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Exhibit 10.18

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AGREEMENT FOR SUPPLY AND OPERATION OF WORKOVER RIGS,

PULLING UNITS, VEHICLES, OTHER EQUIPMENT AND RELATED

SERVICES

by and between

APACHE CORPORATION

and

KEY ENERGY SERVICES, INC.

Dated as of March 28, 2002

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TABLE OF CONTENTS

ARTICLE 1—INTERPRETATION   1   Section 1.1   Definitions   1   Section 1.2  
Currency   1   Section 1.3   Conflicts   1   Section 1.4   Headings   1  
Section 1.5   Further Assurances   1   Section 1.6   Contractor's Status   1  
Section 1.7   Governing Law   2   Section 1.8   Affiliates   2 ARTICLE II—TERM  
2   Section 2.1   Term   2   Section 2.2   Option to Extend   2 ARTICLE
III—CONTRACTOR'S PERSONNEL   2   Section 3.1   Number, Selection, Hours of Labor
and Remuneration   2   Section 3.2   Provision of Contractor's Personnel   2  
Section 3.3   Contractor's Representative   2   Section 3.4   Increase/Decrease
in Contractor's Personnel   2   Section 3.5   Replacement of Contractor's
Personnel   2   Section 3.6   Personnel Shortages   3   Section 3.7   Health,
Safety and Environmental Measures   3 ARTICLE IV—WORKOVER EQUIPMENT   3  
Section 4.1   Obligation to Supply   3   Section 4.2   Maintain Stocks   3  
Section 4.3   Maintain and Repair Equipment   3   Section 4.4   Additional Items
  3 ARTICLE V—CONTRACTOR'S GENERAL OBLIGATIONS   4   Section 5.1   Contractor's
Standard of Performance   4   Section 5.2   Operation of Units   4   Section 5.3
  Compliance with Company's Instructions   4   Section 5.4   Adverse Weather   4
  Section 5.5   Drilling Fluids and Casing Program   4   Section 5.6  
Difficulties during Workovers   4   Section 5.7   Well Control Equipment   4  
Section 5.8   Cutting/Coring Program   5   Section 5.9   Records to be Kept by
Contractor   5   Section 5.10   Visas   5   Section 5.11   No Liens   5  
Section 5.12   Waste Disposal and Environmental Safeguards   5   Section 5.13  
Contractor Assistance to Company   5   Section 5.14   Warranties Disclaimed   6
ARTICLE VI—COMPANY'S RIGHTS AND OBLIGATIONS   6   Section 6.1   Company's
Employees   6   Section 6.2   Workover Programs Sites and Access   6  
Section 6.3   Mobilization and Demobilization of Workover Equipment, Custom or
Excise Duties and Fees   6   Section 6.4   Take Over of Work   7   Section 6.5  
Storage   7   Section 6.6   First Aid   7          

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  Section 6.7   Medivac   7   Section 6.8   Meals, Accommodations and Laundry  
8 ARTICLE VII—RATES OF PAYMENT   8   Section 7.1   Payment   8   Section 7.2  
Operating Rate   8   Section 7.3   Standby Rate With Crew   8   Section 7.4  
Equipment Breakdown Rates   8   Section 7.5   Force Majeure Rate   9  
Section 7.6   Moving Rates   9   Section 7.7   Standby Rate Without Crew   9  
Section 7.8   Overtime Rate   9   Section 7.9   Consumables   9   Section 7.10  
Variation of Rates   9 ARTICLE VIII—PAYMENTS   10   Section 8.1   Monthly
Invoices   10   Section 8.2   Payment   10   Section 8.3   Manner of Payment  
10   Section 8.4   Currency   10   Section 8.5   Taxes   10   Section 8.6  
Customs Duties, Other Taxes   10 ARTICLE IX—LIABILITY   11   Section 9.1  
Equipment or Property   11   Section 9.2   The Hole   11   Section 9.3  
Contractor's Personnel   12   Section 9.4   Company's Personnel   12  
Section 9.5   Pollution and Contamination   12   Section 9.6   Cost of Control  
12   Section 9.7   Underground Damage   12   Section 9.8   Consequential Damages
  12   Section 9.9   Third Parties   13   Section 9.10   Indemnity Obligation  
13   Section 9.11   Indemnity Procedures   13 ARTICLE X—INSURANCE   13  
Section 10.1   Insurance   13   Section 10.2   Certificates   14   Section 10.3
  Subrogation   14   Section 10.4   Additional Insured   14 ARTICLE
XI—SUBLETTING AND ASSIGNMENT   14   Section 11.1   Subcontracts   14  
Section 11.2   Assignment   14 ARTICLE XII—ARBITRATION   14   Section 12.1  
Agreement to Arbitrate   14   Section 12.2   Conduct, Authority, and Choice of
Law   14   Section 12.3   Forum for the Arbitration and Selection of Arbitrators
  15   Section 12.4   Decision of the Arbitrators   15   Section 12.5  
Confidentiality   15 ARTICLE XIII—DEFAULT AND TERMINATION   15   Section 13.1  
Termination by Company   15   Section 13.2   Termination by Contractor   16  
Section 13.3   Effect of Termination   17 ARTICLE XIV—REPRESENTATIONS AND
WARRANTIES   17          

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  Section 14.1   Representations by Contractor   17   Section 14.2  
Representations by Company   17   Section 14.3   Survival   18 ARTICLE
XV—GENERAL   18   Section 15.1   Confidential Information   18   Section 15.2  
Attorney's Fees   18   Section 15.3   Force Majeure   18   Section 15.4   Right
to Audit   18   Section 15.5   Compliance with Laws   18   Section 15.6  
Waivers   19   Section 15.7   Inurement   19   Section 15.8   Notices   19  
Section 15.9   Additional Documents and Actions   20   Section 15.10  
Expropriation, Confiscation, Nationalization and War Risks   20   Section 15.11
  Foreign Corrupt Practices Act   20   Section 15.12   Entire Agreement   20

List of Attachments/Appendices

Attachment 1   Definitions
Appendix A
 
Description of Equipment Appendix B   Contractor's Personnel Appendix C   Rates
Appendix D   Insurance Appendix E   Equipment Performance

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AGREEMENT FOR SUPPLY AND OPERATION OF WORKOVER RIGS, PULLING
UNITS, VEHICLES, OTHER EQUIPMENT AND RELATED SERVICES

        This AGREEMENT dated as of March 28, 2002, is by and between APACHE
CORPORATION ("Company"), and KEY ENERGY SERVICES, INC. ("Contractor"). Company
and Contractor are sometimes referred to herein individually as "Party" and
collectively as "Parties".

BACKGROUND

        Company desires to have onshore wells worked over in the Western Desert
of the Arab Republic of Egypt ("Egypt"), as specified by Company, and to have
performed or carried out all auxiliary operations and services as detailed in
the Appendices hereto or as Company may require in accordance with this
Agreement (hereinafter referred to as "Workover Services"); and

        Contractor is willing to provide or cause to be provided the workover
rigs, pulling units, and vehicles, together with other equipment listed in
Appendix A and such other equipment as Company may reasonably require pursuant
to Section 4.4 (hereinafter called the "Workover Equipment"), insurance and
personnel, all as detailed in the Appendices hereto for the purpose of
performing the Workover Services for Company.

AGREEMENT

        NOW THEREFORE, in consideration of the premises and the covenants and
agreements herein, the Parties agree as follows:

ARTICLE 1
INTERPRETATION

        Section 1.1 Definitions. Each capitalized term used herein shall have
the meaning given such term in Attachment 1.

        Section 1.2 Currency. In this Agreement, all amounts expressed in
dollars are United States dollar amounts.

        Section 1.3 Conflicts. Appendices A, B, C, D, and E attached hereto are
incorporated herein by this reference. If any provision of the Appendices
conflicts with a provision in the body of this Agreement, the applicable
provision of the body of this Agreement shall prevail.

        Section 1.4 Headings. The paragraph headings shall not be considered in
interpreting the text of this Agreement.

        Section 1.5 Further Assurances. Each Party shall perform the acts and
execute and deliver the documents and give the assurances necessary to give
effect to the provisions of this Agreement.

        Section 1.6 Contractor's Status. Contractor in performing its
obligations hereunder shall be an independent contractor. Company may instruct
and direct Contractor as to the results to be obtained from Contractor's
employees. None of Contractor's employees are, nor shall be deemed to be,
employees or agents of Company. Contractor is not authorized to, and shall not,
create any lien or encumbrance on any well where the Workover Services are
performed.

        Section 1.7 Governing Law. This Agreement shall be construed and
relations between the Parties determined in accordance with the laws of the
State of Texas, United States of America, not including, however, any of its
conflicts of law rules, which would direct or refer to the laws of another
jurisdiction. In the event any provision of this Agreement is inconsistent with
or contrary to any applicable law, rule or regulation, the provision shall be
deemed to be modified to the extent required to comply with the law, rule or
regulation, and as so modified the provision and this Agreement shall continue
in full force

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and effect. If this Agreement is translated into another language, the English
version of this Agreement shall be controlling for all purposes.

