Notice of Annual Meeting of Shareholders and Proxy Statement
March 22, 2005

March 22, 2005

To Our Shareholders:

We are pleased to offer you this invitation to attend our 2005 Annual Meeting of Shareholders. The meeting will be held on Wednesday, April 27, 2005, at 10 a.m. Central Time, at the Westlake Club, 570 Westlake Park Boulevard, Houston, Texas.

At the meeting, we will:

We will also report our 2004 performance and answer your questions. You will have the opportunity to meet the directors and officers of the Company. In addition, our independent accountants will be present and available to answer appropriate questions.

Further details regarding the meeting and the business to be conducted are more fully described in the accompanying Notice of Annual Meeting and Proxy Statement.

Your vote is important. Whether or not you plan to attend the annual meeting, we hope you will vote as soon as possible. You may vote over the Internet, as well as by telephone or by mailing a proxy or voting instruction card. Voting by Internet, by phone or by written proxy will ensure your representation at the annual meeting regardless of whether you attend in person. Please review the instructions on the proxy or voting instruction card regarding each of these voting options.

Thank you for your ongoing support and continued interest in Parker Drilling Company. We look forward to seeing you at the meeting. If you cannot attend the meeting, please log on to our Web site at http://www.parkerdrilling.com as we will be posting a summary of the meeting shortly thereafter.

Sincerely,

Robert L. Parker		Robert L. Parker Jr.
Chairman		President & Chief Executive Officer

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NOTICE OF ANNUAL MEETING OF SHAREHOLDERS

TIME AND DATE		10 a.m. Central Time on Wednesday, April 27, 2005
PLACE		The Westlake Club, 570 Westlake Boulevard, Houston, Texas
ITEMS OF BUSINESS		(1)		To elect three members of Class III of the Board of Directors for three-year terms,
		(2)		To consider and act upon a proposal to approve the Parker Drilling Company 2005 Long-Term Incentive Plan,
		(3)		To ratify the appointment of PricewaterhouseCoopers LLP as our independent accountants for the 2005 year, and
		(4)		To transact such other business as may properly come before the annual meeting and any adjournment or postponement.
RECORD DATE		You can vote if you are a shareholder of record on March 10, 2005.
ANNUAL REPORT		Our Annual Report is enclosed.
PROXY VOTING		It is important that your shares be represented and voted at the annual meeting. You can vote your shares by completing and returning the proxy card sent to you. Most shareholders also have the option of voting their shares on the Internet or by telephone. Voting instructions are included in the accompanying Proxy Statement at page 8.
		By order of the Board of Directors,
		Ronald C. Potter
		Corporate Secretary

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TABLE OF CONTENTS

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PARKER DRILLING COMPANY
1401 ENCLAVE PARKWAY
HOUSTON, TEXAS 77077

PROXY STATEMENT

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Wells Fargo Bank, N.A.
Shareowner Services
P. O. Box 64854
St. Paul, MN 55164-0854
Toll free- (800) 468-9716
               (651) 450-4064

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Wells Fargo Bank, N.A.
Shareowner Services
P. O. Box 64854
St. Paul, MN 55164-0854
Toll free- (800) 468-9716
               (651) 450-4064

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GOVERNANCE OF THE COMPANY

Corporate Governance Principles

In January 2004, the board of directors approved the Company’s Corporate Governance Principles, which comply with the minimum requirements of the new corporate governance listing standards of the New York Stock Exchange (“NYSE”). In February of this year, the board of directors approved some revisions to the Corporate Governance Principles based on the recommendation of counsel that such revisions are consistent with best practices in corporate governance. The revised Corporate Governance Principles are attached to this Proxy Statement as Annex A. From time to time we may further revise our Corporate Governance Principles in response to changing regulatory requirements, evolving best practices, and the concerns of shareholders. Our Corporate Governance Principles are published on our Web site at http://www.parkerdrilling.com in the “About Us” section under “Governance.”

Presiding Director

In accordance with the Corporate Governance Principles, Mr. Robert M. Gates, chairman of the corporate governance committee, has acted as presiding director of the meetings of the non-management directors as required by the NYSE corporate governance listing standards. During 2004, the non-management directors held four meetings. In 2005, the non-management directors are scheduled to meet on a regular basis four times a year, and can also schedule additional meetings as they deem appropriate.

Communications with the Non-Management Directors

Shareholders and other parties interested in communicating directly with the presiding director or with non-management directors as a group may do so by writing to the Presiding Director, Parker Drilling Company, 1401 Enclave Parkway, Suite 600, Houston, Texas 77077, which contact information is also provided on our Web site. The board of directors has approved a process for handling communications addressed to non-management members of the board. Under that process, the General Counsel of the Company, under the specific direction of the presiding director, reviews the correspondence and forwards correspondence to the presiding director in accordance with such directions. The presiding director will determine, based on a process and criteria unanimously approved by the non-management directors, whether or not such communication warrants consideration by another committee of the board or by the entire board. Concerns relating to accounting, internal controls or auditing matters are immediately brought to the attention of the Company’s Director of Internal Audit and/or General Counsel in accordance with the Company’s whistleblower policy described below under “Procedure for Reporting Accounting, Internal Control and Audit Irregularities.” Such matters are investigated by the Director of Internal Audit and/or General Counsel and are reported to the audit committee.

Selection of Nominees as Director Candidates

The corporate governance committee considers candidates for board membership suggested by its members and other board members, as well as management and shareholders. The corporate governance committee also has the authority to retain a third-party search firm to assist in identification of qualified candidates, but has not retained a search firm at this time. A shareholder who wishes to recommend a candidate to be considered as a director nominee should notify the presiding director in writing at Presiding Director, Parker Drilling Company, 1401 Enclave Parkway, Suite 600, Houston, Texas 77077, and include any supporting information that the shareholder deems appropriate by December 31, 2005, to enable the corporate governance committee sufficient time to review the qualifications of candidates. The corporate governance committee will consider whether to nominate any person submitted pursuant to the provisions of the Company’s by-laws relating to shareholder nomination described below.

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The corporate governance committee is responsible for reviewing candidates and proposing candidates to the entire board for director nominees. The Corporate Governance Committee Charter includes a provision which requires the corporate governance committee to review the qualifications of any candidate which has been submitted by a shareholder for consideration as a director nominee and advise the board of its assessment. The Corporate Governance Principles and Corporate Governance Committee Charter do not provide any minimum qualifications other than that the candidates are “independent” under the NYSE corporate governance guidelines, but do provide that the directors should consider diversity, age, skills, and experience in the context of the needs of the board in making its determination of an appropriate candidate. The procedure for evaluating such candidates is identical to the procedure for evaluating candidates proposed by other directors, management or by a search firm hired by the corporate governance committee.

In 2004, upon the recommendation of Mr. John W. Gibson, Jr., the corporate governance committee reviewed the qualifications of Mr. Roger B. Plank and recommended to the full board that Mr. Plank be nominated as a director. The full board of directors considered the qualifications of Mr. Plank and voted unanimously to appoint him as a Class II director in May 2004. In addition, the corporate governance committee also reviewed the qualifications of Mr. Robert E. McKee III, who was recommended by Mr. Gibson, and submitted Mr. McKee as a candidate for director. The full board reviewed the qualifications of Mr. McKee and in February 2005 voted unanimously to appoint Mr. McKee as a Class II director.

Director Independence Determination

In accordance with the NYSE corporate governance listing standards, as amended, at a board meeting in February 2005 the Board made its annual review of director independence to determine whether or not any non-management directors had any material relationships or had engaged in material transactions with the Company. During these reviews, the board considered transactions and relationships between each director or any member of his immediate family and the Company and its subsidiaries and affiliates, including those reported under “Certain Relationships and Related Party Transactions” at page 21. The board then made a determination whether or not the identified transactions or relationships are addressed in the specific independence criteria of the new NYSE corporate governance listing standards, and, if so, whether or not these transactions exceeded the objective thresholds for independence. The board further examined all transactions and relationships that did not fall within the specific independence criteria. As a result of this review, the board affirmatively determined that all of the non-management directors are independent under the NYSE corporate governance listing standards on the basis that: (1) No non-employee director has engaged in a transaction or has a relationship with the Company that is contrary to or exceeds the thresholds of materiality as established by the specific independence criteria of the NYSE at Section 303A.02(b) and (2) in the considered opinion of the entire board, no non-employee director has any other relationship with the Company that is material under 303A.02(a). Our independent directors are R. Rudolph Reinfrank, Bernard Duroc-Danner, Robert M. Gates, John W. Gibson, Jr., Roger B. Plank and Robert E. McKee III.

Parker Policy on Business Ethics and Conduct

All of our employees, including our Chief Executive Officer, Chief Financial Officer and Principal Accounting Officer, are required to abide by Parker’s Code of Corporate Conduct to ensure that our business is conducted in accordance with the requirements of law and the highest standards of ethics. This Code of Corporate Conduct contains provisions on financial ethics consistent with the ethics requirements of the SEC that were instituted pursuant to the Sarbanes-Oxley Act of 2002 (“SOX”) and the corporate governance listing standards of the NYSE.

The full text of our Code of Corporate Conduct is published on our Web site at http://www.parkerdrilling.com at “About Us” under the “Governance” section. In accordance with the SEC rules, we will disclose any future amendments to the Code of Corporate Conduct and any waivers of such code that affect directors and executive officers and senior financial personnel within two business days following such amendment or waiver. A free copy of the Code of Corporate Conduct is also available to

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anyone who requests it by writing to the Corporate Secretary at 1401 Enclave Parkway, Suite 600, Houston, Texas 77077.

Procedure for Reporting Complaints Regarding Accounting Practices, Internal Accounting Controls and Audit Practices

In accordance with the SEC regulations adopted pursuant to SOX, the audit committee has adopted a procedure for the receipt, retention and handling of complaints regarding accounting practices, internal accounting controls and auditing practices. This policy and procedure has been integrated into the Company’s existing “whistleblower” policy which allows the confidential and anonymous reporting of such matters via a “hotline.” Additionally, such complaints can be reported directly to the Director of Internal Audit and/or the General Counsel. The hotline number and the contact information for the Director of Internal Audit and General Counsel are provided on the Company’s Web site. The policy provides that the complaints be reported to the Director of Internal Audit and/or General Counsel for review, at which time they will be forwarded to the audit committee for further investigation and handling as the audit committee deems appropriate.

Policy on Director Attendance at Annual Meeting

Parker’s Corporate Governance Principles provide that board members are expected to be in attendance of all meetings including the annual meeting of shareholders. Last year five of the seven directors were in attendance at the annual meeting.

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BOARD OF DIRECTORS

NOMINEES FOR DIRECTOR (CLASS III) — WITH TERM OF OFFICE EXPIRING AT THE 2008 ANNUAL MEETING OF SHAREHOLDERS

ROBERT L. PARKER
DIRECTOR SINCE 1969

Mr. Parker, age 81, chairman of the board, served as president and chief executive officer of the Company from 1954 until 1991, since which time he has served only as chairman. He also serves on the board of directors of Clayton Williams Energy, Inc., BOK Financial Corporation, and Wells Fargo Bank Texas, N.A. — Kerrville. He is the father of Robert L. Parker Jr.

ROBERT L. PARKER JR.
DIRECTOR SINCE 1973

Mr. Parker Jr., age 56, is president and chief executive officer, having joined the Company in 1973. He was elected president and chief operating officer in 1977 and chief executive officer in 1991. He previously was elected a vice president in 1973 and executive vice president in 1976. Mr. Parker Jr. is on the board of directors of the University of Texas Engineering Foundation Advisory Council, the University of Texas Development Board and the International Association of Drilling Contractors. He is the son of Robert L. Parker.

ROGER B. PLANK
DIRECTOR SINCE MAY 2004

Mr. Plank, age 48, is Executive Vice President and Chief Financial Officer of Apache Corporation, having served in this position since May 2000. Mr. Plank previously served as Vice President of Corporate Communications, Vice President of External Affairs and Vice President of Planning and Corporate Development. He is also a member of the Board of Trustees and Audit Committee for Wyoming’s Ulcross Foundation and a member of the board of directors of Houston’s Alley Theater.

CONTINUING DIRECTORS (CLASS I) — WITH TERM OF OFFICE EXPIRING AT THE 2006 ANNUAL MEETING OF SHAREHOLDERS

R. RUDOLPH REINFRANK
DIRECTOR SINCE 1993

Mr. Reinfrank, age 49, is a co-founder of Clarity Partners, where he has held the position of managing general partner since 1997. Prior to the formation of Clarity Partners, Mr. Reinfrank co-founded Rader Reinfrank & Co., LLC, Beverly Hills, California. From May 1993 through December 1996, Mr. Reinfrank was a managing director of the Davis Companies.

