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


                              FORM 10-Q

(Mark One)
 (X) QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d)
     OF THE SECURITIES EXCHANGE ACT OF 1934
     For the quarterly period ended June 30, 1998
                                  or
 ( ) TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d)
     OF THE SECURITIES EXCHANGE ACT OF 1934


                    Commission file number 1-13729

                        R&B FALCON CORPORATION

        (Exact name of registrant as specified in its charter)

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

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

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

                                 NONE
(Former name, former address and former fiscal year, if changed  since
 last report.)



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


      NUMBER OF SHARES OUTSTANDING OF REGISTRANT'S COMMON STOCK
                   AT AUGUST 1, 1998 :  166,226,374

============================================================================

                                     
                                     
                Forward-Looking Statements and Assumptions

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


                    PART I - FINANCIAL INFORMATION

Item 1.  Financial Statements

Company or Group of Companies for Which Report is Filed:

               R&B Falcon Corporation and Subsidiaries

The financial statements for the three and six month periods ended June 30,
1998  and  1997,  include, in the opinion of the Company,  all  adjustments
(which  only consist of normal recurring adjustments) necessary to  present
fairly  the financial position and results of operations for such  periods.
The  financial data for the three and six month periods ended June 30, 1998
included herein have been reviewed in accordance with standards established
by  the  American  Institute  of  Certified Public  Accountants  by  Arthur
Andersen LLP, the registrant's independent public accountants, whose report
is  included  herein.  Results of operations for the three  and  six  month
periods  ended June 30, 1998 are not necessarily indicative of  results  of
operations  which will be realized for the year ending December  31,  1998.
The  financial statements should be read in conjunction with the  Company's
Form 10-K for the year ended December 31, 1997.
                                     


                          R&B FALCON CORPORATION
                             AND SUBSIDIARIES

                        CONSOLIDATED BALANCE SHEET
                               (in millions)

                                                    JUNE 30,    DECEMBER 31,
                                                       1998        1997
                                                    ---------   ---------
                                                   (unaudited)
 ASSETS
 CURRENT ASSETS:
   Cash and cash equivalents                        $    69.5   $    55.5
   Short-term investments                                63.1        45.4
   Accounts receivable:
    Trade, net                                          220.0       165.1
    Other                                                29.0        22.3
   Materials and supplies inventory                      21.1        15.1
   Other current assets                                  18.7        13.1
                                                    ---------   ---------
    Total current assets                                421.4       316.5
                                                    ---------   ---------
 PROPERTY AND EQUIPMENT:
   Drilling                                           2,395.6     1,925.9
   Other                                                122.6        81.1
                                                    ---------   ---------
    Total property and equipment                      2,518.2     2,007.0
   Accumulated depreciation                            (466.0)     (426.3)
                                                    ---------   ---------
    Net property and equipment                        2,052.2     1,580.7
                                                    ---------   ---------
 DEFERRED CHARGES AND OTHER ASSETS                       38.6        31.2
                                                    ---------   ---------
 NET ASSETS OF DISCONTINUED OPERATIONS                   19.0          -
                                                    ---------   ---------
 TOTAL ASSETS                                       $ 2,531.2   $ 1,928.4
                                                    =========   =========
 LIABILITIES AND STOCKHOLDERS' EQUITY

 CURRENT LIABILITIES:
   Short-term obligations                           $    96.7   $      -
   Long-term obligations due within one year             32.3       135.2
   Accounts payable - trade                              37.9        51.5
   Accrued liabilities                                  106.1       144.7
                                                    ---------   ---------   
    Total current liabilities                           273.0       331.4
    
 LONG-TERM OBLIGATIONS                                1,172.9       692.2
 
 OTHER NONCURRENT LIABILITIES                            36.2        38.6
 
 DEFERRED INCOME TAXES                                  129.9        76.8
 
 NET LIABILITIES OF DISCONTINUED OPERATIONS                -          5.8
                                                    ---------   ---------
    Total liabilities                                 1,612.0     1,144.8
                                                    ---------   ---------
 COMMITMENTS AND CONTINGENCIES
 
 MINORITY INTEREST                                       56.7        55.6
                                                    ---------   ---------
 STOCKHOLDERS' EQUITY:
  Common stock, $.01 par value                            1.7         1.6
  Capital in excess of par value                        677.2       631.4
  Retained earnings                                     204.5        96.3
  Other                                                 (20.9)       (1.3)
                                                    ---------   ---------
     Total stockholders' equity                         862.5       728.0
                                                    ---------   ---------
 TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY         $ 2,531.2   $ 1,928.4
                                                    =========   =========

