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                            UNITED STATES
                  SECURITIES AND EXCHANGE COMMISSION
                        Washington, D.C. 20549

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

                              FORM 10-Q

(Mark One)
  (X)   QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d)
        OF THE SECURITIES EXCHANGE ACT OF 1934
        For the quarterly period ended September 30, 1999
                                  or
  ( )   TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d)
        OF THE SECURITIES EXCHANGE ACT OF 1934



                    Commission file number 1-13729

                        R&B FALCON CORPORATION

        (Exact name of registrant as specified in its charter)


              Delaware                             76-0544217
   (State or other jurisdiction of              (I.R.S. Employer
    incorporation or organization)             Identification No.)


               901 Threadneedle, Houston, Texas  77079
          (Address of principal executive offices)(Zip code)


                            (281) 496-5000
        (Registrant's telephone number, including area code)


Indicate  by  check  mark whether the registrant  (1)  has  filed  all
reports  required to be filed by Section 13 or 15(d) of the Securities
Exchange  Act  of  1934 during the preceding 12 months  (or  for  such
shorter period that the registrant was required to file such reports),
and  (2) has been subject to such filing requirements for the past  90
days.   Yes_X_   No___


      NUMBER OF SHARES OUTSTANDING OF REGISTRANT'S COMMON STOCK
                  AT OCTOBER 31, 1999:  193,628,687


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           Forward-Looking Statements and Assumptions

     This   Quarterly  Report  on  Form  10-Q  may   contain   or
incorporate  by  reference  certain  forward-looking  statements,
including   by  way  of  illustration  and  not  of   limitation,
statements relating to liquidity, revenues, expenses, margins and
contract  rates  and  terms.   The  Company  strongly  encourages
readers  to note that some or all of the assumptions, upon  which
such  forward-looking  statements  are  based,  are  beyond   the
Company's  ability to control or estimate precisely, and  may  in
some  cases  be  subject  to rapid and  material  changes.   Such
assumptions include the contract status of the Company's offshore
units,   general  market  conditions  prevailing  in  the  marine
drilling  industry  (including daily rates and  utilization)  and
various  other  trends  affecting the marine  drilling  industry,
including   world  oil  and  gas  prices,  the  exploration   and
development programs of the Company's customers, the  actions  of
the Company's competitors and economic conditions generally.


                    PART I - FINANCIAL INFORMATION

Item 1.  Financial Statements

Company or Group of Companies for Which Report is Filed:

               R&B Falcon Corporation and Subsidiaries

      The  financial  statements for the  three  and  nine  month
periods  ended  September  30, 1999 and  1998,  include,  in  the
opinion  of  the Company, all adjustments (which only consist  of
normal  recurring  adjustments) necessary to present  fairly  the
financial  position and results of operations for  such  periods.
The  financial  data for the three and nine month  periods  ended
September  30,  1999  included  herein  have  been  reviewed   in
accordance  with standards established by the American  Institute
of  Certified  Public  Accountants by Arthur  Andersen  LLP,  the
registrant's  independent  public accountants,  whose  report  is
included  herein.  Results of operations for the three  and  nine
month  periods  ended  September 30,  1999  are  not  necessarily
indicative  of results of operations which will be  realized  for
the  year  ending  December 31, 1999.  The  financial  statements
should  be read in conjunction with the Company's Form  10-K  for
the year ended December 31, 1998.



                           R&B FALCON CORPORATION
                               AND SUBSIDIARIES

                         CONSOLIDATED BALANCE SHEET
                               (in millions)

                                               SEPTEMBER 30,  DECEMBER 31,
                                                    1999        1998
                                               -------------  ------------
                                                (unaudited)
ASSETS
------
CURRENT ASSETS:
   Cash and cash equivalents, gross              $   830.6    $   177.4
   Less cash dedicated to capital projects          (184.8)          -
                                                 ---------    ---------
   Cash and cash equivalents, net                    645.8        177.4
   Short-term investments                             32.2           -
   Accounts receivable:
    Trade, net                                       165.9        197.0
    Other                                             78.2         73.5
   Materials and supplies inventory                   45.4         36.1
   Drilling contracts in progress                     15.8         29.5
   Other current assets                               16.6         25.0
                                                 ---------    ---------
    Total current assets                             999.9        538.5
                                                 ---------    ---------
INVESTMENTS IN AND ADVANCES TO UNCONSOLIDATED
   INVESTEES                                          86.3         28.2
                                                 ---------    ---------
PROPERTY AND EQUIPMENT:
   Drilling                                        3,869.0      3,369.2
   Other                                             246.2        181.1
                                                 ---------    ---------
    Total property and equipment                   4,115.2      3,550.3
   Accumulated depreciation                         (625.3)      (519.4)
                                                 ---------    ---------
    Net property and equipment                     3,489.9      3,030.9
                                                 ---------    ---------
GOODWILL, NET OF ACCUMULATED AMORTIZATION             73.6         70.6
                                                 ---------    ---------
DEFERRED CHARGES AND OTHER ASSETS                    263.1         45.8
                                                 ---------    ---------
TOTAL ASSETS                                     $ 4,912.8    $ 3,714.0
                                                 =========    =========
LIABILITIES AND STOCKHOLDERS' EQUITY
------------------------------------
CURRENT LIABILITIES:
   Short-term obligations                        $      -     $   123.4
   Long-term obligations due within one year          13.0          6.3
   Accounts payable - trade                           95.2         83.1
   Accrued liabilities                               168.0        140.4
                                                 ---------    ---------
    Total current liabilities                        276.2        353.2

LONG-TERM OBLIGATIONS                              2,942.6      1,866.2

OTHER NONCURRENT LIABILITIES                          37.9         39.2

DEFERRED INCOME TAXES                                 97.9        142.4
                                                 ---------    ---------
    Total liabilities                              3,354.6      2,401.0
                                                 ---------    ---------
COMMITMENTS AND CONTINGENCIES

MINORITY INTEREST                                     52.5         62.8
                                                 ---------    ---------
REDEEMABLE PREFERRED STOCK                           256.3           -
                                                 ---------    ---------
STOCKHOLDERS' EQUITY:
  Common stock, $.01 par value                         1.9          1.9
  Capital in excess of par value                   1,112.6      1,061.5
  Retained earnings                                  142.9        199.1
  Other                                               (8.0)       (12.3)
                                                 ---------    ---------
   Total stockholders' equity                      1,249.4      1,250.2
                                                 ---------    ---------
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY       $ 4,912.8    $ 3,714.0
                                                 =========    =========

The accompanying notes are an integral part of the interim consolidated
financial statements.



                         R&B FALCON CORPORATION
                            AND SUBSIDIARIES

                  CONSOLIDATED STATEMENT OF OPERATIONS
                 (in millions except per share amounts)
                              (unaudited)

                                    THREE MONTHS ENDED     NINE MONTHS ENDED
                                       SEPTEMBER 30,         SEPTEMBER 30,
                                    ------------------    ------------------
                                      1999       1998       1999       1998
                                    -------    -------    -------    -------
OPERATING REVENUES:
 Deepwater                          $  93.6    $ 100.9    $ 270.1    $ 297.9
 Shallow water                         41.0       88.8      156.1      306.0
 Inland water                          28.3       53.7       84.7      199.7
 Engineering services and
   land operations                     51.2         .1      173.4         .3
 Development                             .1         -          .2         -
                                    -------    -------    -------    -------
    Total operating revenues          214.2      243.5      684.5      803.9
                                    -------    -------    -------    -------
COSTS AND EXPENSES:
 Deepwater                             43.0       52.2      126.4      140.3
 Shallow water                         34.2       40.0      116.2      119.6
 Inland water                           9.6       41.8       65.6      126.0
 Engineering services and
   land operations                     37.9         .2      126.9         .4
 Development                             .2        7.6        2.5       15.6
 Cancellation of conversion
   projects                            31.7       85.8       31.7       85.8
 Depreciation and amortization         39.7       24.1      114.3       68.1
 General and administrative            14.0       15.0       55.3       44.4
 Merger expenses                         -          -          -        (1.0)
                                    -------    -------    -------    -------
     Total costs and expenses         210.3      266.7      638.9      599.2
                                    -------    -------    -------    -------
OPERATING INCOME (LOSS)                 3.9      (23.2)      45.6      204.7
                                    -------    -------    -------    -------
OTHER INCOME (EXPENSE):
 Interest expense, net of
   capitalized interest               (45.2)     (13.9)    (116.5)     (43.0)
 Interest income                        9.7        2.6       24.6        7.6
 Income from equity investees
   plus related income                  2.7         -         9.0         -
 Other, net                             (.4)       (.3)       (.7)       (.1)
                                    -------    -------    -------    -------
      Total other income (expense)    (33.2)     (11.6)     (83.6)     (35.5)
                                    -------    -------    -------    -------
INCOME (LOSS) FROM CONTINUING
  OPERATIONS BEFORE INCOME TAXES,
  MINORITY INTEREST AND
  EXTRAORDINARY LOSS                  (29.3)     (34.8)     (38.0)     169.2
                                    -------    -------    -------    -------
INCOME TAX EXPENSE  (BENEFIT):
 Current                               11.4       16.5       30.0       28.9
 Deferred                             (22.1)     (26.2)     (43.8)      38.9
                                    -------    -------    -------    -------
      Total income tax
        expense (benefit)             (10.7)      (9.7)     (13.8)      67.8
                                    -------    -------    -------    -------
MINORITY INTEREST                      (3.8)      (3.1)      (9.1)      (8.2)
                                    -------    -------    -------    -------
INCOME (LOSS) FROM CONTINUING
 OPERATIONS BEFORE
 EXTRAORDINARY LOSS                   (22.4)     (28.2)     (33.3)      93.2
INCOME FROM DISCONTINUED OPERATIONS      -         7.7         -        16.5
EXTRAORDINARY LOSS, NET OF
  TAX BENEFIT                            -          -        (1.7)     (22.0)
                                    -------    -------    -------    -------
NET INCOME (LOSS)                     (22.4)     (20.5)     (35.0)      87.7
DIVIDENDS AND ACCRETION ON
 PREFERRED STOCK                       12.1         -        21.2         -
                                    -------    -------    -------    -------
NET INCOME (LOSS) APPLICABLE
 TO COMMON STOCKHOLDERS             $ (34.5)   $ (20.5)   $ (56.2)   $  87.7
                                    =======    =======    =======    =======
NET INCOME (LOSS) PER COMMON SHARE:
  Basic:
     Continuing operations          $  (.18)   $  (.17)   $  (.28)   $   .56
     Discontinued operations            -          .05        -          .10
     Extraordinary loss                 -          -         (.01)      (.13)
                                    -------    -------    -------    -------
       Net income (loss)            $  (.18)   $  (.12)   $  (.29)   $   .53
                                    =======    =======    =======    =======
  Diluted:
    Continuing operations           $  (.18)   $  (.17)   $  (.28)   $   .56
    Discontinued operations             -          .05        -          .10
    Extraordinary loss                  -          -         (.01)      (.13)
                                    -------    -------    -------    -------
       Net income (loss)            $  (.18)   $  (.12)   $  (.29)   $   .53
                                    =======    =======    =======    =======

