Exhibit 10.128


                           FIRST PREFERRED MORTGAGE

                            Dated November 13, 1996

                              HRB RIG CORPORATION

                                - in favor of -

                       CHRISTIANIA BANK OG KREDITKASSE,
                               NEW YORK BRANCH,
                              as Security Trustee


                                HARVEY H. WARD
=============================================================================

                                     INDEX

CLAUSE          SUBJECTMATTERPAGE

       1    DEFINITIONS AND INTERPRETATION  . . . . . . . . . . . . . . . . 2 
       2    REPRESENTATIONS AND WARRANTIES  . . . . . . . . . . . . . . . . 7 
       3    MORTGAGE  . . . . . . . . . . . . . . . . . . . . . . . . . . . 9 
       4    PAYMENT COVENANTS . . . . . . . . . . . . . . . . . . . . . . . 9 
       5    PRESERVATION OF SECURITY  . . . . . . . . . . . . . . . . . .  10 
       6    INSURANCE . . . . . . . . . . . . . . . . . . . . . . . . . .  11 
       7    RIG COVENANTS . . . . . . . . . . . . . . . . . . . . . . . .  13 
       8    PROTECTION OF SECURITY  . . . . . . . . . . . . . . . . . . .  17 
       9    ENFORCEABILITY AND TRUSTEE'S POWERS . . . . . . . . . . . . .  18 
       10   APPLICATION OF MONEYS . . . . . . . . . . . . . . . . . . . .  20 
       11   FURTHER ASSURANCES  . . . . . . . . . . . . . . . . . . . . .  21 
       12   POWER OF ATTORNEY . . . . . . . . . . . . . . . . . . . . . .  21 
       13   INDEMNITIES . . . . . . . . . . . . . . . . . . . . . . . . .  22 
       14   EXPENSES  . . . . . . . . . . . . . . . . . . . . . . . . . .  23 
       15   COMMUNICATIONS  . . . . . . . . . . . . . . . . . . . . . . .  24 
       16   ASSIGNMENTS . . . . . . . . . . . . . . . . . . . . . . . . .  24 
       17   TOTAL AMOUNT, ETC.  . . . . . . . . . . . . . . . . . . . . .  24 
       18   MISCELLANEOUS . . . . . . . . . . . . . . . . . . . . . . . .  24 
       19   JURISDICTION  . . . . . . . . . . . . . . . . . . . . . . . .  25 

       ACKNOWLEDGEMENT OF MORTGAGE
       EXHIBIT 1 FORM OF CREDIT AGREEMENT
       EXHIBIT 2 FORM OF SUBSIDIARY GUARANTY

==============================================================================

THIS FIRST  PREFERRED MORTGAGE (this  "Mortgage") is made  on the 13th  day of
November, 1996

BY

(1)    HRB  RIG CORPORATION,  an  Oklahoma  corporation having  its  principal
       offices  at 901  Threadneedle,  Suite 200,  Houston,  Texas 77079  (the
       "Owner"),

IN FAVOR OF

(2)    CHRISTIANIA BANK OG  KREDITKASSE, NEW YORK BRANCH,  a Norwegian banking
       corporation  having its  office at 11  West 42nd Street,  New York, New
       York,  as security trustee  for the Banks (as  hereinafter defined) and
       as mortgagee (the "Trustee")

WHEREAS

(A)    The Owner is  the sole owner of  the whole of the jack-up  drilling rig
       HARVEY H. WARD documented under the laws and flag of the United  States
       of America with Official Number 642693  of 4,121 gross registered  tons
       and 3,079 net registered tons (the "Rig").

(B)    By  a Credit  Agreement dated  as of  November 13,  1996  (as modified,
       amended  or supplemented  from time  to  time, the  "Credit Agreement")
       among  (i)  Reading   &  Bates  Corporation,  a   Delaware  corporation
       ("Holdings"),  (ii)   Reading  &  Bates   Drilling  Co.,  an   Oklahoma
       corporation  (the  "Borrower"),  (iii) the  banks  party  thereto  (the
       "Banks"), (iv) Credit Lyonnais New York Branch and Banque  Indosuez, as
       documentation agents (the "Documentation Agents")  and (v) the Trustee,
       as  administrative  agent,  arranger  and  security  trustee  (in  such
       capacity,  the  "Administrative  Agent")  (the  form  of  which  Credit
       Agreement together with  Exhibit B  thereto but  without the  remaining
       attachments is  attached  hereto as  Exhibit 1),  it was  agreed  among
       other things  that the Banks would make available  to the Borrower upon
       the terms and conditions therein described  a reducing revolving credit
       facility   (the  "Facility")  in  an   aggregate  amount  at  any  time
       outstanding   of    Three   Hundred   Million   United States   Dollars
       (US$300,000,000), providing  for the making of  Loans and  the issuance
       of, and participation in, Letters of Credit as contemplated therein.

(C)    The  obligations  of  the Borrower  with  respect to  the  Facility are
       evidenced by  the  Credit Agreement  and  the other  Credit  Documents,
       including  the promissory notes of the Borrower payable to the order of
       the respective  Banks (each  a "Note"  and, collectively, the  "Notes")
       (the form of which is attached as Exhibit B to the Credit Agreement).

(D)    The  Owner,  for  good  and   valuable  consideration  has  authorized,
       executed and delivered  a Subsidiary Guaranty (as modified,  amended or
       supplemented  from time  to time, the  "Subsidiary Guaranty"), the form
       of which Subsidiary Guaranty  is attached hereto as Exhibit 2, in favor
       of  the  Administrative  Agent  guaranteeing  the  performance  by  the
       Borrower  of its obligations  under the Credit Agreement  and the other
       Credit Documents.

(E)    This  Mortgage is made  for the  benefit of  the Trustee to  secure the
       guaranty by  the Owner of (i) the  full and prompt payment  when due of
       (x) the principal of  and interest on the Notes issued, and Loans made,
       under  the Credit  Agreement,  and  all reimbursement  obligations  and
       Unpaid Drawings with respect to the Letters of Credit issued under  the
       Credit  Agreement  and  (y)  all  other  obligations  and  indebtedness
       (including,  without   limitation,  indemnities,   Fees  and   interest
       thereon)  of the  Borrower  to the  Secured  Creditors (as  hereinafter
       defined), whether  now existing  or hereafter  incurred under,  arising
       out of or in connection with the Credit Agreement and the other  Credit
       Documents  including, without  limitation, this  Mortgage  and the  due
       performance and  compliance  by the  Borrower with  all of  the  terms,
       conditions  and agreements  contained in  the Credit  Agreement and the
       other Credit  Documents including, without  limitation, this  Mortgage;
       (ii) any and all  sums advanced by the Trustee in order to preserve the
       Collateral (as hereinafter  defined) or preserve its  security interest
       in the  Collateral;  (iii) in  the  event  of any  proceeding  for  the
       collection  or   enforcement  of  any  indebtedness,   obligations,  or
       liabilities of the Borrower  referred to in clause (i) above,  after an
       Event of Default shall have occurred and be continuing,  the reasonable
       expenses  of the Trustee  of re-taking, holding, preparing  for sale or
       lease,  selling  or  otherwise   disposing  of  or  realizing  on   the
       Collateral, or of any exercise by the Trustee of  its rights hereunder,
       together with reasonable attorneys' fees of counsel to the  Trustee and
       court costs; and  (iv) all amounts paid  by any Indemnitee as  to which
       such Indemnitee has the  right to reimbursement under Clause 13 of this
       Mortgage  (all  such   obligations,  liabilities,  sums  and   expenses
       referred  to in  clauses  (i)  through  (iv) above  being  collectively
       referred to as the "Obligations").  It is acknowledged and  agreed that
       the  "Obligations" shall  include  extensions of  credit  of the  types
       described  above, whether outstanding  on the date of  this Mortgage or
       extended from time to time after the date of this Mortgage. 

(F)    This  First  Preferred  Mortgage  is  entered  into  by  the  Owner  in
       consideration  of the Banks agreeing  to make the Facility available to
       the  Borrower  and as  a  condition  thereto  and  for other  good  and
       valuable  consideration provided by the Banks (the sufficiency of which
       the Owner hereby acknowledges).

NOW THIS MORTGAGE WITNESSETH AND IT IS HEREBY AGREED

1.     DEFINITIONS AND INTERPRETATION

1.01   In this Mortgage  unless the context otherwise requires,  the following
       expressions shall have the following meanings:

       "Administrative Agent"  shall have  the same  meaning for such  term as
       set forth in the Credit Agreement;

       "Bank" means any  lender listed  from time to  time on Annex  I to  the
       Credit Agreement (collectively, the "Banks");

       "Collateral" shall have the same meaning for such  term as set forth in
       the Credit Agreement;

       "Credit  Agreement" means  the Credit Agreement,  dated as  of November
       13, 1996,  among Holdings, the  Borrower, the Banks, the  Documentation
       Agents,  and the Administrative Agent  first referred to in Recital (B)
       hereto, as modified, amended or supplemented from time to time;

       "Credit Documents" shall  have the meaning for  such term as set  forth
       in the Credit Agreement;

       "Credit  Facility Period" shall mean  the period commencing on the date
       hereof  and ending on  the date the Total  Commitments have terminated,
       no Letters  of Credit remain outstanding  and the Loans and  the Unpaid
       Drawings  together with  interest, fees  and all  other obligations are
       paid in full;

       "Default   Rate"  shall  mean  the  rate   of  interest  calculated  in
       accordance with Section 1.08(c) of the Credit Agreement;

       "Environmental  Approvals"  means  all  approvals,  licenses,  permits,
       exemptions  or authorization  required  under applicable  Environmental
       Laws;

       "Environmental Claims" means any and  all administrative, regulatory or
       judicial  actions,  suits,  demands,  demand  letters,  claims,  liens,
       notices  of  noncompliance or  violation,  investigations  (other  than
       internal  reports  prepared by  Holdings  or  any of  its  Subsidiaries
       solely  in the  ordinary course of  such Person's  business and  not in
       response  to  any  third  party action  or  request  of  any  kind)  or
       proceedings relating in any way to any Environmental  Law or any permit
       issued,  or  any  approval given,  under  any  such  Environmental  Law 
       (hereafter, "Claims"), including,  without limitation, (a) any  and all
       Claims  by  governmental or  regulatory  authorities  for  enforcement,
       cleanup,  removal,  response,  remedial or  other  actions  or  damages
       pursuant to  any  applicable Environmental  Law, and  (b) any  and  all
       Claims   by    any   third   party   seeking   damages,   contribution,
       indemnification,  cost  recovery,  compensation  or  injunctive  relief
       resulting  from Hazardous  Materials  arising  from alleged  injury  or
       threat of injury to health, safety or the environment;

