Purchase and Sale Agreement between National-Oilwell, L.P. and Union Drilling Inc. for Ideal Rig Equipment

  1 [NATIONAL OILWELL VARCO LOGO] December 8, 2005 PURCHASE AND SALE AGREEMENT NATIONAL-OILWELL, L.P. AND UNION DRILLING INC. This Purchase and Sale Agreement is made and entered this 8th day of December, 2005 between Union Drilling Inc. (UDI) with offices at South Pittsburgh Technology Park, 3117 Washington Pike, Bridgeville, PA 15017 and National-Oilwell, L.P. ("NOV"), with offices at 10000 Richmond, Houston, Texas 77042. In consideration of the mutual promises, covenants and agreements hereinafter set forth, the parties mutually agree as set forth below: AGREEMENT: The parties agree to include the following terms: 1. UDI hereby agrees to purchase rig equipment for three (3) Ideal Rigs from NOV, with an option to purchase three (3) more rigs. Such equipment is described in NOV's quotation number NOI-10977-DWK Rev 1 and shall be purchased in accordance with the prices set forth therein. The option rigs are described in quotation number NOI-11283-DWK dated 12/02/05. 2. Pursuant to the terms and conditions of the Letter of Intent ("LOI") executed by the parties on November 7,2005, UDI provided NOV with a initial deposit of $250,000.00 to secure the construction slots for the three (3) Ideal Rigs. Upon execution of this Purchase and Sale Agreement, the initial deposit shall be applied to UDI's total down payment costs. 3. UDI further agrees to remit to NOV a thirty percent (30%) down payment based on the total contract price for all rigs. 4. Delivery of the equipment is subject to Ex-works, NOV's facility - Houston (INCOTERMS 2000 Edition), subject to further tax implementation and clarification. 5. The delivery date of the first rig is scheduled for March 30, 2006. The second rig will be delivered on May 15,2006, and the third rig will be delivered on June 30, 2006. 6. A second milestone payment of 50% of the total contract price for each rig shall be made by UDI to NOV upon completion of the "Rig Up" of each rig. For clarification, "Rig-Up" shall be considered complete when both parties agree and/or verify that 85% of all components required per the quotation are in place and assembled within the drilling unit. 7. A third milestone payment of 20% of the total contract price for each rig shall be made by UDI to NOV upon completion of the factory acceptance tests.  2 8. The parties agree that the equipment and services provided under this Purchase and Sale Agreement shall be governed by NOV's standard terms and conditions included in its quotation number NOI-10977-DWK Rev.1. and which are hereby incorporated herein. Attachment 1: Standard Terms & Conditions Attachment 2: IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly executed by their duly authorized representatives on the date first above written. NATIONAL-OILWELL, L.P. UNION DRILLING COMPANY /s/ David C. Crumpler /s/ J. Michael Poole - --------------------- --------------------- David C. Crumpler J. Michael Poole V.P. Sales and Marketing Executive V.P./Operations  1 [NATIONAL OILWELL VARCO LOGO] December 8, 2005 SPECIAL CONDITIONS ------------------ The parties agree that these Special Conditions shall apply and supersede any corresponding terms in NOV's Standard Terms & Conditions. All other provisions in NOV's Standard terms and conditions remain "as is". Proposed Indemnity Provision for UDI's Agreement with NOV to Purchase "Ideal" Drilling Rigs. o NOV represents to UDI that NOV's Ideal Rig does not violate or infringe the patent or intellectual property right of any person and the sale of the Ideal Rigs to, and the purchase or use of the Ideal Rigs by, UDI will not violate or constitute an infringement or breach of any such rights. In the event that a claim is made against NOV or UDI for the sale or use of the Ideal Rig, NOV agrees to the following: o NOV AGREES TO INDEMNIFY, DEFEND AND HOLD UDI AND ITS OFFICERS, DIRECTORS AND AFFILIATES HARMLESS FROM AND AGAINST ALL LOSSES, CLAIMS, LIABILITIES, DAMAGES AND EXPENSE (INCLUDING REASONABLE ATTORNEY'S FEES) ARISING OUT OF OR BASED ON ANY BREACH OF THE FOREGOING REPRESENTATION AND WARRANTY, AND IN THE EVENT THAT A THIRD PARTY'S CLAIMS INVOLVES CLAIMS FOR RELIEF OTHER THAN THE MONETARY DAMAGES SUCH AS ENJOINING OR SEEKING TO PREVENT THE USE OF THE IDEAL RIG OR ANY PORTION THEREOF BY UDI, NOV'S INDEMNITY SHALL INCLUDE, PROMPTLY PROVIDING TO UDI, at NOV's election to either (I)SUBSTITUTE EQUIPMENT EQUIVALENT TO AN IDEAL RIG, WHICH IS NOT SUBJECT TO SUCH A CLAIM AND IS OTHERWISE NON-INFRINGING, or (ii) obtaining for UDI the right to use the Ideal Rig, or (iii) modify the Ideal Rigs owned by UDI in a manner acceptable to UDI so it becomes non-infringing, but are functionally equivalent, or (4) refund the purchase price. The above are the sole and exclusive remedies with respect to a violation of the above representation or warranty.  2 o Not withstanding anything contained herein to the contrary herein to the contrary, neither party shall be liable for any indirect or consequential damages sustained or alleged to have been sustained by the other party under this agreement NATIONAL-OILWELL, L.P. UNION DRILLING COMPANY /s/ David C. Crumpler /s/ J. Michael Poole -------------------------- --------------------------- DAVID C. CRUMPLER J. MICHAEL POOLE V.P. SALES AND MARKETING EXECUTIVE V.P./OPERATIONS  [NATIONAL OILWELL VARCO LOGO] PROPOSAL NATIONAL OILWELL VARCO IDEAL 1500 RIG PACKAGE PREPARED FOR: UNION DRILLING PROJECT: NOI PROPOSAL REF: NOI-10977-DWK REV. 01 10/20/05 THIS PROPOSAL IS SUBJECT TO OUR STANDARD AND ANY SPECIAL TERMS AND CONDTIONS OF SALE.  [NATIONAL OILWELL VARCO LOGO] Proposal - -------------------------------------------------------------------------------- Customer Name: UNION DRILLING Quote No: NOI-10977-DWK Rev. 01 Project Name: Date: 10/20/05 Cust Ref No: - -------------------------------------------------------------------------------- OUR REFERENCE: NOI-10977-DWK Rev. 01 YOUR REFERENCE: UNION DRILLING National Oilwell Varco is pleased to offer our equipment detailed in the following proposal. A minimum 30% non refundable down payment required at time of order, 50% at time of Rig-Up with balance at time of shipment (ex-works). These prices are valid for 30 days and will remain firm through delivery, subject to receipt of written purchase order. Deliveries of the Ideal Rig Packages are to be confirmed by Product Line Manager at March 30, May 15, June 30 (ex-works, Houston Facility) based on Standard Ideal Rig Packages, subject to prior sale. Delivery confirmation is base on receipt of down payment no later than Oct. 28, 2005. This quote is for standard production equipment and uses National Oilwell Varco standard components. Third party and/or regulator agency requirements are not considered part of standard production equipment and if required, may result in increased costs. This quote does not provide for, nor include documentation or third party certification. Charges for such certification, if required, will be quoted upon definition of your requirements Thank you for considering National Oilwell Varco. Best Regards, Page 2 of 58  [NATIONAL OILWELL VARCO LOGO] Proposal - -------------------------------------------------------------------------------- Customer Name: UNION DRILLING Quote No: NOI-10977-DWK Rev. 01 Project Name: Date: 10/20/05 Cust Ref No: - -------------------------------------------------------------------------------- SECTION RECAP PROPOSAL CURRENCY: U.S. DOLLARS 1. IDEAL RIG 1500 $23,955,000.00 TOTAL $23,955,000.00 Page 3 of 58  [NATIONAL OILWELL VARCO LOGO] Proposal - -------------------------------------------------------------------------------- Customer Name: UNION DRILLING Quote No: NOI-10977-DWK Rev. 01 Project Name: Date: 10/20/05 Cust Ref No: - -------------------------------------------------------------------------------- SECTION 1 IDEAL RIG 1500 1.1 IDEAL 1500 STANDARD RIG PACKAGE $23,955,000.00 QTY. 3 PKG IDEAL-1500 STANDARD IDEAL 1500 RIG PACKAGE IDEAL(TM) RIG SYSTEM The Ideal(TM) Rig, rated @ 1500 HP, can drill up to depths of 18,000 ft., encompassing a wide array of features and benefits. Designed and manufactured to achieve extraordinary gains in drilling efficiencies for light, safe and efficient rapid deployment. Enhanced safety features including low-set drawworks. All assembly labor is performed at ground level with more inherently safe assembly techniques. National Oilwell quality, reliability and support through National Oilwell worldwide network of parts and service locations. The IDEAL(TM) SYSTEM package comes complete with the following equipment: DRAWWORKS FAST MOVING RIG TRAVELING EQUIPMENT ROTARY EQUIPMENT ELECTRICAL POWER SYSTEM MUD PUMPS MUD SYSTEM HIGH PRESSURE MUD PIPING BOP CONTROL AND CLOSING SYSTEM INSTRUMENTATION AIR SYSTEM FUEL SYSTEM ELECTRICAL RIG-UP MECHANICAL RIG-UP MISCELLANEOUS EQUIPMENT DRAWWORKS EQUIPMENT GROUP Qty. 1 EA. JC50D Page 4 of 58  [NATIONAL OILWELL VARCO LOGO] Proposal - -------------------------------------------------------------------------------- Customer Name: UNION DRILLING Quote No: NOI-10977-DWK Rev. 01 Project Name: Date: 10/20/05 Cust Ref No: - -------------------------------------------------------------------------------- Drawworks LS-NOW model JC50D drawworks (without sandline drum), rated 1500HP, with: o 685mm Dia., 1245mm long grooved drum for 1-3/8" line o Integral dual electric motor drive o Disengaging auxiliary brake coupling o Four hoisting speeds o Disc brake system with water cooled discs, hydraulic service calipers and spring set emergency calipers, including H.P.U. o LT1170/250T low speed drum shaft clutch o LT1070/200T high speed drum shaft clutch o Two wire line turnbacks o Air-operated controls located at drillers position o All necessary chains except rotary table drive All air and hydraulic to terminate at a bulkhead on the drawworks skid. Panel will be remote mounted and provisions for fast moving disconnects of supply lines to panel are designed into the drawworks skid. Qty. 1 EA. LS-DWWK-CONT Drawworks Console LS-NOW to provide standard panel with instrumentation and control used when LS-NOW is integrating their drawworks and their vendor's disc brake. All controls, motors, instrumentation, transformers, electrical items 60 HZ. All instrumentation in imperial units, all labels in English. Panel to will be integrated with the other rig controls in the remote mounted at driller's position in the Doghouse. Qty. 1 EA. DS50-BC Brake Cradle For LS-NOW model DS50 eddy current brake installed on LS-NOW Model JC50D Drawworks. Qty. 1 EA. DS50 Auxiliary Electric Brake LS-NOW DS50 Eddy Current Brake o Rated brake torque 60.76 KNm o Applicable drilling range 3500-5000m o Max. exciting power 12 KW o Exciting coil insulation class/No. H/4 o Cooling water flow rate 285L/min Page 5 of 58  [NATIONAL OILWELL VARCO LOGO] Proposal - -------------------------------------------------------------------------------- Customer Name: UNION DRILLING Quote No: NOI-10977-DWK Rev. 01 Project Name: Date: 10/20/05 Cust Ref No: - -------------------------------------------------------------------------------- o Max. temperature of inlet water 42 (degree)C o Max. temperature of outlet water 72(degree) C o Weight 7285 kg C/W one(1) 503 water cooling unit Qty. 1 EA. DS50-MC Mounting Charge Mounting charge for LS-NOW DS50 auxiliary electrical brake. Qty. 1 EA. MODEL 2025A-LS Brake Control System National Oilwell Model 2025-A Primary Brake Control System, for application with a Model 6032 Eddy Current Brake. The system shall consist of the following: o Model 59926, 2025-A With H20 Alarm o Model 55858 Driller's Control Unit. (Intrinsically Safe) o Model 55860 Power Selector Unit (Intrinsically Safe) o 6600-32-0198 Power Transformer, 3 Phase, 30 kVA, 60 Hz, 480 Volt AC Primary, 220 Volt AC Secondary (Drip-Proof) Qty. 1 EA. MODEL 2025A-MS Brake Water Cooling Monitor System Baylor designed brake cooling water monitor system to monitor eddy current brake cooling water flow and temperature and provide an alarm for insufficient cooling water inlet flow rate and high cooling water outlet water temperature. In the event of either low cooling water flow or high cooling water temperature an alarm bell and red alarm and red alarm lamp will be activated. The system consists of the following: (2) Cooling water flow switches (intrinsically safe) (1) Cooling water temperature switch (intrinsically safe) (1) Set installation hardware (3) Installation/maintenance manuals o Model 57064, Flow Switch o Model 56236 Temp Sensor o Model 59924 Brake Sensor Junction Box Page 6 of 58  [NATIONAL OILWELL VARCO LOGO] Proposal - -------------------------------------------------------------------------------- Customer Name: UNION DRILLING Quote No: NOI-10977-DWK Rev. 01 Project Name: Date: 10/20/05 Cust Ref No: - -------------------------------------------------------------------------------- Display to be integrated with SDI and read out on the monitor at the driller's position. Qty. 2 EA. YZ08/YZ08A Drilling Motor - Drawworks Yongji YZ08/YZ08A drilling motor. SPECIFICATIONS o Rated power: 800 KW o Rated voltage: 750 V o Rated current: 1150 A o Rated speed: 970 RPM o Rated torque 8033.7 N.m o Max. current: 1600A o Max. torque: 12206.4 N.m o Exciting type series o Insulation class H o Cooling type: Air forced ventilation o Ex-proof type: Air pressurization o Weight: 3200 kg FEATURES o Self excited series field o Single shaft extension with standard hub o Pressurized connection box with bolts for connecting armature & field cables o High current, powerful torque and wide speed adjusting range at constant power o C/W blower driven by 15HP ex-proof AC motor, 460V, 60Hz and 230V spacer heater. Qty. 1 EA. CBS-1 Crown Block Saver LS-NOW type Toggle Valve, adjustable