EXHIBIT 10.7


             SECOND AMENDMENT TO AMENDED AND RESTATED
                     CREDIT FACILITY AGREEMENT


            THIS SECOND AMENDMENT TO AMENDED  AND  RESTATED CREDIT FACILITY
  AGREEMENT,  dated as of November  29, 1995 (this "Amendment"), is entered
  into  by  and among READING  & BATES CORPORATION,  a Delaware corporation
  ("RBC"), READING  &  BATES DRILLING CO., an Oklahoma corporation ("RBD"),
  READING &  BATES   EXPLORATION  CO.,  an  Oklahoma  corporation  ("RBX"),
  READING  AND  BATES, INC., an  Oklahoma corporation ("RBI"), READING  AND
  BATES BORNEO DRILLING CO., LTD., an Oklahoma corporation ("RBB"), READING
  & BATES (A) PTY. LTD., a company incorporated under the laws of the state
  of Western  Australia,  Commonwealth of Australia ("RBA") (RBC, RBD, RBX,
  RBI, RBB and RBA being referred to  collectively as  the "Borrowers"  and
  individually as a  "Borrower"), and INTERNATIONALE NEDERLANDEN BANK N.V.,
  a company incorporated under the laws of The Netherlands, formerly  known
  as NMB POSTBANK GROEP  N.V. (the "Lender").

                       W I T N E S S E T H:

            WHEREAS, the Borrowers and the Lender are parties to a certain
  Amended and Restated Credit Facility  Agreement  dated  as of  April 27,
  1995 (as amended by that certain First Amendment to Amended and Restated
  Credit  Facility Agreement, dated as  of July 31, 1995,  and as the same
  may hereafter be  amended, the "Credit Agreement"; all terms used herein
  without definition shall have the meanings ascribed to such terms in the
  Credit Agreement);

            WHEREAS, the Borrowers desire to repay Facility A and Facility
  B, terminate Facility  F, and obtain the  release of the first preferred
  ship mortgage on the semi-submersible drilling  unit "M.  G. HULME, JR."
  and the preferred fleet mortgage on the semi-submersible  drilling  unit
  "JIM  CUNNINGHAM",  together  with the related Assignments of Insurances
  and  Drilling  Contract  Earnings and Revenues applicable to those rigs;
  and 

            WHEREAS, the Borrowers and the Lender have agreed to amend the
  Credit Agreement, all upon the terms and  subject to the conditions  and
  requirements  acceptable to the  Lender as set forth herein;

            NOW THEREFORE, for and in consideration of the mutual premises
  contained herein and  other  valuable  consideration,  the  receipt  and
  sufficiency  of  which  are  hereby  acknowledged,  the parties  hereto,
  intending to be legally bound, agree as follows:

       1.   Definitions.  Section  1.1  of the Credit Agreement is  hereby
       amended by deleting the following definitions:

            (a)  deleting the existing  definitions of  "Charter Trustee",
       "Charters", "Facility A", "Facility A Maturity Date", "Facility B",
       "Facility  F", "Facility  F  Maturity  Date",  "Installment Payment
       Dates", "Interest Period" and "LIBOR".

            (b)  deleting  the  existing definitions of "Advance" "Assign-
       ments", "Business Day", "Commitment", "Facility", "Interest Payment
       Date", "Letters  of Credit", "Mortgage  Amendment", "Notes", "Rigs"
       and  "Security  Deposits"  and  substituting  in  lieu  thereof the
       following:

                 "Advance"  means a  loan by  the Lender  to any  Borrower
            under Facility C.

                 "Assignments"  means  the  Assignment,   Assumption   and
            Amendment  of the Assignment of Insurances and the Assignment,
            Assumption and Amendment of the Assignment of Drilling Contract
            Revenues and Earnings dated  March   27,   1991,  as   amended,
            substantially  in  the  forms   of  Exhibits   M-1   and   N-1,
            respectively, attached hereto.

                 "Business Day" means any day on which commercial banks are
            open  for business in Amsterdam, The Netherlands, and New York,
            New York.

                 "Commitment" means a maximum of USD 35,000,000.

                 "Facility" means any facility described in Section 4, 5 or
            6 of this Credit Agreement.

                 "Interest Payment Date"  means June  1, 1995, September 1,
            1995, December 1, 1995 and December 31, 1995.