JOHN W. GIBSON JR.
DIRECTOR SINCE 2001

Mr. Gibson, age 47, resigned his position as president and chief executive officer of Halliburton’s Energy Services Group in December 2004, having been appointed to this position in January 2003. He was previously president of Halliburton Energy Services since March 2002. Mr. Gibson had also served as president and chief executive officer of Landmark Graphics Corporation since 2000 and earlier as chief operating officer. He joined the company in 1994 and held various executive positions, including executive vice president of Landmark’s Integrated Products group, and president and vice president of Landmark’s Zycor Division.

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CONTINUING DIRECTORS (CLASS II) — WITH TERM OF OFFICE EXPIRING AT THE 2007 ANNUAL MEETING OF SHAREHOLDERS

BERNARD DUROC-DANNER
DIRECTOR SINCE 1996

Dr. Duroc-Danner, age 50, is chairman, president and chief executive officer of Weatherford International Ltd., having held these positions since May 1998. For the previous five years he held the position of president, chief executive officer and director of EVI, Inc. Weatherford International Ltd. is an international manufacturer and supplier of oilfield equipment. Dr. Duroc-Danner holds a Ph.D. in economics from Wharton (University of Pennsylvania) and is also a director of CalDive International, Inc., Dresser, Inc. and Universal Compression, Inc.

ROBERT M. GATES
DIRECTOR SINCE 2001

Dr. Gates, age 61, is president of Texas A&M University, having been appointed to this position in 2002. Previously, he was director of the Central Intelligence Agency, which he joined in 1966. From 1991 to 1993 he served as director of central intelligence, where he led all U.S. foreign intelligence agencies and directed the CIA. From 1999 to 2001, he served as Dean of the George Bush School of Government and Public Service at Texas A&M University. Dr. Gates is a member of the board of trustees of The Fidelity Funds and a member of the board of directors of NACCO Industries. He serves as senior adviser or consultant to several major international firms and is a trustee of the Forum for International Policy. He is on the national executive board of the Boy Scouts of America and president of the National Eagle Scout Association.

ROBERT E. MCKEE III
DIRECTOR SINCE FEBRUARY 2005

Mr. McKee, age 58, retired in March 2003, after 37 years with ConocoPhillips and Conoco, Inc., serving the last seven years as Executive Vice President-Exploration. He currently serves on the board of directors of Questar Corporation and Post Oak Bank (Houston, Texas). He is also a member of the Advisory Committee for the University of Texas Engineering Department and serves on the Colorado School of Mines Advisory Board and the Institute of International Education Board (Southern Region).

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Board and Committee Membership

The business of the Company is managed under the oversight of our board of directors (the “board”). The board has regularly scheduled meetings and special meetings as necessary to effectively oversee the business of the Company. In addition to meetings of the full board, the non-management directors have separate meetings among themselves and also have the opportunity to meet with other officers and review materials as provided to them or requested by them in order to be properly informed as to the business affairs of the Company.

During 2004, the board held four regularly scheduled meetings and four telephonic meetings. The board has an audit committee, a compensation committee and a corporate governance committee. All of the incumbent directors attended at least 75% percent of the meetings of the board and board committees on which they served, with the exception of Dr. Duroc-Danner.

The following table provides 2004 membership and meeting information for each of the committees of the board.

**  Appointed director and member of the compensation committee in February 2005

*** Mr. Barnes resigned from the board, including his positions on audit committee and compensation committee, effective January 1, 2005.

The Audit Committee

Audit Committee Independence Determination. At a meeting in February 2005, the board reviewed the qualifications of the members of the audit committee and determined that, in addition to satisfying the NYSE independence standards, each member of the audit committee satisfies the independence requirements of the SEC, pursuant to Section 10A-3 of the Securities and Exchange Act of 1934.

Audit Committee Financial Expert. At a meeting in February 2005, the board reviewed the qualifications of each audit committee member and unanimously determined that each member of the committee meets the requirements of an audit committee financial expert pursuant to Item 401(h)(2) of Regulation S-K.

Financial Literacy and Financial Management Experience. At a meeting in February 2005, the board reviewed the qualifications of each member of the audit committee and determined that each member of the audit committee is financially literate and that at least one member has financial management experience as required by the NYSE corporate governance listing standards.

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The audit committee has four regularly scheduled meetings each year, and schedules additional meetings to review earnings releases and public filings as well as periodic meetings held separately with management, the internal auditor, the independent accountant and other officers as the committee deems necessary to properly perform its functions under its charter. The audit committee assists the board with its monitoring of:

The other specific responsibilities of the audit committee are set forth in its charter, which was revised this year based on counsel’s recommendations as to best practices in corporate governance relating to audit committees. The revised charter was reviewed and approved by the board. A copy of the revised charter is attached as Annex B to this proxy statement and is also available on our Web site at http://www.parkerdrilling.com.

The Compensation Committee

Compensation Committee Independence Determination. At a meeting in February 2005, the board reviewed the qualifications of each member of the compensation committee and determined each member of the committee satisfied the independence criteria established by the corporate governance listing standards of the NYSE, as revised in 2004.

The compensation committee holds regularly scheduled meetings that its members deem necessary and appropriate to fulfill the responsibilities set forth in its charter. These duties include:

The compensation committee revised its charter this year based on counsel’s recommendations as to best practices in corporate governance as relates to compensation committees, which contains the above duties and other responsibilities. This revised charter was reviewed and approved by the board and is attached hereto as Annex C. The revised charter is also available on our Web site at www.parkerdrilling.com.

The Governance Committee

The governance committee was created and constituted in 2003 by the board to be responsible for making recommendations to the board concerning issues relating to certain aspects of corporate governance, including the review of nominees for candidates for board positions under guidelines established in the Company’s Corporate Governance Principles, to recommend and review annually the Corporate Governance Principles, to assess the overall effectiveness of the board and its committees on an annual basis, to make recommendations on director compensation and to set

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guidelines on board service. The governance committee is composed entirely of directors who meet the independence requirements of the NYSE.

The Corporate Governance Committee Charter was recently revised based on the recommendation of counsel as to best practices for governance committees. The revised charter was reviewed and approved by the board. A copy of the revised charter is attached hereto as Annex D and is also available on our Web site at http://www.parkerdrilling.com.

Fees and Benefit Plans for Non-Employee Directors

Annual Cash Retainer Fees. Non-employee directors receive an annual cash retainer fee of $20,000 per year.

Meeting Fees. Non-employee directors also receive a fee of $3,000 for each board meeting, including telephonic meetings, and $2,000 for each committee meeting, including telephonic meetings, that they attend.

The governance committee reviewed the compensation for the non-management directors, and received and considered a report from the compensation consultant retained to evaluate director compensation. The governance committee determined that no change in the cash compensation was warranted at this time.

Stock Plan. The non-employee directors are eligible to participate in the Company’s 1994 Non-Employee Director Stock Option Plan and the Third Amended and Restated Parker Drilling 1997 Stock Plan (the “1997 Plan”), which provide for the grant of stock options and restricted stock grants. Each non-employee director received 25,000 non-qualified stock options in 2004 under the 1997 Plan, which options have a strike price of $4.20, except for Roger B. Plank who received 15,000 non-qualified stock options, which options have a strike price of $3.34, which vest in accordance with the table on page 24. The non-employee directors will be eligible, subject to shareholder approval, to participate in the Parker Drilling Company 2005 Long-Term Incentive Plan (the “2005 Plan”). The governance committee proposed that the board consider awarding stock grants to the non-management directors, in lieu of stock options, consistent with the recommendation of the compensation consultant after the shareholders vote on the 2005 Plan.

2004 Compensation of Non-Employee Directors

* Resigned effective January 1, 2005

** Appointed a board member in 2004

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Certain Relationships and Related Party Transactions

On February 27, 1995, the Company entered into a Split Dollar Life Insurance Agreement with Robert L. Parker Sr. and the Robert L. Parker Sr. and Catherine M. Parker Family Trust under Indenture dated the 23rd day of July 1993 (“Trust”) pursuant to which the Company agreed to provide life insurance protection for Mr. and Mrs. Robert L. Parker in the event of the death of Mr. and Mrs. Parker (the “Agreement”). The Agreement provided that the Trust would acquire and own a life insurance policy with face amount of $13,200,000 and that the Company would pay the premiums subject to reimbursement by the Trust out of the proceeds of the policy, with interest to accrue on the premium payments made by the Company from and after January 1, 2000, at the one-year Treasury bill rate. The repayment of the premiums is secured by an Assignment of Life Insurance Policy as Collateral. On October 14, 1996, the Agreement was amended to provide that the interest accrual would be deferred until February 28, 2003, in consideration for the Company’s termination of a separate life insurance policy on the life of Robert L. Parker. On April 19, 2000, the Agreement was amended and restated to replace the previous policy with two policies, one for $8,000,000 on the life of Robert L. Parker and one for $7,700,000 on the lives of both Mr. and Mrs. Robert L. Parker. Mr. Robert L. Parker Jr., the Company’s CEO and son of Robert L. Parker, will receive one-third of the net proceeds of the policies.

As of December 31, 2004, the accrued amount of premiums paid by the Company on the policies and to be reimbursed by the Trust to the Company was approximately $4.7 million. Due to the adoption of the Sarbanes-Oxley Act of 2002 (“SOX”), additional loans to executive officers and directors may be prohibited, although continuance of loans in existence as of July 30, 2002, are allowed, provided there is no material modification to such loans. Because the advancing of additional annual premiums by the Company may be considered a prohibited loan under SOX, the Company elected to not advance the premiums that were due in December 2002, 2003 and 2004 pending further clarification from the SEC as to how the Company’s obligation to advance these premiums under the Agreement can be honored without violating SOX.

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As part of building business relationships and fostering closer ties to clients, the Company traditionally hosts customers in a variety of activities such as sporting events and other outdoor activities, often coupled with industry-related conferences.

Robert L. Parker, chairman of the Company, through the Robert L. Parker, Sr. Family Limited Partnership (the “Limited Partnership”) owns a 2,987 acre ranch near Kerrville, Texas, (“Cypress Springs Ranch”) and a 4,982 acre ranch in Mazie, Oklahoma (the “Mazie Ranch”). The Cypress Springs Ranch has lodging, conference facilities, sporting and other outdoor activities which the Company utilized in connection with marketing and other business purposes during 2004. The Mazie Ranch has hunting, fishing and other outdoor facilities.

Effective as of January 1, 2004, the Company and the Limited Partnership entered into a lease agreement pursuant to which the Company pays the Limited Partnership a monthly fee in exchange for unlimited access to the facilities at the Cypress Springs Ranch and the Mazie Ranch. During 2004, the Company paid the Limited Partnership a total of $396,000 in lease fees. The Limited Partnership also entered into a services agreement with the Company effective as of January 1, 2004, pursuant to which the Company provides certain personnel to the Limited Partnership to maintain the Cypress Springs Ranch and the Mazie Ranch. During 2004, the Limited Partnership paid the Company a total of $222,304 for the provision of such personnel.

Robert L. Parker Jr., president and chief executive officer of the Company owns a 1,400 acre ranch near Kerrville, Texas (the “Camp Verde Ranch”). The Camp Verde Ranch has lodging as well as hunting,

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fishing and other outdoor facilities. Effective January 1, 2004, the Company entered into a lease agreement pursuant to which the Company pays Robert L. Parker Jr. a monthly fee in exchange for unlimited access to the Camp Verde Ranch facilities. During 2004, the Company paid Robert L. Parker Jr. a total of $92,400 in lease fees. Mr. Parker Jr. also entered into a services agreement with the Company effective as of January 1, 2004, pursuant to which the Company provides certain personnel to Mr. Parker Jr. to maintain the Camp Verde Ranch. During 2004, Mr. Parker Jr. paid the Company a total of $40,826 for the provision of such personnel.

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Mr. Robert L. Parker Jr. incurred tax liability of $163,092 on January 5, 1998, in connection with the vesting of restricted stock granted to him in 1995 by the Company pursuant to the Company’s 1991 Stock Grant Plan. As was customary, the Company paid the estimated taxes on said stock grant pursuant to an agreement that Mr. Parker Jr. would repay the Company. The Company did not charge interest on the taxes advanced on behalf of Mr. Parker Jr. In December 2004, Mr. Parker Jr. repaid the Company the full $163,092 and currently has no outstanding indebtedness to the Company.

