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<SEC-DOCUMENT>0001010549-06-000194.txt : 20060406
<SEC-HEADER>0001010549-06-000194.hdr.sgml : 20060406
<ACCEPTANCE-DATETIME>20060406163645
ACCESSION NUMBER:		0001010549-06-000194
CONFORMED SUBMISSION TYPE:	8-K
PUBLIC DOCUMENT COUNT:		5
CONFORMED PERIOD OF REPORT:	20060331
ITEM INFORMATION:		Entry into a Material Definitive Agreement
ITEM INFORMATION:		Financial Statements and Exhibits
FILED AS OF DATE:		20060406
DATE AS OF CHANGE:		20060406

FILER:

	COMPANY DATA:	
		COMPANY CONFORMED NAME:			NATURAL GAS SERVICES GROUP INC
		CENTRAL INDEX KEY:			0001084991
		STANDARD INDUSTRIAL CLASSIFICATION:	OIL, GAS FIELD SERVICES, NBC [1389]
		IRS NUMBER:				752811855

	FILING VALUES:
		FORM TYPE:		8-K
		SEC ACT:		1934 Act
		SEC FILE NUMBER:	001-31398
		FILM NUMBER:		06745499

	BUSINESS ADDRESS:	
		STREET 1:		2911 SCR 1260
		CITY:			MIDLAND
		STATE:			TX
		ZIP:			79706
		BUSINESS PHONE:		9155633974

	MAIL ADDRESS:	
		STREET 1:		2911 SCR 1260
		CITY:			MIDLAND
		STATE:			TX
		ZIP:			79706
</SEC-HEADER>
<DOCUMENT>
<TYPE>8-K
<SEQUENCE>1
<FILENAME>ngsi8k033106.txt
<TEXT>

                                  UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549


                                    FORM 8-K


                 CURRENT REPORT PURSUANT TO SECTION 13 OR 15(d)
                     OF THE SECURITIES EXCHANGE ACT OF 1934


        Date of Report (Date of earliest event reported): March 31, 2006


                        NATURAL GAS SERVICES GROUP, INC.
             (Exact Name of Registrant as Specified in Its Charter)



            Colorado                        1-31398             75-2811855
  (State or other jurisdiction         (Commission File        (IRS Employer
of Incorporation or organization)           Number)          Identification No.)


2911 South County Road 1260 Midland, Texas                          79706
 (Address of Principal Executive Offices)                        (Zip Code)


                                  432-563-3974
              (Registrant's telephone number, including area code)


                                 Not Applicable
          (Former name or former address, if changed since last report)


Check  the  appropriate  box  below  if the  Form  8-K  filing  is  intended  to
simultaneously  satisfy the filing obligation of the registrant under any of the
following provisions:

[_]      Written  communications  pursuant to Rule 425 under the  Securities Act
         (17 CFR 230.425)

[_]      Soliciting  material pursuant to Rule 14a-12 under the Exchange Act (17
         CFR 240.14a-12)

[_]      Pre-commencement  communications  pursuant to Rule  14d-2(b)  under the
         Exchange Act (17 CFR 240.14d-2(b))

[_]      Pre-commencement  communications  pursuant to Rule  13e-4(c)  under the
         Exchange Act (17 CFR 240.13e-4(c))


<PAGE>

Item 1.01. Entry into a Material Definitive Agreement.

         On March 31, 2006, Natural Gas Services Group,  Inc., as borrower,  and
Western  National  Bank,  as  lender,   entered  into  modification   agreements
(collectively,   the   "Modification   Agreements"),   modifying  the  following
promissory  notes  (collectively,  the "Notes"),  each of which  evidence a loan
facility  made  available  to Natural Gas under the  previously  reported  Sixth
Amended  and  Restated  Loan   Agreement   dated  January  3,  2006  (the  "Loan
Agreement"), between Natural Gas and Western National Bank:

         (1) Revolving Line of Credit  Promissory Note dated January 3, 2006, in
the  original  principal  amount of  $10,000,000.00,  executed by Natural Gas in
favor of Western National Bank (the "Revolving Line of Credit Promissory Note");

         (2) Term  Promissory  Note  dated  January  3,  2005,  in the  original
principal amount of $8,000,000.00, as modified by a Modification Agreement dated
May 1, 2005,  executed by Natural Gas in favor of Western  National  Bank (as so
modified, the "$8,000,000.00 Term Promissory Note");

         (3) Multiple  Advance Term Promissory Note dated March 14, 2005, in the
original  principal  amount of  $10,000,000.00,  as modified  by a  Modification
Agreement  dated  May 1,  2005,  executed  by  Natural  Gas in favor of  Western
National  Bank  (as  so  modified,  the  "10,000,000.00  Multiple  Advance  Term
Promissory Note"); and

         (4) Advancing Line of Credit Promissory Note dated November 3, 2003, in
the original principal amount of  $10,000,000.00,  as modified by a Modification
Agreement  dated  December  15,  2004,  and  as  further  modified  by a  Second
Modification  Agreement  dated May 1, 2005,  executed by Natural Gas in favor of
Western  National Bank (as so modified,  the  "$10,000,000.00  Advancing Line of
Credit Promissory Note").

