UNITED
STATES


SECURITIES
AND EXCHANGE COMMISSION


WASHINGTON,
D.C. 20549





FORM
10-K/A


Amendment
No. 1





(Mark
One)


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


For
the fiscal year ended December 31, 2007




or


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




For
the transition period from
                    
to




Commission
file number 000-51471





Bronco
Drilling Company, Inc.




(Exact
name of registrant as specified in its charter)




Delaware
            20-2902156(State
      or Other Jurisdiction of
              Incorporation
      or Organization)
            (I.R.S.
      Employer
              Identification
      No.)16217
      North May Avenue
              Edmond, Oklahoma
            73013(Address
      of Registrant’s Principal Executive Offices)
            (Zip
      Code)




(405)
242-4444


(Registrant’s
telephone number, including area code)





Securities
      Registered Pursuant to Section 12(b) of the Act:Title
      of Each Class
            
            Name
      of Each Exchange on Which RegisteredCommon
      Stock $0.01 Par Value per Share
            
            The
      Nasdaq Stock Market LLCSecurities
      Registered Pursuant to Section 12(g) of the Act:None







Indicate
by check mark if the registrant is a well-known seasoned issuer, as defined in
Rule 405 of the Securities Act.    Yes   ̈    No x




Indicate
by check mark if the registrant is not required to file reports pursuant to
Section 13 or Section 15(d) of the
Act.    Yes   ̈    No  x




Indicate
by check mark whether the registrant (1) has filed all reports required to
be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934
during the preceding 12 months (or for such shorter period that the registrant
was required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days.    Yes  x    No   ̈




Indicate
by check mark if disclosure of delinquent filers pursuant to Item 405 of
Regulation S-K is not contained herein, and will not be contained, to the
best of registrant’s knowledge, in definitive proxy or information statements
incorporated by reference in Part III of this Form 10-K or any amendments to
this Form 10-K.   ̈




Indicate
by check mark whether the registrant is a large accelerated filer, an
accelerated filer, non-accelerated filer or a smaller reporting company. See
definitions of “accelerated filer and large accelerated filer” and “smaller
reporting company” in Rule 12b-2 of the Exchange Act. (check one):




Large
      Accelerated Filer   ̈
            Accelerated
      Filer  x
            Non-Accelerated
      Filer   ̈
            Smaller
      Reporting Company   ̈




Indicate
by check mark whether the registrant is a shell company (as defined in Rule
12b-2 of the Exchange Act).    Yes   ̈    No  x




The
aggregate market value of the voting and non-voting common equity held by
non-affiliates of the registrant as of the most recently completed second fiscal
quarter (June 30, 2007), based on the price at which the common equity was last
sold on such date: $426,796,695.




As
of  April 28, 2008,26,269,961shares of common
stock were outstanding.





Documents
Incorporated By Reference




None


BRONCO
DRILLING COMPANY, INC.







TABLE
OF CONTENTS




Item
              No.
            
            Form
              10-K
              Report
              PageEXPLANATORY
            NOTE
            3PART
      III10.
            Directors
      and Executive Officers and Corporate Governance
            311.
            Executive
      Compensation
            412.
            Security
      Ownership of Certain Beneficial Owners and Management and Related
      Stockholder Matters
            1013.
            Certain
      Relationships and Related Transactions, and Director
      Independence
            1114.
            Principal
      Accounting Fees and Services
            12PART
      IV15.
            Exhibits
      and Financial Statement Schedules
            13


-2-


EXPLANATORY
NOTE





Bronco Drilling Company, Inc. is filing
this Amendment No. 1 on Form 10-K/A (this “Amendment”) to its Annual Report on
Form 10-K for the fiscal year ended December 31, 2007, originally filed on March
17, 2008, for the purpose of including the information required by Part III of
Form 10-K.  In addition, we are also including as exhibits to this
Amendment the certifications required under Section 302 of the Sarbanes-Oxley
Act of 2002.  Because no financial statements are contained within
this Amendment, we are not including certifications pursuant to Section 906 of
the Sarbanes-Oxley Act of 2002.  Except as set forth herein, no other
changes are made to our Annual Report on Form 10-K for the year ended December
31, 2007.





PART
III




Item 10.
Directors and Executive Officers and Corporate Governance.




Directors




The following table sets forth the
name, age and position of each of our directors elected by our
stockholders.







Name
            Age
            PositionD.
      Frank Harrison
            60
            Chairman
      and Chief Executive OfficerDr. Gary C. Hill
      (1)(3)
            59
            DirectorDavid L. Houston
      (1)(2)(3)
            55
            DirectorMike Liddell
            54
            DirectorWilliam R. Snipes
      (1)(2)(3)
            55
            Director




(1)
            Member
      of audit committee


(2)
            Member
      of compensation committee


(3)
            Member
      of nominating and corporate governance
committee




D.
Frank Harrison has served as the Chairman of our Board of Directors since
August 2007, and Chief Executive Officer and a director of our company since
May 2005. Mr. Harrison served as President of Harding & Shelton,
Inc., a privately held oil and natural gas exploration, drilling and development
firm, from 1999 to 2002. From 2002 to 2005, Mr. Harrison served as an agent
for the purchase and sale of oil and gas properties for entities controlled by
Wexford Capital LLC. He graduated from Oklahoma State University with
a Bachelor of Science degree in Sociology.




Dr. Gary C. Hill has served as a director of our company since August
2006. Dr. Hill has served as the Chief of Surgery Service and Chief of
Staff at Edmond Medical Center. He also has served as the President of
the Edmond Medical Center Hospital Board. Dr. Hill served as the Chief of
Surgery Service and Chief of Staff at St. Joseph’s Regional Hospital in
Ponca City, Oklahoma. Dr. Hill is a graduate of
Oklahoma State University, where he received his Bachelor of Arts in
Humanities, and the University of Oklahoma Health Sciences Center. He served
both his Surgery Internship and Residency in Otolaryngology, Head and Neck
Surgery at the University of Texas Health Science Center, Parkland Hospital
in Dallas before performing his Plastic and Reconstructive Surgery Residency at
the University of Kansas Health Sciences Center in Kansas City. Dr. Hill is
a native of Altus, Oklahoma.




DavidL.Houston
has served as a director of our company since May 2005. Since 1991,
Mr. Houston has been the principal financial advisor of Houston Financial,
a firm that offers life and disability insurance, compensation and benefits
plans and estate planning. He currently serves on the board of directors of
Gulfport Energy Corporation and the board of directors of
Deaconess Hospital, located in Oklahoma City, Oklahoma. Mr. Houston is
the former chair of the Oklahoma State Ethics Commission and the Oklahoma League
of Savings Institutions. Prior to 1991, Mr. Houston was President and Chief
Executive Officer of Equity Bank for Savings, F.A., an Oklahoma-based savings
bank. He received a Bachelor of Science degree in Business from
Oklahoma State University and a graduate degree in Banking from
Louisiana State University.




MikeLiddell
has served as a director of our company since May 2005, and as the Chairman
of our Board of Directors from May 2005 to July 2007. Mr. Liddell has
served as a director of Gulfport Energy Corporation, a publicly held oil and
natural gas corporation, since July 1997 and as its Chairman of the Board
since July 1998, and served as its Chief Executive Officer from April 1998
to December 2005, and as its President from July 2000 to
December 2005. Mr. Liddell served as Chief Executive Officer of DLB
Oil & Gas, Inc., a publicly held oil and natural gas company, from
October 1994 to April 1998, and as a director of DLB Oil & Gas
from 1991 through April 1998. From 1991 to 1994, Mr. Liddell was
President of DLB Oil & Gas. From 1979 to 1991, he was President and Chief
Executive Officer of DLB Energy. Mr. Liddell received a Bachelor of Science
degree in Education from Oklahoma State University.




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





Executive
Officers




The following table sets forth certain
information with respect to our executive officers, other than
Mr. Harrison, whose information is set forth above under the caption
“Directors.”





Name
            Age
            PositionMark Dubberstein
            54
            PresidentZachary M. Graves
            32
            Chief
      Financial Officer, Secretary and TreasurerLarry L. Bartlett
            53
            Senior
      Vice President of Rig OperationsSteven R. Starke
            30
            Chief
      Accounting Officer





MarkDubberstein
has served as President of our company since June 2007.  He
served as our General Counsel from January 2006 to June
2007.  Prior to joining our company, Mr. Dubberstein was in
private legal practice for twenty-five years, most recently as the senior member
of Dubberstein, Heinen & Morris PC in Oklahoma City.  His previous
experience includes serving as Mid-Continent Counsel at Sohio Petroleum Company
in Dallas.  He received a Juris Doctorate from the University of
Oklahoma College of Law and a Bachelor of Arts degree in English from
Oklahoma State University.





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





LarryL.Bartlett
has served as our Senior Vice President of Rig Operations since
August 2006. Prior to his employment at Bronco, Mr. Bartlett provided
thirty years of service to Thomas Drilling where, for the last ten years,
he served as President. Mr. Bartlett is a member of both the Oklahoma
Independent Petroleum Association and the International Association of Drilling
Contractors. He graduated from Cameron University in 1976 with a Bachelors
Degree in Business.





