UTI ENERGY CORP, 8-K, 1997-02-11

UTI ENERGY CORP
8-K, 1997-02-11
OIL & GAS FIELD SERVICES, NEC

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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549

FORM 8-K

CURRENT REPORT

PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

DATE OF REPORT: JANUARY 27, 1997

UTI ENERGY CORP.
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)

<TABLE>
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DELAWARE 001-12542 23-2037823
(STATE OR OTHER JURISDICTION (COMMISSION FILE NUMBER) (I.R.S. EMPLOYER IDENTIFICATION NO.)
OF INCORPORATION)
</TABLE>

485 DEVON PARK DRIVE, SUITE 112
WAYNE, PENNSYLVANIA 19087
(ADDRESS OF PRINCIPAL EXECUTIVE OFFICES) (ZIP CODE)

REGISTRANT'S TELEPHONE NUMBER, INCLUDING AREA CODE: (610) 971-9600

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ITEM 2: ACQUISITION OR DISPOSITION OF ASSETS

On January 27, 1997, pursuant to the terms and conditions of an Asset
Purchase Agreement dated as of December 31, 1996 (the "Asset Purchase
Agreement"), by and between UTI Energy Corp., a Delaware corporation (the
"Company"), and Quarles Drilling Corporation, an Oklahoma corporation
("Quarles"), the Company purchased the contract drilling assets (the "Quarles
Assets") of Quarles for a total purchase price of $16.2 million (the "Purchase
Price"), The Purchase Price was determined through arms-length negotiations
between the parties. The Quarles Assets, which were utilized in Quarles'
contract drilling business, consist of eight operating drilling rigs and one
stacked drilling rig and various equipment and rig components. The Company
intends to utilize the Purchased Assets in its existing contract drilling
operations.

In connection with the Company's acquisigtion of the Quarles Assets,
the Company retained Don Quarles, President of Quarles, as a consultant to the
Company.

Pursuant to the terms of the Asset Purchase Agreement, the Purchase
Price was paid utilizing $8.1 million in cash and 256,175 shares of Common Stock
having a value at the time the agreement was negotiated of $8.1 million, subject
to adjustment as described below. The cash portion of the Purchase Price was
funded with $4.1 million in borrowings under the Company's existing line of
credit (the "Line of Credit") with Mellon Bank, N.A. ("Mellon") and a new $4.0
million terms loan (the "Term Loan") with Mellon. The borrowings under the Line
of Credit and Term Loan bear interest at the bank's prime rate and are secured
by a pledge of certain of the Company's rigs, accounts receivable and inventory.

Under the terms of the Asset Purchase Agreement, Quarles is entitled
to receive additional shares of Common Stock in the event the average market
price (as defined in the Asset Purchase Agreement) of the Common Stock on the
date a registration statement covering the resale of the Common Stock issued to
Quarles is declared effective is less than $31.69 per share. The number of
additional shares will be equal to a number of shares sufficient to provide
Quarles with $8.1 million of Common Stock based on the average market price of
the Common Stock on such date. In the event the average market price of the
Common Stock is greater than $31.69 per share on such date, Quarles is required
to return a number of shares of Common Stock having a value (at such market
price) equal to one-half of the amount by which the market price of the shares
(at such market price) initially issued is greater than $8.1 million. The
Company has granted Quarles certain registration rights with respect to the
Common Stock issued in connection with its acquisition of the Quarles Assets.

ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS

* (a) Financial statements of business acquired.

* (b) Pro forma financial information.

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2.1 Asset Purchase Agreement dated December 31, 1996 (the "Asset
Purchase Agreement"), by and between UTI Energy Corp. and
Quarles Drilling Corporation. Pursuant to Item 601(b)(2) of
Regulation S-K, schedules and similar attachments to the Stock
Purchase Agreement have not been filed with this exhibit.
Schedule 1 contains a list of certain of the assets purchased
by the Company pursuant to the terms and conditions of the
Asset Purchase Agreement. Schedule 2.1(e)(1) contains a list
of drilling contracts which the Company had the right to
assume pursuant the terms and conditions of the Asset Purchase
Agreement. The Company agrees to furnish supplementaly any
omitted schedule to the Securities and Exchange Commission
upon request.

2.2 First Amendment to Asset Purchase Agreement dated as of
December 31, 1996, by and between UTI Energy Corp, Triad
Drilling Company and Quarles Drilling Corporation.

10.1 Second Amendment and Modification to the Mellon Line of Credit
dated August 15, 1996, by and among UTI Energy Corp., UTICO,
Inc., FWA Drilling Company, Inc., Triad Drilling Company,
Universal Well Services, Inc., USC, Incorporated and Viersen &
Cochran Drilling Company.

10.2 Third Amendment and Modification to the Mellon Line of Credit
dated January 23, 1997, by and among UTI Energy Corp., UTICO,
Inc., FWA Drilling Company, Inc., Triad Drilling Company,
Universal Well Services, Inc., USC, Incorporated and Viersen &
Cochran Drilling Company.

10.3 Loan and Security Agreement dated January 23, 1997, by and
among FWA Drilling Company, Inc., International Petroleum
Services Company, Universal Well Services, Inc., USC
Incorporated, the Company, UTICO, Inc., Viersen & Cochran
Drilling Company and Mellon Bank, N.A.

10.4 Amended and Restated Employment Agreement with Vaughn E. Drum
dated effective as of December 19, 1995.

10.5 Amended and Restated Employment Agreement with Vincent J.
Donahue dated effective as of December 19, 1995.

10.6 Amended and Restated Employment Agreement with Gerald J. Guz
dated effective as of December 19, 1995.

10.7 Amended and Restated Employment Agreement with Terry L. Pope
dated effective as of December 19, 1995.

10.8 Amended and Restated UTI Energy Corp. 1996 Employee Stock
Option Plan.

10.9 Stock Option Agreement between UTI Energy Corp. and Remy
Investors & Consultants Incorporated dated effective December
19, 1995.

10.10 $4.0 million Note dated January 23, 1997, by FWA, Drilling
Company, Inc., International Petroleum Services Company,
Universal Well Services, Inc., USC Incorporated, the Company,
UTICO, Inc., and Viesen & Cochran Drilling Company in favor
of Mellon Bank, N.A.

* To be filed by amendment. It is impracticable for the Company to
provide as of the date of this Form 8-K the required financial
statements and pro forma information relating to the assets purchased
from Quarles Drilling Corporation. Any such financial statements will
be filed by amendment within 60 days from the date this Form 8-K is
due.

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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 hereunto duly authorized.

UTI ENERGY CORP.

Dated: February 11, 1997 /s/ P. Blake Dupuis
-----------------------------
P. Blake Dupuis
Vice President

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EXHIBIT INDEX

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2.1 Asset Purchase Agreement dated December 31, 1996 (the "Asset
Purchase Agreement"), by and between UTI Energy Corp. and
Quarles Drilling Corporation. Pursuant to Item 601(b)(2) of
Regulation S-K, schedules and similar attachments to the Asset
Purchase Agreement have not been filed with this exhibit.
Schedule 1 contains a list of certain of the assets purchased
by the Company pursuant to the terms and conditions of the
Asset Purchase Agreement. Schedule 2.1(e)(1) contains a list
of drilling contracts which the Company had the right to
assume pursuant the terms and conditions of the Asset Purchase
Agreement. The Company agrees to furnish supplementally any
omitted schedule to the Securities and Exchange Commission
upon request.

2.2 First Amendment to Asset Purchase Agreement dated as of
December 31,1996, by and between UTI Energy Corp, Triad
Drilling Company and Quarles Drilling Corporation.

10.4 Amended and Restated Employment Agreement with Vaughn E. Drum
dated effective as of December 19, 1995.

10.5 Amended and Restated Employment Agreement with Vincent J.
Donahue dated effective as of December 19, 1995.

10.6 Amended and Restated Employment Agreement with Gerald J. Guz
Donahue dated effective as of December 19, 1995.

10.7 Amended and Restated Employment Agreement with Terry L. Pope
dated effective as of December 19, 1995.

10.8 Amended and Restated UTI Energy Corp. 1996 Employee Stock
Option Plan.

10.9 Stock Option Agreement between UTI Energy Corp. and Remy
Investors & Consultants Incorporated dated effective December
19, 1995.

10.10 $4.0 million Note dated January 23, 1997, by FWA, Drilling
Company, Inc., International Petroleum Services Company,
Universal Well Services, Inc., USC Incorporated, the Company,
UTICO, Inc. & Viersen Cockran Drilling Company in favor of
Mellon Bak, N.A.

</TABLE>

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EXHIBIT 2.1

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ASSET PURCHASE AGREEMENT

by and between

UTI ENERGY CORP.

and

QUARLES DRILLING CORPORATION

December 31, 1996

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TABLE OF CONTENTS

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PARTIES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1

RECITALS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1

ARTICLE I
CERTAIN DEFINITIONS . . . . . . . . . . . . . . . . . . . . . . . . 1

ARTICLE II
PURCHASE AND SALE OF ASSETS . . . . . . . . . . . . . . . . . . . . 4
2.1 Assets to be Purchased . . . . . . . . . . . . . . . . . . . 4
2.2 Excluded Assets . . . . . . . . . . . . . . . . . . . . . . 6
2.3 Assumed Liabilities . . . . . . . . . . . . . . . . . . . . 6
2.4 Limitation of Liabilities . . . . . . . . . . . . . . . . . 6
2.5 Limitation on Assignments . . . . . . . . . . . . . . . . . 7
2.6 Delivery . . . . . . . . . . . . . . . . . . . . . . . . . . 8

ARTICLE III
PURCHASE PRICE . . . . . . . . . . . . . . . . . . . . . . . . . . 8
3.1 Consideration for the Purchased Assets . . . . . . . . . . . 9
3.2 Allocation of Purchase Price . . . . . . . . . . . . . . . . 10

ARTICLE IV
THE CLOSING . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
4.1 Time and Place of Closing . . . . . . . . . . . . . . . . . 10
4.2 Deliveries by Seller . . . . . . . . . . . . . . . . . . . . 10
4.3 Deliveries by Buyer . . . . . . . . . . . . . . . . . . . . 10

ARTICLE V
REPRESENTATIONS AND WARRANTIES OF SELLER . . . . . . . . . . . . . 11
5.1 Organization and Existence . . . . . . . . . . . . . . . . . 11
5.2 Authority; Etc. . . . . . . . . . . . . . . . . . . . . . . 11
5.3 No Violations . . . . . . . . . . . . . . . . . . . . . . . 12
5.4 Ownership of Rigs . . . . . . . . . . . . . . . . . . . . . 12
5.5 Inventory . . . . . . . . . . . . . . . . . . . . . . . . . 12
5.6 Contracts . . . . . . . . . . . . . . . . . . . . . . . . . 13
5.7 Litigation . . . . . . . . . . . . . . . . . . . . . . . . . 13
5.8 Governmental Approval . . . . . . . . . . . . . . . . . . . 13
5.9 Compliance With Laws . . . . . . . . . . . . . . . . . . . . 14
5.10 Employees Matters . . . . . . . . . . . . . . . . . . . . . 14
5.11 Environmental Matters . . . . . . . . . . . . . . . . . . . 14
5.12 No Brokers . . . . . . . . . . . . . . . . . . . . . . . . . 16
5.13 Decrees, Etc. . . . . . . . . . . . . . . . . . . . . . . . 16
5.14 Performance Bonds; Letters of Credit . . . . . . . . . . . . 16
</TABLE>

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ARTICLE VI
REPRESENTATIONS AND WARRANTIES OF BUYER . . . . . . . . . . . . . . 17
6.1 Organization and Existence . . . . . . . . . . . . . . . . . 17
6.2 Authority; Etc. . . . . . . . . . . . . . . . . . . . . . . 17
6.3 Authorization for UTI Common Stock . . . . . . . . . . . . . 17
6.4 SEC Documents . . . . . . . . . . . . . . . . . . . . . . . 18
6.5 No Violations . . . . . . . . . . . . . . . . . . . . . . . 18
6.6 Governmental Approval . . . . . . . . . . . . . . . . . . . 19
6.7 Litigation . . . . . . . . . . . . . . . . . . . . . . . . . 19
6.8 No Brokers . . . . . . . . . . . . . . . . . . . . . . . . . 19
6.9 Buyer M.A.E. . . . . . . . . . . . . . . . . . . . . . . . . 19

ARTICLE VII
CONDITIONS TO THE OBLIGATIONS OF SELLER . . . . . . . . . . . . . . 19
7.1 Accuracy of Representations and Warranties . . . . . . . . . 19
7.2 Covenants and Agreements Performed . . . . . . . . . . . . . 19
7.3 Officer's Certificate . . . . . . . . . . . . . . . . . . . 19
7.4 Legal Opinion . . . . . . . . . . . . . . . . . . . . . . . 20
7.5 HSR Act . . . . . . . . . . . . . . . . . . . . . . . . . . 20
7.6 Escrow Agreement . . . . . . . . . . . . . . . . . . . . . . 20

ARTICLE VIII
CONDITIONS TO THE OBLIGATIONS OF BUYER . . . . . . . . . . . . . . 20
8.1 Accuracy of Representations and Warranties . . . . . . . . . 20
8.2 Covenants and Agreements Performed . . . . . . . . . . . . . 20
8.3 Officer's Certificate . . . . . . . . . . . . . . . . . . . 20
8.4 Legal Opinion . . . . . . . . . . . . . . . . . . . . . . . 20
8.5 HSR Act . . . . . . . . . . . . . . . . . . . . . . . . . . 20
8.7 No Adverse Change . . . . . . . . . . . . . . . . . . . . . 21
8.8 Diminution in Value of the Assets . . . . . . . . . . . . . 21
8.9 Financing by Buyer . . . . . . . . . . . . . . . . . . . . . 21
8.10 Employment Contract . . . . . . . . . . . . . . . . . . . . 21
8.11 Board Approval . . . . . . . . . . . . . . . . . . . . . . . 21
8.12 Escrow Agreement . . . . . . . . . . . . . . . . . . . . . . 21

ARTICLE IX
COVENANTS AND AGREEMENTS OF THE PARTIES BEFORE
RELATING TO AND SUBSEQUENT TO THE CLOSING . . . . . . . . . . . . . 21
9.1 Expenses . . . . . . . . . . . . . . . . . . . . . . . . . . 21
9.2 HSR Act Compliance . . . . . . . . . . . . . . . . . . . . . 21
9.3 Access . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
9.4 Conduct of Business and Preservation of Assets . . . . . . . 22
9.5 Litigation . . . . . . . . . . . . . . . . . . . . . . . . . 22
9.6 Certain Taxes . . . . . . . . . . . . . . . . . . . . . . . 22
9.7 Actions with Respect to Closing . . . . . . . . . . . . . . 22
9.8 Public Statements . . . . . . . . . . . . . . . . . . . . . 23
9.9 Continued Effectiveness of Representations and Warranties . 23
</TABLE>

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9.10 Performance Bonds . . . . . . . . . . . . . . . . . . . . . 23

ARTICLE X
REGISTRATION RIGHTS . . . . . . . . . . . . . . . . . . . . . . . . 24
10.1 Demand Rights . . . . . . . . . . . . . . . . . . . . . . . 24
10.2 Piggyback Rights . . . . . . . . . . . . . . . . . . . . . . 24
10.3 Procedure . . . . . . . . . . . . . . . . . . . . . . . . . 25
10.4 Indemnification . . . . . . . . . . . . . . . . . . . . . . 26
10.5 Termination . . . . . . . . . . . . . . . . . . . . . . . . 28

ARTICLE XI
TERMINATION . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28
11.1 Termination . . . . . . . . . . . . . . . . . . . . . . . . 28
11.2 Effect of Termination . . . . . . . . . . . . . . . . . . . 29

ARTICLE XII
EXTENT AND SURVIVAL OF REPRESENTATIONS,
WARRANTIES, COVENANTS AND AGREEMENTS;
INDEMNIFICATION . . . . . . . . . . . . . . . . . . . . . . . . . . 29
12.1 Scope of Representations of Seller . . . . . . . . . . . . . 29
12.2 Indemnification by Seller . . . . . . . . . . . . . . . . . 30
12.3 Indemnification by Buyer . . . . . . . . . . . . . . . . . . 30
12.4 Indemnification Procedure . . . . . . . . . . . . . . . . . 31
12.5 Survival . . . . . . . . . . . . . . . . . . . . . . . . . . 31
12.6 Limitation of Remedies . . . . . . . . . . . . . . . . . . . 31
12.7 Applicability of Indemnification Obligation . . . . . . . . 31

ARTICLE XIII
MISCELLANEOUS . . . . . . . . . . . . . . . . . . . . . . . . . . . 32
13.1 Notices . . . . . . . . . . . . . . . . . . . . . . . . . . 32
13.2 Entire Agreement . . . . . . . . . . . . . . . . . . . . . . 33
13.3 Amendments and Waiver; Rights and Remedies . . . . . . . . . 33
13.4 Governing Law . . . . . . . . . . . . . . . . . . . . . . . 33
13.5 Binding Effect; Assignment . . . . . . . . . . . . . . . . . 33
13.6 Counterparts . . . . . . . . . . . . . . . . . . . . . . . . 34
13.7 References . . . . . . . . . . . . . . . . . . . . . . . . . 34
13.8 Severability of Provisions . . . . . . . . . . . . . . . . . 34
13.9 Gender . . . . . . . . . . . . . . . . . . . . . . . . . . . 34
13.10 Descriptive Headings . . . . . . . . . . . . . . . . . . . . 34
</TABLE>

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ASSET PURCHASE AGREEMENT

This ASSET PURCHASE AGREEMENT (this "Agreement") is dated as of December
31, 1996, by and between UTI Energy Corp., a Delaware corporation ("Buyer"),
and Quarles Drilling Corporation, an Oklahoma corporation ("Seller");

WITNESSETH:

WHEREAS, Buyer desires to purchase the Purchased Assets (as hereinafter
defined) from Seller; and

WHEREAS, Seller desires to sell the Purchased Assets to Buyer in
exchange for the payment by Buyer of the Purchase Price (as hereinafter
defined) and the assumption by Buyer of the Assumed Liabilities (as hereinafter
defined);

NOW, THEREFORE, in consideration of the premises and the mutual terms,
covenants and conditions herein contained, and intending to be legally bound
hereby, the parties hereto hereby agree as follows:

ARTICLE I

CERTAIN DEFINITIONS

As used in this Agreement, the following terms have the following
respective meanings:

"Affiliate" means, as to the person specified, any person controlling,
controlled by or under common control with such person, with the concept of
control in such context meaning the possession, directly or indirectly, of the
power to direct or cause the direction of the management and policies of
another, whether through the ownership of voting securities, by contract or
otherwise.

"Agreement" has the meaning specified in the preamble.

"Applicable Environmental Laws" has the meaning specified in Section
5.11(j).

"Applicable Laws" has the meaning specified in Section 5.9.

"Assumed Liabilities" has the meaning specified in Section 2.3.

"Average Market Price" means the average closing sale price per share of
the UTI Common Stock, for the ten trading days immediately preceding the second
trading day prior to the Determination Date as reported by the American Stock
Exchange.

"Best Efforts" means a party's best efforts in accordance with
reasonable commercial practice and without the incurrence of unreasonable
expense.
<PAGE> 6
"Business Day" means a day on which national banks are generally open
for the transaction of business in Houston, Texas.

"Buyer" has the meaning specified in the preamble.

"Buyer Basket" has the meaning specified in Section 12.2.

"Buyer Designee" has the meaning specified in Section 13.5(b).

"Buyer MAE" shall have the meaning specified in Section 6.9.

"Cash Purchase Price" shall have the meaning specified in Section
3.1(a).

"Claims" has the meaning specified in Section 12.2.

"Closing" means the consummation of the transactions contemplated by
this Agreement.

"Closing Date" has the meaning specified in Section 4.1.

"Code" means the Internal Revenue Code of 1986, as amended.

"Commission" has the meaning specified in Section 10.3.

"Consent Required Contract" has the meaning specified in Section 2.5.

"Determination Date" means the earlier of (i) June 30, 1997, and (ii)
the date on which an effective registration statement filed under the
Securities Act with respect to the resale of the UTI Common Stock issuable to
the Seller hereunder is first declared effective by the Commission; provided,
however, if a registration statement is not filed prior to June 30, 1997 or
sales under a registration statement have been suspended in either case by
virtue of Buyer's right to delay filing or suspend sales set forth in the first
proviso of Section 10.1, the June 30, 1997 Determination Date shall be extended
until such time as the registration statement is filed or such suspension of
sales is lifted.

"Drilling Contract" has the meaning specified in Section 2.1(e)(i).

"Encumbrances" means liens, charges, pledges, options, mortgages,
security interests, claims, easements, rights-of-way, servitudes, title
defects, rights of third parties and other encumbrances of every type and
description, whether imposed by law, agreement, understanding or otherwise.

"ERlSA" means the Employee Retirement Income Security Act of 1974, as
amended.

"Escrow Agent" has the meaning specified in Section 3.1.

"Escrow Shares" has the meaning specified in Section 3.1.

2
<PAGE> 7
"Exchange Act" has the meaning specified in Section 6.4.

"Excluded Assets" has the meaning specified in Section 2.2.

"Excluded M.E.L. Assets" means those assets identified in the M.E.L.
Report as Oklahoma City yard assets or vehicles, except for those Oklahoma City
yard assets or vehicles that are specifically listed on Schedule 1 hereto as
assets that are included in the Purchased Assets.

"General Assignment" has the meaning specified in Section 4.2(a).

"Governmental Entity" means any court or tribunal in any jurisdiction
(domestic or foreign) or any public, governmental or regulatory body, agency,
department, commission, board, bureau or other authority or instrumentality
(domestic or foreign).

"hazardous material" has the meaning specified in Section 5.11(j).

"HSR Act" means the Hart-Scott-Rodino Antitrust Improvements Act of
1976, as amended, and the rules and regulations promulgated thereunder.

"Indemnified Party" has the meaning specified in Section 12.4.

"Indemnifying Party" has the meaning specified in Section 12.4.

"Inventory" has the meaning specified in Section 2.1(c).

"M.E.L. Report" means the M.E.L. Valuation Report dated July 22, 1996,
attached hereto.

"Nonassigned Contract" has the meaning specified in Section 2.4.

"Other Contract" has the meaning specified in Section 2.1(e)(ii)

"Permitted Encumbrances" means (i) Encumbrances for taxes, assessments
and governmental charges not yet due and payable or the validity of which are
being contested in good faith by appropriate proceedings; (ii) statutory liens
arising in the ordinary course of business relating to obligations as to which
there is no default on the part of Seller, excluding any mortgage; and (iii)
the express terms of the Drilling Contracts and Other Contracts; provided,
however, that at the Closing "Permitted Encumbrances" shall not include any
Encumbrances for taxes, assessments or governmental charges filed of record
against the Purchased Assets, or statutory liens filed of record against the
Purchased Assets.

"Proceedings" means all proceedings, actions, claims, suits,
investigations and inquiries by or before any arbitrator or Governmental
Entity.

"Purchased Assets" has the meaning specified in Section 2.

3
<PAGE> 8
"Purchase Price" shall mean $16,200,000.

"Retained Liabilities" has the meaning specified in Section 2.4.

"Rigs" has the meaning specified in Section 2.1(b).

"Securities Act" has the meaning specified in Section 9.11.

"Seller" has the meaning specified in the preamble.

"Seller Basket" has the meaning specified in Section 12.3.

"Seller MAE" means a single event, occurrence or fact that, together
with all other events, occurrences and facts that (i) would have, or might
reasonably be expected to have, (x) a material adverse effect on the condition,
business, prospects or operations of the Rigs or (y) a material adverse effect
on the ability of the Buyer to operate the Rigs after the date of Closing, (ii)
would create an Encumbrance on any of the Purchased Assets except for a
Permitted Encumbrance, (iii) results in a loss or damage to the Rigs (whether
or not covered by insurance) in an amount in excess of $250,000 or (iv) may
constitute a criminal violation of law involving a felony.

"Taxes" means all federal, state, local, foreign and other taxes,
charges, fees, duties, levies, imposts, customs or other assessments,
including, without limitation, all net income, gross income, gross receipts,
sales, use, ad valorem, transfer, franchise, profits, profit sharing, license,
lease, service, service use, value added, withholding, payroll, employment,
excise, estimated, severance, stamp, recording, occupation, premium, property,
windfall profits, or other taxes, fees, assessments, customs, duties, levies,
imposts, or charges of any kind whatsoever, together with any interest,
penalties, additions to tax, fines or other additional amounts imposed thereon
or related thereto, and the term "Tax" means any one of the foregoing Taxes.

"UTI Common Stock" means the common stock, $0.001 par value, of Buyer.

"UTI Shares" means the shares of UTI Common Stock issued to Seller
pursuant to this Agreement.

ARTICLE II

PURCHASE AND SALE OF ASSETS

2.1 Assets to be Purchased. Upon the terms and subject to the
conditions set forth in this Agreement, at the Closing, Seller shall sell,
assign, transfer, deliver and convey to Buyer, and Buyer shall purchase, free
and clear of any Encumbrances other than Permitted Encumbrances, all of the
assets (other than the Excluded M.E.L. Assets) used or useful in connection
with the land drilling rig business of Seller as more fully described in the
M.E.L. Report and in clauses (d) and (e) below (collectively, the "Purchased
Assets"). The Purchased Assets shall include:

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(a) the eight land drilling rigs currently marketed by Seller
described in the M.E.L. Report and all such drilling units' respective drilling
machinery and equipment (including, without limitation, floor tools and
blow-out preventers), engines, machinery, rigging, apparel, furniture,
computers and computer equipment on such units, fittings and equipment, pumps
and pumping equipment, spare components and parts, drill pipe, case barrels,
drill collars, heavy-weight drill pipe, racking, supporting inventory and
stores and all appurtenances thereto appertaining or belonging thereto
(collectively, the "Marketed Rigs");

(b) the equipment described in the M.E.L. Report, which
collectively constitutes the Seller's one stacked land drilling rig (the
"Stacked Rig," and, together with the Marketed Rigs, the "Rigs" and each a
"Rig");

(c) the stocks owned by Seller or any of their Affiliates
described in the M.E.L. Report (other than the Excluded M.E.L. Assets)
(collectively "Inventory"), as such Inventory may be reduced through
consumption thereof, or increased through replacement thereof or addition
thereto, in the ordinary course of the maintenance and operation of the Rigs
through the Closing Date;

(d) the following tangible and intangible assets used or held
for use in connection with the ownership, maintenance and operation of the
Rigs, to the extent assignable by law and Seller or its Affiliates have the
right to assign and transfer such assets:

(i) all records to be delivered to Buyer pursuant to Section
2.6; and

(ii) the certificates, licenses, permits, consents, operating
authorities, orders, exemptions, franchises, approvals, registrations
and other authorizations and applications therefor specifically
associated with the maintenance and operation of a Rig ("Permits"); and

(e) the benefit and burden subsequent to the Closing Date of:

(i) all drilling contracts and any amendments thereto for the
employment of the Rigs existing on the Closing Date (the "Drilling
Contracts"), including without limitation the Drilling Contracts
identified on Schedule 2.1(e)(i) hereto existing on the Closing Date;
provided, however, if the Drilling Contract is a turnkey contract, Buyer
may choose to not accept the benefit and burden of such Contract by
giving notice to such effect to Seller prior to Closing, and, to the
extent any turnkey Drilling Contract is not so assigned to and assumed
by Buyer, Buyer and Seller agree that Buyer will provide drilling
services, on a market dayrate basis, to Seller to enable Seller to
satisfy its obligations under the Drilling Contract; and

(ii) all other contracts to which Seller or any of its
Affiliates is a party relating to the ownership, maintenance and
operation of the Rigs existing on the Closing Date to the extent
described on Schedule 2.1(e)(ii) (the "Other Contracts").

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If requested by the Buyer prior to the Closing, the Purchased Assets shall be
conveyed by the Seller prior to the Closing to a newly formed wholly owned
Delaware subsidiary of Seller having no other assets or liabilities and the
Seller shall convey at the Closing to the Buyer all the stock of such
corporation free and clear of all Encumbrances. No other Person shall have any
rights with respect to such corporation and the transfer and assignment and all
matters relating thereto shall be satisfactory to the Buyer.

2.2 Excluded Assets. The Purchased Assets to be transferred by
Seller hereunder shall include only those described or referred to in Section
2.1, and no other assets or properties of Seller shall be transferred
hereunder. Without limiting the generality of the preceding sentence, the
Purchased Assets shall not include any (i) cash, accounts receivable, prepaid
expenses and deposits, (ii) any real estate or other interests in real estate,
including leases, of Seller, (iii) the Excluded M.E.L. Assets or (iv) claims
and rights under contracts not assigned to and assumed by Buyer hereunder and,
in the case of contracts that are assigned to and assumed by Buyer, claims and
rights thereunder to the extent, but only to the extent, that such claims and
rights relate to the ownership or operation of the Purchased Assets prior to
the Closing (collectively, the "Excluded Assets"). Notwithstanding the
foregoing, any claims or rights of Seller or any of its Affiliates under
warranties relating to the Purchased Assets given by third parties shall be
considered a Purchased Asset, to the extent transferrable.

2.3 Assumed Liabilities. As of the Closing Date, subject to Section
2.5, Buyer shall assume the obligations of Seller under the express written
terms of the Drilling Contracts and Other Contracts being assumed by Buyer to
the extent and only to the extent such obligations relate to the ownership,
operation and maintenance of the Rigs after the Closing, excluding any Retained
Liabilities (collectively, the "Assumed Liabilities").

2.4 Limitation of Liabilities. Buyer shall not assume or in any way
be liable or responsible for any liabilities or obligations of Seller or its
Affiliates except as specifically provided herein, it being expressly
acknowledged that it is the intention of the parties hereto that all
liabilities that Seller or its Affiliates has or may have in the future,
whether fixed or contingent, and whether known or unknown, not expressly
described in the definition of Assumed Liabilities shall be "Retained
Liabilities" and remain the liabilities of Seller and its Affiliates. Without
limiting the generality of the foregoing, except to the extent specifically
provided in Section 2.3, Buyer shall not assume, or take title to the Purchased
Assets subject to:

(a) any obligation or liability, including indemnification,
relating to the ownership, operation or maintenance of the Rigs or the
performance of the Drilling Contracts and Other Contracts prior to the Closing;

(b) Taxes relating to the ownership, operation or maintenance
of the Rigs, for any period ending on or prior to the Closing, any income (or
similar) Taxes of any Seller or its Affiliates on the sale of the Purchased
Assets and any Taxes or payments payable in connection with sale of the
Purchased Assets to Buyer as contemplated hereby;

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<PAGE> 11
(c) any liability or obligation of Seller or any of its
Affiliates under any note, bond or other instrument secured by the Purchased
Assets;

(d) any liability or obligation of Seller or any of its
Affiliates in respect of any express or implied representation, warranty,
agreement or guaranty made (or claimed to have been made) by Seller or any of
its Affiliates or imposed or asserted to be imposed by operation of law (except
obligations or liabilities imposed on Buyer by operation of law after the
Closing);

(e) any account payable to any Affiliate of Seller;

(f) any statutory liens accrued or existing at the time of
Closing on the Closing Date against the Purchased Assets;

(g) any violation by Seller or any of its Affiliates of or
default by Seller or any such Affiliate under any Applicable Laws, including,
without limitation, Applicable Environmental Laws, which affects the ownership
or operation of the Purchased Assets or results in any change in the Assumed
Liabilities, or any remedial obligation under any Applicable Environmental Law
arising out of or related to the ownership or operation of the Purchased Assets
prior to Closing; or

(h) any liability resulting from or relating to the employment
relationship between any Seller or its Affiliates and any of their present or
former employees or the termination of any such employment relationship with
any Seller or any of its Affiliates, including, without limitation, accrued
severance pay and other similar benefits, if any, and any claim filed on or
prior to the Closing Date or which may thereafter be filed by or on behalf of
any employee or former employee of Seller or its Affiliates relating to the
employment or termination of employment of any such employee by Seller or its
Affiliates, including, but not limited to, any claim for wrongful discharge,
breach of contract, unfair labor practice, employment discrimination,
unemployment compensation or workers' compensation.

2.5 Limitation on Assignments. Notwithstanding any other provision
hereof, this Agreement shall not constitute nor require an assignment to Buyer
of any Drilling Contract, Other Contract, Permit, license or other right if an
attempted assignment of the same without the consent of any party would
constitute a breach thereof or a violation of any law or any judgment, decree,
order, writ, injunction, rule or regulation of any Governmental Entity unless
and until such consent shall have been obtained. In the case of any such
Drilling Contract, Other Contract, Permit, license or other right that cannot
be effectively transferred to Buyer without such consent (a "Consent Required
Contract"), Seller agrees that between the date hereof and the Closing Date it
will use its Best Efforts to obtain or cause to be obtained the necessary
consents to the transfer of any Consent Required Contract. Buyer agrees to
cooperate and to cause any Buyer Designee to cooperate with Seller in obtaining
such consents and to enter into such arrangement of assumption as may be
reasonably requested by the other contracting party under a Consent Required
Contract. In the event that Seller shall have failed prior to the Closing Date
to obtain consents to the transfer of any Consent Required Contract and Buyer
shall have waived the conditions set forth in Section 8.6, the terms of this
Section 2.5 shall govern the transfer of the benefits of each such

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<PAGE> 12
contract. Seller and Buyer shall use their Best Efforts after the Closing Date
to obtain any required consent to the assignment to, and assumption by, Buyer
of each Consent Required Contract that is not transferred to Buyer at the
Closing (a "Nonassigned Contract"). With respect to the Nonassigned Contracts
and any of the Purchased Assets that are not assignable by the terms thereof or
consents to the assignment thereof cannot be obtained as provided herein, the
Purchased Assets shall be held by the Seller in trust for the Buyer and shall
be performed by the Buyer in the name of the Seller and all benefits and
obligations derived thereunder shall be for the account of the Buyer; provided,
however, that where entitlement of the Buyer to such Purchased Assets hereunder
is not recognized by any third party, the Seller shall, at the request of the
Buyer, enforce in a reasonable manner, at the cost of and for the account of
the Buyer, any and all rights of the Seller against such third party.

2.6 Delivery.

(a) Buyer shall be entitled to the records physically located
on the Rigs or at the location thereof on the Closing Date and relevant to the
Rigs.

(b) As promptly following the Closing as practicable, Seller
shall deliver or cause to be delivered to Buyer at the offices where such
records are located or such other location as mutually agreed, (i) a copy of
the operational and accident records, (ii) engineering drawings, designs,
schematics, blueprints, instruction manuals, flowsheets, models, maintenance
schedules and similar technical records, (iii) all regulatory certification and
documentation, all pertinent correspondence relating thereto, all technical
manuals relating to equipment on the Rigs and all equipment history files and
preventive maintenance data and (iv) all Drilling Contracts, Other Contracts
and all material correspondence and other records relating thereto.

(c) Seller shall provide personnel records related to any
employees of Seller or its Affiliates who become employed by Buyer or its
Affiliates after the Closing Date.

(d) Seller shall be entitled to retain all originals of its
corporate, financial, accounting, legal, tax and audit records.

(e) The Rigs shall be delivered on the Closing Date at such
locations as may be agreed upon by the parties as is where is as of the time of
delivery. Seller agrees that to the extent any of the Purchased Assets are at
the time of Closing located on property owned or leased by Seller or any of
Seller's Affiliates, Buyer may, for a period of 120 days, continue to have such
Purchased Assets stored at such locations after Closing without any additional
payments to Seller. Buyer shall be responsible for maintenance of all
insurance relating to such Purchased Assets from and after the Closing Date and
shall be responsible for all costs relating to the relocation of any of the
Purchased Assets from such locations.

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ARTICLE III

PURCHASE PRICE

3.1 Consideration for the Purchased Assets.

(a) At the Closing, Buyer shall pay to Seller the Purchase
Price by (i) delivering to Seller the amount of $8,100,000 (the "Cash Purchase
Price") in immediately available funds by confirmed wire transfer to a bank
account to be designated by Seller (such designation to occur no later than the
second business day prior to the Closing Date), and (ii) delivering stock
certificates representing 256,175 shares of UTI Common Stock (the "Escrow
Shares") to Liberty Bank & Trust Company of Oklahoma City or such other escrow
agent to be mutually agreed upon by Buyer and Seller at least ten days prior to
the Closing (the Escrow Agent"). All costs with respect to engagement of the
Escrow Agent for purposes of this Agreement shall be borne equally by Seller
and Buyer.