         Natural  Gas and  Western  National  Bank  entered  into the  following
Modification Agreements:

         (1)  Modification  Agreement  dated  effective  as of March  24,  2006,
modifying the Revolving Line of Credit Promissory Note;

         (2) Second Modification Agreement dated effective as of March 24, 2006,
modifying the $8,000,000.00 Term Promissory Note;

         (3) Second Modification Agreement dated effective as of March 24, 2006,
modifying the $10,000,000.00 Multiple Advance Term Promissory Note; and

         (4) Third Modification  Agreement dated effective as of March 24, 2006,
modifying the $10,000,000.00 Advancing Line of Credit Promissory Note.

         Under the Modification  Agreements,  the annual rate at which each Note
bears interest was reduced from a variable rate equal to one-half of one percent
(0.5%)  over the "prime  rate" to the prime  rate.  The "prime  rate" as defined
under the Loan Agreement and as it applies to the Notes means that variable rate
of interest per annum  published  in the Money Rates  section of The Wall Street
Journal as its "prime rate."



<PAGE>

         In  addition,  under  the Third  Modification  Agreement,  the  monthly
principal  payment  due  under  the  $10,000,000.00  Advancing  Line  of  Credit
Promissory Note was reduced from  $166,666.67 to $57,037.00.  This reduction was
precipitated by a $5,000,000.00  prepayment of the outstanding principal balance
of the  $10,000,000.00  Advancing Line of Credit Promissory Note made by Natural
Gas on March 8, 2006. After such prepayment,  the outstanding  principal balance
of the $10,000,000.00 Advancing Line of Credit Promissory Note was approximately
$2,566,662.00.  The maturity date of the $10,000,000.00 Advancing Line of Credit
Promissory Note remains November 15, 2009

         The remaining  terms and provisions of the Loan Agreement and the Notes
remain in full force and effect.

Item 9.01 Financial Statements and Exhibits.


         (c)      Exhibits.

                  Exhibit No.                       Description
                  -----------                       -----------


                    *10.1           Modification Agreement dated effective as of
                                    March 24, 2006,  by and between  Natural Gas
                                    Services  Group,  Inc. and Western  National
                                    Bank.

                    *10.2           Second    Modification    Agreement    dated
                                    effective  as of  March  24,  2006,  by  and
                                    between Natural Gas Services Group, Inc. and
                                    Western National Bank.

                    *10.3           Second    Modification    Agreement    dated
                                    effective  as of  March  24,  2006,  by  and
                                    between Natural Gas Services Group, Inc. and
                                    Western National Bank.

                    *10.4           Third Modification Agreement dated effective
                                    as of March 24, 2006, by and between Natural
                                    Gas   Services   Group,   Inc.  and  Western
                                    National Bank.

              ---------------------
              *  Filed herewith





<PAGE>

                                   SIGNATURES


         Pursuant to the  requirements  of the Securities  Exchange Act of 1934,
the  Registrant  has duly  caused  this report to be signed on its behalf by the
undersigned hereunto duly authorized.


                                         NATURAL GAS SERVICES GROUP, INC.


                                         By: /s/ Stephen C. Taylor
                                            ------------------------------------
                                            Stephen C. Taylor, President and CEO


Dated: April 5, 2006

<PAGE>
                  Exhibit No.                       Description
                  -----------                       -----------


                    *10.1           Modification Agreement dated effective as of
                                    March 24, 2006,  by and between  Natural Gas
                                    Services  Group,  Inc. and Western  National
                                    Bank.

                    *10.2           Second    Modification    Agreement    dated
                                    effective  as of  March  24,  2006,  by  and
                                    between Natural Gas Services Group, Inc. and
                                    Western National Bank.

                    *10.3           Second    Modification    Agreement    dated
                                    effective  as of  March  24,  2006,  by  and
                                    between Natural Gas Services Group, Inc. and
                                    Western National Bank.

                    *10.4           Third Modification Agreement dated effective
                                    as of March 24, 2006, by and between Natural
                                    Gas   Services   Group,   Inc.  and  Western
                                    National Bank.