StevenR.Starke has
served as our Chief Accounting Officer since June
2007.  Mr. Starke served previously as our Controller from May
2005 to June 2007.  Prior to joining our Company, Mr. Starke
served as an accountant with Grant Thornton LLP in Oklahoma City from
January 2000 to May 2005. He received a Bachelor of Business
Administration degree in Accounting and Management Information Systems from the
University of Oklahoma and is a licensed Certified Public
Accountant.





Section
16(a) Beneficial Ownership Reporting Compliance





Section 16(a) of the Exchange Act
requires our executive officers and directors, and persons who own more than 10%
of a registered class of our equity securities, to file reports of ownership and
changes of ownership with the Securities and Exchange Commission, or
SEC.  Our officers, directors and 10% stockholders are required by SEC
regulations to furnish us with copies of all Section 16(a) forms so
filed.  Based solely on our review of such forms received, we believe
that, during the last fiscal year, all filing requirements under 16(a)
applicable to our officers, directors and 10% stockholders were timely
met.


-3-




Code
of Business Conduct and Ethics





Our Code
of Business Conduct and Ethics is designed to help directors and employees
resolve ethical issues and to help us conduct our business in accordance with
all applicable laws, rules and regulations and with the highest ethical
standards. Our Code of Business Conduct and Ethics applies to all directors and
employees, including our principal executive officer, principal financial
officer, principal accounting officer and all other executive officers. We also
expect that any consultants we retain to abide by our Code of Business Conduct
and Ethics. Our Code of Business Conduct and Ethics sets forth our policies with
respect to public disclosure of Company conflicts of interest, corporate
opportunities, fair dealing, confidentiality, equal employment opportunity and
harassment, protection and proper use of our assets and employee complaint
procedures. www.broncodrill.com




Stockholder
      Nominations for Director Nominees




No material changes have been made to the procedures by which our stockholders
may recommend nominees to our board of directors since we described the
procedures in our Proxy Statement for our Annual Meeting of Stockholders held on
June 1, 2007.  Our nominating and corporate governance committee will
propose the slate of directors to be put up for election at our annual meeting
of stockholders.




Audit
      Committee




We
currently maintain an audit committee.  The audit committee of our
board of directors is composed of Messrs. Snipes (chair), Hill and Houston.
Our board of directors has determined that each current member of the audit
committee is independent for purposes of serving on such committee under NASDAQ
listing standards and applicable federal law. Our board of directors has also
determined that each current member of the audit committee is financially
literate under NASDAQ listing standards and that Messrs. Houston and Snipes
each qualify as an “audit committee financial expert,” as such term is defined
in Item 407(d) of Regulation S-K. We believe that the composition and
functioning of our audit committee complies with all applicable requirements of
the Sarbanes-Oxley Act of 2002, as well as NASDAQ listing standards and SEC
rules and regulations.





Item 11.
Executive Compensation.




Compensation
Discussion and Analysis





Overview
of Compensation Program





The
compensation committee of our board of directors, which we refer to as the
Committee, was established by our board of directors effective as of
March 25, 2007. Until that date, we relied on the “controlled company”
exemption from the requirement to have a compensation committee and the
applicable transition rules, in each case as provided by NASDAQ listing
standards.





The
Committee is composed entirely of independent directors and has the
responsibility for establishing, implementing and monitoring our compensation
programs.  The Committee annually reviews and recommends to our board
of directors the compensation and benefits for our executive officers,
administers our equity incentive plans, and assists with the establishment of
general policies relating to compensation and benefits for all our
employees.  The Committee ensures that the total compensation paid to
our officers is fair, reasonable and competitive.  Generally, the
types of compensation and benefits provided to our executive officers are
similar to those provided to our other officers and employees.  We do
not have compensation plans that are solely for executive
officers.  Prior to the formation of the Committee, all compensation
programs, including those for our named executive officers, were administered by
our board of directors and all functions of the Committee described below were
performed by our board of directors.





Compensation
Philosophy and Objectives





The objectives of our compensation
programs are to attract and retain key executives, align the interests of our
executives with those of our stockholders and motivate and reward individual
performance and contributions.  The key elements of our compensation
program are salary, annual bonus and long-term incentive compensation. We use
these elements to meet our compensation objectives as follows:




·
            Attract
      and retain key executives. We believe that to attract and retain talented
      executives, we must offer compensation that is competitive. We also
      believe that our executive officers are critical to the long-term success
      of our company. To facilitate their retention, we entered into employment
      agreements with Messrs. Harrison, Dubberstein and Graves during
      2006, and Messrs. Bartlett and Starke during 2007, on terms that we
      believe are competitive. In setting the salary and bonus for each of these
      individuals pursuant to such employment agreements, our board of directors
      believed that the combined value of base salary and bonus was competitive
      with that paid to similarly situated
executives.




·
            Align
      the interests of our executives with those of our stockholders. In 2007,
      the Company used restricted stock awards to provide long-term incentive
      compensation and to align the financial interests of our executives with
      those of our stockholders. For a discussion of the Company’s long-term
      incentive policy, equity awards and the offer to exchange outstanding
      options for restricted stock awards, see “Long Term Incentive
      Compensation” below.




·
            Restricted
      stock generally vests in equal installments over a two- or three-year
      period from the date of grant. Restricted stock awards thereby ensure that
      our executives have a continuing stake in the long-term success of our
      company as the value of the award will depend on the stock price at the
      time of vesting.




·
            Motivate
      and reward individual performance and contributions. The Company’s
      evaluation of the individual performance of each executive officer affects
      most aspects of the executive’s compensation. Individual performance and
      level of responsibility are considered in determining an executive’s
      annual salary, and are important factors in deciding discretionary bonuses
      and equity awards.




Compensation
Benchmarking




To ensure
our compensation is competitive, the Committee considers the competitive market
for talent and compensation levels provided by comparable companies and
seeks to minimize significant differences that could negatively impact our
ability to attract and retain exceptional executive officers. In December 2007,
the Committee, with the assistance of an external compensation consultant,
Equilar, Inc., reviewed the compensation practices at peer companies with
which we compete for business and/or talent.  Equilar, Inc. was
retained to provide a competitive market pay analysis, which included total
compensation measurement services, proxy data studies, board of directors pay
studies and market trends. The Committee chose the companies listed below to
serve as the peer group for its review because those companies, in the
Committee’s opinion, consisted of direct competitors, similar sized companies
within the energy industry, and Oklahoma-based energy companies with which we
compete for talent.




·
            Basic
      Energy Services Inc.




·
            Chesapeake
      Energy Corporation




·
            Complete
      Production Services Inc.




·
            Devon
      Energy Corporation




·
            Grey
      Wolf, Inc.




·
            Helmerich
      & Payne, Inc.




·
            Key
      Energy Services, Inc.




·
            Patterson-UTI
      Energy, Inc.




-4-




·
            Pioneer
      Drilling Company




·
            SandRidge
      Energy, Inc.


After completing its review and
taking into consideration salary increases for certain named executive officers
described under “Base Salary” below, the Committee determined that 2007
compensation for our executive officers was appropriate and competitive with
similarly situated companies, and, therefore, decided to make no changes to our
compensation structure or policies.   The Committee plans to
retain Equilar, Inc. or another compensation consultant during 2008 to provide
further analysis of our compensation structure and
philosophy.
  Role
of Executive Officers
 
 In 2007,
our board of directors, and then, upon its formation, the Committee, made all
compensation decisions for our Chief Executive Officer and, after receiving
input from the Chief Executive Officer, all other named executive officers of
the Company. Our board of directors and the Committee reviewed the performance
of our Chief Executive Officer, and following such review, determined to
maintain the compensation of our Chief Executive Officer pursuant to his
employment agreement, which is described in more detail below.
   Base
Salary






Prior
to the establishment of the Committee, our board of directors annually reviewed
the base salaries of our named executive officers.  Since its
establishment, the Committee has reviewed the base salaries of our named
executive officers and, with respect to future salary determinations, will be
reviewed by the Committee on an annual basis. Our board of directors, and then,
upon its formation the Committee, considered various factors, including
with regard to the position of the named executive officer, the compensation of
executive officers of companies within the peer group described above, the
performance of such executive officer, increases in responsibilities and
recommendations of our Chief Executive Officer with respect to base salaries of
other named executive officers.





Each of
our named executive officer’s annual base salary is set forth in his
respective employment agreement discussed in more detail below.  The annual
base salary may be increased, but not decreased, at the discretion of the board
of directors or the Committee. Based on the considerations described above,
in August 2006, our board of directors established the annual base salary
for Mr. Harrison at $450,000.  The Committee decided to maintain
such base salary for Mr. Harrison in 2007.  Based on the
considerations described above, Mr. Dubberstein’s annual base salary was
increased to $325,000 in April 2007, Mr. Graves’ annual base salary was
increased to $325,000 in July 2007 and Mr. Bartlett’s annual base salary
was increased to $225,000 in August 2007.  See “Summary Compensation
Table” below.  The terms of each executive’s employment agreement
are discussed in more detail under the heading “Employment Agreements”
below.





