Exhibit 10.13

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                             CREDIT AGREEMENT
                                     
                                     
                       Dated as of November 10, 1997
                                     
                                   among
                                     
                       DEEPWATER DRILLING II L.L.C.,
                                     
                                     
                                     
                      BANK OF AMERICA NATIONAL TRUST
                         AND SAVINGS ASSOCIATION,
                         as Administrative Agent,
                                     
              NATIONAL WESTMINSTER BANK PLC, NEW YORK BRANCH,
                          as Documentation Agent
                                     
                                    and
                                     
               THE OTHER FINANCIAL INSTITUTIONS PARTY HERETO
                                     
                                     
                                Arranged By
                                     
                                     
                      BANCAMERICA ROBERTSON STEPHENS
                                    and
                              NATWEST MARKETS

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                             TABLE OF CONTENTS


ARTICLE I  DEFINITIONS                                          

ARTICLE II  THE CREDITS                                         
 2.01 Amounts and Terms of Commitments                         
 2.02 Loan Accounts                                            
 2.03 Procedure for Borrowing                                  
 2.04 Conversion and Continuation Elections                    
 2.05 Voluntary Termination or Reduction of Commitments        
 2.06 Optional Prepayments                                     
 2.07 Repayment; Mandatory Prepayment and Commitment Termination. 
 2.08 Interest                                                 
 2.09 Fees                                                     
 2.10 Computation of Fees and Interest                         
 2.11 Payments by the Company                                  
 2.12 Payments by the Banks to the Administrative Agent        
 2.13 Sharing of Payments, Etc.                                
 2.14 Guaranty                                                 

ARTICLE III  TAXES, YIELD PROTECTION AND ILLEGALITY             
 3.01 Taxes                                                    
 3.02 Illegality                                               
 3.03 Increased Costs and Reduction of Return                  
 3.04 Funding Losses                                           
 3.05 Inability to Determine Rates                             
 3.06 Reserves on Offshore Rate Loans                          
 3.07 Certificates of Banks                                    
 3.08 Substitution of Banks                                    
 3.09 Survival                                                 

ARTICLE IV  CONDITIONS PRECEDENT                                
 4.01 Conditions of Initial Loans                              
 4.02 Conditions to All Borrowings                            

ARTICLE V  REPRESENTATIONS AND WARRANTIES                      
 5.01 Corporate Existence and Power                           
 5.02 Corporate Authorization; No Contravention               
 5.03 Governmental Authorization                              
 5.04 Binding Effect                                          
 5.05 Litigation                                              
 5.06 No Default                                              
 5.07 ERISA                                                   
 5.08 Use of Proceeds; Margin Regulations                     
 5.09 Title to Properties                                     
 5.10 Tax Status; Taxes                                       
 5.11 Financial Condition                                     
 5.12 Environmental Matters                                   
 5.13 Regulated Entities                                      
 5.14 No Burdensome Restrictions                              
 5.15 Copyrights, Patents, Trademarks and Licenses, Etc.      
 5.16 Subsidiaries                                            
 5.17 Insurance                                               
 5.18 Solvency                                                
 5.19 Full Disclosure                                         

ARTICLE VI  AFFIRMATIVE COVENANTS                              
 6.01 Financial Statements                                    
 6.02 Certificates; Other Information                         
 6.03 Notices                                                 
 6.04 Preservation of Existence, Etc.                         
 6.05 Maintenance of Property                                 
 6.06 Insurance                                               
 6.07 Payment of Obligations                                  
 6.08 Compliance with Laws                                    
 6.09 ERISA                                                   
 6.10 Inspection of Property and Books and Records            
 6.11 Environmental Laws                                      
 6.12 Use of Proceeds                                         
 6.13 Covenants Regarding R&B Subsidiary Guarantors           
 6.14 Further Assurances                                      

ARTICLE VII  NEGATIVE COVENANTS                                
 7.01 Limitation on Liens                                     
 7.02 Disposition of Assets                                   
 7.03 Consolidations and Mergers                              
 7.04 Loans and Investments                                   
 7.05 Limitation on Indebtedness                              
 7.06 Transactions with Affiliates                            
 7.07 Margin Stock, Etc.                                      
 7.08 Contingent Obligations                                  
 7.09 Joint Ventures                                          
 7.10 Restricted Payments                                     
 7.11 Change in Business                                      
 7.12 Accounting Changes                                      

ARTICLE VIII  EVENTS OF DEFAULT                                
 8.01 Events of Default                                       
 8.02 Remedies                                                
 8.03 Rights Not Exclusive                                    

ARTICLE IX  THE AGENT                                          
 9.01 Appointment and Authorization; "Administrative Agent"   
 9.02 Delegation of Duties                                    
 9.03 Liability of Agent-Related Persons                      
 9.04 Reliance by Administrative Agent                        
 9.05 Notice of Default                                       
 9.06 Credit Decision                                         
 9.07 Indemnification of Agent-Related Persons                
 9.08 Agents in Individual Capacity                           
 9.09 Successor Agent                                         
 9.10 Withholding Tax                                         
 9.11 Documentation Agent; Arrangers                          

ARTICLE X  MISCELLANEOUS                                       
 10.01 Amendments and Waivers                                 
 10.02 Notices                                                
 10.03 No Waiver; Cumulative Remedies                         
 10.04 Costs and Expenses                                     
 10.05 Company Indemnification                                
 10.06 Marshalling; Payments Set Aside                        
 10.07 Successors and Assigns                                 
 10.08 Assignments, Participations, Etc.                      
 10.09 Confidentiality                                        
 10.10 Set-off                                                
 10.11 Interest                                               
 10.12 Notification of Addresses, Lending Offices, Etc.       
 10.13 Counterparts                                           
 10.14 Severability                                           
 10.15 No Third Parties Benefited                             
 10.16 Governing Law and Jurisdiction                         
 10.17 Waiver of Jury Trial                                   
 10.18 Entire Agreement                                       
  
SCHEDULES

Schedule 1.01  Definitions
Schedule 2.01  Commitments
Schedule 5.16  Subsidiaries and Minority Interests
Schedule 7.01  Permitted Liens
Schedule 7.05  Permitted Indebtedness
Schedule 10.02 Lending Offices; Addresses for Notices


EXHIBITS

Exhibit A      Form of Notice of Borrowing
Exhibit B      Form of Notice of Conversion/Continuation
Exhibit C      Form of Compliance Certificate
Exhibit D           [Intentionally Left Blank]
Exhibit E      Form of Assignment and Acceptance
Exhibit F      Form of Promissory Note
Exhibit G-1         Form of Guaranty (Conoco)
Exhibit G-2         Form of Guaranty (R&B)

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                             CREDIT AGREEMENT


      This  CREDIT AGREEMENT is entered into as of November 10, 1997, among
DEEPWATER  DRILLING  II L.L.C., a Delaware limited liability  company  (the
"Company"), the several financial institutions from time to time  party  to
this Agreement (collectively, the "Banks"; individually, a "Bank"), Bank of
America National Trust and Savings Association, as administrative agent for
the  Banks (the "Administrative Agent"), and National Westminster Bank Plc,
as  documentation  agent  for  the Banks (the "Documentation  Agent",  and,
together with the Administrative Agent, the "Agents").

      WHEREAS,  the  Banks have agreed to make available to the  Company  a
revolving credit facility upon the terms and conditions set forth  in  this
Agreement;

      NOW, THEREFORE, in consideration of the mutual agreements, provisions
and covenants contained herein, the parties agree as follows:


                                 ARTICLE I
                                     
                                DEFINITIONS
                                     
      Capitalized terms shall have the meanings set forth in Schedule  1.01
attached hereto.

                                ARTICLE II
                                     
                                THE CREDITS
                                     
     2.01 Amounts and Terms of Commitments.  Each Bank severally agrees, on
the  terms  and conditions set forth herein, to make loans to  the  Company
(each  such loan, a "Revolving Loan" or a "Loan") from time to time on  any
Business  Day  during  the period from the Closing Date  to  the  Revolving
Termination  Date,  in  an  aggregate amount not  to  exceed  at  any  time
outstanding the amount set forth on Schedule 2.01 (such amount, as the same
may be reduced under Section 2.05 or as a result of one or more assignments
under  Section  10.08, the Bank's "Commitment"); provided,  however,  that,
after giving effect to any Borrowing, the aggregate principal amount of all
outstanding  Loans  shall not at any time exceed the combined  Commitments.
Within the limits of each Bank's Commitment, and subject to the other terms
and  conditions  hereof, the Company may borrow under  this  Section  2.01,
prepay under Section 2.06 and reborrow under this Section 2.01.

      2.02  Loan  Accounts.   (a)  The Loans made by  each  Bank  shall  be
evidenced  by one or more loan accounts or records maintained by such  Bank
in  the  ordinary  course  of  business.   The  loan  accounts  or  records
maintained  by  the Administrative Agent and each Bank shall be  conclusive
absent  manifest error of the amount of the Loans made by the Banks to  the
Company and the interest and payments thereon.  Any failure to so record or
any  error  in doing so shall not, however, limit or otherwise  affect  the
obligation of the Company hereunder to pay any amount owing with respect to
the Loans.

          (b)  Upon the request of any Bank made through the Administrative
Agent,  the Loans made by such Bank may be evidenced by one or more  Notes,
instead  of or in addition to loan accounts.  Each such Bank shall  endorse
on  the  schedules annexed to its Note(s) the date, amount and maturity  of
each  Loan made by it and the amount of each payment of principal  made  by
the Company with respect thereto.  Each such Bank is irrevocably authorized
by  the  Company  to endorse its Note(s) and each Bank's  record  shall  be
conclusive absent manifest error; provided, however, that the failure of  a
Bank  to make, or a Bank's error in making, a notation thereon with respect
to  any  Loan  shall not limit or otherwise affect the obligations  of  the
Company hereunder or under any such Note to such Bank.

      2.03 Procedure for Borrowing.  (a)  Each Borrowing shall be made upon
the  Company's  irrevocable written notice delivered to the  Administrative
Agent  in  the form of a Notice of Borrowing (which notice must be received
by  the  Administrative Agent prior to 11:00 a.m. (Houston time) (i)  three
(3)  Business Days prior to the requested Borrowing Date, in  the  case  of
Offshore  Rate Loans; and (ii) one (1) Business Day prior to the  requested
Borrowing  Date,  in  the case of Base Rate Loans), specifying:   (A)   the
amount  of the Borrowing, which shall be in an aggregate minimum amount  of
$5,000,000  or  any  multiple  of $1,000,000 in  excess  thereof;  (B)  the
requested  Borrowing Date, which shall be a Business Day; (C) the  Type  of
Loans comprising the Borrowing; and (D) the duration of the Interest Period
applicable  to  such  Loans  included in such notice.   If  the  Notice  of
Borrowing  fails  to specify the duration of the Interest  Period  for  any
Borrowing comprised of Offshore Rate Loans, such Interest Period  shall  be
three months.

           (b)  The Administrative Agent will promptly notify each Bank  of
its receipt of any Notice of Borrowing and of the amount of such Bank's Pro
Rata Share of that Borrowing.

          (c)  Each Bank will make the amount of its Pro Rata Share of each
Borrowing  available to the Administrative Agent for  the  account  of  the
Company  at the Administrative Agent's Payment Office by 1:00 p.m. (Houston
time)  on  the Borrowing Date requested by the Company in funds immediately
available to the Administrative Agent.  The proceeds of all such Loans will
then  be made available to the Company by the Administrative Agent by  wire
transfer   in  accordance  with  written  instructions  provided   to   the
Administrative  Agent  by  the Company of like funds  as  received  by  the
Administrative Agent.

            (d)    After  giving  effect  to  any  Borrowing,  unless   the
Administrative Agent shall otherwise consent, there may not  be  more  than
ten (10) different Interest Periods in effect.

      2.04  Conversion and Continuation Elections.  (a)  The  Company  may,
upon  irrevocable written notice to the Administrative Agent in  accordance
with subsection 2.04(b):  (i) elect, as of any Business Day, in the case of
Base  Rate Loans, or as of the last day of the applicable Interest  Period,
in  the case of any other Type of Loans, to convert any such Loans (or  any
part  thereof  in  an amount not less than $5,000,000, or  that  is  in  an
integral multiple of $1,000,000 in excess thereof) into Loans of any  other
Type;  or (ii) elect, as of the last day of the applicable Interest Period,
to  continue any Loans having Interest Periods expiring on such day (or any
part  thereof  in  an amount not less than $5,000,000, or  that  is  in  an
integral multiple of $1,000,000 in excess thereof); provided, that,  if  at
any  time  the  aggregate amount of Offshore Rate Loans in respect  of  any
Borrowing is reduced, by payment, prepayment, or conversion of part thereof
to  be  less  than $5,000,000, such Offshore Rate Loans shall automatically
convert into Base Rate Loans, and on and after such date the right  of  the
Company  to  continue such Loans as, and convert such Loans into,  Offshore
Rate Loans shall terminate.

             (b)     The    Company    shall   deliver    a    Notice    of
Conversion/Continuation  to  be received by the  Administrative  Agent  not
later  than 11:00 a.m. (Houston time) at least (i) three (3) Business  Days
in  advance  of the Conversion/Continuation Date, if the Loans  are  to  be
converted  into  or  continued as Offshore Rate Loans;  and  (ii)  one  (1)
Business  Day in advance of the Conversion/Continuation Date, if the  Loans
are  to  be  converted into Base Rate Loans, specifying: (A)  the  proposed
Conversion/Continuation  Date; (B) the aggregate  amount  of  Loans  to  be
converted  or continued; (C) the Type of Loans resulting from the  proposed
conversion  or continuation; and (D) other than in the case of  conversions
into Base Rate Loans, the duration of the requested Interest Period.

          (c)  If, upon the expiration of any Interest Period applicable to
Offshore Rate Loans, the Company has failed to select timely a new Interest
Period to be applicable to such Offshore Rate Loans, or, if any Default  or
Event  of Default then exists, the Company shall be deemed to have  elected
to  convert such Offshore Rate Loans into Base Rate Loans effective  as  of
the expiration date of such Interest Period.

           (d)  The Administrative Agent will promptly notify each Bank  of
its receipt of a Notice of Conversion/Continuation, or, if no timely notice
is  provided by the Company, the Administrative Agent will promptly  notify
each Bank of the details of any automatic conversion.  All conversions  and
continuations shall be made ratably according to the respective outstanding
principal amounts of the Loans, with respect to which the notice was given,
held by each Bank.

           (e)   Unless  the Majority Banks otherwise consent,  during  the
existence  of a Default or Event of Default, the Company may not  elect  to
have a Loan converted into or continued as an Offshore Rate Loan.

           (f)   After  giving effect to any conversion or continuation  of
Loans,  unless the Administrative Agent shall otherwise consent, there  may
not be more than ten (10) different Interest Periods in effect.

      2.05  Voluntary Termination or Reduction of Commitments.  The Company
may,  upon  not  less  than five (5) Business Days'  prior  notice  to  the
Administrative Agent, terminate the Commitments, or permanently reduce  the
Commitments  by an aggregate minimum amount of $5,000,000, or any  integral
multiple  of  $1,000,000  in excess thereof; unless,  after  giving  effect
thereto and to any prepayments of Loans made on the effective date thereof,
the  then-outstanding principal amount of the Loans would exceed the amount
of  the  combined Commitments then in effect.  Once reduced  in  accordance
with this Section, the Commitments may not be increased.  Any reduction  of
the  Commitments shall be applied to each Bank according to  its  Pro  Rata
Share.   All  accrued commitment fees to, but not including, the  effective
date  of any reduction or termination of Commitments shall be paid  on  the
effective date of such reduction or termination.

      2.06 Optional Prepayments.  Subject to Section 3.04, the Company may,
at  any  time  or from time to time, upon not less than five  (5)  Business
Days'  irrevocable notice to the Administrative Agent, ratably prepay Loans
in  whole  or  in part, in minimum amounts of $5,000,000, or  any  integral
multiple of $1,000,000 in excess thereof.  Such notice of prepayment  shall
specify the date and amount of such prepayment and the Type(s) of Loans  to
be prepaid.  The Administrative Agent will promptly notify each Bank of its
receipt  of  any  such notice, and of such Bank's Pro Rata  Share  of  such
prepayment.  If such notice is given by the Company, the Company shall make
such  prepayment and the payment amount specified in such notice  shall  be
due  and  payable  on  the date specified therein,  together  with  accrued
interest  to each such date on the amount prepaid and any amounts  required
pursuant to Section 3.04.

      2.07 Repayment; Mandatory Prepayment and Commitment Termination.  (a)
The  Company shall repay to the Banks on the Revolving Termination Date the
aggregate principal amount of Loans outstanding on such date.

           (b)   If a Change of Control Trigger Event (Conoco) shall occur,
then  on  the thirtieth (30th) day after such occurrence, unless  otherwise
agreed in writing by all Banks prior to such thirtieth (30th) day, (a)  the
Commitment of each Bank shall automatically terminate, and (b) the  Company
shall,  without notice or demand, repay the unpaid principal amount of  all
Loans.

      2.08 Interest.  (a)  Each Loan shall bear interest on the outstanding
principal amount thereof from the applicable Borrowing Date at a  rate  per
annum equal to the Offshore Rate or the Base Rate, as the case may be  (and
subject  to  the Company's right to convert to other Types of  Loans  under
Section 2.04), plus the Applicable Margin.

           (b)   Interest  on each Loan shall be paid in  arrears  on  each
Interest  Payment Date.  Interest shall also be paid on  the  date  of  any
prepayment  of  Loans under Section 2.06 for the portion of  the  Loans  so
prepaid and upon payment (including prepayment) in full thereof and, during
the existence of any Event of Default, interest shall be paid on demand  of
the Administrative Agent at the request or with the consent of the Majority
Banks.

           (c)   Notwithstanding subsection (a) of this Section, while  any
Event  of  Default  exists or after acceleration,  the  Company  shall  pay
interest  (after as well as before entry of judgment thereon to the  extent
permitted  by  law)  on the principal amount of all outstanding  Loans  and
other Obligations, at a rate per annum which is determined by adding 2% per
annum  to the Applicable Margin then in effect for such Loans and,  in  the
case  of  Obligations not subject to an Applicable Margin, at  a  rate  per
annum equal to the Base Rate plus 2%; provided, however, that, on and after
the  expiration of any Interest Period applicable to any Offshore Rate Loan
outstanding  on  the  date  of  occurrence of  such  Event  of  Default  or
acceleration,  the  principal  amount  of  such  Loan  shall,  during   the
continuation of such Event of Default or after acceleration, bear  interest
at a rate per annum equal to the Base Rate plus 2%.

           (d)   Anything  herein  to  the  contrary  notwithstanding,  the
obligations  of the Company to any Bank under this Section  2.08  shall  be
subject  to the limitation that payments of interest shall not be  required
for any period for which interest is computed hereunder, to the extent (but
only  to the extent) that contracting for or receiving such payment by such
Bank would be contrary to the provisions of any law applicable to such Bank
limiting the highest rate of interest that may be lawfully contracted  for,
charged  or received by such Bank, and in such event the Company shall  pay
such Bank interest at the highest rate permitted by applicable law.

      2.09 Fees.  (a)  Arrangement, Agency Fees.  The Company shall pay  an
arrangement fee to the Arrangers for the Arrangers' own account, and  shall
pay  an  agency  fee  to  the Administrative Agent for  the  Administrative
Agent's own account, as required by the fee letter agreement (herein called
the "Fee Letter") executed by the Company dated November 5, 1997.

            (b)    Commitment  Fees.   The  Company  shall   pay   to   the
Administrative Agent for the account of each Bank a commitment fee  on  the
average  daily  unused  portion of such Bank's Commitment,  computed  on  a
quarterly  basis  in  arrears on the last Business  Day  of  each  calendar
quarter based upon the daily utilization for that quarter as calculated  by
the Administrative Agent, equal to one-tenth of one percent (0.10%) percent
per  annum.   Such commitment fee shall accrue from the date which  is  the
earlier  of (x) November 14, 1997, or (y) the date of the Initial Borrowing
Date,  through the Revolving Termination Date, and shall be due and payable
quarterly in arrears on the last Business Day of each quarter commencing on
December  31, 1997, through the Revolving Termination Date, with the  final
payment  to  be made on the Revolving Termination Date; provided  that,  in
connection  with any reduction or termination of Commitments under  Section
2.05  or Section 2.07, the accrued commitment fee calculated for the period
ending  on  such date shall also be paid on the date of such  reduction  or
termination, with the following quarterly payment being calculated  on  the
basis  of  the  period  from  such reduction or termination  date  to  such
quarterly  payment date.  The commitment fees provided in  this  subsection
shall accrue at all times after the above-mentioned date, including at  any
time during which one or more conditions in Article IV are not met.

