Document:

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                                                                   Exhibit 10.11

                        FIRST AMENDMENT TO LOAN AGREEMENT

         THIS FIRST AMENDMENT TO LOAN AGREEMENT (this "Amendment") is made and
entered into as of this 20th day of December, 2001, by and among THE CIT
GROUP/BUSINESS CREDIT, INC., a New York corporation (hereinafter "CITBC"), in
its individual capacity as a Lender and as Agent for the Lenders hereinafter
named (hereinafter the "AGENT"), Foothill Capital Corporation, a California
corporation ("FCC"), and any other party hereafter becoming a Lender pursuant to
Section 12.4(b) of the Loan Agreement (as hereinafter defined), each
individually sometimes referred to as a "LENDER" and, collectively, the
"LENDERS"), GREY WOLF DRILLING COMPANY L.P., a Texas limited partnership (the
"BORROWER"), GREY WOLF, INC., a Texas corporation (the "PARENT"), GREY WOLF
HOLDINGS COMPANY, a Nevada corporation ("HOLDINGS"), GREY WOLF LLC, a Louisiana
limited liability company ("GWLLC"), DI ENERGY, INC., a Texas corporation
("ENERGY"), GREY WOLF INTERNATIONAL, INC., a Texas corporation
("INTERNATIONAL"), DI/PERFENSA, INC., a Texas corporation ("PERFENSA"), MURCO
DRILLING CORP., a Delaware corporation ("MURCO") (Parent, Holdings, GWLLC,
Energy, International, Perfensa and Murco are referred to collectively herein as
the "GUARANTORS").

                                    RECITALS

         A. WHEREAS, pursuant to the terms and subject to the conditions of that
certain Loan Agreement dated as of January 14, 1999 between the parties hereto
(such Loan Agreement, as the same is hereby amended and may hereafter be amended
from time to time, being hereinafter referred to as the "Loan Agreement"), the
Borrower was granted a $50,000,000 revolving line of credit which included a
letter of credit facility;

         B. WHEREAS, the indebtedness of the Borrower to the Lenders is
currently evidenced by that certain Revolving Note dated January 14, 1999 (the
"Existing Revolving Note"), executed by the Borrower and payable to CITBC as
Agent for the benefit of the Lenders;

         C. WHEREAS, payment of the Obligations of the Borrower are supported by
the guarantees of the Guarantors contained in Section 13 of the Loan Agreement;

         D. WHEREAS, to secure, in part, the indebtedness under the Loan
Agreement and the Existing Revolving Note (and all renewals, extensions,
modifications and/or rearrangements thereof and in connection therewith) and all
other indebtedness, liabilities and obligations of the Borrower and the
Guarantors to the Agent for the benefit of the Lenders, then existing or
thereafter arising, (i) the Borrower and the Guarantors have heretofore executed
in favor of the Agent certain Credit Documents (as defined in the Loan
Agreement), including, without limitation, the Security Documents (as defined in
the Loan Agreement), which Credit Documents shall continue as amended in
connection herewith in full force and effect upon the execution of this
Amendment, all of the Credit Documents to continue to secure the payment by the
Borrower and the Guarantors of the Obligations (as defined in the Loan
Agreement) all as more fully set forth therein and herein;
<PAGE>
         E. WHEREAS, the Borrower has requested and, pursuant to the terms and
subject to the conditions hereof and in connection herewith, the Agent and the
Lenders have agreed to increase the amount of the Total Revolving Loan
Commitment (as defined in the Loan Agreement) to $75,000,000, and accept the
Revolving Note (as herein defined) in replacement and substitution (but not
extinguishment) of the Existing Revolving Note;

         F. WHEREAS, in furtherance of the foregoing and to evidence the
agreements of the parties hereto in relation thereto the parties hereto desire
to amend the Loan Agreement as hereinafter provided;

         NOW, THEREFORE, in consideration of the premises herein contained and
other good and valuable consideration, the receipt and sufficiency of which are
hereby acknowledged, the Borrower, the Guarantors, the Agent and the Lenders,
intending to be legally bound, agree as follows:

                                    AGREEMENT

                                   ARTICLE I

                                   DEFINITIONS

         1.01 Capitalized terms used in this Amendment are defined in the Loan
Agreement, as amended hereby, unless otherwise stated.

                                   ARTICLE II

                          AMENDMENTS TO LOAN AGREEMENT

         Effective as of the respective date herein indicated, the Loan
Agreement is hereby amended as follows:

         2.01 AMENDMENT AND RESTATEMENT OF DEFINITION OF "AVAILABILITY
RESERVES". Effective as of the date of execution of this Amendment, the
definition of "Availability Reserves" set forth in Section 10 of the Loan
Agreement is amended and restated to read in its entirety as follows:

         " `Availability Reserve' shall mean the sum of (a) three (3) months
         rental payments on all of the Borrower's leased premises for which the
         Borrower has not delivered to the Agent a landlord's waiver (in form
         and substance satisfactory to Agent in the exercise of its reasonable
         business judgment), provided that such amount shall be adjusted from
         time to time hereafter upon (i) delivery to the Agent of any such
         acceptable waiver, (ii) the opening or closing of a Collateral storage
         location and/or (iii) any change in rental payment and/or storage
         charge and (b) an amount equal to any and all past due storage charges
         with respect to all warehouse locations at which Collateral may be
         located, provided that the Borrower shall promptly advise the Agent of
         all such amounts and, upon request by the Agent, provide a report to
         the Agent with respect thereto, and (c)

<PAGE>
         such other reserves as Agent deems necessary in its reasonable judgment
         as a result of (x) negative forecasts and/or trends in the business,
         industry, prospects, profits, operations or financial condition of the
         Parent and its Subsidiaries, taken as a whole, or (y) other issues,
         circumstances or facts that could otherwise negatively impact the
         business, prospects, profits, operations, industry, financial condition
         or assets of the Parent and its Subsidiaries, taken as a whole."