(b) The Escrow Shares shall be held by the Escrow Agent on
behalf of Seller and not distributed to Seller until after the Determination
Date and then only in accordance with the provisions of this Article 3. As
promptly as practical following the Determination Date, Buyer shall deliver to
the Escrow Agent a certificate setting forth the Average Market Price and facts
confirming the occurrence of the Determination Date if the Determination Date
is prior to June 30, 1997. A copy of this certificate shall be provided to
Seller.

(c) If the Average Market Price is less than $31.69, Buyer
shall, at its option, either (i) issue to Seller an additional number of shares
of UTI Common Stock (the "Additional Shares") equal to (x) $8.1 million divided
by the Average Market Price minus (y) the number of Escrow Shares or (ii) pay
to the Escrow Agent for distribution to the Seller an amount of cash equal to
the number of Additional Shares that would be issued pursuant to clause (i)
above multiplied by the Average Market Price. For example, if the Average
Market Price is $30.00, Buyer shall either (i) issue to Seller an additional
13,825 shares of UTI Common Stock (270,000 shares minus 256,175 shares) or (ii)
pay to the Escrow Agent for distribution to the Seller $414,750 (13,825 shares
times $30.00).

(d) If the Average Market Price is greater than $31.69, the
Escrow Agent shall return to Buyer free and clear of any rights of Seller a
number of the Escrow Shares equal to the product of (A) .50 times (B) the
excess of the number of Escrow Shares over the result of (x) $8.1 million
divided by (y) the Average Market Price. For example, if the Average Market
Price is $33.00, the Escrow Agent will return to Buyer 5,360 of the Escrow
Shares (.50 times (256,175 shares minus 245,455 shares)).

(e) All dividends and other distributions and payments
received by the Escrow Agent in respect of the Escrow Shares shall be paid to
the Seller to the extent and at the time the Seller receives the Escrow Shares
and all dividends and other distributions and payments received by the Escrow
Agent in respect of the Escrow Shares that are returned to Buyer shall be paid
to Buyer at the time such Escrow Shares are returned to Buyer.

(f) In the event there is a reclassification, stock split or
stock dividends or reverse stock split involving the UTI Common Stock, the
foregoing provisions of this

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Section 3.1 relating to the UTI Common Stock to be issued hereunder shall be
adjusted to give appropriate effect to such transaction.

(g) As additional consideration for the Purchased Assets, the
Buyer shall assume at Closing and shall thereafter perform the Assumed
Liabilities.

3.2 Allocation of Purchase Price. The Purchase Price shall be
allocated among the Purchased Assets in a manner to be specified by Buyer prior
to the Closing. After the Closing, Seller and Buyer shall cooperate with each
other in the preparation, execution and filing of (i) all information returns
and supplements thereto required to be filed with the Internal Revenue Service
by the parties under Section 1060 of the Code and the Treasury Regulations
promulgated thereunder relating to the allocation of the Purchase Price and
(ii) all similar filings required to be filed with respect to the transactions
contemplated by this Agreement with the Internal Revenue Service and other
appropriate taxing authorities.

ARTICLE IV

THE CLOSING

4.1 Time and Place of Closing. The Closing shall take place at the
offices of Fulbright & Jaworski L.L.P. at 9:00 a.m., local time, on the third
Business Day after the later to occur of (i) the satisfaction of the conditions
to the obligations of the parties set forth in Sections 7.5 and 8.5 and (ii)
receipt by Buyer of funds by Buyer sufficient to pay the Cash Purchase Price,
or at such other place, date or time as the parties may agree in writing. The
date on which the Closing is required to take place is herein referred to as
the "Closing Date."

4.2 Deliveries by Seller. At the Closing, Seller shall deliver the
following to Buyer:

(a) a duly executed General Conveyance, Assignment and Bill of
Sale and Transfer and Assumption of Liabilities (the "General Assignment") in
the form of Exhibit 4.2(a), together with such other bills of sale, assignments
and other instruments of transfer, assignment and conveyance as Buyer shall
reasonably request to vest in Buyer or a Buyer Designee good and marketable
title to the Purchased Assets;

(b) copies of any consents obtained as contemplated by Section
2.5; and

4.3 Deliveries by Buyer. At the Closing, Buyer shall deliver the
following to Seller:

(a) the Cash Purchase Price;

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<PAGE> 15
(b) a duly executed General Assignment and such other
instruments of transfer and assumption as Seller shall reasonably request in
order to cause an effective assignment to and assumption by Buyer of the
Drilling Contracts and Other Contracts as contemplated herein; and

(c) stock certificates representing the UTI Shares, which will
contain a restrictive legend substantially similar to the following:

"The securities represented by this certificate have not been
registered under the Securities Act of 1933 or the laws of any
state and may not be transferred in the absence of an effective
registration statement for the securities under the Securities
Act of 1933 and applicable state laws or an opinion of counsel
reasonably satisfactory to the Company that such registration is
not required."; and

(d) the certificate and opinion of counsel contemplated by
Sections 7.3 and 7.4, respectively.

ARTICLE V

REPRESENTATIONS AND WARRANTIES OF SELLER

Seller hereby represents and warrants to Buyer as follows:

5.1 Organization and Existence. Seller is a corporation duly
incorporated, validly existing and in good standing under the laws of the state
of its incorporation, with all necessary corporate power and authority to own
and lease the Purchased Assets and to carry on its business as such business is
currently conducted. Seller is duly qualified or licensed to transact business
as a foreign corporation and is in good standing in all jurisdictions in which
the character of the Purchased Assets or the nature of the business currently
conducted by it requires it so to be qualified or licensed unless the failure
so to qualify or be licensed would not reasonably be expected to have Seller
MAE.

5.2 Authority; Etc. Seller has all necessary corporate power and
authority to execute and deliver this Agreement and all agreements, instruments
and documents to be executed and delivered hereunder by Seller, to consummate
the transactions contemplated hereby and to perform all terms and conditions
hereof to be performed by it. The execution and delivery of this Agreement by
Seller and all agreements, instruments and documents to be executed and
delivered by Seller hereunder, the performance by Seller of all the terms and
conditions hereof to be performed by it and the consummation of the
transactions contemplated hereby have been duly authorized and approved by the
board of directors of Seller, and no other corporate proceedings of Seller are
necessary with respect thereto. All persons who have executed and delivered
this Agreement, and all persons who will execute and deliver the other
agreements, documents and instruments to be executed and delivered by Seller
hereunder, have been duly authorized to do so by all necessary actions on the
part of

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Seller. This Agreement constitutes, and each other agreement or instrument to
be executed by Seller hereunder, when executed and delivered by Seller, will
constitute, the legal, valid and binding obligation of Seller, enforceable
against it in accordance with its terms, except to the extent the
enforceability hereof and thereof may be limited by bankruptcy, insolvency,
moratorium, reorganization or other laws relating to or affecting creditors'
rights generally or by general principles of equity (regardless of whether such
enforceability is considered in a proceeding in equity or at law).

5.3 No Violations. The execution and delivery of this Agreement by
Seller, the fulfillment of and compliance by it with the terms and conditions
hereof and the consummation by it of the transactions contemplated hereby will
not:

(a) violate any of the terms of the certificate of
incorporation or bylaws (or the equivalent) of Seller;

(b) (i) result in a breach of or constitute a default under
(whether with notice or the lapse of time or both) any note, bond, mortgage,
loan agreement, indenture or other instrument evidencing borrowed money to
which Seller is a party or by which Seller is bound or to which any of the
Purchased Assets is subject which breach or default would reasonably be
expected to have Seller MAE or (ii) result in the creation of any Encumbrance
on any of the Purchased Assets, or otherwise give any person the right to
terminate any Drilling Contract, Permit or Other Contract assumed by Buyer; or

(c) to Seller's knowledge, violate any provision of any law,
statute, rule or administrative regulation or any judgment, order, injunction
or decree of any Governmental Entity applicable to or binding upon Seller, or
its assets, which violation with respect to the matters specified in paragraphs
(b) and (c) of this Section 5.3 would reasonably be expected to have a Seller
MAE.

5.4 Ownership of Rigs. Except for Encumbrances in favor Liberty Bank
& Trust Company of Oklahoma City that will be released at Closing (the
"Released Encumbrances"), Seller owns good and marketable title to the Rigs,
free and clear of all Encumbrances except for Permitted Encumbrances, and, upon
the Seller's execution and delivery of the General Assignment, Buyer will own
good and marketable title to the Rigs, free and clear of all Encumbrances
except for Permitted Encumbrances

5.5 Inventory. Except for the Released Encumbrances, Seller owns
good and marketable title to the Inventory reflected in the M.E.L. Report
(other than the Excluded M.E.L. Assets), as such Inventory may be reduced
through the consumption thereof, or increased through replacement thereof or
additions thereto, in the ordinary course of the maintenance and operation of
the Rigs through the Closing Date, free and clear of all Encumbrances except
for Permitted Encumbrances, and, upon Seller's execution and delivery of the
General Assignment, Buyer will own good and marketable title to the Inventory
reflected in the M.E.L. Report (other than the Excluded M.E.L. Assets), as such
Inventory may be reduced through the consumption thereof, or increased through
replacement thereof or additions thereto, in the ordinary course of the
maintenance and operation of the Rigs through the Closing Date, free and clear
of

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all Encumbrances except for Permitted Encumbrances and Encumbrances, if any,
created or permitted to be imposed by Buyer or a Buyer Designee.

5.6 Contracts. Seller has made available to Buyer for review
complete and correct copies of all Drilling Contracts and Other Contracts.
None of the Drilling Contracts or Other Contracts may be transferred to Buyer
without the consent of the other party to such Contract and such other
consents, if any, as may be noted on Schedule 2.1(e)(i) or 2.1(e)(ii) hereto.
All the Drilling Contracts and Other Contracts are valid, binding and in full
force and effect against Seller, as the case may be, and, to Seller's
knowledge, are valid, binding and in full force and effect against the other
parties thereto. As of the Closing Date, none of the Rigs will be subject to
any material agreement, contract or commitment of Seller or any of its
Affiliates other than the Drilling Contracts and Other Contracts. Neither
Seller nor any of its Affiliates is in default in any material respect, and no
notice of alleged default has been received by Seller or any of its Affiliates,
under any of the Drilling Contracts and Other Contracts, no other party thereto
is, to the knowledge of Seller or its Affiliates, in default thereunder in any
material respect, and, to the knowledge of Seller or its Affiliates, there
exists no condition or event which, with or without notice or lapse of time or
both, would constitute a material default under any of the Drilling Contracts
and Other Contracts by Seller, any of its Affiliates or any other party
thereto.

5.7 Litigation.

(a) There is no litigation and there are no Proceedings, suits
or investigations pending, instituted or, to the knowledge of Seller, overtly
threatened against any of the Purchased Assets or against any Seller or any of
its Affiliates and relating to the ownership, operation or maintenance of any
of the Purchased Assets before any Governmental Entity applicable to or binding
upon Seller or any of the Purchased Assets that (i) seeks injunctive relief,
(ii) if adversely determined would delay or prevent the consummation of the
transactions contemplated by this Agreement or (iii) would reasonably be
expected to have a Seller MAE.

(b) None of Seller or any of its Affiliates nor any of its
respective properties or assets is subject to any judicial or administrative
judgment, order, decree or restraint currently affecting the ownership,
maintenance and operation of the Purchased Assets in a manner that is material
and adverse to the ownership, maintenance and operation of the Purchased Assets
taken as a whole. Except as referred to on Schedule 5.7(b), Seller has not
received any notifications or charges in writing from any Governmental Entity
involving alleged violations of or alleged obligations to remediate under
occupational safety and health or water quality or other environmental matters
that materially and adversely affect the conduct by Seller of the ownership,
maintenance and operation of the Purchased Assets taken as a whole or that have
not been finally dismissed or otherwise disposed of.

5.8 Governmental Approval. No consent, approval, waiver, order or
authorization of, or registration, declaration or filing with, any Governmental
Entity is required to be obtained or made in connection with the execution and
delivery of this Agreement by Seller or the consummation by Seller of the
transactions contemplated hereby.

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5.9 Compliance With Laws. Seller is not in violation of or in
default under any applicable law, rule, regulation, code, governmental
determination, order, governmental certification requirement or other public
limitation that is not an Applicable Environmental Law (collectively,
"Applicable Laws") relating to the ownership, maintenance or operation of the
Purchased Assets, which violation or default materially and adversely affects
Seller's ownership, maintenance or operation (as presently conducted) of the
Purchased Assets, and no claim is pending or, to Seller's knowledge, overtly
threatened with respect to any such matters which if determined adversely to
Seller would have such effect.

5.10 Employees Matters.

(a) There are no collective bargaining or other labor union
agreements to which the Seller is a party or by which it is bound. To the
knowledge of the Seller, the Seller has not encountered any labor union
organizing activity or had any actual or threatened employee strikes, work
stoppages, slowdowns or walkouts.

(b) The Seller does not contribute to or have an obligation to
contribute to, and has not at any time within six years prior to the Closing
Date contributed to or had an obligation to contribute to, a multi-employer
plan within the meaning of Section 3(37) of ERISA.

(c) With respect to any employee benefit plan, within the
meaning of Section 3(3) of ERISA, which is sponsored, maintained or contributed
to, or has been sponsored, maintained or contributed to within six years prior
to the Closing Date, by the Seller or any corporation, trade, business or
entity under common control with the Seller, within the meaning of Section
414(b), (c) or (m) of the Code or Section 4001 of ERISA ("Commonly Controlled
Entity"), (i) no withdrawal liability, within the meaning of Section 4201 of
ERISA, has been incurred, which withdrawal liability has not been satisfied,
(ii) no liability to the Pension Benefit Guaranty Corporation has been incurred
by the Seller or any Commonly Controlled Entity, which liability has not been
satisfied, (iii) no accumulated funding deficiency, whether waived or not
waived, within the meaning of Section 302 of ERISA or Section 412 of the Code
has been incurred and (iv) all contributions, including installments, to such
plan required by Section 302 of ERISA and Section 412 of the Code have been
timely made.

(d) Buyer will not be obligated or liable with respect to any
employee benefit plan or agreement relating to the employees of Seller by
virtue of its employment of any of the employees of the Seller.

5.11 Environmental Matters.

(a) Seller has received no written notice of any investigation
or inquiry by any Governmental Entity under any Applicable Environmental Laws
(as defined below) relating to the ownership or operation of the Purchased
Assets. To the actual current knowledge of Seller, Seller has not disposed of
any hazardous material (as defined below) on any of the Purchased Assets and no
condition exists on any of the Purchased Assets which would subject Seller or
the Purchased Assets to any remedial obligations under any Applicable
Environmental Laws.

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(b) Except where the failure to do so would not have a Seller
MAE, Seller and its Affiliates have obtained and been in compliance with all of
the terms and conditions of all permits, licenses, and other authorizations
which are required under, and has complied with all other limitations,
restrictions, conditions, standards, prohibitions, requirements, obligations,
schedules, and timetables which are contained in all Applicable Environmental
Laws relating to the Purchased Asset.

(c) Neither Seller or any of its Affiliates nor, to the
knowledge of Seller, any prior owner or operator of the Purchased Assets, has
caused or allowed the generation, use, treatment, storage or disposal of
Hazardous Materials at any site or facility owned, leased or operated by any
Seller or its Affiliates or used in connection with the Purchased Assets except
in accordance with all Applicable Environmental Laws or except to the extent
the same would not have a Seller MAE.

(d) None of the Purchased Assets have been subject to the
release of any Hazardous Materials except to the extent that the same would not
have a Seller MAE.

(e) Seller has secured all environmental Permits necessary to
the operation of the Rigs and Seller is in compliance with such permits, except
to the extent any such noncompliance does not impose liability on Buyer or its
Affiliates.

(f) Seller has not received any notice, nor is it aware, of
any proposal to amend, revoke or replace any environmental Permit, or requiring
the issuance of any additional environmental Permit, necessary to operate the
Rigs.

(g) Seller has not received inquiry or notice nor does Seller
have any reason to suspect or believe that it will receive inquiry or notice of
any actual or potential proceedings, claims, lawsuits or losses related to or
arising under any environmental Law and related to the Purchased Assets.

(h) Seller is not currently operating or required to be
operating any of the Purchased Assets under any compliance order, schedule,
decree or agreement, any consent decree, order or agreement, or corrective
action decree, order or agreement issued or entered into under any
Environmental Law.

(i) The Seller and the Purchased Assets is to the best of
Seller's knowledge in compliance with all applicable limitations, restrictions,
conditions, standards, prohibitions, requirements and obligations established
under Environmental Laws except to the extent any such noncompliance would not
have Seller MAE.

(j) For purposes of this Agreement, "Applicable Environmental
Laws" means any and all Applicable Laws pertaining to (x) the control of any
potential pollutant or protection of the air, water or land, (y) solid, gaseous
or liquid waste generation, handling, treatment, storage, disposal or
transportation or (z) exposure to hazardous, toxic or other substances alleged
to be harmful. "Environmental Laws" shall include all such laws in effect in
any and all jurisdictions in which the Purchased Assets are located or in which
any Seller or its Affiliates has conducted operations using any of the
Purchased Assets, including, without limitation, the Clean Air Act, as amended,

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<PAGE> 20
the Comprehensive Environmental Response, Compensation and Liability Act of
1980, as amended, the Rivers and Harbors Act of 1899, as amended, the Federal
Water Pollution Control Act, as amended, the Occupational Safety and Health Act
of 1970, as amended, the Resource Conservation and Recovery Act of 1976, as
amended, the Safe Drinking Water Act, as amended, the Toxic Substances Control
Act, as amended, the Superfund Amendments and Reauthorization Act of 1986, as
amended, the Hazardous Materials Transportation Act, as amended, the Texas
Water Code, the Texas Solid Waste Disposal Act, and other environmental
conservation or protection laws. For purposes of this Agreement, the term
"hazardous material" means (i) any substance which is listed or defined as a
hazardous substance, hazardous constituent, or solid waste pursuant to any
Applicable Environmental Laws and (ii) petroleum (including crude oil and any
fraction thereof), natural gas and natural gas liquids.

5.12 No Brokers. Seller has not employed or authorized anyone to
represent it as a broker or finder in connection with the transactions
contemplated by this Agreement, and no broker or other person is entitled to
any commission or finder's fee from Seller in connection with such
transactions. Seller agrees to indemnify and hold harmless Buyer from and
against any and all losses, claims, demands, damages, costs and expenses,
including, without limitation, reasonable attorneys' fees and expenses, Buyer
may sustain or incur as a result of any claim for a commission or fee by a
broker or finder acting on behalf of Seller.

5.13 Decrees, Etc. No order, writ, injunction, decree, judgment,
award or determination of any court or Governmental Entity has been issued or
entered against Seller or any of its Affiliates which continues to be in effect
and affects the ownership or operation of the Purchased Assets.

5.14 Performance Bonds; Letters of Credit. There are no performance
or similar bonds or letters of credit currently posted by Seller or any of its
Affiliates for the purpose of operating the Rigs.

5.15 Certain Property on Rigs. Since November 22, 1996, the date of
completion of Buyer's inspection of the Rigs, subject to normal wear and tear
and consumption in the ordinary course of business, Seller has not removed or
permitted to be removed any tangible property from any Rig, except for any such
tangible property relocated from one Rig to another Rig or transferred to
Inventory.

5.16 Accredited Investor; Investment Purpose. Seller (i) is an
accredited investor as that term is defined in Regulation D promulgated under
the Securities Act, and (ii) is acquiring the UTI Shares for its own account,
for investment purposes and not with a view to, or for resale in connection
with, any distribution or public offering thereof within the meaning of the
Securities Act. Seller acknowledges that the issuance to Seller of the UTI
Shares has not been registered under the Securities Act or the securities laws
of any state and will contain an appropriate restrictive legend.

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<PAGE> 21
ARTICLE VI

REPRESENTATIONS AND WARRANTIES OF BUYER

Buyer hereby represents and warrants to Seller as follows:

6.1 Organization and Existence. Buyer is a corporation duly
incorporated, validly existing and in good standing under the laws of the state
of its incorporation, with all necessary corporate power and authority to own
and lease the assets it currently owns and leases and to carry on its business
as such business is currently conducted. Buyer is duly qualified or licensed
to transact business as a foreign corporation and is in good standing in all
jurisdictions in which the character of the assets currently owned or leased by
it or the nature of the business currently conducted by it requires it so to be
qualified or licensed unless the failure so to qualify or be licensed would not
reasonably be expected to have a material adverse effect on the business or
financial condition of Buyer and its subsidiaries taken as a whole.

6.2 Authority; Etc. Except for approval by the Board of Directors of
Buyer of this Agreement and the transactions contemplated hereby, Buyer has all
necessary corporate power and authority to execute and deliver this Agreement
and all agreements, instruments and documents to be executed and delivered
hereunder by Buyer, to consummate the transactions contemplated hereby and to
perform all terms and conditions hereof to be performed by it. Except for the
approval of the Board of Directors of Buyer of such matters, no corporate
proceedings of Buyer are necessary on the part of Buyer with respect the
execution and delivery of this Agreement by Buyer. Upon approval of this
Agreement by the Board of Directors of Buyer, all persons who have executed and
delivered this Agreement, and all persons who will execute and deliver the
other agreements, documents and instruments to be executed and delivered by
Buyer hereunder, will have been duly authorized to do so by all necessary
actions on the part of Buyer. This Agreement constitutes, and each other
agreement or instrument to be executed by Buyer hereunder, when executed and
delivered by Buyer, will constitute, the legal, valid and binding obligation of
Buyer, enforceable against it in accordance with its terms, except to the
extent the enforceability hereof and thereof may be limited by bankruptcy,
insolvency, moratorium, reorganization or other laws relating to or affecting
creditors' rights generally or by general principles of equity (regardless of
whether such enforceability is considered in a proceeding in equity or at law).

6.3 Authorization for UTI Common Stock. Except for approval by the
Board of Directors of Buyer of this Agreement and the transactions contemplated
hereby, including the issuance of the UTI Common Stock, Buyer has taken all
necessary corporate action to permit it to issue the number of shares of UTI
Common Stock required to be issued pursuant to the terms of this Agreement.
Subject to the provisions of Section 3.1, the shares of UTI Common Stock issued
pursuant to the terms of this Agreement will, when issued, be validly issued,
fully paid and nonassessable and not subject to preemptive rights. The UTI
Common Stock issuable in the Merger will, when issued, be listed on the
American Stock Exchange subject to official notice of issuance.

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<PAGE> 22
6.4 SEC Documents. Buyer has provided to Seller its Annual Report on
Form 10-K for the year ended December 31, 1995, Quarterly Reports on Form 10-Q
for the quarters ended March 31, 1996, June 30, 1996, and September 30, 1996,
and its proxy statement with respect to its Annual Meeting of Stockholders for
1996 (such documents collectively referred to herein as the "SEC Documents").
As of their respective dates, the SEC Documents complied in all material
respects with the requirements of the Securities Exchange Act of 1934, as
amended (the "Exchange Act"), and the rules and regulations of the Commission
promulgated thereunder applicable to such SEC Documents, and none of the SEC
Documents contained any untrue statement of a material fact or omitted to state
a material fact required to be stated therein or necessary in order to make the
statements therein, in light of the circumstances under which they were made,
not misleading. The consolidated financial statements of Buyer included in the
SEC Documents comply as to form in all material respects with applicable
accounting requirements and the published rules and regulations of the
Commission with respect thereto, have been prepared in accordance with
generally accepted accounting principles applied on a consistent basis during
the periods involved (except as may be indicated in the notes thereto) and
fairly present the consolidated financial position of Buyer and its
consolidated subsidiaries as of the dates thereof and the consolidated results
of their operations and cash flows for the periods then ended. Since September
30, 1996, other than as discussed in the SEC Documents, there has been no
material adverse change in the business of Buyer and its subsidiaries, taken as
a whole.

6.5 No Violations. The execution and delivery of this Agreement by
Buyer, the fulfillment of and compliance by it with the terms and conditions
hereof and the consummation by it of the transactions contemplated hereby will
not:

(a) violate any of the terms of the certificate of
incorporation or bylaws of Buyer;

(b) result in a breach of or constitute a default under
(whether with notice or the lapse of time or both) any note, bond, mortgage,
loan agreement, indenture or other instrument evidencing borrowed money to
which Buyer is a party or by which Buyer is bound or to which any of its assets
is subject or result in the creation of any Encumbrance on any of its assets,
which breach or default would reasonably be expected to have a material adverse
effect on Buyer's business or financial condition or the results of its
operations or on its ability to perform its obligations hereunder; or

(c) to Buyer's knowledge, violate any provision of any law,
statute, rule or administrative regulation or any judgment, order, injunction
or decree of any Governmental Entity applicable to or binding upon Buyer or any
of its subsidiaries, except that no representation is made as to the
application of any United States antitrust law or regulation to the
transactions contemplated by this Agreement, which violation with respect to
the matters specified in clauses (b) and (c) of this Section 6.3 would
reasonably be expected to have a material adverse effect on Buyer's business or
financial condition or the results of its operations or on its ability to
perform its obligations hereunder.

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<PAGE> 23
6.6 Governmental Approval. Except for required filings under the HSR
Act and as contemplated by Section 9.2 or set forth on Schedule 6.6, no
consent, approval, waiver, order or authorization of, or registration,
declaration or filing with, any Governmental Entity is required to be obtained
or made in connection with the execution and delivery, of this Agreement by
Buyer or the consummation by Buyer of the transactions contemplated hereby.

6.7 Litigation. There is no litigation and there are no Proceedings,
suits or investigations pending, instituted or, to the knowledge of Buyer
overtly threatened against Buyer or its subsidiaries that could reasonably be
expected to have a material adverse effect on the business or financial
condition of Buyer and its subsidiaries taken as a whole or that, if adversely
determined, would delay or prevent the consummation of the transactions
contemplated by this Agreement.

6.8 No Brokers. Buyer has not employed or authorized anyone to
represent it as a broker or finder in connection with the transactions
contemplated by this Agreement, and no broker or other person is entitled to
any commission or finder's fee from Buyer in connection with such transactions.
Buyer will indemnify and hold harmless Seller from and against any and all
losses, claims, demands, damages, costs and expenses, including, without
limitation, reasonable attorneys' fees and expenses, Seller may sustain or
incur as a result of any claim for a commission or fee by a broker or finder
acting on behalf of Buyer.

6.9 Buyer M.A.E. There has been no material adverse change in the
business, operations or financial condition of Buyer since September 30, 1996
(a "Buyer MAE").

ARTICLE VII

CONDITIONS TO THE OBLIGATIONS OF SELLER

The obligations of Seller to proceed with the Closing contemplated by
this Agreement are subject to the satisfaction, on or before the Closing Date,
of all the following conditions, any one or more of which may be waived, in
whole or in part, by Seller:

7.1 Accuracy of Representations and Warranties. Each representation
and warranty of Buyer contained in this Agreement shall be true and correct as
of the Closing Date with the same effect as though made on the Closing Date,
except as otherwise specifically contemplated by this Agreement.

7.2 Covenants and Agreements Performed. Buyer shall have complied on
or before the Closing Date in all material respects with each of its covenants
or agreements contained in this Agreement to be performed on or before the
Closing Date.

7.3 Officer's Certificate. Seller shall have received a certificate,
dated as of the Closing Date, of the President or a Vice President of Buyer
certifying as to the matters specified in Sections 7.1 and 7.2.

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<PAGE> 24
7.4 Legal Opinion. Seller shall have received from Fulbright &
Jaworski L.L.P., counsel for Buyer, an opinion dated the Closing Date, with
respect to the due authorization, execution, delivery and enforceability of
this Agreement in customary form for such an opinion.

7.5 HSR Act. All required filings under the HSR Act shall have been
made as required and the waiting period (and any extension thereof) under the
HSR Act relating to the transactions contemplated hereby shall have expired or
been terminated without governmental objection thereto.

7.6 Escrow Agreement. Buyer and Seller shall have entered into an
Escrow Agreement with the Escrow Agent providing for the appointment of the
Escrow Agent to receive and distribute the Escrow Shares and cash, if any,
provided to it under Section 3.1.

ARTICLE VIII

CONDITIONS TO THE OBLIGATIONS OF BUYER

The obligations of Buyer to proceed with the Closing contemplated by
this Agreement are subject to the satisfaction, on or before the Closing Date,
of all the following conditions, any one or more of which may be waived, in
whole or in part, by Buyer:

8.1 Accuracy of Representations and Warranties. Each representation
and warranty of Seller contained in this Agreement shall be true and correct as
of the Closing Date with the same effect as though made on the Closing Date,
except as otherwise specifically contemplated by this Agreement.

8.2 Covenants and Agreements Performed. Seller shall have complied
on or before the Closing Date in all material respects with each of the
covenants or agreements of Seller contained in this Agreement to be performed
on or before the Closing Date.

8.3 Officer's Certificate. Buyer shall have received a certificate,
dated as of the Closing Date, of the President or a Vice President of Seller
certifying as to the matters specified in Sections 8.1 and 8.2.

8.4 Legal Opinion. Buyer shall have received from Drummond, Raymond
& Hinds, counsel for Seller, an opinion dated the Closing Date, with respect to
the due authorization, execution, delivery and enforceability of this Agreement
in customary form for such an opinion.

8.5 HSR Act. All required filings under the HSR Act shall have been
made as required and the waiting period (and any extension thereof) under the
HSR Act relating to the transactions contemplated hereby shall have expired or
been terminated without governmental objection thereto.

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<PAGE> 25
8.6 Drilling Contracts. Seller shall have obtained the consents to
the assignment of the Drilling Contracts and Other Contracts identified as
"Consent Required Contracts" on Schedule 2.1(e)(i) and 2.1(e)(ii) on terms
acceptable to Buyer.

8.7 No Adverse Change. There shall not have occurred any Seller MAE.

8.8 Diminution in Value of the Assets. Since the date of this
Agreement, there shall not have been an actual or constructive total loss of
any of the Rigs.

8.9 Financing by Buyer. Buyer shall have obtained financing
acceptable to it for the purchase of the Purchased Assets in an amount not less
than the Cash Purchase Price.

8.10 Employment Contract. Donald Quarles shall, effective as of the
Closing, have entered into an employment contract with Buyer on terms
satisfactory to Buyer.

8.11 Board Approval. The Board of Directors of Buyer shall have
approved this Agreement and the transactions contemplated hereby.

8.12 Escrow Agreement. Buyer and Seller shall have entered into an
Escrow Agreement with the Escrow Agent providing for the appointment of the
Escrow Agent to receive and distribute the Escrow Shares and cash, if any,
provided to it under Section 3.1.

ARTICLE IX

COVENANTS AND AGREEMENTS OF THE PARTIES BEFORE
RELATING TO AND SUBSEQUENT TO THE CLOSING

Seller and Buyer hereby covenant and agree as follows:

9.1 Expenses. Except as otherwise expressly provided in this
Agreement, each of the parties hereto shall assume and bear all expenses, costs
and fees incurred or assumed by such party in the preparation and execution of
this Agreement and in compliance with and performance of the agreements and
covenants contained in this Agreement, regardless of whether the transactions
contemplated hereby are consummated.

9.2 HSR Act Compliance. The parties shall comply with all applicable
provisions of the HSR Act. Seller and Buyer agree to cooperate with each other
and furnish all information to the other party that is necessary in connection
with the HSR Act filings required to be made by the parties hereto. Buyer and
Seller each agree to request early termination of any applicable waiting period
under the HSR Act. Nothing contained in the foregoing shall require Buyer to
divest of any assets or enter into any consent or similar decree.

9.3 Access. Between the date hereof and the Closing, Seller shall
give Buyer and its authorized representatives reasonable access, during regular
business hours and

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<PAGE> 26
upon reasonable advance notice, to the representatives and personnel of Seller
and to all Purchased Assets, including those books and records to be delivered
at Closing to Buyer pursuant to Section 2.6; provided that Seller shall have
the right to have a representative present at all times during any inspections,
interviews and examinations conducted at or on the offices, facilities or
properties of Seller or its Affiliates or representatives.

9.4 Conduct of Business and Preservation of Assets. Until the
Closing, Buyer and Seller agree to cooperate with each other to effect an
orderly transition of the ongoing operation of the Purchased Assets and Seller
shall use its respective Best Efforts to preserve, maintain and protect the
Purchased Assets. From and after the date of this Agreement and until the
Closing Date, without the prior express written consent of Buyer, which consent
shall not be unreasonably withheld or delayed, Seller will not, and Seller will
not permit any of its Affiliates to: (i) make any material change in the
conduct of the ongoing operation of the Rigs taken as a whole, (ii) enter into
any new drilling contracts with respect to the Rigs or enter into any other
contracts or agreements with respect to the Rigs other than in the ordinary
course of business, or amend, in any respect adverse to Seller or Buyer, any
Drilling Contract or Other Contract, (iii) transfer, sell or otherwise convey
or dispose of any of the Rigs or Inventory (other than the utilization of the
Inventory in the ordinary course of operating the Rigs consistent with past
practice), (iv) enter into any Other Contract that would obligate the Buyer in
any respect after the Closing, (v) waive any material rights under any Drilling
Contract or Other Contract, (vi) move any Rig to a different geographic region
or (vii) commit itself to do any of the foregoing.

9.5 Litigation. Until the Closing, Seller will promptly notify Buyer
of any action, suit, proceeding, claim or investigation which is overtly
threatened or commenced against Seller which relates to or affects the
Purchased Assets or this Agreement or the transactions contemplated hereby, and
Buyer will promptly notify Seller of any action, suit, proceeding, claim or
investigation which is overtly threatened or commenced against Buyer which
relates to and materially and adversely affects this Agreement or the
transactions contemplated hereby.

9.6 Certain Taxes. Buyer shall be liable for and shall pay all
sales, use, transfer, stamp, recording, value added or similar Taxes and
assessments resulting from the consummation of the transactions contemplated
hereby, and Buyer and Seller agree to cooperate to obtain all available
exemptions from such Taxes. Seller and Buyer agree to cooperate with each
other in order to reduce the amount of Taxes or other assessments imposed on or
charged to Seller or Buyer as a result of the consummation of the transactions
contemplated by this Agreement; provided, that neither Seller nor Buyer shall
be obligated to take any action that it determines in its sole discretion may
subject it to additional Taxes, liabilities or expenses.

9.7 Actions with Respect to Closing. Seller will use its Best
Efforts to obtain the satisfaction of the conditions to Closing applicable to
Seller set forth in Article VIII as soon as practicable. Buyer will use its
Best Efforts to obtain and to cause each Buyer Designee to obtain the
satisfaction of the conditions to Closing applicable to Buyer set forth in
Article VII as soon as practicable.

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9.8 Public Statements. Prior to making any news release or other
announcement concerning the transactions contemplated hereby, Buyer and shall
consult with each other regarding the proposed contents thereof (but no
approval thereof shall be required).

9.9 Continued Effectiveness of Representations and Warranties.
Seller and Buyer shall each use its Best Efforts to cause the representations
and warranties made by it herein to continue to be true and correct on and as
of the Closing Date as if made on and as of the Closing Date. Seller and Buyer
shall each advise the other promptly in writing of any condition or
circumstance occurring from the date hereof up to and including the Closing
Date that would cause the representations and warranties made by it herein to
become untrue in any material respect. Nothing contained in this Section 9.9
shall be construed as being inconsistent with or in derogation of Sections 12.1
or 12.5.

9.10 Performance Bonds. If Seller has posted a performance or other
similar bond or letter of credit in connection with Seller's ownership or
operation of the Rigs or its performance under a Drilling Contract, Buyer and
Seller shall cooperate with each other in order (i) for Seller to obtain the
release of any such bond and (ii) to the extent required, for Buyer to obtain a
substitute bond or letter of credit or to assume Seller's existing bond. Buyer
shall reimburse Seller for all costs incurred by Seller as a result of Seller's
leaving a performance or similar bond or letter of credit in place after the
Closing Date in order to permit Buyer to operate the Purchased Assets after the
Closing Date.

9.11 Action of Buyer Regarding Financing and Financial Statements.

(a) Buyer agrees to use reasonable efforts to secure financing for
the payment of the Cash Purchase Price.