      2.10  Computation  of Fees and Interest.  (a)   All  computations  of
interest  for  Base Rate Loans when the Base Rate is determined  by  BofA's
"reference rate" shall be made on the basis of a year of 365 or  366  days,
as  the  case  may be, and actual days elapsed.  All other computations  of
fees  and interest shall be made on the basis of a 360-day year and  actual
days elapsed (which results in more interest being paid than if computed on
the  basis of a 365-day year).  Interest and fees shall accrue during  each
period  during which interest or such fees are computed from the first  day
thereof to the last day thereof.

          (b)  Each determination of an interest rate by the Administrative
Agent  shall be conclusive and binding on the Company and the Banks in  the
absence of manifest error. The Administrative Agent will, at the request of
the  Company or any Bank, deliver to the Company or the Bank, as  the  case
may be, a statement showing the quotations used by the Administrative Agent
in determining any interest rate and the resulting interest rate.

      2.11  Payments by the Company.  (a)  All payments to be made  by  the
Company shall be made without set-off, recoupment or counterclaim.   Except
as  otherwise expressly provided herein, all payments by the Company  shall
be  made  to the Administrative Agent for the account of the Banks  at  the
Administrative Agent's Payment Office, and shall be made in dollars and  in
immediately available funds, no later than 1:00 p.m. (Houston time) on  the
date  specified herein.  The Administrative Agent will promptly  distribute
to  each  Bank  its Pro Rata Share (or other applicable share as  expressly
provided  herein) of such payment in like funds as received.   Any  payment
received  by  the Administrative Agent later than 1:00 p.m. (Houston  time)
shall be deemed to have been received on the following Business Day and any
applicable interest or fee shall continue to accrue.

           (b)   Subject  to the provisions set forth in the definition  of
"Interest Period" herein, whenever any payment is due on a day other than a
Business Day, such payment shall be made on the following Business Day, and
such extension of time shall in such case be included in the computation of
interest or fees, as the case may be.

           (c)   Unless the Administrative Agent receives notice  from  the
Company prior to the date on which any payment is due to the Banks that the
Company  will  not  make  such payment in full as and  when  required,  the
Administrative Agent may assume that the Company has made such  payment  in
full  to  the  Administrative Agent on such date in  immediately  available
funds  and the Administrative Agent may (but shall not be so required),  in
reliance upon such assumption, distribute to each Bank on such due date  an
amount  equal to the amount then due such Bank.  If and to the  extent  the
Company has not made such payment in full to the Administrative Agent, each
Bank  shall  repay  to  the  Administrative Agent  on  demand  such  amount
distributed  to  such Bank, together with interest thereon at  the  Federal
Funds  Rate for each day from the date such amount is distributed  to  such
Bank until the date repaid.

      2.12  Payments by the Banks to the Administrative Agent.  (a)  Unless
the  Administrative Agent receives notice from a Bank on or  prior  to  the
Closing  Date or, with respect to any Borrowing after the Closing Date,  at
least  one (1) Business Day prior to the date of such Borrowing, that  such
Bank  will  not  make  available  as and when  required  hereunder  to  the
Administrative  Agent for the account of the Company  the  amount  of  that
Bank's Pro Rata Share of the Borrowing, the Administrative Agent may assume
that  each Bank has made such amount available to the Administrative  Agent
in immediately available funds on the Borrowing Date and the Administrative
Agent may (but shall not be so required), in reliance upon such assumption,
make available to the Company on such date a corresponding amount.  If  and
to the extent any Bank shall not have made its full amount available to the
Administrative  Agent in immediately available funds and the Administrative
Agent  in such circumstances has made available to the Company such amount,
that Bank shall on the Business Day following such Borrowing Date make such
amount available to the Administrative Agent, together with interest at the
Federal  Funds  Rate  for each day during such period.   A  notice  of  the
Administrative  Agent submitted to any Bank with respect to  amounts  owing
under  this subsection (a) shall be conclusive, absent manifest error.   If
such  amount is so made available, such payment to the Administrative Agent
shall constitute such Bank's Loan on the date of Borrowing for all purposes
of   this  Agreement.   If  such  amount  is  not  made  available  to  the
Administrative Agent on the Business Day following the Borrowing Date,  the
Administrative Agent will notify the Company of such failure to  fund  and,
upon  demand  by the Administrative Agent, the Company shall, within  three
(3)  Business  Days, pay such amount to the Administrative  Agent  for  the
Administrative Agent's account, together with interest thereon for each day
elapsed since the date of such Borrowing, at a rate per annum equal to  the
interest  rate  applicable  at  the  time  to  the  Loans  comprising  such
Borrowing.

           (b)   The  failure of any Bank to make any Loan on any Borrowing
Date shall not relieve any other Bank of any obligation hereunder to make a
Loan  on  such  Borrowing Date, but no Bank shall be  responsible  for  the
failure of any other Bank to make the Loan to be made by such other Bank on
any Borrowing Date.

      2.13  Sharing of Payments, Etc.  If, other than as expressly provided
elsewhere herein, any Bank shall obtain on account of the Loans made by  it
any  payment (whether voluntary, involuntary, through the exercise  of  any
right  of  set-off, or otherwise) in excess of its ratable share (or  other
share  contemplated hereunder), such Bank shall immediately (a) notify  the
Administrative  Agent of such fact, and (b) purchase from the  other  Banks
such  participations  in the Loans made by them as shall  be  necessary  to
cause  such purchasing Bank to share the excess payment pro rata with  each
of  them;  provided,  however, that if all or any portion  of  such  excess
payment  is  thereafter recovered from the purchasing Bank,  such  purchase
shall  to that extent be rescinded and each other Bank shall repay  to  the
purchasing Bank the purchase price paid therefor, together with  an  amount
equal  to such paying Bank's ratable share (according to the proportion  of
(i)  the amount of such paying Bank's required repayment to (ii) the  total
amount  so  recovered from the purchasing Bank) of any  interest  or  other
amount  paid  or  payable by the purchasing Bank in respect  of  the  total
amount  so  recovered.  The Company agrees that any Bank  so  purchasing  a
participation  from  another Bank may, to the fullest extent  permitted  by
law,  exercise all its rights of payment (including the right  of  set-off,
but  subject to Section 10.10) with respect to such participation as  fully
as  if  such Bank were the direct creditor of the Company in the amount  of
such  participation.   The Administrative Agent will  keep  records  (which
shall  be  conclusive  and binding in the absence  of  manifest  error)  of
participations  purchased under this Section and will in each  case  notify
the Banks following any such purchases or repayments.

     2.14 Guaranty.  The Obligations shall be unconditionally guaranteed by
each  Guarantor  pursuant to, and to the extent provided in,  the  Guaranty
executed by it.


                                ARTICLE III
                                     
                  TAXES, YIELD PROTECTION AND ILLEGALITY

      3.01 Taxes.  (a)  Any and all payments by the Company to each Bank or
to  either Agent under this Agreement and any other Loan Document shall  be
made  free  and  clear  of, and without deduction or withholding  for,  any
Taxes.  In addition, the Company shall pay all Other Taxes.

           (b)   If  the  Company shall be required by  law  to  deduct  or
withhold any Taxes, Other Taxes or Further Taxes from or in respect of  any
sum payable hereunder to any Bank or Agent, then: (i) the sum payable shall
be increased as necessary so that, after making all required deductions and
withholdings   (including   deductions  and  withholdings   applicable   to
additional  sums payable under this Section), such Bank or  Agent,  as  the
case  may be, receives and retains an amount equal to the sum it would have
received  and  retained had no such deductions or withholdings  been  made;
(ii)  the  Company shall make such deductions and withholdings;  (iii)  the
Company  shall  pay the full amount deducted or withheld  to  the  relevant
taxing authority or other authority in accordance with applicable law;  and
(iv)  the Company shall also pay to each Bank, or the Administrative  Agent
for  the account of such Bank, at the time interest is paid, Further  Taxes
in  the  amount that the respective Bank specifies as necessary to preserve
the after-tax yield the Bank would have received if such Taxes, Other Taxes
or Further Taxes had not been imposed.

           (c)  The Company agrees to indemnify and hold harmless each Bank
and  Administrative Agent for the full amount of i) Taxes, ii) Other Taxes,
and iii) Further Taxes in the amount that the respective Bank specifies  as
necessary to preserve the after-tax yield such Bank would have received  if
such  Taxes,  Other Taxes or Further Taxes had not been  imposed,  and  any
liability  (including penalties, interest, additions to tax  and  expenses)
arising therefrom or with respect thereto, whether or not such Taxes, Other
Taxes  or Further Taxes were correctly or legally asserted.  Payment  under
this  indemnification  shall be made within 30  days  after  the  date  the
applicable Bank or the Administrative Agent makes written demand therefor.

           (d)  Within 30 days after the date of any payment by the Company
of  Taxes, Other Taxes or Further Taxes, the Company shall furnish to  each
Bank  or Administrative Agent the original or a certified copy of a receipt
evidencing  payment thereof, or other evidence of payment  satisfactory  to
such Bank or the Administrative Agent.

           (e)  If the Company is required to pay any amount to any Bank or
Administrative  Agent pursuant to subsection (b) or (c)  of  this  Section,
then  such  Bank  shall use reasonable efforts (consistent with  legal  and
regulatory  restrictions) to change the jurisdiction of its Lending  Office
so  as  to  eliminate any such additional payment by the Company which  may
thereafter accrue, if such change in the sole judgment of such Bank is  not
otherwise disadvantageous to such Bank.

     3.02 Illegality.  (a)  If any Bank determines that the introduction of
any  Requirement of Law, or any change in any Requirement of Law, or in the
interpretation  or administration of any Requirement of Law,  has  made  it
unlawful,  or  that  any central bank or other Governmental  Authority  has
asserted that it is unlawful, for any Bank or its applicable Lending Office
to  make  Offshore Rate Loans, then, on notice thereof by the Bank  to  the
Company  through the Administrative Agent, any obligation of that  Bank  to
make  Offshore  Rate Loans shall be suspended until the Bank  notifies  the
Administrative Agent and the Company that the circumstances giving rise  to
such determination no longer exist.

           (b)   If  a Bank determines that it is unlawful to maintain  any
Offshore Rate Loan, the Company shall, upon its receipt of notice  of  such
fact  and demand from such Bank (with a copy to the Administrative  Agent),
prepay  in  full  such Offshore Rate Loans of that Bank  then  outstanding,
together  with interest accrued thereon and amounts required under  Section
3.04,  either on the last day of the Interest Period thereof, if  the  Bank
may lawfully continue to maintain such Offshore Rate Loans to such day,  or
immediately,  if  the  Bank  may not lawfully  continue  to  maintain  such
Offshore  Rate Loan.  If the Company is required to so prepay any  Offshore
Rate  Loan,  then,  concurrently  with such  prepayment,  the  Company  may
(subject  to Section 4.02) borrow from the affected Bank, in the amount  of
such repayment, a Base Rate Loan.

           (c)   If the obligation of any Bank to make or maintain Offshore
Rate  Loans has been so terminated or suspended, the Company may elect,  by
giving  notice to the Bank through the Administrative Agent that all  Loans
which  would otherwise be made by the Bank as Offshore Rate Loans shall  be
instead Base Rate Loans.

           (d)   Before giving any notice to the Administrative Agent under
this  Section, the affected Bank shall designate a different Lending Office
with respect to its Offshore Rate Loans if such designation will avoid  the
need  for  giving such notice or making such demand and will  not,  in  the
judgment of the Bank, be illegal or otherwise disadvantageous to the Bank.

      3.03  Increased  Costs and Reduction of Return.   (a)   If  any  Bank
determines that, due to either (i) the introduction of or any change in  or
in  the  interpretation of any law or regulation or (ii) the compliance  by
that  Bank  with any guideline or request from any central  bank  or  other
Governmental  Authority (whether or not having the  force  of  law),  there
shall  be  any  increase in the cost to such Bank of agreeing  to  make  or
making,  funding or maintaining any Offshore Rate Loans, then  the  Company
shall be liable for, and shall from time to time, upon demand (with a  copy
of  such  demand  to  be  sent to the Administrative  Agent),  pay  to  the
Administrative  Agent for the account of such Bank, additional  amounts  as
are sufficient to compensate such Bank for such increased costs.

           (b)  If any Bank shall have determined that (i) the introduction
of any Capital Adequacy Regulation, (ii) any change in any Capital Adequacy
Regulation, (iii) any change in the interpretation or administration of any
Capital  Adequacy  Regulation by any central  bank  or  other  Governmental
Authority  charged  with the interpretation or administration  thereof,  or
(iv)  compliance  by  the Bank (or its Lending Office) or  any  corporation
controlling the Bank with any Capital Adequacy Regulation, affects or would
affect  the amount of capital required or expected to be maintained by  the
Bank or any corporation controlling the Bank and (taking into consideration
such Bank's or such corporation's policies with respect to capital adequacy
and  such  Bank's desired return on capital) determines that the amount  of
such  capital  is  increased  as a consequence of  its  Commitment,  loans,
credits or obligations under this Agreement, then, upon demand of such Bank
to  the Company through the Administrative Agent, the Company shall pay  to
the  Bank,  from time to time as specified by the Bank, additional  amounts
sufficient to compensate the Bank for such increase.

      3.04 Funding Losses.  The Company shall reimburse each Bank and  hold
each  Bank harmless from any loss or expense which the Bank may sustain  or
incur  as  a consequence of: (a) the failure of the Company to  make  on  a
timely  basis any payment of principal of any Offshore Rate Loan;  (b)  the
failure  of  the  Company to borrow, continue or convert a Loan  after  the
Company has given (or is deemed to have given) a Notice of Borrowing  or  a
Notice of Conversion/ Continuation; (c) the failure of the Company to  make
any  prepayment in accordance with any notice delivered under Section 2.06;
(d)  the  prepayment  (including  under  Section  2.07)  or  other  payment
(including after acceleration thereof) of an Offshore Rate Loan  on  a  day
that  is  not  the  last day of the relevant Interest Period;  or  (e)  the
automatic conversion under Section 2.04 of any Offshore Rate Loan to a Base
Rate  Loan  on  a  day  that is not the last day of the  relevant  Interest
Period; including any such loss or expense arising from the liquidation  or
reemployment of funds obtained by it to maintain its Offshore Rate Loans or
from  fees  payable to terminate the deposits from which  such  funds  were
obtained.   For purposes of calculating amounts payable by the  Company  to
the  Banks  under this Section and under subsection 3.03(a), each  Offshore
Rate  Loan  made  by a Bank (and each related reserve, special  deposit  or
similar  requirement) shall be conclusively deemed to have been  funded  at
the LIBOR used in determining the Offshore Rate for such Offshore Rate Loan
by a matching deposit or other borrowing in the interbank eurodollar market
for  a  comparable amount and for a comparable period, whether or not  such
Offshore Rate Loan is in fact so funded.

     3.05 Inability to Determine Rates.  If the Administrative Agent or the
Majority Banks determine that for any reason adequate and reasonable  means
do  not  exist for determining the Offshore Rate for any requested Interest
Period  with  respect to a proposed Offshore Rate Loan  by  reason  of  any
changes  arising after the date of this Agreement affecting  the  interbank
Eurodollar  market, the Administrative Agent will promptly  so  notify  the
Company and each Bank.  Thereafter, the obligation of the Banks to make  or
maintain  Offshore  Rate  Loans  hereunder shall  be  suspended  until  the
Administrative  Agent, upon the instruction of the Majority Banks,  revokes
such  notice  in  writing.  Upon receipt of such notice,  the  Company  may
revoke  any  Notice of Borrowing or Notice of Conversion/Continuation  then
submitted  by  it.  If the Company does not revoke such Notice,  the  Banks
shall  make, convert or continue the Loans, as proposed by the Company,  in
the amount specified in the applicable notice submitted by the Company, but
such Loans shall be made, converted or continued as Base Rate Loans instead
of Offshore Rate Loans.

      3.06 Reserves on Offshore Rate Loans.  The Company shall pay to  each
Bank,  if  after  the  date  hereof  such  Bank  shall  be  required  under
regulations of the FRB to maintain reserves with respect to liabilities  or
assets consisting of or including Eurocurrency funds or deposits (currently
known  as  "Eurocurrency  liabilities"), additional  costs  on  the  unpaid
principal  amount of each Offshore Rate Loan equal to the actual  costs  of
such reserves allocated to such Loan by the Bank (as determined by the Bank
in  good  faith, which determination shall be conclusive), payable on  each
date  on which interest is payable on such Loan, provided the Company shall
have  received at least 15 days' prior written notice (with a copy  to  the
Administrative Agent) of such additional interest from the Bank.  If a Bank
fails  to give notice 15 days prior to the relevant Interest Payment  Date,
such  additional  interest shall be payable 15 days from  receipt  of  such
notice.

      3.07  Certificates  of  Banks.  Any Bank  claiming  reimbursement  or
compensation  under this Article III shall deliver to the Company  (with  a
copy to the Administrative Agent) a certificate setting forth in reasonable
detail the amount payable to the Bank hereunder and such certificate  shall
be conclusive and binding on the Company in the absence of manifest error.

      3.08 Substitution of Banks.  Upon the receipt by the Company from any
Bank  (an "Affected Bank") of a claim for compensation under Section  3.03,
the Company may:  (i) request the Affected Bank to use its best efforts  to
obtain  a  replacement bank or financial institution  satisfactory  to  the
Company and to each Agent (a "Replacement Bank") to acquire and assume  all
or  a  ratable  part of all of such Affected Bank's Loans  and  Commitment;
(ii)  request one more of the other Banks to acquire and assume all or part
of  such  Affected  Bank's  Loans  and Commitment;  or  (iii)  designate  a
Replacement Bank.  Any such designation of a Replacement Bank under  clause
(i) or (iii) shall be subject to the prior written consent of each Agent.

      3.09 Survival.  The agreements and obligations of the Company in this
Article III shall survive the payment of all other Obligations.


                                ARTICLE IV
                                     
                           CONDITIONS PRECEDENT
                                     
     4.01 Conditions of Initial Loans.  The obligation of each Bank to make
its initial Loan hereunder is subject to the condition that the Agent shall
have  received  on  or  before  the Initial  Borrowing  Date,  all  of  the
following, in form and substance satisfactory to each Agent and each  Bank,
and in sufficient copies for each Bank:

           (a)  Loan Documents.  This Agreement and the Guaranty Agreements
executed by each party thereto;

          (b)  Resolutions; Incumbency.

             (i)      Copies of the resolutions adopted by the members
     of  the Company authorizing the transactions contemplated hereby,
     certified  as of the Closing Date by the members, and  copies  of
     resolutions   of  the  board  of  directors  of  each   Guarantor
     authorizing the transactions contemplated hereby certified as  of
     the  Closing  Date by the Secretary or an Assistant Secretary  of
     the applicable Guarantor; and
     
            (ii)      A  certificate  of  the Secretary  or  Assistant
     Secretary of Guarantor, and a certificate of the members  of  the
     Company,  certifying  the  names  and  true  signatures  of   the
     officers,  manager and/or representatives authorized to  execute,
     deliver and perform, as applicable, this Agreement, and all other
     Loan Documents to be delivered hereunder;

            (c)   Organization  Documents;  Good  Standing.   Each  of  the
following documents:

              (i)      limited  liability  company  agreement  of  the
     Company, certified by the members as of the Closing Date, and the
     certificate of incorporation and the bylaws of each Guarantor  as
     in  effect  on  the Closing Date, certified by the  Secretary  or
     Assistant  Secretary of such Guarantor, as of the  Closing  Date;
     and
     
            (ii)      a good standing certificate for the Company  and
     each   Guarantor  from  the  Secretary  of  State  (or   similar,
     applicable  Governmental Authority) of its state of organization,
     and from each state where the Company is qualified to do business
     as a foreign company as of a recent date;

          (d)  Legal Opinions.

             (i)     an opinion of counsel (satisfactory to the Agents
     and  the  Banks) to the Company, and addressed to the Agents  and
     the   Banks,  which  opinion  shall  be  in  form  and  substance
     satisfactory to the Agents and the Banks;
     
            (ii)      an  opinion  of Wayne K. Hillin,  Esq.,  General
     Counsel, Reading & Bates Corporation, addressed to the Agents and
     the   Banks,  which  opinion  shall  be  in  form  and  substance
     satisfactory to the Agents and the Banks;
     
     
           (iii)     an opinion of Wayne Anderson, Esq., Conoco  Inc.,
     addressed to the Agents and the Banks, which opinion shall be  in
     form and substance satisfactory to the Agents and the Banks; and
     
            (iv)      a  favorable opinion of Butler & Binion, L.L.P.,
     special counsel to the Administrative Agent.
     
