Call Option Transaction

To:

SESI, LLC

1105 Peters Road

Harvey, Louisiana, 70058

Attention: Mr. Robert S. Taylor, Chief Financial Officer

Telephone No.:

(504) 210-4105

Facsimile No.:

(504) 362-9642

From:

Lehman Brothers Inc., acting as Agent

Lehman Brothers OTC Derivatives Inc., acting as Principal

Attention: Transaction Management Group

Telephone No.:

(212) 526-9986

Facsimile No.:

(646) 885-9546

Trade Date:

December 7, 2006

Option Style:

“Modified American”, as described under “Procedures for Exercise” below.

Option Type:

Call

Buyer:

Counterparty

Seller:

Dealer

Shares:

The common stock of Superior Energy Services, Inc., par value USD 0.001 per Share (Exchange symbol “SPN”), subject to an adjustment as set forth under “Consequences of Merger Events” below.

Number of Options:

The product of (i) the Applicable Percentage and (ii) the number of Exchangeable Notes in denominations of USD 1,000 principal amount issued by Counterparty on the closing date for the initial issuance of the Exchangeable Notes. For the avoidance of doubt, the Number of Options outstanding shall be reduced by each exercise of Options hereunder. In no event will the Number of Options be less than zero.

Option Entitlement:

As of any date, a number of Shares per Option equal to the Exchange Rate as of such date (as defined in the Indenture, but without regard to any adjustments to the Exchange Rate pursuant to Section 12.03 of the Indenture, except to the extent provided under “Delivery Obligation” below).

Applicable Percentage:

50%

Premium:

USD 48,000,000 (Premium per Option USD 240).

Premium Payment Date:

December 12, 2006

Exchange:

New York Stock Exchange

Related Exchange(s):

All Exchanges

Procedures for Exercise:

Exercise Period(s):

Notwithstanding the Equity Definitions, the Exercise Period shall be, in respect of the Exercisable Options (as defined below), each period commencing on and including an Exchange Date to and including 5:00 PM (New York City time) on the Scheduled Trading Day immediately preceding the first day of the related Observation Period (as defined in the Indenture); provided that if by the 30 ^th Scheduled Trading Day prior to December 15, 2011, Counterparty has specified December 15, 2011 as a redemption date for the Exchangeable Notes pursuant to the terms of the Indenture, there shall be a single Exercise Period for Exercisable Options with respect to any Exchangeable Notes surrendered for exchange following Counterparty’s notice of such redemption and the final day of the Exercise Period shall be the Scheduled Trading Day immediately preceding the redemption date; provided further that if by the 30 ^th Scheduled Trading Day prior to December 15, 2011, Counterparty has not specified December 15, 2011 as a redemption date for the Exchangeable Notes pursuant to the terms of the Indenture, notices of exchange received by Counterparty from holders of Exchangeable Notes following such 30 ^th Scheduled Trading Day prior to December 15, 2011 shall not result in the commencement of an Exercise Period and no Exercisable Options will be exercised or deemed exercised in respect of such notices of exchange of Exchangeable Notes.

Exchange Date:

Each “Exchange Date”, as defined in the Indenture, occurring during the Exercise Period for Exchangeable Notes (such Exchangeable Notes, the “ Relevant Exchangeable Notes ” for such Exchange Date).

Exercisable Options:

In respect of each Exercise Period, a number of Options equal to the product of (i) the Applicable Percentage and (ii) the number of Relevant Exchangeable Notes surrendered to

Counterparty for exchange with respect to such Exercise Period but no greater than the Number of Options.

Expiration Date:

The earlier of (i) the last day on which any Exchangeable Notes remain outstanding and (ii) December 15, 2011.

Minimum Number of Options:

Zero

Maximum Number of Options:

Number of Options

Multiple Exercise:

Applicable, as described under Exercisable Options above.

Automatic Exercise:

Applicable; and means that in respect of an Exercise Period, a number of Options not previously exercised hereunder equal to the Exercisable Options shall be deemed to be exercised on the Expiration Date for such Exercisable Options; provided that such Options shall be deemed exercised only to the extent that Counterparty has provided a Notice of Exercise to Dealer.