support and air piping. FEATURES Safety shut off device to limit block travel, installed on drawworks to actuate main drum brake when required travel is reached. FAST MOVING RIG Qty. 1 EA. LS-IDEAL-1500 Page 7 of 58  [NATIONAL OILWELL VARCO LOGO] Proposal - -------------------------------------------------------------------------------- Customer Name: UNION DRILLING Quote No: NOI-10977-DWK Rev. 01 Project Name: Date: 10/20/05 Cust Ref No: - -------------------------------------------------------------------------------- Fast Moving Rig Mast o Mast 142' height x 750,000# hook load capacity, upper and lower section. Crown, jib boom, ladder & racking board included. Upper section to contain block and reserve line spool while in transit, lower section to contain top drive while in transit. Crown contains (5) 50" sheaves, (1) 60" fast line sheave and (2) 42" deadline sheaves. o Ramp/Rail style mast raising system includes truck mounted mast alignment mechanism. o Dual mast stand (API Monogrammed). Substructure o 25' slingshot substructure, hydraulic cylinder raising, with pipe ramp and 3-stairs, bop handling rail. Drawworks Master Skid W/ 2 Mast Raising Cylinders and Brakewater Cooling Unit Reservoir, & Piping o Skid contains integral brake water cooling unit reservoir, brake water cooling pumps and piping are mounted on the skid, the drawworks mounts on the skid, the mast raising cylinders pin to and rest in cradles on the skid when not in use. (Mast and substructure API monogrammed.) Qty. 1 EA. 2302043 Hydraulic Power Unit Self-contained skid mounted hydraulic power unit with two hydraulic pumps. The first hydraulic pump is driven by a diesel engine and the second hydraulic pump is driven by a explosion-proof electric motor. Diesel engine and/or electric motor driven hydraulic pumps can be used separately or in-conjunction to power the hydraulic system Dual Electric/Diesel Hydraulic Power Unit consisting of the following: Hydraulic Pumps: (1) Variable displacement pressure compensated piston pump (electric) Flow: 40GPM @ 1800 RPM Pressure: 3000 PSI (1) Variable displacement pressure compensated through drive tandem piston pumps (diesel) Page 8 of 58  [NATIONAL OILWELL VARCO LOGO] Proposal - -------------------------------------------------------------------------------- Customer Name: UNION DRILLING Quote No: NOI-10977-DWK Rev. 01 Project Name: Date: 10/20/05 Cust Ref No: - -------------------------------------------------------------------------------- Flow: 65GPM @ 2300 RPM Pressure: 3000 PSI (2) Gear pump (Circulation pump) Displacement: 2 CIR Hydraulic Control Manifold and Components: No Pressure Filter (3) 20 SAE outlet ports (4) 24 SAE return ports (2) 0-5000 PSI pressure gauges o Hydraulic reservoir stainless steel 60 US gallons with all accessories. o Diesel Fuel Tank Stainless steel 150 gallons with all accessories o Pump to motor adapters and coupling sets o In tank return line filter housing and element 10 micron absolute o 3500 PSI relief valve (flanged mounted) o Flange mounted check valves o Hydraulic fan driven air to oil cooler o Tank mounted suction filters for pump supply o Low level and high temp shutdown Diesel Motor: o BF6L914 o 195HP @ 2300 RPM o Air cooled 6 cylinder four stroke o 12 volt starter o SAE C pump adapter & drive plate Electric Items: (1) 75 HP 1800 RPM 365TC 460 volt C face (Class 1, Div 2 G-D) (1) Remote stop/start station Skid: o A36 carbon steel skid o Oilfield skid with roll-off ends o Drip drain with drain valve Assembly: o All fittings and hose ends will be carbon steel. o Label all connections, pressure and supply indication points o Sand blast and paint all components including the skid o Assembly and testing of the HPU Page 9 of 58  [NATIONAL OILWELL VARCO LOGO] Proposal - -------------------------------------------------------------------------------- Customer Name: UNION DRILLING Quote No: NOI-10977-DWK Rev. 01 Project Name: Date: 10/20/05 Cust Ref No: - -------------------------------------------------------------------------------- Notes: 1. All electric motors are 60 HZ. 2. All gauges and instrumentation to display imperial units. 3. All Equipment name plates to be in English 4. Five (5) copies of Operation and Maintenance manuals in English) Qty. 1 EA. STDPIPE-1 4", 5000psi WP Standpipe Qty. 1 EA. SPM-1 Standpipe Manifold One (1) Single 4" standpipe manifold to connect to standpipe. Manifold Consisting of: o One (1) 4" 5,000# WP BW mud gate valve o One (1) 2" 5,000# WP WN mud gate valve (kill, fill) o Two (2) 4" fig 1002 hammer unions o One (1) 2" connection for pressure gauge with 1002 hammer union o One (1) 2" 1502 hammer union & wing nut connection for pressure transducer. o One (1) Pressure gauge 0-6000# 2" NPT connection o Includes X-ray, hydrotest and paint. Qty. 1 EA. VH-1 Vibrator Hose Connects standpipe manifold to drill floor connection. Qty. 2 EA. TWB-1 Tong Weight Box Complete with pulleys and lines, LESS weight material. Qty. 1 EA. 2300-0-EP Safety Climbing Device Mast ladder safety climb with three safety belts. Rope lock 2300-0-EP with 5/8" line. Qty. 3 EA. CB-TS Page 10 of 58  [NATIONAL OILWELL VARCO LOGO] Proposal - -------------------------------------------------------------------------------- Customer Name: UNION DRILLING Quote No: NOI-10977-DWK Rev. 01 Project Name: Date: 10/20/05 Cust Ref No: - -------------------------------------------------------------------------------- Climbing Belt, Complete with Tail Rope Qty. 1 EA. DLS-H-5000-1-3/8 Drill Line Spooler Hydraulic Powered Drill Line Stand designed to accommodate steel reel with 5000 Ft. 1-3/8" Drill Line. Qty. 5000 FT 800091-1-3/8 1-3/8" Drilling line, 6X19, EIPS-PF-RI, IWRC Qty. 1 EA. WC-D-BOPH Bop Beams Trolley rail on Sub for hoisting and positioning BOP stack. Qty. 1 EA. MR-CB-2CYLXHC National Oilwell Two Cylinder Hydraulic Catworks Hydraulic catworks mounted in mast. Individual hydraulic makeup & breakout cylinders. Includes all wire line and all hydraulic piping for the two cylinder catworks. SPECIFICATIONS o Breakout and Makeup Cylinders - 4" Bore x 8' Stroke o Maximum Speed - 67' Per Min. at 35 GPM o Maximum Pull - 20,000# at 2,000 PSI Qty. 1 EA. Q250 Spinning Wrench, Q250 Air Spinner: 12cubic meters/min Applicable Pipe: 3-1/2" - 10" Norm Power: 16HP Spinning Speed: 108-38 rpm Spinning Torque: 1094-2500 NM Qty. 1 EA. HYD-PIPING Hydraulic Piping for Mast and Substructure For mast and substructure raising/lowering and other hydraulic functions (not including top drive). Page 11 of 58  [NATIONAL OILWELL VARCO LOGO] Proposal - -------------------------------------------------------------------------------- Customer Name: UNION DRILLING Quote No: NOI-10977-DWK Rev. 01 Project Name: Date: 10/20/05 Cust Ref No: - -------------------------------------------------------------------------------- Qty. 1 EA. LFLH-75-C-8C-R-PVF National Oilwell Dreco Rotary Slip Deadline Anchor, Lug Type Floor Mount Drum is designed to rotate completely around the shaft during line slipping. (National Oilwell Dreco Exclusive) Drum design includes a lead in groove to a smooth surface. Rollers guide the line across the drum surface as the drum rotates. Designed and Manufactured to API 8C, PSL-1 For 1-3/8" Wireline size. Has double clamp for use with PVF wireline. Have lugs for mounting to floor with two pins. Model: LFLH-75-C-8C-R-PVF Mounting: Lug Floor Mount Orientation: Left Hand Load Cell (Not Supplied): E-551 Compression Type Maximum Deadline Load: 75,000 LBS. (34 mT) Drum Diameter: 24" (609.6mm) Approximate Weight: 2212 LBS. (1005 kg) Coating: Three Coat Epoxy Paint System Standard color: White TRAVELING EQUIPMENT Qty. 1 EA. YC450 LS-NOW Model YC450 Traveling Block FEATURES o Heavy steel fabricated main frame o Heavy wireline guards o Steel sheaves with induction hardened API wireline grooves o Tapered roller bearings in sheaves o Oil quenched and tempered alloy steel shaft with individual grease passages to each bearing o High strength steel becket o Designed to API standard 8A SPECIFICATIONS Page 12 of 58  [NATIONAL OILWELL VARCO LOGO] Proposal - -------------------------------------------------------------------------------- Customer Name: UNION DRILLING Quote No: NOI-10977-DWK Rev. 01 Project Name: Date: 10/20/05 Cust Ref No: - -------------------------------------------------------------------------------- o Model: YC450 o Max. hook load: 4500KN o Number of sheaves: 6 o Sheave diameter: 1524mm (60") o Shaft diameter: 254mm (10") o Wireline size: 1-3/8" o Approximate length: 3075mm o Approximate width: 1600mm o Approximate depth: 800mm o Approximate weight: 8135kg Qty. 1 EA. DG450 LS-NOW model DG450 Hook Complete with conventional bail, safety positioner, built in hydraulic snubber and rotation lock. Built to API 8A Max. hook load: 4500KN Overall dimensions (L x W x H mm): 2950 x 890 x 883 Weight: 3496kg Qty. 1 EA. SL-450-5 Ls-National Oilwell Model Sl-450-5 Spinning Swivel With spinning function. Equipped with standard bails. The wash pipe and packing assembly are cartridge type and can be replaced on the floor without disconnecting the rotary hose and/or gooseneck. The gooseneck is provided with an outlet for wireline logging. Equipped with 4" API hose connection. Conforms to API specification 8A. Maximum Static Load Rating 458.87 tonne (505.82 tons) Maximum Speed 300 RPM Maximum Working Pressure 35 MPa (5,000 PSI) Page 13 of 58  [NATIONAL OILWELL VARCO LOGO] Proposal - -------------------------------------------------------------------------------- Customer Name: UNION DRILLING Quote No: NOI-10977-DWK Rev. 01 Project Name: Date: 10/20/05 Cust Ref No: - -------------------------------------------------------------------------------- Hook Clearance over the Gooseneck 549 mm (21.6 in.) Diameter of Stem 75 mm (2.95 in.) Coupling Thread to Stem 7-5/8" Reg. LH Coupling Thread to Kelly 6-5/8" Reg. LH Manufactured in China at Lanzhou LS-National Oilwell Facility o Spinner controls mounted at drillers position. Qty. 1 PKG EV-LK 350 Ton Elevator Links, Capacity 350T, size 108" API 8A. ROTARY EQUIPMENT Qty. 1 ZP-375 Lanzhou LS/National Oilwell 37-1/2" Rotary Table o Built to API 7K o Opening dia. 952.5 mm (37-1/2") o Static load rating 5858 KN (1,300,000 lbs) o Max. working torque 32362 Nm (23,900ft-lbs) o Weight 7548 kg Qty. 1 EA. IRD-LS-NOW Independent rotary drive for LS-NOW ZP375 rotary table includes: o Coupling, with Spacer, between Rotary and Transmission o 2-Speed IRD Transmission (Roller Chain Type) o Coupling between Transmission and DC Motor o Inertia Brake for IRD Components Above components to be assembled with rotary and motor (not included) as one unit. Above modified to directly mount drive in substructure. Qty. 1 Full Guard, Included in Item. IRD-LS-NOW Qty. 1 EA. YZ08/YZ08A Page 14 of 58  [NATIONAL OILWELL VARCO LOGO] Proposal - -------------------------------------------------------------------------------- Customer Name: UNION DRILLING Quote No: NOI-10977-DWK Rev. 01 Project Name: Date: 10/20/05 Cust Ref No: - -------------------------------------------------------------------------------- Motor - Rotary Table Yongji YZ08/YZ08A drilling motor. SPECIFICATIONS o Rated power: 800 KW o Rated voltage: 750 V o Rated current: 1150 A o Rated speed: 970 RPM o Rated torque 8033.7 N.m o Max. current: 1600A o Max. torque: 12206.4 N.m o Exciting type series o Insulation class H o Cooling type: Air forced ventilation o Ex-proof type: Air pressurization o Weight: 3200 kg FEATURES o Self excited series field o Single shaft extension with standard hub o Pressurized connection box with bolts for connecting armature & field cables o High current, powerful torque and wide speed adjusting range at constant power o C/W blower driven by 15HP ex-proof AC motor, 460V, 60Hz and 230V spacer heater. Qty. 1 EA. D1636 Assembly of LS-NOW rotary drive components, motor & rotary table into substructure. Qty. 1 EA. Master Bushing Bowl LS-NOW split body pin drive master bushing for ZP375 rotary table, complete with API No.3 bowl, lifting sling, and bit breaker plate for ZP375 rotary table. Qty. 1 EA. Master Bushing Bowl LS-NOW No. 2 Bowl for 10- 3/4" and 9 -5/8" Pipe. Page 15 of 58  [NATIONAL OILWELL VARCO LOGO] Proposal - -------------------------------------------------------------------------------- Customer Name: UNION DRILLING Quote No: NOI-10977-DWK Rev. 01 Project Name: Date: 10/20/05 Cust Ref No: - -------------------------------------------------------------------------------- Qty. 1 EA. Master Bushing Bowl LS-NOW No. 1 Bowl for 13-3/8" and 11- 3/4" Pipe Qty. 1 EA. Split Casing Bushing LS-NOW 37-1/2" x 20" Split casing bushing for LS-NOW 37-1/2" Rotary Table Qty. 1 EA. Kelly Bushing LS-NOW pin drive roller Kelly bushing for 5-1/4" HEX KELLY Qty. 1 EA. Hex Kelly 5-1/4"x40' hex. Kelly. (5" Drill pipe), Drill Pipe connection NC50- 4-1/2IF. Qty. 1 EA. Upper Kelly Valve Mudanjiang Petro. machinery plant mode Griffith LKV-724 Kelly Valve, 7-3/4" OD / 3-1/16" ID 6-5/8" reg LH (Upper) ELECTRICAL POWER SYSTEM Qty. 1 EA. 6715-00 SCR House System Description Item Qty Description 1 3 Detroit Diesel V-1600 engines driving a 1750 kVA, 600 VAC, 60 Hz generator. 2 1 1500 HP Drawworks, driven by two (2) series wound Yongi DC motors. 3 2 1600 HP Mud Pumps, each driven by two (2) series wound Yongi DC motors. 