                 "Letters  of  Credit"  means the standby letters of credit
            issued by  Lender  pursuant  to  Section  5.1  and  6.1  below,
            respectively, under Facility D or Facility  E, substantially in
            the forms attached hereto as Exhibit H-1 and  H-2 or as  agreed
            to  by Lender.

                 "Mortgage Amendment"  means Amendment  No.  7  to the U.S.
            Preferred Fleet Mortgage, substantially in the form of Exhibit
            E-1 attached hereto.

                 "Notes" means the amended and restated promissory notes of
            the Borrower substantially in the form of Exhibits A-2, A-3 and
            A-4.

                 "Rigs" means the  seven (7) U.S. flag  drilling  rigs, the
            one (1) Panamanian flag drilling rig and the one (1) Australian
            flag drilling rig listed in Schedule 1-A attached hereto.

                 "Security Deposits" means the deposits required to be made
            by the Borrowers with the Lender pursuant to Sections 5.1, 6.1,
            10.4, 10.8(a), 10.8(b)(iii)(C), 10.9(b) and 17.1 hereof

            (c) adding the following definition in appropriate alphabetical
       order:

                 "Hulme  Leveraged  Lease"  means  the  sale  of  the semi-
       submersible drilling unit "M.  G.  HULME, JR." by Reading and Bates,
       Inc. to a group of investors including GATX Capital Corporation, ATT
       Capital Corporation, McDonald Douglas Finance Corporation and Heller
       Financial  for a purchase price of not less than USD 50,000,000, the
       lease of such unit by Reading and Bates, Inc., on a bareboat charter
       basis for a term of ten (10) years.

       2.   Facility A. Facility A is repaid in full, and Section 2 of  the
  Credit Agreement  and Exhibit  A-1 attached thereto are hereby deleted in
  their entirety.

       3.   Facility B.  By  separate instrument Lender has sold all of its
  rights, title and interest in and to the Charter Notes to Reading & Bates
  Offshore, Limited, an Affiliate of the Borrowers, the  Charter   Payments
  Guaranty  has  been  terminated and Section 3 of the Credit Agreement  is
  hereby deleted in its entirety.

       4.   Facility F. Section 7 of the Credit  Agreement and Exhibit  A-5
  attached thereto  are  hereby  deleted in  their entirety.

       5.   Manner of Drawdown and Issuance of Letters of Credit. Section 8
  of the Credit Agreement is  hereby amended by:

            (a) deleteing reference to "Facility F" in subsection 8.1(c)(i),
  8.2(c) and 8.3(a);

            (b) deleting subsection 8.2(a); and

            (c) deleting reference to "Facility F Notes" in subsection 8.3(b).

       6.   Interest. Section 9 of the Credit Agreement is hereby amended by:

            (a) deleting  subsections  9.1(a)(i)  and  (v)  and  9.1(c);

            (b) deleting  subsection 9.1(b) in its entirety and substituting
      in lieu thereof the following:

                "Interest on unpaid principal amounts outstanding under this
                Agreement shall be computed on the basis of a  year  of  365 
                days  and  the  actual  number  of  days  elapsed  for   all
                Facilities."

            (c) deleting  subsection 9.1(d) in its entirety and substituting
       in lieu  thereof  the following  subsection  9.1(d):

                "(d)   All Interest Periods shall end on March 31, June  30,
       July 31,  August  31,  September  30,  October  31,  November  30  or
       December 31.

            (d) deleting Section 9.2 in its entirety and substituting in lieu
       thereof the following Section 9.2:

                "9.2  Payment  of  Interest.  Interest  shall  be paid by the
                relevant Borrowers as follows:

                (a)  In  respect  of the unpaid principal amounts outstanding
            under Facility C, in arrears, on June 1, 1995, September 1, 1995,
            December 1, 1995  and December 31, 1995; provided, however,  that
            all amounts of unpaid Interest outstanding under Facility C shall
            be  paid in full on the  Facility C Maturity Date.

                 (b)  In respect of any Guaranty  Payment under Facility D or
            Facility E interest from the date of such Guarantee Payment up to
            the  date  such  amount  is paid by the relevant Borrowers on the
            date such payment is made; provided, however, that all amounts of
            unpaid Interest outstanding under Facility D and Facility E shall
            be paid in full on the Facility D Maturity Date and the  Facility
            E Maturity  Date, respectively."

