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                                                             Exhibit 10.20


                                            KEPPEL TATLEE BANK

                                                     Keppel TatLee Bank Limited
                                                     10 Hoe Chiang Road
                                                     Keppel Towers
                                                     Singapore 089315
                                                     Tel:  2228228
                                                     Fax: 2252256

PRIVATE AND CONFIDENTIAL

4 April 2000

Mr. Dick H. Fagerstal
Senior Vice President and Chief Financial Officer
Chiles Offshore LLC
11200 Richmond Avenue,
Suite 490,
Houston, Texas 77082

Dear Dick,

CREDIT FACILITIES

At your request, we are pleased to offer to a subsidiary ("NEWCO") of Chiles
Offshore LLC the following banking facility:

(1)      BORROWER

         Subsidiary ("NEWCO") of Chiles Offshore LLC to be incorporated in
         Delaware or in such other jurisdiction as may be tax efficient for the
         Borrower and acceptable to the Lender(s).

(2)      LENDER(S)

         Keppel TatLee Bank (KTB) Limited and/or Financial Institutions to be
         arranged by KTB Ltd acceptable to the Borrower.

(3)      TYPES AND LIMITS

         o        US$82 MILLION FINANCING PACKAGE WHICH COMPRISES OF:

         Facility A:       US$75,000,000 Term Loan. (This amount consists of
                           contract price of US$72,800,000 plus change order
                           no.l of US$500,000 to be signed together with the
                           shipbuilding contract; and additional change orders,
                           if any, but not exceeding US$1,700,000 contracted
                           after the signing of the shipbuilding contract).

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         Facility B:       US$7,000,000 Revolving Credit Facility

         o        OPTION TO EXTEND FOR 18 MONTHS AFTER DELIVERY

         Facility C:       Fixed Rate Term Loan with amount outstanding not
                           exceeding US$82,000,000. (Loan amount refers to the
                           aggregate amount outstanding under Facilities A and B
                           upon completion of the Rig).

         Facility D:       Money Market Loan of not more than US$1,500,000,
                           provided aggregate of Facility C & Facility D not
                           exceeding US$82,000,000 at all times.

(4)      PURPOSE OF THE FACILITY

         Facility A:       To finance the construction of a jack-up drilling
                           rig (the "Rig").

                           After the Borrower has initially raised cash (minimum
                           US$20,000,000) to be used by the Borrower exclusively
                           to pay for rig construction costs, owner furnished
                           equipment, other related rig construction and
                           supervision costs, the Borrower shall have the right
                           to draw down up to US$20,000,000 under Facility A,
                           prior to or upon delivery of the rig, to the extent
                           there is availability under the Facility. The
                           proceeds from such drawdown may not be used to pay
                           for anything other than outlined above.

                           The Borrower may not use such funds for the payment
                           of dividends or distributions and shall be subject to
                           all other restrictions imposed upon it by the Lenders
                           until all outstandings under the Facilities have been
                           repaid in full.

         Facility B:       For payment of interest incurred on Facilities A
                           and B and commitment fee due under Facilities A
                           and B.

         Facility C:       Refinance all outstandings under Facilities A
                           and B.

         Facility D:       For working capital purposes.

(5)      TENOR/FINAL MATURITY

         Facilities A:     22 months from first drawdown or upon completion of
         and B             the Rig, whichever earlier.



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         Facilities C      18 months after the completion of the Rig.
         and D:

(6)      PRICING

         INTEREST RATE

         Facility A:       2% per annum above 1, 2, 3 or 6-month LIBOR, payable
                           on the  maturity date of each interest period.

         Facility B:       3% per annum above 1, 2, 3 or 6 months LIBOR,
                           payable on the maturity date of each interest period
                           by way of additional drawdown of Facility B.

         Facility C:       Fixed interest to be determined 2 business days
                           prior to value date, at 3% above average reference
                           Banks' 18-months swap cost of funds quoted by three
                           reference Banks to be determined. The reference Banks
                           would be major Banks like JP Morgan, Union Bank of
                           Switzerland, Chase Bank and Citibank. Interest is
                           payable semiannually in arrears.

         Facility D:       3% per annum above 1, 2, 3 or 6 month LIBOR,  at
                           Borrower's  option.  Interest is payable on the
                           maturity date of each interest period.

