PARKER DRILLING CO /DE/ - 10-K Annual Report

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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
---------------------
FORM 10-K
(Mark One) ---------------------
/X/ ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934 [FEE REQUIRED]

FOR THE FISCAL YEAR ENDED AUGUST 31, 1995

/ / TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934 [NO FEE REQUIRED]

FOR THE TRANSITION PERIOD FROM TO
------------------- -------------------
COMMISSION FILE NUMBER 1-7573

PARKER DRILLING COMPANY
(Exact name of registrant as specified in its charter)

Delaware 73-0618660
- ------------------------------- ------------------------------------
(State or other jurisdiction of (I.R.S. Employer Identification No.)
incorporation or organization)

Parker Building, Eight East Third Street, Tulsa, Oklahoma 74103
-----------------------------------------------------------------
(Address of principal executive offices) (zip code)

Registrant's telephone number, including area code (918) 585-8221
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Securities registered pursuant
to Section 12(b) of the Act:
N/A Name of each exchange on which registered:
- ------------------------------- ------------------------------------------
(Title of class) New York Stock Exchange, Inc.

Securities registered pursuant to section 12(g) of the Act:
Common Stock, par value $.16 2/3 per share
--------------------------------------------------------------
(Title of class)

Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to
such filing requirements for the past 90 days. Yes X No
---- ----
Indicate by check mark if disclosure of delinquent filers pursuant to
Item 405 of Regulation S-K is not contained herein, and will not be contained,
to the best of registrant's knowledge, in definitive proxy or information
statements incorporated by reference in Part III of this Form 10-K. [ ]

As of September 30, 1995, 55,726,314 common shares were outstanding, and
the aggregate market value of the common shares (based upon the closing price
of these shares on the New York Stock Exchange) held by nonaffiliates was
$303.5 million.
Documents Incorporated by Reference

Part III, Items 10 through 13 Portions of the Company's definitive Proxy
Statement in connection with its Annual
Meeting to be held December 13, 1995

TABLE OF CONTENTS

PART I

PAGE

Item 1. Business 1
Item 2. Properties 5
Item 3. Legal Proceedings 6
Item 4. Submission of Matters to a Vote of Security Holders 6

PART II

Item 5. Market for Registrant's Common Stock and
Related Stockholder Matters 6
Item 6. Selected Financial Data 7
Item 7. Management's Discussion and Analysis of
Financial Condition and Results of Operations 8
Item 8. Financial Statements and Supplementary Data 13
Item 9. Changes in and Disagreements with Accountants on
Accounting and Financial Disclosure 32

PART III

Item 10. Directors and Executive Officers of the Registrant 32
Item 11. Executive Compensation 32
Item 12. Security Ownership of Certain Beneficial Owners
and Management 32
Item 13. Certain Relationships and Related Transactions 32

PART IV

Item 14. Exhibits, Financial Statement Schedule and
Reports on Form 8-K 33
Signatures 38

PART I

Item 1. BUSINESS

GENERAL DEVELOPMENT

Parker Drilling Company was incorporated in the state of Oklahoma in
1954. The Company's predecessor was a contract drilling business established
in 1934 by Gifford C. Parker. The founder was the father of Robert L. Parker,
the current chairman and a principal stockholder, and the grandfather of
Robert L. Parker Jr., president and chief executive officer. In March 1976,
the state of incorporation of the Company was changed to Delaware through the
merger of the Oklahoma corporation into its wholly owned subsidiary Parker
Drilling Company, a Delaware corporation. Unless otherwise indicated, the
term "Company" refers to Parker Drilling Company together with its
subsidiaries and "Parker Drilling" refers solely to the parent, Parker
Drilling Company.

The Company's principal business is providing land contract drilling
services on a worldwide basis to firms in the oil and gas industry.
Internationally, the Company specializes in difficult wells and drilling in
remote locations, utilizing equipment that is specially designed by the
Company to be easily transported by helicopter or other vehicles into
difficult access areas. Domestically, the Company specializes in the drilling
of deep gas wells (to 15,000 feet or deeper). The Company is also engaged in
coring and geothermal operations.

In addition to land contract drilling services, the Company also provides
drilling engineering and project management services. Project management
services include well design, training, quality control, location
construction, catering and equipment and personnel logistics management.

In 1995, Parker Drilling Investment Company, a wholly owned subsidiary,
formed a joint limited liability company, OnSite Technology L.L.C. (Trademark)
("OnSite") (Trademark), to market and operate an on-location soil and drill
cuttings remediation process worldwide. Parker Drilling Investment Company
and National Fuel and Energy, Inc. are equal owners in OnSite (Trademark).
OnSite (Trademark) will operate mobile units which clean and remediate
hydrocarbon-contaminated soil on location at oil and gas drill sites, tank
batteries, pipeline installations, refineries, oil field service and storage
facilities and service stations. The first unit has been built and is
expected to be placed into service in the first quarter of fiscal 1996.

In August 1975, the Company acquired Parker Technology, Inc. ("Partech")
(Registered Trademark) (formerly OIME, Inc.), a drilling equipment
manufacturing concern in Odessa, Texas. Partech (Registered Trademark)
designs and constructs specialized rigs and rig components to meet the unique
needs of the Company and its customers. However, with minimal demand for rig
construction during recent years, Partech (Registered Trademark) functions
primarily as a service center for the Company's drilling operations. The
scope of Partech's operations was downsized in late fiscal 1994 with a
reduction in the number of manufacturing and technical support personnel and
the sale of excess manufacturing equipment and inventories. In fiscal years
1995, 1994 and 1993, its operations accounted for less than 10 percent of the
Company's total revenue.

Item 1. BUSINESS (continued)

Parker Kinetic Designs, Inc. ("Parker Kinetic"), formed in July 1984,
specializes in the commercialization of pulse power technologies for
industrial, scientific and military applications. Parker Kinetic is a leading
developer of pulse power applications. The Austin, Texas-based subsidiary
also provides specialized engineering services in electromagnetic accelerator
research.

CUSTOMERS

The Company's drilling customer base consists of major oil companies,
foreign national oil and gas companies, independent oil and gas companies and
industrial users. The Company's 20 largest customers accounted for
approximately 91 percent of total revenue during fiscal 1995. Two customers
accounted for approximately 22 percent and 13 percent, respectively. In
fiscal 1994, three customers accounted for approximately 14 percent, 12
percent and 11 percent, respectively. In fiscal 1993, three customers
accounted for approximately 22 percent, 14 percent and 10 percent,
respectively.

CONTRACTS

The Company generally obtains drilling contracts through competitive
bidding. Under most contracts the Company is paid a daily fee, or day rate.
The day rate received is based on several factors, including: type of
equipment, services and personnel furnished; investment required to perform
the contract; location of well; term of the contract; and competitive market
forces. Meterage rate contracts are occasionally accepted in which the
Company is paid a rate per meter drilled upon reaching a specified depth. The
Company drilled several shallow (under 10,000 feet) wells under meterage
contract terms in the past fiscal year in connection with international
contracts.

The Company generally receives a lump sum fee, which in most cases
approximates the cost incurred by the Company, to move its equipment to the
drilling site. Domestic contracts are generally for one well, while
international contracts are more likely to be for multi-well programs. The
Company continues to obtain contracts under which the Company provides
drilling engineering and integrated project management services. The Company
provides drilling project services from well design and engineering expertise
to site preparation and road construction in an effort to help customers
eliminate or reduce management overhead which would otherwise be necessary to
supervise such services.

While oil and gas exploration efforts have remained stable or increased
in many areas outside the United States, domestic drilling programs have
remained relatively depressed. Day rates on domestic contracts continue to
cover cash operating costs before local overhead. International day rates and
profit margins continue to be more favorable than those for domestic
operations. Because of the difficult remote drilling sites encountered
internationally, specialized equipment is often required, sometimes resulting
in additional modification or construction costs which are generally offset by
favorable day rates for the Company. Substantially all the international
contracts provide for payment in U.S. dollars, with a minimum local currency
portion to cover local expenditures.

COMPETITION

Significant competition remains in the drilling industry although both
the number of companies and available rigs have decreased over the last ten
years. The number of rigs continues to exceed demand, particularly in the
domestic market. A number of large and small drilling contractors provide
competition for drilling contracts in all areas the Company serves. Although
no single drilling competitor operates in all areas the Company serves,
certain competitors are present in more than one of those areas.

Historically, competition for drilling services has been based on four
factors: (1) type and condition of equipment available, (2) location of or
ability to deploy such equipment, (3) quality of service and personnel and (4)
price. In each of the first three areas, management believes that the Company
has for many years ranked at or near the top of the drilling industry. During
the past several years, the prevailing factor in obtaining contracts has been
price due to the surplus of available rigs in the drilling industry. The
Company's patented drilling equipment is a factor in obtaining certain
contracts located in remote and difficult-access locations and in drilling
certain wells requiring specialized equipment.

RESEARCH AND DEVELOPMENT

In response to customers' needs of reducing drilling costs, the Company
has developed a slim hole drilling and coring rig. The new series of lighter
electric rigs features a two-speed top drive and the Parkomatic (Registered
Trademark) automatic drilling system. Combining technology from the drilling
and mining industries, the Company pioneered continuous wireline coring in
order to allow geological assessments to be made during the drilling program.
The Company has utilized this technology in the performance of several
contracts.

Parker Kinetic engineers and manufactures high-energy pulse power
equipment. Parker Kinetic has developed the homopolar pulse generator, a
machine that stores kinetic energy in a rotor, then rapidly converts that
energy into a high-current electrical pulse. Pulse power can be used for,
among other things, high-speed solid-state welding, sintering and material
compaction, pulsed heating and powering electromagnetic launch devices.