4 1 1000 HP Rotary Table driven by one (1) series wound Yongi DC motor. Page 16 of 58  [NATIONAL OILWELL VARCO LOGO] Proposal - -------------------------------------------------------------------------------- Customer Name: UNION DRILLING Quote No: NOI-10977-DWK Rev. 01 Project Name: Date: 10/20/05 Cust Ref No: - -------------------------------------------------------------------------------- SCOPE OF NATIONAL OILWELL SUPPLIED EQUIPMENT National Oilwell to provide the following equipment Item Qty Description 1 4 Model 1400 SCR control cubicles 2 3 Model 1400 Engine/Generator control cubicles 3 1 Blank cubicle for future Gen Control 4 1 Synchronizing system 5 1 Ground detection system 6 1 Hands off circuit 7 1 Power limit system 8 1 PLC System 9 1 Driller's console 10 1 Driller's foot throttle 11 1 Drawworks dynamic brake system 12 1 Baylor Brake Control 13 1 600 Volt feeder section 14 1 Transformer section 15 1 MCC section 16 1 Power Control House 1) MODEL 1400 SCR CONTROL CUBICLE NOI will supply four (4) Model 1400 SCR Drive Control cubicles each to include: Item Qty Description 1 1 AC Input, 1600AF, Stationary Mount, Circuit Breaker Switch with UV trip and auxiliary contacts. 2 1 Voltmeter, 0 - 1000 VDC 3 1 Ammeter, 0 - 2000ADC 4 1 SCR "ON" indicating lamp, (Red) 5 1 6 pulse, 1800 amp, 750 VDC, vertical air cooled SCR Bridge. The bridge shall be protected using semiconductor type fuses with form C contacts, which are activated when the fuse opens. 6 1 Surge Suppression "ON" Indicating Lamp (Green). Surge Suppression will be provided to clamp any transient voltages, which could be damaging to the SCR devices. The surge suppressor will consist of a fused set of metal oxide varistors (MOVs). 7 1 Set of DC assignment contactors to allow for multiple assignments of the bridge. 8 1 DC Control Module with: o Pulse thyristor-firing circuits with "Hard Firing" outputs. The synchronizing signal originates Page 17 of 58  [NATIONAL OILWELL VARCO LOGO] Proposal - -------------------------------------------------------------------------------- Customer Name: UNION DRILLING Quote No: NOI-10977-DWK Rev. 01 Project Name: Date: 10/20/05 Cust Ref No: - -------------------------------------------------------------------------------- directly from the AC line so that no pilot generator is required. o High speed current regulator with twenty-millisecond response. Automatic current limit load sharing for motors driving the same shaft and driven by separate armature supplies no setup or adjustment required. o Individual control of current limit for all drilling functions. The rotary table torque limit will be mounted in the driller's console. o Ramp generator on the Drawworks current regulator to control the rate of rise of motor torque. o Motor speed regulators for the Mud Pumps, Drawworks, and Rotary Table (Top Drive). Each regulator will be interlocked with its related assignment contactor. o All controls are designed to be "Foolproof", no preset sequence of operation is required. The operator may push any button at any time and the system will either follow when it is safe or block the command if it is not consistent with the operation. o Manual firing control for emergency operation. o Thyristor gate suppression at approximately 150% of the bridge rating. o "Zero Throttle Interlock", the hand throttle must be returned to zero after an assignment change before the motor can be powered. o Module Fault Finder includes a meter and switch mounted on the front for monitoring critical internal voltages 2) MODEL 1400 ENGINE/GENERATOR CONTROL CUBICLE NOI will supply three (3) Model 1400 Generator Control cubicles each to include: Item Qty Description 1 1 2000AF, Stationary Mount Circuit Breaker with LI solid state trip unit, manually charged, electric closing solenoid, UV release and necessary auxiliary contacts. 2 1 Circuit Breaker Pushbutton "CLOSE" 3 1 Ammeter Meter 4 1 Kilowatt Meter 5 1 Kilovar Meter 6 1 Generator Hour Meter 7 1 Engine Control Pushbutton "OFF IDLE-RUN" Page 18 of 58  [NATIONAL OILWELL VARCO LOGO] Proposal - -------------------------------------------------------------------------------- Customer Name: UNION DRILLING Quote No: NOI-10977-DWK Rev. 01 Project Name: Date: 10/20/05 Cust Ref No: - -------------------------------------------------------------------------------- 8 1 Generator "RUN" Indicating Lamp (White) 9 1 Generator "ON LINE" Indicating Lamp (Red) 10 1 Generator Sync Indicating Lamp (Amber) 11 1 Manual Engine Speed Adjust Potentiometer 12 1 Manual Voltage Adjust Potentiometer 13 1 Engine Generator Solid State Control Module with: o Voltage Regulator o Electronic Governor Control - Response time of .8 second typical - Maximum load unbalance between engines (one hot, one cold) at all points, no load to full load, +5% of its rated load - Working temperature range of 30(degree)C to +50(degree)C - No load to full load regulation of +1% - Governor electronics arranged for battery power to advance throttle for "black start" capability. o Reactive power is shared between the generators by reactive power droop compensation o Real power is shared by a master / slave command line o Exciter power supply, 12 amp maximum current (the exciter current limit is set to suit the individual exciter) o Exciter power supply maximum voltage is 240 volts (this is set by the choices of the exciter transformer and the generator self excitation requirements) o Protective functions built into the regulator are: - Reverse Power Trip - Under Frequency Trip - Over voltage Trip - Over speed Trip - Frequency / Voltage Scheduled for Engine Operation at Idle Speeds 3) BLANK CUBICLE FOR FUTURE GEN CONTROL National Oilwell Varco will supply one (1) blank cubicle for future Gen Control. This cubicle will 4) SYNCHRONIZING SYSTEM NOI will supply a Synchronizing System that will consist of the following items: Item Qty Description 1 1 Synchronizing System Page 19 of 58  [NATIONAL OILWELL VARCO LOGO] Proposal - -------------------------------------------------------------------------------- Customer Name: UNION DRILLING Quote No: NOI-10977-DWK Rev. 01 Project Name: Date: 10/20/05 Cust Ref No: - -------------------------------------------------------------------------------- (1) - Synchronizing selector switch (2) - Synchronizing lights (clear) (1) - Synchroscope (1) - Synch check relay (1) - Voltmeter--main bus & Generator (0 750 V) (1) - Frequency Meter--main bus & Generator (50 - 70 Hz) 5) GROUND DETECTION NETWORK NOI will supply a Ground Detection Network consisting of the following items: Item Qty Description 1 1 Ground Detection Circuit (3) - Ground Detection Lights (1) - Percent DC Ground Meter (1) - Percent AC Ground Meter (1) - Test Pushbutton (1) - Audible Alarm to be mounted on the exterior of the house (1) - Strobe Light to be mounted on the exterior of the house (1) - Alarm Acknowledge Pushbutton 6) HANDS-OFF CIRCUIT (HOC) The HOC will supply power for the engine starting circuit and the pulse pick-up circuit in each of the AC generator control modules. The items included will be: Item Qty Description 1 1 Set of CPT's. 2 1 Set of fuses. 3 1 Single-phase diode bridge. 4 2 12V Batteries 7) POWER LIMIT SYSTEM The Power Limit Circuit will monitor the KW & KVA of each engine generator set. If either of these parameters reach its limits, the Power Limit Circuit will reduce the power being delivered to the loads so that the load on each generator is held at its limit until the loads on the SCR drives are reduced (by other action) to a level below the generator limit. A meter on the Driller's Console indicates percent Power Limit. A warning lamp is illuminated on the Driller's Console at a load level just below the power limit. Page 20 of 58  [NATIONAL OILWELL VARCO LOGO] Proposal - -------------------------------------------------------------------------------- Customer Name: UNION DRILLING Quote No: NOI-10977-DWK Rev. 01 Project Name: Date: 10/20/05 Cust Ref No: - -------------------------------------------------------------------------------- 8) PLC SYSTEM The System Host PLC is a high speed, versatile modular mini-PLC. The PLC is used for serial communication with remote consoles and other rig devices. Additionally, the PLC incorporates the SCR bridge assignment logic. The PLC shall consist of the following. Item Description 1 Siemens S7-300 Modular Mini-PLC 2 32 Bit, Fixed & Floating Point CPU 3 Up To 1024 Digital Inputs / 1024 Digital Outputs 4 Up To 256 Analog Inputs / 256 Analog Outputs 5 Complete Instruction Set With "Built-In" Functions 6 Built-In Self Diagnostics 7 Fiber Optic Communication Capability 9) DRILLER'S CONSOLE The console will be constructed of 12-gauge stainless steel and the hand throttle wheels of solid stainless steel. Each hand wheel will drive two (2) independent potentiometers to provide 100% backup of the throttle function. The console will be watertight and include a gasket type door. The console will be equipped with purging for application in a Class I Division 2, Group D Hazardous area. A rig air supply fitting will be provided for connection to an external 85 to 150 psi dry air supply. An internal pressure regulator is included to maintain a positive interior pressure relative to the ambient. NOI to supply a driller's console with the following controls and indicators: Item Qty Description 1 1 SCR Assignment Switch 2 1 Rotary Table Speed Control 3 1 Rotary Table "FWD OFF REV" 4 1 Drawworks Speed Control 5 1 Drawworks Switch "FWD OFF REV" 6 2 Mud Pump Speed Controls 7 2 Mud Pump "ON-OFF" Switch 8 1 Rotary Table Torque Limit Selector Switch 9 1 Rotary Table Torque Meter Scaled for Amps 10 1 PLC "By-Pass" Switch 11 1 Power Limit Meter 12 3 Generator "ON" Lamps (Red) 13 4 SCR "ON" Lamps (Green) 14 1 Drawworks Blower "ON" Lamp (White) * 15 1 Rotary Table Blower "ON" Lamp (White) * 16 2 Mud Pump Blower "ON" Lamps (White) * Page 21 of 58  [NATIONAL OILWELL VARCO LOGO] Proposal - -------------------------------------------------------------------------------- Customer Name: UNION DRILLING Quote No: NOI-10977-DWK Rev. 01 Project Name: Date: 10/20/05 Cust Ref No: - -------------------------------------------------------------------------------- 17 1 Power Limit Lamp (Amber) 18 1 Console Purge Loss Lamp (Amber) * 19 1 PLC "OK" indicator lamp (Amber) 20 1 Ground fault Indication Lamp (Amber) * 21 1 Audible alarm activated for items marked (*) 22 1 Alarm Silence Button 23 1 PLC I/O module for PLC communication 24 1 AC Emergency Shutdown Push Button (All Engine Kill) 25 1 DC Emergency Shutdown Push Button 26 Lot Pyle National plugs & receptacles 10) DRILLER'S FOOT THROTTLE The foot throttle is constructed of 12-gauge No.304 stainless steel throughout, built to withstand the environment normally encountered on the rig floor. It includes dual stainless steel return springs to provide a fail safe return to the off position in the event of a spring failure. Provisions for a dry air connection to the electrical compartment are also included. The foot throttle connects directly to the Driller's console through a three-conductor cable. 11) DRAWWORKS DYNAMIC BRAKE SYSTEM National Oilwell will provide a Drawworks Dynamic Brake system. The dynamic brake will slow the Drawworks A motor from full speed to some preset cathead speed within 10 to 15 seconds after the foot throttle is released. The power generated by the freewheeling DC motor is fed into a stainless steel grid resistor bank mounted out on the porch. During normal operation of the Drawworks, the dynamic brake is not connected. If at any time the motor speed is higher than the DW throttle setting and the foot throttle is not in use, the brake circuit will engage and reduce the motor speed to the hand throttle setting. 12) BAYLOR BRAKE CONTROL SYSTEM National Oilwell's Baylor Primary Brake control system, for application with and eddy current brake. The system shall consist of the following: Item Qty Description 1 1 Air cooled 25 kW SCR unit with door mounted alarm minimic panel (NEMA 1) 2 1 Driller's control unit (intrinsically safe) 3 1 Power selector unit (intrinsically safe) 4 1 Power transformer, 3 phase, 30 kVA, 60 Hz, 480 Volt AC primary, 220 Volt AC secondary (Drip-proof) Page 22 of 58  [NATIONAL OILWELL VARCO LOGO] Proposal - -------------------------------------------------------------------------------- Customer Name: UNION DRILLING Quote No: NOI-10977-DWK Rev. 01 Project Name: Date: 10/20/05 Cust Ref No: - -------------------------------------------------------------------------------- 13) 600 VOLT FEEDER SECTION NOI will provide a Feeder Section in the line-up containing the following items: Item Qty Description 1 1 1200 AF Circuit breaker for MCC transformer. 2 1 1600 AF Circuit breaker for Top Drive Feeder 14) TRANSFORMERS NOI will provide the following ventilated dry type transformers: Item Qty Description 1 1 1000 kVA, 600:480 Volt, 60 Hz, three phase, aluminum wound, NEMA 3R enclosed MCC transformer. 