              ---------------------
              *  Filed herewith



</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-10.1
<SEQUENCE>2
<FILENAME>ngsi8kex101033106.txt
<TEXT>

                                                                    Exhibit 10.1

                                                   Revolving Line of Credit Note
                                                           dated January 3, 2006


                             MODIFICATION AGREEMENT
                             ----------------------

This Modification Agreement ("Modification  Agreement") is effective as of March
24, 2006.  The parties to the  Modification  Agreement  are Natural Gas Services
Group, Inc. ("Borrower") and Western National Bank ("Lender").

                                    RECITALS

On January 3, 2006,  Borrower  executed  and  delivered  to Lender that  certain
Revolving  Line of  Credit  Promissory  Note in the  original  principal  sum of
$10,000,000.00, bearing interest at the rate stated therein, with a stated final
maturity date of December 1, 2006 (the  "Note"),  pursuant to that certain Sixth
Amended  and  Restated  Loan   Agreement   dated  January  3,  2006  (the  "Loan
Agreement"). All liens, security interests and assignments securing the Note are
collectively called the "Liens". Terms defined in the Note or the Loan Agreement
and not otherwise  defined  herein shall have the same meanings here as in those
documents.

At  Borrower's  request,  Borrower  and  Lender  have  agreed to enter into this
Modification  Agreement  to modify the  interest  provisions  of the Note and to
ratify the Liens. Said modified interest provisions shall be effective as of the
April 1, 2006 payment.

                                    AGREEMENT

1.  Modification  of Interest  Provisions  of the Note. In lieu of the following
provisions which were contained in the first paragraph of the Note:

         "...at a rate per  annum  which  shall  from day to day be equal to the
         lesser  of (a) a rate  per  annum  (the  "Established  Rate")  equal to
         one-half of one  percent  (0.5%) over the Prime Rate in effect from day
         to day, calculated on the basis of actual days elapsed, but computed as
         if each calendar year  consisted of 360 days, or (b) the Highest Lawful
         Rate."

such provisions of the Note are changed to read in their entirety as follows:

         "...at a rate per  annum  which  shall  from day to day be equal to the
         lesser of (a) a rate per annum (the  "Established  Rate")  equal to the
         Prime Rate in effect from day to day, or (b) the Highest  Lawful  Rate,
         in each  case  calculated  on the  basis of actual  days  elapsed,  but
         computed as if each calendar year consisted of 360 days."





                                       1
<PAGE>

2.  Ratification  of Liens.  Borrower  and Lender  further  agree that all Liens
securing  the Note  shall  continue  and  carry  forward  until the Note and all
indebtedness  evidenced  thereby is paid in full.  Borrower  further agrees that
such liens are hereby ratified and affirmed as valid and subsisting  against the
collateral described therein,  and that this Modification  Agreement shall in no
manner  vitiate,  affect or impair the Note or the Liens  (except  as  expressly
modified in this  Modification  Agreement)  and that such Liens shall not in any
manner be waived, released, altered or modified.

3. Miscellaneous.

         (a)      As modified  hereby,  the provisions of the Note and the Liens
                  shall  continue  in  full  force  and  effect,   and  Borrower
                  acknowledges  and affirms its liability to Lender  thereunder.
                  In the event of an  inconsistency  between  this  Modification
                  Agreement  and the  terms  of the Note or of the  Liens,  this
                  Modification Agreement shall govern.

         (b)      Borrower hereby agrees to pay all costs and expenses  incurred
                  by Lender in connection with the execution and  administration
                  of this Modification Agreement.

         (c)      Any default by Borrower in the  performance of its obligations
                  herein contained shall constitute a default under the Note and
                  the Liens and shall allow Lender to exercise any or all of its
                  remedies  set  forth in such  Note  and  Liens or at law or in
                  equity.

         (d)      Lender  does  not,  by  its  execution  of  this  Modification
                  Agreement, waive any rights it may have against any person not
                  a party hereto.

         (e)      All terms, provisions,  covenants,  agreements, and conditions
                  of the Note and the Liens are  unchanged,  except as  provided
                  herein.  Borrower agrees that this Modification  Agreement and
                  all of the covenants and agreements  contained herein shall be
                  binding upon Borrower and shall inure to the benefit of Lender
                  and  each  of  their  respective   heirs,   executors,   legal
                  representatives, successors, and permitted assigns.

                  THIS  MODIFICATION  AGREEMENT  REPRESENTS THE FINAL  AGREEMENT
                  BETWEEN THE PARTIES AND MAY NOT BE CONTRADICTED BY EVIDENCE OF
                  PRIOR,  CONTEMPORANEOUS,  OR SUBSEQUENT ORAL AGREEMENTS OF THE
                  PARTIES.  THERE ARE NO UNWRITTEN ORAL  AGREEMENTS  BETWEEN THE
                  PARTIES.







                                       2
<PAGE>

                                     Borrower:

                                     Natural Gas Services Group, Inc.