Parker Kinetic continues to refine this technology in order to make it
practical and economically feasible for industrial, scientific and military
applications. With the recent decline in military expenditures by the United
States government, Parker Kinetic has shifted the focus of its research
activities to industrial applications and markets.

Twenty-three employees are involved in research and development. The
costs associated with the Company's research and development efforts are not
significant.

EMPLOYEES

At August 31, 1995, the Company employed 2,360 persons, up 12% from the
2,106 employed at August 31, 1994. The following table sets forth the
composition of the Company's employees:

August 31,
----------------
1995 1994
----- -----

International Drilling Operations 1,840 1,614
Domestic Drilling Operations 309 298
Corporate and Other Domestic 211 194

RISKS AND ENVIRONMENTAL CONSIDERATIONS

Certain political and economic risks are inherent in international
operations. These risks include expropriation of equipment, currency
rate fluctuations, foreign currency conversion restrictions and local
tax regulations. The Company minimizes the potential impact of these
risks by operating in several geographical areas and by generally
entering contracts which are denominated in U.S. dollars. Additionally,
the Company seeks to obtain contractual indemnification from operators
against certain of these risks. The Company carries political risk
insurance covering its equipment in most foreign locations.

The United States and various other countries have enacted
legislation or adopted regulations controlling the discharge of
materials into the environment. Such legislation provides for the
imposition of penalties and liabilities and indemnification for clean-up
costs, regardless of fault, for hazardous waste and chemical discharges.
In certain circumstances, the Department of the Interior is authorized
to suspend operations that threaten to harm life, property or the
environment. Under most of the Company's contracts, the Company is
indemnified from environmental damages except in certain cases of
pollution that originates above the surface from equipment operation and
maintenance. The Company purchases limited pollution insurance to cover
costs associated with clean-up of sudden and accidental spills. In
those contracts where the Company accepts liability for pollution caused
by its negligence or is not covered by insurance, the amount of the
Company's financial exposure is generally restricted in the contract.

The Company believes that it substantially complies with all
environmental legislation and regulations. Compliance with such
provisions and regulations has not had a material effect upon the
Company's operations; however, the effect of any future environmental
enactments cannot be predicted.

FINANCIAL INFORMATION ABOUT INDUSTRY SEGMENTS

The Company operates principally in one segment, contract drilling
services. Information about the Company's operations by geographic
areas for the three years ended August 31, 1995, is set forth in Note 8
of Notes to Consolidated Financial Statements.

Item 2. PROPERTIES

The Company owns and occupies a ten-story building in downtown
Tulsa, Oklahoma, as its home office. The Company also owns a five-story
office building in Tulsa and currently is leasing it to third parties.
Additionally, the Company owns and leases office space and operating
facilities in various locations, but only to the extent necessary for
administrative and operational functions.

During fiscal 1995, the Company acquired one international rig,
currently under contract in New Zealand, and leased one rig, currently
under contract in Argentina. The Company sold two domestic rigs and one
international rig and also retired five international rigs from the rig
fleet. The following table shows, as of August 31, 1995, the locations
and drilling depth ratings of the Company's remaining 90 rigs:

Drilling Depth Rating in Feet
------------------------------------------------------------
10,000
or Over
less 15,000 17,000 20,000 25,000 30,000 30,000 TOTAL
------ ------ ------ ------ ------ ------ ------ -----

DOMESTIC
Alaska 1 1
Central States 3 2 14 1 3 23
Rocky Mountains 1 3 6 2 2 14
West Coast 1 1 2
-- -- -- -- -- -- -- --
Total Domestic 1 4 5 21 1 6 2 40
-- -- -- -- -- -- -- --

INTERNATIONAL
South America 7 2 1 8 2 5 25
Africa, Middle
East and C.I.S. 3 2 1 1 7
Asia Pacific 4 2 2 7 3 18
-- -- -- -- -- -- -- ---
Total
International 14 6 4 16 5 5 - 50
-- -- -- -- -- -- -- ---

TOTAL 15 10 9 37 6 11 2 90
-- -- -- -- -- -- -- ---
-- -- -- -- -- -- -- ---

The following table sets forth the utilization rates during each of the
previous three years. Rigs retired in fiscal 1995 and 1994 have been treated
as removed from the rig fleet as of the last day of each fiscal year.
Accordingly, the increase in the domestic utilization rate, from 15% in 1994
to 21% in 1995, was attributable to having fewer rigs in the fleet in 1995.

Average Utilization
for the Years Ended
August 31,
-------------------
1995 1994 1993
----- ---- ----

International Utilization 54% 56% 40%

Domestic Utilization 21% 15% 14%

Overall Utilization 40% 35% 26%

Item 3. LEGAL PROCEEDINGS

In the opinion of Company counsel, there are no pending legal proceedings
to which the Company is a party that could have a materially adverse effect
upon its business or its financial position.

Item 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

There were no matters submitted to Parker Drilling Company security
holders during the fourth quarter of fiscal year 1995.

PART II

Item 5. MARKET FOR REGISTRANT'S COMMON STOCK AND RELATED STOCKHOLDER
MATTERS

Parker Drilling Company common stock is listed for trading on the New
York Stock Exchange under the symbol PKD. At the close of business on
September 30, 1995, there were 4,198 holders of record of Parker Drilling
common stock. Prices on Parker Drilling's common stock for the fiscal years
ending August 31, 1995 and 1994, were as follows:

Fiscal Year 1995 Fiscal Year 1994
---------------- ----------------
Quarter High Low High Low
------- ------ ------ ------ ------

First $6.250 $5.000 $7.750 $5.250
Second 5.125 4.375 6.250 4.875
Third 5.625 4.375 6.250 4.875
Fourth 5.625 4.625 6.375 5.375

No dividends have been paid on common stock since February 1987.
Restrictions contained in Parker Drilling's existing credit agreement limit
the payment of cash dividends to the lesser of 40 percent of consolidated net
income for the preceding fiscal year, or $2.6 million. The Company has no
present intention to pay dividends on its common stock in the foreseeable
future because of its business plan to reinvest earnings in the Company's
operations.

Item 6. SELECTED FINANCIAL DATA

Parker Drilling Company and Subsidiaries
(In Thousands Except Per Share Data)

Years Ended August 31, 1995 1994 1993 1992 1991
- ----------------------------------------------------------------------------

Revenue $157,371 $152,424 $100,801 $123,332 $112,818
Income (loss)
from continuing
operations $ 3,916 $(28,806) $(10,687) $(11,166) $ 1,977
Discontinued
operations-
Gain on disposal - - - - 1,184
-------- -------- -------- -------- --------

Net income (loss) $ 3,916 $(28,806) $(10,687) $(11,166) $ 3,161
-------- -------- -------- -------- --------
-------- -------- -------- -------- --------
Earnings (loss) per
share, primary and
fully diluted:
Income (loss) from
continuing operations $ .07 $ (.53) $ (.20) $ (.21) $ .04
Discontinued
operations-
Gain on disposal - - - - .02
-------- -------- -------- -------- --------

Net income (loss) $ .07 $ (.53) $ (.20) $ (.21) $ .06
-------- -------- -------- -------- --------
-------- -------- -------- -------- --------

Total assets $216,959 $209,348 $236,342 $245,869 $264,794
Long-term debt $ 1,748 $ - $ - $ 142 $ 1,907
Redeemable
preferred stock $ - $ - $ - $ 157 $ 315

Item 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS

LIQUIDITY AND CAPITAL RESOURCES

During fiscal 1995, cash and other short-term investments increased $7.7
million. Cash generated from operations of $17.9 million and proceeds
received from the sale of property, plant and equipment of $11.7 million, less
capital expenditures of $21.5 million, were the primary reasons for the
increase.

The Company's cash generated by operating activities in fiscal 1995
exceeded fiscal 1994's total by $17.0 million. This increase is due primarily
to improved drilling margins and a smaller increase in working capital
requirements in fiscal 1995. Proceeds from the sale of property, plant and
equipment included $3.6 million from the sale of one international and two
domestic rigs and $1.9 million from the sale of two airplanes. In addition,
many of the assets written down to net realizable value in fiscal 1994, as
discussed in Note 2 of Notes to Consolidated Financial Statements, were
disposed of during fiscal 1995.

Capital expenditures decreased $13.2 million to a total of $21.5 million
in fiscal 1995. Significant expenditures included $15.1 million to modify and
upgrade various international rigs. The decrease in capital spending is
primarily the result of spending $19.3 million in fiscal 1994 for the
acquisition and modification of seven rigs. Capital expenditures in fiscal
1996, relating primarily to international contract opportunities, are
currently forecasted to be $32.0 million. In the event the Company obtains
additional contracts that require the purchase or construction of new or
specialized rigs, or significant modifications to existing rigs, capital
expenditures could increase further. Any significant increase in capital
expenditures would be subject to any restrictions imposed on the Company as
specified below.

The Company has a credit agreement ("Agreement") with a bank which
provides a $7.5 million revolving credit facility through March 1, 1996. The
credit agreement was subsequently amended in the fourth quarter of fiscal 1995
to extend the expiration date to May 31, 1996. All of the credit facility was
available for drawdown as of August 31, 1995. The Agreement contains
restrictions on annual capital expenditures and certain senior and
subordinated indebtedness which can be incurred by Parker Drilling Company and
certain subsidiaries designated in the Agreement. These designated
subsidiaries comprise the operating subsidiaries through which the Company
performs the majority of its drilling operations. The credit facility also
limits payment of dividends on the Company's common stock to the lesser of 40
percent of consolidated net income for the preceding fiscal year, or $2.6
million. The remaining subsidiaries of the Company are not a party to the
credit facility and are able to make capital expenditures and obtain
independent financing from lenders that have no recourse to Parker Drilling
Company and the designated subsidiaries, subject only to an overall limitation
of indebtedness.