Notice of Exercise:

Notwithstanding anything to the contrary in the Equity Definitions, in order to exercise any Exercisable Options, Counterparty or trustee under the Indenture (the “Trustee” ) on behalf of Counterparty must notify Dealer in writing prior to 5:00 P.M., New York City time, on the Scheduled Trading Day prior to the first day of the Observation Period for the Relevant Exchangeable Notes in respect of which the Exercisable Options are being exercised (the “Notice Deadline” ) of (i) the number of such Exercisable Options, (ii) the first day of the Observation Period and the expected Settlement Date, and (iii) the method by which Counterparty is satisfying its obligation to exchange the Relevant Exchangeable Notes; provided that, notwithstanding the foregoing, such notice (and the related Automatic Exercise of Options) shall be effective if given after the Notice Deadline but prior to 5:00 PM (New York City time) on the fifth Exchange Business Day of such “Observation Period,” in which event the Calculation Agent shall have the right to adjust the Delivery Obligation as appropriate to reflect the additional costs (including, but not limited to, hedging mismatches and market losses) and expenses incurred by Dealer or any of its affiliates in connection with its hedging

activities (including the unwinding of any hedge position) as a result of its not having received such notice prior to the Notice Deadline, unless Counterparty’s chief financial officer received a phone call from an officer of the Dealer inquiring about such notice between 9:00 AM and 5:00 PM (New York City time) on the second Exchange Business Day preceding the beginning of the Observation Period, in which case this proviso shall not apply; provided further that in respect of Exercisable Options relating to Exchangeable Notes tendered for exchange following the election by Counterparty of December 15, 2011 as a redemption date for the Exchangeable Notes pursuant to the terms of the Indenture, such notice may be given on or prior to the second Scheduled Trading Day immediately preceding the Expiration Date and need only specify the number of such Exercisable Options .

Dealer’s Telephone Number and Telex and/or Facsimile Number and Contact Details for purpose of Giving Notice of Exercise:

To be provided by Dealer.

Valuation Time:

At the close of trading of the regular trading session on the Exchange; provided that if the principal trading session is extended, the Calculation Agent shall determine the Valuation Time in its reasonable discretion.

Market Disruption Event:

Section 6.3(a) of the Equity Definitions is hereby amended by (x) deleting the phrase “during the one hour period that ends at the relevant Valuation Time” in Section 6.3(a)(ii) and replacing it with the phrase “at any time prior to 1:00 p.m. on such Scheduled Trading Day of an aggregate one half hour period” and (y) deleting the phrase “or (iii) an Early Closure”.

Settlement Terms:

Settlement Date:

In respect of an Exercise Date, the settlement date for the Shares and cash (in respect of fractional shares) to be delivered under the Relevant Exchangeable Notes under the terms of the Indenture; provided that if such a day is not the third Currency Business Day following

the last day of the related Observation Period, Dealer shall use its reasonable efforts to make deliveries on the Settlement Date for the Relevant Exchangeable Notes (subject to receipt of a prior notice from Issuer sufficiently in advance of such Settlement Date) and if, notwithstanding such reasonable efforts, the Dealer is unable to effect the delivery on such day, then it shall be the third Currency Business Day following the last day of the related Observation Period.

Delivery Obligation:

In lieu of the obligations set forth in Sections 8.1 and 9.1 of the Equity Definitions, and subject to “Notice of Exercise” above, in respect of an Exercise Date occurring on or with respect to an Exchange Date, Dealer will deliver to Counterparty, on the related Settlement Date, for each Option exercised or deemed exercised, an amount equal to the product of (x) the Applicable Percentage and (y) an aggregate number of Shares and an aggregate amount of cash (in respect of fractional Shares) in excess of (i) USD 1,000 (if Counterparty has elected to settle the Relevant Exchangeable Notes in cash and Shares) or (ii) the number of Shares equivalent to USD 1,000 (if Counterparty has elected to settle the Relevant Exchangeable Notes in Shares only), as determined by the Calculation Agent based on the sum, for all Trading Days in the Observation Period, of a respective number of Shares equal to USD 40 divided by the Daily VWAP (as defined in the Indenture) for each such Trading Day (if Counterparty has elected to settle the Relevant Exchangeable Notes in Shares only) that Counterparty is obligated to deliver to the holder(s) of the Relevant Exchangeable Notes exchanged on such Exchange Date pursuant to Section 12.01(d) of the Indenture (the “Exchange Obligation” ); provided that, if the Relevant Exchangeable Notes are being exchanged in connection with any Fundamental Change (as defined in the Indenture), (a) the Calculation Agent shall determine an amount that would be payable by Dealer to Counterparty pursuant to Section 6(e)(ii)(1) of the Agreement (for purposes of such determination, the Calculation Agent shall not be taking into account the amount deliverable to the holder(s) of the Relevant Exchangeable Notes pursuant to Section 12.03

