<PAGE> 1
                              UNITED STATES
                    SECURITIES AND EXCHANGE COMMISSION
                         Washington, D. C.  20549

                                 Form 10-Q
                           ____________________

(Mark One)
(X)          QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d)
                  OF THE SECURITIES EXCHANGE ACT OF 1934

               For the quarterly period ended June 30, 2003

                                    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) (432) 699-5050

                                    N/A
          (Former name, former address and former fiscal year,
                      if changed since last report)

     Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to
such filing requirements for the past 90 days.

                         Yes   X    No

     Indicate by check mark whether the registrant is an accelerated filer
(as defined in Rule 12b-2 of the Exchange Act).

                         Yes ____   No   X

     At August 5, 2003, 5,497,636 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, June 30, 2003 and
             March 31, 2003 . . . . . . . . . . . . . . . . . . . .   3

           Statements of Operations, Three Months
             Ended June 30, 2003 and 2002 . . . . . . . . . . . . .   5

           Statements of Stockholders'
             Equity . . . . . . . . . . . . . . . . . . . . . . . .   7

           Statements of Cash Flows, Three Months
             Ended June 30, 2003 and 2002  .. . . . . . . . . . . .   8

           Notes to Financial Statements. . . . . . . . . . . . . .   9

  Item 2.  Management's Discussion and Analysis of Financial
             Condition and Results of Operations. . . . . . . . . .  18

  Item 3.  Quantitative and Qualitative Disclosures
             About Market Risk. . . . . . . . . . . . . . . . . . .  27

  Item 4.  Controls and Procedures. . . . . . . . . . . . . . . . .  28


Part II.  Other Information

  Item 1.  Legal Proceedings. . . . . . . . . . . . . . . . . . . .  28

  Item 6.  Exhibits and Reports on Form 8-K . . . . . . . . . . . .  29










                                      -2-





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

Item 1.  FINANCIAL STATEMENTS

                         TMBR/SHARP DRILLING, INC.
                              BALANCE SHEETS
               June 30, 2003 (Unaudited) and March 31, 2003
                    (In thousands, except share data)


                                                     June 30,
                                                      2003          March 31,
  ASSETS                                           (Unaudited)        2003
  ------                                          -------------   -------------

Current assets:
  Cash and cash equivalents                       $   5,603       $     4,431
   Trade receivables,
    net of allowance for doubtful
    accounts of $941 on both
    June 30 and March 31, 2003                        9,497            10,484
    Insurance Receivable                                 --             1,063
  Inventories                                           251               101
  Deposits                                              782               782
  Other                                               1,432             1,231
                                                    --------          --------
    Total current assets                             17,565            18,092
                                                    --------          --------

Property and equipment, at cost:
  Drilling equipment                                 65,991            63,531
  Oil and gas properties, based on
    successful efforts accounting                    44,702            42,756
  Other property and equipment                        3,877             3,874
                                                    --------          --------
                                                    114,570           110,161

Less accumulated depreciation,
  depletion and amortization                        (81,171)          (79,695)
                                                    --------          --------

    Net property and equipment                       33,399            30,466
                                                    --------          --------

Deferred tax asset                                    6,223             6,760
Other assets                                            173               173
                                                    --------          --------
    Total assets                                   $ 57,360           $ 55,491
                                                    ========          ========
See accompanying notes to financial statements.



                                      -3-





<PAGE> 4
                         TMBR/SHARP DRILLING, INC.
                              BALANCE SHEETS
               June 30, 2003 (Unaudited) and March 31, 2003
                     (In thousands, except share data)


                                                   June 30,
                                                     2003            March 31,
LIABILITIES AND STOCKHOLDERS' EQUITY              (Unaudited)          2003
------------------------------------             ------------       -----------

Current liabilities:
  Trade payables                                  $   6,011           $ 6,548
  Other                                               2,385             2,275
  Asset Retirement Obligation                           174                --
                                                    --------          --------
     Total current liabilities                        8,570             8,823

Long Term Liabilities:
  Asset Retirement Obligation                           462                --
                                                    --------          --------
      Total Liabilities                               9,032             8,823
                                                    --------          --------

Contingencies

Stockholders' equity:
  Common stock, $0.10 par value
    Authorized, 50,000,000 shares;
    issued 6,766,375 and 6,738,125
    shares at June 30, and
    March 31, 2003, respectively                        677               674
  Additional paid-in capital                         72,617            72,219
  Accumulated deficit                               (24,816)          (26,075)
  Treasury stock-common, 1,268,739
    shares at June 30, and
    March 31, 2003, at cost                            (150)             (150)
                                                    --------          --------
     Total stockholders' equity                      48,328            46,668
                                                    --------          --------
     Total liabilities and
       stockholders' equity                        $ 57,360          $ 55,491
                                                    ========          ========

See accompanying notes to financial statements.








                                      -4-





<PAGE> 5
                         TMBR/SHARP DRILLING, INC.
                         STATEMENTS OF OPERATIONS
           Three months ended June 30, 2003 and 2002 (Unaudited)
                     (In thousands, except share data)

                                                        Three months ended
                                                             June 30,
                                                 -----------------------------
                                                      2003              2002
                                                 -----------       -----------
  Revenues:
     Contract drilling                          $     9,379       $     7,743
     Oil and gas                                      2,754             1,685
                                                 -----------       -----------
         Total revenues                              12,133             9,428
                                                 -----------       -----------
  Operating costs and expenses:
     Contract drilling                                6,398             5,265
     Oil and gas production                             513               474
     Dry holes and abandonments                          48                28
     Exploration                                         56                --
     Depreciation, depletion and
       amortization                                   1,770             1,721
     General and administrative                         950               930
     Accretion of asset retirement
        obligation                                       12                --
                                                 -----------       -----------
         Total operating costs
           and expenses                               9,747             8,418
                                                 -----------       -----------
         Operating income                             2,386             1,010
                                                 -----------       -----------
  Other income (expense):
     Interest, net                                       14                11
     Gain on sales of assets                             17                46
     Merger costs                                      (620)               --
     Other, net                                          13                 4
                                                 -----------       -----------
     Total other income (expense)                      (576)               61
                                                 -----------       -----------
  Income before income tax provision
     and cumulative effect of change
     in accounting principle                          1,810             1,071
  Income tax provision (benefit)
     Current                                             36                --
     Deferred                                           579                --
                                                 -----------       -----------
  Income before cumulative effect of
     change in accounting principle                   1,195             1,071
  Cumulative effect of change in
     accounting principle, net of related
     tax benefit of approximately $33                    64                --
                                                 -----------       -----------
  Net income                                      $   1,259     $       1,071
                                                 ===========       ===========
See accompanying notes to financial statements.

