EXHIBIT 10.48


                          READING & BATES CORPORATION

                             STOCK OPTION AGREEMENT

              This Stock  Option Agreement  ("Agreement") between  Reading &
  Bates Corporation, a  Delaware corporation ("Company") and  Paul B.  Loyd,
  Jr. ("Optionee"),

                                  WITNESSETH:

              WHEREAS, the  Committee that administers the  Reading &  Bates
  Corporation  1995  Long-Term Incentive  Plan  ("Plan")  has  selected  the
  Optionee, the  Chairman, President  and  Chief  Executive Officer  of  the
  Company, to receive a  nonqualified stock  option under the  terms of  the
  Plan  as an  incentive to  the Optionee  to  remain in  the employ  of the
  Company and contribute to the performance of the Company, on the terms and
  subject to the conditions provided herein;

              NOW THEREFORE, for and in consideration of these  premises, it
  is hereby agreed as follows:

              1.    The Option is  issued in accordance with  and subject to
  all of the terms, conditions and provisions of the Plan and administrative
  interpretations  thereunder,  if  any, which  have  been  adopted  by  the
  Committee  and are in effect on  the date hereof.   Capitalized terms used
  but not defined  herein shall have the meanings  assigned to such terms in
  the Plan.

              2.    On  the terms  and subject  to the  conditions contained
  herein, the Committee hereby  grants to the Optionee an option for  a term
  of ten years ending on December 5, 2005 ("Option Period") to purchase from
  the  Company  600,000 shares  ("Option Shares")  of  the  Company's Common
  Stock, at a price equal to $13.875 per share.

              3.    This Option  shall not be exercisable,  except upon  the
  death  or disability  of the  Optionee, until  after 6  months immediately
  following  the  date  this  Option  is granted,  and  thereafter  shall be
  exercisable for Common Stock as follows:

                    (a)   After  one year  following  the effective  date of
  grant, this Option shall be exercisable for any number of shares up to and
  including, but not in excess of, 33-1/3% of the aggregate number of shares
  subject to this Option; and

                    (b)   After two  years following  the effective date  of
  grant, this Option shall be exercisable for any number of shares up to and
  including, but not in excess of, 66-2/3% of the aggregate number of shares
  subject to this Option; and

                    (c)   After three years following the effective date  of
  grant, this Option shall be exercisable for any number of shares of Common
  Stock  up to and including,  but not in  excess of, 100%  of the aggregate
  number of shares subject to this Option; 

  provided the number of shares as to which this Option becomes  exercisable
  shall,  in  each case,  be  reduced by  the  number of  shares theretofore
  purchased pursuant to the terms hereof. 

              4.    The  option  herein granted  may  be  exercised  by  the
  Optionee by giving written  notice to the Secretary of the Company setting
  forth the number of  Option Shares with respect to which  the option is to
  be  exercised, accompanied by payment  for the shares  to be purchased and
  any appropriate withholding taxes, and specifying the address to which the
  certificate for such shares is to be mailed.  Payment shall be by means of
  cash, certified  check, bank draft  or postal  money order payable to  the
  order of  the Company.  As  promptly as practicable  after receipt of such
  written  notification  and  payment,  the  Company  shall  deliver to  the
  Optionee  certificates for  the number  of Option  Shares with  respect to
  which such option has been so exercised.

              5.    Subject to approval of the Committee, which shall not be
  unreasonably withheld,  the Optionee  may pay for any  Option Shares  with
  respect  to which the option  herein granted is  exercised by tendering to
  the Company other  shares of Common Stock  at the time of  the exercise or
  partial  exercise hereof.  The certificates representing such other shares
  of Common  Stock must be  accompanied by a stock power  duly executed with
  signature guaranteed.  The value of the Common Stock  so tendered shall be
  its Fair Market Value.

