EXHIBIT 10.103

                            FIRST PREFERRED MORTGAGE


                            Dated November 28, 1995


                          READING & BATES DRILLING CO.

                                - in favor of -

                     WILMINGTON TRUST COMPANY, not in its 
              individual capacity but solely as Indenture Trustee


                                   JACK BATES 
----------------------------------------------------------------------------

                                     INDEX

  CLAUSE     SUBJECT MATTER                                 PAGE

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

             ACKNOWLEDGEMENT OF MORTGAGE
             EXHIBIT 1 FORM OF CREDIT AGREEMENT (FILED AS EXHIBIT 10.101 TO
                THE COMPANY'S ANNUAL REPORT ON FORM 10-K FOR 1995)


-----------------------------------------------------------------------------

  THIS FIRST PREFERRED MORTGAGE (this "Mortgage") is made on the 28th day  of
  November, 1995

  BY

  (1)     READING  & BATES DRILLING  CO., an Oklahoma  corporation having its
          principal offices  at 901  Threadneedle, Suite 200,  Houston, Texas
          77079 (the "Owner"), 

  IN FAVOR OF

  (2)     WILMINGTON TRUST  COMPANY, a  Delaware banking  corporation  having
          offices  at   Rodney  Square  North,  1100   North  Market  Street,
          Wilmington, Delaware 19890-0001, not in its individual capacity but
          solely  as  indenture  trustee  for  the  Lenders  (as  hereinafter
          defined) and as mortgagee (the "Indenture Trustee")

  WHEREAS

  (A)     The Owner  is the sole owner  of the whole  of the semi-submersible
          drilling unit JACK BATES documented under  the laws and flag of the
          United States of  America with  Official Number  D906283 of  19,928
          gross registered tons and 14,948 net registered tons.

  (B)     By  a Credit Facility Agreement dated  as of November 16, 1995 (the
          "Credit Agreement") and made by and among (i) the Owner and Reading
          &   Bates   Exploration  Co.,   an   Oklahoma   corporation   ("R&B
          Exploration"),  as joint and  several borrowers  (collectively, the
          "Borrowers"),  (ii)   Reading  &  Bates   Corporation,  a  Delaware
          corporation,  as guarantor (hereinafter called  the "Guarantor" and
          together with  the Borrowers  collectively called  the "Companies",
          and  individually  called  a  "Company"),  (iii)  the  Lenders  (as
          hereinafter defined),  acting as lenders and  (iv) Christiania Bank
          og  Kreditkasse, acting through  its New York branch,  as agent for
          the  Lenders (the  "Agent")  (the form  of  which  Credit Agreement
          together  with   Exhibit  A  thereto  but   without  the  remaining
          attachments is attached  hereto as Exhibit 1), it was  agreed among
          other things that the Lenders would make available to the Borrowers
          upon  the terms  and conditions  therein described  (i)  a reducing
          revolving  credit  facility in  the  original  principal amount  of
          Forty-Five  Million  United  States  Dollars  (US$45,000,000)  (the
          "Revolving  Credit Facility") and  (ii) a standby  letter of credit
          facility  in an aggregate  amount not to exceed  Ten Million United
          States  Dollars  (US$10,000,000)(the   "Standby  Letter  of  Credit
          Facility").

  (C)     Pursuant to  the said Credit  Agreement the Lenders  have made  the
          Revolving Credit Facility available to the Borrowers upon the terms
          and conditions described  in the Credit  Agreement in the  original
          principal amount  of US$45,000,000.  The  Revolving Credit Facility
          and  interest, fees  and  commissions thereon  is  to be  paid  and
          repaid, as the  case may be,  as provided in the  Credit Agreement.
          The Revolving Credit Facility  is evidenced by a secured promissory
          note (the  "Note") (the form of  which is attached as  Exhibit A to
          the Credit Agreement). 

  (D)     Pursuant to  the said Credit  Agreement the Lenders  have made  the
          Standby  Letter of Credit Facility available to the Borrowers in an
          aggregate  amount not to  exceed US$10,000,000.   The Borrowers are
          obligated, jointly  and severally,  to reimburse all  amounts drawn
          under  the  Standby Letters  of  Credit (as  defined in  the Credit
          Agreement)  issued by the Lenders pursuant to the Standby Letter of
          Credit  Facility, and  to  pay all  interest  and fees  thereon  as
          provided in the Credit Agreement.