                                      -5-

<PAGE> 6

                         TMBR/SHARP DRILLING, INC.
                         STATEMENTS OF OPERATIONS
           Three months ended June 30, 2003 and 2002 (Unaudited)
                      (In thousands, except share data)




                                                       Three months ended
                                                            June 30,
                                                  -----------------------------
                                                     2003              2002
                                                  -----------       -----------

Net income per common share:

  Basic:
    Income before cumulative effect of
      change in accounting principle             $     .22         $      .20
    Cumulative effect of change in
      accounting principle                             .01                 --
                                                  -----------       -----------
    Net income                                   $     .23         $      .20
                                                  ===========       ===========

  Diluted
    Income before cumulative effect of
      change in accounting principle             $     .21         $      .19
    Cumulative effect of change in
      accounting principle                             .01                 --
                                                  -----------       -----------
    Net income                                   $     .22         $      .19
                                                  ===========       ===========

Weighted average number of
  common shares outstanding:

  Basic                                           5,486,891         5,402,873
  Diluted                                         5,738,233         5,643,875
                                                 ===========       ===========


See accompanying notes to financial statements.









                                      -6-





<PAGE> 7
                         TMBR/SHARP DRILLING, INC.

                    STATEMENTS OF STOCKHOLDERS' EQUITY

               Three Months Ended June 30, 2003 (Unaudited)
                              (In thousands)




<TABLE>
<CAPTION>
                          Common Stock       Additional                      Treasury Stock         Total
                         --------------       Paid-In       Accumulated      --------------      Stockholders'
                         Shares  Amount       Capital         Deficit         Shares  Amount         Equity
                         ------  ------       -------       -----------       ------  ------      ------------
<S>                      <C>     <C>          <C>            <C>               <C>    <C>           <C>
Balance,
  March 31, 2003         6,738   $  674       $ 72,219         $(26,075)       1,269  $(150)        $ 46,668

Exercise of
  Stock Options             28        3            322               --           --     --              325

Effect of Stock
  Option Exercise            -        -             76                -            -      -               76

Net Income                  --        -             --            1,259           --     --            1,259


Balance,
  June 30, 2003          6,766    $ 677       $ 72,617         $(24,816)       1,269  $(150)        $ 48,328
                         =====    ======      ========         =========      ======  ======        =========
</TABLE>
See accompanying notes to financial statements.



















                                      -7-





<PAGE> 8
                           TMBR/SHARP DRILLING, INC.
                            STATEMENTS OF CASH FLOWS
         For the three months ended June 30, 2003 and 2002 (Unaudited)
                                 (In thousands)

                                                  Three months ended June 30,
                                                  ---------------------------
                                                    2003              2002
                                                  ---------        ----------
Cash flows from operating activities:
  Net income                                       $ 1,259        $   1,071
  Adjustments to reconcile net income
  to net cash provided by operating activities:
       Depreciation, depletion and
        amortization                                 1,770            1,721
       Accretion of asset retirement obligation         12               --
       Cumulative effect of change in accounting
        principle                                      (64)              --
       Deferred tax provision                          579
       Dry holes and abandonments                       48               28
       Gain on sales of assets                         (17)             (46)
       Changes in assets and liabilities:
        Trade receivables                              987             (569)
        Insurance receivable                         1,063               --
        Inventories and other assets                  (351)               9
        Trade payables                                (537)           1,064
        Accrued interest and other liabilities         110              684
                                                   --------         --------
         Total adjustments                           3,600            2,891
                                                   --------         --------
         Net cash provided by
          operating activities                       4,859            3,962

Cash flows from investing activities:
  Additions to property and equipment               (4,058)          (3,978)
  Proceeds from sales of property and
    equipment                                           46               43
                                                   --------         --------
         Net cash required by
          investing activities                      (4,012)          (3,935)

Cash flows from financing activities:
  Proceeds from exercise of stock options              325               94
  Issuance of common stock                              --               76
                                                   --------         --------
         Net cash provided
          by financing activities                      325              170
                                                   --------         --------
         Net increase in cash
          and cash equivalents                       1,172              197

Cash and cash equivalents at beginning
  of period                                          4,431            3,258
                                                   --------         --------
Cash and cash equivalents at end of
  period                                           $ 5,603        $   3,455
                                                   ========         ========
See accompanying notes to financial statements.
                                      -8-
<PAGE> 9

                         TMBR/SHARP DRILLING, INC.

                       NOTES TO FINANCIAL STATEMENTS



     The amounts presented in the balance sheet as of March 31, 2003 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
June 30, 2003 and March 31, 2003, the results of operations for the three
months ended June 30, 2003 and 2002, and the cash flows for the three month
periods ended June 30, 2003 and 2002.

     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, 2003.


(2) Summary of Significant Accounting Policies

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.

     Oil and gas properties are accounted for using the successful efforts
method of accounting.  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

                                      -9-





<PAGE> 10
                         TMBR/SHARP DRILLING, INC.

                       NOTES TO FINANCIAL STATEMENTS

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

     Basic earnings per share ("EPS") is calculated by dividing reported
earnings available to common shareholders by the weighted average shares
outstanding.  No dilution for potentially dilutive securities is included in
basic EPS. Diluted EPS includes all potentially dilutive securities.  The
following table sets forth certain information concerning EPS.

<TABLE>
<CAPTION>
                                             For the Three Months Ended June 30,
                                            2003                            2002
                                 ---------------------------      --------------------------
                                                        Per                             Per
                                   Net                 Share        Net                Share
                                 Income    Shares     Amount      Income    Shares    Amount
                                 ------    ------    -------      ------    ------    ------
                                              (In thousands, except per share data)
<S>                             <C>        <C>       <C>         <C>           <C>     <C>

Basic EPS                       $ 1,259     5,487    $ .23       $ 1,071       5,403   $ .20

Effect of Dilutive Securities
Stock Options                                 251                                241
                                  -----   ---------    ----        -----    ---------    ----

Diluted EPS                     $ 1,259     5,738    $ .22       $ 1,071       5,644   $ .19
                                  =====   =========    ====       ======    =========    ====

</TABLE>


                                      -10-


<PAGE> 11


                         TMBR/SHARP DRILLING, INC.

