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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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FORM 10-Q
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(Mark One)
/X/ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
FOR THE QUARTERLY PERIOD ENDED FEBRUARY 28, 1994
OR
/ / TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
FOR THE TRANSITION PERIOD FROM TO
------------------- -------------------
COMMISSION FILE NUMBER 1-7573
----------------------
PARKER DRILLING COMPANY
(Exact name of registrant as specified in its charter)
Delaware 73-0618660
- ------------------------------- ------------------------------------
(State or other jurisdiction of (I.R.S. Employer Identification No.)
incorporation or organization)
Parker Building, Eight East Third Street, Tulsa, Oklahoma 74103
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(Address of principal executive offices) (zip code)
Registrant's telephone number, including area code (918) 585-8221
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Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to
such filing requirements for the past 90 days. Yes X No
As of March 31, 1994, 55,048,436 common shares were outstanding.
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PARKER DRILLING COMPANY
INDEX
<CAPTION>
<S> <C>
Part I. Financial Information Page No.
Consolidated Condensed Balance Sheets (Unaudited) -
February 28, 1994 and August 31, 1993 2
Consolidated Condensed Statements of Operations (Unaudited) -
Three and Six Months Ended February 28, 1994 and
February 28, 1993 3
Consolidated Condensed Statements of Cash Flows (Unaudited) -
Six Months Ended February 28, 1994 and February 28, 1993 4
Notes to Unaudited Consolidated Condensed
Financial Statements 5
Report of Review by Independent Accountants 6
Management's Discussion and Analysis of Financial
Condition and Results of Operations 7 - 10
Part II. Other Information
Item 6, Exhibits and Reports on Form 8-K 11
Signatures 12
Exhibit 10(a) Amendment dated as of December 12, 1993,
to the Credit Agreement, dated as of September 24, 1992,
between Morgan Guaranty Trust Company of New York,
Internationale Nederlanden Bank N.V. and Parker
Drilling Company.
Exhibit 15, Letter Re Unaudited Interim
Financial Information
</TABLE>
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<TABLE>
PART 1. FINANCIAL INFORMATION
PARKER DRILLING COMPANY AND SUBSIDIARIES
CONSOLIDATED CONDENSED BALANCE SHEETS
(Dollars in Thousands)
(Unaudited)
<CAPTION>
February 28, August 31,
1994 1993
ASSETS ---------- ----------
------
<S> <C> <C>
Current assets:
Cash and cash equivalents $ 14,136 $ 12,570
Other short-term investments 7,178 31,419
Accounts and notes receivable 35,319 23,353
Rig materials and supplies 10,578 10,970
Other current assets 4,692 2,793
-------- --------
Total current assets 71,903 81,105
Property, plant and equipment less accumulated
depreciation, depletion and amortization of
$480,550 at February 28, 1994, and $472,466
at August 31, 1993 152,637 139,326
Other noncurrent assets 15,956 15,911
-------- --------
Total assets $240,496 $236,342
-------- --------
-------- --------
LIABILITIES AND STOCKHOLDERS' EQUITY
-------------------------------------
Current liabilities:
Accounts payable and accrued liabilities $ 19,125 $ 15,561
Accrued income taxes 4,928 5,291
-------- --------
Total current liabilities 24,053 20,852
Deferred income taxes 1,198 1,198
Other long-term liabilities 2,852 3,495
Minority interest 3,166 3,118
Common stock, $.16 2/3 par value 9,173 9,164
Capital in excess of par value 201,996 201,784
Retained earnings 1,357 499
Other (3,299) (3,768)
-------- --------
Total liabilities and stockholders' equity $240,496 $236,342
-------- --------
-------- --------
See accompanying notes to consolidated condensed financial statements.