WEIGHTED AVERAGE COMMON SHARES OUTSTANDING:
    Basic                             192.8      165.3      192.6      165.2
                                    =======    =======    =======    =======
    Diluted                           192.8      165.3      192.6      166.4
                                    =======    =======    =======    =======

The accompanying notes are an integral part of the interim consolidated
financial statements.



                        R&B FALCON CORPORATION
                           AND SUBSIDIARIES

                 CONSOLIDATED STATEMENT OF CASH FLOWS
                       (in millions)(unaudited)

                                                      NINE MONTHS ENDED
                                                         SEPTEMBER 30,
                                                    ----------------------
                                                       1999         1998
                                                    ---------    ---------
CASH FLOWS FROM OPERATING ACTIVITIES:
    Net income (loss)                               $   (35.0)   $    87.7
    Adjustments to reconcile net income
       (loss) to net cash provided by
       operating activities:
     Depreciation and amortization                      114.3         68.1
     Deferred income taxes                              (44.5)        38.9
     Gain on dispositions of property and equipment     (18.9)        (3.0)
     Cancellation of conversion projects                 31.7         85.8
     Recognition of deferred expenses                    10.5          9.2
     Deferred compensation                                4.5           -
     Income from equity investees plus
       related income                                    (9.0)          -
     Minority interest in income of
       consolidated subsidiaries                          9.1          8.2
     Dryhole and exploration expenses
       relating to oil and gas properties                  -          13.2
     Income from discontinued operations                   -         (16.5)
     Extraordinary loss from extinguishment
       of debt, net of tax benefit                        1.7         22.0
     Changes in assets and liabilities:
       Accounts receivable, net                          51.8        (43.4)
       Materials and supplies inventory                  (9.3)       (13.9)
       Drilling contracts in progress                    13.6           -
       Deferred charges and other assets                (25.8)       (21.7)
       Accounts payable - trade                           6.6        (16.5)
       Accrued liabilities                              (24.9)          .1
       Accrued interest                                  41.2         23.8
       Income taxes                                       3.9         (5.4)
       Other, net                                        (1.1)         (.6)
                                                    ---------    ---------
         Net cash provided by operating activities      120.4        236.0
                                                    ---------    ---------
CASH FLOWS FROM INVESTING ACTIVITIES:
    Dispositions of property and equipment               10.1          3.7
    Purchases of property and equipment,
      exclusive of noncash items                       (624.3)      (845.9)
    Increase in cash dedicated to capital projects     (184.8)          -
    Purchase of short-term investments                  (32.2)       (36.6)
    Increase in investments in and advances to
     unconsolidated investees                           (49.1)          -
                                                    ---------    ---------
        Net cash used in investing activities          (880.3)      (878.8)
                                                    ---------    ---------
CASH FLOWS FROM FINANCING ACTIVITIES:
   Net payments on revolving credit facilities         (150.0)      (222.0)
   Increase (decrease) in short-term obligations       (123.4)       113.6
   Proceeds from long-term obligations                1,250.0      1,094.0
   Net proceeds from issuance of preferred stock        288.8           -
   Principal payments on long-term obligations          (18.0)      (303.2)
   Premium paid on debt extinguishment                     -         (25.1)
   Distribution to minority shareholders of
    consolidated subsidiaries, net of contributions     (19.4)        (4.0)
   Other                                                   .3          1.7
                                                    ---------    ---------
     Net cash provided by financing activities        1,228.3        655.0
                                                    ---------    ---------
NET INCREASE IN CASH AND CASH EQUIVALENTS               468.4         12.2

CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD        177.4         55.5
                                                    ---------    ---------
CASH AND CASH EQUIVALENTS AT END OF PERIOD          $   645.8    $    67.7
                                                    =========    =========
Supplemental Cash Flow Disclosures:
    Interest paid                                   $    69.7    $    17.0
    Income taxes paid                               $    27.1    $    29.5
    Purchase of property and equipment in
      exchange for debt or equity                   $     9.2    $    35.5


The accompanying notes are an integral part of the interim consolidated
financial statements.


                     R&B FALCON CORPORATION
                        AND SUBSIDIARIES

       NOTES TO INTERIM CONSOLIDATED FINANCIAL STATEMENTS
                          (unaudited)


A)   SIGNIFICANT ACCOUNTING POLICIES

          CASH  AND  CASH EQUIVALENTS - In the second quarter  of
     1999,   the   Company's  majority-owned  subsidiary   Arcade
     Drilling  AS  ("Arcade") declared a  distribution  of  $27.8
     million, of which the Company received $17.6 million, net of
     withholding  taxes.  At September 30, 1999,  Arcade's  cash,
     cash  equivalents  and  short-term investments  balance  was
     $32.5 million.

          In the third quarter of 1999, the Company completed the
     project  financing for the Deepwater Nautilus (see  Note  C)
     and  the Deepwater Frontier (which the Company owns 60%) and
     as  a  result  $184.8  million  of  the  Company's  cash  at
     September  30,  1999 was restricted as to use.  Such  amount
     consists of  $134.8 million related to the financing of  the
     Deepwater Nautilus and will be used for capital expenditures
     and  certain principal and interest payments. The  remaining
     $50.0  million relates to the financing for the construction
     of  the Deepwater Frontier which collateralizes a five  year
     standby  letter of credit that the Company was  required  to
     secure  for  the  limited liability company to  obtain  such
     financing.  As a result of the above, the cash dedicated  to
     these  capital  projects  has  been  reclassified  to  Other
     Assets.

          GOODWILL  -  Goodwill was recorded as a result  of  the
     purchase  of Cliffs Drilling Company in December  1998  (see
     Note B).  Goodwill has increased $3.0 million since December
     31, 1998. Such increase represents revisions to the estimate
     in  the  initial  purchase price allocation offset  by  $1.4
     million of amortization.

          REVENUE  RECOGNITION - In the first quarter of 1999,  a
     customer  terminated  a drilling contract  for  one  of  the
     Company's third-generation semisubmersibles and the  Company
     received  an  early  termination fee of  $7.2  million.  The
     semisubmersible  was  immediately  contracted   to   another
     customer  and as a result the Company recognized  the  early
     termination fee as revenue in the first quarter of 1999.

          CAPITALIZED INTEREST - The Company capitalizes interest
     applicable  to the construction and significant upgrades  of
     its  marine  equipment as a cost of such  assets.   Interest
     capitalized  for the three months ended September  30,  1999
     and  1998  was $22.5 million and $12.2 million, respectively
     and  for  the nine months ended September 30, 1999 and  1998
     was $58.5 million and $27.5 million, respectively.  Interest
     capitalized  is included as a reduction of interest  expense
     in the Consolidated Statement of Operations.

          EXTRAORDINARY LOSS - In the first quarter of 1999,  the
     Company incurred an extraordinary loss of $1.7 million,  net
     of   a  tax  benefit  of  $.9  million,  due  to  the  early
     extinguishment of debt obligations. Such loss  consisted  of
     the  write-off of unamortized debt issuance costs (see  Note
     C).

          GAIN ON DRILLING BARGE CASUALTY - In June 1999, one  of
     the  Company's inland drilling barges was declared  a  total
     loss  as  a  result of a blowout and fire at a  location  in
     inland  waters approximately two miles southeast of  Amelia,
     Louisiana.   No  injuries of personnel were sustained.   The
     Company's physical damage insurance covered the loss of  the
     barge  and  as  a  result the Company  recorded  a  gain  of
     approximately $16.1 million in the third quarter of 1999.

          RECLASSIFICATION - Certain prior period amounts in  the
     consolidated financial statements have been reclassified for
     comparative purposes.  Such reclassifications had no  effect
     on  net  income  or the overall financial condition  of  the
     Company.