       "Environmental  Incident"  means  (i)  any  release of  Environmentally
       Sensitive  Material  from   the  Rig,   (ii)  any  incident   in  which
       Environmentally  Sensitive Material  is released  from  a vessel  other
       than the  Rig and  which involves  collision between  the Rig and  such
       other vessel  or some  other incident  of navigation  or operation,  in
       either case, where  the Rig or the  Owner are actually or  allegedly at
       fault or  otherwise liable (in whole or in  part) or (iii) any incident
       in which Environmentally Sensitive Material  is released from a  vessel
       other than the Rig  and where the Rig is actually or potentially liable
       to be  arrested as  a  result and/or  where the  Owner is  actually  or
       allegedly  at  fault  or  otherwise liable  (and,  in  each such  case,
       "release"  shall  mean  disposing,  discharging,  injecting,  spilling,
       leaking, leaching,  dumping,  emitting,  escaping,  emptying,  seeping,
       placing and  the like,  into  or upon  any  land or  water or  air,  or
       otherwise entering into the environment);

       "Environmental Law"  means any  applicable Federal,  state, foreign  or
       local statute,  law, rule, regulation,  ordinance, code, guide,  policy
       and rule  of common law now or hereafter in effect  and in each case as
       amended, and  any  judicial or  administrative interpretation  thereof,
       including  any judicial  or  administrative  order, consent  decree  or
       judgment,  relating to  the environment,  health,  safety or  Hazardous
       Materials,  including, without  limitation, CERCLA;  RCRA; the  Federal
       Water Pollution Control Act,  as amended, 33 U.S.C.  1251 et seq.; the
       Toxic Substances  Control Act, 15 U.S.C.  7401  et seq.; the Clean Air
       Act, 42 U.S.C.  7401 et  seq.; the Safe Drinking Water Act, 42  U.S.C.
        3808  et seq.;  the Oil Pollution  Act of 1990,  33 U.S.C.   2701 et
       seq. and  any applicable  state and  local or  foreign counterparts  or
       equivalents;

       "Fees" shall have the  same meaning for such  term as set forth in  the
       Credit Agreement;

       "Hazardous Materials"  means (a) any  petroleum or petroleum  products,
       radioactive materials,  asbestos in  any form  that is or  could become
       friable,  urea  formaldehyde  foam  insulation,  transformers or  other
       equipment  that   contained,  electric   fluid  containing  levels   of
       polychlorinated biphenyls, and radon gas;  (b) any chemicals, materials
       or  substances defined as  or included in the  definition of "hazardous
       substances,"   "hazardous  waste,"  "hazardous  materials,"  "extremely
       hazardous  waste," "restricted  hazardous  waste," "toxic  substances,"
       "toxic  pollutants,"  "contaminants,"  or  "pollutants,"  or  words  of
       similar  import, under any  applicable Environmental  Law; and  (c) any
       other  chemical,   material  or   substance,  exposure   to  which   is
       prohibited, limited or regulated by any governmental authority;

       "Indemnitee" shall have the meaning set forth in Section 13.01;

       "Insurances" includes  all policies and  contracts of insurance  (which
       expression  includes  all  entries  of  the  Rig in  a  protection  and
       indemnity  association)  which  are  from time  to  time  taken out  or
       entered into  in respect of the Rig or  otherwise by the Owner (whether
       in the sole name of the  Owner or in the joint  names of the Owner  and
       the Administrative  Agent) and all  benefits thereof (including  claims
       of whatsoever nature and return of premiums);

       "Interest  Period" shall have  the same  meaning for  such term  as set
       forth in Section 1.09 of the Credit Agreement;

       "Letter of Credit" shall  have the  same meaning for  such term as  set
       forth in Section 2.01(a) of the Credit Agreement;

       "Loan(s)" shall have the  same meaning  for such term  as set forth  in
       the Credit Agreement;

       "Major  Casualty" means any casualty to  the Rig in respect whereof the
       claim or  the  aggregate of  the claims  against all  insurers,  before
       adjustment  for any  relevant  franchise  or deductible,  exceeds  Five
       Hundred Thousand United  States Dollars (US$500,000) or  the equivalent
       in any other currency;

       "Note"  means  each  promissory note  of  the Borrower  referred  to in
       Recital (C) hereto and in Section 1.05(a) of the Credit Agreement;

       "Obligations" shall have the meaning provided in Recital (E) hereto;

       "Oil Pollution Act 1990"  means the Oil Pollution Act 1990 (33 U.S.C. 
       2701 et seq.), as amended;

       "Other  Rigs" means,  individually  or collectively,  each  of (i)  the
       semi-submersible  drilling  rig  JACK  BATES   owned  by  the  Borrower
       documented under the laws and  flag of the United States with  Official
       Number  906283  of  19,928  gross  registered  tons  and    14,948  net
       registered tons;  (ii) the offshore  drilling rig  W. D. KENT  owned by
       Reading & Bates Exploration Co. documented  under the laws and flag  of
       the   United  States  with  Official   Number  583169  of  5,383  gross
       registered  tons  and 4,185  net  registered tons;  (iii)  the offshore
       drilling rig CHARLEY GRAVES owned by Reading and Bates  Borneo Drilling
       Co., Ltd. documented under  the laws and flag of the Republic of Panama
       with  Patente  Number 6618-76-CH  of  5,829 gross  registered  tons and
       1,748 net registered tons; (iv) the jack-up drilling rig  RON TAPPMEYER
       owned  by Reading &  Bates (A) Pty Ltd.  documented under  the laws and
       flag  of  Australia   with  Official  Number 855213  of   11,455  gross
       registered  tons  and   3,436  net  registered  tons;  (v)   the  semi-
       submersible drilling rig J. W. McLEAN owned by the  Borrower documented
       under the  laws and flag of the Republic  of Panama with Patente Number
       25384-PEXT  of 15,453  gross registered tons  and 4,636  net registered
       tons;  (vi)  the  semi-submersible drilling  rig  RIG 41  owned  by the
       Borrower  documented under the laws and  flag of the Republic of Panama
       with the  Patente Number to  be assigned on  the date hereof of  10,078
       gross registered tons and 3,024 net registered tons; (vii)  the jack-up
       drilling rig  GEORGE H.  GALLOWAY owned  by Reading  & Bates  Offshore,
       Limited documented  under the  laws and  flag of the  United States  of
       America with Official Number 651646 of 3,729 gross registered  tons and
       2,496  net  registered  tons; (viii)  the  jack-up drilling  rig  F. G.
       McCLINTOCK owned by  Reading & Bates Offshore, Limited documented under
       the laws and flag  of the United States of America with Official Number
       562059  of 5,525 gross  registered tons and 1,657  net registered tons;
       (ix) the  jack-up  drilling rig  RANDOLPH YOST  owned by  the  Borrower
       documented under  the laws  and flag  of the  United States of  America
       with  Official Number 601699  of 4,701 gross registered  tons and 4,701
       net registered tons; (x) the jack-up drilling rig  J. T. ANGEL owned by
       the Borrower documented  under the laws and  flag of the  United States
       of  America with Official Number  651645 of 4,186 gross registered tons
       and 3,090 net registered tons;  (xi) the jack-up drilling rig ROGER  W.
       MOWELL owned by the  Borrower documented under the laws and flag of the
       United States  of America  with Official  Number 645360 of  4,121 gross
       registered tons  and  3,079  net  registered tons;  (xii)  the  jack-up
       drilling  rig D. R.  STEWART owned  by Reading &  Bates Exploration Co.
       documented  under the laws  and flag  of the  United States  of America
       with  Official Number 626904  of 6,494 gross registered  tons and 5,834
       net  registered  tons;  and  (xiii)  the  jack-up drilling  rig  C.  E.
       THORNTON to be owned by  HRB Rig Corporation documented under the  laws
       and flag  of the United  States of America with  Official Number 673210
       of 6,096 gross registered tons and 6,096 net registered tons;

       "Permitted  Liens" means:  (1)  liens incident  to expenses  of current
       operations,  other than for master's  and crew's wages, incurred in the
       ordinary course of  business of the Owner  and due and payable  for not
       more than thirty (30) days (or being contested in good faith,  provided
       such liens are  not in excess  of U.S.$5,000,000.00,  and if in  excess
       thereof,  then  the  Owner  shall,  upon  the written  request  of  the
       Administrative Agent, provide  a bond or other security satisfactory to
       the Administrative Agent); (2) liens for master's and crew's  wages not
       yet  due and  payable; (3)  liens for  taxes, assessments, governmental
       charges,  fines and penalties not  at the time delinquent (unless being
       contested  in good  faith, provided  such liens  are  not in  excess of
       U.S.$5,000,000.00,  and if  in excess  thereof, then  the  Owner shall,
       upon  the written request  of the Administrative Agent,  provide a bond
       or other security satisfactory to the Administrative Agent);  (4) liens
       for  general average  and  salvage  (including contract  salvage);  (5)
       liens for  claims covered  by valid  policies of insurance  meeting the
       requirements of Clause  6 hereof (except that  no lien shall  be deemed
       not covered by insurance  to the extent insurance in force  would cover
       the  amount  secured  by the  lien  but for  any  applicable deductible
       amount  approved  by  the  Administrative  Agent);  (6)  liens  arising
       pursuant to  any judgment or  to an  order of attachment,  distraint or
       similar legal  process arising  in connection  with legal  proceedings,
       but only if and so long  as the execution or other enforcement  thereof
       is not unstayed for  more than  30 consecutive days;  (7) any lien  for
       the  payment  or  discharge of  which  provisions  satisfactory  to the
       Administrative Agent have been made as  evidenced by the Administrative
       Agent's  written consent to  such lien;  (8) any  lien in favor  of the
       Banks;  and provided that  Permitted Liens shall not  include any liens
       described in  subclauses (1)  through (7)  above unless  they: (i)  are
       subordinate to the lien of this Mortgage or  (ii) constitute a maritime
       lien which  would in any event be entitled as such to priority over the
       Mortgage under  the  United States  shipping laws  or other  applicable
       laws relating  to the Rig's trading  pattern.  Nothing  herein shall be
       deemed a waiver of the preferred status of this Mortgage; 

