**UNITED
      STATES**


**SECURITIES
      AND EXCHANGE COMMISSION**


**Washington,
      D.C. 20549**













**FORM
      10-Q**



















**(Mark
      One)**


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





**For
      the quarterly period ended September 30, 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,
      OK 73013**


**(Address
      of principal executive offices) (Zip Code)**





**(405)
      242-4444**


**(Registrant’s
      telephone number, including area code)**







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 whether the registrant is a large accelerated filer, an
      accelerated filer, or a non-accelerated filer. See definition of “accelerated
      filer and large accelerated filer” in rule 12b-2 of the Exchange Act. (Check
      one):





Large
      accelerated filer  ̈ Accelerated
      filer x Non-accelerated
      filer  ̈





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





As
      of
      November 1, 2007, 26,030,552 shares of common stock were
      outstanding.




*Table
            of Contents*
   **BRONCO
        DRILLING COMPANY, INC.**
 
 **INDEX**
 
 **Page****PART
                  I—FINANCIAL INFORMATION****Item 1.**
              
              **Financial
                  Statements****Bronco
                  Drilling Company, Inc.:**Consolidated
                  Balance Sheets as of September
                  30, 2007 (unaudited) and December 31, 2006
              
              3Consolidated
                  Statements of Operations for the three months and nine months ended
                  September 30, 2007 and 2006 (unaudited)
              
              4Consolidated
                  Statement of Stockholders’ Equity for the nine months ended September 30,
                  2007 (unaudited)
              
              5Consolidated
                  Statements of Cash Flows for the nine months ended September 30,
                  2007 and
                  2006 (unaudited)
              
              6Notes
                  to Consolidated Financial Statements (unaudited)
              
              7**Item 2.**
              
              **Management’s
                  Discussion and Analysis of Financial Condition and Results of
                  Operations**
              
              13**Item 3.**
              
              **Quantitative
                  and Qualitative Disclosures about Market
                  Risks**
              
              17**Item 4.**
              
              **Controls
                  and Procedures**
              
              17**PART
                  II—OTHER INFORMATION****Item 1.**
              
              **Legal
                  Proceedings**
              
              18**Item 1A.**
              
              **Risk
                  Factors**
              
              18**Item 2.**
              
              **Unregistered
                  Sale of Equity Securities and Use of Proceeds**
              
              18**Item 3.**
              
              **Defaults
                  Upon Senior Securities**
              
              18**Item 4.**
              
              **Submission
                  of Matters to Vote of Security
                  Holders**
              
              18**Item 5.**
              
              **Other
                  Information**
              
              18**Item 6.**
              
              **Exhibits**
              
              19**Signatures**
              
              20**Index
                  to Exhibits**
              
              21





-2-
 *Table
          of Contents*




**PART
      I: FINANCIAL INFORMATION**


**Item 1.
        Financial Statements**




**Bronco
                Drilling Company, Inc. and
                Subsidiaries**CONSOLIDATED
                BALANCE SHEETS(Amounts
                in thousands except share par value)**September
                30,**
            
            **December
                31,****2007**
            
            **2006****ASSETS**
            
            **(Unaudited)**CURRENT
                ASSETSCash
                and cash equivalents
            
            $
            1,671
            
            $
            10,608ReceivablesTrade
                and other, net of allowance for doubtful accounts of$714
                and $400 in 2007 and 2006, respectively
            
            
            66,208
            
            
            60,282Contract
                drilling in progress
            
            
            1,410
            
            
            1,989Income
                tax receivable
            
            
            1,820
            
            
            -Current
                deferred income taxes
            
            
            220
            
            
            155Prepaid
                expenses
            
            
            1,158
            
            
            338Total
                current assets
            
            
            72,487
            
            
            73,372PROPERTY
                AND EQUIPMENT - AT COSTDrilling
                rigs and related equipment
            
            
            477,558
            
            
            396,499Transportation,
                office and other equipment
            
            
            40,678
            
            
            29,928518,236
            
            
            426,427Less
                accumulated depreciation
            
            
            73,289
            
            
            44,505444,947
            
            
            381,922OTHER
                ASSETSGoodwill
            
            
            21,936
            
            
            21,280Restricted
                cash and deposit
            
            
            2,745
            
            
            2,600Intangibles,
                net, and other
            
            
            5,620
            
            
            3,31430,301
            
            
            27,194$
            547,735
            
            $
            482,488**LIABILITIES
                AND STOCKHOLDERS' EQUITY**CURRENT
                LIABILITIESAccounts
                payable
            
            $
            19,557
            
            $
            19,677Accrued
                liabilitiesPayroll
                related
            
            
            7,223
            
            
            7,587Deferred
                revenue and other
            
            
            3,869
            
            
            4,180Income
                tax payable
            
            
            -
            
            
            3,724Current
                maturities of long-term debt
            
            
            1,034
            
            
            636Total
                current liabilities
            
            
            31,683
            
            
            35,804LONG-TERM
                DEBT, less current maturities
            
            
            61,639
            
            
            64,091DEFERRED
                INCOME TAXES
            
            
            65,459
            
            
            42,608COMMITMENTS
                AND CONTINGENCIES (Note 6)STOCKHOLDERS'
                EQUITYCommon
                stock, $.01 par value, 100,000 shares authorized;26,031
                and 24,938 shares issued and outstandingat
                September 30, 2007 and December 31, 2006
            
            
            261
            
            
            250Additional
                paid-in capital
            
            
            297,144
            
            
            279,355Retained
                earnings
            
            
            91,549
            
            
            60,380Total
                stockholders' equity
            
            
            388,954
            
            
            339,985$
            547,735
            
            $
            482,488The
                accompanying notes are an integral part of these
                statements.


-3-
 *Table
          of Contents*


**Bronco
                Drilling Company, Inc. and Subsidiaries**CONSOLIDATED
                STATEMENTS OF OPERATIONS(Amounts
                in thousands, except per share amounts)**Three
                Months Ended September 30,**
            
            **Nine
                Months Ended September 30,****2007**
            
            **2006**
            
            **2007**
            
            **2006****(Unaudited)**
            
            **(Unaudited)**REVENUESContract
                drilling revenues, including0%,
                4%, 1% and 4% to related parties
            
            
            
            
            $
            70,441
            
            $
            79,814
            
            $
            214,311
            
            $
            203,351Well
                service
            
            
            
            
            
            5,845
            
            
            -
            
            
            15,676
            
            
            -76,286
            
            
            79,814
            
            
            229,987
            
            
            203,351EXPENSESContract
                drilling
            
            
            
            
            
            39,135
            
            
            38,586
            
            
            120,448
            
            
            99,481Well
                service
            
            
            
            
            
            3,931
            
            
            -
            
            
            9,853
            
            
            -Depreciation
                and amortization
            
            
            
            
            
            9,219
            
            
            8,134
            
            
            31,317
            
            
            21,119General
                and administrative
            
            
            
            
            
            5,353
            
            
            4,691
            
            
            15,444
            
            
            11,74157,638
            
            
            51,411
            
            
            177,062
            
            
            132,341Income
                from operations
            
            
            
            
            
            18,648
            
            
            28,403
            
            
            52,925
            
            
            71,010OTHER
                INCOME (EXPENSE)Interest
                expense
            
            
            
            
            
            (1,009
            )
            
            (526
            )
            
            (3,071
            )
            
            (647
            )Loss
                from early extinguishment of debt
            
            
            
            
            
            -
            
            
            -
            
            
            -
            
            
            (1,000
            )Interest
                income
            
            
            
            
            
            366
            
            
            1
            
            
            617
            
            
            123Other
            
            
            
            
            
            72
            
            
            54
            
            
            238
            
            
            185(571
            )
            
            (471
            )
            
            (2,216
            )
            
            (1,339
            )Income
                before income taxes
            
            
            
            
            
            18,077
            
            
            27,932
            
            
            50,709
            
            
            69,671Income
                tax expense
            
            7,009
            
            
            10,527
            
            
            19,540
            
            
            26,190NET
                INCOME
            
            
            
            
            $
            11,068
            
            $
            17,405
            
            $
            31,169
            
            $
            43,481Income
                per common share-Basic
            $
            0.43
            
            $
            0.70
            
            $
            1.20
            
            $
            1.78Income
                per common share-Diluted
            $
            0.42
            
            $
            0.70
            
            $
            1.20
            
            $
            1.77Weighted
                average number of shares outstanding-Basic
            
            26,025
            
            
            24,940
            
            
            25,984
            
            
            24,467Weighted
                average number of shares outstanding-Diluted
            
            26,126
            
            
            24,974
            
            
            26,064
            
            
            24,505The
                accompanying notes are an integral part of these
                statements.






-4-
 *Table
          of Contents*


**Bronco
                  Drilling Company, Inc.**CONSOLIDATED
                  STATEMENT OF STOCKHOLDERS' EQUITY(Amounts
                  in thousands)For
                  the nine-months ended September 30, 2007(Unaudited)**Additional**
              
              
              
              **Total****Common**
              
              **Common**
              
              **Paid
                  In**
              
              **Retained**
              
              **Stockholders'****Shares**
              
              **Amount**
              
              **Capital**
              
              **Earnings**
              
              **Equity**Balance
                  as of January 1, 2007
              
              
              24,938
              
              $
              250
              
              $
              279,355
              
              $
              60,380
              
              $
              339,985Stock
                  issued in acquisition
              
              
              1,070
              
              
              10
              
              
              15,114
              
              
              -
              
              
              15,124Net
                  income
              
              
              -
              
              
              -
              
              
              -
              
              
              31,169
              
              
              31,169Stock
                  compensation
              
              
              23
              
              
              1
              
              
              2,675
              
              
              -
              
              
              2,676Balance
                  as of September 30, 2007
              
              
              26,031
              
              $
              261
              
              $
              297,144
              
              $
              91,549
              
              $
              388,954The
                  accompanying notes are an integral part of these
                  statements.






-5-
 *Table
          of Contents*




**Bronco
                  Drilling Company, Inc. and Subsidiaries**CONSOLIDATED
                  STATEMENTS OF CASH FLOWS(Amounts
                  in thousands)**Nine
                  Months Ended September 30,****2007**
              
              **2006****(Unaudited)**Cash
                  flows from operating activities:Net
                  income
              
              $
              31,169
              
              $
              43,481Adjustments
                  to reconcile net income to net cashprovided
                  by operating activities:Depreciation
                  and amortization
              
              
              31,758
              
              
              21,309Bad
                  Debt Expense
              
              
              2,061
              
              
              4Gain
                  on sale of assets
              
              
              (1,189
              )
              
              (1,501
              )Write
                  off of debt issue costs
              
              
              -
              
              
              267Stock
                  compensation
              
              
              2,676
              
              
              2,073Provision
                  for deferred income taxes
              
              
              15,077
              
              
              10,859Changes
                  in current assets and liabilities, net of assets and liabilities
                  of
                  business acquired:Receivables
              
              
              (6,291
              )
              
              (23,576
              )Contract
                  drilling in progress
              
              
              579
              
              
              (1,588
              )Prepaid
                  expenses
              
              
              (629
              )
              
              (886
              )Other
                  assets
              
              
              (272
              )
              
              223Accounts
                  payable
              
              
              (12,529
              )
              
              (3,401
              )Accrued
                  expenses
              
              
              (675
              )
              
              3,727Income
                  taxes payable
              
              
              (5,545
              )
              
              4,376Net
                  cash provided by operating activities
              
              
              56,190
              
              
              55,367Cash
                  flows from investing activities:Restricted
                  cash account
              
              
              -
              
              
              (47
              )Business
                  acquisitions, net of cash acquired
              
              
              (2,306
              )
              
              (17,048
              )Proceeds
                  from sale of asset
              
              
              3,492
              
              
              3,086Purchase
                  of property and equipment
              
              
              (54,094
              )
              
              (98,924
              )Net
                  cash used in investing activities
              
              
              (52,908
              )
              
              (112,933
              )Cash
                  flows from financing activities:Proceeds
                  from borrowings
              
              
              12,000
              
              
              44,000Payments
                  of debt
              
              
              (24,219
              )
              
              (34,746
              )Debt
                  issue costs
              
              
              -
              
              
              (1,647
              )Proceeds
                  from sale of common stock, netof
                  offering costs of $577
              
              
              -
              
              
              36,229Net
                  cash (used in) provided by financing activities
              
              
              (12,219
              )
              
              43,836Net
                  decrease in cash and cash equivalents
              
              
              (8,937
              )
              
              (13,730
              )Beginning
                  cash and cash equivalents
              
              
              10,608
              
              
              17,039Ending
                  cash and cash equivalents
              
              $
              1,671
              
              $
              3,309Supplementary
                  disclosure of cash flow information:Interest
                  paid, net of amount capitalized
              
              $
              2,831
              
              $
              -Income
                  taxes paid
              
              
              10,005
              
              
              10,955Supplementary
                  disclosure of non-cash investing and financing:Liabilities
                  assumed in acquisition
              
              
              8,527
              
              
              -Common
                  stock issued for acquisition
              
              
              15,124
              
              
              1,816Debt
                  assumed in acquisition
              
              
              6,516
              
              
              -Note
                  issued for acquisition of property and equipment
              
              
              3,649
              
              
              3,241The
                  accompanying notes are an integral part of these
                  statements.
 
