C&J Energy Services 8-K Other Events

Exhibit 99.2

CASEDHOLE HOLDINGS, INC. AND SUBSIDIARY

UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

MARCH 31, 2012

INDEX TO FINANCIAL STATEMENTS

Condensed Consolidated Balance Sheets at March 31, 2012 (unaudited) and December 31, 2011	1
Condensed Consolidated Statements of Operations (unaudited) for the Three Months Ended March 31, 2012 and 2011	2
Condensed Consolidated Statements of Cash Flows (unaudited) for the Three Months Ended March 31, 2012 and 2011	3
Notes to Condensed Consolidated Financial Statements	4

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CASEDHOLE HOLDINGS, INC. AND SUBSIDIARY

CONDENSED CONSOLIDATED BALANCE SHEETS

	AS OF MARCH 31,			AS OF DECEMBER 31,
	2012			2011
	(Unaudited)
ASSETS
CURRENT ASSETS:
Cash and cash equivalents	$	3,443,836		$	5,809,466
Accounts receivable, net of allowance of $8,850 in each period		30,177,200			25,721,753
Inventory		3,154,493			2,898,425
Prepaid expenses		774,773			122,680
Deferred income tax asset		282,803			282,803
Total current assets		37,833,105			34,835,127
PROPERTY AND EQUIPMENT, net		61,833,079			48,696,087
GOODWILL		23,803,116			23,803,116
DEPOSITS		1,903,873			1,677,858
DEBT ISSUANCE COSTS, net of accumulated amortization of $202,708 and $135,139, respectively		878,402			945,971
Total assets	$	126,251,575		$	109,958,159
LIABILITIES AND STOCKHOLDERS’ EQUITY
CURRENT LIABILITIES:
Accounts payable, trade	$	12,187,180		$	11,172,844
Accrued liabilities		5,758,273			6,928,341
Notes payable, current portion		7,000,000			6,250,000
Capital lease, current portion		1,388,572			1,236,400
Total current liabilities		26,334,025			25,587,585
LONG-TERM LIABILITIES:
Notes payable, net of current portion		44,197,146			40,947,146
Capital lease, net of current portion		3,302,265			3,374,873
Deferred income tax liability		14,507,545			9,955,426
Total long-term liabilities		62,006,956			54,277,445
Total liabilities		88,340,981			79,865,030
COMMITMENTS AND CONTINGENCIES (Note 7)
STOCKHOLDERS’ EQUITY:
Common shares, $0.001 par value, 2,000,000 shares authorized; 1,140,251 shares issued and outstanding in each period		1,140			1,140
Capital in excess of par value		29,620,177			29,482,180
Stock subscription notes		(98,498	)		(232,558	)
Retained earnings		8,387,775			842,367
Total stockholders’ equity		37,910,594			30,093,129
Total liabilities and stockholders’ equity	$	126,251,575		$	109,958,159

See accompanying notes to these condensed consolidated financial statements.

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CASEDHOLE HOLDINGS, INC. AND SUBSIDIARY

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(Unaudited)

	FOR THE THREE MONTHS  ENDED MARCH 31,
	2012			2011
REVENUES –
Service revenue	$	50,436,410		$	21,873,224
OPERATING EXPENSES:
Cost of revenue		25,377,628			11,623,093
Selling, general, and administrative		9,962,599			5,888,091
Depreciation		2,154,832			1,129,588
Total operating expenses		37,495,059			18,640,772
INCOME FROM OPERATIONS		12,941,351			3,232,452
OTHER INCOME (EXPENSE):
Interest and other income		2,589			2,082
Interest expense		(880,319	)		(1,575,233	)
Gain on equipment disposal		33,903			—
Total other expense		(843,827	)		(1,573,151	)
INCOME BEFORE TAX		12,097,524			1,659,301
Income tax expense		(4,552,118	)		(713,988	)
NET INCOME	$	7,545,406		$	945,313

See accompanying notes to these condensed consolidated financial statements.

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CASEDHOLE HOLDINGS, INC. AND SUBSIDIARY

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited)

	FOR THE THREE MONTHS  ENDED MARCH 31,
	2012			2011
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income	$	7,545,406		$	945,313
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation expense		2,154,832			1,129,588
Deferred tax expense		4,552,118			713,988
Amortization of debt issuance costs		67,569			62,082
Payment-in-kind interest expense		—			887,533
Gain on disposal of equipment		(33,903	)		—
Stock compensation expense		137,997			136,021
Changes in operating assets:
Accounts receivable		(4,455,447	)		(2,936,551	)
Inventory		(256,068	)		(780,853	)
Prepaid expenses		(652,094	)		(73,389	)
Deposits		(226,015	)		(1,881,468	)
Changes in operating liabilities:
Accounts payable		1,014,336			2,058,169
Accrued liabilities		(1,170,068	)		198,665
Net cash provided by operating activities		8,678,663			459,098
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchase of property and equipment		(14,882,450	)		(3,903,820	)
Proceeds from disposal of property and equipment		41,150			—
Net cash used in investing activities		(14,841,300	)		(3,903,820	)
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from notes payable		5,000,000			4,832,128
Repayment of notes payable		(1,000,000	)		(1,124,554	)
Repayment of capital lease obligation		(337,052	)		—
Proceeds from stockholder note repayments		134,059			—
Net cash provided by financing activities		3,797,007			3,707,574
NET CHANGE IN CASH AND CASH EQUIVALENTS		(2,365,630	)		262,852
CASH AND CASH EQUIVALENTS, beginning of year		5,809,466			3,413,133
CASH AND CASH EQUIVALENTS, end of year	$	3,443,836		$	3,675,985
SUPPLEMENTAL INFORMATION:
Cash paid for interest during period	$	806,984		$	577,161
Capital lease acquisitions	$	416,616		$	—