  (E)     The Owner, in  order to secure  the repayment of  the Advances  (as
          defined  in the Credit Agreement), the  Unpaid Drawings (as defined
          in the Credit Agreement), interest thereon and fees and commissions
          payable  under  the Credit  Agreement,  the  Note and  the Security
          Documents  (as   hereinafter  defined)  and   the  performance  and
          observance of and  compliance with all of the covenants,  terms and
          conditions  contained in  this  Mortgage, has  duly  authorized the
          execution and delivery of  this First Preferred Mortgage under  and
          pursuant  to the United States Ship Mortgage Act, 1920, as amended,
          recodified at 46 U.S.C.  31301, et. seq. (the "Ship Mortgage Act"),
          which is entered into by the Owner in consideration of  the Lenders
          agreeing, at the request of the Owner, to make the Revolving Credit
          Facility and the Standby Letter of Credit Facility available to the
          Borrowers  under  the terms  of  the  Credit  Agreement  and  as  a
          condition  thereto and  for other  good and  valuable consideration
          provided  by the Lenders (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:-

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

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

          "Assignment of  Insurances" means  the Assignment of  Insurances in
          respect of the Rig executed or to be executed by the Owner in favor
          of the Agent;

          "Credit Agreement"  means the  agreement dated  as of  November 16,
          1995 and made  among the Borrowers, the Guarantor, the  Lenders and
          the Agent first referred to in Recital (B) hereto;

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

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

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

          "Environmental Claim"  means (i) any  claim by, or  directive from,
          any applicable governmental, judicial or other regulatory authority
          alleging breach of, or  non-compliance with, any Environmental Laws
          or Environmental  Approvals or  otherwise howsoever relating  to or
          arising out  of an Environmental Incident or (ii)  any claim by any
          other  third party  howsoever  relating to  or  arising out  of  an
          Environmental Incident (and, in each such case,  "claim" shall mean
          for  damages,   cleanup  costs,  compliance,   remedial  action  or
          otherwise);

          "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   Laws"  means  all  applicable  laws,  regulations,
          conventions and  agreements  whatsoever relating  to  pollution  or
          protection of  the environment (including,  without limitation, the
          Oil   Pollution  Act  of  1990  (33  U.S.C.   2701  et  seq.),  the
          Comprehensive Environmental Response,  Compensation, and  Liability
          Act  of 1980  (42  U.S.C. Sections  9601  et seq.),  the  Hazardous
          Materials Transportation Act (49 U.S.C. Sections 1801 et seq.), the
          Resource Conservation and Recovery Act of 1976  (42 U.S.C. Sections
          6901 et seq.), the Clean Air Act (42 U.S.C. Sections 7401 et seq.),
          the Federal Water Pollution Control Act (33 U.S.C. Sections 1251 et
          seq.)  and the Toxic Substances Control Act (15 U.S.C. Section 2601
          et seq.) (all of the foregoing as amended), and any comparable laws
          of the individual  States of the  United States of  America or  any
          other state or nation);

          "Environmentally Sensitive Material" shall  include, but shall  not
          be limited to, any petroleum or petroleum  products, natural gases,
          explosives, radioactive materials,  hazardous materials,  hazardous
          wastes,  hazardous  or   toxic  substances  or  related  materials,
          asbestos  or any  material  containing asbestos  or  any substances
          which are  hazardous by virtue of  the manner of their  use, or any 
          activity involving any  of the foregoing or any other  substance or
          material  or activity defined as hazardous in words or substance by
          any present  or future Federal,  state or local  environmental law,
          ordinance,  rule,  regulation  or  rule  of common  law  including,
          without limitation, the Environmental Laws;

          "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 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 the Credit Agreement;

          "Lender"  means any  Lender  listed in  Schedule  1 to  the  Credit
          Agreement as  the same may be amended from time to time and each of
          their successors and assigns (collectively, the "Lenders");

          "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 the  promissory  note of  the  Owner referred  to  in
          Recital (C) hereto;