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<TABLE>
PARKER DRILLING COMPANY AND SUBSIDIARIES
CONSOLIDATED CONDENSED STATEMENTS OF OPERATIONS
(Dollars in Thousands Except Per Share Amounts)
(Unaudited)
<CAPTION>
Three Months Ended Six Months Ended
February 28, February 28,
------------------- -------------------
1994 1993 1994 1993
------- -------- ------- -------
<S> <C> <C> <C> <C>
Revenue:
Drilling contracts $39,694 $23,817 $79,090 $46,558
Other 1,038 1,489 1,685 2,675
------- ------- ------- -------
Gross operating revenue 40,732 25,306 80,775 49,233
------- ------- ------- -------
Operating expense:
Drilling 28,307 15,815 54,539 29,565
Other 1,050 1,295 1,807 2,276
Depreciation, depletion and
amortization 5,067 5,157 9,989 10,387
General and administrative 7,471 7,472 13,609 13,591
------- ------- ------- -------
41,895 29,739 79,944 55,819
------- ------- ------- -------
Operating income (loss) (1,163) (4,433) 831 (6,586)
------- ------- ------- -------
Other income and (expense):
Interest expense (4) (18) (7) (39)
Interest income 198 408 555 805
Other income (expense) - net 392 (378) 432 (528)
------- ------- ------- -------
586 12 980 238
------- ------- ------- -------
Income (loss) before
income taxes (577) (4,421) 1,811 (6,348)
------- ------- ------- -------
Income tax expense 173 550 953 1,150
------- ------- ------- -------
Net income (loss) (750) (4,971) 858 (7,498)
------- ------- ------- -------
Dividends on preferred stock - 3 - 6
------- ------- ------- -------
Income (loss) applicable
to common stock $ (750) $(4,974) $ 858 $(7,504)
------- ------- ------- -------
------- ------- ------- -------
Earnings (loss) per share,
primary and fully diluted $ (.01) $ (.09) $ .02 $ (.14)
------- ------- ------- -------
Number of common shares ------- ------- ------- -------
used in computing earnings
(loss) per share:
Primary 54,223,674 52,690,022 54,539,402 52,618,052
---------- ---------- ---------- ----------
---------- ---------- ---------- ----------
Fully diluted 54,223,674 52,690,022 54,539,402 52,618,052
---------- ---------- ---------- ----------
---------- ---------- ---------- ----------
See accompanying notes to consolidated condensed financial statements.
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<TABLE>
PARKER DRILLING COMPANY AND SUBSIDIARIES
CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOWS
Increase (Decrease) in Cash and Cash Equivalents
(Dollars in Thousands)
(Unaudited)
<CAPTION>
Six Months Ended
February 28,
--------------------
1994 1993
------- -------
<S> <C> <C>
Cash flows from operating activities:
Net income (loss) $ 858 $(7,498)
Adjustments to reconcile net income (loss)
to net cash provided by operating activities:
Depreciation, depletion and amortization 9,989 10,387
Expenses not requiring cash 1,513 2,341
Change in operating assets and liabilities (11,536) 7,431
Other-net (495) (859)
------- -------
Net cash provided by operating activities 329 11,802
------- -------
Cash flows from investing activities:
Capital expenditures (23,592) (2,620)
Proceeds from the sale of equipment 892 5,245
Decrease (increase) in short-term and
long-term investments 24,241 (14,368)
Other-net - (107)
------- -------
Net cash provided (used) by investing
activities 1,541 (11,850)
------- -------
Cash flows from financing activities:
Principal payments under debt obligations - (406)
Other-net (304) (421)
------- -------
Net cash provided (used) by financing
activities (304) (827)
------- -------
Net increase (decrease) in cash and cash equivalents 1,566 (875)
Cash and cash equivalents at
beginning of period 12,570 13,288
------- -------
Cash and cash equivalents at
end of period $14,136 $12,413
------- -------
------- -------
Supplemental disclosure:
Interest paid $ 7 $ 24
Taxes paid $ 1,316 $ 1,442
See accompanying notes to consolidated condensed financial statements.
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PARKER DRILLING COMPANY AND SUBSIDIARIES
NOTES TO UNAUDITED CONSOLIDATED CONDENSED FINANCIAL STATEMENTS
1. In the opinion of the Company, the accompanying unaudited consolidated
condensed financial statements reflect all adjustments (of a normally
recurring nature) which are necessary for a fair presentation of (1) the
financial position as of February 28, 1994 and August 31, 1993, (2) the
results of operations for the three and six months ended February 28, 1994
and February 28, 1993, and (3) cash flows for the six months ended
February 28, 1994 and February 28, 1993. Results for the three and six
months ended February 28, 1994, are not necessarily indicative of the
results which will be realized for the year ending August 31, 1994. The
year-end consolidated condensed balance sheet data was derived from
audited financial statements, but does not include all disclosures
required by generally accepted accounting principles. The financial
statements should be read in conjunction with the Company's Form 10-K for
the year ended August 31, 1993.