              6.    If  the  Optionee's  employment   with  the  Company  is
  terminated  during the Option  Period for  any reason other than  death or
  disability or "Good Reason"  or during a "Window Period" (in each  case as
  "Good Reason" and  "Window Period" are defined in that  certain Employment
  Agreement between the Company and Optionee dated as of January 1, 1992, as
  amended, ("Employment Agreement")) whether during or after  the Employment
  Period  (as defined  in the  Employment Agreement),  then (i)  the options
  herein  granted  to him  that  are  not exercisable  on  the  date  of his
  termination of employment shall thereupon terminate, and (ii) any  options
  herein granted to him that are exercisable on the  date of his termination
  of employment may be exercised by the Optionee during a three-month period
  beginning on  such date,  unless the Option Period  shall expire  prior to
  such date, and shall thereafter terminate. 

              7.    If  the  Optionee's  employment   with  the  Company  is
  terminated (whether  during or  after the  Employment  Period, as  defined
  above) (i) by the Optionee for Good Reason or during a Window Period; (ii)
  for any  reason by the Company  other than for "Cause"  (as defined in the
  Employment Agreement)  or (iii) by reason of death or disability, then (a)
  the Options  granted to him that  are not exercisable on the  date of such
  termination of employment shall be thereupon be fully exercisable, and (b)
  all Options then held by the Optionee, whether theretofore exercisable  or
  exercisable by reason of the termination of employment may be exercised by
  the  Optionee during  the full  remaining term  of this  Option; provided,
  however,  that all  Options  granted  hereunder shall  expire and  not  be
  exercisable on the first anniversary of the Optionee's death.

              8.    The  option herein granted shall not  be transferable by
  the Optionee  otherwise  than as  permitted  by Section  13 of  the  Plan.
  During the lifetime of the Optionee, such option shall be exercisable only
  by him.  No transfer of the  option herein granted  shall be  effective to
  bind the Company unless the Company shall have been furnished with written
  notice  thereof and  a copy  of such  evidence as  the Committee  may deem
  necessary to establish the validity of the transfer and the  acceptance by
  the transferee or transferees of the terms and conditions hereof.

              9.    The Optionee  shall have no rights as a stockholder with
  respect to any  Option Shares until the date  of issuance of a certificate
  for Option Shares purchased pursuant to this Agreement.   Until such time,
  the Optionee shall not be entitled to dividends or to  vote at meetings of
  the stockholders of the Company. 

              10.   The Company  may make  such provisions  as  it may  deem
  appropriate  for the  withholding  of  any taxes  which it  determines  is
  required in connection with  the option herein granted.   The Optionee may
  pay all or any portion of the taxes required to be withheld by the Company
  or paid  by the Optionee  in connection  with the  exercise of all or  any
  portion  of the  option  herein granted  by electing  to have  the Company
  withhold shares of Common Stock, or by delivering previously owned  shares
  of Common Stock,  having a Fair Market Value  equal to the amount required
  to be withheld or paid.  The Optionee must make  the foregoing election on
  or before  the date that  the amount of  tax to be withheld  is determined
  ("Tax Date").  Any such election is irrevocable and subject to disapproval
  by the Committee.   If the Optionee is subject to the  short-swing profits
  recapture  provisions of  Section  16(b)  of the  Exchange Act,  any  such
  election shall be subject to the following additional restrictions:

                    (a)   Such election may not be made within six months of
  the grant of this option, provided that this limitation shall not apply in
  the event of death or disability.

                    (b)   Such  election must be made either  in an Election
  Window (as hereinafter defined) or at such other time as may be consistent
  with Section 16(b)(3) of the Exchange Act.   Where the Tax Date in respect
  of the  exercise of all  or any portion of  this Option is  deferred until
  after  such exercise and  the Optionee elects stock  withholding, the full
  amount of  shares of  Common Stock  will be issued or  transferred to  the
  Optionee  upon  exercise  of  this  Option,  but  the  Optionee  shall  be
  unconditionally obligated to  tender back to the  Company on the Tax  Date
  the number  of shares necessary  to discharge with respect  to such Option
  exercise the greater of (i) the Company's withholding obligation and  (ii)
  all or  any  portion of  the holder's  federal  and state  tax  obligation
  attributable to  the Option  exercise.  An Election  Window is  any period
  commencing  on the third business day following the Company's release of a
  quarterly or annual summary  statement of sales and earnings and ending on
  the twelfth business day following such release.

              11.   Upon  the  acquisition  of any  shares  pursuant to  the
  exercise of the  option herein granted, the Optionee will enter  into such
  written representations,  warranties  and agreements  as the  Company  may
  reasonably request in  order to comply with applicable securities  laws or
  with this Agreement.

              12.   The  certificates   representing   the   Option   Shares
  purchased  by exercise of an option will be stamped or otherwise imprinted
  with a legend in such form as the Company or its  counsel may require with
  respect to any applicable restrictions  on sale or transfer, and the stock
  transfer  records of the Company will  reflect stop-transfer instructions,
  as appropriate, with respect to such shares.

              13.   Unless otherwise provided herein, every notice hereunder
  shall  be in writing and shall  be given by registered  or certified mail.
  All notices of the exercise  by the Optionee of any option hereunder shall
  be directed to Reading & Bates Corporation, Attention:   Secretary, at the
  Company's  current address.    Any  notice given  by  the Company  to  the
  Optionee directed to him at his address on file with the  Company shall be
  effective to  bind any  other person who shall  acquire rights  hereunder.
  The Company shall be under no obligation whatsoever to advise the Optionee
  of the existence, maturity or termination of  any of the Optionee's rights
  hereunder  and the Optionee  shall be deemed to  have familiarized himself
  with all matters contained herein and in the Plan which  may affect any of
  the Optionee's rights or privileges hereunder. 

              14.   Whenever  the  term  "Optionee"  is  used  herein  under
  circumstances applicable  to any  other  person or  persons to  whom  this
  award,  in  accordance  with  the  provisions  of  Paragraph  8,  may   be
  transferred, the word "Optionee" shall be deemed to include such person or
  persons.   References to  the  masculine gender  herein also  include  the
  feminine gender for all purposes.

              15.   Notwithstanding any of the  other provisions hereof, the
  Optionee agrees that he will  not exercise the option  herein granted, and
  that the  Company will not be  obligated to issue  any shares  pursuant to
  this Agreement,  if the  exercise of  the option  or the  issuance of such
  shares  of Common Stock would constitute a violation by the Optionee or by
  the Company of any provision of any law or  regulation of any governmental
  authority or any national securities exchange.

              16.   The  option to purchase Option Shares  evidenced by this
  Agreement  shall be  fully and  immediately exercisable  upon a  Change of
  Control of the Company as defined in the Employment Agreement. 

              17.   This Agreement is  subject to the Plan, a copy  of which
  has been  provided the  Optionee and for which  the Optionee  acknowledges
  receipt.   The terms and provisions of the Plan  (including any subsequent
  amendments thereto) are incorporated herein by reference.  In the event of
  a conflict  between any term  or provision contained herein and  a term or
  provision  of the Plan,  the  applicable terms and provisions  of the Plan
  will govern and prevail.   All definitions of words and terms contained in
  the Plan shall be applicable to this Agreement.

              18.   In the  event of a  corporate merger  or other  business
  combination in which the Company is not the surviving entity, the economic
  equivalent   number  of  the   voting  shares  of  common   stock  of,  or
  participating  interests in, the  surviving entity, based on  the terms of
  such  merger or other  business combination, shall be  substituted for the
  Option Shares  hereunder, and the price  per share  set out  in Section  2
  hereof  shall  be  adjusted  to  reflect substantially  the  same economic
  equivalent value of the Option Shares to the Optionee immediately prior to
  any such merger or other business combination.

              IN WITNESS WHEREOF, this Agreement is executed this 6th day of
  February, 1996, effective as of the 5th day of December, 1995.

                                      READING & BATES CORPORATION


                                      By:                           
                                           Paul B. Loyd, Jr.