Exhibit 10.4

                                                        $10,000,000 Advance Note
                                                                November 3, 2003

                          THIRD MODIFICATION AGREEMENT
                          ----------------------------

This Third Modification Agreement ("Third Modification  Agreement") is effective
as of March 24,  2006.  The  parties  to the Third  Modification  Agreement  are
Natural  Gas  Services  Group,  Inc.  ("Borrower")  and  Western  National  Bank
("Lender").

                                    RECITALS

On November 3, 2003,  Borrower  executed  and  delivered  to Lender that certain
Advancing  Line of  Credit  Promissory  Note in the  original  principal  sum of
$10,000,000.00, bearing interest at the rate stated therein, with a stated final
maturity date of November 15, 2009, as modified in Modification  Agreement dated
December 15, 2004, and further modified in Second  Modification  Agreement dated
May 1, 2005 (the  "Note").  The Note was made  pursuant to that  certain  Second
Amended and  Restated  Loan  Agreement  dated  November 3, 2003,  as amended and
restated in that certain Third Amended and Restated Loan Agreement dated January
3, 2005,  and further  amended and restated in that certain  Fourth  Amended and
Restated Loan Agreement  dated March 14, 2005, as modified in that certain First
Modification  to Fourth Amended and Restated Loan  Agreement  dated May 1, 2005;
and further amended and restated in that certain Fifth Amended and Restated Loan
Agreement  dated  September 26, 2005;  and further  amended and restated in that
certain  Sixth Amended and Restated  Loan  Agreement  dated January 3, 2006 (the
"Loan Agreement").  All liens,  security interests and assignments  securing the
Note are collectively called the "Liens".  Terms defined in the Note or the Loan
Agreement and not otherwise  defined herein shall have the same meanings here as
in those documents.

Borrower now proposes to pay down a portion of the outstanding  principal amount
of the Note. In this regard,  Borrower and Lender have agreed to enter into this
Third Modification  Agreement (i) to modify the interest  provisions of the Note
to provide  for an  decrease  in the  interest  rate of  one-half of one percent
(.0.5%) and to eliminate  the interest  floor;  (ii) to modify the amount of the
monthly principal payments; and (iii) to ratify the Liens.

                                    AGREEMENT

1.  Modification  of Interest  Provision of the Note.  In lieu of the  following
provision which was contained in the Note:

         "...at a rate per  annum  which  shall  from day to day be equal to the
         lesser of (a) a rate per annum (the  "Established  Rate")  equal to the
         greater of (i)  one-half  percent  (0.5%) over the Prime Rate in effect
         from day to day, or (ii) five and one-quarter  percent (5.25%),  or (b)
         the Highest Lawful Rate, in each case calculated on the basis of actual
         days elapsed,  but computed as if each  calendar year  consisted of 360
         days." such provision of the Note is changed to read in its entirety as
         follows:




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         "...at a rate per  annum  which  shall  from day to day be equal to the
         lesser of (a) a rate per annum (the  "Established  Rate")  equal to the
         Prime Rate in effect from day to day, or (b) the Highest  Lawful  Rate,
         in each  case  calculated  on the  basis of actual  days  elapsed,  but
         computed as if each calendar year consisted of 360 days."

2.  Modification  of Payment  Provisions  of the Note.  In lieu of the following
provision which was contained in the fourth (4th) paragraph of the Note:

         "The principal of this Note shall be due and payable as follows:

         (a)      with respect to the principal  balance  outstanding under this
                  Note on December  15, 2004,  in  fifty-nine  (59)  consecutive
                  monthly installments of $166,666.67, with the first (1st) such
                  installment  being due and  payable on  December 5, 2004 and a
                  like installment being due and payable on the 15th day of each
                  succeeding month to and including October 15, 2009; plus

         (b)      1/60th of the sum of all  advances  made by Lender  under this
                  note after December 15, 2004 and prior to March 31, 2005 and a
                  like installment being due and payable on the 15th day of each
                  succeeding month to and including October 15, 2009; plus

         (c)      1/60th of the sum of all  advances  made by Lender  under this
                  note  after  April 1, 2005 and prior to June 30,  2005,  and a
                  like installment being due and payable on the 15th day of each
                  succeeding month to and including October 15, 2009; plus

         (d)      1/60th of the sum of all  advances  made by Lender  under this
                  note after July 1, 2005 and prior to September  30, 2005 and a
                  like installment being due and payable on the 15th day of each
                  succeeding month to and including October 15, 2009; plus

         (e)      1/60th of the sum of all  advances  made by Lender  under this
                  note after  October 1, 2005 and prior to December 15, 2005 and
                  a like  installment  being due and  payable on the 15th day of
                  each succeeding month to and including October 15, 2009; plus

         (f)      one  final  installment  in an amount  equal to all  remaining
                  unpaid  principal and accrued and unpaid  interest on the Note
                  shall be due and payable on November 15, 2009.

Interest,  computed on the unpaid balance of the Note,  shall be due and payable
monthly as it accrues, on the same dates as, but in addition to each installment
of principal." such provision of the Note is changed to read as follows:



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<PAGE>

         "The  principal of this Note shall be due and payable in (a) forty-four
         consecutive  monthly  installments  of $57,037.00,  with the first such
         installment  being  due and  payable  on  April  15,  2006,  and a like
         installment  being due and payable on the fifteenth (15th ) day of each
         succeeding  month to and including  October 15, 2009; and (b) one final
         installment  in an amount equal to all remaining  unpaid  principal and
         accrued  and unpaid  interest  on this Note shall be due and payable on
         November 15,  2009.  Interest,  computed on the unpaid  balance of this
         Note, shall be due and payable monthly as it accrues, on the same dates
         as, but in addition to each installment of principal."

3.  Ratification  of Liens.  Borrower  and Lender  further  agree that all Liens
securing  the Note  shall  continue  and  carry  forward  until the Note and all
indebtedness  evidenced  thereby is paid in full.  Borrower  further agrees that
such Liens are hereby ratified and affirmed as valid and subsisting  against the
collateral described therein,  and that this Third Modification  Agreement shall
in no  manner  vitiate,  affect  or  impair  the Note or the  Liens  (except  as
expressly  modified in this Third  Modification  Agreement)  and that such Liens
shall not in any manner be waived, released, altered or modified.

4. Miscellaneous.

         (a)      As modified  hereby,  the provisions of the Note and the Liens
                  shall  continue  in  full  force  and  effect,   and  Borrower
                  acknowledges  and affirms its liability to Lender  thereunder.
                  In  the  event  of  an   inconsistency   between   this  Third
                  Modification  Agreement  and the  terms  of the Note or of the
                  Liens, this Third Modification Agreement shall govern.

         (b)      Borrower hereby agrees to pay all costs and expenses  incurred
                  by Lender in connection with the execution and  administration
                  of this Third Modification Agreement.

         (c)      Any default by Borrower in the  performance of its obligations
                  herein contained shall constitute a default under the Note and
                  the Liens and shall allow Lender to exercise any or all of its
                  remedies  set  forth in such  Note  and  Liens or at law or in
                  equity.

         (d)      Lender does not, by its  execution of this Third  Modification
                  Agreement, waive any rights it may have against any person not
                  a party hereto.

         (e)      All terms, provisions,  covenants,  agreements, and conditions
                  of the Note and the Liens are  unchanged,  except as  provided
                  herein. Borrower agrees that this Third Modification Agreement
                  and all of the covenants and agreements contained herein shall
                  be binding  upon  Borrower  and shall  inure to the benefit of
                  Lender and each of their respective  heirs,  executors,  legal
                  representatives, successors, and permitted assigns. THIS THIRD
                  MODIFICATION  AGREEMENT REPRESENTS THE FINAL AGREEMENT BETWEEN
                  THE PARTIES AND MAY NOT BE  CONTRADICTED BY EVIDENCE OF PRIOR,
                  CONTEMPORANEOUS, OR SUBSEQUENT ORAL AGREEMENTS OF THE PARTIES.
                  THERE ARE NO UNWRITTEN ORAL AGREEMENTS BETWEEN THE PARTIES.



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                                    Borrower:
                                    ---------

                                    Natural Gas Services Group, Inc.

                                    By: /s/ Stephen C. Taylor
                                       -----------------------------------------
                                       Stephen C. Taylor, President

                                    Lender:
                                    -------

                                    Western National Bank

                                    By: /s/ Scott A. Lovett
                                       -----------------------------------------
                                       Scott A. Lovett, Executive Vice President


STATE OF TEXAS             ss.
                           ss.
COUNTY OF MIDLAND          ss.

         This  instrument  was  acknowledged  before  me on March 31,  2006,  by
Stephen C. Taylor,  President of Natural Gas  Services  Group,  Inc., a Colorado
corporation, on behalf of said corporation.



                                       -----------------------------------------
                                       Notary Public, State of Texas


STATE OF TEXAS             ss.
                           ss.
COUNTY OF MIDLAND          ss.

         This instrument was acknowledged  before me on March 31, 2006, by Scott
A. Lovett, Executive Vice President of Western National Bank, a national banking
association, on behalf of said association.



                                       -----------------------------------------
                                       Notary Public, State of Texas







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