                                     By: /s/ Stephen C. Taylor
                                        ----------------------------------------
                                        Stephen C. Taylor, President


                                     Lender:

                                     Western National Bank

                                     By /s/ Scott A. Lovett
                                       -----------------------------------------
                                       Scott A. Lovett, Executive Vice President


STATE OF TEXAS             ss.
                           ss.
COUNTY OF MIDLAND          ss.

         This  instrument  was  acknowledged  before  me on March 31,  2006,  by
Stephen C. Taylor,  President of Natural Gas  Services  Group,  Inc., a Colorado
corporation, on behalf of said corporation.


                                       -----------------------------------------
                                       Notary Public, State of Texas


STATE OF TEXAS             ss.
                           ss.
COUNTY OF MIDLAND          ss.

         This instrument was acknowledged  before me on March 31, 2006, 2006, by
Scott A. Lovett,  Executive Vice President of Western  National Bank, a national
banking association, on behalf of said association.


                                       -----------------------------------------
                                       Notary Public, State of Texas








                                       3
</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-10.2
<SEQUENCE>3
<FILENAME>ngsi8kex102033106.txt
<TEXT>

                                                                    Exhibit 10.2

                                                         $8,000,000.00 Term Note
                                                           dated January 3, 2005


                          SECOND MODIFICATION AGREEMENT
                          -----------------------------

This  Second  Modification   Agreement  ("Second  Modification   Agreement")  is
effective as of March 24, 2006. The parties to the Second Modification Agreement
are Natural Gas Services  Group,  Inc.  ("Borrower")  and Western  National Bank
("Lender").

                                    RECITALS

On January 3, 2005,  Borrower executed and delivered to Lender that certain Term
Promissory Note in the original principal sum of $8,000,000.00, bearing interest
at the rate stated  therein,  with a stated  final  maturity  date of January 1,
2012,  as modified in  Modification  Agreement  dated May 1, 2005 (the  "Note"),
pursuant to that certain Third Amended and Restated Loan Agreement dated January
3, 2005,  as amended and  restated in that certain  Fourth  Amended and Restated
Loan Agreement dated March 14, 2005, as modified in First Modification to Fourth
Amended and Restated Loan Agreement  dated May 1, 2005, and further  amended and
restated in Fifth Amended and Restated Loan Agreement  dated September 26, 2005,
and further  amended and restated in Sixth Amended and Restated  Loan  Agreement
dated January 3, 2006 (the "Loan Agreement").  All liens, security interests and
assignments securing the Note are collectively called the "Liens". Terms defined
in the Note or the Loan  Agreement and not otherwise  defined  herein shall have
the same meanings here as in those documents.

At Borrower's request, Borrower and Lender have agreed to enter into this Second
Modification  Agreement  to modify the  interest  provisions  of the Note and to
ratify the Liens. Said modified interest provisions shall be effective as of the
April 1, 2006 payment.

                                    AGREEMENT

1.  Modification  of Interest  Provisions  of the Note. In lieu of the following
provisions which were contained in the first paragraph of the Note:

         "...at a rate per  annum  which  shall  from day to day be equal to the
         lesser of (a) a rate per annum (the  "Established  Rate")  equal to the
         greater of (i)  one-half  percent  (0.5%) over the Prime Rate in effect
         from day to day, or (ii) six percent (6.0%),  or (b) the Highest Lawful
         Rate, in each case calculated on the basis of actual days elapsed,  but
         computed as if each calendar year consisted of 360 days."

such provisions of the Note are changed to read in their entirety as follows:

         "...at a rate per  annum  which  shall  from day to day be equal to the
         lesser of (a) a rate per annum (the  "Established  Rate")  equal to the
         Prime Rate in effect from day to day, or (b) the Highest  Lawful  Rate,
         in each  case  calculated  on the  basis of actual  days  elapsed,  but
         computed as if each calendar year consisted of 360 days."




                                       1
<PAGE>

2.  Ratification  of Liens.  Borrower  and Lender  further  agree that all Liens
securing  the Note  shall  continue  and  carry  forward  until the Note and all
indebtedness  evidenced  thereby is paid in full.  Borrower  further agrees that
such liens are hereby ratified and affirmed as valid and subsisting  against the
collateral described therein, and that this Second Modification  Agreement shall
in no  manner  vitiate,  affect  or  impair  the Note or the  Liens  (except  as
expressly  modified in this Second  Modification  Agreement) and that such Liens
shall not in any manner be waived, released, altered or modified.

3. Miscellaneous.

         (a)      As modified  hereby,  the provisions of the Note and the Liens
                  shall  continue  in  full  force  and  effect,   and  Borrower
                  acknowledges  and affirms its liability to Lender  thereunder.
                  In  the  event  of  an   inconsistency   between  this  Second
                  Modification  Agreement  and the  terms  of the Note or of the
                  Liens, this Second Modification Agreement shall govern.

