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SCHEDULE 14A
INFORMATION REQUIRED IN PROXY STATEMENT

SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the
Securities Exchange Act of 1934 (Amendment No. )

Filed by the Registrant [X]
Filed by a Party other than the Registrant [ ]

Check the appropriate box:
[ ] Preliminary Proxy Statement
[ ] Confidential, For Use of the Commission only (as permitted by Rule
14a-6(e)(2)
[X] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to Exchange Act Rule 14a-11 or 14a-12

NATIONAL-OILWELL, INC.
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(Name of Registrant as Specified In Its Charter)

- --------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement, if other than Registrant)

Payment of Filing Fee (Check the appropriate box):
[X] No Fee required.
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11.

1) Title of each class of securities to which transaction applies:

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2) Aggregate number of securities to which the transaction applies;

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3) Per unit price of other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11: (Set forth the amount on which
the filing fee is calculated and state how it was determined.

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4) Proposed maximum aggregate value of transaction:

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5) Total fee paid:

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[ ] Fee paid previously with preliminary materials.

[ ] Check box if any part of the fee is offset as provided by Exchange
Act Rule 0-11(a)(2) and identify the filing for which the offsetting fee was
paid previously. Identify the previous filing by registration statement number,
or the Form or Schedule and the date of its filing.

1) Amount Previously Paid:

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2) Form, Schedule or Registration Statement No.:

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3) Filing Party:

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4) Date Filed:

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[NATIONAL OILWELL LOGO]

NATIONAL-OILWELL, INC.
5555 SAN FELIPE
HOUSTON, TEXAS 77056

NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD MAY 13, 1998

TO THE STOCKHOLDERS OF NATIONAL-OILWELL, INC.:

Notice is hereby given that the annual meeting of stockholders of
NATIONAL-OILWELL, INC. will be held at the Marathon Tower Auditorium, 5555 San
Felipe, Houston, Texas, at 11:00 A.M., local time, on Wednesday, May 13, 1998,
for the following purposes:

1. To elect a class of three directors, each for a term of three years
and until their successors shall be elected and qualified.

2. To transact such other business as may properly come before the
meeting or any adjournments thereof.

Only stockholders of record at the close of business on March 16, 1998 will
be entitled to notice of the annual meeting and to vote at the annual meeting
and at any adjournments thereof. A list of the stockholders will be available
for inspection at the company's offices during normal business hours for the 10
days prior to the meeting, and at the time and place of the meeting.

PLEASE DATE, SIGN AND PROMPTLY RETURN YOUR PROXY SO THAT YOUR SHARES MAY BE
VOTED IN ACCORDANCE WITH YOUR WISHES AND SO THAT THE PRESENCE OF A QUORUM MAY BE
ASSURED. THE GIVING OF SUCH PROXY DOES NOT AFFECT YOUR RIGHT TO VOTE IN PERSON
IN THE EVENT YOU ATTEND THE MEETING. YOU MAY REVOKE YOUR PROXY AT ANY TIME
BEFORE IT IS VOTED.

By order of the board of directors,

M. Gay Mather
Assistant Secretary

Houston, Texas
March 31, 1998

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NATIONAL-OILWELL, INC.
5555 SAN FELIPE
HOUSTON, TEXAS 77056

PROXY STATEMENT

ANNUAL MEETING OF STOCKHOLDERS

MAY 13, 1998

This proxy statement and the accompanying form of proxy are furnished on or
about March 31, 1998 in connection with the solicitation of proxies by the board
of directors of National-Oilwell, Inc. (the "Company") to be used at the annual
meeting of stockholders of the Company to be held at the Marathon Tower
Auditorium, 5555 San Felipe, Houston, Texas, at 11:00 A.M., local time, on
Wednesday, May 13, 1998, and at any adjournments thereof. This annual meeting is
the first to be held subsequent to the September 1997 combination of the Company
and Dreco Energy Services Ltd. ("Dreco"), an Alberta corporation. Holders of
Exchangeable Shares of Dreco ("Exchangeable Shares") are entitled, through a
voting trust, to vote at the annual meeting.

PURPOSE OF THE MEETING

At the meeting, the Company's stockholders will be asked to elect three
directors to hold office as provided by law and the Company's by-laws.

VOTING AT THE MEETING

Stockholders of record at the close of business on March 16, 1998 are
entitled to vote at the meeting. As of that date, there were outstanding
48,501,797 shares of common stock, par value $.01 per share ("Common Stock"), of
the Company. As of the record date, there were also 3,165,602 shares of
Exchangeable Shares outstanding and entitled to vote at the meeting through the
exercise by Montreal Trust Company of Canada, a trust company existing under the
laws of Canada (the "Trustee"), of certain voting rights, designed to be
equivalent to the voting rights of holders of Common Stock, under a Voting and
Exchange Trust Agreement dated September 25, 1997 (the "Voting Agreement").

The Exchangeable Shares entitle holders to dividend and other rights
economically equivalent to Common Stock, including the right through the Voting
Agreement to vote at Company stockholder meetings, and are exchangeable at the
option of the holders into Common Stock on a one-for-one basis. The Trustee
holds one share of Special Voting Stock, par value $0.01 per share, of the
Company (the "Special Voting Stock") that is entitled to a number of votes at
meetings of holders of Common Stock equal to the number of Exchangeable Shares
outstanding from time to time held by persons other than the Company and its
subsidiaries. Pursuant to the Voting Agreement, each holder of Exchangeable
Shares (other than the Company and its subsidiaries) is entitled to instruct the
Trustee as to the voting of the number of votes attached to the Special Voting
Stock represented by such holder's Exchangeable Shares. The Trustee will
exercise each vote attached to the Special Voting Stock only as directed by the
relevant holder, and, in the absence of instructions from a holder as to voting,
will not exercise such votes. A holder may also instruct the Trustee to give a
proxy to such holder entitling the holder to vote personally such holder's
relevant number of votes or to grant to the Company's management a proxy to vote
such votes. The Trustee has furnished (or caused the Company to furnish) this
Proxy Statement, the accompanying Notice of Meeting and certain related
materials to the holders of Exchangeable Shares.

Together as of the record date, the shares of Common Stock and Special
Voting Stock (which is entitled to a number of votes based on the Exchangeable
Shares) represented 51,667,399 shares outstanding and entitled to vote at the
annual meeting (all such shares being referred to herein as "Shares," and all
holders thereof being referred to herein as "stockholders" of the Company).