           (e)  Payment of Fees.  Evidence of payment by the Company of all
accrued  and  unpaid fees, costs and expenses to the extent  then  due  and
payable on the Closing Date, together with fees and expenses of counsel  to
the  Administrative Agent to the extent invoiced prior to or on the Closing
Date, plus such additional amounts of special counsel fees and expenses  as
shall constitute the Administrative Agent's reasonable estimate incurred or
to  be  incurred by it through the closing proceedings (provided that  such
estimate  shall not thereafter preclude final settling of accounts  between
the  Company and the Administrative Agent); including any such costs,  fees
and expenses arising under or referenced in Sections 2.09 and 10.04;

           (f)   Certificate.  (i) A certificate signed  by  a  Responsible
Officer,   dated   as  of  the  Closing  Date,  stating   that:   (A)   the
representations and warranties contained in Article V are true and  correct
on  and  as  of  such date, as though made on and as of such date;  (B)  no
Default  or  Event  of  Default exists or would  result  from  the  initial
Borrowing; and (C) there has occurred since September 30, 1997, no event or
circumstance that has resulted or could reasonably be expected to result in
a  Material  Adverse  Effect  with respect  to  the  Company;  and  (ii)  a
certificate  signed  by an appropriate officer of each  Guarantor,  stating
that  (A) the representations and warranties made by such Guarantor in  the
Guaranty  executed by it are true and correct on and as of  such  date,  as
though  made  on  and  as  of such date, and (B)  since  the  date  therein
specified in such certificate (which shall be June 30, 1997, for Conoco and
shall  be  September  30, 1997, for R&B), there has occurred  no  event  or
circumstance that has resulted or could reasonably be expected to result in
a  Material  Adverse Effect with respect to such Guarantor or  any  of  the
direct or indirect owners of equity interests in the Company; and

           (g)  Other Documents.  Such other approvals, opinions, documents
or materials as the Administrative Agent or any Bank may request.

      4.02  Conditions to All Borrowings.  The obligation of each  Bank  to
make  any Loan to be made by it (including its initial Loan) or to continue
or  convert  any Loan under Section 2.04 is subject to the satisfaction  of
the  following  conditions  precedent on the  relevant  Borrowing  Date  or
Conversion/Continuation Date:

            (a)   Notice  of  Borrowing  or  Conversion/Continuation.   The
Administrative Agent shall have received (with, in the case of the  initial
Loan  only,  a  copy for each Bank) a Notice of Borrowing or  a  Notice  of
Conversion/Continuation, as applicable;

            (b)   Continuation  of  Representations  and  Warranties.   The
representations and warranties in Article V shall be true  and  correct  on
and as of such Borrowing Date or Conversion/Continuation Date with the same
effect   as   if   made   on   and   as   of   such   Borrowing   Date   or
Conversion/Continuation Date (except to the extent such representations and
warranties expressly refer to an earlier date, in which case they shall  be
true and correct as of such earlier date);

           (c)   No Existing Default.  No Default or Event of Default shall
exist  or  shall result from such Borrowing or continuation or  conversion;
and

           (d)  No Change of Control Trigger Event (Conoco).  No Change  of
Control Trigger Event (Conoco) shall have occurred.

Each Notice of Borrowing and Notice of Conversion/Continuation submitted by
the Company hereunder shall constitute a representation and warranty by the
Company  hereunder,  as  of the date of each such notice  and  as  of  each
Borrowing  Date  or  Conversion/Continuation Date, as applicable  that  the
conditions in this Section 4.02 are satisfied.


                                 ARTICLE V
                                     
                      REPRESENTATIONS AND WARRANTIES

      The  Company represents and warrants to each of the Agents and  Banks
that:

      5.01  Corporate Existence and Power.  The Company: (a) is  a  limited
liability  company duly organized, validly existing and  in  good  standing
under  the laws of the jurisdiction of its organization; (b) has the  power
and  authority and all governmental licenses, authorizations, consents  and
approvals to own its assets, carry on its business and to execute, deliver,
and perform its obligations under the Loan Documents; (c) is duly qualified
as a foreign limited liability company and is licensed and in good standing
under the laws of each jurisdiction where its ownership, lease or operation
of  property or the conduct of its business requires such qualification  or
license; and (d) is in compliance with all Requirements of Law; except,  in
each  case referred to in clause (c) or clause (d), to the extent that  the
failure  to  do  so  could not reasonably be expected to  have  a  Material
Adverse Effect.

      5.02  Corporate  Authorization;  No  Contravention.   The  execution,
delivery  and performance by the Company of this Agreement and  each  other
Loan  Document to which the Company is party, have been duly authorized  by
all necessary action, and do not and will not: (a) contravene the terms  of
any of the Company's Organization Documents; (b) conflict with or result in
any  breach  or  contravention of, or the creation of any Lien  under,  any
document  evidencing any Contractual Obligation to which the Company  is  a
party  or  any  order,  injunction, writ  or  decree  of  any  Governmental
Authority  to which the Company or its property is subject; or (c)  violate
any Requirement of Law.

      5.03  Governmental  Authorization.  No approval, consent,  exemption,
authorization,  or  other  action by, or notice to,  or  filing  with,  any
Governmental  Authority  is necessary or required in  connection  with  the
execution, delivery or performance by, or enforcement against, the  Company
of the Agreement or any other Loan Document.

      5.04 Binding Effect.  This Agreement and each other Loan Document  to
which  the  Company  is  a party constitute the legal,  valid  and  binding
obligations  of the Company, enforceable against the Company in  accordance
with  their  respective terms, except as enforceability may be  limited  by
applicable   bankruptcy,  insolvency,  or  similar   laws   affecting   the
enforcement  of  creditors'  rights generally or  by  equitable  principles
relating to enforceability.

      5.05 Litigation.  There are no actions, suits, proceedings, claims or
disputes  pending, or to the best knowledge of the Company,  threatened  or
contemplated, at law, in equity, in arbitration or before any  Governmental
Authority,  against the Company, any of its Subsidiaries, any Guarantor  or
any  of their respective properties which: (a) purport to affect or pertain
to  this  Agreement or any other Loan Document, or any of the  transactions
contemplated  hereby  or  thereby; or (b) if determined  adversely  to  the
Company  or its Subsidiaries or any Guarantor, would reasonably be expected
to  have  a  Material  Adverse  Effect.   No  injunction,  writ,  temporary
restraining order or any order of any nature has been issued by  any  court
or  other  Governmental  Authority purporting to  enjoin  or  restrain  the
execution,  delivery or performance of this Agreement  or  any  other  Loan
Document, or directing that the transactions provided for herein or therein
not be consummated as herein or therein provided.

      5.06  No  Default.  No Default or Event of Default  exists  or  would
result  from the incurring of any Obligations by the Company.   As  of  the
Closing Date, neither the Company nor any Subsidiary is in default under or
with   respect  to  any  Contractual  Obligation  in  any  respect   which,
individually  or  together  with  all such defaults,  could  reasonably  be
expected to have a Material Adverse Effect, or that would, if such  default
had  occurred  after  the Closing Date, create an Event  of  Default  under
subsection 8.01(e).

      5.07  ERISA.  The Company does not (and did not at any time prior  to
the  date  hereof) sponsor, maintain or make contributions to, any  Pension
Plan, and the Company is not obligated to do so.

      5.08  Use of Proceeds; Margin Regulations.  The proceeds of the Loans
are  to  be  used  solely for the purposes set forth in  and  permitted  by
Section  6.12 and Section 7.07.  Neither the Company nor any Subsidiary  is
generally engaged in the business of purchasing or selling Margin Stock  or
extending  credit for the purpose of purchasing or carrying  Margin  Stock.
Margin  Stock does not constitute more than 25% of the value of the  assets
of  the  Company, and the Company does not have any present intention  that
Margin Stock will constitute more than 25% of the value of such assets.

      5.09 Title to Properties.  The Company and each Subsidiary have  good
record  and marketable title in fee simple to, or valid leasehold interests
in,  all  real property necessary or used in the ordinary conduct of  their
respective  businesses,  except for such defects in  title  as  could  not,
individually  or in the aggregate, have a Material Adverse Effect.   As  of
the  Closing  Date,  the property of the Company and  its  Subsidiaries  is
subject to no Liens, other than Permitted Liens.

      5.10 Tax Status; Taxes.  The Company is considered a partnership  for
federal  and  state  income  purposes  not  an  association  taxable  as  a
corporation.  The Company and its Subsidiaries have filed all  Federal  and
other material tax returns and reports required to be filed, and have  paid
all   Federal  and  other  material  taxes,  assessments,  fees  and  other
governmental  charges  levied or imposed upon  them  or  their  properties,
income  or  assets otherwise due and payable, except those which are  being
contested  in good faith by appropriate proceedings and for which  adequate
reserves  have been provided in accordance with GAAP. There is no  proposed
tax  assessment against the Company or any Subsidiary that would, if  made,
have a Material Adverse Effect.

      5.11  Financial  Condition.  (a)  The unaudited consolidated  balance
sheet  of  the Company and its Subsidiaries dated September 30, 1997:   (i)
was  prepared  in accordance with GAAP consistently applied throughout  the
period  covered  thereby,  except  as otherwise  expressly  noted  therein,
subject to ordinary, good faith year-end audit adjustments; and (ii) fairly
presents the financial condition of the Company and its Subsidiaries as  of
the date thereof.

          (b)  Since September 30, 1997, there has been no Material Adverse
Effect.

      5.12  Environmental Matters.  The Company conducts, in  the  ordinary
course  of business, a review of the effect of existing Environmental  Laws
and  existing  Environmental Claims on its and its Subsidiaries'  business,
operations  and  properties,  and  as a  result  thereof  the  Company  has
reasonably concluded that such Environmental Laws and Environmental  Claims
could not, individually or in the aggregate, reasonably be expected to have
a Material Adverse Effect.

      5.13 Regulated Entities.  None of the Company, any Person controlling
the  Company,  or  any  Subsidiary, is an "Investment Company"  within  the
meaning  of the Investment Company Act of 1940.  The Company is not subject
to  regulation under the Public Utility Holding Company Act  of  1935,  the
Federal  Power Act, the Interstate Commerce Act, any state public utilities
code,  or  any  other Federal or state statute or regulation  limiting  its
ability to incur Indebtedness.

      5.14  No  Burdensome  Restrictions.   Neither  the  Company  nor  any
Subsidiary is a party to or bound by any Contractual Obligation, or subject
to any restriction in any Organization Document, or any Requirement of Law,
which could reasonably be expected to have a Material Adverse Effect.

      5.15 Copyrights, Patents, Trademarks and Licenses, Etc.  No claim  or
litigation regarding any of the foregoing is pending or threatened, and  no
patent,  invention,  device, application, principle or  any  statute,  law,
rule,  regulation, standard or code is pending or, to the knowledge of  the
Company,  proposed, which, in either case, could reasonably be expected  to
have a Material Adverse Effect.

      5.16  Subsidiaries.  The Company has no Subsidiaries other than those
specifically  disclosed  in  Schedule  5.16  hereto  and  has   no   equity
investments   in  any  other  corporation  or  entity  other   than   those
specifically disclosed in Schedule 5.16.

      5.17  Insurance.  The properties and business of the Company and  its
Subsidiaries  are  insured with financially sound and  reputable  insurance
companies  not  Affiliates  of the Company,  in  such  amounts,  with  such
deductibles and covering such risks as are customarily carried by companies
engaged  in  similar businesses and owning similar properties in localities
where the Company or such Subsidiary operates.

      5.18 Solvency.  The Company is Solvent.

      5.19 Full Disclosure.  None of the representations or warranties made
by  the Company or any Subsidiary in the Loan Documents as of the date such
representations  and warranties are made or deemed made, and  none  of  the
statements  contained  in  any exhibit, report,  statement  or  certificate
furnished  by  or on behalf of the Company or any Subsidiary in  connection
with  the  Loan Documents (including the offering and disclosure  materials
delivered by or on behalf of the Company to the Banks prior to the  Closing
Date),  contains  any  untrue statement of a material  fact  or  omits  any
material  fact  required  to be stated therein or  necessary  to  make  the
statements made therein, in light of the circumstances under which they are
made, not misleading as of the time when made or delivered.


                                ARTICLE VI
                                     
                           AFFIRMATIVE COVENANTS

      So  long as any Bank shall have any Commitment hereunder, or any Loan
or other Obligation shall remain unpaid or unsatisfied, unless the Majority
Banks waive compliance in writing:

       6.01  Financial  Statements.   The  Company  shall  deliver  to  the
Administrative Agent, in form and detail satisfactory to the Administrative
Agent and the Majority Banks, with sufficient copies for each Bank:

           (a)  as soon as available, but not later than 90 days after  the
end  of each fiscal year, a copy of the audited consolidated balance  sheet
of  the  Company and its Subsidiaries as at the end of such  year,  setting
forth  in  comparative form the figures for the previous fiscal  year,  and
accompanied  by  the opinion of a nationally-recognized independent  public
accounting firm ("Independent Auditor") which report shall state that  such
consolidated financial statements present fairly the financial position for
the periods indicated in conformity with GAAP applied on a basis consistent
with  prior years.  Such opinion shall not be qualified or limited  because
of  a  restricted or limited examination by the Independent Auditor of  any
material portion of the Company's or any Subsidiary's records; and

           (b)  as soon as available, but not later than 45 days after  the
end  of each of the first three fiscal quarters of each fiscal year, a copy
of  the  unaudited  consolidated balance  sheet  of  the  Company  and  its
Subsidiaries as of the end of such quarter for the period commencing on the
first  day and ending on the last day of such quarter, and certified  by  a
Responsible Officer as fairly presenting, in accordance with GAAP  (subject
to ordinary, good faith year-end audit adjustments), the financial position
of the Company and the Subsidiaries.

      6.02  Certificates; Other Information.  The Company shall furnish  to
the  Administrative  Agent,  with sufficient  copies  for  each  Bank:  (a)
concurrently with the delivery of the financial statements referred  to  in
subsections  6.01(a)  and  (b),  a Compliance  Certificate  executed  by  a
Responsible  Officer; (b) promptly, copies of all financial statements  and
reports  that the Company sends to its members, and copies of all financial
statements and regular, periodical or special reports (including Forms 10K,
10Q  and  8K), if any, that the Company or any Subsidiary may make  to,  or
file with, the SEC; and (c) promptly, such additional information regarding
the  business,  financial  or  corporate affairs  of  the  Company  or  any
Subsidiary  as  the Administrative Agent, at the request of any  Bank,  may
from time to time request.

      6.03  Notices.   The Company shall promptly notify the Administrative
Agent  and  each  Bank: (a) of the occurrence of any Default  or  Event  of
Default,  and  of the occurrence or existence of any event or  circumstance
that foreseeably will become a Default or Event of Default; (b) of (i)  any
breach  or  non-performance  of,  or any  default  under,  any  Contractual
Obligation of the Company or any of its Subsidiaries which could reasonably
be  expected to result in a Material Adverse Effect; and (ii) any  dispute,
litigation, investigation, proceeding or suspension which may exist at  any
time  between  the Company or any of its Subsidiaries and any  Governmental
Authority  which  could  reasonably be expected to  result  in  a  Material
Adverse Effect; (c) of the commencement of, or any material development  in
(i) any litigation or proceeding affecting the Company or any Subsidiary in
which  the  amount of damages claimed is $1,000,000 (or its  equivalent  in
another  currency  or  currencies)  or more,  or  (ii)  any  litigation  or
proceeding affecting the Company, a Subsidiary or a Guarantor and which, if
adversely  determined,  would reasonably be expected  to  have  a  Material
Adverse  Effect,  or in which the relief sought is an injunction  or  other
stay  of the performance of this Agreement or any Loan Document; (d)  upon,
but in no event later than 10 days after, becoming aware of (i) any and all
enforcement,  cleanup, removal or other governmental or regulatory  actions
instituted,  completed or threatened against the Company or any  Subsidiary
or   any   of  their  respective  properties  pursuant  to  any  applicable
Environmental  Laws, and (ii) all other Environmental Claims;  (e)  of  any
other  litigation  or  proceeding affecting  the  Company  or  any  of  its
Subsidiaries  or  any Guarantor which the Company or a Guarantor  would  be
required  to  report to the SEC pursuant to the Exchange Act,  within  four
days  after the same is reported to the SEC; (f) of any material change  in
accounting policies or financial reporting practices by the Company or  any
of  its consolidated Subsidiaries or any Guarantor; and (g) of any proposed
amendment  (prior  to  adoption thereof) to the Limited  Liability  Company
Agreement  (such  notice  to  be accompanied by  a  copy  of  the  proposed
amendment)  and, after adoption thereof, a copy of the amendment  shall  be
delivered to the Administrative Agent.

           Each notice under this Section shall be accompanied by a written
statement  by a Responsible Officer setting forth details of the occurrence
referred  to  therein, and stating what action the Company or any  affected
Subsidiary  proposes to take with respect thereto and at what  time.   Each
notice  under subsection 6.03(a) shall describe with particularity any  and
all  clauses  or provisions of this Agreement or other Loan  Document  that
have been (or foreseeably will be) breached or violated.

      6.04  Preservation of Existence, Etc.  The Company shall,  and  shall
cause  each  Subsidiary to: (a) preserve and maintain  in  full  force  and
effect  its  existence and good standing under the laws  of  its  state  or
jurisdiction of incorporation; (b) preserve and maintain in full force  and
effect   all  governmental  rights,  privileges,  qualifications,  permits,
licenses and franchises necessary or desirable in the normal conduct of its
business except in connection with transactions permitted by Section  7.03;
(c) use reasonable efforts, in the ordinary course of business, to preserve
its  business organization and goodwill; and (d) preserve or renew  all  of
its registered patents, trademarks, trade names and service marks, the non-
preservation  of  which could reasonably be expected  to  have  a  Material
Adverse Effect.

      6.05  Maintenance of Property.  The Company shall maintain, and shall
cause  each Subsidiary to maintain, and preserve all its property which  is
used  or  useful  in  its  business in good working  order  and  condition,
ordinary wear and tear excepted, and make all necessary repairs thereto and
renewals  and replacements thereof except where the failure to do so  could
not  reasonably  be expected to have a Material Adverse Effect,  except  as
permitted by Section 7.02.  The Company and each Subsidiary shall  use  the
standard  of  care typical in the industry in the operation and maintenance
of its facilities.

      6.06 Insurance.  The Company shall maintain, and shall cause each  of
its   Subsidiaries  to  maintain,  with  financially  sound  and  reputable
independent insurers, insurance with respect to its properties and business
as  may  be  required by law, and insurance against loss or damage  of  the
kinds customarily insured against by Persons engaged in the same or similar
business,  of  such  types and in such amounts as are  customarily  carried
under  similar  circumstances by such other Persons.  Upon request  of  the
Administrative   Agent  or  any  Bank,  the  Company  shall   furnish   the
Administrative Agent, with sufficient copies for each Bank,  at  reasonable
intervals  a certificate of a Responsible Officer of the Company  (and,  if
requested by the Administrative Agent, any insurance broker of the Company)
setting  forth the nature and extent of all insurance maintained by  or  on
behalf  of the Company and its Subsidiaries in accordance with this Section
(and  which, in the case of a certificate of a broker, were placed  through
such broker).

      6.07 Payment of Obligations.  The Company shall, and shall cause each
Subsidiary to, pay and discharge as the same shall become due and  payable,
all  their respective obligations and liabilities, including: (a)  all  tax
liabilities, assessments and governmental charges or levies upon it or  its
properties or assets, unless the same are being contested in good faith  by
appropriate proceedings and adequate reserves in accordance with  GAAP  are
being  maintained by the Company or such Subsidiary; (b) all lawful  claims
which, if unpaid, would by law become a Lien upon its property; and (c) all
indebtedness, as and when due and payable, but subject to any subordination
provisions  contained  in  any  instrument  or  agreement  evidencing  such
Indebtedness.

      6.08 Compliance with Laws.  The Company shall comply, and shall cause
each  Subsidiary to comply, in all material respects with all  Requirements
of  Law  of any Governmental Authority having jurisdiction over it  or  its
business,  except such as may be contested in good faith or as to  which  a
bona fide dispute may exist.

      6.09  ERISA.   The  Company shall not at any  time  be  obligated  to
sponsor, maintain or make contributions to any Pension Plan.

