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                                3,000,000 Shares

                             PATTERSON ENERGY, INC.

                                  Common Stock

                       BOUGHT DEAL UNDERWRITING AGREEMENT


                                                              September 11, 2000


CIBC World Markets Corp.
Morgan Keegan & Company, Inc.
Raymond James & Associates, Inc.
     c/o CIBC World Markets Corp.
         One World Financial Center
         New York, New York  10281


Ladies and Gentlemen:

Patterson Energy, Inc., a Delaware corporation (the "Company"), proposes,
subject to the terms and conditions contained herein, to sell to CIBC World
Markets Corp., Morgan Keegan & Company, Inc. and Raymond James & Associates,
Inc. (the "Underwriters"), an aggregate of 3,000,000 shares (the "Shares") of
the Company's Common Stock, $0.01 par value (the "Common Stock").

                  1.      Sale and Purchase of the Shares.

                  On the basis of the representations, warranties and agreements
contained in, and subject to the terms and conditions of, this Agreement the
Company agrees to sell to each of the Underwriters, and each of the Underwriters
agrees, severally and not jointly, to purchase from the Company, at a price of
$33.00 per share (the "Initial Price"), the number of Shares set forth opposite
the name of such Underwriter under the column "Number of Shares to be Purchased
from the Company" on Schedule I to this Agreement, subject to adjustment in
accordance with Section 9 hereof.



                  2. Delivery and Payment. Delivery by the Company of the Shares
to the Underwriters for their respective accounts, and payment of the purchase
price by certified or official


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bank check or checks payable in New York Clearing House (same day) funds drawn
to the order of the Company for the shares purchased from the Company, against
delivery of certificates therefor to the Underwriters, shall take place at the
offices of CIBC World Markets Corp., One World Financial Center, New York, New
York 10281, at 10:00 a.m., New York City time, on the third business day
following the date of this Agreement, or at such time on such other date, not
later than 10 business days after the date of this Agreement, as shall be agreed
upon by the Company and CIBC (such time and date of delivery and payment are
called the "Closing Date").

                  Certificates evidencing the Shares shall be registered in such
names and shall be in such denominations as the Underwriters shall request at
least two full business days before the Closing Date and shall be made available
to the Underwriters for checking and packaging, at such place as is designated
by CIBC, on the full business day before the Closing Date.

                  3. Representations and Warranties of the Company. The Company
hereby represents and warrants to each Underwriter as follows:

                  (a) The Company meets the requirements for use of Form S-3 for
         the primary offering of the Shares under the Securities Act of 1933, as
         amended (the "Securities Act") and the rules and regulations (the
         "Rules") of the Securities and Exchange Commission (the "Commission")
         thereunder. A Registration Statement on Form S-3 (File No. 333-89885),
         with respect to the Shares, including a Prospectus (as defined below),
         have been carefully prepared by the Company in conformity with the
         requirements of the Securities Act, and have been filed with the
         Commission and declared effective. Such Registration Statement and
         Prospectus may have been amended or supplemented prior to the date of
         this Underwriting Agreement; any such amendment of such Registration
         Statement or supplement was so prepared and filed, and any such
         amendment filed after the effective date of such Registration Statement
         (the "Effective Date") has been declared effective. No stop order
         suspending the effectiveness of the Registration Statement has been
         issued, and no proceeding for that purpose has been instituted or
         threatened by the Commission. A prospectus supplement (the "Prospectus
         Supplement") setting forth the terms of the offering, sale and plan of
         distribution of the Shares (the "Offering") and additional information
         concerning the Company and its business has been or will be so prepared
         and will be filed pursuant to Rule 424(b) of the Rules on or before the
         second business day after the date hereof (or such earlier time as may
         be required by the Rules). Copies of such Registration Statement and
         Prospectus, any such amendments or supplements and all documents
         incorporated by reference therein that were filed with the Commission
         on or prior to the date of this Underwriting Agreement (including one
         fully executed copy of the Registration Statement and of each amendment
         thereto for the Underwriters and their counsel) have been, or will be,
         delivered to the Underwriters and their counsel. The Registration
         Statement, as it may have heretofore been amended, is referred to
         herein as the "Registration Statement," and the final form of
         Prospectus included in the Registration Statement, as supplemented by
         the Prospectus Supplement, is referred to herein as the "Prospectus."
         Any


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         reference herein to the Registration Statement, the Prospectus or any
         amendment or supplement thereto shall be deemed to refer to and include
         the documents incorporated by reference therein, and any reference
         herein to the terms "amend," "amendment" or "supplement" with respect
         to the Registration Statement or Prospectus shall be deemed to refer to
         and include the filing after the execution hereof of any document with
         the Commission deemed to be incorporated by reference therein. For
         purposes of this Underwriting Agreement, all references to the
         Registration Statement and Prospectus or to any amendment or supplement
         thereto shall be deemed to include any copy filed with the Commission
         pursuant to its Electronic Data Gathering Analysis and Retrieval System
         (EDGAR), and such copy shall be identical in content to any Prospectus
         delivered to the Underwriters for use in connection with the offering
         of the Shares.

                  (b) Each part of the Registration Statement, when such part
         became or becomes effective and the Prospectus and any amendment or
         supplement thereto, on the date of filing thereof with the Commission
         and at the Closing Date conformed or will conform in all material
         respects with the requirements of the Securities Act and the Rules;
         each part of the Registration Statement, when such part became or
         becomes effective, or when such part was filed with the Commission, did
         not or will not contain an untrue statement of a material fact or omit
         to state a material fact required to be stated therein or necessary to
         make the statements therein not misleading; the Prospectus and any
         amendment or supplement thereto, on the date thereof and at the Closing
         Date, did not or will not include an untrue statement of a material
         fact or omit to state a material fact necessary to make the statements
         therein, in the light of the circumstances under which they were made,
         not misleading; except that the foregoing shall not apply to statements
         in, or omissions from, any such document in reliance upon, and in
         conformity with, written information concerning the Underwriters that
         was furnished to the Company by each Underwriter specifically for use
         in the preparation thereof.

                  (c) The documents incorporated by reference in the
         Registration Statement, the Prospectus, any amendment or supplement
         thereto, when they became or become effective under the Securities Act
         or were or are filed with the Commission under the Securities Act or
         the Securities Exchange Act of 1934, as amended (the "Exchange Act"),
         as the case may be, conformed or will conform in all material respects
         with the requirements of the Securities Act, the Rules, the Exchange
         Act and/or the rules and regulations of the Commission thereunder (the
         "Exchange Rules"), as applicable.

                  (d) The consolidated financial statements of the Company
         together with the related schedules and notes thereto, set forth or
         included or incorporated by reference in the Registration Statement and
         Prospectus fairly present the financial condition of the Company as of
         the dates indicated and the results of operations, changes in financial
         position, shareholders' equity and cash flows for the periods therein
         specified, in conformity with generally accepted accounting principles
         consistently applied throughout the periods


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         involved (except as otherwise stated therein). The summary and/or
         selected financial and statistical data included or incorporated by
         reference in the Registration Statement and the Prospectus present
         fairly the information shown therein and, to the extent based upon or
         derived from the financial statements, have been compiled on a basis
         consistent with the financial statements presented therein. In
         addition, any pro forma financial statements of the Company, and the
         related notes thereto, included or incorporated by reference in the
         Registration Statement and the Prospectus present fairly the
         information shown therein, have been prepared in accordance with the
         Commission's rules and guidelines with respect to pro forma financial
         statements and have been properly compiled on the basis described
         therein, and the assumptions used in the preparation thereof are
         reasonable and the adjustments used therein are appropriate to give
         effect to the transactions and circumstances referred to therein. No
         other financial statements are required to be set forth or incorporated
         by reference in the Registration Statement or the Prospectus under the
         Securities Act or the Rules, including any financial statements
         required by Rule 3-05 or Rule 3-14 of Regulation S-X.

                  (e) PricewaterhouseCoopers LLP, whose reports are incorporated
         by reference in the Registration Statement, are and, during the periods
         covered by their reports, were to the knowledge of the Company
         independent public accountants as required by the Securities Act and
         the Rules.