         (b)      Borrower hereby agrees to pay all costs and expenses  incurred
                  by Lender in connection with the execution and  administration
                  of this Second Modification Agreement.

         (c)      Any default by Borrower in the  performance of its obligations
                  herein contained shall constitute a default under the Note and
                  the Liens and shall allow Lender to exercise any or all of its
                  remedies  set  forth in such  Note  and  Liens or at law or in
                  equity.

         (d)      Lender does not, by its execution of this Second  Modification
                  Agreement, waive any rights it may have against any person not
                  a party hereto.

         (e)      All terms, provisions,  covenants,  agreements, and conditions
                  of the Note and the Liens are  unchanged,  except as  provided
                  herein.   Borrower   agrees  that  this  Second   Modification
                  Agreement and all of the covenants  and  agreements  contained
                  herein shall be binding  upon  Borrower and shall inure to the
                  benefit  of  Lender  and  each  of  their  respective   heirs,
                  executors,  legal representatives,  successors,  and permitted
                  assigns.

                  THIS  SECOND  MODIFICATION   AGREEMENT  REPRESENTS  THE  FINAL
                  AGREEMENT  BETWEEN THE PARTIES AND MAY NOT BE  CONTRADICTED BY
                  EVIDENCE  OF  PRIOR,   CONTEMPORANEOUS,   OR  SUBSEQUENT  ORAL
                  AGREEMENTS  OF  THE  PARTIES.  THERE  ARE  NO  UNWRITTEN  ORAL
                  AGREEMENTS BETWEEN THE PARTIES.



                                       2
<PAGE>

                                    Borrower:
                                    ---------

                                    Natural Gas Services Group, Inc.

                                    By: /s/ Stephen C. Taylor
                                       -----------------------------------------
                                       Stephen C. Taylor, President

                                    Lender:
                                    -------

                                    Western National Bank

                                    By: /s/ Scott A. Lovett
                                       -----------------------------------------
                                       Scott A. Lovett, Executive Vice President


STATE OF TEXAS             ss.
                           ss.
COUNTY OF MIDLAND          ss.

         This  instrument  was  acknowledged  before  me on March 31,  2006,  by
Stephen C. Taylor,  President of Natural Gas  Services  Group,  Inc., a Colorado
corporation, on behalf of said corporation.


                                       -----------------------------------------
                                       Notary Public, State of Texas


STATE OF TEXAS             ss.
                           ss.
COUNTY OF MIDLAND          ss.

         This instrument was acknowledged  before me on March 31, 2006, by Scott
A. Lovett, Executive Vice President of Western National Bank, a national banking
association, on behalf of said association.


                                       -----------------------------------------
                                       Notary Public, State of Texas










                                       3
</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-10.3
<SEQUENCE>4
<FILENAME>ngsi8kex103033106.txt
<TEXT>

                                                                    Exhibit 10.3

                                       $10,000,000.00 Multiple Advance Term Note
                                                            dated March 14, 2005


                          SECOND MODIFICATION AGREEMENT
                          -----------------------------

This  Second  Modification   Agreement  ("Second  Modification   Agreement")  is
effective as of March 24, 2006. The parties to the Second Modification Agreement
are Natural Gas Services  Group,  Inc.  ("Borrower")  and Western  National Bank
("Lender").

                                    RECITALS

On March 14,  2005,  Borrower  executed  and  delivered  to Lender that  certain
Multiple  Advance  Term  Promissory  Note  in  the  original  principal  sum  of
$10,000,000.00, bearing interest at the rate stated therein, with a stated final
maturity date of April 1, 2011, as modified in Modification  Agreement dated May
1, 2005 (the "Note").  The Note was made pursuant to that certain Fourth Amended
and Restated  Loan  Agreement  dated March 14, 2005, as modified in that certain
First  Modification  to Fourth Amended and Restated Loan Agreement  dated May 1,
2005;  and  further  amended  and  restated in that  certain  Fifth  Amended and
Restated  Loan  Agreement  dated  September  26, 2005;  and further  amended and
restated in that certain Sixth amended and Restated Loan Agreement dated January
3, 2006 (the "Loan  Agreement").  All liens,  security interests and assignments
securing the Note are collectively called the "Liens". Terms defined in the Note
or the Loan  Agreement  and not  otherwise  defined  herein  shall have the same
meanings here as in those documents.

At Borrower's request, Borrower and Lender have agreed to enter into this Second
Modification  Agreement  to modify the  interest  provisions  of the Note and to
ratify the Liens. Said modified interest provisions shall be effective as of the
April 1, 2006 payment.