B)   BUSINESS COMBINATION

          On  December 1, 1998, R&B Falcon acquired  all  of  the
     outstanding  stock  of  Cliffs  Drilling  Company   ("Cliffs
     Drilling").  The  acquisition was effected  pursuant  to  an
     Agreement and Plan of Merger dated August 21, 1998,  whereby
     each  share of Cliffs Drilling's common stock was  converted
     into  1.7 shares of R&B Falcon common stock and cash in lieu
     of fractional shares. The acquisition of Cliffs Drilling was
     recorded   using   the   purchase  method   of   accounting,
     accordingly  Cliffs  Drilling's results  of  operations  are
     included with the Company's results of operations since  the
     acquisition date.

          Pro forma consolidated operating results of the Company
     and  Cliffs Drilling for the nine months ended September 30,
     1998,  assuming the Cliffs Drilling transaction occurred  as
     of  January 1, 1998, are as follows (in millions except  per
     share amounts):
                                              Nine Months Ended
                                              September 30, 1998
                                              ------------------
          Operating revenues                     $ 1,073.1
          Income from continuing operations
            before extraordinary loss                133.1
          Net income                                 127.6
          Net income per common share:
          Basic                                        .69
          Diluted                                      .69

          The  pro  forma information for the nine months  ended
     September  30,  1998  includes adjustments  for  additional
     depreciation  of  $4.0 million based  on  the  fair  market
     values  of  the  drilling  rigs  and  other  property   and
     equipment,  goodwill amortization of  $1.4  million  and  a
     reduction  in income taxes of $1.9 million. The  pro  forma
     information is not necessarily indicative of the results of
     operations had the Merger occurred on the assumed dates  or
     the results of operations for any future period.

C)   LONG-TERM OBLIGATIONS

                                                   (in millions)
                                                   -------------
     Debt obligations at December 31, 1998           $ 1,872.5
       Proceeds from debt offering (1)                 1,000.0
       Proceeds from credit facility (2)                 200.0
       Proceeds from project financing (3)               250.0
       Payment on retired credit facility (2)           (350.0)
       Payments on debt obligations other
         than credit facility                            (18.0)
       Other                                               1.1
                                                     ---------
     Debt obligations at September 30, 1999            2,955.6
       Less long-term obligations
         due within one year                             (13.0)
                                                     ---------
     Long-term obligations at September 30, 1999     $ 2,942.6
                                                     =========

     (1)  In March 1999,  the Company  issued $200.0 million of
          12.25% Senior Notes due 2006  (the  "Senior  Notes").
          Also in  March  1999,  RBF  Finance  Co.,  a  limited
          purpose finance company and a  consolidated affiliate
          of the Company, issued $400.0 million of  11%  Senior
          Secured Notes  due 2006 and $400.0 million of 11.375%
          Senior  Secured  Notes  due  2009  (collectively  the
          "Secured Notes").  The  Company borrowed the proceeds
          from  the Secured Notes from RBF Finance Co. pursuant
          to  ten  separate  loan  agreements, each of which is
          secured by one of the  Company's drilling rigs or the
          construction  contract  to  build a drilling rig. The
          Company also  guaranteed  the  payment of the Secured
          Notes issued by RBF Finance  Co.  Interest is payable
          semiannually on March 15 and September 15 on both the
          Senior  Notes  and  Secured  Notes.  As a result, the
          Company received net proceeds of approximately $971.5
          million   after  deducting  offering  expenses.   The
          Company used the proceeds to repay existing indebted-
          ness  of  $350.0  million of  long-term  obligations,
          $125.0 million of short-term obligations (see Note D)
          and  the  Company's  portion  ($81.0  million)  of an
          interim  facility  for  the construction of the Deep-
          water Frontier.  Remaining  proceeds will be used for
          planned  capital expenditures,  working  capital  and
          other general corporate purposes. As a result  of the
          repayment  of  existing  indebtedness,  the   Company
          incurred  an  extraordinary loss of $1.7 million, net
          of tax, in the first  quarter of 1999 which consisted
          of the write-off of unamortized debt issuance costs.
     (2)  During the first quarter of  1999,  the  Company drew
          the  remaining  $200.0  million  available  under its
          $350.0 million revolving credit facility. The Company
          retired such facility  during the  first quarter with
          proceeds from the Senior Notes and Secured Notes.
     (3)  In  August  1999,  the  Company  completed  a  $250.0
          million  project  financing  for the construction the
          Deepwater Nautilus in  which the Company received net
          proceeds   of   approximately   $245.5  million.  The
          financing consists of two five-year notes. The  first
          note  is  for  $200.0  million  and bears interest at
          7.31%,   with   monthly   interest  payments,   which
          commenced  in  September  1999, and monthly principal
          payments commencing in June 2000. The second  note is
          for  $50.0 million and bears interest at 9.41%,  with
          monthly   interest   payments,   which   commenced in
          September 1999, and a balloon principal payment which
          is due at maturity of  the  loan  in  May  2005. Both
          notes  are  collateralized  by the Deepwater Nautilus
          and drilling contract revenues from such rig.

D)   SHORT-TERM OBLIGATIONS

           During the first quarter of 1999, the Company drew the
     remaining  $1.6  million available under its $125.0  million
     short-term  credit  facility for  the  construction  of  the
     Deepwater  Millennium.  In March 1999,  the  Company  repaid
     such  facility  with  proceeds from  the  Senior  Notes  and
     Secured Notes.

E)   PREFERRED STOCK

          On April 22, 1999, the Company issued 300,000 shares of
     13.875%  Senior Cumulative Redeemable Preferred  Stock  (the
     "Preferred  Stock")  and  warrants  to  purchase  10,500,000
     shares of the Company's common stock at an exercise price of
     $9.50  per share (the "Warrants"). The Company received  net
     proceeds  of approximately $288.8 million from the  issuance
     of   the  Preferred  Stock  and  Warrants.   Each  share  of
     Preferred  Stock has a liquidation preference of $1,000  per
     share and one Warrant to purchase 35 shares of the Company's
     common  stock. The Warrants became exercisable  on  July  7,
     1999,  the  date in which the registration of the  Preferred
     Stock  with  the  Securities  and  Exchange  Commission  was
     declared  effective.  The  Warrants  expire  on,   and   the
     Preferred Stock must be redeemed by, May 1, 2009.

          Dividends are to be paid quarterly commencing on August
     1,  1999 and at the Company's option may be paid in cash or,
     on  or before May 1, 2004, in additional shares of Preferred
     Stock. Dividends paid through September 30, 1999 were  $11.4
     million  and were paid by the issuance of additional  shares
     of  Preferred Stock. Dividends accrued during the three  and
     nine  month  periods  ended September 30,  1999  were  $10.7
     million  and  $18.7  million,  respectively.  The  Warrants'
     initial  fair value of $159.95 per Warrant, or approximately
     $48.0  million in total, was recorded as a discount  to  the
     Preferred Stock and an addition to capital in excess of par.
     The   Warrants'  initial  fair  value  and  Preferred  Stock
     offering expenses of $9.7 million are being amortized  on  a
     straight  line  basis  over  the Warrants'  ten  year  term.
     Amortization  expense for the three and nine  month  periods
     ended  September 30, 1999 was $1.4 million and $2.5 million,
     respectively. Preferred Stock dividends and the amortization
     of  the Warrants' initial value and Preferred Stock offering
     expenses  are  deducted from net income  to  arrive  at  net
     income applicable to common stockholders.

          The  Company  may redeem the Preferred Stock  beginning
     May 1, 2004. The initial redemption price is 106.938% of the
     liquidation preference, declining thereafter to 100%  on  or
     after  May  1,  2007, in each case plus accrued  and  unpaid
     dividends to the redemption date. In addition, on or  before
     May  1, 2002, the Company may redeem shares of the Preferred
     Stock  having an aggregate liquidation preference of  up  to
     $105.0  million  at  a  price  equal  to  113.875%  of   its
     liquidation preference, plus accrued and unpaid dividends to
     the  redemption date, with proceeds from one or more  public
     equity offerings.

F)   CANCELLATION OF CONVERSION PROJECTS

          In   1998,   the   Company  cancelled  four   drillship
     conversion  projects in which the Company had  purchased  or
     committed  to purchase drilling equipment for such projects.
     The  Company  had  expected  to  use  some  of  the  surplus
     equipment on other construction and/or upgrade projects  and
     to  maintain  the  balance as inventory. A majority  of  the
     equipment   originally  ordered  was   directed   to   other
     construction  projects. However, the Company has  determined
     that  a portion of such surplus equipment is not usable  for
     other projects or as spare parts and as a result the Company
     expensed $25.6 million in the third quarter of 1999.  As  of
     September  30,  1999,  the Company had  approximately  $55.4
     million  remaining of such surplus drilling  equipment.  The
     Company  is  continually reviewing the value and utility  of
     such  equipment  and if in the future it is  determined  the
     Company  cannot  realize the recorded value of  the  surplus
     equipment, the Company could incur additional write-offs  or
     write-downs of such equipment.

          In  September  1999, the Company sold the  Peregrine  X
     (with  the  hull  being  the primary  remaining  asset)  for
     approximately  $5.8 million. As a result of  the  sale,  the
     Company  recorded  a  loss  of  $6.1million  that  has  been
     included in the cancellation of conversion projects  in  the
     Consolidated Statement of operations.