 -6-
 *Table
            of Contents*




****Bronco
      Drilling Company, Inc. and
      Subsidiaries****


NOTES
      TO
      CONSOLIDATED FINANCIAL STATEMENTS


(Unaudited)
 ($
        Amounts in thousands, except per share and share amounts)
 
 **1.
        Organization and Summary of Significant Accounting
        Policies**
 
 *Unless
        the context requires otherwise, references in this quarterly report to “Bronco,”
the “Company,” “we,” “us,” and “our” are to Bronco Drilling Company, Inc., a
        Delaware corporation, and its consolidated subsidiaries.*
 
 *Business
        and Principles of Consolidation*
  Bronco
        Drilling Company, Inc., a Delaware corporation, provides contract land drilling
        and workover services to oil and natural gas exploration and production
        companies, primarily in Oklahoma and Texas. The accompanying consolidated
        financial statements include the Company’s accounts and the accounts of its
        wholly owned subsidiaries. All intercompany accounts and transactions have
        been
        eliminated in consolidation.
 
 The
        Company has prepared the accompanying unaudited consolidated financial
        statements and related notes in accordance with accounting principles generally
        accepted in the United States of America for interim financial information
        and
        with the instructions of Form 10-Q and Regulation S-X. In preparing the
        financial statements, the Company made various estimates and assumptions
        that
        affect the amounts of assets and liabilities the Company reports as of the
        dates
        of the balance sheets and amounts the Company reports for the periods shown
        in
        the consolidated statements of operations, stockholders’ equity and cash flows.
        The Company’s actual results could differ significantly from those estimates.
        Material estimates that are particularly susceptible to significant changes
        in
        the near term relate to the Company’s recognition of revenues and accrued
        expenses, estimate of the allowance for doubtful accounts, estimate of asset
        impairments, estimate of deferred taxes and determination of depreciation
        and
        amortization expense.
 
 In
        management’s opinion, the accompanying unaudited consolidated financial
        statements contain all adjustments (consisting of normal recurring accruals)
        necessary to present fairly the financial position of the Company as of
        September 30, 2007, the related results of operations for the three months
        and
        nine months ended September 30, 2007 and 2006 and the cash flows for the
        nine
        months ended September 30, 2007 and 2006. The information included in this
        Quarterly Report on Form 10-Q should be read in conjunction with the Company’s
        Annual Report on Form 10-K for the year ended December 31, 2006.
 
 The
        results of operations for the three months and nine months ended September
        30,
        2007 are not necessarily an indication of the results expected for the full
        year.
 
 A
        summary
        of the significant accounting policies consistently applied in the preparation
        of the accompanying consolidated financial statements follows.
 
 *Cash
        and Cash Equivalents*
 
 The
        Company considers all highly liquid debt instruments purchased with a maturity
        of three months or less and money market mutual funds to be cash
        equivalents.
 
 The
        Company maintains its cash and cash equivalents in accounts and instruments
        which may not be federally insured. The Company has not experienced any losses
        in such accounts and believes it is not exposed to any significant credit
        risks
        on cash and cash equivalents.
  *Property
        and Equipment*
 
 Property
        and equipment, including renewals and betterments, are capitalized and stated
        at
        cost, while maintenance and repairs are expensed currently. Assets are
        depreciated on a straight-line basis. The depreciable lives of drilling and
        workover rigs and related equipment are three to 15 years. The Company made
        an
        adjustment of $2,065 to reduce depreciation expense in the third quarter.
        The
        adjustment was due to the use of an incorrect depreciable life for certain
        rig
        components that were transferred between working rigs and the yard, which
        resulted in an overstatement of depreciation expense and accumulated
        depreciation of $1,245 during 2006 and $821 during the first quarter of 2007.
        The Company does not believe this adjustment was material to the 2006 annual
        financial statements and does not expect it to be material to the financial
        statements for the year ended December 31, 2007. The depreciable life of
        other equipment is three years. Depreciation is not commenced until acquired
        or
        refurbished rigs are placed in service. Once placed in service, depreciation
        continues when rigs are being repaired, refurbished or between periods of
        deployment. Assets not placed in service and not being depreciated were $64,199
        and $57,247 as of September 30, 2007 and December 31, 2006, respectively.
        Gains and losses on dispositions are included in contract drilling revenues
        and
        are immaterial to the financial statements.
 
 The
        Company capitalizes interest as a component of the cost of drilling rigs
        constructed for its own use. For the nine months ended September 30, 2007
        and
        2006, the Company capitalized $1,269 and $2,886, respectively, and for the
        three
        months ended September 30, 2007 and 2006, the Company capitalized $366 and
        $855,
        respectively, of interest costs incurred during the construction periods
        of
        certain drilling and workover rigs.
 
 The
        Company reviews long-lived assets to be held and used for impairment whenever
        events or changes in circumstances indicate that the carrying amount of the
        assets may not be recoverable. If the sum of the undiscounted expected future
        cash flows is less than the carrying amount of the assets, the Company
        recognizes an impairment loss based upon fair value of the asset.
 
 On
        January 2, 2007, the Company purchased an approximately 18,100 square foot
        building located in Edmond, Oklahoma for cash of $1,400 and the assumption
        of
        existing debt of approximately $1,590.
 
 *Income
        Taxes*
 
 Pursuant
        to Statement of Financial Accounting Standards (“SFAS”) No. 109, “ *Accounting
        for Income Taxes,* ”
the
        Company follows the asset and liability method of accounting for income taxes,
        under which the Company recognizes deferred tax assets and liabilities for
        the
        future tax consequences attributable to differences between the financial
        statement carrying amounts of existing assets and liabilities and their
        respective tax bases. Deferred tax assets and liabilities were measured using
        enacted tax rates expected to apply to taxable income in the years in which
        the
        Company expects to recover or settle those temporary differences. A statutory
        Federal tax rate of 35% and effective state tax rate of 3.7% (net of Federal
        income tax effects) were used for the enacted tax rates for all
        periods.
 
 As
        changes in tax laws or rates are enacted, deferred income tax assets and
        liabilities are adjusted through the provision for income taxes. Deferred
        tax
        assets are reduced by a valuation allowance if, based on available evidence,
        it
        is more likely than not that some portion or all of the deferred tax assets
        will
        not be realized. The classification of current and noncurrent deferred tax
        assets and liabilities is based primarily on the classification of the assets
        and liabilities generating the difference.
 
 *Net
        Income Per Common Share*
 
 The
        Company computes and presents net income per common share in accordance with
        SFAS No. 128, “ *Earnings
        per Shar* e.”
This
        standard requires dual presentation of basic and diluted net income per share
        on
        the face of the Company’s statement of operations. Basic net income per common
        share is computed by dividing net income or loss attributable to common stock
        by
        the weighted average number of common shares outstanding for the period.
        Diluted
        net income per common share reflects the potential dilution that could occur
        if
        options, restricted stock or other contracts to issue common stock were
        exercised or converted into common stock.
 -7-
 *Table
            of Contents*
  *Stock-based
        Compensation*
 The
          Company adopted SFAS No. 123(R), “ Share-Based
          Payment ”
upon
          granting its first stock options on August 16, 2005. SFAS No. 123(R)
          requires a public entity to measure the costs of employee services received
          in
          exchange for an award of equity or liability instruments based on the grant-date
          fair value of the award. That cost will be recognized over the periods
          during
          which an employee is required to provide service in exchange for the
          award.
  *Recent
          Accounting Pronouncements*
  The
        Company adopted FASB Interpretation 48, Accounting for Uncertainty in Income
        Taxes (“FIN 48”), on January 1, 2007. The adoption of FIN 48 did not have a
        material effect on our consolidated financial position or results of operations.
        The Company is subject to U.S. federal income tax as well as income tax of
        multiple state jurisdictions. Our 2005 − 2006 U.S. federal and state income tax
        returns remain open to examination by the Internal Revenue Service (IRS).
        The
        Company is continuing its practice of recognizing interest and/or penalties
        related to income tax matters as income tax expense.
 
 In
        September 2006, the FASB issued SFAS No. 157 (“SFAS 157”), “Fair Value
        Measurements.” SFAS 157 defines fair value, establishes a framework for
        measuring fair value in generally accepted accounting principles (“GAAP”), and
        expands disclosures about fair value measurements. SFAS 157 applies under
        other
        accounting pronouncements that require or permit fair value measurements,
        the
        FASB having previously concluded in those accounting pronouncements that
        fair
        value is the relevant measurement attribute. Accordingly, SFAS 157 does not
        require any new fair value measurements. However, for some entities, the
        application of SFAS 157 will change current practice. SFAS 157 is effective
        for
        fiscal years beginning after November 15, 2007. The Company does not expect
        the
        adoption of SFAS 157 to have a material impact on its financial position
        or
        results of operations and financial condition.
 
 In
        February 2007, the FASB issued SFAS No. 159 (“SFAS 159”), “The Fair Value Option
        for Financial Assets and Financial Liabilities−−Including an amendment of FASB
        Statement No. 115.” SFAS No. 159 permits entities to choose to measure many
        financial instruments and certain other items at fair value. Unrealized gains
        and losses on items for which the fair value option has been elected will
        be
        recognized in earnings at each subsequent reporting date. SFAS No. 159 is
        effective for fiscal years beginning January 1, 2008. The Company does not
        expect the adoption of SFAS 159 to have a material impact on its financial
        position or results of operations and financial condition.
 
 **2.
        Acquisitions**
 
 On
        January 18, 2006, the Company completed the acquisition of six land
        drilling rigs and certain other assets, including heavy haul trucks and excess
        rig equipment and inventory, from Big A Drilling, L.L.C. (“Big A”). The results
        of Big A’s operations have been included in the consolidated financial
        statements since that date. The purchase price for the assets consisted of
        $16,028 in cash and 72,571 shares of our common stock with a fair market
        value
        of $1,816. At closing, the Company also entered into a lease agreement with
        an
        affiliate of Big A under which it leased a rig refurbishment yard located
        in
        Woodward, Oklahoma. The lease had an initial term of six months, and the
        Company
        has the option to extend the initial term for a period of three years following
        the expiration of the initial term. The lease is currently month-to-month.
        The
        purchase price has been allocated to property and equipment totaling $17,077,
        goodwill of $380 and customer lists of $387. Customer lists are being amortized
        over an expected life of four years. The entire amount allocated to goodwill
        is
        considered deductible for tax purposes.
 
 On
        January 9, 2007, the Company completed the acquisition of 31 workover rigs,
        24
        of which were in service at the time of the acquisition, from Eagle Well
        Service, Inc. (“Eagle”) and related subsidiaries for $2,500 in cash, 1,070,390
        shares of our common stock with a fair market value of $15,124, and the
        assumption of debt of $6,516, liabilities of $800 and additional deferred
        income
        taxes of $7,708. This acquisition provided a platform for the Company to
        expand
        into the well service industry. The Company acquired the stock of Eagle,
        which
        was accounted for using the purchase method of accounting. The deferred tax
        liability assumed in the acquisition was the main factor that resulted in
        the
        Company recording goodwill, all of which is not deductible for tax purposes.
        The
        amortizable intangibles acquired include trade name and customer lists, which
        will be amortized over two and four years, respectively. The operations related
        to the Eagle acquisition are included in the Company’s statement of operations
        as of the respective closing date. The Company is in the process of gathering
        additional information to finalize the fair value of assets acquired and
        the
        purchase price allocation is subject to change.
 
 The
        following table summarizes the allocation of purchase price to the Company’s
        acquisition of Eagle:


Assets
                  acquired:Cash
              
              $
              163Prepaid
                  Expenses
              
              
              227Accounts
                  Receivable
              
              
              1,694Workover
                  equipment
              
              
              23,912Vehicles
              
              
              1,943Other
                  equipment
              
              
              244Customer
                  Lists
              
              
              3,380Trade
                  Name
              
              
              190Goodwill
              
              
              852$
              32,605


The
      following pro forma information gives effect to the Eagle acquisition as though
      it was effective at the beginning of each year presented. It also gives effect
      to the Big A acquisition as though it was effective at the beginning of 2006.
      Pro forma adjustments primarily relate to additional depreciation, amortization
      and interest costs. The information reflects the Company’s historical data and
      historical data from the acquired business for the periods indicated. The pro
      forma data may not be indicative of the results the Company would have achieved
      had it completed the acquisition at the beginning of each period presented,
      or
      that it may achieve in the future. The pro forma financial information should
      be
      read in conjunction with the accompanying historical financial statements.
      Pro
      forma income per basic and diluted common share is computed based on the
      weighted average pro forma number of basic and diluted shares assumed to be
      outstanding during the period. Pro forma per share information is presented
      for
      the three months ended September 30, 2007 on the basis of 26,025,000 and
      26,126,000 weighted average shares issued basic and diluted. Pro forma per
      share
      information is presented for the nine months ended September 30, 2007 on the
      basis of 25,984,000 and 26,064,000 weighted average shares issued basic and
      diluted. Pro forma per share information is presented for the three months
      ended
      September 30, 2006 on the basis of 26,010,000 and 26,044,000 weighted average
      shares issued basic and diluted. Pro forma per share information is presented
      for the nine months ended September 30, 2006 on the basis of 25,537,000 and
      25,575,000 weighted average shares issued basic and diluted. Dilutive pro forma
      effect is given to shares that are issuable upon the exercise of outstanding
      options under an employee stock option plan.


**Pro
                  Forma****Three
                  Months Ended September 30,**
              
              **Nine
                  Months Ended September 30,****2007**
              
              **2006**
              
              **2007**
              
              **2006**Total
                  revenues
              
              $
              76,286
              
              $
              83,959
              
              $
              230,342
              
              $
              214,135Net
                  income
              
              $
              11,068
              
              $
              16,631
              
              $
              31,182
              
              $
              42,571Net
                  income per common share:Basic
              
              $
              0.43
              
              $
              0.64
              
              $
              1.20
              
              $
              1.67Diluted
              
              $
              0.42
              
              $
              0.64
              
              $
              1.20
              
              $
              1.66


-8-
 *Table
          of Contents*





**3.
          Long-term Debt**





Long-term
      debt consists of the following:


**September
                30,**
            
            **December
                31,****2007**
            
            **2006**Notes
                payable to De Lage Landen Financial Services, collateralized by
                cranes,payable
                in ninety-six monthly principal and interest installments of $81Interest
                on the notes ranges from 6.74% - 7.07%, with various due dates
                (1)
            
            $
            5,274
            
            $
            4,167Revolving
                credit facility with Fortis Capital Corp., collateralized by the
                Company's
                assets,and
                matures on January 13, 2009. Loans under the revolving credit
                facilitybear
                interest at variable rates as defined in the credit agreement.
                (2)
            
            
            55,000
            
            
            60,000Notes
                payable to Ford Credit, collateralized by trucks,payable
                in monthly principal and interest installments of $4.Interest
                on the notes is 7.99%-8.99% with various due dates. (3)
            
            
            -
            
            
            167Note
                payable to John Deere Construction & Forestry Company, collateralized
                by forklifts,
              payable
                in thirty-six monthly installments of $11, due December 1, 2009.
                (4)
            
            
            303
            
            
            393Note
                payable to Holliday American Mortgage, collateralized by the building,
                payable
              in
                principal and interest installments of $14, interest on the note
                is 6.0%
                with a due
              date
                of January 1, 2021. (5)
            
            
            1,540
            
            
            -Notes
                payable to General Motors Acceptance Corporation, collateralized
                by
                trucks,
              payable
                in monthly principal and interest installments of $18, various due
                dates.
            
            
            556
            
            
            -62,673
            
            
            64,727Less
                current installments
            
            
            1,034
            
            
            636$
            61,639
            
            $
            64,091


(1)
            On
                December 7, 2005, January 4, 2006, June 12, 2006 and March 12,
                2007, the Company entered into Term Loan and Security Agreements
                with De
                Lage Landen Financial Services, Inc. The loans provide for term
                installment notes in an aggregate amount not to exceed $6,000. The
                proceeds of the term loans were used to purchase five
                cranes.


(2)
            On
                January 13, 2006, we entered into a $150.0 million revolving credit
                facility with Fortis Capital Corp., as administrative agent, lead
                arranger
                and sole bookrunner, and a syndicate of lenders, which include The
                Royal
                Bank of Scotland plc, The CIT Group/Business Credit, Inc., Calyon
                Corporate and Investment Bank, Merrill Lynch Capital, Comerica Bank
                and
                Caterpillar Financial Services Corporation. The revolving credit
                facility
                matures on January 13, 2009. The initial aggregate revolving
                commitment of $150.0 million is automatically and permanently reduced
                by
                $10.0 million at the end of each fiscal quarter starting September
                30,
                2006. The aggregate revolving commitment was $100,000 as of September
                30,
                2007. Loans under the revolving credit facility bear interest at
                LIBOR
                plus a margin that can range from 2.0% to 3.0% or, at our option,
                the
                prime rate plus a margin that can range from 1.0% to 2.0%, depending
                on
                the ratio of our outstanding senior debt to “Adjusted EBITDA” as defined
                in the credit agreement. Interest payments shall be made on advances
                made
                at prime on the last business day of each calendar quarter and on
                the date
                such advances shall be paid in full, while advances made at LIBOR
                are
                payable on the last day of each interest period which could be one,
                two,
                three, or six months as selected by the Company. Interest payments
                shall
                be made at three month intervals from the first day of such interest
                period in the period is greater than three months. Our borrowings
                under
                this revolving credit facility were used to fund a portion of the
                Big A
                acquisition and to repay in full all outstanding borrowings under
                our term
                loan with Merrill Lynch Capital and our revolving line of credit
                with
                International Bank of Commerce. 
 The
        revolving credit facility also provides for a quarterly commitment fee of
        0.5% per annum of the unused portion of the revolving credit facility, and
        fees for each letter of credit issued under the facility. Commitment fees
        expense for the three months and nine months ended September 30, 2007 were
        $112
        and $261. Our subsidiaries have guaranteed the loans and other obligations
        under
        the revolving credit facility. The obligations under the revolving credit
        facility and the related guarantees are secured by a first priority security
        interest in substantially all of our assets, as well as the shares of capital
        stock of our direct and indirect subsidiaries.
 
 The
        revolving credit facility contains customary covenants for facilities of
        this
        type, including among other things, covenants that restrict our ability to
        make
        capital expenditures, incur indebtedness, incur liens, dispose of property,
        repay debt, pay dividends, repurchase shares and make certain acquisitions.
        The
        financial covenants are a minimum fixed charge coverage ratio of 1.75 to
        1.00
        and a maximum total leverage ratio of 2.00 to 1.00. The Company was in
        compliance with all covenants at September 30, 2007. The revolving credit
        facility provides for mandatory prepayments under certain circumstances as
        more
        fully discussed in the revolving credit facility.
 
 The
        revolving credit facility contains various events of default, including failure
        to pay principal and interest when due, breach of covenants, materially
        incorrect representations, default under certain other agreements, bankruptcy
        or
        insolvency, the occurrence of specified ERISA events, entry of enforceable
        judgments against us in excess of $3.0 million not stayed, and the occurrence
        of
        a change of control. If an event of default occurs, all commitments under
        the
        revolving credit facility may be terminated and all of our obligations under
        the
        revolving credit facility could be accelerated by the lenders, causing all
        loans
        outstanding (including accrued interest and fees payable thereunder) to be
        declared immediately due and payable.
 
 (3)
            On
                various dates during 2006, the Company entered into term loan agreements
                with Ford Credit. The loans provide for term installment notes in
                an
                aggregate not to exceed $174. The proceeds of the term loans were
                used to
                purchase eight trucks. These notes were paid off in the first quarter
                of
                2007. 
 (4)
            On
                November 21, 2006, the Company entered into term loan agreements
                with John
                Deere Construction & Forestry Company. The loans provide for term
                installments in an aggregate not to exceed $403. The proceeds of
                the term
                loans were used to purchase two
                forklifts. 
 (5)
            On
                January 2, 2007, the Company assumed a term loan agreement with Holliday
                American Mortgage related to the acquisition of a building. The loan
                provides for term installments in an aggregate not to exceed
                $1,590.


-9-
 *Table
          of Contents*


Long-term
        debt maturing each year subsequent to September 30, 2007 is as
        follows:


2008
              
              $
              1,0342009
              
              
              56,0842010
              
              
              1,0162011
              
              
              8712012
              
              
              9332013
                  and thereafter
              
              
              2,735$
              62,673


**4.
      Workers’ Compensation and Health Insurance**





The
      Company is insured under a large deductible workers’ compensation insurance
      policy. The policy generally provides for a $1,000 deductible per covered
      accident. Due to the size of the deductible, the policy requires the Company
      to
      maintain a letter of credit with an insurance company and a bank. At September
      30, 2007 and December 31, 2006, the Company had a deposit of $2,745 and
      $2,600, respectively, with an insurance company collateralizing the letter
      of
      credit. The deposit is reflected in restricted cash and deposit. Accrued
      expenses at September 30, 2007 and December 31, 2006 included approximately
      $3,234 and $1,869, respectively, for estimated but not reported costs and
      premium accruals related to our workers’ compensation insurance.





On
      November 1, 2005, the Company initiated a self-insurance program for major
      medical, hospitalization and dental coverage for employees and their dependents,
      which is partially funded by payroll deductions. The Company provided for both
      reported and incurred but not reported medical costs in the accompanying
      consolidated balance sheets. The Company has a maximum liability of $75 per
      employee/dependent per year. Amounts in excess of the stated maximum are covered
      under a separate policy provided by an insurance company. Accrued expenses
      at
      September 30, 2007 and December 31, 2006 included approximately $416 and
      $404, respectively, for the Company’s estimate of incurred but not reported
      costs related to the self-insurance portion of the Company’s health
      insurance.





**5.
      Transactions with Affiliates**





Effective
      April 1, 2005, the Company entered into an administrative services
      agreement with its then affiliate Gulfport Energy Corporation (“Gulfport”).
      Under this agreement, Gulfport agreed to provide certain services to the
      Company, including accounting, human resources, legal and technical support
      services. In return for the services, the Company agreed to pay Gulfport an
      annual fee of approximately $414 payable in equal monthly installments during
      the term of this agreement. In addition, the Company leased approximately 1,200
      square feet of office space from Gulfport for the Company’s headquarters for an
      annual rent of $21 payable in equal monthly installments. The services the
      Company received under the administrative services agreement and the fees for
      such services could be amended by mutual agreement of the parties. In January
      2006, the Company reduced the level of administrative services being provided
      by
      Gulfport and increased its office space to approximately 2,500 square feet.
      As a
      result, the Company’s annual fee for administrative services was reduced to
      approximately $150 and its annual rental was increased to approximately $44.
      The
      administrative services agreement had a three-year term, and upon expiration
      of
      that term the agreement would continue on a month-to-month basis until cancelled
      by either party with at least 30 days prior written notice. The administrative
      services agreement was terminable (1) by the Company at any time with at
      least 30 days prior written notice to Gulfport and (2) by either party if
      the other party is in material breach of the agreement and such breach had
      not
      been cured within 30 days of receipt of written notice of such breach. The
      Company terminated the administrative services agreement effective April 1,
      2006. As a result, the Company incurred no expense related to this agreement
      during the three and nine months ended September 30, 2007. The Company paid
      Gulfport approximately $49 and $96 in consideration for these services during
      the three and nine months ended September 30, 2006, respectively. At September
      30, 2007 and December 31, 2006, the Company had no balances payable to
      Gulfport and included in accounts payable. Prior to entry into this
      administrative services agreement, the Company reimbursed Gulfport for its
      share
      of time its employees spent performing service for the Company.





Additionally,
      the Company provided contract drilling services totaling $0 and $2,616 to
      affiliated entities during the three and nine months ended September 30, 2007.
      The Company provided contract drilling services totaling $3,506 and $8,629
      to
      affiliated entities during the three and nine months ended September 30, 2006,
      respectively. The Company had receivables from affiliates of $0 and $1,016
      at
      September 30, 2007 and December 31, 2006, respectively.





**6.
      Commitments and Contingencies**





The
      Company was plaintiff against defendant, an oil and gas operating company,
      for
      approximately $942 as a result of the defendant's refusal to make payment
      pursuant to the terms of its drilling contract. The defendant countersued for
      damages in excess of $2,800, alleging breach of contract, negligence, gross
      negligence and breach of warranties. An allowance of $842 had been provided
      for
      a portion of the amounts receivable under the drilling contract. The matter
      has
      been resolved to the satisfaction of the Company and all claims against the
      Company were dismissed.




The
      Company is involved in various disputes and legal actions, the majority of
      which
      are incidental to the ordinary course of our business operations. In the opinion
      of management, all matters are adequately covered by insurance,
      collateralized or, if not covered, are not expected to have a material
      effect on the Company’s consolidated financial position, results of operations
      or cash flows.





**7.
      Net Income Per Common Share**





The
      following table presents a reconciliation of the numerators and denominators
      of
      the basic and diluted earnings per share (“EPS”) and diluted EPS comparisons as
      required by SFAS No. 128:


**Three
                  Months Ended**
              
              **Nine
                  Months Ended****September
                  30,**
              
              **September
                  30,****2007**
              
              **2006**
              
              **2007**
              
              **2006**Basic:Net
                  income
              
              $
              11,068
              
              $
              17,405
              
              $
              31,169
              
              $
              43,481Weighted
                  average shares
              
              
              26,025
              
              
              24,940
              
              
              25,984
              
              
              24,467Earnings
                  per share
              
              $
              0.43
              
              $
              0.70
              
              $
              1.20
              
              $
              1.78Diluted:Net
                  income
              
              $
              11,068
              
              $
              17,405
              
              $
              31,169
              
              $
              43,481Weighted
                  average shares:Outstanding
                  (thousands)
              
              
              26,025
              
              
              24,940
              
              
              25,984
              
              
              24,467Restricted
                  Stock (thousands)
              
              
              101
              
              
              34
              
              
              80
              
              
              3826,126
              
              
              24,974
              
              
              26,064
              
              
              24,505Income
                  per share
              
              $
              0.42
              
              $
              0.70
              
              $
              1.20
              
              $
              1.77


-10-
 *Table
            of Contents*
  The
        weighted average number of diluted shares excludes 17,285 and 25,216 shares
        for
        the three and nine months ended September 30, 2007 for options due to their
        antidilutive effects.
  **8.
        Equity Transactions**
 
 Effective
        January 9, 2007, the Company issued 1,070,390 shares of common stock to the
        equity owners of Eagle in connection with the Company’s acquisition of Eagle.
        (See Note 2)
 
 **9.
        Stock Options and Stock Option Plan**
 
 The
        Company’s 2005 Stock Incentive Plan was adopted on July 20, 2005 and
        amended on November 16, 2005 (the “2005 Plan”) which is described below.
        The compensation cost that has been charged against income before taxes related
        to stock options was $22 and $1,029 for the three and nine months ended
        September 30, 2007, respectively, and $694 and $2,035 for the three and nine
        months ended September 30, 2006, respectively. These options are reported
        as
        equity instruments and their fair value is amortized to expense using the
        straight line method over the vesting period. The shares of stock issued
        once
        the options are exercised will be from authorized but unissued common
        stock.
 
 The
        Company receives a tax deduction for certain stock option exercises during
        the
        period the options are exercised, generally for the excess of the price at
        which
        the options are sold over the exercise price of the options. There have been
        no
        stock options exercised under the 2005 Plan.
 
 The
        purpose of the 2005 Plan was to enable the Company, and any of its affiliates,
        to attract and retain the services of the types of employees, consultants
        and
        directors who will contribute to its long-range success and to provide
        incentives which are linked directly to increases in share value which will
        inure to the benefit of the Company’s 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 the Company’s common stock through the
        granting of incentive stock options and nonstatutory stock options. Eligible
        award recipients under the 2005 Plan were employees, consultants and directors
        of the Company and its affiliates. 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 will be from
        authorized but unissued common stock, and the maximum aggregate amount of
        such
        common stock which could 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 the Company’s
        capital structure.
 
 The
        Company’s board of directors and a majority of the Company’s stockholders
        approved the Company’s 2006 Stock Incentive Plan (the “2006 Plan ,”
and
        together with the 2005 Plan, the “Plans”), effective April 20, 2006. No further
        awards will be made under the 2005 Plan. The purpose of the 2006 Plan provides
        a means by which eligible recipients of awards may be given an opportunity
        to
        benefit from increases in value of the Company’s 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 maximum aggregate amount of the Company’s
        common stock which may be issued upon exercise of all awards under the 2006
        Plan, may not exceed 2,500,000 shares, less shares underlying options granted
        to
        employees under the 2005 Plan prior to the adoption of the 2006
        Plan.
  On
        April
        20, 2007, the Company filed a Tender Offer Statement on Schedule TO relating
        to
        the Company’s offer to eligible directors, officers, employees and consultants
        to exchange certain outstanding options to purchase shares of our common
        stock
        for restricted stock awards consisting of the right to receive restricted
        shares
        of our common stock (the “Restricted Stock Awards”). The offer expired on May
        21, 2007. Pursuant to the offer, the Company accepted for cancellation eligible
        options to purchase 729,000 shares of the Company’s common stock tendered by
        directors, officers, employees and consultants eligible to participate in
        the
        offer. Subject to the terms and conditions of the offer, on May 21, 2007
        the
        Company granted one Restricted Stock Award in exchange for every two shares
        of
        common stock underlying the eligible options tendered. The Restricted Stock
        Awards will vest in equal amounts on January 1, 2008 and
        January 1, 2009, subject to earlier vesting or forfeiture in certain
        circumstances. We granted the Restricted Stock Awards under the 2006 Plan.
  An
        incremental cost was computed in accordance with SFAS No. 123(R) upon the
        conversion of options to restricted stock. The incremental cost was measured
        as
        the excess of the fair value of the modified award over the fair value to
        the
        original award immediately preceding conversion, measured based on the share
        price and other pertinent factors at that date. The incremental cost to be
        recognized over the vesting period of the modified award is $387.
  The
        fair
        value of each option award is estimated on the date of grant using a
        Black-Scholes valuation model that uses the assumptions noted in the following
        table. Expected volatilities are based on the historical volatility of a
        selected peer. The majority of the Company’s options are held by employees that
        make up one group with similar expected exercise behavior for valuation
        purposes. The expected term of options granted is estimated based on an average
        of the vesting period and the contractual period. The risk-free rate for
        periods
        within the contractual life of the option is based on the U.S. Treasury yield
        curve in effect at the time of the grant.
 
 Under
        the
        2005 Plan, employee stock options become exercisable in equal monthly
        installments over a three-year period, and all options generally expire ten
        years after the date of grant. Under the 2006 Plan, employee stock options
        become exercisable to the extent the options have become vested pursuant
        to the
        vesting schedule set forth in the applicable stock option award certificate,
        and
        all options generally expire ten years after the date of grant. The Plans
        provide that all options must have an exercise price not less than the fair
        market value of the Company’s common stock on the date of the grant. The
        following table summarizes the assumptions used in the Black-Scholes
        option-pricing model for the nine months ended September 30, 2006. We did
        not
        grant any options during the nine months ended September 30, 2007:


**September
                  30,****2006**Expected
                  volatility
              
              49%Expected
                  life in years
              
              5.77Weighted
                  average risk free interest rate
              
              4.65%
 -11-
 *Table
              of Contents*
  The
          Company has not declared dividends since it became a public company and
          does not
          intend to do so in the foreseeable future, and thus did not use a dividend
          yield. Expected life has been determined using the permitted simplified
          method.
          In each case, the actual value that will be realized, if any, will depend
          on the
          future performance of the common stock and overall stock market conditions.
          There is no assurance that the value an optionee actually realizes will
          be at or
          near the value estimated using the Black-Scholes model. The following table
          provides information relating to activity in the 2005 and 2006 Plans during
          the
          first nine months of 2007:
   **Weighted**
                
                **Weighted****Average**
                
                **Average
                    Remaining**
                
                **Aggregate****Exercise
                    Price**
                
                **Contractual**
                
                **Intrinsic****Shares**
                
                **per
                    Share**
                
                **Life**
                
                **Value**Options
                    outstanding at December 31, 2006
                
                
                832
                
                $
                20.39
                
                
                8.91
                
                $
                (2,632
                )Granted
                
                
                -
                
                
                -Exercised
                
                
                -
                
                
                -Converted
                
                
                (769
                )
                
                20.14Forfeited/expired
                
                
                (43
                )
                
                22.23Options
                    outstanding at September 30, 2007
                
                
                20
                
                $
                26.14
                
                
                8.30
                
                
                (227
                )Options
                    fully vested and exercisable at September 30, 2007
                
                
                11
                
                $
                26.14
                
                
                8.30
                
                $
                (124
                )




**Weighted
                  Average**
              
              **Aggregate****Grant
                  Date**
              
              **Grant
                  Date****Shares**
              
              **Fair
                  Value**
              
              **Fair
                  Value**Options
                  nonvested at December 31, 2006
              
              
              513
              
              $
              11.11
              
              $
              5,700Granted
              
              
              -
              
              
              -
              
              
              -Vested
              
              
              (88
              )
              
              11.19
              
              
              985Converted
              
              
              (392
              )
              
              11.02
              
              
              4,321Forfeited/expired
              
              
              (24
              )
              
              11.40
              
              
              273Options
                  nonvested at September 30, 2007
              
              
              9
              
              $
              13.34
              
              $
              121




As
        of
        September 30, 2007, there was $121 of total unrecognized compensation cost
        related to nonvested share-based compensation arrangements granted under
        the
        2005 and 2006 Plans. That cost is expected to be recognized over a
        weighted-average period of 1.3 years.
 
 **10.
        Restricted Stock**
 
 Under
        all
        restricted stock awards to date, shares were issued when granted and nonvested
        shares are subject to forfeiture for failure to fulfill service conditions.
        Restricted stock awards are valued at the grant date market value of the
        underlying common stock and are being amortized to operations over the
        respective vesting period. Compensation expense for the three and nine months
        ended September 30, 2007, related to shares of restricted stock was $981
        and
        $1,647, respectively. Restricted stock activity for the nine months ended
        September 30, 2007 follows:
   **Weighted
                  Average****Grant
                  Date****Shares**
              
              **Fair
                  Value**Outstanding
                  at December 31, 2006
              
              
              67
              
              $
              20.25Granted
              
              
              119
              
              
              15.42Converted
              
              
              385
              
              
              16.58Vested
              
              
              (22
              )
              
              20.25Forfeited/expired
              
              
              -
              
              
              -Outstanding
                  at September 30, 2007
              
              
              549
              
              $
              16.64


There
      was
      $6,112 of total unrecognized compensation cost related to nonvested restricted
      stock awards to be recognized over a weighted-average period of 1.36 years
      as of
      September 30, 2007.




**11.
      Employee Benefit Plans**





The
      Company implemented a new 401(k) retirement plan for its eligible employees
      during 2006. Under the plan, the Company matches 100% of employees’
contributions up to 5% of eligible compensation. Employee and employer
      contributions vest immediately. The Company’s contributions for the three and
      nine months ended September 30, 2007 were $270 and $780, respectively, and
      $198
      and $473 for the three and nine months ended September 30, 2006,
      respectively.


-12-
 *Table
          of Contents*




**ITEM 2.
      Management’s Discussion and Analysis of Financial
      Condition and Results of Operations**





The
      following discussion and analysis should be read in conjunction with the
“Management’s Discussion and Analysis of Financial Condition and Results of
      Operations” section and audited consolidated financial statements and related
      notes thereto included in our Annual Report on Form 10-K, filed with the
      Securities and Exchange Commission, or SEC, on March 8, 2007 and with the
      unaudited consolidated financial statements and related notes thereto presented
      in this Quarterly Report on Form 10-Q.