       "Protection  and  indemnity risks"  means  the usual  risks  covered by
       protection   and  indemnity   associations   of  international   repute
       including the  proportion not recoverable  in case  of collision  under
       the ordinary running-down clause  (unless such is recoverable under the
       relevant hull and machinery coverage);

       "Requisition  Compensation"  means  all  moneys  or other  compensation
       payable during the Credit Facility Period by reason of  requisition for
       title or  other compulsory  acquisition of  the Rig  otherwise than  by
       requisition for hire;

       "Rig" means  the vessel  described in  Recital (A) hereto  and includes
       any share  or  interest  therein and  her  engines,  machinery,  boats,
       tackle,  outfit,  spare   gear,  fuel,  consumable  or   other  stores,
       belongings and  appurtenances whether  on board  or ashore  and whether
       now  owned or hereafter  acquired (but  excluding therefrom  any leased
       equipment owned by third parties); 

       "Secured Creditors" shall  mean the Trustee,  the Banks, the  Letter of
       Credit Issuer and the  Administrative Agent under and as defined in the
       Credit Agreement;

       "Security Documents"  shall have the same meaning  for such term as set
       forth in the Credit Agreement;

       "Security  Interest"  means  a  mortgage,  charge   (whether  fixed  or
       floating),  pledge, lien, hypothecation, assignment, trust arrangement,
       title retention or other security interest  or arrangement of any  kind
       whatsoever;

       "Subsidiary Guaranty"  means  the agreement  dated as  of November  13,
       1996 made by the  Owner in favor of  the Administrative Agent as  first
       referred   to  in   Recital  (D)  hereto,   as  modified,   amended  or
       supplemented from time to time;

       "Ship Mortgage Act"  means the United  States Ship Mortgage  Act, 1920,
       as amended, recodified at 46 U.S.C.  31301, et seq.;

       "Taxes" shall have the same  meaning for such term as set  forth in the
       Credit Agreement;

       "Total Commitment"  shall have the  same meaning for  such term  as set
       forth in the Credit Agreement;

       "Total Loss"  means (a) the actual,  constructive, arranged, agreed, or
       compromised Total  Loss of the  Rig; (b)  the requisition for  title or
       other compulsory acquisition  or forfeiture of the  Rig otherwise  than
       by requisition  for hire; (c)  the capture, seizure, arrest,  detention
       or confiscation of the  Rig by any government  or by persons acting  or
       purporting  to  act  on behalf  of  any  government unless  the  Rig be
       released from such  capture, seizure, arrest or detention within ninety
       (90) days after the occurrence thereof;

       "United  States Dollars"  and "US$"  means the  lawful currency  of the
       United States of America;

       "Unpaid  Drawing" shall  have the  same  meaning for  such term  as set
       forth in the Credit Agreement;

       "War Risks" includes the risk  of mines and all risks excluded from the
       standard form  of  English marine  policy by  the free  of capture  and
       seizure clause.

1.02   Except  where  otherwise  expressly  provided  or  unless  the  context
       otherwise  requires,  words  and  expressions  defined  in  the  Credit
       Agreement shall have the same meanings when used in this Mortgage.

1.03   In this Mortgage:

       (a)   Clause headings are  inserted for convenience only and  shall not
             affect  the construction  of this Mortgage  and, unless otherwise
             specified, all  references  to Clauses  are  to clauses  of  this
             Mortgage;

       (b)   unless  the  context   otherwise  requires,  words  denoting  the
             singular number shall include the plural and vice versa;

       (c)   references   to    persons   include    bodies   corporate    and
             unincorporated;

       (d)   references  to  assets include  property,  rights  and assets  of
             every description;

       (e)   references to any document are to  be construed as references  to
             such document as amended or supplemented from time to time; and

       (f)   references  to any  enactment  include re-enactments,  amendments
             and extensions thereof.

2.     REPRESENTATIONS AND WARRANTIES

2.01   The Owner hereby represents and warrants to the Trustee that:

       (a)   the Owner is the sole legal and beneficial owner  of the whole of
             the  Rig and  neither  the whole  nor  any share  in  the Rig  is
             subject to any Security Interest (except  for Permitted Liens and
             the lien of this Mortgage);

       (b)   the  Owner has  not sold  or  transferred, or  agreed to  sell or
             transfer, title to the Rig or any share therein;

       (c)   the Owner  is a  corporation duly organized  and validly existing
             and in good standing under the laws of the State of Oklahoma;

       (d)   the  Owner has full power  and authority (i)  to register the Rig
             in  its  name  under United  States  flag,  (ii)  to  execute and
             deliver this Mortgage, (iii)  to mortgage the Rig as security for
             the Obligations and  (iv) to comply  with the provisions  of, and
             perform all its obligations under, this Mortgage;

       (e)   the Owner  has  complied with  all statutory  and other  material
             requirements   relating  to   the  ownership,   registration  and
             operation of the Rig;

       (f)   the  Owner  has  taken  all necessary  action  to  authorize  the
             execution  and  delivery  of  this  Mortgage  and  this  Mortgage
             constitutes,  the  legal, valid  and  binding  obligation of  the
             Owner enforceable against the  Owner in accordance with its terms
             (except  to   the  extent   limited  by  applicable   bankruptcy,
             reorganization, insolvency,  moratorium or other  laws of general
             application  relating   to  or   affecting  the  enforcement   of
             creditors'  rights as  from time  to time  in effect  and general
             equitable  principles)  and when  filed  with  the United  States
             Coast  Guard's National  Vessel Documentation  Center  in Falling
             Waters, West  Virginia will create a legal, valid and enforceable
             first preferred mortgage lien on the Rig;

       (g)   the  entry into  and performance  by the  Owner of  this Mortgage
             does not and will not during  the Credit Facility Period  violate
             in any respect (i)  any law or regulation of  any governmental or
             official  authority or  body,  or (ii)  any  of the  constitutive
             documents   of   the   Owner   including   the   Certificate   of
             Incorporation or By-laws, as  amended from time to time, or (iii)
             any  material agreement,  contract or other  undertaking to which
             the Owner is  a party or which is  binding upon the Owner  or any
             of its assets;

       (h)   all  consents, licenses, approvals and authorizations required in
             connection  with  the  entry  into,   performance,  validity  and
             enforceability   of   this   Mortgage    and   the   transactions
             contemplated  hereby and  thereby have  been obtained  and are in
             full  force and  effect  and will  be  so  maintained during  the
             Credit Facility Period;

       (i)   save  for such registrations  and filings as  are referred  to in
             this Mortgage,  it is  not necessary for  the legality, validity,
             enforceability  or admissibility  in  evidence  of this  Mortgage
             that it  or any document relating  thereto be  registered, filed,
             recorded or enrolled with  any court or authority in any relevant
             jurisdiction or that any stamp, registration or  similar taxes be
             paid on or in relation to this Mortgage;

       (j)   the  Owner  is in  compliance with  all  applicable Environmental
             Laws and  all Environmental  Approvals relating  to the Rig,  its
             operation and management  and the business  of the Owner  (as now
             conducted and as reasonably  anticipated to  be conducted in  the
             future) have been obtained or complied with;

       (k)   no  Environmental Claim  has been made  or threatened against the
             Owner, the  Approved Manager or otherwise  in connection with the
             Rig; and

       (l)   no  Environmental  Incident which  has resulted,  or  which could
             reasonably be  expected to  result, in an  Environmental Claim in
             excess of US$200,000 has occurred.

2.02   The representations and warranties  of the Owner set out in Clause 2.01
       shall survive the execution of this Mortgage and shall  be deemed to be
       repeated at the time of the making  of each Loan and at the time of the
       issuance of  each  Letter of  Credit,  with respect  to  the facts  and
       circumstances  existing at  each such  time, as  if made  at each  such
       time.

3.     MORTGAGE

3.01   In  order to secure  the Obligations, the  Owner has  granted, conveyed
       and  mortgaged and does  by these presents  grant, convey  and mortgage
       unto the Trustee,  its successors and assigns, the whole  of the Rig TO
       HAVE AND TO HOLD the same unto the Trustee,  its successors and assigns
       forever upon  the terms  herein set  forth for the  enforcement of  the
       Obligations.

       Provided  only and the condition of these  presents is such that if all
       of  the Obligations secured  by this Mortgage  have terminated  or have
       been  performed  in full  as and  when the  same  shall become  due and
       payable  in accordance with  the terms of  the Subsidiary  Guaranty and
       this Mortgage and  shall observe and  comply with the  covenants, terms
       and  conditions contained in the Subsidiary  Guaranty and this Mortgage
       expressed or  implied to be performed, observed or complied with by and
       on the part of  the Owner and its  successors and assigns, all  without
       delay or  fraud and according to  the true intent and  meaning thereof,
       then  these presents  and the rights  hereunder shall  cease, determine
       and be  void otherwise to be and  remain in full force  and effect and,
       in such event, the Trustee agrees to execute and  record at the expense
       of the  Owner, all such documents  as the Owner  may reasonably require
       to discharge this Mortgage.

       Notwithstanding  anything to  the contrary  herein it  is not  intended
       that any provision  of this Mortgage  shall waive the  preferred status
       of this  Mortgage and  that if  any  provision or  part thereof  herein
       shall  be construed as  waiving the preferred  status of  this Mortgage
       then such provision shall to such extent be void and of no effect.

3.02   The Owner shall  remain liable to  perform all the  obligations assumed
       by it  in relation to the  Rig and none of  the Secured Creditors shall
       be under  any obligation of any  kind whatsoever in  respect thereof or
       be under any liability whatsoever  in event of any failure by the Owner
       to perform its obligations in respect thereof.