15) 480 VOLT MOTOR CONTROL CENTER National Oilwell will provide the following vertical sections of MCC. The MCC will be NEMA type, 480 Volt, 60 Hz, with individual breakers. The horizontal bus will be copper and suitably rated. The vertical bus will be copper and rated for 300 amps. A copper ground bus will run the full length of the MCC line up. Each starter will be complete with a 480:120 control power transformer fused on the primary and secondary (magnetic only) breaker, a contactor and an ambient compensated overload element (heater). LEGION: FVNR = Full Voltage Non-Reversing HOA = Hands - Off - Automatic 3WRC = 3 Wire Remote Control AF = Amp Frame AT = Amp Trip Item HP Size Type Control Function 1 1.5 1 FVNR HOA Mud Pump #1 Lube Oil Pump 2 3 1 FVNR HOA Mud Pump #1 Linear Wash Pump 3 15 2 FVNR HOA Mud Pump #1A Blower 4 15 2 FVNR HOA Mud Pump #1B Blower 5 60 4 FVNR HOA Mud Pump #1 Charging Pump 6 1.5 1 FVNR HOA Mud Pump #2 Lube Oil Pump 7 3 1 FVNR HOA Mud Pump #2 Linear Wash Pump 8 15 2 FVNR HOA Mud Pump #2 A Blower 9 15 2 FVNR HOA Mud Pump #2 B Blower 10 60 4 FVNR HOA Mud Pump #2 Charging Pump 11 15 2 FVNR HOA DWA Blower Page 23 of 58  [NATIONAL OILWELL VARCO LOGO] Proposal - -------------------------------------------------------------------------------- Customer Name: UNION DRILLING Quote No: NOI-10977-DWK Rev. 01 Project Name: Date: 10/20/05 Cust Ref No: - -------------------------------------------------------------------------------- 12 15 2 FVNR HOA DWB Blower 13 15 2 FVNR HOA RT Blower Motor 14 25 2 FVNR 3WRC Trip Tank #1 15 25 2 FVNR 3WRC Trip Tank #2 16 100 4 FVNR 3WRC Mud Mix Pump#1 17 100 4 FVNR 3WRC Mud Mix Pump #2 18 100 4 FVNR 3WRC Spare 19 100 4 FVNR 3WRC Desander Pump 20 100 4 FVNR 3WRC Desilter Pump 21 60 4 FVNR 3WRC Degasser Pump 22 25 2 FVNR 3WRC Water xfer Pump #1 23 25 2 FVNR 3WRC Water xfer Pump #2 24 25 2 FVNR HOA Brake Cooling Loop #1 25 25 2 FVNR HOA Brake Cooling Loop #2 26 75 4 FVNR 3WRC Main HPU 27 25 2 FVNR 3WRC Centrifuge FD Pump #1 28 75 4 FVNR 3WRC Centrifuge #1 29 25 1 FVNR 3WRC Centrifuge FD Pump #2 30 75 4 FVNR 3WRC Centrifuge #2 31 10 1 FVNR HOA Spare 32 10 1 FVNR 3WRC Spare 33 25 2 FVNR HOA Spare 34 25 2 FVNR 3WRC Spare 35 50 3 FVNR 3WRC Spare 36 75 4 FVNR 3WRC Spare Feeder Circuit Breakers Item AT/AF Function 1 150/150 Air Compressor #1 2 150/150 Air Compressor #2 3 150/150 Lighting transformer 4 100/100 Koomey Unit Pump #1 5 100/100 Spare 7 40/60 House AC #1 8 50/60 Baylor Brake Supply 9 30/30 HPU Disc Brake 10 40/60 House AC #2 11 150/150 Mud Tank Panel 12 50/60 Accumulator BOP 14 30/30 Spare 15 20/30 Dog House A/C Feeder 16 15/30 Dog House Purge Feeder 17 60/60 Spare 18 15/30 Block Heater #1 Page 24 of 58  [NATIONAL OILWELL VARCO LOGO] Proposal - -------------------------------------------------------------------------------- Customer Name: UNION DRILLING Quote No: NOI-10977-DWK Rev. 01 Project Name: Date: 10/20/05 Cust Ref No: - -------------------------------------------------------------------------------- 19 15/30 Block Heater #2 20 15/30 Block Heater #3 21 15/30 Spare 22 150/150 Spare 16) POWER CONTROL HOUSE The Power Control House will be designed for transportation by an oilfield trailer. The house size will be approximately 10' W x 46' L x 10'6" H. The house columns and ceiling frame will be constructed from structural steel seam welded. The outside shall be fabricated from twelve-gauge sheet steel. All corners are to be formed by bending leaving no sheet edge exposed. Three of the walls will be insulated with three-inch thick polystyrene block insulation. The floor and the wall with the receptacles and plugs will not be insulated. The inside surface of the walls will be finished with a sandwich style insulating board with aluminum sheet interior. A rubber neoprene mat will run the full length of the interior aisle of the House. One (1) 42 circuit 120Y208 volt, 3 phase, 4 wire panel board will be mounted on an interior wall for lighting and other required needs. Four (4) fluorescent lighting fixtures (2 40WRS) will be supplied for aisle lighting. Two (2) 120 volt duplex receptacles will be included. An emergency lighting fixture will also be included in the center interior of the House. Two (2) steel doors with panic hardware will be supplied, one at each end and on opposite sides of the house. Both doors shall be designed to open to the outside by pushing down on the opening bar. The two (2) air conditioning units will be of the split unit type with the condenser and evaporator sections mounted separately. Each unit will be rated at 7.5 tons. The hot air generated by the SCR bridges will be discharged out the top of the cubicles and contained within the dead air space between the ceiling and the roof. This air will then be ducted to the return air side of the evaporator sections of the units. Transformers and air conditioning condenser units will be mounted on a covered porch at one end of the house. The incoming power connections will be located in a recessed box located at the top and on one side of the house and spaced Page 25 of 58  [NATIONAL OILWELL VARCO LOGO] Proposal - -------------------------------------------------------------------------------- Customer Name: UNION DRILLING Quote No: NOI-10977-DWK Rev. 01 Project Name: Date: 10/20/05 Cust Ref No: - -------------------------------------------------------------------------------- approximately eight feet apart. This location is on the same side of the house as the SCR line up. The receptacles for the outgoing DC power and rig AC loads are to be installed in panels which slant downward to relieve stress on the outgoing cables, except for the receptacles located at the very bottom of the plug panel, which will not be slanted downward because of the physical limitations of their location. The mating plugs for the receptacles will also be supplied with the house. The exterior of the house will be cleaned with a sweep blast of sand to remove scale and oxidation. The exterior coating will consist of a sub coat of primer and a topcoat of urethane linear white. The interior floor will be painted ANSI gray. Qty. 3 EA. R163-7M36 Generator Set Stewart & Stevenson packaged Model R1630F900 generator sets, 600 volt, 3 phase, 60 Hz, 0.6 PF, 1800 RPM, equipped as follows: Diesel Driver o Detroit Diesel 16V2000/G80, Model R163-7M36 o 1350 BHP @ 1800 RPM, Prime Rated o 16V configuration o 4 stroke direct injected o Bore and stroke 5.12 x 5.91 (130 x 150); 1944 CID (31.88L) o Turbocharged (dual) o Charge air cooled, SPCC o SAE "0" flywheel housing o Detroit Diesel Electronic Controls MDEC o Provides engine monitoring and control o Electronic (isochronous) governing o Accessory Package A. Instrumentation o DDC Electronic Display Module. Provides engine monitoring functions to include: o Engine RPM o Coolant temperature o Oil pressure o Battery voltage o Diagnostic function o Engine hours o Overspeed shutdown. Independent of electronic controls. o Magnetic pick-up Page 26 of 58  [NATIONAL OILWELL VARCO LOGO] Proposal - -------------------------------------------------------------------------------- Customer Name: UNION DRILLING Quote No: NOI-10977-DWK Rev. 01 Project Name: Date: 10/20/05 Cust Ref No: - -------------------------------------------------------------------------------- o Air inlet shut down o MDEC sensing of following alarm and shutdown functions: o High coolant temperature alarm o Low coolant level alarm o High oil temperature alarm B. Air cleaner. Dual dry type for standard service, mounted with pre-cleaner caps. C. Lubricating System o Filter, replaceable spin-on. o Gear driven oil pump. o Angularity limits: 30(degree) Front up/down, 30(degree) side tilt. o Integral oil cooler D. Fuel System o Racor filter/moisture separator with replaceable element. o DDC secondary filter, replaceable spin-on o MDEC Electronic Unit Injector (EUI) E. Start System o Air starter, bell housing mounted, complete with actuator valve and filter. F. Electrical System o Dual 12V HD batteries, mounted, marine boxes o Engine driven 24V alternator, 70 amp (battery and alternator package may be deleted if 24V power available from others for electronic engine controls) o MDEC wiring harness o DDC Electronic Computer Module (ECU), mounted G. Cooling System o Radiator, front mounted, engine driven blower type fan, separate Circuit Charge Cooling (SCCC) equipped with dual cores o Separate Circuit Charge Air Cooling (SCCC) engine systems. o Jacket water heater, 110/220V o 115(degree)F ambient sizing H. Exhaust System o Exhaust wye, dual 8" inlet, 12" outlet o Exhaust silencer, spark arresting, loose o 12" inlet, 12" outlet o Rain proof style stove pipe o Two (2) 90(degree) exhaust elbows, 12" flange, two (2) 12" companion Page 27 of 58  [NATIONAL OILWELL VARCO LOGO] Proposal - -------------------------------------------------------------------------------- Customer Name: UNION DRILLING Quote No: NOI-10977-DWK Rev. 01 Project Name: Date: 10/20/05 Cust Ref No: - -------------------------------------------------------------------------------- flanges, gaskets Generator o National Oilwell 1750 KVA NOI/Baylor alternator, single bearing for direct mounting to 16V2000, "0" housing, 1800 RPM. EXPANDED DESCRIPTION BELOW Construction o Engine, generator, radiator assemblies unitized on heavy duty structural steel. Accessory packages installed and mounted unless noted as loose. o Oil and fuel lines extended and fastened to base side rails for convenient service and quick connection. o Dimensions - 198" L x 75"W; Weight - 24,500 lb. - Estimate Manuals, Documentation, Testing o Operation and Maintenance Manuals (2 copies each unit) o Generator test reports o Detroit Diesel Corporation dynamometer test reports o Stewart & Stevenson Standard Manufacturers test GENERATOR Model: S437QUJ National Oilwell Baylor AC Generator with direct connected brushless rotating exciter in accordance with the following: o RPM: 800 o Electrical Rating 1050kW, 0.6pf, 1750kVA, 3pH, 60Hz, 600V, Wye o Temperature Rise 105(degree) C by resistance over 40(degree) C ambient o Duty Continuous SCR o Insulation Class H form wound - VPI o Enclosure Drip proof guarded o Weight Approximate 9,500 lbs. o Bearings One anti-friction, grease lubricated o RTD's 6 X PT100 in stator, 1 X PT100 in bearing o Excitation Brushless - shaft mounted o Housing Adapter SAE "0" o Drive Disc SAE 518 o Accessories: o Oversized terminal box with bus bars Page 28 of 58  [NATIONAL OILWELL VARCO LOGO] Proposal - -------------------------------------------------------------------------------- Customer Name: UNION DRILLING Quote No: NOI-10977-DWK Rev. 01 Project Name: Date: 10/20/05 Cust Ref No: - -------------------------------------------------------------------------------- o Space heaters Qty. 1 LOT 16V2000-HOUSE-3 Generator House Engine/generator enclosure for three (3) Detroit Diesel 16V2000 power sets consisting of: o Three (3) 10' x 40' Three runner oilfield type skids. Skids constructed of W18" beam with 1/4" checkered plate flooring. o Three (3) 10' x 38' long roofs (10' clear height). Roofs corrugated panel metal construction. o Installation for three (3) National Oilwell furnished mufflers and flex joints. o One (1) fuel feed manifold with supply line to generator set each skid. o One (1) fuel return manifold with return line to generator set each skid. o Install following National Oilwell furnished equipment on skid extensions: o Two (2) Air Compressors o Two (2) Air Receivers o One (1) Air Dryer 400 ACFM Unit size (OR two (2) Air dryers 200 ACFM size) o One (1) Cold Start Unit Provide piping between air compressors and air receiver and to engine starters. MUD PUMPS Qty. 2 EA. 12-P-160 NOI model 12-P-160 mud pump, triplex single acting. SPECIFICATIONS Max. input horsepower 1600HP(1193KW) Rated pump speed 120SPM Piston stroke 12" Max. working pressure 5000psi Max. liner bore 7-1/4" Suction connection flange 10"ASA-150lb.R.J. Discharge connection flange 6" API-5000lb.R.J. Dimension 5309L x 2889W x 1905H Page 29 of 58  [NATIONAL OILWELL VARCO LOGO] Proposal - -------------------------------------------------------------------------------- Customer Name: UNION DRILLING Quote No: NOI-10977-DWK Rev. 01 Project Name: Date: 10/20/05 Cust Ref No: - -------------------------------------------------------------------------------- Weight 24810kg FEATURES o One-piece construction of crank-shaft, connecting rod and pinion shaft o Roller bearing throughout o Two-piece piston rod allows removal of piston without disturbing liner o Clamp lock liners and piston rod assemblies in place o Full circle spray cools and lubricates liners regardless of pump speed o Metal to metal liner retention o Herringbone gears o Two piece cylinder modules with complete interchangeability between modules o "Fast Change" valve cover arrangement o Liner Spray & motor 60HZ. o Dress pump with 6-1/2" liners & pistons. o Standard lube system Qty. 2 EA. Discharge Strainer Cross, complete with: o 5" 5000# discharge flange connections o 4" 5000# top connection for pulsation dampener o 5" 5000# end connection for strainer clean-out Qty. 2 EA. Flange, 5-1/8" 5000# Blind flange, to match 2-1/16" gauge. Qty. 4 EA. Flange, 5-1/8" 5000# API 6B Weld neck flange. Qty. 2 EA. Blind Flange, 5-1/8" 5000# Mod. 6B blind flange. Qty. 8 EA. Ring Joint Gasket. Qty. 2 EA. Jib Crane with Trolley only For a 12-P-160 Mud Pump, for handling fluid end expendable parts (only) Qty. 2 EA. 1/2 ton hand hoist for use with Jib Crane Page 30 of 58  [NATIONAL OILWELL VARCO LOGO] Proposal - -------------------------------------------------------------------------------- Customer Name: UNION DRILLING Quote No: NOI-10977-DWK Rev. 01 Project Name: Date: 10/20/05 Cust Ref No: - -------------------------------------------------------------------------------- Qty. 2 EA. Reset Relief Valve 3" standard service pin shearing type relief valve with pin of same diameter for 1500-5000psi Qty. 2 EA. 1292369 Oilwell In-Line Suction Stabilizer for 12-P-160 Pump application. Qty. 2 EA. LS-20-5000 LS pulsation dampener. Maximum service pressure 5,000 PSI Surge capacity: 20 gallons Connection: 4" API 5,000 RTJ Diaphragm: Hydrogenated nitrile (installed) Qty. 2 EA. Pump Drive For 12-160-P mud pump with: o Extended skid frame o Rear mounted dual belt drive o Complete with sheaves, hubs, powerband o Belt guard For use with YZ08/YZ08A motor Qty. 2 EA. Assembly Of Drive To Pump Assembly and mounting of motor and drive on 12-P-160 pump Qty. 4 EA. YZ08/YZ08A Motor - Pumps Yongji YZ08/YZ08A drilling motor. SPECIFICATIONS o Rated power: 800 KW o Rated voltage: 750 V o Rated current: 1150 A o Rated speed: 970 RPM o Rated torque 8033.7 N.m o Max. current: 1600A o Max. torque: 12206.4 N.m o Exciting type series o Insulation class H Page 31 of 58  [NATIONAL OILWELL VARCO LOGO] Proposal - -------------------------------------------------------------------------------- Customer Name: UNION DRILLING Quote No: NOI-10977-DWK Rev. 01 Project Name: Date: 10/20/05 Cust Ref No: - -------------------------------------------------------------------------------- o Cooling type: Air forced ventilation o Ex-proof type: Air pressurization o Weight: 3200 kg FEATURES o Self excited series field o Single shaft extension