1 EXHIBIT 99.2 ASSET PURCHASE AGREEMENT

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EXHIBIT 99.2

ASSET PURCHASE AGREEMENT

BETWEEN

XXXXXXXXX DRILLING COMPANY

AND

CIRCLE R DRILLING, LTD. 1981-A
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TABLE OF CONTENTS

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ARTICLE I

THE ASSET PURCHASE . . . . . . . . . . . . . . . . . . . . . . . 1
SECTION 1.1 The Asset Purchase . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
SECTION 1.2 Purchase Price . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
SECTION 1.3 Closing . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1

ARTICLE II

REPRESENTATIONS AND WARRANTIES OF PDC . . . . . . . . . . . . . . . . . . 2
SECTION 2.1 Organization, Standing and Power . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
SECTION 2.2 Authority; Non-Contravention . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2

ARTICLE III

REPRESENTATIONS AND WARRANTIES OF CIRCLE R . . . . . . . . . . . . . . . . . 2
SECTION 3.1 Organization, Standing and Power . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
SECTION 3.2 Authority; Non-Contravention . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
SECTION 3.3 Title . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
SECTION 3.4 Litigation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
SECTION 3.5 Brokers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
SECTION 3.6 General Partner . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
SECTION 3.7 LIMITATIONS ON REPRESENTATIONS AND WARRANTIES . . . . . . . . . . . . . . . . . . . . . . . . . 4

ARTICLE IV

ADDITIONAL AGREEMENTS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
SECTION 4.1 Fees and Expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
SECTION 4.2 Reasonable Efforts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
SECTION 4.3 PDC Indemnification . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
SECTION 4.4 Circle R, CRD and Xxxxx Xxx Xxxxxxxx Indemnification . . . . . . . . . . . . . . . . . . . . . 5
SECTION 4.5 Notice of Claim . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5

ARTICLE V

CONDITIONS PRECEDENT TO THE ASSET PURCHASE . . . . . . . . . . . . . . . . . 6
SECTION 5.1 Conditions to Each Party's Obligation to Effect the Asset Purchase . . . . . . . . . . . . . . 6

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SECTION 5.2 Conditions to Obligation of Circle R to Effect the Asset Purchase . . . . . . . . . . . . . . . 6
SECTION 5.3 Conditions to Obligations of PDC to Effect the Asset Purchase . . . . . . . . . . . . . . . . . 7

ARTICLE VI

GENERAL PROVISIONS . . . . . . . . . . . . . . . . . . . . . . . 8
SECTION 6.1 Notices . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
SECTION 6.2 Interpretation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
SECTION 6.3 Counterparts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
SECTION 6.4 Entire Agreement; No Third-Party Beneficiaries . . . . . . . . . . . . . . . . . . . . . . . . 11
SECTION 6.5 Governing Law . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
SECTION 6.6 Assignment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
SECTION 6.7 Severability . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
SECTION 6.8 Enforcement of This Agreement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11

ANNEX 1 Description of Drilling Rig and Equipment
EXHIBIT A(I) Non-Competition Agreement of Circle R Drilling, Ltd. 1981-A
EXHIBIT A(II) Non-Competition Agreement of Circle R Drilling, Inc.
EXHIBIT A(III) Non-Competition Agreement of Xxxxx Xxx Xxxxxxxx
EXHIBIT A(IV) Non-Competition Agreement of Xxxxxxxx Drilling Co., Inc.
EXHIBIT B Xxxx of Sale and Assignment

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ASSET PURCHASE AGREEMENT

ASSET PURCHASE AGREEMENT, dated November __, 1997 (this "Agreement"),
among XXXXXXXXX DRILLING COMPANY ("PDC"), a Delaware corporation and a
wholly-owned subsidiary of Xxxxxxxxx Energy, Inc. ("PEC"), and CIRCLE R
DRILLING, LTD. 1981-A, a Louisiana limited partnership ("Circle R").

WITNESSETH:

WHEREAS, Circle R owns one drilling rig and related drilling equipment
(collectively, the "Drilling Rig and Equipment"), all as more particularly
described on Annex 1;

WHEREAS, PDC desires to purchase, and Circle R desires to sell, all of
Circle R's right, title and interest in the Drilling Rig and Equipment (the
"Asset Purchase") for the consideration set forth and provided for herein; and

WHEREAS, PDC, on the one hand, and Circle R, on the other, desire to
make certain representations, warranties and agreements in connection with the
Asset Purchase.

NOW, THEREFORE, in consideration of the premises and the
representations, warranties and agreements herein contained, the parties agree
as follows:

ARTICLE I

THE ASSET PURCHASE

SECTION 1.1 The Asset Purchase. Upon the terms and subject to the
conditions of this Agreement, at the Closing (as defined in Section 1.3 below)
provided herein, PDC shall purchase from Circle R and Circle R shall sell to
PDC, all of Circle R's right, title and interest in and to the Drilling Rig and
Equipment.

SECTION 1.2 Purchase Price. PDC agrees to pay to Circle R at the
Closing a total of $1,460,000 cash (the "Purchase Price") for all of Circle R's
right, title and interest in and to the Drilling Rig and Equipment.

SECTION 1.3 Closing. The closing of the Asset Purchase (the
"Closing") shall take place at 9:00 a.m., local time, on the date of this
Agreement at the offices of PEC in Snyder, Texas or at such other time and
place as PDC and Circle R shall agree.
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ARTICLE II

REPRESENTATIONS AND WARRANTIES OF PDC

PDC represents and warrants to Circle R as follows:

SECTION 2.1 Organization, Standing and Power. PDC is a corporation
duly incorporated, validly existing and in good standing under the laws of the
State of Delaware and has the requisite corporate power and authority to carry
on its business as now being conducted.

SECTION 2.2 Authority; Non-Contravention. PDC has all requisite
power and authority to enter into this Agreement and to consummate the Asset
Purchase. The execution and delivery by PDC of this Agreement and the
consummation by PDC of the Asset Purchase have been duly authorized by all
necessary corporate action on the part of PDC. This Agreement has been duly
executed and delivered by PDC and (assuming the valid authorization, execution
and delivery of this Agreement by Circle R) constitutes a valid and binding
obligation of PDC enforceable against PDC in accordance with its terms, except
to the extent enforceability may be limited by bankruptcy, insolvency,
reorganization, moratorium, fraudulent transfer or other similar laws of
general applicability relating to or affecting the enforcement of creditors'
rights and by the effect of general principles of equity (regardless of whether
enforceability is considered in a proceeding in equity or at law). No filing
or registration with, or authorization, consent or approval of, any domestic
(federal and state), foreign or supranational court, commission, governmental
body, regulatory agency, authority or tribunal (a "Governmental Agency") is
required by or with respect to PDC in connection with the execution and
delivery of this Agreement by PDC or is necessary for the consummation by PDC
of the Asset Purchase and the other transactions contemplated by this
Agreement.

ARTICLE III

REPRESENTATIONS AND WARRANTIES OF CIRCLE R

Circle R represents and warrants to PDC as follows:

SECTION 3.1 Organization, Standing and Power. Circle R is a limited
partnership duly organized, validly existing and in good standing under the
laws of the State of Louisiana and has the requisite power and authority to
carry on its business as now being conducted.

SECTION 3.2 Authority; Non-Contravention. Circle R has all requisite
power and authority to enter into this Agreement and to consummate the Asset
Purchase. This Agreement has been duly executed and delivered by Circle R and
(assuming the valid authorization, execution and delivery of this Agreement by
PDC) constitutes a valid and binding obligation of Circle R enforceable against
it in accordance with its terms, except to the extent enforceability may be
limited by bankruptcy, insolvency, reorganization, moratorium, fraudulent
transfer or other similar laws of general applicability

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relating to or affecting the enforcement of creditors' rights and by the effect
of general principles of equity (regardless of whether enforceability is
considered in a proceeding in equity or at law). The execution and delivery of
this Agreement do not, and the consummation of the Asset Purchase and
compliance with the provisions hereof will not, conflict with, or result in any
violation of, or default (with or without notice or lapse of time, or both)
under, or give rise to a right of termination, cancellation or acceleration of
any obligation which will have an adverse effect on the Drilling Rig and
Equipment or the ownership or operation thereof by PDC after the Closing under,
or result in the creation of any lien, security interest, charge or encumbrance
upon any of the properties or assets of Circle R under, any provision of (i)
the Certificate of Limited Partnership or Agreement of Limited Partnership of
Circle R (true and complete copies of which, as of the date hereof, have been
delivered to PDC), (ii) any loan or credit agreement, note, bond, mortgage,
indenture, lease or other agreement, instrument, permit, concession, franchise
or license applicable to Circle R or (iii) any judgment, order, decree,
statute, law, ordinance, rule or regulation applicable to Circle R or any of
its respective properties or assets. No filing or registration with, or
authorization, consent or approval of, any Governmental Entity is required by
or with respect to Circle R in connection with the execution and delivery of
this Agreement by Circle R or is necessary for the consummation by Circle R of
the Asset Purchase and the other transactions contemplated by this Agreement.

SECTION 3.3 Title. Set forth in Annex 1 is a description of the
Drilling Rig and Equipment, which description is accurate and complete in all
material respects. Circle R has good title to a 100% interest in the Drilling
Rig and Equipment, subject to no Liens except for (i) Liens for taxes not yet
delinquent or the validity of which is being contested in good faith, and (ii)
any Liens arising by operation of law securing obligations not yet overdue.
For purposes of this Agreement "Liens" means liens, mortgages, pledges,
security interests, encumbrances, claims or charges of any kind.

SECTION 3.4 Litigation. There is no suit, action, investigation or
proceeding pending or, to the knowledge of Circle R, threatened against Circle
R or Circle D Drilling, Inc. ("CRD"), the General Partner of Circle R, at law
or in equity before or by any federal, state, municipal or other governmental
department, commission, board, bureau, agency or instrumentality, domestic or
foreign, or before any arbitrator of any kind.

SECTION 3.5 Brokers. No broker, investment banker or other person
(other than Xxxxx Xxxxxx, the fees and expenses of which will be paid by Circle
R) is entitled to any broker's, finder's or other similar fee or commission in
connection with the transactions contemplated by this Agreement based upon
arrangements made by or on behalf of Circle R.

SECTION 3.6 General Partner. Circle R Drilling, Inc. is the sole
General Partner of Circle R; Circle R. Drilling, Inc. is a corporation duly
incorporated, validly existing and in good standing under the laws of the State
of Louisiana and has the power and authority to carry on its business as now
being conducted.