         2.02 AMENDMENT AND RESTATEMENT OF DEFINITION OF "CONSOLIDATED DEBT
SERVICE". Effective as of the date of execution of this Amendment, the
definition of "Consolidated Debt Service" set forth in Section 10 of the Loan
Agreement is amended and restated to read in its entirety as follows:

         " `Consolidated Debt Service' means the sum of the interest expense
         (excluding amortization of deferred loan costs), dividends, income
         taxes paid in cash, principal payments on long-term debt (not including
         Revolving Loans or the Excluded Payments) and principal payments on
         Capitalized Lease Obligations of the Parent and its Subsidiaries on a
         consolidated basis."

         2.03 AMENDMENT AND RESTATEMENT OF DEFINITION OF "EARLY TERMINATION
FEE". Effective as of the date of execution of this Amendment, the definition of
"Early Termination Fee" set forth in Section 10 of the Loan Agreement is amended
and restated to read in its entirety as follows:

         " `Early Termination Fee' shall (i) mean the fee the Agent is entitled
         to charge the Borrower in the event that the Borrower voluntarily
         terminates the Revolving Credit Commitment set forth in this Agreement
         on a date prior to the Final Maturity Date; and (ii) be equal to (w) to
         $350,000 if the Early Termination Date occurs prior to four (4) years
         after the Effective Date, (x) $250,000 if the Early Termination Date
         occurs on or after four (4) years after the Effective Date but prior to
         five (5) years after the Effective Date, (y) $150,000 if the Early
         Termination Date occurs on or after five (5) years after the Effective
         Date but prior to six (6) years after the Effective Date, and (z)
         $100,000 if the Early Termination Date occurs on and after six (6)
         years after the Effective Date but prior to the Final Maturity Date."

         2.04 AMENDMENT AND RESTATEMENT OF DEFINITION OF "FINAL MATURITY DATE".
Effective as of the date of execution of this Amendment, the definition "Final
Maturity Date" set forth in Section 10 of the Loan Agreement is amended and
restated to read in its entirety as follows:

         " `Final Maturity Date' shall mean January 14, 2006, provided that,
         unless otherwise terminated in accordance with this Agreement, such
         date shall be automatically extended to (but excluding) the next
         following Anniversary Date in 2007 and thereafter from Anniversary Date
         to (but excluding) the next following Anniversary Date, until the
         Credit Documents are terminated on any Anniversary Date upon sixty (60)
         days prior written notice from the Agent to the Borrower."
<PAGE>
         2.05 AMENDMENT AND RESTATEMENT OF DEFINITION OF "TOTAL REVOLVING LOAN
COMMITMENT". Effective as of the date of execution of this Amendment, the
definition of "Total Revolving Loan Commitment" set forth in Section 10 of the
Loan Agreement is amended and restated to read in its entirety as follows:

         " `Total Revolving Loan Commitment' shall mean the sum of the Revolving
Loan Commitments of each of the Lenders it being understood that the Total
Revolving Loan Commitment shall be $75,000,000."

         2.06 NEW DEFINITIONS. Effective as of the date of execution of this
Amendment, Section 10 of the Loan Agreement is amended by adding thereto the
following new definitions, to be inserted in appropriate alphabetical order:

         "`Excluded Payments' means the Permitted Prepayments, and the Permitted
         Parent Common Stock Acquisitions made by Parent.

         `Permitted Account Sales' means the sales by the Borrower to Holdings
         of all of Borrower's accounts which exist as of December 31, 2001 and
         at the end of each fiscal quarter thereafter as long as (a) such sales
         are made no more often than once each fiscal quarter of Borrower and
         (b) no Default or Event of Default exists immediately before and after
         the completion of any such sale; provided, however, the Credit Parties
         understand and agree that the security interests granted by Borrower to
         the Agent for the benefit of the Lenders pursuant to the Security
         Documents in the accounts so transferred shall remain in full force and
         effect and perfected to at least the same extent as in effect
         immediately prior to such transfer; . `Permitted Parent Common Stock
         Acquisitions' means the purchase by Parent of up to $50,000,000 of
         Parent Common Stock during the period from October 11, 2001 through and
         including October 15, 2002; provided, however, the total amount of
         Permitted Parent Common Stock Acquisitions and the Permitted
         Prepayments allowable under clause (a) of the definition thereof may
         not in the aggregate exceed $50,000,000.

         `Permitted Prepayments' means (a) the prepayment in an amount not to
         exceed $50,000,000 of the Indebtedness evidenced by (i) the Parent's
         Senior Notes due 2007 issued in 1997, in the aggregate principal amount
         of $175,000,000, and (ii) the Parent's Senior Notes due 2007 issued in
         1998 in the aggregate principal amount of $75,000,000; provided,
         however, the total amount of the Permitted Prepayments under this
         clause (a) and the Permitted Parent Common Stock Acquisitions may not
         in the aggregate exceed $50,000,000, (b) any Permitted Refinancing, and
         (c) the prepayment of all or any part of the Indebtedness evidenced by
         (i) the Parent's Senior Notes due 2007 issued in 1997, in the aggregate
         principal amount of $175,000,000, and (ii) the Parent's Senior Notes
         due 2007 issued in 1998 in the aggregate principal amount of
         $75,000,000 as long as the funds used to prepay such Indebtedness are
         from the proceeds of the sale of additional equity interests in the
         Parent.