G)   SEGMENT INFORMATION

           Segment  information  for the  three  and  nine  month
     periods ended September 30, 1999 and 1998 is as follows  (in
     millions):

                                Three Months Ended  Nine Months Ended
                                  September 30,        September 30,
                                -----------------   -----------------
                                  1999      1998      1999      1998
                                -------   -------   -------   -------
   Operating revenues by segment:
     Deepwater                  $  93.6   $ 100.9   $ 270.1   $ 297.9
     Shallow water                 42.5      88.8     159.2     306.0
     Inland water                  28.7      53.7      85.5     199.7
     Engineering services
       and land operations         51.2        .1     173.4        .3
     Development                     .1        -         .2        -
     Intersegment                  (1.9)       -       (3.9)       -
                                -------   -------   -------   -------
       Total operating revenues $ 214.2   $ 243.5   $ 684.5   $ 803.9
                                =======   =======   =======   =======

   Operating income (loss) by segment:
     Deepwater                  $   3.8   $ (49.0)  $  70.5   $  38.7
     Shallow water                 (7.4)     42.6      (2.7)    168.4
     Inland water                  11.3       6.1      (2.1)     57.2
     Engineering services
       and land operations         11.3       (.1)     40.5       (.1)
     Development                    (.1)     (7.6)     (2.5)    (15.6)
                                -------   -------   -------   -------
                                   18.9      (8.0)    103.7     248.6
     Unallocated depreciation
       and amortization            (1.0)      (.2)     (2.8)      (.5)
     Unallocated general
       and administrative         (14.0)    (15.0)    (55.3)    (44.4)
     Unallocated merger expenses     -         -         -        1.0
                                -------   -------   -------   -------
     Operating income (loss)    $   3.9   $ (23.2)  $  45.6   $ 204.7
                                =======   =======   =======   =======

          Total assets by segment were as follows (in millions):

                                     September 30,  December 31,
                                         1999           1998
                                       ---------     ---------
        Deepwater                      $ 2,817.8     $ 2,079.8
        Shallow water                    1,100.4       1,038.5
        Inland water                       222.3         251.2
        Engineering services
          and land operations              182.5         159.3
        Development                         20.7          11.6
        Corporate                          569.1         173.6
                                       ---------     ---------
           Total                       $ 4,912.8     $ 3,714.0
                                       =========     =========

          In  April  1998, Cliffs Drilling was awarded a contract
     from PDVSA Exploration and Production ("PDVSA") to drill  60
     turnkey  wells in Venezuela. The drilling program  commenced
     in  March  1998 and the program was expected to extend  over
     approximately three and one-half years and was  expected  to
     utilize  7 of the Company's land drilling rigs in Venezuela.
     However,  during the first quarter of 1999, in  response  to
     the   downturn  in  the  market,  PDVSA  and   the   Company
     renegotiated  prices  for the next 14 wells  to  be  drilled
     under   this  program.  In  the  fourth  quarter  of   1999,
     negotiations were completed for the following seven wells to
     be drilled under this program at further reduced margins. As
     of  September 30, 1999, the Company had completed  24  wells
     with  11  wells  remaining to be completed.  Such  remaining
     wells  are expected to be completed by the end of the  first
     quarter  in  2000.  In regards to the remaining  25  of  the
     original 60 wells, a contractual commitment no longer exists
     and   no  assurance  can  be  given  that  such  wells  will
     ultimately be drilled.

          For the three and nine months ended September 30, 1999,
     revenues  from  PDVSA of $38.5 million and  $120.5  million,
     respectively, reported in the engineering services and  land
     operations   segment,  accounted  for   18.0%   and   17.6%,
     respectively,   of  the  Company's  consolidated   operating
     revenues.

H)   RESTRUCTURING EXPENSES

          On April 7, 1999, the Company announced that Mr. Steven
     Webster,   the  Company's  president  and  chief   executive
     officer,  had agreed to resign from these officer  positions
     effective May 31, 1999. On May 19, 1999, Mr. Paul  B.  Loyd,
     Jr., the Company's chairman of the board, was elected as the
     Company's  chief executive officer, and Mr.  Andrew  Bakonyi
     was  elected  as president and chief operating officer.  Mr.
     Webster remains a director of the Company.

          As  a  result  of  Mr.  Webster's resignation  and  the
     termination of certain other executive officers, the Company
     incurred  $6.6 million of expense in the second  quarter  of
     1999.    Such   expense   is   reported   as   general   and
     administrative   expense   in  the  Company's   Consolidated
     Statement of Operations.

I)   EARNINGS PER SHARE

          The  following table summarizes the basic  and  diluted
     per share computations for income from continuing operations
     before  extraordinary  loss for the  three  and  nine  month
     periods  ended  September 30, 1999  and  1998  (in  millions
     except per share amounts):

                                           Three Months        Nine Months
                                        Ended September 30, Ended September 30,
                                        ------------------  ------------------
                                           1999     1998       1999     1998
                                         -------  -------    -------  -------
 Numerator:
 Income (loss) from continuing
   operations before extraordinary loss  $ (22.4) $ (28.2)   $ (33.3) $  93.2
 Dividends and accretion on
   preferred stock                         (12.1)      -       (21.2)      -
                                         -------  -------    -------  -------
 Income (loss) from continuing
   operations before extraordinary
   loss - basic and diluted              $ (34.5) $ (28.2)   $ (54.5) $  93.2
                                         =======  =======    =======  =======
 Denominator:
 Weighted average common shares
   outstanding - basic                     192.8    165.3      192.6    165.2
 Outstanding stock options and
   restricted stock awards                    -        -          -       1.2
                                         -------  -------    -------  -------
 Weighted average common
   shares outstanding - diluted            192.8    165.3      192.6    166.4
                                         =======  =======    =======  =======
 Earnings per share:
 Income (loss) from continuing operations
   before extraordinary loss:
        Basic                            $  (.18) $  (.17)   $  (.28) $   .56
        Diluted                          $  (.18) $  (.17)   $  (.28) $   .56


J)   STOCK AWARDS

          During  the  first  six  months of  1999,  the  Company
     granted stock options, with respect to the Company's  common
     stock,  of  approximately  7.4  million  shares  to  certain
     employees of the Company and approximately .5 million shares
     to  non-employee  members of the board  of  directors.  Such
     options vest at varying times from six months to three years
     and were granted at prices ranging from $6.15625 to $10.0625
     per share (the market price on the date of grants). All such
     options expire ten years from the date of grant.

          In  the second quarter of 1999, a wholly-owned indirect
     subsidiary of the Company made awards of restricted stock of
     the  subsidiary to certain directors, officers and employees
     of  the  Company, as well as awards of restricted  stock  to
     certain former directors of Reading & Bates Corporation  who
     served  in  such capacity prior to completion of the  merger
     with  Falcon Drilling Company, Inc. in December 1997.   Such
     award  comprised of approximately 13.75% of the  outstanding
     common  stock  of such subsidiary.  The awards  vested  upon
     issuance,  but  are  subject  to  restrictions  on  sale  or
     transfer  for a period of six months following the  date  of
     the award. As a result, the Company incurred $1.5 million of
     expense  in  the  second  quarter of  1999  which  has  been
     included in general and administrative expenses.



               REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS


To the Board of Directors and Stockholders
R&B Falcon Corporation


     We  have reviewed the accompanying consolidated balance sheet  of
R&B Falcon Corporation (a Delaware corporation) and Subsidiaries as of
September  30, 1999, the related consolidated statement of  operations
for the three and nine month periods ended September 30, 1999 and 1998
and  the  related consolidated statement of cash flows  for  the  nine
months  ended September 30, 1999 and 1998. These financial  statements
are the responsibility of the Company's management.

     We  conducted our review in accordance with standards established
by  the  American Institute of Certified Public Accountants.  A review
of  interim  financial  information consists principally  of  applying
analytical  procedures  to  financial data  and  making  inquiries  of
persons  responsible  for  financial and accounting  matters.   It  is
substantially less in scope than an audit conducted in accordance with
generally accepted auditing standards, the objective of which  is  the
expression of an opinion regarding the financial statements taken as a
whole.  Accordingly, we do not express such an opinion.

     Based   on   our  review,  we  are  not  aware  of  any  material
modifications that should be made to the financial statements referred
to  above  for  them  to  be  in conformity  with  generally  accepted
accounting principles.



/s/Arthur Andersen LLP

Houston, Texas
October 29, 1999



Item  2.   Management's  Discussion  and  Analysis  of  Financial
Condition and Results of Operations

Industry Conditions

     Activity  in the contract drilling industry and related  oil
service  businesses has deteriorated significantly  in  the  past
year  due  to  decreased worldwide demand for drilling  rigs  and
related  services resulting from a substantial decline  in  crude
oil prices experienced in 1998 through the first quarter of 1999.
In  recent months, crude oil prices have recovered somewhat,  but
there  can  be  no  assurance that demand for drilling  rigs  and
related  services  will  increase. The  financial  condition  and
results   of  operations  of  the  Company  and  other   drilling
contractors are dependent upon the price of oil and natural  gas,
as  demand  for  their services is primarily dependent  upon  the
level  of  spending  by  oil and gas companies  for  exploration,
development  and production activities.  In late 1998  and  early
1999,  lower crude oil prices affected exploration and production
spending,   which  led  to  significantly  lower   dayrates   and
utilization for offshore drilling companies, particularly in  the
U.S.  Gulf  of  Mexico.  Crude oil and natural  gas  prices  have
continued to fluctuate over the last several years. If crude  oil
prices  decline from current levels, or a weakness in  crude  oil
prices continued for an extended period, there could be a further
deterioration in both rig utilization and dayrates.

     Utilization  of  the Company's domestic  jack-up  fleet  has
declined from approximately 75% in the third quarter of  1998  to
approximately 47% in the third quarter of 1999, and dayrates have
declined  from an average of $33,000 during the third quarter  of
1998  to an average of $12,000 during the third quarter of  1999.
Dayrates for the Company's domestic barge drilling rig fleet have
not  declined  materially, but utilization of the fleet  declined
from   approximately  52%  in  the  third  quarter  of  1998   to
approximately 27% in the third quarter of 1999. As a result,  the
Company  experienced  a decline in operating  revenues  from  the
first  nine months of 1998 to the first nine months of 1999  (see
Results of Operations below).

Results of Operations

          NINE MONTHS ENDED SEPTEMBER 30, 1999 COMPARED
             TO NINE MONTHS ENDED SEPTEMBER 30, 1998

     The  Company's net loss for the nine months ended  September
30,  1999  was $35.0 million ($.29 loss per diluted  share  after
preferred  stock  dividends  and  accretion  of  $21.2   million)
compared  with  net  income of $87.7 million  ($.53  per  diluted
share) for the same period of 1998.  Included in the results  for
the  nine  months  ended September 30, 1999 was  a  $1.7  million
extraordinary loss due to the extinguishment of debt obligations.
Included  in the results for the nine months ended September  30,
1998   was  a  $22.0  million  extraordinary  loss  due  to   the
extinguishment  of debt obligations and $16.5 million  of  income
related to discontinued operations.

     Operating revenues are primarily a function of dayrates  and
utilization.  Operating revenues decreased for  the  nine  months
ended  September  30, 1999 compared to the same  period  in  1998
despite  a  $225.4  million revenue increase generated  from  the
purchase  of  Cliffs  Drilling  in  December  1998.  The  revenue
decrease  is  primarily due to lower utilization and dayrates  in
the   shallow   water  and  inland  water  segments.    Partially
offsetting  the decrease was $7.2 million of revenue recorded  in
the first quarter of 1999 for the early termination of a drilling
contract  for  one of its third-generation semisubmersibles.  For
the  nine  months  ended September 30, 1999,  revenues  from  one
customer  in  Venezuela  (PDVSA Exploration  and  Production)  of
$120.5  million,  reported in the engineering services  and  land
operations  segment, accounted for 17.6% of the  Company's  total
operating revenues.  See Liquidity and Capital Resources -  Other
below.

     Operating   expenses   do  not  necessarily   fluctuate   in
proportion   to  changes  in  operating  revenues  due   to   the
continuation of personnel on board and equipment maintenance when
the  Company's  units are stacked.  It is only  during  prolonged
stacked periods that the Company is able to significantly  reduce
labor  costs  and  equipment maintenance expense.   Additionally,
labor  costs  fluctuate due to the geographic diversification  of
the  Company's units and the mix of labor between expatriates and
nationals  as  stipulated in the contracts.   In  general,  labor
costs  increase  primarily  due  to  higher  salary  levels   and
inflation.   Equipment maintenance expenses  fluctuate  depending
upon the type of activity the unit is performing and the age  and
condition  of the equipment.  Scheduled maintenance and overhauls
of  equipment  are  performed on the basis  of  number  of  hours
operated  in accordance with the Company's preventive maintenance
program.  Operating expenses for a unit are typically deferred or
capitalized   as  appropriate  during  periods  of  mobilization,
contract  preparation,  major  upgrades  or  conversions   unless
corresponding revenue is recognized, in which case such costs are
expensed as incurred.

     The increase in operating expenses for the nine months ended
September  30,  1999 as compared to the same period  in  1998  is
primarily  due  to  the purchase of Cliffs Drilling  in  December
1998, partially offset by lower operating expenses fleet wide due
to  lower utilization and the cold stacking of some of the units.
Included as a reduction of operating expenses for the nine months
ended  September 30, 1999 is an $8.3 million gain in the  shallow
water  segment  due to the W.D. Kent derrick equipment  casualty.
Such  casualty occurred in the third quarter of 1997 as a  result
of  a blowout and fire.  Also included in operating expenses  for
the  nine  months  ended September 30, 1999 in the  inland  water
segment  is  $2.4 million of expense relating to  a  reserve  for
potentially uncollectable receivables and a gain of $16.1 million
due  to  the  total loss of a drilling barge as  a  result  of  a
blowout and fire.

     Cancellation of conversion projects expense of $31.7 million
for  the  nine  months ended September 30,1999 consisted  of  the
write-down of $25.6 million of surplus equipment relating to  the
four   drillship  conversion  projects  which  the  Company   had
cancelled  in  1998 and a $6.1 million loss on the  sale  of  the
Peregrine X.

     Depreciation and amortization expense increased for the nine
months ended September 30, 1999 as compared to the same period in
1998.  Such increase is primarily due to the purchase  of  Cliffs
Drilling  in  December 1998 and the purchase  and/or  significant
upgrades of offshore and inland marine vessels during 1998.

     General  &  administrative expense increased  for  the  nine
months ended September 30, 1999 as compared to the same period in
1998.   Such  increase  is  due  to  $6.6  million  of  executive
termination   expense,   $1.5  million  of   employee   incentive
compensation  expense  and the purchase  of  Cliffs  Drilling  in
December 1998.

     Interest  expense  increased  for  the  nine  months   ended
September  30,  1999  as  compared to the  same  period  in  1998
primarily due to increased average debt balances outstanding  and
increased  average interest rates, partially offset by  increased
capitalized interest related to significant upgrade and new build
projects.

     Interest   income  increased  for  the  nine  months   ended
September 30, 1999 as compared to the same period in 1998 due  to
increased  cash  and  short-term investment balances  during  the
period.

     Income  from equity investees plus related income  increased
for  the nine months ended September 30, 1999 as compared to  the
same  period  in  1998 due to the Deepwater  Pathfinder  and  the
Deepwater  Frontier  both of which commenced  operations  in  the
latter part of the first quarter of 1999.

     Income taxes resulted in a benefit for the nine months ended
September 30, 1999 as compared to an expense for the same  period
in  1998 primarily due to the incurrence of losses by the Company
in 1999.

     Income  from  discontinued operations for  the  nine  months
ended  September  30, 1998 was the reversal of accrued  estimated
losses   from  operations  until  disposal  resulting  from   the
accounting   requirements  for  recontinuance   of   discontinued
operations.

     Extraordinary losses for the nine months ended September 30,
1999  of  $1.7 million, after a tax benefit of $.9 million,  (see
Note C of Notes to Interim Consolidated Financial Statements) and
for  the  nine months ended September 30, 1998 of $22.0  million,
after  a  tax  benefit  of $11.9 million, are  both  due  to  the
extinguishment of prior debt obligations in connection  with  the
issuance of new debt obligations.


         THREE MONTHS ENDED SEPTEMBER 30, 1999 COMPARED
            TO THREE MONTHS ENDED SEPTEMBER 30, 1998

     The  Company's net loss for the three months ended September
30,  1999  was $22.4 million ($.18 loss per diluted  share  after
preferred  stock  dividends  and  accretion  of  $12.1   million)
compared with a net loss of $20.5 million ($.12 loss per  diluted
share) for the same period of 1998.

     Operating revenues are primarily a function of dayrates  and
utilization.  Operating revenues decreased for the  three  months
ended  September  30, 1999 compared to the same  period  in  1998
despite  a  $62.0  million revenue increase  generated  from  the
purchase  of  Cliffs  Drilling in  December  1998.   The  revenue
decrease  is  primarily due to lower utilization and dayrates  in
the shallow water and inland water segments. For the three months
ended September 30, 1999, revenues from one customer in Venezuela
(PDVSA Exploration and Production) of $38.5 million, reported  in
the  engineering services and land operations segment,  accounted
for  18.0%  of  the  Company's  total  operating  revenues.   See
Liquidity and Capital Resources - Other below.

     Operating   expenses   do  not  necessarily   fluctuate   in
proportion   to  changes  in  operating  revenues  due   to   the
continuation of personnel on board and equipment maintenance when
the  Company's  units are stacked.  It is only  during  prolonged
stacked periods that the Company is able to significantly  reduce
labor  costs  and  equipment maintenance expense.   Additionally,
labor  costs  fluctuate due to the geographic diversification  of
the  Company's units and the mix of labor between expatriates and
nationals  as  stipulated in the contracts.   In  general,  labor
costs  increase  primarily  due  to  higher  salary  levels   and
inflation.   Equipment maintenance expenses  fluctuate  depending
upon the type of activity the unit is performing and the age  and
condition  of the equipment.  Scheduled maintenance and overhauls
of  equipment  are  performed on the basis  of  number  of  hours
operated  in accordance with the Company's preventive maintenance
program.  Operating expenses for a unit are typically deferred or
capitalized   as  appropriate  during  periods  of  mobilization,
contract  preparation,  major  upgrades  or  conversions   unless
corresponding revenue is recognized, in which case such costs are
expensed as incurred.

     The  decrease  in  operating expenses for the  three  months
ended  September 30, 1999 as compared to the same period in  1998
is  primarily due to lower operating expenses fleet wide  due  to
lower  utilization and the cold stacking of some units, partially
offset by the purchase of Cliffs Drilling in December 1998.  Also
included  as  a  reduction in operating expenses  for  the  three
months ended September 30, 1999 is a gain of $16.1 million in the
inland water segment due to the total loss of a drilling barge as
a result of a blowout and fire.

     Cancellation of conversion projects expense of $31.7 million
for  the  three months ended September 30,1999 consisted  of  the
write-down of $25.6 million of surplus equipment relating to  the
four   drillship  conversion  projects  which  the  Company   had
cancelled  in  1998 and a $6.1 million loss on the  sale  of  the
Peregrine X.

      Depreciation  and  amortization expense increased  for  the
three  months ended September 30, 1999 as compared  to  the  same
period in 1998. Such increase is primarily due to the purchase of
Cliffs   Drilling  in  December  1998  and  the  purchase  and/or
significant upgrades of offshore and inland marine vessels during
1998.

     General  &  administrative expense decreased for  the  three
months ended September 30, 1999 as compared to the same period in
1998. Such decrease is primarily due to higher employee incentive
expense in 1998.

     Interest  expense  increased  for  the  three  months  ended
September  30,  1999  as  compared to the  same  period  in  1998
primarily due to increased average debt balances outstanding  and
increased  average interest rates, partially offset by  increased
capitalized interest related to significant upgrade and new build
projects.

     Interest  income  increased  for  the  three  months   ended
September 30, 1999 as compared to the same period in 1998 due  to
increased  cash  and  short-term investment balances  during  the
period.

     Income  from equity investees plus related income  increased
for  the three months ended September 30, 1999 as compared to the
same  period  in  1998 due to the Deepwater  Pathfinder  and  the
Deepwater  Frontier  both of which commenced  operations  in  the
latter part of the first quarter of 1999.

     Income  tax  benefit  increased for the three  months  ended
September 30, 1999 as compared to the same period in 1998 despite
a  decrease  in the Company's pretax loss primarily  due  to  the
Company  recording the tax benefit of the current losses at  full
statutory rates.

     Income  from  discontinued operations for the  three  months
ended  September  30, 1998 was the reversal of accrued  estimated
losses   from  operations  until  disposal  resulting  from   the
accounting   requirements  for  recontinuance   of   discontinued
operations.

Liquidity and Capital Resources

     Cash Flows

     Net cash provided by operating activities was $120.4 million
for  the nine months ended September 30, 1999 compared to  $236.0
million  for  the same period in 1998. The decrease is  primarily
due  to  the decrease in net income as a result of lower dayrates
and  utilization,  offset by the changes  in  the  components  of
working capital.

     Net cash used in investing activities was $880.3 million for
the  nine  months  ended September 30, 1999  compared  to  $878.8
million  for  the same period in 1998.  The increase  is  due  to
capital   expenditures,  primarily  related  to  the  significant
capital  projects  involving  the  construction  or  upgrade   of
drilling  units,  the  increase  in  cash  dedicated  to  capital
projects  which  will primarily be used for capital  expenditures
and  principal  and interest payments (see Note  A  of  Notes  to
Interim Consolidated Financial Statements), the purchase of short-
term investments, and investments made in joint venture projects.
During the nine months ended September 30, 1999, the Company made
advances  to  the  joint  venture  that  operates  the  Deepwater
Frontier  of  $146.7 million of which $123.3 million  was  repaid
from  proceeds   from  project financing. See Project  Financings
below.

     Net  cash  provided  by  financing activities  was  $1,228.3
million for the nine months ended September 30, 1999 compared  to
$655.0 million for the same period in 1998.  The increase is  due
to  proceeds received from the $1.0 billion debt offering, $300.0
million preferred stock offering and the $250.0 million financing
for  the  construction of the Deepwater Nautilus, offset  by  the
repayment of certain existing debt obligations (see below).

    Debt Issuance

     On March 26, 1999, the Company issued three series of senior
notes  with  an aggregate principal amount of $1.0  billion.  The
senior  notes  consisted of $400.0 million of 11% senior  secured
notes  due  2006, $400.0 million of 11.375% senior secured  notes
due  2009  and  $200.0 million of 12.25% senior  notes  due  2006
(collectively,  the  "Senior Notes"). The $800.0  million  senior
secured notes are collateralized by ten of the Company's drilling
rigs.  As  a  result,  the  Company  received  net  proceeds   of
approximately  $971.5 million after deducting offering  expenses.
The  Company used the proceeds to repay existing indebtedness  of
approximately $556.0 million and the remainder will  be  used  to
acquire,  construct,  repair and improve drilling  rigs  and  for
general  corporate  purposes.  See Note C  of  Notes  to  Interim
Consolidated Financial Statements.

     Preferred Stock Issuance

     On  April  22,  1999, the Company issued 300,000  shares  of
13.875%   Senior  Cumulative  Redeemable  Preferred  Stock   (the
"Preferred Stock") and warrants to purchase 10,500,000 shares  of
the  Company's  common stock at an exercise price  of  $9.50  per
share  (the  "Warrants"). The Company received  net  proceeds  of
approximately  $288.8 million from the issuance of the  Preferred
Stock  and  Warrants.   Each  share  of  Preferred  Stock  has  a
liquidation  preference of $1,000 per share and  one  Warrant  to
purchase  35 shares of the Company's common stock.  The  Warrants
became  exercisable  on  July 7, 1999,  the  date  in  which  the
registration  of  the  Preferred Stock with  the  Securities  and
Exchange Commission was declared effective.  The Warrants  expire
on, and the Preferred Stock must be redeemed by, May 1, 2009.

     Dividends  are to be paid quarterly commencing on August  1,
1999  and at the Company's option may be paid in cash or,  on  or
before  May  1,  2004, in additional shares of  Preferred  Stock.
Dividends paid through September 30, 1999 were $11.4 million  and
were  paid  by  the  issuance of additional shares  of  Preferred
Stock.  Dividends accrued during the three and nine month periods
ended  September 30, 1999 were $10.7 million and  $18.7  million,
respectively.  The Warrants' initial fair value  of  $159.95  per
Warrant, or approximately $48.0 million in total, was recorded as
a  discount to the Preferred Stock and an addition to capital  in
excess  of  par.  The Warrants' initial fair value and  Preferred
Stock offering expenses of $9.7 million are being amortized on  a
straight   line   basis  over  the  Warrants'  ten   year   term.
Amortization  expense for the three and nine month periods  ended
September   30,   1999  was  $1.4  million  and   $2.5   million,
respectively.  Preferred Stock dividends and the amortization  of
the Warrants' initial value and Preferred Stock offering expenses
are  deducted from net income to arrive at net income  applicable
to common stockholders.

     The Company may redeem the Preferred Stock beginning May  1,
2004. The initial redemption price is 106.938% of the liquidation
preference, declining thereafter to 100% on or after May 1, 2007,
in  each case plus accrued and unpaid dividends to the redemption
date.  In  addition, on or before May 1, 2002,  the  Company  may
redeem   shares  of  the  Preferred  Stock  having  an  aggregate
liquidation  preference of up to $105.0 million at a price  equal
to  113.875%  of  its liquidation preference,  plus  accrued  and
unpaid  dividends to the redemption date, with proceeds from  one
or more public equity offerings.

     Project Financings

     In  August  1999,  the Company completed  a  $250.0  million
project financing for the construction the Deepwater Nautilus  in
which  the Company received net proceeds of approximately  $245.5
million.   The  financing consists of two  five-year  notes.  The
first  note  is for $200.0 million and bears interest  at  7.31%,
with  monthly  interest  payments, which commenced  in  September
1999,  and  monthly principal payments commencing in  June  2000.
The second note is for $50.0 million and bears interest at 9.41%,
with  monthly  interest  payments, which commenced  in  September
1999, and a balloon principal payment which is due at maturity of
the  loan  in  May  2005.  Both notes are collateralized  by  the
Deepwater Nautilus and drilling contract revenues from such rig.

     In  September  1999,  the  limited liability  company  which
operates  the  Deepwater Frontier, which  is  owned  60%  by  the
Company  and  40%  by Conoco completed a $270.0  million  project
financing  in the form of a synthetic lease. The synthetic  lease
is  collateralized by the drillship Deepwater Frontier,  drilling
contract revenues from such drillship and a $50.0 million  letter
of  credit which was secured by the Company (see Note A of  Notes
to  Interim Consolidated Financial Statements).  Proceeds of such
financing  were  used in part to repay advances of  approximately
$123.3  million  which  the  Company  had  made  to  the  limited
liability company.