The Common Stock and the Special Voting Stock vote together as a single
class. As to each matter presented to a vote of stockholders of the Company,
each share of Common Stock is entitled to one vote and the one share of Special
Voting Stock is entitled to a number of votes equal to the number of
Exchangeable Shares outstanding from time to time held by persons other than the
Company and its subsidiaries.

The holders of a majority of the Shares entitled to vote, present in person
or represented by proxy, constitute a quorum. Directors are to be elected by a
plurality of the votes cast at the meeting. Except as provided by law or the
Company's Amended and Restated Certificate of Incorporation or by-laws, the
affirmative vote of the holders of a majority of the Shares, present in person
or represented by proxy, entitled to vote at the meeting is required to take
action with respect to any other matter that may properly be brought before the
meeting. Shares cannot be voted at the meeting unless the holder of record is
present in person or by proxy. The enclosed proxy is a means by which a
stockholder may authorize the voting of his or her shares at the meeting. The
Shares represented by each properly executed proxy card will be voted at the
meeting in accordance with each stockholder's direction. Stockholders are urged
to specify their choices by marking the appropriate boxes on the enclosed proxy
card; if no choice has been specified by a holder of Common Stock or the
Trustee, the Common Stock will be voted as recommended by the board of
directors. However, if no choice has been specified by a holder of Exchangeable
Shares, the Exchangeable Shares will not be voted with respect to such matter.
If any other matters are properly presented to the meeting for action, the proxy
holders will vote the proxies (which confer discretionary authority to vote on
such matters) in accordance with their best judgment.

With regard to the election of directors, votes may be cast in favor or
withheld; votes that are withheld will be excluded entirely from the vote and
will have no effect, other than for purposes of determining the presence of a
quorum. The Company believes that brokers that are member firms of the New York
Stock Exchange ("NYSE") and who hold Common Stock in street name for customers,
but have not received instructions from a beneficial owner, have the authority
under the rules of the NYSE to vote those shares with respect to the election of
directors.

Proxies may be revoked at any time prior to the time that the vote is taken
at the meeting. Proxies may be revoked by filing with the Secretary of the
Company or the Trustee, as applicable, a written revocation or another form of
proxy bearing a date later than the date of the proxy previously furnished. A
proxy may also be revoked by attending the meeting and voting in person.
Attendance at the meeting will not in and of itself constitute revocation of a
proxy.

YOUR PROXY VOTE IS IMPORTANT. ACCORDINGLY, YOU ARE ASKED TO COMPLETE, SIGN
AND RETURN THE ACCOMPANYING PROXY REGARDLESS OF WHETHER OR NOT YOU PLAN TO
ATTEND THE MEETING.

ELECTION OF DIRECTORS

The Amended and Restated Certificate of Incorporation of the Company
classifies the board of directors into three classes having staggered terms of
three years each. The number of directors is fixed from time to time by
resolution of the board adopted by a vote of a majority of the whole board of
directors serving at the time of that vote, but shall not be less than three.
The board of directors is currently set at nine members. Robert L. Phillips,
whose term of office was to expire in 2000, resigned from the board of directors
on February 12, 1998. The vacancy created by Mr. Phillips' resignation is
currently unfilled. It is the intention of the board of directors to reduce the
number of its members to eight at its May 13, 1998 meeting, to be held
immediately prior to the annual meeting of stockholders.

In January 1996, certain members of the Company's executive management
team, together with an investor group led by Inverness/Phoenix LLC and First
Reserve Corporation, purchased the business of the Company from its former
owners, USX Corporation and Armco Inc. On January 16, 1996, the Company and its
stockholders entered into a Stockholders Agreement which provided that, among
other things, four members of the Company's board of directors would be
designated by DPI Oil Service Partners Limited Partnership (of which
Inverness/Phoenix LLC serves as the managing general partner), two members of
the board would be designated by partnerships of which First Reserve Corporation
serves as the managing general partner, and the Chief Executive Officer and
Executive Vice President

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would serve as directors of the Company. Messrs. Bull, Comis, Dresher and
Dunwoody were designated to serve as directors by DPI Oil Service Partners
Limited Partnership. Messrs. Macaulay and Rothstein were designated to serve as
directors by the First Reserve Corporation partnerships. Mr. Staff was
designated to serve because he serves as the Company's Chief Executive Officer.
On October 29, 1996, the Company became a publicly-traded company upon
completion of an initial public offering (the "Offering"). The terms of the
Stockholders Agreement concerning rights to designate members of the board of
directors terminated automatically upon completion of the Offering.

In connection with the combination with Dreco, on September 25, 1997,
Frederick W. Pheasey and Robert L. Phillips were appointed to the Company's
board of directors.

Howard I. Bull, James C. Comis III and Frederick W. Pheasey, the three
directors whose terms expire in 1998, have each consented to serve another term
and will be presented to the stockholders for election as directors at the
annual meeting. The remaining five directors will continue to serve in
accordance with their prior election or appointment.

At the meeting, proxies in the accompanying form, properly executed, will
be voted for the election of the three nominees, unless authority to do so has
been withheld in the manner specified in the instruction on the proxy or revoked
in the manner previously described. Discretionary authority is reserved to cast
votes for the election of a substitute recommended by the board of directors
should any nominee be unable or unwilling to serve as a director. The Company
believes that all of the nominees will be available to serve.

The three directors are to be elected by a plurality of the votes cast. A
stockholder entitled to vote for the election of directors can withhold
authority to vote for all nominees for director or can withhold authority to
vote for any nominee for director.

THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS A VOTE FOR EACH OF THE NOMINEES.

REQUIREMENTS FOR ADVANCE NOTIFICATION OF NOMINATIONS

The Company's Amended and Restated Certificate of Incorporation provides
that, subject to certain limitations discussed below, nominations of persons for
election to the Board of Directors may be made at any annual meeting of
stockholders (or at any special meeting of stockholders called for the purpose
of electing directors) by any stockholder of the Company (i) who is a
stockholder of record on the date of the giving of the notice and on the record
date for the determination of stockholders entitled to vote at such meeting and
(ii) who complies with the notice procedures set forth below. Holders of
Exchangeable Shares will be deemed to satisfy these requirements by complying
with the notice procedures set forth below and timely delivering such notice to
the Trustee.