<PAGE>
         `Permitted Refinancing' means a refinancing of all of the Indebtedness
         evidenced by (i) the Parent's Senior Notes due 2007 issued in 1997, in
         the aggregate principal amount of $175,000,000, and (ii) the Parent's
         Senior Notes due 2007 issued in 1998 in the aggregate principal amount
         of $75,000,000 (either with the same payees or different financing
         sources), including a restructure or restatement of such existing
         Indebtedness or a new loan to repay such existing Indebtedness, so long
         as (a) the terms of the refinanced Indebtedness are not materially more
         favorable to the payee(s) and are not less favorable to the Lenders
         than the existing Indebtedness which was refinanced, (b) no Default or
         Event of Default will exist immediately after the completion of such
         refinancing, and (c) such refinancing Indebtedness is subordinated in
         right of payment to the Obligations at least to the same extent as the
         Indebtedness being refinanced."

         2.07 AMENDMENT AND RESTATEMENT OF CAUSES (4) AND (5) OF SECTION 7.15 OF
THE LOAN AGREEMENT. Effective as of the date of execution of this Amendment,
clauses (4) and (5) in Section 7.15 of the Loan Agreement are amended and
restated to read in its entirety as follows:

         "(4) immediately prior to such sale, exchange or relocation, and after
         giving effect thereto, the sum of the aggregate outstanding principal
         amount of Revolving Loans plus the Letter of Credit Outstandings on
         such date is less than the lesser of (i) $75,000,000 or (ii) 25% of the
         Orderly Liquidation Value of the Domestic Rigs as determined by the
         appraisal described in subclause (6) below or, at the Agent's option,
         by the then most recent Appraisal of Orderly Liquidation Value; (5) the
         Orderly Liquidation Value of the Domestic Rigs that will continue to
         constitute Collateral in which the Agent for the benefit of the Lenders
         has a first priority security interest and Lien, after giving effect to
         the proposed release, equals or exceeds $300,000,000 in the aggregate,
         as determined by the appraisal described in subclause (6) below or, at
         the Agent's option, by the then most recent Appraisal of Orderly
         Liquidation Value;"

         2.08 NEW SECTION 8.2(n) OF THE LOAN AGREEMENT. Effective as of the date
of execution of this Amendment, a new Section 8.2(n) is hereby added to the Loan
Agreement to read in its entirety as follows:

         "(n) Permitted Account Sales."

         2.09 NEW SECTION 8.5(j) OF THE LOAN AGREEMENT. Effective as of the date
of execution of this Amendment, a new Section 8.5(j) is hereby added to the Loan
Agreement to read in its entirety as follows:

         "(j) The Permitted Parent Common Stock Acquisitions."

         2.10 AMENDMENT AND RESTATEMENT OF SECTION 8.6 OF THE LOAN AGREEMENT.
Effective as of the date of execution of this Amendment, the parenthetical
phrase "(other than a redemption of up to $306,000 of the Series A Stock)" set
forth in Section 8.6 of the Loan Agreement is amended and restated to read in
its entirety as follows:
<PAGE>
         "(other than a redemption of up to $306,000 of the Series A Stock and
         the Permitted Parent Common Stock Acquisitions)"

         2.11 AMENDMENT AND RESTATEMENT OF SECTION 8.8 OF THE LOAN AGREEMENT.
Effective as of the date of execution of this Amendment, Section 8.8 of the Loan
Agreement is hereby amended and restated to read in its entirety as follows:

         "The Borrower will not permit the Orderly Liquidation Value of its
         Qualified Domestic Rigs (including Domestic Rigs stored in inventory)
         and Mobile Rigs in which the Agent for the benefit of the Lenders has a
         first priority perfected security interest and Lien under the Security
         Documents and which are subject to no other Lien to be less than
         $225,000,000 at any time (based upon the Orderly Liquidation Value
         thereof as set forth in the then most recent Appraisal of Orderly
         Liquidation Value provided to or obtained by the Agent)."

         2.12 AMENDMENT AND RESTATEMENT OF SECTION 8.10 OF THE LOAN AGREEMENT.
Effective as of the date of execution of this Amendment, clause (i) set forth in
Section 8.10 of Loan Agreement is hereby amended and restated to read in its
entirety as follows:

         "(i) make (or give any notice in respect of) any voluntary or optional
         payment or prepayment on or redemption or acquisition for value of
         (including, without limitation, by way of depositing with the trustee
         with respect thereto or any other Person money or securities before due
         for the purpose of paying when due) any Indebtedness (including any
         Existing Indebtedness) other than Permitted Prepayments;"

         2.13 AMENDMENT AND RESTATEMENT OF SECTION 12.10 OF THE LOAN AGREEMENT.
Effective as of the date of execution of this Amendment, Section 12.10 of the
Loan Agreement is amended and restated in its entirety as follows:

         "This Agreement shall become effective on January 14, 1999 (the
"Effective Date")."

         2.14 REVOLVING LOAN COMMITMENT. Effective as of the date of execution
of this Amendment, the Revolving Loan Commitment for each Lender will be the
amount set forth under each Lender's name of the signature page hereof.

         2.15 AMENDMENT AND RESTATEMENT OF EXHIBIT A TO THE LOAN AGREEMENT.
Effective as of the date of execution of this Amendment, Exhibit B to the Loan
Agreement is amended and restated in its entirety as set forth on Exhibit A
attached hereto.