**Disclosure
      Regarding Forward-Looking Statements**





Our
      disclosure and analysis in this Form 10-Q may include forward-looking statements
      within the meaning of Section 27A of the Securities Act of 1933, as
      amended, or the Securities Act, Section 21E of the Securities Exchange Act
      of 1934, as amended, or the Exchange Act, and the Private Securities Litigation
      Reform Act of 1995, that are subject to risks and uncertainties. Forward-looking
      statements give our current expectations and projections relating to our
      financial condition, results of operations, plans, objectives, future
      performance and business. You can identify these statements by the fact that
      they do not relate strictly to historical or current facts. These statements
      may
      include words such as “anticipate,” “estimate,” “expect,” “project,” “intend,”
“plan,” “believe” and other words and terms of similar meaning in connection
      with any discussion of the timing or nature of future operating or financial
      performance or other events. All statements other than statements of historical
      facts included in this Form 10-Q that address activities, events or developments
      that we expect, believe or anticipate will or may occur in the future are
      forward-looking statements.





These
      forward-looking statements are largely based on our expectations and beliefs
      concerning future events, which reflect estimates and assumptions made by our
      management. These estimates and assumptions reflect our best judgment based
      on
      currently known market conditions and other factors relating to our operations
      and business environment, all of which are difficult to predict and many of
      which are beyond our control.





Although
      we believe our estimates and assumptions to be reasonable, they are inherently
      uncertain and involve a number of risks and uncertainties that are beyond our
      control. In addition, management’s assumptions about future events may prove to
      be inaccurate. Management cautions all readers that the forward-looking
      statements contained in this Form 10-Q are not guarantees of future performance,
      and we cannot assure any reader that those statements will be realized or the
      forward-looking events and circumstances will occur. Actual results may differ
      materially from those anticipated or implied in the forward-looking statements
      due to the factors listed in the “Management’s Discussion and Analysis of
      Financial Condition and Results of Operations” and “Risk Factors” sections of
      this Quarterly Report on Form 10-Q and our Annual Report on Form 10-K. All
      forward-looking statements speak only as of the date of this Form 10-Q. We
      do
      not intend to publicly update or revise any forward-looking statements as a
      result of new information, future events or otherwise, except as required by
      law. These cautionary statements qualify all forward-looking statements
      attributable to us or persons acting on our behalf.





**Overview**





We
      provide contract land drilling services to oil and natural gas exploration
      and
      production companies. We currently own a fleet of 65 land drilling rigs, of
      which 54 are marketed and 11 are held in inventory. We also own a fleet
      of 53 workover
      rigs, of which 46 are operating and 7 are in the process of being manufactured.
      We also currently own a fleet of 70 trucks used to transport our
      rigs.





We
      commenced operations in 2001 with the purchase of one stacked 650-horsepower
      rig
      that we refurbished and deployed. We subsequently made selective acquisitions
      of
      both operational and inventoried rigs, as well as ancillary equipment.
      O ur
      management team has significant experience not only with acquiring rigs, but
      also with refurbishing and deploying inventoried rigs. We have successfully
      refurbished and brought into operation 25 inventoried drilling rigs during
      the
      period from November 2003 to October 2007. In addition, we have a 41,000 square
      foot machine shop in Oklahoma City which allows us to refurbish and repair
      our
      rigs and equipment in-house. This facility, which complements our four drilling
      rig refurbishment yards, significantly reduces our reliance on outside machine
      shops and the attendant risk of third-party delays in our rig refurbishment
      program.




We
      currently operate our drilling rigs in Oklahoma, Louisiana, Texas, North Dakota,
      Kansas and Colorado. Our workover rigs are currently operating in Oklahoma,
      Texas, Kansas, Colorado, and New Mexico. A majority of the wells we have drilled
      for our customers have been drilled in search of natural gas reserves. Natural
      gas is often found in deep and complex geologic formations that generally
      require higher horsepower, premium rigs and experienced crews to reach targeted
      depths. Our current fleet of 65 rigs includes 38 rigs ranging from 950 to 2,500
      horsepower. Accordingly, such rigs can, or in the case of inventoried rigs
      upon
      refurbishment, will be able to, reach the depths required to explore for deep
      natural gas reserves. Our higher horsepower land drilling rigs can also drill
      horizontal wells, which are increasing as a percentage of total wells drilled
      in
      North America. We believe our premium rig fleet, inventory and experienced
      crews
      position us to benefit from the natural gas drilling activity in our core
      operating areas.





We
      earn
      our contract drilling revenues by drilling oil and natural gas wells for our
      customers. We obtain our contracts for drilling oil and natural gas wells either
      through competitive bidding or through direct negotiations with customers.
      Our
      drilling contracts generally provide for compensation on either a daywork or
      footage basis. We have not historically entered into turnkey contracts and
      do
      not intend to enter into turnkey contracts, subject to changes in market
      conditions, although it is possible that we may acquire such contracts in
      connection with future acquisitions. Contract terms we offer generally depend
      on
      the complexity and risk of operations, the on-site drilling conditions, the
      type
      of equipment used and the anticipated duration of the work to be performed.
      Although we currently have 16 of
      our
      rigs operating under agreements with terms ranging from one to two years, our
      contracts generally provide for the drilling of a single well and typically
      permit the customer to terminate on short notice.





A
      significant performance measurement in our industry is operating rig
      utilization. We compute operating rig utilization rates by dividing revenue
      days
      by total available days during a period. Total available days are the number
      of
      calendar days during the period that we have owned the operating rig. Revenue
      days for each operating rig are days when the rig is earning revenues under
      a
      contract, i.e. when the rig begins moving to the drilling location until the
      rig
      is released from the contract. On daywork contracts, during the mobilization
      period we typically earn a fixed amount of revenue based on the mobilization
      rate stated in the contract. We begin earning our contracted daywork rate when
      we begin drilling the well. Occasionally, in periods of increased demand, we
      will receive a percentage of the contracted dayrate during the mobilization
      period. We account for these revenues as mobilization fees.





For
      the
      three and nine months ended September 30, 2007 and 2006 and years ended
      December 31, 2006, 2005 and 2004, our rig utilization rates, revenue days
      and average number of operating rigs were as follows:


**Three
                      Months Ended**
                  
                  **Nine
                      Months Ended****September
                      30,**
                  
                  **September
                      30,**
                  
                  **Years
                      Ended December 31,****2007**
                  
                  **2006**
                  
                  **2007**
                  
                  **2006**
                  
                  **2006**
                  
                  **2005**
                  
                  **2004**Average
                      number of operating rigs
                  
                  
                  53
                  
                  
                  47
                  
                  
                  52
                  
                  
                  43
                  
                  
                  45
                  
                  
                  17
                  
                  
                  9Revenue
                      days
                  
                  
                  3,739
                  
                  
                  4,039
                  
                  
                  10,995
                  
                  
                  11,024
                  
                  
                  15,202
                  
                  
                  5,781
                  
                  
                  2,733Utilization
                      Rates
                  
                  
                  76
                  %
                  
                  94
                  %
                  
                  77
                  %
                  
                  94
                  %
                  
                  93
                  %
                  
                  95
                  %
                  
                  81
                  %




The
        decrease in the number of revenue days in the three and nine month-period
        ended
        September 30, 2007 as compared to the same period in 2006 is attributable
        to the
        decrease in our rig utilization rate partially offset by an increase in the
        size
        of our operating rig fleet.
 
 We
        devote
        substantial resources to maintaining, upgrading and expanding our rig fleet.
        We
        substantially completed the refurbishment of three rigs to date in 2007,
        12 rigs
        in 2006 and six rigs in 2005.
 -13-
 *Table
            of Contents*
  **Market
        Conditions in Our Industry**
 
 The
        United States contract land drilling services industry is highly cyclical.
        Volatility in oil and natural gas prices can produce wide swings in the levels
        of overall drilling activity in the markets we serve and affect the demand
        for
        our drilling services and the dayrates we can charge for our rigs. The
        availability of financing sources, past trends in oil and natural gas prices
        and
        the outlook for future oil and natural gas prices strongly influence the
        number
        of wells oil and natural gas exploration and production companies decide
        to
        drill.
 
 The
        following table depicts the prices for near month delivery contracts for
        crude
        oil and natural gas as traded on the NYMEX, as well as the most recent Baker
        Hughes domestic land rig count, on the dates indicated:
 **At
                    September 30,**
                
                **At
                    December 31,****2007**
                
                **2006**
                
                **2005**
                
                **2004**Crude
                    oil (Bbl)
                
                $
                81.64
                
                $
                61.05
                
                $
                61.04
                
                $
                43.45Natural
                    gas (Mmbtu)
                
                $
                6.87
                
                $
                6.30
                
                $
                11.23
                
                $
                6.15U.S.
                    Land Rig Count
                
                
                1,710
                
                
                1,626
                
                
                1,391
                
                
                1,138


We
      believe capital spent on incremental natural gas production will be driven
      by an
      increase in hydrocarbon demand as well as changes in the supply of natural
      gas.
      The Energy Information Administration (EIA) has estimated that U.S. consumption
      of natural gas exceeded domestic production by 13% in 2006 and forecasts that
      U.S. consumption of natural gas will exceed U.S. domestic production by 24%
      in
      2010.





Due
      to
      its clean burning nature and strong transportation infrastructure natural gas
      has become extremely popular as a major source of energy in the U.S., for both
      consumers and industry. Many utilities, for example, have shifted away from
      coal
      or oil to natural gas to meet growing electricity demand. As a result, demand
      for natural gas is expected to rise by more than 20 percent between now and
      2030. EIA
      projects that traditional North American producing areas will provide 75% of
      long-term U.S. gas needs, but will be unable to meet this long-term projected
      demand.





In
      addition, a study published by the National Petroleum Council in September
      2003
      concluded from drilling and production data over the preceding ten years that
      average “initial production rates from new wells have been sustained through the
      use of advanced technology; however, production declines from these initial
      rates have increased significantly; and recoverable volumes from new wells
      drilled in mature producing basins have declined over time.” For example, in
      2006, as there were 3.4 times the number of wells drilled as compared to ten
      years earlier, with no increase in production according to the EIA.





We
      believe all of these factors tend to support a sustained higher natural gas
      price environment, which should create strong incentives for oil and natural
      gas
      exploration and production companies to maintain high levels of drilling
      activity in the U.S.





**Critical
      Accounting Policies and Estimates**





Our
      discussion and analysis of our financial condition and results of operations
      is
      based upon our consolidated financial statements, which have been prepared
      in
      accordance with accounting policies that are described in the notes to our
      consolidated financial statements. The preparation of the consolidated financial
      statements requires our management to make estimates and judgments that affect
      the reported amounts of our assets, liabilities, revenues and expenses, and
      related disclosure of contingent assets and liabilities. We continually evaluate
      our judgments and estimates in determining our financial condition and operating
      results. Estimates are based upon information available as of the date of the
      financial statements and, accordingly, actual results could differ from these
      estimates, sometimes materially. Critical accounting policies and estimates
      are
      defined as those that are both most important to the portrayal of our financial
      condition and operating results and require management’s most subjective
      judgments. The most critical accounting policies and estimates are described
      below.





***Revenue
      and Cost Recognition*** —We
      earn
      our revenues by drilling oil and natural gas wells for our customers under
      daywork or footage contracts, which usually provide for the drilling of a single
      well. We recognize revenues on daywork contracts for the days completed based
      on
      the dayrate each contract specifies. Mobilization revenues and costs are
      deferred and recognized over the drilling days of the related drilling contract.
      Individual contracts are usually completed in less than 120 days. We follow
      the
      percentage-of- completion method of accounting for footage contract drilling
      arrangements. Under this method, drilling revenues and costs related to a well
      in progress are recognized proportionately over the time it takes to drill
      the
      well.





Percentage
      of completion is determined based upon the amount of expenses incurred through
      the measurement date as compared to total estimated expenses to be incurred
      drilling the well. Mobilization costs are not included in costs incurred for
      percentage-of-completion calculations. Mobilization costs on footage contracts
      and daywork contracts are deferred and recognized over the days of actual
      drilling. Under the percentage-of-completion method, management estimates are
      relied upon in the determination of the total estimated expenses to be incurred
      drilling the well. When estimates of revenues and expenses indicate a loss
      on a
      contract, the total estimated loss is accrued.





Our
      management has determined that it is appropriate to use the
      percentage-of-completion method to recognize revenue on our footage contracts,
      which we believe is the predominant practice in the industry. Although our
      footage contracts do not have express terms that provide us with rights to
      receive payment for the work that we perform prior to drilling wells to the
      agreed upon depth, we use this method because, as provided in applicable
      accounting literature, we believe we achieve a continuous sale for our
      work-in-progress and we believe, under applicable state law, we ultimately
      could
      recover the fair value of our work-in-progress even in the event we were unable
      to drill to the agreed upon depth in breach of the applicable contract. However,
      ultimate recovery of that value, in the event we were unable to drill to the
      agreed upon depth in breach of the contract, would be subject to negotiations
      with the customer and the possibility of litigation.





We
      are
      entitled to receive payment under footage contracts when we deliver to our
      customer a well completed to the depth specified in the contract, unless the
      customer authorizes us to drill to a shallower depth. Since inception, we have
      completed all our footage contracts. Although our initial cost estimates for
      footage contracts do not include cost estimates for risks such as stuck drill
      pipe or loss of circulation, we believe that our experienced management team,
      our knowledge of geologic formations in our areas of operation, the condition
      of
      our drilling equipment and our experienced crews enable us to make reasonably
      dependable cost estimates and complete contracts according to our drilling
      plan.
      While we do bear the risk of loss for cost overruns and other events that are
      not specifically provided for in our initial cost estimates, our pricing of
      footage contracts takes such risks into consideration. When we encounter, during
      the course of our drilling operations, conditions unforeseen in the preparation
      of our original cost estimate, we immediately adjust our cost estimate for
      the
      additional costs to complete the contracts. If we anticipate a loss on a
      contract in progress at the end of a reporting period due to a change in our
      cost estimate, we immediately accrue the entire amount of the estimated loss,
      including all costs that are included in our revised estimated cost to complete
      that contract, in our consolidated statement of operations for that reporting
      period. During 2007 and 2006, we did not experience a loss on the footage
      contracts we completed. We drilled three wells pursuant to a footage contract
      during the three and nine months ended September 30, 2007. We are more likely
      to
      encounter losses on footage contracts in years in which revenue rates are lower
      for all types of contracts.





Revenues
      and costs during a reporting period could be affected by contracts in progress
      at the end of a reporting period that have not been completed before our
      financial statements for that period are released. At September 30, 2007, our
      footage drilling in progress totaled $0. At September 30, 2007 and
      December 31, 2006, our contract drilling in progress totaled $1.4 million
      and $2.0 million, respectively, all of which relates to the revenue recognized
      but not yet billed or costs deferred on daywork contracts in
      progress.





We
      accrue
      estimated contract costs on footage contracts for each day of work completed
      based on our estimate of the total costs to complete the contract divided by
      our
      estimate of the number of days to complete the contract. Contract costs include
      labor, materials, supplies, repairs and maintenance and operating overhead
      allocations. In addition, the occurrence of uninsured or under-insured losses
      or
      operating cost overruns on our footage contracts could have a material adverse
      effect on our financial position and results of operations. Therefore, our
      actual results could differ significantly if our cost estimates are later
      revised from our original estimates for contracts in progress at the end of
      a
      reporting period that were not completed prior to the release of our financial
      statements.


-14-
 *Table
          of Contents*




***Accounts
      Receivable*** —We
      evaluate the creditworthiness of our customers based on their financial
      information, if available, information obtained from major industry suppliers,
      current prices of oil and natural gas and any past experience we have with
      the
      customer. Consequently, an adverse change in those factors could affect our
      estimate of our allowance for doubtful accounts. In some instances, we require
      new customers to establish escrow accounts or make prepayments. We typically
      invoice our customers at 30-day intervals during the performance of daywork
      contracts and upon completion of the daywork contract. Footage contracts are
      invoiced upon completion of the contract. Our typical contract provides for
      payment of invoices in 10 to 30 days. We generally do not extend payment terms
      beyond 30 days. The Company is currently involved in legal action to collect
      various overdue accounts receivable. Our allowance for doubtful accounts was
      $714,000 and $400,000 at September 30, 2007 and December 31, 2006,
      respectively. Any allowance established is subject to judgment and estimates
      made by management. We determine our allowance by considering a number of
      factors, including the length of time trade accounts receivable are past due,
      our previous loss history, our customer’s current ability to pay its obligation
      to us and the condition of the general economy and the industry as a whole.
      We
      write off specific accounts receivable when they become uncollectible and
      payments subsequently received on such receivables reduce the allowance for
      doubtful accounts.





If
      a
      customer defaults on its payment obligation to us under a footage contract,
      we
      would need to rely on applicable law to enforce our lien rights, because our
      footage contracts do not expressly grant to us a security interest in the work
      we have completed under the contract and we have no ownership rights in the
      work-in-progress or completed drilling work, except any rights arising under
      the
      applicable lien statute on foreclosure. If we were unable to drill to the agreed
      on depth in breach of the contract, we might also need to rely on equitable
      remedies outside of the contract, including quantum meruit, available in
      applicable courts to recover the fair value of our work-in-progress under a
      footage contract.





***Asset
      Impairment and Depreciation*** —We
      review long-lived assets to be held and used for impairment whenever events
      or
      changes in circumstances indicate that the carrying amount of the assets may
      not
      be recoverable. We also evaluate the carrying value of goodwill during the
      fourth quarter of each year and between annual evaluations if events occur
      or
      circumstances change that would more likely than not reduce the fair value
      below
      its carrying amount. Factors that we consider important and could trigger an
      impairment review would be our customers’ financial condition and any
      significant negative industry or economic trends. More specifically, among
      other
      things, we consider our contract revenue rates, our rig utilization rates,
      cash
      flows from our drilling rigs, current oil and natural gas prices, industry
      analysts’ outlook for the industry and their view of our customers’ access to
      debt or equity and the trends in the price of used drilling equipment observed
      by our management. If a review of our drilling rigs, intangible assets and
      goodwill indicate that our carrying value exceeds the estimated undiscounted
      future cash flows, we are required under applicable accounting standards to
      write down the drilling equipment, intangible assets and goodwill to its fair
      market value. A one percent write-down in the cost of our drilling equipment,
      intangible assets and goodwill, at September 30, 2007, would have resulted
      in a
      corresponding decrease in our net income of approximately $2.9
      million.





Our
      determination of the estimated useful lives of our depreciable assets, directly
      affects our determination of depreciation expense and deferred taxes. A decrease
      in the useful life of our drilling equipment would increase depreciation expense
      and reduce deferred taxes. We provide for depreciation of our drilling rigs,
      transportation and other equipment on a straight-line method over useful lives
      that we have estimated and that range from three to fifteen years after the
      rig
      was placed into service. Depreciation commences once a rig is placed in service
      and continues uninterrupted whether the rig is idle or working. Our estimates
      of
      the useful lives of our drilling, transportation and other equipment are based
      on our experience in the drilling industry with similar equipment.





We
      capitalize interest cost as a component of drilling rigs refurbished for our
      own
      use. During the nine months ended September 30, 2007 and year ended
      December 31, 2006, we capitalized approximately $1.3 million and $3.6
      million, respectively.




***Stock
      Based Compensation*** — ****** We
      adopted SFAS No. 123(R), “ *Share-Based
      Payment* ”
upon
      granting our first stock options on August 16, 2005. SFAS No. 123(R)
      requires a public entity to measure the costs of employee services received
      in
      exchange for an award of equity or liability instruments based on the grant-date
      fair value of the award. That cost will be recognized over the periods during
      which an employee is required to provide service in exchange for the award.
      Stock compensation expense was $1.0 million and $2.7 million for the three
      and
      nine months ended September 30, 2007, respectively, and $732,000 and $2.1
      million for the three and nine months ended September 30, 2006, respectively.




The
      fair
      value of each option award is estimated on the date of grant using a
      Black-Scholes valuation model that uses various assumptions related to
      volatility, expected life, forfeitures, exercise patterns, risk-free rates
      and
      expected dividends. Expected volatilities are based on the historical volatility
      of a selected peer and other factors. The majority of our options are held
      by
      employees that make up one group with similar expected exercise behavior for
      valuation purposes. The expected term of options granted is estimated based
      on
      an average of the vesting period and the contractual period. The risk-free
      rate
      for periods within the contractual life of the option is based on the U.S.
      Treasury yield curve in effect at the time of the grant.




We
      have
      not declared dividends since we became a public company and do not intend to
      do
      so in the foreseeable future, and thus did not use a dividend yield. Expected
      life has been determined using the permitted short cut method. In each case,
      the
      actual value that will be realized, if any, will depend on the future
      performance of the common stock and overall stock market conditions. There
      is no
      assurance that the value an optionee actually realizes will be at or near the
      value estimated using the Black-Scholes model.




Under
      our
      stock incentive plans, employee stock options become exercisable in equal
      monthly installments over a three-year period, and all options generally expire
      ten years after the date of grant. The plans provide that all options must
      have
      an exercise price not less than the fair market value of our common stock on
      the
      date of the grant.





***Deferred
      Income Taxes*** —We
      provide deferred income taxes for the basis difference in our property and
      equipment, stock compensation expense, and other items between financial
      reporting and tax reporting purposes. For property and equipment, basis
      differences arise from differences in depreciation periods and methods and
      the
      value of assets acquired in a business acquisition where we acquire the stock
      in
      an entity rather than just its assets. For financial reporting purposes, we
      depreciate the various components of our drilling rigs and refurbishments over
      fifteen years, while federal income tax rules require that we depreciate
      drilling rigs and refurbishments over five years. Therefore, in the first five
      years of our ownership of a drilling rig, our tax depreciation exceeds our
      financial reporting depreciation, resulting in our providing deferred taxes
      on
      this depreciation difference. After five years, financial reporting depreciation
      exceeds tax depreciation, and the deferred tax liability begins to
      reverse.





***Other
      Accounting Estimates*** —Our
      other accrued expenses as of September 30, 2007 and December 31, 2006
      included accruals of approximately $3.2 million and $1.9 million, respectively,
      for costs under our workers’ compensation insurance. We have a deductible of
      $1.0 million per covered accident under our workers’ compensation insurance. Our
      insurance policy requires us to maintain a letter of credit to cover payments
      by
      us of that deductible. As of September 30, 2007 and December 31, 2006, we
      had $2.7 and $2.6 million in letters of credit, respectively. We accrue for
      these costs as claims are incurred based on cost estimates established for
      each
      claim by the insurance companies providing the administrative services for
      processing the claims, including an estimate for incurred but not reported
      claims, estimates for claims paid directly by us, our estimate of the
      administrative costs associated with these claims and our historical experience
      with these types of claims. We also have a self-insurance program for major
      medical hospitalization and dental coverage for employees and their dependents.
      The Company recognizes both reported and incurred but not reported costs related
      to the self-insurance portion of our health insurance. Since the accrual is
      based on estimates of expenses for claims, the ultimate amounts paid may differ
      from accrued amounts.