                  (f) The Company and each of its subsidiaries or other entities
         directly or indirectly controlled by the Company (the "Subsidiaries")
         have been duly organized and are validly existing as corporations,
         limited liability companies or limited partnerships, as the case may
         be, in good standing under the laws of their respective jurisdictions
         of incorporation or formation and are duly qualified to transact
         business as foreign corporations, limited liability companies or
         limited partnerships, as the case may be, and are in good standing
         under the laws of all other jurisdictions where the ownership or
         leasing of their respective properties or the conduct of their
         respective businesses requires such qualification, except where the
         failure to be so qualified does not amount to a material liability or
         disability to the Company and its Subsidiaries, taken as a whole. The
         Company and each of its Subsidiaries have full power (corporate and
         other) to own or lease their respective properties and conduct their
         respective businesses as described in the Registration Statement and
         the Prospectus and the Company has full power (corporate and other) to
         enter into this Agreement and to carry out all the terms and provisions
         hereof to be carried out by it. The Company does not own, lease or
         license any asset or property or conduct any business outside the
         United States of America.

                  (g) The issued shares of capital stock of each of the
         Company's Subsidiaries have been duly authorized and validly issued,
         are fully paid and nonassessable and, except for directors' qualifying
         shares and as otherwise set forth in the Prospectus are owned
         beneficially by the Company free and clear of any security interests,
         liens, encumbrances, equities or claims.


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                  (h) The Company has an authorized, issued and outstanding
         capitalization as set forth in the consolidated balance sheet of the
         Company dated June 30, 2000 included in the Company's Quarterly Report
         on Form 10-Q for the three-month period ended June 30, 2000 (the "Form
         10-Q") incorporated by reference in the Prospectus, except for (i)
         issuances of Common Stock pursuant to outstanding employee stock
         options and (ii) issuances of Common Stock after June 30, 2000 which
         is, or will be, described in documents incorporated by reference in the
         Prospectus or in the Prospectus Supplement. All of the issued shares of
         capital stock of the Company have been duly authorized and validly
         issued and are fully paid and nonassessable. The Shares have been duly
         authorized and at the Closing Date, after payment therefor in
         accordance herewith, will be validly issued, fully paid and
         nonassessable. No holders of outstanding shares of capital stock of the
         Company are entitled as such to any preemptive or other rights to
         subscribe for any of the Shares, and no holder of securities of the
         Company has any right which has not been fully exercised or waived to
         require the Company to register the offer or sale of any securities
         owned by such holder under the Securities Act in the public offering
         contemplated by this agreement or within the period ending 90 days
         after the date of this Agreement.

                  (i) The capital stock of the Company conforms to the
         description incorporated by reference in the Prospectus.

                  (j) Except as disclosed in the Prospectus or as will be
         described in the Prospectus Supplement, there are no outstanding (A)
         securities or obligations of the Company or any of its Subsidiaries
         convertible into or exchangeable for any capital stock of the Company
         or any such Subsidiary, (B) warrants, rights or options to subscribe
         for or purchase from the Company or any such Subsidiary any such
         capital stock or any such convertible or exchangeable securities or
         obligations, or (C) obligations of the Company or any such Subsidiary
         to issue any shares of capital stock, any such convertible or
         exchangeable securities or obligations, or any such warrants, rights or
         options.

                  (k) The execution and delivery of this Agreement have been
         duly authorized by the Company and this Agreement has been duly
         executed and delivered by the Company, and is the valid and binding
         agreement of the Company, enforceable against the Company in accordance
         with its terms.

                  (l) No litigation or governmental proceedings are pending to
         which the Company or any of its Subsidiaries is a party or to which the
         property of the Company or any of its Subsidiaries is subject that (i)
         are required to be described in the Registration Statement or the
         Prospectus and are not described therein or in the documents
         incorporated by reference thereto or (ii) might reasonably be expected
         to have a material adverse effect on the condition (financial or
         otherwise), assets, net worth, business prospects or results of


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         operations of the Company and its Subsidiaries, taken as a whole (a
         "Material Adverse Effect"), and no such proceedings have been
         threatened against the Company or any of its Subsidiaries or with
         respect to any of their respective properties; and no contract or other
         document is required to be described in the Registration Statement or
         the Prospectus or to be filed as an exhibit to the Registration
         Statement or in the documents incorporated by reference thereto, that
         is not described therein or filed as required.

                  (m) The issuance, offering and sale of the Shares to the
         Underwriters by the Company pursuant to this Agreement, the compliance
         by the Company with the other provisions of this Agreement and the
         consummation of the other transactions herein contemplated do not (i)
         require the consent, approval, authorization, registration or
         qualification of or with any governmental authority, except such as
         have been obtained, such as may be required under state securities or
         blue sky laws and, if the registration statement filed with respect to
         the Shares (as amended) is not effective under the Securities Act as of
         the time of execution hereof, such as may be required (and shall be
         obtained as provided in this Agreement) under the Securities Act, or
         (ii) conflict with or result in a breach or violation of any of the
         terms and provisions of, or constitute a default under, any indenture,
         mortgage, deed of trust, lease or other agreement or instrument to
         which the Company or any of its Subsidiaries is a party or by which the
         Company or any of its Subsidiaries or any of their respective
         properties are bound, or the charter documents or by-laws of the
         Company or any of its Subsidiaries, or any statute or any judgment,
         decree, order, rule or regulation of any court or other governmental
         authority or any arbitrator applicable to the Company or any of its
         Subsidiaries.

                  (n) Subsequent to the respective dates as of which information
         is given in the Registration Statement and the Prospectus, neither the
         Company nor any of its Subsidiaries has sustained any material loss or
         interference with their respective businesses or properties from fire,
         flood, hurricane, accident or other calamity, whether or not covered by
         insurance, or from any labor dispute or any legal or governmental
         proceeding and there has not been any material adverse change, or any
         development involving a prospective material adverse change, in the
         condition (financial or otherwise), management, business prospects, net
         worth, or results of the operations of the Company or any of its
         Subsidiaries, except in each case as described in or contemplated by
         the Prospectus.

                  (o) The Company has not, directly or indirectly, (i) taken any
         action designed to cause or to result in, or that has constituted or
         which might reasonably be expected to constitute, the stabilization or
         manipulation of the price of any security of the Company to facilitate
         the sale or resale of the Shares or (ii) since the filing of the
         Registration Statement (A) sold, bid for, purchased, or paid anyone any
         compensation for soliciting purchases of, the Shares (except for the
         sale of the Shares by the Company under this Agreement) or (B) paid or
         agreed to pay to any person any compensation for soliciting another to
         purchase any other Shares of the Company.


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                  (p) Except as disclosed in documents incorporated by reference
         in the Registration Statement or the Prospectus, the Company and each
         of its Subsidiaries have (i) good and defensible title to their
         interests in oil and gas properties owned by them, (ii) good and
         marketable title in fee simple to all other real property owned by them
         and (iii) good and marketable title to all personal property owned by
         them, in each case free and clear of any security interests, liens,
         encumbrances, equities, claims and other defects, except such as do not
         materially and adversely affect the value of such property and do not
         interfere with the use made or proposed to be made of such property by
         the Company or such Subsidiary, and any real property and buildings
         held under lease by the Company or any such Subsidiary are held under
         valid, subsisting and enforceable leases, with such exceptions as are
         not material and do not interfere with the use made and proposed to be
         made of such property and buildings by the Company or such Subsidiary,
         in each case except as described in or contemplated by the Prospectus.

                  (q) The participation agreements, joint development
         agreements, joint operating agreements, farm-out agreements and other
         agreements described in the Prospectus or in the documents incorporated
         by reference therein, relating to the Company's rights with respect to
         the ownership, lease or operation of oil and gas properties, the
         acquisition of interests in oil and gas properties or the exploration
         for, development of or production of oil and gas reserves thereon
         constitute valid and binding agreements of the Company and its
         Subsidiaries that are parties thereto and, to the best knowledge of the
         Company, of the other parties thereto, enforceable in accordance with
         their terms, except as enforceability may be subject to bankruptcy,
         insolvency, reorganization and other laws of general applicability
         relating to or affecting creditors' rights and to general equity
         principles.