       7.   Payments; Repayment. Section 10 of the Credit Agreement is hereby
  amended by:

       (a)  deleting subsection 10.2(a) in its entirety;

       (b)  deleting Section 10.3 in its entirety;

       (c)  deleting  subsection  10.4(a)  in  its  entirety and substituting
       in lieu thereof the following:

            "(a)   Upon  the sale or actual or constructive total loss of any
       Rig  the sale or insurance proceeds  shall be  used  to (i) prepay any
       amounts outstanding  under  Facility C along with all interest accrued
       on such amounts  and  all fees and other costs  incurred by the Lender
       and (ii) if all  amounts  referred to in (i) above have been paid, any
       such  proceeds  shall  be  paid to the Lender and held in  an interest
       bearing account at the Lender which shall serve as additional security
       for the Credit Facility (unless the Borrowers provide the Lender  with
       other security acceptable to the  Lender in  an amount equal to, or in
       excess  of, any  such proceeds).   If  such proceeds  are placed in an
       interest  bearing  account, such funds and any interest earned on them
       will be returned to the Borrowers upon  the  repayment of  all amounts
       due under this Agreement and the termination of all Letters of Credit.
       The Borrowers shall immediately upon receipt of the payments  referred
       to  in  this  Section  10.4  place such proceeds of such sale  as  are
       necessary  to make the prepayment required by this Section 10.4  in an
       interest bearing account at the Lender  for the  benefit of the Lender
       and all amounts in such account shall  be  paid  to  the Lender on the
       next Interest  Payment  Date;  provided,  however,  that  all interest
       earned thereon  shall be paid to the Borrowers."; and

       (d) deleting   subsection   10.8(b)(iii)(B)  in   its   entirety   and
      substituting in lieu thereof the following:

            "(B)  if  the  efforts referred to in (A)  above fail to have the
       effect  of  eliminating  the  increased  cost  or the reduction in the
       amount of any payment received, the Borrowers shall on demand (whether
       made  before  or  after any repayment of the amounts outstanding under
       Facilities  C  and  E pay  to the  Lender  such amount  as the  Lender
       certifies  together  with supporting documentation  to be necessary to
       compensate it  for such additional  cost or  reduction; and".

       8.   Fees and Expenses.  Section 13 is amended  by deleting subsection
  13.1(e) and (f) in their entirety.

       9.   Negative  Covenants  of Borrowers.   Section  16  of  the  Credit
   Agreement is hereby amended by:

            (a)  deleting  subsection  16.1(g)  and the  paragraph  following
       subsection 16.1(g) in their entirety  and substituting in lieu thereof
       the following:

                 "(g)   liens  incurred on the semi-submersible drilling unit
            "JIM CUNNINGHAM" pursuant to the Hulme Leveraged Lease; and

                 (h)  liens  existing as  of  the date  of this Agreement and
             disclosed in writing to the Lender.

                 Notwithstanding  anything  in  this  Section  16.1  to   the
            contrary, in no event shall the liens, encumbrances and  security
            interests  permitted  by  this Section 16.1 materially impair (in
            the opinion of the Lender in its sole discretion) the business or
            financial  condition  of  the  Borrowers  or  the  value  of  the
            properties  of  the Borrowers  taken  as  a  whole.";

            (b)  deleting  subsection 16.12 in  its entirety and substituting
       in  lieu thereof  the  following subsection  16.12:

                 "Sale of Rigs, Etc. Sell, transfer or assign any of the Rigs,
            any right to receive  the  revenue  from  the Rigs  or any  other
            material  asset, other than pursuant to the Hulme Leveraged Lease.

            10.  Representations and Warranties.  Borrowers, without limiting
       the  representations and warranties provided in the  Credit Agreement,
       represent  and warrant to the lender as follows:

                 (a)  The   execution,   delivery   and  performance  by  the
            Borrowers of  this Amendment  have  been  duly authorized by  all
            necessary action on the part of each of the Borrowers and  do not
            and will not (i) violate any provision of any Borrower's articles
            of  incorporation, by-laws, or other organizational documents  or
            any Applicable  Law,  or  (ii) be  in conflict with, result in  a
            breach of, or constitute (following  notice  or  lapse of time or
            both) a default under any agreement to which any  Borrower  is  a
            party or by which any  Borrower  or any of its property is bound.

                 (b)  This   Amendment  creates  legal,  valid  and   binding
            obligations of each of the Borrowers enforceable  against each of
            the  Borrowers  in  accordance  with  its  terms, subject to laws
            affecting  creditors' rights  generally  and applicable equitable
            legal principles.

                 (c)  No  Event of Default or event which with the  giving of
            notice  or  lapse  of  time  or both would constitute an Event of
            Default exists.

