partnership Allocations: The income or loss is allocated to the partners in accordance with the Partnership agreement.

Concentration of Risk: During 2004, the Partnership had cash deposited in a bank which was in excess of federally insured limits. The Partnership monitors the financial condition of the bank and has experienced no losses associated with its account.

The Partnership’s customer base consists primarily of independent oil and natural gas producers. The Partnership performs ongoing evaluations of its customers but generally does not require collateral on its trade receivables. During the year ended December 31, 2004, sales to one customer accounted for approximately 17% of total sales. The balance due from this customer as of December 31, 2004 was approximately $202,000. During the year ended December 31, 2004, the Partnership purchased approximately 10% of all goods and services from one vendor. The balance due to this vendor was approximately $95,000 as of December 31, 2004.

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

Reclassifications: Certain reclassifications have been made to the prior years’ financial statements to conform to the current year presentation. These reclassifications had no effect on previously reported results of operations or partners’ capital.

F-184

TRINITY VALLEY RENTALS

NOTES TO COMBINED FINANCIAL STATEMENTS—(Continued)

DECEMBER 31, 2004

2. Property and Equipment

Major classifications of property and equipment and estimated depreciable lives as of December 31, 2004 are as follows:

	Estimated Life
Rental equipment	5 years	$	2,857,459
Autos and trucks	5 years		705,318
Furniture and fixtures	7 years		31,911
Leasehold improvements	Various		14,925
Software	3 years		1,962
			3,611,575
Less: accumulated depreciation			(1,652,874	)
		$	1,958,701

3. Notes Payable—Related Parties

Notes payable—related party as of December 31, 2004 consists of the following:

Note payable to owners of the Predecessor Company dated June 30, 2004. Interest only payments are due until June, 2005 thereafter, principal monthly payments of $6,254 plus interest at 5%, maturing in January, 2009. The note is secured by the assets of the Partnership	$	268,932
Note payable to partner, dated December 31, 2004, no stated maturity date or interest rate. This note is classified as a current liability.		152,635
		421,567
Less: current maturities		(190,160	)
	$	231,407

F-185

TRINITY VALLEY RENTALS

NOTES TO COMBINED FINANCIAL STATEMENTS—(Continued)

DECEMBER 31, 2004

4. Notes Payable and Long-Term Debt

Notes payable and long-term debt as of December 31, 2004 consists of the following:

Line of credit with maximum borrowing of $1,000,000, dated June 30, 2004. Principal payments of 1/60 of the outstanding balance are payable monthly bearing interest at 6%, maturing December 2009 and secured by equipment	$	1,000,000
Notes payable to a bank, payable in monthly installments aggregating $30,731 including interest, maturing through October 2007, secured by equipment		628,047
Line of credit with maximum borrowing of $500,000. Interest only payments calculated as prime plus 0.5% are payable until maturity in June 2005, secured by equipment.		215,000
Notes payable to financing companies, payable in monthly installments from $630 to $1,570 and bearing interest at rates ranging from 4.9% to 7.99%, maturing at various dates through November 2009. The notes are secured by vehicles and equipment.		188,488
Note payable to a bank payable in monthly installments of $768 including interest at 4.69%, maturing in July 2007 and secured by a vehicle.		22,328
Note payable to a bank payable in monthly installments of $530 including interest at 6.39%, maturing in July 2007 and secured by a vehicle.		17,918
		2,071,781
Less: current maturities		(819,341	)
	$	1,252,440

The Partnership is required to meet certain financial covenants on a monthly reporting basis. Among other restrictions, such covenants include the maintenance of minimum tangible net worth requirements, as well as the maintenance of sufficient levels of earnings to meet the Partnership’s required debt servicing obligations. As of December 31, 2004, the Partnership was not in compliance with these covenants.

The following are future maturities of the long-term debt and long-term debt related party:

Year Ending December 31,	Related Party		Non-Related Party		Total
2005	$	190,160	$	819,341	$	1,009,501
2006		75,051		590,508		665,559
2007		75,051		250,053		325,104
2008		75,051		206,039		281,090
2009		6,254		205,840		212,094
	$	421,567	$	2,071,781	$	2,493,348

F-186

TRINITY VALLEY RENTALS

NOTES TO COMBINED FINANCIAL STATEMENTS—(Continued)

DECEMBER 31, 2004

5. Capital Lease Obligations

The Partnership leases certain equipment which has been classified as capital leases. As of December 31, 2004, the aggregate cost and accumulated depreciation of assets under capital leases are as follows:

Cost	$	155,830
Accumulated depreciation		122,000
	$	33,830

Depreciation for such assets is included in depreciation expense.

The following are the future minimum lease payments under capital leases:

Year Ending December 31,
2005	$	35,484
2006		28,159
2007		12,070
Total future minimum lease payments		75,713
Less: amount representing interest		(7,670	)
Present value of future minimum lease payments	$	68,043

6. Lease Commitments

The Partnership leases land under an informal month-to-month agreement. They also lease office space under a non-cancelable operating lease which expires March 2005. Rent expense under these operating leases and other vehicle leases charged to income was approximately $35,000 for the year ended December 31, 2004. The Partnership is obligated to pay $4,050 in 2005.

The Partnership subleases and leases rental equipment for use in the revenue process under informal lease agreements. Total sublease and lease expense was approximately $1,370,000 and $109,000, respectively.

7. Related Party Transactions

The Partnership has related party payables of approximately $24,000 as of December 31, 2004. The partnership also has notes payable to related parties as described in Note 3.

8. Subsequent Event

On January 31, 2005, certain assets and working capital of the Partnership were purchased by Stallion Oilfield Services Ltd., headquartered in Houston, Texas.

F-187

SUPPLEMENTAL SCHEDULE

F-188

TRINITY VALLEY RENTALS

SCHEDULE OF COMBINED OPERATING EXPENSES

YEAR ENDED DECEMBER 31, 2004

Cost of services
Subleased equipment	$	1,371,086
Salaries and wages		306,058
Repairs and maintenance		264,464
Leased equipment		108,974
Vehicles		71,868
Tools and supplies		44,492
Freight		26,858
Fuel		28,875
Other		63,513
Total cost of services	$	2,286,188
Selling, general and administrative
Salaries		467,875
Insurance		162,098
Vehicle		138,399
Travel and entertainment		107,366
Bad debts		81,054
Payroll taxes		68,665
Legal and professional		65,090
Telecommunications		49,379
Repairs and maintenance		38,382
Rent—office space		34,739
Property taxes		32,812
Office expenses		17,942
Advertising		16,118
Other		87,049
Total selling, general and administrative	$	1,366,968

See independent auditors’ report.

F-189

INDEPENDENT AUDITORS’ REPORT

To the Stockholders

Envirotech, Inc.

Riverton, WY

We have audited the accompanying balance sheet of Envirotech, Inc. as of December 31, 2004, and related statements of operations, changes in stockholders’ equity and cash flows for the year then ended. 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 audit.

We conducted our audit in accordance with auditing standards generally accepted in the United States of America. 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 audit provides a reasonable basis for our opinion.

In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of Envirotech, Inc. as of December 31, 2004, and the results of its operations and its cash flows for the year then ended, in conformity with accounting principles generally accepted in the United States of America.

Our audit was conducted for the purpose of forming an opinion on the basic financial statements taken as a whole. The supplemental schedule on page F-200 is presented for purposes of additional analysis and is not required as part of the basic financial statements. Such information has been subjected to the auditing procedures applied in the audit of the basic financial statements and, in our opinion, is fairly stated in all material respects in relation to the basic financial statements taken as a whole.

/S/    UHY MANN FRANKFORT STEIN & LIPP CPAS, LLP      

UHY Mann Frankfort Stein & Lipp CPAs, LLP

Houston, Texas

January 9, 2006

F-190

ENVIROTECH, INC.

BALANCE SHEET

DECEMBER 31, 2004

Assets
Current assets
Accounts receivable—trade, less allowance for doubtful accounts of $18,985		1,151,066
Loan to stockholder		11,445
Total current assets		1,162,511
Property and equipment, net		1,865,985
Total assets	$	3,028,496
Liabilities and stockholders’ equity
Current liabilities
Bank overdraft	$	133,541
Accounts payable—trade		502,166
Accounts payable—related party		28,526
Current portion of long-term debt		291,239
Note payable—related party		75,000
Line of credit		340,000
Total current liabilities		1,370,472
Long-term debt, less current portion		464,378
Total liabilities		1,834,850
Commitments and contingencies		—
Stockholders’ equity		1,193,646
Total liabilities and stockholders’ equity	$	3,028,496

See notes to financial statements.

F-191

ENVIROTECH, INC.

STATEMENT OF OPERATIONS

YEAR ENDED DECEMBER 31, 2004

Service revenue	$	5,555,377
Operating expenses
Cost of services		3,867,462
Selling, general and administrative		695,134
Depreciation and amortization		482,674
Total operating expenses		5,045,270
Operating income		510,107
Other income (expense)
Interest expense		(62,932	)
Other income		20,850
Other expense		(28,138	)
Total other income (expense)		(70,220	)
Net income	$	439,887

See notes to financial statements.

F-192

ENVIROTECH, INC.

STATEMENT OF CHANGES IN STOCKHOLDERS’ EQUITY

YEAR ENDED DECEMBER 31, 2004

	Common Stock		Retained Earnings			Total
Balances, January 1, 2004	$	18,000	$	955,759		$	973,759
Dividends		—		(220,000	)		(220,000	)
Net income		—		439,887			439,887
Balances, December 31, 2004	$	18,000	$	1,175,646		$	1,193,646

See notes to financial statements.

F-193

ENVIROTECH, INC.

STATEMENT OF CASH FLOWS

YEAR ENDED DECEMBER 31, 2004

Cash flows from operating activities
Net income	$	439,887
Adjustments to reconcile net income to net cash provided by operating activities
Depreciation		482,674
Bad debt expense		22,457
Loss on disposal of assets		42,000
Changes in operating assets and liabilities
Accounts receivable		(321,818	)
Loan to shareholder		(5,188	)
Accounts payable		381,484
Accounts payable—related party		84,854
Net cash provided by operating activities		1,126,350
Cash flows from investing activities
Cash paid for property and equipment		(128,057	)
Net cash used in investing activities		(128,057	)
Cash flows from financing activities
Payments on notes payable		(386,090	)
Payments on line of credit		(285,000	)
Dividends paid		(220,000	)
Proceeds from notes payable—related party		175,000
Payment on notes payable—related party		(150,000	)
Bank overdraft		(133,541	)
Net cash used in financing activities		(999,631	)
Increase in cash		(1,338	)
Cash at beginning of period		1,338
Cash at end of period	$	—
Supplemental cash flow information
Interest paid	$	62,932
Non-cash financing and investing activities
Property and equipment financed with notes payable and line of credit	$	640,000

See notes to financial statements.

F-194

ENVIROTECH, INC.

NOTES TO FINANCIAL STATEMENTS

DECEMBER 31, 2004

1. Significant Accounting Policies

Nature of Business: Envirotech, Inc. (the “Company”) is engaged in the rental of temporary housing, water systems, sewer systems and other related equipment to the drilling industry. The Company’s housing is manufactured for the tough environments of the drilling industry and provides its customers with comfortable and functional living and work spaces. The Company’s primary market is the Rocky Mountain area and it operates from Riverton, WY.

Envirotech, Inc. was incorporated as an S Corporation in Wyoming in 1996. The Company is equally co-owned by two individuals. The Company is authorized to issue 50,000 shares of no-par value common stock. As of December 31, 2004, 1,000 shares are issued and outstanding.

Cash and Cash Equivalents: For purposes of the statement of cash flows, cash equivalents include time deposits, certificates of deposit and all highly liquid debt instruments with original maturities of three months or less.

Accounts Receivable: The Company extends credit to its customers based on an evaluation of the customer’s financial condition and generally collateral is not required. Outstanding accounts receivable are assessed routinely and an allowance is set up when accounts are deemed uncollectible.

Property and Equipment: Property and equipment are stated at cost. Depreciation is provided on the straight-line method over the estimated useful lives of the related assets. All expenditures for major renewals and betterments are capitalized. Expenditures for maintenance and repairs are charged to expense as incurred.

Impairment of Long-lived Assets: The Company evaluates an asset for impairment when events or circumstances indicate that a long-lived asset’s carrying value may not be recovered. These events include market declines, changes in the manner in which the Company intends to use an asset, decisions to sell an asset and adverse changes in the legal or business environment.

If events or circumstances indicate that a long-lived asset’s carrying value may not be recoverable, the Company estimates the future undiscounted cash flows from the asset for which the lowest level of separate cash flows can be measured, to determine if the asset is impaired. If the total undiscounted future cash flows are less than the carrying amount for the asset, the Company estimates the fair value of the asset either through reference to sales data for similar assets, or by using a discounted cash flow approach. The asset’s carrying value is then adjusted downward to the fair value. These cash flow estimates require the Company to make estimates and assumptions for many years into the future for pricing demand, competition, operating costs, legal, regulatory and other factors and these estimates or assumptions could change significantly either positively or negatively.

Federal Income Taxes: The Company, with the consent of its stockholders, has elected under the Internal Revenue Code to be taxed as an S Corporation. The stockholders of an S Corporation are taxed on their proportionate share of the Company’s taxable income. Therefore, no provision or liability for federal income taxes has been included in the financial statements.

Revenue Recognition: Revenue from rental agreements are recognized over the rental period.

Advertising: The Company’s policy is to expense advertising costs as incurred. Advertising costs amounted to approximately $8,000 for the year ended December 31, 2004.

F-195

ENVIROTECH, INC.

NOTES TO FINANCIAL STATEMENTS—(Continued)

DECEMBER 31, 2004

Concentration of Risk: During 2004, the Company had cash deposited in a bank which was in excess of federally insured limits. The Company monitors the financial condition of the bank and has experienced no losses associated with its account.

The Company’s customer base consists primarily of independent oil and natural gas producers. The Company performs ongoing evaluations of its customers but generally does not require collateral on its trade receivables. During the year ended December 31, 2004, sales to three customers accounted for approximately 21%, 18% and 14% of total sales. Receivables from these customers as of December 31, 2004 totaled approximately $222,000, $337,000 and $158,000, respectively. During 2004, the Company purchased approximately 19% of all goods and services from one vendor. The accounts payable balance due to this vendor as of December 31, 2004 was approximately $200,000.

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

Reclassifications: Certain reclassifications have been made to the prior years’ financial statements to conform to the current year presentation. These reclassifications had no effect on previously reported results of operations or retained earnings.

2. Property and Equipment

Major classifications of property and equipment and estimated depreciable lives as of December 31, 2004 are as follows:

	Estimated Life
Rental equipment	5-7 years	$	3,167,729
Autos and trucks	5 years		274,179
Other depreciable property	5-7 years		156,151
Leasehold improvements	Various		4,412
			3,602,471
Less: accumulated depreciation			(1,736,486	)
		$	1,865,985

3. Notes Payable—Related Party

The Company has a note payable to a related party dated December 2003. Interest accrues at 6.5% and will increase based on prime rate, which was 5.25% as of December 31, 2004. The note has no stated maturity date and the principal balance of $75,000 is classified as a current liability.

F-196

ENVIROTECH, INC.

NOTES TO FINANCIAL STATEMENTS—(Continued)

DECEMBER 31, 2004

4. Notes Payable and Long-term Debt

Notes payable and long-term debt as of December 31, 2004 consists of the following:

Line of credit to a bank dated April 2004; maximum borrowing of $350,000. Interest payable monthly at the higher of prime (prime rate as of December 31, 2004 was 5.25%) or 4.75%. Line of credit matures in May 2005.	$	340,000
Note payable to a bank dated April 2004; original principal amount of $300,000. Payable in monthly installments of $5,628 including interest at the higher of prime rate or 4.75%. Note matures April 2009 and is secured by stock and assets of the Company along with personal guarantees of the owners.		263,158
Note payable to a bank dated October 2003; original principle of $250,000. Payable in monthly installments of $4,661 which includes interest at the higher of the prime rate or 4.5%. Note matures October 2006 and is secured by the stock and assets of the Company along with the personal guarantees of the owners.		196,551
Note payable to a bank dated November 2000; original principal amount of $850,000. Payable in monthly installments of $17,749 which includes interest at prime rate less 0.75% with a maximum of 10% and a minimum of 6.75%. Note matures March 2006 and is secured by stock and assets of the Company along with the personal guarantees of the owners.		185,497
Note payable to a bank dated March 2001; original principal amount of $350,000. Payable in monthly installments of $7,055 including interest at the higher of prime less 0.5% or 8%. Note matures June 15, 2006 and is secured by stock and assets of the Company along with personal guarantees of the owners.		95,321
Note payable to a financing company dated December 2003; original principal amount of $21,629. Payable in monthly installments of $503 with no interest. Note matures April 2009 and is secured by equipment		15,090
		1,095,617
Less: current maturities		(631,239	)
	$	464,378

The Company is required to meet certain financial covenants on a monthly reporting basis. Among other restrictions, such covenants include the maintenance of minimum tangible net worth requirements, as well as the maintenance of sufficient levels of earnings to meet the Company’s required debt servicing obligations. As of December 31, 2004, the Company was in compliance with all of the related notes payable and covenants.

F-197

ENVIROTECH, INC.

NOTES TO FINANCIAL STATEMENTS—(Continued)

DECEMBER 31, 2004

Future maturities of long-term debt are as follows:

Year Ending December 31,	Related party		Non-related party		Total
2005	$	75,000	$	631,239	$	706,239
2006		—		232,966		232,966
2007		—		121,694		121,694
2008		—		69,970		69,970
2009		—		39,748		39,748
	$	75,000	$	1,095,617	$	1,170,617

5. Lease Commitments

The Company leases office space from a related party under an informal month-to-month operating lease. Rent expense for office space was approximately $70,000 for the year ended December 31, 2004.

The Company rents equipment for use in the revenue process, and re-bills this cost to customers. Re-billed rental expense totaled approximately $1,560,000 during 2004 and is included in cost of revenue in the statement of income.

Totaled amounts re-billed to the customer are included in revenue.

Equipment is primarily rented under short-term rental arrangements and a non-cancelable operating lease expiring in October 2007. Total rental expense under this non-cancelable lease was approximately $420,000 during the year ended December 31, 2004.

The approximate future minimum rental payments under the non-cancelable operating lease are as follows:

Year Ending December 31,
2005	$	1,927,000
2006		1,927,000
2007		1,441,000
	$	5,295,000

6. Related Party Transactions

The Company had related party payables of approximately $28,000 as of December 31, 2004. Related party payables are due to shareholders, as well as entities under common control. The Company also has related party notes as described in Note 3 and leases office space from a related party as described in Note 5.

7. Subsequent Event

On January 31, 2005, certain assets and working capital of the Company were purchased by Stallion Oilfield Services Ltd., headquartered in Houston, Texas.

F-198

SUPPLEMENTAL SCHEDULE

F-199

ENVIROTECH, INC.

SCHEDULE OF OPERATING EXPENSES

YEAR ENDED DECEMBER 31, 2004

Cost of services
Re-billed equipment rental	$	1,555,772
Repairs and maintenance		428,025
Purchases/materials		412,346
Autos and trucks		144,878
Labor		963,867
Employee benefits		95,029
Travel and entertainment		94,190
Payroll taxes		84,723
Insurance		75,186
Other		13,446
Total cost of services	$	3,867,462
Selling, general and administrative
Vehicle	$	219,877
Salaries		141,940
Rent-office space		70,024
Legal and professional		52,712
Loss on disposal of assets		42,000
Telecommunications		33,246
Bad debts		22,457
Insurance		21,083
Employee benefits		20,860
Payroll taxes		18,498
Utilities		17,156
Travel and entertainment		10,465
Advertising		8,089
Other		16,727
Total selling, general and administrative	$	695,134

See independent auditors’ report.

F-200

INDEPENDENT AUDITORS’ REPORT

To the Stockholder

Double-D Enterprises, Inc.

Riverton, WY

We have audited the accompanying balance sheet of Double-D Enterprises, Inc. as of December 31, 2004, and related statements of operations, stockholders’ equity and cash flows for the year then ended. 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 audit.

We conducted our audit in accordance with auditing standards generally accepted in the United States of America. 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 audit provides a reasonable basis for our opinion.

In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of Double-D Enterprises, Inc. as of December 31, 2004, and the results of its operations and its cash flows for the year then ended, in conformity with accounting principles generally accepted in the United States of America.

Our audit was conducted for the purpose of forming an opinion on the basic financial statements taken as a whole. The supplemental schedule on page F-211 is presented for purposes of additional analysis and is not required as part of the basic financial statements. Such information has been subjected to the auditing procedures applied in the audit of the basic financial statements and, in our opinion, is fairly stated in all material respects in relation to the basic financial statements taken as a whole.

/S/    UHY MANN FRANKFORT STEIN & LIPP CPAS, LLP      

UHY Mann Frankfort Stein & Lipp CPAs, LLP

Houston, Texas

January 9, 2006

F-201

DOUBLE-D ENTERPRISES, INC.

BALANCE SHEET

DECEMBER 31, 2004

Assets
Current assets
Cash and cash equivalents	$	216,982
Accounts receivable—trade, less allowance for doubtful accounts of $83,898		387,484
Accounts receivable—related party		189,108
Available-for-sale securities		314,331
Prepaid expenses and other current assets		16,500
Total current assets		1,124,405
Property and equipment, net		1,084,935
Held to maturity investments		90,466
Total assets	$	2,299,806
Liabilities and stockholder’s equity
Current liabilities
Accounts payable—trade	$	104,107
Line of credit		444,900
Total current liabilities		549,007
Total liabilities		549,007
Commitments and contingencies		—
Stockholder’s equity		1,750,799
Total liabilities and stockholder’s equity	$	2,299,806

See notes to financial statements.

F-202

DOUBLE-D ENTERPRISES, INC.

STATEMENT OF OPERATIONS

YEAR ENDED DECEMBER 31, 2004

Service revenue	$	2,283,791
Operating expenses
Cost of services		989,154
Selling, general and administrative		384,902
Depreciation and amortization		171,579
Total operating expenses		1,545,635
Income from operations		738,156
Other income (expense)
Interest income		5,440
Interest expense		(41,990	)
Other income		4,273
Other expense		(25,416	)
Total other income (expense)		(57,693	)
Net income	$	680,463

See notes to financial statements.

F-203

DOUBLE-D ENTERPRISES, INC.

STATEMENT OF CHANGES IN STOCKHOLDER’S EQUITY

YEAR ENDED DECEMBER 31, 2004

	Common Stock		Retained Earnings			Accumulated Other Comprehensive Income/(Loss)		Total
Balances, December 31, 2003	$	10,000	$	1,017,508		$	61,409	$	1,088,917
Unrealized gain on available— for-sale securities		—		—			41,919		41,919
Net income		—		680,463			—		680,463
Total comprehensive income									722,382
Dividends		—		(60,500	)		—		(60,500	)
Balances, December 31, 2004	$	10,000	$	1,637,471		$	103,328	$	1,750,799

See notes to financial statements.

F-204

DOUBLE-D ENTERPRISES, INC.

STATEMENT OF CASH FLOWS

YEAR ENDED DECEMBER 31, 2004

Cash flows from operating activities
Net income	$	680,463
Adjustments to reconcile net income to net cash provided by operating activities
Depreciation		171,579
Bad debt expense		77,619
Changes in operating assets and liabilities
Accounts receivable—trade		(275,357	)
Accounts receivable—related party		(77,707	)
Prepaid expenses and other current assets		(6,114	)
Accounts payable—trade		10,898
Net cash provided by operating activities		581,381
Cash flows from investing activities
Cash paid for property and equipment		(366,276	)
Proceeds received from sale of investment		4,211
Purchase of available-for-sale securities		(46,564	)
Net cash used in investing activities		(408,629	)
Cash flows from financing activities
Dividends paid		(60,500	)
Repayment of line of credit		(2,176	)
Repayments on capital leases		(17,612	)
Net cash used in financing activities		(80,288	)
Increase in cash		92,464
Cash at beginning of period		124,518
Cash at end of period	$	216,982
Supplemental cash flow information
Interest paid	$	41,990
Non-cash financing and investing activities
Property and equipment financed with line of credit	$	447,076

See notes to financial statements.

F-205

DOUBLE-D ENTERPRISES, INC.

NOTES TO FINANCIAL STATEMENTS

DECEMBER 31, 2004

1. Significant Accounting Policies

Nature of Business: Double-D Enterprises, Inc. (the “Company”) is engaged in the rental of loaders, manlifts, mud vacs, and other related equipment to the drilling industry. The Company’s primary market is Wyoming, and the Company operates from locations in Riverton and Shoshoni, WY.

Double-D Enterprises, Inc., an S Corporation, was incorporated in Wyoming in June, 1980. The Company is authorized to issue 50,000 shares of no-par value common stock.

Cash and Cash Equivalents: For purposes of the statement of cash flows, cash equivalents include time deposits, certificates of deposit and all highly liquid debt instruments with original maturities of three months or less.

Accounts Receivable: The Company extends credit to its customers based on an evaluation of their financial condition and generally collateral is not required. Outstanding accounts receivable are assessed routinely and an allowance is set up when accounts are deemed uncollectible.

Investments: The Company determines the appropriate classification of its investments in debt and equity securities at the time of purchase and reevaluates such determinations at each balance sheet date. Debt securities are classified as held-to-maturity when the Company has the positive intent and ability to hold the securities to maturity. Debt securities for which the Company does not have the intent or ability to hold to maturity are classified as available-for-sale. Held-to-maturity securities are recorded as either short-term or long-term on the balance sheet based on contractual maturity date and are stated at amortized cost. Marketable securities that are bought and held principally for the purpose of selling them in the near term are classified as trading securities and are reported at fair value, with unrealized gains and losses recognized in earnings. Debt and marketable equity securities not classified as held-to-maturity or as trading, are classified as available-for-sale, and are carried at fair market value, with the unrealized gains and losses, included in the determination of comprehensive income and reported in stockholder’s equity.

Property and Equipment: Property and equipment are stated at cost. Depreciation is provided on the straight-line method over the estimated useful lives of the related assets. All expenditures for major renewals and betterments are capitalized. Expenditures for maintenance and repairs are charged to expense as incurred.

Impairment of Long-lived Assets: The Company evaluates an asset for impairment when events or circumstances indicate that a long-lived asset’s carrying value may not be recovered. These events include market declines, changes in the manner in which the Company intends to use an asset, decisions to sell an asset and adverse changes in the legal or business environment.

If events or circumstances indicate that a long-lived asset’s carrying value may not be recoverable, the Company estimates the future undiscounted cash flows from the asset for which the lowest level of separate cash flows can be measured, to determine if the asset is impaired. If the total undiscounted future cash flows are less than the carrying amount for the asset, the Company estimates the fair value of the asset either through reference to sales data for similar assets, or by using a discounted cash flow approach. The asset’s carrying value is then adjusted downward to the fair value. These cash flow estimates require the Company to make estimates and assumptions for many years into the future for pricing demand, competition, operating costs, legal, regulatory and other factors and these estimates or assumptions could change significantly either positively or negatively.

F-206

DOUBLE-D ENTERPRISES, INC.

NOTES TO FINANCIAL STATEMENTS—(Continued)

DECEMBER 31, 2004

Federal Income Taxes: The Company, with the consent of its stockholder, has elected under the Internal Revenue Code to be taxed as an S Corporation. The stockholders of an S Corporation are taxed on their proportionate share of the Company’s taxable income. Therefore, no provision or liability for federal income taxes has been included in the financial statements.

Revenue Recognition: Revenue from rental agreements are recognized over the rental period.

Advertising: The Company’s policy is to expense advertising costs as incurred. Advertising costs amounted to approximately $5,000 for the year ended December 31, 2004.

Concentration of Risk: During 2004, the Company had cash deposited in a bank which was in excess of federally insured limits. The Company monitors the financial condition of the bank and has experienced no losses associated with its account.

The Company’s customer base consists primarily of independent oil and natural gas producers. The Company performs ongoing evaluations of its customers but generally does not require collateral on its trade receivables. During the year ended December 31, 2004, sales to four customers accounted for approximately 25%, 18%, 14% and 12% of total sales, respectively. Amounts due from these customers as of December 31, 2004 were approximately $87,000, $100,000, $87,000 and $44,000, respectively.

The Company purchased 14% of all goods and services from one vendor during the year ended December 31, 2004. Accounts payable to this vendor as of December 31, 2004 was approximately $14,000. In addition, the Company purchased approximately 19% of all goods and services from a related party.

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

Reclassifications: Certain reclassifications have been made to the prior years’ financial statements to conform to the current year presentation. These reclassifications had no effect on previously reported results of operations or retained earnings.

2. Investments

Available-for-sale securities as of December 31, 2004 included equity securities at an estimated fair value of $314,331 resulting in an unrealized gain of $103,328.

As of December 31, 2004, the Company held investments in marketable securities that were classified as held-to-maturity. These securities are from states and municipalities with an estimated fair value of $93,934. The securities are carried on the balance sheet at cost of $90,466, with an unrecognized holding gain of $3,468.

F-207

DOUBLE-D ENTERPRISES, INC.

NOTES TO FINANCIAL STATEMENTS—(Continued)

DECEMBER 31, 2004

3. Property and Equipment

Major classifications of property and equipment and estimated depreciable lives as of December 31, 2004 are as follows:

	Estimated Life
Equipment	5-7 years	$	1,320,866
Other depreciable property	3-5 years		233,267
Autos and trucks	5 years		178,590
Leasehold improvement	Various		81,422
			1,814,145
Less: accumulated depreciation			729,210
		$	1,084,935

4. Line of Credit

Line of credit with a maximum borrowing base of $550,000 of which $444,900 was outstanding as of December 31, 2004, interest payable monthly at an initial rate of 4.75% and variable at prime plus 0.25%, maturing August 12, 2005. The prime rate was 5.25% as of December 31, 2004. The line of credit is secured by stock and assets of a related party and the personal guarantee of the stockholder.

The Company is required to meet certain financial covenants on a monthly reporting basis. Among other restrictions, such covenants include the maintenance of minimum tangible net worth requirements, as well as the maintenance of sufficient levels of earnings to meet the Company’s required debt servicing obligations. As of December 31, 2004, the Company was in compliance with all of the related amended covenants.

5. Lease Commitments

The Company leases office space from a third party under an informal agreement. Rent expense for the year ended December 31, 2004 was approximately $9,000. The Company has no future commitments related to this month-to-month agreement.

The Company rents equipment for various terms under long-term, non-cancelable operating lease agreements. The agreements expire at various dates through February 2008. Total rental expense for equipment was approximately $253,000 for the year ended December 31, 2004.

The approximate future minimum rental payments under non-cancelable operating leases are as follows:

Year Ending December 31,
2005	$	320,000
2006		245,000
2007		181,000
2008		7,000
	$	753,000

F-208

DOUBLE-D ENTERPRISES, INC.

NOTES TO FINANCIAL STATEMENTS—(Continued)

DECEMBER 31, 2004

6. Related Party Transactions

The Company had current related party receivables of approximately $189,000. Related party receivables are due from the stockholder and entities under common control.

7. Subsequent Event

On January 31, 2005, certain assets and working capital of the Company were purchased by Stallion Oilfield Services Ltd., headquartered in Houston, Texas.

F-209

SUPPLEMENTAL SCHEDULE

F-210

DOUBLE-D ENTERPRISES, INC.

SCHEDULE OF OPERATING EXPENSES

YEAR ENDED DECEMBER 31, 2004

Cost of services
Purchases or materials	$	362,386
Equipment rental		253,456
Repairs and maintenance		128,950
Salaries and wages		103,512
Vehicles		89,105
Insurance		29,191
Payroll taxes		13,664
Other		8,890
Total cost of services	$	989,154
Selling, general and administrative
Salaries		141,331
Bad debts		77,619
Legal and professional		32,894
Insurance		29,190
Payroll taxes		20,496
Telecommunications		14,306
Property taxes		12,624
Travel and entertainment		12,347
Vehicle		9,742
Rent		8,535
Advertising		4,617
Other		21,201
Total selling, general and administrative	$	384,902

See independent auditors’ report.

F-211

Appendix A

Glossary of Terms

ArkLaTex. The region, centered in Northwest Louisiana, is where Arkansas, Louisiana, Texas and Oklahoma intersect.

Articulating loader. A heavy duty four-wheeled loading equipment with a knuckle-jointed body to maximize maneuverability on construction locations. The loader usually is used with forks or loading bucket for loading and moving dirt.

Backhoe. An excavator whose shovel bucket is attached to a hinged boom and is drawn backward to move earth.

Barge. A floating vessel used for carrying heavy equipment or conducting operations in inland waters; usually pushed or pulled by a tug boat to and from a location.

Centrifuge. An item of solids-removal equipment that removes fine and ultra fine solids. It consists of a conical drum that rotates at 2000 to 4000 rpm and is useful for processing weighted drilling fluids and can remove finer solids than can shaker screens.

Closed-loop system. A solids control system including tanks which contains all of the drilling fluids and cuttings on location instead of an earthen reserve pit.

Compressor. A device that raises the pressure of a compressible fluid such as air or gas. Compressors create a pressure differential to move or compress a vapor or a gas.

Crew quarter. A skid-mounted accommodation which houses the drilling rig crew.

Cuttings. The fragments of rock dislodged by the bit and brought to the surface in the drilling fluids/mud. Washed and dried cuttings samples are analyzed by geologists to obtain information about the formations drilled.

Drilling efficiency. The efficiency at which the drill cuttings and other solids are removed from the drilling fluids stream; greater efficiency leads to greater rates-of-penetration of the drill bit, which reduces drilling time.

Drilling fluids. Any of a number of liquid and gaseous fluids and mixtures of fluids and solids (as solid suspensions, mixtures and emulsions of liquids, gases and solids) used in operations to drill boreholes into the earth. Synonymous with “drilling mud” in general usage.

Hydrocarbon. A naturally occurring organic compound comprising hydrogen and carbon. Hydrocarbons can be as simple as methane, but many are highly complex molecules, and can occur as gases, liquids or solids. Petroleum is a complex mixture of hydrocarbons. The most common hydrocarbons are natural gas, oil and coal.

Light plant. A generator with light extensions used to illuminate areas during night-time operations.

Manlift. Usually a 40’ or 60’ machine which has a boom and basket to lift personnel safely to various heights.

Mid-Continent region. The oil and gas producing area contained in Oklahoma, Arkansas, Kansas, Missouri, Nebraska, Iowa, North Dakota, South Dakota and Minnesota.

Permian Basin. The oil and natural gas producing area largely contained in the western part of Texas extending westward into the southeastern part of new Mexico.

A-1

Pit closure. The backfill of an existing reserve pit.

Pit remediation. The restoration of the area where a reserve pit was located to pre-existing state.

Pit. Originally, an open hole dug in the ground to hold drilling fluid or waste materials discarded after the treatment of drilling mud/fluid. For some wellsite operations, pits are used for suction to the mud pumps, settling of mud sediments, and storage of reserve mud. Steel tanks are much more commonly used for these purposes now, but they are still usually referred to as pits.

Pole truck. A heavy-duty utility truck used to lift and set equipment on a drilling location.

Production facilities. Facilities constructed after the drilling of a successful well to handle the oil and gas that is produced; typically, these facilities consist of tank batteries for oil, condensate or residential saltwater production, firewall containment barriers, condensers, heaters, flow lines, pump jacks and other equipment as designed by production engineers to facilitate production of the particular well.

Rocky Mountain region. The region encompassing the states of Colorado, Utah, Wyoming, New Mexico and part of South Dakota.

Sewer systems. Temporary tanks and pumps used to store sewage from houses on the drill site.

Shale. A fine-grained, fissile, sedimentary rock formed by consolidation of clay- and silt-sized particles into thin, relatively impermeable layers.

Tight sands. A type of unconventional tight reservoir. Tight reservoirs are those which have low permeability, often quantified as less than 0.1 millidarcies.

Vacuum truck. A tractor truck with a 130 barrel trailer used to haul various oilfield fluids including fresh water, salt water, drilling muds and waste.

A-2

PART II

INFORMATION NOT REQUIRED IN PROSPECTUS

ITEM 13. Other Expenses of Issuance and Distribution

Set forth below are the expenses (other than underwriting discounts and commissions) expected to be incurred in connection with the issuance and distribution of the securities registered hereby. With the exception of the Securities and Exchange Commission registration fee, the NASD filing fee and The NASDAQ Stock Market LLC listing fee, the amounts set forth below are estimates:

Securities and Exchange Commission registration fee	$	12,280
NASD filing fee		40,500
The NASDAQ Stock Market LLC listing fee		100,000
Printing and engraving expenses
Legal fees and expenses
Accounting fees and expenses
Transfer agent and registrar fees
Miscellaneous
TOTAL	$

ITEM 14. Indemnification of Directors and Officers

Section 145 of the Delaware General Corporation Law (“DGCL”) provides that a corporation may indemnify any person who was or is a party or is threatened to be made a party to any threatened, pending or completed action, suit or proceeding whether civil, criminal, administrative or investigative (other than an action by or in the right of the corporation) by reason of the fact that he is or was a director, officer, employee or agent of the corporation, or is or was serving at the request of the corporation as a director, officer, employee or agent of another corporation, partnership, joint venture, trust or other enterprise, against expenses (including attorneys’ fees), judgments, fines and amounts paid in settlement actually and reasonably incurred by him in connection with such action, suit or proceeding if he acted in good faith and in a manner he reasonably believed to be in or not opposed to the best interests of the corporation, and, with respect to any criminal action or proceeding, had no reasonable cause to believe his conduct was unlawful. Section 145 further provides that a corporation similarly may indemnify any such person serving in any such capacity who was or is a party or is threatened to be made a party to any threatened, pending or completed action or suit by or in the right of the corporation to procure a judgment in its favor by reason of the fact that he is or was a director, officer, employee or agent of the corporation or is or was serving at the request of the corporation as a director, officer, employee or agent of another corporation, partnership, joint venture, trust or other enterprise, against expenses (including attorneys’ fees) actually and reasonably incurred in connection with the defense or settlement of such action or suit if he acted in good faith and in a manner he reasonably believed to be in or not opposed to the best interests of the corporation and except that no indemnification shall be made in respect of any claim, issue or matter as to which such person shall have been adjudged to be liable to the corporation unless and only to the extent that the Delaware Court of Chancery or such other court in which such action or suit was brought shall determine upon application that, despite the adjudication of liability but in view of all of the circumstances of the case, such person is fairly and reasonably entitled to indemnity for such expenses which the Delaware Court of Chancery or such other court shall deem proper. The Company’s certificate of incorporation and bylaws provide that indemnification shall be to the fullest extent permitted by the DGCL for all current or former directors or officers of the Company. As permitted by the DGCL, the certificate of incorporation provides that directors of the Company shall have no personal liability to the Company or its stockholders for monetary damages for breach of fiduciary duty as a director, except (1) for any breach of the director’s duty of loyalty to the Company or its stockholders, (2) for acts or omissions not in good faith or which involve intentional misconduct or knowing violation of law, (3) under Section 174 of the DGCL or (4) for any transaction from which a director derived an improper personal benefit.

II-1

ITEM 15. Recent Sales of Unregistered Securities

The following is a description of all securities that the registrant has sold within the past three years without registering the securities under the Securities Act:

The transactions contemplated by the agreement and plan of merger will be completed immediately prior to the closing of this offering. In these transactions, holders of the limited partnership interests of our predecessor will receive an aggregate of              shares of our common stock in exchange for their respective partnership interests. The registrant will rely on the provisions of Section 4(2) of the Securities Act in claiming exemption for the offering, sale and delivery of such securities from registration under the Securities Act.

