Exhibit 10.5



THIS AGREEMENT is made the 5th day of November, 1997

BETWEEN:

(1) ROTARY STEERABLE TOOLS U.S.A. L.P., of 4708 Pecan Grove, San Antonio, Texas
    78222

(2) NEHI of 616 FM, 1960 West #225, Houston, Texas 77090

RECITALS

(A)  Jack Phillip Chance (JPC) and Stephen John McLoughlin (SJM) have conceived
     and invented a device which is useful and which they believe to have
     commercial potential and they have made an application for a Patent in the
     United Kingdom and the United States of America and numerous other
     jurisdictions. The device referred to is identified and generally described
     as "A down hole adjustable device for trajectory control in the drilling of
     deviated wells" (the "Device"). The Device is proprietary intellectual
     property wholly and solely owned by SJM and JPC and they have disclosed the
     details of the Device confidentially to Bill Knollenberg and A. Bradley
     Knollenberg, who are Directors of NEHI and who have agreed to provide
     financial support for the Development and possible exploitation of the
     Device.

(B)  JPC and SJM have licensed the device to a Limited Partnership registered in
     the State of Texas, USA under number 00102516-10 which is called RST (USA)
     L.P. ("the Partnership") and whose principal place of business is 4708,
     Pecan Grove, San Antonio, Texas 78222.

(C)  RST (USA) L.P. and NEHI wish to enter into this agreement in order that
     they may develop the Device.

(D)  NEHI is funding certain expenses incurred by RST (USA) L.P. in relation to
     the Development of the Device, including payment of Patent Agents' fees,
     expenses and disbursements relating inter alia to the Patent Application in
     respect of the Device, patent attorney fees, filing fees, design
     engineering fees, legal fees associated with contractual obligations,
     specialist engineering fees, materials to build two prototypes of the
     Device, machining and finishing costs, travel expenses including flight
     tickets and hire cars, fuel, food, hotel accommodation, hire of apartments,
     salaries for JPC and SJM, stationery, postal and telephone communication
     expenses and other miscellaneous expenses incurred by JPC and SJM in the
     course of bringing the said prototypes to a stage where they can be
     considered to be ready for experimental testing, (at which time expenses
     incurred shall be costs of material and personnel movements, air-freight
     bills, re-machining of parts, associated vendor costs, ancillary legal
     costs, advertising, and publicity for the Device (all of which shall be
     known as the "Development" and shall continue to provide such funding until
     such time as, in the


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    opinion of the parties, the Device can be commercially exploited. In this
    Agreement any such funding shall be called the "Initial Funding".

IN CONSIDERATION of JPC and SJM undertaking work and contributing their skill,
knowledge and experience of the drilling industry to RST (USA) L.P. and in
respect of the Device THE PARTIES HEREBY AGREE as follows:

    1.  The Initial Funding shall be non-returnable. As part of the Initial
        Funding, NEHI will contribute 6,551,022 shares of Common Stock to RST
        (USA) L.P.

    2.  The parties have incorporated a new company (the "Company"), which, for
        the avoidance of doubt we will refer to as RST (USA), through which the
        parties will undertake the Development of the device, build the
        prototypes and market and exploit the Device under licence from JPC and
        SJM who are the sole owners of the intellectual property rights relating
        to the device. For the avoidance of doubt the costs and expenses
        incurred in the incorporation of the Company will be provided by NEHI as
        part of the Initial Funding.

    3.  The shares in the Company shall be held in the proportions listed below
        by each party with voting rights in proportion to the percentage
        shareholding:

        General Partner:         RST (USA) LLC            1.00%

        RST (USA) LLC is wholly owned by JPC and SJM who hold 50% equity each.

        Limited Partners:        JPC                      37.00%

                                 SJM                      37.00%

                                 NEHI                     25.00%


        NEHI shall have the first right of refusal to purchase up to 55% of the
        equity in RST (USA) L.P., belonging to JPC and SJM. In the event of JPC
        and SJM electing to sell shares in RST (USA) L.P., NEHI shall have
        thirty (30) days in which to decide whether they wish to exercise their
        option to purchase and an additional sixty (60) days to raise the
        finance with which to purchase. In the event that NEHI decides to sell
        some of its stock, JPC and SJM have the right to purchase the stock, the
        decision to purchase being made within 30 days and allowing 60 days to
        raise the finance to purchase the shares.

        No variation of these voting rights shall be made without the written
        agreement of the parties and in the event that the actual percentage of
        the respective shareholding of the parties alters the parties shall
        still retain voting rights in the


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        percentages set out herein and the articles of incorporation of the
        Company shall be amended accordingly and as necessary to give effect to
        this clause.

    4.  In any sale of shares in RST (USA) L.P. by NEHI, JPC and SJM shall have
        the right of first refusal to purchase such stock at market value or, if
        less than market value, at a price to be agreed between the parties.

    5.  Subject to Clause 4, above, NEHI shall not assign, transfer or otherwise
        part with their shares in the Company to any third party without the
        prior written consent of JPC and SJM.

    6.  JPC and SJM shall be appointed the initial directors of the Company,
        with Bill Knollenberg representing NEHI's interest in the Company.
        Further directors will be appointed as may be agreed between the
        parties.

    7.  NEHI shall provide Initial Funding in the sun of US $500,000 (five
        hundred thousand US dollars) for the purposes of the Development which
        shall be provided in two equal sums of $250,000 (two hundred and fifty
        thousand dollars) and paid into the Company's bank account for and to
        the benefit of the Company. The first lump sum of $250,000 (two hundred
        and fifty thousand dollars) shall be paid immediately by cleared funds
        upon signing this agreement and the second lump sum of $250,000 (two
        hundred and fifty thousand dollars) shall be provided by cleared funds
        on or before 1st day of December, 1997.

    8.  If RST (USA) L.P. decides to make an Initial Public Offering (I.P.O.) of
        the company then NEHI will advise and assist the Company in such an
        initial public offering for a consideration to be agreed between the
        parties. NEHI shall have the right to purchase the first 25% of the
        I.P.O. at a fair market value, to be determined at the time of issuing
        the I.P.O.

    9.  If the costs of Development of the Device increase beyond the initial
        Funding of US $500,000 (five hundred thousand US dollars) due to
        unforeseen engineering problems or re-engineering and associated costs,
        NEHI shall provide a further sun of US $500,000 (five hundred thousand
        US dollars), or more if there is an unusual cost overrun, to the
        Company. The further $500,000 shall be paid in installments with the
        stipulation that the total sum shall be paid in full by the date that
        the tool is considered "Commercial". The date of "commerciality" shall
        be taken as being the date when the first invoice for RST (USA) L.P.
        tool rental is made out. This further sum shall be non-returnable and
        shall have no effect on the proportion of shares in the Company listed
        in Clause 3, above.

    10. NEHI and NEHI's board of directors shall indemnify the Company against
        any and all liability, loss, damage, costs and expenses which RST may
        suffer whether direct or consequential as a result of any activities of
        NEHI prior to the signing of this agreement. The indemnity shall also
        apply to any action, proceedings or claims


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        taken by the Security and Exchange Commission or other financial
        regulatory body taken as a result of an altered, revised or summarized
        version or format which has not been authorized by RST. A similar
        indemnity shall exist between RST and NEHI, whereby RST will indemnify
        NEHI against any and all liabilities arising from any activities of RST
        (USA) L.P. or JPC and SJM prior to the signing of this agreement.

    11. For the avoidance of doubt all Intellectual Property rights created or
        arising during the Development of the Device shall be owned by JPC and
        SJM.

    12. This contract supersedes all previous contracts.

    13. This Agreement shall be governed by the laws of Texas in the United
        States of America.

SIGNED by JACK PHILIP CHANCE

SIGNED by STEPHEN JOHN McLOUGHLIN

SIGNED by BILL KNOLLENBERG on behalf of NEHI