      6.10 Inspection of Property and Books and Records.  The Company shall
maintain and shall cause each Subsidiary to maintain proper books of record
and  account,  in  which full, true and correct entries in conformity  with
GAAP  consistently applied shall be made of all financial transactions  and
matters  involving  the  assets  and  business  of  the  Company  and  such
Subsidiary.   The Company shall permit, and shall cause each Subsidiary  to
permit, representatives and independent contractors of either Agent or  any
Bank  to  visit and inspect any of their respective properties, to  examine
their  respective  corporate,  financial and operating  records,  and  make
copies  thereof  or  abstracts therefrom, and to discuss  their  respective
affairs,  finances and accounts with their respective directors,  officers,
and  independent public accountants, all at the expense of the Company  and
at  such reasonable times during normal business hours and as often as  may
be  reasonably  desired,  upon reasonable advance notice  to  the  Company;
provided,  however, when an Event of Default exists, either  Agent  or  any
Bank  may do any of the foregoing at the expense of the Company at any time
during normal business hours and without advance notice.

      6.11  Environmental Laws.  The Company shall, and  shall  cause  each
Subsidiary to, conduct its operations and keep and maintain its property in
compliance with all Environmental Laws.

     6.12 Use of Proceeds.  The Company shall use the proceeds of the Loans
to  repay principal and interest on existing loans from members and to fund
ongoing interim construction costs in connection with construction  of  the
Drillship including, without limitation, progress payments to the shipyard,
payments  for  owner-furnished equipment ("OFE") and  payments  to  service
providers (including affiliates of the Guarantors) and capitalized interest
costs.

      6.13  Covenants Regarding R&B Subsidiary Guarantors.  (a) The Company
agrees  to  use reasonable efforts to obtain, as soon as practicable  after
Closing,   an  opinion  of   Australian  counsel  in  form  and   substance
satisfactory  to  the  Administrative Agent and  the  Majority  Banks  with
respect to the Guaranty executed by Reading & Bates (A) Pty Ltd.

           (b)   If,  at any time there exists any subsidiary of Reading  &
Bates  that is an obligor (either a borrower or a guarantor) on all or  any
portion of the R&B Credit Facility, the Company shall cause such subsidiary
to  execute  and  deliver  a Guaranty Agreement in substantially  the  form
attached hereto as Exhibit G-2, together with an opinion of counsel of such
subsidiary  in form and substance satisfactory to the Administrative  Agent
and the Majority Banks.

      6.14  Further Assurances.  The Company shall ensure that all  written
information, exhibits and reports furnished to the Agents or the  Banks  do
not and will not contain any untrue statement of a material fact and do not
and  will not omit to state any material fact or any fact necessary to make
the   statements  contained  therein  not  misleading  in  light   of   the
circumstances in which made, and will promptly disclose to the  Agents  and
the Banks and correct any defect or error that may be discovered therein or
in  any  Loan  Document or in the execution, acknowledgment or  recordation
thereof.


                                ARTICLE VII
                                     
                            NEGATIVE COVENANTS

      So  long as any Bank shall have any Commitment hereunder, or any Loan
or other Obligation shall remain unpaid or unsatisfied, unless the Majority
Banks waive compliance in writing:

     7.01 Limitation on Liens.  The Company shall not, and shall not suffer
or  permit any Subsidiary to, directly or indirectly, make, create,  incur,
assume or suffer to exist any Lien upon or with respect to any part of  its
property, whether now owned or hereafter acquired, other than the following
("Permitted Liens"):  (a)  any Lien existing on property of the Company  or
any  Subsidiary on the Closing Date and set forth in Schedule 7.01 securing
Indebtedness outstanding on such date; (b) any Lien created under any  Loan
Document;  (c)  Liens  for taxes, fees, assessments or  other  governmental
charges which are not delinquent or remain payable without penalty,  or  to
the  extent that non-payment thereof is permitted by Section 6.07, provided
that  no  notice  of lien has been filed or recorded under  the  Code;  (d)
carriers',    warehousemen's,   mechanics',   landlords',    materialmen's,
repairmen's  or  other  similar Liens arising in  the  ordinary  course  of
business  which  are  not delinquent or remain payable without  penalty  or
which  are  being  contested in good faith and by appropriate  proceedings,
which  proceedings have the effect of preventing the forfeiture or sale  of
the  property  subject thereto; (e) Liens (other than any Lien  imposed  by
ERISA) consisting of pledges or deposits required in the ordinary course of
business  in connection with workers' compensation, unemployment  insurance
and other social security legislation; (f) Liens consisting of judgment  or
judicial  attachment liens, provided that the enforcement of such Liens  is
effectively  stayed  and  all  such liens in  the  aggregate  at  any  time
outstanding  for the Company and its Subsidiaries do not exceed $1,000,000;
(g)  easements, rights-of-way, restrictions and other similar  encumbrances
incurred  in  the ordinary course of business which, in the aggregate,  are
not  substantial in amount, and which do not in any case materially detract
from  the  value  of  the property subject thereto or  interfere  with  the
ordinary conduct of the businesses of the Company and its Subsidiaries; and
(h) Liens arising solely by virtue of any statutory or common law provision
relating  to  banker's  liens,  rights of set-off  or  similar  rights  and
remedies  as to deposit accounts or other funds maintained with a  creditor
depository  institution; provided that (i) such deposit account  is  not  a
dedicated  cash  collateral  account and is  not  subject  to  restrictions
against  access by the Company in excess of those set forth by  regulations
promulgated  by the FRB, and (ii) such deposit account is not  intended  by
the  Company  or  any Subsidiary to provide collateral  to  the  depository
institution.

      7.02  Disposition of Assets.  The Company shall not,  and  shall  not
suffer  or permit any Subsidiary to, directly or indirectly, sell,  assign,
lease, convey, transfer or otherwise dispose of (whether in one or a series
of  transactions)  any property (including accounts and  notes  receivable,
with  or  without recourse) or enter into any agreement to do  any  of  the
foregoing,  except:  (a) dispositions of inventory, or  used,  worn-out  or
surplus equipment, all in the ordinary course of business; and (b) the sale
of  equipment  to  the extent that such equipment is exchanged  for  credit
against  the  purchase  price  of  similar replacement  equipment,  or  the
proceeds of such sale are reasonably promptly applied to the purchase price
of such replacement equipment.

     7.03 Consolidations and Mergers.  The Company shall not, and shall not
suffer  or  permit any Subsidiary to, merge, consolidate with or  into,  or
convey, transfer, lease or otherwise dispose of (whether in one transaction
or  in  a  series of transactions) all or substantially all of  its  assets
(whether  now  owned or hereafter acquired) to or in favor of  any  Person,
except:  (a) any Subsidiary may merge with the Company, provided  that  the
Company  shall be the continuing or surviving corporation, or with any  one
or  more Subsidiaries, provided that if any transaction shall be between  a
Subsidiary and a Wholly-Owned Subsidiary, the Wholly-Owned Subsidiary shall
be the continuing or surviving corporation; and (b) any Subsidiary may sell
all  or  substantially  all  of its assets (upon voluntary  liquidation  or
otherwise), to the Company or another Wholly-Owned Subsidiary.

      7.04  Loans  and  Investments.  The Company  shall  not  purchase  or
acquire, or suffer or permit any Subsidiary to purchase or acquire, or make
any  commitment  therefor,  any  capital stock,  equity  interest,  or  any
obligations or other securities of, or any interest in, any Person, or make
or  commit  to  make  any advance, loan, extension  of  credit  or  capital
contribution  to  or  any  other investment in, any  Person  including  any
Affiliate  of  the  Company  (together, "Investments"),  except  for:   (a)
Investments  held  by  the  Company or  Subsidiary  in  the  form  of  cash
equivalents; (b) extensions of credit in the nature of accounts  receivable
or  notes receivable arising from the sale or lease of goods or services in
the  ordinary  course  of business; and (c) extensions  of  credit  by  the
Company  to  any of its Wholly-Owned Subsidiaries or by any of its  Wholly-
Owned Subsidiaries to another of its Wholly-Owned Subsidiaries.

     7.05 Limitation on Indebtedness.  The Company shall not, and shall not
suffer or permit any Subsidiary to, create, incur, assume, suffer to exist,
or  otherwise  become or remain directly or indirectly liable with  respect
to,  any  Indebtedness, except: (a) Indebtedness incurred pursuant to  this
Agreement; (b) Indebtedness consisting of Contingent Obligations  permitted
pursuant to Section 7.08; and (c) Indebtedness existing on the Closing Date
and set forth in Schedule 7.05.

      7.06  Transactions with Affiliates.  The Company shall not, and shall
not suffer or permit any Subsidiary to, enter into any transaction with any
Affiliate  of  the Company, except upon fair and reasonable terms  no  less
favorable  to  the  Company  or such Subsidiary  than  would  obtain  in  a
comparable arm's-length transaction with a Person not an Affiliate  of  the
Company or such Subsidiary.

      7.07  Margin Stock; Etc..  (a) The Company shall not, and  shall  not
suffer  or  permit any Subsidiary to, use any portion of the Loan proceeds,
directly  or  indirectly, (i) to purchase or carry Margin  Stock,  (ii)  to
repay or otherwise refinance indebtedness of the Company or others incurred
to  purchase or carry Margin Stock, (iii) to extend credit for the  purpose
of purchasing or carrying any Margin Stock, or (iv) to acquire any security
in any transaction that is subject to Section 13 or 14 of the Exchange Act.

           (b)   The  Company  shall not, directly or indirectly,  use  any
portion   of  the  Loan  proceeds  (i)  knowingly  to  purchase  Ineligible
Securities from BRS during any period in which BRS makes a market  in  such
Ineligible  Securities, (ii) knowingly to purchase during the  underwriting
or  placement period Ineligible Securities being underwritten or  privately
placed  by  BRS,  or  (iii) to make payments of principal  or  interest  on
Ineligible Securities underwritten or privately placed by BRS and issued by
or  for the benefit of the Company or any Affiliate of the Company.  BRS is
a  registered broker-dealer and permitted to underwrite and deal in certain
Ineligible  Securities; and "Ineligible Securities" means securities  which
may  not be underwritten or dealt in by member banks of the Federal Reserve
System  under  Section  16  of the Banking Act  of  1933  (12  U.S.C.   24,
Seventh), as amended.

      7.08  Contingent Obligations.  The Company shall not, and  shall  not
suffer  or  permit any Subsidiary to, create, incur, assume  or  suffer  to
exist any Contingent Obligations except: (a) endorsements for collection or
deposit in the ordinary course of business; (b) Permitted Swap Obligations;
and  (c)  Contingent  Obligations  deemed  necessary  by  the  Company   in
connection with the construction, ownership and operation of the Drillship.

      7.09 Joint Ventures.  The Company shall not, and shall not suffer  or
permit any Subsidiary to, enter into any Joint Venture.

     7.10 Restricted Payments.  The Company shall not, and shall not suffer
or permit any Subsidiary (other than a Wholly-Owned Subsidiary) to, declare
or  make  any  payment or other distribution of assets,  properties,  cash,
rights, obligations or securities on account of any membership interests in
the  Company, or purchase, redeem or otherwise acquire for value  any  such
membership  interests, or any warrants, rights or options to  acquire  such
interests, now or hereafter outstanding.

      7.11 Change in Business.  The Company shall not, and shall not suffer
or   permit   any  Subsidiary  to,  engage  in  any  business  other   than
construction, ownership and operation of the Drillship.

      7.12 Accounting Changes.  The Company shall not, and shall not suffer
or  permit  any  Subsidiary to, make any significant change  in  accounting
treatment or reporting practices, except as required by GAAP, or change the
fiscal year of the Company or of any Subsidiary.


                               ARTICLE VIII
                                     
                             EVENTS OF DEFAULT

      8.01  Events  of Default.  Any of the following shall  constitute  an
"Event of Default":

           (a)   Non-Payment.  The Company fails to make, (i) when  and  as
required  to  be  made herein, payments of any amount of principal  of  any
Loan,  or  (ii) within five (5) Business Days after the same  becomes  due,
payment of any interest, fee or any other amount payable hereunder or under
any other Loan Document; or

           (b)  Representation or Warranty.  Any representation or warranty
by the Company, any Subsidiary or any Guarantor made or deemed made herein,
in  any  other  Loan  Document, or which is contained in  any  certificate,
document  or  financial or other statement by the Company, any  Subsidiary,
any  Guarantor or any Responsible Officer, furnished at any time under this
Agreement,  or  in  or under any other Loan Document, is incorrect  in  any
material respect on or as of the date made or deemed made; or

           (c)  Specific Defaults.  The Company fails to perform or observe
any term, covenant or agreement contained in  Section 6.03; or

          (d)  Other Defaults.  The Company fails to perform or observe any
other  term  or  covenant contained in this Agreement  or  any  other  Loan
Document; provided, however, if such default is capable of being  cured  or
remedied, then such default shall not constitute an Event of Default unless
it shall continue unremedied for a period of 20 days; or

           (e)  Cross-Default.  The Company or any Subsidiary (A) fails  to
make  any  payment in respect of any Indebtedness or Contingent  Obligation
when due (whether by scheduled maturity, required prepayment, acceleration,
demand, or otherwise) and such failure continues after the applicable grace
or notice period, if any, specified in the relevant document on the date of
such  failure;  or (B) fails to perform or observe any other  condition  or
covenant,  or  any  other event shall occur or condition exist,  under  any
agreement  or  instrument relating to any such Indebtedness  or  Contingent
Obligation, and such failure continues after the applicable grace or notice
period,  if  any, specified in the relevant document on the  date  of  such
failure  if the effect of such failure, event or condition is to cause,  or
to  permit  the  holder or holders of such Indebtedness or  beneficiary  or
beneficiaries of such Indebtedness (or a trustee or agent on behalf of such
holder  or  holders  or  beneficiary  or  beneficiaries)  to  cause,   such
Indebtedness  to  be  declared to be due and payable prior  to  its  stated
maturity,  or  such  Contingent  Obligation  to  become  payable  or   cash
collateral in respect thereof to be demanded; or

           (f)   Insolvency;  Voluntary Proceedings.  The  Company  or  any
Subsidiary or any Guarantor (i) ceases or fails to be solvent, or generally
fails to pay, or admits in writing its inability to pay, its debts as  they
become  due, subject to applicable grace periods, if any, whether at stated
maturity  or otherwise; (ii) voluntarily ceases to conduct its business  in
the ordinary course; (iii) commences any Insolvency Proceeding with respect
to  itself; or (iv) takes any action to effectuate or authorize any of  the
foregoing; or

           (g)   Involuntary  Proceedings.  (i) Any involuntary  Insolvency
Proceeding  is commenced or filed against the Company or any Subsidiary  or
any  Guarantor, or any writ, judgment, warrant of attachment, execution  or
similar  process,  is issued or levied against a substantial  part  of  the
Company's or any Subsidiary's or any Guarantor's properties, and  any  such
proceeding  or  petition shall not be dismissed, or  such  writ,  judgment,
warrant  of attachment, execution or similar process shall not be released,
vacated or fully bonded within 60 days after commencement, filing or  levy;
(ii)  the  Company or any Subsidiary or any Guarantor admits  the  material
allegations  of a petition against it in any Insolvency Proceeding,  or  an
order  for relief (or similar order under non-U.S. law) is ordered  in  any
Insolvency  Proceeding;  or (iii) the Company  or  any  Subsidiary  or  any
Guarantor  acquiesces in the appointment of a receiver, trustee, custodian,
conservator,  liquidator, mortgagee in possession (or agent  therefor),  or
other similar Person for itself or a substantial portion of its property or
business; or

            (h)    Monetary   Judgments.   One  or  more  non-interlocutory
judgments,  non-interlocutory  orders, decrees  or  arbitration  awards  is
entered against the Company or any Subsidiary involving in the aggregate  a
liability  (to the extent not covered by independent third-party  insurance
as  to  which  the insurer does not dispute coverage) as to any  single  or
related  series of transactions, incidents or conditions, of $1,000,000  or
more, and the same shall remain unsatisfied, unvacated and unstayed pending
appeal for a period of 10 days after the entry thereof; or

          (i)  Non-Monetary Judgments.  Any non-monetary judgment, order or
decree is entered against the Company or any Subsidiary which does or would
reasonably  be expected to have a Material Adverse Effect, and there  shall
be  any  period  of 10 Business Days during which a stay of enforcement  of
such  judgment or order, by reason of a pending appeal or otherwise,  shall
not be in effect; or

           (j)   Change  of  Control.  There occurs  a  Change  of  Control
(Company); or

           (k)   LLC  Agreement  Amendment  Event.   There  occurs  an  LLC
Agreement Amendment Event;

          (l)  Dissolution or Termination.  There occurs any dissolution or
termination of the Company; or

           (m)   Guarantor  Defaults.  A Guarantor Event of Default  occurs
under  any Guaranty as defined in such Guaranty, or a Guaranty is  for  any
reason  partially  (including with respect to future  advances)  or  wholly
revoked or invalidated, or otherwise ceases to be in full force and effect,
or  a Guarantor or any other Person contests in any manner the validity  or
enforceability  thereof  or denies that it has  any  further  liability  or
obligation thereunder; or any event described at subsections (f) or (g)  of
this Section occurs with respect to a Guarantor.

      8.02  Remedies.   If any Event of Default occurs, the  Administrative
Agent  shall, at the request of, or may, with the consent of, the  Majority
Banks,  (a)  declare  the  commitment of each Bank  to  make  Loans  to  be
terminated, whereupon such commitments shall be terminated; (b) declare the
unpaid principal amount of all outstanding Loans, all interest accrued  and
unpaid  thereon, and all other amounts owing or payable hereunder or  under
any  other  Loan  Document  to  be immediately  due  and  payable,  without
presentment,  demand,  protest, notice of intent to accelerate,  notice  of
acceleration or other notice of any kind, all of which are hereby expressly
waived  by the Company; and (c) exercise on behalf of itself and the  Banks
all  rights  and  remedies available to it and the  Banks  under  the  Loan
Documents or applicable law; provided, however, that upon the occurrence of
any  event specified in subsection (f) or (g) of Section 8.01 (in the  case
of  clause  (i) of subsection (g) upon the expiration of the 60-day  period
mentioned  therein),  the  obligation of each  Bank  to  make  Loans  shall
automatically terminate and the unpaid principal amount of all  outstanding
Loans  and  all interest and other amounts as aforesaid shall automatically
become  due and payable without further act of the Administrative Agent  or
any Bank.

      8.03 Rights Not Exclusive.  The rights provided for in this Agreement
and  the other Loan Documents are cumulative and are not exclusive  of  any
other  rights, powers, privileges or remedies provided by law or in equity,
or  under  any  other  instrument, document or agreement  now  existing  or
hereafter arising.


                                ARTICLE IX
                                     
                                 THE AGENT

     9.01 Appointment and Authorization; "Administrative Agent".  Each Bank
hereby  irrevocably  (subject  to Section 9.09)  appoints,  designates  and
authorizes the Administrative Agent to take such action on its behalf under
the  provisions  of  this Agreement and each other  Loan  Document  and  to
exercise such powers and perform such duties as are expressly delegated  to
it by the terms of this Agreement or any other Loan Document, together with
such  powers  as  are  reasonably incidental thereto.  Notwithstanding  any
provision to the contrary contained elsewhere in this Agreement or  in  any
other Loan Document, the Administrative Agent shall not have any duties  or
responsibilities, except those expressly set forth herein,  nor  shall  the
Administrative  Agent have or be deemed to have any fiduciary  relationship
with  any  Bank,  and  no  implied covenants, functions,  responsibilities,
duties, obligations or liabilities shall be read into this Agreement or any
other  Loan  Document or otherwise exist against the Administrative  Agent.
Without limiting the generality of the foregoing sentence, the use  of  the
term "agent" in this Agreement with reference to the Agents is not intended
to  connote any fiduciary or other implied (or express) obligations arising
under  agency doctrine of any applicable law.  Instead, such term  is  used
merely  as a matter of market custom, and is intended to create or  reflect
only   an   administrative  relationship  between  independent  contracting
parties.

      9.02 Delegation of Duties.  The Administrative Agent may execute  any
of its duties under this Agreement or any other Loan Document by or through
agents,  employees or attorneys-in-fact and shall be entitled to advice  of
counsel   concerning   all  matters  pertaining  to   such   duties.    The
Administrative  Agent  shall  not  be responsible  for  the  negligence  or
misconduct of any agent or attorney-in-fact that it selects with reasonable
care.

