EXHIBIT 10.7
                                                   Execution Copy


               ASSIGNMENT OF DRILLING CONTRACT

     THIS ASSIGNMENT OF DRILLING CONTRACT (this "Agreement"),  is
made as of August 12, 1999, by RBF Exploration Co., a corporation
organized under the laws of the State of Nevada ("Assignor"),  to
the  Trustee from time to time under that certain Trust Indenture
and  Security Agreement (the "Trust Indenture") dated as of  even
date  herewith between Assignor and Chase Bank of Texas, National
Association,  as  trustee  (together  with  its  successors   and
assigns,  the "Assignee").  Unless otherwise defined herein,  all
capitalized terms used herein shall have the respective  meanings
assigned to such terms in the Trust Indenture.

     WHEREAS,  Shell   Deepwater Development  Inc.  ("SDDI")  and
Assignor  are  parties to that certain Deep  Water  Rig  Contract
dated August 12, 1998 (the "SDDI Contract");

     WHEREAS,  the  Trust  Indenture provides  for,  among  other
things,  the  pledge of certain collateral and the   issuance  of
$200,000,000.00 Senior Secured Class A1 Notes and the issuance of
$50,000,000.00  Senior Secured Class A2 Notes (collectively,  the
"Notes"), subject to the terms and conditions contained  therein;
and

     WHEREAS,  in connection with the sale of the Notes, Assignor
has  entered  into certain Note Purchase Agreements dated  August
12,  1999  (the  "Note Purchase Agreements")  with  various  Note
purchasers (the "Note Holders"); and

     WHEREAS,  in  connection with the Trust Indenture,  and  the
pledge  of  collateral  related thereto, Assignor  on  even  date
herewith  entered into that certain First Preferred Ship Mortgage
(the  "First  Preferred  Ship Mortgage")  on  the  vessel  to  be
documented under U.S. flag with the name DEEPWATER NAUTILUS  (the
"Drilling Rig", or sometimes the "Vessel"); and

     WHEREAS, in consideration of entering into the Note Purchase
Agreements,  the Note Holders have required that  Assignor  enter
into this Agreement for the assignment of all revenues due or  to
become due to Assignor relating to the SDDI Contract;

     NOW, THEREFORE, in consideration of the mutual premises  and
other   good   and  valuable  consideration,  the   receipt   and
sufficiency  of which is hereby acknowledged, the parties  hereto
hereby agree as follows:

     SECTION  1.     Assignment.  As security for the obligations
secured  by  the Trust Indenture and the other Project Documents,
the  Assignor hereby grants, sells, conveys, assigns,  transfers,
sets  over, mortgages and pledges to the Assignee, and  unto  the
     Assignee's  successors and assigns, all  its  right,  title,
interest, claim and demand in and to:

     (i)  all of the Assignor's rights in the SDDI Contract;

     (ii) all  monies  whatsoever due or to  become  due  to
          Assignor  arising  out of the SDDI  Contract,  all
          accounts reflected on Assignor's books relating to
          such  payments  and all written  evidence  of  the
          foregoing, including all invoices, statements, and
          other writings rendered under the SDDI Contract;

    (iii) all  other  monies  whatsoever  due  or  to become
          due  to  the  Assignor arising out of the  use  or
          operation of the Vessel pursuant to any employment
          of  the Vessel, including, but not limited to  the
          SDDI  Contract,  all  day rate payments,  freight,
          charter  hire  and  passage  monies,  proceeds  of
          off-hire insurance, any other monies earned and to
          be  earned,  due  or to become  due,  or  paid  or
          payable  to, or for the account of, the  Assignor,
          of  whatsoever  nature, arising out  of  or  as  a
          result  of the SDDI Contract or any other drilling
          contract  for, or use, operation or management  by
          the Assignor or its agents of, the Vessel;