                                    AGREEMENT

1.  Modification  of Interest  Provisions  of the Note. In lieu of the following
provisions which were contained in the first paragraph of the Note:

         "...at a rate per  annum  which  shall  from day to day be equal to the
         lesser of (a) a rate per annum (the  "Established  Rate")  equal to the
         greater of (i)  one-half  percent  (0.5%) over the Prime Rate in effect
         from day to day, or (ii) six and one-quarter  percent  (6.25%),  or (b)
         the Highest Lawful Rate, in each case calculated on the basis of actual
         days elapsed,  but computed as if each  calendar year  consisted of 360
         days."

such provisions of the Note are changed to read in their entirety as follows:




                                       1
<PAGE>


         "...at a rate per  annum  which  shall  from day to day be equal to the
         lesser of (a) a rate per annum (the  "Established  Rate")  equal to the
         Prime Rate in effect from day to day, or (b) the Highest  Lawful  Rate,
         in each  case  calculated  on the  basis of actual  days  elapsed,  but
         computed as if each calendar year consisted of 360 days."

2.  Ratification  of Liens.  Borrower  and Lender  further  agree that all Liens
securing  the Note  shall  continue  and  carry  forward  until the Note and all
indebtedness  evidenced  thereby is paid in full.  Borrower  further agrees that
such liens are hereby ratified and affirmed as valid and subsisting  against the
collateral described therein, and that this Second Modification  Agreement shall
in no  manner  vitiate,  affect  or  impair  the Note or the  Liens  (except  as
expressly  modified in this Second  Modification  Agreement) and that such Liens
shall not in any manner be waived, released, altered or modified.

3. Miscellaneous.

         (a)      As modified  hereby,  the provisions of the Note and the Liens
                  shall  continue  in  full  force  and  effect,   and  Borrower
                  acknowledges  and affirms its liability to Lender  thereunder.
                  In  the  event  of  an   inconsistency   between  this  Second
                  Modification  Agreement  and the  terms  of the Note or of the
                  Liens, this Second Modification Agreement shall govern.

         (b)      Borrower hereby agrees to pay all costs and expenses  incurred
                  by Lender in connection with the execution and  administration
                  of this Second Modification Agreement.

         (c)      Any default by Borrower in the  performance of its obligations
                  herein contained shall constitute a default under the Note and
                  the Liens and shall allow Lender to exercise any or all of its
                  remedies  set  forth in such  Note  and  Liens or at law or in
                  equity.

         (d)      Lender does not, by its execution of this Second  Modification
                  Agreement, waive any rights it may have against any person not
                  a party hereto.

         (e)      All terms, provisions,  covenants,  agreements, and conditions
                  of the Note and the Liens are  unchanged,  except as  provided
                  herein.   Borrower   agrees  that  this  Second   Modification
                  Agreement and all of the covenants  and  agreements  contained
                  herein shall be binding  upon  Borrower and shall inure to the
                  benefit  of  Lender  and  each  of  their  respective   heirs,
                  executors,  legal representatives,  successors,  and permitted
                  assigns.

                  THIS  SECOND  MODIFICATION   AGREEMENT  REPRESENTS  THE  FINAL
                  AGREEMENT  BETWEEN THE PARTIES AND MAY NOT BE  CONTRADICTED BY
                  EVIDENCE  OF  PRIOR,   CONTEMPORANEOUS,   OR  SUBSEQUENT  ORAL
                  AGREEMENTS  OF  THE  PARTIES.  THERE  ARE  NO  UNWRITTEN  ORAL
                  AGREEMENTS BETWEEN THE PARTIES.



                                       2
<PAGE>

                                    Borrower:
                                    ---------

                                    Natural Gas Services Group, Inc.


                                    By: /s/ Stephen C. Taylor
                                       -----------------------------------------
                                       Stephen C. Taylor, President


                                    Lender:
                                    -------

                                    Western National Bank


                                    By:      /s/ Scott A. Lovett
                                       -----------------------------------------
                                       Scott A. Lovett, Executive Vice President


STATE OF TEXAS             ss.
                           ss.
COUNTY OF MIDLAND          ss.

         This  instrument  was  acknowledged  before  me on March 31,  2006,  by
Stephen C. Taylor,  President of Natural Gas  Services  Group,  Inc., a Colorado
corporation, on behalf of said corporation.



                                       -----------------------------------------
                                       Notary Public, State of Texas


STATE OF TEXAS             ss.
                           ss.
COUNTY OF MIDLAND          ss.

         This instrument was acknowledged  before me on March 31, 2006, by Scott
A. Lovett, Executive Vice President of Western National Bank, a national banking
association, on behalf of said association.