Bonus





Under the
terms of his employment agreement, our Chief Executive Officer is eligible to
receive an annual bonus in an amount not less than 66.7% of his annual base
salary. Our board of directors determined to pay such bonus to our Chief
Executive Officer, so that the aggregate cash component of his compensation,
consisting of his base salary and bonus, will be comparable to similarly
situated executives of our competitors. In 2007, our other named executive
officers were eligible to receive an annual bonus if recommended by the Chief
Executive Officer and approved by the Committee in its discretion. Our Chief
Executive Officer, President, Chief Financial Officer, Senior Vice President of
Rig Operations and Chief Accounting Officer received bonuses of $300,000,
$100,000, $100,000, $25,000 and $20,000, respectively. These bonuses were based
on various factors, including our profitability, growth, market share and safety
record achieved in 2007. Further details regarding 2007 bonuses for our Chief
Executive Officer and other named executive officers are set forth under the
heading “Summary Compensation Table” below.





Long-Term
Incentive Compensation





2007 Awards.  In
February 2007, the board approved restricted stock awards of 25,000 shares
to each of our President, Chief Financial Officer and Senior Vice President of
Rig Operations, and 5,000 shares to our Chief Accounting Officer, under our 2006
Stock Incentive Plan described in more detail below. One-third of these shares
of restricted stock vested on January 1, 2008, and the remaining shares vest in
two equal annual installments on January 1, 2009 and 2010, subject to
earlier vesting or forfeiture in certain circumstances. These awards were made
in the discretion of our board of directors to help incentivize these executive
officers.  In May 2007, pursuant to our offer to exchange options for
restricted stock as described in detail below, we issued shares of our
restricted stock to our Chief Executive Officer, President, Chief Financial
Officer, Senior Vice President of Rig Operations and Chief Accounting Officer
under our 2006 Stock Incentive Plan.  One-half of these shares of
restricted stock vested on January 1, 2008, and the remaining shares vest on
January 1, 2009, subject to earlier vesting or forfeiture in certain
circumstances.





2008 Awards.  In
January 2008, the Committee approved restricted stock awards of 50,000 shares to
our Chief Executive Officer, 33,333 shares to our President, 48,333 shares to
our Chief Financial Officer, 28,333 shares to our Senior Vice President of Rig
Operations, 10,042 shares to our Chief Accounting Officer and 5,000 shares to
each of Messrs. Hill, Snipes and Houston under our 2006 Stock Incentive Plan
described in more detail below.  These shares of restricted stock vest
in two equal annual installments beginning on February 25, 2009, subject to
earlier vesting or forfeiture in certain circumstances.  These awards
were made in the discretion of the Committee to help incentivize these directors
and executive officers by maintaining a comparable amount of unvested shares of
restricted stock as they had prior to recent vestings.





Long-Term Incentive Policy.
Although in the past we awarded both options and restricted stock as part of our
long-term incentive compensation program, our board of directors and the
Committee believe that restricted stock awards are an essential component of our
compensation strategy, and we intend to continue offering such awards in the
future. Further, we anticipate that any equity awards granted to our directors
and executive officers during the remainder of 2008 will be in the form of
restricted stock. The Committee may also determine to issue other forms of
stock-based awards to our named executive officers or other eligible
participants under our 2006 Stock Incentive Plan or other equity incentive plans
in effect at that time. Our current equity incentive plans are described below
under the headings “2006 Stock Incentive Plan” and “2005 Stock Incentive
Plan.”





Offer to Exchange Options for
Restricted Stock Awards. As a company, we are committed to director,
employee and consultant ownership of our capital stock because it helps us
attract and retain highly qualified directors, employees and consultants. In
light of the foregoing, our board of directors authorized, and on April 20,
2007, we commenced, an offer, which we refer to as the Exchange Offer, to
exchange options granted on or after August 16, 2005 to purchase shares of
our common stock that were outstanding under our 2005 Stock Incentive Plan and
our 2006 Stock Incentive Plan and held by certain of our directors, employees,
including our named executive officers, and consultants for restricted stock
awards consisting of the right to receive restricted common stock upon the terms
and subject to the conditions of the Exchange Offer and the related letter to
eligible holders. The purpose of the Exchange Offer was to provide an
incentive to eligible holders, including our directors and named executive
officers, for their continued efforts and dedication. Although we were not
required to make the Exchange Offer, we believed that eligible holders’ options
no longer provided the incentives originally intended. Many of such holders had
stock options with exercise prices significantly above our then, current and
recent trading prices. This exchange program was offered on a voluntary basis to
allow eligible holders, including our directors and named executive officers, to
choose whether to keep their eligible options at their current exercise prices,
or to exchange those options for restricted stock awards.





Under the
terms of the Exchange Offer, one restricted stock award was granted for every
two shares of common stock underlying the eligible options that were accepted
for exchange and cancelled. Each restricted stock award granted gave the holder
thereof the right to receive one share of restricted common stock, subject to
certain vesting requirements. Until the restricted stock awards have vested,
they remain subject to restrictions on transfer and to forfeiture if the
employment or service, as may be applicable, terminates.





One-half
of the restricted shares of our common stock underlying the restricted stock
awards granted pursuant to the Exchange Offer vested on January 1, 2008, and the
remaining shares vest on January 1, 2009, subject to earlier vesting or
forfeiture in certain circumstances. Vesting will only occur, however, if the
eligible holder remains a director, employee or consultant of ours or one of our
affiliates through the respective vesting dates. Even though certain of the
eligible options subject to the Exchange Offer were partially-vested or
fully-vested, the restricted stock awards received in the Exchange Offer were
not immediately vested and were subject to the new vesting periods.





If there
is a change of control of the Company as defined in our 2006 Stock Incentive
Plan, the vesting for any restricted shares granted in the Exchange Offer that
have not yet vested will be accelerated to immediately prior to the date of the
change of control, provided the eligible holder has remained a director,
employee or consultant of ours or one of our affiliates through the date of such
change of control.





All
eligible holders elected to participate in the Exchange Offer and the Exchange
Offer was consummated on May 21, 2007.  Pursuant to the exchange
offer, we accepted for cancellation eligible options to purchase 729,000 shares
of our common stock tendered by directors, employees and consultants eligible to
participate in the Exchange Offer. Subject to the terms and conditions of the
Exchange Offer, we granted one restricted stock award in exchange for every
two shares of common stock underlying the eligible options tendered by eligible
directors, employees and consultants in the Exchange Offer.







-5-




Perquisites and Other Personal
  Our
company provides our named executive officers with a limited number of
perquisites or other personal benefits, primarily consisting of company vehicles
and club memberships, that we believe help provide a competitive package of
compensation and benefits. The value of these benefits is disclosed in the 2007
Summary Compensation Table.


Broad-Based
Employee Benefits


401(k) Plan. We have a
defined contribution retirement plan in which certain of our named executive
officers currently participate. The retirement plan is a tax qualified 401(k)
plan that covers all U.S. employees including the named executive officers.
Under the plan, we match 100% of employees’ contributions up to 5% of eligible
compensation, up to a maximum in 2007 of $15,000, or $20,000 if age 50 or over.
Employee and employer contributions vest immediately.




Our named
executive officers are eligible to participate in all of our other employee
benefit plans which include medical, dental, group life, disability and
accidental death and dismemberment insurance, in each case on the same basis as
all other employees.





Employment
Agreements





We
believe that employment agreements are critical to the attraction and retention
of our key executive officers; therefore, the Company is a party to employment
agreements with each of its executive officers. Employment agreements with D.
Frank Harrison, our Chairman of the Board and Chief Executive Officer,
Mark Dubberstein, our President, and Zachary M. Graves, our Chief
Financial Officer, were each entered into effective as of August 8, 2006,
as amended effective as of August 2, 2007.  An employment
agreement was entered into with Larry L. Bartlett, our Senior Vice
President of Rig Operations, effective as of August 2, 2007, and with
Steven Starke, our Chief Accounting Officer, effective as of August 3,
2007.  As used in this section, all references to an individual’s
employment agreement will describe the agreement as amended, if applicable. Each
employment agreement has a three-year term, subject to automatic extensions for
one additional year so that the remaining term will be not less than two nor
more than three years.  Annual base salaries are currently $450,000
per year for Mr. Harrison, $325,000 per year for Mr. Dubberstein,
$325,000 per year for Mr. Graves, $225,000 per year for Mr. Bartlett
and $125,000 per year for Mr. Starke. In each case, the base salary is
subject to review by the Committee at least
annually.  Mr. Harrison is eligible to receive an annual
bonus in an amount not less than 66.7% of his annual base salary and
Messrs. Dubberstein, Graves, Bartlett and Starke are eligible to receive an
annual bonus as established by the board of directors or the
Committee.  If we terminate an employment agreement without cause, the
executive officer is entitled to severance pay in an amount equal to:
(1) the base salary earned and unpaid through the date of such termination
plus the executive officer’s base salary for the remainder of the term of his
agreement; provided, however, that such amount may not be less than twice the
base salary in effect on the date of the termination, plus (2) the greater
of any target bonus for the year of termination or the average of the two
immediately preceding years’ annual incentive bonuses; plus (3) any
vacation pay accrued through the date of the termination. In addition, for a
period of the greater of 24 months after such termination or the remainder
of the term of the executive officer’s agreement, the Company will continue to
provide the executive officer (and his family, as applicable) with medical,
dental and life insurance and other similar benefits.