         PREPAYMENT FEE/EARLY REPAYMENT

         Facility A:       Prepayment penalty of 1/4% flat on amount prepaid
                           plus breakfunding costs if any. Partial or total
                           prepayment is allowed on interest payment date
                           subject to one week's notice. Minimum prepayment
                           amount shall be US$1,000,000 and in multiples of
                           US$500,000.

         Facility B:       Early repayment allowed. Subject to penalty of 1/4%
                           flat on amount prepaid plus breakfunding costs if
                           any.

         Facilities C      Prepayment penalty of 1/4% flat on amount prepaid
         and  D:           plus breakfunding costs if any. Partial or
                           total prepayment is allowed on interest payment date
                           subject to one month's notice. Minimum prepayment
                           amount shall be US$100,000 and in multiples of
                           US$100,000.


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         CANCELLATION FEE

         Facilities A      Allowed at anytime during the availability
         and B:            period, in part or in whole, in multiples of
                           US$500,000 subject to a minimum of US$500,000 on
                           payment of 1/4% flat on amount cancelled upon giving
                           at least 7 days prior written notice to the Bank.
                           Notice once given is irrevocable. Any undrawn amount
                           at the expiry of the availability period will be
                           deemed as cancelled and a cancellation fee of 1/4%
                           flat of the undrawn amount will be payable.

         Facilities C      Not applicable.
         and D:

(7)      AVAILABILITY

         Subject to completion of all legal documentation.

         Facility A:       Subject to three days' written notice. To be fully
                           drawn within 22 months from first drawdown or upon
                           completion of Rig, whichever earlier.

         Facility B:       Subject to two days' written notice. Fully
                           revolving for the tenor of the Financing Package such
                           that no interest period shall fall after the Final
                           Maturity.

         Facility C:       Available only after delivery of the Rig, subject
                           to three days' written notice.

         Facility D:       Available only after delivery of the Rig, subject
                           to two days' written notice.

(8)      DRAWINGS

         Facility A:       Drawings must be made in minimum amounts of
                           US$100,000 against surveyors certificates and/or
                           suppliers' invoice, or as provided above under
                           "Purpose" for Facility A.

         Facility B:       To be drawn only for payment of interest expense
                           incurred under Facilities A and B and commitment due
                           for Facilities A and B.


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         Facility C:       Available only after delivery of the Rig, subject to
                           three days written notice.

         Facility D:       Available only after delivery of the Rig, subject to
                           two days written notice.

(9)      REPAYMENT

         Facility A:       Bullet repayment on maturity.

         Facility B:       Any outstanding to be fully repaid on maturity.

         Facility C:       Bullet repayment on maturity.

         Facility D:       To be fully repaid on maturity. Partial repayment
                           possible on interest payment date.

(10)     SECURITY

i)       First legal mortgage in escrow over the Rig and the Owners Furnished
         Equipment ("OFE") to be converted into a mortgage as and when
         formalities allow. The Borrower shall be allowed to offer the OFE
         suppliers who are willing to extend payment terms to the Borrower a
         second lien over the Rig;

ii)      Assignment of all relevant insurance policies, including pre-delivery
         insurance;

iii)     Assignment of the Rig-Building contract; (not applicable under option
         to extend for 18 months after delivery).

iv)      Assignment of charter agreement (without notification), sale proceeds
         and any other monies due to the Borrower; Regardless of not notifying
         the charterees, of the Lenders' security interest on the charter
         earnings, all earnings of the Borrower shall be deposited into a
         designated account in which the Lender shall have a security interest
         ("Operating Account"). All operating, debt service and other allowed
         costs shall be reimbursed cut of the Operating Account and the excess,
         if any, shall be used to secure the repayment of the Facilities upon
         Final Maturity.

v)       Fixed and Floating charge on all other present and future assets of the
         Borrower, if any.



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(11)     QUANTUM OF FINANCING

         Facilities A & B: Shall not exceed 87.7% of the Mortgaged Rig's
                           Construction Costs upon completion. Construction cost
                           is being defined as Total Shipyard Cost plus Value of
                           OFE.

(12)     CONDITIONS PRECEDENT (APPLICABLE TO FACILITIES A AND B ONLY)

         Borrower's minimum networth must not be less than US$20,000,000 prior
         to first drawdown of Facility A. Networth is defined as paid-up capital
         + Subordinated Shareholders' Loans.