                                       -----------------------------------------
                                       Notary Public, State of Texas







                                       3
</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-10.4
<SEQUENCE>5
<FILENAME>ngsi8kex104033106.txt
<TEXT>

                                                                    Exhibit 10.4

                                                        $10,000,000 Advance Note
                                                                November 3, 2003

                          THIRD MODIFICATION AGREEMENT
                          ----------------------------

This Third Modification Agreement ("Third Modification  Agreement") is effective
as of March 24,  2006.  The  parties  to the Third  Modification  Agreement  are
Natural  Gas  Services  Group,  Inc.  ("Borrower")  and  Western  National  Bank
("Lender").

                                    RECITALS

On November 3, 2003,  Borrower  executed  and  delivered  to Lender that certain
Advancing  Line of  Credit  Promissory  Note in the  original  principal  sum of
$10,000,000.00, bearing interest at the rate stated therein, with a stated final
maturity date of November 15, 2009, as modified in Modification  Agreement dated
December 15, 2004, and further modified in Second  Modification  Agreement dated
May 1, 2005 (the  "Note").  The Note was made  pursuant to that  certain  Second
Amended and  Restated  Loan  Agreement  dated  November 3, 2003,  as amended and
restated in that certain Third Amended and Restated Loan Agreement dated January
3, 2005,  and further  amended and restated in that certain  Fourth  Amended and
Restated Loan Agreement  dated March 14, 2005, as modified in that certain First
Modification  to Fourth Amended and Restated Loan  Agreement  dated May 1, 2005;
and further amended and restated in that certain Fifth Amended and Restated Loan
Agreement  dated  September 26, 2005;  and further  amended and restated in that
certain  Sixth Amended and Restated  Loan  Agreement  dated January 3, 2006 (the
"Loan Agreement").  All liens,  security interests and assignments  securing the
Note are collectively called the "Liens".  Terms defined in the Note or the Loan
Agreement and not otherwise  defined herein shall have the same meanings here as
in those documents.

Borrower now proposes to pay down a portion of the outstanding  principal amount
of the Note. In this regard,  Borrower and Lender have agreed to enter into this
Third Modification  Agreement (i) to modify the interest  provisions of the Note
to provide  for an  decrease  in the  interest  rate of  one-half of one percent
(.0.5%) and to eliminate  the interest  floor;  (ii) to modify the amount of the
monthly principal payments; and (iii) to ratify the Liens.

                                    AGREEMENT

1.  Modification  of Interest  Provision of the Note.  In lieu of the  following
provision which was contained in the Note:

         "...at a rate per  annum  which  shall  from day to day be equal to the
         lesser of (a) a rate per annum (the  "Established  Rate")  equal to the
         greater of (i)  one-half  percent  (0.5%) over the Prime Rate in effect
         from day to day, or (ii) five and one-quarter  percent (5.25%),  or (b)
         the Highest Lawful Rate, in each case calculated on the basis of actual
         days elapsed,  but computed as if each  calendar year  consisted of 360
         days." such provision of the Note is changed to read in its entirety as
         follows:




                                       1
<PAGE>

         "...at a rate per  annum  which  shall  from day to day be equal to the
         lesser of (a) a rate per annum (the  "Established  Rate")  equal to the
         Prime Rate in effect from day to day, or (b) the Highest  Lawful  Rate,
         in each  case  calculated  on the  basis of actual  days  elapsed,  but
         computed as if each calendar year consisted of 360 days."

2.  Modification  of Payment  Provisions  of the Note.  In lieu of the following
provision which was contained in the fourth (4th) paragraph of the Note:

         "The principal of this Note shall be due and payable as follows:

         (a)      with respect to the principal  balance  outstanding under this
                  Note on December  15, 2004,  in  fifty-nine  (59)  consecutive
                  monthly installments of $166,666.67, with the first (1st) such
                  installment  being due and  payable on  December 5, 2004 and a
                  like installment being due and payable on the 15th day of each
                  succeeding month to and including October 15, 2009; plus

         (b)      1/60th of the sum of all  advances  made by Lender  under this
                  note after December 15, 2004 and prior to March 31, 2005 and a
                  like installment being due and payable on the 15th day of each
                  succeeding month to and including October 15, 2009; plus

         (c)      1/60th of the sum of all  advances  made by Lender  under this
                  note  after  April 1, 2005 and prior to June 30,  2005,  and a
                  like installment being due and payable on the 15th day of each
                  succeeding month to and including October 15, 2009; plus

         (d)      1/60th of the sum of all  advances  made by Lender  under this
                  note after July 1, 2005 and prior to September  30, 2005 and a
                  like installment being due and payable on the 15th day of each
                  succeeding month to and including October 15, 2009; plus

         (e)      1/60th of the sum of all  advances  made by Lender  under this
                  note after  October 1, 2005 and prior to December 15, 2005 and
                  a like  installment  being due and  payable on the 15th day of
                  each succeeding month to and including October 15, 2009; plus

         (f)      one  final  installment  in an amount  equal to all  remaining
                  unpaid  principal and accrued and unpaid  interest on the Note
                  shall be due and payable on November 15, 2009.

