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                                                                   EXHIBIT 10.26


                         EXECUTIVE EMPLOYMENT AGREEMENT


       THIS EXECUTIVE EMPLOYMENT AGREEMENT (this "AGREEMENT") is entered into
by and between Dailey Petroleum Services Corp., a Delaware corporation
("COMPANY"), and J. D. Lawrence  ("EXECUTIVE") on this 27th day of November,
1996, but to be effective on the 27th day of November, 1996 ("Effective Date").


                             W I T N E S S E T H :


       WHEREAS, Company desires to employ Executive and Executive desires to be
employed by Company in the same capacity in which Executive currently serves;

       NOW THEREFORE, in consideration of the premises, mutual covenants and
agreements contained herein, and other good and valuable consideration, the
receipt and sufficiency of which is hereby acknowledged, the parties hereto
hereby agree as follows:


                                   ARTICLE 1
                         TERM AND NATURE OF EMPLOYMENT


       1.1    TERM OF EMPLOYMENT.  Subject to the terms and conditions of this
Agreement, Company hereby employs Executive and Executive hereby accepts
employment with Company for a term beginning on the date on the Effective Date
as set forth above through and including December 31, 1999 (the "INITIAL
TERM"), unless this Agreement and Executive's employment hereunder are sooner
terminated pursuant to Article 5.   On each anniversary of the Effective Date
(a "Renewal Date") the term of this Agreement shall automatically renew and
extend for a period of three years from the Renewal Date (a "Renewal Term")
unless written notice of nonrenewal is delivered from one party to the other at
least sixty days prior to the Renewal Date.  The Agreement shall remain in
force during the Initial Term and any Renewal Term until terminated in
accordance with Article 5.  The Initial Term together with each Renewal Term
shall hereinafter be referred to collectively as the "EMPLOYMENT PERIOD."

       1.2    PRINCIPAL DUTIES.  Executive's employment hereunder shall be in
the capacity of Chairman of the Board.  In such capacity, Executive shall
perform the duties for which he currently is responsible as an executive
officer of Company but shall not be required to devote all of his time and
attention to the affairs of Company.   During the Employment Period, Executive
shall enhance and develop Company's best interests and welfare.  During the
Employment Period, it shall not be a violation of this Agreement for Executive
to (a) serve on corporate, civic, or charitable boards or committees (except
for Boards or committees of a Competing Business (as defined in Section 4.1)),
(b) deliver lectures, fulfill teaching or speaking engagements, (c) manage
personal investments, so
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long as such activities do not materially interfere with performance of
Executive's responsibilities under this Agreement, or travel to represent
Company at various industry or Company functions.

       1.3    PLACE OF PERFORMANCE.  Executive shall perform his duties at such
locations as Executive and Company may agree.

       1.4    AFFILIATES.  The term "AFFILIATES" shall mean any person
controlled by or under common control with Company.


                                   ARTICLE 2
                                  COMPENSATION


       For and in consideration of the performance by Executive of the
services, terms, conditions, covenants and agreements contained in this
Agreement, Company shall pay to Executive at the times, in the amounts and in
the manner herein provided, the following:

       2.1    BASE COMPENSATION.  As the principal consideration for the
services to be performed by Executive hereunder during the Employment Period,
Executive shall be entitled to receive as base compensation from Company a
salary of not less than Eight Thousand Three Hundred and Thirty-Three and
33/100 Dollars ($8,333.33) per month (the "BASE SALARY"), which shall be
prorated for any partial employment period and payable in the manner and on the
timetable in which Company's payroll is customarily handled, or at such more
frequent intervals as Company and Executive may hereafter agree to from time to
time.  No overtime compensation shall be payable to Executive.  Company's Board
of Directors shall review Executive's performance at least annually and shall
make any adjustments to Executive's compensation that it deems, in its sole
discretion, appropriate, provided that at no time during the Employment Period
shall Executive's compensation be adjusted to an amount below the Base Salary.
Company shall be entitled to withhold from all amounts of compensation payable
under this Article 2 such amounts on account of payroll taxes and similar
matters as are required by any applicable law, rule, or regulation of any
appropriate governmental authority.  Such compensation shall continue to be
paid during any period of physical or mental incapacity unless and until
Executive's employment is terminated as herein provided.

       2.2    STOCK GRANT AND OPTION.   The Company may in its sole discretion,
grant options to Executive in accordance with Company's 1996 Key Employee Stock
Plan.