      9.03  Liability of Agent-Related Persons.  None of the  Agent-Related
Persons shall (i) be liable for any action taken or omitted to be taken  by
any  of  them under or in connection with this Agreement or any other  Loan
Document or the transactions contemplated hereby (except for its own  gross
negligence or willful misconduct), or (ii) be responsible in any manner  to
any  of  the  Banks for any recital, statement, representation or  warranty
made  by the Company or any Subsidiary or Affiliate of the Company, or  any
officer thereof, contained in this Agreement or in any other Loan Document,
or  in any certificate, report, statement or other document referred to  or
provided  for  in,  or received by the Agents under or in connection  with,
this  Agreement or any other Loan Document, or the validity, effectiveness,
genuineness, enforceability or sufficiency of this Agreement or  any  other
Loan Document, or for any failure of the Company or any other party to  any
Loan Document to perform its obligations hereunder or thereunder.  No Agent-
Related Person shall be under any obligation to any Bank to ascertain or to
inquire  as  to  the  observance or performance of any  of  the  agreements
contained  in, or conditions of, this Agreement or any other Loan Document,
or to inspect the properties, books or records of the Company or any of the
Company's Subsidiaries or Affiliates.

      9.04 Reliance by Administrative Agent.  (a)  The Administrative Agent
shall  be  entitled to rely, and shall be fully protected in relying,  upon
any  writing, resolution, notice, consent, certificate, affidavit,  letter,
telegram,  facsimile,  telex  or  telephone  message,  statement  or  other
document  or conversation believed by it to be genuine and correct  and  to
have  been signed, sent or made by the proper Person or Persons,  and  upon
advice  and statements of legal counsel (including counsel to the Company),
independent  accountants and other experts selected by  the  Administrative
Agent.  The  Administrative Agent shall be fully justified  in  failing  or
refusing to take any action under this Agreement or any other Loan Document
unless  it  shall first receive such advice or concurrence of the  Majority
Banks  as  it deems appropriate and, if it so requests, it shall  first  be
indemnified to its satisfaction by the Banks against any and all  liability
and  expense which may be incurred by it by reason of taking or  continuing
to  take  any such action.  The Administrative Agent shall in all cases  be
fully  protected  in  acting,  or in refraining  from  acting,  under  this
Agreement  or  any  other Loan Document in accordance  with  a  request  or
consent  of  the  Majority Banks and such request and any action  taken  or
failure to act pursuant thereto shall be binding upon all of the Banks.

           (b)   For purposes of determining compliance with the conditions
specified in Section 4.01, each Bank that has executed this Agreement shall
be  deemed  to  have consented to, approved or accepted or to be  satisfied
with, each document or other matter either sent by the Administrative Agent
to such Bank for consent, approval, acceptance or satisfaction, or required
thereunder  to be consented to or approved by or acceptable or satisfactory
to the Bank.

      9.05 Notice of Default.  The Administrative Agent shall not be deemed
to  have  knowledge or notice of the occurrence of any Default or Event  of
Default,  except  with  respect to defaults in the  payment  of  principal,
interest and fees required to be paid to the Administrative Agent  for  the
account  of the Banks, unless the Administrative Agent shall have  received
written  notice  from a Bank or the Company referring  to  this  Agreement,
describing such Default or Event of Default and stating that such notice is
a  "notice of default."  The Administrative Agent will notify the Banks  of
its  receipt of any such notice.  The Administrative Agent shall take  such
action with respect to such Default or Event of Default as may be requested
by  the  Majority Banks in accordance with Article VIII; provided, however,
that  unless  and  until  the Administrative Agent has  received  any  such
request, the Administrative Agent may (but shall not be obligated to)  take
such  action,  or  refrain from taking such action, with  respect  to  such
Default  or  Event of Default as it shall deem advisable  or  in  the  best
interest of the Banks.

      9.06 Credit Decision.  Each Bank acknowledges that none of the Agent-
Related Persons has made any representation or warranty to it, and that  no
act by the Administrative Agent hereinafter taken, including any review  of
the  affairs  of  the  Company and its Subsidiaries,  shall  be  deemed  to
constitute  any representation or warranty by any Agent-Related  Person  to
any  Bank.  Each Bank represents to the Administrative Agent that  it  has,
independently and without reliance upon any Agent-Related Person and  based
on  such  documents and information as it has deemed appropriate, made  its
own   appraisal   of  and  investigation  into  the  business,   prospects,
operations, property, financial and other condition and creditworthiness of
the  Company and its Subsidiaries, and all applicable bank regulatory  laws
relating to the transactions contemplated hereby, and made its own decision
to  enter into this Agreement and to extend credit to the Company  and  its
Subsidiaries   hereunder.   Each  Bank  also  represents  that   it   will,
independently and without reliance upon any Agent-Related Person and  based
on such documents and information as it shall deem appropriate at the time,
continue  to  make  its own credit analysis, appraisals  and  decisions  in
taking  or  not  taking  action under this Agreement  and  the  other  Loan
Documents, and to make such investigations as it deems necessary to  inform
itself  as to the business, prospects, operations, property, financial  and
other  condition and creditworthiness of the Company.  Except for  notices,
reports  and  other documents expressly herein required to be furnished  to
the  Banks by the Administrative Agent, the Agents shall not have any  duty
or  responsibility to provide any Bank with any credit or other information
concerning  the  business, prospects, operations, property,  financial  and
other condition or creditworthiness of the Company which may come into  the
possession of any of the Agent-Related Persons.

      9.07  Indemnification of Agent-Related Persons.  Whether or  not  the
transactions contemplated hereby are consummated, the Banks shall indemnify
upon demand each of the Agent-Related Persons (to the extent not reimbursed
by  or on behalf of the Company and without limiting the obligation of  the
Company  to  do  so),  pro rata, from and against any and  all  Indemnified
Liabilities;  provided,  however, that no Bank  shall  be  liable  for  the
payment  to  the  Agent-Related Persons of any portion of such  Indemnified
Liabilities resulting solely from such Person's gross negligence or willful
misconduct.  Without limitation of the foregoing, each Bank shall reimburse
the Administrative Agent upon demand for its ratable share of any costs  or
out-of-pocket   expenses  (including  Attorney  Costs)  incurred   by   the
Administrative  Agent  in  connection  with  the  preparation,   execution,
delivery,  administration, modification, amendment or enforcement  (whether
through  negotiations, legal proceedings or otherwise) of, or legal  advice
in  respect of rights or responsibilities under, this Agreement, any  other
Loan  Document, or any document contemplated by or referred to  herein,  to
the  extent  that  the  Administrative Agent is  not  reimbursed  for  such
expenses  by or on behalf of the Company.  The undertaking in this  Section
shall  survive the payment of all Obligations hereunder and the resignation
or replacement of the Administrative Agent.

      9.08  Agents  in Individual Capacity.  Each of the Agents  and  their
respective  Affiliates may make loans to, issue letters of credit  for  the
account of, accept deposits from, acquire equity interests in and generally
engage  in any kind of banking, trust, financial advisory, underwriting  or
other  business  with the Company and its Subsidiaries  and  Affiliates  as
though  they were not the Agents hereunder and without notice to or consent
of the Banks.  The Banks acknowledge that, pursuant to such activities, the
Agents  and  their respective Affiliates may receive information  regarding
the Company or its Affiliates (including information that may be subject to
confidentiality obligations in favor of the Company or such Subsidiary) and
acknowledge  that the Agents shall be under no obligation to  provide  such
information to them.  With respect to its Loans, each Agent shall have  the
same  rights  and  powers under this Agreement as any other  Bank  and  may
exercise the same as though it were not an Agent, and the terms "Bank"  and
"Banks" include BofA and NatWest Bank in their individual capacities.

      9.09  Successor  Agent.  The Administrative Agent  may,  and  at  the
request of the Majority Banks shall, resign as Administrative Agent upon 30
days' notice to the Banks.  If the Administrative Agent resigns under  this
Agreement,  the  Majority  Banks  shall appoint  from  among  the  Banks  a
successor  agent for the Banks which successor agent shall be  approved  by
the  Company.   If no successor agent is appointed prior to  the  effective
date  of  the  resignation of the Administrative Agent, the  Administrative
Agent  may  appoint,  after consulting with the Banks and  the  Company,  a
successor  agent  from  among  the  Banks.   Upon  the  acceptance  of  its
appointment  as  successor  agent hereunder,  such  successor  agent  shall
succeed to all the rights, powers and duties of the retiring Administrative
Agent  and the term "Administrative Agent" shall mean such successor  agent
and  the retiring Administrative Agent's appointment, powers and duties  as
Administrative Agent shall be terminated. After any retiring Administrative
Agent's  resignation hereunder as Administrative Agent, the  provisions  of
this Article IX and Sections 10.04 and 10.05 shall inure to its benefit  as
to  any  actions  taken  or  omitted  to  be  taken  by  it  while  it  was
Administrative  Agent  under this Agreement.  If  no  successor  agent  has
accepted appointment as Administrative Agent by the date which is  30  days
following  a  retiring Administrative Agent's notice  of  resignation,  the
retiring  Administrative Agent's resignation shall  nevertheless  thereupon
become  effective  and the Banks shall perform all of  the  duties  of  the
Administrative  Agent hereunder until such time, if any,  as  the  Majority
Banks appoint a successor agent as provided for above.

      9.10  Withholding  Tax.  (a)  If any Bank is a "foreign  corporation,
partnership  or trust" within the meaning of the Code and such Bank  claims
exemption from, or a reduction of, U.S. withholding tax under Sections 1441
or  1442  of  the  Code,  such  Bank  agrees  with  and  in  favor  of  the
Administrative Agent, to deliver to the Administrative Agent: (i)  if  such
Bank  claims an exemption from, or a reduction of, withholding tax under  a
United States tax treaty, two properly completed and executed copies of IRS
Form 1001 before the payment of any interest in the first calendar year and
before  the payment of any interest in each third succeeding calendar  year
during  which interest may be paid under this Agreement; (ii) if such  Bank
claims that interest paid under this Agreement is exempt from United States
withholding  tax because it is effectively connected with a  United  States
trade  or business of such Bank, two properly completed and executed copies
of  IRS  Form 4224 before the payment of any interest is due in  the  first
taxable year of such Bank and in each succeeding taxable year of such  Bank
during  which  interest may be paid under this Agreement;  and  (iii)  such
other form or forms as may be required under the Code or other laws of  the
United  States  as a condition to exemption from, or reduction  of,  United
States withholding tax.

Such  Bank agrees to promptly notify the Administrative Agent of any change
in circumstances which would modify or render invalid any claimed exemption
or reduction.

           (b)   If  any  Bank  claims exemption  from,  or  reduction  of,
withholding tax under a United States tax treaty by providing IRS Form 1001
and  such  Bank  sells, assigns, grants a participation  in,  or  otherwise
transfers all or part of the Obligations of the Company to such Bank,  such
Bank agrees to notify the Administrative Agent of the percentage amount  in
which it is no longer the beneficial owner of Obligations of the Company to
such  Bank.   To  the extent of such percentage amount, the  Administrative
Agent will treat such Bank's IRS Form 1001 as no longer valid.

            (c)    If  any  Bank  claiming  exemption  from  United  States
withholding  tax  by  filing IRS Form 4224 with  the  Administrative  Agent
sells,  assigns, grants a participation in, or otherwise transfers  all  or
part  of  the Obligations of the Company to such Bank, such Bank agrees  to
undertake  sole  responsibility  for complying  with  the  withholding  tax
requirements imposed by Sections 1441 and 1442 of the Code.

           (d)   If  any Bank is entitled to a reduction in the  applicable
withholding  tax, the Administrative Agent may withhold from  any  interest
payment to such Bank an amount equivalent to the applicable withholding tax
after  taking into account such reduction.  However, if the forms or  other
documentation required by subsection (a) of this Section are not  delivered
to  the  Administrative Agent, then the Administrative Agent  may  withhold
from  any  interest payment to such Bank not providing such forms or  other
documentation  an  amount  equivalent to  the  applicable  withholding  tax
imposed by Sections 1441 and 1442 of the Code, without reduction.

          (e)  If the IRS or any other Governmental Authority of the United
States or other jurisdiction asserts a claim that the Administrative  Agent
did  not  properly withhold tax from amounts paid to or for the account  of
any  Bank  (because  the  appropriate form was not  delivered  or  was  not
properly executed, or because such Bank failed to notify the Administrative
Agent  of  a change in circumstances which rendered the exemption from,  or
reduction  of, withholding tax ineffective, or for any other  reason)  such
Bank  shall indemnify the Administrative Agent fully for all amounts  paid,
directly  or  indirectly, by the Administrative Agent as tax or  otherwise,
including  penalties and interest, and including any taxes imposed  by  any
jurisdiction on the amounts payable to the Administrative Agent under  this
Section,  together with all costs and expenses (including Attorney  Costs).
The obligation of the Banks under this subsection shall survive the payment
of all Obligations and the resignation or replacement of the Administrative
Agent.

      9.11 Documentation Agent; Arrangers.  None of the entities identified
on  the  facing page, signature pages or otherwise herein of this Agreement
as  "Documentation  Agent"  or  "Arranger" shall  have  any  right,  power,
obligation,  liability, responsibility or duty under this  Agreement  other
than,  in  the  case  of the Documentation Agent, those applicable  to  all
Banks.   Without limiting the foregoing, none of the entities so identified
as  a  "Documentation Agent" or "Arranger" shall have or be deemed to  have
any  fiduciary relationship with any Bank.  Each Bank acknowledges that  it
has not relied, and will not rely, on any of the entities so identified  in
deciding  to  enter into this Agreement or in taking or not  taking  action
hereunder.


                                 ARTICLE X
                                     
                               MISCELLANEOUS

      10.01      Amendments and Waivers.  No amendment  or  waiver  of  any
provision of this Agreement or any other Loan Document, and no consent with
respect  to any departure by the Company or any Guarantor therefrom,  shall
be effective unless the same shall be in writing and signed by the Majority
Banks  (or  by  the  Administrative Agent at the  written  request  of  the
Majority  Banks)  and  the Company and acknowledged by  the  Administrative
Agent,  and then any such waiver or consent shall be effective only in  the
specific  instance and for the specific purpose for which given;  provided,
however,  that  no  such  waiver, amendment, or consent  shall,  unless  in
writing and signed by all the Banks and the Company and acknowledged by the
Administrative Agent, do any of the following: (a) increase or  extend  the
Commitment of any Bank (or reinstate any Commitment terminated pursuant  to
Section  2.07(b) or Section 8.02); (b) postpone or delay any date fixed  by
this  Agreement  or any other Loan Document for any payment  of  principal,
interest, fees or other amounts due to the Banks (or any of them) hereunder
or  under any other Loan Document; (c) reduce the principal of, or the rate
of interest specified herein on any Loan, or (subject to clause (ii) below)
any  fees  or  other  amounts payable hereunder or  under  any  other  Loan
Document;  (d) change the percentage of the Commitments or of the aggregate
unpaid principal amount of the Loans which is required for the Banks or any
of them to take any action hereunder; or (e) amend this Section, or Section
2.14, or any provision herein providing for consent or other action by  all
Banks; (f) discharge any Guarantor; (g) amend the definitions of "Change of
Control  (Company)",  "Change of Control (Conoco)" or  "Change  of  Control
Trigger  Event  (Conoco)",  or  (h) waive or amend  Section  8.01(j);  and,
provided further, that (i) no amendment, waiver or consent shall, unless in
writing  and signed by the Administrative Agent in addition to the Majority
Banks or all the Banks, as the case may be, affect the rights or duties  of
the  Administrative Agent under this Agreement or any other Loan  Document,
and  (ii) the Fee Letter may be amended, or rights or privileges thereunder
waived, in a writing executed by the parties thereto.

      10.02      Notices.  (a)  All notices, requests, consents, approvals,
waivers and other communications shall be in writing (including, unless the
context  expressly otherwise provides, by facsimile transmission,  provided
that  any  matter  transmitted by the Company by  facsimile  (i)  shall  be
immediately  confirmed by a telephone call to the recipient at  the  number
specified  on  Schedule  10.02,  and (ii) shall  be  followed  promptly  by
delivery  of a hard copy original thereof) and mailed, faxed or  delivered,
to the address or facsimile number specified for notices on Schedule 10.02;
or,  as directed to the Company or the Administrative Agent, to such  other
address  as  shall be designated by such party in a written notice  to  the
other parties, and as directed to any other party, at such other address as
shall  be  designated by such party in a written notice to the Company  and
the Administrative Agent.

           (b)   All such notices, requests and communications shall,  when
transmitted  by  overnight delivery, or faxed, be effective when  delivered
for  overnight  (next-day)  delivery, or transmitted  in  legible  form  by
facsimile machine, respectively, or if mailed, upon the third Business  Day
after  the  date  deposited  into the U.S.  mail,  or  if  delivered,  upon
delivery;  except  that  notices pursuant  to  Article  II  or  IX  to  the
Administrative Agent shall not be effective until actually received by  the
Administrative Agent.

           (c)   Any  agreement of the Administrative Agent and  the  Banks
herein  to receive certain notices by telephone or facsimile is solely  for
the  convenience  and  at the request of the Company.   The  Administrative
Agent  and  the  Banks shall be entitled to rely on the  authority  of  any
Person  purporting to be a Person authorized by the Company  to  give  such
notice  and  the  Administrative Agent and the Banks  shall  not  have  any
liability to the Company or other Person on account of any action taken  or
not  taken  by the Administrative Agent or the Banks in reliance upon  such
telephonic or facsimile notice.  The obligation of the Company to repay the
Loans  shall not be affected in any way or to any extent by any failure  by
the  Administrative Agent and the Banks to receive written confirmation  of
any  telephonic  or  facsimile notice or the receipt by the  Administrative
Agent  and the Banks of a confirmation which is at variance with the  terms
understood by the Administrative Agent and the Banks to be contained in the
telephonic or facsimile notice.

      10.03     No Waiver; Cumulative Remedies.  No failure to exercise and
no  delay  in  exercising, on the part of the Administrative Agent  or  any
Bank, any right, remedy, power or privilege hereunder, shall operate  as  a
waiver  thereof;  nor shall any single or partial exercise  of  any  right,
remedy, power or privilege hereunder preclude any other or further exercise
thereof or the exercise of any other right, remedy, power or privilege.

     10.04     Costs and Expenses.  The Company shall:

           (a)   whether  or not the transactions contemplated  hereby  are
consummated,  pay  or  reimburse  BofA  (including  in  its   capacity   as
Administrative   Agent)  and  NatWest  (including  in   its   capacity   as
Documentation Agent) within five (5) Business Days after demand (subject to
subsection 4.01(e)) for all costs and expenses incurred by each of them  in
connection  with  the  development, preparation, delivery,  administration,
syndication,  and  execution of, and any amendment, supplement,  waiver  or
modification to (in each case, whether or not consummated), this Agreement,
any  Loan  Document and any other documents prepared in connection herewith
or  therewith, and the consummation of the transactions contemplated hereby
and thereby, including Attorney Costs (but not including any allocated cost
of  internal  counsel  incurred  in connection  with  preparation  of  this
Agreement  or preparation for Closing) incurred by BofA (including  in  its
capacity as Administrative Agent) and NatWest (including in its capacity as
Documentation Agent) with respect thereto; and

           (b)   pay  or reimburse each of the Agents, Arrangers and  Banks
within five Business Days after demand (subject to subsection 4.01(e))  for
all  costs  and  expenses (including Attorney Costs) incurred  by  them  in
connection with the enforcement, attempted enforcement, or preservation  of
any  rights  or  remedies under this Agreement or any other  Loan  Document
during  the  existence  of  a  Default or an  Event  of  Default  or  after
acceleration  of the Loans (including in connection with any  "workout"  or
restructuring  regarding  the  Loans,  and  including  in  any   Insolvency
Proceeding or appellate proceeding).

      10.05      Company Indemnification.  Whether or not the  transactions
contemplated  hereby are consummated, the Company shall  indemnify,  defend
and  hold  each of the Agent-Related Persons, and each Bank,  and  each  of
their  respective  officers,  directors,  employees,  counsel,  agents  and
attorneys-in-fact (each, an "Indemnified Person") harmless from and against
any  and all liabilities, obligations, losses, damages, penalties, actions,
judgments,  suits,  costs,  charges, expenses and disbursements  (including
Attorney  Costs)  of any kind or nature whatsoever which may  at  any  time
(including  at  any  time  following  repayment  of  the  Loans   and   the
termination, resignation or replacement of an Agent or replacement  of  any
Bank)   be  imposed on, incurred by or asserted against any such Person  in
any  way  relating  to  or arising out of this Agreement  or  any  document
contemplated  by  or  referred to herein, or the transactions  contemplated
hereby,  or  any  action taken or omitted by any such Person  under  or  in
connection  with  any  of  the foregoing, including  with  respect  to  any
investigation,   litigation   or  proceeding  (including   any   Insolvency
Proceeding  or  appellate proceeding) related to or  arising  out  of  this
Agreement or the Loans or the use of the proceeds thereof, whether  or  not
any Indemnified Person is a party thereto (all the foregoing, collectively,
the  "Indemnified Liabilities"); provided, that the Company shall  have  no
obligation  hereunder to any Indemnified Person with respect to Indemnified
Liabilities  resulting  solely  from  the  gross  negligence   or   willful
misconduct of such Indemnified Person. The agreements in this Section shall
survive payment of all other Obligations.