                  (r) The information underlying the estimates of the proved
         reserves of the Company and its Subsidiaries as of December 31, 1999,
         which was supplied by the Company to M. Brian Wallace ("Wallace"), an
         independent petroleum engineer, for purposes of auditing the reserve
         reports and estimates of the Company, including, without limitation,
         production, costs of operation and development, current prices for
         production, agreements relating to current and future operations and
         sales of production, was true and correct in all material respects on
         the dates such estimates were made and such information was supplied
         and was prepared in accordance with customary industry practices; to
         the knowledge of the Company, Wallace is an independent petroleum
         engineer with respect to the Company; other than normal production of
         the reserves and intervening spot market product price fluctuations
         described in the Prospectus or in the documents incorporated by
         reference therein, the Company is not aware of any facts or
         circumstances that would result in a material adverse change in the
         reserves, or the present value of future net cash flows therefrom, as
         described in the Prospectus or in the documents incorporated by
         reference therein; estimates of such reserves and present values as
         described in the Prospectus or in the documents incorporated by
         reference therein comply in all material respects to the applicable
         requirements of Regulation S-X and Industry Guide 2 under the Act.


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                  (s) Except as described in the Prospectus, as of the date
         hereof, (i) all royalties, rentals, deposits and other amounts due on
         the oil and gas properties of the Company have been properly and timely
         paid, and no proceeds from the sale or production attributable to the
         oil and gas properties of the Company are currently being held in
         suspense by any purchaser thereof, except where such amounts due could
         not, singly or in the aggregate, have a material adverse effect on the
         financial condition or results of operations of the Company and its
         Subsidiaries taken as a whole and (ii) there are no claims under
         take-or-pay contracts pursuant to which natural gas purchasers have any
         make-up rights affecting the interest of the Company in its oil and gas
         properties, except where such claims would not, singly or in the
         aggregate, have a Material Adverse Effect.

                  (t) As of the date hereof, the aggregate undiscounted monetary
         liability of the Company for petroleum taken or received under any
         operating or gas balancing and storage agreement relating to its oil
         and gas properties that permits any person to receive any portion of
         the interest of the Company in any petroleum or to receive cash or
         other payments to balance any disproportionate allocation of petroleum
         would not, in the aggregate, have a Material Adverse Effect.

                  (u) Subsequent to the respective dates as of which information
         is given in the Registration Statement and the Prospectus or included
         in the documents incorporated by reference therein, (1) the Company and
         its Subsidiaries have not incurred any material liability or
         obligation, direct or contingent, nor entered into any material
         transaction not in the ordinary course of business; (2) the Company has
         not purchased any of its outstanding capital stock, nor declared, paid
         or otherwise made any dividend or distribution of any kind on its
         capital stock; and (3) there has not been any material change in the
         capital stock, short-term debt or long-term debt of the Company and its
         consolidated Subsidiaries, except in each case as described in or
         contemplated by the Prospectus and, with respect to clause (3), except
         for the conversion of the Subsidiaries from corporations to limited
         liability limited partnerships effective December 29, 1999.

                  (v) No labor dispute with the employees of the Company or any
         of its Subsidiaries exists or is threatened or imminent that could
         reasonably be expected to have a Material Adverse Effect, except as
         described in or contemplated by the Prospectus or in the documents
         incorporated by reference therein.

                  (w) The Company and each of its Subsidiaries are insured by
         insurers of recognized financial responsibility against such losses and
         risks and in such amounts as are prudent and customary in the
         businesses in which they are engaged; neither the Company nor any such
         Subsidiary has been refused any insurance coverage sought or applied
         for; and neither the Company nor any such Subsidiary has any reason to
         believe that it will not be


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         able to renew its existing insurance coverage as and when such coverage
         expires or to obtain similar coverage from similar insurers as may be
         necessary to continue its business at a cost that would not have a
         Material Adverse Effect , except as described in or contemplated by the
         Prospectus.

                  (x) Except as described in documents incorporated by reference
         in the Registration Statement or the Prospectus, no Subsidiary of the
         Company is currently prohibited, directly or indirectly, from paying
         any dividends to the Company, from making any other distribution on
         such Subsidiary's capital stock, from repaying to the Company any loans
         or advances to such Subsidiary from the Company or from transferring
         any of such Subsidiary's property or assets to the Company or any other
         Subsidiary of the Company, except (i) for restrictions imposed by
         general corporate law of the jurisdiction in which any such Subsidiary
         may be organized or (ii) as described in or contemplated by the
         Prospectus or (iii) restrictions which would not, singly or in the
         aggregate, have a Material Adverse Effect.

                  (y) The Company and its Subsidiaries possess all certificates,
         authorizations and permits issued by the appropriate federal, state or
         foreign regulatory authorities necessary to conduct their respective
         businesses, except where a failure to possess any such items would not
         have a Material Adverse Effect, and neither the Company nor any such
         Subsidiary has received any notice of proceedings relating to the
         revocation or modification of any such certificate, authorization or
         permit which, singly or in the aggregate, if the subject of an
         unfavorable decision, ruling or finding, would have a Material Adverse
         Effect, except as described in or contemplated by the Prospectus or in
         the documents incorporated by reference therein.

                  (z) The Company has filed all foreign, federal, state and
         local tax returns that are required to be filed or has requested
         extensions thereof (except in any case in which the failure so to file
         would not have a Material Adverse Effect) and has paid all taxes
         required to be paid by it and any other assessment, fine or penalty
         levied against it, to the extent that any of the foregoing is due and
         payable, except for any such assessment, fine or penalty that is
         currently being contested in good faith, or as described in or
         contemplated by the Prospectus.

                  (aa) Neither the Company nor any of its Subsidiaries is in
         violation of any federal or state law or regulation relating to
         occupational safety and health; the Company and its Subsidiaries have
         received all permits, licenses or other approvals required of them
         under applicable federal and state occupational safety and health laws
         and regulations to conduct their respective businesses; and the Company
         and each such Subsidiary is in compliance with all terms and conditions
         of any such permit, license or approval, except in each case any such
         violation, failure to receive required permits, licenses or other
         approvals or failure to comply with the terms and conditions of such
         permits, licenses or approvals which would


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         not, singly or in the aggregate, have a Material Adverse Effect except
         as described in or contemplated by the Prospectus.

                  (bb) Each certificate signed by any officer of the Company and
         delivered to the Underwriters or counsel for the Underwriters shall be
         deemed to be a representation and warranty by the Company to the
         Underwriters as to the matters covered thereby.

                  (cc) Except (i) for the limited and general partnership
         interests of each of the Subsidiaries owned by the Company, (ii) as
         described in or contemplated by the Prospectus, and (iii) for
         investments that are not material to the Company and its Subsidiaries
         taken as a whole, neither the Company nor any such Subsidiary owns any
         shares of stock or any other equity securities of any corporation or
         has any equity interest in any firm, partnership, association or other
         entity.

                  (dd) No default exists, and no event has occurred which, with
         notice or lapse of time or both, would constitute a default in the due
         performance and observance of any term, covenant or condition of any
         indenture, mortgage, deed of trust, lease or other agreement or
         instrument to which the Company or any of its Subsidiaries is a party
         or by which the Company or any of its Subsidiaries or any of their
         respective properties is bound or may be affected, except for any such
         default or event that will not, individually or in the aggregate, have
         a Material Adverse Effect.

                  (ee) The Company has not distributed any offering material in
         connection with the offering and sale of the Shares other than the
         Registration Statement or any amendment thereto, any preliminary
         prospectus or the Prospectus or any amendment or supplement thereto, or
         other materials, if any, permitted by the Act.

                  (ff) The Company and each of its Subsidiaries owns or
         possesses adequate and enforceable rights to use all trademarks,
         trademark applications, trade names, service marks, copyrights,
         copyright applications, licenses, know-how and other similar rights and
         proprietary knowledge (collectively, "Intangibles") described in or
         incorporated by reference in the Registration Statement and the
         Prospectus as being owned by it necessary for the conduct of its
         business. Neither the Company nor any of its Subsidiaries has received
         any notice of, or is not aware of, any infringement of or conflict with
         asserted rights of others with respect to any Intangibles.

                  (gg) Except for such transactions as are disclosed in the
         Company's Proxy Statement filed with the SEC in connection with the
         Company's annual meeting of shareholders for 2000, no transaction has
         occurred between or among the Company and any of its officers or
         directors or five percent shareholders or any affiliate or affiliates
         of any such officer or director or five percent shareholders that is
         required to be described in and is not described in or incorporated by
         reference in the Registration Statement and the Prospectus.