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Mr. Gibson is a continuing director and it is anticipated he will stand for re-election as a director at the 2006 Annual Meeting. During the majority of 2004, Mr. Gibson held the position of President and Chief Executive Officer of Halliburton Energy Services Group (“HES”). During 2004, subsidiaries of the Company received $31,384,000 in gross revenues for performance of drilling services from various affiliates of HES. In addition, subsidiaries of the Company purchased equipment and services from affiliates of HES during 2004 in a total amount of $80,858.

Dr. Bernard Duroc-Danner is a continuing director and is anticipated to stand for re-election at the 2007 Annual Meeting for a term of office expiring in three years or until his successor is elected. Dr. Duroc-Danner is Chairman of the board, President and Chief Executive Officer of Weatherford International, Inc. During 2004, subsidiaries of the Company received $199,032 in gross revenues for drilling equipment and services provided to Weatherford and its affiliates. During 2004, subsidiaries of the Company paid Weatherford and its affiliates a total of $2,860,913 for purchases of equipment.

Mr. Plank is a Class III director who will stand for election this year. Mr. Plank is Executive Vice President and Chief Financial Officer of Apache Corp. (“Apache”). During 2004, subsidiaries of the Company received approximately $5,767,278 in gross revenues for drilling equipment and services provided to Apache and its affiliates.

The board reviewed all of the above transactions as noted on page 14 and determined that none of these transactions present a conflict of interest or otherwise impair the independence of these directors under the corporate governance listing standards of the NYSE.

Indemnification

In accordance with our by-laws, we indemnify our directors and officers to the fullest extent permitted by law. We also have signed agreements with each of the directors and officers contractually obligating us to provide indemnification to each director and officer.

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Equity Ownership of Officers, Directors and Principal Stockholders

The following table sets forth information concerning beneficial ownership of the Company’s common stock as of January 31, 2005, by (a) all persons known by the Company to be beneficial owners of more than five percent (5%) of such stock, (b) each director and nominee for director of the Company, (c) each of the executive officers of the Company named in the Summary Compensation table (“Named Executive Officers”), and (d) all directors and Named Executive Officers as a group. Unless otherwise noted, the persons named below have sole voting and investment power with respect to such shares.

AMOUNT AND NATURE OF SHARES BENEFICIALLY OWNED

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Section 16(a) Beneficial Ownership Reporting Compliance

Section 16(a) of the Securities Exchange Act of 1934 requires our directors and executive officers to file reports of holdings and transactions in Parker Drilling shares with the SEC and the NYSE. Based on our records and other information, we believe that in 2004 our directors and executive officers met all applicable SEC filing requirements with the exception of the Form 4 filed by John R. Gass to reflect the disposition of restricted stock that he forfeited as of the effective date of his resignation as Vice President of Operations on October 31, 2004, due November 2, 2004, and filed on November 8, 2004, and the Form 3 filed by David C. Mannon to reflect his appointment as Senior Vice President and Chief Operating Officer effective December 20, 2004, due December 30, 2004, and filed on January 3, 2005.

OPTION/SAR GRANTS IN 2004 TO NON-EMPLOYEE DIRECTORS

The following stock options were awarded to non-employee directors in 2004.

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PROPOSALS TO BE VOTED ON

ITEM 1— ELECTION OF DIRECTORS

The by-laws of the Company currently provide that the number of directors which shall constitute the whole board of directors shall be fixed from time to time by resolution of the board of directors. On May 17, 2004, the board adopted a resolution increasing the number of directors from seven to eight to accommodate the appointment of Mr. Roger B. Plank as a director on said date. Mr. Barnes resigned as a director effective January 1, 2005, and Mr. Robert E. McKee III was appointed a director by the board on February 2, 2005, to fill the position vacated by the resignation of Mr. Barnes. Each current director was elected by the stockholders except for Mr. Plank and Mr. McKee, who were appointed by the board in May 2004 and February 2005, respectively. Mr. Plank is standing for election at this year’s annual meeting as a Class III director and it is anticipated that Mr. McKee will stand for election as a Class II Director at the 2007 Annual Meeting. The remaining directors will continue to serve the terms described in their biographies under “Board of Directors” at page 16.

Our directors serve staggered terms. This is accomplished as follows:

Nominees for directors this year are Robert L. Parker, Robert L. Parker Jr. and Roger B. Plank. These three directors currently comprise Class III of the three classes of directors.

Each of the three nominees for director this year currently is a director of the Company and has consented to serve a three-year term.

The board of directors recommends a vote FOR these nominees.

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ITEM 2- APPROVAL OF THE PARKER DRILLING COMPANY 2005 LONG-TERM INCENTIVE PLAN

General

     Shareholders of the Company are being asked to approve the Parker Drilling Company 2005 Long Term Incentive Plan (“2005 Plan”). If approved by shareholders, the 2005 Plan will replace the Parker Drilling Company Third Amended and Restated 1997 Stock Plan, the Parker Drilling Company 1994 Executive Stock Option Plan, the Parker Drilling Company 1994 Non-Employee Director Stock Option Plan and the Parker Drilling Company and Subsidiaries 1991 Stock Grant Plan (collectively, the “Existing Plans”). If the 2005 Plan is approved by shareholders, the Existing Plans will be frozen and will remain in effect only to the extent of awards outstanding under such Existing Plans as of April 27, 2005, but no future awards under the Existing Plans will be made. As of February 28, 2005, 3,950,134 shares of common stock were available for awards under the Existing Plans and 7,134,701 shares of common stock were reserved for issuance pursuant to outstanding awards under the Existing Plans. Upon approval of the 2005 Plan the 3,950,134 shares would no longer be available under the Existing Plans, but would become available for awards under the 2005 Plan. Additional shares would become available for awards under the 2005 Plan only if stock options or stock grants currently outstanding under the Existing Plans expire or are canceled or forfeited before they are exercised or vest, respectively, and limited to the extent of the current outstanding awards. The Company’s board of directors unanimously approved the 2005 Plan on February 2, 2005, and directed that it be submitted to the shareholders for approval at the Company’s 2005 Annual Meeting.

     The purpose of the 2005 Plan is to foster and promote the long-term financial success of the Company and to increase shareholder value by attracting, motivating and retaining key employees, consultants and directors and providing such participants in the 2005 Plan with a program for obtaining an ownership interest in the Company that links and aligns their personal interests with those of the Company’s shareholders, thus enabling such participants to share in the long-term growth and success of the Company. To accomplish these goals, the 2005 Plan permits the granting of incentive stock options, non-statutory stock options, stock appreciation rights, restricted stock, restricted stock units, performance awards payable in cash or common stock, phantom shares, and other awards, some of which may require the satisfaction of performance-based criteria in order to be payable to participants. If approved, the 2005 Plan will be an important component of the total compensation package offered to employees and directors, reflecting the importance that the Company places on motivating and rewarding superior results with long-term, performance-based incentives.

     The board and the compensation committee believe that the adoption of the 2005 Plan is in the best interest of the shareholders as opposed to amending the Existing Plans, because the Existing Plans lack flexibility to provide various performance-based awards. The 2005 Plan provides for, in addition to stock options and stock grants, the award of various performance-based awards. Approval of the 2005 Plan will not increase the number of shares of common stock available as equity compensation under the Existing Plans or the 2005 Plan in excess of what is currently available under the Existing Plans.

     The board of directors recommends that stockholders vote FOR the proposal to approve the Parker Drilling Company 2005 Long-Term Incentive Plan.

Description of the 2005 Plan

     The following is a summary of the principal features of the 2005 Plan and its operation. For additional details regarding the 2005 Plan you should refer to the full text of the 2005 Plan, a copy of which is attached to this proxy statement as Appendix E.

     Administration. The 2005 Plan is administered by a committee (“Committee”) appointed by the board of directors. The board has designated the compensation committee as the administrator of

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the 2005 Plan, except for the awards to non-employee directors which will be administered by the full board upon recommendation of the governance committee. The Committee is composed of at least two directors who qualify as “outside directors” under Section 162(m) of the Internal Revenue Code of 1986 and/or as “non-employee directors” under Rule 16b-3 promulgated under the Securities Exchange Act of 1934. Subject to the terms of the 2005 Plan, the Committee has the power to select the executive officers (including “covered employees” as defined in IRC section 162(m)) who are eligible to receive awards under the 2005 Plan, the type and amount of incentive awards to be awarded, and the terms and conditions of such awards and to otherwise approve the total amount of awards that may be granted to different levels of employees in the Company, with the specific awards within these levels to be determined by the CEO. The Committee may delegate its authority under the 2005 Plan described in the preceding sentence to officers or other employees of the Company, but may not take any action in contravention of Rule 16b-3 promulgated under the Securities Exchange Act of 1934, the performance-based compensation exception under Section 162(m) of the Internal Revenue Code of 1986 (“Internal Revenue Code”), or the Sarbanes-Oxley Act of 2002. The Committee also has the authority to interpret the 2005 Plan and establish, amend or waive rules necessary or appropriate for the administration of the 2005 Plan.

     Eligibility. Any employee or consultant of the Company or a subsidiary of the Company or a director of the Company who, in the opinion of the Committee, is in a position to contribute to the growth, development or financial success of the Company is eligible to participate in the 2005 Plan. In any calendar year, no covered employee described in Section 162(m) of the Internal Revenue Code or applicable Treasury Regulations may be granted (in the case of stock options and stock appreciation rights), or have vest (in the case of restricted stock or other stock-based awards), awards relating to more than 900,000 shares of common stock, and the maximum aggregate cash payout with respect to incentive awards paid in cash to such covered employees may not exceed $3,000,000.

     Shares Subject to the 2005 Plan. The maximum number of shares of the Company’s common stock, par value $0.16 2/3 per share, that may be delivered pursuant to awards granted under the 2005 Plan is 11,084,835 shares of common stock, representing the number of shares of common stock available for grant under the Existing Plans as of April 27, 2005, plus any shares of common stock that are represented by awards outstanding under the Existing Plan on April 27, 2005 that are subsequently forfeited or terminated, expire unexercised, lapse or are otherwise canceled in a manner such that the shares of common stock covered by such awards would be available for future awards under the Existing Plans. Any shares subject to an award under the 2005 Plan that are forfeited or terminated, expire unexercised, lapse or are otherwise canceled in a manner such that the shares of common stock covered by such award are not issued may again be used for awards under the 2005 Plan. A maximum of 1,000,000 shares of common stock may be issued upon exercise of incentive stock options. The maximum number of shares deliverable pursuant to awards granted under the 2005 Plan is subject to adjustment by the Committee in the event of certain dilutive changes in the number of outstanding shares. Under the 2005 Plan, the Company may issue authorized but unissued shares, treasury shares, or shares purchased by the Company on the open market or otherwise. In addition, the number of shares of common stock available for future awards is reduced by the net number of shares issued pursuant to an award.

     Transferability. Rights under any award may not be transferred except by will or the laws of descent and distribution or a qualified domestic relations order. However, the Committee may, in its discretion, authorize in the applicable award agreement the transfer, without consideration, of all or a portion of a non-statutory stock option by a participant in the plan to family members, trusts and entities owned by family members; provided, however, that no transfer is permitted if such transfer would be considered to be a “listed transaction” under Internal Revenue Service’s tax shelter guidance.

     Amendment of the 2005 Plan. The board of directors has the power and authority to terminate or amend the 2005 Plan at any time; provided, however, the board may not, without the approval of shareholders:

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In addition, to the extent that the Committee determines that the listing requirements of any national securities exchange or quotation system on which the Company’s common stock is then listed or quoted, or the Internal Revenue Code or regulations promulgated thereunder, require shareholder approval in order to maintain compliance with such listing requirements or to maintain any favorable tax advantages or qualifications, then the 2005 Plan shall not be amended without approval of the Company’s shareholders. No amendment to the 2005 Plan may adversely affect any rights of a holder of an outstanding award under the 2005 Plan without such holder’s consent.

     Change in Control. Unless provided otherwise in the applicable award agreement, in the event of a change in control, all outstanding awards shall become 100% vested, free of all restrictions, immediately and fully exercisable, and deemed earned in full and payable as of the day immediately preceding the change in control. A “change in control” means the occurrence of any one or more of the following events:

The board of directors may determine that any of the events described above will not constitute a change in control.