We
believe that the executive’s performance generally may be hampered by
distraction, uncertainty and other activities in the event of an actual or
threatened change of control event. To reduce such adverse effects and encourage
fair treatment of our executive officers in connection with any such change of
control event, the above-referenced employment agreements include change of
control protections. If within two years following a change of control the
Company terminates the employment of any such executive officer with or without
cause or such executive officer resigns with or without cause or good reason,
such executive officer would be entitled to a severance payment, payable in a
lump sum in cash following such executive officer’s termination, in an amount
equal to three times the sum of (1) his highest paid annual base salary, plus
(2) the bonus calculated as discussed below, plus any applicable gross-up
payment.  We believe that the double trigger requiring both
(1) the termination with or without cause or resignation with or without
cause or good reason and (2) a change of control event is appropriate to
provide fair treatment of these named executive officers without creating a
windfall.





For
Messrs. Harrison, Dubberstein and Graves, the bonus paid upon qualifying
termination in the event of a change of control will be calculated based on the
average of the last three years’ annual bonuses or such lesser number of years
as such executive may have been employed. For Messrs. Bartlett and Starke,
the bonus payable to each such executive upon qualifying termination in the
event of a change of control will be the greater of any target bonus for the
year of termination or the highest bonus paid to such executive officer during
his employment with the Company.





The
employment agreements also provide that in the event of a termination of the
executive officer’s employment (1) by the Company without cause,
(2) by the executive officer for good reason or (3) in connection with
a change of control, (a) all units, stock options, incentive stock options,
performance shares, stock appreciation rights and restricted stock held by such
executive officer immediately prior to such termination will immediately become
100% vested and (b) the executive officer’s right to exercise any
previously unexercised options will not terminate until the latest date on which
such option would expire but for the executive officer’s termination of
employment.





As
defined in the employment agreements, “change of control” occurs in the event
any individual, entity or group acquires beneficial ownership of 40% or more of
either (a) the then outstanding shares of Company common stock or
(b) the combined voting power of the Company’s then outstanding voting
securities entitled to vote generally in the election of directors, provided
that any acquisition by any employee benefit plan (or related trust) sponsored
or maintained by the Company or any corporation controlled by the
Company will not constitute a “change of control.” In addition, a change of
control occurs when the individuals who, as of the date of these employment
agreements, constitute the Company’s board of directors (the “incumbent board”)
cease for any reason to constitute at least a majority of the board of
directors. Any individual becoming a director subsequent to the date of these
employment agreements whose election, or nomination for election by our
stockholders, is approved by a vote of at least a majority of the directors then
comprising the incumbent board will be considered a member of the incumbent
board as of the date thereof, but any such individual whose initial assumption
of office occurs as a result of an actual or threatened election contest with
respect to the election or removal of directors or other actual or threatened
solicitation of proxies or consents by or on behalf of a person other than the
incumbent board will not be deemed a member of the incumbent board as of the
date of these employment agreements. In addition, a change of control will occur
upon the consummation of certain specified business combinations and upon the
approval by our stockholders of a complete liquidation or dissolution of the
Company.





The
employment agreements also provide that in the event of termination upon the
disability of the executive officer, the Company will pay him his base salary in
effect on the date of termination through the remaining term of the employment
agreement, but in any event through the expiration date. The payment of such
amounts will be made during the remaining term of the employment agreements in
installments consistent with the Company’s normal payroll practices; provided,
however, that if the named executive officer is a “specified employee” as
defined in regulations under Section 409A of the Internal Revenue Code,
such payments will commence on the first payroll payment date that is more than
six months following the termination date and the first payment will include any
amounts that would have otherwise been payable during the six-months period.
Notwithstanding the foregoing, the amounts payable to the executive officer in
the event of termination upon disability will be reduced by any benefits payable
under any of the Company’s disability plans to such executive officer. If the
executive officer dies during the term of his employment agreement, his
employment will be terminated on such date and his estate will be entitled to
receive his base salary for a period of twelve months after the effective date
of such termination any other benefits accrued through the effective date of
such termination.





In
addition, in the event it is determined that any payment or distribution by the
Company or its subsidiaries or affiliates to or for the benefit of the executive
officer (whether paid or payable or distributed or distributable pursuant to the
terms of his employment agreement or otherwise) is subject to the excise tax
imposed by Section 4999 of the Internal Revenue Code or any interest or
penalties related to such excise tax, the executive officer will be entitled to
receive an additional gross-up payment from the Company. The gross-up payment
will be equal to the amount such that after payment by the executive officer of
all taxes (including the excise tax, income taxes, interest and penalties
imposed with respect to such taxes) on the gross-up payment, the executive
officer will retain an amount of the gross-up payment equal to the excise tax
imposed on the payment or distribution to or for the benefit of such executive
officer.





The
agreements also provide that each executive officer may not, during the term of
his employment with the Company and for a period extending one year from the
date of the termination of his employment with the Company, disclose any
confidential information regarding the Company or use any such confidential
information for any purpose other than the performance of his employment with
the Company. Each executive officer is also prohibited, during the term of his
employment with the Company and for a period of six months following the
termination of his employment with the Company for any reason other than without
cause or in connection with a change of control, from soliciting, inducing,
enticing or attempting to entice any employee, contractor, customer, vendor or
subcontractor to terminate or breach any relationship with the Company or any of
its subsidiaries or affiliates.





Under the
terms of the merger agreement, dated as of January 23, 2008, among us,
Allis-Chalmers Energy Inc. and Elway Merger Sub, Inc., a wholly owned subsidiary
of Allis-Chalmers Energy Inc., which agreement provides for the merger of Elway
Merger Sub, Inc. with and into Bronco, the employment agreements with our named
executive officers are required to be amended to provide that each such
executive officer would continue to have an obligation not to compete
with the Company for a period of one year following the effective
time of the merger.





Further
details regarding potential payments to these named executive officers upon
termination or following a change of control event are set forth below under the
heading “Potential Payments upon Termination or
Change-in-Control.”





Other
Change of Control Arrangements





To
promote retention of executives, restricted stock grants contain “change of
control” provisions, which trigger full vesting upon a change of control. We
believe that these acceleration provisions are generally consistent with our
competitors’ change of control protections offered to their similarly situated
officers. Potential payments to our Chief Executive Officer and other named
executive officers upon termination or following a change of control event are
set forth under the heading “Potential Payments upon Termination or
Change-in-Control.”


-6-




Deductibility
of Executive Compensation





Section 162(m)
of the Internal Revenue Code limits the deductibility for federal income tax
purposes of executive compensation paid to the Chief Executive Officer and the
four other most highly compensated officers of a public company to $1,000,000
per year, but contains an exception for certain performance-based compensation.
Our policy is to periodically review and consider whether particular
compensation and incentive payments to our executives will be deductible for
federal income tax purposes. We intend, to the extent feasible and when we
believe it is in the best interests of our Company and our stockholders, to
attempt to qualify executive compensation as tax deductible where it does not
adversely affect the development and execution of our compensation
plans.




Compensation
Committee Report on Executive Compensation




The Committee has reviewed and discussed the Compensation Discussion and
Analysis required by Item 402(b) of Regulation S-K with management
and, based on such review and discussions, the Committee authorized, approved
and recommended the inclusion of the Compensation Discussion and Analysis
in this annual report on Form 10-K.




The foregoing report is provided by the following directors, who constitute the
Committee.





COMPENSATION
COMMITTEE






William R. Snipes,
Chairman


David L. Houston




Compensation
Tables




Summary
Compensation Table





The
following table sets forth certain information with respect to the total
compensation earned by our named executive officers during the years ended
December 31, 2007 and 2006.





