EXHIBIT 10.123

                               PAYMENT AGREEMENT

     This  Payment Agreement (the  "Agreement") is executed this  18th day of
  October,  1995,  by  and  between  Enserch   Exploration,  Inc.,  a  Texas
  corporation ("Seller"),  and Reading & Bates  Development Co.,  a Delaware
  corporation ("Buyer").

                                    RECITALS

     WHEREAS, Seller  and Buyer  have  entered into  that Purchase  and  Sale
  Agreement dated  the  date  hereof  (the  "Purchase Agreement")  and  have
  entered into  this Agreement  with respect to the  deferred payment  terms
  applicable to  payment of Buyer  of the Purchase Price set  out in Section
  2.1 of the Purchase Agreement;

     NOW THEREFORE, Seller and Buyer hereby agree as follows:

     1. Definitions.   Unless   otherwise   defined    in   this   Agreement,
        capitalized terms  shall have the  meanings ascribed to  them in  the
        Purchase Agreement.

     2. Deferred Payment Terms. Buyer  shall pay to  Seller, Six  Million Two
        Hundred Fifty  Thousand  and No/100  Dollars ($6,250,000.00)  of  the
        Purchase Price  on the date  of this  Agreement and  shall execute  a
        promissory note in the principal amount of Twelve Million and  No/100
        Dollars ($12,000,000.00) as  evidence of  the unpaid  balance of  the
        Purchase Price which note shall be payable in two installments of Six
        Million   and  No/100   Dollars   ($6,000,000.00)  each,   the  first
        installment of  which shall be due  on March 31, 1996  and the second
        installment of  which shall be due  on September  30, 1996 and  which
        note  shall be  secured  by  a mortgage  and security  agreement  and
        financing statement granting a mortgage lien and security interest in
        the Assets and any additional interests acquired by Buyer pursuant to
        the Operating Agreement.  Failure of  Buyer to conform to and perform
        the payment of the Purchase Price,  in accordance with the terms  and
        provisions  of this Agreement, shall  constitute a breach  hereof and
        entitle Seller  to damages,  be  grounds for  the rescission  of  the
        Purchase Agreement by Seller  and/or a suit for specific  performance
        by  Seller.   In  the event  Seller  elects to  rescind  the Purchase
        Agreement  hereunder, Buyer shall  reassign unto  Seller, all  of the
        interests  which  Buyer acquired  from  Seller  under the  terms  and
        provisions of the  Purchase Agreement, free and clear of  any and all
        burdens  and   encumbrances,  save  and  except   those  burdens  and
        encumbrances  affecting  the  interests and  Assets  as  of  the date
        hereof.   In the event  Buyer defaults  in the timely  payment of any
        installment  or interest  due hereunder, Seller shall  have the right
        and option  to accelerate  the due date  of any  and all  outstanding
        installments which  shall then and thereupon  become due and payable.
        Buyer does  hereby expressly  waive  any and  all rights  of  notice,
        presentment  and dishonor which may attach  to the obligation created
        hereunder.

     3. Interest.   Interest shall accrue  in favor of  Seller on  the unpaid
        balance of the Purchase Price and shall be paid current by Buyer with
        each installment.   Interest shall  be calculated at a  rate of 8.56%
        per annum.

     4. Conflict.   In  the event of  any conflict between the  terms of this
        Agreement and the terms  of the Purchase Agreement, the terms  of the
        Purchase Agreement shall  be deemed to prevail.   It is the intent of
        the parties hereto that this  Agreement cover and pertain only to the
        payment of the Purchase Price and is not intended  to alter or change
        the rights and obligations of the parties created under the terms and
        provisions of the Purchase Agreement.

     5. Governing Law. THIS AGREEMENT SHALL BE GOVERNED BY AND INTERPRETED IN
        ACCORDANCE  WITH THE  SUBSTANTIVE LAWS  OF  THE  STATE OF  LOUISIANA,
        WITHOUT REGARD TO CONFLICT OF LAW RULES OR PROVISIONS THAT DIRECT THE
        APPLICATION OF THE LAWS OF ANOTHER JURISDICTION.

     6. Waiver.  No waiver of the performance under any of the provisions  of
        this Agreement shall be  deemed or shall constitute  a waiver of  any
        other  provisions  hereof (whether  or not  similar), nor  shall such
        waiver  constitute  a continuing  waiver  unless  otherwise expressly
        provided.

     7. Captions.   The captions  in this Agreement are  for convenience only
        and shall not  be considered  part of or affect  the construction  or
        interpretation of any provision of this Agreement.

     8. Liability of Successors.   The   terms,    conditions,   rights   and
        obligations of this Agreement shall run with the Assets and extend to
        and  be   binding  upon  the  parties  hereto  and  their  respective
        successors, legal representatives and/or assigns.

     9. Severability.  If  any  provision  of this  Agreement  is invalid  or
        unenforceable in part  or in whole in any jurisdiction  applicable to
        this Agreement, then, to the extent permitted by applicable law,  (i)
        the  other provisions hereof shall remain in full force and effect in
        such jurisdiction and shall be liberally construed in order to  carry
        out  the  intentions  of the  parties  hereto  as  nearly  as may  be
        possible,  and  (ii)  the  invalidity  or  unenforceability  of  such
        provision  in  any jurisdiction  shall  not  affect  the validity  or
        enforceability thereof in any other jurisdiction.  

