Exhibit 10.1


CONTRACT


This Contract, together with all exhibits hereto, is
made and entered into by and between Helmerich & Payne International
Drilling Co., a Delaware corporation (hereinafter referred to as “H&P”) and
Southeast Texas Industrial Services, Inc., a Texas corporation (hereinafter
referred to as “STIS”) effective this 18th day of July, 2007 (“Effective Date”).


It is agreed as follows:


1.                                       CONTRACT.  This document, and the
documents referred to herein, which are incorporated herein by reference,
including all the documents contained in H&P’s fabrication specifications
which are attached hereto as Annex 1 (as said documents may have been revised
for the purposes of this contract), and all of the Exhibits attached hereto,
and the drawings identified in Annex 1 shall constitute the entire contract
(hereinafter referred to as the “Contract”) between the parties with regard to
the work described herein by STIS.


2.                                       DESCRIPTION OF THE WORK. 
Subject to the provisions of Paragraphs 11 and 17 hereof, the work to be
performed by STIS is described in Annex 1 (the “Work”).  Wherever reference is made herein to the “Work,”
such reference shall be to all or any portion of the Work as applicable under
the circumstances.


STIS shall at its sole risk, cost and expense
furnish all the labor, equipment, supplies and materials, except such
equipment, supplies, materials and labor which under the express provisions of
the Contract is to be furnished by H&P, to perform and complete the Work at
H&P’s Greensport facility located in Houston, Texas.  The Work 













will be performed and completed in accordance with the Contract and the
plans and specifications identified in Annex 1.


3.                                       REPRESENTATIONS AND RESPONSIBILITIES OF STIS.


STIS represents and undertakes that:


A.                                   It has the required skills and capacity to
perform, and shall perform the Work in the best professional manner using state
of art techniques and sound procurement, construction, project management, and
supervisory practice, all in accordance with the requirements of this Contract
and with the highest standards of workmanship for similar kinds of work in the
petroleum industry;


B.                                     It shall execute the Work continuously and
diligently with all due care and using qualified and competent personnel and
shall execute and complete the Work in accordance with the highest standard of
workmanship for similar kinds of work in the petroleum industry and in strict
accordance with the provisions of this Contract and the plans and
specifications identified in Annex 1;


C.                                     It shall obtain all authorizations, permits
and licenses necessary for the performance of the Work;


D.                                    It shall perform the Work in compliance with
all applicable laws and regulations that are in effect on the effective date of
this Contract and that have become effective during the performance of the  Work;



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E.                                      STIS shall be responsible for safety of its
personnel and equipment during the performance of the Work; provided, however,
STIS shall comply with all H&P safety rules and requirements while
performing the Work;


F.                                      It shall remove or replace or have removed or
replaced any personnel performing the Work that H&P requests STIS to remove
or replace, and H&P shall not unreasonably make any such requests;


G.                                     It shall use effective quality assurance
programs in performing the Work which shall comply with all codes and practices
applicable to the Work or as may be specified by H&P.  H&P has the right, at any time, to review
and accept or reject such quality assurance programs;


H.                                    STIS shall comply with all immigration laws
of the United States, and it represents to H&P that all STIS’s employees or
agents assigned to perform the Work under this Contract who are not United
States citizens are legally entitled to perform the Work;


I.                                         All the representations of STIS and of its
subcontractors required in this Contract are material and will survive the
completion of the Work or termination of this Contract for a period of one (1)
year.


4.                                       PAYMENT.


A.                                   As full compensation for the Work, H&P
shall pay to STIS the Contract Price made up of the Time and Material Rates set
forth in Exhibits “A” and “A-1”.  The
Time and Material Rates shall include all actual and documented costs, profit,
taxes, duties, expenses and charges associated directly or indirectly 



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with performing the Work and
the cost of purchasing services related to any operating and commissioning
supplies, spare parts, storehouse stocks, maintenance tools and any other items
which H&P requests STIS to purchase on a Time and Material Rate basis.  The Time and Material Rates reflected on
Exhibits “A” and “A-1” shall not be adjusted except by written agreement of
H&P and STIS.


B.                                     On the fourth working day of each week after
the Effective Date, STIS shall submit to H&P Time and Material invoices
earned and/or expended by STIS for the previous week.  Separate Time and Materials invoices shall be
prepared for each rig number and will provide subtotals for the following
categories:


·                  STI Direct Labor Charges – with each
craft reflected on a separate line item


·                  Material Charges


·                  Freight Charges


Supporting
documentation shall be provided for payments shown to be due in each invoice
based on the actual number of labor hours expended and the actual expenditures
for materials and freight.


If, in H&P’s opinion, the actual number of labor hours expended or
the actual expenditures for materials varies at any time from the amounts
stated for the corresponding invoice period, H&P may dispute STIS’s
invoice.