To be timely, a stockholder's notice to the Company must be received at the
Company's principal executive offices by the later of (i) ninety days before the
meeting of stockholders or (ii) ten days after the first public notice of that
meeting is sent to stockholders. The Company must receive from the stockholder a
notice that sets forth (i) that stockholder's name and address (as they appear
on the records of the Company), business address and telephone number, resident
address and telephone number, and the number of shares of each class of stock of
the Company beneficially owned by that stockholder; and (ii) a description of
all arrangements or understandings between such stockholder and each proposed
nominee and any other person or persons (including their names) pursuant to
which the nominations are to be made by such stockholder. The notice must
provide with respect to each nominee (i) that nominee's name, business address
and telephone number, and residence address and telephone number; (ii) the
number of shares, if any, of each class of stock of the Company owned directly
or beneficially by that nominee; (iii) any other information relating to that
nominee that would be required to be disclosed in a proxy statement or other
filings required to be made in connection with solicitations of proxies for
election of directors pursuant to Regulation 14A of the Securities Exchange Act
of 1934, as amended (the "Exchange Act"); and (iv) a duly acknowledged letter
signed by the nominee stating his or her acceptance of the nomination by that
stockholder, stating his or her intention to serve as director if elected, and
consenting to being named as a nominee for director in any proxy statement
relating to such election.

Notices in respect of nominations for directors must be received by the
Company no later than April 30, 1998.

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INFORMATION REGARDING NOMINEES FOR ELECTION AS DIRECTORS AND REGARDING
CONTINUING DIRECTORS

The information provided herein as to personal background has been provided
by each director and nominee as of March 16, 1998. The periods shown for service
as an employee of the Company by Mr. Staff includes service as an employee of
the predecessor partnership to the Company.

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NOMINEES FOR ELECTION AT THE 1998 ANNUAL MEETING
FOR TERMS EXPIRING IN 2001
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Howard I. Bull Mr. Bull has served as a Director of the Company since
January 1996. Mr. Bull was President, Chief Executive
Officer and a director of Dal-Tile International, Inc.,
which is the largest manufacturer and distributor of
tile in North America, from April 1994 to his retirement
in June 1997. Prior to joining Dal-Tile International,
Inc., Mr. Bull spent 10 years with Baker Hughes
Incorporated, a worldwide diversified oil services
company, where he became Chief Executive Officer for
Baker Hughes Drilling Equipment Company. Additionally,
he served York International Corporation, a worldwide
manufacturer and distributor of air conditioner and
refrigeration equipment, as President of its Applied
Systems Division and Air Conditioning Business Group.
Mr. Bull also serves as a director of Marine Drilling
Companies, Inc., an offshore drilling contractor, and
NATCO Holdings, Inc., a manufacturer of oil and gas
processing equipment. Age: 57.

James C. Comis III Mr. Comis has served as a Director of the Company since
January 1996. He is a Managing Director of Inverness
Management LLC. Through Inverness Management LLC and its
affiliates, Mr. Comis has been engaged in sponsoring and
investing in private equity transactions since 1990.
Additionally, Mr. Comis has served as Managing Director
of Inverness/Phoenix LLC since 1994. Age: 33.

Frederick W. Pheasey Mr. Pheasey has served as a Director and Executive Vice
President of the Company since September 1997. He was a
co-founder of Dreco and was employed by that company and
its predecessors from 1972 to September 1997, most
recently as its Chairman. Age: 55.

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DIRECTORS CONTINUING IN OFFICE WITH
TERMS EXPIRING IN 1999
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W. McComb Dunwoody Mr. Dunwoody has served as a Director of the Company
since January 1996. He is a Managing Director of
Inverness Management LLC. Through Inverness Management
LLC and its affiliates, Mr. Dunwoody has been engaged in
sponsoring and investing in private equity transactions
since 1981. Additionally, Mr. Dunwoody has served as
President and Chief Executive Officer of
Inverness/Phoenix LLC since 1994 and has been Chief
Executive Officer of The Inverness Group Incorporated
since 1981. Age: 53.

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William E. Macaulay Mr. Macaulay has served as a Director of the Company
since January 1996. He has been the President and Chief
Executive Officer of First Reserve Corporation, a
corporate manager of private investments focusing on the
energy and energy-related sectors, since 1983. Mr.
Macaulay serves as a director of Weatherford Enterra,
Inc., an oilfield service company, Maverick Tube
Corporation, a manufacturer of steel pipe and casing,
TransMontaigne Oil Company, an oil products distribution
and refining company, Hugoton Energy Corporation, an
independent oil and gas exploration and production
company, Cal Dive International, Inc., a provider of
subsea services in the Gulf of Mexico, and Domain Energy
Corporation, an oil and gas exploration company. Age:
52.

Joel V. Staff Mr. Staff has served as the President and Chief
Executive Officer of the Company since July 1993 and
Chairman of the Board since January 1996. Prior to
joining the Company, he served as a Senior Vice
President of Baker Hughes Incorporated, a worldwide
diversified oil services company, from October 1983 to
May 1993. Mr. Staff also serves as a director of Denali
Incorporated, a provider of products and services for
handling critical fluids. Age: 54.

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DIRECTORS CONTINUING IN OFFICE WITH
TERMS EXPIRING IN 2000
- --------------------------------------------------------------------------------

James T. Dresher Mr. Dresher has served as a Director of the Company
since January 1996. Mr. Dresher has been Chairman and
owner of Glenangus, a residential real estate
development company, since 1972. In addition, he served
as Chairman/Chief Executive Officer and principal owner
of Unidata, Inc., a Denver-based software company, from
December 1991 to February 1998. Mr. Dresher serves as a
director of Ardent Software Inc., a data management
company. Age: 78.

Bruce M. Rothstein Mr. Rothstein has served as a Director of the Company
since May 1996. Mr. Rothstein is a Managing Director of
First Reserve Corporation, which he joined in 1991.
Prior to joining First Reserve, he served as Treasurer
and Chief Accounting Officer of Computer Factory, Inc.
Mr. Rothstein also serves as a director of Anker Coal
Group, Inc., a producer and marketer of coal, and Entech
Industries, Inc., a manufacturer of high-end valves used
principally in sub-sea gathering systems. Age: 46.

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SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

PRINCIPAL HOLDERS OF SHARES

The following entities were beneficial owners of more than five percent of
Shares as of the dates indicated:

Voting Power Investment Power
-------------- -----------------
Shares Percent
Beneficially of
Name and Address Owned Class (1) Sole Shared Sole Shared
- ---------------- ------------ ---------- ---- ------ ---- ------

Inverness/Phoenix LLC (2) 10,203,600 19.75% -0- 10,203,600 -0- 10,203,600
660 Steamboat Road
Greenwich, CT 06830

First Reserve Corporation (3) 8,370,494 16.20% -0- 8,370,494 -0- 8,370,494
475 Steamboat Road
Greenwich, CT 06830

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(1) On March 16, 1998, there were 51,667,399 Shares outstanding.

