Exhibit 10.114



                              SUBSIDIARY GUARANTY


            SUBSIDIARY  GUARANTY, dated  as of  August  30, 1996  made by  the
undersigned (each a "Guarantor" and  collectively, the "Guarantors").   Except
as  otherwise  defined herein,  terms used  herein and  defined in  the Credit
Agreement (as hereinafter defined) shall be used herein as therein defined.


                             W I T N E S S E T H :


            WHEREAS, Reading & Bates Corporation, Reading & Bates Drilling Co.
(the "Borrower"),  various  financial institutions  from  time to  time  party
thereto  (the "Banks"),  Credit  Lyonnais  New York  Branch,  as Co-Agent  and
Christiania Bank og Kreditkasse, New York  Branch, as Agent (the "Agent") have
entered  into a  Credit Agreement,  dated as  of April  30, 1996  (as amended,
modified or supplemented from time to time, the "Credit Agreement"), providing
for the making of  Loans and the issuance of, and participation in, Letters of
Credit  as contemplated  therein (the Banks,  the Agent, the  Letter of Credit
Issuer, the  Collateral Agent and  the Trustee are herein  collectively called
the "Creditors");

            WHEREAS, the Borrower  owns, directly or  indirectly, 100% of  the
capital stock of each Guarantor;

            WHEREAS, it is a condition to the making of Loans and the issuance
of, and participation  in, Letters of Credit  under the Credit Agreement  that
each Guarantor shall have executed and delivered this Guaranty; and

            WHEREAS, each  Guarantor will obtain benefits  from the incurrence
of  Loans by  the Borrower  and the  issuance of  Letters of Credit  under the
Credit Agreement and,  accordingly, desires to execute this  Guaranty in order
to satisfy the conditions described  in the preceding paragraph and to  induce
the Banks  to make Loans to  the Borrower and  the Letter of Credit  Issuer to
issue Letters of Credit;


            NOW, THEREFORE,  in  consideration  of  the  foregoing  and  other
benefits accruing to each Guarantor, the receipt and sufficiency  of which are
hereby acknowledged, each Guarantor hereby makes the following representations
and warranties  to the  Creditors and  hereby covenants and  agrees with  each
Creditor as follows:

            1.  Each  Guarantor,  jointly   and  severally,  irrevocably   and
unconditionally, guarantees, as  primary obligor and not merely  as surety, to
the Creditors  the full and  prompt payment  when due (whether  at the  stated
maturity, by acceleration or otherwise) of  (x) the principal of and  interest
on the Notes issued  by, and the Loans made to, the  Borrower 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  (including obligations  which, but  for the automatic  stay under
Section 362(a) of the Bankruptcy Code, would become due) and liabilities owing
by the Borrower to the Creditors under the Credit Agreement (including,  with-
out  limitation,  indemnities,  Fees and  interest  thereon)  now  existing or
hereafter incurred  under, arising  out of  or in  connection with the  Credit
Agreement or any other Credit Document  and the due performance and compliance
with the  terms of the Credit  Documents by the Borrower  (all such principal,
interest,  liabilities and  obligations being  herein collectively  called the
"Guaranteed Obligations").   Each Guarantor understands,  agrees and  confirms
that the  Creditors may  enforce this Guaranty  up to the  full amount  of the
Guaranteed Obligations  against each Guarantor without  proceeding against any
other  Guarantor or  the Borrower,  against  any security  for the  Guaranteed
Obligations, or  under any  other guaranty  covering all or  a portion  of the
Guaranteed Obligations.   All payments  by each Guarantor under  this Guaranty
shall be  made on the  same basis as payments  by the Borrower  under Sections
4.03 and 4.04 of the Credit Agreement.

            2.  Additionally,   each   Guarantor,   jointly   and   severally,
unconditionally  and  irrevocably,  guarantees  the payment  of  any  and  all
Guaranteed Obligations  of the Borrower to the Creditors whether or not due or
payable by the Borrower upon the occurrence in respect of  the Borrower of any
of  the  events  specified  in  Section 9.05  of  the  Credit  Agreement,  and
unconditionally and irrevocably,  jointly and severally, promises  to pay such
Guaranteed Obligations to the Creditors, or order, on demand,  in lawful money
of the United  States.  This Guaranty shall constitute  a guaranty of payment,
and not of collection.

