SecProbe.io

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August 5, 2005

Securities and Exchange Commission
450 Fifth Street, N.W.
Washington, D.C.  20549

Attention:  Ibolya Ignat, Staff Accountant
            Division of Corporation Finance

RE:  Chandler (U.S.A.), Inc.
     Form 10-K for Fiscal Year Ended December 31, 2004
     Filed March 22, 2005
     Form 10-Q for Fiscal Quarter Ended March 31, 2005
     Filed May 11, 2005
     File No. 001-15135

Dear Ms. Ignat:

     We are responding to your letter dated July 8, 2005 concerning the
filings referred to above by Chandler (U.S.A.), Inc. ("Chandler USA").  We
have numbered our responses to correspond with the numbers assigned to the
comments contained in your letter.  Page numbers refer to the redlined
drafts of the filings.

FORM 10-K FOR THE FISCAL YEAR ENDED DECEMBER 31, 2004
-----------------------------------------------------

Comment 1:  We have revised the "Critical Accounting Policies" and the "Losses
            and Loss Adjustment Expense" sections of Management's Discussion
            and Analysis of Finanical Condition and Results of Operations to
            include additional information and explanations of the reasons for
            the changes in estimates of our loss reserves.  The additional
            information includes, but is not limited to, the following items:

            -  We have added a table on page 12 of the amended Form 10-K that
               identifies the accident years that experienced loss development,
               the amount of that development, the amount of the related loss
               reserve as of the beginning of each calendar year and the
               re-estimated loss reserve as of the beginning of each calendar
               year.  There were no significant offsetting changes other than
               a release of approximately $8.2 million in reserves for the 2002
               accident year during 2003.  This is discussed on page 13 of the
               amended Form 10-K.

            -  One change in key assumptions was made during 2004, and this
               change is described on page 3.

            -  The changes in estimate were the result of frequency and
               severity patterns not previously experienced.  Since such
               development patterns were not present in the loss history
               available at the time the estimate was prepared, they could
               therefore not be anticipated.  This is discussed on page 11.
               Other than the development of the loss data, there were no new
               events or additional information acquired that led to the
               changes in estimate.

<PAGE>
                                                                       PAGE 2

            -  We have included in our disclosures for "Critical Accounting
               Policies" and "Losses on Loss Adjustment Expenses" that changes
               in the estimates are recorded in the current period.  Also, as
               noted above, the additional disclosure on page 11 explains why
               recognition of the change in estimates occurred in the periods
               that it did.

            -  A general discussion of trends is included on page 3.  There
               were no trends that were a significant factor in determining
               the changes in loss reserve estimates.

Comment 2:  We have provided additional information within Management's
            Discussion and Analysis of the amended Form 10-K discussing the
            following items:

            -  Reserves as of December 31, 2004 are disclosed by line of
               business on page 2.

            -  The case reserves and IBNR reserves are disclosed by line of
               business on page 2.

            -  Our actuaries do not prepare a range of estimates.

            -  Key assumptions used by management in determining point
               estimates for our loss reserves are discussed on pages 2 and 3.

            -  Both management and our independent actuaries determine a point
               estimate for our loss reserves.  A table comparing the high and
               low point estimates for each method with the recorded reserve is
               shown on page 3.  The various methods considered and selected
               are discussed on pages 2 and 3.

            -  The determination of point estimates selected is discussed on
               page 3.  The company records to its point estimate, which may or
               may not be the same as the independent actuaries' point estimate.
               If there is a difference, we review the differences with the
               actuary to ensure the differences are not material.

            -  The impact of a 1% change in estimate in our loss reserves is
               disclosed on page 3.

Comment 3:  The calculations for the "financial year" and the "accident year"
            ratios are explained at the top of page 7.  We have revised the
            title for the "financial year" ratios to "GAAP year" and have made
            several changes to clarify these ratios.  See the amended wording
            in the Form 10-K.

            We believe that the accident year loss ratios should be considered
            non-GAAP financial measures.  The comparable GAAP loss ratios are
            already included in these tables.  A reconciliation of the GAAP
            losses to the accident year losses has been added on page 8 of the
            amended Form 10-K.

<PAGE>                                                                 PAGE 3

            The "combined ratio" is the sum of the "loss ratio" and the
            "expense ratio".  The loss ratio represents the relationship
            between losses and loss adjustment expenses incurred to net
            premiums earned.  Since losses are recorded only for the expired
            portion of an insurance policy, the numerator and denominator are
            consistent.  The expense ratio represents the relationship between
            underwriting expenses and net premiums written.  For purposes of
            this calculation, underwriting expenses do not include the change
            in the balance sheet amounts for deferred acquisition costs.
            Underwriting expenses, including commissions and ceding
            commissions, are a function of premiums written, therefore the use
            of net premiums written as a denominator is consistent with
            underwriting expenses as the numerator.  Combining a loss ratio
            based on premiums earned and an expense ratio based on premiums
            written produces a meaningful measure of underwriting profitability
            and is commonly used in the insurance industry.