(b) Seller agrees to cooperate with Buyer and to assist Buyer's
outside auditors in the preparation of any financial statements relating to the
Purchased Assets and Seller that may be reasonably requested by Buyer for
filing with the United States Securities and Exchange Commission in connection
with any filings that may be made by Buyer under the Securities Act of 1933
(the "Securities Act") or the Exchange Act. Such financial statements shall
consist of (i) such audited balance sheets and audited statements of
operations, cash flows and changes in equity together with the notes thereon
and (ii) such unaudited interim balance sheet and unaudited interim statements
of operations, cash flows and changes in equity, if any, in each case as Buyer
shall reasonably deem to be required by Buyer.

9.12 Reimbursement of Certain Mobilization Costs. In the event Seller
enters into a dayrate Drilling Contract between the date hereof and the Closing
Date for which Seller incurs "mobilization costs" and "startup costs" in excess
of the customer's reimbursement for mobilization and startup costs
("Unreimbursed Costs"), Buyer agrees to reimburse Seller for Buyer's pro rata
share of the Unreimbursed Costs determined based on the number of days work
performed under the Contract prior to Closing by Seller and the number of days
work performed under the Contract after the Closing by Buyer; provided,
however, Buyer's obligation to Seller pursuant to this provision shall

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<PAGE> 28
be limited to the amount of profit earned by Buyer on such Drilling Contract,
and such reimbursement shall be made at the end of the term of the Drilling
Contract. For purposes of this Section 9.12, mobilization costs shall be
limited to costs incurred specifically to move to and rig up at the location
specified in the Drilling Contract and startup costs is defined as unusual
expenditures made at the beginning of a Drilling Contract for items that are
used or consumed throughout the entire Drilling Contract.

ARTICLE X

REGISTRATION RIGHTS

10.1 Demand Rights. On one occasion after May 30, 1997, Seller may
request, pursuant to this Section 10.1, that Buyer register under the
Securities Act the UTI Shares issued to Seller at the Closing pursuant to a
non-underwritten offering to be made after June 30, 1997, having a period of
distribution not to exceed 120 days; provided, however, Buyer shall not be
obligated to prepare and file any registration statement pursuant to this
Section 10.1, or prepare or file any amendment or supplement thereto, and may
suspend sales under, at any time when Buyer reasonably believes that the filing
thereof at the time requested, or the offering of securities pursuant thereto,
would materially and adversely affect a pending or proposed public offering of
securities of Buyer, an acquisition, merger, recapitalization, consolidation,
reorganization or similar transaction relating to Buyer or negotiations,
discussions or pending proposals with respect thereto or require premature
disclosure of information not otherwise required to be disclosed to the
potential detriment of Buyer; provided, however, that such period of sale or
distribution shall resume after any such suspension for a number of days
necessary to keep such registration effective for permitted sales thereunder
for a term of 120 days. The filing of a registration statement, or any
amendment or supplement thereto, by Buyer may not be deferred, and the sale and
distribution of shares may not be suspended, in each case pursuant to the
foregoing provisions, for more than 60 days after the abandonment or
consummation (or the completion of the distribution of securities in the case
of a public offering) of any of the proposals or transactions described therein
or, in any event, for more than 120 days.

10.2 Piggyback Rights. If, at any time after the date hereof, Buyer
proposes to register under the Securities Act any shares of UTI Common Stock
for sale by it pursuant to an underwritten public offering of the UTI Common
Stock (except with respect to registration statements filed on Form S-4 or such
other forms as shall be prescribed under the Securities Act for the same
purposes as such form), it will at each such time, prior to the filing of any
such registration statement, give written notice to Seller of its intention so
to do, regardless of whether Seller has previously exercised piggyback
registration rights or demand rights as to any other shares of stock held by
it, and, upon the written request (which must specify the number of shares of
UTI Common Stock to participate in such underwritten offering) of Seller
delivered to Buyer within five days of receipt of Buyer's notice, Buyer will
use its best efforts to cause any UTI Shares as to which registration shall
have been so requested to be included in the shares to be covered by the
registration statement proposed to be filed by Buyer. Nothing contained in
this Section 10.2 shall, however, limit Buyer's right to cancel, postpone or
withdraw any such proposed registration for any reason. Any request by

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<PAGE> 29
Seller pursuant to this Section 10.2 to register UTI Shares for sale in the
underwriting shall be on the same terms and conditions as the shares of UTI
Common Stock to be registered and sold through underwriters under such
registration; provided, however, that as a condition to such inclusion Seller
shall execute an underwriting agreement acceptable to the underwriters and, if
requested, a custody agreement having such customary terms as the underwriters
shall request, including indemnification, and if the managing underwriter
determines and advises in writing that the inclusion in the underwriting of all
UTI Shares proposed to be included by Seller and any other shares of UTI Common
Stock sought to be registered by any other stockholder of Buyer exercising
rights comparable to those of Seller under this Agreement would, in its
reasonable and good faith judgment, interfere with the successful marketing of
the securities proposed to be registered for underwriting by Buyer or by any
holder of UTI Common Stock having the right to require Buyer to file a
registration statement to register such UTI Common Stock (the "Other Common
Stock"), then the number of UTI Shares and Other Common Stock requested to be
included in the underwriting shall be reduced pro rata among Seller and the
holders of Other Common Stock requesting such registration and inclusion in the
underwriting and may, in the determination of such managing underwriter and
consistent with pro rata reduction, be reduced to zero.

10.3 Procedure. If and whenever Buyer is required by the provisions
of this Warrant to use its best efforts to effect the registration of any UTI
Shares under the Securities Act, Buyer will, subject to the other provisions of
this Section 10:

(a) as expeditiously as reasonably practicable and in any case
within 30 days after demand therefor, prepare and file with the Securities and
Exchange Commission (the "Commission") a registration statement on the
appropriate form with respect to such UTI Shares and seek to cause such
registration statement to become and remain effective;

(b) as expeditiously as reasonably practicable, prepare and
file with the Commission such amendments and supplements to such registration
statement and the prospectus used in connection therewith as may be necessary
to keep such registration statement effective and to comply with the provisions
of the Securities Act with respect to the disposition of such UTI Shares
covered by such registration statement in accordance with the intended method
of distribution set forth in such registration statement;

(c) as expeditiously as reasonably practicable, furnish to
Seller such number of copies of prospectuses and preliminary prospectuses in
conformity with the requirements of the Securities Act, and such other
documents as Seller may reasonably request, in order to facilitate the public
sale or other disposition of such UTI Shares; provided, however, that the
obligation of Buyer to deliver copies of prospectuses or preliminary
prospectuses to Seller shall be subject to the receipt by Buyer of reasonable
assurances from Seller that it will comply with the applicable provisions of
the Securities Act and of such other securities laws as may be applicable in
connection with any use by it of any prospectuses or preliminary prospectuses;

(d) as expeditiously as practicable, use its best efforts to
register or qualify UTI Shares covered by such registration statement under
such other securities

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<PAGE> 30
laws of such United States jurisdictions as Seller shall reasonably request
(considering the nature and size of the offering) and do any and all other acts
and things which may be necessary or desirable to enable Seller to consummate
the public sale or other disposition in such jurisdictions of UTI Shares;
provided, however, that Buyer shall not be required to qualify to transact
business as a foreign corporation in any jurisdiction in which it would
otherwise not be required to be so qualified or to take any action which would
subject it to general service of process in any jurisdiction in which it is not
then so subject;

(e) bear all Registration Expenses (as defined below) in
connection with all registrations hereunder; provided, however, that all
Selling Expenses (as defined below) of UTI Shares and all fees and
disbursements of counsel for Seller in connection with each registration
pursuant to this Article 10 shall be borne by Seller. Expenses incurred by
Buyer in complying with this Article 10, including, without limitation: (i) all
registration and filing fees; (ii) all printing expenses; (iii) all fees and
disbursements of counsel for Buyer; (iv) all blue sky fees and expenses; and
(v) all fees and expenses of accountants for Buyer are herein referred to as
"Registration Expenses". All underwriting fees and discounts and brokerage and
selling commissions relating to UTI Shares to be registered for sale by Seller
and fees and expenses of the counsel for Seller and any underwriter's counsel
applicable to the sales by Seller in connection with any such registration are
herein referred to as "Selling Expenses"; and

(f) keep each registration pursuant to Section 10.1 hereof
effective for a period of up to 120 days or such shorter period of time until
the transfer or sale of all UTI Shares so registered has been completed.

10.4 Indemnification.

(a) In the event of a registration of any UTI Shares under the
Securities Act pursuant to this Article 10, Buyer will indemnify and hold
harmless Seller and any other Person, if any, who controls Seller within the
meaning of Section 15 of the Securities Act, against any losses, claims,
damages or liabilities, joint or several, to which Seller or such controlling
Person may become subject under the Securities Act or otherwise, insofar as
such losses, claims, damages or liabilities or actions in respect thereof arise
out of or are based upon any untrue statement or alleged untrue statement of
any material fact contained, on the effective date thereof, in any registration
statement under which such UTI Shares were registered under the Securities Act,
any preliminary prospectus distributed with the consent of Buyer or final
prospectus contained therein, or any amendment thereof or supplement thereto,
including all documents incorporated by reference therein, or arise out of or
are 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, and will reimburse Seller and each such controlling Person for
any legal or any other expenses reasonably incurred by them in connection with
investigating or defending any such loss, claim, damage, liability or action;
provided, however, that Buyer will not be liable in any such case to the extent
that any such loss, claim, damage or liability arises out of or is based upon
an untrue statement or alleged untrue statement or omission or alleged omission
made in such registration statement, such preliminary prospectus, such final
prospectus or such amendment or supplement, including all documents

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<PAGE> 31
incorporated by reference therein, in reliance upon and in conformity with
written information furnished to Buyer by or on behalf of Seller or a
controlling Person of Seller specifically for use in the preparation thereof.

(b) In the event of any registration of any UTI Shares under
the Securities Act pursuant to this Agreement, Seller indemnify and hold
harmless Buyer and each Person, if any, who controls Buyer within the meaning
of Section 15 of the Securities Act, each officer of Buyer who signs the
registration statement, each director of Buyer and each underwriter (if any)
and each Person who controls any underwriter (if any) within the meaning of
Section 15 of the Securities Act, against any and all such losses, claims,
damages, liabilities or actions which Buyer or such officer, director,
underwriter (if any) or controlling Person may become subject under the
Securities Act or otherwise, and will reimburse Buyer, each such officer,
director, underwriter (if any) and controlling Person for any legal or any
other expenses reasonably incurred by such party in connection with
investigating or defending any such loss, claim, damage, liability or action,
if (a) such loss, claim, damage, liability or action in respect thereof arises
out of or is based upon any untrue statement or alleged untrue statement of any
material fact contained in any such registration statement or any such
prospectus, or any amendment thereof 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, (b) any such statement or omission of a material fact was made in
reliance upon and in conformity with written information furnished to Buyer by
or on behalf of Seller specifically for use in connection with the preparation
of such registration statement or prospectus or (c) such loss, claim, damage,
liability or action in respect thereof arises out of or is based upon Seller's
failure to deliver any required prospectus or otherwise comply with applicable
laws regarding the same. In connection with any transaction contemplated by
Section 10.2 hereof, Seller also agrees to indemnify each such underwriter and
each Person who controls any such underwriter within the meaning of Section 15
of the Securities Act as may reasonably and customarily be requested by the
underwriters in connection with any underwritten offering of such UTI Shares.

(c) Promptly after receipt by any indemnified Person of notice
of any claim or commencement of any action in respect of which indemnity is to
be sought against an indemnifying Person pursuant to this Agreement, such
indemnified Person shall notify the indemnifying Person in writing of such
claim or of the commencement of such action, and, subject to provisions
hereinafter stated, in case any such action shall be brought against an
indemnified Person and such indemnifying Person shall have been notified of the
same, such indemnifying Person shall be entitled to participate therein, and,
to the extent it shall wish, to assume the defense thereof, with counsel
reasonably satisfactory to such indemnified Person, and after notice from the
indemnifying Person to such indemnified Person of its election to assume the
defense thereof, such indemnifying Person shall not be liable to such
indemnified Person in connection with the defense thereof; provided, however,
if there exists or will exist a conflict of interest which would make it
inappropriate in the reasonable judgment of the indemnified Person for the same
counsel to represent both the indemnified Person and such indemnifying Person
then such indemnified Person shall be entitled to retain its own counsel at the
expense of such indemnifying Person; provided further, however,

27
<PAGE> 32
the indemnifying Person shall not be required to pay for more than one separate
counsel for all of the indemnified Persons in addition to any local counsel.

10.5 Termination. If Rule 144 or Rule 145 as promulgated under the
Securities Act or any successor or similar rule or statute shall permit the
sale of UTI Shares in compliance with the conditions thereof and the provisions
thereof, the rights of Seller as to registration provided for in this Agreement
as to such UTI Shares shall terminate immediately.

ARTICLE XI

TERMINATION

11.1 Termination. This Agreement may be terminated and the
transactions contemplated hereby may be abandoned at any time prior to the
Closing:

(a) by mutual written consent of Buyer;

(b) by Buyer, if there shall be any statute, rule or
regulation that makes consummation of the transactions contemplated hereby
illegal or otherwise prohibited or a Governmental Entity shall have issued an
order, decree or ruling or taken any other action permanently restraining,
enjoining or otherwise prohibiting the consummation of the transactions
contemplated hereby, and such order, decree, ruling or other action shall have
become final and nonappealable;

(i) the Closing shall not have occurred by March 1, 1997
(provided that the right to terminate this Agreement under this clause
(i) shall not be available to Buyer if Buyer's failure to fulfill any of
its obligations under this Agreement or its misrepresentation or breach
of warranty hereunder has been the sole cause thereof); or

(ii) there has been a material breach by Seller of any covenant
or agreement, or a material inaccuracy of any representation or warranty
of any Seller, contained in this Agreement which has rendered the
satisfaction of any condition to the obligations of Buyer impossible and
such breach or inaccuracy has not been cured by Seller within five
Business Days after Seller's receipt of notice thereof from Buyer, or
waived by Buyer;

(iii) the Board of Directors of Buyer shall not have approved
this Agreement and the transactions contemplated hereby on or before
January 10, 1997 (provided that the right to terminate this Agreement
under this clause (iii) shall not be available to Buyer after January
17, 1997); or

(iv) there shall occur an event which results in or would
reasonably be expected to result in a Seller MAE.

28
<PAGE> 33
(d) by Seller, if

(i) the Closing shall not have occurred by March 1, 1997
(provided that the right to terminate this Agreement under this clause
(i) shall not be available to Seller if Seller's failure to fulfill any
of its obligations under this Agreement or its misrepresentation or
breach of warranty hereunder has been the sole cause thereof);

(ii) there has been a material breach by Buyer of any covenant
or agreement, or a material inaccuracy of any representation or warranty
of Buyer, contained in this Agreement which has rendered the
satisfaction of any condition to the obligations of Seller impossible
and such breach or inaccuracy has not been cured by Buyer within five
Business Days after Buyer's receipt of notice thereof from any Seller,
or waived by Seller;

(iii) at any time after January 10,1997, the Board of Directors
of Buyer shall not have approved this Agreement and the transactions
contemplated hereby (provided that the right to terminate this Agreement
under this clause (iii) shall not be available to Seller once the Board
of Directors of Buyer has approved this Agreement and the transactions
contemplated hereby); or

(iv) there shall have occurred a Buyer MAE.

11.2 Effect of Termination. In the event of the termination of this
Agreement pursuant to Section 11.1 by Buyer or Seller, written notice thereof
shall forthwith be given to the other party specifying the provision hereof
pursuant to which such termination is made, and this Agreement shall become
void and have no effect, and there shall be no liability hereunder on the part
of Buyer or Seller or any of their respective directors, officers, employees,
stockholders or representatives, except that the agreements contained in this
Section 11.2 and in Articles X and XII and Sections 5.12, 6.6 and 9.1 shall
survive the termination hereof. Nothing contained in this Section 11.2 shall
relieve any party from liability for damages actually incurred (excluding
consequential damages) for breach of any covenant or agreement, or for the
inaccuracy of any representation or warranty, contained herein.

ARTICLE XII

EXTENT AND SURVIVAL OF REPRESENTATIONS,
WARRANTIES, COVENANTS AND AGREEMENTS; INDEMNIFICATION

12.1 Scope of Representations of Seller. Except as and to the extent
set forth in this Agreement, the Deeds and the other documents, agreements and
instruments delivered in connection with the Agreement, Seller makes no other
representations or warranties, and disclaim all liability and responsibility
for any representation, warranty, statement or information made or communicated
(orally or in writing) to Buyer. WITHOUT LIMITING THE GENERALITY OF THE
FOREGOING, EXCEPT AS AND TO THE EXTENT SET FORTH IN THIS AGREEMENT, THE DEEDS
AND THE OTHER DOCUMENTS, AGREEMENTS AND INSTRUMENTS DELIVERED IN

29
<PAGE> 34
CONNECTION WITH THIS AGREEMENT, SELLER MAKES NO REPRESENTATION OR WARRANTY,
EITHER EXPRESS OR IMPLIED, AS TO THE MAINTENANCE, REPAIR, CONDITION, DESIGN,
WORKMANSHIP, SUITABILITY, UTILITY OR MARKETABILITY OF THE RIGS OR OTHER
PURCHASED ASSETS OR ANY PORTION THEREOF OR PROPERTY THEREON OR THE ABSENCE OF
ANY DEFECTS THEREIN, WHETHER LATENT OR PATENT, OR ANY OTHER MATERIALS OR
INFORMATION THAT MAY HAVE BEEN MADE AVAILABLE OR COMMUNICATED TO BUYER OR ITS
AGENTS, CONSULTANTS OR REPRESENTATIVES IN CONNECTION WITH THE TRANSACTIONS
CONTEMPLATED BY THIS AGREEMENT OR ANY DISCUSSION OR PRESENTATION RELATING
THERETO, INCLUDING, WITHOUT LIMITATION, ANY IMPLIED OR EXPRESS WARRANTY OF
MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE, IT BEING THE EXPRESS
AGREEMENT OF BUYER AND SELLER THAT EXCEPT AS EXPRESSLY SET FORTH IN THIS
AGREEMENT, BUYER WILL OBTAIN RIGHTS IN THE PURCHASED ASSETS IN THEIR PRESENT
CONDITION AND STATE OF REPAIR, "AS IS" AND "WHERE IS" AND "WITH ALL FAULTS."

12.2 Indemnification by Seller. Seller agrees to indemnify, defend
and hold Buyer and its Affiliates harmless from and against any and all losses,
liabilities, claims, demands, damages, costs and expenses (including reasonable
attorneys' fees and disbursements) of every kind, nature and description
(collectively, "Claims") sustained by Buyer or any of its Affiliates based
upon, arising out of or otherwise in respect of (i) the inaccuracy of any
representation or warranty, or the breach of any covenant or agreement, of
Seller contained in this Agreement or in any certificate, agreement, document
or instrument delivered pursuant to this Agreement, (ii) the ownership,
management or use of the Purchased Assets prior to the Closing or (iii) any
Retained Liabilities; provided, however, that Seller shall have no liability
pursuant to this Section 12.2 for the first $150,000 of aggregate Claims in
respect of breaches of representations or warranties by Seller (the "Buyer
Basket") and Seller shall be responsible only for such amounts of such Claims
as exceed the Buyer Basket. For purposes of the above indemnity, any
representation or warranty given subject to a materiality qualifier shall be
deemed to have been given without such qualifier.

12.3 Indemnification by Buyer. Buyer agrees to indemnify, defend and
hold Seller and its Affiliates harmless from and against any and all losses,
liabilities, Claims sustained by Seller or any of its Affiliates based upon,
arising out of or otherwise in respect of (i) the inaccuracy of any
representation or warranty, or the breach of any covenant or agreement, of
Buyer contained in this Agreement or in any certificate, agreement, document or
instrument delivered pursuant to this Agreement, or (ii) the ownership,
management or use of the Purchased Assets after the Closing, unless and to the
extent that such Claim arises solely from any action of Seller or any of its
Affiliates after the Closing; provided, however, that Buyer shall have no
liability pursuant to this Section 12.3 for the first $150,000 of aggregate
Claims in respect of breaches of representations and warranties of Buyer (the
"Seller Basket") and Buyer shall be responsible only for such amounts of such
Claims as exceed the Seller Basket. For purposes of the above indemnity, any
representation or warranty given subject to a materiality qualifier, including
an exception for those matters that would not have a Seller MAE, shall be
deemed to have been given without such qualifier.

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<PAGE> 35
12.4 Indemnification Procedure. Any party seeking information or
reimbursement for Claims hereunder (the "Indemnified Party") shall as promptly
as practical notify the party from which such indemnification is sought (the
"Indemnifying Party") upon which the Indemnified Party intends to base a claim
for indemnification or reimbursement hereunder; provided, however, that the
failure of an Indemnified Party so to notify the Indemnifying Party shall not
relieve the Indemnifying Party from any liability under this Agreement to the
Indemnified Party with respect to such Claim except to the extent the
Indemnifying Party is actually prejudiced or damaged by the failure to receive
timely notice. In the event of any claims for indemnification or reimbursement,
the Indemnifying Party, at its option, may assume (with legal counsel
reasonably acceptable to the Indemnified Party) the defense of any claim,
demand, lawsuit or other proceeding brought against the Indemnified Party,
which claim, demand, lawsuit or other proceeding may give rise to the indemnity
or reimbursement obligation of the Indemnifying Party hereunder, and may assert
any defense of any party; provided, however, that the Indemnified Party shall
have the right at its own expense to participate jointly with the Indemnifying
Party in the defense of any claim, demand, lawsuit or other proceeding in
connection with which the Indemnified Party claims indemnification or
reimbursement hereunder. Notwithstanding the right of an Indemnified Party so
to participate, the Indemnifying Party shall have the sole right to settle or
otherwise dispose of such claim, demand, lawsuit or other proceeding on such
terms as the Indemnifying Party, in its sole discretion, shall deem appropriate
with respect to any issue involved in such claim, demand, lawsuit or other
proceeding as to which (i) the indemnified Party shall have acknowledged the
obligation to indemnify the Indemnified Party hereunder and the settlement is
solely for cash or (ii) the Indemnified Party shall have declined so to
participate.

12.5 Survival. All representations and warranties of the parties to
this Agreement shall survive the Closing Date and shall remain in full force
and effect without limitation. All representations, warranties and covenants
and agreements made by the parties shall not be affected by any investigation
heretofore or hereafter made by and on behalf of any of them and shall not be
deemed merged into any instruments or agreements delivered in connection with
the transactions contemplated hereby. The covenants and agreements entered
into pursuant to this Agreement shall survive the Closing Date without
limitation.

12.6 LIMITATION OF REMEDIES. THE INDEMNIFICATION OBLIGATIONS OF BUYER
AND SELLER SET FORTH IN THIS AGREEMENT, INCLUDING IN THIS ARTICLE XII, SHALL BE
LIMITED TO INDEMNIFICATION FOR ACTUAL DAMAGES SUFFERED AND SHALL NOT INCLUDE
INCIDENTAL, CONSEQUENTIAL, SPECIAL OR INDIRECT DAMAGES; PROVIDED, HOWEVER, THAT
ANY SUCH INCIDENTAL, CONSEQUENTIAL, SPECIAL OR INDIRECT DAMAGES RECOVERED BY A
THIRD PARTY AGAINST A PARTY ENTITLED TO INDEMNITY UNDER THIS AGREEMENT SHALL BE
INCLUDED IN THE DAMAGES RECOVERABLE PURSUANT TO THE INDEMNITIES HEREIN.

12.7 Applicability of Indemnification Obligation. EACH OF THE
AGREEMENTS TO INDEMNIFY, DEFEND OR HOLD HARMLESS CONTAINED IN SECTION 12.2 OR
12.3 SHALL APPLY IRRESPECTIVE OF WHETHER THE SUBJECT CLAIM IS BASED IN WHOLE OR
IN PART UPON THE SOLE OR CONTRIBUTORY NEGLIGENCE (WHETHER ACTIVE, PASSIVE OR
GROSS), BREACH OF WARRANTY, OR BREACH OR VIOLATION OF ANY DUTY IMPOSED

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<PAGE> 36
BY ANY LAW OR REGULATION, ON THE PART OF THE BENEFICIARY OF THE AGREEMENT,
EXCEPT AS OTHERWISE EXPRESSLY PROVIDED IN THIS AGREEMENT.

ARTICLE XIII

MISCELLANEOUS

13.1 Notices. All notices and other communications required or
permitted to be given or made hereunder by either party hereto shall be in
writing and shall be deemed to have been duly given if delivered personally or
transmitted by first class registered or certified mail, postage prepaid,
return receipt requested, or sent by prepaid overnight delivery service, or
sent by cable, telegram, telefax or telex, to the parties at the following
addresses (or at such other addresses as shall be specified by the parties by
like notice):

If to Buyer:

UTI Energy Corp.
485 Devon Park Drive, Suite 112
Wayne, PA 19087
Telephone: 610-971-9600
Facsimile: 610-964-0141
Attention: President

with a copy to:

Curtis W. Huff
Fulbright & Jaworski L.L.P.
1301 McKinney Street, Suite 5100
Houston, Texas 77010-3095
Facsimile: 713-651-5246

If to Seller:

Quarles Drilling Corporation
7633 East 63rd Drive, Suite 6500
Tulsa, Oklahoma 74133
Attention: Don Quarles
Telephone:
Facsimile:

with a copy to:

Drummond, Raymond & Hinds
1924 South Utica, Suite 1000
Tulsa, Oklahoma 74104
Attention: Tom Drummond

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<PAGE> 37
Telephone: 918-749-7378
Facsimile: 918-749-7869

Such notices, demands and other communications shall be effective (i) if
delivered personally or sent by courier service, upon actual receipt by the
intended receipt, (ii) if mailed, upon the earlier of five days after deposit
in the mail or the date of delivery as shown by the return receipt therefor, or
(iii) if sent by telecopy or facsimile transmission, when confirmation of
receipt is received.

13.2 Entire Agreement. This Agreement, including the Schedules,
Exhibits, Annexes and other writings referred to herein or delivered pursuant
hereto, constitutes the entire agreement between the parties hereto with
respect to the subject matter hereof and supersedes all prior agreements and
understandings, both written and oral, between the parties with respect to the
subject matter hereof.

13.3 Amendments and Waiver; Rights and Remedies. This Agreement may
be amended, superseded, canceled, renewed or extended, and the terms hereof may
be waived, only by a written instrument signed by the parties or, in the case
of a waiver, by the party waiving compliance. No delay on the part of either
party in exercising any right, power or privilege hereunder shall operate as a
waiver thereof, nor shall any waiver on the part of either party of any such
right, power or privilege, or any single or partial exercise of any such right,
power or privilege, preclude any further exercise thereof or the exercise of
any other such right, power or privilege. The rights and remedies herein
provided are cumulative and are not exclusive of any rights or remedies that
any party may otherwise have at law or in equity. The rights and remedies of
either party based upon, arising out of or otherwise in respect of any
inaccuracy in or breach of any representation, warranty, covenant or agreement
contained in this Agreement shall in no way be limited by the fact that the
act, omission, occurrence or other state of facts upon which any claim of any
such inaccuracy or breach is based may also be the subject matter of any other
representation, warranty, covenant or agreement contained in this Agreement (or
in any other agreement between the parties) as to which there is no inaccuracy
or breach.

13.4 Governing Law. This Agreement shall be governed by, and
construed and enforced in accordance with, the laws of the State of Texas,
without regard to the principles of conflicts of laws thereof.

13.5 Binding Effect; Assignment.

(a) This Agreement and all the provisions hereof shall be
binding upon and inure to the benefit of the parties and their respective
successors and permitted assigns.

(b) Buyer may upon notice to Seller direct that title to all
or part of the Purchased Assets be taken in one or more of Buyer's wholly owned
subsidiaries (direct or indirect) (a "Buyer Designee"); provided, however, that
(y) each Buyer Designee shall be made a party to this Agreement at or prior to
the Closing and (z) no such designation shall relieve Buyer of any of its
duties, liabilities or obligations hereunder.

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<PAGE> 38
13.6 Counterparts. This Agreement may be executed simultaneously in
two or more counterparts, each of which shall be deemed an original, but all of
which together shall constitute one and the same agreement.

13.7 References. All references in this Agreement to Articles,
Sections and other subdivisions refer to the Articles, Sections and other
subdivisions of this Agreement unless expressly provided otherwise. The words
"this Agreement," "herein," "hereof," "hereby," "hereunder" and words of
similar import refer to this Agreement as a whole and not to any particular
subdivision unless expressly so limited.

13.8 Severability of Provisions. If any provision of this Agreement
is held to be unenforceable, this Agreement shall be considered divisible and
such provision shall be deemed inoperative to the extent it is deemed
unenforceable, and in all other respects this Agreement shall remain in full
force and effect; provided, however, that if any such provision may be made
enforceable by limitation thereof, then such provision shall be deemed to be so
limited and shall be enforceable to the maximum extent permitted by applicable
law.

13.9 Gender. Pronouns in masculine, feminine and neuter genders shall
be construed to include any other gender, and words in the singular form shall
be construed to include the plural and vice versa, unless the context otherwise
requires.

13.10 Descriptive Headings. The descriptive headings herein are
inserted for convenience of reference only, do not constitute a part of this
Agreement, and shall not affect in any manner the meaning or interpretation of
this Agreement.

IN WITNESS WHEREOF, the parties have caused this Agreement to be
executed by their respective officers hereunto duly authorized as of the date
first above written.

UTI ENERGY CORP.

By: /s/ Mark S. Siegel
-----------------------------
Name: Mark S. Siegel
Title: Chairman of the Board

QUARLES DRILLING CORPORATION

By: /s/ Donald B. Quarles
-----------------------------
Name: Donald B. Quarles
Title: President

<PAGE> 1
EXHIBIT 2.2

FIRST AMENDMENT TO
ASSET PURCHASE AGREEMENT

This FIRST AMENDMENT (this "Amendment") to the Asset Purchase Agreement
dated December 31, 1996 (the "Agreement"), by and among UTI Energy Corp., a
Delaware corporation ("Buyer"), Triad Drilling Corporation, a Delaware
corporation and wholly owned subsidiary of Buyer ("Triad"), and Quarles
Drilling Corporation, an Oklahoma corporation ("Seller");

WITNESSETH:

WHEREAS, Buyer and Seller entered into the Agreement whereby Buyer
agreed to buy, and Seller agreed to sell, the Purchased Assets in exchange for
the payment by Buyer of the Purchase Price and the assumption by Buyer of the
Assumed Liabilities; and

WHEREAS, as permitted by the Agreement, Buyer desires to assign to Triad
Buyer's right to take title to the Purchased Assets;

NOW, THEREFORE, in consideration of the premises and the mutual terms
and covenants herein contained, and intending to be legally bound hereby, the
parties hereto hereby agree as follows:

1. Triad hereby agrees that it shall be bound by and liable for the
obligations of Buyer set forth in Article II of the Agreement.

2. The parties hereto agree that (i) the delivery of the Purchased
Assets described in Section 2.6 of the Agreement shall be made to Triad instead
of Buyer, (ii) Seller shall deliver the documents identified in Section 4.2 of
the Agreement to Triad instead of Buyer, and (iii) Triad shall deliver the
General Assignment referred to in Section 4.3(b).

3. Except as expressly amended by this Amendment, the Agreement
remains in full force and effect.

4. Capitalized terms used and not otherwise defined herein have the
meanings given such terms in the Agreement.

IN WITNESS WHEREOF, the parties have caused this Agreement to be
executed by their respective officers hereunto duly authorized as of the date
first above written.

UTI ENERGY CORP.

By: /s/ VAUGHN DRUM
--------------------------------
Vaughn Drum, President
<PAGE> 2

QUARLES DRILLING CORPORATION

By: /s/ ROBERT WADLOW
--------------------------------
Robert Wadlow, Vice
President

TRIAD DRILLING CORPORATION

By: /s/ VAUGHN E. DRUM
--------------------------------
Vaughn Drum, Chairman of
the Board and Chief
Executive Officer

<PAGE> 1
EXHIBIT 10.1

SECOND AMENDMENT AND MODIFICATION
TO AMENDED AND RESTATED LOAN AND SECURITY AGREEMENT

THIS SECOND AMENDMENT AND MODIFICATION TO LOAN AND SECURITY AGREEMENT
(the "Amendment") is made effective as of the 15th day of August, 1996 by and
among FWA DRILLING COMPANY, INC. ("FWA"), INTERNATIONAL PETROLEUM SERVICE
COMPANY ("IPSCO"), TRIAD DRILLING COMPANY ("TRIAD"), UNIVERSAL WELL SERVICES,
INC. ("UNIVERSAL"), USC, INCORPORATED, FORMERLY KNOWN AS WELL SERVICES, INC.
("UNIVERSAL"), USC, INCORPORATED, FORMERLY KNOWN AS UNION SUPPLY COMPANY
("UNION"), UTI ENERGY CORP. ("UTI"), UTICO, INC. ("UTICO"), VIERSEN & COCHRAN
DRILLING COMPANY ("VIERSEN") and MELLON BANK, N.A. ("BANK"). FWA, IPSCO,
Triad, Universal and Union are hereinafter sometimes collectively referred to
as the "BORROWERS" and individually as a "BORROWER". UTI, UTICO and VIERSEN
are hereinafter sometimes collectively referred to as the "GUARANTORS" and
individually as a "GUARANTOR". The Borrowers and the Guarantors are
hereinafter sometimes collectively referred to as the "OBLIGORS" and
individually as an "OBLIGOR".

BACKGROUND

A. Pursuant to the terms of the certain Amended and Restated Loan
and Security Agreement dated December 7, 1995, as amended, by and among
Obligors (other than Viersen) and Bank (the "LOAN AGREEMENT"), Bank agreed,
inter alia, to extend to Borrowers a line of credit up to a maximum outstanding
principal amount of Eight Million Four Hundred Thousand Dollars
($8,400,000.00).

B. Obligors have requested and Bank has agreed to amend the terms of
the Loan Agreement in accordance with the terms and conditions hereof.

NOW THEREFORE, the parties hereto, intending to be legally bound, agree
as follows:

1. Addition of New Obligor. Viersen is hereby added as a
Guarantor and as an Obligor under the Loan Agreement and all other applicable
Loan Documents. By executing this Amendment, Viersen agrees to be bound by all
of the covenants and restrictions applicable to the Guarantors and the Obligors
under the Loan Documents and hereby joins in all representations and warranties
of the Guarantors and the Obligors contained in the Loan Documents.

2. Security Interest. As security for the full and timely
payment and performance of all Bank Indebtedness, Viersen hereby grants to Bank
a security interest in all of the following:

(a) All of Viersen's present and future accounts, contract
rights, chattel paper, instruments and documents and all other rights to the
payment of money whether or not yet earned, for services rendered or goods
sold, consigned, leased or furnished by Viersen or otherwise, together with (i)
all goods (including any returned,

<PAGE> 2
rejected, repossessed or consigned goods), the sale, consignment, lease or
other furnishings of which shall be given or may give rise to any of the
foregoing, (ii) all of Viersen's rights as a consignor, consignee, unpaid
vendor or other lienor in connection therewith, including stoppage in transit,
set-off, detinue, replevin and reclamation, (iii) all general intangibles
related thereto, (iv) all guaranties, mortgages, security interests,
assignments, and other encumbrances on real or personal property, leases and
other agreements or property securing or relating to any accounts, (v) choses-
in-action, claims and judgments, (vi) any return or unearned premiums, which
may be due upon cancellation of any insurance policies, and (vii) all products
and proceeds of any of the foregoing.

(b) All of Viersen's present and future inventory (including
but not limited to goods held for sale or lease or furnished or to be furnished
under contracts for service, raw materials, work-in-process, finished goods and
goods used or consumed in Viersen's business) whether owned, consigned or held
on consignment, together with all merchandise, component materials, supplies,
packing, packaging and shipping materials, and all returned, rejected or
repossessed goods sold, consigned, leased or otherwise furnished by Viersen,
all documents of title covering any of such goods or inventory and all products
and proceeds of any of the foregoing.

(c) All of Viersen's present and future general intangibles
related to or useful in the sale of Viersen's inventory or the collection of
Viersen's accounts or constituting a right or claim by Viersen to receive
payments of any nature, and all products and proceeds of any of the foregoing.

(d) All of Viersen's present and future equipment, to the
extent such equipment may at any time have constituted inventory of Viersen but
by virtue of a change in use constitutes equipment, together with all parts,
substitutions, accretions, accessions, attachments, accessories, additions,
components and replacements thereof, all documents of title covering any of
such items or inventory and all manuals of operation, maintenance or repair,
and all products and proceeds of any of the foregoing.