SECTION 3.7 LIMITATIONS ON REPRESENTATIONS AND WARRANTIES. THERE ARE
NO WARRANTIES THAT EXTEND BEYOND THE FACE OF THIS AGREEMENT. THE

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EXPRESS REPRESENTATIONS AND WARRANTIES OF CIRCLE R CONTAINED IN THIS ARTICLE
III ARE EXCLUSIVE AND ARE IN LIEU OF, AND CIRCLE R EXPRESSLY DISCLAIMS AND
NEGATES AND PDC HEREBY WAIVES, ALL OTHER REPRESENTATIONS AND WARRANTIES,
EXPRESS, IMPLIED, STATUTORY OR OTHERWISE. AS EXAMPLES AND FOR THE AVOIDANCE OF
DOUBT, BUT WITHOUT LIMITATION OF THE FOREGOING, THE DRILLING RIG AND EQUIPMENT
SHALL BE CONVEYED PURSUANT HERETO WITHOUT ANY WARRANTY OR REPRESENTATION
WHETHER EXPRESS, IMPLIED, STATUTORY OR OTHERWISE (OTHER THAN, AND WITHOUT
LIMITING IN ANY MANNER OR TO ANY EXTENT, THE REPRESENTATIONS AND WARRANTIES
CONTAINED IN THIS ARTICLE III), WITH RESPECT TO: (A) THE QUALITY, CONDITION,
WEIGHT, SERVICEABILITY, CONFORMITY TO SAMPLES OF MODELS OR ANY OTHER ASPECT OF
ANY PORTION OF THE DRILLING RIG AND EQUIPMENT, ALL OF WHICH SHALL BE CONVEYED
TO PURCHASER AS IS, WHERE IS, AND WITH ALL FAULTS AND DEFECTS AND IN ITS
PRESENT CONDITION AND STATE OF REPAIR AND WITHOUT ANY WARRANTIES WHATSOEVER OF
MERCHANTABILITY OR OF FITNESS FOR A PARTICULAR PURPOSE; (B) THE ACCURACY OR
COMPLETENESS OF ANY DATA, REPORTS, RECORDS, PROJECTIONS, OR INFORMATION OF
MATERIALS NOW, HERETOFORE OR HEREAFTER FURNISHED OR MADE AVAILABLE TO PDC IN
CONNECTION WITH THIS AGREEMENT, INCLUDING, WITHOUT LIMITATION, CONDITIONS
SPECIFICALLY RELATED TO THE PRESENCE OR DISPOSAL OF HAZARDOUS SUBSTANCES OR
NATURALLY OCCURRING RADIOACTIVE MATERIALS; (C) THE COMPLETENESS OR ACCURACY OF
INFORMATION CONTAINED IN ANY MATERIALS FURNISHED OR MADE AVAILABLE TO PDC BY
CIRCLE R OR BY CIRCLE R'S AGENTS OR REPRESENTATIVES OR BY ANY OTHER PARTY, IT
BEING AGREED BY PDC THAT ANY AND ALL SUCH DATA, RECORDS, REPORTS, PROJECTIONS,
INFORMATION AND OTHER MATERIALS (WRITTEN OR ORAL) FURNISHED OR OTHERWISE MADE
AVAILABLE OR DISCLOSED TO PDC HAVE BEEN AND WILL BE PROVIDED TO PDC AS A
CONVENIENCE AND SHALL NOT CREATE OR GIVE RISE TO ANY LIABILITY OF OR AGAINST
CIRCLE R AND ANY RELIANCE ON OR USE OF THE SAME SHALL BE AT PDC'S SOLE RISK TO
THE MAXIMUM EXTENT PERMITTED BY LAW; (D) THE OPERATION OF THE DRILLING RIG AND
EQUIPMENT OR ANY PART THEREOF; AND (E) ALL OTHER REPRESENTATIONS AND
WARRANTIES, EXPRESS, IMPLIED OR STATUTORY. PURCHASER ACKNOWLEDGES THAT THIS
WAIVER IS CONSPICUOUS.

ARTICLE IV

ADDITIONAL AGREEMENTS

SECTION 4.1 Fees and Expenses. All costs and expenses incurred by
PDC in connection with this Agreement and the transactions contemplated hereby
shall be paid by PDC; such costs and expenses incurred by Circle R shall be
paid by Circle R.

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SECTION 4.2 Reasonable Efforts. Upon the terms and subject to the
conditions set forth in this Agreement, each of the parties agrees to use all
reasonable best efforts to take, or cause to be taken, all actions, and to do,
or cause to be done, and to assist and cooperate with the other parties in
doing, all things necessary, proper or advisable to consummate and make
effective, in the most expeditious manner practicable, the Asset Purchase and
the other transactions contemplated by this Agreement and the prompt
satisfaction of the conditions hereto.

SECTION 4.3 PDC Indemnification. On or after the date of Closing,
PDC shall indemnify and hold Circle R and CRD harmless against and in respect
of all actions, suits, demands, judgments, costs and expenses (including
reasonable attorneys' fees of Circle R and CRD), relating to any
misrepresentation, breach of any representation or warranty or non-fulfillment
of any agreement on the part of PDC contained in this Agreement. The
indemnification provided for in this Section 4.3 shall terminate and be of no
further force and effect one year from the date of Closing, except as to any
representation or warranty as to which a written notice of claim for
indemnification has been given to PDC prior to the expiration of such one-year
period.

SECTION 4.4 Circle R, CRD and Xxxxx Xxx Xxxxxxxx Indemnification. On
and after the date of Closing, Circle R, CRD, and Xxxxx Xxx Xxxxxxxx ("X.
Xxxxxxxx"), a principal stockholder of Xxxxxxxx Drilling Company, Inc., the
majority stockholder of CRD, shall jointly and severally indemnify and hold PEC
and PDC harmless against and in respect of all actions, suits, demands,
judgments, costs and expenses (including reasonable attorneys' fees of PEC or
PDC), relating to any misrepresentation, breach of any representation or
warranty or non-fulfillment of any agreement on the part of Circle R contained
in this Agreement. The indemnification provided for in this Section 4.4 shall
terminate and be of no further force and effect one year from the date of the
Closing, except as to any representation or warranty as to which a written
notice of claim for indemnification has been given to Circle R, CRD, and X.
Xxxxxxxx prior to the expiration of such one-year period.

SECTION 4.5 Notice of Claim. Within fifteen (15) days after any
party (the "Indemnified Party") becomes aware of facts giving rise to a claim
by it for indemnification pursuant to this Article IV, and prior to the
expenditure or approval of the expenditure of any funds, such Indemnified Party
will provide notice thereof in writing (a "Claim Notice") to the party owing
such indemnification (the "Indemnifying Party") specifying the nature and
specific basis for such claim and a copy of all papers served with respect to
such claim (if any). For purposes of this Section 4.5, receipt by the
Indemnified Party of written notice of any demand, assertion, claim, action or
proceeding (judicial, administrative or otherwise) by or from any person or
entity other than a party to this Agreement or any affiliate thereof which
gives rise to a claim on behalf of such party shall constitute becoming aware
of facts giving rise to a claim by it and shall require notice within fifteen
(15) days after the receipt of such matter as provided in the first sentence of
this Section 4.5. Each Claim Notice shall set forth a reasonable description
of the claim based upon the information the Indemnified Party shall then have
and shall contain a statement to the effect that the Indemnified Party is
making a claim pursuant to, and formal demand for indemnification under, this
Article IV. No party shall be entitled to any indemnification without having
first timely delivered a proper Claim Notice.

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ARTICLE V

CONDITIONS PRECEDENT TO THE ASSET PURCHASE

SECTION 5.1 Conditions to Each Party's Obligation to Effect the Asset
Purchase. The respective obligations of each party to effect the Asset
Purchase shall be subject to the fulfillment or waiver (where permissible) at
or prior to the Closing of each of the following conditions:

(a) No Order. No Governmental Entity or court of competent
jurisdiction shall have enacted, issued, promulgated, enforced or entered any
law, rule, regulation, executive order, decree, injunction or other order
(whether temporary, preliminary or permanent) which is then in effect and has
the effect of prohibiting the Asset Purchase or any of the other transactions
contemplated hereby; provided that, in the case of any such decree, injunction
or other order, each of the parties shall have used reasonable best efforts to
prevent the entry of any such injunction or other order and to appeal as
promptly as practicable any decree, injunction or other order that may be
entered.

SECTION 5.2 Conditions to Obligation of Circle R to Effect the Asset
Purchase. The obligation of Circle R to effect the Asset Purchase shall be
subject to the fulfillment at or prior to the Closing of the following
additional conditions; provided that Circle R may waive any of such conditions
in its sole discretion:

(a) Performance of Obligations; Representations and Warranties.
PDC shall have performed in all material respects each of its agreements
contained in this Agreement required to be performed on or prior to the Closing
and each of the representations and warranties of PDC contained in this
Agreement shall be true and correct on and as of the Closing.

(b) Officers' Certificate. PDC shall have furnished to Circle R a
certificate, dated the Closing, signed by the appropriate officers of PDC,
certifying to the effect that to the best of the knowledge and belief of PDC,
the conditions set forth in Section 5.1 and Section 5.2(a) have been satisfied
in full.

(c) Payment of Purchase Price. PDC shall have made delivery of
the Purchase Price as provided in Section 1.2 of this Agreement by wire
transfer to the account of Circle R.

SECTION 5.3 Conditions to Obligations of PDC to Effect the Asset
Purchase. The obligations of PDC to effect the Asset Purchase shall be subject
to the fulfillment at or prior to the Closing of the following additional
conditions, provided that PDC may waive any such conditions in its sole
discretion:

(a) Performance of Obligations; Representations and Warranties.
Circle R shall have performed in all material respects each of its agreements
contained in this Agreement required to be performed on or prior to the Closing
and each of the respective representations and warranties of Circle R contained
in this Agreement shall be true and correct on and as of the Closing.

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(b) Officers' Certificate. Circle R shall have furnished
to PDC a certificate, dated the Closing, signed by the appropriate officers of
CRD as general partner of Circle R, certifying to the effect that to the best
of the knowledge and belief of CRD and Circle R, the conditions set forth in
Section 5.1 and Section 5.3(a) have been satisfied.

(c) Opinion of Counsel. PDC shall have received an
opinion of counsel from Davidson, Xxx & Xxxxx, Professional Law Corporation,
counsel to Circle R and CRD, dated the Closing, substantially to the effect
that:

(i) The organization, existence and good standing of
Circle R are as stated in this Agreement.

(ii) This Agreement has been duly authorized, executed and
delivered by Circle R, and (assuming the due and valid authorization,
execution and delivery by PDC) constitutes the legal, valid and
binding agreement of Circle R enforceable against Circle R in
accordance with its terms, except to the extent enforceability may be
limited by bankruptcy, insolvency, reorganization, moratorium,
fraudulent transfer or other similar laws of general applicability
relating to or affecting the enforcement of creditors' rights and by
the effect of general principles of equity (regardless of whether
enforceability is considered in a proceeding in equity or at law).

(iii) The execution and performance by Circle R of this
Agreement will not violate the Certificate of Limited Partnership of
Circle R and will not violate, result in a breach of, or constitute a
default under, any material lease, mortgage, contract, agreement,
instrument, law, rule, regulation, judgment, order or decree known to
such counsel to which Circle R is a party or to which it or any of its
properties or assets may be bound.

(iv) To the knowledge of such counsel, there are no
actions, suits or proceedings, pending or threatened against or
affecting Circle R or CRD by any Governmental Entity which seek to
restrain, prohibit or invalidate the transactions contemplated by this
Agreement.