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

          "Other Rig" means  the jack-up drilling unit D.R. STEWART  owned by
          R&B  Exploration documented under  the laws and flag  of the United
          States with Official Number D626904  of 6494 gross registered  tons
          and 5834 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 Agent's
          request,  provide a  bond or  other  security satisfactory  to  the
          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  Agent's  request,  provide  a  bond  or  other  security
          satisfactory  to  the 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 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 Agent have  been
          made as evidenced by the Agent's  written consent to such lien; (8)
          any lien in favor of the Lenders; and provided that Permitted Liens
          shall not include any liens described in subclauses (1) through (8)
          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
          priority preferred lien 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 Indebtedness" means the aggregate of (a) the Advances, the
          Unpaid  Drawings and  interest, fees  and commissions  thereon (and
          interest  on any unpaid  interest thereon and on  any other sums of
          money  on which interest  is stated in  the Credit Agreement  to be
          payable),  (b)  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  Indenture Trustee (or in  respect of which the  Owner
          agrees in this Mortgage to indemnify the Indenture Trustee) whether
          actually  or contingently, presently or in the future together with
          interest thereon  as provided in  this Mortgage and  (c) all  other
          sums of money from time to time owing to  the Agent and the Lenders
          under the Credit  Agreement, the Security Documents or any  of them
          whether actually or contingently, presently or in the future;

          "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;

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

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

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

          "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 Indenture 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 save as constituted by 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 Secured  Indebtedness 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  relative  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 throughout
                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)   all applicable Environmental Laws and 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 Advance
          and at the time  of the issuance of each Standby  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 payment  of the Secured Indebtedness and  to
          secure the  performance and observance  of and compliance  with the
          covenants, terms  and conditions  contained in  this Mortgage,  the
          Credit Agreement, the  Note and the  Security Documents, the  Owner
          has granted,  conveyed and  mortgaged  and does  by these  presents
          grant,  convey  and  mortgage  unto   the  Indenture  Trustee,  its
          successors and assigns,  the whole of the  Rig TO HAVE AND  TO HOLD
          the same  unto the Indenture  Trustee, its  successors and  assigns
          forever upon  the terms herein set forth for the enforcement of the
          payment  of the Secured Indebtedness  and to secure the performance
          and observance  of, and compliance  with, the covenants,  terms and
          conditions contained in  this Mortgage,  the Credit Agreement,  the
          Note and the Security Documents.

          Provided  only and the condition of  these presents is such that if
          the Owner or  its successors and assigns  shall pay or cause  to be 
          repaid in  full to  the Indenture  Trustee, the  Lenders and  their
          respective successors or  assigns the  Secured Indebtedness as  and
          when the same  shall become due and payable  in accordance with the
          terms of the Credit Agreement, the Note, the Security Documents and
          this Mortgage  and  shall observe  and comply  with the  covenants,
          terms and conditions contained  in the Credit Agreement, the  Note,
          the Security Documents 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 Indenture Trustee agrees by accepting this Mortgage
          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  neither the  Indenture
          Trustee, nor the Agent, nor any  of the Lenders 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 Indenture Trustee,  the Agent
          and the Lenders:-

          (a)   to pay and indemnify the Indenture Trustee, the Agent and the
                Lenders 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 Indenture  Trustee, the Agent  or the
                Lenders (or  in respect  of which  the Owner  agrees in  this
                Mortgage to indemnify the Indenture Trustee, the Agent or the
                Lenders)  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
                the Indenture  Trustee, the Agent or the Lenders, as the case
                may  be, for  payment by the  Owner of the  relevant expense,
                claim, liability,  loss, cost,  duty,  fee, charge  or  other
                money incurred by  the Indenture  Trustee, the  Agent or  the 
                Lenders 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 the  Indenture Trustee, the Agent or the  Lenders
                as  the  case  may  be,  under this  Mortgage  and  the other
                Security Documents to which the Owner is or is to  be a party
                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
                Indenture Trustee as a continuing security for the payment of
                the Secured  Indebtedness and  that the  security so  created
                shall  not  be  satisfied  by  any  intermediate  payment  or
                satisfaction of any part of the Secured Indebtedness;

          (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 Indenture Trustee shall not have to wait for the Agent or
                the Lenders  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 Indenture  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  Indenture  Trustee  may   deem
                expedient; and

