879884--3/16/2007--T-3_ENERGY_SERVICES

related topics

{stock, price, operating}

{cost, regulation, environmental}

{stock, price, share}

{product, market, service}

{loss, insurance, financial}

{product, liability, claim}

{cost, operation, labor}

{provision, law, control}

{control, financial, internal}

{gas, price, oil}

{acquisition, growth, future}

{customer, product, revenue}

{condition, economic, financial}

{operation, international, foreign}

{personnel, key, retain}

{interest, director, officer}

A decline in or substantial volatility of oil and gas prices could adversely affect the demand and prices for our products and services. We rely on a few key employees whose absence or loss could disrupt our operations or be adverse to our business. Our inability to deliver our backlog on time could affect our future sales and profitability and our relationships with our customers. Our industry has recently experienced shortages in the availability of qualified personnel. Any difficulty we experience replacing or adding qualified personnel could adversely affect our business. Shortages of raw materials may restrict our operations. We intend to expand our business through strategic acquisitions. Our acquisition strategy exposes us to various risks, including those relating to difficulties in identifying suitable acquisition opportunities and integrating businesses and the potential for increased leverage or debt service requirements. The oilfield service industry in which we operate is highly competitive, which may result in a loss of market share or a decrease in revenue or profit margins. If we do not develop and commercialize new competitive products, our revenue may decline. The cyclical nature of or a prolonged downturn in our industry could affect the carrying value of our goodwill. We may be faced with product liability claims. Liability to customers under warranties may materially and adversely affect our earnings. Uninsured or underinsured claims or litigation or an increase in our insurance premiums could adversely impact our results. Our operations are subject to stringent environmental laws and regulations that may expose us to significant costs and liabilities. We will be subject to political, economic and other uncertainties as we expand our international operations. If we are unable to complete our assessment of the adequacy of our internal control over financial reporting as required by Section 404 of the Sarbanes-Oxley Act of 2002, investors could lose confidence in the reliability of our financial statements, which could result in a decrease in the value of our common stock. Risks Relating to Our Common Stock The market price of our common stock may be volatile or may decline regardless of our operating performance. Our largest stockholder is able to exercise significant influence over our company, and its interests may conflict with those of our other stockholders. We may incur increased costs as a result of no longer being a controlled company. One of our directors may have conflicts of interest because he is also an officer of First Reserve Corporation. The resolution of these conflicts of interest may not be in our or our stockholders best interests. We renounced any interest in specified business opportunities, and First Reserve Fund VIII and its director designees on our board of directors generally will have no obligation to offer us those opportunities. Our ability to issue preferred stock could adversely affect the rights of holders of our common stock. Certain provisions in our charter documents have anti-takeover effects. Because we have no plans to pay any dividends for the foreseeable future, investors must look solely to stock appreciation for a return on their investment in us.

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879884--3/16/2007--T-3_ENERGY_SERVICES_INC