ITEM 16. Exhibits and Financial Statement Schedules

a. Exhibits:

1.1+	—	Form of Underwriting Agreement
2.1**	—	Agreement and Plan of Merger of Stallion Oilfield Holding, Ltd. with and into Stallion Oilfield Services Inc.
3.1+	—	Restated Certificate of Incorporation
3.2+	—	Amended and Restated Bylaws
4.1+	—	Specimen Stock Certificate representing of common stock
4.2*	—	Indenture dated January 24, 2007, between Stallion Oilfield Services Ltd., Stallion Oilfield Finance Corp. and the Guarantors Named Therein, with the Bank of New York Trust Company, N.A., as Trustee, for 9.75% Senior Notes due 2015.
5.1+	—	Opinion of Vinson & Elkins L.L.P.
10.1+	—	Registration Rights Agreement among Stallion Oilfield Holdings, Ltd., C/R Stallion Investment Partnership, L.P. and C/R Energy Coinvestment II, L.P.
10.2+	—	Nominating Agreement between Stallion Oilfield Holdings, Ltd. and C/R Stallion Investment Partnership, L.P.
10.3+	—	Form of Indemnification Agreement
10.4+	—	Stallion Oilfield Services 2007 Stock Incentive Plan
10.5+	—	Employment Agreement dated as of January 31, 2005 with Craig M. Johnson
10.6+	—	Employment Agreement dated as of January 31, 2005 with David S. Schorlemer
10.7+	—	Employment Agreement dated as of January 31, 2005 with Hill M. Dishman
10.8+	—	Second Amended and Restated Credit Agreement, dated as of January 24, 2007, among Stallion Oilfield Services Ltd., as borrower, Stallion Oilfield Holdings, Ltd., Stallion Interests, LLC and the other persons party thereto as guarantors, the lenders party thereto, UBS Securities LLC and Banc of America Securities LLC, as joint lead arrangers and joint bookmanagers, UBS AG, Stamford Brach, as issuing bank, administrative agent and collateral agent, UBS Loan Finance LLC, as swingline lender, Amegy Bank National Association, as syndication agent and Natexis Banques Populaires, as documentation agent.
21.1+	—	Subsidiaries of Stallion Oilfield Services, Inc.
23.1*	—	Consent of UHY LLP
23.2*	—	Consent of UHY Mann Frankfort Stein & Lipp CPAs, LLP
23.3*	—	Consent of Wright, Moore, DeHart, Dupuis & Hutchinson, L.L.C.
23.4*	—	Consent of Melton & Melton, L.L.P.
23.5+	—	Consent of Vinson & Elkins L.L.P. (Contained in Exhibit 5.1)
24.1**	—	Power of Attorney

* Filed herewith

** Filed previously

+ To be filed by amendment.

b. Financial Statement Schedules

II-2

ITEM 17. Undertakings

The undersigned Registrant hereby undertakes:

(a) Insofar as indemnification for liabilities arising under the Securities Act of 1933 may be permitted to directors, officers and controlling persons of the Registrant pursuant to the provisions described in Item 14, or otherwise, the Registrant has been advised that in the opinion of the Securities and Exchange Commission such indemnification is against public policy as expressed in the Act and is, therefore, unenforceable. In the event that a claim for indemnification against such liabilities (other than the payment by the Registrant of expenses incurred or paid by a director, officer or controlling person of the Registrant in the successful defense of any action, suit or proceeding) is asserted by such director, officer or controlling person in connection with the securities being registered, the Registrant will, unless in the opinion of its counsel the matter has been settled by controlling precedent, submit to a court of appropriate jurisdiction the question whether such indemnification by it is against public policy as expressed in the Act and will be governed by the final adjudication of such issue.

(b) To provide to the underwriter(s) at the closing specified in the underwriting agreements, certificates in such denominations and registered in such names as required by the underwriter(s) to permit prompt delivery to each purchaser.

(c) For purpose of determining any liability under the Securities Act of 1933, the information omitted from the form of prospectus filed as part of this Registration Statement in reliance upon Rule 430A and contained in the form of prospectus filed by the Registrant pursuant to Rule 424(b)(1) or (4) or 497(h) under the Securities Act shall be deemed to be part of this Registration Statement as of the time it was declared effective.

(d) For the purpose of determining any liability under the Securities Act of 1933, each post-effective amendment that contains a form of prospectus shall be deemed to be a new registration statement relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof.

II-3

SIGNATURES

Pursuant to the requirements of the Securities Act of 1933, as amended, the Registrant has duly caused this Registration Statement to be signed on its behalf by the undersigned, thereunto duly authorized, in the City of Houston, in the State of Texas on June 5, 2007.

STALLION OILFIELD SERVICES, INC.
By:	/S/    DAVID S. SCHORLEMER
	David S. Schorlemer
	Chief Financial Officer

Pursuant to the requirements of the Securities Act of 1933, as amended, this registration statement has been signed below by the following persons in the capacities and on the dates indicated below.

Signature	Title	Date
* Craig M. Johnson	President, Chief Executive Officer and Chairman of the Board (Principal Executive Officer)	June 5, 2007
/S/    DAVID S. SCHORLEMER         David S. Schorlemer	Vice President, Chief Financial Officer and Director (Principal Financial Officer)	June 5, 2007
* N. John Lancaster, Jr.	Director	June 5, 2007
* Pierre F. Lapeyre, Jr.	Director	June 5, 2007
* Jennifer F. Guidry	Chief Accounting Officer, Treasurer and Assistant Secretary (Principal Accounting Officer)	June 5, 2007

*By:	/S/    DAVID S. SCHORLEMER
	David S. Schorlemer as attorney-in-fact

II-4

EXHIBIT INDEX

1.1+	—	Form of Underwriting Agreement
2.1**	—	Agreement and Plan of Merger of Stallion Oilfield Holding, Ltd. with and into Stallion Oilfield Services, Inc.
3.1+	—	Restated Certificate of Incorporation
3.2+	—	Amended and Restated Bylaws
4.1+	—	Specimen Stock Certificate representing of common stock
4.2*	—	Indenture dated January 24, 2007, between Stallion Oilfield Services Ltd., Stallion Oilfield Finance Corp. and the Guarantors Named Therein, with the Bank of New York Trust Company, N.A., as Trustee, for 9.75% Senior Notes due 2015.
5.1+	—	Opinion of Vinson & Elkins L.L.P.
10.1+	—	Registration Rights Agreement among Stallion Oilfield Holdings, Ltd., C/R Stallion Investment Partnership, L.P. and C/R Energy Coinvestment II, L.P.
10.2+	—	Nominating Agreement between Stallion Oilfield Holdings, Ltd. and C/R Stallion Investment Partnership, L.P.
10.3+	—	Form of Indemnification Agreement
10.4+	—	Stallion Oilfield Services 2007 Stock Incentive Plan
10.5+	—	Employment Agreement dated as of January 31, 2005 with Craig M. Johnson
10.6+	—	Employment Agreement dated as of January 31, 2005 with David S. Schorlemer
10.7+	—	Employment Agreement dated as of January 31, 2005 with Hill M. Dishman
10.8+	—	Second Amended and Restated Credit Agreement, dated as of January 24, 2007, among Stallion Oilfield Services Ltd., as borrower, Stallion Oilfield Holdings, Ltd., Stallion Interests, LLC and the other persons party thereto as guarantors, the lenders party thereto, UBS Securities LLC and Banc of America Securities LLC, as joint lead arrangers and joint bookmanagers, UBS AG, Stamford Brach, as issuing bank, administrative agent and collateral agent, UBS Loan Finance LLC, as swingline lender, Amegy Bank National Association, as syndication agent and Natexis Banques Populaires, as documentation agent.
21.1+	—	Subsidiaries of Stallion Oilfield Services, Inc.
23.1*	—	Consent of UHY LLP
23.2*	—	Consent of UHY Mann Frankfort Stein & Lipp CPAs, LLP
23.3*	—	Consent of Wright, Moore, DeHart, Dupuis & Hutchinson, L.L.C.
23.4*	—	Consent of Melton & Melton, L.L.P.
23.5+	—	Consent of Vinson & Elkins L.L.P. (Contained in Exhibit 5.1)
24.1**	—	Power of Attorney

* Filed herewith

** Filed previously

+ To be filed by amendment.

II-5

EX-4.2

Exhibit 4.2

EXECUTION VERSION

STALLION OILFIELD SERVICES LTD.

STALLION OILFIELD FINANCE CORP.

as Issuers,

The GUARANTORS named herein

and

THE BANK OF NEW YORK TRUST COMPANY, N.A.

as Trustee

INDENTURE

Dated as of January 24, 2007

9 ³/4% Senior Notes due 2015

CROSS-REFERENCE TABLE

TIA Section	Indenture Section
310(a)(1)	7.10
(a)(2)	7.10
(a)(3)	N.A.
(a)(4)	N.A
(a)(5)	7.10
(b)	7.10
(b)(1)	7.10
(c)	N.A.
311(a)	7.11
(b)	7.11
(c)	N.A.
312(a)	2.05
(b)	11.03
(c)	11.03
313(a)	7.06
(b)(1)	N.A.
(b)(2)	7.06; 7.07
(c)	7.06; 11.02
(d)	7.06
314(a)	4.02; 11.02; 11.05
(b)	N.A.
(c)(1)	11.04
(c)(2)	11.04
(c)(3)	N.A.
(d)	N.A.
(e)	11.05
(f)	N.A.
315(a)	7.0l
(b)	7.05; 11.02
(c)	7.01
(d)	7.01
(e)	6.11
316(a) (last sentence)	2.09
(a)(1)(A)	6.05
(a)(1)(B)	6.04
(a)(2)	N.A.
(b)	6.07
(c)	2.12
317(a)(1)	6.08
(a)(2)	6.09
(b)	2.04
318(a)	11.01
(b)	N.A.
(c)	11.0l

N.A. means Not Applicable

NOTE: This Cross-Reference Table shall not, for any purpose, be deemed to be a part of this Indenture.

TABLE OF CONTENTS

		Page
ARTICLE 1
DEFINITIONS AND INCORPORATION BY REFERENCE
SECTION 1.01.	DEFINITIONS	1
SECTION 1.02.	INCORPORATION BY REFERENCE OF TRUST INDENTURE ACT	25
SECTION 1.03.	RULES OF CONSTRUCTION	26
ARTICLE 2
THE NOTES
SECTION 2.01.	FORM AND DATING	26
SECTION 2.02.	EXECUTION AND AUTHENTICATION	27
SECTION 2.03.	REGISTRAR AND PAYING AGENT	27
SECTION 2.04.	PAYING AGENT TO HOLD ASSETS IN TRUST	28
SECTION 2.05.	NOTEHOLDER LISTS	28
SECTION 2.06.	TRANSFER AND EXCHANGE	28
SECTION 2.07.	REPLACEMENT NOTES	29
SECTION 2.08.	OUTSTANDING NOTES	29
SECTION 2.09.	TREASURY NOTES	30
SECTION 2.10.	TEMPORARY NOTES	30
SECTION 2.11.	CANCELLATION	30
SECTION 2.12.	DEFAULTED INTEREST	30
SECTION 2.13.	DEPOSIT OF MONEYS	31
SECTION 2.14.	CUSIP NUMBER	31
SECTION 2.15.	BOOK-ENTRY PROVISIONS FOR GLOBAL NOTES	31
SECTION 2.16.	REGISTRATION OF TRANSFERS AND EXCHANGES	32
SECTION 2.17.	RESTRICTIVE LEGENDS	36
ARTICLE 3
REDEMPTION
SECTION 3.01.	NOTICES TO TRUSTEE	38
SECTION 3.02.	SELECTION OF NOTES TO BE REDEEMED	38
SECTION 3.03.	NOTICE OF REDEMPTION	38
SECTION 3.04.	EFFECT OF NOTICE OF REDEMPTION	39
SECTION 3.05.	DEPOSIT OF REDEMPTION PRICE	39
SECTION 3.06.	NOTES REDEEMED IN PART	40

-i-

		Page
ARTICLE 4
COVENANTS
SECTION 4.01.	PAYMENT OF NOTES	40
SECTION 4.02.	REPORTS TO HOLDERS	40
SECTION 4.03.	WAIVER OF STAY, EXTENSION OR USURY LAWS	42
SECTION 4.04.	COMPLIANCE CERTIFICATE; NOTICE OF DEFAULT	43
SECTION 4.05.	PAYMENT OF TAXES AND OTHER CLAIMS	43
SECTION 4.06.	CORPORATE/LIMITED PARTNERSHIP EXISTENCE	44
SECTION 4.07.	MAINTENANCE OF OFFICE OR AGENCY	44
SECTION 4.08.	COMPLIANCE WITH LAWS	44
SECTION 4.09.	MAINTENANCE OF PROPERTIES AND INSURANCE	45
SECTION 4.10.	LIMITATIONS ON ADDITIONAL INDEBTEDNESS AND PREFERRED STOCK	45
SECTION 4.11.	LIMITATIONS ON RESTRICTED PAYMENTS	47
SECTION 4.12.	LIMITATIONS ON ASSET SALES	50
SECTION 4.13.	LIMITATIONS ON TRANSACTIONS WITH AFFILIATES	52
SECTION 4.14.	LIMITATIONS ON LIENS	54
SECTION 4.15.	CHANGE OF CONTROL	54
SECTION 4.16.	LIMITATIONS ON DIVIDEND AND OTHER RESTRICTIONS AFFECTING RESTRICTED SUBSIDIARIES	56
SECTION 4.17.	LIMITATIONS ON SALE AND LEASEBACK TRANSACTIONS	57
SECTION 4.18.	CONDUCT OF BUSINESS	58
SECTION 4.19.	LIMITATIONS ON DESIGNATION OF UNRESTRICTED SUBSIDIARIES	58
SECTION 4.20.	ADDITIONAL NOTE GUARANTEES	59
SECTION 4.21.	LIMITATIONS ON LAYERING INDEBTEDNESS	60
SECTION 4.22.	RESTRICTIONS ON ACTIVITIES OF FINANCE CORP	60
ARTICLE 5
SUCCESSOR PERSON
SECTION 5.01.	LIMITATIONS ON MERGERS, CONSOLIDATIONS, ETC	60
SECTION 5.02.	SUCCESSOR PERSON SUBSTITUTED	62
ARTICLE 6
DEFAULTS AND REMEDIES
SECTION 6.01.	EVENTS OF DEFAULT	62
SECTION 6.02.	ACCELERATION	64
SECTION 6.03.	OTHER REMEDIES	65
SECTION 6.04.	WAIVER OF PAST DEFAULTS AND EVENTS OF DEFAULT	65
SECTION 6.05.	CONTROL BY MAJORITY	65
SECTION 6.06.	LIMITATION ON SUITS	65
SECTION 6.07.	RIGHTS OF HOLDERS TO RECEIVE PAYMENT	66

-ii-

		Page
SECTION 6.08.	COLLECTION SUIT BY TRUSTEE	66
SECTION 6.09.	TRUSTEE MAY FILE PROOFS OF CLAIM	66
SECTION 6.10.	PRIORITIES	67
SECTION 6.11.	UNDERTAKING FOR COSTS	67
ARTICLE 7
TRUSTEE
SECTION 7.01.	DUTIES OF TRUSTEE	67
SECTION 7.02.	RIGHTS OF TRUSTEE	69
SECTION 7.03.	INDIVIDUAL RIGHTS OF TRUSTEE	70
SECTION 7.04.	TRUSTEE’S DISCLAIMER	70
SECTION 7.05.	NOTICE OF DEFAULTS	70
SECTION 7.06.	REPORTS BY TRUSTEE TO HOLDERS	70
SECTION 7.07.	COMPENSATION AND INDEMNITY	71
SECTION 7.08.	REPLACEMENT OF TRUSTEE	72
SECTION 7.09.	SUCCESSOR TRUSTEE BY CONSOLIDATION, MERGER OR CONVERSION
SECTION 7.10.	ELIGIBILITY; DISQUALIFICATION	72
SECTION 7.11.	PREFERENTIAL COLLECTION OF CLAIMS AGAINST THE ISSUERS	73
ARTICLE 8
AMENDMENTS, SUPPLEMENTS AND WAIVERS
SECTION 8.01.	WITHOUT CONSENT OF HOLDERS	73
SECTION 8.02.	WITH CONSENT OF HOLDERS	74
SECTION 8.03.	COMPLIANCE WITH TIA	75
SECTION 8.04.	REVOCATION AND EFFECT OF CONSENTS	75
SECTION 8.05.	NOTATION ON OR EXCHANGE OF NOTES	75
SECTION 8.06.	TRUSTEE TO SIGN AMENDMENTS, ETC	76
ARTICLE 9
DISCHARGE OF INDENTURE; DEFEASANCE
SECTION 9.01.	SATISFACTION AND DISCHARGE OF INDENTURE	76
SECTION 9.02.	LEGAL DEFEASANCE	77
SECTION 9.03.	COVENANT DEFEASANCE	77
SECTION 9.04.	CONDITIONS TO LEGAL DEFEASANCE OR COVENANT DEFEASANCE	78
SECTION 9.05.	APPLICATION OF TRUST MONEY	79
SECTION 9.06.	REPAYMENT TO THE ISSUERS	80
SECTION 9.07.	REINSTATEMENT	80

-iii-

		Page
ARTICLE 10
GUARANTEES
SECTION 10.01.	UNCONDITIONAL GUARANTEE	81
SECTION 10.02.	SEVERABILITY	81
SECTION 10.03.	LIMITATION ON GUARANTOR’S LIABILITY	81
SECTION 10.04.	SUCCESSORS AND ASSIGNS	83
SECTION 10.05.	NO WAIVER	83
SECTION 10.06.	RELEASE OF GUARANTOR	83
SECTION 10.07.	EXECUTION OF SUPPLEMENTAL INDENTURE FOR FUTURE
	GUARANTORS	84
SECTION 10.08.	NOTATION OF NOTE GUARANTEE	84
SECTION 10.09.	SUBORDINATION OF SUBROGATION AND OTHER RIGHTS	84
ARTICLE 11
MISCELLANEOUS
SECTION 11.01.	TIA CONTROLS	84
SECTION 11.02.	NOTICES	85
SECTION 11.03.	COMMUNICATIONS BY HOLDERS WITH OTHER HOLDERS	86
SECTION 11.04.	CERTIFICATE AND OPINION AS TO CONDITIONS PRECEDENT	86
SECTION 11.05.	STATEMENTS REQUIRED IN CERTIFICATE AND OPINION	86
SECTION 11.06.	RULES BY TRUSTEE AND AGENTS	87
SECTION 11.07.	LEGAL HOLIDAYS	87
SECTION 11.08.	GOVERNING LAW	87
SECTION 11.09.	NO ADVERSE INTERPRETATION OF OTHER AGREEMENTS	87
SECTION 11.10.	NO RECOURSE AGAINST OTHERS	87
SECTION 11.11.	SUCCESSORS	87
SECTION 11.12.	CONSENT TO JURISDICTION; WAIVER OF IMMUNITIES	87
SECTION 11.13.	MULTIPLE COUNTERPARTS	88
SECTION 11.14.	TABLE OF CONTENTS, HEADINGS, ETC	88
SECTION 11.15.	SEPARABILITY	88
Signatures		S-1
EXHIBITS
Exhibit A	Form of Note	A-1
Exhibit B	Form of Certificate to Be Delivered in Connection with Transfers to Non-QIB Accredited Investors	B-1
Exhibit C	Form of Transferee Letter of Representation	C-1
Exhibit D	Form of Certificate to Be Delivered in Connection with Regulation S Transfers	D-1
Exhibit E	Form of Supplemental Indenture	E-1

-iv-

INDENTURE, dated as of January 24, 2007, among Stallion Oilfield Services Ltd., a Texas limited partnership (the “Partnership”), Stallion Oilfield Finance Corp., a Texas corporation (“Finance Corp.” and, together with the Partnership, the “Issuers”), each of the Guarantors (as defined herein) and The Bank of New York Trust Company, N.A., a national banking association, as trustee (the “Trustee”).

The Issuers have duly authorized the creation of an issue of 9 ¾% Senior Notes due 2015 (the “Initial Notes”) and, to provide therefor, the Issuers and each Guarantor have duly authorized the execution and delivery of this Indenture. All things necessary to make the Notes, when duly issued and executed by the Issuers, and authenticated and delivered hereunder, the valid obligations of the Issuers, and to make this Indenture a valid and binding agreement of the Issuers and the Guarantors, have been done.

Each party agrees as follows for the benefit of the other parties and for the equal and ratable benefit of the Holders:

ARTICLE 1

DEFINITIONS AND INCORPORATION BY REFERENCE

Section 1.01. Definitions.

“Acquired Indebtedness” means (1) with respect to any Person that becomes a Restricted Subsidiary after the Issue Date, Indebtedness of such Person and its Subsidiaries (including, for the avoidance of doubt, Indebtedness incurred in the ordinary course of such Person’s business to acquire assets used or useful in its business) existing at the time such Person becomes a Restricted Subsidiary was not incurred in connection with, or in contemplation of, such Person becoming a Restricted Subsidiary and (2) with respect to the Partnership or any Restricted Subsidiary, any Indebtedness of a Person (including, for the avoidance of doubt, Indebtedness incurred in the ordinary course of such Person’s business to acquire assets used or useful in its business), other than the Partnership or a Restricted Subsidiary, existing at the time such Person is merged with or into the Partnership or a Restricted Subsidiary, or Indebtedness expressly assumed by the Partnership or any Restricted Subsidiary in connection with the acquisition of an asset or assets from another Person, which Indebtedness was not, in any case, incurred by such other Person in connection with, or in contemplation of, such merger or acquisition.

“Affiliate” of any Person means any other Person which directly or indirectly controls is controlled by, or is under direct or indirect common control with, the referent Person. For purposes of Section 4.13, Affiliates shall be deemed to include, with respect to any Person, any other Person (1) which beneficially owns or holds, directly or indirectly, 10% or more of any class of the Voting Stock of the referent Person, (2) of which 10% or more of the Voting Stock is beneficially owned or held, directly or indirectly, by the referenced Person or (3) with respect to an individual, any immediate family member of such Person. For purposes of this definition, “control” of a Person shall mean the power to direct the management and policies of such Person, directly or indirectly, whether through the ownership of voting securities, by contract or otherwise.

“Agent” means any Registrar, Paying Agent, co-Registrar, Authenticating Agent or agent for services of notices and demands.

“amend” means to amend, supplement, restate, amend and restate or otherwise modify, including successively, and “amendment” shall have a correlative meaning.

“Applicable Premium” means, as to each Note on any applicable Redemption Date, an amount equal to the greater of

(1) 1.0% of the principal amount of such Note; and

(2) the excess, if any, of:

(a) the present value at such Redemption Date of (i) the Redemption Price of such Note at February 1,2011 (such redemption price being set forth in the table appearing in paragraph 5 of such Note) plus (ii) all required interest payments due on such Note through February 1, 2011, computed using a discount rate equal to the Treasury Rate as of such redemption date plus 50 basis points; over

(b) the principal amount of such Note.

“asset” means any asset or property.

“Asset Acquisition” means

(1) an Investment by the Partnership or any Restricted Subsidiary of the Partnership in any other Person if, as a result of such Investment, such Person shall become a Restricted Subsidiary of the Partnership, or shall be merged or consolidated with or into the Partnership any Restricted Subsidiary of the Partnership, or

(2) the acquisition by the Partnership or any Restricted Subsidiary of the Partnership of all or substantially all of the assets of any other Person (other than a Restricted Subsidiary the Partnership) or any division or line of business of any such other Person (other than in the ordinary course of business).

“Asset Sale” means any sale, issuance, conveyance, transfer, lease, assignment or other disposition by the Partnership or any Restricted Subsidiary to any Person other than the Partnership or any Restricted Subsidiary (including by means of a Sale and Leaseback Transaction or merger or consolidation or an issuance of Equity Interests by a Restricted Subsidiary) (collectively, for purposes this definition, a “transfer”), in one transaction or a series of related transactions, of any assets of the Partnership or any of its Restricted Subsidiaries other than in the ordinary course of business. For purposes of this definition, the term “Asset Sale” shall not include:

(1) transfers of cash, Cash Equivalents or Hedging Obligations;

(2) transfers of assets (including Equity Interests) that are governed by, and made accordance with, Section 4.15 or Article 5;

(3) Permitted Investments and Restricted Payments permitted under Section 4.11;

(4) the creation of or realization on any Lien permitted under this Indenture and disposition of assets resulting from the enforcement or foreclosure of any such Lien;

(5) transfers of damaged, worn-out or obsolete equipment or assets that, in the Partnership’s reasonable judgment, are no longer used or useful in the business of the Partnership or its Restricted Subsidiaries;

-2-

(6) sales or grants of licenses or sublicenses to use the patents, trade secrets, know-how and other Intellectual Property, and licenses, leases or subleases of other assets, of the Partnership or any Restricted Subsidiary to the extent not materially interfering with the business of the Partnership and its Restricted Subsidiaries, considered as a whole;

(7) issuance of Preferred Stock by a Guarantor permitted by the covenant described under Section 4.10;

(8) the trade or exchange by the Partnership or any Restricted Subsidiary of any asset for any other asset or assets; provided, that the Fair Market Value of the asset or assets received by the Partnership or any Restricted Subsidiary in such trade or exchange (including any such cash or Cash Equivalents) is at least equal to the Fair Market Value (as determined in good faith by the Board of Directors or an executive officer of the Partnership or of such Restricted Subsidiary with responsibility for such transaction) of the asset or assets disposed of by the Partnership or any Restricted Subsidiary pursuant to such trade or exchange; and, provided, further, that if any cash or Cash Equivalents are used in such trade or exchange to achieve an exchange of equivalent value, that the amount of such cash and/or Cash Equivalents shall be deemed proceeds of an “Asset Sale,” subject to the following clause (9); and

(9) any transfer or series of related transfers that, but for this clause, would be Asset Sales, if after giving effect to such transfers, the aggregate Fair Market Value of the assets transferred in such transaction or any such series of related transactions does not exceed $3.0 million per occurrence or $10.0 million in any fiscal year.

“Attributable Indebtedness”, when used with respect to any Sale and Leaseback Transaction, means at the time of determination, the present value (discounted at a rate equivalent to the Partnership’s then-current weighted average cost of funds for borrowed money as at the time of determination, compounded on a semi-annual basis) of the total obligations of the lessee for rental payments during the remaining term of the lease included in any such Sale and Leaseback Transaction.

“Board of Directors” means, with respect to any Person, (i) in the case of any corporation, the board of directors of such Person, (ii) in the case of any partnership, the Board of Directors of the general partner of such Person and (iii) in any other case, the functional equivalent of the foregoing or, in each case, other than for purposes of the definition of “Change of Control,” any duly authorized committee of such body.

“Board Resolution” means, with respect to any Person, a copy of a resolution certified by the Secretary or an Assistant Secretary of such Person to have been duly adopted by the Board of Directors of such Person and to be in full force and effect on the date of such certification, and delivered to the Trustee.

“Business Day” means a day other than a Saturday, Sunday or other day on which banking institutions in New York are authorized or required by law to close.

“Capitalized Lease” means a lease required to be capitalized for financial reporting purposes in accordance with GAAP.

-3-

“Capitalized Lease Obligations” of any Person means the obligations of such Person to pay rent or other amounts under a Capitalized Lease, and the amount of such obligation shall be the capitalized amount thereof determined in accordance with GAAP.

“Cash Equivalents” means:

(1) marketable obligations issued or directly and fully guaranteed or insured by the United States of America or any agency or instrumentality thereof (provided that the full faith and credit of the United States of America is pledged in support thereof), maturing within 360 days the date of acquisition thereof;

(2) demand and time deposits and certificates of deposit of any lender under the Credit Agreement or any commercial bank having (or which is the principal banking subsidiary of a bank holding company organized under the laws of the United States, any state thereof or District of Columbia having) capital and surplus aggregating in excess of $300.0 million and a rating of “A” (or such other similar equivalent rating) or higher by at least one nationally recognized statistical rating organization (as defined in Rule 436 under the Securities Act) maturing within 360 days of the date of acquisition;

(3) commercial paper issued by any person incorporated in the United States rated at least A-1 or the equivalent thereof by S&P or at least P-1 or the equivalent thereof by Moody’s an equivalent rating by a nationally recognized rating agency if both S&P and Moody’s cease publishing ratings of commercial paper issuers generally, and in each case maturing not more than one year after the date of acquisition;

(4) repurchase obligations with a term of not more than 30 days for underlying securities of the types described in clause (1) above entered into with any bank meeting the qualifications specified in clause (2) above;

(5) securities issued and fully guaranteed by any state, commonwealth or territory the United States of America, or by any political subdivision or taxing authority thereof, rated least “A” by Moody’s or S&P and having maturities of not more than one year from the date of acquisition;

(6) investments in money market or other mutual funds substantially all of whose assets comprise securities of the types described in clauses (1) through (5) above; and

(7) demand deposit accounts maintained in the ordinary course of business.

“Certificated Notes” means one or more certificated Notes in registered form.

“Change of Control” means the occurrence of any of the following events:

(1) the direct or indirect sale, transfer, conveyance or other disposition (other than way of merger or consolidation), in one or a series of related transactions, of all or substantially all of the properties or assets of the Issuers and their Restricted Subsidiaries, taken as a whole, to any “person” (as that term is used in Section 13(d)(3) of the Exchange Act) other than a Permitted Holder;

-4-

(2) any “person” or “group” (as such terms are used in Sections 13(d) and 14(d) of the Exchange Act), other than one or more Permitted Holders, is or becomes the beneficial owner (as defined in Rules 13d-3 and 13d-5 under the Exchange Act, except that for purposes of this clause that person or group shall be deemed to have “beneficial ownership” of all securities that any such person or group has the right to acquire, whether such right is exercisable immediately or only after the passage of time), directly or indirectly, of Voting Stock of Oilfield Holdings GP representing 50% or more of the voting power of the total outstanding Voting Stock of Oilfield Holdings GP (or, following the conversion of the Partnership or Oilfield Holdings into another form as described below, 50% or more of the total outstanding Voting Stock of the successor entity);

(3) during any period of two consecutive years, individuals who at the beginning of such period constituted the Board of Directors of Oilfield Holdings GP (together with any new directors whose election to such Board of Directors of Oilfield Holdings GP or whose nomination for election by the interest holders of Oilfield Holdings GP was approved by a vote of 66 2/3% the directors of Oilfield Holdings GP then still in office who were either directors at the beginning of such period or whose election or nomination for election was previously so approved) cease for any reason to constitute a majority of the Board of Directors of Oilfield Holdings GP (or, following the conversion of the Partnership or Oilfield Holdings into corporate form, substituting the Board of Directors of such corporation for the Board of Directors of Oilfield Holdings GP for purposes of this clause (3)); and

(4) the adoption by the General Partner or the Partnership’s interest holders of a Plan of Liquidation with respect to the Partnership (or any successor following a conversion of the Partnership as described below).

For purposes of this definition, a Person shall not be deemed to have beneficial ownership of securities subject to a stock purchase agreement, merger agreement or similar agreement until the consummation of the transactions contemplated by such agreement.

Notwithstanding the preceding, a conversion (whether by merger, asset transfer, statutory conversion or otherwise) of either Oilfield Holdings or the Partnership from a limited partnership to a corporation, limited liability company or other form of entity or an exchange of all of the outstanding limited partnership interests for Capital Stock in a corporation, for member interests in a limited company or for Equity Interests in such other form of entity shall not constitute a Change of Control, so long as following such conversion or exchange the “persons” (as defined in clause (2) above) who beneficially owned the Equity Interests of Oilfield Holdings GP or the Partnership, as the case may be, immediately prior to such transactions continue to beneficially own in the aggregate more than 50% of Voting Stock of such entity, or continue to beneficially own sufficient Equity Interests in such entity to elect a majority of its directors, managers, trustees or other persons serving in a similar capacity for such entity, and, in either case no “person,” excluding any Permitted Holder, beneficially owns more than 50% of the Voting Stock of such entity.

“Consolidated Amortization Expense” for any period means the amortization expense the Partnership and the Restricted Subsidiaries for such period, determined on a consolidated basis in accordance with GAAP.

“Consolidated Cash Flow” for any period means, without duplication, the sum of the amounts for such period of

-5-

(1) Consolidated Net Income, plus

(2) in each case only to the extent (and in the same proportion) deducted in determining Consolidated Net Income and with respect to the portion of Consolidated Net Income attributable to any Restricted Subsidiary only if a corresponding amount would be permitted at the date of determination to be distributed to the Partnership by such Restricted Subsidiary without prior approval (that has not been obtained), pursuant to the terms of its and all agreements, instruments, judgments, decrees, orders, statutes, rules and governmental regulations applicable to such Restricted Subsidiary or its stockholders,

(a) Consolidated Income Tax Expense,

(b) Consolidated Amortization Expense (but only to the extent not included in Consolidated Interest Expense),

(c) Consolidated Depreciation Expense,

(d) Consolidated Interest Expense,

(e) all other non-cash items reducing the Consolidated Net Income (excluding any non-cash charge that results in an accrual of a reserve for cash charges in any future period) for such period, and

(f) payments made to or on behalf of Oilfield Holdings to pay annual fees to Carlyle/Riverstone Energy Partners II, L.P. or its affiliates not to exceed those required by the Oilfield Holdings Partnership Agreement as in effect on the Issue Date;

in each case determined on a consolidated basis in accordance with GAAP, minus

(3) the aggregate amount of all non-cash items, determined on a consolidated basis (excluding revenue accrued in the ordinary course of business and the reversal of a reserve to extent the creation or increase of such reserve was excluded from the adjustment in clause (e) above), to the extent such items increased Consolidated Net Income for such period.

“Consolidated Depreciation Expense” for any period means the depreciation expense of the Partnership and the Restricted Subsidiaries for such period, determined on a consolidated basis in accordance with GAAP.

“Consolidated Income Tax Expense” for any period means the provision for taxes based on income or profits (for any period in which the Partnership is a partnership and without duplication) or the Tax Amount of the Partnership and the Restricted Subsidiaries for such period, determined on a consolidated basis in accordance with GAAP.

“Consolidated Interest Coverage Ratio” means the ratio of Consolidated Cash Flow during the most recent four consecutive full fiscal quarters for which financial statements are available (the “Four-Quarter Period”) ending on or prior to the date of the transaction giving rise to the need to calculate the Consolidated Interest Coverage Ratio (the “Transaction Date”) to Consolidated Interest Expense for the Four-Quarter Period. For purposes of this definition, Consolidated Cash Flow and Consolidated Interest Expense shall be calculated after giving effect on a pro forma basis for the period such calculation to:

(1) the incurrence of any Indebtedness or the issuance of any Preferred Stock of the Partnership or any Restricted Subsidiary (and the application of the proceeds thereof) and any repayment, repurchase or redemption of other Indebtedness or other Preferred Stock (and the application of the proceeds therefrom) (other than the incurrence or repayment of Indebtedness incurred in the ordinary course of business for working capital purposes pursuant to any credit arrangement) occurring during the Four-Quarter Period or at any time subsequent to the day of the Four-Quarter Period and on or prior to the Transaction Date, as if such incurrence, repayment, repurchase, issuance or redemption, as the case may be (and the application of the proceeds thereof), occurred on the first day of the Four-Quarter Period; and

-6-

(2) any Asset Sale or Asset Acquisition (including, without limitation, any Asset Acquisition giving rise to the need to make such calculation as a result of the Partnership or Restricted Subsidiary (including any Person who becomes a Restricted Subsidiary as a result of such Asset Acquisition) incurring Acquired Indebtedness and also including any Consolidated Cash Flow (including any pro forma expense and cost reductions calculated in good faith on a reasonable basis by a responsible financial or accounting Officer of the Partnership) occurring during the Four-Quarter Period or at any time subsequent to the last day of the Four-Quarter Period and on or prior to the Transaction Date), as if such Asset Sale or Asset Acquisition (including the incurrence of, or assumption of liability for, any such Indebtedness or Acquired Indebtedness) occurred on the first day of the Four-Quarter Period; provided, that the Officer making the pro forma calculation described above may in his discretion include any pro forma changes to Consolidated Cash Flow, including any pro forma reductions of expenses and costs, that have occurred or are reasonably expected by such Officer to occur within one year of closing of such Asset Sale or Asset Acquisition (regardless of whether such expense or cost savings or any other operating improvements could then be reflected properly in pro forma financial statements prepared in accordance with Regulation S-X under the Securities Act or any other regulation or policy of the SEC).

If the Partnership or any Restricted Subsidiary directly or indirectly guarantees Indebtedness of a third Person, the preceding sentence shall give effect to the incurrence of such guaranteed Indebtedness as if the Partnership or such Restricted Subsidiary had directly incurred or otherwise assumed such guaranteed Indebtedness.

In calculating Consolidated Interest Expense for purposes of determining the denominator (but not the numerator) of this Consolidated Interest Coverage Ratio:

(1) interest on outstanding Indebtedness determined on a fluctuating basis as of the Transaction Date and which will continue to be so determined thereafter shall be deemed to have accrued at a fixed rate per annum equal to the rate of interest on such Indebtedness in effect on the Transaction Date;

(2) if interest on any Indebtedness actually incurred on the Transaction Date may optionally be determined at an interest rate based upon a factor of a prime or similar rate, a eurocurrency interbank offered rate, or other rates, then the interest rate in effect on the Transaction Date will be deemed to have been in effect during the Four-Quarter Period; and

(3) notwithstanding clause (1) or (2) above, interest on Indebtedness determined on fluctuating basis, to the extent such interest is covered by agreements relating to Hedging Obligations, shall be deemed to accrue at the rate per annum resulting after giving effect to the operation of these agreements.

-7-

“Consolidated Interest Expense” for any period means the sum, without duplication, of the total interest expense of the Partnership and the Restricted Subsidiaries for such period, determined on a consolidated basis in accordance with GAAP (but excluding amortization of debt issuance costs) and including, without duplication,

(1) imputed interest on Capitalized Lease Obligations and Attributable Indebtedness,

(2) commissions, discounts and other fees and charges owed with respect to letters of credit securing financial obligations, bankers’ acceptance financing and receivables financings,

(3) the net costs associated with Hedging Obligations related to interest rates,

(4) the interest portion of any deferred payment obligations,

(5) all other non-cash interest expense,

(6) capitalized interest,

(7) all dividend or distribution payments on any series of Disqualified Equity Interests of the Partnership or any of its Restricted Subsidiaries or any Preferred Stock of any Restricted Subsidiary (other than dividends or distributions on Equity Interests payable solely in Qualified Equity Interests of the Partnership or to the Partnership or a Restricted Subsidiary of the Partnership),

(8) all interest payable with respect to discontinued operations, and

(9) all interest on any Indebtedness described in clause (7) or (8) of the definition of Indebtedness.

“Consolidated Net Income” for any period means the net income (or loss) of the Issuers and the Restricted Subsidiaries (excluding the net income (or loss) of any Unrestricted Subsidiary) for such period determined on a consolidated basis in accordance with GAAP, less (for any period the Partnership is a partnership and without duplication) the Tax Amount of the Partnership for such period; provided that there shall be excluded from such net income (to the extent otherwise included therein), without duplication:

(1) the net income (or loss) of any Person (other than a Restricted Subsidiary) in which any Person other than the Partnership and the Restricted Subsidiaries has an ownership interest, except to the extent that cash in an amount equal to any such income has actually been received by the Partnership or any of its Restricted Subsidiaries during such period;

(2) except to the extent includible in the Consolidated Net Income of the Partnership pursuant to the foregoing clause (1), the net income (or loss) of any Person that accrued prior to the date that (a) such Person becomes a Restricted Subsidiary or is merged into or consolidated with the Partnership or any Restricted Subsidiary or (b) the assets of such Person are acquired by the Partnership or any Restricted Subsidiary;

-8-

(3) the net income of any Restricted Subsidiary during such period to the extent that the declaration or payment of dividends or similar distributions by such Restricted Subsidiary that of income is not permitted by operation of the terms of its charter or any agreement, instrument, judgment, decree, order, statute, rule or governmental regulation applicable to that Subsidiary during such period, except that the Partnership’s equity in a net loss of any such Restricted Subsidiary for such period shall be included in determining Consolidated Net Income;

(4) for the purposes of calculating the Restricted Payments Basket only, in the case of a successor to the Partnership by consolidation, merger or transfer of its assets, any income (or loss) of the successor prior to such merger, consolidation or transfer of assets;

(5) other than for purposes of calculating the Restricted Payments Basket, any gain (or loss), together with any related provisions for taxes (and, without duplication, any related Permitted Tax Distributions) with respect to any such gain (or the tax effect of any such loss), realized during such period by the Partnership or any Restricted Subsidiary upon (a) the acquisition of any securities, or the extinguishment of any Indebtedness, of the Partnership or any Restricted Subsidiary or (b) any Asset Sale by the Partnership or any Restricted Subsidiary;

(6) gains and losses due solely to fluctuations in currency values and the related tax effects according to GAAP;

(7) unrealized gains and losses with respect to Hedging Obligations;

(8) the cumulative effect of any change in accounting principles;

(9) earnings resulting from any reappraisal, revaluation, or write-up of assets; and

(10) other than for purposes of calculating the Restricted Payments Basket, any extraordinary or nonrecurring gain (or extraordinary or nonrecurring loss), together with any related provision for taxes (and, without duplication, any related Permitted Tax Distributions) with respect to any such extraordinary or nonrecurring gain (or the tax effect of any such extraordinary or nonrecurring loss), realized by the Partnership or any Restricted Subsidiary during such period.

In addition, any return of capital with respect to an Investment that increased the Restricted Payments Basket pursuant to clause (3)(d) of clause (a) of Section 4.11 or decreased the amount of Investments outstanding pursuant to clauses (16) or (17) of the definition of “Permitted Investments” shall be excluded from Consolidated Net Income for purposes of calculating the Restricted Payments Basket.