The restrictions in the Agreement are not anticipated to restrict growth
or investment opportunities in the foreseeable future.

LIQUIDITY AND CAPITAL RESOURCES (continued)

Management believes that the current level of cash and short-term
investments, together with cash generated from operations, should be
sufficient to meet the Company's immediate capital needs. However, in the
event the Company obtains additional contracts requiring further significant
capital expenditures or acquires equipment or companies in the drilling
service industry, management believes the Company would likely meet both
short-term and long-term capital needs through a combination of cash generated
from operations, borrowings under the bank credit agreement and either equity
or long-term debt financing.

RESULTS OF OPERATIONS 1995 VS. 1994

The fiscal 1995 net income of $3.9 million was an improvement of $32.7
million over the net loss of $28.8 million recorded in fiscal 1994. Excluding
a $19.7 million provision for reduction in carrying value of certain assets
from fiscal 1994's net loss, fiscal 1995's net income was an improvement of
$13.0 million over fiscal 1994. The primary reasons for the improvement in
fiscal 1995 were an increase in drilling margins of $7.2 million and an
increase in other income of $6.7 million.

Drilling contract revenue increased $5.6 million to $153.1 million in
fiscal 1995 even though international and domestic operating days were nearly
the same as the previous year. An increase in the utilization of larger rigs
in northern Argentina and Colombia more than offset decreased utilization of
smaller rigs in southern Argentina. Although operating days were nearly the
same, the domestic utilization rate increased from 15% to 21% due to the
retirement/disposal of 16 domestic rigs in 1994. (Rigs retired, disposed of
or reclassified as assets held for sale in fiscal 1995 and 1994 have been
treated as removed from the rig fleet as of the last day of each fiscal year.)

Western Hemisphere international drilling revenue increased $23.4 million
in fiscal 1995 when compared with fiscal 1994. In the country of Colombia,
revenue increased $13.9 million due primarily to revenue earned by one rig
relocated from Indonesia during the year and from a full year of operations by
one rig which was added to the rig fleet in fiscal 1994. In addition, several
rigs which were either on a standby or stacked status in fiscal 1994 operated
all of fiscal 1995. In Argentina, drilling revenue increased $12.6 million as
two additional deep rigs, one relocated from the Congo in fiscal 1994 and one
relocated from Yemen in fiscal 1995, operated much of the year. Additionally,
one rig added to the rig fleet in fiscal 1994 operated all of fiscal 1995 and
one rig leased by the Company commenced operations in the fourth quarter of
fiscal 1995. During fiscal 1995 and 1994, a number of shallow depth capacity
rigs (10,000 feet or less) have operated in southern Argentina, many of them
operating on a meterage basis. Two of these rigs have been relocated to mid-
Argentina as the Company focuses its marketing efforts on regions of the
country where operations are generally conducted on a daywork basis. At
fiscal year-end, the remaining rigs in southern Argentina were on a stacked
status. Management anticipates a slight decline in revenue from South
American operations in fiscal 1996 due to a further reduction of operations in
southern Argentina. Drilling revenue declined $4.8 million in Ecuador where
two rigs located in that country did not operate in fiscal 1995 and were
retired from the rig fleet at the end of the fiscal year.

RESULTS OF OPERATIONS 1995 VS. 1994 (continued)

Operations in Asia and the Pacific resulted in an increase in drilling
revenue of $1.5 million in fiscal 1995. Increased utilization in New Zealand
and revenue earned from a labor contract in China more than offset a decline
in revenue in Papua New Guinea and Indonesia due to lower utilization in those
countries. It is anticipated that revenue from this region will remain
relatively constant in fiscal 1996.

International drilling revenue from operations in Africa, the Middle East
and C.I.S. declined $17.4 million in fiscal 1995. Utilization declined due to
the completion of contracts in Chad, the Congo, the Russian Republic, and
Yemen. The rigs which operated in the Congo and Yemen in fiscal 1994 have
both been redeployed to Argentina where they are currently operating. In
Kazakhstan, a reduction in revenue from a labor contract in that country was
partially offset by operations from one rig which has been relocated from the
Russian Republic. Management anticipates revenue from this region to increase
in fiscal 1996 primarily due to the commencement of a one-rig contract in the
first quarter of the year in the Russian Republic.

Domestic drilling revenue declined $2.3 million due to fewer operating
days in the Rocky Mountain states and Alaska. Management anticipates revenue
from its domestic drilling operations will be slightly higher in fiscal 1996.

Drilling margins (drilling revenue less drilling expense) increased $7.2
million in fiscal 1995 versus fiscal 1994. Margins improved in the Company's
South American operations, including both the countries of Colombia and
Argentina. Margins had been negatively impacted in fiscal 1994 in Colombia
due to increased operating expenses and costs associated with the start-up of
two rigs. In fiscal 1995, these two rigs operated for the full year with
improved margins when compared with the previous fiscal year. In Argentina,
margins also improved as two additional deep capacity rigs began operating in
the northern region of the country and two rigs operated during the year in
the country's middle region. In the Company's other operating regions, both
internationally and domestically, drilling margins as a percentage of drilling
revenue in fiscal 1995 remained relatively consistent with fiscal 1994.

Depreciation expense, which declined $.3 million in fiscal 1995, is
expected to increase in fiscal 1996 due to the level of capital expenditures
forecasted. General and administrative expense increased $.9 million in
fiscal 1995 due to increased amortization of deferred compensation and legal
expenses.

Other income (expense) increased $6.7 million in fiscal 1995 when
compared to fiscal 1994. Gains of $6.4 million were recognized in fiscal 1995
from the disposition of property, plant and equipment as the Company continued
its efforts to sell assets that are no longer a part of its current marketing
strategy. In addition, the reversal of a prior year foreign currency accrual
of $1.5 million was recorded in fiscal 1995. Fiscal 1994 other income
included $2.1 million from gains associated with the disposition of property,
plant and equipment, a $1.5 million gain from the reversal of a prior year
foreign payroll tax accrual and a $2.6 million charge for the settlement of
litigation (see Note 9 of the Notes to Consolidated Financial Statements).
The $1.3 million increase in income tax expense was primarily attributable to
the reversal in 1994 of an accrued foreign tax.

RESULTS OF OPERATIONS 1994 VS. 1993

The fiscal 1994 net loss of $28.8 million represents an increase in net
loss of $18.1 million from fiscal 1993. However, excluding the provision for
reduction in carrying value of certain assets of $19.7 million recognized in
fiscal 1994, the net loss improved $1.6 million from fiscal 1993 to fiscal
1994. The primary reasons for the improvement were an increase in drilling
margins of $5.3 million, partially offset by increases in depreciation expense
of $1.6 million and income tax expense of $2.2 million.

During the fourth quarter of fiscal 1994, management analyzed its
domestic operations and made the strategic decision to reorganize certain of
these operations and sell certain of these assets. The Company reduced the
carrying value of certain assets in Alaska, including rigs, spare parts and
property to be sold. The Company wrote down to net realizable value certain
of its Partech (Registered Trademark) manufacturing operations' drilling
equipment, property and inventories that were to be disposed. In the lower 48
divisions, the Company wrote down to net realizable value a number of
mechanical rigs and certain rig equipment that were to be disposed. Write-
offs relating to the lower 48 and Alaska rigs resulted in the removal of 16
rigs from Parker's fleet. Aggregating the items described above, the Company
recorded a $19.7 million provision during the fourth quarter of fiscal 1994.

Drilling revenue increased by $50.8 million as utilization of the
Company's international rig fleet increased from 40% in fiscal 1993 to 56% in
fiscal 1994. Domestic rig utilization increased slightly from 14% to 15%.

Western Hemisphere international drilling revenue increased $21.1 million
from fiscal 1993 to fiscal 1994. Revenue from the country of Argentina
increased $18.5 million as the Company re-entered the Argentina drilling
market during the fourth quarter of fiscal 1993. In Colombia, revenue
increased $2.7 million in fiscal 1994 as the Company engaged in more deep
drilling at higher day rates when compared to fiscal 1993.

International drilling revenue from operations in Asia and the Pacific
increased $20.9 million in fiscal 1994. The primary reasons for the increase
were the resumption of operations in Pakistan during the first quarter of
fiscal 1994, and the operation of two geothermal rigs in the Philippines, a
new market for the Company in fiscal 1994. Also contributing to the increase
in drilling revenue was an increase in utilization in Papua New Guinea during
fiscal 1994.

Drilling revenue from operations in Africa, the Middle East and the
C.I.S. increased $9.6 million in fiscal 1994. During the fourth quarter of
fiscal 1993, the Company began operating in the republic of Kazakhstan under a
labor contract for a major customer. Revenue from operations in Kazakhstan
increased $6.8 million in fiscal 1994. In the Russian Republic an increase in
operating days for two workover rigs generated an additional $2.3 million in
revenue in fiscal 1994 versus fiscal 1993. In Africa, a decline in revenue
from decreased utilization in Chad was offset by revenue from a one-rig
contract in the Congo.

Domestic drilling revenue declined slightly in fiscal 1994 compared to
fiscal 1993. An increase in utilization in the continental United States
could not completely offset the loss of revenue from the Company's specialized
Arctic drilling rig, which was released late in the third quarter of fiscal
1994.