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                  (hh) A registration statement has been filed on Form 8-A
         pursuant to the Exchange Act, which registration statement complies in
         all material respects with the Exchange Act.

                  (ii) The books, records and accounts of the Company and its
         Subsidiaries accurately and fairly reflect, in reasonable detail, the
         transactions in, and dispositions of, the assets of, and the results of
         operations of, the Company and its Subsidiaries. The Company and each
         of its Subsidiaries maintains a system of internal accounting controls
         sufficient to provide reasonable assurances that (i) transactions are
         executed in accordance with management's general or specific
         authorizations, (ii) transactions are recorded as necessary to permit
         preparation of financial statements in accordance with generally
         accepted accounting principles and to maintain asset accountability,
         (iii) access to assets is permitted only in accordance with
         management's general or specific authorization and (iv) the recorded
         accountability for assets is compared with the existing assets at
         reasonable intervals and appropriate action is taken with respect to
         any differences.

                  (jj) There are no affiliations with the NASD among the
         Company's officers, directors or, to the best of the knowledge of the
         Company, any five percent or greater stockholder of the Company, except
         as set forth in the Registration Statement or otherwise disclosed in
         writing to the Underwriters.

                  (kk) (i) Each of the Company and its Subsidiaries is in
         compliance in all material respects with all rules, laws and regulation
         relating to the use, treatment, storage and disposal of toxic
         substances and protection of health or the environment ("Environmental
         Law") which are applicable to its business except where such
         non-compliance would not, individually or in the aggregate, have a
         Material Adverse Effect on the Company and its Subsidiaries, taken as a
         whole; (ii) neither the Company nor its Subsidiaries has received any
         notice from any governmental authority or third party of an asserted
         claim under Environmental Laws; (iii) each of the Company and its
         Subsidiaries has received all permits, licenses or other approvals
         required of it under applicable Environmental Laws to conduct its
         business and is in compliance with all terms and conditions of any such
         permit, license or approval, except where the failure to have such
         permit, license or approval or to so comply would not, individually or
         in the aggregate, have a Material Adverse Effect on the Company and its
         Subsidiaries, taken as a whole; (iv) to the Company's knowledge, no
         facts currently exist that will require the Company or its Subsidiaries
         to make future material capital expenditures to comply with
         Environmental Laws; and (v) no property which is or has been owned,
         leased or occupied by the Company or its Subsidiaries has been
         designated as a Superfund site pursuant to the Comprehensive
         Environmental Response, Compensation of Liability Act of 1980, as
         amended (42 U.S.C. Section 9601, et. seq.) ("CERCLA") or otherwise
         designated as a


                                       11
   12



         contaminated site under applicable state or local law. Neither the
         Company nor any of its Subsidiaries has been named as a "potentially
         responsible party" under CERCLA.

                  (ll) The Company is not and, after giving effect to the
         offering and sale of the Shares and the application of proceeds thereof
         as described in the Prospectus, will not be an "investment company"
         within the meaning of the Investment Company Act of 1940, as amended
         (the "Investment Company Act").

                  (mm) The Company, its Subsidiaries or any other person
         associated with or acting on behalf of the Company or its Subsidiaries
         including, without limitation, any director, officer, agent or employee
         of the Company or its Subsidiaries has not, directly or indirectly,
         while acting on behalf of the Company or its Subsidiaries (i) used any
         corporate funds for unlawful contributions, gifts, entertainment or
         other unlawful expenses relating to political activity; (ii) made any
         unlawful payment to foreign or domestic government officials or
         employees or to foreign or domestic political parties or campaigns from
         corporate funds; (iii) violated any provision of the Foreign Corrupt
         Practices Act of 1977, as amended; or (iv) made any other unlawful
         payment.

                  (nn) The Company has reviewed its operations and that of its
         Subsidiaries and evaluated the extent to which the business or
         operations of the Company or any of its Subsidiaries has been affected
         by the Year 2000 Problem (that is, any significant risk that computer
         hardware or software applications used by the Company and its
         Subsidiaries have not, in the case of dates or time periods occurring
         after December 31, 1999, function at least as effectively as in the
         case of dates or time periods occurring prior to January 1, 2000); as a
         result of such review and experience, (i) the Company has no reason to
         believe, and does not believe, that (A) there are any issues related to
         the Company's response to the Year 2000 Problem that are of a character
         required to be described or referred to in the Registration Statement
         or Prospectus which have not been accurately described in the
         Registration Statement or Prospectus and (B) the Year 2000 Problem has
         had, or will have, a Material Adverse Effect, or result in any material
         loss or interference with the business or operations of the Company and
         its Subsidiaries, taken as a whole; and (ii) the Company reasonably
         believes, after due inquiry, that the suppliers, vendors, customers or
         other material third parties used or served by the Company and such
         Subsidiaries have adequately addressed the Year 2000 Problem, except to
         the extent that a failure to address the Year 2000 by a supplier,
         vendor, customer or material third party would not have a Material
         Adverse Effect.

                  (oo) No holder of any security of the Company has the right to
         have any security owned by such holder included in the Registration
         Statement or to demand registration of any security owned by such
         holder during the period ending 90 days after the date of this
         Agreement. Each director and executive officer of the Company (other
         than Messrs. Rossi and Gist) has delivered to the Underwriters his
         enforceable written lock-up agreement in the form attached to this
         Agreement ("Lock-Up Agreement").


                                       12
   13


                  4. Conditions of the Underwriters' Obligations. The
obligations of the Underwriters under this Agreement are several and not joint.
The respective obligations of the Underwriters to purchase the Shares is subject
to each of the following terms and conditions:

                  (a) Notification that the Registration Statement has become
         effective shall have been received by the Underwriters and the
         Prospectus Supplement shall have been timely filed with the Commission
         in accordance with Section 5(a) of this Agreement.

                  (b) No order preventing or suspending the use of the
         Prospectus shall have been or shall be in effect and no order
         suspending the effectiveness of the Registration Statement shall be in
         effect and no proceedings for such purpose shall be pending before or
         threatened by the Commission, and any requests for additional
         information on the part of the Commission (to be included in the
         Registration Statement or the Prospectus or otherwise) shall have been
         complied with to the satisfaction of the Commission and the
         Underwriters.

                  (c) The representations and warranties of the Company
         contained in this Agreement and in the certificates delivered pursuant
         to Section 4(d) shall be true and correct when made and on and as of
         the Closing Date as if made on such date. The Company shall have
         performed all covenants and agreements and satisfied all the conditions
         contained in this Agreement required to be performed or satisfied by
         them at or before the Closing Date.

                  (d) The Underwriters shall have received on the Closing Date a
         certificate, addressed to the Underwriters and dated the Closing Date,
         of the chief executive or chief operating officer and the chief
         financial officer or chief accounting officer of the Company to the
         effect that (i) the signers of such certificate have carefully examined
         the Registration Statement, the Prospectus and this Agreement and that
         the representations and warranties of the Company in this Agreement are
         true and correct on and as of the Closing Date with the same effect as
         if made on the Closing Date and the Company has performed all covenants
         and agreements and satisfied all conditions contained in this Agreement
         required to be performed or satisfied by it at or prior to the Closing
         Date, and (ii) no stop order suspending the effectiveness of the
         Registration Statement has been issued and to the best of their
         knowledge, no proceedings for that purpose have been instituted or are
         pending under the Securities Act.