For purposes of this definition of “Consolidated Net Income,” “nonrecurring” means any gain or loss as of any date that is not reasonably likely, in the reasonable judgment of the Chief Financial Officer of the Partnership, to recur within the two years following such date; provided, that if there was again or loss similar to such gain or loss within the two years preceding such date, such gain or loss not be deemed nonrecurring.

“Consolidated Tangible Assets” means, with respect to any Person as of any date, the amount which, measured as of the most recent date for which internal financial statements are available in accordance with GAAP, would be set forth under the caption “Total Assets” (or any like caption) on a

-9-

consolidated balance sheet of such Person and its Restricted Subsidiaries, less all goodwill, Intellectual Property, franchises, experimental expenses, organization expenses and any other amounts classified as intangible assets in accordance with GAAP.

“Contingent Obligation” shall mean, as to any Person, any obligation, agreement, understanding or arrangement of such Person guaranteeing or intended to guarantee any Indebtedness, leases, dividends or other obligations (“primary obligations”) of any other Person (the “primary obligor”) in any manner, whether directly or indirectly, including, without limitation, any obligation of such Person, whether or not contingent, (a) to purchase any such primary obligation or any property constituting direct or indirect security therefor; (b) to advance or supply funds (i) for the purchase or payment of any such primary obligation or (ii) to maintain working capital or equity capital of the primary obligor or otherwise to maintain the net worth or solvency of the primary obligor; (c) to purchase property, securities or services primarily for the purpose of assuring the owner of any such primary obligation of the ability of the primary obligor to make payment of such primary obligation; (d) with respect to bankers’ acceptances and letters of credit, until a reimbursement obligation arises (which obligation shall constitute Indebtedness); or (e) otherwise to assure or hold harmless the holder of such primary obligation against loss in respect thereof; provided, however, that the term “Contingent Obligation” shall not include endorsements of instruments for deposit or collection in the ordinary course of business or any product warranties for deposit or collection in the ordinary course of business. The amount of any Contingent Obligation shall be deemed to be an amount equal to the stated or determinable amount of the primary obligation in respect of which such Contingent Obligation is made (or, if less, the maximum amount of such primary obligation for which such Person may be liable, whether severally or jointly, pursuant to the terms of the instrument evidencing such Contingent Obligation) or, if not stated or determinable, the maximum reasonably anticipated liability in respect thereof (assuming such person is required to perform thereunder) as determined by such person in good faith.

“Corporate Trust Office” means the office of the Trustee at which at any particular time its corporate trust business shall be principally administered in Houston, Texas, which office at the date of execution of this Indenture is located at 601 Travis Street, 18^th Floor, Houston, TX 77002.

“Coverage Ratio Exception” has the meaning set forth in the proviso in clause (a) of Section 4.10.

“Credit Agreement” means the Second Amended and Restated Credit Agreement dated as of January 24, 2007, among the Partnership, as borrower, Stallion Oilfield Holdings, Ltd., Stallion Interests, LLC, and the other guarantors party thereto, as guarantors, UBS Securities LLC and Banc of America Securities LLC, as joint lead arrangers and joint bookmanagers, UBS AG, Stamford Branch, as issuing bank, administrative agent and collateral agent, UBS Loan Finance LLC, as swingline lender, Amegy Bank National Association, as syndication agent, Natexis Banques Populaires, as documentation agent, and the lenders named therein, including any notes, guarantees, collateral and security documents, instruments and agreements executed in connection therewith (including Hedging Obligations related to the Indebtedness incurred thereunder), and in each case as further amended or refinanced from time to time.

“Credit Facilities” means one or more debt facilities (which may be outstanding at the same time and including, without limitation, the Credit Agreement) providing for revolving credit loans, term loans or letters of credit and, in each case, as such agreements may be amended, refinanced or otherwise restructured, in whole or in part from time to time (including increasing the amount of available borrowings thereunder or adding Restricted Subsidiaries of the Partnership as additional borrowers or

-10-

guarantors thereunder) with respect to all or any portion of the Indebtedness under such agreement or agreements or any successor or replacement agreement or agreements and whether by the same or any other agent, lender or group of lenders.

“Default” means (1) any Event of Default or (2) any event, act or condition that, after notice or the passage of time or both, would be an Event of Default.

“Depository” means, with respect to the Notes issued in the form of one or more Global Notes, The Depository Trust Company or another Person designated as Depository by the Partnership, which Person must be a clearing agency registered under the Exchange Act.

“Designation” has the meaning given to this term in Section 4.19.

“Designation Amount” has the meaning given to this term in the covenant described under Section 4.19.

“Disqualified Equity Interests” of any Person means any class of Equity Interests of such Person that, by its terms, or by the terms of any related agreement or of any security into which it is convertible, puttable or exchangeable (in each case, at the option of the holder thereof), is, or upon the happening of any event or the passage of time would be, required to be redeemed by such Person, at the option of the holder thereof, or matures or is mandatorily redeemable, pursuant to a sinking fund obligation or otherwise, in whole or in part, on or prior to the date which is 91 days after the final maturity date of the Notes; provided, however, that any class of Equity Interests of such Person that, by its terms, authorizes such Person to satisfy in full its obligations with respect to the payment of dividends or upon final maturity, redemption (pursuant to a sinking fund or otherwise) or repurchase thereof or otherwise by the delivery of Equity Interests that are not Disqualified Equity Interests, and that is not convertible, puttable or exchangeable for Disqualified Equity Interests or Indebtedness, will not be deemed to be Disqualified Equity Interests so long as such Person satisfies its obligations with respect thereto solely by the delivery of Equity Interests that are not Disqualified Equity Interests; provided, further, however, that any Equity Interests that would not constitute Disqualified Equity Interests but for provisions thereof giving holders thereof (or the holders of any security into or for which such Equity Interests are convertible, exchangeable or exercisable) the fight to require the Partnership to repurchase or redeem such Equity Interests upon the occurrence of a change in control or an asset sale occurring prior to the 91st day after the final maturity date of the Notes shall not constitute Disqualified Equity Interests if the change of control or asset sale provisions applicable to such Equity Interests are no more favorable to such holders than the provisions of Section 4.15 and Section 4.12, respectively, and such Equity Interests specifically provide that the Partnership will not repurchase or redeem any such Equity Interests pursuant to such provisions prior to the Partnership’s purchase of the Notes as required pursuant to the provisions of Section 4.15 and Section 4.12, respectively.

“Domestic Restricted Subsidiary” means each Restricted Subsidiary of the Partnership, other than Finance Corp., organized or existing under the laws of the United States, any state thereof or the District of Columbia.

“Earn Out Obligation” means those contingent obligations of the Partnership incurred in favor of a seller (or other third party entitled thereto) under or with respect to any Permitted Acquisition (as such term is defined in the Credit Agreement as of the Issue Date).

-11-

“Equity Interests” of any Person means (1) any and all shares or other equity interests (including common stock, Preferred Stock, limited liability company interests and partnership interests) in such Person and (2) all rights to purchase, warrants or options (whether or not currently exercisable), participations or other equivalents of or interests in (however designated) such shares or other interests in such Person, but excluding from all of the foregoing any debt securities convertible into Equity Interests, regardless of whether such debt securities include any fight of participation with Equity Interests.

“Exchange Act” means the U.S. Securities Exchange Act of 1934, as amended.

“Fair Market Value” means, with respect to any asset, the price (after taking into account any liabilities relating to such assets) that would be negotiated in an arm’s-length transaction for cash between a willing seller and a willing and able buyer, neither of which is under any compulsion to complete the transaction, as such price is determined (unless otherwise provided in this Indenture) in good faith by (a) an Officer of the Partnership if the value is less than $15.0 million or (b) the Board of Directors of the Partnership or a duly authorized committee thereof if the value is $15.0 million or more, as evidenced by a resolution of such Board of Directors or committee.

“Foreign Restricted Subsidiary” means any Restricted Subsidiary of the Partnership other than a Domestic Restricted Subsidiary.

“GAAP” means generally accepted accounting principles set forth in the opinions and pronouncements of the Accounting Principles Board of the American Institute of Certified Public Accountants and statements and pronouncements of the Financial Accounting Standards Board or in such other statements by such other entity as may be approved by a significant segment of the accounting profession of the United States, as in effect from time to time.

“General Partner” means Stallion Interests and its successors and permitted assigns as general partner of the Partnership.

“guarantee” means a direct or indirect guarantee by any Person of any Indebtedness of any other Person and includes any obligation, direct or indirect, contingent or otherwise, of such Person (1) to purchase or pay (or advance or supply funds for the purchase or payment of) Indebtedness of such other Person (whether arising by virtue of partnership arrangements, or by agreements to keep-well, to purchase assets, goods, securities or services (unless such purchase arrangements are on arm’s-length terms and are entered into in the ordinary course of business), to take-or-pay, or to maintain financial statement conditions or otherwise); or (2) entered into for purposes of assuring in any other manner the obligee of such Indebtedness of the payment thereof or to protect such obligee against loss in respect thereof (in whole or in part); “guarantee,” when used as a verb, and “guaranteed” have correlative meanings.

“Guarantors” means each Domestic Restricted Subsidiary of the Partnership on the Issue Date (excluding Finance Corp.), and each other Person that is required to, or at the election of the Partnership does, become a Guarantor by the terms of this Indenture after the Issue Date, in each case, until such Person is released from its Note Guarantee in accordance with the terms of this Indenture.

“Hedging Obligations” of any Person means the obligations of such Person under swap, cap, collar, forward purchase or similar agreements or arrangements dealing with interest rates, currency exchange rates or commodity prices, either generally or under specific contingencies.

-12-

“Holder” means a Person in whose name a Note is registered in the Registrar’s securities register.

“Holdings” means, collectively, Stallion Interests and Oilfield Holdings.

“incur” means, with respect to any Indebtedness or Obligation, incur, create, issue, assume, guarantee or otherwise become directly or indirectly liable, contingently or otherwise, with respect to such Indebtedness or Obligation; provided that (1) the Indebtedness of a Person existing at the time such Person became a Restricted Subsidiary of the Partnership shall be deemed to have been incurred by such Restricted Subsidiary at the time it becomes a Restricted Subsidiary of the Partnership and (2) neither the accrual of interest nor the accretion of original issue discount or the accretion or accumulation of dividends on any Equity Interests shall be deemed to be an incurrence of Indebtedness.

“Indebtedness” of any Person at any date means, without duplication:

(1) all liabilities, contingent or otherwise, of such Person for borrowed money (whether or not the recourse of the lender is to the whole of the assets of such Person or only to a portion thereof);

(2) all obligations of such Person evidenced by bonds, debentures, notes or other similar instruments;

(3) all reimbursement obligations of such Person in respect of letters of credit, letters of guaranty, bankers’ acceptances and similar credit transactions;

(4) all obligations of such Person to pay the deferred and unpaid purchase price of property or services, except trade payables and accrued expenses incurred by such Person in the ordinary course of business in connection with obtaining goods, materials or services;

(5) the maximum fixed redemption or repurchase price of all Disqualified Equity Interests of such Person;

(6) all Capitalized Lease Obligations and Attributable Indebtedness of such Person;

(7) all Indebtedness of others secured by a Lien on any asset of such Person, whether or not such Indebtedness is assumed by such Person;

(8) all Indebtedness of others guaranteed by such Person to the extent of such guarantee; provided that Indebtedness of the Partnership or its Subsidiaries that is guaranteed by the Partnership or the Partnership’s Subsidiaries shall only be counted once in the calculation of the amount of Indebtedness of the Partnership and its Subsidiaries on a consolidated basis;

(9) to the extent not otherwise included in this definition, Hedging Obligations of such Person;

(10) all obligations of such Person under conditional sale or other title retention agreements relating to assets purchased by such Person; and

-13-

(11) all Contingent Obligations (other than Earn Out Obligations) of such Person in respect of Indebtedness or obligations of others of the kinds referred to in clauses (1) through (10) above.

The amount of any Indebtedness which is incurred at a discount to the principal amount at maturity thereof as of any date shall be deemed to have been incurred at the accreted value thereof as of such date. The amount of Indebtedness of any Person at any date shall be the outstanding balance at such date of all unconditional obligations as described above, the maximum liability of such Person for any such Contingent Obligations at such date and, in the case of clause (7), the lesser of (a) the Fair Market Value of any asset subject to a Lien securing the Indebtedness of others on the date that the Lien attaches and (b) the amount of the Indebtedness secured. For purposes of clause (5), the “maximum fixed redemption or repurchase price” of any Disqualified Equity Interests that do not have a fixed redemption or repurchase price shall be calculated in accordance with the terms of such Disqualified Equity Interests as if such Disqualified Equity Interests were redeemed or repurchased on any date on which an amount of Indebtedness outstanding shall be required to be determined pursuant to this Indenture.

“Indenture” means this Indenture as amended, restated or supplemented from time to time.

“Initial Notes” has the meaning provided in the preamble to this Indenture.

“Institutional Accredited Investor” means an institution that is an “accredited investor” as that term is defined in Rule 501(a)(1), (2), (3) or (7) promulgated under the Securities Act.

“Intellectual Property” means all patents, patent applications, trademarks, trade names, service marks, copyrights, technology, trade secrets, proprietary information, domain names, know how and processes necessary for the conduct of the Partnership’s or any Restricted Subsidiary’s business.

“Interest Payment Date” means the stated maturity of an installment of interest on the Notes.

“Investments” of any Person means:

(1) all direct or indirect investments by such Person in any other Person in the form of loans, advances or capital contributions or other credit extensions constituting Indebtedness of such other Person, and any guarantee of Indebtedness of any other Person;

(2) all purchases (or other acquisitions for consideration) by such Person of Indebtedness, Equity Interests or other securities of any other Person (other than any such purchase that constitutes a Restricted Payment of the type described in clause (2) of the definition thereof);

(3) all other items that would be classified as investments on a balance sheet of such Person prepared in accordance with GAAP (including, if required by GAAP, purchases of assets outside the ordinary course of business); and

(4) the Designation of any Subsidiary as an Unrestricted Subsidiary.

Except as otherwise expressly specified in this definition, the amount of any Investment (other than an Investment made in cash) shall be the Fair Market Value thereof on the date such

-14-

Investment is made. The amount of Investment pursuant to clause (4) shall be the Designation Amount determined in accordance with Section 4.19. If the Partnership or any Restricted Subsidiary sell or otherwise disposes of any Equity Interests of any Restricted Subsidiary, or any Restricted Subsidiary issues any Equity Interests, in either case, such that, after giving effect to any such sale or disposition, such Person is no longer a Subsidiary, the Partnership shall be deemed to have made an Investment on the date of any such sale or other disposition equal to the Fair Market Value of the Equity Interests of and all other Investments in such Restricted Subsidiary retained. Notwithstanding the foregoing, purchases or redemptions of Equity Interests of the Partnership shall be deemed not to be Investments.

“Issue Date” means the earliest date on which the Notes are originally issued.

“Lien” means, with respect to any asset, any mortgage, deed of trust, lien (statutory or other), pledge, lease, easement, restriction, covenant, charge, security interest or other encumbrance of any kind or nature in respect of such asset, whether or not filed, recorded or otherwise perfected under applicable law, including any conditional sale or other title retention agreement, and any lease in the nature thereof, any option or other agreement to sell, and any filing of, or agreement to give, any financing statement under the Uniform Commercial Code (or equivalent statutes) of any jurisdiction (other than cautionary filings in respect of operating leases).

“Maturity Date” means February 1, 2015.

“Moody’s” means Moody’s Investors Service, Inc. and its successors.

“Net Available Proceeds” means, with respect to any Asset Sale, the proceeds thereof in the form of cash or Cash Equivalents received by the Partnership or any of its Restricted Subsidiaries from such Asset Sale, net of

(1) brokerage commissions and other fees and expenses (including fees, discounts and expenses of legal counsel, accountants and investment banks, consultants and placement agents) of such Asset Sale;

(2) provisions for taxes or Permitted Tax Distributions paid or payable as a result of such Asset Sale (after taking into account any available tax credits or deductions and any tax sharing arrangements);

(3) amounts required to be paid to any Person (other than the Partnership or any Restricted Subsidiary and other than under a Credit Facility) owning a beneficial interest in the assets subject to the Asset Sale or having a Lien thereon;

(4) payments of unassumed liabilities (not constituting Indebtedness) relating to the assets sold at the time of, or within 30 days after the date of, such Asset Sale; and

(5) appropriate amounts to be provided by the Partnership or any Restricted Subsidiary, as the case may be, as a reserve required in accordance with GAAP against any adjustment in the sale price of such asset or assets or liabilities associated with such Asset Sale and retained by the Partnership or any Restricted Subsidiary, as the case may be, after such Asset Sale, including pensions and other postemployment benefit liabilities, liabilities related to environmental matters and liabilities under any indemnification obligations associated with such Asset Sale; provided, however, that any amounts remaining after adjustments, revaluations or liquidations of such reserves shall constitute Net Available Proceeds.

-15-

“Non-Recourse Debt” means Indebtedness of an Unrestricted Subsidiary:

(1) as to which neither the Partnership nor any Restricted Subsidiary (a) provides credit support of any kind (including any undertaking, agreement or instrument that would constitute Indebtedness), (b) is directly or indirectly liable as a guarantor or otherwise, or (c) constitutes the lender; and

(2) no default with respect to which (including any rights that the holders thereof may have to take enforcement action against an Unrestricted Subsidiary) would permit upon notice, lapse of time or both any holder of any other Indebtedness (other than the Credit Agreement or Notes) of the Partnership or any Restricted Subsidiary to declare a default on the other Indebtedness or cause the payment thereof to be accelerated or payable prior to its stated maturity.

“Note Guarantee” means the guarantee by each Guarantor of the obligations of the Issuers with respect to the Notes.

“Notes” means the Initial Notes and any Additional Notes treated as a single class of securities, as amended or supplemented from time to time in accordance with the terms hereof, that are issued pursuant to this Indenture.

“Obligation” means any principal, interest, penalties, fees, indemnification, reimbursements, costs, expenses, damages and other liabilities payable under the documentation governing any Indebtedness.

“Offering” means the offering of $300 million aggregate principal amount of Initial Notes by the Issuers pursuant to the Offering Memorandum.

“Offering Memorandum” means the Final Offering Memorandum dated January 19, 2007 relating to the offering of $300 million of Notes.

“Officer” means any of the following of the Partnership (or, so long as the Partnership is a partnership, the General Partner): the Chairman of the Board of Directors, the Chief Executive Officer, the Chief Financial Officer, the President, any Vice President, the Treasurer or the Secretary.

“Officers’ Certificate” means a certificate signed by two Officers.

“Oilfield Holdings” means Stallion Oilfield Holdings, Ltd., a Texas limited partnership.

“Oilfield Holdings GP” means Stallion Oilfield Holdings GP, LLC, a Texas limited liability company, and its successors and permitted assigns as general partner of Oilfield Holdings.

“Oilfield Holdings Partnership Agreement” means the limited partnership agreement of Oilfield Holdings.

“Opinion of Counsel” means a written opinion from legal counsel who and which is acceptable to the Trustee complying with the requirements of this Indenture.

-16-

“Pari Passu Indebtedness” means any Indebtedness of the Partnership or any Guarantor that ranks pari passu in right of payment with the Notes or the Note Guarantees, as applicable.

“Permitted Business” means the businesses engaged in by the Partnership and its Subsidiaries on the Issue Date as described in the Offering Memorandum and businesses that are reasonably related thereto or reasonable extensions thereof.

“Permitted Holder” means each of C/R Stallion Investment Partnership, L.P., CiR Energy Coinvestment II, L.P., Riverstone Holdings LLC, The Carlyle Group and Craig M. Johnson and any of their respective Affiliates.

“Permitted Investment” means:

(1) Investments by the Partnership or any Restricted Subsidiary in (a) any Restricted Subsidiary or (b) any Person that will become immediately after such Investment a Restricted Subsidiary or that will merge or consolidate into the Partnership or any Restricted Subsidiary;

(2) Investments in the Partnership by any Restricted Subsidiary;

(3) loans and advances to directors, employees and officers of the Partnership (or, so long as the Partnership is a partnership, the General Partner) and the Restricted Subsidiaries (i) in the ordinary course of business (including payroll, travel and entertainment related advances) and (ii) to purchase Equity Interests of the Partnership not in excess of $2.0 million at any one time outstanding;

(4) Hedging Obligations entered into for bona fide hedging purposes of the Partnership or any Restricted Subsidiary and not for the purpose of speculation;

(5) Investments in cash and Cash Equivalents;

(6) receivables owing to the Partnership or any Restricted Subsidiary if created or acquired in the ordinary course of business and payable or dischargeable in accordance with customary trade terms; provided, however, that such trade terms may include such concessionary trade terms as the Partnership or any such Restricted Subsidiary deems reasonable under the circumstances;

(7) Investments in securities of trade creditors or customers received pursuant to any plan of reorganization or similar arrangement upon the bankruptcy or insolvency of such trade creditors or customers;

(8) Investments made by the Partnership or any Restricted Subsidiary as a result of consideration received in connection with an Asset Sale made in compliance with Section 4.12;

(9) lease, utility and other similar deposits in the ordinary course of business;

(10) Investments made by the Partnership or a Restricted Subsidiary for consideration consisting only of Qualified Equity Interests of the Partnership;

-17-

(11) stock, obligations or securities received in settlement of debts created in the ordinary course of business and owing to the Partnership or any Restricted Subsidiary or in satisfaction of judgments;

(12) Investments owned by any Person at the time it becomes a Restricted Subsidiary not made in contemplation of the acquisition of such Person;

(13) Investments existing on the Issue Date;

(14) repurchases of, or other Investments in, the Notes;

(15) advances, deposits and prepayments for purchases of any assets otherwise permitted to be purchased under this Indenture, including any Equity Interests;

(16) Investments by the Partnership or any Restricted Subsidiary in any Unrestricted Subsidiary organized under non-U.S. law (measured on the date each such Investment was made and without giving effect to subsequent changes in value), when taken together with all other Investments made pursuant to this clause (16) since the Issue Date, not to exceed $25 million; and

(17) other Investments in any Person having an aggregate Fair Market Value (measured on the date each such Investment was made and without giving effect to subsequent changes in value), when taken together with all other Investments made pursuant to this clause (17) since the Issue Date, not to exceed the greater of (a) $15.0 million or (b) 5.0% of the Partnership’s Consolidated Tangible Assets.

In determining whether any Investment is a Permitted Investment, the Partnership may allocate or reallocate all or any portion of an Investment among the clauses of this definition and any of the provisions of Section 4.11.

“Permitted Liens” means the following types of Liens:

(1) Liens (i) imposed by law or deposits made in connection therewith in the ordinary course of business in connection with workers’ compensation, unemployment insurance and other types of social security, (ii) incurred in the ordinary course of business to secure the performance of tenders, statutory obligations (other than excise taxes), surety, stay, customs and appeal bonds, statutory bonds, bids, leases, government contracts, trade contracts, performance and return of money bonds and other similar obligations (exclusive of obligations for the payment of borrowed money) or (iii) arising by virtue of deposits made in the ordinary course of business to secure liability for premiums to insurance carriers;

(2) Liens upon specific items of inventory or other goods and proceeds of any Person securing such Person’s obligations in respect of bankers’ acceptances issued or created for the account of such Person to facilitate the purchase, shipment or storage of such inventory or other goods;

(3) Liens arising out of judgments or awards not resulting in a Default or an Event of Default;

-18-

(4) Liens securing reimbursement obligations with respect to commercial letters of credit which encumber documents and other assets relating to such letters of credit and products and proceeds thereof;

(5) Liens encumbering deposits made to secure obligations arising from statutory, regulatory, contractual or warranty requirements of the Partnership or any Restricted Subsidiary, including rights of offset and setoff;

(6) bankers’ Liens, rights of setoff and other similar Liens existing solely with respect to cash and Cash Equivalents on deposit in one or more of accounts maintained by the Partnership or any Restricted Subsidiary, in each case granted in the ordinary course of business in favor of the bank or banks with which such accounts are maintained, securing amounts owing to such bank with respect to cash management and operating account arrangements, including those involving pooled accounts and netting arrangements;

(7) Liens securing all of the Notes and Liens securing any Note Guarantee;

(8) Liens securing Hedging Obligations entered into for bona fide hedging purposes of the Partnership or any Restricted Subsidiary and not for the purpose of speculation;

(9) Liens existing on the Issue Date securing Indebtedness outstanding on the Issue Date (other than Indebtedness under the Credit Agreement); provided that (i) the aggregate principal amount of the Indebtedness, if any, secured by such Liens does not increase; and (ii) such Liens do not encumber any assets other than the assets subject thereto on the Issue Date;

(10) Liens in favor of the Partnership or a Guarantor;

(11) Liens securing Indebtedness under the Credit Facilities incurred and then outstanding pursuant to Section 4.10(b)(1);

(12) Liens arising pursuant to Purchase Money Indebtedness incurred pursuant to Section 4.10(b)(7); provided that any such Liens attach only to the assets being financed pursuant to such Purchase Money Indebtedness and do not encumber any other assets of the Partnership or any Restricted Subsidiary;

(13) Liens securing Acquired Indebtedness permitted to be incurred under this Indenture; provided that the Liens do not extend to assets not subject to such Lien at the time of acquisition (other than improvements thereon and replacements thereof) and are no more favorable to the lienholders than those securing such Acquired Indebtedness prior to the incurrence of such Acquired Indebtedness by the Partnership or a Restricted Subsidiary;

(14) Liens on assets of a Person existing at the time such Person is acquired or merged with or into or consolidated with the Partnership or any Restricted Subsidiary (and not created in anticipation or contemplation thereof); provided that such Liens do not extend to assets not subject to such Liens at the time of acquisition (other than improvements thereon and replacements thereof);

(15) Liens to secure Refinancing Indebtedness of Indebtedness secured by Liens referred to in the foregoing clauses (7), (9), (11), (12), (13) and (14); provided that in the case of Liens securing Refinancing Indebtedness of Indebtedness secured by Liens referred to in the foregoing clauses (7), (9), (11), (12), (13) and (14), such Liens do not extend to any additional assets (other than improvements thereon and replacements thereof);

-19-

(16) Liens on assets of any Foreign Restricted Subsidiary to secure Indebtedness of such Foreign Restricted Subsidiary, which Indebtedness is permitted by this Indenture, and Liens on and pledges of the Equity Interests of such Foreign Restricted Subsidiary to secure such Indebtedness;

(17) Liens to secure Attributable Indebtedness and/or that are permitted to be incurred pursuant to Section 4.17; provided that any such Lien shall not extend to or cover any assets of the Partnership or any Restricted Subsidiary other than the assets which are the subject of the Sale and Leaseback Transaction in which the Attributable Indebtedness is incurred; and

(18) other Liens with respect to Indebtedness that does not exceed $10.0 million in aggregate principal amount.

“Permitted Tax Distributions” shall mean for any calendar year or portion thereof of the Partnership during which the Partnership is a pass-through entity for U.S. federal income tax purposes, payments and distributions which are distributed from the Partnership to Holdings for distribution to the partners of Holdings on each estimated payment date as well as each other applicable due date to enable the partners of Holdings (or if any of them are themselves a pass-through entity for U.S. federal income tax purposes, their shareholders or partners) to make payments of U.S. federal and state income taxes (including estimates therefor) as a result of the Partnership’s and its Subsidiaries’ operations during the current and any previous calendar year, not to exceed an amount equal to the amount of each such partner’s (or in the case of a pass-through entity, its shareholders’ or partners’) U.S. federal and state income tax liability resulting solely from the pass-through tax treatment of such partner’s interest in Holdings and as calculated pursuant to the Oilfield Holdings Partnership Agreement as in effect on the Issue Date and as amended thereafter in a manner that is not, considered as a whole, adverse to the Holders.

“Person” means any individual, corporation, partnership, limited liability company, joint venture, incorporated or unincorporated association, joint-stock company, trust, unincorporated organization or government or other agency or political subdivision thereof or other entity of any kind.

“Plan of Liquidation” with respect to any Person, means a plan that provides for, contemplates or the effectuation of which is preceded or accompanied by (whether or not substantially contemporaneously, in phases or otherwise): (1) the sale, lease, conveyance or other disposition of all or substantially all of the assets of such Person otherwise than as an entirety or substantially as an entirety; and (2) the distribution of all or substantially all of the proceeds of such sale, lease, conveyance or other disposition of all or substantially all of the remaining assets of such Person to holders of Equity Interests of such Person.

“Preferred Stock” means, with respect to any Person, any and all preferred or preference stock or other similar Equity Interests (however designated) of such Person whether now outstanding or issued after the Issue Date.

“principal” means, with respect to the Notes, the principal of, and premium, if any, on the Notes.

-20-

“Purchase Money Indebtedness” means Indebtedness, including Capitalized Lease Obligations, of the Partnership or any Restricted Subsidiary incurred for the purpose of financing all or any part of the purchase price of assets used in the business of the Partnership or any Restricted Subsidiary or the cost of installation, construction or improvement thereof; provided, however, that (except in the case of Capitalized Lease Obligations) (1) the amount of such Indebtedness shall not exceed such purchase price or cost and (2) such Indebtedness shall be incurred within 12 months after such acquisition of such asset by the Partnership or such Restricted Subsidiary or such installation, construction or improvement.

“Qualified Equity Interests” of any Person means Equity Interests of such Person other than Disqualified Equity Interests; provided that such Equity Interests shall not be deemed Qualified Equity Interests to the extent sold or owed to a Subsidiary of such Person or financed, directly or indirectly, using funds (1) borrowed from such Person or any Subsidiary of such Person until and to the extent such borrowing is repaid or (2) contributed, extended, guaranteed or advanced by such Person or any Subsidiary of such Person (including, without limitation, in respect of any employee stock ownership or benefit plan). Unless otherwise specified, Qualified Equity Interests refer to Qualified Equity Interests of the Partnership.

“Qualified Equity Offering” means the issuance and sale of Qualified Equity Interests of Oilfield Holdings or the Partnership to Persons other than (x) any Permitted Holder or (y) any other Person who is, prior to such issuance and sale, an Affiliate of the Partnership; provided, however, that cash proceeds therefrom equal to not less than the Redemption Price of the Notes to be redeemed are received by the Partnership (either directly or as a capital contribution) immediately prior to such redemption.

“Qualified Institutional Buyer” shall have the meaning specified in Rule 144A promulgated under the Securities Act.

“Record Date” for interest payable on any Interest Payment Date (except a date for payment of default interest) means the January 15 and July 15 (whether or not a Business Day) as the case may be, immediately preceding such Interest Payment Date.

“Redemption Date” when used with respect to any Note to be redeemed means the date fixed for such redemption pursuant to this Indenture.

“Redemption Price” when used with respect to any Note to be redeemed means the price fixed for such redemption pursuant to this Indenture.

“Redesignation” has the meaning given to such term in Section 4.19.

“refinance” means to refinance, repay, prepay, replace, renew, refund, defease, discharge or otherwise retire for value.

“Refinancing Indebtedness” means Indebtedness of the Partnership or a Restricted Subsidiary incurred in exchange for, or the proceeds of which are used to redeem or refinance, in whole or in part, any Indebtedness of the Partnership or any Restricted Subsidiary (the “Refinanced Indebtedness”); provided that:

(1) the principal amount (and accreted value, in the case of Indebtedness issued at a discount) of the Refinancing Indebtedness does not exceed the principal amount (and accreted value, as the case may be) of the Refinanced Indebtedness plus the amount of accrued and unpaid interest on the Refinanced Indebtedness, any reasonable premium paid to the holders of the Refinanced Indebtedness and reasonable expenses incurred in connection with the incurrence of the Refinancing Indebtedness;

-21-

(2) the obligor of Refinancing Indebtedness does not include any Person (other than the Partnership or any Guarantor) that is not an obligor of the Refinanced Indebtedness;

(3) if the Refinanced Indebtedness was subordinated in right of payment to the Notes or the Note Guarantees, as the case may be, then such Refinancing Indebtedness, by its terms, is subordinate in right of payment to the Notes or the Note Guarantees, as the case may be, at least to the same extent as the Refinanced Indebtedness;

(4) the Refinancing Indebtedness has a final stated maturity either (a) no earlier than the Refinanced Indebtedness being redeemed or refinanced or (b) after the Maturity Date of the Notes;

(5) the portion, if any, of the Refinancing Indebtedness that is scheduled to mature on or prior to the Maturity Date of the Notes has a Weighted Average Life to Maturity at the time such Refinancing Indebtedness is incurred that is equal to or greater than the Weighted Average Life to Maturity of the portion of the Refinanced Indebtedness being repaid that is scheduled to mature on or prior to the Maturity Date of the Notes; and

(6) the proceeds of the Refinancing Indebtedness shall be used substantially concurrently with the incurrence thereof to redeem or refinance the Refinanced Indebtedness, unless the Refinanced Indebtedness is not then due and is not redeemable or prepayable at the option of the obligor thereof or is redeemable or prepayable only with notice, in which case such proceeds shall be held in a segregated account of the obligor of the Refinanced Indebtedness until the Refinanced Indebtedness becomes due or redeemable or prepayable or such notice period lapses and then shall be used to refinance the Refinanced Indebtedness; provided that in any event the Refinanced Indebtedness shall be redeemed or refinanced within 60 days of the incurrence of the Refinancing Indebtedness.

“Regulation S” means Regulation S promulgated under the Securities Act.

“Restricted Payment” means any of the following:

(1) the declaration or payment of any dividend or any other distribution on Equity Interests of the Partnership or any Restricted Subsidiary or any payment made to the direct or indirect holders (in their capacities as such) of Equity Interests of the Partnership or any Restricted Subsidiary, including, without limitation, any payment in connection with any merger or consolidation involving the Partnership but excluding (a) dividends or distributions payable solely in Qualified Equity Interests or through accretion or accumulation of such dividends on such Equity Interests and (b) in the case of Restricted Subsidiaries, dividends or distributions payable to the Partnership or to a Restricted Subsidiary and pro rata dividends or distributions payable to minority holders of Equity Interests of any Restricted Subsidiary who are not Affiliates other than the Partnership or a Restricted Subsidiary;

-22-

(2) the purchase, redemption, defeasance or other acquisition or retirement for value of any Equity Interests of the Partnership or any Restricted Subsidiary (including, without limitation, any payment in connection with any merger or consolidation involving the Partnership) but excluding any such Equity Interests held by the Partnership or any Restricted Subsidiary;

(3) any Investment other than a Permitted Investment; or

(4) any principal payment on, purchase, redemption, defeasance, prepayment, decrease or other acquisition or retirement for value prior to any scheduled maturity or prior to any scheduled repayment of principal or sinking fund payment, as the case may be, in respect of Subordinated Indebtedness (other than any Subordinated Indebtedness owed to and held by the Partnership or any Guarantor).

“Restricted Payments Basket” has the meaning given to such term in Section 4.11 (a)(3).

“Restricted Security” has the meaning set forth in Rule 144(a)(3) promulgated under the Securities Act; provided that the Trustee shall be entitled to request and conclusively rely upon an Opinion of Counsel with respect to whether any Note is a Restricted Security.

“Restricted Subsidiary” means any Subsidiary of the Partnership other than an Unrestricted Subsidiary.

“Rule 144A” means Rule 144A promulgated under the Securities Act.

“S&P” means Standard & Poor’s Ratings Services, a division of The McGraw-Hill Companies, Inc., and its successors.

“Sale and Leaseback Transactions” means with respect to any Person an arrangement with any bank, insurance company or other lender or investor or to which such lender or investor is a party, providing for the leasing by such Person of any asset of such Person which has been or is being sold or transferred by such Person to such lender or investor or to any Person to whom funds have been or are to be advanced by such lender or investor on the security of such asset.

“SEC.” means the U.S. Securities and Exchange Commission.

“Secretary’s Certificate” means a certificate signed by the Secretary or an Assistant Secretary of the Partnership (or, so long as the Partnership is a partnership, the General Partner).

“Securities Act” means the U.S. Securities Act of 1933, as amended.

“Significant Subsidiary” means (1) any Restricted Subsidiary that would be a “significant subsidiary” as defined in Regulation S-X promulgated pursuant to the Securities Act as such Regulation is in effect on the Issue Date and (2) any Restricted Subsidiary that, when aggregated with all other Restricted Subsidiaries that are not otherwise Significant Subsidiaries and as to which any event described in clause (h) or (i) of Section 6.01 has occurred and is continuing, or which are being released from their Note Guarantees (in the case of clause (9) of the provisions described in Section 8.02), would constitute a Significant Subsidiary under clause (1) of this definition.

“Stallion Interests” means Stallion Interests, LLC, a Texas limited liability company.

-23-

“Subordinated Indebtedness” means Indebtedness of the Partnership or any Restricted Subsidiary that is expressly subordinated in right of payment to the Notes or the Note Guarantees, respectively.

“Subsidiary” means, with respect to any Person:

(1) any corporation, limited liability company, association or other business entity of which more than 50% of the total voting power of the Voting Stock thereof is at the time owned or controlled, directly or indirectly, by such Person or one or more of the other Subsidiaries of such Person (or a combination thereof); and

(2) any partnership (a) the sole general partner or the managing general partner of which is such Person or a Subsidiary of such Person or (b) the only general partners of which are such Person or of one or more Subsidiaries of such Person (or any combination thereof).

Unless otherwise specified, “Subsidiary” refers to a Subsidiary of the Partnership.

“Tax Amount” means, for any period, the combined federal, state and local income taxes, including estimated taxes, that would be payable by the Partnership if it were a Delaware corporation filing separate tax returns with respect to its Taxable Income for such period; provided that in determining the Tax Amount, the effect thereon of any net operating loss carryforwards or other carryforwards or tax attributes, such as alternative minimum tax carryforwards, that would have arisen if the Partnership were a Delaware corporation shall be taken into account; provided, further, that (i) the Tax Amount for any period shall not exceed the total net amount of the relevant (estimated or final, as the case may be) tax liability that equityholders or partners of the Partnership (as the case may be) actually owe to the appropriate taxing authority at such time and (ii) if there is an adjustment in the amount of the Taxable Income for any period, an appropriate positive or negative adjustment shall be made in the Tax Amount, and if the Tax Amount is negative, then the Tax Amount for succeeding periods shall be reduced to take into account such negative amount until such negative amount is reduced to zero. Notwithstanding anything to the contrary, Tax Amount shall not include taxes resulting from the Partnership’s reorganization as or change in the status to a corporation for tax purposes.

“Taxable Income” means, for any period, the taxable income or loss of the Partnership for such period for U.S. federal income tax purposes.

“Treasury Rate” means, as of any Redemption Date, the yield to maturity at the time of computation of United States Treasury securities with a constant maturity (as compiled and published in the most recent Federal Reserve Statistical Release H.15 (519) which has become publicly available at least two Business Days prior to the Redemption Date (or, if such Statistical Release is no longer published, any publicly available source or similar market data)) most nearly equal to the period from the Redemption Date to February 1, 2011; provided, however, that if the period from the Redemption Date to February 1, 2011 is not equal to the constant maturity of a United States Treasury security for which a weekly average yield is given, the Partnership shall obtain the Treasury Rate by linear interpolation (calculated to the nearest one-twelfth of a year) from the weekly average yields of United States Treasury securities for which such yields are given, except that if the period from the Redemption Date to February 1, 2011 is less than one year, the weekly average yield on actually traded United States Treasury securities adjusted to a constant maturity of one year shall be used. The Partnership shall (a) calculate the Treasury Rate on the second Business Day preceding the applicable Redemption Date and (b) prior to such Redemption Date file with the Trustee an Officers’ Certificate setting forth the Applicable Premium and the Treasury Rate and showing the calculation of each in reasonable detail.

-24-

“Trust Indenture Act” means the Trust Indenture Act of 1939, as amended.

“Trust Officer” means, when used with respect to the Trustee, any officer within the corporate trust department of the Trustee, including any vice president, assistant vice president, assistant treasurer, trust officer or any other officer of the Trustee who customarily performs functions similar to those performed by the persons who at the time shall be such officers, respectively, or to whom any corporate trust matter is referred because of such person’s knowledge of and familiarity with the particular subject and who shall have direct responsibility for the administration of this Indenture.

“Trustee” means the party named as such in this Indenture until a successor replaces it pursuant to this Indenture and thereafter means the successor.

“Unrestricted Subsidiary” means (1) any Subsidiary of the Partnership (other than Finance Corp.) that at the time of determination shall be designated an Unrestricted Subsidiary by the Board of Directors of the Partnership in accordance with Section 4.19 and (2) any Subsidiary of an Unrestricted Subsidiary.

“U.S. Government Obligations” means direct non-callable obligations of, or guaranteed by, the United States of America for the payment of which guarantee or obligations the full faith and credit of the United States is pledged.

“Voting Stock” with respect to any Person, means securities of any class of Equity Interests of such Person entitling the holders thereof (whether at all times or only so long as no senior class of stock or other relevant Equity Interest has voting power by reason of any contingency) to vote in the election of members of the Board of Directors of such Person.

