Exhibit 10.96 


                      COLLATERAL ASSIGNMENT OF INSURANCE


      READING &  BATES EXPLORATION  CO., an Oklahoma  corporation (hereinafter
called the  "Assignor"), the  owner of the  United States  registered offshore
drilling  rig D.R. STEWART  (the "Rig"), in  consideration of  One Dollar ($1)
lawful  money of  the United  States of  America and  other good  and valuable
consideration, the receipt and  sufficiency of which are  hereby acknowledged,
has sold,  assigned, transferred, set  over, and granted a  security interest,
and  by this  instrument does  sell, assign,  transfer, set  over and  grant a
security  interest  unto Wilmington  Trust  Company,  not  in  its  individual
capacity but as Trustee for the  Banks (as that term is defined in  the Credit
Agreement, as defined below) (hereinafter  called the "Assignee") and unto the
Assignee's successors  and assigns, to it  and its successors  and assigns own
proper use  and benefit, and  as collateral security  for the full  and prompt
payment  when  due  (whether  at  the  stated  maturity,  by  acceleration  or
otherwise) of all obligations and liabilities of the Assignor, now existing or
hereafter incurred, under,  arising out of  or in connection  with any  Credit
Document (as that term is  defined in the Credit Agreement, as  defined below)
to which it is a party and the due performance and compliance by  the Assignor
with the terms of each such Credit Document, all right, title and  interest of
the  Assignor  under,  in  and  to  the   following  (all  of  the  following,
collectively,  the "Insurance  Collateral"):   (i) all  insurances (including,
without limitation, all certificates of  entry in protection and indemnity and
war risks  associations or clubs) in  respect of the  Rig, whether heretofore,
now  or hereafter effected, and all renewals  of or replacements for the same,
(ii) except as hereinafter provided, all  claims, returns of premium and other
moneys and claims for moneys due and to become due under or in respect of said
insurances, (iii) all other rights of the Assignor under or in respect of said
insurances and (iv)  any proceeds of any  of the foregoing.   It is  expressly
agreed  that anything herein  contained to  the contrary  notwithstanding, the
Assignor  shall remain  liable under  said insurances  to perform  all of  the
obligations assumed by it thereunder and the Assignee shall have no obligation
or liability (including, without limitation,  any obligation or liability with
respect  to  the  payment  of  premiums,  calls  or  assessments)  under  said
insurances by  reason of or arising  out of this instrument  of assignment nor
shall  the  Assignee be  required or  obligated in  any  manner to  perform or
fulfill any obligations  of the Assignor under or pursuant  to said insurances
or to make any payment or to make  any inquiry as to the nature or sufficiency
of any payment received by it or to  present or file any claim, or to take any
other action to  collect or enforce  the payment of any  amounts which or  may
have been assigned to it or to which  it may be entitled hereunder at any time
or times.

      This Assignment  is made pursuant  to the Credit Agreement,  dated April
30, 1996 (as  the same may be  amended, modified or supplemented  from time to
time,  the "Credit  Agreement"), by  and  among Reading  & Bates  Corporation,
Reading  & Bates Drilling Co., the Banks  (as defined therein) and Christiania
Bank og Kreditkasse, New York Branch, as Agent.

      The Assignor  hereby constitutes  the Assignee  and  its successors  and
assigns, the Assignor's true and lawful attorney, with full power (in the name
of the Assignor or otherwise) to  ask, require, demand, receive, compound  and
give acquittance for  any and  all moneys  and claims  for moneys  due and  to
become  due under or arising out of said  insurances, to endorse any checks or
other instruments  or orders in connection therewith and to file any claims or
to take any action or institute any proceedings which the Assignee may deem to
be  necessary  or advisable  in  the  premises;  provided, however,  that  the
Assignee  shall not  take any  action pursuant  to the  power granted  by this
paragraph unless  an Event of  Default under  the Credit Agreement  shall have
occurred and be  continuing.  Such appointment of the  Assignee as attorney is
irrevocable and coupled with an interest. 

      The Assignor hereby  covenants and agrees to procure that notice of this
Assignment, in  the  form of  Annex  I hereto,  shall  be  duly given  to  all
underwriters  and  that where  the  consent  of  any underwriter  is  required
pursuant  to any  of  the insurances  assigned hereby,  such consent  shall be
obtained and evidence thereof shall  be given to the Assignee, and  that there
shall be  duly endorsed upon all slips, cover notes, policies, certificates of
entry  or other  instruments issued  or to  be issued  in connection  with the
insurances assigned hereby such clauses as to additional named assured or loss
payees  set forth in Annex I hereto.  In all cases, unless otherwise agreed in
writing by  the Assignee,  such slips, cover  notes, notices,  certificates of
entry or other instruments shall show the Assignee and the Banks as additional
named assured and  shall provide that  there will be  no recourse against  the
Assignee for payment of premiums, calls or assessments.

      The powers  and authority to the  Assignee herein have been  given for a
valuable consideration and are hereby declared to be irrevocable.

      The Assignor agrees  that at any  time and from  time to time, upon  the
written, reasonable  request of the  Assignee, the Assignor will  promptly and
duly execute and deliver any and all such further instruments and documents as
the Assignee may  reasonably require in  obtaining the full  benefits of  this
Assignment and of the rights and powers herein granted.

      The Assignor hereby warrants and represents  that it has not assigned or
pledged, and hereby covenants that,  without the prior written consent thereof
of the  Assignee, so long  as this  instrument of assignment  shall remain  in
effect, it will not assign or pledge the whole or any part of the right, title
and interest hereby assigned to anyone other than the Assignee, its successors
or assigns, and it  will not take  or omit to take  any action, the taking  or
omission  of  which might  result  in  an  alteration  or impairment  of  said
insurances  or this  Assignment,  or of  any  of the  rights  created by  said
insurances or this Assignment.

      All notices or other communications which are required to be made to the
Assignee hereunder shall be made by airmail postage prepaid letter, telefax or
by telex, confirmed by letter to:

                  Wilmington Trust Company
                  Rodney Square North
                  Wilmington, Delaware  19890
                  Attn:  Corporate Trust Division
                  Fax No.:  (302) 651-8882

                  With copies to:

                  Christiania Bank og Kreditkasse,
                  New York Branch
                  11 West 42nd Street
                  New York, New York 10036
                  Attn:  Hans Kjelsrud
                  Tel No.:  (212) 827-4814
                  Fax No.:  (212) 827-4888

                  Jennifer L. Janss, Esq.
                  Richard Layton & Finger
                  P.O. Box 551 
                  Wilmington, Delaware  19899

or  at such other  address as any  such party  may designate by  notice to the
others.

      Any payments  made pursuant to  the terms hereof  shall be made  to such
account  as  may,  from  time  to time,  be  designated  by  the  Assignee for
distribution in accordance with the Vessel Trust Indenture, the Mortgages, the
Credit Agreement and the other Credit Documents.

      THIS  ASSIGNMENT SHALL BE GOVERNED BY THE  INTERNAL LAWS OF THE STATE OF
NEW YORK, WITHOUT  REFERENCE TO PRINCIPLES OF CONFLICTS OF  LAW.  THE ASSIGNOR
HEREBY IRREVOCABLY  WAIVES  ALL RIGHTS  TO  A TRIAL  BY  JURY IN  ANY  ACTION,
PROCEEDING OR COUNTERCLAIM ARISING OUT OF OR RELATING TO  THIS ASSIGNMENT, THE
OTHER CREDIT DOCUMENTS OR THE TRANSACTIONS CONTEMPLATED HEREBY OR THEREBY.

      None of  the terms  and conditions  of this  Assignment may be  changed,
waived, modified  or varied in  any manner  whatsoever unless in  writing duly
signed  by  the Assignor  and the  Assignee (with  the  consent of  either the
Required Banks (as defined in the Credit Agreement) or, to the extent required
by Section 12.12 of the Credit Agreement, all of the Banks).

      In the  event that the  Insurance Collateral  or any portion  thereof is
sold  in connection  with  a sale  permitted  by Section  8.02  of the  Credit
Agreement or  is otherwise released at the direction of the Required Banks (or
all  the Banks,  to  the  extent  required  by Section  12.12  of  the  Credit
Agreement),  the Assignee,  at the request  and expense of  the Assignor, will
duly assign, transfer and  deliver to the Assignor (without recourse and with-
out  any representation  or warranty)  such of  the Insurance  Collateral (and
releases therefor)  as is then being (or has been)  so sold or released and as
may be in the possession of the Assignee and has not theretofore been released
pursuant to  this Assignment.    At any  time the  Assignor  desires that  the
Insurance  Collateral or  a portion  thereof be  released as provided  in this
paragraph, the Assignor shall deliver to  the Assignee a certificate signed by
an Authorized Officer  (as defined in the  Credit Agreement) stating that  the
release of the  Insurance Collateral or portion thereof  is permitted pursuant
to this paragraph.

      The  Assignor  hereby  authorizes  the  Assignee  to  execute  and  file
Financing  Statements  (Form  UCC-1)  and amendments  thereto  as  provided in
Article 9 of the Uniform Commercial Code.



      IN WITNESS WHEREOF, the  Assignor has caused this Assignment to  be duly
executed the 30th day of April, 1996.


                                    READING & BATES EXPLORATION CO.


                                    By: ________________________
                                        Title:



                                                                ANNEX I       
                                                                  to          
                                                      Assignment of Insurances


                             NOTICE OF ASSIGNMENT


      Reading & Bates Exploration Co.  (the "Owner"), the owner of  the United
States  flag offshore  drilling rig  D.R.  Stewart (the  "Rig"), HEREBY  GIVES
NOTICE that by a Collateral  Assignment of Insurance dated April 30,  1996 and
made  between  the  Owner  and  Wilmington  Trust  Company,  as  Trustee  (the
"Assignee") for  itself and  certain other Banks  (the "Assignee"),  the Owner
assigned to  the Assignee all of the Owner's  right, title and interest in and
to all insurances and the benefit of all insurances now or hereafter taken out
in respect of the Rig.  This Notice of Assignment and the Loss Payable Clauses
attached hereto are to be  indorsed on all policies and certificates  of entry
evidencing such insurance.


                        READING & BATES EXPLORATION CO.

                        By________________________
                           Title:




                             LOSS PAYABLE CLAUSES

                              Hull and War Risks


      Loss, if  any, payable to  Wilmington Trust Company, as  Trustee for the
Banks, for distribution by it to said Banks and to Reading & Bates Exploration
Co., Owner, as their respective  interests may appear, or order,  except that,
unless Underwriters have  been otherwise instructed by notice  in writing from
the  Trustee, in  the case  of any  loss involving  any damage  to the  Rig or
liability of  the  Rig, the  Underwriters  may pay  directly for  the  repair,
salvage, liability or other charges involved or, if the Owner of the Rig shall
have  repaired  the  damage and  paid  the  cost  thereof, or  discharged  the
liability or paid the salvage or other charges, then the  Underwriters may pay
the Owner as reimbursement to the extent the Owner has paid the covered loss.

      In the event of an actual or constructive total loss or a compromised or
arranged total  loss or requisition  of title, all insurance  payment therefor
shall be paid to the  Trustee, for distribution by  it in accordance with  the
terms of the first preferred United States mortgage relating to the Rig.




                           PROTECTION AND INDEMNITY

      Loss, if any,  payable to Wilmington Trust  Company, as Trustee  for the
Banks for  distribution by it to the Banks and  to Reading & Bates Exploration
Co., Owner, as their  respective interests may appear, or order,  except that,
unless  and until  Underwriters have  been otherwise  instructed by  notice in
writing from the Trustee, any loss may be paid directly to  the person to whom
the liability covered by this insurance has  been incurred, or to the Owner of
the  Rig to reimburse it  for any loss, damage or  expenses incurred by it and
covered by this  insurance, provided that in respect of any claim in excess of
$1,000,000,  the  Underwriters shall  have  first received  evidence  that the
liability insured against has been discharged.