          (e)   any waiver  by the  Indenture Trustee  of any  terms of  this
                Mortgage or any consent given by the Indenture  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
          Indenture Trustee  and  the  Owner  shall be  conditional  upon  no
          security  or payment  to the Indenture  Trustee, the Agent,  or the
          Lenders or  any of them by the Companies  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 Indenture  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  Indenture Trustee  and the  Lenders 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  Companies, the
          Indenture Trustee, the Lenders or any other person:-

          (a)   any time  or waiver  granted to  the Companies  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  Companies  or any  other
                persons; or

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

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

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

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

  5.04    Until  the  Secured  Indebtedness   has  been  unconditionally  and
          irrevocably paid  and discharged in full to the satisfaction of the
          Indenture  Trustee, the  Owner shall not  by virtue of  any payment
          made hereunder  on account of the Secured Indebtedness or by virtue
          of any enforcement by the Indenture Trustee of its rights under, or
          the security  constituted by,  this Mortgage  or by  virtue of  any
          relationship between, or  transaction involving, the Owner  and the
          Guarantor   (whether   such  relationship   or  transaction   shall
          constitute the  Owner a creditor  of the Guarantor, a  guarantor of
          the obligations  of  the Guarantor  or  a party  subrogated to  the
          rights of others  against the Guarantor or  otherwise howsoever and
          whether  or not such  relationship or transaction  shall be related
          to, or in connection with, the subject matter of this Mortgage):- 

          (a)   exercise any rights of subrogation in relation to any rights,
                security  or moneys  held or  received  or receivable  by the
                Indenture Trustee or the Lenders or any other person; or

          (b)   be entitled to  exercise any right  of contribution from  any
                co-surety liable in  respect of  such moneys and  liabilities
                under any other guarantee, security or agreement; or

          (c)   exercise any  right of  set-off or  counterclaim against  the
                Guarantor or any such co-surety; or

          (d)   receive,  claim  or   have  the   benefit  of  any   payment,
                distribution, security or indemnity from the Guarantor or any
                such co-surety; or

          (e)   unless so directed  by the Indenture Trustee  (when the Owner
                will prove in  accordance with such  directions), claim as  a
                creditor  of  the   Guarantor  or   any  such  co-surety   in
                competition with the Indenture Trustee.

          The  Owner  shall  hold  in  trust for  the  Indenture  Trustee and
          forthwith pay or transfer (as appropriate) to the Indenture Trustee
          any such payment (including  an amount equal to any such  set-off),
          distribution  or benefit  of such  security, indemnity or  claim in
          fact received by it.

  5.05    The  Owner unconditionally and irrevocably agrees  that if any sums
          hereby secured  are not  recoverable on  the basis  of a  guarantee
          (whether by reason  of legal limitation, illegality,  disability or
          incapacity on  or of the Guarantor or the Owner or any other person
          or by reason of any other fact or circumstance, and  whether or not
          known to or discoverable by the Owner, the Guarantor, the Indenture
          Trustee or  any other person), then  the Owner will, as  a separate
          and independent  stipulation and as  a primary obligor, pay  to the
          Indenture Trustee  on  demand an  amount  or amounts  equal to  the
          amount or amounts which the Owner would have been liable to pay but
          for  such  irrecoverability  and  will   on  demand  indemnify  the
          Indenture  Trustee  against  any  loss  or  liability  suffered  or
          incurred by the Indenture Trustee and the Lenders or any of them as
          a result of such irrecoverability.

  6.      INSURANCE

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

          (a)   The Owner shall, at its own  expense, when and so long as the
                Secured Indebtedness shall be 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  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 Rig  such aggregate  amount
                shall be at least 110% of the aggregate amount  of the Credit
                Facility.  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 Norwegian,
                American and British insurance markets or in such other major
                international markets  reasonably acceptable  to  the  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 Agent.
                In addition,  the Owner shall, at its own expense, furnish to
                the  Agent  a mortgagee's  single  interest  policy providing
                coverage which, when aggregated with the mortgagee's interest
                insurance furnished to the  Agent by the Owner in respect  of
                the Other  Rig, shall be in an amount  equal to at least 110%
                of the aggregate amount of the Credit Facility (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
                Agent).    Such   mortgagee's  interest  insurance  and   any
                additional insurance policies  for the  benefit of the  Agent
                shall  be maintained  in the broadest  form available  in the
                American,  British  and Scandinavian  markets or  other major
                international  markets   acceptable  to  the   Agent  through
                underwriters acceptable  to the  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 Agent.

