EMPLOYMENT AGREEMENT





         THIS EMPLOYMENT  AGREEMENT (this  "Agreement"),  dated as of August 24,

2005, is between Natural Gas Services Group,  Inc., a Colorado  corporation (the

"Company"), and Stephen C. Taylor, an individual residing in Midland, Texas (the

"Employee").



WHEREAS,  the Employee was employed by the Company on January 13, 2005,  and was

appointed by the Board of  Directors  of the Company to serve as  President  and

Chief Executive Officer on January 20, 2005; and



         WHEREAS,  the  Company  and  the  Employee  desire  for  the  Company's

employment  of the  Employee  be subject to the terms and  conditions  set forth

below;



         NOW,  THEREFORE,  in  consideration  of the  premises  and  the  mutual

covenants and  agreements  herein  contained,  and intending to be legally bound

hereby, the Company and the Employee hereby agree as follows:



         1.  Employment.  The  Company  agrees to employ the  Employee,  and the

Employee  agrees to enter the employ of the Company,  upon the terms and subject

to conditions herein provided.



         2. Term. The employment of the Employee shall be for a period (referred

to herein as the "Employment Term") commencing on the date of this Agreement and

ending on the earlier of: (i) the  effective  date of any  "Fundamental  Change"

with  respect to the Company or with respect to the  Employee;  (ii) the date of

termination of Employee's  employment pursuant to Section 5 hereof; or (iii) the

third anniversary of the Employee's date of employment.



         For purposes  hereof,  a "Fundamental  Change" shall occur with respect

to:  (i)  the  Company  on  the  effective  date  of  any  dissolution,  merger,

consolidation,  sale  of all or  substantially  all  of  the  Company's  assets,

recapitalization  or any other type of transaction  which results in 51% or more

of the Company's  common stock being changed into, or exchanged  for,  different

securities of the Company,  as applicable,  or other  securities or interests in

other persons or entities,  and (ii) the Employee on the  effective  date of any

change in the duties,  functions,  responsibilities or authority of the Employee

or any decrease in the base salary of the Employee in effect at that time.



         3. Position and Duties.



         (a) Position.  During the Employment  Term, the Employee shall serve as

President and Chief  Executive  Officer of the Company.  In such  capacity,  the

Employee  shall have such duties,  functions,  responsibilities,  and  authority

customarily  appertaining  to the  position  of  president  and chief  executive

officer of a corporation;  subject,  however, to applicable restrictions imposed

by the bylaws of the Company and to the  directives of the Board of Directors of

the Company or its Compensation Committee.







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         (b) Duties.  During the Employment  Term, the Employee shall devote his

full time,  skill and  attention,  and his best efforts  during normal  business

hours to, and in furtherance of, the business and affairs of the Company and its

subsidiaries and affiliates  (collectively,  the "Related Parties");  except for

usual,  ordinary and customary periods of vacation and absence due to illness or

other disability; provided, however, that Employee may, subject to the Company's

code of ethics and conflict of interest policies as in effect from time to time,

devote reasonable  periods of time in connection with the following  activities,

if  such  activities  do  not  materially  interfere  with  the  performance  of

Employee's  duties and  services  hereunder  and do not consume more than 10% of

Employee's working hours:



                  (i) fulfilling speaking engagements; and



                  (ii) engaging in charitable and community activities.



         4. Compensation and Related Matters.



         (a) Base Salary. The Company shall pay to the Employee a base salary at

the rate of not less than  $155,000.00  per  annum.  This base  salary  shall be

reviewed  at  least  annually  within  15  days of the  anniversary  date of the

Employee's  date of employment  and increases in such base salary may be granted

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