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                                                                    Exhibit 4.05

THE REPRESENTATIVE'S OPTION REPRESENTED BY THIS CERTIFICATE AND THE SECURITIES
ISSUABLE UPON EXERCISE HEREOF (THE "SECURITIES") HAVE BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED, PURSUANT TO A REGISTRATION STATEMENT FILED
WITH THE SECURITIES AND EXCHANGE COMMISSION AND WITH THE SECURITIES
ADMINISTRATORS OF CERTAIN STATES UNDER THE SECURITIES ("BLUE SKY") LAWS OF SUCH
STATES. HOWEVER, NEITHER THE REPRESENTATIVE'S OPTION NOR SUCH SECURITIES MAY BE
SOLD, TRANSFERRED, PLEDGED, OR HYPOTHECATED EXCEPT PURSUANT TO (I) A
POST-EFFECTIVE AMENDMENT TO SUCH REGISTRATION STATEMENT, (II) A SEPARATE
REGISTRATION STATEMENT UNDER SUCH ACT, OR (III) AN EXEMPTION FROM REGISTRATION
UNDER SUCH ACT AND UNDER THE APPLICABLE BLUE SKY LAWS.

THIS REPRESENTATIVE'S OPTION MAY NOT BE SOLD, TRANSFERRED OR ASSIGNED EXCEPT AS
OTHERWISE PROVIDED HEREIN AND THE HOLDER OF THIS REPRESENTATIVE'S OPTION, BY ITS
ACCEPTANCE HEREOF, AGREES THAT IT WILL NOT SELL, TRANSFER OR ASSIGN THIS
REPRESENTATIVE'S OPTION EXCEPT AS OTHERWISE PROVIDED HEREIN.

                        NATURAL GAS SERVICES GROUP, INC.

              REPRESENTATIVE'S OPTION FOR THE PURCHASE OF WARRANTS

NO. UWW-001                                     165,000 REPRESENTATIVE'S OPTIONS

         THIS CERTIFIES that, for receipt in hand of $50 and other value
received (the "Purchase Price"), NEIDIGER/TUCKER/BRUNER, INC. (the "Holder"), is
entitled to subscribe for and purchase from NATURAL GAS SERVICES GROUP, INC., a
Colorado corporation (the "Company"), upon the terms and conditions set forth
herein, at any time, or from time to time, after _______________, 2003 (12
months from the Effective Date, as defined below) and before 5:00 p.m. Colorado
time on _______________, 2007 (the "Exercise Period"), 165,000 Warrants (a
"Warrant" or the "Warrants") of the Company at an exercise price of $______ per
Representative's Option or 120% of the offering price of Warrants sold by the
Company in the Public Offering (hereinafter defined). Subject to the higher
exercise price and the longer exercise period set forth below each Warrant shall
be identical to the Warrants sold in the public offering to be underwritten by
the Holder (the "Public Offering"). Each Warrant shall be exercisable to
purchase one share of Common Stock (a "Warrant Share") at a price of $__________
(120% of the exercise price of the Warrants sold in the Public Offering; the
"Exercise Price") until _______________, 2008, which is six years from the date
on which the Company's Registration Statement on Form SB-2, Registration No.
333-__________ (the

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"Registration Statement") was declared effective by the Securities and Exchange
Commission (the "Effective Date").

         The term the "Holder" as used herein shall include any transferee to
whom this Representative's Option has been transferred in accordance with the
terms of this Representative's Option. As used herein the term "this
Representative's Option" shall mean and include this Representative's Option and
any Representative's Option or Representative's Options hereafter issued as a
consequence of the exercise or transfer of this Representative's Option in whole
or in part, but shall exclude the Warrants, and the term "Common Stock" shall
mean and include the Company's Common Stock with ordinary voting power, which
class at the date hereof is publicly traded.

         1. This Representative's Option may not be sold, transferred, assigned,
pledged or hypothecated until ______________, 2003 (12 months from the Effective
Date of the Registration Statement) except that it may be transferred, in whole
or in part, (i) to one or more officers or partners of the Holder (or the
officers or partners of any such partner); (ii) to a member of the underwriting
syndicate and/or its officers or partners; or (iii) by operation of law. After
_________, 2003, this Representative's Option may be sold, transferred, assigned
or hypothecated in accordance with applicable law.

         2. (a) This Representative's Option may be exercised during the
         Exercise Period as to the whole or any lesser number of Warrants, by
         the surrender of this Representative's Option (with the election
         attached hereto duly executed) to the Company at its office at 2911
         South County Road 1260, Midland, Texas 79706, or such other place as is
         designated in writing by the Company, together with a certified or bank
         cashier's check payable to the order of the Company in an amount equal
         to the Purchase Price.

                  (b) Following exercise of this Representative's Option, and at
         anytime thereafter through and until expiration of the Warrants, the
         Holder may exercise the Warrants underlying this Representative's
         Option by tendering a notice of exercise, together with a certified or
         bank cashier's check payable to the order of the Company, in

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         an amount equal to the Exercise Price multiplied by the number of
         Warrant Shares as to which such exercise relates.

                  (c) Upon written request of the Holder, and in lieu of payment
         of the Exercise Price of the Warrants by check in accordance with
         paragraph 2(b) hereof, the Holder may exercise the Warrants (or any
         portion thereof) for and receive the number of Warrants equal to a
         fraction, the numerator of which equals (i) the amount by which the
         Current Market Price of the Common Stock for the ten (10) trading days
         preceding the date of exercise exceeds the Exercise Price per Warrant,
         multiplied by (ii) the number of Warrant Shares to be purchased; the
         denominator of which equals the Current Market Price.

                  (d) For the purposes of any computation under this
         Representative's Option, the "Current Market Price" at any date shall
         be the closing price of the Common Stock on the business day next
         preceding the event requiring an adjustment hereunder. If the principal
         trading market for such securities is an exchange, the closing price
         shall be the reported last sale price on such exchange on such day
         provided if trading of such Common Stock is listed on any consolidated
         tape, the closing price shall be the reported last sale price set forth
         on such consolidated tape. If the principal trading market for such
         securities is the over-the-counter market, the closing price shall be
         the last reported sale price on such date as set forth by the American
         Stock Exchange, or, if the security is not quoted on such market, the
         average closing bid and asked prices as set forth in the National
         Quotation Bureau pink sheet or the Electronic Bulletin Board System for
         such day. Notwithstanding the foregoing, if there is no reported last
         sale price or average closing bid and asked prices, as the case may be,
         on a date prior to the event requiring an adjustment hereunder, then
         the Current Market Price shall be determined as of the latest date
         prior to such day for which such last sale price or average closing bid
         and asked price is available.