          (b)   The  policy  or  policies  of insurance  shall  be  issued by
                responsible underwriters reasonably  acceptable to the Agent,
                shall contain  conditions, terms,  stipulations and  insuring 
                covenants satisfactory  to the  Agent, and shall  be kept  in
                full force and  effect by the  Owner so long as  the Security
                Documents and the Secured  Indebtedness shall be 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  Agent for  distribution  by it  to
                itself, the  Lenders and  the Owner  as their  interests  may
                appear, and shall provide for at least ten days' prior notice
                to be given to  the 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  Agent
                and the Indenture  Trustee shall be  named as co-assureds  on
                all  such  policies  and  insurance  contracts,  but  without
                liability of the Agent  or the Indenture Trustee for premiums
                or calls.  Certified copies of all such policies, binders and
                other interim insurance contracts shall be deposited with the
                Agent.   Originals shall also be provided upon the request of
                the Agent.   The Owner shall furnish to  the Agent annually a
                detailed report signed by  a firm of marine insurance brokers
                satisfactory to the 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 Agent  by  notice to  the
                underwriters, although the following insurance is  payable to
                the 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 direct 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 Agent (which consent shall not
                be  unreasonably  withheld).    Any   loss  covered  by  this
                paragraph  which is  paid to the  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 Agent  to, or  as directed by,  the Owner  and all  other
                payments  to the  Agent of  losses covered by  this paragraph
                shall  be applied  by  the 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 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 Agent.

          (c)   In the event  of an actual or constructive  total loss of the
                Rig, the  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 Indenture Trustee, the  Agent and
                the Lenders 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 in Clause 10 provided.

          (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 Agent
                advised of  the progress of  such renewals, and  procure that
                the insurers shall promptly confirm  in writing to the  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 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 Indenture 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 Indenture
                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) 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
                Indenture  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 Indenture 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 Indenture Trustee copies of  all survey reports
                issued in respect thereof;

          (g)   permit  the  representatives  of  the  Agent  or  independent
                surveyors representing the Indenture 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  Agent may
                require;

          (j)   promptly   furnish  to   the   Indenture  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 Indenture  Trustee's
                request  in  writing,  copies  of   all  charters  and  other
                contracts   for  her   employment   or   otherwise  howsoever
                concerning her;

          (k)   notify both the Indenture Trustee and  the 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  Indenture 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 Indenture Trustee;

          (l)   keep proper books of account in respect of the Rig and as and
                when the  Indenture Trustee  or the  Agent may  so reasonably
                require make such books available for inspection on behalf of
                the Indenture 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)   (i) observe the obligations  contained in  Clause 12  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; and

                (ii)   not  without  the  previous  written  consent of  the
                       Indenture  Trustee  de-activate or  lay  up  the  Rig
                       (other than for normal  periods of inactivity between
                       contracts for the  Rig during  which periods  the Rig
                       remains manned);

          (n)   not without the previous consent  in writing of the Indenture
                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
                Indenture 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 Indenture Trustee from
                time to  time such proof as the Indenture 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  Indenture 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
                WILMINGTON TRUST COMPANY  not in its individual  capacity but
                solely as  Indenture Trustee for  the Lenders 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 Indenture 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
                       Indenture Trustee advised, in writing on such regular
                       basis and  in such  detail as  the Indenture  Trustee
                       shall  require,  of  the  Owner's  response  to  such
                       Environmental Claim or Environmental Incident;