     Award Agreements and Term. All awards under the 2005 Plan will be authorized by the Committee and evidenced by an award agreement setting forth the type of incentive being granted, the vesting schedule, and other terms and conditions of exercisability. No stock options may be exercisable for more than ten years from the date of grant, or, in the case of an incentive stock option granted to an employee who owns or is deemed to own more than ten percent of the Company’s common stock, 5 years from the date of grant. In no event, however, may incentive stock options be granted after the expiration of ten (10) years from the effective date of the 2005 Plan.

     Stock Options. A grant of a stock option entitles a participant to purchase from the Company a specified number of shares of common stock at a specified price per share. In the discretion of the Committee, stock options may be granted as non-statutory stock options or incentive stock options, but incentive stock options may only be granted to employees of the Company or a subsidiary. The

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aggregate fair market value of the common stock with respect to which incentive stock options become first exercisable by any participant during any calendar year cannot exceed $100,000.

     The Committee may fix any price as the purchase price per share of common stock which may be purchased under a non-statutory stock option. The purchase price per share of common stock which may be purchased under an incentive stock option must be at least equal to the fair market value of the Company’s common stock on the date of grant; or, if the incentive stock option is granted to an employee who owns or is deemed to own more than ten percent of the Company’s common stock, 110% of the fair market value of the Company’s common stock on the date of grant. The exercise price for shares of common stock acquired on exercise of a stock option must be paid in cash; or, if approved by the Committee, delivery of shares of the Company’s common stock that have been held by the optionee for at least six months with a fair market value equal to the exercise price of the stock option, the withholding of shares that would otherwise be issuable upon exercise, participation in a broker-assisted “cashless exercise” arrangement, or payment of any other form of consideration acceptable to the Committee.

     Stock Appreciation Rights (SARs). The grant of a SAR provides the holder with the right to receive a payment in shares of common stock equal to the excess of the fair market value of a specified number of shares of common stock on the date the SAR is exercised over a SAR price specified in the applicable award agreement. The SAR price specified in an award agreement must be equal to or greater than the fair market value of the Company’s common stock on the date of the grant of the SAR.

     Restricted Stock. A grant of restricted stock is an award of shares of common stock subject to restrictions or limitations set forth in the 2005 Plan and in the related award agreement. The award agreement for restricted stock will specify the time or times within which such award may be subject to forfeiture and any performance goals which must be met in order to remove any restrictions on such award. Except for limitations on transfer or limitation set forth in the applicable award agreement, holders of restricted stock shall have all of the rights of a shareholder of the Company, including the right to vote the shares, and, if provided in the applicable award agreement, the right to receive any dividends thereon.

     Other Awards. The Committee may grant to any participant other forms of awards payable in shares of the Company’s common stock or cash. The terms and conditions of such other form of award shall be specified by the applicable award agreement. Such other awards may be granted for no cash consideration, other than services already rendered, or for such other consideration as may be specified by the award agreement.

     Performance-Based Awards. Awards may be granted under the 2005 Plan that are subject to the attainment of pre-established performance goals over a specified performance period. Performance-based awards may be payable in stock or cash. The award agreement for a performance-based award will specify the performance period, the performance goals to be achieved during the performance period, and the maximum or minimum settlement values. Performance goals set by the Committee may relate to profits, return measures, cash flows, earnings and other objective performance criteria set forth in the 2005 Plan that the Committee believes to be relevant to the Company’s business.

     Termination of Employment, Death, Disability and Retirement. Unless otherwise provided in an award agreement, upon the termination of a participant’s employment the non-vested portions of all outstanding awards will terminate immediately. Subject to different provisions in an award agreement, the period during which vested awards may be exercised following a termination of employment are described below. If a participant’s employment is terminated for any reason other than as a result of death, disability, retirement or for cause, the vested portion of such award is exercisable for the lesser of the expiration date set forth in the applicable award agreement or 90 days after the date of termination of employment. In the event of the termination of participant’s employment for cause, all vested awards immediately expire. Upon a participant’s retirement, which shall be defined as employees who have reached age 60 with at least five years of service for employees and directors who have five years of employment service, any vested award shall expire on the earlier of the expiration date set forth in the award agreement for such award or one year after the date of retirement (three months in the case of incentive stock options). Upon the death or disability of a participant, any vested award shall expire on

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the earlier of the expiration date set forth in the award agreement or the one year anniversary date of the participant’s death or disability.

Federal Income Tax Consequences

     The following is a general summary as of the date of this proxy statement of the United States federal income tax consequences associated with the grant of awards under the 2005 Plan. The federal tax laws may change and the federal, state and local tax consequences for any participant will depend upon his or her individual circumstances. Also, this information may not be applicable to employees of foreign subsidiaries or to participants who are not residents of the United States. Participants have been and are encouraged to seek the advice of a qualified tax advisor regarding the tax consequences of participation in the 2005 Plan.

     Non-statutory Stock Options. A participant receiving a non-statutory stock option that has been issued with an exercise price not less than the fair market value of the Company’s common stock on the grant date will not recognize income and the Company will not be allowed a deduction at the time such an option is granted. When a participant exercises a non-statutory stock option, the difference between the option price and any higher market value of the stock on the date of exercise will be ordinary income to the participant and will be claimed as a deduction for federal income tax purposes by the Company. When a participant disposes of shares acquired by the exercise of the option, any amount received in excess of the fair market value of the shares on the date of exercise will be treated as short-term or long-term capital gain, depending upon whether the participant held the shares for more than one year following the exercise of the option. If the amount received is less than the fair market value of the shares on the date of exercise, the loss will be treated as short-term or long-term capital loss, depending upon whether the participant held the shares for more than one year following the exercise of the option.

     Incentive Stock Options. Incentive stock options granted under the 2005 Plan are intended to meet the definitional requirements of Section 422 of the Internal Revenue Code for “incentive stock options.” A participant receiving a grant of incentive stock options will not recognize income and the Company will not be allowed a deduction at the time such an option is granted. When a participant exercises an incentive stock option while employed by the Company or its subsidiary or within the three-month (one year for disability) period after termination of employment, no ordinary income will be recognized by the participant at that time (and no deduction will be allowed to the Company) but the excess of the fair market value of the shares acquired by such exercise over the option price will be taken into account in determining the participant’s alternative minimum taxable income for purposes of the federal alternative minimum tax applicable to individuals. If the shares acquired upon exercise are not disposed of until more than two years after the date of grant and one year after the date of transfer of the shares to the participant (statutory holding periods), the excess of the sale proceeds over the aggregate option price of such shares will be long-term capital gain, and the Company will not be entitled to any federal income tax deduction. Except in the event of death, if the shares are disposed of prior to the expiration of the statutory holding periods (a “Disqualifying Disposition”), the excess of the fair market value of such shares at the time of exercise over the aggregate option price (but not more than the gain on the disposition if the disposition is a transaction on which a loss, if sustained, would be recognized) will be ordinary income at the time of such Disqualifying Disposition (and the Company or its subsidiary will be entitled to a federal tax deduction in a like amount), and the balance of the gain, if any, will be capital gain (short-term or long-term depending upon whether the participant held the shares for more than one year following the exercise of the option). To the extent that the aggregate fair market value of stock (determined on the date of grant) with respect to which incentive options become exercisable for the first time during any calendar year exceeds $100,000, such excess options will be treated as non-statutory options.

     Payment Using Shares. If a participant pays the exercise price of a non-statutory or incentive stock option with previously-owned shares of the Company’s common stock and the transaction is not a Disqualifying Disposition, the shares received equal to the number of shares surrendered are treated as having been received in a tax-free exchange. The shares received in excess of the number surrendered will not be taxable if an incentive stock option is being exercised, but will be taxable as ordinary income to

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the extent of their fair market value if a non-statutory stock option is being exercised. The participant does not recognize income and the Company receives no deduction as a result of the tax-free portion of the exchange transaction. If the use of previously acquired incentive stock option shares to pay the exercise price of another incentive stock option constitutes a Disqualifying Disposition, the tax results are as described in the preceding paragraph. The income treatment will apply to the shares disposed of, but will not affect the favorable tax treatment of the shares received.

     Stock Appreciation Rights, Restricted Stock, Restricted Stock Units and Performance Awards. Unless a participant makes the election described below with respect to SARs, restricted stock, restricted stock units or performance awards granted under the 2005 Plan, a participant receiving a grant of such an incentive award will not recognize income and the Company will not be allowed a deduction at the time such award is granted. While an award remains unvested or otherwise subject to a substantial risk of forfeiture, a participant will recognize compensation income equal to the amount of any dividends received and the Company will be allowed a deduction in a like amount. When an award vests or otherwise ceases to be subject to a substantial risk of forfeiture, the excess of the fair market value of the award on the date of vesting or the cessation of the substantial risk of forfeiture over the amount paid, if any, by the participant for the award will be ordinary income to the participant and will be claimed as a deduction for federal income tax purposes by the Company. Upon disposition of the shares received, the gain or loss recognized by the participant will be treated as capital gain or loss, and the capital gain or loss will be short-term or long-term depending upon whether the participant held the shares for more than one year following the vesting or cessation of the substantial risk of forfeiture. However, by filing a Section 83(b) election with the Internal Revenue Service within 30 days after the date of grant, a participant’s ordinary income and commencement of holding period and the deduction will be determined as of the date of grant. In such a case, the amount of ordinary income recognized by such a participant and deductible by the Company will be equal to the excess of the fair market value of the award as of the date of grant over the amount paid, if any, by the participant for the award. If such election is made and a participant thereafter forfeits his or her award, no refund or deduction will be allowed for the amount previously included in such participant’s income.

     Certain Limitations on Deductibility of Executive Compensation. With certain exceptions, Section 162(m) of the Internal Revenue Code denies a deduction to a publicly held corporation for compensation paid to certain executive officers in excess of $1 million per executive per taxable year (including any deduction with respect to the exercise of a non-statutory stock option or stock appreciation right, or the disqualifying disposition of stock purchased pursuant to an incentive stock option). One such exception applies to certain performance-based compensation, provided that such compensation has been approved by stockholders in a separate vote and certain other requirements are met. If approved by our stockholders, we believe that the non-statutory stock options, stock appreciation rights, and other performance-based awards granted under the 2005 Plan should qualify for the performance-based compensation exception to Section 162(m).

     Requirements Regarding “Deferred Compensation.” Certain of the benefits under the 2005 Plan may constitute “deferred compensation” within the meaning of Section 409A of the Internal Revenue Code, a recently enacted provision governing “nonqualified deferred compensation plans.” Failure to comply with the requirements of the provisions of Section 409A regarding participant elections and the timing of payment distributions could result in the affected participants being required to recognize ordinary income for federal tax purposes earlier than expected, and to be subject to substantial penalties.

ERISA.

     The Company believes that the 2005 Plan is not subject to any of the provisions of the Employee Retirement Income Security Act of 1974 (ERISA). The 2005 Plan is not qualified under Section 401(a) of the Internal Revenue Code.

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Awards Granted under the 2005 Plan

     As of the date of this proxy statement, the Company estimates that approximately 100 officers, employees and directors were eligible to participate in the 2005 Plan. Because the Committee has the discretion to grant awards under the 2005 Plan, it is not possible as of the date of this proxy statement to determine future awards that will be received by executive officers, employees and directors under the 2005 Plan.

     The closing price of the Company’s common stock on the NYSE on March 16, 2005, was $5.68.

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ITEM 3 – APPROVAL OF INDEPENDENT ACCOUNTANTS

The audit committee has appointed PricewaterhouseCoopers LLP to serve as our independent accountants for 2005. Shareholders are being asked to ratify the appointment of PricewaterhouseCoopers LLP as the Company’s independent accountants for 2005. If the stockholders do not ratify the appointment, the audit committee will re-consider the appointment.

Representatives of PricewaterhouseCoopers LLP will be present at the annual meeting to answer appropriate questions. They will also have the opportunity to make a statement should they desire to do so.

The board of directors recommends a vote FOR the approval of PricewaterhouseCoopers LLP as our independent accountants for 2005.

Audit Committee Report

The following report does not constitute “soliciting material” and should not be deemed “filed” or incorporated by reference into any other Company filing under the Securities Act of 1933 or the Securities Exchange Act of 1934, except to the extent the Company specifically incorporates this report by reference in such filing.

The role of the audit committee is to assist the board of directors in its oversight of the Company’s financial reporting process, system of internal controls, audit processes and compliance with laws, regulations and Company policies, which duties are summarized on page 18 of this Proxy Statement.