(e) All of Viersen's present and future general ledger sheets,
files, records, customer lists, books of account, invoices, bills, certificates
or documents of ownership, bills of sale, business papers, correspondence,
credit files, tapes, cards, computer runs and all other data and data storage
systems whether in the possession of Viersen or any service bureau.

(f) All letters of credit now existing or hereafter issued
naming Viersen as a beneficiary or assigned to Viersen, including the right to
receive payment thereunder, and all documents and records associated therewith.

(g) All deposits, funds, instruments, documents, policies and
certificates of insurance, securities, chattel paper and other assets of or in
which Viersen has an interest and all proceeds thereof, now or at any time
hereafter on deposit with or in the possession or control of Bank or owing by
Bank to Viersen or in transit by mail or carrier to Bank or in the possession
of any other Person acting on Bank's behalf, without regard to whether Bank
received the same in pledge, for safekeeping, as agent

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<PAGE> 3
for collection or otherwise, or whether Bank has conditionally released the
same, and in all assets of Viersen in which Bank now has or may at any time
hereafter obtain a lien, mortgage, or security interest for any reason.

(H) Notwithstanding the foregoing, the security interest
granted in this section shall not extend to the assets of Viersen described in
EXHIBIT "C" to this Amendment (the "TRUST COLLATERAL") so long as the Trust
Collateral continues to secure the $8,000,000 Note from Viersen to the Trust.

3. RIGHTS AND REMEDIES. Without limiting the terms of SECTION 1 of
this Amendment, Viersen hereby specifically agrees that Bank may exercise all
rights and remedies with respect to Viersen as an Obligor and Viersen's assets
set forth in SECTIONS 4.4, 9.6, 12.2, 12.3, 12.4, 12.5 AND 12.6 of the Loan
Agreement.

4. WAIVERS AND CONSENTS. Without limiting the terms of SECTION 1 of
this Amendment, Viersen hereby specifically joins in the waivers, consents,
indemnifications and grants of power of attorney set forth in SECTIONS 4.4(B),
9.5, 12.4, 15.1, 15.3, 16.1, AND 17.18 of the Loan Agreement.

5. REPRESENTATIONS. SCHEDULES 5.3, 5.4, 5.7, 5.14, 5.16, 5.18, 6.4
AND 6.9 of the Loan Agreement are hereby amended and restated as set forth in
the amended schedules attached to this Amendment. Obligors hereby represent
and warrant to Bank that all of the representations and warranties set forth in
the Loan Agreement with respect to Obligors, as amended by the attached
schedules, are accurate and complete with respect to Viersen as a new Obligor.

6. LIMITATION ON INDEBTEDNESS. The Indebtedness of Viersen in the
amount of $8,000,000.00 owed to the Sam K. Viersen, Jr. Revocable Trust (the
"TRUST") incurred in connection with the acquisition by UTI of all of the stock
of Viersen (the "VIERSEN ACQUISITION") shall be added to the amended SCHEDULE
6.3 to the Loan Agreement and shall constitute permitted Indebtedness under
SECTION 6.3 of the Loan Agreement.

7. BUSINESS ACQUISITION. The Viersen Acquisition shall constitute a
permitted acquisition under SECTION 6.7 of the Loan Agreement, notwithstanding
any other restrictions set forth in SECTION 6.7.

8. LIENS. The liens granted by Viersen to the Trust in the Trust
collateral in connection with the Viersen Acquisition shall be added to the
amended SCHEDULE 6.9 to the Loan Agreement and shall constitute liens under
SECTION 6.9 of the Loan Agreement.

9. MAINTENANCE OF MANAGEMENT. SECTION 6.17 of the Loan Agreement is
hereby amended and restated to read in its entirety as follows:

"6.17 Maintenance of Management. Obligors will
cause their business to be continuously managed by
Vaughn E. Drum (the "CURRENT MANAGERS") or such
other persons (serving in such management
positions) as may be

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<PAGE> 4
reasonably satisfactory to Bank. Obligors will
notify Bank promptly in writing of any change in
their boards of directors or executive officers."

10. TRANSACTIONS WITH AFFILIATES. SECTION 6.19 of the Loan Agreement
is hereby amended by adding the following sentence:

"Without limiting the other terms of this Section,
no other Obligor will transfer any funds or other
property to Viersen, except for transfers in
connection with the sale or lease of property from
Viersen to such other Obligor, which must on terms
that are no more favorable to Viersen than those
which Viersen could obtain in a similar commercial
arms-length transaction between Persons not
affiliated with each other."

11. LEVERAGE COVENANT. Effective as of September 30, 1996, SECTION
7.3 of the Loan Agreement is hereby amended and restated to read in its
entirety as follows:

"7.3 LEVERAGE RATIOS. Obligors will maintain a
ratio of Consolidated Liabilities to Consolidated
Tangible Net Worth of not greater than (a) 2.0 to
1.0 as of the end of each fiscal quarter commencing
9/30/96 through 3/31/97, (b) 1.75 to 1.0 as of the
end of each fiscal quarter commencing 6/30/97
through 9/30/97, and (c) 1.25 to 1.0 as of the end
of each fiscal quarter thereafter.

12. CAPITAL EXPENDITURES. The expenditures related to the Viersen
Acquisition shall not be included as Capital Expenditures for purposes of
complying with SECTION 7.4 of the Loan Agreement.

13. EXTENSION OF CONTRACT PERIOD. The Contract Period for the Line
is hereby extended until June 30, 1998.

14. VIERSEN ACQUISITION. Obligors will not amend or modify the Stock
Purchase Agreement dated August 14, 1996 (the "VIERSEN STOCK PURCHASE
AGREEMENT"), entered into with respect to the Viersen Acquisition or any
documents collateral thereto or waive any of their rights thereunder, without
the prior written consent of the Bank. Viersen shall be included in
determining compliance with financial covenants commencing on the effective
date of the Viersen Acquisition.

15. CONDITIONS. The obligation of Bank to enter into this Amendment
is subject to the following conditions (any of which may be waived by Bank):

(a) LOAN DOCUMENTS. Obligors and all other required person
and entities will have executed and delivered to Bank this Amendment, a Surety
Agreement from Viersen, an Amended and Restated Subordination Agreement, UCC-1
financing

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<PAGE> 5
statements from Viersen in favor of Bank for all locations of Collateral owned
by Viersen, and such other documents as Bank may require.

(b) REPRESENTATIONS AND WARRANTIES. All representations and
warranties of Obligors set forth in the Loan Documents, as amended hereby, will
be true at and as of the date hereof.

(c) NO DEFAULT. No condition or event shall exist or have
occurred which would constitute an Event of Default hereunder (or would, upon
the giving of notice of the passage of time or both, constitute such an Event
of Default).

(d) PROCEEDINGS AND DOCUMENTS. All proceedings taken by
Obligors in connection with the transactions contemplated by this Amendment and
all documents incident to such transactions shall be satisfactory in form and
substance to Bank and Bank's counsel, and Bank shall have received all
documents or other evidence which it reasonably may request in connection with
such proceedings and transactions. Viersen shall have delivered to Bank a
certificate, in form and substance satisfactory to Bank, dated the date hereof
and signed on behalf of Viersen by an officer of Viersen, certifying (a) true
copies of the Articles of Incorporation and bylaws of Viersen in effect on such
date, (b) true copies of all corporate actions taken by Viersen relative to the
Loan Documents, and (c) the names, true signatures and incumbency of the
officers of Viersen authorized to execute and deliver this Amendment and the
other Loan Documents. Bank may conclusively rely on such certificate unless
and until a later certificate revising the prior certificate has been received
by Bank.

(e) LANDLORD'S OR WAREHOUSEMAN'S RELEASE AND WAIVER
AGREEMENTS. Bank shall have received a landlord's or warehouseman's release
and waiver agreement, satisfactory in form and substance to Bank, from such
locations leased by Viersen or at which Viersen warehouses inventory, as Bank
may require.

(f) DELIVERY OF OTHER DOCUMENTS. The following documents
shall have been delivered by or on behalf of Viersen to Bank:

(i) GOOD STANDING AND TAX LIEN CERTIFICATES. A
good standing certificate certifying to the good standing and corporate status
of Viersen in its state of incorporation, good standing/foreign qualification
certificates from such other jurisdictions in which Viersen is required to be
qualified to do business, as Bank may require, and tax lien certificates for
Viersen from such jurisdictions in which Viersen is required to be qualified to
do business, as Bank may require.

(ii) AUTHORIZATION DOCUMENTS. Evidence of
authorization of Viersen's execution and full performance of this Amendment,
the Loan Documents and all other documents and actions required hereunder.

(iii) INSURANCE. Evidence of the insurance
coverage for Viersen required under SECTION 6.12 of the Loan Agreement.

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<PAGE> 6
(iv) OPINION OF COUNSEL. An opinion of counsel
for Viersen in form and content satisfactory to Bank.

(v) LIEN SEARCH. Copies of record searches
(including UCC searches and judgments, suits, tax and other lien searches)
confirming that Bank has a first priority security interest in the Collateral
owned by Viersen.

(vi) VIERSEN STOCK PURCHASE AGREEMENT. Copies of
the fully executed Viersen Stock Purchase Agreement and all exhibits and
schedules thereto.

(vii) CTI CONSENT. The written consent of CTI to
the Viersen Acquisition and the transactions contemplated in connection
therewith.

(viii) OTHER DOCUMENTS. Such other documents as
may be required to be submitted to Bank by the terms hereof or of any Loan
Documents.

16. CHALLENGE TO ENFORCEMENT. Obligors acknowledge and agree that
they do not have any defense, set-off, counterclaim or challenge against the
payment of any sums owing under the Loan Documents, or the enforcement of any
of the terms or conditions thereof.

17. CONFIRMATION OF COLLATERAL. Nothing contained herein shall be
deemed to be a compromise, satisfaction, accord and satisfaction, novation or
release of any of the Loan Documents, or any rights or obligations thereunder,
or a waiver by Bank of any of its rights under the Loan Documents or at law or
in equity. All liens, security interest, rights and remedies granted to the
Bank in the Loan Documents are hereby ratified, confirmed and continued.

18. REPRESENTATIONS, WARRANTIES AND COVENANTS. Obligors represent,
warrant and covenant, as applicable, which representations, warranties and
covenants shall survive until all Bank Indebtedness and all other obligations
of Obligors to Bank are paid and satisfied in full, as follows:

(a) All representations and warranties of Obligors set forth
in the Loan Documents, as amended hereby, are true and correct as of the date
hereof.

(b) No condition or event exists or has occurred which would
constitute an Event of Default under the Loan Documents (or would, upon the
giving of notice or the passage of time or both, constitute an event of
default).

(c) The execution and delivery of this Amendment by Obligors
and all documents and agreements to be executed and delivered pursuant to the
terms hereof;

(i) have been duly authorized by all requisite
corporate action by Obligors;

(ii) will not conflict with or result in the breach of
or constitute a default (upon the passage of time, delivery of notice or both)
under any applicable

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<PAGE> 7
statute, law, rule, regulation or ordinance or any indenture, mortgage, loan or
other document or agreement to which any Obligor is a party or by which any of
them is bound or affected; or

(iii) will not result in the creation or imposition of
any lien, charge or encumbrance of any nature whatsoever upon any of the
property or assets of any Obligor, except liens in favor of the Bank.

(d) Obligors agree that none of their obligations under any of
the Loan Documents, including without limitation, the Line Note and Surety
Agreement, shall in any way be adversely affected by this Amendment.

(e) Obligors ratify and confirm all of their obligations under
the Loan Documents.

19. NO WAIVER. Except as otherwise provided herein, nothing
contained and no actions taken by Bank in connection herewith shall constitute
herewith shall constitute nor shall they be deemed to be a waiver, release or
amendment of or to any rights, remedies, or privileges afforded to Bank under
waiver by Bank of Obligors' compliance with the terms of the Loan Documents,
nor shall anything contained herein constitute an agreement by Bank to enter
into any further amendments with Obligors.

20. INCONSISTENCIES. To the extent of any inconsistency between the
terms and conditions of this Amendment and the terms and conditions of the
other Loan Documents, the terms and conditions of this amendment shall prevail.
All terms and conditions of the Loan Documents not inconsistent herewith shall
remain in full force and effect and are hereby ratified and confirmed by
Obligors.

21. CONSTRUCTION. All references to the Loan Agreement therein or in
any other Loan Documents shall be deemed to be a reference to the Loan
Agreement as hereby amended.

22. BINDING EFFECT. This Amendment shall be binding upon and inure
to the benefit of the parties hereto and their respective successors and
assigns.

23. GOVERNING LAW. This Amendment shall be governed and construed in
accordance with the laws of the Commonwealth of Pennsylvania.

24. SUCCESSORS AND ASSIGNS. This Amendment and all rights and powers
granted hereby will bind and inure to the benefit of the parties hereto and
their respective successors and assigns.

25. HEADINGS. The headings of the Sections of this Agreement are
inserted for convenience only and shall not be deemed to constitute a part of
this Amendment.

26. CONFESSION OF JUDGMENT. EACH OBLIGOR HEREBY AUTHORIZES AND
EMPOWERS ANY ATTORNEY OR THE PROTHONOTARY OR CLERK OF ANY COURT IN THE
COMMONWEALTH OF PENNSYLVANIA, OR IN

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<PAGE> 8
ANY OTHER JURISDICTION WHICH PERMITS THE ENTRY OF JUDGMENT BY CONFESSION, TO
APPEAR FOR SUCH OBLIGOR AT ANY TIME AFTER DEMAND UNDER THE LINE NOTE OR AFTER
THE OCCURRENCE OF AN EVENT OF DEFAULT UNDER THE LOAN AGREEMENT IN ANY ACTION
BROUGHT AGAINST SUCH OBLIGOR ON OR UNDER ANY OF THE LOAN DOCUMENTS AT THE SUIT
OF BANK, WITH OR WITHOUT COMPLAINT OR DECLARATION FILED, WITHOUT STAY OF
EXECUTION, AS OF ANY TERM OR TIME, AND THEREIN TO CONFESS OR ENTER JUDGMENT
AGAINST SUCH OBLIGOR FOR THE ENTIRE UNPAID OUTSTANDING PRINCIPAL AMOUNT OF THE
BANK INDEBTEDNESS AND ALL OTHER SUMS TO BE PAID BY SUCH OBLIGOR TO OR ON BEHALF
OF BANK PURSUANT TO THE TERMS OF THE LOAN DOCUMENTS AND ALL ARREARAGES OF
INTEREST THEREON, TOGETHER WITH ALL COSTS AND OTHER EXPENSES AND AN ATTORNEY'S
COLLECTION COMMISSION OF FIFTEEN PERCENT (15%) OF THE AGGREGATE AMOUNT OF THE
FOREGOING SUMS, BUT IN NO EVENT LESS THAN FIVE THOUSAND DOLLARS ($5,000.00);
AND FOR SO DOING THIS AMENDMENT OR A COPY HEREOF VERIFIED BY AFFIDAVIT SHALL BE
A SUFFICIENT WARRANT.

THE AUTHORITY GRANTED HEREIN TO CONFESS JUDGMENT SHALL NOT BE
EXTINGUISHED BY ANY EXERCISE THEREOF, BUT SHALL CONTINUE FROM TIME TO TIME AND
AT ALL TIMES UNTIL PAYMENT IN FULL OF ALL THE BANK INDEBTEDNESS. OBLIGORS
ACKNOWLEDGE THAT THEY HAVE BEEN REPRESENTED BY COUNSEL IN CONNECTION WITH THE
EXECUTION AND DELIVERY OF THIS AMENDMENT AND THAT THEY KNOWINGLY WAIVE THEIR
RIGHT TO BE HEARD PRIOR TO THE ENTRY OF SUCH JUDGMENT AND UNDERSTANDS THAT,
UPON SUCH ENTRY, SUCH JUDGMENT SHALL BECOME A LIEN ON ALL REAL PROPERTY OF EACH
OBLIGOR IN THE COUNTY WHERE SUCH JUDGMENT IS ENTERED.

27. WAIVER OF RIGHT TO TRIAL BY JURY. OBLIGORS AND BANK WAIVE ANY
RIGHT TO TRIAL BY JURY ON ANY CLAIM, DEMAND, ACTION OR CAUSE OF ACTION (A)
ARISING UNDER ANY OF THE LOAN DOCUMENTS, INCLUDING THIS AMENDMENT OR (B) IN ANY
WAY CONNECTED WITH OR RELATED TO ANY OF THE LOAN DOCUMENTS OR THE TRANSACTIONS
RELATED HERETO OR THERETO, IN EACH CASE WHETHER SOUNDING IN CONTRACT OR TORT OR
OTHERWISE, OBLIGORS AND BANK AGREE AND CONSENT THAT ANY SUCH CLAIM, DEMAND,
ACTION OR CAUSE OF ACTION SHALL BE DECIDED BY COURT TRIAL WITHOUT A JURY, AND
THAT ANY PARTY TO THIS AMENDMENT MAY FILE AN ORIGINAL COUNTERPART OR A COPY OF
THIS SECTION WITH ANY COURT AS WRITTEN EVIDENCE OF THE CONSENT OF OBLIGORS AND
BANK TO THE WAIVER OF THEIR RIGHT TO TRIAL BY JURY. OBLIGORS A KNOWLEDGE THAT
THEY HAVE HAD THE OPPORTUNITY TO CONSULT WITH COUNSEL REGARDING THIS SECTION,
THAT THEY FULLY UNDERSTAND ITS TERMS, CONTENT AND EFFECT, AND THAT THEY
VOLUNTARILY AND KNOWINGLY AGREE TO THE TERMS OF THIS SECTION.

-8-

<PAGE> 9
IN WITNESS WHEREOF, the parties hereto have executed this Amendment as
of the date first above written.

INTERNATIONAL PETROLEUM SERVICE
COMPANY

By: /s/Vaughn E. Drum
------------------------------------------------
Name/Title: Vaughn E. Drum, Chairman
-----------------------------------------------

Attest: /s/Vincent J. Donahue
---------------------------------------------------
Name/Title: Vincent J. Donahue, Secretary
-----------------------------------------------

[Corporate Seal]

TRIAD DRILLING COMPANY

By: /s/Vaughn E. Drum
------------------------------------------------
Name/Title: Vaughn E. Drum, Chairman
-----------------------------------------------

Attest: /s/Vincent J. Donahue
---------------------------------------------------
Name/Title: Vincent J. Donahue, Secretary
-----------------------------------------------

[Corporate Seal]

UNIVERSAL WELL SERVICES, INC.

By: /s/Vaughn E. Drum
------------------------------------------------
Name/Title: Vaughn E. Drum, Chairman
-----------------------------------------------

Attest: /s/Vincent J. Donahue
---------------------------------------------------
Name/Title: Vincent J. Donahue, Secretary
-----------------------------------------------

[Corporate Seal]

(Signatures Continued on Next Page)

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<PAGE> 10
(Signatures Continued from Previous Page)

USC, INCORPORATED, FORMERLY KNOWN AS
UNION SUPPLY COMPANY

By: /s/Vaughn E. Drum
-------------------------------------------------
Name/Title: Vaughn E. Drum, President & CEO
------------------------------------------------

Attest: /s/Vincent J. Donahue
----------------------------------------------------
Name/Title: Vincent J. Donahue, Secretary
------------------------------------------------

[Corporate Seal]

UTI ENERGY CORP.

By: /s/Vaughn E. Drum
-------------------------------------------------
Name/Title: Vaughn E. Drum, President & CEO
------------------------------------------------

Attest: /s/Vincent J. Donahue
----------------------------------------------------
Name/Title: Vincent J. Donahue, Secretary
------------------------------------------------

[Corporate Seal]

UTICO, INC.

By: /s/Vaughn E. Drum
-------------------------------------------------
Name/Title: Vaughn E. Drum, President & CEO
------------------------------------------------

Attest: /s/Vincent J. Donahue
----------------------------------------------------
Name/Title: Vincent J. Donahue, Secretary
------------------------------------------------

[Corporate Seal]

(Signatures Continued on Next Page)

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<PAGE> 11
(Signatures Continued from Previous Page)

FWA DRILLING COMPANY, INC.

By: /s/Vaughn E. Drum
--------------------------------------------------
Name/Title: Vaughn E. Drum, President & CEO
-------------------------------------------------

Attest: /s/Vincent J. Donahue
-----------------------------------------------------
Name/Title: Vincent J. Donahue, Secretary
-------------------------------------------------

[Corporate Seal]

VIERSEN & COCHRAN DRILLING COMPANY

By: /s/Vaughn E. Drum
--------------------------------------------------
Name/Title: Vaughn E. Drum, President & CEO
-------------------------------------------------

Attest: /s/Vincent J. Donahue
-----------------------------------------------------
Name/Title: Vincent J. Donahue, Secretary
-------------------------------------------------

[Corporate Seal]

MELLON BANK, N.A.

By: /s/Matthew D. Kelly
--------------------------------------------------
Name/Title: Matthew D. Kelly, Vice President
-------------------------------------------------

-11-

<PAGE> 1
EXHIBIT 10.2

THIRD AMENDMENT AND MODIFICATION
TO AMENDED AND RESTATED LOAN AND SECURITY AGREEMENT

THIS THIRD AMENDMENT AND MODIFICATION TO LOAN AND SECURITY AGREEMENT
(the "AMENDMENT") is made effective as of the 23rd day of January, 1997 by and
among FWA DRILLING COMPANY, INC. ("FWA") INTERNATIONAL PETROLEUM SERVICE
COMPANY ("IPSCO"), TRIAD DRILLING COMPANY ("TRIAD"), UNIVERSAL WELL SERVICES,
INC. ("UNIVERSAL"), USC, INCORPORATED, formerly known as UNION SUPPLY COMPANY
("UNION"), UTI ENERGY CORP. ("UTI"), UTICO, INC. ("UTICO"), VIERSEN & COCHRAN
DRILLING COMPANY ("VIERSEN") and MELLON BANK, N.A. ("BANK"). FWA, IPSCO,
Triad, Universal and Union are hereinafter sometimes collectively referred to
as the "BORROWERS" and individually as a "BORROWER". UTI, UTICO and Viersen
are hereinafter sometimes collectively referred to as the "GUARANTORS" and
individually as a "GUARANTOR". The Borrowers and the Guarantors are
hereinafter sometimes collectively referred to as the "OBLIGORS" and
individually as an "OBLIGOR".

BACKGROUND

A. Pursuant to the terms of the certain Amended and Restated Loan
and Security Agreement dated December 7, 1995, as amended, by and among
Obligors and Bank (the "LOAN AGREEMENT"), Bank agreed, inter alia, to extend to
Borrowers a line of credit up to a maximum outstanding principal amount of
Eight Million Four Hundred Thousand Dollars ($8,400,000.00).

B. Obligors have requested and Bank has agreed to amend the terms of
the Loan Agreement in accordance with the terms and conditions hereof.

C. Capitalized terms used herein and not otherwise defined shall
have such meaning as provided in the Loan Agreements.

NOW THEREFORE, the parties hereto, intending to be legally bound, agree
as follows:

1. USE OF PROCEEDS. Bank agrees that Borrowers may use
advances under the Line up to an aggregate amount of Four Million One Hundred
Thousand Dollars ($4,100,000.00) (the "Line") to partially fund the Quarles
Asset Acquisition (as hereinafter defined).

2. COLLATERAL. SECTION 4.1(d) of the Loan Agreement is
hereby amended and restated in its entirety to read as follows and each Obligor
hereby grants Bank a security interest in the following:

"all of such Obligor's present and future drilling rigs, wells
and production equipment, machinery, equipment, tools, pipe and
spare parts, together with all parts, substitutions, accretions,
accessions, attachments, accessories, additions, components and
replacements thereof, all documents of title covering any of such
items and all manuals of operation, maintenance or repair, and
all products and proceeds of any of the foregoing.

The collateral described in this revised SECTION 4.1(d) shall be
included within the defined term "Collateral".
<PAGE> 2
3. EXCLUDED ASSETS. Notwithstanding anything to the contrary
contained in the Loan Agreement, the security interests granted in SECTION 4 of
the Loan Agreement shall not include drilling rigs, and all proceeds thereof,
in which the CIT Group/Equipment Financing Company, Inc. currently holds a
security interest under the CIT Loan Documents, and (ii) the Collateral Assets
currently securing that certain promissory note in the original amount of Eight
Million Dollars ($8,000,000.00) dated August 14, 1996 made by UTI payable to
the order of Vierser Note"). For purposes hereof, "Collateral Assets" shall
mean the Assets as defined in that certain Stock Purchase Agreement dated
August 14, 1996 between the Sam K. Viersen, Jr. Revocable Trust and UTI, as
amended, securing the Viersen Note.

4. DRILLING RIGS AND RELATED COLLATERAL.

(a) REPRESENTATIONS. Obligors represent and warrant as
follows:

(i) All drilling rigs and related drilling
equipment (collectively, the "DRILLING EQUIPMENT") used by Obligors in drilling
operations on their own behalf or on behalf of their customers are owned by the
entities and described on SCHEDULE 4 attached hereto. SCHEDULE 4 sets forth
the owner of the Drilling Equipment, the states in which the Drilling Equipment
is located and any Person that holds a lien or encumbrance against the Drilling
Equipment.

(ii) Except for liens permitted under SECTION 6.9
of the Loan Agreement, such Drilling Equipment is free and clear of all other
liens and encumbrances.

(b) COVENANTS. Obligors agree as follows:

(i) Bank may at any reasonable time inspect the
Drilling Equipment in which Bank now has or may hereafter acquire a security
interest (collectively, the "ENCUMBERED EQUIPMENT").

(ii) The Encumbered Equipment shall at all times
remain separately identifiable personal property and shall not become affixed
to real property so as to become a fixture.

(iii) If requested by Bank, in writing, Obligors
will attach to the Encumbered Equipment a notice satisfactory to Bank,
disclosing Bank's security interest in the Encumbered Equipment.

(iv) Obligors will not move any of the Encumbered
Equipment owned by an Obligor out of any of the states described in SCHEDULE 4
attached hereto or any of the other states in which Bank has filed UCC
financing statements naming the owner of such Encumbered Equipment, as debtor,
and describing such Encumbered Equipment as collateral, unless such Obligor
notifies Bank and provides Bank with duly executed financing statements to
perfect Bank's security interest in such Encumbered Equipment upon filing in
such new state.

5. BUSINESS ACQUISITION. The Quarles Asset Acquisition shall
constitute a permitted acquisition under SECTION 6.7 of the Loan Agreement,
notwithstanding any other restrictions set forth in SECTION 6.7.

6. CAPITAL EXPENDITURES. The expenditures related to the
Quarles Asset Acquisition shall not be included as Capital Expenditures for
purposes of complying with SECTION 7.4 of the Loan Agreement.

7. QUARLES ASSET ACQUISITION. Without the prior written
consent of the Bank, Obligors will not amend or modify the Asset Purchase
Agreement dated December 31, 1996 between UTI and Quarles Drilling Corporation
("QUARLES"), which was subsequently assigned by UTI to Triad (the "ASSET
PURCHASE AGREEMENT"), wherein Triad agreed to purchase certain assets of
Quarles on terms and conditions as further described therein (the "QUARLES
ASSET ACQUISITION").

8. CROSS DEFAULT. Notwithstanding anything to the contrary
contained in the Loan Documents, the occurrence of an Event of Default under
that certain Loan and Security Agreement of even date herewith (the "New
Loan Agreement") and all other documents executed in connection therewith shall
constitute an Event of Default under the Line and the other Loan Documents.
Following the occurrence of such Event of Default, Bank may, at Bank's option
and without further notice to any Obligor, exercise any and all rights
available to Bank under any of the Loan Documents, at law, in equity or
otherwise.

2
<PAGE> 3
9. CROSS COLLATERALIZATION. In addition to Obligors'
obligations to Bank under the Line and the other Loan Documents, Obligors agree
that the Collateral shall also secure Obligors' obligations to Bank under the
New Loan Agreement.

10. CONDITIONS. The obligation of Bank to enter into this
Amendment is subject to the following conditions (any of which may be waived by
Bank):

(a) LOAN DOCUMENTS. Obligors and all other required
person and entities will have executed and delivered to Bank this Amendment and
such other documents as Bank may require.

(b) REPRESENTATIONS AND WARRANTIES. All
representations and warranties of Obligors set forth in the Loan Documents, as
amended hereby, will be true at and as of the date hereof, except for such
representations and warranties that are by their express terms limited to a
specific date.

(c) NO DEFAULT. No condition or event shall exist or
have occurred which would constitute an Event of Default hereunder (or would,
upon the giving of notice or the passage of time or both, constitute such an
Event of Default).

(e) DELIVERY OF OTHER DOCUMENTS. The following
documents shall have been delivered by or on behalf of Obligors to Bank:

(i) AUTHORIZATION DOCUMENTS. Evidence of
authorization of Obligors' execution and full performance of this Amendment,
the Loan Documents and all other documents and actions required hereunder.

(ii) OTHER DOCUMENTS. Such other documents as
may be required to be submitted to Bank by the terms hereof or any of the Loan
Documents.

(iii) CIT CONSENT. The written consent of CIT to
the Quarles Asset Acquisition and the transactions contemplated in connection
therewith.

(iv) OTHER DOCUMENTS. Such other documents as
may be required to be submitted to Bank by the terms hereof or any of the Loan
Documents.

11. CHALLENGE TO ENFORCEMENT. Obligors acknowledge and agree
that they do not have any defense, set-off, counterclaim or challenge against
the payment of any sums owing under the Loan Documents, or the enforcement of
any of the terms or conditions thereof.

12. CONFIRMATION OF COLLATERAL. Nothing contained herein
shall be deemed to be a compromise, satisfaction, accord and satisfaction,
novation or release of any of the Loan Documents, or any rights or obligations
thereunder, or a waiver by Bank of any of its rights under the Loan Documents
or at law or in equity. All liens, security interest, rights and remedies
granted to the Bank in the Loan Documents are hereby ratified, confirmed and
continued.

3
<PAGE> 4
13. REPRESENTATIONS, WARRANTIES AND COVENANTS. Obligors
represent, warrant and covenant, as applicable, which representations,
warranties and covenants shall survive until all Bank Indebtedness and all
other obligations of Obligors to Bank are paid and satisfied in full, as
follows:

(a) All representations and warranties of Obligors set
forth in the Loan Documents, as amended hereby, except for such representations
and warranties that are by their express terms limited to a specific date, are
true and correct as of the date hereof.

(b) No condition or event exists or has occurred which
would constitute an Event of Default under the Loan Documents (or would, upon
the giving of notice or the passage of time or both, constitute an event of
default).

(c) The execution and delivery of this Amendment by
Obligors and all documents and agreements to be executed and delivered pursuant
to the terms hereof;

(i) have been duly authorized by all requisite
corporate action by Obligors;

(ii) will not conflict with or result in the
breach of or constitute a default (upon the passage of time, delivery of notice
or both) under any applicable statute, law, rule, regulation or ordinance or
any indenture, mortgage, loan or other document or agreement to which any
Obligor is a party or by which any of them is bound or affected; or

(iii) will not result in the creation or
imposition of any lien, charge or encumbrance of any nature whatsoever upon any
of the property or assets of any Obligor, except liens in favor of the Bank.

(d) Obligors agree that none of their obligations under
any of the Loan Documents, including without limitation, the Line Note, shall
in any way be adversely affected by this Amendment.

(e) Obligors ratify and confirm all of their
obligations under the Loan Documents.

14. NO WAIVER. Except as otherwise provided herein, nothing
contained and no actions taken by Bank in connection herewith shall constitute
nor shall they be deemed to be a waiver, release or amendment of or to any
rights, remedies, or privileges afforded to Bank under the Loan Documents or
under the Uniform Commercial Code. Nothing herein shall constitute a waiver by
Bank of Obligors' compliance with the terms of the Loan Documents, nor shall
anything contained herein constitute an agreement by Bank to enter into any
further amendments with Obligors.

15. INCONSISTENCIES. To the extent of any inconsistency
between the terms and conditions of this Amendment and the terms and conditions
of the other Loan Documents, the terms and conditions of this Amendment shall
prevail. All terms and conditions of the Loan Documents not inconsistent
herewith shall remain in full force and effect and are hereby ratified and
confirmed by Obligors.

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<PAGE> 5
16. CONSTRUCTION. All references to the Loan Agreement
therein or in any other Loan Documents shall be deemed to be a reference to the
Loan Agreement as hereby amended.

17. BINDING EFFECT. This Amendment shall be binding upon and
inure to the benefit of the parties hereto and their respective successors and
assigns.

18. GOVERNING LAW. This Amendment shall be governed and
construed in accordance with the laws of the Commonwealth of Pennsylvania.

19. SUCCESSORS AND ASSIGNS. This Amendment and all rights and
powers granted hereby will bind and inure to the benefit of the parties hereto
and their respective successors and assigns.

20. HEADINGS. The headings of the sections of this Amendment
are inserted for convenience only and shall not be deemed to constitute a part
of this Amendment.

21. CONFESSION OF JUDGMENT. EACH OBLIGOR HEREBY AUTHORIZES
AND EMPOWERS ANY ATTORNEY OR THE PROTHONOTARY OR CLERK OF ANY COURT IN THE
COMMONWEALTH OF PENNSYLVANIA, OR IN ANY OTHER JURISDICTION WHICH PERMITS THE
ENTRY OF JUDGMENT BY CONFESSION, TO APPEAR FOR SUCH OBLIGOR AT ANY TIME AFTER
DEMAND UNDER THE LINE NOTE OR AFTER THE OCCURRENCE OF AN EVENT OF DEFAULT UNDER
THE LOAN AGREEMENT IN ANY ACTION BROUGHT AGAINST SUCH OBLIGOR ON OR UNDER ANY
OF THE LOAN DOCUMENTS AT THE SUIT OF BANK, WITH OR WITHOUT COMPLAINT OR
DECLARATION FILED, WITHOUT STAY OF EXECUTION, AS OF ANY TERM OR TIME, AND
THEREIN TO CONFESS OR ENTER JUDGMENT AGAINST SUCH OBLIGOR FOR THE ENTIRE UNPAID
OUTSTANDING PRINCIPAL AMOUNT OF THE BANK INDEBTEDNESS AND ALL OTHER SUMS TO BE
PAID BY SUCH OBLIGOR TO OR ON BEHALF OF BANK PURSUANT TO THE TERMS OF THE LOAN
DOCUMENTS AND ALL ARREARAGES OF INTEREST THEREON, TOGETHER WITH ALL COSTS AND
OTHER EXPENSES AND AN ATTORNEY'S COLLECTION COMMISSION OF FIFTEEN PERCENT (15%)
OF THE AGGREGATE AMOUNT OF THE FOREGOING SUMS, BUT IN NO EVENT LESS THAN FIVE
THOUSAND DOLLARS ($5,000.00); AND FOR SO DOING THIS AMENDMENT OR A COPY HEREOF
VERIFIED BY AFFIDAVIT SHALL BE A SUFFICIENT WARRANT.

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<PAGE> 6
22. WAIVER OF RIGHT TO TRIAL BY JURY. OBLIGORS AND BANK WAIVE
ANY RIGHT TO TRIAL BY JURY ON ANY CLAIM, DEMAND, ACTION OR CAUSE OF ACTION (A)
ARISING UNDER ANY OF THE LOAN DOCUMENTS, INCLUDING THIS AMENDMENT OR (B) IN ANY
WAY CONNECTED WITH OR RELATED OR INCIDENTAL TO THE DEALINGS OF OBLIGORS OR BANK
WITH RESPECT TO ANY OF THE LOAN DOCUMENTS OR THE TRANSACTIONS RELATED HERETO OR
THERETO, IN EACH CASE WHETHER SOUNDING IN CONTRACT OR TORT OR OTHERWISE,
OBLIGORS AND BANK AGREE AND CONSENT THAT ANY SUCH CLAIM, DEMAND, ACTION OR
CAUSE OF ACTION SHALL BE DECIDED BY COURT TRIAL WITHOUT A JURY, AND THAT ANY
PARTY TO THIS AMENDMENT MAY FILE AN ORIGINAL COUNTERPART OR A COPY OF THIS
SECTION WITH ANY COURT AS WRITTEN EVIDENCE OF THE CONSENT OF OBLIGORS AND BANK
TO THE WAIVER OF THEIR RIGHT TO TRIAL BY JURY. OBLIGORS ACKNOWLEDGE THAT THEY
HAVE HAD THE OPPORTUNITY TO CONSULT WITH COUNSEL REGARDING THIS SECTION, THAT
THEY FULLY UNDERSTAND ITS TERMS, CONTENT AND EFFECT, AND THAT THEY VOLUNTARILY
AND KNOWINGLY AGREE TO THE TERMS OF THIS SECTION.