RESULTS OF OPERATIONS 1994 VS. 1993 (continued)

Although drilling revenue increased $50.8 million in fiscal 1994 versus
fiscal 1993, drilling margins (drilling revenue less drilling expense) did not
increase proportionately. Drilling margins in Colombia declined due to
increased operating expenses and costs associated with the start-up of two
rigs. In Argentina, the initial start-up costs of entering a new market and
putting ten newly acquired rigs to work negatively impacted drilling margins.
Additionally, during this transition period, the Company encountered drilling
problems which resulted in slower-than-expected drilling progress on some of
the meterage rate contracts.

Depreciation expense increased $1.6 million in fiscal 1994, the result of
an increase in capital spending during 1994. Other income (expense) increased
$.6 million in fiscal 1994 compared to fiscal 1993. Interest income, net of
interest expense, decreased $.5 million due to the decline in cash and short-
term investments during fiscal 1994. Other income in fiscal 1994 included a
$1.0 million gain recognized when proceeds from an insurance settlement
exceeded the book value of equipment damaged in connection with a blowout on
an international rig. Fiscal 1994 other income also included the reversal of
a prior year foreign payroll tax accrual totalling $1.5 million. Offsetting
this income in fiscal 1994, was a $2.6 million charge for the settlement of
litigation. (See Note 9 of the Notes to Consolidated Financial Statements.)
Fiscal 1993 other expense included a $.9 million adjustment of a prior year's
workers' compensation liability. Income tax expense increased $2.2 million
primarily because of an increase in international drilling activity, which
resulted in an increase in current tax expense.

OTHER MATTERS

Internationally, the Company specializes in drilling in remote locations
and under difficult geological or operating conditions. The Company's
international services are primarily utilized by international and national
oil companies in the exploration and development of reserves of oil.
Domestically, the Company specializes in drilling deep wells in search of
natural gas. Business activity is dependent on the exploration and
development activities of the major, independent and national oil and gas
companies that make up the Company's customer base. Generally, temporary
fluctuations in oil and gas prices do not materially affect these companies'
exploration and development activities, and consequently do not materially
affect the operations of the Company. However, sustained increases or
decreases in oil and natural gas prices could have an impact on customers'
long-term exploration and development activities which in turn could
materially affect the Company's operations. Generally, a sustained change in
the price of oil would have a greater impact on the Company's international
operations while a sustained change in the price of natural gas would have a
greater effect on domestic operations. Weak prices for natural gas have
resulted in depressed markets for domestic drilling services over the past
decade.

Historically, due to the importance of oil revenue to most of the
countries in which the Company operates, the Company's operations generally
have not been negatively impacted by adverse economic and political
conditions. However, there can be no assurances that such conditions could
not have a material adverse effect in the future.

Item 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

REPORT OF INDEPENDENT ACCOUNTANTS

To the Board of Directors and Stockholders
Parker Drilling Company

We have audited the consolidated financial statements and financial
statement schedule of Parker Drilling Company and subsidiaries as listed in
Item 14(a)(1) and (2) of the Form 10-K. These financial statements and
financial statement schedule are the responsibility of the Company's
management. Our responsibility is to express an opinion on these financial
statements and financial statement schedule based on our audits.

We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements are free of
material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements. An audit
also includes assessing the accounting principles used and significant
estimates made by management, as well as evaluating the overall financial
statement presentation. We believe that our audits provide a reasonable basis
for our opinion.

In our opinion, the financial statements referred to above present
fairly, in all material respects, the consolidated financial position of
Parker Drilling Company and subsidiaries as of August 31, 1995 and 1994, and
the consolidated results of their operations and their cash flows for each of
the three years in the period ended August 31, 1995, in conformity with
generally accepted accounting principles. In addition, in our opinion, the
financial statement schedule referred to above, when considered in relation to
the basic financial statements taken as a whole, present fairly, in all
material respects, the information required to be included therein.

COOPERS & LYBRAND L.L.P.

Tulsa, Oklahoma
October 17, 1995

PARKER DRILLING COMPANY AND SUBSIDIARIES
CONSOLIDATED STATEMENT OF OPERATIONS
(In Thousands Except Earnings (Loss) Per Share
and Weighted Average Shares Outstanding)

For the Years Ended August 31, 1995 1994 1993
- ----------------------------------------------------------------------------

Revenue:
Drilling contracts $153,075 $147,480 $ 96,719
Other 4,296 4,944 4,082
-------- -------- --------

157,371 152,424 100,801
-------- -------- --------
Operating expense:
Drilling 113,132 114,732 69,237
Other 4,928 6,563 5,951
Depreciation, depletion
and amortization 21,643 21,950 20,400
General and administrative 19,165 18,314 17,593
Provision for reduction in carrying
value of certain assets (Note 2) - 19,718 -
-------- -------- --------

158,868 181,277 113,181
-------- -------- --------

Operating income (loss) (1,497) (28,853) (12,380)
-------- -------- --------
Other income and (expense):
Interest expense (88) (11) (53)
Interest income 1,272 1,161 1,729
Minority interest (227) (135) 149
Other 7,640 919 (469)
-------- -------- --------

8,597 1,934 1,356
-------- -------- --------
Income (loss) before income taxes 7,100 (26,919) (11,024)
-------- -------- --------

Income tax expense (benefit) 3,184 1,887 (337)
-------- -------- --------

Net income (loss) $ 3,916 $(28,806) $(10,687)
-------- -------- --------
-------- -------- --------
Earnings (loss) per share,
primary and fully diluted $ .07 $ (.53) $ (.20)
-------- -------- --------
-------- -------- --------
Weighted average shares
outstanding (fully diluted) 55,332,541 54,247,664 53,082,078
---------- ---------- ----------
---------- ---------- ----------
The accompanying notes are an integral part
of the consolidated financial statements.

PARKER DRILLING COMPANY AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEET
(Dollars in Thousands)

August 31, 1995 1994
- -----------------------------------------------------------------------------

ASSETS

Current assets:
Cash and cash equivalents $ 20,752 $ 10,660
Other short-term investments 1,372 3,811
Accounts and notes receivable, net of
allowance for bad debts of $726 in
1995 and $826 in 1994 39,578 34,675
Rig materials and supplies 11,532 9,117
Other current assets 5,146 4,029
-------- --------

Total current assets 78,380 62,292
-------- --------

Property, plant and equipment, at cost:
Drilling equipment 506,130 538,025
Buildings, land and improvements 13,259 14,270
Other 20,470 24,399
Construction in progress 14,759 5,247
-------- --------

554,618 581,941

Less accumulated depreciation, depletion
and amortization 432,360 454,763
-------- --------

Net property, plant and equipment 122,258 127,178
-------- --------

Rig materials and supplies 6,895 9,127
-------- --------

Deferred charges and other assets:
Assets held for disposition (Note 2) 2,486 3,518
Notes receivable, net of allowance of
$70 in 1995 and $224 in 1994 1,817 2,871
Other 5,123 4,362
-------- --------

Total deferred charges and other assets 9,426 10,751
-------- --------

Total assets $216,959 $209,348
-------- --------
-------- --------
The accompanying notes are an integral part
of the consolidated financial statements.

PARKER DRILLING COMPANY AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEET
(Dollars in Thousands)

August 31, 1995 1994
- -----------------------------------------------------------------------------

LIABILITIES AND STOCKHOLDERS' EQUITY

Current liabilities:
Current portion of long-term debt $ 289 $ -
Accounts payable 9,539 9,233
Accrued liabilities 7,401 7,336
Accrued income taxes 5,109 5,053
-------- --------

Total current liabilities 22,338 21,622
-------- --------

Long-term debt (Note 3) 1,748 -
-------- --------

Deferred income tax (Note 4) - 294
-------- --------

Other long-term liabilities 5,953 3,596
-------- --------

Minority interest - 3,253
-------- --------

Commitments and contingencies (Note 9)

Preferred stock, $1 par value, 1,942,000
shares authorized, no shares outstanding - -
-------- --------
Stockholders' equity:
Common stock, $.16 2/3 par value,
authorized 70,000,000 shares, issued
and outstanding 55,722,183 shares
(55,112,749 shares in 1994) 9,287 9,185
Capital in excess of par value 205,310 202,403
Retained earnings (accumulated deficit) (24,391) (28,307)
Other (3,286) (2,698)
-------- --------

Total stockholders' equity 186,920 180,583
-------- --------

Total liabilities and stockholders' equity $216,959 $209,348
-------- --------
-------- --------

The accompanying notes are an integral part
of the consolidated financial statements.

PARKER DRILLING COMPANY AND SUBSIDIARIES
CONSOLIDATED STATEMENT OF CASH FLOWS
(Dollars in Thousands)

For the Years Ended August 31, 1995 1994 1993
- ------------------------------------------------------------------------------

CASH FLOWS FROM OPERATING ACTIVITIES:
Net income (loss) $ 3,916 $(28,806) $(10,687)
Adjustments to reconcile net income
(loss) to net cash provided by
operating activities:
Depreciation, depletion and
amortization 21,643 21,950 20,400
Loss (gain) on disposition of
property, plant and equipment (6,395) (2,083) (852)
Provision for reduction in carrying
value of certain assets - 19,718 -
Deferred tax expense (benefit) (294) (904) (1,431)
Amortization of deferred compensation
and other 1,820 2,490 5,197
Change in assets and liabilities:
Accounts and notes receivable (4,105) (10,889) 2,305
Rig materials and supplies (627) (313) 1,696
Other current assets (1,364) (1,356) (1,934)
Accounts payable and accrued
liabilities 3,319 1,109 573
Accrued income taxes 56 (238) (1,349)
Minority interest 227 135 (149)
Other assets (260) 137 (48)
-------- -------- --------

Net cash provided by operating
activities 17,936 950 13,721
-------- -------- --------

CASH FLOWS FROM INVESTING ACTIVITIES:
Proceeds from the sale of property,
plant and equipment 11,711 4,740 7,150
Capital expenditures (21,540) (34,764) (18,717)
Proceeds from sale of a subsidiary - - 2,353
Investments in affiliates (501) (140) (177)
Decrease (increase) in other short-term
and long-term investments 2,439 27,608 (7,388)
Other 121 - -
-------- -------- --------

Net cash provided by (used in)
investing activities (7,770) (2,556) (16,779)
-------- -------- --------

The accompanying notes are an integral part
of the consolidated financial statements.

