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Exhibit 10.35

                     THIRD AMENDMENT TO AMENDED AND RESTATED
                          CREDIT AND SECURITY AGREEMENT

         This Amendment, dated as of September 30, 2003, is made by and between
Strata Directional Technology, Inc., a Texas corporation (the "Borrower"), and
Wells Fargo Credit, Inc., a Minnesota corporation (the "Lender").

                                    RECITALS

         The Borrower and the Lender are parties to an Amended and Restated
Credit and Security Agreement dated as of February 1, 2002, as previously
amended (the "Credit Agreement"). Capitalized terms used in these recitals have
the meanings given to them in the Credit Agreement unless otherwise specified.

         The Borrower has requested that certain amendments be made to the
Credit Agreement, which the Lender is willing to make pursuant to the terms and
conditions set forth herein.

         NOW, THEREFORE, in consideration of the premises and of the mutual
covenants and agreements herein contained, it is agreed as follows:

         1. DEFINED TERMS. Capitalized terms used in this Amendment which are
defined in the Credit Agreement shall have the same meanings as defined therein,
unless otherwise defined herein. In addition, Section 1.1 of the Credit
Agreement is amended by adding or amending, as the case may be, the following
definitions:

                  "Allis-Chalmers Net Income" means the consolidated Net Income
         of Allis-Chalmers (but excluding the effects of any subsidiaries of
         Allis-Chalmers other than the Borrower, Jens, and MCA), measured before
         any paid-in-kind dividends and before the Jens minority interest.

                  "Maturity Date" means February 1, 2005; provided, however,
         that at the Lender's option, which option may be exercised by written
         notice to the Borrower at any time prior to February 1, 2005, "Maturity
         Date" shall mean February 1, 2006.



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                  "Margin" means two and one-half percent (2.5%); provided,
         however, that so long as no Default Period then exists, Margin shall be
         decreased by one-half of one percent (0.5%) each year that
         Allis-Chalmers Net Income for any fiscal year (beginning with the
         fiscal year ending December 31, 2003) exceeds $1,000,000, effective on
         the first day of the month following the month in which the Borrower
         delivers to the Lender audited financial statements of Allis-Chalmers
         evidencing, to the Lender's satisfaction, that such Net Income has been
         achieved; and provided further that in no case shall Margin be reduced
         below one percent (1.0%).

                  "Revolving Floating Rate" means an annual rate equal to the
         sum of the Base Rate plus the Margin, which annual rate shall change
         when and as the Base Rate or the Margin changes.

                  "Target" means Target Energy Inc, a Delaware corporation.

                  "Term Floating Rate" means an annual rate equal to the sum of
         the Base Rate plus the Margin, which annual rate shall change when and
         as the Base Rate or the Margin changes.

         2. AUDIT FEE RATE. Section 2.9(e) of the Credit Agreement is hereby
amended by replacing the figure "$750" with the figure "$800".

         3. DEBT SERVICE COVERAGE RATIO. Section 6.12 of the Credit Agreement is
hereby amended in its entirety to read as follows:

                  "Section 6.12 MINIMUM DEBT SERVICE COVERAGE RATIO.

                           (a)      [Reserved.]

                           (b) Allis-Chalmers will maintain, for each period
                  described below, its Debt Service Coverage Ratio at not less
                  than the amount set forth opposite such period:

                                                   MINIMUM DEBT SERVICE COVERAGE
                  PERIOD                                    RATIO
--------------------------------------------------- ----------------------------
  Nine months ending September 30, 2003                       1.10 to 1
  Twelve months ending December 31, 2003                      1.20 to 1
    Three months ending March 31, 2004                        0.90 to 1
     Six months ending June 30, 2004                          1.00 to 1
  Nine months ending September 30, 2004                       1.10 to 1
  Twelve months ending December 31, 2004                      1.20 to 1"

         4. NET INCOME. Section 6.13 of the Credit Agreement is hereby amended
in its entirety to read as follows:

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                  "Section 6.13 MINIMUM YEAR-TO-DATE NET INCOME. Borrower will
         achieve, as of each period described below, Net Income of not less than
         the amount set forth opposite such period:

                  PERIOD                         MINIMUM YEAR-TO-DATE NET INCOME
----------------------------------------------- --------------------------------
     Seven months ending July 31, 2003                      $225,000
    Eight months ending August 31, 2003                     $260,000
   Nine months ending September 30, 2003                    $300,000
    Ten months ending October 31, 2003                      $275,000
  Eleven months ending November 30, 2003                    $250,000
  Twelve months ending December 31, 2003                    $225,000
       Month ending January 31, 2004                         $50,000
    Two months ending February 28, 2004                     $100,000
    Three months ending March 31, 2004                      $150,000
     Four months ending April 30, 2004                      $200,000
      Five months ending May 31, 2004                       $250,000
      Six months ending June 30, 2004                       $300,000
     Seven months ending July 31, 2004                      $350,000
    Eight months ending August 31, 2004                     $400,000
   Nine months ending September 30, 2004                    $450,000
    Ten months ending October 31, 2004                      $500,000
  Eleven months ending November 30, 2004                    $550,000
  Twelve months ending December 31, 2004                    $600,000"

         5. ALLOWANCE FOR DIVIDENDS. Section 7.5 of the Credit Agreement is
hereby amended in its entirety to read as follows:

                  "Section 7.5 DIVIDENDS. The Borrower will not declare or pay
         any dividends (other than dividends payable solely in stock of the
         Borrower) on any class of its stock or make any payment on account of
         the purchase, redemption or other retirement of any shares of such
         stock or make any distribution in respect thereof, either directly or
         indirectly; provided, however, that so long as no Default Period then
         exists, the Borrower may make cash distributions to Allis-Chalmers in
         an amount not to exceed in any month, the cash amount received by the
         Borrower during that month as proceeds of Equipment leased to Target,
         which distributions shall not exceed $1,000,000 in the aggregate during
         the term of this Agreement."

         6. CAPITAL EXPENDITURES. Section 7.10 of the Credit Agreement is hereby
amended in its entirety to read as follows:

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                  "Section 7.10 CAPITAL EXPENDITURES. The Borrower will not
         incur or contract to incur Capital Expenditures of more than $50,000 in
         the aggregate in any fiscal year."

         7. NO OTHER CHANGES. Except as explicitly amended by this Amendment,
all of the terms and conditions of the Credit Agreement shall remain in full
force and effect and shall apply to any advance or letter of credit thereunder.

         8. WAIVER OF DEFAULTS. The Borrower is in default of the following
provisions of the Credit Agreement (collectively, the "Existing Defaults"):
Various subsections of Section 6.1 through July 31, 2003; Section 6.12(a) and
(b) for June 30, 2002, September 30, 2002, and December 31, 2002; Section 6.13
for various periods during the fiscal year ended December 31, 2002; Sections 7.2
and 7.4 as a result of intercompany loans to and from Jens during a Default
Period; Section 7.6 as a result of the lease of certain Equipment to Target
without the Lender's prior written consent; and Sections 8.1(p) and 8.1(q) as a
result of defaults in existence as of the date of this Agreement under the
Strata Credit Agreement and the Borrower's agreements with Energy Group and
Energy Capital. Upon the terms and subject to the conditions set forth in this
Amendment, the Lender hereby waives the Existing Defaults. This waiver shall be
effective only in this specific instance and for the specific purpose for which
it is given, and this waiver shall not entitle the Borrower to any other or
further waiver in any similar or other circumstances.

         9. CONDITIONS PRECEDENT. This Amendment, including the waiver set forth
in paragraph 8 hereof, shall be effective when the Lender shall have received an
executed original hereof, together with each of the following, each in substance
and form acceptable to the Lender in its sole discretion:

                  (a) The Acknowledgment and Agreement of Guarantors set forth
         at the end of this Amendment, duly executed by each Guarantor.

                  (b) A Certificate of the Secretary of the Borrower certifying
         as to the resolutions of the board of directors of the Borrower
         approving the execution and delivery of this Amendment.

                  (c) Completion of all conditions precedent to effectiveness of
         the Second Amendment to the Jens Credit Agreement.

                  (d) Such other matters as the Lender may require.

         10. REPRESENTATIONS AND WARRANTIES. The Borrower hereby represents and
warrants to the Lender as follows:

                  (a) The Borrower has all requisite power and authority to
         execute this Amendment and to perform all of its obligations hereunder,
         and this Amendment has been duly executed and delivered by the Borrower
         and constitutes the legal, valid and binding obligation of the
         Borrower, enforceable in accordance with its terms.

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                  (b) The execution, delivery and performance by the Borrower of
         this Amendment have been duly authorized by all necessary corporate
         action and do not (i) require any authorization, consent or approval by
         any governmental department, commission, board, bureau, agency or
         instrumentality, domestic or foreign, (ii) violate any provision of any
         law, rule or regulation or of any order, writ, injunction or decree
         presently in effect, having applicability to the Borrower, or the
         articles of incorporation or by-laws of the Borrower, or (iii) result
         in a breach of or constitute a default under any indenture or loan or
         credit agreement or any other agreement, lease or instrument to which
         the Borrower is a party or by which it or its properties may be bound
         or affected.