Interest,  computed on the unpaid balance of the Note,  shall be due and payable
monthly as it accrues, on the same dates as, but in addition to each installment
of principal." such provision of the Note is changed to read as follows:



                                       2
<PAGE>

         "The  principal of this Note shall be due and payable in (a) forty-four
         consecutive  monthly  installments  of $57,037.00,  with the first such
         installment  being  due and  payable  on  April  15,  2006,  and a like
         installment  being due and payable on the fifteenth (15th ) day of each
         succeeding  month to and including  October 15, 2009; and (b) one final
         installment  in an amount equal to all remaining  unpaid  principal and
         accrued  and unpaid  interest  on this Note shall be due and payable on
         November 15,  2009.  Interest,  computed on the unpaid  balance of this
         Note, shall be due and payable monthly as it accrues, on the same dates
         as, but in addition to each installment of principal."

3.  Ratification  of Liens.  Borrower  and Lender  further  agree that all Liens
securing  the Note  shall  continue  and  carry  forward  until the Note and all
indebtedness  evidenced  thereby is paid in full.  Borrower  further agrees that
such Liens are hereby ratified and affirmed as valid and subsisting  against the
collateral described therein,  and that this Third Modification  Agreement shall
in no  manner  vitiate,  affect  or  impair  the Note or the  Liens  (except  as
expressly  modified in this Third  Modification  Agreement)  and that such Liens
shall not in any manner be waived, released, altered or modified.

4. Miscellaneous.

         (a)      As modified  hereby,  the provisions of the Note and the Liens
                  shall  continue  in  full  force  and  effect,   and  Borrower
                  acknowledges  and affirms its liability to Lender  thereunder.
                  In  the  event  of  an   inconsistency   between   this  Third
                  Modification  Agreement  and the  terms  of the Note or of the
                  Liens, this Third Modification Agreement shall govern.

         (b)      Borrower hereby agrees to pay all costs and expenses  incurred
                  by Lender in connection with the execution and  administration
                  of this Third Modification Agreement.

         (c)      Any default by Borrower in the  performance of its obligations
                  herein contained shall constitute a default under the Note and
                  the Liens and shall allow Lender to exercise any or all of its
                  remedies  set  forth in such  Note  and  Liens or at law or in
                  equity.

         (d)      Lender does not, by its  execution of this Third  Modification
                  Agreement, waive any rights it may have against any person not
                  a party hereto.

         (e)      All terms, provisions,  covenants,  agreements, and conditions
                  of the Note and the Liens are  unchanged,  except as  provided
                  herein. Borrower agrees that this Third Modification Agreement
                  and all of the covenants and agreements contained herein shall
                  be binding  upon  Borrower  and shall  inure to the benefit of
                  Lender and each of their respective  heirs,  executors,  legal
                  representatives, successors, and permitted assigns. THIS THIRD
                  MODIFICATION  AGREEMENT REPRESENTS THE FINAL AGREEMENT BETWEEN
                  THE PARTIES AND MAY NOT BE  CONTRADICTED BY EVIDENCE OF PRIOR,
                  CONTEMPORANEOUS, OR SUBSEQUENT ORAL AGREEMENTS OF THE PARTIES.
                  THERE ARE NO UNWRITTEN ORAL AGREEMENTS BETWEEN THE PARTIES.



                                       3
<PAGE>

                                    Borrower:
                                    ---------

                                    Natural Gas Services Group, Inc.

                                    By: /s/ Stephen C. Taylor
                                       -----------------------------------------
                                       Stephen C. Taylor, President

                                    Lender:
                                    -------

                                    Western National Bank

                                    By: /s/ Scott A. Lovett
                                       -----------------------------------------
                                       Scott A. Lovett, Executive Vice President


STATE OF TEXAS             ss.
                           ss.
COUNTY OF MIDLAND          ss.

         This  instrument  was  acknowledged  before  me on March 31,  2006,  by
Stephen C. Taylor,  President of Natural Gas  Services  Group,  Inc., a Colorado
corporation, on behalf of said corporation.



                                       -----------------------------------------
                                       Notary Public, State of Texas


STATE OF TEXAS             ss.
                           ss.
COUNTY OF MIDLAND          ss.

         This instrument was acknowledged  before me on March 31, 2006, by Scott
A. Lovett, Executive Vice President of Western National Bank, a national banking
association, on behalf of said association.



                                       -----------------------------------------
                                       Notary Public, State of Texas







                                       4



</TEXT>
</DOCUMENT>
</SEC-DOCUMENT>
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