PARKER DRILLING COMPANY AND SUBSIDIARIES
CONSOLIDATED STATEMENT OF CASH FLOWS
(continued)
(Dollars in Thousands)

For the Years Ended August 31, 1995 1994 1993
- ------------------------------------------------------------------------------

CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from issuance of debt $ 187 $ - $ -
Principal payments under debt
obligations - - (777)
Repurchase of common stock (277) (304) (384)
Proceeds from exercise of stock warrant - - 4,320
Other 16 - (819)
-------- -------- --------

Net cash provided (used) by financing
activities (74) (304) 2,340
-------- -------- --------

Net increase (decrease) in cash and
cash equivalents 10,092 (1,910) (718)

Cash and cash equivalents at beginning
of year 10,660 12,570 13,288
-------- -------- --------

Cash and cash equivalents at
end of year $ 20,752 $ 10,660 $ 12,570
-------- -------- --------
-------- -------- --------

Supplemental disclosures of cash
flow information:
Cash paid during the year for:
Interest $ 2 $ 11 $ 47
Income taxes $ 3,422 $ 3,029 $ 2,361

Supplemental noncash financing activity:
In November 1994, the Company acquired a limited partner's ownership
interest in two consolidated partnerships in exchange for a promissory note
in the amount of $1,850,000.

In May 1995, the Company received rig materials and supplies valued at
$556,000 in lieu of payment on a note due the Company.

The accompanying notes are an integral part
of the consolidated financial statements.

PARKER DRILLING COMPANY AND SUBSIDIARIES
Consolidated Statement of Redeemable Preferred
Stock and Stockholders' Equity
(Dollars in Thousands)
Other
---------------------------
Redeemable Capital Retained Unearned
preferred in excess earnings Currency restricted
stock Common of par (accumulated translation stock plan
Series C stock value deficit) adjustment compensation
--------- ------ ---------- ------------ ----------- ------------

Balances, August 31, 1992 $ 157 $9,005 $197,467 $11,192 $(739) $(6,744)

Redemption of preferred stock (157)
Activity in employees' stock plans 16 524 2,976
Acquisition of stock from certain
employees (11) (373)
Issuance of 925,000 common shares
upon exercise of a warrant
at $4.67 per share 154 4,166
Net income (loss) (10,687)
Cash dividends on preferred stock -
$.75 per share (6)
Currency translation adjustments associ-
ated with assets of subsidiary sold 866
Cumulative foreign exchange
translation adjustments (127)
----- ------ -------- -------- ----- -------

Balances, August 31, 1993 - 9,164 201,784 499 - (3,768)

Activity in employees' stock plans 28 916 1,070
Acquisition of stock from certain
employees (7) (297)
Net income (loss) (28,806)
----- ------ -------- -------- ----- -------

Balances, August 31, 1994 - 9,185 202,403 (28,307) - (2,698)

Activity in employees' stock plans 111 3,175 (588)
Acquisition of stock from certain
employees (9) (268)
Net income 3,916

----- ------ -------- -------- ----- -------
Balances, August 31, 1995 $ - $9,287 $205,310 $(24,391) $ - $(3,286)
----- ------ -------- -------- ----- -------
----- ------ -------- -------- ----- -------
The accompanying notes are an integral part of the consolidated financial statements.

PARKER DRILLING COMPANY AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Note 1 - Summary of Significant Accounting Policies

Consolidation - The consolidated financial statements include the
accounts of Parker Drilling Company ("Parker Drilling") and all of its
majority-owned subsidiaries (collectively, the "Company").

Drilling Contracts - The Company recognizes revenue and expenses on day
rate contracts as the drilling progresses (percentage-of-completion method)
because the Company does not bear the risk of completion of the well. For
meterage contracts, the Company recognizes the revenue and expenses upon
completion of the well (completed-contract method).

Cash and Cash Equivalents - For purposes of the balance sheet and the
statement of cash flows, the Company considers cash equivalents to be all
highly liquid debt instruments that had a remaining maturity of three months
or less at the date of purchase.

Other Short-term Investments - Other short-term investments include
primarily certificates of deposit, U.S. government securities and commercial
paper having remaining maturities of greater than three months at the date of
purchase and are stated at the lower of cost or market.

Property, Plant and Equipment - The Company provides for depreciation of
property, plant and equipment primarily on the straight-line method over the
estimated useful lives of the assets after provision for salvage value. When
properties are retired or otherwise disposed of, the related cost and
accumulated depreciation are removed from the accounts and any gain or loss is
included in operations. Management periodically evaluates the Company's
assets to determine if they are not in excess of their net realizable value.
Management considers a number of factors such as estimated future cash flows,
appraisals and current market value analysis in determining net realizable
value. Assets are written down to reflect any decrease in net realizable
value below their net carrying value (see Note 2).

Rig Materials and Supplies - Since the Company's foreign drilling
generally occurs in remote locations, making timely outside delivery of spare
parts unlikely, a complement of parts and supplies is maintained for each rig
either at the drilling site or in warehouses close to the operations. During
periods of high rig utilization, these parts are generally consumed and
replenished within a one-year period. During a period of lower rig
utilization in a particular location, the parts, like the related idle rigs,
are generally not transferred to other foreign locations until new contracts
are obtained because of the significant transportation costs which would
result from such transfers. The Company classifies those parts which are not
expected to be utilized in the following year as long-term assets.

Income Taxes and Change in Accounting Policy - During fiscal 1993, the
Company adopted Statement of Financial Accounting Standards (SFAS) No. 109:
Accounting for Income Taxes. Prior to the change the Company followed SFAS
No. 96: Accounting for Income Taxes. Similar to SFAS No. 96, SFAS No. 109
utilizes the liability method and deferred income taxes (assets) are recorded

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

Note 1 - Summary of Significant Accounting Policies (continued)

to reflect the expected tax consequences in future years of differences
between the tax basis of assets and liabilities and their financial reporting
amounts at each year end. The change in this accounting policy had no effect
upon net income for the year ended August 31, 1993.

Earnings (Loss) Per Share - Earnings (loss) per share is computed by
dividing net income (loss), as adjusted for dividends on preferred stock, by
the weighted average number of common shares outstanding during the period.
Common shares issued under the 1969 Key Employees Stock Grant Plan, 1980
Incentive Career Stock Plan and the 1991 Stock Grant Plan are issued and
outstanding and are only considered in the computation of weighted average
shares outstanding when their effect on earnings per share is dilutive.

Concentrations of Credit Risk - Financial instruments which potentially
subject the Company to concentrations of credit risk consist primarily of
trade receivables with a variety of national and international oil and natural
gas companies. The Company generally does not require collateral on its trade
receivables. Such credit risk is considered by management to be limited due
to the large number of customers comprising the Company's customer base. The
Company places substantially all its interest-bearing investments with major
financial institutions and, by policy, limits the amount of credit exposure to
any one financial institution. At August 31, 1995, the Company had deposits
in domestic banks in excess of federally insured limits of approximately $.3
million. In addition, the Company had deposits in foreign banks of $6.2
million which are not federally insured.

Fair Market Value of Financial Instruments - The carrying amount of the
Company's cash and short-term investments and short-term and long-term debt
had fair values that approximated their carrying amounts.

Note 2 - Provision for Reduction in Carrying Value of Certain Assets

During the fourth quarter of fiscal 1994, management analyzed its
domestic operations and made the strategic decision to reorganize certain of
these operations and sell certain of these assets. In Alaska, the Company
decided to reduce operating and administrative costs and to look for
opportunities to joint venture or combine operations with other drilling
companies. As a result, the Company reduced the carrying value of certain
assets in Alaska, including rigs, spare parts and property that were to be
sold. The Company's Partech (Registered Trademark) manufacturing operations
were downsized by the sale of land, buildings, equipment and excess
inventories, and accordingly, the Company wrote down to net realizable value
certain drilling equipment, property and inventories that were sold. In the
lower 48 divisions, the Company disposed of a number of mechanical rigs and
certain rig equipment which also were written down to net realizable value.
Write-offs relating to the lower 48 and Alaska rigs resulted in the removal of
16 rigs from the Company's fleet. Aggregating the items described above, the
Company recorded a $19,718,000 provision during the fourth quarter of fiscal
1994.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

Note 3 - Long-term Debt

August 31, 1995 1994
-------------------------------------------------------------------------
(Dollars in Thousands)

Parker Drilling
Note payable annually until November 2001
with interest at 5.75% $1,850 $ -
Parker Drilling International of New Zealand, Ltd.
Note payable monthly through February 2003
to bank with interest at bank's business
lending rate plus margin (total rate at
August 31, 1995 was 11.5%) 187 -
------ ------

Total debt 2,037 -
Less current portion 289 -
------ ------
Total long-term debt $1,748 $ -
------ ------
------ ------

The Company's long-term debt matures $289,000 each year for the years
1996 through 2000.