“Weighted Average Life to Maturity” when applied to any Indebtedness at any date, means the number of years obtained by dividing (1) the sum of the products obtained by multiplying (a) the amount of each then remaining installment, sinking fund, serial maturity or other required payment of principal, including payment at final maturity, in respect thereof by (b) the number of years (calculated to the nearest one-twelfth) that will elapse between such date and the making of such payment by (2) the then outstanding principal amount of such Indebtedness.

Section 1.02. Incorporation by Reference of Trust Indenture Act.

Whenever this Indenture refers to a provision of the TIA, the portion of such provision required to be incorporated in an indenture in order for such indenture to be qualified under the TIA is incorporated by reference in and made a part of this Indenture, irrespective of whether or not this Indenture is ever qualified under the TIA. The following TIA terms used in this Indenture have the following meanings:

“indenture securities” means the Notes.

“indenture securityholder” means a Holder.

“indenture to be qualified” means this Indenture.

-25-

“indenture trustee” or “institutional trustee” means the Trustee.

“obligor on the indenture securities” means the Issuers, the Guarantors or any other obligor on the Notes.

All other terms used in this Indenture that are defined by the TIA, defined in the TIA by reference to another statute or defined by SEC rule have the meanings therein assigned to them.

Section 1.03. Rules of Construction.

Unless the context otherwise requires:

(a) a term has the meaning assigned to it herein, whether defined expressly or by reference;

(b) an accounting term not otherwise defined has the meaning assigned to it in accordance with GAAP;

(c) “or” is not exclusive;

(d) words in the singular include the plural, and in the plural include the singular;

(e) words used herein implying any gender shall apply to every gender; and

(f) “$”, “U.S. Dollars” and “Dollars” each refers to United States dollars, or such other money of the United States of America that at the time of payment is legal tender for payment of public and private debts.

ARTICLE 2

THE NOTES

Section 2.01. Form and Dating.

The Notes and the Trustee’s certificate of authentication shall be substantially in the form of Exhibit A hereto. The Notes may have notations, legends or endorsements required by law, stock exchange rule or Depository rule or usage. The form of the Notes and any notation, legend or endorsement on them shall be satisfactory to the Issuers and the Trustee. Each Note shall be dated the date of its issuance and shall show the date of its authentication.

The terms and provisions contained in the Notes, annexed hereto as Exhibit A, shall constitute, and are hereby expressly made, a part of this Indenture and, to the extent applicable, the Issuers and the Trustee, by their execution and delivery of this Indenture, expressly agree to such terms and provisions and to be bound thereby.

The Notes shall be issued initially in the form of two or more permanent global Notes (the “Global Notes”). Notes offered and sold (i) in reliance on Rule 144A shall be issued initially in the form of one or more permanent Global Notes in registered form, substantially in the form set forth in Exhibit A (the ”Rule 144A Global Note”) and (ii) in offshore transactions in reliance on Regulation S shall be issued initially in the form of one or more permanent global Notes in registered form,

-26-

substantially in the form set forth in Exhibit A (the “Regulation S Global Note”), and in each case shall be deposited with the Trustee, as custodian for the Depository, duly executed by the Issuers and authenticated by the Trustee as hereinafter provided. The aggregate principal amount of any Global Note may from time to time be increased or decreased by adjustments made on the records of the Trustee, as custodian for the Depository, as hereinafter provided.

Section 2.02. Execution and Authentication.

The Notes shall be executed on behalf of the Issuers by two Officers. Such signatures may be either manual or by facsimile or electronic image scan.

If an Officer whose signature is on a Note no longer holds that office at the time the Trustee authenticates the Note, the Note shall be valid nevertheless.

A Note shall not be valid until an authorized signatory of the Trustee signs the certificate of authentication on the Note. Such signature shall be manual. Such signature shall be conclusive evidence that the Note has been authenticated under this Indenture.

The Trustee or an authentication agent (the “Authenticating Agent”) shall authenticate (i) Initial Notes for original issue on the date of this Indenture in the aggregate principal amount not to exceed $300,000,000 and (ii) additional Notes (“Additional Notes”) for original issue following the date of this Indenture in unlimited aggregate principal amount (so long as permitted by the terms of this Indenture, including, without limitation, Section 4.10 hereof), upon a written order of the Issuers in the form of an Officers’ Certificate in aggregate principal amount as specified in such order (together with such other customary opinions and certificates that the Trustee may require). The Officers’ Certificate shall specify the amount of Notes to be authenticated, the date on which the Notes are to be authenticated and the aggregate principal amount of Notes outstanding on the date of authentication, whether the Notes are to be Initial Notes or Additional Notes, and shall further specify the amount of such Notes to be issued as a Global Note or Certificated Notes. The aggregate principal amount of Notes outstanding at any time may not exceed such amount except as provided in Section 2.07 hereof.

Notwithstanding the foregoing, all Notes issued under this Indenture shall vote and consent together on all matters (as to which any of such Notes may vote or consent) as one class and no series of Notes will have the right to vote or consent as a separate class on any matter.

The Trustee may appoint an Authenticating Agent to authenticate Notes. Any such appointment shall be evidenced by an instrument signed by a Trust Officer, a copy of which shall be furnished to the Issuers. An Authenticating Agent may authenticate Notes whenever the Trustee may do so. Each reference in this Indenture to authentication by the Trustee includes authentication by such Authenticating Agent. An Authenticating Agent has the same right as an Agent to deal with the Issuers and Affiliates of the Issuers.

The Notes shall be issuable only in registered form without coupons and only in denominations of $2,000 and integral multiples of $1,000 in excess thereof.

Section 2.03. Registrar and Paying Agent.

The Issuers shall maintain an office or agency where Notes may be presented for registration of transfer or for exchange (“Registrar”), an office or agency located in the Borough of

-27-

Manhattan, City of New York, State of New York where Notes may be presented for payment (“Paying Agent”) and an office or agency where notices and demands to or upon the Issuers in respect of the Notes and this Indenture may be served. The Registrar shall keep a register of the Notes and of their transfer and exchange. The Registrar shall provide the Issuers a current copy of such register from time to time upon request of the Issuers. The Issuers may have one or more co-Registrars and one or more additional Paying Agents. Neither the Issuers nor any Affiliate of the Issuers may act as Paying Agent. The Issuers may change any Paying Agent, Registrar or co-Registrar without notice to any Holder.

The Issuers shall enter into an appropriate agency agreement with any Agent not a party to this Indenture. The agreement shall implement the provisions of this Indenture that relate to such Agent. The Issuers shall notify the Trustee of the name and address of any such Agent. If the Issuers fail to maintain a Registrar or Paying Agent, or agent for service of notices and demands, or fail to give the foregoing notice, the Trustee shall act as such. The Issuers initially appoint the Trustee as Registrar, Paying Agent and agent for service of notices and demands in connection with the Notes.

Section 2.04. Paying Agent To Hold Assets in Trust.

The Issuers shall require each Paying Agent other than the Trustee to agree in writing that each Paying Agent shall hold in trust for the benefit of the Holders or the Trustee all assets held by the Paying Agent for the payment of principal of, premium, if any, or interest on Notes (whether such assets have been distributed to it by the Issuers or any other obligor on the Notes), and shall notify the Trustee in writing of any Default in making any such payment. The Issuers at any time may require a Paying Agent to distribute all assets held by it to the Trustee and account for any assets disbursed and the Trustee may at any time during the continuance of any Payment Default, upon written request to a Paying Agent, require such Paying Agent to forthwith distribute to the Trustee all assets so held in trust by such Paying Agent together with a complete accounting of such sums. Upon distribution to the Trustee of all assets that shall have been delivered by either of the Issuers to the Paying Agent, the Paying Agent shall have no further liability for such assets.

Section 2.05. Noteholder Lists.

The Trustee shall preserve in as current a form as is reasonably practicable the most recent list available to it of the names and addresses of Holders. If the Trustee is not the Registrar, the Issuers shall furnish or cause the Registrar to furnish to the Trustee on or before each February 1 and August 1 in each year, and at such other times as the Trustee may request in writing, a list in such form and as of such date as the Trustee may reasonably require of the names and addresses of Holders which list may be conclusively relied on by the Trustee.

Section 2.06. Transfer and Exchange.

Subject to the provisions of Sections 2.15 and 2.16 hereof, when Notes are presented to the Registrar or a co-Registrar with a request to register the transfer of such Notes or to exchange such Notes for an equal principal amount of Notes of other denominations of the same series, the Registrar or co-Registrar shall register the transfer or make the exchange as requested if its requirements for such transaction are met; provided, however, that the Notes presented or surrendered for registration of transfer or exchange shall be duly endorsed or accompanied by a written instrument of transfer in form satisfactory to the Partnership and the Registrar or co-Registrar, duly executed by the Holder thereof or his attorney duly authorized in writing. To permit registrations of transfer and exchanges, the Issuers shall execute and the Trustee shall authenticate Notes at the Registrar’s or co-Registrar’s request. No

-28-

service charge shall be made for any registration of transfer or exchange, but the Partnership may require payment of a sum sufficient to cover any transfer tax or similar governmental charge in connection therewith payable by the transferor of such Notes (other than any such transfer taxes or similar governmental charge payable upon exchanges or transfers pursuant to Section 2.10, 3.06, 4.12, 4.15 or 9.06 hereof, in which event the Partnership shall be responsible for the payment of such taxes).

Without the prior consent of the Partnership, the Registrar or co-Registrar shall not be required to register the transfer of or exchange any Note (i) during a period beginning at the opening of 15 days before a selection of Notes to be redeemed, (ii) selected for redemption in whole or in part pursuant to Article 3 hereof, except the unredeemed portion of any Note being redeemed in part, or (iii) between a Record Date and the next succeeding Interest Payment Date.

Any Holder of a Global Note shall, by acceptance of such Global Note, agree that transfers of beneficial interests in such Global Notes may be effected only through a book entry system maintained by the Holder of such Global Note (or its principal or agent), and that ownership of a beneficial interest in the Note shall be required to be reflected in a book entry.

Section 2.07. Replacement Notes.

If a mutilated Note is surrendered to the Trustee or if the Holder presents evidence to the satisfaction of the Partnership and the Trustee that the Note has been lost, destroyed or wrongfully taken, the Issuers shall issue and the Trustee shall authenticate a replacement Note. An indemnity or a security bond may be required by the Partnership or the Trustee that is sufficient in the judgment of the Partnership and the Trustee to protect the Issuers, the Trustee or any Agent from any loss which any of them may suffer if a Note is replaced. In every case of destruction, loss or theft, the applicant shall also furnish to the Partnership and to the Trustee evidence to their satisfaction of the destruction, loss or the theft of such Note and the ownership thereof. Each of the Issuers and the Trustee may charge for its expenses in replacing a Note. In the event any such mutilated, lost, destroyed or wrongfully taken Note has become due and payable, the Issuers in their discretion may pay such Note instead of issuing a new Note in replacement thereof. The provisions of this Section 2.07 are exclusive and shall preclude (to the extent lawful) all other rights and remedies with respect to replacement or payment of mutilated, lost, destroyed or wrongfully taken Notes.

Every replacement Note is an additional obligation of the Issuers.

Section 2.08. Outstanding Notes.

Notes outstanding at any time are all Notes authenticated by the Trustee except for those cancelled by it, those delivered to it for cancellation, and those described in this Section 2.08 as not outstanding.

If a Note is replaced pursuant to Section 2.07 hereof (other than a mutilated Note surrendered for replacement), it ceases to be outstanding until the Partnership and the Trustee receive proof satisfactory to each of them that the replaced Note is held by a protected purchaser. A mutilated Note ceases to be outstanding upon surrender of such Note and replacement thereof pursuant to Section 2.07 hereof.

-29-

If by 11:00 a.m., New York City time, on a Redemption Date or the Maturity Date, the Paying Agent holds U.S. Dollars sufficient to pay all of the principal and interest due on the Notes on that date, then on and after that date such Notes cease to be outstanding and interest on them ceases to accrue.

Section 2.09. Treasury Notes.

In determining whether the Holders of the required principal amount of Notes have concurred in any direction, waiver, consent or notice, Notes owned by the Issuers or any of its Affiliates shall be considered as though they are not outstanding, except that for the purposes of determining whether the Trustee shall be protected in relying on any such direction, waiver or consent, only Notes which a Trust Officer of the Trustee actually knows are so owned shall be so considered. The Issuers shall notify the Trustee, in writing, when it or any of its Affiliates repurchases or otherwise acquires Notes, of the aggregate principal amount of such Notes so repurchased or otherwise acquired.

Section 2.10. Temporary Notes.

Until definitive Notes are ready for delivery, the Partnership may prepare and the Trustee shall authenticate temporary Notes upon receipt of a written order of the Partnership in the form of an Officers’ Certificate. The Officers’ Certificate shall specify the amount of temporary Notes to be authenticated and the date on which the temporary Notes are to be authenticated. Temporary Notes shall be substantially in the form of definitive Notes but may have variations that the Partnership considers appropriate for temporary Notes. Without unreasonable delay, the Issuers shall prepare and the Trustee shall authenticate upon receipt of a written order of the Issuers pursuant to Section 2.02 definitive Notes in exchange for temporary Notes.

Section 2.11. Cancellation.

The Partnership at any time may deliver Notes to the Trustee for cancellation. The Registrar and the Paying Agent shall forward to the Trustee any Notes surrendered to them for registration of transfer, exchange or payment. The Trustee, or at the direction of the Trustee, the Registrar or the Paying Agent, and no one else, shall cancel and, at the written direction of the Partnership, dispose of and deliver evidence of such disposal of all Notes surrendered for registration of transfer, exchange, payment or cancellation in accordance with their then existing procedures therefor. Subject to Section 2.07 hereof, the Issuers may not issue new Notes to replace Notes that it has paid or delivered to the Trustee for cancellation. If the Partnership shall acquire any of the Notes, such acquisition shall not operate as a redemption or satisfaction of the Indebtedness represented by such Notes unless and until the same are surrendered to the Trustee for cancellation pursuant to this Section 2.11. In no event shall the Trustee be required to destroy cancelled Notes.

Section 2.12. Defaulted Interest.

The Issuers shall pay interest on overdue principal (including post-petition interest in a proceeding under Bankruptcy Law) at the rate of interest then borne by the Notes. The Issuers shall, to the extent lawful, pay interest on overdue installments of interest (without regard to any applicable grace periods) at the rate of interest then borne by the Notes.

If the Issuers default in a payment of interest on the Notes, they shall pay the defaulted interest, plus (to the extent lawful) any interest payable on the defaulted interest to the Persons who are Holders on a subsequent special record date, which date shall be the fifteenth day next preceding the date

-30-

fixed by the Issuers for the payment of defaulted interest or the next succeeding Business Day if such date is not a Business Day. At least 15 days before the subsequent special record date, the Partnership shall mail to each Holder, as of a recent date selected by the Partnership, with a copy to the Trustee, a notice that states the subsequent special record date, the payment date and the amount of defaulted interest, and interest payable on such defaulted interest, if any, to be paid.

Notwithstanding the foregoing, any interest which is paid prior to the expiration of the 30-day period set forth in Section 6.01(a) hereof shall be paid to Holders as of the Record Date for the Interest Payment Date for which interest has not been paid.

Section 2.13. Deposit of Moneys.

By 11:00 a.m., New York City time, on each Interest Payment Date, Redemption Date, Change of Control Payment Date, Net Proceeds Offer Payment Date and Maturity Date, the Issuers shall have deposited with the Paying Agent in immediately available funds U.S. Dollars sufficient to make payments, if any, due on such Interest Payment Date, Redemption Date, Change of Control Payment Date, Net Proceeds Offer Payment Date or Maturity Date, as the case may be, in a timely manner which permits the Trustee to remit payment to the Holders on such Interest Payment Date, Redemption Date, Change of Control Payment Date, Net Proceeds Offer Payment Date or Maturity Date, as the case may be. The principal and interest on Global Notes shall be payable to the Depository or its nominee, as the case may be, as the sole registered owner and the sole Holder of the Global Notes represented thereby. The principal and interest on Notes in certificated form shall be payable at the office of the Paying Agent in the Borough of Manhattan, the City and State of New York.

Section 2.14. CUSIP Number.

The Issuers in issuing the Notes may use “CUSIP,” “ISIN” or such other numbers, and if so, the Trustee shall use such CUSIP, ISIN or such other numbers in notices of redemption or exchange as a convenience to Holders; provided that any such notice may state that no representation is made as to the correctness or accuracy of the CUSIP, ISIN or such other numbers printed in the notice or on the Notes, and that reliance may be placed only on the other identification numbers printed on the Notes. The Partnership shall promptly notify the Trustee of any change in the CUSIP, ISIN or such other number.

Section 2.15. Book-Entry Provisions for Global Notes.

(a) The Global Notes initially shall (i) be registered in the name of the Depository or the nominee of such Depository, (ii) be delivered to the Trustee as custodian for such Depository and (iii) bear legends as set forth in Section 2.17 hereof.

Members of, or participants in, the Depository (“Agent Members”) shall have no rights under this Indenture with respect to any Global Note held on their behalf by the Depository or under the Global Note, and the Depository may be treated by the Issuers, the Trustee and any agent of the Issuers or the Trustee as the absolute owner of the Global Note for all purposes whatsoever. Notwithstanding the foregoing, nothing herein shall prevent the Issuers, the Trustee or any agent of the Issuers or the Trustee from giving effect to any written certification, proxy or other authorization furnished by the Depository or impair, as between the Depository and its Agent Members, the operation of customary practices governing the exercise of the rights of a Holder.

-31-

(b) Interests of beneficial owners in the Global Notes may be transferred or exchanged for Certificated Notes in accordance with the rules and procedures of the Depository and the provisions of Section 2.16 hereof. In addition, Certificated Notes shall be transferred to all beneficial owners in exchange for their beneficial interests in Global Notes if (i) the Depository (x) notifies the Issuers that it is unwilling or unable to continue as Depository for any Global Note or (y) has ceased to be a clearing company registered under the Exchange Act and, in each case, a successor depositary is not appointed by the Issuers within 90 days of such notice or (ii) the Issuers so elect and the Registrar has received a written request from the Issuers to issue Certificated Notes.

(c) In connection with the transfer of Global Notes as an entirety to beneficial owners pursuant to paragraph (b), the Global Notes shall be deemed to be surrendered to the Trustee for cancellation, and the Issuers shall execute, and the Trustee shall, upon receipt of an authentication order from the Issuers in the form of an Officers’ Certificate, authenticate and deliver, to each beneficial owner identified by the Depository in writing in exchange for its beneficial interest in the Global Notes, an equal aggregate principal amount of Certificated Notes of authorized denominations.

(d) Any Certificated Note constituting a Restricted Security delivered in exchange for an interest in a Global Note pursuant to paragraph (b) or (c) shall, except as otherwise provided by Section 2.16 hereof, bear the Private Placement Legend.

(e) The Holder of any Global Note may grant proxies and otherwise authorize any Person, including Agent Members and Persons that may hold interests through Agent Members, to take any action which a Holder is entitled to take under this Indenture or the Notes.

Section 2.16. Registration of Transfers and Exchanges.

(a) Transfer and Exchange of Certificated Notes. When Certificated Notes are presented to the Registrar or co-Registrar with a request:

(i) to register the transfer of the Certificated Notes; or

(ii) to exchange such Certificated Notes for an equal principal amount of Certificated Notes of other authorized denominations,

the Registrar or co-Registrar shall register the transfer or make the exchange as requested if the requirements under this Indenture as set forth in this Section 2.16 for such transactions are met; provided, however, that the Certificated Notes presented or surrendered for registration of transfer or exchange:

(I) shall be duly endorsed or accompanied by a written instrument of transfer in form satisfactory to the Registrar or co-Registrar, duly executed by the Holder thereof or his attorney duly authorized in writing; and

(II) in the case of Certificated Notes the offer and sale of which have not been registered under the Securities Act and are presented for transfer or exchange prior to (x) the date which is two years after the later of the date of original issue and the last date on which either Issuer or any of their respective Affiliates was the owner of such Note, or any predecessor thereto and (y) such later date, if any, as may be required by any subsequent change in applicable law (the “Resale Restriction Termination Date”), such Certificated Notes shall be accompanied, in the sole discretion of the Issuers, by the following additional information and documents, as applicable:

(A) if such Certificated Note is being delivered to the Registrar or co-Registrar by a Holder for registration in the name of such Holder, without transfer, a certification to that effect (substantially in the form of Exhibit B hereto); or

-32-

(B) if such Certificated Note is being transferred to a Qualified Institutional Buyer in accordance with Rule 144A, a certification to that effect (substantially in the form of Exhibit B hereto); or

(C) if such Certificated Note is being transferred in reliance on Regulation S, delivery of a certification to that effect (substantially in the form of Exhibit B hereto) and a transferor certificate for Regulation S transfers substantially in the form of Exhibit D hereto; or

(D) if such Certificated Note is being transferred to an Institutional Accredited Investor, delivery of certification to that effect (substantially in the form of Exhibit B hereto), certificates of the transferee in substantially the form of Exhibit C and, at the option of the Issuers in the case of transfers of Notes with an aggregate principal amount of less than $250,000, an Opinion of Counsel reasonably satisfactory to the Issuers to the effect that such transfer is in compliance with the Securities Act; or

(E) if such Certificated Note is being transferred in reliance on Rule 144 under the Securities Act, delivery of a certification to that effect substantially in the form of Exhibit B hereto) and, at the option of the Issuers, an Opinion of Counsel reasonably satisfactory to the Issuers to the effect that such transfer is in compliance with the Securities Act; or

(F) if such Certificated Note is being transferred in reliance on another exemption from the registration requirements of the Securities Act, a certification to that effect (substantially in the form of Exhibit B hereto) and, at the option of the Issuers, an Opinion of Counsel reasonably satisfactory to the Issuers to the effect that such transfer is in compliance with the Securities Act.

(b) Restrictions on Transfer of a Certificated Note for a Beneficial Interest in a Global Note. A Certificated Note may not be exchanged for a beneficial interest in a Global Note except upon satisfaction of the requirements set forth below. Upon receipt by the Registrar or co-Registrar of a Certificated Note, duly endorsed or accompanied by appropriate instruments of transfer, in form satisfactory to the Registrar or co-Registrar, together with:

(A) in the case of Certificated Notes, the offer and sale of which have not been registered under the Securities Act and which are presented for transfer prior to the Resale Restriction Termination Date, certification, substantially in the form of Exhibit B hereto, that such Certificated Note is being transferred (I) to a Qualified Institutional Buyer or (1I) in an offshore transaction in reliance on Regulation S (and, in the case of this clause 11, the Issuers shall have received a transferor certificate for Regulation S transfers substantially in the form of Exhibit D hereto; and

-33-

(B) written instructions from the Holder thereof directing the Registrar or co-Registrar to make, or to direct the Depository to make, an endorsement on the applicable Global Note to reflect an increase in the aggregate amount of the Notes represented by the Global Note,

then the Registrar or co-Registrar shall cancel such Certificated Note and cause, or direct the Depository to cause, in accordance with the standing instructions and procedures existing between the Depository and the Registrar or co-Registrar, the principal amount of Notes represented by the applicable Global Note to be increased accordingly. If no Global Note representing Notes held by Qualified Institutional Buyers or Persons acquiring Notes in offshore transactions in reliance on Regulation S, as the case may be, is then outstanding, the Issuers shall issue and the Trustee shall, upon receipt of an authentication order in the form of an Officers’ Certificate in accordance with Section 2.02, authenticate such a Global Note in the appropriate principal amount.

(c) Transfer and Exchange of Global Notes. The transfer and exchange of Global Notes or beneficial interests therein shall be effected through the Depository in accordance with this Indenture (including the restrictions on transfer set forth herein) and the procedures of the Depository therefor. Upon receipt by the Registrar or co-Registrar of written instructions, or such other instruction as is customary for the Depository, from the Depository or its nominee, requesting the registration of transfer of an interest in a Rule 144A Global Note or Regulation S Global Note, as the case may be, to another type of Global Note, together with the applicable Global Notes (or, if the applicable type of Global Note required to represent the interest as requested to be transferred is not then outstanding, only the Global Note representing the interest being transferred), the Registrar or co-Registrar shall cancel such Global Notes (or Global Note) and the Issuers shall issue and the Trustee shall, upon receipt of an authentication order in the form of an Officers’ Certificate in accordance with Section 2.02, authenticate new Global Notes of the types so cancelled (or the type so cancelled and applicable type required to represent the interest as requested to be transferred) reflecting the applicable increase and decrease of the principal amount of Notes represented by such types of Global Notes, giving effect to such transfer. If the applicable type of Global Note required to represent the interest as requested to be transferred is not outstanding at the time of such request, the Issuers shall issue and the Trustee shall, upon written instructions from the Issuers in accordance with Section 2.02, authenticate a new Global Note of such type in principal amount equal to the principal amount of the interest requested to be transferred.

(d) Transfer of a Beneficial Interest in a Global Note for a Certificated Note. (i) Any Person having a beneficial interest in a Global Note may upon request exchange such beneficial interest for a Certificated Note. Upon receipt by the Registrar or co-Registrar of written instructions, or such other form of instructions as is customary for the Depository, from the Depository or its nominee on behalf of any Person having a beneficial interest in a Global Note and upon receipt by the Trustee of a written order or such other form of instructions as is customary for the Depository or the Person designated by the Depository as having such a beneficial interest containing registration instructions and, in the case of any such transfer or exchange of a beneficial interest in Notes the offer and sale of which have not been registered under the Securities Act and which Notes are presented for transfer or exchange prior to the Resale Restriction Termination Date, the following additional information and documents:

(A) if such beneficial interest is being transferred to the Person designated by the Depository as being the beneficial owner, a certification from such Person to that effect (substantially in the form of Exhibit B hereto); or

-34-

(B) if such beneficial interest is being transferred to a Qualified Institutional Buyer in accordance with Rule 144A, a certification to that effect (substantially in the form of Exhibit B hereto); or

(C) if such beneficial interest is being transferred in reliance on Regulation S, delivery of a certification to that effect (substantially in the form of Exhibit B hereto) and a transferor certificate for Regulation S transfers substantially in the form of Exhibit D hereto; or

(D) if such beneficial interest is being transferred to an Institutional Accredited Investor, delivery of certification (substantially in the form of Exhibit B hereto), a certificate of the transferee in substantially the form of Exhibit C and, at the option of the Issuers in the case of transfers of Notes with an aggregate principal amount of less than $250,000, an Opinion of Counsel reasonably satisfactory to the Issuers to the effect that such transfer is in compliance with the Securities Act; or

(E) if such beneficial interest is being transferred in reliance on Rule 144 under the Securities Act, delivery of a certification to that effect (substantially in the form of Exhibit B hereto) and, at the option of the Issuers, an Opinion of Counsel reasonably satisfactory to the Issuers to the effect that such transfer is in compliance with the Securities Act; or

(F) if such beneficial interest is being transferred in reliance on another exemption from the registration requirements of the Securities Act, a certification to that effect (substantially in the form of Exhibit B hereto) and, at the option of the Issuers, an Opinion of Counsel reasonably satisfactory to the Issuers to the effect that such transfer is in compliance with the Securities Act,

then the Registrar or co-Registrar will cause, in accordance with the standing instructions and procedures existing between the Depository and the Registrar or co-Registrar, the aggregate principal amount of the applicable Global Note to be reduced and, following such reduction, the Issuers will execute and, upon receipt of an authentication order in the form of an Officers’ Certificate in accordance with Section 2.02 hereof, the Trustee will authenticate and deliver to the transferee a Certificated Note in the appropriate principal amount.

(ii) Certificated Notes issued in exchange for a beneficial interest in a Global Note pursuant to this Section 2.16(d) hereof shall be registered in such names and in such authorized denominations as the Depository, pursuant to instructions from its direct or indirect participants or otherwise, shall instruct the Registrar or co-Registrar in writing. The Registrar or co-Registrar shall deliver such Certificated Notes to the Persons in whose names such Certificated Notes are so registered.

(e) Restrictions on Transfer and Exchange of Global Notes. Notwithstanding any other provisions of this Indenture, a Global Note may not be transferred as a whole except by the Depository to a nominee of the Depository or by a nominee of the Depository to the Depository or another nominee of the Depository or by the Depository or any such nominee to a successor Depository or a nominee of such successor Depository.

(f) Private Placement Legend. Upon the transfer, exchange or replacement of Notes not bearing the Private Placement Legend, the Registrar or co-Registrar shall deliver Notes that do not bear the Private Placement Legend. Upon the transfer, exchange or replacement of Notes beating the Private Placement Legend, the Registrar or co-Registrar shall deliver only Notes that bear the Private

-35-

Placement Legend unless, and the Trustee is hereby authorized to deliver Notes without the Private Placement Legend if, (i) the Resale Restriction Termination Date shall have occurred, (ii) there is delivered to the Trustee an Opinion of Counsel reasonably satisfactory to the Issuers and the Trustee to the effect that neither such legend nor the related restrictions on transfer are required in order to maintain compliance with the provisions of the Securities Act or (iii) such Note has been sold pursuant to an effective registration statement under the Securities Act.

(g) General. By its acceptance of any Note bearing the Private Placement Legend, each Holder of such a Note acknowledges the restrictions on transfer of such Note set forth in this Indenture and in the Private Placement Legend and agrees that it will transfer such Note only as provided in this Indenture.

None of the Issuers, the Trustee, any agent of the Issuers or the Trustee (including any Paying Agent or Registrar) will have any responsibility or liability for any aspect of the records relating to or payments made on account of beneficial ownership interests of a global security or for maintaining, supervising or reviewing any records relating to such beneficial ownership interests.

The Trustee shall have no obligation or duty to monitor, determine or inquire as to compliance with any restrictions on transfer imposed under this Indenture or under applicable law with respect to any transfer of any interest in any Note (including any transfers between or among Agent Members or beneficial owners of interest in any Global Note) other than to require delivery of such certificates and other documentation or evidence as are expressly required by, and to do so if and when expressly required by the terms of, this Indenture, and to examine the same to determine substantial compliance as to form with the express requirements hereof.

The Registrar shall retain copies of all letters, notices and other written communications received pursuant to Section 2.15 hereof or this Section 2.16. The Issuers shall have the right to inspect and make copies of all such letters, notices or other written communications at any reasonable time upon the giving of reasonable written notice to the Registrar.

Section 2.17. Restrictive Legends.

Each Global Note and Certificated Note that constitutes a Restricted Security shall bear the following legend (the “Private Placement Legend”) on the face thereof until the Resale Restriction Termination Date, unless otherwise agreed to by the Issuers and the Holder thereof:

THIS SECURITY (OR ITS PREDECESSOR) HAS NOT BEEN REGISTERED UNDER THE U.S. SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”), AND, ACCORDINGLY, MAY NOT BE OFFERED, SOLD, PLEDGED OR OTHERWISE TRANSFERRED WITHIN THE UNITED STATES OR TO, OR FOR THE ACCOUNT OR BENEFIT OF, U.S. PERSONS, EXCEPT AS SET FORTH IN THE NEXT SENTENCE. BY ITS ACQUISITION HEREOF OR OF A BENEFICIAL INTEREST HEREIN, THE HOLDER:

(1) REPRESENTS THAT (A) IT IS A “QUALIFIED INSTITUTIONAL BUYER” (AS DEFINED IN RULE 144A UNDER THE SECURITIES ACT) (A “QIB”), (B) IT IS ACQUIRING THIS SECURITY IN AN OFFSHORE TRANSACTION IN COMPLIANCE WITH REGULATION S UNDER THE SECURITIES ACT, OR (C) IT IS AN INSTITUTIONAL “ACCREDITED INVESTOR” (AS DEFINED IN RULE 501(A)(1), (2), (3) OR (7) OF REGULATION D UNDER THE SECURITIES ACT) (AN “IAI”);

-36-

(2) AGREES THAT IT WILL NOT RESELL OR OTHERWISE TRANSFER THIS SECURITY EXCEPT (A) TO THE PARTNERSHIP OR ANY OF ITS SUBSIDIARIES, (B) TO A PERSON WHOM THE SELLER REASONABLY BELIEVES IS A QIB PURCHASING FOR ITS OWN ACCOUNT OR FOR THE ACCOUNT OF A QIB IN A TRANSACTION MEETING THE REQUIREMENTS OF RULE 144A, (C) IN AN OFFSHORE TRANSACTION MEETING THE REQUIREMENTS OF RULE 903 OR 904 OF REGULATION S UNDER THE SECURITIES ACT, (D) IN A TRANSACTION MEETING THE REQUIREMENTS OF RULE 144 UNDER THE SECURITIES ACT, (E) TO AN IAI THAT, PRIOR TO SUCH TRANSFER, FURNISHES THE TRUSTEE A SIGNED LETTER CONTAINING CERTAIN REPRESENTATIONS AND AGREEMENTS RELATING TO THE TRANSFER OF THIS SECURITY (THE FORM OF WHICH CAN BE OBTAINED FROM THE TRUSTEE) AND, IF SUCH TRANSFER IS IN RESPECT OF AN AGGREGATE PRINCIPAL AMOUNT OF SECURITIES LESS THAN $250,000, AN OPINION OF COUNSEL ACCEPTABLE TO THE PARTNERSHIP, IF THE ISSUERS SO REQUEST, THAT SUCH TRANSFER IS IN COMPLIANCE WITH THE SECURITIES ACT, (F) IN ACCORDANCE WITH ANOTHER EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT (AND BASED UPON AN OPINION OF COUNSEL ACCEPTABLE TO THE ISSUERS, IF THE ISSUERS SO REQUEST), OR (G) PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT AND, IN EACH CASE, IN ACCORDANCE WITH THE APPLICABLE SECURITIES LAWS OF ANY STATE OF THE UNITED STATES OR ANY OTHER APPLICABLE JURISDICTION; AND

(3) AGREES THAT IT WILL DELIVER TO EACH PERSON TO WHOM THIS SECURITY OR AN INTEREST HEREIN IS TRANSFERRED A NOTICE SUBSTANTIALLY TO THE EFFECT OF THIS LEGEND.

AS USED HEREIN, THE TERMS “OFFSHORE TRANSACTION” AND “UNITED STATES” HAVE THE MEANINGS GIVEN TO THEM BY RULE 902 OF REGULATION S UNDER THE SECURITIES ACT. THE INDENTURE GOVERNING THIS SECURITY CONTAINS A PROVISION REQUIRING THE TRUSTEE TO REFUSE TO REGISTER ANY TRANSFER OF THIS SECURITY IN VIOLATION OF THE FOREGOING.

Each Global Note shall also bear the following legend (the “Global Note Legend”):

THIS NOTE IS A GLOBAL NOTE WITHIN THE MEANING OF THE INDENTURE HEREINAFTER REFERRED TO AND IS REGISTERED IN THE NAME OF A DEPOSITORY OR A NOMINEE OF A DEPOSITORY OR A SUCCESSOR DEPOSITORY. THIS NOTE IS NOT EXCHANGEABLE FOR NOTES REGISTERED IN THE NAME OF A PERSON OTHER THAN THE DEPOSITORY OR ITS NOMINEE EXCEPT IN THE LIMITED CIRCUMSTANCES DESCRIBED IN THE INDENTURE, AND NO TRANSFER OF THIS NOTE (OTHER THAN A TRANSFER OF THIS NOTE AS A WHOLE BY THE DEPOSITORY TO A NOMINEE OF THE DEPOSITORY OR BY A NOMINEE OF THE

-37-

DEPOSITORY TO THE DEPOSITORY OR ANOTHER NOMINEE OF THE DEPOSITORY) MAY BE REGISTERED EXCEPT IN THE LIMITED CIRCUMSTANCES DESCRIBED IN THE INDENTURE.

TRANSFERS OF THIS GLOBAL NOTE SHALL BE LIMITED TO TRANSFERS IN WHOLE, BUT NOT IN PART, AND TRANSFERS OF INTERESTS IN THIS GLOBAL NOTE SHALL BE LIMITED TO TRANSFERS MADE IN ACCORDANCE WITH THE RESTRICTIONS SET FORTH IN SECTION 2.16 OF THE INDENTURE.

ARTICLE 3

REDEMPTION

Section 3.01. Notices to Trustee.

If the Issuers elect to redeem Notes pursuant to paragraph 5 of the Notes, at least 15 days prior to the date on which the Partnership notifies the Holders or during such other period as the Trustee may agree to, the Partnership shall notify the Trustee in writing of the Redemption Date, the principal amount of Notes to be redeemed and the Redemption Price, and deliver to the Trustee an Officers’ Certificate stating that such redemption will comply with the conditions contained herein and in the Notes, as appropriate.

Section 3.02. Selection of Notes To Be Redeemed.

In the event that less than all of the Notes are to be redeemed at any time, selection of the Notes to be redeemed shall be made by the Trustee in compliance with the requirements of the principal national securities exchange, if any, on which such Notes are listed or, if such Notes are not then listed on a national security exchange, on a pro rata basis, by lot or by such method as the Trustee shall deem fair and appropriate; provided, however, that no Notes of a principal amount of $2,000 or less shall be redeemed in part; provided, further, that if a partial redemption is made with the proceeds of any Qualified Equity Offering, selection of the Notes or portions thereof for redemption shall be made by the Trustee only on a pro rata basis or on as nearly a pro rata basis as is practicable (subject to the procedures of the Depository), unless such method is otherwise prohibited.

Section 3.03. Notice of Redemption.

Notice of redemption shall be mailed by the Partnership (or at the request of the Partnership, by the Trustee) by first class mail at least 30 but not more than 60 days before the Redemption Date to each Holder to be redeemed at its registered address, except that redemption notices may be mailed more than 60 days prior to a Redemption Date if the notice is issued in connection with a satisfaction and discharge of this Indenture.

The notice shall identify the Notes to be redeemed (including the CUSIP, ISIN or other number(s) thereof) and shall state:

(1) the Redemption Date;

-38-

(2) the Redemption Price, if then determinable (and if not, then the basis for its determination) and the amount of accrued interest, if any, to be paid per $1,000 principal amount of Notes;

(3) that, if any Note is being redeemed in part, the portion of the principal amount (equal to $2,000 or any integral multiple of $1,000 in excess thereof) of such Note to be redeemed and that, on and after the Redemption Date, upon surrender of such Note, a new Note or Notes in principal amount equal to the unredeemed portion thereof will be issued;

(4) the name, address and telephone number of the Paying Agent;

(5) that Notes called for redemption must be surrendered to the Paying Agent at the address specified to collect the Redemption Price plus accrued interest, if any;

(6) that, unless the Issuers default in making the redemption payment, interest on Notes called for redemption ceases to accrue on and after the Redemption Date and the only remaining right of the Holders is to receive payment of the Redemption Price plus accrued interest to the Redemption Date upon surrender of the Notes to the Paying Agent;

(7) the subparagraph of the Notes pursuant to which the Notes called for redemption are being redeemed; and

(8) if fewer than all the Notes are to be redeemed, the identification of the particular Notes (or portion thereof) to be redeemed, as well as the aggregate principal amount of Notes to be redeemed and the aggregate principal amount of Notes to be outstanding after such partial redemption.

Section 3.04. Effect of Notice of Redemption.

Once the notice of redemption described in Section 3.03 hereof is mailed, Notes called for redemption become due and payable on the Redemption Date and at the Redemption Price, including any premium, plus accrued interest to the Redemption Date, if any. Upon surrender to the Paying Agent, such Notes shall be paid at the Redemption Price, including any premium, plus accrued interest to the Redemption Date, if any; provided that if the Redemption Date is after a Record Date and on or prior to the Interest Payment Date, the accrued interest shall be payable to the Holder of the redeemed Notes registered on the relevant Record Date.

Section 3.05. Deposit of Redemption Price.

(a) By 11:00 a.m., New York City time, on each Redemption Date, the Issuers shall have deposited with the Paying Agent in immediately available funds U.S. Dollars sufficient to pay the Redemption Price of and accrued interest on all Notes to be redeemed on that date.

(b) On and after any Redemption Date, if U.S. Dollars sufficient to pay the Redemption Price of and accrued interest on Notes called for redemption shall have been made available in accordance with clause (a), the Notes called for redemption will cease to accrue interest and the only right of the Holders of such Notes will be to receive payment of the Redemption Price of and, subject to the proviso in Section 3.04, accrued and unpaid interest on such Notes to the Redemption Date. If any Note called for redemption shall not be so paid, interest will continue to accrue and be paid, from the Redemption Date until such redemption payment is made, on the unpaid principal of the Note and any interest not paid on such unpaid principal, in each case, at the rate and in the manner provided for in Section 2.12 hereof.

-39-

Section 3.06. Notes Redeemed in Part.

Upon surrender of a Note that is redeemed in part, the Trustee shall authenticate for a Holder a new Note equal in principal amount to the unredeemed portion of the Note surrendered.

ARTICLE 4

COVENANTS

Section 4.01. Payment of Notes.