     10.06     Marshalling; Payments Set Aside.  Neither the Agents nor the
Banks shall be under any obligation to marshall any assets in favor of  the
Company or any other Person or against or in payment of any or all  of  the
Obligations.   To  the  extent that the Company  makes  a  payment  to  the
Administrative  Agent  or the Banks, or the Agents or  the  Banks  exercise
their right of set-off, and such payment or the proceeds of such set-off or
any part thereof are subsequently invalidated, declared to be fraudulent or
preferential,  set aside or required (including pursuant to any  settlement
entered  into by such Agent or Bank in its discretion) to be  repaid  to  a
trustee,  receiver  or any other party, in connection with  any  Insolvency
Proceeding  or  otherwise,  then (a) to the extent  of  such  recovery  the
obligation  or  part thereof originally intended to be satisfied  shall  be
revived  and continued in full force and effect as if such payment had  not
been  made  or  such set-off had not occurred, and (b) each Bank  severally
agrees to pay to the Administrative Agent upon demand its pro rata share of
any amount so recovered from or repaid by the Administrative Agent.

      10.07      Successors and Assigns.  The provisions of this  Agreement
shall  be  binding upon and inure to the benefit of the parties hereto  and
their  respective successors and assigns, except that the Company  may  not
assign  or  transfer any of its rights or obligations under this  Agreement
without  the  prior written consent of the Administrative  Agent  and  each
Bank.

      10.08     Assignments, Participations, Etc.  (a)  Any Bank may,  with
the  written consent of the Company (except that the consent of the Company
shall not be required during the existence of an Event of Default) and  the
Administrative  Agent,  which  consent  of  the  Company   shall   not   be
unreasonably  withheld,  at any time assign and delegate  to  one  or  more
Eligible Assignees (provided that no written consent of the Company or  the
Administrative  Agent shall be required in connection with  any  assignment
and  delegation by a Bank to an Eligible Assignee that is an  Affiliate  of
such  Bank)  (each an "Assignee") all, or any ratable part of all,  of  the
Loans,  the Commitments and the other rights and obligations of  such  Bank
hereunder;  provided, however, that in the event a Bank assigns  less  than
all  of  its interests hereunder, it shall retain a Commitment of not  less
than  $10,000,000 after the consummation of such assignment;  and  provided
further that (i) the Company and the Agents may continue to deal solely and
directly with such Bank in connection with the interest so assigned  to  an
Assignee until (A) written notice of such assignment, together with payment
instructions,  addresses  and  related  information  with  respect  to  the
Assignee, shall have been given to the Company and the Administrative Agent
by  such  Bank and the Assignee; (B) such Bank and its Assignee shall  have
delivered  to  the Company and the Administrative Agent an  Assignment  and
Acceptance in the form of Exhibit E ("Assignment and Acceptance")  together
with  any  Note or Notes subject to such assignment; and (C)  the  assignor
Bank  or Assignee has paid to the Administrative Agent a processing fee  in
the amount of $3,500.00.

           (b)   From  and  after  the date that the  Administrative  Agent
notifies  the assignor Bank that it has received (and provided its  consent
with  respect to) an executed Assignment and Acceptance and payment of  the
above-referenced  processing fee, (i) the Assignee thereunder  shall  be  a
party hereto and, to the extent that rights and obligations hereunder  have
been  assigned to it pursuant to such Assignment and Acceptance, shall have
the rights and obligations of a Bank under the Loan Documents, and (ii) the
assignor  Bank  shall, to the extent that rights and obligations  hereunder
and  under  the other Loan Documents have been assigned by it  pursuant  to
such  Assignment and Acceptance, relinquish its rights and be released from
its obligations under the Loan Documents.

          (c)  Within five Business Days after its receipt of notice by the
Administrative  Agent  that  it has received  an  executed  Assignment  and
Acceptance  and  payment  of  the processing fee,  (and  provided  that  it
consents  to  such assignment in accordance with subsection 10.08(a)),  the
Company  shall,  upon  request, execute and deliver to  the  Administrative
Agent,  new  Notes evidencing such Assignee's assigned Loans and Commitment
and,  if  the  assignor Bank has retained a portion of its  Loans  and  its
Commitment, replacement Notes in the principal amount of the Loans retained
by  the assignor Bank (such Notes to be in exchange for, but not in payment
of,  the Notes held by such Bank).  Upon the execution of such Notes by the
Company, the Assignee and the assignor Bank shall surrender to the  Company
the  old  Notes  in  substitution of which the  new  Notes  were  executed.
Immediately  upon each Assignee's making its processing fee  payment  under
the Assignment and Acceptance, this Agreement shall be deemed to be amended
to the extent, but only to the extent, necessary to reflect the addition of
the  Assignee  and  the  resulting adjustment of  the  Commitments  arising
therefrom.  The  Commitment allocated to each Assignee  shall  reduce  such
Commitments of the assigning Bank pro tanto.

           (d)   Any  Bank  may at any time sell to one or more  commercial
banks  or  other  Persons not Affiliates of the Company  (a  "Participant")
participating interests in any Loans, the Commitment of that Bank  and  the
other  interests of that Bank (the "originating Bank") hereunder and  under
the  other  Loan  Documents; provided, however, that  (i)  the  originating
Bank's  obligations under this Agreement shall remain unchanged,  (ii)  the
originating  Bank  shall remain solely responsible for the  performance  of
such  obligations, (iii) the Company and the Agent shall continue  to  deal
solely  and  directly  with the originating Bank  in  connection  with  the
originating  Bank's  rights and obligations under this  Agreement  and  the
other  Loan  Documents,  and  (iv) no Bank  shall  transfer  or  grant  any
participating  interest under which the Participant has rights  to  approve
any  amendment to, or any consent or waiver with respect to, this Agreement
or any other Loan Document, except to the extent such amendment, consent or
waiver  would  require unanimous consent of the Banks as described  in  the
first proviso to Section 10.01.  In the case of any such participation, the
Participant  shall be entitled to the benefit of Sections  3.01,  3.03  and
10.05  as though it were also a Bank hereunder, and, if amounts outstanding
under  this  Agreement are due and unpaid, or shall have been  declared  or
shall  have  become  due and payable upon the occurrence  of  an  Event  of
Default,  each Participant shall be deemed to have the right of set-off  in
respect of its participating interest in amounts owing under this Agreement
to  the  same  extent as if the amount of its participating  interest  were
owing directly to it as a Bank under this Agreement.

           (e)  Notwithstanding any other provision in this Agreement,  any
Bank  may at any time create a security interest in, or pledge, all or  any
portion  of  its rights under and interest in this Agreement and  the  Note
held  by  it  in  favor  of  any Federal Reserve Bank  in  accordance  with
Regulation  A  of  the FRB or U.S. Treasury Regulation 31 CFR  203.14,  and
such  Federal Reserve Bank may enforce such pledge or security interest  in
any manner permitted under applicable law.

      10.09     Confidentiality.  Each Bank agrees to take and to cause its
Affiliates to take normal and reasonable precautions and exercise due  care
to   maintain   the  confidentiality  of  all  information  identified   as
"confidential"  or  "secret"  by the Company and  provided  to  it  by  the
Company  or any Subsidiary, or by the Administrative Agent on the Company's
or  such  Subsidiary's  behalf, under this  Agreement  or  any  other  Loan
Document,  and  neither it nor any of its Affiliates  shall  use  any  such
information  other  than  in  connection with or  in  enforcement  of  this
Agreement and the other Loan Documents or in connection with other business
now  or  hereafter  existing  or  contemplated  with  the  Company  or  any
Subsidiary;  except  to  the extent such information  (i)  was  or  becomes
generally  available to the public other than as a result of disclosure  by
the  Bank,  or  (ii) was or becomes available on a  non-confidential  basis
from  a  source  other than the Company, provided that such source  is  not
bound  by  a confidentiality agreement with the Company known to the  Bank;
provided, however, that any Bank may disclose such information (A)  at  the
request  or  pursuant to any requirement of any Governmental  Authority  to
which the Bank is subject or in connection with an examination of such Bank
by  any  such  authority; (B) pursuant to subpoena or other court  process;
(C)  when  required  to  do so in accordance with  the  provisions  of  any
applicable  Requirement  of Law; (D) to the extent reasonably  required  in
connection  with  any litigation or proceeding to which either  Agent,  any
Bank  or  their  respective  Affiliates may be party;  (E)  to  the  extent
reasonably required in connection with the exercise of any remedy hereunder
or  under  any other Loan Document; (F) to such Bank's independent auditors
and other professional advisors; (G) to any Participant or Assignee, actual
or  potential,  provided that such Person agrees in writing  to  keep  such
information  confidential  to  the  same  extent  required  of  the   Banks
hereunder;  (H)  as  to any Bank or its Affiliate, as  expressly  permitted
under   the   terms   of   any  other  document  or   agreement   regarding
confidentiality  to  which the Company or any Subsidiary  is  party  or  is
deemed party with such Bank or such Affiliate; and (I) to its Affiliates.

      10.10      Set-off.   In addition to any rights and remedies  of  the
Banks provided by law, if an Event of Default exists or the Loans have been
accelerated,  each Bank is authorized at any time and from  time  to  time,
without  prior notice to the Company, any such notice being waived  by  the
Company  to the fullest extent permitted by law, to set off and  apply  any
and all deposits (general or special, time or demand, provisional or final)
at any time held by, and other indebtedness at any time owing by, such Bank
to  or  for  the credit or the account of the Company against any  and  all
Obligations owing to such Bank, now or hereafter existing, irrespective  of
whether or not the Administrative Agent or such Bank shall have made demand
under this Agreement or any Loan Document and although such Obligations may
be  contingent  or  unmatured.  Each Bank agrees  promptly  to  notify  the
Company and the Administrative Agent after any such set-off and application
made  by such Bank; provided, however, that the failure to give such notice
shall not affect the validity of such set-off and application.

      10.11      Interest.   It is the intention of the parties  hereto  to
comply   strictly   with  applicable  usury  laws,  if  any;   accordingly,
notwithstanding any provision to the contrary in this Agreement, the  Notes
or  in  any  of  the  other Loan Documents securing the payment  hereof  or
otherwise relating hereto, in no event shall this Agreement, the  Notes  or
such  other Loan Documents require or permit the payment, charging, taking,
reserving,  or receiving of any sums constituting interest under applicable
laws  which  exceed the maximum nonusurious amount permitted by such  laws.
If any such excess interest is contracted for, charged, taken, reserved, or
received  in  connection with the Loans or in any  of  the  Loan  Documents
securing  the  payment  hereof or otherwise  relating  hereto,  or  in  any
communication by the Agents or the Banks or any other person to the Company
or  any  other  person, or in the event all or part  of  the  principal  or
interest thereof shall be prepaid or accelerated, so that under any of such
circumstances  or  under any other circumstance whatsoever  the  amount  of
interest  contracted  for, charged, taken, reserved,  or  received  on  the
amount of principal actually outstanding from time to time under the  Notes
shall  exceed  the  maximum  nonusurious amount of  interest  permitted  by
applicable usury laws, then in any such event it is agreed as follows:  (i)
the provisions of this paragraph shall govern and control, (ii) neither the
Company  nor any other person or entity now or hereafter liable for payment
of the Obligations shall be obligated to pay the amount of such interest to
the  extent  such interest is in excess of the maximum amount  of  interest
permitted by applicable usury laws, (iii) any such excess which is  or  has
been received notwithstanding this paragraph shall be credited against  the
then unpaid principal balance of the Loans, or, if no principal balance  is
then  outstanding, refunded to the Company, and (iv) the provisions of this
Agreement  and  the  other  Loan Documents, and any  communication  to  the
Company  shall  immediately be deemed reformed  and  such  excess  interest
reduced,  without  the necessity of executing any other  document,  to  the
maximum  lawful  rate  allowed under applicable laws as  now  or  hereafter
construed  by  courts  having  jurisdiction  hereof  or  thereof.   Without
limiting the foregoing, all calculations of the rate of interest contracted
for,  charged,  taken,  reserved,  or  received  in  connection  with  this
Agreement  which are made for the purpose of determining whether such  rate
exceeds   the  maximum  nonusurious  rate  shall  be  made  by  amortizing,
prorating, allocating and spreading during the period of the full  term  of
the  Loans, including all prior and subsequent renewals and extensions, all
interest at any time contracted for, charged, taken, reserved, or received.
The  terms  of this paragraph shall be deemed to be incorporated  in  every
document  and  communication  relating to  the  Loans  or  any  other  Loan
Document.

      10.12     Notification of Addresses, Lending Offices, Etc.  Each Bank
shall  notify  the Administrative Agent in writing of any  changes  in  the
address  to  which notices to the Bank should be directed, of addresses  of
any  Lending Office, of payment instructions in respect of all payments  to
be made to it hereunder and of such other administrative information as the
Administrative Agent shall reasonably request.

      10.13     Counterparts.  This Agreement may be executed in any number
of  separate counterparts, each of which, when so executed, shall be deemed
an original, and all of said counterparts taken together shall be deemed to
constitute but one and the same instrument.

      10.14      Severability.  The illegality or unenforceability  of  any
provision  of  this  Agreement  or  any instrument  or  agreement  required
hereunder  shall  not  in  any  way  affect  or  impair  the  legality   or
enforceability  of  the  remaining provisions  of  this  Agreement  or  any
instrument or agreement required hereunder.

      10.15      No  Third Parties Benefited.  This Agreement is  made  and
entered into for the sole protection and legal benefit of the Company,  the
Banks,  the  Agents  and  the Agent-Related Persons,  and  their  permitted
successors  and assigns, and no other Person shall be a direct or  indirect
legal  beneficiary of, or have any direct or indirect cause  of  action  or
claim  in  connection  with,  this Agreement  or  any  of  the  other  Loan
Documents.

     10.16     Governing Law and Jurisdiction.  (a)  THIS AGREEMENT AND THE
OTHER  LOAN  DOCUMENTS  SHALL BE GOVERNED BY, AND CONSTRUED  IN  ACCORDANCE
WITH,  THE  LAW OF THE STATE OF NEW YORK; PROVIDED THAT THE AGENT  AND  THE
BANKS SHALL RETAIN ALL RIGHTS ARISING UNDER FEDERAL LAW.

           (b)   ANY  LEGAL  ACTION  OR PROCEEDING  WITH  RESPECT  TO  THIS
AGREEMENT  OR ANY OTHER LOAN DOCUMENT MAY BE BROUGHT IN THE COURTS  OF  THE
STATE OF NEW YORK OR OF THE UNITED STATES FOR THE SOUTHERN DISTRICT OF  NEW
YORK, AND BY EXECUTION AND DELIVERY OF THIS AGREEMENT, EACH OF THE COMPANY,
THE  AGENTS  AND  THE  BANKS CONSENTS, FOR ITSELF AND  IN  RESPECT  OF  ITS
PROPERTY, TO THE NON-EXCLUSIVE JURISDICTION OF THOSE COURTS.  EACH  OF  THE
COMPANY,  THE  AGENTS  AND  THE  BANKS IRREVOCABLY  WAIVES  ANY  OBJECTION,
INCLUDING  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  ACTION OR PROCEEDING IN SUCH JURISDICTION IN RESPECT OF THIS AGREEMENT
OR ANY DOCUMENT RELATED HERETO.  THE COMPANY HEREBY IRREVOCABLY DESIGNATES,
APPOINTS  AND  EMPOWERS CT CORPORATION WITH OFFICES ON THE DATE  HEREOF  AT
1633  BROADWAY,  NEW YORK, NEW YORK 10019, AS ITS DESIGNEE,  APPOINTEE  AND
AGENT  TO  RECEIVE, ACCEPT AND ACKNOWLEDGE FOR AND ON ITS  BEHALF,  AND  IN
RESPECT  OF  ITS  PROPERTY, SERVICE OF ANY AND ALL LEGAL PROCESS,  SUMMONS,
NOTICES AND DOCUMENTS WHICH MAY BE SERVED IN ANY SUCH ACTION OR PROCEEDING.
IF  FOR  ANY  REASON SUCH DESIGNEE, APPOINTEE AND AGENT SHALL CEASE  TO  BE
AVAILABLE  TO ACT AS SUCH, THE COMPANY AGREES TO DESIGNATE A NEW  DESIGNEE,
APPOINTEE AND AGENT IN NEW YORK ON THE TERMS AND FOR THE PURPOSES  OF  THIS
PROVISION  SATISFACTORY  TO  THE  ADMINISTRATIVE  AGENT.   TO  THE   EXTENT
PERMITTED  BY APPLICABLE LAW, THE COMPANY FURTHER IRREVOCABLY  CONSENTS  TO
THE  SERVICE OF PROCESS OUT OF ANY OF THE AFOREMENTIONED COURTS IN ANY SUCH
ACTION  OR  PROCEEDING BY THE MAILING OF COPIES THEREOF  BY  REGISTERED  OR
CERTIFIED MAIL, POSTAGE PREPAID, TO IT AT ITS ADDRESS SET FORTH IN SCHEDULE
10.02,  SUCH  SERVICE  TO  BECOME EFFECTIVE TEN DAYS  AFTER  SUCH  MAILING.
NOTHING HEREIN SHALL AFFECT THE RIGHT OF EITHER AGENT OR ANY BANK TO  SERVE
PROCESS  IN  ANY  OTHER  MANNER  PERMITTED BY  LAW  OR  TO  COMMENCE  LEGAL
PROCEEDINGS  OR  TO  OTHERWISE PROCEED AGAINST THE  COMPANY  IN  ANY  OTHER
JURISDICTION.   THE COMPANY, THE AGENTS AND THE BANKS EACH  WAIVE  PERSONAL
SERVICE  OF ANY SUMMONS, COMPLAINT OR OTHER PROCESS, WHICH MAY BE  MADE  BY
ANY OTHER MEANS PERMITTED BY NEW YORK LAW.

     10.17     Waiver of Jury Trial.  THE COMPANY, THE BANKS AND THE AGENTS
EACH WAIVE THEIR RESPECTIVE RIGHTS TO A TRIAL BY JURY OF ANY CLAIM OR CAUSE
OF ACTION
BASED  UPON OR ARISING OUT OF OR RELATED TO THIS AGREEMENT, THE OTHER  LOAN
DOCUMENTS,  OR  THE  TRANSACTIONS CONTEMPLATED HEREBY OR  THEREBY,  IN  ANY
ACTION,  PROCEEDING OR OTHER LITIGATION OF ANY TYPE BROUGHT BY ANY  OF  THE
PARTIES AGAINST ANY OTHER PARTY OR ANY AGENT-RELATED PERSON, PARTICIPANT OR
ASSIGNEE,  WHETHER  WITH  RESPECT  TO  CONTRACT  CLAIMS,  TORT  CLAIMS,  OR
OTHERWISE.  THE COMPANY, THE BANKS AND THE AGENTS EACH AGREE THAT ANY  SUCH
CLAIM  OR CAUSE OF ACTION SHALL BE TRIED BY A COURT TRIAL WITHOUT  A  JURY.
WITHOUT  LIMITING  THE  FOREGOING, THE PARTIES  FURTHER  AGREE  THAT  THEIR
RESPECTIVE
RIGHT  TO A TRIAL BY JURY IS WAIVED BY OPERATION OF THIS SECTION AS TO  ANY
ACTION, COUNTERCLAIM OR OTHER PROCEEDING WHICH SEEKS, IN WHOLE OR IN  PART,
TO  CHALLENGE THE VALIDITY OR ENFORCEABILITY OF THIS AGREEMENT OR THE OTHER
LOAN DOCUMENTS OR ANY PROVISION HEREOF OR THEREOF.  THIS WAIVER SHALL APPLY
TO  ANY  SUBSEQUENT AMENDMENTS, RENEWALS, SUPPLEMENTS OR  MODIFICATIONS  TO
THIS AGREEMENT AND THE OTHER LOAN DOCUMENTS.

      10.18     Entire Agreement.  This Agreement, together with the  other
Loan  Documents, embodies the entire agreement and understanding among  the
Company,   the  Banks  and  the  Agents,  and  supersedes  all   prior   or
contemporaneous  agreements and understandings of such Persons,  verbal  or
written, relating to the subject matter hereof and thereof.

      THIS  WRITTEN LOAN AGREEMENT, TOGETHER WITH THE OTHER LOAN DOCUMENTS,
REPRESENTS  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.

      IN WITNESS WHEREOF, the parties hereto have caused this Agreement  to
be duly executed and delivered by their proper and duly authorized officers
as of the day and year first above written.

                                 DEEPWATER DRILLING II L.L.C.
                                 
                                 
                                 By:
                                 Name:
                                 Title:
                                 
                                 


                    [SIGNATURES CONTINUED ON NEXT PAGE]

                                 BANK OF AMERICA NATIONAL TRUST
                                 AND SAVINGS ASSOCIATION, as
                                 Administrative Agent
                                 
                                 
                                 By:
                                     Claire Liu
                                     Managing Director
                                 
                                 BANK OF AMERICA NATIONAL TRUST
                                 AND SAVINGS ASSOCIATION, as a
                                 Bank
                                 
                                 
                                 By:
                                     Claire Liu
                                     Managing Director
                                 

                    [SIGNATURES CONTINUED ON NEXT PAGE]


                                 NATIONAL WESTMINSTER BANK PLC
                                 NEW YORK BRANCH, as
                                 Documentation Agent and as a
                                 Bank
                                 
                                 
                                 By:
                                 Name:
                                 Title:
                                 
                                 NATIONAL WESTMINSTER BANK PLC
                                 NASSAU BRANCH, as a Bank
                                 
                                 
                                 By:
                                 Name:
                                 Title:
                                 

                                     
                               SCHEDULE 1.01
                                     
                                DEFINITIONS

      1.    As used in this Credit Agreement, the following terms have  the
following meanings:

           "Affiliate"  means,  as to any Person, any other  Person  which,
directly  or  indirectly, is in control of, is controlled by, or  is  under
common  control  with,  such Person. A Person shall be  deemed  to  control
another Person if the controlling Person possesses, directly or indirectly,
the  power to direct or cause the direction of the management and  policies
of  the  other Person, whether through the ownership of voting  securities,
membership interests, by contract, or otherwise.

           "Administrative Agent" means BofA in its capacity as  agent  for
the Banks hereunder, and any successor agent arising under Section 9.09.

            "Agent-Related  Persons"  means  BofA,  NatWest  Bank  and  any
successor  agent arising under Section 9.09, together with their respective
Affiliates   (including  the  Arrangers),  and  the  officers,   directors,
employees, agents and attorneys-in-fact of such Persons and Affiliates.

           "Administrative Agent's Payment Office" means  the  address  for
payments  set  forth  on  Schedule 10.02  or  such  other  address  as  the
Administrative Agent may from time to time specify.

          "Agreement" means this Credit Agreement.

           "Applicable Margin" means (i) with respect to Base  Rate  Loans,
0.00%; and (ii) with respect to Offshore Rate Loans, 0.35%.

           "Arrangers"  means BancAmerica ROBERTSON STEPHENS,  and  NatWest
Markets (each an "Arranger").

          "Assignee" has the meaning specified in subsection 10.08(a).

          "Attorney Costs" means and includes all fees and disbursements of
any  law  firm  or other external counsel, the allocated cost  of  internal
legal services and all disbursements of internal counsel.

           "Bank"  means  the  institutions specified in  the  introductory
clause hereto.

          "Bankruptcy Code" means the Federal Bankruptcy Reform Act of 1978
(11 U.S.C. 101, et seq.).

           "Base  Rate" means, for any day, the higher of:  (a)  0.50%  per
annum above the latest Federal Funds Rate; and (b) the rate of interest  in
effect for such day as publicly announced from time to time by BofA in  San
Francisco, California, as its "reference rate."  (The "reference rate" is a
rate  set  by  BofA based upon various factors including BofA's  costs  and
desired return, general economic conditions and other factors, and is  used
as a reference point for pricing some loans, which may be priced at, above,
or  below such announced rate.)  Any change in the reference rate announced
by  BofA  shall take effect at the opening of business on the day specified
in the public announcement of such change.

           "Base  Rate Loan" means a Loan that bears interest based on  the
Base Rate.

            "BofA"  means  Bank  of  America  National  Trust  and  Savings
Association, a national banking association.

           "Borrowing" means a borrowing hereunder consisting of  Loans  of
the  same  Type  made  to the Company on the same day by  the  Banks  under
Article II, and, other than in the case of Base Rate Loans, having the same
Interest Period.

          "Borrowing Date" means any date on which a Borrowing occurs under
Section 2.03.

          "BRS" means BancAmerica ROBERTSON STEPHENS.

           "Business  Day" means any day other than a Saturday,  Sunday  or
other  day on which commercial banks in New York City or San Francisco  are
authorized or required by law to close and, if the applicable Business  Day
relates  to any Offshore Rate Loan, means such a day on which dealings  are
carried on in the applicable offshore dollar interbank market.

           "Capital  Adequacy Regulation" means any guideline,  request  or
directive of any central bank or other Governmental Authority, or any other
law,  rule or regulation, whether or not having the force of law,  in  each
case,  regarding  capital  adequacy of  any  bank  or  of  any  corporation
controlling a bank.

           "Change  of  Control (Company)" means the date  upon  which  (i)
Conoco  Development II Inc. ("CDII") shall cease to own, free and clear  of
all  Liens  (other  than  Liens granted to the  Company  and  RB  Deepwater
Exploration  II  ("RBII") pursuant to Section 5.6 of the Limited  Liability
Company  Agreement), at least 40% of the equity in the Company, or (ii)  RB
Deepwater Exploration II ("RBII") shall cease to own, free and clear of all
Liens (other than Liens granted to the Company and CDII pursuant to Section
5.6 of the Limited Liability Company Agreement), all the equity interest in
the  Company not owned by Conoco; or (iii) R&B shall cease to own, free and
clear of all Liens, directly or indirectly, all of the equity interests  in
RBII,  or  (iv) CDII shall cease to be an Affiliate of Conoco; or (v)  CDII
shall cease to have at least fifty percent (50%) management control of  the
Company.

          "Change of Control (Conoco)" means (a) such time as E. I. du Pont
de Nemours and Company ("DuPont") shall not own directly or indirectly more
than fifty percent (50%) of the beneficial ownership interests in, and  the
voting  stock of, Conoco, or (b) a sale of all or substantially all of  the
assets  of Conoco and its Subsidiaries taken as a whole to any "person"  or
"group" within the meaning of Section 13(d)(3) and Section 14(d)(2) of  the
Securities  and Exchange Act of 1934; or (c) the liquidation or dissolution
of Conoco.

           "Change  of Control Trigger Event (Conoco)" means the occurrence
of  a  Change of Control (Conoco) unless (a) the Rating of Conoco  (or  its
Parent  Company  as  defined in this paragraph) is not less  than  A2  from
Moody's  Investors  Service, Inc. ("Moody's") and  not  less  than  A  from
Standard  & Poor's Corporation ("S&P"), or (b) in the event that Conoco  is
merged into another corporation organized under the laws of a state in  the
United States (a "Domestic Corporation") or a Domestic Corporation acquires
all  or  substantially  all  of the assets of  Conoco,  and  such  Domestic
Corporation ("acquiror") has a Rating of not less than A2 from Moody's  and
not  less  than  A  from S&P, provided that the acquiror  assumes  Conoco's
obligations  under  the Guaranty Agreement executed by it  pursuant  to  an
assumption  agreement  reasonably satisfactory to the  Majority  Banks  and
delivers  an  opinion  of counsel in form reasonably  satisfactory  to  the
Majority  Banks  in  connection therewith.  As  used  in  this  definition,
"Parent  Company" means a Domestic Corporation that owns  more  than  fifty
percent (50%) or more of the beneficial interests in, and the voting  stock
of, Conoco.

           "Closing  Date" means the date on which all conditions precedent
set  forth in Section 4.01 are satisfied or waived by all Banks (or, in the
case  of subsection 4.01(e), waived by the Person entitled to receive  such
payment).

           "Code"  means the Internal Revenue Code of 1986, and regulations
promulgated thereunder.

           "Commitment",  as  to  each Bank, has the meaning  specified  in
Section 2.01.

          "Compliance Certificate" means a certificate substantially in the
form of Exhibit C.

          "Conoco" means Conoco Inc., its successors and assigns.

          "Contingent  Obligation" means, as to any Person, any  direct  or
indirect  liability  of  that Person, whether or not  contingent,  with  or
without  recourse, (a) with respect to any Indebtedness,  lease,  dividend,
letter of credit or other obligation (the "primary obligations") of another
Person  (the  "primary obligor"), including any obligation of  that  Person
(i)  to  purchase, repurchase or otherwise acquire such primary obligations
or  any security therefor, (ii) to advance or provide funds for the payment
or discharge of any such primary obligation, or to maintain working capital
or  equity capital of the primary obligor or otherwise to maintain the  net
worth  or  solvency or any balance sheet item, level of income or financial
condition of the primary obligor, (iii) to purchase property, securities or
services  primarily  for the purpose of assuring  the  owner  of  any  such
primary obligation of the ability of the primary obligor to make payment of
such  primary obligation, or (iv) otherwise to assure or hold harmless  the
holder  of  any  such  primary obligation against loss in  respect  thereof
(each,  a "Guaranty Obligation"); (b) with respect to any Surety Instrument
issued  for  the  account  of that Person or as to  which  that  Person  is
otherwise liable for reimbursement of drawings or payments; (c) to purchase
any  materials, supplies or other property from, or to obtain the  services
of,  another  Person if the relevant contract or other related document  or
obligation  requires  that payment for such materials,  supplies  or  other
property,  or  for  such  services, shall be  made  regardless  of  whether
delivery  of  such materials, supplies or other property is  ever  made  or
tendered,  or  such  services are ever performed or  tendered,  or  (d)  in
respect  of  any  Swap  Contract.  The amount of any Contingent  Obligation
shall,  in the case of Guaranty Obligations, be deemed equal to the  stated
or  determinable amount of the primary obligation in respect of which  such
Guaranty  Obligation  is made or, if not stated or if  indeterminable,  the
maximum  reasonably anticipated liability in respect thereof,  and  in  the
case  of  other  Contingent  Obligations other  than  in  respect  of  Swap
Contracts,  shall be equal to the maximum reasonably anticipated  liability
in respect thereof and, in the case of Contingent Obligations in respect of
Swap Contracts, shall be equal to the Swap Termination Value.

           "Contractual Obligation" means, as to any Person, any  provision
of  any  security  issued by such Person or of any agreement,  undertaking,
contract, indenture, mortgage, deed of trust or other instrument,  document
or  agreement to which such Person is a party or by which it or any of  its
property is bound.

           "Conversion/Continuation Date" means any date  on  which,  under
Section  2.04, the Company (a) converts Loans of one Type to another  Type,
or (b) continues as Loans of the same Type, but with a new Interest Period,
Loans having Interest Periods expiring on such date.

           "Default" means any event or circumstance which, with the giving
of  notice,  the lapse of time, or both, would (if not cured  or  otherwise
remedied during such time) constitute an Event of Default.

          "Dollars", "dollars" and "$" each mean lawful money of the United
States.

           "Drillship"  means  that  certain  double-hulled  721-foot  long
deepwater  drillship under construction (as of the Closing  Date)  for  the
Company by Samsung Heavy Industries Co., Ltd.

           "Eligible Assignee" means (a) a commercial bank organized  under
the  laws of the United States, or any state thereof, and having a combined
capital  and  surplus  of  at least $100,000,000;  (b)  a  commercial  bank
organized  under  the laws of any other country which is a  member  of  the
Organization  for Economic Cooperation and Development (the "OECD"),  or  a
political  subdivision of any such country, and having a  combined  capital
and  surplus  of at least $100,000,000, provided that such bank  is  acting
through  a branch or agency located in the United States; and (c) a  Person
that is primarily engaged in the business of commercial banking and that is
(i)  a Subsidiary of a Bank, (ii) a Subsidiary of a Person of which a  Bank
is a Subsidiary, or (iii) a Person of which a Bank is a Subsidiary.

          "Environmental Claims" means all claims, however asserted, by any
Governmental  Authority  or other Person alleging  potential  liability  or
responsibility  for violation of any Environmental Law, or for  release  or
injury  to  the  environment or threat to public  health,  personal  injury
(including sickness, disease or death), property damage, natural  resources
damage,  or  otherwise  alleging liability or  responsibility  for  damages
(punitive  or  otherwise), cleanup, removal, remedial  or  response  costs,
restitution, civil or criminal penalties, injunctive relief, or other  type
of relief, resulting from or based upon the presence, placement, discharge,
emission or release (including intentional and unintentional, negligent and
non-negligent,   sudden  or  non-sudden,  accidental   or   non-accidental,
placement,  spills,  leaks,  discharges,  emissions  or  releases)  of  any
Hazardous  Material at, in, or from property, whether or not owned  by  the
Company.

           "Environmental  Laws" means all federal, state  or  local  laws,
statutes,  common  law  duties, rules, regulations, ordinances  and  codes,
together   with  all  administrative  orders,  directed  duties,  requests,
licenses,   authorizations  and  permits  of,  and  agreements  with,   any
Governmental  Authorities, in each case relating to environmental,  health,
safety and land use matters.

           "ERISA"  means  the Employee Retirement Income Security  Act  of
1974, and regulations promulgated thereunder.

           "Event  of  Default"  means any of the events  or  circumstances
specified in Section 8.01.

           "Exchange  Act" means the Securities Exchange Act of  1934,  and
regulations promulgated thereunder.

           "FDIC" means the Federal Deposit Insurance Corporation, and  any
Governmental Authority succeeding to any of its principal functions.

           "Federal Funds Rate" means, for any day, the rate set  forth  in
the  weekly  statistical release designated as H.15(519), or any  successor
publication,  published by the Federal Reserve Bank of New York  (including
any such successor, "H.15(519)") on the preceding Business Day opposite the
caption "Federal Funds (Effective)"; or, if for any relevant day such  rate
is  not so published on any such preceding Business Day, the rate for  such
day will be the arithmetic mean as determined by the Agent of the rates for
the last transaction in overnight Federal funds arranged prior to 9:00 a.m.
(New  York  City  time)  on that day by each of three  leading  brokers  of
Federal funds transactions in New York City selected by the Agent.

          "Fee Letter" has the meaning specified in subsection 2.09(a).

          "FRB" means the Board of Governors of the Federal Reserve System,
and   any  Governmental  Authority  succeeding  to  any  of  its  principal
functions.

           "Further  Taxes"  means  any and all present  or  future  taxes,
levies,  assessments,  imposts, duties, deductions, fees,  withholdings  or
similar  charges  (including,  without limitation,  net  income  taxes  and
franchise taxes), and all liabilities with respect thereto, imposed by  any
jurisdiction  on  account of amounts payable or paid  pursuant  to  Section
3.01.

           "GAAP" means generally accepted accounting principles set  forth
from  time  to  time in the opinions and pronouncements of  the  Accounting
Principles Board and the American Institute of Certified Public Accountants
and  statements  and  pronouncements of the Financial Accounting  Standards
Board  (or  agencies  with  similar functions  of  comparable  stature  and
authority  within the U.S. accounting profession), which are applicable  to
the circumstances as of the date of determination.

           "Governmental  Authority" means any nation  or  government,  any
state  or other political subdivision thereof, any central bank (or similar
monetary or regulatory authority) thereof, any entity exercising executive,
legislative,  judicial,  regulatory  or  administrative  functions  of   or
pertaining  to  government, and any corporation or other  entity  owned  or
controlled, through stock or capital ownership or otherwise, by any of  the
foregoing.

           "Guarantor"  means  each  of Reading & Bates Corporation, Conoco
Inc., and the R&B Subsidiary Guarantors.
 .
           "Guaranty Agreement" means each Guaranty Agreement substantially
in  the  form of Exhibit G-1 or Exhibit G-2 hereto, executed by a Guarantor
in  favor  of  the  Agents  and the Banks, as  the  same  may  be  amended,
supplemented, or otherwise modified from time to time.

          "Guaranty Obligation" has the meaning specified in the definition
of "Contingent Obligation."

           "Hazardous  Materials"  means  all  those  substances  that  are
regulated  by,  or  which  may  form the  basis  of  liability  under,  any
Environmental   Law,   including  any  substance   identified   under   any
Environmental  Law as a pollutant, contaminant, hazardous waste,  hazardous
constituent,  special  waste, hazardous substance, hazardous  material,  or
toxic substance, or petroleum or petroleum derived substance or waste.

           "Indebtedness" of any Person means, without duplication, (a) all
indebtedness for borrowed money; (b) all obligations issued, undertaken  or
assumed as the deferred purchase price of property or services (other  than
trade  payables entered into in the ordinary course of business on ordinary
terms); (c) all reimbursement or payment obligations with respect to Surety
Instruments;  (d) all obligations evidenced by notes, bonds, debentures  or
similar  instruments,  including  obligations  so  evidenced  incurred   in
connection with the acquisition of property, assets or businesses; (e)  all
indebtedness created or arising under any conditional sale or  other  title
retention agreement, or incurred as financing, in either case with  respect
to  property acquired by the Person (even though the rights and remedies of
the seller or bank under such agreement in the event of default are limited
to repossession or sale of such property); (f) all obligations with respect
to  capital leases; (g) all net obligations with respect to Swap Contracts,
(h)  all  indebtedness referred to in clauses (a) through (g) above secured
by  (or  for  which the holder of such Indebtedness has an existing  right,
contingent  or  otherwise, to be secured by) any Lien upon or  in  property
(including accounts and contracts rights) owned by such Person, even though
such  Person  has  not  assumed or become liable for the  payment  of  such
Indebtedness;  and (i) all Guaranty Obligations in respect of  indebtedness
or  obligations of others of the kinds referred to in clauses  (a)  through
(h)  above.   For all purposes of this Agreement, the Indebtedness  of  any
Person shall include all recourse Indebtedness of any partnership or  joint
venture  or  limited liability company in which such Person  is  a  general
partner or a joint venturer or a member.

           "Indemnified Liabilities" has the meaning specified  in  Section
10.05.

          "Indemnified Person" has the meaning specified in Section 10.05.

           "Independent  Auditor" has the meaning specified  in  subsection
6.01(a).

           "Initial Borrowing Date" means the date of the initial Borrowing
hereunder.

           "Insolvency  Proceeding"  means, with  respect  to  any  Person,
(a)  any case, action or proceeding with respect to such Person before  any
court   or   other   Governmental   Authority   relating   to   bankruptcy,
reorganization, insolvency, liquidation, receivership, dissolution, winding-
up  or relief of debtors, or (b) any general assignment for the benefit  of
creditors,  composition,  marshalling of assets for  creditors,  or  other,
similar  arrangement  in  respect  of  its  creditors  generally   or   any
substantial portion of its creditors; undertaken under U.S. Federal,  state
or foreign law, including the Bankruptcy Code.

           "Interest Payment Date" means, as to any Loan other than a  Base
Rate  Loan,  the last day of each Interest Period applicable to  such  Loan
and,  as  to  any  Base Rate Loan, the last Business Day of  each  calendar
quarter  and  each date such Loan is converted into another Type  of  Loan,
provided,  however, that, if any Interest Period for an Offshore Rate  Loan
exceeds  three months, the date that falls three months after the beginning
of  such Interest Period and after each Interest Payment Date thereafter is
also an Interest Payment Date.

          "Interest Period" means, as to any Offshore Rate Loan, the period
commencing   on   the   Borrowing   Date   of   such   Loan   or   on   the
Conversion/Continuation  Date  on which  the  Loan  is  converted  into  or
continued as an Offshore Rate Loan, and ending on the date one, two,  three
or  six  months  thereafter as selected by the Company  in  its  Notice  of
Borrowing or Notice of Conversion/Continuation; provided that: (i)  if  any
Interest  Period would otherwise end on a day that is not a  Business  Day,
that  Interest  Period  shall  be extended to the  following  Business  Day
unless,  in the case of an Offshore Rate Loan, the result of such extension
would  be  to  carry such Interest Period into another calendar  month,  in
which  event such Interest Period shall end on the preceding Business  Day;
(ii) any Interest Period pertaining to an Offshore Rate Loan that begins on
the  last Business Day of a calendar month (or on a day for which there  is
no  numerically corresponding day in the calendar month at the end of  such
Interest  Period) shall end on the last Business Day of the calendar  month
at  the  end of such Interest Period; and (iii) no Interest Period for  any
Revolving Loan shall extend beyond the Revolving Termination Date.