     (iv) all  monies  and  claims  for  monies  due and  to
          become due to the Assignor under  and  all  claims
          for damages arising out of the breach (or payments
          for variation or termination) of the SDDI Contract
          and any other employment of  the  Vessel,  any and
          all other  present  and future drilling contracts,
          and operations  of  every  kin d whatsoever of the
          Vessel that may now and hereafter accrue or belong
          to  the  Assignor,  its  successors  or   assigns,
          arising out of or in  any way connected  with  its
          present or future requisitions, drilling contracts,
          use, operation or  management  of  the  Vessel  or
          arising out of or in  any  way  connected with the
          Vessel;

     (v)  all  monies  and  claims  for  monies  due and  to
          become  due  to the Assignor, and all  claims  for
          damages against parties other than SDDI in respect
          of  the actual  or  constructive total or  partial
          loss  of or requisition  of use of or title to the
          Vessel; and

     (vi) any proceeds of any of the foregoing.

     SECTION  2.     Payments.  The Assignor covenants that,  (i)
it  will have all the day rate payments, charter hires, earnings,
freights  and other monies hereby assigned paid over directly  to
the order of the Assignee, and if any such amounts are paid to or
received  by the Assignor, it will promptly pay such  amounts  to
the  Assignee;  (ii)  it  will promptly notify  in  writing  (and
deliver a duplicate copy of such notice to the Assignee) SDDI and
each  of  the  Assignor's agents and representatives  into  whose
control  may  come  any  earnings  and  monies  hereby  assigned,
informing  each  such Person of this Agreement,  and  instructing
such addressee to remit promptly to the order of the Assignee all
earnings  and  monies hereby assigned which may  come  into  such
Person's  control and to continue to make such remittances  until
such  time  as  such  Person may receive written  notice  to  the
contrary  directly from the Assignee; and (iii) it will  instruct
each  such Person to acknowledge directly to the Assignee receipt
of  the Assignor's written notification and the instructions. Any
sum in respect of monies assigned hereunder which is in the hands
of  any  Assignor's agents and representatives referred to above,
shall be deemed to have been received by them for the use and  on
behalf  of  the  Assignee  and shall  be  promptly  paid  to  the
Assignee.

     SECTION 3.     Limitation on Assignee's Liability.  Anything
herein  contained to the contrary notwithstanding, the  Assignee,
each  Note Holder, each Credit Support Party and their respective
successors  and  assigns  shall have no obligation  or  liability
under  the SDDI Contract, any other agreement or under any  other
drilling  contract by reason of or arising out of this Agreement,
and  the  Assignee, each Note Holder, each Credit Support  Party,
and  their  respective  successors  and  assigns,  shall  not  be
required  or  obligated in any manner to perform or  fulfill  any
obligations  of the Assignor under or pursuant to any  agreement,
drilling  contract or charter or to make any payment or  to  make
any  inquiry  as  to  the nature or sufficiency  of  any  payment
received  by it or to present or file any claim, or to  take  any
other  action  to collect or enforce the payment of  any  amounts
which may have been assigned to it or to which it may be entitled
hereunder at any time or times.

     SECTION 4.     Appointment.  The Assignor hereby constitutes
the  Assignee, and its successors and assigns, whether or not  an
Indenture Event of Default shall have occurred and be continuing,
its  true  and  lawful attorney-in-fact, irrevocably,  with  full
power,  in  the  name of the Assignor or otherwise,  to  receive,
compound  and give acquittance for any and all monies and  claims
for  monies  due  and to become due, property and  rights  hereby
assigned, to endorse any checks or other instruments or orders in
connection therewith, to file any document or to take any  action
or   institute  any  proceedings  which  the  Assignee,  and  its
successors  and assigns, may deem necessary or advisable  in  the
premises,  and to take any action in the name of the Assignor  or
otherwise, which the Assignor is obligated to take hereunder.

     SECTION  5.      Consideration.  The powers and  authorities
granted  to the Assignee, and its successors or assigns,  herein,
having been given for valuable consideration and coupled with  an
interest, are hereby declared to be irrevocable.

     SECTION 6.     Remedies.  The Assignor hereby agrees that if
an  Indenture  Event  of  Default  shall  have  occurred  and  be
continuing,  the  Assignee shall have  the  right,  but  not  the
obligation,  in its own name or in the name of the  Assignee,  to
exercise all of the Assignor's rights and, to perform any or  all
of  the  Assignor's obligations under the SDDI Contract  and  any
other drilling contract respecting the Vessel as though named  as
ship  owner therein. The Assignor hereby agrees that the remedies
herein  are  cumulative, and not exclusive of any other  remedies
provided by law or any other Project Document.

     SECTION 7.     Third Party Consents.  The Assignor covenants
to obtain the consent of SDDI to this Agreement, in a form and in
substance reasonably satisfactory to the Assignee.

     SECTION  8.     Representations and Covenants.  The Assignor
warrants  and represents that it has not assigned or pledged  the
rights,  title  and interest assigned hereunder to  anyone  other
than  the  Assignee. The Assignor hereby covenants that,  without
the  prior written consent thereto of the Assignee, it  will  not
assign  or pledge the whole or any part of the rights, title  and
interest  hereby assigned to anyone other than the Assignee,  and
it  will  not  take  or omit to take any action,  the  taking  or
omission of which might result in an alteration or impairment  of
this  Agreement,  or  of  any  of  the  rights  created  by  this
Agreement.

     SECTION  9.      Financing Statements.  The Assignor  hereby
appoints the Assignee as its attorney-in-fact to execute  on  the
Assignor's  behalf  and file any financing statements  under  the
Uniform  Commercial Code, or papers of similar purpose or  effect
in  respect of this Agreement, but the foregoing shall not  limit
the obligations of the Assignor under Section 10.

     SECTION 10.    Further Assurances.  The Assignor agrees that
at  any  time and from time to time, upon the written request  of
the  Assignee,  the Assignor will promptly and duly  execute  and
deliver  any  and  all further instruments and documents  as  the
Assignee  may  deem desirable in obtaining the full  benefits  of
this Agreement.

     SECTION  11.     Successors and Assigns.  Assignor  may  not
make  an  assignment or other transfer of this Agreement  or  any
interest  herein by operation of law or otherwise unless  it  has
obtained the prior written consent of Assignee to such assignment
or  other transfer, which consent may be withheld, conditioned or
delayed.   Assignee may assign its right and benefits under  this
Agreement  to any successor or to any one or more of the  holders
of  the  Notes  or, upon payment by the Sureties pusuant  to  the
Performance Bond, to the Sureties.

     SECTION  12.     Notices.   All  notices  to  Assignor   and
Assignee required to be served under this Agreement shall  be  in
writing  and  shall  be served by registered mail  and  shall  be
addressed as follows:

      If to the Assignee: Chase Bank of Texas, National Association
                          1150 Chase Tower
                          600 Travis Street
                          Houston, TX 77002
                          Attn:  Mauri J. Cowen, V.P.

          If to Assignor: RBF Exploration Co.
                          901 Threadneedle
                          Houston, Texas  77079
                          Attn:  President

or  at such other address as Assignor and Assignee may from  time
to  time  designate in writing to the other party.   All  notices
required to be served under this Agreement will be effective when
received by the addressee.

     SECTION 13.    No Waiver; Amendments.  Subject to applicable
statutes  of limitations, no failure on the part of the  Assignee
or  any of its agents to exercise, and no course of dealing  with
respect  to,  and  no delay in exercising, any right,  power,  or
remedy hereunder shall operate as a waiver thereof; nor shall any
single  or  partial exercise by Assignee or any of its agents  of
any  right,  power,  or remedy hereunder preclude  any  other  or
further  exercise  thereof or the exercise of  any  other  right,
power,  or  remedy.   No  amendment of this  Agreement  shall  be
effective  unless  the  same shall be in writing  and  signed  by
Assignor  and  Assignee.   No waiver of  any  provision  of  this
Agreement shall be effective unless signed by Assignee.