with standard hub Pressurized connection box with bolts for connecting armature & field cables o High current, powerful torque and wide speed adjusting range at constant power o C/W blower driven by 15HP ex-proof AC motor, 460V, 60Hz and 230V spacer heater. MUD SYSTEM Qty. 1 EA. MS-2T-1314BBL Mud Tank System - Two Tank, Total Capacity of 1314 BBL / Patent Pending SHAKER TANK GENERAL DESCRIPTION: 1. To be equipped with the Following Equipment: A. Brandt King Cobra Linear Motion Shale Shaker utilizes a Cobra Linear Motion screen deck containing four screens and 33.4 sq. ft. screening area and the contour plus deck design with drying panel. Screen area: 33.4 sq. ft., flat screens Screens/deck: four screens Screen angle: contour deck design 0(degree), +5(degree), +5(degree), +5(0) Deck angle: adjustable from -5(degree) to +3(degree) "G" force: nominal 6.3 G's Electrical: direct drive, two 2.5 hp canister vibra motors, 60 Hz, 230/460 volt, 3 phase, explosion proof Overall dimensions: Length: 120" Width: 65" Height: 69" Weir height: 41" Weight: 4300 lbs. (Screens are not included with shaker) - Left hand B. Brandt King Cobra Linear Motion Shale Shaker utilizes a Page 32 of 58  [NATIONAL OILWELL VARCO LOGO] Proposal - -------------------------------------------------------------------------------- Customer Name: UNION DRILLING Quote No: NOI-10977-DWK Rev. 01 Project Name: Date: 10/20/05 Cust Ref No: - -------------------------------------------------------------------------------- Cobra Linear Motion screen deck containing four screens and 33.4 sq. ft. screening area and the contour plus deck design with drying panel. Screen area: 33.4 sq. ft., flat screens Screens/deck: four screens Screen angle: contour deck design 0(degree), +5(degree), +5(degree), +5(0) Deck angle: adjustable from -5(degree) to +3(degree) "G" force: nominal 6.3 G's Electrical: direct drive, two 2.5 hp canister vibra motors, 60 Hz, 230/460 volt, 3 phase, explosion proof Overall dimensions: Length: 120" Width: 65" Height: 69" Weir height: 41" Weight: 4300 lbs. (Screens are not included with shaker) - right hand C. One (1) Degasser Model D-1000-C, vertical vacuum degasser with 60" diameter vessel mounted on an oilfield skid. includes explosion proof 1800 rpm 5 hp motor and starter, suction and discharge piping, and jet nozzle with 1-3/4" bore. Maximum capacity: 1000 gpm. Electrical service: xp 3 phase 230/460v/60Hz. D. One (1) Desander Vertical Model DSN-3V-10CTX, 3 cone features manifold constructed of 8" sch. 40 pipe mounted on an angle iron base, three (3) 10" diameter CTX desander with grooved end inlet and overflow, desilting capacity of 1500 gpm. E. One (1) Desilter Model DSLR-20GG-4CTX, 20 cone features 24" round manifold constructed of 3/8" plate mounted on an angle iron base, twenty (20) 4" CTX cones with grooved end inlet and overflow, desilting capacity of 1300 gpm. F. One (1) Vertical Centrifugal Pump Model 67065408ITAD0DS, degasser feed/clean out centrifugal 6x5x14 14" impeller 1150rpm 60hp vertical centrifugal pump w/dual mech. seals @18 ppg mud. G. One (1) Vertical Centrifugal Pump Model 670861516IT70DS, desander feed/clean out centrifugal 8x6x11 11" impeller 1750rpm 100hp vertical centrifugal pump w/dual mech. seals @14 ppg mud. H. One (1) Vertical Centrifugal Pump Model 67861516IT70DS, desilter feed/clean out centrifugal 8x6x14 14" impeller 1750rpm 100hp vertical centrifugal pump w/dual mech. seals Page 33 of 58  [NATIONAL OILWELL VARCO LOGO] Proposal - -------------------------------------------------------------------------------- Customer Name: UNION DRILLING Quote No: NOI-10977-DWK Rev. 01 Project Name: Date: 10/20/05 Cust Ref No: - -------------------------------------------------------------------------------- @14 ppg. I. Three (3) Agitators 10hp Agitator Model MX-MA10-MTHC, drill mud agitator with 30:1 helical gear speed reducer, cast iron drop bearing housing for shaft support, and 10 hp, 1800 rpm explosion proof c-face motor. Includes shaft 36" long and impeller up to 40" diameter pitched blade impeller. Electrical service: xp 3 phase 230/460v/60Hz. 2. Shaker Tank Overall Dimension Is 55-0' Long X 12-0" Wide. 3. Tank will be as follows: (52' 9" long x 10-0' wide x 8' 6" high walls) A. One (1) settling tank (sand trap) double slopped floor 114.923bbls B. One (1) degasser tank 151.696bbls C. One (1) desander tank 120.608bbls D. One (1) desilter tank 120.608bbls E. One (1) reserve tank #1 161.156 4. Shakers are mounted on two individual skids for fast moving and to prevent having to have any fold up or down walk around. 5. Walls and partitions are to be fabricated of crimped 1/4" plate. 6. Flat bottom floors will be constructed of 3/8" plate. 7. Galvanized serrated grating will be installed over the mud compartments, on walkways, on equipment platforms, and on stairs. 8. Skid beams will be W12 X 45 PPF A36 for the main mud tank skids. 9. The equipment skid to mount the degasser, desander, and desilter is setting on the reserve side of the mud tank with easy mount connection with no support members under the skid to interfere with other equipment possibilities. All 1-1/4 serrated grading will be mounted on the skid. 10. Rim line will be constructed of 6" square tubing with 1/2" wall thickness. The rig side of the rim used for transferring mud and jetting each section to the reserve side and displacing mud. 11. Rim line will be constructed of 6" square tubing with 1/2" wall Page 34 of 58  [NATIONAL OILWELL VARCO LOGO] Proposal - -------------------------------------------------------------------------------- Customer Name: UNION DRILLING Quote No: NOI-10977-DWK Rev. 01 Project Name: Date: 10/20/05 Cust Ref No: - -------------------------------------------------------------------------------- thickness. The off-rig side of the rim used for transferring water and 2" outlets provided for shaker, desander and desilter, chemical mixing, and mud mixing area. 12. Hinged manways with rung ladders will be installed in all compartments. 13. All handrails will be constructed of 1-1/2" square tube with 3/16" wall thickness and most of the handrails will be designed to stay in place during shipment but lay down to avoid having to rig them up each time. 14. Toe plates will be installed on the perimeter of tank and/or walkway and surrounding the cuttings chute. 15. Handrails to be furnished around cuttings chute. 16. Butterfly dumps 10" to be installed in each compartment off-rig side. 17. Shaker tank piped for one (1) desander, one (1) desilter single source pumping, and each compartment will have suction in a sump for transferring and jetting mud. 18. Discharge and suction piping will be kept below the grating except where necessary to feed equipment. 19. Piping extensions higher than the mud agitators will be connected with a union for quick rig up and rig down. 20. All piping up to 6" will be schedule 80 IPS. 21. All piping 8" and larger will be schedule 40 IPS 22. Mud trough will be sized for 1500gpm. 23. All pumps to be mission magnum with dual mechanical seals intended for sucking the tanks dry. 24. All butterfly valves will have actuators below the grating with socket adapter for manual operation. 25. Where possible butterfly valves to be outside mud tanks and all butterfly valves are above mud level. Page 35 of 58  [NATIONAL OILWELL VARCO LOGO] Proposal - -------------------------------------------------------------------------------- Customer Name: UNION DRILLING Quote No: NOI-10977-DWK Rev. 01 Project Name: Date: 10/20/05 Cust Ref No: - -------------------------------------------------------------------------------- 26. Agitator beams located in three sections of the tank. 27. Shaker tank piped for one (1) degasser, one (1) desander, one (1) desilter, and each compartment will have suction in a sump for transferring and jetting mud. 28. One (1) set of external stairs will be built for shaker tank access with 42" handrails. 29. One (1) crossover platform from Shaker Tank to Intermediate Tank #1. SUCTION TANK GENERAL DESCRIPTION: 30. To equipped with the following equipment: A. Two (2) Vertical Centrifugal Pumps Model 67065408ITAD0DS, charging mud pumps and feed/clean out centrifugal 6x5x14, 14" impeller 1150rpm 60 hp vertical centrifugal pump, w/ dual mech. Seals @18 ppg mud. B. Two (2) Vertical Centrifugal Pumps Model 670654509IT0DS, mixing and feed/clean out centrifugal 6x5x14 75hp 1150rpm, vertical centrifugal pump, w/ dual mech. Seals @18 ppg mud C. Four (4) Agitators 10hp Agitator Model MX-MA10-MTHC, drill mud agitator with 30:1 helical gear speed reducer, cast iron drop bearing housing for shaft support, and 10 hp 1800 rpm explosion proof c-face motor. Includes shaft 84" long and impeller up to 36" diameter and 49' diameter in suction #2 pitched blade impeller. Electrical service: xp 3 phase 230/460v/60Hz D. One (1) Mud Hopper Model MH-6-WVT, MUD MIXING HOPPER with venture tube hopper mud 6" with venturi features include venturi discharge nozzle, jet nozzle, sack cutting table, and hopper isolation valve. 31. Suction tank overall dimension 55' long x 12'-0 wide. 32. Tank will be as follows: A. One (1) suction tank #2 232.275bbls B. One (1) reserve tank #2 135.427bbls C. One (1) suction tank #1 156.269bbls D. One (1) premix (pill) tank 121.42bbls 33. Mud tank measurement 46'-3/4"long x 10-0" wide. 34. Walls and partitions are to be fabricated of crimped 1/4" plate. Page 36 of 58  [NATIONAL OILWELL VARCO LOGO] Proposal - -------------------------------------------------------------------------------- Customer Name: UNION DRILLING Quote No: NOI-10977-DWK Rev. 01 Project Name: Date: 10/20/05 Cust Ref No: - -------------------------------------------------------------------------------- 35. Flat bottom floors will be constructed of 3/8" plate. 36. Galvanized serrated grating will be installed over the mud compartments, on walkways, on equipment platforms, and on stairs. 37. Diamond checkered thread plate will be installed on the hopper floor and on the tank top over the hopper porch. 38. Skid beams will be W12 X 45 PPF A36 for the main mud tank skids. 39. Rim line will be constructed of 6" square tubing with 1/2" wall thickness. The rig side of the rim used for transferring mud and jetting each section to the reserve side and displacing mud. Hinged manways with rung ladders will be installed in all compartments. 40. Rim line will be constructed of 6" square tubing with 1/2" wall thickness. The off-rig side of the rim used for transferring water and 2" outlets provided for shaker, desander and desilter, chemical mixing, and mud mixing area. 41. All handrails will be constructed of 1-1/2" square tube with 3/16" wall thickness and most of the handrails will be designed to stay in place during shipment but lay down to avoid having to rig them up each time. 42. Toe plates will be installed on the perimeter of tank and/or walkways. 43. Butterfly dumps 10" to be installed in each compartment. 44. All pumps to be mission magnum with dual mechanical seals intended for sucking the tanks dry. 45. Suction tank piped for one (1) mud hopper, two (2) charging pumps, and each compartment will have suction in a sump for transferring and jetting mud. 46. All piping up to 6" will be schedule 80 IPS. 47. All piping 8" and larger will be schedule 40 IPS Page 37 of 58  [NATIONAL OILWELL VARCO LOGO] Proposal - -------------------------------------------------------------------------------- Customer Name: UNION DRILLING Quote No: NOI-10977-DWK Rev. 01 Project Name: Date: 10/20/05 Cust Ref No: - -------------------------------------------------------------------------------- 48. All four (4) compartments will be agitated. 49. Overflow and underflow pipes will be fitted with hammer seal unions. 50. All butterfly valves will have actuators below the grating with socket adapter for manual operation. 51. Where possible butterfly valves to be outside mud tanks and all butterfly valves to be above mud level. 