           "IRS"  means  the Internal Revenue Service, and any Governmental
Authority succeeding to any of its principal functions under the Code.

           "Joint Venture" means a single-purpose corporation, partnership,
limited liability company, joint venture or other similar legal arrangement
(whether created by contract or conducted through a separate legal  entity)
now  or  hereafter  formed by the Company or any of its  Subsidiaries  with
another Person in order to conduct a common venture or enterprise with such
Person.

           "Lending Office" means, as to any Bank, the office or offices of
such Bank specified as its "Lending Office" or "Domestic Lending Office" or
"Offshore Lending Office", as the case may be, on Schedule 10.02,  or  such
other  office  or  offices as the Bank may from time  to  time  notify  the
Company and the Administrative Agent.

           "Lien"  means  any security interest, mortgage, deed  of  trust,
pledge,   hypothecation,   assignment,  charge  or   deposit   arrangement,
encumbrance, lien (statutory or other) or preferential arrangement  of  any
kind  or  nature  whatsoever  in respect of any property  (including  those
created  by,  arising under or evidenced by any conditional sale  or  other
title  retention agreement, the interest of a lessor under a capital lease,
any financing lease having substantially the same economic effect as any of
the foregoing, or the filing of any financing statement naming the owner of
the  asset  to  which  such  lien  relates as  debtor,  under  the  Uniform
Commercial  Code  or  any  comparable law)  and  any  contingent  or  other
agreement  to provide any of the foregoing, but not including the  interest
of a lessor under an operating lease.

          "Limited Liability Company Agreement" means the Limited Liability
Company Agreement pursuant to which the Company was created, between Conoco
Development  II Inc. and RB Deepwater Exploration II Inc. dated  April  30,
1997, as the same may be amended from time to time; provided, however, that
the consent of the Majority Banks shall be required prior to the making  of
any  amendment  that,  in  the  opinion of the  Majority  Banks,  could  be
construed to have a material adverse effect on the Banks.

           "LLC  Agreement  Amendment Event" means  the  Limited  Liability
Company  Agreement  is  amended without the prior written  consent  of  the
Administrative Agent (acting upon direction of the Majority Banks)  if,  in
the  opinion  of the Majority Banks, such amendment could be  construed  to
have a material adverse effect on the Banks.

           "Loan"  means  an extension of credit by a Bank to  the  Company
under  Article  II,  and may be a Base Rate Loan or an Offshore  Rate  Loan
(each, a "Type" of Loan).

          "Loan Documents" means this Agreement, any Notes, the Fee Letter,
and all other documents delivered to either Agent or any Bank in connection
with the transactions contemplated by this Agreement.

           "Majority Banks" means at any time Banks then holding  at  least
51%  of the then aggregate unpaid principal amount of the Loans, or, if  no
such  principal amount is then outstanding, Banks then having at least  51%
of the Commitments.

           "Margin  Stock" means "margin stock" as such term is defined  in
Regulation G, T, U or X of the FRB.

          "Material Adverse Effect" means (a) a material adverse change in,
or  a  material adverse effect upon, the operations, business,  properties,
condition  (financial or otherwise) or prospects of (x)  the  Company,  (y)
Conoco  or  (z) R&B and its subsidiaries taken as a whole; (b)  a  material
impairment of the ability of the Company or any Guarantor to perform  under
any  Loan  Document and to avoid any Event of Default; or  (c)  a  material
adverse   effect   upon   the  legality,  validity,   binding   effect   or
enforceability against the Company or any Guarantor of any Loan Document.

          "NatWest Bank" means National Westminster Bank Plc.

           "Note" means a promissory note executed by the Company in  favor
of  a  Bank  pursuant to subsection 2.02(b), in substantially the  form  of
Exhibit F.

          "Notice of Borrowing" means a notice in substantially the form of
Exhibit A.

            "Notice   of   Conversion/Continuation"  means  a   notice   in
substantially the form of Exhibit B.

            "Obligations"   means   all   advances,   debts,   liabilities,
obligations, covenants and duties arising under any Loan Document owing  by
the  Company to any Bank, either Agent, or any Indemnified Person,  whether
direct  or  indirect (including those acquired by assignment), absolute  or
contingent, due or to become due, now existing or hereafter arising.

           "Offshore Rate" means, for any Interest Period, with respect  to
Offshore  Rate  Loans comprising part of the same Borrowing,  the  rate  of
interest per annum determined by the Administrative Agent to be the offered
rate  per  annum at which deposits in Dollars appear on the  Telerate  Page
3750  (or  any  successor  page) as of 11:00 a.m. (London  time),  two  (2)
Business Days prior to (and for value on) the commencement of such Interest
Period in an amount approximately equal to the amount of the Offshore  Rate
Loans  of  the Banks during such Interest Period and for a period  of  time
comparable  to such Interest Period, or in the event such offered  rate  is
not available from the Telerate Page, then the Offshore Rate shall be equal
to  the  rate per annum determined by the Administrative Agent  to  be  the
average  (rounded upwards to the next higher 1/16 of 1%) of the  respective
rates  per annum shown on Reuter's Monitor Money Rates Service "LIBO"  page
at   which  deposits  in  dollars  are  offered  in  the  London  Interbank
Eurocurrency Market at or about 11:00 a.m. (London time), two (2)  Business
Days prior to (and for value on) the commencement of an Interest Period  in
an  amount approximately equal to the amount of the Offshore Rate Loans  of
the  Banks  during such Interest Period and for a period of time comparable
to  such  Interest Period, and in the event neither such Telerate nor  such
Reuter's  rate  is  available  from such Telerate  Page  or  such  Reuter's
Service, then the Offshore Rate shall be equal to the rate of interest  per
annum determined by the Administrative Agent to be the rate at which dollar
deposits  for such Interest Period and in an amount approximately equal  to
the  amount  of the Offshore Rate Loan of BofA during such Interest  Period
would be offered by BofA's applicable Lending Office to major banks in  the
London  eurodollar market at or about 11:00 a.m. (London time) two Business
Days prior to the commencement of such Interest Period.

           "Offshore Rate Loan" means a Loan that bears interest  based  on
the Offshore Rate.

            "Organization  Documents"  means,  for  any  corporation,   the
certificate  or  articles of incorporation, the bylaws, any certificate  of
determination   or   instrument  relating  to  the  rights   of   preferred
shareholders of such corporation, any shareholder rights agreement, and all
applicable resolutions of the board of directors (or any committee thereof)
of such corporation.

           "Other  Taxes"  means  any present or  future  stamp,  court  or
documentary taxes or any other excise or property taxes, charges or similar
levies  which arise from any payment made hereunder or from the  execution,
delivery,  performance, enforcement or registration of, or  otherwise  with
respect to, this Agreement or any other Loan Documents.

          "Participant" has the meaning specified in subsection 10.08(d).

           "Pension Plan" means a pension plan (as defined in Section  3(2)
of  ERISA)  subject  to  Title  IV of ERISA  which  the  Company  sponsors,
maintains,  or  to  which  it makes, is making, or  is  obligated  to  make
contributions, or in the case of a multiple employer plan (as described  in
Section  4064(a)  of ERISA) has made contributions at any time  during  the
immediately preceding five (5) plan years.

          "Permitted Liens" has the meaning specified in Section 7.01.

           "Permitted Swap Obligations" means an agreement providing for an
interest rate swap.                .

           "Person" means an individual, partnership, corporation,  limited
liability   company,   business   trust,  joint   stock   company,   trust,
unincorporated association, joint venture or Governmental Authority.

          "Plan" means an employee benefit plan (as defined in Section 3(3)
of  ERISA) which the Company sponsors or maintains or to which the  Company
makes,  is  making, or is obligated to make contributions and includes  any
Pension Plan.

           "Pro  Rata  Share"  means,  as to any  Bank  at  any  time,  the
percentage equivalent (expressed as a decimal, rounded to the ninth decimal
place)  at  such  time of such Bank's Commitment divided  by  the  combined
Commitments of all Banks.

           "Rating"  means  the  rating assigned by the  applicable  rating
agency to senior unsecured (non-credit enhanced) long-term debt.

           "R&B"  means  Reading & Bates Corporation,  its  successors  and
assigns.

           "R&B Credit Facility means (a) the credit arrangements evidenced
by the Amended and Restated Credit Agreement dated as of July 3, 1997 among
Reading  &  Bates  Corporation,  Reading  &  Bates  Drilling  Co.  and  the
Documentation Agents, and the Administrative Agent, Arranger  and  Security
Trustee  therein named, as may be further amended with the consent  of  the
Majority  Banks (if such consent is required pursuant to the terms  of  the
Guaranty Agreement executed by R&B and the R&B Subsidiary Guarantors),  and
(b)  any  credit  arrangement or Indebtedness entered into or  incurred  in
renewal, extension, replacement or restatement thereof.

           "R&B Subsidiary Guarantors" means Reading & Bates Drilling  Co.,
Reading & Bates Exploration Co., Reading & Bates (A) Pty. Ltd., Reading and
Bates  Borneo Drilling Co., Ltd., Reading & Bates Offshore, Limited and  RB
Rig Corporation and each other direct and indirect subsidiaries of R&B that
delivers a Guaranty Agreement pursuant to this Agreement.

          "Replacement Bank" has the meaning specified in Section 3.08.

           "Requirement of Law" means, as to any Person, any law (statutory
or common), treaty, rule or regulation or determination of an arbitrator or
of a Governmental Authority, in each case applicable to or binding upon the
Person or any of its property or to which the Person or any of its property
is subject.

           "Responsible Officer" means (i) with respect to the Company, the
manager  of  the  Company or a Representative (as defined  in  the  Limited
Liability  Company  Agreement);  (ii)  with  respect  to  Conoco,  Conoco's
assistant  treasurer or vice president - finance; or (iii) with respect  to
R&B  and the R&B Subsidiary Guarantors, the chief financial officer of  R&B
or the controller of R&B.

          "Revolving Loan" has the meaning specified in Section 2.01.

           "Revolving Termination Date" means the earlier to occur of:  (a)
November  9,  1998; and (b) the date on which the Commitments terminate  in
accordance with the provisions of this Agreement.

           "SEC"  means  the  Securities and Exchange  Commission,  or  any
Governmental Authority succeeding to any of its principal functions.

           "Solvent" means, as to any Person at any time, that (a) the fair
value of the property of such Person is greater than or equal to the amount
of   such   Person's  liabilities  (including  disputed,   contingent   and
unliquidated  liabilities)  as such value is  established  and  liabilities
evaluated  for purposes of Section 101(32) of the Bankruptcy Code  and,  in
the  alternative, for purposes of the New York Uniform Fraudulent  Transfer
Act; (b) the present fair saleable value of the property of such Person  is
not  less  than  the  amount  that will be required  to  pay  the  probable
liability of such Person on its debts as they become absolute and  matured;
(c)  such Person is able to realize upon its property and pay its debts and
other   liabilities  (including  disputed,  contingent   and   unliquidated
liabilities)  as  they mature in the normal course of  business;  (d)  such
Person  does not intend to, and does not believe that it will, incur  debts
or  liabilities  beyond  such Person's ability to pay  as  such  debts  and
liabilities  mature; and (e) such Person is not engaged in  business  or  a
transaction,  and is not about to engage in business or a transaction,  for
which such Person's property would constitute unreasonably small capital.

           "Subsidiary" or "subsidiary" of a Person means any  corporation,
association, partnership, limited liability company, joint venture or other
business  entity  of  which more than 50% of the voting  stock,  membership
interests  or  other  equity interests (in the case of Persons  other  than
corporations), is owned or controlled directly or indirectly by the Person,
or one or more of the Subsidiaries of the Person, or a combination thereof.
Unless  the  context  otherwise clearly requires, references  herein  to  a
"Subsidiary" refer to a Subsidiary of the Company.  The Company  shall  not
be  considered a "Subsidiary" or "subsidiary" of R&B or Conoco for purposes
of this Agreement or the other Loan Documents.

           "Surety  Instruments"  means all letters  of  credit  (including
standby  and  commercial), banker's acceptances, bank guaranties,  shipside
bonds, surety bonds and similar instruments.

           "Swap  Contract" means any agreement, whether or not in writing,
relating  to any transaction that is a rate swap, basis swap, forward  rate
transaction, commodity swap, commodity option, equity or equity index  swap
or option, bond, note or bill option, interest rate option, forward foreign
exchange  transaction,  cap,  collar or floor transaction,  currency  swap,
cross-currency  rate swap, swaption, currency option or any other,  similar
transaction  (including any option to enter into any of the  foregoing)  or
any combination of the foregoing, and, unless the context otherwise clearly
requires, any master agreement relating to or governing any or all  of  the
foregoing.

           "Swap  Termination Value" means, in respect of any one  or  more
Swap  Contracts,  after  taking into account  the  effect  of  any  legally
enforceable netting agreement relating to such Swap Contracts, (a) for  any
date  on  or  after the date such Swap Contracts have been closed  out  and
termination  value(s) determined in accordance therewith, such  termination
value(s),  and (b) for any date prior to the date referenced in clause  (a)
the  amount(s)  determined as the mark-to-market  value(s)  for  such  Swap
Contracts, as determined based upon one or more mid-market or other readily
available  quotations  provided  by any  recognized  dealer  in  such  Swap
Contracts (which may include any Bank.)

           "Taxes"  means  any  and all present or  future  taxes,  levies,
assessments,  imposts,  duties, deductions, fees, withholdings  or  similar
charges,  and all liabilities with respect thereto, excluding, in the  case
of  each Bank and the Agent, respectively, taxes imposed on or measured  by
its  net  income  or  net  profits by the jurisdiction  (or  any  political
subdivision thereof) under the laws of which such Bank or the Agent, as the
case may be, is organized or maintains a Lending Office.

          "Type" has the meaning specified in the definition of "Loan."

           "United  States"  and  "U.S." each means the  United  States  of
America.

           "Wholly-Owned Subsidiary" means any corporation in which  (other
than  directors'  qualifying shares required by law) 100%  of  the  capital
stock  of each class having ordinary voting power, and 100% of the  capital
stock  of  every  other class, in each case, at the time as  of  which  any
determination is being made, is owned, beneficially and of record,  by  the
Company, or by one or more of the other Wholly-Owned Subsidiaries, or both.

     2.   Other Interpretive Provisions.  (a) The meanings of defined terms
are  equally  applicable to the singular and plural forms  of  the  defined
terms.

           (b)  The words "hereof", "herein", "hereunder" and similar words
refer  to this Agreement as a whole and not to any particular provision  of
this  Agreement;  and subsection, Section, Schedule and Exhibit  references
are to this Agreement unless otherwise specified.

           (c)  (i)  the term "documents" includes any and all instruments,
documents,   agreements,  certificates,  indentures,  notices   and   other
writings, however evidenced; (ii) the term "including" is not limiting  and
means  "including without limitation"; (iii) In the computation of  periods
of  time  from a specified date to a later specified date, the word  "from"
means  "from and including"; the words "to" and "until" each mean  "to  but
excluding", and the word "through" means "to and including"; and  (iv)  the
term  "property" includes any kind of property or asset, real, personal  or
mixed, tangible or intangible.

           (d)   Unless otherwise expressly provided herein, (i) references
to  agreements (including this Agreement) and other contractual instruments
shall   be   deemed  to  include  all  subsequent  amendments   and   other
modifications  thereto, but only to the extent such  amendments  and  other
modifications  are  not prohibited by the terms of any Loan  Document,  and
(ii)  references  to  any  statute or regulation are  to  be  construed  as
including  all statutory and regulatory provisions consolidating, amending,
replacing, supplementing or interpreting the statute or regulation.

           (e)   The  captions  and  headings of  this  Agreement  are  for
convenience  of  reference only and shall not affect the interpretation  of
this Agreement.

           (f)   This  Agreement and other Loan Documents may  use  several
different  limitations,  tests or measurements  to  regulate  the  same  or
similar  matters.   All  such  limitations,  tests  and  measurements   are
cumulative  and  shall each be performed in accordance  with  their  terms.
Unless  otherwise expressly provided, any reference to any  action  of  the
Agents  or the Banks by way of consent, approval or waiver shall be  deemed
modified by the phrase "in its/their sole discretion."

           (g)   This Agreement and the other Loan Documents are the result
of  negotiations among and have been reviewed by counsel to the Agents, the
Company  and  the  other  parties, and are the  products  of  all  parties.
Accordingly,  they shall not be construed against the Banks or  the  Agents
merely because of the Agents' or Banks' involvement in their preparation.

      3.   Accounting Principles.  (a) Unless the context otherwise clearly
requires,  all  accounting  terms not expressly  defined  herein  shall  be
construed,  and  all financial computations required under  this  Agreement
shall be made, in accordance with GAAP, consistently applied.

           (b)   References  herein to "fiscal year" and  "fiscal  quarter"
refer to such fiscal periods of the Company.


                                     
                               SCHEDULE 2.01
                                     
                                     
                                COMMITMENTS
                            AND PRO RATA SHARES


                                                  Pro Rata
        Bank               Commitment               Share
                                                      
Bank of America           $87,500,000                50%
National
Trust and Savings
Association

National Westminster      $87,500,000                50%
Bank Plc

     TOTAL                $175,000,000              100%

                               SCHEDULE 5.16
                                     
                    SUBSIDIARIES AND MINORITY INTERESTS
                                     
                                     
                                     
                                     
                                   None
                               SCHEDULE 7.01
                                     
                                   LIENS
                                     
                                     
                                     
                                     
                                   None
                               SCHEDULE 7.05
                                     
                               INDEBTEDNESS
                                     
                                     
                                     
                                     
Indebtedness to RBII and CDII in the aggregate amount of $77,250,900 as  of
September 30, 1997.  Such Indebtedness shall be repaid with the proceeds of
the Initial Borrowing.
                                     
                                     
                                     
                              SCHEDULE 10.02
                                     
                                     
                   OFFSHORE AND DOMESTIC LENDING OFFICES
                           ADDRESSES FOR NOTICES


COMPANY                          

Address for Notices:

Deepwater Drilling II L.L.C.
901 Threadneedle, Suite 200
Houston, Texas  77079-2902
Attn:  Mr. Tim W. Nagle

With a copy to:                  

Mr. Robert Heinrich
Conoco Inc.
600  N.  Dairy  Ashford,  Suite ML3066
Houston, Texas  77079-6651



BANK OF AMERICA NATIONAL TRUST   
AND SAVINGS ASSOCIATION,
  as Administrative Agent

Address  for Notices (including
Notice of Borrowing):

Bank of America National Trust
     and Savings Association
Agency  Administration Services #5596
1850 Gateway Blvd., 5th Floor
Concord, California  94520
Attn:     Andrew Hui
      Telephone:     (510) 675-8365
      Facsimile:     (510) 675-8500

With a copy to:                  

Bank of America National Trust
     and Savings Association
Three Allen Center
Suite 4550
Houston, TX 77002
Attn:     Claire Liu
      Telephone:     (713) 651-4855
      Facsimile:     (713) 651-4807

Administrative Agent's  Payment  
Office:

Bank of America National Trust
     and Savings Association
Agency  Administration Services #5596
1850 Gateway Blvd., 5th Floor
Concord, California  94520
Attn:     Andrew Hui
      Telephone:     (510) 675-8365
      Facsimile:     (510) 675-8500

ABA No.:  121000358
Ref:      Deepwater Drilling
Acct. No.:     12331-15905

BANK OF AMERICA NATIONAL TRUST   
AND SAVINGS ASSOCIATION,
  as a Bank

Address    of   Domestic    and
Offshore Lending Office:

Bank of America National Trust
     and Savings Association
231 South LaSalle Street
Chicago, IL 60697
Attn:     Ida Rubens
      Telephone:     (312) 828-5239
      Facsimile:     (312) 974-9626


Address for Notices:             

Bank of America National Trust
     and Savings Association
Three Allen Center
Suite 4550
Houston, TX 77002
Attn:     Claire Liu
      Telephone:     (713) 651-4855
      Facsimile:     (713) 651-4807


NATIONAL WESTMINSTER BANK PLC,   
  as a Bank

Address    of   Domestic    and
Offshore Lending
Office and Address for Notices:

National Westminster Bank Plc
New York Branch
175 Water Street, Floor 19
New York, New York  10038
Attn:     Mr. Paul Carter
     Vice President & Manager
      Telephone:     (212) 602-4249
      Facsimile:     (212) 602-4118

With a copy to:                  

NatWest Markets
North American Energy
600 Travis Street, Suite 6070
Houston, Texas  77002
Attn:     Inga Laughlin Smith
      Telephone:     (713) 221-2416
      Facsimile:     (713) 221-2431