**Recent
        Highlights**
 
 The
        following are highlights that impacted our liquidity or results of operations
        for the nine months ended September 30, 2007:
  ·
            On
                January 2, 2007, we purchased an approximately 18,100 square foot
                building
                located in Edmond, Oklahoma for a total purchase price of $3.0 million,
                less an amount equal to one-half of the principal reduction on the
                seller’s loan secured by the property between the effective date of the
                purchase agreement and the closing. We paid $1.4 million in cash
                and
                assumed debt of approximately $1.6 million. Prior to closing, we
                subleased
                a total of 9,050 square feet of the building from its tenants until
                the
                closing date for a monthly rental of
                $8,341. 
 ·
            On
                January 9, 2007, we completed the acquisition of 31 workover rigs,
                24 of
                which were operating, from Eagle and related subsidiaries for $2.5
                million
                in cash, 1,070,390 shares of our common stock, and the assumption
                of debt
                of $6.5 million, liabilities of $800,000 and additional deferred
                income
                taxes of $7.7 million. We subsequently deployed the remaining rigs
                periodically during the second and third quarters of
                2007.  -15-
 *Table
            of Contents*
  **Results
          of Operations**
 
 ***Three
        Months Ended September 30, 2007 Compared to Three Months Ended September
        30,
        2006***
  *Contract
        Drilling Revenue.* For
        the three months ended September 30, 2007, we reported contract drilling
        revenues of $70.4 million, a 12% decrease from revenues of $79.8 million
        for the
        same period in 2006. The decrease is primarily due to a decrease in dayrates
        and
        revenue days for the three months ended September 30, 2007 as compared to
        the
        same period in 2006. Average dayrates for our drilling services decreased
        $1,177, or 6%, to $17,256 for the three months ended September 30, 2007 from
        $18,433 in the same period in 2006. Revenue days decreased to 3,739 days
        for the
        three months ended September 30, 2007 from 4,039 days during the same period
        in
        2006. Our average number of operating rigs increased to 53 from 47, or 13%,
        for
        the three months ended September 30, 2007 as compared to the same period
        in
        2006. The decrease in the number of revenue days for the three months ended
        September 30, 2007 as compared to the same period in 2006 is attributable
        to a
        decrease in our rig utilization rate to 76% for the three months ended September
        30, 2007 from 94% for the three months ended September 30, 2006 offset by
        the
        increase in the size of our operating rig fleet due to refurbishments. The
        19%
        decrease in utilization was primarily due to a more competitive market resulting
        from an increase in the supply of drilling rigs.
  *Contract
        Drilling Expense.* Direct
        rig cost increased $549,000 to $39.1 million for the three months ended
        September 30, 2007 from $38.6 million for the same period in 2006. This 1%
        increase is primarily due to the increase in available days as the result
        of the
        increase in average number of operating rigs in our fleet for the three months
        ended September 30, 2007 as compared to the same period in 2006. As a percentage
        of contract drilling revenue, drilling expense increased to 56% for the
        three-month period ended September 30, 2007 from 48% for the same period
        in 2006
        due primarily to expenses related to the retention of crews of idle
        rigs.
  *Depreciation
        Expense.* Depreciation
        expense increased $1.1 million to $9.2 million for the three months ended
        September 30, 2007 from $8.1 million for the same period in 2006. The increase
        is primarily due to the 32% increase in fixed assets, including the deployment
        of seven additional rigs from our inventory and the Eagle acquisition, as
        well
        as incremental increases in ancillary equipment, all of which occurred after
        the
        2006 period. The increase was partially offset by an entry to credit
        depreciation expense for $2.1 million related to the use of an incorrect
        depreciable life of certain rig components that moved between working rigs
        and
        the yard.
  *General
        and Administrative Expense* . General
        and administrative expense increased $662,000 to $5.4 million for the three
        months ended September 30, 2007 from $4.7 million for the same period in
        2006.
        The increase is the result of an increase in bad debt expense of $583,000,
        an
        increase in stock compensation expense of $271,000, an increase in payroll
        costs of $77,000, an increase in rent expense of $75,000, and an increase
        in
        public relations expense of $75,000. The increase in bad debt expense is
        due to
        the specific identification of additional accounts receivable deemed
        uncollectible. The increase in stock compensation expense is attributable
        to
        additional grants of restricted stock during 2007. The increase in payroll
        is
        primarily due to our increased employee count due both to organic growth
        and
        acquisitions as well as selected wage increases. These increases were partially
        offset by a decrease in severance expense of $607,000 related to a payment
        made
        to our former Chief Operating Officer.
  *Interest
        Expense* . Interest
        expense increased $483,000 to $1.0 million for the three months ended September
        30, 2007 from $526,000 for the same period in 2006. The increase is due to
        a
        decrease in the capitalization of interest expense related to our rig
        refurbishment program. We capitalized $366,000 of interest for the three
        months
        ended September 30, 2007 as compared to $855,000 for the same period in 2006
        as
        part of our rig refurbishment program.
  *Income
        Tax Expense* . We
        recorded income tax expense of $7.0 million for the three months ended September
        30, 2007, of which $7.5 million is deferred tax expense, partially offset
        by a
        current tax benefit of $447,000. This compares to a deferred tax expense
        of
        $10.5 million for the three months ended September 30, 2006. This decrease
        is
        due to a decrease in pre-tax income.
 
 ***Nine
        Months Ended September 30, 2007 Compared to Nine Months Ended September 30,
        2006***
  *Contract
        Drilling Revenue.* For
        the nine months ended September 30, 2007, we reported contract drilling revenues
        of $214.3 million, a 5% increase from revenues of $203.4 million for the
        same
        period in 2006. The increase is primarily due to an increase in dayrates
        and
        average number of rigs working for the nine months ended September 30, 2007
        as
        compared to the same period in 2006. Average dayrates for our drilling services
        increased $924, or 5%, to $18,077 for the nine months ended September 30,
        2007
        from $17,153 in the same period in 2006. Our average number of operating
        rigs
        increased to 52 from 43, or 21%, for the nine months ended September 30,
        2007 as
        compared to the same period in 2006. These increases were partially offset
        by a
        decrease in our rig utilization rate to 77% for the nine months ended September
        30, 2007 from 94% for the nine months ended September 30, 2006. This 18%
        decrease was primarily due to a more competitive market resulting from an
        increase in the supply of drilling rigs and unfavorable weather conditions
        during the first six months of 2007. Revenue days decreased slightly to 10,995
        for the nine months ended September 30, 2007 from 11,024 in the same period
        in
        2006.
  *Contract
        Drilling Expense.* Direct
        rig cost increased $21.0 million to $120.4 million for the nine months ended
        September 30, 2007 from $99.5 million for the same period in 2006. This 21%
        increase is primarily due to the increase the average number of operating
        rigs
        in our fleet for the nine months ended September 30, 2007 as compared to
        the
        same period in 2006. As a percentage of contract drilling revenue, drilling
        expense increased to 56% for the nine month period ended September 30, 2007
        from
        49% for the same period in 2006 due primarily to expenses related to the
        retention of crews of idle rigs and an escalation in supply and repair
        costs.
  *Depreciation
        Expense.* Depreciation
        expense increased $10.2 million to $31.3 million for the nine months ended
        September 30, 2007 from $21.1 million for the same period in 2006. The increase
        is primarily due to the 32% increase in fixed assets, including the deployment
        of seven additional rigs from our inventory and the Eagle acquisition, as
        well
        as incremental increases in ancillary equipment, all of which occurred after
        the
        2006 period. The increase was partially offset by an entry to credit
        depreciation expense for $2.1 million related to the use of an incorrect
        depreciable life of certain rig components that moved between working rigs
        and
        the yard.
  *General
        and Administrative Expense* . General
        and administrative expense increased $3.7 million to $15.4 million for the
        nine
        months ended September 30, 2007 from $11.7 million for the same period in
        2006.
        The increase is the result of an increase in bad debt expense of $1.9 million,
        an increase in payroll costs of $614,000, an increase in stock compensation
        expense of $604,000, an increase in yard expense of $558,000, and an increase
        in
        rent expense of $138,000. The increase in bad debt expense is due to the
        specific identification of additional accounts receivable deemed
        uncollectible including one account receivable that was determined to be
        uncollectible in the amount of $842. The increase in yard expense is
        primarily due to the acquisition of Eagle during the first quarter and the
        increase in payroll is primarily due to our increased employee count due
        both to
        organic growth and acquisitions as well as selected wage increases. The increase
        in stock compensation expense is attributable to additional grants of restricted
        stock during 2007. These increases were partially offset by a decrease in
        severance expense of $607,000 related to a payment to our former Chief Operating
        Officer.
  *Interest
        Expense* . Interest
        expense increased $2.4 million to $3.1 million for the nine months ended
        September 30, 2007 from $647,000 for the same period in 2006. The increase
        is
        due to a decrease in the capitalization of interest expense related to our
        rig
        refurbishment program. We capitalized $1.3 million of interest for the nine
        months ended September 30, 2007 as compared to $2.9 million for the same
        period
        in 2006 as part of our rig refurbishment program. The increase is also
        attributable to an increase in the average debt outstanding during the
        respective periods.
  *Income
        Tax Expense* . We
        recorded income tax expense of $19.5 million for the nine months ended September
        30, 2007, of which $15.1 million is deferred tax expense. This compares to
        a
        deferred tax expense of $26.2 million for the nine months ended September
        30,
        2006. This decrease is due to a decrease in pre-tax income.
 
 **Liquidity
        and Capital Resources**
  ***Operating
        Activities*** **.** Net
        cash provided by operating activities was $56.2 million for the nine months
        ended September 30, 2007 as compared to $55.4 million in 2006. The increase
        of
        $823,000 from 2007 to 2006 was primarily due to increased cash receipts from
        customers, partially offset by higher cash payments to employees and suppliers.
  ***Investing
        Activities*** **.** We
        use a significant portion of our cash flows from operations and financing
        activities for acquisitions and the refurbishment of our rigs. Cash used
        for
        investing activities was $52.9 million for the nine months ended September
        30,
        2007 as compared to $112.9 million for the same period in 2006. For the nine
        months ended September 30, 2007, we used $54.1 million to refurbish our drilling
        rigs and $2.3 million to purchase Eagle. These amounts were partially offset
        by
        $3.5 million of proceeds received from the sale of assets. During the 2006
        period, $17.0 million related to the acquisitions and $98.9 million was used
        to
        refurbish drilling rigs. These amounts were partially offset by $3.1 million
        of
        proceeds received from the sale of assets.
 -16-
 *Table
            of Contents*
  ***Financing
        Activities*** **.** Our
        cash flows used in financing activities were $12.2 million for the nine months
        ended September 30, 2007 as compared to $43.8 million provided by financing
        activities for the same period in 2006. For the nine months ended September
        30,
        2007, our net cash used in financing activities related to principal payments
        of
        $24.2 million under our credit agreement with Fortis Capital Corp., partially
        offset by borrowings of $12.0 million under our credit facility with Fortis
        Capital Corp. Our net cash provided by financing activities for the nine
        months
        ended September 30, 2006 related to net proceeds of approximately $36.2 million
        from our follow-on offering, borrowings of $44.0 million under our credit
        agreement with Fortis Capital Corp., partially offset by principal payments
        of
        $30.0 million under our credit facility with Fortis Capital Corp. and $4.6
        million on a promissory note given in connection with our acquisition of
        all of
        the membership interests of Strata Drilling, L.L.C. and Strata Property,
        L.L.C.
        (together, “Strata”) discussed below.
 
 ***Sources
        of Liquidity*** **.** Our
        primary sources of liquidity are cash from operations and debt and equity
        financing.
 
 On
        January 13, 2006, we entered into a $150.0 million revolving credit
        facility with Fortis Capital Corp., as administrative agent, lead arranger
        and
        sole bookrunner, and a syndicate of lenders, which include The Royal Bank
        of
        Scotland plc, The CIT Group/Business Credit, Inc., Calyon Corporate and
        Investment Bank, Merrill Lynch Capital, Comerica Bank and Caterpillar Financial
        Services Corporation. The revolving credit facility matures on January 13,
        2009. The
        initial aggregate revolving commitment of $150.0 million is automatically
        and
        permanently reduced by $10.0 million at the end of each fiscal quarter starting
        September 30, 2006. The aggregate revolving commitment was $100,000 as of
        September 30, 2007. Loans
        under the revolving credit facility bear interest at LIBOR plus a margin
        that
        can range from 2.0% to 3.0% or, at our option, the prime rate plus a margin
        that
        can range from 1.0% to 2.0%, depending on the ratio of our outstanding senior
        debt to “Adjusted EBITDA” as defined in the credit agreement. Our borrowings
        under this revolving credit facility were used to fund a portion of the Big
        A
        acquisition and to repay in full all outstanding borrowings under our term
        loan
        with Merrill Lynch Capital and our revolving line of credit with International
        Bank of Commerce.
 
 The
        revolving credit facility also provides for a quarterly commitment fee of
        0.5% per annum of the unused portion of the revolving credit facility, and
        fees for each letter of credit issued under the facility. Commitment fees
        expense for the three and nine months ended September 30, 2007 were $112,000
        and
        $261,000, respectively. Our subsidiaries have guaranteed the loans and other
        obligations under the revolving credit facility. The obligations under the
        revolving credit facility and the related guarantees are secured by a first
        priority security interest in substantially all of our assets, as well as
        the
        shares of capital stock of our direct and indirect subsidiaries.
 