4.     PAYMENT COVENANTS

4.01   The Owner hereby covenants with the Secured Creditors:

       (a)   to  pay   and  indemnify  the  Secured  Creditors  for  all  such
             expenses,  claims,  liabilities,  losses,  costs,  duties,  fees,
             charges or other  moneys as  are stated  in this  Mortgage to  be
             payable by  the Owner to  or recoverable  from the  Owner by  the
             Secured  Creditors (or in  respect of which  the Owner  agrees in
             this Mortgage to indemnify any of  the Secured Creditors) at  the
             times and in the manner specified in this Mortgage;

       (b)   to  pay  interest  on  any such  expenses,  claims,  liabilities,
             losses, costs,  duties, fees, charges or other moneys referred to
             in Clause 4.01(a)  from the date on  which demand is made  by any
             Secured  Creditor  for  payment by  the  Owner  of  the  relevant
             expense,  claim,  liability, loss,  cost,  duty,  fee, charge  or
             other money incurred  by a Secured  Creditor for which  the Owner
             is responsible (both before and  after any relevant judgment)  at
             the Default Rate; and 

       (c)   to  pay and perform its obligations which may be or become due or
             owing  to  a  Secured   Creditor  under  this  Mortgage  and  the
             Subsidiary  Guaranty at  the times  and in  the manner  specified
             herein or therein.

5.     PRESERVATION OF SECURITY

5.01   It is declared and agreed that:

       (a)   the  security created  by  this Mortgage  shall  be  held by  the
             Trustee  as  a continuing  security  for the  performance  of the
             Obligations  and  that  the security  so  created  shall  not  be
             satisfied  by  any intermediate  payment or  satisfaction  of any
             part of the Obligations;

       (b)   the  security so created shall be in addition to and shall not in
             any way be prejudiced  or affected by  any of the other  Security
             Documents;

       (c)   the Trustee shall not have to  wait for the Administrative  Agent
             to enforce any  of the other Security Documents  before enforcing
             the security created by this Mortgage;

       (d)   no delay  or omission on  the part of  the Trustee  in exercising
             any right, power or  remedy under this Mortgage shall impair such
             right, power or  remedy or be construed  as a waiver thereof  nor
             shall any single or partial exercise of any such right,  power or
             remedy preclude any further  exercise thereof or the  exercise of
             any  other  right,  power or  remedy.    The  rights,  powers and
             remedies  provided  in  this  Mortgage  are  cumulative  and  not
             exclusive of any rights,  powers and remedies provided by law and
             may be exercised from  time to time and  as often as the  Trustee
             may deem expedient; and

       (e)   any waiver by the  Trustee of any terms  of this Mortgage or  any
             consent given by  the Trustee under  this Mortgage shall  only be
             effective if given in writing  and then only for the purpose  and
             upon the terms for which it is given.

5.02   Any settlement  or discharge  under this  Mortgage between  the Trustee
       and the Owner shall be  conditional upon no security or payment  to the
       Secured Creditors  or any of  them by the Credit  Parties or  any other
       person being avoided or set-aside or ordered to be  refunded or reduced
       by  virtue  of  any  provision or  enactment  relating  to  bankruptcy,
       insolvency, administration  or liquidation for the  time being in force
       and, if such condition  is not satisfied, the Trustee shall be entitled
       to recover from the Owner  on demand the value of such  security or the
       amount  of any such payment as if  such settlement or discharge had not
       occurred.

5.03   The  rights  of  the Secured  Creditors  under  this  Mortgage  and the
       security  hereby  constituted  shall  not  be   affected  by  any  act,
       omission, matter or thing  which, but for this provision, might operate 
       to  impair, affect or discharge  such rights and  security, in whole or
       in  part, including without limitation, and whether  or not known to or
       discoverable by the Secured Creditors or any other person:

       (a)   any time or  waiver granted  to the Credit  Parties or any  other
             person; or

       (b)   the  taking,  variation, compromise,  renewal  or  release of  or
             refusal or neglect to  perfect or enforce any rights, remedies or
             securities  against  any  of  the  Credit  Parties  or  any other
             persons; or

       (c)   any   legal   limitation,   disability,   incapacity   or   other
             circumstances  relating  to  the  Credit  Parties  or  any  other
             person; or

       (d)   any amendment or supplement to the  Credit Agreement, any of  the
             other Credit Documents  (other than  this Mortgage) or  any other
             document or security; or

       (e)   the  dissolution,  liquidation,  amalgamation,  reconstruction or
             reorganization of any of  the Credit Parties or any other person;
             or

       (f)   the   unenforceability,   invalidity  or   frustration   of   any
             obligations  of any  of the  Credit Parties  or any  other person
             under the  Credit Agreement, any of  the other Security Documents
             (other than this Mortgage) or any other document or security.

6.     INSURANCE

6.01   The  Owner covenants with  the Trustee  throughout the  Credit Facility
       Period that:

       (a)   The  Owner shall,  at its  own expense, when  and so  long as any
             Obligation  remains  outstanding, insure  the  Rig  and keep  her
             insured, or cause  the Rig to be insured, in  lawful money of the
             United  States,  in  such  amounts,  for  such  risks  (including
             without   limitation,   hull   and   machinery/increased   value,
             protection  and  indemnity  risks, pollution  liability,  and war
             risks), in such  form (including without limitation,  the form of
             the loss  payable clause and the  designation of  named assureds)
             and  with such  first  class insurance  companies,  underwriters,
             funds,  mutual  insurance  associations  or clubs,  as  shall  be
             reasonably  satisfactory  to  the  Administrative  Agent.    With
             respect  to   hull  and   machinery/increased  value   insurance,
             including war risk, the  Owner shall insure the Rig and  keep her
             insured,  or cause the Rig to be  insured, for an amount which is
             at  least the  full commercial  value of  the Rig,  and when such
             amount is aggregated  with the amount of  such insurance coverage
             on the Other Rigs, such aggregate  amount shall be at least  110%
             of the Total Commitment.   The Rig shall  in no event be  insured
             for an amount less than the agreed valuation as  set forth in the
             applicable  marine and war risk  policies.   Such insurance shall
             cover  marine and war  risk perils, on  hull and  machinery, with
             deductibles not in excess of US$500,000  (such deductibles not to
             apply in  the  case of  Total  Loss of  the  Rig), and  shall  be
             maintained  in  the broadest  forms  available  in the  American,
             British  and  Scandinavian insurance  markets  or  in such  other
             major  international   markets  reasonably   acceptable  to   the
             Administrative Agent.  The Owner shall  maintain, or cause to  be
             maintained,  protection and  indemnity  or equivalent  insurance,
             including  war  risk   protection  and  indemnity  coverage   and
             coverage against pollution liability,  in an amount not less than
             US$100,000,000   (or,  with   respect   to  pollution   liability
             coverage,  such greater amount  as may be  required from  time to
             time  by the  Oil  Pollution  Act  1990, or  other  Environmental
             Laws),  as and  when applicable  to the  Rig and  its operations,
             through   underwriters   or  associations   acceptable   to   the
             Administrative Agent.  In addition, the  Owner shall, at its  own
             expense,  furnish  to  the  Administrative  Agent  a  mortgagee's
             single interest policy providing coverage which, when  aggregated
             with  the   mortgagee's  interest  insurance  furnished   to  the
             Administrative Agent in  respect of the  Other Rigs, shall  be in
             an amount equal  to at least 110% of the  aggregate amount of the
             Total  Commitment  (or  in  lieu  of  such  mortgagee's  interest
             insurance  Owner  shall cause  the  hull and  machinery/increased
             value  insurance to  be  endorsed to  afford  breach of  warranty
             coverage  for  the benefit  of the  Administrative Agent).   Such
             mortgagee's  interest  insurance  and  any  additional  insurance
             policies for  the benefit of  the Administrative  Agent shall  be
             maintained  in  the  broadest  form available  in  the  American,
             British and  Scandinavian markets  or  other major  international
             markets   acceptable   to  the   Administrative   Agent   through
             underwriters  acceptable to  the Administrative  Agent.   The Rig
             shall not operate  in or proceed  into any area then  excluded by
             trading  warranties  under  its  marine  or   war  risk  policies
             (including  protection  and  indemnity)  without   obtaining  any
             necessary   additional  coverage,   satisfactory   in  form   and
             substance, and  evidence  of which  shall  be furnished,  to  the
             Administrative Agent.

       (b)   The   policy  or  policies  of   insurance  shall  be  issued  by
             responsible   underwriters    reasonably   acceptable    to   the
             Administrative    Agent,   shall   contain   conditions,   terms,
             stipulations   and  insuring   covenants   satisfactory  to   the
             Administrative Agent, and shall  be kept in full force and effect
             by the  Owner so long as any Obligations remain outstanding.  All
             such  policies,  binders and  other  interim  insurance contracts
             shall be executed and issued in the name of  the Owner and shall,
             to the extent  required herein, provide  that loss be  payable to
             the Administrative  Agent for  distribution by it  to itself, the
             Banks  and the  Owner as  their interests  may appear,  and shall
             provide for at least  ten days' prior notice  to be given to  the
             Administrative  Agent by  the underwriters or  association in the
             event of  cancellation or  the failure  of the Owner  to pay  any
             premium or call which  would suspend coverage under the policy or
             the payment of a  claim thereunder.  The Administrative Agent and
             the Trustee shall  be named as  co-assureds on all  such policies
             and   insurance   contracts,  but   without   liability   of  the
             Administrative  Agent  or  the  Trustee for  premiums  or  calls.
             Certified copies of  all such policies, binders and other interim
             insurance contracts shall  be deposited  with the  Administrative
             Agent.  Originals shall also  be provided upon the request of the
             Administrative   Agent.     The  Owner   shall  furnish   to  the
             Administrative Agent  annually a detailed report signed by a firm
             of marine  insurance brokers satisfactory  to the  Administrative
             Agent  as to the insurance  maintained in respect  of the Rig, as
             to their opinion as  to the adequacy thereof and as to compliance
             with the provisions of this Clause 6.01.

             Unless otherwise required by  the Administrative Agent by  notice
             to the underwriters, although the following  insurance is payable
             to the Administrative Agent,  (i) any loss under any insurance on
             the  Rig with respect  to protection and  indemnity risks  may be
             paid directly to the  Owner to reimburse it for any  loss, damage
             or expense  incurred by  it and covered  by such insurance  or to
             the person to  whom any liability  covered by such  insurance has
             been  incurred and  (ii) in  the case of  any loss  (other than a
             loss  covered by (i) above or by  the next following paragraph of
             this Clause 6.01(b)) under  any insurance with respect to the Rig
             involving  any  damage  to  the Rig,  the  underwriters  may  pay
             directly for the  repair, salvage  or other charges  involved or,
             if the Owner shall  have first fully repaired the  damage or paid
             all  of the  salvage  or other  charges,  may  pay the  Owner  as
             reimbursement  therefor; provided, however,  that if  such damage
             involves a before deductible loss in excess of  US$1,000,000, the
             underwriters shall not make such payment  without first obtaining
             the  written consent  thereto of the  Administrative Agent (which
             consent shall  not be unreasonably  withheld).  Any loss  covered
             by this paragraph which is paid  to the Administrative Agent  but
             which might have been  paid, in accordance with the provisions of
             this paragraph, directly  to the Owner  or others, shall  be paid
             by the Administrative Agent to, or as directed by, the  Owner and
             all other payments to the Administrative  Agent of losses covered
             by this  paragraph shall  be applied by  the Administrative Agent
             in accordance with Clause 10.01.

             In  the  event  of an  actual  or  constructive Total  Loss  or a
             compromised constructive Total Loss or requisition  of title, all
             insurance payments therefor shall  be paid to the  Administrative
             Agent.    The  Owner  shall  not   declare  or  agree  with   the
             underwriters  that  the Rig  is  a  constructive or  compromised,
             agreed  or  arranged constructive  Total Loss  without  the prior
             written consent of the Administrative Agent.

       (c)   In the event of an  actual or constructive Total Loss of the Rig,
             the  Administrative  Agent  shall  retain out  of  the  insurance
             payments received  on account of such  loss any sum or  sums that
             shall be  or become  owing  to the  Secured  Creditors under  the
             Security Documents,  whether or  not  the same  be  then due  and
             payable, together with accrued  interest and the cost, if any, of
             collecting the  insurance,  and pay  the balance  as provided  in
             Clause 10.

       (d)   The Owner shall  comply with and satisfy all of the provisions of
             any applicable law, regulation, proclamation  or order concerning
             financial responsibility for liabilities imposed on  the Owner or
             the Rig with respect  to the carriage of passengers or pollution,
             and will maintain,  or cause to be  maintained, all  certificates
             or other evidence of financial responsibility  as may be required
             by  any such law, regulation,  proclamation or order with respect
             to the trade which the Rig from time to time is engaged in.

       (e)   The  Owner shall renew all insurances as they expire and so as to
             insure that there is  no gap in coverage, keep the Administrative
             Agent advised of the  progress of such renewals, and procure that
             the   insurers  shall   promptly  confirm   in  writing   to  the
             Administrative Agent as and when each such renewal is effected.

       (f)   The   Owner   shall   punctually   pay   all   premiums,   calls,
             contributions  or other  sums  payable  in  respect of  all  such
             insurances and produce  all relevant receipts when so required by
             the Administrative Agent.

       (g)   The Owner shall arrange for the  execution of such guarantees  as
             may  from  time  to  time  be  required  by  any  protection  and
             indemnity or war risks association.

       (h)   The  Owner shall  not employ  the  Rig or  suffer the  Rig to  be
             employed  otherwise  than in  conformity  with the  terms  of the
             instruments  of   insurance   aforesaid  relative   to  the   Rig
             (including any  warranties, express or implied,  therein) without
             first  obtaining the  consent of the  insurers to such employment
             and  complying with  such  requirements as  to  extra premium  or
             otherwise as the insurers may prescribe.

7.     RIG COVENANTS

7.01   The  Owner  covenants  with  the  Trustee  that  throughout the  Credit
       Facility Period the Owner will:

       (a)   maintain  its existence  as a  corporation in  good standing duly
             organized under the laws of the State of Oklahoma;

       (b)   keep the  Rig documented in  its name as  a United States  vessel
             and to do or allow to be done  nothing whereby such documentation
             may be forfeited or imperilled;

       (c)   not  without the  previous  consent in  writing  of the  Trustee,
             change the name of  the Rig or make  any modification to the  Rig
             which would or  might materially alter  the structure or  type or
             reduce the performance characteristics  of the Rig or  materially
             reduce the value of the Rig;

       (d)   keep the Rig in a  good and efficient state of repair  consistent
             with  the ownership  and operating  practices of  first-class rig
             owners and operators so  as to maintain her present class (namely
             +A1  Self-Elevating  Drilling Unit)  at  the  American Bureau  of
             Shipping free  of recommendations  and qualifications and  change
             of class, save those  notified to and approved in writing  by the
             Trustee  and so  as  to comply  with  all  laws, regulations  and
             requirements  (statutory   or  otherwise)  from   time  to   time
             applicable to vessels documented under the  laws and flag of  the
             United   States  and   applicable  to  vessels   trading  to  any
             jurisdiction to which the Rig may,  subject to the provisions  of
             this Mortgage, trade from time to time;

       (e)   procure that all repairs to or  replacement of any damaged,  worn
             or lost  parts or equipment be  effected in such  manner (both as
             regards workmanship  and quality of materials) as to not diminish
             the value of the Rig and  not to remove any material part of,  or
             item  of equipment installed on, the  Rig unless the part or item
             so removed  is forthwith  replaced  by a  suitable  part or  item
             which  is in the same  condition as or  better condition than the
             part or item removed, is free  from any Security Interest  (other
             than Permitted  Liens) in  favor  of any  person  other than  the
             Trustee and becomes  on installation on  the Rig the  property of
             the  Owner  and  subject  to  the  security constituted  by  this
             Mortgage;

       (f)   submit the  Rig to  such periodical or  other surveys  as may  be
             required  for  classification  purposes  and if  so  required  to
             supply to the Trustee  and the Administrative Agent copies of all
             survey reports issued in respect thereof;

       (g)   permit   the  representatives  of  the  Administrative  Agent  or
             independent surveyors representing the  Trustee to board the  Rig
             at  all  reasonable times  and  upon  reasonable  notice for  the
             purpose  of inspecting  her  condition  or  for  the  purpose  of
             satisfying themselves in regard  to proposed or executed  repairs
             and to afford all proper facilities for such inspections;

       (h)   promptly  pay and  discharge all  debts, damages  and liabilities
             whatsoever which  have given  or  may give  rise  to maritime  or
             possessory  liens  (other  than  Permitted Liens)  on  or  claims
             enforceable  against  the  Rig   and  all  tolls,  dues,   taxes,
             assessments, governmental  charges, fines and  penalties lawfully
             charged  on or  in respect  of the  Rig and  all other  outgoings
             whatsoever in respect of  the Rig and in  the event of arrest  of
             the Rig  pursuant  to  legal process,  or  in  the event  of  her
             detention in exercise or purported exercise  of any such lien  or
             claim  as aforesaid,  procure the  release of  the Rig  from such
             arrest  or detention  forthwith upon receiving  notice thereof by
             providing bail or otherwise as the circumstances may require; 

       (i)   not  employ the  Rig  or allow  her  employment in  any trade  or
             business  which is  unlawful  under  the  laws  of  any  relevant
             jurisdiction or  in carrying  illicit or  prohibited goods or  in
             any   manner   whatsoever  which   may  render   her   liable  to
             destruction,  seizure  or  confiscation  and  in   the  event  of
             hostilities  in any part of the world (whether war be declared or
             not) not employ  the Rig or suffer her employment in carrying any
             contraband  goods or  to  enter or  trade  to any  zone  which is
             declared  a war  zone  by  any government  or  by the  war  risks
             insurers of the Rig unless there shall have been  effected by the
             Owner  (at  its expense)  such  special,  additional or  modified
             insurance cover as the Administrative Agent may require;

       (j)   promptly furnish to  the Trustee all  such information as  it may
             from time  to time  require regarding  the  Rig, her  employment,
             position  and  engagements,   particulars  of  all   towages  and
             salvages and, upon the  request of the Trustee in writing, copies
             of  all  charters  and  other  contracts  for her  employment  or
             otherwise howsoever concerning her;

       (k)   notify  both the  Trustee and the  Administrative Agent forthwith
             by telex or telecopy thereafter confirmed by letter of:

             (i)    any  casualty to the Rig  which is  or is  likely to  be a
                    Major Casualty, and

             (ii)   any  occurrence in consequence whereof the  Rig has become
                    or is,  by the  passing of  time  or  otherwise, likely to
                    become a Total Loss, and

             (iii)  any requirement or  recommendation made by  any insurer or
                    classification society or by any competent authority which
                    is not immediately complied with, and

             (iv)   any arrest  of  the  Rig  or  the  exercise  or  purported
                    exercise of any lien  on the Rig or any requisition of the
                    Rig for hire, and

             (v)    any intended dry docking of the Rig, as to which the Owner
                    shall   give  the  Trustee ten  (10)  days  prior  notice,
                    provided,  that in the  event of any emergency dry docking
                    of   the  Rig,  the  Owner  shall immediately  notify  the
                    Trustee; and

             (vi)   any intended deactivation or lay-up of the Rig (other than
                    for normal periods of inactivity between contracts for the
                    Rig during  which  periods the  Rig  remains  manned)  and
                    obtain the prior written consent of the Trustee;

       (l)   keep  proper books  of account in  respect of the  Rig and as and
             when the  Trustee or the Administrative  Agent may  so reasonably
             require make  such books  available for  inspection on behalf  of
             the Trustee and furnish satisfactory evidence that  the wages and
             allotments  and the insurance  of the master  and crew  are being
             regularly  paid  and that  all  deductions from  crew's  wages in
             respect  of  tax  and/or  social  security  liability  are  being
             properly accounted  for and  that  the master  has  no claim  for
             disbursements other than those  incurred by  him in the  ordinary
             course of trading on the voyage then in progress;

       (m)   observe  the obligations  contained in  Sections 7  and 8  of the
             Credit Agreement  which apply to  the Rig and  the Owner, and  in
             pursuance thereof such obligations  shall be incorporated in  and
             deemed to form part of this Mortgage mutatis mutandis;