See accompanying notes to these condensed consolidated financial statements.

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CASEDHOLE HOLDINGS, INC. AND SUBSIDIARY

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

1. NATUREOF BUSINESSAND BASISOF PRESENTATION

Casedhole Holdings, Inc. (the “Company”), a Delaware corporation, was established on April 1, 2008. The Company conducts its operations through its wholly owned subsidiary Casedhole Solutions, Inc.

Through the operating subsidiary, the Company provides a wide range of well-site services to oil and gas drilling and producing companies including logging, perforating, pressure control, plugging, and pipe recovery services. The Company maintains operations in nine service centers located throughout the major United States onshore oil and gas producing regions.

The accompanying unaudited interim financial statements and related notes have been prepared in accordance with accounting principles generally accepted in the United States of America (U.S. “GAAP”).

Certain information and footnotes have been condensed or omitted, although management believes that the disclosures are adequate to make the information presented not misleading. These interim financial statements should be read in conjunction with the audited financial statements of the Company for the years ended December 31, 2011 and 2010 and the notes thereto.

2. PROPERTYAND EQUIPMENT

Property and equipment consist of the following at March 31, 2012 (unaudited) and December 31, 2011.

	March 31,			December 31,
	2012			2011
Wireline units	$	26,996,019		$	25,922,649
Tools and equipment		24,435,679			24,021,985
Pump down and pressure test equipment		3,513,624			—
Other vehicles		2,585,970			3,078,322
Furniture, fixtures, and office equipment		1,007,042			951,420
Leasehold improvements		2,014,661			1,995,891
Construction in progress		14,361,730			3,652,635
		74,914,725			59,622,902
Accumulated depreciation		(13,081,646	)		(10,926,815	)
	$	61,833,079		$	48,696,087

14. NOTES PAYABLE

Wells Fargo Facility

On June 29, 2011, the Company entered into a $45,000,000 senior secured credit facility with Wells Fargo Bank (“Wells Fargo facility”). The Wells Fargo facility includes a term loan, delayed draw term loan, and revolving commitment totaling $20,000,000, $10,000,000, and $15,000,000, respectively. The amount available under the revolving commitment is limited by the borrowing base which is determined as a percentage of working capital and inventory accounts. As of March 31, 2012, the borrowing base calculated to $26,936,984 but caps at $25,000,000.

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CASEDHOLE HOLDINGS, INC. AND SUBSIDIARY

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

The Company is subject to certain financial covenants including a fixed charge ratio, leverage ratios and minimum EBITDA thresholds. As of March 31, 2012, the Company was in compliance with all debt covenants.

Senior Subordinated Notes

On June 29, 2011, the Company entered into a $10,000,000 senior subordinated note with BNY Mellon-Alcentra Mezzanine III, L.P. (“subordinated notes”). The subordinated notes accrue interest at a fixed rate of 14% and mature on June 29, 2016. The Company is subject to a prepayment penalty equal to 3%, 2%, and 1% of the principal reduction until June 20, 2012, 2013, and 2014, respectively.

The Company is subject to certain financial covenants including a fixed charge ratio, leverage ratios and minimum EBITDA thresholds. As of March 31, 2012, the Company was in compliance with all debt covenants.

Future Minimum Payments

Future payments on notes payable as of March 31, 2012, are as follows for each year ending March 31:

2013	$	7,000,000
2014		7,000,000
2015		7,000,000
2016		20,197,146
2017		10,000,000
	$	51,197,146

15. COMMON STOCK TRANSACTIONS

During 2010, three new executives were allowed to purchase common stock upon acceptance of their employment with the Company. The purchase price was $25, $35, and $45 per share, respectively, which represented the estimated fair value at the time of issuance. The stock purchase totaled $437,500. The executives issued stock subscription notes totaling $268,750 as part of the purchase price. The stock subscription notes accrue interest at 6%. The maturity dates for stock subscription notes totaling $43,750 and $100,000 are June 1, 2014 and July 31, 2014, respectively. The remaining balance is to be repaid with 50% of the executives’ annual bonus until paid in full or April 30, 2014. From January 1, 2012 through March 31, 2012, the executives repaid $136,340 of principal and accrued interest. The stock subscription notes have been presented as a reduction to stockholders’ equity.

16. STOCK OPTION PLAN

The 2008 Equity Incentive Plan (the “Equity Incentive Plan”) provides for the granting of incentive stock options to purchase shares of the Company’s common stock to key employees. The 2008 Equity Incentive Plan, as amended on April 29, 2011, authorizes the issuance of options to purchase up to an aggregate of 150,000 shares of common stock with maximum option terms of eight years from the date of the grant. The grant allows eligible individuals to purchase shares of common stock at an exercise price equal to the fair market value of the stock at the date of the grant. The Board approved the Equity Incentive Plan on October 31, 2008. As of March 31, 2012, 22,683 options remained to be granted under this plan.

The following is a summary of option activity under the plan discussed above:

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CASEDHOLE HOLDINGS, INC. AND SUBSIDIARY

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

	Number of Shares		Weighted Average Exercise Price
Options exercisable at January 1, 2011		122,817	$	34.42
Options granted		2,500		50.00
Options outstanding at March 31, 2011		125,317		34.74
Options exercisable at March 31, 2011		6,682	$	28.84
Options outstanding at January 1, 2012		120,317	$	34.90
Options granted		—		—
Options outstanding at March 31, 2012		120,317		34.90
Options exercisable at March 31, 2012		34,989	$	33.15

The estimated fair value of the options granted during the three months ended March 31, 2011 was calculated using a Black-Scholes option-pricing model. During the three months ended March 31, 2012 no options were granted. For the three months ended March 31, 2011, the weighted average fair value of options granted totaled $23.80. The following table summarizes the weighted average assumptions used in the Black-Scholes model for options granted during the three months ended March 31, 2011:

Expected dividend yield		0.0	%
Expected volatility		62	%
Risk-free interest rate		1.0	%
Expected life (in years)		4
Weighted average grant-date fair value per common share	$	23.80

The Company has not paid dividends historically, and has no plans to do so in the foreseeable future; thus, the dividend yields are estimated at zero percent. Expected volatility is based on an average of historical volatility rates based upon publicly traded companies within the oil and gas service industry. Management believes that these average historical volatility rates are currently the best available indicator of expected volatility. The risk-free interest rate is the implied yield available for zero-coupon U.S. government issues with a remaining term of five years. The expected lives represent management’s estimate of the period during which the options will be outstanding.

The options outstanding at March 31, 2012 have a weighted average remaining contractual life of 6.17 years. Unrecognized compensation costs related to non-vested options amounted to $1,225,029 as of March 31, 2012, which is expected to be recognized over the remaining requisite service period of 2.21 years. During the three months ended March 31, 2012 and 2011, the Company recognized $137,997 and $136,021, respectively, of stock compensation expense included in selling, general and administrative expenses.

17. RELATED PARTY TRANSACTIONS

The Company incurred management fees and expense reimbursements payable to its majority stockholder (“Intervale”) in the amount of $96,107 and $91,070 for the three months ended March 31, 2012 and 2011, respectively. As of March 31, 2012 and 2011, the Company owed Intervale $35,529 and $39,835, respectively, for expense reimbursements.

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CASEDHOLE HOLDINGS, INC. AND SUBSIDIARY

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

On May 17, 2010, the Company entered into a five-year employment agreement with Mr. Hobbs, former owner of E.M. Hobbs, Inc. which was acquired by the Company. The agreement includes an annual salary and one-time signing bonus of $1,000,000. The signing bonus and associated payroll taxes paid by the Company were to be repaid to the Company in the event Mr. Hobbs terminated his employment prior to May 17, 2011. During the three months ended March 31, 2012 and 2011, the Company has recognized $0 and $250,000, respectively, of compensation expense related to the bonus for services.

The Company has entered into multiple agreements with entities owned by members of management to lease buildings, office space and cranes, as well as general business services. For the three months ended March 31, 2012 and 2011, the Company incurred $354,623 and $242,546, respectively, in expenditures with respect to these parties.

18. COMMITMENTSAND CONTINGENCIES

The Company has employment agreements with several key officers and employees which require payment of a year of salary if such employees are terminated without cause. The maximum potential obligation is $1,625,000 as of March 31, 2012.

The Company has entered into purchase commitments with several vendors to produce wireline units and pumpdown units. The remaining commitments on the various units as of March 31, 2012 totaled approximately $5,800,000 and these commitments will be paid upon delivery of the units.

19. SUBSEQUENT EVENTS

On June 5, 2012, the Company entered into an agreement with C&J Spec-Rent Services, Inc. to purchase 100% of the stock of Casedhole Holdings, Inc. The purchase price was $272,500,000 and is subject to normal purchase price adjustments. The transaction closed and funded on June 7, 2012.

Management has evaluated subsequent events through July 31, 2012, the date that these financial statements were available for issuance. No additional material subsequent events exist as of that date.

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