Name
      and Principal
              Position
            
            Year
            
            Salary
            
            Bonus (1)
            
            Stock
      Awards (2)
            
            Option
      Awards (2)
            
            All
      Other Compensation (3)
            
            TotalD.
      Frank Harrison
            
            2007
            
            $450,000
            
            $300,000
            
            $891,698
            
            $242,778
            
            $15,577
            
            $1,900,053Chairman
      and Chief Executive Officer
            
            2006
            
            $353,846
            
            $387,500
            
            $187,501
            
            $582,667
            
            $7,942
            
            $1,519,456Mark Dubberstein
      (4)
            
            2007
            
            $291,346
            
            $100,000
            
            $331,688
            
            $164,653
            
            $13,942
            
            $901,629President
            
            2006
            
            $201,648
            
            $50,000
            
            -
            
            $345,299
            
            $7,692
            
            $604,639Zachary M. Graves
            
            2007
            
            $272,115
            
            $100,000
            
            $464,197
            
            $239,083
            
            $17,395
            
            $1,092,790Chief
      Financial Officer
            
            2006
            
            $194,231
            
            $210,000
            
            -
            
            $474,050
            
            $14,729
            
            $893,010Larry Bartlett
            
            2007
            
            $225,000
            
            $25,000
            
            $287,518
            
            $151,167
            
            $15,731
            
            $704,416Senior
      Vice President of Rig Operations
            
            2006
            
            $194,077
            
            $167,565
            
            -
            
            $322,900
            
            $10,863
            
            $695,405Steven R. Starke
      (5)
            
            2007
            
            $122,692
            
            $20,000
            
            $96,152
            
            $55,640
            
            $8,488
            
            $302,972Chief
      Accounting Officer
            
            2006
            
            $104,038
            
            $27,500
            
            -
            
            $103,111
            
            $9,214
            
            $243,863




(1)
            Reflects
      cash award paid in 2007 and 2006,
respectively.


(2)
            Reflects
      the amount of expense recognized by the Company for the fiscal years ended
      December 31, 2007 and 2006, respectively, related to all
      outstanding equity awards for each named executive officer in accordance
      with Statement of Financial Accounting Standard No. 123 (revised
      2004), “Share-Based Payment” (SFAS No. 123 (R)), disregarding any
      adjustments for potential
forfeitures.


(3)
            Reflects
      (a) the amount of our matching contributions to our 401(k) plan for
      the benefit for the named executive officer: (1) $15,577 for 2007 and
      $7,942 for 2006 for Mr. Harrison, (2) $13,942 for 2007 and $7,692 for
      2006 for Mr. Dubberstein, (3) $11,106 for 2007 and $8,460 for 2006 for
      Mr. Graves, (4) $11,250 for 2007 and $7,702 for 2006 for Mr. Bartlett
      and (5) $6,135 for 2007 and $4,554 for 2006 for Mr. Starke;
      (b) the amount of club membership dues: (1) $1,292 for 2007 and
      $6,269 for 2006 for Mr. Graves, (2) $3,720 for 2007 and $3,161 for 2006
      for Mr. Bartlett and (3) $2,353 for 2007 and $4,660 for 2006 for Mr.
      Starke; and (c) the amount of personal use of company vehicles: (1)
      $4,997 for 2007 and $3,398 for 2006 for Mr. Graves and (2)
      $761 for 2007 and $1,099 for 2006 for Mr. Bartlett.


(4)
            Mr. Dubberstein
      has served as our President since June 2007.  Mr. Dubberstein
      previously served as our General Counsel from January 2005 to June
      2007.


(5)
            Mr. Starke
      has served as our Chief Accounting Officer since June
      2007.  Mr. Starke previously served as our Controller from
      May 2005 to June 2007.





Grants
of Plan-Based Awards





The
following table contains information with respect to the named executive
officers concerning grants of plan-based awards during 2007.





All
      Other Stock Awards:
            
            All
      Other Option Awards:Name
            
            Grant Date
            
            Number
      of Shares of Stock or Units (1)
            
            Number
      of Securities Underlying Options
            
            Exercise
      or Base Price of Option Awards
            
            Grant
      Date Fair Value of Stock and Option Awards (2)D.
      Frank Harrison
            
            -
            
            -     (3)
            
            -
            
            -
            
            -         
      (3)Mark
      Dubberstein
            
            02/08/2007
            
            25,000
      (4)
            
            -
            
            -
            
            $385,500 
      (4)Zachary M. Graves
            
            02/08/2007
            
            25,000
      (5)
            
            -
            
            -
            
            $385,500 
      (5)Larry Bartlett
            
            02/08/2007
            
            25,000
      (6)
            
            -
            
            -
            
            $385,500 
      (6)Steven R. Starke
            
            02/08/2007
            
            5,000 (7)
            
            -
            
            -
            
            $77,100  (7)






(1)
            Reflects
      shares of restricted stock awarded in February 2007 under our 2006
      Stock Incentive Plan.


(2)
            Reflects
      the grant date fair value of each equity award computed in accordance with
      SFAS No. 123 (R).(3)
            Does
      not include 100,000 shares of restricted stock, with a grant date fair
      value of $1,669,000, received in May 2007 under our 2006 Equity Incentive
      Plan in exchange for stock options pursuant to the Exchange Offer
      described above.(4)
            Does
      not include 50,000 shares of restricted stock, with a grant date fair
      value of $834,500, received in May 2007 under our 2006 Equity Incentive
      Plan in exchange for stock options pursuant to the Exchange Offer
      described above.(5)
            Does
      not include 80,000 shares of restricted stock, with a grant date fair
      value of $1,335,200, received in May 2007 under our 2006 Equity Incentive
      Plan in exchange for stock options pursuant to the Exchange Offer
      described above.(6)
            Does
      not include 40,000 shares of restricted stock, with a grant date fair
      value of $667,600, received in May 2007 under our 2006 Equity Incentive
      Plan in exchange for stock options pursuant to the Exchange Offer
      described above.(7)
            Does
      not include 16,750 shares of restricted stock, with a grant date fair
      value of $279,558, received in May 2007 under our 2006 Equity Incentive
      Plan in exchange for stock options pursuant to the Exchange Offer
      described above.




-7-




Outstanding
Equity Awards at Fiscal Year-End





The
following table contains information with respect to the named executive
officers concerning outstanding equity awards at December 31,
2007.





Option
      Awards
            
            Stock
      AwardsName
            
            Number
      of Securities Underlying Unexercised
              Options
      Exercisable
            
            Number
      of Securities Underlying Unexercised
              Options
              Unexercisable
            
            Option
      Exercise Price
            
            Option
      Expiration Date
            
            Number
      of Shares or Units of Stock That Have Not Vested
            
            Market
      Value of Shares or Units of Stock That Have Not Vested
  (1)D.
      Frank Harrison
            
            -
            
            -
            
            -
            
            -
            
            144,443
            
            $2,144,993Mark Dubberstein
            
            -
            
            -
            
            -
            
            -
            
            75,000
            
            $1,113,750Zachary M. Graves
            
            -
            
            -
            
            -
            
            -
            
            105,000
            
            $1,559,250Larry Bartlett
            
            -
            
            -
            
            -
            
            -
            
            65,000
            
            $965,250Steven R. Starke
            
            -
            
            -
            
            -
            
            -
            
            21,750
            
            $322,988




(1)
            Calculated
      by multiplying the number of unvested shares of restricted stock by the
      closing price of our common stock on The NASDAQ Global Market on December
      31, 2007 of $14.85.





Option
Exercises and Stock Vested





The
following table contains information with respect to the named executive
officers concerning option exercises and stock vested in fiscal
2007.





Option
      Awards
            
            Stock
      AwardsName
            
            Number
      of Shares Acquired on Exercise
            
            Value
      Realized on Exercise
            
            Number
      of Shares Acquired on Vesting
            
            Value
      Realized on VestingD.
      Frank Harrison
            
            -
            
            -
            
            22,224
            
            $341,679Mark Dubberstein
            
            -
            
            -
            
            -
            
            -Zachary M. Graves
            
            -
            
            -
            
            -
            
            -Larry Bartlett
            
            -
            
            -
            
            -
            
            -Steven R. Starke
            
            -
            
            -
            
            -
            
            -





Nonqualified
Deferred Compensation





We do not
currently have in place any nonqualified deferred compensation
arrangements.





Pension
Benefits





We do not
currently offer any pension benefits.





Potential
Payments upon Termination or Change-in-Control





The
following table sets forth the potential payments due to our named executive
officers assuming the executive’s employment was terminated by us without cause
or by the executive for good reason or in the event of a change-in-control at
December 31, 2007. The termination events, including those upon change of
control, triggering payments or other benefits to our named executive officers
are described under the headings “Employment Agreements” below.





Termination
Following a Change of Control





Name
            
            Salary
      (1)
            
            Bonus
            
            Vesting
      of Restricted Stock (4)
            
            Excise
      Tax Gross-Up
            
            TotalD.
      Frank Harrison
            
            $1,350,000
            
            $1,031,250
      (2)
            
            $2,144,993
            
            $985,452
            
            $5,511,695Mark Dubberstein
            
            $975,000
            
            $262,500
      (2)
            
            $1,113,750
            
            $555,646
            
            $2,906,896Zachary M. Graves
            
            $975,000
            
            $465,000 (2)
            
            $1,559,250
            
            $696,663
            
            $3,695,913Larry Bartlett
            
            $675,000
            
            $150,000
      (3)
            
            $965,250
            
            $391,110
            
            $2,181,360Steven R. Starke
            
            $375,000
            
            $82,500
      (3)
            
            $322,988
            
            $201,466
            
            $981,954








(1)
            Calculated
      as an amount equal to three times the named executive officers’ highest
      paid annual base salary.


(2)
            Calculated
      as an amount equal to three times the named executive officers’
      average annual bonus for the last three years or such lesser number of
      years as the named executive officers may have been
    employed.