                                  ARTICLE III

                              CONDITIONS PRECEDENT

         3.01 CONDITIONS TO EFFECTIVENESS. The effectiveness of this Amendment
is subject to the satisfaction of the following conditions precedent in a manner
satisfactory to Agent, unless specifically waived in writing by Agent:
<PAGE>
                  (a) Agent shall have received each of the following, each in
         form and substance satisfactory to Agent, in its sole discretion, and,
         where applicable, each duly executed by each party thereto, other than
         Agent:

                           (i) This Amendment, duly executed by the Borrower and
                  the Guarantors;

                           (ii) A Revolving Note in the stated principal amount
                  of $75,000,000 in amendment, substitution and replacement of
                  the Existing Revolving Note duly signed by the Borrower (the
                  "Revolving Note"); and

                           (iii) certified copies of the resolutions of the
                  Board of Directors of each of the Borrower and the Guarantors
                  authorizing the execution, delivery and performance of the
                  Revolving Note, this Amendment and any and all other Credit
                  Documents executed by any of the Borrower or the Guarantors in
                  connection therewith, along with a certificate of incumbency
                  certified by the secretary of each of the Borrower and the
                  Guarantors with specimen signatures of the officers of the
                  Borrower and the Guarantors who are authorized to sign such
                  documents, all in form and substance satisfactory to the
                  Agent; and

                           (iv) All other documents Agent may request with
                  respect to any matter relevant to this Amendment or the
                  transactions contemplated hereby.

                  (b) The representations and warranties contained herein and in
         the Loan Agreement and the other Credit Documents (as defined in the
         Loan Agreement), as each is amended hereby, shall be true and correct
         as of the date hereof, as if made on the date hereof.

                  (c) No Default or Event of Default shall have occurred and be
         continuing, unless such Default or Event of Default has been otherwise
         specifically waived in writing by Agent.

                  (d) All corporate proceedings taken in connection with the
         transactions contemplated by this Amendment and all documents,
         instruments and other legal matters incident thereto shall be
         satisfactory to Agent.

                  (e) Agent's receipt of the fees described in the fee letter
         dated of even date herewith executed by Borrower and Agent.

                                   ARTICLE IV

                  RATIFICATIONS, REPRESENTATIONS AND WARRANTIES

         4.01 RATIFICATIONS. The terms and provisions set forth in this
Amendment shall modify and supersede all inconsistent terms and provisions set
forth in the Loan Agreement and
<PAGE>
the other Credit Documents, and, except as expressly modified and superseded by
this Amendment, the terms and provisions of the Loan Agreement and the other
Credit Documents are ratified and confirmed and shall continue in full force and
effect. The Borrower, Agent and Lenders agree that the Loan Agreement and the
other Credit Documents, as amended hereby, shall continue to be legal, valid,
binding and enforceable in accordance with their respective terms.

         4.02 REPRESENTATIONS AND WARRANTIES. The Borrower and Guarantor (the
"Credit Parties") hereby represent and warrant to Agent and the Lenders that (a)
the execution, delivery and performance of this Amendment and any and all other
Credit Documents executed and/or delivered in connection herewith have been
authorized by all requisite corporate action on the part of the Credit Parties
and will not violate the organizational documents of the Credit Parties; (b) the
Managers or Board of Directors of each of the Credit Parties (or the Board of
Directors of the corporate general partners of any Credit Party that is a
limited partnership) has authorized the execution, delivery and performance of
this Amendment and any and all other Credit Documents executed and/or delivered
in connection herewith; (c) the representations and warranties contained in the
Loan Agreement, as amended hereby, and any other Credit Document are true and
correct on and as of the date hereof and on and as of the date of execution
hereof as though made on and as of each such date; (d) no Default or Event of
Default under the Loan Agreement, as amended hereby, has occurred and is
continuing, unless such Default or Event of Default has been specifically waived
in writing by Agent; (e) the Credit Parties are in full compliance with all
covenants and agreements contained in the Loan Agreement and the other Credit
Documents, as amended hereby; and (f) the Credit Parties have not amended their
(i) Articles (or Certificates) of Incorporation or their Bylaws, if a
corporation, (ii) limited partnership agreement or certificate of limited
partnership, if a limited partnership, since the date of the Loan Agreement, or
(iii) Articles of Organization or operating agreement, if a limited liability
company, except as otherwise disclosed to Agent.

                                   ARTICLE V

                            MISCELLANEOUS PROVISIONS

         5.01 SURVIVAL OF REPRESENTATIONS AND WARRANTIES. All representations
and warranties made in the Loan Agreement or any other Credit Document,
including, without limitation, any document furnished in connection with this
Amendment, shall survive the execution and delivery of this Amendment and the
other Credit Documents, and no investigation by Agent or any closing shall
affect the representations and warranties or the right of Agent to rely upon
them.

         5.02 REFERENCE TO LOAN AGREEMENT. Each of the Loan Agreement and the
other Credit Documents, and any and all other Credit Documents, documents or
instruments now or hereafter executed and delivered pursuant to the terms hereof
or pursuant to the terms of the Loan Agreement, as amended hereby, are hereby
amended so that any reference in the Loan Agreement and such other Credit
Documents to the Loan Agreement shall mean a reference to the Loan Agreement, as
amended hereby.
<PAGE>
         5.03 EXPENSES OF AGENT. As provided in the Loan Agreement, the Borrower
agrees to pay on demand all reasonable costs and expenses incurred by Agent in
connection with the preparation, negotiation, and execution of this Amendment
and the other Credit Documents executed pursuant hereto and any and all
amendments, modifications, and supplements thereto, including, without
limitation, the reasonable costs and fees of Agent's legal counsel, and all
reasonable costs and expenses incurred by Agent in connection with the
enforcement or preservation of any rights under the Loan Agreement, as amended
hereby, or any other Credit Documents, including, without limitation, the
reasonable costs and fees of Agent's legal counsel.

         5.04 SEVERABILITY. Any provision of this Amendment held by a court of
competent jurisdiction to be invalid or unenforceable shall not impair or
invalidate the remainder of this Amendment and the effect thereof shall be
confined to the provision so held to be invalid or unenforceable.

         5.05 SUCCESSORS AND ASSIGNS. This Amendment is binding upon and shall
inure to the benefit of Agent, the Lenders, and the Credit Parties and their
respective successors and assigns, except that the Credit Parties may not assign
or transfer any of their rights or obligations hereunder without the prior
written consent of Agent.

         5.06 COUNTERPARTS. This Amendment may be executed in one or more
counterparts, each of which when so executed shall be deemed to be an original,
but all of which when taken together shall constitute one and the same
instrument.

         5.07 EFFECT OF WAIVER. No consent or waiver, express or implied, by
Agent to or for any breach of or deviation from any covenant or condition by the
Credit Parties shall be deemed a consent to or waiver of any other breach of the
same or any other covenant, condition or duty.

         5.08 HEADINGS. The headings, captions, and arrangements used in this
Amendment are for convenience only and shall not affect the interpretation of
this Amendment.

         5.09 APPLICABLE LAW. THIS AMENDMENT AND ALL OTHER CREDIT DOCUMENTS
EXECUTED PURSUANT HERETO SHALL BE DEEMED TO HAVE BEEN MADE AND TO BE PERFORMABLE
IN AND SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE
STATE OF NEW YORK.

         5.10 FINAL AGREEMENT. THE AGREEMENT AND THE OTHER CREDIT DOCUMENTS,
EACH AS AMENDED HEREBY, REPRESENT THE ENTIRE EXPRESSION OF THE PARTIES WITH
RESPECT TO THE SUBJECT MATTER HEREOF ON THE DATE THIS AMENDMENT IS EXECUTED. THE
LOAN AGREEMENT AND THE OTHER CREDIT DOCUMENTS, AS AMENDED HEREBY, MAY NOT BE
CONTRADICTED BY EVIDENCE OF PRIOR, CONTEMPORANEOUS OR SUBSEQUENT ORAL AGREEMENTS
OF THE PARTIES. THERE ARE NO UNWRITTEN ORAL AGREEMENTS BETWEEN THE PARTIES. NO
MODIFICATION, RESCISSION, WAIVER, RELEASE OR AMENDMENT OF ANY PROVISION OF THIS
AMENDMENT SHALL BE MADE, EXCEPT BY A WRITTEN AGREEMENT SIGNED BY THE CREDIT
PARTIES AND THE AGENT.
<PAGE>
         5.11 FINANCING STATEMENTS. Agent is hereby authorized by each Credit
Parties to file (including pursuant to the applicable terms of the UCC) from
time to time any financing statements, continuations or amendments covering the
Collateral whether or not the signature of any such Credit Party appears
thereon.

         5.12 RELEASE BY BORROWER. THE BORROWER HEREBY ACKNOWLEDGES THAT
BORROWER HAS NO DEFENSE, COUNTERCLAIM, OFFSET, CROSS-COMPLAINT, CLAIM OR DEMAND
OF ANY KIND OR NATURE WHATSOEVER THAT CAN BE ASSERTED TO REDUCE OR ELIMINATE ALL
OR ANY PART OF ITS LIABILITY TO REPAY THE "OBLIGATIONS" OR TO SEEK AFFIRMATIVE
RELIEF OR DAMAGES OF ANY KIND OR NATURE FROM AGENT OR THE LENDERS. THE BORROWER
HEREBY VOLUNTARILY AND KNOWINGLY RELEASE AND FOREVER DISCHARGE AGENT AND THE
LENDERS, AND THEIR RESPECTIVE PREDECESSORS, AGENTS, EMPLOYEES, SUCCESSORS AND
ASSIGNS (THE "RELEASED PARTIES"), FROM ALL POSSIBLE CLAIMS, DEMANDS, ACTIONS,
CAUSES OF ACTION, DAMAGES, COSTS, EXPENSES, AND LIABILITIES WHATSOEVER, KNOWN OR
UNKNOWN, ANTICIPATED OR UNANTICIPATED, SUSPECTED OR UNSUSPECTED, FIXED,
CONTINGENT, OR CONDITIONAL, AT LAW OR IN EQUITY, ORIGINATING IN WHOLE OR IN PART
ON OR BEFORE THE DATE THIS AMENDMENT IS EXECUTED, WHICH THE BORROWER MAY NOW OR
HEREAFTER HAVE AGAINST THE RELEASED PARTIES, IF ANY, AND IRRESPECTIVE OF WHETHER
ANY SUCH CLAIMS ARISE OUT OF CONTRACT, TORT, VIOLATION OF LAW OR REGULATIONS, OR
OTHERWISE, AND ARISING FROM ANY "LOANS", INCLUDING, WITHOUT LIMITATION, ANY
CONTRACTING FOR, CHARGING, TAKING, RESERVING, COLLECTING OR RECEIVING INTEREST
IN EXCESS OF THE HIGHEST LAWFUL RATE APPLICABLE, THE EXERCISE OF ANY RIGHTS AND
REMEDIES UNDER THE LOAN AGREEMENT OR OTHER CREDIT DOCUMENTS, AND NEGOTIATION FOR
AND EXECUTION OF THIS AMENDMENT.

         5.13 RELEASE BY GUARANTORS. Each Guarantor hereby consents to the terms
of this Amendment, confirms and ratifies the terms of the guarantee by such
Guarantor for the benefit of Agent and the other Lenders set forth in Section 13
of the Loan Agreement (each a "Guarantee" and collectively the "Guarantees"),
and acknowledges that such Guarantor's Guarantee is in full force and effect and
ratifies the same and that such Guarantor each has no defense, counterclaim,
set-off or any other claim to diminish such Guarantor's liability under its
Guarantee. EACH GUARANTOR HEREBY VOLUNTARILY AND KNOWINGLY RELEASES AND FOREVER
DISCHARGES THE RELEASED PARTIES, FROM ALL POSSIBLE CLAIMS, DEMANDS, ACTIONS,
CAUSES OF ACTION, DAMAGES, COSTS, EXPENSES, AND LIABILITIES WHATSOEVER, KNOWN OR
UNKNOWN, ANTICIPATED OR UNANTICIPATED, SUSPECTED OR UNSUSPECTED, FIXED,
CONTINGENT, OR CONDITIONAL, AT LAW OR IN EQUITY, ORIGINATING IN WHOLE OR IN PART
ON OR BEFORE THE DATE THIS AMENDMENT IS EXECUTED, WHICH THE GUARANTORS MAY NOW
OR HEREAFTER HAVE AGAINST THE RELEASED PARTIES, IF ANY, AND IRRESPECTIVE OF
WHETHER ANY SUCH CLAIMS ARISE OUT OF CONTRACT, TORT, VIOLATION OF LAW OR
REGULATIONS, OR OTHERWISE, AND ARISING FROM ANY "LOANS",
<PAGE>
INCLUDING, WITHOUT LIMITATION, ANY CONTRACTING FOR, CHARGING, TAKING, RESERVING,
COLLECTING OR RECEIVING INTEREST IN EXCESS OF THE HIGHEST LAWFUL RATE
APPLICABLE, THE EXERCISE OF ANY RIGHTS AND REMEDIES UNDER THE LOAN AGREEMENT OR
OTHER CREDIT DOCUMENTS, AND NEGOTIATION FOR AND EXECUTION OF THIS AMENDMENT.

         IN WITNESS WHEREOF, this Amendment has been executed and is effective
as of the date first above-written.

                                         BORROWER:

                                         GREY WOLF DRILLING COMPANY L.P.

                                         By:  Grey Wolf Holdings Company,
                                              its general partner

                                              By: ______________________________
                                                  David W. Wehlmann
                                                  Senior Vice President and
                                                  Chief Financial Officer

                                         GUARANTORS:

                                         GREY WOLF, INC.

                                              By: ______________________________
                                                  David W. Wehlmann
                                                  Senior Vice President and
                                                  Chief Financial Officer

                                         GREY WOLF HOLDINGS COMPANY

                                              By: ______________________________
                                                  David W. Wehlmann
                                                  Senior Vice President and
                                                  Chief Financial Officer
<PAGE>
                                         GREY WOLF LLC,

                                              By: ______________________________
                                                  David W. Wehlmann
                                                  Senior Vice President and
                                                  Chief Financial Officer

                                         DI ENERGY, INC.

                                              By: ______________________________
                                                  David W. Wehlmann
                                                  Senior Vice President and
                                                  Chief Financial Officer

                                         GREY WOLF INTERNATIONAL, INC.

                                              By: ______________________________
                                                  David W. Wehlmann
                                                  Senior Vice President and
                                                  Chief Financial Officer

                                         DI/PERFENSA, INC.

                                              By: ______________________________
                                                  David W. Wehlmann
                                                  Senior Vice President and
                                                  Chief Financial Officer

                                         MURCO DRILLING CORP.

                                              By: ______________________________
                                                  David W. Wehlmann
                                                  Senior Vice President and
                                                  Chief Financial Officer
<PAGE>
                                         LENDERS:

                                         THE CIT GROUP/BUSINESS CREDIT, INC.
                                         as Agent and Lender

                                         By: ___________________________________
                                         Name: _________________________________
                                         Title: ________________________________

                                         Revolving Loan Commitment:  $40,000,000

                                         FOOTHILL CAPITAL CORPORATION,
                                         as Lender

                                         By: ___________________________________
                                         Name: _________________________________
                                         Title: ________________________________

                                         Revolving Loan Commitment:  $35,000,000
<PAGE>
                                    EXHIBIT A

                                 REVOLVING NOTE

$75,000,000                                                   New York, New York
                                                               December 20, 2001

         FOR VALUE RECEIVED, GREY WOLF DRILLING COMPANY L.P., a Texas limited
partnership (the "Borrower"), hereby promises to pay to The CIT Group/Business
Credit, Inc. or its registered assigns (the "Lender"), in lawful money of the
United States of America in immediately available funds, at the office of The
CIT Group/Business Credit, Inc., as agent (the "Agent"), located at 5420 LBJ
Freeway, Suite 200, Dallas, Texas 75240 on the Final Maturity Date (as defined
in the Agreement referred to below) the principal sum of SEVENTY-FIVE MILLION
DOLLARS ($75,000,000) or, if less, the unpaid principal amount of all Revolving
Loans (as defined in the Agreement) made by the Lender pursuant to the
Agreement.

         The Borrower promises also to pay interest on the unpaid principal
amount hereof in like money at said office from the date hereof until paid at
the rates and at the times provided in Section 1.8 of the Agreement.

         This Note is one of the Revolving Notes referred to in the Loan
Agreement, dated as of January 14, 1999, among the Borrower, each of the
Guarantors party thereto, the lenders from time to time party thereto (including
the Lender), and the Agent (as amended, modified or supplemented from time to
time, the "Agreement") and is issued pursuant to and entitled to the benefits
thereof and of the other Credit Documents (as defined in the Agreement). This
Note is secured by the Security Documents (as defined in the Agreement) and is
entitled to the benefits of the Guarantees (as defined in the Agreement). This
Note is subject to voluntary prepayment and mandatory repayment prior to the
Final Maturity Date, in whole or in part, as provided in the Agreement, and
Revolving Loans may be converted from one Type (as defined in the Agreement)
into another Type to the extent provided in the Agreement.

         In case an Event of Default (as defined in the Agreement) shall occur
and be continuing, the principal of and accrued interest on this Note may become
or be declared to be due and payable in the manner and with the effect provided
in the Agreement.

         The Borrower hereby waives presentment, demand, protest or notice of
any kind in connection with this Note.

         THIS NOTE SHALL BE CONSTRUED IN ACCORDANCE WITH AND BE GOVERNED BY THE
LAW OF THE STATE OF NEW YORK.

This Note is given in amendment, replacement and substitution, but not
extinguishment, of all amounts unpaid under that certain Revolving Note dated
January 14, 1999 payable by the Borrower to the order of The

                                     Page 1
<PAGE>
CIT Group/Business Credit, Inc as Agent for the Lenders (as defined in the
Agreement) in the stated principal amount of $50,000,000.00.

                                            GREY WOLF DRILLING COMPANY L.P.

                                            By:  GREY WOLF HOLDINGS COMPANY,
                                                 as General Partner

                                                 By: ___________________________
                                                     David W. Wehlmann
                                                     Senior Vice President and
                                                     Chief Financial Officer

                                     Page 2<PAGE>

                                                                   Exhibit 10.13

                                 GREY WOLF, INC
               AMENDMENT TO NON-QUALIFIED STOCK OPTION AGREEMENTS
                                  [TPR - FORM]

                                November 13, 2001

         THIS AMENDMENT TO NON-QUALIFIED STOCK OPTION AGREEMENT (this
"Agreement") is by and between Grey Wolf, Inc. (the "Corporation"), a Texas
Corporation, and Thomas P. Richards (the "Optionee"), and is an amendment to all
of those certain Non-Qualified Stock Option Agreements entered into by and
between the Corporation and the Optionee as more particularly described on
Exhibit "A" hereto (the "Original Option Agreements") pursuant to the
Corporation's 1996 Employee Stock Option Plan dated effective July 29, 1996 (the
"Plan").

         WHEREAS, the Corporation granted certain options to Optionee under the
Plan as more particularly described on Exhibit "A" hereto; and

         WHEREAS, the Board of Directors of the Corporation has approved certain
changes to the Original Option Agreements in this Agreement pursuant to that
certain Consent of Directors dated November 13, 2001; and

         WHEREAS, the Corporation and the Optionee deem it desirable, for and in
the best interests of the parties to this Agreement, to modify the Original
Option Agreements as provided herein.

         NOW THEREFORE BE IT RESOLVED, that the Corporation and the Optionee do
hereby agree to amend the Original Option Agreements as follows:

         1. Corporate Proceedings of the Corporation. Section 9(b) and 9(c) of
the Original Option Agreements shall be deleted in their entirety and the
following new Sections 9(b) and 9(c) substituted therefor and new Section 9(f)
shall be added:

                  "9. Corporate Proceedings of the Corporation.

                           (b) If the Corporation merges into or with or
                  consolidates with (such events collectively referred herein as
                  a "Merger") any corporation or corporations and is not the
                  surviving corporation, then the Corporation shall cause the
                  surviving corporation to assume the Option or substitute a new
                  option of the surviving corporation for the Option (with an
                  Exercise Period at least equal to the period remaining until
                  the Expiration Date for the Option). In the event that the
                  Option is assumed or a new option of the surviving corporation
                  is substituted for the Option (i) if, on the effective date of
                  the Merger, the Option is "in the money" the excess of the
                  aggregate fair market value of the shares subject to the
                  Option immediately after such assumption, or the new option
                  immediately after such substitution, over the aggregate
                  Exercise Price of such shares must be, based upon a good faith
                  determination by the Board of Directors of the Corporation,
                  not less than the excess of the aggregate fair market value of
                  the Common Stock subject to the Option
<PAGE>
                  immediately before such substitution or assumption over the
                  aggregate Exercise Price of such Common Stock and (ii) if, on
                  the effective date of the Merger, the Option is "out of the
                  money" the excess of the aggregate Exercise Price of the
                  shares subject to the Option immediately after such
                  assumption, or the new option immediately after such
                  substitution over the fair market value of such shares must
                  be, based upon a good faith determination by the Board of
                  Directors of the Corporation, not more than the excess of the
                  aggregate Exercise Price of the Common Stock subject to the
                  Option immediately before such assumption or substitution over
                  the aggregate fair market value of such Common Stock.

                           (c) In the event of a dissolution or liquidation of
                  the Corporation, the Corporation shall cause written notice of
                  such dissolution or liquidation (and the material terms and
                  conditions thereof) to be delivered to the Optionee at least
                  ten (10) days prior to the proposed effective date (the
                  "Effective Date") of such event. The Optionee shall be
                  entitled to exercise the Option (as to all Option Shares,
                  whether or not the Option is then otherwise exercisable under
                  Section 2) until the Effective Date, or until the Expiration
                  Date if earlier. Any Option which has not been exercised on or
                  before the Effective Date shall terminate.

                           (f) In the event that neither the shares of stock of
                  the Corporation nor shares of stock of the surviving
                  corporation are listed on an established exchange as a result
                  of a "going private" transaction, the Fair Market Value of the
                  Option (as to all Option Shares, whether or not the Option is
                  then exercisable under Section 2) shall be determined as soon
                  as practicable after completion of the "going private"
                  transaction. Optionee shall be paid the Fair Market Value of
                  such Option by cashiers check or wire transfer of immediately
                  available funds within ten (10) days after the determination
                  of such Fair Market Value. The Option shall terminate upon
                  receipt of such payment by the Optionee. For purposes of this
                  Section 9(f), the "Fair Market Value" of the Option purchased
                  shall be determined as follows: (i) If the Optionee and the
                  Corporation can agree on the Fair Market Value of the Option
                  within fifteen (15) days following completion of the going
                  private transaction, the Fair Market Value will be the agreed
                  value of the Option; (ii) If the Optionee and Corporation
                  cannot agree on the Fair Market Value of the Option, the value
                  will be determined as follows: (1) Each party shall, within
                  thirty (30) days following completion of the going private
                  transaction, provide written notice of the appointment of an
                  appraiser to the other party. If the parties appoint the same
                  appraiser or if only one appraiser is timely appointed, then
                  the timely appointed appraiser shall be the only appraiser and
                  shall prepare and deliver the appraised value of the Option
                  taking into consideration the "Black-Scholes" method of
                  valuation of such Option within thirty (30) days following its
                  appointment; (2) If the parties each timely appoint different
                  appraisers, such appraisers shall agree upon a third appraiser
                  within fifteen (15) days following their appointment. If such
                  appraisers cannot agree upon a third appraiser within fifteen
                  (15) days following their appointment, either the Optionee or
                  the Corporation may petition any United States federal
                  district court in the Southern District of Texas to appoint
                  such appraiser; (3) Each appraiser shall complete his
                  appraisal of the Option taking into consideration the
                  "Black-Scholes" method of valuation of such Option and deliver
                  a copy of his written appraisal to the Optionee