          (s)   not sell, mortgage,  transfer or change the port  of registry
                of  the  Rig without  the  written  consent of  the Indenture
                Trustee having  first been  obtained,  and any  such  written
                consent to any one such  sale, mortgage, transfer, or  change
                shall not be construed to be a waiver of this  provision with
                respect to  any subsequent proposed sale,  mortgage, transfer
                or  change.   Any such  sale, mortgage,  transfer,  or change
                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 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, or call at  a Cuban port to  load or
                discharge cargo or to effect repairs on 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 Indenture  Trustee shall without prejudice to  its other rights
          and powers  under this Mortgage and the other Security 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
          Security 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 Indenture Trustee, the Agent or  the Lenders 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 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 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   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 Indenture 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  Indenture  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 INDENTURE 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 Majority
          Lenders  having served on the Owner  any such notice as is referred
          to in Clause 11  of the Credit Agreement) the security  constituted
          by  this  Mortgage  shall become  immediately  enforceable  and the
          Indenture 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 Indenture  Trustee without  legal
                process and without  liability of  the Indenture 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 Agent;

          (d)   to collect, recover, compromise and give a good discharge for
                or procure that  the 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 Agent take
                over or institute all such proceedings in connection with the
                Rig, the Insurances,  or any Requisition Compensation  as the
                Indenture 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
                Indenture 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 Secured Indebtedness;

          (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 Indenture  Trustee in
                its absolute discretion deems expedient  and for the purposes
                aforesaid the Indenture 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 Indenture  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  Indenture Trustee in or
                about  the exercise  of  the power  vested  in  the Indenture
                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 Indenture Trustee
                in or about or incidental to the exercise by it of any of the
                powers aforesaid.

  9.02    The Indenture 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  Indenture  Trustee by  this
          Mortgage  or to  which the  Indenture  Trustee may  at any  time be
          entitled hereunder.

  9.03    Neither  the Indenture Trustee,  the Agent,  the Lenders  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 Indenture  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  Indenture
          Trustee the purchaser shall not  be bound to see or enquire whether
          the Indenture  Trustee's power  of sale  has arisen  in the  manner
          provided in this Mortgage and the sale shall be deemed to be within
          the power of the Indenture Trustee and the receipt of the Indenture
          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 Indenture Trustee (or the Agent, as the
          case may be):-

          (a)   in respect of sale of the Rig or any part thereof;

          (b)   in respect of recovery under the Insurances;

          (c)   in respect of Requisition Compensation, 

          shall  be held and applied  in the first place  to pay or make good
          all  such  expenses,  liabilities,  losses,  costs,  duties,  fees,
          charges or other moneys whatsoever  (together with interest payable
          thereon under  Clause 4.01(b)) as may have been paid or incurred by
          the Indenture Trustee or the Agent in or about or incidental to the
          exercise  by  the Indenture  Trustee  or the  Agent  of the  powers
          specified or otherwise referred to in Clauses 8 and 9.01 (or any of
          them) and  in connection  with the  Indenture Trustee's  duties  as
          Indenture Trustee and the balance shall be applied in the following
          manner:-

          FIRST:  in or towards satisfaction of any amounts in respect of the
          balance of  the Secured Indebtedness  as are then accrued,  due and
          payable or are  then due and payable by  virtue of payment demanded
          under the Credit Agreement and the other Security Documents (or any
          of  them), in  such order of  application as the  Indenture Trustee
          shall think fit;

          SECONDLY:   at the option of  the Indenture Trustee in retention of
          an amount equal to any part or parts of the Secured Indebtedness as
          is or  are not  then due  and payable but  which (in  the sole  and
          absolute opinion of the  Indenture Trustee) will or may become  due
          and payable  in  the future  and, upon  the same  becoming due  and
          payable,  in or towards satisfaction thereof in accordance with the
          foregoing provisions of this Clause 10.01;

          THIRDLY:  the  surplus (if any)  shall be paid  to the Owner or  to
          whomsoever else may be entitled thereto.

  11.     FURTHER ASSURANCES

  11.01   The Owner shall execute and do all such assurances, acts and things
          as  the Indenture  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 Indenture
                Trustee, the Agent, and the Lenders 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 Indenture 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 Indenture Trustee under this Mortgage, 

          in any  such case, forthwith  upon demand by the  Indenture 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 Owner's obligations  under this Mortgage, hereby
          irrevocably appoints the Indenture Trustee  as its attorney for the
          duration of the Credit Facility Period 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
                Indenture  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 Indenture  Trustee shall  not put  any person
          dealing with the Indenture  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  Indenture  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 the  Indenture Trustee,
          the Agent, the Lenders  and each agent or attorney appointed  under
          or pursuant to this Mortgage from and against any and all expenses,
          claims, liabilities, losses, taxes, costs, duties, fees and charges
          suffered, incurred or made by the Indenture Trustee, the Agent, the
          Lenders 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 Indenture Trustee's
                rights under this Mortgage; or