C.                                     Within 15 days of H&P’s receipt of an
invoice submitted in accordance with this Paragraph 4, H&P shall pay to
STIS all amounts shown on that invoice that are properly owing and due to STIS
less:



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(i)                                   all amounts of credits then owing to H&P;


(ii)                                any previous payments on account made by
H&P;


(iii)                             any statutory retention required by an
applicable lien statute or any amount claimed by any person under that statute
of which H&P has notice or both;


(iv)                            any amount which H&P has notified STIS is
an amount in dispute; and


(v)                               any withholding amount required to be
withheld by any governmental authority or applicable law.


All
invoices submitted to H&P by STIS shall be sent to H&P as required by
Paragraph 15 of this Contract.


D.                                    As to any disputed invoices, or portions
thereof, the parties agree to mediate same, not less than monthly, in an attempt
to resolve same without third party intervention.  In the event disputed invoices, not resolved
through mediation, exceed $100,000.00 in the aggregate, the parties agree to
submit same to third party mediation in Harris or Jefferson County, Texas, with
mediation to be scheduled within sixty (60) days of notice from STIS that
unresolved disputed invoices (or portions thereof) exceed $100,000.00 in the
aggregate.  The parties will jointly
select the third party mediator, who will serve as mediator for all disputes
under this Paragraph 4D.  To the extent
disputed invoices are not resolved through assisted third party mediation, all
rights of the parties under applicable law shall be reserved to be pursued by
the parties as 



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they
see fit and the parties shall have no obligation to mediate such dispute under
Paragraph 20B of this Contract.


E.                                      Pursuant to mutual written agreement of the
parties hereto, this Contract may be amended to provide that certain portions
of the Work will be performed on fixed price basis.  In such event, the parties shall agree to
delivery dates for completion of each phase of the Work and liquidated damages
for late delivery.


5.                                       PROPRIETARY INFORMATION.  All
drawings, designs, computer models and other information pertaining to the Work
(and the rig to which the Work relates) including without limitation all
information which STIS, directly or indirectly, has acquired or acquires from
H&P or its affiliates concerning the technical and business activities and
know-how of H&P or its affiliates, (“Proprietary Information”) shall be,
and remain, the property of H&P. 
STIS shall not duplicate said drawings, designs, computer models or
other Proprietary Information, except as required for completion of the Work.  Upon completion of the Work, STIS shall (i)
remove from its computer system(s) and destroy all electronic images or
information directly or indirectly relating to the design or engineering of the
Work; (ii) deliver to H&P all drawings, designs, diagrams, sepias, computer
models, and other Proprietary Information and all copies of the same, except
one copy of the “as builts” which shall be retained by STIS for its files to be
used solely in connection with its warranty hereunder; and (iii) provide to
H&P one set of original “as built” red-line plans covering the Work.  Each such drawing or diagram retained by STIS
shall be clearly marked as the “Property of Helmerich & Payne International
Drilling Co.” 



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and shall bear the legend: “Any use of this drawing
or diagram other than with the express consent of Helmerich & Payne
International Drilling Co. is strictly prohibited and unlawful.”  STIS shall not furnish to any third party,
without H&P’s consent, any copy (whether in paper form or electronic form)
of any drawing, design, diagram, sepia or other Proprietary Information
prepared as a part of the Work.  STIS
shall immediately notify H&P of any design defect or defects in the
specifications and or fabrication, should STIS become aware of the same.  Notwithstanding anything to the contrary
herein, the terms and provisions of this paragraph 5 shall likewise apply to
all assembly, construction and installation work performed by STIS for H&P
prior to the date hereof.


6.                                       COMPLETION, DELIVERY AND ACCEPTANCE.  STIS
shall continuously and diligently complete each portion of the Work and shall
notify H&P prior to the tender of delivery of each portion of the Work.


The Work shall not be
tendered for delivery to H&P unless:


A.                                   The Work has been fully completed and
constructed in strict accordance with the plans and specifications heretofore
identified (and subsequent modifications, if any, made in accordance with the
terms of the Contract); and


B.                                     The inspections and tests referred to in
Paragraph 12 hereof have been completed to the reasonable satisfaction of
H&P, having regard to the plans and specifications heretofore identified
and subsequent modifications, if any, made in accordance with the terms of the
Contract.



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H&P shall be deemed to have accepted STIS’s
written tender of delivery unless it notifies STIS of its rejection of such
tender (together with the reasons therefor) within two (2) business days of
H&P’s receipt of STIS’s written tender-of-delivery notice.  Acceptance of the Work shall transfer to
H&P risk of loss.