(v) To the knowledge of such counsel, no consent,
approval, authorization or order of any court or governmental agency
or body which has not been obtained is required on behalf of Circle R
for consummation of the transactions contemplated by this Agreement.

(vi) Each Non-Competition Agreement between PDC and each
of Circle R, CRD, Xxxxxxxx Drilling Co., Inc. ("RDC") and Xxxxx Xxx
Xxxxxxxx constitutes the legal, valid and binding agreement of it/him
enforceable against it/him in accordance with its terms, except to the
extent enforceability may be limited by bankruptcy, insolvency,
reorganization, moratorium, fraudulent transfer or other similar laws
of general applicability relating to or affecting the enforcement of
creditors' rights and by the effect of general principles of equity
(regardless of whether enforceability is considered in a proceeding in
equity or at law).

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In rendering such opinion, counsel for Circle R may rely as to matters of fact
upon the representations of officers of Circle R contained in any certificate
delivered to such counsel and certificates of public officials.

(d) Xxxx of Sale and Assignment. Circle R shall have executed and
delivered the Xxxx of Sale and Assignment covering the Drilling Rig and
Equipment in the form attached hereto as Exhibit A.

(e) Non-Competition Agreements. A Non-Competition Agreement in
the respective forms attached hereto as Exhibits A(I), A(II), A(III) or A(IV)
shall have been executed and delivered by Circle R, CRD, RDC and Xxxxx Xxx
Xxxxxxxx, as the case may be.

ARTICLE VI

GENERAL PROVISIONS

SECTION 6.1 Notices. All notices and other communications hereunder
shall be in writing and shall be deemed given if delivered personally, sent by
overnight courier or telecopied (with a confirmatory copy sent by overnight
courier) to the parties at the following addresses (or at such other address
for a party as shall be specified by like notice):

(a) If to PDC, to:

Xxxxxxxxx Energy, Inc.
0000 Xxxxxx Xxxxxxx
X.X. Xxxxxx 0000
Xxxxxx, Xxxxx 00000
Telecopier No.: (000) 000-0000

Attention: A. Xxxxx Xxxxxxxxx
President and Chief Operating Officer

with copies to:

Xxxxxx X. Xxxxxxxx, Esq.
Xxxxx & Xxxxxxxxx LLP
000 Xxxx 00xx Xxxxxx, Xxxxx 0000
Xxxxxx, Xxxxxxxx 00000-0000
Telecopier No.: (000) 000-0000

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(b) if to Circle R, to:

Xxxxx Xxx Xxxxxxxx
Circle R Drilling, Ltd. 1981-A
000 Xxxxxx Xxxxxx
Xxxxxxxxxx, Xxxxxxxxx 00000
Telecopier No.: (000) 000-0000

with copies to:

Xxxxxx Xxx, Esq.
Davidson, Xxx & Xxxxx
Professional Law Corporation
000 Xxxxxx Xxxxxx, Xxxxx 000
Xxxxxxxxxx, Xxxxxxxxx 00000
Telecopier No.: (000) 000-0000

Xxxxx Xxx Xxxxxxxx
Circle R Drilling, Inc.
000 Xxxxxx Xxxxxx
Xxxxxxxxxx, Xxxxxxxxx 00000
Telecopier No.: (000) 000-0000

with copies to:

Xxxxxx Xxx, Esq.
Davidson, Xxx & Xxxxx
Professional Law Corporation
000 Xxxxxx Xxxxxx, Xxxxx 000
Xxxxxxxxxx, Xxxxxxxxx 00000
Telecopier No.: (000) 000-0000

(d) if to RDC, to:

Xxxxx Xxx Xxxxxxxx
Xxxxxxxx Drilling Co., Inc.
000 Xxxxxx Xxxxxx
Xxxxxxxxxx, Xxxxxxxxx 00000
Telecopier No.: (000) 000-0000

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with copies to:

Xxxxxx Xxx, Esq.
Davidson, Xxx & Xxxxx
Professional Law Corporation
000 Xxxxxx Xxxxxx, Xxxxx 000
Xxxxxxxxxx, Xxxxxxxxx 00000
Telecopier No.: (000) 000-0000

(e) if to X. Xxxxxxxx, to:

Xxxxx Xxx Xxxxxxxx
000 Xxxxxx Xxxxxx
Xxxxxxxxxx, Xxxxxxxxx 00000
Telecopier No.: (000) 000-0000

with copies to:

Xxxxxx Xxx, Esq.
Davidson, Xxx & Xxxxx
Professional Law Corporation
000 Xxxxxx Xxxxxx, Xxxxx 000
Xxxxxxxxxx, Xxxxxxxxx 00000
Telecopier No.: (000) 000-0000

SECTION 6.2 Interpretation. When a reference is made in this
Agreement to a Section, such reference shall be to a Section of this Agreement
unless otherwise indicated, and the words "hereof', "herein" and "hereunder"
and similar terms refer to this Agreement as a whole and not to any particular
provision of this Agreement, unless the context otherwise requires. The table
of contents and headings contained in this Agreement are for reference purposes
only and shall not affect in any way the meaning or interpretation of this
Agreement. Whenever the words "include," "includes" or "including" are used in
this Agreement, they shall be deemed to be followed by the words "without
limitation."

SECTION 6.3 Counterparts. This Agreement may be executed in
counterparts, all of which shall be considered one and the same agreement and
shall become effective when one or more counterparts have been signed by each
of the parties and delivered to the other parties.

SECTION 6.4 Entire Agreement; No Third-Party Beneficiaries. This
Agreement, including the documents and instruments referred to herein, (a)
constitutes the entire agreement and supersedes all prior agreements and
understandings, both written and oral, among the parties with respect to the
subject matter hereof and (b) is not intended to confer upon any person other
than the parties any rights or remedies hereunder; provided, however, that
legal counsel for Circle R hereto may rely upon the representations and
warranties of Circle R contained herein and in the certificate delivered
pursuant to Section 5.3(b).

10
14
SECTION 6.5 Governing Law. This Agreement shall be governed by, and
construed in accordance with, the laws of the State of Texas, regardless of the
laws that might otherwise govern under applicable principles of conflicts of
laws thereof.

SECTION 6.6 Assignment. Neither this Agreement nor any of the
rights, interests or obligations hereunder shall be assigned by any of the
parties without the prior written consent of the other parties. Subject to the
preceding sentence, this Agreement shall be binding upon, inure to the benefit
of, and be enforceable by, the parties and their respective successors and
assigns.

SECTION 6.7 Severability. If any term or other provision of this
Agreement is invalid, illegal or incapable of being enforced by any rule of
law, or public policy, all other conditions and provisions of this Agreement
shall nevertheless remain in full force and effect so long as the economic or
legal substance of the transactions contemplated hereby are not affected in any
manner materially adverse to any party. Upon such determination that any term
or other provision is invalid, illegal or incapable of being enforced, the
parties shall negotiate in good faith to modify this Agreement so as to effect
the original intent of the parties as closely as possible in a mutually
acceptable manner in order that the transactions be consummated as originally
contemplated to the fullest extent possible.

SECTION 6.8 Enforcement of This Agreement. The parties agree that
irreparable damage would occur in the event that any of the provisions of this
Agreement were not performed in accordance with their specific terms or were
otherwise breached. It is accordingly agreed that the parties shall be
entitled to an injunction or injunctions to prevent breaches of this Agreement
and to enforce specifically the terms and provisions hereof in any court of the
United States or any state having jurisdiction, this being in addition to any
other remedy to which they are entitled at law or in equity.

IN WITNESS WHEREOF, PDC and Circle R have executed this Agreement as
of the date first written above.

PDC:

XXXXXXXXX DRILLING COMPANY

By: /s/ A. XXXXX XXXXXXXXX
-----------------------------------
A. Xxxxx Xxxxxxxxx
Chief Operating Officer

Attest:

/s/ XXXXX X. XXXXX
-----------------------------
Xxxxx X. Xxxxx, Secretary

11
15
CIRCLE R:

CIRCLE R DRILLING, LTD. 1981-A, a
Louisiana limited partnership

By: Circle R Drilling, Inc.,
General Partner

By: /s/ XXXXX XXX XXXXXXXX
--------------------------------
Xxxxx Xxx Xxxxxxxx,
Vice President

Attest:

XXXXX X. XXXXX
--------------------------
Xxxxx X. Xxxxx, Secretary

TO INDUCE XXXXXXXXX DRILLING COMPANY TO ENTER INTO THIS ASSET PURCHASE
AGREEMENT AND FOR OTHER GOOD AND VALUABLE CONSIDERATION, THE RECEIPT AND
SUFFICIENCY OF WHICH ARE HEREBY ACKNOWLEDGED, THE UNDERSIGNED, BEING BENEFICIAL
OWNERS OF CIRCLE R, ACCEPT AND AGREE TO BE BOUND BY THE INDEMNIFICATION
PROVISIONS OF SECTION 4.4 OF THIS ASSET PURCHASE AGREEMENT.

CIRCLE R DRILLING, INC.

By: /s/ XXXXX XXX XXXXXXXX
----------------------------------
Xxxxx Xxx Xxxxxxxx, Vice President

----------------------------------
XXXXX XXX XXXXXXXX

12
16
ANNEX 1
TO
ASSET PURCHASE AGREEMENT

DESCRIPTION OF DRILLING RIG AND EQUIPMENT

A. Drilling Rig and Equipment.

The Drilling Rig and Equipment includes the drilling rig, parts and
related equipment, including engines, mud pumps, hooks and blocks,
xxxxxxx, substructure, rotary tables, blow-out prevention equipment,
drill bits and all tubular goods on the rig, all of which are listed
below, less the parts and related equipment sold or disposed of since
August 26, 1997, and plus the parts and related equipment acquired by
Circle R since August 26, 1997, in each case in the ordinary course of
business, consistent with past practice.