IN WITNESS WHEREOF, the parties hereto have executed this
Amendment as of the date first above written.

INTERNATIONAL PETROLEUM SERVICE COMPANY

By:/s/ P. BLAKE DUPUIS
---------------------------------------
P. Blake Dupuis, Vice President
[CORPORATE SEAL]

TRIAD DRILLING COMPANY

By:/s/ P. BLAKE DUPUIS
---------------------------------------
P. Blake DuPuis, Vice President

[CORPORATE SEAL]

UNIVERSAL WELL SERVICES, INC.

By:/s/ P. BLAKE DUPUIS
---------------------------------------
P. Blake DuPuis, Vice President

[CORPORATE SEAL]

[SIGNATURES CONTINUED ON NEXT PAGE]

6
<PAGE> 7
[SIGNATURES CONTINUED FROM PREVIOUS PAGE]

USC INCORPORATED, FORMERLY KNOWN AS UNION
SUPPLY COMPANY

By:/s/ P. BLAKE DUPUIS
---------------------------------------
P. Blake DuPuis, Vice President

[CORPORATE SEAL]

UTI ENERGY CORP.

By:/s/ P. BLAKE DUPUIS
---------------------------------------
P. Blake DuPuis, Vice President
[CORPORATE SEAL]

UTICO, INC.

By:/s/ P. BLAKE DUPUIS
---------------------------------------
P. Blake DuPuis, Vice President

[CORPORATE SEAL]

FWA DRILLING COMPANY, INC.

By:/s/ P. BLAKE DUPUIS
---------------------------------------
P. Blake DuPuis, Vice President
[CORPORATE SEAL]

VIERSEN & COCHRAN DRILLING COMPANY

By:/s/ P. BLAKE DUPUIS
---------------------------------------
P. Blake DuPuis, Vice President
[CORPORATE SEAL]

MELLON BANK, N.A.

By:/s/ P. BLAKE DUPUIS
---------------------------------------
Jacob E. Reiter, First Vice President

<PAGE> 1
EXHIBIT 10.3

LOAN AND SECURITY AGREEMENT

THIS LOAN AND SECURITY AGREEMENT (the "AGREEMENT") is made effective
the 23rd day of January, 1997, by and among FWA DRILLING COMPANY, INC. ("FWA"),
INTERNATIONAL PETROLEUM SERVICE COMPANY ("IPSCO"), TRIAD DRILLING COMPANY
("TRIAD"), UNIVERSAL WELL SERVICES, INC. ("UNIVERSAL"), USC, INCORPORATED
("USC"), UTI ENERGY CORP. ("UTI"), UTICO, INC. ("UTICO"), VIERSEN & COCHRAN
DRILLING COMPANY ("VIERSEN") and MELLON BANK, N.A. ("BANK"). FWA, IPSCO,
Triad, Universal, USC, UTI, UTICO and Viersen are hereinafter sometimes
collectively referred to as the "BORROWERS" and individually as a "BORROWER".

BACKGROUND

A. Pursuant to that certain Amended and Restated Loan and
Security Agreement dated December 7, 1995 (as it may be amended from time to
time, the "PRIOR LOAN AGREEMENT"), FWA, IPSCO, Triad, Universal and USC
(collectively, the "PRIOR BORROWERS") requested and Bank agreed to extend to
the Prior Borrowers certain credit facilities as further described in the Prior
Loan Agreement.

B. Pursuant to those certain Surety Agreements dated December 7,
1995 (for UTI and UTICO) and August 15, 1996 (for Viersen) (collectively, the
"PRIOR SURETY AGREEMENTS"), UTI, UTICO and Viersen agreed to act as surety for
and guarantee the obligations of the Prior Borrowers under the Prior Loan
Documents (as hereinafter defined). The Prior Loan Agreement, the Prior Surety
Agreements and all other documents executed in connection therewith may
hereinafter be collectively referred to as the "PRIOR LOAN DOCUMENTS".

C. Borrowers have requested that Bank extend a certain credit
facility to Borrowers, which Bank is willing to do on the terms set forth
herein.

D. Capitalized terms not otherwise defined herein will have the
meanings set forth therefor in SECTION 13 of this Agreement. Capitalized terms
not otherwise defined in SECTION 13 of this Agreement shall have the meanings
set forth therefor in the Prior Loan Agreement.

NOW, THEREFORE, in consideration of the terms and conditions contained
herein, and of any extensions of credit now or hereafter made to or for the
benefit of Borrowers by Bank, the parties hereto, intending to be legally bound
hereby, agree as follows:

1. THE LOAN; USE OF PROCEEDS.

1.1 THE LOAN. Bank will lend to Borrowers and Borrowers will
borrow from Bank the aggregate amount of Four Million Dollars
($4,000,000.00)(the "LOAN"). Borrower's obligation to repay the Loan shall be
evidenced by Borrower's promissory note in the face amount of Four Million
Dollars ($4,000,000.00)(the "NOTE"), which shall be in the form attached hereto
as EXHIBIT "A", with the blanks appropriately filled in.
<PAGE> 2
1.2 SAVINGS CLAUSE. Anything contained in this Agreement or any
other Loan Documents to the contrary notwithstanding, the obligations of each
Borrower with respect to the repayment of advances under the Loan to another
Borrower shall be limited to the lesser of: (i) the total amount of such
advances, or (ii) a maximum aggregate amount equal to the largest amount that
would not render its obligations with respect thereto subject to avoidance as a
fraudulent transfer or conveyance under Section 548 of Title 11 of the United
States Code or any applicable provisions of comparable state law (collectively,
the "FRAUDULENT TRANSFER LAWS"), if and to the extent such Borrower (or trustee
on its behalf) has properly invoked the protections of the Fraudulent Transfer
Laws. In making such determination, all rights of subrogation and contribution
of a Borrower with respect to such obligations shall be deemed to be an asset
of such Borrower.

1.3 USE OF PROCEEDS. The proceeds of the Loan shall be advanced
to Triad on behalf of all Borrowers in accordance with procedures acceptable to
Bank. Borrowers agree that the proceeds of the Loan shall be used to partially
fund the purchase by Triad of certain assets of Quarles Drilling Corporation
(the "SELLER"), as further described in that certain Asset Purchase Agreement
between UTI and Seller dated December 31, 1996 (the "ASSET PURCHASE
AGREEMENT").

1.4 CLOSING. Closing hereunder will take place at a time and
place mutually acceptable to Borrowers and Bank effective on the date of this
Agreement.

2. INTEREST RATE.

2.1 INTEREST ON THE LOAN. Interest on the unpaid principal
balance of the Loan will accrue until final payment thereof at the rate per
annum which is equal to the Prime Rate in effect from time to time (such
interest rate to change immediately upon any change in the Prime Rate).

2.2 DEFAULT INTEREST. Interest will accrue on the principal
balance of the Loan after the occurrence of an Event of Default at a rate which
is four percent (4%) in excess of the non-default rate otherwise set forth
above for the Loan.

2.3 POST JUDGMENT INTEREST. Any judgment obtained for sums due
hereunder or under the Loan Documents will accrue interest at the applicable
default rate set forth above until paid.

2.4 CALCULATION. Interest will be computed on the basis of a year
of 365/366 days and paid for the actual number of days elapsed.

2.5 LIMITATION OF INTEREST TO MAXIMUM LAWFUL RATE. In no event
will the rate of interest payable hereunder exceed the maximum rate of interest
permitted to be charged by applicable law (including the choice of law rules)
and any interest paid in excess of the permitted rate will be refunded to
Borrowers. Such refund will be made by application of the excessive amount of
interest paid against any sums outstanding hereunder and will be applied in
such order as Bank may determine. If the excessive amount of interest paid
exceeds the sums outstanding, the portion exceeding the sums outstanding will
be refunded in cash by Bank. Any such crediting or refunding will not cure or
waive any default by Borrowers. Borrowers agree, however, that in determining
whether or not any interest payable hereunder exceeds the highest rate
permitted by law, any non-

2
<PAGE> 3
principal payment, including without limitation late charges, will be deemed to
the extent permitted by law to be an expense, fee, premium or penalty rather
than interest.

3. PAYMENTS AND FEES.

3.1 INTEREST PAYMENTS ON THE LOAN. Borrowers will pay interest on
the outstanding principal balance of the Loan monthly, on the first day of each
calendar month commencing the first day of the first calendar month following
the date hereof.

3.2 PRINCIPAL PAYMENTS ON THE LOAN. Borrower will pay the
principal of the Loan in seven (7) equal and consecutive quarterly installments
of Five Hundred Thousand Dollars ($500,000.00) each, on January 23, April 23,
July 23 and October 23 of each calendar year commencing on April 23, 1997, and
in one final payment of the remaining principal balance plus all accrued and
unpaid interest thereon on January 23, 1999.

3.3 LATE CHARGE. In the event that Borrowers fail to pay any
principal, interest or other fees or expenses payable hereunder for a period of
at least fifteen (15) days, in addition to paying such sums, Borrowers will pay
to Bank a late charge equal to five percent (5%), of such past due payment as
compensation for the expenses incident to such past due payment.

3.4 PREPAYMENT OF LOAN. Borrowers may prepay all or any part of
the principal balance of the Loan without any premium or fee, at any time,
following delivery of not less than fifteen (15) days prior written notice to
Bank. All prepayments will be applied to the regularly scheduled payments in
the inverse order in which they are due

3.5 MANDATORY PREPAYMENT. In the event the Line is terminated as a
result of an Event of Default, expiration of the Contract Period, or otherwise,
the outstanding balance of the Term Loan, together with any accrued and unpaid
interest thereon and any other sums due pursuant to the terms hereof shall be
due and payable immediately.

3.6 PAYMENT METHOD. Borrowers irrevocably authorize Bank to debit
all payments required to be made by Borrowers hereunder, under the Loan, on the
date due, from any deposit account maintained by any Borrower with Bank.
Otherwise, Borrowers will be obligated to make such payments directly to Bank.
All payments are to be made in immediately available funds. If Bank accepts
payment in any other form, such payment shall not be deemed to have been made
until the funds comprising such payment have actually been received by or made
available to Bank.

3.7 APPLICATION OF PAYMENTS. Any and all payments on account of
the Loan will be applied to accrued and unpaid interest, outstanding principal
and other sums due hereunder or under the Loan Documents, in such order as
Bank, in its discretion, elects. If Borrowers make a payment or payments and
such payment or payments, or any part thereof, are subsequently invalidated,
declared to be fraudulent or preferential, set aside or are required to be
repaid to a trustee, receiver, or any other person under any bankruptcy act,
state or federal law, common law or equitable cause, then to the extent of such
payment or payments, the obligations or part thereof hereunder intended

3
<PAGE> 4
to be satisfied shall be revived and continued in full force and effect as if
said payment or payments had not been made.

3.8 LOAN ACCOUNT. Bank will open and maintain on its books a loan
account (the "LOAN ACCOUNT") with respect to advances made, repayments,
prepayments, the computation and payment of interest and fees and the
computation and final payment of all other amounts due and sums paid to Bank
under this Agreement. Except in the case of manifest error in computation, the
Loan Account will be conclusive and binding on the Borrowers as to the amount
at any time due to Bank from Borrowers under this Agreement or the Note.

3.9 INDEMNITY; LOSS OF MARGIN. Borrowers will indemnify Bank
against any loss or expense which Bank sustains or incurs as a consequence of
an Event of Default, including, without limitation, any failure of Borrowers to
pay when due (at maturity, by acceleration or otherwise) any principal,
interest, fee or any other amount due under this Agreement or the other Loan
Documents. If Bank sustains or incurs any such loss or expense it will from
time to time notify Borrowers in writing of the amount reasonably determined in
good faith by the Bank to be necessary to indemnify Bank for the loss or
expense. Such amount will be due and payable by Borrowers to Bank within ten
(10) days after presentation by Bank of a statement setting forth a brief
explanation of and Bank's calculation of such amount, which statement shall be
conclusively deemed correct absent manifest error. Any amount payable to the
Bank under this section will bear interest at the default rate payable under
the Loan from the due date until paid, both before and after judgment.

In the event that any future law, rule, regulation, treaty or official
directive, interpretation or application by any central bank, monetary
authority or governmental authority, or the future compliance with any
guideline or request of any central bank, monetary authority or governmental
authority (whether or not having the force of law):

(a) subjects Bank to any tax with respect to any amounts
payable under this Agreement or the other Loan Documents by Borrowers or
otherwise with respect to the transactions contemplated under this Agreement or
the other Loan Documents (except for taxes on the overall net income of Bank
imposed by the United States of America or any political subdivision thereof);
or

(b) imposes, modifies or deems applicable any deposit
insurance, reserve, special deposit, capital maintenance, capital adequacy, or
similar requirement against assets held by, or deposits in or for the account
of, or loans or advances or commitment to make loans or advances by the Bank;
or

(c) imposes upon Bank any other condition with respect to
advances or extensions of credit or the commitment to make advances or
extensions of credit under this Agreement, and the result of any of the
foregoing is to increase the costs of Bank, reduce the income receivable by or
return on equity of Bank or impose any expense upon Bank with respect to any
advances or extensions of credit or commitments to make advances or extensions
of credit under this Agreement, Bank shall so notify Borrowers in writing.
Borrowers agree to pay Bank the amount of such increase in cost, reduction in
income, reduced return on equity or capital, or additional expense within ten

4
<PAGE> 5
(10) days after presentation by Bank of a statement concerning such increase in
cost, reduction in income, reduced return on equity or capital, or additional
expense. Such statement shall set forth a brief explanation of the amount and
Bank's calculation of the amount (in determining such amount the Bank may use
any reasonable averaging and attribution methods), which statement shall be
conclusively deemed correct absent manifest error. If the amount set forth in
such statement is not paid within ten (10) days after such presentation of such
statement, interest will be payable on the unpaid amount at the default rate
payable under the Loan from the due date until paid, both before and after
judgment.

4. SECURITY. As security for the full and timely payment and performance
of the Bank Indebtedness, each Borrower hereby ratifies, confirms and grants to
Bank a security interest in all of the following (collectively, the
"COLLATERAL"):

(a) All of such Borrower's present and future accounts,
contract rights, chattel paper, instruments and documents and all other rights
to the payment of money whether or not yet earned, for services rendered or
goods sold, consigned, leased or furnished by such Borrower or otherwise,
together with (i) all goods (including any returned, rejected, repossessed or
consigned goods), the sale, consignment, lease or other furnishings of which
shall be given or may give rise to any of the foregoing, (ii) all of such
Borrower's rights as a consignor, consignee, unpaid vendor or other lienor in
connection therewith, including stoppage in transit, set-off, detinue, replevin
and reclamation, (ill) all general intangibles related thereto, (iv) all
guaranties, mortgages, security interests, assignments, and other encumbrances
on real or personal property, leases and other agreements or property securing
or relating to any accounts, (v) choses-in-action, claims and judgments, (vi)
any return or unearned premiums, which may be due upon cancellation of any
insurance policies, and (vii) all products and proceeds of any of the
foregoing.

(b) All of such Borrower's present and future inventory
(including but not limited to goods held for sale or lease or furnished or to
be furnished under contracts for service, raw materials, work-in-process,
finished goods and goods used or consumed in such Borrower's business) whether
owned, consigned or held on consignment, together with all merchandise,
component materials, supplies, packing, packaging and shipping materials, and
all returned, rejected or repossessed goods sold, consigned, leased or
otherwise furnished by such Borrower, all documents of title covering any of
such goods or inventory and all products and proceeds of any of the foregoing.

(c) All of such Borrower's present and future general
intangibles related to or useful in the sale of such Borrower's inventory or
the collection of such Borrower's accounts or constituting a right or claim by
such Borrower to receive payments of any nature, and all products and proceeds
of any of the foregoing.

(d) All of such Borrower's present and future drilling
rigs, wells and production equipment, machinery, equipment, tools, pipe and
spare parts, together with all parts, substitutions, accretions, accessions,
attachments, accessories, additions, components and replacements thereof, all
documents of title covering any of such items and all manuals of operation,
maintenance or repair, and all products and proceeds of any of the foregoing.

5
<PAGE> 6
(e) All of such Borrower's present and future general
ledger sheets, files, records, customer lists, books of account, invoices,
bills, certificates or documents of ownership, bills of sale, business papers,
correspondence, credit files, tapes, cards, computer runs and all other data
and data storage systems whether in the possession of any Borrower or any
service bureau.

(f) All letters of credit now existing or hereafter
issued naming any Borrower as a beneficiary or assigned to any Borrower,
including the right to receive payment thereunder, and all documents and
records associated therewith.

(g) All deposits, funds, instruments, documents,
policies, evidences and certificates of insurance, securities, chattel paper
and other assets of such Borrower or in which such Borrower has an interest and
all proceeds thereof, now or at any time hereafter on deposit with or in the
possession or control of Bank or owing by Bank to such Borrower or in transit
by mail or carrier to Bank or in the possession of any other Person acting on
Bank's behalf, without regard to whether Bank received the same in pledge, for
safekeeping, as agent for collection or otherwise, or whether Bank has
conditionally released the same, and in all assets of such Borrower in which
Bank now has or may at any time hereafter obtain a lien, mortgage, or security
interest for any reason.

In addition to Borrowers' obligations under the Prior Loan Documents,
Borrowers agree that the Collateral shall also secure Borrowers' obligations to
Bank under this Agreement. IT IS THE EXPRESS INTENT OF BORROWERS THAT THE
COLLATERAL SHALL SECURE NOT ONLY THE OBLIGATIONS UNDER THE LOAN DOCUMENTS AND
THE PRIOR LOAN DOCUMENTS, BUT ALSO ALL OTHER PRESENT AND FUTURE OBLIGATIONS OF
EACH BORROWER TO BANK. Borrowers acknowledge and agree that all security
interests granted to Bank pursuant to the Prior Loan Agreement are continued
and remain in effect, that the Bank's lien position with respect to the
Collateral shall relate back to the date referenced in the Prior Loan Agreement
and that all financing statements previously filed with respect to the
Collateral shall remain in full force and effect.

Notwithstanding the foregoing, the security interest granted in this
SECTION 4 shall not include and the Collateral shall not include: (i) drilling
rigs, and all proceeds thereof, in which The CIT Group/Equipment Financing,
Inc. ("CIT") currently holds a security interest under the CIT Loan Documents,
and (ii) the Collateral Assets securing that certain promissory note in the
original principal amount of Eight Million Dollars ($8,000,000.00) dated August
14, 1996 made by UTI payable to the order of Viersen (the "VIERSEN NOTE").

5. REPRESENTATIONS AND WARRANTIES. Borrowers represent and warrant as
follows:

5.1 CONFIRMATION OF PRIOR REPRESENTATIONS AND WARRANTIES. All
representations and warranties of Obligors as set forth in SECTION 5 of the
Prior Loan Agreement are true and complete as of the date hereof.

5.2 TITLE TO ACQUIRED ASSETS. The assets acquired by Triad
pursuant to the Asset Purchase Agreement (collectively, the "ACQUIRED ASSETS")
are and will be owned by Triad free and

6
<PAGE> 7
clear of all liens and other encumbrances of any kind, except liens in favor of
the Bank. The Acquired Assets shall constitute part of the Collateral, and
Borrower will defend the Collateral against any claims of all persons or
entities other than the Bank.

5.3 DUE AUTHORIZATION; NO LEGAL RESTRICTIONS. The execution and
delivery by Borrowers of the Loan Documents, the consummation of the
transactions contemplated by the Loan Documents and the fulfillment and
compliance with the respective terms, conditions and provisions of the Loan
Documents: (a) have been duly authorized by all requisite corporate action of
each Borrower, (b) will not conflict with or result in a breach of, or
constitute a default (or might, upon the passage of time or the giving of
notice or both, constitute a default) under, any of the terms, conditions or
provisions of any applicable statute, law, rule, regulation or ordinance or any
Borrower's Certificate or Articles of Incorporation or By-laws, or any
indenture, mortgage, loan or credit agreement or instrument to which any
Borrower is a party or by which it may be bound or affected, or any judgment or
order of any court or governmental department, commission, board, bureau,
agency or instrumentality, domestic or foreign, and (c) will not result in the
creation or imposition of any lien, charge or encumbrance of any nature
whatsoever upon any of the property or assets of any Borrower under the terms
or provisions of any such agreement or instrument, except liens in favor of
Bank.

5.4 ENFORCEABILITY. The Loan Documents have been duly executed by
Borrowers and delivered to Bank and constitute legal, valid and binding
obligations of Borrowers, enforceable in accordance with their terms.

5.5 GOVERNMENTAL CONSENTS. No consent, approval or authorization
of or designation, declaration or filing with any governmental authority on the
part of Borrowers are required in connection with the execution, delivery or
performance by Borrowers of the Loan Documents or the consummation of the
transactions contemplated thereby.

5.6 CURRENT COMPLIANCE. Borrowers are currently in compliance
with all of the terms and conditions of the Loan Documents.

5.7. INTERRELATEDNESS OF BORROWERS. The business operations of
Borrowers are interrelated and complement one another, and such entities have a
common business purpose, with intercompany bookkeeping and accounting
adjustments used to separate their respective properties, liabilities, and
transactions. To permit their uninterrupted and continuous operations, such
entities now require and will from time to time hereafter require funds and
credit accommodations for general business purposes. The proceeds of advances
under the Loan will directly or indirectly benefit each Borrower hereunder,
severally and jointly, regardless of which Borrower requests or receives part
or all of the proceeds of such advances. The Acquired Assets, although owned
by Triad, will be used by or for the benefit of all Borrowers from time to
time.

5.8 ACCURACY OF REPRESENTATIONS AND WARRANTIES. No representation
or warranty by Borrowers contained herein or in any certificate or other
document furnished by Borrowers pursuant hereto or in connection herewith fails
to contain any statement of material fact necessary to make such representation
or warranty not misleading in light of the circumstances under which it was

7
<PAGE> 8
made. There is no fact which any Borrower knows and has not disclosed to Bank,
which does or may materially and adversely affect any Borrower or any of their
operations.

5.9 DRILLING RIGS AND RELATED EQUIPMENT. All drilling rigs and
related drilling equipment (collectively, the "DRILLING EQUIPMENT") used by
Borrowers in drilling operations on their own behalf or on behalf of their
customers are owned by the entities described on SCHEDULE 5.9 attached hereto.
SCHEDULE 5.9 sets forth the owner of the Drilling Equipment, the states in
which the Drilling Equipment is located and any Person that holds a lien or
encumbrance against the Drilling Equipment. Except for liens permitted under
SECTION 6.9 of the Prior Loan Agreement, such Drilling Equipment is free and
clear of all other liens and encumbrances.

6. GENERAL COVENANTS. Except with the prior written consent of Bank,
Borrowers will comply with the following:

6.1 CONFIRMATION OF PRIOR GENERAL COVENANTS. Borrowers
acknowledge, confirm and agree to comply with all covenants of Obligors as set
forth in SECTION 6 of the Prior Loan Agreement.

6.2 RESTRICTIONS ON USE OF PROCEEDS. No Borrower will carry or
purchase with the proceeds of the Loan any "margin security" within the meaning
of Regulations U, G, T or X of the Board of Governors of the Federal Reserve
System.

6.3 DRILLING EQUIPMENT. With respect to the Drilling Equipment:

(i) Bank may at any reasonable time inspect the Drilling
Equipment in which Bank now has or may hereafter acquire a security interest
(collectively, the "ENCUMBERED EQUIPMENT").

(ii) The Encumbered Equipment shall at all times remain
separately identifiable personal property and shall not become affixed to real
property so as to become a fixture.

(iii) If requested by Bank, in writing, Borrowers will
attach to the Encumbered Equipment a notice satisfactory to Bank, disclosing
Bank's security interest in the Encumbered Equipment.

(iv) Borrowers will not move any of the Encumbered
Equipment owned by a Borrower out of any of the states described in SCHEDULE
5.9 attached hereto or any of the other states in which Bank has filed UCC
financing statements naming the owner of such Encumbered Equipment, as debtor,
and describing such Encumbered Equipment as collateral, unless such Borrower
notifies Bank and provides Bank with duly executed financing statements to
perfect Bank's security interest in such Encumbered Equipment upon filing in
such new state.

7. FINANCIAL COVENANTS. Except with the prior written consent of Bank,
Borrowers will comply with the financial covenants of Obligors as set forth in
SECTION 7 of the Prior Loan Agreement.

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8. ACCOUNTING RECORDS, REPORTS AND FINANCIAL STATEMENTS.

8.1 CONFIRMATION OF PRIOR REPORTING REQUIREMENTS. Borrowers agree
to comply with the financial reporting and other requirements of Obligors as
set forth in SECTION 8 of the Prior Loan Agreement.

9. ENVIRONMENTAL REPRESENTATIONS AND COVENANTS.

9.1 CONFIRMATION OF PRIOR REPRESENTATIONS. Borrowers represent
and warrant that all representations of Obligors as set forth in SECTION 9 of
the Prior Loan Agreement are true and complete as of the date hereof.

9.2 CONFIRMATION OF PRIOR COVENANTS. Borrowers acknowledge,
confirm and agree to comply with all environmental covenants and other
obligations of Obligors as set forth in SECTION 9 of the Prior Loan Agreement.

10. CONDITIONS OF CLOSING. The obligation of Bank to make available the
Loan is subject to the performance by Borrowers of all of their agreements to
be performed hereunder and to the following further conditions (any of which
may be waived by Bank):

10.1 LOAN DOCUMENTS. Borrowers and all other required persons and
entities will have executed and delivered to Bank the Loan Documents.

10.2 REPRESENTATIONS AND WARRANTIES. All representations and
warranties of Borrowers set forth in the Loan Documents and the Prior Loan
Documents will be true at and as of the date hereof.

10.3 NO DEFAULT. No condition or event shall exist or have
occurred which would constitute an Event of Default hereunder or under the
Prior Loan Documents (or would, upon the giving of notice or the passage of
time or both, constitute such an Event of Default).

10.4 PROCEEDINGS AND DOCUMENTS. All proceedings taken by Borrowers
in connection with the transactions contemplated by this Agreement and all
documents incident to such transactions shall be satisfactory in form and
substance to Bank and Bank's counsel, and Bank shall have received all
documents or other evidence which it reasonably may request in connection with
such proceedings and transactions. Each Borrower shall have delivered to Bank
a certificate, in form and substance satisfactory to Bank, dated the date
hereof and signed on behalf of that Borrower by an officer of that Borrower,
certifying (a) true copies of the Articles of Incorporation and Bylaws of that
Borrower in effect on such date, (b) true copies of all corporate actions taken
by that Borrower relative to the Loan Documents, and (c) the names, true
signatures and incumbency of the officers of that Borrower authorized to
execute and deliver this Agreement and the other Loan Documents. Bank may
conclusively rely on such certificate unless and until a later certificate
revising the prior certificate has been received by Bank.

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10.5 DELIVERY OF OTHER DOCUMENTS. The following documents shall
have been delivered by or on behalf of Borrowers to Bank:

(a) GOOD STANDING CERTIFICATES. A good standing
certificate certifying to the good standing and corporate status of each
Borrower in its state of incorporation, good standing/foreign qualification
certificates from all other jurisdictions in which Borrowers are required to be
qualified to do business, as the Bank may require.

(b) AUTHORIZATION DOCUMENTS. Evidence of
authorization of each Borrower's execution and full performance of this
Agreement, the Loan Documents and all other documents and actions required
hereunder.

(c) LANDLORD'S RELEASE AND WAIVER AGREEMENTS.
Bank shall have received a landlord's release and waiver agreement,
satisfactory in form and substance to Bank, from each landlord for each
location leased by any Borrower at which the Acquired Assets are located.

(d) OPINION OF COUNSEL. An opinion of counsel
for Borrowers in form and content satisfactory to Bank.

(e) ASSET PURCHASE AGREEMENT. A copy of the
fully executed Asset Purchase Agreement.

(f) ASSIGNMENT OF RIGHTS. An Assignment of
Rights, satisfactory to Bank, assigning Triad's rights under the Asset Purchase
Agreement to Bank.

(g) LIEN SEARCH. Copies of record searches
(including UCC searches and judgments, suits, tax and other lien searches)
confirming that Bank has a first priority security interest in the Acquired
Assets acceptable to Bank.

(h) OTHER DOCUMENTS. Such other documents as may
be required to be submitted to Bank by the terms hereof or of any of the Loan
Documents.

10.6 NON-WAIVER OF RIGHTS. By completing the closing hereunder,
or by making advances hereunder, Bank does not thereby waive a breach of any
warranty or representation made by any Borrower hereunder or any agreement,
document, or instrument delivered to Bank or otherwise referred to herein, and
any claims and rights of Bank resulting from any breach or misrepresentation by
any Borrower are specifically reserved by Bank.

11. DEFAULT AND REMEDIES.

11.1 EVENTS OF DEFAULT. The occurrence of any one or more of the
following events shall constitute an Event or Events of Default hereunder:

(a) the failure of Borrowers to pay any amount of
principal or interest on the Note, or any fee or other sums payable hereunder,
or any other Bank Indebtedness on the date on

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<PAGE> 11
which such payment is due, whether on demand, at the stated maturity or due
date therefor by reason of any requirement for the prepayment thereof, by
acceleration or otherwise, provided that, with respect to payments of sums
other than principal and interest, such failure to pay continues unremedied for
a period of ten (10) days after such sums are first due;

(b) The failure of any Borrower to duly perform or
observe any obligation, covenant or agreement on its part contained herein,
under the Prior Loan Agreement, or in any other Loan Document, provided that,
notwithstanding the foregoing, Borrowers' failure to comply with the provisions
of SECTIONS 6.4, 6.11, 6.12 (other than the requirement that insurance coverage
be maintained at all times), 8.3 AND 8.8 of the Prior Loan Agreement shall not
constitute an Event of Default hereunder unless such failure to comply
continues unremedied for a period of fifteen (15) days after the earlier of (i)
any Borrower receives notice from Bank of such failure, or (ii) a responsible
officer of any Borrower has actual notice of such failure; or

11.2 REMEDIES. At the option of the Bank, upon the occurrence of
an Event of Default, or at any time thereafter:

(a) The entire unpaid principal of the Loan, all other
Bank Indebtedness, or any part thereof, all interest accrued thereon, all fees
due hereunder and all other obligations of Borrowers to Bank hereunder or under
any other agreement, note or otherwise arising will become immediately due and
payable without any further demand or notice;

(b) Bank may increase the interest rate on the Loan to
the default rate set forth herein, without notice;

(d) Bank may enter the premises occupied by any Borrower
and take possession of the Collateral and any records relating thereto; and/or

(e) Bank may exercise each and every right and remedy
granted to it under the Loan Documents, the Prior Loan Documents, under the
Uniform Commercial Code and under any other applicable law or at equity.

If an Event of Default occurs under SECTION 12.1(E) or (F) of the
Prior Loan Agreement, all Bank Indebtedness shall become immediately due and
payable.

11.3 SET-OFF. Without limiting the rights of Bank under applicable
law, Bank has and may exercise a right of set-off, a lien against and a
security interest in all property of any Borrower now or at any time in Bank's
possession in any capacity whatsoever, including but not limited to any balance
of any deposit, trust or agency account, or any other bank account with Bank,
as security for all Bank Indebtedness. At any time and from time to time
following the occurrence of an Event

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of Default, or any event which with the giving of notice or passage of time or
both would constitute an Event of Default, Bank may without notice or demand,
set off and apply any and all deposits (general or special, time or demand,
provisional or final) at any time held and other indebtedness at any time owing
by Bank to or for the credit of any Borrower against any or all of the Bank
Indebtedness and each Borrower's obligations under the Loan Documents.

11.4 TURNOVER OF PROPERTY HELD BY BANK. Each Borrower irrevocably
authorizes any Affiliate of Bank, upon and following the occurrence of an Event
of Default, at the request of Bank and without further notice, to turnover to
Bank any property of any Borrower held by such Affiliate, including without
limitation, funds and securities for any Borrower's account and to debit, for
the benefit of Bank, any deposit account maintained by any Borrower with such
Affiliate (even if such deposit account is not then due or there results a loss
or reduction of interest or the imposition of a penalty in accordance with law
applicable to the early withdrawal of time deposits), in the amount requested
by Bank up to the amount of the Bank Indebtedness, and to pay or transfer such
amount or property to Bank for application to the Bank Indebtedness.

11.5 DELAY OR OMISSION NOT WAIVER. Neither the failure nor any
delay on the part of Bank to exercise any right, remedy, power or privilege
under the Loan Documents upon the occurrence of any Event of Default or
otherwise shall operate as a waiver thereof or impair any such right, remedy,
power or privilege. No waiver of any Event of Default shall affect any later
Event of Default or shall impair any rights of Bank. No single, partial or
full exercise of any rights, remedies, powers and privileges by the Bank shall
preclude further or other exercise thereof. No course of dealing between Bank
and Borrowers shall operate as or be deemed to constitute a waiver of Bank's
rights under the Loan Documents or affect the duties or obligations of
Borrowers.

11.6 REMEDIES CUMULATIVE; CONSENTS. The rights, remedies, powers
and privileges provided for herein shall not be deemed exclusive, but shall be
cumulative and shall be in addition to all other rights, remedies, powers and
privileges in Bank's favor at law or in equity. Whenever the Bank's consent or
approval is required or permitted, such consent or approval shall be at the
sole and absolute discretion of Bank.

11.7 CERTAIN FEES, COSTS, EXPENSE EXPENDITURES AND INDEMNIFICATION.
Each Borrower agrees to pay on demand all costs and expenses of Bank, including
without limitation:

(a) all costs and expenses in connection with (i) the
preparation, review, negotiation, execution, delivery and administration of the
Loan Documents, and the other documents to be delivered in connection
therewith, or any waivers, consents, amendments, extensions and increases to
any of the foregoing, (ii) the preparation for, negotiations regarding,
consultations concerning, or the defense or prosecution of legal proceedings
involving any claims made or threatened against Bank arising out of or related
to the Loan Documents, the transactions contemplated hereunder as to the
protection of any of the Collateral, or (iii) obtaining any appraisals or
reappraisals of Collateral, periodic lien searches and tax clearance
certificates, as Bank in its discretion deems necessary (including in all
cases, without limitation, attorney's fees and expenses);

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<PAGE> 13
(b) all losses, costs and expenses in connection with the
interpretation, enforcement, protection and preservation of the Bank's rights
or remedies under the Loan Documents, or any other agreement relating to any
Bank Indebtedness, or in connection with legal advice relating to the rights or
responsibilities of Bank (including without limitation court costs, attorney's
fees, expenses of accountants and appraiser and the cost of all appeals); and

(c) any and all stamp and other taxes payable or
determined to be payable in connection with the execution and delivery of the
Loan Documents, and all liabilities to which Bank may become subject as the
result of delay in paying or omission to pay such taxes.

In the event any Borrower shall fail to pay taxes, insurance,
assessments, costs or expenses which it is required to pay hereunder, or fails
to keep the Collateral free from security interests or lien (except as
expressly permitted herein), or fails to maintain or repair the Collateral as
required hereby, or otherwise breaches any obligations under the Loan
Documents, Bank in its discretion, may make expenditures for such purposes and
the amount so expended (including attorney's fees and expenses, filing fees and
other charges) shall be payable by Borrowers on demand and shall constitute
part of the Bank Indebtedness.

With respect to any amount required to be paid by Borrowers under this
section, in the event Borrowers fails to pay such amount on demand, Borrowers
shall also pay to Bank interest thereon at the default rate set forth for the
Loan.

Borrowers agree to indemnity and hold harmless, Bank and Bank's
officers, directors, shareholders, employees and agents, from and against any
and all claims, liabilities, losses, damages, costs and expenses (whether or
not such Person is a party to any litigation), including attorney's fees and
costs and costs of investigation, document production, attendance at
depositions or other discovery with respect to or arising out of this
Agreement, the use of any proceeds advanced hereunder, the transactions
contemplated hereunder, or any claim, demand, action or cause of action being
asserted against any Borrower or any of its Affiliates.

Borrowers' obligations under this section shall survive termination of
this Agreement and repayment of the Bank Indebtedness.