                  (c) All of the representations and warranties contained in
         Article V of the Credit Agreement are correct on and as of the date
         hereof as though made on and as of such date, except to the extent that
         such representations and warranties relate solely to an earlier date.

         11. NO OTHER WAIVER. he execution of this Amendment and acceptance of
any documents related hereto shall not be deemed to be a waiver of any Default
or Event of Default under the Credit Agreement or breach, default or event of
default under any Security Document or other document held by the Lender,
whether or not known to the Lender and whether or not existing on the date of
this Amendment.

         12. RELEASE. The Borrower, and each Guarantor by signing the
Acknowledgment and Agreement of Guarantors set forth below, each hereby
absolutely and unconditionally releases and forever discharges the Lender, and
any and all participants, parent corporations, subsidiary corporations,
affiliated corporations, insurers, indemnitors, successors and assigns thereof,
together with all of the present and former directors, officers, agents and
employees of any of the foregoing, from any and all claims, demands or causes of
action of any kind, nature or description, whether arising in law or equity or
upon contract or tort or under any state or federal law or otherwise, which the
Borrower or such Guarantor has had, now has or has made claim to have against
any such person for or by reason of any act, omission, matter, cause or thing
whatsoever arising from the beginning of time to and including the date of this
Amendment, whether such claims, demands and causes of action are matured or
unmatured or known or unknown.

         13. COSTS AND EXPENSES. The Borrower hereby reaffirms its agreement
under the Credit Agreement to pay or reimburse the Lender on demand for all
costs and expenses incurred by the Lender in connection with the Loan Documents,
including without limitation all reasonable fees and disbursements of legal
counsel. Without limiting the generality of the foregoing, the Borrower
specifically agrees to pay all fees and disbursements of counsel to the Lender
for the services performed by such counsel in connection with the preparation of
this Amendment and the documents and instruments incidental hereto. The Borrower
hereby agrees that the Lender may, at any time or from time to time in its sole
discretion and without further authorization by the Borrower, make a loan to the
Borrower under the Credit Agreement, or apply the proceeds of any loan, for the
purpose of paying any such fees, disbursements, costs and expenses.

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         14. MISCELLANEOUS. This Amendment and the Acknowledgment and Agreement
of Guarantors may be executed in any number of counterparts, each of which when
so executed and delivered shall be deemed an original and all of which
counterparts, taken together, shall constitute one and the same instrument.

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

WELLS FARGO CREDIT, INC.                     STRATA DIRECTIONAL TECHNOLOGY, INC.

By /s/ Michelle Salisbury                    By  /s/ Munawar Hidayatallah
   ------------------------------                ------------------------------
   Michelle Salisbury, Vice President            Munawar Hidayatallah
                                                 Chairman of the Board and
                                                 Chief Executive Officer

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                   ACKNOWLEDGMENT AND AGREEMENT OF GUARANTORS

         The undersigned, each a guarantor of the indebtedness of Strata
Directional Technology, Inc. (the "Borrower") to Wells Fargo Credit, Inc. (the
"Lender") pursuant to a separate Guaranty each dated as of February 1, 2002
(each, a "Guaranty"), hereby (i) acknowledges receipt of the foregoing
Amendment; (ii) consents to the terms (including without limitation the release
set forth in paragraph 12 of the Amendment) and execution thereof; (iii)
reaffirms his or its obligations to the Lender pursuant to the terms of his or
its Guaranty; and (iv) acknowledges that the Lender may amend, restate, extend,
renew or otherwise modify the Credit Agreement and any indebtedness or agreement
of the Borrower, or enter into any agreement or extend additional or other
credit accommodations, without notifying or obtaining the consent of the
undersigned and without impairing the liability of the undersigned under his or
its Guaranty for all of the Borrower's present and future indebtedness to the
Lender.

                                          /s/ Munawar Hidayattah
                                          --------------------------------------
                                          Munawar Hidayatallah

                                          JENS' OIL FIELD SERVICE, INC.

                                          By /s/ Munawar Hidayattah
                                             -----------------------------------
                                             Munawar Hidayatallah
                                             Chairman of the Board and
                                             Chief Executive Officer

                                          ALLIS-CHALMERS CORPORATION

                                          By /s/ Munawar Hidayatallah
                                             -----------------------------------
                                             Munawar Hidayatallah
                                             Chairman of the Board and
                                             Chief Executive Officer