52. One set of stairs to tank will be built for the suction tank access with 42" handrail. Paint System: Blasted and primed with epoxy inside and out and painted with enamel hardener. Qty. 1 1490413 Caustic Barrel National Oilwell Caustic Barrel, telescoping. Qty. 1 1490308 Mud Check Station National Oilwell Mud Check Station with sink. Qty. 1 EA. PBDG-48 Poor Boy Degasser 48" OD X 15 ft. long Poor Boy Degasser, skid mounted. Skid suitable for also mounting optional choke kill manifold). TO MOUNT ON COMMON SKID WITH TRIP TANK ASSEMBLY. Qty. 1 EA. Trip Tank Assembly Trip tank assembly, skid mounted, constructed. TO MOUNT ON SAME SKID AS POOR BOY DEGASSER. (Two pump assemblies from below, to be mounted and piped on skid) Qty. 1 EA. Brake Water Cooling Unit Brake water cooling unit. Cooling system consist of a water tank integrated into the drawworks master skid, with piping, 3x2x13 circulating pumps, and a heat exchanger. Heat exchanger is cooled with rig water. Page 38 of 58  [NATIONAL OILWELL VARCO LOGO] Proposal - -------------------------------------------------------------------------------- Customer Name: UNION DRILLING Quote No: NOI-10977-DWK Rev. 01 Project Name: Date: 10/20/05 Cust Ref No: - -------------------------------------------------------------------------------- Qty. 4 EA. 323280081-2 Trip Tank & Water Transfer Pump 3x2x13 Mission Magnum I pump with 11" impeller, mechanical seal, 3ph, 60hz, 460V, 25 HP, explosion proof motor. Elevation of cetnterline of assembly 15". Standard two coat paint and top coated with RAL 7040 Grey. Qty. 1 EA WT-400BBL Tank General Construction: o 3 runner wide flange oilfield skid o 3/8" flat plate bottom o 1/4" v-crimp walls o Open top design o 1/4" floor plate on skid extension o Ladder rungs inside & out o 4" drain with butterfly valve o 10'-0" wide x 7'-0" deep x 32'-8" long mounted on a 42'-0" long skid- provision for transfer pumps located on skid porch. o 400 BBL Cap. Qty. 2 EA. 61373-2 Brake Water Cooling Pump 3x2x13 Mission Magnum pump with 13" impeller, mechanical seal, 3ph, 60hz, 460V, 25 HP, explosion proof motor. Mounted on a low profile channel base. Elevation of centerline of assembly 12-15/16". Standard two coat paint and top coated with RAL 7040 Grey. HIGH PRESSURE MUD PIPING High Pressure Mud Piping System Qty. 1 EA. The system will be fabricated by Changing as per NOI drawings. Spec of valves. o 4"-5000PSI W.P. gate valve 4" 5000psi buttweld mud gate valve for H2S. Page 39 of 58  [NATIONAL OILWELL VARCO LOGO] Proposal - -------------------------------------------------------------------------------- Customer Name: UNION DRILLING Quote No: NOI-10977-DWK Rev. 01 Project Name: Date: 10/20/05 Cust Ref No: - -------------------------------------------------------------------------------- o 2"-5000PSI W.P. gate valve 2" 5000psi weldneck mud gate valve for H2S, API 6A, flanged with ring grooves lined. Qty. 3 PKG 4" X 12' X 5000 PSI WP Vibrator Hose Vibrator Hose with FIG 1002 unions (male & female) and hose hobbles (both ends) internal diameter 4". Qty. 1 EA. Rotary Hose 3-1/2" X 75 Ft.,10,000 PSI test, 5000 PSI Working Pressure with 4" API Male threads each end with 4" Fig 1002 Union (Male X Female) & Safety Clamp & Chain each end. BOP CONTROL AND CLOSING SYSTEM Qty. 1 EA. FKQ720-6 Remote Control Panel Made by Beijing No.1 Petro. Pant, model FKQ720-6, consisting of: REMOTE CONTROL PANEL One (1) remote control panel include the following major components unitized and mounted on an oilfield skid of heavy duty welded steel construction: a. One (1) 1290 liter (340 gallon) oil tank, complete with 1" drain plug, 2" air vent, internal baffles, electric low level switch, sight glass gauge and four (4) 4" large inspection port. b. Twelve (12) 60 liter (15 gallon) capacity 21MPa (3000 psi) WP accumulators, which are arranged in both sides and equipped with ball valve in any bank, bladder type precharged with nitrogen gas. This vessel meets API requirements. Accumulators are provided with ASME U-1A certificates. c. One (1) electric motor driven triplex pump, completes with automatic pressure switch and relief valve. Pump flow rate 43 liter/min. (11.4GPM) at 21MPa (3000psi) output pressure. Explosion proof motor 18.5 kW. 3ph 460V/60 Hz. d. Two (2) pneumatic pumps with capacity of 4.5 liter/min. (1.2 GPM) and 21MPa (3000 psi) output pressure with a 0.53MPa air supply. The ratio of liquid/air is 60:1. e. One (1) air supply manifold include air regulator, lubricator, filter/separator, shutoff valve, bypass valve and automatic Page 40 of 58  [NATIONAL OILWELL VARCO LOGO] Proposal - -------------------------------------------------------------------------------- Customer Name: UNION DRILLING Quote No: NOI-10977-DWK Rev. 01 Project Name: Date: 10/20/05 Cust Ref No: - -------------------------------------------------------------------------------- pressure switch which allows full flow to the air pump up to desired shutoff pressures. f. One (1) control manifold consisting of the following major components: 1. Six (6) 1" manual/remote operated 3-pos./4-way control valves for the controlling of: Annular preventer (open/close) Pipe ram preventer (open/close) Blind preventer (open/close) Pipe ram preventer (open/close) Chock valve (open/close) Kill valve (open/close) 2. Three (3) 100 mm OD pressure gauge for the following pressure indication: 3. One (1) 1" 2-position, 4-way manual/remote operated control valve for operation of the manifold pressure bypass function. g. Three (3) air transmitter for the remote indications of the following pressure reading: Accumulator pressure with 0~40MPa (0~5800 psi) range. Manifold pressure with 0~40MPa (0~5800 psi) range. Annular supply pressure with 0~25MPa (0~3570 psi) range. h. One (1) explosion proof electrical junction box include pump motor starter/control, and all necessary elements. In addition to this the junction box will include the following indication lamps and switches: One (1) switch for the following function: Electric power on Two (2) indication lamp for the following function: Electric connection on (Red) Electric power on (Green) One (1) selector switch of the following function: Electric pump HAND/OFF/AUTO i. All other necessary gauges, check valves, bleed valves, safety valves, fittings and connections for the proper operation of the system. Qty. 1 EA. Drillers control panel suitable for control of the BOP stack. The panel will consist of following main components: Page 41 of 58  [NATIONAL OILWELL VARCO LOGO] Proposal - -------------------------------------------------------------------------------- Customer Name: UNION DRILLING Quote No: NOI-10977-DWK Rev. 01 Project Name: Date: 10/20/05 Cust Ref No: - -------------------------------------------------------------------------------- a. Seven (7) of 3-position, 4-way air operate valve, for the remote operation of the following functions: Annular preventer (Open/Close) Pipe ram preventer (Open/Close) Blind preventer (Open/Close) Pipe ram preventer (Open/Close) Choke valve (Open/Close) Kill valve (Open/Close) Manifold bypass valve (Open/Close) b. One (1) set of air pressure regulator, for the remote operation of the following function: Annular air pressure (Increase /decrease) c. Four (4) 100mm OD pressure gauge for the indication of the following pressure readings: Annular Pressure 0~25MPa (0~3570 psi) range Accumulator Pressure 0~40MPa (0~5800 psi) range Manifold Pressure 0~40MPa (0~5800 psi) range Air Supply Pressure 0~2.5MPa(0~357 psi) range Qty. 1 EA. Auxiliary Panel Graphic auxiliary drillers control panel suitable for control of the BOP stack. The panel will consist of following main components (can't indicate the position of open/close): a. Seven (7) of 3-position, 4-way air operate valve, for the remote operation of the following functions: Annular preventer (Open/Close) Pipe ram preventer (Open/Close) Blind ram preventer (Open/Close) Pipe ram preventer (Open/Close) Choke Valve (Open/Close) Backup Valve (Open/Close) Manifold bypass valve (Open/Close) b. Four (4) 100mm OD pressure gauge for the indication of the following pressure readings: Page 42 of 58  [NATIONAL OILWELL VARCO LOGO] Proposal - -------------------------------------------------------------------------------- Customer Name: UNION DRILLING Quote No: NOI-10977-DWK Rev. 01 Project Name: Date: 10/20/05 Cust Ref No: - -------------------------------------------------------------------------------- Annular Pressure 0~25MPa (0~3570 psi) range. Accumulator Pressure 0~40MPa (0~6000 psi) range. Manifold Pressure 0~40MPa (0~6000 psi) range. Air Supply Pressure 0~2.5Mpa Qty. 1 EA. Prevention house Qty. 1 EA. Alarm Device This device can be equipped with alarm device when following case occur, gives lamp and/or sound alarms, include a electric cable connecting the control system and driller's panel, control system and auxiliary panel. Remote control system and driller's panel , Cauxiliary panel are all equipped with 4 explosion-proof indication lamp for the following function: Low accumulator pressure (yellow, with sound alarm) Low air pressure (yellow, with sound alarm) Low fluid level (yellow, with sound alarm) Electric pump running (green) Qty. 5 EA. Bop Closing System Pipe Rack Assembly Pipe Rack Module made into 20 foot sections. Each section consists of twelve (12) 1" extra heavy pipe with 1" hammer lug unions on each end. All pipe is covered with a walkway type grating. Includes one (1) complete extra hammer union per pipe run. Suitcase must be designed to accommodate all functions between bop closing unit and the BOP. This would include all hydraulic, air & electric. (12) pipe required for six function BOP. Qty. 24 EA. 1 Inch, 5000 PSI X 25 feet long "Firefighter" BOP Hoses with Carbon steel male NPT end fittings. (12) For connecting closing unit to pipe rack. (12) For BOP Page 43 of 58  [NATIONAL OILWELL VARCO LOGO] Proposal - -------------------------------------------------------------------------------- Customer Name: UNION DRILLING Quote No: NOI-10977-DWK Rev. 01 Project Name: Date: 10/20/05 Cust Ref No: - -------------------------------------------------------------------------------- INSTRUMENTATION Qty. 1 SDI-50-1500HP-LAND Smart Drilling Instrumentation For 1500 Hp Land Rig The SDI-50 Smart Drilling Instrumentation System measures and displays all critical drilling and mud parameters. The versatility and flexibility offered by SDI-50 ensures that the system is ideal for both land and offshore drilling units. It is designed as a modern alternative to older instrumentation technology and it can be easily configured to meet all of your current and future drilling instrumentation needs. Information is presented in a logical and ergonomic fashion in pages, which combine both analogue and digital displays. Much emphasis has been placed on ease of operation and as a result this user-friendly product requires no special operator training. Drillers Console is ergonomically designed. Manufactured with a stainless steel frame and 304 stainless steel facia panels. Console to house the SDI-50 Driller's Display Panel, Driller's Meter Panel, KEMS with Autodriller and Weight Indicator. NOTE: This console will reside in an overall console that includes SCR and Drawworks Controls. Installed in the driller's console. The driller's display panel provides access to, and display of, all mud and drilling parameters The unit is fully ruggedised for drill floor operation Requires 110v AC 60Hz rig supply. The DDP features a 15" Active Matrix Color LCD with 1024 x 768 Resolution XGA LCD screen with minimum brightness of 400 cd/m2 to eliminate sunlight viewing problems. Enclosure suitable for wall or console mounting 20kg 420(L)x200(W)x410(H)mm. Signal Conditioning Unit. Installed in safe area, this unit connects to the SDI-50 Displays and provides intrinsically safe interfaces to the field sensors. SCU typically configured as follows: 5 pit level/volume 4-20 mA isolators, 3 pump SPM and Strokes, Tong Torque, Standpipe Press., RT RPM, RT Torque, all circuits have repeat outputs. 75 lbs. 15"(H)x15"(W)x10"(D). The SCU will be specifically configured to suit the sensor inputs mentioned below. SDI-50 Safe Area Workstation: For installation in the Tool-Pusher's office. The computer Workstation provides the user access to SDI-50 information configured with display software as per the Drillers Display Panel. The Tool pusher's Workstation also configured for this application as the server, to provide sensor data to the Drillers Display Page 44 of 58  [NATIONAL OILWELL VARCO LOGO] Proposal - -------------------------------------------------------------------------------- Customer Name: UNION DRILLING Quote No: NOI-10977-DWK Rev. 01 Project Name: Date: 10/20/05 Cust Ref No: - -------------------------------------------------------------------------------- Panel via the Ethernet connection. The displays are flexible in the way information can be displayed and laid out. For example in the past we have provided software displays in analogue, digital, bar graph and printer trend format which look like conventional instruments. You can also add more parameters to the computer display, as the process requires in the future. Each parameter has an audible alarm via the computers internal sounder and visual high and low alarms. Typical work-station specification is: Pentium 4 (2.4GHZ) Desktop PC with convertible mini tower with 17" XVGA CRT Monitor, 40gig Hard Disk, 512 MB RAM, 48X-CD-RW, Win2000 Operating System & CP 5611 Profibus card with TB Server Software. Driller Meter Panel: Provides additional analogue and digital indication of the main drilling parameters on conventional analogue meters and digital readouts. The operation of this panel is independent of the DDP and as such it provides full display redundancy. Configuration example based on the sensor options: Stand-Pipe Pressure, Tong Torque, Rotary Table Torque, Rotary Table RPM, Top Drive Torque, Top Drive RPM,2 Mud Pump SPM's and 2 Stroke Counters, Return Mud Flow and Trip Tank Level. Weight is 20kg; dimensions are 80(L) x 225(W) x 440(H) mm. System includes: 1 1 304 Stainless steel Drillers Console to house items 2, 3 & 5. 2 1 Weight Indicator (12" electric) 3 1 SDI-50 Drillers Display Panel 4 1 SDI-50 Signal Conditioning Unit (Safe Area). 5 1 SDI-50 Drillers Meter 6 1 SDI-50 Safe Area Workstation with Drill-Graph & Drill-Log. 7 1 SDI-50 Power Conditioning & Distribution System. 8 1 Hook Load Sensor (EEx. Zone 1) 9 1 Standpipe Pressure Sensor (EEx. Zone 1) 10 2 Mud pump SPM sensor (EEx. Zone 1) 11 1 Rotary RPM sensor (EEx Zone 1) 12 1 Rotary torque sensor 13 1 Return mud flow sensor (EEx Zone 1) 14 1 Tong torque sensor (EEx Zone 1) 15 1 Height/Depth/ROP sensor (EEx) 16 7 Mud Pit level transmitters (EEx Zone 1) 17 1 Trip tank level sensor, 8.2 ft measuring level and 9.52 ft overall length (EEx Zone 1) Page 45 of 58  [NATIONAL OILWELL VARCO LOGO] Proposal - -------------------------------------------------------------------------------- Customer Name: UNION DRILLING Quote No: NOI-10977-DWK Rev. 01 Project Name: Date: 10/20/05 Cust Ref No: - -------------------------------------------------------------------------------- 18 1 Brake cooling water common alarm input. Submit types of offered sensors with ranges. 1. Hook Load Sensor (EEx Zone 1). Solid state, strain gauge pressure transmitter, 4 to 20 mA. Range 0 to 1080 PSI to suit deadline sensator. 2. Mud pressure sensor (EEx Zone 1). Solid state, strain gauge pressure transmitter, 4 to 20 mA. Range 0 to 5000 PSI. 3. Mud pump SPM sensor 9EEx Zone 1). Inductive proximity switch, NAMUR digital output. 4. Rotary/Top Drive RPM sensor (EEx Zone 1). Inductive proximity switch, NAMUR digital output. 5. Rotary/Top Drive torque sensor. Split core current transformer, 4 to 10 mA. Range and calibration nominally 0 to 1000 amps (Adjusted to suit rig). 6. Return Mud flow sensor (EEx Zone 1). Paddle flow sensor, output signal is 4 to 20 mA. Range 0 to 100% RMF. 7. Tong torque sensor (EEx solid state, strain gauge pressure transmitter, 4 to 20 mA. Range nominally 0 to 2000 PSI (Adjusted to suit rig). 8. Height/Depth sensor (EEx Zone 1). Digital shaft encoder with quadrature output, 250 pulses per drawworks resolution. 9. Mud Pit level transmitters (EEx Zone 1). Solid state, ultrasonic level transmitter. Range nominal 0 to 5 meters. (adjusted to suit rig). 10. Trip tank level sensor. A float type IS level sensor transmitter to provide a tank level signal to the SDI-50 DAQ. Sensor probe overall length = Measuring length - 452 mm (terminal hosing standoff). Please confirm No. of pits, pit BBLs and probe length required when ordering. 11. Tension load cell 25k - for tong torque, utilizes item #7 for signal transmission. Detail drawing for console to follow identification of customer preferences. Console is custom designed to meet customer's needs. Indicators and bar graphs are monitored on a flat screen TFT monitor. Console is made from SS316 stainless steel. Includes a power stabilizer. This unit takes whatever power the rig give and provides stable AC & DC supplies for the entire drilling instrumentation package. The ROP is calculated on inputs from the drawworks encoder and the Page 46 of 58  [NATIONAL OILWELL VARCO LOGO] Proposal - -------------------------------------------------------------------------------- Customer Name: UNION DRILLING Quote No: NOI-10977-DWK Rev. 01 Project Name: Date: 10/20/05 Cust Ref No: - -------------------------------------------------------------------------------- number of turns of the traveling block fastline sheave. The encoder tells the block speed and the SDI calculates the ROP. It is displayed on the flat screen TFT monitor. There is no need to have a 7 pen recorder. All measured parameters are available as trends on the drillers display. Permanent print out of any trend is also available at the block speed and the SDI calculates the ROP. It is displayed on the flat screen TFT monitor. Qty. 1 EA. KEMS with Automatic Drilling System Kinetic Energy Monitoring System (KEMS-0006). The KEMS monitors the load, speed and position of the traveling block and when required operates the drawworks brakes, clutches and motors to bring the traveling block to a controlled stop within preset limits of travel. Interfaces are included for operation of the drawworks auxiliary brake; main brake and clutches as well as the drawworks drive motor/s. During downward travel, the system measures the total hook load to determine a safe velocity profile for downward motion. As the blocks descend and speed is gained, the auxiliary brake is engaged to bring the block speed within the safe velocity profile. This process continues until the block comes to rest at, or just above, the bottom limit of travel. However, should the auxiliary brake fail to control the descent as requested, then the system will assume an auxiliary brake fault and will immediately actuate the main brake in an effort to bring the blocks to a controlled stop. When traveling upwards the system assesses upward velocity and hook load and, when required, will switch off the drive to the drawworks motors and at the same time it shall apply, momentarily, the Elmagco brake to bring the drawworks and traveling block assembly to a standstill at, or just below, the upper limit of travel. Just before the blocks come to a stop the main brake is also set to prevent any subsequent, unwanted, downward motion. The KEMS-0006 is a complete system hardware package and is supplied with all materials, required to effect its installation, including: o Safe Area Signal Conditioning Unit o Safe Area Power Supply Unit with Battery Back Up or equivalent o Intrinsically Safe Control Unit (specify stand alone or console mount when ordering) o Intrinsically Safe Spear Shaft (Drillers offside) mounted Height Sensor. Page 47 of 58  [NATIONAL OILWELL VARCO LOGO] Proposal - -------------------------------------------------------------------------------- Customer Name: UNION DRILLING Quote No: NOI-10977-DWK Rev. 01 Project Name: Date: 10/20/05 Cust Ref No: - -------------------------------------------------------------------------------- o Intrinsically Safe Weight Sensor o Intrinsically Safe Audible Alarm o Intrinsically Safe Main Brake/Clutch Solenoid o Pneumatic Shuttle Valve o Safe Area Auxiliary/Electric Brake Interface o Safe Area Drawworks on/off throttle relay o Installation kit including, junction boxes, cable glands, hoses, fittings, mounting brackets and associated fasteners. Automatic Driller: When installed this option provides the system with the ability to control hook load, hence bit weight, automatically. In operation the system compares the actual bit weight to the desired bit weight releasing the drawworks brakes to feed off drill line. As this happens any increase in bit weight is compared to the corresponding movements of the drawworks drum. In this way the system continuously monitors the relationship between drawworks rotation (amount of drilling line feed) and the subsequent transfer of weight from the hook to the bit. The frequency and duration of the brake release cycle is then controlled to provide optimum ROP while ensuring that bit weight is kept at a constant level. The auto-driller does not require to be tuned to match formation changes and drilling rate will progress at the highest possible ROP. Documentation: o System Layout Drawing, DW/ o Electrical Interconnection Drawing, DW/ o General Arrangement Drawing(s), DW/ o System Operating Manual, OM/ o Ex Certification Data Book, CD/ o Calibration and Factory Test Reports, FT/ Qty. 1 EA. WL100 KINNECOR / LANTEC Wireline Winch Stand mounted winch, with 5.5" dia. barrel, 16" dia. flange, 20" long and cable dia .092" performance based on motor torque of 5,888 LB. IN. @ 68RPM: Drum holds 34,800 T of cable on 57 layers. (outfitted with 25,000 ft, stainless steel line) Bare drum line pull = 2,100 LB @ 100 FPM Mid drum line pull = 990 LB @ 210 FPM Full drum line pull = 740 @ 282 FPM Page 48 of 58  [NATIONAL OILWELL VARCO LOGO] Proposal - -------------------------------------------------------------------------------- Customer Name: UNION DRILLING Quote No: NOI-10977-DWK Rev. 01 Project Name: Date: 10/20/05 Cust Ref No: - -------------------------------------------------------------------------------- AIR SYSTEM Qty. 2 EA. HP75 Air Compressor Ingersoll-Rand Model HP75 air compressors Type Oil flooded screw air compressor Model 75 HP Capacity 299CFM Rated pressure 0PSI Power supply 480V/60Hz/3Ph Cooling method Air cooled Ambient temperature <46(degree)C SCOPE OF SUPPLY: Air compressor mounted on air receiver, main electric motor, modulation system, oil cooler, after cooler, air filter, oil filter, water/gas separator, electrical control system, piping, enclosure, etc. Qty. 1 EA. LD-0.8/10 Cold Start Unit Two-stage cold start compressor unit, belt drive, guard skid with 301 cc gasoline fuel engine. Qty. 2 IR61D Ingersoll-Rand Model IR61D air dryer. o Model IR61D o Capacity 7.5 M3/min. o Max. inlet temperature 66(degree)C o Filtering capability Oil 0.5ppm o Particle size 1(micron) Qty. 2 EA. VAR-53CF-PI 53CF vertical air receiver with ring base. The 400 gallon receiver is ASME coded and stamped fro 165 PSIG working pressure. Finish is factory standard. 36"OD x 98"L Air Accessory Kit consist of Pressure Relief Valve Pressure Gauge Automatic Drain Qty. 1 EA. Page 49 of 58  [NATIONAL OILWELL VARCO LOGO] Proposal - -------------------------------------------------------------------------------- Customer Name: UNION DRILLING Quote No: NOI-10977-DWK Rev. 01 Project Name: Date: 10/20/05 Cust Ref No: - -------------------------------------------------------------------------------- 32CF Horizontal air receiver with mounting feet. The 230 gallon receiver is ASME coded and stamped for 165 PSIG working pressure. 30"OD, 84" length. With accessory kit. Air Accessory Kit consists of: Pressure Relief Valve Pressure Gauge Automatic Drain Qty. 2 EA. Utility air winch. Five (5) ton capacity. Qty. 1 EA. 8CF 8 c.f. horizontal air receiver, 60 gallon, ASME coded and stamped to accept minimum 165 PSIG working pressure. 20" OD x 48" Length FUEL SYSTEM Qty. 1 LOT FT-400-BBL-CYL Cylindrical fuel tank, having a 400 BBL capacity, saddle mounted on a three runner skid with oilfield type skid ends for tailboarding. Tank includes one 20" OD manway, ladder rungs inside and out, one (1) 2" vent, one (1) 4" fill connection, and one (1) 4" drain and one (1) sight level gauge. Skid extension decked with 1/4" checkered plate to accommodate fuel transfer pump and one fuel filter. Pump and filter quoted separately. Qty. 1 EA. K-FF1081 National Oilwell/Halco Model FS-1081 Fuel Filter System This filter package is a three-stage filter type. There is a prefilter to remove dirt, a coalescer element to form dissolved water into droplets and separator element to make the water droplets drop out of the fuel. PREFILTER: Contains a quantity of three pleated paper filter elements each rated to remove solids to five (5) microns. The three elements will hold approximately twenty pounds of dirt before time to change out the elements. The purpose of the prefilter is to trap solids or dirt before they Page 50 of 58  [NATIONAL OILWELL VARCO LOGO] Proposal - -------------------------------------------------------------------------------- Customer Name: UNION DRILLING Quote No: NOI-10977-DWK Rev. 01 Project Name: Date: 10/20/05 Cust Ref No: - -------------------------------------------------------------------------------- can reach the coalescer. COALESCER: Contains a quantity of two coalescer elements and two separator elements. The purpose of the coalescer element is to separate the water from the fuel by forming the water into droplets so that the water will fall out of the fuel by gravity. The purpose of the separator element is to repel any droplets that do not fall out of the fuel. This tank has an automatic drain valve to let the separated water out. This is what is commonly referred to as two-stage separation. It is important to remember that even though the coalescer and separator elements will remove dirt, their primary function is to remove water. Rated to remove water to 5 parts per million or 99.999995%. DIESEL FUEL TRANSFER PUMPS Two packages each having a Roper 2AM21 gear pumps with built in relief valve, rated at 35-39 GPM mounted on a base with a flexible coupling, OSHA coupling guard and a 3 HP, 1800RPM, explosion proof motor, 230-460Volts, 3 phase, 60 cycle. MOUNTING: These two filter tanks along with the two pump packages are mounted on a base, piped with valves for series flow through the tanks or to bypass the filters. The pumps will be manifold together so that product can flow through either pump while the other pump is operating. Pressure gauges are mounted on each of the tanks to measure pressure drop and know when to change filters. The system will also include an automatic drain for water, and all necessary valves, unions etc. to make it a complete functional unit. The system only requires a hose from the main fuel storage and a hose to the day tank. The total unit is painted with a two-part catalyst setting epoxy. ELECTRICAL RIG-UP Electrical materials, supervision, electrical rig-up, welding, and rig down. LIGHTING SYSTEM - 120Volt 60 HZ 1. Mast, Racking Board, and Obstruction Lighting 2. Rig Floor - Drawworks Lighting 3. Pipe Rack and Area Lighting 4. Substructure Lighting 5. Mud Pump Lighting 6. Generator Skids Page 51 of 58  [NATIONAL OILWELL VARCO LOGO] Proposal - -------------------------------------------------------------------------------- Customer Name: UNION DRILLING Quote No: NOI-10977-DWK Rev. 01 Project Name: Date: 10/20/05 Cust Ref No: - -------------------------------------------------------------------------------- 7. Doghouse 8. Water Tank 9. Brake Cooling Tank 10. Hydraulic Unit Skid clamps, safety cables, and stringer, and whips. 