The Issuers shall pay the principal of and interest on the Notes on the dates and in the manner provided in the Notes and this Indenture. An installment of principal or interest shall be considered paid on the date it is due if the Trustee or Paying Agent holds, for the benefit of the Holders, by 11:00 a.m., New York City time, on that date U.S. Dollars in immediately available funds designated for and sufficient to pay such installment in full.

The Issuers shall pay interest on overdue principal and interest on overdue interest, to the extent lawful as provided for in Section 2.12 hereof.

Section 4.02. Reports to Holders.

(a) So long as any Notes are outstanding, the Partnership shall furnish to the Holders:

(1) within 90 days after the end of each fiscal year (120 days, in the case of the year ending December 31, 2006), (A) a management report setting forth a narrative report and a “Management’s Discussion and Analysis of Financial Condition and Results of Operations,” for such period, (B) audited financial statements prepared in accordance with GAAP, substantially of the type that would have been required to be contained in an Annual Report on Form 10-K under the Exchange Act if the Partnership had been a reporting company under the Exchange Act (including, with respect to annual statements only, an auditor’s report), and (C) a presentation of pro forma EBITDA of the Partnership and its Subsidiaries generally consistent with the presentation thereof made by the Partnership to the Partnership’s lenders under the Credit Agreement; and

(2) within 45 days after the end of each of the first three fiscal quarters of each fiscal year, (A) a management report setting forth a narrative report and a “Management’s Discussion and Analysis of Financial Condition and Results of Operations,” (B) unaudited quarterly financial statements prepared in accordance with GAAP, substantially of the type that would have been required to be contained in a Quarterly Report on Form 10-Q under the Exchange Act if the Partnership had been a reporting company under the Exchange Act, and (C) a presentation of pro forma EBITDA of the Partnership and its Subsidiaries generally consistent with the presentation thereof made by the Partnership to the Partnership’s lenders under the Credit Agreement; and

(3) within 10 Business Days after the time periods specified by the SEC’s rules and regulations, information substantively of the type that would be required to be filed with the SEC on Form 8-K (if the Partnership were required to file such reports) under the following items of Form 8-K:

-40-

Item 1.03 (Bankruptcy or Receivership); Item 2.03 (Creation of a Direct Financial Obligation or an Obligation under an Off-Balance Sheet Arrangement of a Registrant), to the extent relating to an off-balance sheet transaction; Item 2.04 (Triggering Events that Accelerate or Increase a Direct Financial Obligation or an Obligation under an Off-Balance Sheet Arrangement) with respect to any off-balance sheet transaction and any agreement the default under which would constitute an Event of Default under this Indenture if accelerated; Item 2.05 (Costs Associated with Exit or Disposal Activities); Item 2.06 (Material Impairments); Item 4.01 (Changes in Registrant’s Certifying Accountant); Item 4.02 (Non-Reliance on Previously Issued Financial Statements or a Related Audit Report or Completed Interim Review); Item 5.01 (Changes in Control of Registrant) and Item 5.02 (Departure of Directors or Principal Officers; Election of Directors; Appointment of Principal Officers); and

(4) historical financial information and analysis, as and to the extent provided by the Partnership to the lenders under the Credit Agreement, in respect of any business acquired by the Partnership or any Restricted Subsidiary for consideration in excess of 15% of the Partnership’s Consolidated Tangible Assets.

At any time that any of the Partnership’s Subsidiaries are Unrestricted Subsidiaries, then the quarterly and annual information required by the preceding paragraph shall include a reasonably detailed presentation, either on the face of the financial statements or in the footnotes thereto, and in “Management’s Discussion and Analysis of Financial Condition and Results of Operations” or other comparable section, of the financial condition and results of operations of the Partnership and its Restricted Subsidiaries separate from the financial condition and results of operations of the Unrestricted Subsidiaries of the Partnership.

(b) Notwithstanding the foregoing:

(1) Sarbanes-Oxley. No certifications or attestations concerning the financial statements or disclosure controls and procedures or internal controls that would otherwise be required pursuant to the Sarbanes-Oxley Act of 2002 shall be required (provided, further, however, that nothing contained in the terms of this Indenture shall otherwise require the Partnership to comply with the terms of the Sarbanes-Oxley Act of 2002 at any time when it would not otherwise be subject to such statute);

(2) Financial Statements of Acquired Entities. The financial statements required of acquired businesses shall be limited to the financial statements (in whatever form) that the Partnership receives in connection with the acquisition, whether or not audited;

(3) Financial Statements of Unconsolidated Entities. No financial statements of unconsolidated entities shall be required;

(4) Segment Reporting. The Partnership shall not be required to prepare its financial statements in accordance with SFAS No. 131; provided, however, that the Partnership shall include in such reports (in the results of operations discussion in the “Management’s Discussion and Analysis of Financial Condition and Results of Operations” section of such report or, if no such section is required, in such other similarly prominent section of such report) information regarding the net sales (including net sales of principal product categories and net sales to principal categories of customers, to the extent material) and the material reasons for changes with respect to such financial measure (and the measures with respect to products and customers) with respect to each portion of its business that would constitute a separate operating segment under SFAS No. 131;

-41-

(5) Mezzanine Securities. The Partnership shall not be required to comply with SFAS No. 150 in respect of any period prior to the date of this Indenture;

(6) Supplemental Schedules. The schedules identified in Section 5-04 of Regulation S-X shall not be required; and

(7) Non-GAAP Information. Compliance with Regulation G and Item 10(e) of Regulation S-K shall not be required with respect to any non-GAAP financial information.

(c) The Partnership shall post the reports specified in Section 4.02(a) above on a website, no later than the date fumished to the Holders, and maintain such posting so long as any Notes remain outstanding; provided, however, that such website may be password protected so long as the Partnership makes reasonable efforts to notify the Trustee and the Holders ofpostings to the website (including through the information dissemination procedures of the depositary for the Notes) and to provide the Trustee and the Holders with access to such website.

(d) In the event that any direct or indirect parent company of the Partnership becomes a Guarantor of the Notes at the time of or following an initial public offering of such parent company, the Partnership shall be permitted to satisfy its obligations under this Section 4.02 with respect to fmancial information relating to the Partnership (including the information in subsections (1)(B) and (C) and 2(B) and (C) in subclause (a) of this Section 4.02) by furnishing financial information relating to such parent company; provided, however, that the same is accompanied by consolidating information that explains in reasonable detail the differences between the information relating to such parent company and any of its Subsidiaries, on the one hand, and the information relating to the Partnership and its Subsidiaries, on a standalone basis, on the other hand.

The Partnership shall participate in quarterly conference calls to discuss its results of operations with Holders. Within 5 Business Days prior to such conference calls, the Partnership shall use reasonable efforts to inform Holders of such calls. Access to such conference calls may be password-protected so long as the Partnership takes reasonable steps to provide the Holders with access to such calls.

In addition, the Partnership shall fumish to Holders, prospective investors, broker-dealers and securities analysts, upon their request, any information required to be delivered pursuant to Rule 144A(d)(4) under the Securities Act so long as the Notes are not feely transferable under the Securities Act.

Section 4.03. Waiver of Stay, Extension or Usury Laws.

The Issuers and each of the Guarantors covenant (to the extent that they may lawfully do so) that they will not at any time insist upon, or plead (as a defense or otherwise) or in any manner whatsoever claim or take the benefit or advantage of, any stay or extension law or any usury law or other law which would prohibit or forgive the Issuers from paying all or any portion of the principal of, premium, if any, and/or interest on the Notes as contemplated herein, wherever enacted, now or at any time hereafter in force, or which may affect the covenants or the performance of this Indenture; and (to the extent that they may lawfully do so) the Issuers and each of the Guarantors hereby expressly waive all benefit or advantage of any such law, and covenant that they will not hinder, delay or impede the execution of any power herein granted to the Trustee, but will suffer and permit the execution of every such power as though no such law had been enacted.

-42-

Section 4.04. Compliance Certificate; Notice of Default.

(a) The Partnership shall deliver to the Trustee, within 90 days after the end of its fiscal year an Officers’ Certificate (one of the signers of which shall be the principal executive officer, principal financial officer or principal accounting officer of the Partnership) stating that a review of the activities of the Issuers and their Subsidiaries during such fiscal year has been made under the supervision of the signing Officers with a view to determining whether the Issuers have kept, observed, performed and fulfilled their obligations under this Indenture, and further stating, as to each such Officer signing such certificate, that to the best of his or her knowledge the Issuers have kept, observed, performed and fulfilled each and every covenant contained in this Indenture and are not in default in the performance or observance of any of the terms, provisions and conditions hereof (or, if a Default or Event of Default shall have occurred, describing all or such Defaults or Events of Default of which he or she may have knowledge and what action each is taking or proposes to take with respect thereto). The Officers’ Certificate shall also notify the Trustee should either of the Issuers elect to change the manner in which it fixes its fiscal year end.

(b) The year-end financial statements delivered pursuant to Section 4.02(a) above shall be accompanied, to the degree reasonably available to the Partnership, by a written statement of the Partnership’s independent public accountants that in making the examination necessary for certification such financial statements, nothing has come to their attention that would lead them to believe that the Issuers have violated any provisions of Article 4 or Article 5 hereof or, if any such violation has occurred, specifying the nature and period of existence thereof, it being understood that such accountants shall not be liable directly or indirectly to any Person for any failure to obtain knowledge of any such violation.

(c) (i) If any Officer of either of the Issuers becomes aware that any Default has occurred and is continuing or (ii) if any Officer of either of the Issuers becomes aware that any Holder seeks to exercise any remedy hereunder with respect to a claimed Default under this Indenture of the Notes, the Partnership shall deliver to the Trustee, at its address set forth in Section 11.02 hereof, by registered or certified mail or facsimile transmission followed by hard copy by overnight courier, registered or certified mail an Officers’ Certificate specifying such Default, notice or other action, the status thereof and what action the Partnership is taking or proposes to take within five Business Days of his becoming aware of such occurrence.

Section 4.05. Payment of Taxes and Other Claims.

The Partnership shall pay or discharge or cause to be paid or discharged, before the same shall become delinquent, (i) all material taxes, assessments and governmental charges (including withholding taxes and any penalties, interest and additions to taxes) levied or imposed upon it or any of its Restricted Subsidiaries or properties of it or any of its Restricted Subsidiaries and (ii) all lawful claims for labor, materials and supplies that, if unpaid, might by law become a Lien upon the property of it or any of its Restricted Subsidiaries; provided, however, that the Partnership shall not be required to pay or discharge or cause to be paid or discharged any such tax, assessment, charge or claim whose amount, applicability or validity is being contested in good faith by appropriate proceedings properly instituted and diligently conducted for which adequate reserves, to the extent required under GAAP, have been taken.

-43-

Section 4.06. Corporate/Limited Partnership Existence.

Subject to Article 5 hereof, the Partnership shall each do or cause to be done all things necessary to preserve and keep in full force and effect (i) its limited partnership existence, and the corporate, partnership or limited liability company or other existence of each Restricted Subsidiary, in accordance with the respective organizational documents (as the same may be amended from time to time) of each Restricted Subsidiary and (ii) the material rights (charter and statutory), licenses and franchises of the Partnership and its Restricted Subsidiaries except where the failure to preserve and keep in full force and effect any such rights, licenses and franchise shall not have a material adverse effect on the financial condition, business, operations or prospects of the Partnership and its Restricted Subsidiaries taken as a whole; and provided that the Partnership shall not be required to preserve any such right, license or franchise, or the corporate, limited liability company, partnership or other existence of any of its Restricted Subsidiaries, if the Partnership shall determine that the preservation thereof is no longer desirable in the conduct of the business of the Partnership and its Restricted Subsidiaries, taken as a whole, and that the loss thereof is not adverse in any material respect to the Holders.

Section 4.07. Maintenance of Office or Agency.

The Issuers shall maintain an office or agency in the Borough of Manhattan, The City of New York where Notes may be surrendered for payment, and the Issuers shall maintain an office or agency where Notes may be surrendered for registration of transfer or exchange and where notices and demands to or upon the Issuers in respect of the Notes and this Indenture may be served. The Issuers shall give prompt written notice to the Trustee of the location, and any change in the location, of any such office or agency not designated herein. If at any time the Issuers shall fail to maintain any such required office or agency or shall fail to furnish the Trustee with the address thereof, such presentations, surrenders, notices and demands may be made or served at 101 Barclay Street, 8W, New York, New York 10286, Attention: Corporate Trust Administration.

The Issuers hereby initially designate (i) 101 Barclay Street, 8W, New York, New York 10286, Attention: Corporate Trust Administration as an office or agency where Notes may be surrendered for payment and (ii) the Corporate Trust Office of the Trustee where Notes may be presented or surrendered for all other such purposes.

The Issuers may also from time to time designate one or more other offices or agencies where the Notes may be presented or surrendered for any or all such purposes and may from time to time rescind such designations.

Section 4.08. Compliance with Laws.

The Partnership shall comply, and shall cause each of its Restricted Subsidiaries to comply, with all applicable statutes, rules, regulations, orders and restrictions of the United States of America, all states and municipalities thereof, and of any governmental department, commission, board, regulatory authority, bureau, agency and instrumentality of the foregoing, in respect of the conduct of their respective businesses and the ownership of their respective properties, except for such noncompliances as would not in the aggregate have a material adverse effect on the financial condition or results of operations of the Partnership and its Restricted Subsidiaries taken as a whole.

-44-

Section 4.09. Maintenance of Properties and Insurance.

(a) The Partnership shall cause all material properties owned by or leased by it or any of its Restricted Subsidiaries used or useful to the conduct of the Partnership’s business or the business of any of its Restricted Subsidiaries to be maintained and kept in normal condition, repair and working order and supplied with all necessary equipment and shall cause to be made all necessary repairs, renewals, replacements, betterments and improvements thereof, all as in its judgment may be necessary, so that the business carried on in connection therewith may be properly and advantageously conducted at all times; provided, however, that nothing in this Section 4.09 shall prevent the Partnership or any of its Restricted Subsidiaries from discontinuing the use, operation or maintenance of any of such properties, or disposing of any of them, if such discontinuance or disposal is, in the judgment of the Board of Directors of the Partnership or of the Board of Directors of any Restricted Subsidiary of the Partnership concerned, or of an officer (or other agent employed by the Partnership or of any of its Restricted Subsidiaries) of the Partnership or any of its Restricted Subsidiaries having managerial responsibility for any such property, desirable in the conduct of the business of the Partnership or any Restricted Subsidiary of the Partnership, and if such discontinuance or disposal is not adverse in any material respect to the Holders.

(b) The Partnership shall maintain, and shall cause its Restricted Subsidiaries to maintain, insurance with responsible carriers against such risks and in such amounts, and with such deductibles, retentions, self-insured amounts and co-insurance provisions, as are customarily carried by similar businesses of similar size, including property and casualty loss, workers’ compensation and interruption of business insurance.

Section 4.10. Limitations on Additional Indebtedness and Preferred Stock.

(a) The Partnership shall not, and shall not permit any Restricted Subsidiary to, directly or indirectly, incur any Indebtedness and shall not permit any Restrict Subsidiary to issue Preferred Stock; provided that the Partnership or any Guarantor may incur additional Indebtedness (including Acquired Indebtedness) and any Guarantor may issue Preferred Stock in each case, if, after giving effect thereto, the Consolidated Interest Coverage Ratio would be at least 2.00 to 1.00 (the “Coverage Ratio Exception”).

(b) Notwithstanding the above, each of the following shall be permitted (the “Permitted Indebtedness”):

(1) Indebtedness of the Partnership and any Guarantor under the Credit Facilities in an aggregate amount at any time outstanding incurred pursuant to this clause (1) not to exceed the greater of (i) $200.0 million minus, to the extent a permanent repayment and/or commitment reduction is required thereunder as a result of such application, the aggregate amount of Net Available Proceeds applied to repayments under the Credit Facilities in accordance with Section 4.12 and (b) $125.0 million plus 30% of the Partnership’s Consolidated Tangible Assets;

(2) Indebtedness under the Notes and the Note Guarantees issued on the Issue Date;

(3) Indebtedness of the Partnership and the Restricted Subsidiaries to the extent outstanding on the Issue Date after giving effect to the intended use of proceeds of the Notes (other than Indebtedness referred to in Section 4.10(b)(1), (2) or (5));

-45-

(4) Indebtedness under Hedging Obligations entered into for bona fide hedging purposes of the Partnership or any Restricted Subsidiary and not for the purpose of speculation; provided that in the case of Hedging Obligations relating to interest rates, (a) such Hedging Obligations relate to payment obligations on Indebtedness otherwise permitted to be incurred by this Section 4.10, and (b) the notional principal amount of such Hedging Obligations at the time incurred does not exceed the principal amount of the Indebtedness to which such Hedging Obligations relate;

(5) Indebtedness of the Partnership owed to a Restricted Subsidiary and Indebtedness of any Restricted Subsidiary owed to the Partnership or any other Restricted Subsidiary; provided, however, that upon any such Restricted Subsidiary ceasing to be a Restricted Subsidiary or such Indebtedness being owed to any Person other than the Partnership or a Restricted Subsidiary, the Partnership or such Restricted Subsidiary, as applicable, shall be deemed to have incurred Indebtedness not permitted by this clause (5);

(6) Indebtedness in respect of (a) self-insurance obligations or completion, bid, performance, appeal or surety bonds issued for the account of the Partnership or any Restricted Subsidiary in the ordinary course of business, including guarantees or obligations of the Partnership or any Restricted Subsidiary with respect to letters of credit supporting such self-insurance, completion, bid, performance, appeal or surety obligations (in each case other than for an obligation for money borrowed) or (b) obligations represented by letters of credit for the account of the Partnership or any Restricted Subsidiary, as the case may be, in order to provide security for workers’ compensation claims;

(7) Purchase Money Indebtedness incurred by the Partnership or any Restricted Subsidiary after the Issue Date, and Refinancing Indebtedness thereof, in an aggregate principal amount not to exceed at any time outstanding the greater of (a) $10.0 million or (b) 3.0% of the Partnership’s Consolidated Tangible Assets;

(8) Indebtedness arising from the honoring by a bank or other financial institution of a check, draft or similar instrument inadvertently (except in the case of daylight overdrafts) drawn against insufficient funds in the ordinary course of business; provided, however, that such Indebtedness is extinguished within five Business Days of incurrence;

(9) Indebtedness arising in connection with endorsement of instruments for deposit in the ordinary course of business;

(10) Refinancing Indebtedness with respect to Indebtedness incurred pursuant to the Coverage Ratio Exception or Section 4.10(b)(2) or (3) above or this Section 4.10(b)(10);

(11) indemnification, adjustment of purchase price, earn-out or similar obligations (including without limitation any Earn Out Obligations), in each case, incurred or assumed in connection with the acquisition or disposition of any business or assets of the Partnership or any Restricted Subsidiary or Equity Interests of a Restricted Subsidiary, other than guarantees of Indebtedness incurred by any Person acquiring all or any portion of such business, assets or Equity Interests for the purpose of financing or in contemplation of any such acquisition; provided that (a) any amount of such obligations included on the face of the balance sheet of the Partnership or any Restricted Subsidiary shall not be permitted under this Section 4.10(b)(11) and (b) in the case of a disposition, the maximum aggregate liability in respect of all such obligations outstanding under this Section 4.10(b)(11) shall at no time exceed the gross proceeds actually received by the Partnership and the Restricted Subsidiaries in connection with such disposition;

-46-

(12) Contingent Obligations of the Partnership and the Guarantors in respect of Indebtedness otherwise permitted under this Section 4.10;

(13) Indebtedness incurred to fund a trust account held by the Trustee for the satisfaction and discharge or defeasance of the Notes, the Note Guarantees and this Indenture in accordance with this Indenture;

(14) Indebtedness of Foreign Restricted Subsidiaries in an aggregate principal amount outstanding at any one time not to exceed 10% of the aggregate Consolidated Tangible Assets of all Foreign Restricted Subsidiaries; and

(15) additional Indebtedness of the Partnership or any Restricted Subsidiary in an aggregate principal amount not to exceed $25.0 million at any time outstanding.

(c) For purposes of determining compliance with this Section 4.10, in the event that an item of Indebtedness meets the criteria of more than one of the categories of Permitted Indebtedness described in Section 4.10(b)(1) through Section 4.10(b)(15) above or is entitled to be incurred pursuant to the Coverage Ratio Exception, the Partnership shall, in its sole discretion, classify such item of Indebtedness and may divide and classify such Indebtedness in more than one of the types of Indebtedness described, except that Indebtedness incurred under the Credit Facilities on the Issue Date shall be deemed to have been incurred under Section 4.10(b)(1) above, and may later reclassify any item of Indebtedness described in Section 4.10(b)(1) through Section 4.10(b)(15) above (provided that at the time of reclassification it meets the criteria in such category or categories). In addition, for purposes of determining any particular amount of Indebtedness under this Section 4.10, guarantees, Liens or letter of credit obligations supporting Indebtedness otherwise included in the determination of such particular amount shall not be included so long as incurred by a Person that could have incurred such Indebtedness.

Section 4.11. Limitations on Restricted Payments.

(a) The Partnership shall not, and shall not permit any Restricted Subsidiary to, directly or indirectly, make any Restricted Payment if at the time of such Restricted Payment:

(l) a Default shall have occurred and be continuing or shall occur as a consequence thereof;

(2) the Partnership is not able to incur at least $1.00 of additional Indebtedness (other than Permitted Indebtedness) pursuant to the Coverage Ratio Exception; or

(3) the amount of such Restricted Payment, when added to the aggregate amount of all other Restricted Payments made after the Issue Date (other than Restricted Payments made pursuant to Section 4.1 l(b)(2), (3), (4)(B), (5), (7), (9) or (10)), exceeds the sum (the “Restricted Payments Basket”) of (without duplication):

(a) 50% of Consolidated Net Income for the period (taken as one accounting period) commencing on the first day of the fiscal quarter in which the Issue Date occurs to and including the last day of the fiscal quarter ended immediately prior to the date of such calculation for which consolidated financial statements are available (or, if such Consolidated Net Income shall be a deficit, minus 100% of such deficit), plus

-47-

(b) 100% of (A) (i) the aggregate net cash proceeds and (ii) the Fair Market Value of (x) marketable securities (other than marketable securities of the Partnership), (y) Equity Interests of a Person (other than the Partnership or an Affiliate of the Partnership) engaged in a Permitted Business and (z) other assets used in any Permitted Business, in the case of clauses (i) and (ii), received by the Partnership since the Issue Date as a contribution to its common equity capital or from the issue or sale of Qualified Equity Interests of the Partnership or from the issue or sale of convertible or exchangeable Disqualified Equity Interests or convertible or exchangeable debt securities of the Partnership that have been converted into or exchanged for such Qualified Equity Interests (other than Equity Interests or debt securities sold to a Subsidiary of the Partnership), and (B) the aggregate net cash proceeds, if any, received by the Partnership or any of its Restricted Subsidiaries upon any conversion or exchange described in clause (A) above, plus

(c) 100% of (A) the aggregate amount by which Indebtedness (other than any Subordinated Indebtedness) of the Partnership or any Restricted Subsidiary is reduced on the Partnership’s consolidated balance sheet upon the conversion or exchange (other than by a Subsidiary of the Partnership) after the Issue Date of any such Indebtedness into or for Qualified Equity Interests of the Partnership and (B) the aggregate net cash proceeds, if any, received by the Partnership or any of its Restricted Subsidiaries upon any conversion or exchange described in clause (A) above, plus

(d) in the case of the disposition or repayment of or return on any Investment that was treated as a Restricted Payment made after the Issue Date, an amount (to the extent not included in the computation of Consolidated Net Income) equal to the lesser of (i) 100% of the aggregate amount received by the Partnership or any Restricted Subsidiary in cash or other property (valued at the Fair Market Value thereof) as the return of capital with respect to such Investment and (ii) the amount of such Investment that was treated as a Restricted Payment, in either case, less the cost of the disposition of such Investment and net’ of taxes, plus

(e) any dividends received by the Partnership or a Guarantor after the Issue Date from an Unrestricted Subsidiary to the extent that such dividends were not otherwise included in Consolidated Net Income of the Partnership for such period, plus

(f) upon a Redesignation of an Unrestricted Subsidiary as a Restricted Subsidiary, the lesser of (i) the Fair Market Value of the Partnership’s proportionate interest in such Subsidiary immediately following such Redesignation, and (ii) the aggregate amount of the Partnership’s Investments in such Subsidiary to the extent such Investments reduced the Restricted Payments Basket and were not previously repaid or otherwise reduced.

(b) Notwithstanding the foregoing, the provisions set forth in Section 4.11 (a) will not prohibit:

(l) the payment of (a) any dividend or redemption payment or the making of any distribution within 60 days after the date of declaration thereof if, on the date of declaration, the dividend, redemption or distribution payment, as the case may be, would have complied with the provisions of this Indenture or (b) any dividend or similar distribution by a Restricted Subsidiary of the Partnership to the holders of its Equity Interests on a pro rata basis;

-48-

(2) the redemption or acquisition of any Equity Interests of the Partnership or any Restricted Subsidiary in exchange for, or out of the proceeds of the substantially concurrent issuance and sale of, Qualified Equity Interests;

(3) the purchase, repurchase, redemption, defeasance or other acquisition or retirement for value of Subordinated Indebtedness of the Partnership or any Restricted Subsidiary (a) in exchange for, or out of the proceeds of the substantially concurrent issuance and sale of, Qualified Equity Interests, (b) in exchange for, or out of the proceeds of the substantially concurrent incurrence of, Refinancing Indebtedness permitted to be incurred under Section 4.10 and the other terms of this Indenture or (c) upon a Change of Control or in connection with an Asset Sale to the extent required by the agreement governing such Subordinated Indebtedness but only if the Partnership shall have complied with Section 4.15 and Section 4.12 and purchased all Notes validly tendered pursuant to the relevant offer prior to redeeming such Subordinated Indebtedness;

(4) payments to Holdings to permit Holdings to effect the redemption, repurchase or other acquisition or retirement for value of Equity Interests of Holdings held by officers, directors or employees or former officers, directors or employees (or their transferees, estates or beneficiaries under their estates), either (x) upon any such individual’s death, disability, retirement, severance or termination of employment or service or (y) pursuant to any equity subscription agreement, stock option agreement, stockholders’ agreement or similar agreement; provided, in any case, that the aggregate cash consideration paid for all such redemptions, repurchases or other acquisitions or retirements shall not exceed (A) $2.5 million during any calendar year (with unused amounts in any calendar year being carried forward to the next succeeding calendar year) plus (B) the amount of any net cash proceeds received by or contributed to the Partnership from the issuance and sale after the Issue Date of Qualified Equity Interests of Holdings or its Affiliates to officers, directors or employees of the Partnership and its Subsidiaries that have not been applied to the payment of Restricted Payments pursuant to this clause (4), plus (C) the net cash proceeds of any “key-man” life insurance policies that have not been applied to the payment of Restricted Payments pursuant to this clause (4);

(5) (a) repurchases, redemptions or other acquisitions or retirements for value of Equity Interests deemed to occur upon the exercise of stock options, warrants, rights to acquire Equity Interests or other convertible securities to the extent such Equity Interests represent a portion of the exercise or exchange price thereof and (b) any repurchases, redemptions or other acquisitions or retirements for value of Equity Interests made in lieu of withholding taxes in connection with any exercise or exchange of stock options, warrants or other similar rights;

(6) dividends on Preferred Stock or Disqualified Equity Interests issued in compliance with Section 4.10 to the extent such dividends are included in the definition of Consolidated Interest Expense;

(7) the payment of cash in lieu of fractional Equity Interests;

-49-

(8) payments or distributions to dissenting stockholders pursuant to applicable law in connection with a merger, consolidation or transfer of assets that complies with the provisions of Article 5;

(9) so long as the Partnership is treated for U.S. federal tax purposes as a disregarded entity or partnership, Permitted Tax Distributions to Holdings;

(10) to the extent actually used by Holdings to pay such taxes, costs and expenses, (A) payments by the Partnership to or on behalf of Holdings in an amount sufficient to pay franchise taxes and other fees required to maintain the legal existence of Holdings and (B) payments by the Partnership to or on behalf of Holdings in an amount sufficient to pay out-of-pocket legal, accounting and filing costs and other expenses in the nature of overhead in the ordinary course of business of Holdings; or

(11) payment of other Restricted Payments from time to time in an aggregate amount not to exceed $10.0 million in any fiscal year;

provided that (a) in the case of any Restricted Payment pursuant to clauses (3), (4), (6), (10) or (11) of this Section 4.11 (b), no Default shall have occurred and be continuing or occur as a consequence thereof and (b) no issuance and sale of Qualified Equity Interests used to make a payment pursuant to clauses (2), (3) or (4)(B) above shall increase the Restricted Payments Basket. For the avoidance of doubt, payments by the Partnership to Oilfield Holdings to be paid to Carlyle/Riverstone Energy Partners II, L.P. or its Affiliates pursuant to Section 7.9 of the Oilfield Holdings Partnership Agreement in effect as of the Issue Date and to be paid to partners of Oilfield Holdings pursuant to Section 6.3 of the Oilfield Holdings Partnership Agreement in effect as of the Issue Date shall not be considered Restricted Payments.

Section 4.12. Limitations on Asset Sales.

(a) The Partnership shall not, and shall not permit any Restricted Subsidiary to, directly or indirectly, consummate any Asset Sale unless:

(1) the Partnership or such Restricted Subsidiary receives consideration at the time of such Asset Sale at least equal to the Fair Market Value of the assets included in such Asset Sale; and

(2) at least 75% of the total consideration received by the Partnership and its Restricted Subsidiaries in such Asset Sale and in all other Asset Sales since the Issue Date consists of cash or Cash Equivalents.

For purposes of Section 4.12(a)(2), the following shall be deemed to be cash:

(a) the amount (without duplication) of any Indebtedness (other than Subordinated Indebtedness) of the Partnership or such Restricted Subsidiary that is expressly assumed by the transferee of any such assets pursuant to (i) a written novation agreement that releases the Partnership or such Restricted Subsidiary from further liability therefor or (ii) an assignment agreement that includes, in lieu of such a release, the agreement of the transferee or its parent company to indemnify and hold harmless the Partnership or such Restricted Subsidiary from and against any loss, liability or cost in respect of such assumed liability,

-50-

(b) the amount of any obligations received from such transferee that are within 30 days after such Asset Sale converted by the Partnership or such Restricted Subsidiary into cash (to the extent of the cash actually so received), and

(c) the Fair Market Value of (i) any assets (other than securities) received by the Partnership or any Restricted Subsidiary to be used by it in a Permitted Business, (ii) Equity Interests in a Person that is a Restricted Subsidiary or in a Person engaged in a Permitted Business that shall become a Restricted Subsidiary immediately upon the acquisition of such Person by the Partnership or (iii) a combination of (i) and (ii).

(b) If at any time any non-cash consideration received by the Partnership or any Restricted Subsidiary, as the case may be, in connection with any Asset Sale is repaid or converted into or sold or otherwise disposed of for cash (other than interest received with respect to any such non-cash consideration), then the date of such repayment, conversion or disposition shall be deemed to constitute the date of an Asset Sale hereunder and the Net Available Proceeds thereof shall be applied in accordance with this Section 4.12.

(c) Any Asset Sale pursuant to a condemnation, appropriation or other similar taking, including by deed in lieu of condemnation, or pursuant to the foreclosure or other enforcement of a Permitted Lien or exercise by the related lienholder of rights with respect thereto, including by deed or assignment in lieu of foreclosure shall not be required to satisfy the conditions set forth in Section 4.12(a)(1) and (a)(2).

(d) If the Partnership or any Restricted Subsidiary engages in an Asset Sale, the Partnership or such Restricted Subsidiary shall, no later than 365 days following the consummation thereof, apply all or any of the Net Available Proceeds therefrom to:

(i) satisfy all mandatory repayment obligations under the Credit Facilities arising by reason of such Asset Sale, and in the case of any such repayment under any revolving credit facility, effect a permanent reduction in the availability under such revolving credit facility;

(ii) repay any Indebtedness that was secured by the assets sold in such Asset Sale; and/or

(iii)(A) make any capital expenditure or otherwise invest all or any part of the Net Available Proceeds thereof in the purchase of assets (other than securities and current assets) to be used by the Partnership or any Restricted Subsidiary in the Permitted Business, (B) acquire Qualified Equity Interests in a Person that is a Restricted Subsidiary or in a Person engaged in a Permitted Business that shall become a Restricted Subsidiary immediately upon the consummation of such acquisition or (C) a combination of (A) and (B).

(e) The amount of Net Available Proceeds not applied or invested as provided in the preceding clause (d) shall constitute “Excess Proceeds.”

(f) When the aggregate amount of Excess Proceeds equals or exceeds $15.0 million, the Partnership shall be required to make an offer to purchase from all Holders and, if applicable, purchase or redeem (or make an offer to do so) any Pari Passu Indebtedness of the Partnership the provisions of which require the Partnership to purchase or redeem such Indebtedness with the proceeds from any Asset Sales (or offer to do so), in an aggregate principal amount of Notes and such Pari Passu Indebtedness equal to the amount of such Excess Proceeds as follows:

-51-

(1) the Partnership will (a) make an offer to purchase (a “Net Proceeds Offer”) to all Holders in accordance with the procedures set forth in this Indenture, and (b) purchase or redeem (or make an offer to do so) any such other Pari Passu Indebtedness, pro rata in proportion to the respective principal amounts of the Notes and such other Indebtedness required to be purchased or redeemed, the maximum principal amount of Notes and Pari Passu Indebtedness that may be purchased or redeemed out of the amount (the “Payment Amount”) of such Excess Proceeds;

(2) the offer price for the Notes will be payable in cash in an amount equal to 100% of the principal amount of the Notes tendered pursuant to a Net Proceeds Offer, plus accrued and unpaid interest thereon, if any, to the date such Net Proceeds Offer is consummated (the “Offered Price”), in accordance with the procedures set forth in this Indenture, and the purchase or redemption price for such Pari Passu Indebtedness (the “Pari Passu Indebtedness Price”) shall be as set forth in the related documentation governing such Indebtedness;

(3) if the aggregate Offered Price of Notes validly tendered and not withdrawn by Holders thereof exceeds the pro rata portion of the Payment Amount allocable to the Notes, Notes to be purchased will be selected on a pro rata basis; and

(4) upon completion of such Net Proceeds Offer in accordance with the foregoing provisions, the amount of Excess Proceeds with respect to which such Net Proceeds Offer was made shall be deemed to be zero.

(g) To the extent that the sum of the aggregate Offered Price of Notes tendered pursuant to a Net Proceeds Offer and the aggregate Pari Passu Indebtedness Price paid to the holders of such Pari Passu Indebtedness is less than the Payment Amount relating thereto (such shortfall constituting a “Net Proceeds Deficiency”), the Partnership may use the Net Proceeds Deficiency, or a portion thereof, for any purposes not otherwise prohibited by the provisions of this Indenture.

(h) Notwithstanding the foregoing, the sale, conveyance or other disposition of all or substantially all of the assets of the Partnership and its Restricted Subsidiaries, taken as a whole, will be governed by the provisions of Section 4.15 and/or the provisions of Article 5 and not by the provisions of this Section 4.12.

The Partnership shall comply with applicable tender offer rules, including the requirements of Rule 14e-1 under the Exchange Act and any other applicable laws and regulations in connection with the purchase of Notes pursuant to a Net Proceeds Offer. To the extent that the provisions of any securities laws or regulations conflict with this Section 4.12, the Partnership shall comply with the applicable securities laws and regulations and will not be deemed to have breached its obligations under this Section 4.12 by virtue of this compliance.

Section 4.13. Limitations on Transactions with Affiliates.

(a) The Partnership shall not, and shall not permit any Restricted Subsidiary to, directly or indirectly, in one transaction or a series of related transactions, sell, lease, transfer or otherwise dispose of any of its assets to, or purchase any assets from, or enter into any contract, agreement, understanding, loan, advance or guarantee with, or for the benefit of, any Affiliate (an “Affiliate Transaction”), unless:

-52-

(1) such Affiliate Transaction is on terms that are no less favorable to the Partnership or the relevant Restricted Subsidiary than those that would have been obtained in a comparable transaction at such time on an arm’s-length basis by the Partnership or that Restricted Subsidiary from a Person that is not an Affiliate of the Partnership or that Restricted Subsidiary; and

(2) the Partnership delivers to the Trustee:

(a) with respect to any Affiliate Transaction involving aggregate value in excess of $5.0 million, an Officers’ Certificate certifying that such Affiliate Transaction complies with clause (1) above and a Secretary’s Certificate which sets forth and authenticates a resolution that has been adopted by a majority of the disinterested members of the Board of Directors of the Partnership approving such Affiliate Transaction; and

(b) with respect to any Affiliate Transaction involving aggregate value of $25.0 million or more, the certificates described in the preceding clause (a) and a written opinion as to the fairness of such Affiliate Transaction to the Partnership or such Restricted Subsidiary from a financial point of view issued by an accounting, appraisal or investment banking firm of national standing.

(b) The foregoing restrictions shall not apply to:

(1) transactions exclusively between or among (a) the Partnership and one or more Restricted Subsidiaries or (b) Restricted Subsidiaries;

(2) reasonable director, officer and employee compensation (including bonuses) and other benefits (including pursuant to any employment agreement or any retirement, health, stock option or other benefit plan) and indemnification arrangements, in each case, as determined in good faith by the Partnership’s Board of Directors or senior management;

(3) any Permitted Investments;

(4) any Restricted Payments which do not violate Section 4.11;

(5) (a) any agreement in effect on the Issue Date, as in effect on the Issue Date or as thereafter amended or replaced in any manner that, taken as a whole, is not more disadvantageous to the Holders or the Partnership in any material respect than such agreement as it was in effect on the Issue Date or (b) any transaction pursuant to any agreement referred to in the immediately preceding clause (a);

(6) any transaction with a Person (other than an Unrestricted Subsidiary of the Partnership) which would constitute an Affiliate of the Partnership solely because the Partnership or a Restricted Subsidiary owns an equity interest in or otherwise controls such Person; and

-53-

(7) (a) any transaction with an Affiliate where the only consideration paid by the Partnership or any Restricted Subsidiary is Qualified Equity Interests or (b) proceeds from the issuance or sale of any Qualified Equity Interests or contributions to the capital of the Partnership.

Section 4.14. Limitations on Liens.

The Partnership shall not, and shall not permit any Restricted Subsidiary to, directly or indirectly, create, incur, assume or permit or suffer to exist any Lien securing Indebtedness (other than Permitted Liens) of any nature whatsoever against any assets of the Partnership or any Restricted Subsidiary (including Equity Interests of a Restricted Subsidiary), whether owned at the Issue Date or thereafter acquired, unless contemporaneously therewith:

(1) in the case of any Lien securing any Indebtedness that ranks pari passu with the Notes or a Note Guarantee, effective provision is made to secure the Notes or such Note Guarantee, as the case may be, at least equally and ratably with or prior to such Indebtedness with a Lien on the same collateral; and

(2) in the case of any Lien securing Subordinated Indebtedness, effective provision is made to secure the Notes or such Note Guarantee, as the case may be, with a Lien on the same collateral that is prior to the Lien securing such Subordinated Indebtedness,

in each case, for so long as such Indebtedness is secured by such Lien.

Section 4.15. Change of Control.

(a) Upon the occurrence of any Change of Control, unless the Issuers have previously or concurrently exercised their right to redeem all of the Notes as described in paragraph 5 of the reverse of the Notes, each Holder will have the right to require that the Partnership purchase all or any portion (equal to $2,000 or any integral multiple of $1,000 in excess thereof) of that Holder’s Notes for a cash price (the “Change of Control Purchase Price”) equal to 101% of the principal amount of the Notes to be purchased, plus accrued and unpaid interest thereon, if any, to the date of purchase, subject to the right of Holders of record on the relevant record date to receive interest due on an Interest Payment Date that is on or prior to the purchase date.