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



                         R&B FALCON CORPORATION
                            AND SUBSIDIARIES

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

                                   THREE MONTHS ENDED  SIX MONTHS ENDED
                                        JUNE 30,            JUNE 30,
                                   ------------------  -----------------
                                     1998      1997      1998      1997
                                   -------   -------   -------   -------
OPERATING REVENUES:
 Deepwater                         $  97.4   $  80.7   $ 197.2   $ 160.6
 Shallow water                       110.2      78.9     217.2     146.8
 Inland water                         73.4      62.6     146.0     117.9
                                   -------   -------   -------   -------
   Total operating revenues          281.0     222.2     560.4     425.3
                                   -------   -------   -------   -------
COSTS AND EXPENSES:
 Deepwater                            45.6      27.3      87.1      61.3
 Shallow water                        40.2      40.0      79.4      75.3
 Inland water                         46.1      34.1      85.4      68.3
 Depreciation                         22.6      19.2      43.5      37.7
 General and administrative           14.6      10.3      28.1      21.6
 Merger expenses                        -         -       (1.0)       -
                                   -------   -------   -------   -------
      Total costs and expenses       169.1     130.9     322.5     264.2
                                   -------   -------   -------   -------
OPERATING INCOME                     111.9      91.3     237.9     161.1
                                   -------   -------   -------   -------
OTHER INCOME (EXPENSE):
 Interest expense, net of
   capitalized interest              (15.2)    (11.3)    (29.1)    (21.4)
 Interest income                       2.9       1.5       4.4       3.1
 Other, net                            (.3)      (.7)      (.4)     (1.0)
                                   -------   -------   -------   -------
      Total other income (expense)   (12.6)    (10.5)    (25.1)    (19.3)
                                   -------   -------   -------   -------
INCOME FROM CONTINUING OPERATIONS
 BEFORE INCOME TAX EXPENSE, MINORITY
 INTEREST AND EXTRAORDINARY LOSS      99.3      80.8     212.8     141.8
                                   -------   -------   -------   -------
INCOME TAX EXPENSE:
 Current                               5.6      11.1      12.4      19.4
 Deferred                             30.5       7.9      65.1      12.6
                                   -------   -------   -------   -------
      Total income tax expense        36.1      19.0      77.5      32.0
                                   -------   -------   -------   -------
MINORITY INTEREST                     (2.8)     (1.1)     (5.1)     (4.4)
                                   -------   -------   -------   -------
INCOME FROM CONTINUING OPERATIONS
 BEFORE EXTRAORDINARY LOSS            60.4      60.7     130.2     105.4
LOSS FROM DISCONTINUED OPERATIONS       -      (16.7)       -      (22.5)
EXTRAORDINARY LOSS,
 NET OF TAX BENEFIT                  (22.0)       -      (22.0)       -
                                   -------   -------   -------   -------
NET INCOME                         $  38.4   $  44.0   $ 108.2   $  82.9
                                   =======   =======   =======   =======
NET INCOME PER COMMON SHARE:
  Basic:
     Continuing operations         $   .37   $   .37   $   .79   $   .64
     Discontinued operations           -        (.10)      -        (.13)
     Extraordinary loss               (.13)      -        (.13)      -
                                   -------   -------   -------   -------
       Net income                  $   .24   $   .27   $   .66   $   .51
                                   =======   =======   =======   =======
  Diluted:
    Continuing operations          $   .37   $   .37   $   .78   $   .64
    Discontinued operations            -        (.10)      -        (.14)
    Extraordinary loss                (.13)      -        (.13)       -
                                   -------   -------   -------   -------
       Net income                  $   .24   $   .27   $   .65   $   .50
                                   =======   =======   =======   =======

WEIGHTED AVERAGE COMMON SHARES OUTSTANDING:

        Basic                        165.3     163.9     165.1     163.8
                                   =======   =======   =======   =======
        Diluted                      167.6     167.1     166.5     165.9
                                   =======   =======   =======   =======

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



                          R&B FALCON CORPORATION
                             AND SUBSIDIARIES

                   CONSOLIDATED STATEMENT OF CASH FLOWS
                               (in millions)
                                (unaudited)
                                                        SIX MONTHS ENDED
                                                            JUNE 30,
                                                       -----------------
                                                         1998      1997
                                                       -------   -------
CASH FLOWS FROM OPERATING ACTIVITIES:
    Net income                                         $ 108.2   $  82.9
    Adjustments to reconcile net income to net
     cash provided by operating activities:
      Depreciation                                        43.5      37.7
      Deferred income taxes                               64.9      27.6
      Gain on dispositions of property and equipment      (2.2)     (1.5)
      Recognition of deferred expenses                     5.9       4.0
      Deferred compensation                                 .4       3.8
      Minority interest in income of
       consolidated subsidiaries                           5.1       4.4
      Loss from discontinued operations                     -       22.5
      Extraordinary loss, net of tax benefit              22.0        -
      Changes in assets and liabilities:
        Accounts receivable, net                         (62.1)    (40.6)
        Materials and supplies inventory                  (6.8)      (.2)
        Deferred charges and other assets                (23.6)     (5.6)
        Accounts payable  - trade                        (24.8)     (5.8)
        Accrued liabilities                              (22.5)       .3
        Accrued interest                                   4.0       3.3
        Income taxes                                     (18.5)      1.7
        Other, net                                        (2.0)     (1.3)
                                                       -------   -------
         Net cash provided by operating activities        91.5     133.2
                                                       -------   -------
CASH FLOWS FROM INVESTING ACTIVITIES:
    Dispositions of property and equipment                 3.1       1.5
    Purchases of property and equipment                 (483.4)   (186.1)
    Purchase of short-term investments                   (17.7)    (31.9)
    Increase in investments in and advances to
     unconsolidated investees                               -      (42.4)
                                                       -------   -------
        Net cash used in investing activities           (498.0)   (258.9)
                                                       -------   -------
CASH FLOWS FROM FINANCING ACTIVITIES:
   Net (payments on) proceeds from
    revolving credit facilities                         (432.0)     60.0
   Increase in short-term borrowings                      96.7        -
   Proceeds from long-term obligations                 1,094.0      43.0
   Principal payments on long-term obligations          (285.5)    (14.3)
   Premium paid on debt extinguishment                   (25.1)       -
   Distribution to minority shareholders
    of consolidated subsidiaries                          (4.0)       -
   Other                                                   1.2       3.0
                                                       -------   -------
       Net cash provided by financing activities         445.3      91.7
                                                       -------   -------
CASH USED IN DISCONTINUED OPERATIONS                     (24.8)    (38.3)
                                                       -------   -------
NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS      14.0     (72.3)

CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD          55.5     127.8
                                                       -------   -------
CASH AND CASH EQUIVALENTS AT END OF PERIOD             $  69.5   $  55.5
                                                       =======   =======
Supplemental Cash Flow Disclosures:
    Interest paid                                      $  39.0  $   21.2
    Income taxes paid                                  $  27.6  $    3.8
    Purchase of property and equipment
     in exchange for debt or equity                    $  35.5  $    8.0

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


                          R&B FALCON CORPORATION
                             AND SUBSIDIARIES
 
                 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                 (unaudited)


A)   SIGNIFICANT ACCOUNTING POLICIES

          PROPERTY  AND  EQUIPMENT  - In the first  quarter  of  1998,  the
     Company  had  an  independent appraiser evaluate the  expected  useful
     lives  of  its marine units and, based on such appraisal, the  Company
     extended  the  useful lives of its marine units effective  January  1,
     1998.   Such  change  in  estimate resulted in  an  approximate  $10.4
     million  reduction in depreciation expense for the  six  months  ended
     June 30, 1998.
          
           NEWLY  ISSUED ACCOUNTING STANDARDS - In June 1997, Statement  of
     Financial Accounting Standards No. 130, Reporting Comprehensive Income
     ("SFAS 130") was issued.  SFAS 130 establishes standards for reporting
     and  display of comprehensive income and its components in a full  set
     of  general purpose financial statements.  Comprehensive income is the
     total  of  net income and all other non-owner changes in  equity.  The
     Company  had no non-owner changes in equity during the three  and  six
     month periods ended June 30, 1998 and 1997 and therefore, no reporting
     and display of comprehensive income was required.
     
           In  June  1998, Statement of Financial Accounting Standards  No.
     133,  Accounting  for  Derivative Instruments and  Hedging  Activities
     ("SFAS 133") was issued. SFAS 133 establishes accounting and reporting
     standards  requiring that every derivative instrument be  measured  at
     its  fair  value, recorded in the balance sheet as either an asset  or
     liability  and  that  changes  in  the  derivative's  fair  value   be
     recognized  currently  in earnings. SFAS 133 is effective  for  fiscal
     years  beginning  after  June  15,  1999.  The  Company  has  not  yet
     quantified  the  impacts  of  adopting  SFAS  133  on  its   financial
     statements nor has it determined the timing of its adoption.
     
          CAPITALIZED   INTEREST   -  The  Company   capitalizes   interest
     applicable to the construction and significant upgrades of its  marine
     equipment  as  a  cost of such assets.  Interest capitalized  for  the
     three  months ended June 30, 1998 and 1997 was $9.1 million  and  $2.3
     million,  respectively and for the six months ended June 30, 1998  and
     1997  was  $15.3  million  and  $4.5 million,  respectively.  Interest
     capitalized  is  shown  net of interest expense  in  the  Consolidated
     Statement of Operations.
          
          EXTRAORDINARY LOSS - In the second quarter of 1998,  the  Company
     incurred  an extraordinary loss of $22.0 million, after a tax  benefit
     of  $11.9 million, due to the premium payments required for the  early
     extinguishment of debt obligations and the expense of related deferred
     debt issuance costs (see Note C).

B)   SHORT-TERM OBLIGATIONS

          In  February  1998, a subsidiary of the Company  entered  into  a
     $150.0  million  short-term credit facility for  the  construction  of
     Drillship  III, recently named the "DEEPWATER MILLENIUM" and repayment
     of  that  facility  was guaranteed by a number of other  subsidiaries.
     The  facility  bears  interest at the London  Interbank  Offered  Rate
     ("LIBOR")  plus .6% and is due in December 1998.  In April  1998,  the
     facility  was amended to substitute the Company as the sole  guarantor
     and to increase the interest rate margin to .75%.

C)   LONG-TERM OBLIGATIONS
                                                            (in millions)
          Debt obligations at December 31, 1997                $   827.4
             Proceeds from debt offering (1)                     1,094.0
             Proceeds from new credit facility (2)                  50.0
             Net payments on retired credit facilities (2)        (482.0)
             Payments on debt obligations other
               than credit facilities (3)                         (285.5)
             Other                                                   1.3
                                                               ---------
          Debt obligations at June 30, 1998                      1,205.2
             Less long-term obligations due within one year        (32.3)
                                                               ---------
          Long-term obligations at June 30, 1998               $ 1,172.9
                                                               =========

   (1) In  April  1998, the  Company  issued  four  series of senior  notes
       with  an aggregate principal amount of $1.1 billion (the "New Senior
       Notes").  As  a  result,  the  Company  received  net  proceeds   of
       approximately  $1,082.0 million after deducting  estimated  offering
       related  expenses.  The New Senior Notes bear  interest  at  varying
       rates from 6.5% to 7.375%, are payable semiannually on April 15  and
       October  15, and mature at varying times from 2003 to 2018. The  New
       Senior Notes are unsecured obligations of the Company, ranking  pari
       passu  in right of payment with all other existing and future senior
       unsecured  indebtedness  of  the  Company.  The  Company  used   the
       proceeds  to repay existing indebtedness of $874.4 million  and  the
       remainder  will  be  used for planned capital expenditures,  working
       capital  and  other general corporate purposes. As a result  of  the
       repayment   of  existing  indebtedness,  the  Company  incurred   an
       extraordinary  loss  of $22.0 million, net of  tax,  in  the  second
       quarter of 1998.
     
   (2) In April 1998,  the  Company  retired two existing bank group credit
       facilities  aggregating  $615.0 million (of which $600.0 million had
       been  drawn),  and  entered  into  a  new  $500.0  million unsecured
       revolving  credit  facility agreement with a syndicate of banks. The
       new facility matures  April  24, 2002,  bears interest at LIBOR plus
       .75%, and  ranks pari passu in  right of payment with the New Senior
       Notes.

   (3) On March 23, 1998, the Company offered to redeem its 9 3/4 %  Senior
       Notes due 2001, its 8 7/8 % Senior Notes due 2003 and its  12 1/2  %
       Subordinated  Notes due 2005 (collectively the  "Old   Notes").  The
       aggregate principal amount of the outstanding Old Notes  was  $280.0
       million  and on April 20, 1998, $274.4 million in  principal  amount
       of  Old  Notes was repaid from proceeds from the  sale  of  the  New
       Senior Notes.

D)   DISCONTINUED OPERATIONS

          In  March  1998, the Company decided to divest its  oil  and  gas
     segment,  and  expects such divestiture to occur by March  1999.   The
     Company's oil and gas segment has been accounted for as a discontinued
     operation.
          
          Oil  and  gas  assets held for sale at June 30, 1998  were  $93.0
     million  and  related liabilities totaled $74.0 million,  including  a
     $70.0  million reserve for losses on ultimate disposal and  operations
     until   disposal.  There  were  no  revenues  from  the   discontinued
     operations during the three and six month periods ended June 30,  1998
     and  1997.  Expenses incurred from the discontinued operations  during
     the  three  months ended June 30, 1998 and 1997 were $.5  million  and
     $16.7 million, respectively and for the six months ended June 30, 1998
     and  1997  were  $8.8  million and $22.5 million, respectively.   Such
     expenses  for  1998  were  applied  against  the  reserve  set  up  in
     connection with the discontinuance of the oil and gas segment.
          
          In  the  first quarter of 1998, the Company entered into a letter
     of intent to perform development operations to earn an interest in oil
     and  gas  properties  owned  by  a  third  party.  The  cost  of  such
     development operations is estimated at $29.0 million.

E)   EARNINGS PER SHARE

        The  following table reconciles the numerators and denominators  of
     the   basic  and  diluted  per  share  computations  for  income  from
     continuing operations before extraordinary loss for the three and  six
     month  periods  ended June 30, 1998 and 1997 as follows  (in  millions
     except per share amounts):
                                   
                                               Three Months    Six Months
                                              Ended June 30,  Ended June 30,
                                              --------------  --------------
                                               1998    1997    1998    1997
                                              ------  ------  ------  ------
   Numerator:      
   Income from continuing operations
     before extraordinary loss - basic        $ 60.4  $ 60.7  $130.2  $105.4
   Interest expense on convertible debentures    1.1     1.0      -       -
                                              ------  ------  ------  ------
   Income from continuing operations
     before extraordinary loss - diluted      $ 61.5  $ 61.7  $130.2  $105.4
                                              ======  ======  ======  ======
   Denominator:
   Weighted average common shares
     outstanding - basic                       165.3   163.9   165.1   163.8
   Outstanding stock options                     1.4     2.2     1.4     2.1
   Convertible debentures                         .9     1.0      -       -
                                              ------  ------  ------  ------
   Weighted average common shares
     outstanding - diluted                     167.6   167.1   166.5   165.9
                                              ======  ======  ======  ======
   Earnings per share:
   Income from continuing operations
     before extraordinary loss:
          Basic                               $  .37  $  .37  $  .79  $  .64
          Diluted                             $  .37  $  .37  $  .78  $  .64


F)   SUBSEQUENT EVENT

          On August 10, 1998, the Company announced the signing of a letter
     of  intent to merge with Cliffs Drilling Company.  In the merger, each
     share  of  common stock, par value $0.01 per share, of Cliffs Drilling
     Company  will be exchanged for 1.7 shares of common stock,  par  value
     $0.01  per share, of the Company. The merger is contemplated to  be  a
     tax-free reorganization and will be accounted for as a purchase.   The
     transaction is subject to, among other things, execution and  delivery
     of  a  definitive  agreement and certain regulatory, third  party  and
     shareholder  approvals.   The  offering  to  Cliffs  Drilling  Company
     shareholders will be made only by means of a prospectus.


  
                 REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS


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


     We  have reviewed the accompanying consolidated balance sheet  of  R&B
Falcon Corporation (a Delaware corporation) and Subsidiaries as of June 30,
1998,  and the related consolidated statements of operations and cash  flow
for  the  three and six month periods ended June 30, 1998 and 1997.   These
financial statements are the responsibility of the Company's management.

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

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


/s/Arthur Andersen LLP

Houston, Texas
July 28, 1998


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


Changes In Financial Condition

     The  Company  incurred capital expenditures of $483.4 million  in  the
first  six  months  of  1998.  The most significant  expenditures  were  as
follows:

1) The  Company incurred $334.0 million of capital expenditures related  to
   its   significant  construction  projects,  equipment  acquisitions  and
   capital  upgrades  to  the fleet to fulfill obligations  under  existing
   contracts  or  to improve the marketability of certain of the  Company's
   marine units.
     
2) The  Company  issued  204,900  shares of its  common  stock  in  partial
   consideration  for the acquisition of all of the outstanding  shares  of
   stock of a corporation owning six workover rigs.

3) The  Company  paid $1.5 million in cash and issued 517,184 shares of its
   common stock in partial consideration for the acquisition of all of  the
   outstanding shares of stock of three corporations owning eight tugs  and
   five ocean going barges.

4) The  Company  paid  $10.7  million  in cash for the acquisition  of  the
   previously leased jackup "FALRIG 82".

5) The Company paid $5.8 million in cash for the acquisition of a two story,
   86,000 square foot office building in Houston, Texas that serves  as its
   corporate headquarters.

     See "Liquidity And Capital Resources" for discussions on the repayment
and issuance of debt obligations.
   
     The  Company  has  from  time to time in  the  past  engaged  in,  and
currently  continues  to  engage  in, preliminary  discussions  with  other
industry  participants  with respect to business  combinations  that  would
potentially  strengthen its competitive position in the  offshore  drilling
industry.    The   Company  also  continues  to  consider   the   selective
construction, acquisition and/or upgrade of marine units.


Results of Operations

                  SIX MONTHS ENDED JUNE 30, 1998 COMPARED
                     TO SIX MONTHS ENDED JUNE 30, 1997

     The  Company's net income for the six months ended June 30,  1998  was
$108.2  million ($.65 per diluted share) compared with net income of  $82.9
million ($.50 per diluted share) for the same period of 1997.  Included  in
the  results  for  the six months ended June 30, 1998 was an  extraordinary
loss  of  $22.0  million  due to the extinguishment  of  debt  obligations.
Included in the results for the six months ended June 30, 1997 were  losses
related to discontinued operations of $22.5 million.
     
     Operating   revenues  are  primarily  a  function  of   dayrates   and
utilization.  The increase in operating revenues for the six  months  ended
June  30,  1998  over  the  same period in 1997 is  primarily  due  to  (i)
increased  dayrates fleetwide, with the shallow water fleet accounting  for
the  largest  part of the increase, and (ii) an increase in the  number  of
offshore  and  inland marine vessels available for service  which  resulted
from acquisitions, reactivations or conversions.
     
     Operating  expenses  do  not necessarily fluctuate  in  proportion  to
changes in operating revenues due to the continuation of personnel on board
and equipment maintenance when the Company's units are stacked.  It is only
during  prolonged stacked periods that the Company is able to significantly
reduce labor costs and equipment maintenance expense.  Additionally,  labor
costs  fluctuate  due to the geographic diversification  of  the  Company's
units  and the mix of labor between expatriates and nationals as stipulated
in the contracts.  In general, labor costs increase primarily due to higher
salary  levels  and  inflation.  Equipment maintenance  expenses  fluctuate
depending upon the type of activity the unit is performing and the age  and
condition  of  the  equipment.   Scheduled  maintenance  and  overhauls  of
equipment  are  performed  on  the basis of number  of  hours  operated  in
accordance  with  the Company's preventive maintenance program.   Operating
expenses  for  a unit are typically deferred or capitalized as  appropriate
during  periods  of mobilization, contract preparation, major  upgrades  or
conversions unless corresponding revenue is recognized, in which case  such
operating expenses are expensed as incurred.

     The  increase in operating expenses for the six months ended June  30,
1998 as compared to the same period in 1997 is primarily due to an increase
in  the  number of offshore and inland marine vessels available for service
which resulted from acquisitions, reactivations or conversions.
     
     Depreciation expense increased for the six months ended June 30,  1998
as   compared  to  the  same  period  in  1997  despite  the  reduction  in
depreciation  expense in 1998 of approximately $10.4  million  due  to  the
extension  of  the  expected  useful lives of the  Company's  marine  units
effective January 1, 1998.  Such increase is primarily due to the  purchase
and/or  significant upgrades of offshore and inland marine  vessels  during
1997 and early 1998.

     General  &  administrative expense increased for the six months  ended
June  30,  1998  as  compared to the same period in 1997 primarily  due  to
increases  in  payroll  and  related  expenses  associated  with  increased
staffing  through  new  hires, and acquisitions  within  the  inland  water
segment.
     
     Interest expense increased for the six months ended June 30,  1998  as
compared  to the same period in 1997 primarily due to an increased  average
debt   balance  outstanding,  partially  offset  by  increased  capitalized
interest related to significant upgrade and new build projects.

     Income tax expense increased for the six months ended June 30, 1998 as
compared  to  the same period in 1997 due to the increase in the  Company's
pretax  income  and the Company providing for taxes at the  full  statutory
rate.
     
      Loss  from discontinued operations decreased for the six months ended
June 30, 1998 as compared to the same period in 1997 as the losses for 1998
were reserved for in connection with the discontinuance of the oil and  gas
segment (see Note D of Notes to Consolidated Financial Statements).

     Extraordinary loss, net of tax, for the six months ended June 30, 1998
is  due  to the extinguishment of debt obligations in connection  with  the
issuance  of  new  debt  obligations (see Note C of Notes  to  Consolidated
Financial Statements).
                                     
                                     
                 THREE MONTHS ENDED JUNE 30, 1998 COMPARED
                    TO THREE MONTHS ENDED JUNE 30, 1997

     The  Company's net income for the three months ended June 30, 1998 was
$38.4  million ($.24 per diluted share) compared with net income  of  $44.0
million ($.27 per diluted share) for the same period of 1997.  Included  in
the  results  for the three months ended June 30, 1998 was an extraordinary
loss  of  $22.0  million  due to the extinguishment  of  debt  obligations.
Included  in  the  results for the three months ended June  30,  1997  were
losses related to discontinued operations of $16.7 million.
     
     Operating   revenues  are  primarily  a  function  of   dayrates   and
utilization. The increase in operating revenues for the three months  ended
June  30,  1998  over  the  same period in 1997 is  primarily  due  to  (i)
increased  dayrates fleetwide, with the shallow water fleet accounting  for
the  largest  part of the increase, and (ii) an increase in the  number  of
offshore  and  inland marine vessels available for service  which  resulted
from acquisitions, reactivations or conversions.
     
     Operating  expenses  do  not necessarily fluctuate  in  proportion  to
changes in operating revenues due to the continuation of personnel on board
and equipment maintenance when the Company's units are stacked.  It is only
during  prolonged stacked periods that the Company is able to significantly
reduce labor costs and equipment maintenance expense.  Additionally,  labor
costs  fluctuate  due to the geographic diversification  of  the  Company's
units  and the mix of labor between expatriates and nationals as stipulated
in the contracts.  In general, labor costs increase primarily due to higher
salary  levels  and  inflation.  Equipment maintenance  expenses  fluctuate
depending upon the type of activity the unit is performing and the age  and
condition  of  the  equipment.   Scheduled  maintenance  and  overhauls  of
equipment  are  performed  on  the basis of number  of  hours  operated  in
accordance  with  the Company's preventive maintenance program.   Operating
expenses  for  a unit are typically deferred or capitalized as  appropriate
during  periods  of mobilization, contract preparation, major  upgrades  or
conversions unless corresponding revenue is recognized, in which case  such
operating expenses are expensed as incurred.

     The increase in operating expenses for the three months ended June 30,
1998 as compared to the same period in 1997 is primarily due to an increase
in  the  number of offshore and inland marine vessels available for service
which resulted from acquisitions, reactivations or conversions.

     Depreciation  expense increased for the three months  ended  June  30,
1998  as  compared  to  the same period in 1997 despite  the  reduction  in
depreciation  expense  in 1998 of approximately $5.2  million  due  to  the
extension  of  the  expected  useful lives of the  Company's  marine  units
effective January 1, 1998.  Such increase is primarily due to the  purchase
and/or  significant upgrades of offshore and inland marine  vessels  during
1997 and early 1998.

     General & administrative expense increased for the three months  ended
June  30,  1998  as  compared to the same period in 1997 primarily  due  to
increases  in  payroll  and  related  expenses  associated  with  increased
staffing  through  new  hires, and acquisitions  within  the  inland  water
segment.
     
     Interest expense increased for the three months ended June 30, 1998 as
compared  to the same period in 1997 primarily due to an increased  average
debt   balance  outstanding,  partially  offset  by  increased  capitalized
interest related to significant upgrade and new build projects.

     Income tax expense increased for the three months ended June 30,  1998
as compared to the same period in 1997 due to the increase in the Company's
pretax  income  and the Company providing for taxes at the  full  statutory
rate.
     
     Loss from discontinued operations decreased for the three months ended
June 30, 1998 as compared to the same period in 1997 as the losses for 1998
were reserved for in connection with the discontinuance of the oil and  gas
segment (see Note D of Notes to Consolidated Financial Statements).
     
      Extraordinary loss, net of tax, for the three months ended  June  30,
1998  is  due to the extinguishment of debt obligations in connection  with
the  issuance  of new debt obligations (see Note C of Notes to Consolidated
Financial Statements).


Liquidity And Capital Resources

   General.   Net  cash provided by operating activities was $91.5  million
for  the six months ended June 30, 1998, compared to $133.2 million for the
same  period  in 1997. This represents a decrease of $41.7 million  despite
the improved operating results from continuing operations. The decrease  is
primarily due to the change in the components of working capital.
   
   Net  cash  used in investing activities was $498.0 million for  the  six
months  ended June 30, 1998 compared to $258.9 million for the same  period
in 1997.  The increase is due to increasing levels of capital expenditures,
primarily  related  to  the  significant  capital  projects  involving  the
construction or upgrade of drilling units.
   
   Net cash provided by financing activities was $445.3 million for the six
months ended June 30, 1998 compared to $91.7 million for the same period in
1997.  The increase in net cash provided by financing activities is due  to
proceeds received from the $1.1 billion debt offering (see below) and short-
term  borrowings  related  to the construction of Drillship  III,  recently
named  the "DEEPWATER MILLENIUM", offset by the repayment of existing  debt
obligations (see below).
   
   The  Company  has numerous projects under way involving the construction
or upgrade of drilling units.  The following is a list of such projects:
   
                                   Estimated         Estimated
                                    Delivery            Cost
               Vessel                 Date         (in millions)
        --------------------    ----------------   -------------
        DEEPWATER PATHFINDER    4th quarter 1998     $   260.0
        DEEPWATER FRONTIER      1st quarter 1999     $   250.0
        DEEPWATER MILLENIUM     3rd quarter 1999     $   260.0
        PEREGRINE IV            1st quarter 1999     $   187.0
        PEREGRINE VI            3rd quarter 1999     $   300.0
        PEREGRINE VII           1st quarter 1999     $   197.0
        PEREGRINE VIII          4th quarter 1999     $   305.0
        FALCON 100              1st quarter 1999     $    93.0
        RBS6                    1st quarter 2000     $   292.0
        
   The Company's construction and upgrade projects are subject to the risks
of  delay  and  cost  overruns inherent in any large construction  project,
including  shortages  of equipment, unforeseen engineering  problems,  work
stoppages, weather interference, unanticipated cost increases and shortages
of  materials or skilled labor.  Significant cost overruns or delays  would
adversely affect the Company's liquidity, financial condition, and  results
of  operations.   Delays  could also result  in  penalties  under,  or  the
termination  of, the long-term contracts under which the Company  plans  to
operate  these  rigs.   The  currently scheduled  delivery  dates  for  the
"PEREGRINE  IV",  "PEREGRINE  VI", "PEREGRINE VII",  "PEREGRINE  VIII"  and
"FALCON  100"  are  later  than the commencement  date  under  the  initial
drilling contracts for such drillships.

     Based upon  the  currently estimated delivery dates for the "PEREGRINE
IV", "PEREGRINE VIII" and "FALCON 100", the Company  may be subject to late
delivery  penalties  under the applicable drilling contracts (approximately
$41,500 per day  for the  "PEREGRINE IV", $3,000 per day for the "PEREGRINE
VIII", and  $26,500 per day for the "FALCON 100"). Based upon the currently
expected delivery  date  for  the "PEREGRINE VI", the  applicable  drilling
contract for that unit will be terminated on January  1, 1999.  The Company
is negotiating with the operators to extend the contract.

   Liquidity  of  the Company should also be considered  in  light  of  the
significant  fluctuations  in demand that may be  experienced  by  drilling
contractors  as changes in oil and gas producers' expectations and  budgets
occur, primarily in response to declines in prices for oil and gas.   These
fluctuations  can  rapidly impact the Company's  liquidity  as  supply  and
demand  factors  directly affect utilization and dayrates,  which  are  the
primary determinants of cash flow from the Company's operations. The recent
decline  in oil and gas prices started to demonstrably impact the Company's
performance  in  the second quarter of 1998, particularly  in  the  shallow
water  U.S. Gulf market. Utilization for the shallow water and inland water
fleets  was 94% and 70%, respectively for the second quarter of 1998 versus
97%  and  79%,  respectively for the first quarter of 1998.  Any  prolonged
depression  in oil and gas prices could have a material adverse  effect  on
the Company.
   
     The  Company's  management currently expects that its cash  flow  from
operations,  in  combination with cash on hand, funds available  under  its
existing credit facility and other sources, including new debt, new equity,
asset disposals and/or by proper scheduling of its planned capital or other
expenditures,  will be sufficient to satisfy the Company's  short-term  and
long-term working capital needs, planned investments, capital expenditures,
debt, lease and other payment obligations.
   
   Tender  Offer.  On March 23, 1998, the Company offered to redeem  its  9
3/4  % Senior Notes due 2001, its 8 7/8 % Senior Notes due 2003 and its  12
1/2  %  Subordinated  Notes due 2005 (collectively the  "Old  Notes").  The
aggregate principal amount of the outstanding Old Notes was $280.0  million
and  on April 20, 1998, $274.4 million in principal amount of Old Notes was
repaid from proceeds from the sale of the New Senior Notes (see below).
   
   Debt  Offering.  In April 1998, the Company issued four series of senior
notes  with an aggregate principal amount of $1.1 billion (the "New  Senior
Notes"). As a result, the Company received net proceeds of $1,082.0 million
after  deducting estimated offering related expenses. The New Senior  Notes
bear   interest  at  varying  rates  from  6.5%  to  7.375%,  are   payable
semiannually on April 15 and October 15, and mature at varying  times  from
2003  to  2018.  The  New  Senior Notes are unsecured  obligations  of  the
Company, ranking pari passu in right of payment with all other existing and
future  senior unsecured indebtedness of the Company. The Company used  the
proceeds to repay existing indebtedness of $874.4 million and the remainder
will  be  used for planned capital expenditures, working capital and  other
general  corporate  purposes.  As a result of  the  repayment  of  existing
indebtedness, the Company incurred an extraordinary loss of $22.0  million,
net of tax, in the second quarter of 1998.
   
   Credit  Facility.  In April 1998, the Company retired two existing  bank
group credit facilities aggregating $615.0 million (of which $600.0 million
had  been drawn), and entered into a new $500.0 million unsecured revolving
credit  facility  agreement with a syndicate of  banks.  The  new  facility
matures  April 24, 2002, bears interest at LIBOR plus .75%, and ranks  pari
passu in right of payment with the New Senior Notes.


                     PART II - OTHER INFORMATION


Item 1.  Legal Proceedings

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


Item 4. Results of Votes of Security Holders

      At the annual meeting of stockholders of R&B Falcon Corporation, held
on  May  19, 1998, three Class I directors were elected by a vote of common
stock  shareholders, as outlined in the Company's Proxy Statement  relating
to  the  annual  meeting.   Proxies for the annual meeting  were  solicited
pursuant  to Regulation 14 under the Securities and Exchange Act  of  1934,
there  was  no solicitation in opposition to the management's  nominees  as
listed  in the Proxy Statement and all of such nominees were elected,  with
119,003,905,   119,005,712 and 119,003,523 votes for each of Mr.  Hamilton,
Mr.  Porter and Mr. Sandmeyer, respectively, and 2,590,601,  2,588,796  and
2,590,985  votes  withheld  from each of such nominees,  respectively.   In
addition  three  proposals were voted upon: (i) a proposal to  approve  the
Company's  1998 Long-Term Incentive Plan, with 115,836,373  votes  for  the
proposal,  5,300,140  votes against the proposal and  350,605  abstentions,
(ii)  a proposal to approve the Company's 1998 Director Long-Term Incentive
Plan, with 111,586,004 votes for the proposal, 9,608,460 votes against  the
proposal and 400,041 abstentions and (iii) a proposal to ratify and approve
the  appointment  of Arthur Andersen LLP as independent public  accountants
for  the  Company for its fiscal year 1998, with 121,267,947 votes for  the
proposal, 147,793 votes against the proposal and 178,764 abstentions.


Item 6.  Exhibits and Reports on Form 8-K

  (a)  Exhibits
  
     Exhibit 10.1 -  Credit  Agreement,  dated  February  24,  1998,  among
                     Reading & Bates Corporation,  Reading & Bates Drilling
                     Co., various subsidiaries of Reading & Bates  Drilling
                     Co.,  RB  Deepwater  Exploration  III,  Inc.,  various
                     lending  institutions, Credit Lyonnais New York Branch
                     and Christiania Bank OG Kreditkasse, New York Branch.
  
     Exhibit 10.2 -  First Amendment to Credit Agreement,  dated  April 24,
                     1998,  among  R&B  Falcon  Corporation,   R&B   Falcon
                     Drilling (International & Deepwater)  Inc.,  Reading &
                     Bates  Drilling  Co.,  RB  Deepwater  Exploration III,
                     Credit Lyonnais New York Branch  and  Christiania Bank
                     OG  Kreditkasse,  New  York  Branch,  amending  Credit
                     Agreement dated February  24, 1998 relating to a  $150
                     million facility.
     
     Exhibit 10.3 -  First Amendment to Letter of Credit  Agreement,  dated
                     April  24,  1998,  among  R&B  Falcon Corporation, R&B
                     Falcon  Drilling  (International  &  Deepwater)  Inc.,
                     Reading & Bates  Drilling  Co. and Christiania Bank OG
                     Kreditkasse,  New  York  Branch,  amending  Letter  of
                     Credit Agreement dated December 30, 1996.
     
     Exhibit 15   -  Letter   regarding   unaudited    interim    financial
                     information.
     
     Exhibit 27   -  Financial Data Schedule.(Exhibit 27 is being submitted
                     as an exhibit  only in the  electronic  format of this
                     Quarterly  Report  on Form  10-Q  being  submitted  to
                     the  Securities  and Exchange Commission.)

  (b)   Reports on Form 8-K

          There  were no Current Reports on Form 8-K filed during the three
     months ended June 30, 1998.


  
                           SIGNATURE



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


                                      R&B FALCON CORPORATION


Date:  August 14, 1998                By /s/T. W. Nagle
                                         -------------------------
                                         T. W. Nagle
                                         Executive Vice President
                                         (Chief Accounting Officer)