        Section 1.8 Affiliates. Either Party may fulfill its obligations under
this Agreement through one or more of its Affiliates; provided that each Party
shall remain responsible for the performance of its obligations hereunder.

ARTICLE II
TERM

        Section 2.1 Term. This Agreement will be effective upon execution by
both Company and Contractor and, unless earlier terminated in accordance with
this Agreement shall remain in effect until the second anniversary of the last
Commencement Date occurring hereunder (the "Initial Term").

        Section 2.2 Option to Extend. This Agreement may be renewed by Company
beyond the Initial Term for two additional one-year terms by delivery of written
notice on or before the 120thday prior to the end of the relevant term, provided
that Company and Contractor shall mutually agree on or before the 60thday prior
to the end of the relevant term upon the appropriate rates, terms and conditions
for each extension period.

ARTICLE III
CONTRACTOR'S PERSONNEL

        Section 3.1 Number, Selection, Hours of Labor and Remuneration. Except
where herein otherwise provided, the number, selection, replacement, hours of
labor and remuneration of Contractor's Personnel shall be determined solely by
Contractor. Such employees or subcontractors shall be the employees or
subcontractors solely of Contractor. Notwithstanding the foregoing, minimum
manning shall be as specified in Appendix B, and Contractor undertakes to
provide qualified personnel with the technical background and experience
Contractor deems are required to perform the Workover Services.

        Section 3.2 Provision of Contractor's Personnel. Contractor shall
provide Contractor's Personnel at a mutually agreed place ready to conduct
Workover Services.

        Section 3.3 Contractor's Representative. Contractor shall designate in
writing to Company one of Contractor's Personnel as Contractor's representative
who shall be in charge of the remainder of Contractor's Personnel and who shall
have full authority to resolve all day-to-day matters which arise between
Company and Contractor in the ordinary course of business. Contractor shall
inform Company in a written form if such representative is replaced.

        Section 3.4 Increase/Decrease in Contractor's Personnel. Company may,
subject to mutual agreement of the Parties, require Contractor to increase the
number of Contractor's Personnel, subject to additional payment by Company as
mutually agreed between the Parties. Company also may require Contractor to
decrease the number of Contractor's Personnel, provided that Contractor shall
not be required to reduce such number below the minimum manning specified in
Appendix B. Such reduction in the number of Contractor's Personnel shall not
result, however, in any decrease in the applicable rates of payment set forth in
Article VII.

        Section 3.5 Replacement of Contractor's Personnel. Contractor will
remove and replace at any time any of Contractor's Personnel if Company so
reasonably requests in writing. Company shall give to Contractor the reasons for
any such request. So as not to interfere with Contractor's ability to provide
Workover Services, Contractor shall have a reasonable period of time within
which to effect such removal and replacement of personnel.

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        Section 3.6 Personnel Shortages.

        (a)   If at any time during the term of this Agreement less than a full
crew of expatriate personnel as listed in Appendix B is utilized for any reason
that is beyond Contractor's reasonable control, Company shall nevertheless pay
Contractor for such missing personnel, but the applicable day rate payable to
Contractor hereunder shall be reduced by an amount equal to one-half of the day
rate for the missing expatriate personnel. For example, if a drilling unit
toolpusher is absent, then the rate payable by Company shall be $425.00 rather
than $850.00. There will be no reduction for missing Egyptian personnel.

        (b)   If at any time, in Company's opinion, Contractor's failure to
provide a full crew of personnel at the minimum manning levels established in
this Agreement is materially interfering with or delaying the conduct of
Contractor's operations, and such material interference or delay continues for a
period of thirty (30) days after written notice from Company to Contractor, then
in addition to (i) a reduction in the applicable day rate as provided herein and
(ii) any other remedies Company may have under this Agreement, Company may,
subject to Section 13.3, terminate this Agreement.

        Section 3.7 Health, Safety and Environmental Measures. Contractor shall,
at its sole expense, take all measures necessary or proper to provide safe
working conditions, proper safety clothing and supplies to its personnel in
accordance with international health, safety and environmental practices and
standards and with all health, safety and environmental requirements of Egypt
and general health, safety and environmental measures applied by Contractor in
its other similar businesses. Contractor shall give notice to all of its
personnel at each workover site of all health, safety and environmental
regulations that apply to such personnel and shall take reasonable actions to
ensure that such personnel comply with such regulations.

ARTICLE IV
WORKOVER EQUIPMENT

        Section 4.1 Obligation to Supply.

        (a)   Contractor shall provide the Workover Equipment in accordance with
Appendix A. Each of the items comprising the Workover Equipment shall be subject
to inspection and approval of Company for its account prior to such items being
placed into service.

        (b)   No inspection by Company or its representatives shall constitute
an approval, endorsement or confirmation of any Workover Equipment or an
acknowledgment by Company or such other person that any Workover Equipment
satisfies the requirements of this Agreement; nor shall any such inspection
relieve Contractor of any of its obligations to furnish the Workover Equipment.

        Section 4.2 Maintain Stocks. Contractor shall be responsible, at
Company's expense, for maintaining reasonably adequate stock levels of
consumable goods for pumps, choke manifolds, BOP equipment, stripper rubbers,
swab cups, adapter spools, and related items including, without limitation, rig
and equipment fuel (collectively, "Consumables") necessary to perform and carry
out the Workover Services and replenishing them as necessary.

        Section 4.3 Maintain and Repair Equipment. Contractor shall, subject to
Section 4.2 and Section 9.1, be responsible for the maintenance and repair of
the Workover Equipment and shall provide all spare parts and materials required
therefor.

        Section 4.4 Additional Items. Contractor agrees and undertakes to
provide additional equipment upon the requirement of Company. Such additional
equipment shall be provided by Contractor at a cost to Company to be mutually
agreed upon.

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ARTICLE V
CONTRACTOR'S GENERAL OBLIGATIONS

        Section 5.1 Contractor's Standard of Performance. Except as provided in
Appendix C, Contractor shall provide Workover Services on a daywork basis. For
purposes hereof, the term "daywork basis" means Contractor shall furnish
Workover Equipment, Contractor's Personnel and perform Workover Services as
herein provided, for a specified sum per day under the general direction and
supervision of Company.

        Section 5.2 Operation of Units. Contractor shall be responsible for the
operation of the Workover Equipment, including supervising moving operations and
positioning on workover locations as required by Company. Operations under this
Agreement performed with Workover Rigs (including moving operations) will be
performed on a twenty-four (24) hour per day, seven (7) days a week basis.
Operations under this Agreement performed with Pulling Units, Hot Oiler Trucks,
Vacuum Trucks, Pump Trucks, Auger/Anchor Trucks, and Fork Lifts will be
performed on a twelve (12) hour per day, seven (7) days a week basis; provided,
however, Company may request that Contractor operate Pulling Units, Hot Oiler
Trucks, Vacuum Trucks, Anchor/Auger Trucks and Fork Lifts more than twelve
(12) hours per day in which case Company shall make payment to Contractor for
such work made on an overtime basis in accordance with Section 7.8. Operations
under this Agreement performed with Winch Trucks and Low-Boy Trailers will be
performed on an hourly basis at the rates specified in Appendix C. Contractor
represents that the Workover Rigs and Pulling Units (without modification,
upgrade or enhancement) will be capable of performing as described in Appendix E
under normal operating conditions.

        Section 5.3 Compliance with Company's Instructions. Company shall
provide Contractor with a written work plan for each job to be performed by
Contractor hereunder. Contractor shall comply with such work plans and all other
instructions of Company consistent with the provisions of this Agreement,
including, without limitation, drilling, well control and safety instructions.
Such other instructions shall, if time permits, be confirmed in writing by the
authorized representative of Company. However, Company shall not issue (and
Contractor shall not be required to comply with) any work plans or other
instructions which would be inconsistent with Contractor's rules, policies or
procedures pertaining to the safety of Contractor's Personnel or the safe
operation of the Workover Equipment.

        Section 5.4 Adverse Weather. Contractor, in consultation with Company,
shall decide when, in the face of impending adverse weather conditions, to
institute precautionary measures in order to safeguard Contractor's Personnel,
the well, and the Workover Equipment to the fullest possible extent. Contractor
and Company shall each ensure that each respective senior representative will
not act unreasonably in the exercise of their discretion under this Section 5.4
but in the event Contractor's and Company's representatives cannot agree upon
the steps to be taken, the Parties agree that the decision of Contractor's
representative shall be controlling.