                  (e) The Underwriters shall have received, at the time this
         Agreement is executed and on the Closing Date a signed letter from
         PricewaterhouseCoopers LLP addressed to the Underwriters and dated,
         respectively, the date of this Agreement and the Closing Date, in form
         and substance reasonably satisfactory to the Underwriters and their
         counsel, confirming that they are independent accountants of the
         Company within the meaning of the Securities Act and the Rules, that
         the response to Item 10 of the Registration Statement is correct
         insofar as it relates to them and stating in effect that:


                                       13
   14


                           (i) in their opinion the audited financial statements
                  and financial statement schedules included or incorporated by
                  reference in the Registration Statement and the Prospectus and
                  reported on by them comply as to form in all material respects
                  with the applicable accounting requirements of the Securities
                  Act and the Rules;

                           (ii) on the basis of a reading of the amounts
                  included in the Company's Annual Report on Form 10-K, as
                  amended (the "1999 Form 10-K," which is incorporated by
                  reference in the Registration Statement and the Prospectus),
                  under the heading "Selected Financial Data," carrying out
                  certain procedures (but not an examination in accordance with
                  generally accepted auditing standards) which would not
                  necessarily reveal matters of significance with respect to the
                  comments set forth in such letter, a reading of the minutes of
                  the meetings of the stockholders and directors of the Company,
                  and inquiries of certain officials of the Company who have
                  responsibility for financial and accounting matters of the
                  Company as to transactions and events subsequent to the date
                  of the latest audited financial statements, except as
                  disclosed in the Registration Statement and the Prospectus,
                  nothing came to their attention which caused them to believe
                  that:

                           (A)      the amounts in "Selected Financial Data"
                                    included in the 1999 Form 10-K (which is
                                    incorporated by reference into the
                                    Registration Statement and the Prospectus)
                                    do not agree with the corresponding amounts
                                    in the audited financial statements from
                                    which such amounts were derived, or do not
                                    comply as to the form in all material
                                    respects with the applicable accounting
                                    requirements of the Securities Act and the
                                    Rules or that the information set forth
                                    therein is not fairly stated in relation to
                                    the financial statements included in the
                                    Registration Statement or Prospectus from
                                    which certain of such data were derived;

                           (B)      any material modifications should be made to
                                    the unaudited consolidated financial
                                    statements included or incorporated by
                                    reference in the Registration Statement or
                                    the Prospectus for them to be in conformity
                                    with Generally Acceptable Auditing
                                    Standards;

                           (C)      that the unaudited consolidated financial
                                    statements included or incorporated by
                                    reference in the Registration Statement or
                                    the Prospectus do not comply as to form in
                                    all material respects with the applicable
                                    requirements of the Securities Act and the
                                    Rules;

                           (D)      with respect to the Company, there were, at
                                    a specified date not more than three
                                    business days prior to the date of the
                                    letter, and based upon the most recently
                                    available consolidated financial statements
                                    of the Company, any increases in the current
                                    liabilities and long-term liabilities of the
                                    Company or any decreases in working capital
                                    or the


                                       14
   15


                                    stockholders' equity in the Company, as
                                    compared with the amounts shown on the
                                    Company's audited balance sheet for the
                                    fiscal year ended December 31, 1999 and the
                                    Company's unaudited balance sheet as of June
                                    30, 2000 (included in the Form 10-Q and
                                    incorporated by reference in the
                                    Registration Statement and the Prospectus),
                                    or any decreases in net income (or increases
                                    in net loss), as compared to a comparable
                                    period during the last fiscal year; and

                           (iii) they have performed certain other procedures as
                  may be permitted under Generally Acceptable Auditing Standards
                  as a result of which they determined that certain information
                  of an accounting, financial or statistical nature (which is
                  limited to accounting, financial or statistical information
                  derived from the general accounting records of the Company)
                  set forth in the Registration Statement and the Prospectus (or
                  in documents incorporated by reference therein) and reasonably
                  specified by the Underwriters agrees with the accounting
                  records of the Company.

                           References to the Registration Statement and the
                  Prospectus in this paragraph (e) are to such documents as
                  amended and supplemented at the date of the letter.

                  (f) The Underwriters shall have received on the Closing Date
         from Baker & Hostetler LLP, counsel for the Company, an opinion,
         addressed to the Underwriters and dated the Closing Date, and stating
         in effect that:

                           (i) the Company and each of the Subsidiaries have
                  been duly incorporated or formed and are validly existing as
                  corporations, limited liability companies or limited liability
                  limited partnerships, as the case may be, in good standing
                  under the laws of their respective jurisdictions of
                  incorporation or formation and are duly qualified to transact
                  business as foreign corporations or limited liability
                  companies, limited liability limited partnerships or limited
                  partnerships, as the case may be, and are in good standing
                  under the laws of all other jurisdictions where the ownership
                  or leasing of their respective properties or the conduct of
                  their respective businesses requires such qualification,
                  except where the failure to be so qualified does not amount to
                  a material liability or disability to the Company and the
                  Subsidiaries, taken as a whole;

                           (ii) the Company and each of the Subsidiaries have
                   corporate or partnership power to own or lease their
                   respective properties and conduct their respective businesses
                   as described in the Registration Statement and the
                   Prospectus, and the Company has corporate power to enter into
                   this Agreement and to carry out all the terms and provisions
                   hereof to be carried out by it;

                           (iii) the limited and general partner interests of
                  each of the Subsidiaries are beneficially owned (directly or
                  indirectly) by the Company free and clear of any


                                       15
   16


                  perfected security interests or, to the best knowledge of such
                  counsel, any other security interests, liens, encumbrances,
                  equities or claims;

                           (iv) the Company has an authorized, issued and
                  outstanding capital stock as set forth in the Form 10-Q; all
                  of the issued shares of capital stock of the Company have been
                  duly authorized and validly issued and are fully paid and
                  nonassessable, and to the knowledge of such counsel have been
                  issued in compliance with all applicable federal and state
                  securities laws and were not issued in violation of or subject
                  to any preemptive rights contained in the Certificate of
                  Incorporation or other rights to subscribe for or purchase
                  securities known to such counsel; the Shares have been duly
                  authorized by all necessary corporate action of the Company
                  and, when issued and delivered to and paid for by the
                  Underwriters pursuant to this Agreement, will be validly
                  issued, fully paid and nonassessable; the Shares have been
                  duly included for trading on the Nasdaq National Market; to
                  the knowledge of such counsel, except for such rights as have
                  been waived as of the date hereof, no holders of outstanding
                  shares of capital stock of the Company are entitled as such to
                  any preemptive rights contained in the Certificate of
                  Incorporation or other rights to subscribe for any of the
                  Shares known to such counsel; and, assuming that the Company
                  has sent written notice to all holders of securities of the
                  Company who have the right to register the offer or sale of
                  any securities owned by such holders under the Act in
                  connection with the public offering contemplated by this
                  Agreement, there is no holder of such securities who has not
                  waived such registration rights or failed to exercise such
                  registration rights within the time permitted by the notice;

                           (v) the statements set forth under the "Description
                  of Capital Stock" incorporated by reference in the Prospectus,
                  insofar as such statements purport to summarize certain
                  provisions of the capital stock of the Company, provide a fair
                  summary of such provisions; and the statements set forth under
                  the heading "Business and Properties--Government Regulation
                  and Environmental" in the Company's 1999 Form 10-K
                  incorporated by reference into the Prospectus, insofar as such
                  statements constitute a summary of the legal matters,
                  documents or proceedings referred to therein, provide a fair
                  summary in all material respects of such legal matters,
                  documents and proceedings;

                           (vi) the execution and delivery of this Agreement
                  have been duly authorized by all necessary corporate action of
                  the Company and this Agreement has been duly executed and
                  delivered by the Company;

                           (vii) to such counsel's knowledge (A) no legal or
                  governmental proceedings are pending to which the Company or
                  any of the Subsidiaries is a party or to which the property of
                  the Company or any of the Subsidiaries is subject that are
                  required to be described in the Registration Statement or the
                  Prospectus and are not described therein, and no such
                  proceedings have been threatened against the


                                       16
   17


                  Company or any of the Subsidiaries or with respect to any of
                  their respective properties and (B) no contract or other
                  document is required to be described in the Registration
                  Statement or the Prospectus or to be filed as an exhibit to
                  the Registration Statement that is not described therein or
                  filed as required;

                           (viii) the issuance, offering and sale of the Shares
                  to the Underwriters by the Company pursuant to this Agreement,
                  the compliance by the Company with the other provisions of
                  this Agreement and the consummation of the other transactions
                  herein contemplated do not (A) require the consent, approval,
                  authorization, registration or qualification of or with any
                  governmental authority other than as may be required by
                  federal and state securities laws, or (B) conflict with or
                  result in a breach or violation of any of the terms and
                  provisions of, or constitute a default under, any indenture,
                  mortgage, deed of trust, lease or other agreement or
                  instrument, known to such counsel, to which the Company or any
                  of the Subsidiaries is a party or by which the Company or any
                  of the Subsidiaries or any of their respective properties are
                  bound, or the charter documents or by-laws of the Company or
                  any of the Subsidiaries, or any statute or any judgment,
                  decree, order, rule or regulation of any court or other
                  governmental authority or any arbitrator known to such counsel
                  and applicable to the Company or the Subsidiaries, except that
                  no opinion is expressed as to state securities or blue sky
                  laws for purposes of this subparagraph;

                           (ix) the Registration Statement is effective under
                  the Act; any required filing of the Prospectus, or the
                  Prospectus Supplement, pursuant to Rule 424(b) has been made
                  in the manner and within the time period required by 424(b);
                  and, to the knowledge of such counsel, no stop order
                  suspending the effectiveness of the Registration Statement or
                  any amendment thereto has been issued, and no proceedings for
                  that purpose have been instituted or threatened or are
                  contemplated by the Commission; and

                           (x) the Registration Statement and the Prospectus
                  Supplement (in each case, other than the financial statements
                  and other financial information contained therein, as to which
                  such counsel need express no opinion) comply as to form in all
                  material respects with the applicable requirements of the Act
                  and the rules and regulations of the Commission thereunder.