(b) Within 30 days following any Change of Control, the Partnership must send by first-class mail, a notice to each Holder, with a copy to the Trustee, which notice shall govern the terms of the Change of Control Offer. Such notice shall state:

(1) that the Change of Control Offer is being made pursuant to this Section 4.15 and that all Notes tendered shall be accepted for payment;

(2) the Change of Control Purchase Price and the purchase date (which shall be a Business Day not earlier than 30 days nor later than 60 days from the date such notice is mailed (the “Change of Control Payment Date”));

(3) that any Note not tendered shall continue to accrue interest;

-54-

(4) that, unless the Partnership defaults in the payment of the Change of Control Purchase Price, any Notes accepted for payment pursuant to the Change of Control Offer shall cease to accrue interest after the Change of Control Payment Date;

(5) that such Change of Control Offer shall remain open for at least 20 Business Days or for such longer period as is required by law and that Holders accepting the offer to have their Notes purchased pursuant to a Change of Control Offer shall be required to surrender the Notes, with the form entitled “Option of the Holder to Elect Purchase” on the reverse of the Note completed, to the Paying Agent at the address specified in the notice prior to the close of business on the third Business Day preceding the Change of Control Payment Date;

(6) that Holders shall be entitled to withdraw their acceptance if the Paying Agent receives, not later than the close of business on the third Business Day preceding the Change of Control Payment Date, a telegram, telex, facsimile transmission or letter setting forth the name of the Holder, the principal amount of the Notes delivered for purchase, and a statement that such Holder is withdrawing his election to have such Notes purchased;

(7) that Holders whose Notes are being purchased only in part shall be issued new Notes equal in principal amount to the unpurchased portion of the Notes surrendered;

(8) any other procedures that a Holder must follow to accept a Change of Control Offer or effect withdrawal of such acceptance; and

(9) the name and address of the Paying Agent.

(c) The Partnership shall publicly announce the results of the Change of Control Offer on or as soon as practicable after the Change of Control Payment Date.

(d) On the Change of Control Payment Date, the Partnership shall, to the extent lawful, (1) accept for payment all Notes or portions of Notes properly tendered pursuant to the Change of Control Offer, (2) deposit with the Paying Agent an amount equal to the Change of Control Purchase Price in respect of all Notes or portions of Notes properly tendered, and (3) deliver or cause to be delivered to the Trustee the Notes properly accepted together with an Officers’ Certificate stating the aggregate principal amount of Notes or portions of Notes being purchased by the Partnership.

(e) The Paying Agent shall as promptly as practicable mail to each Holder of Notes properly tendered the Change of Control Purchase Price for such Notes, and the Trustee shall as promptly as practicable authenticate and mail to each Holder a new Note in principal amount equal to any unpurchased portion of the Notes surrendered, if any; provided however, that each such new Note shall be in a principal amount of $2,000 or any integral multiple of $1,000 in excess thereof.

(f) The Partnership shall comply with applicable tender offer rules, including the requirements of Rule 14e-1 under the Exchange Act and any other laws and regulations to the extent such laws and regulations are applicable in connection with a Change of Control Offer. To the extent that the provisions of any securities laws or regulations conflict with the provisions of this Section 4.15, the Partnership shall comply with the applicable securities laws and regulations and shall not be deemed to have breached its obligations under the provisions of this Section 4.15 by virtue thereof.

-55-

(g) The provisions of this Section 4.15 that require the Partnership to make a Change of Control Offer following a Change of Control shall be applicable regardless of whether any other provisions of this Indenture are applicable to the transaction giving rise to the Change of Control.

(h) The Partnership’s obligation to make a Change of Control Offer shall be satisfied if a third party makes the Change of Control Offer in the manner, at the times and otherwise in compliance with the requirements set forth in this Indenture applicable to a Change of Control Offer made by the Partnership and purchases all Notes properly tendered and not withdrawn under such Change of Control Offer.

(i) Notwithstanding anything to the contrary in this Indenture, a Change of Control Offer may be made in advance of a Change of Control, conditional upon such Change of Control, if a definitive agreement is in place for the Change of Control at the time of making of the Change of Control Offer.

Section 4.16. Limitations on Dividend and Other Restrictions Affecting Restricted Subsidiaries.

The Partnership shall not, and shall not permit any Restricted Subsidiary to create or otherwise cause or permit to exist or become effective any consensual encumbrance or consensual restriction on the ability of any Restricted Subsidiary to:

(a) pay dividends or make any other distributions on or in respect of its Equity Interests;

(b) make loans or advances, or pay any Indebtedness or other obligation owed, to the Partnership or any other Restricted Subsidiary; or

(c) transfer any of its assets to the Partnership or any other Restricted Subsidiary; except for:

(1) encumbrances or restrictions existing under or by reason of applicable law, regulation or order;

(2) encumbrances or restrictions existing under this Indenture, the Notes and the Note Guarantees;

(3) non-assignment provisions of any contract or any lease entered into in the ordinary course of business;

(4) encumbrances or restrictions existing under agreements existing on this date of this Indenture (including, without limitation, the Credit Facilities) as in effect on that date;

(5) restrictions relating to any Lien permitted under this Indenture imposed by the holder of such Lien;

(6) restrictions imposed under any agreement to sell Equity Interests or assets, as permitted under this Indenture, to any Person pending the closing of such sale;

-56-

(7) any instrument governing Acquired Indebtedness or Equity Interests of a Person acquired by the Partnership or any of its Restricted Subsidiaries, which encumbrance or restriction is not applicable to any Person; or the assets of any Person, other than the Person or the assets of the Person so acquired;

(8) any other agreement governing Indebtedness entered into after the Issue Date that contains encumbrances and restrictions that, taken as a whole, are not materially more restrictive with respect to any Restricted Subsidiary than those in effect on the Issue Date with respect to that Restricted Subsidiary pursuant to agreements in effect on the Issue Date (including this Indenture and the Credit Agreement);

(9) customary provisions in partnership agreements, limited liability company organizational governance documents, joint venture agreements and other similar agreements entered into in the ordinary course of business that restrict the transfer of ownership interests in such partnership, limited liability company, joint venture or similar Person;

(10) Purchase Money Indebtedness incurred in compliance with Section 4.10 that imposes restrictions of the nature described in clause (c) above on the assets acquired;

(11) restrictions on cash or other deposits or net worth imposed by customers, suppliers or landlords under contracts entered into in the ordinary course of business;

(12) any instrument relating to any assets acquired after the Issue Date, so long as any encumbrance or restriction imposed thereby relates only to the assets so acquired and was not created in anticipation of such acquisitions;

(13) any encumbrance or restriction applicable only to a Foreign Restricted Subsidiary; and

(14) any encumbrances or restrictions imposed by any amendments or refinancings of the contracts, instruments or obligations referred to in clauses (1) through (13) above; provided that such amendments or refinancings are, in the good faith judgment of the Partnership’s Board of Directors, no more materially restrictive with respect to such encumbrances and restrictions than those prior to such amendment or refinancing.

Section 4.17. Limitations on Sale and Leaseback Transactions.

The Partnership will not, and will not permit any Restricted Subsidiary to, directly or indirectly, enter into any Sale and Leaseback Transaction; provided that the Partnership or any Restricted Subsidiary may enter into a Sale and Leaseback Transaction if:

(1) The Partnership or such Restricted Subsidiary could have (a) incurred the Indebtedness attributable to such Sale and Leaseback Transaction pursuant to Section 4.10 hereof and (b) incurred a Lien to secure such Indebtedness without equally and ratably securing the Notes or Note Guarantees pursuant to Section 4.14 hereof;

(2) the gross cash proceeds of such Sale and Leaseback Transaction are at least equal to the Fair Market Value of the asset that is the subject of such Sale and Leaseback Transaction; and

-57-

(3) the transfer of assets in such Sale and Leaseback Transaction is permitted by, and the Partnership or the applicable Restricted Subsidiary applies the proceeds of such transaction in accordance with, Section 4.12.

Section 4.18. Conduct of Business.

The Partnership shall engage, and shall cause its Restricted Subsidiaries to engage, only in businesses that, when considered together as a single enterprise, are primarily the Permitted Business.

Section 4.19. Limitations on Designation of Unrestricted Subsidiaries.

(a) The Partnership may designate any Subsidiary (other than Finance Corp., but including any newly formed or newly acquired Subsidiary) of the Partnership as an “Unrestricted Subsidiary” under this Indenture (a “Designation”) only if:

(1) no Default shall have occurred and be continuing at the time of or after giving effect to such Designation; and

(2) the Partnership would be permitted to make, at the time of such Designation, (a) a Permitted Investment or (b) an Investment pursuant to clause (a) of Section 4.11 in either case, in an amount (the “Designation Amount”) equal to the Fair Market Value of the Partnership’s proportionate interest in such Subsidiary on such date.

(b) No Subsidiary shall be Designated as an “Unrestricted Subsidiary” unless such Subsidiary:

(1) has no Indebtedness other than Non-Recourse Debt;

(2) is not party to any agreement, contract, arrangement or understanding with the Partnership or any Restricted Subsidiary unless the terms of the agreement, contract, arrangement or understanding are no less favorable to the Partnership or the Restricted Subsidiary than those that might be obtained at the time from Persons who are not Affiliates;

(3) is a Person with respect to which neither the Partnership nor any Restricted Subsidiary has any direct or indirect obligation (a) to subscribe for additional Equity Interests or (b) to maintain or preserve the Person’s financial condition or to cause the Person to achieve any specified levels of operating results; and

(4) has not guaranteed or otherwise directly or indirectly provided credit support for any Indebtedness of the Partnership or any Restricted Subsidiary, except for any guarantee given solely to support the pledge by the Partnership or any Restricted Subsidiary of the Equity Interests of such Unrestricted Subsidiary, which guarantee is not recourse to the Partnership or any Restricted Subsidiary.

(c) If, at any time, any Unrestricted Subsidiary fails to meet the preceding requirements as an Unrestricted Subsidiary, it shall thereafter cease to be an Unrestricted Subsidiary for purposes of this Indenture and any Indebtedness of the Subsidiary and any Liens on assets of such Subsidiary shall be deemed to be incurred by a Restricted Subsidiary at such time and, if the Indebtedness is not permitted to be incurred under Section 4.10 or the Lien is not permitted under Section 4.14, the Partnership shall be in default of the applicable Section.

-58-

(d) The Partnership may redesignate an Unrestricted Subsidiary as a Restricted Subsidiary (a “Redesignation”) only if:

(1) no Default shall have occurred and be continuing at the time of and after giving effect to such Redesignation; and

(2) all Liens, Indebtedness and Investments of such Unrestricted Subsidiary outstanding immediately following such Redesignation would, if incurred or made at such time, have been permitted to be incurred or made for all purposes of this Indenture.

(e) All Designations and Redesignations must be evidenced by resolutions of the Board of Directors of the Partnership, delivered to the Trustee certifying compliance with the foregoing provisions.

Section 4.20. Additional Note Guarantees.

(a) If, after the Issue Date, (1) the Partnership or any Domestic Restricted Subsidiary shall acquire or create another Domestic Restricted Subsidiary, or (2) any Unrestricted Subsidiary is Redesignated a Domestic Restricted Subsidiary or (3) any Foreign Restricted Subsidiary guarantees any Indebtedness of the Partnership or a Domestic Restricted Subsidiary then the Partnership shall cause such Restricted Subsidiary to:

(1) execute and deliver to the Trustee (a) a supplemental indenture substantially in the form specified in this Indenture pursuant to which such Restricted Subsidiary shall unconditionally guarantee all of the Issuers’ obligations under the Notes and this Indenture and (b) a notation of guarantee in respect of its Note Guarantee; and

(2) deliver to the Trustee one or more Opinions of Counsel that such supplemental indenture (a) has been duly authorized, executed and delivered by such Restricted Subsidiary and (b) constitutes a valid and legally binding obligation of such Restricted Subsidiary in accordance with its terms, subject to the exceptions set forth in Section 10.07 hereof;

provided, however, that a Restricted Subsidiary that owns net assets that have an aggregate Fair Market Value of less than 1% of the Consolidated Tangible Assets of the Partnership as of the end of the previous fiscal quarter, need not become a Guarantor.

(b) Notwithstanding the foregoing, if, as of the end of any fiscal quarter, the Domestic Restricted Subsidiaries that are not required to be Guarantors pursuant to Section 4.20(a) collectively own net assets that have an aggregate Fair Market Value equal to or greater than 2% of the Partnership’s Consolidated Tangible Assets, then the Partnership shall cause one or more of such non-Guarantor Domestic Restricted Subsidiaries promptly to become a Guarantor or Guarantors such that after giving effect thereto, the total net assets owned by all such remaining non-Guarantor Domestic Restricted Subsidiaries will have an aggregate Fair Market Value of less than 2% of the Consolidated Tangible Assets of the Partnership. Any such Domestic Restricted Subsidiary so designated must become a Guarantor and execute a supplemental indenture and deliver one or more Opinions of Counsel to the Trustee, as provided in Section 4.20(a), within 15 Business Days of the date on which it was designated.

-59-

Section 4.21. Limitations on Layering Indebtedness.

(a) The Partnership shall not, and shall not permit any Guarantor to, directly or indirectly, incur any Indebtedness that is or purports to be by its terms (or by the terms of any agreement governing such Indebtedness) subordinated to any other Indebtedness of the Partnership or of such Guarantor, as the case may be, unless such Indebtedness is also by its terms (or by the terms of any agreement governing such Indebtedness) made expressly subordinate to the Notes or the Note Guarantee of such Guarantor, to the same extent and in the same manner as such Indebtedness is subordinated to such other Indebtedness of the Partnership or such Guarantor, as the case may be.

(b) For purposes of the foregoing, no Indebtedness will be deemed to be subordinated in right of payment to any other Indebtedness of the Partnership or any Guarantor solely by virtue of being unsecured or secured by a Permitted Lien or by virtue of the fact that the holders of such Indebtedness have entered into intercreditor agreements or other arrangements giving one or more of such holders priority over the other holders in the collateral held by them.

Section 4.22. Restrictions on Activities of Finance Corp.

Finance Corp. shall not hold any material assets, become liable for any material obligations or engage in any significant business activities; provided that Finance Corp. may be a co-obligor or guarantor with respect to Indebtedness if the Partnership is an obligor of such Indebtedness and the net proceeds of such Indebtedness are received by the Partnership or one or more of the Partnership’s Restricted Subsidiaries other than Finance Corp.

ARTICLE 5

SUCCESSOR PERSON

Section 5.01. Limitations on Mergers, Consolidations, Etc.

(a) The Partnership shall not, directly or indirectly, in a single transaction or a series of related transactions, consolidate or merge with or into another Person, or sell, lease, transfer, convey or otherwise dispose of or assign all or substantially all of the assets of the Partnership or the Partnership and the Restricted Subsidiaries (taken as a whole) or adopt a Plan of Liquidation unless:

(1) either:

(a) the Partnership shall be the surviving or continuing Person; or

(b) the Person (if other than the Partnership) formed by or surviving such consolidation or merger or to which such sale, lease, transfer, conveyance or other disposition or assignment shall be made (or, in the case of a Plan of Liquidation, any Person to which assets are transferred) (collectively, the “Successor”) is a corporation, limited liability company or limited partnership organized and existing under the laws of any State of the United States of America or the District of Columbia, and the Successor expressly assumes, by agreements in form and substance reasonably satisfactory to the Trustee, all of the obligations of the Partnership under the Notes and this Indenture;

(2) immediately after giving effect to such transaction and the assumption of the obligations as set forth in Section 5.01(a)(1)(b) above and the incurrence of any Indebtedness to be incurred in connection therewith, and the use of any net proceeds therefrom on a pro forma basis, no Default shall have occurred and be continuing; and

-60-

(3) immediately after giving effect to such transaction and the assumption of the obligations as set forth in Section 5.01(a)(1)(b) above and the incurrence of any Indebtedness to be incurred in connection therewith, and the use of any net proceeds therefrom on a pro forma basis, the Partnership or the Successor, as the case may be,

(a) could incur $1.00 of additional Indebtedness (other than Permitted Indebtedness) pursuant to the Coverage Ratio Exception; or

(b) would have a Consolidated Interest Coverage Ratio, on the date of such transaction and after giving pro forma effect thereto and any related financing transactions as if the same had occurred at the beginning of the applicable Four-Quarter Period, greater than the Consolidated Interest Coverage Ratio of the Partnership immediately prior to such transaction; and

(4) an Opinion of Counsel has been delivered to the Trustee stating that such transaction complies with the foregoing provisions.

(b) For purposes of this Section 5.01, any Indebtedness of the Successor which was not Indebtedness of the Partnership immediately prior to the transaction shall be deemed to have been incurred in connection with such transaction.

(c) Except as provided in Section 10.06, no Guarantor may consolidate with or merge with or into (whether or not such Guarantor is the surviving Person) another Person, unless:

(1) either:

(a) such Guarantor shall be the surviving or continuing Person; or

(b) the Person (if other than such Guarantor) formed by or surviving any such consolidation or merger is another Guarantor or assumes, by agreements in form and substance reasonably satisfactory to the Trustee, all of the obligations of such Guarantor under the Note Guarantee of such Guarantor and this Indenture;

(2) immediately after giving effect to such transaction, no Default shall have occurred and be continuing; and

(3) an Opinion of Counsel has been delivered to the Trustee stating that such transaction complies with the foregoing provisions.

(d) For purposes of the foregoing, the transfer (by lease, assignment, sale or otherwise, in a single transaction or series of transactions) of all or substantially all of the assets of one or more Restricted Subsidiaries, the Equity Interests of which constitute all or substantially all of the assets of the Partnership, will be deemed to be the transfer of all or substantially all of the assets of the Partnership.

-61-

Section 5.02. Successor Person Substituted.

(a) Upon any consolidation or merger of the Partnership or a Guarantor, or any transfer of all or substantially all of the assets of the Partnership or the Partnership and its Restricted Subsidiaries (taken as a whole) in accordance with Section 5.01, in which the Partnership or such Guarantor is not the continuing obligor under the Notes or its Note Guarantee, the surviving entity formed by such consolidation or into which the Partnership or such Guarantor is merged or the Person to which the sale, conveyance, lease, transfer, disposition or assignment is made shall succeed to, and be substituted for, and may exercise every right and power of, the Partnership or such Guarantor under this Indenture, the Notes and the Note Guarantees with the same effect as if such surviving entity had been named herein and therein as the Partnership or such Guarantor and, except in the case of a lease, the Partnership or such Guarantor, as the case may be, shall be released from the obligation to pay the principal of and interest on the Notes or in respect of its Note Guarantee, as the case may be, and all of the Partnership’s or such Guarantor’s other obligations and covenants under the Notes, this Indenture and its Note Guarantee, if applicable.

(b) Notwithstanding the foregoing, (i) any Restricted Subsidiary may consolidate with, merge with or into or convey, transfer or lease, in one transaction or a series of transactions, all or substantially all of its assets to the Partnership or another Guarantor and (ii) this Article 5 will not apply to a merger of the Partnership or any Restricted Subsidiary of the Partnership with an Affiliate of the Partnership solely for the purpose of reorganizing the Partnership or such Restricted Subsidiary in another jurisdiction or converting the Partnership into a corporation.

ARTICLE 6

DEFAULTS AND REMEDIES

Section 6.01. Events of Default.

Each of the following is an “Event of Default”:

(a) failure to pay interest on any of the Notes when the same becomes due and payable and the continuance of any such failure for 30 days;

(b) failure to pay the principal on any of the Notes, when it becomes due and payable, whether at stated maturity, upon redemption, upon purchase, upon acceleration or otherwise;

(c) failure by the Partnership to comply with any of its agreements or covenants contained in Article 5 or Section 4.15;

(d) failure by the Partnership to comply with any of its agreements described in Section 4.02 and continuance of this failure for 90 days after notice of the failure has been given to the Partnership by the Trustee or by the Holders of at least 25% of the aggregate principal amount of the Notes then outstanding;

(e) failure by the Partnership to comply with any other agreement or covenant in this Indenture and continuance of this failure for 60 days after notice of the failure has been given to the Partnership by the Trustee or by the Holders of at least 25% of the aggregate principal amount of the Notes then outstanding;

-62-

(f) default under any mortgage, indenture or other instrument or agreement under which there may be issued or by which there may be secured or evidenced Indebtedness for borrowed money by the Partnership or any Restricted Subsidiary, whether such Indebtedness now exists or is incurred after the Issue Date, which default: (A) is caused by a failure to pay at final maturity principal on such Indebtedness within the applicable express grace period in respect of such Indebtedness at the time of such default or (B) results in the acceleration of such Indebtedness prior to its express final maturity (which acceleration is not rescinded, annulled or otherwise cured within 30 days of receipt by the Issuers or such Restricted Subsidiary of notice of any such acceleration), and, in each case, the principal amount of such Indebtedness, together with the principal amount of any other Indebtedness with respect to which an event described in clause (A) or (B) has occurred and is continuing, aggregates $20.0 million or more;

(g) one or more judgments (to the extent not covered by insurance) for the payment of money in an aggregate amount in excess of $20.0 million shall be rendered against the Partnership, any of its Restricted Subsidiaries or any combination thereof and the same shall remain undischarged for a period of 60 consecutive days during which execution shall not be effectively stayed;

(h) the Partnership or any of its Significant Subsidiaries pursuant to or within the meaning of any Bankruptcy Law:

(a) commences a voluntary case,

(b) consents to the entry of an order for relief against it in an involuntary case,

(c) consents to the appointment of a Custodian of it or for all or substantially all of its property,

(d) makes a general assignment for the benefit of its creditors,

(e) generally is not able to pay its debts as they become due, or

(f) takes any corporate action to authorize or effect any of the foregoing;

(i) a court of competent jurisdiction enters an order or decree under any Bankruptcy Law that:

(a) is for relief against the Partnership or any of its Significant Subsidiaries in an involuntary case,

(b) appoints a Custodian of the Partnership or any of its Significant Subsidiaries for all or substantially all of the property of the Partnership or any of its Significant Subsidiaries, or

(c) orders the liquidation of the Partnership, or any of its Significant Subsidiaries; and

(j) any Note Guarantee of any Significant Subsidiary ceases to be in full force and effect (other than in accordance with the terms of such Note Guarantee and this Indenture) or is declared null and void and unenforceable or found to be invalid or any Guarantor denies its liability under its Note Guarantee (other than by reason of release of a Guarantor from its Note Guarantee in accordance with the terms of this Indenture and the Note Guarantee).

-63-

The term “Bankruptcy Law” means Title 11, U.S. Code or any similar Federal, state or foreign law for the relief of debtors. The term “Custodian” means any receiver, trustee, assignee, liquidator or similar official under any Bankruptcy Law.

Section 6.02. Acceleration.

If an Event of Default (other than an Event of Default specified in Section 6.01(h) or (i) with respect to the Partnership) shall have occurred and be continuing under this Indenture, the Trustee, by written notice to the Partnership, or the Holders of at least 25% in aggregate principal amount of the Notes then outstanding by written notice to the Partnership and the Trustee, may declare (an “acceleration declaration”) all amounts owing under the Notes to be due and payable. Upon such declaration of acceleration, the aggregate principal of and accrued and unpaid interest on the outstanding Notes shall become due and payable (a) if there is no Indebtedness outstanding under any Credit Facility at such time, immediately and (b) if otherwise, upon the earlier of (x) the final maturity (after giving effect to any applicable grace period or extensions thereof) or an acceleration of any Indebtedness under any Credit Facility prior to the express final stated maturity thereof and (y) five Business Days after the representative under each Credit Facility receives the acceleration declaration, but, in the case of this clause (b) only, if such Event of Default is then continuing; provided, however, that after such acceleration, but before a judgment or decree based on acceleration, the Holders of a majority in aggregate principal amount of such outstanding Notes may, rescind and annul such acceleration if

(1) the rescission would not conflict with any judgment or decree;

(2) all Events of Default, other than nonpayment of principal or interest that has become due solely because of the acceleration, have been cured or waived;

(3) to the extent the payment of such interest is lawful, interest on overdue installments of interest and overdue principal, which has become due otherwise than by such declaration of acceleration, has been paid;

(4) the Partnership has paid all sums paid or advanced by the Trustee hereunder and its reasonable compensation and reimbursed the Trustee for its expenses, disbursements and advances and those of its agents and counsel; and

(5) in the event of the cure or waiver of an Event of Default of the type described Section 6.01 (h) or (i) above, the Trustee shall have received an Officers’ Certificate and an Opinion of Counsel that such Event of Default has been cured or waived.

No such rescission shall affect any subsequent Default or impair any right consequent thereto. If an event of Default specified in Section 6.01(h) or (i) occurs with respect to the Partnership and is continuing, then all unpaid principal of, premium, if any, and accrued and unpaid interest on all of the outstanding notes shall ipso facto become and be immediately due and payable without any declaration or other act on the part of the Trustee or any Holder.

-64-

Section 6.03. Other Remedies.

If an Event of Default occurs and is continuing, the Trustee may pursue any available remedy by proceeding at law or in equity to collect the payment of principal of, or premium, if any, and interest on the Notes or to enforce the performance of any provision of the Notes or this Indenture and may take any necessary action requested of it as Trustee to settle, compromise, adjust or otherwise conclude any proceedings to which it is a party.

The Trustee may maintain a proceeding even if it does not possess any of the Notes or does not produce any of them in the proceeding. A delay or omission by the Trustee or any Holder in exercising any right or remedy accruing upon an Event of Default shall not impair the right or remedy or constitute a waiver of or acquiescence in the Event of Default. No remedy is exclusive of any other remedy. All available remedies are cumulative to the extent permitted by law.

Section 6.04. Waiver of Past Defaults and Events of Default.

Holders of not less than a majority in aggregate principal amount of the then outstanding Notes by notice to the Trustee may on behalf of the Holders of all of the Notes waive an existing Default or Event of Default and its consequences hereunder, except a continuing Default or Event of Default in the payment of the principal of, premium, if any, or interest on, the Notes (including in connection with an offer to purchase); provided, however, that, as provided in Section 6.02 hereof, the Holders of a majority in aggregate principal amount of the then outstanding Notes may rescind an acceleration and its consequences, including any related payment default that resulted from such acceleration. Upon any such waiver, such Default shall cease to exist, and any Event of Default arising therefrom shall be deemed to have been cured for every purpose of this Indenture; but no such waiver shall extend to any subsequent or other Default or impair any right consequent thereon.

Section 6.05. Control by Majority.

Holders of a majority in aggregate principal amount of the then outstanding Notes may direct the time, method and place of conducting any proceeding for exercising any remedy available to the Trustee or exercising any trust or power conferred on it, provided the Trustee receives such indemnity or security satisfactory to it in connection therewith. However, the Trustee may refuse to follow any direction that conflicts with law or this Indenture, that the Trustee determines in good faith may be unduly prejudicial to the rights of other Holders of Notes or that may involve the Trustee in personal liability.

Section 6.06. Limitation on Suits.

Subject to Section 6.07, no Holder shall have any right to institute any proceeding with respect to this Indenture or any remedy thereunder unless:

(1) such Holder has given the Trustee written notice of a continuing Event of Default;

(2) the Holders of at least 25% in aggregate principal amount of outstanding Notes have made a written request to the Trustee to pursue the remedy;

(3) such Holder or Holders offer to the Trustee security indemnity satisfactory to Trustee against any costs, liability or expense;

-65-

(4) the Trustee fails to institute such proceeding within 60 days after receipt of the request and the offer of security or indemnity; and

(5) the Trustee has not received directions inconsistent with such written request during such 60-day period by the Holders of a majority in aggregate principal amount of the outstanding Notes.

Section 6.07. Rights of Holders To Receive Payment.

Notwithstanding any other provision of this Indenture, the right of any Holder to receive payment of principal of or accrued interest of any Note held by such Holder on or after the respective due dates expressed in such Note, or to bring suit for the enforcement of any such payment on or after such respective dates, is absolute and unconditional and shall not be impaired or affected without the consent of the Holder.

Section 6.08. Collection Suit by Trustee.

If an Event of Default occurs and is continuing, the Trustee may recover judgment in its own name and as trustee of an express trust against the Issuers for the whole amount of unpaid principal, premium and accrued interest remaining unpaid, together with, to the extent that payment of such interest is lawful, interest on overdue principal and interest on overdue installments of interest, in each case at the rate set forth in Section 4.01 hereof, and such further amounts as shall be sufficient to cover the costs and expenses of collection, including the reasonable compensation, expenses, disbursements and advances of the Trustee, its agents and counsel.

Section 6.09. Trustee May File Proofs of Claim.

The Trustee may file such proofs of claim and other papers or documents as may be necessary or advisable in order to have the claims of the Trustee (including any claim for the reasonable compensation, expenses, disbursements and advances of the Trustee, its agents and counsel) and the Holders allowed in any judicial proceedings relative to the Issuers (or any other obligor upon the Notes), their creditors or their property and shall be entitled and empowered to collect and receive any monies or other property payable or deliverable on any such claims and to distribute the same after deduction of its charges and expenses to the extent that any such charges and expenses are not paid out of the estate in any such proceedings and any custodian in any such judicial proceeding is hereby authorized by each Holder to make such payments to the Trustee, and in the event that the Trustee shall consent to the making of such payments directly to the Holders, to pay to the Trustee any amount due to it for the reasonable compensation, expenses, disbursements and advances of the Trustee, its agents and counsel, and any other amounts due the Trustee under Section 7.07 hereof.

Nothing herein contained shall be deemed to authorize the Trustee to authorize or consent to or accept or adopt on behalf of any Holder any plan or reorganization, arrangement, adjustment or composition affecting the Notes or the rights of any Holder thereof, or to authorize the Trustee to vote in respect of the claim of any Holder in any such proceedings.

-66-

Section 6.10. Priorities.

Any money collected by the Trustee pursuant to this Article and any other money or property distributable in respect of the Issuers’ obligations under this Indenture after an Event of Default shall be applied in the following order:

FIRST: to the Trustee (including any predecessor Trustee) for amounts due under Section 7.07 hereof, including payment of all compensation, expenses and liabilities incurred, and all advances made, by the Trustee and the costs and expenses of collection;

SECOND: if the Holders are forced to proceed against the Issuers or any Guarantor directly without the Trustee, to Holders for their collection costs;

THIRD: to Holders for amounts due and unpaid on the Notes for principal, premium, if any, and interest as to each, ratably, without preference or priority of any kind, according to the amounts due and payable on the Notes; and

FOURTH: to the Issuers or, to the extent the Trustee collects any amounts from any Guarantor, to such Guarantor.

The Trustee, upon prior written notice to the Issuers, may fix a record date and payment date for any payment to Holders pursuant to this Section 6.10.

Section 6.11. Undertaking for Costs.

In any suit for the enforcement of any right or remedy under this Indenture or in any suit against the Trustee for any action taken or omitted by it as Trustee, a court in its discretion may require the filing by any party litigant in the suit of an undertaking to pay the costs of the suit, and the court in its discretion may assess reasonable costs, including reasonable attorneys’ fees, against any party litigant in the suit, having due regard to the merits and good faith of the claims or defenses made by the party litigant. This Section 6.11 does not apply to a suit by the Trustee, a suit by a Holder pursuant to Section 6.07 hereof or a suit by Holders of more than 10% in principal amount of the Notes then outstanding.

ARTICLE 7

TRUSTEE

Section 7.01. Duties of Trustee.

(a) If an Event of Default has occurred and is continuing, the Trustee shall exercise such of the rights and powers vested in it by this Indenture and use the same degree of care and skill in their exercise thereof as a prudent person would exercise or use under the circumstances in the conduct of such person’s own affairs.

(b) Except during the continuance of an Event of Default:

(1) The Trustee need perform only those duties as are specifically set forth in this Indenture and no covenants or obligations shall be implied in this Indenture against the Trustee

-67-

(2) In the absence of bad faith on its part, the Trustee may conclusively rely, as to the truth of the statements and the correctness of the opinions expressed therein, upon certificates or opinions furnished to the Trustee and conforming to the requirements of this Indenture. However, the Trustee shall examine the certificates and opinions which are specifically required to be delivered to the Trustee by any provision of this Indenture to determine whether or not they conform to the requirements of this Indenture.

(c) Notwithstanding anything to the contrary herein contained, the Trustee may not be relieved from liability for its own negligent action, its own negligent failure to act, or its own willful misconduct, except that:

(1) This paragraph does not limit the effect of paragraphs (b) or (d) of this Section 7.01.

(2) The Trustee shall not be liable for any error of judgment made in good faith by a Trust Officer, unless it is proved that the Trustee was negligent in ascertaining the pertinent facts.

(3) The Trustee shall not be liable with respect to any action it takes or omits to take in good faith in accordance with a direction received by it pursuant to Section 6.05 hereof.

(d) No provision of this Indenture shall require the Trustee to expend or risk its own funds or otherwise incur any financial liability in the performance of any of its duties hereunder, or in the exercise of any of its rights or powers, if it shall have reasonable grounds for believing that repayment of such funds or adequate indemnity against such risk or liability is not reasonably assured to it.

(e) Whether or not herein expressly provided, every provision of this Indenture that in any way relates to the Trustee is subject to paragraphs (a), (b), (c) and (d) of this Section 7.01.

(f) The Trustee shall not be liable for interest on any money or assets received by it except as the Trustee may agree in writing with the Partnership. Assets held in trust by the Trustee need not be segregated from other assets except to the extent required by law.

(g) Unless otherwise specifically provided in this Indenture, any demand, request, direction or notice from the Partnership shall be sufficient if signed by an Officer of the Partnership.

(h) The Trustee shall not be bound to make any investigation into the facts or matters stated in any resolution, certificate, statement, instrument, opinion, report, notice, request, direction, consent, order, bond, debenture, note, other evidence of indebtedness or other paper or document, but the Trustee, in its discretion, may make such further inquiry or investigation into such facts or matters as it may see fit, and, if the Trustee shall determine to make such further inquiry or investigation, it shall be entitled to examine the books, records and premises of the Issuers, personally or by agent or attorney at the sole cost of the Issuers and shall incur no liability or additional liability of any kind by reason of such inquiry or investigation.

(i) The rights, privileges, protections, immunities and benefits given to the Trustee, including, without limitation, its right to be indemnified, are extended to, and shall be enforceable by, the Trustee in each of its capacities hereunder, and each agent, custodian and other Person employed to act hereunder.

-68-

(j) The permissive right of the Trustee to take or refrain from taking any actions enumerated in this Indenture shall not be construed as a duty.

Section 7.02. Rights of Trustee.

Subject to Section 7.01 hereof:

(a) The Trustee may rely on any document reasonably believed by it to be genuine and to have been signed or presented by the proper person. The Trustee need not investigate any fact or matter stated in the document.

(b) Before the Trustee acts or refrains from acting with respect to any matters contemplated by this Indenture or the Notes it may consult with counsel and may require an Officers’ Certificate or an Opinion of Counsel, or both, which shall conform to the provisions of Section 11.05 hereof. The Trustee shall be protected and shall not be liable for any action it takes or omits to take in good faith in reliance on such certificate or opinion.

(c) The Trustee may act through attorneys and agents and shall not be responsible for the misconduct or negligence of any attorney or agent (other than an agent who is an employee of the Trustee) so long as the appointment of such agent was made with due care.

(d) The Trustee shall not be liable for any action it takes or omits to take in good faith which it reasonably believes to be authorized or within the discretion or rights or powers conferred upon it by this Indenture.

(e) The Trustee may consult with counsel of its selection, and the advice or opinion of such counsel as to matters of law shall be full and complete authorization and protection from liability in respect of any action taken, omitted or suffered by it hereunder in good faith and in reliance thereon.

(f) The Trustee shall be under no obligation to exercise any of the rights or powers vested in it by this Indenture at the request or direction of any of the Holders pursuant to this Indenture, unless such Holders shall have offered to the Trustee security or indemnity satisfactory to the Trustee against the costs, expenses and liabilities which might be incurred by it in compliance with such request or direction.

(g) The Trustee may request that the Partnership deliver an Officers’ Certificate setting forth the names of individuals and/or titles of officers authorized at such time to take specified actions pursuant to this Indenture, which Officers’ Certificate may be signed by any person authorized to sign an Officers’ Certificate, including any person specified as so authorized in any such certificate previously delivered and not superseded.

(h) The Trustee shall not be responsible or liable for any failure or delay in the performance of its obligations under this Indenture arising out of or caused, directly or indirectly, by circumstances beyond its reasonable control, including, without limitation, acts of God; earthquakes; fire; flood; terrorism; wars and other military disturbances; sabotage; epidemics; riots; interruptions; loss or malfunctions of utilities, computer (hardware or software) or communication services; accidents; labor disputes; acts of civil or military authority and governmental action.

(i) Anything in this Indenture notwithstanding, in no event shall the Trustee be liable for special, indirect, punitive or consequential loss or damage of any kind whatsoever (including but not limited to loss of profit), even if the Issuers have been advised as to the likelihood of such loss or damage and regardless of the form of action.

-69-

Section 7.03. Individual Rights of Trustee.

The Trustee in its individual or any other capacity may become the owner or pledgee of Notes and may make loans to, accept deposits from, perform services for or otherwise deal with the Issuers, or any Affiliates thereof, with the same rights it would have if it were not Trustee. Any Agent may do the same with like rights. The Trustee, however, shall be subject to Sections 7.10 and 7.11 hereof.

Section 7.04. Trustee’s Disclaimer.

The Trustee shall not be responsible for and makes no representation as to the validity or adequacy of this Indenture or the Notes, it shall not be accountable for the Issuers’ use of the proceeds from the sale of Notes or any money paid to the Issuers pursuant to the terms of this Indenture and it shall not be responsible for any statement of the Issuers in this Indenture or the Notes other than the Trustee’s certificate of authentication.

Section 7.05. Notice of Defaults.

The Trustee shall not be deemed to have notice of any Default or Event of Default unless a Trust Officer of the Trustee has received written notice of such Default or Event of Default at the Corporate Trust Office of the Trustee.

Within 90 days after the occurrence of any Default or Event of Default hereunder, the Trustee shall transmit by mail to Holders of Notes, as their names and addresses appear in the Registrar, a notice of the Default or Event of Default known to the Trustee, unless such Default or Event of Default shall have been cured or waived. Except in the case of a Default or an Event of Default in payment of principal of, premium or interest on, any Note, including an accelerated payment and the failure to make payment on the Change of Control Payment Date pursuant to a Change of Control Offer or on the Net Proceeds Offer Payment Date pursuant to a Net Proceeds Offer and the Trustee may withhold the notice if and so long as its Board of Directors, the executive committee of its Board of Directors or a committee of its directors and/or Trust Officers in good faith determines that withholding the notice is in the interest of the Holders. This Section 7.05 shall be in lieu of the proviso to Section 315(b) of the TIA, and such proviso of Section 315(b) of the TIA is hereby expressly excluded from this Indenture and the Notes.

Section 7.06. Reports by Trustee to Holders.

If required by TIA Section 313(a), within 60 days after May 15 of any year, commencing the May 15 following the date of this Indenture, the Trustee shall mail to each Holder a brief report dated as of such May 15 that complies with TIA Section 313(a). The Trustee also shall comply with TIA Section 313(c) and (d).

Reports pursuant to this Section 7.06 shall be transmitted by mail:

(a) to all Holders, as the names and addresses of such Holders appear on the Registrar’s books; and

-70-

(b) to such Holder as have, within the two years preceding such transmission, filed their names and addresses with the Trustee for that purpose.

A copy of each report at the time of its mailing to Holders shall be filed with the SEC and each stock exchange, if any, on which the Notes are listed. The Partnership shall promptly notify the Trustee when the Notes are listed on any stock exchange or of any delisting thereof.

Section 7.07. Compensation and Indemnity.

The Issuers shall pay to the Trustee from time to time such compensation as shall be agreed in writing between the Issuers and the Trustee for the Trustee’s services. The Trustee’s compensation shall not be limited by any law on compensation of a trustee of an express trust. The Issuers shall reimburse the Trustee upon request for all reasonable fees and expenses, including out-of-pocket expenses incurred or made by it in connection with the performance of its duties under this Indenture or in connection with the collection of any funds. Such expenses shall include the reasonable fees and expenses of the Trustee’s agents and counsel.

The Issuers, jointly and severally, shall indemnify each of the Trustee and its agents, employees, stockholders and directors and officers for, and hold them harmless against, any loss, liability or expense incurred by them (including attorney’s fees and expenses) arising out of or in connection with the administration of this trust including the reasonable costs and expenses of defending themselves against any claim or liability in connection with the exercise or performance of any of their rights, powers or duties hereunder, except for such actions to the extent caused by any negligence, bad faith or willful misconduct on their part. The Trustee shall notify the Issuers promptly, in writing, of any claim asserted against the Trustee for which it may seek indemnity. At the Trustee’s sole discretion, the Issuers shall defend the claim and the Trustee shall cooperate and may participate in the defense; provided that any settlement of a claim shall be approved in writing by the Trustee. The Issuers need not pay for any settlement made without its written consent, which consent shall not be unreasonably withheld. The Issuers need not reimburse any expense or indemnify against any loss or liability to the extent incurred by the Trustee through its negligence, bad faith or willful misconduct.

To secure the Issuers’ payment obligations in this Section 7.07, the Trustee shall have a lien prior to the Notes on all assets or money held or collected by the Trustee, in its capacity as Trustee, except assets or money held in trust to pay principal of, premium or interest on particular Notes.

In addition and without prejudice to the rights provided to the Trustee under any provision of this Indenture, when the Trustee incurs expenses or renders services after an Event of Default specified in Section 6.01(h) or (i) hereof occurs, such expenses and the compensation for such services are intended to constitute expenses of administration under any Bankruptcy Law.