2. Earnings per common share is based on the weighted average number of
common shares and common share equivalents outstanding during the period.
Common shares granted under the 1969 Key Employee Stock Grant Plan, 1980
Incentive Career Stock Plan and the 1991 Stock Grant Plan are issued and
outstanding but are not considered in the computation of weighted average
shares outstanding until the restrictions lapse. However, they are
considered common stock equivalents.
3. A former employee ("Plaintiff") was injured while working for the Company
on a rig owned and operated by another firm ("Defendant"). The Plaintiff
was granted an award totaling $6.75 million from the Defendant. Although,
the Company provided a defense for the Defendant pursuant to the indemnity
provision in the contract between the parties, the Company is currently in
litigation to determine the liability of the Company to indemnify the
Defendant due to the findings by the jury as to the conduct of the
Defendant's agents that caused the injury to the Plaintiff. Pending
resolution of the liability issue, the Company and the Defendant entered
into a non-binding funding arrangement whereby in March 1994 each party
funded $3.375 million of the award without prejudice to their respective
legal positions. Management believes that the Company is not legally
obligated to fund the award. However, if the Company is liable,
management believes it has adequate insurance to recover the majority of
any loss.
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Independent Accountants' Report
To the Board of Directors and Shareholders
Parker Drilling Company
We have reviewed the consolidated condensed balance sheet of Parker
Drilling Company and subsidiaries as of February 28, 1994, and the related
consolidated condensed statements of operations for the three and six month
periods ended February 28, 1994 and 1993 and consolidated condensed statements
of cash flows for the six month periods ended February 28, 1994 and 1993.
These financial statements are the responsibility of the Company's management.
We conducted our review in accordance with standards established by the
American Institute of Certified Public Accountants. A review of interim
financial information consists principally of applying analytical procedures
to financial data and making inquiries of persons responsible for financial
and accounting matters. It is substantially less in scope than an audit
conducted in accordance with generally accepted auditing standards, the
objective of which is the expression of an opinion regarding the financial
statements taken as a whole. Accordingly, we do not express such an opinion.
Based on our review, we are not aware of any material modifications that
should be made to the condensed consolidated financial statements referred to
above for them to be in conformity with generally accepted accounting
principles.
We have previously audited, in accordance with generally accepted auditing
standards, the consolidated balance sheet as of August 31, 1993, and the
related consolidated statements of operations, redeemable preferred stock and
stockholders' equity and cash flows for the year then ended (not presented
herein); and in our report, dated October 14, 1993, we expressed an
unqualified opinion on those consolidated financial statements. In our
opinion, the information set forth in the accompanying condensed consolidated
balance sheet as of August 31, 1993, is fairly stated in all material respects
in relation to the consolidated balance sheet from which it has been derived.
COOPERS & LYBRAND
Tulsa, Oklahoma
April 11, 1994
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MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
RESULTS OF OPERATIONS
- ---------------------
Second Quarter of Fiscal 1994 Compared with Second Quarter of Fiscal 1993
The Company experienced a net loss of $.7 million for the second quarter
of fiscal 1994, compared to a net loss of $5.0 million for the same period in
fiscal 1993. The primary reason for the decline in net loss was a $3.4
million increase in drilling margin over the second quarter of fiscal 1993.
Drilling revenue in the second quarter of fiscal 1994 was $39.7 million,
an increase of $15.9 million over the second quarter of fiscal 1993.
International utilization in the second quarter of fiscal 1994 was 58 percent
compared to 36 percent in the second quarter of fiscal 1993, and overall
utilization increased to 37 percent from 25 percent.
Drilling revenue from operations in Africa, the Middle East and
Commonwealth of Independent States ("CIS") increased a combined $4.6 million
in the second quarter of fiscal 1994 when compared to the second quarter of
fiscal 1993. The increase was in part due to two workover rigs that began
operating in the Russian Republic in the fourth quarter of fiscal 1993. These
rigs were released during the second quarter of fiscal 1994. The Company had
no operations in the Russian Republic in the second quarter of fiscal 1993.