         3. Upon each exercise of this Representative's Option, the Holder shall
be deemed to be the holder of record of the Warrants issuable upon such
exercise, notwithstanding that the transfer books of the Company shall then be
closed or certificates representing such Warrants shall not then have been
actually delivered to the Holder. As soon as practicable after each such

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exercise of this Representative's Option, the Company shall issue and deliver to
the Holder a certificate or certificates for the Warrants issuable upon such
exercise, registered in the name of the Holder or its designee. If this
Representative's Option should be exercised in part only, the Company shall,
upon surrender of this Representative's Option for cancellation, execute and
deliver a new Representative's Option evidencing the right of the Holder to
purchase the balance of the Warrants (or portions thereof) subject to purchase
hereunder.

         4. Any warrants, other than the Warrants, issued upon the transfer or
exercise in part of this Representative's Option (together with this
Representative's Option, the "Representative's Options") shall be numbered and
shall be registered in a Representative's Option Register as they are issued.
The Company shall be entitled to treat the registered holder of any
Representative's Option on the Representative's Option Register as the owner in
fact thereof for all purposes and shall not be bound to recognize any equitable
or other claim to or interest in such Representative's Option on the part of any
other person. The Representative's Options shall be transferable only on the
books of the Company upon delivery thereof duly endorsed by the Holder or by his
duly authorized attorney or representative, or accompanied by proper evidence of
succession, assignment or authority to transfer. In all cases of transfer by an
attorney, executor, administrator, guardian or other legal representative, duly
authenticated evidence of his or its authority shall be produced. Upon any
registration of transfer, the Company shall deliver a new Representative's
Option or Representative's Options to the person entitled thereto. The
Representative's Options may be exchanged, at the option of the Holder thereof,
for another Representative's Option, or other Representative's Options of
different denominations, of like tenor and representing in the aggregate the
right to purchase a like number of Warrants (or portions thereof) upon surrender
to the Company or its duly authorized agent. Notwithstanding the foregoing, the
Company shall have no obligation to cause Representative's Options to be
transferred on its books to any person if, in the opinion of counsel to the
Company, such transfer does not comply with the provisions of the Securities Act
of 1933, as amended (the "Act"), or applicable state blue sky laws and the rules
and regulations thereunder.

         5. The Company shall at all times reserve and keep available out of its
authorized and unissued Common Stock, solely for the purpose of providing for
the exercise of this Representative's

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Option and the Warrants purchasable upon exercise of this Representative's
Option, such number of shares of Common Stock as shall, from time to time, be
sufficient therefor. The Company covenants that all shares of Common Stock
issuable upon exercise of Warrants underlying this Representative's Option shall
be validly issued, fully paid, nonassessable, and free of preemptive rights.

         6. The rights and privileges of the Warrants issuable on exercise of
this Representative's Option shall be as provided in the warrant certificate
(the "Warrant Certificate") to be delivered to the Holder on exercise of this
Representative's Option. All anti-dilution and other rights shall be as provided
for in the Warrant Certificate and as set forth in the warrant agreement by and
between the Company and the Warrant Agent for the Company (the "Warrant
Agreement"). The provisions of the Warrant Agreement relating to anti-dilution
rights and any other rights and privileges granted to holders of publicly traded
Warrants are incorporated by reference herein as if more fully set forth herein.
Notwithstanding any other language to the contrary herein or in the Warrant
Agreement by and between the Company and the Warrant Agent, in the event, prior
to the exercise of this Warrant, Holders of publicly-traded Warrants shall be
entitled to the benefit of any anti-dilution provisions of the Warrant Agreement
or the Warrant Certificate then, in such event, the Warrants issuable upon
exercise of this Representative's Option shall be adjusted in accordance with
the provisions of the anti-dilution provisions of the Warrant Certificate and
the Warrant Agreement in a manner identical to the adjustments made pursuant to
the anti-dilution provisions and other rights and privileges applicable to
publicly-traded warrants. Any such adjustment may be made at or immediately
following the date of exercise hereof. Notwithstanding any other language to the
contrary herein, (i) the anti-dilution terms of this Representative's Option
will not be enforced so as to provide the Holder the right to receive, or for
the accrual of, cash dividends prior to the exercise of this Representative's
Option, and (ii) the anti-dilution terms of this Representative's Option will
not be enforced in such a manner as to provide the Holder with disproportionate
rights, privileges and economic benefits not provided to purchasers of Warrants
in the Public Offering.

         7. The issuance of any Warrants or other securities upon the exercise
of this Representative's Option or any Warrant Shares upon the exercise of the
Warrants, and the delivery of certificates or other instruments representing
such securities, or other securities, shall be made without charge to the Holder
for any tax or other charge in respect of such issuance.

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The Company shall not, however, be required to pay any tax which may be payable
in respect of any transfer involved in the issue and delivery of any certificate
in a name other than that of the Holder and the Company shall not be required to
issue or deliver any such certificate unless and until the person or persons
requesting the issue thereof shall have paid to the Company the amount of such
tax or shall have established to the satisfaction of the Company that such tax
has been paid.

         8. (a) If, at any time after ______________, 2003 (one year after the
         Effective Date of the Registration Statement), and ending
         _______________, 2008 (six years after the Effective Date of the
         Registration Statement), the Company shall file a registration
         statement (other than on Form S-4, Form S-8, or any successor form)
         with the Securities and Exchange Commission (the "Commission") while
         Warrants are available for purchase upon exercise of this
         Representative's Option or while any Warrants or Warrant Shares
         (collectively, the "Representative's Securities") are outstanding, the
         Company shall give the Holder and all the then holders of such
         Representative's Options and Representative's Securities at least 30
         days prior written notice of the filing of such registration statement.
         If requested by the Holder or by any such holder in writing within 20
         days after receipt of any such notice, the Company shall, at the
         Company's sole expense (other than the fees and disbursements of
         counsel for the Holder or such holder and the underwriting discounts
         and unaccountable expenses, if any, payable in respect of the
         securities sold by the Holder or any such holder), register or qualify
         the Representative's Securities of the Holder or any such holders who
         shall have made such request concurrently with the registration of such
         other securities, all to the extent requisite to permit the public
         offering and sale of the Representative's Securities, and will use its
         best efforts through its officers, directors, auditors and counsel to
         cause such registration statement to become effective as promptly as
         practicable. Notwithstanding the foregoing, if the managing underwriter
         of any such offering shall advise the Company in writing that, in its
         opinion, the distribution of all or a portion of the Representative's
         Securities requested to be included in the registration concurrently
         with the securities being registered by the Company would materially
         adversely affect the distribution of such securities by the Company for
         its own account, then the Holder or any such holder who shall have
         requested registration of his or its Representative's Securities shall
         delay

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         the offering and sale of such Representative's Securities (or the
         portions thereof so designated by such managing underwriter) for such
         period, not to exceed 90 days, as the managing underwriter shall
         request, provided that no such delay shall be required as to any
         Representative's Securities if any securities of the Company are
         included in such registration statement for the account of any person
         other than the Company and the Holder unless the securities included in
         such registration statement for such other person shall have been
         reduced pro rata to the reduction of the Representative's Securities
         which were requested to be included in such registration.

                  (b) If at any time after _______________, 2003 (one year after
         the Effective Date of the Registration Statement), and before
         _______________, 2007 (five years after the Effective Date of the
         Registration Statement), the Company shall receive a written request
         from holders of Representative's Securities who, in the aggregate, own
         (or upon exercise of all Representative's Options will own) a majority
         of the total number of Representative's Securities, the Company shall,
         as promptly as practicable, prepare and file with the Commission a
         registration statement sufficient to permit the public offering and
         sale of the Representative's Securities, and will use its best efforts
         through its officers, directors, auditors and counsel to cause such
         registration statement to become effective as promptly as practicable;
         provided, however, that the Company shall only be obligated to file and
         obtain effectiveness of one such registration statement for which all
         expenses incurred in connection with such registration (other than the
         fees and disbursements of counsel for the Holder or such holders and
         underwriting discounts and unaccountable expenses, if any, payable in
         respect of the Representative's Securities sold by the Holder or any
         such holder) shall be borne by the Company.

                  (c) In the event of a registration pursuant to the provisions
         of this paragraph 8, the Company shall use its best efforts to cause
         the Representative's Securities so registered to be registered or
         qualified for sale under the securities or blue sky laws of such
         jurisdictions as the Holder or such holders may reasonably request;
         provided, however, that the Company shall not be required to qualify to
         do business in any state by reason of this paragraph 8(c) in which it
         is not otherwise required to qualify to do business and provided
         further, that the Company has no obligation to qualify the

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         Representative's Securities where such qualification would cause any
         unreasonable delay or expenditure by the Company.

                  (d) The Company shall keep effective any registration or
         qualification contemplated by this paragraph 8 and shall from time to
         time amend or supplement each applicable registration statement,
         preliminary prospectus, final prospectus, application, document and
         communication for such period of time as shall be required to permit
         the Holder or such holders to complete the offer and sale of the
         Representative's Securities covered thereby. The Company shall in no
         event be required to keep any such registration or qualification in
         effect for a period in excess of nine months from the date on which the
         Holder and such holders are first free to sell such Representative's
         Securities; provided, however, that if the Company is required to keep
         any such registration or qualification in effect with respect to
         securities other than the Representative's Securities beyond such
         period, the Company shall keep such registration or qualification in
         effect as it relates to the Representative's Securities for so long as
         such registration or qualification remains or is required to remain in
         effect in respect of such other securities.

                  (e) In the event of a registration pursuant to the provisions
         of this paragraph 8, the Company shall furnish to the Holder and to
         each such holder such reasonable number of copies of the registration
         statement and of each amendment and supplement thereto (in each case,
         including all exhibits), such reasonable number of copies of each
         prospectus contained in such registration statement and each supplement
         or amendment thereto (including each preliminary prospectus), all of
         which shall conform to the requirements of the Act and the rules and
         regulations thereunder, and such other documents as the Holder or such
         holders may reasonably request in order to facilitate the disposition
         of the Representative's Securities included in such registration.

         (f) In the event of a registration pursuant to the provisions of this
         paragraph 8, the Company shall furnish the Holder and each holder of
         any Representative's Securities so registered with an opinion of its
         counsel to the effect that the registration statement has become
         effective under the Act and no order suspending the effectiveness of
         the

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         registration statement, preventing or suspending the use of the
         registration statement, any preliminary prospectus, any final
         prospectus, or any amendment or supplement thereto has been issued, nor
         to such counsel's actual knowledge has the Securities and Exchange
         Commission or any securities or blue sky authority of any jurisdiction
         instituted or threatened to institute any proceedings with respect to
         such an order and (ii) the registration statement and each prospectus
         forming a part thereof (including each preliminary prospectus), and any
         amendment or supplement thereto, complies as to form with the Act and
         the rules and regulations thereunder. Such counsel shall also provide a
         Blue Sky Memorandum setting forth the jurisdictions in which the
         Representative's Securities have been registered or qualified for sale
         pursuant to the provisions of paragraph 8(c).

                  (g) The Company agrees that until all the Representative's
         Securities have been sold under a registration statement or pursuant to
         Rule 144 under the Act or until the Representative's Securities may be
         sold under Rule 144(k), it shall keep current in filing all reports,
         statements and other materials required to be filed with the Commission
         to permit holders of the Representative's Securities to sell such
         securities under Rule 144.

                  (h) The Holder and any holders who propose to register their
         Representative's Securities under the Act shall execute and deliver to
         the Company a selling stockholder questionnaire on a form to be
         provided by the Company.

                  (i) The Company shall not be required by the terms hereof to
         file a Registration Statement if, in the opinion of counsel to the
         holders of the Representative's Securities and counsel for the Company
         (or, should they not agree, in the opinion of another counsel
         experienced in securities law matters acceptable to counsel for the
         holders of Representative's Securities and the Company), the proposed
         public offering or other transfer as to which such Registration
         Statement is requested to be filed is exempt from applicable federal
         and state securities laws, rules, regulations and would result in
         unaffiliated purchasers or transferees obtaining securities that are
         not "restricted securities" as that term is defined in Rule 144 under
         the Act.

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         9. (a) Subject to the conditions set forth below, the Company agrees to
         indemnify and hold harmless the Holder, any holder of any of the
         Representative's Securities, their officers, directors, partners,
         employees, agents and counsel, and each person, if any, who controls
         any such person within the meaning of Section 15 of the Act or Section
         20(a) of the Securities Exchange Act of 1934, as amended (the "Exchange
         Act"), from and against any and all loss, liability, charge, claim,
         damage and expense whatsoever (which shall include, for all purposes of
         this Section 9, but not be limited to, attorneys' fees and any and all
         expense whatsoever incurred in investigating, preparing or defending
         against any litigation, commenced or threatened, or any claim
         whatsoever, and any and all amounts paid in settlement of any claim or
         litigation), as and when incurred, arising out of, based upon, or in
         connection with (i) any untrue statement or alleged untrue statement of
         a material fact contained (A) in any registration statement,
         preliminary prospectus or final prospectus (as from time to time
         amended and supplemented), or any amendment or supplement thereto, or
         (B) in any application or other document or communication (in this
         Section 9 collectively called an "application") executed by or on
         behalf of the Company or based upon written information furnished by or
         on behalf of the Company filed in any jurisdiction in order to register
         or qualify any of the Representative's Securities under the securities
         or blue sky laws thereof or filed with the Commission or any securities
         exchange; or any omission or alleged omission to state a material fact
         required to be stated therein or necessary to make the statements
         therein not misleading, unless such statement or omission was made in
         reliance upon and in conformity with written information furnished to
         the Company with respect to the Holder or any holder of any of the
         Representative's Securities by or on behalf of such person expressly
         for inclusion in any registration statement, preliminary prospectus, or
         final prospectus, or any amendment or supplement thereto, or in any
         application, as the case may be, or (ii) any breach of any
         representation, warranty, covenant or agreement of the Company
         contained in this Representative's Option. The foregoing agreement to
         indemnify shall be in addition to any liability the Company may
         otherwise have, including liabilities arising under this
         Representative's Option.

                  If any action is brought against the Holder or any holder of
         any of the Representative's Securities or any of its officers,
         directors, partners, employees, agents or

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         counsel, or any controlling persons of such person (an "indemnified
         party") in respect of which indemnity may be sought against the Company
         pursuant to the foregoing paragraph, such indemnified party or parties
         shall promptly notify the Company in writing of the institution of such
         action (but the failure so to notify shall not relieve the Company from
         any liability it may otherwise have to Holder or any holder of any of
         the Representative's Securities) and the Company shall promptly assume
         the defense of such action, including the employment of counsel
         (reasonably satisfactory to such indemnified party or parties) and
         payment of expenses. Such indemnified party or parties shall have the
         right to employ its or their own counsel in any such case, but the fees
         and expenses of such counsel shall be at the expense of such
         indemnified party or parties unless the employment of such counsel
         shall have been authorized in writing by the Company in connection with
         the defense of such action or the Company shall not have promptly
         employed counsel reasonably satisfactory to such indemnified party or
         parties to have charge of the defense of such action or such
         indemnified party or parties shall have reasonably concluded that there
         may be one or more legal defenses available to it or them or to other
         indemnified parties which are different from or additional to those
         available to the Company, in any of which events such fees and expenses
         shall be borne by the Company and the Company shall not have the right
         to direct the defense of such action on behalf of the indemnified party
         or parties. Anything in this paragraph to the contrary notwithstanding,
         the Company shall not be liable for any settlement of any such claim or
         action effected without its written consent.

                  (b) The Holder and each holder agrees to indemnify and hold
         harmless the Company, each director of the Company, each officer of the
         Company who shall have signed any registration statement covering the
         Representative's Securities held by the Holder and each holder and each
         other person, if any, who controls the Company within the meaning of
         Section 15 of the Act or Section 20(a) of the Exchange Act, to the same
         extent as the foregoing indemnity from the Company to the Holder and
         each holder in paragraph 9(a), but only with respect to statements or
         omissions, if any, made in any registration statement, preliminary
         prospectus, or final prospectus (as from time to time amended and
         supplemented), or any amendment or supplement thereto, or in any
         application, in reliance upon and in conformity with written
         information furnished to the

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         Company with respect to the Holder and each holder by or on behalf of
         the Holder and each holder expressly for inclusion in any such
         registration statement, preliminary prospectus, or final prospectus, or
         any amendment or supplement thereto, or in any application, as the case
         may be. If any action shall be brought against the Company or any other
         person so indemnified based on any such registration statement,
         preliminary prospectus, or final prospectus, or any amendment or
         supplement thereto, or in any application, and in respect of which
         indemnity may be sought against the Holder and each holder pursuant to
         this paragraph 9(b), the Holder and each holder shall have the rights
         and duties given to the Company, and the Company and each other person
         so indemnified shall have the rights and duties given to the
         indemnified parties, by the provisions of paragraph 9(a).

                  (c) To provide for just and equitable contribution, if (i) an
         indemnified party makes a claim for indemnification pursuant to
         paragraph 9(a) or 9(b) (subject to the limitations thereof) but it is
         found in a final judicial determination, not subject to further appeal,
         that such indemnification may not be enforced in such case, even though
         this Agreement expressly provides for indemnification in such case, or
         (ii) any indemnified or indemnifying party seeks contribution under the
         Act, the Exchange Act or otherwise because the indemnification provided
         for in this Section 9 is for any reason held to be unenforceable by the
         Company and the Holder and any holder, then the Company (including for
         this purpose any contribution made by or on behalf of any director of
         the Company, any officer of the Company who signed any such
         registration statement and any controlling person of the Company), as
         one entity, and the Holder and any holder of any of the
         Representative's Securities included in such registration in the
         aggregate (including for this purpose any contribution by or on behalf
         of the Holder or any holder), as a second entity, shall contribute to
         the losses, liabilities, claims, damages and expenses whatsoever to
         which any of them may be subject, on the basis of relevant equitable
         considerations such as the relative fault of the Company and the Holder
         or any such holder in connection with the facts which resulted in such
         losses, liabilities, claims, damages and expenses. The relative fault,
         in the case of an untrue statement, alleged untrue statement, omission
         or alleged omission, shall be determined by, among other things,
         whether such statement, alleged statement, omission or alleged omission
         relates to

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         information supplied by the Company, by the Holder or by any holder of
         Representative's Securities included in such registration, and the
         parties' relative intent, knowledge, access to information and
         opportunity to correct or prevent such statement, alleged statement,
         omission or alleged omission. The Company and the Holder agree that it
         would be unjust and inequitable if the respective obligations of the
         Company and the Holder for contribution were determined by pro rata or
         per capita allocation of the aggregate losses, liabilities, claims,
         damages and expenses (even if the Holder and the other indemnified
         parties were treated as one entity for such purpose) or by any other
         method of allocation that does not reflect the equitable considerations
         referred to in this paragraph 9(c). No person guilty of a fraudulent
         misrepresentation (within the meaning of Section 11 (f) of the Act)
         shall be entitled to contribution from any person who is not guilty of
         such fraudulent misrepresentation. For purposes of this paragraph 9(c),
         each person, if any, who controls the Holder or any holder of any of
         the Representative's Securities within the meaning of Section 15 of the
         Act or Section 20(a) of the Exchange Act and each officer, director,
         partner, employee, agent and counsel of each such person, shall have
         the same rights to contribution as such person and each person, if any,
         who controls the Company within the meaning of Section 15 of the Act or
         Section 20(a) of the Exchange Act, each officer of the Company who
         shall have signed any such registration statement, and each director of
         the Company shall have the same rights to contribution as the Company,
         subject in each case to the provisions of this paragraph 9(c). Anything
         in this paragraph 9(c) to the contrary notwithstanding, no party shall
         be liable for contribution with respect to the settlement of any claim
         or action effected without its written consent. This paragraph 9(c) is
         intended to supersede any right to contribution under the Act, the
         Exchange Act or otherwise.

         10. The securities issued upon exercise of the Representative's Options
shall be subject to a stop transfer order and the certificate or certificates
evidencing any such securities shall bear the following legend or a legend
substantially similar thereto:

         THE SECURITIES REPRESENTED BY THIS CERTIFICATE AND THE SECURITIES
         ISSUABLE UPON EXERCISE HEREOF (THE "SECURITIES") HAVE BEEN REGISTERED
         UNDER THE SECURITIES ACT OF 1933, AS AMENDED, PURSUANT TO A
         REGISTRATION STATEMENT FILED WITH THE SECURITIES AND EXCHANGE
         COMMISSION AND WITH THE SECURITIES ADMINISTRATORS OF

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         CERTAIN STATES UNDER THE SECURITIES ("BLUE SKY") LAWS OF SUCH STATES.
         HOWEVER, NEITHER THE REPRESENTATIVE'S OPTIONS NOR SUCH SECURITIES MAY
         BE SOLD, TRANSFERRED, PLEDGED, OR HYPOTHECATED EXCEPT PURSUANT TO (I) A
         POST-EFFECTIVE AMENDMENT TO SUCH REGISTRATION STATEMENT, (II) A
         SEPARATE REGISTRATION STATEMENT UNDER SUCH ACT, OR (III) AN EXEMPTION
         FROM REGISTRATION UNDER SUCH ACT AND UNDER THE APPLICABLE BLUE SKY
         LAWS.

         11. Upon receipt of evidence satisfactory to the Company of the loss,
theft, destruction or mutilation of any Representative's Option (and upon
surrender of any Representative's Option if mutilated), and upon reimbursement
of the Company's reasonable incidental expenses, the Company shall execute and
deliver to the Holder thereof a new Representative's Option of like date, tenor
and denomination.

         12. The Holder of any Representative's Option shall not have, solely on
account of such status, any rights of a stockholder of the Company, either at
law or in equity, or to any notice of meetings of stockholders or of any other
proceedings of the Company, except as provided in this Representative's Option.

         13. This Representative's Option shall be construed in accordance with
the laws of the State of Colorado, without giving effect to conflict of laws.

Dated: _____________________ , 2002

                                        NATURAL GAS SERVICES GROUP, INC.

                                        By: ___________________________________
                                            Wayne L. Vinson, President
[SEAL]

                                       14
<PAGE>

                               FORM OF ASSIGNMENT

(To be executed by the registered holder if such holder desires to transfer the
attached Representative's Option.)

         FOR VALUE RECEIVED, _______________ hereby sells, assigns and transfers
unto ________________________________ Representative's Option to purchase
_____________ Warrants of Natural Gas Services Group, Inc. (the "Company"),
together with all right, title and interest therein, and does hereby irrevocably
constitute and appoint _______________________ attorney to transfer such
Representative's Option on the books of the Company, with full power of
substitution.

Dated: _______________________________

Signature: ___________________________

Signature Guaranteed:

                                     NOTICE

         The signature on the foregoing Assignment must correspond to the name
as written upon the face of this Representative's Option in every particular,
without alteration or enlargement or any change whatsoever. Signature(s) must be
guaranteed by an eligible guarantor institution which is a participant in a
Securities Transfer Association recognized program.

                                       15
<PAGE>

                              ELECTION TO EXERCISE

             (To be executed by the holder if such holder desires to
                 exercise the attached Representative's Option)

         The undersigned hereby exercises his or its rights to subscribe for
______________ Warrants covered by the within Representative's Option (each as
defined in the within Representative's Option) and tenders payment herewith in
the amount of $______________ in accordance with the terms thereof, and requests
that certificates for such Warrants be issued in the name of, and delivered to:

_______________________________________________________________________________
_______________________________________________________________________________
_______________________________________________________________________________
                   (Print Name, Address and Social Security or
                           Tax Identification Number)

and, if such number of Warrants (or portions thereof) shall not be all the
Warrants covered by the within Representative's Option, that a new
Representative's Option for the balance of the Representative's Options (or
portions thereof) covered by the within Representative's Option be registered in
the name of, and delivered to, the undersigned at the address stated below.

Name: _________________________________________________________________________
                                     (Print)

Address: ______________________________________________________________________

______________________________________________
          (Signature)

Dated: _______________________________________ Signature Guaranteed:

                                     NOTICE

         The signature on the foregoing Assignment must correspond to the name
as written upon the face of this Representative's Option in every particular,
without alteration or enlargement or any change whatsoever. Signature(s) must be
guaranteed by an eligible guarantor institution which is a participant in a
Securities Transfer Association recognized program.<PAGE>

                                                                   Exhibit 10.01

                        NATURAL GAS SERVICES GROUP, INC.
                             1998 STOCK OPTION PLAN

1. Purposes of this Plan. The purposes of this 1998 Stock Option Plan are to
attract and retain the best available personnel for positions of substantial
responsibility, to provide additional incentive to Employees and Consultants and
to promote the success of the Company's business. Options granted hereunder may
be either "incentive stock options," as defined in Section 422 of the Internal
Revenue Code of 1986, as amended, or "nonstatutory stock options," at the
discretion of the Board and as reflected in the terms of the written stock
option agreement.

2. Definitions. As used herein, the following definitions shall apply:

         a. "Board" shall mean the Committee, if one has been appointed, or the
Board of Directors of the Company if no Committee is appointed.

         b. "Code" shall mean the Internal Revenue Code of 1986, as amended.

         c. "Common Stock" shall mean the $0.01 par value common stock of the
Company.

         d. "Company" shall mean Natural Gas Services Group, Inc., a Colorado
corporation.

         e. "Committee" shall mean the Committee appointed by the Board in
accordance with paragraph (a) of Section 4 of this Plan, if one is appointed, or
the Board if no committee is appointed.

         f. "Consultant" shall mean any person who is engaged by the Company or
by any Parent or Subsidiary to render consulting services and is compensated for
such consulting services, but does not include a director of the Company who is
compensated for services as a director only with the payment of a director's fee
by the Company.

         g. "Continuous Status as an Employee" shall mean the absence of any
interruption or termination of service as an Employee. Continuous Status as an
Employee shall not be considered interrupted in the case of sick leave, military
leave, or any other leave of absence approved by the Board, provided that such
leave is for a period of not more than 90 days or reemployment upon the
expiration of such leave is guaranteed by contract or statute.

         h. "Employee" shall mean any person, including officers and directors,
employed by the Company or by any Parent or Subsidiary. The payment of a
director's fee by the Company shall not be sufficient to constitute "employment"
by the Company.

         i. "Incentive Stock Option" shall mean an Option which is intended to
qualify as an incentive stock option within the meaning of Section 422 of the
Code and which shall be clearly identified as such in the written Stock Option
Agreement provided by the Company to each Optionee granted an Incentive Stock
Option under this Plan.

         j. "Non-Employee Director" shall mean a director who:

<PAGE>

                  (i) Is not currently an officer (as defend in Section 16a-1(1)
         of the Securities Exchange Act of 1934, as amended) of the Company or
         of a Parent or Subsidiary or otherwise currently employed by the
         Company or by a Parent or Subsidiary.

                  (ii) Does not receive compensation, either directly or
         indirectly, from the Company or from a Parent or Subsidiary, for
         services rendered as a Consultant or in any capacity other than as a
         director, except for an amount that does not exceed the dollar amount
         for which disclosure would be required pursuant to Item 404(a) of
         Regulation S-K adopted by the United States Securities and Exchange
         Commission.

                  (iii) Does not possess an interest in any other transaction
         for which disclosure would be required pursuant to Item 404(a) of
         Regulation S-K adopted by the United States Securities and Exchange
         Commission.

         k. "Nonstatutory Stock Option" shall mean an Option granted under this
Plan which does not qualify as an Incentive Stock Option and which shall be
clearly identified as such in the written Stock Option Agreement provided by the
Company to each Optionee granted a Nonstatutory Stock Option under this Plan. To
the extent that the aggregate fair market value of Optioned Stock to which
Incentive Stock Options granted under Options to an Employee are exercisable for
the first time during any calendar year (under this Plan and all plans of the
Company or any Parent or Subsidiary) exceeds $100,000, such Options shall be
treated as Nonstatutory Stock Options under this Plan. The aggregate fair market
value of the Optioned Stock shall be determined as of the date of grant of each
Option and the determination of which Incentive Stock Options shall be treated
as qualified incentive stock options under Section 422 of the Code and which
Incentive Stock Options exercisable for the first time in a particular year in
excess of the $100,000 limitation shall be treated as Nonstatutory Stock Options
shall be determined based on the order in which such Options were granted in
accordance with Section 422(d) of the Code.

         l. "Option" shall mean an Incentive Stock Option, a Nonstatutory Stock
Option or both as identified in a written Stock Option Agreement representing
such stock option granted pursuant to this Plan.

         m. "Optioned Stock" shall mean the Common Stock subject to an Option.

         n. "Optionee" shall mean an Employee or other person who is granted an
Option.

         o. "Parent" shall mean a "parent corporation" of the Company, whether
now or hereafter existing, as defined in Section 424(e) of the Code.

         p. "Plan" shall mean this 1998 Stock Option Plan.

         q. "Share" shall mean a share of the Common Stock of the Company, as
adjusted in accordance with Section 11 of this Plan.

                                       2
<PAGE>

         r. "Stock Option Agreement" shall mean the agreement to be entered into
between the Company and each Optionee which shall set forth the terms and
conditions of each Option granted to each Optionee, including the number of
Shares underlying such Option and the exercise price of each Option granted to
such Optionee under such agreement.

         s. "Subsidiary" shall mean a "subsidiary corporation" of the Company,
whether now or hereafter existing, as defined in Section 424(f) of the Code.

3. Stock Subject to this Plan. Subject to the provisions of Section 11 of this
Plan, the maximum aggregate number of Shares which may be optioned and sold
under this Plan is 150,000 shares of Common Stock. The Shares may be authorized,
but unissued, or reacquired Common Stock. If an Option should expire or become
unexercisable for any reason without having been exercised in full, the
unpurchased Shares which were subject thereto shall, unless this Plan shall have
been terminated, become available for future grant under this Plan.

4. Administration of this Plan.

         a. Procedure. This Plan shall be administered by the Board or a
Committee appointed by the Board consisting of two or more Non-Employee
Directors to administer this Plan on behalf of the Board, subject to such terms
and conditions as the Board may prescribe.

                  (i) Once appointed, the Committee shall continue to serve
         until otherwise directed by the Board (which for purposes of this
         paragraph (a)(i) of this Section 4 shall be the Board of Directors of
         the Company). From time to time the Board may increase the size of the
         Committee and appoint additional members thereof, remove members (with
         or without cause) and appoint new members in substitution therefor,
         fill vacancies however caused, or remove all members of the Committee
         and thereafter directly administer this Plan.

                  (ii) Members of the Board who are granted, or have been
         granted, Options may vote on any matters affecting the administration
         of this Plan or the grant of any Options pursuant to this Plan.

         b. Powers of the Board. Subject to the provisions of this Plan, the
Board shall have the authority, in its discretion:

                  (i) To grant Incentive Stock Options, in accordance with
         Section 422 of the Code, and Nonstatutory Stock Options or both as
         provided and identified in a separate written Stock Option Agreement to
         each Optionee granted such Option or Options under this Plan; provided
         however, that in no event shall an Incentive Stock Option and a
         Nonstatutory Stock Option granted to any Optionee under a single Stock
         Option Agreement be subject to a "tandem" exercise arrangement such
         that the exercise of one such Option affects the Optionee's right to
         exercise the other Option granted under such Stock Option Agreement;

                  (ii) To determine, upon review of relevant information and in
         accordance with Section 8(b) of this Plan, the fair market value of the
         Common Stock;

                                       3
<PAGE>

                  (iii) To determine the exercise price per Share of Options to
         be granted, which exercise price shall be determined in accordance with
         Section 8(a) of this Plan;

                  (iv) To determine the Employees or other persons to whom, and
         the time or times at which, Options shall be granted and the number of
         Shares to be represented by each Option;

                  (v) To interpret this Plan;

                  (vi) To prescribe, amend and rescind rules and regulations
         relating to this Plan;

                  (vii) To determine the terms and provisions of each Option
         granted (which need not be identical) and, with the consent of the
         holder thereof, modify or amend each Option;

                  (viii) To accelerate or defer (with the consent of the
         Optionee) the exercise date of any Option, consistent with the
         provisions of Section 7 of this Plan;

                  (ix) To authorize any person to execute on behalf of the
         Company any instrument required to effectuate the grant of an Option
         previously granted by the Board; and

                  (x) To make all other determinations deemed necessary or
         advisable for the administration of this Plan.

         c. Effect of Board's Decision. All decisions, determinations and
interpretations of the Board shall be final and binding on all Optionees and any
other permissible holders of any Options granted under this Plan.

5. Eligibility.

         a. Persons Eligible. Options may be granted to any person selected by
the Board. Incentive Stock Options may be granted only to Employees. An
Employee, who is also a director of the Company, its Parent or a Subsidiary,
shall be treated as an Employee for purposes of this Section 5. An Employee or
other person who has been granted an Option may, if he is otherwise eligible, be
granted an additional Option or Options.

         b. No Effect on Relationship. This Plan shall not confer upon any
Optionee any right with respect to continuation of employment or other
relationship with the Company nor shall it interfere in any way with his right
or the Company's right to terminate his employment or other relationship at any
time.

6. Term of Plan. This Plan became effective on December 18, 1998. It shall
continue in effect until December 17, 2008, unless sooner terminated under
Section 13 of this Plan.

7. Term of Option. The term of each Option shall be 10 years from the date of
grant thereof or such shorter term as may be provided in the Stock Option
Agreement. However, in the case of an Option granted to an Optionee who, at the
time the Option is granted, owns stock

                                       4
<PAGE>

representing more than 10% of the total combined voting power of all classes of
stock of the Company or any Parent or Subsidiary, if the Option is an Incentive
Stock Option, the term of the Option shall be five years from the date of grant
thereof or such shorter time as may be provided in the Stock Option Agreement.

8. Exercise Price and Consideration.

         a. Exercise Price. The per Share exercise price for the Shares to be
issued pursuant to exercise of an Option shall be such price as is determined by
the Board, but the per Share exercise price under an Incentive Stock Option
shall be subject to the following:

                  (i) If granted to an Employee who, at the time of the grant of
         such Incentive Stock Option, owns stock representing more than 10% of
         the voting power of all classes of stock of the Company or any Parent
         or Subsidiary, the per Share exercise price shall not be less than 110%
         of the fair market value per Share on the date of grant.

                  (ii) If granted to any other Employee, the per Share exercise
         price shall not be less than 140% of the fair market value per Share on
         the date of grant.

         b. Determination of Fair Market Value. The fair market value per Share
on the date of grant shall be determined as follows:

                  (i) If the Common Stock is listed on the New York Stock
         Exchange, the American Stock Exchange or such other securities exchange
         designated by the Board, or admitted to unlisted trading privileges on
         any such exchange, or if the Common Stock is quoted on a National
         Association of Securities Dealers, Inc. system that reports closing
         prices, the fair market value shall be the closing price of the Common
         Stock as reported by such exchange or system on the day the fair market
         value is to be determined, or if no such price is reported for such
         day, then the determination of such closing price shall be as of the
         last immediately preceding day on which the closing price is so
         reported;

                  (ii) If the Common Stock is not so listed or admitted to
         unlisted trading privileges or so quoted, the fair market value shall
         be the average of the last reported highest bid and the lowest asked
         prices quoted on the National Association of Securities Dealers, Inc.
         Automated Quotations System or, if not so quoted, then by the National
         Quotation Bureau, Inc. on the day the fair market value is determined;
         or

                  (iii) If the Common Stock is not so listed or admitted to
         unlisted trading privileges or so quoted, and bid and asked prices are
         not reported, the fair market value shall be determined in such
         reasonable manner as may be prescribed by the Board.

         c. Consideration and Method of Payment. The consideration to be paid
for the Shares to be issued upon exercise of an Option, including the method of
payment, shall be determined by the Board and may consist entirely of cash,
check, other shares of Common Stock having a fair market value on the date of
exercise equal to the aggregate exercise price of the Shares as to which said
Option shall be exercised, or any combination of such methods of payment, or
such other consideration and method of payment for the issuance of Shares to the
extent permitted under the Colorado Business Corporation Act.

                                       5
<PAGE>

9. Exercise of Option.

         a. Procedure for Exercise: Rights as a Shareholder. Any Option granted
hereunder shall be exercisable at such times and under such conditions as
determined by the Board, including performance criteria with respect to the
Company and/or the Optionee, and as shall be permissible under the terms of this
Plan.

         In the sole discretion of the Board, at the time of the grant of an
Option or subsequent thereto but prior to the exercise of an Option, an Optionee
may be provided with the right to exchange, in a cashless transaction, all or
part of the Option for Common Stock of the Company on terms and conditions
determined by the Board.

         An Option may not be exercised for a fraction of a Share.

         An Option shall be deemed to be exercised when written notice of such
exercise has been given to the Company in accordance with the terms of the Stock
Option Agreement by the person entitled to exercise the Option and full payment
for the Shares with respect to which the Option is exercised has been received
by the Company. Full payment, as authorized by the Board, may consist of a
consideration and method of payment allowable under Section 8(c) and this
Section 9(a) of this Plan. Until the issuance (as evidenced by the appropriate
entry on the books of the Company or of the duly authorized transfer agent of
the Company) of the stock certificate evidencing such Shares, no right to vote
or receive dividends or any other rights as a shareholder shall exist with
respect to the Optioned Stock, notwithstanding the exercise of the Option. No
adjustment will be made for a dividend or other right for which the record date
is prior to the date the stock certificate is issued, except as provided in
Section 11 of this Plan.

         Exercise of an Option in any manner shall result in a decrease in the
number of Shares which thereafter may be available, both for purposes of this
Plan and for sale under the Option, by the number of Shares as to which the
Option is exercised.

         b. Termination of Status as an Employee. In the case of an Incentive
Stock Option, if any Employee ceases to serve as an Employee, he may, but only
within such period of time not exceeding three months as is determined by the
Board at the time of grant of the Option after the date he ceases to be an
Employee of the Company, exercise his Option to the extern that he was entitled
to exercise it at the date of such termination. To the extern that he was not
entitled to exercise the Option at the date of such termination, or if he does
not exercise such Option (which he was entitled to exercise) within the time
specified herein, the Option shall terminate.

         c. Disability of Optionee. In the case of an Incentive Stock Option,
notwithstanding the provisions of Section 9(b) above, in the event an Employee
is unable to continue his employment with the Company as a result of his total
and permanent disability (as defined in Section 22(e)(3) of the Code), he may,
but only within such period of time not exceeding 12 months as is determined by
the Board at the time of grant of the Option from the date of termination,
exercise his Option to the extent he was entitled to exercise it at the date of
such termination. To the extent that he was not entitled to exercise the Option
at the date of termination, or if he does not exercise such Option (which he was
entitled to exercise) within the time specified herein, the Option shall
terminate.

                                       6
<PAGE>

         d. Death of Optionee. In the case of an Incentive Stock Option, in the
event of the death of the Optionee:

                  (i) During the term of the Option if the Optionee was at the
         time of his death an Employee and had been in Continuous Status as an
         Employee or Consultant since the date of grant of the Option, the
         Option may be exercised, at any time within 12 months following the
         date of death, by the Optionee's estate or by a person who acquired the
         right to exercise the Option by bequest or inheritance, but only to the
         extent that the right to exercise would have accrued had the Optionee
         continued living and remained in Continuous Status as an Employee 12
         months after the date of death; or

                  (ii) Within such period of time not exceeding three months as
         is determined by the Board at the time of grant of the Option after the
         termination of Continuous Status as an Employee, the Option may be
         exercised, at any time within 12 months following the date of death, by
         the Optionee's estate or by a person who acquired the right to exercise
         the Option by bequest or inheritance, but only to the extent that the
         right to exercise had accrued at the date of termination.

10. Nontransferability of Options. Unless permitted by the Code, in the case of
an Incentive Stock Option, the Option may not be sold, pledged, assigned,
hypothecated, transferred, or disposed of in any manner other than by will or by
the laws of descent and distribution and may be exercised, during the lifetime
of the Optionee, only by the Optionee.

11. Adjustments Upon Changes in Capitalization or Merger. Subject to any
required action by the shareholders of the Company, the number of Shares covered
by each outstanding Option, and the number of Shares which have been authorized
for issuance under this Plan but as to which no Options have yet been granted or
which have been returned to this Plan upon cancellation or expiration of any
Option, as well as the price per Share covered by each such outstanding Option,
shall be proportionately adjusted for any increase or decrease in the number of
issued Shares resulting from a stock split, reverse stock split, stock dividend,
combination or reclassification of the Common Stock, or any other increase or
decrease in the number of issued shares of Common Stock effected without receipt
of consideration by the Company; provided, however, that conversion of any
convertible securities of the Company shall not be deemed to have been "effected
without receipt of consideration." Such adjustment shall be made by the Board,
whose determination in that respect shall be final, binding and conclusive.
Except as expressly provided herein, no issuance by the Company of shares of
stock of any class, or securities convertible into shares of stock of any class,
shall affect, and no adjustment by reason thereof shall be made with respect to,
the number or price of Shares subject to an Option.

         In the event of the proposed dissolution or liquidation of the Company,
the Option will terminate immediately prior to the consummation of such proposed
action, unless otherwise provided by the Board. The Board may, in the exercise
of its sole discretion in such instances, declare that any Option shall
terminate as of a date fixed by the Board and give each Optionee the right to
exercise his Option as to all or any part of the Optioned Stock, including
Shares as to which the Option would not otherwise be exercisable. In the event
of the proposed sale of all or substantially all of the assets of the Company,
or the merger of the Company with or into

                                       7
<PAGE>

another entity in a transaction in which the Company is not the survivor, the
Option shall be assumed or an equivalent option shall be substituted by such
successor corporation or a parent or subsidiary of such successor corporation,
unless the Board determines, in the exercise of its sole discretion and in lieu
of such assumption or substitution, that the Optionee shall have the right to
exercise the Option as to all of the Optioned Stock, including Shares as to
which the Option would not otherwise be exercisable. If the Board makes an
Option fully exercisable in lieu of assumption or substitution in the event of
such a merger or sale of assets, the Board shall notify the Optionee that the
Option shall be fully exercisable for a period of 30 days from the date of such
notice, and the Option will terminate upon the expiration of such period.

12. Time of Granting Options. The date of grant of an Option shall, for all
purposes, be the date on which the Board makes the determination granting such
Option. Notice of the determination shall be given to each Employee or other
person to whom an Option is so granted within a reasonable time after the date
of such grant. Within a reasonable time after the date of the grant of an
Option, the Company shall enter into and deliver to each Employee or other
person granted such Option a written Stock Option Agreement as provided in
Sections 2(r) and 16 hereof, setting forth the terms and conditions of such
Option and separately identifying the portion of the Option which is an
Incentive Stock Option and/or the portion of such Option which is a Nonstatutory
Stock Option.

13. Amendment and Termination of this Plan.

         a. Amendment and Termination. The Board may amend or terminate this
Plan from time to time in such respects as the Board may deem advisable;
provided that, the following revisions or amendments shall require approval of
the shareholders of the Company in the manner described in Section 17 of this
Plan:

                  (i) An increase in the number of Shares subject to this Plan
         above 400,000 Shares, other than in connection with an adjustment under
         Section 11 of this Plan;

                  (ii) Any change in the designation of the class of Employees
         eligible to be granted Incentive Stock Options; or

                  (iii) Any material amendment under this Plan that would have
         to be approved by the shareholders of the Company for the Board to
         continue to be able to grant Incentive Stock Options under this Plan.

         b. Effect of Amendment or Termination. Any such amendment or
termination of this Plan shall not affect Options already granted and such
Options shall remain in full force and effect as if this Plan had not been
amended or terminated, unless mutually agreed otherwise between the Optionee and
the Board, which agreement must be in writing and signed by the Optionee and the
Company.

14. Conditions Upon Issuance of Shares. Shares shall not be issued pursuant to
the exercise of an Option unless the exercise of such Option and the issuance
and delivery of such Shares pursuant thereto shall comply with all relevant
provisions of law, including, without limitation, the Securities Act of 1933, as
amended, the Securities Exchange Act of 1934, as amended, the rules and
regulations promulgated thereunder, applicable state securities laws, and the

                                       8
<PAGE>

requirements of any stock exchange upon which the Shares may then be listed, and
shall be further subject to the approval of legal counsel for the Company with
respect to such compliance.

         As a condition to the existence of an Option, the Company may require
the person exercising such Option to represent and warrant at the time of any
such exercise that the Shares are being purchased only for investment and
without any present intention to sell or distribute such Shares and such other
representations and warranties which in the opinion of legal counsel for the
Company, are necessary or appropriate to establish an exemption from the
registration requirements under applicable federal and state securities laws
with respect to the acquisition of such Shares.

15. Reservation of Shares. The Company, during the term of this Plan, will at
all times reserve and keep available such number of Shares as shall be
sufficient to satisfy the requirements of this Plan. Inability of the Company to
obtain authority from any regulatory body having jurisdiction, which authority
is deemed by the Company's legal counsel to be necessary for the lawful issuance
and sale of any Share hereunder, shall relieve the Company of any liability
relating to the failure to issue or sell such Shares as to which such requisite
authority shall not have been obtained.

16. Stock Option Agreement. Each Option granted to an Employee or other persons
shall be evidenced by a written Stock Option Agreement in such form as the Board
shall approve.

17. Shareholder Approval. Continuance of this Plan shall be subject to approval
by the shareholders of the Company on or before December 17, 1999. Such
shareholder approval and any shareholder approval required under Section 13 of
this Plan, may be obtained at a duly held shareholders meeting if the votes cast
in favor of the approval exceed the votes cast opposing the approval, or by
unanimous written consent of the shareholders in accordance with the provisions
of the Colorado General Corporation Act.

18. Information to Optionees. The Company shall provide to each Optionee, during
the period for which such Optionee has one or more Options outstanding, copies
of all annual reports and other information which are provided to all
shareholders of the Company. The Company shall not be required to provide such
information if the issuance of Options under this Plan is limited to key
employees whose duties in connection with the Company assure their access to
equivalent information.

19. Gender. As used herein, the masculine, feminine and neuter genders shall be
deemed to include the others in all cases where they would so apply.

20. CHOICE OF LAW. ALL QUESTIONS CONCERNING THE CONSTRUCTION, VALIDITY AND
INTERPRETATION OF THIS PLAN AND THE INSTRUMENTS EVIDENCING OPTIONS WILL BE
GOVERNED BY THE INTERNAL LAW, AND NOT THE LAW OF CONFLICTS, OF THE STATE OF
COLORADO.

                                       9
<PAGE>

         IN WITNESS WHEREOF, the Company has caused its duly authorized officer
to execute this Plan effective as of December 18, 1998.

                                         NATURAL GAS SERVICES GROUP, INC.,
                                         a Colorado corporation

                                         By: /s/ Burnace J. Boles, Jr.
                                             ---------------------------------
                                             Burnace J. Boles, Jr., President

                                       10

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