UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549

         DIVISION OF
CORPORATION FINANCE
Mail Stop 7010

      June 30, 2006

Mr. Victor M. Perez
Chief Financial Officer
Allis-Chalmers Energy Inc.
5075 Westheimer, Suite 890
Houston, Texas 77056


      Re:	Allis-Chalmers Energy Inc.
		Amendment No. 1 to Registration Statement on Form S-1
      Filed June 13, 2006
		File No. 333-133874

		Form 10-K for the fiscal year ended December 31, 2005
		Filed March 22, 2006
		File No. 1-02199

Dear Mr. Perez:

      We have reviewed your response letter dated June 13, 2006,
and
the amended filing, and have the following comments.  Where
indicated,
we think you should revise your document in response to these
comments.  If you disagree, we will consider your explanation as
to
why our comment is inapplicable or a revision is unnecessary.
Please
be as detailed as necessary in your explanation.  In some of our
comments, we may ask you to provide us with information so we may
better understand your disclosure.  After reviewing this
information,
we may raise additional comments.

      Please understand that the purpose of our review process is
to
assist you in your compliance with the applicable disclosure
requirements and to enhance the overall disclosure in your filing.
We
look forward to working with you in these respects.  We welcome
any
questions you may have about our comments or on any other aspect
of
our review.  Feel free to call us at the telephone numbers listed
at
the end of this letter.







Form S-1/A Filed June 13, 2006

General

1. Please provide currently dated consent from each the
independent
registered accountants in the next amendment.

Unaudited Pro Forma As Adjusted Consolidated Financial
Information,
page 29

2. We note that you have presented certain transaction in your pro
forma as adjusted consolidated statements of operations as if they
occurred on January 1, 2006.  Please revise your presentation to
reflect them as though they occurred as of the beginning of the
fiscal
year presented. Refer to Rule 11-02(b)(6) of Regulation S-X.

Notes to Unaudited Pro Forma As Adjusted Consolidated Condense
Financial Statements, page 35

3. Please expand your description of your purchase acquisitions to
identify and disclose, by acquisition:

* the nature and the amount of each source of purchase
consideration;

* the purchase price allocation;

* net tangible assets and liabilities acquired;

* identifiable intangible assets;

* fair value adjustments to net tangible and intangible assets and
liabilities; and,

* the costs and fees of the acquisition.

Refer to Rule 11-02(a) of Regulation S-X.

4. To the extent the purchase price allocation is preliminary,
expand
your disclosure to indicate this. Provide management`s assessment
as
to whether material differences from actual are expected. Consider
the
guidance contained in SAB Topic 2:A.7 if you believe that the
final
purchase allocation will result in a materially different
presentation
than the one presented, including amortization periods and
methods.

5. Please revise notes to disclose your assumptions used to
determine
your interest expense pro forma adjustments, including the amount
of
debt and interest rates.  Please address each of the following:

* Clarify whether or not the rate use is your current interest
rate or
the interest rate for which you have a commitment.

* If actual interest rates in the transaction can vary from those
depicted, disclosure the effect on income of a 1/8 percent
variance in
interest rates.

* If a rate other than your current or committed rate is used,
include
prominent disclosure of the basis of presentation and the
anticipated
effects of the current interest rate environment in the
introduction
to the pro forma financial statements and wherever pro forma
information is provided.

* Disclose in a footnote to your pro forma financial statements
the
future maturities of pro forma long-term debt.

6. We have reviewed your response to prior comment number two.  It
appears that you need to remove your pro forma adjustments to
historical eliminate director fees, as these do not appear to be
directly attributable to the transaction.

7. Please expand your note disclosure to specifically identify
additional costs, if any, which are contractual and directly
attributable to the merger transaction.  While these costs are not
of
a recurring nature and should not be included in an adjustment to
arrive at pro forma net income, we believe their disclosure will
provide readers with a more comprehensive understanding of the
impact
of this transaction.

8. We have reviewed your revised disclosure regarding the bonus
payments.  Please explain in greater detail how this additional
payment was considered in your determination of the purchase price
of
Specialty.  Please also clarify whether or not the payment of
these
bonuses was required by the purchase agreement and a condition to
closing.  We may have further comment.

9. Disclose the rate used to calculate the pro forma tax
adjustment
and state, if true, that the rate used is the statutory rate in
effect
during the periods presented.  Refer to Rule 11-02(b), Instruction
(7).

Financial Statements

Consolidated Condensed Income Statements, page F-50

10. We note that you have reported a separate line item for stock
based compensation.  Please revise your presentation to classify
these
costs consistently with cash-based compensation.  Refer to SAB
Topic
14:F which can be located on our website at:

      http://www.sec.gov/interps/account/sab107.pdf.