                  To the extent deemed advisable by such counsel, they may rely
as to matters of fact on certificates of responsible officers of the Company and
public officials and on the opinions of other counsel satisfactory to the
Underwriters as to matters which are governed by laws other than the laws of the
State of Colorado, the General Corporation Law of the State of Delaware and the
Federal laws of the United States; provided that such counsel shall state that
in their opinion the Underwriters and they are justified in relying on such
other opinions. Copies of such certificates and other opinions shall be
furnished to the Underwriters and counsel for the Underwriters.


                                       17
   18



                  Such counsel shall also state that they have no reason to
believe that the Registration Statement at the time it became effective (except
with respect to the financial statements and notes and schedules thereto and
other financial and oil and gas reserve data, as to which such counsel need
express no belief) contained any untrue statement of a material fact or omitted
to state a material fact required to be stated therein or necessary to make the
statements therein not misleading, or that the Prospectus as amended or
supplemented (except with respect to the financial statements, notes and
schedules thereto and other financial and oil and gas reserve data, as to which
such counsel need make no statement) on the date thereof contained any untrue
statement of a material fact or omitted to state a material fact necessary in
order to make the statements therein, in the light of the circumstances under
which they were made, not misleading.

                  (g) All proceedings taken in connection with the sale of the
         Shares as herein contemplated shall be reasonably satisfactory in form
         and substance to the Underwriters, and counsel and the Underwriters
         shall have received from Andrews & Kurth L.L.P., a favorable opinion,
         addressed to the Underwriters and dated the Closing Date, with respect
         to the Shares, the Registration Statement and the Prospectus, and such
         other related matters, as the Underwriters may reasonably request, and
         the Company shall have furnished to Andrews & Kurth L.L.P., such
         documents as they may reasonably request for the purpose of enabling
         them to pass upon such matters.

                  (h) The Underwriters shall have received copies of the Lock-up
         Agreements executed by each entity or person described in Section
         3(oo).

                  (i) The Company shall have furnished or caused to be furnished
         to the Underwriters such further certificates or documents as the
         Underwriters shall have reasonably requested.

                  5. Covenants of the Company.

                  (a) The Company covenants and agrees as follows:

                           (i) The Company will cause the Prospectus Supplement
                  to be filed (but only if the Underwriters or their counsel has
                  not reasonably objected thereto by notice to the Company after
                  having been furnished a copy a reasonable time prior to
                  filing) and will notify the Underwriters promptly of such
                  filing.

                           (ii) The Company shall promptly advise the
                  Underwriters in writing (i) when any amendment to the
                  Registration Statement shall have become effective or any
                  subsequent supplement to the Prospectus has been filed, (ii)
                  of any request by the Commission for any amendment of the
                  Registration Statement or the Prospectus or for any additional
                  information, (iii) of the issuance of any stop order
                  suspending the effectiveness of the Registration Statement or
                  the institution or threatening of any proceeding for that
                  purpose and (iv) of the receipt by the Company of any
                  notification with respect to the suspension of the
                  qualification of the Shares for sale in any jurisdiction or
                  the initiation or


                                       18
   19


                  threatening of any proceeding for such purpose. The Company
                  shall not file any amendment of the Registration Statement or
                  supplement to the Prospectus unless the Company has furnished
                  the Underwriters a copy for their review prior to filing and
                  shall not file any such proposed amendment or supplement to
                  which the Underwriters reasonably object. The Company shall
                  use its best efforts to prevent the issuance of any such stop
                  order and, if issued, to obtain as soon as possible the
                  withdrawal thereof.

                           (iii) If, at any time when a prospectus relating to
                  the Shares is required to be delivered under the Securities
                  Act and the Rules, any event occurs as a result of which the
                  Prospectus as then amended or supplemented would include any
                  untrue statement of a material fact or omit to state any
                  material fact necessary to make the statements therein in the
                  light of the circumstances under which they were made not
                  misleading, or if it shall be necessary to amend or supplement
                  the Prospectus to comply with the Securities Act or the Rules,
                  the Company promptly shall prepare and file with the
                  Commission, subject to the second sentence of paragraph (ii)
                  of this Section 7(a), an amendment or supplement which shall
                  correct such statement or omission or an amendment which shall
                  effect such compliance.

                           (iv) The Company shall make generally available to
                  its security holders and to the Underwriters as soon as
                  practicable, but not later than 45 days after the end of the
                  12-month period beginning at the end of the fiscal quarter of
                  the Company during which the Effective Date occurs (or 90 days
                  if such 12-month period coincides with the Company's fiscal
                  year), an earning statement (which need not be audited) of the
                  Company, covering such 12-month period, which shall satisfy
                  the provisions of Section 11(a) of the Securities Act or Rule
                  158 of the Rules.

                           (v) The Company shall furnish to CIBC and counsel for
                  the Underwriters, without charge, signed copies of the
                  Registration Statement (including all exhibits thereto and
                  amendments thereof) and to each other Underwriter a copy of
                  the Registration Statement (without exhibits thereto) and all
                  amendments thereof and, so long as delivery of a prospectus by
                  an Underwriter or dealer may be required by the Securities Act
                  or the Rules, as many copies of the Prospectus and any
                  amendments thereof and supplements thereto as the Underwriter
                  may reasonably request.

                           (vi) The Company shall cooperate with the
                  Underwriters and their counsel in endeavoring to qualify the
                  Shares for offer and sale in connection with the offering
                  under the laws of such jurisdictions as the Underwriters may
                  designate and shall maintain such qualifications in effect so
                  long as required for the distribution of the Shares; provided,
                  however, that the Company shall not be required in connection
                  therewith, as a condition thereof, to qualify as a foreign


                                       19
   20


                  corporation or to execute a general consent to service of
                  process in any jurisdiction or subject itself to taxation as
                  doing business in any jurisdiction.

                           (vii) Without the prior written consent of the
                  Underwriters, for a period of 90 days after the date of this
                  Agreement, the Company and each of its individual directors
                  and executive officers shall not issue, sell or register with
                  the Commission (other than on Form S-8 or on any successor
                  form), or otherwise dispose of, directly or indirectly, any
                  equity securities of the Company (or any securities
                  convertible into, exercisable for or exchangeable for equity
                  securities of the Company), except for the issuance of the
                  Shares pursuant to the Registration Statement and the issuance
                  of shares pursuant to the Company's existing stock option plan
                  or bonus plan as described in the Registration Statement and
                  the Prospectus. In the event that during this period any
                  person or entity requests the Company to file a registration
                  statement under the Act to cover the resale by such person or
                  entity of shares of Common Stock, the Company may do so, but
                  only consistent with or pursuant to the terms of existing
                  registration rights.

                           (viii) On or before completion of this offering, the
                  Company shall make all filings required under applicable
                  securities laws and by the Nasdaq National Market (including
                  any required registration under the Exchange Act).

                           (ix) The Company will apply the net proceeds from the
                  offering of the Shares in the manner set forth under "Use of
                  Proceeds" in the Prospectus.