The Company has a credit agreement which provides a $7,500,000 revolving
credit facility through March 1, 1996. The credit agreement was subsequently
amended in the fourth quarter of fiscal 1995 to extend the expiration date to
May 31, 1996. Interest on the revolving credit facility is at prime plus 3/4
of one percent and commitment fees on the unused credit facility are 1/2 of
one percent. The agreement requires, among other things, maintenance of
minimum working capital and restricts capital expenditures and creation of
additional indebtedness. Under this agreement, the payment of dividends on
the Company's common stock is limited to the lesser of 40 percent of
consolidated net income for the preceding fiscal year or $2,600,000. At
August 31, 1995, all of the credit facility was available for drawdown.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

Note 4 - Income Taxes

Income (loss) before income taxes (in thousands) is summarized as
follows:

Years Ended August 31,
-------------------------------------
1995 1994 1993
--------- --------- ---------

United States $ 1,180 $(33,929) $(11,318)

Foreign 5,920 7,010 294
-------- -------- --------

$ 7,100 $(26,919) $(11,024)
-------- -------- --------
-------- -------- --------

Income tax expense (benefit) (in thousands) is summarized as follows:

Years Ended August 31,
-------------------------------------
1995 1994 1993
--------- --------- ---------

Current:
United States:
Federal $ - $ - $ (110)
State - (246) 6
Foreign 3,478 3,037 1,198

Deferred:
United States:
Federal - (326) -
State - - -
Foreign (294) (578) (1,431)
------ ------- ------

$3,184 $ 1,887 $ (337)
------ ------- ------
------ ------- ------

During fiscal 1993, the Company adopted the provisions of Statement of
Financial Accounting Standards (SFAS) No. 109: Accounting for Income Taxes.
SFAS No. 109 requires recognition of deferred tax liabilities and assets for
the expected future tax consequences of events that have been included in the
financial statements or tax returns. Under this method, deferred tax
liabilities and assets are determined based on the difference between the
financial statement and tax basis of assets and liabilities using enacted tax
rates in effect for the year in which the differences are expected to reverse.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

Note 4 - Income Taxes (continued)

Total income tax expense (benefit) differs from the amount computed by
multiplying income (loss) before income taxes by the U.S. federal income tax
statutory rate. The reasons for this difference (dollars in thousands) are as
follows:

Years Ended August 31,
------------------------------------------------------
1995 1994 1993
--------------- --------------- ---------------
% of % of % of
pretax pretax pretax
income income income
Amount (loss) Amount (loss) Amount (loss)
--------------- --------------- ---------------

Computed expected tax
expense (benefit) $ 2,414 34% $(9,153) (34%) $(3,748) (34%)
Foreign tax at rates
different than U.S. 1,171 16% 76 - (333) (3%)
Utilization of loss
carryforwards (401) (5%) - - - -
Limitation on
recognition of tax
benefit - - 11,536 43% 3,848 35%
Other - - (572) (2%) (104) (1%)
------- ---- ------- ---- ------- ----
Actual tax expense
(benefit) $ 3,184 45% $ 1,887 7% $ (337) (3%)
------- ---- ------- ---- ------- ----
------- ---- ------- ---- ------- ----

The components of the Company's tax assets and (liabilities) as of August
31, 1995 and 1994, are shown below (in thousands):

Domestic: 1995 1994
-------- --------

Deferred tax assets:
Net operating loss and tax credit carryforwards $ 67,259 $ 67,379
Reserves established against realization
of certain assets 1,089 1,455
Accruals not deducted for tax purposes 4,169 4,561
Depreciation of property, plant and equipment 3,385 8,913
------- -------
75,902 82,308
Deferred tax liabilities:
Depreciation of property, plant and equipment (8,408) (13,503)
------- -------
Net deferred tax asset 67,494 68,805
Valuation allowance (67,494) (68,805)
------- -------
$ - $ -
-------- --------
-------- --------
Foreign:

Depreciation of property, plant and equipment $ - $ 294
-------- --------
Deferred tax liability $ - $ 294
-------- --------
-------- --------

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

Note 4 - Income Taxes (continued)

At August 31, 1995, the Company had $137,500,000 net operating loss
carryforwards for tax purposes which expire over a fifteen year period
beginning in the year 2000. In addition, the Company had $13,600,000
investment tax credit carryforwards for tax purposes which expire over a
fifteen year period beginning in the year 1997.

Note 5 - Redeemable Preferred Stock

In January 1984, the Company began redeeming annually one-tenth of the
$.75 cumulative Series C preferred stock shares then outstanding and completed
the redemption in January 1993.

Note 6 - Common Stock and Stock Options

The Company's 1969 Key Employees Stock Grant Plan (formerly the 1969 Key
Employees Stock Option Plan) was amended in December 1990 to provide for the
issuance of 223,000 shares of common stock for no cash consideration to key
non-officer employees. Each employee receiving a grant of shares may dispose
of 15 percent of his/her grant on each annual anniversary date from the date
of grant for the first four years. On the fifth year anniversary, the
employee may dispose of the remaining 40 percent of his/her grant. No shares
were granted in fiscal 1995 and 1994. In fiscal 1995, 1,375 shares were
cancelled leaving 1,375 shares reserved for issuance or available for granting
as of August 31, 1995.

The Company's 1980 Incentive Career Stock Plan ("1980 Plan") provides for
the issuance of 2,100,000 shares of common stock for no cash consideration to
key employees. Each employee receiving a grant of shares may dispose of 15
percent of his/her grant on each annual anniversary date from the date of
grant for the first four years. On the fifth year anniversary, the employee
may dispose of the remaining 40 percent of his/her grant. No shares were
granted and no shares were cancelled in fiscal 1994. No shares were granted in
fiscal 1995 and 3,500 shares were cancelled leaving 6,250 shares reserved for
issuance and available for granting at August 31, 1995.

The Company's 1991 Stock Grant Plan ("1991 Plan") provides for the
issuance to officers and key employees of up to 3,160,000 shares of common
stock for no cash consideration. Shares granted under the 1991 Plan are fully
vested no earlier than 24 months from the effective date of the grant and not
later than 36 months. The specific vesting schedule for each grant is
determined at the time of grant. During fiscal 1994, 45,000 shares were
granted and no shares were cancelled. In fiscal 1995, 545,000 shares were
granted and no shares were cancelled leaving 1,580,195 shares reserved for
issuance and available for granting at August 31, 1995.

The fair market value of the common stock at date of grant for the Plans
is recorded as deferred compensation and amortized to expense over the period
during which the restrictions lapse. Deferred compensation is shown as a
deduction from stockholders' equity.

During fiscal 1995, 1994 and 1993, the Company purchased 51,279, 41,638
and 64,173 Parker Drilling shares, respectively, from certain of its
employees who had received stock grants under the 1991 and 1980 Plans. The
Company acquired the shares at the market price (weighted average price

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

Note 6 - Common Stock and Stock Options (continued)

was $5.40 per share in fiscal 1995, $7.31 per share in fiscal 1994 and
$5.98 per share in fiscal 1993). The proceeds were used to pay the employees'
tax withholding obligations arising from the vesting of shares under the
Plans.

The 1994 Non-Employee Director Stock Option Plan ("Director Plan")
was approved by shareholders of the Company on December 14, 1994.
The Director Plan provides for the issuance of options to purchase up
to 200,000 shares of the Company's common stock. The option price per
share is equal to the fair market value of a Parker Drilling share on
the date of grant. The term of each option is ten years, and an option
first becomes exercisable six months after the date of grant. Under the
Plan, on the first trade day of each calendar year, each person who is
then a non-employee director of the Company will be automatically
granted an option to purchase 5,000 shares of common stock.

The 1994 Executive Stock Option Plan ("Option Plan") was approved
by shareholders of the Company on December 14, 1994. The Option Plan
provides for the granting of a maximum of 2,400,000 shares to key
employees and consultants of the Company and its subsidiaries through
the granting of stock options, stock appreciation rights and restricted
and deferred stock awards. The option price per share may not be less
than 50% of the fair market value of a share on the date the option is
granted, and the maximum term of a non-qualified option may not exceed
fifteen years and the maximum term of an incentive option is ten years.

Information regarding the Company's stock option plans is summarized
below:

1994 Option Plan
1994 Non-
Director Incentive qualified
Plan Options Options
-------- --------- ---------

Shares under option:
Outstanding at September 1, 1994 - - -
Granted 15,000 733,000 147,000
Exercised - - (7,000)
Cancelled - - -
--------- -------- -------

Outstanding at August 31, 1995 15,000 733,000 140,000

Average option price per share
at August 31, 1995 $4.56 $4.50 $2.25

Options exercisable
at August 31, 1995 15,000 733,000 42,000

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

Note 6 - Common Stock and Stock Options (continued)

The following is a summary of common stock reserved for issuance at
fiscal year end:

1995 1994
--------- ---------

Key employee stock plans 4,180,820 2,127,945
Stock Bonus Plan 186,279 79,867
Warrants 400,000 400,000
--------- ---------

Total shares reserved for issuance 4,767,099 2,607,812
--------- ---------
--------- ---------

Warrants for 400,000 shares are exercisable at $3.88 per share, subject to
certain adjustments, no later than October 24, 1995.