     SECTION  14.     Governing Law; Submission to  Jurisdiction;
Etc.   (a)   This Agreement (including, but not limited  to,  the
validity and enforceability hereof and thereof) shall be governed
by,  and  construed in accordance with, the laws of the state  of
New  York,  other than the conflict of laws rules  thereof  which
would   require   the  application  of  the   laws   of   another
jurisdiction.

     (b)   ANY  LEGAL ACTION OR PROCEEDING WITH RESPECT  TO  THIS
AGREEMENT MAY BE BROUGHT IN THE COURTS OF THE STATE OF  NEW  YORK
IN  NEW  YORK COUNTY OR OF THE UNITED STATES OF AMERICA  FOR  THE
SOUTHERN DISTRICT OF NEW YORK, AND, BY EXECUTION AND DELIVERY  OF
THIS  AGREEMENT, ASSIGNOR HEREBY ACCEPTS FOR ITSELF AND  (TO  THE
EXTENT  PERMITTED  BY LAW) IN RESPECT OF ITS PROPERTY,  GENERALLY
AND  UNCONDITIONALLY, THE JURISDICTION OF THE  AFORESAID  COURTS.
ASSIGNOR  HEREBY  IRREVOCABLY WAIVES  ANY  OBJECTION,  INCLUDING,
WITHOUT LIMITATION, ANY OBJECTION TO THE LAYING OF VENUE OR BASED
ON  THE  GROUNDS OF FORUM NON CONVENIENS, WHICH  IT  MAY  NOW  OR
HEREAFTER  HAVE TO THE BRINGING OF ANY SUCH ACTION OR  PROCEEDING
IN   SUCH   RESPECTIVE   JURISDICTIONS.    THIS   SUBMISSION   TO
JURISDICTION  IS NON-EXCLUSIVE AND DOES NOT PRECLUDE  ANY  PERSON
FROM  OBTAINING  JURISDICTION OVER OTHER  PARTIES  IN  ANY  COURT
OTHERWISE HAVING JURISDICTION.

     (c)    ASSIGNOR   HEREBY  IRREVOCABLY   DESIGNATES   CAPITOL
SERVICES,  INC. LOCATED AT 40 COLVIN STREET, SUITE  200,  ALBANY,
NEW  YORK 12206, AS THE DESIGNEE, APPOINTEE AND AGENT OF ASSIGNOR
TO  RECEIVE, FOR AND ON BEHALF OF ASSIGNOR, SERVICE OF PROCESS IN
SUCH  RESPECTIVE JURISDICTIONS IN ANY LEGAL ACTION OR  PROCEEDING
WITH RESPECT TO THIS AGREEMENT.  IT IS UNDERSTOOD THAT A COPY  OF
SUCH  PROCESS SERVED ON SUCH AGENT WILL BE PROMPTLY FORWARDED  BY
OVERNIGHT  COURIER TO ASSIGNOR AT ITS ADDRESS SET  FORTH  HEREIN,
BUT THE FAILURE OF ASSIGNOR TO RECEIVE SUCH COPY SHALL NOT AFFECT
IN  ANY  WAY  THE  SERVICE  OF  SUCH PROCESS.   ASSIGNOR  FURTHER
IRREVOCABLY  CONSENTS TO THE SERVICE OF PROCESS  OF  ANY  OF  THE
AFOREMENTIONED  COURTS IN ANY SUCH ACTION OR  PROCEEDING  BY  THE
MAILING  OF  COPIES  THEREOF  BY REGISTERED  OR  CERTIFIED  MAIL,
POSTAGE PREPAID, TO ASSIGNOR AT ITS SAID ADDRESS, SUCH SERVICE TO
BECOME EFFECTIVE THIRTY (30) DAYS AFTER SUCH MAILING.

