<PAGE> 1
                    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, 2002

                                    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 0-12757

                        TMBR/SHARP DRILLING, INC.
          (Exact name of registrant as specified in its charter)

                TEXAS                                    75-1835108
    (State or other jurisdiction of                   (I.R.S. Employer
    incorporation or organization)                   Identification No.)

         4607 WEST INDUSTRIAL BLVD.
               MIDLAND, TEXAS                                79703
    (Address of principal executive offices)               (Zip Code)

    Registrant's telephone number (including area code) (915) 699-5050

     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

     At November 1, 2002, 5,426,786 shares of the issuer's common stock, $.10
par value, were outstanding.
















<PAGE> 2
                         TMBR/SHARP DRILLING, INC.
                             FORM 10-Q REPORT

                                   INDEX



                                                                   Page No.

Part I.  Financial Information (Unaudited)

  Item 1.  Financial Statements

           Balance Sheets, September 30, 2002 and
             March 31, 2002 . . . . . . . . . . . . . . . . . . . .   3

           Statements of Operations, Three Months
             Ended September 30, 2002 and 2001 . .. . . . . . . . .   5

           Statements of Operations, Six Months
             Ended September 30, 2002 and 2001 . .. . . . . . . . .   7

           Statements of Stockholders'
             Equity . . . . . . . . . . . . . . . . . . . . . . . .   9

           Statements of Cash Flows, Six Months
             Ended September 30, 2002 and 2001  . . . . . . . . . .  10

           Notes to Financial Statements. . . . . . . . . . . . . .  11

  Item 2.  Management's Discussion and Analysis of Financial
             Condition and Results of Operations. . . . . . . . . .  17

  Item 3.  Quantitative and Qualitative Disclosures
             About Market Risk. . . . . . . . . . . . . . . . . . .  23

  Item 4.  Controls and Procedures. . . . . . . . . . . . . . . . .  24


Part II.  Other Information

  Item 1.  Legal Proceedings. . . . . . . . . . . . . . . . . . . .  24

  Item 4.  Submission of Matters to a Vote of
             Security Holders . . . . . . . . . . . . . . . . . . .  25

  Item 6.  Exhibits and Reports on Form 8-K . . . . . . . . . . . .  25


                                      -2-









<PAGE> 3
PART ONE - FINANCIAL INFORMATION (UNAUDITED)

Item 1.  FINANCIAL STATEMENTS


                         TMBR/SHARP DRILLING, INC.
                              BALANCE SHEETS
             September 30, 2002 (Unaudited) and March 31, 2002
                   (In thousands, except per share data)


                                                        September 30,
                                                    2002            March 31,
  ASSETS                                         (Unaudited)          2002
  ------                                        -------------      -----------

Current assets:
  Cash and cash equivalents                       $   3,705       $     3,258
  Marketable securities                                  --                97
  Trade receivables,
    net of allowance for doubtful
    accounts of $1,401 on both
    September 30 and March 31, 2002                   8,551            11,011
    Insurance Receivable                              1,620                --
  Inventories                                           156               162
  Deposits                                              614               346
  Other                                                 949             1,018
                                                    --------          --------
    Total current assets                             15,595            15,892
                                                    --------          --------

Property and equipment, at cost:
  Drilling equipment                                 63,421            61,370
  Oil and gas properties, based on
    successful efforts accounting                    36,244            34,616
  Other property and equipment                        3,834             3,531
                                                    --------          --------
                                                    103,499            99,517

Less accumulated depreciation,
  depletion and amortization                        (76,135)          (72,947)
                                                    --------          --------

    Net property and equipment                       27,364            26,570
                                                    --------          --------

Other assets                                            173               173
                                                    --------          --------
    Total assets                                   $ 43,132           $ 42,635
                                                    ========          ========
See accompanying notes to financial statements.



                                      -3-




<PAGE> 4
                         TMBR/SHARP DRILLING, INC.
                              BALANCE SHEETS
             September 30, 2002 (Unaudited) and March 31, 2002
                   (In thousands, except per share data)


                                                September 30,
                                                    2002            March 31,
LIABILITIES AND STOCKHOLDERS' EQUITY             (Unaudited)          2002
------------------------------------            ------------       -----------

Current liabilities:
  Trade payables                                  $   2,789           $ 5,193
  Other                                               1,912             1,610
                                                    --------          --------
     Total current liabilities                        4,701             6,803
                                                    --------          --------

Contingencies

Stockholders' equity:
  Common stock, $0.10 par value
    Authorized, 50,000,000 shares;
    issued 6,690,025 and 6,667,725
    shares at September 30, and
    March 31, 2002, respectively                        669               667
  Additional paid-in capital                         71,685            71,492
  Accumulated deficit                               (33,773)          (36,187)
  Accumulated other comprehensive
    income                                               --                10
  Treasury stock-common, 1,268,739
    shares at September 30, and
    March 31, 2002, at cost                            (150)             (150)
                                                    --------          --------
     Total stockholders' equity                      38,431            35,832
                                                    --------          --------
     Total liabilities and
       stockholders' equity                        $ 43,132          $ 42,635
                                                    ========          ========

See accompanying notes to financial statements.












                                      -4-





<PAGE> 5
                         TMBR/SHARP DRILLING, INC.
                         STATEMENTS OF OPERATIONS
        Three months ended September 30, 2002 and 2001 (Unaudited)
                   (In thousands, except per share data)




                                                      Three months ended
                                                         September 30,
                                                 -----------------------------
                                                      2002              2001
                                                 -----------       -----------
  Revenues:
     Contract drilling                          $     8,038      $     13,978
     Oil and gas                                      1,709             1,581
                                                 -----------       -----------
         Total revenues                               9,747            15,559
                                                 -----------       -----------

  Operating costs and expenses:
     Contract drilling                                5,284             7,782
     Oil and gas production                             374               470
     Dry holes and abandonments                         317                (5)
     Exploration                                         22                --
     Depreciation, depletion and
       amortization                                   1,706             1,677
     General and administrative                         753               693
                                                 -----------       -----------
         Total operating costs
           and expenses                               8,456            10,617
                                                 -----------       -----------
         Operating income                             1,291             4,942
                                                 -----------       -----------

  Other income (expense):
     Interest, net                                        9                10
     Gain on sales of assets                             19               327
     Other, net                                          24                82
                                                 -----------       -----------
     Total other income (expense)                        52               419
                                                 -----------       -----------
  Net income before income
     tax provision                                    1,343             5,361
  Provision for income taxes                             --              (105)
                                                 -----------       -----------

  Net income                                     $    1,343     $       5,256
                                                 ===========       ===========

See accompanying notes to financial statements.


                                      -5-





<PAGE> 6

                         TMBR/SHARP DRILLING, INC.
                         STATEMENTS OF OPERATIONS
        Three months ended September 30, 2002 and 2001 (Unaudited)
                   (In thousands, except per share data)




                                                 Three months ended
                                                    September 30,
                                            -----------------------------
                                               2002              2001
                                            -----------       -----------

Net income per common share:

  Basic                                  $        .25       $       1.03
  Diluted                                         .24                .96
                                            ===========       ===========

Weighted average number of
  common shares outstanding:

  Basic                                      5,420,143         5,104,238
  Diluted                                    5,641,929         5,486,812
                                            ===========       ===========

See accompanying notes to financial statements.
























                                      -6-





<PAGE> 7
                         TMBR/SHARP DRILLING, INC.
                         STATEMENTS OF OPERATIONS
         Six months ended September 30, 2002 and 2001 (Unaudited)
                   (In thousands, except per share data)




                                                      Six months ended
                                                         September 30,
                                                 -----------------------------
                                                      2002              2001
                                                 -----------       -----------
  Revenues:
     Contract drilling                         $     15,780      $     27,425
     Oil and gas                                      3,395             3,161
                                                 -----------       -----------
         Total revenues                              19,175            30,586
                                                 -----------       -----------

  Operating costs and expenses:
     Contract drilling                               10,550            14,441
     Oil and gas production                             847               880
     Dry holes and abandonments                         344               520
     Exploration                                         22                 3
     Depreciation, depletion and
       amortization                                   3,427             3,286
     General and administrative                       1,683             1,270
                                                 -----------       -----------
         Total operating costs
           and expenses                              16,873            20,400
                                                 -----------       -----------
         Operating income                             2,302            10,186
                                                 -----------       -----------

  Other income (expense):
     Interest, net                                       20               (10)
     Gain on sales of assets                             65               524
     Other, net                                          27                86
                                                 -----------       -----------
     Total other income (expense)                       112               600
                                                 -----------       -----------
  Net income before income
     tax provision                                    2,414            10,786
  Provision for income taxes                             --              (214)
                                                 -----------       -----------

  Net income                                     $    2,414    $       10,572
                                                 ===========       ===========

See accompanying notes to financial statements.


                                      -7-





<PAGE> 8
                         TMBR/SHARP DRILLING, INC.
                         STATEMENTS OF OPERATIONS
         Six months ended September 30, 2002 and 2001 (Unaudited)
                   (In thousands, except per share data)




                                                 Six months ended
                                                    September 30,
                                            -----------------------------
                                               2002              2001
                                            -----------       -----------

Net income per common share:

  Basic                                  $        .45       $       2.07
  Diluted                                         .43               1.93
                                            ===========       ===========

Weighted average number of
  common shares outstanding:

  Basic                                      5,411,555         5,096,744
  Diluted                                    5,636,651         5,477,989
                                            ===========       ===========

See accompanying notes to financial statements.

























                                      -8-





<PAGE> 9


                         TMBR/SHARP DRILLING, INC.

                     STATEMENTS OF STOCKHOLDERS EQUITY

            Six Months Ended September 30, 2002 (Unaudited) and

                    Year Ended March 31, 2002 (Audited)

                              (In thousands)



<TABLE>
<CAPTION>
                                                                   Accumulated
                      Common Stock     Additional                     Other       Treasury Stock       Total
                     --------------     Paid-In     Accumulated   Comprehensive   --------------    Stockholders'
                     Shares  Amount     Capital       Deficit     Income (Loss)   Shares  Amount       Equity
                     ------  ------     -------     -----------   -------------   ------  ------    ------------
<S>                  <C>     <C>        <C>           <C>             <C>          <C>     <C>         <C>
Balance,
  March 31, 2002     6,668   $  667     $ 71,492      $(36,187)        $ 10         1,269  $(150)      $ 35,832

Exercise of
  Stock Options         15        2           93            --           --            --     --             95

Issuance of Stock        7       --          100            --           --            --     --            100

Net Income              --       --           --         2,414           --            --     --          2,414

Other comprehensive
 loss, net of tax
   Unrealized loss
  on marketable
  equity securities     --       --           --            --          (10)           --     --            (10)
                                                                                                      ---------
Comprehensive
 Income                 --       --           --            --           --            --     --          2,404
                                                                                                      ---------
Balance,
  September 30,
    2002             6,690   $  669     $ 71,685      $(33,773)        $ --         1,269  $(150)      $ 38,431
                     =====   ======     ========      =========         ====       ======  ======      ========
</TABLE>
See accompanying notes to financial statements.






                                      -9-





<PAGE> 10
                           TMBR/SHARP DRILLING, INC.
                            STATEMENTS OF CASH FLOWS
        For the six months ended September 30, 2002 and 2001 (Unaudited)
                                 (In thousands)


                                                 Six months ended September 30,
                                                 ------------------------------
                                                    2002                2001
                                                 ----------          ----------
Cash flows from operating activities:
  Net income                                       $ 2,414           $  10,572
  Adjustments to reconcile net income
  to net cash provided by
      operating activities:
       Depreciation, depletion and
        amortization                                 3,427               3,286
       Dry holes and abandonments                      344                 520
       Gain on sales of assets                         (65)               (524)
       Changes in assets and liabilities:
        Trade receivables                            2,460              (2,989)
        Inventories and other assets                   (94)                (43)
        Trade payables                              (2,404)               (686)
        Accrued interest and other liabilities         302                  51
                                                   --------            --------
         Total adjustments                           3,970                (385)
                                                   --------            --------
         Net cash provided by
          operating activities                       6,384               10,187

Cash flows from investing activities:
  Additions to property and equipment               (6,662)              (9,644)
  Proceeds from sales of property and
    equipment                                           52                  668
  Insurance proceeds                                   478                   --
                                                   --------             --------
         Net cash required by
          investing activities                      (6,132)              (8,976)

Cash flows from financing activities:
  Repayments of Bank Borrowings                         --               (1,080)
  Proceeds from exercise of stock options               95                   --
  Issuance of common stock                             100                  216
                                                   --------             --------
         Net cash (required) provided
          by financing activities                      195                 (864)
                                                   --------             --------
         Net increase in cash
          and cash equivalents                         447                  347

Cash and cash equivalents at beginning
  of period                                          3,258                  301
                                                   --------             --------
Cash and cash equivalents at end of
  period                                           $ 3,705              $   648
                                                   ========             ========
See accompanying notes to financial statements.

                                      -10-
<PAGE> 11
                         TMBR/SHARP DRILLING, INC.
                       NOTES TO FINANCIAL STATEMENTS



     The amounts presented in the balance sheet as of March 31, 2002 were
derived from the Company's audited financial statements included in its Form
10-K Report filed for the year then ended.  The notes to such statements are
incorporated herein by reference.


(1) Management's Representation

     In the opinion of management, the accompanying unaudited financial
statements contain all adjustments (all of which are of a normal recurring
nature) necessary to present fairly the Company's financial position as of
September 30, 2002 and March 31, 2002, the results of operations for the
three and six months ended September 30, 2002 and 2001, and the cash flows
for the six month periods ended September 30, 2002 and 2001.

     While the Company believes that the disclosures presented are adequate
to make the information not misleading, it is suggested that these condensed
financial statements be read in conjunction with the financial statements and
the related notes in the Company's Annual Report on Form 10-K for the fiscal
year ended March 31, 2002.


(2) Summary of Significant Accounting Policies

Marketable Securities

     Under SFAS No. 115,  "Accounting for Certain Investments in Debt and
Equity Securities",  marketable securities, such as those owned by the
Company, are classified as available-for-sale securities and are to be
reported at market value, with unrealized gains and losses, net of income
taxes, excluded from earnings and reported as a separate component of
stockholders' equity.  These securities were sold during the quarter ended
September 30, 2002 and a gain of approximately $12,000 was recognized.

Inventories

     Inventories consist primarily of casing and tubing.  The Company values
its inventories at the lower of cost or estimated net recoverable value using
the specific identification method.

Property and Equipment

     Drilling equipment is depreciated on a units-of-production method based
on the monthly utilization of the equipment.  Drilling equipment which is not
utilized during a month is depreciated using a minimum utilization rate of
approximately twenty-five percent.  Estimated useful lives range from four to
eight years.  Other property and equipment is depreciated using the straight-
line method of depreciation with estimated useful lives of three to seven
years.


                                      -11-


<PAGE> 12
     Oil and gas properties are accounted for using the successful efforts
method.  Accordingly, the costs incurred to acquire property (proved and
unproved), all development costs and successful exploratory costs are
capitalized, whereas the costs of unsuccessful exploratory wells are
expensed.  Geological and geophysical costs, including seismic costs, are
charged to expense when incurred.  In cases where the Company provides
contract drilling services related to oil and gas properties in which it has
an ownership interest, the Company's proportionate share of costs related to
these properties is capitalized as stated above, net of the Company's working
interest share of profits from the related drilling contracts.  Capitalized
costs of undeveloped properties, which are not depleted until proved reserves
can be associated with the properties, are periodically reviewed for possible
impairment.

     Depletion, depreciation and amortization of capitalized oil and gas
property costs was provided using the units-of-production method based on
estimated proved or proved developed oil and gas reserves, as applicable, of
the respective property units.

     Major renewals and betterments are capitalized in the appropriate
property accounts while the cost of repairs and maintenance is charged to
operating expense in the period incurred.  For assets sold or otherwise
retired, the cost and related accumulated depreciation amounts are removed
from the accounts and any resulting gain or loss is recognized.

Net Income Per Common Share

     The Company accounts for earnings per share in accordance with Statement
of Financial Accounting Standards No. 128, "Earnings per Share" ("SFAS 128").
SFAS 128 replaced the calculation of primary and fully diluted earnings per
share with basic and diluted earnings per share.  Unlike primary earnings per
share, basic earnings per share excludes any dilutive effects of options,
warrants and convertible securities.  Diluted earnings per share is very
similar to the previously reported fully diluted earnings per share.  All
earnings per share amounts for all periods have been presented, and when
appropriate, restated to conform to the SFAS 128 requirements.

















                                      -12-





<PAGE> 13
<TABLE>
<CAPTION>
                                           For the Six Months Ended September 30,
                                            2002                            2001
                                 ---------------------------      --------------------------
                                                        Per                             Per
                                                       Share                           Share
                                 Income    Shares     Amount      Income    Shares    Amount
                                 ------    ------    -------      ------    ------    ------
<S>                              <C>      <C>        <C>          <C>       <C>         <C>
Income before extraordinary
item and accounting change       $2,414                           $10,572

Basic EPS
Income available to common
stockholders                      2,414   5,411,555   $ .45        10,572   5,096,744   $2.07

Effect of Dilutive Securities
Stock Options                               225,096                           381,245
                                  -----   ---------    ----         -----   ---------    ----
Diluted EPS
Income available to common
stockholders + assumed
conversions                      $2,414   5,636,651   $ .43       $10,572   5,477,989   $1.93
                                  =====   =========    ====         =====   =========    ====
</TABLE>

<TABLE>
<CAPTION>
                                          For the Three Months Ended September 30,
                                            2002                            2001
                                 ---------------------------      --------------------------
                                                        Per                             Per
                                                       Share                           Share
                                 Income    Shares     Amount      Income    Shares    Amount
                                 ------    ------    -------      ------    ------    ------
<S>                              <C>      <C>         <C>         <C>       <C>         <C>
Income before extraordinary
item and accounting change       $1,343                           $ 5,256

Basic EPS
Income available to common
stockholders                      1,343   5,420,143   $ .25         5,256   5,104,238   $1.03

Effect of Dilutive Securities
Stock Options                               221,786                           382,574
                                  -----   ---------    ----         -----   ---------    ----
Diluted EPS
Income available to common
stockholders + assumed
conversions                      $1,343   5,641,921   $ .24       $ 5,256   5,486,812   $ .96
                                  =====   =========    ====         =====   =========    ====
</TABLE>
Reclassifications

     Certain reclassifications have been made to the September 30, 2001
financial statements to conform to the September 30, 2002 presentation.

                                      -13-
<PAGE> 14
(3)  Debt

     Line of Credit

     In May, 1998, the Company entered into a loan agreement with its bank
lender which provided for a $5.0 million revolving line of credit secured by
substantially all of the Company's drilling rigs and related equipment,
accounts receivable and inventory.  Borrowings under the line of credit bore
interest at the bank's base rate and accrued interest was payable monthly.
The loan facility originally matured on May 26, 2000 but was extended to July
15, 2000.

     On June 26, 2000, the Company renewed and extended the prior loan
agreements with its bank lender.  The second amended and restated loan
agreement provides for a $5.0 million revolving line of credit secured by the
Company's drilling rigs and related equipment, accounts receivable and
inventory.  Borrowings under this line of credit bear interest at the Wells
Fargo Bank Texas, N. A. (formerly Norwest Bank, Texas N. A.) Base rate (4.75%
at September 30, 2002) and accrued interest is payable monthly.  The loan
facility originally matured on August 31, 2002. On February 12, 2002, the
maturity date of the loan facility was extended to August 31, 2003, at which
time all outstanding principal and interest will be due in full.  At March
31, 2002 and September 30, 2002, respectively, no amounts were outstanding
under the loan facility.


(4)  Stockholders' Equity

     1984 Stock Option Plan

     In August 1984, the Company adopted the 1984 Stock Option Plan (the
"Plan") which initially authorized 375,000 shares of the Company's common
stock to be issued as either incentive stock options or nonqualified stock
options.  This Plan was amended in August 1986 to increase the authorized
shares to 475,000 shares of the Company's common stock.  In January 1988, the
Plan was amended to reduce the option price on certain options issued prior
to March 31, 1986, to reflect the then current fair market value of the
Company's common stock.  The Plan provides that options may be granted to key
employees or directors for various terms at a price not less than the fair
market value of the shares on the date of the grant.  Options to purchase
100,000 shares of common stock are outstanding and exercisable under the
Plan.  No additional shares are available for grant as the Plan expired by
its own terms in August 1994.  The options that were granted prior to the
expiration of the Plan, and which are outstanding, remain subject to the
terms of the Plan.

     1994 Stock Option Plan

     In July 1994, the Company adopted its 1994 Stock Option Plan (the "1994
Plan") which authorized the grant of options to purchase up to 750,000 shares
of the Company's common stock.  These options may be issued as either
incentive or nonqualified stock options.  The 1994 Plan provides that options
may be granted to key employees (including officers and directors who are
also key employees) for various terms at a price not less than the fair
market value of the shares on the date of grant.  The 1994 Plan was ratified
and approved by the stockholders at the Company's annual meeting of

                                      -14-

<PAGE> 15
stockholders held on August 30, 1994.  In September 1998, options outstanding
under the plan were amended to reduce the option price to $4.125 per share.

     On September 3, 1996, the Company granted 465,000 shares of nonqualified
stock options to key employees under the 1994 Plan.  All of the nonqualified
stock options granted on September 3, 1996 are earned and exercisable as of
May 7, 1997. On September 1, 1998, the Company granted 240,000 shares of
incentive stock options at a price of $4.125 to key employees under the 1994
Plan.  On March 9, 2002, all of the shares were earned and exercisable.  The
following sets forth certain information concerning these options.

                                   Number
                                     of                Option
                                   Shares           Exercise Price
                                 Underlying       -------------------
                                  Options         Per Share     Total
                                 ----------       -------------------

Outstanding March 31, 2002        250,400     $4.125-4.5375   $ 1,035,375

Exercised                          (5,400)         4.125          (22,275)
Forfeited                          (6,000)         4.5375         (27,225)
                                   ------      ------------     ---------

Outstanding September 30, 2002    239,000     $4.125-4.5375   $   985,875
                                  =======      ============     =========

     1998 Stock Option Plan

     In September 1998, the Company adopted, subject to stockholder approval,
its 1998 Stock Option Plan (the "1998 Plan") which authorizes the grant of
options to purchase up to 750,000 shares of the Company's common stock.
These options may be issued as either incentive or nonqualified stock
options.  The 1998 Plan provides that options may be granted to key employees
or directors at a price not less than the fair market value of the shares on
the date of grant.  The Company granted options to purchase 50,000 shares of
common stock to two outside directors under the 1998 Plan.  These
nonqualified options were granted on September 1, 1998, subject to
stockholder approval, at $4.125 per share and became exercisable on August
31, 1999, the date on which the stockholders of the Company approved and
adopted the 1998 Plan.  The fair market value of the Company's common stock
on August 31, 1999 was $6.063 per share.  As a result, the Company recognized
approximately $97,000 in compensation expense related to these nonqualified
options during the year ended March 31, 2000.  On June 13, 2001, the Company
granted options to purchase 40,000 shares of common stock of four directors
under the 1998 Plan.  The nonqualified options were granted at an exercise
price of $17.18 per share which represented the fair market value on the date
of the grant.  On October 10, 2001, the Company granted options to purchase
292,000 shares of common stock to key employees under the 1998 Plan.  These
incentive options were granted at an exercise price of $11.50 per share which
represented the fair market value on the date of the grant.  These options
become exercisable over a two year period ending October 10, 2003.  At
September 30, 2002, options to purchase 327,000 shares were outstanding under
the 1998 Plan.


                                      -15-


<PAGE> 16
     Directors' Fee Stock Plan

     On June 14, 2001, the Company adopted the Directors' Fee Stock Plan (the
"Plan") which authorizes the issuance of up to 25,000 shares of the Company's
common stock.  The Plan provides that 300 shares of the Company's common
stock will be issued to each Non-employee Director for each Board of
Directors' meeting attended and 100 shares of common stock to each Non-
employee Director for each committee meeting attended.  During the six months
ended September 30, 2002, 6,900 shares were issued under the Plan and the
Company recognized approximately $102,000 as Directors' compensation expense.

     In connection with a private placement completed in February 1997, the
Company issued a warrant to purchase 36,250 common shares with an exercise
price of $13.20 per share.  This warrant became exercisable on February 17,
1998 and expired unexercised on February 17, 2002.


(5)  Contingencies

          The Company is a defendant in various lawsuits generally incidental
to its business.  In addition, in August 2001, the Equal Employment
Opportunity Commission ("EEOC") filed suit in the El Paso Division of the
United States District Court for the Western District of Texas.  The suit
involved a claim of hostile work environment made on behalf of four former
employees.  In May, 2002, the Court transferred the cause to the
Midland/Odessa Division.  The employees on behalf of whom the Equal
Employment Opportunity Commission originally brought suit and one additional
employee had recently been allowed to intervene in the litigation on an
individual basis.  It was expected that these employees would file additional
state common law causes of action arising out of the allegations of hostile
work environment.  The EEOC was seeking back pay, front pay, pecuniary losses
and punitive damages of an unspecified amount.  The intervenors were seeking
unspecified damages. The Company disputed the claims made by the Equal
Employment Opportunity Commission and the anticipated claims by the
intervenors and intended to defend the lawsuits vigorously.  Subsequent to
the end of the quarter ended September 30, 2002, these lawsuits, including
the lawsuits brought by the EEOC and the five intervenors, were settled
within the Company's insurance policy limits.

     On May 8, 2002, the Company experienced an uncontrolled flow ("flow") on
the Leiman #1 well in Loving County, Texas.  The Company has a 25% working
interest in this well. The uncontrolled flow was encountered while running a
7  liner in the well bore.  The flow was ultimately controlled with no injury
to personnel or damage to the Company's rig or related equipment.  The
planned total depth of the well was approximately 22,000 feet but the
uncontrolled flow was experienced at a depth of 19,115 feet.  The well was
not salvageable and has been plugged and abandoned.  Costs associated with
re-gaining control of the well and plugging and abandonment were
approximately $1.5 million.  The cost to re-drill the well to a depth of
19,115 feet is estimated to be $5.6 million.  The Leiman #1R well was spudded
on July 8, 2002. The Company has successfully run and cemented the 7 3/4"
drilling liner at 19,120 feet as of November 4, 2002.  The Company has
submitted claims for reimbursement from its insurance carrier, St. Paul's
Surplus Lines, who has acknowledged coverage under both the control of well
and re-drill/replacement well provisions under the Company's Operators Extra
Expense insurance.  An insurance receivable has been recorded for the

                                      -16-

<PAGE> 17
Company's portion of the costs of the original Leiman #1 well.  During the
quarter ended September 30, 2002, the Company received approximately $478,000
for its working interest portion of insurance proceeds. The Company's working
interest portion of the costs associated with re-drilling this well has been
capitalized.


Item 2.  MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
         RESULTS OF OPERATIONS


     Some statements contained in this Form 10-Q report are "forward-looking
statements".  All statements other than statements of historical facts
included in this report, including, without limitation, statements regarding
planned capital expenditures, the availability of capital resources to fund
capital expenditures, estimates of proved reserves, the Company's financial
position, business strategy and other plans and objectives for future
operations, are forward-looking statements.  Forward-looking statements can
be identified by the use of forward-looking terminology like "may," "will,"
"expect," "intend,""anticipate," "estimate," "continue," "present value,"
"future" or "reserves" or other variations of comparable terminology.  The
Company believes the assumptions and expectations reflected in these forward-
looking statements are reasonable.  However, no assurance can be given that
the Company's expectations will prove to be correct or that it will be able
to take any actions that are presently planned.  All of these statements
involve assumptions of future events and risks and uncertainties.  Risks and
uncertainties associated with forward-looking statements include, but are not
limited to:

               fluctuations in prices of oil and gas;

               future capital requirements and availability of financing;

               risks associated with the drilling of wells;

               competition;

               general economic conditions;

               governmental regulations;

               receipt of amounts owed to the Company by purchasers of its
               production and counterparties to its hedging contracts; and

               hedging activities.

          For these and other reasons, actual results may differ materially
from those projected or implied.  Undue reliance should not be placed on
forward-looking statements and projections of any future results should not
be based on such statements.

     Before investing in the Company's common stock, one should be aware that
there are various risks associated with an investment.  Some of these risk
factors are described on page 18 in the Company's Form 10-K dated March 31,
2002.

                                      -17-


<PAGE> 18

Critical Accounting Policies

     Contract Drilling Operations

     Drilling revenues from footage and daywork contracts are recognized as
work is performed utilizing the percentage-of-completion method.  Costs under
footage and daywork contracts are recognized in the period they are incurred.
The Company utilizes the completed contract method to recognize drilling
revenues and expenses relating to turnkey contracts.  Expected losses on all
in-process contracts are recognized in the period the loss can reasonably be
determined.

     Drilling equipment is depreciated on a units-of-production method based
on the monthly utilization of the equipment.  Drilling equipment which is not
utilized during a month is depreciated using a minimum utilization rate of
approximately 25%.  Estimated useful lives range from four to eight years.
Other property and equipment is depreciated using the straight-line method of
depreciation with estimated useful lives of three to seven years.

     The contract drilling industry is currently experiencing a decrease in
demand and downward pressure on prices for contract drilling services due to
the uncertainty surrounding oil and gas prices. The Company has been and will
continue to be affected by oil and gas industry conditions but cannot predict
either the future level of demand for its contract drilling services or
future conditions in the contract drilling industry. The contract drilling
industry remains highly competitive.  The Company believes it owns a
sufficient number of drilling rigs to remain competitive within its areas of
operation.  In addition, the Company believes it competes favorably with
respect to the depth capabilities of its rigs, the experience level of its
personnel, its reputation and its relationship with existing customers.
However, the Company's operating results will continue to be directly
affected by the level of drilling activity in the Company's service areas.

     Oil and Gas Operations

     The Company's oil and gas producing activities are accounted for using
the successful efforts method of accounting.  Accordingly, the Company
capitalizes all costs incurred to acquire oil and gas properties (proved and
unproved), all development costs, and the costs of successful exploratory
wells.  The costs of unsuccessful exploratory wells are expensed.  Geological
and geophysical costs, including seismic costs, are charged to expense when
incurred.  In cases where the Company provides contract drilling for oil and
gas properties in which it has an ownership interest, the Company's
proportionate share of costs is capitalized as stated above, net of its
working-interest share of profits from the related drilling contracts.
Capitalized costs of undeveloped properties, which are not depleted until
proved reserves can be associated with the properties, are periodically
reviewed for possible impairment.




                                      -18-




<PAGE> 19
     For properties with proved or proved developed oil and gas reserves,
depletion, depreciation and amortization of capitalized costs is calculated
by applying the units-of-production method to the estimated amount of such
reserves.

Recent Accounting Pronouncements

     In July 2001, the Financial Accounting Standards Board ("FASB") issued
Statements of Financial Accounting Standards No. 141 "Business Combinations"
and No. 142 "Goodwill and Other Intangible Assets".  Statement 141 requires
that all business combinations initiated after June 30, 2001 be accounted for
under the purchase method and Statements 142 requires that goodwill no longer
be amortized to earnings, but instead be reviewed for impairment.  The
adoption of this statement had no impact on the Company's financial
statements.

     Also, the FASB has issued SFAS No. 143, "Accounting for Asset Retirement
Obligations" which establishes requirements for the accounting of removal-
type costs associated with asset retirements.  The standard is effective for
fiscal years beginning after June 15, 2002, with earlier application
encouraged.  The Company will be required to record the fair value of asset
retirement obligations as a liability with a corresponding increase to the
cost of the asset.  Any estimated salvage value will be considered in the
calculation of depletion, depreciation and amortization. The Company is
currently assessing the impact on its financial statements.

     On October 3, 2001, the FASB issued SFAS No. 144, "Accounting for the
Impairment or Disposal of Long-Lived Assets."  This pronouncement supercedes
SFAS 121, "Accounting for the Impairment of Long-Lived Assets and for Long-
Lived Assets to Be Disposed" and eliminates the requirement for SFAS 121 to
allocate goodwill to long-lived assets to be tested for impairment.  The
provisions of this statement are effective for financial statements issued
for fiscal years beginning after December 15, 2001, and interim periods
within those fiscal years. The Company adopted this statement on April 1,
2002.  The adoption of this statement had no immediate impact on the Company
but will change how the Company assesses impairment of long-lived assets and
may result in discontinued operations presentation for future sales of
certain assets.

     In April 2002, the FASB issued Statement No. 145 "Recission of FASB
Statements No. 4, 44, and 64, Amendment of FASB Statement No. 13, and
Technical Corrections."  Most significantly, this Statement eliminates the
requirement under Statement 4 to aggregate all gains and losses from
extinguishment of debt, and if material, be classified as an extraordinary
item.  As a result, gains and losses from extinguishment of debt should be
classified as extraordinary items only if they meet the criteria in Opinion
30.  Applying the provisions of Opinion 30 will distinguish transactions that
are part of an entity's recurring operations from those that are unusual or
infrequent or that meet the criteria for classification as an extraordinary
item.  There is no current impact to the Company as it has no outstanding
debt.



                                      -19-





<PAGE> 20
     In July 2002, the FASB issued Statement No. 146, "Accounting for Costs
Associated with Exit or Disposal Activities".  The standard requires
companies to recognize costs associated with exit or disposal activities when
they are incurred rather than at the date of a commitment to an exit or
disposal plan.  Statement 146 is to be applied prospectively to exit or
disposal activities initiated after December 31, 2002.  The Company expects
no impact to our financial statements as we do not anticipate exiting or
disposing of any of our activities.

Results of Operations

     Total revenues were $9,747,000 and $19,175,000 for the three and six
months ended September 30, 2002 which represents a 37% decrease for each
period when compared to the same periods in 2001.  Operating expenses as a
percent of revenues were 87% and 88% for the three and six months ended
September 30, 2002 versus 68% and 67% for the same periods of the prior year.
The operating results were negatively affected by a decrease in demand for
the Company's contract drilling services which resulted in a decrease in rig
utilization rates.  The Company has also experienced a decrease in the
average price received for its contract drilling services.  Rig utilization
rates were 51% and 52%  for the three and six months ended September 30, 2002
compared to 75% for both the three and six months ended September 30, 2001.

     Oil and gas revenues increased by approximately 1% for both the three
and six months ended September 30, 2002 from the same periods of the prior
year, respectively.  The following table sets forth certain information
relating to crude oil and natural gas produced:





                              Three months ended        Six months ended
                                September 30,             September 30,
                            ----------------------      ------------------
                              2002        2001            2002        2001
                            -------      -------        ------     -------
     Quantities Produced
     ------------------
     Oil (bbls)             35,607       33,266        81,995        60,849
     Gas (mcf)             270,511      191,338       532,082       346,037

     Average Price
     -------------
     Oil (bbls)            $ 22.82      $ 25.49       $ 23.84       $ 25.84
     Gas (mcf)             $  2.40      $  3.83       $  2.71       $  4.59


     Average Daily Production
     ------------------------
     Oil (bbls)                387          362           448           333
     Gas (mcf)               2,940        2,080         2,907         1,891



                                      -20-



<PAGE> 21
     Oil and gas production expenses decreased approximately 20% for the
three months ended September 30, 2002 when compared to the same period in
2001.  This decrease is primarily attributable to the workover of two wells
in Reagan County, Texas during the quarter ended September 20, 2001.
Production expenses remained relatively flat between the six months ended
September 30, 2002 and September 30, 2001.  The production expenses for the
three months ended June 30, 2002 were higher due to the increase in
quantities of crude oil and natural gas produced.  In addition, the Company
has experienced a general rise in the cost of services and supplies which are
included in production expenses.

     General and administrative expenses increased primarily as a result of
an increase in insurance expenses and directors' fees.

     Net working capital was $10.9 million at September 30, 2002 compared to
$9.1 million at March 31, 2002.

Income Taxes

     At March 31, 2002, the Company had approximately $47.2 million of unused
net operating loss ("NOL") carryforwards for tax purposes.  Use of these
carryforwards is dependent upon the Company's ability to generate taxable
earnings in future periods.  These carryforwards began to expire in fiscal
2000 and approximately $5.7 million will expire in 2002.  The Company's
ability to utilize its NOL carryforwards may be substantially limited in the
future under the Internal Revenue Code of 1986, as amended (the "Code").  If
the Company experiences an ownership change under applicable provisions of
the Code, the carryforward would be limited to an annual amount determined by
specified interest rates and other variables.  The Company does not believe
an ownership change has occurred to date.

     The effective tax rates differ from the statutory tax rate of 34%
primarily due to the utilization of NOLs.  Tax expense is generally limited
to alternative minimum tax.

     The Company utilizes an asset and liability approach for financial
accounting and reporting for income taxes.  The Company has a deferred tax
asset primarily due to its NOL carryforwards.  The Company has provided a
valuation allowance for the entire balance of deferred tax assets as it is
more likely than not that the deferred tax asset will not be realized.


Liquidity and Capital Resources

     In June, 2000, the Company entered into a second amended and restated
loan agreement with Wells Fargo Bank Texas, N.A.  The loan agreement provides
for a $5.0 million revolving line of credit facility, of which $5.0 million
was available at September 30, 2002.  The facility is secured by the
Company's drilling rigs and related equipment, accounts receivable and
inventory.  Borrowings under the revolving facility bear interest at annual
rate equal to the bank's base rate, or 4.75% at September 30, 2002.  Accrued
and unpaid interest on outstanding principal is payable monthly. The loan


                                      -21-




<PAGE> 22
facility  matures on August 31, 2003, at which time all outstanding principal
and accrued and unpaid interest will be due in full.  At September 30, 2002,
no amounts were outstanding under the loan facility. The principal amount
outstanding at any one time may not exceed the lesser of $5.0 million or one-
third of the borrowing base amount.  The borrowing base amount is the sum of
the Company's accounts receivable and the value of its inventory, drilling
rigs, drill pipe and related equipment. The borrowing base amount is
redetermined quarterly by the Company, except that the bank may, in its
discretion, make its own determination of the borrowing base which will be
the controlling borrowing base amount.  At September 30, 2002, the borrowing
base amount was approximately $37 million.

     The Company may in the future have to reserve a trade receivable from
one specific customer.  At September 30, 2002, the customer owed the Company
approximately $2.7 million, of which approximately $1.6 million was over 90
days past due. Since the end of the quarter the customer has paid
approximately $330,000 related to this receivable. Currently this receivable
is not specifically reserved as the customer is making cash payments to the
Company and collection efforts are ongoing.  If our evaluation of this
receivable changes in the future, the Company may have to reserve a portion
or the total amount of this receivable.

     The Company anticipates that funds for its capital expenditures in
fiscal 2003 will be available from a combination of sources, including (i)
borrowings under the line of credit, (ii) funds raised through issuances of
equity or debt securities in public or private transactions, and (iii)
internally generated funds.

Trends and Prices

     The contract drilling industry is currently experiencing decreased
demand and decreasing prices for contract drilling services due to the
instability of oil and gas prices.  The Company will be affected by price
fluctuations in the industry, but cannot predict either the future level of
demand for its contract drilling services or future conditions in the
contract drilling industry.

     In recent years, oil and gas prices have been extremely volatile.
Prices are affected by market supply and demand factors as well as by actions
of state and local agencies, the U.S. and foreign governments and
international cartels.  The Company has no way of accurately predicting the
supply of and demand for oil and gas, domestic or international political
events or the effects of any such factors on the prices received by the
Company for its oil and gas.









                                      -22-





<PAGE> 23


Item 3.  QUANTITATIVE AND QUALITATIVE DISCLOSURE ABOUT MARKET RISK

     The primary sources of market risk for the Company include fluctuations
in commodity prices and interest rate fluctuations.  At March 31, 2002, the
Company had not entered into any hedge arrangements, commodity swap
agreements, commodity futures, options or other similar agreements relating
to crude oil and natural gas.

     Commodity Price Risk - The Company produces and sells crude oil, natural
gas and natural gas liquids.  As a result, its operating results are
significantly affected by fluctuations in commodity prices caused by changing
market forces.

     Historically, the Company has not entered into hedging arrangements for
its oil and gas production and it does not have any delivery commitments.
The Company may, in the future, attempt to reduce its exposure to the
volatility of oil and gas prices by hedging a portion of its production.  In
a typical hedge transaction, the Company would have the right to receive from
the counterparty to the hedge, the excess of the fixed price specified in the
hedge over a floating price based on a market index, multiplied by the
quantity hedge.   If the floating price exceeds the fixed price, the Company
would be required to pay the counterparty this difference multiplied by the
quantity hedged.  In the case, the Company would be required to pay the
difference regardless of whether it had sufficient production to cover the
quantities specified in the hedge.  Significant reductions in production at
times when the floating price exceeds the fixed price could require the
Company to make payments under the hedge agreements even though such payments
are not offset by sales of production.  Hedging could also prevent the
hedging party from receiving the full advantage of increases in oil and gas
prices above the fixed amount specified in the hedge.

     Interest Rate Risk - At September 30, 2002 the Company had no borrowings
outstanding under its loan agreement.  However, when it does have outstanding
borrowings, the Company's exposure to changes in interest rates primarily
results from short term changes in its bank's prime rate.
















                                      -23-





<PAGE> 24

Item 4.  Controls and Procedures

     On October 16, 2002, the Company supplemented its existing internal
controls with the adoption and implementation of certain additional
disclosure controls and procedures.  The purpose of these additional
disclosure controls and procedures is to help ensure that information the
Company is required to disclose in reports that the Company files with the
SEC is accumulated and communicated to management and recorded, processed,
summarized and reported within the time periods prescribed by the SEC.  The
effectiveness of these disclosure controls and procedures has been evaluated
by the Company's chief executive officer, Thomas C. Brown, and its chief
financial officer, Patricia R. Elledge.  Mr. Brown and Ms. Elledge have
concluded that the Company's disclosure controls and procedures are effective
for their intended purposes.  As part of their evaluation, Mr. Brown and Ms.
Elledge also determined that there were no significant changes in internal
controls or other factors that could significantly affect internal controls
after the date of their evaluation.  No corrective actions were required to
be taken with regard to significant deficiencies or material weaknesses.
Following the signature page of this report, you will find certifications
signed by Mr. Brown and Ms. Elledge.



PART TWO - OTHER INFORMATION

Item 1.  Legal Proceedings

     The Company is a defendant in various lawsuits generally incidental to
its business.  In addition, in August 2001, the Equal Employment Opportunity
Commission ("EEOC") filed suit in the El Paso Division of the United States
District Court for the Western District of Texas.  The suit involved a claim
of hostile work environment made on behalf of four former employees.  In May,
2002, the Court transferred the cause to the Midland/Odessa Division.  The
employees on behalf of whom the Equal Employment Opportunity Commission
originally brought suit and one additional employee had recently been allowed
to intervene in the litigation on an individual basis.  It was expected that
these employees would file additional state common law causes of action
arising out of the allegations of hostile work environment.  The EEOC was
seeking back pay, front pay, pecuniary losses and punitive damages of an
unspecified amount.  The intervenors were seeking unspecified damages. The
Company disputed the claims made by the Equal Employment Opportunity
Commission and the anticipated claims by the intervenors and intended to
defend the lawsuits vigorously.  Subsequent to the end of the quarter ended
September 30, 2002, these lawsuits, including the lawsuits brought by the
EEOC and the five intervenors, were settled within the Company's insurance
policy limits.






                                      -24-





<PAGE> 25
Item 4.  Submission of matters to a vote of security holders.

     The Company's annual meeting of stockholders was held on August 28,
2002.  At the meeting, the following persons were elected to serve as
Directors of the Company until the 2003 annual meeting of stockholders and
until their respective successors are duly qualified and elected:  (1)
Raymond E. Batchelor, (2) Thomas C. Brown, (3) Michael M. Cone, (4) David N.
Fitzgerald and (5) James B. Taylor.

     Set forth below is a tabulation of votes with respect to each nominee
for Director:
<TABLE>
<CAPTION>
                                       Votes       Votes
                                       Cast        Cast       Votes                         Broker
             Name                      For         Against    Withheld     Abstentions      Non-Votes
             ----                      -----       -------    --------     -----------      ---------
             <S>                     <C>           <C>          <C>           <C>             <C>
             Raymond E. Batchelor    4,487,719      17,931       --            --              --
             Thomas C. Brown         4,487,530      18,120       --            --              --
             Michael M. Cone         4,487,721      17,929       --            --              --
             David N. Fitzgerald     4,487,673      17,977       --            --              --
             James B. Taylor         4,487,710      17,940       --            --              --
</TABLE>

Item 6.  Exhibits and reports on Form 8-K.

     (a)  Exhibits:

          3.1  - Articles of Incorporation of the Company, as amended.
               (Incorporated by reference to exhibit 3.1 in Registrant's
               Annual Report on Form 10-K dated June 28, 1991)

          3.2  - Bylaws of the Registrant, as amended.  (Incorporated by
               reference to Exhibit 3.2 in Registrant's Annual Report on Form
               10-K dated June 27, 1994)

          Executive Compensation Plans and Arrangements
          ---------------------------------------------
          (Exhibits 10.1 through and including Exhibit 10.24 constitute
          executive compensation plans and arrangements of the Registrant)

      Exhibit 10.1 - Incentive Stock Option Plan. (Incorporated by
          reference to Exhibit 10.3 in Registrant's Registration Statement on
          Form 10 as amended, effective October 9, 1984)

      Exhibit 10.2 - Nonqualified Stock Option Agreement dated August
          29, 1990, between Thomas C. Brown and the Registrant.
          (Incorporated by reference to Exhibit 10.15 in Registrant's Annual
          Report on form 10-K dated June 25, 1993)

      Exhibit 10.3 - Nonqualified Stock Option Agreement dated August
          30, 1988, between Joe G. Roper and the Registrant.  (Incorporated
          by reference to Exhibit 10.17 in Registrant's Annual Report on Form
          10-K dated June 25, 1993)


                                      -25-

<PAGE> 26
      Exhibit 10.4 - Incentive Stock Option Agreement dated November 16,
          1993 between Joe G. Roper and the Registrant.  (Incorporated by
          reference to Exhibit 10.5 in Registrant's Annual Report on Form 10-
          K dated June 27, 1994)

      Exhibit 10.5 - Incentive Stock Option Agreement dated December 4,
          1992 between Patricia R. Elledge and the Registrant.  (Incorporated
          by reference to Exhibit 10.20 in Registrant's Annual Report on Form
          10-K dated June 25, 1993)

      Exhibit 10.6 - Incentive Stock Option Agreement dated December 4,
          1992 between Don H. Lawson and the Registrant.  (Incorporated by
          reference to Exhibit 10.21 in Registrant's Annual Report on Form
          10-K dated June 25, 1993)

      Exhibit 10.7 - Incentive Stock Option Agreement dated November 16,
          1993 between Don H. Lawson and the Registrant.  (Incorporated by
          reference to Exhibit 10.10 in Registrant's Annual Report on Form
          10-K dated June 27, 1994)

      Exhibit 10.8 - 1994 Stock Option Plan.  (Incorporated by reference
          to Exhibit 10.10 in Registrant's Annual Report on Form 10-K dated
          June 28, 1995)

      Exhibit 10.9 - TMBR/Sharp Drilling, Inc. Employee Retirement Plan.
          (Incorporated by reference to Exhibit 10.11 in Registrant's Annual
          Report on Form 10-K dated June 28, 1995)

      Exhibit 10.10 - 1998 Stock Option Plan (Incorporated by reference to
          Exhibit 10.1 in Registrant's Quarterly Report on Form 10-Q dated
          November 12, 1998)

      Exhibit 10.11 - Incentive Stock Option Agreement dated September 1,
          1998, between Don H. Lawson and the Registrant.  (Incorporated by
          reference to Exhibit 10.18 in Registrant's Annual Report on Form
          10-K dated June 29, 1999)

      Exhibit 10.12 - Incentive Stock Option Agreement dated September 1,
          1998, between Jeffrey D. Phillips and the Registrant.
          (Incorporated by reference to Exhibit 10.19 in Registrant's Annual
          Report on Form 10-K dated June 29, 1999)

      Exhibit 10.13 - Incentive Stock Option Agreement dated September 1,
          1998, between Patricia R. Elledge and the Registrant.
          (Incorporated by reference to Exhibit 10.20 in Registrant's Annual
          Report on Form 10-K dated June 29, 1999)

      Exhibit 10.14 - Incentive Stock Option Agreement dated September 1,
          1998, between Joe G. Roper and the Registrant.  (Incorporated by
          reference to Exhibit 10.21 in Registrant's Annual Report on Form
          10-K dated June 29, 1999)

      Exhibit 10.15 - Incentive Stock Option Agreement dated September 1,
          1998, between Thomas C. Brown and the Registrant.  (Incorporated by
          reference to Exhibit 10.22 in Registrant's Annual Report on Form
          10-K dated June 29, 1999)

                                      -26-

<PAGE> 27
      Exhibit 10.16 - First Amended and Restated Nonstatutory Stock Option
          Agreement dated September 1, 1998, between Patricia R. Elledge and
          the Registrant.  (Incorporated by reference to Exhibit 10.23 in
          Registrant's Annual Report on Form 10-K dated June 29, 1999)

      Exhibit 10.17 - First Amended and Restated Nonstatutory Stock Option
          Agreement dated September 1, 1998, between Jeffrey D. Phillips and
          the Registrant.  (Incorporated by reference to Exhibit 10.24 in
          Registrant's Annual Report on Form 10-K dated June 29, 1999)

      Exhibit 10.18 - First Amended and Restated Nonstatutory Stock Option
          Agreement dated September 1, 1998, between Joe G. Roper and the
          Registrant.  (Incorporated by reference to Exhibit 10.25 in
          Registrant's Annual Report on Form 10-K dated June 29, 1999)

      Exhibit 10.19 - First Amended and Restated Nonstatutory Stock Option
          Agreement dated September 1, 1998, between Thomas C. Brown and the
          Registrant.  (Incorporated by reference to Exhibit 10.26 in
          Registrant's Annual Report on Form 10-K dated June 29, 1999)

      Exhibit 10.20 - Directors' Fee Stock Plan (Incorporated by reference to
          Exhibit 10.20 of Registrant's Annual Report on Form 10-K dated June
          15, 2001)

      Exhibit 10.21 - Retention Agreement, dated November 8, 2002, between
          Thomas C. Brown and the Registrant.

      Exhibit 10.22 - Retention Agreement, dated November 8, 2002, between
          Jeffrey D. Phillips and the Registrant.

      Exhibit 10.23 - Retention Agreement, dated November 8, 2002, between
          Patricia R. Elledge and the Registrant.

      Exhibit 10.24 - Retention Agreement, dated November 8, 2002, between
          Don H. Lawson and the Registrant.

      Exhibit 10.25 - Form of Stock Purchase Agreement, dated as of February
          13, 1997, between the Registrant and the stockholders named therein
          (Incorporated by reference to Exhibit 10.1 in the Registrant's
          Registration Statement on Form S-3, No. 333-23391)

      Exhibit 10.26 - Second Amended and Restated Loan Agreement dated June
          26, 2000 between Wells Fargo Bank, Texas N. A. and the Registrant.
          (Incorporated by reference to Exhibit 10.1 in Registrant's
          Quarterly Report on Form 10-Q dated August 9, 2000)

      Exhibit 99.1 - Certification of Chief Executive Officer pursuant to 18
          U.S.C. Section 1350, as adopted pursuant to Section 906 of the
          Sarbanes-Oxley Act of 2002.




                                      -27-





<PAGE> 28
      Exhibit 99.2 - Certification of Principal Financial Officer pursuant to
          18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the
          Sarbanes-Oxley Act of 2002.

---------------------------------

     (b)  Reports on Form 8-K:

          The following report on Form 8-K was filed during the second
          quarter ended September 30, 2002:

          (1)  Report dated August 12, 2002, Regulation FD Disclosure-
               Certifications of Registrant's Chief Executive Officer and
               Chief Financial Officer.







































                                      -28-





<PAGE> 29
                                SIGNATURES




     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.



                                      TMBR/SHARP DRILLING, INC.




November 13, 2002                By:  /s/  Patricia R. Elledge
-----------------                     -------------------------
     Date                                  Patricia R. Elledge
                                           Controller/Treasurer

                                      (Ms. Elledge is the Chief Financial
                                      Officer and has been duly authorized
                                      to sign on behalf of the Registrant)





























                                      -29-





<PAGE> 30
                              CERTIFICATIONS

     I, Thomas C. Brown, certify that:

     1.   I have reviewed this quarterly report on Form 10-Q of TMBR/Sharp
Drilling, Inc.;

     2.   Based on my knowledge, this quarterly report does not contain any
untrue statement of a material fact or omit to state a material fact
necessary to make the statements made, in light of the circumstances under
which such statements were made, not misleading with respect to the period
covered by this quarterly report;

     3.   Based on my knowledge, the financial statements, and other
financial information included in this quarterly report, fairly present in
all material respects the financial condition, results of operations and cash
flows of the registrant as of, and for, the periods presented in this
quarterly report;

     4.   The registrant's other certifying officers and I are responsible
for establishing and maintaining disclosure controls and procedures (as
defined in Exchange Act Rules 13a-14 and 15d-14) for the registrant and we
have:

               a)   Designed such disclosure controls and procedures to ensure
     that material information relating to the registrant, including its
     consolidated subsidiaries, is made known to us by others within those
     entities, particularly during the period in which this quarterly report
     is being prepared;

               b)   Evaluated the effectiveness of the registrant's disclosure
     controls and procedures as of a date within 90 days prior to the filing
     date of this quarterly report (the "Evaluation Date"); and

               c)   Presented in this quarterly report our conclusions about the
     effectiveness of the disclosure controls and procedures based on our
     evaluation as of the Evaluation Date;

     5.   The registrant's other certifying officers and I have disclosed,
based on our most recent evaluation, to the registrant's auditors and the
audit committee of registrant's board of directors (or persons performing the
equivalent function):

               a)   All significant deficiencies in the design or operation of
     internal controls which could adversely affect the registrant's ability
     to record, process, summarize and report financial data and have
     identified for the registrant's auditors any material weaknesses in
     internal controls; and

               b)   Any fraud, whether or not material, that involves management
     or other employees who have a significant role in the registrant's
     internal controls; and


                                      -30-




<PAGE> 31
     6.   The registrant's other certifying officers and I have indicated in
this quarterly report whether or not there were significant changes in
internal controls or in other factors that could significantly affect
internal controls subsequent to the date of our most recent evaluation,
including any corrective actions with regard to significant deficiencies and
material weaknesses.

Date: November 13, 2002.



                                   /s/ Thomas C. Brown
                                   ----------------------------------------
                                   Thomas C. Brown, Chief Executive Officer







































                                      -31-





 <PAGE> 32
                              CERTIFICATIONS

     I, Patricia R. Elledge, certify that:

     1.   I have reviewed this quarterly report on Form 10-Q of TMBR/Sharp
Drilling, Inc.;

     2.   Based on my knowledge, this quarterly report does not contain any
untrue statement of a material fact or omit to state a material fact
necessary to make the statements made, in light of the circumstances under
which such statements were made, not misleading with respect to the period
covered by this quarterly report;

     3.   Based on my knowledge, the financial statements, and other
financial information included in this quarterly report, fairly present in
all material respects the financial condition, results of operations and cash
flows of the registrant as of, and for, the periods presented in this
quarterly report;

     4.   The registrant's other certifying officers and I are responsible
for establishing and maintaining disclosure controls and procedures (as
defined in Exchange Act Rules 13a-14 and 15d-14) for the registrant and we
have:

               a)   Designed such disclosure controls and procedures to ensure
     that material information relating to the registrant, including its
     consolidated subsidiaries, is made known to us by others within those
     entities, particularly during the period in which this quarterly report
     is being prepared;

               b)   Evaluated the effectiveness of the registrant's disclosure
     controls and procedures as of a date within 90 days prior to the filing
     date of this quarterly report (the "Evaluation Date"); and

               c)   Presented in this quarterly report our conclusions about the
     effectiveness of the disclosure controls and procedures based on our
     evaluation as of the Evaluation Date;

     5.   The registrant's other certifying officers and I have disclosed,
based on our most recent evaluation, to the registrant's auditors and the
audit committee of registrant's board of directors (or persons performing the
equivalent function):

               a)   All significant deficiencies in the design or operation of
     internal controls which could adversely affect the registrant's ability
     to record, process, summarize and report financial data and have
     identified for the registrant's auditors any material weaknesses in
     internal controls; and

               b)   Any fraud, whether or not material, that involves management
     or other employees who have a significant role in the registrant's
     internal controls; and


                                      -32-




<PAGE> 33

     6.   The registrant's other certifying officers and I have indicated in
this quarterly report whether or not there were significant changes in
internal controls or in other factors that could significantly affect
internal controls subsequent to the date of our most recent evaluation,
including any corrective actions with regard to significant deficiencies and
material weaknesses.

Date: November 13, 2002.



                                   /s/ Patricia R. Elledge
                                   -------------------------------
                                   Patricia R. Elledge, Principal
                                   Financial Officer





































                                      -33-





<PAGE> 34
                             INDEX TO EXHIBITS


                               Description
                               -----------


Exhibit 3.1         Articles of Incorporation of the Company, as amended.
                    (Incorporated by reference to Exhibit 3.1 in Registrant's
                    Annual Report on Form 10-K dated June 28, 1991)

Exhibit 3.2         Bylaws of the Registrant, as amended.  (Incorporated by
                    reference to Exhibit 3.2 in Registrant's Annual Report on
                    Form 10-K dated June 27, 1994)


                    Executive Compensation Plans and Arrangements
                    ----------------------------------------------
                    (Exhibits 10.1 through and including Exhibit 10.24
                    constitute executive compensation plans and
                    arrangements of the Registrant)

Exhibit 10.1        Incentive Stock Option Plan (Incorporated by
                    reference to Exhibit 10.3 in Registrant's
                    Registration Statement on Form 10, as amended,
                    effective October 9, 1984)

Exhibit 10.2        Nonqualified Stock Option Agreement dated
                    August 29, 1990, between Thomas C. Brown and the
                    Registrant. (Incorporated by reference to Exhibit
                    10.15 in Registrant's Annual Report on Form 10-K
                    dated June 25, 1993)

Exhibit 10.3        Nonqualified Stock Option Agreement dated
                    August 30, 1988, between Joe G. Roper and the
                    Registrant. (Incorporated by reference to Exhibit
                    10.17 in Registrant's Annual Report on Form 10-K
                    dated June 25, 1993)

Exhibit 10.4        Incentive Stock Option Agreement dated
                    November 16, 1993 between Joe G. Roper and the
                    Registrant. (Incorporated by reference to Exhibit
                    10.5 in Registrant's Annual Report on Form 10-K
                    dated June 27, 1994)

Exhibit 10.5        Incentive Stock Option Agreement dated
                    December 4, 1992 between Patricia R. Elledge and
                    the Registrant. (Incorporated by reference to
                    Exhibit 10.20 in Registrant's Annual Report on Form
                    10-K dated June 25, 1993)

Exhibit 10.6        Incentive Stock Option Agreement dated
                    December 4, 1992 between Don H. Lawson and the
                    Registrant. (Incorporated by reference to Exhibit
                    10.21 in Registrant's Annual Report on Form 10-K
                    dated June 25, 1993)

                                      -34-

<PAGE> 35
Exhibit 10.7        Incentive Stock Option Agreement dated
                    November 16, 1993 between Don H. Lawson and the
                    Registrant. (Incorporated by reference to Exhibit
                    10.10 in Registrant's Annual Report on Form 10-K
                    dated June 27, 1994)

Exhibit 10.8        1994 Stock Option Plan. (Incorporated by
                    reference to Exhibit 10.10 in Registrant's Annual
                    Report on Form 10-K dated June 28, 1995)

Exhibit 10.9        TMBR/Sharp Drilling, Inc. Employee Retirement
                    Plan.  (Incorporated by reference to Exhibit 10.11
                    in Registrant's Annual Report on Form 10-K dated
                    June 28, 1995)

Exhibit 10.10       1998 Stock Option Plan (Incorporated by reference
                    to Exhibit 10.1 in Registrant's Quarterly Report on
                    Form 10-Q dated November 12, 1998)

Exhibit 10.11       Incentive Stock Option Agreement dated September 1,
                    1998, between Don H. Lawson and the Registrant.
                    (Incorporated by reference to Exhibit 10.18 in
                    Registrant's Annual Report on Form 10-K dated June
                    29, 1999)

Exhibit 10.12       Incentive Stock Option Agreement dated September 1,
                    1998, between Jeffrey D. Phillips and the
                    Registrant. (Incorporated by reference to Exhibit
                    10.19 in Registrant's Annual Report on Form 10-K
                    dated June 29, 1999)

Exhibit 10.13       Incentive Stock Option Agreement dated September 1,
                    1998, between Patricia R. Elledge and the
                    Registrant. (Incorporated by reference to Exhibit
                    10.20 in Registrant's Annual Report on Form 10-K
                    dated June 29, 1999)

Exhibit 10.14       Incentive Stock Option Agreement dated September 1,
                    1998, between Joe G. Roper and the Registrant.
                    (Incorporated by reference to Exhibit 10.21 in
                    Registrant's Annual Report on Form 10-K dated June
                    29, 1999)

Exhibit 10.15       Incentive Stock Option Agreement dated September 1,
                    1998, between Thomas C. Brown and the Registrant.
                    (Incorporated by reference to Exhibit 10.22 in
                    Registrant's Annual Report on Form 10-K dated June
                    29, 1999)

Exhibit 10.16       First Amended and Restated Nonstatutory Stock Option
                    Agreement dated September 1, 1998, between Patricia R.
                    Elledge and the Registrant. (Incorporated by reference to
                    Exhibit 10.23 in Registrant's Annual Report on Form 10-K
                    dated June 29, 1999)


                                      -35-


<PAGE> 36
Exhibit 10.17       First Amended and Restated Nonstatutory Stock Option
                    Agreement dated September 1, 1998, between Jeffrey
                    D. Phillips and the Registrant. (Incorporated by
                    reference to Exhibit 10.24 in Registrant's Annual
                    Report on Form 10-K dated June 29, 1999)

Exhibit 10.18       First Amended and Restated Nonstatutory Stock Option
                    Agreement dated September 1, 1998, between Joe G.
                    Roper and the Registrant. (Incorporated by
                    reference to Exhibit 10.25 in Registrant's Annual
                    Report on Form 10-K dated June 29, 1999)

Exhibit 10.19       First Amended and Restated Nonstatutory Stock Option
                    Agreement dated September 1, 1998, between Thomas
                    C. Brown and the Registrant. (Incorporated by
                    reference to Exhibit 10.26 in Registrant's Annual
                    Report on Form 10-K dated June 29, 1999)

Exhibit 10.20       Directors' Fee Stock Plan (Incorporated by reference to
                    Exhibit 10.20 in Registrant's Annual Report on Form 10-K
                    dated June 15, 2001)

Exhibit 10.21       Retention Agreement, dated November 8, 2002, between
                    Thomas C. Brown and the Registrant.

Exhibit 10.22       Retention Agreement, dated November 8, 2002, between
                    Jeffrey D. Phillips and the Registrant.

Exhibit 10.23       Retention Agreement, dated November 8, 2002, between
                    Patricia R. Elledge and the Registrant.

Exhibit 10.24       Retention Agreement, dated November 8, 2002, between Don
                    H. Lawson and the Registrant.

Exhibit 10.25       Form of Stock Purchase Agreement, dated as of February
                    13, 1997, between the Registrant and the stockholders
                    named therein (Incorporated by reference to Exhibit 10.1
                    in the Registrant's Registration Statement on Form S-3,
                    No. 333-23391)

Exhibit 10.26       Second Amended and Restated Loan Agreement dated June 26,
                    2000 between Wells Fargo Bank, Texas N. A. and the
                    Registrant.  (Incorporated by reference to Exhibit 10.1
                    in Registrant's Quarterly Report on Form 10-Q dated
                    August 9,2000)

Exhibit 99.1        Certification of Chief Executive Officer pursuant to 18
                    U.S.C. Section 1350, as adopted pursuant to Section 906
                    of the Sarbanes-Oxley Act of 2002.

Exhibit 99.2        Certification of Principal Financial Officer pursuant to
                    18 U.S.C. Section 1350, as adopted pursuant to Section
                    906 of the Sarbanes-Oxley Act of 2002.


                                      -36-



<PAGE> 37




                                                            Exhibit 99.1


                               CERTIFICATION
                               -------------

        (Not filed pursuant to the Securities Exchange Act of 1934)

     Pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906
of the Sarbanes-Oxley Act of 2002, the undersigned, Thomas C. Brown, the
Chairman of the Board of Directors and Chief Executive Officer of TMBR/Sharp
Drilling, Inc. (the "Company"), hereby certifies that the Quarterly Report on
Form 10Q of the Company for the quarter ended September 30, 2002 fully
complies with the periodic reporting requirements of the Securities Exchange
Act of 1934, as amended, and the information contained in that Form 10Q
Report fairly presents, in all material respects, the financial condition and
results of operations of the Company.



Dated: November 13, 2002           /s/ Thomas C. Brown
                                   ---------------------------------------
                                       Thomas C. Brown, Chairman
                                       of the Board of Directors and Chief
                                       Executive Officer
























                                      -37-





<PAGE> 38
                                                       Exhibit 99.2


                               CERTIFICATION
                               -------------

        (Not filed pursuant to the Securities Exchange Act of 1934)

     Pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906
of the Sarbanes-Oxley Act of 2002, the undersigned, Patricia R. Elledge, the
Chief Financial Officer of TMBR/Sharp Drilling, Inc. (the "Company"), hereby
certifies that the Quarterly Report on Form 10Q of the Company for the
quarter ended September 30, 2002 fully complies with the periodic reporting
requirements of the Securities Exchange Act of 1934, as amended, and the
information contained in that Form 10Q Report fairly presents, in all
material respects, the financial condition and results of operations of the
Company.





Dated: November 13, 2002           /s/ Patricia R. Elledge
                                   ----------------------------------------
                                       Patricia R. Elledge, Chief Financial
                                       Officer



























                                      -38-





<PAGE> 39
                                                            Exhibit 10.21

                                 RETENTION AGREEMENT



     This Retention Agreement (this "Agreement"), dated as of November 8,
2002, is between TMBR/SHARP DRILLING, INC., a Texas corporation (the
"Company"), and Thomas C. Brown ("Employee").


                                RECITATIONS

     The Company may seek to enter into a transaction which could involve a
Change in Control or otherwise become subject to a proposed or threatened
Change in Control;

     The Board of Directors (the "Board") of the Company and the Compensation
Committee of the Board have determined that it is imperative that the Company
and the Board be able to rely upon the Employee to continue in the Employee's
position as Chairman of the Board of Directors and Chief Executive Officer of
the Company, and that the Company be able to receive and rely upon the
Employee's services and advice for the best interests of the Company and its
shareholders, without concern that the Employee might be distracted by the
personal uncertainties and risks created by any proposed Change in Control;
and

     The Board and its Compensation Committee have authorized the Company to
enter into a retention agreement in the form hereof with the Employee;

     NOW, THEREFORE, to assure the Company that it will have the continued
dedication of the Employee and the availability of the Employee's services,
advice and counsel notwithstanding the possibility, threat or occurrence of
a Change in Control, and to induce the Employee to remain in the employ of
the Company, and for other good and valuable consideration, the Company and
the Employee agree as follows:

     1.   Certain Definitions.  In addition to the terms defined in the
preamble and elsewhere in this Agreement, the following terms shall have the
following meanings:

          (a)  "Beneficial Owner" shall have the meaning set forth in Rule
13d-3 and Rule 13d-5 under the Securities Exchange Act of 1934, as in effect
on the date of this Agreement.

          (b)  "Bonus Vesting Date" shall have the meaning given to such term
in Section 2 hereof.


          (c)  "Cause" shall have the meaning given to such term in Section
4 hereof.

          (d)  a "Change in Control" shall be deemed to have occurred on the
date: (A) any Person is or becomes the Beneficial Owner of securities of the
Company representing more than fifty percent (50%) of the Voting Power; (B)
(i) the shareholders of the Company approve the consolidation, merger or

                                      -39-

<PAGE> 40
other business combination of the Company in which the Company is not the
surviving or continuing corporation or pursuant to which shares of the
Company's common stock are converted into cash, securities or other property,
or (ii) the shareholders of the Company approve the sale, lease, exchange or
other transfer (in one transaction or a series of related transactions) of
all, or substantially all, of the assets of the Company and its subsidiaries,
if any (taken as a group); (C) the shareholders of the Company approve any
plan or proposal for the liquidation or dissolution of the Company; (D)
without the approval or recommendation of a majority of the then existing
Board of Directors of the Company, a third person shall cause or bring about
(through solicitation of proxies or otherwise) the removal or resignation of
a majority of the then existing members of the Board of Directors or if a
third person causes or brings about (through solicitation of proxies or
otherwise) an increase in the size of the Board of Directors such that the
then existing members of the Board of Directors thereafter represent a
minority of the total number of persons comprising the entire Board; or (E)
any shares of any class of the Company's stock are purchased pursuant to a
tender or exchange offer (other than an offer by the Company).  For purposes
of this Agreement, where a Change of Control results from a series of related
transactions, the Change of Control shall be deemed to have occurred on the
date of the consummation of the first such transaction.

          (e)  "Earnings" shall mean the base salary paid by the Company to
the Employee during the twelve month period preceding the Bonus Vesting Date
from the Company without giving effect to any reduction thereof that may have
been made without the Employee's consent.

          (f)  "Person" shall have the meaning set forth in Sections 3(a)(9)
and 13(d)(3) of the Securities Exchange Act of 1934, as in effect on the date
of this Agreement.

          (g)  "Voting Power" shall mean the combined voting power of the
outstanding securities of the Company having the right under ordinary
circumstances to vote for the election of directors.

     2.   Services During Certain Events.  If the Employee remains in
continuous employment as Chairman of the Board of Directors and Chief
Executive Officer of the Company from the date hereof until (i) a Change in
Control occurs, or (ii) the Employee's employment with the Company is
terminated by the Company for a reason other than Cause (with the earliest of
such event to occur being referred to herein as the "Bonus Vesting Date"),
then the Employee shall be entitled to receive a bonus in the amount
determined pursuant to Section 3 hereof.

     3.   Payment of Bonus.

          (a)  The Company agrees that the Employee shall be paid a bonus by
the Company within five (5) days following the Bonus Vesting Date in an
amount equal to 2.92 times the Employee's Earnings.




                                      -40-




<PAGE> 41
          (b)  Other Benefit Plans.  The bonus provided for in this Agreement
is not intended to require or to exclude the Employee's continued
participation in other benefit plans in which the Employee currently
participates or which are available to the Company's personnel generally in
the class or category of the Employee or to preclude other compensation or
benefits as may be authorized by the Board or its Compensation Committee from
time to time.

     4.   Conditions to the Obligations of the Company.  The Company shall
have no obligation to pay or cause to be paid to the Employee the bonus
described herein (a) if the Company shall terminate the Employee's employment
for (i) dishonesty, (ii) conviction of a felony, or (iii) the continued
failure by the Employee to perform the duties assigned to the Employee that
are consistent with the position of the Employee with the Company
(termination for "Cause") or (b) if the Employee dies, becomes disabled,
retires, ceases to be Chairman of the Board of Directors and Chief Executive
Officer of the Company or voluntarily terminates his employment with the
Company prior to the Bonus Vesting Date.

     5.   Confidentiality.

          (a)  Confidentiality. The Employee agrees that at all times
following the execution hereof, the Employee will not without the prior
consent of the Company, disclose to any person, firm or corporation any
confidential information of the Company or its subsidiaries which is now
known to the Employee or which hereafter may become known to the Employee as
a result of Employee's employment or association with the Company and which
could be helpful to a competitor, unless such disclosure is required under
the terms of a valid and effective subpoena or order issued by a court or
governmental body; provided, however, that the foregoing shall not apply to
confidential information which becomes publicly disseminated by means other
than a breach of this Agreement.

          (b)  Remedies for Breach.  It is recognized that damages in the
event of breach of this Section 5 by the Employee would be difficult, if not
impossible, to ascertain, and it is therefore agreed that the Company, in
addition to and without limiting any other remedy or right it may have, shall
have the right to an injunction or other equitable relief in any court of
competent jurisdiction enjoining any such breach, and the Employee hereby
waives any and all defenses the Employee may have on the ground of lack of
jurisdiction or competence of the court to grant such an injunction or other
equitable relief.  The existence of this right shall not preclude the Company
from pursuing any other rights and remedies at law or in equity which the
Company may have.

     6.   Reduction in Payments. Notwithstanding the provisions of Section
3(a) hereof, in no event shall any payment to be made under Section 3(a)
exceed $1.00 less than three times the Employee's "Base Amount" within the
meaning of Section 280G of the Internal Revenue Code of 1986, as amended (the
"Code").  If any portion of the payments or benefits to be made available to
the Employee pursuant to Section 3 would be considered an "excess parachute



                                      -41-





<PAGE> 42
payment" within the meaning of Section 28OG of the Code, the amount of cash
otherwise payable to the Employee pursuant to Section 3(a) hereof shall be
reduced to the extent (but only to the extent) necessary to cause no portion
of the payments or benefits made available to the Employee pursuant to
Section 3 hereof to be considered an excess parachute payment within the
meaning of Section 28OG of the Code.  KPMG LLP or such other accounting firm
that may be agreed upon by the Company and the Employee (the "Accounting
Firm") shall determine the Employee's Base Amount and the amount of any
excess parachute payments for purposes of this Section 6. All determinations
made by the Accounting Firm shall be made within 60 days of the Bonus Vesting
Date and shall be binding on the Company and the Employee.  All fees and
expenses of the Accounting Firm shall be borne solely by the Company.

     7.   Term of Agreement.   Unless terminated earlier as a result of
Employee's termination of employment with the Company, this Agreement shall
remain in full force and effect through December 31, 2003, and, beginning
each January lst thereafter, this Agreement shall be automatically extended
for additional one (1) year periods, unless by September 30th of any year the
Company gives notice that this Agreement will not be so extended.

     8.   Miscellaneous.

          (a)  Assignment.  No right, benefit or interest hereunder shall be
subject to assignment, anticipation, alienation, sale, encumbrance, charge,
pledge, hypothecation or set-off in respect of any claim, debt or obligation,
or to execution, attachment, levy or similar process; provided, however, that
the Employee may assign any right, benefit or interest hereunder if such
assignment is permitted under the terms of any plan or policy of insurance or
annuity contract governing such right, benefit or interest.

          (b)  Construction of Agreement.  Except as expressly provided
herein, nothing in this Agreement shall be construed to amend any provision
of any plan or policy of the Company.  This Agreement is not and nothing
herein shall be deemed to create, a commitment of continued employment of the
Employee by the Company.  The benefits provided under this Agreement shall be
in addition to any other compensation agreement or arrangement that the
Company may have with the Employee.

          (c)  Amendment.  This Agreement may not be amended, modified or
canceled except by written agreement of the Company and the Employee.

          (d)  Waiver.  No provision of this Agreement may be waived except
by a writing signed by the party to be bound thereby.

          (e)  Severability.  If any provision or portion of this Agreement
shall be determined to be invalid or unenforceable for any reason, the
remaining provisions of this Agreement shall remain in full force and effect
to the fullest extent permitted by law.

          (f)  Successors.



                                      -42-





<PAGE> 43
               (i)  The Company will require any successor (whether direct or
indirect, by purchase, merger, consolidation or otherwise) to all or
substantially all of the business and/or assets of the Company to expressly
assume and agree to perform this Agreement in the same manner and to the same
extent that the Company would be required to perform it if no such succession
had taken place.  Failure of the Company to obtain such assumption and
agreement prior to the effectiveness of any such succession shall be a breach
of this Agreement and shall entitle the Employee to compensation from the
Company in the same amount and on the same terms as the Employee would be
entitled to pursuant to clause (i) of Section 2 hereof.

               (ii) This Agreement shall inure to the benefit of, and be
enforceable by, the Employee's personal or legal representatives, executors,
administrators, successors, heirs, distributees, devisees and legates.  If
the  Employee dies after the Bonus Vesting Date but prior to the receipt of
the bonus payable hereunder with respect to events occurring prior to death,
such bonus shall be paid pursuant to the last beneficiary designation
executed by the Employee and filed with the Company.  If no beneficiary form
has been filed with respect to this Agreement, the bonus shall be paid to the
Employee's estate.

          (g)  Taxes.  Any payment or delivery required under this Agreement
shall be subject to all requirements of law with regard to withholding of
taxes, filing, making of reports and the like, and the Company shall use its
best efforts to satisfy promptly all such requirements.

          (h)  GOVERNING LAW.  THIS AGREEMENT SHALL BE GOVERNED AND CONSTRUED
IN ACCORDANCE WITH THE LAWS OF THE STATE OF TEXAS, WITHOUT GIVING EFFECT T
ITS CONFLICTS OF LAWS PRINCIPLES.  VENUE SHALL LIE IN MIDLAND COUNTY, TEXAS
FOR THE PURPOSE OF RESOLVING AND ENFORCING ANY DISPUTE WHICH MAY ARISE UNDER
THIS AGREEMENT AND THE PARTIES AGREE THAT THEY WILL SUBMIT THEMSELVES TO THE
JURISDICTION OF THE COMPETENT STATE OR FEDERAL COURT SITUATED IN MIDLAND
COUNTY, TEXAS.

          (i)       Not Contract of Employment.  Subject to the provisions of
Section 3 of this Agreement, the entering into of this Agreement shall not be
deemed to be a contract of employment between the Company and the Employee,
or to be consideration for the employment of the Employee, and  nothing
herein contained shall be deemed to give the Employee the right to be
retained in the employ of the Company or to restrict the right of the Company
to discharge the Employee at any time.

          (j)  Gender.  Wherever in this instrument words are used in the
masculine or neuter gender, they shall be read and construed as in the
masculine, feminine or neuter gender wherever they would so apply, and vice
versa.  Wherever words appear in the singular or plural, they shall be read
and construed as in the plural or singular, respectively, wherever they would
so apply.





                                      -43-





<PAGE> 44
          (k)  Headings.  The headings of the Sections herein are included
solely for reference convenience, and shall not in any way affect the meaning
or interpretation of the Agreement.

          (1)  Entire Agreement.  This Agreement sets forth the entire
agreement and understanding of the parties hereto with respect to the matters
covered hereby.

     IN WITNESS WHEREOF, the parties have executed this Agreement as of the
date first above written.


                                   TMBR/SHARP DRILLING, INC.



                                   By: /s/ Jeffrey D. Phillips
                                       --------------------------------
                                         Jeffrey D. Phillips, President



                                   EMPLOYEE


                                   /s/ Thomas C. Brown
                                       --------------------------------
                                       Thomas C. Brown

























                                      -44-





<PAGE> 45
                                                               Exhibit 10.22

                                 RETENTION AGREEMENT



     This Retention Agreement (this "Agreement"), dated as of November 8,
2002, is between TMBR/SHARP DRILLING, INC., a Texas corporation (the
"Company"), and Jeffrey D. Phillips ("Employee").


                                RECITATIONS

     The Company may seek to enter into a transaction which could involve a
Change in Control or otherwise become subject to a proposed or threatened
Change in Control;

     The Board of Directors (the "Board") of the Company and the Compensation
Committee of the Board have determined that it is imperative that the Company
and the Board be able to rely upon the Employee to continue in the Employee's
position as President of the Company, and that the Company be able to receive
and rely upon the Employee's services and advice for the best interests of
the Company and its shareholders, without concern that the Employee might be
distracted by the personal uncertainties and risks created by any proposed
Change in Control; and

     The Board and its Compensation Committee have authorized the Company to
enter into a retention agreement in the form hereof with the Employee;

     NOW, THEREFORE, to assure the Company that it will have the continued
dedication of the Employee and the availability of the Employee's services,
advice and counsel notwithstanding the possibility, threat or occurrence of
a Change in Control, and to induce the Employee to remain in the employ of
the Company, and for other good and valuable consideration, the Company and
the Employee agree as follows:

     1.   Certain Definitions.  In addition to the terms defined in the
preamble and elsewhere in this Agreement, the following terms shall have the
following meanings:

          (a)  "Beneficial Owner" shall have the meaning set forth in Rule
13d-3 and Rule 13d-5 under the Securities Exchange Act of 1934, as in effect
on the date of this Agreement.

          (b)  "Bonus Vesting Date" shall have the meaning given to such term
in Section 2 hereof.


          (c)  "Cause" shall have the meaning given to such term in Section
4 hereof.

          (d)  a "Change in Control" shall be deemed to have occurred on the
date: (A) any Person is or becomes the Beneficial Owner of securities of the
Company representing more than fifty percent (50%) of the Voting Power; (B)
(i) the shareholders of the Company approve the consolidation, merger or
other business combination of the Company in which the Company is not the
surviving or continuing corporation or pursuant to which shares of the

                                      -45-
<PAGE> 46
Company's common stock are converted into cash, securities or other property,
or (ii) the shareholders of the Company approve the sale, lease, exchange or
other transfer (in one transaction or a series of related transactions) of
all, or substantially all, of the assets of the Company and its subsidiaries,
if any (taken as a group); (C) the shareholders of the Company approve any
plan or proposal for the liquidation or dissolution of the Company; (D)
without the approval or recommendation of a majority of the then existing
Board of Directors of the Company, a third person shall cause or bring about
(through solicitation of proxies or otherwise) the removal or resignation of
a majority of the then existing members of the Board of Directors or if a
third person causes or brings about (through solicitation of proxies or
otherwise) an increase in the size of the Board of Directors such that the
then existing members of the Board of Directors thereafter represent a
minority of the total number of persons comprising the entire Board; or (E)
any shares of any class of the Company's stock are purchased pursuant to a
tender or exchange offer (other than an offer by the Company).  For purposes
of this Agreement, where a Change of Control results from a series of related
transactions, the Change of Control shall be deemed to have occurred on the
date of the consummation of the first such transaction.

          (e)  "Earnings" shall mean the base salary paid by the Company to
the Employee during the twelve month period preceding the Bonus Vesting Date
from the Company without giving effect to any reduction thereof that may have
been made without the Employee's consent.

          (f)  "Person" shall have the meaning set forth in Sections 3(a)(9)
and 13(d)(3) of the Securities Exchange Act of 1934, as in effect on the date
of this Agreement.

          (g)  "Voting Power" shall mean the combined voting power of the
outstanding securities of the Company having the right under ordinary
circumstances to vote for the election of directors.

     2.   Services During Certain Events.  If the Employee remains in
continuous employment as President of the Company from the date hereof until
(i) a Change in Control occurs, or (ii) the Employee's employment with the
Company is terminated by the Company for a reason other than Cause (with the
earliest of such event to occur being referred to herein as the "Bonus
Vesting Date"), then the Employee shall be entitled to receive a bonus in the
amount determined pursuant to Section 3 hereof.

     3.   Payment of Bonus.

          (a)  The Company agrees that the Employee shall be paid a bonus by
the Company within five (5) days following the Bonus Vesting Date in an
amount equal to 2.97 times the Employee's Earnings.

          (b)  Other Benefit Plans.  The bonus provided for in this Agreement
is not intended to require or to exclude the Employee's continued
participation in other benefit plans in which the Employee currently
participates or which are available to the Company's personnel generally in
the class or category of the Employee or to preclude other compensation or
benefits as may be authorized by the Board or its Compensation Committee from
time to time.


                                      -46-


<PAGE> 47
     4.   Conditions to the Obligations of the Company.  The Company shall
have no obligation to pay or cause to be paid to the Employee the bonus
described herein (a) if the Company shall terminate the Employee's employment
for (i) dishonesty, (ii) conviction of a felony, or (iii) the continued
failure by the Employee to perform the duties assigned to the Employee that
are consistent with the position of the Employee with the Company
(termination for "Cause") or (b) if the Employee dies, becomes disabled,
retires, ceases to be President of the Company or voluntarily terminates his
employment with the Company prior to the Bonus Vesting Date.

     5.   Confidentiality.

          (a)  Confidentiality. The Employee agrees that at all times
following the execution hereof, the Employee will not without the prior
consent of the Company, disclose to any person, firm or corporation any
confidential information of the Company or its subsidiaries which is now
known to the Employee or which hereafter may become known to the Employee as
a result of Employee's employment or association with the Company and which
could be helpful to a competitor, unless such disclosure is required under
the terms of a valid and effective subpoena or order issued by a court or
governmental body; provided, however, that the foregoing shall not apply to
confidential information which becomes publicly disseminated by means other
than a breach of this Agreement.

          (b)  Remedies for Breach.  It is recognized that damages in the
event of breach of this Section 5 by the Employee would be difficult, if not
impossible, to ascertain, and it is therefore agreed that the Company, in
addition to and without limiting any other remedy or right it may have, shall
have the right to an injunction or other equitable relief in any court of
competent jurisdiction enjoining any such breach, and the Employee hereby
waives any and all defenses the Employee may have on the ground of lack of
jurisdiction or competence of the court to grant such an injunction or other
equitable relief.  The existence of this right shall not preclude the Company
from pursuing any other rights and remedies at law or in equity which the
Company may have.

     6.   Reduction in Payments. Notwithstanding the provisions of Section
3(a) hereof, in no event shall any payment to be made under Section 3(a)
exceed $1.00 less than three times the Employee's "Base Amount" within the
meaning of Section 280G of the Internal Revenue Code of 1986, as amended (the
"Code").  If any portion of the payments or benefits to be made available to
the Employee pursuant to Section 3 would be considered an "excess parachute
payment" within the meaning of Section 28OG of the Code, the amount of cash
otherwise payable to the Employee pursuant to Section 3(a) hereof shall be
reduced to the extent (but only to the extent) necessary to cause no portion
of the payments or benefits made available to the Employee pursuant to
Section 3 hereof to be considered an excess parachute payment within the
meaning of Section 28OG of the Code.  KPMG LLP or such other accounting firm
that may be agreed upon by the Company and the Employee (the "Accounting
Firm") shall determine the Employee's Base Amount and the amount of any
excess parachute payments for purposes of this Section 6. All determinations
made by the Accounting Firm shall be made within 60 days of the Bonus Vesting
Date and shall be binding on the Company and the Employee.  All fees and
expenses of the Accounting Firm shall be borne solely by the Company.


                                      -47-


<PAGE> 48
     7.   Term of Agreement.   Unless terminated earlier as a result of
Employee's termination of employment with the Company, this Agreement shall
remain in full force and effect through December 31, 2003, and, beginning
each January lst thereafter, this Agreement shall be automatically extended
for additional one (1) year periods, unless by September 30th of any year the
Company gives notice that this Agreement will not be so extended.

     8.   Miscellaneous.

          (a)  Assignment.  No right, benefit or interest hereunder shall be
subject to assignment, anticipation, alienation, sale, encumbrance, charge,
pledge, hypothecation or set-off in respect of any claim, debt or obligation,
or to execution, attachment, levy or similar process; provided, however, that
the Employee may assign any right, benefit or interest hereunder if such
assignment is permitted under the terms of any plan or policy of insurance or
annuity contract governing such right, benefit or interest.

          (b)  Construction of Agreement.  Except as expressly provided
herein, nothing in this Agreement shall be construed to amend any provision
of any plan or policy of the Company.  This Agreement is not and nothing
herein shall be deemed to create, a commitment of continued employment of the
Employee by the Company.  The benefits provided under this Agreement shall be
in addition to any other compensation agreement or arrangement that the
Company may have with the Employee.

          (c)  Amendment.  This Agreement may not be amended, modified or
canceled except by written agreement of the Company and the Employee.

          (d)  Waiver.  No provision of this Agreement may be waived except
by a writing signed by the party to be bound thereby.

          (e)  Severability.  If any provision or portion of this Agreement
shall be determined to be invalid or unenforceable for any reason, the
remaining provisions of this Agreement shall remain in full force and effect
to the fullest extent permitted by law.

          (f)  Successors.

               (i)  The Company will require any successor (whether direct or
indirect, by purchase, merger, consolidation or otherwise) to all or
substantially all of the business and/or assets of the Company to expressly
assume and agree to perform this Agreement in the same manner and to the same
extent that the Company would be required to perform it if no such succession
had taken place.  Failure of the Company to obtain such assumption and
agreement prior to the effectiveness of any such succession shall be a breach
of this Agreement and shall entitle the Employee to compensation from the
Company in the same amount and on the same terms as the Employee would be
entitled to pursuant to clause (i) of Section 2 hereof.





                                      -48-





<PAGE> 49
               (ii) This Agreement shall inure to the benefit of, and be
enforceable by, the Employee's personal or legal representatives, executors,
administrators, successors, heirs, distributees, devisees and legates.  If
the  Employee dies after the Bonus Vesting Date but prior to the receipt of
the bonus payable hereunder with respect to events occurring prior to death,
such bonus shall be paid pursuant to the last beneficiary designation
executed by the Employee and filed with the Company.  If no beneficiary form
has been filed with respect to this Agreement, the bonus shall be paid to the
Employee's estate.

          (g)  Taxes.  Any payment or delivery required under this Agreement
shall be subject to all requirements of law with regard to withholding of
taxes, filing, making of reports and the like, and the Company shall use its
best efforts to satisfy promptly all such requirements.

          (h)  GOVERNING LAW.  THIS AGREEMENT SHALL BE GOVERNED AND CONSTRUED
IN ACCORDANCE WITH THE LAWS OF THE STATE OF TEXAS, WITHOUT GIVING EFFECT T
ITS CONFLICTS OF LAWS PRINCIPLES.  VENUE SHALL LIE IN MIDLAND COUNTY, TEXAS
FOR THE PURPOSE OF RESOLVING AND ENFORCING ANY DISPUTE WHICH MAY ARISE UNDER
THIS AGREEMENT AND THE PARTIES AGREE THAT THEY WILL SUBMIT THEMSELVES TO THE
JURISDICTION OF THE COMPETENT STATE OR FEDERAL COURT SITUATED IN MIDLAND
COUNTY, TEXAS.

          (i)       Not Contract of Employment.  Subject to the provisions of
Section 3 of this Agreement, the entering into of this Agreement shall not be
deemed to be a contract of employment between the Company and the Employee,
or to be consideration for the employment of the Employee, and  nothing
herein contained shall be deemed to give the Employee the right to be
retained in the employ of the Company or to restrict the right of the Company
to discharge the Employee at any time.

          (j)  Gender.  Wherever in this instrument words are used in the
masculine or neuter gender, they shall be read and construed as in the
masculine, feminine or neuter gender wherever they would so apply, and vice
versa.  Wherever words appear in the singular or plural, they shall be read
and construed as in the plural or singular, respectively, wherever they would
so apply.

          (k)  Headings.  The headings of the Sections herein are included
solely for reference convenience, and shall not in any way affect the meaning
or interpretation of the Agreement.

          (1)  Entire Agreement.  This Agreement sets forth the entire
agreement and understanding of the parties hereto with respect to the matters
covered hereby.








                                      -49-





<PAGE> 50
     IN WITNESS WHEREOF, the parties have executed this Agreement as of the
date first above written.


                                   TMBR/SHARP DRILLING, INC.



                                   By: /s/ Thomas C. Brown
                                       ----------------------------------
                                         Thomas C. Brown, Chairman of the
                                         Board and Chief Executive Officer



                                   EMPLOYEE


                                   /s/ Jeffrey D. Phillips
                                       ----------------------------------
                                       Jeffrey D. Phillips
































                                      -50-





<PAGE> 51


                                                            Exhibit 10.23


                                 RETENTION AGREEMENT



     This Retention Agreement (this "Agreement"), dated as of November 8,
2002, is between TMBR/SHARP DRILLING, INC., a Texas corporation (the
"Company"), and Patricia R. Elledge ("Employee").


                                RECITATIONS

     The Company may seek to enter into a transaction which could involve a
Change in Control or otherwise become subject to a proposed or threatened
Change in Control;

     The Board of Directors (the "Board") of the Company and the Compensation
Committee of the Board have determined that it is imperative that the Company
and the Board be able to rely upon the Employee to continue in the Employee's
position as Controller and Treasurer of the Company, and that the Company be
able to receive and rely upon the Employee's services and advice for the best
interests of the Company and its shareholders, without concern that the
Employee might be distracted by the personal uncertainties and risks created
by any proposed Change in Control; and

     The Board and its Compensation Committee have authorized the Company to
enter into a retention agreement in the form hereof with the Employee;

     NOW, THEREFORE, to assure the Company that it will have the continued
dedication of the Employee and the availability of the Employee's services,
advice and counsel notwithstanding the possibility, threat or occurrence of
a Change in Control, and to induce the Employee to remain in the employ of
the Company, and for other good and valuable consideration, the Company and
the Employee agree as follows:

     1.   Certain Definitions.  In addition to the terms defined in the
preamble and elsewhere in this Agreement, the following terms shall have the
following meanings:

          (a)  "Beneficial Owner" shall have the meaning set forth in Rule
13d-3 and Rule 13d-5 under the Securities Exchange Act of 1934, as in effect
on the date of this Agreement.

          (b)  "Bonus Vesting Date" shall have the meaning given to such term
in Section 2 hereof.


          (c)  "Cause" shall have the meaning given to such term in Section
4 hereof.

          (d)  a "Change in Control" shall be deemed to have occurred on the
date: (A) any Person is or becomes the Beneficial Owner of securities of the

                                      -51-

<PAGE> 52
Company representing more than fifty percent (50%) of the Voting Power; (B)
(i) the shareholders of the Company approve the consolidation, merger or
other business combination of the Company in which the Company is not the
surviving or continuing corporation or pursuant to which shares of the
Company's common stock are converted into cash, securities or other property,
or (ii) the shareholders of the Company approve the sale, lease, exchange or
other transfer (in one transaction or a series of related transactions) of
all, or substantially all, of the assets of the Company and its subsidiaries,
if any (taken as a group); (C) the shareholders of the Company approve any
plan or proposal for the liquidation or dissolution of the Company; (D)
without the approval or recommendation of a majority of the then existing
Board of Directors of the Company, a third person shall cause or bring about
(through solicitation of proxies or otherwise) the removal or resignation of
a majority of the then existing members of the Board of Directors or if a
third person causes or brings about (through solicitation of proxies or
otherwise) an increase in the size of the Board of Directors such that the
then existing members of the Board of Directors thereafter represent a
minority of the total number of persons comprising the entire Board; or (E)
any shares of any class of the Company's stock are purchased pursuant to a
tender or exchange offer (other than an offer by the Company).  For purposes
of this Agreement, where a Change of Control results from a series of related
transactions, the Change of Control shall be deemed to have occurred on the
date of the consummation of the first such transaction.

          (e)  "Earnings" shall mean the base salary paid by the Company to
the Employee during the twelve month period preceding the Bonus Vesting Date
from the Company without giving effect to any reduction thereof that may have
been made without the Employee's consent.

          (f)  "Person" shall have the meaning set forth in Sections 3(a)(9)
and 13(d)(3) of the Securities Exchange Act of 1934, as in effect on the date
of this Agreement.

          (g)  "Voting Power" shall mean the combined voting power of the
outstanding securities of the Company having the right under ordinary
circumstances to vote for the election of directors.

     2.   Services During Certain Events.  If the Employee remains in
continuous employment as Controller and Treasurer of the Company from the
date hereof until (i) a Change in Control occurs, or (ii) the Employee's
employment with the Company is terminated by the Company for a reason other
than Cause (with the earliest of such event to occur being referred to herein
as the "Bonus Vesting Date"), then the Employee shall be entitled to receive
a bonus in the amount determined pursuant to Section 3 hereof.

     3.   Payment of Bonus.

          (a)  The Company agrees that the Employee shall be paid a bonus by
the Company within five (5) days following the Bonus Vesting Date in an
amount equal to 1.60 times the Employee's Earnings.

          (b)  Other Benefit Plans.  The bonus provided for in this Agreement
is not intended to require or to exclude the Employee's continued
participation in other benefit plans in which the Employee currently
participates or which are available to the Company's personnel generally in


                                      -52-

<PAGE> 53
the class or category of the Employee or to preclude other compensation or
benefits as may be authorized by the Board or its Compensation Committee from
time to time.

     4.   Conditions to the Obligations of the Company.  The Company shall
have no obligation to pay or cause to be paid to the Employee the bonus
described herein (a) if the Company shall terminate the Employee's employment
for (i) dishonesty, (ii) conviction of a felony, or (iii) the continued
failure by the Employee to perform the duties assigned to the Employee that
are consistent with the position of the Employee with the Company
(termination for "Cause") or (b) if the Employee dies, becomes disabled,
retires, ceases to be Controller and Treasurer of the Company or voluntarily
terminates her employment with the Company prior to the Bonus Vesting Date.

     5.   Confidentiality.

          (a)  Confidentiality. The Employee agrees that at all times
following the execution hereof, the Employee will not without the prior
consent of the Company, disclose to any person, firm or corporation any
confidential information of the Company or its subsidiaries which is now
known to the Employee or which hereafter may become known to the Employee as
a result of Employee's employment or association with the Company and which
could be helpful to a competitor, unless such disclosure is required under
the terms of a valid and effective subpoena or order issued by a court or
governmental body; provided, however, that the foregoing shall not apply to
confidential information which becomes publicly disseminated by means other
than a breach of this Agreement.

          (b)  Remedies for Breach.  It is recognized that damages in the
event of breach of this Section 5 by the Employee would be difficult, if not
impossible, to ascertain, and it is therefore agreed that the Company, in
addition to and without limiting any other remedy or right it may have, shall
have the right to an injunction or other equitable relief in any court of
competent jurisdiction enjoining any such breach, and the Employee hereby
waives any and all defenses the Employee may have on the ground of lack of
jurisdiction or competence of the court to grant such an injunction or other
equitable relief.  The existence of this right shall not preclude the Company
from pursuing any other rights and remedies at law or in equity which the
Company may have.

     6.   Reduction in Payments. Notwithstanding the provisions of Section
3(a) hereof, in no event shall any payment to be made under Section 3(a)
exceed $1.00 less than three times the Employee's "Base Amount" within the
meaning of Section 280G of the Internal Revenue Code of 1986, as amended (the
"Code").  If any portion of the payments or benefits to be made available to
the Employee pursuant to Section 3 would be considered an "excess parachute
payment" within the meaning of Section 28OG of the Code, the amount of cash
otherwise payable to the Employee pursuant to Section 3(a) hereof shall be
reduced to the extent (but only to the extent) necessary to cause no portion
of the payments or benefits made available to the Employee pursuant to
Section 3 hereof to be considered an excess parachute payment within the
meaning of Section 28OG of the Code.  KPMG LLP or such other accounting firm
that may be agreed upon by the Company and the Employee (the "Accounting
Firm") shall determine the Employee's Base Amount and the amount of any


                                      -53-


<PAGE> 54
excess parachute payments for purposes of this Section 6. All determinations
made by the Accounting Firm shall be made within 60 days of the Bonus Vesting
Date and shall be binding on the Company and the Employee.  All fees and
expenses of the Accounting Firm shall be borne solely by the Company.

     7.   Term of Agreement.   Unless terminated earlier as a result of
Employee's termination of employment with the Company, this Agreement shall
remain in full force and effect through December 31, 2003, and, beginning
each January lst thereafter, this Agreement shall be automatically extended
for additional one (1) year periods, unless by September 30th of any year the
Company gives notice that this Agreement will not be so extended.

     8.   Miscellaneous.

          (a)  Assignment.  No right, benefit or interest hereunder shall be
subject to assignment, anticipation, alienation, sale, encumbrance, charge,
pledge, hypothecation or set-off in respect of any claim, debt or obligation,
or to execution, attachment, levy or similar process; provided, however, that
the Employee may assign any right, benefit or interest hereunder if such
assignment is permitted under the terms of any plan or policy of insurance or
annuity contract governing such right, benefit or interest.

          (b)  Construction of Agreement.  Except as expressly provided
herein, nothing in this Agreement shall be construed to amend any provision
of any plan or policy of the Company.  This Agreement is not and nothing
herein shall be deemed to create, a commitment of continued employment of the
Employee by the Company.  The benefits provided under this Agreement shall be
in addition to any other compensation agreement or arrangement that the
Company may have with the Employee.

          (c)  Amendment.  This Agreement may not be amended, modified or
canceled except by written agreement of the Company and the Employee.

          (d)  Waiver.  No provision of this Agreement may be waived except
by a writing signed by the party to be bound thereby.

          (e)  Severability.  If any provision or portion of this Agreement
shall be determined to be invalid or unenforceable for any reason, the
remaining provisions of this Agreement shall remain in full force and effect
to the fullest extent permitted by law.

          (f)  Successors.

               (i)  The Company will require any successor (whether direct or
indirect, by purchase, merger, consolidation or otherwise) to all or
substantially all of the business and/or assets of the Company to expressly
assume and agree to perform this Agreement in the same manner and to the same
extent that the Company would be required to perform it if no such succession
had taken place.  Failure of the Company to obtain such assumption and
agreement prior to the effectiveness of any such succession shall be a breach
of this Agreement and shall entitle the Employee to compensation from the
Company in the same amount and on the same terms as the Employee would be
entitled to pursuant to clause (i) of Section 2 hereof.


                                      -54-



<PAGE> 55

               (ii) This Agreement shall inure to the benefit of, and be
enforceable by, the Employee's personal or legal representatives, executors,
administrators, successors, heirs, distributees, devisees and legates.  If
the  Employee dies after the Bonus Vesting Date but prior to the receipt of
the bonus payable hereunder with respect to events occurring prior to death,
such bonus shall be paid pursuant to the last beneficiary designation
executed by the Employee and filed with the Company.  If no beneficiary form
has been filed with respect to this Agreement, the bonus shall be paid to the
Employee's estate.

          (g)  Taxes.  Any payment or delivery required under this Agreement
shall be subject to all requirements of law with regard to withholding of
taxes, filing, making of reports and the like, and the Company shall use its
best efforts to satisfy promptly all such requirements.

          (h)  GOVERNING LAW.  THIS AGREEMENT SHALL BE GOVERNED AND CONSTRUED
IN ACCORDANCE WITH THE LAWS OF THE STATE OF TEXAS, WITHOUT GIVING EFFECT T
ITS CONFLICTS OF LAWS PRINCIPLES.  VENUE SHALL LIE IN MIDLAND COUNTY, TEXAS
FOR THE PURPOSE OF RESOLVING AND ENFORCING ANY DISPUTE WHICH MAY ARISE UNDER
THIS AGREEMENT AND THE PARTIES AGREE THAT THEY WILL SUBMIT THEMSELVES TO THE
JURISDICTION OF THE COMPETENT STATE OR FEDERAL COURT SITUATED IN MIDLAND
COUNTY, TEXAS.

          (i)       Not Contract of Employment.  Subject to the provisions of
Section 3 of this Agreement, the entering into of this Agreement shall not be
deemed to be a contract of employment between the Company and the Employee,
or to be consideration for the employment of the Employee, and  nothing
herein contained shall be deemed to give the Employee the right to be
retained in the employ of the Company or to restrict the right of the Company
to discharge the Employee at any time.

          (j)  Gender.  Wherever in this instrument words are used in the
masculine or neuter gender, they shall be read and construed as in the
masculine, feminine or neuter gender wherever they would so apply, and vice
versa.  Wherever words appear in the singular or plural, they shall be read
and construed as in the plural or singular, respectively, wherever they would
so apply.

          (k)  Headings.  The headings of the Sections herein are included
solely for reference convenience, and shall not in any way affect the meaning
or interpretation of the Agreement.

          (1)  Entire Agreement.  This Agreement sets forth the entire
agreement and understanding of the parties hereto with respect to the matters
covered hereby.







                                      -55-





<PAGE> 56
     IN WITNESS WHEREOF, the parties have executed this Agreement as of the
date first above written.


                                   TMBR/SHARP DRILLING, INC.



                                   By:/s/ Thomas C. Brown
                                      -----------------------------------
                                        Thomas C. Brown, Chairman of the
                                        Board and Chief Executive Officer



                                   EMPLOYEE


                                   /s/ Patricia R. Elledge
                                   --------------------------------------
                                       Patricia R. Elledge
































                                      -56-





<PAGE> 57
                                                           Exhibit 10.24


                                 RETENTION AGREEMENT



     This Retention Agreement (this "Agreement"), dated as of November 8,
2002, is between TMBR/SHARP DRILLING, INC., a Texas corporation (the
"Company"), and Don H. Lawson ("Employee").


                                RECITATIONS

     The Company may seek to enter into a transaction which could involve a
Change in Control or otherwise become subject to a proposed or threatened
Change in Control;

     The Board of Directors (the "Board") of the Company and the Compensation
Committee of the Board have determined that it is imperative that the Company
and the Board be able to rely upon the Employee to continue in the Employee's
position as Vice President-Operations of the Company, and that the Company be
able to receive and rely upon the Employee's services and advice for the best
interests of the Company and its shareholders, without concern that the
Employee might be distracted by the personal uncertainties and risks created
by any proposed Change in Control; and

     The Board and its Compensation Committee have authorized the Company to
enter into a retention agreement in the form hereof with the Employee;

     NOW, THEREFORE, to assure the Company that it will have the continued
dedication of the Employee and the availability of the Employee's services,
advice and counsel notwithstanding the possibility, threat or occurrence of
a Change in Control, and to induce the Employee to remain in the employ of
the Company, and for other good and valuable consideration, the Company and
the Employee agree as follows:

     1.   Certain Definitions.  In addition to the terms defined in the
preamble and elsewhere in this Agreement, the following terms shall have the
following meanings:

          (a)  "Beneficial Owner" shall have the meaning set forth in Rule
13d-3 and Rule 13d-5 under the Securities Exchange Act of 1934, as in effect
on the date of this Agreement.

          (b)  "Bonus Vesting Date" shall have the meaning given to such term
in Section 2 hereof.


          (c)  "Cause" shall have the meaning given to such term in Section
4 hereof.


                                      -57-





<PAGE> 58
          (d)  a "Change in Control" shall be deemed to have occurred on the
date: (A) any Person is or becomes the Beneficial Owner of securities of the
Company representing more than fifty percent (50%) of the Voting Power; (B)
(i) the shareholders of the Company approve the consolidation, merger or
other business combination of the Company in which the Company is not the
surviving or continuing corporation or pursuant to which shares of the
Company's common stock are converted into cash, securities or other property,
or (ii) the shareholders of the Company approve the sale, lease, exchange or
other transfer (in one transaction or a series of related transactions) of
all, or substantially all, of the assets of the Company and its subsidiaries,
if any (taken as a group); (C) the shareholders of the Company approve any
plan or proposal for the liquidation or dissolution of the Company; (D)
without the approval or recommendation of a majority of the then existing
Board of Directors of the Company, a third person shall cause or bring about
(through solicitation of proxies or otherwise) the removal or resignation of
a majority of the then existing members of the Board of Directors or if a
third person causes or brings about (through solicitation of proxies or
otherwise) an increase in the size of the Board of Directors such that the
then existing members of the Board of Directors thereafter represent a
minority of the total number of persons comprising the entire Board; or (E)
any shares of any class of the Company's stock are purchased pursuant to a
tender or exchange offer (other than an offer by the Company).  For purposes
of this Agreement, where a Change of Control results from a series of related
transactions, the Change of Control shall be deemed to have occurred on the
date of the consummation of the first such transaction.

          (e)  "Earnings" shall mean the base salary paid by the Company to
the Employee during the twelve month period preceding the Bonus Vesting Date
from the Company without giving effect to any reduction thereof that may have
been made without the Employee's consent.

          (f)  "Person" shall have the meaning set forth in Sections 3(a)(9)
and 13(d)(3) of the Securities Exchange Act of 1934, as in effect on the date
of this Agreement.

          (g)  "Voting Power" shall mean the combined voting power of the
outstanding securities of the Company having the right under ordinary
circumstances to vote for the election of directors.

     2.   Services During Certain Events.  If the Employee remains in
continuous employment as Vice President-Operations of the Company from the
date hereof until (i) a Change in Control occurs, or (ii) the Employee's
employment with the Company is terminated by the Company for a reason other
than Cause (with the earliest of such event to occur being referred to herein
as the "Bonus Vesting Date"), then the Employee shall be entitled to receive
a bonus in the amount determined pursuant to Section 3 hereof.

     3.   Payment of Bonus.

          (a)  The Company agrees that the Employee shall be paid a bonus by
the Company within five (5) days following the Bonus Vesting Date in an
amount equal to 1.80 times the Employee's Earnings.


                                      -58-




<PAGE> 59
          (b)  Other Benefit Plans.  The bonus provided for in this Agreement
is not intended to require or to exclude the Employee's continued
participation in other benefit plans in which the Employee currently
participates or which are available to the Company's personnel generally in
the class or category of the Employee or to preclude other compensation or
benefits as may be authorized by the Board or its Compensation Committee from
time to time.

     4.   Conditions to the Obligations of the Company.  The Company shall
have no obligation to pay or cause to be paid to the Employee the bonus
described herein (a) if the Company shall terminate the Employee's employment
for (i) dishonesty, (ii) conviction of a felony, or (iii) the continued
failure by the Employee to perform the duties assigned to the Employee that
are consistent with the position of the Employee with the Company
(termination for "Cause") or (b) if the Employee dies, becomes disabled,
retires, ceases to be Vice President-Operations of the Company or voluntarily
terminates her employment with the Company prior to the Bonus Vesting Date.

     5.   Confidentiality.

          (a)  Confidentiality. The Employee agrees that at all times
following the execution hereof, the Employee will not without the prior
consent of the Company, disclose to any person, firm or corporation any
confidential information of the Company or its subsidiaries which is now
known to the Employee or which hereafter may become known to the Employee as
a result of Employee's employment or association with the Company and which
could be helpful to a competitor, unless such disclosure is required under
the terms of a valid and effective subpoena or order issued by a court or
governmental body; provided, however, that the foregoing shall not apply to
confidential information which becomes publicly disseminated by means other
than a breach of this Agreement.

          (b)  Remedies for Breach.  It is recognized that damages in the
event of breach of this Section 5 by the Employee would be difficult, if not
impossible, to ascertain, and it is therefore agreed that the Company, in
addition to and without limiting any other remedy or right it may have, shall
have the right to an injunction or other equitable relief in any court of
competent jurisdiction enjoining any such breach, and the Employee hereby
waives any and all defenses the Employee may have on the ground of lack of
jurisdiction or competence of the court to grant such an injunction or other
equitable relief.  The existence of this right shall not preclude the Company
from pursuing any other rights and remedies at law or in equity which the
Company may have.

     6.   Reduction in Payments. Notwithstanding the provisions of Section
3(a) hereof, in no event shall any payment to be made under Section 3(a)
exceed $1.00 less than three times the Employee's "Base Amount" within the
meaning of Section 280G of the Internal Revenue Code of 1986, as amended (the
"Code").  If any portion of the payments or benefits to be made available to
the Employee pursuant to Section 3 would be considered an "excess parachute
payment" within the meaning of Section 28OG of the Code, the amount of cash
otherwise payable to the Employee pursuant to Section 3(a) hereof shall be
reduced to the extent (but only to the extent) necessary to cause no portion



                                      -59-


<PAGE> 60
of the payments or benefits made available to the Employee pursuant to
Section 3 hereof to be considered an excess parachute payment within the
meaning of Section 28OG of the Code.  KPMG LLP or such other accounting firm
that may be agreed upon by the Company and the Employee (the "Accounting
Firm") shall determine the Employee's Base Amount and the amount of any
excess parachute payments for purposes of this Section 6. All determinations
made by the Accounting Firm shall be made within 60 days of the Bonus Vesting
Date and shall be binding on the Company and the Employee.  All fees and
expenses of the Accounting Firm shall be borne solely by the Company.

     7.   Term of Agreement.   Unless terminated earlier as a result of
Employee's termination of employment with the Company, this Agreement shall
remain in full force and effect through December 31, 2003, and, beginning
each January lst thereafter, this Agreement shall be automatically extended
for additional one (1) year periods, unless by September 30th of any year the
Company gives notice that this Agreement will not be so extended.

     8.   Miscellaneous.

          (a)  Assignment.  No right, benefit or interest hereunder shall be
subject to assignment, anticipation, alienation, sale, encumbrance, charge,
pledge, hypothecation or set-off in respect of any claim, debt or obligation,
or to execution, attachment, levy or similar process; provided, however, that
the Employee may assign any right, benefit or interest hereunder if such
assignment is permitted under the terms of any plan or policy of insurance or
annuity contract governing such right, benefit or interest.

          (b)  Construction of Agreement.  Except as expressly provided
herein, nothing in this Agreement shall be construed to amend any provision
of any plan or policy of the Company.  This Agreement is not and nothing
herein shall be deemed to create, a commitment of continued employment of the
Employee by the Company.  The benefits provided under this Agreement shall be
in addition to any other compensation agreement or arrangement that the
Company may have with the Employee.

          (c)  Amendment.  This Agreement may not be amended, modified or
canceled except by written agreement of the Company and the Employee.

          (d)  Waiver.  No provision of this Agreement may be waived except
by a writing signed by the party to be bound thereby.

          (e)  Severability.  If any provision or portion of this Agreement
shall be determined to be invalid or unenforceable for any reason, the
remaining provisions of this Agreement shall remain in full force and effect
to the fullest extent permitted by law.

          (f)  Successors.

               (i)  The Company will require any successor (whether direct or
indirect, by purchase, merger, consolidation or otherwise) to all or
substantially all of the business and/or assets of the Company to expressly
assume and agree to perform this Agreement in the same manner and to the same
extent that the Company would be required to perform it if no such succession


                                      -60-



<PAGE> 61
had taken place.  Failure of the Company to obtain such assumption and
agreement prior to the effectiveness of any such succession shall be a breach
of this Agreement and shall entitle the Employee to compensation from the
Company in the same amount and on the same terms as the Employee would be
entitled to pursuant to clause (i) of Section 2 hereof.

               (ii) This Agreement shall inure to the benefit of, and be
enforceable by, the Employee's personal or legal representatives, executors,
administrators, successors, heirs, distributees, devisees and legates.  If
the  Employee dies after the Bonus Vesting Date but prior to the receipt of
the bonus payable hereunder with respect to events occurring prior to death,
such bonus shall be paid pursuant to the last beneficiary designation
executed by the Employee and filed with the Company.  If no beneficiary form
has been filed with respect to this Agreement, the bonus shall be paid to the
Employee's estate.

          (g)  Taxes.  Any payment or delivery required under this Agreement
shall be subject to all requirements of law with regard to withholding of
taxes, filing, making of reports and the like, and the Company shall use its
best efforts to satisfy promptly all such requirements.

          (h)  GOVERNING LAW.  THIS AGREEMENT SHALL BE GOVERNED AND CONSTRUED
IN ACCORDANCE WITH THE LAWS OF THE STATE OF TEXAS, WITHOUT GIVING EFFECT T
ITS CONFLICTS OF LAWS PRINCIPLES.  VENUE SHALL LIE IN MIDLAND COUNTY, TEXAS
FOR THE PURPOSE OF RESOLVING AND ENFORCING ANY DISPUTE WHICH MAY ARISE UNDER
THIS AGREEMENT AND THE PARTIES AGREE THAT THEY WILL SUBMIT THEMSELVES TO THE
JURISDICTION OF THE COMPETENT STATE OR FEDERAL COURT SITUATED IN MIDLAND
COUNTY, TEXAS.

          (i)       Not Contract of Employment.  Subject to the provisions of
Section 3 of this Agreement, the entering into of this Agreement shall not be
deemed to be a contract of employment between the Company and the Employee,
or to be consideration for the employment of the Employee, and  nothing
herein contained shall be deemed to give the Employee the right to be
retained in the employ of the Company or to restrict the right of the Company
to discharge the Employee at any time.

          (j)  Gender.  Wherever in this instrument words are used in the
masculine or neuter gender, they shall be read and construed as in the
masculine, feminine or neuter gender wherever they would so apply, and vice
versa.  Wherever words appear in the singular or plural, they shall be read
and construed as in the plural or singular, respectively, wherever they would
so apply.

          (k)  Headings.  The headings of the Sections herein are included
solely for reference convenience, and shall not in any way affect the meaning
or interpretation of the Agreement.

          (1)  Entire Agreement.  This Agreement sets forth the entire
agreement and understanding of the parties hereto with respect to the matters
covered hereby.


                                      -61-





<PAGE> 62
     IN WITNESS WHEREOF, the parties have executed this Agreement as of the
date first above written.


                                   TMBR/SHARP DRILLING, INC.



                                   By:/s/ Thomas C. Brown
                                      -----------------------------------
                                        Thomas C. Brown, Chairman of the
                                        Board and Chief Executive Officer



                                   EMPLOYEE


                                   /s/ Don H. Lawson
                                   --------------------------------------
                                       Don H. Lawson
































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