11.8 TIME IS OF THE ESSENCE. Time is of the essence in Borrowers'
performance of their obligations under the Loan Documents.

11.9 ACKNOWLEDGEMENT OF CONFESSION OF JUDGMENT PROVISIONS.
BORROWERS ACKNOWLEDGE AND AGREE THAT THE NOTE AND THE LOAN DOCUMENTS CONTAIN
PROVISIONS WHEREBY BANK MAY ENTER JUDGMENT BY CONFESSION AGAINST BORROWERS.
BEING FULLY AWARE OF THEIR RIGHTS TO PRIOR NOTICE AND HEARING ON THE QUESTION
OF THE VALIDITY OF ANY CLAIMS THAT MAY BE ASSERTED AGAINST THEM BY BANK UNDER
THE NOTE AND LOAN DOCUMENTS, BEFORE JUDGMENT CAN BE ENTERED, BORROWERS HEREBY
WAIVE THESE RIGHTS AND AGREE AND CONSENT TO BANK ENTERING JUDGMENT AGAINST
BORROWERS BY CONFESSION. ANY PROVISION IN A CONFESSION OF JUDGMENT IN ANY OF
THE

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LOAN DOCUMENTS FOR AN ATTORNEY'S COLLECTION COMMISSION SHALL IN NO WAY LIMIT
BORROWERS' LIABILITY TO REIMBURSE BANK FOR ALL LEGAL FEES ACTUALLY INCURRED BY
BANK, EVEN IF SUCH FEES ARE IN EXCESS OF THE ATTORNEY'S COLLECTION COMMISSION
PROVIDED FOR IN SUCH CONFESSION OF JUDGMENT.

12. COMMUNICATIONS AND NOTICES. All notices, requests and other
communications made or given in connection with the Loan Documents shall be in
writing and, unless receipt is stated herein to be required, shall be deemed to
have been validly given if delivered personally to the individual or division
or department to whose attention notices to a party are to be addressed, or by
private carrier, or registered or certified mail, return receipt requested, in
all cases, with charges prepaid, addressed as follows, until some other address
(or individual or division or department for attention) shall have been
designated by notice given by one party to the other:

To Borrower:

UTI Energy Corp.
485 Devon Park Drive, Suite 112
Wayne, PA 19087
Attention: Blake DuPuis, Chief Financial Officer

To Bank:

Mellon Bank, N.A.
Plymouth Meeting Executive Campus
610 West Germantown Pike, Suite 200
Plymouth Meeting, PA 19462
Attention: Jacob E. Reiter, First Vice President

ALL "PAYMENT IN FULL" CHECKS OR OTHER MEDIA OF PAYMENT MUST BE SENT TO
BANK ONLY TO THE ABOVE ADDRESS.

13. DEFINITIONS. The following words and phrases as used in capitalized
form in this Agreement, whether in the singular or plural, shall have the
meanings indicated:

13.1 "ACCOUNTING TERMS". As used in this Agreement, or any
certificate, report or other document made or delivered pursuant to this
Agreement, accounting terms not defined elsewhere in this Agreement shall have
the respective meanings given to them under GAAP.

13.2 "AFFILIATE", as to any Person, means each other Person that
directly or indirectly through one or more intermediaries, controls, or is
controlled by, or is under common control with, the Person in question.

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<PAGE> 15
13.3 "BANK INDEBTEDNESS" shall mean all obligations and
Indebtedness of any Borrower to Bank, whether now or hereafter owing or
existing, including, without limitation, all obligations under the Loan
Documents and the Prior Loan Documents, all obligations to reimburse Bank for
payments made by Bank pursuant to any letter of credit issued for the account
or benefit of any Borrower by Bank, all other obligations or undertakings now
or hereafter made by or for the benefit of any Borrower to or for the benefit
of Bank under any other agreement, promissory note or undertaking now existing
or hereafter entered into by any Borrower with Bank, including, without
limitation, all obligations of any Borrower to Bank under any guaranty or
surety agreement and all obligations of any Borrower to immediately pay to Bank
the amount of any overdraft on any deposit account maintained with Bank,
together with all interest and other sums payable in connection with any of the
foregoing.

13.4 "BUSINESS DAY" means any day except a Saturday, Sunday or
other day on which commercial banks in Pennsylvania are authorized by law to
close.

13.5 "COLLATERAL ASSETS" means the Assets, as defined in the Stock
Purchase Agreement, securing the Viersen Note.

13.6 "CORPORATION" means a corporation, partnership, trust,
unincorporated organization, association, joint stock company, limited
liability company or other legal entity.

13.7 "EVENT OF DEFAULT" means each of the events specified in
SECTION 11.1.

13.8 "GAAP" means generally accepted accounting principles in the
United States of America, in effect from time to time, consistently applied and
maintained.

13.9 "INDEBTEDNESS", as applied to a Person, means:

(a) all items (except items of capital stock or of
surplus) which in accordance with GAAP would be included in determining total
liabilities as shown on the liability side of a balance sheet of such Person as
at the date as of which Indebtedness is to be determined;

(b) to the extent not included in the foregoing, all
indebtedness, obligations, and liabilities secured by any mortgage, pledge,
lien, conditional sale or other title retention agreement or other security
interest to which any property or asset owned or held by such Person is
subject, whether or not the indebtedness, obligations or liabilities secured
thereby shall have been assumed by such Person; and

(c) to the extent not included in the foregoing, all
indebtedness, obligations and liabilities of others which such Person has
directly or indirectly guaranteed, endorsed (other than for collection or
deposit in the ordinary course of business), sold with recourse, or agreed
(contingently or otherwise) to purchase or repurchase or otherwise acquire or
in respect of which such Person has agreed to supply or advance funds (whether
by way of loan, stock purchase, capital contribution or otherwise) or otherwise
to become directly or indirectly liable.

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13.10 "LOAN DOCUMENTS" means this Agreement, the Note and all other
documents, executed or delivered by Borrower pursuant to this Agreement, as
they may be amended from time to time.

13.11 "PERSON" means an individual, a Corporation or a government or
any agency or subdivision thereof, or any other entity.

13.12 "PRIME RATE" means the annual interest rate established from
time to time by Bank and generally known by Bank as its "prime rate", whether
published by it publicly or only for the internal guidance of its loan
officers. The Prime Rate is used merely as a pricing index and is not and
should not be considered to represent the lowest or best rate available to a
borrower.

13.13 "STOCK PURCHASE AGREEMENT" means that certain Stock Purchase
Agreement dated August 14, 1996 between the Sam K. Viersen, Jr. Revocable Trust
and UTI, as amended.

13.14 "SUBSIDIARY" means a Corporation (a) which is organized under
the laws of the United States or any State thereof, or any other county or
jurisdiction, (b) which conducts substantially all of its business and has
substantially all of its assets within the United States, and (c) of which more
than fifty percent (50%) of its outstanding voting stock of every class (or
other voting equity interest) is owned by Borrower or one or more of its
Subsidiaries.

14. WAIVERS.

14.1 WAIVERS. IN CONNECTION WITH ANY PROCEEDINGS UNDER THE LOAN
DOCUMENTS, INCLUDING WITHOUT LIMITATION ANY ACTION BY BANK IN REPLEVIN,
FORECLOSURE OR OTHER COURT PROCESS OR IN CONNECTION WITH ANY OTHER ACTION
RELATED TO THE LOAN DOCUMENTS OR THE TRANSACTIONS CONTEMPLATED HEREUNDER,
BORROWERS WAIVE:

(a) ALL ERRORS, DEFECTS AND IMPERFECTIONS IN SUCH
PROCEEDINGS;

(b) ALL BENEFITS UNDER ANY PRESENT OR FUTURE LAWS
EXEMPTING ANY PROPERTY, REAL OR PERSONAL, OR ANY PART OF ANY PROCEEDS THEREOF
FROM ATTACHMENT, LEVY OR SALE UNDER EXECUTION, OR PROVIDING FOR ANY STAY OF
EXECUTION TO BE ISSUED ON ANY JUDGMENT RECOVERED UNDER ANY OF THE LOAN
DOCUMENTS OR IN ANY REPLEVIN OR FORECLOSURE PROCEEDING, OR OTHERWISE PROVIDING
FOR ANY VALUATION, APPRAISAL OR EXEMPTION;

(c) ALL RIGHTS TO INQUISITION ON ANY REAL ESTATE, WHICH
REAL ESTATE MAY BE LEVIED UPON PURSUANT TO A JUDGMENT OBTAINED UNDER ANY OF THE
LOAN DOCUMENTS AND SOLD UPON ANY WRIT OF EXECUTION ISSUED THEREON IN WHOLE OR
IN PART, IN ANY ORDER DESIRED BY BANK;

(d) PRESENTMENT FOR PAYMENT, DEMAND, NOTICE OF DEMAND,
NOTICE OF NONPAYMENT, PROTEST AND NOTICE OF PROTEST OF ANY OF THE LOAN
DOCUMENTS, INCLUDING THE NOTE;

(e) ANY REQUIREMENT FOR BONDS, SECURITY OR SURETIES
REQUIRED BY STATUTE, COURT RULE OR OTHERWISE;

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(f) ANY DEMAND FOR POSSESSION OF COLLATERAL PRIOR TO
COMMENCEMENT OF ANY SUIT; AND

(g) ALL RIGHTS TO CLAIM OR RECOVER ATTORNEY'S FEES AND
COSTS IN THE EVENT THAT ANY BORROWER IS SUCCESSFUL IN ANY ACTION TO REMOVE,
SUSPEND OR PREVENT THE ENFORCEMENT OF A JUDGMENT ENTERED BY CONFESSION.

14.2 FORBEARANCE. Bank may release, compromise, forbear with
respect to, waive, suspend, extend or renew any of the terms of the Loan
Documents, without notice to any Borrower .

14.3 LIMITATION ON LIABILITY. Borrowers shall be responsible for
and Bank is hereby released from any claim or liability in connection with:

(a) Safekeeping any Collateral;

(b) Any loss or damage to any Collateral;

(d) Any act or default of another Person.

Bank shall only be liable for any act or omission on its part
constituting gross negligence or wilful misconduct. In the event that Bank
breaches its required standard of conduct, Borrowers agree that Bank's
liability shall be only for direct damages suffered and shall not extend to
consequential or incidental damages. In the event any Borrower brings suit
against Bank in connection with the transactions contemplated hereunder and
Bank is found not to be liable, Borrowers will indemnify and hold Bank harmless
from all costs and expenses, including attorney's fees, incurred by Bank in
connection with such suit. This Agreement is not intended to obligate Bank to
take any action with respect to the Collateral or to incur expenses or perform
any obligation or duty of any Borrower.

14.4 SUBROGATION; SUBORDINATION. Any and all rights of subrogation
that any Borrower may have against another Borrower or against any collateral
or security for any Bank Indebtedness, and any and all rights of contribution,
indemnity and/or substitution that any Borrower may have against another
Borrower shall be junior and subordinate to all Bank Indebtedness, to any
rights that Bank may have against all Borrowers, and to all right, title and
interest that Bank may have in any such collateral or security for the Bank
Indebtedness. Bank may use, sell or dispose of any item of collateral or
security for the Bank Indebtedness as it sees fit without regard to any
subrogation rights any Borrower may have, and upon any such disposition or sale
of such collateral or security any rights of subrogation that any Borrower may
have with respect to such collateral or security shall terminate.

Until the Bank Indebtedness shall have been indefeasibly paid in full,
no Borrower shall take, or permit to be taken, any action to exercise (a) any
right of subrogation arising in respect of the Bank Indebtedness, (b) any right
of contribution arising in respect of the Bank Indebtedness that any

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Borrower may have, (c) any right to enforce any remedy which Bank now has or
may hereafter have against any Borrower or (d) any benefit of, and any right to
participate in, any security now or hereafter held by Bank. If any amount
shall be paid to any Borrower on account of such subrogation or contribution
rights at any time when all Bank Indebtedness shall not have been paid in full,
such amount shall be held in trust for Bank and shall forthwith be paid over to
Bank to be credited and applied against the Bank Indebtedness, whether matured
or unmatured, in accordance with the terms hereof.

15. SUBMISSION TO JURISDICTION. Borrowers hereby consent to the
jurisdiction of any state or federal court located within the Commonwealth of
Pennsylvania, and irrevocably agree that, subject to the Bank's election, all
actions or proceedings relating to the Loan Documents or the transactions
contemplated hereunder shall be litigated in such courts. Borrowers waive any
objection which they may have based on lack of personal jurisdiction, improper
venue or forum non conveniens to the conduct of any proceeding in any such
court and waive personal service of any and all process upon them, and consent
that all such service of process be made by mail or messenger directed to them
at the address set forth in SECTION 12. Nothing contained in this SECTION 15
shall affect the right of Bank to serve legal process in any other manner
permitted by law or affect the right of Bank to bring any action or proceeding
against any Borrower or their property in the courts of any other jurisdiction.

16. MISCELLANEOUS.

16.1 BROKERS. The transaction contemplated hereunder was brought
about and entered into by Bank and Borrowers acting as principals and without
any brokers, agents or finders being the effective procuring cause hereof.
Borrowers represent to Bank that Borrowers have not committed Bank to the
payment of any brokerage fee or commission in connection with this transaction.
If any such claim is made against Bank by any broker, finder or agent or any
other Person, Borrowers agree to indemnify, defend and hold Bank harmless
against any such claim, at Borrowers' own cost and expense, including Bank's
attorneys' fees. Borrowers further agree that until any such claim or demand
is adjudicated in Bank's favor, the amount claimed and/or demanded shall be
deemed part of the Bank Indebtedness secured by the Collateral.

16.2 USE OF BANK'S NAME. No Borrower shall use Bank's name or the
name of any of Bank's Affiliates in connection with any of its business or
activities except as may otherwise be required by the rules and regulations of
the Securities and Exchange Commission or any like regulatory body and except
as may be required in its dealings with any governmental agency.

16.3 NO JOINT VENTURE. Nothing contained herein is intended to
permit or authorize any Borrower to make any contract on behalf of Bank, nor
shall this Agreement be construed as creating a partnership, joint venture or
making Bank an investor in any Borrower.

16.4 SURVIVAL. All covenants, agreements, representations and
warranties made by Borrowers in the Loan Documents or made by or on their
behalf in connection with the transactions contemplated herein shall be true at
all times this Agreement is in effect and shall survive the execution and
delivery of the Loan Documents, any investigation at any time made by Bank or
on

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its behalf and the making by Bank of the loans or advances to Borrowers. All
statements contained in any certificate, statement or other document delivered
by or on behalf of any Borrower pursuant hereto or in connection with the
transactions contemplated hereunder shall be deemed representations and
warranties by Borrowers.

16.5 NO ASSIGNMENT BY BORROWERS. No Borrower may assign any of its
rights hereunder without the prior written consent of Bank, and Bank shall not
be required to lend hereunder except to Borrowers as they presently exist.

16.6 ASSIGNMENT OR SALE BY BANK. Bank may sell, assign or
participate all or a portion of its interest in the Loan Documents and in
connection therewith may make available to any prospective purchaser, assignee
or participant any information relative to any Borrower in its possession. Any
such sale or assignment shall be in connection with an internal reorganization
of Bank or as part of a sale of assets of the bank and not an isolated sale or
assignment of this loan facility.

16.7 BINDING EFFECT. This Agreement and all rights and powers
granted hereby will bind and inure to the benefit of the parties hereto and
their respective permitted successors and assigns.

16.8 SEVERABILITY. The provisions of this Agreement and all other
Loan Documents are deemed to be severable, and the invalidity or
unenforceability of any provision shall not affect or impair the remaining
provisions which shall continue in full force and effect.

16.9 NO THIRD PARTY BENEFICIARIES. The rights and benefits of this
Agreement and the Loan Documents shall not inure to the benefit of any third
party.

16.10 MODIFICATIONS. No modification of this Agreement or any of
the Loan Documents shall be binding or enforceable unless in writing and signed
by or on behalf of the party against whom enforcement is sought.

16.11 HOLIDAYS. If the day provided herein for the payment of any
amount or the taking of any action falls on a Saturday, Sunday or public
holiday at the place for payment or action, then the due date for such payment
or action will be the next succeeding Business Day.

16.12 LAW GOVERNING. This Agreement has been made, executed and
delivered in the Commonwealth of Pennsylvania and will be construed in
accordance with and governed by the laws of such Commonwealth.

16.13 INTEGRATION. The Loan Documents shall be construed as
integrated and complementary of each other, and as augmenting and not
restricting Bank's rights, powers, remedies and security. The Loan Documents
contain the entire understanding of the parties thereto with respect to the
matters contained therein and supersede all prior agreements and understandings
between the parties with respect to the subject matter thereof and do not
require parol or extrinsic evidence in order to reflect the intent of the
parties. In the event of any inconsistency between the terms of this Agreement
and the terms of the other Loan Documents, the terms of this Agreement shall
prevail.

19
<PAGE> 20
16.14 EXHIBITS AND SCHEDULES. All exhibits and schedules attached
hereto are hereby made a part of this Agreement.

16.15 HEADINGS. The headings of the Articles, Sections, paragraphs
and clauses of this Agreement are inserted for convenience only and shall not
be deemed to constitute a part of this Agreement.

16.16 COUNTERPARTS. This Agreement may be executed in any number of
counterparts, all of which taken together shall constitute one and the same
instrument, and any of the parties hereto may execute this Agreement by signing
any such counterpart.

16.17 JOINT AND SEVERAL LIABILITY. If there is more than one
Borrower hereunder, all agreements, conditions, covenants and provisions of the
Loan Documents shall be the joint and several obligation of each Borrower.

16.18 WAIVER OF RIGHT TO TRIAL BY JURY. BORROWERS AND BANK WAIVE
ANY RIGHT TO TRIAL BY JURY ON ANY CLAIM, DEMAND, ACTION OR CAUSE OF ACTION (A)
ARISING UNDER ANY OF THE LOAN DOCUMENTS OR (B) IN ANY WAY CONNECTED WITH OR
RELATED OR INCIDENTAL TO THE DEALINGS OF BORROWERS OR BANK WITH RESPECT TO ANY
OF THE LOAN DOCUMENTS OR THE TRANSACTIONS RELATED HERETO OR THERETO, IN EACH
CASE WHETHER SOUNDING IN CONTRACT OR TORT OR OTHERWISE. BORROWERS AND BANK
AGREE AND CONSENT THAT ANY SUCH CLAIM, DEMAND, ACTION OR CAUSE OF ACTION SHALL
BE DECIDED BY COURT TRIAL WITHOUT A JURY, AND THAT ANY PARTY TO THIS AGREEMENT
MAY FILE AN ORIGINAL COUNTERPART OR A COPY OF THIS SECTION WITH ANY COURT AS
WRITTEN EVIDENCE OF THE CONSENT OF BORROWERS AND BANK TO THE WAIVER OF THEIR
RIGHT TO TRIAL BY JURY. BORROWERS ACKNOWLEDGE THAT THEY HAVE HAD THE
OPPORTUNITY TO CONSULT WITH COUNSEL REGARDING THIS SECTION, THAT THEY FULLY
UNDERSTAND ITS TERMS, CONTENT AND EFFECT, AND THAT THEY VOLUNTARILY AND
KNOWINGLY AGREE TO THE TERMS OF THIS SECTION.

IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the date first above written.

FWA DRILLING COMPANY, INC.

By: /s/ P. Blake Dupuis
------------------------------
P. Blake DuPuis, Vice President
(CORPORATE SEAL)

[SIGNATURES CONTINUED ON THE FOLLOWING PAGE]

20
<PAGE> 21
[SIGNATURES CONTINUED FROM THE PRECEDING PAGE]

INTERNATIONAL PETROLEUM
SERVICE COMPANY

By: /s/ P. Blake Dupuis
----------------------------------
P. Blake DuPuis, Vice President

(CORPORATE SEAL)

TRIAD DRILLING COMPANY

By: /s/ P. Blake Dupuis
----------------------------------
P. Blake DuPuis, Vice President
(CORPORATE SEAL)

UNIVERSAL WELL SERVICES, INC.

By: /s/ P. Blake Dupuis
----------------------------------
P. Blake DuPuis, Vice President
(CORPORATE SEAL)

USC, INCORPORATED

By: /s/ P. Blake Dupuis
----------------------------------
P. Blake DuPuis, Vice President
(CORPORATE SEAL)

[SIGNATURES CONTINUED ON THE FOLLOWING PAGE]

21
<PAGE> 22
[SIGNATURES CONTINUED FROM THE PRECEDING PAGE]

UTI ENERGY CORP.

By: /s/ P. Blake Dupuis
---------------------------------------
P. Blake DuPuis, Vice President
(CORPORATE SEAL)

UTICO, INC.

By: /s/ P. Blake Dupuis
---------------------------------------
P. Blake DuPuis, Vice President
(CORPORATE SEAL)

VIERSEN & COCHRAN
DRILLING COMPANY

By: /s/ P. Blake Dupuis
---------------------------------------
P. Blake DuPuis, Vice President
(CORPORATE SEAL)

MELLON BANK, N.A.

By: /s/ Jacob E. Reiter
---------------------------------------
Jacob E. Reiter, First Vice President

22
<PAGE> 23
EXHIBIT

Exhibit "A" - Note

SCHEDULE

Schedule 5.9 - Location of Drilling Equipment

<PAGE> 1
EXHIBIT 10.4

EMPLOYMENT AGREEMENT

This EMPLOYMENT AGREEMENT (this "Agreement"), dated as of December 19,
1995, and effective upon the date described in paragraph 12 hereof, between UTI
Energy Corp. ("Employer"), and Vaughn E. Drum ("Employee").

W I T N E S S E T H:

WHEREAS, Employer desires to employ Employee, and Employee desires to be
employed by Employer, upon the terms and subject to the conditions hereinafter
set forth.

NOW, THEREFORE, in consideration of the premises and the mutual
covenants, agreements and representations herein contained, and intending to be
legally bound hereby, the parties hereto agree as follows:

1. Employment. Employer hereby employs Employee and Employee hereby
accepts such employment and agrees to perform his duties and responsibilities
hereunder in accordance with the terms and conditions hereinafter set forth.
Employee represents and warrants that he may enter into this Agreement and the
employment contemplated hereby without violating any other agreements or
covenants, whether written or oral, by which he may be bound.

2. Term. The term of this Agreement shall commence as of December
19, 1995 and shall continue until December 19, 2000 (the "Initial Term"),
unless terminated prior thereto in accordance with Section 9 hereof. Subject
to the rights of termination set forth in this Agreement, this Agreement shall
be automatically renewed for successive additional one (1) year terms after the
Initial Term (each such renewal term referred to as a "Renewal Term"), unless
either party provides written notice of
<PAGE> 2
termination to the other party on or before one hundred twenty (120) days prior
to the end of the Initial Term or any Renewal Term.

3. Duties and Responsibilities. Employee shall have the title of
President and Chief Executive Officer and shall perform and discharge the
duties and responsibilities incident to that office and such other management
and administrative duties and responsibilities as may be prescribed from time
to time by the Board of Directors of Employer. Employee also agrees to perform
reasonable management and administrative services for, and to consult with and
advise, corporations affiliated with Employer as the Board of Directors of
Employer may from time to time specify. Nothing contained in this Agreement
shall be construed as making Employee personally responsible for the
liabilities of Employer, its Subsidiaries (as defined in Section 9(a)) and
affiliates or any other corporation to which Employee provides services. Such
title, and the duties and responsibilities incident thereto, may, by
appropriate Employer Board of Director action, be upgraded from time to time,
and such upgraded title, duties and responsibilities, together with the
appropriate increase in salary, shall be incorporated into this Agreement by
referencing the same on the attached Exhibit A, made a part hereof.

4. Extent of Service. Employee shall devote his full and undivided
business time to the business of Employer and shall not during the term of this
Agreement be engaged in any other business activity pursued for gain, profit or
other pecuniary advantage without the prior written approval of Employer's
Board of Directors. Except as provided in Section 6 hereof, the foregoing
shall not be construed as preventing the Employee from devoting reasonable
amounts of time to personal, civil and charitable activities, and to his
personal investments, if such other activities and such investments

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<PAGE> 3
do not interfere in any material respect with the performance by the Employee
of his duties and obligations under this Agreement.

5. Compensation.

(a) Salary and Insurance. For all services rendered by
Employee under this Agreement, Employer shall pay to Employee a salary at the
rate of $144,950 per year, payable in accordance with Employer's customary
practices for senior employees in arrears, less withholding required by law and
other deductions agreed to by Employee, so long as this Agreement shall be in
effect (the "Salary"). Such Salary may, by appropriate Employer Board of
Director action, be increased from time to time, and such increased Salary
shall be incorporated into this Agreement by referencing such increased Salary
on the attached Exhibit A. Employee shall also be included, on a basis
comparable with the other executive employees of UTI Energy Corp. ("UTI") and
its Subsidiaries, in any life, health or disability insurance plans and
policies, and shall be entitled to such other benefits if and to the extent
generally made available from time to time to senior executives of Employer,
including paid vacations, paid sick leave, holiday pay and the use of an
automobile; provided, however, that such other benefits shall not include the
right to participate in any stock option plan, restricted stock plan or other
form of employee incentive plan sponsored by UTI, Employer or its Subsidiaries
and affiliates unless the plan sponsor specifically grants to Employee the
right to participate in any of such plans. Employer shall also provide
Employee with office and secretarial facilities appropriate for and customarily
used in the performance of such duties and responsibilities as are from time to
time assigned to him pursuant to this Agreement, and Employee shall be
reimbursed for all travel, business and entertainment related expenses from
time to time incurred by him on behalf of

-3-
<PAGE> 4
Employer or any of its Subsidiaries or affiliates in accordance with Employer's
standard policies and procedures from time to time in effect, subject to
receipt of satisfactory evidence of payment thereof.

(b) Additional Compensation. Employer shall also pay to
Employee such additional compensation, including but not limited to bonus and
incentive compensation payments ("Additional Compensation"), as shall be
determined from time to time by Employer's Board of Directors.

6. Covenant Not to Compete. During the term of this Agreement and
for a period of two (2) years after the termination hereof, unless Employee's
employment hereunder is terminated by Employer involuntarily on the part of the
Employee and without "Cause" (as defined in Section 9(a)(iii)), Employee shall
not, unless acting pursuant hereto or with the prior written consent of
Employer, (i) directly or indirectly own, manage, operate, join, control, or
participate in the ownership, management, operation or control of, or be
connected as an officer, director, employee, partner or otherwise with, any
business which competes with or which is engaged in activities similar to those
conducted by Employer and its Subsidiaries and affiliates, which is located
within the territory served by Employer or its Subsidiaries or affiliates
within the twelve (12) month period preceding the date of termination of this
Agreement; or (ii) induce or attempt to persuade any employee of Employer or
any of its Subsidiaries or affiliates to terminate his employment relationship
in order to enter into employment competitive with Employer or any of its
Subsidiaries or affiliates.

7. Confidential Information. Employee acknowledges and agrees that
all records and other information not released to the general public, all trade
secrets, unpublished data or other information and all trade secrets and
confidential or

-4-
<PAGE> 5
proprietary information, in each case relating to the services, business and
operations of Employer and its Subsidiaries and affiliates, whether reduced to
writing or not, are confidential and the sole property of Employer and its
Subsidiaries and affiliates (all of the same being herein collectively called
the "Confidential Information"). Employee acknowledges and agrees that, in his
capacity as an officer of Employer and other executive capacities provided for
herein, he will be involved in all aspects of the business and operations of
Employer and its Subsidiaries and affiliates, and that, as a result thereof, he
will be privy to the Confidential Information. Employee will not, at any time
during his employment hereunder or thereafter, use any of the Confidential
Information, except in the regular course of employment hereunder, or disclose
any of the Confidential Information to any other person or entity, except to
the extent Employer's Board of Directors may so authorize in writing, and that,
upon termination of his employment hereunder, he will surrender to Employer all
Confidential Information then in his possession or under his control.

8. Remedies. Employee acknowledges that the provisions of Sections
6 and 7 of this Agreement are reasonable and necessary for the protection of
Employer and its Subsidiaries and affiliates and that Employer and its
Subsidiaries and affiliates will be irrevocably damaged if such provisions are
not specifically enforced. Accordingly, Employee specifically recognizes and
agrees that, in the event of a breach or threatened breach by him of the
undertakings expressed in Sections 6 and 7 of this Agreement, the remedies
available to Employer at law may be inadequate and that Employer shall be
entitled, in addition to any other relief available to it at law, in equity or
otherwise, to temporary and permanent injunctions restraining such breach or
threatened breach. Should a court of competent jurisdiction declare any of
these provisions unenforceable

-5-
<PAGE> 6
due to an unreasonable restriction of duration or geographical area, or for any
other reason, such court shall have the express authority of the parties to
this Agreement to reform such provisions and/or to grant Employer or its
Subsidiaries and affiliates any and all other relief, at law or in equity,
reasonably necessary to protect the interests of Employer and its Subsidiaries
and affiliates.

9. Termination.

(a) Definitions. For purposes of this paragraph 9, the
following definitions shall apply:

(i) "Full Additional Compensation" shall mean the
amount of Additional Compensation (as defined in Section 5(b))
that Employee would have been entitled to receive if he had been
an employee during the entire fiscal year, payable within ninety
(90) days after the end of the fiscal year in which the
termination of employment occurred.

(ii) "Adverse Change" shall mean the occurrence of any
of the following events:

(1) a significant reduction by Employer of the
authority, duties or responsibilities of the Employee;

(2) any removal of the Employee from an officer
position with Employer, except in connection with
promotions to a higher office;

(3) a reduction by Employer in the Employee's
Salary or a material reduction in the Employee's other
benefits; or

-6-
<PAGE> 7
(4) a transfer of the Employee, without his
express written consent, to a location which is more than
forty (40) miles from his previous work location.

(iii) "Cause" shall mean gross negligence in the
performance of Employee's duties hereunder or the failure of the
Employee to observe or perform (other than by reason of
Disability) in any material respect the duties of his employment,
gross misconduct, insubordination, habitual insobriety or
substance abuse or embezzlement of funds.

(iv) "Compensation" shall mean the average of Employee's
Salary immediately prior to termination of employment.

(v) "Continuation of Employee Benefits" shall mean:

(1) the continuation of Employee's health,
disability and life insurance benefits for a period of
eighteen (18) months from termination of employment
without any increase in cost to Employee; provided,
however, that Employer shall not be required to provide
such benefits if Employee is subsequently employed and
receives substantially similar benefits; and

(2) upon the written request of Employee, the
continuation of some or all of Employee's benefits (as
requested by Employee) for a period of up to an additional
eighteen (18) months beyond the period specified in
subparagraph (1) above, provided that Employee reimburses
Employer for its direct out-of-pocket costs of providing
Employee with such benefits;

-7-
<PAGE> 8
provided, however, that the continuation of Employee's benefits
shall not include, except to the extent then vested, Employee's
continued participation or right to participate in any stock
option plan, restricted stock plan, pension plan or other form of
employee incentive or benefit plan sponsored by UTI, Employer or
its Subsidiaries and affiliates.

(vi) "Disabled" or "Disability" shall mean the inability
of Employee to perform substantially all of his duties and
responsibilities hereunder by reason of illness, injury or
incapacity for six (6) consecutive months, during which period
Employer shall continue to pay to Employee his Salary as provided
in Section 5 hereof.

(vii) "Plan Vesting" shall mean the full and complete
vesting of Employee's interests under any stock option plan,
restricted stock plan, pension plan or other form of employee
incentive plan of UTI, Employer or any of its Subsidiaries or
affiliates, or in which Employer or any of its Subsidiaries or
affiliate participates, notwithstanding any vesting schedule or
provision in such plan or plans.

(viii) "Pro Rated Additional Compensation" shall mean the
amount of Additional Compensation (as defined in Section 5(b))
that Employee would have been entitled to receive if he had been
an employee during the entire fiscal year multiplied by the
fraction equal to the number of months of the fiscal year that
had elapsed as of the month of such termination (counting the
month of termination as an entire month) divided by twelve (12),
payable within ninety (90) days after the end of the fiscal year
in which the termination of employment occurred.

-8-
<PAGE> 9
(ix) "Separation Pay" shall mean Employee's Compensation
times a fraction, the numerator of which shall be the number of
months of Employee's service with UTI, Employer, UGI Corporation,
a Delaware corporation ("UGI"), or any company affiliated with
either Employer or UGI, and the denominator of which shall be
260, payable within thirty (30) days after termination of
employment; provided that Separation Pay shall in no event exceed
fifty percent (50%) of Compensation.

(x) "Subsidiary" of any entity or person shall mean any
corporation, incorporated or unincorporated association, limited
liability company, partnership or other entity of which at least
a majority of the voting power of the voting equity securities or
equity interest is owned, directly or indirectly, by such entity
or person.

(xi) "Vacation Pay" shall mean a lump sum payment equal
to the Employee's unused vacation days and holidays remaining in
the calendar year of termination times a fraction, the numerator
of which shall be Employee's Compensation and the denominator of
which shall be 260, payable within thirty (30) days after
termination of employment.

(b) Termination Events. This Agreement shall terminate, and
Employer shall have no further liability or obligation hereunder except as set
forth herein, upon the first to occur of the expiration of the term of this
Agreement (as set forth in Section 2) or the occurrence of any one of the
following events:

(i) The Employee becomes Disabled, in which event
Employer shall pay to the Employee his Separation Pay, Vacation
Pay and Pro Rated Additional Compensation, and Employee shall be
entitled to

-9-
<PAGE> 10
Employee's Plan Vesting. In the event Employee, due to his
Disability, is unable to properly manage funds, Employer may make
such payments to Employee's guardian or other person taking care
of him, and Employer shall have no further responsibility for any
funds so paid.

(ii) The Employee dies, in which event Employer shall
pay to his executors or administrators the Employee's Separation
Pay, Vacation Pay and Pro Rated Additional Compensation, and his
executors or administrators shall be entitled to Employee's Plan
Vesting.

(iii) The Employee is terminated by Employer for reasons
not constituting Cause, in which event Employer shall pay to the
Employee one year of Compensation, Separation Pay, Vacation Pay
and Full Additional Compensation, and the Employee shall be
entitled to Plan Vesting and Continuation of Employee Benefits.

(iv) The Employee voluntarily terminates his employment
within one (1) year following an Adverse Change, in which event
Employer shall pay to the Employee one year of Compensation,
Separation Pay, Vacation Pay and Full Additional Compensation,
and the Employee shall be entitled to Plan Vesting and
Continuation of Employee Benefits.

(v) The Employee voluntarily terminates his employment,
in which event Employer shall pay to the Employee his Vacation
Pay.

(vi) The Employee is terminated for Cause, in which
event Employer shall pay to the Employee his Vacation Pay.

(vii) The Employee retires as an Employee pursuant to
Section 11 hereof, in which event Employer shall pay to the
Employee his Separation

-10-
<PAGE> 11
Pay, Vacation Pay and Pro Rated Additional Compensation, and
Employee shall be entitled to such plan vesting as shall be
provided for a retiring participant in the applicable plan or
plans.

10. Vacation. Employee shall be entitled to four (4) weeks paid
vacation each calendar year. A maximum of one (1) week of any vacation time
unused in a calendar year may be carried over into the next immediately
following calendar year.

11. Retirement. For purposes of this Agreement, Employee shall be
entitled to retire as an employee of Employer on or after the first to occur of
the following events:

(a) Employee attains the age of sixty (60) years;

(b) the combination of Employee's age and years of service
with Employer, UGI, or any company affiliated with either
Employer or UGI, equals seventy (70). For purposes of
this subparagraph, a year of service is defined as a
twelve consecutive month period in which the Employee has
at least one thousand (1,000) hours of service, measured
by the first of Employee's initial employment dates with
either Employer, UGI or any company affiliated with either
Employer or UGI.

The Employee shall be required to give the Employer at least 90 days prior
written notice of the Employee's date of retirement.

12. Effective Date. This Agreement shall become effective upon the
date on which both its execution by and delivery to both parties hereto have
occurred (the "Effective Date"). On the Effective Date, this Agreement shall
supersede all previously executed employment agreements between Employee and
UTI, Employer or any

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<PAGE> 12
Subsidiary or affiliate of UTI or Employer, which agreements shall then
terminate and be of no further force and effect.

13. Legal Fees. Notwithstanding anything in this Agreement to the
contrary, Employer and Employee agree that in the event litigation (including
any arbitration proceeding) arises concerning the enforcement of the terms and
conditions of this Agreement, all reasonable attorney's fees and other expenses
incurred by the prevailing party in such litigation shall be paid by the
opposing party.