In addition, the Company entered a new market in the fourth quarter of fiscal
1993 when it obtained a labor contract with a major customer in the country of
Kazakhstan.
International drilling revenue from operations in Asia and the Pacific
during the second quarter of fiscal 1994 increased $6.9 million compared to
the same quarter of fiscal 1993. The primary reasons for the increase were
the start-up of operations in the Philippines, another new market for the
Company, and the resumption of operations in Pakistan, both during the first
quarter of fiscal 1994. Also contributing to the increase was higher
utilization in Papua New Guinea in the second quarter of fiscal 1994 versus
the second quarter of fiscal 1993.
- 7 -
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RESULTS OF OPERATIONS (continued)
- ---------------------
Western Hemisphere international drilling revenue increased $2.8 million
from the second quarter of fiscal 1993. A decline in revenue from operations
in Colombia, the result of a decrease in utilization, was more than offset by
revenue from operations in Argentina. The Company reentered the Argentina
drilling market during the fourth quarter of fiscal 1993. Domestic drilling
revenue increased $1.5 million as domestic utilization increased to 18 percent
in the second quarter of fiscal 1994 from 16 percent in the second quarter of
fiscal 1993. The Company has been notified by its customer that the Company's
specialized arctic rig will be released from its contract during the third
quarter of fiscal 1994. Management forecasts this arctic rig will begin
operations again for this customer in the second quarter of fiscal 1995.
Management anticipates increased utilization in international operations will
offset the decline of drilling revenue and drilling margin resulting from the
release of this rig.
Drilling margins did not increase in proportion to the increase in
drilling revenue due to start-up costs associated with putting additional rigs
to work in Argentina. In addition, areas of newly established international
operations were not initially as profitable as operations in areas where the
Company has been active for an extended period.
Depreciation expense in the second quarter of fiscal 1994 was consistent
with the second quarter of fiscal 1993. Management anticipates, however, that
depreciation expense for the third and fourth quarter of fiscal 1994 will
exceed the depreciation expense for the corresponding quarters of fiscal 1993
due to the increased level of capital expenditures during the current year.
General and administrative expense for the second quarter of fiscal 1994
remained consistent with the second quarter of fiscal 1993, even with the
increase in overall utilization. Other income and expense increased $.6
million due primarily to an increase in gains on dispositions of fixed assets
over the second quarter of fiscal 1993. Income tax expense, consisting
primarily of foreign income taxes, decreased $.4 million due primarily to the
reversal of an accrual in a country where the company received a favorable tax
treatment of earnings from prior years' operations.
First Six Months of Fiscal 1994 Compared with First Six Months of Fiscal 1993
The Company's net income of $.9 million for the first six months of fiscal
1994 represented an $8.4 million improvement over the same period of fiscal
1993. The improvement was primarily attributable to increased drilling
revenue and drilling margin for the first six months of fiscal 1994.
Drilling revenue of $79.1 million for the first six months of fiscal 1994
was up $32.5 million from the first six months of fiscal 1993 as overall
utilization increased to 37 percent from 24 percent. International
utilization for the first six months of fiscal 1994 was 60 percent compared to
36 percent for the same period of fiscal 1993.
- 8 -
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RESULTS OF OPERATIONS (continued)
- ---------------------
International drilling revenue from operations in Africa, the Middle East
and CIS increased $11.6 million over the first six months of fiscal 1993. The
reasons for the increase in revenue included the operation of two workover
rigs in the Russian Republic and a one-rig contract in the Congo, both areas
that had no operations during the first six months of fiscal 1993. The two
workover rigs in the Russian Republic were released during the second quarter
of fiscal 1994 and the rig that was operating in the Congo has also been
released and is currently being marketed in Argentina. Also contributing to
the increase in revenue was a labor contract for a major customer entered into
in the fourth quarter of fiscal 1993 in the country of Kazakhstan.
International drilling revenue from operations in Asia and the Pacific
increased $11.8 million. The increase was primarily the result of the
operation of two geothermal rigs in the Philippines, the resumption of
operations in Pakistan during the first quarter of fiscal 1994 and increased
utilization in Papua New Guinea.