     10.   Counterparts.  This  Agreement  may  be executed  in  one or  more
           counterparts, each of  which shall be deemed an original,  but all
           of which together shall constitute one and the same instrument.

     11.   Attorney's Fees.  If a  suit or action  is filed by  any party  to
           enforce this  Agreement, the prevailing party shall be entitled to
           recover reasonable  attorneys' fees  incurred in  investigation or
           related matters and in preparation for  and prosecution or defense
           of such suit or action as fixed by the  trial court, together with
           reasonable court  costs, and,  if  any appeal  is taken  from  the
           decision of  the trial court, reasonable  attorneys' fees as fixed
           by the appellate court or, if appropriate, by the trial court.

     12.   Change in Control.   In the  event Seller exercises  its right and
           option under Section 8.15 of the Purchase Agreement to acquire all
           of Buyer's right,  title and interest in an  to the Assets and any
           additional interest which may  have been acquired pursuant  to the
           Operating Agreement described  in Section 5.2(e)  of the  Purchase
           Agreement,  Seller   shall  promptly   reimburse  Buyer   for  all
           installments of  the Purchase Price (not  including interest) paid
           by Buyer prior to the date of such exercise  and all other amounts
           specified in  Section 8.15 of  the Purchase  Agreement, and  Buyer
           shall thereafter be relieved of any liability or responsibility to
           make future installments or payments hereunder or thereunder.

     13.   Release of Security. Upon payment  in full  of the  Purchase Price
           and any  accrued interest hereunder or  under the promissory  note
           referred  to in Section  2. of this Agreement,  Seller shall cause
           the mortgage and security interest referred to in Section 2. to be
           released of record  and the financing statement,  also referred to
           in Section 2., to be terminated of record. 

     IN  WITNESS WHEREOF,  the parties  have entered  into and  executed this
  Agreement as of the day and year first set forth above. 


  WITNESSES:                                   SELLER:

                                         ENSERCH EXPLORATION, INC.
  ___________________________________
  Name:  James K. Teringo, Jr.
                                          By: ___________________________  
  ___________________________________         R. L. Kincheloe
  Name:                                       Senior Vice President,
                                              Offshore and International


  WITNESSES:                                     BUYER:

                                           READING & BATES DEVELOPMENT CO.

  ______________________________________

  Name:_________________________________
                                            By:____________________________
  _______________________________________      D. C. Toalson            
  Name:__________________________________      President 


  STATE OF TEXAS

  COUNTY OF DALLAS

    BEFORE ME, the  undersigned authority, duly  commissioned and  qualified
  within  and  for  the  State  and County  aforesaid,  personally  came and
  appeared:

    R. L. KINCHELOE, to me personally  known to be the person whose name  is
  subscribed to the foregoing instrument,  who declared and acknowledged  to
  me, notary, in  the presence of the undersigned competent  witnesses, that
  he executed the  above and foregoing instrument  in his capacity as Senior
  Vice President, Offshore and International of Enserch Exploration, Inc., a
  Texas corporation, on behalf of said corporation with full authority,  and
  that the said instrument is the free act and deed of the said corporation,
  and was executed for the uses, purposes and benefits therein expressed.

    THUS DONE,  READ AND SIGNED in  the State and  County aforesaid,  in the
  presence  of  James  K.  Teringo,  Jr. and  _____________________________,
  competent witnesses, on the 18th day of October, 1995.

  WITNESSES:

  ______________________________      ____________________________________
  James K. Teringo, Jr.               R. L. KINCHELOE

  ______________________________

  _____________________________________
  Notary Public in and for the
  State of Texas
  My Commission expires:
  ____________________________ 


  STATE OF TEXAS

  COUNTY OF DALLAS

    BEFORE ME, the  undersigned authority, duly  commissioned and  qualified
  within  and  for  the  State  and County  aforesaid,  personally  came and
  appeared:

    D. C.  TOALSON, to me  personally known to  be the person whose  name is
  subscribed to the foregoing instrument,  who declared and acknowledged  to
  me, notary, in  the presence of the undersigned competent  witnesses, that
  he  executed  the  above  and foregoing  instrument  in  his  capacity  as
  President of Reading  & Bates Development Co., a Delaware  corporation, on
  behalf of  the said corporation  with full  authority, and  that the  said
  instrument  is the  free act  and deed  of the  said corporation,  and was
  executed for the uses, purposes and benefits therein expressed.

    THUS DONE,  READ AND SIGNED in  the State and  County aforesaid,  in the
  presence         of          _________________________________         and
  _________________________________, competent witnesses, on the 18th day of
  October, 1995.

  WITNESSES:

  ___________________________________    ____________________________________
                                         D. C. TOALSON
  ___________________________________

  ____________________________________
  Notary Public in and for the
  State of Texas
  My Commission expires:
  __________________________________