(2) Represents shares beneficially owned as of March 16, 1998 by the following
partnerships of which, in each case, Inverness/Phoenix LLC is the managing
general partner: DPI Oil Service Partners Limited Partnership - 9,450,562;
and DPI Partners II - 753,038. Inverness/Phoenix LLC, in its role as
managing general partner of the partnerships, has the power to cause each
partnership to dispose of or to vote shares held by each partnership.
Messrs. Comis and Dunwoody, each of whom is a director of the Company,
serve on the investment committee of Inverness/Phoenix LLC, which
committee has sole power to vote and dispose of that company's
investments. See footnote (3) on page 7 of this proxy statement for the
ownership interests of Messrs. Bull and Dresher, each of whom is a
director of the Company, in DPI Oil Service Partners Limited Partnership.

(3) Represents shares beneficially owned as of March 16, 1998 by the following
limited partnerships of which, in each case, First Reserve Corporation is
the managing general partner: First Reserve Fund V, Limited Partnership -
334,830; First Reserve Fund VI, Limited Partnership - 7,700,834; and First
Reserve Fund V-2, Limited Partnership - 334,830. First Reserve
Corporation, in its role as managing general partner of the partnerships,
has the power to cause each partnership to dispose of or to vote shares
held by each partnership. Mr. Macaulay and Mr. John A. Hill, stockholders
of First Reserve Corporation, may be deemed to share beneficial ownership
of shares owned by First Reserve Corporation as a result of Messrs.
Macaulay's and Hill's ownership of common stock of First Reserve
Corporation. Both Messrs. Macaulay and Hill disclaim beneficial ownership
of all such shares.

OWNERSHIP OF SHARES BY DIRECTORS AND OFFICERS

The following table sets forth certain information with respect to Shares
beneficially owned by each director and nominee for director of the Company, by
each of the current executive officers named in the Summary Compensation Table
and by all current directors and executive officers of the Company as a group.
This information has been provided by each of the directors and executive
officers as of March 31, 1998, at the request of the Company and includes shares
subject to stock options granted under the Company's stock option plans that are
exercisable within 60 days of March 31, 1998.

Shares Percent
Name of individual beneficially of class
or identity of group owned(1) outstanding(2)
-------------------- -------- --------------

Howard I. Bull ....................................... 1,333(3) *
James C. Comis ....................................... 10,204,933(4) 19.75%
James T. Dresher ...................................... 1,333(3) *
W. McComb Dunwoody.................................. 10,204,933(4) 19.75%
James J. Fasnacht...................................... 362,065 *
Steven W. Krablin...................................... 321,585 *
William E. Macaulay.................................... 8,371,827(5) 16.20%
Merrill A. Miller .................................... 196,470 *
Frederick W. Pheasey................................... 330,610 *
Bruce M. Rothstein ................................... 1,333 *
Joel V. Staff ........................................ 1,808,622(6) 3.50%
All current directors and executive officers as a group
(15 persons)......................................... 22,375,539 43.25%

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* Denotes ownership of less than one percent of the class outstanding.

(1) This column includes shares subject to options granted pursuant to the
Company's stock option plans which are exercisable by May 30, 1998. Messrs.
Bull, Comis, Dresher, Dunwoody, Macaulay and Rothstein each hold
unexercised options to purchase 1,333 of such shares, and Messrs. Krablin,
Fasnacht and Miller each hold unexercised options to purchase 5,019 of such
shares.

(2) At March 16, 1998, there were 51,667,399 Shares outstanding. Shares not
outstanding but beneficially owned by a given person are deemed outstanding
for purposes of computing the percentage of Shares owned by such person,
but not for purposes of computing the percentage owned by any other person.

(3) Messrs. Bull and Dresher have a 5.714% and 4.082% interest, respectively,
in DPI Partners I, a general partnership which holds a limited partnership
interest in DPI Oil Service Partners Limited Partnership. Additionally,
Messrs. Bull and Dresher each hold a limited partnership interest in DPI
Oil Service Partners Limited Partnership, which holds 9,450,562 shares of
the Common Stock. The interests of Mr. Bull, Mr. Dresher and DPI Partners I
in DPI Oil Service Partners Limited Partnership, after the return of the
original investment plus interest, are approximately 1.3%, 3.3% and 20.0%,
respectively. Messrs. Bull and Dresher each disclaim beneficial ownership
of all such shares.

(4) Includes 10,203,600 shares beneficially owned by Inverness/Phoenix LLC of
which Messrs. Comis and Dunwoody are principals.

(5) Includes 8,370,494 shares beneficially owned by First Reserve Corporation
of which Mr. Macaulay is President and Chief Executive Officer. Mr.
Macaulay disclaims beneficial ownership of all such shares.

(6) Includes 1,057,628 shares owned by the trusts created by that certain Trust
Agreement dated April 12, 1989 by and among Joel V. Staff and Mary Martha
Staff, as Trustors, and Richard Staff, as Trustee. Mr. Staff does not vote
nor exercise investment power over and disclaims beneficial ownership of
these shares.

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MEETINGS AND COMMITTEES OF THE BOARD

During 1997, four meetings of the board of directors of the Company were
held. The Company's by-laws provide that the board of directors, by resolution
adopted by a majority of the board, may designate an Executive Committee and one
or more other committees, with each such committee to consist of one or more
directors.

Executive Committee. The executive committee has the full power and
authority to exercise all the powers of the board of directors in the management
of the Company except the power to fill vacancies in the board of directors and
the power to amend the by-laws. The Executive Committee met twice during 1997.
The current members of the Executive Committee are W. McComb Dunwoody, committee
chairman, William E. Macaulay and Joel V. Staff.

Audit Committee. The audit committee is composed of directors who are not
officers of the Company or any of its subsidiaries. The current members of the
audit committee are James T. Dresher, committee chairman, and Howard I. Bull.
The audit committee meets periodically with the Company's financial and
accounting officers, management and independent public accountants to review the
scope of auditing procedures, policies relating to internal auditing and
accounting procedures and controls. It also provides general oversight with
respect to the accounting principles employed in the Company's financial
reporting, reviews litigation and other legal matters that may affect the
Company's financial condition and monitors compliance with the Company's
business ethics and other policies. The audit committee met twice during 1997.

Compensation Committee. The compensation committee is composed of members
of the board who are not officers of the Company or any of its subsidiaries.
This committee has general supervisory power over, and the power to grant awards
under, the Company's stock award plans. In addition, the compensation committee
reviews the recommendations of the Chief Executive Officer as to appropriate
compensation of the Company's principal executive officers and certain other key
personnel and establishes the compensation of such persons and the Chief
Executive Officer. It also periodically examines the general compensation
structure of the Company and supervises the welfare and pension plans and
compensation plans of the Company. The compensation committee met twice during
1997. Its current members are Howard I. Bull, committee chairman, and James T.
Dresher.

COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION

From August 1996 through March 20, 1997, William E. Macaulay was a member
of the compensation committee. Mr. Macaulay is the president and chief executive
officer of First Reserve Corporation. In connection with the acquisition of the
Company's predecessor partnership in 1996, the Company entered into a five-year
Management Services Agreement pursuant to which First Reserve Corporation would
receive certain fees for specific acquisitions. In connection with the Company's
initial public offering, this agreement was terminated pursuant to a Deferred
Fee Agreement under which the Company paid First Reserve Corporation an
aggregate amount of $225,000 in 1997. No additional amounts are payable.

EXECUTIVE OFFICERS OF THE COMPANY

Set forth below is certain information regarding each of the Company's
current executive officers. Executive officers of the Company are elected
annually by the board of directors to serve in their respective capacities until
their successors are duly elected and qualified or until their earlier
resignation or removal. The periods shown for service as an employee of the
Company include service as an employee of the predecessor partnership of the
Company.

Joel V. Staff Mr. Staff has served as the President and Chief
Executive Officer of the Company since July 1993 and
Chairman of the Board since January 1996. Prior to
joining the Company, Mr. Staff served as a Senior Vice
President of Baker Hughes Incorporated, a worldwide
diversified oil services company, from October 1983 to
May 1993. Mr. Staff also serves as a director of Denali
Incorporated, a provider of products and services for
handling critical fluids. Age: 54.

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James J. Fasnacht Mr. Fasnacht has served as Vice President since November
1993, as Group President, Distribution Services since
April 1997, as General Manager of Pumping Systems from
November 1993 to April 1997, as Human Resources Manager
from 1991 to November 1993 and in various other
capacities since joining the Company in 1979. Age: 43.

W. Douglas Frame Mr. Frame has served as Vice President and Group
President, Downhole Products since the Company's
combination with Dreco in September 1997. Prior thereto
he served as a director of Dreco since 1980 and as an
employee of Dreco, primarily responsible for its
downhole products marketing operations. Age: 55.

Steven W. Krablin Mr. Krablin has served as Vice President and Chief
Financial Officer since January 1996. Mr. Krablin served
in various capacities including Vice President-Finance
and Chief Financial Officer of Enterra Corporation, an
NYSE-listed, international oilfield service company,
from November 1986 to January 1996. Age: 47.

Gail M. McGee Ms. McGee has served as Vice President and Chief
Information Officer since June 1997. From May 1996 to
March 1997, Ms. McGee was Chief Information Officer of
J.D. Power and Associates, a survey firm. From February
1994 to May 1996, she served as Vice President of Wells
Fargo Bank. From January 1988 to February 1994, Ms.
McGee was Vice President, Department Head of
Productivity and Organizational Readiness at Chemical
Bank. Age: 50.

Merrill A. Miller, Jr. Mr. Miller has served as Vice President since July 1996,
as Group President, Products and Technology since April
1997, as General Manager of Drilling Systems from July
1996 to April 1997 and as Vice President of Marketing,
Drilling Systems from February 1996 to July 1996. Prior
thereto, Mr. Miller was President of Anadarko Drilling
Company, a drilling contractor, from January 1995 to
February 1996. From May 1980 to January 1995, Mr. Miller
served in various capacities including Vice
President/U.S. Operations of Helmerich & Payne
International Drilling Co., a drilling contractor. Age:
47.

Jerry N. Gauche Mr. Gauche has served as Vice President-Organizational
Effectiveness since joining the Company in January 1994.
Prior thereto, Mr. Gauche was employed by BP
Exploration, Inc., an oil and gas exploration and
production company, where he served as General Manager
of Central Services from January 1990 to September 1992
and Director of Public Affairs and Executive
Coordination from May 1988 to December 1989. From
October 1992 to January 1994, Mr. Gauche was
self-employed managing his personal investments. Age:
49.

Paul M. Nation Mr. Nation has served as Secretary and General Counsel
of the Company since 1987 and as Vice President since
1994. Mr. Nation has resigned as Vice President,
Secretary and General Counsel, effective April 17, 1998.
Age: 43.

9
12

REMUNERATION OF DIRECTORS AND EXECUTIVE OFFICERS

The following table sets forth for the years ended December 31, 1995, 1996
and 1997 the compensation paid by the Company to its Chief Executive Officer and
four other most highly compensated executive officers (the "Named Executive
Officers").

SUMMARY COMPENSATION TABLE
- -------------------------------------------------------------------------------------------------------------------------------
Long-Term Compensation
-------------------------------------
Annual Compensation Awards Payouts
------------------------------------- -------------------- -------------
Other
Name Annual Restricted Securities All Other
and Compen- Stock Underly- LTIP Compen-
Principal sation Award(s) ing Options/ Payouts sation
Position Year Salary($) Bonus($) ($) ($)(1) SARs (#) ($)(2) ($)(3)
- ----------------------- ------- --------- -------- ----------- --------- ---------- ------------- ----------

Joel V. Staff 1997 300,000 191,250 -- -- -- -- 14,054
Chairman, 1996 291,352 186,983 -- 2,567 -- 1,675,423 14,512
President and CEO 1995 275,016 -- -- -- -- -- 11,011

Lynn L. Leigh 1997 195,000 102,375 -- -- -- -- 11,787
Sr. Vice 1996 195,000 103,209 -- -- -- 1,256,846(5) 9,242
President(4) 1995 195,000 -- -- -- -- -- 7,810

Merrill A. Miller 1997 162,307 85,211 -- -- 15,058 -- 3,486
Group President - 1996 135,577 71,758 -- 856 -- 558,474 --
Products & Technology 1995 -- -- -- -- -- -- --

James J. Fasnacht 1997 150,769 79,154 -- -- 15,058 -- 12,478
Group President - 1996 120,000 63,513 -- 856 -- 558,474 7,683
Distribution Services 1995 101,504 -- -- -- -- -- 5,204

Steven W. Krablin 1997 150,000 78,750 -- -- 15,058 -- 3,755
Vice President 1996 144,231 76,338 -- 856 -- 558,474 --
and CFO 1995 -- -- -- -- -- -- --

- ----------------
(1) The number and value at December 31, 1997 of restricted stockholdings for
the named executive officers are: Mr. Staff - 451,864 shares, $15,448,100; Mr.
Miller - 150,604 shares, $5,148,774; Mr. Fasnacht - 150,604 shares, $5,148,774;
and Mr. Krablin - 150,604 shares, $5,148,774. The forfeiture restrictions lapse
in equal annual amounts each January 17, 1998 through 2001, and in their
entirety upon a participant's disability, death or involuntary termination
without cause. The recipients of restricted stock awards are only entitled to
dividends declared upon shares issued pursuant to the award upon the lapse of
forfeiture restrictions.