The committee operates pursuant to a charter, which sets forth the duties and responsibilities of the committee. We amended our charter this year to include a provision regarding review of the report on internal controls over financial reporting and to make other revisions in the charter based on counsel’s recommendations as to best practices, a copy of which is attached hereto as Annex B. While the committee has certain duties as set forth in the charter, it is not the duty of the committee to plan or conduct audits or to determine that the Company’s financial statements and disclosures are complete and accurate and are in accordance with generally accepted accounting rules and regulations, as these functions are the responsibility of management and the independent accountants. In the performance of its oversight function, the committee addressed the following specific matters:

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Based on the review and discussion described in this report, the audit committee recommended that the audited financial statements for the year ended December 31, 2004, be included in Parker’s Annual Report on Form 10-K, for filing with the SEC.

Respectfully submitted,

Roger B. Plank, Chairman
R. Rudolph Reinfrank
John W. Gibson Jr.

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Audit and Non-Audit Fees

The following table presents fees for professional audit services rendered by PricewaterhouseCoopers LLP for the audit of the Company’s financial statements for the years ended December 31, 2004, and December 31, 2003, and fees billed for other services rendered by PricewaterhouseCoopers LLP during those periods.

*$1.1 million was attributable to the SOX internal control audit

100% of all audit fees and allowable non-audit fees were pre-approved by the audit committee in accordance with the previously approved policy.

Policy on Audit Committee Pre-Approval of Audit and Permissible Non-Audit Services of Independent Accountant

Consistent with SEC rules regarding auditor independence, the audit committee has responsibility for appointing, setting compensation and overseeing the work of the independent accountants. In response to these rules, the audit committee established a policy in April 2003, which was amended in January 2004, in connection with the pre-approval of all audit and permissible non-audit services provided by the independent accountants, which policy was attached to the 2004 Proxy Statement. Such services are pre-approved to a specific dollar threshold. All other permitted services, as well as proposed services exceeding such specified dollar thresholds, must be separately approved by the audit committee. In

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February 2005, the audit committee pre-approved the audit and non-audit fees for 2005 and separately authorized the chairman of the audit committee to approve non-material amounts in excess of the pre-approved amounts.

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EXECUTIVE COMPENSATION

The following table sets forth information concerning compensation for services rendered in all capacities to the Company by the chief executive officer and the four next most highly compensated executive officers of the Company (collectively, the “Named Executive Officers”), for the year ended December 31, 2004, for the year ended December 31, 2003, and for the year ended December 31, 2002.

SUMMARY COMPENSATION TABLE

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Aggregated Option/SAR Exercises in 2004 and 2004 Year End Option/SAR Values

     There were no options exercised in 2004 by the Named Executive Officers.

Option/SAR Grants in 2004

There were no options or SAR’s granted to executive officers during 2004.

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EQUITY COMPENSATION PLAN INFORMATION

The following table lists the equity compensation plan information for plans approved by security holders and the equity compensation plans not approved by security holders as of February 28, 2005:

(1) Includes 1,723,864 incentive stock options issued under the Parker Drilling 1997 Stock Plan (the “1997 Plan”), which ISO’s were approved by the security holders in 1997. The 1997 Plan itself was not approved by stockholders, but was adopted as a broad based plan pursuant to the NYSE regulations in existence at the time the 1997 Plan was adopted. Pursuant to the broad based requirements of the NYSE, more than 50% of the stock awards under the 1997 Plan were granted to non-officers. For a more complete description of the 1997 Plan see Note 4 to the financial statements in the Company’s Form 10-K dated March 16, 2005.

(2) 1,462,195 shares are available for issuance pursuant to the Parker Drilling Company and Subsidiaries 1991 Stock Grant Plan (the “1991 Plan”) and are limited to grants of restricted stock.

(3) Excludes 458,000 shares of restricted stock, of which 100,000 were granted under the 1991 Plan approved by shareholders.

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Compensation Committee Report On Executive Compensation

The following report and the performance graph included elsewhere in this proxy statement do not constitute soliciting material and should not be deemed filed or incorporated by reference into any other Company filing under the Securities Act of 1933 or the Securities Exchange Act of 1934, except to the extent the Company specifically incorporates this report or the performance graph by reference therein.

During 2004, the compensation committee of the Company’s board of directors consisted of R. Rudolph Reinfrank, John W. Gibson, Jr. and James E. Barnes. Mr. Barnes retired at the end of 2004 and was replaced by Mr. Robert E. McKee III in February 2005 by the board upon the recommendation of the governance committee. Mr. McKee did not participate in any of deliberations of the committee that are referenced in this report. The committee has the authority to obtain advice and assistance from internal or external legal, accounting or other advisors, including independent compensation consultants and other experts for information, surveys and other data as the committee deems appropriate. The Company provides funding for such services retained by the compensation committee.

Our committee has overall responsibility for the development and administration of the Company’s executive compensation program. Our committee’s principal duties are listed on page 19. The other specific duties and responsibilities of the committee are described in the compensation committee charter. The charter was revised this year to incorporate some revisions consistent with “best practices”. The revised charter was approved by the board and is attached as Annex C hereto and is also available on the Web site at http://www.parkerdrilling.com. at “About Us”, “Governance”.

The committee is furnishing the following report on executive compensation for 2004.

EXECUTIVE COMPENSATION PHILOSOPHY

The Company’s compensation philosophy for executive officers is designed to address the following:

EXECUTIVE COMPENSATION EVALUATION

When establishing salaries, bonus levels and stock-based awards, our committee considers the job functions, responsibilities and performance during the past year and the amount of compensation paid to officers in similar positions of comparable companies based on periodic reviews of data obtained from the compensation consultant retained by the committee, Pearl, Meyer & Partners (“PM & P”). The peer group that we have directed our consultant to utilize in these analyses was determined by our committee last year with input from management and our compensation consultant.

Our committee also makes discretionary and subjective determinations of appropriate compensation amounts to take into account the Company’s philosophy of compensating individuals for the success they achieve in managing specific functions or their performance in extraordinary circumstances, such as

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leadership during difficult market conditions, corporate reorganizations, contributions toward achievement of strategic objectives, etc.

In the case of executive officers other than Mr. Parker Jr., the committee places considerable weight on the recommendations of Mr. Parker Jr. and our compensation consultant.

COMPONENTS OF EXECUTIVE COMPENSATION

Base Pay. The committee believes that base salary plays a major role in attracting, motivating and retaining effective officers. Our committee reviews base salaries of officers annually and generally establishes a base salary at or near the average levels paid by other companies it reviews. While the committee considers other factors than peer company salaries, as previously noted, the committee recognizes that it must compete with peer companies in order to obtain and retain qualified personnel.

Short-term Bonus/Variable Pay. The Incentive Compensation Plan (“ICP”) covers all officers and certain key employees and is used each year to determine the amount of bonuses, subject to the achievement of certain financial and operating objectives provided in the ICP. For incentive bonuses to be earned, certain threshold levels of performance must be met. Up to 100% of an employees’ base pay can be earned if specified levels of performance are achieved.

For 2003, the compensation committee determined that any bonus to Mr. Parker Jr. and the other executive officers should be dependent on the Company being profitable and did not award any bonuses for these persons. This determination was based on the rationale that bonuses should be based on performance and that the base line for performance should be a minimum level of profitability, although we indicated in last year’s report that if the Company became profitable during the fourth quarter of 2004, we would consider paying these officers a bonus for 2004. In analyzing the performance of the Company for 2004, we reviewed the operating results and noted that the Company had achieved or made substantial progress toward achieving certain of its financial and operating goals through the efforts of senior management and other executive officers and key employees. In addition, we recognized that without considering certain non-routine items, the Company would have otherwise been profitable in the fourth quarter of 2004. The third independent criteria we considered was shareholder return as measured by stock price performance. The favorable stock price performance during 2004 exceeded the award threshold for the year. The bonus criteria were established in early 2004 and reviewed by PM & P, who after review of the award criteria, awards paid during the year in the industry and PM & P’s independent survey of offshore drillers, supported the payment of bonuses to the executive officers for the aforementioned reasons. These were also in the interest of maintaining competitive compensation levels of executive officers of the Company, each of which remain in the middle half of the market. Based on this analysis, we approved the payment of up to $1 million in bonuses to the executive officers and other key employees, which amount represents approximately 43% of the target bonus under the ICP, which is consistent with the ICP formula, with adjustments for non-routine items. With the exception of the bonus amount awarded to the CEO and the other executive officers, we deferred to senior management to distribute the balance of the $1 million to the other key employees as they deemed appropriate.

LONG-TERM INCENTIVE

As we reported last year, we retained PM & P to advise the committee on issues relating to long-term compensation for officers and key employees. Based on their recommendation, the committee recommended and the board has approved the 2005 Omnibus Stock Plan (“2005 Plan”), which upon approval by the shareholders will replace the company’s other stock plans and provides for the granting of stock options and stock grants, as well as other types of awards that are based on company performance and stock price performance. The board has approved the 2005 Plan be submitted to the shareholders for approval at the 2005 annual meeting. Until that plan has been presented to the shareholders, the company will not issue any further stock options, stock grants or other awards. See Item Two at page 26.

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STOCK OWNERSHIP GUIDELINES

A basic premise of the Company’s compensation policy is that significant equity participation creates a vital long-term partnership between management and other stockholders. We have utilized the Company’s stock plans to insure that the value of equity ownership is extended to officers and key employees of the Company.

Equity Compensation. PM&P advised the committee on equity compensation issues relating to the CEO, the other executive officers and key employees. PM&P reported to the board that the stock ownership of the CEO and executive officers was well within the middle half of the competitive market based upon a three year review of grant norms for the Company’s peer group. Taking into consideration the existing grants to officers and key employees and a comparison of equity compensation of peer companies, we agreed in principle with the stock grant recommendations of PM&P for the CEO and the executive officers, but deferred any approval of specific grants until the 2005 Plan was considered by the stockholders at the 2005 annual meeting. A discussion of the shares currently available under the company’s stock plans and the shares that will become available upon the approval of the 2005 Plan is discussed at Item Two on page 27.

PERQUISITES

We provide our executive officers with perquisites that we believe are reasonable and competitive and otherwise consistent with our overall compensation philosophy. These perquisites may include a car allowance, tax preparation services, club memberships, and home use of electronic products. In addition, senior executive officers may use company aircraft for personal travel on a limited basis.

CHIEF EXECUTIVE OFFICER

Mr. Parker Jr. received a base salary of $522,500 in 2004. Our committee believes that Mr. Parker Jr.’s contributions have been instrumental in the Company’s substantial progress toward achieving its strategic goals. Based on this evaluation and the report of the compensation consultant advising of the comparable salary levels for peer companies, we set Mr. Parker Jr.’s salary for 2005 at $550,000. This was the first salary increase for Mr. Parker Jr. since July 2001.

Mr. Parker Jr.’s annual bonus is based on the ICP provisions discussed under “Short Term Bonus/Variable Pay.” Based on the evaluation of the Company’s performance during 2004, as discussed under Short Term Bonus/Variable Pay above, and our opinion that Mr. Parker Jr. was instrumental in the Company’s achievements for 2004, we approved a bonus of $200,000 be granted to Mr. Parker Jr. for his performance in 2004.

Mr. Parker’s compensation is reviewed in light of comparables for his position and also is monitored for his base and total pay’s relationship to other executives. Based on the information provided by PM & P, we believe that there are no issues with regard to the internal equity of the CEO pay compared to other executives of the Company.

The committee also reviewed prior stock grants and option awards to Mr. Parker Jr. and utilized input from its compensation consultant for this aspect of Mr. Parker Jr.’s compensation review. As noted above, the committee determined that additional awards of restricted stock would be appropriate for Mr. Parker Jr., but a decision on specific grants was deferred until the stockholders consider the 2005 Plan at the 2005 annual meeting.

Mr. Parker Jr. also entered into an employment agreement effective in 2002 which is described on page 36.

OTHER EXECUTIVE OFFICERS

We also approved salary increases and bonuses for the other executive officers based on

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recommendations from PM & P as to the market for peer companies for each position and the recommendations of Mr. Parker Jr. regarding their performance in 2004.

REVIEW OF ALL COMPONENTS OF CEO AND OTHER EXECUTIVE OFFICER COMPENSATION

The compensation committee has reviewed all components of the CEO’s and other executive officers’ compensation, including salary, bonus, equity and long-term incentive compensation, accumulated realized and unrealized stock options and restricted stock gains, and the dollar value to the CEO and each executive and the incremental cost to the Company of all perquisites and other personal benefits. As part of our review of the overall compensation of the executive officers, we also review the actual projected payout obligations under the Company’s severance and change in control scenarios based on calculations performed by outside consultants. This calculation was performed in 2003 in connection with the execution of employment agreements by the executive officers. Due to recent changes in senior management and increase in stock price, we are in the process of updating the calculation, although we do not anticipate that these factors will result in a material change.

Based on this review, the committee finds the CEO’s and other executive officers’ total compensation, and, in the case of the severance and change in control scenarios, the potential payouts, in the aggregate to be reasonable and not excessive. It should be noted that when the committee considers any component of the CEO’s and the other executive officers’ total compensation, the aggregate amounts and mix of all the components, including accumulated, realized and unrealized, option and restricted stock gains are taken into consideration in the committee’s decisions.

In addition, it is the committee’s policy to make compensation decisions in a multi-step process. We initially receive a presentation by our compensation consultant who makes recommendations for the CEO based on peer companies. In the case of the other executive officers, the CEO makes his recommendations which are also considered by the committee, with input from our compensation consultant. After receiving this initial information, there is typically discussion among the members of the committee between meetings, which often prompts us to ask for additional information and to raise and discuss further questions. The discussion continues at a subsequent meeting, after which a vote is taken.

TAX LAW LIMITS ON EXECUTIVE COMPENSATION

Section 162(m) of the Internal Revenue Code limits tax deductions for certain executive compensation over $1 million. Certain types of compensation are deductible only if performance criteria are specified in detail, and stockholders have approved the compensation arrangements. The compensation committee has not yet adopted a formal policy with respect to qualifying compensation paid to its executive officers for an exemption from this limitation on deductibility imposed by this section. The committee anticipates that all compensation paid to its executive officers during 2004 will qualify for deductibility because no executive’s compensation is expected to exceed the dollar limitations of such provision.

Respectfully submitted,

R. Rudolph Reinfrank, Chairman
John W. Gibson Jr.

Compensation Committee Interlocks and Insider Participation

The compensation committee consisted of R. Rudolph Reinfrank, James E. Barnes and John W. Gibson, Jr. during 2004. None of the members of the compensation committee during 2004 or as of the date of this proxy statement is or has been an officer or employee of the Company.

During the majority of 2004, Mr. Gibson was President and CEO of Halliburton Energy Services, Inc. In

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2004, affiliates of HES paid Parker subsidiaries a total of $31,384,000 for drilling services.

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Performance Graph

The following performance graph compares cumulative total stockholder returns on the Company’s common stock to the Philadelphia Oil Service Index (“OSX”) and the S&P MidCap 400 stock index, calculated as of the end of each year beginning December 31, 2000, through December 31, 2000. The graph assumes $100 was invested on December 31, 2000, in the Company’s common stock and in each of the referenced indices.

PERFORMANCE DATA

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Employment and Severance Agreements

Each of the executive officers has an employment agreement with the Company, all of which became effective in 2002, with the exception of Mr. Potter’s which became effective in June 2003. The term of each agreement is for three years and each provides for automatic extensions of two years, with the exception of Mr. Graham, whose agreement is for two years with automatic two year extensions, Mr. Potter, whose agreement is for two years with automatic one year extensions and Mr. Parker Sr. whose agreement is for one year with automatic one year extensions. The employment agreements provide for the following benefits:

If the executive’s employment is terminated, including by reason of death or disability or retirement, but excluding termination for cause or termination as a result of the resignation of the executive, unless for good reason (based on definitions of cause and good reason in the agreements), the officer is entitled to receive:

In consideration for these benefits, the executive agrees to perform his customary duties set forth in the employment agreement, and further covenants not to solicit business except on behalf of the Company during his employment and to refrain from hiring employees of Company or to compete against the Company for a period of one year following his termination.

In addition to the above benefits, each employment agreement provides that in the event of a change in control, as defined in the agreement, the term of the employment agreement will be extended for three years. If the executive is terminated during this three-year period for any reason except for cause or the executive resigns during the first two years after the change in control for good reason, the Additional Benefit payable shall be based on three times salary and bonus, payable in a lump sum, and the Other Benefits shall also be provided for three years. In certain circumstances, the Company has agreed to make the executive whole for excise taxes that may apply with respect to payments made after a change

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in control.

Other Information

If you have questions or need more information about the annual meeting, write to:

Whether or not you plan to attend the annual meeting, please vote by telephone or Internet or mark, sign, date and promptly return your completed proxy in the enclosed envelope. The toll free number to vote by telephone is at no cost to you. No postage is required for mailing in the United States.

By order of the board of directors,

Ronald C. Potter
Corporate Secretary

Houston, Texas
March 22, 2005

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Annex A

CORPORATE GOVERNANCE PRINCIPLES

1. Director Qualifications

     The Board of Directors (“Board”) will have a majority of directors who meet the criteria for independence required by the New York Stock Exchange (the “NYSE”) and the Securities Exchange Act of 1934 (the “SEC Act”). The Corporate Governance Committee is responsible for reviewing with the Board, on an annual basis, the requisite skills and characteristics of new Board members as well as the composition of the Board as a whole. This assessment will include members’ qualification as independent in accordance with the NYSE and SEC Act, as well as consideration of diversity, age, skills, and experience in the context of the needs of the Board. Candidates for nominees for directorship may be made by any member of the Board and by any shareholder and referred to the Corporate Governance Committee for review in accordance with its charter and these principles. The invitation to join the Board should be extended on behalf of the Board by the Chairman of the Board.

     The Board presently has 8 members. It is the sense of the Board that the current size of the board is appropriate. However, the Board would be willing to increase the size in order to accommodate the availability of an outstanding candidate.

     When a director’s principal occupation or business associations changes substantially during his or her tenure as a director, the Corporate Governance Committee shall review the continued appropriateness of Board membership under the circumstances and make its recommendations to the Board. It is not the sense of the Board that in every instance a director who retires or changes the occupation or business associations he or she held when they became a Board member should necessarily leave the Board.

     Directors should advise the Chairman of the Board and the Chairman of the Corporate Governance Committee in advance of accepting an invitation to serve on another public company board.

     The Board does not believe it should establish term limits. While term limits could help insure that there are fresh ideas and viewpoints available to the Board, they hold the disadvantage of losing the contribution of directors who have been able to develop, over a period of time, increasing insight into the Company and its operations and, therefore, provide an increasing contribution to the Board as a whole. As an alternative to term limits, the Corporate Governance Committee will review each director’s continuation on the Board every three years. This will allow each director the opportunity to conveniently confirm his or her desire to continue as a member of the Board.

2. Director Responsibilities

     It is the general policy of the Company that all major decisions be considered by the Board as a whole. The basic responsibility of the directors is to exercise their business judgment to act in what they reasonably believe to be in the best interests of the Company and its shareholders. In discharging that obligation, directors should be entitled to rely on the honesty and integrity of the Company’s senior executives and its outside advisors and auditors. The directors shall also be entitled to have the Company purchase reasonable directors’ and officers’ liability insurance on their behalf, to the benefits of indemnification to the fullest extent permitted by law and the Company’s charter, by-laws and any indemnification agreements, and to exculpation as provided by state law and the Company’s charter.

     Directors are expected to attend Board meetings and meetings of committees on which they serve, and to spend the time needed and meet as frequently as necessary to properly discharge their responsibilities. Directors are also expected to attend the annual meeting of shareholders. Information and data that are important to the Board’s understanding of the business to be conducted at a Board or

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committee meeting should generally be distributed in writing to the directors before the meeting, and directors should review these materials in advance of the meeting.

     The Board has no policy with respect to the separation of the offices of Chairman and the Chief Executive Officer (“CEO”). The Board believes that this issue is part of the succession planning process and that it is in the best interests of the Company for the Board to make a determination when it elects a new chief executive officer.

     The Chairman and CEO will establish the agenda for each Board meeting with the understanding that the items necessary for the Board to perform its advisory and monitoring functions be brought to it periodically for review and/or approval. The Board will review the Company’s long-term strategic plans and the principal issues that the Company will face in the future during at least one Board meeting each year. Each Board member is free to suggest the inclusion of items on the agenda. Each Board member is free to raise at any Board meeting subjects that are not on the agenda for that meeting.

     The non-management directors will meet in executive session on a regular basis four times a year. The directors have determined that the Chairman of the Corporate Governance Committee (the “Presiding Director”) will preside at these meetings and be disclosed in the annual proxy statement as required by the NYSE. Any contract with present or former directors or officers of the Company shall be approved by the Corporate Governance Committee regardless of quantitative materiality.

     The Chairman and CEO are responsible for establishing effective communications with the Company’s shareholders, customers, company associates, communities, suppliers, creditors, governments and corporate partners. It is the Company’s policy that management speaks for the Company. Individual Board members may, from time to time, meet or otherwise communicate with various constituencies that are involved with the Company. But it is expected that Board members would do this with the knowledge of the management and, absent unusual circumstances or as contemplated by the committee charters, only at the request of management.

3. Board Committees

     The Board will have at all times an Audit Committee, a Compensation Committee and a Corporate Governance Committee. All of the members of these committees will be independent directors under the criteria established by the NYSE and SEC Act. Committee members will be appointed by the Board upon recommendation of any member of the board and approval thereof by the Corporate Governance Committee.

     Each committee will have its own charter. The charters will set forth the purposes, goals and responsibilities of the committees as well as qualifications for committee membership, procedures for committee member appointment and removal, committee structure and operations and committee reporting to the Board. The charters will also provide that each committee will annually evaluate its performance.

     The Chairman of each committee, in consultation with the committee members, will determine the frequency and length of the committee meetings consistent with any requirements set forth in the committee’s charter. The Chairman of each committee, in consultation with the appropriate members of the committee and management, will develop the committee’s agenda. At the beginning of the year each committee will establish a schedule of agenda subjects to be discussed during the year (to the degree these can be foreseen). The schedule for each committee will be furnished to all directors.

     The Board and each committee have the power to hire independent legal, financial or other advisors as they may deem necessary, without consulting or obtaining the approval of any officer of the Company in advance.

     The Board may, from time to time, establish or maintain additional committees as necessary or appropriate.

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4. Director Access to Officers and Employees

     Directors have full and free access to officers and employees of the Company. Any meetings or contacts that a director wishes to initiate may be arranged through the CEO or the Corporate Secretary or directly by the director. The directors will use their judgment to ensure that any such contact is not disruptive to the business operations of the Company and will, to the extent not inappropriate, copy the CEO on any written communications between a director and an officer or employee of the Company.

     The Board welcomes regular attendance at each Board meeting of senior officers of the Company. If the CEO wishes to have additional Company personnel attendees on a regular basis, this suggestion should be brought to the Board for approval.

5. Director Compensation

     The form and amount of director compensation will be annually reviewed and recommended by the Corporate Governance Committee and approved by the Board. The Corporate Governance Committee will consider that directors’ independence may be jeopardized if director compensation and perquisites exceed customary levels.

6. Director Orientation and Continuing Education

     All new directors shall be provided with a director orientation packet that describes the various operations of the Company, the officers and their respective duties and other information to adequately inform the director of the nature of the Company’s business. The Company will make management available to new board members and existing board members at corporate headquarters in order to receive presentations by senior management to familiarize the directors with the Company’s strategic plans, its significant financial, accounting and risk management issues, its compliance programs, its Code of Corporate Conduct, its principal officers, and its internal and independent auditors.

     Board members are encouraged to attend conferences and other programs that will increase their knowledge of board functions and duties as well as other board responsibilities. The Company will reimburse each board member for attending one conference or program each year.

     It is the sense of the Board that off-site board retreats may be beneficial from time to time to address strategic planning and other critical decisions to be made by the Board.

7. CEO Evaluation and Management Succession

     The Compensation Committee is responsible for setting annual and long-term performance goals for the CEO and will conduct an annual review of the CEO’s performance against such goals, as set forth in its charter. The Compensation Committee shall meet annually with the CEO to receive his or her recommendations concerning such goals. Both the goals and the evaluation are then submitted for consideration by the independent directors of the Board at an executive session of the independent directors.

     The Corporate Governance Committee should make an annual report to the Board on succession planning, which shall include its recommendations on development of potential candidates so that the Company is adequately prepared in the event that a successor is needed. The entire Board will work with the Corporate Governance Committee to evaluate development plans for potential successors to the CEO. The CEO should at all times make available his or her recommendations and evaluations of potential successors, along with a review of any development plans recommended for such individuals.

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     The Board of Directors will conduct an annual self-evaluation to determine whether the Board and each committee are functioning effectively. The Corporate Governance Committee will receive comments from all directors and report annually to the Board with an assessment of the Board’s performance. The assessment will focus on the Board’s contribution to the Company and specifically focus on areas in which the Board or management believes that the Board could improve.

     Anyone who has a concern about the Company’s accounting, internal accounting controls or auditing matters or other irregularities, may communicate that concern directly to the Director of Internal Audit or the General Counsel, or to a third party hotline established by the Company for this purpose, the contact information for each to be provided on the Company’s website. Such communications may be confidential and/or anonymous. Concerns relating to accounting, internal controls, or auditing shall be reviewed by the Director of Internal Audit and/or General Counsel and, if credible and if confirmed would warrant remedial or disciplinary action, will be reported to the Audit Committee and addressed by the Company in the same way as other concerns, including the retention of outside advisors or counsel to investigate or advise on such concerns.

     Anyone, including shareholders of the Company, may communicate with the Board or the non-management directors about officer conduct or other concerns or matters by submitting such concerns or matters in writing to the Presiding Director at the special address published on the Company’s website. Such communications may be confidential and/or anonymous. The concerns or matters will be reviewed by the Presiding Director pursuant to the criteria approved by a majority of the independent directors. Any matter which falls within the criteria approved by the independent directors shall be presented to the Audit Committee or the full Board and addressed in the same way as other concerns, including the retention of outside advisors or counsel to investigate or advise on such matters or concerns.

     The Company’s policies prohibit any retaliation or taking any adverse action against anyone for raising or helping to resolve reports of misconduct or ethical violations.

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Annex B

CHARTER OF THE AUDIT
COMMITTEE OF THE BOARD OF DIRECTORS

Purpose

The Audit Committee is appointed by the Board to assist the Board in overseeing (1) the integrity of the (a) process involved in the preparation of the financial statements and (b) auditing of the financial statements of the Company, (2) the independent accountant’s qualifications and independence, (3) the performance of the Company’s internal audit function and independent accountants, and (4) the compliance by the Company with legal and regulatory requirements.

The Audit Committee shall prepare the report required by the rules of the Securities and Exchange Commission (the “Commission”) to be included in the Company’s annual proxy statement. The Audit Committee shall perform an annual self assessment at the end of each year.

Committee Membership

The Audit Committee shall consist of no fewer than three members. The members of the Audit Committee shall meet the independence and experience requirements of the New York Stock Exchange and of the Securities Exchange Act of 1934 (the “Exchange Act”) and the rules and regulations of the Commission. At least one member of the Audit Committee shall be an audit committee financial expert as defined by the Commission or the Company shall disclose in the Form 10-K why it does not have an audit committee financial expert. The members of the Audit Committee shall be appointed by the Board on the recommendation of the Corporate Governance Committee. Audit Committee members may be replaced by the Board.

Meetings

The Audit Committee shall meet as often as it determines, but not less frequently than quarterly. At least two members shall be present at each meeting of the Audit Committee to establish a quorum. The Audit Committee shall meet periodically in separate executive sessions with management (including the CEO, COO, CFO and General Counsel), the internal auditors and the independent accountants and have such other direct and independent interaction with such persons from time to time as the members of the Audit Committee deem appropriate. The Audit Committee may request any officer or employee of the Company or the Company’s outside counsel or independent accountant to attend a meeting of the Committee or to meet with any members of, or consultants to, the Committee. The meetings of the Audit Committee are open to all directors.

Committee Authority and Responsibilities

The Audit Committee shall have the sole authority to appoint or replace the independent accountant (subject, if applicable, to shareholder ratification). The Audit Committee shall be directly responsible for the compensation and oversight of the work of the independent accountant (including resolution of disagreements between management and the independent accountant regarding financial reporting) for the purpose of preparing or issuing an audit report or related work. The independent accountant shall report directly to the Audit Committee.

The Audit Committee shall pre-approve all auditing services, internal control-related services and permitted non-audit services (including the fees and terms thereof) to be performed for the Company by its independent accountant, subject to the de minimus exceptions for non-audit services described in Section 10A(i)(1)(B) of the Exchange Act which are approved by the Audit Committee prior to year end. The Audit Committee shall have the authority, to the extent it deems necessary or appropriate, to retain independent legal, accounting or other advisors. The Company shall provide for appropriate funding, as determined by the Audit Committee, for payment of compensation to the independent accountant for the purpose of rendering or issuing an audit report and to any advisors employed by the Audit Committee.

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The Audit Committee shall make regular reports to the Board. The Audit Committee shall review and reassess the adequacy of this Charter at the end of each year and recommend any proposed changes to the Board for approval, including consideration of changes that are necessary as a result of new laws or regulations.

The Audit Committee, to the extent it deems necessary or appropriate, shall:

Financial Statement and Disclosure Matters

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Oversight of the Company’s Relationship with the Independent Accountant

16. Establish a policy for hiring of employees or former employees of the independent accountant.

Oversight of the Company’s Internal Audit Function

17. Review the appointment and replacement of the director of internal auditing.

Compliance Oversight Responsibilities

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Limitation of Audit Committee’s Role

While the Audit Committee has the responsibilities and powers set forth in this Charter, it is not the duty of the Audit Committee to plan or conduct audits or to determine that the Company’s financial statements and disclosures are complete and accurate and are in accordance with generally accepted accounting principles and applicable rules and regulations. These are the responsibilities of management and the independent accountant. In carrying out its oversight function each member of the Audit Committee shall be entitled to rely in good faith on information, opinions, reports or statements, including financial statements and other financial data, prepared and presented to the Audit Committee by management and outside consultants.

Audit Committee Powers

The Committee shall also have the following powers:

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Annex C

COMPENSATION COMMITTEE CHARTER

Purpose

The Compensation Committee is appointed by the Board to discharge the Board’s responsibilities relating to compensation of the Company’s executive officers. Except as otherwise required by applicable laws, regulations or listing standards, all major decisions are considered by the Board of Directors as a whole. The Committee has overall responsibility for evaluating and recommending the compensation plans, policies and programs of the executive officers of the Company.

The Compensation Committee is also responsible for producing an annual report on executive officer compensation for inclusion in the Company’s proxy statement that complies with the rules and regulations of the Securities and Exchange Commission.

Committee Membership

The Compensation Committee shall consist of no fewer than three members. The members of the Compensation Committee shall meet the independence requirements of the New York Stock Exchange. All committee members shall also be “non-employee directors” as defined by Rule 16b-3 under the Securities Exchange Act of 1934 and “outside directors” as defined by Section 162(m) of the Internal Revenue Code.

The members of the Compensation Committee shall be appointed by the Board on the recommendation of the Corporate Governance Committee. Compensation Committee members may be replaced by the Board in its discretion.

Meetings

The Compensation Committee shall meet as often as its members deem necessary to perform the Committee’s responsibilities. The meetings of the Compensation Committee are open to all directors.

Committee Authority and Responsibilities

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Annex D

CORPORATE GOVERNANCE
COMMITTEE CHARTER

Purpose

The purpose of the Corporate Governance Committee shall be to assist the Board (1) in identifying qualified individuals which have been proposed by Board members, by independent search firms, by shareholders or by others to become Board members, (2) in determining the director nominees to stand for election by the shareholders; (3) in developing and implementing the Corporate Governance Principles applicable to the Company; (4) in its annual review of the Board’s performance and in overseeing the evaluation of management; and (5) in selecting director nominees for each committee.

Committee Membership

The Corporate Governance Committee shall consist of no fewer than three members. The members of the Corporate Governance Committee shall meet the independence requirements of the New York Stock Exchange.

The members of the Corporate Governance Committee shall be appointed and replaced by the Board.

Meetings

The Governance Committee shall meet as often as it determines, but not less frequently than twice a year. At least two members shall be present at each meeting of the Governance Committee to establish a quorum. The Governance Committee may request any director, officer or employee of the Company or the Company’s outside counsel or other consultants of the Company to attend a meeting of the Committee or to meet with any members of, or consultants to, the Committee. The meetings of the Governance Committee are open to all directors.

Committee Authority and Responsibilities

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Governance Committee Powers

The Committee shall also have the following powers:

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Annex E

PARKER DRILLING COMPANY
2005 LONG-TERM INCENTIVE PLAN

TABLE OF CONTENTS

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PARKER DRILLING COMPANY
2005 LONG-TERM INCENTIVE PLAN

SECTION 1

GENERAL PROVISIONS RELATING TO

1.1 Establishment and Purpose

     Parker Drilling Company (the “Company”), hereby establishes the Parker Drilling Company 2005 Long-Term Incentive Plan (the “Plan”), effective as of March 18, 2005 (the “Effective Date”) for the benefit of the Company and the participants in the Plan.

     The purpose of the Plan is to foster and promote the long-term financial success of the Company and to increase shareholder value by: (a) encouraging the commitment of selected key Employees, Consultants and Outside Directors, (b) motivating superior performance of key Employees, Consultants and Outside Directors by means of long-term performance related incentives, (c) encouraging and providing key Employees, Consultants and Outside Directors with a program for obtaining ownership interests in the Company which link and align their personal interests to those of the Company’s shareholders, (d) attracting and retaining key Employees, Consultants and Outside Directors by providing competitive compensation opportunities, and (e) enabling key Employees, Consultants and Outside Directors to share in the long-term growth and success of the Company.

     The Plan provides for payment of various forms of compensation. It is not intended to be a plan that is subject to the Employee Retirement Income Security Act of 1974, as amended (ERISA). The Plan will be interpreted, construed and administered consistent with its status as a plan that is not subject to ERISA.

     The Plan will remain in effect, subject to the right of the Board to amend or terminate the Plan at any time pursuant to Section 8.7, until the earlier of the date that (a) all Shares subject to the Plan have been purchased or acquired according to its provisions or (b) the Plan terminates pursuant to Section 8.18. However, in no event may an Incentive Stock Option be granted under the Plan after the expiration of ten (10) years from the Effective Date.

1.2 Definitions

     The following terms shall have the meanings set forth below:

     (a) Affiliate. This term means an “affiliate” of the Company, as such term is described in Rule 12b-2 under the Exchange Act.

     (b) Authorized Officer. The CEO or any other senior officer of the Company to whom the CEO has delegated the authority to execute any Incentive Agreement for and on behalf of the Company. No officer or director shall be an Authorized Officer with respect to any Incentive Agreement for himself.

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     (c) Board. The Board of Directors of the Company.

     (d) Cause. When used in connection with the termination of a Grantee’s Employment, shall mean the termination of the Grantee’s Employment by the Company or any Subsidiary by reason of:

     (i) the conviction of the Grantee by a court of competent jurisdiction as to which no further appeal can be taken of a crime involving moral turpitude or a felony or entering the plea of nolo contendere to such crime by Grantee;

     (ii) the commission by the Grantee of a material act of fraud upon the Company or any Affiliate;

     (iii) the material misappropriation by the Grantee of any funds or other property of the Company or any Affiliate;

     (iv) the knowing engagement by the Grantee without the written approval of the Board, in any material activity which directly competes with the business of the Company or any Affiliate, or which would directly result in a material injury to the business or reputation of the Company or any Affiliate; or

     (v) with respect to any Grantee who is an Employee (A) a material breach by Executive during his employment period of any of the restrictive covenants set out in his employment agreement with the Company or any Affiliate, if applicable, or (B) the willful, material and repeated nonperformance of Employee’s duties to the Company or any Affiliate (other than by reason of Employee’s illness or incapacity), but Cause shall not exist under this clause; or (v)(A) or (v)(B) until after written notice from the Board has been given to Employee of such material breach or nonperformance (which notice specifically identifies the manner and sets forth specific facts, circumstances and examples in which the Board believes that Employee has breached the Agreement or not substantially performed his duties) and Employee has failed to cure such alleged breach or nonperformance within the time period set by the Board, but in no event less than thirty (30) business days after his receipt of such notice; and, for purposes of this clause (v), no act or failure to act on Employee’s part shall be deemed “willful” unless it is done or omitted by Employee not in good faith and without his reasonable belief that such action or omission was in the best interest of the Company (assuming disclosure of the pertinent facts, any action or omission by Employee after consultation with, and in accordance with the advice of, legal counsel reasonably acceptable to the Company shall be deemed to have been taken in good faith and to not be willful for purposes of this definition of “Cause”).

     (e) CEO. The Chief Executive Officer of the Company.

     (f) Change in Control. Any of the events described in and subject to Section 7.8.

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     (g) Code. The Internal Revenue Code of 1986, as amended, and the regulations and other authority promulgated thereunder by the appropriate governmental authority. References herein to any provision of the Code shall refer to any successor provision thereto.

     (h) Committee. A committee appointed by the Board to administer the Plan. While the Company is a Publicly Held Corporation, the Plan shall be administered by a Committee appointed by the Board consisting of not less than two directors who fulfill the “nonemployee director” requirements of Rule 16b-3 under the Exchange Act and the “outside director” requirements of Code Section 162(m). In either case, the Committee may be the Compensation Committee of the Board, the Governance Committee of the Board, or any subcommittee of such committee, provided that, in all events, the members of the Committee for purposes of the Plan satisfy the requirements of the previous provisions of this paragraph.

     The Board shall have the power to fill vacancies on the Committee arising by resignation, death, removal or otherwise. The Board, in its sole discretion, may bifurcate the powers and duties of the Committee among one or more separate committees, or retain all powers and duties of the Committee in a single Committee. The members of the Committee shall serve at the discretion of the Board.

     Notwithstanding the preceding paragraphs of this Section 1.2(h), the term “Committee” as used in the Plan with respect to any Incentive Award for an Outside Director shall refer to the entire Board. In the case of an Incentive Award for an Outside Director, the Board shall have all the powers and responsibilities of the Committee hereunder as to such Incentive Award, and any actions as to such Incentive Award may be acted upon only by the Board (unless it otherwise designates in its discretion). When the Board exercises its authority to act in the capacity as the Committee hereunder with respect to an Incentive Award for an Outside Director, it shall so designate with respect to any action that it undertakes in its capacity as the Committee.

     (i) Common Stock. The common stock of the Company, $.1666 par value per share, and any class of common stock into which such common shares may hereafter be converted, reclassified or recapitalized.

     (j) Company. Parker Drilling Company and any successor in interest thereto.

     (k) Consultant. An independent agent, consultant, attorney, an individual who has agreed to become an Employee within the next six months, or any other individual who is not an Outside Director or employee of the Company (or any Parent or Subsidiary) and who, in the opinion of the Committee, is in a position to contribute to the growth or financial success of the Company (or any Parent or Subsidiary), (ii) is a natural person and (iii) provides bona fide services to the Company (or any Parent or Subsidiary), which services are not in connection with the offer or sale of securities in a capital raising transaction, and do not directly or indirectly promote or maintain a market for the Company’s securities.

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     (l) Covered Employee. A named executive officer who is one of the group of covered employees, as defined in Code Section 162(m) and Treasury Regulation § 1.162-27(c) (or its successor), during any period that the Company is a Publicly Held Corporation.

     (m) Disability. As determined by the Committee in its discretion exercised in good faith, a physical or mental condition of the Grantee that would entitle him to payment of disability income payments under the Company’s long term disability insurance policy or plan for employees, as then effective, if any; or in the event that the Grantee is not covered, for whatever reason, under the Company’s long-term disability insurance policy or plan, “Disability” means a permanent and total disability as defined in Code Section 22(e)(3). A determination of Disability may be made by a physician selected or approved by the Committee and, in this respect, the Grantee shall submit to any reasonable examination(s) required by such physician upon request.

     (n) Employee. Any employee of the Company (or any Parent or Subsidiary) within the meaning of Code Section 3401(c) who, in the opinion of the Committee, is in a position to contribute to the growth, development or financial success of the Company (or any Parent or Subsidiary), including, without limitation, officers who are members of the Board.

     (o) Employment. Employment means that the individual is employed as an Employee, or engaged as a Consultant or Outside Director, by the Company or any Parent or Subsidiary, or by any corporation issuing or assuming an Incentive Award in any transaction described in Code Section 424(a), or by a parent corporation or a subsidiary corporation of such corporation issuing or assuming such Incentive Award, as the parent-subsidiary relationship shall be determined at the time of the corporate action described in Code Section 424(a). In this regard, neither the transfer of a Grantee from Employment by the Company to Employment by any Parent or Subsidiary, nor the transfer of a Grantee from Employment by any Parent or Subsidiary to Employment by the Company, shall be deemed to be a termination of Employment of the Grantee. Moreover, the Employment of a Grantee shall not be deemed to have been terminated because of an approved leave of absence from active Employment on account of temporary illness, authorized vacation or granted for reasons of professional advancement, education, or health, or during any period required to be treated as a leave of absence by virtue of any applicable statute, Company personnel policy or written agreement. All determinations regarding Employment, and the termination of Employment hereunder, shall be made by the Committee.

     The term “Employment” for all purposes of the Plan shall include (i) active performance of agreed services by a Consultant for the Company (or any Parent or Subsidiary) and (ii) current membership on the Board by an Outside Director.

     (p) Exchange Act. The Securities Exchange Act of 1934, as amended.

     (q) Fair Market Value. While the Company is a Publicly Held Corporation, the Fair Market Value of one Share of Common Stock on the date in question is deemed

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to be (i) the average of the high and low prices of a Share on the date as of which Fair Market Value is to be determined, or if no such sales were made on such date, the closing sales price on the immediately preceding business day of a Share as reported on the New York Stock Exchange or other principal securities exchange on which Shares are then listed or admitted to trading, or (ii) the closing sales price for a Share on the date of grant as quoted on the National Association of Securities Dealers Automated Quotation System (“NASDAQ”), or (iii) if not quoted on NASDAQ, the average of the closing bid and asked prices for a Share as quoted by the National Quotation Bureau’s “Pink Sheets” or the National Association of Securities Dealers’ OTC Bulletin Board System. If there was no public trade of Common Stock on the date in question, Fair Market Value shall be determined by reference to the last preceding date on which such a trade was so reported.

     If the Company is not a Publicly Held Corporation at the time a determination of the Fair Market Value of the Common Stock is required to be made hereunder, the determination of Fair Market Value for purposes of the Plan shall be made by the Committee in its sole and absolute discretion. In this respect, the Committee may rely on such financial data, appraisals, valuations, experts, and other sources as, in its sole and absolute discretion, it deems advisable under the circumstances.

     (r) Grantee. Any Employee, Consultant or Outside Director who is granted an Incentive Award under the Plan.

     (s) Immediate Family. With respect to a Grantee, the Grantee’s child, stepchild, grandchild, parent, stepparent, grandparent, spouse, former spouse, sibling, mother-in-law, father-in-law, son-in-law, daughter-in-law, brother-in-law, or sister-in-law, including adoptive relationships.

     (t) Incentive Award or Award. A grant of an award under the Plan to a Grantee, including any Non-statutory Stock Option, Incentive Stock Option, Stock Appreciation Right (SAR), Restricted Stock Award, Performance-Based Stock-Based Award, Performance-Based Cash Award, or Other Stock-Based Award, as well as any Supplemental Payment with respect thereto.

     (u) Incentive Agreement. The written agreement entered into between the Company and the Grantee setting forth the terms and conditions pursuant to which an Incentive Award is granted under the Plan, as such agreement is further defined in Section 7.1(a).

     (v) Incentive Stock Option or ISO. A Stock Option granted by the Committee to an Employee under Section 2 which is designated by the Committee as an Incentive Stock Option and is intended to qualify as an Incentive Stock Option under Code Section 422.

     (w) Independent SAR or SAR. A Stock Appreciation Right described in Section 2.4.

     (x) Insider. If the Company is a Publicly Held Corporation, an individual who is, on the relevant date, an officer, director or ten percent (10%) beneficial owner of

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any class of the Company’s equity securities that is registered pursuant to Section 12 of the Exchange Act, all as defined under Section 16 of the Exchange Act.

     (y) Non-statutory Stock Option. A Stock Option granted by the Committee to a Grantee under Section 2 that is not designated by the Committee as an Incentive Stock Option.

     (z) Option Price. The exercise price at which a Share may be purchased by the Grantee of a Stock Option.

     (aa) Other Stock-Based Award. An award granted by the Committee to a Grantee under Section 4.1 that is valued in whole or in part by reference to, or is otherwise based upon, Common Stock.

     (bb) Outside Director. A member of the Board who is not at the time of grant of an Incentive Award, an employee of the Company or any Parent or Subsidiary.

     (cc) Parent. Any corporation (whether now or hereafter existing) which constitutes a “parent” of the Company, as defined in Code Section 424(e).

     (dd) Performance-Based Award. A grant of an Award under the Plan pursuant to Section 6 that is either a Performance-Based Stock-Based Award or a Performance-Based Cash Award.

     (ee) Performance-Based Cash Award. An Incentive Award granted to a Grantee pursuant to Section 5 of the Plan, that provides for a cash payment subject to a risk of forfeiture if the specified Performance criteria are not met.

     (ff) Performance-Based Exception. The performance-based exception from the tax deductibility limitations of Code Section 162(m), as prescribed in Code Section 162(m)(4)(C) and Treasury Regulation § 1.162-27(e) (or its successor), which is applicable during such period that the Company is a Publicly Held Corporation.

     (gg) Performance-Based Stock-Based Award. An Incentive Award under the Plan to a Grantee that provides for a payment in cash or Shares, subject to a risk of forfeiture if the specified Performance Criteria are not met.

     (hh) Performance Criteria. The business criteria that are specified by the Committee pursuant to Section 6 for an Incentive Award that is intended to qualify for the Performance-Based Exception; the satisfaction of such business criteria during the Performance Period being required for the grant and/or vesting of the particular Incentive Award to occur, as specified in the Incentive Agreement.

     (ii) Performance Period. A period of time determined by the Committee over which performance is measured for the purpose of determining a Grantee’s right to and the payment value of any Performance-Based Stock-Based Award, Performance-Based Cash Award or Other Stock-Based Award that is intended to qualify for the Performance-Based Exception.

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     (jj) Performance Share. An Incentive Award granted by the Committee to the Grantee as described in Section 4.1.

     (kk) Phantom Share. An Incentive Award granted by the Committee to the Grantee as described in Section 4.1.

     (ll) Plan. The Parker Drilling Company 2005 Long-Term Incentive Plan, as set forth herein and as it may be amended from time to time.

     (mm) Plan Year. A calendar year commencing on January 1 and ending on December 31, except the first Plan Year commencing on April 27, 2005 and ending on December 31, 2005.

     (nn) Publicly Held Corporation. A corporation issuing any class of common equity securities required to be registered under Section 12 of the Exchange Act.

     (oo) Restricted Stock. Shares of Common Stock issued or transferred to a Grantee pursuant to Section 3.

     (pp) Restricted Stock Award. An authorization by the Committee to issue or transfer Restricted Stock to a Grantee pursuant to Section 3.

     (qq) Restricted Stock Unit. An Incentive Award granted by the Committee to the Grantee as described in Section 4.1.

     (rr) Restriction Period. The period of time determined by the Committee and set forth in the Incentive Agreement during which the transfer of Restricted Stock by the Grantee is restricted.

     (ss) Retirement. The voluntary termination of Employment from the Company and any Parent or Subsidiary constituting retirement for age (i) on any date after the Employee attains the normal retirement age of 60 years and has completed at least five (5) years of Employment service with the Company, or in the case of a director, has completed at least five (5) years of service as a member of the Board regardless of age, or (ii) an earlier retirement date or such other date as may be designated by the Committee in the Employee’s individual Incentive Agreement as constituting retirement for age.

     (tt) Share. A share of the Common Stock of the Company.

     (uu) Share Pool. The number of shares authorized for issuance under Section 1.4, as adjusted for awards and payouts under Section 1.5 and as adjusted for changes in corporate capitalization under Section 7.6.

     (vv) Spread. The difference between the exercise price per Share specified in a SAR grant and the Fair Market Value of a Share on the date of exercise of the SAR.

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     (ww) Stock Appreciation Right or SAR. A Stock Appreciation Right as described in Section 2.4.

     (xx) Stock Option or Option. Pursuant to Section 2, (i) an Incentive Stock Option granted to an Employee or (ii) a Non-statutory Stock Option granted to an Employee, Consultant or Outside Director, which Option provides the Grantee with the right to purchase Shares of Common Stock upon specified terms. In accordance with Code Section 422, only an Employee may be granted an Incentive Stock Option.

     (yy) Subsidiary. Any company (whether a corporation, partnership, joint venture or other form of entity) in which the Company or a corporation in which the Company owns a majority of the shares of capital stock, directly or indirectly, owns a greater than 50% equity interest, except that with respect to the issuance of Incentive Stock Options, the term “Subsidiary” shall have the same meaning as the term “subsidiary corporation” as defined in Code Section 424(f) as required by Code Section 422.