7.                                       DELAY.  STIS shall not be deemed in
default of the performance of any of its obligations for any delay in the
delivery of any portion of the Work to the extent that such delay is caused by
any of the following occurrences:


A.                                   Delay caused by change orders as defined in
Paragraph 11, provided that at the time of submission of such change order to
H&P, STIS has advised H&P in writing of the probable delay arising from
such request and H&P has agreed to such delay and authorized in writing the
requested change to proceed;


B.                                     Delay caused by the late delivery of any
equipment or parts to be supplied by H&P;


C.                                     Delay caused by late delivery of an item of
equipment or parts of the Work to be supplied by STIS, only in those cases
where (i) H&P has requested in writing that such item of equipment or part
be supplied by a particular named third party supplier, other than the supplier
specified in H&P’s fabrication specifications and (ii) STIS has notified
H&P in writing not more than three (3) days after receipt of such request
that there is good reason to believe that delivery of the item by the supplier
will cause delivery of the Work to be delayed (in which notice STIS shall have
set forth the factual basis for such 



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belief
and the time within which the item of equipment must be received by STIS if
delivery of a Rig is not to be delayed), and unless H&P within two (2) days
from the date of receipt of such notice, either names an alternate supplier
from whom the item may be purchased or itself assumes responsibility for
ordering the item and obtaining delivery within the time set forth in such
notice;


D.                                    If any performance of STIS under this
Contract is prevented, hindered, delayed or otherwise made impracticable or
burdensome by reason of any of the following force majeure events


(a)                                  Acts of God,


(b)                                 Riots,


(c)                                  Fires, or


(d)                                 Floods,


STIS
shall be excused from performance to the extent that such performance is
necessarily prevented, hindered, delayed or otherwise made impracticable by the
foregoing event(s) (a) through (d). 
Performance of any obligation excused under this paragraph shall be
resumed as soon as reasonably practical after the event ceases.


8.                                       ALLOCATION OF RISK AND INDEMNITIES.


A.                                   With respect to any loss or damage to
property (other than loss or damage to (i) the Work or damage to property
either belonging to or furnished by H&P and to be incorporated in the Work
and (ii) the property described in Paragraphs C and D of this Paragraph 8)
arising from or relating in any way to 



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the Contract or activities
or omissions in connection therewith it is agreed as follows:


(1)                                  STIS agrees to protect, indemnify, defend and
hold H&P and H&P’s parent and affiliates and underwriters and their
respective officers, directors, employees, contractors, and agents free and
harmless from and against any and all losses, costs, claims, causes of action
and liabilities (including without limitation court costs and attorneys’ fees)
arising in favor of STIS, STIS’s parent and affiliates and underwriters, and/or
their respective employees, agents, principals, officers, directors, invitees,
subcontractors (or their servants) or representatives, or any survivor of any
of the foregoing on account of loss or damage to any property of any of such
persons arising out of, resulting from or relating in any way to the Contract
or activities or omissions in connection therewith, regardless of whether
H&P and/or its parent, affiliates, and/or others may have been wholly,
partially or solely negligent or otherwise at fault or any defect in premises,
goods, equipment, or materials, irrespective of whether same preexisted the
Contract.


(2)                                  H&P agrees to protect, indemnify, defend
and hold STIS and STIS’s affiliates and underwriters free and harmless from and
against any and all losses, costs, claims, causes of action and liabilities
(including without limitation court costs and attorneys’ fees) arising in favor
of H&P and/or its officers, employees, agents, principals, affiliates,
invitees, 



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subcontractors (or their servants) or representatives on account of
loss or damage to any property of any such persons arising out of, resulting
from or relating in any way to the Contract or activities or omissions in
connection therewith, regardless of whether STIS and/or its affiliates and/or
others may have been wholly, partially or solely negligent or otherwise at
fault or any defect in premises, goods, equipment, or materials, irrespective
of whether same preexisted the Contract.


B.                                     With respect to bodily injuries or death
arising from or relating in any way to the Contract or activities or omissions
in connection therewith is agreed as follows:


(1)                                  STIS agrees to protect, indemnify, defend and
hold H&P and H&P’s parent, affiliates, and underwriters and their
respective officers, directors, employees, contractors, and agents free and
harmless from and against any and all losses, costs, claims, causes of action
and liabilities (including without limitation court costs and attorneys’ fees)
arising in favor of STIS, STIS’s parent and affiliates and underwriters, and/or
their respective employees, agents, principals, officers, directors, invitees,
subcontractors (or their servants) or representatives, or any survivor of any
of the foregoing on account of injury to or death of any such persons arising
out of, resulting from or relating in any way to the Contract or activities or
omissions in connection therewith, regardless of whether H&P and/or its
parent, affiliates, and/or others may be wholly, partially or solely 



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negligent or otherwise at fault, or any defect in goods, equipment, or
materials, irrespective of whether same preexisted the Contract.