Comment 4:  We have revised the contractual obligations table to include the
            payment of loss reserves.

            The contractual obligations table in the original Form 10-K filing
            has been revised to include the obligation for the guaranteed
            residual value of $1.9 million under the lease for the sale and
            leaseback transaction described in Note 12 of the financial
            statements.  The amounts included in the table under "future
            minimum rental payments under operating leases" for this
            transaction were $383,000 (less than one year) and $429,000
            (1-3 years).

Comment 5:  Paragraph 33 of SFAS 13 was superceded by SFAS 28 "Accounting for
            Sales with Leasebacks." SFAS 28 requires that any profit or loss on
            the sale shall be deferred and amortized in proportion to the
            amortization of the leased asset, if a capital lease, or in
            proportion to the rental payments over the period of time the asset
            is expected to be used, if an operating lease.

            The terms of this leaseback did not meet the criteria of a capital
            lease and was treated as an operating lease.  Under the original
            lease, Chandler USA had the option to repurchase the equipment at
            the end of the lease for approximately $3.0 million, or elect to
            have the lessor sell the equipment.  If the proceeds from the sale
            were less than approximately $2.4 million, the Company would be
            required to pay the difference between the proceeds and the $2.4
            million.  The deferred gain on the sale was $2.0 million.  As long
            as Chandler USA had a potential obligation to repay the shortfall
            between the sale price of the equipment and $2.4 million, the $2.0
            million gain on the sale was deferred.  Upon the decision to
            repurchase the equipment, Chandler USA began amortizing the
           deferred gain over the last 12 months of the lease.

FORM 10-Q - MARCH 31, 2005
--------------------------

Comment 6:  We have provided additional discussion for "net premiums earned"
            and certain other financial statement classifications within the
            Results of Operations section of the Form 10-Q.  See the amended
            Form 10-Q for specific changes.

<PAGE>
                                                                       PAGE 4

Comment 7:  The current disclosure states that the use of $3.6 million in cash
            from operations was due primarily to the payment of losses from
            prior accident years.  It also discusses the reduction of unpaid
            losses of $11.7 million that is partially offset by the reduction
            of reinsurance recoverables on unpaid losses of $8.3 million.  This
            resulted in a net cash outflow of $3.4 million, which compared to
            total cash used from operations of $3.6 million.

            The affect of the payment of losses from prior accident years is
            shown in the following table.  As you can see, we did experience
            substantial payments of $10.6 million in prior accident years
            related to this reserve.

<TABLE>
<CAPTION>
                                                               2005
                                          2004 and prior     accident
                                          accident years       year           Total
                                          --------------  --------------  --------------
<S>                                       <C>             <C>             <C>
      Unpaid losses @ 12/31/04            $     108,233   $           -   $     108,233
      Reinsurance recoverables @12/31/04        (63,538)              -         (63,538)
                                          --------------  --------------  --------------
      Net reserves @ 12/31/04                    44,695               -          44,695
      Net losses incurred@ 3/31/05                  931           6,969           7,900
      Net losses paid @ 3/31/05                 (10,559)           (760)        (11,319)
                                          --------------  --------------  --------------
      Net reserves @ 3/31/05                     35,067           6,209          41,276
      Reinsurance recoverables @ 3/31/05         50,360           4,906          55,266
                                          --------------  --------------  --------------
      Unpaid losses @ 3/31/05             $      85,427   $      11,115   $      96,542
                                          ==============  ==============  ==============

</TABLE>

      We have provided additional disclosure about the holding company aspect
      of our operations including NAICO's role in servicing the holding
      company's debt in the  amended Form 10-Q.

      In connection with responding to your comments, we acknowledge that:

   -  Chandler USA is responsible for the adequacy and  accuracy of the
      disclosure in the filings;
   -  staff comments or changes to disclosure in response to staff comments do
      not foreclose the Commission from taking any action with respect to the
      filings; and
   -  Chandler USA may not assert staff comments as a defense in any proceeding
      initiated by the Commission or any person under the federal securities
      laws of the United States.

  Drafts of our amended filings are being sent to your attention via e-mail.
If you have any questions or require any additional information, please
contact me at (405)258-4292.

Sincerely,

/s/ Mark C. Hart
--------------------------
Mark C. Hart
Vice President and
Chief Financial Officer

MCH:js
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