------------

DRAWWORKS

Superior 1000-M Single Drum Drawworks, 1000 HP, XXXXX Grooved
f/1 1/4" Line, Makeup & Breakout Catheads, Overrunning Clutch,
Air Driller's Console Controls, Crown-O-Matic

COMPOUND

SUPERIOR 3-Engine In-Line Compound w/Single-Pedestal Pump
Drive, XXXXXXX-DENVER 2-Stage A/C Belt Drive

BRAKE

(2) PARMAC V-80 Single Hydromatic Brakes

ENGINES

(3)CAT D-353E TA Diesel Engines, S/Ns-46BO9128 & N/A, Each
w/Air Starter, Radiator, Gauges, NATIONAL C- 245-80 Torque
Converter; (1) CAT D-353ETA Diesel Engine, S/N 046B07814
located at Xxxx Equipment Company, Waco, Texas

MAST

DRECO 136'H x 22'W Cantilever Mast, 600,000# Static Hook Load,
Pin-Type, Crown Block w/(5) Sheaves, Fastline Sheave, 4"
Standpipe, Crown Safety Platform, Racking

AX-1 - 1
17
Board, Tong Counterweights, Ladder, Xxxxxxx Climber, Mast
Stand, Standpipe Manifold w/4" & 2" Gate Valves, OTECO 5000
PSI Pressure Gauge

SUBSTRUCTURE

DRECO 18'6"H x 27'W x 50'L Slingshot Substructure w/Rotary
Beams, V-Door Ramp, (4) Stairs, Safety Rails, Deadline Anchor,
Air Volume Tank, Hydraulic Reservoir, (2) LANTEC Air Winches

PUMP

XXXXXXX-DENVER PZ-9 Triplex Mud Pump, 1000 HP, Forged Steel
Fluid End w/Quick-Change Caps, HYDRIL K-20- 1 0000 Pulsation
Dampener, Rod Cooling Pump, DEMCO 4" & OTECO 0" Xxxx Xxxxxx,
Xxxxx Assembly, Compound- Driven

PUMP

XXXXXX 600 Duplex Mud Pump, 600 HP, 7 1/2" x 14", MATTCO Cast
Steel Fluid End w/Quick-Change Caps, CONTINENTAL EMSCO
Pulsation Dampener, OTECO 2" Shear Relief Valve, Rod Cooling
Pump, OTECO 4" & DEMCO 0" Xxxx Xxxxxx, Xxxxx Assembly, Master
Skidded w/Engine

PUMP POWER

CAT D-379 TA Diesel Engine, S/N-68BO7069, w/Air Starter,
Radiator, Gauges, Torque Converter

ROTATING EQUIPMENT

HACKER 27 1/2" x 44 1/2" Rotary Table w/Split Master Bushing

XXXXXXX-DENVER 300-Ton Swivel

XXXXX Xxxxx Drive Bushing, Square Drive

Lower Xxxxx Valve

Inside BOP

TRAVELING EQUIPMENT

XXXXXXX-DENVER 300-Ton Block/Hook Combination w/(5) 60"
Sheaves, 1 1/4" Line, BJ 6150 Unimatic Hook

AX-1 - 2
18
2 1/2" x 102" Elevator Links

WELL CONTROL EQUIPMENT

HYDRIL GK-10-5000 5000 PSI Annular Blowout Preventer

HYDRIL WP 11" 5000 PSI Double Blowout w/Pipe & Blind Rams

24"H x 11"ID Drilling Spool w/4-1/16" Outlets, (2) DEMCO
3-1/16" 5000 PSI & (2) DEMCO 2-1/16" 3000 PSI Gate Valves

24"H x 11"D 5000 PSI Spacer Spool

KOOMEY T20120 5-Station 120-Gallon Closing Unit, S/N-1 550601,
(12) 10-Gallon Accumulator Bottles, Triplex Charging Pump p/b
25 HP Electric Motor, (1) Air-Actuated Hydraulic Charging Pump

XXXXXXX 5-Station Remote Closing Unit, Mounted on Console

5000 PSI Blowout Preventer Choke Manifold, 5-Way Cross w/(2)
DEMCO 3-1/16" 5000 PSI & (2) 2-1/16" 3000 PSI Gate Valves,
Buffer Chamber, Mounted on Adjustable-Height Skid

RIG HOUSES

8'W x 30'L Triaxle Toolpusher's Trailer, Fully Furnished

10'W x 24'L Doghouse w/4'L Porch Extension, Round Top,
Knowledge Box, Lockers, Bench Storage, Cabinets, Parts Bins,
Fluorescent Lights, Heater, Skidded

10'W x 38'L Parts/Change House w/Round-Top, Lockers, Bench
Storage, Cabinets, Parts Bins, Workbenches, Fluorescent
Lights, Heater, Skidded

GENERATORS/UTILITY HOUSE

CAT SR-4 000 XX XX Xxxxxxxxx Xxx, XXX-0XX00000, p/b CAT 3412
DITA Diesel

Engine, S/N-38509492, w/Air Starter, Radiator, Gauges, Skidded

502FDR 000 XX XX Xxxxxxxxx Xxx, X/X-XX0000000, p/b CAT 3412
DITA Diesel Engine w/Air Starter, Radiator, Gauges, Skidded

QUINCY 350 Air Compressor p/b LISTER 2-Cylinder Air-Cooled
Diesel Engine, SN-US11078ST2A3110, w/Manual & Electric
Starter, Air Volume Tank

AX-1 - 3
19
QUINCY 520 Air Compressor p/b 10 HP Electric Motor

SQUARE D Electrical Control Panel w/Switchboard

All Above Mounted in 10'W x 38'L Utility House w/Round Top,
Fluorescent Lights, Heater, Skidded

MUD SYSTEM

10'W x 7H x 36'L Mud Suction Tank w/10'L Covered Porch
Extension, (2) Compartments, Round Bottom, Internal Plumbing,
(3) DEMCO 6" x 8" Centrifugal Pumps, Each p/b 50 HP Electric
Motor, (2) 7 1/2 HP Mud Agitators, Each p/b Electric Motor,
Mud Xxxxxx, Top-Mounted Walkways, Stairs, Safety Rails,
Skidded

10'W x 7'H x 40'L Mud Shaker Tank w/(2) 4'L Covered Porch
Extensions, (3) Compartments, Round Bottom, Internal Plumbing,
(2) DEMCO 6" x 8" Centrifugal Pumps, Each p/b 50 HP Electric
Motor, (2) 7 1/2 HP Mud Agitators, Each p/b Electric Motor,
Top-Mounted, Walkways, Stairs, Safety Rails, Skidded

FLUID SYSTEMS High Speed Linear Screen Vibrating Shale Shaker
p/b 5 HP Electric Motor

DEMCO Desander w/12" Cone

DEMCO Desilter w/(1) 6" Cones

WATER/FUEL TANKS

10'Dia x 30'L Water Tank, Skidded

10'W x 8'H x 30'L Fuel Tank, Skidded w/Fuel Pump & Filter p/b
(2) 1 HP Electric Motors, Mounted on Stand

7'10"W x 3'H x 5'L 3-Compartment Lubester

HANDLING TOOLS

XXXXXXXXX-XXXX Pneumatic Pipe Xxxxxxx

XX Type B Rotary Tongs w/Extra Heads

BJ 3 3/8" BN to 5 1/2" BN 250-Ton Center Latch Pipe Elevators

BJ Type A 6 3/4" SS 250-Ton Center Latch Drill Collar
Elevators

AX-1 - 4
00
XXXXXXX XX Xxxx 4 1/2" Drill Pipe Slips

8" Drill Collar Slips

6 1/4" Drill Collar Slips

Approximately (1) Drill Collar Lift Subs

XXXXXXXXX-XXXX HUL-RO 9000 PSI Capacity Air Hoist,
S/N-RSH11417

Mud Bucket

AUXILIARY EQUIPMENT

XXXXXX XXXXXX E 600,000# Capacity Weight Indicator w/Pump
Pressure, Tong Line Pull & RPM Gauges, Console-Mounted

3 1/2"ID x 55'L Rotary Hose

(2)6"ID x 5'L & 8'L Suction Hoses w/Pipe

(2) 3 1/2"ID x 10'L Vibrator Hoses

42"H x 5'W x 60'L 2-Section Catwalk w/Steel Deck Steps

60"H x 8"W x 25'L Junk Box w/15'L Covered Porch f/Closing Unit

XXXXXX XXX Hydraulic/Electric Wireline Measuring Device,
S/N-633, w/.092" Measuring Line

Rathole & Mousehole

Fluorescent Rig Lights w/Wiring

Approximately 6000' of 1 1/4" Drill Line w/Spool Stand

BEAR Automatic Driller

(4) Sets of 42"H x 28'L Triangular Pipe Rack

Miscellaneous Spare Parts, Hand Tools, Valves, Fire
Extinguishers, Etc.

AX-1 - 5
21
DRILL PIPE

12,000' (400 Joints) 4 1/2", Grade E, 16.60#, Range 2 Drill
Pipe w/4 1/2"XH, BN, HB Tool Joints, 5- 15/16" to 6"OD, PC

DRILL COLLARS

(24) 6 1/8"OD to 6 1/2"OD x 2"ID x 30'L Slick Drill Collars
w/4 1/2"XH Connections, HB, Recessed

AX-1 - 6
22
EXHIBIT A(I)

XXXXXXXXX DRILLING COMPANY

NON-COMPETITION AGREEMENT

THIS NON-COMPETITION AGREEMENT is made and entered into this _____ day
of November, 1997 (this "Agreement"), by and between XXXXXXXXX DRILLING
COMPANY, a Delaware corporation ("PDC"), and CIRCLE R DRILLING, LTD. 1981-A, a
Louisiana limited partnership ("Circle R").

RECITALS:

A. Simultaneously with the execution of this Agreement, PDC and
Circle R have entered into that certain Asset Purchase Agreement, dated of even
date herewith (the "Asset Purchase Agreement"), providing for, among other
things, the purchase by PDC of the drilling rig and related equipment owned by
Circle R.

B. The execution and delivery of this Agreement is a condition to
the consummation of the Asset Purchase contemplated by the Asset Purchase
Agreement, and the parties are entering into this Agreement in order to fulfill
such condition.

NOW, THEREFORE, in consideration of the foregoing, the mutual
covenants and agreements contained herein, and other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged,
the parties, intending to be legally bound, hereby agree as follows:

1. Period of Agreement.

The period of this Agreement shall commence on the date hereof and
remain in effect through November 1, 2000 (the "Non-Compete Period").

2. Covenant Not to Compete.

(a) Circle R covenants and agrees that during the Non-Compete
Period, Circle R shall not, without the prior written consent of PDC, directly
or indirectly, alone or in association with any other person, carry on, be
engaged, concerned, or take part in, render services to, or otherwise assist,
or own, share in the earnings of, or invest in the stock, bonds, or other
securities of, any person which is engaged in providing contract drilling rig
services to the oil and gas industry within Texas Railroad Commission Districts
1, 2, 3, 4, 5 and 6 in the State of Texas (the "Competitive Business");
provided, however, that Circle R may (i) invest and/or engage in any business
that

EXH A(I) - 1
23
EXHIBIT A(I)

routinely provides third-party services (as such term is commonly used in the
contract oil and gas well drilling business) to a Competitive Business, but is
not engaged in the actual conduct of a Competitive Business, or (ii) invest in
stock, bonds, or other securities of any Competitive Business (but without
otherwise participating in the Competitive Business) if: (A) such stock,
bonds, or other securities are listed on any national securities exchange or
are registered under Section 12(g) of the Securities Exchange Act of 1934, as
amended; (B) the investment does not exceed, in the case of any class of
capital stock of any one issuer, two percent (2%) of the issued and outstanding
shares, or, in the case of bonds or other securities of any one issuer, two
percent (2%) of the aggregate principal amount thereof issued and outstanding;
and (C) such investment would not prevent, directly or indirectly, the
transaction of business by PDC or any affiliate of PDC with any state,
district, territory, or possession of the United States or any governmental
subdivision, agency, or instrumentality thereof by virtue of any statute, law,
regulation or administrative practice. The period of time during which Circle
R is prohibited from engaging in certain activities by this Section shall be
extended by the length of time during which Circle R is in breach of the terms
of this Section.