14. Arbitration. Either Employee or Employer may demand that any
dispute hereunder be resolved by binding arbitration. Notice of the demand for
arbitration by either party shall be given in writing to the other party to
this Agreement. Upon such demand, the dispute will be settled by arbitration
in Philadelphia, Pennsylvania, before a single arbitrator pursuant to the rules
of the American Arbitration Association. The arbitrator shall be selected by
the joint agreement of the parties, but if they do not so agree within twenty
(20) days after the date of the notice referred to above, the selection shall
be made pursuant to the rules of, and from the panels of arbitrators maintained
by, such Association. Any award rendered by the arbitrator shall be conclusive
and binding upon the parties hereto; provided, however, that any such award
shall be accompanied by a written opinion of the arbitrator giving the reasons
for the award. The expenses of the arbitrator shall be equally shared.
Nothing herein shall prevent the parties from settling any dispute by mutual
agreement at any time.

15. Contents of Agreement, Parties in Interest, Assignment, etc.
This Agreement sets forth the entire understanding of the parties hereto with
respect to the subject matter hereof. All of the terms and provisions of this
Agreement shall be binding upon and inure to the benefit of and be enforceable
by the respective heirs,

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<PAGE> 13
representatives, successors and assigns of the parties hereto, except that the
duties and responsibilities of Employee hereunder which are of a personal
nature shall neither be assigned nor transferred in whole or in part by the
Employee. This Agreement shall not be amended except by written instrument
duly executed by Employer and Employee.

16. Severability. If any term or provision of this Agreement shall
be held to be invalid or unenforceable in any jurisdiction for any reason, such
term or provision shall, as to such jurisdiction, be ineffective to the extent
of such invalidity or unenforceability without invalidating the remaining terms
and provisions hereof, and this Agreement shall be construed in such
jurisdiction as if such invalid or unenforceable term or provision had not been
contained herein and all of its provisions shall remain in full force and
effect in every other jurisdiction without regard to such invalidity or
unenforceability.

17. Governing Law. This Agreement shall be construed, interpreted
and enforced in accordance with the laws of the Commonwealth of Pennsylvania
without giving effect to the principles of conflicts of law thereof.

18. Notices. All notices, consents, waivers or communications which
are required or permitted hereunder shall be sufficient if given in writing and
delivered personally or by registered or certified mail, return receipt
requested, postage prepaid, if to Employer at Suite 112, 485 Devon Park Drive,
Wayne, Pennsylvania 19087, Attention: President, or, if to Employee, to his or
her address as listed on Employer's records (or to such other respective
addressee or address as shall be set forth in a notice given in the same
manner). All such notices shall be deemed to have been given on the date
delivered or mailed in the manner provided above.

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<PAGE> 14
IN WITNESS WHEREOF, this Agreement has been executed as of the day and
year first above written.

UTI ENERGY CORP.

By: /s/ Mark S. Siegel
----------------------------------
Name: Mark S. Siegel
Title: Chairman of the Board

/s Vaughn E. Drum
-------------------------------------
Vaughn E. Drum

-14-

<PAGE> 1
EXHIBIT 10.5

EMPLOYMENT AGREEMENT

W I T N E S S E T H:

WHEREAS, Employer desires to employ Employee, and Employee desires to be
employed by Employer, upon the terms and subject to the conditions hereinafter
set forth.

3. Duties and Responsibilities. Employee shall have the title of
Vice President and Secretary and shall perform and discharge the duties and
responsibilities incident to that office and such other management and
administrative duties and responsibilities as may be prescribed from time to
time by the Board of Directors of Employer. Employee also agrees to perform
reasonable management and administrative services for, and to consult with and
advise, corporations affiliated with Employer as the Board of Directors of
Employer may from time to time specify. Nothing contained in this Agreement
shall be construed as making Employee personally responsible for the
liabilities of Employer, its Subsidiaries (as defined in Section 9(a)) and
affiliates or any other corporation to which Employee provides services. Such
title, and the duties and responsibilities incident thereto, may, by
appropriate Employer Board of Director action, be upgraded from time to time,
and such upgraded title, duties and responsibilities, together with the
appropriate increase in salary, shall be incorporated into this Agreement by
referencing the same on the attached Exhibit A, made a part hereof.

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<PAGE> 3
do not interfere in any material respect with the performance by the Employee
of his duties and obligations under this Agreement.

5. Compensation.

(a) Salary and Insurance. For all services rendered by
Employee under this Agreement, Employer shall pay to Employee a salary at the
rate of $90,350 per year, payable in accordance with Employer's customary
practices for senior employees in arrears, less withholding required by law and
other deductions agreed to by Employee, so long as this Agreement shall be in
effect (the "Salary"). Such Salary may, by appropriate Employer Board of
Director action, be increased from time to time, and such increased Salary
shall be incorporated into this Agreement by referencing such increased Salary
on the attached Exhibit A. Employee shall also be included, on a basis
comparable with the other executive employees of UTI Energy Corp. ("UTI") and
its Subsidiaries, in any life, health or disability insurance plans and
policies, and shall be entitled to such other benefits if and to the extent
generally made available from time to time to senior executives of Employer,
including paid vacations, paid sick leave, holiday pay and the use of an
automobile; provided, however, that such other benefits shall not include the
right to participate in any stock option plan, restricted stock plan or other
form of employee incentive plan sponsored by UTI, Employer or its Subsidiaries
and affiliates unless the plan sponsor specifically grants to Employee the
right to participate in any of such plans. Employer shall also provide
Employee with office and secretarial facilities appropriate for and customarily
used in the performance of such duties and responsibilities as are from time to
time assigned to him pursuant to this Agreement, and Employee shall be
reimbursed for all travel, business and entertainment related expenses from
time to time incurred by him on behalf of

9. Termination.

(a) Definitions. For purposes of this paragraph 9, the
following definitions shall apply:

(ii) "Adverse Change" shall mean the occurrence of any
of the following events:

(1) a significant reduction by Employer of the
authority, duties or responsibilities of the Employee;

(2) any removal of the Employee from an officer
position with Employer, except in connection with
promotions to a higher office;

(3) a reduction by Employer in the Employee's
Salary or a material reduction in the Employee's other
benefits; or

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<PAGE> 7
(4) a transfer of the Employee, without his
express written consent, to a location which is more than
forty (40) miles from his previous work location.

(iv) "Compensation" shall mean the average of Employee's
Salary immediately prior to termination of employment.

(v) "Continuation of Employee Benefits" shall mean:

(i) The Employee becomes Disabled, in which event
Employer shall pay to the Employee his Separation Pay, Vacation
Pay and Pro Rated Additional Compensation, and Employee shall be
entitled to

(v) The Employee voluntarily terminates his employment,
in which event Employer shall pay to the Employee his Vacation
Pay.

(vi) The Employee is terminated for Cause, in which
event Employer shall pay to the Employee his Vacation Pay.

(vii) The Employee retires as an Employee pursuant to
Section 11 hereof, in which event Employer shall pay to the
Employee his Separation

11. Retirement. For purposes of this Agreement, Employee shall be
entitled to retire as an employee of Employer on or after the first to occur of
the following events:

(a) Employee attains the age of sixty (60) years;

The Employee shall be required to give the Employer at least 90 days prior
written notice of the Employee's date of retirement.

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<PAGE> 12
Subsidiary or affiliate of UTI or Employer, which agreements shall then
terminate and be of no further force and effect.

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<PAGE> 14
IN WITNESS WHEREOF, this Agreement has been executed as of the day and
year first above written.

UTI ENERGY CORP.

By: /s/ Vaughn E. Drum
----------------------------------
Name: Vaughn E. Drum
Title: President and CEO

/s/ VINCENT J. DONAHUE
-------------------------------------
Vincent J. Donahue

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<PAGE> 1
EXHIBIT 10.6

EMPLOYMENT AGREEMENT

This EMPLOYMENT AGREEMENT (this "Agreement"), dated as of December 19,
1995, and effective upon the date described in paragraph 12 hereof, between
Universal Well Services, Inc. ("Employer"), and Gerald J. Guz ("Employee").

W I T N E S S E T H:

WHEREAS, Employer desires to employ Employee, and Employee desires to be
employed by Employer, upon the terms and subject to the conditions hereinafter
set forth.

3. Duties and Responsibilities. Employee shall have the title of
President and Chief Operating Officer and shall perform and discharge the
duties and responsibilities incident to that office and such other management
and administrative duties and responsibilities as may be prescribed from time
to time by the Board of Directors of Employer. Employee also agrees to perform
reasonable management and administrative services for, and to consult with and
advise, corporations affiliated with Employer as the Board of Directors of
Employer may from time to time specify. Nothing contained in this Agreement
shall be construed as making Employee personally responsible for the
liabilities of Employer, its Subsidiaries (as defined in Section 9(a)) and
affiliates or any other corporation to which Employee provides services. Such
title, and the duties and responsibilities incident thereto, may, by
appropriate Employer Board of Director action, be upgraded from time to time,
and such upgraded title, duties and responsibilities, together with the
appropriate increase in salary, shall be incorporated into this Agreement by
referencing the same on the attached Exhibit A, made a part hereof.

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<PAGE> 3
do not interfere in any material respect with the performance by the Employee
of his duties and obligations under this Agreement.

5. Compensation.

(a) Salary and Insurance. For all services rendered by
Employee under this Agreement, Employer shall pay to Employee a salary at the
rate of $90,000 per year, payable in accordance with Employer's customary
practices for senior employees in arrears, less withholding required by law and
other deductions agreed to by Employee, so long as this Agreement shall be in
effect (the "Salary"). Such Salary may, by appropriate Employer Board of
Director action, be increased from time to time, and such increased Salary
shall be incorporated into this Agreement by referencing such increased Salary
on the attached Exhibit A. Employee shall also be included, on a basis
comparable with the other executive employees of UTI Energy Corp. ("UTI") and
its Subsidiaries, in any life, health or disability insurance plans and
policies, and shall be entitled to such other benefits if and to the extent
generally made available from time to time to senior executives of Employer,
including paid vacations, paid sick leave, holiday pay and the use of an
automobile; provided, however, that such other benefits shall not include the
right to participate in any stock option plan, restricted stock plan or other
form of employee incentive plan sponsored by UTI, Employer or its Subsidiaries
and affiliates unless the plan sponsor specifically grants to Employee the
right to participate in any of such plans. Employer shall also provide
Employee with office and secretarial facilities appropriate for and customarily
used in the performance of such duties and responsibilities as are from time to
time assigned to him pursuant to this Agreement, and Employee shall be
reimbursed for all travel, business and entertainment related expenses from
time to time incurred by him on behalf of

9. Termination.

(a) Definitions. For purposes of this paragraph 9, the
following definitions shall apply:

(ii) "Adverse Change" shall mean the occurrence of any
of the following events:

(1) a significant reduction by Employer of the
authority, duties or responsibilities of the Employee;

(2) any removal of the Employee from an officer
position with Employer, except in connection with
promotions to a higher office;

(3) a reduction by Employer in the Employee's
Salary or a material reduction in the Employee's other
benefits; or

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<PAGE> 7
(4) a transfer of the Employee, without his
express written consent, to a location which is more than
forty (40) miles from his previous work location.

(iv) "Compensation" shall mean the average of Employee's
Salary immediately prior to termination of employment.

(v) "Continuation of Employee Benefits" shall mean:

(i) The Employee becomes Disabled, in which event
Employer shall pay to the Employee his Separation Pay, Vacation
Pay and Pro Rated Additional Compensation, and Employee shall be
entitled to

(iii) The Employee is terminated by Employer for reasons
not constituting Cause, in which event Employer shall pay to the
Employee one-half year of Compensation, Separation Pay, Vacation
Pay and Full Additional Compensation, and the Employee shall be
entitled to Plan Vesting and Continuation of Employee Benefits.

(iv) The Employee voluntarily terminates his employment
within one (1) year following an Adverse Change, in which event
Employer shall pay to the Employee one-half year of Compensation,
Separation Pay, Vacation Pay and Full Additional Compensation,
and the Employee shall be entitled to Plan Vesting and
Continuation of Employee Benefits.

(v) The Employee voluntarily terminates his employment,
in which event Employer shall pay to the Employee his Vacation
Pay.

(vi) The Employee is terminated for Cause, in which
event Employer shall pay to the Employee his Vacation Pay.

(vii) The Employee retires as an Employee pursuant to
Section 11 hereof, in which event Employer shall pay to the
Employee his Separation

11. Retirement. For purposes of this Agreement, Employee shall be
entitled to retire as an employee of Employer on or after the first to occur of
the following events:

(a) Employee attains the age of sixty (60) years;

The Employee shall be required to give the Employer at least 90 days prior
written notice of the Employee's date of retirement.

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<PAGE> 12
Subsidiary or affiliate of UTI or Employer, which agreements shall then
terminate and be of no further force and effect.

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<PAGE> 14
IN WITNESS WHEREOF, this Agreement has been executed as of the day and
year first above written.

UNIVERSAL WELL SERVICES, INC.

By: /s/ Vaughn E. Drum
----------------------------------
Name: Vaughn E. Drum
Title: Chairman and CEO

/s/ GERALD J. GUZ
-------------------------------------
Gerald J. Guz

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<PAGE> 1
EXHIBIT 10.7

EMPLOYMENT AGREEMENT

This EMPLOYMENT AGREEMENT (this "Agreement"), dated as of December 19,
1995, and effective upon the date described in paragraph 12 hereof, between
Triad Drilling Company ("Employer"), and Terry L. Pope ("Employee").

W I T N E S S E T H:

WHEREAS, Employer desires to employ Employee, and Employee desires to be
employed by Employer, upon the terms and subject to the conditions hereinafter
set forth.

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<PAGE> 3
do not interfere in any material respect with the performance by the Employee
of his duties and obligations under this Agreement.

5. Compensation.

9. Termination.

(a) Definitions. For purposes of this paragraph 9, the
following definitions shall apply:

(ii) "Adverse Change" shall mean the occurrence of any
of the following events:

(1) a significant reduction by Employer of the
authority, duties or responsibilities of the Employee;

(2) any removal of the Employee from an officer
position with Employer, except in connection with
promotions to a higher office;

(3) a reduction by Employer in the Employee's
Salary or a material reduction in the Employee's other
benefits; or

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<PAGE> 7
(4) a transfer of the Employee, without his
express written consent, to a location which is more than
forty (40) miles from his previous work location.

(iv) "Compensation" shall mean the average of Employee's
Salary immediately prior to termination of employment.

(v) "Continuation of Employee Benefits" shall mean:

(i) The Employee becomes Disabled, in which event
Employer shall pay to the Employee his Separation Pay, Vacation
Pay and Pro Rated Additional Compensation, and Employee shall be
entitled to

(v) The Employee voluntarily terminates his employment,
in which event Employer shall pay to the Employee his Vacation
Pay.

(vi) The Employee is terminated for Cause, in which
event Employer shall pay to the Employee his Vacation Pay.

(vii) The Employee retires as an Employee pursuant to
Section 11 hereof, in which event Employer shall pay to the
Employee his Separation

11. Retirement. For purposes of this Agreement, Employee shall be
entitled to retire as an employee of Employer on or after the first to occur of
the following events:

(a) Employee attains the age of sixty (60) years;

The Employee shall be required to give the Employer at least 90 days prior
written notice of the Employee's date of retirement.

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<PAGE> 12
Subsidiary or affiliate of UTI or Employer, which agreements shall then
terminate and be of no further force and effect.

17. Governing Law. This Agreement shall be construed, interpreted
and enforced in accordance with the laws of the Commonwealth of Oklahoma
without giving effect to the principles of conflicts of law thereof.

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<PAGE> 14
IN WITNESS WHEREOF, this Agreement has been executed as of the day and
year first above written.

TRIAD DRILLING COMPANY

By: /s/ Vaughn E. Drum
--------------------------------
Name: Vaughn E. Drum
Title: Chairman

/s/ Terry L. Pope
-------------------------------------
Terry L. Pope

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<PAGE> 1
EXHIBIT 10.8

AMENDED AND RESTATED
UTI ENERGY CORPORATION
1996 EMPLOYEE STOCK OPTION PLAN

SECTION 1. PURPOSE

The purpose of the Amended and Restated UTI Energy Corporation
1996 Employee Stock Option Plan is to promote the interests of UTI Energy
Corporation (the "Company") and its stockholders by providing it with a
mechanism to enable the Company and its subsidiaries to attract, retain and
motivate their key employees with compensatory arrangements and benefits that
make use of the Company's stock so as to provide for or increase the
proprietary interests of such employees in the Company.

SECTION 2. DEFINITIONS

(A) "AGREEMENT" shall mean a written agreement setting forth
the terms of an Award.

(B) "AWARD" shall mean an Option (which may be designated as
an Incentive Stock Option or a Non-Incentive Stock Option) granted under this
Plan.

(D) "CODE" shall mean the Internal Revenue Code of 1986, as
amended from time to time.

(E) "COMMITTEE" shall mean the committee appointed by the
Board to administer this Plan.

(F) "COMMON STOCK" shall mean the Company's Common Stock,
$.001 par value (or such other par value as may be designated by act of the
Company's stockholders).

(G) "COMPANY" shall mean UTI Energy Corporation, a Delaware
corporation.

(H) "DISABILITY" shall mean a mental or physical disability
which, in the opinion of a physician selected by the Committee, shall prevent
the Employee from earning a reasonable livelihood with the Company or any
Subsidiary and which can be expected to result in death or which has lasted or
can be expected to last for a continuous period of not less than 12 months and
which: (a) was not contracted, suffered or incurred while the Employee was
engaged in, or did not result from having engaged in, a felonious criminal
enterprise; (b) did not result from alcoholism or addiction to narcotics; and
(c) did not result from an injury incurred while a member of the Armed Forces
of the United States for which the Employee receives a military pension.

(I) Intentionally omitted.
<PAGE> 2
(J) "EMPLOYEE" shall mean an officer or employee of the
Company or a Subsidiary.

(K) "EXCHANGE ACT" shall mean the Securities Exchange Act of
1934, as amended.

(L) "FAIR MARKET VALUE" shall mean the closing sale price of
a share of Common Stock on that date as reported by the principal national
securities exchange on which the Common Stock is listed if the Common Stock is
then listed on a national securities exchange, or if the Common Stock is not so
listed, the average of the bid and asked price of a share of Common Stock on
that date and reported in the National Association of Securities Dealers
Automated Quotation system (the "NASDAQ System"); provided that if no such
closing price or quotes are so reported on that date or if in the discretion of
the Committee another means of determining the Fair Market Value of a share of
stock at such date shall be necessary or advisable, the Committee may provide
for another means for determining such Fair Market Value.

(M) "INCENTIVE STOCK OPTION" shall mean an Option that is
intended by the Committee to meet the requirements of Section 422 of the Code
or any successor provision.

(N) "NON-INCENTIVE STOCK OPTION" shall mean an Option granted
pursuant to this Plan which does not qualify as an Incentive Stock Option.

(O) "OPTION" shall mean the right to purchase Common Stock at
a price to be specified and upon terms to be designated by the Committee
pursuant to this Plan. An Option shall be designated by the Committee as an
Incentive Stock Option or a Non-Incentive Stock Option.

(P) "OPTION PRICE" shall mean the price at which shares may
be purchased pursuant to an Option.

(Q) "PLAN" shall mean this UTI Energy Corporation 1996
Employee Stock Option Plan.

(R) "RETIRE" or "RETIREMENT" shall mean retirement in
accordance with the terms of a retirement plan that is qualified under Section
401(a) of the Code and maintained by the Company or a Subsidiary in which the
employee is a participant.

(S) "SUBSIDIARY" shall mean any present or future subsidiary
corporations, as defined in Section 424 of the Code, of the Company.

SECTION 3. STOCK SUBJECT TO THE PLAN

The total amount of the Common Stock with respect to which
Awards may be granted shall not exceed in the aggregate 300,000 shares. The
class and aggregate number of shares which may be subject to the Options
granted under this Plan shall be subject to adjustment under Section 7. Shares
may be treasury shares or authorized but unissued shares. If any Award under
the Plan shall expire or terminate

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<PAGE> 3
for any reason without having been exercised in full, or if any Award shall be
forfeited, the shares subject to the unexercised or forfeited portion of such
Award shall again be available for the purposes of the Plan.

SECTION 4. ADMINISTRATION

The Committee shall consist of not less than two members of
the Board, who are not Employees. The Board shall have the power from time to
time to add or remove members of the Committee, and to fill vacancies arising
for any reason. The Committee shall designate a chairman from among its
members, who shall preside at all of its meetings, and shall designate a
secretary, without regard to whether that person is a member of the Committee,
who shall keep the minutes of the proceedings and all records, documents, and
data pertaining to its administration of the Plan. Meetings shall be held at
any time and place as it shall choose. A majority of the members of the
Committee shall constitute a quorum for the transaction of business. The vote
of a majority of those members present at any meeting shall decide any question
brought before that meeting. In addition, the Committee may take any action
otherwise proper under the Plan by the affirmative vote, taken without a
meeting, of a majority of its members. No member of the Committee shall be
liable for any act or omission of any other member of the Committee or for any
act or omission on his own part, including but not limited to the exercise of
any power or discretion given to him under the Plan, except those resulting
from his own gross negligence or willful misconduct. All questions of
interpretation and application of the Plan, or as to Awards granted under it
shall be subject to the determination of a majority of the Committee. The
Committee in exercising any power or authority granted under this Plan or in
making any determination under this Plan shall perform or refrain from
performing those acts using its sole discretion and judgment. Any decision
made by the Committee or any refraining to act or any act taken by the
Committee in good faith shall be final and binding on all parties. The
Committee's decision shall never be subject to de novo review. When
appropriate the Plan shall be administered in order to qualify certain of the
Options granted under it as Incentive Stock Options.

SECTION 5. ELIGIBILITY

The individuals who shall be eligible to participate in the
Plan shall be those full-time key Employees, including directors if they are
Employees, as the Committee shall determine during the term of this Plan. No
individual shall be eligible to receive an Award under the Plan while that
individual is a member of the Committee.

No Employee who owns stock possessing more than 10% of the
total combined voting power of all classes of stock of the corporation
employing the Employee or of its parent or subsidiary corporation shall be
eligible to receive an Option which is an Incentive Stock Option unless at the
time that the Option is granted the option price is at least 110% of the Fair
Market Value of the Common Stock at the time the Option is granted and the
Option by its own terms is not exercisable after the expiration of five years
from the date the Option is granted.

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<PAGE> 4
An Employee will be considered as owning the stock owned,
directly or indirectly, by or for his brothers and sisters (whether by the
whole or half blood), spouse, ancestors, and lineal descendants. Stock owned,
directly or indirectly, by or for a corporation, partnership, estate or trust
will be considered as being owned proportionately by or for its stockholders,
partners or beneficiaries. For all purposes of this Plan, a parent corporation
is any corporation (other than the Company) in an unbroken chain of
corporations ending with the Company if, on the date of grant of the Option in
question, each of the corporations other than the Company owns stock possessing
50% or more of the total combined voting power of all classes of stock in one
of the other corporations in that chain; and a subsidiary corporation is any
corporation (other than the Company) in an unbroken chain of corporations
beginning with the Company if, on the date of grant of the Option in question,
each of the corporations, other than the last corporation in the chain, owns
stock possessing 50% or more of the total combined voting power of all classes
of stock in one of the other corporations in that chain.

SECTION 6. MAXIMUM NUMBER OF SHARES SUBJECT TO AN AWARD

The maximum number of shares of Common Stock subject to
Options that may be awarded to any Employee under the Plan during any
consecutive three year period is 100,000.

SECTION 7. STOCK OPTIONS

A. AUTHORITY TO GRANT OPTIONS. The Committee may grant
Incentive Stock Options or Non-Incentive Stock Options at any time during the
term of this Plan to any eligible Employee that it chooses.

Each Option granted shall be approved by the Committee.
Subject only to any applicable limitations set forth in this Plan, the number
of shares of Common Stock to be covered by an Option shall be as determined by
the Committee.

B. OPTION PRICE. The price at which shares may be purchased
pursuant to an Option shall be fixed by the Committee, but such price for an
Incentive Stock Option shall be not less than the Fair Market Value of the
shares of Common Stock on the date the Option is granted. The Committee in its
discretion may provide that the price at which shares may be purchased shall be
more than the minimum price required.

C. DURATION OF OPTIONS. No Option which is an Incentive
Stock Option shall be exercisable after the expiration of ten years from the
date such Option is granted. The Committee in its discretion may provide that
such Option shall be exercisable throughout the ten year period or during any
lesser period of time commencing on or after the date of grant of such Option
and ending upon or before the expiration of the ten year period. If an
Employee owns stock possessing more than 10% of the total combined voting power
of all classes of stock of the corporation employing the Employee or of its
parent or subsidiary corporation, no Option which is an Incentive Stock Option
shall be exercisable after the expiration of five years from the date such
Option is granted. No Option which is a Non-Incentive Stock Option shall

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<PAGE> 5
be exercisable after the expiration of ten years from the date such Option is
granted. The Committee in its discretion may provide that such Option shall be
exercisable throughout the ten year period or during any lesser period of time
commencing on or after the date of grant of such Option and ending upon or
before the expiration of the ten year period.

D. MAXIMUM VALUE OF STOCK SUBJECT TO OPTIONS WHICH ARE
INCENTIVE STOCK OPTIONS. To the extent that the aggregate Fair Market Value
(determined as of the date the Option is granted) of the stock with respect to
which Incentive Stock Options are exercisable for the first time by the
Optionee in any calendar year (under this Plan and any other incentive stock
option plan(s) of the Company and any parent and subsidiary corporation)
exceeds $100,000, the Options shall be treated as Non-Incentive Stock Options.
In making this determination, Options shall be taken into account in the order
in which they were granted.

E. AMOUNT EXERCISABLE. The Committee, in its discretion, may
fix the terms of exercise of any Option so that any Option may be exercised so
long as it is valid and outstanding from time to time in part or as a whole in
such manner and subject to such conditions as it may set. In addition, the
Committee, in its discretion, may accelerate the time in which any outstanding
Option may be exercised. But in no event shall any Option be exercisable after
the tenth anniversary of the date of the grant.

F. EXERCISE OF OPTIONS. An Optionee may exercise such
optionee's Option by delivering to the Company a written notice stating (i)
that such optionee wishes to exercise such Option on the date such notice is so
delivered, (ii) the number of shares of stock with respect to which the Option
is to be exercised and (iii) the address to which the certificate representing
such shares of stock should be mailed. In order to be effective, such written
notice shall be accompanied by (i) payment of the Option Price of such shares
of stock and (ii) payment of an amount of money necessary to satisfy any
withholding tax liability that may result from the exercise of such Option.
Each such payment shall be made by cashier's check drawn on a national banking
association and payable to the order of the Company in United States dollars or
other check acceptable to the Committee.

If, at the time of receipt by the Company of such written
notice, (i) the Company has unrestricted surplus in an amount not less than the
Option Price of such shares of stock, (ii) all accrued cumulative preferential
dividends and other current preferential dividends on all outstanding shares of
preferred stock of the Company have been fully paid, (iii) the acquisition by
the Company of its own shares of stock for the purpose of enabling such
optionee to exercise such Option is otherwise permitted by applicable law and
without any vote or consent of any stockholder of the Company, and (iv) there
shall have been adopted, and there shall be in full force and effect, a
resolution of the Board of Directors of the Company authorizing the acquisition
by the Company of its own shares of stock for such purpose, then such optionee
may deliver to the Company, in payment of the Option Price of the shares of
stock with respect to which such Option is exercised, (x) certificates
registered in the name of such optionee that represent a number of shares of
stock legally and beneficially owned by such optionee (free of all liens,
claims and encumbrances of every kind) and having a Fair

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<PAGE> 6
Market Value on the date of receipt by the Company of such written notice that
is not greater than the Option Price of the shares of stock with respect to
which such Option is to be exercised, such certificates to be accompanied by
stock powers duly endorsed in blank by the record holder of the shares of stock
represented by such certificates, with the signature of such record holder
guaranteed by a national banking association (or, in lieu of such certificates,
other arrangements for the transfer of such shares to the Company which are
satisfactory to the Company) and (y) if the Option Price of the shares of stock
with respect to which such Options are to be exercised exceeds such Fair Market
Value, a cashier's check drawn on a national banking association and payable to
the order of the Company in an amount, in United States dollars, equal to the
amount of such excess plus the amount of money necessary to satisfy any
withholding tax liability that may result from the exercise of such Option.
Notwithstanding the provisions of the immediately preceding sentence, the
Committee, in its sole discretion, may refuse to accept shares of stock in
payment of the Option Price of the shares of stock with respect to which such
Option is to be exercised and, in that event, any certificates representing
shares of stock that were received by the Company with such written notice
shall be returned to such optionee, together with notice by the Company to such
optionee of the refusal of the Committee to accept such shares of stock. The
Company may, at its option and upon approval by the Board of Directors of the
Company, retain shares of Common Stock which would otherwise be issued upon
exercise of an Option to satisfy any withholding tax liability that may result
from the exercise of such Option, which shares shall be valued for such purpose
at their then Fair Market Value. If, at the expiration of seven business days
after the delivery to such optionee of such written notice from the Company,
such optionee shall not have delivered to the Company a cashier's check drawn
on a national banking association and payable to the order of the Company in an
amount, in United States dollars, equal to the Option Price of the shares of
stock with respect to which such Option is to be exercised, such written notice
from the optionee to the Company shall be ineffective to exercise such Option.

As promptly as practicable after the receipt by the Company of
(i) such written notice from the optionee, (ii) payment, in the form required
by the foregoing provisions of this Paragraph F, of the Option Price of the
shares of stock with respect to which such Option is to be exercised, and (iii)
payment, if required, in the form required by the foregoing provisions of this
Paragraph F, of an amount necessary to satisfy any withholding tax liability
that may result from the exercise of such Option, a certificate representing
the number of shares of stock with respect to which such Option has been so
exercised, reduced, to the extent applicable by the number of shares retained
by the Company to pay any required withholding tax, such certificate to be
registered in the name of such optionee, provided that such delivery shall be
considered to have been made when such certificate shall have been mailed,
postage prepaid, to such optionee at the address specified for such purpose in
such written notice from the optionee to the Company.

G. TRANSFERABILITY OF OPTIONS. Options shall not be
transferable by the optionee except by will or under the laws of descent and
distribution, and shall be exercisable, during his lifetime, only by him. Any
attempted sale, assignment, transfer, pledge or encumbrance of an Option in
violation of this Agreement shall be void and the Company shall not be bound
thereby.

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<PAGE> 7
H. TERMINATION OF EMPLOYMENT OR DEATH OF OPTIONEE.

1. Except as may be otherwise expressly provided in the
Option Agreement with respect to an Option that is a Non-Incentive Stock
Option, all Options shall terminate on the earlier of the date of the
expiration of the Option or one day less than three months after the date of
severance, upon severance of the employment relationship between the Company
and the optionee, whether with or without cause, for any reason other than the
death, Disability or, in the case of Non-Incentive Stock Options only,
Retirement of the optionee, during which period the optionee shall be entitled
to exercise the Option in respect of the number of shares that the optionee
would have been entitled to purchase had the optionee exercised the Option on
the date of such severance of employment. Whether authorized leave of absence,
or absence on military or government service, shall constitute severance of the
employment relationship between the Company and the optionee for purposes of
the Plan shall be determined by the Committee at the time thereof. In the
event of severance because of the Disability of the holder of any Incentive
Stock Option while in the employ of the Company and before the date of
expiration of such Incentive Stock Option, such Incentive Stock Option shall
terminate on the earlier of such date of expiration or one year following the
date of such severance because of Disability, during which period the optionee
shall be entitled to exercise the Incentive Stock Option in respect to the
number of shares that the optionee would have been entitled to purchase had the
optionee exercised the Incentive Stock Option on the date of such severance
because of Disability.

2. In the event of the death of the holder of any
Incentive Stock Option while in the employ of the Company and before the date
of expiration of such Incentive Stock Option, such Incentive Stock Option shall
terminate on the earlier of such date of expiration or one year following the
date of death. After the death of the optionee, his executors, administrators
or any person or persons to whom his Incentive Stock Option may be transferred
by will or by the laws of descent and distribution, shall have the right, at
any time prior to the termination of an Incentive Stock Option to exercise the
Incentive Stock Option, in respect to the number of shares that the optionee
would have been entitled to exercise if he had exercised the Incentive Stock
Option on the date of his death while in employment. For purposes of Incentive
Stock Options issued under this Plan, an employment relationship between the
Company and the optionee shall be deemed to exist during any period in which
the optionee is employed by the Company, a corporation issuing or assuming an
option in a transaction to which Section 424(a) of the Code applies, or a
parent or subsidiary corporation of such corporation issuing or assuming an
option. For this purpose, the phrase "corporation issuing or assuming an
option" shall be substituted for the word "Company" in the definitions of
parent and subsidiary corporations in Section 5 and the parent-subsidiary
relationship shall be determined at the time of the corporate action described
in Section 424(a) of the Code.

3. In the event of the death, Disability, or Retirement
of a holder of a Non-Incentive Stock Option, before the date of expiration of
such Non-Incentive Stock Option, such Non-Incentive Stock Option shall continue
fully in effect, including provisions providing for subsequent vesting of such
Option, and shall terminate on the date of expiration of the Non-Incentive
Stock Option. After the death of the optionee,

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<PAGE> 8
his executors, administrators or any person or persons to whom his
Non-Incentive Stock Option may be transferred by will or by the laws of descent
and distribution, shall have the right, at any time prior to the termination of
the Non-Incentive Stock Option to exercise the Non-Incentive Stock Option, in
respect to the number of shares that the optionee would have been entitled to
exercise if he were still alive. Notwithstanding the foregoing provisions of
this Section, in the case of a Non-Incentive Stock Option the Committee may
provide for a different option termination date in the Option Agreement with
respect to such Option.

I. NO RIGHTS AS STOCKHOLDER. No optionee shall have rights
as a stockholder with respect to shares covered by his Option until the date a
stock certificate is issued for the shares. Except as provided in the
following provisions of this Section 7, no adjustment for dividends, or other
matters shall be made if the record date is prior to the date the certificate
is issued.

J. CHANGES IN THE COMPANY'S CAPITAL STRUCTURE. The existence
of outstanding Options shall not affect in any way the right or power of the
Company or its stockholders to make or authorize any or all adjustments,
recapitalizations, reorganizations or other changes in the Company's capital
structure or its business, or any merger or consolidation of the Company, or
any issue of bonds, debentures, preferred or prior preference stock ahead of or
affecting the Common Stock or the rights thereof, or the dissolution or
liquidation of the Company, or any sale or transfer of all or any part of its
assets or business, or any other corporate act or proceeding, whether of a
similar character or otherwise.

If the Company shall effect a subdivision or consolidation of
shares or other capital adjustment of, or the payment of a dividend in capital
stock or other equity securities of the Company on, its Common Stock, or other
increase or reduction of the number of shares of the Common Stock without
receiving consideration therefor in money, services, or property, or the
reclassification of its Common Stock, in whole or in part, into other equity
securities of the Company, then (a) the number, class and per share price of
shares of stock subject to outstanding Options hereunder shall be appropriately
adjusted (or in the case of the issuance of equity securities as a dividend on,
or in a reclassification of, the Common Stock, the Options shall extend to such
other securities) in such a manner as to entitle an optionee to receive, upon
exercise of an Option, for the same aggregate cash compensation, the same total
number and class or classes of shares (or in the case of a dividend of, or
reclassification into, other equity securities, such other securities) he would
have held after such adjustment if he had exercised his Option in full
immediately prior to the event requiring the adjustment, or, if applicable, the
record date for determining stockholders to be affected by such adjustment; and
(b) the number and class of shares then reserved for issuance under the Plan
(or in the case of a dividend of, or reclassification into, other equity
securities, such other securities) shall be adjusted by substituting for the
total number and class of shares of stock then received, the number and class
or classes of shares of stock (or in the case of a dividend of, or
reclassification into, other equity securities, such other securities) that
would have been received by the owner of an equal number of outstanding shares
of Common Stock as the result of the event requiring the adjustment.
Comparable rights shall accrue to each optionee in the event of successive

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<PAGE> 9
subdivisions, consolidations, capital adjustment, dividends or
reclassifications of the character described above.