            3.  The  liability of  each Guarantor  hereunder is  exclusive and
independent of any security for  or other guaranty of the indebtedness  of the
Borrower whether  executed by such  Guarantor, any other Guarantor,  any other
guarantor or by any other party, and the liability of each Guarantor hereunder
shall not be affected  or impaired by (a) any  direction as to application  of
payment by the  Borrower or by any  other party, (b)  any other continuing  or
other guaranty, undertaking  or maximum  liability of  a guarantor  or of  any
other  party as to the indebtedness of the  Borrower, (c) any payment on or in
reduction  of any  such other  guaranty or  undertaking, (d)  any dissolution,
termination or  increase, decrease or change in personnel by the Borrower, (e)
any payment made to any Creditor on the indebtedness which any Creditor repays
the  Borrower pursuant  to  court  order  in any  bankruptcy,  reorganization,
arrangement, moratorium  or other debtor relief proceeding, and each Guarantor
waives any right to the deferral or modification of its  obligations hereunder
by reason of any such proceeding, (f) any action or inaction  by the Creditors
as contemplated in  Section 6 hereof, or  (g) any invalidity,  irregularity or
unenforceability  of all  or  part of  the Guaranteed  Obligations  or of  any
security therefor.

            4.  The obligations of each Guarantor hereunder are independent of
the obligations of any other  Guarantor, any other guarantor or  the Borrower,
and a  separate action or actions  may be brought and  prosecuted against each
Guarantor whether  or not action is  brought against any other  Guarantor, any
other guarantor  or the Borrower and  whether or not any  other Guarantor, any
other guarantor or the Borrower be joined in any  such action or actions.  Any
payment by  the Borrower  or other  circumstance  which operates  to toll  any
statute of limitations as to the Borrower shall operate to toll the statute of
limitations as to each Guarantor.

            5.  Each Guarantor  hereby waives  notice  of acceptance  of  this
Guaranty  and notice  of  any liability  to  which it  may  apply, and  waives
promptness, diligence,  presentment, demand  of  payment, protest,  notice  of
dishonor or nonpayment of any such liabilities, suit or taking of other action
by the Agent or any other Creditor against, and any other notice to, any party
liable  thereon  (including  such  Guarantor,   any  other  guarantor  or  the
Borrower).

            6.  Any Creditor may at any time and from time to time without the
consent of, or  notice to, any Guarantor, without  incurring responsibility to
such  Guarantor,  without  impairing  or releasing  the  obligations  of  such
Guarantor hereunder, upon or without  any terms or conditions and in  whole or
in part:

            (a)   change  the manner,  place or  terms of  payment of,  and/or
      change or  extend the  time of payment  of, renew or  alter, any  of the
      Guaranteed Obligations, any security therefor, or any liability incurred
      directly or indirectly in respect  thereof, and the guaranty herein made
      shall  apply  to the  Guaranteed  Obligations as  so  changed, extended,
      renewed or altered;

            (b)   take  and hold  security for the  payment of  the Guaranteed
      Obligations and  sell, exchange,  release,  surrender, realize  upon  or
      otherwise  deal with  in any  manner and  in any  order any  property by
      whomsoever  at any  time pledged  or mortgaged  to secure,  or howsoever
      securing, the  Guaranteed Obligations or any  liabilities (including any
      of those hereunder)  incurred directly or indirectly in  respect thereof
      or hereof, and/or any offset thereagainst;

            (c)   exercise or  refrain from exercising any  rights against the
      Borrower or others or otherwise act or refrain from acting;

            (d)   settle or compromise any of the Guaranteed Obligations,  any
      security therefor or  any liability (including  any of those  hereunder)
      incurred directly  or indirectly in  respect thereof or hereof,  and may
      subordinate the payment of all or any part thereof to the payment of any
      liability  (whether due  or not)  of  the Borrower  to creditors  of the
      Borrower;