     Capital Expenditure Commitments

     The  Company  has numerous projects completed or  under  way
involving  the  construction or upgrade of drilling  units.   The
following is a list of such projects:

                           Water                                   Expenditures
                           Depth     Estimated           Contract     Through
                         Capability  Delivery     Term  Estimated  September 30,
                          (feet)       Date     (years)    Cost        1999
                          ------    ---------   ------- ---------  ------------
 Drillships:                                               (in millions)
 DEEPWATER PATHFINDER (1) 10,000    Delivered      5    $   280.0  $   271.8
 DEEPWATER FRONTIER (2)   10,000    Delivered     2.5       265.0      254.8
 DEEPWATER MILLENNIUM     10,000    Delivered     4 (3)     280.0      269.0
 DEEPWATER DISCOVERY      10,000 3rd quarter 2000  3        305.0      130.6
 DEEPWATER EXPEDITION     10,000    Delivered      6        230.0      218.4
 (formerly PEREGRINE IV)
 PEREGRINE VII (4)         7,200 4th quarter 1999  -        305.0      268.8
 Semisubmersibles:
 FALCON 100 (5)            2,400    Delivered      -        125.0      124.1
 DEEPWATER NAUTILUS        8,000 4th quarter 1999  5        335.0      228.4
 (formerly RBS8M)
 DEEPWATER HORIZON        10,000 4th quarter 2000  3        335.0       40.2
 (formerly RBS8D)                                       ---------  ---------
                                                        $ 2,460.0  $ 1,806.1
                                                        =========  =========
-------------------
 (1)  The  Company  owns a 50% interest in the limited liability
      company that operates this drillship.
 (2)  The  Company owns a 60% interest in the limited  liability
      company  that operates this drillship.  Under the drilling
      contract  for  this drillship, the Company and Conoco have
      each committed to use this rig for two and one half of the
      first  five  years  after  delivery.  Both  Conoco and the
      Company have used the  rig to drill a well and the Company
      has contracted with Petrobras  for a two-year contract for
      the rig offshore Brazil.
 (3)  Statoil will use this drillship for the first three  years
      after delivery, then the Company  will  alternate  use  of
      the  rig  with  Statoil  every six months for the next two
      years.
 (4)  On April 15,  1999,  BP  Amoco cancelled its contract with
      the  Company  for  this  drillship  in accordance with the
      contract's  terms  because  the  drillship  had  not  been
      delivered on time. The Company is currently marketing this
      rig for work.
 (5)  In May 1999, Petrobras cancelled the drilling contract for
      the  Falcon  100  based  on  its  interpretation  of   the
      cancellation  provisions of the contract. The Company does
      not believe that  Petrobras  has  the right to cancel such
      contract.  The Company  has  engaged  Brazilian counsel to
      evaluate  the  Company's  rights  under  the contract. The
      Company is currently marketing this rig for work.

     The  Company's construction and upgrade projects are subject
to  the  risks of delay and cost overruns inherent in  any  large
construction   project,   including   shortages   of   equipment,
unforeseen   engineering   problems,  work   stoppages,   weather
interference,  unanticipated  cost  increases  and  shortages  of
materials or skilled labor.  Significant cost overruns or  delays
would   adversely  affect  the  Company's  liquidity,   financial
condition and results of operations.  Delays could also result in
penalties  under, or the termination of, certain of the long-term
contracts under which the Company plans to operate these rigs.

     Liquidity

     During  the first nine months of 1999, the Company  received
net  proceeds of approximately $1.5 billion from the issuance  of
the  Senior Notes, Preferred Stock and the project financing  for
the  construction of the Deepwater Nautilus. The Company used the
proceeds  to repay existing indebtedness of approximately  $556.0
million  and  the  remainder will be used to acquire,  construct,
repair  and  improve  drilling rigs  and  for  general  corporate
purposes.  Also, the Company is considering certain asset  sales,
including the Seillean and Iolair. As of September 30, 1999,  the
Company  had $862.8 million of cash, cash equivalents, short-term
investments and cash dedicated to capital projects.

     The  Company  has  substantially completed or  is  currently
constructing  or significantly upgrading nine deepwater  drilling
rigs.  The  Company estimates its capital expenditure commitments
on  these projects and its other routine capital expenditures for
the  remainder  of  1999 and 2000 to total  approximately  $663.0
million.

     The  Company believes its projected level of cash flows from
operations, which assumes an industry recovery in 2000,  cash  on
hand and potential asset sales will be sufficient to satisfy  the
Company's short-term and long-term working capital needs, planned
investments, capital expenditures, debt, lease and other  payment
obligations.  If the Company were to build excess cash  balances,
it  will  most likely use a portion of the excess to retire  debt
obligations.

     Other

     In   December  1998,  Mobil  North  Sea  Limited   ("Mobil")
purportedly terminated its contract for use of the Company's Jack
Bates  semisubmersible rig based on failure of two mooring  lines
while  anchor  recovery operations at a Mobil well  location  had
been  suspended during heavy weather.  The contract provided  for
Mobil's use of the rig at a dayrate of approximately $115,000 for
the  primary term through January 1999 and approximately $200,000
for  the extension term from February 1999 through December 2000.
The  Company  does  not  believe that  Mobil  had  the  right  to
terminate this contract.  The Company has recontracted  the  Jack
Bates  to  Mobil  for one well at a dayrate of $156,000  and  for
another well at a dayrate of $69,000. These contracts are without
prejudice  to  either  party's rights in  the  dispute  over  the
termination  of the original contract.  The Company has  filed  a
request  for  arbitration with the London Court of  International
Arbitration.

     In  April 1998, Cliffs Drilling was awarded a contract  from
PDVSA  Exploration and Production ("PDVSA") to drill  60  turnkey
wells in Venezuela. The drilling program commenced in March  1998
and  the program was expected to extend over approximately  three
and one-half years and was expected to utilize 7 of the Company's
land  drilling  rigs  in  Venezuela. However,  during  the  first
quarter of 1999, in response to the downturn in the market, PDVSA
and  the Company renegotiated prices for the next 14 wells to  be
drilled  under  this  program. In the  fourth  quarter  of  1999,
negotiations were completed for the following seven wells  to  be
drilled  under  this program at further reduced  margins.  As  of
September  30, 1999, the Company had completed 24 wells  with  11
wells  remaining  to  be  completed.  Such  remaining  wells  are
expected to be completed by the end of the first quarter in 2000.
In  regards  to  the  remaining 25 of the original  60  wells,  a
contractual commitment no longer exists and no assurance  can  be
given that such wells will ultimately be drilled.

Year 2000

     The  Company  has  focused its Year 2000 ("Y2K")  compliance
efforts  in three areas: information technology systems, embedded
technology  systems and systems used by third parties with  which
the  Company  has  a substantial relationship.  The  Company  has
completed  its investigation and evaluation of these systems  and
has   substantially  completed  the  process  of  correcting  the
identified problems.

     Information Technology Systems.  The testing and  validation
phase for information technology systems includes testing of each
individual information technology system that could be  affected.
Through  the  information technology systems  investigation,  the
Company  determined  that  the accounting  software  utilized  by
Cliffs Drilling required substantial modification or replacement.
The  domestic accounting software was replaced with Y2K compliant
software  during the fourth quarter of 1998 at a  total  cost  of
approximately   $2.3   million,  the  majority   of   which   was
capitalized.  Software replacements in Cliffs Drilling's  foreign
offices  have  been  completed during 1999 at  a  total  cost  of
approximately  $.2 million.  The Company additionally  determined
that  certain  of its remaining accounting software  and  systems
were  not  Y2K  compliant.  Company personnel have completed  the
majority  of  these modifications and the remaining non-compliant
software will be phased out.

     Embedded  Technology Systems.  Embedded  technology  systems
primarily  relate  to  the  technology  on  board  the  Company's
drilling  units.   The  testing  and  validation  phase  for  the
embedded technology systems includes testing each high and medium
priority system, which consists primarily of all systems  located
on  drilling  units included in the Deepwater and  Shallow  Water
Divisions.   For  systems on board the Inland  Water  units,  the
Company  completed on site testing and received  confirmation  of
Y2K compliance from the manufacturers of these systems.

     To facilitate the embedded technology systems investigation,
the   Company   hired  an  additional  employee   whose   primary
responsibility  is  the evaluation of these  technology  systems.
This evaluation was completed in the second quarter of 1999.  The
equipment evaluated did not demonstrate any equipment failures or
other   significant  Y2K  compliance  issues.   Based  on   these
evaluations, the Company estimates that the total cost to replace
or upgrade non-compliant embedded technology systems will be less
than $.5 million.

     Third  Party  Systems.   The  Company  is  contacting  third
parties  with which it has substantial relationships to determine
what actions may be needed to mitigate its risks relating to  the
effects  third party technology failures may have on the Company.
The  Company  sent out requests for information  to  all  of  its
electrical  and  electronic contractors in August  1998  and  has
received  information  from  85%  of  them  regarding  their  Y2K
efforts.  Questionnaires were sent in the first quarter  of  1999
to  all  of  the  Company's suppliers and  third  party  vendors.
Based on the responses received thus far, it is evident that  our
contractors and suppliers are placing a priority on achieving Y2K
compliance.   In  the  event  the Company's  major  suppliers  or
customers  do not successfully and timely achieve Y2K compliance,
the Company's operations could be adversely affected.

     Contingency Plans.  The Company is continuing to monitor, on
an  ongoing basis, the problems and uncertainties associated with
Y2K  issues  and their potential consequences.  The  Company  has
accepted  the position that there will be some finite  levels  of
risk that some systems will not fully function after Y2K.  A risk-
based   approach  has  identified  those  items  where   absolute
compliance  is  not  guaranteed by the vendor  or  supplier,  and
contingency  plans are being developed to deal  with  any  safety
related possibilities.  These contingency plans were completed in
the second quarter of 1999.

     In addition to the safety related contingency plans directly
related  to  uncertainties with equipment, the Company  maintains
plans  for  all critical safety equipment as part of  its  normal
business.   These  critical  safety  plans  are  currently  being
modified  to fit the Y2K criteria.  These modifications primarily
include:  having  personnel standing  by  at  critical  equipment
stations before the specified time changes, having no crane lifts
in  operation  and  having all drilling units in  a  non-drilling
mode.  Failure  of  this type of equipment,  whether  related  to
normal  operational risk or Y2K problems, must  be  managed  with
contingency  planning.  For this reason, additional risk  due  to
the Y2K issue does not measurably affect the risk to personnel or
equipment beyond the normal failure due to other causes.