Note 7 - Employee Benefit Plans

The Parker Drilling Company Stock Bonus Plan ("Plan") was adopted
effective September 1980 for employees of Parker Drilling and its subsidiaries
who are U.S. citizens and who have completed one year of service with the
Company. It was amended in 1983 to qualify as a 401(k) plan under the
Internal Revenue Code which permits a specified percentage of an employee's
salary to be voluntarily contributed on a before-tax basis and to provide for
a Company matching feature. Participants may contribute from one percent to
15 percent of eligible earnings and direct contributions to one or more of
seven investment funds. The Company presently makes dollar-for-dollar
matching contributions up to three percent of a participant's compensation.
The Company's matching contribution is made in Parker Drilling common stock.
The Plan was amended in 1989 to change the vesting schedule to no percent
vesting if a participant has less than five years of service and 100 percent
vesting if a participant has five or more years of service. Each Plan year,
Company contributions can be made, at the discretion of the Board of
Directors, in amounts not exceeding the permissible deductions under the
Internal Revenue Code. The Company issued 113,399 shares to the Plan in 1995,
123,619 shares in 1994 and 95,177 shares in 1993.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

Note 8 - Business Segments

Information regarding the Company's operations by geographic area is as
follows:

1995 1994 1993
--------- --------- ---------
Operations by Geographic Area (Dollars in Thousands)

Revenue:
United States $ 28,487 $ 30,975 $ 30,936
Other Western Hemisphere 76,115 52,722 31,604
Asia Pacific 44,911 43,445 22,556
Africa, Middle East and C.I.S. 7,858 25,282 15,705
-------- -------- --------

Total revenue $157,371 $152,424 $100,801
-------- -------- --------
-------- -------- --------
Operating income (loss):
United States $ (7,609) $(30,518) $(11,355)
Other Western Hemisphere (921) (5,937) 792
Asia Pacific 8,701 6,771 (1,240)
Africa, Middle East and C.I.S. (1,668) 831 (577)
-------- -------- --------

Total operating income (loss) $ (1,497) $(28,853) $(12,380)
-------- -------- --------
-------- -------- --------
Identifiable assets:
United States $ 71,233 $ 64,337 $121,130
Other Western Hemisphere 83,345 73,688 39,420
Asia Pacific 49,223 43,456 43,176
Africa, Middle East and C.I.S. 13,158 27,867 32,616
-------- -------- --------

Total identifiable assets $216,959 $209,348 $236,342
-------- -------- --------
-------- -------- --------

Two customers accounted for approximately 22 percent and 13 percent,
respectively, of total revenue in 1995. Three customers accounted for
approximately 14 percent, 12 percent and 11 percent, respectively, of total
revenue in 1994. Three customers accounted for approximately 22 percent, 14
percent and 10 percent, respectively, of total revenue in 1993. Operating
income (loss) is total revenue less operating expenses including depreciation,
depletion and amortization and an allocation of general corporate expenses
based on rig operating days. Operating income (loss) excludes interest
expense, interest capitalized, non-operating income or expense and income
taxes.

Note 9 - Commitments and Contingencies

At August 31, 1995, the Company had letters of credit facilities of
$17,651,000 of which $7,277,000 had been issued.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

Note 9 - Commitments and Contingencies

Certain officers have entered into a Severance Compensation and
Consulting Agreement ("the Agreement") with the Company. The Agreement has an
initial ten year term and provides certain benefits upon a change in control.
A change in control includes certain mergers, sale of all of the Company's
assets, liquidation of the Company or a third party acquiring a greater
percentage of stock than the aggregate ownership of Robert L. Parker, Robert
L. Parker Jr. and Robert L. Parker Trust. After a change in control occurs,
if an officer is terminated other than for cause or resigns for good reason,
the Agreement provides for a payment of three times the annual cash
compensation, a one year consulting agreement at the officer's annual cash
compensation, miscellaneous executive benefits and extended life and health
benefits for four years.

A former employee ("Plaintiff") was injured while working for the Company
on a rig owned and operated by another firm ("Defendant") for which he sought
damages against the firm. Pursuant to the indemnity provision in the contract
between the Company and the Defendant, the Company agreed to defend and
indemnify the Defendant. The litigation ultimately resulted in a settlement
in favor of the Plaintiff totalling $6,750,000. Because certain findings of
fact by the jury created a dispute over the obligations of the Company under
the indemnity provision, the Defendant and the Company entered into litigation
to determine liability for funding the settlement. This ancillary proceeding
also resulted in a settlement, with the Defendant agreeing to pay $1,687,000
and the Company $5,063,000.

The Company has filed suit against its excess insurer claiming
reimbursement of the compensatory portion of the settlement with the
Plaintiff. The Company has also commenced legal proceeding against the
counsel retained to defend the Defendant claiming that the Company was damaged
in having to indemnify the Defendant for the balance of the settlement with
the Plaintiff due to the malpractice/misrepresentation of the counsel. During
fiscal 1994, the Company recorded a $2,562,000 expense related to this
litigation.

In addition, the Company is a party to various other lawsuits and claims
arising out of the ordinary course of business. Management, after review and
consultation with legal counsel, considers that any liability resulting from
these matters would not materially affect the results of operations or the
financial position of the Company.

Note 10 - Related Party Transactions

At August 31, 1995, the Company owned an insurance policy on the life of
Mr. R. L. Parker, chairman and a principal stockholder. The Company is the
beneficiary of this policy which was issued pursuant to a Stock Purchase
Agreement ("Agreement") approved by vote of the stockholders at the 1975
Annual Meeting on December 10, 1975. This Agreement was entered into between
the Company and the Robert L. Parker Trust and provides that upon the death of
Robert L. Parker, the Company would be required, at the option of the Trust,
to purchase from the Trust at a discounted price the amount of Parker Drilling
common stock which could be purchased with the proceeds of the policy of
$7,000,000. On August 3, 1994, the Company and the Trust modified this
Agreement so that the Company will have the option but not the obligation to

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

Note 10 - Related Party Transactions (continued)

purchase the stock at a discounted price with the proceeds or to retain the
entire proceeds upon the death of Robert L. Parker. If action under the
agreement had been required at August 31, 1995, and the Company elected to
purchase Parker Drilling common stock from the Trust, Parker Drilling's
outstanding common stock would have been reduced by approximately three
percent.

As a part of the agreement to terminate the option held by the Trust and
to grant the Company a limited option to purchase stock at a discounted price,
the Company has also agreed to pay a premium of $655,019 annually for a split
dollar last-to-die life insurance policy on Robert L. Parker and Mrs.
Robert L. Parker. Upon the deaths of Mr. Parker and Mrs. Parker, the Company
will be reimbursed by the Robert L. Parker Sr. and Catherine M. Parker Family
Trust from the proceeds of the policy for the full amount of premiums paid
plus interest at the one-year treasury bill rate on the premiums paid after
fiscal year 1999. Additionally, Robert L. Parker Jr., Chief Executive Officer
of the Company and son of Robert L. Parker, will receive as a beneficiary of
the Trust one-third of the net proceeds of this policy. The face value of the
policy is $13,200,000.

Note 11 - Supplementary Information

Maintenance and repairs expense for the years ended August 31, 1995, 1994
and 1993 was $14,364,000, $15,548,000 and $10,149,000, respectively.
Advertising, royalties, taxes other than payroll and income taxes,
depreciation and amortization of intangible assets, pre-operating costs and
similar deferrals were each less than one percent of total revenue. At August
31, 1995, accrued liabilities included $1,178,000 of workers' compensation
liabilities and $2,981,000 of accrued payroll and payroll taxes. At August
31, 1994, accrued liabilities included $2,236,000 of workers' compensation
liabilities and $2,714,000 of accrued payroll and payroll taxes. Other long-
term liabilities included $1,679,000 and $1,179,000 of workers' compensation
liabilities as of August 31, 1995 and 1994, respectively.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

Note 12 - Selected Quarterly Financial Data (Unaudited)

Quarter
-------------------------------------------------
First Second Third Fourth Total
-------- -------- -------- -------- ---------
(Dollars in Thousands Except Per Share Amounts)

FISCAL 1995
- -----------
Revenue $33,283 $38,738 $43,259 $ 42,091 $157,371
Gross profit $ 1,558 $ 5,005 $ 5,666 $ 5,439 $ 17,668
Operating income (loss) $(3,457) $ (135) $ 1,016 $ 1,079 $ (1,497)

Net income (loss) $(1,093) $ 69 $ 2,050 $ 2,890 $ 3,916
------- ------- ------- -------- --------
------- ------- ------- -------- --------
Primary and fully
diluted earnings
(loss) per share $ (.02) $ .00 $ .04 $ .05 $ .07
------- ------- ------- -------- --------
------- ------- ------- -------- --------

Quarter
-------------------------------------------------
First Second Third Fourth Total
-------- -------- -------- -------- ---------
(Dollars in Thousands Except Per Share Amounts)
FISCAL 1994
- -----------
Revenue $40,043 $40,732 $36,679 $ 34,970 $152,424
Gross profit $ 6,044 $ 3,751 $ 1,049 $ (1,665) $ 9,179
Operating income (loss) $ 1,994 $(1,163) $(2,936) $(26,748) $(28,853)

Net income (loss) $ 1,608 $ (750) $(2,791) $(26,873) $(28,806)
------- ------- ------- -------- --------
------- ------- ------- -------- --------
Primary and fully
diluted earnings
(loss) per share $ .03 $ (.01) $ (.05) $ (.49) $ (.53)
------- ------- ------- -------- --------
------- ------- ------- -------- --------

The fourth quarter of fiscal 1994 includes a $19,718,000 Provision for
reduction in carrying value of certain assets and a $2,562,000 charge for
litigation discussed in Notes 2 and 9, respectively.

Gross profit is calculated by excluding General and administrative expense and
Provision for reduction in carrying value of certain assets from Operating
income (loss), as reported in the Consolidated Statement of Operations.

As a result of shares issued during the year, earnings (loss) per share for the
year's four quarters, which are based on average shares outstanding during each
quarter, do not equal the annual earnings (loss) per share, which is based on
the average shares outstanding during the year.

Item 9. Changes in and Disagreements with Accountants on Accounting and
Financial Disclosure

This item is not applicable to the Company in that disclosure is required
under Regulation S-X by the Securities and Exchange Commission only if the
Company had changed independent auditors and, if it had, only under certain
circumstances.