                       NOTES TO FINANCIAL STATEMENTS

Stock Based Employee Compensation

     In October 1995, the Financial Accounting Standards Board issued
Statement of Financial Accounting Standards No. 123 ("SFAS 123") "Accounting
for Stock-Based Compensation," which establishes accounting and reporting
standards for various stock based compensation plans.  SFAS 123 encourages
the adoption of a fair value based method of accounting for employee stock
options, but permits continued application of the accounting method
prescribed by Accounting Principles Board Opinion No. 25 ("Opinion 25"),
"Accounting for Stock Issued to Employees."  The Company has elected to
continue to apply the provisions of Opinion 25.  Under Opinion 25, if the
exercise price of the Company's stock options equals the market value of the
underlying stock on the date of grant, no compensation expense is recognized.
SFAS 123, as amended by Statement of Financial Accounting Standards No. 148,
"Accounting For Stock-based Compensation, Transition and Disclosure" ("SFAS
148"), requires disclosure of pro forma information regarding net income and
earnings per share as if the Company had accounted for its employee stock
options under the fair value method of the statement.  See Note 4
"Stockholders' Equity."

     The SFAS 123 pro forma information for the  quarters ended June 30, 2003
and 2002 is as follows:

<TABLE>
<CAPTION>
                                                      Quarters ended June 30,
                                                ------------------------------------

                                                      2003                  2002
                                                  ------------           -----------
                                              (In thousands, except per share amounts)
<S>                                                <C>                   <C>
Net income, as reported                            $   1,259             $   1,071
Add: Stock-based employee compensation
  expense included in net income,
  net of tax                                              --                    78
Deduct: Stock-based employee compensation
  expense determined under fair value based
  method (SFAS 123), net of tax                         (210)                 (490)
                                                  -----------             ----------

     Net income, pro forma                         $   1,049             $     659

Basic
     Net income per common share, as reported      $    0.23             $    0.20
     Net income per common share, pro forma        $    0.19             $    0.12

Diluted
     Net income per common share, as reported      $    0.22             $    0.19
     Net income per common share, pro forma        $    0.18             $    0.12

</TABLE>
                                      -11-
<PAGE> 12

                         TMBR/SHARP DRILLING, INC.

                       NOTES TO FINANCIAL STATEMENTS


Reclassifications

     Certain reclassifications have been made to the June 30, 2002 financial
statements to conform to the June 30, 2003 presentation.


(3)  Debt

     Line of Credit

     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 June 30, 2003.  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 an annual rate equal
to the bank's base rate, or 4.00% at June 30, 2003.  Accrued and unpaid
interest on outstanding principal is payable monthly. The loan facility
matures on August 31, 2004, at which time all outstanding principal and
accrued and unpaid interest will be due in full.  At June 30, 2003, 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 June 30, 2003, the borrowing  base
amount was approximately $41.5 million.

     In addition to certain customary affirmative covenants, the loan
agreement contains restrictions with respect to (i) incurring additional
debt, (ii) incurring or permitting liens to exist on any of the Company's
property, assets or revenues, (iii) declaring or paying dividends or other
distributions on its capital stock (or acquiring any of its capital stock),
(iv) issuing capital stock, (v) entering into transactions with affiliates,
(vi) disposing of assets, and (vii) certain other matters.  The loan
agreement also contains financial covenants with respect to minimum tangible
net worth, the current ratio and the ratio of total liabilities to net worth.

(4)  Stockholders' Equity

     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


                                      -12-




<PAGE> 13
                         TMBR/SHARP DRILLING, INC.

                       NOTES TO FINANCIAL STATEMENTS

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
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.  At
June 30, 2003, options to purchase 240,000 common shares were outstanding
under the 1994 Plan.

     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, subject to
shareholder approval.  These nonqualified options were granted 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 to 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.  On November 20, 2002, the
Company granted options to purchase 98,000 shares of common stock to non-
officer key employees under the 1998 Plan.  These incentive options were
granted at an exercise price of $15.93 per share which represented the fair
market value on the date of the grant.  These options become earned and


                                      -13-





<PAGE> 14
                         TMBR/SHARP DRILLING, INC.

                       NOTES TO FINANCIAL STATEMENTS

exercisable on November 20, 2003. The following sets forth certain
information concerning these options.

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

Outstanding March 31, 2003        373,500      $11.50-17.18   $ 4,956,590

Exercised                         (28,250)        11.50          (324,875)
Forfeited                          (4,500)        11.50           (51,750)
                                  -------      ------------     ---------

Outstanding June 30, 2003         340,750     $11.50-17.18    $ 4,579,965
                                  =======      ============     =========

     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.  No shares were issued
during the three months ended June 30, 2003. The Company recognized
approximately $49,000 as Directors' compensation expense which was paid in
cash.

     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. The Company accrues for such items when liability is both
probable and the amount can be reasonably estimated.  The Company does not
believe that the ultimate resolution of any of its existing lawsuits will
have a material effect on its financial position or results of operations.





                                      -14-





<PAGE> 15
                         TMBR/SHARP DRILLING, INC.

                       NOTES TO FINANCIAL STATEMENTS

     Workers Compensation

     Currently the Company is covered under a three year retroactive plan and
is providing for its workers compensation claims based upon the most recent
information available from its insurance carrier concerning claims and
estimated costs.  In future years, the Company may receive retroactive
adjustments, both favorable and unfavorable, related to estimates of claim
costs for previous years, which may be material to the Company's results of
operations.  No provision for retroactive adjustments to claim costs is
recorded until the Company receives notification from its insurance carrier
because this amount, if any, cannot be estimated.

     Retention Agreements.

     In November, 2002, the Company entered into retention agreements with
ten of its employees.  The retention agreements increase the likelihood that
the Company will be able to rely on the continued dedication and availability
of the services of the employees notwithstanding a change in control or
proposed change in control of the Company and the associated personal
uncertainties and risks.  Generally, a "change in control" occurs on the
date:


         any person becomes the beneficial owner of securities
         representing more than 50% of the combined voting power of the
         Company's outstanding securities;

         (i) the Company's shareholders approve the consolidation,
         merger or other business combination of the Company in which
         it is not the surviving or continuing corporation or pursuant
         to which shares of its common stock are converted into cash,
         securities or other property, or (ii) the Company's
         shareholders approve the sale, lease, exchange or other
         transfer (in one transaction or a series of related
         transactions) of all, or substantially all, of the Company's
         assets;

         the Company's shareholders approve any plan or proposal for
         the liquidation or dissolution of the Company:

         without the approval or recommendation of a majority of the
         Company's then existing board of directors, a third person
         causes or brings 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




                                      -15-





<PAGE> 16
                         TMBR/SHARP DRILLING, INC.

                       NOTES TO FINANCIAL STATEMENTS

         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 Company's
         board of directors thereafter represent a minority of the
         total number of persons comprising the entire board; or

         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).

     Under the retention agreements, if (i) a change in control occurs or
(ii) an employee is terminated for other than dishonesty, conviction of a
felony or the continued failure by the employee to perform the duties
assigned to the employee, the employee will receive a bonus equal to the
product of the employee's base salary paid by the Company during the
preceding twelve months, multiplied by a factor ranging from 1.26 to 2.97.
The Company has no obligation to pay the bonuses required under the retention
agreements if an employee dies, becomes disabled, retires, ceases to act in
his or her position or voluntarily terminates his or her employment prior to
the occurrence of either of the events described in (i) and (ii) of this
paragraph.  Bonuses payable to an employee shall be reduced to the extent it
is determined that such payments would 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").  The retention agreements
remain in effect through December 31, 2003, and will be automatically
extended for additional one year periods thereafter, unless by September 30
of any year the Company gives notice that a retention agreement will not be
extended. The Company estimates the total bonuses payable under the change of
control agreements is approximately $2.2 million.

(6)  Merger with Patterson-UTI Energy, Inc.

     On May 26, 2003, the Company entered into an Agreement and Plan of
Merger, dated as of May 26, 2003, with Patterson-UTI Energy, Inc. and
Patterson-UTI Acquisition, LLC, a Texas limited liability company and a
wholly owned subsidiary of Patterson-UTI Energy, Inc.  Under terms of the
merger agreement, the Company will merge with and into Patterson-UTI
Acquisition, LLC, with Patterson-UTI Acquisition, LLC being the surviving
company.

     Subject to the terms and conditions in the merger agreement, each issued
and outstanding share of the Company's common stock not owned directly or
indirectly by Patterson-UTI Energy, Inc. or by TMBR/Sharp (except shares of
common stock held by persons who object to the merger, and who comply with





                                      -16-





<PAGE> 17
                         TMBR/SHARP DRILLING, INC.

                       NOTES TO FINANCIAL STATEMENTS

all of the provisions of Texas law concerning the right of holders of shares
of common stock to dissent from the merger and require appraisal of their
common stock), will be converted into the right to receive $9.09 in cash and
0.312166 of a share of common stock, $.01 par value per share, of Patterson-
UTI Energy, Inc.  Patterson-UTI Energy, Inc. will pay each holder cash in
lieu of any fractional shares.

     Under the terms of the merger agreement, the Company agreed not to
solicit competing offers, but it may consider and accept an unsolicited offer
if, based on advice of counsel, it believes it must do so in the exercise of
its fiduciary duty.  If the Company accepts an unsolicited offer, or its
board of directors withdraws its recommendation in light of an unsolicited
offer, or the shareholders do not vote to approve the merger because of an
unsolicited offer, the Company would be required to pay to Patterson a
breakup fee of $3.5 million.

     The merger is subject to customary conditions to closing, including
approval by the Company's shareholders, and receipt by the Company and
Patterson of opinions from their respective counsel that the consummation of
the merger will constitute a reorganization within the meaning of Section
368(a)of the Code, as well as any necessary regulatory filings and approvals.
There can be no assurance that the merger will be consummated in accordance
with the terms of the merger agreement, if at all.


(7) Adoption of SFAS 143, "Accounting for Asset Retirement Obligations"

     Effective April 1, 2003, the Company adopted SFAS 143, "Accounting for
Asset Retirement Obligations."  SFAS 143 requires that the fair value of a
liability for an asset retirement obligation be recognized in the period in
which it is incurred if a reasonable estimate of fair value can be made.  The
associated asset retirement cost is capitalized as part of the carrying
amount of the long-lived asset.  Subsequently, the asset retirement cost is
allocated to expense using a systematic and rational method over the asset's
useful life.  The adoption of SFAS 143 resulted in an increase of total
liabilities as retirement obligations were required to be recognized, the
recorded cost of assets increased to include the retirement costs added to
the carrying amount of the asset and operating expenses increased subsequent
to April 1, 2003 due to the accretion of the retirement obligation.
Depletion and depreciation recognized in fiscal 2004 and subsequent periods
will decrease since the salvage values assigned to these assets (now excluded
from depreciation and depletion) exceeded the asset retirement costs
recorded.  The majority of the asset retirement obligations recorded by the
Company relate to the plugging and abandonment of oil and gas wells.  The
Company adopted SFAS No. 143 on April 1, 2003, and recorded a discounted
liability of approximately $619,000 for the future retirement obligation, an
increase to property and equipment of approximately $444,000 and a benefit of
approximately $64,000 (net of a deferred tax benefit of $33,000) as the

                                      -17-





<PAGE> 18
                         TMBR/SHARP DRILLING, INC.

                       NOTES TO FINANCIAL STATEMENTS

cumulative effect of change in accounting principle. There was no impact on
the Company's cash flows as a result of adopting SFAS 143. Subsequent to the
adoption of SFAS 143, there has been no significant current period activity
with respect to additional asset retirement liabilities, settled liabilities
or revisions of estimated cash flows.  Accretion expense of approximately
$12,000 was recognized in the three months ended June 30, 2003.

     The following unaudited pro forma information has been prepared to give
effect to the adoption of SFAS 143 as if it had been adopted on April 1,
2000.
<TABLE>
<CAPTION>
                                         Three months
                                            Ended                  Year Ended
                                                        ---------------------------------
                                           June 30,     March 31,   March 31,   March 31,
                                            2002          2003         2002        2001
                                         ------------   ---------   ---------   ---------
                                             (In thousands, except per share amounts)

<S>                                       <C>           <C>         <C>         <C>
Net income
   As reported                            $ 1,071       $ 10,112    $  9,816    $ 8,308
    Reduction of Accretion of
        obligation (net of tax)               (11)           (48)        (39)       (29)
    Reduction of Depreciation and
        depletion (net of tax)                  8             33          41         24

    Pro forma                             $ 1,068       $ 10,097     $  9,818   $ 8,303

Basic net income per common share:
    As reported                           $   .20       $   1.86     $   1.88   $  1.67
    Pro forma                             $   .20       $   1.86     $   1.88   $  1.67

Diluted net income per common share:
    As reported                           $   .19       $   1.78     $   1.79   $  1.54
    Pro forma                             $   .19       $   1.78     $   1.79   $  1.54

</TABLE>

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, our 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.  We believe the

                                      -18-
<PAGE> 19
assumptions and expectations reflected in these forward-looking statements
are reasonable.  However, no assurance can be given that our expectations
will prove to be correct or that we 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;

                  timing and amount of future production of oil and natural gas;

                  governmental regulations;

                  operating costs and other expenses;

                  cash flow, anticipated liquidity and prospects for growth;

                  estimates of proved reserves and exploitation and exploration
                  opportunities; and

                  marketing of oil and natural gas.

     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 our common stock, one should be aware that there are
various risks associated with an investment.  Some of these risk factors are
described on page 17 in our Annual Report on Form 10-K dated March 31, 2003.


Critical Accounting Policies


     Our discussion and analysis of our financial condition and results of
operation is based upon financial statements which have been prepared in
accordance with accounting principles generally accepted in the United States
of America, or GAAP.  The preparation of these financial statements requires
us to make estimates and judgments that affect the reported amounts of
assets, liabilities, revenues and expenses.  We have identified below certain
of these policies as being of particular importance to the portrayal of our
financial position and results of operations and which require the
application of significant judgment by our management.  We analyze our
estimates, including those related to oil and gas revenues, oil and gas
properties, income taxes and contingencies and litigation, and are based on


                                      -19-


<PAGE> 20
historical experience and various other assumptions that we believe to be
reasonable under the circumstances.  Actual results may differ from these
estimates under different assumptions or conditions.  We believe the
following critical accounting policies affect our more significant judgments
and estimates used in the preparation of our financial statements:

    Revenue Recognition - 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.  Due to the nature of turnkey contracts and
    risks therein, we utilize 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.

    Depreciation - Contract Drilling Operations.  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.

    Revenue Recognition - Oil and Gas Properties.  We follow the sales
    method of accounting for oil and natural gas revenues.  Under this
    method, revenues are recognized based on actual volumes of oil and
    natural gas sold to purchasers.  No receivables, payables or
    unearned revenue are recorded unless a working interest owner's
    aggregate sales from the property exceed its share of the total
    reserves-in-place.

    Successful Efforts Accounting.  We account for our oil and natural
    gas operations using the successful efforts method of accounting.
    Under this method, all costs associated with property acquisition,
    successful exploratory wells and all development wells are
    capitalized.  Items charged to expense generally include geological
    and geophysical costs, cost of unsuccessful exploratory wells and
    oil and natural gas production costs.

    Proved Reserve Estimates.  Estimates of our proved reserves
    included in this report are prepared in accordance with GAAP and
    SEC guidelines.  The accuracy of a reserve estimate is a function
    of:

           -  the quality and quantity of available data;

           -  the interpretation of that data;




                                      -20-





<PAGE> 21
           -  the accuracy of various mandated economic assumptions; and

           -  the judgment of the persons preparing the estimate.

          The proved reserve information included in our report dated March
          31, 2003 is based on estimates prepared by Joe C. Neal &
          Associates.  Estimates prepared by others may be higher or lower
          than our estimates.

          Because these estimates depend on many assumptions, all of which
          may substantially differ from actual results, reserve estimates may
          be different from the quantities of oil and natural gas that are
          ultimately recovered.  In addition, results of drilling, testing
          and production after the date of an estimate may justify material
          revisions to the estimate.

          Our shareholders should not assume that the present value of future
          net cash flows is the current market value of its estimated proved
          reserves.  In accordance with SEC requirements,  the estimates of
          discounted future net cash flows are based from proved reserves on
          prices and costs as of the date of the estimate.  Actual future
          prices and costs may be materially higher or lower than the prices
          and costs as of the date of the estimate.

          Our estimates of proved reserves directly impact depletion expense.
          If the estimates of proved reserves decline, the rate at which we
          record depletion expense increases, reducing net income.  Such a
          decline may result from property performance or from lower market
          prices or increases in costs, which may make it uneconomic to drill
          for and produce higher cost fields.  In addition, the decline in
          proved reserve estimates may impact the outcome of our assessment
          of our oil and gas producing properties for impairment.

          Impairment of Proved Oil and Gas Properties.  We review our proved
          properties whenever management judges that events or circumstances
          indicate that the recorded carrying value of the properties may not
          be recoverable.  Management assesses whether or not an impairment
          provision is necessary based upon management's outlook of future
          commodity prices and net cash flows that may be generated by the
          properties.  Proved oil and gas properties are reviewed for
          impairment on a property-by-property basis, which is the lowest
          level at which depletion of proved properties is calculated.

          Impairment of Unproved Oil and Gas Properties.  Management
          periodically assesses individually significant unproved oil and gas
          properties for impairment, on a project-by-project basis.
          Management's assessment of the results of exploration activities,
          commodity price outlooks, planned future sales or expiration of all
          or a portion of such projects impact the amount and timing of
          impairment provisions.



                                      -21-





<PAGE> 22
          Valuation of Deferred Tax Assets.  We compute income taxes in
          accordance with SFAS No. 109.  "Accounting for Income Taxes."  SFAS
          No. 109 requires an asset and liability approach which results in
          the recognition of deferred tax liabilities and assets for the
          expected future tax consequences of temporary differences between
          the carrying amounts and the tax basis of those assets and
          liabilities.  SFAS No. 109 also requires the recording of a
          valuation allowance if it is more likely than not that some portion
          or all of a deferred tax asset will not be realized.


Merger with Patterson-UTI Energy, Inc.

     On May 26, 2003, we entered into an Agreement and Plan of Merger, dated
as of May 26, 2003, with Patterson-UTI Energy, Inc. and Patterson-UTI
Acquisition, LLC, a Texas limited liability company and a wholly owned
subsidiary of Patterson-UTI Energy, Inc.  Under terms of the merger
agreement, we will merge with and into Patterson-UTI Acquisition, LLC, with
Patterson-UTI Acquisition, LLC being the surviving company.

     Subject to the terms and conditions in the merger agreement, each issued
and outstanding share of our common stock not owned directly or indirectly by
Patterson-UTI Energy, Inc. or by us (except shares of common stock held by
persons who object to the merger, and who comply with all of the provisions
of Texas law concerning the right of holders of shares of common stock to
dissent from the merger and require appraisal of their common stock), will be
converted into the right to receive $9.09 in cash and 0.312166 of a share of
common stock, $.01 par value per share, of Patterson-UTI Energy, Inc.
Patterson-UTI Energy, Inc. will pay each holder cash in lieu of any
fractional shares.

     Under the terms of the merger agreement, we agreed not to solicit
competing offers, but we may consider and accept an unsolicited offer if,
based on advice of counsel, we believe we must do so in the exercise of our
fiduciary duty.  If we accept an unsolicited offer, or our board of directors
withdraws its recommendation in light of an unsolicited offer, or the
shareholders do not vote to approve the merger because of an unsolicited
offer, we would be required to pay to Patterson a breakup fee of $3.5
million.

     The merger is subject to customary conditions to closing, including
approval by our shareholders, and receipt by us and Patterson of opinions
from their respective counsel that the consummation of the merger will
constitute a reorganization within the meaning of Section 368(a) of the Code,
as well as any necessary regulatory filings and approvals.  There can be no
assurance that the merger will be consummated in accordance with the terms of
the merger agreement, if at all.






                                      -22-





<PAGE> 23
Recent Accounting Pronouncements

     In July, 2001, the Financial Accounting Standards Board ("FASB") issued
SFAS No. 143, "Accounting for Asset Retirement Obligations" which establishes
requirements for the accounting of removal-type costs associated with asset
retirements.  SFAS No. 143 requires entities to record the fair value of a
liability for an asset retirement obligation in the period in which it is
incurred.  When the liability is initially recorded, the entity capitalizes
a cost by increasing the carrying amount of the related long-lived asset.
Over time, the liability is accreted each period toward its future value, and
the capitalized cost is depreciated over the useful life of the related
asset.  Upon settlement of the liability, an entity reports a gain or loss
upon settlement to the extent the actual costs differ from the recorded
liability.  SFAS No. 143 is effective for fiscal years beginning after June
15, 2002, with earlier application encouraged.  We adopted SFAS No. 143 on
April 1, 2003.  Upon adoption of SFAS No. 143, we recorded a benefit of
$64,735 (net of tax) as the cumulative effect of the change in accounting
principle.  The majority of the asset retirement obligation recognized
related to the projected cost to plug and abandon oil and gas wells.

     In April 2002, the FASB issued Statement No. 145 "Rescission 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 us as we have no outstanding debt.

     In July 2002, the FASB issued Statement No. 146, "Accounting for Costs
Associated with Exit or Disposal Activities".  The Statement 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.  We expect no impact
to our financial statements as we do not anticipate exiting or disposing of
any of our activities.

     SFAS No. 148 "Accounting for Stock-Based Compensation - Transition and
Disclosure", amends SFAS No. 123 "Accounting for Stock-Based Compensation".
SFAS No. 148 provides alternative methods of transition for a voluntary
change to the fair value based method of accounting for stock-based employee
compensation.  The statement also amends the disclosure requirements of SFAS
No. 123 to require prominent disclosures in both annual and interim financial
statements about the method of accounting for stock-based employee
compensation and the effect of the method used on reported results. This
statement is required to be adopted for fiscal years ending after December
15, 2002.

     We currently account for stock-based compensation in accordance with APB
Opinion No. 25 which allows recognition of compensation expense only to the
extent that the fair market value is greater than the option price.


                                      -23-

<PAGE> 24
     On April 22, 2003, the FASB announced its decision to require all
companies to expense the value of employee stock options.  Companies will be
required to measure the cost according to the fair value of the options.  The
new guidelines have not been released but are expected to be finalized and to
become effective in 2004.  When final rules are announced, we will assess the
impact to our financial statements.

     In November 2002, the FASB issued Financial Interpretation No.45,
"Guarantor's Accounting and Disclosure Requirements for Guarantees, Including
Indirect Guarantees of Indebtedness of Others" (FIN 45).  FIN No. 45 requires
that a liability be recorded in the guarantor's balance sheet upon issuance
of certain guarantees.  Initial recognition and measurement of the liability
will be applied on a prospective basis to guarantees issued or modified after
December 31, 2002.  FIN No. 45 also requires disclosures about guarantees in
financial statements for interim or annual periods ending after December 15,
2002. We do not expect the adoption of FIN No. 45 to have a material impact
on our financial statements.

     FIN No. 46, "Consolidation of Variable Interest Entities, an
Interpretation of Accounting Research Bulletin No. 51".  FIN No. 46 requires
certain variable interest entities to be consolidated by the primary
beneficiary of the entity if the equity investors in the entity do not have
the characteristics of a controlling financial interest or do not have
sufficient equity at risk for the entity to finance its activities without
financial support from other parties. We do not expect the adoption of FIN
No. 46 to have a material impact on our financial statements.

     In May 2003, the FASB issued Statement No. 150 "Accounting for Certain
Financial Instruments with Characteristics of both Liabilities and Equity."
This statement establishes standards for how an issuer classifies and
measures certain financial instruments with characteristics of both
liabilities and equity.  This statement is effective for financial
instruments entered into or modified after May 31, 2003, and otherwise is
effective at the beginning of the first interim period beginning after June
15, 2003.  We do not expect the adoption of FAS No. 150 to have a material
impact on our financial statements.


Results of Operations


     Total revenues were $12.1 million for the three months ended June 30,
2003 which represents a 29% increase from the same period in the prior year.
Operating expenses as a percent of revenues were 80% for the three months
ended June 30, 2003 compared to 89% for the same period of the prior year.
The operating results were positively affected by an increase in demand for
our contract drilling services which resulted in an increase in rig
utilization rates.  We have also experienced a decrease in the average price
received for our contract drilling services.  Rig utilization rates were 66%
for the three months ended June 30, 2003 compared to 51% for the three months
ended June 30, 2002.

     Oil and gas revenues increased by approximately 63%, for the three
months ended June 30, 2003 when compared to the same period of the prior

                                      -24-



<PAGE> 25
year.  The following table sets forth certain information relating to crude
oil and natural gas produced:


                                                  Three Months Ended
                                                       June 30,
                                                   2003           2002
                                                 -------         -------

         Quantities Produced
         -------------------
         Oil (bbls)                               40,624          46,388
         Gas (mcf)                               288,684         261,572

         Average Price
         -------------
         Oil (bbls)                              $ 29.35         $ 22.82
         Gas (mcf)                               $  5.41         $  2.40

         Average Daily Production
         ------------------------
         Oil (bbls)                                  446             510
         Gas (mcf)                                 3,172           2,874



     Oil and gas production expenses increased by approximately 8%, for the
three months ended June 30, 2003 when compared to the same period of the
prior year, which can be attributed primarily to increases in production
taxes. The decrease in quantities of oil produced can be attributed to the
production, in the quarter ended June 30, 2002, of two oil wells.  These
wells were in the initial production period in the prior year's quarter and
had several months production included due to various reasons, including
delays in completing division orders.  In addition, quantities were affected
by normal declining production.

     General and administrative expenses, and depreciation, depletion and
amortization expenses remained relatively flat.  Other expenses increased as
approximately $620,000 was expended as a result of the proposed merger with
Patterson-UTI Energy, Inc. (See Note 6).

     Net working capital was $9.0 million at June 30, 2003 compared to $9.3
million at March 31, 2003.



Income Taxes

     At March 31, 2003, we had approximately $33.0 million of unused net
operating loss ("NOL") carryforwards for tax purposes.  Use of these
carryforwards is dependent upon our ability to generate taxable earnings in
future periods.  These carryforwards began to expire in fiscal 2000 and we
estimate approximately $10.3 million expired in fiscal 2003.  Our ability to
utilize our NOL carryforwards may be substantially limited in the future under

                                      -25-



<PAGE> 26
the Code.  If we experience 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.  We estimate that we will be
able to utilize approximately $3.9 million of NOL carryforwards in fiscal
2003 to reduce taxable income.  As of June 30, 2003, we do not believe an
ownership change has occurred. However, if the merger with Patterson is
completed, we believe that a change of control would occur and utilization of
future NOL carryforwards would be limited.

     We assess the need for a valuation allowance against our deferred tax
assets based on whether we believe that it is more likely than not that the
deferred tax asset is realizable.  As of June 30, 2002, we fully reserved our
deferred tax asset as we determined that realization of any portion of the
deferred tax asset was not more likely than not.  Realization of the deferred
tax asset requires us to generate future taxable income.  During fiscal 2003,
after considering increases in commodity prices, recent utilization of NOL
carryforwards to reduce taxable income, and the anticipated expiration of NOL
carryforwards, we determined that it was more likely than not that a portion
of the deferred tax assets was realizable.  Accordingly, a benefit of
approximately $6.8 million was recognized during the quarter ended March 31,
2003 as the valuation allowance was reduced.  In addition, during fiscal 2003
the valuation allowance was reduced through the utilization of NOL
carryforwards to reduce taxable income as well as the expiration of unused
NOL carryforwards.

     Our effective tax rate for the quarter ended June 30, 2002 differs from
the statutory tax rate of 34% primarily due to the utilization of NOLs.

     We utilize an asset and liability approach for financial accounting and
reporting for income taxes.  We have a deferred tax asset primarily due to
our NOL carryforwards.


Liquidity and Capital Resources

     In June, 2000, we 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 June 30, 2003.  The facility is secured by our drilling rigs and
related equipment, accounts receivable and inventory.  Borrowings under the
revolving facility bear interest at an annual rate equal to the bank's base
rate, or 4.00% at June 30, 2003.  Accrued and unpaid interest on outstanding
principal is payable monthly. The loan facility  matures on August 31, 2004,
at which time all outstanding principal and accrued and unpaid interest will
be due in full.  At June 30, 2003, 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 our accounts receivable and the value of
our inventory, drilling rigs, drill pipe and related equipment. The borrowing
base amount is redetermined quarterly by us, 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 June 30, 2003, the borrowing base
amount was approximately $41.5 million.

     We may in the future have to reserve a trade receivable from one
customer.  At June 30, 2003, the customer owed us approximately $1.5 million,

                                      -26-

<PAGE> 27
of which approximately $.9 million was over 90 days past due. Since the end
of the quarter the customer has paid approximately $197,000 related to this
receivable. Currently this receivable is not specifically reserved as the
customer is making cash payments to us and collection efforts are ongoing.
If our evaluation of this receivable changes in the future, we may have to
reserve a portion or the total amount of this receivable.

     If the merger with Patterson is not completed, we anticipate that funds
for our capital expenditures in fiscal 2004 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 a slight
increase in demand and a firming of prices for contract drilling services due
to the recent increase and stability surrounding oil and gas prices. We will
continue to be affected by price fluctuations in the industry, but cannot
predict either the future level of demand for our 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.  We have 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 we receive for our oil and gas.


Item 3.  QUANTITATIVE AND QUALITATIVE DISCLOSURE ABOUT MARKET RISK

     The primary sources of market risk for us includes fluctuations in
commodity prices and interest rate fluctuations.  At June 30, 2003, we were
not a party to any hedge arrangements, commodity swap agreements, commodity
futures, options or other similar agreements relating to crude oil and
natural gas.

     Commodity Price Risk - We produce and sell crude oil, natural gas and
natural gas liquids.  As a result, our operating results are significantly
affected by fluctuations in commodity prices caused by changing market
forces.

     Historically, we have not entered into hedging arrangements for our oil
and gas production and we does not have any delivery commitments.  We may, in
the future, attempt to reduce our exposure to the volatility of oil and gas
prices by hedging a portion of our production.  In a typical hedge
transaction, we 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 hedged.   If the
floating price exceeds the fixed price, we would be required to pay the
counterparty this difference multiplied by the quantity hedged.  In this
case, we would be required to pay the difference regardless of whether we had
sufficient production to cover the quantities specified in the hedge.
Significant reductions in production at times when the floating price exceeds

                                      -27-

<PAGE> 28
the fixed price could require us 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 June 30, 2003 we had no borrowings outstanding
under our loan agreement.  However, when we do have outstanding borrowings,
our exposure to changes in interest rates primarily results from short term
changes in our bank's prime rate.


Item 4.  Controls and Procedures

     As of the end of the period covered by this Quarterly Report on Form 10-
Q, the effectiveness of our disclosure controls and procedures (as defined in
Rules 13a-15(e) and 15d-15(e) promulgated under the Securities Exchange Act
of 1934 was evaluated by our management, with the participation of our Chief
Executive Officer, Thomas C. Brown (principal executive officer), and our
Controller/Treasurer, Patricia R. Elledge (principal financial officer).  Mr.
Brown and Ms. Elledge have concluded that our disclosure controls and
procedures are effective, as of the end of the period covered by this
Quarterly Report on Form 10-Q, to help ensure that information we are
required to disclose in reports that we file with the SEC is accumulated and
communicated to management and recorded, processed, summarized and reported
within the time periods prescribed by the SEC.

     There were no changes in our internal control over financial reporting
that occurred during our last fiscal quarter that have materially affected,
or are reasonably likely to materially affect, our internal control over
financial reporting.


PART TWO - OTHER INFORMATION

Item 1.  Legal Proceedings

     We are a defendant in various lawsuits generally incidental to our
business. We accrue for such items when a liability is both probable and the
amount can be reasonable estimated.  We do not believe that the ultimate
resolution of any of our existing lawsuits will have a material effect on our
financial position or results of operations.


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

     (a)  Exhibits:

      Exhibit 2.1 - Agreement and Plan of Merger by and among the Registrant,
          Patterson-UTI Energy, Inc. and Patterson-UTI Acquisition,
          LLC, dated May 26, 2003 (Incorporated by reference to Exhibit
          2.1 to Registrant's Current Report on Form 8-K dated May 27, 2003)



                                      -28-



<PAGE> 29

     *Exhibit 31.1 - Certification of principal executive officer

     *Exhibit 31.2 - Certification of principal financial officer

     *Exhibit 32.1 - 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 32.2 - Certification of Controller/Treasurer (chief financial
          officer) pursuant to 18 U.S.C. Section 1350, as adopted pursuant to
          Section 906 of the Sarbanes-Oxley Act of 2002.

---------------------------------
     *Filed herewith

     (b)  Reports on Form 8-K:

          (1) On May 27,2003, the Company filed a Current Report on Form 8-K,
          dated May 26, 2003 announcing under items 5 and 7 thereof the
          Company's definitive merger agreement with Patterson-UTI Energy,
          Inc.

          (2) On June 27, 2003, the Company filed a Current Report on Form 8-
          K, dated June 27, 2003 furnishing under items 7, 9 and 12 thereof
          the Company's public announcement of its annual financial results
          for the fiscal year ended March, 31, 2003.


























                                      -29-





<PAGE> 30
                                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.




August 14, 2003                  By:  /s/  Patricia R. Elledge
---------------                       --------------------------
     Date                                  Patricia R. Elledge
                                           Controller/Treasurer

                                     (Ms.Elledge is the principal financial
                                      officer and has been duly authorized
                                      to sign on behalf of the Registrant)





























                                      -30-





<PAGE> 31
                             INDEX TO EXHIBITS


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

 Exhibit  2.1       Agreement and Plan of Merger by and among the Registrant,
                    Patterson-UTI Energy, Inc. and Patterson-UTI Acquisition,
                    LLC, dated May 26, 2003.  (Incorporated by reference to
                    Exhibit 2.1 to Form 8-K dated May 27, 2003)

*Exhibit 31.1       Certification of principal executive officer

*Exhibit 31.2       Certification of principal financial officer

*Exhibit 32.1       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 32.2       Certification of Controller/Treasurer (chief financial
                    officer) pursuant to 18 U.S.C. Section 1350, as adopted
                    pursuant to Section 906 of the Sarbanes-Oxley Act of
                    2002.

---------------------------------
*Filed herewith



























                                      -31-





<PAGE> 32

                                                       Exhibit 31.1
                               CERTIFICATION


     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 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 report;

     3.   Based on my knowledge, the financial statements, and other
          financial information included in this 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 report.

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

          (a)  Designed such disclosure controls and procedures, or caused
               such disclosure controls and procedures to be designed under
               our supervision, 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 report is being prepared;

          (b)  Evaluated the effectiveness of the registrant's disclosure
               controls and procedures and presented in this report our
               conclusions about the effectiveness of the disclosure controls
               and procedures, as of the end of the period covered by this
               report based on such evaluation; and

          (c)  Disclosed in this report any change in the registrant's
               internal control over financial reporting that occurred during
               the registrant's most recent fiscal quarter that has
               materially affected, or is reasonably likely to materially
               affect, the registrant's internal control over financial
               reporting; and

     5.   The registrant's other certifying officer and I have disclosed,
          based on our most recent evaluation of internal control over
          financial reporting, to the registrant's auditors and the audit
          committee of the registrant's board of directors (or persons
          performing the equivalent functions):







<PAGE> 33

          (a)  All significant deficiencies and material weaknesses in the
               design or operation of internal control over financial
               reporting which are reasonably likely to adversely affect the
               registrant's ability to record, process, summarize and report
               financial information; and

          (b)  Any fraud, whether or not material, that involves management
               or other employees who have a significant role in the
               registrant's internal control over financial reporting.



Date: August 14, 2003              /s/ Thomas C. Brown
                                   -----------------------------
                                   Thomas C. Brown
                                   Chief Executive Officer
                                   (principal executive officer)









































<PAGE> 34
                                                       Exhibit 31.2

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


     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 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 report;

     3.   Based on my knowledge, the financial statements, and other
          financial information included in this 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 report.

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

          (a)  Designed such disclosure controls and procedures, or caused
               such disclosure controls and procedures to be designed under
               our supervision, 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 report is being prepared;

          (b)  Evaluated the effectiveness of the registrant's disclosure
               controls and procedures and presented in this report our
               conclusions about the effectiveness of the disclosure controls
               and procedures, as of the end of the period covered by this
               report based on such evaluation; and

          (c)  Disclosed in this report any change in the registrant's
               internal control over financial reporting that occurred during
               the registrant's most recent fiscal quarter that has
               materially affected, or is reasonably likely to materially
               affect, the registrant's internal control over financial
               reporting; and

     5.   The registrant's other certifying officer and I have disclosed,
          based on our most recent evaluation of internal control over
          financial reporting, to the registrant's auditors and the audit
          committee of the registrant's board of directors (or persons
          performing the equivalent functions):






<PAGE> 35
          (a)  All significant deficiencies and material weaknesses in the
               design or operation of internal control over financial
               reporting which are reasonably likely to adversely affect the
               registrant's ability to record, process, summarize and report
               financial information; and

          (b)  Any fraud, whether or not material, that involves management
               or other employees who have a significant role in the
               registrant's internal control over financial reporting.



Date: August 14, 2003              /s/ Patricia R. Elledge
                                   -----------------------------
                                   Patricia R. Elledge
                                   Controller/Treasurer
                                   (principal financial officer)










































<PAGE> 36
                                                              Exhibit 32.1


                               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 10-Q of the Company for the quarter ended June 30, 2003 fully complies
with the periodic reporting requirements of the Securities Exchange Act of
1934, as amended, and the information contained in that Form 10-Q Report
fairly presents, in all material respects, the financial condition and
results of operations of the Company.


Dated: August 14, 2003             /s/ Thomas C. Brown
                                   ---------------------------------------
                                       Thomas C. Brown, Chairman
                                       of the Board of Directors and Chief
                                       Executive Officer

A signed original of this written statement required by Section 906 has been
provided to the Company and will be retained by the Company and furnished to
the Securities and Exchange Commission or its staff upon request.































<PAGE> 37
                                                             Exhibit 32.2


                               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
Controller/Treasurer (chief financial officer) of TMBR/Sharp Drilling, Inc.
(the "Company"), hereby certifies that the Quarterly Report on Form 10-Q of
the Company for the quarter ended June 30, 2003 fully complies with the
periodic reporting requirements of the Securities Exchange Act of 1934, as
amended, and the information contained in that Form 10-Q Report fairly
presents, in all material respects, the financial condition and results of
operations of the Company.





Dated: August 14, 2003             /s/ Patricia R. Elledge
                                   -----------------------------------------
                                   Patricia R. Elledge, Controller/Treasurer
                                   (chief financial officer)



A signed original of this written statement required by Section 906 has been
provided to the Company and will be retained by the Company and furnished to
the Securities and Exchange Commission or its staff upon request.