                 (d)  All  representations  and warranties  by the  Borrowers
            contained in the Credit Agreement, as  amended  hereby,  are true
            and correct in all material respects  with  the  same  effect  as
            though such  representations and warranties had been  made on and
            as of the date hereof.

       11.  Credit  Agreement  Ratified  and  Confirmed.  Except as expressly
  amended and modified herein, all terms and covenants  and provisions of the
  Credit  Agreement and all Loan Documents shall remain unaltered and in full
  force and effect, and the parties hereto do  expressly  ratify and  confirm
  the Credit Agreement and  all Loan Documents as modified herein. All future
  references to  the Credit Agreement shall  be deemed to refer to the Credit
  Agreement as amended hereby.

       12.  Expenses.   The  Borrowers  agree to pay on demand all reasonable
  costs  and  expenses  of  the  Lender  in  connection with the preparation,
  execution and  delivery of this Amendment and  the  other  instruments  and
  documents to be delivered hereunder,  including,  without  limitation,  the
  reasonable  fees  and out-of-pocket expenses of counsel for the Lender with
  respect thereto and with respect to  advising  the  Lender as to its rights
  and responsibilities hereunder and thereunder.

       13.  Conditions Precedent.  This  Amendment  shall  be effective  upon
  receipt by the Lender of all of the following,  each  in form and substance
  satisfactory to the Lender:

            (a)  Fully executed counterparts of this Amendment.

            (b)  Certified  copies  of  the  resolutions  of  the  Boards  of
       Directors of  each of  the  Borrowers  authorizing  the execution  and
       delivery by each of the  Borrowers of this Amendment on behalf of each
       of the  Borrowers,  and  all  documents  evidencing  other   necessary
       corporate action with respect to this Amendment.

            (c)  Certificate of the  Secretary or the  Assistant Secretary of
       each Borrower certifying the names and true signatures of the officers
       of each Borrower authorized to sign this Amendment  on behalf of  such
       Borrower and  the other documents  or certificates  to be executed  by
       such  Borrower pursuant to this Amendment.

            (d)  Copies certified as of a recent date by the Secretary or the
       Assistant  Secretary of each Borrower of its By-Laws.

            (e)  A  copy  of each  Borrower's  Certificate  of  Incorporation
       certified  by  the  Secretary  of  State of the state of incorporation
       within  thirty  (30)  days  from  the   date   of  this  Amendment and
       certificates dated as of a recent date  of  the Secretary  of State of 
       the state of incorporation as  to the  existence and good  standing of
       each Borrower.

            (f)  An opinion of counsel to the Borrowers in form and substance
        acceptable to the Lender.

            (g)  If  the  date  of  this Amendment is not a Drawdown Date,  a
       certificate dated the first Drawdown Date of an officer of each of the
       Borrowers certifying that:

                 (i)  The    representations   and    warranties contained in
            Section 14  of the Credit Agreement are correct on and  as of the
            Drawdown  Date as  though  made on and as of such date; and

                 (ii) No  event  has  occurred  and  is  continuing, or would
            result from the  Advance, or the issuance of a  Letter of  Credit
            which constitutes an Event of Default or with the passing of time
            or the giving of  notice would constitute an Event of Default.

            (h)  All  orders,  consents,  approvals, licenses, authorizations
       and  validations  of,  filings,  recordings and registrations with and
       exemptions by any Governmental Agency or any  Person  (other than  any
       routine filings which may be required   after  the  date  hereof  with
       appropriate governmental authorities  in connection with the operation
       of the Rigs) required to (i) authorize  the  execution,  delivery  and
       performance by the  Borrowers of this  Amendment or  (ii) prevent  the
       execution, delivery and performance by the Borrowers of this Amendment
       from resulting  in a breach of any of the terms and conditions of,  or
       resulting  in  a  breach  of  any of  the terms  or conditions  of, or
       resulting  in  the  imposition of any lien, charge or encumbrance upon
       any properties of the Borrowers pursuant to, or constituting a default
       (with due notice or lapse of time or both), if such breach, imposition
       or  default  would  result  in  a  materially  adverse  change  in the
       financial  position of the Borrowers, or resulting in an occurrence of
       any event for which any  holder or holders of Indebtedness may declare
       the same due and  payable  under,  any  indenture,  agreement,  order,
       judgment or instrument under which any Borrower is a party (other than
       the Mortgage, the Pledges or  the Assignments)  or to  the  Borrowers'
       knowledge  after due inquiry by which  the Borrowers or their property
       may  be  bound or affected, or under the Certificates of Incorporation
       or By-Laws of the Borrowers,  shall have been obtained or made.