The obligation of the Issuers under this Section 7.07 shall survive the resignation or removal of the Trustee and the termination or satisfaction and discharge of this Indenture. The Trustee will comply with the provisions of Section 313(b)(2) of the TIA to the extent applicable.

“Trustee” for purposes of this Section shall include any predecessor Trustee and the Trustee in each of its capacities hereunder and to each agent, custodian and other person employed to act hereunder; provided, however, that the negligence, willful misconduct or bad faith of any Trustee hereunder shall not affect the rights of any other Trustee hereunder.

-71-

Section 7.08. Replacement of Trustee.

The Trustee may resign at any time by so notifying the Issuers in writing. The Holders of a majority in principal amount of the outstanding Notes may remove the Trustee by so notifying the Trustee and the Issuers in writing and may appoint a successor Trustee. The Issuers may remove the Trustee at their election if:

(a) the Trustee fails to comply with Section 7.10 hereof;

(b) the Trustee is adjudged a bankrupt or an insolvent;

(c) a receiver or other public officer takes charge of the Trustee or its property; or

(d) the Trustee otherwise becomes incapable of acting.

If the Trustee resigns or is removed or if a vacancy exists in the office of Trustee for any reason (the Trustee in such event being referred to herein as the retiring Trustee), the Issuers shall promptly appoint a successor Trustee. Within one year after the successor Trustee takes office, the Holders of a majority in principal amount of the Notes may appoint a successor Trustee to replace the successor Trustee appointed by the Issuers.

A successor Trustee shall deliver a written acceptance of its appointment to the retiring Trustee and to the Issuers. Immediately after that, the retiring Trustee shall transfer, after payment of all sums then owing to the Trustee pursuant to Section 7.07 hereof, all property held by it as Trustee to the successor Trustee, subject to the lien provided in Section 7.07 hereof, the resignation or removal of the retiring Trustee shall become effective, and the successor Trustee shall have the rights, powers and duties of the Trustee under this Indenture. A successor Trustee shall mail notice of its succession to each Holder.

If a successor Trustee does not take office within 60 days after the retiring Trustee resigns or is removed, the retiring Trustee, the Issuers or the Holders of at least 10% in principal amount of the outstanding Notes may petition, at the expense of the Issuers, any court of competent jurisdiction for the appointment of a successor Trustee.

If the Trustee, after written request by any Holder who has been a Holder for at least six months, fails to comply with Section 7.10 hereof, such Holder may petition any court of competent jurisdiction for the removal of the Trustee and the appointment of a successor Trustee.

Notwithstanding replacement of the Trustee pursuant to this Section 7.08, the Issuers’ obligations under Section 7.07 hereof shall continue for the benefit of the retiring Trustee.

Section 7.09. Successor Trustee by Consolidation, Merger or Conversion.

If the Trustee consolidates with, merges or converts into, or transfers all or substantially all of its corporate trust business to, another corporation, subject to this Article 7, the successor corporation without any further act shall be the successor Trustee.

Section 7.10. Eligibility; Disqualification.

This Indenture shall always have a Trustee which shall be eligible to act as Trustee under TIA Sections 310(a)(1), 310(a)(2) and 310(a)(5). The Trustee shall have a combined capital and surplus

-72-

of at least $100,000,000 as set forth in its most recent published annual report of condition. If the Trustee has or shall acquire any “conflicting interest” within the meaning of TIA Section 310(b) after a Default has occurred and is continuing, the Trustee and the Issuers shall comply with the provisions of TIA Section 310(b); provided, however, that there shall be excluded from the operation of TIA Section 310(b)(1) any indenture or indentures under which other securities or certificates of interest or participation in other securities of the Issuers are outstanding if the requirements for such exclusion set forth in TIA Section 310(b)(1) are met. If at any time the Trustee shall cease to be eligible in accordance with the provisions of this Section 7.10, the Trustee shall resign immediately in the manner and with the effect hereinbefore specified in this Article 7.

Section 7.11. Preferential Collection of Claims Against the Issuers.

The Trustee shall comply with TIA Section 311(a), excluding any creditor relationship listed in TIA Section 31l(b). A Trustee who has resigned or been removed shall be subject to TIA Section 31l(a) to the extent indicated therein. The provisions of TIA Section 311 shall apply to the Issuers as obligors of the Notes.

ARTICLE 8

AMENDMENTS, SUPPLEMENTS AND WAIVERS

Section 8.01. Without Consent of Holders.

The Issuers, when authorized by a Board Resolution, and the Trustee may amend or supplement this Indenture, the Notes or the Note Guarantees without notice to or consent of any Holder:

(1) to cure any ambiguity, defect or inconsistency;

(2) to provide for uncertificated Notes in addition to or in place of certificated Notes;

(3) to provide for the assumption of the Partnership’s obligations to the Holders in the case of a merger, consolidation or sale of all or substantially all of the Partnership’s assets accordance with Article 5;

(4) to add any Note Guarantee or to effect the release of any Guarantor from any of its obligations under its Note Guarantee or this Indenture (to the extent permitted by this Indenture);

(5) to make any change that would provide any additional rights or benefits to the Holders or does not materially adversely affect the rights of any Holder;

(6) to provide for the conversion of the Partnership into a corporation in accordance with Section 5.02(b) hereof;

(7) to secure the Notes or any Note Guarantees or any other obligation under this Indenture;

(8) to evidence and provide for the acceptance of appointment by a successor trustee;

-73-

(9) to conform the text of this Indenture or the Notes to any provision of the “Description of notes” section of the Offering Memorandum to the extent that such provision in the “Description of notes” was intended to be a verbatim recitation of a provision of this Indenture, the Note Guarantees or the Notes; or

(10) to provide for the issuance of Additional Notes in accordance with this Indenture.

Section 8.02. With Consent of Holders.

(a) Subject to Section 6.07 hereof, the Issuers and the Guarantors, when each is authorized by a Board Resolution of its Board of Directors, and the Trustee may amend or supplement this Indenture or the Notes or the Note Guarantees with the written consent of the Holders of at least a majority in aggregate principal amount of the Notes then outstanding. Subject to Section 6.07 hereof, the Holders of a majority in aggregate principal amount of the outstanding Notes may waive compliance by the Issuers, or any Guarantor with any provision of this Indenture, the Notes, or the Note Guarantees. However, without the consent of each Holder affected, an amendment, supplement or waiver, including a waiver pursuant to Section 6.04 hereof, may not:

(1) reduce, or change the fixed maturity of, the principal of any Note;

(2) reduce the rate of, or extend the time for payment of, interest on any Note;

(3) reduce any premium payable upon redemption of the Notes or change the date on which any Notes are subject to redemption or waive any payment with respect to the redemption of the Notes; provided, however, that solely for the avoidance of doubt, and without any other implication, any purchase or repurchase of Notes (including pursuant to Section 4.12 and Section 4.15) shall not be deemed a redemption of the Notes;

(4) make any Note payable in money or currency other than that stated in the Notes;

(5) modify or change any provision of this Indenture or the related definitions to affect the ranking of the Notes or any Note Guarantee in a manner that adversely affects the Holders;

(6) reduce the percentage of Holders necessary to consent to an amendment or waiver to this Indenture, the Notes or the Note Guarantees;

(7) waive a default in the payment of principal of or interest on any Notes (except a rescission of acceleration of the Notes by the Holders thereof as provided in this Indenture and a waiver of the payment default that resulted from such acceleration);

(8) impair the rights of Holders to receive payments of principal of or interest on the Notes on or after the due date therefor or to institute suit for the enforcement of any payment on the Notes;

(9) release any Guarantor that is a Significant Subsidiary from any of its obligations under its Note Guarantee or this Indenture, except as permitted by this Indenture; or

(10) make any change in these amendment, supplement and waiver provisions.

-74-

The consent of the Holders of the Notes is not necessary under this Indenture to approve the particular form of any proposed amendment, supplement or waiver. It is sufficient if such consent approves the substance of the proposed amendment, supplement or waiver.

After an amendment or supplement under this Indenture becomes effective (other that one pursuant to Section 8.01 (4) hereof), the Partnership is required to mail to Holders of the Notes a notice briefly describing such amendment or supplement. However, the failure to give such notice to all Holders of the Notes, or any defect therein, will not impair or affect the validity of the amendment or supplement.

Section 8.03. Compliance with TIA.

Every amendment to or supplement of this Indenture, the Notes or the Note Guarantees shall comply with the TIA as then in effect, whether or not this Indenture is then qualified under the TIA.

Section 8.04. Revocation and Effect of Consents.

Until an amendment, waiver or supplement becomes effective, a consent to it by a Holder is a continuing consent by the Holder and every subsequent Holder of a Note or portion of a Note that evidences the same debt as the consenting Holder’s Note, even if notation of the consent is not made on any Note. Subject to the following paragraph, any such Holder or subsequent Holder may revoke the consent as to such Holder’s Note or portion of such Note by notice to the Trustee or the Issuers received before the date on which the Trustee receives an Officers’ Certificate certifying that the Holders of the requisite principal amount of Notes have consented (and not theretofore revoked such consent) to the amendment, supplement or waiver.

The Partnership may, but shall not be obligated to, fix a record date for the purpose of determining the Holders entitled to consent to any amendment, supplement or waiver. If a record date is fixed, then notwithstanding the last sentence of the immediately preceding paragraph, those Persons who were Holders at such record date (or their duly designated proxies), and only those Persons, shall be entitled to revoke any consent previously given, whether or not such Persons continue to be Holders after such record date. No such consent shall be valid or effective for more than 90 days after such record date.

After an amendment, supplement or waiver becomes effective, it shall bind every Holder, unless it makes a change described in any of clauses (1) through (10) of Section 8.02 hereof, in which case, the amendment, supplement or waiver shall bind only each Holder who has consented to it and every subsequent Holder of a Note or portion of a Note that evidences the same debt as the consenting Holder’s Note; provided that any such waiver shall not impair or affect the right of any Holder to receive payment of principal of and interest on a Note, on or after the respective due dates expressed in such Note, or to bring suit for the enforcement of any such payment on or after such respective dates without the consent of such Holder.

Section 8.05. Notation on or Exchange of Notes.

If an amendment, supplement or waiver changes the terms of a Note, the Trustee may request the Holder to deliver it to the Trustee. In such case, the Trustee shall place an appropriate notation on the Note about the changed terms and return it to the Holder. Alternatively, if the Issuers or the Trustee so determine, in exchange for the Note the Issuers shall issue and the Trustee shall authenticate a new Note that reflects the changed terms. Failure to make the appropriate notation or issue a new Note shall not affect the validity and effect of such amendment, supplement or waiver.

-75-

Section 8.06. Trustee To Sign Amendments, etc.

The Trustee shall be entitled to receive, and shall be fully protected in relying upon, an Opinion of Counsel stating that the execution of any amendment, supplement or waiver authorized pursuant to this Article 8 is authorized or permitted by this Indenture and that such amendment, supplement or waiver constitutes the legal, valid and binding obligation of the Issuers and any Guarantors, enforceable in accordance with its terms (subject to customary exceptions). The Trustee may, but shall not be obligated to, execute any such amendment, supplement or waiver which affects the Trustee’s own rights, duties or immunities under this Indenture or otherwise.

ARTICLE 9

DISCHARGE OF INDENTURE; DEFEASANCE

Section 9.01. Satisfaction and Discharge of Indenture.

(a) This Indenture shall be discharged and shall cease to be of further effect (except those obligations referred to in Section 9.01(c)) as to all outstanding Notes and the Trustee, on written demand of and at the expense of the Issuers, shall execute proper instruments acknowledging satisfaction and discharge of this Indenture, when:

(1) all the Notes that have been authenticated and delivered (except lost, stolen or destroyed Notes which have been replaced or paid and Notes for whose payment money has been deposited in trust or segregated and held in trust by the Issuers and thereafter repaid to the Issuers or discharged from the trust of this Indenture) have been delivered to the Trustee for cancellation, or

(2) (a) all Notes not delivered to the Trustee for cancellation otherwise (i) have become due and payable, (ii) will become due and payable, or may be called for redemption, within one year or (iii) have been called for redemption pursuant to paragraph 5 of the Notes and, in any case, the Issuers have irrevocably deposited or caused to be deposited with the Trustee as trust funds, in trust solely for the benefit of the Holders, U.S. Dollars, U.S. Government Obligations or a combination thereof, in such amounts as will be sufficient (without consideration of any reinvestment of interest) to pay and discharge the entire Indebtedness (including all principal and accrued interest) on the Notes not theretofore delivered to the Trustee for cancellation, (b) the Issuers have paid all other sums payable by them under this Indenture, and (c) the Issuers have delivered irrevocable instructions to the Trustee to apply the deposited money toward the payment of the Notes at fixed maturity or on the Redemption Date, as the case may be.

(b) In addition, the Issuers must deliver an Officers’ Certificate and an Opinion of Counsel stating that all conditions precedent to satisfaction and discharge have been complied with.

(c) Notwithstanding Section 9.01(a), the Issuers’ obligations in Article 2 and Sections 4.01, 4.07, 7.07, 9.06 and 9.07 hereof shall survive until the Notes are no longer outstanding pursuant to the last paragraph of Section 2.08 hereof. After the Notes are no longer outstanding, the Issuers’ obligations in Sections 7.07, 9.06 and 9.07 hereof shall survive.

-76-

(d) After such delivery or irrevocable deposit, the Trustee upon request shall acknowledge in writing the discharge of the Issuers’ and each Guarantor’s obligations under the Notes, the Note Guarantees and this Indenture except for those surviving obligations specified above.

(e) The Issuers shall provide notice of discharge or defeasance pursuant to this Article 9 within ten (10) days after deposit of funds or U.S. Government Obligations. If payment at stated maturity of less than all of the Notes is to be provided for in the manner and with the effect provided in this Section 9.01, the Trustee shall select such Notes, or portions or principal amount thereof, in the manner specified by Section 3.02 for selection for redemption of less than all the Notes.

Section 9.02. Legal Defeasance.

(a) The Issuers may, at their option at any time, elect to have this Section be applied to all outstanding Notes upon compliance with the conditions set forth in Section 9.04.

(b) Upon the Issuers exercise under paragraph (a) hereof of the option applicable to this paragraph (b), the Issuers and each Guarantor shall, subject to the satisfaction of the conditions set forth in Section 9.04 hereof, be deemed to have been discharged from their respective obligations with respect to all outstanding Notes and the Note Guarantees on the date the conditions set forth below are satisfied (hereinafter, “Legal Defeasance”). For this purpose, Legal Defeasance means that the Issuers and each Guarantor shall be deemed to have paid and discharged the entire Indebtedness represented by the outstanding Notes and the Note Guarantees, which shall thereafter be deemed to be “outstanding” only for the purposes of Section 9.05 hereof and the other Sections of this Indenture referred to in (i) and (ii) below, and to have satisfied all their other respective obligations under such Notes and this Indenture (and the Trustee, on demand of and at the expense of the Issuers, shall execute proper instruments acknowledging the same), except for the following provisions, which shall survive until otherwise terminated or discharged hereunder: (i) the rights of Holders of outstanding Notes to receive solely from the trust fund described in Section 9.05 hereof, and as more fully set forth in such Section, payments in respect of the principal of and interest on such Notes when such payments are due from such trust fund, (ii) the Issuers’ obligations with respect to such Notes under Article 2 and Section 4.07 hereof, (iii) the rights, powers, trusts, duties and immunities of the Trustee hereunder and the Issuers’ obligations in connection therewith and (iv) this Article 9. Subject to compliance with this Article 9, the Issuers may exercise its option under this Section 9.02 notwithstanding the prior exercise of its option under Section 9.03 below with respect to the Notes.

Section 9.03. Covenant Defeasance.

(a) The Issuers may, at their option, at any time, elect to have this Section be applied to all outstanding Notes upon compliance with the conditions set forth in Section 9.04.

(b) Upon the Partnership’s exercise under paragraph (a) hereof of the option applicable to this paragraph (b), the Issuers and each Guarantor shall, subject to the satisfaction of the conditions set forth in Section 9.04 hereof, be released from their respective obligations under the covenants contained in Sections 4.02, 4.05 and 4.08 through 4.22 hereof, inclusive, and Section 5.01(a)(3) hereof with respect to the outstanding Notes and the Note Guarantees on and after the date the conditions set forth below are satisfied (hereinafter, “Covenant Defeasance”); provided, however, that Covenant Defeasance will also release all Note Guarantees as provided in Section 10.06(4) hereof but will not be effective with respect to Events of Default contained in Sections 6.01(h) and (i) for 91 days after the deposit referred to in Section 9.04(1) hereof, and the Notes and the Note Guarantees shall thereafter be

-77-

deemed not “outstanding” for the purposes of any direction, waiver, consent or declaration or act of Holders (and the consequences of any thereof) in connection with such covenants, but shall continue to be deemed “outstanding” for all other purposes hereunder. For this purpose, such Covenant Defeasance means that, with respect to the outstanding Notes and the Note Guarantees, the Issuers and each Guarantor may omit to comply with and shall have no liability in respect of any term, condition or limitation set forth in any such covenant, whether directly or indirectly, by reason of any reference elsewhere herein to any such covenant or by reason of any reference in any such covenant to any other provision herein or in any other document and such omission to comply shall not constitute a Default or an Event or Default under Section 6.01(c), (d), (e), or (j) hereof, but, except as specified above, the remainder of this Indenture, and such Notes and the Note Guarantees shall be unaffected thereby. In addition, upon the Issuers’ exercise under paragraph (a) hereof of the option applicable to this paragraph (b), subject to the satisfaction of the conditions set forth in Section 9.04 hereof, the Events of Default described under clauses (f) and (g) of Section 6.01 and the Events of Default described in clauses (h) and (i) of Section 6.01 (but only with respect to Significant Subsidiaries of the Partnership), in each case, will no longer constitute an Event of Default.

Section 9.04. Conditions to Legal Defeasance or Covenant Defeasance.

The following shall be the conditions to the application of either Section 9.02 or 9.03 hereof to the outstanding Notes and the Note Guarantees:

(1) the Issuers must irrevocably deposit with the Trustee (or other qualifying trustee), as trust funds, in trust solely for the benefit of the Holders, cash in U.S. Dollars or U.S. Government Obligations, or a combination thereof, in such amounts as will be sufficient (without consideration of any reinvestment of interest), in the opinion of a nationally recognized investment bank, appraisal firm or firms of independent public accountants selected by the Issuers, to pay the principal of and interest on the outstanding Notes on the scheduled due dates or on the applicable Redemption Date, as the case may be, provided that the Trustee shall have received an irrevocable written order from the Issuers instructing the Trustee to apply such U.S. Dollars or the proceeds of such U.S. Government Obligations to said payments with respect to such Notes;

(2) in the case of an election under Section 9.02 hereof, the Issuers shall have delivered to the Trustee an Opinion of Counsel in the United States confirming that (A) the Issuers have received from, or there has been published by, the Internal Revenue Service a ruling or (B) since the date of this Indenture, there has been a change in the applicable federal income tax law, in either case to the effect that, and based thereon such Opinion of Counsel shall confirm that, the Holders will not recognize income, gain or loss for U.S. federal income tax purposes as a result of such Legal Defeasance and will be subject to U.S. federal income tax on the same amounts, in the same manner and at the same times as would have been the case if the Legal Defeasance had not occurred;

(3) in the case of an election under Section 9.03 hereof, the Issuers shall have delivered to the Trustee an Opinion of Counsel in the United States confirming that the Holders will not recognize income, gain or loss for U.S. federal income tax purposes as a result of such Covenant Defeasance and will be subject to U.S. federal income tax on the same amounts, in the same manner and at the same times as would have been the case if the Covenant Defeasance had not occurred;

-78-

(4) no Default shall have occurred and be continuing on the date of such deposit or insofar as Sections 6.0 l(h) and 6.01(i) hereof are concerned, at any time in the period ending on the 91st day after the date of such deposit (other than a Default resulting from the incurrence of Indebtedness all or a portion of the proceeds of which will be used to defease the Notes concurrently with such incurrence and the grant of any Lien securing such borrowings);

(5) the Legal Defeasance or Covenant Defeasance shall not result in a breach or violation of or constitute a default under this Indenture or any other material agreement or instrument to which the Partnership or any of its Subsidiaries is a party or by which the Partnership or any of its Subsidiaries is bound (other than any such Default or default resulting solely from the borrowing of funds to be applied to such deposit and the grant of any Lien securing such borrowings);

(6) the Issuers shall have delivered to the Trustee an Officers’ Certificate stating that the deposit was not made by the Issuers with the intent of preferring the Holders over any other creditors of the Issuers or with the intent of defeating, hindering, delaying or defrauding any other creditors of the Issuers or others;

(7) the Issuers shall have delivered to the Trustee an Officers’ Certificate and an Opinion of Counsel, each stating that the conditions precedent provided for in, in the case of the Officers’ Certificate, clauses (1) through (6) and, in the case of the Opinion of Counsel, clauses (2) and/or (3) and (5) of this Section 9.04 have been complied with;

(8) the Issuers shall have delivered to the Trustee an Opinion of Counsel to the effect that after the 91st day following the deposit and assuming that no Holder is an “insider” with respect to the Issuers, as that term is defined in Section 101 of title 11, United States Bankruptcy Code (the “Bankruptcy Code”), the cash or securities deposited in trust will not be subject to avoidance and repayment under Sections 547 and 550 of the Bankruptcy Code;

(9) such Legal Defeasance or Covenant Defeasance shall not cause the Trustee to have a conflicting interest for purposes of the TIA with respect to any securities of the Issuers; and

(10) the Issuers shall have delivered to the Trustee an Opinion of Counsel stating that, as a result of such Legal Defeasance or Covenant Defeasance, neither the trust nor the Trustee will be required to register as an investment company under the Investment Company Act of 1940, as amended.

Section 9.05. Application of Trust Money.

All money and U.S. Government Obligations (including the proceeds thereof) deposited with the Trustee pursuant to Section 9.01 or 9.04 hereof in respect of the outstanding Notes shall be held in trust and applied by the Trustee, in accordance with the provisions of such Notes and this Indenture, to the payment, either directly or through any Paying Agent as the Trustee may determine, to the Holders of such Notes, of all sums due and to become due thereon in respect of principal, premium, if any, and accrued interest, but such money need not be segregated from other funds except to the extent required by law.

-79-

The Issuers and the Guarantors shall pay and indemnify the Trustee against any tax, fee or other charge imposed on or assessed against the U.S. Government Obligations deposited pursuant to Section 9.01 or 9.04 hereof or the principal, premium, if any, and interest received in respect thereof other than any such tax, fee or other charge which by law is for the account of the Holders.

Anything in this Article 9 to the contrary notwithstanding, the Trustee shall deliver or pay to the Issuers from time to time upon a written request of the Issuers in the form of an Officers’ Certificate any money or U.S. Government Obligations held by it as provided in Section 9.01 or 9.04 hereof which, in the opinion of a nationally-recognized firm of independent public accountants expressed in a written certification thereof delivered to the Trustee, are in excess of the amount thereof which would then be required to be deposited to effect an equivalent Legal Defeasance or Covenant Defeasance.

Section 9.06. Repayment to the Issuers.

Subject to Sections 9.01, 9.02, 9.03, 9.04, 9.05 and 9.07 hereof, the Trustee and the Paying Agent shall promptly pay to the Issuers upon request any excess U.S. Dollars or U.S. Government Obligations held by them at any time and thereupon shall be relieved from all liability with respect to such money or obligations. Subject to applicable abandoned property laws, the Trustee and the Paying Agent shall pay to the Issuers upon request any money held by them for the payment of principal, premium, if any, or interest that remains unclaimed for two years; provided that the Trustee or such Paying Agent, before being required to make any payment, may at the expense of the Issuers cause to be published once in a newspaper of general circulation in the City of New York or mail to each Holder entitled to such money notice that such money remains unclaimed, and that after a date specified therein which shall be at least 30 days from the date of such publication or mailing, any unclaimed balance of such money then remaining will be repaid to the Issuers. After payment to the Issuers, Holders entitled to such money must look to the Issuers for payment as general creditors unless an applicable law designates another Person.

Section 9.07. Reinstatement.

If the Trustee or Paying Agent is unable to apply any money or U.S. Government Obligations in accordance with Section 9.01 hereof by reason of any legal proceeding or by reason of any order or judgment of any court or governmental authority enjoining, restraining or otherwise prohibiting such application, the Issuers’ and each Guarantor’s obligations under this Indenture, the Notes and the Note Guarantees shall be revived and reinstated as though no deposit had occurred pursuant to this Article 9 until such time as the Trustee or Paying Agent is permitted to apply all such U.S. legal tender or U.S. Government Obligations in accordance with Section 9.01, 9.02 or 9.03 hereof; provided, however, that if the Issuers or the Guarantors have made any payment of principal of, premium, if any, or accrued interest on any Notes because of the reinstatement of their obligations, the Issuers and each such Guarantor shall be subrogated to the rights of the Holders of such Notes to receive such payment from the money or U.S. Government Obligations held by the Trustee or Paying Agent.

-80-

ARTICLE 10

GUARANTEES

Section 10.01. Unconditional Guarantee.

Each Guarantor hereby unconditionally, jointly and severally, guarantees to each Holder of a Note authenticated by the Trustee and to the Trustee and its successors and assigns that the principal of, premium thereon (if any) and interest on the Notes will be promptly paid in full when due, subject to any applicable grace period, whether at stated maturity, by acceleration or otherwise, and interest on the overdue principal and interest on any overdue interest on the Notes and all other obligations of the Issuers to the Holders or the Trustee hereunder or under the Notes will be promptly paid in full or performed, all in accordance with the terms hereof and thereof; subject, however, to the limitations set forth in Section 10.03 hereof. Each Guarantor hereby agrees that to the maximum extent permitted under applicable law, its obligations hereunder shall be unconditional, irrespective of the validity, regularity or enforceability of the Notes or this Indenture, the absence of any action to enforce the same, any waiver or consent by any Holder with respect to any provisions hereof or thereof, the recovery of any judgment against the Issuers, any action to enforce the same or any other circumstance which might otherwise constitute a legal or equitable discharge or defense of a Guarantor. To the maximum extent permitted under applicable law, each Guarantor hereby waives diligence, presentment, demand of payment, filing of claims with a court in the event of insolvency or bankruptcy of the Issuers, any right to require a proceeding first against the Issuers, protest, notice and all demands whatsoever and covenants that the Note Guarantee will not be discharged except by complete performance of the obligations contained in the Notes and this Indenture. If any Holder or the Trustee is required by any court or otherwise to return to the Issuers, any Guarantor, or any custodian, trustee, liquidator or other similar official acting in relation to the Issuers or any Guarantor, any amount paid by the Issuers or any Guarantor to the Trustee or such Holder, each Note Guarantee, to the extent theretofore discharged, shall be reinstated in full force and effect. Each Guarantor further agrees that, to the maximum extent permitted under applicable law, as between a Guarantor, on the one hand, and the Holders and the Trustee, on the other hand, (x) the maturity of the obligations Note Guaranteed hereby may be accelerated as provided in Article 6 hereof for the purpose of each Note Guarantee, notwithstanding any stay, injunction or other prohibition preventing such acceleration in respect of the obligations guaranteed hereby, and (y) in the event of any acceleration of such obligations as provided in Article 6 hereof, such obligations (whether or not due and payable) shall become due and payable by each Guarantor for the purpose of each Note Guarantee.

Each Guarantor also agrees to pay any and all costs and expenses (including reasonable attorneys’ fees) incurred by the Trustee or any Holder in enforcing any rights under this Article 10.

Section 10.02. Severability.

In case any provision of this Article 10 shall be invalid, illegal or unenforceable, the validity, legality and enforceability of the remaining provisions shall not in any way be affected or impaired thereby.

-81-

Section 10.03. Limitation on Guarantor’s Liability.

(a) To the extent applicable, a Guarantor’s liability in respect of its Note Guarantee shall be limited to the extent set forth below:

(1) Limitations Applicable to U.S. Guarantors. Each Guarantor that is incorporated, organized or formed, as the case may be, under the laws of the United States, any State thereof or the District of Columbia (a “U.S. Guarantor”), and by its acceptance hereof, each Holder and the Trustee, hereby confirm that it is the intention of all such parties that the Note Guarantee of a U.S. Guarantor does not constitute a fraudulent transfer or conveyance for purposes of Title 11 of the United States Code, as amended, the Uniform Fraudulent Conveyance Act, the Uniform Fraudulent Transfer Act or any similar U.S. Federal or state or other applicable law. To effectuate the foregoing intention, each Holder and each U.S. Guarantor hereby irrevocably agree that the obligations of a U.S. Guarantor under its Note Guarantee shall be limited to the maximum amount as will, after giving effect to all other contingent and fixed liabilities of such U.S. Guarantor (including, without limitation, any guarantees under the Credit Agreement) and after giving effect to any collections from or payments made by or on behalf of any other Guarantor in respect of the obligations of such other Guarantor under its Note Guarantee or pursuant to its contribution obligations under this Indenture, result in the obligations of such U.S. Guarantor not constituting such a fraudulent transfer or conveyance.

(2) Limitations Applicable to Other Guarantors. Each Guarantor that is incorporated, organized or formed, as the case may be, under the laws of any jurisdiction other than one set forth in clause (1) above (an “Other Guarantor”), and by its acceptance hereof, each Holder and the Trustee, hereby confirm that it is the intention of all such parties that the Note Guarantee of an Other Guarantor does not constitute a fraudulent transfer or conveyance for purposes applicable law. To effectuate the foregoing intention, each Holder and each Other Guarantor hereby irrevocably agree that the obligations of an Other Guarantor under its Note Guarantee shall be limited to the maximum amount as will, after giving effect to all other contingent and fixed liabilities of such Other Guarantor (including, without limitation, any guarantees under the Credit Agreement) and after giving effect to any collections from or payments made by or on behalf of any other Guarantor in respect of the obligations of such other Guarantor under its Note Guarantee or pursuant to its contribution obligations under this Indenture, result in the obligations of such Other Guarantor not constituting such a fraudulent transfer or conveyance.

(b) If following the date of this Indenture and notwithstanding anything in Section 8.02 to the contrary:

(1) (i) there shall be any change in the laws of the United States, any State thereof or the District of Columbia or (ii) any Restricted Subsidiary incorporated, organized or formed, as the case may be, under the laws of any jurisdiction other than the United States, any State thereof or the District of Columbia (a “Future Guarantor”) shall be required to execute a Note Guarantee and the Issuers shall reasonably determine that clause (2) with respect to Other Guarantors shall not adequately address the limitations on such Note Guarantee imposed by applicable law of the jurisdiction of incorporation, organization or formation, as the case may be, of any such Future Guarantor; or

(2) the Issuers shall reasonably determine that it shall be necessary or advisable to amend the terms of subsection (a) of this Section 10.03 or to add additional provisions related to the limitations imposed on the Note Guarantee of a Future Guarantor,

then upon the delivery of an Officers’ Certificate and Opinion of Counsel reasonably satisfactory to the Trustee, the Issuers shall be entitled to amend such clauses or add such additional provisions (including any related modifications to the form of notation of Note Guarantee attached hereto in Exhibit A), as the case may be, in order for the Note Guarantee of a Guarantor not to so violate applicable law.

-82-

(c) Each Guarantor that makes a payment for distribution under its Note Guarantee shall be entitled to a contribution from each other Guarantor in a pro rata amount based on adjusted net assets of each Guarantor.

Section 10.04. Successors and Assigns.

This Article 10 shall be binding upon each Guarantor and its successors and assigns and shall inure to the benefit of the successors and assigns of the Trustee and the Holders and, in the event of any transfer or assignment of rights by any Holder or the Trustee, the rights and privileges conferred upon that party in this Indenture and in the Notes shall automatically extend to and be vested in such transferee or assignee, all subject to the terms and conditions of this Indenture.

Section 10.05. No Waiver.

Each of the Guarantors agrees that to the maximum extent permitted under applicable law, (a) neither a failure nor a delay on the part of either the Trustee or the Holders in exercising any right, power or privilege under this Article 10 shall operate as a waiver thereof, nor shall a single or partial exercise thereof preclude any other or further exercise of any right, power or privilege and (b) the rights, remedies and benefits of the Trustee and the Holders herein expressly specified are cumulative and not exclusive of any other rights, remedies or benefits which either may have under this Article 10 at law, in equity, by statute or otherwise.

Section 10.06. Release of Guarantor.

A Guarantor shall be released from all of its obligations under its Note Guarantee and its obligations under this Indenture:

(1) in the event of a sale or other disposition of all or substantially all the assets of such Guarantor, by way of merger, consolidation or otherwise, or a sale or other disposition of all of the Equity Interests of such Guarantor then held by the Partnership and its Restricted Subsidiaries;

(2) if such Guarantor is designated as an Unrestricted Subsidiary or otherwise ceases to be a Restricted Subsidiary, in each case in accordance with the provisions of this Indenture, upon effectiveness of such designation or when it first ceases to be a Restricted Subsidiary, respectively;

(3) in the circumstances described in the proviso of Section 4.20(a) hereof; or

(4) upon Legal Defeasance or Covenant Defeasance or satisfaction and discharge of this Indenture, as provided in Sections 9.01 through 9.04 of this Indenture

Upon delivery by the Issuers to the Trustee of an Officers’ Certificate and an Opinion of Counsel to the effect that one of the foregoing requirements has been satisfied and the conditions to the release of a Guarantor from its Note Guarantee under this Section 10.06 have been met, the Trustee shall execute any documents reasonably required in order to evidence the release of such Guarantor from its obligations under its Note Guarantee.

-83-

Section 10.07. Execution of Supplemental Indenture for Future Guarantors.

Each Subsidiary which is required to become a Guarantor shall, and the Issuers shall cause each such Subsidiary to, promptly execute and deliver to the Trustee a supplemental indenture substantially in the form of Exhibit E hereto pursuant to which such Subsidiary shall become a Guarantor under this Article 10 and shall guarantee the obligations of the Issuers under the Notes and this Indenture. Concurrently with the execution and delivery of such supplemental indenture, the Issuers shall deliver to the Trustee one or more Opinions of Counsel to the effect that such supplemental indenture has been duly authorized, executed and delivered by such Subsidiary and that, subject to the application of bankruptcy, insolvency, moratorium, fraudulent conveyance or transfer and other similar laws relating to creditors’ rights generally and to the principles of equity, whether considered in a proceeding at law or in equity, the Note Guarantee of such Guarantor is a legal, valid and binding obligation of such Guarantor, enforceable against such Guarantor in accordance with its terms.

Section 10.08. Notation of Note Guarantee.

To evidence the Note Guarantee set forth in this Article 10, each Guarantor hereby agrees that a notation of such Note Guarantee shall be placed on each Note authenticated and made available for delivery by the Trustee and that such notation of Note Guarantee shall be executed on behalf of each Guarantor by the manual or facsimile signature of an Officer of each Guarantor. Each Guarantor hereby agrees that the Note Guarantee set forth in Section 10.01 hereof shall remain in full force and effect notwithstanding any failure to endorse on each Note a notation of such Note Guarantee. If an Officer of a Guarantor whose signature is on the notation of Note Guarantee no longer holds that office at the time the Trustee authenticates the Note on which such notation of Note Guarantee is endorsed, the Note Guarantee shall be valid nevertheless. The delivery of any Note by the Trustee, after the authentication thereof hereunder, shall constitute due delivery of the Note Guarantee set forth in this Indenture on behalf of each Guarantor.

Section 10.09. Subordination of Subrogation and Other Rights.

Each Guarantor hereby agrees that any claim against the Issuers that arises from the payment, performance or enforcement of such Guarantor’s obligations under the Note Guarantee or this Indenture, including, without limitation, any right of subrogation, shall be subject and subordinate to, and no payment with respect to any such claim of such Guarantor shall be made before, the payment in full in cash of all outstanding Notes in accordance with the provisions provided therefor in this Indenture.

ARTICLE 11

MISCELLANEOUS

Section 11.01. TIA Controls.

If any provision of this Indenture limits, qualifies or conflicts with another provision which is included in this Indenture by reference of the TIA, the included provision shall control.

-84-

Section 11.02. Notices.

Any notices or other communications required or permitted hereunder shall be in writing in English, and shall be sufficiently given if made by hand delivery, by telecopier or registered or certified mail, postage prepaid, return receipt requested, addressed as follows:

If to the Issuers or any Guarantor:

c/o Stallion Oilfield Services Ltd.

410 Roberts Street

Houston, TX 77003

Attention: General Counsel

Tel: (713) 275-4197

Fax: (713) 528-1276

Copy to:

Vinson & Elkins LLP

First City Tower

1001 Fannin Street, Suite 2500

Houston, TX 77002-6760

Attention Christopher S. Collins

Tel: (713) 758-2222

Fax: (713) 758-2346

If to the Trustee:

The Bank of New York Trust Company, N.A.

Corporate Trust Division

601 Travis Street, 18^th Floor

Houston, TX 77002

Attn: Mauri J. Cowen

Tel: (713) 483-6603

Fax: (713) 483-7803

The Issuers, any Guarantor or the Trustee by written notice to the others may designate additional or different addresses for subsequent notices or communications. Any notice or communication to the Issuers, any Guarantors or the Trustee, shall be deemed to have been given or made as of the date so delivered if personally delivered; when receipt is acknowledged, if telecopied; and five (5) calendar days after mailing if sent by registered or certified mail, postage prepaid (except that a notice of change of address shall not be deemed to have been given until actually received by the addressee). Notwithstanding the foregoing, the Trustee shall not be deemed to have been given notice until such notice is actually received.

Any notice or communication mailed to a Holder shall be mailed to him by first-class mail, postage prepaid, at his address shown on the register kept by the Registrar. Any notice or communication will also be so mailed to any Person described in Section 313(c) of the TIA, to the extent required by the TIA in relation to an indenture qualified thereunder.

-85-

Failure to mail a notice or communication to a Holder or any defect in it shall not affect its sufficiency with respect to other Holders. If a notice or communication to a Holder is mailed in the manner provided above, it shall be deemed duly given, whether or not the addressee receives it.

In case by reason of the suspension of regular mail service, or by reason of any other cause, it shall be impossible to mail any notice as required by this Indenture, then such method of notification as shall be made with the approval of the Trustee shall constitute a sufficient mailing of such notice.

Section 11.03. Communications by Holders with Other Holders.

Holders may communicate pursuant to TIA Section 312(b) with other Holders with respect to their rights under this Indenture or the Notes. The Issuers, the Guarantors, the Trustee, the Registrar and anyone else shall have the protection of TIA Section 312(c).

Section 11.04. Certificate and Opinion as to Conditions Precedent.

Upon any request or application by the Issuers or any Guarantor to the Trustee to take any action under this Indenture, the Issuers or such Guarantor, as the case may be, shall furnish to the Trustee:

(1) an Officers’ Certificate (which shall include the statements set forth in Section 11.05 below) stating that, in the opinion of the signers, all conditions precedent, if any, provided for in this Indenture relating to the proposed action have been complied with; and

(2) an Opinion of Counsel (which shall include the statements set forth in Section 11.05 below) stating that, in the opinion of such counsel, all such conditions precedent, if any, provided for in this Indenture relating to the proposed action have been complied with.

Section 11.05. Statements Required in Certificate and Opinion.

Each certificate and opinion with respect to compliance with a condition or covenant provided for in this Indenture shall include:

(1) a statement that the person making such certificate or opinion has read such covenant or condition and the definitions relating thereto;

(2) a brief statement as to the nature and scope of the examination or investigation upon which the statements or opinions contained in such certificate or opinion are based;

(3) a statement that, in the opinion of such person, it or he has made such examination or investigation as is necessary to enable such person to express an informed opinion as to whether or not such covenant or condition has been complied with; and

(4) a statement as to whether or not, in the opinion of such person, such covenant or condition has been complied with.

-86-

Section 11.06. Rules by Trustee and Agents.

The Trustee may make reasonable rules for action by or at meetings of Holders. The Registrar and Paying Agent may make reasonable rules for their functions.

Section 11.07. Legal Holidays.

A “Legal Holiday” is a Saturday, a Sunday, a federally-recognized holiday or a day on which banking institutions are not required to be open in the State of New York. If a payment date is a Legal Holiday at a place of payment, payment may be made at that place on the next succeeding day that is not a Legal Holiday, and no interest shall accrue for the intervening period.

Section 11.08. Governing Law.

THIS INDENTURE, THE NOTES AND THE NOTE GUARANTEES SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK.

Section 11.09. No Adverse Interpretation of Other Agreements.

This Indenture may not be used to interpret another indenture, loan, security or debt agreement of the Issuers or any Subsidiary thereof. No such indenture, loan, security or debt agreement may be used to interpret this Indenture.

Section 11.10. No Recourse Against Others.

