~ Reports diluted EPS of $0.55 before merger costs for the second quarter

                                 of 2008 ~



    MIDLAND, Texas, Aug. 4 /EMWNews/ -- Basic Energy Services,

Inc. (NYSE: BAS) ("Basic") today announced its financial and operating

results for the second quarter and six months ended June 30, 2008.



    Basic reported net income of $22.9 million, or $0.55 per diluted share,

before merger related costs, for the second quarter of 2008, compared to

$21.7 million, or $0.52 per diluted share, in the same period in 2007. Net

income for the second quarter of 2008, including a $4.2 million after-tax

charge related to the termination of the Grey Wolf, Inc. merger, was $18.7

million, or $0.45 per diluted share. Revenues increased 13% to $251.5

million for the second quarter of 2008 compared to $223.3 million in the

second quarter of 2007.



    Adjusted EBITDA (defined as net income before interest, taxes,

depreciation and amortization, excluding pre-tax merger costs ($6.6 million

in the second quarter of 2008)) for the second quarter of 2008 increased 9%

to $71.6 million, or 28% of revenue, compared to EBITDA (defined as net

income before interest, taxes, depreciation and amortization) of $65.8

million, or 29% of revenue, in the same period in 2007. EBITDA and Adjusted

EBITDA, which are not measures determined in accordance with generally

accepted accounting principles ("GAAP"), are defined and reconciled in note

2 under the accompanying financial tables.



    For the six-month period ended June 30, 2008, Basic reported net income

of $42.6 million in 2008, or $1.02 per diluted share, before merger related

costs, compared to $43.8 million, or $1.08 per diluted share, in the same

period in 2007. Including the $4.2 million after-tax charge related to the

termination of the Grey Wolf, Inc. merger, net income for the first six

months of 2008 was $38.4 million, or $0.92 per diluted share. Revenues

increased 14% to $481.4 million in the first six months of 2008, compared

to $422.2 million in the same period of 2007.



    Adjusted EBITDA (i.e., EBITDA before merger-related costs of $6.6

million in the first six months of 2008) rose 10% to $137.7 million in the

first six months of 2008, or 29% of revenue, compared to $125.5 million, or

30% of revenue, during the same period in 2007.



    Ken Huseman, Basic's President and Chief Executive Officer, stated,

"Our record level of revenue and good cost control led to strong operating

margins for the quarter. We are proud of the efforts of our people

throughout the organization who drove exceptional performance despite

distractions from the terminated Grey Wolf merger.



    "The outlook for each of our business segments continues to improve as

the year progresses. Despite coming off historical highs, oil prices are

well above the level required by our customers to aggressively seek

opportunities to increase production and add to their reserves. Near-term

weakness in gas prices should be short-lived and offset by increased

activity in the Haynesville shale play where we have had a substantial

presence for years, our internal growth initiatives in the Barnett Shale

and the expansion of our dominant market position in the Permian Basin,

which also includes the growing gas drilling activity in the Ft. Stockton

area. In conjunction with this enhanced activity, we are beginning to

experience an increase in pricing and utilization, making us optimistic for

improved results as we progress through the remainder of 2008."








    Business Segment Results



    Well Servicing



    Well servicing revenues rose approximately 3% to $89.0 million during

the second quarter of 2008 compared to $86.1 million in the same period

last year. Sequentially, revenues for this segment rose about 11% compared

to the first quarter of 2008. Basic added seven newbuild rigs, acquired

eight rigs and retired one rig during the second quarter of 2008, bringing

its well servicing rig count to 409 as of June 30, 2008. Weighted average

number of well servicing rigs increased to 403 during the second quarter of

2008 compared to 371 during the same period in 2007, an increase of 9%.

Revenue per well servicing rig hour decreased 4% to $400 during the second

quarter of 2008 compared to $415 in the same period in 2007. The full-fleet

well servicing rig utilization rate improved sequentially to 77% in the

second quarter of 2008 compared to 72% in the first quarter of 2008 as

activity levels increased due to seasonal and improved market conditions.

Rig utilization rate of 77% for the second quarter of 2008 was essentially

flat from the prior year.



    Well servicing segment profit in the second quarter of 2008 was $33.7

million, slightly lower than $34.0 million in the second quarter of 2007,

but higher than the $32.1 million in the first quarter of 2008. Segment

profit margins declined to 38% of revenue in the second quarter of 2008

compared to 40% in the same period of 2007, mainly due to higher personnel

and fuel-related costs.



    Fluid Services



    Fluid services revenues in the second quarter of 2008 increased 15% to

$72.6 million compared to $63.2 million in the same period in 2007.

Sequentially, revenues for this segment were up 2% compared to the first

quarter of 2008. Basic added 16 new trucks, acquired 21 trucks and retired

7 trucks during the second quarter of 2008, bringing the total number of

fluid services trucks to 678 as of June 30, 2008. Weighted average number

of fluid services trucks increased 1% to 663 during the second quarter of

2008 compared to 657 during the same period in 2007. Average revenue per

fluid services truck increased by 14% to $109,000 in the second quarter of

2008 compared to $96,000 in the same period in 2007. Segment profit in the

second quarter of 2008 was $24.0 million, or 33% of revenue, compared to

$22.8 million, or 36% of revenue, in the same period in 2007. The decrease

in segment profit as a percent of revenue was primarily due to higher

maintenance and repair and fuel-related costs.



    Completion & Remedial Services



    Completion and remedial services revenues during the second quarter of

2008 increased 25% to $79.6 million compared to $63.7 million in the same

period in 2007. Sequentially, revenues for this segment grew about 16%

compared to the first quarter of 2008. Segment profit in the second quarter

of 2008 rose to $36.9 million, or 46% of revenue, compared to $30.4

million, or 48% of revenue, in the same period in 2007. The increase in

revenue and segment profit was mainly due to several acquisitions made in

the past year as well as internal expansion. Segment profit as a percent of

revenue declined from 2007 mainly due to increased costs of the materials

used in Basic's pressure pumping operations as well as higher fuel related

costs. As of June 30, 2008, Basic had approximately 128,000 hydraulic

horsepower of pressure pumping capacity compared to approximately 119,000

hydraulic horsepower as of June 30, 2007.



    Contract Drilling



    Contract drilling revenues rose slightly to $10.3 million during the

second quarter of 2008 compared to $10.2 million in the comparable quarter

in 2007. Sequentially, revenues for this segment increased about 9%

compared to the first quarter of 2008. Segment profit in the second quarter

of 2008 declined to $2.8 million versus $4.0 million last year during the

second quarter of 2007, as revenue per day decreased to $14,800 in the

second quarter of 2008 from $17,200 in the same period last year.



    Basic operated nine drilling rigs during the second quarter of 2008, up

from eight drilling rigs in the same period in 2007. Rig operating days

were 699 in the second quarter of 2008 compared to 594 in the same period

in 2007.



    Capital Expenditures



    During the first half of 2008, Basic completed four acquisitions for

total consideration of $51 million in cash. Total capital expenditures that

included capital leases and excluded acquisitions were $65.5 million,

comprised of $21.7 million for expansion projects, $36.7 million for

sustaining and replacement projects, and $7.1 million for other projects.

Expansion capital spending included $6.4 million for the well servicing

segment, $2.6 million for the fluid services segment and $12.7 million for

the completion and remedial services segment. Other capital expenditures of

$7.1 million were mainly for facilities and IT infrastructure.



    Recent Events



    On July 15, 2008, Basic announced that they had terminated the

Agreement and Plan of Merger (the "Merger Agreement") previously entered

into among Basic, Grey Wolf. Inc. ("Grey Wolf") and Horsepower Holdings,

Inc. on April 20, 2008 pursuant to Section 7.1(b)(iii) of the Merger

Agreement. The decision to terminate the Merger Agreement was made after

Grey Wolf's stockholders did not approve the Merger Agreement at a special

meeting of stockholders held on Tuesday, July 15, 2008. Basic's

stockholders voted in favor of the adoption of the Merger Agreement at

Basic's special meeting of stockholders also held on July 15, 2008.



    On July 15, 2008, in accordance with provisions in the merger

agreement, Basic received $5 million expense reimbursement from Grey Wolf

that will be recognized in the third quarter of 2008. Basic expects to

recognize approximately $5 million of other M&A and financing commitment

fees in the same quarter. Combined with the $6.6 million of merger expenses

recognized in the second quarter of 2008, total merger costs are projected

to be approximately $11.6 million, exclusive of the $5 million expense

reimbursement received and any subsequent termination fees to which Basic

may become entitled pursuant to the merger agreement.



    Outlook for 2008



    The following statements are based on Basic's current expectations,

which do not differ substantially from its previously announced outlook.

These statements are forward-looking and actual results may differ

materially. These statements do not include the potential impact of any

future acquisitions or unbudgeted capital expenditures other than those

previously disclosed. Any material change in market conditions in any of

Basic's business segments could affect its guidance.



    Basic believes that seasonally adjusted activity levels in each of its

business segments will increase in the second half of 2008, which should

lead to pricing improvements that will help offset the labor and fuel costs

increases that it has experienced in the first half of the year. Basic also

expects its remaining 12 newbuild well servicing rigs will be delivered in

the second half of 2008, with six to eight of those newbuilds representing

expansion units and the remainder replacing older, less efficient rigs in

the fleet. The increase in expansion newbuild units from previous guidance

reflects Basic's outlook for improved business activity.



    Basic is reaffirming the following annual guidance for 2008 that was

given in its first quarter 2008 earnings release dated May 5, 2008:






    -- G&A expense as a percent of revenue is estimated to be 11%

    -- Depreciation and amortization expense is projected to be in the range

       of $118 to $120 million

    -- Effective tax rate is estimated to be 38%



    Basic Energy Services provides well site services essential to

maintaining production from the oil and gas wells within its operating

area. The company employs approximately 4,500 employees in more than 100

service points throughout the major oil and gas producing regions in Texas,

Louisiana, Oklahoma, New Mexico, Arkansas, Kansas and the Rocky Mountain

states.



    For more information, please visit Basic's website at

http://www.basicenergyservices.com.



    Conference Call



    Basic will host a conference call to discuss its second quarter 2008

results on Tuesday, August 5, 2008, at 10:00 a.m. Eastern Time (9:00 a.m.

Central). To access the call, please dial (303) 262-2066 and ask for the

"Basic Energy Services" call at least 10 minutes prior to the start time.

The conference call will also be broadcast live via the Internet and can be

accessed through the investor relations section of Basic's corporate

website, http://www.basicenergyservices.com.



    A telephonic replay of the conference call will be available until

August 19, 2008 and may be accessed by calling (303) 590-3000 and using the

pass code 11117430#. A webcast archive will be available at

http://www.basicenergyservices.com shortly after the call and will be

accessible for approximately 30 days. For more information, please contact

Donna Washburn at DRG&E at (713) 529-6000 or email at [email protected].



    Safe Harbor Statement



    This release includes forward-looking statements and projections, made

in reliance on the safe harbor provisions of the Private Securities

Litigation Reform Act of 1995. Basic has made every reasonable effort to

ensure that the information and assumptions on which these statements and

projections are based are current, reasonable, and complete. However, a

variety of factors could cause actual results to differ materially from the

projections, anticipated results or other expectations expressed in this

release, including (i) Basic's ability to successfully execute, manage and

integrate acquisitions, (ii) changes in demand for services and any related

material impact on our pricing and utilizations rates and (iii) changes in

our expenses, including labor or fuel costs. Additional important risk

factors that could cause actual results to differ materially from

expectations are disclosed in Item 1A of Basic's Form 10-K for the year

ended December 31, 2007 and subsequent Form 10-Q's filed with the SEC.

While Basic makes these statements and projections in good faith, neither

Basic nor its management can guarantee that the transactions will be

consummated or that anticipated future results will be achieved. Basic

assumes no obligation to publicly update or revise any forward-looking

statements made herein or any other forward-looking statements made by

Basic, whether as a result of new information, future events, or otherwise.






                              -Tables to Follow-







                         Basic Energy Services, Inc.

        Consolidated Statements of Operations and Comprehensive Income

                   (in thousands, except per share amounts)



                                       Three Months Ended    Six Months Ended

                                            June 30,             June 30,

                                        2008       2007       2008      2007

                                          (Unaudited)          (Unaudited)

     Revenues:

       Well servicing                  $89,018    $86,111  $169,537  $172,780

       Fluid services                   72,581     63,191   143,980   127,373

       Completion and Remedial

        Services                        79,579     63,736   148,037   109,873

       Contract drilling                10,344     10,218    19,841    12,160



           Total revenues              251,522    223,256   481,395   422,186



     Expenses:

       Well servicing                   55,293     52,084   103,759   102,178

       Fluid services                   48,554     40,379    94,987    80,481

       Completion and Remedial

        Services                        42,651     33,374    78,439    56,509

       Contract drilling                 7,529      6,184    14,589     8,998

       General and administrative (1)   26,811     25,592    52,663    48,241

       Depreciation and amortization    28,732     24,007    56,764    43,232

       (Gain) loss on disposal of

        assets                            (809)      (166)     (584)      175



           Total expenses              208,761    181,454   400,617   339,814



             Operating income           42,761     41,802    80,778    82,372



     Other income (expense):

       Interest expense                 (6,453)    (7,190)  (13,802)  (12,784)

       Interest income                     471        413     1,172       883

       Loss on early extinguishment

        of debt                            -          -         -        (230)

       Other income (expense)           (6,469)        40    (6,431)      101



     Income from continuing

      operations before income taxes    30,310     35,065    61,717    70,342



     Income tax expense                (11,597)   (13,373)  (23,348)  (26,577)

     Net income                        $18,713    $21,692   $38,369   $43,765



     Earnings per share of common

      stock:

       Basic                             $0.46      $0.54     $0.94     $1.11



       Diluted                           $0.45      $0.52     $0.92     $1.08





     Other Financial Data:

     EBITDA (2)                        $71,599    $65,849  $137,686  $125,475

     Capital expenditures:

       Acquisitions, net of cash

        acquired                        24,381     71,116    51,239   175,470

       Property and equipment           26,596     29,071    45,023    52,854





                                             As of

                                       June 30,   June 30,

                                         2008       2007

     Balance Sheet Data                   (unaudited)

     Cash and cash equivalents         $77,784    $46,504

     Net property and equipment        665,922    607,777

     Total assets                    1,208,336  1,073,791

     Total long-term debt              412,846    403,598

     Total stockholders' equity        566,683    479,018







                                           Three months       Six months

                                           Ended June 30,    Ended June 30,

    Segment Data:                          2008     2007     2008     2007



    Well Servicing

    Segment profits as a percent of

     revenue                              37.9%    39.5%    38.8%    40.9%

    Well Servicing Rigs

    Weighted average number of rigs         403      371      398      368

    Rig hours (000's)                     222.3    207.7    424.8    418.5

    Rig utilization rate                  77.1%    78.3%    74.6%    79.5%

    Revenue per rig hour                   $400     $415     $399     $413

    Well Servicing rig profit per rig

     hour                                  $152     $163     $155     $169



    Fluid Services

    Weighted average number of fluid

     services trucks                        663      657      654      655

    Revenue per fluid services truck

     (000's)                               $109      $96     $220     $194

    Segment profits per fluid services

     truck (000's)                          $36      $35      $75      $72

    Segment profits as a percent of

     revenue                              33.1%    36.1%    34.0%    36.8%



    Completion and Remedial Services

    Segment profits as a percent of

     revenue                              46.4%    47.6%    47.0%    48.6%



    Contract Drilling

    Segment profits as a percent of

     revenue                              27.2%    39.5%    26.5%    26.0%

    Drilling Rigs

    Weighted average number of rigs           9        8        9        6

    Rig operating days                      699      594    1,344      762

    Revenue per day                     $14,800  $17,200  $14,800  $16,000

    Drilling rig profit per day          $4,000   $6,900   $4,000   $4,200





    (1) Includes approximately $1,184,000 and $1,062,000 of non-cash

        compensation expense for the three months ended June 30, 2008 and

        2007, respectively.  For the six months ended June 30, 2008 and 2007,

        it includes approximately $2,264,000 and $2,155,000 of non-cash

        expense, respectively.



    (2) This earnings release contains references to the non-GAAP financial

        measure of earnings (net income) before interest, taxes, depreciation

        and amortization, or "EBITDA."  EBITDA should not be considered in

        isolation or as a substitute for operating income, net income or loss,

        cash flows provided by operating, investing and financing activities,

        or other income or cash flow statement data prepared in accordance

        with GAAP.  However, Basic believes EBITDA is a useful supplemental

        financial measure used by its management and directors and by external

        users of its financial statements, such as investors, to assess:



        -- The financial performance of its assets without regard to financing

           methods, capital structure or historical cost basis;

        -- The ability of its assets to generate cash sufficient to pay

           interest on our indebtedness; and

        -- Its operating performance and return on invested capital as

           compared to those of other companies in the well servicing

           industry, without regard to financing methods and capital

           structure.





        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 its current 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, its debt;

        -- EBITDA does not reflect income taxes;

        -- 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 its industry may calculate EBITDA differently

           than Basic does, limiting its usefulness as a comparative measure.





    The following table presents a reconciliation of net income to EBITDA,

which is the most comparable GAAP performance measure, for each of the periods

indicated:







                                           Three months        Six months

                                           Ended June 30,     Ended June 30,

                                           2008     2007      2008      2007

    Reconciliation of Net Income to

     EBITDA:                                (Unaudited)        (Unaudited)

    Net Income                           $18,713  $21,692   $38,369   $43,765

       Income taxes                       11,597   13,373    23,348    26,577

       Net interest expense                5,982    6,777    12,630    11,901

       Depreciation and amortization      28,732   24,007    56,764    43,232

    EBITDA                               $65,024  $65,849  $131,111  $125,475







    The following table presents a reconciliation of net income to "Adjusted

EBITDA," which means our EBITDA excluding merger-related costs incurred by us

in 2008:







                                           Three months        Six months

                                           Ended June 30,     Ended June 30,

                                           2008     2007      2008      2007

    Reconciliation of Net Income to

     Adjusted EBITDA,                       (Unaudited)        (Unaudited)

     excluding merger-related costs:

    Net Income                           $18,713  $21,692   $38,369   $43,765

       Merger-related costs                6,575        -     6,575         -

       Income taxes                       11,597   13,373    23,348    26,577

       Net interest expense                5,982    6,777    12,630    11,901

       Depreciation and amortization      28,732   24,007    56,764    43,232

    Adjusted EBITDA, excluding merger-

     related costs                       $71,599  $65,849  $137,686  $125,475





    We believe Adjusted EBITDA is useful for management and investors in

connection with comparisons of EBITDA excluding the extraordinary charges

represented by our 2008 merger-related costs.






     Contacts:  Alan Krenek, Chief Financial Officer

                Basic Energy Services, Inc.

                432-620-5510



                Jack Lascar/Sheila Stuewe

                DRG&E / 713-529-6600