Western Hemisphere international drilling revenue increased $6.1 million
as operations in Argentina and increased utilization in Peru and Ecuador more
than offset a decline in revenue from operations in Colombia resulting from
decreased utilization in that country. Domestic drilling revenue increased
$3.0 million as domestic utilization improved to 18 percent for the first six
months of fiscal 1994 from 14 percent for the first six months of fiscal 1993.
Depreciation expense decreased $.4 million for the first six months of
fiscal 1994. However, as previously discussed in the second quarter
comparison, management anticipates depreciation expense for the last six
months of fiscal 1994 to be greater than the last six months of fiscal 1993.
Other income (loss) increased $.7 million due primarily to a $.9 million
adjustment of a prior years worker's compensation liability recorded in the
first quarter of fiscal 1993.
LIQUIDITY AND CAPITAL RESOURCES
- -------------------------------
During the first six months of fiscal 1994, cash and other short-term
investments declined $22.7 million. The decline was caused by the Company
financing capital expenditures of $23.6 million primarily with existing cash
and short-term investments.
Capital expenditures for the first six months of fiscal 1994 included
expenditures for the acquisition and modification of seven drilling rigs.
Five rigs are currently under contract in Argentina for YPF, the Argentina
state owned oil company. Three of the rigs are currently operating with the
remaining two rigs anticipated to begin operations in the third quarter of
fiscal 1994. A sixth rig is scheduled to begin operations in Argentina in the
third quarter of fiscal 1994. The seventh rig is currently under contract in
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LIQUIDITY AND CAPITAL RESOURCES (continued)
- -------------------------------
Colombia and is also scheduled to begin operations in the third quarter of
fiscal 1994. Management currently forecasts capital expenditures for fiscal
1994 to be approximately $44.0 million. The increase in forecasted capital
expenditures over the $33.0 million, as reported in the Company's Form 10-K
for fiscal year 1993, reflects additional opportunities anticipated in
international markets. In the event the Company obtains contracts in addition
to those currently anticipated that would require the construction or purchase
of new or specialized rigs or significant modifications to existing rigs,
capital expenditures could increase further. Any significant increase in
capital expenditures would be subject to restrictions imposed on the Company
as specified below.
The Company has a credit agreement with two banks which provides for a
$15.0 million revolving credit facility, all of which was available for
drawdown as of February 28, 1994. The credit agreement, which expires in
September 1994, contains restrictions on annual capital expenditures and
certain senior and subordinated indebtedness which can be incurred by Parker
Drilling Company and certain subsidiaries designated in the credit agreement.
These designated subsidiaries comprise the operating subsidiaries through
which the Company performs the majority of its drilling operations. The
credit facility also limits payment of dividends on the Company's common stock
to the lesser of 40 percent of consolidated net income for the preceding
fiscal year, or $2.6 million. The remaining subsidiaries of the Company are
not a party to the credit facility and are able to make capital expenditures
and obtain independent financing from lenders that have no recourse to Parker
Drilling Company and the designated subsidiaries, subject only to an overall
limitation of indebtedness.
The restrictions in the credit agreement are not anticipated to restrict
growth or investment opportunities in the foreseeable future.
Management believes that the current level of cash and short-term
investments, together with cash generated from operations, should be
sufficient to meet the Company's immediate capital needs. However, in the
event the Company obtains additional contracts requiring further significant
capital expenditures, management believes the Company would likely meet both
short-term and long-term capital needs through a combination of cash generated
from operations, borrowings under the bank credit agreement and either equity
or long-term debt financing.
OTHER MATTERS
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The Company is currently involved in litigation as discussed in Note 3 of
Notes to Unaudited Consolidated Condensed Financial Statements.
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PART II. OTHER INFORMATION
Item 6. Exhibits and Reports on Form 8-K
(a)Exhibits:
Exhibit 10(a) Amendment dated as of December 12, 1993, to the Credit
Agreement, dated as of September 24, 1992, between Morgan
Guaranty Trust Company of New York, Internationale
Nederlanden Bank N.V. and Parker Drilling Company.
Exhibit 15 Letter re Unaudited Interim Financial Information
(b)Reports on Form 8-K - There were no reports on Form 8-K filed
during the six months ended February 28, 1994.