(2) Represents total amounts accrued to the named individuals except for Mr.
Leigh with respect to payments under the Company's Value Appreciation and
Incentive Plans, which provided for certain executive officers of the company to
qualify for an award upon the occurrence of certain events, including an initial
public offering. Distributions under the plans will be made in cash and stock
until January 17, 2001. Cash distributions made under the plans as of December
31, 1997 are as follows: Mr. Staff - $418,874; Mr. Miller - $139,625; Mr.
Fasnacht - $139,625; and Mr. Krablin - $139,625. Stock distributions made under
the plans as of December 31, 1997 are as follows: Mr. Staff - 24,644 shares; Mr.
Miller - 8,214 shares; Mr. Fasnacht - 8,214 shares and Mr. Krablin - 8,214
shares.

(3) These amounts include:

(a) The Company's cash contributions for 1997 under the National-Oilwell
Retirement and Thrift Plan, a defined contribution plan, on behalf of Mr.
Staff, $10,554; Mr. Leigh - $10,912; Mr. Miller - $3,486; Mr. Fasnacht -
$10,696; and Mr. Krablin - $2,515.

(b) The Company's cash contributions for 1997 under the National-Oilwell
Supplemental Savings Plan, a defined contribution plan, on behalf of Mr.
Staff - $3,500; Mr. Leigh - $875; Mr. Fasnacht - $1,782; and Mr. Krablin -
$2,515.

(4) Mr. Leigh retired on January 31, 1998.

(5) Represents total amount accrued to Mr. Leigh under the Company's Value
Appreciation and Incentive Plan A, which provided for certain key employees of
the Company to qualify for an award upon the occurrence of certain events,
including an initial public offering. Distributions under this plan will be made
in cash and stock until January 17, 1999. At December 31, 1997, Mr. Leigh had
received a cash distribution under this plan in the amount of $418,949 and a
stock distribution of 49,288 shares.

10
13

GRANTS OF OPTIONS/SAR'S IN LAST FISCAL YEAR

The following table provides information concerning stock options granted
to Named Executive Officers as of December 31, 1997. On November 18, 1997, the
Company effected a two-for-one stock split. All stock option grant awards were
adjusted accordingly. The Company has granted no stock appreciation rights.

Potential Realizable
Value at Assumed
Annual Rates of
Stock Price
Appreciation for
Individual Grants Option Term
- --------------------------------------------------------------------------------------- --------------------
% of total
Number of Options
Securities Granted to Exercise
Underlying Employees in Price Expiration
Name Options Granted Fiscal Year ($/Share) Date 5% ($) 10% ($)
- ---------------------------- --------------- ------------ --------- ---------- ------ --------

Merrill A. Miller 15,058 4.8% 15 15/16 03/21/02 66,303 146,514
James J. Fasnacht 15,058 4.8% 15 15/16 03/21/02 66,303 146,514
Steven W. Krablin 15,058 4.8% 15 15/16 03/21/02 66,303 146,514

The option exercise price per share is equal to the fair market value of a
share of Common Stock on the date of grant. The grants have a term of five years
from the date of grant and vest in three equal annual installments beginning one
year from the date of grant.

FY-END OPTION VALUES

The following table provides the value of unexercised options held by the
Named Executive Officers as of December 31, 1997. None of the options held by
the Named Executive Officers were exercisable at December 31, 1997.

Number of Securities Value of Unexercised
Underlying Unexercised In-the Money Options
Options at FY-End (#) at FY-End ($)
Name Unexercisable Unexercisable
------------------------ ------------------------- ------------------------

Merrill A. Miller 15,058 274,809
James J. Fasnacht 15,058 274,809
Steven W. Krablin 15,058 274,809

11
14

COMPENSATION OF DIRECTORS

Directors who are full-time employees of the Company do not receive a
retainer or fees for service on the board of directors or on committees of the
board. Members of the board of directors who are not full-time employees of the
Company receive an annual fee of $20,000, a fee of $1,000 for attendance at each
meeting of the board of directors and at each meeting of its committees or any
special committee established by the board, and a fee of $1,000 per day for any
special assignments. The chairmen of the audit and compensation committees
receive a fee of $1,250 for attendance at each meeting of the committee they
chair. In addition, directors of the Company (including directors who are not
full-time employees of the Company) are eligible for grants of stock options,
other than ISOs, and other awards under the Company's Amended and Restated Stock
Award and Long-Term Incentive Plan. On March 21, 1997, each non-employee
director of the Company was granted a non-qualified stock option to purchase
4,000 shares of the Company's common stock, and on February 18, 1998 each
non-employee director was granted a non-qualified stock option to purchase 4,163
shares of the Company's common stock. The option exercise price per share is
equal to the fair market value of a share of common stock on the date of grant.
The options have a term of five years from the date of grant and vest in three
equal annual installments beginning one year after the date of grant.

EMPLOYMENT CONTRACTS

Effective as of January 1, 1996, the Company entered into an employment
agreement with Messrs. Staff, Fasnacht, and Krablin and on February 5, 1996
entered into an employment agreement with Mr. Miller. Each of the agreements
provides for a base salary, participation in an employee incentive plan and
employee benefits as generally provided to all employees. The agreements provide
for the following base salaries in 1998: Mr. Staff - $383,680; Mr. Fasnacht -
$180,000; Mr. Krablin - $178,800 and Mr. Miller - $190,000. The agreements have
a continuing term of two years in the case of Mr. Staff and one year for each of
the other executive officers. The Company is not obligated to pay any amounts
pursuant to the employment agreements upon (i) voluntary termination; (ii)
termination for cause (as defined); (iii) death; (iv) long-term disability; or
(v) employee's refusal to accept comparable employment with a successor
corporation. If the employment relationship is terminated by the Company for any
other reason, or by the employee due to an uncorrected material breach of the
employment agreement by the Company, the employee is entitled to receive his
base salary and current year targeted bonus amount under an employee incentive
plan either as a lump sum payment or over the one-year term, or two-year term in
the case of Mr. Staff, as determined by the employment agreement under the
circumstances. During the period of employment and for a period after
termination of two years for Mr. Staff and one year for each of the other
executive officers, the employees are generally prohibited from competing or
assisting others to compete in its existing or recent business, or inducing any
other employee to terminate employment with the Company.