       (n)   not without the previous  consent in writing of the Trustee (such
             consent not to  be unreasonably withheld),  put the Rig  into the
             possession of any person for the purpose of  work being done upon
             her in  an amount exceeding or likely  to exceed Two Million Five
             Hundred  Thousand  United States  Dollars (US$2,500,000)  (or the
             equivalent in any other currency) unless such person shall  first
             have  given to the Trustee  and in  terms reasonably satisfactory
             to it a written undertaking  not to exercise any lien on  the Rig
             for the cost of such work or otherwise;

       (o)   comply  with  and satisfy  all the  requirements  and formalities
             established by  the Ship  Mortgage Act  and  any other  pertinent
             legislation of the  United States to  perfect this Mortgage  as a
             legal,  valid and  enforceable first and  preferred lien upon the
             Rig  and promptly  to furnish  to the  Trustee from  time to time
             such proof as the Trustee may  request for its satisfaction  with
             respect to  the Owner's  compliance with the  provisions of  this
             sub-clause;

       (p)   place, and  use due  diligence  to retain,  a properly  certified
             copy of this Mortgage on  board the Rig with her papers and cause
             such certified copy of this  Mortgage to be exhibited to  any and
             all persons having  business with the  Rig which might  give rise
             to any lien thereon  other than a lien for crew's  wages, general
             average and salvage and to any  representative of the Trustee  on
             demand and to place and keep  prominently displayed in the  chart
             room and  in  the master's  cabin  of the  Rig a  framed  printed
             notice in plain type in English  of such size that the  paragraph
             of reading  matter shall  cover a space  not less  than 6  inches
             wide and 9 inches high reading as follows:


                                       "NOTICE OF MORTGAGE

             This Rig is covered  by a First Preferred Mortgage to CHRISTIANIA
             BANK OG  KREDITKASSE, NEW  YORK BRANCH,  as Security Trustee  for
             the  Banks defined in  the said Mortgage  under authority  of the
             United  States Ship Mortgage Act, 1920, as amended, recodified as
             46 U.S.C.   31301 et  seq.  Under the terms of the  said Mortgage
             neither the Owner nor  any charterer nor the  master of this  Rig
             nor  any  other  person has  any  right,  power  or  authority to
             create,  incur or permit  to be  imposed upon  this Rig  any lien
             whatsoever  other  than for  crew's  wages,  general average  and
             salvage."

       (q)   comply,  or procure  compliance with, all  Environmental Laws and
             Environmental  Approvals relating  to the  Rig, its  operation or
             management and the business of the Owner from time to time;

       (r)   notify the Trustee forthwith upon:

             (i)    any Environmental Claim which could  reasonably be expected
                    to result in damages in excess of  US$200,000 being or made
                    against  the  Owner, or  otherwise in  connection with  the
                    Rig; or

             (ii)   any Environmental Incident occurring,  and keep the Trustee
                    advised,  in  writing on  such regular  basis  and in  such
                    detail  as  the  Trustee  shall  require,  of  the  Owner's
                    response  to  such  Environmental  Claim  or  Environmental
                    Incident;

       (s)   not sell, mortgage or transfer the  Rig (other than as  permitted
             by  the  Credit Agreement)  without  the written  consent  of the
             Trustee having first  been obtained, and any such written consent
             to  any  one  such  sale,  mortgage  or  transfer  shall  not  be
             construed to be  a waiver of this  provision with respect to  any
             subsequent proposed  sale, mortgage or transfer.   Any such sale,
             mortgage or transfer shall be subject  to the provisions of  this
             Mortgage and  the lien it creates.   The Owner  shall not charter
             the  Rig to, or permit the Rig  to serve under any contract with,
             a person included  within the definition  of (i) "national"  of a
             "designated foreign country," or "specially  designated national"
             of a "designated  foreign country," in the Foreign Assets Control
             Regulations  or  the  Cuban  Assets Control  Regulations  of  the
             United States Treasury Department,  31 C.F.R. Parts 500 and  515,
             in each case as amended, (ii)  "Government of Libya", "entity  of
             the  Government  of  Libya"  or  "Libyan  entity"  in  the Libyan
             Sanctions Regulations of  the United States Treasury  Department,
             31 C.F.R. Part  550, as amended,  or (iii) "Government  of Iraq",
             "entity  of the Government of  Iraq" or "Iraqi Government entity"
             in the Iraqi Sanctions Regulations, 56  Fed. Reg. 2112 (1991)  to
             be codified  at 31 C.F.R.  Part 575, as  amended, all within  the
             meaning   of   said   Regulations   or    of   any   regulations,
             interpretations  or rulings  issued thereunder, or  sail in Cuban
             waters  or enter any Cuban port for  any purpose or engage in any
             transaction  that violates  any provision of  said Regulations or
             that  violates   any  provision   of  the   Iranian  Transactions
             Regulations, 31  C.F.R. Part 560,  as amended, the Foreign  Funds
             Control  Regulations,  31  C.F.R.  Part  520,   as  amended,  the
             Transaction Control Regulations, 31 C.F.R. Part  505, as amended,
             the  Haitian  Transaction Regulations,  31  C.F.R.  Part 580,  as
             amended, the Foreign Assets  Control Regulations, 31 C.F.R.  Part
             500,  as amended, or  Executive Orders 12810  and 12831;  if such 
             transaction  or violation  would (i)  expose  the Trustee  to any
             penalty,  sanction or  investigation or (ii)  jeopardize the lien
             created by this Mortgage  or (iii) have a material adverse effect
             on the Owner or the operation of the Rig;

       (t)   shall not cause or  permit the Rig to  be operated in any  manner
             contrary  to law, shall  not abandon the  Rig in  a foreign port,
             shall not  engage in  any unlawful trade  or violate  any law  or
             carry any cargo that  shall expose the Rig to penalty, forfeiture
             or  capture, and shall not  do, or  suffer or permit  to be done,
             anything which can or  may injuriously affect the registration or
             enrollment of the  Rig under the  laws of  the United States  and
             will at all times keep the Rig duly documented thereunder.

8.     PROTECTION OF SECURITY

8.01   The  Trustee shall  without prejudice  to its  other rights  and powers
       under  this Mortgage and  the other Credit  Documents be  entitled (but
       not  bound) at any time  and as often  as may be  necessary to take any
       such action  as it  may in  the reasonable exercise  of its  discretion
       think  fit for the  purpose of protecting  or maintaining  the security
       created by  this Mortgage  and the  other Credit  Documents (including,
       without limitation, such action as is  referred to in Clause 8.02)  and
       each  and  every  expense,  liability,  or   loss  (including,  without
       limitation,  legal fees)  so incurred  by the  Secured Creditors  in or
       about the protection or  maintenance of the said security together with
       interest payable thereon under  Clause 4.01(b) shall be repayable to it
       by the Owner on demand.

8.02   Without prejudice to the generality of Clause 8.01:

       (a)   if  the Owner does not comply  with the provisions of Clause 6 or
             any of them the Administrative Agent  shall be entitled (but  not
             bound)  to effect  or  to replace  and  renew  and thereafter  to
             maintain the Insurances  in such manner  as in its  discretion it
             may  think fit and  to require that  all policies,  contracts and
             other  records relating  to the Insurances  (including details of
             any  correspondence concerning  outstanding claims)  be forthwith
             delivered  to  such  brokers  as  the  Administrative  Agent  may
             nominate and  to  collect, recover,  compromise and  give a  good
             discharge for all claims  then outstanding or thereafter  arising
             under  the  Insurances  or  any of  them  and  to  take  over  or
             institute  (if necessary using  the name of  the Owner)  all such
             proceedings in connection  therewith as the  Administrative Agent
             in  its absolute  discretion  may think  fit  and  to permit  the
             brokers  through whom the collection  or recovery  is effected to
             charge the usual brokerage therefor; and

       (b)   if  the Owner  does  not comply  with  the  provisions of  Clause
             7.01(d)  and/or 7.01(f)  or  any of  them  the  Trustee shall  be
             entitled (but not  bound) to arrange for the carrying out of such
             repairs to and/or  surveys of the  Rig as it  deems expedient  or
             necessary; and 

       (c)   if  the Owner  does  not comply  with  the  provisions of  Clause
             7.01(h) or  any of them  the Trustee shall  be entitled  (but not
             bound)  to  pay  and  discharge  all   such  debts,  damages  and
             liabilities  and  all   such  tolls,  dues,  taxes,  assessments,
             charges,  fines,  penalties and  other outgoings  as  are therein
             mentioned and/or to take  any such measures as it deems expedient
             or necessary for the purpose of securing the release of the Rig.

9.     ENFORCEABILITY AND TRUSTEE'S POWERS

9.01   Upon  the happening  of any of  the Events of  Default specified in the
       Credit Agreement  but without  the  necessity for  any  court order  or
       declaration in any jurisdiction  to the effect that an Event of Default
       has occurred (and whether  prior to or after the Required  Banks having
       served on the Owner any  such notice as is referred to  in Section 9 of
       the Credit Agreement)  the security constituted by this  Mortgage shall
       become  immediately enforceable  and the Trustee  shall be entitled, as
       and when  it may see fit, to put into force  and exercise all or any of
       the powers possessed by it as  mortgagee of the Rig or otherwise and in
       particular:

       (a)   to  exercise  all  the  rights and  remedies  in  foreclosure and
             otherwise  given to  mortgagees by  applicable law  including the
             provisions of the Ship Mortgage Act;

       (b)   to take possession of the Rig whether  actually or constructively
             and/or otherwise to take control of the Rig wherever the  Rig may
             be and cause  the Owner or any other person  in possession of the
             Rig forthwith upon  demand to surrender  the same to  the Trustee
             without legal  process and without  liability of the Trustee  for
             any losses  or  damages incurred  thereby and  without having  to
             render accounts to the Owner in connection therewith;

       (c)   to  require that  all policies, contracts,  certificates of entry
             and other records relating  to the Insurances (including  details
             of   and  correspondence   concerning   outstanding  claims)   be
             forthwith  delivered to  or to  the  order of  the Administrative
             Agent;

       (d)   to collect, recover, compromise  and give a good discharge for or
             procure   that   the  Administrative   Agent   collect,  recover,
             compromise  and give  good discharge  for any  and all  moneys or
             claims  for moneys  then outstanding or  thereafter arising under
             the Insurances or any Requisition Compensation and  to permit any
             brokers  through  whom  collection  or recovery  is  effected  to
             charge the usual brokerage therefor;

       (e)   to  take over  or institute (if  necessary using the  name of the
             Owner) or, to the extent lawful, procure that  the Administrative
             Agent take over  or institute all such  proceedings in connection
             with the Rig,  the Insurances, or any Requisition Compensation as
             the  Trustee  in  its  absolute  discretion  thinks  fit  and  to
             discharge,  compound, release  or compromise  claims  against the
             Owner in respect of the Rig which  have given or may give rise to
             any charge or lien on the Rig or which are or may  be enforceable
             by proceedings against the Rig;

       (f)   to  sell the  Rig  or any  share therein  with  or without  prior
             notice to the  Owner free from  any claim of  or by the  Owner of
             any  nature whatsoever, and  with or without  the benefit  of any
             charterparty  or  other contract  for her  employment,  by public
             auction  or private contract  at such place  and upon  such terms
             (including,  without limitation,  on terms  such that  payment of
             some or all of the purchase price be deferred)  as the Trustee in
             its absolute discretion may determine with  power to postpone any
             such sale,  without being  answerable for any  loss occasioned by
             such sale or resulting  from postponement thereof, and/or  itself
             to purchase  the Rig at  any such public auction  and to  set off
             the purchase price against all or any part of the Obligations;

       (g)   to manage, insure,  maintain and repair  the Rig and  to charter,
             employ, sail or lay  up the Rig in  such manner, upon such  terms
             and  for such period  as the Trustee  in its  absolute discretion
             deems expedient and for the purposes  aforesaid the Trustee shall
             be  entitled to do  all acts and  things incidental  or conducive
             thereto  and  in  particular  to  enter  into  such  arrangements
             respecting the Rig,  and the insurance, management,  maintenance,
             repair,  classification, chartering  and  employment  of the Rig,
             in all respects as  if the Trustee were the owner  of the Rig and
             without being responsible for any loss thereby incurred;

       (h)   to recover from the  Owner on demand any expenses, liabilities or
             losses as  may  be  incurred  by the  Trustee  in  or  about  the
             exercise   of   the   power   vested   in   the   Trustee   under
             Clause 9.01(g);

       (i)   generally,  to recover from  the Owner on  demand each  and every
             expense, liability or  loss incurred by  the Trustee in  or about
             or  incidental  to the  exercise  by  it  of any  of  the  powers
             aforesaid.

9.02   The Trustee shall not  be obliged to make any enquiry  as to the nature
       or  sufficiency of any payment received by it under this Mortgage or to
       make any  claim, take  any action or  enforce any  rights and  benefits
       assigned to the Trustee  by this Mortgage or  to which the Trustee  may
       at any time be entitled hereunder.

9.03   Neither  the Secured  Creditors, nor their  agents, managers, officers,
       employees,  delegates and  advisers shall  be  liable for  any expense,
       claim, liability, loss, cost,  damage or expense incurred or arising in
       connection  with the  exercise  or purported  exercise  of any  rights,
       powers  and discretions  under this  Mortgage in  the absence  of gross
       negligence or wilful misconduct.

9.04   The Trustee  shall not by reason of the taking possession of the Rig be
       liable  to account  as mortgagee-in-possession  or for  anything except
       actual receipts or  be liable for any loss upon  realization or for any
       default  or  omission  for  which a  mortgagee-in-possession  might  be
       liable.

9.05   Upon  any sale  of the  Rig  or any  share therein  by the  Trustee the
       purchaser shall  not be bound  to see or enquire  whether the  power of
       sale  of the Trustee has arisen in the manner provided in this Mortgage
       and the  sale shall be deemed to be within the power of the Trustee and
       the  receipt of the  Trustee for the  purchase money  shall effectively
       discharge  the purchaser who shall not  be concerned with the manner of
       application  of the  proceeds  of  sale or  be  in  any way  answerable
       therefor.

10.    APPLICATION OF MONEYS

10.01  All moneys  received by the Trustee (or  any other Secured Creditor, as
       the case  may be) in respect of sale of the Rig or any part thereof, in
       respect of recovery under the Insurances  or in respect of  Requisition
       Compensation, shall be applied in the following manner:

       (i)   first, to  the payment  of all amounts  owing the Trustee  of the
             type described in clauses (ii) and (iii) of Recital E;

       (ii)  second,  to  the  extent  moneys  remain  after  the  application
             pursuant  to the  preceding clause  (i), an  amount equal  to the
             outstanding  Obligations shall  be paid to  the Secured Creditors
             as  provided  in  Clause  10.01(c), with  each  Secured  Creditor
             receiving an amount equal  to such Obligations held by  it or, if
             the  proceeds  are   insufficient  to  pay  in   full  all   such
             Obligations, its Pro Rata  Share (as defined below) of the amount
             remaining to be distributed; and

       (iii) third,  to  the  extent  moneys  remain   after  the  application
             pursuant to  the preceding  clauses (i)  and (ii), and  following
             the  termination of  this Mortgage  pursuant to  Clause 3.01, any
             surplus  then remaining  shall  be paid  to  the Owner,  subject,
             however, to the  rights of the holder  of any then existing  Lien
             of which the Trustee has actual notice (without investigation).

       (b)   For purposes of this Mortgage "Pro  Rata Share" shall mean,  when
             calculating a Secured Creditor's  portion of any distribution  or
             amount in respect of  any Obligations, the amount (expressed as a
             percentage)  equal to a  fraction the numerator  of which  is the
             then unpaid amount  of such Obligations owing to  or held by such
             Secured  Creditor  and  the  denominator  of  which is  the  then
             outstanding  amount of  all such  Obligations.   For  purposes of
             determining  the  amount payable  to each  Secured  Creditor, the
             Trustee shall  be entitled  to request  each Secured Creditor  to
             furnish it with written  notice of the amount of Obligations then
             owed to  it  and shall  be  entitled to  reply upon  the  amounts
             stated therein in making such distribution. 

       (c)   All payments required to  be made to Secured  Creditors hereunder
             shall be  made  to  the Administrative  Agent  under  the  Credit
             Agreement for the account of the Secured Creditors.

       (d)   For  purposes of  applying payments  received in  accordance with
             this Clause 10.01,  the Trustee shall  be entitled to  reply upon
             (i) the Administrative Agent under the  Credit Agreement and (ii)
             the   Secured   Creditors  for   a   determination   (which   the
             Administrative  Agent  and   each  Secured  Creditor,   by  their
             acceptance  of the benefits of  this Mortgage  shall be obligated
             to provide  upon  request  of the  Trustee)  of  the  outstanding
             Obligations owed to the  Secured Creditors.  Unless it has actual
             knowledge (including  by  way of  written notice  from a  Secured
             Creditor)  to the  contrary, the  Administrative Agent  under the
             Credit  Agreement,  in furnishing  information  pursuant  to  the
             preceding sentence, and the  Trustee, in acting hereunder,  shall
             be entitled to assume  that no obligations other than  principal,
             interest and regularly  accruing fees  are owing  to any  Secured
             Creditor.

11.    FURTHER ASSURANCES

11.01  The Owner shall execute and do all such assurances,  acts and things as
       the Trustee in its absolute discretion may require for:

       (a)   perfecting or protecting the security created (or  intended to be
             created) by this Mortgage; or

       (b)   preserving  or protecting any  of the rights  of the  Trustee and
             the other Secured Creditors under this Mortgage; or

       (c)   ensuring that the  security constituted by this  Mortgage and the
             covenants and obligations  of the Owner under this Mortgage shall
             enure to the benefit  of any transferee, successor or assignee of
             the Trustee; or

       (d)   enforcing the security constituted  by this Mortgage on or at any
             time after the same shall have become enforceable; or

       (e)   the exercise of any  power, authority or discretion vested in the
             Trustee under this Mortgage,

       in  any such  case, forthwith  upon demand  by the  Trustee and  at the
       expense of the Owner.

12.    POWER OF ATTORNEY

12.01  The Owner,  by way of security  and in order  more fully to  secure the
       performance   of  the  Obligations,  hereby  irrevocably  appoints  the
       Trustee as its  attorney until the  Total Commitment is  terminated and
       none of the Obligations remain outstanding for the purposes of: 

       (a)   doing  in  its  name all  acts  and  executing,  signing  and (if
             required)  registering in its name all  documents which the Owner
             itself  could do, execute,  sign or register  in relation  to the
             Rig (including without limitation, transferring title  to the Rig
             to a third party), provided, however,  that such power shall  not
             be  exercisable by  or  on  behalf  of  the  Trustee  until  this
             Mortgage shall have  become immediately  enforceable pursuant  to
             Clause 9.01; and

       (b)   executing,   signing,  perfecting,   doing   and  (if   required)
             registering every such further  assurance document, act or  thing
             as is referred to in Clause 11.

12.02  The exercise  of such power as is referred to  in Clause 12.01(a) by or
       on  behalf of the  Trustee shall  not put any  person dealing  with the
       Trustee  upon  any  enquiry as  to  whether  this  Mortgage  has become
       enforceable nor shall  such person  be in  any way  affected by  notice
       that this Mortgage  has not become enforceable and, in relation to both
       Clauses 12.01(a)  and 12.01(b),  the exercise  by  the Trustee  of such
       power shall be conclusive evidence of its right to exercise the same.

13.    INDEMNITIES

13.01  The  Owner will  indemnify  and  save  harmless  each  of  the  Secured
       Creditors  and each agent  or attorney appointed  under or  pursuant to
       this Mortgage  (each an  "Indemnitee")  from and  against  any and  all
       expenses, claims, liabilities, losses,  taxes, costs, duties, fees  and
       charges  suffered, incurred or  made by such  Secured Creditor  or such
       agent or attorney in good faith:

       (a)   in the exercise  or purported exercise  of any rights,  powers or
             discretions vested in them pursuant to this Mortgage; or

       (b)   in the preservation or enforcement of  the rights of the  Trustee
             under this Mortgage; or

       (c)   on  the  release of  the Rig  from the  security created  by this
             Mortgage,

       and each of  the Secured Creditors and each such  agent or attorney may
       retain and  pay all sums in  respect of the same  out of money received
       under  the powers  conferred  by  this  Mortgage.    All  such  amounts
       recoverable by such Secured Creditors or  such agent or attorney  shall
       be recoverable on a full indemnity basis.

13.02  Without limiting the foregoing  Clause 13.01, the Owner  hereby further
       indemnifies and holds harmless  each of the Secured Creditors and their
       respective officers,  directors, employees,  attorneys and agents  from
       and  against  any and  all  liabilities,  losses, obligations,  claims,
       damages,  penalties, causes  of action, costs  and expenses (including,
       without   limitation,   reasonable   attorneys'   fees   and  expenses,
       consultant  fees, investigation  and laboratory  fees) imposed  upon or
       incurred by or asserted against them, or  any of them, by reason of (a)
       an  actual,  alleged  or  threatened Environmental  Incident;  (b)  any
       personal injury (including wrongful  death) or property damage (real or
       personal)  or economic  damage  arising  out  of  or  related  to  such
       Environmental  Incident;  (c)  any   Environmental  Claim  brought   or
       threatened,  or settlement  reached;  or  (d)  any violation  of  laws,
       orders, regulations, requirements or demands  of government authorities
       relating to Hazardous Materials at, or discharged from the Rig.

13.03  If, under any applicable  law or regulation, and whether pursuant  to a
       judgment being made or  registered against the Owner or the liquidation
       of  the  Owner  or for  any  other  reason,  any  payment under  or  in
       connection  with the Subsidiary  Guaranty or this  Mortgage is  made or
       fails  to be  satisfied in  a currency  (the "payment  currency") other
       than the currency in which  such payment is due under or  in connection
       with  this Mortgage  (the "contractual currency"),  then to  the extent
       that the amount of such payment actually received by the  Trustee, when
       converted into the contractual  currency at the rate of exchange, falls
       short of the amount due  under or in connection with this Mortgage, the
       Owner,  as a separate and  independent obligation,  shall indemnify and
       hold harmless  the Trustee against the  amount of such shortfall.   For
       the purposes of  this Clause 13.03, "rate  of exchange" means  the rate
       at which the Trustee is able on the date of such payment  (or, if it is
       not practicable for the  Trustee to  purchase the contractual  currency
       with the payment currency on the date  of such payment, at the rate  of
       exchange as  soon afterwards as  is practicable for  the Trustee to  do
       so) to purchase the  contractual currency with the payment currency and
       shall take  into account any  premium and other costs  of exchange with
       respect thereto.

14.    EXPENSES

14.01  The Owner shall pay to  any Secured Creditor on demand all  costs, fees
       and expenses, including,  but not limited  to, legal fees  and expenses
       and valuation fees and Taxes thereon  incurred by any Secured  Creditor
       or for  which any  Secured  Creditor may  become  liable in  connection
       with:

       (a)   the  negotiation,  preparation   and  execution  of  the   Credit
             Agreement, the Subsidiary Guaranty  and the Credit Documents  (or
             any of them); and/or

       (b)   the preserving  or enforcing  of, or  attempting  to preserve  or
             enforce,  any  of its  rights  under  the Credit  Agreement,  the
             Subsidiary Guaranty or the Credit Documents (or any of them).

14.02  The  Owner shall  pay to the  Trustee and  the Administrative  Agent on
       demand  all costs, fees  and expenses (including,  but not  limited to,
       legal  fees and  expenses) and  Taxes thereon  incurred by  any Secured
       Creditor in connection with:

       (a)   any variation  of, or  amendment  or supplement  to,  any of  the
             terms of  the Credit  Agreement, the  Subsidiary Guaranty or  the
             Credit  Documents  (or  any  of them)  requested  by  the  Owner,
             necessary  or advisable under applicable  law or  relating to the
             syndication of the Facility,  or initiated during the  occurrence
             and continuation of an Event of Default; and/or

       (b)   any consent or  waiver required from  the Trustee in  relation to
             the  Credit  Agreement, the  Subsidiary Guaranty  and  the Credit
             Documents (or any of them),

       and  in  each  case,   regardless  of  whether  the  same  is  actually
       implemented, completed or granted, as the case may be.

14.03  The  Owner shall  pay promptly  all stamp,  documentary and  other like
       duties  and  Taxes  to  which  the  Credit  Agreement,  the  Subsidiary
       Guaranty and the Credit  Documents (or any of  them) may be subject  or
       give  rise and  shall indemnify the  Trustee on demand  against any and
       all  liabilities with  respect  to  or  resulting  from  any  delay  or
       omission on the part of the Owner to pay any such duties or Taxes.

15.    COMMUNICATIONS

15.01  All  notices to the Trustee hereunder shall  be in writing and shall be
       made to the following address:

                    Christiania Bank og Kreditkasse, New York Branch
                   11 West 42nd Street
                   7th Floor
                   New York, New York  10036
                   Telefax:  (212) 827-4888
                   Attention:  Loan Administration

       All  other notices  shall be  made  to the  addresses  provided for  in
       Section 12.03 of the Credit Agreement and Annex II thereto.

16.    ASSIGNMENTS

16.01  This  Mortgage shall be binding upon and  shall enure to the benefit of
       the  Owner,  the Secured  Creditors and  their  respective transferees,
       successors and  permitted assigns  and references in  this Mortgage  to
       any of them shall be construed accordingly.

16.02  The Owner may  not assign  or transfer all  or any  part of its  rights
       and/or obligations under this Mortgage.

16.03  Pursuant to Section  12.04 of the  Credit Agreement, each Bank  has the
       right to  assign or  transfer  all or  any part  of  its rights  and/or
       obligations under the Credit  Agreement on the terms  therein provided.
       The  Trustee  shall  notify  the  Owner  promptly  following  any  such
       assignment, transfer or change.

17.    TOTAL AMOUNT, ETC.

17.01  The  total amount of  the direct or  contingent obligations  secured by
       this  Mortgage is  Three Hundred Million  U.S. Dollars (US$300,000,000)
       of  principal  plus  interest,  fees, commissions  and  performance  of
       mortgage  covenants.   The interest  of the Owner  in the  Rig is 100%.
       The interest of the Trustee  in the Rig is 100%.  The date  of maturity
       is  November 13,  2001, and  the discharge  amount is  the same  as the
       total amount plus  such other sums as shall be  payable by the Owner to
       the Banks under the Credit Agreement or the Subsidiary Guaranty.

18.    MISCELLANEOUS

18.01  If at any time  any one or more of  the provisions in this Mortgage  is
       or becomes invalid, illegal or unenforceable  in any respect under  any
       law or  regulation, the  validity, legality  and enforceability of  the
       remaining provisions of this  Mortgage shall not be in any way affected
       or impaired thereby.

18.02  The Trustee, at any time and  from time to time, may delegate  by power
       of attorney or in any other manner to any person  or persons all or any
       of the  powers, authorities  and  discretions which  are  for the  time
       being  exercisable by the  Trustee under this  Mortgage in  relation to
       the Rig.  Any such delegation  may be made upon such terms and  subject
       to such regulations as  the Trustee may think  fit.  The Trustee  shall
       not  be in any way liable  or responsible to the  Owner for any loss or
       damage  arising from any  act, default, omission  or misconduct  on the
       part of any such delegate.

18.03  A  certification or  determination  by the  Trustee  as  to any  matter
       provided for in this Mortgage shall, in the absence of  manifest error,
       be conclusive and binding on the Owner.

19.    JURISDICTION

19.01  The Owner agrees that the Trustee shall have the  liberty but shall not
       be  obliged to take  any proceedings  in the courts  of any  country to
       protect  or enforce  the security  constituted by  this Mortgage  or to
       enforce any provisions of this Mortgage  or to enforce the  Obligations
       and for the purpose  of any proceedings for such enforcement  the Owner
       hereby  submits to the jurisdiction of the courts of any country of the
       choice of the Trustee.

19.02  Without prejudice to the  generality of Clause 19.01, the Trustee shall
       have the right to  arrest and take action  against the Rig at  whatever
       place the  Rig shall be found lying  and for the purpose  of any action
       which  the Trustee may bring before  the courts of such jurisdiction or
       other judicial authority  and for the  purpose of any action  which the
       Trustee may  bring against the Rig, any writ, notice, judgment or other
       legal process or documents may (without  prejudice to any other  method
       of service under applicable law)  be served upon the master of  the Rig
       (or upon anyone acting as  the master) and such service shall be deemed
       good service on the Owner for all purposes.

19.03  The  Owner  agrees that  should  the Trustee  bring  a legal  action or
       proceedings  against  it  or its  assets  in  relation  to  any matters
       arising out  of or in connection  with this Mortgage, no  immunity from
       such  legal action or  proceedings (which shall  be deemed  to include,
       without   limitation,  suit,  attachment   prior  to   judgment,  other
       attachment, the obtaining of judgment, execution  or other enforcement)
       shall be claimed by  or on behalf of  the Owner or with respect  of its
       assets, and  the Owner  hereby  irrevocably waives  any  such right  of
       immunity which it or  its assets now has  or may hereafter acquire  and
       the Owner hereby consents generally in  respect of any legal action  or
       proceedings arising  out of or in connection with  this Mortgage to the
       giving  out of any  relief or  the issue of  any process  in connection
       with  such  action or  proceedings including,  without  limitation, the
       making,  enforcement or  execution or  attachment against  any property
       whatsoever of any order or judgment which may be made  or given in such
       action or proceedings.

IN WITNESS  whereof the Owner has caused this Mortgage to be executed the  day
and year first before written.

HRB RIG CORPORATION


By_____________________________________
    Name:  T.W. Nagle
    Title:  Vice President



                          ACKNOWLEDGEMENT OF MORTGAGE


STATE OF NEW YORK      )
                       )  S.S.
COUNTY OF NEW YORK     )



On this 13th  day of November, 1996  before me personally appeared  Timothy W.
Nagle  to me known  who being  by me  duly sworn  did depose  and say  that he
resides at 13307 Tosca  Lane, Houston, TX; that  he is Vice President  for HRB
RIG CORPORATION, the corporation described in and which executed the foregoing
instrument; and  that he  signed his  name thereto  by order  of the Board  of
Directors of HRB RIG CORPORATION.



________________________                                                   
Notary Public