Acquisition Financial Statements - Capcoil Tubing Services, Inc.

Statements of Cash Flows, page F-84

11. We note your response to our prior comment number six.  It is
unclear to us why your application of the indirect method for
determining cash flows adjusts the year end change in inventory
and
accounts payable for amounts paid during the period.  In
particular
with regard to accounts payable since the entire balance at year
end
should represent amounts that are unpaid.  Your approach appears
to
adjust accounts payable for timing of cash payments, but only for
those items that are capitalized in Plant and Inventory.  Please
tell
us why you believe this is an appropriate application of the
indirect
method for determining operating cash flows.  Please refer to
Appendix
A of SFAS 95 for illustrative examples of the indirect method.

Unaudited Pro Forma As Adjusted Consolidated Financial
Information,
page F-162

12. Include an introductory paragraph that briefly sets forth a
description of the transaction,  the entities involved, and the
periods for which the pro forma information is presented, as
required
by 11-02(b)(2) of Regulation S-X.  We note your related disclosure
on
page 29.

Form 10-K for the Fiscal Year Ended, December 31, 2005

Financial Statements

Consolidated Statements of Operations, page 48

13. We note your response to our prior comment number 13.  Please
clarify if any amounts for post-retirement medical costs that you
have
reflected separately on the face of your Statement of Operations
relate to employees whose salaries and benefit expenses are
otherwise
captured in your "Direct costs" line item.

Nature of Business and Summary of Significant Accounting Polices

Revenue Recognition, page 53

14. We note your response to our prior comment number 14.  Please
expand your revenue recognition disclosures to quantify the amount
of
revenues included in your financial statements for "lost-in-hole"
or
"irreparably damaged" equipment.




* * * * *
Closing Comments

      As appropriate, please amend your registration statement in
response to these comments.  You may wish to provide us with
marked
copies of the amendment to expedite our review.  Please furnish a
cover letter with your amendment that keys your responses to our
comments and provides any requested information.  Detailed cover
letters greatly facilitate our review.  Please understand that we
may
have additional comments after reviewing your amendment and
responses
to our comments.

      We urge all persons who are responsible for the accuracy and
adequacy of the disclosure in the filing to be certain that the
filing
includes all information required under the Securities Act of 1933
and
that they have provided all information investors require for an
informed investment decision.  Since the company and its
management
are in possession of all facts relating to a company`s disclosure,
they are responsible for the accuracy and adequacy of the
disclosures
they have made.

	Notwithstanding our comments, in the event the company
requests
acceleration of the effective date of the pending registration
statement, it should furnish a letter, at the time of such
request,
acknowledging that:

?	should the Commission or the staff, acting pursuant to
delegated
authority, declare the filing effective, it does not foreclose the
Commission from taking any action with respect to the filing;

?	the action of the Commission or the staff, acting pursuant to
delegated authority, in declaring the filing effective, does not
relieve the company from its full responsibility for the adequacy
and
accuracy of the disclosure in the filing; and

?	the company may not assert staff comments and the declaration
of
effectiveness as a defense in any proceeding initiated by the
Commission or any person under the federal securities laws of the
United States.

	In addition, please be advised that the Division of
Enforcement
has access to all information you provide to the staff of the
Division
of Corporation Finance in connection with our review of your
filing or
in response to our comments on your filing.

      We will consider a written request for acceleration of the
effective date of the registration statement as a confirmation of
the
fact that those requesting acceleration are aware of their
respective
responsibilities under the Securities Act of 1933 and the
Securities
Exchange Act of 1934 as they relate to the proposed public
offering of
the securities specified in the above registration statement.  We
will
act on the request and, pursuant to delegated authority, grant
acceleration of the effective date.

      We direct your attention to Rules 460 and 461 regarding
requesting acceleration of a registration statement.  Please allow
adequate time after the filing of any amendment for further review
before submitting a request for acceleration.  Please provide this
request at least two business days in advance of the requested
effective date.

      You may contact Kevin Stertzel at (202) 551-3723 or Jill
Davis,
Accounting Branch Chief, at (202) 551-3683 if you have questions
regarding comments on the financial statements and related
matters.
Please contact Carmen Moncada-Terry at (202) 551-3687 or, in her
absence, the undersigned, at (202) 551-3740 with any other
questions.

      					Sincerely,


      					H. Roger Schwall
      Assistant Director

cc: 	VIA FACSIMILE
      Henry Havre
      Andrews Kurth LLP
      713-238-7279
Mr. Victor M. Perez
Allis-Chalmers Energy Inc.
June 30, 2006
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