                  (b) The Company agrees to pay, or reimburse if paid by any of
         the Underwriters, whether or not the transactions contemplated hereby
         are consummated or this Agreement is terminated, all costs and expenses
         incident to the public offering of the Shares and the performance of
         the obligations of the Company under this Agreement including those
         relating to: (i) the preparation, printing, filing and distribution of
         the Registration Statement including all exhibits thereto, the
         Prospectus, all amendments and supplements to the Registration
         Statement and the Prospectus, and the printing, filing and distribution
         of this Agreement; (ii) the preparation and delivery of certificates
         for the Shares to the Underwriters; (iii) the furnishing (including
         costs of shipping and mailing) to the Underwriters of copies of the
         Prospectus and all amendments or supplements to the Prospectus, and of
         the several documents required by this Section to be so furnished, as
         may be reasonably requested for use in connection with the offering and
         sale of the Shares by the Underwriters or by dealers to whom Shares may
         be sold; (iv) inclusion of the Shares for quotation on the NASDAQ
         National Market; and (v) all transfer taxes, if any, with respect to
         the sale and delivery of the Shares by the Company to the Underwriters.
         Subject to the provisions of Section 8, the Underwriters agree to pay,
         whether or not the transactions contemplated hereby are consummated or
         this Agreement is terminated, all costs and expenses incident to the
         performance of the obligations of the Underwriter under this Agreement
         not payable by the Company pursuant to the


                                       20
   21


         preceding sentence, including, without limitation, the fees and
         disbursements of counsel for the Underwriters.

                  6. Indemnification.

                  (a) The Company agrees to indemnify and hold harmless each
         Underwriter and each person, if any, who controls any Underwriter
         within the meaning of Section 15 of the Securities Act or Section 20 of
         the Exchange Act against any and all losses, claims, damages and
         liabilities, joint or several (including any reasonable investigation,
         legal and other expenses incurred in connection with, and any amount
         paid in settlement of, any action, suit or proceeding or any claim
         asserted), to which they, or any of them, may become subject under the
         Securities Act, the Exchange Act or other Federal or state law or
         regulation, at common law or otherwise, insofar as such losses, claims,
         damages or liabilities arise out of or are based upon (i) any untrue
         statement or alleged untrue statement of a material fact contained in
         the Registration Statement or the Prospectus or any amendment thereof
         or supplement thereto, or in any Blue Sky application or other
         information or other documents executed by the Company filed in any
         state or other jurisdiction to qualify any or all of the Shares under
         the securities laws thereof (any such application, document or
         information being hereinafter referred to as a "Blue Sky Application")
         or arise out of or are based upon any omission or alleged omission to
         state therein a material fact required to be stated therein or
         necessary to make the statements therein not misleading, (ii) in whole
         or in part upon any breach of the representations and warranties set
         forth in Section 3 hereof, or (iii) in whole or in part upon any
         failure of the Company to materially perform any of its obligations
         hereunder or under law; provided, however, that such indemnity shall
         not inure to the benefit of any Underwriter (or any person controlling
         such Underwriter) on account of any losses, claims, damages or
         liabilities arising from the sale of the Shares to any person by such
         Underwriter if such untrue statement or omission or alleged untrue
         statement or omission was made in the Registration Statement or the
         Prospectus, or such amendment or supplement thereto, or in any Blue Sky
         Application in reliance upon and in conformity with information
         furnished in writing to the Company by an Underwriter on behalf of such
         Underwriter specifically for use therein. This indemnity agreement will
         be in addition to any liability which the Company may otherwise have.

                  (b) Each Underwriter agrees, severally and not jointly, to
         indemnify and hold harmless the Company and each person, if any, who
         controls the Company within the meaning of Section 15 of the Securities
         Act or Section 20 of the Exchange Act, each director of the Company,
         and each officer of the Company who signs the Registration Statement,
         to the same extent as the foregoing indemnity from the Company to each
         Underwriter, but only insofar as such losses, claims, damages or
         liabilities arise out of or are based upon any untrue statement or
         omission or alleged untrue statement or omission which was made in the
         Registration Statement or the Prospectus, or any amendment thereof or
         supplement thereto, contained in the (i) the public pricing information
         set forth in the fourth paragraph of the cover page of the Prospectus
         Supplement and (ii) the


                                       21
   22


         information contained in the fourth and fifth paragraphs under the
         caption "Underwriting" in the Prospectus; provided, however, that the
         obligation of each Underwriter to indemnify the Company (including any
         controlling person, director or officer thereof) shall be limited to
         the net proceeds received by the Company from such Underwriter.

                  (c) Any party that proposes to assert the right to be
         indemnified under this Section will, promptly after receipt of notice
         of commencement of any action, suit or proceeding against such party in
         respect of which a claim is to be made against an indemnifying party or
         parties under this Section, notify each such indemnifying party of the
         commencement of such action, suit or proceeding, enclosing a copy of
         all papers served. No indemnification provided for in Section 6(a) or
         6(b) shall be available to any party who shall fail to give notice as
         provided in this Section 6(c) if the party to whom notice was not given
         was unaware of the proceeding to which such notice would have related
         and was prejudiced by the failure to give such notice but the omission
         so to notify such indemnifying party of any such action, suit or
         proceeding shall not relieve it from any liability that it may have to
         any indemnified party for contribution or otherwise than under this
         Section. In case any such action, suit or proceeding shall be brought
         against any indemnified party and it shall notify the indemnifying
         party of the commencement thereof, the indemnifying party shall be
         entitled to participate in, and, to the extent that it shall wish,
         jointly with any other indemnifying party similarly notified, to assume
         the defense thereof, with counsel reasonably satisfactory to such
         indemnified party, and after notice from the indemnifying party to such
         indemnified party of its election so to assume the defense thereof and
         the approval by the indemnified party of such counsel, the indemnifying
         party shall not be liable to such indemnified party for any legal or
         other expenses, except as provided below and except for the reasonable
         costs of investigation subsequently incurred by such indemnified party
         in connection with the defense thereof. The indemnified party shall
         have the right to employ its counsel in any such action, but the fees
         and expenses of such counsel shall be at the expense of such
         indemnified party unless (i) the employment of counsel by such
         indemnified party has been authorized in writing by the indemnifying
         parties, (ii) the indemnified party shall have been advised by counsel
         that there may be one or more legal defenses available to it which are
         different from or in addition to those available to the indemnifying
         party (in which case the indemnifying parties shall not have the right
         to direct the defense of such action on behalf of the indemnified
         party) or (iii) the indemnifying parties shall not have employed
         counsel to assume the defense of such action within a reasonable time
         after notice of the commencement thereof, in each of which cases the
         fees and expenses of counsel shall be at the expense of the
         indemnifying parties. An indemnifying party shall not be liable for any
         settlement of any action, suit, proceeding or claim effected without
         its written consent, which consent shall not be unreasonably withheld
         or delayed.

                  7. Contribution. In order to provide for just and equitable
contribution in circumstances in which the indemnification provided for in
Section 6(a) or 6(b) is due in accordance with its terms but for any reason is
held to be unavailable to or insufficient to hold harmless an indemnified party
under Section 6(a) or 6(b), then each indemnifying party shall contribute to the
aggregate losses, claims, damages and liabilities (including any investigation,