of the Indenture) if (x) the Number of Options were equal to the product of the Applicable Percentage and the number of the Relevant Exchangeable Notes and (y) the Fundamental Change were an Additional Termination Event occurring on the effective date for the Fundamental Change with Counterparty as the sole Affected Party (the “Fair Value Amount” ), and (b) to the extent that a number of additional Shares that Counterparty is obligated to deliver to holder(s) of the Relevant Exchangeable Notes as a result of any adjustments to the Exchange Rate pursuant to Section 12.03 of the Indenture in respect of such Fundamental Change exceeds the number of Shares equal to the Fair Value Amount (such number of Shares to be determined by the Calculation Agent based on the daily VWAP of the Shares on the effective date of the Fundamental Change), then the “Delivery Obligation” shall be determined excluding any such excess Shares. For the avoidance of doubt, if the “Exchange Obligation”, as defined in the Indenture, is less than or equal to USD 1,000 (or a number of Shares equivalent to USD 1,000 determined as set forth above), Dealer will have no delivery obligation hereunder.

Notice of Delivery Obligation:

No later than the Exchange Business Day immediately following the last day of the “Observation Period”, as defined in the Indenture, Counterparty or the Trustee on behalf of Counterparty shall give Dealer notice of the final number of Shares and the amount of cash (in respect of fractional shares) comprising the Exchange Obligation (it being understood, for the avoidance of doubt, that the requirement of Counterparty to deliver such notice shall not limit Counterparty’s obligations with respect to Notice of Exercise, as set forth above, in any way).

Other Applicable Provisions:

To the extent Dealer is obligated to deliver Shares hereunder, the provisions of Sections 9.1(c), 9.8, 9.9, 9.11, 9.12 and 10.5 of the Equity Definitions will be applicable, except that all references in such provisions to “Physical Settlement” shall be read as references to “Net Share Settlement”; and provided that the Representation and Agreement contained in Section 9.11 of the Equity Definitions shall be modified by

excluding any representations therein relating to restrictions, obligations, limitations or requirements under applicable securities laws as a result of the fact that Buyer is the Issuer of the Shares. “Net Share Settlement” in relation to any Option means that Dealer is obligated to deliver Shares hereunder.

Method of Adjustment:

Calculation Agent Adjustment, and means that, notwithstanding Section 11.2(c) of the Equity Definitions, upon any adjustment to the Exchange Rate of the Exchangeable Notes pursuant to the Indenture (other than Section 12.03 of the Indenture, except to the extent provided under “Delivery Obligation” above), the Calculation Agent will make a corresponding adjustment to any one or more of the Number of Options, the Option Entitlement and any other variable relevant to the exercise, settlement or payment for the Transaction. Immediately upon the occurrence of any adjustment contemplated in Section 12.03 of the Indenture (an “ Adjustment Event ”), Counterparty shall notify the Calculation Agent of such Adjustment Event; and once the adjustments to be made to the terms of the Indenture and the Exchangeable Notes in respect of such Adjustment Event have been determined, Counterparty shall immediately notify the Calculation Agent in writing of the details of such adjustments.