       2.3    BONUSES AND BENEFITS.  In addition to the Base Salary and stock
grant and option described above, Company shall provide Executive with the
following during the Employment Period:

              (a)      Bonuses, when and based upon or subject to such terms
       and conditions as Company's Board of Directors, in its sole and absolute
       discretion, may determine;





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              (b)      Participation in any present or future disability,
       medical, health, dental, insurance, pension, profit-sharing, thrift,
       retirement, investment, and stock appreciation plans, and any other
       benefit, bonus or compensation plans on the same terms generally
       available to all of Company's Executives generally or its executive
       officers in particular;

              (c)      Payment or reimbursement, as the case may be, of
       reasonable business expenses (within limits that may be established by
       Company's Board of Directors) incurred in connection with the
       performance of his duties hereunder, such expense payment or
       reimbursement being subject to, and made in accordance with Company's
       policies and procedures of Executive expense payment or reimbursement in
       effect from time to time;

              (d)    Access to and use of Company's health club facility in
       accordance with the policies and procedures governing such facility;

              (e)    At the option of Executive each year either (1) use of a
       current model Company vehicle comparable to a fully equipped Cadillac,
       plus reimbursement of the full cost of repairs, maintenance, gasoline,
       oil and cleaning, or (2) an automobile allowance of $2,500 per month;

              (f)    Use of a Company paid full memberships in local area
       country clubs of the Executive's choice, provided that the aggregate
       expenses of such memberships do not exceed $1,500 per month; and

              (g)    Reimbursement of the reasonable costs of tuition, books
       and travel incurred for Executive's continuing education in general
       business or continuing professional education.  For each fiscal year
       during the Employment Period the reimbursement shall not exceed ten
       percent of Executive's annual base compensation as set forth in Section
       2.1.

              (h)    Personal use by Executive and Executive's immediate family
       of any aircraft owned or leased by Company, provided that any personal
       use of Company aircraft shall be subject to the following, (i) all use
       shall be governed by the Company's policies governing flight operations
       and safety rules, (ii) all personal use shall be subject to business
       purpose flight scheduling, and in the event of scheduling conflict the
       Company's flights for official business shall supersede any personal
       use, (iii) for any calendar year during the Employment Period the total
       number of flight hours taken by Executive and Executive's immediate
       family shall not exceed 120 hours. Nothing herein shall be construed to
       obligate Company to own or lease any aircraft during the term of this
       Agreement.

       2.4    VACATION.    During the Employment Period, Executive shall accrue
paid vacation time in such amounts and at such times as determined by Company's
Board of Directors, in its sole discretion; provided, however, that the minimum
amount of paid vacation to which Executive shall be entitled shall be no less
than that to which he is entitled as an Executive of Company  immediately prior
to the effective date of this Agreement.  If such vacation time is not taken by
Executive during





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the term of this Agreement, Executive may, at his option, receive a lump sum
payment of cash value of the vacation pay in lieu thereof, or carry the
vacation time forward.


                                   ARTICLE 3
                   CONFIDENTIAL INFORMATION; PROPERTY RIGHTS


       3.1    NON-DISCLOSURE OBLIGATION OF EXECUTIVE.  For purposes of this
Article 3, all references to Company shall mean and include its Affiliates (as
defined in Section 1.4)  Executive hereby acknowledges, understands and agrees
that whether developed by Executive or others employed by or in any way
associated with Executive or Company, all Confidential Information, as defined
in Section 3.2, is the exclusive and confidential property of Company and shall
be at all times regarded, treated and protected as such in accordance with this
Agreement.  Executive acknowledges that all such Confidential Information is in
the nature of a trade secret.  Failure to mark any writing confidential shall
not affect the confidential nature of such writing or the information contained
therein.

       3.2    DEFINITION OF CONFIDENTIAL INFORMATION.  "CONFIDENTIAL
INFORMATION" shall mean information, whether or not originated by Executive,
which is used in Company's business and (a) is proprietary to, about or created
by Company; (b) gives Company some competitive business advantage or the
opportunity of obtaining such advantage, or the disclosure of which could be
detrimental to the interests of Company; (c) is designated as Confidential
Information by Company, known by the Executive to be considered confidential by
Company, or from all the relevant circumstances considered confidential by
Company, or from all the relevant circumstances should reasonably be assumed by
Executive to be confidential and proprietary to Company; or (d)  is not
generally known by non-Company personnel.  Such Confidential Information
includes, but is not limited to, the following types of information and other
information of a similar nature (whether or not reduced to writing or
designated as confidential):