If the Company shall distribute to all holders of its shares
of Common Stock (including any such distribution made to non-dissenting
stockholders in connection with a consolidation or merger in which the Company
is the surviving corporation and in which holders of shares of Common Stock
continue to hold shares of Common Stock after such merger or consolidation)
evidences of indebtedness or cash or other assets (other than cash dividends
payable out of consolidated retained earnings not in excess of, in any one year
period, the greater of (a) $.10 per share of Common Stock and (b) two times the
aggregate amount of dividends per share paid during the preceding calendar year
and dividends or distributions payable in shares of Common Stock or other
equity securities of the Company described in the immediately preceding
paragraph), then in each case the Option Price shall be adjusted by reducing
the Option Price in effect immediately prior to the record date for the
determination of stockholders entitled to receive such distribution by the Fair
Market Value, as determined in good faith by the Board of Directors of the
Company (whose determination shall be described in a statement filed in the
Company's corporate records and be available for inspection by any holder of an
Option) of the portion of the evidence of indebtedness or cash or other assets
so to be distributed applicable to one share of Common Stock; provided that in
no event shall the Option Price be less than the par value of a share of Common
Stock. Such adjustment shall be made whenever any such distribution is made,
and shall become effective on the date of the distribution retroactive to the
record date for the determination of the stockholders entitled to receive such
distribution. Comparable adjustments shall be made in the event of successive
distributions of the character described above.

After the Company shall make a tender offer for, or grant to
all of its holders of its shares of Common Stock the right to require the
Company to acquire from such stockholders shares of, Common Stock, at a price
in excess of the Current Market Price (a "Put Right") or the Company shall
grant to all of its holders of its shares of Common Stock the right to acquire
shares of Common Stock for less than the Current Market Price (a "Purchase
Right") then, in the case of a Put Right, the Option Price shall be adjusted by
multiplying the Option Price in effect immediately prior to the record date for
the determination of stockholders entitled to receive such Put Right by a
fraction, the numerator of which shall be the number of shares of Common Stock
then outstanding minus the number of shares of Common Stock which could be
purchased at the Current Market Price for the aggregate amount which would be
paid if all Put Rights are exercised and the denominator of which is the number
of shares of Common Stock which would be outstanding if all Put Rights are
exercised; and, in the case of a Purchase Right, the Option Price shall be
adjusted by multiplying the Option Price in effect immediately prior to the
record date for the determination of the stockholders entitled to receive such
Purchase Right by a fraction, the numerator of which shall be the number of
shares of Common Stock then outstanding plus the number of shares of Common
Stock which could be purchased at the Current Market Price for the aggregate
amount which would be paid if all Purchase Rights are exercised and the
denominator of which is the number of shares of Common Stock which would be
outstanding if all Purchase Rights are exercised. In addition, the number of
shares subject to the Option shall be increased by multiplying the number of
shares then

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<PAGE> 10
subject to the Option by a fraction which is the inverse of the fraction used
to adjust the Option Price. Notwithstanding the foregoing if any such Put
Rights or Purchase Rights shall terminate without being exercised, the Option
Price and number of shares subject to Option shall be appropriately readjusted
to reflect the Option Price and number of shares subject to the Option which
would have been in effect if such unexercised Rights had never existed.
Comparable adjustments shall be made in the event of successive transactions of
the character described above.

After the merger of one or more corporations into the Company,
after any consolidation of the Company and one or more corporations, or after
any other corporate transaction described in Section 424(a) of the Internal
Revenue Code of 1986, as amended (the "Code") in which the Company shall be the
surviving corporation, each optionee, at no additional cost, shall be entitled
to receive, upon any exercise of his Option, in lieu of the number of shares as
to which the Option shall then be so exercised, the number and class of shares
of stock or other equity securities to which the optionee would have been
entitled pursuant to the terms of the agreement of merger or consolidation if
at the time of such merger or consolidation such optionee had been a holder of
a number of shares of Common Stock equal to the number of shares as to which
the Option shall then be so exercised and, if as a result of such merger,
consolidation or other transaction, the holders of Common Stock are not
entitled to receive any shares of Common Stock pursuant to the terms thereof,
each optionee, at no additional cost, shall be entitled to receive, upon
exercise of his Option, such other assets and property, including cash, to
which he would have been entitled if at the time of such merger, consolidation
or other transaction he had been the holder of the number of shares of Common
Stock equal to the number of shares as to which the Option shall then be so
exercised. Comparable rights shall accrue to each optionee in the event of
successive mergers or consolidations of the character described above.

After a merger of the Company into one or more corporations,
after any consolidation of the Company and any one or more corporations, or
after any other corporate transaction described in Section 424(a) of the Code
in which the Company is not the surviving corporation, each optionee shall, at
no additional cost, be entitled at the option of the surviving corporation, (i)
to have his then existing Option assumed or to have a new option substituted
for the existing Option by the surviving corporation to the transaction which
is then employing him, or a parent or subsidiary of such corporation, on a
basis where the excess of the aggregate Fair Market Value of the shares subject
to the option immediately after the substitution or assumption over the
aggregate option price of such option is equal to the excess of the aggregate
Fair Market Value of all shares subject to the option immediately before such
substitution or assumption over the aggregate option price of such shares,
provided that the shares subject to the new option must be traded on the New
York Stock Exchange or the American Stock Exchange or quoted on the NASDAQ, or
(ii) to receive upon any exercise of his Option, in lieu of the number of
shares as to which the Option shall then be so exercised, the securities,
property and other assets, including cash, to which the Optionee would have
been entitled pursuant to the terms of the agreement of merger or consolidation
or the agreement giving rise to the other corporate transaction if at the time
of such merger, consolidation or other transaction such optionee had been the
holder of the number of shares of Common Stock equal to the number of shares as
to which the Option shall then be so exercised.

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<PAGE> 11
If a corporate transaction described in Section 424(a) of the
Code which involves the Company is to take place and there is to be no
surviving corporation while an Option remains in whole or in part unexercised,
it shall be cancelled by the Board of Directors as of the effective date of any
such corporate transaction but before the date each optionee shall be provided
with a notice of such cancellation and each optionee shall have the right to
exercise such Option in full (without regard to any limitations set forth in or
imposed pursuant to Paragraph 9 of the Plan) to the extent it is then still
unexercised during a 30-day period preceding the effective date of such
corporate transaction.

For purposes of this Paragraph J, "Current Market Price per
share of Common Stock" shall mean the closing price of a share of Common Stock
on the principal national securities exchange on which the Common Stock is
listed or, if the Common Stock is not so listed, the average bid and asked
price of a share of Common Stock as reported in the NASDAQ System, in each case
on the trading day immediately preceding the first trading day on which, as a
result of the establishment of a record date or otherwise, the trading price
reflects that an acquiror of Common Stock in the public market will not
participate in or receive the payment of any applicable dividend or
distribution.

Except a hereinbefore expressly provided, the issue by the
Company of shares of Common Stock of any class, or securities convertible into
shares of stock of any class, for cash or property, or for labor or services
either upon direct sale or upon the exercise of rights or warrants to subscribe
therefor, or upon conversion of shares or obligations of the Company
convertible into such shares or other securities, shall not affect, and no
adjustment by reason thereof shall be made with respect to, the number or price
of shares of Common Stock then subject to outstanding Options.

K. SUBSTITUTION OPTIONS. Options may be granted under this
Plan from time to time in substitution for stock options held by employees of
other corporations who are about to become employees of the Company, or whose
employer is about to become a parent or subsidiary corporation, conditioned in
the case of an incentive stock option upon the employee becoming an employee as
the result of a merger or consolidation of the Company with another
corporation, or the acquisition by the Company of substantially all the assets
of another corporation, or the acquisition by the Company of at least 50% of
the issued and outstanding stock of another corporation as the result of which
it becomes a subsidiary of the Company. The terms and conditions of the
substitute Options granted may vary from the terms and conditions of this Plan
to the extent the Board at the time of grant may deem appropriate to conform,
in whole or in part, to the provisions of the stock options in substitution for
which they are granted. But with respect to stock options which are incentive
stock options, no variation shall be made which will affect the status of any
substitute option as an "incentive stock option" under Section 422 of the Code.

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<PAGE> 12
L. ACCELERATION AND CANCELLATION OF OPTION IN CONTEMPLATION
OF CHANGE IN CONTROL. Notwithstanding the provisions of this Section 7, the
Committee shall have the power, in the event of a disposition of all or
substantially all of the assets of the Company, or the dissolution of the
Company, or any merger or consolidation of the Company with or into any other
Company, or the merger or consolidation of any other entity into the Company,
or the making of a tender offer to purchase 30% or more of the outstanding
shares of Common Stock, to amend all outstanding Options (upon such conditions
as it shall deem appropriate) to (i) permit the exercise of Options prior to
the effective date of the transaction and to terminate all unexercised Options
as of such date or (ii) require the forfeiture of all Options, provided the
Company pays to each Optionee the excess of the Fair Market Value of the Stock
subject to the Option over the exercise price of the Option, or (iii) make any
other provision with respect to the Options that the Committee deems
appropriate and equitable.

SECTION 8. REQUIREMENTS OF LAW

The Company shall not be required to sell, issue or deliver
any shares of Common Stock under any Award if such sale, issuance or delivery
shall constitute a violation by the Award recipient or the Company of any
provisions of any law or regulation of any governmental authority. Each Award
granted under this Plan shall be subject to the requirements that, if at any
time the Board or the Committee shall determine that the listing, registration
or qualification of the shares upon any securities exchange or under any state
or federal law of the United States or of any other country or governmental
subdivision, or the consent or approval of any governmental regulatory body, or
investment or other representations, are necessary or desirable in connection
with the issue, or purchase or delivery of shares subject to an Award, that
Award shall not be exercised in whole or in part and no shares shall be
delivered pursuant to an Award unless the listing, registration, qualification,
consent, approval or representations shall have been effected or obtained free
of any conditions not acceptable to the Committee. Any determination in this
connection by the Committee shall be final. In the event the shares issuable
or deliverable on exercise or vesting of an Award are not registered under the
Securities Act of 1933, the Company may imprint on the certificate for those
shares the following legend or any other legend which counsel for the Company
considers necessary or advisable to comply with the Securities Act of 1933:

"The shares of stock represented by this certificate have not
been registered under the Securities Act of 1933 or under the
securities laws of any state and may not be sold or
transferred except upon registration or upon receipt by the
Corporation of an opinion of counsel satisfactory to the
Corporation, in form and substance satisfactory to the
Corporation, that registration is not required for a sale or
transfer."

The Company may, but shall in no event be obligated to, register any securities
covered by this Plan under the Securities Act of 1933 (as now in effect or as
later amended) and, in the event any shares are registered, the Company may
remove any legend on certificates representing those shares. The Company shall
not be obligated to take any

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<PAGE> 13
other affirmative action in order to cause the exercise of an Award or the
issuance or delivery of shares under the Award to comply with any law or
regulation or any governmental authority.

SECTION 9. EMPLOYMENT OBLIGATION

The granting of any Award shall not impose upon the Company
any obligation to employ or continue to employ any Award recipient. The right
of the Company to terminate the employment of any officer or other Employee
shall not be diminished or affected by reason of the fact that an Award has
been granted to him.

SECTION 10. FORFEITURE FOR CAUSE

Notwithstanding any other provision of this Plan, if the
Committee finds by a majority vote, that the Award recipient, before or after
termination of his employment with the Company (a) committed a fraud,
embezzlement, theft, felony or act of dishonesty in the course of his
employment by the Company which conduct damaged the Company or (b) disclosed
trade secrets of the Company, then any outstanding options which have not been
exercised by the individual and any Awards which have not yet vested will be
forfeited. The decision of the Committee as to the cause of an Award
recipient's discharge, the damage done to the Company and the extent of the
individual's competitive activity will be final. No decision of the Committee,
however, will affect the finality of the discharge of the individual by the
Company.

SECTION 11. AMENDMENT OR TERMINATION OF PLAN

The Board may modify, revise or terminate this Plan at any
time and from time to time. However, without the further Company stockholder
approval by a majority of the votes cast at a duly held stockholders' meeting
at which a quorum representing a majority of all outstanding voting stock (or
if the provisions of the corporate charter, bylaws or applicable state law
prescribe a greater degree of stockholder approval for this action, without the
degree of stockholder approval thus required) is, either in person or by proxy,
present and voting on the issue, the Board may not (a) increase the aggregate
number of shares that may be subject to Awards pursuant to the provisions of
this Plan; (b) materially increase the benefits accruing to participants under
this Plan or (c) materially modify the requirements as to eligibility for
participation in this Plan unless, in each such case, the Board of Directors of
the Company shall have obtained an opinion of legal counsel to the effect that
stockholder approval of the amendment is not required (i) by law, (ii) by the
applicable rules and regulations of, or any agreement with, any national
securities exchange that the Common Stock is then listed on or if the Common
Stock is not so listed, the rules and regulations, or any agreement with, the
National Association of Securities Dealers, Inc., and (iii) in order to make
available to the optionee with respect to any option granted under the Plan,
the benefits of Rule 16b-3 of the Rules and Regulations under the Securities
Exchange Act of 1934, or any similar or successor rule.

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<PAGE> 14
SECTION 12. WRITTEN AGREEMENT

Each Award granted under this Plan shall be embodied in a
written Agreement, which shall be subject to the terms and conditions
prescribed above, and shall be signed by the recipient and by the appropriate
officer of the Company for and in the name and on behalf of the Company. Each
Agreement shall contain any other provisions consistent with this Plan that the
Committee in its discretion shall deem advisable.

SECTION 13. INDEMNIFICATION OF THE COMMITTEE

The Company shall indemnify each present and future member of
the Committee against, and each member of the Committee shall be entitled
without further act on his part to indemnity from the Company for, all expenses
(including the amount of judgments and the amount of approved settlements made
with a view to the curtailment of costs of litigation, other than amounts paid
to the Company itself) reasonably incurred by him in connection with or arising
out of any action, suit or proceeding in which he may be involved by reason of
his being or having been a member of the Committee, whether or not he continues
to be such member of the Committee at the time of incurring such expenses;
provided, however, that such indemnity shall not include any expenses incurred
by any such member of the Committee (a) in respect of matters as to which he
shall be finally adjudged in any such action, suit or proceeding to have been
guilty of gross negligence or willful misconduct in the performance of his duty
as such member of the Committee, or (b) in respect of any matter in which any
settlement is effected, to an amount in excess of the amount approved by the
Company on the advice of its legal counsel; and provided further, that no right
of indemnification under the provisions set forth herein shall be available to
or enforceable by any such member of the Committee unless, within sixty (60)
days after institution of any such action, suit or proceeding, he shall have
offered the Company, in writing, the opportunity to handle and defend the same
at its own expense. The foregoing right of indemnification shall inure to the
benefit of the heirs, executors or administrators of each such member of the
Committee and shall be in addition to all other rights to which such member of
the Committee may be entitled to as a matter of law, contract or otherwise.
Nothing in this Section shall be construed to limit or otherwise affect any
right to indemnification or payment of expense, or any provisions limiting the
liability of any officer or director of the Company or any member of the
Committee, provided by law, the Certificate of Incorporation of the Company or
otherwise.

SECTION 14. AWARD GRANT TERMINATION.

No Awards shall be granted pursuant to this Plan after December
19, 2005.

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<PAGE> 1
EXHIBIT 10.9

UTI ENERGY CORP.

STOCK OPTION AGREEMENT

THIS STOCK OPTION AGREEMENT (this "Agreement"), is made and entered
into effective as of the 19th day of December, 1995, by and between UTI Energy
Corp., a Delaware corporation (the "Company"), and Remy Investors and
Consultants Incorporated, a Delaware corporation ("Optionee").

W I T N E S S E T H:

WHEREAS, the Company's Board of Directors has determined that it is in
the interest of the Company, in consideration for past consulting services on
behalf of the Company, to grant to the Optionee the right to acquire certain
shares of the Company's common stock, $.001 par value per share (the "Common
Stock"), subject to the terms and provisions of this Agreement.

NOW, THEREFORE, in consideration of the mutual undertakings,
covenants, conditions and agreements contained herein, and other good and
valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the Company and Optionee agree with each other as follows:

1. Grant of Stock Option. The Company hereby grants to Optionee,
subject to the provisions hereinafter set forth, the right (the "Option") to
purchase 120,000 shares of Common Stock of the Company (the "Option Shares").
The Option Shares shall be subject to adjustment as hereinafter set forth.
This Option shall be exercisable at any time after the date hereof and on or
before December 18, 2000 (the "Expiration Date").

2. Exercise Price. The exercise price per share for which all or
any of the Option Shares may be purchased shall be $511/16 (the "Exercise
Price"). The Exercise Price shall be subject to adjustment as hereinafter set
forth.

3. Exercise.

(a) The Option may be exercised by Optionee, in full or
in part, for the purchase of any of the Option Shares upon delivery by
Optionee of written notice to the Company at the address of the
Company set forth in Section 8, or such other address as the Company
shall designate in written notice to Optionee, setting forth the
number of Option Shares with respect to which the Option is being
exercised,
<PAGE> 2
together with the Option and payment (in the manner described in
Section 3(b) below) for the aggregate Exercise Price of the Option
Shares so purchased. Upon the exercise of the Option, the Company
shall as promptly as practicable execute and deliver to Optionee a
certificate or certificates for the total number of whole Option
Shares for which the Option is being exercised in such names and
denominations as are requested by Optionee. If the Option shall be
exercised with respect to less than all of the Option Shares, Optionee
shall be entitled to receive a new Option covering the number of
Option Shares in respect of which the Option shall not have been
exercised, which new Option shall in all other respects be identical
to the Option.

(b) Payment for the Option Shares to be purchased upon
the exercise of the Option may be made by the delivery of a check
payable to the Company in the amount of the aggregate Exercise Price
of the Option Shares to be purchased.

4. Covenants and Conditions. The above provisions are subject to
the following:

(a) Optionee acknowledges and agrees that neither the
Option nor the Option Shares have been registered under the Securities
Act of 1933, as amended (the "Act"), or any state securities laws
("Blue Sky Laws"). Optionee covenants and agrees that the Option and
the Option Shares have been acquired for investment purposes and not
with a view to distribution or resale and the Option Shares may not be
made subject to a security interest, pledged, hypothecated, sold or
otherwise transferred without an effective registration statement
therefor under the Act and such applicable Blue Sky Laws or an opinion
of counsel (which opinion and counsel rendering same shall be
reasonably acceptable to the Company) that registration is not
required under the Act and under any applicable Blue Sky Laws. The
certificates representing the Option Shares shall bear substantially
the following legend:

THE SHARES OF STOCK REPRESENTED BY THIS CERTIFICATE HAVE NOT
BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED
(THE "ACT"), OR QUALIFIED UNDER ANY APPLICABLE STATE
SECURITIES LAWS, BUT HAVE BEEN ACQUIRED FOR THE PRIVATE
INVESTMENT OF THE HOLDER HEREOF AND MAY NOT BE OFFERED, SOLD
OR TRANSFERRED UNTIL (I) A REGISTRATION STATEMENT UNDER THE
ACT OR SUCH APPLICABLE STATE SECURITIES LAWS SHALL HAVE BECOME
EFFECTIVE WITH REGARD THERETO, OR (II) IN THE OPINION OF
COUNSEL (WHICH OPINION AND COUNSEL SHALL BE REASONABLY
SATISFACTORY TO THE COMPANY) REGISTRATION UNDER THE ACT OR
SUCH APPLICABLE STATE SECURITIES LAWS SHALL HAVE BECOME
EFFECTIVE WITH REGARD THERETO, OR (III) IN THE OPINION OF
COUNSEL (WHICH OPINION AND COUNSEL SHALL BE REASONABLY
SATISFACTORY TO THE COMPANY) REGISTRATION UNDER THE LAW OR
SUCH APPLICABLE STATE SECURITIES LAWS IS NOT REQUIRED IN
CONNECTION WITH SUCH PROPOSED OFFER, SALE OR TRANSFER.

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<PAGE> 3
Other legends as required by applicable federal and state laws may be
placed on such certificates. Optionee and the Company agree to
execute such documents and instruments as counsel for the Company
reasonably deems necessary to effect compliance of the issuance of the
Option and any Option Shares issued upon the exercise thereof with
applicable federal and state securities laws. Optionee agrees that
the Company may decline to permit a transfer of the Option if the
proposed transferee does not meet the applicable qualifications for
investors in securities offerings exempt from registration.

(b) The Company covenants and agrees that all Option
Shares which may be issued upon the exercise of the Option will, upon
issuance and payment therefor, be legally and validly issued and
outstanding, fully paid and nonassessable.

5. Rights as a Shareholder. The Option does not confer upon
Optionee any right whatsoever as a shareholder of the Company.

6. Changes in the Company's Capital Structure. The existence of
the Option shall not affect in any way the right or power of the Company or its
stockholders to make or authorize any or all adjustments, recapitalizations,
reorganizations or other changes in the Company's capital structure or its
business, or any merger or consolidation of the Company, or any issue of bonds,
debentures, preferred or prior preference stock ahead of or affecting the
Common Stock or the rights thereof, or the dissolution or liquidation of the
Company, or any sale or transfer of all or any part of its assets or business,
or any other corporate act or proceeding, whether of a similar character or
otherwise.

If the Company shall distribute to all holders of its shares of Common
Stock (including any such distribution made to non-dissenting stockholders in
connection with a

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<PAGE> 4
consolidation or merger in which the Company is the surviving corporation and
in which holders of shares of Common Stock continue to hold shares of Common
Stock after such merger or consolidation) evidences of indebtedness or cash or
other assets (other than cash dividends payable out of consolidated retained
earnings not in excess of, in any one year period, the greater of (a) $.10 per
share of Common Stock and (b) two times the aggregate amount of dividends per
share paid during the preceding calendar year and dividends or distributions
payable in shares of Common Stock or other equity securities of the Company
described in the immediately preceding paragraph), then in each case the
Exercise Price shall be adjusted by reducing the Exercise Price in effect
immediately prior to the record date for the determination of stockholders
entitled to receive such distribution by the fair market value, as determined
in good faith by the Board of Directors of the Company (whose determination
shall be described in a statement filed in the Company's corporate records and
be available for inspection by the holder of the Option) of the portion of the
evidence of indebtedness or cash or other assets so to be distributed
applicable to one share of Common Stock; provided that in no event shall the
Exercise Price be less than the par value of a share of Common Stock. Such
adjustment shall be made whenever any such distribution is made, and shall
become effective on the date of the distribution retroactive to the record date
for the determination of the stockholders entitled to receive such
distribution. Comparable adjustments shall be made in the event of successive
distributions of the character described above.

After the Company shall make a tender offer for, or grant to all of
its holders of its shares of Common Stock the right to require the Company to
acquire from such stockholders shares of, Common Stock, at a price in excess of
the Current Market Price (a "Put Right") or the Company shall grant to all of
its holders of its shares of Common Stock the right to acquire shares of Common
Stock for less than the Exercise Price (the "Exercise Right") then, in the case
of a Put Right, the Exercise Price shall be adjusted by multiplying the
Exercise Price in effect immediately prior to the record date for the
determination of stockholders entitled to receive such Put Right by a fraction,
the numerator of which shall be the number of shares of Common Stock then
outstanding minus the number of shares of Common Stock which could be purchased
at the Current Market Price for the aggregate amount which would be paid if all
Put Rights are exercised and the denominator of which is the number of shares
of Common Stock which would be outstanding if all Put Rights are exercised;
and, in the case of a Purchase Right, the Exercise Price shall be adjusted by
multiplying the Exercise Price in effect immediately prior to the record date
for the determination of the stockholders entitled to receive such Purchase
Right by a fraction, the numerator of which shall be the number of shares of
Common Stock then outstanding plus the number of shares of Common Stock which
could be purchased at the Current Market Price for the aggregate amount which
would be paid if all Purchase Rights are exercised and the denominator of which
is the number of shares of Common Stock which would be outstanding if all
Purchase Rights are exercised. In addition, the number of shares subject to
the Option shall be increased by multiplying the number of shares then subject
to the Option by a fraction which is the inverse of the fraction used to adjust
the Exercise Price. Notwithstanding the foregoing if any such

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<PAGE> 5
Put Rights or Purchase Rights shall terminate without being exercised, the
Exercise Price and number of shares subject to the Option shall be
appropriately readjusted to reflect the Exercise Price and number of shares
subject to the Option which would have been in effect if such unexercised
Rights had never existed. Comparable adjustments shall be made in the event of
successive transactions of the character described above.

After the merger of one or more corporations with or into the Company,
after any consolidation of the Company and one or more corporations, or after
any other corporate transaction described in Section 424(a) of the Internal
Revenue Code of 1986, as amended, the holder of the Option, at no additional
cost, shall be entitled to receive, upon any exercise of the Option, in lieu of
the number of shares as to which the Option may then be so exercised, the
number and class of shares of stock or other equity securities to which the
holder would have been entitled pursuant to the terms of the agreement of
merger or consolidation if at the time of such merger or consolidation the
holder had been a holder of a number of shares of Common Stock equal to the
number of shares as to which the Option may then be so exercised and, if as a
result of such merger, consolidation or other transaction, the holders of
Common Stock are not entitled to receive any shares of Common Stock pursuant to
the terms thereof, the holder, at no additional cost, shall be entitled to
receive, upon exercise of the Option, such other assets and property, including
cash, to which the holder would have been entitled if at the time of such
merger, consolidation or other transaction the holder had been the holder of
the number of shares of Common Stock equal to the number of shares as to which
the Option shall then be so exercised. Comparable rights shall accrue in the
event of successive mergers or consolidations of the character described above.

For purposes of this Section 6, "Current Market Price per share of
Common Stock" shall mean the closing price of a share of Common Stock on the
principal national securities exchange on which the Common Stock is listed or,
if the Common Stock is not so listed, the average bid and asked price of a
share of Common Stock as reported in the NASDAQ System, in each case on the
trading day immediately preceding the first trading day on which, as a result
of the establishment of a record date or otherwise, the trading price reflects
that an acquiror of Common Stock in the public market will not participate in
or receive the payment of any applicable dividend or distribution.

Except as hereinbefore expressly provided, the issue by the Company of
shares of Common Stock of any class, or securities convertible into shares of
stock of any class, for cash or property, or for labor or services either upon
direct sale or upon the exercise of rights or warrants to subscribe therefor,
or upon conversion of shares or obligations of the Company convertible into
such shares or other securities, shall not affect, and no adjustment by reason
thereof shall be made with respect to, the number or price of shares of Common
Stock then subject to the Option.

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<PAGE> 6
7. Reservation of Common Stock. The Company will, at all times
during the term of this Agreement, reserve and keep available out of its
authorized but unissued shares of Common Stock, solely for the purpose of
effecting the exercise of the Option, such number of shares of Common Stock of
the Company as shall from time to time be sufficient to effect the exercise of
the Option. If, at any time, the number of authorized but unissued shares of
Common Stock shall not be sufficient to effect the exercise of the entire
Option, in addition to such other remedies as shall be available to the holder
of the Option, the Company will use its reasonable efforts to take such
corporate action as may, in the opinion of its counsel, be necessary to
increase its authorized but unissued shares of Common Stock to such number of
shares as shall be sufficient for such purposes.

8. Restrictions on Transfer.

The shares of Common Stock acquired upon the exercise of the
Option shall not be sold, pledged, hypothecated or otherwise transferred unless
such shares are exempt from registration under the Act and any applicable state
securities laws.

9. Notices. All notices, requests, demands and other
communications hereunder shall be in writing and shall be deemed to have been
given if delivered or mailed, first class, with postage prepaid, to:

If to the Company, addressed to:

UTI Energy Corp.
485 Devon Park Drive, Suite 112
Wayne, Pennsylvania 19087
Attention: President

If to the Optionee, addressed to:

Remy Investors and Consultants Incorporated
1801 Century Park East, Suite 111
Los Angeles, California 90067
Attention: Mark S. Siegel

Delivery shall be made to such other address for notice as either
party shall hereafter notify the other party in writing, from time to time.

10. Governing Law. This Agreement shall be governed by and
construed in accordance with the laws of the State of Texas without giving any
effect to conflicts of law provisions.

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<PAGE> 7
11. Entire Agreement. This Agreement contains the entire
understanding between the parties hereto concerning the subject matter
contained herein. There are no representations, agreements, arrangements, or
understandings, oral or written, between or among the parties hereto, relating
to the subject matter of this Agreement, which are not fully expressed herein.

12. Counterparts. This Agreement may be executed in any number of
counterparts, each of which shall be deemed an original, but all of which shall
be deemed to be one and the same instrument, regardless of whether one or more
parties sign the same counterpart.

IN WITNESS WHEREO, the parties hereto have executed this Agreement to
be effective the date first set forth above.

UTI ENERGY CORP.

By: /s/ Vaughn E. Drum
------------------
Name: Vaughn E. Drum
Title: President and Chief Executive Officer

REMY INVESTORS AND
CONSULTANTS INCORPORATED

By: /s/ Mark S. Siegel
------------------
Name: Mark S. Siegel
Title: President

-7-

<PAGE> 1
EXHIBIT 10.10

NOTE

Philadelphia, Pennsylvania

Dated: January 23, 1997
$4,000,000.00

FOR VALUE RECEIVED AND INTENDING TO BE LEGALLY BOUND, the undersigned
(collectively, the "BORROWERS") hereby promise to pay to the order of MELLON
BANK, N.A. ("BANK"), the principal sum of Four Million Dollars
($4,000,000.00), together with interest thereon upon the following terms:

1. TERM NOTE. This Note is the "NOTE" as defined in that
certain Loan and Security Agreement of even date herewith between Borrowers and
Bank (such Loan and Security Agreement, as the same may be amended,
supplemented or restated from time to time, being the "LOAN AGREEMENT") and, as
such, shall be construed in accordance with all terms and conditions thereof.
Capitalized terms not defined herein shall have such meaning as provided in the
Loan Agreement. This Note is entitled to all the rights and remedies provided
in the Loan Agreement and the Loan Documents and is secured by all Collateral
as described therein.

2. INTEREST RATE. Interest on the unpaid principal balance
hereof will accrue from the date of advance until final payment thereof at the
rate per annum which is equal to the Prime Rate of Bank in effect from time to
time (such interest rate to change immediately upon any change in the Prime
Rate).

3. DEFAULT INTEREST. Interest will accrue on the outstanding
principal amount hereof following the occurrence of an Event of Default or the
final maturity date hereof, until paid at a rate per annum which is four
percent (4%) in excess of the non-default rate otherwise payable under
PARAGRAPH 2 above (the "DEFAULT RATE").

4. POST JUDGMENT INTEREST. Any judgment obtained for sums due
hereunder or under the Loan Documents will accrue interest at the Default Rate
until paid.

5. COMPUTATION. Interest will be computed on the basis of a
year 365/366 days and paid for the actual number of days elapsed.

6. PRINCIPAL AND INTEREST PAYMENTS.

(a) INTEREST PAYMENTS. Borrowers will pay
interest on the outstanding principal balance hereof monthly, on the first day
of each calendar month commencing on the first day of the first calendar month
following the date hereof.
<PAGE> 2
(b) PRINCIPAL PAYMENTS. Borrowers will pay
the outstanding principal balance hereof in seven (7) equal and consecutive
quarterly installments of Five Hundred Thousand Dollars ($500,000.00) each, on
January 23, April 23, July 23 and October 23 of each calendar year commencing
on April 23, 1997, and in one final payment of the remaining principal balance
hereof plus all accrued and unpaid interest thereon on January 23, 1999.

7. PLACE OF PAYMENT. Principal and interest hereunder shall be
payable as provided in the Loan Agreement, or at such other place as Bank, from
time to time, may designate in writing.

8. DEFAULT: REMEDIES. Upon the occurrence of an Event of
Default, Bank, at its option and without notice to Borrowers, may declare
immediately due and payable the entire unpaid balance of principal and all
other sums due by Borrowers hereunder and under the other Loan Documents,
together with interest accrued thereon at the applicable rate specified above
to the date of the Event of Default and thereafter at the Default Rate.
Payment thereof may be enforced and recovered in whole or in part at any time
and from time to time by one or more of the remedies provided to Bank in this
Note or in the Loan Documents or as otherwise provided at law or in equity, all
of which remedies are cumulative and concurrent.

9. WAIVERS. BORROWERS AND ALL ENDORSERS HEREBY, JOINTLY AND
SEVERALLY, WAIVE PRESENTMENT FOR PAYMENT, DEMAND, NOTICE OF DEMAND, NOTICE OF
NONPAYMENT OR DISHONOR, PROTEST AND NOTICE OF PROTEST OF THIS NOTE, AND ALL
OTHER NOTICES IN CONNECTION WITH THE DELIVERY, ACCEPTANCE, PERFORMANCE, DEFAULT
OR ENFORCEMENT OF THE PAYMENT OF THIS NOTE.

10. MISCELLANEOUS. If any provisions of this Note shall be held
invalid or unenforceable, such invalidity or unenforceability shall not affect
any other provision hereof. This Note has been delivered in and shall be
governed by and construed in accordance with the laws of the Commonwealth of
Pennsylvania without regard to the law of conflicts. This Note shall be
binding upon Borrowers and upon Borrowers' successors and assigns and shall
benefit Bank and its successors and assigns. The prompt and faithful
performance of all of Borrowers' obligations hereunder, including without
limitation, time of payment, is of the essence of this Note.

11. JOINT AND SEVERAL LIABILITY. If there is more than one
Borrower executing this Note, all agreements, conditions, covenants and
provisions of this Note shall be the joint and several obligation of each
Borrower.

12. CONFESSION OF JUDGMENT. BORROWERS HEREBY AUTHORIZE AND
EMPOWER ANY ATTORNEY OR THE PROTHONOTARY OR CLERK OF ANY COURT IN THE
COMMONWEALTH OF PENNSYLVANIA, OR IN ANY OTHER JURISDICTION WHICH PERMITS THE
ENTRY OF JUDGEMENT BY CONFESSION, TO APPEAR FOR ANY BORROWER AT ANY TIME AFTER
THE OCCURRENCE OF AN EVENT OF DEFAULT UNDER THE LOAN AGREEMENT IN ANY ACTION
BROUGHT AGAINST SUCH BORROWER ON THIS NOTE OR THE LOAN DOCUMENTS AT THE SUIT OF
BANK, WITH OR WITHOUT COMPLAINT OR DECLARATION FILED, WITHOUT STAY OF
EXECUTION, AS OF ANY TERM OR TIME, AND THEREIN TO CONFESS OR ENTER JUDGMENT
AGAINST SUCH BORROWER FOR THE ENTIRE UNPAID OUTSTANDING

2
<PAGE> 3
PRINCIPAL AMOUNT OF THIS NOTE AND ALL OTHER SUMS TO BE PAID BY SUCH BORROWER TO
OR ON BEHALF OF BANK PURSUANT TO THE TERMS HEREOF OR OF THE LOAN DOCUMENTS AND
ALL ARREARAGES OF INTEREST THEREON, TOGETHER WITH ALL COSTS AND OTHER EXPENSES
AND AN ATTORNEY'S COLLECTION COMMISSION OF FIFTEEN PERCENT (15%) OF THE
AGGREGATE AMOUNT OF THE FOREGOING SUMS, BUT IN NO EVENT LESS THAN $5,000.00;
AND FOR SO DOING THIS NOTE OR A COPY HEREOF VERIFIED BY AFFIDAVIT SHALL BE A
SUFFICIENT WARRANT. THE AUTHORITY GRANTED HEREIN TO CONFESS JUDGMENT SHALL NOT
BE EXHAUSTED BY ANY EXERCISE THEREOF BUT SHALL CONTINUE FROM TIME TO TIME AND
AT ALL TIMES UNTIL PAYMENT IN FULL OF ALL THE AMOUNTS DUE HEREUNDER. BORROWERS
ACKNOWLEDGE THAT THEY HAVE BEEN REPRESENTED BY COUNSEL IN CONNECTION WITH THE
EXECUTION AND DELIVERY OF THIS NOTE AND THAT THEY KNOWINGLY WAIVE THEIR RIGHT
TO BE HEARD PRIOR TO THE ENTRY OF SUCH JUDGMENT AND UNDERSTAND THAT, UPON SUCH
ENTRY, SUCH JUDGMENT SHALL BECOME A LIEN ON ALL REAL PROPERTY OF BORROWERS IN
THE COUNTY WHERE SUCH JUDGMENT IS ENTERED.

IN WITNESS WHEREOF, Borrowers, intending to be legally bound hereby,
have caused this Note to be duly executed the day and year first above written.

FWA DRILLING COMPANY, INC.