(3)
            Calculated
      as an amount equal to three times the named executive officer’s highest
      paid annual bonus during his employment with the
  Company.


(4)
            Calculated
      by multiplying the number of unvested shares of restricted stock by the
      closing price of our common stock on The NASDAQ Global Market on
      December 31, 2007, or $14.85.







Termination
Without Cause





Name
            
            Salary
      (1)
            
            Bonus (2)
            
            Vesting
      of Restricted Stock (3)
            
            Continued
      Benefit Plan Coverage (4)
            
            TotalD.
      Frank Harrison
            
            $1,200,000
            
            $343,750
            
            $2,144,993
            
            $14,982
            
            $3,703,725Mark Dubberstein
            
            $866,667
            
            $87,500
            
            $1,113,750
            
            $18,756
            
            $2,086,673Zachary M. Graves
            
            $866,667
            
            $155,000
            
            $1,559,250
            
            $18,756
            
            $2,599,673Larry Bartlett
            
            $600,000
            
            $37,500
            
            $965,250
            
            $18,756
            
            $1,621,506Steven R. Starke
            
            $333,333
            
            $23,750
            
            $322,988
            
            $16,468
            
            $696,539





(1)
            Calculated
      as an amount equal to the named executive officers’ base salary as in
      effect on the termination date continuing through the remaining term of
      each named executive officer’s
agreement.


(2)
            Calculated
      as the greater of any target bonus for the year of termination or the
      average of the immediately preceding two years’ annual incentive bonuses
      received by the named executive officer or such lesser number of years as
      the named executive officer may have been
  employed.


(3)
            Calculated
      by multiplying the number of unvested shares of restricted stock at
      December 31, 2007 by the closing price of our common stock on The NASDAQ
      Global Market on December 31, 2007, or
$14.85.


(4)
            Reflects
      the estimated cost to us to provide existing medical and dental benefits
      to each named executive officer for the time period remaining in each
      named executive officer’s
agreement.





-8-




Termination
Upon Death





In the
event of the death of our Chief Executive Officer, President, Chief Financial
Officer, Senior Vice President of Rig Operations or Chief Accounting Officer,
the executive’s beneficiary will receive the named executives’ base salary for a
period of 12 months and any benefits accrued through the date of death. At
December 31, 2007, the base salary of our (1) Chief Executive Officer was
$450,000, (2) President was $325,000, (3) Chief Financial Officer
was $325,000, (4) Senior Vice President of Rig Operations was $225,000, and
(5) Chief Accounting Officer was $125,000.





Termination
Upon Disability





In the
event of the disability of our Executive Officer, President, Chief Financial
Officer, Senior Vice President of Rig Operations or Chief Accounting Officer,
the executive will continue to receive his base salary through the remaining
term of the contract. Had the event occurred at December 31, 2007, our
Chief Executive Officer would be entitled to $1,200,000, our President would be
entitled to $866,667, our Chief Financial Officer would be entitled to $866,667,
our Senior Vice President of Rig Operations would be entitled to $600,000, and
our Chief Accounting Officer would be entitled to $333,333 over the remaining
term of the contracts.





Director
Compensation





The
following table contains information with respect to 2007 compensation of our
directors who served in such capacity during that year, except that the 2007
compensation of those directors who are also our named executive officers is
disclosed in the Summary Compensation Table above.





Director’s
Compensation Table for the Fiscal Year Ended December 31, 2007





Name
            
            Fees
      Earned or Paid in Cash
            
            Stock
      Awards (1)
            
            Option
      Awards (1)
            
            All
      Other Compensation
            
            TotalGary C. Hill
            
            $13,000
            
            $39,773
      (2)
            
            $26,500(2)
            
            -
            
            $79,273David L. Houston
            
            $13,000
            
            $44,170
      (3)
            
            $24,278
      (3)
            
            -
            
            $81,447Mike Liddell
            
            -
            
            -
            
            -
            
            -
            
            -William R. Snipes
            
            $14,000
            
            $39,773
      (2)
            
            $33,250(2)
            
            -
            
            $87,023


(1)
            Reflects
      the amount of expense recognized by our company for the fiscal year
      related to all outstanding equity awards for each named executive officer
      in accordance with SFAS No. 123 (R), disregarding any adjustments for
      potential forfeitures.


(2)
            In
      connection with the Exchange Offer, Messrs. Hill and Snipes were
      afforded the opportunity to make a private exchange of stock options for
      restricted stock. One restricted stock award was granted for every
      two shares of common stock underlying the options that were accepted for
      exchange and cancelled.   One-half of the restricted shares
      of our common stock underlying the restricted stock awards granted
      pursuant to the exchange vested on January 1, 2008, and the remaining
      shares vest on January 1, 2009, subject to earlier vesting or
      forfeiture in certain circumstances. Each of Messrs. Hill and Snipes
      elected to participate in the
exchange.


(3)
            Reflects
      shares of restricted stock received in May 2007 under our 2006 Equity
      Incentive Plan in exchange for stock options pursuant to the Exchange
      Offer described above.







Non-employee
directors are paid a monthly retainer of $1,000 and a per meeting attendance fee
of $500 and are reimbursed for all ordinary and necessary expenses incurred in
the conduct of our business. Historically, our non-employee directors received
grants of options to purchase 20,000 shares of our common stock under our 2006
Stock Incentive Plan. In January 2008, the Committee approved restricted stock
awards of 5,000 shares to each of Messrs. Hill, Snipes and Houston under our
2006 Stock Incentive Plan.  These shares of restricted stock vest in
two equal annual installments beginning on February 25, 2009, subject to earlier
vesting or forfeiture in certain circumstances.  These awards were
made in the discretion of the Committee to help incentivize these directors by
maintaining a comparable amount of unvested shares of restricted stock as they
had prior to recent vestings.  We anticipate that in the future our
non-employee directors will receive restricted stock awards, rather than
options, in such amounts that will be determined by the Committee in its
discretion.Members of our board of
directors who are also officers or employees of our company, including our named
executive officers, do not receive any additional compensation for their
services as directors.





2006
Stock Incentive Plan





Our board
of directors and a majority of our stockholders approved our 2006 Stock
Incentive Plan, which we refer to as the 2006 Plan, effective April 20,
2006. No further awards will be made under our 2005 Stock Incentive Plan
discussed below. The purpose of the 2006 Plan is to provide a means by which
eligible recipients of awards may be given an opportunity to benefit from
increases in value of our common stock through the granting of one or more of
the following awards: (1) incentive stock options, (2) nonstatutory
stock options, (3) restricted awards, (4) performance awards and (5)
stock appreciation rights.





The
purpose of the plan is to enable our company, and any of its affiliates, to
attract and retain the services of the types of employees, consultants and
directors who will contribute to our long range success and to provide
incentives that are linked directly to increases in share value that will inure
to the benefit of our stockholders.





Eligible
award recipients are employees, consultants and directors of our company and its
affiliates. Incentive stock options may be granted only to our employees. Awards
other than incentive stock options may be granted to employees, consultants and
directors. The shares that may be issued pursuant to awards consist of our
authorized but unissued common stock, and the maximum aggregate amount of such
common stock that may be issued upon exercise of all awards under the plan,
including incentive stock options, may not exceed 2,500,000 shares, subject to
adjustment to reflect certain corporate transactions or changes in our capital
structure.





In
February 2007, we granted 25,000 shares of restricted stock to each of
Messrs. Dubberstein, Graves and Bartlett, and 5,000 shares of restricted
stock to Mr. Starke.  In May 2007, pursuant to the terms of the
Exchange Offer, we granted (1) 100,000 shares of restricted stock to Mr.
Harrison, (2) 50,000 shares of restricted stock to Mr. Dubberstein, (3) 80,000
shares of restricted stock to Mr. Graves, (4) 40,000 shares of restricted stock
to Mr. Bartlett, (5) 16,750 shares to Mr. Starke, and (6) 10,000 shares of
restricted stock to each of Messrs. Hill, Houston and Snipes.  All of
these shares were issued in exchange for options to purchase shares of our
common stock as described above under the heading “Offer to Exchange Options for
Restricted Stock Awards.”  In January 2008, we granted
restricted stock awards of (1) 50,000 shares to Mr. Harrison, (2)
33,333 shares to Mr. Dubberstein, (3) 48,333 shares to Mr. Graves, (4)
28,333 shares to Mr. Bartlett, and (5) 10,042 shares to Mr. Starke. As
of April 28, 2008, no options to purchase shares of our common stock were
outstanding and 549,652 shares of restricted common stock were outstanding
under our 2006 Plan. There were 1,699,828 shares available for future grants
under our 2006 Plan as of April 28, 2008.





2005
Stock Incentive Plan





Our
2005 Stock Incentive Plan, which we refer to as the 2005 Plan, was adopted on
July 20, 2005 and amended on November 16, 2005. The purpose of the
2005 Plan was to enable us, and any of our affiliates, to attract and retain the
services of the types of employees, consultants and directors who would
contribute to our long-range success and to provide incentives which were linked
directly to increases in share value which will inure to the benefit of our
stockholders. The 2005 Plan provided a means by which eligible recipients of
awards may be given an opportunity to benefit from increases in value of our
common stock through the granting of incentive stock options and nonstatutory
stock options. Eligible award recipients under the 2005 Plan were our and our
affiliates’ employees, consultants and directors. Incentive stock options under
the 2005 Plan could be granted only to employees. Awards other than incentive
stock options under the 2005 Plan could be granted to employees, consultants and
directors. The shares that may be issued upon exercise of the options are from
authorized but unissued common stock, and the maximum aggregate amount of such
common stock which may be issued upon exercise of all awards under the plan,
including incentive stock options, could not exceed 1,000,000 shares, subject to
adjustment to reflect certain corporate transactions or changes in our capital
structure. Under the 2005 Plan, employee stock options generally became
exercisable in equal monthly installments over a three-year period, and all
options generally expire ten years after the date of grant.  As a
result of the Exchange Offer and the forfeiture of certain options, all options
granted pursuant to the 2005 Plan have been cancelled.  No further
awards will be made under this plan.





Liability
Insurance and Indemnification Agreements





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





Compensation
Committee Interlocks and Insider Participation





We
currently maintain a compensation committee.  The Committee was
established by our board of directors effective as of March 25,
2007. The Committee is composed of Messrs. Snipes (chair) and
Houston.


-9-




No member
of the Committee is or was during the fiscal year ended December 31, 2007
an officer or employee of us or any of our subsidiaries or had any relationship
requiring disclosure pursuant to Item 404 of Regulation S-K. None of
our executive officers served as a director or member of the Committee (or other
board committee performing similar functions or, in the absence of any such
committee, the entire board of directors) of another entity, one of whose
executive officers served on the Committee or as one of our
directors.


Item
12. Security Ownership of Certain Beneficial Owners and Management and Related
Stockholder Matters.







Equity
Compensation Plan Information





The
following table provides information as of December 31, 2007 with respect
to shares of our common stock that may be issued under our equity compensation
plans as of December 31, 2007.





Plan
      Category
            
            Number
      of Securities to be Issued Upon Exercise of Outstanding Options, Warrants
      and Rights
            
            Weighted
      Average Exercise Price Per Share of Outstanding Options, Warrants and
      Rights
            
            Number
      of Securities Remaining Available for Future Issuance Under Equity
      Compensation Plans (Excluding Securities Reflected in Column
      (a))(a)
            
            (b)
            
            (c)Equity
      Compensation plans approved by security holders
            
            20,000
            
            $26.14
            
            1,904,333Equity
      Compensation plans not approved by security holders
            
            -
            
            -
            
            -Total
            
            20,000
            
            $26.14
            
            1,904,333




(1)
            As
      of April 28, 2008, we had no options to purchase shares of our common
      stock outstanding.  As of April 28, 2008, we had issued 549,652
      shares of our restricted stock under the 2006 Plan.  The
      securities remaining available for future issuance reflect securities that
      may be issued under the 2006 Plan, as no more shares remain available for
      the grant of awards under the 2005
Plan.




Security
Ownership of Certain Beneficial Owners and Management





The following tables set forth as of
April 28, 2008 (unless otherwise specified) the number and percentage of shares
of our common stock beneficially owned by (1) each person known by us to
beneficially own more than 5% of the outstanding shares off our common stock,
and (2) each of our directors, each of our named executive officers and all of
our directors and named executive officers as a group.





Beneficial
ownership is determined in accordance with the rules of the
SEC.  Beneficial ownership is based upon the most recent Forms 3, 4
and 5 and Schedules 13D and 13G filings with the SEC and reports made directly
to us.  In computing the number of shares of our common stock
beneficially owned by a person and the beneficial ownership percentage of that
person, shares of our common stock subject to options held by that person that
are currently exercisable or exercisable within 60 days of April 28, 2008 are
deemed outstanding, but are not deemed outstanding for computing the percentage
ownership of any other person.  Percentage of beneficial ownership of
our common stock is based upon 26,269,961 shares of our common stock outstanding
as of April 28, 2008.  To our knowledge, except as set forth in the
footnotes to this table, the beneficial owners named in the table below have
sole voting and investment power with respect to all shares of capital stock
held by them.





Principal
Stockholders





Name
            
            Shares
      Beneficially Owned
            
            Percent
      Beneficially Owned5%
      StockholdersThird
      Avenue Management LLC (1)
              622
      Third Avenue
              32
      Floor
              New
      York, NY 10017
            
            6,166,451
            
            23.47%Royce
      & Associates, LLC (2)
              1414
      Avenue of the Americas
              New
      York, NY 10019
            
            2,043,176
            
            7.85%Dimensional
      Fund Advisors LP (3)
              1299
      Ocean Avenue
              Santa
      Monica, CA 90401
            
            1,746,309
            
            6.65%Eckert
      Corporation (4)
              100
      Union Avenue
              Cresskill,
      NJ 07626
            
            1,613,300
            
            6.14%Barclays
      Global Investors (Deutschland) AG (5)
              Apianstrasse
      6
              D-85774
              Unterfohring,
      Germany
            
            1,475,842
            
            5.62%








(1)
            Based
      solely upon information obtained from Schedule 13D/A filed with the
      SEC on April 8, 2008 on behalf of Third Avenue Management LLC, or Third
      Avenue. Third Avenue, in its capacity as investment advisor, has shared
      power to vote or to direct the vote with respect to 6,166,451 shares of
      our common stock and has shared power to dispose or to direct the
      disposition of 6,166,451 shares of our common stock. These shares are
      owned of record by clients of Third Avenue which have the right to
      receive, or the power to direct the receipt of, dividends from, or the
      proceeds from the sale of, these
shares.


(2)
            Based
      solely on information obtained from Schedule 13G filed with the SEC
      on January 26, 2008 on behalf of Royce & Associates, LLC, or Royce.
      Royce, in its capacity as investment advisor, has sole power to vote or to
      direct the vote with respect to 2,043,176 shares of our common stock and
      has sole power to dispose or to direct the disposition of 2,043,176 shares
      of our common stock.


(3)
            Based
      solely upon information obtained from Schedule 13G filed with the SEC
      on February 6, 2008 on behalf of Dimensional Fund Advisors LP, or
      Dimensional. Dimensional, in its capacity as investment advisor, has
      shared power to vote or to direct the vote with respect to 1,746,309
      shares of our common stock and has shared power to dispose or to direct
      the disposition of 1,746,309 shares of our common stock. These shares are
      owned of record by clients of Dimensional which have the right to receive,
      or the power to direct the receipt of, dividends from, or the proceeds
      from the sale of, these shares.


(4)
            Based
      solely upon information obtained from Schedule 13D/A filed with the
      SEC on April 25, 2008 by Alpine Associates, Alpine Partners, L.P., Alpine
      Associates II, L.P., Palisades Partners, L.P., Alpine Associates Offshore
      Fund Ltd., Alpine Associates Offshore Fund II Ltd., Alpine Institutional,
      L.P., Alpine Enhanced, L.P., Eckert Corporation, Victoria Eckert, Gordon
      A. Uehling, Jr., Arbitrage & Trading Management Company and Robert E.
      Zoellner.  The reporting parties have reported beneficial
      ownership of, in the aggregate, 1,613,300 shares of our common
      stock.  Eckert Corporation is the sole general partner of Alpine
      Associates, Alpine Partners, L.P., Alpine Associates II, L.P., Alpine
      Institutional, L.P. and Alpine Enhanced, L.P. and has sole voting and
      dispositive power with respect to 1,319,600 shares of our common stock and
      has shared voting and dispositive power with respect to 165,700 shares of
      our common stock, and may be deemed to be the beneficial owner of an
      aggregate of 1,485,300 shares of our common stock.  Victoria
      Eckert is the president, sole director and sole shareholder of Eckert
      Corporation and may be deemed to be the beneficial owner of 1,485,300
      shares of our common stock. Arbitrage & Trading Management Company, or
      which Robert E. Zoellner is the owner and operator, provides investment
      advisory services pursuant to advisory agreements to, but does not have
      discretion to manage, the investment activities of Alpine Associates and
      Alpine Partners, L.P.   Pursuant to advisory agreements,
      Arbitrage & Trading Management Company provides investment advisory
      services to, and has full discretion and authority to manage, the
      investment activities of Alpine Associates II, L.P., Palisades Partners,
      L.P., Alpine Associates Offshore Fund Ltd., Alpine Associates Offshore
      Fund II Ltd., Alpine Institutional, L.P. and Alpine Enhanced, L.P. and one
      managed account.  Mr. Zoellner is the spouse of Ms. Eckert. The
      sole general partner of Palisades Partners, L.P. is Gordon A. Uehling,
      Jr.


(5)
            Based
      solely upon information obtained from Schedule 13G filed with the SEC on
      February 5, 2008 by Barclays Global Investors, N.A., Barclays Global Fund
      Advisors, Barclays Global Investors, LTD, Barclays Global Investors Japan
      Trust and Banking Company Limited, Barclays Global Investors Japan
      Limited, Barclays Global Investors Canada Limited, Barclays Global
      Investors Australia Limited and Barclays Global Investors (Deutschland)
      AG. Barclays Global Investors (Deutschland) AG, as investment adviser,
      reported sole power to vote or to direct the vote with respect to
      1,475,843 shares of our common stock and sole power to dispose 1,475,843
      shares of our common stock.





-10-




Directors
and Named Executive Officers





Name
            
            Shares
      Beneficially Owned
            
            Percent
      Beneficially OwnedD.
      Frank Harrison (1)
            
            55,885
            
            *Gary C. Hill
      (2)
            
            5,000
            
            *David L. Houston
      (3)
            
            5,000
            
            *Mike Liddell
            
            -
            
            -William R. Snipes
      (4)
            
            5,000
            
            *Mark Dubberstein
      (5)
            
            -
            
            -Larry Bartlett
      (6)
            
            15,583
            
            *Zachary M. Graves
      (7)
            
            26,583
            
            *Steven R. Starke
      (8)
            
            5,523
            
            *Directors
      and executive officers as a group (9 persons) (9)
            
            118,574
            
            *




(1)
            Does
      not include 133,332 shares of restricted stock, none of which restrictions
      will lapse within 60 days of the record date except pursuant to a
      change of control or certain other events beyond the control of such
      individual.


(2)
            Does
      not include 10,000 shares of restricted stock, none of which restrictions
      will lapse within 60 days of the record date except pursuant to a
      change of control.


(3)
            Does
      not include 10,000 shares of restricted stock, none of which restrictions
      will lapse within 60 days of the record date except pursuant to a
      change of control.


(4)
            Does
      not include 10,000 shares of restricted stock, none of which restrictions
      will lapse within 60 days of the record date except pursuant to a
      change of control.


(5)
            Does
      not include 75,000 shares of restricted stock, none of which restrictions
      will lapse within 60 days of the record date except pursuant to a
      change of control or certain other events beyond the control of such
      individual.


(6)
            Does
      not include 65,000 shares of restricted stock, none of which restrictions
      will lapse within 60 days of the record date except pursuant to a
      change of control or certain other events beyond the control of such
      individual.


(7)
            Does
      not include 105,000 shares of restricted stock, none of which restrictions
      will lapse within 60 days of the record date except pursuant to a
      change of control or certain other events beyond the control of such
      individual.


(8)
            Does
      not include 21,750 shares of restricted stock, none of which restrictions
      will lapse within 60 days of the record date except pursuant to a
      change of control or certain other events beyond the control of such
      individual.


(9)
            Does
      not include 430,082 shares of restricted stock, none of which restrictions
      will lapse within 60 days of the record date except pursuant to a
      change of control and, in the case of our executive officers, upon certain
      other events beyond their control.


*      Less
than 1%.




Item
13. Certain Relationships and Related Transactions, and Director
Independence.





Review and Approval of Related Party
Transactions




It is our
policy that all employees and directors, as well as their family members, must
avoid any activity that is or has the appearance of conflicting with our
business interest. This policy is included in our Code of Business Conduct and
Ethics posted on our website. Each director and executive officer is instructed
to always inform the designated compliance officer when confronted with any
situation that may be perceived as a conflict of interest. Only our board of
directors or a committee consisting solely of independent directors may grant
waivers of the provisions of our Code of Business Conduct and Ethics for our
executive officers and directors. In addition, at least annually, each director
and executive officer completes a detailed questionnaire specifying any business
relationship that may give rise to a conflict of interest.





Under the
audit committee charter, the audit committee of our board of directors is
responsible for reviewing and monitoring compliance with our Code of Business
Conduct and Ethics and recommending any warranted changes to the board of
directors. In addition, our board of directors, and pursuant to its charter, our
audit committee, reviews and approves all relationships and transactions in
which we and our directors, director nominees and executive officers and their
immediate family members, as well as holders of more than 5% of any class of our
voting securities and their family members, have a direct or indirect material
interest. Our board of directors and our audit committee will approve only those
transactions that, in light of known circumstances, are consistent, or are not
inconsistent with, our best interests, as they determine in the good faith
exercise of their discretion.





Lease
of Space





The
Company has entered into five noncancelable operating leases with Grace
Properties, LLC, which we refer to as Grace Properties, that have expirations of
July 31, 2011.  Grace Properties is owned by Kim Snell, President of
Eagle Well Service, Inc. (d/b/a Bronco Energy Services), which we refer to as
Bronco Energy, a wholly owned subsidiary of the Company.  Related rent
expense was approximately $130,000 for the year ended December 31,
2007.




Drilling
Services





On
January 26, 2006, we entered into a term contract with Windsor Energy
Group, LLC, which we refer to as Windsor, a company controlled by an affiliate
of Wexford Capital LLC, which we refer to as Wexford.  Under this
agreement, we agreed to provide Windsor a drilling rig for a period of two
years. At the time this contract was entered into, we were an affiliate of
Wexford.  During 2007, we received $2.6 million from Windsor under
this contract.





Consulting Agreement with Michael O.
Thompson





Effective
February 28, 2006, Michael O. Thompson resigned from his positions as a
member of our board of directors. In connection with his resignation, we entered
into a consulting agreement with Mr. Thompson under which Mr. Thompson
has agreed to provide us with consulting services for a period of approximately
30 months. Although Mr. Thompson will not receive any additional
compensation for providing these services to us, stock options granted
previously to him under the 2005 Plan were allowed to continue to vest in
accordance with their terms.  Pursuant to the Exchange Offer, these
options were cancelled and Mr. Thompson was issued 10,000 shares of restricted
stock, of which, one-half vested on January 1, 2008, and the remaining shares
will vest on January 1, 2009, subject to earlier vesting or forfeiture in
certain circumstances.  The consulting agreement with
Mr. Thompson was approved by our board of directors, including the approval
of the three independent directors comprising our audit committee.





Purchase
of Workover Rigs





In September 2007, Bronco Energy
acquired three workover rigs and related equipment from Diamondback Energy
Services, LLC, an entity controlled by Wexford, for $3,000,000 on an arm’s
length basis.  At the time of such transaction, Wexford was no longer
an affiliate of ours.




-11-


Item 14.
Principal Accounting Fees and Services




Grant
Thornton LLP served as our independent auditor for fiscal 2007 and 2006.
Aggregate fees billed to us by Grant Thornton LLP for 2007 and 2006 were as
follows:


Fees
            2007
            
            2006Audit
      Fees (1)
            $343,979
            
            $401,747Audit
      Related Fees (2)
            $50,678
            
            —Tax
      Fees (3)
            $59,750
            
            $78,914All
      Other Fees
            —
            
            —Total
            $454,407
            
            $480,661




(1)
            Fees
      for audit service included billings for our annual audit, reviews of our
      quarterly reports, regulatory filings to the SEC, issuance of comfort
      letters and consents, Section 404 services, and out-of-pocket
      expenses associated with the services.(2)
            Audit
      related fees include fees for benefit plan audits, including out-of-pocket
      expenses.(3)
            Tax
      fees include fees for preparation of corporate returns, tax consultation
      and advice.





It is our
audit committee’s policy to pre-approve all audit, audit related and permissible
non-audit services rendered to us by our independent auditor. Consistent with
such policy, all of the fees listed above that we incurred for services rendered
by Grant Thornton LLP in fiscal 2006 and 2007 were pre-approved by our audit
committee. Non-audit services that received pre-approval in 2006 and 2007
include tax preparation, tax consultation and advice. The audit committee has
considered whether the provisions of the non-audit services in 2007 is
compatible with maintaining the independent auditors’ independence and concluded
that the payment of such fees would not prohibit Grant Thornton LLP from
maintaining its independence.





Grant
Thornton LLP has been selected by the audit committee as our independent
auditors for the fiscal year ending December 31, 2008.


-12-


PART
IV




Item 15.
Exhibits, Financial Statement Schedules.




(a)(3).
            Exhibits







Exhibit
No.                                                                Description








31.1
            Certification
      of Chief Executive Officer of Bronco Drilling Company, Inc. pursuant to
      Rule 13a-14(a) promulgated under the Securities Exchange Act of 1934, as
      amended.





31.2
            Certification
      of Chief Financial Officer of Bronco Drilling Company, Inc. pursuant to
      Rule 13a-14(a) promulgated under the Securities Exchange Act of 1934, as
      amended


-13-





SIGNATURES




Pursuant
to the requirements of Section 13 or 15(d) of the Securities Exchange Act
of 1934, Bronco Drilling Company, Inc. has duly caused this Amendment No. 1 to
its Annual Report on Form 10-K to be signed on its behalf by the undersigned,
thereunto duly authorized.




BRONCO DRILLING COMPANY, INC.Date:
      April 29, 2008
            By:
            /S/    D.
      FRANK
      HARRISOND.
      Frank Harrison
              Chairman
      and Chief Executive Officer







-14-