(b) It is understood by and between the parties hereto that the
foregoing covenant by Circle R not to enter into competition with PDC as set
forth in Section 2(a) hereof is an essential element of this Agreement and the
Asset Purchase Agreement and that, but for the agreement of Circle R to comply
with such covenant, PDC would not have agreed to enter into this Agreement or
the Asset Purchase Agreement. PDC and Circle R have independently consulted
with their respective counsel and have been advised in all respects concerning
the reasonableness and propriety of such covenant, with specific regard to the
nature of the business conducted by PDC and its affiliates. Circle R agrees
that such covenant is reasonable in scope, geographic area, and duration, and
that compliance with such covenant would not impose economic hardship on Circle
R.

3. Restrictions on Soliciting Business of PDC.

Circle R further covenants and agrees that during the Non-Compete
Period, Circle R will not, either for itself or for any other person or entity,
directly or indirectly, engage in any of the following activities in a
Competitive Business without the express prior written consent of PDC:

(a) Solicit or hire any of the employees of PDC or solicit or take
away any of PDC's customers, lessors, or suppliers or attempt any of the
foregoing; or

(b) Engage in any act which would interfere with or harm any
business relationship PDC has with any employee or (with respect to PDC's
contract oil and gas well drilling business) with any customer, lessor,
principal or supplier.

EXH A(I) - 2
24
EXHIBIT A(I)

4. Specific Performance.

Without intending to limit the remedies available to PDC, Circle R
acknowledges that PDC will have no adequate remedies at law if Circle R
violates the terms of Sections 2 or 3, hereof. In such event, Circle R agrees
that PDC shall have the right, in addition to any other rights it may have, to
obtain in any court of competent jurisdiction specific performance of such
Sections of this Agreement or injunctive relief to restrain any breach or
threatened breach thereof. Nothing herein shall be construed as prohibiting
PDC from pursuing any other remedies available to PDC (whether at law or in
equity) for such breach or threatened breach, including, without limitation,
the recovery of monetary damages from Circle R.

The provisions of this Section 4 shall survive the expiration,
termination or cancellation of this Agreement.

5. Attorneys Fees and Costs.

If an action at law or in equity is necessary to enforce or interpret
the terms of this Agreement, the prevailing party shall be entitled to
reasonable attorneys fees, costs and necessary expenses in addition to any
other relief to which that party may be entitled. This provision is applicable
to this entire Agreement.

6. Representations and Warranties of PDC and Circle R.

(a) Representations and Warranties of PDC. PDC hereby represents
and warrants to Circle R that: (i) it has all requisite power to enter into and
perform its obligations under this Agreement; (ii) this Agreement has been duly
and validly authorized by all necessary corporate action on the part of PDC;
(iii) the execution of this Agreement by PDC and performance of PDC's
obligations hereunder do not require the consent or approval of any other
party; and (iv) this Agreement is a valid and binding obligation of PDC.

(b) Representations and Warranties of Circle R. Circle R hereby
represents and warrants to PDC that: (i) Circle R has the capacity and power to
enter into and perform obligations of Circle R under this Agreement; (ii)
Circle R has duly and validly executed this Agreement; (iii) the execution of
this Agreement and performance of obligations of Circle R hereunder do not
require the consent or approval of any other party; and (iv) this Agreement
constitutes a valid and binding obligation of Circle R.

7. General Provisions.

(a) Compliance with Laws. The parties agree that they will comply
with all applicable laws and regulations of government bodies or agencies in
their respective performance of their obligations under this Agreement.

EXH A(I) - 3
25
EXHIBIT A(I)

(b) Governing Law and Construction. This Agreement will be
governed by and construed in accordance with the laws of the State of Louisiana
without reference to its conflict-of-laws principles. This Agreement's final
form resulted from review and negotiations among the parties and their
attorneys, and no part of this Agreement should be construed against any party
on the basis of authorship.

(c) Forum for Dispute Resolution. If any dispute arises among the
parties concerning the interpretation or performance of any portion of this
Agreement which the parties are unable to resolve themselves, and any party
brings an action against any other party seeking a declaratory order, specific
performance, damages, or any other legal or equitable relief based on this
Agreement, the parties agree that the forum for any such action shall be an
appropriate federal or state court in Texas having jurisdiction, agree that
venue will be proper in such courts, and waive any objections based on
inconvenience of the forum, and further agree that the prevailing party in any
such action, as determined by the court, shall be awarded its reasonable
attorneys' fees and costs in addition to any relief or judgment the court
awards.

(d) Entire Agreement; Amendment. This Agreement constitutes the
entire agreement between the parties with respect to the subject matter
contained herein and supersedes any previous oral or written communications,
representations, understandings or agreements with respect thereto. The terms
of this Agreement may be modified only in a writing, signed by authorized
representatives of both parties.

(e) Assignability. This Agreement will be binding upon the
parties' respective successors and permitted assigns. Neither party may assign
this Agreement and/or any of its rights and/or obligations hereunder without
the prior written consent of the other party, and any such attempted assignment
will be void; provided, however, that PDC may assign this Agreement to PEC or
to another subsidiary of PEC without the prior written consent of Circle R, and
provided further that a transfer by PDC as a result of a merger or sale of all
or substantially all of the assets of PDC with or to a third party that assumes
PDC's obligations hereunder by operation of law or otherwise shall not
constitute a prohibited assignment under this Section 7(e).

(f) Waiver. A waiver of a breach or default under this Agreement
will not constitute a waiver of any other breach or default. Failure or delay
by either party to enforce compliance with any term or condition of this
Agreement will not constitute a waiver of such term or condition.

(g) Severability. If any provision of this Agreement is declared
to be invalid, the parties agree that such invalidity will not affect the
validity of the remaining provisions of this Agreement, and further agree, to
the extent possible, to substitute for the invalid provision a valid

EXH A(I) - 4
26
EXHIBIT A(I)

provision that approximates the intent and economic effect of the invalid
provision as closely as possible.

(h) Headings. The titles of the Sections and subsections of this
Agreement are for convenience of reference only and are not to be considered in
construing this Agreement.

(i) Notice. Any notice, request, consent, demand or other
communication required to be given under this Agreement will be in writing and
will be given personally, by facsimile or by mailing the same, first-class,
postage prepaid to the appropriate address and facsimile number set forth below
or to such other person or at such other address as may hereafter be designated
by like notice. Notices by mail will be considered delivered and become
effective three days after the mailing thereof. All notices by facsimile will
be considered delivered and become effective immediately upon the confirmed (by
answer back or other tangible printed verification or successful receipt)
sending thereof.

To PDC: Xxxxxxxxx Drilling Company
0000 Xxxxxx Xxxxxxx
X.X. Xxxxxx 0000
Xxxxxx, Xxxxx 00000
Facsimile: (000) 000-0000
Attention: A. Xxxxx Xxxxxxxxx
President and Chief Operating Officer

To Circle R: Circle R Drilling, Ltd. 1981-A
000 Xxxxxx Xxxxxx
Xxxxxxxxxx, Xxxxxxxxx 00000
Facsimile: (000) 000-0000
Attention: Xxxxx Xxx Xxxxxxxx

with copies to:

Xxxxxx Xxx, Esq.
Davidson, Xxx & Xxxxx
Professional Law Corporation
000 Xxxxxx Xxxxxx, Xxxxx 000
Xxxxxxxxxx, Xxxxxxxxx 00000
Facsimile: (000) 000-0000

EXH A(I) - 5
27
EXHIBIT A(I)

(j) Counterparts. This Agreement may be executed in counterparts
and by the parties hereto in separate counterparts, each of which will be
deemed an original, but all of which together will constitute one and the same
instrument.

IN WITNESS WHEREOF, the undersigned have caused this Agreement to be
executed by their respective representatives as of the day and year first above
written.

"PDC"

XXXXXXXXX DRILLING COMPANY

By:
----------------------------
Xxxxx X. Xxxxx
Vice President-Finance

"Circle R"

CIRCLE R DRILLING, LTD. 1981-A

By: Circle R Drilling, Inc.,
General Partner

By:
------------------------
Xxxxx Xxx Xxxxxxxx,
Vice President

EXH A(I) - 6
28
EXHIBIT A(II)

XXXXXXXXX DRILLING COMPANY

NON-COMPETITION AGREEMENT

RECITALS:

A. Simultaneously with the execution of this Agreement, PDC has
entered into that certain Asset Purchase Agreement, dated of even date herewith
(the "Asset Purchase Agreement"), between PDC and CIRCLE R DRILLING, LTD.
1981-A ("Circle R"), providing for, among other things, the purchase by PDC of
the drilling rig and related equipment owned by Circle R.

B. CRD is the sole general partner of Circle R.

C. The execution and delivery of this Agreement is a condition to
the consummation of the Asset Purchase contemplated by the Asset Purchase
Agreement, and the parties are entering into this Agreement in order to fulfill
such condition.

1. Period of Agreement.

The period of this Agreement shall commence on the date hereof and
remain in effect through November 1, 2000 (the "Non-Compete Period").

2. Covenant Not to Compete.

(a) CRD covenants and agrees that during the Non-Compete Period,
CRD shall not, without the prior written consent of PDC, directly or
indirectly, and whether as a principal or as an agent, officer, director,
employee, consultant, or otherwise, alone or in association with any other
person, carry on, be engaged, concerned, or take part in, render services to,
or otherwise assist, or own, share in the earnings of, or invest in the stock,
bonds, or other securities of, any person which is engaged in providing
contract drilling rig services to the oil and gas industry within Texas
Railroad Commission Districts 1, 2, 3, 4, 5 and 6 in the State of Texas (the
"Competitive Business"); provided, however, that CRD may (i) invest and/or
engage in any business that routinely provides third-party

EXH A(II) - 1
29
services (as such term is commonly used in the contract oil and gas well
drilling business) to a Competitive Business, but is not engaged in the actual
conduct of a Competitive Business, or (ii) invest in stock, bonds, or other
securities of any Competitive Business (but without otherwise participating in
the Competitive Business) if: (A) such stock, bonds, or other securities are
listed on any national securities exchange or are registered under Section
12(g) of the Securities Exchange Act of 1934, as amended; (B) the investment
does not exceed, in the case of any class of capital stock of any one issuer,
two percent (2%) of the issued and outstanding shares, or, in the case of bonds
or other securities of any one issuer, two percent (2%) of the aggregate
principal amount thereof issued and outstanding; and (C) such investment would
not prevent, directly or indirectly, the transaction of business by PDC or any
affiliate of PDC with any state, district, territory, or possession of the
United States or any governmental subdivision, agency, or instrumentality
thereof by virtue of any statute, law, regulation or administrative practice.
The period of time during which CRD is prohibited from engaging in certain
activities by this Section shall be extended by the length of time during which
CRD is in breach of the terms of this Section.

(b) It is understood by and between the parties hereto that the
foregoing covenant by CRD not to enter into competition with PDC as set forth
in Section 2(a) hereof is an essential element of this Agreement and the Asset
Purchase Agreement and that, but for the agreement of CRD to comply with such
covenant, PDC would not have agreed to enter into this Agreement or the Asset
Purchase Agreement. PDC and CRD have independently consulted with their
respective counsel and have been advised in all respects concerning the
reasonableness and propriety of such covenant, with specific regard to the
nature of the business conducted by PDC and its affiliates. CRD agrees that
such covenant is reasonable in scope, geographic area, and duration, and that
compliance with such covenant would not impose economic or professional
hardship on CRD.

3. Restrictions on Soliciting Business of PDC.

CRD further covenants and agrees that during the Non-Compete Period,
CRD will not, either for himself or for any other person or entity, directly or
indirectly, engage in any of the following activities in a Competitive Business
without the express prior written consent of PDC:

(a) Solicit or hire any of the employees of PDC or solicit or take
away any of PDC's customers, lessors, or suppliers or attempt any of the
foregoing; or

4. Specific Performance.

Without intending to limit the remedies available to PDC, CRD
acknowledges that PDC will have no adequate remedies at law if CRD violates the
terms of Section 2 or 3, hereof. In such event, CRD agrees that PDC shall have
the right, in addition to any other rights it may have, to obtain in any court
of competent jurisdiction specific performance of such Sections of this
Agreement

EXH A(II) - 2
30
or injunctive relief to restrain any breach or threatened breach thereof.
Nothing herein shall be construed as prohibiting PDC from pursuing any other
remedies available to PDC (whether at law or in equity) for such breach or
threatened breach, including, without limitation, the recovery of monetary
damages from CRD.

The provisions of this Section 4 shall survive the expiration,
termination or cancellation of this Agreement.

5. Attorneys Fees and Costs.

6. Representations and Warranties of PDC and CRD.

(a) Representations and Warranties of PDC. PDC hereby represents
and warrants to CRD that: (i) it has all requisite power to enter into and
perform its obligations under this Agreement; (ii) this Agreement has been duly
and validly authorized by all necessary corporate action on the part of PDC;
(iii) the execution of this Agreement by PDC and performance of PDC's
obligations hereunder do not require the consent or approval of any other
party; and (iv) this Agreement is a valid and binding obligation of PDC.

(b) Representations and Warranties of CRD. CRD hereby represents
and warrants to PDC that: (i) CRD has the capacity and power to enter into and
perform obligations of CRD under this Agreement; (ii) CRD has duly and validly
executed this Agreement; (iii) the execution of this Agreement and performance
of obligations of CRD hereunder do not require the consent or approval of any
other party; and (iv) this Agreement constitutes a valid and binding obligation
of CRD.

7. General Provisions.

(c) Forum for Dispute Resolution. If any dispute arises among the
parties concerning the interpretation or performance of any portion of this
Agreement which the parties are

EXH A(II) - 3
31
unable to resolve themselves, and any party brings an action against any other
party seeking a declaratory order, specific performance, damages, or any other
legal or equitable relief based on this Agreement, the parties agree that the
forum for any such action shall be an appropriate federal or state court in
Texas having jurisdiction, agree that venue will be proper in such courts, and
waive any objections based on inconvenience of the forum, and further agree
that the prevailing party in any such action, as determined by the court, shall
be awarded its reasonable attorneys' fees and costs in addition to any relief
or judgment the court awards.

(e) Assignability. This Agreement will be binding upon the
parties' respective successors and permitted assigns. Neither party may assign
this Agreement and/or any of its rights and/or obligations hereunder without
the prior written consent of the other party, and any such attempted assignment
will be void; provided, however, that PDC may assign this Agreement to PEC or
to another subsidiary of PEC without the prior written consent of CRD, and
provided further that a transfer by PDC as a result of a merger or sale of all
or substantially all of the assets of PDC with or to a third party that assumes
PDC's obligations hereunder by operation of law or otherwise shall not
constitute a prohibited assignment under this Section 7(e).

(h) Headings. The titles of the Sections and subsections of this
Agreement are for convenience of reference only and are not to be considered in
construing this Agreement.

EXH A(II) - 4
32
the confirmed (by answer back or other tangible printed verification or
successful receipt) sending thereof.

To PDC: Xxxxxxxxx Drilling Company
0000 Xxxxxx Xxxxxxx
X.X. Xxxxxx 0000
Xxxxxx, Xxxxx 00000
Facsimile: (000) 000-0000
Attention: A. Xxxxx Xxxxxxxxx
President and Chief Operating Officer

To CRD: Circle R Drilling, Inc.
000 Xxxxxx Xxxxxx
Xxxxxxxxxx, Xxxxxxxxx 00000
Facsimile: (000) 000-0000
Attention: Xxxxx Xxx Xxxxxxxx

with copies to:

Xxxxxx Xxx, Esq.
Davidson, Xxx & Xxxxx
Professional Law Corporation
000 Xxxxxx Xxxxxx, Xxxxx 000
Xxxxxxxxxx, Xxxxxxxxx 00000
Facsimile: (000) 000-0000

8. Counterparts. This Agreement may be executed in counterparts
and by the parties hereto in separate counterparts, each of which will be
deemed an original, but all of which together will constitute one and the same
instrument.

EXH A(II) - 5
33
IN WITNESS WHEREOF, the undersigned have caused this Agreement to be
executed by their respective representatives as of the day and year first above
written.

"PDC"

XXXXXXXXX DRILLING COMPANY

By:
---------------------------------
Xxxxx X. Xxxxx
Vice President-Finance

"CRD"

CIRCLE R DRILLING, INC.

By:
---------------------------------
Xxxxx Xxx Xxxxxxxx, Vice President

EXH A(II) - 6
34
EXHIBIT A(III)

XXXXXXXXX DRILLING COMPANY

NON-COMPETITION AGREEMENT

THIS NON-COMPETITION AGREEMENT is made and entered into this _____ day
of November, 1997 (this "Agreement"), by and between XXXXXXXXX DRILLING
COMPANY, a Delaware corporation ("PDC"), and XXXXX XXX XXXXXXXX, an individual
residing in Shreveport, Louisiana ("X. Xxxxxxxx").

RECITALS:

X. X. Xxxxxxxx is an officer, a director and a principal
stockholder of Xxxxxxxx Drilling Company, Inc., the majority stockholder of
Circle R Drilling, Inc., general partner of Circle R.

1. Period of Agreement.

The period of this Agreement shall commence on the date hereof and
remain in effect through November 1, 2000 (the "Non-Compete Period").

2. Covenant Not to Compete.

(a) T Xxxxxxxx covenants and agrees that during the Non-Compete
Period, T Xxxxxxxx shall not, without the prior written consent of PDC,
directly or indirectly, and whether as a principal or as an agent, officer,
director, employee, consultant, or otherwise, alone or in association with any
other person, carry on, be engaged, concerned, or take part in, render services
to, or otherwise assist, or own, share in the earnings of, or invest in the
stock, bonds, or other securities of, any person which is engaged in providing
contract drilling rig services to the oil and gas

EXH A(III) - 1
35
industry within Texas Railroad Commission Districts 1, 2, 3, 4, 5, and 6 of the
State of Texas (the "Competitive Business"); provided, however, that X.
Xxxxxxxx may (i) invest and/or engage in any business that routinely provides
third-party services (as such term is commonly used in the contract oil and gas
well drilling business) to a Competitive Business, but is not engaged in the
actual conduct of a Competitive Business, or (ii) invest in stock, bonds, or
other securities of any Competitive Business (but without otherwise
participating in the Competitive Business) if: (A) such stock, bonds, or other
securities are listed on any national securities exchange or are registered
under Section 12(g) of the Securities Exchange Act of 1934, as amended; (B) the
investment does not exceed, in the case of any class of capital stock of any
one issuer, two percent (2%) of the issued and outstanding shares, or, in the
case of bonds or other securities of any one issuer, two percent (2%) of the
aggregate principal amount thereof issued and outstanding; and (C) such
investment would not prevent, directly or indirectly, the transaction of
business by PDC or any affiliate of PDC with any state, district, territory, or
possession of the United States or any governmental subdivision, agency, or
instrumentality thereof by virtue of any statute, law, regulation or
administrative practice. The period of time during which X. Xxxxxxxx is
prohibited from engaging in certain activities by this Section shall be
extended by the length of time during which X. Xxxxxxxx is in breach of the
terms of this Section.

(b) It is understood by and between the parties hereto that the
foregoing covenant by X. Xxxxxxxx not to enter into competition with PDC as set
forth in Section 2(a) hereof is an essential element of this Agreement and the
Asset Purchase Agreement and that, but for the agreement of X. Xxxxxxxx to
comply with such covenant, PDC would not have agreed to enter into this
Agreement or the Asset Purchase Agreement. PDC and X. Xxxxxxxx have
independently consulted with their respective counsel and have been advised in
all respects concerning the reasonableness and propriety of such covenant, with
specific regard to the nature of the business conducted by PDC and its
affiliates. X. Xxxxxxxx agrees that such covenant is reasonable in scope,
geographic area, and duration, and that compliance with such covenant would not
impose economic or professional hardship on X. Xxxxxxxx.

3. Restrictions on Soliciting Business of PDC.

X. Xxxxxxxx further covenants and agrees that during the Non-Compete
Period, X. Xxxxxxxx will not, either for himself or for any other person or
entity, directly or indirectly, engage in any of the following activities in a
Competitive Business without the express prior written consent of PDC:

(a) Solicit or hire any of the employees of PDC or solicit or take
away any of PDC's customers, lessors, or suppliers or attempt any of the
foregoing; or

EXH A(III) - 2
36
4. Specific Performance.

Without intending to limit the remedies available to PDC, X. Xxxxxxxx
acknowledges that PDC will have no adequate remedies at law if X. Xxxxxxxx
violates the terms of Section 2 or 3, hereof. In such event, X. Xxxxxxxx
agrees that PDC shall have the right, in addition to any other rights it may
have, to obtain in any court of competent jurisdiction specific performance of
such Sections of this Agreement or injunctive relief to restrain any breach or
threatened breach thereof. Nothing herein shall be construed as prohibiting
PDC from pursuing any other remedies available to PDC (whether at law or in
equity) for such breach or threatened breach, including, without limitation,
the recovery of monetary damages from X. Xxxxxxxx.

The provisions of this Section 4 shall survive the expiration,
termination or cancellation of this Agreement.

5. Attorneys Fees and Costs.

6. Representations and Warranties of PDC and X. Xxxxxxxx.

(a) Representations and Warranties of PDC. PDC hereby represents
and warrants to X. Xxxxxxxx that: (i) it has all requisite power to enter into
and perform its obligations under this Agreement; (ii) this Agreement has been
duly and validly authorized by all necessary corporate action on the part of
PDC; (iii) the execution of this Agreement by PDC and performance of PDC's
obligations hereunder do not require the consent or approval of any other
party; and (iv) this Agreement is a valid and binding obligation of PDC.

