Option Agreement for Purchase of Ideal Rigs between National Oilwell Varco and Union Drilling Inc.

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Summary

National Oilwell Varco agrees to hold delivery slots for three Ideal Rigs for Union Drilling Inc. upon receipt of a $250,000 non-refundable deposit, with specific delivery dates in 2006. The deposit will be applied to the purchase if Union Drilling proceeds. An additional option for three more rigs is available for a $1,000,000 non-refundable deposit, with a 5% price increase, exercisable by April 30, 2006. If Union Drilling does not proceed, the deposits are forfeited. The agreement outlines payment terms and delivery commitments for the rigs.

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EX-10.18 10 file003.htm OPTION 
  [NATIONAL OILWELL VARCO LOGO OMITTED] November 7, 2005 Union Drilling Inc. Attn: J. Michael Poole Executive Vice President/Operations South Pittsburgh Technology Park 3117 Washington Pike Bridgeville, PA 15017 Re: Union Drillings purchase of Three Ideal Rigs Mike, It is a pleasure to reconfirm, per attachment Proposal NOI-10977-DWK Rev. 01dated 10/20/2005, National Oilwell Varco's commitment, upon receipt of $250,000.00 (Two Hundred Fifty Thousand Dollars), to hold delivery commitments of March 30th, May 15 and June 30,2006 for delivery of Standard Ideal rigs per our proposal through December 15, 2005 at which time the agreed payment terms of the proposal would apply. Additionally, it is agreed that the $250,000.00 deposit would be applicable to the three rig packages, but is not refundable should Union Drilling elect not to confirm purchase of the Ideal Rig Packages. Also, it is agreed that three additional Ideal Rig options for delivery Sept., Oct. and November will be given for a deposit of $1,000,000.00 (One Million Dollars) which is to be received on or before December 15, 2005. The deposit will be applicable to the additional three rig purchase but non refundable should Union Drilling elect not to proceed with the additional three rig option on or before April 30, 2006. Additionally, it is agreed the three rig option will be at a 5% (Five percent) increase of quoted price as per NOV Proposal NOI - 10977-DWK Rev. 01 dated 10/20/05 due to anticipated costs increases in materials, vendors and labor. Again, we look forward to working with Union Drilling on this project and please contact me if I can be of further help. Regards, /s/ Dave Crumpler - ---------------------- Dave Crumpler VP Sales and Marketing Attachment: Invoice cc: K. Neveu T. Seeliger