(13)     OTHER TERMS AND CONDITIONS

         APPLICABLE TO FACILITIES A, B, C & D

i)       Borrower shall forward a copy of its quarterly financial reports to the
         Lenders within 45 days after the end of the respective period.

ii)      Borrower shall forward a copy of its audited final accounts to the
         Lenders within 180 days after the close of the Borrower's financial
         year. In addition, Borrower shall provide the Lender with any other
         relevant credit and financial information in a format agreeable to the
         Lender, as and when required by the Lender.

iii)     No additional indebtedness to be incurred by the Borrower without prior
         written consent from the Lenders. However, if the additional
         indebtedness are loans from shareholders and/or inter-companies, these
         additional indebtedness would be allowable as long as the loans
         (principal plus interest) are subordinated to that of the Lenders.

iv)      Subordination of all shareholder's and inter-companies' loans.

v)       Borrower to maintain minimum networth of not less than US$20,000,000 at
         all times. Injection of additional capital during the course of the
         loan is allowable. Networth is being defined as Paid-up Capital +
         Subordinated Shareholders' Loans.

vi)      No dividends payment and payment of interest on shareholder's loans by
         the Borrower over the life of the Financing Package.


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vii)     Standard event of default clauses and other standard conditions
         pertaining to such Facility to apply.

viii)    Restrictions on the sale or transfer of whole or part of the Borrower's
         assets which could result in a material adverse effect on or materially
         change the scope or nature of the Borrower's business.

ix)      Material adverse change clause relating to the business, financials,
         etc. of the Borrower.

x)       Cross-default with all liabilities of the Borrower and its Holding
         Company. However, if the default called by a third party is being
         contested in good faith, the Borrower would be entitled to request for
         waiver of the cross-default condition. The cross-default condition
         would be triggered upon only if the default amount to more than
         US$5,000,000.

         APPLICABLE TO FACILITIES A & B

i)       Borrower has to provide Owner Furnished Equipment ("OFE") amounting to
         not less than US$18,500,000 to the construction of the Rig.

ii)      Valuation by an independent professional valuation firm appointed by
         Borrower but acceptable to the Lenders to be conducted upon completion
         of the Rig construction. All charges incurred would be for the account
         of the Borrower.

iii)     Borrower to provide the Lenders with copies of contracts for
         construction, and any other information concerning the Rig that the
         Lender may require.

         APPLICABLE TO FACILITIES C & D

i)       The vessel shall be Panama flagged.

ii)      Valuation by an independent professional valuation firm appointed by
         Borrower but acceptable to the Lenders, no sooner than 6 months after
         delivery of the Rig. All charges incurred would be for the account of
         the Borrower. Market value of the Rib has to be equal to or greater
         than 114% of total outstandings under facilities C and D.

(14)     TAXATION

         All payments made under the Financing Package shall be made free clear
         of any tax, withholdings and/or deductions, both present and future.



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(15)     DOCUMENTATION

         The Financing Package is subject to the execution of required legal
         documentation in a form and substance satisfactory to all relevant
         parties.

(16)     EXPENSES

         All out-of-pocket expenses (including legal fees) incurred in
         connection with the preparation, execution and delivery of the Loan
         Facility Agreement and related documentation shall be for the account
         of the Borrower. If upon acceptance of the Letter of Offer and the
         Financing Package are aborted for any reason whatsoever or if the
         Borrower subsequently decide not to proceed with the Financing Package,
         the Borrower shall be required to pay all legal fees and related
         expenses incurred to date.

(17)     GOVERNING LAW & JURISDICTION

         New York Law or such other laws as may be necessary depending on he
         Borrowers' choice of jurisdiction.



We trust that the terms and conditions are acceptable to you. This offer will
lapse after thirty (30) days from the date of this letter unless otherwise
arranged.

Please confirm your acceptance by signing and returning to us the duplicate copy
of this letter together with a certified copy of your Board of Directors'
Resolution accepting the Financing Package.




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We are pleased to be of service and look forward to hearing from you in due
course.

Yours Sincerely,

/s/ Foo Chee Yong                                /s/ Yeo Li Ping
-------------------------                        ---------------------
Foo Chee Yong                                    Yeo Li Ping
Senior Manager                                   Manager


 ...............................................................................

We confirm acceptance of your Financing Package based on the terms and
conditions stipulated above.

                                                                 4/6/00
-----------------------------                              ------------------
Authorised Signatory (ies)                                 Date
for and on behalf of Chiles Offshore LLC on behalf of subsidiary to be formed.

By virtue of a Directors' Resolution dated ______________
Name
Company Stamp



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