Upon termination, other than for cause, participants in the Company's
Value Appreciation and Incentive Plans A and B, including each of the Named
Executive Officers, are entitled to any amounts accrued on their behalf for
which they have not yet received a distribution. Each of the Named Executive
Officers other than Mr. Leigh is a recipient of a restricted stock award under
the Company's Amended and Restated Stock Award and Long-Term Incentive Plan.
Under the terms of the Restricted Stock Agreements pursuant to which the
restricted stock awards were issued, any restricted stock must be resold to the
Company for $0.01 per share if the recipient's employment with the Company is
terminated for any reason prior to the lapse of the forfeiture restrictions. The
forfeiture restrictions lapse each year beginning January 17, 1997, on 20% of
the total number of shares of restricted stock awarded to each participant and
in their entirety upon a participant's disability, death or involuntary
termination of employment without cause.

COMPENSATION COMMITTEE REPORT ON EXECUTIVE COMPENSATION

Since the Company's common stock became a publicly-traded security in
October 1996, the compensation committee's philosophy regarding the Company's
executive compensation program has been to design a compensation package that
will attract and retain key executives focused on the Company's annual growth
and long-term strategy. The committee intends to achieve this objective through
payment of a total compensation package that approximates the industry median
but that is weighted to the performance of the Company. Base pay and cash
incentives are intended to be below the market median, while incentives such as
stock options are intended to be above the market median.

12
15

The Company's executive compensation program is administered by the
compensation committee of the board of directors. The committee establishes
specific compensation levels for executive officers and other key personnel and
administers the Company's stock award plans and the Company's Value Appreciation
and Incentive Plans A and B.

The Company's executive officers in 1997 received certain cash and stock
awards under the Company's Value Appreciation and Incentive Plans. Distributions
under these awards will occur through January 2001. These awards were provided
primarily in consideration of the executive officers' assistance and
participation in the purchase of the Company's business from its previous owners
and the Company's initial public offering. These awards were not designed as
part of the Company's overall executive compensation program and were not
regarded by the compensation committee as such.

The main components of the executive compensation program for 1997 were
base salary, participation in one of the Company's incentive plans and the grant
of non-qualified stock option awards. Salary levels are based on factors
including individual performance and level and scope of responsibility. In
establishing the base salary levels for the executive officers (other than Mr.
Staff) the compensation committee considers the recommendations of Mr. Staff, to
whom these officers report. The compensation committee targets base salary
levels at or below the median industry peer level, which is determined by
consideration of compensation survey reports and salary levels paid by similar
companies in the oilfield service industry. The companies used for comparison
purposes include, but are not limited to, those companies included in the
Company's peer group index.

All employees of the Company, including executive officers, participated
in a Company incentive plan in 1997 (the "1997 Incentive Plan"). The incentive
plans are designed to align a portion of each employee's cash compensation with
Company performance. The amount of the aggregate award under the plans was
determined by the Company's performance objectives based on measures of
operating profit and the ratio of operating profit to capital employed. A
minimum performance level had to be achieved by the Company before any award was
earned, and higher levels of achievement were rewarded with increasing payments
based upon an established progression. A participant's award varied depending
upon the level of his or her participation. The maximum award opportunity for
the chief executive officer under the 1997 Incentive Plan was approximately 65%
of base salary and for the other executive officers was approximately 50% of
base salary.

Compensation of the Chief Executive Officer. Components of the chief
executive officer's compensation for 1997 included base salary and participation
in the 1997 Incentive Plan. In determining Mr. Staff's compensation for 1997,
the committee considered the compensation level of chief executive officers of
comparable companies and the continued successful growth of the Company's
revenues and profitability. The committee believes Mr. Staff's base salary level
to be below the median industry peer level. As described above, Mr. Staff was
eligible to receive a bonus equal to approximately 65% of his base salary in
1997 under the 1997 Incentive Plan. The Company achieved its maximum performance
targets established by the plan and, accordingly, Mr. Staff was paid the maximum
bonus award possible. Mr. Staff's base annual salary was increased in 1998 from
$300,000 to $383,680.

COMPENSATION COMMITTEE

Howard I. Bull, Chairman
James T. Dresher

13
16

PERFORMANCE GRAPH

The following line graph shows the cumulative total stockholder return on
the Common Stock from October 29, 1996, the first trading day after the date it
was registered under the Exchange Act, to December 31, 1997, and compares it
with the cumulative total return over the same period of the S&P 500 Index and
to a self-constructed peer group of similar companies in the oilfield service
industry (which includes BJ Services Company, Camco International Inc., Cooper
Cameron Corporation, Tuboscope Vetco International Corporation and Varco
International Incorporated). The graph assumes a $100 investment in Common Stock
based on the initial per share price to the public of $17.00 and in each index
at October 29, 1996 and that all dividends were reinvested. Peer group returns
are based on the market capitalization of each individual company within the
peer group at the beginning of the comparison period.

[GRAPH]

OCT. 29, 1996 DEC. 31, 1996 DEC. 31, 1997
------------- ------------- -------------

National-Oilwell, Inc. 100 181 402
Peer Group 100 118 180
S&P 500 100 106 141

14
17

CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

FEE AGREEMENTS

In connection with the acquisition of the Company's predecessor
partnership in 1996, the Company entered into a five-year Management Services
Agreement with its largest stockholder, Inverness/Phoenix LLC, whereby the
Company would pay $1.0 million per year for management assistance and other
services as agreed. The agreement also provided that Inverness/Phoenix LLC
receive 1% of the aggregate transaction value in connection with each
acquisition or disposition completed during the five-year period and that First
Reserve Corporation, the Company's second largest stockholder, receive certain
fees for specific acquisitions. In connection with the Company's initial public
offering, this agreement was terminated pursuant to a Deferred Fee Agreement
which provides for cash payments of up to $4.4 million. During 1997 and 1996,
cash payments aggregating $2.5 million were made to Inverness/Phoenix LLC and
First Reserve Corporation in connection with the Deferred Fee Agreement. Future
quarterly payments of $250,000 will continue to be made to Inverness/Phoenix LLC
through December 31, 1999.

SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE

Section 16(a) of the Exchange Act requires executive officers and directors
of the Company and persons who own more than 10% of the Common Stock, to file
reports of ownership and changes in ownership with the SEC and the New York
Stock Exchange. Based solely on its review of copies of such reports received by
the Company and written representations from certain reporting persons that no
Form 5's were required for those persons, the Company believes that during 1997,
all Section 16(a) filing requirements applicable to the Company's officers,
directors and greater than 10% stockholders have been met.

