Grey Wolf Increases Credit Facility

Grey Wolf, Inc. has amended its $50 million credit facility with its existing lender to increase the amount available under the facility to $75 million. The term of the facility has also been extended to January 2006 from January 2003. The Company currently has no borrowings outstanding under the new facility.

Other terms of the credit facility are unchanged and include periodic interest payments at a floating rate based upon the Company's debt service coverage ratio within a range of either the London Interbank Offering Rate (LIBOR) plus 1.75% to 3.5% or prime plus .25% to 1.5%. In addition, the credit facility contains certain affirmative and negative covenants including a minimum appraisal value of the Company's drilling rigs and related equipment plus certain financial covenants which take effect if the Company's cash on hand and borrowing capacity under the new credit facility falls below $25 million. Substantially all of the Company's assets, including its drilling rigs and related drilling equipment, are pledged as collateral under the credit facility. The Company, however, retains the option, subject to a minimum appraisal value, under the credit facility to extract $75 million of the equipment out of the collateral pool for other purposes.

Mr. Thomas P. Richards, Chairman, President and Chief Executive Officer of Grey Wolf, said "We are pleased to be continuing our relationship with our valued business partner. The increase and extension of the facility adds to our substantial financial reserves and financial flexibility."