            (e)   apply any  sums by whomsoever paid or  howsoever realized to
      any liability or liabilities of the Borrower to the Creditors regardless
      of what liabilities of the Borrower remain unpaid;

            (f)   release or substitute any one or more endorsers, guarantors,
      any Credit Party or other obligors;

            (g)   consent  to or waive any breach  of, or any act, omission or
      default under,  any of the Credit Documents or any of the instruments or
      agreements referred to therein, or otherwise amend, modify or supplement
      any of the  Credit Documents or any of such  other instruments or agree-
      ments; and/or

            (h)   act  or  fail to  act  in any  manner  referred  to in  this
      Guaranty which  may deprive such  Guarantor of its right  to subrogation
      against the  Borrower to  recover full indemnity  for any  payments made
      pursuant to this Guaranty.

            7.  No invalidity, irregularity or unenforceability of all or  any
part of the  Guaranteed Obligations or of any  security therefor shall affect,
impair or  be a defense to this Guaranty,  and this Guaranty shall be primary,
absolute and unconditional notwithstanding the  occurrence of any event or the
existence  of  any other  circumstances  which  might  constitute a  legal  or
equitable  discharge of a  surety or guarantor  except payment in  full of the
Guaranteed Obligations.

            8.  This Guaranty is a continuing one and all liabilities to which
it applies or may apply under the terms hereof shall  be conclusively presumed
to have been created  in reliance hereon.  No failure or delay  on the part of
any  Creditor in  exercising any  right,  power or  privilege hereunder  shall
operate  as a waiver thereof; nor shall  any single or partial exercise of any
right, power  or privilege  hereunder preclude any  other or  further exercise
thereof  or the exercise of  any other right, power or  privilege.  The rights
and remedies  herein expressly specified  are cumulative and not  exclusive of
any rights or remedies which any Creditor would otherwise have.   No notice to
or  demand on any Guarantor  in any case  shall entitle such  Guarantor to any
other further notice or demand in similar or other circumstances or constitute
a waiver of the  rights of any Creditor to any other or  further action in any
circumstances without  notice or demand.  It is not necessary for any Creditor
to inquire  into  the  capacity  or powers  of  the  Borrower or  any  of  its
Subsidiaries  or  the  officers,  directors,  partners  or  agents  acting  or
purporting  to act  on its  behalf, and  any indebtedness  made or  created in
reliance  upon the  professed  exercise  of such  powers  shall be  guaranteed
hereunder.

            9.  Any indebtedness of the Borrower  now or hereafter held by any
Guarantor is  hereby subordinated to the  indebtedness of the Borrower  to the
Creditors;  and such indebtedness  of the  Borrower to  any Guarantor,  if the
Agent,  after  an  Event  of  Default  has  occurred,  so  requests, shall  be
collected,  enforced  and  received  by  such Guarantor  as  trustee  for  the
Creditors and be paid over to the Creditors on account of the indebtedness  of
the  Borrower to  the Creditors,  but without  affecting or  impairing in  any
manner the liability  of such  Guarantor under  the other  provisions of  this
Guaranty.   Prior to the transfer  by any Guarantor of any  note or negotiable
instrument evidencing any indebtedness of the Borrower to such Guarantor, such
Guarantor shall mark such note or negotiable instrument with a legend that the
same is subject to this subordination.  Without limiting the generality of the
foregoing, each  Guarantor hereby agrees with  the Creditors that it  will not
exercise any right of subrogation which it may at any time otherwise have as a
result  of  this Guaranty  (whether  contractual,  under  Section 509  of  the
Bankruptcy  Code  or otherwise)  until  all Guaranteed  Obligations  have been
irrevocably paid in full in cash.

