SEVENTH AMENDMENT TO REVOLVING CREDIT AND SECURITY AGREEMENT

Exhibit 10.1

SEVENTH AMENDMENT TO

REVOLVING CREDIT AND SECURITY AGREEMENT

THIS SEVENTH AMENDMENT TO REVOLVING CREDIT AND SECURITY AGREEMENT (this “ Amendment ”) is made and entered into effective as of the 30 ^th day of September, 2008 (the “ Effective Date ”) by and among UNION DRILLING, INC., a corporation organized under the laws of the State of Delaware (“ Union Drilling ” and/or “ Borrower ”), PNC BANK, NATIONAL ASSOCIATION (“ PNC ”), as agent for the financial institutions (collectively “ Lenders ” and each a “ Lender ”), which are now or which hereafter become a party to the Credit Agreement (defined below) (PNC, in such capacity, “ Agent ”), and Lenders.

PRELIMINARY STATEMENTS

A Borrower, Lenders and Agent are parties to that certain Revolving Credit and Security Agreement dated March 31, 2005 (as amended, supplemented or modified from time to time, and to the date hereof, the “ Credit Agreement ”); and

B Borrower, Lenders and Agent desire to amend the Credit Agreement and the Other Documents, and Agent and Lenders are willing to do so subject to the terms and conditions set forth herein.

NOW, THEREFORE , in consideration of the premises herein contained and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties, intending to be legally bound, agree as follows:

ARTICLE I

DEFINITIONS

1.01 Capitalized terms used in this Amendment are defined in the Credit Agreement, as amended hereby, unless otherwise stated.

ARTICLE II

AMENDMENT

The Credit Agreement is, effective as of the date hereof and subject to satisfaction of the conditions precedent set forth in Section 3.01 of this Amendment, hereby amended as follows:

2.01 Amendment to Section 1.1; Amendment of Certain Defined Terms . The definitions of “ Applicable Margin ”, “ Commitment Amount ”, “ Commitment Percentage ”, “ Initial Margin ” and “ Maximum Revolving Advance Amount ” contained in Section 1.1 of the Credit Agreement are hereby amended as follows:

“‘ Applicable Margin ’ shall mean the applicable Initial Margin for the period from the Seventh Amendment Closing Date until the date of the first adjustment described below, and thereafter, a rate per annum determined by reference to the following grid:

Adjustments, if any, in the Applicable Margin shall be implemented monthly, on a prospective basis, commencing on January 1, 2009 and effective the first day of each fiscal month thereafter based upon Agent’s calculation of the prior month’s Facility Usage as determined by Agent in its sole discretion. If an Event of Default has occurred and is continuing at the time any reduction in the Applicable Margin is to be implemented, that reduction shall be deferred until the first day of the first fiscal month following the date on which such Event of Default is waived or cured. Nothing set forth in this definition shall limit the applicability of the Default Rate in the event of a failure to comply with Section 6.5(b) hereof.

‘ Commitment Amount ’ of any Lender shall mean the commitment amount set forth below such Lender’s name on the signature page of the Seventh Amendment, as the same may be adjusted pursuant to Section 2.24 hereof or upon any assignment by a Lender pursuant to Section 16.3(c) hereof.

‘ Commitment Percentage ’ of any Lender shall mean the percentage set forth below such Lender’s name on the signature page of the Seventh Amendment as same may be adjusted pursuant to Section 2.24 hereof or upon any assignment by a Lender pursuant to Section 16.3(c) hereof.

‘ Initial Margin ’ shall mean an interest rate per annum equal to (a) one and one-quarter of one percent (1.25%) with respect to Domestic Rate Loans, or (b) three percent (3.00%) with respect to Eurodollar Rate Loans.

‘ Maximum Revolving Advance Amount ’ shall mean $67,500,000, as such amount may be increased pursuant to Section 2.24 hereof.”

2.02 Amendment to Section 1.1; Addition of Certain Defined Terms . Effective as of the date hereof, the following definitions are hereby added to Section 1.1 of the Credit Agreement to read as follows:

“‘ Facility Usage ’ means the average for each day of the month of the sum of (i) the unpaid balance of the Advances, plus (ii) the undrawn amount of any outstanding Letters of Credit.

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‘ Seventh Amendment ’ shall mean that certain Seventh Amendment to Revolving Credit and Security Agreement dated as of the Seventh Amendment Closing Date executed by and among Borrower, PNC and the Lenders.

‘ Seventh Amendment Closing Date ’ shall mean September 30, 2008.

‘ Total Commitment Amount ’ shall mean, the aggregate of all Lenders’ Commitment Amounts which, as of the Seventh Amendment Closing Date, is equal to $67,500,000, as the same may be adjusted pursuant to Section 2.24 hereof and as the same may be reduced or terminated from time to time pursuant to this Agreement.”

2.03 Amendments to Article II . Effective as of the date hereof, Article II of the Credit Agreement is hereby amended by adding a new Section 2.24 and Section 2.25 thereto to read as follows:

“2.24 Increase in Aggregate Commitment . In the event that a Lender desires to increase its Commitment Amount and its Commitment Percentage, or a bank or other entity that is not a Lender desires to become a Lender and provide an additional Commitment Amount and Commitment Percentage hereunder, and so long as no Default or Event of Default shall have occurred and be continuing and with the prior written consent of Agent (which shall not be unreasonably conditioned, withheld or delayed), the Borrower shall have the right from time to time prior to the Term upon not less than thirty (30) days’ (or such shorter time as agreed to by Agent) prior written notice to Agent to increase the Maximum Revolving Advance Amount and the Total Commitment Amount by an aggregate amount of up to $32,500,000 (subject to the terms and conditions set forth herein, “ Commitment Adjustment Event ”); provided , that in no event shall the aggregate Commitment Amount of all Lenders be increased to an amount greater than $100,000,000; provided , further , that:

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2.25 Reallocation of the Loan and the Commitment Amounts . On the Seventh Amendment Closing Date and on each date when a new Lender becomes a party to the Credit Agreement pursuant to Section 2.24 hereof or an existing Lender increases its Commitment Amount pursuant to Section 2.24 hereof (in each case, a “ Commitment Change Date ”), (i) each Lender, if any, whose relative proportion of its Commitment Amount increases over the proportion of the Total Commitment Amount held by it prior to the Seventh Amendment Closing Date (or held by it prior to such Commitment Change Date) and/or (ii) each new Lender that increased its Commitment Amount after the Seventh Amendment Closing Date, shall, by assignments among them (which assignments shall be deemed to occur hereunder automatically, and without any requirement for additional documentation, on the Seventh Amendment Closing Date or any Commitment Change Date, as applicable) acquire a portion of the Loan held by them from and among each other, and shall, through the Agent, make such other adjustments among themselves as may be necessary so that after giving effect to such assignments and adjustments, such existing Lenders and such new Lenders, as applicable, shall hold all Loans outstanding under this Agreement ratably in accordance with their respective Commitment Amounts and Commitment Percentages as reflected on the signature pages under such Lender’s name, as such signature pages to this Agreement are amended from time to time to include the new Commitment Amounts and Commitment Percentages each time a Commitment Increase Certificate or Additional Lender Certificate is accepted by the Agent. On the Seventh Amendment Closing Date or the Commitment Change Date, as applicable, all Interest Periods in respect of any Eurodollar Rate Loans that were required to be assigned as set forth above shall automatically be terminated solely with respect to any such Lender that has assigned any such Eurodollar Rate Loans (but not with respect to any Lender that is an assignee of any such Lender). Borrower shall on the Seventh Amendment Closing Date or the Commitment Change Date, as applicable, make payments to the Lenders that held such Eurodollar Rate Loans that were required to be assigned as set forth above to compensate for such termination as if such termination were a payment or prepayment referred to in this Article II.”

2.04 Amendment to Section 3.3 . Effective as of the date hereof, Section 3.3 of the Credit Agreement is hereby amended and restated in its entirety as follows:

“(a) Facility Fee . If, (i) for any fiscal month prior to the first adjustment described below, the Facility Usage does not equal the Maximum Revolving Advance Amount, then Borrowers shall pay to Agent for the ratable benefit of Lenders a fee at a rate equal to 0.625% per annum on the amount by which the Maximum Revolving Advance Amount exceeds such Facility Usage and (ii) thereafter, a rate per annum determined by reference to the following grid:

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Adjustments, if any, in the Facility Fee shall be implemented monthly, on a prospective basis, commencing on January 1, 2009 and effective the first day of each fiscal month thereafter based upon Agent’s calculation of the prior month’s Facility Usage as determined by Agent in its sole discretion. If an Event of Default has occurred and is continuing at the time any reduction in the Facility Fee is to be implemented, that reduc