(2)                                  H&P agrees to protect, indemnify, defend
and hold STIS and STIS’s affiliates and underwriters free and harmless from and
against any and all losses, costs, claims, causes of action and liabilities
(including without limitation, court costs and attorney fees) arising in favor
of H&P and/or any of H&P’s employees, agents, principals, officers,
affiliates, invitees, subcontractors (other than STIS) or representatives, or
any survivor of any of the foregoing, on account of injury to or death of any
such persons arising out of, resulting from or relating in any way to the
Contract or activities or omissions in connection therewith, regardless of
whether STIS and/or its affiliates and/or others may be wholly, partially or
solely negligent or otherwise at fault, or any defect in premises, goods,
equipment, or materials, irrespective of whether same preexisted the Contract.


C.                                     All machinery, tools, material, and equipment
furnished by H&P or otherwise identified to the Contract and not
incorporated into the Work shall, at the completion or abandonment of the Work,
be returned or incorporated in the Work and delivered to H&P in as good
condition as when received by STIS. 
STIS, except for reasonable wear occasioned by use in performance of the
Work hereunder, shall be liable to H&P for any loss or damage to such
machinery, 



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tools,
material and equipment provided that STIS’s liability to compensate H&P
shall not exceed the amount of STIS’s insurance as specified herein.


D.                                    STIS shall examine visually all equipment,
machinery, tools, and or other items furnished by H&P and if any defects
are found therein, sufficient to make the use of any such items unsuitable or
unsafe, STIS shall immediately notify H&P of such defect or defects and
H&P shall replace the defective items. 
Should STIS fail to make such examination or fail to report a defect or
defects in such an item or items, STIS shall be deemed to have assumed all
risks and all liability for any mishap which may occur by reason of failure or
defects in such equipment, machinery, tools, or other items except for failure
due to latent defects that could not be ascertained from a visual
inspection.  STIS shall have the right to
insist on an inspection of any such equipment, materials and or other items by
H&P’s representative before accepting the same or incorporating it in the
Work, on notification to H&P’s representative of the arrival of the same.


9.                                       INSURANCE.   At all times during the
performance of Work hereunder, STIS agrees to carry and maintain in force at
least the following types of insurance:


A.                                Workmen’s Compensation Insurance in accordance with the laws of the
appropriate state and federal jurisdiction in which the Work is to be
performed.  This coverage shall contain
the following special endorsements:


(1)                                  Employer’s Liability coverage with limits of
not less than $1,000,000 per accident.



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(2)                                  U.S. Longshoremen and Harbor Workers’ Act
coverage and Outer Continental Shelf Lands Act coverage, if applicable to the
Work.


(3)                                  Employers’ Liability arising out of Maritime
operations including coverage for benefits and damages under the Jones Act with
limits of $1,000,000 per accident.


(4)                                  “Borrowed Servant” endorsement providing that
a Worker’s Compensation claim brought against H&P by an STIS employee will
be treated as a claim against STIS.


(5)                                  “In rem” endorsement providing that a claim “in
rem” shall be treated as a claim against STIS.


B.                                  Comprehensive General Liability Insurance,
including contractual liability with combined single limits of $1,000,000 for
injuries to or death of persons and damage to property per occurrence.


C.                                  Automobile Liability Insurance for liability
arising out of all owned, non-owned and hired vehicles with combined single
limits of $1,000,000 for injuries to or death of persons and damage to property
per occurrence.


D.                                 In the event watercraft are used by STIS,
STIS shall carry or require owners of such watercraft to carry Protection and
Indemnity Insurance in an amount of not less than the market value of the
vessel or $1,000,000, whichever is greater, with Charterer’s Limitation Clause
deleted.


E.                                   Excess Liability coverage with limits of Five
Million and no/100 Dollars ($5,000,000) excess of all primary liability
coverage.



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STIS’s insurance described herein shall be endorsed to provide that the
underwriters waive their right of subrogation against H&P and its insurer,
parent, subsidiaries affiliated companies, co-venturers and their respective
employees and agents, in respect of the risks assumed by STIS hereunder.  H&P will, as well, cause its insurers to
waive subrogation against STIS in respect of the risks assumed by H&P
hereunder.  All policies of insurance
provided by STIS shall be carried with insurance companies which are
satisfactory to H&P, and such policies and shall be primary as to any other
valid and collectible insurance which may be carried by H&P in respect of
the risks assumed by STIS hereunder. 
STIS shall cause H&P, its parent, and their respective agents,
employees and affiliates to be named as additional insured on all of said
policies except those in Section A above.


H&P and STIS hereby waive the right to subrogate against each
other.


Prior to the commencement of the Work, STIS or any of its subcontractors,
will provide H&P with Certificates of Insurance evidencing that STIS or its
subcontractors are in compliance with all of the above requirements.  Said Certificate will provide that H&P
will be given thirty (30) days’ prior notice of cancellation or material
alteration of any of the insurance policies specified in the Certificate.  Upon request, STIS shall permit H&P to
examine any of the insurance policies specified herein.  STIS shall require its subcontractors to
obtain, maintain and keep in force during the time in which they are engaged in
performing any Work hereunder insurance coverage acceptable to STIS and 



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furnish
STIS acceptable evidence of such insurance. 
STIS shall require all insurance policies carried by subcontractors to
contain endorsements waiving insurers’ rights of subrogation against H&P
and its insurers, parent, subsidiaries, affiliated companies, co-venturers and
their respective employees and agents.