            10.  (a)  Each Guarantor  waives any  right  (except as  shall  be
required by applicable  law and cannot be waived) to  require the Creditors to
(A) proceed against the Borrower, any other Guarantor, any other guarantor  or
any other party,  (B) proceed against  or exhaust any  security held from  the
Borrower, any other  Guarantor, any other guarantor or any  other party or (C)
pursue any  other remedy in the  Creditors' power whatsoever.   Each Guarantor
waives any defense based on or arising out of any defense of the Borrower, any
other Guarantor, any other guarantor or  any other party other than payment in
full of the  Guaranteed Obligations, including without limitation  any defense
based  on or  arising  out  of  the  disability of  the  Borrower,  any  other
Guarantor, any other guarantor or any  other party, or the unenforceability of
the  Guaranteed  Obligations  or any  part  thereof  from  any  cause, or  the
cessation  from any cause of the liability  of the Borrower other than payment
in full of the Guaranteed Obligations.   The Creditors may, at their election,
foreclose on any security held by  the Agent or the other Creditors by  one or
more judicial  or nonjudicial sales, whether  or not every aspect  of any such
sale  is commercially  reasonable (to  the extent  such  sale is  permitted by
applicable law),  or exercise any other right or remedy the Creditors may have
against the Borrower or any other party, or any security, without affecting or
impairing in  any way the liability  of any Guarantor hereunder  except to the
extent  the Guaranteed  Obligations have been  paid in  full.   Each Guarantor
waives any defense  arising out of  any such election  by the Creditors,  even
though  such  election   operates  to  impair  or  extinguish   any  right  of
reimbursement  or subrogation  or  other  right or  remedy  of such  Guarantor
against the Borrower or any other party or any security.

            (b)  Each  Guarantor   waives   all  presentments,   demands   for
performance,  protests and  notices, including  without limitation  notices of
nonperformance, notices of protest, notices of dishonor, notices of acceptance
of this Guaranty, and notices  of the existence, creation or incurring  of new
or additional  indebtedness.   Each Guarantor  assumes all responsibility  for
being and  keeping itself informed  of the Borrower's financial  condition and
assets, and  of all other circumstances bearing upon the risk of nonpayment of
the Guaranteed Obligations and the nature, scope and extent of the risks which
such Guarantor  assumes and  incurs hereunder, and  agrees that  the Creditors
shall  have  no duty  to advise  any Guarantor  of  information known  to them
regarding such circumstances or risks.

            11.  The Creditors agree  that this Guaranty may be  enforced only
by the action of  the Agent or the Collateral Agent, in  each case acting upon
the instructions  of the Required  Banks and that  no Creditor shall  have any
right individually  to seek to enforce  or to enforce this  Guaranty, it being
understood and  agreed that such rights  and remedies may be  exercised by the
Agent or the Collateral Agent for the benefit  of the Creditors upon the terms
of this Guaranty.   The Creditors further agree that this  Guaranty may not be
enforced  against  any  director,  officer,  employee or  stockholder  of  any
Guarantor  (except  to  the  extent  such  stockholder  is  also  a  Guarantor
hereunder).

            12.  Each Guarantor  covenants and  agrees that  on and  after the
date hereof  and until the  termination of  the Total Commitment  and when  no
Letter of  Credit or Note  remains outstanding and all  Guaranteed Obligations
have  been paid  in full,  such  Guarantor shall  take, or  will refrain  from
taking, as the case may be, all actions that are necessary to be  taken or not
taken so that no  violation of any provision, covenant  or agreement contained
in Section 7 or 8 of the Credit Agreement, and so that no Event of Default, is
caused by the actions of such Guarantor or any of its Subsidiaries.

            13.  The Guarantors hereby jointly and  severally agree to pay all
reasonable out-of-pocket  costs and  expenses (x), after  an Event  of Default
shall have occurred and be continuing, of each Creditor in connection with the
enforcement  of this  Guaranty and  the protection  of such  Creditor's rights
hereunder   (including,   without   limitation,   the  reasonable   fees   and
disbursements of counsel  (including in-house counsel) employed by  any of the
Creditors) and  (y) of the Agent  in connection with any  amendment, waiver or
consent relating hereto  (including, without limitation,  the reasonable  fees
and  disbursements of  counsel (including  in-house counsel)  employed  by the
Agent.

            14.  This Guaranty shall  be binding upon  each Guarantor and  its
successors and  assigns and shall  inure to the  benefit of the  Creditors and
their successors and assigns.