     (d)   NOTHING HEREIN SHALL AFFECT THE RIGHT OF THE ASSIGNEE,
THE  HOLDER OF A NOTE OR ANY OTHER PERSON TO SERVE PROCESS IN ANY
OTHER MANNER PERMITTED BY LAW OR TO COMMENCE LEGAL PROCEEDINGS OR
OTHERWISE PROCEED AGAINST ASSIGNOR IN ANY OTHER JURISDICTION.

     (e)   ASSIGNOR  HEREBY  (I) IRREVOCABLY AND  UNCONDITIONALLY
WAIVES, TO THE FULLEST EXTENT PERMITTED BY LAW, TRIAL BY JURY  IN
ANY  LEGAL ACTION OR PROCEEDING RELATING TO THIS AGREEMENT OR ANY
PROJECT   DOCUMENT  AND  FOR  ANY  COUNTERCLAIM   THEREIN;   (II)
IRREVOCABLY WAIVES, TO THE MAXIMUM EXTENT NOT PROHIBITED BY  LAW,
ANY  RIGHT IT MAY HAVE TO CLAIM OR RECOVER IN ANY SUCH LITIGATION
ANY  SPECIAL,  EXEMPLARY, PUNITIVE OR CONSEQUENTIAL  DAMAGES,  OR
DAMAGES  OTHER  THAN,  OR IN ADDITION TO, ACTUAL  DAMAGES;  (III)
CERTIFIES  THAT NO PARTY HERETO NOR ANY REPRESENTATIVE  OR  AGENT
OF  COUNSEL  FOR ANY PARTY HERETO HAS REPRESENTED,  EXPRESSLY  OR
OTHERWISE, OR IMPLIED THAT SUCH PARTY WOULD NOT, IN THE EVENT  OF
LITIGATION,  SEEK  TO  ENFORCE THE FOREGOING  WAIVERS,  AND  (IV)
ACKNOWLEDGES  THAT  IT  HAS  BEEN  INDUCED  TO  ENTER  INTO  THIS
AGREEMENT,  AND THE TRANSACTIONS CONTEMPLATED HEREBY AND  THEREBY
BY,  AMONG OTHER THINGS, THE WAIVERS AND CERTIFICATIONS CONTAINED
IN THIS SECTION.

     SECTION 15.    NO ORAL AGREEMENTS.  THIS AGREEMENT, TOGETHER
WITH  THE  PROJECT  DOCUMENTS, EMBODY THE  ENTIRE  AGREEMENT  AND
UNDERSTANDING  BETWEEN  THE  PARTIES  AND  SUPERSEDE  ALL   OTHER
AGREEMENTS  AND UNDERSTANDINGS BETWEEN SUCH PARTIES  RELATING  TO
THE  SUBJECT MATTER HEREOF AND THEREOF.  THIS AGREEMENT, TOGETHER
WITH THE PROJECT DOCUMENTS, REPRESENT THE FINAL AGREEMENT BETWEEN
THE  PARTIES  AND MAY NOT BE CONTRADICTED BY EVIDENCE  OF  PRIOR,
CONTEMPORANEOUS  OR SUBSEQUENT ORAL AGREEMENTS  OF  THE  PARTIES.
THERE ARE NO UNWRITTEN ORAL AGREEMENTS BETWEEN THE PARTIES.

     SECTION  16.     Third Party Beneficiaries.  In addition  to
Assignee, each of the Sureties, each of the Note Holders and each
of  the  Credit  Support  Parties  is  an  intended  third  party
beneficiary of this Agreement.



          [Remainder of Page is Intentionally Blank.]




     IN WITNESS WHEREOF, Assignor has caused this Agreement to be
duly executed as of the day and year first above written.


                                   RBF EXPLORATION CO.



                                   By:
                                   Name:
                                   Title: