320186--3/1/2006--GREY_WOLF_INC

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{debt, indebtedness, cash}
{stock, price, share}
{cost, regulation, environmental}
{gas, price, oil}
{competitive, industry, competition}
{condition, economic, financial}
An economic downturn may adversely affect our business. We face competition from competitors with greater resources. Our operations are subject to environmental laws that may expose us to liabilities for noncompliance, which may adversely affect us. We could be adversely affected if delivery times for rigs and rig equipment lengthen. Our existing senior indebtedness is, and any senior indebtedness we incur will be, effectively subordinated to any present or future obligations to secured creditors and liabilities of our subsidiaries. Investors in our common stock should not expect to receive dividend income, and will be dependent on the appreciation of our common stock to earn a return on their investment.

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