              1.     Work product resulting from or related to work or projects
       performed or to be performed for Company or for clients of Company,
       including but not limited to data bases, draft and other non-public
       written documents, the interim and final lines of inquiry, hypotheses,
       research and conclusions related thereto and the methods, processes,
       procedures, analyses, techniques and audits used in connection
       therewith;

              2.     Computer software of any type or form in any stage of
       actual or anticipated research and development, including but not
       limited to programs and program modules, routines and subroutines,
       processes, algorithms, design concepts, design specifications (design
       notes, annotations, documentation, flowcharts, coding sheets, and the
       like), source codes, object codes and load modules, programming, program
       patches and system designs;





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              3.     Information relating to Company's proprietary rights prior
       to any public disclosure thereof, including but not limited to the
       nature of the proprietary rights, production data, technical and
       engineering data, test data and test results, the status and details of
       research and development of products and services, and information
       regarding acquiring, protecting, enforcing and licensing proprietary
       rights (including, without limitation, patents, copyrights and trade
       secrets);

              4.     Internal Company personnel and financial information,
       vendor names and other vendor information (including vendor
       characteristics, services and agreements), purchasing and internal cost
       information, internal service and operational manuals, and the manner
       and methods of conducting Company's business;

              5.     Marketing and development plans, price and cost data,
       price and fee amounts, pricing and billing policies, quoting procedures,
       marketing techniques and methods of obtaining business, forecasts and
       forecast assumptions and volumes, and future plans and potential
       strategies of Company which have been or are being discussed;

              6.     Names of customers and their representatives, contracts
       and their contents and parties, customer services, and the type,
       quantity, specifications and contents of products and services
       purchased, leased, licensed or received by customers of Company;

              7.     Information provided to Company by any actual or potential
       customer, government agency, or other third party (including businesses,
       consultants and other entities and individuals); and

              8.     Contracts with, or developed by Company for use with,
       agents of Company, including, without limitation, the terms and
       conditions thereof.

       3.3    EXCLUSIONS FROM CONFIDENTIAL INFORMATION.  "CONFIDENTIAL
INFORMATION" shall not include information publicly known other than as a
result of a disclosure by Executive in breach of Section 3.1, and the general
skills and experience gained during Executive's work with Company which
Executive could reasonably have been expected to acquire in similar work with
another company.  The phrase "PUBLICLY KNOWN" shall mean readily accessible to
the public in a written publication and, shall not include information which is
only available by a substantial searching of the published literature or
information the substance of which must be pieced together from a number of
different publications and sources.  The burden of proving that information or
skills and experience are not Confidential Information shall be on the party
asserting such exclusion.

       3.4    COVENANTS OF EXECUTIVE.  As a consequence of Executive's
acquisition or anticipated acquisition of Confidential Information, Executive
will occupy a position of trust and confidence with respect to Company's
affairs and business.  In view of the foregoing and of the consideration to be
provided to Executive, Executive agrees that it is reasonable and necessary
that Executive make the following covenants:





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              (a)    At any time during or after the termination of the
       Employment Period, Executive will not disclose Confidential Information
       to any person or entity, either inside or outside of Company, other than
       as necessary in carrying out duties on behalf of Company, without
       obtaining Company's prior written consent (unless such disclosure is
       compelled pursuant to court order or subpoena, and at which time
       Executive gives notice of such proceedings to Company), and Executive
       will take all reasonable precautions to prevent inadvertent disclosure
       of such Confidential Information.  This prohibition against Executive's
       disclosure of Confidential Information includes, but is not limited to,
       disclosing the fact that any similarity exists between the Confidential
       Information and information independently developed by another person or
       entity, and Executive understands that such similarity does not excuse
       Executive from abiding by his covenants or other obligations under this
       Agreement.

              (b)    At any time during or after the termination of the
       Employment Period, Executive will not use, copy or transfer Confidential
       Information other than as necessary in carrying out his duties on behalf
       of Company, without first obtaining Company's prior written consent, and
       will take all reasonable precautions to prevent inadvertent use, copying
       or transfer of such Confidential Information.  This prohibition against
       Executive's use, copying, or transfer of Confidential Information
       includes, but is not limited to, selling, licensing or otherwise
       exploiting, directly or indirectly, any products or services (including
       data bases, written documents and software in any form) which embody or
       are derived from Confidential Information, or exercising judgment in
       performing analyses based upon knowledge of Confidential Information.