Other

      On  April  7, 1999, the Company announced that  Mr.  Steven
Webster, the Company's president and chief executive officer, had
agreed  to resign from these officer positions effective May  31,
1999.  On  May  19,  1999, Mr. Paul B. Loyd, Jr.,  the  Company's
chairman  of  the  board,  was elected  as  the  Company's  chief
executive  officer,  and  Mr.  Andrew  Bakonyi  was  elected   as
president  and  chief operating officer. Mr.  Webster  remains  a
director of the Company.

     As a result of Mr. Webster's resignation and the termination
of  certain  other executive officers, the Company incurred  $6.6
million  of expense in the second quarter of 1999.  Such  expense
is   reported  as  general  and  administrative  expense  in  the
Company's  Consolidated Statement of Operations.  See Results  of
Operations above.

     In  June  1999, one of the Company's inland drilling  barges
was declared a total loss as a result of a blowout and fire at  a
location  in  inland waters approximately two miles southeast  of
Amelia, Louisiana.  No injuries of personnel were sustained.  The
Company's physical damage insurance covered the loss of the barge
and  as  a  result  the Company recorded a gain of  approximately
$16.1  million  in  the third quarter of 1999.   See  Results  of
Operations above.

     In  1998,  the  Company cancelled four drillship  conversion
projects  in  which  the Company had purchased  or  committed  to
purchase  drilling equipment for such projects. The  Company  had
expected   to  use  some  of  the  surplus  equipment  on   other
construction and/or upgrade projects and to maintain the  balance
as  inventory. A majority of the equipment originally ordered was
directed to other construction projects. However, the Company has
determined that a portion of such surplus equipment is not usable
for  other projects or as spare parts and as a result the Company
expensed  $25.6  million  in the third quarter  of  1999.  As  of
September  30, 1999, the Company had approximately $55.4  million
remaining  of  such surplus drilling equipment.  The  Company  is
continually reviewing the value and utility of such equipment and
if  in the future it is determined the Company cannot realize the
recorded value of the surplus equipment, the Company could  incur
additional  write-offs  or write-downs of  such  equipment.   See
Results of Operations above.

     In  September 1999, the Company sold the Peregrine  X  (with
the  hull  being  the primary remaining asset) for  approximately
$5.8  million.  As a result of the sale, the Company  recorded  a
loss of $6.1 million  that  has been included in the cancellation
of  conversion   projects  in  the  Consolidated   Statement   of
operations.  See Results of Operations above.

     In   October   1999,  the  drillship  Deepwater   Pathfinder
sustained  damage when 20 joints of the vessel's  riser  and  its
blowout  prevention equipment fell to the seabed in approximately
7,000   feet  of  water  while  preparing  to  continue  drilling
operations in the Gulf of Mexico offshore Louisiana. None of  the
personnel  aboard  the  drillship  sustained  any  injury.    The
drillship's top drive and travelling equipment sustained  damage,
and an investigation is underway to ascertain the full extent  of
damages sustained. The marine integrity of the drillship was  not
affected.   No  environmental damage resulted from the  incident.
The  Company believes that the physical damage insurance coverage
and  business  interruption  insurance  maintained  by  Deepwater
Drilling L.L.C. on the drillship is adequate and that the damages
resulting from such loss will not have a material adverse  impact
on the Company's business or financial condition.

Item 3.  Quantitative and Qualitative Disclosures About Market
Risk

  The  Company  is  exposed  to changes in  interest  rates  with
respect to its debt obligations.  The following table sets  forth
the  average  interest  rate for the scheduled  maturity  of  the
Company's  debt obligations as of September 30, 1999 (dollars  in
millions):

                                                                   Estimated
                                                                      Fair
                                                                    Value at
                                                                  September 30,
             1999   2000   2001   2002    2003  Thereafter  Total      1999
            ------ ------ ------ ------ ------- ---------- --------- ---------
Fixed
  Rate Debt:
Amount      $   -  $ 21.3 $ 41.1 $ 38.6 $ 591.6 $ 2,264.2  $ 2,956.8 $ 2,834.3
Average
 interest
 rate           -  7.359% 7.619% 7.310%  8.268%    9.334%     9.056%
Variable
  Rate Debt:
Amount      $  1.4 $   -  $   -  $   -  $    -  $      -   $     1.4 $     1.4
Average
 interest
 rate       7.000%     -      -      -       -         -         -


                   PART II - OTHER INFORMATION

Item 1.  Legal Proceedings

     The Company is involved in various legal actions arising  in
the  normal  course of business.  After taking into consideration
the  evaluation  of  such  actions by counsel  for  the  Company,
management  is of the opinion that the outcome of all  known  and
potential claims and litigation will not have a material  adverse
effect  on  the  Company's  business  or  consolidated  financial
position or results of operations.

Item 6.  Exhibits and Reports on Form 8-K

 (a)  Exhibits

       4    - Form  of  Registrant's  13-7/8%  Senior  Cumulative
              Redeemable Preferred Stock Certificate.

      10.1  - Construction   Supervisory  Agreement  dated as  of
              August   12,  1999  among   RBF   Exploration  Co.,
              as    Owner   and   RBF  Exploration   II  Inc., as
              Construction Supervisor.

      10.2  - Note  Purchase Agreement, Deepwater Nautilus, dated
              as of August 12, 1999, RBF Exploration Co.

      10.3  - Operation  and Maintenance Agreement executed as of
              August   12,  1999  by   and   between  R&B  Falcon
              Corporation  and  RBF Exploration Co.

      10.4  - Performance  Guarantee dated as of August 12,  1999
              made by R&B  Falcon  Corporation  in  favor  of RBF
              Exploration  Co.,  Travelers   Casualty  and Surety
              Company   of   America,  American  Home   Assurance
              Company,   and    Chase   Bank  of  Texas, National
              Association, as Trustee.

      10.5  - First Preferred Ship Mortgage,  Deepwater Nautilus,
              made by RBF  Exploration Co.  in   favor  of  Chase
              Bank  of Texas, National  Association, as Indenture
              Trustee.

      10.6  - Trust Indenture and  Security  Agreement  dated  as
              of  August  12,  1999, between RBF Exploration Co.,
              a Nevada corporation,  and  Chase  Bank  of  Texas,
              National Association as Trustee.

      10.7  - Assignment of Drilling  Contract dated as of August
              12, 1999, by RBF  Exploration  Co.  to  Chase  Bank
              of  Texas,  National Association, as trustee.

      10.8  - R&B  Falcon  Guaranty  from  R&B Falcon Corporation
              dated as of August 31, 1999.

      10.9  - Participation   Agreement  dated  as  of August 31,
              1999 among  Deepwater Drilling II L.L.C., Deepwater
              Investment  Trust  1999-A,  Wilmington  Trust  FSB,
              Wilmington  Trust Company,  BA  Leasing  &  Capital
              Corporation,  and other  Financial Institutions, as
              Certified   Purchasers,   solely  with  respect  to
              Section 2.15,  6.9, 9.4(a) and 12.13(b)  R&B Falcon
              Corporation   and  Conoco  Inc.,  and  solely  with
              respect  to Sections 5.2 and  6.4,  RBF   Deepwater
              Exploration II Inc. and Conoco Development II Inc.

      10.10 - Appendix  1 to Participation Agreement  dated as of
              August 31, 1999.

      10.11 - Bank One Application and Agreement for  Irrevocable
              Standby Letter of Credit dated August 30, 1999.

      10.12 - Pledge  Agreement dated as of August  30, 1999,  by
              R&B  Falcon  Corporation  in  favor  of  Bank  One,
              Louisiana, National Association.

      10.13 - Employment and  Change  of  Control Agreement dated
              August 25, 1999 between R&B Falcon  Corporation and
              Paul B. Loyd, Jr.

      10.14 - Employment and  Change  of  Control Agreement dated
              August 25, 1999  between R&B Falcon Corporation and
              Charles R. Ofner.

      10.15 - Employment and  Change  of  Control Agreement dated
              August 25, 1999  between R&B Falcon Corporation and
              Ron Toufeeq.

      10.16 - Employment and  Change  of  Control Agreement dated
              August 25, 1999 between R&B Falcon Corporation  and
              Bernie W. Stewart.

      10.17 - Employment and  Change  of  Control Agreement dated
              August 25, 1999  between R&B Falcon Corporation and
              Wayne K. Hillin.

      10.18 - Employment and  Change  of  Control Agreement dated
              August 25, 1999  between R&B Falcon Corporation and
              Andrew Bakonyi.

      15    - Letter   regarding   unaudited   interim  financial
              information.

      27    - Financial  Data  Schedule.  (Exhibit  27  is  being
              submitted  as  an  exhibit  only  in the electronic
              format  of  this   Quarterly  Report  on  Form 10-Q
              being  submitted  to  the  Securities  and Exchange
              Commission.)

 (b)   Reports on Form 8-K

        There  were  no Current Reports on Form 8-K filed  during
     the three months ended September 30, 1999.



                           SIGNATURE




Pursuant  to the requirements of the Securities Exchange  Act  of
1934, the registrant has duly caused this report to be signed  on
its behalf by the undersigned thereunto duly authorized.



                                      R&B FALCON CORPORATION



Date: November 12, 1999               By   /s/T. W. Nagle
                                         ----------------------
                                         T. W. Nagle
                                         Executive Vice
                                         President and
                                         Chief Financial Officer