BRONCO DRILLING COMPANY, S-1/A Filing by BRNC-Agreements

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                                   As filed with the Securities and Exchange Commission on March 17, 2006
                                                                                                                        Registration No. 333-131420



                       UNITED STATES SECURITIES AND EXCHANGE COMMISSION
                                                          Washington, D.C. 20549

                                                         AMENDMENT NO. 2
                                                               to
                                                            FORM S-1
                                REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933


                                  BRONCO DRILLING COMPANY, INC.
                                               (Exact name of registrant as specified in its charter)

                     Delaware                                            1381                                             20-2902156
           (State or other jurisdiction of                  (Primary Standard Industrial                               (I.R.S. Employer
          incorporation or organization)                    Classification Code Number)                             Identification Number)

                                                           14313 North May Avenue
                                                                   Suite 100
                                                          Oklahoma City, OK 73134
                                                                (405) 242-4444
               (Address, including zip code, and telephone number, including area code, of registrant’s principal executive offices)


                                                               D. Frank Harrison
                                                            Chief Executive Officer
                                                        Bronco Drilling Company, Inc.
                                                           14313 North May Avenue,
                                                                    Suite 100
                                                           Oklahoma City, OK 73134
                                                                 (405) 242-4444
                       (Name, address, including zip code, and telephone number, including area code, of agent for service)


                                                                     Copies to:

                        Seth R. Molay, P.C.                                                           Robert G. Reedy
                            Alex Frutos                                                            Porter & Hedges, L.L.P.
                Akin Gump Strauss Hauer & Feld LLP                                                    1000 Main Street,
                       1700 Pacific Avenue,                                                               36 Floor
                                                                                                               th


                            Suite 4100                                                               Houston, TX 77002
                         Dallas, TX 75201                                                              (713) 226-6674
                          (214) 969-2800

Approximate date of commencement of proposed sale to the public: As soon as practicable after the effective date of this Registration
Statement.

    If any securities being registered on this form are to be offered on a delayed or continuous basis pursuant to Rule 415 under the Securities
Act of 1933, as amended (the ―Securities Act‖), check the following box. 

    If this form is filed to register additional securities for an offering pursuant to Rule 462(b) under the Securities Act, check the following
box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. 
    If this form is a post-effective amendment filed pursuant to Rule 462(c) under the Securities Act, check the following box and list the
Securities Act registration statement number of the earlier effective registration statement for the same offering. 

    If this form is a post-effective amendment filed pursuant to Rule 462(d) under the Securities Act, check the following box and list the
Securities Act registration statement number of the earlier effective registration statement for the same offering. 



    The Registrant hereby amends this registration statement on such date or dates as may be necessary to delay its effective date until
the Registrant shall file a further amendment which specifically states that this registration statement shall thereafter become effective
in accordance with Section 8(a) of the Securities Act of 1933, as amended, or until the registration statement shall become effective on
such date as the Securities and Exchange Commission, acting pursuant to Section 8(a), may determine.
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The information in this prospectus is not complete and may be changed. Neither we nor the selling stockholder may sell
these securities until the registration statement filed with the Securities and Exchange Commission is effective. This
prospectus is not an offer to sell these securities and neither we nor the selling stockholder are soliciting an offer to buy
these securities, in any state where the offer or sale is not permitted.

                                       SUBJECT TO COMPLETION, DATED MARCH 17, 2006

PROSPECTUS




                                         Bronco Drilling Company, Inc.
                                                      3,000,000 Shares
                                                       Common Stock
      Bronco is offering 1,700,000 shares of its common stock and the stockholder is selling an additional 1,300,000 shares. Bronco’s common
stock is traded on the Nasdaq National Market under the symbol ―BRNC.‖ The last reported sale price of the common stock on the Nasdaq
National Market on March 15, 2006 was $24.33 per share.



Investing in our common stock involves risks. See ― Risk Factors ‖ beginning on page 11.



                                                                                                          Per Share                Total

Public Offering Price                                                                                     $                    $
Underwriting Discounts and Commissions                                                                    $                    $
Proceeds to Bronco                                                                                        $                    $
Proceeds to the Selling Stockholder                                                                       $                    $

     The selling stockholder has granted the underwriters a 30-day option to purchase up to an additional 450,000 shares of common stock to
cover any overallotments.

      Delivery of the shares of common stock will be made on or about         , 2006.

The Securities and Exchange Commission and state securities regulators have not approved or disapproved these securities, or
determined if this prospectus is truthful or complete. Any representation to the contrary is a criminal offense.




Jefferies & Company                                                           Johnson Rice & Company L.L.C.

Raymond James                                                                                      Fortis Securities LLC
                                             The date of this Prospectus is              , 2006.
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                    [Photo of rig in Oklahoma]
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                                                            TABLE OF CONTENTS

      You may rely only on the information contained in this prospectus. We have not, and the underwriters have not, authorized anyone to
provide you with additional information or information different from that contained in this prospectus. If anyone provides you with different
or inconsistent information, you should not rely on it. We are not, and the underwriters are not, making an offer to sell these securities in any
jurisdiction where an offer to sell is not permitted. The information appearing in this prospectus is current, accurate and complete in all material
respects as of the date on the front cover of this prospectus, but our business, financial condition, results of operations and prospects may have
changed since that date.



                                                                                                                                              Page

Prospectus Summary                                                                                                                                1
Risk Factors                                                                                                                                     11
Cautionary Note Regarding Forward-Looking Statements                                                                                             22
Use of Proceeds                                                                                                                                  23
Price Range of Common Stock                                                                                                                      24
Dividend Policy                                                                                                                                  24
Capitalization                                                                                                                                   25
Selected Historical Financial Data                                                                                                               27
Management’s Discussion and Analysis of Financial Condition and Results of Operations                                                            29
Business                                                                                                                                         43
Management                                                                                                                                       63
Certain Relationships and Related Party Transactions                                                                                             70
Principal and Selling Stockholders                                                                                                               72
Description of Capital Stock                                                                                                                     74
Securities Eligible for Future Sale                                                                                                              77
Underwriting                                                                                                                                     79
Legal Matters                                                                                                                                    82
Experts                                                                                                                                          82
Where You Can Find More Information                                                                                                              82
Index to Unaudited Pro Forma Combined Financial Statements                                                                                      P-1
Index to Consolidated Financial Statements                                                                                                      F-1

                                                                         i
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                                                          PROSPECTUS SUMMARY

      This summary highlights certain information contained elsewhere in this prospectus. This summary does not contain all of the
information you should consider before investing in our common stock. You should carefully read the entire prospectus, including “Risk
Factors” and our consolidated financial statements and related notes included elsewhere in this prospectus, before you decide whether to
invest in our common stock. Unless otherwise indicated in this prospectus or the context otherwise requires, all references in this prospectus to
“Bronco,” the “Company,” “us,” “our” or “we” are to Bronco Drilling Company, Inc. and our predecessor company, Bronco Drilling
Company, L.L.C., and their respective subsidiaries.

                                                      BRONCO DRILLING COMPANY

Overview

      We provide contract land drilling services to oil and natural gas exploration and production companies. We currently own a fleet of 64
land drilling rigs, of which 41 are currently operating, four are in the process of being refurbished and 19 are held in inventory. We expect to
put all four of the rigs currently being refurbished into service by the end of the second quarter of 2006. We plan on refurbishing seven
additional rigs from our current inventory during 2006 at estimated costs (including drill pipe) ranging from $1.8 million to $6.5 million per
rig. We continue to focus our refurbishment program on our more powerful rigs, with 1,000 to 2,000 horsepower, which are capable of drilling
to depths between 15,000 and 25,000 feet. We also own a fleet of 60 trucks used to transport our rigs.

      We commenced operations in 2001 with the purchase of one stacked 650-horsepower rig that we refurbished and deployed. We
subsequently made selective acquisitions of both operational and inventoried rigs, as well as ancillary equipment. Our most recent acquisition
was completed in January 2006 when we purchased six land drilling rigs and certain other assets, including heavy haul trucks and excess
equipment, from Big A Drilling Company, L.C. for $16.3 million in cash and 72,571 shares of our common stock. See ―—Recent
Developments‖ below for additional information regarding this acquisition. In October 2005, we purchased 12 land drilling rigs from Eagle
Drilling, L.L.C. for approximately $50.0 million, and 13 land drilling rigs from Thomas Drilling Co. for approximately $68.0 million. These
transactions not only increased the size of our rig fleet, but also expanded our operations to the Barnett Shale trend in North Texas and Palo
Duro Basin in West Texas. In July 2005, we completed a transaction with Strata Drilling, L.L.C. and Strata Property, L.L.C. in which we
acquired, among other assets, three land drilling rigs and a 16 acre storage and refurbishment yard for $20.0 million.

      Our management team has significant experience not only with acquiring rigs, but also with refurbishing and deploying inventoried rigs.
We have successfully refurbished and brought into operation 12 inventoried drilling rigs since November 2003. Upon completion of
refurbishment, the rigs either met or exceeded our operating expectations. In addition, we have a 41,000 square foot machine shop in Oklahoma
City which allows us to refurbish and repair our rigs and equipment in-house. This facility, which complements our four rig refurbishment
yards, significantly reduces our reliance on outside machine shops and the attendant risk of third-party delays in our rig refurbishment program.

      We currently operate in Oklahoma, Kansas, the Barnett Shale and Cotton Valley trends and Palo Duro Basin in Texas, the Williston
Basin in North Dakota and the Piceance Basin in Colorado. A majority of the wells we have drilled for our customers have been drilled in
search of natural gas reserves. Natural gas is often found in deep and complex geologic formations that generally require higher horsepower,
premium rigs and experienced crews to reach targeted depths. Our current fleet of 64 rigs includes 31 rigs ranging from 950 to 2,500
horsepower. Accordingly, such rigs can, or in the case of inventoried rigs upon refurbishment will be able to, reach the depths required to
explore for deep natural gas reserves. Our higher horsepower rigs can also drill horizontal wells, which are increasing as a percentage of total
wells drilled in North America. We believe our premium rig fleet, rig inventory and experienced crews position us to benefit from the strong
natural gas drilling activity in our core operating areas.

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Recent Developments

      On January 18, 2006, we completed the acquisition of six land drilling rigs and certain other assets, including heavy haul trucks and
excess rig equipment and inventory, from Big A Drilling. The purchase price for the assets consisted of $16.3 million in cash and 72,571 shares
of our common stock. At closing, we also entered into a lease agreement with an affiliate of Big A Drilling under which we leased a rig
refurbishment yard located in Woodward, Oklahoma. The lease has an initial term of six months, and we have the option to extend the term of
the lease for a period of three years following the expiration of the initial term. We also have the option to purchase the leased premises at any
time during the term of the lease for $200,000. For additional information regarding this transaction, see ―Management’s Discussion and
Analysis of Financial Condition and Results of Operations—Liquidity and Capital Resources‖ and ―Business—General‖ and ―—Our Fleet of
Drilling Rigs.‖

      On January 13, 2006, we entered into a $150.0 million revolving credit facility with Fortis Capital Corp., as administrative agent, lead
arranger and sole bookrunner, and a syndicate of lenders, which include The Royal Bank of Scotland plc, The CIT Group/Business Credit, Inc.,
Calyon Corporate and Investment Bank, Merrill Lynch Capital, Comerica Bank and Caterpillar Financial Services Corporation. The revolving
credit facility matures on January 13, 2009. Loans under the revolving credit facility bear interest at LIBOR plus a margin that can range from
2.0% to 3.0% or, at our option, the prime rate plus a margin that can range from 1.0% to 2.0%, depending on the ratio of our outstanding senior
debt to ―Adjusted EBITDA‖ as defined in the credit agreement. Our borrowings under this revolving credit facility were used to fund a portion
of the Big A Drilling acquisition, and to repay in full borrowings under our term loan with Merrill Lynch Capital and our revolving line of
credit with International Bank of Commerce.

                                                                        2
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Our Industry

      We believe that the following trends in our industry should benefit our operations:

      •    Need for increased natural gas drilling activity as U.S. demand growth outpaces U.S. supply growth. From 1994 to 2003, demand
           for natural gas in the United States grew at an annual rate of 0.6% while the U.S. domestic supply grew at an annual rate of 0.2%.
           The Energy Information Administration, or EIA, recently estimated that U.S. domestic consumption of natural gas exceeded
           domestic production by 17% in 2004, a gap that the EIA forecasts will expand to 24% in 2010.

                                                 U.S. Natural Gas Wells Drilled & Production




    Source: EIA.

      •    Increased decline rates in natural gas basins in the U.S. As the chart above shows, even though the number of U.S. natural gas
           wells drilled has increased significantly, a corresponding increase in production has not been realized. We believe that a significant
           reason for the limited supply response, even as drilling activities have increased, is the accelerating decline rates of production from
           new natural gas wells drilled. A study published by the National Petroleum Council in September 2003 concluded, from analysis of
           production data over the preceding ten years, that as a result of domestic natural gas decline rates of 25% to 30% per year, 80% of
           natural gas production in ten years will be from wells that have not yet been drilled. We believe that this tends to support a sustained
           higher natural gas price environment, which should create incentives for oil and natural gas exploration and production companies to
           increase drilling activities in the U.S.

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      •    Trend towards drilling and developing unconventional natural gas resources. As a result of improvements in extraction
           technologies along with general increases in natural gas prices, oil and natural gas companies increasingly are exploring for and
           developing ―unconventional‖ natural gas resources, such as natural gas from tight sands, shales and coalbed methane. This type of
           drilling activity is frequently done on tighter acreage spacing and requires that more wells be drilled. It also requires higher
           horsepower rigs for techniques such as horizontal drilling.

      •    High natural gas prices. While U.S. natural gas prices are volatile, 2005 marked the third consecutive year of increases in the
           yearly average NYMEX near month natural gas contract prices, as shown on the chart below. We believe that high natural gas prices
           in the U.S., if sustained, should result in more exploration and development drilling activity, and thus higher utilization and dayrates
           for drilling companies like us.




    Source: Bloomberg.

      •    Increases in dayrates and operating margins for land drilling. The increase in the price of natural gas, coupled with accelerating
           decline rates and an increase in the number of natural gas wells being drilled, have resulted in increases in rig utilization, and
           consequently improved dayrates and gross margins.

                                                                         4
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Our Strengths

      Our competitive strengths include:

      •    Premium rig fleet . We currently operate a fleet of 41 rigs, 20 of which have been refurbished since November 2003 by us or the
           parties from which the rigs were purchased. Natural gas reserves are often found in deep and complex geological formations that
           require higher horsepower or premium rigs to drill. In addition, the recovery of unconventional natural gas resources often involves
           horizontal drilling techniques that also require premium rigs with approximately 1,000 or more horsepower. We believe that our
           operating history and high-quality rig fleet position us to benefit from this type of drilling activity.

      •    Inventory of drilling rigs and ancillary equipment. In addition to our four rigs currently being refurbished, our 19 drilling rigs held
           in inventory for refurbishment will allow us to add capacity in response to the currently strong land drilling market. We also have an
           inventory of excess drawworks, hooks, blow-out preventors and other rig-related equipment. Our inventoried rigs as well as many of
           the parts we have in inventory would have long delivery lead times if ordered new.

      •    Ability to refurbish inventoried rigs. Our management team has demonstrated the ability to refurbish rigs from our inventory. Since
           November 2003, we have successfully refurbished and placed into service 12 inventoried drilling rigs at costs ranging from $2.2
           million to $6.6 million per rig. We are currently refurbishing four additional rigs, all of which range from 450 to 1,400 horsepower.
           We expect to put all four of the rigs currently being refurbished into service by the end of the second quarter of 2006. In connection
           with each of the Thomas and Big A Drilling acquisitions, we leased an additional refurbishment yard for a six month term, with the
           right to extend the term for an additional three years. We also obtained options to purchase both of these yards at any time during the
           term for $175,000 and $200,000, respectively.

      •    Ability to attract and retain qualified rig crews. We believe that our premium rig fleet and experienced management team allow us
           to successfully attract and retain qualified rig crews relative to some larger, more diversified land drilling companies. As a result, we
           believe we have been able to refurbish rigs from our inventory and put them into operation without sacrificing our operating quality.

Our Challenges

      We face a number of challenges in capitalizing on our strengths and implementing our strategies. For example:

      •    We derive all our revenues from companies in the oil and natural gas exploration and production industry, a historically cyclical
           industry with levels of activity that are significantly affected by the levels and volatility of oil and natural gas prices.

      •    A material reduction in the levels of exploration and development activities or an increase in the number of rigs mobilized to our
           market areas could decrease our dayrates and utilization rates.

      •    Our revenues and profitability could be negatively impacted if we are unable to successfully complete the refurbishment of our
           inventoried rigs on schedule and within budget and use those and the other rigs in our fleet at profitable levels.

      •    We operate in a highly competitive, fragmented industry in which price competition is intense.

      For further discussion of these and other challenges we face, see ―Risk Factors‖ beginning on page 11.

                                                                         5
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Our Strategy

      Our strategy is to continue to expand our contract land drilling services. Specifically, we intend to:

      •    Refurbish and deploy rigs from our inventory. We intend to continue the refurbishment and deployment of our inventoried rigs.
           We expect to put all four of the rigs currently being refurbished into service by the end of the second quarter of 2006. We plan on
           refurbishing seven additional rigs from our current inventory during 2006, at estimated costs (including drill pipe) ranging from $1.8
           million to $6.5 million per rig. We continue to focus our refurbishment program on our higher horsepower rigs. As a result of the
           Thomas and Big A Drilling acquisitions, we added the use of two additional rig refurbishment yards, bringing the total number of
           yards in use for refurbishment to four, and also added experienced refurbishing crews that complemented the experienced crews we
           had in place. Our five rig-up supervisors have an average of 31 years of experience in the drilling industry. Following our Big A
           Drilling acquisition, the management team members and crews from Big A Drilling joined our team.

      •    Expand our rig fleet and geographic focus. We intend to continue to expand our rig fleet and geographic areas of operation by
           making selected acquisitions and mobilizing rigs to other regions. We are currently operating in Oklahoma, Kansas, the Barnett
           Shale and Cotton Valley trends and Palo Duro Basin in Texas, the Williston Basin in North Dakota and the Piceance Basin in
           Colorado. We began operations in the Barnett Shale with seven rigs through our Eagle and Thomas acquisitions. We regularly
           evaluate potential acquisitions of rigs and ancillary operations in both our existing and new regions.

      •    Maintain a balanced portfolio of spot and term contracts. We manage our rig fleet as a portfolio, committing some of our rigs to
           longer-term contracts that meet our targeted returns on invested capital, and leveraging spot market rates with other rigs. As we
           expand our geographic focus, we initially plan on favoring longer-term contracts in our new markets until we gain operating
           maturity in those markets.

      •    Maintain a conservative capital structure and disciplined approach to capital spending. We believe that our conservative balance
           sheet will allow us to pursue opportunities to grow our business. We will continue to evaluate investment opportunities, including
           potential acquisitions and additional rig refurbishments, that meet our targeted returns on invested capital.

Our Equity Sponsor

      We were formed by affiliates of Wexford Capital LLC (―Wexford‖) in June 2001. Wexford is a Greenwich, Connecticut based SEC
registered investment advisor with approximately $4.5 billion under management as of December 31, 2005. Wexford has made private equity
investments in many different sectors with particular expertise in the energy and natural resources sector. Prior to this offering, Wexford
beneficially owned approximately 56.3% of our outstanding common stock through Bronco Drilling Holdings, L.L.C., an entity controlled by
Wexford. Bronco Drilling Holdings, L.L.C. is the selling stockholder in this offering. Upon completion of the offering, Wexford will
beneficially own approximately 47.3% of our common stock (approximately 45.5% if the overallotment option is exercised in full).

Our Offices

      Our principal executive offices are located at 14313 North May Avenue, Oklahoma City, Oklahoma 73134, and our telephone number is
(405) 242-4444. Our website address is www.broncodrill.com . Information contained on our website does not constitute part of this
prospectus.

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                                                                 The Offering

Common stock offered by Bronco                                                  1,700,000 shares

Common stock offered by Bronco Drilling Holdings, L.L.C.                        1,300,000 shares

Common stock to be outstanding after this offering                              24,937,939 shares

Use of proceeds                                                                 We intend to use the net proceeds from our sale of shares of
                                                                                common stock in this offering to repay outstanding borrowings
                                                                                under our revolving credit facility. These borrowings were used
                                                                                to fund a portion of the Big A Drilling acquisition and to repay
                                                                                in full borrowings under our term loan with Merrill Lynch
                                                                                Capital and our revolving line of credit with International Bank
                                                                                of Commerce. For additional information regarding our
                                                                                borrowings, see ―Use of Proceeds.‖

Dividend policy                                                                 We currently anticipate that we will retain all future earnings, if
                                                                                any, to finance the growth and development of our business. We
                                                                                do not intend to pay cash dividends in the foreseeable future.

The Nasdaq National Market symbol                                               ―BRNC‖

Risk factors                                                                    We are subject to a number of risks that you should carefully
                                                                                consider before deciding to invest in our common stock. These
                                                                                risks are discussed more fully in ―Risk Factors.‖

      Except as otherwise indicated, all information contained in this prospectus:

      •    assumes the underwriters do not exercise their overallotment option; and

      •    excludes 654,500 shares of our common stock issuable upon the exercise of outstanding options at a weighted average exercise price
           of $19.55 per share.

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                                             Summary Historical and Pro Forma Financial Data

      The following table sets forth our summary historical and pro forma financial data as of and for each of the years indicated. We derived
the summary historical financial data from our historical audited consolidated financial statements for the years indicated. The unaudited pro
forma information was prepared on a basis consistent with that used in preparing our audited consolidated financial statements and includes all
adjustments, consisting of normal and recurring items, that we consider necessary for a fair presentation of the results of operations for the
unaudited period. The summary unaudited pro forma financial data for the year ended December 31, 2005 give effect to certain events
identified in the Bronco Drilling Company, Inc. Unaudited Pro Forma Combined Consolidated Financial Statements appearing elsewhere in
this prospectus, including our acquisition of Strata Drilling, L.L.C. and Strata Property, L.L.C. in July 2005, our acquisition of Thomas Drilling
Co. in October 2005 and our acquisition of Eagle Drilling, L.L.C. and its affiliates in October 2005 as if such acquisitions had occurred on
January 1, 2005, but not our acquisitions of Hays Trucking, Inc., which was not a financially significant acquisition, and Big A Drilling, for
which audited financial statements are not currently available. The summary unaudited pro forma financial data are based on certain
assumptions and adjustments and do not purport to reflect what our actual results of operations would have been had such acquisitions in fact
occurred on January 1, 2005, nor are they necessarily indicative of the results of operations that we may achieve in the future. You should
review this information together with the Bronco Drilling Company, Inc. Unaudited Pro Forma Combined Consolidated Financial Statements,
―Management’s Discussion and Analysis of Financial Condition and Results of Operations‖ and our consolidated historical financial statements
and related notes included elsewhere in this prospectus.

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                                                                                 Pro Forma
                                                                                Year Ended
                                                                                December 31,                                  Year Ended
                                                                                    2005                                      December 31,

                                                                                                             2005            2004            2003             2002

                                                                                    (Unaudited)


                                                                                                    (In thousands, except per share amounts)
Consolidated Statements of Operations Information:
Contract drilling revenues                                                      $         115,932        $ 77,885        $ 21,873        $ 12,533         $    3,115
Costs and expenses:
  Contract drilling                                                                        66,996            44,695          18,670          10,537            3,239
  Depreciation and amortization                                                            14,144             9,143           3,695           1,985            1,122
  General and administrative                                                               16,865             9,395           1,714           1,226              676

      Total operating costs and expenses                                                   98,005            63,233          24,079          13,748            5,037

Income (loss) from operations                                                              17,927            14,652           (2,206 )         (1,215 )        (1,922 )

Other income (expense):
   Interest expense                                                                        (7,206 )           (1,415 )         (285 )             (21 )              —
   Loss from early extinguishment of debt                                                  (2,062 )           (2,062 )           —                 —                 —
   Interest income                                                                            462                432             10                 3                 5
   Other income                                                                               962                 53             —                 —                 —

      Total other income (expense)                                                         (7,844 )           (2,992 )         (275 )             (18 )               5

Income (loss) before income taxes                                                          10,083            11,660           (2,481 )         (1,233 )        (1,917 )
Income tax expense                                                                          3,801             6,529              285              317              —

   Net income (loss)                                                            $           6,282        $    5,131      $    (2,766 )   $     (1,550 )   $    (1,917 )

Income per common share—Basic                                                                            $      0.32

Income per common share—Diluted                                                                          $      0.31

Weighted average number of shares outstanding—Basic                                                          16,259

Weighted average number of shares outstanding—Diluted                                                        16,306

Pro Forma C Corporation Data: (1)
Historical income (loss) from operations before income taxes                                             $ 11,660        $    (2,481 )   $     (1,233 )   $    (1,917 )
Pro forma provision (benefit) for income taxes attributable to operations                                   4,396               (936 )           (465 )          (723 )

Pro forma income (loss) from operations                                                                  $    7,264      $    (1,545 )   $      (768 )    $    (1,194 )

Pro forma income (loss) per common share—basic and diluted                      $            0.39        $     0.45      $    (0.12 )    $    (0.06 )     $    (0.09 )
Weighted average pro forma shares outstanding—basic                                        16,259            16,259          13,360          13,360           13,360
Weighted average pro forma shares outstanding—diluted                                      16,306            16,306          13,360          13,360           13,360
Other Financial Data:
Calculation of EBITDA:
   Net income (loss)                                                            $           6,282        $    5,131      $    (2,766 )   $     (1,550 )   $    (1,917 )
   Interest expense                                                                         7,206             1,415              285               21              —
   Income tax expense                                                                       3,801             6,529              285              317              —
   Depreciation and amortization                                                           14,144             9,143            3,695            1,985           1,122

      EBITDA (2)                                                                $          31,433            22,218      $    1,499      $       773      $     (795 )



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                                                                                                          Year Ended
                                                                                                          December 31,

                                                                                   2005                2004                 2003                2002

                                                                                                       (In thousands)
Consolidated Cash Flow Information:
Net cash provided (used) by:
  Operating activities                                                         $      3,318        $     2,364           $ (1,914 )         $      (890 )
  Investing activities (3)                                                         (190,326 )          (19,511 )           (4,846 )             (12,879 )
  Financing activities                                                              202,908             16,623              7,798                14,103

                                                                                                                  At December 31,

                                                                                                2005              2004             2003             2002

                                                                                                                   (In thousands)
Consolidated Balance Sheet Information:
Total current assets                                                                       $     53,953       $     8,118     $     5,682       $    1,495
Total assets                                                                                    330,520            90,143          71,920           15,629
Total debt                                                                                       51,825            18,100           4,300               —
Total liabilities                                                                                91,184            39,340          21,218              620
Total members’ equity                                                                                —             50,803          50,702           15,009
Total stockholders’ equity                                                                      239,336                —               —                —

(1) Prior to the completion of our initial public offering in August 2005, we merged with Bronco Drilling Company, L.L.C., our predecessor
    company. Bronco Drilling Company, L.L.C. was a limited liability company treated as a partnership for federal income tax purposes. As a
    result, essentially all of its taxable earnings and losses were passed through to its members, and it did not pay federal income taxes at the
    entity level. Historical income taxes consist mainly of deferred income taxes on a taxable subsidiary, Elk Hill Drilling, Inc. Since we are a
    C corporation, for comparative purposes we have included a pro forma provision (benefit) for income taxes assuming we had been taxed
    as a C corporation in all periods prior to the merger.

(2) EBITDA is a non-generally accepted accounting principles (―GAAP‖) financial measure equal to net income (loss), the most directly
    comparable GAAP financial measure, plus interest expense, income tax expense, depreciation and amortization. We have presented
    EBITDA because we use EBITDA as an integral part of our internal reporting to measure our performance and to evaluate the
    performance of our senior management. We consider EBITDA to be an important indicator of the operational strength of our business.
    EBITDA eliminates the uneven effect of considerable amounts of non-cash depreciation and amortization. A limitation of this measure,
    however, is that it does not reflect the periodic costs of certain capitalized tangible and intangible assets used in generating revenues in our
    business. Management evaluates the costs of such tangible and intangible assets and the impact of related impairments through other
    financial measures, such as capital expenditures, investment spending and return on capital. Therefore, we believe that EBITDA provides
    useful information to our investors regarding our performance and overall results of operations. EBITDA is not intended to be a
    performance measure that should be regarded as an alternative to, or more meaningful than, either net income as an indicator of operating
    performance or to cash flows from operating activities as a measure of liquidity. In addition, EBITDA is not intended to represent funds
    available for dividends, reinvestment or other discretionary uses, and should not be considered in isolation or as a substitute for measures
    of performance prepared in accordance with GAAP. The EBITDA measure presented in this prospectus may not be comparable to
    similarly titled measures presented by other companies, and may not be identical to corresponding measures used in our various
    agreements.

(3) In August 2003, we acquired 22 drilling rigs and drilling rig structures and components for an aggregate of $49.0 million. These
    transactions were funded directly by our equity holders. Accordingly, they have been accounted for as acquisitions by our equity holders
    followed by their contribution to us of the acquired assets. As a result, net cash used in investing activities for 2003 does not include the
    $33.5 million cash portion of the acquisition cost. See Note 2 to our consolidated financial statements appearing elsewhere in this
    prospectus.

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                                                                  RISK FACTORS

     Investing in our common stock involves a high degree of risk. You should carefully consider the following risks and all other information
contained in this prospectus before deciding to invest in our common stock. Our business, financial condition or results of operations could be
materially and adversely affected by any of these risks. The trading price of our common stock could decline due to any of these risks, and you
may lose all or part of your investment.

Risks Relating to the Oil and Natural Gas Industry

We derive all our revenues from companies in the oil and natural gas exploration and production industry, a historically cyclical industry
with levels of activity that are significantly affected by the levels and volatility of oil and natural gas prices.

      We derive all our revenues from companies in the oil and natural gas exploration and production industry, a historically cyclical industry
with levels of activity that are significantly affected by the levels and volatility of oil and natural gas prices. Any prolonged reduction in the
overall level of exploration and development activities, whether resulting from changes in oil and natural gas prices or otherwise, can adversely
impact us in many ways by negatively affecting:

      •    our revenues, cash flows and profitability;

      •    our ability to maintain or increase our borrowing capacity;

      •    our ability to obtain additional capital to finance our business and make acquisitions, and the cost of that capital;

      •    our ability to retain skilled rig personnel whom we would need in the event of an upturn in the demand for our services; and

      •    the fair market value of our rig fleet.

       Worldwide political, economic and military events have contributed to oil and natural gas price volatility and are likely to continue to do
so in the future. Depending on the market prices of oil and natural gas, oil and natural gas exploration and production companies may cancel or
curtail their drilling programs, thereby reducing demand for our services. Oil and natural gas prices have been volatile historically and, we
believe, will continue to be so in the future. Many factors beyond our control affect oil and natural gas prices, including:

      •    the cost of exploring for, producing and delivering oil and natural gas;

      •    the discovery rate of new oil and natural gas reserves;

      •    the rate of decline of existing and new oil and natural gas reserves;

      •    available pipeline and other oil and natural gas transportation capacity;

      •    the ability of oil and natural gas companies to raise capital;

      •    actions by OPEC, the Organization of Petroleum Exporting Countries;

      •    political instability in the Middle East and other major oil and natural gas producing regions;

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      •    economic conditions in the United States and elsewhere;

      •    governmental regulations, both domestic and foreign;

      •    domestic and foreign tax policy;

      •    weather conditions in the United States and elsewhere;

      •    the pace adopted by foreign governments for the exploration, development and production of their national reserves;

      •    the price of foreign imports of oil and natural gas; and

      •    the overall supply and demand for oil and natural gas.

Risks Relating to Our Business

Our acquisition strategy exposes us to various risks, including those relating to difficulties in identifying suitable acquisition opportunities
and integrating businesses, assets and personnel, as well as difficulties in obtaining financing for targeted acquisitions and the potential for
increased leverage or debt service requirements.

      As a component of our business strategy, we have pursued and intend to continue to pursue selected acquisitions of complementary assets
and businesses. In May 2002, we purchased seven drilling rigs, associated spare parts and equipment, drill pipe, haul trucks and vehicles. In
August 2003, we acquired drilling rigs and inventoried structures and components which, with refurbishment and upgrades, could be used to
assemble 22 drilling rigs. In July 2005, we acquired three additional rigs and related inventory, equipment, components and rig yard. On
October 3, 2005, we acquired five operating rigs, seven inventoried rigs and rig equipment and parts. On October 14, 2005, we acquired nine
operating rigs, two rigs undergoing refurbishment, two inventoried rigs and rig equipment and parts. On January 18, 2006, we acquired six
operating land drilling rigs and certain other assets, including heavy haul trucks and excess rig equipment. Acquisitions, including those
described above, involve numerous risks, including:

      •    unanticipated costs and assumption of liabilities and exposure to unforeseen liabilities of acquired companies, including but not
           limited to environmental liabilities;

      •    difficulty in integrating the operations and assets of the acquired business and the acquired personnel and distinct cultures;

      •    our ability to properly access and maintain an effective internal control environment over an acquired company, in order to comply
           with the recently adopted public reporting requirements;

      •    potential loss of key employees and customers of the acquired companies;

      •    risk of entering markets in which we have limited prior experience; and

      •    an increase in our expenses and working capital requirements.

      The process of integrating an acquired business may involve unforeseen costs and delays or other operational, technical and financial
difficulties and may require a disproportionate amount of management attention and financial and other resources. Our failure to achieve
consolidation savings, to incorporate the acquired businesses and assets into our existing operations successfully or to minimize any unforeseen
operational difficulties could have a material adverse effect on our financial condition and results of operations.

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      In addition, we may not have sufficient capital resources to complete additional acquisitions. Historically, we have funded the acquisition
of rigs and the refurbishment of our rig fleet through a combination of debt and equity financing. We may incur substantial additional
indebtedness to finance future acquisitions and also may issue equity, debt or convertible securities in connection with such acquisitions. Debt
service requirements could represent a significant burden on our results of operations and financial condition and the issuance of additional
equity or convertible securities could be dilutive to our existing stockholders. Furthermore, we may not be able to obtain additional financing
on satisfactory terms. Even if we have access to the necessary capital, we may be unable to continue to identify additional suitable acquisition
opportunities, negotiate acceptable terms or successfully acquire identified targets.

Increases in the supply of rigs could decrease dayrates and utilization rates.

      An increase in the supply of land rigs, whether through new construction or refurbishment, could decrease dayrates and utilization rates,
which would adversely affect our revenues and profitability. In addition, such adverse affect on our revenue and profitability caused by such
increased competition and lower dayrates and utilization rates could be further aggravated by any downturn in oil and natural gas prices.

A material reduction in the levels of exploration and development activities in Oklahoma or Texas or an increase in the number of rigs
mobilized to Oklahoma or Texas could negatively impact our dayrates and utilization rates.

     We currently conduct a substantial portion of our operations in Oklahoma and Texas. A material reduction in the levels of exploration
and development activities in Oklahoma or Texas due to a variety of oil and natural gas industry risks described above or an increase in the
number of rigs mobilized to Oklahoma or Texas could negatively impact our dayrates and utilization rates, which could adversely affect our
revenues and profitability.

Our revenues and profitability could be negatively impacted if we are unable to successfully complete the refurbishment of our inventoried
rigs on schedule and within budget and use those and the other rigs in our fleet at profitable levels.

       We expect to put all four of the rigs currently being refurbished into service by the end of the second quarter of 2006. We plan on
refurbishing seven additional rigs from our current inventory during 2006, at estimated costs (including drill pipe) ranging from $1.8 million to
$6.5 million per rig. Our revenues and profitability could be negatively impacted if we are unable to successfully complete the refurbishment of
our inventoried rigs on schedule and within budget and operate those and the other rigs in our fleet at profitable levels. Our refurbishment
projects are subject to the risks of delay and cost overruns inherent in any large construction project, including shortages of equipment,
unforeseen engineering problems, work stoppages, weather interference, unanticipated cost increases, inability to obtain necessary
certifications and approvals and shortages of materials or skilled labor. Significant delays could negatively impact our anticipated contract
commitments with respect to rigs being refurbished, while significant cost overruns or delays in general could adversely affect our financial
condition and results of operations. Moreover, customer demand for rigs currently being refurbished may not be as strong as we presently
anticipate, and our inability to obtain contracts on anticipated terms or at all may negatively impact our revenues and profitability.

We have a history of losses and may experience losses in the future.

      Although we reported net income of $5.1 million for the year ended December 31, 2005, we have a history of losses. We incurred net
losses of $2.8 million, $1.6 million and $1.9 million for the years ended December 31, 2004, 2003 and 2002, respectively. Our profitability in
the future will depend on many factors, but largely on utilization rates and dayrates for our drilling rigs. Our current utilization rates and
dayrates may decline and we may experience losses in the future.

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We operate in a highly competitive, fragmented industry in which price competition could reduce our profitability.

      We operate in a highly competitive, fragmented industry in which price competition could reduce our profitability. The fact that drilling
rigs are mobile and can be moved from one market to another in response to market conditions heightens the competition in the industry.

      The drilling contracts we compete for are usually awarded on the basis of competitive bids or direct negotiations with customers. We
believe pricing and rig availability are the primary factors our potential customers consider in determining which drilling contractor to select. In
addition, we believe the following factors are also important:

      •    the type and condition of each of the competing drilling rigs;

      •    the mobility and efficiency of the rigs;

      •    the quality of service and experience of the rig crews;

      •    the offering of ancillary services; and

      •    the ability to provide drilling equipment adaptable to, and personnel familiar with, new technologies and drilling techniques.

      While we must be competitive in our pricing, our competitive strategy generally emphasizes the quality of our equipment and experience
of our rig crews to differentiate us from our competitors. This strategy is less effective as lower demand for drilling services or an oversupply
of rigs usually results in increased price competition and makes it more difficult for us to compete on the basis of factors other than price. In all
of the markets in which we compete, an oversupply of rigs can cause greater price competition which can, in turn, reduce our profitability.

      Contract drilling companies compete primarily on a regional basis, and the intensity of competition may vary significantly from region to
region at any particular time. If demand for drilling services improves in a region where we operate, our competitors might respond by moving
in suitable rigs from other regions. An influx of rigs from other regions could rapidly intensify competition and reduce profitability.

We face competition from competitors with greater resources that may make it more difficult for us to compete, which can reduce our
dayrates and utilization rates.

    Some of our competitors have greater financial, technical and other resources than we do that may make it more difficult for us to
compete, which can reduce our dayrates and utilization rates. Their greater capabilities in these areas may enable them to:

      •    better withstand industry downturns;

      •    compete more effectively on the basis of price and technology;

      •    retain skilled rig personnel; and

      •    build new rigs or acquire and refurbish existing rigs so as to be able to place rigs into service more quickly than us in periods of high
           drilling demand.

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We are subject to unexpected cost overruns on our footage contracts and, to the extent we enter into such arrangements, turnkey contracts,
which could negatively impact our profitability.

       For the years ended December 31, 2005 and 2004, 1% and 13%, respectively of our total revenues was derived from footage contracts.
Under footage contracts, we are paid a fixed amount for each foot drilled, regardless of the time required or the problems encountered in
drilling the well. We typically pay more of the out-of-pocket costs associated with footage contracts as compared to daywork contracts. The
risks to us on a footage contract are greater because we assume most of the risks associated with drilling operations generally assumed by the
operator in a daywork contract, including the risk of blowout, loss of hole, stuck drill pipe, machinery breakdowns, abnormal drilling
conditions and risks associated with subcontractors’ services, supplies, cost escalation and personnel. The occurrence of uninsured or
under-insured losses or operating cost overruns on our footage jobs could have a negative impact on our profitability. Similar to our footage
contracts, under turnkey contacts drilling companies assume most of the risks associated with drilling operations that the operator generally
assumes under a daywork contract. Although we historically have not entered into turnkey contracts, if we were to enter into a turnkey contract
or acquire such a contract in connection with future acquisitions, the occurrence of uninsured or under-insured losses or operating cost overruns
on such a job could negatively impact our profitability.

Our operations involve operating hazards, which if not insured or indemnified against, could adversely affect our results of operations and
financial condition.

      Our operations are subject to the many hazards inherent in the contract land drilling business, including the risks of:

      •    blowouts;

      •    fires and explosions;

      •    loss of well control;

      •    collapse of the borehole;

      •    lost or stuck drill strings; and

      •    damage or loss from natural disasters.

      Any of these hazards can result in substantial liabilities or losses to us from, among other things:

      •    suspension of drilling operations;

      •    damage to, or destruction of, our property and equipment and that of others;

      •    personal injury and loss of life;

      •    damage to producing or potentially productive oil and natural gas formations through which we drill; and

      •    environmental damage.

      We seek to protect ourselves from some but not all operating hazards through insurance coverage. However, some risks are either not
insurable or insurance is available only at rates that we consider uneconomical. Those risks include pollution liability in excess of relatively
low limits. Depending on competitive conditions and other

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factors, we attempt to obtain contractual protection against uninsured operating risks from our customers. However, customers who provide
contractual indemnification protection may not in all cases maintain adequate insurance to support their indemnification obligations. Our
insurance or indemnification arrangements may not adequately protect us against liability or loss from all the hazards of our operations. The
occurrence of a significant event that we have not fully insured or indemnified against or the failure of a customer to meet its indemnification
obligations to us could materially and adversely affect our results of operations and financial condition. Furthermore, we may be unable to
maintain adequate insurance in the future at rates we consider reasonable.

We face increased exposure to operating difficulties because we primarily focus on drilling for natural gas.

      A majority of our drilling contracts are with exploration and production companies in search of natural gas. Drilling on land for natural
gas generally occurs at deeper drilling depths than drilling for oil. Although deep-depth drilling exposes us to risks similar to risks encountered
in shallow-depth drilling, the magnitude of the risk for deep-depth drilling is greater because of the higher costs and greater complexities
involved in drilling deep wells. We generally enter into International Association of Drilling Contractors contracts that contain ―day work‖
indemnification language that transfers responsibility for down hole exposures such as blowout and fire to the operator, leaving us responsible
only for damage to our rig and our personnel. If we do not adequately insure the risk from blowouts or if our contractual indemnification rights
are insufficient or unfulfilled, our profitability and other results of operation and our financial condition could be adversely affected in the event
we encounter blowouts or other significant operating difficulties while drilling at deeper depths. If our primary focus shifts from drilling for
customers in search of natural gas to drilling for customers in search of oil, the majority of our rig fleet would be disadvantaged in competing
for new oil drilling projects as compared to competitors that primarily use shallower drilling depth rigs when drilling in search of oil.

Our operations are subject to various laws and governmental regulations that could restrict our future operations and increase our
operating costs.

      Many aspects of our operations are subject to various federal, state and local laws and governmental regulations, including laws and
regulations governing:

      •    environmental quality;

      •    pollution control;

      •    remediation of contamination;

      •    preservation of natural resources; and

      •    worker safety.

      Our operations are subject to stringent federal, state and local laws and regulations governing the protection of the environment and
human health and safety. Several such laws and regulations relate to the disposal of hazardous oilfield waste and restrict the types, quantities
and concentrations of such regulated substances that can be released into the environment. Several such laws also require removal and remedial
action and other cleanup under certain circumstances, commonly regardless of fault. Planning, implementation and maintenance of protective
measures are required to prevent accidental discharges. Spills of oil, natural gas liquids, drilling fluids and other substances may subject us to
penalties and cleanup requirements. Handling, storage and disposal of both hazardous and non-hazardous wastes are also subject to these
regulatory requirements. In addition, our operations are often conducted in or near ecologically sensitive areas, which are subject to special
protective measures and that may expose us to additional operating costs and liabilities for accidental discharges of oil, natural gas, drilling
fluids, contaminated water or other substances or for noncompliance with other aspects of

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applicable laws and regulations. Historically, we have not been required to obtain environmental or other permits prior to drilling a well.
Instead, the operator of the oil and gas property has been obligated to obtain the necessary permits at its own expense.

      The federal Clean Water Act, as amended by the Oil Pollution Act, the federal Clean Air Act, the federal Resource Conservation and
Recovery Act, the federal Comprehensive Environmental Response, Compensation, and Liability Act, or CERCLA, the Safe Drinking Water
Act, the Occupational Safety and Health Act, or OSHA, and their state counterparts and similar statutes are the primary vehicles for imposition
of such requirements and for civil, criminal and administrative penalties and other sanctions for violation of their requirements. The OSHA
hazard communication standard, the Environmental Protection Agency ―community right-to-know‖ regulations under Title III of the federal
Superfund Amendment and Reauthorization Act and comparable state statutes require us to organize and report information about the
hazardous materials we use in our operations to employees, state and local government authorities and local citizens. In addition, CERCLA,
also known as the ―Superfund‖ law, and similar state statutes impose strict liability, without regard to fault or the legality of the original
conduct, on certain classes of persons who are considered responsible for the release or threatened release of hazardous substances into the
environment. These persons include the current owner or operator of a facility where a release has occurred, the owner or operator of a facility
at the time a release occurred, and companies that disposed of or arranged for the disposal of hazardous substances found at a particular site.
This liability may be joint and several. Such liability, which may be imposed for the conduct of others and for conditions others have caused,
includes the cost of removal and remedial action as well as damages to natural resources. Few defenses exist to the liability imposed by
environmental laws and regulations. It is also not uncommon for third parties to file claims for personal injury and property damage caused by
substances released into the environment.

      Environmental laws and regulations are complex and subject to frequent changes. Failure to comply with governmental requirements or
inadequate cooperation with governmental authorities could subject a responsible party to administrative, civil or criminal action. We may also
be exposed to environmental or other liabilities originating from businesses and assets that we acquired from others. We are in substantial
compliance with applicable environmental laws and regulations and, to date, such compliance has not materially affected our capital
expenditures, earnings or competitive position. We do not expect to incur material capital expenditures in our next fiscal year in order to
comply with current or reasonably anticipated environment control requirements. However, our compliance with amended, new or more
stringent requirements, stricter interpretations of existing requirements or the future discovery of regulatory noncompliance or contamination
may require us to make material expenditures or subject us to liabilities that we currently do not anticipate.

      In addition, our business depends on the demand for land drilling services from the oil and natural gas industry and, therefore, is affected
by tax, environmental and other laws relating to the oil and natural gas industry generally, by changes in those laws and by changes in related
administrative regulations. It is possible that these laws and regulations may in the future add significantly to our operating costs or those of our
customers or otherwise directly or indirectly affect our operations.

We rely on a few key employees whose absence or loss could disrupt our operations resulting in a loss of revenues.

      Many key responsibilities within our business have been assigned to a small number of employees. The loss of their services, particularly
the loss of Frank Harrison, our Chief Executive Officer and President, Zachary Graves, our Chief Financial Officer, or Karl Benzer, our Chief
Operating Officer, could disrupt our operations resulting in a loss of revenues. We do not have an employment contract with any of our
executives, with the exception of Mr. Benzer, and our executives, with the exception of Mr. Benzer, are not restricted from competing with us
if they cease to be employed by us. Additionally, as a practical matter, any employment agreement we may enter into will not assure the
retention of our employees. In addition, we do not maintain ―key person‖ life insurance policies on any of our employees. As a result, we are
not insured against any losses resulting from the death of our key employees.

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We may be unable to attract and retain qualified, skilled employees necessary to operate our business.

      Our success depends in large part on our ability to attract and retain skilled and qualified personnel. Our inability to hire, train and retain
a sufficient number of qualified employees could impair our ability to manage and maintain our business. We require skilled employees who
can perform physically demanding work. Shortages of qualified personnel are occurring in our industry. As a result of the volatility of the oil
and natural gas industry and the demanding nature of the work, potential employees may choose to pursue employment in fields that offer a
more desirable work environment at wage rates that are competitive with ours. If we should suffer any material loss of personnel to competitors
or be unable to employ additional or replacement personnel with the requisite level of training and experience to adequately operate our
equipment, our operations could be materially and adversely affected. With a reduced pool of workers, it is possible that we will have to raise
wage rates to attract workers from other fields and to retain our current employees. If we are not able to increase our service rates to our
customers to compensate for wage-rate increases, our profitability and other results of operations may be adversely affected.

Shortages in equipment and supplies could limit our drilling operations and jeopardize our relations with customers.

      The materials and supplies we use in our drilling operations include fuels to operate our drilling equipment, drilling mud, drill pipe, drill
collars, drill bits and cement. Shortages in equipment supplies could limit our drilling operations and jeopardize our relations with customers.
We do not rely on a single source of supply for any of these items. From time to time there have been shortages of drilling equipment and
supplies during periods of high demand which we believe could reoccur. Shortages could result in increased prices for drilling equipment or
supplies that we may be unable to pass on to customers. In addition, during periods of shortages, the delivery times for equipment and supplies
can be substantially longer. Any significant delays in our obtaining drilling equipment or supplies could limit drilling operations and jeopardize
our relations with customers. In addition, shortages of drilling equipment or supplies could delay and adversely affect our ability to obtain new
contracts for our rigs, which could negatively impact our revenues and profitability.

We will be subject to the requirements of Section 404 of the Sarbanes-Oxley Act. If we are unable to timely comply with Section 404 or if
the costs related to compliance are significant, our profitability, stock price and results of operations and financial condition could be
materially adversely affected.

      We will be required to comply with the provisions of Section 404 of the Sarbanes-Oxley Act of 2002 as of December 31, 2006.
Section 404 requires that we document and test our internal control over financial reporting and issue management’s assessment of our internal
control over financial reporting. This section also requires that our independent registered public accounting firm opine on those internal
controls and management’s assessment of those controls. We are currently evaluating our existing controls against the standards adopted by the
Committee of Sponsoring Organizations of the Treadway Commission, or COSO. During the course of our ongoing evaluation and integration
of the internal control over financial reporting, we may identify areas requiring improvement, and we may have to design enhanced processes
and controls to address issues identified through this review.

      We believe that the out-of-pocket costs, the diversion of management’s attention from running the day-to-day operations and operational
changes caused by the need to comply with the requirements of Section 404 of the Sarbanes-Oxley Act could be significant. If the time and
costs associated with such compliance exceed our current expectations, our profitability could be affected.

       We cannot be certain at this time that we will be able to successfully complete the procedures, certification and attestation requirements
of Section 404 or that we or our auditors will not identify material weaknesses in internal control over financial reporting. If we fail to comply
with the requirements of Section 404 or if we or our auditors identify and report such material weakness, the accuracy and timeliness of the
filing of our annual and

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quarterly reports may be negatively affected and could cause investors to lose confidence in our reported financial information, which could
have a negative effect on the trading price of our common stock. In addition, a material weakness in the effectiveness of our internal control
over financial reporting could result in an increased chance of fraud and the loss of customers, reduce our ability to obtain financing and require
additional expenditures to comply with these requirements, each of which could negatively impact our business, profitability and financial
condition.

Risks Related to this Offering and Our Common Stock

Our largest stockholder is able to exercise significant influence over our company, and its interests may conflict with those of our other
stockholders.

      Upon completion of this offering, Wexford, through Bronco Drilling Holdings, L.L.C, will beneficially own approximately 47.3% of our
common stock, or approximately 45.5% if the underwriters exercise their overallotment option in full. As a result, Wexford will continue to be
able to exercise significant influence over matters requiring stockholder approval, including the election of directors, changes to our charter
documents and significant corporate transactions. This concentration of ownership makes it unlikely that any other holder or group of holders
of our common stock will be able to affect the way we are managed or the direction of our business. The interests of Wexford with respect to
matters potentially or actually involving or affecting us, such as future acquisitions, financings and other corporate opportunities and attempts
to acquire us, may conflict with the interests of our other stockholders. Wexford’s continued concentrated ownership may have the effect of
delaying or preventing a change of control of us, including transactions in which stockholders might otherwise receive a premium for their
shares over then current market prices.

We have incurred and will continue to incur increased costs as a result of being a public company.

      As a result of becoming a public company in August 2005, we have incurred and will continue to incur significant legal, accounting and
other expenses that we did not incur as a private company. We have incurred and will continue to incur costs associated with our public
company reporting requirements and costs associated with recently adopted corporate governance requirements, including requirements under
the Sarbanes-Oxley Act of 2002, as well as new rules implemented by the SEC and the NASD. Prior to the consummation of this offering, we
were considered to be controlled by Wexford under The Nasdaq National Market rules, and as a result were eligible for exemptions from
provisions of these rules requiring that our board have a majority of independent directors, nominating and corporate governance and
compensation committees composed entirely of independent directors and written charters addressing specified matters. Because we will cease
to be a controlled company within the meaning of these rules upon consummation of this offering, we will be required to comply with these
provisions after the specified transition periods. We expect these rules and regulations to increase our legal and financial compliance costs and
to make some activities more time-consuming and costly. We also expect these new rules and regulations may make it more difficult and more
expensive for us to obtain director and officer liability insurance and we may be required to accept reduced policy limits and coverage or incur
substantially higher costs to obtain the same or similar coverage. As a result, it may be more difficult for us to attract and retain qualified
individuals to serve on our board of directors or as executive officers. We are currently evaluating these new rules, and we cannot predict or
estimate the amount of additional costs we may incur or the timing of such costs.

If the price of our common stock fluctuates significantly, your investment could lose value.

      Prior to our initial public offering in August 2005, there had been no public market for our common stock. Although our common stock is
now quoted on The Nasdaq National Market, we cannot assure you that an active public market will continue to exist for our common stock or
that our common stock will continue to trade in the public market subsequent to this offering at or above the public offering price. If an active
public market for our common stock does not continue, the trading price and liquidity of our common stock will be materially and

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adversely affected. If there is a thin trading market or ―float‖ for our stock, the market price for our common stock may fluctuate significantly
more than the stock market as a whole. Without a large float, our common stock is less liquid than the stock of companies with broader public
ownership and, as a result, the trading prices of our common stock may be more volatile. In addition, in the absence of an active public trading
market, investors may be unable to liquidate their investment in us. The offering price may not be indicative of the trading price for our
common stock after this offering. In addition, the stock market is subject to significant price and volume fluctuations, and the price of our
common stock could fluctuate widely in response to several factors, including:

      •    our quarterly operating results;

      •    changes in our earnings estimates;

      •    additions or departures of key personnel;

      •    changes in the business, earnings estimates or market perceptions of our competitors;

      •    changes in general market or economic conditions; and

      •    announcements of legislative or regulatory change.

      The stock market has experienced extreme price and volume fluctuations in recent years that have significantly affected the quoted prices
of the securities of many companies, including companies in our industry. The changes often appear to occur without regard to specific
operating performance. The price of our common stock could fluctuate based upon factors that have little or nothing to do with our company
and these fluctuations could materially reduce our stock price.

The market price of our common stock could decline following sales of substantial amounts of our common stock in the public markets.

      If a large number of shares of our common stock are sold in the open market after this offering, the trading price of our common stock
could decrease. After this offering, we will have an aggregate of 74,062,061 shares of our common stock authorized but unissued and not
reserved for specific purposes. In general, we may issue all of these shares without any approval by our stockholders. We may pursue
acquisitions and may issue shares of our common stock in connection with these acquisitions.

      Bronco Drilling Holdings, L.L.C., an entity controlled by Wexford, will own approximately 47.3% of our common stock after this
offering (approximately 45.5% if the underwriters exercise their overallotment option in full). We have entered into a registration rights
agreement with Bronco Drilling Holdings under which Bronco Drilling Holdings has three demand registration rights, as well as ―piggyback‖
registration rights. Such sales by Bronco Drilling Holdings, sales by other securityholders or the perception that such sales might occur could
have a material adverse effect on the price of our common stock or could impair our ability to obtain capital through an offering of equity
securities. See ―Securities Eligible for Future Sale—Registration Rights‖ for further information regarding Bronco Drilling Holdings’
registration rights.

We may issue preferred stock whose terms could adversely affect the voting power or value of our common stock.

      Our certificate of incorporation authorizes us to issue, without the approval of our stockholders, one or more classes or series of preferred
stock having such designations, preferences, limitations and relative rights, including preferences over our common stock respecting dividends
and distributions, as our board of directors may determine. The terms of one or more classes or series of preferred stock could adversely impact
the voting power or value of our common stock. For example, we might grant holders of preferred stock the right to elect

                                                                        20
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some number of our directors in all events or on the happening of specified events or the right to veto specified transactions. Similarly, the
repurchase or redemption rights or liquidation preferences we might assign to holders of preferred stock could affect the residual value of the
common stock.

Provisions in our organizational documents could delay or prevent a change in control of our company, even if that change would be
beneficial to our stockholders.

      The existence of some provisions in our organizational documents could delay or prevent a change in control of our company, even if that
change would be beneficial to our stockholders. Our certificate of incorporation and bylaws contain provisions that may make acquiring control
of our company difficult, including:

      •    provisions regulating the ability of our stockholders to nominate directors for election or to bring matters for action at annual
           meetings of our stockholders;

      •    limitations on the ability of our stockholders to call a special meeting and act by written consent;

      •    the authorization given to our board of directors to issue and set the terms of preferred stock; and

      •    limitations on the ability of our stockholders from removing our directors without cause.

We do not intend to pay cash dividends on our common stock in the foreseeable future, and therefore only appreciation of the price of our
common stock will provide a return to our stockholders.

      We currently anticipate that we will retain all future earnings, if any, to finance the growth and development of our business. We do not
intend to pay cash dividends in the foreseeable future. Any payment of cash dividends will depend upon our financial condition, capital
requirements, earnings and other factors deemed relevant by our board of directors. In addition, the terms of our credit facilities prohibit us
from paying dividends and making other distributions. As a result, only appreciation of the price of our common stock, which may not occur,
will provide a return to our stockholders.

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                              CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS

      Our disclosure and analysis in this prospectus may include forward-looking statements within the meaning of Section 27A of the
Securities Act of 1933, as amended, or the Securities Act, Section 21E of the Securities Exchange Act of 1934, as amended, or the Exchange
Act, and the Private Securities Litigation Reform Act of 1995, that are subject to risks and uncertainties. Forward-looking statements give our
current expectations and projections relating to our financial condition, results of operations, plans, objectives, future performance and
business. You can identify these statements by the fact that they do not relate strictly to historical or current facts. These statements may
include words such as ―anticipate,‖ ―estimate,‖ ―expect,‖ ―project,‖ ―intend,‖ ―plan,‖ ―believe‖ and other words and terms of similar meaning
in connection with any discussion of the timing or nature of future operating or financial performance or other events. All statements other than
statements of historical facts included in this prospectus that address activities, events or developments that we expect, believe or anticipate will
or may occur in the future are forward-looking statements.

     These forward-looking statements are largely based on our expectations and beliefs concerning future events, which reflect estimates and
assumptions made by our management. These estimates and assumptions reflect our best judgment based on currently known market
conditions and other factors relating to our operations and business environment, all of which are difficult to predict and many of which are
beyond our control.

      Although we believe our estimates and assumptions to be reasonable, they are inherently uncertain and involve a number of risks and
uncertainties that are beyond our control. In addition, management’s assumptions about future events may prove to be inaccurate. Management
cautions all readers that the forward-looking statements contained in this prospectus are not guarantees of future performance, and we cannot
assure any reader that those statements will be realized or the forward-looking events and circumstances will occur. Actual results may differ
materially from those anticipated or implied in the forward-looking statements due to the factors listed in the ―Risk Factors‖ and
―Management’s Discussion and Analysis of Financial Condition and Results of Operations‖ sections and elsewhere in this prospectus. All
forward-looking statements speak only as of the date of this prospectus. We do not intend to publicly update or revise any forward-looking
statements as a result of new information, future events or otherwise, except as required by law. These cautionary statements qualify all
forward-looking statements attributable to us or persons acting on our behalf.

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                                                             USE OF PROCEEDS

      We will receive net proceeds of approximately $39.1 million from our sale of 1,700,000 shares of common stock in this offering, based
on our assumed public offering price of $24.33 per share (the last sale price of our common stock as reported on The Nasdaq National Market
on March 15, 2006) after deducting the underwriting discount and estimated offering expenses payable by us. We will not receive any of the
net proceeds from the sale of shares by the selling stockholder.

      We intend to use the net proceeds from this offering to repay outstanding borrowings under our revolving credit facility. We entered into
our $150.0 million revolving credit facility with Fortis Capital Corp., as administrative agent, lead arranger and sole bookrunner, and a
syndicate of lenders, on January 13, 2006. The revolving credit facility matures on January 13, 2009. Loans under the revolving credit facility
bear interest at LIBOR plus a margin that can range from 2.0% to 3.0% or, at our option, the prime rate plus a margin that can range from 1.0%
to 2.0%, depending on the ratio of our outstanding senior debt to ―Adjusted EBITDA‖ as defined in the credit agreement. Our borrowings
under this revolving credit facility were used to fund a portion of the Big A Drilling acquisition and to repay in full borrowings under our term
loan with Merrill Lynch Capital and our revolving line of credit with International Bank of Commerce. At February 28, 2006, approximately
$57.0 million was outstanding under the revolving credit facility. See ―Liquidity and Capital Resources—Sources of Liquidity‖ for further
information regarding the revolving credit facility.

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                                                   PRICE RANGE OF COMMON STOCK

      Our common stock has been quoted on The Nasdaq National Market under the symbol ―BRNC‖ since August 16, 2005. The following
table sets forth for the indicated periods the high and low sale prices of our common stock as quoted on The Nasdaq National Market.

                                                                                                             High            Low

                Year Ending December 31, 2005:
                    Third Quarter (since August 16, 2005)                                                   $ 30.00        $ 18.00
                    Fourth Quarter                                                                          $ 29.10        $ 20.97
                Year Ending December 31, 2006:
                    First Quarter (through March 15, 2006)                                                  $ 32.00        $ 23.15

     On March 15, 2006, the last reported sale price of our common stock on The Nasdaq National Market was $24.33, and we had
approximately 6,900 beneficial holders of our common stock.

                                                              DIVIDEND POLICY

      We currently anticipate that we will retain all future earnings, if any, to finance the growth and development of our business. We do not
intend to pay cash dividends in the foreseeable future. Any payment of cash dividends will depend upon our financial condition, capital
requirements, earnings and other factors deemed relevant by our board of directors. In addition, the terms of our credit facility prohibit us from
paying dividends and making other distributions.

                                                                        24
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                                                                CAPITALIZATION

      The following table sets forth our cash and cash equivalents and capitalization as of December 31, 2005:

      •      on an actual basis;

      •      on a pro forma basis to give effect to (1) the Big A Drilling acquisition described in ―Management’s Discussion and Analysis of
             Financial Condition and Results of Operations—Liquidity and Capital Resources‖ and ―Business—General‖ and (2) borrowings
             under our new revolving credit facility and the application of the proceeds; and

      •      on a pro forma as adjusted basis to give further effect to our sale of common stock in this offering at an assumed offering price of
             $24.33 per share (the last sale price of our common stock as reported on The Nasdaq National Market on March 15, 2006) and the
             application of the net proceeds from this sale as described under the caption ―Use of Proceeds.‖

     You should read the information in this table in conjunction with the Bronco Drilling Company, Inc. Unaudited Pro Forma Combined
Consolidated Financial Statements, ―Selected Historical Financial Data,‖ ―Management’s Discussion and Analysis of Financial Condition and
Results of Operations‖ and the consolidated financial statements and related notes appearing elsewhere in this prospectus.

                                                                                             As of December 31, 2005

                                                                                                                             Pro Forma
                                                                              Actual            Pro Forma(1)                 As Adjusted

                                                                                         (in thousands, except share data)
          Cash and cash equivalents                                       $     17,039         $          9,702 (2)        $           9,702

          Total debt (including current maturities)                       $     51,825         $         62,825 (2)         $        23,750
          Stockholders’ equity (deficit):
               Common stock, par value $.01; 100,000,000 shares
                 authorized and 23,165,368 shares issued and
                 outstanding actual; 100,000,000 shares
                 authorized and 23,237,939 shares issued and
                 outstanding pro forma; 100,000,000 shares
                 authorized and 24,937,939 shares issued and
                 outstanding pro forma as adjusted                                 232                      232                         249
               Additional paid-in capital                                      238,557                  240,372                     279,430
               Accumulated earnings                                                547                      547                         547

              Total stockholders’ equity                                       239,336                  241,151                     280,226

                    Total capitalization                                  $ 291,161            $        303,976             $       303,976


(1)   On January 18, 2006, we consummated the Big A Drilling acquisition for a purchase price consisting of $16.3 million in cash and 72,571
      shares of our common stock valued at $25.01 per share, which was the closing price of our common stock on December 16, 2005, the
      date the purchase and sale agreement was executed. The cash portion of the purchase price was funded with a portion of the borrowings
      of $57.0 million under our new revolving credit facility. As further described in footnote 2 to this Capitalization table, the remaining
      borrowings under our new revolving credit facility were used to repay in full our term loan from Merrill Lynch Capital and borrowings
      under our revolving line of credit with International Bank of Commerce. The cash payment and borrowings are reflected in our Pro
      Forma column in the above Capitalization table as if the acquisition and the borrowings had occurred on December 31, 2005.

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(2)   On January 13, 2006, we entered into a $150.0 million revolving credit facility with Fortis Capital Corp., as administrative agent, lead
      arranger and sole bookrunner, and a syndicate of lenders. Administrative fees and issue costs were approximately $1.4 million. The
      revolving credit facility matures on January 13, 2009. Borrowings of $57.0 million under this new revolving credit facility were used to
      fund a portion of the Big A Drilling acquisition and to repay in full borrowings in the amount of $43.6 million including $0.6 million of
      interest under our term loan with Merrill Lynch Capital and borrowings in the amount of $3.0 million under our revolving line of credit
      with International Bank of Commerce. These borrowings and the application of the proceeds are reflected in the Pro Forma column in the
      above Capitalization table as if the borrowings and the application of the proceeds had occurred on December 31, 2005.

      The number of shares of our common stock to be outstanding immediately after this offering excludes 654,500 shares of our common
stock issuable upon the exercise of outstanding options at a weighted average exercise price of $19.55 per share, see ―Management’s
Discussion and Analysis of Financial Condition and Results of Operations—Liquidity and Capital Resources‖ and ―Business—General.‖

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                                                               SELECTED HISTORICAL FINANCIAL DATA

      The following table sets forth our selected historical financial data as of and for each of the years indicated. We derived the selected
historical financial data as of and for each of the years ended 2005, 2004, 2003 and 2002 from our historical audited consolidated financial
statements. We derived the selected historical financial data as of and for the year ended 2001 from our historical unaudited consolidated
financial statements. The unaudited information was prepared on a basis consistent with that used in preparing our audited consolidated
financial statements and includes all adjustments, consisting of normal and recurring items, that we consider necessary for a fair presentation of
the financial position and results of operations for the unaudited period. You should review this information together with ―Management’s
Discussion and Analysis of Financial Condition and Results of Operations‖ and consolidated historical financial statements and related notes
included elsewhere in this prospectus.
                                                                                                               Year Ended December 31,

                                                                                        2005            2004              2003            2002               2001

                                                                                                                                                          (Unaudited)
                                                                                                    (In thousands, except per share amounts)
Consolidated Statements of Operations Information:
Contract drilling revenues                                                          $ 77,885        $ 21,873          $ 12,533        $    3,115      $             592
Costs and expenses:
  Contract drilling                                                                     44,695          18,670            10,537           3,239                    711
  Depreciation and amortization                                                          9,143           3,695             1,985           1,122                    145
  General and administrative                                                             9,395           1,714             1,226             676                    174

      Total operating costs and expenses                                                63,233          24,079            13,748           5,037                 1,030

Income (loss) from operations                                                           14,652           (2,206 )          (1,215 )        (1,922 )                 (438 )

Other income (expense):
   Interest expense                                                                      (1,415 )         (285 )              (21 )              —                    —
   Loss from early extinguishment of debt                                                (2,062 )           —                  —                 —                    —
   Interest income                                                                          432             10                  3                 5                    2
   Other                                                                                     53             —                  —                 —                    —

      Total other income (expense)                                                       (2,992 )         (275 )              (18 )               5                     2

Income (loss) before income taxes                                                       11,660           (2,481 )          (1,233 )        (1,917 )                 (436 )
Income tax expense                                                                       6,529              285               317              —                      —

   Net income (loss)                                                                $    5,131      $    (2,766 )     $    (1,550 )   $    (1,917 )   $             (436 )

Income per common share—Basic                                                       $      0.32

Income per common share—Diluted                                                     $      0.31

Weighted average number of shares outstanding—Basic                                     16,259

Weighted average number of shares outstanding—Diluted                                   16,306

Pro Forma C Corporation Data: (1)
Historical income (loss) from operations before income taxes                        $ 11,660        $    (2,481 )     $    (1,233 )   $    (1,917 )   $             (436 )
Pro forma provision (benefit) for income taxes                                         4,396               (936 )            (465 )          (723 )                 (165 )

Pro forma income (loss) from operations                                             $    7,264      $    (1,545 )     $     (768 )    $    (1,194 )   $             (271 )

Pro forma income (loss) per common share—basic and diluted                          $     0.45      $    (0.12 )      $    (0.06 )    $    (0.09 )    $          (0.02 )
Weighted average pro forma shares outstanding—basic                                     16,259          13,360            13,360          13,360                13,360
Weighted average pro forma shares outstanding—diluted                                   16,306          13,360            13,360          13,360                13,360

Other Financial Data:
Calculation of EBITDA:
   Net income (loss)                                                                $    5,131      $    (2,766 )     $    (1,550 )   $    (1,917 )   $             (436 )
   Interest expense                                                                      1,415              285                21              —                      —
   Income tax expense                                                                    6,529              285               317              —                      —
   Depreciation and amortization                                                         9,143            3,695             1,985           1,122                    145

      EBITDA (2)                                                                        22,218      $    1,499        $      773      $     (795 )    $             (291 )



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                                                                                            Year Ended December 31,

                                                                   2005              2004                2003             2002            2001

                                                                                                                                      (Unaudited)
                                                                                                 (In thousands)
Consolidated Cash Flow Information:
Net cash provided (used) by:
  Operating activities                                        $      3,318       $     2,364         $ (1,914 )       $      (890 )   $      (447 )
  Investing activities (3)                                        (190,326 )         (19,511 )         (4,846 )           (12,879 )        (2,522 )
  Financing activities                                             202,908            16,623            7,798              14,103           3,260

                                                                                                 At December 31,

                                                                   2005              2004                2003             2002            2001

                                                                                                                                      (Unaudited)
                                                                                                 (In thousands)
Consolidated Balance Sheet Information:
Total current assets                                          $     53,953       $     8,118         $    5,682       $    1,495      $       608
Total assets                                                       330,520            90,143             71,920           15,629            2,985
Total debt                                                          51,825            18,100              4,300               —                —
Total liabilities                                                   91,184            39,340             21,218              620              161
Total members’ equity                                                   —             50,803             50,702           15,009            2,824
Total stockholders’ equity                                         239,336                —                  —                —                —

(1) Prior to the completion of our initial public offering in August 2005, we merged with Bronco Drilling Company, L.L.C., our predecessor
    company. Bronco Drilling, L.L.C. was a limited liability company treated as a partnership for federal income tax purposes. As a result,
    essentially all of its taxable earnings and losses were passed through to its members, and it did not pay federal income taxes at the entity
    level. Historical income taxes consist mainly of deferred income taxes on a taxable subsidiary, Elk Hill Drilling, Inc. Since we are a C
    corporation, for comparative purposes we have included a pro forma provision (benefit) for income taxes assuming we had been taxed as a
    C corporation in all periods prior to the merger.

(2) EBITDA is a non-GAAP financial measure equal to net income (loss), the most directly comparable GAAP financial measure, plus
    interest expense, income tax expense, depreciation and amortization. We have presented EBITDA because we use EBITDA as an integral
    part of our internal reporting to measure our performance and to evaluate the performance of our senior management. We consider
    EBITDA to be an important indicator of the operational strength of our business. EBITDA eliminates the uneven effect of considerable
    amounts of non-cash depreciation and amortization. A limitation of this measure, however, is that it does not reflect the periodic costs of
    certain capitalized tangible and intangible assets used in generating revenues in our business. Management evaluates the costs of such
    tangible and intangible assets and the impact of related impairments through other financial measures, such as capital expenditures,
    investment spending and return on capital. Therefore, we believe that EBITDA provides useful information to our investors regarding our
    performance and overall results of operations. EBITDA is not intended to be a performance measure that should be regarded as an
    alternative to, or more meaningful than, either net income as an indicator of operating performance or to cash flows from operating
    activities as a measure of liquidity. In addition, EBITDA is not intended to represent funds available for dividends, reinvestment or other
    discretionary uses, and should not be considered in isolation or as a substitute for measures of performance prepared in accordance with
    GAAP. The EBITDA measure presented in this prospectus may not be comparable to similarly titled measures presented by other
    companies, and may not be identical to corresponding measures used in our various agreements.

(3) In August 2003, we acquired 22 drilling rigs and drilling rig structures and components for an aggregate of $49.0 million. These
    transactions were funded directly by our equity holders. Accordingly, they have been accounted for as acquisitions by our equity holders
    followed by their contribution to us of the acquired assets. As a result, net cash used in investing activities for 2003 does not include the
    $33.5 million cash portion of the acquisition cost. See Note 2 to our consolidated financial statements appearing elsewhere in this
    prospectus.

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                                         MANAGEMENT’S DISCUSSION AND ANALYSIS OF
                                      FINANCIAL CONDITION AND RESULTS OF OPERATIONS

      The following discussion and analysis should be read in conjunction with the “Selected Historical Financial Data” and the consolidated
financial statements and related notes included elsewhere in this prospectus. This discussion contains forward-looking statements reflecting
our current expectations and estimates and assumptions concerning events and financial trends that may affect our future operating results or
financial position. Actual results and the timing of events may differ materially from those contained in these forward-looking statements due to
a number of factors, including those discussed in the sections entitled “Risk Factors” and “Cautionary Note Regarding Forward-Looking
Statements” appearing elsewhere in this prospectus.

Company Overview

      We earn our contract drilling revenues by drilling oil and natural gas wells for our customers. A majority of our wells have been drilled in
search of natural gas, which is the primary focus of our customers. We obtain our contracts for drilling oil and natural gas wells either through
competitive bidding or through direct negotiations with customers. Our drilling contracts generally provide for compensation on either a
daywork or footage basis. We have not historically entered into turnkey contracts and do not intend to enter into them, subject to changes in
market conditions, although it is possible that we may acquire such contracts in connection with future acquisitions. Contract terms we offer
generally depend on the complexity and risk of operations, the on-site drilling conditions, the type of equipment used and the anticipated
duration of the work to be performed. Although we currently have eighteen of our rigs operating under agreements with terms ranging from
one to two years, our contracts generally provide for the drilling of a single well and typically permit the customer to terminate on short notice.

      A significant performance measurement in our industry is operating rig utilization. We compute operating rig utilization rates by dividing
revenue days by total available days during a period. Total available days are the number of calendar days during the period that we have
owned the operating rig. Revenue days for each operating rig are days when the rig is earning revenues under a contract, i.e. when the rig
begins moving to the drilling location until the rig was released from the contract. On daywork contracts, during the mobilization period we
typically earn a fixed amount of revenue based on the mobilization rate stated in the contract. We begin earning our contracted daywork rate
when we begin drilling the well. Occasionally, in periods of increased demand, we will receive a percentage of the contracted dayrate during
the mobilization period. Such revenues are accounted for as mobilization fees.

      For the years ended December 31, 2005, 2004 and 2003, our rig utilization rates, revenue days and average number of operating rigs were
as follows:

                                                                                                            Year Ended December 31,

                                                                                                       2005              2004             2003

Utilization rates                                                                                          95 %              81 %             76 %
Revenue days                                                                                            5,781             2,733            1,898
Average number of operating rigs                                                                           17                 9                7

      The annual increases in the number of revenue days in each of 2005, 2004 and 2003 are attributable to the increases in the size of our
operating rig fleet and improvements in our rig utilization rate due to improved market conditions. Based on our plans to refurbish and deploy
our inventoried rigs and current market conditions, we anticipate continued growth in revenue days and stable utilization rates for the balance
of 2006.

     We devote substantial resources to maintaining, upgrading and expanding our rig fleet. We substantially completed the refurbishment of
seven rigs in 2005, and plan on refurbishing twelve inventoried rigs during 2006.

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Market Conditions in Our Industry

      The United States contract land drilling services industry is highly cyclical. Volatility in oil and natural gas prices can produce wide
swings in the levels of overall drilling activity in the markets we serve and affect the demand for our drilling services and the dayrates we can
charge for our rigs. The availability of financing sources, past trends in oil and natural gas prices and the outlook for future oil and natural gas
prices strongly influence the number of wells oil and natural gas exploration and production companies decide to drill.

     The following table depicts the prices for near month delivery contracts for crude oil and natural gas as traded on the NYMEX, as well as
the most recent Baker Hughes domestic land rig count, on the dates indicated:

                                                                                                         At December 31,

                                                                                                  2005          2004           2003

                Crude oil (Bbl)                                                               $    61.04      $ 43.45        $ 32.52
                Natural gas (MMbtu)                                                           $    11.23      $ 6.15         $ 6.19
                U.S. land rig count                                                                1,391        1,138          1,002

     On February 28, 2006, the closing prices for near month delivery contracts for crude oil and natural gas as traded on the NYMEX were
$61.41 per barrel and $6.71 per MMbtu, respectively. The Baker Hughes domestic land rig count as of February 24, 2006 was 1,436. Baker
Hughes is a large oil field services firm that has issued the rotary rig counts as a service to the petroleum industry since 1944.

      We believe capital spent on incremental natural gas production will be driven by an increase in hydrocarbon demand as well as shortages
in supply of natural gas. The Energy Information Administration recently estimated that U.S. consumption of natural gas exceeded domestic
production by 17% in 2004 and forecasts that U.S. consumption of natural gas will exceed U.S. domestic production by 24% in 2010. In
addition, a study published by the National Petroleum Council in September 2003 concluded from drilling and production data over the
preceding ten years that average ―initial production rates from new wells have been sustained through the use of advanced technology;
however, production declines from these initial rates have increased significantly; and recoverable volumes from new wells drilled in mature
producing basins have declined over time.‖ The report went on to state that ―without the benefit of new drilling, indigenous supplies have
reached a point at which U.S. production declines by 25% to 30% each year‖ and predicted that in ten years eighty percent of gas production
―will be from wells yet to be drilled.‖ We believe all of these factors tend to support a higher natural gas price environment, which should
create strong incentives for oil and natural gas exploration and production companies to increase drilling activity in the U.S. Consequently,
these factors may result in higher rig dayrates and rig utilization.

Critical Accounting Policies and Estimates

      Our discussion and analysis of our financial condition and results of operations is based upon our consolidated financial statements,
which have been prepared in accordance with accounting policies that are described in the notes to our consolidated financial statements. The
preparation of the consolidated financial statements requires management to make estimates and judgments that affect the reported amounts of
assets, liabilities, revenues and expenses, and related disclosure of contingent assets and liabilities. We continually evaluate our judgments and
estimates in determining our financial condition and operating results. Estimates are based upon information available as of the date of the
financial statements and, accordingly, actual results could differ from these estimates, sometimes materially. Critical accounting policies and
estimates are defined as those that are both most important to the portrayal of our financial condition and operating results and require
management’s most subjective judgments. The most critical accounting policies and estimates are described below.

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      Revenue and Cost Recognition —We earn our revenues by drilling oil and natural gas wells for our customers under daywork or footage
contracts, which usually provide for the drilling of a single well. We recognize revenues on daywork contracts for the days completed based on
the dayrate each contract specifies. Mobilization revenues and costs are deferred and recognized over the drilling days of the related drilling
contract. Individual contracts are usually completed in less than 120 days. We follow the percentage-of- completion method of accounting for
footage contract drilling arrangements. Under this method, drilling revenues and costs related to a well in progress are recognized
proportionately over the time it takes to drill the well. Percentage of completion is determined based upon the amount of expenses incurred
through the measurement date as compared to total estimated expenses to be incurred drilling the well. Mobilization costs are not included in
costs incurred for percentage-of-completion calculations. Mobilization costs on footage contracts and daywork contracts are deferred and
recognized over the days of actual drilling. Under the percentage-of- completion method, management estimates are relied upon in the
determination of the total estimated expenses to be incurred drilling the well. When estimates of revenues and expenses indicate a loss on a
contract, the total estimated loss is accrued.

      Our management has determined that it is appropriate to use the percentage-of-completion method to recognize revenue on our footage
contracts which is the predominant practice in the industry. Although our footage contracts do not have express terms that provide us with
rights to receive payment for the work that we perform prior to drilling wells to the agreed upon depth, we use this method because, as
provided in applicable accounting literature, we believe we achieve a continuous sale for our work-in-progress and we believe, under
applicable state law, we ultimately could recover the fair value of our work-in-progress even in the event we were unable to drill to the agreed
upon depth in breach of the applicable contract. However, ultimate recovery of that value, in the event we were unable to drill to the agreed
upon depth in breach of the contract, would be subject to negotiations with the customer and the possibility of litigation.

      We are entitled to receive payment under footage contracts when we deliver to our customer a well completed to the depth specified in
the contract, unless the customer authorizes us to drill to a shallower depth. Since inception, we have completed all our footage contracts.
Although our initial cost estimates for footage contracts do not include cost estimates for risks such as stuck drill pipe or loss of circulation, we
believe that our experienced management team, our knowledge of geologic formations in our areas of operations, the condition of our drilling
equipment and our experienced crews enable us to make reasonably dependable cost estimates and complete contracts according to our drilling
plan. While we do bear the risk of loss for cost overruns and other events that are not specifically provided for in our initial cost estimates, our
pricing of footage contracts takes such risks into consideration. When we encounter, during the course of our drilling operations, conditions
unforeseen in the preparation of our original cost estimate, we immediately adjust our cost estimate for the additional costs to complete the
contracts. If we anticipate a loss on a contract in progress at the end of a reporting period due to a change in our cost estimate, we immediately
accrue the entire amount of the estimated loss, including all costs that are included in our revised estimated cost to complete that contract, in
our consolidated statement of operations for that reporting period. During 2005, we experienced no losses on the five footage contracts we
completed. We are more likely to encounter losses on footage contracts in years in which revenue rates are lower for all types of contracts.

      Revenues and costs during a reporting period could be affected by contracts in progress at the end of a reporting period that have not been
completed before our financial statements for that period are released. We had no footage contracts in progress at December 31, 2004 or
December 31, 2005. At December 31, 2005, our contract drilling in progress totaled $1.2 million, all of which relates to the revenue recognized
but not yet billed or costs deferred on daywork contracts in progress at December 31, 2005.

      We accrue estimated contract costs on footage contracts for each day of work completed based on our estimate of the total costs to
complete the contract divided by our estimate of the number of days to complete the contract. Contract costs include labor, materials, supplies,
repairs and maintenance and operating overhead allocations. In addition, the occurrence of uninsured or under-insured losses or operating cost
overruns on our

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footage contracts could have a material adverse effect on our financial position and results of operations. Therefore, our actual results could
differ significantly if our cost estimates are later revised from our original estimates for contracts in progress at the end of a reporting period
that were not completed prior to the release of our financial statements.

      Accounts Receivable —We evaluate the creditworthiness of our customers based on their financial information, if available, information
obtained from major industry suppliers, current prices of oil and natural gas and any past experience we have with the customer. Consequently,
an adverse change in those factors could affect our estimate of our allowance for doubtful accounts. In some instances, we require new
customers to establish escrow accounts or make prepayments. We typically invoice our customers at 30-day intervals during the performance
of daywork contracts and upon completion of the daywork contract. Footage contracts are invoiced upon completion of the contract. Our
typical contract provides for payment of invoices in 10 to 30 days. We generally do not extend payment terms beyond 30 days and have not
extended payment terms beyond 60 days for any of our contracts in the last three years. Our allowance for doubtful accounts was $330,000 and
$146,000 at December 31, 2005 and December 31, 2004, respectively. Any allowance established is subject to judgment and estimates made by
management. We determine our allowance by considering a number of factors, including the length of time trade accounts receivable are past
due, our previous loss history, our customer’s current ability to pay its obligation to us and the condition of the general economy and the
industry as a whole. We write off specific accounts receivable when they become uncollectible and payments subsequently received on such
receivables are credited to the allowance for doubtful accounts.

       If a customer defaults on its payment obligation to us under a footage contract, we would need to rely on applicable law to enforce our
lien rights, because our footage contracts do not expressly grant to us a security interest in the work we have completed under the contract and
we have no ownership rights in the work-in-progress or completed drilling work, except any rights arising under the applicable lien statute on
foreclosure. If we were unable to drill to the agreed on depth in breach of the contract, we might also need to rely on equitable remedies outside
of the contract, including quantum meruit, available in applicable courts to recover the fair value of our work-in-progress under a footage
contract.

      Asset Impairment and Depreciation —We assess the impairment of property and equipment, intangible assets and goodwill whenever
events or circumstances indicate that the carrying value may not be recoverable. Factors that we consider important and could trigger an
impairment review would be our customers’ financial condition and any significant negative industry or economic trends. More specifically,
among other things, we consider our contract revenue rates, our rig utilization rates, cash flows from our drilling rigs, current oil and natural
gas prices, industry analysts’ outlook for the industry and their view of our customers’ access to debt or equity and the trends in the price of
used drilling equipment observed by our management. If a review of our drilling rigs, intangible assets and goodwill indicate that our carrying
value exceeds the estimated undiscounted future cash flows, we are required under applicable accounting standards to write down the drilling
equipment, intangible assets and goodwill to its fair market value. A one percent write-down in the cost of our drilling equipment, intangible
assets and goodwill, at December 31, 2005, would have resulted in a corresponding decrease in our net income of approximately $1.7 million
for the year ended December 31, 2005.

      Our determination of the estimated useful lives of our depreciable assets, directly affects our determination of depreciation expense and
deferred taxes. A decrease in the useful life of our drilling equipment would increase depreciation expense and reduce deferred taxes. We
provide for depreciation of our drilling rigs, transportation and other equipment on a straight-line method over useful lives that we have
estimated and that range from three to fifteen years after the rig was placed into service. We record the same depreciation expense whether an
operating rig is idle or working. Depreciation is not recorded on an inventoried rig until placed in service. Our estimates of the useful lives of
our drilling, transportation and other equipment are based on our experience in the drilling industry with similar equipment.

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     We capitalize interest cost as a component of drilling rigs refurbished for our own use. During the years ended December 31, 2005 and
2004, we capitalized approximately $1.2 million and $470,000 of interest incurred, respectively.

       Deferred Taxes —We provide deferred taxes for net operating loss carryforwards and for the basis difference in our property and
equipment between financial reporting and tax reporting purposes. For property and equipment, basis differences arise from differences in
depreciation periods and methods and the value of assets acquired in a business acquisition where we acquire the stock in an entity rather than
just its assets. For financial reporting purposes, we depreciate the various components of our drilling rigs and refurbishments over fifteen years,
while federal income tax rules require that we depreciate drilling rigs and refurbishments over five years. Therefore, in the first five years of
our ownership of a drilling rig, our tax depreciation exceeds our financial reporting depreciation, resulting in our providing deferred taxes on
this depreciation difference. After five years, financial reporting depreciation exceeds tax depreciation, and the deferred tax liability begins to
reverse.

      Other Accounting Estimates —Our other accrued expenses as of December 31, 2005 and 2004 included accruals of approximately
$16,000 and $94,000, respectively, for costs under our workers’ compensation insurance. We have a deductible of $250,000 per covered
accident under our workers’ compensation insurance. Our insurance policy requires us to maintain a letter of credit to cover payments by us of
that deductible. As of December 31, 2005, we had a $2.2 million letter of credit for which we have a deposit account in the amount of $2.2
million collateralizing the letter of credit. We accrue for these costs as claims are incurred based on cost estimates established for each claim by
the insurance companies providing the administrative services for processing the claims, including an estimate for incurred but not reported
claims, estimates for claims paid directly by us, our estimate of the administrative costs associated with these claims and our historical
experience with these types of claims.

Year in Review Highlights

      The following are recent highlights that have impacted our results of operations for the year ended December 31, 2005:

      •    On August 19, 2005, we closed our initial public offering of a total of 5,865,000 shares of common stock at a price of $17.00 per
           share. A total of 5,715,000 shares were sold by us and 150,000 shares were sold by our principal stockholder. We received net
           proceeds of approximately $89.0 million.

      •    On November 2, 2005, we completed a follow-on public offering of 4,025,000 shares of our common stock at a price of $23.00 per
           share. We received net proceeds of approximately $87.0 million.

      •    During 2005, we acquired 28 rigs and related structures, equipment and components. We also completed the acquisition of 18 trucks
           and related equipment.

Recent Developments

      Since December 31, 2005, we have completed the following:

      •    On January 13, 2006, we entered into a $150.0 million revolving credit facility with Fortis Capital Corp., as administrative agent,
           lead arranger and sole bookrunner, and a syndicate of lenders, which include The Royal Bank of Scotland plc, The CIT
           Group/Business Credit, Inc., Calyon Corporate and Investment Bank, Merrill Lynch Capital, Comerica Bank and Caterpillar
           Financial Services Corporation. The revolving credit facility matures on January 13, 2009.

      •    On January 18, 2006, we completed the acquisition of six land drilling rigs and certain other assets, including heavy haul trucks and
           excess rig equipment and inventory, from Big A Drilling.

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Results of Operations

      Year Ended December 31, 2005 Compared to Year Ended December 31, 2004

       Contract Drilling Revenue. For the year ended December 31, 2005, we reported contract drilling revenues of approximately $77.9
million, a 256% increase from revenues of $21.9 million for 2004. The increase is primarily due to increases in dayrates, revenue days,
utilization and average number of rigs working for the year ended December 31, 2005 as compared to 2004. Average dayrates for our drilling
services increased $5,534, or 70%, to $13,453 for the year ended December 31, 2005 from $7,919 in 2004. Revenue days increased 112% to
5,781 days for the year ended December 31, 2005 from 2,733 days during 2004. Our utilization increased to 95% from 81%, and our average
number of operating rigs increased to 17 from nine, or 89%, for the year ended December 31, 2005 as compared to 2004. The increase in the
number of revenue days for the year ended December 31, 2005 as compared to 2004 is attributable to the increase in the size of our operating
rig fleet and improvements in our rig utilization rate due to improved market conditions. Based on our plan to refurbish and deploy our
inventoried rigs and current market conditions, we anticipate continued growth in revenue days and stable utilization rates for the balance of
2006.

       Contract Drilling Expense. Direct rig cost increased $26.0 million to $44.7 million for the year ended December 31, 2005 from $18.7
million in 2004. This 139% increase is primarily due to the increases in revenue days, average number of operating rigs in our fleet and in rig
utilization for the year ended December 31, 2005 as compared to 2004. As a percentage of contract drilling revenue, drilling expense decreased
to 57% for the year ended December 31, 2005 from 85% in 2004 for the reasons discussed above.

      Depreciation and Amortization Expense. Depreciation and amortization expense increased $5.4 million to $9.1 million for year ended
December 31, 2005 from $3.7 million in 2004. The increase is primarily due to the 203% increase in fixed assets, including the refurbishment
of seven additional rigs from our inventory, the Strata and Hays acquisitions, incremental increases in ancillary equipment as compared to 2004
and, to a lesser extent, amortization of intangible assets from our acquisitions.

      General and Administrative Expense. General and administrative expense increased $7.7 million, or 453%, to $9.4 million for the year
ended December 31, 2005 from $1.7 million in 2004. This primarily resulted from a $5.1 million increase in payroll costs, a $184,000 increase
in administrative reimbursement, an increase of $52,000 in bad debt expense, an increase of $589,000 in stock compensation expense, and
lease expense and professional fee increases of $181,000 and $540,000, respectively. The increase in payroll costs to $5.8 million for the year
ended December 31, 2005 from $672,000 in 2004 is primarily due to payments made by Bronco Drilling Holdings, L.L.C. to our former
President and Chief Operating Officer, Steve Hale, following successful completion of our initial public offering. Although we did not make
the payment, we are required to account for these payments as a capital contribution to us in the amount of $4.0 million and compensation
expense of $4.0 million. The remaining increase in payroll costs is due to our increased employee count and related wage increases during
2005. The increase in administrative reimbursement to $299,000 for the year ended December 31, 2005 from $115,000 in 2004 is due to the
new administrative services agreement entered into with Gulfport Energy Corporation, our affiliate, and the increased level of services
provided thereunder. The increase in lease expense to $358,000 for the year ended December 31, 2005 from $177,000 in 2004 is primarily due
to the lease of additional yards that were part of the Elk Hill acquisition. The increase in professional fees to $620,000 for the year ended
December 31, 2005 from $80,000 in 2004 is due to an increase in audit and legal expense. The remaining increase in compensation expense is
due to our increased employee count resulting from both organic growth and the Strata, Hays, Eagle and Thomas acquisitions, as well as
selected wage increases.

      Interest Expense. Interest expense increased $1.1 million to $1.4 million for the year ended December 31, 2005 from $285,000 in 2004.
The increase is due to an increase in average debt outstanding. We capitalized $1.2 million of interest for the year ended December 31, 2005 as
compared to $470,000 in 2004 as part of our rig refurbishment program. We also incurred $2.1 million in expense related to the early
extinguishment of debt

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associated with the payoff of our credit facility with General Electric Capital Corporation, or GECC, and our loan with Theta Investors, L.L.C.

      Income Tax Expense . We recorded an income tax expense of $6.5 million for the year ended December 31, 2005. This compares to an
income tax expense of $285,000 in 2004. This increase is due mainly to our conversion from a limited liability company to a taxable entity in
August 2005 in connection with our initial public offering, which resulted in a liability and expense of approximately $4.4 million at the time
of the initial public offering. This is partially offset by the net operating loss that we recognized in the third quarter related to several
non-recurring items which include the $4.0 million payment made to our former President and Chief Operating Officer and the $2.1 million
loss on the early extinguishment of debt.

      Year Ended December 31, 2004 Compared to Year Ended December 31, 2003

      Contract Drilling Revenue. For the year ended December 31, 2004, we reported contract drilling revenues of $21.9 million, a 75%
increase from revenues of $12.5 million during 2003. The increase is primarily due to increases in dayrates, revenue days, utilization and
average number of rigs working for the year ended December 31, 2004 as compared to 2003. Average dayrates for our drilling services
increased $1,370, or 21%, to $7,919 for contracts completed in the year ended December 31, 2004 from $6,549 in 2003. Revenue days
increased 44% to 2,733 days for the year ended December 31, 2004 from 1,898 days during 2003. Our average number of operating rigs
increased to nine from seven, or 29%, for the year ended December 31, 2004 as compared to 2003. The increase in the number of revenue days
in 2004 as compared to 2003 is attributable to the increase in the size of our operating rig fleet and improvements in our rig utilization rate due
to improved market conditions.

      Contract Drilling Expense. Direct rig cost increased $8.1 million to $18.7 million for the year ended December 31, 2004 from $10.5
million in 2003. The 77% increase is primarily due to the increases in revenue days, average number of rigs in our fleet and rig utilization in
2004 as compared to 2003. As a percentage of contract drilling revenue, drilling expense increased to 85% in 2004 from 84% in 2003.

      Depreciation Expense. Depreciation expense increased $1.7 million to $3.7 million for the year ended December 31, 2004 from $2.0
million in 2003. The increase is primarily due to the 28% increase in fixed assets, including the deployment of four additional rigs during 2004,
as well as incremental increases in ancillary equipment as compared to 2003.

      General and Administrative Expense. General and administrative expense increased $488,000, or 40%, to $1.7 million for the year
ended December 31, 2004 from $1.2 million in 2003. This primarily resulted from a $303,000 increase in payroll costs and lease expense and
professional fee increases of $75,000 and $77,000, respectively. The increase in payroll costs to $672,000 for the year ended December 31,
2004 from $369,000 in 2003 is due to our increased employee count and related wage increases during 2004. The increase in lease expense to
$177,000 for the year ended December 31, 2004 from $102,000 in 2003 is due to the lease of additional yards that were part of the Elk Hill
acquisition. The increase in professional fees to $80,000 for the year ended December 31, 2004 from $3,000 in 2003 is due to an increase in
audit and legal expense.

      Interest Expense. Interest expense increased $263,000 to $285,000 for the year ended December 31, 2004 from $21,000 in 2003. The
increase is due to an increase in average debt outstanding during 2004 under our credit facility with GECC that we entered into on
December 26, 2003. We capitalized $470,000 of interest during 2004 as part of our rig refurbishment program.

     Deferred Tax Expense. Deferred tax expense decreased by $32,000, or 10%, to $285,000 for the year ended December 31, 2004 from
$317,000 in 2003. The decrease in deferred tax expense is due to a reduction in income by our taxable subsidiary Elk Hill for the year ended
December 31, 2004 as compared to 2003.

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Liquidity and Capital Resources

      Operating Activities . Net cash provided by operating activities was $3.3 million in 2005 as compared to $2.4 million in 2004, and $1.9
million used in 2003. The increase of $900,000 from 2005 to 2004 was primarily due to increased cash receipts from customers, partially offset
by higher cash payments to employees and suppliers. The change from 2003 to 2004 was primarily attributable to placing refurbished drilling
rigs acquired in 2003 in service.

       Investing Activities . We use a significant portion of our cash flows from operations and financing activities for acquisitions and for the
refurbishment of our rigs. We used cash for investing activities of $190.3 million for 2005 as compared to approximately $19.5 million for
2004, and $4.8 million for 2003. Of this $190.3 million, approximately $135.2 million was used for acquisitions made during 2005 and related
transaction costs, $43.8 million was used to refurbish drilling rigs and $1.5 million was placed in a restricted account as security for a letter of
credit issued to our workers’ compensation insurance carrier. In August 2003, we acquired 22 drilling rigs and drilling rig structures and
components for $33.5 million in cash plus the assumption of $15.5 million of deferred tax liabilities. The cash portion of the purchase price was
funded directly by our equity holders. Accordingly, the transaction has been accounted for as an acquisition by our equity holders followed by
their contribution to us of the acquired assets. As a result, net cash used in investing activities for 2003 does not include this $33.5 million. See
Note 2 to our financial statements appearing elsewhere in this prospectus. Also in 2003, we refurbished one of our rigs at a cost of
approximately $2.2 million. In 2004, we refurbished four drilling rigs at an aggregate cost of approximately $13.0 million.

      Financing Activities . Our cash flows provided by financing activities were $202.9 million for 2005 as compared to $16.6 million for
2004, and $7.8 million for 2003. Our net cash provided by financing activities for 2005 related to net proceeds of approximately $176.0 million
from our initial and follow-on public offerings, borrowings of $43.0 million under our credit agreement with Merrill Lynch, borrowings of
$68.0 million from Solitair LLC, Theta Investors LLC, and Alpha Investors LLC, entities controlled by Wexford, borrowings of $7.5 million
from GECC, and borrowings of $1.2 million from International Bank of Commerce, partially offset by principal payments on borrowings of
$23.8 million to GECC, $68.0 million to Solitair LLC and Alpha Investors LLC, and capital contributions of $1.5 million from entities
controlled by Wexford. For 2004, our net cash provided by financing activities related to $15.0 million borrowed under our credit facility with
GECC, borrowings of $500,000 from International Bank of Commerce, principal payments of $1.7 million to GECC, and capital contributions
of $2.9 million from entities controlled by Wexford. For 2003, our net cash provided by financing activities related to capital contributions of
$3.7 million from entities controlled by Wexford, borrowings of $3.0 million under our credit facility with GECC and proceeds of $1.3 million
from a note payable to International Bank of Commerce.

      Sources of Liquidity . Our primary sources of liquidity are cash from operations and debt and equity financing.

      Debt Financing . On December 26, 2003, we entered into a credit facility with GECC which provided for term loan advances of up to
$12.0 million. At September 24, 2004 and April 22, 2005, we amended our credit facility with GECC to increase the maximum amount of the
terms loans to $18.0 million and then to $25.5 million, respectively. Borrowings under this facility bore interest at a rate equal to LIBOR plus
5.0% and were secured by substantially all of our property and assets, including our drilling rigs and associated equipment, and ownership
interests in our subsidiaries, but excluding cash and accounts receivable. Draws on the facility were required to be in $2.5 million increments
each with a five-year term. Payments of principal and accrued but unpaid interest were due on the first day of each month. This credit facility,
which was to mature on October 1, 2010, was repaid in full on August 29, 2005 with a portion of the proceeds from our initial public offering
and the credit facility was terminated.

     On July 1, 2004, we entered into a revolving line of credit with International Bank of Commerce with a borrowing base of the lesser of
$2.0 million or 80% of current receivables. Borrowings under this line bore

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interest at a rate equal to the greater of 4.0% or JPMorgan Chase prime (effective rate of 7.25% at December 31, 2005). Accrued but unpaid
interest was payable monthly. On January 1, 2005, we amended our line of credit with International Bank of Commerce to increase the
borrowing base to the lesser of $3.0 million or 80% of current receivables. The line of credit had a maturity date of November 1, 2006. It was
repaid in full in January 2006 with a portion of the proceeds from our new revolving credit facility and then terminated.

      On February 15, 2005, we entered into a $5.0 million revolving credit facility with Solitair LLC, an entity controlled by Wexford.
Borrowings under this facility bore interest at a rate equal to LIBOR plus 5.0%. Payment of principal and accrued but unpaid interest were due
on the maturity date of the credit facility which was the later of (1) six months after the actual maturity date of our credit facility with GECC
and (2) December 1, 2010. We repaid this facility in full on August 22, 2005 with a portion of the proceeds from our initial public offering and
the facility was terminated.

       In July 2005, we acquired all of the membership interests in Strata Drilling, L.L.C. and Strata Property, L.L.C. and a related rig yard for
an aggregate of $20.0 million, of which $13.0 million was paid in cash and $7.0 million paid in the form of promissory notes issued to the
sellers. We funded the cash portion of the purchase price with a $13.0 million loan from Alpha Investors LLC, an entity controlled by Wexford.
The outstanding principal balance of the loan plus accrued but unpaid interest was due in full upon the earlier to occur of the completion of our
initial public offering and the maturity of the loan on July 1, 2006. We repaid this loan in full on August 22, 2005 with a portion of the
proceeds from our initial public offering. Borrowings under our loan with Alpha bore interest at a rate equal to LIBOR plus 5% until September
30, 2005, and thereafter were to bear interest at a rate equal to LIBOR plus 7.5%. The $7.0 million original aggregate principal balance of the
promissory notes issued to the sellers was automatically reduced by the amount of any costs and expenses we paid in connection with the
refurbishment of one of the rigs we acquired from the sellers. The amount due on these notes, net of costs and expenses paid by us, was $4.5
million at December 31, 2005. The outstanding balance of the loan was paid in full on January 5, 2006 upon completion of the refurbishment of
this rig.

        On September 19, 2005, we entered into a term loan and security agreement with Merrill Lynch Capital, a division of Merrill Lynch
Business Financial Services, Inc. The term loan provided for a term installment loan in an aggregate amount not to exceed $50.0 million and
provided for a commitment by Merrill Lynch to advance funds from time to time until December 31, 2005. The outstanding balance under the
term loan could not exceed 60% of the net orderly liquidation value of our operating land drilling rigs. On September 19, 2005, we borrowed
$43.0 million under the term loan. A portion of these borrowings, together with proceeds from our initial public offering, were used to fund the
Eagle acquisition. The term loan bore interest on the outstanding principal balance at a variable per annum rate equal to LIBOR plus 271 basis
points (7.1% at December 31, 2005). For the period from September 19, 2005 to January 1, 2006, interest only was payable monthly on the
outstanding principal balance. Commencing February 1, 2006, the outstanding principal and interest on the term loan were payable in sixty
consecutive monthly installments, each in an amount equal to one sixtieth of the outstanding principal balance on January 1, 2006 plus accrued
interest on the outstanding principal balance. The maturity date was January 1, 2011. Our obligations under the term loan were secured by a
first lien and security interest on substantially all of our assets and were guaranteed by each of our principal subsidiaries. The term loan
included usual and customary negative covenants and events of default for loan agreements of this type. The term loan also required us to meet
certain financial covenants, including maintaining a minimum Fixed Charge Coverage Ratio and a maximum Total Debt to EBITDA Ratio.
This term loan was repaid in full in January 2006 with a portion of the proceeds from our new revolving credit facility and the term loan was
terminated.

      On October 14, 2005, we entered into a loan agreement with Theta Investors, LLC, an entity controlled by Wexford, for purposes of
funding a portion of the purchase price for the Thomas acquisition. The Theta loan provided maximum aggregate borrowings of up to $60.0
million, which borrowings bore interest at a rate equal to LIBOR plus 400 basis points until December 15, 2005 and, thereafter, at a rate equal
to LIBOR plus 600 basis points. Payment of principal and accrued but unpaid interest was due on October 15, 2006. Our obligations under the
Theta loan were guaranteed by each of our principal subsidiaries. We borrowed $50.0 million under this loan

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on October 14, 2005. We repaid this facility in full on November 3, 2005 with a portion of the proceeds from our follow-on public offering,
which closed November 2, 2005.

      On January 13, 2006, we entered into a $150.0 million revolving credit facility with Fortis Capital Corp., as administrative agent, lead
arranger and sole bookrunner, and a syndicate of lenders, which include The Royal Bank of Scotland plc, The CIT Group/Business Credit, Inc.,
Calyon Corporate and Investment Bank, Merrill Lynch Capital, Comerica Bank and Caterpillar Financial Services Corporation. The revolving
credit facility matures on January 13, 2009. Loans under the revolving credit facility bear interest at LIBOR plus a margin that can range from
2.0% to 3.0% or, at our option, the prime rate plus a margin that can range from 1.0% to 2.0%, depending on the ratio of our outstanding senior
debt to ―Adjusted EBITDA‖ as defined in the credit agreement. Our borrowings under this revolving credit facility were used to fund a portion
of the Big A Drilling acquisition and to repay in full all outstanding borrowings under our term loan with Merrill Lynch Capital and our
revolving line of credit with International Bank of Commerce.

      The revolving credit facility also provides for a quarterly commitment fee of 0.5% per annum of the unused portion of the revolving
credit facility, and fees for each letter of credit issued under the facility. Our subsidiaries have guaranteed the loans and other obligations under
the revolving credit facility. The obligations under the revolving credit facility and the related guarantees are secured by a first priority security
interest in substantially all of our assets, as well as the shares of capital stock of our direct and indirect subsidiaries.

      The revolving credit facility contains customary covenants for facilities of such type, including among other things covenants that restrict
our ability to make capital expenditures, incur indebtedness, incur liens, dispose of property, repay debt, pay dividends, repurchase shares and
make certain acquisitions. The financial covenants are a minimum fixed charge coverage ratio of 1.75 to 1.00 and a maximum total leverage
ratio of 2.00 to 1.00. The revolving credit facility provides for mandatory prepayments under certain circumstances as more fully discussed in
the revolving credit facility. The revolving credit facility contains various events of default, including failure to pay principal and interest when
due, breach of covenants, materially incorrect representations, default under certain other agreements, bankruptcy or insolvency, the occurrence
of specified ERISA events, entry of enforceable judgments against us in excess of $3.0 million not stayed, and the occurrence of a change of
control. If an event of default occurs, all commitments under the revolving credit facility may be terminated and all of our obligations under the
revolving credit facility could be accelerated by the lenders, causing all loans outstanding (including accrued interest and fees payable
thereunder) to be declared immediately due and payable.

      Issuances of Equity. Our equity holders contributed capital in the amounts of $1.5 million during 2005, and $2.9 million during 2004.

       In August 2005, we completed our initial public offering of a total of 5,865,000 shares of common stock at a price of $17.00 per share. In
the offering, a total of 5,715,000 shares were sold by us and 150,000 shares were sold by Wexford. We received net proceeds of approximately
$89.0 million. We used a portion of these proceeds to repay in full our loans from Alpha and Solitair and all borrowings under our credit
facility with GECC.

      Under the terms of an agreement between Bronco Drilling Holdings, L.L.C. and Steven C. Hale, our former President and Chief
Operating Officer, following successful completion of our initial public offering Mr. Hale was entitled to receive the sum of $2.0 million and
shares of our common stock having a market value of $2.0 million based on the initial public offering price. These payments were made by
Bronco Drilling Holdings and not by us. We accounted for these payments as a capital contribution to us in the amount of $4.0 million and
compensation expense in the amount of $4.0 million during the third quarter of 2005, the period in which such obligations were incurred.

      On November 2, 2005, we received net proceeds of $87.5 million from a follow-on public offering of 4,025,000 shares of our common
stock at a price of $23.00 per share. We repaid the Theta facility in full on November 3, 2005 with a portion of the proceeds from that offering.

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     In connection with our acquisitions of Hays Trucking, Inc. and Big A Drilling, we issued 65,368 and 72,571 shares of our common stock,
respectively. See ―—Capital Expenditures‖ below.

       Capital Expenditures. In August 2003, our founders purchased all of the outstanding stock of Elk Hill Drilling, Inc. and certain drilling
rig structures and components from an affiliate of Elk Hill, U.S. Rig & Equipment, for $33.5 million in cash plus the assumption of $15.5
million of deferred tax liabilities and contributed the assets and liabilities to us. In these transactions, we acquired drilling rigs and inventoried
structures and components which, with refurbishment and upgrades, could be used to assemble 22 drilling rigs. At the date of its acquisition,
Elk Hill had no customers, employees, operations or operational drilling rigs. For accounting purposes, the Elk Hill and U.S. Rig and
Equipment acquisitions were treated as acquisitions by our members and then contributions to us. In November 2003, we completed the
refurbishment of a 1,400-horsepower electric drilling rig, which we designated as Rig No. 16. We incurred approximately $2.2 million in
refurbishment costs for this rig before it was mobilized to Southern Oklahoma in November 2003. Acquisitions and refurbishment expenditures
in 2003 were funded through capital contributions from our equity holders.

      In March 2004, we completed the refurbishment of a 1,500-horsepower electric drilling rig, which we designated as Rig No. 12. We
incurred approximately $2.3 million in refurbishment costs for this rig which we financed with borrowings under our GECC credit facility. We
mobilized Rig No. 12 to Grayson County, Texas in March 2004.

      In May 2004, we completed the refurbishment of a 1,000-horsepower electric drilling rig, which we designated as Rig No. 11. We
incurred approximately $2.7 million in refurbishment costs for this rig. We mobilized Rig No. 11 to Southern Oklahoma in May 2004. In
August 2004, we completed the refurbishment of a 1,000-horsepower electric drilling rig, which we designated as Rig No. 10. We incurred
approximately $3.2 million in refurbishment costs for this rig. We mobilized Rig No. 10 to Western Oklahoma in August 2004. In December
2004, we completed the refurbishment of a 2,000-horsepower electric drilling rig, which we designated as Rig No. 18. We incurred
approximately $4.8 million in refurbishment costs for this rig. We mobilized Rig No. 18 to Eastern Oklahoma in December 2004. Our
refurbishment costs for these rigs were financed with borrowings under our GECC credit facility.

      In March 2005, we completed the refurbishment of a 1,200-horsepower electric drilling rig, which we designated as Rig No. 14. We
incurred approximately $4.8 million in refurbishment costs for this rig which we financed with borrowings under our GECC credit facility. We
mobilized Rig No. 14 to Southern Oklahoma in March 2005.

      In July 2005, we completed the refurbishment of a 2,500-horsepower electric drilling rig, which we designated as Rig No. 19. We
incurred approximately $6.6 million in refurbishment costs for this rig which we financed with borrowings under our GECC credit facility. We
mobilized Rig No. 19 to Southern Oklahoma in July 2005.

      In July 2005, we acquired three drilling rigs of 650, 800 and 1,000 horsepower, and related inventory, equipment and components,
through our acquisitions of Strata Drilling, L.L.C. and Strata Property, L.L.C., together with a related rig yard, for an aggregate of $20.0
million. The acquisitions were funded with borrowings of $13.0 million from Alpha Investors LLC, an entity controlled by Wexford, and our
delivery of promissory notes for an aggregate of $7.0 million. The outstanding balance of this note was paid in full in January 2006.

      In August 2005, we completed the refurbishment of a 950-horsepower mechanical drilling rig, which we designated as Rig No. 4. We
incurred approximately $4.5 million in refurbishment costs for this rig which we financed with borrowings under our GECC credit facility. We
mobilized Rig No. 4 to the Piceance Basin in Colorado in September 2005.

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      In September 2005, we acquired all the outstanding common stock of Hays Trucking, Inc. for $3.0 million in cash and 65,368 shares of
our common stock. In this acquisition, we acquired 18 trucks used to mobilize our rigs to contracted drilling locations.

       On October 3, 2005, we purchased 12 rigs from Eagle Drilling, L.L.C. and two of its affiliates. The acquisition involved five operating
rigs, seven inventoried rigs and equipment and parts for a purchase price of approximately $50.0 million plus approximately $500,000 of
related transaction costs. We funded this acquisition with borrowings under our Merrill Lynch term loan and a portion of the proceeds from our
initial public offering.

      On October 14, 2005, we purchased 13 rigs from Thomas Drilling Co. The acquisition involved nine operating rigs, two rigs currently
under construction, two inventoried rigs, and excess rig equipment and parts for a purchase price of $68.0 million plus approximately $2.6
million of related net transaction costs. In connection with the Thomas acquisition, we leased an additional rig refurbishment yard for a six
month term, with the right to extend the term for an additional three years. We also obtained an option to purchase the yard at any time during
the term for $175,000. We funded $50.0 million of the purchase price with borrowings under our Theta loan and the remainder with a portion
of the proceeds from our initial public offering.

      In October 2005, we completed the refurbishment of a 1,000-horsepower electric drilling rig, which we designated as Rig No. 8. We
incurred approximately $6.0 million in refurbishment costs for this rig which we financed with proceeds from our initial public offering. We
mobilized Rig No. 8 to the Williston Basin in North Dakota in November 2005.

      In January 2006, we completed the refurbishment of a 1,700-horsepower electric drilling rig, which we designated Rig No. 17. We
incurred approximately $6.0 million in refurbishment costs for this rig which we financed with proceeds from our November 2005 follow-on
offering. We mobilized Rig No. 17 to West Oklahoma in January 2006.

      In January 2006, we completed the refurbishment of a 1,200-horsepower electric drilling rig, which we designated Rig No. 15. We
incurred approximately $6.4 million in refurbishment costs for this rig which we financed with proceeds from our November 2005 follow-on
offering. We mobilized Rig No. 15 to East Texas in January 2006.

      In January 2006, the refurbishment of a 1,000-horsepower mechanical rig was completed pursuant to a $7.0 million seller’s note incurred
in the Strata acquisition. We designated this Rig No. 43 and financed the payment of the note with proceeds from our November 2005
follow-on offering. We mobilized Rig No. 43 to East Texas in January 2006.

      On January 18, 2006, we purchased six operating rigs and certain other assets, including heavy haul trucks and excess rig equipment and
inventory, from Big A Drilling, L.C. The purchase price for the assets consisted of $16.3 million paid in cash and 72,571 shares of our common
stock.

      In March 2006, we completed the refurbishment of a 1,100-horsepower mechanical drilling rig, which we designated Rig No. 57. We
incurred approximately $2.3 million in refurbishment costs for this rig which we financed with proceeds from our November 2005 follow-on
offering. We mobilized Rig No. 57 to Eastern Oklahoma in March 2006.

      We intend to refurbish twelve inventoried rigs during 2006 at estimated costs (including drill pipe) ranging from $900,000 to $6.5 million
per rig. We continue to focus our refurbishment program on our more powerful rigs, generally with 1,000 to 2,000 horsepower, which are
capable of drilling to depths between 15,000 and 25,000 feet. We plan on refurbishing additional rigs in 2007 and thereafter. The timing of
these refurbishments will depend upon market and other factors, including our estimation of existing and anticipated demand and dayrates, our
success in bidding for domestic contracts, including term contracts, and the expected time needed to complete the refurbishments. The actual
cost of refurbishing our rigs will depend upon such factors as the availability of equipment, unforeseen engineering problems, work stoppages,
weather interference, unanticipated

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cost increases, inability to obtain necessary certifications and approvals, shortages of skilled labor and the specific customer requirements.

      We have entered into negotiations for the purchase of an office building in Oklahoma City, Oklahoma to serve as our corporate
headquarters. As currently contemplated, the closing would occur during the first quarter of 2007, although we would lease space in the
building prior to that time. The purchase price is expected to be approximately $3.0 million, which would include the assumption of
approximately $1.6 million of outstanding seller debt and the payment of approximately $1.4 million in cash. The cash portion of the purchase
price would be funded from cash flow from our operations or borrowings under our credit facility. We have not yet entered into any definitive
agreement for this transaction and there can be no assurance that we will.

      We believe that cash flow from our operations and borrowings under our new revolving credit facility will be sufficient to fund our
operations for at least the next twelve months. However, additional capital will likely be required for future rig acquisitions and refurbishments.
While we would expect to fund such acquisitions with additional borrowings and the issuance of debt and equity securities, we cannot assure
you that such funding will be available or, if available, that it will be on terms acceptable to us.

Contractual and Commercial Commitments

        The following table summarizes our contractual obligations and commercial commitments at December 31, 2005 (in thousands):

                                                                                             Payments Due by Period

                                                                                 Less than                                             More than
                                                              Total               1 year              1-3 years        4-5 years        5 years
Contractual Obligations
Short- and long-term debt                                   $ 51,825         $       15,515       $       26,243   $       10,066     $           —
Operating lease obligations                                    2,747                    544                1,186              461                557

Total                                                       $ 54,572         $       16,059       $       27,429   $       10,527     $          557


Off Balance Sheet Arrangements

        We do not have any off balance sheet arrangements.

Quantitative and Qualitative Disclosures About Market Risk

      We are subject to market risk exposure related to changes in interest rates on our outstanding floating rate debt. Borrowings under our
new revolving credit facility bear interest at a floating rate equal to LIBOR plus a margin that can range from 2.0% to 3.0% or, at our option,
the prime rate plus a margin that can range from 1.0% to 2.0%, depending on the ratio of our outstanding senior debt to adjusted EBITDA. An
increase or decrease of 1% in the interest rate would have a corresponding decrease or increase in our net income (loss) of approximately
$353,000 annually, based on the $57.0 million outstanding in the aggregate under our credit facility as of February 28, 2006.

Recent Accounting Pronouncements

        SFAS No. 154

      In May 2005, the FASB issued SFAS No. 154, ― Accounting Changes and Error Corrections. ‖ This is a replacement of APB Opinion
No. 20, ― Accounting Changes ‖ and SFAS No. 3, ― Reporting Accounting Changes in Interim Financial Statements .‖ Under SFAS 154, all
voluntary changes in accounting principles as well as changes pursuant to accounting pronouncements that do not include specific transition
requirements, must be

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applied retrospectively to prior periods’ financial statements. Retrospective application requires the cumulative effect of each change to be
reflected in the carrying value of assets and liabilities as of the first period presented and the offsetting adjustments to be recorded in retained
earnings for the first period presented. Also, under the new statement, a change in an accounting estimate continues to be accounted for in the
period of the change and in future periods if necessary. Under SFAS 154, corrections of errors should continue to be reported by restating prior
period financial statements as of the beginning of the first period presented, if material. The statement is effective for accounting changes and
corrections of errors made in fiscal years beginning after December 15, 2005. We adopted SFAS 154 effective January 1, 2006. It is anticipated
that adoption will not have a material impact on our financial position and results of operations.

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                                                                   BUSINESS

General

      We provide contract land drilling services to oil and natural gas exploration and production companies. We currently own a fleet of 64
land drilling rigs, of which 41 are currently operating, four are in the process of being refurbished and 19 are held in inventory. We expect to
put all four of the rigs currently being refurbished into service by the end of the second quarter of 2006. We plan on refurbishing seven
additional rigs from our current inventory during 2006, at estimated costs (including drill pipe) ranging from $1.8 million to $6.5 million per
rig. We continue to focus our refurbishment program on our more powerful rigs, with 1,000 to 2,000 horsepower, which are capable of drilling
to depths between 15,000 and 25,000 feet. We also own a fleet of 60 trucks used to transport our rigs.

      We commenced operations in 2001 with the purchase of one stacked 650-horsepower rig that we refurbished and deployed. We
subsequently made selective acquisitions of both operational and inventoried rigs, as well as ancillary equipment. Our most recent acquisition
was completed in January 2006 when we purchased six land drilling rigs and certain other assets, including heavy haul trucks and excess
equipment, from Big A Drilling for $16.3 million in cash and 72,571 shares of our common stock. See ―—Our Acquisitions‖ below for
additional information regarding this acquisition. In October 2005, we purchased 12 land drilling rigs from Eagle Drilling, L.L.C. for
approximately $50.0 million, and 13 land drilling rigs from Thomas Drilling Co. for approximately $68.0 million. These transactions not only
increased the size of our rig fleet, but also expanded our operations to the Barnett Shale trend in North Texas and Palo Duro Basin in West
Texas. In July 2005, we completed a transaction with Strata Drilling, L.L.C. and Strata Property, L.L.C. in which we acquired, among other
assets, three land drilling rigs and a 16 acre storage and refurbishment yard for $20.0 million.

      Our management team has significant experience not only with acquiring rigs, but also with refurbishing and deploying inventoried rigs.
We have successfully refurbished and brought into operation 12 inventoried drilling rigs since November 2003. Upon completion of
refurbishment, the rigs either met or exceeded our operating expectations. In addition, we have a 41,000 square foot machine shop in Oklahoma
City which allows us to refurbish and repair our rigs and equipment in-house. This facility, which complements our four rig refurbishment
yards, significantly reduces our reliance on outside machine shops and the attendant risk of third-party delays in our rig refurbishment program.

      We currently operate in Oklahoma, Kansas, the Barnett Shale and Cotton Valley trends and Palo Duro Basin in Texas, the Williston
Basin in North Dakota and the Piceance Basin in Colorado. A majority of the wells we have drilled for our customers have been drilled in
search of natural gas reserves. Natural gas is often found in deep and complex geologic formations that generally require higher horsepower,
premium rigs and experienced crews to reach targeted depths. Our current fleet of 64 rigs includes 31 rigs ranging from 950 to 2,500
horsepower. Accordingly, such rigs can, or in the case of inventoried rigs upon refurbishment will be able to, reach the depths required to
explore for deep natural gas reserves. Our higher horsepower rigs can also drill horizontal wells, which are increasing as a percentage of total
wells drilled in North America. We believe our premium rig fleet, rig inventory and experienced crews position us to benefit from the strong
natural gas drilling activity in our core operating areas.

Our Acquisitions

      On January 18, 2006, we completed the acquisition of six land drilling rigs and certain other assets, including heavy haul trucks and
excess rig equipment and inventory, from Big A Drilling. The purchase price for the assets consisted of $16.3 million in cash and 72,571 shares
of our common stock. At closing, we also entered into a lease agreement with an affiliate of Big A Drilling under which we leased a rig
refurbishment yard located in Woodward, Oklahoma. The lease has an initial term of six months, and we have the option to extend the term of
the lease for a period of three years following the expiration of the initial term. We also have the option to

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purchase the leased premises at any time during the term of the lease for $200,000. For additional information regarding this transaction, see
―Management’s Discussion and Analysis of Financial Condition and Results of Operations—Liquidity and Capital Resources‖ and
―Business—General‖ and ―—Our Fleet of Drilling Rigs.‖

      The following table summarizes completed acquisitions in which we acquired rigs and rig related equipment since June 2001:

                                                                                                                          Number of Rigs
                Date                             Acquisition                          Purchase Price                        Acquired

        June 2001                    Ram Petroleum                              $                       1,250,000                                1
        May 2002                     Bison Drilling and Four Aces
                                     Drilling                                   $                      12,500,000                                7
        August 2003                  Elk Hill Drilling and U.S. Rig &
                                     Equipment                                  $                      49,000,000                                22
        July 2005                    Strata Drilling and Strata Property        $                      20,000,000                                 3
        October 2005                 Eagle Drilling                             $                      50,000,000                                12
        October 2005                 Thomas Drilling                            $                      68,000,000                                13
        January 2006                 Big A Drilling                             $                      18,150,000                                 6

       In May 2002, we purchased seven drilling rigs ranging in size from 400 to 950 horsepower, associated spare parts and equipment, drill
pipe, haul trucks and vehicles from Bison Drilling L.L.C. and Four Aces Drilling L.L.C. After accepting delivery of the rigs, we spent
approximately $97,000 upgrading the rigs before placing six of them into service. In August 2003, we purchased all of the outstanding stock of
Elk Hill Drilling, Inc. and certain drilling rig structures and components from U.S. Rig & Equipment, Inc., an affiliate of Elk Hill. In these
transactions, we acquired drilling rigs and inventoried structures and components which, with refurbishment and upgrades, could be used to
assemble 22 drilling rigs. At the date of its acquisition, Elk Hill was an inactive corporation with no customers, employees, operations or
operational drilling rigs. We began refurbishing the acquired rigs and have deployed an average of approximately one rig per quarter since
November 2003. In July 2005, we acquired all of the membership interests of Strata Drilling, L.L.C. and Strata Property, L.L.C. Included in the
Strata acquisitions were two operating rigs, one rig that was refurbished, related structures, equipment and components and a 16 acre yard in
Oklahoma City, Oklahoma used for equipment storage and refurbishment of inventoried rigs. In September 2005, we acquired 18 trucks and
related equipment through our acquisition of Hays Trucking, Inc. for a purchase price consisting of $3.0 million in cash, which included the
repayment of $1.9 million of debt owed by Hays Trucking, and 65,368 shares of our common stock. In October 2005, we purchased 12 land
drilling rigs from Eagle Drilling, L.L.C. for approximately $50.0 million plus approximately $500,000 of related transaction costs, and 13 land
drilling rigs from Thomas Drilling Co. for approximately $68.0 million plus approximately $2.6 million of related transaction costs. In
connection with the Thomas acquisition, we leased an additional rig refurbishment yard for a six month term, with the right to extend the term
for an additional three years. We also obtained an option to purchase the yard at any time during the term for $175,000. In January 2006, we
completed the Big A Drilling acquisition as described above.

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Our Industry

       The United States contract land drilling services industry is highly cyclical. Volatility in oil and natural gas prices can produce wide
swings in the levels of overall drilling activity in the markets we serve and affect the demand for our drilling services and the dayrates we can
charge for our rigs. The availability of financing sources, past trends in oil and natural gas prices and the outlook for future oil and natural gas
prices strongly influence the number of wells oil and natural gas exploration and production companies decide to drill. Nevertheless, we believe
that the following trends in our industry should benefit our operations:

      •    Need for increased natural gas drilling activity as U.S. demand growth outpaces U.S. supply growth. From 1994 to 2003, demand
           for natural gas in the United States grew at an annual rate of 0.6% while the U.S. domestic supply grew at an annual rate of 0.2%.
           The Energy Information Administration, or EIA, recently estimated that U.S. domestic consumption of natural gas exceeded
           domestic production by 17% in 2004, a gap that the EIA forecasts will expand to 24% in 2010.

                                                 U.S. Natural Gas Wells Drilled & Production




    Source: EIA.

      •    Increased decline rates in natural gas basins in the U.S . As the chart above shows, even though the number of U.S. natural gas
           wells drilled has increased significantly, a corresponding increase in production has not been realized. We believe that a significant
           reason for the limited supply response, even as drilling activities have increased, is the accelerating decline rates of production from
           new natural gas wells drilled. A study published by the National Petroleum Council in September 2003 concluded, from analysis of
           production data over the preceding ten years, that as a result of domestic natural gas decline rates of 25% to 30% per year, 80% of
           natural gas production in ten years will be

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           from wells that have not yet been drilled. We believe that this tends to support a sustained higher natural gas price environment,
           which should create incentives for oil and natural gas exploration and production companies to increase drilling activities in the U.S.

      •    Trend towards drilling and developing unconventional natural gas resources. As a result of improvements in extraction
           technologies along with general increases in natural gas prices, oil and natural gas companies increasingly are exploring for and
           developing ―unconventional‖ natural gas resources, such as natural gas from tight sands, shales and coalbed methane. This type of
           drilling activity is frequently done on tighter acreage spacing, and requires that more wells be drilled. It also requires higher
           horsepower rigs for techniques such as horizontal drilling. The chart below shows the U.S. land rig count is significantly higher than
           it has been in recent years.




    Source: Baker Hughes

      •    High natural gas prices. While U.S. natural gas prices are volatile, 2005 marked the third consecutive year of increases in the
           yearly average NYMEX near month natural gas contract prices, as shown on the chart below. We believe that high natural gas prices
           in the U.S., if sustained, should result in more exploration and development drilling activity, and thus higher utilization and dayrates
           for drilling companies like us.

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    Source: Bloomberg.

      •    Increases in dayrates and operating margins for land drilling. The increase in the price of natural gas, coupled with accelerating
           decline rates and an increase in the number of natural gas wells being drilled, have resulted in increases in rig utilization, and
           consequently improved dayrates and gross margins.

Our Strengths

      Our competitive strengths include:

      •    Premium rig fleet . We currently operate a fleet of 41 rigs, 20 of which have been refurbished since November 2003 by us or the
           parties from which the rigs were purchased. Natural gas reserves are often found in deep and complex geological formations that
           require higher horsepower or premium rigs to drill. In addition, the recovery of unconventional natural gas resources often involves
           horizontal drilling techniques that also require premium rigs with approximately 1,000 or more horsepower. We believe that our
           operating history and high-quality rig fleet position us to benefit from this type of drilling activity.

      •    Inventory of drilling rigs and ancillary equipment. In addition to our four rigs currently being refurbished, our 19 drilling rigs held
           in inventory for refurbishment will allow us to add capacity in response to the currently strong land drilling market. We also have an
           inventory of excess drawworks, hooks, blow-out preventors and other rig-related equipment. Our inventoried rigs as well as many of
           the parts we have in inventory would have long delivery lead times if ordered new.

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      •    Ability to refurbish inventoried rigs. Our management team has demonstrated the ability to refurbish rigs from our inventory. Since
           November 2003, we have successfully refurbished and placed into service 12 inventoried drilling rigs at costs ranging from $2.2
           million to $6.6 million per rig. We are currently refurbishing four additional rigs, all of which range from 450 to 1,400 horsepower.
           We expect to put all four of the rigs currently being refurbished into service by the end of the second quarter of 2006. In connection
           with each of the Thomas and Big A Drilling acquisitions, we leased an additional refurbishment yard for a six month term, with the
           right to extend the term of the lease for an additional three years. We also obtained options to purchase both of these yards at any
           time during the term for $175,000 and $200,000, respectively.

      •    Ability to attract and retain qualified rig crews. We believe that our premium rig fleet and experienced management team allow us
           to successfully attract and retain qualified rig crews relative to some larger, more diversified land drilling companies. As a result, we
           believe we have been able to refurbish rigs from our inventory and put them into operation without sacrificing our operating quality.

Our Strategy

      Our strategy is to continue to expand our contract land drilling services. Specifically, we intend to:

      •    Refurbish and deploy rigs from our inventory. We intend to continue the refurbishment and deployment of our inventoried rigs.
           We expect to put all four of the rigs currently being refurbished into service by the end of the second quarter of 2006. We plan on
           refurbishing seven additional rigs from our current inventory during 2006, at estimated costs (including drill pipe) ranging from $1.8
           million to $6.5 million per rig. We continue to focus our refurbishment program on our higher horsepower rigs. As a result of the
           Thomas and Big A Drilling acquisitions, we added the use of two additional rig refurbishment yards, bringing the total number of
           yards in use for refurbishment to four, and also added experienced refurbishing crews that complemented the experienced crews we
           had in place. Our five rig-up supervisors have an average of 31 years of experience in the drilling industry. Following our Big A
           Drilling acquisition, the management and crews from Big A Drilling joined our team.

      •    Expand our rig fleet and geographic focus. We intend to continue to expand our rig fleet and geographic areas of operation by
           making selected acquisitions and mobilizing rigs to other regions. We are currently operating in Oklahoma, Kansas, the Barnett
           Shale and Cotton Valley trends and Palo Duro Basin in Texas, the Williston Basin in North Dakota and the Piceance Basin in
           Colorado. We began operations in the Barnett Shale with seven rigs through our recent Eagle and Thomas acquisitions. We
           regularly evaluate potential acquisitions of rigs and ancillary operations in both our existing and new regions.

      •    Maintain a balanced portfolio of spot and term contracts. We manage our rig fleet as a portfolio, committing some of our rigs to
           longer-term contracts that meet our targeted returns on invested capital, and leveraging spot market rates with other rigs. As we
           expand our geographic focus, we initially plan on favoring longer-term contracts in our new markets until we gain operating
           maturity in those markets.

      •    Maintain a conservative capital structure and disciplined approach to capital spending. We believe that our conservative balance
           sheet will allow us to pursue opportunities to grow our business. We will continue to evaluate investment opportunities, including
           potential acquisitions and additional rig refurbishments, that meet our targeted returns on invested capital.

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Drilling Equipment

General

     A drilling rig consists of engines, a hoisting system, a rotating system, pumps and related equipment to circulate drilling fluid, blowout
preventors and related equipment.

      Diesel or gas engines are typically the main power sources for a drilling rig. Power requirements for drilling jobs may vary considerably,
but most drilling rigs employ two or more engines to generate between 500 and 2,000 horsepower, depending on well depth and rig design.
Most drilling rigs capable of drilling in deep formations, involving depths greater than 15,000 feet, use diesel-electric power units to generate
and deliver electric current through cables to electrical switch gears, then to direct-current electric motors attached to the equipment in the
hoisting, rotating and circulating systems.

      Drilling rigs use long strings of drill pipe and drill collars to drill wells. Drilling rigs are also used to set heavy strings of large-diameter
pipe, or casing, inside the borehole. Because the total weight of the drill string and the casing can exceed 500,000 pounds, drilling rigs require
significant hoisting and braking capacities. Generally, a drilling rig’s hoisting system is made up of a mast, or derrick, a drilling line, a traveling
block and hook assembly and ancillary equipment that attaches to the rotating system, a mechanism known as the drawworks. The drawworks
mechanism consists of a revolving drum, around which the drilling line is wound, and a series of shafts, clutches and chain and gear drives for
generating speed changes and reverse motion. The drawworks also houses the main brake, which has the capacity to stop and sustain the
weights used in the drilling process. When heavy loads are being lowered, a hydromatic or electric auxiliary brake assists the main brake to
absorb the great amount of energy developed by the mass of the traveling block, hook assembly, drill pipe, drill collars and drill bit or casing
being lowered into the well.

       The rotating equipment from top to bottom consists of a swivel, the kelly bushing, the kelly, the rotary table, drill pipe, drill collars and
the drill bit. We refer to the equipment between the swivel and the drill bit as the drill stem. The swivel assembly sustains the weight of the drill
stem, permits its rotation and affords a rotating pressure seal and passageway for circulating drilling fluid into the top of the drill string. The
swivel also has a large handle that fits inside the hook assembly at the bottom of the traveling block. Drilling fluid enters the drill stem through
a hose, called the rotary hose, attached to the side of the swivel. The kelly is a triangular, square or hexagonal piece of pipe, usually 40 feet
long, that transmits torque from the rotary table to the drill stem and permits its vertical movement as it is lowered into the hole. The bottom
end of the kelly fits inside a corresponding triangular, square or hexagonal opening in a device called the kelly bushing. The kelly bushing, in
turn, fits into a part of the rotary table called the master bushing. As the master bushing rotates, the kelly bushing also rotates, turning the kelly,
which rotates the drill pipe and thus the drill bit. Drilling fluid is pumped through the kelly on its way to the bottom. The rotary table, equipped
with its master bushing and kelly bushing, supplies the necessary torque to turn the drill stem. The drill pipe and drill collars are both steel
tubes through which drilling fluid can be pumped. Drill pipe, sometimes called drill string, comes in 30-foot sections, or joints, with threaded
sections on each end. Drill collars are heavier than drill pipe and are also threaded on the ends. Collars are used on the bottom of the drill stem
to apply weight to the drilling bit. At the end of the drill stem is the bit, which chews up the formation rock and dislodges it so that drilling fluid
can circulate the fragmented material back up to the surface where the circulating system filters it out of the fluid.

       Drilling fluid, often called mud, is a mixture of clays, chemicals and water or oil, which is carefully formulated for the particular well
being drilled. Bulk storage of drilling fluid materials, the pumps and the mud-mixing equipment are placed at the start of the circulating system.
Working mud pits and reserve storage are at the other end of the system. Between these two points the circulating system includes auxiliary
equipment for drilling fluid maintenance and equipment for well pressure control. Within the system, the drilling mud is typically routed from
the mud pits to the mud pump and from the mud pump through a standpipe and the rotary hose to the drill stem. The drilling mud travels down
the drill stem to the bit, up the annular space between the drill stem and the borehole and through the blowout preventer stack to the return flow
line. It then travels to a

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shale shaker for removal of rock cuttings, and then back to the mud pits, which are usually steel tanks. The reserve pits, usually one or two
fairly shallow excavations, are used for waste material and excess water around the location.

     There are numerous factors that differentiate drilling rigs, including their power generation systems and their drilling depth capabilities.
The actual drilling depth capability of a rig may be less than or more than its rated depth capability due to numerous factors, including the size,
weight and amount of the drill pipe on the rig. The intended well depth and the drill site conditions determine the amount of drill pipe and other
equipment needed to drill a well. Generally, land rigs operate with crews of five to six persons.

Our Fleet of Drilling Rigs

      Our rig fleet consists of 64 drilling rigs, of which 41 are currently operating, four are in the process of being refurbished and 19 are held
in inventory. We expect to put the four rigs that are currently being refurbished into service by the end of the second quarter of 2006. We plan
on refurbishing seven additional rigs from our current inventory during 2006. We own all the rigs in our fleet. The following table sets forth
information regarding utilization for our fleet of operating drilling rigs:

                                                                                                        Year Ended December 31,

                                                                                               2005                  2004                 2003

Average number of operating rigs                                                                      17                     9                    7
Average utilization rate                                                                              95 %                  81 %                 76 %

      The following table sets forth information regarding our drilling fleet as of March 15, 2006:

                                                                          Approximate
Rig     Design                                                          Drilling Depth (ft)                  Type                  Horsepower

Working Rigs
 19     Mid Continent U-1220 EB                                                25,000             Electric                            2,500
 18     Gardner Denver 1500E                                                   25,000             Electric                            2,000
 17     Skytop Brewster NE-95                                                  20,000             Electric                            1,700
 12     Gardner Denver 1100E                                                   18,000             Electric                            1,500
 16     Oilwell840E                                                            18,000             Electric                            1,400
 15     Mid Continent U-712-EA                                                 16,000             Electric                            1,200
 14     Mid Continent U-712-EA                                                 16,000             Electric                            1,200
 77     Ideco 711                                                              16,000             Mechanical                          1,200
 78     Seaco 1200                                                             12,000             Mechanical                          1,200
 56     BDW 800 MI                                                             16,500             Mechanical                          1,100
 60     Skytop Brewster N46                                                    14,000             Mechanical                          1,100
 57     Continental Emsco GB800                                                16,500             Mechanical                          1,100
 11     Gardner Denver 800E                                                    15,000             Electric                            1,000
 10     Gardner Denver 800E                                                    15,000             Electric                            1,000
 43     National 80B                                                           15,000             Mechanical                          1,000
  8     National 80-UE                                                         15,000             Electric                            1,000
  3     Cabot 900                                                              10,000             Mechanical                            950
  4     Skytop Brewster N46                                                    14,000             Mechanical                            950
 51     Skytop Brewster N42                                                    12,000             Mechanical                            850
 52     Continental Emsco G-500                                                11,000             Mechanical                            850
 53     Skytop Brewster N42                                                    12,000             Mechanical                            850
 54     Skytop Brewster N46                                                    13,000             Mechanical                            850
 55     National 50-A                                                          12,000             Mechanical                            850
 59     Skytop Brewster N46                                                    13,000             Mechanical                            850
 61     National 50-A                                                          11,500             Mechanical                            850
 41     Skytop-Brester N-46                                                    13,500             Mechanical                            800

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                                   Approximate
Rig     Design                   Drilling Depth (ft)          Type   Horsepower

 72     Skytop Brewster N45            10,000          Mechanical        750
 75     Ideco 750                      14,000          Mechanical        750
 76     National N55                   12,000          Mechanical        700
 42     Gardner Denver 500             12,000          Mechanical        650
 94     Skytop Brewster N45             9,000          Mechanical        650
 95     Unit U-15                       8,000          Mechanical        650
  9     Gardner Denver 500             11,000          Mechanical        650
  7     Mid Con U36A                   12,000          Mechanical        650
  6     Mid Con U36A                   12,000          Mechanical        650
  5     Mid Con U36A                   12,000          Mechanical        650
 92     Weiss 45                        8,000          Mechanical        450
  2     Cardwell L-350                  6,000          Mechanical        400
 91     Ideco H-35                      8,000          Mechanical        400
 96     Ideco H-35                      8,000          Mechanical        400
 93     Ideco H-30                      8,000          Mechanical        350
 Rigs Being Refurbished
 20     Mid Continent U-914-EC         18,000          Electric        1,400
 23     Continental Emsco D-3          15,000          Electric        1,000
 58     Unit U-15                      10,200          Mechanical        800
 70     National T32                    6,000          Mechanical        450
 Rigs in Inventory
 24     Skytop Brewster N-12           25,000          Electric        2,000
 25     National 1320-UE               18,000          Electric        2,000
 27     National 1320-UE               18,000          Electric        2,000
 73     Brewster N95                   18,000          Mechanical      1,700
 74     Mid Con 914                    16,000          Mechanical      1,400
 79     Mid Con 914                    16,000          Mechanical      1,400
 21     Mid Continent U-914-EC         18,000          Electric        1,400
 22     Continental Emsco D-3          15,000          Electric        1,000
 26     National 80-UE                 15,000          Electric        1,000
 28     Ideco 1200E                    15,000          Electric        1,000
 80     Skytop Brewster N45            10,000          Mechanical        750
 31     Oilwell 660                    12,000          Mechanical        700
 71     National N55                   12,000          Mechanical        700
 62     Schaffer SOS 6000               8,000          Mechanical        650
 30     Skytop Brewster N42            10,000          Mechanical        600
 32     Schaffer 6000S                 10,000          Mechanical        600
 81     National T32                    6,000          Mechanical        450
  1     Cardwell L-350                  5,000          Mechanical        400
 64     National T32                    6,000          Mechanical        325
 Excess Rig Inventory
 33     Oilwell 500                    10,000          Mechanical        500
 34     Mac 400                         6,000          Mechanical        400
 35     Mid Continent U34B              6,000          Mechanical        400
 36     Ideco H-35 Hydrair              6,000          Mechanical        400

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Working Rigs

      We currently have 41 operating rigs. Eighteen of the rigs are currently operating on term contracts ranging from one to two years and
twenty-three of the rigs are operating on a well-to-well basis. Twenty of the 41 rigs we currently operate have undergone significant
refurbishment since November 2003 by us or the parties from which the rigs were purchased.

      Rig 19. This Mid-Continent U-1220 EB rig was acquired as part of the Elk Hill acquisition. We refurbished this rig from inventory at a
cost of approximately $6.6 million and deployed it in July 2005. It is currently working in Caddo County, Oklahoma under a two-year term
contract that expires in August 2007.

      Rig 18. This Gardner Denver 1500E rig was acquired in the Elk Hill acquisition. We refurbished this rig from inventory at a cost of
approximately $4.8 million and deployed it in December 2004. It has been working for the same operator since it was refurbished. It is
currently working in Latimer County, Oklahoma on a well-to-well basis.

      Rig 17. This Skytop Brewster NE-95 was acquired as part of the Elk Hill acquisition. We completed the refurbishment of this rig from
inventory at a cost of $6.5 million and deployed it in January 2006. It is currently working in Roger Mills County, Oklahoma under a two-year
term contract that expires January 2008.

     Rig 12. This Gardner Denver 1100E rig was acquired in the Elk Hill acquisition. We completed the refurbishment of this rig from
inventory at a cost of approximately $2.3 million and deployed it in March 2004. It is currently working in Caddo County, Oklahoma under a
two-year term contract that expires in April 2007.

       Rig 16. This Oilwell 840E rig was acquired in the Elk Hill acquisition. We completed the refurbishment of this rig from inventory at a
cost of approximately $2.2 million and deployed it in October 2003. It is currently working in Caddo County, Oklahoma on a well-to-well
basis.

      Rig 15. This Mid-Continent U-712-EA was acquired as part of the Elk Hill acquisition. We completed the refurbishment of this rig from
inventory at a cost of $6.1 million and deployed it in January 2006. It is currently working in Smith County, Texas under a two-year term
contract that expires January 2008.

     Rig 14. This Mid-Continent U-712-EA rig was acquired in the Elk Hill acquisition. We completed the refurbishment of this rig from
inventory at a cost of approximately $4.8 million and deployed it in March 2005. It is currently working on a one-year term contract in Eastern
Oklahoma that expires in July 2006.

     Rig 77. This Ideco 711 rig was acquired as part of the Eagle acquisition. It is currently working in Atoka County, Oklahoma under a
one-year term contract that expires in November 2006.

      Rig 78. This Seaco 1200 rig was acquired as part of the Eagle acquisition. It is currently working in Johnson County, Texas on a one-year
term contract that expires in August 2006.

      Rig 56. This BDW 800 MI was acquired as part of the Thomas acquisition. It is currently operating in Parker County, Texas on a
well-to-well basis.

     Rig 60. This Skytop Brewster N46 was acquired as part of the Thomas acquisition. It is currently operating in Tarrant County, Texas
under a one-year contract that expires in February 2007.

     Rig 57. This Continental Emsco GB800 was acquired as part of the Thomas acquisition. We completed the refurbishment of this rig from
inventory at a cost of approximately $2.3 million and deployed it in March 2006. It is currently drilling its first well in Grady County,
Oklahoma. Subsequent to completion of this well it will begin working in Eastern Oklahoma under a two-year term contract that expires in
March 2008.

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      Rig 11. This Gardner Denver 800E rig was acquired in the Elk Hill acquisition. We completed the refurbishment of this rig from
inventory at a cost of approximately $2.7 million and deployed it in May 2004. It is currently working in Garvin County, Oklahoma on a
well-to-well basis.

      Rig 10. This Gardner Denver 800E rig was acquired in the Elk Hill acquisition. We completed the refurbishment of this rig from
inventory at a cost of approximately $3.2 million and deployed it in August 2004. It is currently working in Canadian County, Oklahoma on a
well-to-well basis.

      Rig 43. This National 80B was acquired as part of the Strata acquisition. The refurbishment of this rig was completed pursuant to a $7.0
million seller’s note and deployed in January 2006. It is currently working in Harrison County, Texas under a two-year term contract that
expires in January 2008.

      Rig 8. This National 80-UE was acquired as part of the Elk Hill acquisition. We completed the refurbishment of this rig from inventory at
a cost of $6.0 million and deployed it in November 2005. It is currently working in Billings County, North Dakota under a two-year term
contract that expires November 2007.

     Rig 3. This Cabot 900 was acquired in the Bison Drilling acquisition. This rig is currently working in Pottawatomie County, Oklahoma
under a two-year contract that expires in January 2008.

     Rig 4. This Skytop Brewster N46 rig was acquired as part of the Bison acquisition. We completed refurbishment of this rig in August
2005. It is currently working in the Piceance Basin in Colorado under a seventeen-month contract that expires in September 2006.

     Rig 51. This Skytop Brewster N42 was acquired as part of the Thomas acquisition. It is currently operating in McClain County,
Oklahoma on a well-to-well basis.

     Rig 52. This Continental Emsco G-500 was acquired as part of the Thomas acquisition. It is currently operating in Major County,
Oklahoma on a well-to-well basis.

      Rig 53. This Skytop Brewster N42 was acquired as part of the Thomas acquisition. It is currently operating in Grady County, Oklahoma
on a well-to-well basis.

     Rig 54. This Skytop Brewster N46 was acquired as part of the Thomas acquisition. It is currently operating in Stephens County,
Oklahoma on a well-to-well basis.

      Rig 55. This National 50-A was acquired as part of the Thomas acquisition. It is currently operating in Denton County, Texas on a
well-to-well basis.

     Rig 59. This Skytop Brewster N46 was acquired as part of the Thomas acquisition. It is currently operating in Coal County, Oklahoma
under a one-year contract that expires in January 2007.

      Rig 61. This National 50-A was acquired as part of the Thomas acquisition. It is currently operating in Tarrant County, Texas on a
well-to-well basis.

       Rig 41. This Skytop Brewster N-46 rig was acquired as part of the Strata acquisitions. It has been working for the same operator for the
last three years in Central and Western Oklahoma. This rig is currently working in Cleveland County, Oklahoma on a well-to-well basis.

      Rig 72. This Skytop Brewster N45 rig was acquired as part of the Eagle acquisition. It is currently working in Johnson County, Texas on
a well-to-well basis.

      Rig 75. This Ideco 750 rig was acquired as part of the Eagle acquisition. It is currently working in Murray County, Oklahoma on a
well-to-well basis.

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     Rig 76. This National N55 rig was acquired as part of the Eagle acquisition. It is currently working in Johnson County, Texas under a
one-year term contract that expires in November 2006.

       Rig 42. This Gardner Denver 500 rig was acquired as a part of the Strata acquisitions. It has been working for the same operator for the
last three years in Central and Western Oklahoma. This rig is currently working in Custer County, Oklahoma on a well-to-well basis.

     Rig 94. This Skytop Brewster N45 rig was acquired as part of the Big A Drilling acquisition. It is currently working in Texas County,
Oklahoma on a well-to-well basis.

      Rig 95. This Unit U-15 rig was acquired as part of the Big A Drilling acquisition. It is currently working in Roberts County, Texas on a
well-to-well basis.

     Rig 9. This Gardner Denver 500 was acquired in the Ram acquisition. This rig is currently working in Oklahoma County, Oklahoma
under a two-year contract that expires in January 2008.

     Rig 7. This Mid-Continent U36A was acquired in the Bison Drilling acquisition. It is drilling a well in Coal County, Oklahoma under a
one-year term contract that expires November 2006.

     Rig 6. This Mid-Continent U36A was acquired in the Bison Drilling acquisition. This rig is currently working in Major County,
Oklahoma under a one-year contract that expires in February 2007.

      Rig 5. This Mid-Continent U36A was acquired in the Bison Drilling acquisition. It is drilling in Grady County, Oklahoma on a
well-to-well basis.

      Rig 92. This Weiss 45 rig was acquired as part of the Big A Drilling acquisition. It is currently working in Texas County, Oklahoma on a
well-to-well basis.

      Rig 2. This Cardwell L-350 was acquired in the Bison Drilling acquisition. It works primarily in the Arkoma Basin in Eastern Oklahoma.
This rig is currently working in Hughes County, Oklahoma on a well-to-well basis.

      Rig 91. This Ideco H-35 rig was acquired as part of the Big A Drilling acquisition. It is currently working in Harper County, Oklahoma
on a well-to-well basis.

      Rig 96. This Ideco H-35 rig was acquired as part of the Big A Drilling acquisition. It is currently working in Clark County, Kansas on a
well-to-well basis.

      Rig 93. This Ideco H-30 rig was acquired as part of the Big A Drilling acquisition. It is currently working in Cimarron County, Oklahoma
on a well-to-well basis.

Rigs Being Refurbished

        We are currently in the process of refurbishing four rigs, all of which we anticipate will be completed by the end of the second quarter of
2006.

     Rig 20. This Mid-Continent U-914-EC rig was acquired as part of the Elk Hill acquisition. We started its refurbishment in October 2005
and believe it can be delivered in the first quarter of 2006.

     Rig 23. This Continental Emsco D-3 rig was acquired as part of the Elk Hill acquisition. We intend to start its refurbishment in March
2006 and believe it can be delivered in the second quarter of 2006. We have ordered drill pipe, derrick and substructure power packages and
SCR house which are scheduled for delivery beginning in the first quarter of 2006.

       Rig 58. This Unit U-15 was acquired as part of the Thomas acquisition. We started its refurbishment in October 2005 and anticipate that
it will be complete and drill ready by the end of the first quarter 2006.

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      Rig 70. This National T32 was acquired as part of the Eagle acquisition. We started its refurbishment in February 2006 and believe it can
be delivered by the end of the second quarter of 2006.

Rigs in Inventory

      We currently have 19 rigs held in inventory in our rig yards in Oklahoma. We define an inventoried rig as a rig that is included in our
refurbishment plan and has been assigned a start and delivery date. The seven additional rigs that we intend to refurbish during 2006 are
described below. We intend to refurbish and deploy our remaining rigs held in inventory on a periodic basis, with such refurbishment currently
scheduled for completion by the end of the second quarter of 2008.

      Rig 25. This National 1320-UE rig was acquired as part of the Elk Hill acquisition. We intend to start its refurbishment in May 2006 and
believe it can be delivered in the fourth quarter of 2006. We have ordered drill pipe, power packages and SCR house which are scheduled for
delivery beginning in the first quarter of 2006.

      Rig 73. This Skytop Brewster N95 was acquired as part of the Eagle acquisition. We intend to start its refurbishment in April 2006 and
believe it can be delivered in the third quarter of 2006.

      Rig 74. This Mid-Continent 914 was acquired as part of the Eagle acquisition. We intend to start its refurbishment in July 2006 and
believe it can be delivered in the fourth quarter of 2006.

     Rig 21. This Mid-Continent U-914-EC rig was acquired as part of the Elk Hill acquisition. We started its refurbishment in October 2005
and believe it can be delivered in the third quarter of 2006.

     Rig 22. This Continental Emsco D-3 rig was acquired as part of the Elk Hill acquisition. We started its refurbishment in October 2005
and believe it can be delivered in the fourth quarter of 2006.

      Rig 26. This National 80-UE rig was acquired as part of the Elk Hill acquisition. We intend to start its refurbishment in July 2006 and
believe it can be delivered by the end of 2006. We have ordered drill pipe, power packages and SCR house which are scheduled for delivery in
the third quarter of 2006.

     Rig 81. This National T32 was acquired as part of the Eagle acquisition. We intend to start its refurbishment in May 2006 and believe it
can be delivered in the fourth quarter of 2006.

Excess Rig Inventory

      We currently have four rigs that we believe can be refurbished, but are not currently part of our refurbishment plan. We periodically
review the market, our financial condition and our refurbishment yard capacity to determine if we will add additional rigs to our refurbishment
plan.

Excess Equipment

     As of February 28, 2006 we had an inventory of excess rig equipment that includes 42 drawworks (30 of which are 1,000 horsepower or
higher), 84 blocks, 69 blow out preventors, 14 electric brakes, 52 hydromatic brakes, 59 rotary tables and 33 swivels. This inventoried
equipment could be used with newly ordered or purchased parts to build additional rigs.

      As of February 28, 2006, we owned a fleet of 60 trucks and related transportation equipment that we use to transport our drilling rigs to
and from drilling sites. By owning our own trucks, we reduce the cost of rig moves and reduce downtime between rig moves.

     We believe that our operating drilling rigs and other related equipment are in good operating condition. Our employees perform periodic
maintenance and minor repair work on our drilling rigs. Historically, we have relied

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on various oilfield service companies for major repair work and overhaul of our drilling equipment. In April 2005, we opened a 41,000 square
foot machine shop in Oklahoma City which allows us to refurbish and repair our rigs and equipment in-house. In the event of major
breakdowns or mechanical problems, our rigs could be subject to significant idle time and a resulting loss of revenue if the necessary repair
services are not immediately available.

Drilling Contracts

      As a provider of contract land drilling services, our business and the profitability of our operations depend on the level of drilling activity
by oil and natural gas exploration and production companies operating in the geographic markets where we operate. Our business has generally
not been affected by seasonal fluctuations. The oil and natural gas exploration and production industry is a historically cyclical industry
characterized by significant changes in the levels of exploration and development activities. During periods of lower levels of drilling activity,
price competition tends to increase and results in decreases in the profitability of daywork contracts. In this lower level drilling activity and
competitive price environment, we may be more inclined to enter into footage contracts that expose us to greater risk of loss without
commensurate increases in potential contract profitability.

      We obtain our contracts for drilling oil and natural gas wells either through competitive bidding or through direct negotiations with
customers. Our drilling contracts generally provide for compensation on either a daywork or footage basis. The contract terms we offer
generally depend on the complexity and risk of operations, the on-site drilling conditions, the type of equipment used and the anticipated
duration of the work to be performed. Generally, our contracts provide for the drilling of a single well and typically permit the customer to
terminate on short notice, usually on payment of an agreed fee.

      The following table presents, by type of contract, information about the total number of wells we completed for our customers during the
years ended December 31, 2005, 2004 and 2003.

                                                                                                  Year Ended December 31,

                                                                                              2005             2004            2003

                Daywork                                                                          148               80              41
                Footage                                                                            5               11              28
                Turnkey                                                                           —                —               —

                Total number of wells                                                            153               91              69


       Daywork Contracts . Under daywork drilling contracts, we provide a drilling rig with required personnel to our customer who supervises
the drilling of the well. We are paid based on a negotiated fixed rate per day while the rig is used. Daywork drilling contracts specify the
equipment to be used, the size of the hole and the depth of the well. Under a daywork drilling contract, the customer bears a large portion of the
out-of-pocket drilling costs and we generally bear no part of the usual risks associated with drilling, such as time delays and unanticipated
costs.

      Footage Contracts . Under footage contracts, we are paid a fixed amount for each foot drilled, regardless of the time required or the
problems encountered in drilling the well. We typically pay more of the out-of-pocket costs associated with footage contracts as compared to
daywork contracts. The risks to us on a footage contract are greater because we assume most of the risks associated with drilling operations
generally assumed by the operator in a daywork contract, including the risk of blowout, loss of hole, stuck drill pipe, machinery breakdowns,
abnormal drilling conditions and risks associated with subcontractors’ services, supplies, cost escalation and personnel. We manage this
additional risk through the use of engineering expertise and bid the footage contracts accordingly, and we maintain insurance coverage against
some, but not all, drilling hazards. However, the occurrence of uninsured or under-insured losses or operating cost overruns on our footage jobs
could have a negative impact on our profitability.

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      Turnkey Contracts . Turnkey contracts typically provide for a drilling company to drill a well for a customer to a specified depth and
under specified conditions for a fixed price, regardless of the time required or the problems encountered in drilling the well. The drilling
company would provide technical expertise and engineering services, as well as most of the equipment and drilling supplies required to drill the
well. The drilling company may subcontract for related services, such as the provision of casing crews, cementing and well logging. Under
typical turnkey drilling arrangements, a drilling company would not receive progress payments and would be paid by its customer only after it
had performed the terms of the drilling contract in full.

       Although we have not historically entered into any turnkey contracts, we may decide to enter into such arrangements in the future. The
risks to a drilling company under a turnkey contract are substantially greater than on a well drilled on a daywork basis. This is primarily
because under a turnkey contract the drilling company assumes most of the risks associated with drilling operations generally assumed by the
operator in a daywork contract, including the risk of blowout, loss of hole, stuck drill pipe, machinery breakdowns, abnormal drilling
conditions and risks associated with subcontractors’ services, supplies, cost escalations and personnel.

Customers and Marketing

      We market our rigs to a number of customers. In 2005, we drilled wells for 52 different customers, compared to 29 customers in 2004 and
34 customers in 2003. The following table shows our customers that accounted for more than 5% of our total contract drilling revenue for each
of our last three years.

                                                                                                            Total Contract
                                                                                                           Drilling Revenue
                Customer                                                                                     Percentage

                2005
                New Dominion, L.L.C.                                                                                         10 %
                Chesapeake Energy Corporation                                                                                 9%
                Carl E. Gungoll Exploration, L.L.C.                                                                           6%
                Western Oil and Gas Development Co.                                                                           6%
                XTO Energy                                                                                                    5%
                2004
                Carl E. Gungoll Exploration, L.L.C.                                                                          11 %
                Western Oil and Gas Development Co.                                                                           9%
                New Dominion, L.L.C.                                                                                          9%
                Chesapeake Energy Corporation.                                                                                7%
                XTO Energy                                                                                                    7%
                Triad Energy                                                                                                  6%
                Ward Petroleum Corp.                                                                                          6%
                2003
                Carl E. Gungoll Exploration, L.L.C.                                                                          13 %
                Zinke and Trumbo, Inc.                                                                                       11 %
                Questar Exploration & Production                                                                              8%
                Medicine Bow Operating Co.                                                                                    8%
                Apache Corporation                                                                                            7%

      We primarily market our drilling rigs through employee marketing representatives. These marketing representatives use personal contacts
and industry periodicals and publications to determine which operators are planning to drill oil and natural gas wells in the near future in our
market areas. Once we have been placed on the ―bid list‖ for an operator, we will typically be given the opportunity to bid on most future wells
for that operator in the areas in which we operate. Our rigs are typically contracted on a well-by-well basis.

      From time to time we also enter into informal, nonbinding commitments with our customers to provide drilling rigs for future periods at
specified rates plus fuel and mobilization charges, if applicable, and escalation

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provisions. This practice is customary in the contract land drilling services business during times of tightening rig supply.

Competition

       We encounter substantial competition from other drilling contractors. Our primary market area is highly fragmented and competitive. The
fact that drilling rigs are mobile and can be moved from one market to another in response to market conditions heightens the competition in
the industry.

      The drilling contracts we compete for are usually awarded on the basis of competitive bids. Our principal competitors are Nabors
Industries, Inc., Patterson-UTI Energy, Inc., Unit Corp. and Helmerich & Payne, Inc. We believe pricing and rig availability are the primary
factors our potential customers consider in determining which drilling contractor to select. In addition, we believe the following factors are also
important:

      •    the type and condition of each of the competing drilling rigs;

      •    the mobility and efficiency of the rigs;

      •    the quality of service and experience of the rig crews;

      •    the offering of ancillary services; and

      •    the ability to provide drilling equipment adaptable to, and personnel familiar with, new technologies and drilling techniques.

      While we must be competitive in our pricing, our competitive strategy generally emphasizes the quality of our equipment and the
experience of our rig crews to differentiate us from our competitors. This strategy is less effective as lower demand for drilling services or an
oversupply of rigs usually results in increased price competition and makes it more difficult for us to compete on the basis of factors other than
price. In all of the markets in which we compete, an oversupply of rigs can cause greater price competition.

      Contract drilling companies compete primarily on a regional basis, and the intensity of competition may vary significantly from region to
region at any particular time. If demand for drilling services improves in a region where we operate, our competitors might respond by moving
in suitable rigs from other regions. An influx of rigs from other regions could rapidly intensify competition and reduce profitability.

     Many of our competitors have greater financial, technical and other resources than we do. Their greater capabilities in these areas may
enable them to:

      •    better withstand industry downturns;

      •    compete more effectively on the basis of price and technology;

      •    better retain skilled rig personnel; and

      •    build new rigs or acquire and refurbish existing rigs so as to be able to place rigs into service more quickly than us in periods of high
           drilling demand.

Raw Materials

      The materials and supplies we use in our drilling operations include fuels to operate our drilling equipment, drilling mud, drill pipe, drill
collars, drill bits and cement. We do not rely on a single source of supply for any of

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these items. While we are not currently experiencing any shortages, from time to time there have been shortages of drilling equipment and
supplies during periods of high demand.

       Shortages could result in increased prices for drilling equipment or supplies that we may be unable to pass on to customers. In addition,
during periods of shortages, the delivery times for equipment and supplies can be substantially longer. Any significant delays in our obtaining
drilling equipment or supplies could limit drilling operations and jeopardize our relations with customers. In addition, shortages of drilling
equipment or supplies could delay and adversely affect our ability to obtain new contracts for our rigs, which could have a material adverse
effect on our financial condition and results of operations.

Operating Risks and Insurance

      Our operations are subject to the many hazards inherent in the contract land drilling business, including the risks of:

      •    blowouts;

      •    fires and explosions;

      •    loss of well control;

      •    collapse of the borehole;

      •    lost or stuck drill strings; and

      •    damage or loss from natural disasters.

      Any of these hazards can result in substantial liabilities or losses to us from, among other things:

      •    suspension of drilling operations;

      •    damage to, or destruction of, our property and equipment and that of others;

      •    personal injury and loss of life;

      •    damage to producing or potentially productive oil and natural gas formations through which we drill; and

      •    environmental damage.

       We seek to protect ourselves from some but not all operating hazards through insurance coverage. However, some risks are either not
insurable or insurance is available only at rates that we consider uneconomical. Those risks include pollution liability in excess of relatively
low limits. Depending on competitive conditions and other factors, we attempt to obtain contractual protection against uninsured operating
risks from our customers. However, customers who provide contractual indemnification protection may not in all cases have sufficient financial
resources or maintain adequate insurance to support their indemnification obligations. We can offer no assurance that our insurance or
indemnification arrangements will adequately protect us against liability or loss from all the hazards of our operations. The occurrence of a
significant event that we have not fully insured or indemnified against or the failure of a customer to meet its indemnification obligations to us
could materially and adversely affect our results of operations and financial condition. Furthermore, we may not be able to maintain adequate
insurance in the future at rates we consider reasonable.

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       Our insurance coverage includes property insurance on our rigs, drilling equipment and real property. Our insurance coverage for
property damage to our rigs and to our drilling equipment is based on a third party estimate of the appraised value of the rigs and drilling
equipment. The policy provides for a deductible on rigs of $1.0 million per occurrence and a $40.0 million aggregate stop loss. Our umbrella
liability insurance coverage is $25.0 million per occurrence and in the aggregate, with a deductible of $10,000 per occurrence. We believe that
we are adequately insured for public liability and property damage to others with respect to our operations. However, such insurance may not
be sufficient to protect us against liability for all consequences of well disasters, extensive fire damage or damage to the environment.

Employees

     As of February 28, 2006, we had approximately 1,400 employees. Approximately 145 of these employees are salaried administrative or
supervisory employees. The rest of our employees are hourly employees who operate or maintain our drilling rigs and rig-hauling trucks. The
number of hourly employees fluctuates depending on the number of drilling projects we are engaged in at any particular time. None of our
employees are subject to collective bargaining arrangements.

       Our operations require the services of employees having the technical training and experience necessary to obtain the proper operational
results. As a result, our operations depend, to a considerable extent, on the continuing availability of such personnel. Although we have not
encountered material difficulty in hiring and retaining qualified rig crews, shortages of qualified personnel are occurring in our industry. If we
should suffer any material loss of personnel to competitors or be unable to employ additional or replacement personnel with the requisite level
of training and experience to adequately operate our equipment, our operations could be materially and adversely affected. While we believe
our wage rates are competitive and our relationships with our employees are satisfactory, a significant increase in the wages paid by other
employers could result in a reduction in our workforce, increases in wage rates, or both. The occurrence of either of these events for a
significant period of time could have a material and adverse effect on our financial condition and results of operations.

Facilities

       Our corporate headquarters is located at 14313 North May Avenue, Oklahoma City, Oklahoma in an office building owned by our
affiliate, Gulfport. We lease approximately 2,500 square feet of space in the office building for which we pay Gulfport approximately $3,700
per month. This lease of office space is included in our administrative services agreement with Gulfport. The administrative services agreement
has a three-year term, and upon expiration, it will continue on a month-to-month basis until cancelled by either party with at least 30 days prior
written notice. The administrative services agreement is terminable (1) by us at any time with at least 30 days prior written notice to Gulfport
and (2) by either party if the other party is in material breach and such breach has not been cured within 30 days of receipt of written notice of
such default. See ―Certain Relationships and Related Party Transaction—Administrative Services Agreement and Lease of Space‖ for further
discussion regarding the administrative services agreement.

      We own or lease from unaffiliated third parties the following properties:

      •      a 13 acre yard used for equipment storage and the refurbishment of our inventoried rigs in Duncan, Oklahoma;

      •      a 15 acre yard, which includes an operations office, rig and equipment storage and a repair facility in Oklahoma City, Oklahoma;

      •      a 16 acre yard used for equipment storage and the refurbishment of our inventoried rigs in Oklahoma City, Oklahoma;

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      •    a 10 acre yard used as our trucking fleet headquarters in Noble, Oklahoma;

      •    a 10 acre yard used to dispatch trucks in Seminole, Oklahoma;

      •    a 5 acre yard used to dispatch trucks in Woodward, Oklahoma;

      •    a 13 acre yard which includes our machine shop used for drilling rig refurbishment, repair and maintenance in Oklahoma City,
           Oklahoma; and

      •    an 8 acre yard used for equipment storage and the refurbishment of our inventoried rigs in Woodward, Oklahoma.

      In connection with the Thomas acquisition, we leased the Duncan, Oklahoma yard for a six month term, with the right to extend the term
for an additional three years. We also obtained an option to purchase the yard at any time during the term for $175,000.

      In connection with the Big A Drilling acquisition, we leased an eight acre rig refurbishment yard located in Woodward, Oklahoma. The
lease has an initial term of six months, and we have the option to extend the initial term for a period of three years following the expiration of
the initial term. We have the option to purchase the leased premises at any time during the term of the lease for $200,000.

      We have entered into negotiations for the purchase of an office building in Oklahoma City, Oklahoma to serve as our corporate
headquarters. As currently contemplated, the closing would occur during the first quarter of 2007, although we would lease space in the
building prior to that time. We have not yet entered into any definitive agreement for this transaction and there can be no assurance that we
will.

Governmental Regulation

      Our operations are subject to stringent federal, state and local laws and regulations governing the protection of the environment and
human health and safety. Several such laws and regulations relate to the disposal of hazardous oilfield waste and restrict the types, quantities
and concentrations of such regulated substances that can be released into the environment. Several such laws also require removal and remedial
action and other cleanup under certain circumstances, commonly regardless of fault. Planning, implementation and maintenance of protective
measures are required to prevent accidental discharges. Spills of oil, natural gas liquids, drilling fluids and other substances may subject us to
penalties and cleanup requirements. Handling, storage and disposal of both hazardous and non-hazardous wastes are also subject to these
regulatory requirements. In addition, our operations are often conducted in or near ecologically sensitive areas, which are subject to special
protective measures and which may expose us to additional operating costs and liabilities for accidental discharges of oil, natural gas, drilling
fluids, contaminated water or other substances or for noncompliance with other aspects of applicable laws and regulations. Historically, we
have not been required to obtain environmental or other permits prior to drilling a well. Instead, the operator of the oil and gas property has
been obligated to obtain the necessary permits at its own expense.

      The federal Clean Water Act, as amended by the Oil Pollution Act, the federal Clean Air Act, the federal Resource Conservation and
Recovery Act, CERCLA, the Safe Drinking Water Act, OSHA and their state counterparts and similar statutes are the primary vehicles for
imposition of such requirements and for civil, criminal and administrative penalties and other sanctions for violation of their requirements. The
OSHA hazard communication standard, the Environmental Protection Agency ―community right-to-know‖ regulations under Title III of the
federal Superfund Amendment and Reauthorization Act and comparable state statutes require us to organize and report information about the
hazardous materials we use in our operations to employees, state and local government authorities and local citizens. In addition, CERCLA,
also known as the ―Superfund‖ law, and similar state statutes impose strict liability, without regard to fault or the legality of the original
conduct, on

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certain classes of persons who are considered responsible for the release or threatened release of hazardous substances into the environment.
These persons include the current owner or operator of a facility where a release has occurred, the owner or operator of a facility at the time a
release occurred and companies that disposed of or arranged for the disposal of hazardous substances found at a particular site. This liability
may be joint and several. Such liability, which may be imposed for the conduct of others and for conditions others have caused, includes the
cost of removal and remedial action as well as damages to natural resources. Few defenses exist to the liability imposed by environmental laws
and regulations. It is also not uncommon for third parties to file claims for personal injury and property damage caused by substances released
into the environment.

      Environmental laws and regulations are complex and subject to frequent changes. Failure to comply with governmental requirements or
inadequate cooperation with governmental authorities could subject a responsible party to administrative, civil or criminal action. We may also
be exposed to environmental or other liabilities originating from businesses and assets that we acquired from others. We are in substantial
compliance with applicable environmental laws and regulations and, to date, such compliance has not materially affected our capital
expenditures, earnings or competitive position. We do not expect to incur material capital expenditures in our next fiscal year in order to
comply with current or reasonably anticipated environment control requirements. However, our compliance with amended, new or more
stringent requirements, stricter interpretations of existing requirements or the future discovery of regulatory noncompliance or contamination
may require us to make material expenditures or subject us to liabilities that we currently do not anticipate.

      In addition, our business depends on the demand for land drilling services from the oil and natural gas industry and, therefore, is affected
by tax, environmental and other laws relating to the oil and natural gas industry generally, by changes in those laws and by changes in related
administrative regulations. It is possible that these laws and regulations may in the future add significantly to our operating costs or those of our
customers or otherwise directly or indirectly affect our operations.

Legal Proceedings

      We are plaintiffs in a lawsuit involving Atoka Operating, Inc., the defendant, originally filed by us on September 7, 2004 in the 15th
Judicial District Court, Grayson County, Texas. This is a breach of contract suit or, alternatively, a suit on a sworn account wherein we sued the
defendant for $942,000 as a result of the defendant’s refusal to make payment pursuant to the terms of a drilling contract. The defendant filed a
counterclaim on October 11, 2004 for damages in excess of $2.8 million, alleging breach of contract, negligence, gross negligence and breach
of warranties. Discovery is ongoing and a trial date of August 14, 2006 has been set. We are vigorously prosecuting our claims and defending
against the counterclaims in this matter and will continue to file appropriate responses, motions and documents as necessary. It is not possible
to predict the outcome of this matter.

     Due to the nature of our business, we are, from time to time, involved in routine litigation or subject to disputes or claims related to our
business activities, including workers’ compensation claims and employment related disputes. In the opinion of our management, with the
exception of the matter discussed in the prior paragraph, none of the pending litigation, disputes or claims against us, if decided adversely, will
have a material adverse effect on our financial condition or results of operations.

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                                                                 MANAGEMENT

Executive Officers and Directors

      Set forth below is the name, age, position and a brief account of the business experience of each of our executive officers and directors.

                               Name                        Age                                  Position

                D. Frank Harrison                           58      Chief Executive Officer, President and Director
                Zachary M. Graves                           30      Chief Financial Officer, Secretary and Treasurer
                Karl W. Benzer                              55      Chief Operating Officer
                Mike Liddell                                52      Chairman of the Board and Director
                David L. Houston                            53      Director
                Phillip Lancaster                           48      Director
                William R. Snipes                           53      Director

      D. Frank Harrison has served as served as Chief Executive Officer and a director of our company since May 2005 and as President since
August 2005. Mr. Harrison served as President of Harding & Shelton, Inc., a privately held oil and natural gas exploration, drilling and
development firm, from 1999 to 2002. From 2002 to 2005, Mr. Harrison served as an agent for the purchase and sale of oil and gas properties
for entities controlled by Wexford. He graduated from Oklahoma State University with a Bachelor of Science degree in Sociology.

     Zachary M. Graves has served as Chief Financial Officer, Secretary and Treasurer of our company since April 2005. He previously
served as our Controller and the Controller of Gulfport from April 2003 to March 2005. Prior to joining our company, Mr. Graves served as an
accountant with KPMG LLP from August 2000 to April 2003. He received a Bachelor of Business Administration degree in Accounting from
the University of Oklahoma and is a licensed Certified Public Accountant.

       Karl W. Benzer has served as our Chief Operating Officer since August 2005. From 2002 to August 2005, Mr. Benzer served as a Vice
President and Division Manager of Unit Drilling Co., a privately held oil and natural gas land drilling company. From 1994 to 2001,
Mr. Benzer served as the Senior Vice President of UTI Drilling L.P. and manager of Southland Drilling Company, Ltd and UTI Central
Purchasing. UTI Energy Corp. was a publicly held oil and natural gas land drilling company that subsequently merged with Patterson Energy,
Inc., a publicly held oil and natural gas land drilling company. Mr. Benzer graduated from the University of Rhode Island with a Bachelor of
Science degree in Mechanical Engineering and a Master of Business Administration.

     Mike Liddell has served as the Chairman of the Board and a director of our company since May 2005. Mr. Liddell has served as a director
of Gulfport Energy Corporation since July 1997, as its Chief Executive Officer since April 1998, as its Chairman of the Board since July 1998
and as its President from July 2000 to December 2005. Mr. Liddell has served as the Chairman of the Board and a director of Windsor Energy
Resources, Inc. since December 2005. He received a Bachelor of Science degree in Education from Oklahoma State University.

      David L. Houston has served as a director of our company since May 2005. Since 1991, Mr. Houston has been the principal financial
advisor of Houston Financial, a firm that offers life and disability insurance, compensation and benefits plans and estate planning. He currently
serves on the board of directors of Gulfport Energy Corporation and the board of directors and executive committee of Deaconess Hospital,
located in Oklahoma City, Oklahoma. Mr. Houston is the former chair of the Oklahoma State Ethics Commission and the Oklahoma League of
Savings Institutions. He received a Bachelor of Science degree in Business from Oklahoma State University and a graduate degree in Banking
from Louisiana State University.

      Phillip Lancaster has served as a director of our company since July 2005. Since April 2000, Mr. Lancaster’s has served as a managing
director for a sports facility in Dallas, Texas which is affiliated with ClubCorp. Mr. Lancaster is a founder and has served as a director of three
Australian companies, Ozpride Pty
LTD., Texoz Pty LTD and Magipark Pty LTD since 1996, 1994 and 1990, respectively. The principal business of

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these companies is real-estate investment and property management in Australia. Mr. Lancaster was the managing partner of Lankin Drilling
Fund, Inc. from 1985 through 1999. Mr. Lancaster received a Bachelor of Science degree in Sociology from David Lipscomb College in 1978.

      William R. Snipes has served as a director of our company since February 2006. Mr. Snipes has served as the owner and President of
Snipes Insurance Agency, Inc., an independent insurance agency concentrating in property and liability insurance, since 1991. From 1981 to
1991, Mr. Snipes was the owner and President of William R. Snipes, CPA, Inc., a public accounting firm concentrating in financial accounting
and tax services. He received a Bachelor of Science degree and a Masters degree in Accounting from Oklahoma State University and is a
licensed Certified Public Accountant.

Our Board of Directors and Committees

       Our board of directors currently consists of five directors. Our directors generally serve one-year terms from the time of their election
until the next annual meeting of stockholders or until their successors are duly elected and qualified.

      Our board of directors has established an audit committee whose functions include the following:

      •    assist the board of directors in its oversight responsibilities regarding (1) the integrity of our financial statements, (2) our risk
           management compliance with legal and regulatory requirements, (3) our system of internal controls regarding finance and
           accounting and (4) our accounting, auditing and financial reporting processes generally, including the qualifications, independence
           and performance of the independent auditor;

      •    prepare the report required by the SEC for inclusion in our annual proxy or information statement;

      •    appoint, retain, compensate, evaluate and terminate our independent accountants;

      •    approve audit and non-audit services to be performed by the independent accountants; and

      •    perform such other functions as the board of directors may from time to time assign to the audit committee.

The specific functions and responsibilities of the audit committee are set forth in the audit committee charter.

      Michael O. Thompson resigned from the audit committee on February 7, 2006 and as a member of our board of directors effective
February 28, 2006. Effective February 28, 2006, our board of directors acted by unanimous written consent to appoint William R. Snipes to
serve on our board of directors and appointed Mr. Snipes to serve on the audit committee. There are no agreements or understandings pursuant
to which Mr. Snipes was appointed as a member of our board of directors. Our audit committee currently includes three independent directors,
Mr. Houston, Mr. Snipes and Mr. Lancaster.

      Pursuant to our bylaws, our board of directors may, from time to time, establish other committees to facilitate the management of our
business and operations. Because we are considered to be controlled by Wexford under The Nasdaq National Market rules, we are eligible for
exemptions from provisions of these rules requiring that a majority of board be independent directors, nominating and corporate governance
and compensation committees composed entirely of independent directors and written charters addressing specified matters. We have elected to
take advantage of these exemptions. Upon consummation of this offering, however, we will cease to be a controlled company within the
meaning of these rules. Accordingly, we will be required to comply with these provisions after the specified transition periods.

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Director Compensation

      Prior to our initial public offering in August 2005, none of our directors received compensation for services rendered as a board member.
Following completion of our initial public offering, our non-employee directors are paid a monthly retainer of $1,000 and a per meeting
attendance fee of $500 and are reimbursed for all ordinary and necessary expenses incurred in the conduct of our business. Members of our
board of directors who are also officers or employees of our company do not receive compensation for their services as directors.

       In connection with our initial public offering, we implemented our 2005 Stock Incentive Plan. Under the plan, certain non-employee
directors were granted a nonqualified stock option to purchase 20,000 shares of our common stock at an exercise price of $17.00 per share, an
amount equal to the initial public offering price. Options granted to eligible non-employee directors under the plan vest in 36 equal monthly
installments beginning on the date of grant and are exercisable for a period of ten years beginning on the date of its grant.

Compensation Committee Interlocks and Insider Participation

    We do not currently have a compensation committee. None of our executive officers serves, or has served during the past year, as a
member of the board of directors or compensation committee of any other company that has one or more executive officers serving as a
member of our board of directors or compensation committee.

Executive Compensation

      The following table sets forth the compensation information earned during 2005 by our Chief Executive Officer and by the two most
highly compensated executive officers and one additional executive officer who would have been one of our most highly compensated
executive officer if he had continued to be employed with us as of December 31, 2005. We refer to these officers as our named executive
officers in other parts of this prospectus.

                                                                                                Long Term
                                                                                               Compensation
                                                                                                 Securities
Name and Principal                                                                              Underlying                 All Other
Position                           Year              Annual Compensation (1)                    Options (#)             Compensation (2)

                                                    Salary                   Bonus

D. Frank Harrison (3)              2005      $           126,017       $          200,000              200,000      $                2,000
  Chief Executive Officer &
  President
Karl W. Benzer (4)                 2005      $            49,945       $           75,000               70,000      $                  831
  Chief Operating Officer
Zachary M. Graves (5)              2005      $            66,843       $          115,000               60,000      $                1,081
  Chief Financial Officer
Steven C. Hale (6)                 2005      $           125,000       $           25,000                    —      $            4,000,000 (6)
  Former Chief Operating
     Officer

(1)   Amounts shown include cash and non-cash compensation earned and received by the named executives as well as amounts earned but
      deferred at their election. We provide various perquisites to certain employees, including the named executives. In each case, the
      aggregate value of the perquisite provided to the named executives did not exceed $50,000 or 10% of such named executive’s total
      annual salary and bonus.

(2)   Amounts represent our matching contributions to our 401(k) Plan.

(3)   Mr. Harrison joined us in May 2005 with a salary of $200,000. His current salary is $300,000.

(4)   Mr. Benzer joined us in August 2005 with a salary of $180,000. His current salary is $200,000.

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(5)   Mr. Graves joined us in April 2005 with a salary of $135,000. His current salary is $190,000.

(6)   Mr. Hale served as our President beginning in June 2001 and as our Chief Operating Officer beginning in April 2005 and resigned in
      August 2005. Under the terms of an agreement between Bronco Drilling Holdings, L.L.C., an entity controlled by Wexford, and
      Mr. Hale, following successful completion of our initial public offering, Mr. Hale was entitled to receive the sum of $2.0 million and
      shares of our common stock having a market value of $2.0 million based on the initial public offering price. These payments were made
      by Bronco Drilling Holdings and not by us. We accounted for these payments as a capital contribution to us in the amount of $4.0 million
      and compensation expense in the amount of $4.0 million during the third quarter of 2005, the period in which such obligations were
      incurred.

Option Grants in Last Fiscal Year

     The following table sets forth certain information concerning option grants made to the named executive officers during 2005 pursuant to
our 2005 Stock Incentive Plan.

                                                                                                                Potential Realizable Value
                                                                                                               at Assumed Annual Rates of
                                                                                                                 Stock Price Appreciation
                                                        Individual Grants                                         for Option Term($)(2)

                                                    Percentage
                               Number of              of Total
                               Securities             Options
                               Underlying           Granted to               Exercise
                                Options            Employees in                Price      Expiration
                               Granted(#)          Fiscal Year(1)             ($/Sh)        Date                 5%                    10%

D. Frank Harrison                   200,000                       35 % $         17.00       8/16/2010     $       939,357      $       2,075,734
Karl W. Benzer                       70,000                       12 % $         18.70       8/25/2010     $       361,653      $         799,158
Zachary M. Graves                    60,000                       10 % $         17.00       8/16/2010     $       281,807      $         622,720
Steven C. Hale                           —                        —                 —               —                   —                      —

(1)   In 2005, we granted options to purchase a total of 574,500 shares of common stock at exercise prices ranging from $17.00 to $25.51 per
      share.

(2)   In accordance with SEC rules, the amounts shown on this table represent hypothetical gains that could be achieved for the options if
      exercised at the end of the option term. These gains are based on the assumed rates of stock appreciation of 5% and 10% compounded
      annually from the date the options were granted to their expiration date and do not reflect our estimates or projections of the future price
      of our common stock. The gains shown are net of the option exercise price, but do not include deductions for taxes or other expenses
      associated with the exercise. Actual gains, if any, on stock option exercises will depend on the future performance of our common stock,
      the option holder’s continued employment through the option period, and the date on which the options are exercised.

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Option Exercises in Last Fiscal Year

    The following table sets forth certain information concerning all unexercised options held by the named executive officers as of
December 31, 2005. None of the named executive officers exercised any options during 2005.

                           Shares
                          Acquired                                    Number of Unexercised                        Value of Unexercised
                             on                Value                       Options at                            In-the-Money Options at
                         Exercise(#)         Realized($)               Fiscal Year-End(#)                         Fiscal Year-End($)(1)

Name                                                             Exercisable         Unexercisable            Exercisable          Unexercisable

D. Frank Harrison                    —                   —              22,222                177,778     $        133,554     $         1,068,446
Karl W. Benzer                       —                   —               7,778                 62,222     $         33,523     $           268,177
Zachary M. Graves                    —                   —               6,667                 53,333     $         40,069     $           320,531
Steven C. Hale                       —                   —                  —                      —                    —                       —

(1)   Value for ―in-the-money‖ options represents the positive spread between the respective exercise prices of outstanding options and the
      closing price of the shares of common stock on The Nasdaq National Market of $23.01 per share on December 30, 2005.

2005 Stock Incentive Plan

      We have implemented our 2005 Stock Incentive Plan. The purpose of the plan is to enable our company, and any of its affiliates, to
attract and retain the services of the types of employees, consultants and directors who will contribute to our long range success and to provide
incentives which are linked directly to increases in share value which will inure to the benefit of our stockholders. The plan provides a means
by which eligible recipients of awards may be given an opportunity to benefit from increases in value of our common stock through the
granting of incentive stock options and nonstatutory stock options.

      Eligible award recipients are employees, consultants and directors of our company and its affiliates. Incentive stock options may be
granted only to our employees. Awards other than incentive stock options may be granted to employees, consultants and directors. The shares
that may be issued pursuant to awards consist of our authorized but unissued common stock, and the maximum aggregate amount of such
common stock which may be issued upon exercise of all awards under the plan, including incentive stock options, may not exceed 1,000,000
shares, subject to adjustment to reflect certain corporate transactions or changes in our capital structure.

      We have granted options to employees and certain non-employee directors to purchase a total of 654,500 shares of our common stock
under the plan, including option grants covering a total of 200,000 shares to D. Frank Harrison, 60,000 shares to Zachary M. Graves and 70,000
shares to Karl M. Benzer. These options have a weighted average exercise price of $19.55 per share, have a term of ten years and vest in 36
equal monthly installments beginning on the date of grant. In addition, we have granted options to eligible non-employee directors as described
in ―—Director Compensation‖ above.

Employment Agreements

       On August 25, 2005, we entered into an employment agreement with Karl W. Benzer, our Chief Operating Officer. The agreement has a
five year term and provided for an initial base salary of $180,000 per year which was increased to $200,000 per year effective January 1, 2006.
Under the agreement, Mr. Benzer will be eligible to receive, but is not guaranteed, salary increases, based upon merit (as determined by our
Chief Executive Officer), our financial performance (as determined by our monthly profit and loss statements), market conditions and other
industry factors. The agreement provides for a one-time year-end bonus of $50,000 which was paid on December 31, 2005, and a one-time,
first-quarter bonus of $40,000 which was paid on January 16, 2006, subject

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to certain forfeiture conditions. Beginning in 2006, Mr. Benzer will also be eligible for bonuses based upon merit, financial performance,
market conditions and other industry factors. The agreement also grants Mr. Benzer an option to purchase 70,000 shares of our common stock
at a price of $18.70 per share. If we terminate Mr. Benzer’s employment without cause, Mr. Benzer is entitled to severance pay equal to the
base salary earned under the agreement through the date of such termination without cause, and base salary for the remainder of the term of the
agreement. Mr. Benzer will also be permitted to exercise stock options then vested within ten days of such termination without cause by us.
The agreement provides that during the five-year term of Mr. Benzer’s employment with us and for a period of two years thereafter or, if
longer, a period of two years following the termination of Mr. Benzer’s employment with us, Mr. Benzer will not recruit, solicit, encourage or
induce any employees of ours or our affiliates to terminate their employment or otherwise disrupt any employees relationship with us or our
affiliates or hire, employ or offer employment to any person who is or was employed by us or any of our affiliates. Mr. Benzer is also
prohibited, during the five-year term of his employment with us and for a period of two years thereafter, or, if longer, a period of two years
following the termination of Mr. Benzer’s employment with us, from soliciting any past or current customer, supplier or any other person with
a business relationship with us to cease doing business with us.

      In connection with our initial public offering, we entered into an employment agreement with Steven C. Hale, our former President and
Chief Operating Officer. Mr. Hale resigned from his positions with us in August 2005. His employment agreement provided for an annual base
salary of $175,000 during its one-year term. The employment agreement also provided that in the event that Mr. Hale was terminated by us
without cause, Mr. Hale would have been entitled to severance pay in an aggregate amount equal to three months of his then current base
salary. No severance payments were due, payable or made to Mr. Hale by us under the employment agreement or otherwise. Under the
employment agreement, Mr. Hale is prohibited, for a period of five years following the termination of Mr. Hale’s employment, from directly or
indirectly disclosing any confidential information Mr. Hale obtained as a result of his employment. Mr. Hale is also prohibited, for a period of
12 months following his termination of employment with us, from soliciting the business of any established customer of ours in the United
States or soliciting, enticing, persuading or inducing any employee, agent or representative of ours to terminate such person’s relationship with
us or to become employed by any business or person other than us or hire or retain any such person.

      Under the terms of an agreement between Bronco Drilling Holdings, L.L.C. and Mr. Hale, following successful completion of our initial
public offering, Mr. Hale was entitled to receive the sum of $2.0 million and shares of our common stock having a market value of $2.0 million
based on the initial public offering price. These payments were made by Bronco Drilling Holdings and not by us. We accounted for these
payments as a capital contribution to us in the amount of $4.0 million and compensation expense in the amount of $4.0 million during the third
quarter of 2005, the period in which such obligations were incurred.

Limitations of Liability and Indemnification of Directors and Officers

Certificate of Incorporation and Bylaws

      Our certificate of incorporation provides that no director shall be personally liable to us or any of our stockholders for monetary damages
resulting from breaches of their fiduciary duty as directors, except to the extent such limitation on or exemption from liability is not permitted
under the Delaware General Corporation Law, or DGCL. The effect of this provision of our certificate of incorporation is to eliminate our
rights and those of our stockholders (through stockholders’ derivative suits on our behalf) to recover monetary damages against a director for
breach of the fiduciary duty of care as a director, including breaches resulting from negligent or grossly negligent behavior, except, as restricted
by the DGCL:

      •    for any breach of the director’s duty of loyalty to the company or its stockholders;

      •    for acts or omissions not in good faith or that involve intentional misconduct or a knowing violation of law;

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      •    in respect of certain unlawful dividend payments or stock redemptions or repurchases; and

      •    for any transaction from which the director derives an improper personal benefit.

This provision does not limit or eliminate our rights or the rights of any stockholder to seek non-monetary relief, such as an injunction or
rescission, in the event of a breach of a director’s duty of care.

      Our certificate of incorporation also provides that we will, to the fullest extent permitted by Delaware law, indemnify our directors and
officers against losses that they may incur in investigations and legal proceedings resulting from their service.

       Our bylaws include provisions relating to advancement of expenses and indemnification rights consistent with those provided in our
certificate of incorporation. In addition, our bylaws provide:

      •    for a right of indemnitee to bring a suit in the event a claim for indemnification or advancement of expenses is not paid in full by us
           within a specified period of time; and

      •    permit us to purchase and maintain insurance, at our expense, to protect us and any of our directors, officers and employees against
           any loss, whether or not we would have the power to indemnify that person against that loss under Delaware law.

Liability Insurance and Indemnification Agreements

       We have obtained liability insurance for our current directors and officers. We have also entered into contractual indemnification
arrangements with our directors and executive officers under which we have agreed, in certain circumstances, to compensate them for costs and
liabilities incurred in actions brought against them while acting as directors or executive officers of our company.

     At present, there is no pending litigation or proceeding involving any of our directors, officers or employees for which indemnification
from us is sought. We are not aware of any threatened litigation that may result in claims for indemnification from us.

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                                CERTAIN RELATIONSHIPS AND RELATED PARTY TRANSACTIONS

Administrative Services Agreement and Lease of Space

      Effective April 1, 2005, we entered into an administrative services agreement with Gulfport Energy Corporation. Under this agreement,
Gulfport agreed to provide certain services to us, including accounting, human resources, legal and technical support services. In return for
these services, we agreed to pay Gulfport an annual fee of approximately $414,000 payable in equal monthly installments during the term of
this agreement. In addition, we leased approximately 1,200 square feet of office space from Gulfport for our headquarters located in Oklahoma
City, Oklahoma for which we paid Gulfport annual rent of $20,880 in equal monthly installments. The services we receive under the
administrative services agreement and the fees for such services can be amended by mutual agreement of the parties. In January 2006, we
reduced the level of administrative services being provided by Gulfport and increased our office space to approximately 2,500 square feet. As a
result, our annual fee for administrative services was reduced to approximately $150,000 and our annual rental was increased to approximately
$44,000. The administrative services agreement has a three-year term, and upon expiration of that term the agreement will continue on a
month-to-month basis until cancelled by either party with at least 30 days prior written notice. The administrative services agreement is
terminable (1) by us at any time with at least 30 days prior written notice to Gulfport and (2) by either party if the other party is in material
breach and such breach has not been cured within 30 days of receipt of written notice of such breach. Prior to entry into this administrative
services agreement, we reimbursed Gulfport for its dedicated employee time, office space and general and administrative costs based upon the
pro rata share of time its employees spend performing services for us. In 2005, 2004 and 2003, we made payments to Gulfport for such services
and overhead totaling approximately $353,000, $115,000, and $33,000, respectively. Three of our directors, Mike Liddell, David L. Houston
and Phil Lancaster, are also directors of Gulfport and Mr. Liddell is Gulfport’s Chairman. Wexford and its affiliates together own a majority of
the outstanding common stock of Gulfport.

Credit Facilities

      On July 1, 2004, we entered into a revolving line of credit with International Bank of Commerce with a borrowing base of the lesser of
$2.0 million or 80% of current receivables. Our performance obligations under this credit facility were guaranteed by Wexford Partners VI,
L.P., a fund controlled by Wexford, and Taurus Investors, LLC, a member of our predecessor company that is also controlled by Wexford.
Borrowings under this line bore interest at a rate equal to the greater of 4.0% or JPMorgan Chase prime. Accrued but unpaid interest was
payable monthly. On January 1, 2005, we amended our line of credit with International Bank of Commerce to increase the borrowing base to
the lesser of $3.0 million or 80% of current receivables. The line of credit had a maturity date of November 1, 2006. At December 31, 2005,
our outstanding borrowings under this line of credit were $3.0 million. We repaid all outstanding borrowings under this line of credit in January
2006 with borrowings under our new revolving facility and the line of credit was terminated.

      On February 15, 2005, we entered into a $5.0 million revolving credit facility with Solitair LLC, an entity controlled by Wexford.
Borrowings under this facility bore interest at a rate equal to LIBOR plus 5.0%. Payments of principal and accrued but unpaid interest were due
on the maturity date of the credit facility. In connection with the amendment of our senior credit facility with GECC on April 22, 2005, Solitair
entered into a subordination agreement which, among other thing, effectively amended the maturity date of its loan to the later of (1) six
months after the actual maturity date of our credit facility with GECC and (2) December 1, 2010. We repaid all $5.0 million of outstanding
borrowings under this credit facility on August 22, 2005 with a portion of the proceeds from our initial public offering and the facility was
terminated.

     On June 30, 2005, we borrowed $13.0 million from Alpha Investors LLC, an entity controlled by Wexford, to fund a portion of our
acquisitions of 100% of the membership interests in Strata Drilling, L.L.C. and Strata Property, L.L.C. and a related rig yard for an aggregate
of $20.0 million. The outstanding principal balance of the loan plus accrued but unpaid interest was due in full upon the earlier to occur of the
completion of our initial

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public offering and the maturity of the loan on July 1, 2006. Borrowings under our loan with Alpha bore interest at a rate equal to LIBOR plus
5% until September 30, 2005, and thereafter at a rate equal to LIBOR plus 7.5%. We repaid this loan in full on August 22, 2005 with a portion
of the proceeds from our initial public offering.

      On October 14, 2005, we borrowed $50.0 million from Theta Investors LLC, an entity controlled by Wexford, to fund a portion of the
purchase price for the Thomas acquisition. The loan provided for maximum aggregate borrowings of up to $60.0 million that bore interest at a
rate equal to LIBOR plus 400 basis points until December 15, 2005 and, thereafter, at a rate equal to LIBOR plus 600 basis points. Payment of
principal and accrued but unpaid interest was due on October 15, 2006. Our obligations under the Theta loan were guaranteed by each of our
principal subsidiaries. We borrowed $50.0 million under this loan on October 14, 2005. We repaid this facility in full on November 3, 2005,
with a portion of the proceeds from our follow-on public offering which closed on November 2, 2005.

Drilling Services

       During 2003, 2004 and 2005, we received $184,000, $0 and $2.5 million, respectively, for drilling services rendered to Windsor Energy
Group, LLC, an affiliate of Wexford. On January 26, 2006, we entered into a term contract with Windsor, in which we agreed to provide
Windsor a drilling rig for a period of two years. Under the terms of this contract, Windsor agreed to pay us a day work rate of $21,000 for the
first twelve months of the contract term and a day work rate of $23,000 for the subsequent twelve months of the contract term.

Consulting Agreement with Michael O. Thompson

       Effective February 28, 2006, Michael O. Thompson resigned from his positions as a member of our board of directors. In connection with
his resignation, we entered into a consulting agreement with Mr. Thompson under which Mr. Thompson has agreed to provide us with
consulting services for a period of approximately 30 months. Although Mr. Thompson will not receive any additional compensation for
providing these services to us, the stock options granted to him under our 2005 Stock Incentive Plan will continue to vest in accordance with
their terms.

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                                                PRINCIPAL AND SELLING STOCKHOLDERS

      The following table sets forth certain information regarding the beneficial ownership of our common stock as of the date hereof, before
and after this offering by:

      •     each of our directors;

      •     each of our named executive officers;

      •     all of our directors and executive officers as a group;

      •     each person, or group of affiliated persons, known to us to beneficially own 5% or more of our outstanding common stock; and

      •     the selling stockholder.

      Except as otherwise indicated, the beneficial owners named in the table below have sole voting and investment power with respect to all
shares of capital stock held by them.

                                Beneficial Ownership Prior                 Shares to be Sold         Beneficial Ownership Immediately
          Name                          to Offering                         in the Offering                  After the Offering

                             Number                 Percent (1)                                    Number                    Percent (1)

5% Stockholders:
Bronco Drilling
  Holdings, L.L.C. (2)          13,092,353                        56.3 %             1,300,000          11,792,353                              47.3 %
Wellington
  Management
  Company, LLP (3)               1,224,027                         5.3 %                       —         1,224,027                               4.9 %
Directors and Named
Executive Officers:
D. Frank Harrison (4)                 55,556                          *                        —             50,000                               *
Mike Liddell (2)                          —                           *                        —                 —                                *
David L. Houston (5)                   5,556                          *                        —              5,000                               *
Phillip Lancaster (5)                  5,556                          *                        —              5,000                               *
William R. Snipes                         —                           *                        —                 —                                *
Karl W. Benzer (6)                    17,500                          *                        —             17,500                               *
Zachary M. Graves (7)                 16,667                          *                        —             15,000                               *
Steven C. Hale                       117,647                          *                        —            117,647                               *
Directors and
  executive officers as
  a group
  (7 persons) (8)                    100,833                          *                        —             92,500                               *


*     Less than 1%

(1)   Percentage of beneficial ownership is based upon 23,237,939 shares of common stock outstanding prior to the offering, and 24,937,939
      shares of common stock outstanding after the offering. The table assumes no exercise of the underwriters’ overallotment option. For
      purposes of this table, a person or group of persons is deemed to have ―beneficial ownership‖ of any shares which such person owns or
      has the right to acquire within 60 days. For purposes of computing the percentage of outstanding shares held by each person or group of
      persons named above, any security which such person or group of persons has the right to acquire within 60 days is deemed to be
      outstanding for the purpose of computing the percentage ownership for such person or persons, but is not deemed to be outstanding for
      the purpose of computing the percentage ownership of any other person. As a result, the denominator used in calculating the beneficial
      ownership among our stockholders may differ.

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(2)   Wexford Capital LLC is the sole manager of Bronco Drilling Holdings, L.L.C., or Holdings, and controls three limited liability
      companies that own membership interests in Holdings. We refer to these three companies as the Wexford members. The remaining
      membership interests are owned by Mike Liddell. The Wexford members have the exclusive authority to appoint the manager to manage
      and act on behalf of Holdings. Mr. Liddell has no power or authority to act for or on behalf of Holdings or make decisions with respect to
      the shares of our company owned by Holdings. All distributions made by Holdings are first paid to the Wexford members pro rata until
      they have received amounts equal to their capital contributions in Holdings, which currently aggregate approximately $62.9 million.
      Thereafter, distributions are to be made 90% to the Wexford members and 10% to Mr. Liddell. Wexford Capital may, by reason of its
      status as manager of Holdings, be deemed to own beneficially the interest in the shares of our common stock of which Holdings
      possesses beneficial ownership. Each of Charles E. Davidson and Joseph M. Jacobs may, by reason of his status as a controlling person
      of Wexford, be deemed to beneficially own the interests in the shares of our common stock of which Holdings possesses beneficial
      ownership. Each of Charles E. Davidson, Joseph M. Jacobs and Wexford shares the power to vote and to dispose of the interests in the
      shares of our common stock beneficially owned by Holdings. Each of Messrs. Davidson and Jacobs disclaims beneficial ownership of
      the shares of our common stock owned by Holdings and Wexford. Wexford’s address is Wexford Plaza, 411 West Putnam Avenue,
      Greenwich, Connecticut 06830.

(3)   Based solely upon information obtained from Schedule 13G filed with the SEC on February 14, 2006 on behalf of Wellington
      Management Company, LLP, or Wellington, Wellington, in its capacity as investment advisor, has shared power to vote or to direct the
      vote with respect to 650,612 shares of our common stock and has shared power to dispose or to direct the disposition of 1,224,027 shares
      of our common stock. These shares are owned of record by clients of Wellington which have the right to receive, or the power to direct
      the receipt of, dividends from, or the proceeds from the sale of, these shares. Wellington’s address is 75 State Street, Boston,
      Massachusetts 02109.

(4)   Includes 55,556 shares beneficially owned under options that are currently exercisable or will become exercisable within 60 days after
      the date hereof.

(5)   Includes 5,556 shares beneficially owned under options that are currently exercisable or will become exercisable within 60 days after the
      date hereof.

(6)   Includes 17,500 shares beneficially owned under options that are currently exercisable or will become exercisable within 60 days after
      the date hereof.

(7)   Includes 16,667 shares beneficially owned under options that are currently exercisable or will become exercisable within 60 days after
      the date hereof.

(8)   Includes 100,833 shares beneficially owned by the directors and executive officers under options that are currently exercisable or will
      become exercisable within 60 days after the date hereof.

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                                                      DESCRIPTION OF CAPITAL STOCK

      The following description of our common stock, amended and restated certificate of incorporation and our bylaws are summaries thereof
and are qualified by reference to our certificate of incorporation and our bylaws as so amended and restated, copies of which will be filed with
the SEC as exhibits to the registration statement of which this prospectus is a part.

      Our authorized capital stock consists of 100,000,000 shares of common stock, par value $0.01 per share, and 1,000,000 shares of
preferred stock, par value $0.01 per share. Our shares of common stock are quoted on The Nasdaq National Market.

Common Stock

      Holders of shares of common stock are entitled to one vote per share on all matters submitted to a vote of stockholders. Shares of
common stock do not have cumulative voting rights, which means that the holders of more than 50% of the shares voting for the election of the
board of directors can elect all the directors to be elected at that time, and, in such event, the holders of the remaining shares will be unable to
elect any directors to be elected at that time. Our certificate of incorporation denies stockholders any preemptive rights to acquire or subscribe
for any stock, obligation, warrant or other securities of ours. Holders of shares of our common stock have no redemption or conversion rights
nor are they entitled to the benefits of any sinking fund provisions.

       In the event of our liquidation, dissolution or winding up, holders of shares of common stock shall be entitled to receive, pro rata, all the
remaining assets of our company available for distribution to our stockholders after payment of our debts and after there shall have been paid to
or set aside for the holders of capital stock ranking senior to common stock in respect of rights upon liquidation, dissolution or winding up the
full preferential amounts to which they are respectively entitled.

      Holders of record of shares of common stock are entitled to receive dividends when and if declared by the board of directors out of any
assets legally available for such dividends, subject to both the rights of all outstanding shares of capital stock ranking senior to the common
stock in respect of dividends and to any dividend restrictions contained in debt agreements.

Preferred Stock

      Our board of directors is authorized to issue up to 1,000,000 shares of preferred stock in one or more series. The board of directors may
fix for each series:

      •    the distinctive serial designation and number of shares of the series;

      •    the voting powers and the right, if any, to elect a director or directors;

      •    the terms of office of any directors the holders of preferred shares are entitled to elect;

      •    the dividend rights, if any;

      •    the terms of redemption, and the amount of and provisions regarding any sinking fund for the purchase or redemption thereof;

      •    the liquidation preferences and the amounts payable on dissolution or liquidation;

      •    the terms and conditions under which shares of the series may or shall be converted into any other series or class of stock or debt of
           the corporation; and

      •    any other terms or provisions which the board of directors is legally authorized to fix or alter.

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      We do not need stockholder approval to issue or fix the terms of the preferred stock. The actual effect of the authorization of the preferred
stock upon your rights as holders of common stock is unknown until our board of directors determines the specific rights of owners of any
series of preferred stock. Depending upon the rights granted to any series of preferred stock, your voting power, liquidation preference or other
rights could be adversely affected. Preferred stock may be issued in acquisitions or for other corporate purposes. Issuance in connection with a
stockholder rights plan or other takeover defense could have the effect of making it more difficult for a third party to acquire, or of
discouraging a third party from acquiring, control of our company. We have no present plans to issue any shares of preferred stock.

Anti-takeover Effects of Provisions of Our Certificate of Incorporation and Our Bylaws

      Some provisions of our certificate of incorporation and our bylaws contain provisions that could make it more difficult to acquire us by
means of a merger, tender offer, proxy contest or otherwise, or to remove our incumbent officers and directors. These provisions, summarized
below, are expected to discourage coercive takeover practices and inadequate takeover bids. These provisions are also designed to encourage
persons seeking to acquire control of us to first negotiate with our board of directors. We believe that the benefits of increased protection of our
potential ability to negotiate with the proponent of an unfriendly or unsolicited proposal to acquire or restructure us outweigh the disadvantages
of discouraging such proposals because negotiation of such proposals could result in an improvement of their terms.

      Undesignated preferred stock . The ability to authorize and issue undesignated preferred stock may enable our board of directors to
render more difficult or discourage an attempt to change control of us by means of a merger, tender offer, proxy contest or otherwise. For
example, if in the due exercise of its fiduciary obligations, the board of directors were to determine that a takeover proposal is not in our best
interest, the board of directors could cause shares of preferred stock to be issued without stockholder approval in one or more private offerings
or other transactions that might dilute the voting or other rights of the proposed acquirer or insurgent stockholder or stockholder group.

     Stockholder meetings . Our certificate of incorporation and bylaws provide that a special meeting of stockholders may be called only by
the Chairman of the Board, the Chief Executive Officer or by a resolution adopted by a majority of our board of directors.

      Requirements for advance notification of stockholder nominations and proposals . Our bylaws establish advance notice procedures with
respect to stockholder proposals and the nomination of candidates for election as directors, other than nominations made by or at the direction
of the board of directors.

      Stockholder action by written consent. Our certificate of incorporation and bylaws provide that, except as may otherwise be provided
with respect to the rights of the holders of preferred stock, no action that is required or permitted to be taken by our stockholders at any annual
or special meeting may be effected by written consent of stockholders in lieu of a meeting of stockholders, unless the action to be effected by
written consent of stockholders and the taking of such action by such written consent have expressly been approved in advance by our board.
This provision, which may not be amended except by the affirmative vote of holders of at least 66 /3% of the voting power of all then
                                                                                                        2


outstanding shares of capital stock entitled to vote generally in the election of directors, voting together as a single class, makes it difficult for
stockholders to initiate or effect an action by written consent that is opposed by our board.

      Amendment of the bylaws. Under Delaware law, the power to adopt, amend or repeal bylaws is conferred upon the stockholders. A
corporation may, however, in its certificate of incorporation also confer upon the board of directors the power to adopt, amend or repeal its
bylaws. Our charter and bylaws grant our board the power to adopt, amend and repeal our bylaws at any regular or special meeting of the board
on the affirmative vote of a majority of the directors then in office. Our stockholders may adopt, amend or repeal our bylaws but only at any
regular or special meeting of stockholders by an affirmative vote of holders of at least 66 / 3 % of the voting
                                                                                               2




                                                                          75
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power of all then outstanding shares of capital stock entitled to vote generally in the election of directors, voting together as a single class.

       Removal of Director . Our certificate of incorporation and bylaws provide that members of our board of directors may only be removed
for cause and only by the affirmative vote of holders of at least 66 / 3 % of the voting power of all then outstanding shares of capital stock
                                                                      2


entitled to vote generally in the election of directors, voting together as a single class.

       Amendment of the Certificate of Incorporation. Our certificate of incorporation provides that, in addition to any other vote that may be
required by law or any preferred stock designation, the affirmative vote of the holders of at least 66 / 3 % of the voting power of all then
                                                                                                         2


outstanding shares of capital stock entitled to vote generally in the election of directors, voting together as a single class, is required to amend,
alter or repeal, or adopt any provision as part of our certificate of incorporation inconsistent with the provisions of our certificate of
incorporation dealing with distributions on our common stock, our board of directors, our bylaws, meetings of our stockholders or amendment
of our certificate of incorporation.

       The provisions of our certificate of incorporation and bylaws could have the effect of discouraging others from attempting hostile
takeovers and, as a consequence, they may also inhibit temporary fluctuations in the market price of our common stock that often result from
actual or rumored hostile takeover attempts. These provisions may also have the effect of preventing changes in our management. It is possible
that these provisions could make it more difficult to accomplish transactions which stockholders may otherwise deem to be in their best
interests.

Transfer Agent and Registrar

    Computershare Shareholder Services, Inc. and its subsidiary, EquiServe Trust Company, N.A., are the transfer agent and registrar for our
common stock.

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                                                SECURITIES ELIGIBLE FOR FUTURE SALE

      Future sales in the public markets of substantial amounts of common stock could adversely affect the market prices prevailing from time
to time for our common stock. It could also impair our ability to raise capital through future sales of equity securities.

      Upon completion of this offering, we will have 24,937,939 shares of our common stock outstanding, assuming no exercise of the
underwriters’ overallotment option. All of the shares sold in this offering will be freely tradable without restriction or further registration under
the Securities Act, except for shares, if any, which may be acquired by our ―affiliates‖ as that term is defined in Rule 144 under the Securities
Act. Persons who may be deemed to be affiliates generally include individuals or entities that control, are controlled by, or are under common
control with, us and may include our directors and officers as well as our significant stockholders, if any.

Lock-Up Agreements

      In connection with this offering, we, our officers and directors and Bronco Drilling Holdings, L.L.C., our largest stockholder and an
entity controlled by Wexford, will enter into lock-up agreements that prohibit us and these other individuals or entities, directly or indirectly,
from selling or otherwise disposing of any shares or securities convertible into shares for a period of 90 days after the date of this prospectus,
without the prior written consent of Jefferies & Company, Inc., subject to limited exceptions. Immediately following this offering, persons
subject to lock-up agreements will beneficially own 11,893,186 shares, representing approximately 47.7% of the then outstanding shares, or
approximately 46.8% if the underwriters’ overallotment option is exercised in full.

Rule 144

      In general, under Rule 144 as currently in effect, beginning 90 days after the completion of our initial public offering, a person who has
beneficially owned restricted securities for at least one year is entitled to sell within any three-month period the number of those restricted
securities that does not exceed the greater of:

      •    1% of the total number of shares then outstanding; and

      •    the average weekly trading volume of the shares on The Nasdaq National Market during the four calendar weeks preceding the filing
           of a notice on Form 144 with respect to such sale.

      Sales under Rule 144 are also subject to manner of sale provisions and notice requirements and to the availability of current public
information about us. Under Rule 144(k), a person that has not been one of our affiliates at any time during the three months preceding a sale,
and that has beneficially owned the shares proposed to be sold for at least two years, is entitled to sell those shares without regard to the
volume, manner of sale or other limitations contained in Rule 144.

Stock Options

      An aggregate of 1,000,000 shares of our common stock have been reserved for issuance pursuant to our 2005 Stock Incentive Plan, as
amended, 654,500 of which have been granted. We intend to file a registration statement on Form S-8 with respect to the issuance of all shares
issuable under the plan. Accordingly, shares issued pursuant to this plan will be freely tradable, except for any shares held by our affiliates, as
such term is defined by the SEC.

Registration Rights

      We have entered into a registration rights agreement with Bronco Drilling Holdings. Under the registration rights agreement, Bronco
Drilling Holdings has three demand registration rights, as well as ―piggyback‖

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registration rights. The demand rights enable Bronco Drilling Holdings to require us to register its shares of our common stock with the SEC at
any time, subject to the 90-day lock-up agreement it will enter into in connection with this offering. The piggyback rights will allow Bronco
Drilling Holdings to register the shares of our common stock that it owns along with any shares that we register with the SEC. These
registration rights are subject to customary conditions and limitations, including the right of the underwriters of an offering to limit the number
of shares.

      In connection with our Big A Drilling acquisition, we issued an aggregate of 72,571 shares of our common stock to the sellers. We have
agreed to file a registration statement on Form S-3 with the SEC on or about August 16, 2006 to facilitate the resale of those shares by the
sellers. Subject to certain exceptions, once the registration statement has been declared effective, we have agreed to use our commercially
reasonable efforts to keep it effective until all the shares have been sold thereunder or until such shares may be sold under Rule 144, whichever
occurs first.

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                                                                 UNDERWRITING

      Subject to the terms and conditions set forth in an underwriting agreement between us, the selling stockholder and Jefferies & Company,
Inc. and Johnson Rice & Company L.L.C., as representatives of the several underwriters, each of the underwriters named below has severally
agreed to purchase, and we and the selling stockholder have agreed to sell to each named underwriter, the number of shares of common stock
set forth opposite its name in the following table
                                                                                                                                      Number
        Underwriter                                                                                                                   of Shares

        Jefferies & Company, Inc.
        Johnson Rice & Company L.L.C.
        Raymond James & Associates, Inc.
        Fortis Securities LLC

        Total                                                                                                                         3,000,000


      The underwriting agreement provides that the underwriters are obligated, subject to the satisfaction of certain conditions, to purchase all
of the shares offered, if any of the shares are purchased, other than the shares covered by the overallotment option described below. The
underwriting agreement also provides that, in the event of a default by an underwriter, in some circumstances the purchase commitments of
non-defaulting underwriters may be increased or the underwriting agreement may be terminated.

      The underwriters propose to offer the shares of common stock directly to the public at the public offering price set forth on the cover of
this prospectus and to some dealers at that price less a concession not in excess of $        per share. The underwriters may allow, and those
dealers may reallow, a discount not in excess of $        per share to other dealers. After this offering, the public offering price, the concession
to selected dealers and reallowance to other dealers may be changed by the underwriters.

      The selling stockholder has granted the underwriters an option, exercisable not later than 30 days after the date of this prospectus, to
purchase, from time to time, in whole or in part, up to 450,000 additional shares at the public offering price less the underwriting discount set
forth on the cover of this prospectus. The underwriters may exercise this option solely to cover any overallotments. If the underwriters exercise
this option, each underwriter will be obligated, subject to some conditions, to purchase a number of additional shares proportionate to that
underwriter’s initial purchase commitment as indicated in the table above.

      The following table shows the per share and total underwriting discounts and commissions to be paid to the underwriters by us and the
selling stockholder. These amounts are shown assuming both no exercise and full exercise of the underwriters’ option to purchase 450,000
additional shares.
                                                                      Per Share                                       Total

                                                           Without                                        Without
                                                            Over-                  With Over-              Over-                  With Over-
                                                          Allotment                Allotment             Allotment                Allotment

        Public offering price by us                  $                         $                   $                          $
        Underwriting discounts and
          commissions payable by us                  $                         $                   $                          $
        Proceeds to us before expenses               $                         $                   $                          $
        Public offering price by the selling
          stockholder                                $                         $                   $                          $
        Underwriting discounts and
          commissions payable by the selling
          stockholder                                $                         $                   $                          $
        Proceeds to the selling stockholder
          before expenses                            $                         $                   $                          $

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     We estimate that the total expenses related to this offering payable by us, excluding underwriting discounts and commissions, will be
approximately $280,000.

      This offering of our common stock is made for delivery when, as and if accepted by the underwriters and subject to prior sale and to
withdrawal, cancellation or modification of this offering without notice. The underwriters reserve the right to reject an order for the purchase of
the shares of our common stock in whole or in part.

     We and the selling stockholder have agreed to indemnify the underwriters against certain liabilities, including liabilities under the
Securities Act, and to contribute to payments the underwriters may be required to make because of any of those liabilities.

     We have agreed that, for a period of 90 days after the date of this prospectus, we will not, without the prior written consent of Jefferies &
Company, Inc., directly or indirectly, sell, offer, contract or grant any option to sell, pledge or transfer, or otherwise dispose of or transfer, or
announce the offering of, or file any registration statement under the Securities Act in respect of, any shares of our common stock or securities
exchangeable or exercisable for or convertible into shares of our common stock, except for the sale of shares of our common stock to the
underwriters in this offering and the issuance of shares of our common stock, options to purchase shares of our common stock or shares of our
common stock upon exercise of options, pursuant to any stock option, stock bonus or other stock plan or arrangement described in this
prospectus or any amendment or replacement of such plan.

      Our executive officers and directors and the selling stockholder have also agreed that, except in limited circumstances, for a period of 90
days after the date of this prospectus, they will not, without the prior written consent of Jefferies & Company, Inc., directly or indirectly, sell,
offer, contract or grant any option to sell, pledge or transfer, or otherwise dispose of or transfer any shares of our common stock or securities
exchangeable or exercisable for or convertible into shares of our common stock.

      However, Jefferies & Company, Inc. may, in its sole discretion and at any time without notice, release all or any portion of the securities
subject to these lock-up agreements. This 90-day period may be extended under certain circumstances if (1) during the last 17 days of the
90-day period, we issue an earnings release or material news or a material event regarding us occurs or (2) prior to the expiration of the 90-day
period, we announce that we will release earnings results during the 16-day period beginning on the last day of the 90-day period. The period of
such extension will be 18 days, beginning on the issuance of the earnings release or the occurrence of the material news or material event.

      We have been advised by the representatives of the underwriters that, in accordance with Regulation M, some persons participating in
this offering may engage in transactions, including syndicate covering transactions, stabilizing bids or the imposition of penalty bids, that may
have the effect of stabilizing or maintaining the market price of the shares at a level above that which might otherwise prevail in the open
market.

      A ―syndicate covering transaction‖ is a bid for or the purchase of shares on behalf of the underwriters to reduce a syndicate short position
incurred by the underwriters in connection with this offering. The underwriters may create a short position by making short sales of our shares
and may purchase shares in the open market to cover syndicate short positions created by short sales. Short sales involve the sale by the
underwriters of a greater number of shares than they are required to purchase in this offering. Short sales can either be ―covered‖ or ―naked.‖
―Covered‖ short sales are sales made in an amount not greater than the underwriters’ overallotment option to purchase additional shares from
the selling stockholder in this offering. ―Naked‖ short sales are sales in excess of the overallotment option. A naked short position is more
likely to be created if the underwriters are concerned that there may be downward pressure on the price of the shares in the open market after
pricing that could adversely affect investors who purchase in this offering. If the underwriters create a syndicate short

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position, they may choose to reduce or ―cover‖ that short position by either exercising all or part of the overallotment option to purchase
additional shares from the selling stockholder or by engaging in ―syndicate covering transactions.‖ The underwriters must close out any naked
short position by purchasing shares in the open market. The underwriters may close out any covered short position by either exercising their
overallotment option or purchasing shares in the open market. In determining the source of shares to close out the covered short position, the
underwriters will consider, among other things, the price of shares available for purchase in the open market as compared to the price at which
they may purchase additional shares through the overallotment option.

      A ―stabilizing bid‖ is a bid for the purchase of shares on behalf of the underwriters for the purpose of fixing or maintaining the price of
our common stock. A ―penalty bid‖ is an arrangement that permits the representatives to reclaim the selling concession from an underwriter or
syndicate member when shares sold by such underwriter or syndicate member are purchased by the representatives in a stabilizing or syndicate
covering transaction and, therefore, have not been effectively placed by the underwriter or syndicate member.

     These activities by the underwriters may stabilize, maintain or otherwise affect the market price of our common stock. As a result, the
market price of our common stock may be higher than the price that otherwise might exist in the open market. If these activities are
commenced, they may be discontinued by the underwriters at any time without notice. These transactions may be conducted on The Nasdaq
National Market or otherwise.

      In connection with this offering, the underwriters may also engage in passive market making transactions in our common stock on The
Nasdaq National Market in accordance with Rule 103 of Regulation M during a period before the commencement of offers or sales of shares of
our common stock in this offering and extending through the completion of distribution. A passive market maker must display its bid at a price
not in excess of the highest independent bid of that security. However, if all independent bids are lowered below the passive market maker’s
bid, that bid must then be lowered when specified purchase limits are exceeded.

      Under Rule 2710(h) of the NASD’s Conduct Rules, if more than 10% of the net proceeds of a public securities offering are to be paid to
an NASD member (or an affiliate of a member) who is participating in the offering, the price at which the securities are to be distributed to the
public is to be established by a ―qualified independent underwriter.‖ An affiliate of Fortis Securities LLC, one of the underwriters of this
offering, is a lender under our existing credit facility and, in connection with the repayment of our existing credit facility, is expected to receive
more than 10% of the net proceeds of this offering. Jefferies & Company, Inc. is assuming the responsibilities of acting as a qualified
independent underwriter in pricing the offering and conducting due diligence.

      Certain of the underwriters and their affiliates have provided, and may in the future provide, various investment banking, commercial
banking, financial advisory and other services to us and our affiliates for which services they have received, and may in the future receive,
customary fees. In the course of their businesses, the underwriters and their affiliates may actively trade our securities or loans for their own
account or for the accounts of customers, and, accordingly, the underwriters and their affiliates may at any time hold long or short positions in
such securities or loans.

       A prospectus in electronic format may be made available on the web sites maintained by one or more of the underwriters, or selling group
members, if any, participating in this offering and one or more of the underwriters participating in this offering may distribute prospectuses
electronically. The representatives may agree to allocate a number of shares to underwriters and selling group members for sale to their online
brokerage account holders. Internet distributions will be allocated by the underwriters and selling group members that will make Internet
distributions on the same basis as other allocations.

                                                                         81
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                                                               LEGAL MATTERS

      The validity of the shares of common stock that are offered hereby by us and the selling stockholder will be passed upon by Akin Gump
Strauss Hauer & Feld LLP. Certain legal matters will be passed upon for the underwriters by Porter & Hedges, L.L.P.

                                                                     EXPERTS

      The consolidated financial statements of Bronco Drilling Company, Inc. and Subsidiaries as of December 31, 2005 and 2004, and for
each of the three years in the period ended December 31, 2005, the combined financial statements of Strata Drilling, L.L.C. and Affiliate as of
December 31, 2004 and for the year then ended and the combined financial statements of Eagle Drilling L.L.C. and Affiliates as of
December 31, 2004 and 2003 and for each of the two years in the period ended December 31, 2004 appearing in this prospectus and the
registration statement of which this prospectus is a part have been audited by Grant Thornton LLP, independent registered public accounting
firm, as set forth in their reports thereon appearing elsewhere herein, and are included in reliance upon the authority of such firm as experts in
accounting and auditing.

      The financial statements of Thomas Drilling Company as of December 31, 2004 and 2003 and for each of the two years in the period
ended December 31, 2004 appearing in this prospectus and the registration statement of which this prospectus is a part have been audited by
Freemon, Shapard & Story, independent accountants, as set forth in their report thereon appearing elsewhere herein, and are included in
reliance upon the authority of such firm as experts in accounting and auditing.

                                              WHERE YOU CAN FIND MORE INFORMATION

       We have filed with the SEC a registration statement on Form S-1 under the Securities Act covering the securities offered by this
prospectus. This prospectus, which constitutes a part of that registration statement, does not contain all of the information that you can find in
that registration statement and its exhibits. Certain items are omitted from this prospectus in accordance with the rules and regulations of the
SEC. For further information about us and the common stock offered by this prospectus, reference is made to the registration statement and the
exhibits filed with the registration statement. Statements contained in this prospectus and any prospectus supplement as to the contents of any
contract or other document referred to are not necessarily complete and in each instance such statement is qualified by reference to each such
contract or document filed as part of the registration statement. We are required to file annual, quarterly and current reports, proxy statements
and other information with the SEC. You may read any materials we file with the SEC free of charge at the SEC’s Public Reference Room at
100 F Street, N.E., Washington, D.C. 20549. Copies of all or any part of these documents may be obtained from such office upon the payment
of the fees prescribed by the SEC. The public may obtain information on the operation of the public reference room by calling the SEC at
1-800-SEC-0330. The SEC maintains an Internet site that contains reports, proxy and information statements and other information regarding
registrants that file electronically with the SEC. The address of the site is www.sec.gov. The registration statement, including all exhibits thereto
and amendments thereof, has been filed electronically with the SEC.

      You may request a copy of this prospectus, at no cost, by writing to or telephoning us at the following address:

                                                         Bronco Drilling Company, Inc.
                                                       14313 North May Avenue, Suite 100
                                                        Oklahoma City, Oklahoma 73134
                                                          Attention: Mark Dubberstein

                                                                         82
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                                               INDEX TO PRO FORMA COMBINED
                                                  FINANCIAL STATEMENTS
                                                                                                 Page



Bronco Drilling Company, Inc. Unaudited Pro Forma Combined Statement of Operations

     Introduction to Unaudited Pro Forma Combined Statement of Operations                        P-2
     Unaudited Pro Forma Combined Statement of Operations for the year ended December 31, 2005   P-3
     Notes to Unaudited Pro Forma Combined Statement of Operations                               P-4

                                                                 P-1
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                                                    BRONCO DRILLING COMPANY, INC.

                               UNAUDITED PRO FORMA COMBINED STATEMENT OF OPERATIONS

Introduction

The following is the unaudited pro forma combined statement of operations for the year ended December 31, 2005 for Bronco Drilling
Company, Inc. The unaudited pro forma combined statement of operations gives pro forma effect to the following acquisitions as if
consummated on January 1, 2005:

      •    The acquisition of Strata Drilling, L.L.C. and its affiliate, Strata Property, L.L.C. (collectively ―Strata‖);

      •    The acquisition of Thomas Drilling Co. (―Thomas‖); and

      •    The acquisition of Eagle Drilling, L.L.C. and its affiliates, Thornton Drilling Equipment, L.L.C. and Riverside Oilfield Equipment,
           L.L.C. (collectively ―Eagle‖).

The Thomas, Eagle and Strata acquisitions were accounted for as purchases and, as a result, the acquired assets are recorded at their fair value
at the time of purchase. The fair values were based upon our management’s estimate of fair value and are believed to be reasonable.

The following unaudited pro forma combined statement of operations and accompanying notes should be read together with our historical
financial statements and the historical financial statements of Strata, Eagle and Thomas appearing elsewhere in this prospectus. The unaudited
pro forma combined statement of operations was derived by adjusting those historical financial statements. The adjustments are based on
currently available information and certain estimates and assumptions that management believes provide a reasonable basis for presenting the
significant effects of the acquisitions specified above. These pro forma adjustments give appropriate effect to the assumptions made and are
properly applied in the unaudited pro forma combined statement of operations.

The unaudited pro forma combined statement of operations does not give effect to our acquisition of Hays Trucking, Inc. in September 2005,
which was not a financially significant acquisition, or our acquisition of Big A Drilling in January 2006, for which audited financial statements
are not currently available. The unaudited pro forma combined statement of operations does not purport to present the results of operations of
the Company had the acquisitions actually been completed as of the date indicated. Moreover, they do not purport to project the Company’s
results of operations for any future period.

                                                                         P-2
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                                                      BRONCO DRILLING COMPANY, INC.

                                   UNAUDITED PRO FORMA COMBINED STATEMENT OF OPERATIONS
                                       FOR THE TWELVE MONTHS ENDED DECEMBER 31, 2005
                                            (Amounts in thousands, except per share amounts)
                                                 Historical
                                              Bronco Drilling             Historical         Historical         Historical      Pro Forma             Pro Forma
                                          Drilling Company, Inc.           Strata             Eagle             Thomas         Adjustments            Combined

Contract drilling revenues            $                   77,885      $       3,715      $       9,964      $      24,368      $       —          $ 115,932
Expenses:
     Contract drilling                                    44,695              1,965              3,937             16,399              —                 66,996
     Depreciation and
       amortization                                         9,143                272                515                657             167 (a)           14,144
                                                                                                                                     2,321 (b)
                                                                                                                                     1,069 (c)
     General and administrative                             9,395                781             5,278              1,411              —                 16,865

           Total operating costs
             and expenses                                 63,233              3,018              9,730             18,467            3,557               98,005

Income from operations                                    14,652                 697                234             5,901           (3,557 )             17,927
Other income (expense):
    Interest expense                                       (1,415 )              (16 )              (41 )              (33 )            90 (d)           (7,206 )
                                                                                                                                      (245 )(a)
                                                                                                                                    (3,285 )(b)
                                                                                                                                    (2,261 )(c)
     Loss from early
        extinguishment of debt                             (2,062 )              —                  —                  —               —                 (2,062 )
     Interest income                                          432                 13                —                   17             —                    462
     Other                                                     53                411                297                201             —                    962

           Total other income
             (expense)                                     (2,992 )              408                256                185          (5,701 )             (7,844 )

Income before income taxes                                11,660              1,105                 490             6,086           (9,258 )             10,083
Income tax expense                                         6,529                —                   —                 —             (2,728 )(e)           3,801

Net Income                            $                     5,131     $       1,105      $          490     $       6,086      $    (6,530 )      $       6,282

Pro forma income per common
  share –basic (Note 4)               $                      0.32                                                                                 $         0.39

Pro forma income per common
  share – diluted (Note 4)            $                      0.31                                                                                 $         0.39

Weighted average pro forma
 shares outstanding – basic
 (Note 4)                                                 16,259                                                                                         16,259

Weighted average pro forma
 shares outstanding – diluted
 (Note 4)                                                 16,306                                                                                         16,306



                                     See accompanying notes to the unaudited pro forma financial statements.

                                                                              P-3
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                                                   BRONCO DRILLING COMPANY, INC.

                                   NOTES TO UNAUDITED PRO FORMA STATEMENT OF OPERATIONS

Note 1.    Basis of Presentation

The historical financial information is derived from the historical statements of operations of Bronco Drilling Company, Inc., Strata, Eagle and
Thomas. The acquisitions of the assets of Thomas, Strata and Eagle were accounted for as purchases and, as a result, these assets are recorded
at their fair value at the time of purchase, as follows:

      •    The acquisition of all the membership interests in Strata and a related rig yard on July 13, 2005. Included in these acquisitions were
           two operating rigs, one rig that was being refurbished, related structures, equipment and components and a 16 acre yard in
           Oklahoma City, Oklahoma used for equipment storage and refurbishment of stacked rigs. The aggregate purchase price was $20.0
           million, of which $13.0 million was paid in cash and $7.0 million was paid in the form of promissory notes issued to the sellers;

      •    The acquisition of Thomas for approximately $70.6 million in cash, which included $2.6 million of related transaction costs. In this
           acquisition we acquired nine operating rigs, two rigs currently being refurbished, two inventoried rigs and excess rig equipment and
           inventory. The purchase price was partially funded through a $50.0 million loan from Theta Investors LLC which was repaid from
           the proceeds of our follow on offering completed on November 2, 2005. The purchase price was allocated to property and
           equipment totaling $64.7 million, customer lists of $1.2 million and goodwill of $4.7 million; and

      •    The acquisition of Eagle for approximately $50.5 million in cash, which included approximately $0.5 million of related transaction
           costs and was funded by a $7.5 million cash payment and a $43.0 million loan from Merrill Lynch Business Financial Services, Inc.,
           as lender (―Merrill Lynch‖ or the ―lender‖). The term loan bears interest on the outstanding principal balance at a variable per
           annum rate equal to LIBOR plus 271 basis points. Any outstanding principal and accrued but unpaid interest will be immediately
           due and payable in full on January 1, 2011. The purchase price has been allocated to property and equipment totaling $33.8 million,
           goodwill of $16.0 million and customer lists and relationships of $0.7 million.

Note 2.    Pro Forma Adjustments and Assumptions

(a)   To reflect the increase in depreciation expense resulting from the purchase of Strata property and equipment in service, depreciated on a
      straight-line basis over three to 15 years for the purchased drilling equipment and 30 years for the purchased building. The purchase price
      allocation to property and equipment includes $7.0 million allocated to a drilling rig, which was being refurbished (not in service) during
      2005 and is therefore not depreciated. It also reflects an increase in interest expense due to borrowings of $7.0 million to finance a
      portion of the purchase of Strata, based upon LIBOR plus 2.71% (effective rate of 7.01% at December 31, 2005).

(b)   To reflect the increase in depreciation and amortization expense resulting from the Thomas purchase price allocation to property and
      equipment depreciated on a straight-line basis over five to 15 years for the purchased drilling equipment and vehicles; intangibles related
      to customer relationships of $1.2 million amortized over a life of approximately four years and goodwill of $4.7 million which is not
      amortized. The purchase price allocation to property and equipment includes $10.4 million allocated to inventoried rigs or rigs being
      refurbished (not in service) and are therefore not depreciated. It also reflects an increase in interest expense due to borrowings from a
      $50.0 million loan from Theta Investors LLC with interest at LIBOR plus 4% (effective rate of 8.30% at December 31, 2005).

                                                                       P-4
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                                                   BRONCO DRILLING COMPANY, INC.

                        NOTES TO UNAUDITED PRO FORMA STATEMENT OF OPERATIONS – CONTINUED
Note 2.    Pro Forma Adjustments and Assumptions - Continued

(c)   To reflect the increase in depreciation and amortization expense resulting from the Eagle purchase price allocation to property and
      equipment depreciated on a straight-line basis over eight to 15 years. The purchase price allocation to property and equipment of $33.8
      million includes $4.6 million allocated to inventoried rigs or rigs being refurbished (not in service) and are therefore not depreciated.
      Approximately $16.0 million was allocated to goodwill which is not amortized and $0.7 million was allocated to customer relationships
      amortized over a life of approximately four years. It also reflects an increase in interest expense due to a $43 million loan from Merrill
      Lynch with interest at LIBOR plus 2.71% (effective rate of 7.01% at December 31, 2005).

(d)   Reflects the elimination of historical interest expense of the acquired entities for debt that was not assumed.

(e)   To reflect income taxes for our predecessor assuming our predecessor was operated as a taxable corporation throughout the period (see
      Note 3).

Note 3.    Income Taxes

Our predecessor, a limited liability company, was classified as a partnership for income tax purposes. Accordingly, income taxes on net
earnings were payable by the members and are not reflected in historical financial statements except for taxes associated with a taxable
subsidiary. Pro forma adjustments are reflected to provide for income taxes in accordance with Statement of Financial Accounting Standards
No. 109. For unaudited pro forma income tax calculations, a statutory Federal tax rate of 34% and effective state tax rate of 3.7% (net of
Federal income tax effects) were used for the pro forma enacted tax rate. The pro forma tax effects are based upon currently available
information and assume the Company had been a taxable entity in the periods presented. Management believes that these assumptions provide
a reasonable basis for presenting the pro forma tax effects.

Note 4.    Pro Forma Income Per Share

Pro forma income per basic and diluted common share is computed based on the weighted average pro forma number of basic and diluted
shares assumed to be outstanding during the period. Pro forma income per share information is presented for the year ended December 31,
2005 on the basis of 16,259,000 and 16,306,000 weighted average shares issued basic and diluted, respectively. Dilutive pro forma effect is
given to shares which are issuable under an employee stock option plan.

                                                                        P-5
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                                        INDEX TO CONSOLIDATED FINANCIAL STATEMENTS

                                                                                                                                Page

Bronco Drilling Company, Inc. and Subsidiaries

     Report of Independent Registered Public Accounting Firm                                                                     F-2
     Consolidated Balance Sheets as of December 31, 2005 and 2004                                                                F-3
     Consolidated Statements of Operations for the Years Ended December 31, 2005, 2004 and 2003                                  F-4
     Consolidated Statement of Members’/Stockholders’ Equity as of December 31, 2005, 2004 and 2003                              F-5
     Consolidated Statements of Cash Flows for the Years Ended December 31, 2005, 2004 and 2003                                  F-6
     Notes to Consolidated Financial Statements                                                                                  F-7

Strata Drilling, L.L.C. and Affiliate

     Report of Independent Registered Public Accounting Firm                                                                    F-24
     Combined Balance Sheets as of December 31, 2004 and June 30, 2005 (unaudited)                                              F-25
     Combined Statements of Operations and Members’ Equity for the Year Ended December 31, 2004 and for the six months ended
       June 30, 2005 (unaudited)                                                                                                F-26
     Combined Statements of Cash Flows for the Year Ended December 31, 2004 and for the six months ended June 30, 2005
       (unaudited)                                                                                                              F-27
     Notes to Combined Financial Statements                                                                                     F-29

Thomas Drilling Company

     Independent Auditors’ Report                                                                                               F-35
     Balance Sheets as of December 31, 2004, and 2003 and September 30, 2005 (unaudited)                                        F-36
     Statements of Operations and Shareholders’ Equity for the years ended December 31, 2004 and 2003 and for the nine months
       ended September 30, 2005 (unaudited)                                                                                     F-37
     Statements of Cash Flows for the years ended December 31, 2004 and 2003 and for the nine months ended September 30, 2005
       (unaudited)                                                                                                              F-38
     Notes to Financial Statements                                                                                              F-39

Eagle Drilling, L.L.C. and Affiliates

     Report of Independent Registered Public Accounting Firm                                                                    F-43
     Combined Balance Sheets as of December 31, 2004 and 2003, and September 30, 2005 (unaudited)                               F-44
     Combined Statements of Operations and Members’ Equity for the years ended December 31, 2004 and 2003 and for the
       nine-month period ended September 30, 2005 (unaudited)                                                                   F-45
     Combined Statements of Cash Flows for the years ended December 31, 2004 and 2003 and the nine month period ended
       September 30, 2005 (unaudited)                                                                                           F-46
     Notes to Combined Financial Statements                                                                                     F-47

                                                                  F-1
Table of Contents

                                          Report of Independent Registered Public Accounting Firm

Board of Directors
Bronco Drilling Company, Inc. and Subsidiaries

We have audited the accompanying consolidated balance sheets of Bronco Drilling Company, Inc. and Subsidiaries as of December 31, 2005
and 2004, and the related consolidated statements of operations, members’/stockholders’ equity and cash flows for each of the three years in
the period ended December 31, 2005. These financial statements are the responsibility of the Company’s management. Our responsibility is to
express an opinion on these financial statements based on our audits.

We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those
standards require that we plan and perform the audits to obtain reasonable assurance about whether the financial statements are free of material
misstatement. The Company is not required to have, nor were we engaged to perform an audit of its internal control over financial reporting.
Our audits included consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in
the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control over financial
reporting. Accordingly, we express no such opinion. An audit also includes examining, on a test basis, evidence supporting the amounts and
disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, as well as
evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.

In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the financial position of Bronco
Drilling Company, Inc. and Subsidiaries as of December 31, 2005 and 2004, and the results of their operations and their cash flows for each of
the three years in the period ended December 31, 2005 in conformity with accounting principles generally accepted in the United States of
America.

/ S / GRANT THORNTON LLP

Oklahoma City, Oklahoma
March 6, 2006

                                                                       F-2
Table of Contents

                                             Bronco Drilling Company, Inc. and Subsidiaries

                                               CONSOLIDATED BALANCE SHEETS
                                             (Amounts in thousands except share par value)
                                                                                                    Years Ended December 31,

                                                                                                  2005                    2004

                                         ASSETS
CURRENT ASSETS
   Cash and cash equivalents                                                                  $      17,039        $             1,139
   Receivables
       Trade, net of allowance for doubtful accounts of $330 and $146 in 2005 and 2004,
          respectively                                                                               35,078                      5,557
       Contract drilling in progress                                                                  1,226                      1,403
   Current deferred income taxes                                                                        125                        —
   Prepaid expenses                                                                                     485                         19

           Total current assets                                                                      53,953                      8,118
PROPERTY AND EQUIPMENT—AT COST
   Drilling rigs and related equipment                                                              252,709                    86,090
   Transportation, office and other equipment                                                        14,149                     1,992

                                                                                                    266,858                    88,082
           Less accumulated depreciation                                                             15,965                     6,913

                                                                                                    250,893                    81,169
OTHER ASSETS
   Goodwill                                                                                          20,774                       —
   Restricted cash                                                                                    2,184                       600
   Intangibles, net and other                                                                         2,716                       256

                                                                                                     25,674                       856
                                                                                              $     330,520        $           90,143

LIABILITIES AND MEMBERS’/STOCKHOLDERS’ EQUITY
CURRENT LIABILITIES
   Accounts payable                                                                           $      10,847        $             3,922
   Accrued liabilities
       Payroll related                                                                                   2,737                     863
       Deferred revenue and other                                                                        3,062                     396
   Income tax payable                                                                                    1,372                     —
   Note payable                                                                                          7,503                   1,800
   Current maturities of long-term debt                                                                  8,012                   3,550

           Total current liabilities                                                                 33,533                    10,531
LONG-TERM DEBT, less current maturities                                                              36,310                    12,750
DEFERRED INCOME TAXES                                                                                21,341                    16,059
COMMITMENTS AND CONTINGENCIES (Notes 7 and 8)
MEMBERS’ EQUITY                                                                                           —                    50,803
STOCKHOLDERS’ EQUITY
   Common stock, $0.01 par value, 100,000 shares authorized; 23,165 shares issued and
     outstanding December 31, 2005                                                                      232                       —
   Additional paid-in capital                                                                       238,557                       —
   Accumulated Earnings                                                                                 547                       —

           Total Stockholders’/members’ equity                                                      239,336                    50,803
                                                               $   330,520   $   90,143


The accompanying notes are an integral part of these statements.

                              F-3
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                                              Bronco Drilling Company, Inc. and Subsidiaries

                                           CONSOLIDATED STATEMENTS OF OPERATIONS
                                             (Amounts in thousands except per share amounts)
                                                                                                             Years Ended December 31,

                                                                                               2005                     2004                2003

REVENUES
   Contract drilling revenues                                                              $     77,885            $     21,873         $    12,533
EXPENSES
   Contract drilling                                                                             44,695                  18,670              10,537
   Depreciation and amortization                                                                  9,143                   3,695               1,985
   General and administrative                                                                     9,395                   1,714               1,226

                                                                                                 63,233                  24,079              13,748

           Income (loss) from operations                                                         14,652                   (2,206 )            (1,215 )
OTHER INCOME (EXPENSE)
   Interest expense                                                                              (1,415 )                      (285 )              (21 )
   Loss from early extinguishment of debt                                                        (2,062 )                       —                  —
   Interest income                                                                                  432                          10                  3
   Other                                                                                             53                         —                  —

                                                                                                 (2,992 )                      (275 )               (18 )

         Income (loss) before income taxes                                                       11,660                   (2,481 )            (1,233 )
Income tax expense                                                                                6,529                      285                 317

           NET INCOME (LOSS)                                                               $      5,131            $      (2,766 )      $     (1,550 )

Income per common share-Basic                                                              $          0.32

Income per common share-Diluted                                                            $          0.31

Weighted average number of shares outstanding-Basic                                              16,259

Weighted average number of shares outstanding-Diluted                                            16,306

PRO FORMA INFORMATION (unaudited):
Historical income (loss) from operations before income taxes                               $     11,660            $      (2,481 )      $     (1,233 )
Pro forma provision (benefit) for income taxes                                                    4,396                     (935 )              (465 )

Pro forma income (loss) from operations                                                    $      7,264            $      (1,546 )      $          (768 )

Pro forma income (loss) per common share-Basic and Diluted                                 $          0.45         $       (0.12 )      $      (0.06 )

Weighted average number of shares outstanding-Basic                                              16,259                  13,360              13,360

Weighted average number of shares outstanding-Diluted                                            16,306                  13,360              13,360


                                       The accompanying notes are in integral part of these statements.

                                                                     F-4
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                                              Bronco Drilling Company, Inc. and Subsidiaries

                           CONSOLIDATED STATEMENT OF MEMBERS’/STOCKHOLDERS’ EQUITY
                                              (Amounts in thousands)
                                                                                        Commo
                                                                                          n         Additional                         Total
                                                          Members             Common    Amoun        Paid In     Accumulated       Stockholders’
                                                           Equity              Shares     t          Capital      Earnings            Equity

Balance as of January 1, 2003                            $ 15,010                —      $ —     $          —     $      —      $             —
Net loss                                                   (1,550 )              —        —                —            —                    —
Capital contributions                                      37,242                —        —                —            —                    —

Balance as of December 31, 2003                              50,702              —        —                —            —                    —
Net loss                                                     (2,766 )            —        —                —            —                    —
Capital contributions                                         2,867              —        —                —            —                    —

Balance as of December 31, 2004                              50,803               —       —               —             —                   —
Net income through August 15, 2005                            4,584               —       —               —             —                   —
Conversion to a Delaware corporation                         55,387            13,360     134          55,254           —                55,388
Issuance of common stock in initial public offering;
   net of related expenses of $1,354                            —               5,715      57          88,944           —                89,001
Stock issued in acquisition                                     —                  65       1           1,274           —                 1,275
Issuance of common stock in follow-on offering: net
   of related expenses of $462                                  —               4,025      40          86,981           —                87,021
Net income, August 16, 2005 through December 31,
   2005                                                         —                —        —                —            547                  547
Stock compensation                                              —                —        —                589          —                    589
Capital contributions                                           —                —        —              5,515          —                  5,515

Balance as of December 31, 2005                          $      —              23,165   $ 232   $ 238,557        $      547    $        239,336


                                       The accompanying notes are an integral part of these statements.

                                                                        F-5
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                                                Bronco Drilling Company, Inc. and Subsidiaries

                                            CONSOLIDATED STATEMENTS OF CASH FLOWS
                                                      (Amounts in thousands)
                                                                                                         Years Ended December 31,

                                                                                              2005                  2004                2003

Cash flows from operating activities:
    Net income (loss)                                                                     $      5,131         $      (2,766 )      $     (1,550 )
    Adjustments to reconcile net income (loss) to net cash provided by (used in)
       operating activities:
         Depreciation and amortization                                                           9,193                 3,738              1,988
         Bad debt expense                                                                          184                   146                —
         Non-cash compensation expense                                                           4,000                   —                  —
         Write off of debt issue costs                                                             799                   —                  —
         Stock compensation                                                                        589                   —                  —
         Change in deferred income taxes                                                         5,157                   285                317
         Changes in current assets and liabilities, net of effects from acquisitions:
              Receivables                                                                      (28,721 )              (3,425 )            (2,848 )
              Contract drilling in progress                                                        177                   —                   —
              Prepaid expenses                                                                    (445 )                 319                (307 )
              Other assets                                                                        (485 )                  30                 (38 )
              Accounts payable                                                                   1,827                 2,850                 655
              Accrued expenses                                                                   4,540                 1,187                (131 )
              Income taxes payable                                                               1,372                   —                   —

Net cash provided by (used in) operating activities                                              3,318                 2,364              (1,914 )
Cash flows from investing activities:
    Increase in restricted cash                                                                 (1,515 )                —                   (600 )
    Business acquisitions, net of cash acquired                                               (135,213 )                —                    —
    Purchase of property and equipment                                                         (53,598 )            (19,511 )             (4,246 )

Net cash used in investing activities                                                         (190,326 )            (19,511 )             (4,846 )
Cash flows from financing activities:
    Proceeds from borrowings ($68,000 from affiliates in 2005)                                 119,950               15,500               4,300
    Payments of debt ($68,000 to affiliates in 2005)                                           (93,706 )             (1,700 )               —
    Debt issue costs                                                                              (873 )                (44 )              (244 )
    Capital contributions                                                                        1,515                2,867               3,742
    Proceeds from sale of common stock, net of offering costs of $1,816                        176,022                  —                   —

Net cash provided by financing activities                                                      202,908               16,623               7,798
Net increase (decrease) in cash and cash equivalents                                            15,900                     (524 )         1,038
Beginning cash and cash equivalents                                                              1,139                 1,663                   625

Ending cash and cash equivalents                                                          $     17,039         $       1,139        $     1,663

Supplemental disclosure of cash flow information
    Interest paid, net of amount capitalized                                              $      1,324         $           241      $           11
Supplementary disclosure of non-cash investing and financing:
    Liabilities assumed in acquisition/contribution                                       $      1,775         $           —        $    15,500
    Common stock issued for acquisition                                                          1,275                     —                —
    Assets contributed by members                                                                  —                       —             49,000
    Note issued in acquisition                                                                   7,000                     —                —

                                        The accompanying notes are an integral part of these statements.

                                                                        F-6
Table of Contents

                                               Bronco Drilling Company, Inc. and Subsidiaries

                                       NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                          (Amounts in thousands, except per share amounts)

1. Organization and Summary of Significant Accounting Policies

Business and Principles of Consolidation

      Bronco Drilling Company, Inc. (the ―Company‖) provides contract land drilling services to oil and natural gas exploration and production
companies, primarily in Oklahoma and Texas. On June 1, 2001, the Company’s predecessor, Bronco Drilling Company, L.L.C., was formed as
an Oklahoma limited liability company. Effective August 15, 2005, the Company merged with Bronco Drilling Company, L.L.C. in connection
with the Company’s consummation of its initial public offering. The Company was initially capitalized on May 26, 2005 as a Delaware
corporation in anticipation of its merger with Bronco Drilling Company, L.L.C. During the year ended December 31, 2005, the Company made
several business acquisitions to expand its drilling fleet (See Note 2). The accompanying consolidated financial statements include the
Company’s accounts and the accounts of its wholly owned subsidiaries. All intercompany accounts and transactions have been eliminated in
consolidation.

      The Company has prepared the consolidated financial statements and related notes in accordance with accounting principles generally
accepted in the United States of America. In preparing the financial statements, the Company made various estimates and assumptions that
affect the amounts of assets and liabilities the Company reports as of the dates of the balance sheets and revenues and expenses the Company
reports for the periods shown in the statements of operations. Material estimates that are particularly susceptible to significant changes in the
near term relate to the Company’s recognition of revenues and accrued expenses, estimates of the allowance for doubtful accounts, estimates of
asset impairments, estimates of deferred taxes and determinations of depreciation and amortization expense.

      A summary of the significant accounting policies consistently applied in the preparation of the accompanying consolidated financial
statements follows.

Cash and Cash Equivalents

     The Company considers all highly liquid debt instruments purchased with a maturity of three months or less when acquired and money
market mutual funds to be cash equivalents.

      The Company maintains its cash and cash equivalents in accounts and instruments that may not be federally insured. The Company has
not experienced any losses in such accounts and believes it is not exposed to any significant credit risks on cash and cash equivalents.

Revenue Recognition

      The Company earns contract drilling revenue under daywork and footage contracts.

       The Company follows the percentage-of-completion method of accounting for footage contract drilling arrangements. Under this method,
drilling revenues and costs related to a well in progress are recognized proportionately over the time it takes to drill the well.
Percentage-of-completion is determined based upon the amount of expenses incurred through the measurement date as compared to total
estimated expenses to be incurred drilling the well. Mobilization costs are not included in costs incurred for percentage-of-completion
calculations. Mobilization costs on footage contracts are deferred and recognized over the days of actual drilling. Under the
percentage-of-completion method, management estimates are relied upon in the determination of the total estimated expenses to be incurred
drilling the well. When estimates of revenues and expenses indicate a loss on a contract, the total estimated loss is accrued.

                                                                       F-7
Table of Contents

                                               Bronco Drilling Company, Inc. and Subsidiaries

                                NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
                                         (Amounts in thousands, except per share amounts)

     Revenues on daywork contracts are recognized based on the days completed at the dayrate each contract specifies. Mobilization revenues
and costs for daywork contracts are deferred and recognized over the days of actual drilling.

      The receivables from contract drilling in progress represents revenues in excess of amounts billed on contracts in progress.

      Revenue arising from claims for amounts billed in excess of the contract price or for amounts not included in the original contract are
recognized when billed less any allowance for uncollectibility. Revenue from such claims is only recognized if it is probable that the claim will
result in additional revenue, the costs for the additional services have been incurred, management believes there is a legal basis for the claim
and the amount can be reliably estimated. Historically, such claims have been immaterial as we have not billed any customers for amounts not
included in the original contract.

Accounts Receivable

      The Company records trade accounts receivable at the amount invoiced to customers. Substantially all of the Company’s accounts
receivable are due from companies in the oil and gas industry. Credit is extended based on evaluation of a customer’s financial condition and,
generally, collateral is not required. Accounts receivable are due within 30 days and are stated at amounts due from customers, net of an
allowance for doubtful accounts when the Company believes collection is doubtful. Accounts outstanding longer than the contractual payment
terms are considered past due. The Company determines its allowance by considering a number of factors, including the length of time trade
accounts receivable are past due, the Company’s previous loss history, the customer’s current ability to pay its obligation to the Company and
the condition of the general economy and the industry as a whole. The Company writes off specific accounts receivable when they become
uncollectible and payments subsequently received on such receivables are credited to the allowance for doubtful accounts. At December 31,
2005 and 2004, our allowance for doubtful accounts was $330 and $146, respectively.

Prepaid Expenses

      Prepaid expenses include items such as insurance and fees. The Company routinely expenses these items in the normal course of business
over the periods these expenses benefit.

Property Equipment

      Property and equipment, including renewals and betterments, are capitalized and stated at cost, while maintenance and repairs are
expensed currently. Assets are depreciated on a straight-line basis. The depreciable lives of drilling rigs and related equipment are three to 15
years. The depreciable life of other equipment is three years. Depreciation is not commenced until acquired rigs are placed in service. Once
placed in service, depreciation continues when rigs are being repaired, refurbished or between periods of deployment. Assets not placed in
service and not being depreciated were $47,655 and $34,118 as of December 31, 2005 and 2004, respectively.

      The Company capitalizes interest as a component of the cost of drilling rigs constructed for its own use. For the years ended
December 31, 2005 and 2004, the Company capitalized $1,207 and $470, respectively, of interest costs incurred during the construction periods
of certain drilling rigs.

      The Company reviews long-lived assets to be held and used for impairment whenever events or changes in circumstances indicate that
the carrying amount of the assets may not be recoverable. If the sum of the undiscounted expected future cash flows is less than the carrying
amount of the assets, the Company recognizes an impairment loss based upon fair value of the asset.

                                                                        F-8
Table of Contents

                                                Bronco Drilling Company, Inc. and Subsidiaries

                                NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
                                         (Amounts in thousands, except per share amounts)

Goodwill

      The Company evaluates the carrying value of goodwill during the fourth quarter of each year and between annual evaluations if events
occur or circumstances change that would more likely than not reduce the fair value below its carrying amount. Such circumstances could
include, but are not limited to: (1) a significant adverse change in legal factors or in business climate, (2) unanticipated competition, or (3) an
adverse action or assessment by a regulator. When evaluating whether goodwill is impaired, the Company compares its fair value to its
carrying amount, including goodwill. Fair value is estimated using a combination of income, or discounted cash flows approach and the market
approach, which utilizes comparable companies’ data. If the carrying amount exceeds its fair value, then the amount of the impairment loss
must be measured. The impairment loss would be calculated by comparing the implied fair value of reporting unit goodwill to its carrying
amount. In calculating the implied fair value of goodwill, the fair value of the Company is allocated to all of its other assets and liabilities based
on their fair values. The excess of the fair value of the Company over the amount assigned to its other assets and liabilities is the implied fair
value of goodwill. An impairment loss would be recognized when the carrying amount of goodwill exceeds its implied fair value. Goodwill
recognized during 2005 through acquisitions was $20,774.

Intangibles, Net and Other

       Intangibles, restricted cash and other assets consist of intangibles related to acquisitions, net of amortization, cash deposits related to the
deductibles on our workers compensation insurance policies and debt issue costs, net of amortization. The Company follows Statement of
Financial Accounting Standards (―SFAS‖) No. 142, ― Goodwill and Other Intangibles ‖ to account for amortizable intangibles. Intangible
assets that are acquired either individually or with a group of other assets are recognized based on its fair value and amortized over its useful
life. The Company’s amortizable intangibles consist entirely of customer lists and relationships obtained through acquisitions in 2005.
Customer lists and relationships are amortized over their estimated benefit period of four years. Depreciation expense includes amortization of
intangibles of $87 for the year ended December 31, 2005. Total cost and accumulated amortization of intangibles at December 31, 2005 was
$2,106 and $87, respectively.

      Estimated amortization expense for each year subsequent to December 31, 2005 is as follows:

                      2006                                                                                                $ 527
                      2007                                                                                                  527
                      2008                                                                                                  527
                      2009                                                                                                  438
                      2010                                                                                                  —

      Legal fees and other debt issue costs incurred in obtaining financing are amortized over the term of the debt using a method which
approximates the effective interest method. Gross debt issue costs were $268 and $259 at December 31, 2005 and 2004, respectively.
Amortization expense related to debt issue costs was $53, $43 and $3 for years ended December 31, 2005, 2004 and 2003, respectively, and is
included in interest expense in the consolidated statements of operations. Accumulated amortization related to loan fees was $14 and $46 as of
December 31, 2005 and 2004, respectively. On August 29, 2005, the Company paid off its term note with General Electric Capital Corporation.
The Company incurred a prepayment penalty of $644 and wrote-off debt issue costs of $349, which is included in loss from early
extinguishment of debt on the consolidated statement of operations for the year ended December 31, 2005. On November 2, 2005, the
Company paid off its term note with Theta Investors, LLC, formerly Alpha Investors LLC, an entity controlled by Wexford Capital, LLC
(―Wexford‖), the Company’s

                                                                         F-9
Table of Contents

                                               Bronco Drilling Company, Inc. and Subsidiaries

                                NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
                                         (Amounts in thousands, except per share amounts)

principal stockholder. The Company wrote-off debt issue costs of $1,075, which is included in loss from early extinguishment of debt on the
consolidated statement of operations for the year ended December 31, 2005.

Restricted Cash

      At December 31, 2005 and 2004, the Company had restricted cash of $2,184 and $600, respectively, at a bank collateralizing letters of
credit with the Company’s workers’ compensation insurers.

Income Taxes

       Pursuant to SFAS No. 109, ― Accounting for Income Taxes ,‖ the Company follows the asset and liability method of accounting for
income taxes, under which the Company recognizes deferred tax assets and liabilities for the future tax consequences attributable to differences
between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases. Deferred tax assets and
liabilities were measured using enacted tax rates expected to apply to taxable income in the years in which the Company expects to recover or
settle those temporary differences. A statutory Federal tax rate of 34% and effective state tax rate of 3.7% (net of Federal income tax effects)
were used for the enacted tax rate for all periods.

      As changes in tax laws or rates are enacted, deferred income tax assets and liabilities are adjusted through the provision for income taxes.
Deferred tax assets are reduced by a valuation allowance if, based on available evidence, it is more likely than not that some portion or all of
the deferred tax assets will not be realized. The classification of current and noncurrent deferred tax assets and liabilities is based primarily on
the classification of the assets and liabilities generating the difference. As a result of our conversion to a taxable corporation on August 15,
2005, a charge to income tax expense of $4,412 was made to record deferred taxes for the differences between the tax basis and financial
reporting basis of our assets and liabilities.

Pro Forma Income Taxes (unaudited)

      Our predecessor, a limited liability company, was classified as a partnership for income tax purposes. Accordingly, income taxes on net
earnings were payable by the members and are not reflected in historical financial statements except for taxes associated with a taxable
subsidiary. Pro forma adjustments are reflected to provide for income taxes in accordance with SFAS No. 109. For unaudited pro forma income
tax calculations, deferred tax assets and liabilities were recognized for the future tax consequences attributable to differences between the assets
and liabilities and were measured using enacted tax rates expected to apply to taxable income in the years in which the Company expects to
recover or settle those temporary differences. A statutory Federal tax rate of 34% and effective state tax rate of 3.7% (net of Federal income tax
effects) were used for the pro forma enacted tax rate for all periods. The pro forma tax effects are based upon currently available information
and assume the Company had been a taxable entity in the periods presented. Management believes that these assumptions provide a reasonable
basis for presenting the pro forma tax effects.

Net income (Loss) Per Common Share

      The Company computes and presents net income (loss) per common share in accordance with SFAS No. 128 ― Earnings per Share .‖
This standard requires dual presentation of basic and diluted net income (loss) per share on the face of the Company’s statement of operations.
Basic net income (loss) per common share is computed by dividing income or loss attributable to common stock by the weighted average
number of common shares outstanding for the period. Diluted net income (loss) per common share reflects the potential dilution that could
occur if options or other contracts to issue common stock were exercised or converted into common stock using the treasury stock method.
Diluted net loss per common share does not reflect dilution from potential

                                                                       F-10
Table of Contents

                                                Bronco Drilling Company, Inc. and Subsidiaries

                                NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
                                         (Amounts in thousands, except per share amounts)

common shares, because to do so would be anti-dilutive. Calculations of basic and diluted net income (loss) per common share are illustrated in
Note 10. The Company had no potentially dilutive options or contracts prior to the granting of stock options on August 19, 2005.

Pro Forma Income (Loss) Per Share (unaudited)

      Pro forma income (loss) per basic and diluted common share is computed based on weighted average pro forma number of basic and
diluted shares assumed to be outstanding during the periods. Pro forma basic and diluted income (loss) per share is presented for the
predecessor’s historical years ended December 31, 2004 and 2003 on the basis of 13,360 shares issued to our founder in the merger
immediately prior to our initial public offering in August 2005.

Stock-based Compensation

      The Company has adopted SFAS No. 123(R), ― Share-Based Payment ‖ upon granting its first stock options on August 19, 2005. SFAS
No. 123(R) requires a public entity to measure the costs of employee services received in exchange for an award of equity or liability
instruments based on the grant-date fair value of the award. That cost will be recognized over the period during which an employee is required
to provide service in exchange for the award.

Recent Accounting Pronouncements

      In May 2005, the FASB issued SFAS No. 154 (―SFAS 154‖). “Accounting Changes and Error Corrections.” This is a replacement of
APB Opinion No. 20, “Accounting Changes” and SFAS No. 3, “Reporting Accounting Changes in Interim Financial Statements.” Under
SFAS 154, all voluntary changes in accounting principles as well as changes pursuant to accounting pronouncements that do not include
specific transition requirements, must be applied retrospectively to prior periods’ financial statements. Retrospective application requires the
cumulative effect of each change to be reflected in the carrying value of assets and liabilities as of the first period presented and the offsetting
adjustments to be recorded in retained earnings for the first period presented. Also, under the new statement, a change in an accounting
estimate continues to be accounted for in the period of the change and in future periods if necessary. Under SFAS 154, corrections of errors
should continue to be reported by restating prior period financial statements as of the beginning of the first period presented, if material. The
statement is effective for accounting changes and corrections of errors made in fiscal years beginning after December 15, 2005. The Company
will adopt SFAS 154 on January 1, 2006. It is anticipated that adoption will not have a material impact on the Company’s financial position
and results of operations.

Reclassifications

    Certain reclassifications have been made to the 2004 consolidated financial statements to conform to the presentation for the year ended
December 31, 2005.

2. Acquisitions

      In July 2005, the Company acquired all the membership interests in Strata Drilling, L.L.C. and Strata Property, L.L.C. (collectively
―Strata‖) and a related rig yard. Included in these acquisitions were two operating rigs, one rig that was being refurbished, related structures,
equipment and components and a 16 acre yard in Oklahoma City, Oklahoma used for equipment storage and refurbishment of inventoried rigs.
The aggregate

                                                                        F-11
Table of Contents

                                                Bronco Drilling Company, Inc. and Subsidiaries

                                NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
                                         (Amounts in thousands, except per share amounts)

purchase price was $20,000, of which $13,000 was paid in cash and $7,000 was paid in the form of promissory notes issued to the sellers. The
Company funded the cash portion of the purchase price with a $13,000 loan from Theta Investors, LLC, formerly Alpha Investors LLC, an
entity controlled by Wexford. The outstanding principal balance of the Alpha loan was paid in full on August 22, 2005 with proceeds from our
initial public offering. This purchase was accounted for as an acquisition of a business, and the results of operations of the acquired business
have been included in our statement of operations since the date of acquisition. We allocated the purchase price to property and equipment and
related assets based on their relative fair values at the date of acquisition.

      The $7,000 original aggregate outstanding principal balance of the promissory notes issued to the sellers is automatically reduced by the
amount of any costs and expenses the Company pays in connection with the refurbishment of one of the rigs it acquired from the sellers. The
Company granted the sellers a security interest in this rig to secure its obligations under the notes. The outstanding principal balance on these
notes does not bear any interest other than default interest in the event of a default. In January 2006, the rig was completed to the satisfaction of
the Company and title passed at such point. Upon acceptance of the rig the note was paid in full (see Note 3).

      In September 2005, the Company acquired all the outstanding common stock of Hays Trucking, Inc. for $3,000 in cash, which includes
the repayment of $1,900 of debt owed by Hays Trucking, and the issuance of 65 shares of common stock with a fair value of $1,274 based on
the closing stock price at date of acquisition. In this acquisition, the Company acquired 18 trucks used to mobilize rigs to contracted drilling
locations as well as other ancillary equipment. Approximately $286 of the purchase price was allocated to customer lists and is included in
intangibles on the balance sheet at December 31, 2005.

       In October 2005, the Company purchased 12 land drilling rigs from Eagle Drilling, L.L.C., and two of its affiliates (―Eagle‖). This
acquisition involved five operating rigs, seven inventoried rigs and rig equipment and parts for a purchase price of approximately $50,517. In
connection with this acquisition, the Company leased the use of an additional rig refurbishment yard for a two-year term. The purchase price of
$50,517, which includes approximately $517 of related transaction costs, was funded with a $7,517 from cash on hand and a $43,000 loan from
Merrill Lynch Business Financial Services, Inc., as lender (see Note 4). The purchase price has been allocated to property and equipment
totaling $33,838, goodwill of $16,026 and customer lists and relationships of $653.

      In October 2005, the Company purchased 13 land drilling rigs from Thomas Drilling Company (―Thomas‖). This acquisition involved
nine operating rigs, two rigs being refurbished, two inventoried rigs and rig equipment and parts for a purchase price of approximately $70,622,
which includes approximately $2,622 of related transaction costs. In connection with this acquisition, the Company leased the use of an
additional rig refurbishment yard for a six-month term, with the right to extend the term for an additional three years, and obtained an option to
purchase the yard for $175. The purchase price was partially funded through a $50,000 loan from Theta Investors LLC, an entity controlled by
Wexford. This loan was repaid in full on November 3, 2005 with a portion of the proceeds from the Company’s follow-on common stock
offering which closed on November 2, 2005. The purchase price has been allocated to property and equipment totaling $64,708, goodwill of
$4,748 and customer lists of $1,166.

                                                                        F-12
Table of Contents

                                              Bronco Drilling Company, Inc. and Subsidiaries

                                 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
                                          (Amounts in thousands, except per share amounts)

      The following table summarizes the allocation of purchase price to the Company’s significant acquisitions:
                                                                                 Strata           Eagle           Thomas               Total

        Assets acquired:
            Drilling equipment                                                  $ 11,840       $ 33,838         $ 64,288          $ 109,966
            Rig under construction                                                 7,000            —                —                7,000
            Yard Equipment                                                           170            —                —                  170
            Vehicles                                                                  18            —                420                438
            Buildings                                                                729            —                —                  729
            Land                                                                     243            —                —                  243
            Customer Lists                                                           —              653            1,166              1,819
            Goodwill                                                                 —           16,026            4,748             20,774

        Assets acquired                                                         $ 20,000       $ 50,517         $ 70,622          $ 141,139


      The following pro forma information gives effect to the Strata, Eagle and Thomas acquisitions as though they were effective at the
beginning of each year presented. Pro forma adjustments primarily relate to additional depreciation, amortization and interest costs. The
information reflects the Company’s historical data and historical data from the acquired business for the periods indicated. The pro forma data
may not be indicative of the results the Company would have achieved had it completed the acquisition at the beginning of each year presented,
or that it may achieve in the future. The pro forma financial information should be read in conjunction with the accompanying historical
financial statements. Pro forma income per basic and diluted common share is computed based on the weighted average pro forma number of
basic and diluted shares assumed to be outstanding during the period. Pro forma per share information is presented for the year ended
December 31, 2005 on the basis of 16,259 and 16,306 weighted average shares issued basic and diluted. Pro forma per share information is
presented for the year ended December 31, 2004 on the basis of 13,360 shares issued to our founders. Dilutive pro forma effect is given to
shares which are issuable under an employee stock option plan.
                                                                                                    Pro Forma
                                                                                                   (Unaudited)
                                                                                            Years Ended December 31,

                                                                                     2005                              2004

                Total revenues                                              $               140,300         $                 47,960

                Net income (loss)                                           $                10,916         $                 (6,021 )

                Net income (loss) per common share:
                     Basic                                                  $                  0.67         $                  (0.45 )

                    Diluted                                                 $                  0.67         $                  (0.45 )


       In August 2003, we purchased all of the outstanding stock of Elk Hill Drilling, Inc. and certain drilling rig structures and components
from an affiliate of Elk Hill, U.S. Rig & Equipment, for $33,500 in cash plus the assumption of $15,500 of deferred tax liabilities. In these
transactions, we acquired drilling rigs and inventoried structures and components which, with refurbishment and upgrades, could be used to
assemble 22 drilling rigs. At the date of its acquisition, Elk Hill had no customers, employees, operations or operational drilling rigs. For
accounting purposes, the Elk Hill and U.S. Rig and Equipment acquisitions were treated as acquisitions by our members and then contributions
to us.

                                                                     F-13
Table of Contents

                                                Bronco Drilling Company, Inc. and Subsidiaries

                                NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
                                         (Amounts in thousands, except per share amounts)

3. Notes Payable

      Notes payable consists of advances under a $3,000 revolving line of credit with a bank (―Bank Note Payable‖) and $7,000 original
aggregate principal amount of notes payable to the sellers in the Strata acquisition. The Bank Note Payable bears interest based on JPMorgan
Chase prime (effective rate of 7.25% at December 31, 2005) and is guaranteed by affiliates of Wexford. Interest on the Bank Note Payable is
due monthly with outstanding principal due November 1, 2006 and is collateralized by the Company’s accounts receivable. The Bank Note
Payable has certain financial covenants which include maintaining a 1 to 1 current ratio and minimum tangible net worth for which the
Company was in compliance at December 31, 2005, and among other things, prohibits the payment of dividends. The Bank Note Payable was
paid in full in January 2006 (See Note 17).

      The $7,000 original aggregate principal balance of the promissory notes issued to the sellers is automatically reduced by the amount of
any costs and expenses the Company pays in connection with the refurbishment of one of the rigs it acquired from the sellers. Payment of the
outstanding balance of the notes is due and payable upon satisfactory completion of the refurbishment of this rig. The Company granted the
sellers a security interest in this rig to secure its obligations under the notes. The outstanding aggregate principal balance on these notes do not
bear any interest other than default interest in the event of a default. The amount due on the note, net of costs and expenses of $2,497 paid by
the Company, was $4,503 at December 31, 2005. The note was paid in full in January 2006 (See Note 2).

4. Long-term Debt

      Long-term debt consists of the following at:
                                                                                                                    December 31,

                                                                                                        2005                            2004

Note Payable to General Electric Capital Corporation, collateralized by the
  Company’s assets, excluding cash and accounts receivable, due in varying
  monthly installments plus interest at a floating rate equal to LIBOR plus 5%,
  due April 2010, repaid with proceeds of our initial public offering (1)                      $                 —             $               16,300
Note payable to Merrill Lynch Capital, collateralized by the Company’s assets,
  payable in sixty monthly installments equal to one sixtieth of the outstanding
  principal on January 1, 2006 plus interest at a floating rate equal to LIBOR plus
  2.71% (7.01% at December 31, 2005), due January 1, 2011 (2)                                                  43,000                            —
Note payable to De Lage Landen Financial Services, collateralized by crane,
  payable in ninety-six monthly installments of $18 plus interest at 6.74%, due
  December 15, 2013 (3)                                                                                         1,322                            —

                                                                                                               44,322                          16,300
Less current installments                                                                                       8,012                           3,550


                                                                        F-14
Table of Contents

                                               Bronco Drilling Company, Inc. and Subsidiaries

                                NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
                                         (Amounts in thousands, except per share amounts)

      Long-term debt maturing each year subsequent to December 31, 2005 is as follows:

                      2006                                                                                        $    8,012
                      2007                                                                                             8,738
                      2008                                                                                             8,748
                      2009                                                                                             8,758
                      2010                                                                                             8,769
                      2010 and thereafter                                                                              1,297

                                                                                                                  $ 44,322


(1)   At December 31, 2004, the credit facility with General Electric Capital Corporation (―GECC‖) provided for monthly advances at the
      Company’s request of at least $3,000, subject to maximum borrowings of $18,000. In April 2005, the credit facility was amended to
      increase the maximum amount of term loans to $25,000 and reduce required draws to $2,500 increments. Each advance was payable in
      60 equal monthly installments with final maturity at April 1, 2010. Interest was due monthly at LIBOR plus 5%. The term note was
      collateralized by the Company’s assets, excluding cash and accounts receivable. The term note was repaid in full on August 29, 2005,
      with proceeds from the Company’s initial public offering.

(2)   On September 19, 2005, the Company entered into a Term Loan and Security Agreement with Merrill Lynch Capital, a division of
      Merrill Lynch Business Financial Services, Inc., as lender (―Merrill Lynch‖ or the ―lender‖). The term loan provides for a term
      installment loan in an aggregate amount not to exceed $50,000 and provides for a commitment by Merrill Lynch to advance funds from
      time to time until December 31, 2005. The outstanding balance under the term loan may not exceed 60% of the net orderly liquidation
      value of the Company’s operating land drilling rigs. Proceeds of the term loan may be used to replenish working capital for general
      business purposes, finance improvements to and the refurbishment of land drilling rigs, and to acquire additional land drilling rigs. On
      September 19, 2005, the Company borrowed $43,000 under the term loan.

      The term loan bears interest on the outstanding principal balance at a variable per annum rate equal to LIBOR plus 271 basis points. For
      the period from September 19, 2005 to January 1, 2006, interest only is payable monthly on the outstanding principal balance.
      Commencing February 1, 2006, the outstanding principal and interest on the term loan will be payable in sixty consecutive monthly
      installments, each in an amount equal to one sixtieth of the outstanding principal balance on January 1, 2006 plus accrued interest on the
      outstanding principal balance. Any outstanding principal and accrued but unpaid interest will be immediately due and payable in full on
      January 1, 2011. The Company’s obligations under the term loan are collateralized by a first lien and security interest on substantially all
      of the Company’s assets and are guaranteed by each of the Company’s principal subsidiaries. The term loan includes usual and certain
      restrictive negative covenants and requires the Company to meet certain financial covenants, including maintaining (1) a minimum
      ―Fixed Charge Coverage Ratio‖ and (2) a maximum ―Total Debt to EBITDA Ratio‖ as defined in the agreement. The Company was in
      compliance with all covenants at December 31, 2005. In January 2006, all borrowings were repaid in full and the term loan and security
      agreement were terminated at such time (See Note 17).

(3)   On December 7, 2005, the Company entered into a Term Loan and Security Agreement with De Lage Landen Financial Services, Inc.
      The term loan provides for a term installment loan in an aggregate amount not to exceed $1,322. The proceeds of the term loan were used
      to purchase a crane.

                                                                       F-15
Table of Contents

                                               Bronco Drilling Company, Inc. and Subsidiaries

                                 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
                                          (Amounts in thousands, except per share amounts)

5. Income Taxes

      Income tax expense consists of the following:
                                                                                               Years Ended December 31,

                                                                            2005                           2004                                2003

Current:
    State                                                           $                205        $                   —              $                   —
    Federal                                                                        1,167                            —                                  —
Deferred:
    State                                                                            510                             28                                 32
    Federal                                                                        4,647                            257                                285

Income tax expense                                                  $              6,529        $                   285            $                   317


      Deferred income tax assets and liabilities are as follows:
                                                                                                        Years Ended December 31,

                                                                                                 2005                                  2004

        Deferred tax assets:
        Stock option expense                                                            $                  222            $                     —
        Other                                                                                              125                                  —

        Total deferred tax assets                                                                          347                                  —
        Deferred tax liabilities:
        Property and equipment, principally due to differences in
          depreciation                                                                                  21,563                                16,059

        Net deferred tax liabilities                                                    $               21,216            $                   16,059


      Upon the conversion from a limited liability company to a taxable corporation in conjunction with its initial public offering, the Company
incurred a one-time charge to operations in the third quarter of 2005 of approximately $4,412 to record deferred taxes upon change in tax
status.

       In assessing its ability to realize deferred tax assets, the Company considers whether it is more likely than not that some portion or all of
the deferred tax assets will not be realized. Its ultimate realization of deferred tax assets depends on the generation of future taxable income
during the periods in which those temporary differences become deductible. The Company considers the scheduled reversal of deferred tax
liabilities and projected future taxable income in making this assessment. The Company believe it is more likely than not that it will realize the
benefits of these deductible differences.

                                                                        F-16
Table of Contents

                                                  Bronco Drilling Company, Inc. and Subsidiaries

                               NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
                                        (Amounts in thousands, except per share amounts)

     The provision for income taxes on continuing operations differs from the amounts computed by applying the federal income tax rate of
34% to net income. The differences are summarized as follows:
                                                                                                          Years Ended December 31,

                                                                                             2005                    2004                2003

Expected tax expense (benefit)                                                          $       3,964           $        (843 )      $          (419 )
State income taxes                                                                                431                    (149 )                  (74 )
Conversion to a taxable corporation                                                             4,412                     —                      —
(Income) loss attributable to nontaxable entity                                                (2,200 )                 1,294                    831
Tax exempt interest                                                                               (78 )                   —                      —
Other                                                                                             —                       (17 )                  (21 )

                                                                                        $       6,529           $           285      $          317


6. Workers’ Compensation and Health Insurance

     The Company is insured under a large deductible workers’ compensation insurance policy. The policy generally provides for a $250
deductible per covered accident. Due to the high deductible, the policy requires the Company to maintain a letter of credit with a bank. At
December 31, 2005 and 2004, the Company had deposits of $2,184 and $600, respectively, with a bank collateralizing the letter of credits. The
deposits are reflected in restricted cash.

      On November 1, 2005, the Company initiated a self-insurance program for major medical, hospitalization and dental coverage for
employees and their dependents, which is partially funded by payroll deductions. The Company provided for both reported and incurred but not
reported medical costs in the accompanying consolidated balance sheets. We have a maximum liability of $50 per employee/dependent per
year. Amounts in excess of the stated maximum are covered under a separate policy provided by an insurance company. Accrued expenses at
December 31, 2005 included approximately $170 for our estimate of incurred but not reported costs related to the self-insurance portion of our
health insurance.

7. Transactions with Affiliates

      Effective April 1, 2005, the Company entered into an administrative services agreement with its affiliate Gulfport Energy Corporation
(―Gulfport‖). Under this agreement, Gulfport agreed to provide certain services to the Company, including accounting, human resources, legal
and technical support services. In return for the services, the Company has agreed to pay Gulfport an annual fee of approximately $414 payable
in equal monthly installments during the term of this agreement. In addition, the Company leased approximately 1,200 square feet of office
space from Gulfport for the Company’s headquarters for an annual rent of $21 payable in equal monthly installments. The services we receive
under the administrative services agreement and the fees for such services can be amended by mutual agreement of the parties. In January
2006, the Company reduced the level of administrative services being provided by Gulfport and increased its office space to approximately
2,500 square feet. As a result, the Company’s annual fee for administrative services was reduced to approximately $150 and its annual rental
was increased to approximately $44 payable in equal monthly installments. The administrative services agreement has a three-year term, and
upon expiration of that term the agreement will continue on a month-to-month basis until cancelled by either party with at least 30 days prior
written notice. The administrative services agreement is terminable (1) by the Company at any time with at least 30 days prior written notice to
Gulfport and (2) by either party if the other party is in material breach of the agreement and such breach has not been cured within 30 days of
receipt of written notice of such breach of the agreement. Prior to entry into this

                                                                      F-17
Table of Contents

                                               Bronco Drilling Company, Inc. and Subsidiaries

                                NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
                                         (Amounts in thousands, except per share amounts)

administrative services agreement, we reimbursed Gulfport for its dedicated employee time, office space and general and administrative costs
based upon the pro rata share of time its employees spend performing services for us. The Company reimbursed Gulfport approximately $353,
$115 and $33 in consideration for those services during the years ended December 31, 2005, 2004 and 2003, respectively. At December 31,
2005 and 2004, approximately $47 and $17, respectively, was owed to Gulfport and included in accounts payable.

       Additionally, the Company provided contract drilling services totaling $2,527, $0 and $184 to affiliated entities for the years ended
December 31, 2005, 2004 and 2003. Certain borrowings for acquisitions (see Note 2) and note payable guarantee (see Note 3) were from
affiliates.

8. Commitments and Contingencies

      The Company leases six service locations under noncancelable operating leases that have various expirations from 2008 to 2015. Related
rent expense was $358, $177 and $98 for the years ended December 31, 2005, 2004 and 2003, respectively.

      Aggregate future minimum lease payments under the noncancelable operating leases for years subsequent to December 31, 2005 are as
follows:

                      2006                                                                                          $    544
                      2007                                                                                               522
                      2008                                                                                               390
                      2009                                                                                               274
                      2010                                                                                               251
                      2011 and thereafter                                                                                766

                                                                                                                    $ 2,747


      The Company currently has a lawsuit pending in which the Company sued the defendant, an oil and gas operating company, for
approximately $942 as a result of the defendant’s refusal to make payment pursuant to the terms of its drilling contract. The defendant has
countersued for damages in excess of $2,800, alleging breach of contract, negligence, gross negligence and breach of warranties. The trial date
has been set for August 14, 2006. The Company is vigorously prosecuting its claims and defending against the counterclaims in this matter, and
will continue to file appropriate responses, motions and documents as necessary. It is not possible to predict the outcome of this matter. An
allowance of $146 has been provided for a portion of the amounts receivable under the drilling contract. No amounts have been accrued for
damages sought in the counterclaim. Should the amounts ultimately not be collected or if any amounts are due under the counterclaims then
additional expenses will be recorded.

     Various other claims and lawsuits, incidental to the ordinary course of business, are pending against the Company. In the opinion of
management, all matters are adequately covered by insurance or, if not covered, are not expected to have a material effect on the Company’s
consolidated financial position, results of operations or cash flows.

9. Business Segments and Concentrations

      Substantially all of the Company’s operations relate to contract drilling of oil and gas wells. Accordingly, we classify all our operations in
a single segment.

                                                                       F-18
Table of Contents

                                             Bronco Drilling Company, Inc. and Subsidiaries

                                 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
                                          (Amounts in thousands, except per share amounts)

      For the year ended 2005, revenue from one customer was approximately 10% of total revenue, for 2004 one customer accounted for 11%
of total revenue and for 2003 two customers accounted for 13% and 11% of total revenues. At December 31, 2005, three customers accounted
for approximately 8%, 7% and 7% of accounts receivable. At December 31, 2004, three customers accounted for approximately 14%, 13% and
12% of accounts receivable.

10. Net Income Per Common Share

    The following table presents a reconciliation of the numerators and denominators of the basic earnings per share (―EPS‖) and diluted EPS
comparisons as required by SFAS No. 128 for the year:
                                                                                                                    Year Ended
                                                                                                                    December 31,
                                                                                                                        2005

                Basic:
                Net income                                                                                         $       5,131

                Weighted average shares                                                                                  16,259

                Earnings (loss) per share                                                                          $        0.32

                Diluted:
                Net income                                                                                         $       5,131

                Weighted average shares:
                Outstanding                                                                                              16,259
                Options                                                                                                      47

                                                                                                                         16,306

                Loss per share                                                                                     $        0.31


11. Equity Transactions

      In January 2005, the Company received a capital contribution of $1,515 from Wexford. This contribution was used to fund the letter of
credit required for the Company’s workers’ compensation policy.

      In August 2005, the Company completed its initial public offering in which the Company sold 5,715 shares of common stock at an
offering price of $17.00 per share, resulting in net proceeds to the Company of approximately $89,000, excluding offering expenses of $1,354.
The Company used approximately $40,500 of these proceeds to repay in full its loans from Alpha Investors, LLC and Solitair LLC, entities
controlled by Wexford, and all borrowings under the credit facility with GECC.

       Under the terms of an agreement between Bronco Drilling Holdings, L.L.C., the Company’s then sole stockholder, and Steven C. Hale,
the Company’s former President and Chief Operating Officer, following successful completion of the initial public offering Mr. Hale was
entitled to receive the sum of $2,000 and shares of common stock having a market value of $2,000 based on the initial public offering price.
These payments were made by Bronco Drilling Holdings and not by the Company. The Company accounted for the payments as a capital
contribution in the amount of $4,000 and compensation expense in the amount of $4,000 during the third quarter of 2005, the period in which
the obligations were incurred.

                                                                    F-19
Table of Contents

                                               Bronco Drilling Company, Inc. and Subsidiaries

                                NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
                                         (Amounts in thousands, except per share amounts)

      Effective September 1, 2005, the Company issued 65 shares of common stock to the shareholders of Hays Trucking, Inc. in connection
with our acquisition of Hays Trucking, Inc. (See Note 2).

      In November 2005, the Company closed a follow-on public offering of a total of 4,025 shares of common stock at a price of $23.00 per
share resulting in net proceeds to the Company of approximately $87,000, excluding offering expenses of $462. The offering included a total of
525 shares purchased pursuant to the underwriters’ overallotment option, which was exercised in full on October 31, 2005.

     The Company has adopted SFAS No. 123(R), ― Share-Based Payment .‖ SFAS No. 123(R) requires a public entity to measure the costs
of employee services received in exchange for an award of equity instruments based on the grant-date fair value of the award. That cost will be
recognized over the period during which an employee is required to provide service in exchange for the award. The compensation expense
recorded of $589 is also reflected in paid-in-capital at December 31, 2005.

12. Stock Options and Stock Option Plan

      On December 31, 2005, the Company had one share-based compensation plan adopted on July 20, 2005 and amended on November 16,
2005 which is described below. The compensation cost that has been charged against income was $589 for the year ended December 31, 2005.
The total income tax benefit recognized in the income statement for share-based compensation arrangements was $222 for the year ended
December 31, 2005. These options are reported as equity instruments and their fair value is amortized to expense using the straight line method
over the vesting period. The shares of stock issued once the options are exercised will be authorized but unissued common stock.

      The purpose of the plan is to enable the Company, and any of its affiliates, to attract and retain the services of the types of employees,
consultants and directors who will contribute to its long-range success and to provide incentives which are linked directly to increases in share
value which will inure to the benefit of the Company’s stockholders. The plan provides a means by which eligible recipients of awards may be
given an opportunity to benefit from increases in value of the Company’s common stock through the granting of incentive stock options and
nonstatutory stock options. Eligible award recipients are employees, consultants and directors of the Company and its affiliates. Incentive stock
options may be granted only to employees. Awards other than incentive stock options may be granted to employees, consultants and directors.
The shares that may be issued upon exercise of the options will be from authorized but unissued common stock, and the maximum aggregate
amount of such common stock which may be issued upon exercise of all awards under the plan, including incentive stock options, may not
exceed 1,000,000 shares, subject to adjustment to reflect certain corporate transactions or changes in the Company’s capital structure.

      The fair value of each option award is estimated on the date of grant using a Black Scholes valuation model that uses the assumptions
noted in the following table. Expected volatilities are based on the historical volatility of a selected peer group and other factors. The majority
of the Company’s options are held by employees that make up one group with similar expected exercise behavior for valuation purposes. The
expected term of options granted is estimated based on an average of the vesting period and the contractual period. The risk-free rate for
periods within the contractual life of the option is based on the U.S. Treasury yield curve in effect at the time of the grant.

      Under the 2005 Stock Incentive Plan, employee stock options become exercisable in equal monthly installments over a three-year period,
and all options generally expire ten years after the date of grant. The plan

                                                                        F-20
Table of Contents

                                              Bronco Drilling Company, Inc. and Subsidiaries

                               NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
                                        (Amounts in thousands, except per share amounts)

provides that all options must have an exercise price not less than the fair market value of the Company’s common stock on the date of the
grant.

      The following table provides information relating to outstanding stock options at December 31, 2005:
                                                                                                             December 31,
                                                                                                                 2005

                     Expected volatility                                                                               49 %
                     Expected life in years                                                                          5.77
                     Weighted average risk free interest rate                                                        4.33 %

      The Company has not declared dividends since it became a public company and does not intend to do so in the foreseeable future, and
thus did not use a dividend yield. In each case, the actual value that will be realized, if any, will depend on the future performance of the
common stock and overall stock market conditions. There is no assurance that the value an optionee actually realizes will be at or near the
value estimated using the Black-Scholes model. The following table provides information relating to activity in the 2005 Stock Incentive Plan
during 2005:
                                                                                         Weighted                Weighted
                                                                                          Average            Average Remaining          Aggregate
                                                                                       Exercise Price           Contractual              Intrinsic
                                                                    Shares               per Share                  Life                  Value

Options outstanding at December 31, 2004                              —                           —
Granted                                                               574          $            18.91
Exercised                                                             —                           —
Forfeited/expired                                                     —                           —

Options outstanding at December 31, 2005                              574          $            18.91                       9.66     $      2,543

Options fully vested and exercisable at December 31, 2005               63         $            18.16                       9.64     $        314

                                                                                                          Weighted Average           Aggregate
                                                                                                            Grant Date               Grant Date
                                                                                            Shares           Fair Value              Fair Value

Options nonvested at December 31, 2004                                                         —                         —                    —
Granted                                                                                        574       $              9.73        $       5,587
Vested                                                                                          63                      9.34                  589
Forfeited/expired                                                                              —                         —                    —

Options nonvested at December 31, 2005                                                         511       $              9.77        $       4,998


      As of December 31, 2005, there was $4,998 of total unrecognized compensation cost related to nonvested share-based compensation
arrangements granted under the Plan. That cost is expected to be recognized over a weighted-average period of 1.4 years.

13. Fair Value of Financial Instruments

Cash and cash equivalents, trade receivables and payables and short-term debt:

      The carrying amounts of our cash and cash equivalents, trade receivables, payables and short-term debt approximate their fair values due
to the short-term nature of these instruments.

                                                                     F-21
Table of Contents

                                                Bronco Drilling Company, Inc. and Subsidiaries

                                 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
                                          (Amounts in thousands, except per share amounts)

Long-term debt

      The carrying amount of our long-term debt approximates its fair value, as supported by the recent issuance of the debt and because the
rates and terms currently available to us approximate the rates and terms of the existing debt.

14. Employee Benefit Plans

     The Company implemented a 401(k) retirement plan for our eligible employees during 2005. Under the plan, the Company matches
employees’ contributions up to 2%. Employee contributions vest evenly over a three-year period. Our contributions for year ended
December 31, 2005 were $58.

15. Quarterly Results of Operations (unaudited)

         The following table summarizes quarterly financial data for our years ended December 31, 2005 and 2004 (in thousands, except per share
data):
                                                                                      First             Second            Third            Fourth
                                                                                     Quarter            Quarter          Quarter           Quarter

2005
Revenues                                                                            $ 8,617         $ 11,652         $ 18,640          $ 38,976
Income (loss) from operations                                                           770            2,655              (17 )          11,244
Income tax (benefit) expense                                                           (115 )           (116 )          3,919             2,841
Net earnings (loss)                                                                     831            2,528           (5,074 )           6,846
Earnings (loss) per share:
     Basic and diluted                                                                   —                   —              (0.31 )            0.31
Proforma earnings per share:
     Basic and diluted                                                                  0.04                0.12              —                 —

2004
Revenues                                                                            $ 3,677         $      4,081     $      5,363      $      8,752
Loss from operations                                                                   (473 )               (926 )           (440 )            (367 )
Income tax expense (benefit)                                                            (28 )                (57 )            (79 )             449
Net loss                                                                               (443 )               (914 )           (435 )            (974 )
Proforma earnings (loss) per share:
     Basic and diluted                                                                 (0.02 )             (0.05 )          (0.02 )           (0.02 )

      Pro forma earnings (loss) per share are presented for all periods prior to our initial public offering (IPO) based on the number of shares
issued to our founders at our IPO.

                                                                       F-22
Table of Contents

                                              Bronco Drilling Company, Inc. and Subsidiaries

                               NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
                                        (Amounts in thousands, except per share amounts)

16. Valuation and Qualifying Accounts

      The Company’s valuation and qualifying accounts for the years ended December 31, 2005, 2004 and 2003 are as follows:
                                                                                                  Valuation and Qualifying Accounts

                                                                                    Balance          Charged
                                                                                       at            to Costs           Deductions      Balance
                                                                                   Beginning           and                from            at
                                                                                    of Year          Expenses            Accounts      Year End

Year ended December 31, 2003
Allowance for doubtful receivables                                                $      —          $     —            $        —      $    —

Year ended December 31, 2004
Allowance for doubtful receivables                                                $      —          $     146          $        —      $    146

Year ended December 31, 2005
Allowance for doubtful receivables                                                $      146        $     184          $        —      $    330


17. Subsequent Events

      On January 18, 2006, the Company completed the acquisition of six land drilling rigs and certain other assets, including heavy haul trucks
and excess rig equipment and inventory, from Big A Drilling, L.L.C. The purchase price for the assets consisted of $16,300 in cash and 73
shares of our common stock. At closing, the Company also entered into a lease agreement with an affiliate of Big A Drilling under which it
leased a rig refurbishment yard located in Woodward, Oklahoma. The lease has an initial term of six months, and the Company has the option
to extend the initial term for a period of three years following the expiration of the initial term. The Company has the option to purchase the
leased premises at any time during the term of the lease for $200.

      On January 13, 2006, the Company entered into a $150,000 revolving credit facility with Fortis Capital Corp., as administrative agent,
lead arranger and sole bookrunner, and a syndicate of lenders, which include The Royal Bank of Scotland plc, The CIT Group/Business Credit,
Inc., Calyon Corporate and Investment Bank, Merrill Lynch Capital, Comerica Bank and Caterpillar Financial Services Corporation. The
revolving credit facility matures on January 13, 2009. Loans under the revolving credit facility bear interest at LIBOR plus a margin that can
range from 2.0% to 3.0% or, at our option, the prime rate plus a margin that can range from 1.0% to 2.0%, depending on the ratio of our
outstanding senior debt to ―Adjusted EBITDA‖ as defined in the agreement. Our outstanding borrowings under this revolving credit facility of
$57,000 as of January 30, 2006 were used to fund a portion of the Big A Drilling acquisition, and to repay in full borrowings under our term
loan with Merrill Lynch Capital and our revolving line of credit with International Bank of Commerce.

                                                                     F-23
Table of Contents

                                          Report of Independent Registered Public Accounting Firm

Members
Strata Drilling, L.L.C. and Affiliate

We have audited the accompanying combined balance sheet of Strata Drilling, L.L.C. (an Oklahoma limited liability company) and Affiliate as
of December 31, 2004, and the related combined statements of operations and members’ equity and cash flows for the year then ended. These
financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on these financial
statements based on our audit.

We conducted our audit in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards
require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material
misstatement. The Company is not required to have, nor were we engaged to perform an audit of its internal control over financial reporting.
Our audit included consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the
circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control over financial reporting.
Accordingly, we express no such opinion. An audit also includes examining, on a test basis, evidence supporting the amounts and disclosures
in the financial statements, assessing the accounting principles used and significant estimates made by management, as well as evaluating the
overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion.

In our opinion, the combined financial statements referred to above present fairly, in all material respects, the financial position of Strata
Drilling, L.L.C. and Affiliate as of December 31, 2004, and the results of their operations and their cash flows for the year then ended in
conformity with accounting principles generally accepted in the United States of America.


/s/ Grant Thornton LLP

Oklahoma City, Oklahoma
September 21, 2005

                                                                        F-24
Table of Contents

                                                    Strata Drilling, L.L.C. and Affiliate

                                                     COMBINED BALANCE SHEETS
                                                        (Amounts in thousands)

                                                                                                    June 30,        December 31,
                                                                                                     2005               2004

                                                                                                   (Unaudited)
                                     ASSETS
CURRENT ASSETS
   Cash and cash equivalents                                                                   $            201     $         378
   Short-term investments                                                                                   952                —
   Trade receivables                                                                                      1,053               407
   Other                                                                                                      3                 5

Total current assets                                                                                      2,209               790
PROPERTY AND EQUIPMENT – AT COST
   Drilling rigs and related equipment                                                                    5,868             5,574
   Transportation, office, other equipment and building                                                   1,351             1,295

                                                                                                          7,219             6,869
           Less accumulated depreciation                                                                  1,012             1,249

                                                                                                          6,207             5,620
ASSETS HELD FOR SALE                                                                                           —            6,626

                                                                                               $          8,416     $      13,036

                    LIABILITIES AND MEMBERS’ EQUITY
CURRENT LIABILITIES
   Accounts payable                                                                            $            693     $         337
   Accrued liabilities
   Payroll related                                                                                           27                46
   Deferred revenue and other                                                                               232               400
   Current maturities of long-term debt                                                                     749             3,007

Total current liabilities                                                                                 1,701             3,790
LONG-TERM DEBT, less current maturities
  ($699 and $1,067 to affiliates at June 30, 2005 and December 31, 2004)                                  2,580             8,222
COMMITMENTS AND CONTINGENCIES (NOTES E and F)
MEMBERS’ EQUITY
   Members’ interest                                                                                      6,439             3,746
   Note receivable from member                                                                           (2,304 )          (2,722 )

                                                                                                          4,135             1,024

                                                                                               $          8,416     $      13,036


                                       The accompanying notes are an integral part of these statements

                                                                    F-25
Table of Contents

                                                      Strata Drilling, L.L.C. and Affiliate

                                COMBINED STATEMENTS OF OPERATIONS AND MEMBERS’ EQUITY
                                                 (Amounts in thousands)

                                                                                                     Six Months
                                                                                                       Ended          Year Ended
                                                                                                      June 30,        December 31,
                                                                                                        2005              2004

                                                                                                     (Unaudited)
REVENUES
   Contract drilling                                                                             $          3,715     $       6,116
EXPENSES
   Contract drilling                                                                                        1,965             3,570
   Depreciation and amortization                                                                              272               392
   General and administrative                                                                                 781             1,144

                                                                                                            3,018             5,106

           Income from operations                                                                             697             1,010
OTHER INCOME (EXPENSE)
   Interest expense                                                                                           (16 )            (312 )
   Interest income                                                                                             13                —
   Gain on sale of assets                                                                                     426                —
   Other income                                                                                               (15 )              14

                                                                                                              408              (298 )

Income from continuing operations                                                                           1,105               712
DISCONTINUED OPERATIONS
Income (loss) from operations of drilling rig sold (including gain on disposal of
  $3,211 for June 30, 2005)                                                                                 3,174               542

           NET INCOME                                                                                       4,279             1,254
Members’ equity at beginning of period                                                                      1,024             3,003
Decrease (increase) in note receivable from member                                                            419            (2,722 )
Distributions                                                                                              (1,587 )            (511 )

Members’ equity at end of period                                                                 $          4,135     $       1,024


                                         The accompanying notes are an integral part of these statements

                                                                      F-26
Table of Contents

                                                       Strata Drilling, L.L.C. and Affiliate

                                                COMBINED STATEMENTS OF CASH FLOWS
                                                        (Amounts in thousands)

                                                                                                    Six Months
                                                                                                      Ended           Year Ended
                                                                                                     June 30,         December 31,
                                                                                                       2005               2004

                                                                                                    (Unaudited)
Cash flows from operating activities
    Net income                                                                                  $           4,279     $       1,254
    Adjustments to reconcile net income to net cash used in operating activities
         Depreciation and amortization                                                                        272               645
         (Gain)/loss on sale of assets                                                                     (3,637 )              —
         Change in assets and liabilities
              Short-term investments                                                                         (952 )              —
              Trade receivables                                                                              (340 )            (438 )
              Prepaid expenses                                                                                 —                 79
              Other assets                                                                                      2               158
              Accounts payable                                                                                356               144
              Accrued liabilities                                                                            (187 )             403

Net cash (used in) provided by operating activities                                                          (207 )           2,245
Cash flows from investing activities
    Proceeds from the sale of equipment                                                                    10,885                —
    Acquisition of property and equipment                                                                  (1,786 )          (4,448 )

Net cash provided by (used in) investing activities                                                         9,099            (4,448 )
Cash flows from financing activities
    Proceeds from note payable                                                                                 —              4,643
    Principal payments on borrowings                                                                       (7,901 )          (2,013 )
    Distributions                                                                                          (1,168 )            (253 )

                Net cash (used in) provided by financing activities                                        (9,069 )           2,377

                NET INCREASE (DECREASE) IN CASH AND CASH
                 EQUIVALENTS                                                                                 (177 )             174
Cash and cash equivalents at beginning of period                                                              378               204

Cash and cash equivalents at end of period                                                      $             201     $         378

Supplemental Disclosure of Cash Flow Information
Interest paid                                                                                   $              16     $         312


                                         The accompanying notes are an integral part of these statements

                                                                      F-27
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                                                   Strata Drilling, L.L.C. and Affiliate

                                     COMBINED STATEMENTS OF CASH FLOWS – CONTINUED
                                     (Information for the six months ended June 30, 2005 is unaudited)
                                                           (Amounts in thousands)

Supplemental Disclosure of Noncash Investing and Financing Activities

During 2004, certain members sold a combined 44% of their membership interests in the Company to an outside party. The Company issued
notes payable to the sellers and obtained a note receivable from the buyer in the amount of $2,980. The Company makes payments on these
notes payable and records a corresponding non-cash distribution to the buyer and reduction of note receivable from member. Non cash
distributions and reductions of note receivable from member of $419 and $258 were recorded during the six-months ended June 30, 2005 and
year ended December 31, 2004, respectively

During 2004, the Company and Affiliate also assumed and issued new debt in the amount of $4,251 related to the acquisition of rig equipment,
a building and land.

                                                                    F-28
Table of Contents

                                                       Strata Drilling, L.L.C. and Affiliate

                                            NOTES TO COMBINED FINANCIAL STATEMENTS
                           (Information as of June 30, 2005 and for the six months ended June 30, 2005 is unaudited)
                                                            (Amounts in thousands)

NOTE A - ORGANIZATION, NATURE OF BUSINESS AND SUMMARY OF ACCOUNTING POLICIES

Strata Drilling, L.L.C. (the ―Company‖) was formed on October 26, 2000 and provides contract drilling services to oil and gas exploration and
production companies, primarily in Oklahoma. As a limited liability company, members have limited liability for the obligations or debts of the
Company and the term of the Company will expire upon the sale of all or substantially all of the Company’s properties. The Company has an
affiliate, Strata Property, L.L.C. (Affiliate), that is combined with the Company due to common control by members. All material intercompany
accounts and transactions have been eliminated in the combined financial statements.

A summary of the significant accounting policies consistently applied in the preparation of the accompanying combined financial statements
follows.

1.    Cash and Cash Equivalents

The Company considers all highly liquid debt instruments purchased with a maturity of three months or less and money market mutual funds to
be cash equivalents.

The Company maintains its cash and cash equivalents in accounts and instruments which may not be federally insured. The Company has not
experienced any losses in such accounts and believes it is not exposed to any significant credit risks on cash and cash equivalents.

2.    Investments

The Company determines the appropriate classification of its investments in debt and equity securities at the time of purchase and reevaluates
such determinations at each balance sheet date. Debt securities are classified as held-to-maturity when the Company has the positive intent and
ability to hold the securities to maturity. Debt securities for which the Company does not have the intent or ability to hold to maturity are
classified as available-for-sale. Held-to-maturity securities are recorded as either short-term or long-term on the balance sheet based on
contractual maturity date and are stated at amortized cost. Marketable securities that are bought and held principally for the purpose of selling
them in the near term are classified as trading securities and are reported at fair value, with unrealized gains and losses recognized in earnings.
At June 30, 2005 the Company had approximately $952 in trading securities.

3.    Revenue Recognition

The Company earns contract drilling revenue under daywork and footage contracts.

The Company follows the percentage-of-completion method of accounting for footage contract drilling arrangements. Under this method,
drilling revenues and costs related to a well in progress are recognized proportionately over the time it takes to drill the well.
Percentage-of-completion is determined based upon the amount of expenses incurred through the measurement date as compared to total
estimated expenses to be incurred drilling the well. Mobilization costs are not included in costs incurred for percentage-of-completion
calculations. Mobilization costs on footage contracts are deferred and recognized over the days of actual drilling. Under the
percentage-of-completion method, management estimates are relied upon in the determination of the total estimated expenses to be incurred
drilling the well. When estimates of revenues and expenses indicate a loss on a contract, the total estimated loss is accrued.

                                                                       F-29
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                                                      Strata Drilling, L.L.C. and Affiliate

                                  NOTES TO COMBINED FINANCIAL STATEMENTS – CONTINUED
                           (Information as of June 30, 2005 and for the six months ended June 30, 2005 is unaudited)
                                                            (Amounts in thousands)

NOTE A -            ORGANIZATION, NATURE OF BUSINESS AND SUMMARY OF ACCOUNTING POLICIES - CONTINUED

3.    Revenue Recognition - Continued

Revenues on daywork contracts are recognized based on the days completed at the dayrate each contract specifies. Mobilization revenues and
costs for daywork contracts are deferred and recognized over the days of actual drilling.

The receivables from contract drilling in progress represents revenues in excess of amounts billed on contracts in progress.

Revenue arising from claims for amounts billed in excess of the contract price or for amounts not included in the original contract are
recognized when billed less any allowance for uncollectibility. Revenue from such claims is only recognized if it is probable that the claim will
result in additional revenue, the costs for the additional services have been incurred, management believes there is a legal basis for the claim
and the amount can be reliably estimated. Historically, such claims have been immaterial as we have not billed any customers for amounts not
included in the original contract.

4.    Accounts Receivable

The majority of the Company’s accounts receivable are due from companies in the oil and gas industry. Credit is extended based on the
evaluation of a customer’s financial condition and, generally, collateral is not required. Accounts receivable are due within 30 days and are
stated at amounts due from customers, net of an allowance for doubtful accounts when the Company believes collection is doubtful. Accounts
outstanding longer than the contractual payment terms are considered past due. The Company determines its allowance by considering a
number of factors, including the length of time trade accounts receivable are past due, the Company’s previous loss history, the customer’s
current ability to pay its obligation to the Company and the condition of the general economy and the industry as a whole. The Company writes
off specific accounts receivable when they become uncollectible and payments subsequently received on such receivables are credited to the
allowance for doubtful accounts. At June 30, 2005 and December 31, 2004 no accounts were evaluated as uncollectible.

5.    Property and Equipment

Property and equipment, including renewals and betterments, are capitalized and stated at cost, while maintenance and repairs are expensed
currently. Depreciation is provided in amounts sufficient to relate the cost of depreciable assets to operations over their estimated service lives.
The depreciable lives of drilling rigs and related equipment approximate 15 years. Depreciation is not commenced until rigs are placed in
service. Once placed in service, depreciation continues when rigs are being repaired, refurbished or between periods of deployment. The
depreciable life of other equipment and building, ranges from five to 30 years.

The Company reviews long-lived assets to be held and used for impairment whenever events or changes in circumstances indicate that the
carrying amount of the assets may not be recoverable. If the sum of the undiscounted expected future cash flows is less than the carrying
amount of the assets, the Company recognizes an impairment loss based upon fair value of the asset.

                                                                        F-30
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                                                    Strata Drilling, L.L.C. and Affiliate

                                  NOTES TO COMBINED FINANCIAL STATEMENTS – CONTINUED
                           (Information as of June 30, 2005 and for the six months ended June 30, 2005 is unaudited)
                                                            (Amounts in thousands)

NOTE A -            ORGANIZATION, NATURE OF BUSINESS AND SUMMARY OF ACCOUNTING POLICIES - CONTINUED

6.    Use of Estimates

The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires
management to make estimates and assumptions that affect certain reported amounts and disclosures; accordingly, actual results could differ
from those estimates.

7.    Income Taxes

The Company and Affiliate, are limited liability companies, and are classified as partnerships for income tax purposes; accordingly, income
taxes on net earnings are payable by the members and are not reflected in the financial statements.

NOTE B - MEMBERS’ EQUITY

During 2004, certain members of the Company entered into a transaction with a third party and sold a combined 44% of their membership
interests for approximately $3 million. The purchaser of the membership interests issued a note receivable to the Company for the amount of
the purchase price and the Company entered into notes payable agreements with the selling members for the same amounts. The note
receivable to the Company contains required monthly principal and interest payments and is collateralized by the purchaser’s interest in the
Company. The note receivable for members’ interest is reported as a reduction of members’ equity in the accompanying combined financial
statements. In lieu of monthly payments the Company records a distribution to the member and a reduction to the note receivable. The notes
payable from the Company to the members are also payable in monthly installments, which include principal and interest ranging from
6%-7.2%.

                                                                     F-31
Table of Contents

                                                     Strata Drilling, L.L.C. and Affiliate

                                  NOTES TO COMBINED FINANCIAL STATEMENTS – CONTINUED
                           (Information as of June 30, 2005 and for the six months ended June 30, 2005 is unaudited)
                                                            (Amounts in thousands)

NOTE C - LONG-TERM DEBT

Long-term debt consists of the following at:

                                                                                                          June 30,         December 31,
                                                                                                           2005                2004

Note payable to bank in monthly installments of $103, including interest at prime plus 1%
  (6.25% at December 31, 2004), due in September 2007, collateralized by rig equipment, life
  insurance policy of member and all accounts receivable. The note was paid in full in 2005.            $        —     $              3,177
Note payable to bank in monthly installments of $8, including interest at prime (6.25% and
  5.25% at June 30, 2005 and December 31, 2004, respectively), due in February 2014,
  uncollateralized                                                                                              760                    770
Notes payable to members in monthly installments of $83 including interest ranging from 6% to
  7.2%, due dates ranging from June 2006 to May 2014, collateralized by member’s interest                     2,569                   4,181
Note payable to an entity in monthly installments of $14, including interest at 4%, due in June
  2005, collateralized by rig equipment. The note was paid in full in 2005.                                      —                      84
Note payable to bank in monthly installments of $39, including interest at prime plus 2%(7.25%
  at December 31, 2004), due in December 2009, collateralized by rig equipment. The note was
  paid in full in 2005.                                                                                          —                    2,016
Note payable to an entity in monthly installments of $22, including interest at 6.7%, due in May
  2008, collateralized by equipment. The note was paid in full in 2005                                           —                     806
Note payable to an entity in monthly installments of $12, including interest at 6%, due in June
  2006, collateralized by rig equipment. The note was paid in full in 2005.                                      —                     195

                                                                                                              3,329                  11,229
Less current maturities                                                                                         749                   3,007

                                                                                                        $     2,580    $              8,222


Future maturities of long-term debt at December 31, 2004 are as follows:

        Year ending December 31
        2005                                                                                                           $     3,007
        2006                                                                                                                 2,490
        2007                                                                                                                 2,801
        2008                                                                                                                 1,357
        2009                                                                                                                   761
        Thereafter                                                                                                             813

                                                                                                                       $ 11,229


                                                                      F-32
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                                                     Strata Drilling, L.L.C. and Affiliate

                                  NOTES TO COMBINED FINANCIAL STATEMENTS – CONTINUED
                           (Information as of June 30, 2005 and for the six months ended June 30, 2005 is unaudited)
                                                            (Amounts in thousands)

NOTE D - TRANSACTIONS WITH AFFILIATES

On May 24, 2004, the Affiliate entered into an agreement to purchase a 16-acre yard used for equipment storage and refurbishment of stacked
rigs. The purchase price was approximately $1,038, which included the assumption of the outstanding indebtedness of the seller in the amount
of $773 and a note payable to the seller for $265. The Company made all of the principal and interest payments on the assumed debt for the six
months ended June 30, 2005 and year ended December 31, 2004. Management fees of $300 and $360 were paid to two members for the six
months ended June 30, 2005 and the year ended December 31, 2004, respectively.

NOTE E - COMMITMENTS AND CONTINGENCIES

The Company leases certain office space on a month-to-month basis. Payments made during the six months ended June 30, 2005 and the year
ended December 31, 2004 totaled approximately $3 and $6, respectively.

From time to time, claims and lawsuits, incidental to the ordinary course of business, may be pending against the Company. In the opinion of
management, all matters are adequately covered by insurance or, if not covered, are not expected to have a material effect on the Company’s
consolidated financial position or results of operations.

NOTE F - DISCONTINUED OPERATIONS

On January 3, 2005, the Company completed the sale of one of its rigs for total cash proceeds of $10,465. The assets sold consisted primarily
of one rig, additional rig components and other equipment, which the Company sold to realize the increased value of its drilling rig. The assets
qualify as a component of an entity to be classified as held for sale and reported in discontinued operations in accordance with Statement of
Financial Accounting Standards No. 144 ―Accounting for the Impairment or Disposal of Long-Lived Assets‖. The following is the revenue, net
income and assets related to the rig included in the Company’s balance sheet at December 31, 2004 and the statements of operations for the six
months ended June 30, 2005 and the year ended December 31, 2004:

                                                                                                           June 30           December
                                                                                                            2005               2004

        Revenue                                                                                           $       31         $     2,111

        Net (loss) income (including gain on disposal of $3,211 for June 30, 2005)                        $   3,174          $       542

        Assets held for sale
            Trade accounts receivable, net                                                                                   $       306
            Property and equipment, net                                                                                            6,320

                                                                                                                             $     6,626


NOTE G - SIGNIFICANT CUSTOMERS

For 2004, revenue from two customers was approximately 62% and 35% of total revenues and at December 31, 2004 all accounts receivable
were from these two customers.

For the six months ended June 30, 2005, revenue from two customers was approximately 46% and 44% of total revenues and at June 30, 2005
all accounts receivable were from these two customers.

                                                                     F-33
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                                                      Strata Drilling, L.L.C. and Affiliate

                                  NOTES TO COMBINED FINANCIAL STATEMENTS – CONTINUED
                           (Information as of June 30, 2005 and for the six months ended June 30, 2005 is unaudited)
                                                            (Amounts in thousands)

NOTE H - SUBSEQUENT EVENTS

In July 2005, the Company’s members sold all of their membership interests in the Company and Affiliate to Bronco Drilling Company, L.L.C.
(Bronco) an unrelated third party. The aggregate purchase price was $20,000, of which $13,000 was paid in cash and $7,000 was paid in the
form of promissory notes issued to certain members. Included in the sale were two operating rigs, one rig that is currently being refurbished,
related structures, equipment and components and a 16-acre yard in Oklahoma City, Oklahoma used for equipment storage and refurbishment
of stacked rigs. The $7,000 outstanding principal of the promissory notes issued to certain members is automatically reduced by the amount of
any costs and expenses Bronco pays in connection with the refurbishment of one of the rigs that was sold. The Company has agreed to
complete the refurbishment of the rig on or before the end of 2005, subject to limited exceptions. Payment of the outstanding balance of the
loan is due and payable upon completion of the refurbishment of this rig. The selling members have a security interest in this rig to collateralize
the obligations under the notes. The outstanding principal balance on the notes does not bear any interest other than default interest in the event
of a default.

                                                                       F-34
Table of Contents

                                                         Independent Auditors’ Report

The Shareholders and Board of Directors
Thomas Drilling Company

We have audited the accompanying balance sheets of Thomas Drilling Company as of December 31, 2004 and 2003, and the related statements
of income and shareholders’ equity and cash flows for the years then ended. These financial statements are the responsibility of the Company’s
management. Our responsibility is to express an opinion on these financial statements based on our audit.

We conducted our audit in accordance with auditing standards generally accepted in the United States of America. Those standards require that
we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit
includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement
presentation. We believe that our audit provides a reasonable basis for our opinion.

In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of Thomas Drilling
Company as of December 31, 2004 and 2003 and the results of its operations and its cash flows for the years then ended in conformity with
accounting principles generally accepted in the United States of America.

/s/ Freemon, Shapard and Story
Wichita Falls, Texas

June 16, 2005

                                                                      F-35
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                                                            Thomas Drilling Company

                                                             BALANCE SHEETS
                                                  (Amounts in thousands except share amounts)

                                                                         September 30,              December 31,        December 31,
                                                                             2005                       2004                2003
                            ASSETS
                                                                         (Unaudited)
CURRENT ASSETS
 Cash                                                                $            1,009           $             823     $          75
 Receivables – Note C                                                             5,651                       3,579             3,448
 Inventory – Drill bits                                                              48                          56                56
 Deposits                                                                           678                         159                74

     Total current assets                                                         7,386                       4,617             3,653

PROPERTY AND EQUIPMENT – AT COST
  Drilling rigs and related equipment                                            17,466                      15,575            14,051
  Transportation, office, and other equipment                                       527                         299               164

                                                                                 17,993                      15,874            14,215
  Less accumulated depreciation                                                 (13,381 )                   (12,725 )         (12,371 )

                                                                                  4,612                       3,149             1,844

OTHER ASSETS
 Notes receivable – Note D                                                          122                           165             219
TOTAL ASSETS                                                         $           12,120           $           7,931     $       5,716

   LIABILITIES AND SHAREHOLDERS’ EQUITY
CURRENT LIABILITIES
 Accounts payable – Note E                                                          682                       1,131               760
 Notes payable – Note G                                                           2,974                       2,622             2,603

                                                                                  3,656                       3,753             3,363

SHAREHOLDERS’ EQUITY
  Capital stock, 250 Authorized,
    114 issued and 109 outstanding
  Additional paid-in capital                                                      1,341                       1,341             1,341
  Retained earnings                                                               7,297                       3,011             1,186
  Treasury stock                                                                   (174 )                      (174 )            (174 )

     Total shareholders’ equity                                                   8,464                       4,178             2,353

TOTAL LIABILITIES AND SHAREHOLDERS’
  EQUITY                                                             $           12,120           $           7,931     $       5,716


                                     The accompanying notes are an integral part of these financial statements.

                                                                         F-36
Table of Contents

                                                         Thomas Drilling Company

                                   STATEMENTS OF OPERATIONS AND SHAREHOLDERS’ EQUITY
                                                    (Amounts in thousands)

                                                                 Nine Months                     Year Ended            Year Ended
                                                              Ended September 30,                December 31,          December 31,
                                                                     2005                            2004                  2003

                                                                  (Unaudited)
REVENUES
  Drilling rig income                                     $                     24,368          $         18,943       $      13,471
  Rental income                                                                    201                       141                  54

        Total current assets                                                    24,569                    19,084              13,525

EXPENSES
  Contract drilling                                                             16,399                    13,455               9,982
  Depreciation and amortization                                                    657                       653                 539
  General and administrative                                                     1,411                     2,000               1,603

                                                                                18,467                    16,108              12,124

  Income (loss) from operations                                                  6,102                     2,976               1,401

  OTHER INCOME (EXPENSE)
   Interest expense                                                                (33 )                       (18 )             (21 )
   Interest income                                                                  17                          18                 5
   Gain on sale of assets                                                                                      251                —

                                                                                   (16 )                       251               (16 )

     NET INCOME (LOSS)                                                           6,086                     3,227               1,385
Shareholders’ equity at beginning of period                                      4,178                     2,353               1,768
Distributions                                                                   (1,800 )                  (1,402 )              (800 )

Shareholders’ equity at end of period                     $                      8,464          $          4,178       $       2,353


                                  The accompanying notes are an integral part of these financial statements.

                                                                    F-37
Table of Contents

                                                           Thomas Drilling Company

                                                      STATEMENTS OF CASH FLOWS
                                                          (Amounts in thousands)

                                                                         Nine Months
                                                                            Ended                  Year Ended             Year Ended
                                                                        September 30,              December 31,           December 31,
                                                                             2005                      2004                   2003

                                                                        (Unaudited)
Cash Flows From Operating Activities
  Net income                                                        $            6,086            $          3,227        $       1,385
  Adjustments to reconcile net income (loss to net cash
    provided by (used for) operating activities
    Depreciation and amortization                                                  657                           653                539
    Changes in assets and liabilities
       Receivables                                                               (2,072 )                        (131 )          (1,988 )
       Inventory                                                                      8                                              (6 )
       Deposits                                                                    (519 )                         (85 )              25
       Gain on sale of assets                                                        —                           (251 )              —
       Accounts payable                                                            (461 )                         390               272

        Net cash provided by operating activities                                3,699                       3,803                  227

Cash Flows From Investing Activities
    Non-current note receivable collection                                           45                         54                   53
    Purchase of equipment                                                        (2,121 )                   (1,960 )               (689 )
    Sale of equipment                                                                                          253                   —
    Accrued interest income                                                           (2 )                                           —

        Net cash used for investing activities                                   (2,078 )                   (1,653 )               (636 )

Cash Flows From Financing Activities
    Net accrued interest expense                                                     15
    Notes payable advances                                                          350                                             250
    Distributions to shareholders                                                (1,800 )                   (1,402 )               (800 )

        Net cash used for financing activities                                   (1,435 )                   (1,402 )               (550 )

Net increase in cash and cash equivalents                                          186                           748               (959 )
Cash and cash equivalents, beginning of year                                       823                             75             1,034

Cash and cash equivalents, end of year                              $            1,009            $              823      $          75

Supplemental disclosure of cash flow information Cash
  paid during the year for interest                                 $                 18          $                 9     $          50


                                    The accompanying notes are an integral part of these financial statements.

                                                                        F-38
Table of Contents

                                                           Thomas Drilling Company

                                                   NOTES TO FINANCIAL STATEMENTS
                                               (Information as of September 30, 2005 unaudited)
                                                            (Amounts in thousands)

NOTE A - ORGANIZATION, NATURE OF BUSINESS AND SUMMARY OF ACCOUNTING POLICIES

The Company is engaged primarily in drilling for oil, gas, and natural gas liquids. The Company provides contract drilling services to domestic
exploration companies.

A summary of the significant accounting policies consistently applied in the preparation of the accompanying financial statements follows.

1.    Cash and Cash Equivalents

The Company considers all highly liquid debt instruments purchased with a maturity of three months or less and money market mutual funds to
be cash equivalents.

The Company maintains its cash and cash equivalents in accounts and instruments which may not be federally insured. The Company has not
experienced any losses in such accounts and believes it is not exposed to any significant credit risks on cash and cash equivalents.

2.    Revenue Recognition

The Company earns contract drilling revenue under daywork and footage contracts.

The Company follows the percentage-of-completion method of accounting for footage contract drilling arrangements. Under this method,
drilling revenues and costs related to a well in progress are recognized proportionately over the time it takes to drill the well.
Percentage-of-completion is determined based upon the amount of expenses incurred through the measurement date as compared to total
estimated expenses to be incurred drilling the well. Mobilization costs are not included in costs incurred for percentage-of-completion
calculations. Mobilization costs on footage contracts are deferred and recognized over the days of actual drilling. Under the
percentage-of-completion method, management estimates are relied upon in the determination of the total estimated expenses to be incurred
drilling the well. When estimates of revenues and expenses indicate a loss on a contract, the total estimated loss is accrued.

Revenue on daywork contracts are recognized based on the days completed at the day-rate each contract specifies. Mobilization revenues and
costs for daywork contracts are deferred and recognized over the days of actual drilling.

The receivables from contract drilling in progress represents revenues in excess of amounts billed on contracts in progress.

Revenue arising from claims for amounts billed in excess of the contract price or for amounts not included in the original contract is recognized
when billed less any allowance for uncollectibility. Revenue from such claims is recognized if it is probable that the claim will be realized, the
costs for the additional services have been incurred, management believes there is a legal basis for the claim, and the amount can be reliably
estimated.

3.    Accounts Receivable

Substantially all of the Company’s accounts receivable are due from companies in the oil and gas industry. Credit is extended based on
evaluation of a customer’s financial condition and, generally, collateral is not required.

                                                                      F-39
Table of Contents

                                                           Thomas Drilling Company

                                           NOTES TO FINANCIAL STATEMENTS – CONTINUED
                                              (Information as of September 30, 2005 unaudited)
                                                           (Amounts in thousands)

NOTE A -            ORGANIZATION, NATURE OF BUSINESS AND SUMMARY OF ACCOUNTING POLICIES - CONTINUED

3.    Accounts Receivable - Continued

Accounts receivable are due within 30 days and are stated at amounts due from customers, net of an allowance for doubtful accounts when the
Company believes collection is doubtful. Accounts outstanding longer than the contractual payment terms are considered past due. The
Company determines its allowance by considering a number of factors, including the length of time trade accounts receivable are past due, the
Company’s previous loss history, the customer’s current ability to pay its obligation to the Company, and the condition of the general economy
and the industry as a whole. The Company writes off specific accounts receivable when they become uncollectible and payments subsequently
received on such receivables are credited to the allowance for doubtful accounts.

4.    Property and Equipment

Property and equipment, including renewals and betterments, are capitalized and stated at cost, while maintenance and repairs are expensed
currently. Assets are depreciated on a straight-line basis. The depreciable lives of drilling rigs and related equipment are five to ten years.
Depreciation is not commenced until acquired rigs are placed in service. Once placed in service, depreciation continues when rigs are being
repaired, refurbished, or between periods of deployment.

The Company reviews long-lived assets to be held and used for impairment whenever events or changes in circumstances indicate that the
related carrying amount may not be recoverable. If the sum of the undiscounted expected future cash flows is less than the carrying amount of
the assets, the Company recognizes an impairment loss based upon fair value of the asset.

5.    Use of Estimates

The preparation of the financial statements in conformity with accounting principles generally accepted in the United States of America
requires management to make estimates and assumptions that affect the reported amounts and disclosures. Accordingly, actual results could
differ from those estimates.

6.    Income Taxes

The Company has elected to operate as an S-Corporation for income tax reporting. Income tax on net earnings are payable by the shareholders
and are not reflected in the financial statements.

7.    Inventories

Inventories are valued at the lower of cost or market, based on the first-in first-out method.

NOTE B - RELATED PARTY TRANSACTIONS

The Company conducts business with many related parties. Jath Oil Co., Mack Oil Co., and SouthOk Development Co., L.C., utilize the
Company for drilling services. The family that has controlling interest of Thomas Drilling also owns control of these related companies.

                                                                        F-40
Table of Contents

                                                          Thomas Drilling Company

                                          NOTES TO FINANCIAL STATEMENTS – CONTINUED
                                             (Information as of September 30, 2005 unaudited)
                                                          (Amounts in thousands)

NOTE C - ACCOUNTS RECEIVABLE

The Company has various receivable balances due from other entities including related parties at September 30, 2005 and December 31, 2004.
A summary of the account is as follows:

                                                                                         September 30,              December 31,
                                                                                             2005                       2004

        Mack Energy Company                                                          $              154            $            523
        M&M Supply Co.                                                                                                            6

          Total receivables from related parties                                                    154                         529
        Accounts receivable from unrelated parties                                                5,497                       3,050

        Accounts receivable                                                          $            5,651            $          3,579


NOTE D - NOTES RECEIVABLE

The Company has the following notes receivable balances due from related parties at September 30, 2005 and December 31, 2004:

                                                                                        September 30,               December 31,
                                                                                            2005                        2004

        Unpaid balance of company-financed officer stock options
          exercised in prior years                                                  $              122             $            165

            Total notes receivable from related parties                                            122                          165
        Notes receivable from unrelated parties

        Notes receivable                                                            $              122             $            165


NOTE E - ACCOUNTS PAYABLE

In addition to conducting business with third parties, the company also conducts business with companies with common ownership. M&M
Supply Company, Investors Trust Company, Five Point Service, Inc. and Mack Energy Company provide various services and supplies to the
company, and as a result, there are balances payable to these entities at September 30, 2005 and December 31, 2004 as follows:

                                                                                        September 30,               December 31,
                                                                                            2005                        2004

        Mack Energy Company                                                         $               87             $            198
        M & M Supply                                                                               315                          116
        Investors Trust Company                                                                     28                          —
        Five Point Service, Inc.                                                                    19                          —

          Total amounts due related parties                                                        449                          314
        Due to non-related parties                                                                 233                          817

          Accounts payable                                                          $              682             $          1,131


                                                                   F-41
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                                                          Thomas Drilling Company

                                          NOTES TO FINANCIAL STATEMENTS – CONTINUED
                                             (Information as of September 30, 2005 unaudited)
                                                          (Amounts in thousands)

NOTE F - LINE OF CREDIT

Since December 27, 2002, the Company had a revolving line of credit for $5,000 available with BancFirst which was increased to $15,000 on
November 26, 2004. This line of credit matured on November 26, 2005. These funds are accessible either jointly or severally by this company
and the following other companies; Mack Energy Co., Jath Oil Co., Oilco Gas Co., L.C., M & M Supply Co., Enerwest Trading Co, L.C.,
SouthOk Development Co., L.C., and Mack Oil Co. The Company may also request the issuance of a letter of credit from BancFirst, which will
have an effective date from September 29, 2003. As of September 30, 2005 and December 31, 2004, the line of credit and letters of credit were
unused.

NOTE G - NOTES PAYABLE

The Company had related party notes payable to Mack Oil Company at September 30, 2005. The notes are due on demand. Interest accrues
according to the current rate at BancFirst. The current rate at September 30, 2005 was 2.8%. A summary of the notes is as follows:

                                                                                             September 30,                December 31,
                                                                                                 2005                         2004

        Mack Oil                                                                         $            2,225              $          1,875
        Mack Oil                                                                                        729                           729
        Interest Payable                                                                                 33                            18

             Notes payable                                                               $            2,987              $          2,622


NOTE H - SUBSEQUENT EVENTS

On September 2, 2005, the Company entered into an asset purchase agreement with Bronco Drilling Company, Inc. effective as of August 1,
2005. Bronco Drilling Company agreed to purchase the assets from the Company for $68,000 and to assume the contractual service liabilities
of the Company. The companies agreed to close the sale on or before October 15, 2005.

The Company converted from a C Corporation to an S Corporation effective January 1, 2001. An S Corporation may be subject to tax on
subsequent sales of property or liquidation at the corporate level if there were built-in gains at the time of conversion. Management believes
that there were no built-in gains at the time of conversion to an S Corporation.

                                                                      F-42
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                                         Report of Independent Registered Public Accounting Firm

Members
Eagle Drilling, L.L.C. and Affiliates

We have audited the accompanying combined balance sheets of Eagle Drilling, L.L.C. and Affiliates (all Oklahoma limited liability
companies) as of December 31, 2004 and 2003, and the related combined statements of operations and members’ equity and cash flows for the
years then ended. These financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion
on these financial statements based on our audits.

We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those
standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material
misstatement. The Company is not required to have, nor were we engaged to perform an audit of its internal control over financial reporting.
Our audits included consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in
the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control over financial
reporting. Accordingly, we express no such opinion. An audit also includes examining, on a test basis, evidence supporting the amounts and
disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, as well as
evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.

In our opinion, the combined financial statements referred to above present fairly, in all material respects, the financial position of Eagle
Drilling, L.L.C. and Affiliates as of December 31, 2004 and 2003, and the results of their operations and their cash flows for the years then
ended in conformity with accounting principles generally accepted in the United States of America.

/s/ Grant Thornton LLP

Oklahoma City, Oklahoma

December 9, 2005

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                                                   Eagle Drilling, L.L.C. and Affiliates

                                                    COMBINED BALANCE SHEETS
                                                       (Amounts in thousands)

                                                                                           September 30,
                                                                                               2005                   December 31,
                                   ASSETS
                                                                                                                   2004             2003

                                                                                           (Unaudited)
CURRENT ASSETS
 Cash                                                                                  $                  71   $       25       $      —
 Receivables
 Trade, net of allowance for doubtful accounts of $162, $0 and $0 in 2005, 2004
   and 2003, respectively                                                                                319         329               —
 Contract drilling in progress                                                                           837         128               —
 Prepaid expenses                                                                                         62          —                —

Total current assets                                                                                1,289            482               —
PROPERTY AND EQUIPMENT – AT COST
  Drilling rigs and related equipment                                                               5,448           3,649            2,633
  Transportation, office and other equipment                                                        2,153             873              909

                                                                                                    7,601           4,522            3,542
Less accumulated depreciation                                                                         879             364              180

                                                                                                    6,722           4,158            3,362

                                                                                       $            8,011      $ 4,640          $ 3,362

                  LIABILITIES AND MEMBERS’ EQUITY
CURRENT LIABILITIES
 Accounts payable                                                                      $                 284   $     329        $      20
 Accrued liabilities
 Payroll related                                                                                      141             42                —
 Deferred revenue and other                                                                         1,517             18                —
 Current maturities of notes payable                                                                  164            131                —
 Notes payable-members                                                                                 —              —              1,205

Total current liabilities                                                                           2,106            520             1,225
NOTES PAYABLE, less current maturities                                                                    19         149               —
COMMITMENTS AND CONTINGENCIES (Note C)
MEMBERS’ EQUITY
 Members’ interest                                                                                  6,027           4,196            2,137
 Note receivable from members                                                                        (141 )          (225 )             —

                                                                                                    5,886           3,971            2,137

                                                                                       $            8,011      $ 4,640          $ 3,362


                                      The accompanying notes are an integral part of these statements.

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                                                  Eagle Drilling, L.L.C. and Affiliates

                                COMBINED STATEMENTS OF OPERATIONS AND MEMBERS’ EQUITY
                                                 (Amounts in thousands)

                                                                                       Nine Months
                                                                                          ended
                                                                                      September 30,                Year ended
                                                                                           2005                   December 31,

                                                                                                              2004               2003

                                                                                      (Unaudited)
REVENUES
  Contract drilling revenues                                                      $            9,964      $    1,028        $           —
EXPENSES
  Contract drilling                                                                            3,937           1,041                    91
  Depreciation and amortization                                                                  515             277                    78
  General and administrative                                                                   5,278             746                    76

                                                                                               9,730           2,064                245

Income (loss) from operations                                                                    234           (1,036 )            (245 )
OTHER INCOME (EXPENSE)
   Interest expense                                                                              (41 )               —               (1 )
   Other                                                                                         297                 —              447

                                                                                                 256                 —              446

NET INCOME (LOSS)                                                                                 490          (1,036 )              201
 Members’ equity at beginning of period                                                         3,971           2,137             (1,327 )
 Contributions                                                                                  3,042           3,392              3,263
 Distributions                                                                                 (1,701 )          (297 )               —
 Decrease (increase) in note receivable from members                                               84            (225 )               —

Members’ equity at end of period                                                  $            5,886      $    3,971        $     2,137


                                     The accompanying notes are an integral part of these statements.

                                                                  F-45
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                                                        Eagle Drilling, L.L.C and Affiliates

                                                 COMBINED STATEMENTS OF CASH FLOWS
                                                         (Amounts in thousands)

                                                                                                Nine Months
                                                                                                   Ended
                                                                                               September 30,             Year Ended
                                                                                                    2005                 December 31,

                                                                                                                       2004            2003

                                                                                               (Unaudited)
Cash flows from operating activities:
  Net income (loss)                                                                        $              490      $ (1,036 )      $     201
  Adjustments to reconcile net income (loss) to net cash provided by (used in)
    operating activities:
  Depreciation and amortization                                                                           515             277             78
  Changes in current assets and liabilities:
  Receivables                                                                                            (699 )          (457 )           —
  Prepaid expenses                                                                                        (62 )            —              —
  Accounts payable                                                                                        (45 )           309           (163 )
  Accrued expenses                                                                                      1,596              60            (50 )

Net cash provided by (used in) operating activities                                                     1,795            (847 )           66
  Cash flows from investing activities:
  Proceeds from disposition of assets                                                                       —             100             —
  Acquisition of property and equipment                                                                 (1,922 )         (172 )           —

Net cash used in investing activities                                                                   (1,922 )          (72 )           —
  Cash flows from financing activities:
  Distributions                                                                                         (1,701 )         (297 )           —
  Payments of debt                                                                                         (12 )           —            (100 )
  Capital contributions                                                                                  1,886          1,241             34

Net cash provided by financing activities                                                                 173             944            (66 )

Net increase in cash                                                                                         46               25          —
  Beginning cash                                                                                             25               —           —

Ending cash                                                                                $                 71    $          25   $      —

Interest paid                                                                              $                 41    $          —    $          1
   Supplementary Disclosure of Noncash Investing and Financing Activities
   Assets contributed                                                                      $            1,156      $      946      $ 3,229
   Debt converted to equity (See Note F)                                                   $               —       $    1,205      $    —

During 2004 the Company entered into a note payable agreement for a truck totaling approximately $54 and a note payable for rig parts and
equipment of $226. A member has guaranteed the debt and makes payments for the Company resulting in a reduction of notes payable and a
note receivable from the member of $84 during the nine months ended September 30, 2005.

                                          The accompanying notes are an integral part of these statements.

                                                                       F-46
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                                                      Eagle Drilling, L.L.C. and Affiliates

                                             NOTES TO COMBINED FINANCIAL STATEMENTS
                      (Information as of September 30, 2005 and for the nine months ended September 30, 2005 is unaudited)
                                                                ($ in thousands)

NOTE A -            ORGANIZATION, NATURE OF BUSINESS, AND SUMMARY OF ACCOUNTING POLICIES

Business and Principles of Consolidation

Eagle Drilling, L.L.C. (Eagle) was formed on January 1, 2001 and provides contract land drilling services to oil and natural gas exploration and
production companies, primarily in Texas. Eagle has two affiliates, Thornton Drilling Equipment, L.L.C. and Riverside Oilfield Equipment,
L.L.C. collectively the ―Company‖, that are combined with the Company due to common control by members. As limited liability companies,
members have limited liability for the obligations or debts of the Company and the term of the Company will expire upon the sale of all or
substantially all of the Company’s assets. All intercompany accounts and transactions have been eliminated in the combined financial
statements.

A summary of the significant accounting policies consistently applied in the preparation of the accompanying consolidated financial statements
follows.

1.    Cash

The Company maintains its cash in accounts which may not be federally insured. The Company has not experienced any losses in such
accounts and believes it is not exposed to any significant credit risks on cash.

2.    Revenue Recognition

The Company earns contract drilling revenue under daywork contracts. Revenues on daywork contracts are recognized based on the days
completed at the dayrate each contract specifies. Mobilization revenues and costs for daywork contracts are deferred and recognized over the
days of actual drilling.

The receivables from contract drilling in progress represents revenues in excess of amounts billed on contracts in progress.

Revenue arising from claims for amounts billed in excess of the contract price or for amounts not included in the original contract are
recognized when billed less any allowance for uncollectibility. Revenue from such claims is only recognized if it is probable that the claim will
result in additional revenue, the costs for the additional services have been incurred, management believes there is a legal basis for the claim
and the amount can be reliably estimated. Historically, such claims have been immaterial as the Company has not billed any customers for
amounts not included in the original contract.

3.    Accounts Receivable

Substantially all of the Company’s accounts receivable are due from companies in the oil and gas industry. Credit is extended based on
evaluation of a customer’s financial condition and, generally, collateral is not required. Accounts receivable are due within 30 days and are
stated at amounts due from customers, net of an allowance for doubtful accounts when the Company believes collection is doubtful. Accounts
outstanding longer than the contractual payment terms are considered past due. The Company determines its allowance by considering a
number of factors, including the length of time trade accounts receivable are past due, the Company’s previous loss history, the customer’s
current ability to pay its obligation to the Company and the condition of the general economy and the industry as a whole. The Company writes
off specific accounts receivable when they become uncollectible and payments subsequently received on such receivables are credited to the
allowance for doubtful accounts. At September 30, 2005, December 31, 2004 and 2003 the allowance for doubtful accounts was $162, $0 and
$0, respectively.

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                                                      Eagle Drilling, L.L.C. and Affiliates

                                     NOTES TO COMBINED FINANCIAL STATEMENTS – CONTINUED
                      (Information as of September 30, 2005 and for the nine months ended September 30, 2005 is unaudited)
                                                                ($ in thousands)

NOTE A -            ORGANIZATION, NATURE OF BUSINESS, AND SUMMARY OF ACCOUNTING POLICIES - CONTINUED

4.    Property and Equipment

Property and equipment, including renewals and betterments, are capitalized and stated at cost, while maintenance and repairs are expensed
currently. Assets are depreciated on a straight-line basis. The depreciable lives of drilling rigs and related equipment are three to 15 years. The
depreciable life of other equipment is three years. Depreciation is not commenced until acquired rigs are placed in service. Once placed in
service, depreciation continues when rigs are being repaired, refurbished or between periods of deployment less than 60 days. When rigs are
stacked for periods greater than 60 days, depreciation is suspended and such rigs are subject to review for impairment. Assets not placed in
service and not being depreciated were $2,446, $1,762 and $928 as of September 30, 2005 and December 31, 2004 and 2003, respectively.

The Company reviews long-lived assets to be held and used for impairment whenever events or changes in circumstances indicate that the
carrying amount of the assets may not be recoverable. If the sum of the undiscounted expected future cash flows is less than the carrying
amount of the assets, the Company recognizes an impairment loss based upon fair value of the asset.

5.    Estimates

The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires
management to make estimates and assumptions that affect certain reported amounts and disclosures; accordingly, actual results could differ
from those estimates.

6.    Income Taxes

The Company and affiliates, are limited liability companies, and are classified as partnerships for income tax purposes; accordingly, income
taxes on net earnings are payable by the members and are not reflected in the financial statements.

NOTE B-ACQUISITIONS

During October 2004 the Company entered in to an agreement with a third party, whereby, the Company purchased rig parts and equipment for
a purchase price of $325. As part of the agreement the Company paid $100 to the third party upon execution of the agreement and entered into
a note payable arrangement for the remaining $226. As part of the agreement, the Company will pay the third party the remaining balance of
$226 in eight quarterly payments with the unpaid balance bearing interest at 8%. The first payment is due February 1, 2005. Additionally, one
of the Company’s members has a note receivable with the Company, whereby, he is personally liable for the debt and thus, when the member
makes payments to the third party there is a corresponding decrease in the note payable and note receivable. The balance of the note receivable
was $141 and $226 at September 30, 2005 and December 31, 2004 and is reflected as a reduction of members’ equity.

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                                                      Eagle Drilling, L.L.C. and Affiliates

                                      NOTES TO COMBINED FINANCIAL STATEMENTS – CONTINUED
                       (Information as of September 30, 2005 and for the nine months ended September 30, 2005 is unaudited)
                                                                 ($ in thousands)

NOTE C - OTHER INCOME

The Company has been involved in an ongoing lawsuit with a third party oil and gas company since 2001. The Company sued the third party
contending that the defendant breached contracts by not paying the sums due the Company for services rendered and an allowance for doubtful
accounts was fully provided for the receivable. The defendant claimed the Company breached its obligations under the contract regarding the
type of drilling rigs used and the crews, claiming it owed no money to the Company. The case was settled in August 2003; whereby, a jury
awarded the Company $396 in damages. The settlement award has been recorded in other income on the combined statements of operations
and members’ equity for the year ended December 31, 2003.

NOTE D - LONG-TERM DEBT

Long-term debt consists of the following at:

                                                                         September 30,             December 31,               December 31,
                                                                             2005                      2004                       2003

Note payable to bank in monthly installments of $1
  including interest at an effective rate of 5.16% at
  December 31, 2004, due in November 2007,
  collateralized by truck                                            $               42           $             54            $            —
Note payable to an individual in quarterly installments
  of $28 including interest at 8%, due in October 2006,
  collateralized by equipment (See Note B)                                          141                        226                         —

                                                                                    183                        280                         —
Less current maturities                                                             164                        131                         —

                                                                     $               19           $            149            $            —


Long-term debt maturing each year subsequent to December 31, 2004 is as follows:

                Year ending December 31

                2005                                                                                                      $ 131
                2006                                                                                                        130
                2007                                                                                                         19

                                                                                                                          $ 280


NOTE E - COMMITMENTS AND CONTINGENCIES

During 2003, 2004 and 2005 the Company leased certain office space on a month-to-month basis. Payments made during the nine months
ended September 30, 2005 and the years ended December 31, 2004 and 2003 totaled approximately $35, $4 and $12, respectively.

Various claims and lawsuits, incidental to the ordinary course of business, are pending against the Company. In the opinion of management, all
matters are adequately covered by insurance or, if not covered, are not expected to have a material effect on the Company’s combined financial
position or results of operations.

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                                                   Eagle Drilling, L.L.C. and Affiliates

                                   NOTES TO COMBINED FINANCIAL STATEMENTS – CONTINUED
                    (Information as of September 30, 2005 and for the nine months ended September 30, 2005 is unaudited)
                                                              ($ in thousands)

NOTE F - MEMBERS’ EQUITY

The Company had member advances for the year ended December 31, 2003 in the amount of $1,205. The advances had no stated payment
terms. During 2004, the notes were converted to members’ equity.

NOTE G - SIGNIFICANT CUSTOMERS

For the nine months ended September 30, 2005, revenue from two customers was approximately 40% and 25%, respectively, of total revenues,
for 2004 two customers accounted for 53% and 30% of total revenues. At September 30, 2005, one customer accounted for 100% of accounts
receivable. At December 31, 2004, three customers accounted for approximately 42%, 39% and 17% of accounts receivable.

NOTE H - SUBSEQUENT EVENTS

On October 3, 2005, the Company’s members sold five operating rigs, seven inventoried rigs and rig equipment and parts to Bronco Drilling
Company, Inc. (Bronco) an unrelated third party.

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                                                           PART II
                                           INFORMATION NOT REQUIRED IN PROSPECTUS

Item 13. Other Expenses Of Issuance And Distribution

      The following table sets forth all expenses payable by the registrant in connection with the registration of the common stock.

                SEC registration fee                                                                                   $    10,850
                NASD filing fee                                                                                             10,640
                Legal fees and expenses                                                                                    100,000
                Accounting fees and expenses                                                                                55,000
                Printing expenses                                                                                          100,000
                Transfer agent fees                                                                                          1,000
                Miscellaneous expenses                                                                                       2,510

                Total                                                                                                  $ 280,000


Item 14. Indemnification of Directors and Officers.

Delaware Law

       Section 145 of the Delaware General Corporation Law, or the DGCL, permits a corporation, under specified circumstances, to indemnify
its directors, officers, employees or agents against expenses (including attorneys’ fees), judgments, fines and amounts paid in settlements
actually and reasonably incurred by them in connection with any action, suit or proceeding brought by third parties by reason of the fact that
they were or are directors, officers, employees or agents of the corporation, if such directors, officers, employees or agents acted in good faith
and in a manner they reasonably believed to be in or not opposed to the best interests of the corporation and, with respect to any criminal action
or proceeding, had no reason to believe their conduct was unlawful. In a derivative action, i.e., one by or in the right of the corporation,
indemnification may be made only for expenses actually and reasonably incurred by directors, officers, employees or agents in connection with
the defense or settlement of an action or suit, and only with respect to a matter as to which they shall have acted in good faith and in a manner
they reasonably believed to be in or not opposed to the best interests of the corporation, except that no indemnification shall be made if such
person shall have been adjudged liable to the corporation, unless and only to the extent that the court in which the action or suit was brought
shall determine upon application that the defendant directors, officers, employees or agents are fairly and reasonably entitled to indemnity for
such expenses despite such adjudication of liability.

      Our certificate of incorporation provides that no director shall be personally liable to us or any of our stockholders for monetary damages
resulting from breaches of their fiduciary duty as directors, except to the extent such limitation on or exemption from liability is not permitted
under the DGCL. The effect of this provision of our certificate of incorporation is to eliminate our rights and those of our stockholders (through
stockholders’ derivative suits on our behalf) to recover monetary damages against a director for breach of the fiduciary duty of care as a
director, including breaches resulting from negligent or grossly negligent behavior, except, as restricted by the DGCL:

      •    for any breach of the director’s duty of loyalty to the company or its stockholders;

      •    for acts or omissions not in good faith or that involve intentional misconduct or a knowing violation of law;

                                                                       II-1
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      •    in respect of certain unlawful dividend payments or stock redemptions or repurchases; and

      •    for any transaction from which the director derives an improper personal benefit.

      This provision does not limit or eliminate our rights or the rights of any stockholder to seek non-monetary relief, such as an injunction or
rescission, in the event of a breach of a director’s duty of care.

       If the DGCL is amended to authorize corporate action further eliminating or limiting the liability of directors, then, in accordance with
our certificate of incorporation, the liability of our directors to us or our stockholders will be eliminated or limited to the fullest extent
authorized by the DGCL, as so amended. Any repeal or amendment of provisions of our certificate of incorporation limiting or eliminating the
liability of directors, whether by our stockholders or by changes in law, or the adoption of any other provisions inconsistent therewith, will
(unless otherwise required by law) be prospective only, except to the extent such amendment or change in law permits us to further limit or
eliminate the liability of directors on a retroactive basis.

Certificate of Incorporation and Bylaws

       Our certificate of incorporation provides that we will, to the fullest extent authorized or permitted by applicable law, indemnify our
current and former directors and officers, as well as those persons who, while directors or officers of our corporation, are or were serving as
directors, officers, employees or agents of another entity, trust or other enterprise, including service with respect to an employee benefit plan, in
connection with any threatened, pending or completed proceeding, whether civil, criminal, administrative or investigative, against all expense,
liability and loss (including, without limitation, attorney’s fees, judgments, fines, ERISA excise taxes and penalties and amounts paid in
settlement) reasonably incurred or suffered by any such person in connection with any such proceeding. Notwithstanding the foregoing, a
person eligible for indemnification pursuant to our certificate of incorporation will be indemnified by us in connection with a proceeding
initiated by such person only if such proceeding was authorized by our board of directors, except for proceedings to enforce rights to
indemnification.

      The right to indemnification conferred by our certificate of incorporation is a contract right that includes the right to be paid by us the
expenses incurred in defending or otherwise participating in any proceeding referenced above in advance of its final disposition, provided,
however, that if the DGCL requires, an advancement of expenses incurred by our officer or director (solely in the capacity as an officer or
director of our corporation) will be made only upon delivery to us of an undertaking, by or on behalf of such officer or director, to repay all
amounts so advanced if it is ultimately determined that such person is not entitled to be indemnified for such expenses under our certificate of
incorporation or otherwise.

     The rights to indemnification and advancement of expenses will not be deemed exclusive of any other rights which any person covered
by our certificate of incorporation may have or hereafter acquire under law, our certificate of incorporation, our bylaws, an agreement, vote of
stockholders or disinterested directors, or otherwise.

      Any repeal or amendment of provisions of our certificate of incorporation affecting indemnification rights, whether by our stockholders
or by changes in law, or the adoption of any other provisions inconsistent therewith, will (unless otherwise required by law) be prospective
only, except to the extent such amendment or change in law permits us to provide broader indemnification rights on a retroactive basis, and will
not in any way diminish or adversely affect any right or protection existing at the time of such repeal or amendment or adoption of such
inconsistent provision with respect to any act or omission occurring prior to such repeal or amendment or adoption of such inconsistent
provision. Our certificate of incorporation also permits us, to the extent and in the manner authorized or permitted by law, to indemnify and to
advance expenses to persons other that those specifically covered by our certificate of incorporation.

       Our bylaws include the provisions relating to advancement of expenses and indemnification rights consistent with those set forth in our
certificate of incorporation. In addition, our bylaws provide for a right of

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indemnitee to bring a suit in the event a claim for indemnification or advancement of expenses is not paid in full by us within a specified period
of time. Our bylaws also permit us to purchase and maintain insurance, at our expense, to protect us and/or any director, officer, employee or
agent of our corporation or another entity, trust or other enterprise against any expense, liability or loss, whether or not we would have the
power to indemnify such person against such expense, liability or loss under the DGCL.

      Any repeal or amendment of provisions of our bylaws affecting indemnification rights, whether by our board of directors, stockholders or
by changes in applicable law, or the adoption of any other provisions inconsistent therewith, will (unless otherwise required by law) be
prospective only, except to the extent such amendment or change in law permits us to provide broader indemnification rights on a retroactive
basis, and will not in any way diminish or adversely affect any right or protection existing thereunder with respect to any act or omission
occurring prior to such repeal or amendment or adoption of such inconsistent provision.

Indemnification Agreements

      We have entered into indemnification agreements with our directors and executive officers. Pursuant to such indemnification agreements,
we have agreed to indemnify each such person to the fullest extent permitted by our certificate of incorporation, our bylaws and applicable law,
as the same exists or may hereafter be amended or replaced (but only to the extent that such change authorizes broader indemnification rights
than were permitted prior thereto). We have agreed to indemnify each such indemnitee against any and all expenses or losses in the event any
such indemnitee was, is or becomes party to, or was or is threatened to be made party to, or was or is otherwise involved in, any proceeding,
whether civil, criminal, administrative or investigative, by virtue of his or her status as a director, officer, employee, partner, member, manager,
trustee, fiduciary or agent of ours or of another entity, trust or enterprise (when holding such corporate status at our request). We also have
agreed to indemnify such indemnitee against any federal, state, local or foreign taxes imposed as a result of the actual or deemed receipt of any
payments under the indemnification agreement. Notwithstanding the foregoing, no indemnification obligations will arise (i) in the event a
proceeding was initiated or brought voluntarily by such indemnitee against us or our directors, officers, employees or other indemnities and the
board of directors has not authorized or consented to the initiation of such proceeding, or (ii) for an accounting of profits made from the
purchase and sale by such indemnitee of securities of ours within the meaning of Section 16(b) of the Exchange Act or any similar successor
statute.

      Pursuant to these indemnification agreements we also have agreed to indemnify any indemnitee who, by reason of his or her corporate
status described in the immediately preceding paragraph, is a witness in any proceeding to which such indemnitee is not a party, against all
expenses actually and reasonably paid or incurred by such indemnitee in connection therewith. We also are obligated to advance any expenses
(except the amount of any settlement) actually and reasonably paid or incurred by the indemnitee in connection with any proceeding (except
those proceedings initiated by such indemnitee which are not authorized by the board of directors) to the fullest extent permitted by law upon
delivery of the requisite undertaking to repay such advances, if it is ultimately adjudicated that such person is not entitled to indemnification.

Item 15. Recent Sales of Unregistered Securities.

       Immediately prior to the commencement of our initial public offering, we became a Delaware corporation in a transaction in which
Bronco Drilling Company, L.L.C., our predecessor company, when it merged with its wholly owned subsidiary Bronco Drilling Company,
Inc., a newly-formed Delaware corporation. In connection with its formation, Bronco Drilling Company, Inc. issued 13,360,000 shares of its
common stock to Bronco Drilling Company, L.L.C.

     On September 1, 2005, we issued 65,368 shares of common stock to the shareholders of Hays Trucking, Inc. in connection with our
acquisition of Hays Trucking, Inc.

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     Effective January 18, 2006, we issued 72,571 shares of the Company’s common stock, par value $0.01 per share, in connection with our
acquisition of Big A Drilling Company, L.C. We have agreed to file with the Securities and Exchange Commission, on or about August 16,
2006, at our sole cost and expense, a registration statement on Form S-3 registering the shares for resale by Big A Drilling.

    The shares of Bronco Drilling Company, Inc. issued in connection with the foregoing transactions were issued in reliance upon the
exemption from registration afforded by Section 4(2) of the Securities Act. No underwriters were involved in the above transactions.

Item 16. Exhibits and Financial Statement Schedules.

        (a) The following is a list of exhibits filed as a part of this registration statement.

Exhibit
Number                                                                              Description

 1.1*                    Form of Underwriting Agreement.
 2.1                     Merger Agreement, dated as of August 11, 2005, by and among Bronco Drilling Holdings, L.L.C, Bronco Drilling
                         Company, L.L.C. and Bronco Drilling Company, Inc. (incorporated by reference to Exhibit 2.1 to Registration Statement
                         on Form S-1, File No. 333-128861, filed by the Company with the SEC on October 6, 2005)
 3.1                     Amended and Restated Certificate of Incorporation of the Company, dated August 11, 2005 (incorporated by reference to
                         Exhibit 3.1 to Registration Statement on Form S-1, File No. 333-128861, filed by the Company with the SEC on
                         October 6, 2005).
 3.2                     Bylaws of the Company (incorporated by reference to Exhibit 3.2 to Amendment No. 1 to the Registration Statement on
                         Form S-1, File No. 333-125405, filed by the Company with the SEC on July 14, 2005).
 4.1                     Specimen Certificate for Shares of Common Stock (incorporated by reference to Exhibit 4.1 to Amendment No. 2 to the
                         Registration Statement on Form S-1, File No. 333-125405, filed by the Company with the SEC on August 2, 2005).
 5.1                     Opinion of Akin Gump Strauss Hauer & Feld LLP (incorporated by reference to Exhibit 5.1 to Amendment No. 1 to the
                         Registration Statement on Form S-1, File No. 333-131420, filed by the Company with the SEC on March 7, 2006).
10.1                     Term Loan and Security Agreement, dated as of September 19, 2005, by and between Merrill Lynch Capital, as lender,
                         and Bronco Drilling Company, Inc. (incorporated by reference to Exhibit 99.1 to the Current Report on Form 8-K, File
                         No. 333-125405, filed by the Company with the SEC on September 23, 2005).
10.2                     Business Loan Agreement, dated as of January 1, 2005, by and between International Bank of Commerce, as lender, and
                         Bronco Drilling Company, L.L.C. (incorporated by reference to Exhibit 10.4 to Amendment No. 1 to the Registration
                         Statement on Form S-1, File No. 333-125405, filed by the Company with the SEC on July 14, 2005).
10.3+                    2005 Stock Incentive Plan (incorporated by reference to Exhibit 10.6 to Amendment No. 2 to the Registration Statement
                         on Form S-1, File No. 333-125405, filed by the Company with the SEC on August 2, 2005).
10.4+                    Form of Stock Option Agreement (incorporated by reference to Exhibit 10.7 to Amendment No. 2 to the Registration
                         Statement on Form S-1, File No. 333-125405, filed by the Company with the SEC on August 2, 2005).

                                                                             II-4
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Exhibit
Number                                                                       Description

10.5+               Employment Agreement between the Company and Steven C. Hale (incorporated by reference to Exhibit 10.8 to
                    Amendment No. 2 to the Registration Statement on Form S-1, File No. 333-125405, filed by the Company with the SEC
                    on August 2, 2005).
  10.6+             Employment Agreement between the Company and Karl W. Benzer (incorporated by reference to Exhibit 10.6 to
                    Amendment No. 1 to Registration Statement on Form S-1, File No. 333-128861, filed by the Company with the SEC on
                    October 20, 2005).
  10.7              Administrative Services Agreement, effective as of April 1, 2005, by and between the Company and Gulfport Energy
                    Corporation (incorporated by reference to Exhibit 10.9 to Amendment No. 2 to the Registration Statement on Form S-1,
                    File No. 333-125405, filed by the Company with the SEC on August 2, 2005).
    10.8            Registration Rights Agreement, dated as of August 11, 2005, by and between the Company and Bronco Drilling Holdings,
                    L.L.C. (incorporated by reference to Exhibit 10.8 to Registration Statement on Form S-1, File No. 333-128861, filed by the
                    Company with the SEC on October 6, 2005)
    10.9            Form of Director and Officer Indemnification Agreement (incorporated by reference to Exhibit 10.12 to Amendment No. 2
                    to the Registration Statement on Form S-1, File No. 333-125405, filed by the Company with the SEC on August 2, 2005).
    10.11           Membership Interest Purchase Agreement, effective June 30, 2005, by and among CBK Limited Partnership, Jerold
                    Wilson, LP and Bronco Drilling Company, L.L.C. (incorporated by reference to Exhibit 2.1 to the Current Report on Form
                    8-K, File No. 000-51471, filed by the Company with the SEC on September 26, 2005).
    10.12           Membership Interest Purchase Agreement, effective June 30, 2005, by and among Glen McAlister and Bronco Drilling
                    Company, L.L.C. (incorporated by reference to Exhibit 2.2 to the Current Report on Form 8-K, File No. 000-51471, filed
                    by the Company with the SEC on September 26, 2005).
    10.13           Asset Purchase Agreement, effective as of September 1, 2005, by and between the Company and Eagle Drilling, L.L.C.,
                    Thornton Drilling Equipment LLC, and Riverside Oilfield Equipment LLC (incorporated by reference to Exhibit 10.13 to
                    Registration Statement on Form S-1, File No. 333-128861, filed by the Company with the SEC on October 6, 2005).
    10.14           Asset Purchase Agreement, effective as of August 1, 2005, by and between the Company and Thomas Drilling Co.
                    (incorporated by reference to Exhibit 10.14 to Registration Statement on Form S-1, File No. 333-128861, filed by the
                    Company with the SEC on October 6, 2005)
    10.15           Promissory Note issued by the Company in favor of Theta Investors LLC, dated October 14, 2005 (incorporated by
                    reference to Exhibit 10.15 to Amendment No. 1 Registration Statement on Form S-1, File No. 333-128861, filed by the
                    Company with the SEC on October 20, 2005).
    10.16           Credit Agreement, dated as of January 13, 2006, by and among Bronco Drilling Company, Inc., certain subsidiaries of
                    Bronco Drilling Company, Inc., the financial institutions party thereto and referred to therein as Lenders, Fortis Capital
                    Corp., as administrative agent, lead arranger and sole bookrunner, Merrill Lynch Capital and The Royal Bank of Scotland
                    plc, as co-syndication agents, and Calyon New York Branch and The CIT Group/Business Credit, Inc., as
                    co-documentation agents (incorporated by reference to Exhibit 10.1 to the Current Report on Form 8-K, File
                    No. 000-51471, filed by the Company with the SEC on January 20, 2006).
    10.17           Asset Purchase Agreement dated as of December 16, 2005, by and between Bronco Drilling Company, Inc. and Big A
                    Drilling Company, L.C. (incorporated by reference to Exhibit 10.2 to the Current Report on Form 8-K, File No.
                    000-51471, filed by the Company with the SEC on January 20, 2006).

                                                                      II-5
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Exhibit
Number                                                                          Description

    10.18              Amendment No. 1 to 2005 Stock Incentive Plan (incorporated by reference to Exhibit 10.1 to the Current Report on
                       Form 8-K, File No. 000-51471, filed by the Company with the SEC on November 17, 2005).
    10.19              Consulting Agreement, dated as of February 28, 2006, by and between the Company and Michael O. Thompson
                       (incorporated by reference to Exhibit 10.18 to the Company’s Annual Report on Form 10-K, File No. 000-51471, filed
                       by the Company on March 7, 2006).
    10.20 *            Daywork Drilling Contract, dated as of January 26, 2006, by and between Windsor Energy Resources, Inc. and the
                       Company.
      21.1             List of Significant Subsidiaries of the Company (incorporated by reference to Exhibit 21.1 to the Registration Statement
                       on Form S-1, File No. 333-131420, filed by the Company with the SEC on January 31, 2006).
      23.1 *           Consent of Grant Thornton LLP.
      23.2 *           Consent of Freemon, Shapard & Story.
      23.3             Consent of Akin Gump Strauss Hauer & Feld LLP (incorporated by reference to Exhibit 5.1 to Amendment No. 1 to the
                       Registration Statement on Form S-1, File No. 333-131420, filed by the Company with the SEC on March 7, 2006).
      24.1             Power of Attorney (included on signature pages to the Registration Statement on Form S-1, File No. 333-131420, filed
                       by the Company with the SEC on January 31, 2006 and Amendment No. 1 to the Registration Statement on Form S-1,
                       File No. 333-131420, filed by the Company with the SEC on March 7, 2006).

* Filed herewith.
+ Management contract, compensatory plan or arrangement.

      (b) Financial Statement Schedules.

None.

Item 17. Undertakings.

      Insofar as indemnification for liabilities arising under the Securities Act may be permitted to directors, officers and controlling persons of
the registrant pursuant to the foregoing provisions, or otherwise, the registrant has been advised that in the opinion of the SEC such
indemnification is against public policy as expressed in the Act and is, therefore, unenforceable. In the event that a claim for indemnification is
against such liabilities (other than the payment by the registrant of expenses incurred or paid by a director, officer or controlling person of the
registrant in the successful defense of any action, suit or proceeding) is asserted by such director, officer or controlling person in connection
with the securities being registered, the registrant will, unless in the opinion of its counsel the matter has been settled by controlling precedent,
submit to a court of appropriate jurisdiction the question whether such indemnification by it is against public policy as expressed in the Act and
will be governed by the final adjudication of such issue.

      The undersigned registrant hereby undertakes that:

       (1) For purposes of determining any liability under the Securities Act, the information omitted from the form of prospectus filed as part of
this registration statement in reliance upon Rule 430A and contained in a form

                                                                        II-6
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of prospectus filed by the registrant pursuant to Rule 424(b)(1) or (4) or 497(h) under the Securities Act shall be deemed to be part of this
registration statement as of the time it was declared effective.

      (2) For the purpose of determining any liability under the Securities Act, each post-effective amendment that contains a form of
prospectus shall be deemed to be a new registration statement relating to the securities offered therein, and the offering of such securities at that
time shall be deemed to be the initial bona fide offering thereof.

                                                                        II-7
Table of Contents

                                                                SIGNATURES

      Pursuant to the requirements of the Securities Act, as amended, the registrant has duly caused this Registration Statement to be signed on
its behalf by the undersigned, thereunto duly authorized, in the city of Oklahoma City, State of Oklahoma on the 17th day of March, 2006.

                                                                                       BRONCO DRILLING COMPANY, INC.

                                                                                       By:     / S / D. F RANK H ARRISON
                                                                                               D. Frank Harrison
                                                                                               Chief Executive Officer
                                                                                               and President

     Pursuant to the requirements of the Securities Act, this Registration Statement has been signed by the following persons in the listed
capacities on March 17, 2006:
                                  Name                                                                         Title



/S/    D. F RANK H ARRISON                                                       Chief Executive Officer, President and Director
                                                                                 (Principal Executive Officer)
D. Frank Harrison

/S/    Z ACHARY M. G RAVES                                                       Chief Financial Officer
                                                                                 (Principal Financial and Principal Accounting
                                                                                 Officer)
Zachary M. Graves

*                                                                                Chairman of the Board and Director

Mike Liddell

*                                                                                Director

David L. Houston

*                                                                                Director

Phillip Lancaster

*                                                                                Director

William R. Snipes

*By:     /S/    D. F RANK H ARRISON

         D. Frank Harrison
         Attorney-in-Fact

                                                                      II-8
                                                                3,000,000 Shares

                                                        Bronco Drilling Company, Inc.

                                                                Common Stock

                                                      UNDERWRITING AGREEMENT

                                                                                                                               March        , 2006

JEFFERIES & COMPANY, INC.
JOHNSON RICE & COMPANY L.L.C.
As Representatives of the several Underwriters
c/o JEFFERIES & COMPANY, INC.
520 Madison Avenue
New York, New York 10022

Ladies and Gentlemen:

           Introductory. Bronco Drilling Company, Inc., a Delaware corporation (the ― Company ‖), proposes to issue and sell to the several
underwriters named in Schedule 1 (the ― Underwriters ‖) an aggregate of 1,700,000 shares of its common stock, par value $0.01 per share (the
― Shares ‖), and Bronco Drilling Holdings, L.L.C., a Delaware limited liability company (the ― Selling Stockholder ‖), proposes to sell to the
Underwriters an aggregate of 1,300,000 Shares. The 1,700,000 Shares to be sold by the Company and the 1,300,000 Shares to be sold by the
Selling Stockholder are collectively called the ― Firm Shares .‖ In addition, the Selling Stockholder has granted to the Underwriters an option
to purchase up to an additional 450,000 shares (the ― Optional Shares ‖), as provided in Section 2. The Firm Shares and, if and to the extent
such option is exercised, the Optional Shares are collectively called the ― Offered Shares .‖ Jefferies & Company Inc. (― Jefferies ‖) and
Johnson Rice & Company L.L.C. have agreed to act as representatives of the several Underwriters (in such capacity, the ― Representatives ‖)
in connection with the offering and sale of the Offered Shares.

           The Company has prepared and filed with the Securities and Exchange Commission (the ― Commission ‖) a registration statement
on Form S-1 (File No. 333-131420), which contains a form of prospectus to be used in connection with the public offering and sale of the
Offered Shares. Such registration statement, as amended, including the financial statements, exhibits and schedules thereto, in the form in
which it was declared effective by the Commission under the Securities Act of 1933, as amended, and the rules and regulations promulgated
thereunder (collectively, the ― Securities Act ‖), including any information deemed to be a part thereof at the time of effectiveness pursuant to
Rule 430A under the Securities Act, is called the ― Registration Statement .‖ Any registration statement filed by the Company pursuant to
Rule 462(b) under the Securities Act is called the ― Rule 462(b) Registration Statement ,‖ and from and after the date and time of
filing of the Rule 462(b) Registration Statement the term ―Registration Statement‖ shall include the Rule 462(b) Registration Statement. Such
prospectus, in the form first used by the Underwriters to confirm sales of the Offered Shares or in the form first made available to the
Underwriters by the Company to meet requests of purchasers pursuant to Rule 173 under the Securities Act, is called the ― Prospectus. ‖ As
used herein, ― free writing prospectus ‖ has the meaning set forth in Rule 405 under the Securities Act, and ― Time of Sale Prospectus ‖
means the preliminary prospectus together with the free writing prospectuses, if any, identified on Schedule 3 . As used herein, the terms
―Registration Statement,‖ ―preliminary prospectus,‖ ―Time of Sale Prospectus‖ and ―Prospectus‖ shall include the documents, if any,
incorporated by reference therein. The terms ―supplement,‖ ―amendment,‖ and ―amend‖ as used herein with respect to the Time of Sale
Prospectus or any free writing prospectus shall include all documents subsequently filed by the Company with the Commission pursuant to the
Securities Exchange Act of 1934, as amended (the ― Exchange Act ‖), that are incorporated by reference therein. All references in this
Agreement to (i) the Registration Statement, 462(b) Registration Statement, a preliminary prospectus, or the Prospectus, or any amendments or
supplements to any of the foregoing, shall include any copy thereof filed with the Commission pursuant to its Electronic Data Gathering,
Analysis and Retrieval System (― EDGAR ‖) and (ii) the Prospectus shall be deemed to include the ― electronic Prospectus ‖ provided for use
in connection with the offering of the Offered Shares as contemplated by Section 3(A)(n) of this Agreement.

            The Company and the Selling Stockholder hereby confirm their engagement of Jefferies as, and Jefferies hereby confirms its
agreement with the Company and the Selling Stockholder to render services as, a ― qualified independent underwriter ,‖ within the meaning
of Section (b)(15) of Rule 2720 of the National Association of Securities Dealers, Inc. (the ― NASD ‖) with respect to the offering and sale of
the Shares. Jefferies, solely in its capacity as the qualified independent underwriter and not otherwise, is referred to herein as the ― QIU .‖ The
price at which the Shares will be sold to the public shall not be higher than the maximum price recommended by the QIU.

           Section 1. Representations and Warranties.

          A. Representations and Warranties of the Company . The Company hereby represents, warrants and covenants to each
Underwriter as follows:

      (a) Compliance with Registration Requirements . The Registration Statement and any Rule 462(b) Registration Statement have been
declared effective by the Commission under the Securities Act. The Company has complied with all requests of the Commission for additional
or supplemental information. No stop order suspending the effectiveness of the Registration Statement or any Rule 462(b) Registration
Statement is in effect and no proceedings for such purpose have been instituted or are pending or, to the best knowledge of the Company, are
contemplated or threatened by the Commission.

      Each preliminary prospectus and the Prospectus when filed complied in all material respects with the Securities Act and, if filed by
electronic transmission pursuant to EDGAR (except as may be permitted by Regulation S-T under the Securities Act), was identical to the copy
thereof delivered to the Underwriters for use in connection with the offer and sale of the Offered Shares. Each of the Registration Statement,
any Rule 462(b) Registration Statement and any post-effective amendment thereto, at the time it became effective complied and, as amended or
supplemented, if applicable, will, as of the date of such amendment or supplement, as applicable, comply in all material respects with the
Securities Act and did not

                                                                         2
and, as amended or supplemented, if applicable, will not, as of the date of such amendment or supplement, as applicable, contain any untrue
statement of a material fact or omit to state a material fact required to be stated therein or necessary to make the statements therein not
misleading. The Time of Sale Prospectus does not, and at the time of each sale of the Shares in connection with the offering and at the First
Closing Date (as defined in Section 2), the Time of Sale Prospectus, as then amended or supplemented by the Company, if applicable, will not,
contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements therein, in the light of the
circumstances under which they were made, not misleading. The Prospectus, as of its date, did not and, as amended or supplemented, if
applicable, will not, as of the date of such amendment or supplement, as applicable, contain any untrue statement of a material fact or omit to
state a material fact necessary in order to make the statements therein, in the light of the circumstances under which they were made, not
misleading. The representations and warranties set forth in the three immediately preceding sentences do not apply to statements in or
omissions from the Registration Statement any Rule 462(b) Registration Statement, or any post-effective amendment thereto, or the Prospectus
or Time of Sale Prospectus, or any amendments or supplements thereto, made in reliance upon and in conformity with information relating to
any Underwriter furnished to the Company in writing by the Representatives expressly for use therein, it being understood and agreed that the
only such information furnished by the Representatives to the Company consists of the information described in Section 9(c) below. There are
no contracts or other documents required to be described in the Prospectus or to be filed as exhibits to the Registration Statement which have
not been described or filed as required.

      The Company is not an ―ineligible issuer‖ (as defined in Rule 405) in connection with the offering pursuant to Rules 164, 405 and 433
under the Securities Act. Any free writing prospectus that the Company is required to file pursuant to Rule 433(d) under the Securities Act has
been, or will be, filed with the Commission in accordance with the requirements of the Securities Act and the applicable rules and regulations
of the Commission thereunder. Each free writing prospectus that the Company has filed, or is required to file, pursuant to Rule 433(d) under the
Securities Act or that was prepared by or on behalf of or used or referred to by the Company complies or will comply in all material respects
with the requirements of the Securities Act and the applicable rules and regulations of the Commission thereunder. Except for the free writing
prospectuses, if any, and electronic road shows, if any, furnished to you before first use, the Company has not prepared, used or referred to, and
will not, without your prior consent, prepare, use or refer to, any free writing prospectus.

     (b) Offering Materials Furnished to Underwriters . The Company has delivered to each of the Representatives one complete manually
signed copy of the Registration Statement and of each consent and certificate of experts filed as a part thereof, and conformed copies of the
Registration Statement (without exhibits) and preliminary prospectuses, Time of Sale Prospectus, and the Prospectus, as amended or
supplemented, in such quantities and at such places as the Representatives have reasonably requested for each of the Underwriters.

       (c) Distribution of Offering Material By the Company . The Company has not distributed and will not distribute, prior to the later of
(i) the expiration or termination of the option granted to the several Underwriters in Section 2 and (ii) the completion of the Underwriters’
distribution of the Offered Shares, any offering material in connection with the offering and sale of the Offered Shares other than a preliminary
prospectus, Time of Sale Prospectus, the Prospectus or the Registration Statement or any other document not constituting a prospectus pursuant
to Section 2(a)(10)(a) of the Securities Act or Rule 134 under the Securities Act.

                                                                        3
       (d) Independent Accountants . Grant Thornton LLP (i) was listed as an independent registered public accounting firm with the Public
Company Accounting Oversight Board as of the date hereof and, to the knowledge of the Company, continues to hold this status and (ii) to the
knowledge of the Company, is, with respect to the Company, in compliance with subsections (g) through (l) of Section 10A of the Exchange
Act. Freemon Shapard & Story, to the knowledge of the Company, is, with respect to the Company, in compliance with subsections (g) through
(l) of Section 10A of the Exchange Act. Clinton R. Kindell, CPA P.C., to the knowledge of the Company, is, with respect to the Company, in
compliance with subsections (g) through (l) of Section 10A of the Exchange Act.

      (e) Financial Statements . The financial statements filed with the Commission as a part of the Registration Statement and included in the
Prospectus and Time of Sale Prospectus present fairly in all material respects the financial condition of (i) the Company and its consolidated
subsidiaries at the dates indicated, and the consolidated statements of operations and members’/stockholders’ equity and consolidated
statements of cash flows of the Company for the periods specified, (ii) Strata Drilling, L.L.C., an Oklahoma limited liability company (― Strata
‖), and its affiliate at the dates indicated, and the combined statements of operations and members’ equity and combined statements of cash
flows of Strata for the periods specified, (iii) Thomas Drilling Company, an Oklahoma corporation (― Thomas ‖), at the dates indicated, and
the statements of operations and shareholders’ equity and statements of cash flows of Thomas for the periods specified, and (iv) Eagle Drilling,
L.L.C., an Oklahoma limited liability company (― Eagle ‖), and its combined affiliates at the dates indicated, and the combined statements of
operations and members’ equity and combined statements of cash flows of Eagle for the periods specified, such financial statements have been
prepared in conformity with generally accepted accounting principles in the United States of America (― GAAP ‖) applied on a consistent basis
throughout the periods involved except to the extent disclosed in the notes thereto. The selected historical financial data and the summary
financial data included in the Prospectus present fairly, in all material respects, the information shown therein and have been compiled on a
basis consistent with that of the audited financial statements included in the Registration Statement. The pro forma financial statements
included in the Registration Statement and Prospectus comply as to form in all material respects with the applicable accounting requirements of
Regulation S-X of the Commission (― Regulation S-X ‖) and the assumptions used in the preparation of such pro forma financial statements
and data are reasonable, the pro forma adjustments used therein are appropriate to give effect to the transactions or circumstances described
therein and the pro forma adjustments have been properly applied to the historical amounts in the compilation of those statements. The other
financial and statistical data set forth in the Registration Statement and included in either the Prospectus or the Time of Sale Prospectus are
accurately presented and prepared on a basis consistent with the financial statements and books and records of the Company. There are no
financial statements (historical or pro forma) that are required to be included in the Registration Statement and either the Prospectus or the
Time of Sale Prospectus that are not included as required. Neither the Company nor any of its subsidiaries has engaged in or effected any
transaction or arrangement that would constitute an ―off-balance sheet arrangement‖ (as defined in Item 303 of Regulation S-K of the
Commission (― Regulation S-K ‖)). All non-GAAP financial measures (as defined in Regulation G of the Commission) and ratios derived
using non-GAAP financial measures have been presented in compliance with Item 10 of Regulation S-K.

     (f) No Material Adverse Change in Business . Except as disclosed in the Time of Sale Prospectus, subsequent to the respective dates as of
which information is given in the Time of Sale Prospectus, there has been no (i) material adverse change in the condition, financial or

                                                                       4
otherwise, results of operations or prospects of the Company and its subsidiaries taken as a whole (the ― Enterprise ‖), whether or not arising
in the ordinary course of business (a ― Material Adverse Change ‖), (ii) transaction which is material to the Enterprise, (iii) any obligation,
direct or contingent (including any off-balance sheet obligations), incurred by the Company or its subsidiaries, which is material to the
Enterprise, (iv) change in the capital stock of the Company or its subsidiaries, (v) material change in the outstanding indebtedness of the
Company or its subsidiaries or (vi) dividend or distribution of any kind declared, paid or made on the capital stock of the Company.

      (g) Good Standing of the Company . The Company has been duly organized and is validly existing as a corporation in good standing
under the laws of the State of Delaware and has the requisite corporate power and authority to own, lease and operate its properties and to
conduct its business as described in the Registration Statement and Time of Sale Prospectus and to enter into and perform its obligations under
this Agreement. The Company is duly qualified as a foreign corporation to transact business and is in good standing in each other jurisdiction
in which such qualification is required, whether by reason of the ownership or leasing of property or the conduct of business, except where the
failure to so qualify or to be in good standing would not result in a Material Adverse Change.

      (h) Good Standing of Subsidiaries . Each subsidiary (as such term is defined in Rule 1-02 of Regulation S-X) of the Company is
identified in Schedule 2 to this Agreement. Each subsidiary has been duly organized and is validly existing as a business entity in good
standing under the laws of the jurisdiction of its organization, has all requisite power and authority to own, lease and operate its properties and
to conduct its business as described in the Time of Sale Prospectus, and is duly qualified as a foreign business entity (corporate or otherwise) to
transact business and is in good standing in each jurisdiction in which such qualification is required, whether by reason of the ownership or
leasing of property or the conduct of business, except where the failure so to qualify or to be in good standing would not result in a Material
Adverse Change. All of the issued and outstanding equity interests of each of its subsidiaries has been duly authorized and validly issued, and
are fully paid and non-assessable; except as otherwise disclosed in the Time of Sale Prospectus, all such shares are wholly owned by the
Company, directly or through its subsidiaries, free and clear of any security interest, mortgage, pledge, lien, encumbrance, claim or equity, and
none of the outstanding equity interests of any subsidiary was issued in violation of the preemptive or similar rights of any security holder of
such subsidiary.

      (i) Capitalization . The authorized capital stock of the Company, and the issued and outstanding capital stock of the Company as of the
date hereof, is as set forth in the Time of Sale Prospectus under the caption ―Capitalization‖ under the ―Pro Forma‖ column (other than for
subsequent issuances, if any, pursuant to employee benefit plans described in the Time of Sale Prospectus or upon exercise of outstanding
options described in the Time of Sale Prospectus). The shares of issued and outstanding capital stock of the Company have been duly
authorized and validly issued and are fully paid and non-assessable and none of the outstanding shares of capital stock of the Company was
issued in violation of the preemptive or similar rights of any security holder of the Company. The description of the Company’s stock option,
stock bonus and other stock plans or arrangements, and the options or other rights granted thereunder, as described in the Registration
Statement or in the Time of Sale Prospectus accurately and fairly present in all material respects the information required to be shown with
respect to such plans, arrangements, options and rights.

                                                                         5
      (j) Other Securities . Except as disclosed in the Time of Sale Prospectus, there are no outstanding (i) securities or obligations of the
Company or any of its subsidiaries convertible into or exchangeable for any equity interests of the Company or any of its subsidiaries,
(ii) warrants, rights or options to subscribe for or purchase from the Company or any of its subsidiaries any equity interests or any such
convertible or exchangeable securities or obligations, or (iii) obligations of the Company or any of its subsidiaries to issue any equity interests,
any such convertible or exchangeable securities or obligations, or any such warrants, rights or options.

     (k) Stock Exchange Listing . The Shares are registered pursuant to Section 12(g) of the Exchange Act and are listed on the Nasdaq
National Market and the Company has taken no action designed to, or likely to have the effect of, terminating the registration of the Shares
under the Exchange Act or delisting the Shares from the Nasdaq National Market, nor has the Company received any notification that the
Commission or the Nasdaq National Market is contemplating terminating such registration of listing.

      (l) Authorization of Agreement and Binding Effect . This Agreement has been duly authorized, executed and delivered by the Company
and constitutes a valid and binding obligation of the Company enforceable in accordance with its terms except as enforcement may be limited
by bankruptcy, insolvency or other laws or court decisions relating to or affecting creditor’s rights generally, and except to the extent that
enforcement of the indemnification and contribution obligations provided for herein may be limited by federal or state securities laws or the
public policies underlying such laws.

      (m) Authorization and Description of Offered Shares . The Offered Shares of the Company have been duly authorized for issuance and
sale to the Underwriters pursuant to this Agreement. When the Company issues and delivers its Offered Shares pursuant to this Agreement
against payment of the consideration set forth herein, such Offered Shares will be validly issued, fully paid and non-assessable; the capital
stock of the Company conforms in all material respects to the description thereof contained in the Time of Sale Prospectus, and such
descriptions conform in all material respects to the rights set forth in the instruments defining the same; the issuance by the Company of its
Offered Shares is not subject to preemptive or other similar rights of any security holder of the Company; and the Company has authorized and
available a sufficient number of shares of its common stock for issuance of its Offered Shares pursuant to this Agreement and for issuance upon
the exercise, conversion or exchange of all outstanding options and other securities of the Company that are convertible into or exchangeable
for common stock of the Company.

      (n) Absence of Defaults and Conflicts . Neither the Company nor any of its subsidiaries is (i) in violation of its charter, by-laws or similar
organizational documents, or (ii) in default in the performance or observance of any obligation, agreement, covenant or condition contained in
any contract, indenture, mortgage, deed of trust, loan or credit agreement, note, lease or other agreement or instrument to which it is a party or
by which it may be bound, or to which any of the property or assets of the Company or any of its subsidiaries is subject (collectively, ―
Agreements and Instruments ‖) except, in the case of clause (ii), for any defaults which, singularly or in the aggregate, would not result in a
Material Adverse Change; and the execution, delivery and performance of this Agreement, the consummation of the transactions contemplated
by this Agreement and in the Time of Sale Prospectus including the issuance and sale of the Offered Shares and the use of the proceeds from
the sale of the Offered Shares as described therein, and the compliance by the Company with its obligations under this Agreement (except as
contemplated by the Time of Sale Prospectus) do not and

                                                                          6
will not, whether with or without the giving of notice or passage of time or both, conflict with or constitute a breach of, or default or
Repayment Event (as defined below) under, or result in the creation or imposition of any lien, charge or encumbrance upon any of the
properties or assets of the Company or any of its subsidiaries pursuant to the Agreements and Instruments except for such conflicts, breaches,
defaults, liens, charges or encumbrances which, singularly or in the aggregate, would not result in a Material Adverse Change, nor will such
action result in any violation of the provisions of the charter, by-laws, or similar organizational documents, of the Company or any of its
subsidiaries or any applicable law, statute, rule, regulation, judgment, order, writ or decree of any government, government instrumentality or
court, domestic or foreign, having jurisdiction over the Company or any of its subsidiaries or any of their respective assets, properties or
operations. As used herein, a ― Repayment Event ‖ means any event or condition which gives the holder of any note, debenture or other
evidence of indebtedness (or any person acting on such holder’s behalf) the right to require the repurchase, redemption or repayment of all or a
portion of such indebtedness by the Company or any of its subsidiaries.

      (o) Absence of Labor Dispute . No labor dispute with the employees of the Company or any of its subsidiaries exists or to the knowledge
of the Company is imminent, and the Company is not aware of any existing or imminent labor disturbance by the employees of any of its or
any of its subsidiaries principal operators, contractors, suppliers or customers, which, in either case, would result in a Material Adverse Change.
The Company is not aware that any key employee or significant group of employees of the Company or any of its subsidiaries plans to
terminate employment with such entity.

       (p) Absence of Proceedings . There is no action, suit, proceeding, inquiry or investigation before or brought by any court or governmental
agency or body, domestic or foreign, now pending, or, to the knowledge of the Company, threatened, against or affecting the Company or any
of its subsidiaries, which is required to be disclosed in the Registration Statement (other than as disclosed in the Time of Sale Prospectus), or
which might result in a Material Adverse Change, or which might materially and adversely affect the properties or assets of the Enterprise or
the consummation of the transactions contemplated in this Agreement or the performance by the Company of its obligations hereunder; the
aggregate of any and all pending legal or governmental proceedings to which the Company and its subsidiaries are a party or of which any of
their respective property or assets is the subject which are not described in the Time of Sale Prospectus, including ordinary routine litigation
incidental to the business, could not result in a Material Adverse Change.

     (q) Accuracy of Exhibits . There are no contracts or documents which are required to be described in the Registration Statement or the
Prospectus pursuant to Form S-1 or to be filed as exhibits to the Registration Statement pursuant to Item 601 of Regulation S-K which have not
been so described and filed as required.

      (r) Possession of Intellectual Property . The Company and each of its subsidiaries own or possess, or can acquire on reasonable terms,
adequate patents, patent rights, licenses, inventions, copyrights, know-how (including trade secrets and other unpatented and/or unpatentable
proprietary or confidential information, systems or procedures), trademarks, service marks, trade names or other intellectual property
(collectively, ― Intellectual Property ‖) necessary to carry on the business now operated by them, except where the failure to own or possess,
or have the ability to acquire on reasonable terms such Intellectual Property would not, singularly or in the aggregate, cause a Material Adverse
Change. Neither the Company nor any of its subsidiaries has received any notice or is otherwise aware of any

                                                                        7
infringement of or conflict with asserted rights of others with respect to any Intellectual Property or of any facts or circumstances which would
render any Intellectual Property invalid or inadequate to protect the interest of the Company or any of its subsidiaries therein, and which
infringement or conflict (if the subject of any unfavorable decision, ruling or finding) or invalidity or inadequacy, singly or in the aggregate,
would result in a Material Adverse Change.

      (s) Absence of Further Requirements . No filing with, or authorization, approval, consent, license, order, registration, qualification or
decree of, any court or governmental authority or agency is necessary or required for the performance by the Company of its obligations
hereunder, or in connection with the offering, issuance or sale of the Offered Shares under this Agreement or the consummation of the
transactions contemplated by this Agreement except such as have been already obtained or as may be required under the Securities Act or the
regulations promulgated thereunder or state securities laws or by the NASD.

      (t) No Price Stabilization or Manipulation; Compliance with Regulation M . The Company has not taken, directly or indirectly, any
action designed to or that would be reasonably expected to cause or result in stabilization or manipulation of the price of the Shares or any
other ― reference security ‖ (as defined in Rule 100 of Regulation M under the Exchange Act ( ―Regulation M‖ )) whether to facilitate the
sale or resale of the Offered Shares or otherwise, and has taken no action which would directly or indirectly violate Regulation M. The
Company acknowledges that the Underwriters may engage in passive market making transactions in the Offered Shares on the Nasdaq National
Market in accordance with Regulation M.

      (u) Possession of Licenses and Permits . The Company and each of its subsidiaries possess such permits, licenses, certificates, approvals,
consents and other authorizations (collectively, ― Governmental Licenses ‖) issued by appropriate federal, state, local or foreign regulatory
bodies necessary for the ownership of their respective assets and to conduct the business now operated by them, except where the failure to
have obtained the same would not cause a Material Adverse Change; the Company and its subsidiaries are in compliance with the terms and
conditions of all such Governmental Licenses, except where the failure to so comply would not singly or in the aggregate cause a Material
Adverse Change; all of the Governmental Licenses are valid and in full force and effect, except where the invalidity or the failure to be in full
force and effect would not singly or in the aggregate cause a Material Adverse Change; and neither the Company nor any of its subsidiaries has
received any notice of proceedings relating to the revocation or modification of any such Governmental Licenses which, singly or in the
aggregate, if the subject of an unfavorable decision, ruling or finding would result in a Material Adverse Change.

       (v) Title to Property . The Company and each of its subsidiaries have good and marketable title to all real property reflected in the
financial statements hereinabove described as owned by them and good title to all other properties reflected in the financial statements
hereinabove described as owned by them, in each case, free and clear of all mortgages, pledges, liens, security interests, claims, restrictions or
encumbrances of any kind except such as (i) are described in the Time of Sale Prospectus or (ii) do not, singly or in the aggregate, materially
affect the value of such property and do not materially interfere with the use made or to be made of such property by the Company or any of its
subsidiaries, as applicable; and all of the leases and subleases material to the business of the Enterprise, and under which the Company or any
of its subsidiaries holds properties described in the Time of Sale Prospectus,

                                                                        8
are in full force and effect, and neither the Company nor any of its subsidiaries has any notice of any material claim of any sort that has been
asserted by anyone adverse to the rights of the Company or any of its subsidiaries under any of the leases or subleases mentioned above, or
affecting or questioning the rights of the Company or any of its subsidiaries to the continued possession of the leased or subleased premises
under any such lease or sublease.

      (w) Insurance . The Company and each of its subsidiaries is insured by insurers of recognized financial responsibility against such losses
and risks and in such amounts as are adequate for the conduct of their respective businesses and as are customary for the businesses in which
they are engaged; all such policies of insurance insuring the Company or any of its subsidiaries are in full force and effect and neither the
Company nor any of its Subsidiaries has any reason to believe that any of them will not be able to renew its existing insurance coverage as and
when such coverage expires or to obtain similar coverage from similar insurers as may be necessary to continue its business.

      (x) Taxes . The Company and each of its subsidiaries has filed on a timely basis all foreign, federal, state and local tax returns that are
required to be filed or have requested extensions thereof (except in any case in which the failure so to file would not cause a Material Adverse
Change) and has paid all taxes required to be paid by it and any other assessment, fine or penalty levied against it to the extent due and payable,
except for any such assessment, fine or penalty that is currently being contested in good faith or would not cause a Material Adverse Change.

      (y) Investment Company Act . Neither the Company nor any of its subsidiaries is required, and upon the issuance and sale of the Offered
Shares as herein contemplated and the application of the net proceeds therefrom as described in the Time of Sale Prospectus will not be
required, to register as an ―investment company‖ within the meaning of such term under the Investment Company Act of 1940, as amended,
and the rules and regulations of the Commission promulgated thereunder.

      (z) Environmental Laws . There has been no storage, disposal, generation, manufacture, refinement, transportation, handling or treatment
of hazardous substances or hazardous wastes by the Company or any of its subsidiaries (or, to the knowledge the Company or any of its
predecessors in interest), at, upon or from any of the property now or previously owned, leased or operated by the Company or any of its
subsidiaries in violation of any applicable law, ordinance, rule, regulation, order, judgment, decree or permit that would require the Company
or any of its subsidiaries to undertake any remedial action under any applicable law, ordinance, rule, regulation, order, judgment, decree or
permit, except for any violation or remedial action that would not, individually or in the aggregate with all such violations and remedial actions,
cause a Material Adverse Change. Except for abandonment and similar costs incurred or to be incurred in the ordinary course of business of the
Company and any of its subsidiaries, there has been no material spill, discharge, leak, emission, injection, escape, dumping or release of any
kind onto any property now or previously owned, leased or operated by the Company or any of its subsidiaries or into the environment
surrounding such property of any hazardous substances or hazardous wastes due to or caused by the Company or any of its subsidiaries (or, to
the knowledge of the Company, any of its predecessors in interest), except for any such spill, discharge, leak, emission, injection, escape,
dumping or release that would not, singularly or in the aggregate with all such spills, discharges, leaks, emissions, injections, escapes,
dumpings and releases, result in a Material Adverse Change; and the terms ―hazardous substances,‖ and ―hazardous wastes‖ shall be construed
broadly to include such terms and similar terms, all of which shall have the meanings specified in any

                                                                         9
applicable local, state and federal laws or regulations with respect to environmental protection. Except as set forth in the Time of Sale
Prospectus, neither the Company nor any of its subsidiaries has been named as a ―potentially responsible party‖ under the Comprehensive
Environmental Response, Compensation, and Liability Act of 1980, as amended.

      (aa) Registration Rights . There are no persons with registration rights or other similar rights to have any securities of the Company
registered pursuant to the Registration Statement or sold in the offering contemplated by this Agreement, other than the Selling Stockholder
with respect to the Offered Shares included in the Registration Statement, except for such rights as have been duly waived.

      (bb) Internal Accounting . Subject to such exceptions, if any, as could not reasonably be expected to cause a Material Adverse Change,
the Company maintains a system of internal accounting controls sufficient to provide reasonable assurances that (i) transactions are executed in
accordance with management’s general or specific authorizations, (ii) transactions are recorded as necessary to permit preparation of financial
statements in conformity with GAAP and to maintain accountability for assets, (iii) access to assets is permitted only in accordance with
management’s general or specific authorization, and (iv) the recorded accountability for assets is compared with existing assets at reasonable
intervals and appropriate action is taken with respect to any differences.

      (cc) Disclosure Controls and Procedures . The Company has no reason to believe that, on or prior to the date first required by the
Exchange Act, (i) the Company will not have established the requisite disclosure controls and procedures (as such term is defined in Rule
13a-15 and 15d-15 under the Exchange Act); (ii) such disclosure controls and procedures shall not have been designed to ensure that material
information relating to the Company, including its consolidated subsidiaries, is made known to the Company’s Chief Executive Officer or its
Chief Financial Officer by others within those entities, and (iii) such disclosure controls and procedures shall not be effective to perform the
functions for which they were established.

      (dd) Certain Relationships and Related Transactions . No relationship, direct or indirect, exists between or among the Company on the
one hand, and the directors, officers, stockholders, customers or suppliers of the Company on the other hand, which is required to be described
in the Prospectus and which is not so described. The Time of Sale Prospectus contains in all material respects the same description of the
matters set forth in the preceding sentence contained in the Prospectus.

     (ee) Brokers . Neither the Company nor any of its subsidiaries is a party to any contract, agreement or understanding with any person that
would give rise to a valid claim against the Company or the Underwriters for a brokerage commission, finder’s fee or like payment in
connection with the offering and sale of the Offered Shares.

     (ff) Sarbanes-Oxley Act of 2002 . The Company is in compliance, in all material respects, with all applicable provisions of the
Sarbanes-Oxley Act of 2002 and all rules and regulations promulgated thereunder or implementing the provisions thereof.

      (gg) Certain Payments . None of the Company, any of its subsidiaries or, to the best knowledge of the Company, any director, officer,
agent, employee or other person associated with or acting on behalf of the Company or any of its subsidiaries, (i) has used any corporate

                                                                       10
funds for any unlawful contribution, gift, entertainment or other unlawful expense relating to political activity, made any direct or indirect
unlawful payment to any foreign or domestic government official or employee from corporate funds, (ii) violated or is in violation of any
provisions of the Foreign Corrupt Practices Act of 1977, or (iii) made any bribe, rebate, payoff, influence payment, kickback or other unlawful
payment.

      (hh) ERISA . The minimum funding standard under Section 302 of the Employee Retirement Income Security Act of 1974, as amended,
and the regulations and published interpretations thereunder (― ERISA ‖), has been satisfied by each ―pension plan‖ (as defined in Section 3(2)
of ERISA) which has been established or maintained by the Company and/or one or more of its subsidiaries, and the trust forming part of each
such plan which is intended to be qualified under Section 401 of the Internal Revenue Code of 1986, as amended, is so qualified; each of the
Company and its subsidiaries has fulfilled its obligations, if any, under Section 515 of ERISA; neither the Company nor any of its subsidiaries
maintains or is required to contribute to a ―welfare plan‖ (as defined in Section 3(1) of ERISA) which provides retiree or other
post-employment welfare benefits or insurance coverage (other than ―continuation coverage‖ (as defined in Section 602 of ERISA)); each
pension plan and welfare plan established or maintained by the Company and/or one or more of its subsidiaries is in compliance with the
currently applicable provisions of ERISA, except where the failure to comply would not cause a Material Adverse Change; and neither the
Company nor any of its subsidiaries has incurred or could reasonably be expected to incur any withdrawal liability under Section 4201 of
ERISA, any liability under Section 4062, 4063, or 4064 of ERISA, or any other liability under Title IV of ERISA.

       (ii) Corporate Records . The minute books of the Company and each of its subsidiaries have been made available to the Underwriters and
counsel for the Underwriters, and such books (i) reflect all meetings and actions of the board of directors (including each board committee) and
stockholders (or analogous governing bodies and interest holders, as applicable) of the Company and each of its subsidiaries since the time of
its respective organization through the date of the latest meeting and action, and (ii) accurately in all material respects reflect all transactions
referred to in such minutes.

      (jj) Margin Securities . Neither the Company nor any of its subsidiaries owns any ―margin securities‖ as that term is defined in
Regulation U of the Board of Governors of the Federal Reserve System (the ― Federal Reserve Board ‖), and none of the proceeds of the sale
of the Offered Shares will be used, directly or indirectly, for the purpose of purchasing or carrying any margin security, for the purpose of
reducing or retiring any indebtedness which was originally incurred to purchase or carry any margin security or for any other purpose which
might cause any of the Offered Shares to be considered a ―purpose credit‖ within the meanings of Regulation T, U or X of the Federal Reserve
Board.

    (kk) Prospectus Statements . The statements set forth in the Time of Sale Prospectus under the captions ―Risk Factors,‖ ―Prospectus
Summary‖ and ―Business,‖ insofar as they purport to describe the provisions of the laws and documents referred to therein, are accurate and
complete in all material respects.

      (ll) Transfer Taxes . There are no transfer taxes or other similar fees or charges under federal law or laws of any state or any political
subdivision thereof, required to be paid in connection with the execution and delivery of this Agreement or the issuance by the Company or the
sale by the Company of the Offered Shares.

                                                                        11
           Any certificate signed by any officer of the Company or any of its subsidiaries that is delivered to the Representatives or to counsel
for the Underwriters pursuant to this Agreement shall be deemed a representation and warranty by the Company to each Underwriter as to the
matters covered thereby

          B. Representations and Warranties of the Selling Stockholder The Selling Stockholder represents, warrants and covenants to each
Underwriter as follows:

      (a) Authorization of Agreement and Binding Effect . This Agreement has been duly authorized, executed and delivered by or on behalf of
the Selling Stockholder and constitutes a valid and binding obligation of the Selling Stockholder enforceable in accordance with its terms
except as enforcement may be limited by bankruptcy, insolvency or other laws or court decisions relating to or affecting creditor’s rights
generally, and except to the extent that enforcement of the indemnification and contribution obligations provided for herein may be limited by
federal or state securities laws or the public policies underlying such laws.

      (b) Ownership of Offered Shares . The Selling Stockholder is the record and beneficial owner of the Shares to be sold by it hereunder free
and clear of all liens, encumbrances, equities and claims and has duly endorsed such Shares in blank, and, assuming that each Underwriter
acquires its interest in the Offered Shares it has purchased from the Selling Stockholder without notice of any adverse claim (within the
meaning of Section 8-105 of the Delaware Uniform Commercial Code (― UCC ‖)), each Underwriter that has purchased such Offered Shares
delivered on the First Closing Date or the Option Closing Date, if any (as defined in Section 2), to The Depository Trust Company or other
securities intermediary by making payment therefor as provided herein, and that has had such Offered Shares credited to the securities account
or accounts of such Underwriters maintained with The Depository Trust Company or such other securities intermediary will have acquired a
security entitlement (within the meaning of Section 8-102(a)(17) of the UCC) to such Offered Shares purchased by such Underwriter, and no
action based on an adverse claim (within the meaning of Section 8-105 of the UCC) may be asserted against such Underwriter with respect to
such Offered Shares.

      (c) Delivery of the Offered Shares to be Sold . Delivery of the Offered Shares which are sold by such Selling Stockholder pursuant to this
Agreement will pass good and valid title to such Offered Shares, free and clear of any security interest, mortgage, pledge, lien, encumbrance or
other adverse claim.

      (d) No Price Stabilization or Manipulation; Compliance with Regulation M . The Selling Stockholder has not taken, directly or indirectly,
any action designed to or that would be reasonably expected to cause or result in stabilization or manipulation of the price of the Shares or any
other reference security, whether to facilitate the sale or resale of the Offered Shares or otherwise, and has taken no action which would directly
or indirectly violate any provision of Regulation M.

      (e) Absence of Further Requirements . No filing with, or authorization, approval, consent, license, order, registration, qualification or
decree of, any court or governmental authority or agency is necessary or required for the performance by the Selling Stockholder of its
obligations hereunder, or in connection with the offering or sale of the Offered Shares under this Agreement or the consummation of the
transactions contemplated by this Agreement except such as have been already obtained or as may be required under the

                                                                        12
Securities Act or the regulations promulgated thereunder, state securities laws or by the NASD.

      (f) Absence of Defaults and Conflicts . Neither the sale of the Shares being sold by the Selling Stockholder nor the consummation of any
other of the transactions herein contemplated by the Selling Stockholder or the fulfillment of the terms hereof by the Selling Stockholder will
conflict with, result in a breach or violation of, or constitute a default under any law or the charter, by-laws or similar organizational documents
of the Selling Stockholder or the terms of any indenture or other agreement or instrument to which the Selling Stockholder is a party or bound,
or any judgment, order or decree applicable to the Selling Stockholder of any court, regulatory body, administrative agency, governmental
body or arbitrator having jurisdiction over the Selling Stockholder.

      (g) Selling Stockholder Information . In respect of any statements in or omissions from the Registration Statement or the Time of Sale
Prospectus or any supplements thereto made in reliance upon and in conformity with information furnished in writing to the Company by the
Selling Stockholder specifically for use in connection with the preparation thereof, such information does not contain any untrue statement of a
material fact or omit to state any material fact required to be stated therein or necessary in order to make such statements not misleading. The
parties acknowledge that the only information furnished by or on behalf of the Selling Stockholder in writing expressly for use in connection
with the preparation of the Registration Statement or the Time of Sale Prospectus or any supplements thereto is the information as to its name,
address, the information set forth under the caption ―Prospectus Summary—Our Equity Sponsor‖ and the amount of shares of the Company
held by the Selling Stockholder prior to the offering and to be offered for the Selling Stockholder’s account.

      (h) No Registration, Pre-emptive, Co-Sale or Other Similar Rights . The Selling Stockholder (i) does not have any registration or other
similar rights to have any equity or debt securities registered for sale by the Company under the Registration Statement or included in the
offering contemplated by this Agreement, except for such rights as are described in the Time of Sale Prospectus under ―Securities Eligible for
Future Sale,‖ (ii) does not have any preemptive right, co-sale right or right of first refusal or other similar right to purchase any of the Offered
Shares that are to be sold by the Company to the Underwriters pursuant to this Agreement, except for such rights as the Selling Stockholder has
waived prior to the date hereof and as have been described in the Registration Statement and Time of Sale Prospectus, and (iii) does not own
any warrants, options or similar rights to acquire, and does not have any right or arrangement to acquire, any capital stock, right, warrants,
options or other securities from the Company, other than those described in the Registration Statement and the Time of Sale Prospectus.

       (i) No Transfer Taxes or Other Fees . There are no transfer taxes or other similar fees or charges under Federal law or the laws of any
state, or any political subdivision thereof, required to be paid in connection with the execution and delivery of this Agreement or the sale by the
Selling Stockholder of the Offered Shares.

      (j) Distribution of Offering Materials by the Selling Stockholder . The Selling Stockholder has not distributed and will not distribute, prior
to the later of (i) the expiration or termination of the option granted to the several Underwriters under Section 2 and (ii) the completion of the
Underwriters’ distribution of the Offered Shares, any offering material in

                                                                        13
connection with the offering and sale of the Offered Shares other than a preliminary prospectus, the Time of Sale Prospectus or the Registration
Statement.

            The Selling Stockholder acknowledges that the Underwriters and, for purposes of the opinion to be delivered pursuant to Section 6
hereof, counsel to the Selling Stockholder and counsel to the Underwriters, will rely upon the accuracy and truthfulness of the foregoing
representations and hereby consents to such reliance.

     Section 2. Purchase, Sale and Delivery of the Offered Shares.

      (a) The Firm Shares . Upon the terms herein set forth, (i) the Company agrees to issue and sell to the several Underwriters an aggregate of
1,700,000 Firm Shares and (ii) the Selling Stockholder agrees to sell to the several Underwriters an aggregate of 1,300,000 Firm Shares. On the
basis of the representations, warranties and agreements herein contained, and upon the terms but subject to the conditions herein set forth, the
Underwriters agree, severally and not jointly, to purchase from the Company and the Selling Stockholder the respective number of Firm Shares
set forth opposite their names on Schedule A . The purchase price per Firm Share to be paid by the several Underwriters to the Company and
the Selling Stockholder shall be $         per share.

      (b) The First Closing Date . Delivery of certificates for the Firm Shares to be purchased by the Underwriters and payment therefor shall
be made at the offices of Akin Gump Strauss Hauer & Feld LLP, 1700 Pacific Avenue, Suite 4100, Dallas, Texas (or such other place as may
be agreed to by the Company and the Representatives) at 9:00 a.m. New York time, on              , 2006, or such other time and date as shall be
agreed upon by the Representatives and the Company (the time and date of such closing are called the ― First Closing Date ‖). The Company
and the Selling Stockholder hereby acknowledge that circumstances under which the Representatives may provide notice to postpone the First
Closing Date as originally scheduled include, but are in no way limited to, any determination by the Company, the Selling Stockholder or the
Representatives to recirculate to the public copies of an amended or supplemented Prospectus or a delay as contemplated by the provisions of
Section 11.

      (c) The Optional Shares; Option Closing Date . In addition, on the basis of the representations, warranties and agreements herein
contained, and upon the terms but subject to the conditions herein set forth, the Selling Stockholder hereby grants an option to the several
Underwriters to purchase, severally and not jointly, up to an aggregate of 450,000 Optional Shares from the Selling Stockholder at the purchase
price per share to be paid by the Underwriters for the Firm Shares. The option granted hereunder is for use by the Underwriters solely in
covering any over-allotments in connection with the sale and distribution of the Firm Shares. The option granted hereunder may be exercised at
any time and from time to time in whole or in part upon notice by Jefferies to the Selling Stockholder (with a copy to the Company), which
notice may be given at any time within 30 days from the date of this Agreement. Such notice shall set forth (i) the aggregate number of
Optional Shares as to which the Underwriters are exercising the option, (ii) the names and denominations in which the certificates for the
Optional Shares are to be registered and (iii) the time, date and place at which such certificates will be delivered (which time and date may be
simultaneous with, but not earlier than, the First Closing Date; and in such case the term ― First Closing Date ‖ shall refer to the time and date
of delivery of certificates for the Firm Shares and such Optional Shares). Such time and date of delivery, if subsequent to the First Closing
Date, is called an ― Option Closing Date ‖ and shall be determined by the Representatives and shall not be earlier than three nor later than five
full business days after

                                                                       14
delivery of such notice of exercise. If any Optional Shares are to be purchased, (a) each Underwriter agrees, severally and not jointly, to
purchase the number of Optional Shares (subject to such adjustments to eliminate fractional shares as the Representatives may determine) that
bears the same proportion to the total number of Optional Shares to be purchased as the number of Firm Shares set forth on Schedule A
opposite the name of such Underwriter bears to the total number of Firm Shares and (b) the Selling Stockholder agrees to sell the number of
Optional Shares (subject to such adjustments to eliminate fractional shares as the Representatives may determine) to be sold by the Selling
Stockholder as set forth in this Section 2(c). The Representatives may cancel the option at any time prior to its expiration by giving written
notice of such cancellation to the Selling Stockholder (with a copy to the Company).

       (d) Public Offering of the Offered Shares . The Representatives hereby advise the Company and the Selling Stockholder that the
Underwriters intend to offer for sale to the public, initially on the terms set forth in the Prospectus, their respective portions of the Offered
Shares as soon after this Agreement has been executed and the Registration Statement has been declared effective as the Representatives, in
their judgment, have determined is advisable and practicable.

     (e) Payment for the Offered Shares . Payment for the Offered Shares to be sold by the Company shall be made at the First Closing Date
by wire transfer of immediately available funds to the order of the Company. Payment for the Offered Shares to be sold by the Selling
Stockholder shall be made at the First Closing Date (and, if applicable, at each Option Closing Date) by wire transfer of immediately available
funds to the order of the Selling Stockholder.

      It is understood that the Representatives have been authorized, for their accounts and the accounts of the several Underwriters, to accept
delivery of and receipt for, and make payment of the purchase price for, the Firm Shares and any Optional Shares the Underwriters have agreed
to purchase. Jefferies, individually and not as the Representative of the Underwriters, may (but shall not be obligated to) make payment for any
Offered Shares to be purchased by any Underwriter whose funds shall not have been received by the Representatives by the First Closing Date
or the applicable Option Closing Date, as the case may be, for the account of such Underwriter, but any such payment shall not relieve such
Underwriter from any of its obligations under this Agreement.

      The Selling Stockholder hereby agrees that it will pay all stock transfer taxes, stamp duties and other similar taxes, if any, payable upon
the sale or delivery of the Offered Shares to be sold by the Selling Stockholder to the several Underwriters, or otherwise in connection with the
performance of the Selling Stockholder’s obligations hereunder.

      (f) Delivery of the Offered Shares . The Company and the Selling Stockholder shall deliver, or cause to be delivered, to the
Representatives for the accounts of the several Underwriters certificates for the Firm Shares to be sold by them at the First Closing Date,
against the irrevocable release of a wire transfer of immediately available funds for the amount of the purchase price therefor. The Selling
Stockholder shall also deliver, or cause to be delivered, to the Representatives for the accounts of the several Underwriters, certificates for the
Optional Shares the Underwriters have agreed to purchase at the First Closing Date or the applicable Option Closing Date, as the case may be,
against the irrevocable release of a wire transfer of immediately available funds for the amount of the purchase price therefor. The certificates
for the Offered Shares shall be in definitive form and registered in such

                                                                         15
names and denominations as the Representative shall have requested at least two full business days prior to the First Closing Date (or the
applicable Option Closing Date, as the case may be) and shall be made available for inspection on the business day preceding the First Closing
Date (or the applicable Option Closing Date, as the case may be) at a location in New York City as the Representatives may designate. Time
shall be of the essence, and delivery at the time and place specified in this Agreement is a further condition to the obligations of the
Underwriters.

     Section 3. Additional Covenants.

           A. Covenants of the Company. The Company further covenants and agrees with each Underwriter as follows:

     (a) Delivery of Registration Statement, Time of Sale Prospectus and Prospectus . Upon request, the Company shall furnish to you,
without charge, signed copies of the Registration Statement (including exhibits thereto) and for delivery to each other Underwriter a conformed
copy of the Registration Statement (without exhibits thereto) and to furnish to you in New York City, without charge, prior to 10:00 a.m. New
York City time on the business day next succeeding the date of this Agreement and during the period mentioned in Section 3(A)(e) or 3(A)(g)
below, as many copies of the Time of Sale Prospectus, the Prospectus and any supplements and amendments thereto or to the Registration
Statement as you may reasonably request.

      (b) Representatives’ Review of Proposed Amendments and Supplements . Prior to amending or supplementing the Registration Statement
(including any registration statement filed under Rule 462(b) under the Securities Act), the Time of Sale Prospectus or the Prospectus,
including any amendment or supplement through incorporation by reference of any report filed under the Exchange Act, the Company shall
furnish to the Representatives for review a copy of each such proposed amendment or supplement, and the Company shall not file any such
proposed amendment or supplement without the Representatives’ consent, and to file with the Commission within the applicable period
specified in Rule 424(b) under the Securities Act any prospectus required to be filed pursuant to such Rule.

     (c) Free Writing Prospectuses . The Company shall furnish to you a copy of each proposed free writing prospectus to be prepared by or
on behalf of, used by, or referred to by the Company and not to use or refer to any proposed free writing prospectus to which you reasonably
object.

      (d) Filing of Underwriter Free Writing Prospectuses . The Company shall not to take any action that would result in an Underwriter or
the Company being required to file with the Commission pursuant to Rule 433(d) under the Securities Act a free writing prospectus prepared
by or on behalf of the Underwriter that the Underwriter otherwise would not have been required to file thereunder.

      (e) Amendments to Time of Sale Prospectus . If the Time of Sale Prospectus is being used to solicit offers to buy the Offered Shares at a
time when the Prospectus is not yet available to prospective purchasers and any event shall occur or condition exist as a result of which it is
necessary to amend or supplement the Time of Sale Prospectus in order to make the statements therein, in the light of the circumstances, not
misleading, or if any event shall occur or condition exist as a result of which the Time of Sale Prospectus conflicts with the information
contained in the Registration Statement then on file, or if, in the opinion of

                                                                       16
counsel for the Underwriters, it is necessary to amend or supplement the Time of Sale Prospectus to comply with applicable law, forthwith to
prepare, file with the Commission and furnish, at its own expense, to the Underwriters and to any dealer upon request, either amendments or
supplements to the Time of Sale Prospectus so that the statements in the Time of Sale Prospectus as so amended or supplemented will not, in
the light of the circumstances when delivered to a prospective purchaser, be misleading or so that the Time of Sale Prospectus, as amended or
supplemented, will no longer conflict with the Registration Statement, or so that the Time of Sale Prospectus, as amended or supplemented,
will comply with applicable law.

       (f) Securities Act Compliance . After the date of this Agreement, the Company shall promptly advise the Representatives in writing (i) of
the receipt of any comments of, or requests for additional or supplemental information from, the Commission, (ii) of the time and date of any
filing of any post-effective amendment to the Registration Statement or any amendment or supplement to any preliminary prospectus or the
Prospectus, (iii) of the time and date that any post-effective amendment to the Registration Statement becomes effective and (iv) of the issuance
by the Commission of any stop order suspending the effectiveness of the Registration Statement or any post-effective amendment thereto or of
any order preventing or suspending the use of any preliminary prospectus or the Prospectus, or of any proceedings to remove, suspend or
terminate from listing or quotation the Shares from any securities exchange upon which it is listed for trading or included or designated for
quotation, or of the threatening or initiation of any proceedings for any of such purposes. If the Commission shall enter any such stop order at
any time, the Company will use its best efforts to obtain the lifting of such order at the earliest possible moment. Additionally, the Company
agrees that it shall comply with the provisions of Rules 424(b) and 430A, as applicable, under the Securities Act and will use its reasonable
efforts to confirm that any filings made by the Company under such Rule 424(b) were received in a timely manner by the Commission.

      (g) Amendments and Supplements to the Prospectus and Other Securities Act Matters . If the delivery of a prospectus is required at any
time after the date hereof and if at such time any event shall occur or condition exist as a result of which it is necessary to amend or supplement
the Prospectus in order to make the statements therein, in the light of the circumstances when the Prospectus is delivered to a purchaser, not
misleading, or if in the opinion of the Representatives or counsel for the Underwriters it is otherwise necessary to amend or supplement the
Prospectus to comply with law, the Company agrees to promptly prepare (subject to Section 3(A)(a) hereof), file with the Commission and
furnish at its own expense to the Underwriters and to dealers, amendments or supplements to the Prospectus so that the statements in the
Prospectus as so amended or supplemented will not, in the light of the circumstances when the Prospectus is delivered to a purchaser, be
misleading or so that the Prospectus, as amended or supplemented, will comply with law. Neither the Representatives’ consent to, or delivery
of, any such amendment or supplement shall constitute a waiver of any of the Company’s obligations under this Section 3(A)(c).

      (h) Blue Sky Compliance. The Company shall cooperate with the Representatives and counsel for the Underwriters to qualify or register
the Offered Shares for sale under (or obtain exemptions from the application of) the state securities or blue sky laws of those jurisdictions
designated by the Representatives, shall comply with such laws and shall continue such qualifications, registrations and exemptions in effect so
long as required for the distribution of the Offered Shares. The Company shall not be required to qualify as a foreign corporation or to take any
action that would subject it to general service of process in any such jurisdiction where it is not presently qualified or where it would be subject
to taxation as a

                                                                        17
foreign corporation. The Company will advise the Representatives promptly of the suspension of the qualification or registration of (or any
such exemption relating to) the Offered Shares for offering, sale or trading in any jurisdiction or any initiation or threat of any proceeding for
any such purpose, and in the event of the issuance of any order suspending such qualification, registration or exemption, the Company shall use
its best efforts to obtain the withdrawal thereof at the earliest possible moment.

     (i) Use of Proceeds . The Company shall apply the net proceeds from the sale of the Offered Shares sold by it in the manner described
under the caption ―Use of Proceeds‖ in the Prospectus.

      (j) Transfer Agent . The Company shall continue to engage and maintain, at its expense, a registrar and transfer agent for the Shares.

      (k) Earnings Statement . As soon as practicable, the Company will make generally available to its security holders and to the
Representatives an earnings statement (which need not be audited) covering a period of at least twelve months beginning with the first fiscal
quarter of the Company occurring after the date of this Agreement which shall satisfy the provisions of Section 11(a) of the Securities Act and
the rules and regulations of the Commission thereunder.

       (l) Periodic Reporting Obligations . The Company, during the period when the Prospectus is required to be delivered under the Securities
Act, shall file, on a timely basis, with the Commission and, where required, the Nasdaq National Market all reports and documents required to
be filed under the Exchange Act.

       (m) Listing . The Company will use its best efforts to effect and maintain the inclusion and quotation of the Offered Shares on the Nasdaq
National Market and to maintain the inclusion and quotation of the Shares on the Nasdaq National Market unless and until such security is
listed on another exchange or automated quotation system of at least comparable reputation.

      (n) Company to Provide Copy of the Prospectus in Form That May be Downloaded from the Internet . The Company shall cause to be
prepared and delivered, at its expense, within one business day from the effective date of this Agreement, to Jefferies an ― electronic
Prospectus ‖ to be used by the Underwriters in connection with the offering and sale of the Offered Shares. As used herein, the term ―
electronic Prospectus ‖ means a form of Time of Sale Prospectus, and any amendment or supplement thereto, that meets each of the following
conditions: (i) it shall be encoded in an electronic format, satisfactory to Jefferies, that may be transmitted electronically by Jefferies and the
other Underwriters to offerees and purchasers of the Offered Shares; (ii) it shall disclose the same information as the paper Time of Sale
Prospectus, except to the extent that graphic and image material cannot be disseminated electronically, in which case such graphic and image
material shall be replaced in the electronic Prospectus with a fair and accurate narrative description or tabular representation of such material,
as appropriate; and (iii) it shall be in or convertible into a paper format or an electronic format, satisfactory to Jefferies, that will allow investors
to store and have continuously ready access to the Time of Sale Prospectus at any future time, without charge to investors (other than any fee
charged for subscription to the Internet as a whole and for on-line time). The Company hereby confirms that it has included or will include in
the Prospectus filed pursuant to EDGAR or otherwise with the Commission and in the Registration Statement at the time it was declared
effective an undertaking that, upon receipt

                                                                           18
of a request by an investor or his or her representative, the Company shall transmit or cause to be transmitted promptly, without charge, a paper
copy of the Time of Sale Prospectus.

       (o) Agreement Not to Offer or Sell Additional Shares . During the period commencing on the date hereof and ending on the 90th day
following the date of the Prospectus (the ― Lock-up Period ‖), the Company will not, without the prior written consent of Jefferies (which
consent may be withheld at the sole discretion of Jefferies), directly or indirectly, sell, offer, contract or grant any option to sell, pledge, transfer
or establish an open ―put equivalent position‖ within the meaning of Rule 16a-1(h) under the Exchange Act, or otherwise dispose of or transfer,
or announce the offering of, or file any registration statement under the Securities Act in respect of, any Shares, options or warrants to acquire
Shares or securities exchangeable or exercisable for or convertible into Shares (other than as contemplated by this Agreement with respect to
the Offered Shares); provided, however, that (1) the Company may issue Shares or options to purchase its Shares, or Shares upon exercise of
options, pursuant to any stock option, stock bonus or other stock plan or arrangement described in the Prospectus or any amendment to or
replacement of such plan and (2) file one or more registration statements on Form S-8 or amendments thereto relating to the issuance of Shares
or the issuance and exercise of options to purchase Shares granted under the employee benefit plans of the Company existing on the date of the
Prospectus or any amendment to or replacement of such plan. Notwithstanding the foregoing, if (i) during the last 17 days of the Lock-up
Period, the Company issues an earnings release or material news or a material event relating to the Company occurs or (ii) prior to the
expiration of the Lock-up Period, the Company announces that it will release earnings results during the 16-day period beginning on the last
day of the Lock-up Period, then in each case the Lock-up Period will be extended until the expiration of the 18-day period beginning on the
date of the issuance of the earnings release or the occurrence of the material news or material event, as applicable, except that such extension
will not apply if, (i) within three business days prior to the expiration of the Lock-up Period, the Company delivers to Jefferies a certificate,
signed by the Chief Financial Officer or Chief Executive Officer of the Company, certifying on behalf of the Company that the Company’s
shares of common stock are ―actively traded securities‖ (as defined in Regulation M) and (ii) that the Company meets the applicable
requirements of paragraph (a)(1) of Rule 139 under the Securities Act of 1933, as amended, in the manner contemplated by Rule 2711(f)(4) of
NASD. The Company will provide the Representatives with prior notice of any such announcement that gives rise to an extension of the
restricted period

      (p) Investment Limitation . The Company shall not invest, or otherwise use the proceeds received by the Company from its sale of the
Offered Shares in such a manner as would require the Company or any of its subsidiaries to register as an investment company under the
Investment Company Act.

     (q) No Stabilization or Manipulation; Compliance with Regulation M . Prior to the completion of the distribution of the Offered Shares,
the Company will not take, directly or indirectly, any action designed to or that might be reasonably expected to cause or result in stabilization
or manipulation of the price of the Shares or any other reference security, whether to facilitate the sale or resale of the Offered Shares or
otherwise, and the Company will, and shall cause each of its affiliates to, comply with all applicable provisions of Regulation M. Prior to the
completion of the distribution of the Offered Shares, if the limitations of Rule 102 of Regulation M (― Rule 102 ‖) do not apply with respect to
the Offered Shares or any other reference security pursuant to any exception set forth in Section (d) of Rule 102, then promptly upon notice
from the Representatives (or, if later, at the time stated in the notice), the Company will, and shall cause each of its affiliates to, comply with

                                                                           19
Rule 102 as though such exception were not available but the other provisions of Rule 102 (as interpreted by the Commission) did apply.

            B. Covenants of the Selling Stockholder . The Selling Stockholder further covenants and agrees with each Underwriter:

      (a) Agreement Not to Offer or Sell Additional Shares . The Selling Stockholder will not, without the prior written consent of Jefferies
(which consent may be withheld in its sole discretion), directly or indirectly, sell, offer, contract or grant any option to sell (including without
limitation any short sale), pledge, transfer, establish an open ―put equivalent position‖ within the meaning of Rule 16a-1(h) under the Exchange
Act, or otherwise dispose of any Shares, options or warrants to acquire Shares, or securities exchangeable or exercisable for or convertible into
Shares currently or hereafter owned either of record or beneficially (as defined in Rule 13d-3 under the Exchange Act) by the Selling
Stockholder, or publicly announce its intention to do any of the foregoing, for a period commencing on the date hereof and continuing through
the close of trading on the last day of the Lock-up Period. The foregoing sentence shall not apply to (1) the Offered Shares to be sold hereunder
or (2) a transfer by the Selling Stockholder to an affiliate, provided that such affiliate agrees in writing to be bound for the Lock-Up Period.

       (b) No Stabilization or Manipulation; Compliance with Regulation M . Prior to the completion of the distribution of the Offered Shares,
the Selling Stockholder will not take, directly or indirectly, any action designed to or that might be reasonably expected to cause or result in
stabilization or manipulation of the price of the Shares or any other reference security, whether to facilitate the sale or resale of the Offered
Shares or otherwise, and the Selling Stockholder will, and shall cause each of its affiliates to, comply with all applicable provisions of
Regulation M. Prior to the completion of the distribution of the Offered Shares, if the limitations of Rule 102 do not apply with respect to the
Offered Shares or any other reference security pursuant to any exception set forth in Section (d) of Rule 102, then promptly upon notice from
the Representatives (or, if later, at the time stated in the notice), the Selling Stockholder will, and shall cause each of its affiliates to, comply
with Rule 102 as though such exception were not available but the other provisions of Rule 102 (as interpreted by the Commission) did apply.

    (c) Delivery of Forms W-8 and W-9 . The Selling Stockholder will deliver to the Representatives prior to the First Closing Date a properly
completed and executed United States Treasury Department Form W-9.

            C. Jefferies, on behalf of the several Underwriters, may, in its sole discretion, waive in writing the performance by the Company or
the Selling Stockholder of any one or more of the foregoing covenants or extend the time for their performance.

       Section 4. Payment of Expenses . The Company agrees to pay all costs, fees and expenses incurred in connection with the performance
of its obligations hereunder and in connection with the transactions contemplated hereby, including without limitation (i) all expenses incident
to the issuance and delivery of the Offered Shares (including all printing and engraving costs), (ii) all fees and expenses of the registrar and
transfer agent of the Shares, (iii) all necessary issue, transfer and other stamp taxes in connection with the issuance and sale of the Offered
Shares to the Underwriters, (iv) all fees and expenses of the Company’s counsel, independent public or certified public accountants and other
advisors, (v) all costs and expenses incurred in connection with the preparation, printing, filing,

                                                                          20
shipping and distribution of the Registration Statement (including financial statements, exhibits, schedules, consents and certificates of
experts), the Time of Sale Prospectus, the Prospectus, any free writing prospectus prepared by or on behalf of, used by, or referred to by the
Company, and each preliminary prospectus, and all amendments and supplements thereto, and this Agreement, (vi) all filing fees and
reasonable attorneys’ fees and expenses incurred by the Company or the Underwriters in connection with qualifying or registering (or obtaining
exemptions from the qualification or registration of) all or any part of the Offered Shares for offer and sale under the state securities or blue sky
laws, and, if requested by the Representatives, preparing and printing a ― Blue Sky Survey ‖ or memorandum, and any supplements thereto,
advising the Underwriters of such qualifications, registrations, determinations and exemptions, (vii) the filing fees incident to, and the
reasonable fees and expenses of counsel for the Underwriters in connection with, the NASD’s review and approval of the Underwriters’
participation in the offering and distribution of the Offered Shares, (viii) the costs and expenses of the Company relating to investor
presentations on any ―road show‖ undertaken in connection with the marketing of the Offered Shares, including without limitation, expenses
associated with the production of road show slides and graphics, fees and expenses of any consultants engaged in connection with the road
show presentations, travel and lodging expenses of the representatives and officers of the Company and any such consultants, and the cost of
aircraft and other transportation chartered in connection with the road shows, (ix) the fees and expenses associated with listing the Offered
Shares on the Nasdaq National Market and (x) all other fees, costs and expenses referred to in Item 13 of Part II of the Registration Statement.
Except as provided in this Section 4, Section 7, Section 9 and Section 10 hereof, the Underwriters shall pay their own expenses, including the
fees and disbursements of their counsel.

            The Selling Stockholder agrees with each Underwriter to pay (directly or by reimbursement) all fees and expenses incident to the
performance of its obligations under this Agreement which are not otherwise specifically provided for herein, including but not limited to
(i) fees and expenses of counsel and other advisors for such Selling Stockholder and (ii) expenses and taxes incident to the sale and delivery of
the Offered Shares to be sold by the Selling Stockholder to the Underwriters hereunder.

          This Section 4 shall not affect or modify any separate, valid agreement relating to the allocation of payment of expenses between
the Company, on the one hand, and the Selling Stockholder, on the other hand.

      Section 5. Covenant of the Underwriters . Each Underwriter severally covenants with the Company not to take any action that would
result in the Company being required to file with the Commission under Rule 433(d) a free writing prospectus prepared by or on behalf of such
Underwriter that otherwise would not be required to be filed by the Company thereunder, but for the action of the Underwriter

     Section 6. Conditions of the Obligations of the Underwriters . The obligations of the several Underwriters to purchase and pay for the
Offered Shares as provided herein on the First Closing Date and, with respect to the Optional Shares, each Option Closing Date, shall be
subject to the accuracy of the representations and warranties on the part of the Company and the Selling Stockholder set forth in Sections 1(A)
and 1(B) hereof as of the date hereof and as of the First Closing Date as though then made and, with respect to the Optional Shares, as of each
Option Closing Date as though then made, to the timely performance by the Company and the Selling Stockholder of their respective covenants
and other obligations hereunder, and to each of the following additional conditions:

                                                                         21
     (a) Comfort Letters . On the date hereof, the Representatives shall have received from:

           (i) Grant Thornton LLP, independent public certified accountants for the Company, (i) a letter dated the date hereof addressed to the
     Underwriters, in form and substance satisfactory to the Representatives, containing statements and information of the type ordinarily
     included in accountant’s ―comfort letters‖ to underwriters, delivered according to Statement of Auditing Standards No. 72 (or any
     successor bulletin), with respect to the audited and unaudited financial statements and certain financial information contained in the
     Registration Statement, Time of Sale Prospectus, and the Prospectus (and the Representatives shall have received an additional five
     conformed copies of such accountants’ letter for each of the several Underwriters), and (ii) confirming that they are (A) independent
     public or certified public accountants as required by the Securities Act and (B) in compliance with the applicable requirements relating to
     the qualification of accountants under Rule 2-01 of Regulation S-X;

           (ii) Freemon Shapard & Story, independent public certified accountants, (i) a letter dated the date hereof addressed to the
     Underwriters, in form and substance satisfactory to the Representatives, containing statements and information of the type ordinarily
     included in accountant’s ―comfort letters‖ to underwriters, delivered according to Statement of Auditing Standards No. 72 (or any
     successor bulletin), with respect to the audited financial statements and certain financial information of Thomas contained in the
     Registration Statement, Time of Sale Prospectus, and the Prospectus for the years ended December 31, 2003 and December 31, 2004 (and
     the Representatives shall have received an additional five conformed copies of such accountants’ letter for each of the several
     Underwriters), and (ii) confirming that they are (A) independent public or certified public accountants as required by the Securities Act
     and (B) in compliance with the applicable requirements relating to the qualification of accountants under Rule 2-01 of Regulation S-X;
     and

            (iii) Clinton R. Kindell, CPA P.C. (i) a letter dated the date hereof addressed to the Underwriters, in form and substance satisfactory
     to the Representatives, containing statements and information of the type ordinarily included in accountant’s ―comfort letters‖ to
     underwriters, delivered according to Statement of Auditing Standards No. 72 (or any successor bulletin), with respect to the unaudited
     financial statements and certain financial information of Thomas contained in the Registration Statement, Time of Sale Prospectus, and
     the Prospectus for the three months ended September 30, 2005 (and the Representatives shall have received an additional five conformed
     copies of such accountants’ letter for each of the several Underwriters), and (ii) confirming that they are (A) independent public or
     certified public accountants as required by the Securities Act and (B) in compliance with the applicable requirements relating to the
     qualification of accountants under Rule 2-01 of Regulation S-X.

      (b) Compliance with Registration Requirements; No Stop Order; No Objection from NASD . For the period from and after effectiveness
of this Agreement and prior to the First Closing Date and, with respect to the Optional Shares, each Option Closing Date:

           (i) the Company shall have filed the Prospectus with the Commission (including the information required by Rule 430A under the
     Securities Act) in the manner and within the time period required by Rule 424(b) under the Securities Act; or the Company shall have
     filed a post-effective amendment to the Registration Statement

                                                                        22
     containing the information required by such Rule 430A, and such post-effective amendment shall have become effective;

           (ii) no stop order suspending the effectiveness of the Registration Statement, any Rule 462(b) Registration Statement, or any
     post-effective amendment to the Registration Statement, shall be in effect and no proceedings for such purpose shall have been instituted
     or threatened by the Commission; and

           (iii) the NASD shall have raised no objection to the fairness and reasonableness of the underwriting terms and arrangements.

      (c) No Material Adverse Change or Ratings Agency Change . For the period from and after the date of this Agreement and prior to the
First Closing Date and, with respect to the Optional Shares, each Option Closing Date:

         (i) in the judgment of the Representatives there shall not have occurred, except as contemplated by the Prospectus, any Material
     Adverse Change; and

           (ii) there shall not have occurred any downgrading, nor shall any notice have been given of any intended or potential downgrading
     or of any review for a possible change that does not indicate the direction of the possible change, in the rating accorded any securities of
     the Company or any of its subsidiaries by any ―nationally recognized statistical rating organization‖ as such term is defined for purposes
     of Rule 436(g)(2) under the Securities Act.

      (d) Opinions of Counsels for the Company . On each of the First Closing Date and each Option Closing Date the Representatives shall
have received the opinion of:

           (i) Akin Gump Strauss Hauer & Feld LLP, counsel for the Company, dated as of such Closing Date, the form of which is attached
     as Exhibit A (and the Representatives shall have received an additional five conformed copies of such counsel’s legal opinion for each of
     the several Underwriters); and

           (ii) Mark Dubberstein, general counsel of the Company, dated as of such Closing Date, the form of which is attached as Exhibit B
     (and the Representatives shall have received an additional five conformed copies of such counsel’s legal opinion for each of the several
     Underwriters).

      (e) Opinion of Counsel for the Underwriters . On each of the First Closing Date and each Option Closing Date the Representatives shall
have received the opinion of Porter & Hedges, L.L.P., counsel for the Underwriters, in form and substance satisfactory to the Underwriters,
dated as of such Closing Date.

      (f) Officers’ Certificate . On each of the First Closing Date and each Option Closing Date the Representatives shall have received a
written certificate executed by the Chairman of the Board, Chief Executive Officer or President of the Company and the Chief Financial
Officer or Chief Accounting Officer of the Company, dated as of such Closing Date, to the effect set forth in subsections (b)(ii) and (c)(ii) of
this Section 6, and further to the effect that:

         (i) for the period from and after the date of this Agreement and prior to such Closing Date, there has not occurred any Material
     Adverse Change;

                                                                        23
             (ii) the representations and warranties of the Company set forth in Section 1(A) of this Agreement are true and correct with the
        same force and effect as though expressly made on and as of such Closing Date; and

              (iii) the Company has complied with all the agreements and covenants hereunder and satisfied all the conditions on its part to be
        performed or satisfied hereunder at or prior to such Closing Date.

        (g) Bring-down Comfort Letters . On each of the First Closing Date and each Option Closing Date the Representatives shall have received
from:

              (i) Grant Thornton LLP, independent public certified public accountants for the Company, a letter dated such date, in form and
        substance satisfactory to the Representatives, to the effect that they reaffirm the statements made in the letter furnished by them pursuant
        to subsection (a)(i) of this Section 6, except that the specified date referred to therein for the carrying out of procedures shall be no more
        than three business days prior to the First Closing Date or the applicable Option Closing Date, as the case may be (and the
        Representatives shall have received an additional five conformed copies of such accountants’ letter for each of the several Underwriters);

              (ii) Freemon Shapard & Story, independent public certified public accountants, a letter dated such date, in form and substance
        satisfactory to the Representatives, to the effect that they reaffirm the statements made in the letter furnished by them pursuant to
        subsection (a)(ii) of this Section 6, except that the specified date referred to therein for the carrying out of procedures shall be no more
        than three business days prior to the First Closing Date or the applicable Option Closing Date, as the case may be (and the
        Representatives shall have received an additional five conformed copies of such accountants’ letter for each of the several Underwriters);
        and

               (iii) Clinton R. Kindell, CPA P.C., a letter dated such date, in form and substance satisfactory to the Representatives, to the effect
        that they reaffirm the statements made in the letter furnished by them pursuant to subsection (a)(iii) of this Section 6, except that the
        specified date referred to therein for the carrying out of procedures shall be no more than three business days prior to the First Closing
        Date or the applicable Option Closing Date, as the case may be (and the Representatives shall have received an additional five conformed
        copies of such accountants’ letter for each of the several Underwriters).

      (h) Opinion of Counsel for the Selling Stockholder . On each of the First Closing Date and each Option Closing Date the Representatives
shall have received the opinion of Akin Gump Strauss Hauer & Feld LLP, counsel for the Selling Stockholder, dated as of such Closing Date,
the form of which is attached as Exhibit C (and the Representatives shall have received an additional five conformed copies of such counsel’s
legal opinion for each of the several Underwriters).

      (i) Selling Stockholder’s Certificate . On each of the First Closing Date and each Option Closing Date the Representatives shall receive a
written certificate executed by the principal executive officer of the Selling Stockholder, dated as of such Closing Date, to the effect that:

                                                                           24
            (i) the representations and warranties of the Selling Stockholder set forth in Section 1(B) of this Agreement are true and correct with
      the same force and effect as though expressly made by the Selling Stockholder on and as of such Closing Date; and

            (ii) the Selling Stockholder has complied with all the agreements and covenants and satisfied all the conditions on its part to be
      performed or satisfied at or prior to such Closing Date.

      (j) Lock-Up Agreement from Certain Securityholders of the Company . On or prior to the date hereof, the Company shall have furnished
to Jefferies an agreement in the form of Exhibit C hereto from the Selling Stockholder and each of the Company’s directors and executive
officers, and such agreement shall be in full force and effect on each of the First Closing Date and each Option Closing Date.

      (k) Additional Documents . On or before each of the First Closing Date and each Option Closing Date, the Representatives and counsel
for the Underwriters shall have received such information, documents and opinions as they may reasonably require for the purposes of enabling
them to pass upon the issuance and sale of the Offered Shares as contemplated herein, or in order to evidence the accuracy of any of the
representations and warranties, or the satisfaction of any of the conditions or agreements, herein contained.

            If any condition specified in this Section 6 is not satisfied when and as required to be satisfied, this Agreement may be terminated
by the Representatives by notice to the Company and the Selling Stockholder at any time on or prior to the First Closing Date and, with respect
to the Optional Shares, at any time prior to the applicable Option Closing Date, which termination shall be without liability on the part of any
party to any other party, except that Section 4, Section 6, Section 8 and Section 9 shall at all times be effective and shall survive such
termination.

      Section 7. Reimbursement of Underwriters’ Expenses . If this Agreement is terminated by the Representatives pursuant to Section 6
(other than (b)(iii) or (e)), Section 12(i)(a) or Section 18, or if the sale to the Underwriters of the Offered Shares on the First Closing Date is not
consummated because of any refusal, inability or failure on the part of the Company or the Selling Stockholder to perform any agreement
herein or to comply with any provision hereof, the Company agrees to reimburse the Representatives and the other Underwriters (or such
Underwriters as have terminated this Agreement with respect to themselves), severally, upon demand for all out-of-pocket expenses that shall
have been reasonably incurred by the Representatives and the Underwriters in connection with the proposed purchase and the offering and sale
of the Offered Shares, not to exceed $200,000, including but not limited to reasonable fees and disbursements of counsel, printing expenses,
travel expenses, postage, facsimile and telephone charges. If this Agreement is terminated pursuant to Section 11 by reason of the default of
one or more Underwriters, the Company shall not be obligated to reimburse any defaulting Underwriters on account of those expenses.

     Section 8. Effectiveness of this Agreement . This Agreement shall not become effective until the later of (i) the execution of this
Agreement by the parties hereto and (ii) notification by the Commission to the Company and the Representatives of the effectiveness of the
Registration Statement under the Securities Act.

      Section 9. Indemnification.

                                                                          25
       (a) Indemnification of the Underwriters by the Company . The Company agrees to indemnify and hold harmless each Underwriter, its
officers and employees, and each person, if any, who controls any Underwriter within the meaning of the Securities Act and the Exchange Act
against any loss, claim, damage, liability or expense, as incurred, to which such Underwriter or such controlling person may become subject,
under the Securities Act, the Exchange Act or other federal or state statutory law or regulation, or at common law or otherwise (including in
settlement of any litigation), insofar as such loss, claim, damage, liability or expense (or actions in respect thereof as contemplated below)
arises out of or is based (i) upon any untrue statement or alleged untrue statement of a material fact contained in the Registration Statement, or
any amendment thereto, including any information deemed to be a part thereof pursuant to Rule 430A under the Securities Act, or the omission
or alleged omission therefrom of a material fact required to be stated therein or necessary to make the statements therein not misleading; or
(ii) upon any untrue statement or alleged untrue statement of a material fact contained in any preliminary prospectus, the Time of Sale
Prospectus, any free writing prospectus that the Company has filed, or is required to file, pursuant to Rule 433(d) of the Securities Act or the
Prospectus (or any amendment or supplement thereto), or the omission or alleged omission therefrom of a material fact necessary in order to
make the statements therein, in the light of the circumstances under which they were made, not misleading; and to reimburse each Underwriter
and each such controlling person for any and all expenses (including the reasonable fees and disbursements of one counsel chosen by Jefferies)
as such expenses are reasonably incurred by such Underwriter or such controlling person in connection with investigating, defending, settling,
compromising or paying any such loss, claim, damage, liability, expense or action; provided, however, that the foregoing indemnity agreement
shall not apply to any loss, claim, damage, liability or expense to the extent, but only to the extent, arising out of or based upon any untrue
statement or alleged untrue statement or omission or alleged omission made in reliance upon and in conformity with written information
furnished to the Company by the Representatives expressly for use in the Registration Statement, any preliminary prospectus or the Prospectus
(or any amendment or supplement thereto), it being understood and agreed that the only such information furnished by the Representatives to
the Company consists of the information described in subsection (b) below. The indemnity agreement set forth in this Section 9(a) shall be in
addition to any liabilities that the Company may otherwise have.

      (b) Indemnification of the Underwriters by the Company . The Selling Stockholder agrees to indemnify and hold harmless each
Underwriter, its officers and employees, and each person, if any, who controls any Underwriter within the meaning of the Securities Act and
the Exchange Act against any loss, claim, damage, liability or expense, as incurred, to which such Underwriter or such controlling person may
become subject, under the Securities Act, the Exchange Act or other federal or state statutory law or regulation, or at common law or otherwise
(including in settlement of any litigation), insofar as such loss, claim, damage, liability or expense (or actions in respect thereof as
contemplated below) arises out of or is based (i) upon any untrue statement or alleged untrue statement of a material fact contained in the
Registration Statement, or any amendment thereto, including any information deemed to be a part thereof pursuant to Rule 430A under the
Securities Act, or the omission or alleged omission therefrom of a material fact required to be stated therein or necessary to make the
statements therein not misleading; or (ii) upon any untrue statement or alleged untrue statement of a material fact contained in any preliminary
prospectus, the Time of Sale Prospectus, any free writing prospectus that the Company has filed, or is required to file, pursuant to Rule 433(d)
of the Securities Act or the Prospectus (or any amendment or supplement thereto), or the omission or alleged omission therefrom of a material
fact necessary in order to make the statements therein, in the light of the circumstances under

                                                                        26
which they were made, not misleading; and to reimburse each Underwriter and each such controlling person for any and all expenses (including
the reasonable fees and disbursements of one counsel chosen by Jefferies) as such expenses are reasonably incurred by such Underwriter or
such controlling person in connection with investigating, defending, settling, compromising or paying any such loss, claim, damage, liability,
expense or action; provided, however, that the foregoing indemnity agreement shall only apply in each case to the extent but only to the extent
such losses, claims, damages, liabilities, expenses or actions are caused by any such untrue statement or omission or alleged untrue statement or
omission based upon information relating to the Selling Stockholder furnished to the Company in writing by the Selling Stockholder expressly
for use therein. The indemnity agreement set forth in this Section 9(b) shall be in addition to any liabilities that the Selling Stockholder may
otherwise have.

      (c) Indemnification of the Company, its Directors and Officers and the Selling Stockholder . Each Underwriter agrees, severally and not
jointly, to indemnify and hold harmless the Company, each of its directors, each of its officers who signed the Registration Statement, the
Selling Stockholder and each person, if any, who controls the Company or the Selling Stockholder within the meaning of the Securities Act or
the Exchange Act, against any loss, claim, damage, liability or expense, as incurred, to which the Company, or any such director, officer, the
Selling Stockholder or controlling person may become subject, under the Securities Act, the Exchange Act, or other federal or state statutory
law or regulation, or at common law or otherwise (including in settlement of any litigation, if such settlement is effected with the written
consent of such Underwriter), insofar as such loss, claim, damage, liability or expense (or actions in respect thereof as contemplated below)
arises out of or is based upon any untrue or alleged untrue statement of a material fact contained in the Registration Statement, any preliminary
prospectus the Time of Sale Prospectus, any free writing prospectus that the Company has filed, or is required to file, pursuant to Rule 433(d)
of the Securities Act or the Prospectus (or any amendment or supplement thereto), or arises out of or is based upon the omission or alleged
omission to state therein a material fact required to be stated therein or necessary to make the statements therein not misleading, in each case to
the extent, but only to the extent, that such untrue statement or alleged untrue statement or omission or alleged omission was made in the
Registration Statement, any preliminary prospectus, the Time of Sale Prospectus, any free writing prospectus that the Company has filed, or is
required to file, pursuant to Rule 433(d) of the Securities Act, the Prospectus (or any amendment or supplement thereto), in reliance upon and
in conformity with written information furnished to the Company and the Selling Stockholder by the Representatives expressly for use therein;
and to reimburse the Company, or any such director, officer, the Selling Stockholder or controlling person for any legal and other expense
reasonably incurred by the Company, or any such director, officer, the Selling Stockholder or controlling person in connection with
investigating, defending, settling, compromising or paying any such loss, claim, damage, liability, expense or action. Each of the Company and
the Selling Stockholder hereby acknowledges that the only information that the Underwriters have furnished to the Company and the Selling
Stockholder expressly for use in the Registration Statement, any preliminary prospectus, the Time of Sale Prospectus, any free writing
prospectus that the Company has filed, or is required to file, pursuant to Rule 433(d) of the Securities Act or the Prospectus (or any amendment
or supplement thereto) are the statements set forth in the table in the first paragraph and as set forth in the third, twelfth and sixteenth
paragraphs under the caption ―Underwriting‖ in the Prospectus. The indemnity agreement set forth in this Section 9(c) shall be in addition to
any liabilities that each Underwriter may otherwise have.

                                                                        27
      (d) Notifications and Other Indemnification Procedures . Promptly after receipt by an indemnified party under this Section 9 of notice of
the commencement of any action, such indemnified party will, if a claim in respect thereof is to be made against an indemnifying party under
this Section 9, notify the indemnifying party in writing of the commencement thereof, but the omission so to notify the indemnifying party will
not relieve it from any liability which it may have to any indemnified party for contribution or otherwise than under the indemnity agreement
contained in this Section 9 or to the extent it is not prejudiced as a proximate result of such failure. In case any such action is brought against
any indemnified party and such indemnified party seeks or intends to seek indemnity from an indemnifying party, the indemnifying party will
be entitled to participate in, and, to the extent that it shall elect, jointly with all other indemnifying parties similarly notified, by written notice
delivered to the indemnified party promptly after receiving the aforesaid notice from such indemnified party, to assume the defense thereof
with counsel reasonably satisfactory to such indemnified party; provided, however, if the defendants in any such action include both the
indemnified party and the indemnifying party and the indemnified party shall have reasonably concluded that a conflict may arise between the
positions of the indemnifying party and the indemnified party in conducting the defense of any such action or that there may be legal defenses
available to it and/or other indemnified parties which are different from or additional to those available to the indemnifying party, the
indemnified party or parties shall have the right to select separate counsel to assume such legal defenses and to otherwise participate in the
defense of such action on behalf of such indemnified party or parties. Upon receipt of notice from the indemnifying party to such indemnified
party of such indemnifying party’s election so to assume the defense of such action and approval by the indemnified party of counsel, the
indemnifying party will not be liable to such indemnified party under this Section 9 for any legal or other expenses subsequently incurred by
such indemnified party in connection with the defense thereof unless (i) the indemnified party shall have employed separate counsel in
accordance with the proviso to the preceding sentence (it being understood, however, that the indemnifying party shall not be liable for the
expenses of more than one separate counsel (together with local counsel), approved by the indemnifying party, representing the indemnified
parties who are parties to such action) or (ii) the indemnifying party shall not have employed counsel satisfactory to the indemnified party to
represent the indemnified party within a reasonable time after notice of commencement of the action, in each of which cases the fees and
expenses of counsel shall be at the expense of the indemnifying party.

      (e) Settlements . The indemnifying party under this Section 9 shall not be liable for any settlement of any proceeding effected without its
written consent, but if settled with such consent or if there be a final judgment for the plaintiff, the indemnifying party agrees to indemnify the
indemnified party against any loss, claim, damage, liability or expense by reason of such settlement or judgment. No indemnifying party shall,
without the prior written consent of the indemnified party, effect any settlement, compromise or consent to the entry of judgment in any
pending or threatened action, suit or proceeding in respect of which any indemnified party is or could have been a party and indemnity was or
could have been sought hereunder by such indemnified party, unless such settlement, compromise or consent includes an unconditional release
of such indemnified party from all liability on claims that are the subject matter of such action, suit or proceeding.

      (f) Indemnification of the QIU . Without limitation and in addition to its obligation under the other subsections of this Section 9, the
Company agrees to indemnify and hold harmless the QIU, its officers and employees and each person, if any, who controls the QIU within the
meaning of the Securities Act or the Exchange Act from and against any loss, claim, damage, liabilities or expense, as incurred, arising out of
or based upon the QIU’s acting as a

                                                                           28
―qualified independent underwriter‖ (within the meaning of Rule 2720 to the NASD’s Conduct Rules) in connection with the offering
contemplated by this Agreement, and agrees to reimburse each such indemnified person for any legal or other expense reasonably incurred by
them in connection with investigating, defending, settling, compromising or paying any such loss, claim, damage, liability, expense or action;
provided, however, that the Company shall not be liable in any such case to the extent that any such loss, claim, damage, liability or expense
results from the gross negligence or willful misconduct of the QIU.

       Section 10. Contribution . If the indemnification provided for in Section 9 is for any reason held to be unavailable to or otherwise
insufficient to hold harmless an indemnified party in respect of any losses, claims, damages, liabilities or expenses referred to therein, then each
indemnifying party shall contribute to the aggregate amount paid or payable by such indemnified party, as incurred, as a result of any losses,
claims, damages, liabilities or expenses referred to therein (i) in such proportion as is appropriate to reflect the relative benefits received by the
Company and the Selling Stockholder, on the one hand, and the Underwriters, on the other hand, from the offering of the Offered Shares
pursuant to this Agreement or (ii) if the allocation provided by clause (i) above is not permitted by applicable law, in such proportion as is
appropriate to reflect not only the relative benefits referred to in clause (i) above but also the relative fault of the Company and the Selling
Stockholder, on the one hand, and the Underwriters, on the other hand, in connection with the statements or omissions which resulted in such
losses, claims, damages, liabilities or expenses, as well as any other relevant equitable considerations. The relative benefits received by the
Company and the Selling Stockholder, on the one hand, and the Underwriters, on the other hand, in connection with the offering of the Offered
Shares pursuant to this Agreement shall be deemed to be in the same respective proportions as the total net proceeds from the offering of the
Offered Shares pursuant to this Agreement (before deducting expenses) received by the Company and the Selling Stockholder, and the total
underwriting discount received by the Underwriters, in each case as set forth on the front cover page of the Prospectus bear to the aggregate
initial public offering price of the Offered Shares as set forth on such cover. The relative fault of the Company and the Selling Stockholder, on
the one hand, and the Underwriters, on the other hand, shall be determined by reference to, among other things, whether any such untrue or
alleged untrue statement of a material fact or omission or alleged omission to state a material fact relates to information supplied by the
Company or the Selling Stockholder, on the one hand, or the Underwriters, on the other hand, and the parties’ relative intent, knowledge,
access to information and opportunity to correct or prevent such statement or omission.

            The amount paid or payable by a party as a result of the losses, claims, damages, liabilities and expenses referred to above shall be
deemed to include, subject to the limitations set forth in Section 9(d), any legal or other fees or expenses reasonably incurred by such party in
connection with investigating or defending any action or claim. The provisions set forth in Section 9(d) with respect to notice of
commencement of any action shall apply if a claim for contribution is to be made under this Section 10; provided, however, that no additional
notice shall be required with respect to any action for which notice has been given under Section 9(d) for purposes of indemnification.

            The Company, the Selling Stockholder and the Underwriters agree that it would not be just and equitable if contribution pursuant to
this Section 10 were determined by pro rata allocation (even if the Underwriters were treated as one entity for such purpose) or by any other
method of allocation which does not take account of the equitable considerations referred to in this Section 10.

                                                                         29
            Notwithstanding the provisions of this Section 10, no Underwriter shall be required to contribute any amount in excess of the
underwriting commissions received by such Underwriter in connection with the Offered Shares underwritten by it and distributed to the public.
No person guilty of fraudulent misrepresentation (within the meaning of Section 11(f) of the Securities Act) shall be entitled to contribution
from any person who was not guilty of such fraudulent misrepresentation. The Underwriters’ obligations to contribute pursuant to this
Section 10 are several, and not joint, in proportion to their respective underwriting commitments as set forth opposite their names in
Schedule A . For purposes of this Section 10, each officer and employee of an Underwriter and each person, if any, who controls an
Underwriter within the meaning of the Securities Act and the Exchange Act shall have the same rights to contribution as such Underwriter, and
each director of the Company, each officer of the Company who signed the Registration Statement, and each person, if any, who controls the
Company with the meaning of the Securities Act and the Exchange Act shall have the same rights to contribution as the Company.

      Section 11. Default of One or More of the Several Underwriters . If, on the First Closing Date or the applicable Option Closing Date,
as the case may be, any one or more of the several Underwriters shall fail or refuse to purchase Offered Shares that it or they have agreed to
purchase hereunder on such date, and the aggregate number of Offered Shares which such defaulting Underwriter or Underwriters agreed but
failed or refused to purchase does not exceed 10% of the aggregate number of the Offered Shares to be purchased on such date, the
Representatives may make arrangements satisfactory to the Company and the Selling Stockholder for the purchase of such Offered Shares by
other persons, including any of the Underwriters, but if no such arrangements are made by such Closing Date, the other Underwriters shall be
obligated, severally, in the proportions that the number of Firm Shares set forth opposite their respective names on Schedule A bears to the
aggregate number of Firm Shares set forth opposite the names of all such non-defaulting Underwriters, or in such other proportions as may be
specified by the Representatives with the consent of the non-defaulting Underwriters, to purchase the Offered Shares which such defaulting
Underwriter or Underwriters agreed but failed or refused to purchase on such date. If, on the First Closing Date or the applicable Option
Closing Date, as the case may be, any one or more of the Underwriters shall fail or refuse to purchase Offered Shares and the aggregate number
of Offered Shares with respect to which such default occurs exceeds 10% of the aggregate number of Offered Shares to be purchased on such
date, and arrangements satisfactory to the Representatives, the Company and the Selling Stockholder for the purchase of such Offered Shares
are not made within 48 hours after such default, this Agreement shall terminate without liability of any party to any other party except that the
provisions of Section 4, Section 7, Section 9 and Section 10 shall at all times be effective and shall survive such termination. In any such case
either the Representatives, the Company or the Selling Stockholder shall have the right to postpone the First Closing Date or the applicable
Option Closing Date, as the case may be, but in no event for longer than seven days in order that the required changes, if any, to the
Registration Statement and the Prospectus or any other documents or arrangements may be effected.

           As used in this Agreement, the term ― Underwriter ‖ shall be deemed to include any person substituted for a defaulting
Underwriter under this Section 11. Any action taken under this Section 11 shall not relieve any defaulting Underwriter from liability in respect
of any default of such Underwriter under this Agreement.

      Section 12. Termination of this Agreement . The Representatives, by notice given to the Company and the Selling Stockholder, shall
have the right to terminate this Agreement at

                                                                       30
any time prior to the First Closing Date or to terminate the obligations of the Underwriters to purchase the Option Shares at any time prior to
the Option Closing Date, as the case may be, if at any time (i) (a) trading or quotation in any of the Company’s securities shall have been
suspended or limited by the Commission or by the Nasdaq National Market, or (b) trading in securities generally on either the Nasdaq Stock
Market or the New York Stock Exchange shall have been suspended or limited, or minimum or maximum prices shall have been generally
established on any of such stock exchanges by the Commission or the NASD; (ii) a general banking moratorium shall have been declared by
any of federal or New York authorities; (iii) there shall have occurred any outbreak or escalation of national or international hostilities or any
crisis or calamity, or any change in the United States or international financial markets, or any substantial change or development involving a
prospective substantial change in United States’ or international political, financial or economic conditions, as in the judgment of the
Representatives is material and adverse and makes it impracticable to market the Offered Shares in the manner and on the terms described in
the Time of Sale Prospectus or to enforce contracts for the sale of securities; or (iv) the Company shall have sustained a loss by strike, fire,
flood, earthquake, accident or other calamity of such character as in the judgment of the Representatives may interfere materially with the
conduct of the business and operations of the Company regardless of whether or not such loss shall have been insured. Any termination
pursuant to this Section 12 shall be without liability on the part of (a) the Company or the Selling Stockholder to any Underwriter, except that
the Company and the Selling Stockholder shall be obligated to reimburse the expenses of the Representatives and the Underwriters to the
extent provided in Sections 4 and 7 hereof, (b) any Underwriter to the Company or the Selling Stockholder, or (c) of any party hereto to any
other party except that the provisions of Section 9 and Section 10 shall at all times be effective and shall survive such termination.

      Section 13. Representations and Indemnities to Survive Delivery . The respective indemnities, agreements, representations, warranties
and other statements of the Company, of its officers, of the Selling Stockholder and of the several Underwriters set forth in or made pursuant to
this Agreement will remain in full force and effect, regardless of any investigation made by or on behalf of any Underwriter or the Company or
any of its or their partners, officers or directors or any controlling person, or the Selling Stockholder, as the case may be, and will survive
delivery of and payment for the Offered Shares sold hereunder and any termination of this Agreement.

      Section 14. Notices . All communications hereunder shall be in writing and shall be mailed, hand delivered or telecopied and confirmed
to the parties hereto as follows:

If to the Representatives:
            Jefferies & Company, Inc.
            520 Madison Avenue
            New York, New York 10022
            Facsimile: (212) 284-2280
            Attention: General Counsel

           Johnson Rice & Company L.L.C.
           639 Loyola Avenue, Suite 2775
           New Orleans, Louisiana
           Facsimile: (504) 566-0742
           Attention: Joshua C. Cummings

                                                                        31
with a copy to:
           Porter & Hedges, L.L.P.
           1000 Main Street, 36 Floor
                                 th


           Houston, Texas 77002
           Facsimile: (713) 226-6274
           Attention: Robert G. Reedy

If to the Company:
            Bronco Drilling Company, Inc.
            14313 North May Avenue, Suite 100
            Oklahoma City, Oklahoma 73134
            Facsimile: (405) 848-8816
            Attention: D. Frank Harrison

If to the Selling Stockholder:
             Bronco Drilling Holdings, LLC
             411 West Putnam Avenue
             Greenwich, Connecticut 06830
             Facsimile: (202) 862-7374
             Attention: Paul Jacobi

in either case, with a copy to:
            Akin Gump Strauss Hauer & Feld LLP
            1700 Pacific Avenue, Suite 4100
            Dallas, Texas 75201
            Facsimile: (214) 969-4343
            Attention: Seth R. Molay, P.C.

Any party hereto may change the address for receipt of communications by giving written notice to the others.

      Section 15. Successors . This Agreement will inure to the benefit of and be binding upon the parties hereto, including any substitute
Underwriters pursuant to Section 11 hereof, and to the benefit of the employees, officers and directors and controlling persons referred to in
Section 9 and Section 10, and in each case their respective successors, and no other person will have any right or obligation hereunder. The
term ― successors ‖ shall not include any purchaser of the Offered Shares as such from any of the Underwriters merely by reason of such
purchase.

      Section 16. Partial Unenforceability . The invalidity or unenforceability of any Section, paragraph or provision of this Agreement shall
not affect the validity or enforceability of any other Section, paragraph or provision hereof. If any Section, paragraph or provision of this
Agreement is for any reason determined to be invalid or unenforceable, there shall be deemed to be made such minor changes (and only such
minor changes) as are necessary to make it valid and enforceable.

      Section 17. Governing Law Provisions . This Agreement shall be governed by and construed in accordance with the internal laws of the
State of New York applicable to agreements made and to be performed in such state. Any legal suit, action or proceeding arising out of or
based upon this Agreement or the transactions contemplated hereby (― Related Proceedings ‖) may be instituted in the federal courts of the
United States of

                                                                       32
America located in the Borough of Manhattan in the City of New York or the courts of the State of New York in each case located in the
Borough of Manhattan in the City of New York (collectively, the ― Specified Courts ‖), and each party irrevocably submits to the jurisdiction
of such courts in any such suit, action or proceeding. Service of any process, summons, notice or document by mail to such party’s address set
forth above shall be effective service of process for any suit, action or other proceeding brought in any such court. The parties irrevocably and
unconditionally waive any objection to the laying of venue of any suit, action or other proceeding in the Specified Courts and irrevocably and
unconditionally waive and agree not to plead or claim in any such court that any such suit, action or other proceeding brought in any such court
has been brought in an inconvenient forum.

            With respect to any Related Proceeding, each party irrevocably waives, to the fullest extent permitted by applicable law, all
immunity (whether on the basis of sovereignty or otherwise) from jurisdiction, service of process, attachment (both before and after judgment)
and execution to which it might otherwise be entitled in the Specified Courts or any other court of competent jurisdiction, and will not raise or
claim or cause to be pleaded any such immunity at or in respect of any such Related Proceeding, including, without limitation, any immunity
pursuant to the United States Foreign Sovereign Immunities Act of 1976, as amended.

      Section 18. Failure of the Selling Stockholder to Sell and Deliver Offered Shares . If the Underwriters have fulfilled all of their
obligations under this Agreement and the Selling Stockholder shall fail to sell and deliver to the Underwriters the Offered Shares to be sold and
delivered by the Selling Stockholder at the First Closing Date pursuant to this Agreement, then the Underwriters may at their option, by written
notice from the Representatives to the Company and the Selling Stockholder, either (i) terminate this Agreement without any liability on the
part of any Underwriter or, except as provided in Sections 4, 7, 9 and 10 hereof, the Company, or (ii) purchase the shares which the Company
has agreed to sell and deliver in accordance with the terms hereof. If the Selling Stockholder shall fail to sell and deliver to the Underwriters the
Offered Shares to be sold and delivered by the Selling Stockholder pursuant to this Agreement at the First Closing Date or the applicable
Option Closing Date, then the Underwriters shall have the right, by written notice from the Representatives to the Company and the Selling
Stockholder, to postpone the First Closing Date or the applicable Option Closing Date, as the case may be, but in no event for longer than seven
days in order that the required changes, if any, to the Registration Statement and the Prospectus or any other documents or arrangements may
be effected.

      Section 19. General Provisions. This Agreement constitutes the entire agreement of the parties to this Agreement and supersedes all
prior written or oral and all contemporaneous oral agreements, understandings and negotiations with respect to the subject matter hereof. This
Agreement may be executed in two or more counterparts, each one of which shall be an original, with the same effect as if the signatures
thereto and hereto were upon the same instrument. This Agreement may not be amended or modified unless in writing by all of the parties
hereto, and no condition herein (express or implied) may be waived unless waived in writing by each party whom the condition is meant to
benefit. The Section headings herein are for the convenience of the parties only and shall not affect the construction or interpretation of this
Agreement.

           Each of the parties hereto acknowledges that it is a sophisticated business person who was adequately represented by counsel during
negotiations regarding the provisions hereof, including, without limitation, the indemnification provisions of Section 9

                                                                         33
and the contribution provisions of Section 10, and is fully informed regarding said provisions. Each of the parties hereto further acknowledges
that the provisions of Sections 9 and 10 hereto fairly allocate the risks in light of the ability of the parties to investigate the Company, its affairs
and its business in order to assure that adequate disclosure has been made in the Registration Statement, any preliminary prospectus and the
Prospectus (and any amendments and supplements thereto), as required by the Securities Act and the Exchange Act.

                                                                           34
          If the foregoing is in accordance with your understanding of our agreement, kindly sign and return to the Company and the Selling
Stockholder the enclosed copies hereof, whereupon this instrument, along with all counterparts hereof, shall become a binding agreement in
accordance with its terms.

                                                                                    Very truly yours,
                                                                                    BRONCO DRILLING COMPANY, INC.



                                                                                              D. Frank Harrison
                                                                                              Chief Executive Officer

                                                                                    BRONCO DRILLING HOLDINGS, L.L.C.

                                                                                    By:       Wexford Capital, L.L.C.,
                                                                                              its Manager

                                                                                    By:
                                                                                    Name:
                                                                                    Title:

             The foregoing Underwriting Agreement is hereby confirmed and accepted by the Representatives in New York, New York as of the
date first above written.

JEFFERIES & COMPANY, INC.
JOHNSON RICE & COMPANY L.L.C.
Acting as Representatives of the several Underwriters
named in the attached Schedule 1.

By       JEFFERIES & COMPANY, INC.

By:
Name:
Title:

                                                                     35
                                  SCHEDULE 1
                                                Number of
                                                  Firm
                                               Shares to be
Underwriters                                    Purchased

Jefferies & Company, Inc.
Johnson Rice & Company L.L.C.
Raymond James & Associates, Inc
Fortis Securities LLC
     Total
                                          SCHEDULE 2

                                   Bronco Drilling Company, Inc.
                                           Subsidiaries
                                                                                FOREIGN
                                                                              JURISDICTIO
                    SUBSIDIARY                        DOMESTIC JURISDICTION        N


Elk Hill Drilling, Inc.                                       Texas           Oklahoma
Wrangler Equipment L.L.C.                                   Oklahoma             None
Mid-States Oilfield Machine, LLC                            Oklahoma             None
Saddleback Drilling, L.L.C.                                 Oklahoma             None
Saddleback Properties, L.L.C.                               Oklahoma             None
Hays Trucking, Inc.                                         Oklahoma             None
                               SCHEDULE 3

Schedule of Free Writing Prospectuses included in the Time of Sale Prospectus
                                                                                                                                    Exhibit 10.20

NOTE. This form contract is a suggested guide only and use of this form or any variation thereof shall be at the sole discretion and risk of the
user parties. Users of the form contract or any portion or variation thereof are encouraged to seek the advice of counsel to ensure that their
contract reflects the complete agreement of the parties and applicable law. The International Association of Drilling Contractors disclaims any
liability whatsoever for loss or damages which may result from use of the form contract or portions or variations thereof Computer generated
form, reproduced under license from IADC.

                                                                                                                              Revised April, 2003

                                             INTERNATIONAL ASSOCIATION OF DRILLING CONTRACTORS
                                                           DRILLING BID PROPOSAL
                                                                    AND
                                                      DAYWORK DRILLING CONTRACT - U.S.



TO: Windsor Energy Resources, Inc.

Please submit bid on this drilling contract form for performing the work outlined below, upon the terms and for the consideration set forth, with
the understanding that if the bid is accepted by _____________________________________________________ this instrument will constitute
a Contract between us. Your bid should be mailed or delivered not later than ___________ P.M. on ________________, 20 ___ to the
following address _______________________________________________________

                             THIS CONTRACT CONTAINS PROVISIONS RELATING TO INDEMNITY,
                                   RELEASE OF LIABILITY, AND ALLOCATION OF RISK –
                                        SEE PARAGRAPHS 4.9, 6.3(c), 10, 12, AND 14

This Contract is made and entered into on the date hereinafter set forth by and between the parties herein designated as ―Operator‖ and
―Contractor‖.

           OPERATOR:              Windsor Energy Resources, Inc.
           Address:               14313 North May Avenue
                                  Oklahoma City, Oklahoma 73134
           CONTRACTOR:            Bronco Drilling Company, Inc.
           Address:               6601 S.W. 29   th


                                  Oklahoma City, OK 73179

IN CONSIDERATION of the mutual promises, conditions and agreements herein contained and the specifications and special provisions set
forth in Exhibit ―A‖ and Exhibit ―B‖ attached hereto and made a part hereof (the ―Contract‖), Operator engages Contractor as an independent
contractor to drill the hereinafter designated well or wells in search of oil or gas on a Daywork Basis or purposes hereof, the term ―Daywork‖
or ―Daywork Basis‖ means Contractor shall furnish equipment labor, and perform services as herein provided, for a specified sum per day
under the direction, supervision and control of Operator (inclusive of any employee, agent, consultant or subcontractor engaged by Operator to
direct drilling operations). When operating on a Daywork Basis, Contractor shall be fully paid at the applicable rates of payment and assumes
only the obligations and liabilities stated herein. Except for such obligations and liabilities specifically assumed by Contractor, Operator shall
be solely responsible and assumes liability for all consequences of operations by both parties while on a Daywork Basis, including results and
all other risks or liabilities incurred in or incident to such operations.

1.    LOCATION OF WELL:
     Well Name and Number: Windsor Energy Resources, Inc. / Term Contract – Bronco Drilling Rig #15

     Parish/County: _________________________ State: Texas            Field Name: _________________________

     Well location and land description: TO BE DETERMINED BY OPERATOR

     1.1 Additional Well Locations or Areas: To be specified by operator

Locations described above are for well and Contract identification only and Contractor assumes no liability whatsoever for a proper survey or
location stake on Operator’s lease. 2. COMMENCEMENT DATE:

     Contractor agrees to use reasonable efforts to commence operations for the drilling of the well by the           day               ,
2006, Upon completion of Rig #15 in the Oklahoma City yard and contractor has scheduled rig to move to the first (1 ) well designated by
                                                                                                                        st


Windsor Energy.
3.    DEPTH:
     3.1 Well Depth: The well(s) shall be drilled to a depth of approximately 12,000" feet, or to the formation, whichever is deeper, but the
Contractor shall not be required hereunder to drill said well(s) below a maximum depth of 15,000" feet, unless Contractor and Operator
mutually agree to drill to a greater depth.

4.    DAYWORK RATES:
       Contractor shall be paid at the following rates for the work performed hereunder. Actual mobilization costs plus 85% of the dayrate from
rig release of prior well to spud of following or a mobilization day rate of well SEE SPEC PROV. ITEM 2

       4.1 Mobilization: Operator shall pay Contractor a mobilization fee of $                  $ N/A per day. This sum shall be due and payable in
full at the time the rig is rigged up or positioned at the well site ready to spud. Mobilization shall include: All Move in, and Rig Up of drilling
rig and equipment. All rig down and move out of drilling rig and equipment. (Including, but not limited to, all permits, trucking, forklift and
cranes).

      4.2 Demobilization: Operator shall pay Contractor a demobilization fee of $ Same as 4.1 or a demobilization day rate during tear down of
$ N/A per day, provided however that no demobilization fee shall be payable if the Contract is terminated due to the total loss or destruction of
the rig. Demobilization shall Include: Operator pays all trucking, dozer, forklift charges or other associated mobilization costs. Operator pays
85% of dayrate from the time trucks first arrive at location until spud of subsequent well.

     4.3 Moving Rate: During the time the rig is in transit to or from a drill site, or between drill sites, commencing on SEE SPEC PROV–
Item 1, Operator shall pay Contractor a sum of $ N/A per twenty-four (24) hour day.

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     4.4 Operating Day Rate: For work performed per twenty-four (24) hour day with Five (5) man crew the operating day rate shall be:

              Depth Intervals
      From                           To               Without Drill Pipe                                          With Drill Pipe
       0"                       T.D.       $          SEE SPEC PROV -              per day         $     SEE SPEC PROV - ITEM 2            per day
                                                           ITEM 2
                                           $                                       per day         $                                       per day
                                           $                                       per day         $                                       per day

Using Operator’s drill     SEE SPEC                    per day.
pipe $                     PROV. – ITEM 2
The rate will begin when the drilling unit is rigged up at the drilling location, or positioned over the location during marine work, and ready to
commence operations; and will cease when the rig is released after pits are clean and at such time moving rates shall commence.

If under the above column ―With Drill Pipe‖ no rates are specified, the rate per twenty-four hour day when drill pipe is in use shall be the
applicable rate specified in the column ―Without Drill Pipe‖ plus compensation for any drill pipe actually used at the rates specified below,
computed on the basis of the maximum drill pipe in use at any time during each twenty-four hour day.

                                                   DRILL PIPE RATE PER 24-HOUR DAY

                                                                                       Directional or
        Straight Hole                      Size                 Grade           Uncontrollable Deviated Hole                 Size            Grade
$            N/A           per ft.                                          $                           per ft.
$                          per ft.                                          $                           per ft.
$                          per ft.                                          $                           per ft.

Directional or uncontrolled deviated hole will be deemed to exist when deviation exceeds Ten (10) degrees or when the change of angle
exceeds three (3) degrees per one hundred feet.

      Drill pipe shall be considered in use not only when in actual use but also while it is being picked up or laid down. When drill pipe is
standing in the derrick, it shall not be considered in use, provided, however, that if Contractor furnishes special strings or drill pipe, drill
collars, and handling tools as provided for in Exhibit ―A‖, the same shall be considered in use at all times when on location or until released by
Operator. In no event shall fractions or an hour be considered in computing the amount of time drill pipe is in use but such time shall be
computed to the nearest hour, with thirty minutes or more being considered a full hour and less than thirty minutes not be counted.

      4.5 Repair Time: In the event it is necessary to shut down Contractor’s rig for repairs, excluding routine rig servicing, Contractor shall be
allowed compensation at the applicable rate for such shut down time up to a maximum or 8 hours for any one rig repair job, but not to exceed
24 hours of such compensation for any calendar month. Thereafter, Contractor shall be compensated at a rate of $ - 0- per twenty-four (24)
hour day. Routine rig servicing shall include, but not be limited to, cutting and slipping drilling line, changing pump or swivel expondables,
testing BOP equipment, lubricating rig, and ___________________________.

       4.6 Standby Time Rate: $ See SPEC, PROV, ITEM 3 per twenty-four (24) day. Standby time shall be defined to include time when the
rig is shut down although in roadiness to begin or resume operations but Contractor is waiting on orders of Operator or on materials, services or
other items to be furnished by Operator.

      4.7 Drilling Fluid Rates: When drilling fluids of a type and characteristic that increases Contractor’s cost of performance hereunder,
including, but not limited to, oil-based mud or potassium chloride, are in use, Operator shall pay Contractor in addition to the operating rate
specified above:
      (a)    $20.00 per man per day for Contractor’s rig-site personnel. (including but not limited to Tool pusher)
      (b)    $480.00 per day additional operating rate; and
      (c)    Cost of all labor, materials and services plus 48 hours operating rate to clean rig and related equipment.
      4.8 Force Majeure Rate: $ 85% of Dayrate per twenty-four (24) hour day for any continuous period that normal operations are suspended
or cannot be carried on due to conditions or Force Majeure as defined in Paragraph 17 hereof. It is, however, understood that subject to
Subparagraph 6.3 below, Operator can release the rig in accordance with Operator’s right to direct stoppage of the work, effective when
conditions will permit the rig to be moved from the location.

      4.9 Reimbursable Costs: Operator shall reimburse Contractor for the costs of material, equipment, work or services which are to be
furnished by Operator as provided for herein but which for convenience are actually furnished by Contractor at Operator’s request, plus ten
(10) percent for such cost of handling. When, at Operator’s request and with Contractor’s agreement, the Contractor furnishes or subcontracts
for certain items or services which Operator is required herein to provide, for purposes of the Indemnity and release provisions of this
Contract, said items or services shall be deemed to be Operator furnished items or services. Any subcontractors so hired shall be deemed to be
Operator’s contractor, and Operator shall not be relieved of any of its liabilities in connection therewith.

      4.10 Revision In Rates: The rates and/or payments herein set forth due to Contractor from Operator shall be revised to reflect the change
in costs if the costs of any of the items hereinafter listed shall vary by more than 0 percent from the costs thereof on the date of this Contract or
by the same percent after the date of any revision pursuant to this Subparagraph:
      (a)   Labor costs, including all benefits, of Contractor’s personnel;
      (b)   Contractor’s costs of Insurance premiums;
      (c)   Contractor’s cost of fuel, including all taxes and fees; the cost per gallon/MCF being $NA;
      (d)   Contractor’s cost of catering, when applicable;
      (e)   If Operator requires Contractor to Increase or decrease the number of Contractor’s personnel;
      (f)   Contractor’s cost of spare parts and supplies with the understanding that such spare parts and supplies constitute 20 percent of the
            operating rate and that the parties shall use the U.S. Bureau of Labor Statistics Oil Field and Gas Field Drilling Machinery
            Producer Price Index (Series ID WPU119102) to determine to what extent a price variance has occurred in said spare parts and
            supplies;
      (g)   If there is any change in legislation or regulations in the area in which Contractor is working or other unforeseen, unusual event
            that alters Contractor’s financial burden.

5.    TIME OF PAYMENT
      Payment is due by Operator to Contractor as follows:

     5.1 Payment for mobilization, drilling and other work performed at applicable rates, and all other applicable charges shall be due, upon
presentation of invoice therefore, upon completion of mobilization, demobilization, no release or at the end of the month in which such work
was performed or other charges are incurred, whichever shall first occur. All invoices may be mailed to Operator at the address hereinabove
shown, unless Operator does hereby designate that such invoices shall be mailed as follows, as specified by operator _____________.

      5.2 Disputed Invoices and Late Payment: Operator shall pay all invoices within 30 days after receipt except that if Operator disputes an
invoice or any part thereof, Operator shall, within fifteen days after receipt of the invoice, notify Contractor of the item disputed, specifying the
reason therefore, and payment of the disputed item may be withheld until settlement of the dispute, but timely payment shall be made of any
undisputed portion. Any sums (including amounts ultimately paid with respect to a disputed invoice) not paid within the above specified days
shall bear interest at the rate of 2 percent or the maximum legal rate, whichever is less, per month from the due date until paid. If Operator does
not pay undisputed items within the above stated time, Contractor may suspend operations or terminate this Contract as specified under
Subparagraph 6.3.

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6.    TERM:
      6.1 Duration of Contract: This Contract shall remain in full force and effect until drilling operations are completed on the well or wells
specified in Paragraph 1 above, or for a term of TWO (2) years                 , commencing on the date specified in Paragraph 2 above.

      6.2 Extension of Term: Operator may extend the term of this Contract for NA well(s) or for a period of NA by giving notice to Contractor
at least   days prior to completion of the well then being drilled or by

     6.3 Early Termination:

     (a) By Either Party: Upon giving of written notice, either party may terminate this Contract when total loss or destruction of the rig, or a
major breakdown with indefinite repair time necessitate stopping operations hereunder

      (b) By Operator: Notwithstanding the provisions of Paragraph 3 with respect to the depth to be drilled. Operator shall have the right to
direct the stoppage of the work to be performed by Contractor hereunder at any time prior to reaching the specified depth, and even though
Contractor has made no default hereunder. In such event, Operator shall reimburse Contractor as set forth in Subparagraph 6.4 hereof.

       (c) By Contractor: Notwithstanding the provisions of Paragraph 3 with respect to the depth to be drilled, in the event Operator shall
become insolvent, or be adjudicated a bankrupt, or file, by way of petition or answer, a debtor’s petition or other pleading seeking adjustment
of Operator’s debts, under any bankruptcy or debtor’s relief laws now or hereafter prevailing, or if any such be filed against Operator, or in
case a receiver be appointed of Operator or Operator’s property, or any part thereof, or Operator’s affairs be placed in the hands of a Creditor’s
Committee, or, following three business days prior written notice to Operator if Operator does not pay Contractor within the time specified in
Subparagraph 5.2 all undisputed items due and owing, Contractor may, at its option, (1) elect to terminate further performance of any work
under this Contract and Contractor’s right to compensation shall be as set forth in Subparagraph 6.4 hereof, or (2) suspend operations until
payments is made by Operator in which event the standby time rate contained in Subparagraph 4.6 shall apply until payment is made by
Operator and operations are resumed. In addition to Contractor’s rights to suspend operations or terminate performance under this Paragraph,
Operator hereby expressly agrees to protect, defend and indemnify Contractor from and against any claims, demands and causes of action,
including all costs of defense, in favor of Operator, Operator’s co-ventures, co-lessees and joint owners, or any other parties arising out of any
drilling commitments or obligations contained in any loose, farmout agreement or other agreement, which may be affected by such suspension
of operations or termination of performance hereunder.

      6.4 Early Termination Compensation: If Operator terminates this Agreement prior to Operator’s complete performance, the parties agree
that damages would be extremely difficult to determine and that the following liquidated damage sums are fair and reasonable estimates of
damages under the circumstances and do not constitute a penalty.

      (a) Prior to Commencement: In the event Operator terminates this Contract prior to commencement of Operations hereunder, Operator
shall pay Contractor as liquidated damages and not as a penalty a sum equal to 7,300,000,00

      (b) Prior to Spudding: If such termination occurs after commencement of operations but prior to the spudding of the well, Operator shall
pay to Contractor as liquidated damages and not as a penalty the lump sum calculated by taking the number of calendar days remaining on the
contract term (the difference in calendar days between the date of termination and two (2) years from the date specified in Paragraph Number
2) multiplied by $15,000.00. This provision is the complete understanding and agreement of the parties and supersedes and merges all prior
written or oral communications regarding the subject matter hereof (see item 4).

      (c) Subsequent to spudding: If such termination occurs after the spudding of the well, Operator shall pay Contractor as liquidated
damages and not as a penalty the lump sum calculated by taking the number of calendar days remaining on the contract term (the difference in
calendar days between the date of termination and two (2) years from the date specified in Paragraph Number 2) multiplied by $15,000.00.
This provision is the complete understanding and agreement of the parties and supersedes and merges all prior written or oral communications
regarding the subject matter hereof (see item 4).

7.    CASING PROGRAM
     Operator shall have the right to designate the points at which casing will be set and the manner of setting, cementing and testing. Operator
may modify the casing program, however, any such modification which materially increases Contractor’s hazards or costs can only be made by
mutual consent of Operator and Contractor and upon agreement as to the additional compensation to be paid Contractor as a result thereof

8.    DRILLING METHODS AND PRACTICES:
      8.1 Contractor shall maintain well control equipment in good condition at all times and shall use all reasonable means to prevent and
control fires and blowouts and to protect the hole.
      8.2 Subject to the terms hereof, and at Operator’s cost, at all times during the drilling of the well, Operator shall have the right to control
the mud program, and the drilling fluid must be of a type and have characteristics and be maintained by Contractor in accordance with the
specifications shown in Exhibit ―A‖.

      8.3 Each party hereto agrees to comply with all laws, rules, and regulations of any federal, state or local governmental authority which are
now or may become applicable to that party’s operations covered by or arising out of the performance of this Contract. When required by law,
the terms of Exhibit ―B‖ shall apply to this Contract. In the event any provision of this Contract is inconsistent with or contrary to any
applicable federal, state or local law, rule or regulation, said provision shall be deemed to be modified to the extent required to comply with
said law, rule or regulation, and as so modified said provision and this Contract shall continue in full force and effect.

     8.4 Contractor shall keep and furnish to Operator an accurate record of the work performed and formations drilled on the IADC-API
Daily Drilling Report Form or other form acceptable to Operator. A legible copy of said form shall be furnished by Contractor to Operator.

     8.5 If requested by Operator, Contractor shall furnish Operator with a copy of delivery tickets covering any material or supplies provided
by Operator and received by Contractor.

9.    INGRESS, EGRESS, AND LOCATION:
       Operator hereby assigns to Contractor all necessary rights of ingress and egress with respect to the fact on which the well is to be located
for the performance by Contractor of all work contemplated by this Contract. Should Contractor be denied free access to the location for any
reason not reasonably within Contractor’s control, any time lost by Contractor as a result of such denial shall be paid for at the standby time
rate. Operator agrees at all times to maintain the road and location in such a condition that will allow free access and movement to and from the
drilling site in an ordinarily equipped highway type vehicle. If Contractor is required to use bulldozers, tractors, four-wheel drive vehicles, or
any other specialized transportation equipment for the movement of necessary personnel, machinery, or equipment over access roads or on the
drilling location, Operator shall furnish the same at its expense and without cost to Contractor. The actual cost of repairs to any transportation
equipment furnished by Contractor or its personnel damaged as a result of improperly maintained access roads or location will be charged to
Operator. Operator shall reimburse Contractor for all amounts reasonably expended by Contractor for repairs and/or reinforcement of roads,
bridges and related or similar facilities (public and private) required as a direct result of a rig move pursuant to performance hereunder.
Operator shall be responsible for any costs associated with leveling the rig because of location setting.

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10.   SOUND LOCATION:
      Operator shall prepare a sound location adequate in size and capable of property supporting the drilling rig, and shall be responsible for a
casing and cementing program adequate to prevent soil and subsoil wash out it is recognized that Operator has superior knowledge of the
location and access routes to the location, and must advice Contractor of any subsurface conditions, or obstructions (including, but not limited
to, mines, caverns, sink holes, streams, pipelines, power lines and communication lines) which Contractor might encounter while on route to
the location or during operations hereunder. In the event subsurface conditions cause a cratering or shifting of the location surface, or if seabed
conditions prove unsatisfactory to property support the rig during marino operations hereunder, and loss or damage to the rig or its associated
equipment results therefrom, Operator shall, without regard to other provisions of this Contract, Including Subparagraph 14.1 hereof,
reimburse Contractor for all such loss or damage including removal of debris and payment of Force Majeure Rate during repair and/or
demobilization if applicable.

11.   EQUIPMENT CAPACITY
       Operations shall not be attempted under any conditions which exceed the capacity of the equipment specified to be used hereunder or
where canal or water depths are in excess of N/A feet. Without prejudice to the provisions of Paragraph 14 hereunder, Contractor shall have the
right to make the final decision as to when an operation or attempted operation would exceed the capacity of specified equipment.

12.   TERMINATION OF LOCATION LIABILITY:
      When Contractor has concluded operations at the well location, Operator shall thereafter be liable for damage to property, personal
injury or death of any person which occurs as a result of conditions of the location and Contractor shall be relieved of such liability; provided,
however, If Contractor shall subsequently reenter upon the location for any reason, including removal of the rig, any term of the Contract
relating to such reentry activity shall become applicable during such period.

13.   INSURANCE
      During the life of this Contract, Contractor shall at Contractor’s expense maintain, with an insurance company or companies authorized to
do business in the state where the work is to be performed or through a self-insurance program, insurance coverages of the kind and in the
amount set forth in Exhibit ―A‖. Insuring the liabilities specifically assumed by Contractor in Paragraph 14 of this Contract Contractor shall
procure from the company or companies writing said insurance a certificate of certificates that said insurance is in full force and effect and that
the same shall not be canceled or materially changed without ten (10) days prior written notice to Operator. For liabilities assumed hereunder
by Contractor, its Insurance shall be endorsed to provide that the underwriters waive their right of subrogation against Operator. Operator will,
as well, cause its insurer to waive subrogation against Contractor for liability it assumes and shall maintain, at Operator’s expense, or shall self
insure, insurance coverage as set forth in Exhibit ―A‖ of the same kind in the same amount as is required of Contractor, insuring the liabilities
specifically assumed by Operator in Paragraph 14 of this Contract. Operator shall procure from the company or companies writing said
insurance a certificate or certificates that said insurance is in full force and effect and that the same shall not be canceled or materially changed
without ten (10) days prior written notice to Contractor Operator and Contractor shall cause their respective underwriters to name the other
additionally insured but only to the extend of the indemnification obligations assumed herein.

14.   RESPONSIBILITY FOR LOSS OR DAMAGE, INDEMNITY, RELEASE OF LIABILITY AND ALLOCATION OF RISK:
       14.1 Contractor’s Surface Equipment: Contractor shall assume liability at all times for damage to or destruction of Contractor’s surface
equipment, regardless of when or how such damage or destruction occurs, and Contractor shall release Operator of any liability of any such
loss, except loss or damage under the provisions of Paragraph 10 or Subparagraph 14.3.

      14.2 Contractor’s In-Hole Equipment: Except in the case of Contractor’s willful misconduct, Operator shall assume liability at all times
for damage to or destruction of Contractor’s in-hole equipment, including, but not limited to, drill pipe, drill collars, and tool joints, and
Operator shall reimburse Contractor for the value of any such loss or damage; the value to be determined by agreement between Contractor
and Operator as current repair cost or 100 percent of current replacement cost of such equipment delivered to the well site.

       14.3 Contractor’s Equipment - Environmental Loss or Damage: Notwithstanding the provisions of Subparagraph 14.1 above, Operator
shall assume liability at all times for damage to or destruction of Contractor’s equipment resulting from the presence of H S, CO , or other
                                                                                                                               2         2

corrosive elements that enter the drilling fluids from subsurface formations or the use of corrosive, destructive or abrasive additives in the
drilling fluids.

      14.4 Operator’s Equipment: Operator shall assume liability at all times for damage to or destruction of Operator’s or its co-venturers’,
co-lessees’ or joint owners’ equipment, including, but not limited to, casing, tubing, well head equipment, and platform if applicable,
regardless of when or how such damage or destruction occurs, and Operator shall release Contractor of any liability for any such loss or
damage.
       14.5 The Hole: In the event the hole should be lost or damaged, Operator shall be solely responsible for such damage to or loss of the
hole, including the casing therein, Operator shall release Contractor and its suppliers, contractors and subcontractors of any tier of any
liability for damage to or loss of the hole, and shall protect, defend and indemnify Contractor and its suppliers, contractors and subcontractors
of any tier from and against any and all claims, liability and expense relating to such damage to or loss of the hole.

       14.6 Underground Damage: Operator shall release Contractor and its supplier, contractors and subcontractors of any tier of any
liability for, and shall protect, defend and indemnify Contractor and its suppliers, contractors and subcontractors of any tier from and against
any and all claims, liability, and expense resulting from operations under this Contract on account of Injury to, destruction of, or loss or
Impairment of any property right in or to oil, gas, or other mineral substance or water, if at the time of the act or omission causing such injury,
destruction, loss or impairment, said substance had not been reduced to physical possession above the surface of the earth, and for any loss or
damage to any formation, strata, or reservoir beneath the surface of the earth.

      14.7 Inspection of Materials Furnished by Operator: Contractor agrees to visually inspect all materials furnished by Operator before
using same and to notify Operator of any apparent defects therein. Contractor shall not be liable for any loss or damage resulting from the use
of materials furnished by Operator, and Operator shall release Contractor from, and shall protect, defend and indemnify Contractor from and
against, any such liability.

      14.8 Contractor’s Indemnification of Operator: Contractor shall release Operator of any liability for, and shall protect, defend and
indemnify Operator from and against all claims, demands, and causes of action of every kind and character, without limit and without regard
to the cause or causes thereof or the negligence of any party or parties, arising in connection herewith in favor of contractor’s employees or
Contractor’s subcontractors of any tier (inclusive of any agent or consultant engaged by Contractor) or their employees, or Contractor’s
Invitees, on account of body injury, death or damage to property, Contractor’s indemnity under this Paragraph shall be without regard to and
without any right to contribution from any Insurance maintained by Operator pursuant to Paragraph 13. If it is judicially determined that the
monetary limits of insurance required hereunder or of the Indemnities voluntary assumed under Subparagraph 14.8 (which Contractor and
Operator hereby agree will be supported either by available liability insurance, under which the insurer has no right of subrogation against
the indemnities, or voluntarily self-insured, in part or whole) exceed the maximum limits permitted under applicable law, it is agreed that said
insurance requirement or indemnities shall automatically be amended to conform to the maximum monetary limits permitted under such law.
This sub paragraph is not meant to replace the provisions of sub paragraphs 14.1 through 14.7 and 14.10 through 14.13.

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      14.9 Operator’s Indemnification of Contractor: Operator shall release Contractor of any liability for, and shall protect, defend and
Indemnify Contractor from and against all claims, demands, and causes of action of every kind and character, without limit and without regard
to the cause or causes thereof or the negligence of any party or parties, arising in connection herewith in favor of Operator’s employees or
Operator’s contractors of any tier (inclusive of any agent, consultant or subcontractor engaged by Operator) or their employees, or Operator’s
invitees, other than those parties identified in Subparagraph 14.8 on account of body injury, death or damage to property. Operator’s
indemnity under this Paragraph shall be without regard to and without any right to contribution from any insurance maintained by Contractor
pursuant to Paragraph 13. If it is judicially determined that the monetary limits of insurance required hereunder or of the indemnities
voluntary assumed under Subparagraph 14.9 (which Contractor and Operator hereby agree will be supported either by available liability
insurance, under which the insurer has no right of subrogation against the Indemnities, or voluntarily self-insured, In part or whole) exceed
the maximum limits permitted under applicable law, it is agreed that said insurance requirements or indemnities shall automatically be
amended to conform to the maximum monetary limits permitted under such law. This sub paragraph is not meant to replace the provisions of
sub paragraphs 14.1 through 14.7 and 14.10 through 14.13.

     14.10 Liability for Wild Well: Operator shall be liable for the cost of regaining control of any wild well, as well as for cost of removal of
any debts and cost of property remediation and restoration, and Operator shall release, protect, defend and indemnify Contractor and its
suppliers, contractors and subcontractors of any tier from and against any liability for such cost.

      14.11 Pollution or Contamination: Notwithstanding anything to the contrary contained herein, except the provisions of Paragraphs 10
and 12, it is understood and agreed by and between Contractor and Operator that the responsibility for pollution or contamination shall be as
follows:

      (a) Contractor shall assume all responsibility for, including control and removal of, and shall protect, defend and indemnify Operator
from and against all claims, demands and causes of action of every kind and character arising from pollution or contamination, which
originates above the surface of the land or water from spills of fuels, lubricants, motor oil, pipe dope, paints, solvents, ballast, bilge and
garbage except unavoidable pollution from the reserve pits, wholly in Contractor’s possession and control and directly associated with
Contractor’s equipment and facilities.

       (b) Operator shall assume all responsibility for, including control and removal of, and shall protect, defend and indemnify Contractor
and its suppliers, contractors and subcontractors of any tier from and against all claims, demands, and causes of action or every kind and
character arising directly or indirectly from all other pollution or contamination which may occur during the conduct of operations hereunder,
including, but not limited to, that which may result from fire, blowout, cratering, seepage or any other uncontrolled flow of oil, gas, water
other substance, as well as the use or disposition of all drilling fluids, including, but not limited to, all emulsion, oil base or chemically treated
drilling fluids, contaminated cuttings or cavings, lost circulation and fish recovery materials and fluids. Operator shall release Contractor and
its suppliers, contractors and subcontractors of any tier of any liability for the foregoing.

      (c) In the event a third party commits an act or omission which results in pollution or contamination for which either Contractor and
Operator, for whom such party is performing work, is held to be legally liable, the responsibility therefore shall be considered, as between
Contractor and Operator, to be the same as if the party for whom the work was performed had performed the same and all of the obligations
respecting protection, defense, indemnity and limitation of responsibility and liability, as set forth in (a) and (b) above, shall be specifically
applied.

      14.12 Consequential Damages: Subject to and without effecting the provisions of this Contract regarding the payment rights and
obligations of the parties or the risk of loss, release and indemnity rights and obligations of the parties, each party shall at all times be
responsible for and hold harmless and indemnify the other party from and against its own special, indirect or consequential damages, and the
parties agree that special, indirect and consequential damages shall be deemed to include, without limitation, the following: loss of profit or
revenue; costs and expenses resulting from business interruptions; loss of or delay in production; loss of or damage to the leasehold; loss of or
delay in drilling or operating rights; cost of or loss of use of property, equipment, materials and services, including without limitation those
provided by contractors or subcontractors of every tier or by third parties. Operator shall at all times be responsible for and hold harmless
and indemnify Contractor and its suppliers, contractors and subcontractors of any tier from and against all claims, demands and causes of
action of every kind and character in connection with such special, indirect or consequential damages suffered by Operator’s co-owners,
co-venturers, co-lessees, farmers, farmees, partners and joint owners.
       14.13 Indemnity Obligation: Except as otherwise expressly limited in this Contract, it is the intent of parties hereto that all releases,
Indemnity obligations and/or liabilities assumed by such parties under terms of this Contract, including, without limitation, Subparagraphs 4.9
and 6.3(c), Paragraphs 10 and 12, and Subparagraphs 14.1 through 14.12 hereof, be without limit and without regard to the cause or causes
thereof, including, but not limited to, pre-existing conditions, defect or ruin of premises or equipment, strict liability, regulatory or statutory
liability, products liability, breach of representation or warranty (express or implied), breach of duty (whether statutory, contractual or
otherwise) any theory of tort, breach of contract, fault the negligence of any degree or character (regardless of whether such negligence is
sole, joint or concurrent, active, passive or gross) of any party or parties, including the party seeking the benefit of the release, indemnity or
assumption of liability, or any other theory of legal liability. The indemnities, and releases and assumptions of liability extended by the parties
hereto under the provisions of Subparagraphs 4.9 and 8.3 and Paragraphs 10, 12 and 14 shall inure to the benefit of such parties, their
co-venturers, co-lessees, joint owners, their parent, holding and affiliated companies and the officers, directors, stockholders, partners,
managers, representatives, employees, consultants, agents, servants and insurers of each. Except as otherwise provided herein, such
indemnification and assumptions of liability shall not be deemed to create any rights to indemnification in any person or entity not a party to
this Contract, either as a third party beneficiary or by reason of any agreement of indemnity between one of the parties hereto and another
person or entity not a party of this Contract.

15.   AUDIT
      If any payment provided for hereunder is made on the basis of Contractor’s costs, Operator shall have the right to audit Contractor’s
books and records relating to such costs. Contractor agrees to maintain such books and records for a period of two (2) years from the date such
costs were incurred and to make such books and records readily available to Operator at any reasonable time or times within the period.

16.   NO WAIVER EXCEPT IN WRITING
     It is fully understood and agreed that none of the requirements of this Contract shall be considered as waived by either party unless the
same is done in writing, and then only by the persons executing this Contract or other duly authorized agent or representative of the party.

17.   FORCE MAJEURE
      Except as provided in this Paragraph 17 and without prejudice to the risk of loss, release and indemnity obligations under this Contract,
each party of this Contract shall be excused from complying with the terms of this Contract, except for the payment of monies when due, if and
for so long as such compliance is hindered or prevented by a Force Majeure Event As used in this Contract, ―Force Majeure Event‖ includes:
acts of God, action of the elements, wars (declared or undeclared), insurrection, revolution, rebellions or civil strife, piracy, civil war or hostile
action, terrorist acts, riots, strikes, differences with workmen, acts of public enemies, federal or state laws, rules, regulations dispositions or
orders of any governmental authorities having jurisdiction in the premises or of any other group, organization or informal association (whether
or not formally recognized as a government), inability to procure material, equipment, fuel or necessary labor in the open market, acute and
unusual labor or material, equipment or fuel shortages, or any other causes (except financial) beyond the control of either party. Neither
Operator nor Contractor shall be required against its will to adjust any labor or similar disputes except accordance with applicable law in the
event that either party hereto is rendered unable, wholly or in party, by

                              (U.S. Daywork Contract - Page 5)                                            Form provided by Forms On-A-Disk
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any of these causes to carry out its obligation under this Contract, It is agreed that such party shall give notice and details of Force Majeure in
writing to the order party as promptly as possible after its occurrence. In such cases, the obligation of the party giving the notice shall be
suspended during the continuance of any inability so caused except that Operator shall be obligated to pay to Contractor the Force Majeure
Rate provided for in Subparagraph 4.8 above.

18.   GOVERNING LAW:
     This Contract shall be construed, governed, Interpreted, enforced and litigated, and the relations between the parties determined in
accordance with the laws of State of Oklahoma.

19.   INFORMATION CONFIDENTIAL:
      Upon written request by Operator, Information obtained by Contractor in the conduct of drilling operations on this well, including, but
not limited, to depth, formation penetrated, the result of coring, testing and surveying, shall be considered confidential and shall not be divulged
by Contractor or its employees, to any person, firm, or corporation other than Operator’s designated representatives.

20.   SUBCONTRACTS:
     Either party may employ other contractors to perform any of the operations or services to be provided or performed by it according to
Exhibit ―A‖.

21.   ATTORNEY’S FEES
       If this Contract is placed in the hands of an attorney for collection of any sums or the performance of any services due hereunder, or suit
is brought on same, or sums due hereunder are collected through bankruptcy or arbitration proceedings, then the prevailing party shall be
entitled to recover reasonable attorney’s fees and costs.

22.   CLAIMS AND LIENS:
      Contractor agrees to pay all valid claims for labor, material, services, and supplies to be furnished by Contractor hereunder, and agrees to
allow no lien by such third parties to be fixed upon the lease, the well, or other property of the Operator or the land upon which said well is
located.

23.   ASSIGNMENT: Operator may assign this contract upon Contractor’s written approval which shall not be unreasonably
      withheld. However, not withstanding any assignment, Operator shall remain liable to Contractor as guarantor of the
      performance by the assignee.
      Contractor may not assign its rights and obligations under this contract without the prior written approval or Operator, which approval
shall not be unreasonably withheld.

24.   NOTICES AND PLACE OF PAYMENT:
      Notices, reports, and other communications required or permitted by this Contract to be given or sent by one party to the other shall be
delivered by hand, mailed, digitally transmitted or telecopied to the address hereinabove shown. All sums payable hereunder to Contractor shall
be payable at its address hereinabove shown unless otherwise specified herein.

25.   CONTINUING OBLIGATIONS:
      Notwithstanding the termination of this Contract, the parties shall continue to be bound by the provisions of this Contract that reasonably
require some action or forbearance after such termination.

26.   ENTIRE AGREEMENT:
      This Contract constitutes the full understanding of the parties, and a complete and exclusive statement of the terms of their agreement,
and shall exclusively control and govern all work performed hereunder. All representations, offers, and undertakings of the parties made prior
to the effective date hereof, whether oral or in writing, are merged herein, and no other contracts, agreements or work orders, executed prior to
the execution of this Contract, shall in any way modify, amend, alter or change any of the terms or conditions set out herein.

27.   SPECIAL PROVISIONS:
ITEM 1       Operator agrees to pay actual (―actual‖ means charges equivalent to those billed by the trucking company, or charged by
             the Contractor, if the Contractor performs the move) plus 85% of the day rate for each day moving from the rigs’ prior
             location following the rigs’ release, waiting on location, waiting on trucks, waiting on allowable weather conditions, until
             the well is spud, and for each day rigging down.
ITEM 2       Operator agrees to pay daywork rate of $21,000.00 for the first twelve (12) months following the commencement date and
             daywork rate of $23,000.00 for the subsequent twelve (12) months.
ITEM 3       Operator agrees to pay Standby Time Rate in accordance with the daywork rate ( SEE ITEM 2 Above )

     ACCEPTANCE OF CONTRACT:
      The foregoing Contract, including the provision relating to indemnity, release of liability and allocation of risk of Subparagraphs 4.9 and
6.3(c), Paragraph 10 and 12, and Subparagraphs 14.1 through 14.13, is acknowledged, agreed to and accepted by Operator this            day
of              ,20    .


                                                                                       OPERATOR:        Windsor Energy Resources Inc.
                                                                                                  By: /s/ Michael P. Cross
                                                                                                 Title: Michael P. Cross-CEO

      The foregoing Contract, including the provisions relating to indemnity, release of liability and allocation of risk of Subparagraphs 4.9,
6.3(c) Paragraphs 10 and 12, and Subparagraphs 14.1 through 14.13, is acknowledged, agreed to and accepted by Contractor this ____ day of
______, 2005__, which is the effective date of this Contract, subject to rig availability, and subject to all its terms and provisions, with the
understanding that it will not be binding upon Operator until Operator has noted its acceptance, and with the further understanding that unless
said Contract is thus executed by Operator within 5 days of the above date Contractor shall be in no manner bound by its signature thereto.


                                                                                       CONTRACTOR: Bronco Drilling Company, Inc.
                                                                                                    By: /s/ Karl Benzor
                                                                                                   Title: Karl Benzor-Chief Operating Officer

                             (U.S. Daywork Contract - Page 6)                                         Form provided by Forms On-A-Disk
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                                                                                                                                    Revised April, 2003

                                                                    EXHIBIT ―A‖

To Daywork Contract dated                     , 2005

Operator Windsor Energy Resources, Inc. Contractor Bronco Drilling Company, Inc.

Well Name and Number TO BE DETERMINED BY OPERATOR AND SPECIFIED BY INDIVIDUAL LETTER AGREEMENT FOR
EACH WELL

                                                SPECIFICATIONS AND SPECIAL PROVISIONS

1.     CASING PROGRAM (See Paragraph 7) To be determined by Operator.

                         Hole                 Casing                                                         Approximation          Wait on Cement
                         Size                  Size                 Weight                         Grade     Setting Depth               Time
Conductor           __________       in.    __________      in.   __________      lbs/ft.     __________     __________       ft.    __________      hrs
Surface             __________       in.    __________      in.   __________      lbs/ft.     __________     __________       ft.    __________      hrs
Protection          __________       in.    __________      in.   __________      lbs/ft.     __________     __________       ft.    __________      hrs
                    __________       in.    __________      in.   __________      lbs/ft.     __________     __________       ft.    __________      hrs
Production          __________       in.    __________      in.   __________      lbs/ft.     __________     __________       ft.    __________      hrs
Liner               __________       in.    __________      in.   __________      lbs/ft.     __________     __________       ft.    __________      hrs
____________        __________       in.    __________      in.   __________      lbs/ft.     __________     __________       ft.    __________      hrs


2.     MUD CONTROL PROGRAM (See Subparagraph 8.2) To be determined by Operator.

                    Depth Interval
                         (ft)
                                                                                      Weight                    Viscosity               Water Loss
             From                      To                     Type Mud               (lbs./gal.)                 (Secs)                    (cc)
    __________________          ________________         ________________      ________________            ________________         ________________
    __________________          ________________         ________________      ________________            ________________         ________________
    __________________          ________________         ________________      ________________            ________________         ________________
    __________________          ________________         ________________      ________________            ________________         ________________
    __________________          ________________         ________________      ________________            ________________         ________________

Other mud specifications:




3.     INSURANCE (See Paragraph 13) Certificates on file with Operator.
       3.1 Adequate Workers’ Compensation Insurance complying with State Laws applicable or Employers’ Liability Insurance with limits of
$               covering all of Contractor’s employees working under this Contract.

      3.2 Commercial (or Comprehensive) General Liability Insurance, including contractual obligations as respects this Contract and proper
coverage for all other obligations assumed in this Contract. The limit shall be $          combined single limit per occurrence for Bodily
Injury and Property Damage.

     3.3 Automobile Public Library Insurance with limits of $              for the death or injury of each person and $                         for each
accident; and Automobile Public Liability Property Damage Insurance with limits of $                for each accident.

     3.4 In the event operations are over water, Contractor shall carry in addition to the Statutory Workers’ Compensation Insurance,
endorsements covering liability under the Longshoremen’s & Harbor Workers’ Compensation Act and Maritime liability including
maintenance and cure with limits of $               for each death or injury to one person and $               for any one accident.

       3.5 Other Insurance:




4.     EQUIPMENT, MATERIALS AND SERVICES TO BE FURNISHED BY CONTRACTOR:
      The machinery, equipment, tools, materials, supplies, instruments, services and labor hereinafter listed, including any transportation
required for such items, shall be provided at the well location at the expense of Contractor unless otherwise noted by this Contract.

     4.1 Drilling Rig - Inventory attached.

     Complete drilling rig, designated by Contractor at its Rig No #15 the major items of equipment being:
Drawworks; Make and Model __________________________________________________________________________________
Engines: Make, Model, and H.P. ________________________________________________________________________________
     No. on Rig SEE ATTACHED RIG INVENTORY
Pumps: No. 1 Make, Size, and Power _____________________________________________________________________________
        No. 2 Make, Size, and Power _____________________________________________________________________________
Mud Mixing Pump: Make, Size, and Power ________________________________________________________________________
Boilers: Number, Make, H.P. and W.P. ___________________________________________________________________________
Derrick or Mast: Make, Size, and Capacity ________________________________________________________________________
___________________________________________________________________________________________________________
Substructure. Size and Capacity _________________________________________________________________________________
Rotary Drive. Type ___________________________________________________________________________________________
Drill Pipe: Size _________________ in __________________ ft: Size: __________________________ in __________________ft
Drill Collars, Number and Size __________________________________________________________________________________

                        (U.S. Daywork Contract - “Exhibit A” - Page 1)                                 Form provided by Forms On-A-Disk
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                                                                                                                              Revised April, 2003

Blowout Preventors.

            Size                              Series or Test Pr.                      Make & Model                              Number
____________________                     ____________________                 ____________________                   ____________________
____________________                     ____________________                 ____________________                   ____________________
____________________                     ____________________                 ____________________                   ____________________
____________________                     ____________________                 ____________________                   ____________________
B.O.P. Closing Unit.
B.O.P. Accumulator:
     4.2 Derrick timbers.

     4.3 Normal strings of drill pie and drill collars specified above.

     4.4 Conventional drift indicator.

     4.5 Circulating mud pits.

     4.6 Necessary pipe racks and rigging up material.

     4.7 Normal storage for mud and chemicals.

     4.8 Shale Shaker.

     4.9 _________________________________________________________________________________________________

     4.10 _________________________________________________________________________________________________

     4.11 _________________________________________________________________________________________________

     4.12 _________________________________________________________________________________________________

     4.13 _________________________________________________________________________________________________

     4.14 _________________________________________________________________________________________________

     4.15 _________________________________________________________________________________________________

     4.16 _________________________________________________________________________________________________

     4.17 _________________________________________________________________________________________________

5.    EQUIPMENT, MATERIALS AND SERVICES TO BE FURNISHED BY OPERATOR:
      The machinery, equipment, tools, materials, supplies, instruments, services and labor hereinafter listed, including any transportation
required for such items, shall be provided at the well location at the expense of Operator unless otherwise noted by this Contract.

      5.1 Furnish and maintain adequate roadway and/or canal to location, right-of-way, including rights–of–way for fuel and water lines, river
crossings, highway crossings, gates and cattle guards.

     5.2 Stake location, clear and grade location, and provide turnaround, including surfacing when necessary.

     5.3 Test tanks with pipe and fittings.

     5.4 Mud storage tanks with pipe and fittings.

     5.5 Separator with pipe and fittings.

     5.6 Labor and materials to connect and disconnect mud tank, test tank, and mud gas separator.

     5.7 Labor to disconnect and clean test tanks and mud gas separator.

     5.8 Drilling mud, chemicals, lost circulation materials and other additives.

     5.9 Pipe and connections for oil circulating lines.
     5.10 Labor to lay, bury and recover oil circulating lines.

     5.11 Drilling bits, reamers, reamer cutters, stabilizers and special tools.

     5.12 Contract fishing tool services and tool rental.

     5.13 Wire line core bits or heads, core barrels and wire line core catchers if required.

     5.14 Conventional core bits, core catchers and core barrels.

     5.15 Diamond core barrel with head.

     5.16 Cement and cementing service.

     5.17 Electrical wireline logging services.

     5.18 Directional, caliper, or other special services.

     5.19 Gun or jet pertorating services.

     5.20 Explosives and shooting devices.

     5.21 Formation testing, hydraulic fracturing, acidizing and other related services.

     5.22 Equipment for drill stem testing.

     5.23 Mud logging services.

     5.24 Sidewall coring service.

     5.25 Welding service for welding bottom joints of casing, guide shoe, float shoe, float collar and in connection with installing of well
head equipment if required.

     5.26 Casing, tubing, liners, screen, floats collars, guide and float shoes and associated equipment.

     5.27 Casing scratchers and centralizers.

    5.28 Well head connections and all equipment to be installed in or on well or on the premises for use in connection with testing,
completion and operation of well.

     5.29 Special or added storage for mud and chemicals.

     5.30 Casinghead, API series, to conform to that shown for the blowout Preventors specified in Subparagraph 4.1 above.

     5.31 Blowout preventor testing packoff and testing services.

     5.32 Replacement of BOP rubbers, elements and seals, if required, after initial test.

     5.33 Casing Thread Protectors and Casing Lubricants.

     5.34 H2S Training and equipment as necessary or as required by law.

     5.35 Site specific systems.

     5.36 Fuel additives and conditioners as required for year round operations _________________________________________

     5.37 All rubber products furnished as required while using an oil based drilling fluid including all expendables and mud system valves
_____________________________________________________________

     5.38 _________________________________________________________________________________________________

     5.39 _________________________________________________________________________________________________

     5.40 _________________________________________________________________________________________________

     5.41 _________________________________________________________________________________________________

     5.42 _________________________________________________________________________________________________

     5.43 _________________________________________________________________________________________________
5.44 _________________________________________________________________________________________________

5.45 _________________________________________________________________________________________________

5.46 _________________________________________________________________________________________________

5.47 _________________________________________________________________________________________________

5.48 _________________________________________________________________________________________________

5.49 _________________________________________________________________________________________________

5.50 _________________________________________________________________________________________________

                (U.S. Daywork Contract - “Exhibit A” - Page 2)               Form provided by Forms On-A-Disk
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                                                                                                                                Revised April, 2003

6.     EQUIPMENT, MATERIALS AND SERVICES TO BE FURNISHED BY DESIGNATED PARTY:
      The machinery, equipment, tools, materials, supplies, instruments, services, and labor listed to as the following numbered items,
including any transportation required for such items unless otherwise specified, shall be provided at the well location and at the expense of the
party hereto as designated by an X mark in the appropriate column.

                                                                                                                           To Be Provided By and
                                                                                                                            At The Expense Of
             Item                                                                                                        Operator        Contractor
6.1          Cellar and Runways                                                                                             x
6.2          Ditches and Bumps                                                                                              x
6.3          Fuel (located at Rig - including propane)                                                                      x
6.4          Fuel Lines ( length)                                                                                                            x
6.5          Water at sources, including required permits                                                                   x
6.6          Water well, including required permits                                                                         x
6.7          Water lines, including required permits                                                                        x
6.8          Water storage tanks 400 bbl capacity                                                                                            x
6.9          Potable water                                                                                                  x
6.10         Labor to operate water well or water pump                                                                                       x
6.11         Maintenance of water well, if required                                                                         x
6.12         Water pump                                                                                                     x
6.13         Fuel or water pump                                                                                             x
6.14         Mats for engines and boilers, or motors and mud pumps                                                          x
6.15         Transportation of Contractor’s property Move in                                                                x
             Move out                                                                                                       x
6.16         Materials for ―boxing in‖ rig and derrick                                                                                       x
6.17         Special strings of drill pipe and drill collars as follows:
             All tubulars not listed on rig inventory                                                                       x
6.18         Kelly joints, subs, elevators, tongs, slips and BOP rams for use with special drill pipe                       x
6.19         Drill pipe protectors for Kelly joint and each joint of drill pipe running inside of Surface Casing as
               required, for use with normal strings of drill pipe                                                          x
6.20         Drill pipe protectors for Kelly joint and drill pipe running inside of Protection Casing                       x
6.21         Ratio of penetration recording device Mechanical or Totco EDR as required by contractor                                         x
6.22         Extra labor for running and cementing casing (Casing crews)                                                    x
6.23         Casing tools                                                                                                   x
6.24         Power casing tongs                                                                                             x
6.25         Laydown and pickup machine                                                                                     x
6.26         Tubing tools                                                                                                   x
6.27         Power tubing tong                                                                                              x
6.28         Crow Boats, Number                                                                                            N/A
6.29         Service Barge                                                                                                 N/A
6.30         Service Tug Boat                                                                                              N/A
6.31         Rat Hole                                                                                                       x
6.32         Mouse Hole                                                                                                     x
6.33         Reserve Pits                                                                                                   x
6.34         Upper Kelly Cock                                                                                                                x
6.35         Lower Kelly Valve                                                                                                               x
6.36         Drill Pipe Safety Valve                                                                                                         x
6.37         Inside Blowout Preventer                                                                                                        x
6.38         Drilling hole for or driving for conductor pipe                                                                x
6.39         Charges, cost of bonds for public roads                                                                        x
6.40         Portable Toilet                                                                                                x
6.41         Trash Recoptacio                                                                                               x
6.42         Linear Motion Shale Shaker                                                                                                      x
6.43         Shale Shaker Screens Operators to provide all shale shaker screens                                             x
6.44         Mud Cleaner                                                                                                    x
6.45         Mud/Gas Separator                                                                                              x
6.46         Dosander - Rig Inventory                                                                                                        x
6.47         Desilter                                                                                                                        x
6.48         Degasser                                                                                                       x
6.49          Centrifuge                                                                                               x
6.50          Rotating Head                                                                                            x
6.51          Rotating Head Rubbers                                                                                    x
6.52          Hydraulic Adjustable Choke                                                                               x
6.53          Pit Volume Totalizer                                                                                     x
6.54          Communication type MOBILE PHONE ONLY **                                                                             x
6.55          Forklift, capacity 8000# Overhead Extended Boom                                                          x
6.56          Corrosion Inhibitor for protecting drill string To be specified by Contractor                            x
6.58          String-Up Crew and Equipment                                                                             x
6.59          Right-of-way for water and gas lines                                                                     x
6.60          Water lines permits – if required                                                                        x
6.61          Drill Pipe Corrosion control to less than 15 lb/sqft per year (if required)                              x
**     Operator to supply Land Phone line services if Contractor Mobile Phone services are not available on location

                                                                  EXHIBIT ―B‖

                                                              (See Subparagraph 8.3)

                         (U.S. Daywork Contract - “Exhibit A” - Page 3)                              Form provided by Forms On-A-Disk
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The following clauses, when required by law, are incorporated in the Contract by reference as if fully set out:
(1)   The Equal Opportunity Clause prescribed in 41 CFR 60-1.4
(2)   The Affirmative Action Clause prescribed in 41 CFR 60-250.4 regarding veterans and veterans of Vietnam era.
(3)   The Affirmative Action Clause for handicapped workers prescribed in 41 CFR 60-741.4
(4)   The Certification of Compliance with Environmental Laws prescribed in 40 CFR 15.20

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(7.0)       OTHER PROVISIONS:
     7.1 Contractor shall furnish initial tested annual preventer element. If element is damaged during the job, Operator agrees to furnish a
new element.

      7.2 Chemical additives to the mud for preventing oxidation of the drill string and hydrogen sulfide scavenging chemicals to treat the mud
or drilling fluids are necessary to remove all traces of H2S and to control oxygen corrosion levels not to exceed 1.5 pounds per square foot per
year to be furnished by Operator. Contractor’s shall specify the company which provides corrosion control.

      7.3 Operator’s representative and Operator’s subcontractors shall support Contractor’s safety policies and procedures in general and in
particular will comply with all Contractor’s personal protective equipment requirements.

        7.4 Operator shall be responsible for all materials and welding to hook up flow line, chokes and mud gas separator.

        7.5 Operator shall be responsible for all materials and welding associated with all air drilling and oil base mud requirements.

     7.6 Weight run on bit shall not exceed drill collar weight in mud. Rotary speed shall be run of mutually agreed upon speed between
Operator and Contractor as not to damage drill pipe.

      7.7 Should oil-based mud be used on this job, any special revision or protection of pits and cleanup costs shall be at the expense of
Operator. Any mud cleaning equipment (including power and fuel) required by Operator, not in the normal rig inventory, shall be furnished by
Operator. Any modification of the rig (drain under racking board, etc.) or replacement of rig parts (mud buckets, etc.) required by Operator in
order to reduce the cost of oil-based mud shall be at the Operator’s expense. Operator shall bear all expense to clean rig upon completion of
well (including labor and foam cleaner.) Operator shall reimburse Contractor for any additional pay, protective clothing, or other compensation
to Contractor’s employees for working with oil-based mud. Dayrate shall increase by the amount of $200.00 when oil-base or potassium
chloride mud is used. When oil-base or potassium chloride mud is used Operator shall pay $15.00/day expense reimbursement for hands
(including toolpusher). Operator shall pay up to 48 hours of dayrate for cleaning or rig.

        7.8 Operator will provide shaker screens required for shaker.

     7.9 Contractor shall not be liable for any outside equipment. Any electrical connections made to Bronco Drilling’s light plant shall be
made at owner of equipment’s risk.

      7.10 In the event of there is a conflict between any or all of the terms and provisions of this contract and any other agreement, oral or
written, to include but not limited to master service agreement, then it is understood and agreed that the terms and provisions of this contract
shall prevail and control.

        7.11 Daywork shall be billed at the end of each month and be due within 30 days.

      7.12 Contractor will provide inspected double white band pipe prior to commencement of well. Operator will provide all subsequent
inspections including final inspection upon completion of well or program. Operator will provide drill pipe and drill collar maintenance
(including trip check, repairs, replacement hardbanding, etc.). Operator shall provide all trucking and repair for drill string.

      7.13 If Operator elects to run standby pump in tandom with the main pump (and main pump is operational), Operator will waive the down
time provision in 4.5 as to the repair of the mud pumps while operations in said connection continue.

      7.14 If additional compensation for crews is required due to the distance required to drive, Operator will reimburse Bronco of actual costs
plus 40% overhead burden.

       7.15 If a camp job is required. Operator will provide mobile homes and needed hook-up for on-site living quarters for crews, plus $20.00
/ day per diem from start of moving in through drilling, tear down, and move out. Operator will provide motels as needed prior to mobile
homes being set or motels in place of trailers. As an alternative, Operator may provide off site housing ( i.e. hotels, apartments, etc.) Operator
shall reimburse Bronco Drilling if Bronco Drilling provides housing.

     7.16 Operator shall be responsible and bear all expenses for any H2S training or equipment (including safety equipment, detection
equipment, and corrosion inhibitor to less than one pound per food per year) as well as any additional personnel needed due to encounter or
potentially encounter H2S.

      7.17 Operator shall bear all responsibility and costs to adhere to any and all city regulations including but not limited to sound abatement,
security and traffic control.

        7.18 Contractor’s drill pipe will be used only in the vertical section of the hole. (6 degrees) Contractor’s drill pipe will not be run past
KOP.

        7.19 Rig’s mud pumps will be operated up to a maximum of 75% of rated pressure and strokes.
                                                                                                                                Chief
Signed by the                                                                                                                     Operating
Parties as correct:                                    For Contractor    /s/ Karl Benzer                                          Officer
                                                                         Karl Benzer

                                                           For Operator /s/ Michael P. Cross
                                                                        Michael P. Cross


                                                                                                                                  Exhibit 23.1

                              CONSENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

We have issued our report dated March 6, 2006, accompanying the consolidated financial statements of Bronco Drilling Company, Inc. and
Subsidiaries as of December 31, 2005 and 2004, and for each of the three years in the period ended December 31, 2005. We have also issued
our report dated September 21, 2005, accompanying the combined financial statements of Strata Drilling, L.L.C. and Affiliate as of, and for the
year ended, December 31, 2004 and our report dated December 9, 2005, accompanying the combined financial statements of Eagle Drilling,
L.L.C. and Affiliates as of and for each of the years ended, December 31, 2004 and 2003. These reports are contained in Bronco Drilling
Company, Inc.’s Prospectus and Amendment No. 2 to the Registration Statement on Form S-1. We consent to the use of the aforementioned
reports in the Prospectus and Registration Statement, and to the use of our name as it appears under the caption ―Experts‖.

/s/ GRANT THORNTON LLP

Oklahoma City, Oklahoma
March 17, 2006
                                                                                                                                Exhibit 23.2

                                     CONSENT OF INDEPENDENT PUBLIC ACCOUNTING FIRM

We have issued our report dated June 16, 2005, accompanying the financial statements of Thomas Drilling Company as of December 31, 2004
and 2003, and for each of the two years in the period ended December 31, 2004. This report is contained in Bronco Drilling Company, Inc.’s
Prospectus and Registration Statement on Form S-1. We consent to the use of the aforementioned reports in the Registration Statement, and to
the use of our name as it appears under the caption ―Experts‖.

/s/ Freemon, Shapard and Story
Wichita Falls, Texas

March 17, 2006

								
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