 The
        revolving credit facility contains customary covenants for facilities of
        this
        type, including among other things, covenants that restrict our ability to
        make
        capital expenditures, incur indebtedness, incur liens, dispose of property,
        repay debt, pay dividends, repurchase shares and make certain acquisitions.
        The
        financial covenants are a minimum fixed charge coverage ratio of 1.75 to
        1.00
        and a maximum total leverage ratio of 2.00 to 1.00. The Company was in
        compliance with all covenants at September 30, 2007. The revolving credit
        facility provides for mandatory prepayments under certain circumstances as
        more
        fully discussed in the revolving credit facility. The revolving credit facility
        contains various events of default, including failure to pay principal and
        interest when due, breach of covenants, materially incorrect representations,
        default under certain other agreements, bankruptcy or insolvency, the occurrence
        of specified ERISA events, entry of enforceable judgments against us in excess
        of $3.0 million not stayed, and the occurrence of a change of control. If
        an
        event of default occurs, all commitments under the revolving credit facility
        may
        be terminated and all of our obligations under the revolving credit facility
        could be accelerated by the lenders, causing all loans outstanding (including
        accrued interest and fees payable thereunder) to be declared immediately
        due and
        payable.
 
 We
        are
        party to term installment loans for an aggregate princi pal
        amount of approximately $6.0 million. These term loans are payable in 96
        monthly
        installments, mature from 2013 - 2015 and have an weighted average annual
        interest rate of 6.94%. The proceeds from these term loans were used to purchase
        cranes.
  We
        are
        party to a term loan agreement with Holliday American Mortgage for an aggregate
        principal amount of approximately $1.6 million related to the acquisition
        of a
        building. This term loan is payable in 166 monthly installments, matures
        in 2021
        and has an interest rate of 6%.
 
 *Issuances
        of Equity.* In
        connection with our acquisition of Eagle we issued 1,070,390 shares of our
        common stock. See “Capital Expenditures” below.
 
 **Capital
        Expenditures.**
 
 During
        2007 we substantially completed the refurbishment of three rigs, ranging
        from
        1,200 to 1,500 horsepower. We incurred refurbishment costs of $23.5 million,
        ranging from $7.0 million to $8.5 million per rig, which were funded with
        borrowings under our various credit facilities and cash flows from operations.
 
 On
        January 2, 2007, we purchased an approximately 18,100 square foot building
        located in Edmond, Oklahoma for cash of $1.4 million and the assumption of
        existing debt of approximately $1.6 million, less one-half of the principal
        reduction on the sellers’ loan secured by the property between the effective
        date and closing. Prior to closing on the building we subleased a total of
        9,050
        square feet of the building from its current tenants for a monthly rental
        of
        $8,341.
 
 On
        January 9, 2007, we completed the acquisition of 31 workover rigs, 24 of
        which
        were operating, from Eagle and related subsidiaries for $2.5 million in cash,
        1,070,390 shares of common stock and the assumption of debt of $6.5 million,
        liabilities of $800,000 and additional deferred income taxes of $7.7 million.
        We
        subsequently deployed the remaining rigs periodically during the second and
        third quarters of 2007.
 
 We
        believe that cash flow from our operations and borrowings under our revolving
        credit facility will be sufficient to fund our operations for at least the
        next
        12 months. However, additional capital may be required for future acquisitions.
        While we would expect to fund such acquisitions with additional borrowings
        and
        the issuance of debt and equity securities, we cannot assure you that such
        funding will be available or, if available, that it will be on terms acceptable
        to us.
 
 **Item 3.
        Quantitative and Qualitative Disclosures About Market
        Risks**
 
 We
        are
        subject to market risk exposure related to changes in interest rates on our
        outstanding floating rate debt. Borrowings under our revolving credit facility
        bear interest at a floating rate equal to LIBOR plus a margin that can range
        from 2.0% to 3.0% or, at our option, the prime rate plus a margin that can
        range
        from 1.0% to 2.0%, depending on the ratio of our outstanding senior debt
        to
        adjusted EBITDA. An increase or decrease of 1% in the interest rate would
        have a
        corresponding decrease or increase in our net income (loss) of approximately
        $338,000 annually, based on the $55.0 million outstanding in the aggregate
        under
        our credit facility as of September 30, 2007.
 
 **** **Item 4.
        Controls and Procedures.**
 
 *Evaluation
        of Disclosure Control and Procedures* .
        As of
        the end of the period covered by this Quarterly Report on Form 10−Q, our
        management, under the supervision and with the participation of our Chief
        Executive Officer and Chief Financial Officer, evaluated the effectiveness
        of
        the design and operation of our disclosure controls and procedures (as defined
        in Rules 13a−15(e) or 15d−15(e) under the Securities Exchange Act of 1934, as
        amended). Based on that evaluation, our Chief Executive Officer and Chief
        Financial Officer concluded that as of September 30, 2007 our disclosure
        controls and procedures are effective.
 
 Disclosure
        controls and procedures are controls and procedures designed to ensure that
        information required to be disclosed in our reports filed or submitted under
        the
        Securities Exchange Act of 1934 is recorded, processed, summarized and reported
        within the time periods specified in the SEC's rules and forms; and include
        controls and procedures designed to ensure that information is accumulated
        and
        communicated to our management, and made known to our Chief Executive Officer
        and Chief Financial Officer, particularly during the period when this Quarterly
        Report on Form 10−Q was prepared, as appropriate to allow timely decision
        regarding the required disclosure.
 
 *Changes
        in Internal Control over Financial Reporting* .
        There
        were no changes in our internal control over financial reporting that occurred
        during the third quarter that have materially affected, or are reasonably
        likely
        to materially affect, our internal control over financial
        reporting.
 -17-
 *Table
            of Contents*
 **PART
          II: OTHER INFORMATION**
 
 **Item 1.
          Legal Proceedings**
 
 Due
          to
          the nature of our business, we are, from time to time, involved in routine
          litigation or subject to disputes or claims related to our business activities,
          including workers’ compensation claims and employment related disputes. In the
          opinion of our management, with the exception of the matters previously
          disclosed in our filings with the SEC, none of the pending litigation,
          disputes
          or claims against us, if decided adversely, will have a material adverse
          effect
          on our financial condition or results of operations.
 
 **Item 1A.
          Risk Factors**
 
 There
          have been no material changes to the Risk Factors previously disclosed
          in our
          Annual Report on Form 10-K for the year ended December 31, 2006 filed
          with the SEC on March 8, 2007.
 
 **Item 2.
          Unregistered Sales of Equity Securities and Use of
          Proceeds**
 
 None,
          except as previously disclosed.
 
 **Item 3.
          Defaults Upon Senior Securities**
 
 None.
 
 **Item 4.
          Submission of Matters to a Vote of Security Holders**
 
 None.
 
 **Item 5.
            Other Information**
 
 None.
 -18-
 *Table
              of Contents*
 **Item 6.
            Exhibits**
  Exhibits:
 **Exhibit**
                      **No.**
                    **Description**2.1
                    Merger
                        Agreement, dated as of August 11, 2005, by and among Bronco
                        Drilling
                        Holdings, L.L.C, Bronco Drilling Company, L.L.C. and Bronco
                        Drilling
                        Company, Inc. (incorporated by reference to Exhibit 2.1 to
                        the
                        Registration Statement on Form S-1, File No. 333-128861,
                        filed by the
                        Company with the SEC on October 6, 2005).2.2
                    Agreement
                        and Plan of Merger by and among the Company, BDC Acquisition
                        Company,
                        Eagle Well Service, Inc. (“Eagle”), and the stockholders of Eagle dated as
                        of January 9, 2007 (incorporated by reference to Exhibit
                        2.1 to the
                        Company’s Current Report on Form 8-K, File No. 000-51471, filed by
                        the
                        Company with the SEC on January 16, 2007).3.1
                    Amended
                        and Restated Certificate of Incorporation of the Company,
                        dated August 11,
                        2005 (incorporated by reference to Exhibit 2.1 to the Registration
                        Statement on Form S-1, File No. 333-128861, filed by the
                        Company with the
                        SEC on October 6, 2005).3.2
                    Bylaws
                        of the Company (incorporated by reference to Exhibit 3.2
                        to Amendment No.
                        1 to the Registration Statement on Form S-1, File No. 333-125405,
                        filed by
                        the Company with the SEC on July 14, 2005).4.1
                    Form
                        of Common Stock certificate (incorporated by reference to
                        Exhibit 4.1 to
                        Amendment No. 2 to the Registration Statement on Form S-1,
                        File No.
                        333-125405, filed by the Company with the SEC on August 2,
                        2005).*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.*32.1
                    Certification
                        of Chief Executive Officer of Bronco Drilling Company, Inc.
                        pursuant to
                        Rule 13a-14(b) promulgated under the Securities Exchange
                        Act of 1934, as
                        amended, and Section 1350 of Chapter 63 of Title 18 of the
                        United States
                        Code.*32.2
                    Certification
                        of Chief Financial Officer of Bronco Drilling Company, Inc.
                        pursuant to
                        Rule 13a-14(b) promulgated under the Securities Exchange
                        Act of 1934, as
                        amended, and Section 1350 of Chapter 63 of Title 18 of the
                        United States
                        Code.
  +  Management
              contract, compensatory plan or arrangement.
 *  Filed
              herewith.
 
 -19-
 *Table
                  of Contents*
 **SIGNATURE**
 
 Pursuant
          to the requirements of the Securities Exchange Act of 1934, the Registrant
          has
          duly caused this report to be signed on its behalf by the undersigned,
          thereunto
          duly authorized.
  Dated:
                    November 1, 2007
                
                **BRONCO
                    DRILLING COMPANY, INC.**By:
                
                /s/
                    ZACHARY M. GRAVESZachary
                    M. GravesChief
                    Financial Officer*(Principal
                    Accounting and Financial Officer)*Dated:
                    November 1, 2007
                
                By:
                
                /s/
                    D. FRANK HARRISOND.
                    Frank HarrisonChief
                    Executive Officer*(Authorized
                    Officer and Principal Executive
                    Officer)*




-20-
 *Table
          of Contents*


**Index
      to Exhibits**





2.1
            Merger
                Agreement, dated as of August 11, 2005, by and among Bronco Drilling
                Holdings, L.L.C, Bronco Drilling Company, L.L.C. and Bronco Drilling
                Company, Inc. (incorporated by reference to Exhibit 2.1 to the
                Registration Statement on Form S-1, File No. 333-128861, filed by
                the
                Company with the SEC on October 6, 2005).2.2
            Agreement
                and Plan of Merger by and among the Company, BDC Acquisition Company,
                Eagle Well Service, Inc. (“Eagle”), and the stockholders of Eagle dated as
                of January 9, 2007 (incorporated by reference to Exhibit 2.1 to the
                Company’s Current Report on Form 8-K, File No. 000-51471, filed by the
                Company with the SEC on January 16, 2007).3.1
            Amended
                and Restated Certificate of Incorporation of the Company, dated August
                11,
                2005 (incorporated by reference to Exhibit 2.1 to the Registration
                Statement on Form S-1, File No. 333-128861, filed by the Company
                with the
                SEC on October 6, 2005).3.2
            Bylaws
                of the Company (incorporated by reference to Exhibit 3.2 to Amendment
                No.
                1 to the Registration Statement on Form S-1, File No. 333-125405,
                filed by
                the Company with the SEC on July 14, 2005).4.1
            Form
                of Common Stock certificate (incorporated by reference to Exhibit
                4.1 to
                Amendment No. 2 to the Registration Statement on Form S-1, File No.
                333-125405, filed by the Company with the SEC on August 2,
                2005).*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.*32.1
            Certification
                of Chief Executive Officer of Bronco Drilling Company, Inc. pursuant
                to
                Rule 13a-14(b) promulgated under the Securities Exchange Act of 1934,
                as
                amended, and Section 1350 of Chapter 63 of Title 18 of the United
                States
                Code.*32.2
            Certification
                of Chief Financial Officer of Bronco Drilling Company, Inc. pursuant
                to
                Rule 13a-14(b) promulgated under the Securities Exchange Act of 1934,
                as
                amended, and Section 1350 of Chapter 63 of Title 18 of the United
                States
                Code.




+  Management
      contract, compensatory plan or arrangement.


*  Filed
      herewith.





-21-