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

          and  the Indenture  Trustee, the Agent,  the Lenders 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 the  Indenture Trustee,
          the  Agent,  the  Lenders  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  Indenture
          Trustee, the  Agent, the  Lenders  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 Environmentally Sensitive  Material 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  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 Indenture
          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 Indenture Trustee
          against  the amount of  such shortfall.   For the purposes  of this
          Clause 13.03,  "rate of  exchange"  means  the rate  at  which  the
          Indenture Trustee is able on the date of such payment (or, if it is
          not  practicable  for   the  Indenture  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  Indenture 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 the  Indenture Trustee  and  the Agent  on
          demand all costs, fees and expenses, including, but not limited to,
          legal  fees  and expenses  and  valuation  fees and  Taxes  thereon
          incurred by the Indenture Trustee, the Agent and the Lenders or for
          which the Indenture Trustee,  the Agent and the Lenders may  become
          liable in connection with:- 

          (a)   the  negotiation, preparation  and  execution  of the  Credit
                Agreement and the Security 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 and the
                Security Documents (or any of them).

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

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

          (b)   any consent  or waiver required from the Indenture Trustee in
                relation to the  Credit Agreement and the  Security 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 and  the Security
          Documents (or any  of them) may be  subject or give rise  and shall
          indemnify  the Indenture  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 Indenture Trustee hereunder shall be in writing
          and shall be made to the following address:

                    Wilmington Trust Company
                    Rodney Square North
                    1100 North Market Street
                    Wilmington, DE 19890-0001
                    Telefax:  (302) 651-8882
                    Attention: Corporate Trust Division 
   
                    With a copy to:

                    Jennifer L. Janss, Esq.
                    Richards, Layton & Finger
                    P.O. Box 551
                    Wilmington, DE 19899 

          All other notices shall be made to the addresses given in Clause 20
          of the Credit Agreement and Schedule 1 thereto.

  16.     ASSIGNMENTS

  16.01   This  Mortgage shall be binding upon and shall enure to the benefit
          of  the Owner, the Indenture Trustee  and the Lenders and the Agent
          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 Clause 14 of the Credit Agreement,  each Lender 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 Indenture  Trustee shall notify  the Owner promptly
          following any such assignment, transfer or change.

  17.     TOTAL AMOUNT, ETC.

  17.01   The  total amount  of this  Mortgage is US$55,000,000  of principal
          plus  interest,  fees,  commissions  and  performance  of  mortgage
          covenants.  The discharge amount is the same as the total amount.

  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  Indenture 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 Indenture  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
          Indenture Trustee may think  fit.  The Indenture 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 Indenture 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 Indenture 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  and/or the Credit Agreement and the Security Documents or
          to  enforce  any provisions  of  this  Mortgage  and/or the  Credit
          Agreement and the Security  Documents or to recover payment of  the
          Secured Indebtedness and for the purpose of any proceedings for the
          enforcement  and  execution  of  this  Mortgage  and/or the  Credit
          Agreement and the  Security Documents the  Owner hereby submits  to
          the jurisdiction  of the courts of any country of the choice of the
          Indenture Trustee.

  19.02   Without  prejudice to the generality of Clause 19.01, the Indenture
          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 Indenture Trustee may bring before
          the courts of such jurisdiction or other judicial authority and for
          the  purpose of  any action which  the Indenture 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 Indenture 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.


  READING & BATES DRILLING CO.


  By_____________________________________
      Its: 
 

-----------------------------------------------------------------------------


                       ACKNOWLEDGEMENT OF MORTGAGE


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



On this _____ day of November, 1995 before me personally appeared Tim W. Nagle
to me known who being by me duly sworn did dispose and say  that he resides at
13307 Tosca, Houston, Texas 77079, that he is Vice President and Treasurer for
READING & BATES DRILLING CO., 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 READING & BATES DRILLING CO.


                                                               
                                                Notary Public