                                       2
<PAGE>
                  and the Corporation within thirty (30) days of such
                  appraiser's appointment; (4) If there is more than one
                  appraiser, the Fair Market Value shall be the mathematical
                  average of the two closest appraisals; (5) Each appraiser
                  appointed hereunder shall have been actively involved in the
                  business of valuing and appraising companies in the oil and
                  gas service industry for the five year period immediately
                  preceding the date of appointment; and (6) The parties
                  understand and agree that the value of the Option is dependent
                  upon a valuation of the Corporation and that the appraisers
                  shall have access to the business records, assets and
                  properties of the Corporation as they may reasonably request
                  for the purpose of appraising the value of the Option."

         2. Termination. Section 11 of the Original Option Agreements shall be
deleted in their entirety and the following new Section 11 substituted therefor:

                           "11. Termination. Except as otherwise provided in
                  this Section 11, if the Optionee for any reason whatsoever
                  ceases to be employed by the Corporation, or a parent or
                  subsidiary corporation of the Corporation, and prior to such
                  cessation, the Optionee was employed at all times from the
                  date of the granting of the Option until the date of such
                  cessation, the Option shall be exercisable by the Optionee
                  (whether previously exercisable or not) at any time on or
                  before the Expiration Date. Notwithstanding the foregoing:

                           (a) If the Optionee is terminated for Cause (as
                  defined below), the Option will terminate as to all of the
                  unexercised Option Shares on the thirtieth day following such
                  termination, during which thirty (30) days the Optionee may
                  exercise the Option as to the Option Shares exercisable on or
                  prior to the date of such termination for Cause; provided,
                  however, no unvested Option shall vest during such thirty (30)
                  day period; and

                           (b) If the Optionee's employment is terminated as a
                  result of a voluntary resignation (which is neither a
                  termination without cause nor a constructive termination
                  without cause as described in the Optionee's employment
                  agreement with the Corporation) the Optionee may exercise the
                  Option as to all of the Option Shares as provided above in
                  this Section 11; provided that no unvested Option shall vest
                  as a result of such voluntary resignation or thereafter.

                           For purposes of this Agreement, the term "Cause"
                  shall mean and include (i) chronic alcoholism or controlled
                  substance abuse as determined by a doctor mutually acceptable
                  to the Corporation and the Optionee, (ii) an act of proven
                  fraud or dishonesty on the part of the Optionee with respect
                  to the Corporation or its subsidiaries; (iii) knowing and
                  material failure by the Optionee to comply with material
                  applicable laws and regulations relating to the business of
                  the Corporation or its subsidiaries; (iv) the Optionee's
                  material and continuing failure to perform (as opposed to
                  unsatisfactory performance) his duties to the Corporation
                  except, in each case, where such failure is caused by the
                  illness or other similar incapacity or disability of the
                  Optionee; or (v) conviction of a crime involving moral
                  turpitude or a felony. Prior to the effectiveness of
                  termination for Cause under subclause (i), (ii), (iii) or (iv)
                  above, the Optionee shall be given thirty (30) days prior
                  notice from the

                                       3
<PAGE>
                  Board specifically identifying the reasons which are alleged
                  to constitute Cause hereunder and an opportunity to be heard
                  by the Board in the event Optionee disputes such allegations.

                           Nothing in (a) or (b) shall extend the time for
                  exercising the Option granted pursuant to the Original Option
                  Agreements beyond the Expiration Date."

         3. In all other respect, the terms and provisions of the Original
Option Agreements are hereby reaffirmed by the Corporation and the Optionee.

         IN WITNESS WHEREOF, the parties have executed this Amendment to
Non-Qualified Stock Option Agreements as of the date first above written.

                                  GREY WOLF, INC.

                                  By:
                                     --------------------------------
                                  Name:   STEVEN A. WEBSTER
                                  Title:  CHAIRMAN, COMPENSATION COMMITTEE
                                          BOARD OF DIRECTORS

                                  THOMAS P. RICHARDS

                                  -----------------------------
                                  Title:  PRESIDENT AND CHIEF EXECUTIVE OFFICER

                                        4
<PAGE>
                                   EXHIBIT "A"
                                       TO
                                 GREY WOLF, INC.
               AMENDMENT TO NON-QUALIFIED STOCK OPTION AGREEMENTS

                                NOVEMBER 13, 2001

<TABLE>
<CAPTION>
                                                               NUMBER OF OPTIONS
     OPTIONEE           DATE OF ORIGINAL OPTION AGREEMENTS          GRANTED
     --------           ----------------------------------          -------
<S>                     <C>                                    <C>
Thomas P. Richards            March 5, 1998                         147,700
                              February 15, 1999                     500,000
                              February 24, 2000                     400,000
                              February 9, 2001                      400,000
                                                                    -------
               TOTAL OUTSTANDING                                  1,447,700
</TABLE>

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