Abstract: An apparatus for drilling holes in the steel casing of an a oil or gas well, and drilling into the surrounding earth, includes a number of components controlled by hydraulic fluid. A first hydraulic motor drives a steel milling assembly and a second hydraulic motor drives a rock drilling assembly. All assemblies are supported in a housing that is conveyed by conventional jointed pipe or coiled tubing down the well casing. Control components cause a carriage carrying the milling assembly to be indexed up a predetermined distance relative to the well casing, and then extend a mill bit gradually into contact with the well casing while being rotated by a hydraulic motor. After the mill bit completes a hole through the well casing, the hydraulic components retract the mill bit and index the carriage back down to its starting position to align a rock drilling bit with the hole that was just drilled in the casing.