(b) Representations and Warranties of X. Xxxxxxxx. X. Xxxxxxxx
hereby represents and warrants to PDC that: (i) X. Xxxxxxxx has the capacity
and power to enter into and perform obligations of X. Xxxxxxxx under this
Agreement; (ii) X. Xxxxxxxx has duly and validly executed this Agreement; (iii)
the execution of this Agreement and performance of obligations of X. Xxxxxxxx
hereunder do not require the consent or approval of any other party; and (iv)
this Agreement constitutes a valid and binding obligation of X. Xxxxxxxx.

7. General Provisions.

EXH A(III) - 3
37
(b) Governing Law and Construction. This Agreement will be
governed by and construed in accordance with the laws of the State of Louisiana
without reference to its conflict-of-laws principles. This Agreement's final
form resulted from review and negotiations among the parties and their
attorneys, and no part of this Agreement should be construed against any party
on the basis of authorship.

(e) Assignability. This Agreement will be binding upon the
parties' respective successors and permitted assigns. Neither party may assign
this Agreement and/or any of its rights and/or obligations hereunder without
the prior written consent of the other party, and any such attempted assignment
will be void; provided, however, that PDC may assign this Agreement to PEC or
to a subsidiary of PEC without the prior written consent of X. Xxxxxxxx and
provided further that a transfer by PDC as a result of a merger or sale of all
or substantially all of the assets of PDC with or to a third party that assumes
PDC's obligations hereunder by operation of law or otherwise shall not
constitute a prohibited assignment under this Section 7(e).

EXH A(III) - 4
38
(h) Headings. The titles of the Sections and subsections of this
Agreement are for convenience of reference only and are not to be considered in
construing this Agreement.

To PDC:

Xxxxxxxxx Drilling Company
0000 Xxxxxx Xxxxxxx
X.X. Xxxxxx 0000
Xxxxxx, Xxxxx 00000
Facsimile: (000) 000-0000
Attention: A. Xxxxx Xxxxxxxxx
President and Chief Operating Officer

To X. Xxxxxxxx:

Xxxxx Xxx Xxxxxxxx
000 Xxxxxx Xxxxxx
Xxxxxxxxxx, Xxxxxxxxx 00000
Facsimile: (000) 000-0000

with copies to:

Xxxxxx Xxx, Esq.
Davidson, Xxx & Xxxxx
Professional Law Corporation
000 Xxxxxx Xxxxxx, Xxxxx 000
Xxxxxxxxxx, Xxxxxxxxx 00000
Facsimile: (000) 000-0000

EXH A(III) - 5
39
IN WITNESS WHEREOF, the undersigned have caused this Agreement to be
executed by their respective representatives as of the day and year first above
written.

"PDC"

XXXXXXXXX DRILLING COMPANY

By:
-----------------------------------
Xxxxx X. Xxxxx
Vice President-Finance

"X. Xxxxxxxx"

--------------------------------------
Xxxxx Xxx Xxxxxxxx

EXH A(III) - 6
40
EXHIBIT A(IV)

XXXXXXXXX DRILLING COMPANY

NON-COMPETITION AGREEMENT

THIS NON-COMPETITION AGREEMENT is made and entered into this _____ day
of November, 1997 (this "Agreement"), by and between XXXXXXXXX DRILLING
COMPANY, a Delaware corporation ("PDC"), and XXXXXXXX DRILLING CO., INC., a
Louisiana corporation ("RDC").

RECITALS:

B. RDC is the majority stockholder of CRD.

1. Period of Agreement.

The period of this Agreement shall commence on the date hereof and
remain in effect through November 1, 2000 (the "Non-Compete Period").

2. Covenant Not to Compete.

(a) RDC covenants and agrees that during the Non-Compete Period,
RDC shall not, without the prior written consent of PDC, directly or
indirectly, and whether as a principal or as an agent, officer, director,
employee, consultant, or otherwise, alone or in association with any other
person, carry on, be engaged, concerned, or take part in, render services to,
or otherwise assist, or own, share in the earnings of, or invest in the stock,
bonds, or other securities of, any person which is engaged in providing
contract drilling rig services to the oil and gas industry within Texas
Railroad Commission Districts 1, 2, 3, 4, 5, and 6 of the State of Texas (the
"Competitive Business");

EXH A(IV) - 1
41
provided, however, that RDC may (i) invest and/or engage in any business that
routinely provides third-party services (as such term is commonly used in the
contract oil and gas well drilling business) to a Competitive Business, but is
not engaged in the actual conduct of a Competitive Business, or (ii) invest in
stock, bonds, or other securities of any Competitive Business (but without
otherwise participating in the Competitive Business) if: (A) such stock,
bonds, or other securities are listed on any national securities exchange or
are registered under Section 12(g) of the Securities Exchange Act of 1934, as
amended; (B) the investment does not exceed, in the case of any class of
capital stock of any one issuer, two percent (2%) of the issued and outstanding
shares, or, in the case of bonds or other securities of any one issuer, two
percent (2%) of the aggregate principal amount thereof issued and outstanding;
and (C) such investment would not prevent, directly or indirectly, the
transaction of business by PDC or any affiliate of PDC with any state,
district, territory, or possession of the United States or any governmental
subdivision, agency, or instrumentality thereof by virtue of any statute, law,
regulation or administrative practice. The period of time during which RDC is
prohibited from engaging in certain activities by this Section shall be
extended by the length of time during which RDC is in breach of the terms of
this Section.

(b) It is understood by and between the parties hereto that the
foregoing covenant by RDC not to enter into competition with PDC as set forth
in Section 2(a) hereof is an essential element of this Agreement and the Asset
Purchase Agreement and that, but for the agreement of RDC to comply with such
covenant, PDC would not have agreed to enter into this Agreement or the Asset
Purchase Agreement. PDC and RDC have independently consulted with their
respective counsel and have been advised in all respects concerning the
reasonableness and propriety of such covenant, with specific regard to the
nature of the business conducted by PDC and its affiliates. RDC agrees that
such covenant is reasonable in scope, geographic area, and duration, and that
compliance with such covenant would not impose economic or professional
hardship on RDC.

3. Restrictions on Soliciting Business of PDC.

RDC further covenants and agrees that during the Non-Compete Period,
RDC will not, either for himself or for any other person or entity, directly or
indirectly, engage in any of the following activities in a Competitive Business
without the express prior written consent of PDC:

(a) Solicit or hire any of the employees of PDC or solicit or take
away any of PDC's customers, lessors, or suppliers or attempt any of the
foregoing; or

4. Specific Performance.

Without intending to limit the remedies available to PDC, RDC
acknowledges that PDC will have no adequate remedies at law if RDC violates the
terms of Section 2 or 3, hereof. In

EXH A(IV) - 2
42
such event, RDC agrees that PDC shall have the right, in addition to any other
rights it may have, to obtain in any court of competent jurisdiction specific
performance of such Sections of this Agreement or injunctive relief to restrain
any breach or threatened breach thereof. Nothing herein shall be construed as
prohibiting PDC from pursuing any other remedies available to PDC (whether at
law or in equity) for such breach or threatened breach, including, without
limitation, the recovery of monetary damages from RDC.

The provisions of this Section 4 shall survive the expiration,
termination or cancellation of this Agreement.

5. Attorneys Fees and Costs.

6. Representations and Warranties of PDC and RDC.

(a) Representations and Warranties of PDC. PDC hereby represents
and warrants to RDC that: (i) it has all requisite power to enter into and
perform its obligations under this Agreement; (ii) this Agreement has been duly
and validly authorized by all necessary corporate action on the part of PDC;
(iii) the execution of this Agreement by PDC and performance of PDC's
obligations hereunder do not require the consent or approval of any other
party; and (iv) this Agreement is a valid and binding obligation of PDC.

(b) Representations and Warranties of RDC. RDC hereby represents
and warrants to PDC that: (i) RDC has the capacity and power to enter into and
perform obligations of RDC under this Agreement; (ii) RDC has duly and validly
executed this Agreement; (iii) the execution of this Agreement and performance
of obligations of RDC hereunder do not require the consent or approval of any
other party; and (iv) this Agreement constitutes a valid and binding obligation
of RDC.

7. General Provisions.

EXH A(IV) - 3
43
(c) Forum for Dispute Resolution. If any dispute arises among the
parties concerning the interpretation or performance of any portion of this
Agreement which the parties are unable to resolve themselves, and any party
brings an action against any other party seeking a declaratory order, specific
performance, damages, or any other legal or equitable relief based on this
Agreement, the parties agree that the forum for any such action shall be an
appropriate federal or state court in Texas having jurisdiction, agree that
venue will be proper in such courts, and waive any objections based on
inconvenience of the forum, and further agree that the prevailing party in any
such action, as determined by the court, shall be awarded its reasonable
attorneys' fees and costs in addition to any relief or judgment the court
awards.

(e) Assignability. This Agreement will be binding upon the
parties' respective successors and permitted assigns. Neither party may assign
this Agreement and/or any of its rights and/or obligations hereunder without
the prior written consent of the other party, and any such attempted assignment
will be void; provided, however, that PDC may assign this Agreement to PEC or
to a subsidiary of PEC without the prior written consent of RDC and provided
further that a transfer by PDC as a result of a merger or sale of all or
substantially all of the assets of PDC with or to a third party that assumes
PDC's obligations hereunder by operation of law or otherwise shall not
constitute a prohibited assignment under this Section 7(e).

(h) Headings. The titles of the Sections and subsections of this
Agreement are for convenience of reference only and are not to be considered in
construing this Agreement.

EXH A(IV) - 4
44
Notices by mail will be considered delivered and become effective three days
after the mailing thereof. All notices by facsimile will be considered
delivered and become effective immediately upon the confirmed (by answer back
or other tangible printed verification or successful receipt) sending thereof.

To PDC:

Xxxxxxxxx Drilling Company
0000 Xxxxxx Xxxxxxx
X.X. Xxxxxx 0000
Xxxxxx, Xxxxx 00000
Facsimile: (000) 000-0000
Attention: A. Xxxxx Xxxxxxxxx
President and Chief Operating Officer

To RDC:

Xxxxxxxx Drilling Co., Inc.
Xxxxx Xxx Xxxxxxxx
000 Xxxxxx Xxxxxx
Xxxxxxxxxx, Xxxxxxxxx 00000
Facsimile: (000) 000-0000

with copies to:

Xxxxxx Xxx, Esq.
Davidson, Xxx & Xxxxx
Professional Law Corporation
000 Xxxxxx Xxxxxx, Xxxxx 000
Xxxxxxxxxx, Xxxxxxxxx 00000
Facsimile: (000) 000-0000

EXH A(IV) - 5
45
IN WITNESS WHEREOF, the undersigned have caused this Agreement to be
executed by their respective representatives as of the day and year first above
written.

"PDC"

XXXXXXXXX DRILLING COMPANY

By:
----------------------------------
Xxxxx X. Xxxxx
Vice President-Finance

"RDC"

XXXXXXXX DRILLING CO., INC.

