EXHIBIT 10.12


                          BLACK WARRIOR WIRELINE CORP.
                                P.O. Drawer 9188
                           Columbus, Mississippi 39705
                                 (601) 329-1047
                               Fax: (601) 329-1089





                                                     September 20, 1996





Pangaea Investment Consultants, Ltd.
48 Par-la-ville Road - Suite 213
Hamilton, HM 11, Bermuda

                  Re:      BLACK WARRIOR WIRELINE CORP. (THE "COMPANY")
                           REORGANIZATION AGREEMENT DATED NOVEMBER 22, 1995
                           (THE "REORGANIZATION AGREEMENT")

Dear Sirs:

         1.  Reference  is  made  to the  above  Reorganization  Agreement.  You
herewith confirm that, as of the date hereof,  you hold $-0- principal amount of
the Company's  indebtedness  (the  "Indebtedness")  owing to you. As provided in
Section 4 of the  Reorganization  Agreement,  concurrently  with  executing this
letter  agreement in the space  provided  below,  you transfer and assign to the
Company such  Indebtedness in exchange for -0- shares (one (1) share for each $2
of  Indebtedness  exchanged)  of the  Company's  duly  issued,  fully  paid  and
non-assessable shares of Common Stock. Such shares are issued to you in reliance
upon the  exemption  from  registration  contained  in  Section  3(a)(9)  of the
Securities  Act of 1933 (the  "Act"),  as  amended,  and on the basis that it is
understood  that  such  Indebtedness  has been  held by you  since  1991,  it is
understood and agreed that such shares may be immediately resold by you pursuant
to an exemption from the Act.



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September 20, 1996
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          You further represent and warrant to the Company as follows:

          (i)  the  Indebtedness   exchanged   pursuant  to  the  Reorganization
          Agreement   and  this  letter   agreement   constitutes   all  of  the
          Indebtedness of the Company held by you;

          (ii) you, by your signature hereto, release, discharge and forgive the
          Company  from any claim for the payment of interest  and  penalties on
          the Indebtedness accruing to the date hereof;

          (iii) you release and  discharge  the Company from any and all claims,
          liabilities,  and all  other  obligations  whatsoever,  contingent  or
          otherwise,  accruing to or held by you at any time up to and including
          the date hereof,  except for the obligations of the Company  expressly
          set forth herein; and

          (iv) with the delivery of shares of stock to you pursuant hereto,  all
          of the  Company's  obligations  to you  pursuant  to  Section 4 of the
          Reorganization   Agreement   shall   have  been   fulfilled   to  your
          satisfaction.


         2.  Reference is further made to Section 5 of the above  Reorganization
Agreement. This letter is to confirm the understanding and agreement between you
and the  Company  that  Section 5 of the  Reorganization  Agreement  is herewith
amended  to  provide  that in  lieu  of the  issuance  of the  Class A  Warrants
described  therein,  you shall  receive  one (1) share of the  Company's  Common
Stock,  par value $.0005 per share,  for each three (3) Class A Warrants you are
entitled to receive  pursuant to Section 5 or an aggregate  of 13,125  shares of
Common  Stock.  The issuance of shares of the  Company's  Common Stock to you in
accordance  with the  foregoing  and the  issuance  of the Class B  Warrants  in
accordance with Section 5 of the  Reorganization  Agreement shall fulfill all of
the  Company's  obligations  to you under Section 5. Only whole shares of Common
Stock  shall be  issued.  It is  understood  that such  shares  are  "restricted
securities"  under the Act and are  "Securities"  as defined in Section 7 of the
Reorganization Agreement and all of the

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September 20, 1996
Page 3




representations,  warranties,  covenants and  agreements  you made  contained in
Section 7 shall be applicable to such shares as if such shares were Securities.


         3.  Reference is made to the  Conditions  set forth in Section 9 of the
Reorganization  Agreement.  It is understood and agreed that such Conditions are
amended as follows:

          (a) As to Section 9.2: It is  understood  that Messrs  Cahn,  Hoffman,
          Silverman  and B. and E. Deeds have not  executed  the  Reorganization
          Agreement. Section 9.2 is amended to provide as follows:

                "Messrs.  Cahn,  Hoffman,  Silverman  and B. and E. Deeds
                shall  exchange all of their 14% Debentures for shares of
                Common Stock on such terms as are mutually agreed between
                such  persons  and the Company and forgive all claims for
                the   payment  of   interest   and   penalties   on  such
                indebtedness,  and Messrs.  Cahn,  Hoffman and  Silverman
                shall  (i)   dismiss  the  Lawsuit  (as  defined  in  the
                Reorganization Agreement) with prejudice, and (ii) assign
                to the Company and the Company shall acquire from Messrs.
                Cahn,  Hoffman and  Silverman  all claims  related to the
                issuance  of the 14%  Debentures  held by  Messrs.  Cahn,
                Hoffman,  Silverman,  including,  but not limited to, the
                claims  held  by  Messrs.  Cahn,  Hoffman  and  Silverman
                against MidTex Corp., Fred Miller and Adolf Weismann."

          (b) As to Section 9.3: Messrs.  Thornton,  James and Mr. and Mrs. Neel
          may amend the terms of the  supplemental  agreements  between them and
          the Company to contain such terms as are mutually acceptable.

          (c) As to Section  9.4:  Such  private  offering  may be made for such
          number of shares as the Company may  determine at $1.25 per share with
          the net  proceeds  to be used for such  purposes  as the  Company  may
          determine.




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Pangaea Investment Consultants, Ltd.
September 20, 1996
Page 4



         If you are in agreement with the foregoing, please sign and return this
letter whereupon it shall be an agreement between us.


                                           Very truly yours,

                                           Black Warrior Wireline Corp.


                                           By: /s/ William L. Jenkins
                                               ---------------------------------
                                               William L. Jenkins, President




Agreed and accepted:

Pangaea Investment Consultants, Ltd.




By:  /s/ J.A. McNiff, Sr.
     ---------------------------------
     J.A. McNiff, Sr., President & CEO