                                       22
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legal and other expenses reasonably incurred in connection with, and any amount
paid in settlement of, any action, suit or proceeding or any claims asserted,
but after deducting any contribution received by any person entitled hereunder
to contribution from any person who may be liable for contribution) to which the
indemnified party may be subject in such proportion as is appropriate to reflect
the relative benefits received by the Company on the one hand, and the
Underwriters on the other from the offering of the Shares or, if such allocation
is not permitted by applicable law or indemnification is not available as a
result of the indemnifying party not having received notice as provided in
Section 6 hereof, in such proportion as is appropriate to reflect not only the
relative benefits referred to above but also the relative fault of the Company
on the one hand, and the Underwriters on the other in connection with the
statements or omissions which resulted in such losses, claims, damages,
liabilities or expenses, as well as any other relevant equitable considerations.
The relative benefits received by the Company shall be deemed to be in the same
proportion as (x) the total proceeds from the offering (net of underwriting
discounts but before deducting expenses) received by the Company, as set forth
in the table on the cover page of the Prospectus supplement, bear to (y) the
underwriting discounts received by the Underwriters. For purposes of this
Agreement, the term "underwriting discount(s)" shall mean the excess of the
aggregate sales price of the Shares to the public over the aggregate price paid
for the Shares by the Underwriters pursuant to this Agreement. The relative
fault of the Company or the Underwriters shall be determined by reference to,
among other things, whether the untrue or alleged untrue statement of a material
fact related to information supplied by the Company or the Underwriters and the
parties' relative intent, knowledge, access to information and opportunity to
correct or prevent such statement or omission. The Company and the Underwriters
agree that it would not be just and equitable if contribution pursuant to this
Section 7 were determined by pro rata allocation (even if the Underwriters were
treated as one entity for such purpose) or by any other method of allocation
which does not take account of the equitable considerations referred to above.
Notwithstanding the provisions of this Section 7, (i) in no case shall any
Underwriter (except as may be provided in the Agreement Among Underwriters) be
liable or responsible for any amount in excess of the underwriting discount
applicable to the Shares purchased by such Underwriter hereunder, and (ii) the
Company shall be liable and responsible for any amount in excess of such
underwriting discount; provided, however, that no person guilty of fraudulent
misrepresentation (within the meaning of Section 11(f) of the Securities Act)
shall be entitled to contribution from any person who was not guilty of such
fraudulent misrepresentation. For purposes of this Section 7, each person, if
any, who controls an Underwriter within the meaning of Section 15 of the
Securities Act or Section 20(a) of the Exchange Act shall have the same rights
to contribution as such Underwriter, and each person, if any, who controls the
Company within the meaning of the Section 15 of the Securities Act or Section
20(a) of the Exchange Act, each officer of the Company who shall have signed the
Registration Statement and each director of the Company shall have the same
rights to contribution as the Company, subject in each case to clauses (i) and
(ii) in the immediately preceding sentence of this Section 7. Any party entitled
to contribution will, promptly after receipt of notice of commencement of any
action, suit or proceeding against such party in respect of which a claim for
contribution may be made against another party or parties under this Section,
notify such party or parties from whom contribution may be sought, but the
omission so to notify such party or parties from whom contribution may be sought
shall not relieve the party or parties from whom contribution may be sought from
any


                                       23
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other obligation it or they may have hereunder or otherwise than under this
Section. No party shall be liable for contribution with respect to any action,
suit, proceeding or claim settled without its written consent. The Underwriters'
obligations to contribute pursuant to this Section 7 are several in proportion
to their respective underwriting commitments and not joint.

                  8. Termination. This Agreement may be terminated with respect
to the Shares to be purchased on the Closing Date by the Underwriters by
notifying the Company at any time:

                  (a) in the absolute discretion of the Underwriters at or
         before the Closing Date: (i) if on or prior to such date, any domestic
         or international event or act or occurrence has materially disrupted,
         or in the opinion of the Underwriters will in the future materially
         disrupt, the securities markets; (ii) if there has occurred any new
         outbreak or material escalation of hostilities or other calamity or
         crisis the effect of which on the financial markets of the United
         States is such as to make it, in the judgment of the Underwriters,
         inadvisable to proceed with the offering; (iii) if there shall be such
         a material adverse change in general financial, political or economic
         conditions or the effect of international conditions on the financial
         markets in the United States is such as to make it, in the judgment of
         the Underwriters, inadvisable or impracticable to market the Shares;
         (iv) if trading in the Shares has been suspended by the Commission or
         trading generally on the New York Stock Exchange, Inc., on the American
         Stock Exchange, Inc. or the Nasdaq National Market has been suspended
         or limited, or minimum or maximum ranges for prices for securities
         shall have been fixed, or maximum ranges for prices for securities have
         been required, by said exchanges or by order of the Commission, the
         National Association of Securities Dealers, Inc., or any other
         governmental or regulatory authority; or (v) if a banking moratorium
         has been declared by any state or Federal authority; or (vi) if, in the
         judgment of the Underwriters, there has occurred a Material Adverse
         Effect, or

                  (b) at or before the Closing Date, that any of the conditions
         specified in Section 4 shall not have been fulfilled when and as
         required by this Agreement.

                  If this Agreement is terminated pursuant to any of its
provisions, the Company shall not be under any liability to any Underwriter, and
no Underwriter shall be under any liability to the Company, except that (y) if
this Agreement is terminated by the Underwriters because of any failure, refusal
or inability on the part of the Company to comply with the terms or to fulfill
any of the conditions of this Agreement, the Company will reimburse the
Underwriters for all out-of-pocket expenses (including the reasonable fees and
disbursements of their counsel) incurred by them in connection with the proposed
purchase and sale of the Shares or in contemplation of performing their
obligations hereunder and (z) no Underwriter who shall have failed or refused to
purchase the Shares agreed to be purchased by it under this Agreement, without
some reason sufficient hereunder to justify cancellation or termination of its
obligations under this Agreement, shall be relieved of liability to the Company
for damages occasioned by its failure or refusal.

                  9. Substitution of Underwriters. If any Underwriter other than
CIBC shall fail (other than for a reason sufficient to justify the cancellation
or termination of this Agreement


                                       24
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under Section 8) to purchase on the Closing Date the Shares agreed to be
purchased on the Closing Date by such Underwriter, CIBC shall purchase such
Shares or make such other arrangements as CIBC may deem advisable upon the terms
set forth in this Agreement. The provisions of this Section shall not in any way
affect the liability of any defaulting Underwriter to the Company or the
nondefaulting Underwriters arising out of such default.

                  10. Miscellaneous. The respective agreements, representations,
warranties, indemnities and other statements of the Company or its officers, and
of the Underwriters set forth in or made pursuant to this Agreement shall remain
in full force and effect, regardless of any investigation made by or on behalf
of the Underwriter or the Company or any of the officers, directors or
controlling persons referred to in Sections 6 and 7 hereof, and shall survive
delivery of and payment for the Shares. The provisions of Sections 5(b), 6, 7
and 8 shall survive the termination or cancellation of this Agreement.

                  This Agreement has been and is made for the benefit of the
Underwriters and the Company and their respective successors and assigns, and,
to the extent expressed herein, for the benefit of persons controlling the
Underwriters, or the Company, and directors and officers of the Company, and
their respective successors and assigns, and no other person shall acquire or
have any right under or by virtue of this Agreement. The term "successors and
assigns" shall not include any purchaser of Shares from any Underwriter merely
because of such purchase.

                  All notices and communications hereunder shall be in writing
and mailed or delivered or by telephone or telegraph if subsequently confirmed
in writing, (a) if to the Underwriters, c/o CIBC World Markets Corp., 1600 Smith
Street, Suite 3100, Houston, Texas 77002 Attention: Ronald Ormand, with a copy
to CIBC World Markets Corp., One World Financial Center, New York, New York
10281 Attention: Jennifer Aranoff, and (b) if to the Company, to its agent for
service as such agent's address appears on the cover page of the Registration
Statement with a copy to Thomas Maxfield, Baker & Hostetler, 303 E. 17th Avenue,
Suite 1100, Denver, Colorado 80203-1264.

                  This Agreement shall be governed by and construed in
accordance with the laws of the State of New York without regard to principles
of conflict of laws.

                  This Agreement may be signed in any number of counterparts,
each of which shall be an original, with the same effect as if the signatures
thereto and hereto were upon the same instrument.


                                       25
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                  Please confirm that the foregoing correctly sets forth the
agreement among us.

                                                 Very truly yours,

                                                 PATTERSON ENERGY, INC.

                                                 By: /s/ Cloyce A. Talbott
                                                    ----------------------------
                                                 Title: Chief Executive Officer
                                                       -------------------------


Confirmed:

CIBC WORLD MARKETS CORP.


By: /s/ Ronald Ormand
   ------------------------------
Title: Managing Director
      ---------------------------



MORGAN KEEGAN & COMPANY, INC.



By: /s/ L. Jack Powell
   ------------------------------
Title: Managing Director
      ---------------------------

RAYMOND JAMES & ASSOCIATES, INC.



By: /s/ Steven C. Grant
   ------------------------------
Title: Managing Director
      ---------------------------










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                                   SCHEDULE I






                                                         NUMBER OF
                                                        SHARES TO BE
       NAME                                              PURCHASED
       ----                                            -------------
                                                    
CIBC WORLD MARKETS CORP.                                   2,000,000
MORGAN KEEGAN & COMPANY, INC.                                500,000
RAYMOND JAMES & ASSOCIATES, INC.                             500,000
                                                       -------------

                                             TOTAL         3,000,000
                                                       =============












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