SELECTION OF INDEPENDENT AUDITORS

The board of directors has selected Ernst & Young LLP, the Company's
independent public accountants, to continue in such capacity for the current
year. Representatives of that firm are expected to be present at the annual
meeting with the opportunity to make a statement if they desire to do so and are
expected to be available to respond to appropriate questions.

PROXY SOLICITATION

The cost of soliciting proxies will be paid by the Company. Beacon Hill
Partners, Inc., 90 Broad Street, New York, New York has been employed to solicit
proxies in connection with the Company's Common Stock and the voting of the
Exchangeable Shares, in the United States and Canada, by mail, telephone or
personal solicitation for a fee of approximately $2,750 plus expenses. The
Company will also reimburse brokers or other persons holding stock in their
names or in the names of their nominees for their reasonable expenses in
forwarding proxy material to beneficial owners of stock, in accordance with
applicable requirements of the SEC, New York Stock Exchange, Canadian securities
commissions and The Toronto Stock Exchange. Proxies may also be solicited by
directors, officers and employees of the Company, but such persons will not be
specially compensated for such services.

STOCKHOLDER SUGGESTIONS AND PROPOSALS
FOR THE 1999 ANNUAL MEETING

Consideration of certain matters is required at the annual meeting of
stockholders, such as the election of directors. In addition, pursuant to
applicable regulations of the SEC, stockholders may present resolutions that are
proper subjects for inclusion in the proxy statement and for consideration at
the annual meeting by submitting their proposals to the Company on a timely
basis. In order to be included for the 1999 annual meeting, resolutions should
be addressed to the Secretary, National-Oilwell, Inc., 5555 San Felipe, Houston,
TX 77056 or, in the case of the Holders of Exchangeable Shares, to the Trustee,
and in either case must be received by December 1, 1998.

15
18

OTHER MATTERS

The board of directors is not aware of any other matters that may come
before the meeting. However, if any further business should properly come before
the meeting, the persons named in the enclosed proxy will vote upon such
business in accordance with their best judgment.

A copy of the Company's 1997 Annual Report to Stockholders is being
transmitted herewith, but does not constitute part of the proxy solicitation
materials.

By order of the board of directors,

M. Gay Mather
Assistant Secretary

Houston, Texas
March 31, 1998

16
19
[NATIONAL OILWELL LOGO]

NATIONAL-OILWELL, INC.
PROXY SOLICITED ON BEHALF OF BOARD OF DIRECTORS FOR THE ANNUAL MEETING OF
STOCKHOLDERS ON MAY 13, 1998.

The undersigned hereby appoints M. Gay Mather and Daniel L. Molinaro or either
of them with full power of substitution, the proxy or proxies of the undersigned
to attend the annual meeting of stockholders of National-Oilwell, Inc. to be
held on Wednesday, May 13, 1998, and any adjournments thereof, and to vote the
shares of stock that the signer would be entitled to vote if personally present
as indicated on the reverse side and, at their discretion, on any other matters
properly brought before the meeting, and any adjournments thereof, all as set
forth in the March 31, 1998 proxy statement (the "Proxy Statement").

This proxy is solicited on behalf of the board of directors of National-Oilwell,
Inc. The shares represented by this proxy will be voted as directed by the
Stockholder. If no direction is given when the duly executed proxy is returned,
such shares will be voted in accordance with the recommendations of the board of
directors for all nominees.

The undersigned acknowledges receipt of the March 31, 1998 Notice of Annual
Meeting and the Proxy Statement, which more particularly describes the matters
referred to herein.

- ----------------------------------- ----------------------------------------
Signature Signature if held jointly

- ----------------------------------- ----------------------------------------
Date Date

(Signature(s) should be exactly as name or names appear on this proxy. If stock
is held jointly, each holder should sign. If signing is by attorney, executor,
administrator, trustee or guardian, please give full title.)

PLEASE COMPLETE, DATE, SIGN AND RETURN PROMPTLY.

[X] PLEASE MARK YOUR VOTE
AS IN THIS EXAMPLE
USING DARK INK ONLY.

(PLEASE READ OTHER SIDE FIRST.)
- --------------------------------------------------------------------------------

THE BOARD OF DIRECTORS RECOMMENDS THAT YOU VOTE FOR ALL NOMINEES.

The election of directors: Howard I. Bull, James C. Comis III and Frederick
W. Pheasey.

[ ] FOR all nominees [ ] WITHHOLD AUTHORITY
listed above. for all nominees listed above.

INSTRUCTION: to withhold authority to vote for any individual nominee, write the
nominee's name in the space provided below:

- --------------------
21

[NATIONAL OILWELL LOGO]

NATIONAL-OILWELL, INC.
PROXY SOLICITED ON BEHALF OF BOARD OF DIRECTORS FOR THE ANNUAL MEETING OF
STOCKHOLDERS ON MAY 13, 1998.

The undersigned hereby appoints Montreal Trust Company of Canada (the
"Trustee"), and, unless you withhold authority by checking the following
box [ ], authorizes the Trustee to appoint by proxy M. Gay Mather and Daniel L.
Molinaro or either of them with full power of substitution, the proxy or proxies
of the undersigned to attend the annual meeting of stockholders of
National-Oilwell, Inc. to be held on Wednesday, May 13, 1998, and any
adjournments thereof, and to vote all Exchangeable Shares of Dreco Energy
Services Ltd. that the signer is entitled to vote as indicated on the reverse
side and, at their discretion, on any other matters properly brought before the
meeting, and any adjournments thereof, all as set forth in the March 31, 1998
proxy statement (the "Proxy Statement").

This proxy is solicited on behalf of the board of directors of National-Oilwell,
Inc. The shares represented by this proxy will be voted as directed by the
Stockholder only if this proxy is completed, returned to and received by the
Trustee not later than 4:30 p.m. (Calgary time) on Monday, May 11, 1998 by
Montreal Trust Company of Canada, 600, 530 - 8th Avenue S.W., Calgary, Alberta
T2P 3S8. Proxies may be mailed in the return envelope provided or faxed to
403-267-6529.

In the event you wish to attend the meeting in person and vote your shares
directly, please check the following box [ ], in which case the Trustee will
issue a proxy to you for your shares at the meeting; however, the Trustee
accepts no responsibility for timely forwarding a proxy to vote your shares
directly if such instruction is not received by 4:30 p.m. (Calgary time) on May
11, 1998. In all events, the risk of delivery of such a proxy remains with the
holders of Exchangeable Shares.