A director, officer, employee, incorporator, stockholder, member or partner of the Issuers or any Guarantor shall not have any liability for any obligations of the Issuers under the Notes or this Indenture or of any Guarantor under its Note Guarantee for any claim based on, in respect of, or by reason of, such obligations or their creation. Each Holder by accepting a Note waives and releases all such liability. The waiver and release are part of the consideration for the issuance of the Notes and the Note Guarantees.

Section 11.11. Successors.

All agreements of each of the Issuers and each Guarantor in this Indenture and the Notes shall bind their respective successors. All agreements of the Trustee and any Agents in this Indenture shall bind their respective successors.

Section 11.12. Consent to Jurisdiction; Waiver of Immunities.

The Issuers and the Guarantors irrevocably consent to the non-exclusive jurisdiction of the competent courts of the State of New York and the competent courts of the United States of America located in the Borough of Manhattan, City and State of New York over any suit, action or proceeding with respect to this Indenture or the transactions contemplated hereby. The Issuers and the Guarantors waive any objection that they may have to the venue of any suit, action or proceeding with respect to this Indenture or the transactions contemplated hereby in the competent courts of the State of New York or the competent courts of the United States of America, in each case, located in the Borough of Manhattan, City and State of New York, or that such suit, action or proceeding brought in the courts of the State of New York or the United States of America, in each case, located in the Borough of Manhattan, City and State of New York was brought in an inconvenient court and agrees not to plead or claim the same.

-87-

Section 11.13. Multiple Counterparts.

The parties may sign multiple counterparts of this Indenture. Each signed counterpart shall be deemed an original, but all of them together represent one and the same agreement.

Section 11.14. Table of Contents, Headings, etc.

The table of contents, cross-reference sheet and headings of the Articles and Sections of this Indenture have been inserted for convenience of reference only, are not to be considered a part hereof, and shall in no way modify or restrict any of the terms or provisions hereof.

Section 11.15. Separability.

Each provision of this Indenture shall be considered separable and if for any reason any provision which is not essential to the effectuation of the basic purpose of this Indenture or the Notes shall be invalid, illegal or unenforceable, the validity, legality and enforceability of the remaining provisions shall not in any way be affected or impaired thereby.

[Signatures on following pages]

-88-

IN WITNESS WHEREOF, the parties have caused this Indenture to be duly executed all as of the date and year first written above.

STALLION OILFIELD SERVICES LTD.
Acting though its general partner, Stallion Interests, LLC,
By:	/s/ David S. Schorlemer
Name:	David Schorlemer
Title:	Vice President & Chief Financial Officer
STALLION OILFIELD FINANCE CORP.
By:	/s/ David S. Schorlemer
Name:	David Schorlemer
Title:	Vice President & Chief Financial Officer
STALLION ACQUISITION, LLC
By:	/s/ David S. Schorlemer
Name:	David Schorlemer
Title:	Vice President & Chief Financial Officer
STALLION ROCKIES LTD.
Acting through its general partner, Stallion Acquisition, LLC
By:	/s/ David S. Schorlemer
Name:	David Schorlemer
Title:	Vice President & Chief Financial Officer
STALLION HEAVY HAULERS L.P.
Acting through general partner, Stallion Acquisition, LLC
By:	/s/ David S. Schorlemer
Name:	David Schorlemer
Title:	Vice President & Chief Financial Officer

[Indenture]

BLR CONSTRUCTION COMPANIES, L.L.C.
By:	/s/ David S. Schorlemer
Name:	David Schorlemer
Title:	Vice President & Chief Financial Officer
SEPARATION SERVICES, INC.
By:	/s/ David S. Schorlemer
Name:	David Schorlemer
Title:	Vice President & Chief Financial Officer
ABBEVILLE OFFSHORE QUARTERS, INC.
By:	/s/ David S. Schorlemer
Name:	David Schorlemer
Title:	Vice President & Chief Financial Officer

[Indenture]

THE BANK OF NEW YORK TRUST COMPANY, N.A.,
as Trustee
By:	/s/ Mauri J. Cowen
Name:	Mauri J. Cowen
Title:	Vice President

[Signature Page to Indenture]

EXHIBIT A

CUSIP No.: [            ]

STALLION OILFIELD SERVICES LTD.

STALLION OILFIELD FINANCE CORP.

9 ³/4% SENIOR NOTE DUE 2015

No. $                    

STALLION OILFIELD SERVICES LTD., a Texas limited partnership (the “Partnership”) and STALLION OILFIELD FINANCE CORP., a Texas corporation (“Finance Corp.” and, together with the Partnership, the “Issuers,” which term includes any successor entities), for value received promise to pay to CEDE & CO. or registered assigns, the principal sum of [            ] DOLLARS on February 1, 2015 [or such other amount as is set forth on the attached Schedule of Exchanges of Interests in the Global Note].*

Interest Payment Dates: February 1 and August 1, commencing August 1, 2007.

Record Dates: January 15 and July 15.

Reference is made to the further provisions of this Note contained herein and the Indenture (as defined), which will for all purposes have the same effect as if set forth at this place.

* This provision should be included only if the Note is issued in global form.

A-1

IN WITNESS WHEREOF, the Issuers have caused this Note to be signed either manually or by facsimile or electronic image scan by their duly authorized Officers.

Dated: ,2007

STALLION OILFIELD SERVICES LTD.
	Acting though its general partner, Stallion Interests, LLC,
By:
Name:
Title:
By:
Name:
Title:
STALLION OILFIELD FINANCE CORP.
By:
Name:
Title:
By:
Name:
Title:

Dated:                     , 2007

A-2

Certificate of Authentication

This is one of the 9 ³/4% Senior Notes due 2015 referred to in the within-mentioned Indenture.

THE BANK OF NEW YORK TRUST COMPANY, N.A. as Trustee
By:
	Authorized Signatory

Dated:                     , 2007

A-3

(REVERSE OF SECURITY)

9 3/4% SENIOR NOTES DUE 2015

[Insert the Global Note Legend, if applicable pursuant to the provisions of the Indenture]

[Insert the Private Placement Legend, if applicable pursuant to the provisions of the Indenture]

1. Interest. Stallion Oilfield Services Ltd., a Texas limited partnership (the “Partnership”) and Stallion Oilfield Finance Corp., a Texas corporation (“Finance Corp.” and, together with the Partnership, the “Issuers”), promise to pay interest on the principal amount of this Note at the rate per annum shown above. Interest on the Notes will accrue from the most recent date on which interest has been paid or, if no interest has been paid, from the date of the original issuance of the Notes. The Issuers will pay interest semi-annually in arrears on each Interest Payment Date, commencing August 1, 2007. Interest will be computed on the basis of a 360-day year of twelve 30-day months.

The Issuers shall pay interest on overdue principal and on overdue installments of interest (without regard to any applicable grace periods) to the extent lawful from time to time on demand at the rate borne by the Notes.

2. Method of Payment. The Issuers shall pay interest on the Notes (except defaulted interest) to the Persons who are the registered Holders at the close of business on the January 15 or July 15 immediately preceding the Interest Payment Date (whether or not such day is a Business Day) even if the Notes are cancelled on registration of transfer or registration of exchange after such Record Date. Holders must surrender Notes to a Paying Agent to collect principal payments. If a Holder has given wire transfer instructions to the Partnership at least ten Business Days prior to the applicable payment date, the Issuers will make all payments on such Holder’s Notes by wire transfer of immediately available funds to the account specified in those instructions. Otherwise, payments on the Notes will be made at the office or agency of the Paying Agent or its affiliate within the City and State of New York unless the Issuers elect to make interest payments by check mailed to the Holders at their addresses set forth in the register of Holders.

3. Paying Agent and Registrar. Initially, The Bank of New York Trust Company, N.A., a national banking association (the “Trustee”), will act as Paying Agent and Registrar. The Issuers may change any Paying Agent, Registrar or co-Registrar without notice to the Holders. Neither the Partnership nor any of its Subsidiaries or Affiliates may act as Paying Agent but may act as Registrar or co-Registrar.

4. Indenture. The Issuers issued this Note under an Indenture, dated as of January 24, 2007 (the “Indenture”), by and among the Issuers, the Guarantors and the Trustee. This Note is one of a duly authorized issue of Initial Notes of the Issuers designated as their 9 3/4% Senior Notes due 2015 (the “Notes”). The Notes include the Initial Notes and the Additional Notes, if any. Capitalized terms herein are used as defined in the Indenture unless otherwise defined herein. The terms of the Notes include those stated in the Indenture and those made part of the Indenture by reference to the Trust Indenture Act of 1939 (15 U.S. Code Sections 77aaa-77bbbb) (the “TIA”), as in effect on the date of the Indenture. Notwithstanding anything to the contrary herein, the Notes are subject to all such terms, and Holders are referred to the Indenture and the TIA for a statement of them. The Notes are general unsecured obligations of the Issuers.

A-4

5. Redemption.

(a) Optional Redemption. The Notes will be redeemable, at the Issuers’ option, in whole at any time or in part from time to time, on and after February 1, 2011 at the following Redemption Prices (expressed as percentages of the principal amount thereof) if redeemed during the twelve-month period commencing on February 1 of the applicable year set forth below, plus, in each case, accrued unpaid interest thereon, if any, to the Redemption Date (subject to the fight of Holders of record on the relevant Record Date to receive interest due on the relevant Interest Payment Date):

Year	Percentage
2011	104.875%
2012	102.438%
2013 and thereafter	100.000%

(b) Redemption at Applicable Premium. In addition, prior to February 1, 2011, the Issuers may redeem the Notes, at their option, in whole at any time or in part from time to time, at a Redemption Price equal to 100% of the principal amount thereof, plus the Applicable Premium as of, and accrued and unpaid interest thereon, if any, to the applicable Redemption Date (subject to the fight of Holders of record on the relevant Record Date to receive interest due on the relevant Interest Payment Date).

(c) Redemption upon Consummation of Certain Qualified Equity Offerings. Notwithstanding the foregoing, at any time, or from time to time, prior to February 1, 2010, the Issuers may on any one or more occasions, at their option, use all or any portion of the net cash proceeds of one or more Qualified Equity Offerings to redeem up to 35% of the aggregate principal amount of the Notes issued at a Redemption Price equal to 109.750% of the principal amount thereof plus accrued and unpaid interest, if any, to the Redemption Date (subject to the right of Holders of record on the relevant Record Date to receive interest due on the relevant Interest Payment Date); provided that at least 65% of the aggregate principal amount of Notes issued under the Indenture remains outstanding immediately after giving effect to any such redemption. In order to effect the foregoing redemption with the proceeds of any Qualified Equity Offering, the Issuers shall consummate such redemption not more than 90 days after the consummation of any such Qualified Equity Offering.

6. Notice of Redemption. Notice of redemption under paragraph 5 of this Note will be mailed at least 30 days but not more than 60 days before the Redemption Date to each Holder to be redeemed at such Holder’s registered address, except that redemption notices may be mailed more than 60 days prior to a Redemption Date if the notice is issued in connection with a satisfaction and discharge of the Indenture.

Except as set forth in the Indenture, if monies for the redemption of the Notes called for redemption shall have been deposited with the Paying Agent for redemption by 11:00 a.m., New York City time, on such Redemption Date, then, unless the Issuers default in the payment of such Redemption Price plus accrued interest, if any, the Notes called for redemption will cease to bear interest from and after such Redemption Date and the only right of the Holders of such Notes will be to receive payment of the Redemption Price plus accrued interest, if any.

7. Offers to Purchase. The Indenture provides that, after certain Asset Sales and upon the occurrence of a Change of Control, and subject to further limitations contained therein, the Partnership will make an offer to purchase certain amounts of the Notes in accordance with the procedures set forth in the Indenture.

A-5

8. Denominations; Transfer; Exchange. The Notes are in registered form, without coupons, in denominations of $2,000 and integral multiples $1,000 in excess thereof. A Holder shall register the transfer or exchange of Notes in accordance with the Indenture. The Registrar may require a Holder, among other things, to famish appropriate endorsements and transfer documents and to pay certain transfer taxes or similar governmental charges payable in connection therewith as permitted by the Indenture. The Registrar need not register the transfer or exchange any Notes or portions thereof selected for redemption.

9. Persons Deemed Owners. The registered Holder of a Note shall be treated as the owner of it for all purposes.

10. Unclaimed Money. If money for the payment of principal or interest remains unclaimed for two years, the Trustee and the Paying Agent will pay the money back to the Issuers. After that, Holders entitled to money must look to the Issuers for payment as general creditors unless an “abandoned property” law designates another person.

11. Legal Defeasance and Covenant Defeasance. If the Issuers at any time deposit with the Trustee U.S. Dollars or U.S. Government Obligations sufficient to pay the principal of and interest on the Notes to redemption or stated maturity and comply with the other provisions of the Indenture relating to defeasance, the Issuers will be discharged from certain provisions of the Indenture and the Notes (including, in the case of Covenant Defeasance, certain covenants, but excluding its obligation to pay the principal of and interest on the Notes).

12. Amendments, Supplements, and Waivers. Subject to certain exceptions, the Indenture or the Notes may be amended or supplemented with the written consent of the Holders of at least a majority in aggregate principal amount of the Notes then outstanding, and any existing Default or Event of Default or noncompliance with any provision may be waived with the written consent of the Holders of a majority in aggregate principal amount of the Notes then outstanding. Without notice to or consent of any Holder, the Issuers and the Trustee may amend or supplement the Indenture or the Notes to, among other things, cure any ambiguity, defect or inconsistency, provide for uncertificated Notes in addition to or in place of certificated Notes or make any other change that does not adversely affect in any material respect the rights of any Holder.

13. Restrictive Covenants. The Indenture imposes certain limitations on the ability of each of the Partnership and its Restricted Subsidiaries to, among other things, incur additional Indebtedness, make payments in respect of its Equity Interests, enter into transactions with Affiliates, enter into Sale and Leaseback Transactions, create dividend or other payment restrictions affecting Restricted Subsidiaries, sell assets, create liens, make certain Investments, merge or consolidate with any other Person, or sell, assign, transfer, lease, convey or otherwise dispose of all or substantially all of its assets. Such limitations are subject to a number of important qualifications and exceptions. The Issuers must annually report to the Trustee on compliance with such limitations.

14. Successor Entity. When a successor entity assumes, in accordance with the Indenture, all the obligations of its predecessor under the Notes and the Indenture, and immediately before and thereafter no Default exists and certain other conditions are satisfied, the predecessor entity will be released from those obligations.

15. Defaults and Remedies. Events of Default are set forth in the Indenture. If an Event of Default (other than an Event of Default specified in Section 6.01(h) or (i)) shall occur and be continuing, the Trustee, by written notice to the Partnership, or the Holders of at least 25% in aggregate

A-6

principal amount of the Notes then outstanding by written notice to the Partnership and the Trustee, may declare all amounts owing under the Notes to be due and payable; provided, however, that after such acceleration but before a judgment or decree based on acceleration, the Holders of a majority in aggregate principal amount of the outstanding Notes may, under certain circumstances, rescind and annul such acceleration and its consequences if all existing Events of Default, other than the nonpayment of principal, premium or interest that has become due solely because of the acceleration, have been cured or waived. No such rescission shall affect any subsequent Default or impair any right consequent thereto. In case an Event of Default specified in Section 6.01(h) or (i) of the Indenture occurs with respect to the Partnership and is continuing, such principal amount, together with premium and interest with respect to all of the Notes, shall be due and payable immediately without any declaration or other act on the part of the Trustee or the Holders.

16. Trustee Dealings with the Issuers. The Trustee under the Indenture, in its individual or any other capacity, may make loans to, accept deposits from, and perform services for the Issuers, and may otherwise deal with the Issuers, their Subsidiaries or their respective Affiliates as if it were not the Trustee.

17. No Recourse Against Others. As more fully described in the Indenture, no director, officer, employee, incorporator, stockholder, member or partner, as such, of the Issuers or any Guarantor shall have any liability for any obligation of the Issuers under the Notes or the Indenture or of any Guarantor under its Note Guarantee or for any claim based on, in respect of or by reason of such obligations or their creation. Each Holder by accepting a Note waives and releases all such liability. Such waiver and release are part of the consideration for the issuance of the Notes and the Note Guarantees.

18. Authentication. This Note shall not be valid until the Trustee or Authenticating Agent manually signs the certificate of authentication on this Note.

19. Governing Law. THIS NOTE SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK.

21. Abbreviations and Defined Terms. Customary abbreviations may be used in the name of a Holder or an assignee, such as: TEN COM (= tenants in common), TEN ENT (= tenants by the entireties), JT TEN (= joint tenants with fight of survivorship and not as tenants in common), CUST (= Custodian), and U/G/M/A (= Uniform Gifts to Minors Act).

22. CUSIP Numbers. Pursuant to a recommendation promulgated by the Committee on Uniform Security Identification Procedures, the Issuers have caused CUSIP numbers to be printed on the Notes as a convenience to the Holders. No representation is made as to the accuracy of such numbers as printed on the Notes and reliance may be placed only on the other identification numbers printed hereon.

23. Indenture. Each Holder, by accepting a Note, agrees to be bound by all of the terms and provisions of the Indenture, as the same may be amended from time to time.

The Issuers will furnish to any Holder upon written request and without charge a copy of the Indenture. Requests may be made to: Stallion Oilfield Services Ltd., Attention: General Counsel, 410 Roberts Street, Houston, Texas 77003, fax: (713) 483-6653.

A-7

FORM OF NOTATION OF NOTE GUARANTEE

For value received, each Guarantor (which term includes any successor Person under the Indenture) has, jointly and severally, unconditionally guaranteed, to the extent set forth in, and subject to the provisions of, the Indenture dated as of January 24, 2007 (the “Indenture”) among Stallion Oilfield Services Ltd. (the “Partnership”), Stallion Oilfield Finance Corp. (“Finance Corp.” and, together with the Partnership, the “Issuers”), the Guarantors party thereto and The Bank of New York Trust Company, N.A., a national banking association, as trustee (the “Trustee”), that (i) the principal of, premium, if any, and interest on the Notes will be promptly paid in full when due, whether at stated maturity, by acceleration, redemption or otherwise, and interest on the overdue principal of, premium, if any, and interest on the Notes, if lawful (subject in all cases to any applicable grace period provided herein), and all other obligations of the Issuers to the Holders or the Trustee hereunder or thereunder will be promptly paid in full, all in accordance with the terms hereof and thereof; and (ii) in case of any extension of time of payment or renewal of any Notes or any of such other obligations, the same will be promptly paid in full when due in accordance with the terms of the extension or renewal, whether at stated maturity, by acceleration or otherwise. Failing payment when due of any amount so guaranteed for whatever reason, the Guarantors shall be jointly and severally obligated to pay the same immediately. The obligations of the Guarantors to the Holders of Notes and to the Trustee pursuant to the Indenture (including the Note Guarantee) are set forth in Article 10 of the Indenture, and reference is hereby made to the Indenture for the precise terms of the Note Guarantee. Each Holder of a Note, by accepting the same agrees to and shall be bound by such provisions.

Capitalized terms used but not defmed herein have the meanings given to them in the Indenture.

[NAME OF EACH GUARANTOR]

By:

Name:

Title:

A-8

ASSIGNMENT FORM

If you the Holder want to assign this Note, fill in the form below and have your signature guaranteed:

I or we assign and transfer this Note to:

(Print or type name, address and zip code and

social security or tax ID number of assignee)

and irrevocably appoint                                                                                                                                                                                     ,

agent to transfer this Note on the books of Stallion Oilfield Services Ltd. and Stallion Oilfield Finance Corp. The agent may substitute another to act for him.

Date:	Signed:
		(Sign exactly as your name appears on the other side of this Note)

Medallion Guarantee:

Signatures must be guaranteed by an “eligible guarantor institution” meeting the requirements of the Registrar, which requirements include membership or participation in the Security Transfer Agent Medallion Program (“STAMP”) or such other “signature guarantee program” as may be determined by the Registrar in addition to, or in substitution for, STAMP, all in accordance with the Securities Exchange Act of 1934, as amended.

A-9

[OPTION OF HOLDER TO ELECT PURCHASE]

If you want to elect to have this Note purchased by Stallion Oilfield Services Ltd. pursuant to Section 4.12 or Section 4.15 of the Indenture, check the appropriate box:

Section 4.12  ¨

Section 4.15  ¨

If you want to elect to have only part of this Note purchased Stallion Oilfield Services Ltd. pursuant to Section 4.12 or Section 4.15 of the Indenture, state the amount you elect to have purchased:

$                                         

Date:	Signed:
		NOTICE: The signature on this instrument must correspond with the name as it appears upon the face of the within Note in every particular without alteration or enlargement or any change whatsoever and be guaranteed by the endorser’s bank or broker.

Medallion Guarantee:                                                                                  

Signatures must be guaranteed by an “eligible guarantor institution” meeting the requirements of the Registrar, which requirements include membership or participation in the Security Transfer Agent Medallion Program (“STAMP”) or such other “signature guarantee program” as may be determined by the Registrar in addition to, or in substitution for, STAMP, all in accordance with the Securities Exchange Act of 1934, as amended.

A-10

SCHEDULE OF EXCHANGES OF INTERESTS IN THE GLOBAL NOTE*

The following exchanges of a part of this Global Note for an interest in another Global Note or for a Certificated Note, or exchanges of a part of another Global Note or Certificated Note for an interest in this Global Note, have been made:

Date of Exchange Amount of decrease in Principal Amount of this Global Note Amount of increase in Principal Amount of this Global Note Principal Amount of this Global Note following such decrease (or increase) Signature of authorized officer of Trustee or Custodian

* This schedule should be included only if the Note is issued in global form.

A-11

EXHIBIT B

CERTIFICATE TO BE DELIVERED UPON EXCHANGE

OR REGISTRATION OF TRANSFER OF NOTES

Re:	Stallion Oilfield Services Ltd. (the “Partnership”)
	Stallion Oilfield Finance Corp. (“Finance Corp.”)
	9 ¾ % Senior Notes due 2015 (the “Notes”)

This Certificate relates to $             principal amount of Notes held in the form of*              a beneficial interest in a Global Note or*              Certificated Notes by              (the “Transferor”).

The Transferor:

¨ has requested by written order that the Registrar deliver in exchange for its beneficial interest in the Global Note held by the Depository a Certificated Note or Certificated Notes in definitive, registered form of authorized denominations and an aggregate principal amount equal to its beneficial interest in such Global Note (or the portion thereof indicated above); or

¨ has requested by written order that the Registrar exchange or register the transfer of a Certificated Note or Certificated Notes.

In connection with such request and in respect of each such Note, the Transferor does hereby certify that the Transferor is familiar with the Indenture relating to the above captioned Notes and the restrictions on transfers thereof as provided in Section 2.16 of such Indenture, and that the transfer of the Notes does not require registration under the Securities Act of 1933, as amended (the “Securities Act”), because*:

¨ Such Note is being acquired for the Transferor’s own account, without transfer (in satisfaction of Section 2.16 of the Indenture).

¨ Such Note is being transferred to a “qualified institutional buyer” (as defined in Rule 144A under the Securities Act), in reliance on Rule 144A.

¨ Such Note is being transferred to an institutional “accredited investor” (within the meaning of subparagraph (a)(1), (2), (3) or (7) of Rule 501 under the Securities Act) which delivers a certificate to the Trustee in the form of Exhibit D to the Indenture. [An Opinion of Counsel to the effect that such transfer does not require registration under the Securities Act accompanies this certification.]

¨ Such Note is being transferred in reliance on Regulation S under the Securities Act and a transfer certificate for Regulation S transfers in the form of Exhibit E to the Indenture accompanies this certification.

¨ Such Note is being transferred in reliance on Rule 144 under the Securities Act. [An Opinion of Counsel to the effect that such transfer does not require registration under the Securities Act accompanies this certification.]

¨ Such Note is being transferred in reliance on and in compliance with an exemption from the registration requirements of the Securities Act other than Rule 144A, Regulation S or Rule 144 under the Securities Act to a person other than an institutional “accredited investor.” [An Opinion of Counsel to the effect that such transfer does not require registration under the Securities Act accompanies this certification.]

B-1

[INSERT NAME OF TRANSFEROR]

By:

[Authorized Signatory]

Date:

*Check applicable blank or box.

C-2

EXHIBIT C

Form of Transferee Letter of Representation

The Bank of New York

Corporate Trust Division

601 Travis Street, 18^th Floor

Houston, TX 77002

Attn:

Ladies and Gentlemen:

This certificate is delivered to request a transfer of $             principal amount of the 9 ³/4% Senior Notes due 2015 of Stallion Oilfield Services Ltd. (the “Partnership”) and Stallion Oilfield Finance Corp. (“Finance Corp.” and, together with the Partnership, the “Issuers”) and any guarantee thereof (the “Notes”). Upon transfer, the Notes would be registered in the name of the new beneficial owner as follows:

Name:

Address:

Taxpayer ID Number:

The undersigned represents and warrants to you that:

1. We are an institutional “accredited investor” (as defined in Rule 501(a)(1), (2), (3) or (7) under the Securities Act of 1933 (the “Securities Act”)) purchasing Notes for our own account or for the account of such an institutional “accredited investor” and we are acquiring the Notes not with a view to, or for offer or sale in connection with, any distribution in violation of the Securities Act. We have such knowledge and experience in financial and business matters as to be capable of evaluating the merits and risk of our investment in the Notes and we invest in or purchase securities similar to the Notes in the normal course of our business. We and any accounts for which we are acting are each able to bear the economic risk of our or its investment.

2. We acknowledge that we have had access to such financial and other information, and have been afforded the opportunity to ask such questions of representatives of the Issuers and receive answers thereto, as we deem necessary.

3. We understand that the Notes have not been registered under the Securities Act and, unless so registered, may not be sold except as permitted in the following sentence. We agree on our own behalf and on behalf of any investor account for which we are purchasing Notes that we will not prior to the date (the “Resale Restriction Termination Date”) that is (a) two years after the later of the original issuance of the Notes and the last date on which the Issuers or any affiliate of the Issuers was the owner of such Notes (or any predecessor thereto) or (b) such later date, if any, as may be required by any subsequent change in applicable law, offer, sell or otherwise transfer such Notes except (a) to the Issuers or any subsidiary of the Issuers, (b) inside the United States to a “qualified institutional buyer” in compliance with Rule 144A under the Securities Act, (c) inside the United States to an “institutional accredited investor” as defined in Rule 501(a)(1), (2), (3) or (7) under the Securities Act that, prior to such transfer, furnishes (or has furnished on its behalf by a U.S. broker-dealer) to the Trustee a signed

C-1

letter substantially in the form of this letter, (d) outside the United States in an offshore transaction in compliance with Rule 904 under the Securities Act, (e) pursuant to any other available exemption from the registration requirements of the Securities Act or (f) pursuant to an effective registration statement under the Securities Act. We acknowledge that the Issuers and the Trustee reserve the right prior to any offer, sale or other transfer prior to the Resale Restriction Termination Date of the applicable Notes pursuant to clause (c) or (e) above to require the delivery of an Opinion of Counsel, certification and/or other information satisfactory to the Issuers and the Trustee.

We understand that the Trustee will not be required to accept for registration of transfer any Notes acquired by us, except upon presentation of evidence satisfactory to the Issuers and the Trustee that the foregoing restrictions on transfer have been complied with. We further understand that any Notes purchased by us will be in the form of definitive physical certificates and that such certificates will bear legend reflecting the substance of paragraph 3 of this letter. We further agree to provide to any person acquiring any of the Notes from us a notice advising such person that transfers of such Notes are restricted as stated herein and that certificates representing such Notes will bear a legend to that effect.

We represent that the Issuers and the Trustee and others are entitled to rely upon the truth and accuracy of our acknowledgments, representations and agreements set forth herein, and we agree to notify you promptly in writing if any of our acknowledgments, representations or agreements herein cease to be accurate and complete. You are also irrevocably authorized to produce this letter or a copy hereof to any interested party in any administrative or legal proceeding or official inquiry with respect to the matters covered hereby.

We represent to you that we have full power to make the foregoing acknowledgments, representations and agreements on our own behalf and on behalf of any investor account for which we are acting as fiduciary agent.

As used herein, the terms “offshore transaction,” “United States” and “U.S. person” have the respective meanings given to them in Regulation S under the Securities Act.

THIS LETTER SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK.

Dated:	TRANSFEREE:
	By:

C-2

EXHIBIT D

Form of Certificate To Be

Delivered in Connection

with Regulation S Transfers

                    ,         

The Bank of New York

Corporate Trust Division

601 Travis Street, 18^th Floor

Houston, TX 77002

Attn:

Re: Stallion Oilfield Services Ltd. And Stallion Oilfield Finance Corp. 9 3/4 % Senior Notes due 2015 (the “Notes”)

Ladies and Gentlemen:

In connection with our proposed sale of $ aggregate principal amount of the Notes, we confirm that such sale has been effected pursuant to and in accordance with Regulation S under the Securities Act of 1933, as amended (the “Securities Act”), and, accordingly, we represent that:

(1) the offer of the Notes was not made to a person in the United States;

(2) either (a) at the time the buy offer was originated, the transferee was outside the United States or we and any person acting on our behalf reasonably believed that the transferee was outside the United States, or (b) the transaction was executed in, on or through the facilities of a designated off-shore securities market and neither we nor any person acting on our behalf knows that the transaction has been prearranged with a buyer in the United States;

(3) no directed selling efforts have been made in the United States in contravention of the requirements of Rule 903(a) or Rule 904(a) of Regulation S, as applicable;

(4) the transaction is not part of a plan or scheme to evade the registration requirements of the Securities Act; and

(5) we have advised the transferee of the transfer restrictions applicable to the Notes.

D-1

You, Stallion Oilfield Services Ltd. and Stallion Oilfield Finance Corp., are entitled to rely upon this letter and are irrevocably authorized to produce this letter or a copy hereof to any interested party in any administrative or legal proceedings or official inquiry with respect to the matters covered hereby. Defined terms used herein without definition have the respective meanings provided in Regulation S.

Very truly yours,

[Name of Transferor]

By:

D-2

EXHIBIT E

FORM OF SUPPLEMENTAL INDENTURE

SUPPLEMENTAL INDENTURE (this “Supplemental Indenture”), dated as of [     ], among [ ] (the “New Guarantor”), a subsidiary of Stallion Oilfield Services Ltd. (or its successor), a Texas limited partnership (the “Partnership”), Stallion Oilfield Finance Corp. (“Finance Corp.” and, together with the Partnership, the “Issuers”), and The Bank of New York Trust Company, N.A., as trustee under the Indenture referred to below (the “Trustee”).

WITNESSETH:

WHEREAS the Issuers have heretofore executed and delivered to the Trustee an Indenture (as such may be amended from time to time, the “Indenture”), dated as of January 24, 2007 providing for the issuance of their 9 3/4% Senior Notes due 2015 (the “Notes”);

WHEREAS under certain circumstances the Issuers are required to cause the New Guarantor to execute and deliver to the Trustee a supplemental indenture pursuant to which the New Guarantor shall unconditionally guarantee all of the Issuers’ obligations under the Notes pursuant to a Note Guarantee on the terms and conditions set forth herein; and

WHEREAS pursuant to Section 8.01 of the Indenture, the Trustee and the Issuers are authorized to execute and deliver this Supplemental Indenture;

NOW THEREFORE, in consideration of the foregoing and for other good and valuable consideration, the receipt of which is hereby acknowledged, the New Guarantor, the Issuers, and the Trustee mutually covenant and agree for the equal and ratable benefit of the Holders as follows:

1. Definitions. (a) Capitalized terms used herein without definition shall have the meanings assigned to them in the Indenture.

(b) For all purposes of this Supplemental Indenture, except as otherwise herein expressly provided or unless the context otherwise requires: (i) the terms and expressions used herein shall have the same meanings as corresponding terms and expressions used in the Indenture; and (ii) the words “herein,” “hereof” and “hereby” and other words of similar import used in this Supplemental Indenture refer to this Supplemental Indenture as a whole and not to any particular section hereof.

2. Agreement to Guarantee. The New Guarantor hereby agrees, jointly and severally with all other Guarantors, to guarantee the Issuers’ obligations under the Notes on the terms and subject to the conditions set forth in Article 10 of the Indenture and to be bound by all other applicable provisions of the Indenture. From and after the date hereof, the New Guarantor shall be a Guarantor for all purposes under the Indenture and the Notes.

3. Ratification of Indenture; Supplemental Indentures Part of Indenture. Except as expressly amended hereby, the Indenture is in all respects ratified and confirmed and all the terms, conditions and provisions thereof shall remain in full force and effect. This Supplemental Indenture shall form a part of the Indenture for all purposes, and every Holder heretofore or hereafter authenticated and delivered shall be bound hereby.

E-1

4. Governing Law. THIS SUPPLEMENTAL INDENTURE SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK.

5. Trustee Makes No Representation. The Trustee shall not be responsible in any manner whatsoever for or in respect of the validity or sufficiency of this Supplemental Indenture or for or in respect of the recitals contained herein, all of which are made solely by the Issuers.

6. Multiple Counterparts. The parties may sign multiple counterparts of this Supplemental Indenture. Each signed counterpart shall be deemed an original, but all of them together represent one and the same agreement.

7. Headings. The headings of this Supplemental Indenture have been inserted for convenience of reference only, are not to be considered a part hereof, and shall in no way modify or restrict any of the terms or provisions hereof.

E-2

IN WITNESS WHEREOF, the parties hereto have caused this Supplemental Indenture to be duly executed as of the date and year first above written.

[NEW GUARANTOR]

By:

Name:

Title:

STALLION OILFIELD SERVICES LTD.

Acting through its general partner, Stallion Interests, LLC,

By:

Name:

Title:

STALLION OILFIELD FINANCE CORP.

By:

Name:

Title:

THE BANK OF NEW YORK TRUST COMPANY, N.A.,as Trustee

By:

Name:

Title:

E-3

EX-23.1

Exhibit 23.1

CONSENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

The Board of Directors

Stallion Oilfield Services, Inc.:

We have issued our report dated April 17, 2007, accompanying the financial statement of Stallion Oilfield Services, Inc., as of April 12, 2007, contained on pages F-4 to F-6 of the Registration Statement on Form S-1 and Prospectus. We consent to the use of the aforementioned report in the Registration Statement on Form S-1 and Prospectus of Stallion Oilfield Services, Inc., and to the use of our name as it appears under the caption “Experts”.

We have issued our report dated March 30, 2007, accompanying the consolidated financial statements of Stallion Oilfield Services Ltd. and subsidiaries, as of December 31, 2006 and 2005 and for the three years ended December 31, 2006, contained on pages F-7 to F-33 of the Registration Statement on Form S-1 and Prospectus. We consent to the use of the aforementioned report in the Registration Statement on Form S-1 and Prospectus of Stallion Oilfield Services, Inc., and to the use of our name as it appears under the caption “Experts”.

We have issued our report dated April 11, 2007, accompanying the financial statement of Abbeville Offshore Quarters, Inc., as of July 31, 2006 and for the seven month period ended July 31, 2006, contained on pages F-34 to F-45 of the Registration Statement on Form S-1 and Prospectus. We consent to the use of the aforementioned report in the Registration Statement on Form S-1 and Prospectus of Stallion Oilfield Services, Inc., and to the use of our name as it appears under the caption “Experts”.

We have issued our report dated June 4, 2007, accompanying the combined financial statements of Salty’s Group, as of December 31, 2006 and 2005 and for the period from inception (August 3, 2005) through December 31, 2005 and the year ended December 31, 2006, contained on pages F-50 to F-59 of the Registration Statement on Form S-1 and Prospectus. We consent to the use of the aforementioned report in the Registration Statement on Form S-1 and Prospectus of Stallion Oilfield Services, Inc., and to the use of our name as it appears under the caption “Experts”.

We have issued our report dated May 30, 2007, accompanying the combined financial statement of L.E.G. Rentals, Inc. and Fluid Processors, Inc., as of December 31, 2006 and for the year ended December 31, 2006, contained on pages F-70 to F-79 of the Registration Statement on Form S-1 and Prospectus. We consent to the use of the aforementioned report in the Registration Statement on Form S-1 and Prospectus of Stallion Oilfield Services, Inc., and to the use of our name as it appears under the caption “Experts”.

/s/    UHY LLP      

UHY LLP

Houston, Texas

June 5, 2007

EX-23.2

Exhibit 23.2

CONSENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

The Board of Directors

Stallion Oilfield Services, Inc.:

We have issued our report dated August 25, 2006, accompanying the financial statements of Abbeville Offshore Quarters, Inc., as of December 31, 2005 and 2004 and for the three years ended December 31, 2005, contained on pages F-92 to F-103 of the Registration Statement on Form S-1 and Prospectus. We consent to the use of the aforementioned report in the Registration Statement on Form S-1 and Prospectus of Stallion Oilfield Services, Inc., and to the use of our name as it appears under the caption “Experts”.

We have issued our report dated June 9, 2006, accompanying the financial statements of Trail Blazer Hot Shot, Inc., as of and for the years ended December 31, 2005 and 2004, contained on pages F-147 to F-156 to the Registration Statement on Form S-1 and Prospectus. We consent to the use of the aforementioned reports in the Registration Statement on Form S-1 and Prospectus of Stallion Oilfield Services, Inc., and to the use of our name as it appears under the caption “Experts”.

We have issued our report dated April 20, 2006, accompanying the financial statements of GL Trucking and Rental, Inc., as of September 12, 2005 and December 31, 2004, and for the period January 1, 2005 through September 12, 2005 and the year ended December 31, 2004, contained on pages F-157 to F-167 to the Registration Statement on Form S-1 and Prospectus. We consent to the use of the aforementioned reports in the Registration Statement on Form S-1 and Prospectus of Stallion Oilfield Services, Inc., and to the use of our name as it appears under the caption “Experts”.

We have issued our report dated December 20, 2005, accompanying the financial statements of Separation Services, Inc., as of and for the year ended December 31, 2004, contained on pages F-168 to F-177 of the Registration Statement on Form S-1 and Prospectus. We consent to the use of the aforementioned report in the Registration Statement on Form S-1 and Prospectus of Stallion Oilfield Services, Inc., and to the use of our name as it appears under the caption “Experts”.

We have issued our report dated January 19, 2006, accompanying the combined financial statements of Stallion Rentals, L.P. dba Trinity Valley Rentals, as of December 31, 2004 and for the six month periods ended June 30, 2004 and December 31, 2004 of Trinity Valley Rentals, Inc. and Stallion Rentals, L.P., respectively, contained on pages F-178 to F-189 of the Registration Statement on Form S-1 and Prospectus. We consent to the use of the aforementioned report in the Registration Statement on Form S-1 and Prospectus of Stallion Oilfield Services, Inc., and to the use of our name as it appears under the caption “Experts”.

We have issued our report dated January 9, 2006, accompanying the financial statements of Envirotech, Inc. as of and for the year ended December 31, 2004, contained on pages F-190 to F-200 to the Registration Statement on Form S-1 and Prospectus. We consent to the use of the aforementioned report in the Prospectus of Stallion Oilfield Services, Inc., and to the use of our name as it appears under the caption “Experts”.

We have issued our report dated January 9, 2006, accompanying the financial statements of Double D Enterprises, Inc., as of and for the year ended December 31, 2004, contained on pages F-201 to F-211 to the Registration Statement on Form S-1 and Prospectus. We consent to the use of the aforementioned report in the Registration Statement on Form S-1 and Prospectus of Stallion Oilfield Services, Inc., and to the use of our name as it appears under the caption “Experts”.

/S/    UHY MANN FRANKFORT STEIN & LIPP CPAS, LLP      

UHY Mann Frankfort Stein & Lipp CPAs, LLP

Houston, Texas

June 5, 2007

EX-23.3

Exhibit 23.3

Consent of Wright, Moore, DeHart, Dupuis & Hutchinson, L.L.C.

Certified Public Accountants

We hereby consent to the use in the Registration Statement on Form S-1 of Stallion Oilfield Services, Inc. of our reports dated May 27, 2005, March 17, 2006 and March 25, 2006 relating to the financial statements of BLR Construction Companies, LLC as of December 31, 2003, December 31, 2004 and December 31, 2005 and for the years ended December 31, 2003, December 31, 2004 and December 31, 2005.

We also consent to the reference to us under the caption “Experts” in the Registration Statement.

Wright, Moore, DeHart, Dupuis & Hutchinson, L.L.C.

Lafayette, Louisiana

June 5, 2007

EX-23.4

Exhibit 23.4

CONSENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

The Board of Directors

Stallion Oilfield Services, Inc.:

We have issued our report dated April 16, 2007, accompanying the financial statements of Bayou Tank Company and Subsidiary as of and for the year ended December 31, 2006, contained on pages F-60 to F-69 to the Registration Statement on Form S-1 and Prospectus. We consent to the use of the aforementioned report in the Registration Statement on Form S-1 and Prospectus of Stallion Oilfield Services, Inc., and to the use of our name as it appears under the caption “Experts”.

/s/ Melton & Melton, L.L.P.

Houston, Texas

June 5, 2007