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
Parker Drilling Company
-----------------------
Registrant
Date: April 11, 1994
By: /s/James J. Davis
-----------------------------
James J. Davis
Vice President and
Chief Financial Officer
By: /s/Randy Ellis
-----------------------------
Randy Ellis
Controller and
Chief Accounting Officer
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Exhibit 15
April 11, 1994
Securities and Exchange Commission
450 Fifth Street, N.W.
Washington, D.C. 10549
Re: Parker Drilling Company
Registration on Form S-8 and S-3
We are aware that our report dated April 11, 1994, on our review of the
interim financial information of Parker Drilling Company for the period ended
February 28, 1994, and included in this Form 10-Q is incorporated by reference
in the Company's registration statements on Form S-8 (File No. 2-87944, 33-
24155 and 33-56698) and Form S-3 (File No. 33-61662). Pursuant to Rule 436(c)
under the Securities Act of 1933, this report should not be considered a part
of the registration statement prepared or certified by us within the meaning
of Section 7 and 11 of that Act.
COOPERS & LYBRAND
<PAGE>
Exhibit 10(a)
AMENDMENT dated as of December 12, 1993, to the Credit Agreement dated
as of September 24, 1992, (as heretofore amended, the "Agreement"), among
Parker Drilling Company, a Delaware corporation (the "Borrower"), Morgan
Guaranty Trust Company of New York ("Morgan") and Internationale Nederlanden
Bank N.V. ("ING") (individually referred to herein as a "Bank" and
collectively referred to as the "Banks").
WITNESSETH:
-----------
WHEREAS, the Borrower and the Banks are parties to the Agreement
referred to above; and
WHEREAS, the Borrower has requested that the Agreement be amended as
provided herein to clarify the definitions of Cash Equivalents and
acquisitions and to increase the limitation on investments, advances and loans
and the limitation on capital expenditures;
WHEREAS, the parties hereto have agreed to such amendment subject to the
terms contained herein;
NOW, THEREFORE, in consideration of the premises and the mutual
agreement herein contained, the Borrower and the Banks agree as follows:
1. AMENDMENT OF CASH EQUIVALENTS DEFINITION UNDER SUBSECTION 1.1.
The definition of Cash Equivalents is hereby amended by adding the following
language at the end,
"and (i) 7, 28, 35 and 49 day auction rate or re-marketed taxable or
tax-free securities of issuers of indebtedness rated "A" or better by
Moody's Investors Service, Inc. or "A" or better by Standard & Poor's
Corporation;"
2. AMENDMENT TO SUBSECTION 6.2. Subsection 6.2 is hereby amended by
deleting the following words in the last sentence:
"subsequent to the date of this Agreement."
3. AMENDMENT OF SUBSECTION 6.8. Subsection 6.8 is hereby amended by
deleting in subpart (i) "$30,000,000" and inserting in lieu thereof
"$50,000,000" and by adding a new subpart (iii) as follows:
"(iii) any other capital assets acquired with treasury stock or newly
issued stock in the Company"
4. EFFECTIVENESS. This Amendment shall become effective as of the
date first written above after being executed by the Borrow and the Banks.
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5. DEFINITIONS. Terms defined in the Agreement shall have their
defined meanings when used herein.
6. EFFECT OF AMENDMENT. Except as amended and modified by this
Amendment, the Agreement shall continue to be, and shall remain, in full force
and effect in accordance with its terms.
7. COUNTERPARTS. This Amendment may be signed in any number of
counterparts, each of which shall be an original, and all of which taken
together shall constitute a single agreement with the same effect as if the
signature thereto and hereto were upon the same instrument. This Amendment
shall become binding and enforceable upon the execution by all the parties
hereto as of the day and year first written above.
8. GOVERNING LAW. This Amendment shall be governed by, and construed
and interpreted in accordance with, the laws of the State of New York.
IN WITNESS WHEREOF, the parties have caused this Amendment to be
executed and delivered by their respective duly authorized officers as of the
date first above written.
PARKER DRILLING COMPANY
By: /s/I. E. Hendrix
--------------------------
Its: Vice President
MORGAN GUARANTY TRUST COMPANY
OF NEW YORK
By: /s/Bill Jenks
--------------------------
Its: Vice President
INTERNATIONAL NEDERLANDEN BANK N.V.
By: /s/John T. Catchpole
--------------------------
Its: Vice President