            (i)  Hulme Leveraged  Lease shall have  been closed, Facility  A,
       Facility B,  Facility F  and the Charter Payments Guaranty  shall have
       been  repaid,  terminated  or  otherwise satisfied, the Borrower shall
       have purchased all of the Lender's interests in the Charter  Notes for
       the aggregate price of USD 44,197,422.51  [less  the principal portion
       of  all Charter Payments (as defined in the Charter Payments Guaranty)
       heretofore made to Lender] and the Lender shall  have received  copies
       of all of the  material agreements executed in connection therewith in
       a form reasonably satisfactory to the Lender.

       14.  Successors and Assigns.  This Amendment shall be binding upon  and
  inure  to  the  benefit  of  the  parties  hereto,  their  respective heirs,
  successors,  successors-in-titles, and  assigns.

       15.  Governing Law.  This Amendment shall be governed by and construed
  in accordance with the  laws of the State of New York,  notwithstanding any
  principles regarding  conflicts of laws thereof.

       16.  Entire  Agreement.   This Amendment sets  forth the entire under-
  standing of the  parties with  respect to  the matters  set  forth  herein,
  and shall supersede any prior negotiations or  agreements, whether  written
  or  oral, with respect thereto.

       17.  Counterparts.  This Amendment may be executed  in  any number  of
  counterparts and by different parties hereto in separate  counterparts  and
  may be delivered by telecopier.  Each counterpart so executed and delivered
  shall be  deemed  an  original  and  all  of  which  taken  together  shall
  constitute but one and the same instrument.


  IN WITNESS WHEREOF, the parties hereto have executed this Amendment through
  their  authorized officers  as of  the date first above written.

                             READING & BATES CORPORATION



                             By:                            
                                 Name:   T. W. Nagle
                                 Title:  Executive Vice President,
                                         Finance and Administration


                             READING & BATES DRILLING CO.



                             By:                           
                                 Name:   T. W. Nagle
                                 Title:  Vice President and Treasurer


                             READING & BATES EXPLORATION CO.



                             By:                           
                                  Name:   T. W. Nagle
                                  Title:  Vice President and Treasurer


                             READING AND BATES, INC.



                             By:                           
                                  Name:   T. W. Nagle
                                  Title:  Vice President and Treasurer


                             READING AND BATES BORNEO DRILLING CO., LTD.



                             By:                           
                                  Name:   T. W. Nagle
                                  Title:  Vice President and Treasurer


  THE COMMON SEAL OF            READING & BATES (A) PTY. LTD.
  READING & BATES (A)
  PTY. LTD. was hereunto
  affixed by authority of
  the Board of Directors        By:  _________________________________
  in the presence of:                Name:     T. W. Nagle
                                     Title:    Vice President and Treasurer
                         
  -----------------------
  T. W. Nagle, Director


  -----------------------                         
  W. K. Hillin, Secretary

                                 
                                INTERNATIONALE  NEDERLANDEN BANK N.V.



                                By:                          
                                     Name:
                                     Title:

                       [SIGNATURE PAGE FOR SECOND AMENDMENT TO
                   AMENDED AND RESTATED CREDIT FACILITY AGREEMENT] 

                                   Schedule 1-A
                                   List of Rigs


       Name           Official No.     Flag            Owner

  RON TAPPMEYER           -            Australian   Reading & Bates
                                                    (A) Pty. Ltd.

  D. R. STEWART         626904         U.S.         Reading & Bates
                                                    Exploration Co.

  D. K. McINTOSH        591662         U.S.         Reading & Bates
                                                    Exploration Co.

  W. D. KENT            583169         U.S.         Reading & Bates
                                                    Exploration Co.

  CHARLEY GRAVES        6618-76-B      Panamanian   Reading and Bates
                                                    Borneo Drilling Co.,
                                                    Ltd.

  RANDOLPH YOST         601699         U.S.         Reading & Bates
                                                    Drilling Co.

  ROGER W. MOWELL       645360         U.S.         Reading & Bates
                                                    Drilling Co.

  J. T. ANGEL           651645         U.S.         Reading & Bates
                                                    Drilling Co.

  JACK BATES            906283         U.S.         Reading & Bates 
                                                    Drilling Co.