10.                                 PATENT INDEMNITY.   STIS agrees to indemnify and hold harmless
H&P against claims of third persons for damage sustained by reason of the
infringement of patent rights with respect to materials, processes, machinery
or equipment selected and used by STIS in performing its Work; and H&P
agrees to indemnify and hold STIS harmless against claims of third persons for
damages sustained by reason of infringement of patent rights with respect to
materials, processes, machinery or equipment supplied or selected or
specifically required by H&P or other party on behalf of H&P and against
claims arising out of any plans or drawings provided to STIS by H&P,
provided, however, that the indemnitee shall notify the indemnitor of the
filing of any suit so as to permit the timely filing of an answer thereto, and
upon such notice the indemnitor shall have the obligation to assume the full
defense as such suit with attorneys of the indemnitor’s selection and shall
have the right to settle such suit in the indemnitee’s name, and further
provided that the indemnitee will fully cooperate with the indemnitor in the
defense of such suit.


11.                                 CHANGES IN WORK AND CHANGE ORDERS.


A.                                   H&P retains the right at any time to (i)
make changes to all or any portion of the Work, (ii) change the sequence of
STIS’s performance or delivery of any portion of the Work, and (iii) eliminate
any portion of the Work from this 



 16
 









Contract
and transfer such Work to other fabricators. 
STIS will immediately notify H&P if a proposed change in all or any
portion of the Work or in the delivery sequence of such Work will potentially
delay the scheduled delivery of such Work.


12.                                 WORKMANSHIP.   All workmanship and operational practices of
STIS shall be in accordance with the highest standards of workmanship for
similar kinds of work in the petroleum industry, and all material, machinery
and equipment supplied by STIS and incorporated in the Work shall be in
accordance with the Contract.


13.                                 WARRANTIES.


A.                                   With respect to any and all equipment
obtained from third parties by STIS and incorporated in the Work, STIS hereby
transfers to H&P, to whatever extent STIS can legally do so, all warranties
and guarantees made by the manufacturers thereon and STIS’s vendors and
suppliers thereof, and such transfers (to be evidenced by additional
instruments that H&P may reasonably require) shall constitute full
performance by STIS of STIS’s obligations with regard to such equipment, all
other responsibility and any warranty on the part of STIS in connection
therewith being expressly excluded and negated. 
STIS will use all reasonable efforts and will cooperate with H&P in
order to enforce any claims against manufacturer’s defects or under warranties
that may occur.  Notwithstanding the
foregoing, STIS warrants that the Work will be assembled, fabricated and
completed in strict accordance with the Contract.



 17















B.                                     STIS will be responsible for (i) faulty or
defective material or workmanship, and (ii) all materials, equipment and
workmanship that does not meet the specifications described in this Contract
(including Annex 1 attached hereto) and furnished by STIS or its subcontractors
or representatives (but subject to the exclusions and limitations of STIS’s
responsibility set forth in Paragraph A above). 
STIS will warrant the items described in 13B(i) and (ii) for a period of
360 days from the date that the Work is accepted by H&P.  In the event that written notice to STIS of a
claim against the warranties specified in this Paragraph 13B is sent within
such 360-day period, then such notice shall constitute the proper filing of a
warranty claim by H&P.  STIS reserves
the right to inspect and verify the nature of the warranty claim at its sole
cost and expense, before any action is taken. 
Such verification shall be undertaken within seventy-two (72) hours of
receipt of such claim.  H&P’s
commitment to a seventy-two (72) hour delay is, however, subject to such delay
not prejudicing H&P in its contractual relationship with and obligations to
the Operator of the rig. H&P may require STIS to make repairs or
replacements at the rig location where the Work is located.


If, in H&P’s judgment,
the repairs cannot be reasonably effected at said rig location, then STIS will
make repairs or replacements (as may be appropriate) at one of its yard
facilities located at Buna, Bridge City, Orange, Nederland or Vidor, Texas,
with the expense of transporting the Rig and/or rig components to or from said
yard to be borne by H&P.



 18
 









H&P may have such
repairs or replacements made elsewhere if H&P deems necessary, but shall
consult in advance with STIS before making the same, and STIS shall pay the
cost of such repairs or replacements no later than 15 days from the date of
H&P’s invoice therefore.  STIS shall
have no responsibility whatsoever with respect to any defective or faulty
workmanship not reported in writing to STIS within said three hundred sixty
(360) day period; deficiencies reported after said three hundred sixty (360)
day period shall be the exclusive responsibility of H&P.


STIS makes no warranties or
representations whatsoever other than those expressly set forth in this
Contract, and any other warranties, which might otherwise be implied, are
hereby expressly excluded and negated.


14.                                 TAXES AND PERMITS.   STIS agrees to pay all taxes, licenses, and
fees levied or assessed in connection with or incident to, the performance of
this Contract by the state in which the Work is to be performed or by the
federal government for unemployment compensation insurance, old age benefits,
social security, or any other taxes upon wages of STIS, its agents, employees,
and representatives.


STIS agrees to reimburse
H&P on demand for all such taxes or government charges, state or federal,
which H&P may be required or deem it necessary to pay on account of
employees of STIS or any subcontractor and to furnish H&P with the
information required to make necessary reports and to pay such taxes or
charges, and at its election, H&P is authorized to deduct all sums so paid
for taxes and governmental charges from such amounts as may be or become due or
owing to STIS hereunder.



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STIS agrees to be
responsible for the acquisition of all necessary permits from regulatory bodies
having jurisdiction over the Work to be performed hereunder.  STIS is to notify H&P in detail of all
conditions imposed by such bodies in connection with issuance of such
permits.  STIS shall be solely
responsible for compliance therewith to the extent of its obligations hereunder
and shall indemnify and hold H&P harmless from and against all fines,
penalties, losses, claims, and demands, or judgments arising out of, or in any
way connected with the noncompliance with any such conditions.  STIS agrees to obtain and maintain all
necessary up-to-date permits and certificates relative to its equipment,
machinery, tools and other appliances.


STIS agrees to pay all
claims for labor, material, services, and supplies furnished by STIS hereunder
and agrees to allow no lien or charges to be fixed upon the Work, equipment,
machinery, materials or other property connected with the Work and STIS agrees
to indemnify, protect, and save H&P harmless from and against all such
claims of liens.  Before any payments are
made by H&P to STIS, H&P may require STIS to furnish evidence
satisfactory to H&P that there are no unsatisfied claims for labor,
materials, equipment, and supplies or for injuries to persons or property not
covered by insurance.


15.                                 NOTICES.  All notices or communications
hereunder shall be in writing and shall be express mailed postage prepaid or
hand delivered as follows:


	
  If to H&P:

  	
   

  	
  Helmerich & Payne International Drilling Co.

  
	
   

  	
   

  	
  1437 South Boulder Avenue, Suite 1400

  
	
   

  	
   

  	
  Tulsa, OK   74119-3623

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Attention:   Alan Orr and Jim Bishop

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  With a copy to:    General
  Counsel

  




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  If to STIS:

  	
   

  	
  Southeast Texas Industrial Services, Inc.

  
	
   

  	
   

  	
  P.O. Box 1449

  
	
   

  	
   

  	
  Buna, Texas
  77612

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Attention: Paul
  Spence and Jim Wimberley

  
	
   

  	
   

  	
  McPherson, Monk,
  Hughes, Wimberley & Steele

  
	
   

  	
   

  	
  3120 Central
  Mail Drive

  
	
   

  	
   

  	
  Port Arthur, TX   77642

  



 


16.                                 TAKEOVER.   In the event (i) of unreasonably slow
progress, carelessness, inattention, or incompetency (as determined by H&P
in its sole judgment) on the part of STIS in the performance of the Work; (ii)
that a bankruptcy petition is filed against STIS, a receiver is appointed for
STIS, or STIS becomes insolvent; or (iii) of STIS’s failure to comply with its
obligations under this Contract, STIS shall be afforded a reasonable period of
time, not to exceed a maximum of ten (10) days, to correct or remedy the
matters complained of by H&P.  Should
STIS, within the time afforded by H&P, fail to correct or remedy such
matters to H&P’s satisfaction, then STIS will automatically be deemed to be
in default of this Contract and H&P shall have the right to take possession
of the Work (including such partially constructed equipment or materials as
have been generated or supplied by either party hereto) or discontinue the
Work.  If H&P so elects, it may take
possession of the Work, as well as any or all of STIS’s tools, machinery, and
equipment reasonably necessary to continue the Work, and through H&P’s
employees or employees of other contractors complete the Work contemplated by
this Contract.  In the event that, at the
time of notice of H&P’s dissatisfaction, a condition is present which
represents, in H&P’s opinion, an imminent danger or hazard to the Work,
H&P shall have the right to immediately take over the 



 21
 









Work and choose to discontinue, abandon, or continue
the Work as described above.  In the
event of any such takeover, H&P shall be entitled to recover damages equal
to the amount paid by H&P to complete the Work in excess of the Contract
price set forth in Paragraph 1 hereof, together with reasonable attorney’s
fees.  Nothing in this Paragraph 16 shall
be in derogation of H&P’s other rights under this Contract.


17.                                 TERMINATION.  H&P may in its sole
discretion terminate this Contract, with or without cause for any reason
whatsoever at any time by giving written notice of termination to STIS.  In the event of such termination, STIS shall
be paid, pursuant to the terms of the Contract, for the Work performed and
materials received up to the date of termination.  STIS shall allow H&P to review sufficient
records, accounts, receipts, invoices and other documents so that H&P can
satisfy itself that the amount due to STIS is reasonable.  Termination by H&P is not a breach of
this Contract and does not entitle STIS to any damages or claims except as
expressly stated in this Paragraph 17.


Notwithstanding anything to
the contrary in Paragraphs 11A and 17 of this Contract, unless H&P
terminates this Contract for cause, then H&P shall not have the right to
terminate this Contract until STIS has constructed and has been paid for the
construction of ten (10) of the rigs described in Annex 1.


18.                                 INTERPRETATION.  The
various documents comprising the Contract shall be interpreted so as to give
meaning to each document and its separate provisions, as an integral part of
the whole, PROVIDED, HOWEVER, where any irreconcilable inconsistency or
conflict exists between any of the matters contained in one or more of the
documents of the Contract and any other document thereof, then 



 22
 









the terms, provisions and other matters contained in
this Contract shall prevail over any of such matters contained in any of the
other documents.


19.                                 CONSEQUENTIAL DAMAGES. 
Neither STIS nor H&P shall be liable to the other for loss of
profits, loss of business, loss of anticipated revenue or any other indirect or
consequential damages or loss arising out of this Contract.


20.           GENERAL CONDITIONS.


A.                                   This Contract represents the entire agreement
between the parties and supersedes all prior negotiations and agreements.  Any amendment hereof shall be in writing and
signed by the party against whom it is sought to be enforced.


B.                                     This Contract shall be construed in
accordance with the laws of the State of Oklahoma, and exclusive jurisdiction
shall be vested in the federal court located in the Northern District of
Oklahoma.  Notwithstanding the foregoing
in this paragraph 20B, the parties will in good faith attempt to mediate any
dispute arising under this Contract prior to instituting litigation.  The party desiring to mediate a dispute shall
immediately provide a written mediation notice to the other party.  In the event that the parties are unable to
resolve any particular dispute within sixty (60) days from the date of the
mediation notice, then any further requirement to mediate is waived and the
parties shall have the right to seek all available lawful remedies, including
litigation.


C.                                     In the event any provision of this Contract,
especially with regard to the indemnities for personal injury and death
specified herein, are inconsistent 



 23
 









with
or contrary to any applicable federal, state or local law, rule or regulation,
said provision shall be deemed to be modified only to the extent required to
comply with said law, rule or regulation and as so modified, said provision and
the Contract shall continue in full force and effect.


D.                                    H&P shall have the right, upon
seventy-eight hours (78) prior notice, to audit during normal business hours at
STIS’s office, that portion of STIS’s books and records covering the Work.  H&P’s audit rights shall continue for a
period of two (2) years from the date of H&P’s acceptance of all the Work.


E.                                      No waiver by STIS or H&P of any default,
breach of warranty or covenant hereunder, whether intentional or not, shall be
deemed to extend to any prior or subsequent default, misrepresentation, or
breach of warranty or covenant hereunder or affect in any way any rights
arising by virtue of such occurrence. 
Neither the failure nor any delay by any party hereto in exercising any
right, power or privilege under this Contract will operate as a waiver of any
other such right, power or privilege, and no single or partial exercise of any
right, power or privilege will preclude any other or further exercise of such
right, power or privilege or the exercise of any other right, power or
privilege.


F.                                      STIS shall not subcontract any of the Work to
third parties without the prior written consent of H&P.  This Contract shall not be assigned by STIS
without the prior written consent of H&P.


G.                                     Notwithstanding anything to the contrary in
this Contract, the parties acknowledge that H&P shall have the right, in
its sole discretion, to have STIS subcontractors perform services directly for
H&P without STIS intervention or assistance.



 24
 









IN WITNESS WHEREOF, the
parties hereto have executed this Contract as of the day, month and year first
written above.


 


	
  

  	
   

  	
  HELMERICH & PAYNE INTERNATIONAL

  
	
  WITNESS:

  	
   

  	
  DRILLING CO.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  By

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  SOUTHEAST TEXAS INDUSTRIAL

  
	
   

  	
   

  	
  SERVICES, INC.

  
	
  WITNESS:

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  By

  	
   

  
								



 



 25
 









ANNEX 1 – Scope of Work


In accordance with H&P’s instructions and
pursuant to the terms of the Contract, STIS will provide labor and equipment to
perform:


	
  

  	
  1.

  	
   

  	
  Equipment Installation

  
	
   

  	
  2.

  	
   

  	
  Mechanical Outfitting

  
	
   

  	
  3.

  	
   

  	
  Component Assembly

  
	
   

  	
  4.

  	
   

  	
  Rig up and rig down

  
	
   

  	
  5.

  	
   

  	
  Miscellaneous welding

  
	
   

  	
  6.

  	
   

  	
  Loading/Unloading

  
	
   

  	
  7.

  	
   

  	
  Testing & Commissioning

  



 


for a total of 36 rigs, as specified below, (the “Work”).


	
  

  	
  a.

  	
   

  	
  Flex 4S – 7 rigs (Rig 308, Rig 309, Rig 310, Rig
  316, Rig 318, Rig 319, Rig 324)

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  b.

  	
   

  	
  Flex 4S+ - 4 rigs (Rig 320, Rig 321, Rig 325, Rig
  326)

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  c.

  	
   

  	
  Flex 4MA – (to be determined)

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  d.

  	
   

  	
  Flex 4 sub3 – 2 rigs (Rig 313, Rig 317)

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  e.

  	
   

  	
  Flex 3 – 8 rigs (Rig 252, Rig 254, Rig 257, Rig 258,
  Rig 259, Rig 260, Rig 261, Rig 262)

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  f.

  	
   

  	
  The remaining 15 rigs will be a combination of the
  various types listed above as determined by H&P.

  



 


Schedule – STIS shall complete the various phases of the Work in
accordance with H&P’s current production schedule.


Standards – STIS will perform all Work in accordance with the Contract
including the following standards:


	
  

  	
  a.

  	
   

  	
  Structural Fabrication
  Specifications HP-050 & F4-S1

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  b.

  	
   

  	
  Protective Coatings
  Specification HP-080

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  c.

  	
   

  	
  Piping Fabrication
  Specification HP-060

  



 



 26
 









 


	
  

  	
  d.

  	
   

  	
  API 4F (where applicable)

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  e.

  	
   

  	
  AWS D1.1

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  f.

  	
   

  	
  ASME B31.3

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  g.

  	
   

  	
  Other specifications/codes
  listed on any drawing

  



 



 27
 









EXHIBIT “A”


Time and Materials


1.        STIS Labor - as per the STIS rate sheet dated
November 15, 2005, attached hereto as Exhibit “A-1”


2.        Materials – Actual documented invoiced cost
of materials + 10%



 28














	
  

  	
  Southeast Texas Industrial Services,
  Inc.

  	
   

  
	
  P. O. Box 1449,
  Buna, TX 77612

  	
   

  
	
  Buna, TX 77612

  	
   

  
	
  409-994-3570

  	
   

  
	
  409-994-5477 Fax

  	
   

  



 


November 15, 2005


Helmerich &
Payne


Attn:Mike Thomas


Mr. Thomas


Following please find our standard Billing rates:




	
  Craft

  	
   

  	
  Straight

  	
   

  	
  Overtime

  	
   

  	
  Double Time

  
	
  Project Manger

  	
   

  	
  $50.72

  	
   

  	
  $69.99

  	
   

  	
  $89.27

  
	
  Foreman

  	
   

  	
  $37.73

  	
   

  	
  $52.07

  	
   

  	
  $66.46

  
	
  A Welder

  	
   

  	
  $34.48

  	
   

  	
  $47.58

  	
   

  	
  $60.86

  
	
  B Welder

  	
   

  	
  $31.23

  	
   

  	
  $43.10

  	
   

  	
  $54.96

  
	
  C Welder

  	
   

  	
  $27.98

  	
   

  	
  $38.61

  	
   

  	
  $49.24

  
	
  Operator

  	
   

  	
  $31.23

  	
   

  	
  $43.10

  	
   

  	
  $54.96

  
	
  Warehouse

  	
   

  	
  $26.36

  	
   

  	
  $36.38

  	
   

  	
  $46.39

  
	
  Tool Room

  	
   

  	
  $24.74

  	
   

  	
  $34.14

  	
   

  	
  $43.54

  
	
  A Helper

  	
   

  	
  $24.74

  	
   

  	
  $34.14

  	
   

  	
  $43.54

  
	
  B Helper

  	
   

  	
  $21.49

  	
   

  	
  $29.66

  	
   

  	
  $37.82

  
	
  Clean UP

  	
   

  	
  $21.49

  	
   

  	
  $29.66

  	
   

  	
  $37.82

  
	
  Time Keeper

  	
   

  	
  $24.74

  	
   

  	
  $34.14

  	
   

  	
  $43.54

  






 


All hours worked
over 40 hours per week billed at Overtime rate.


All hours worked
on Holidays will be billed at Double Time rate.


All Purchased
materials billed at invoice cost plus 12%.


All small tools
and rental equipment billed at invoice cost plus 15%.


All Subcontractors
billed at invoice cost plus 15%.


Perdiem at 60.00 a
day.


Company owned
trucks will be billed at $70.00 a day.


Sincerely,


Randy Green


Randy Green


Construction Manager


Exhibit “A–1”