By:
----------------------------------
Xxxxx Xxx Xxxxxxxx
Vice President

EXH A(IV) - 6
46
EXHIBIT B

XXXX OF SALE AND ASSIGNMENT

KNOW ALL MEN BY THESE PRESENTS, that, pursuant to that certain Asset
Purchase Agreement, dated of even date herewith ("Asset Purchase Agreement")
between XXXXXXXXX DRILLING COMPANY ("PDC"), a Delaware corporation, and CIRCLE
R DRILLING, LTD. 1981-A ("Circle R"), a Louisiana limited partnership (Circle R
is referred to herein as the "Assignor"), the Assignor, for good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged,
hereby grants, bargains, sells, conveys and transfers unto PDC (the
"Assignee"), all of the Assignor's right, title and interest in and to the
Drilling Rig and Equipment (as defined in the Asset Purchase Agreement) set
forth in Appendix I attached hereto and incorporated herein by this reference.

TO HAVE AND TO HOLD the same unto the Assignee and the Assignee's
successors and assigns forever. The Assignor hereby covenants and agrees that
it has the full right, power and authority to sell, convey and transfer the
foregoing property to the Assignee pursuant to this Xxxx of Sale and
Assignment.

CIRCLE R MAKES THIS ASSIGNMENT AND XXXX OF SALE WITHOUT ANY REPRESENTATIONS AND
WARRANTIES, EXPRESS, IMPLIED, STATUTORY OR OTHERWISE EXCEPT AS MAY BE
SPECIFICALLY CONTAINED HEREIN OR IN THE ASSET PURCHASE AGREEMENT. AS EXAMPLES
AND FOR THE AVOIDANCE OF DOUBT, BUT WITHOUT LIMITATION OF THE FOREGOING, THE
DRILLING RIG AND EQUIPMENT SHALL BE CONVEYED PURSUANT HERETO WITHOUT ANY
WARRANTY OR REPRESENTATION WHETHER EXPRESS, IMPLIED, STATUTORY OR OTHERWISE
(OTHER THAN, AND WITHOUT LIMITING IN ANY MANNER OR TO ANY EXTENT, THE
REPRESENTATIONS AND WARRANTIES CONTAINED IN THE ASSET PURCHASE AGREEMENT), WITH
RESPECT TO THE QUALITY, CONDITION, WEIGHT, SERVICEABILITY, CONFORMITY TO
SAMPLES OF MODELS OR ANY OTHER ASPECT OF ANY PART, COMPONENT OR PORTION OF THE
DRILLING RIG AND EQUIPMENT, ALL OF WHICH IS CONVEYED TO PDC AS IS, WHERE IS,
AND WITH ALL FAULTS AND DEFECTS AND IN ITS PRESENT CONDITION AND STATE OF
REPAIR AND WITHOUT ANY WARRANTIES WHATSOEVER OF MERCHANTABILITY OR OF FITNESS
FOR A PARTICULAR PURPOSE AND ALL OTHER REPRESENTATIONS AND WARRANTIES, EXPRESS,
IMPLIED OR STATUTORY. PDC ACKNOWLEDGES THAT THIS WAIVER IS CONSPICUOUS.

EXH B - 1
47
IN WITNESS WHEREOF, the Assignor has caused this Xxxx of Sale and
Assignment to be duly executed by its duly authorized officer as of the ____
day of November, 1997.

CIRCLE R DRILLING, LTD. 1981-A
Its General Partner

By: CIRCLE R DRILLING, INC.
Its General Partner

By:
---------------------------------
Xxxxx Xxx Xxxxxxxx
Vice President

EXH B - 2
48
APPENDIX I
TO
XXXX OF SALE AND ASSIGNMENT
FROM
CIRCLE R DRILLING, LTD. 1981-A
TO
XXXXXXXXX DRILLING COMPANY
(List of Assets Assigned)

A. Drilling Rig and Equipment

--------------

DRAWWORKS

Superior 1000-M Single Drum Drawworks, 1000 HP, XXXXX Grooved
f/1 1/4" Line, Makeup & Breakout Catheads, Overrunning Clutch,
Air Driller's Console Controls, Crown-O-Matic

COMPOUND

SUPERIOR 3-Engine In-Line Compound w/Single-Pedestal Pump
Drive, XXXXXXX-DENVER 2-Stage A/C Belt Drive

BRAKE

(2) PARMAC V-80 Single Hydromatic Brakes

ENGINES

EXH B - 3
49
MAST

DRECO 136'H x 22'W Cantilever Mast, 600,000# Static Hook Load,
Pin-Type, Crown Block w/(5) Sheaves, Fastline Sheave, 4"
Standpipe, Crown Safety Platform, Racking Board, Tong
Counterweights, Ladder, Xxxxxxx Climber, Mast Stand, Standpipe
Manifold w/4" & 2" Gate Valves, OTECO 5000 PSI Pressure Gauge

SUBSTRUCTURE

DRECO 18'6"H x 27'W x 50'L Slingshot Substructure w/Rotary
Beams, V-Door Ramp, (4) Stairs, Safety Rails, Deadline Anchor,
Air Volume Tank, Hydraulic Reservoir, (2) LANTEC Air Winches

PUMP

PUMP POWER

CAT D-379 TA Diesel Engine, S/N-68BO7069, w/Air Starter,
Radiator, Gauges, Torque Converter

ROTATING EQUIPMENT

HACKER 27 1/2" x 44 1/2" Rotary Table w/Split Master Bushing

XXXXXXX-DENVER 300-Ton Swivel

XXXXX Xxxxx Drive Bushing, Square Drive

Lower Xxxxx Valve

Inside BOP

EXH B - 4
50
TRAVELING EQUIPMENT

XXXXXXX-DENVER 300-Ton Block/Hook Combination w/(5) 60"
Sheaves, 1 1/4" Line, BJ 6150 Unimatic Hook

2 1/2" x 102" Elevator Links

WELL CONTROL EQUIPMENT

HYDRIL GK-10-5000 5000 PSI Annular Blowout Preventer

HYDRIL WP 11" 5000 PSI Double Blowout w/Pipe & Blind Rams

24"H x 11"ID Drilling Spool w/4-1/16" Outlets, (2) DEMCO
3-1/16" 5000 PSI & (2) DEMCO 2-1/16" 3000 PSI Gate Valves

24"H x 11"D 5000 PSI Spacer Spool

KOOMEY T20120 5-Station 120-Gallon Closing Unit, S/N-1 550601,
(12) 10-Gallon Accumulator Bottles, Triplex Charging Pump p/b
25 HP Electric Motor, (1) Air-Actuated Hydraulic Charging Pump

XXXXXXX 5-Station Remote Closing Unit, Mounted on Console

5000 PSI Blowout Preventer Choke Manifold, 5-Way Cross w/(2)
DEMCO 3-1/16" 5000 PSI & (2) 2-1/16" 3000 PSI Gate Valves,
Buffer Chamber, Mounted on Adjustable-Height Skid

RIG HOUSES

8'W x 30'L Triaxle Toolpusher's Trailer, Fully Furnished

10'W x 24'L Doghouse w/4'L Porch Extension, Round Top,
Knowledge Box, Lockers, Bench Storage, Cabinets, Parts Bins,
Fluorescent Lights, Heater, Skidded

10'W x 38'L Parts/Change House w/Round-Top, Lockers, Bench
Storage, Cabinets, Parts Bins, Workbenches, Fluorescent
Lights, Heater, Skidded

GENERATORS/UTILITY HOUSE

CAT SR-4 000 XX XX Xxxxxxxxx Xxx, XXX-0XX00000, p/b CAT 3412
DITA Diesel

Engine, S/N-38509492, w/Air Starter, Radiator, Gauges, Skidded

EXH B - 5
51
502FDR 000 XX XX Xxxxxxxxx Xxx, X/X-XX0000000, p/b CAT 3412
DITA Diesel Engine w/Air Starter, Radiator, Gauges, Skidded

QUINCY 350 Air Compressor p/b LISTER 2-Cylinder Air-Cooled
Diesel Engine, SN-US11078ST2A3110, w/Manual & Electric
Starter, Air Volume Tank

QUINCY 520 Air Compressor p/b 10 HP Electric Motor

SQUARE D Electrical Control Panel w/Switchboard

All Above Mounted in 10'W x 38'L Utility House w/Round Top,
Fluorescent Lights, Heater, Skidded

MUD SYSTEM

FLUID SYSTEMS High Speed Linear Screen Vibrating Shale Shaker
p/b 5 HP Electric Motor

DEMCO Desander w/12" Cone

DEMCO Desilter w/(1) 6" Cones

WATER/FUEL TANKS

10'Dia x 30'L Water Tank, Skidded

10'W x 8'H x 30'L Fuel Tank, Skidded w/Fuel Pump & Filter p/b
(2) 1 HP Electric Motors, Mounted on Stand

7'10"W x 3'H x 5'L 3-Compartment Lubester

EXH B - 6
52
HANDLING TOOLS

XXXXXXXXX-XXXX Pneumatic Pipe Xxxxxxx

XX Type B Rotary Tongs w/Extra Heads

BJ 3 3/8" BN to 5 1/2" BN 250-Ton Center Latch Pipe Elevators

BJ Type A 6 3/4" SS 250-Ton Center Latch Drill Collar
Elevators

XXXXXXX DU Long 4 1/2" Drill Pipe Slips

8" Drill Collar Slips

6 1/4" Drill Collar Slips

Approximately (1) Drill Collar Lift Subs

XXXXXXXXX-XXXX HUL-RO 9000 PSI Capacity Air Hoist,
S/N-RSH11417

Mud Bucket

AUXILIARY EQUIPMENT

XXXXXX XXXXXX E 600,000# Capacity Weight Indicator w/Pump
Pressure, Tong Line Pull & RPM Gauges, Console-Mounted

3 1/2"ID x 55'L Rotary Hose

(2)6"ID x 5'L & 8'L Suction Hoses w/Pipe

(2) 3 1/2"ID x 10'L Vibrator Hoses

42"H x 5'W x 60'L 2-Section Catwalk w/Steel Deck Steps

60"H x 8"W x 25'L Junk Box w/15'L Covered Porch f/Closing Unit

XXXXXX XXX Hydraulic/Electric Wireline Measuring Device,
S/N-633, w/.092" Measuring Line

Rathole & Mousehole

Fluorescent Rig Lights w/Wiring

Approximately 6000' of 1 1/4" Drill Line w/Spool Stand

EXH B - 7
53
BEAR Automatic Driller

(4) Sets of 42"H x 28'L Triangular Pipe Rack

Miscellaneous Spare Parts, Hand Tools, Valves, Fire
Extinguishers, Etc.

DRILL PIPE

12,000' (400 Joints) 4 1/2", Grade E, 16.60#, Range 2 Drill
Pipe w/4 1/2"XH, BN, HB Tool Joints, 5- 15/16" to 6"OD, PC

DRILL COLLARS

(24) 6 1/8"OD to 6 1/2"OD x 2"ID x 30'L Slick Drill Collars
w/4 1/2"XH Connections, HB, Recessed

EXH B - 8

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1 EXHIBIT 99.2 ASSET PURCHASE AGREEMENT

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