Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.

Indicate by check mark whether the registrant is a large accelerated file, an accelerated filer (as definedor a non-accelerated filer. See definition of “accelerated filer and large accelerated filer” in Rule 12b-2 of the Exchange Act).Act. (Check one)

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).

Indicate the numberAs of November 6, 2006, a total of 89,432,473 shares outstanding of each of the issuer’s classes of common stock as of the latest practicable date.

          The following discussionThis Quarterly Report on Form 10-Q contains “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended.amended, and the Private Securities Litigation Reform Act of 1995. We also may provide oral or written forward-looking statements in other materials we release to the public. The words “anticipates,” “believes,” “estimates,” “expects,” “plans,” “intends”“intends,” and similar expressions are intended to identify these forward-looking statements but are not the exclusive means of identifying them. These forward-looking statements reflect the current views of our management; however, various risks, uncertainties and contingencies, including the risks identified below or those in Item 1A, “Risk Factors,” in Part II of this Quarterly Report on Form 10-Q and in Item 1A, “Risk Factors,” in Part I of Amendment No. 2 to our Annual Report on Form 10-K/A for the year ended December 31, 2005, could cause our actual results, performance or achievements to differ materially from those expressed in, or implied by, these statements, including the success or failure of our efforts to implement our business strategy.

          We assume no obligation to update publicly any forward-looking statements, whether as a result of new information, future events or otherwise.otherwise, except as required by securities laws. In light of these risks,

Newpark Resources, Inc.

Newpark Resources, Inc.

          In the opinion of management, the accompanying unaudited consolidated financial statements reflect all adjustments necessary to present fairly the financial position of Newpark Resources, Inc. (“Newpark”) as of September 30, 2005,2006, and the results of its operations for the three and nine month periods ended September 30, 2005 and 2004, and its cash flows for the nine monththree- and nine-month periods ended September 30, 20052006 and 2004.2005. All such adjustments are of a normal recurring nature. The September 30, 2005 interim consolidated financial statements have been restated. For discussion of the reasons for and the effect of the restatement, please refer to Amendment No. 2 to Newpark’s Annual Report on Form 10-K/A for the year ended December 31, 2005, which is referred to as the 2005 Annual Report. These interim consolidated financial statements should be read in conjunction with the December 31, 2004 audited consolidated financial statements and related notes filed in Amendment No. 2 to Newpark’s Annual Report on Form 10-K.10-K/A for the year ended December 31, 2005. The results of operations for the threethree- and nine monthnine-month periods ended September 30, 20052006 are not necessarily indicative of the results to be expected for the entire year. We haveNewpark has reclassified certain amounts previously reported to conform with the presentation at September 30, 2005.

          The following table presents the reconciliation of the numerator and denominator for calculating income per share in accordance with the disclosure requirementsEffective January 1, 2006, Newpark adopted Statement of Financial Accounting Standards (“FAS”) 128:No. 123 (revised 2004), “Share-Based Payment” (“FAS 123(R)”), using a modified prospective method of application. FAS 123(R) requires that all share-based payments to employees, including grants of employee stock options, be recognized in the income statement based on their fair values. Newpark uses the Black-Scholes option-pricing model for measuring the fair value of stock options granted. Under the provisions of FAS 123(R) and using the modified prospective application method, Newpark recognizes stock-based compensation based on the grant date fair value, net of an estimated forfeiture rate, for all share-based awards granted after December 31, 2005, and granted prior to, but not yet vested as of December 31, 2005, on a straight-line basis over the requisite service periods of the awards, which is generally equivalent to the vesting term. Under the modified prospective application, the results of prior periods are not restated.

          Basic netEffective January 1, 2006, Newpark adopted FAS No. 154, “Accounting Changes and Error Corrections” (“FAS 154”). FAS 154 replaces APB 20, “Accounting Changes,” and FAS No. 3, “Reporting Accounting Changes in Interim Financial Statements,” and establishes retrospective application as the required method for reporting a change in accounting principle. FAS 154 provides guidance for determining whether retrospective application of a change in accounting principle is impracticable and for reporting a change when retrospective application is impracticable. The reporting of a correction of an error by restating previously issued financial statements is also addressed. The adoption of FAS 154 had no material impact on Newpark’s consolidated financial results, but was considered in preparing the restated historical consolidated financial statements as disclosed in Amendment No. 2 to Newpark’s Annual Report on Form 10-K/A filed for the year ended December 31, 2005.

          On July 13, 2006, the FASB issued Interpretation No. 48, “Accounting for Uncertainty in Income Taxes—an interpretation of FASB Statement No. 109” (“FIN 48”).FIN 48 applies to all tax positions related to income per sharetaxes subject to Financial Accounting Standards Board Statement No. 109, “Accounting for Income Taxes.” FIN 48 clarifies the accounting for income taxes by prescribing the minimum recognition threshold a tax position is required to meet before being recognized in the financial statements. Differences between the amounts recognized in the statements of financial position prior to the adoption of FIN 48 and the amounts reported after adoption will be accounted for as a cumulative effect adjustment recorded to the beginning balance of retained earnings. FIN 48 is effective for fiscal years beginning after December 15, 2006 and will be adopted by Newpark on January 1, 2007. Newpark is reviewing the new standard and has not determined the impact, if any, the adoption of FIN 48 will have on its consolidated financial position or results of operations.

          On November 2, 1995, the Board of Directors adopted, and on June 12, 1996, the stockholders approved, the 1995 Incentive Stock Option Plan (the “1995 Plan”), pursuant to which the Compensation Committee of Newpark’s Board of Directors may grant incentive stock options and non-statutory stock options to designated employees of Newpark. The terms of options granted under the 1995 Plan generally provide for equal vesting over a three-year period and a term of seven years. Initially, a maximum of 2,100,000 shares of Common Stock could be issued under the 1995 Plan. This maximum number was calculatedsubject to increase on the last business day of each fiscal year by dividing net incomea number equal to 1.25% of the number of shares of Common Stock issued and outstanding on the close of business on that date, subject to a maximum limit of 8,000,000 shares. This reflects an increase in the limit that was approved by Newpark stockholders in June 2000. After November 1, 2005, no options were able to be granted under the 1995 Plan, but unexpired options granted before that date continue in effect in accordance with their terms until they are exercised or expire.

addition, each new non-employee director, on the date of his or her election to the Board of Directors (whether elected by the weighted-average numberstockholders or the Board of Directors), automatically is granted a stock option to purchase 10,000 shares of common stock at an exercise price equal to the fair market value of the common stock on the date of grant. Twenty percent of those option shares outstanding duringbecome exercisable on each of the first through the fifth anniversaries of the date of grant. The 2004 Plan also provides for the automatic additional grant to each non-employee director of stock options to purchase 10,000 shares of common stock each time the non-employee director is re-elected to the Board of Directors. One-third of those option shares become exercisable on each of the first through the third anniversaries of the date of grant. The term of options granted under the 2004 Plan is 10 years. Non-employee directors are not eligible to participate in any other stock option or similar plans currently maintained by Newpark. The purpose of the 2004 Plan is to promote an increased incentive and personal interest in the welfare of Newpark by those individuals who are primarily responsible for shaping the long-range plans of Newpark, to assist Newpark in attracting and retaining on the Board of Directors persons of exceptional competence and to provide additional incentives to serve as a director of Newpark. The 2004 Plan superseded the 1993 Non-Employee Directors’ Stock Option Plan.

          On March 12, 2003, the Board of Directors adopted the 2003 Long Term Incentive Plan (the “2003 Plan”), which was approved by the stockholders at the 2003 Annual Meeting. Under the 2003 Plan, awards of share equivalents are made at the beginning of overlapping three-year performance periods. These awards vest and become payable in Newpark common stock if certain performance criteria are met over the three-year performance period. ForDuring the three months and nine months ended September 30, 2005,2006, no awards of share equivalents were made under the 2003 Plan.

          Subject to adjustment upon a stock split, stock dividend or other recapitalization event, the maximum number of shares of common stock that may be issued under the 2003 Plan is 1,000,000. The common stock issued under the 2003 Plan will be from authorized but unissued shares of Newpark’s common stock, although shares issued under the 2003 Plan that are reacquired by Newpark had dilutivedue to a forfeiture or any other reason may again be issued under the 2003 Plan. The maximum number of shares of common stock optionsthat may be granted to any one eligible employee during any calendar year is 50,000.

          The business criteria that the Compensation Committee may use to set the performance objectives for awards under the 2003 Plan include the following: total stockholder return, return on equity, growth in earnings per share, profits and/or return on capital within a particular business unit, regulatory compliance metrics, including worker safety measures, and warrantsother criteria that the Compensation Committee may from time to time determine. The performance criteria may be stated relative to other companies in the oil service sector industry group.

          Pursuant to FAS 123(R), the awards subject to the annualized total stockholder return criterion contain a market condition and the awards subject to the average return on equity contain a performance condition. The fair value of approximately 4.6 million shares and 3.4 million shares, respectively, which were assumedthe awards subject to be exerciseda market condition was calculated using Monte Carlo simulation.

          During the treasury stock method. For the three months and nine months ended September 30, 2004,2006, Newpark had dilutiveawarded 375,000 stock options and warrants of approximately 3.0 million200,000 time-restricted shares and 1.9 million shares, respectively, which were assumed to be exercised using the treasury stock method.its new chief executive officer as an inducement to accept employment. The resulting net effects of stock options vest ratably over three years and warrants were used in calculating diluted income per share for these periods.

          AtThe fair value of options granted was estimated on the date of grant using the Black-Scholes option-pricing model, with the following weighted average assumptions:

          As of September 30, 2006, Newpark’s compensation cost related to nonvested awards not yet recognized totaled approximately $2,163,000, which is expected to be recognized over a weighted average period of 3.73 years. The total fair value of shares vested during the nine months ended September 30, 2006 was $1,094,000. The total fair value of shares vested during the nine months ended September 30, 2005 was $197,000. During the nine months ended September 30, 2005, Newpark maintained sixgranted 354,500 shares of nonvested stock with a weighted-average grant date fair value of $4.70.

          Pursuant to the adoption of FAS 123(R), during the three- and nine-month periods ended September 30, 2006, Newpark recognized total stock-based compensation plans, including four stock option plansexpense of $578,000 and two long-term incentive plans.$1,711,000, respectively, and an associated tax benefit of $202,000 and $598,000, respectively. The impact of adopting FAS 123(R) included in these amounts was expense of $414,000 and $1,254,000 and associated tax benefits of $145,000 and $439,000 during the three- and nine-month periods ended September 30, 2006, respectively.

          During the three- and nine-month periods ended September 30, 2005, Newpark applies Accounting Principles Board Opinionapplied APB 25 (“APB 25”) and related Interpretations in accounting for its stock-based compensation plans. In accordance with this guidance, noplans and, therefore, compensation cost has been was

recognized for Newpark’s stock option plans asoptions only when the exercise price of allthe stock optionsoption granted thereunder is equal towas less than the fair value atof the dateunderlying stock on the measurement date. Prior to the adoption of grant. CompensationFAS 123(R), Newpark accounted for awards under the 2003 Plan using variable accounting under APB 25 and related interpretations. Based on Newpark’s performance as compared to the performance levels listed above, no expense is recordedwas accrued under the 2003 Plan for Newpark’s long-term incentive plans.the three- and nine-month periods ended September 30, 2005. Had compensation costs for all of Newpark’s stock-based compensation plans been determined

          Included in accounts receivable at September 30, 20052006 and December 31, 20042005 are:

          Newpark’s inventory consisted of the following items at September 30, 20052006 and December 31, 2004:2005:

     The acquisitionas incurred, with the majority of OLSthese costs expected to be incurred in 2006 and consolidation of LOMA were accounted for following the principles of FAS 141. The purchase price, including approximately $57,000 of acquisition costs, was allocated to the net assets of OLS and LOMA based on preliminary estimates of fair value at the date of acquisition as shown2007. Newpark expensed $440,000 in the table below (in thousands). Estimatesquarter ended September 30, 2006 in severance and other exit costs related to NEWS.

          By shutting down the operations of NEWS at this time, Newpark believes that it will avoid substantial future losses and negative operating cash flows related to this business, once all exit costs are considered preliminary principally pending final income tax amounts which affectincurred. The operating loss for NEWS during the recordingfirst nine months of deferred taxes.

          In consolidation,September 2006, Newpark started to shut down the payable tofacilities and will start the site closure process as soon as all existing projects have been completed. In addition, Newpark was eliminated primarily against other assets.has begun the process of exploring possible sale of existing land, equipment and facilities.

          During late August and early September 2005, Newpark’s fluids systems and engineering and environmental services operations along the Financial Accounting Standards Board (“FASB”) issued FAS 123 (revised 2004), “Share-Based Payment,” (“FAS 123(R)”) which isU.S. Gulf Coast were affected by Hurricanes Katrina and Rita. During the nine months ended September 30, 2006, Newpark recorded additional costs totaling approximately $877,000, as a revision of FAS 123, “Accounting for Stock-Based Compensation.” FAS 123(R) supersedes Accounting Principles Board (“APB”) Opinion No. 25, “Accounting for Stock Issued to Employees,” and amends FAS 95, “Statement of Cash Flows.” Generally, the approach in FAS 123(R) is similar to the approach described in FAS 123. However, FAS 123(R) requires that all share-based payments to employees, including grants of employee stock options, be recognized in the income statement based on their fair values. Pro forma disclosure is no longer an alternative. FAS 123(R) permits adoption of its requirements using one of two methods: (1) a “modified prospective” method in which compensation cost is recognized beginning with the effective date of FAS 123(R) (a) based on the requirement of FAS 123(R) for all share-based payments granted after that effective date and (b) based on the requirements of FAS 123 for all awards granted prior to the effective date of FAS 123(R) that remain unvested on the effective date; and (2) a “modified retrospective” method which includes the requirementsdirect result of the modified prospective method previously described, but also permits restatement of prior periods based on the amounts previously reported in pro forma disclosures under FAS 123. Newpark currently plans to adopt FAS 123(R) using the modified prospective method and to continue using the Black-Scholes option-pricing model to estimate the fair value of its stock options. On April 14, 2005, the Securities and Exchange Commission announced amended compliance dates for FAS 123(R) and the new rules now require Newpark to adopt FAS 123(R) starting with its first quarter of its fiscal year beginning January 1, 2006.