            15.  Neither  this  Guaranty  nor  any  provision  hereof  may  be
changed, waived, discharged  or terminated except with the  written consent of
the Required Banks (or to  the extent required by Section 12.12  of the Credit
Agreement, with the written consent of  each Bank) and each Guarantor affected
thereby  (it being understood  that the addition  or release  of any Guarantor
hereunder  shall not  constitute a  change,  waiver, discharge  or termination
affecting any Guarantor other than the Guarantor so added or released).

            16.  Each Guarantor  acknowledges that an executed  (or conformed)
copy of each of  the Credit Documents has been made available to its principal
executive officers and such officers are familiar with the contents thereof.

            17.  In  addition  to any  rights now  or hereafter  granted under
applicable law  (including, without  limitation, Section 151  of the  New York
Debtor and Creditor Law) and not by way of limitation of any such rights, upon
the occurrence and during the continuance of an Event of Default (such term to
mean and  include any "Event  of Default" as  defined in the  Credit Agreement
continuing  after  any  applicable  grace  period),  each Creditor  is  hereby
authorized at any time or from time  to time, without notice to any  Guarantor
or to any other Person, any such notice being expressly waived, to set off and
to  appropriate and apply  any and all  deposits (general or  special) and any
other indebtedness at any time  held or owing by  such Creditor to or for  the
credit  or the  account  of such  Guarantor,  against and  on  account of  the
obligations  and liabilities  of such  Guarantor to  such Creditor  under this
Guaranty, irrespective of  whether or  not such Creditor  shall have made  any
demand  hereunder  and although  said  obligations,  liabilities, deposits  or
claims, or any of them, shall be contingent or unmatured.

            18.  All  notices,  requests,   demands  or  other  communications
pursuant hereto shall be deemed to have been duly given or made when delivered
to the Person to which such notice, request, demand or  other communication is
required or  permitted to be given  or made under this  Guaranty, addressed to
such  party at  (i) in the  case of  any Creditor,  as provided in  the Credit
Agreement and  (ii) in  the case of  any Guarantor, at  its address  set forth
opposite its  signature below; or in any case at  such other address as any of
the Persons listed above may hereafter notify the others in writing.

            19.  If  claim is  ever made  upon any  Creditor for  repayment or
recovery of any amount or amounts received  in payment or on account of any of
the Guaranteed Obligations and any of the aforesaid payees repays  all or part
of said amount by reason of (a) any  judgment, decree or order of any court or
administrative body having jurisdiction over such payee or any of its property
or (b) any  settlement or compromise of any such claim  effected by such payee
with any such  claimant (including the Borrower), then and  in such event each
Guarantor  agrees  that  any  such  judgment,  decree,  order,  settlement  or
compromise shall  be binding upon such Guarantor,  notwithstanding any revoca-
tion  hereof  or  of any  other  instrument  evidencing any  liability  of the
Borrower,  and such  Guarantor shall  be and  remain liable  to the  aforesaid
payees  hereunder for the amount so repaid  or recovered to the same extent as
if such amount had never originally been received by any such payee.

            20.  (a)  THIS GUARANTY  AND THE  RIGHTS  AND OBLIGATIONS  OF  THE
CREDITORS AND OF THE UNDERSIGNED HEREUNDER  SHALL BE GOVERNED BY AND CONSTRUED
IN  ACCORDANCE WITH THE  LAW OF THE  STATE OF NEW  YORK.  Any  legal action or
proceeding  with respect to this Guaranty or  any other Credit Document may be
brought in  the courts of  the State of  New York or  of the United  States of
America for  the Southern District of New York, and, by execution and delivery
of  this Guaranty, each Guarantor hereby accepts  for itself and in respect of
its property, generally and unconditionally, the jurisdiction of the aforesaid
courts and hereby irrevocably  waives any right it  may have to object  to the
laying of venue  of any such action or proceeding in  the aforesaid courts and
hereby further  irrevocably waives and agrees  not to plead or  claim that any
such  action or proceeding  has been brought  in an inconvenient  forum.  Each
Guarantor hereby  irrevocably designates, appoints and  empowers the Borrower,
with offices on the date hereof at 901 Threadneedle, Suite 200, Houston, Texas
77079 as its designee, appointee and  agent to receive, accept and acknowledge
for any on  its behalf, and in respect of its property, service or any and all
legal process, summons, notices and documents  which may be served in any such
action or  proceeding.  If for  any reason such designee,  appointee and agent
shall cease to be available to act as such, each Guarantor agrees to designate
a new designee, appointee and agent in New  York City on the terms and for the
purposes of  this provision satisfactory to the Agent for the Banks under this
Guaranty.   Each  Guarantor further  irrevocably  consents to  the service  of
process  out  of any  of  the  aforementioned courts  in  any  such action  or
proceeding by the mailing  of copies thereof by registered  or certified mail,
postage prepaid,  to each  Guarantor at  its address  set  forth opposite  its
signature  below.   Nothing  herein  shall  affect the  right  of  any of  the
Creditors to serve process in any other manner permitted by law or to commence
legal proceedings  or otherwise  proceed against each  Guarantor in  any other
jurisdiction.