11. BOP Skid 12. Work Shop 13. Fuel Tank Skid 14. Suction Tank, 3 - AC Generators 600 Volt 60 HZ 15. Agitator Tank All fixtures to be completed outfitted with plugs and receptacles, cable GENERATOR POWER AND CONTROL CABLES 1. A/C power and control cables to connect generators to SCR House 2. Control cables for generators 3. Glastic plate for cable entrance @ generator 4. Cable Trays included D.C. MOTOR POWER AND CONTROL CABLES Mud Pumps Motors (4) Drawworks Motors (2) Rotary Table Motor (1) 1. Power and Control Cables AC POWER AND CONTROL CABLES 1. (2) Mud Tanks are included 2. Cable tray's included PLUG AND RECEPTACLE PANELS FURNISHED BY NOI 1. Plugs and receptacles furnished by Prime A. Between Mud Pump 1 and Mud Pump 2 (4 motors) B. For Mud Tanks & System C. Grasshopper D. (2) Water Tanks E. 120 Volt Power BOP Closing F. Swing out Booms on Water Tank G. Mud Pump Boom Page 52 of 58  [NATIONAL OILWELL VARCO LOGO] Proposal - -------------------------------------------------------------------------------- Customer Name: UNION DRILLING Quote No: NOI-10977-DWK Rev. 01 Project Name: Date: 10/20/05 Cust Ref No: - -------------------------------------------------------------------------------- H. Workshop & Connections I. BOP Plugs @ Doghouse J. BOP Plugs @ BOP RIG-UP SPECIFICATIONS A. Cables supplied will be Polyrad XT 125 degree C type P B. Electrical Rig-up will meet API standards C. All connections to be weatherproof D. Receptacles to have watertight covers E. Grounding of skids included F. Function Test & Support ENGINEERING A. As built drawings on a C.D. will be provided to NOI. MECHANICAL RIG-UP Qty. 1 LOT MRU-T-RD-1500 Rigup Test Rig Down Qty. 1 LOT EL-CBLTRY-GRHPR Cable Trays To Grasshopper Qty. 1 EA. BN-1, Bell Nipple Qty. 1 FL-10, 10" Flow Line Qty. 1 EA. Mousehole Scabbard Assembly Qty. 1 EA. Rathole Assembly MISCELLANEOUS EQUIPMENT Qty. 1 EA. Drillers Dog House / Control Cabin The driller's cabin is designed to provide the drilling operators a safe and comfortable work environment. The cabin will be suitable for the required area classification. Considerations made include: Environment Considerations made include comfortable colors, low noise levels, and high automation level this environment will enhance the quality and the success of the drilling operations where critical split-second decisions Page 53 of 58  [NATIONAL OILWELL VARCO LOGO] Proposal - -------------------------------------------------------------------------------- Customer Name: UNION DRILLING Quote No: NOI-10977-DWK Rev. 01 Project Name: Date: 10/20/05 Cust Ref No: - -------------------------------------------------------------------------------- are often made. Ergonomics The driller's cabin and other control panels are designed to make the operator able to work long shifts without stress or strain. The positioning of instruments and controls has been thoroughly evaluated with regard to frequency of use, interrelation and ease of operation and help reduce fatigue to the driller. Classification The driller's cabin will be rated for a Class 1 Division 2 area. The protection means for this housing will be accomplished by pressurization according to NFPA496 requirements. Safety Since most of the machinery operations are controlled from the driller's cabin the safety will be enhanced considerably. There will be two (2) escape route from the cabin. Protection bars and netting on the sloped windows secure operators from falling/ moving objects. All windows are of 9/16" laminated, heat strengthened safety glass. Layout From the driller's cabin the operator can control most of the equipment used in the drilling process. Most controls used are included in the drillers control console and are in easy reach of the operators. The driller's cabin is located on the drill floor and is designed to have a clear line of sight to the operating machinery and people on the drill floor. The equipment/control panels in the driller's cabin will be placed in the most visual / convenient position (fire /gas, drillers talk back, etc.)Driller's cabin features: the cabin supply includes as a minimum the equipment listed below: Driller's cabin carbon steel enclosure with grey (RAL 7040). Removable protection net attached to the protection bars on sloped windows. Insulated walls, roof and floor Architectural items such as: wall panels, ceiling panels, Floor cover, door and windows Page 54 of 58  [NATIONAL OILWELL VARCO LOGO] Proposal - -------------------------------------------------------------------------------- Customer Name: UNION DRILLING Quote No: NOI-10977-DWK Rev. 01 Project Name: Date: 10/20/05 Cust Ref No: - -------------------------------------------------------------------------------- Wall mounted HVAC Junction boxes where required Access to equipment in ceiling/floor the driller's cabin will have available space for The drillers cabin will have available space for the Typical instrumentation / equipment as listed below: DCC panel Ex telephones ESD pushbuttons Talkback station BOP panel Choke panel Fire / gas monitor / panel Thermostat / pressurization monitoring system for HVAC the driller's cabin is connected to an independent HVAC The drillers cabin is connected to an independent HVAC system with dual blowers and two independent power feeders. The HVAC unit is located on the outside wall of the cabin. The HVAC system supplies the necessary air to pressure the cabin and maintain a safe working environment within the hazardous area. The operator has the ability to see an HVAC common alarm on the SDI screens if something should occur. Qty. 1 SET YNG-CTWLK One (1) section catwalk, 60" wide x 42" high x 49' long. Decked with 1/2" plate for approximately 10' from the pipe ramp and 3/8" plate for the remaining length. Qty. 1 EA. WS 8 X 26 X 8 One (1) workshop. Workshop 26' long x8' wide with one personnel door, one dual access door and one window. Includes work bench, mechanics tool set and steel tool chest, and drill press. Air conditioning/heating not included. Page 55 of 58  [NATIONAL OILWELL VARCO LOGO] Proposal - -------------------------------------------------------------------------------- Customer Name: UNION DRILLING Quote No: NOI-10977-DWK Rev. 01 Project Name: Date: 10/20/05 Cust Ref No: - -------------------------------------------------------------------------------- Qty. 1 EA. 812097-JB Junkbin 8 Ft. wide x 3 Ft. high x 28 Ft. long, mounted on a three runner oilfield type skid 7 ft. 10" wide X 30 ft. long. Bottom and ends completely plated with 1/4" plate. Sides plated 2 ft. high with 1/4" plate. Shipping dimensions: 8 ft. wide X 4 ft. high X 30 ft. long. Weight: 12,000 lbs. Qty. 1 Electrical Cable Handling System 5- Booms, 1 telescoping boom, drag chain. (3) Assembly mounts on water tank and one boom on each mud pump. TOTAL $23,955,000.00 Page 56 of 58  [NATIONAL OILWELL VARCO LOGO] Proposal - -------------------------------------------------------------------------------- Customer Name: UNION DRILLING Quote No: NOI-10977-DWK Rev. 01 Project Name: Date: 10/20/05 Cust Ref No: - -------------------------------------------------------------------------------- STANDARD TERMS AND CONDITIONS NO TERMS OR CONDITIONS, OTHER THAN THOSE STATED HEREIN, AND NO AGREEMENT OR UNDERSTANDING, ORAL OR WRITTEN, IN ANY WAY PURPORTING TO MODIFY THESE TERMS AND CONDITIONS, WHETHER CONTAINED IN BUYER'S PURCHASE OR SHIPPING RELEASE FORMS, OR ELSEWHERE, SHALL BE BINDING ON SELLER AND ANY SUCH ATTEMPTED MODIFICATIONS ARE HEREBY REJECTED BY SELLER. ALL PROPOSALS, NEGOTIATIONS, AND REPRESENTATIONS, IF ANY, MADE PRIOR, AND WITH REFERENCE HERETO, ARE MERGED HEREIN. All quotations and sales are FOB point of shipment unless otherwise specified on the face hereof. Seller's responsibility ceases upon delivery to carrier and title shall transfer and risk of lost goods shall be borne by Buyer at that point. Any Hot Shot or other premium transportation charges requested by Buyer will be for the account of Buyer. A minimum shipping and handling charge shall apply on any order of less than $500.00. Prices are subject to adjustment to reflect the Seller's prices in effect at time of shipment. No claims for price adjustments will be honored unless presented within one year from date of invoice. All quotations are subject to change without notice and to prior sale of goods. THERE ARE NO WARRANTIES WHICH EXTEND BEYOND THE DESCRIPTION ON THE FACE HEREOF. THIS WARRANTY IS GIVEN EXPRESSLY AND IN PLACE OF ALL OTHER EXPRESS OR IMPLIED WARRANTIES AND ALL IMPLIED WARRANTIES FOR MERCHANTABILITY AND FITNESS FOR A PARTICULAR PURPOSE ARE DISCLAIMED. Goods manufactured by others are sold "as is" except to the extent the manufacturer honors any applicable warranty made by the manufacturer. Secondhand goods are sold "as is". Leased goods, new or used, are leased "as is". In the event any goods manufactured by Seller and furnished hereunder are found to be defective or otherwise fail to conform to the conditions of this contract, Seller will, at its option, either: (1) replace the goods at the delivery point specified herein, (2) repair the goods, or (3) refund the purchase price. Buyer's remedies with respect to goods manufactured by Seller and furnished hereunder that are found to be defective or otherwise not in conformity with the contract shall be limited exclusively to the right to have said goods replaced, repaired, or to a refund of the purchase price, at Seller's option. Buyer's remedies with respect to goods manufactured by others and furnished hereunder that are found to be defective or otherwise not in conformity with the contract are limited to any warranties extended and honored by the manufacturer. Buyer's remedies are limited as aforesaid regardless of whether Buyer's claim is based on principles of contract or tort. Claims must be made promptly following delivery of the goods to the Buyer, but within one year from date of tender of delivery. Seller must be given a reasonable opportunity to investigate. NEITHER SELLER NOR THE MANUFACTURER SHALL HAVE ANY LIABILITY FOR SPECIAL, INDIRECT, CONSEQUENTIAL, INCIDENTAL, OR OTHER CLAIMS FROM ANY BREACH OF CONTRACT OR TORT COMMITTED BY SELLER OR THE MANUFACTURER OF GOODS RESOLD BY SELLER. Buyer agrees that it is to be solely responsible for, and will hold Seller, and the manufacturer of any goods resold by Seller, harmless from any claims, regardless of their basis, by Buyer or third parties that may arise from the goods after delivery, except for replacement, repair, or refund of the purchase price, at Seller's option, for Seller manufactured goods or as provided in any warranties extended and honored by the manufacturer on goods manufactured by others as provided above. Seller's total cumulative liability in any way arising from or pertaining to any products sold or required to be sold under this contract, shall not in any case exceed the purchase price paid by Buyer for such product. With respect to any work performed on goods furnished by Buyer (including but not limited to repairing, welding, machining, fabricating, heat treating, and forging) Seller agrees to make every effort to perform fully such work in accordance with Buyer's specifications. Seller shall be responsible for damages to such goods caused only by Seller's negligence, in which case Buyer's remedy shall be limited exclusively to the price of the work to be performed by Seller on the article damaged. Claims must be made promptly following delivery of the goods to Buyer, but within three months from the date the same is put into operation and, in any event, not more than one year after date of tender of delivery. Seller must be given a reasonable opportunity to investigate. Seller shall have no liability for special, indirect, consequential, incidental or other damages arising from any breach of contract or tort. All federal, state, dominion, provincial or municipal taxes now or hereafter imposed in respect to the goods sold by the Seller and/or the processing, manufacture, delivery, transportation and/or proceeds of the goods herein specified shall be for the account of the Buyer and if taxes are required to be paid by the Seller, the amount thereof shall be added to and become part of the price payable by the Buyer. Payment shall be made at par in legal tender of the United States of America. Buyer shall make such arrangements for terms of payment as Seller's treasurer shall from time to time require. All orders are subject to the continued review of the Seller and if, in its opinion, the financial position of the Buyer has so changed prior to delivery as to render the Seller insecure, the Seller may suspend production and/or refuse to make delivery pending satisfactory modification of the terms of payment. If in the event it becomes necessary to place the account in the hands of an attorney for collection, Buyer agrees to pay reasonable attorney's fees incurred by the Seller. Buyer shall pay interest of 18% per annum for all accounts after the due date; provided, however in no event shall Buyer be required to pay any amount beyond the maximum allowed by law. In the event of any delay in Seller's performance due to fire, explosion, strike, shortage of utility, facility, material or labor, delay in transportation, breakdown or accident, compliance with any other action taken to carry out the intent or purpose of any law or regulation, or other causes beyond Seller's control, Seller shall not be liable for any direct or indirect damage or loss due to any such causes. Seller uses reasonable efforts to ship within the time specified, but does not guarantee to do so and shall not be liable for any damage caused by delay in delivery, irrespective of the cause of delay. Any clause required to be included in a contract of this type by any applicable law or administrative regulation having the effect of law shall be deemed to be incorporated herein. It is hereby certified that the goods manufactured by Seller are produced in accordance with the Fair Labor Standards Act. No material may be returned to the Seller nor may orders be canceled or specifications changed without first obtaining written permission of the Seller. ADDITIONAL CONDITIONS APPLICABLE TO EXPORT SALES ------------------------------------------------ Seller will not provide any certification or other documentation nor agree to any contract provision or otherwise act in any manner which may cause Seller to be in violation of United States law, including but not limited to the Export Administration Act of 1979 and regulations issued pursuant thereto. This contract shall be construed in accordance with United States law. Page 57 of 58  [NATIONAL OILWELL VARCO LOGO] Proposal - -------------------------------------------------------------------------------- Customer Name: UNION DRILLING Quote No: NOI-10977-DWK Rev. 01 Project Name: Date: 10/20/05 Cust Ref No: - -------------------------------------------------------------------------------- All orders shall be conditional upon granting of Export Licenses or Import Permits which may be required. Buyer shall obtain at its own risk any required Export License and Import Permits and Buyer shall remain liable to accept and pay for material if licenses are not granted or are revoked. Unless otherwise specified on the face hereof, all international sales shall be ex-works, our plant, in accordance with Incoterms 1990 edition, as modified by these terms and conditions Page 58 of 58