It is believed that natural gas will be in high demand in North America over the next several years because of the growing popularity of this clean-burning fuel. According to the International Energy Association’s 2004 World Energy Outlook, natural gas demand in North America (United States, Canada and Mexico) is projected to grow by approximately 45% from 2002 to 2030.

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 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 just to maintain flat production. To supply the growing demand for natural gas, the primary alternatives are to increase drilling, enhance recovery rates or import liquified natural gas, or LNG, from overseas. Although most forecasts anticipate an increase of LNG imports, to date minimal increases have occurred.

The number of drilling rigs under contract in the United States and Canada has increased from 1,181 at the beginning of 2003 to 1,981 in August 2005, according to the Baker Hughes Incorporated. The number of well service rigs has increased from 1,478 to 2,045 from the beginning of 2003 through August 2005.

The Company is one of the leading providers of coiled tubing services in North America. As of August 31, 2005, the Company operated a fleet of 32 coiled tubing units and 27 pressure pumping units, as well as 14 nitrogen units. The Company uses these assets to perform a variety of wellbore applications, including foam washing, acidizing, displacing, cementing, gravel packing, plug drilling, fishing and jetting.

As of August 31, 2005, the Company owned and operated a fleet of 103 well service rigs, including 63 units that are either recently constructed or have been rebuilt over the past five years. The Company provides well service rig operations in Wyoming, Colorado, Utah, Montana, North Dakota, Oklahoma and Texas. These rigs are used to perform a variety of completion, workover and maintenance services, such as installations, completions, assisting with perforating, removing defective equipment and sidetracking wells.

As of August 31, 2005, the Company operated a fleet of 11 snubbing units, four of which are rig assist units. Snubbing services use specialized hydraulic well service units that permit an operator to repair damaged casing, production tubing and downhole production equipment in high-pressure, “live-well” environments.

The Company provides an array of complementary downhole and wellsite services that it classifies into four groups: wireline services; production optimization services; production testing services; and rental, fishing and pressure testing services. Oil and gas operations use and produce significant quantities of fluids. The Company provides a variety of services to assist its customers to obtain, move, store and dispose of fluids that are involved in the development and production of their reservoirs. The Company provides fluid handling services in Texas, Oklahoma, Colorado, Wyoming, North Dakota and Montana.

These expenses increased 160%, or $130.2 million, for the six months ended June 30, 2005, to $211.8 million from $81.6 million for the six months ended June 30, 2004.

Selling, general and administrative expenses increased 169%, or $29.3 million, for the six months ended June 30, 2005, to $46.5 million from $17.2 million during the same period in 2004.

Depreciation and amortization expense increased 179%, or $13.2 million, to $20.6 million for the six months ended June 30, 2005, from $7.4 million during the same period in 2004.