            (b)  Each Guarantor hereby irrevocably  waives any objection which
it may now  or hereafter have to the  laying of venue of any  of the aforesaid
actions or proceedings arising out  of or in connection with this  Guaranty or
any  other credit  document brought in  the courts  referred to  in clause (a)
above and hereby  further irrevocably waives and agrees not  to plead or claim
in any such court that such action or proceeding brought in any such court has
been brought in an inconvenient forum.

            21.  In  the event that  all of the  capital stock of  one or more
Guarantors is sold  or otherwise disposed of or  liquidated in compliance with
the requirements  of Section  8.02 of  the Credit Agreement  (or such  sale or
other disposition has been approved  in writing by the Required Banks  (or all
Banks if required by Section 12.12 of the Credit Agreement))  and the proceeds
of  such sale, disposition  or liquidation are applied  in accordance with the
provisions of the  Credit Agreement, to the extent  applicable, such Guarantor
shall be released from this Guaranty and this Guaranty shall, as  to each such
Guarantor or Guarantors,  terminate, and have no  further force or  effect (it
being understood and agreed that the sale of any Person that owns, directly or
indirectly, the capital stock of any Guarantor shall be deemed to be a sale of
such Guarantor for the purposes of this Section 21).

            22.  At  any time  a payment  in respect  of the  Guaranteed Obli-
gations is  made under this  Guaranty, the right  of contribution, if  any, of
each Guarantor  against any other  Guarantor required  to make any  payment to
such  Guarantor  pursuant  to  this  Section  22  (a "Contributor")  shall  be
determined as provided  in the immediately following sentence,  with the right
of contribution of each  Guarantor to be revised and restated as  of each date
on  which  a  payment  (a  "Relevant  Payment")  is  made  on  the  Guaranteed
Obligations under this Guaranty.  At any time that a Relevant  Payment is made
by a Guarantor that results  in the aggregate payments made by  such Guarantor
in  respect of  the Guaranteed Obligations  to and  including the  date of the
Relevant  Payment  exceeding  such  Guarantor's  Contribution  Percentage  (as
hereinafter  defined) of  the aggregate  payments  made by  all Guarantors  in
respect  of  the  Guaranteed Obligations  to  and including  the  date  of the
Relevant  Payment (such  excess,  the "Aggregate  Excess  Amount"), each  such
Guarantor shall have a  right of contribution against each Contributor who has
made payments  in respect of the  Guaranteed Obligations to and  including the
date  of  the  Relevant  Payment  in  an  aggregate   amount  less  than  such
Contributor's  Contribution Percentage of  the aggregate payments  made to and
including the date of the Relevant Payment by all Guarantors in respect of the
Guaranteed Obligations (the  aggregate amount of such  deficit, the "Aggregate
Deficit Amount")  in an amount equal to (x) a  fraction the numerator of which
is the Aggregate Excess Amount of such Guarantor and the  denominator of which
is  the Aggregate  Excess  Amount of  all  Guarantors  multiplied by  (y)  the
Aggregate  Deficit  Amount  of  such  Contributor.   A  Guarantor's  right  of
contribution, if any, pursuant to  the preceding sentences shall arise  at the
time of each computation, subject to  adjustment to the time of any subsequent
computation; provided, that  no Guarantor may take any action  to enforce such
right until the Guaranteed Obligations have been paid in full,  all Letters of
Credit have terminated and the Total Commitment has been terminated,  it being
expressly recognized  and agreed  by all parties  hereto that  any Guarantor's
right  of  contribution  arising  pursuant  to this  Section  22  against  any
Contributor shall  be expressly junior  and subordinate to  such Contributor's
obligations and liabilities  in respect of the Guaranteed  Obligations and any
other  obligations owing under this Guaranty.   As used in this Agreement, (i)
each  Contributor's  "Contribution  Percentage"   shall  mean  the  percentage
obtained by dividing (x) the Adjusted Net Worth of such Contributor by (y) the
aggregate Adjusted Net Worth  of all Guarantors; (ii) the "Adjusted Net Worth"
of  each Guarantor  shall  mean the  greater  of  (x) the  Net  Worth of  such
Guarantor or (y) zero; and (iii) the "Net Worth" of each  Guarantor shall mean
the amount by which the fair  salable value of such Guarantor's assets on  the
Initial  Borrowing  Date  exceeds its  existing  debts  and  other liabilities
(including contingent liabilities, but without giving effect to any Guaranteed
Obligations arising under this Guaranty), in  each case after giving effect to
all transactions occurring on the Initial Borrowing Date.

            23.  Each  Guarantor recognizes  and agrees  that, except  for any
right of  contribution arising  pursuant to Section  22, until  the Guaranteed
Obligations have  been paid in full,  each Guarantor who makes  any payment in
respect of the  Guaranteed Obligations shall have no right  of contribution or
subrogation against any other Guarantor  in respect of such payment, any  such
right  of contribution  or subrogation  arising under  law or  otherwise being
expressly waived by all Guarantors  until the Guaranteed Obligations have been
paid in full.

            24.  Each Guarantor recognizes and acknowledges that the rights to
contribution arising hereunder shall constitute an asset in favor of the party
entitled  to such contribution.   In this  connection, each Guarantor  has the
right  to waive  its contribution  right against  any  other Guarantor  to the
extent that after  giving effect  to such waiver  such Guarantor would  remain
solvent, in the determination of the Required Banks.

            25.  This  Guaranty may be executed in  any number of counterparts
and  by the different parties  hereto on separate  counterparts, each of which
when so executed  and delivered shall be  an original, but all  of which shall
together  constitute one  and  the same  instrument.   A  set of  counterparts
executed by all the parties hereto shall be lodged with the Guarantors and the
Agent.

            26.  EACH GUARANTOR  HEREBY IRREVOCABLY  WAIVES  ALL RIGHTS  TO  A
TRIAL BY  JURY IN  ANY ACTION,  PROCEEDING OR COUNTERCLAIM  ARISING OUT  OF OR
RELATING  TO THIS  GUARANTY, THE  OTHER CREDIT  DOCUMENTS OR  THE TRANSACTIONS
CONTEMPLATED HEREBY OR THEREBY.

            27.  It  is  understood and  agreed  that  any  Subsidiary of  the
Borrower that is required  to execute a counterpart of  this Guaranty pursuant
to the  Credit Agreement shall  automatically become a Guarantor  hereunder by
executing a counterpart hereof and delivering the same to the Agent.

            28.  All  payments made  by any  Guarantor hereunder will  be made
without setoff, counterclaim or other defense.


            IN WITNESS WHEREOF, each Guarantor  has caused this Guaranty to be
executed and delivered as of the date first above written.


Address for each Guarantor

c/o Reading & Bates Drilling Co.    READING & BATES DEVELOPMENT CO.
901 Threadneedle
Suite 200
Houston, Texas  77079               By_______________________________
Attention:  General Counsel                 Title:
Tel: (713) 496-5000
Fax: (713) 496-0285


Accepted and Agreed to:

CHRISTIANIA BANK OG KREDITKASSE,
  NEW YORK BRANCH, 
  as Agent

By____________________________
                  Title:

By____________________________
  Title: