EXHIBIT 10.4

                                                           Execution Copy

                           PERFORMANCE GUARANTEE

     PERFORMANCE GUARANTEE (this "Guarantee"), dated as of August
12, 1999 made by R&B FALCON CORPORATION, a Delaware corporation
(the "Guarantor") in favor of RBF EXPLORATION CO., a Nevada
corporation (the "Owner"), TRAVELERS CASUALTY AND SURETY COMPANY OF
AMERICA, a Connecticut corporation, and AMERICAN HOME ASSURANCE
COMPANY, a New York corporation (both collectively, the
"Sureties"), and CHASE BANK OF TEXAS, NATIONAL ASSOCIATION, not in
its individual capacity but solely as Trustee under the Trust
Indenture (the "Indenture") dated as of August 12, 1999 (together
with its successors and assigns, the "Trustee").

     WHEREAS, the Owner wishes to issue USD 250,000,000 of Senior
Secured Notes (the "Notes") pursuant to the Indenture to finance
the construction, outfitting and mobilization of the semi-
submersible drilling rig to be named DEEPWATER NAUTILUS (the
"Drilling Rig");

     WHEREAS, pursuant to the Construction Supervisory Agreement
dated the date hereof (the  "Construction Supervisory Agreement")
the Owner has engaged RBF Exploration II Inc., a Nevada
corporation, (the "Supervisor") to manage and supervise the design,
construction and outfitting of the Drilling Rig at the yard of the
Builders and its mobilization as required by the SDDI Contract;

     WHEREAS, both the Owner and the Supervisor are wholly-owned
indirect subsidiaries of the Guarantor and it is to the corporate
benefit of the Guarantor that the Owner issue the Notes and that
the Supervisor manage the design, construction, outfitting and
mobilization of the Drilling Rig; and

     WHEREAS, pursuant to the Indenture, the Owner has granted to
the Trustee a security interest in, among other things, its rights
in the Construction Supervisory Agreement.

     NOW, THEREFORE, in consideration of the premises, the
Guarantor hereby agrees as follows:

SECTION 1. Guarantee.

     The Guarantor hereby unconditionally and irrevocably
guarantees the full performance and observance by the Supervisor of
all of the terms of the Construction Supervisory Agreement (other
than the payment obligations of the Supervisor set out in Article
IV of such agreement).  All of the obligations of the Supervisor
under the Construction Supervisory Agreement guaranteed by the
Guarantor pursuant to this Guarantee are referred to herein as the
"Obligations."   If the Supervisor fails to perform and observe any
term or condition of the Construction Supervisory Agreement, other
than those contained in Article IV, the Guarantor undertakes to
itself perform or cause to be performed, within ten (10) days after
receipt of notice to such effect from the Owner, the Sureties or
the Trustee, any such term or condition not so performed or
observed by the Supervisor, and to indemnify and hold the Owner,
the Sureties and the Trustee harmless from and against any loss,
costs, damage, claim or expenses, other than those contained in
Article IV, which may be incurred by or asserted against them in
connection with any failure on the part of the Supervisor to
perform or observe any term or condition of the Construction
Supervisory Agreement.

SECTION 2.  Guarantee Absolute.

     (a)  The Guarantor hereby guarantees that the Obligations will
          be performed or paid strictly in accordance with the
          terms of the Construction Supervisory Agreement,
          regardless of any law, regulation or order now or
          hereafter in effect in any jurisdiction affecting any
          such terms or the rights of the Owner, the Sureties or
          the Trustee with respect thereto.  The liability of the
          Guarantor under this Guarantee shall be absolute and
          unconditional irrespective of:

          (i)  any lack of validity or enforceability of the
               Construction Supervisory Agreement, the
               Construction Contract or any other agreement or
               instrument entered into between the Owner, the
               Trustee, the Builders, the Sureties and/or the
               Guarantor;

          (ii) any change in the time, manner or place of
               performance or payment of, or in any other term of,
               all or any of the Obligations, or any other
               amendment or waiver of or any consent to departure
               from the Construction Supervisory Agreement or the
               Construction Contract;

         (iii) any other circumstance which might otherwise
               constitute a defense available to, or a discharge
               of, the Supervisor in respect of the Obligations or
               the Guarantor in respect of this Guarantee.

     (b)  This Guarantee shall continue to be effective or be
          reinstated, as the case may be, if at any time any
          performance or payment of any of the Obligations is
          rescinded or must otherwise be returned by the Owner, the
          Sureties or the Trustee upon the insolvency, bankruptcy
          or reorganization of the Owner or otherwise, all as
          though such payment had not been made.

SECTION 3. Waiver.

     The Guarantor hereby waives (a) notice of acceptance hereof,
protest, demand and dishonor, presentment and demand of any kind
now or hereafter, provided by any statute or rule of law, (b)
promptness, diligence, notice of acceptance and any other notice
with respect to any of the Obligations and this Guarantee and any
requirement that the Owner, the Sureties or the Trustee or any
other person exhaust any right or take any action against the
Supervisor or any other person or entity or any collateral, (c) all
set offs and counterclaims it may have against the Owner, and (d)
any defense arising by any insolvency, lack of authority, power,
dissolution or any other defense of the Supervisor or the
Guarantor.

SECTION 4. Subrogation.

     The Guarantor will not exercise any rights which it may
acquire by way of subrogation under this Guarantee, by any payment
made hereunder or otherwise, until all the Obligations and all
other obligations of the Supervisor under the Construction
Supervisory Agreement shall have been performed or paid in full.
If any amount shall be paid to the Guarantor on account of such
subrogation rights at any time when all the Obligations shall not
have been performed or paid in full, such amount shall be forthwith
paid to the Trustee for the account of the Owner to be credited and
applied against the Obligations.

SECTION 5. Payments Free and Clear of Taxes, Etc.

     (a)  All sums payable by the Guarantor under this Guarantee,
          shall be paid in full without set-off or counterclaim and
          in such amounts as may be necessary in order that all
          such payments (after deduction or withholding for or on
          account of any present or future taxes, levies, imposts,
          duties or other charges of whatsoever nature imposed by
          any Governmental Entity or taxing authority thereof,
          other than any income tax or franchise tax or other tax
          or fee on or measured by the gross receipts or net income
          of the Owner, the Trustee, the Sureties or the Note
          Holders collectively the "Taxes") shall not be less than
          the amounts otherwise specified to be paid under this
          Guarantee.

     (b)  A certificate as to any additional amounts payable to the
          Owner or the Trustee under this Section 5 submitted to
          the Guarantor by the Trustee shall show in reasonable
          detail the amount payable and the calculations used to
          determine in good faith such amount and shall be deemed
          prima facie correct.

     (c)  With respect to each deduction or withholding for or on
          account of any Taxes, the Guarantor shall promptly
          furnish to the Owner and the Trustee such certificates,
          receipts and other documents as may be required (in the
          reasonable judgment of the Trustee) to establish any
          income tax credit to which the Trustee may be entitled.

SECTION 6. APPLICABLE LAW AND JURISDICTION.

     THIS GUARANTEE (INCLUDING, BUT NOT LIMITED TO, THE VALIDITY
AND ENFORCEABILITY HEREOF) SHALL BE GOVERNED BY, AND CONSTRUED IN
ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK, OTHER THAN
CONFLICT OF LAWS RULES THEREOF.  ANY LEGAL ACTION OR PROCEEDING
AGAINST THE GUARANTOR WITH RESPECT TO THIS GUARANTEE MAY BE BROUGHT
IN THE COURTS OF THE STATE OF NEW YORK, SITTING IN NEW YORK COUNTY,
THE U.S. DISTRICT COURT FOR THE SOUTHERN DISTRICT OF NEW YORK, OR
IN THE COURTS OF ANY OTHER JURISDICTION WHERE SUCH ACTION OR
PROCEEDING MAY BE PROPERLY BROUGHT.

SECTION 7. Representations and Warranties.

     The Guarantor hereby represents and warrants to the Owner, the
Sureties and the Trustee as follows:

          (a)  It is a corporation duly incorporated, validly
               existing and in good standing under the laws of the
               State of Delaware duly qualified as a foreign
               corporation to do business wherever its business or
               ownership of property requires it to be so
               qualified and has the corporate power and authority
               and the legal right to own and lease its property
               and to conduct its business.

          (b)  The execution, delivery and performance by the
               Guarantor of this Guarantee and any other documents
               contemplated herein and the completion of all other
               transactions herein contemplated are within the
               Guarantor's authority, are in furtherance of the
               Guarantor's purposes, have been duly authorized by
               all necessary action and will not contravene any
               applicable law or regulation nor violate the
               Guarantor's Articles of Incorporation or By-Laws
               nor any agreement binding on the Guarantor nor any
               applicable law or regulation or order or decree of
               any governmental authority or agency.

          (c)  This Guarantee is supported by adequate and
               sufficient consideration, has been validly executed
               by or on behalf of the Guarantor and represents the
               valid and binding obligation of the Guarantor,
               enforceable in accordance with its terms and will
               not result in the Guarantor's liabilities
               (including the maximum amount of liabilities that
               may be reasonably expected to result from all
               contingent liabilities and giving effect to rights
               of contribution and subrogation) exceeding the fair
               market value of its assets.  The enforceability of
               this Guarantee, however, is subject to all
               applicable bankruptcy, insolvency, reorganization,
               moratorium and other laws affecting the rights of
               creditors generally and to general equity
               principles.

          (d)  The legality, validity, enforceability or
               admissibility of this Guarantee are not subject to
               or conditional upon this Guarantee being filed,
               recorded or enrolled with any governmental
               authority or agency or stamped with any stamp, duty
               or similar transaction tax of the State of Texas,
               the State of New York or the United States of
               America.

          (e)  There are no pending, or to the best of the
               Guarantor's knowledge, any threatened actions or
               proceedings affecting the Guarantor before any
               court, governmental agency or arbitrator in any
               country, which may materially adversely affect the
               financial condition or operations of the Guarantor.

SECTION 8. The Construction Supervisory Agreement.

     The Guarantor hereby acknowledges receipt of the Construction
Supervisory Agreement in execution form and hereby consents and
agrees to the Construction Supervisory Agreement and to all the
terms and provisions thereof.

SECTION 9. Amendments, Etc.

     No amendment or waiver of any provision of this Guarantee nor
consent to any departure by the Guarantor therefrom shall in any
event be effective unless the same shall be in writing and signed
by the Trustee and, so long as the Performance Bond (as defined in
the Indenture) is outstanding or amounts are due to the Sureties as
a result of payments made by them thereunder, the Sureties and then
such waiver or consent shall be effective only in the specific
instance and for the specific purpose for which given.

SECTION 10. Notices.

     All notices, requests and demands shall be in writing
(including telecopier transmission) given to or made upon the
respective parties hereto as follows:

In the case of the Guarantor at:

     R&B Falcon Corporation
     901 Threadneedle
     Houston, Texas 77079
     Attention: Chief Financial Officer
     Telecopier: (281) 496-0285


In the case of the Owner at:

     RBF Exploration Co.
     901 Threadneedle
     Houston, Texas  77079
     Attention: President
     Telecopier:(281) 496-0285


In the case of the Trustee, at:

     Chase Bank of Texas, National Association
     1150 Chase Tower
     600 Travis Street
     Houston, TX 77002

     Attention: Mauri J. Cowen
     Telecopier: (713) 216-5476

In the case of the Sureties, at:

     Travelers Casualty and Surety Company of America
     One Tower Square
     Hartford, Connecticut  06183

     Attention: Bond Claim
     Telecopier: 860-277-3987

     American Home Assurance Company
     175 Water Street, 6th Floor
     New York, New York  10038

     Attention: Bond Claims
     Telecopier: 212-458-1331


or to such other address as any party hereto shall designate by
written notice to the other parties hereto.  All notices shall be
effective upon delivery or three (3) days after being deposited in
the United States mail with postage prepaid certified, return
receipt requested in a correctly addressed wrapper, or upon receipt
if delivered to Federal Express or similar courier company or
transmitted by telefax during normal business hours.

SECTION 11. No Waiver; Remedies.

     No failure on the part of the Owner, the Sureties or the
Trustee to exercise, and no delay in exercising, any right
hereunder shall operate as a waiver thereof; nor shall any single
or partial exercise of any right hereunder preclude any other or
further exercise thereof or the exercise of any other right.  The
remedies herein provided are cumulative and not exclusive of any
remedies provided by law.

SECTION 12. Continuing Guarantee.

     This Guarantee is a continuing guarantee and shall (i) remain
in full force and effect until performance or payment in full of
the Obligations and payment in full of all other amounts due under
this Guarantee, (ii) be binding upon the Guarantor, its successors
or assigns, as the case may be, (iii) inure to the benefit of and
be enforceable by the Owner, the Sureties and the Trustee and their
respective successors, transferees and assigns, provided, however,
that the Guarantor may not transfer its obligations under this
Guarantee or any part of it without the prior written consent of
the Owner, the Sureties and the Trustee; and (iv) continue to be
effective, or be reinstated, as the case may be, if at any time
payment or any part thereof, of any of the Obligations is rescinded
or must be restored or returned by the Owner, the Sureties or the
Trustee upon the insolvency, bankruptcy, dissolution, liquidation
or reorganization of the Guarantor or upon the appointment of a
receiver, trustee or similar officer for the Guarantor all as
though such payment had not been made.

SECTION 13.    Non-Petition Covenant.

     So long as any indebtedness or other obligations secured by
the Indenture are outstanding, the Guarantor will not institute,
and will not join with others in instituting, any involuntary
bankruptcy or analogous proceeding against the Owner under any
bankruptcy, reorganization, receivership or similar law, domestic
or foreign, as now or hereafter in efffect.

Section 14.  Definitions.

     All capitalized terms used in this Guarantee and not defined
herein are used with the meanings given to them in the Construction
Supervisory Agreement.

     IN WITNESS WHEREOF, the Guarantor has duly executed and
delivered this Guarantee, as of the date first above written.


                         R&B FALCON CORPORATION



                         By:
                              Name:
                              Title:


THE STATE OF TEXAS  )
                    )
COUNTY  OF  HARRIS  )


     Before me, the undersigned authority, on this day personally
appeared _______________, the Vice President of R&B FALCON
CORPORATION, known to me to be the person whose name is subscribed
to the foregoing instrument and acknowledged to me that he executed
the same for the purposes and consideration therein expressed, in
the capacity stated, and as the act and deed of said corporation.

     Given under my hand and seal of office this ________ day of
______________, 1999.




                             _________________________________
                             Notary Public, State of T E X A S