        Section 5.5 Drilling Fluids and Casing Program. Contractor shall follow
any of Company's instructions with respect to the drilling fluid and tubular
program as may be specified by Company. Company shall provide Contractor written
drilling fluid and tubular programs reasonably in advance of the start date of
each well to be worked over under this Agreement.

        Section 5.6 Difficulties during Workovers. In the event of any
difficulty arising which precludes providing Workover Services under reasonably
normal procedures, Contractor may suspend the work in progress and as soon as
practicable shall notify the representative of Company of the difficulty, and
during such period of suspension exert its commercially reasonable efforts to
overcome the difficulty.

        Section 5.7 Well Control Equipment. Subject to Article IX, Contractor
shall maintain its well control equipment in good condition, ordinary wear and
tear excepted, at all times and shall use commercially reasonable efforts to
prevent and control fires and blowouts and to protect the hole.

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        Section 5.8 Cutting/Coring Program. Contractor shall save and identify
cuttings and cores according to Company's written instructions and place them in
containers furnished by Company.

        Section 5.9 Records to be Kept by Contractor. Contractor shall keep and
furnish to Company an accurate record of the work performed in a form to be
agreed prior to the first Commencement Date. Contractor shall furnish to Company
a legible copy of the form signed by Contractor's representative. Contractor
shall also keep and furnish to Company a report of operations for each month
containing details of (i) spare parts consumption, (ii) fuel usage, (iii) safety
and accident data for the Workover Equipment and Contractor's Personnel, and
(iv) such other information as Company shall have reasonably requested
Contractor to provide. All such records and reports shall be in the English
language.

        Section 5.10 Visas, etc. Contractor shall be responsible for obtaining
visas, work permits, residence permits and certifications required for
Contractor's Personnel; provided, however, that Company shall provide all
reasonable assistance and cooperation requested by Contractor, and reimburse
Contractor for all reasonable fees and expenses incurred, in connection
therewith, it being understood that in obtaining such visas, work permits,
residence permits and certifications, Contractor will be relying on Company's
experience in conducting business in Egypt and in dealing with the relevant
Egyptian authorities.

        Section 5.11 No Liens.

        (a)   Contractor shall not directly or indirectly create, incur, assume
or suffer to be created by it or any subcontractor, employee, laborer,
materialman or other supplier of goods or services any right of retention,
claim, lien, charge or encumbrance on any material portion of Company's
equipment, wells, or any part thereof (each a "Contractor Lien"), and Contractor
shall promptly pay or discharge, and discharge of record, any such Contractor
Lien or other charges which, if unpaid, might be or become a Contractor Lien,
other than any such Contractor Liens or other charges that Contractor is
contesting in good faith. Contractor as soon as practicable after becoming aware
of the assertion of a Contractor Lien shall notify Company. Contractor shall be
responsible for and hold harmless, defend and indemnify Company from and against
Contractor Liens.

        (b)   Upon the failure of Contractor to promptly pay, contest, discharge
or provide security acceptable to Company for any Contractor Lien within thirty
(30) days of notice of the existence thereof from any source (other than any
such Contractor's Lien that Contractor is contesting in good faith), Company
may, but shall not be obligated to, pay or discharge such Contractor Lien and,
upon the payment or discharge thereof, shall be entitled to recover from
Contractor the amount thereof together with expenses incurred by it in
connection with such payment or discharge or to set off equal to the product of
a fraction the numerator of which is 1 and the denominator of which is the total
number of months remaining in the then effective term of this Agreement and all
such amounts against the amount of the monthly invoice for the month that
corresponds to the month in which Company seeks to recover or set off against
Contractor.

        Section 5.12 Waste Disposal and Environmental Safeguards. In the
performance of the Workover Services, Contractor shall at all times (i) observe
and comply, in all material respects, with all Egyptian laws and regulations
concerning the production, carrying, keeping, treating and/or disposal of waste;
and (ii) act to minimize the quantity of wastes; provided, however, that Company
shall accept delivery and dispose of all of Contractor's refuse including, but
not limited to, refuse Contractor collects in cleaning up surface pollution for
which it has responsibility pursuant to Section 9.5(a).

        Section 5.13 Contractor Assistance to Company. Contractor shall deliver
the Workover Equipment to Company's custody in Houston, Texas, and/or a port in
the Republic of Argentina chosen by Contractor, and shall cooperate with and
assist Company in connection with Company's complying with

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the obligations imposed pursuant to Section 6.3(a). Contractor shall prepare and
execute any papers that cannot be prepared or executed by Company and are
necessary to import any Workover Equipment into Egypt. Company shall reimburse
Contractor for the costs and expenses it reasonably incurs complying with the
obligations contained in this Section 5.13.

        Section 5.14 Warranties Disclaimed. EXCEPT AS EXPRESSLY SET FORTH IN
THIS AGREEMENT, CONTRACTOR NEGATES AND DISCLAIMS ALL REPRESENTATIONS OR
WARRANTIES, WRITTEN OR ORAL, EXPRESS OR IMPLIED, INCLUDING ANY REPRESENTATION OR
WARRANTY WITH RESPECT TO MERCHANTIBILITY, FITNESS FOR ANY PARTICULAR PURPOSE, OR
CONFORMITY TO MODELS OR SAMPLES.

ARTICLE VI
COMPANY'S RIGHTS AND OBLIGATIONS

        Section 6.1 Company's Employees. Company shall designate in writing to
Contractor a senior representative to resolve day-to-day matters requiring
decision by Company and Company's representative shall communicate such
decisions to Contractor. Company shall inform Contractor in writing in case such
representative is replaced. Company's representative shall at all times have
access to each Workover Rig and Pulling Unit and may, among other things,
observe tests, check and give instructions it deems necessary or advisable to
control the implementation of the mud program, examine cuttings and cores,
inspect the Workover Equipment or examine the records kept on the applicable
Workover Rig or Pulling Unit by Contractor.

        Section 6.2 Workover Programs, Sites and Access. Company shall be
responsible for providing: (i) within a reasonable time prior to the
commencement of specific Workover Services a written workover program for each
well it requires to be worked over together with a written program for any other
specific Workover Services it may require; and (ii) access to the workover
locations, as well as selecting, surveying, marking and clearing the workover
locations as may be reasonably required by Contractor for location approval.
Company shall notify Contractor in writing of any impediments or hazards to
operations at each workover location or at any access routes to the workover
locations of which it has actual knowledge. Notwithstanding any other provision
of this Agreement, should there be obstructions at or within the area of the
workover site (or any access route to any workover site) and these obstructions
result in damage to the Workover Rig or Pulling Unit, Company shall be
responsible for and hold harmless, defend and indemnify Contractor for all
resulting damage, including the payment of the applicable Standby Rate during
repairs, but Company shall receive credit for any physical damage insurance
proceeds actually received by Contractor with respect to such damage.

        Section 6.3 Mobilization and Demobilization of Workover Equipment,
Customs or Excise Duties and Fees.

        (a)   Company at its cost and expense shall cause the Workover Equipment
to be packed, expedited, loaded and shipped from the applicable Port of Origin
to the Port of Alexandria, Egypt, and from the Port of Alexandria to the
Operating Area where Company at its cost and expense shall cause the Workover
Equipment to be unloaded, unpacked and stored until ready for use by Contractor.
Company will be further responsible for importation of any subsequent items of
Workover Equipment into the Operating Area as required, including but not
limited to spare parts, consumables, additional equipment and chemicals as
needed for the operation of the Workover Rigs, Pulling Units and Vehicles. Upon
termination of this Agreement for any reason, Company at its cost and expense
shall cause the Workover Equipment to be packed, expedited, loaded and shipped
from the Operating Area to the Port of Houston, Texas, USA and/or such other
location as Contractor may designate in writing provided that any incremental
cost of shipping to such alternate location shall be borne by Contractor.
Company shall be responsible for and hold harmless, defend and indemnify
Contractor from and against any loss or damage to the

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Workover Equipment during the mobilization or demobilization thereof, which such
indemnity obligation shall apply (i) in the case of mobilization, from the time
packing of the Workover Equipment commences in preparation for shipment from the
Port of Origin until the time the Workover Equipment is unpacked and ready for
use at the Operating Area, and (ii) in the case of demobilization, from the time
the Workover Equipment is packed in preparation for the shipment from the
Operating Area until the Workover Equipment arrives at the Port of Houston,
Texas, USA and/or other location designated by Contractor pursuant to this
Section 6.3(a).

        (b)   Company shall perform all importation and customs clearance
activities for all Workover Equipment into Egypt, and pay the costs associated
with customs clearance activities.