PART III

Item 10. Directors and Executive Officers of the Registrant

The information required by this item is hereby incorporated by reference
from the information appearing under the captions "Proposal One - Election of
Directors" and "Executive Officers" in the Company's definitive proxy
statement for the Annual Meeting of Stockholders to be held December 13,
1995, to be filed with the Securities and Exchange Commission ("Commission")
within 120 days of the end of the Company's fiscal year on August 31, 1995.

Item 11. Executive Compensation

The information required by this item is hereby incorporated by reference
from the information appearing under the captions "Meetings, Committees and
Compensation of the Board", "Executive Compensation", "Severance Compensation
and Consulting Agreements", "Compensation Committee Report on Executive
Compensation" and "Performance Graph" in the Company's definitive proxy
statement for the Annual Meeting of Stockholders to be held December 13, 1995,
to be filed with the Commission within 120 days of the end of the Company's
fiscal year on August 31, 1995. Notwithstanding the foregoing, in accordance
with the instructions to Item 402 of Regulation S-K, the information contained
in the Company's proxy statement under the sub-headings "Compensation
Committee Report on Executive Compensation" and "Performance Graph" shall not
be deemed to be filed as part of or incorporated by reference into this Form
10-K.

Item 12. Security Ownership of Certain Beneficial Owners and Management

The information required by this item is hereby incorporated by reference
from the information appearing under the captions "Voting" and "Common Stock
Ownership of Directors and Executive Officers" in the Company's definitive
proxy statement for the Annual Meeting of Stockholders to be held December 13,
1995, to be filed with the Commission within 120 days of the end of the
Company's fiscal year on August 31, 1995.

Item 13. Certain Relationships and Related Transactions

The information required by this item is hereby incorporated by reference
to such information appearing under the caption "Certain Relationships and
Related Transactions" in the Company's definitive proxy statement for the
Annual Meeting of Stockholders to be held December 13, 1995, to be filed with
the Commission within 120 days of the end of the Company's fiscal year on
August 31, 1995.

PART IV

Item 14. Exhibits, Financial Statement Schedule and Reports on Form 8-K

(a) The following documents are filed as part of this report:

(1) Financial Statements of Parker Drilling Company and subsidiaries
which are included in Part II, Item 8:
Page
----

Report of Independent Accountants 13
Consolidated Statement of Operations for each
of the three years in the period ended August 31, 1995 14
Consolidated Balance Sheet as of August 31, 1995 and 1994 15
Consolidated Statement of Cash Flows for each of the
three years in the period ended August 31, 1995 17
Consolidated Statement of Redeemable Preferred
Stock and Stockholders' Equity for each of the three
years in the period ended August 31, 1995 19
Notes to Consolidated Financial Statements 20

(2) Financial Statement Schedule:

Schedule II - Valuation and qualifying accounts 35

(3) Exhibits:
Exhibit Number Description
-------------- -----------

3(a) - Restated Certificate of Incorporation of Parker Drilling
Company; incorporated herein by reference to Exhibit 3(a)
to Annual Report on Form 10-K for the year ended August 31,
1989, as amended by Form 8 dated December 27, 1989.
3(b) - By-laws of Parker Drilling Company; incorporated herein by
reference to Exhibit 3(b) to Annual Report on Form 10-K for
the year ended August 31, 1992, as amended by Form 8 dated
February 18, 1993.
10(a) - Credit Agreement, dated as of September 24, 1992, between
Morgan Guaranty Trust Company of New York, Internationale
Nederlanden Bank N.V. and Parker Drilling Company as
amended; incorporated herein by reference to Exhibit 10(b)
to Annual Report on Form 10-K for the year ended August 31,
1992, as amended by Form 8 dated February 18, 1993;
Exhibit(a) to Quarterly Report on Form 10-Q for the
quarterly period ended February 28, 1994; Exhibit (a) to
Quarterly Report on Form 10-Q for the quarterly period
ended May 31, 1994; amendment dated June 30, 1995, to the
Credit Agreement, dated as of September 24, 1992, between
Morgan Guaranty Trust Company of New York, Internationale
Nederlanden Bank N.V. and Parker Drilling Company as
amended.

PART IV
(continued)

Item 14. Exhibits, Financial Statement Schedule and Reports on Form 8-K
(continued)

(3) Exhibits: (continued)
Exhibit Number Description
-------------- -----------

10(b) - Parker Drilling Company and Subsidiaries 1991 Stock Grant
Plan; incorporated herein by reference to Exhibit 10(c) to
Annual Report on Form 10-K for the year ended August 31,
1992, as amended by Form 8 dated February 18, 1993.
10(c) - 1980 Incentive Career Stock Plan; incorporated herein by
reference to Exhibit 10(c) to Annual Report on Form 10-K for
the year ended August 31, 1989, as amended by Form 8 dated
December 27, 1989.
10(d) - 1969 Key Employees Stock Grant Plan; incorporated herein by
reference to Exhibit 10(e) to Annual Report on Form 10-K for
the year ended August 31, 1992, as amended by Form 8 dated
February 18, 1993.
10(e) - Parker Drilling Company Stock Bonus Plan; incorporated
herein by reference to Exhibit 10(e) to Annual Report on
Form 10-K for the year ended August 31, 1993, as amended by
Form 10-K/A dated February 24, 1994, and by Exhibit 10(a) to
Quarterly Report on Form 10-Q for the quarterly period ended
February 28, 1995.
10(f) - 1975 Stock Purchase Agreement; incorporated herein by
reference to Exhibit 10(g) to Annual Report on Form 10-K for
the year ended August 31, 1986, as amended by Form 8 dated
December 29, 1986.
10(g) - Form of Severance Compensation and Consulting Agreement
entered into between Parker Drilling Company and each
officer of Parker Drilling Company; incorporated herein by
reference to Exhibit 10(g) to Annual Report on Form 10-K for
the year ended August 31, 1988, as amended by Form 8 dated
December 28, 1988 and Form 8 dated October 4, 1989.
10(h) - 1994 Parker Drilling Company Deferred Compensation Plan.
10(i) - 1994 Non-Employee Director Stock Option Plan.
10(j) - 1994 Executive Stock Option Plan.
21 - Subsidiaries of the Registrant. 36
23 - Consent of Independent Accountants. 37
27 - Financial Data Schedule.
99 - Additional Exhibit - Annual Report on To be
Form 11-K with respect to Parker Drilling filed by
Company Stock Bonus Plan amendment

Management Contract, Compensatory Plan or Agreement

(b) Reports on Form 8-K:
There were no reports on Form 8-K for the three months ended August 31,
1995.

PARKER DRILLING COMPANY AND SUBSIDIARIES
SCHEDULE II - VALUATION AND QUALIFYING ACCOUNTS
(Dollars in Thousands)

Column A Column B Column C Column D Column E
- -------------------------------- --------- --------- --------- ---------
Balance Charged
at to cost Balance
beginning and at end of
Classifications of period expenses Deductions period
- -------------------------------- --------- --------- ---------- ----------

Year ended August 31, 1995:
Allowance for doubtful accounts
and notes $ 1,050 $ - $ 254 $ 796
Reduction in carrying value of
rig materials and supplies $ 2,230 $ 870 $ 1,020 $ 2,080
Deferred tax valuation allowance $68,805 $(1,311) $ - $67,494

Year ended August 31, 1994:
Allowance for doubtful accounts
and notes $ 1,217 $ - $ 167 $ 1,050
Reduction in carrying value of
rig materials and supplies $ 1,798 $ 1,017 $ 585 $ 2,230
Deferred tax valuation allowance $58,251 $10,554 $ - $68,805

Year ended August 31, 1993:
Allowance for doubtful accounts
and notes $ 1,390 $ - $ 173 $ 1,217
Reduction in carrying value of
rig materials and supplies $ 4,693 $ 1,373 $ 4,268 $ 1,798
Deferred tax valuation allowance $ - $58,251 $ - $58,251

SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) of the Securities
Exchange Act of 1934, the Registrant has duly caused this report to be
signed on its behalf by the undersigned, thereunto duly authorized.

PARKER DRILLING COMPANY

By /s/ Robert L. Parker Jr. Date: Nov. 2, 1995
------------------------------
Robert L. Parker Jr.
President and Chief
Executive Officer and
Director

Pursuant to the requirements of the Securities Exchange Act of 1934,
this report has been signed below by the following persons on behalf of
the Registrant and in the capacities and on the dates indicated.

Signature Title Date
--------- ----- ----

/s/ Robert L. Parker Chairman of the Board and
By ------------------------ Director Date: Nov. 2, 1995
Robert L. Parker

/s/ Robert L. Parker Jr. President and Chief Executive
------------------------- Officer and Director
By Robert L. Parker Jr. (Principal Executive Officer) Date: Nov. 2, 1995

Vice President of Finance and
/s/ James J. Davis Chief Financial Officer
By ------------------------- (Principal Financial Officer) Date: Nov. 2, 1995
James J. Davis

/s/ Randy L. Ellis Corporate Controller
By ------------------------- (Principal Accounting Officer) Date: Nov. 2, 1995
Randy L. Ellis
Executive Vice President and
/s/ James W. Linn Chief Operating Officer and
By ------------------------- Director Date: Nov. 2, 1995
James W. Linn

/s/ Earnest F. Gloyna
By ------------------------- Director Date: Nov. 2, 1995
Earnest F. Gloyna

/s/ David L. Fist
By ------------------------ Director Date: Nov. 2, 1995
David L. Fist

/s/ R. Rudolph Reifrank
By ------------------------- Director Date: Nov. 2, 1995
R. Rudolph Reinfrank