       3.5    RETURN OF CONFIDENTIAL MATERIAL.  Executive shall turn over to
Company all originals and copies of materials containing Confidential
Information in the Executive's possession, custody, or control upon request or
upon termination of the Executive's employment with Company.  Executive agrees
to attend a termination interview with the General Counsel to confirm turnover
of such materials and to discuss any questions the undersigned may have about
his continuing obligations under this Agreement.

       3.6    INVENTIONS.  Any and all inventions, products, discoveries,
improvements, copyrightable works, trademarks, service marks, ideas, processes,
formulae, methods, designs, techniques or trade secrets (collectively
hereinafter referred to as "INVENTIONS") made, developed, conceived or
resulting from work performed by Executive (alone or in conjunction with
others, during regular hours of work or otherwise) while he is employed by
Company and which may be directly or indirectly useful in, or related to, the
business of Company (including, without limitation, research and development
activities of Company), or which are made using any equipment, facilities,
Confidential Information, materials, labor, money, time or other resources of
Company, shall be promptly disclosed by Executive to the President, shall be
deemed Confidential Information for purposes of this Agreement, and shall be
Company's exclusive property.  Executive shall, upon Company's request, execute
any documents and perform all such acts and things which are necessary or
advisable in the opinion of Company to cause issuance of patents to, or
otherwise obtain recorded





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protection of right to intellectual property for, Company with respect to
Inventions that are to be Company's exclusive property under this Section 3.6,
or to transfer to and vest in Company full and exclusive right, title and
interest in and to such Inventions; provided, however, that the expense of
securing any such protection of right to Inventions shall be borne by Company.
In addition, Executive shall, at Company's expense, assist Company in any
proper manner in enforcing any Inventions which are to be or become Company's
exclusive property hereunder against infringement by others.  Executive shall
keep confidential and will hold for Company's sole use and benefit any
Invention that is to be Company's exclusive property under this Section 3.6 for
which full recorded protection of right has not been or cannot be obtained.


                                   ARTICLE 4
                                  TERMINATION


4.1    COMPANY TERMINATION

              (a)    Notwithstanding any other provision of this Agreement, at
       any time during the Employment Period, including, without limitation,
       the Initial Term, this Agreement and Executive's employment hereunder
       shall terminate upon his death, and Company shall have the right, in its
       sole and absolute discretion, to terminate this Agreement and
       Executive's employment hereunder at any time by giving him written
       notice of such termination (1) for "Cause" (as defined below),  or (2)
       if Executive shall suffer a Disability (as defined below).

              (b)    "CAUSE" shall mean any of the following events:

                     1.     An act or acts of personal dishonesty taken by the
              and intended to result in substantial personal enrichment of the
              Executive at the expense of the Company;

                     2.     Repeated violations by the Executive of Executive's
              obligations under this Agreement which are demonstrably willful
              on the Executive's part, and for which Executive has received
              more than one written warning that specifies each area of
              Executive's violations, or

                     3.     The conviction of the Executive of a felony.

              (c)    "DISABILITY" shall mean any mental or physical illness,
       impairment or condition which incapacitates the Executive for a
       continuous period of three (3) months.

       4.2    TERMINATION BY EITHER PARTY.  Subject to the provisions of
Section 4.3(a), Company may at any time, for any reason, with or without Cause,
terminate this Agreement and Executive's employment hereunder.  Each of
Company's and Executive's option to terminate this Agreement





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pursuant to this Section 4.2 shall be exercised by delivery of a written notice
to Executive or Company, as applicable, specifying the effective date of such
termination which in no event shall be sooner than expiration of thirty (30)
calendar days following delivery of such written notice.

       4.3    EFFECT OF TERMINATION.

              (a)    If Company terminates this Agreement for any reason other
       than pursuant to the terms of Section 4.1 and such termination is not
       within [1] year of a Change in Control (as defined in 4.3(b) below),
       then Company shall pay to Executive an amount equal to the greater of
       (1) his total Base Salary for the remainder of the Employment Period, or
       (2) which shall be the greater of (a) three months of his Base Salary or
       (b) one month of Base Salary for each full year of service completed
       with Company as of the date of termination.  Company shall, make such
       payment in one lump sum on the effective date of termination.

              (b)    If Company terminates this Agreement for any reason other
       than pursuant to the terms of Section 4.1 and such termination occurs
       within [1] year of the occurrence of a Change in Control, then Company
       shall pay to Executive an amount equal to the greater of (1) his total
       Base Salary for the remainder of the Employment period; (2) two times
       the greater of (a) his annualized Base Salary in effect upon the
       occurrence of the Change in Control or (b) his annualized Base Salary in
       effect on the date of notice termination is received; or (3) one month
       of Base Salary for each full year of service completed with the Company
       as of the date of termination.  A "Change in Control" shall be deemed to
       have occurred at any time after the date of this Agreement that (i) any
       person (other than those persons who own more than 10% of the combined
       voting power of the Company's outstanding voting securities on the date
       hereof) becomes the beneficial owner, directly or indirectly, of 30% or
       more of the combined voting power of the Company's then outstanding
       voting securities, or (ii) individuals who at the beginning of any
       period of two consecutive years constitute the Company's Board of
       Directors cease for any reason to constitute a majority of such Board of
       Directors at any time during such two-year period.

              (c)    If Executive terminates this Agreement for Good Cause
       (defined below) and such termination occurs within one year of the
       occurrence of a Change in  Control, then Company shall pay to Executive
       an amount equal to the greater of (1) his total Base Salary for the
       remainder of the Employment Period; (2) two times the greater of (a) his
       annualized Base Salary in effect upon the occurrence of the Change in
       Control or (b) his annualized Base Salary in effect on the date of
       notice termination is received; or (3) one month of Base Salary for each
       full year of service completed with the Company as of the date of
       termination.  "Good Cause" shall mean the occurrence of any of the
       following events:

                     (i)    the assignment by Company to the Executive of
              duties that are materially inconsistent with the Executive's
              office with Company at the time of such assignment, or the
              removal by Company from the Executive of a material portion of
              those duties usually appertaining to the Executive's office with
              Company at the time





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              of such removal;

                     (ii)   a material change by Company, without the
              Executive's prior written consent, in the Executive's
              responsibilities to Company, as such responsibilities are
              ordinarily and customarily required from time to time of a senior
              officer of a corporation engaged in Company's business;

                     (iii)  any removal of the Executive from, or any failure
              to reelect or to reappoint the Executive to, the office stated in
              Section 1.2;

                     (iv)   Company's direction that the Executive discontinue
              service (or not seek reelection or reappointment) as a director,
              officer or member of any corporation or association of which the
              Executive is a director, officer, or member at the date of this
              Agreement;

                     (v)    a reduction by Company in the amount of the
              Executive's salary in effect at the time of the occurrence of a
              Change in Control or the failure of Company to pay such salary to
              the Executive at the time and in the manner specified in this
              Agreement;

                     (vi)   other than with respect to the annual performance
              bonus specified in  Article 2 or, as made with the Executive's
              prior written consent, the discontinuance (without comparable
              replacement) or material reduction by Company of the Executive's
              participation in any bonus or other employee benefit arrangement
              (including, without limitation, any profit-sharing, thrift, life
              insurance, medical, dental, hospitalization, stock option or
              retirement plan or arrangement) in which the Executive is a
              participant under the terms of this Agreement, as in effect on
              the date hereof or as may be improved from time to time
              hereafter;

                     (vii)  the moving by Company of the Executive's principal
              office space, related facilities, or support personnel, from
              Company's principal operating offices, or Company's requiring the
              Executive to perform a majority of his duties outside Company's
              principal operating offices for a period of more than 30
              consecutive days;

                     (viii) the relocation, without the Executive's prior
              written consent, of Company's principal operating offices to a
              location outside the county in which such offices are located at
              the time of the signing of this Agreement;

                     (ix)   in the event Company requires the Executive to
              reside at a location more than 25 miles from Company's principal
              operating offices, except for occasional travel in connection
              with Company business to an extent and in a manner which is
              substantially consistent with the Executive's current business
              travel obligations;





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                     (x)    in the event the Executive consents to a relocation
              of Company's principal operating offices, the failure of Company
              to (A) pay or reimburse the Executive  on an after-tax basis for
              all reasonable moving expenses incurred by the Executive in
              connection with such relocation or (B) indemnify the Executive on
              an after-tax basis against any loss realized by the Executive on
              the sale his principal residence in connection with such
              relocation;

                     (xi)   the failure of Company to continue to provide the
              Executive with office space, related facilities and support
              personnel (including, without limitation, administrative and
              secretarial assistance) that are commensurate with the
              Executive's responsibilities to and position with Company.

                     (xii)  the failure by Company to promptly reimburse the
              Executive for the reasonable business expenses incurred by the
              Executive in the performance of his duties for Company, in
              accordance with this Agreement.

              (d)    Subject to the provisions of Section 4.3(a) or (b), upon
       termination of this Agreement and Executive's employment hereunder by
       either Company or Executive, Executive shall have no right to receive
       any compensation or benefits for any period subsequent to the effective
       date of such termination, or for any period prior to such date which
       have not been earned or vested as of such date except as may be provided
       for in any employee benefit plan relating to such benefits, including
       the Company's 1996 Key Employee Stock Plan.

              (e)    Company's right of termination shall be in addition to and
       shall not affect Executive's rights and remedies under Articles 3 and 4,
       and Section 6.1 of this Agreement, and such rights and remedies shall
       survive termination of Executive's employment hereunder.


                                   ARTICLE 5
                                 MISCELLANEOUS


       5.1    INJUNCTIVE RELIEF.  Because of the unique nature of the
Confidential Information, Executive acknowledges, understands and agrees that
Company will suffer immediate and irreparable harm if Executive fails to comply
with any of his obligations under Article 3 of this Agreement, and that
monetary damages will be inadequate to compensate Company for such breach.
Accordingly, Executive agrees that Company shall, in addition to any other
remedies available to it at law or in equity, be entitled to temporary,
preliminary, and permanent injunctive relief to enforce the terms of Article 3
without the necessity of proving inadequacy of legal remedies or irreparable
harm.





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       5.2    ACTION BY AND CONSENT OF COMPANY.  All rights and remedies of
Company hereunder shall be exercised by the Company solely by Company's Board
of Directors.

       5.3    NOTICES.  Any notice, instruction, authorization, request or
demand required hereunder shall be in writing, and shall be delivered either by
personal delivery, by telegram, telex, telecopy or similar facsimile means, by
certified or registered mail, return receipt requested, or by courier or
delivery service, addressed to the parties hereto at the principal offices of
Company at the address indicated beneath its signature on the execution page of
this Agreement, and also to Executive at his home address indicated beneath his
signature on the execution page of this Agreement, or at such other address and
number as a party shall have previously designated by written notice given to
the other party in the manner hereinabove set forth.  Notices shall be deemed
given when received, if sent by facsimile means (confirmation of such receipt
by confirmed facsimile transmission being deemed receipt of communications sent
by facsimile means); and when delivered and receipted for (or upon the date of
attempted delivery where delivery is refused), if hand-delivered, sent by
express courier or delivery service, or sent by certified or registered mail,
return receipt requested.

       5.4    AMENDMENT AND WAIVER.  This Agreement may be amended, modified or
superseded only by written instrument executed by all parties hereto.  Any
waiver of the terms, provisions, covenants, representations, warranties, or
conditions hereof shall be made only by a written instrument executed and
delivered by the party waiving compliance.  Any waiver granted by Company shall
be effective only if executed and delivered by a duly authorized executive
officer of Company other than Executive.  The failure of any party at any time
or times to require performance of any provisions hereof, shall in no manner
effect the right to enforce the same.  No waiver by any party of any condition
or provision, or the breach of any term, provision, representation, or warranty
contained in this Agreement in one or more instances shall be deemed to be or
construed as a further or continuing waiver of any such condition or breach or
a waiver of any other condition or the breach of any other term, provision,
covenant, representation, or warranty.

       5.5    SUCCESSORS AND ASSIGNS.  All of the terms, provisions, covenants,
representations, warranties, and conditions of this Agreement shall bind, be
enforceable by, and inure to the benefit of, the parties hereto, but this
Agreement and the rights and obligations hereunder shall not be assignable or
delegable by any party; provided, however, that this Agreement and all of
Company's rights and obligations hereunder may be assigned or delegated by it,
in whole, but not in part, to, and shall be binding upon and inure to the
benefit of, any of its successors or assigns, but such assignment or delegation
by Company shall not relieve it of any of its obligations hereunder.

       5.6    DEFINITIONS, GENDER AND CERTAIN REFERENCES.  As used in this
Agreement, each parenthetically or quoted capitalized term in the introduction,
recitals and other Sections of this Agreement shall have the meaning so
ascribed to it.  Whenever the context requires, the gender of all words used
herein shall include the masculine, feminine and neuter, and the number of all
words shall include the singular and plural.  References to Articles or
Sections shall be to Articles or Sections of this Agreement unless otherwise
specified.  The headings and captions used in this Agreement are solely for
convenient reference and shall not affect the meaning or interpretation of





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any article, section or paragraph herein, or this Agreement.  The terms
"hereof," "herein" or "hereunder" shall refer to this Agreement as a whole and
not to any particular Section.

       5.7    GOVERNING LAW AND SEVERABILITY.  This Agreement has been executed
and is performable in Montgomery County, Texas.  The validity, interpretation,
construction, and performance of this Agreement shall be governed by the
internal law, and not the law of conflicts, of the State of Texas.  Each party
hereto hereby acknowledges and agrees that it has had the opportunity to
consult with its own legal counsel in connection with the negotiation of this
Agreement, and that it has bargaining power equal to that of the other party
hereto in connection with the negotiation, execution and delivery of this
Agreement.  Accordingly, the parties hereto agree that the rule of contract
construction that an agreement shall be construed against the drafter shall
have no application in the construction or interpretation of this Agreement.
The invalidity of any provision of this Agreement shall not affect any other
provision of this Agreement, which shall remain in full force and effect, nor
shall the invalidity of a portion of any provision of this Agreement affect the
balance of such provision.

       5.8    EXPENSES.  Each party hereto shall pay all of its respective fees
and expenses of attorneys, accountants and other persons employed by it in
connection with the resolution of any dispute between the parties hereto
arising out of or relating to this Agreement.

       5.9    ENTIRE AGREEMENT.  No agreements or representations, oral or
otherwise, express or implied, have been made by any party hereto with respect
to the subject matter hereof that are not set forth expressly in this
Agreement.  This Agreement supersedes and cancels any prior agreement,
arrangement or understanding entered into between Company and Executive
relating to the subject matter hereof, except any agreement entered into
pursuant to Company's 1996 Incentive Option Plan as contemplated by Section 2.2
of this Agreement.

       5.10   COUNTERPARTS.  The parties may execute this Agreement in any
number of counterparts, each of which is an original, but all of which together
constitute one and the same instrument.

       5.11   RESOLUTION OF DISPUTES.

              (a)    NEGOTIATION.  Except as otherwise provided in this
       Agreement, the parties shall attempt in good faith to resolve any
       dispute out of our relating to this Agreement promptly by negotiations
       between Executive and the representative of Company's Board of Directors
       who has authority to settle the controversy (herein the "SETTLEMENT
       REPRESENTATIVE").  Any party may give the other disputing party written
       notice of any dispute not resolved in the normal course of business.
       Within five days after the effective date of that notice, Executive and
       the Settlement Representative shall agree upon a mutually acceptable
       time and place to meet and shall meet at that time and place, and
       thereafter as often as they reasonably deem necessary, to exchange
       relevant information and to attempt to resolve the dispute.  The first
       of those meetings shall take place within 30 days of the





                                       12
<PAGE>   13
       effective date of the disputing party's notice.  If the matter has not
       been resolved within 60 days of the disputing party's notice, or if the
       parties fail to agree on a time and place for the initial meeting within
       five days of that notice, any party may initiate mediation of the
       controversy or claim as provided hereinafter.  If a negotiator intends
       to be accompanied at a meeting by an attorney, the other negotiators
       shall be given at least three business days' notice of that intention
       and may also be accompanied by an attorney.  All negotiations pursuant
       to this Section 5.11 shall be treated as compromise and settlement
       negotiations for the purposes of federal and state rules of evidence and
       procedure.

              (b)    ARBITRATION.   Any dispute arising out of, relating to or
       in any way touching upon this Agreement or the breach, termination or
       validity hereof, that has not been resolved by non-binding procedures as
       provided in Section 5.11(a) within 60 days of the initiation of the
       negotiation shall be resolved by binding the arbitration in accordance
       with the following provisions of this Section 5.11, provided, however,
       that either party may seek injunctive relief or other equitable relief
       to preserve the status quo pending arbitration.

                     (i)    Either party to this Agreement may submit any
              dispute which is subject to arbitration under this Section 5.11
              by giving notice by such other party, each party shall appoint
              one arbitrator, and within ten business days thereafter the two
              arbitrators so appointed shall select a third arbitrator.  If
              either party shall fail to make such appointment within such ten-
              business day period, the other party may request the American
              Arbitration Association to appoint the second arbitrator.  If the
              two appointed arbitrators shall fail to select a third arbitrator
              within said ten-business day period, the parties hereto shall
              mutually select the third arbitrator.  If the parties are unable
              to agree upon such selection within ten business days, then
              either party may, upon at least five business days' prior written
              notice to the other party, request the American Arbitration
              Association to appoint the third arbitrator.  The American
              Arbitration Association may thereupon appoint the third
              arbitrator.  All arbitrators shall be impartial and unrelated,
              directly or indirectly, so far as employment of services is
              concerned to either of the parties or any of their respective
              Affiliates.  The arbitration shall be conducted in accordance
              with the Commercial Arbitration Rules of the American Arbitration
              Association, as then in effect, except as otherwise provided in
              this Section 5.11.  The arbitration shall take place in Conroe,
              Montgomery County, Texas or such other location as the parties
              may agree.

                     (ii)   The three arbitrators shall investigate the facts
              and shall hold hearings at which the parties hereto may present
              evidence and arguments, be represented by counsel and conduct
              cross examination.  The three arbitrators shall render a written
              decision on the matter presented to them by majority vote as soon
              as practicable after the appointment of the third arbitrator and
              in any event both parties shall request the arbitrators to render
              such decision not more than 60 days after such appointment.  The
              decision of the arbitrators, which may include equitable relief,
              shall be final and binding on the parties hereto, and judgment
              upon the decision may be entered in any





                                       13
<PAGE>   14
              court having jurisdiction thereof.  If the three arbitrators
              shall fail to render a decision within 120 days after such
              appointment, either party may institute such action or proceeding
              in such court as shall be appropriate in the circumstances and
              upon the institution of such action, the arbitration proceeding
              shall be terminated and shall be of no further force and effect.
              The prevailing party awarded reasonable attorneys' fees, expert
              and nonexpert witness costs and expenses, and other costs and
              expenses incurred in connection with the arbitration, and the
              fees and costs of the arbitrators shall be borne by the
              nonprevailing party unless, in either case, the arbitrators for
              good cause determine otherwise.  In resolving any dispute, the
              arbitrators shall apply the provisions of this agreement, without
              varying therefrom in any respect.  The arbitrators shall not have
              the power to add to, modify or change any of the provisions of
              this Agreement.

       IN WITNESS WHEREOF, the parties have caused this Agreement to be
executed on the date first above written.



                                    COMPANY:                                 
                                                                             
                                    DAILEY PETROLEUM SERVICES CORP.          
                                                                             
                                                                             
                                                                             
                                    By:    /s/ JAMES F. FARR
                                       ------------------------------------
                                    Name:  JAMES F. FARR
                                         ----------------------------------
                                    Title: PRESIDENT
                                          ---------------------------------
                                                                             
                                    Address:       One Lawrence Center       
                                                   P. O. Box 1863            
                                                   2507 North Frazier        
                                                   Conroe, Texas  77305      
                                                                             
                                    EXECUTIVE:                               
                                                                             
                                                                             
                                                                             
                                    /s/ J.D. LAWRENCE
                                    ---------------------------------------
                                    Name:          J. D. Lawrence            
                                    Address:       #58 Country Hill          
                                                   Conroe, Texas  77304      
                                                                             
                                    
                                    



                                       14
<PAGE>   15



                             COMPANY ACKNOWLEDGMENT

STATE OF TEXAS              )
                            )
COUNTY OF MONTGOMERY        )

       Before me, the undersigned authority, on this date personally appeared
James F. Farr, President of Dailey Petroleum Services Corp., a Delaware
corporation, known to me to be the person whose name is subscribed to the
foregoing instrument, and acknowledged to me that he executed the same for the
purposes and consideration therein expressed, in the capacity stated, and as
the act and deed of said corporation.

Given under my hand and seal this 27th day of November, 1996.



                                               /s/ VIRGINIA J. CROSS           
                                               --------------------------------
                                               Notary Public in and for        
                                               The State of Texas              
                                                                               
                                               My Commission Expires: 5-21-2000 



                            EXECUTIVE ACKNOWLEDGMENT

STATE OF TEXAS              )
                            )
COUNTY OF MONTGOMERY        )

       Before me, the undersigned authority, on this date personally appeared
J. D. Lawrence, known to me to be the person whose name is subscribed to the
foregoing instrument, and acknowledged to me that he executed the same for the
purposes and consideration therein expressed.

Given under my hand and seal this 27th day of November, 1996.



                                               /s/ VIRGINIA J. CROSS           
                                               --------------------------------
                                               Notary Public in and for        
                                               The State of Texas              
                                                                               
                                               My Commission Expires: 5-21-2000 




                                       15