        (c)   In the event the Workover Equipment is not allowed into Egypt
because of import or customs restrictions or for any other reason, the Parties
agree that (i) this Agreement will remain in effect for the full term hereof,
(ii) Contractor will upon notice from Company that such Workover Equipment will
not be allowed into Egypt cease any refurbishment thereof, (iii) if such
disallowed Workover Equipment is of a type that Company does not or cannot
utilize in its operations in the United States as then conducted or proposed to
be conducted, Company will purchase such equipment from Contractor on an "as is"
basis and for a price equal to its fair market value, and (iv) if such
disallowed Workover Equipment is of a type that Company does or can utilize in
its operations in the United States as then conducted or proposed to be
conducted, Contractor shall provide such disallowed Workover Equipment to
Company in the United States of America. In the circumstances described in
sub-clause (iv), Company and Contractor shall negotiate in good faith and in an
expeditious manner toward the execution of a mutually satisfactory amendment to
this Agreement covering operations in the United States of America under this
Agreement. In particular, the rates to be charged pursuant to Article VII, which
reflect rig rates for international operations, will be adjusted to a level
consistent with Contractor's regional pricing structure in place in the United
States of America for substantially similar equipment, services and categories
of personnel. In addition, Company agrees that the work performed for it by
Contractor in the United States of America under this Agreement shall be in
addition to (and not in replacement of) the work being performed for Company by
Contractor in the United States of America prior to the addition of the
disallowed Workover Equipment.

        Section 6.4 Take Over of Work. In the event any well worked over under
this Agreement should blow out, catch fire or in any manner get out of control,
Company may assume at its sole cost and expense complete control and supervision
of the Workover Equipment and take such actions as it deems necessary to bring
the well under control, extinguish the fire and take such other measures as
Company deems appropriate.

        Section 6.5 Storage. Company shall at its cost provide appropriate
storage, warehouse and yard facilities for the Workover Equipment (including
spare parts and special tools) at or in the vicinity of the Operating Area.
Workover Equipment that is stored shall be segregated from other goods, as
appropriate, clearly identified as the property of Contractor, its Affiliates,
Khalda Petroleum Company, or Qarun Petroleum Company, and Company shall be
responsible for the security and protection of the Workover Equipment while
stored or warehoused in Company facilities.

        Section 6.6 First Aid. Company, at Contractor's expense, shall provide
first aid medical care on location as may be required for Contractor's
Personnel. Such medical care is provided at the recipients' own risk, and
Company shall not be responsible for any medical care it may provide, or fail to
provide, to Contractor's Personnel hereunder.

        Section 6.7 Medivac. Company will arrange Medivac services for
Contractor's Personnel when required by Contractor according to the guidelines
of Company's insurance program applicable to Company's personnel. Contractor
will be responsible for any additional cost borne by Company as a result.
Contractor and Company shall consult together as and when necessary and to act
in concert in

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the event of a need to evacuate foreign personnel for non-medical reasons. To
comply with Company's medivac policy, Contractor shall provide Company with a
list of Contractor's Personnel and shall update such list from time to time to
reflect any changes in Contractor's Personnel.

        Section 6.8 Meals, Accommodations and Laundry. Company shall supply
reasonably satisfactory meals, potable water, and accommodations including
laundry services for Contractor's Personnel while they are performing Workover
Services. Although Contractor shall be responsible for arranging transportation
for Contractor's Personnel to and from Company's base and work locations in the
field, Company shall reimburse Contractor for its costs and expenses reasonably
incurred in connection therewith.

ARTICLE VII
RATES OF PAYMENT

        Section 7.1 Payment. Company shall pay to Contractor during the term of
this Agreement the amounts due on a monthly basis as calculated to the nearest
hour according to the rates of payment herein set forth in accordance with
Article VIII, and reimburse Contractor for any reimbursable costs or expenses
incurred by Contractor during such month.

        Section 7.2 Operating Rate. The Operating Rate specified for each item
of Workover Equipment in Appendix C will first become payable on the
Commencement Date. The Operating Rate shall continue to be payable during the
term of this Agreement, except when some other rate herein provided applies.
Company acknowledges that the performance of the Workover Services will require
the sharing of certain items of Workover Equipment between rigs and agrees that
the unavailability of any item of Workover Equipment for use at any rig that
results from its use at any other rig shall not negatively impact Contractor's
compensation hereunder.

        Section 7.3 Standby Rate With Crew. The Standby Rate With Crew specified
for each item of Workover Equipment in Appendix C will be payable as follows:

        (a)   during any period of delay when Contractor is unable to perform
its obligations under this Agreement solely because of adverse weather
conditions or as a result of an act, instructions or omission of Company
including, without limitation, the failure of Company to issue instructions;

        (b)   during any period when operations are being conducted hereunder to
redrill or repair any well worked over hereunder which is lost or damaged solely
as a result of Contractor's sole negligence;

        (c)   during any period when operations are suspended solely due to
difficulties encountered as provided for in Section 5.6 or while Contractor is
waiting for Company or third parties in order to initiate or continue
operations; and

        (d)   during any period when operations are suspended to allow Company
to conduct inspections.

        Section 7.4 Equipment Breakdown Rates. The Equipment Breakdown Rates
specified for each item of Workover Equipment in Appendix C will be payable
during (i) the first twelve (12) hours per calendar month during which
operations are suspended solely to permit necessary replacement, inspection,
repair or maintenance by Contractor of the Workover Equipment, and (ii) the
subsequent hours in excess of the first twelve (12) hours per calendar month
during which operations are suspended solely to permit necessary replacement,
inspection, repair or maintenance by Contractor of the Workover Equipment.
Routine maintenance, including without limitation, lubrication, packing of
swivels, changing of pump parts, slipping lines, drill string and certification
inspections, shall not be considered as maintenance for purposes of this
Section 7.4. Contractor will effect such repairs, replacements or maintenance in
a good and workmanlike manner and will use commercially reasonable efforts to
familiarize itself with the location of rentable replacements for the items
comprising the Workover Equipment.

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        Section 7.5 Force Majeure Rate. The Force Majeure Rate specified for
each item of Workover Equipment in Appendix C will be payable during any period
in which operations are not being carried on solely because of Force Majeure as
defined in Section 15.3, including periods required to repair damage caused by
an event of Force Majeure. In the event of Force Majeure lasting for a period of
greater than 90 days, Company shall have the option, at its sole expense, to
remove any affected Workover Equipment from Egypt to the United States of
America for use in its operations there. In such event, Company and Contractor
shall negotiate in good faith and in an expeditious manner toward the execution
of a mutually satisfactory amendment to this Agreement covering operations in
the United States of America under this Agreement. In particular, the rates to
be charged pursuant to this Article VII, which reflect rig rates for
international operations, will be adjusted to a level consistent with
Contractor's regional pricing structure in place in the United States of America
for substantially similar equipment, services and categories of personnel. In
addition, Company agrees that the work performed for it by Contractor in the
United States of America under this Agreement shall be in addition to (and not
in replacement of) the work being performed for Company by Contractor in the
United States of America prior to the addition of the disallowed Workover
Equipment.

        Section 7.6 Moving Rates. The Rig Move Rates specified for each item of
Workover Equipment in Appendix C will be payable for each move of the Workover
Rigs and Pulling Units from one well to another, provided that the well site is
prepared and ready.

        Section 7.7 Standby Rate Without Crew. The Standby Rate Without Crew
specified for each item of Workover Equipment in Appendix C will be payable
during any period when:

        (a)   operations are suspended solely to repair the appropriate item of
Workover Equipment due to blow out, fire, cratering, shifting or punch through
at a workover location, obstacles or obstructions or the consequences thereof,
but only from the date the crew has been demobilized;

        (b)   during any period after the Commencement Date that the item of
Workover Equipment is undergoing periodic inspections required for the
maintenance of any certification or classification certificates, but only from
the date the crew has been demobilized; and

        (c)   for any period during which Company orders suspension of
operations, but only from the date the crew has been demobilized.

        Section 7.8 Overtime Rate. The Overtime Rate shall be the rate for work
conducted outside of the fixed schedule described in Appendix C when requested
by Company.

        Section 7.9 Consumables. Contractor undertakes to use commercially
reasonable efforts to obtain the best price possible for all materials and
equipment supplied, including Consumables.

        Section 7.10 Variation of Rates. The rates set forth herein shall be
increased (but not decreased) by the actual amount of any documented change in
Contractor's costs resulting from (a) any change in laws, rules, regulations, or
legislation, including the enforcement or interpretation thereof, or (b) any
increase in Contractor's costs for Egyptian personnel (but not expatriate
personnel), spares, materials, or services that is beyond Contractor's
reasonable control. The following limitations shall apply to Contractor's
ability to increase its rates pursuant to this Section 7.10: (i) Contractor
shall not be entitled to increase its rates more than once per calendar quarter,
and (ii) Contractor shall not be entitled to increase its rates unless its costs
have increased by 1% or more since the later of the date of this Agreement or
the date of the last rate increase pursuant to this Section 7.10. For the
avoidance of doubt, once Contractor's costs have increased by 1% or more,
Contractor shall be entitled to a rate increase for the entire amount of its
increased costs.

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ARTICLE VIII
PAYMENTS

        Section 8.1 Monthly Invoices. Contractor shall bill Company at the end
of each month, for all daily charges and other charges earned by Contractor
during such month, and for the costs of Consumables purchased during such month.
Billings for daily charges will reflect details of the time spent (calculated to
the nearest hour) and the rate charged for that time. Billings for Consumables
and other charges will be accompanied by invoices and other documentation
supporting costs incurred for Company or other substantiation as reasonably
required by Company.

        Section 8.2 Payment. Company shall pay all invoices within thirty
(30) days after the receipt thereof; provided that if Company, in good faith,
disputes an item invoiced then Company shall, within twenty (20) days after
receipt of the invoice notify Contractor in writing of the amount disputed,
specifying the reason therefor, and payment of the disputed amount may be
withheld until settlement of the dispute. Any sums (including amounts ultimately
paid with respect to a disputed invoice) shall bear interest from the due date
until paid at a rate equal to the lesser of (a) a varying rate per annum equal
to the sum of (i) the 12-month London Interbank Offered Rate (LIBOR) as
published in The Wall Street Journal, plus (ii) 2% per annum, and (b) the
maximum rate permitted by law.

        Section 8.3 Manner of Payment. All payments due by Company to Contractor
hereunder shall be made by wire transfer or as otherwise agreed to one or more
of Contractor's bank accounts which shall be specified in writing.
Notwithstanding anything to the contrary in this Agreement, including this
Section 8.3, Contractor may by written instruction direct payments to be made by
Company pursuant to this Agreement to third parties, including, without
limitation, Contractor's subcontractors.

        Section 8.4 Currency. All payments related to daily charges and other
similar personnel charges will be made as follows, unless otherwise directed or
requested by Governmental Authority or mutually agreed by the Parties: 85% in
United States Dollars, and 15% in L.E. Egyptian Pounds. The L.E. Egyptian Pound
percentage will be calculated at the most favorable rate of exchange to
Contractor quoted by the Central Bank of Egypt on the date of Contractor's
invoice or the date of Company's payment. All payments required to be made by
Company under this Agreement for Consumables shall be paid in United States
Dollars or the currency in which payment for such Consumable was incurred by
Contractor.

        Section 8.5 Taxes. Company shall be responsible for and hold harmless,
defend and indemnify Contractor from and against all taxes, levies, duties, and
assessments imposed on Contractor, the Workover Equipment, or Contractor's
Personnel arising out of or in connection with Contractor's performance
hereunder (including sales taxes, value-added taxes, ad valorem and any other
taxes imposed by any Governmental Authority, but excluding (a) any such taxes,
levies, duties and assessments that are imposed by any U.S. Governmental
Authority, (b) any such taxes, levies, duties and assessments that are imposed
on or measured by Contractor's income, and (c) payroll, employment, and similar
taxes imposed with respect to Contractor's Personnel). The taxes, levies, duties
and assessments for which Company is responsible pursuant to the preceding
sentence are hereinafter referred to as the "Covered Taxes". Company shall pay
all Covered Taxes directly to the proper governmental authority, including
gross-up if applicable, and shall furnish Contractor with appropriate tax
receipts. Company further agrees to be responsible for and hold harmless, defend
and indemnify Contractor from and against all liability or loss resulting from
the non-payment of Covered Taxes, including interest and penalties thereon.
Contractor agrees to pay the taxes, levies, duties and assessments described in
subsections (a), (b) and (c) above ("Contractor Taxes"), and further agrees to
be responsible for and hold harmless, defend and indemnify Company from and
against all liability or loss resulting from the non-payment of Contractor
Taxes, including interest and penalties thereon.

        Section 8.6 Customs Duties, Other Taxes. Without prejudice to the
generality of Section 8.5, Company shall be responsible for and shall pay all
customs duties, fees, levies, assessments, or other

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charges imposed by any Governmental Authority in connection with or incidental
to the export of Workover Equipment, spare parts and consumables from its or
their Port of Origin and its importation into and export from Egypt.

ARTICLE IX
LIABILITY

        Section 9.1 Equipment or Property. Except as specifically provided
herein to the contrary, each Party shall at all times be responsible for and
hold harmless, defend and indemnify the other Party from and against damage to
or loss of its own equipment or property, regardless of the cause of loss,
including the negligence of such Party, and despite the fact that a Party's
items may be under the control of the other Party, except that,

        (a)   Company shall be responsible at all times for and shall hold
harmless and indemnify Contractor for loss or destruction of or damage to
Contractor's drill pipe, drill collars, subs, reamers, bumper subs, stabilizers
and other in-hole equipment when such equipment is being used in the hole below
the rotary table, normal wear excepted. Abnormal wear and/or damage for which
Company shall be responsible hereunder shall include, but not be limited to,
wear and/or damage resulting from the presence of hydrogen sulfide or other
corrosive elements in the hole including those introduced into the drilling
fluid, excessive wear caused by sandcutting, damage resulting from excessive or
uncontrolled pressure such as those encountered during testing, blow-out, or in
a well out of control, excessive deviation of the hole from vertical, dog-leg
severity, fishing, cementing or testing operations, and from any unusual
Workover Services undertaken at Company's request. Company's responsibility for
such abnormal wear and/or damage as referred to herein shall include abnormal
wear and/or damage to Contractor's choke hoses and manifolds, blow-out
prevention and other appurtenant equipment. Company shall pay the cost of
repairing damaged equipment if repairable. In the case of equipment lost,
destroyed or damaged beyond repair, Company shall reimburse Contractor an amount
equal to the then current replacement cost of such equipment delivered to the
Workover Rig or Pullover Unit, less depreciation. In calculating Company's
liability under this Section 9.1(a), Company shall receive credit for any
physical damage insurance proceeds actually received by Contractor with respect
to any damage or destruction to Contractor's equipment that is subject to
indemnification by Company under this Section 9.1(a).

        (b)   The depreciation rate for Contractor's equipment lost, destroyed
or damaged beyond repair shall be twenty (20%) per annum straight line from
Contractor's documented date of purchase or refurbishment; provided however, in
no event shall depreciation deducted from replacement cost exceed fifty percent
(50%) of the original purchase or refurbishment price of such equipment.

        (c)   Notwithstanding anything to the contrary in this Agreement, each
Party shall be responsible for and hold harmless and indemnify the other Party
from and against any loss or loss of use or damage to such other Party's
tangible property (such as flow lines and rigs) when such loss or damage occurs
outside of the hole and solely caused by the negligent acts, errors or
omissions, gross negligence or willful and wanton acts of such Party; provided
that a Party's liability under this Section 9.1(c) shall not exceed $20,000 per
indemnifiable event.

        Section 9.2 The Hole. In the event a hole is lost or damaged, Company
shall be solely responsible for and hold harmless and indemnify Contractor from
such damage to or loss of the hole, including all downhole property therein,
regardless of whether such loss or damage was caused by the negligence, gross
negligence or willful misconduct of Contractor, Contractor's personnel or its
subcontractors or agents.

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        Section 9.3 Contractor's Personnel. Contractor shall be responsible for
and hold harmless, defend and indemnify Company, its officers, directors and
employees from and against all claims, demands and causes of action of every
kind and character, without limit and without regard to the causes thereof,
arising in connection herewith in favor of Contractor's employees, or
Contractor's subcontractors or their employees, or Contractor's invitees on
account of bodily injury, death or damage to property.

        Section 9.4 Company's Personnel. Company shall be responsible for and
hold harmless, defend and indemnify Contractor, its officers, directors and
employees from and against all claims, demands, and causes of action of every
kind and character arising in connection herewith in favor of Company's
employees, or Company's other contractors (excluding Contractor hereunder) or
their employees, or Company's invitees, on account of bodily injury, death or
damage to property.

        Section 9.5 Pollution and Contamination. Notwithstanding anything to the
contrary contained herein, the Parties understand and agree that the
responsibility for pollution or contamination shall be as follows:

        (a)   Subject to Company's compliance with its obligations under
Section 5.12, Contractor shall be responsible for and hold harmless, defend and
indemnify Company against, all claims, demands, and causes of action of every
kind and character (including control and cleanup of the pollutant involved)
arising directly or indirectly from all pollution or contamination that
originates above the surface of the ground or water and solely from improper
care or disposition of items wholly in Contractor's possession and control and
directly associated with the Workover Equipment, including, without limitation,
spills of fuels, lubricants, motor oils, water base drilling fluid and attendant
cuttings, pipe dope, paints, solvents, ballast, bilge and garbage.

        (b)   Company be responsible for and hold harmless, defend and indemnify
Contractor against all claims, demands, and causes of action of every kind and
character (including control and removal of the pollutant involved) arising
directly, or indirectly, from all pollution or contamination, other than that
for which Contractor is responsible pursuant to Section 9.5(a), including, but
not limited to, that which may result from fire, blow-out, cratering, seepage or
any other uncontrolled flow of oil, gas, water or other substance, as well as
the use or disposition of lost circulation and fish recovery materials and
fluids, oil emulsion, oil base or chemically treated drilling fluids,
contaminated cuttings or carvings.

        (c)   In the event a third party commits an act or omission which
results in pollution or contamination for which either Contractor or Company for
whom such third party is performing work is held to be legally liable, the
responsibility therefor shall be considered, as between Contractor and Company,
to be the same as if the Party for whom the work was performed had performed the
same and all of the obligations and limitations set forth in Sections 9.5(a) and
(b) shall be specifically applied.

        Section 9.6 Cost of Control. Company shall be responsible for and hold
harmless, defend and indemnify Contractor for the cost of regaining control of
any wild well.

        Section 9.7 Underground Damage. Company shall be responsible for and
hold harmless, defend and indemnify Contractor for any and all claims arising
against Contractor resulting from operations under this Agreement on account of
injury to, destruction of, or loss or impairment of any property right in or to
oil, gas, or other mineral substance or water.

        Section 9.8 Consequential Damages. Except as provided in this Agreement,
neither Party shall be liable to the other for, and each Party shall hold
harmless and indemnify the other against, special, indirect or consequential
damages resulting from or arising out of this Agreement, including, without
limitation, loss of profits, loss of use or business interruptions, however same
may be caused.

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        Section 9.9 Third Parties. Except as otherwise provided in this
Article IX, each Party shall be responsible for and hold harmless, defend and
indemnify the other Party against any property damage of, or personal injury
(including illness or death) to third parties arising out of or relating to the
performance of the Workover Services (with respect to Contractor) or operations
in the Operating Area (with respect to Company) to the extent caused solely by
such Party's negligence, gross negligence, willful misconduct, or other fault.

        Section 9.10 Indemnity Obligation.

        (a)   The Parties intend and agree that the phrase "be responsible for
and hold harmless, defend and indemnify" in this Agreement (or words of similar
effect) means that the indemnifying Party shall indemnify, hold harmless and
defend (including payment of reasonable attorney's fees and costs of litigation)
the indemnified Party from and against any and all claims, demands, causes of
action, damages, judgments and awards of any kind or character, WITHOUT LIMIT
AND WITHOUT REGARD TO THE CAUSE OR CAUSES THEREOF, INCLUDING PRE-EXISTING
CONDITIONS, WHETHER SUCH CONDITIONS BE PATENT OR LATENT, BREACH OF WARRANTY
(EXPRESS OR IMPLIED), STRICT LIABILITY, OR THE NEGLIGENCE OF ANY PERSON OR
PERSONS, INCLUDING THAT OF THE INDEMNIFIED PARTY, WHETHER SUCH NEGLIGENCE BE
SOLE, JOINT OR CONCURRENT, ACTIVE OR PASSIVE.

        (b)   The indemnifying Party's obligations contained in this Agreement
shall also extend to the indemnified Party and its Affiliates and the officers,
directors, employees, agents, owners and shareholders of each.

        (c)   Each Party shall procure and maintain insurance in support of its
indemnity obligations under this Agreement.

        Section 9.11 Indemnity Procedures. If a claim arises as to which either
Party is or may be entitled to indemnification from the other Party hereunder,
such Party (the "Indemnified Party") shall advise the other Party (the
"Indemnifying Party") of the claim promptly after such Indemnified Party becomes
aware of any fact, condition or event which may give rise to such claim. In the
case of a claim for indemnification involving the assertion of a claim by a
third party against such Indemnified Party, provided that the Indemnifying Party
admits in writing to the Indemnified Party that such claim is covered by the
indemnity provisions of this Agreement, the Indemnifying Party shall have the
right to contest and defend by all appropriate legal proceedings such claim and
to control all settlements (unless the Indemnified Party agrees to assume the
cost of settlement and to forego such indemnity) and to select lead counsel to
defend any and all such claims at the sole cost and expense of the Indemnifying
Party ("Assume the Defense"); provided, however, that the Indemnifying Party may
not effect any settlement that could result in any cost, expense or liability
to, or have any obligation upon, any Indemnified Party unless such Indemnified
Party consents in writing to such settlement and the Indemnifying Party agrees
to indemnify such Indemnified Party therefor. Once an Indemnifying Party Assumes
the Defense with respect to a claim, an Indemnified Party may select counsel to
participate in any defense of that claim, in which event such Indemnified
Party's counsel shall be at the sole cost and expense of such Indemnified Party
(unless there is a conflict of interest, in which case the Indemnified Party's
counsel shall be at the cost and expense of the Indemnifying Party). In
connection with any such third party claim, the Parties shall cooperate with
each other and provide each other with access to relevant books and records in
their possession.

ARTICLE X
INSURANCE

        Section 10.1 Insurance. Each Party shall carry and maintain insurance
coverage of the type and in the amounts set forth in Appendix D at such Party's
sole cost. All references in this Agreement to the

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"insurance" of a Party shall mean such insurance as set forth in Appendix D.
Furthermore, each Party will be responsible for maintaining the statutory
insurance coverage required in Egypt and for the insurance premiums for its
personnel.

        Section 10.2 Certificates. Each Party will furnish the other prior to
the first Commencement Date with certificates indicating that the required
insurances are in full force and effect and that the same shall not be cancelled
or materially and adversely changed without ten (10) days prior written notice
to the other Party.

        Section 10.3 Subrogation. Each Party, for liabilities assumed hereunder
by it, shall cause its insurance to be endorsed to provide that its underwriters
waive their right of subrogation against the other Party.

        Section 10.4 Additional Insured. Each Party shall name the other Party
as an additional insured, where permitted, under its policies of liability
insurance, but only with respect to liabilities assumed by such Party under this
Agreement.

ARTICLE XI
SUBLETTING AND ASSIGNMENT

        Section 11.1 Subcontracts. Contractor may employ other contractors to
perform any of the operations or services to be provided or performed by it with
the prior written consent of Company, such consent not to be unreasonably
withheld. Use of subcontractors by Contractor shall not relieve Contractor from
any liability or obligation under this Agreement.

        Section 11.2 Assignment. Neither this Agreement nor any rights or
interests hereunder (including the right to receive monies due hereunder) may be
assigned or transferred in whole or in part by either Party hereto, nor may any
Party hereto delegate any of its obligations, duties or liabilities hereunder,
without the prior written consent of the other Party hereto. Notwithstanding the
foregoing sentence, but subject to the other provisions of this Agreement,
either Party may assign this Agreement and its rights and obligations hereunder
to a Permitted Assignee. Such assignment shall be effective when the Permitted
Assignee executes an Amendment to this Agreement thereby becoming a Party and
assuming all of the assigning Party's rights and obligations under this
Agreement; provided, however, such assignment shall not relieve the assigning
Party of any obligation under this Agreement. Any attempted assignment,
delegation, or transfer in violation of this Section 11.2 shall be void.

ARTICLE XII
ARBITRATION

        Section 12.1 Agreement to Arbitrate. Any and all claims, counterclaims,
demands, cause of action, disputes, controversies, and other matters in question
arising out of or relating to this Agreement, any provision hereof, the alleged
breach thereof, or in any way relating to the subject matter of this Agreement
or the relationship between the Parties created by this Agreement, involving the
Parties and/or their respective representatives (all of which are referred to
herein as "Claims"), even though some or all of such Claims allegedly are
extra-contractual in nature, whether such Claims sound in contract, tort, or
otherwise, at law or in equity, under State or federal law, whether provided by
statute or the common law, for damages or any other relief, shall be resolved by
binding arbitration.

        Section 12.2 Conduct, Authority, and Choice of Law. It is the intention
of the Parties that the arbitration shall be conducted pursuant to the Federal
Arbitration Act and administered by the American Arbitration Association in
accordance with its then current Commercial Arbitration Rules, as such Act and
Rules are modified by this arbitration agreement. The validity, construction,
and interpretation of this Agreement to arbitrate, and all procedural aspects of
the arbitration conducted pursuant to this Agreement to arbitrate, including but
not limited to, the determination of the issues

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that are subject to arbitration (i.e., arbitrability), the scope of the
arbitrable issues, allegations of "fraud in the inducement" to enter into this
agreement or this arbitration provision, allegations of waiver, laches, delay or
other defenses to arbitrability, and the rules governing the conduct of the
arbitration (including the time for filing an answer, the time for the filing of
counterclaims, the times for amending the pleadings, the specificity of the
pleadings, the extent and scope of discovery, the issuance of subpoenas, the
times for the designation of experts, whether the arbitration is to be stayed
pending resolution of related litigation involving third parties not bound by
this arbitration agreement, the receipt of evidence, and the like), shall be
decided by the arbitrators appointed in accordance with this Agreement (the
"Arbitrators"). In deciding the substance of the Parties' Claims, the
Arbitrators shall refer to the substantive laws of the State of Texas for
guidance (excluding Texas choice-of-law principles that might call for the
application of some other State's law). Provided, however, it is expressly
agreed that notwithstanding any other provision in this arbitration agreement to
the contrary, the Arbitrators shall have absolutely no authority to award
treble, exemplary or punitive damages of any type under any circumstance
regardless of whether such damages may be available under Texas law, the law of
any other State, or federal law, or under the Federal Arbitration Act, or under
the Commercial Arbitration Rules of the American Arbitration Association, the
Parties hereby waiving their right, if any, to recover treble, exemplary or
punitive damages in connection with such Claims.

        Section 12.3 Forum for the Arbitration and Selection of Arbitrators. The
arbitration proceeding shall be conducted in Houston, Texas. Within thirty
(30) days of the notice of initiation of the arbitration procedure, each Party
shall appoint an arbitrator. The two arbitrators appointed as herein provided
shall select a third arbitrator, failing agreement on which within ninety days
of the original notice, the Parties (or either of them) shall apply to any
United States District Judge for the Southern District of Texas, Houston
Division, who shall appoint the third arbitrator. While the third arbitrator
shall be neutral, the two Party-appointed Arbitrators are not required to be
neutral and it shall not be grounds for removal of either of the two
Party-appointed Arbitrators or for vacating the arbitrators' award that either
of such arbitrators has past or present minimal relationships with the Party
that appointed such arbitrator. Evident partiality on the part of an Arbitrator
exists only where the circumstances are such that a reasonable person would have
to conclude there in fact existed actual bias and a mere appearance or
impression of bias will not constitute evident partiality or otherwise
disqualify an Arbitrator. Minimal or trivial past or present relationships
between the neutral Arbitrator and the Party selecting such Arbitrator or any of
the other Arbitrators, or the failure to disclose such minimal or trivial past
or present relationships, will not by themselves constitute evident partiality
or otherwise disqualify any Arbitrator.

        Section 12.4 Decision of the Arbitrators. The Arbitrators shall render
their final decision within twenty days of the completion of the final hearing
completely resolving all of the Claims that are the subject of the arbitration
proceeding. The Arbitrators' ultimate decision after final hearing shall be in
writing. The Arbitrators shall certify in their decision that no part of their
award includes any amount for exemplary or punitive damages. The Arbitrators'
decision shall be final and non-appealable to the maximum extent permitted by
law. Any and all of the Arbitrators' orders and decisions may be enforceable in,
and judgment upon any award rendered in the arbitration proceeding may be
confirmed and entered by, any federal or state court having jurisdiction.

        Section 12.5 Confidentiality. To the fullest extent permitted by law,
any arbitration proceeding and the Arbitrators award shall be maintained in
confidence by the Parties.

ARTICLE XIII
DEFAULT AND TERMINATION

        Section 13.1 Termination by Company. Company may terminate this
Agreement:

        (a)   upon the Bankruptcy, insolvency, or dissolution of Contractor;

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        (b)   upon 30 days' written notice to Contractor if there is a material
breach by Contractor of any representation or warranty made by Contractor
herein, unless Contractor has cured such breach during the notice period or has
initiated and is diligently pursuing the cure of such breach and thereafter
continues to diligently pursue such cure; provided, that such cure is effected
within 90 days from the receipt of such notice by Contractor or within an
appropriate time frame if such cure by Governmental Requirement or otherwise
requires or stipulates or allows a longer time period than 90 days;

        (c)   upon 30 days' written notice to Contractor if there is a material
failure by Contractor to perform its obligations hereunder, unless Contractor
has cured such breach during the notice period or has initiated and is
diligently pursuing the cure of such breach and thereafter continues to
diligently pursue such cure; provided, that such cure is effected within 90 days
from the receipt of such notice by Contractor or within an appropriate time
frame if such cure by Governmental Requirement or otherwise requires or
stipulates or allows a longer time period than 90 days (or, notwithstanding the
foregoing, such shorter period of time as may be necessary to avoid the payment
of penalties or the loss of any permit, authorization, license, or concession);

        (d)   in accordance with Section 3.6(b) after exhausting its remedies
under Sections 3.6(b)(i) and (ii); or

        (e)   upon the actual or constructive total loss of all of the Workover
Equipment.

        Section 13.2 Termination by Contractor. Contractor may terminate this
Agreement:

        (a)   upon the Bankruptcy, insolvency, or dissolution of Company;

        (b)   upon the failure by Company to pay within 60 days of when due all
amounts owed to Contractor and such failure is not cured by or on behalf of
Company within ten days of written notice from Contractor to Company demanding
such cure;

        (c)   upon 30 days' written notice to Company if there is a material
breach by Company of any representation or warranty made by Company herein,
unless Company has cured such breach during the notice period or has initiated
and is diligently pursuing the cure of such breach and thereafter continues to
diligently pursue such cure; provided that such cure is effected within 90 days
from the receipt of such notice by Company or within an appropriate time frame
if such cure by Government Requirement or otherwise requires or stipulates or
allows a longer time period than 90 days;

        (d)   upon 30 days' written notice to Company if there is a material
failure by Company to perform its non-payment obligations hereunder, unless
Company has cured such breach during the notice period or has initiated and is
diligently pursuing the cure of such breach and thereafter continues to
diligently pursue such cure; provided that such cure is effected within 90 days
from the receipt of such notice by Company, during which cure period Contractor
shall be required to continue performing the services under this Agreement or
within an appropriate time frame if such cure by Governmental Requirement or
otherwise requires or stipulates or allows a longer time period than 90 days; or

        (e)   upon the actual or constructive total loss of all of the Workover
Equipment.

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        Section 13.3 Effect of Termination. If this Agreement is terminated by
Company pursuant to Section 13.1, Contractor shall have no liability to Company
as a result of such termination. If this Agreement is terminated by Contractor
pursuant to Sections 13.2(a), (b), (c) or (d), Company shall continue to pay to
Contractor the Operating Rate for each item of Workover Equipment for the
remaining term of this Agreement. Company agrees that the foregoing payments are
reasonable in light of the anticipated harm and the difficulty of estimation or
calculation of actual damages and waives the right to contest such payments as
an unreasonable penalty. For the avoidance of doubt, the provisions of
Section 6.3(a) shall apply to any termination of this Agreement under this
Article XIII.

ARTICLE XIV
REPRESENTATIONS AND WARRANTIES

        Section 14.1 Representations by Contractor. Contractor represents and
warrants to Company as follows:

        (a)   Contractor is a corporation duly formed, validly existing, and in
good standing under the laws of the state of Maryland, United States of America
and has full power and authority to own its property and to carry on its
business as now conducted.

        (b)   Contractor has full corporate power and authority to execute this
Agreement and to carry out all its obligations under this Agreement. Its
execution and performance of this Agreement and the consummation of the
transactions contemplated by this Agreement have been duly authorized by all
requisite corporate action on its part. This Agreement constitutes a valid and
legally binding obligation of Contractor, enforceable against it in accordance
with its terms, except as may be limited by applicable Bankruptcy, insolvency,
reorganization, moratorium, and other similar applicable laws now or hereafter
in effect relating to creditors' rights generally. Contractor's representative
executing this Agreement has sufficient authority to sign this Agreement in the
name and on behalf of Contractor, and that authority has not been limited or
revoked.

        (c)   Contractor's execution and performance of this Agreement and the
transactions contemplated hereby do not constitute a breach of any term or
provision of, or a default under, (i) any contract or agreement to which it or
any of its Affiliates is a party or by which it or any of its Affiliates or its
or their property is bound, (ii) its organizational documents, or (iii) any
applicable laws having applicability to it, in each case which breach would have
a material adverse effect on its ability to perform its obligations hereunder.

        (d)   There is no legal proceeding pending or, to its knowledge,
threatened against it that could materially adversely affect the validity of
this Agreement or the ability of Contractor to perform its obligations
hereunder.

        Section 14.2 Representations by Company. Company represents and warrants
to Contractor as follows:

        (a)   Company is a corporation duly formed, validly existing, and in
good standing under the laws of the state of Delaware, United States of America
and has full power and authority to own its property and to carry on its
business as now conducted.

        (b)   Company has full corporate power and authority to execute this
Agreement and to carry out its obligations under this Agreement. Its execution
and performance of this Agreement and the consummation of the transactions
contemplated by this Agreement have been duly authorized by all requisite action
on its part. This Agreement constitutes a valid and legally binding obligation
of Company, enforceable against it in accordance with its terms, except as may
be limited by applicable Bankruptcy, insolvency, reorganization, moratorium, and
other similar applicable laws now or hereafter in effect relating to creditors'
rights generally. Its representative executing this

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Agreement has sufficient authority to sign this Agreement in the name and on the
behalf of Company, and that authority has not been limited or revoked.

        (c)   Company's execution and performance of this Agreement and the
transactions contemplated hereby do not constitute a breach of any term or
provision of, or a default under, (i) any contract or agreement to which it or
any of its Affiliates is a party or by which it or any of its Affiliates or its
or their property is bound, (ii) its organizational documents, or (iii) any
applicable laws having applicability to it, in each case which breach would have
a material adverse affect on its ability to perform its obligations hereunder.

        (d)   There is no legal proceeding pending or, to Company's actual
knowledge, threatened against it that could materially adversely affect the
validity of this Agreement or its ability to perform its obligations hereunder.

        Section 14.3 Survival. The representations made in Sections 14.1 and
14.2 shall survive the execution and delivery of this Agreement.

ARTICLE XV
GENERAL

        Section 15.1 Confidential Information. Upon written request of Company,
all information relating to the workover wells obtained by Contractor in the
conduct of operations hereunder shall be held confidential by Contractor who
will use the same degree of care it uses in safeguarding its own confidential
information.

        Section 15.2 Attorney's Fees. If this Agreement is placed in the hands
of attorney for collection of any sums due hereunder, or suit is brought on
same, or sums due hereunder are collected through Bankruptcy or arbitration
proceedings, then the winning Party shall be entitled to recover reasonable
attorney's fees and costs.

        Section 15.3 Force Majeure. Except as otherwise provided in this
Section 15.3, each Party to this Agreement shall be excused from complying with
the terms of this Agreement, except for the payment of monies when due and the
honoring of indemnities, if and for so long as such compliance is hindered or
prevented by riots, strikes, wars (declared or undeclared), insurrection,
rebellions, terrorist acts, civil disturbances, dispositions or order or
injunctions of any Governmental Authority, whether such authority be actual or
assumed, acts of God or adverse weather conditions, inability to obtain
equipment, supplies or fuel, or by any act or cause (other than financial
distress or inability to pay debts when due) which is reasonably beyond the
control of such Party, such cause being herein sometimes called "Force Majeure."
In the event that either Party is rendered unable, wholly or in part, by any of
these causes to carry out its obligations under this Agreement, such Party shall
give notice and details of Force Majeure in writing to the other Party as
promptly as possible after occurrence. In such cases, the obligations of the
Party giving notice shall be suspended during the continuance of any inability
so caused except that Company shall be obliged to pay to Contractor the Force
Majeure Rate provided for in Section 7.6.

        Section 15.4 Right to Audit. For a period of two years from termination
of the Agreement, Contractor shall keep proper books, records and accounts of
operation hereunder and shall permit Company at all reasonable times to inspect
the portions thereof related to any variation of the rates hereunder and charges
for reimbursable items.

        Section 15.5 Compliance with Laws. In the event any provision of this
Agreement is inconsistent with or contrary to any applicable treaty, law, rule,
regulation or ordinance, said provision shall be modified to the extent required
to comply with said treaty law, rule, regulation or ordinance upon mutual
signing of the Parties, and as so modified the provision and this Agreement
shall continue is full force and effect. If any act or omission by Contractor in
response to Company's explicit instruction

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violates such law, Company shall indemnify Contractor for any consequences
thereof. In no event however, will either Contractor or Company be requested or
required to violate any treaty, law, rule, regulation or ordinance of their
respective countries of incorporation or organization.

        Section 15.6 Waivers. It is fully understood and agreed that none of the
requirements of this Agreement shall be considered as waived by either Party
unless the same is done by writing, and then only by the persons executing this
Agreement, or other duly authorized agent or representative of the Party.

        Section 15.7 Inurement. This Agreement shall inure to the benefit of and
be binding upon the permitted successors and assignees of the Parties.

        Section 15.8 Notices.

        (a)   All notices required or provided for in this Agreement shall be in
writing and shall be delivered by hand; or sent by a recognized overnight mail
or courier service with delivery receipt requested; or sent by facsimile
transfer and acknowledged by recipient, as follows:

If to Company:

Apache Corporation
c/o Apache Egypt Companies
11, Street 281
New Maadi, Cairo, Egypt
Facsimile: (20) (2) 519-3900

Attention: General Manager

With copy to:

Apache Corporation
2000 Post Oak Boulevard
Suite 100
Houston, TX 77056-4400
Facsimile: (713) 296-6450

Attention:Assistant International Counsel

If to Contractor:

6 Desta Dr., Suite 4400
Midland, TX 79705
Facsimile: (915) 620-0307

Attention:Mr. Thomas B. Murphy
Vice President—International

With copies to:

Key Energy Services, Inc.
400 South River Road
New Hope, PA 18938
Facsimile: (215) 862-7902   Vinson & Elkins LLP
2300 First City Tower
1001 Fannin St.
Houston, TX 77002
Facsimile: (713) 615-5295
Attention: General Counsel
 
      Attention: William H. Weiland, Esq.

        (b)   Notices shall be effective when received by the Party to whom
addressed.

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        (c)   All notices, communications and instructions under this Agreement
shall be in the English language.

        Section 15.9 Additional Documents and Actions. Each Party agrees to
execute and deliver to the other such additional documents, and take such
additional actions, all at its own expense, as may be reasonably required by the
other to effect the interest of this Agreement.

        Section 15.10 Expropriation, Confiscation, Nationalization and War
Risks.

        (a)   In the event any of the Workover Equipment, spare parts and/or
supplies directly associated therewith (i) cannot lawfully be exported from the
country in which it was operating following termination of Workover Services,
Company cannot obtain an export license or permit or because of other
governmental restrictions; or (ii) are lost to Contractor through confiscation,
expropriation, nationalization or governmental seizure; or (iii) are lost,
seized, damaged or destroyed as a result of political unrest, insurrection,
terrorist acts, riot or war (declared or undeclared) or other similar
occurrences (including forced abandonment as a result of the foregoing) during
the term of this Agreement, Company will within sixty (60) days following the
occurrence of any such event pay to Contractor the value (as set forth in the
packing lists pursuant to which the Workover Equipment is imported into Egypt)
of such property so restricted, confiscated, expropriated, nationalized, seized,
damaged or destroyed, from which value shall be subtracted the total of the
following:

        (1)   any amount actually received by Contractor by such governmental
unit or body within such period; and

        (2)   any amount actually received by Contractor from insurance within
such period.

        (b)   Upon payment by Company to Contractor of the amounts specified in
Section 15.10(a) above, Contractor shall transfer to Company its right, title,
and interest in and to all such property so restricted, confiscated,
expropriated, nationalized, seized, damaged or destroyed.

        (c)   All costs and other charges provided for in this Section 15.10 are
subject to adjustment after audit.

        (d)   If requested by Company in writing, Contractor agrees to obtain at
Company's sole expense to the extent then and thereafter available, insurance
covering all or such portion of the risks specified in this Section 15.10 as
Company may direct. Company shall be named as an additional insured in any such
policy or policies of insurance, which shall provide for the payment of losses
thereunder in United States dollars. The provisions of such insurance and cost
thereof shall be subject to Company's approval prior to the issuance thereof.

        (e)   Contractor shall pay to Company any monies with respect to such
expropriation, etc., which Contractor receives and for which Company has not
already received credit after payment has been made by Company to Contractor
under this Section 15.10.

        Section 15.11 Foreign Corrupt Practices Act. Neither Party shall act in
violation of the U.S. Foreign Corrupt Practices Act or, in connection therewith,
make any payments, loans, or gifts, directly or indirectly, to or for the use or
benefit of any official, employee, agency or instrumentality of any government,
political party, or public international organization, candidate for political
office, or any other person, the payment of which would violate the laws of the
United States of America or of Egypt. Each Party shall be responsible for and
hold harmless and indemnify the other Party from and against any fines,
penalties, related costs and expenses (including reasonable attorneys' fees and
expenses) attributable to any failure of such Party (or any subcontractor) to
comply with this Section 15.11 in connection with this Agreement or the
performance of the Workover Services.

        Section 15.12 Entire Agreement. This Agreement supersedes and replaces
any oral or written communications heretofore made between the Parties relating
to the subject matter hereof.

[Signature Page Follows]

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

 
 
CONTRACTOR: KEY ENERGY SERVICES, INC.
 
 
 
 
By:
 
/s/  JACK D. LOFTIS, JR.               Name:   Jack D. Loftis, Jr.        
Title:   Senior Vice President and General Counsel
 
 
COMPANY: APACHE CORPORATION
 
 
 
 
By:
 
/s/  G. STEVEN FARRIS               Name:   G. Steven Farris         Title:  
President and Chief Operating Officer

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AGREEMENT FOR SUPPLY AND OPERATION OF WORKOVER RIGS, PULLING UNITS, VEHICLES,
OTHER EQUIPMENT AND RELATED SERVICES