Potential Adjustment Events:

Notwithstanding Section 11.2(e) of the Equity Definitions, a “Potential Adjustment Event” means an occurrence of any event or condition, as set forth in Section 12.02 of the Indenture that would result in an adjustment to the Exchange Rate of the Exchangeable Notes; provided that in no event shall there be any adjustment hereunder as a result of an adjustment to the Exchange Rate pursuant to Section 12.03 of the Indenture, except to the extent provided under “Delivery Obligation” above.

Extraordinary Events applicable to the Transaction:

Merger Events:

Notwithstanding Section 12.1(b) of the Equity Definitions, a “Merger Event” means the occurrence of any event or condition set forth in Section 12.05 of the Indenture.

Tender Offers:

Notwithstanding Section 12.1(d) of the Equity Definitions, a “Tender Offer” means the occurrence of any event or condition set forth in Section 12.02(e) of the Indenture and, upon the occurrence of such an event, adjustments set forth under “Method of Adjustment” above shall apply.

Consequences of Merger Events:

Notwithstanding Section 12.2 of the Equity Definitions, upon the occurrence of a Merger Event, the Calculation Agent shall make a corresponding adjustment in respect of any adjustment under the Indenture to any one or more of the nature of the Shares, Number of Options, the Option Entitlement and any other variable relevant to the exercise, settlement or payment for the Transaction; provided however that such adjustment shall be made without regard to any adjustment to the Exchange Rate for the issuance of additional shares as set forth in Section 12.03 of the Indenture, except to the extent provided under “Delivery Obligation” above. Notwithstanding the foregoing, upon the occurrence of a Merger Event that constitutes a “Public Acquirer Change in Control”, as defined in the Indenture, with respect to which Counterparty elects to adjust the terms of the Exchangeable Notes in accordance with Section 12.04 of the Indenture (such a Public Acquirer Change in Control, a “ PACC Event ”), subject to compliance with the proviso to this sentence, the Calculation Agent will adjust any one or more of the nature of the Shares, the Number of Options, the Option Entitlement and any other variable relevant to the exercise, settlement or payment for the Transaction to the extent required to preserve the fair value of the Transaction to Dealer (such adjustments, the “ PACC Adjustments ”); provided that, as a condition precedent to the adjustments contemplated above, Counterparty and, if Counterparty is not the issuer of the “Public Acquirer Common Stock”, as defined in the

Indenture, the issuer of the Public Acquirer Common Stock, shall, prior to the effective date of such PACC Event, have entered into such documentation containing representations, warranties and agreements relating to securities laws and other issues as requested by Dealer that Dealer determined, in its reasonable discretion, to be reasonably necessary or appropriate to allow Dealer to continue as a party to the Transaction, as adjusted, and to preserve its hedge unwind, hedge leg in and other hedging activities in connection with the Transaction in a manner compliant with applicable legal, regulatory or self-regulatory requirements, or with related policies and procedures applicable to Dealer.

Nationalization, Insolvency or Delisting:

Cancellation and Payment (Calculation Agent Determination); provided that Counterparty may elect settlement of the related obligation in accordance with Section 9(k) below; provided, further that, in addition to the provisions of Section 12.6(a)(iii) of the Equity Definitions, it will also constitute a Delisting if the Exchange is located in the United States and the Shares are not re-listed, re-traded or re-quoted within 30 Exchange Business Days following such Delisting on a U.S. national or regional securities exchange or an established automated over-the-counter trading market in the U.S.; if the Shares are re-listed, re-traded or re-quoted within 30 Scheduled Trading Days following such Delisting on any U.S. national or regional securities exchange or an established automated over-the-counter trading market in the U.S., such exchange or quotation system shall thereafter be deemed to be the Exchange.

Additional Disruption Events:

Change in Law:

Applicable

Failure to Deliver:

Applicable

Insolvency Filing:

Applicable

Hedging Disruption:

Not Applicable

     Determining Party:

For all applicable Additional Disruption Events, Dealer.

Non-Reliance:

Applicable

Agreements and Acknowledgements Regarding Hedging Activities:

Applicable

Additional Acknowledgments:

Applicable

     4. Calculation Agent:

Dealer

(a)

Account for payments to Counterparty:

(b)

Account for payments to Dealer:

(a)

Address for notices or communications to Counterparty: