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                    SECURITIES AND EXCHANGE COMMISSION
                          Washington, D.C. 20549
                             ________________

                                 FORM 10-K

(Mark One)
 _X_    ANNUAL REPORT PURSUANT TO SECTION 13 or 15(d)
        OF THE SECURITIES EXCHANGE ACT OF 1934 [NO FEE REQUIRED]
        For the fiscal year ended December 31, 1999
                               OR
 ___    TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d)
        OF THE SECURITIES EXCHANGE ACT OF 1934 [NO FEE REQUIRED]
        For the transition period from ___________ to ___________.

                        Commission File No. 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, TX  77079
           (Address of principal executive offices)  (Zip Code)

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

        SECURITIES REGISTERED PURSUANT TO SECTION 12(b) OF THE ACT:

                                           Name of Each Exchange
   Title of Each Class                     on Which Registered
   ---------------------------             ------------------------
   Common Stock, $.01 par value            New York Stock Exchange
   Series A Junior Participating
    Preferred Stock Purchase Rights        New York Stock Exchange

SECURITIES REGISTERED PURSUANT TO SECTION 12(g) OF THE ACT: None

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___

Indicate  by  check mark if disclosure of delinquent filers  pursuant  to
Item  405  of  Regulation S-K is not contained herein, and  will  not  be
contained, to the best of registrant's knowledge, in definitive proxy  or
information statements incorporated by reference in Part III of this Form
10-K or any amendment to this Form 10-K. [  ]

            AGGREGATE MARKET VALUE OF THE VOTING STOCK HELD BY
             NONAFFILIATES ON MARCH 1, 2000 -  $2,889,283,000

               NUMBER OF SHARES OF COMMON STOCK OUTSTANDING
                      ON MARCH 1, 2000 -  193,850,422

                    DOCUMENTS INCORPORATED BY REFERENCE

 1)  Proxy Statement for Annual Meeting of Stockholders to be held on May
     17, 2000 - Part III

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                             TABLE OF CONTENTS

                                  PART I

Item 1.  Business
Item 2.  Properties
Item 3.  Legal Proceedings
Item 4.  Submission of Matters to a Vote of Security Holders

                                  PART II

Item 5.  Market for the Registrant's Common Stock and Related Stockholder
          Matters
Item 6.  Selected Financial Data
Item 7.  Management's Discussion and Analysis of Financial Condition and
          Results of Operations
Item 7A. Quantitative and Qualitative Disclosures About Market Risk
Item 8.  Financial Statements and Supplementary Data
Item 9.  Changes in and Disagreements with Accountants on Accounting and
         Financial Disclosure

                                 PART III

Item 10. Directors and Executive Officers of the Registrant
Item 11. Executive Compensation
Item 12. Security Ownership of Certain Beneficial Owners and Management
Item 13. Certain Relationships and Related Transactions

                                  PART IV

Item 14. Exhibits, Financial Statements and Reports on Form 8-K

Signatures

                 ________________________________________

                FORWARD LOOKING STATEMENTS AND ASSUMPTIONS

This  Annual  Report on Form 10-K 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 prices, the exploration and development programs of the Company's
customers, the actions of the Company's competitors and economic conditions
generally.

                                  PART I

Item 1. Business and Item 2. Properties

                                The Company

    R&B  Falcon  Corporation  ("R&B Falcon"), a Delaware  corporation,  was
incorporated in July 1997. Prior to December 31, 1997, R&B Falcon  did  not
own any material assets or conduct any business.  Effective on December 31,
1997,  pursuant  to an Agreement and Plan of Merger dated  July  10,  1997,
Falcon  Drilling  Company, Inc. ("Falcon"), currently R&B Falcon  Holdings,
Inc.,  a  Delaware corporation incorporated in 1991, and  Reading  &  Bates
Corporation  ("R&B"),  currently R&B Falcon (International  and  Deepwater)
Inc.,  a  Delaware  corporation incorporated in 1955, became  wholly  owned
subsidiaries of R&B Falcon (the "Merger").  On December 1, 1998, R&B Falcon
acquired  all of the outstanding stock of Cliffs Drilling Company  ("Cliffs
Drilling"), a Delaware corporation incorporated in 1988. Cliffs Drilling is
a  contract  drilling company which provides daywork and  turnkey  drilling
services,  mobile  offshore  production  units  and  well  engineering  and
management  services.   Unless the context otherwise  indicates,  the  term
"Company"  herein refers to the total business conducted by R&B Falcon  and
its subsidiaries.

                            Business - General

   The  Company's  primary business is providing marine  contract  drilling
and ancillary services on a worldwide basis.

   The  Company provides the equipment and personnel for drilling wells and
conducting workover operations on wells in marine environments and on land.
Drilling operations essentially involve the boring of a hole in the earth's
crust  with  the  objective of locating hydrocarbon  reservoirs.   Workover
operations  involve  efforts to repair damage to, or  stimulate  production
from, an existing well.  Drilling operations in general require heavier and
more  powerful  equipment due to the weight of the drillpipe  and  downhole
equipment  involved  and the potential pressures that  may  be  encountered
while  drilling  through rock formations.  Most of the Company's  rigs  are
capable of providing both drilling and workover services.

   The  Company  owns  and  operates towing  vessels  and  barges  used  to
transport  and store equipment and material to support drilling operations.
These  assets  are deployed in the jack-up and barge rig  businesses.   The
Company  also  provides,  to  a  minor extent,  such  equipment  for  ocean
transportation  of  materials and in connection  with  marine  construction
projects.

   In  February  1996, the Company and Intec Engineering,  Inc.,  formed  a
joint venture named Total Offshore Production Systems (TOPS).  In 1999, the
Company  became  the  sole  owner of TOPS.  TOPS  provides  complete  field
development engineering services on a turnkey basis.

   The  Company, primarily through its majority-owned subsidiary Reading  &
Bates Development Co. ("Devco"), engages in exploration for oil and gas. In
March 1998, the Company decided to divest its oil and gas business, and  in
the  Company's financial statements previously filed with the SEC  for  the
three  years  ended December 31, 1997, 1996 and 1995 and  the  first  three
quarters  of  1998,  the  business  was accounted  for  as  a  discontinued
operation. However in March 1999, the Company had not been able  to  divest
this business on terms it found acceptable and in accordance with generally
accepted  accounting  principles  the Company  reclassified  its  financial
statements as if this business had not been discontinued.  See Notes O  and
P of Notes to Consolidated Financial Statements.

                                 Strategy

   A  major  element  of the Company's strategy since  1996  has  been  the
expansion of its deepwater fleet.  The Company believes that the major  oil
companies of the world will continue to increase their exploration  efforts
in deepwater areas for two reasons.  First, improvements in technology have
made  production of hydrocarbons from these areas more economically viable.
Second,  the  number  of significant reservoirs remaining  undiscovered  in
shallow waters continues to dwindle, leading operators to move into  deeper
waters  in  their  efforts  to find hydrocarbon  reserves.   The  Company's
deepwater   fleet  consists  of  11  drillships,  including   three   under
construction; 11 semisubmersibles, including one under construction and one
floating production vessel. The Company's focus on deepwater equipment also
allows  it  to  obtain long-term contracts that serve as a balance  to  the
short-term contracts prevalent in the shallower water markets.

   Another  element of the Company's strategy is to expand in markets  that
can benefit from consolidation and allow it to provide services related  to
its  core  drilling business.  The Company also remains willing to consider
business  combinations  that  will expand its core  drilling  business  and
enhance  stockholder  value.  Pursuant to this strategy,  the  Company  has
become the largest competitor in the worldwide shallow water and barge  rig
markets  and  is  also  a leading competitor in the domestic  offshore  and
inland marine transportation markets.

            Significant Developments During 1999 and Early 2000

   The  most  significant development for the Company during 1999  was  the
continued  decline in demand for contract drilling services.  Such  decline
began  in  mid-1998 and continued throughout 1999.  The  decline  has  been
particularly dramatic in the domestic barge rig and jack-up markets,  where
the  Company  is  one  of the largest contractors.  In  response  to  these
conditions,  the  Company has implemented cost-cutting measures,  primarily
reducing  its labor force and taking rigs off the market.  In  addition  to
cost-cutting measures, the Company will try to expand its turnkey  drilling
activities as a means of generating additional opportunities for  its  idle
rigs to be put to work.

The  following are other significant developments that occurred in 1999 and
early 2000:

   - The  dynamically   positioned   drillship   Deepwater  Pathfinder  was
     delivered in September 1998 at a cost of approximately $277.0 million.
     This  drillship  is  leased  by  a limited liability company, which is
     owned 50% by  the Company and 50% by an affiliate of Conoco, Inc.  The
     Deepwater Pathfinder commenced its five-year drilling contract with an
     affiliate of Conoco, Inc. in the  first  quarter  of  1999. In October
     1999, the Deepwater Pathfinder sustained damage when 20 joints  of the
     vessel's riser and its blowout prevention equipment fell to the seabed
     in approximately 7,000 feet  of  water  while  preparing  to  continue
     drilling operations in the U.S. Gulf. As a result, the drillship's top
     drive and travelling equipment sustained   damage,  however the marine
     integrity  of  the  drillship  was not affected. None of the personnel
     aboard the drillship sustained any injury and no  environmental damage
     resulted from the incident. It was determined that the proximate cause
     of the accident was a failure of the drawworks braking  system  caused
     by an ingress of  contaminants  into  the  primary  braking  surfaces.
     Physical damage and loss  of  revenue  were  fully  insured  with  the
     exception  of  the 21-day deductible on the loss of  revenue  and  the
     deductible  on the physical damage. Such loss did not have a  material
     adverse impact on the Company's business or financial condition.   The
     Deepwater  Pathfinder  is  expected  to  resume drilling operations in
     early April 2000.

   - The  dynamically positioned drillship Deepwater Frontier was delivered
     in  March  1999  at  a  cost  of  approximately  $271.0 million.  This
     drillship is leased by a limited liability company, which is owned 60%
     by the Company  and  40%  by  an affiliate of Conoco, Inc.  During the
     initial five years  following delivery, the drillship is contracted to
     an affiliate of Conoco,  Inc. for an aggregate of 2.5 years and to the
     Company  for  operations  for  its  own  account for the remaining 2.5
     years. During 1999, both the affiliate of Conoco, Inc. and the Company
     used the drillship to drill a  well  and  in  October  1999  under the
     Company's  direction, the Deepwater   Frontier  commenced  a  two-year
     drilling contract offshore Brazil  with  Petrobras.

   - The  dynamically   positioned   drillship   Deepwater  Millennium  was
     delivered  in May 1999 at a cost of approximately $275.0 million.  The
     drillship commenced its four-year drilling contract  with  Statoil  in
     the Gulf of Mexico in October 1999.

   - The  construction  of  the  dynamically positioned drillship Deepwater
     Discovery (formerly Deepwater IV) continued on schedule. The estimated
     cost  of  the  drillship is approximately $305.0 million.  Immediately
     following  delivery  of  the  drillship  from  the  shipyard, which is
     expected  to  be  in  the  third  quarter  of  2000,  the drillship is
     contracted for three years  to  Texaco.  This contract is a substitute
     for  the  previously contracted Peregrine VIII (see below).

   - The  dynamically  positioned  drillship Deepwater Expedition (formerly
     Peregrine IV)  was  delivered  in July 1999 at a cost of approximately
     $230.0 million.  Significant delays and cost overruns were experienced
     in the construction of the drillship.  The original estimated delivery
     date  was  the  fourth quarter of 1998 and the original estimated cost
     was $160.0  million.  The  Deepwater Expedition commenced its six-year
     drilling contract with Petrobras offshore Brazil in October 1999.

   - Significant  delays  and  cost  overruns have been experienced in  the
     upgrade and refurbishment  of  the  dynamically  positioned  drillship
     Deepwater  Navigator  (formerly  Peregrine  VII).   It  is   currently
     estimated  that  this  vessel  will  cost approximately $320.0 million
     (original estimate:  $145.0  million)  and  will be delivered from the
     shipyard  in  the  first  quarter  of 2000  (original estimate: second
     quarter of 1998). The  drillship  was contracted for three years (with
     five one-year extensions) to BP Amoco.  However, on April 15, 1999, BP
     Amoco cancelled the contract in accordance  with  the contract's terms
     because the drillship had not been delivered on time.  The Company has
     received a letter of intent from Petrobras for a   three-year drilling
     contract offshore Brazil.

   - The  semisubmersible  rig  Falcon  100 was delivered in July 1999 at a
     cost  of  approximately  $125.0  million.  Significant delays and cost
     overruns  were  experienced  in  the  upgrade and refurbishment of the
     semisubmersible.   The  upgrade  and  refurbishment   was   originally
     estimated  to  cost  approximately  $60.0  million  and  the  original
     estimated  delivery  date  was  the fourth quarter of 1998. The Falcon
     100 was contracted for four years to  Petrobras. However, in May 1999,
     Petrobras cancelled the drilling contract  based on its interpretation
     of  the  contract's  cancellation provisions.  The  Company  does  not
     believe that Petrobras has the right to cancel  such  contract.    The
     Company  has  engaged  Brazilian  counsel to determine  the  Company's
     rights under the contract. The Company is currently marketing this rig
     for work.

   - The fifth-generation ultra deepwater moored semisubmersible, Deepwater
     Nautilus (formerly RBS8M) was delivered in February 2000.  On schedule
     but  over  budget,  the  estimated  cost  of the unit is approximately
     $350.0  million  (original  estimate:  $275.0  million).  The  unit is
     expected to arrive in the U.S. Gulf in the second quarter of 2000.  It
     will then commence its five-year drilling contract with Shell.

   - Delays and cost overruns have been experienced in the construction  of
     the fifth-generation ultra deepwater moored semisubmersible, Deepwater
     Horizon  (formerly  RBS8D).   The  estimated  cost  of  the  unit   is
     approximately  $350.0  million  (original  estimate:  $325.0 million).
     Immediately following delivery of the unit from the shipyard, which is
     expected to be in the first quarter of 2001 (original estimate: fourth
     quarter of 2000), the unit  is contracted  for  three  years to Vastar
     (with five one-year options).

   - The construction  of  the  dynamically  positioned   drillship   Navis
     Explorer  I  continued on schedule but moderately over  budget.   This
     drillship is owned by Navis ASA ("Navis"), a Norwegian public company,
     which  is  in  turn  owned  approximately  38.6%  by the Company.  The
     estimated  cost  of  the  drillship  is  approximately  $310.0 million
     (original estimate: $280.0  million)  with a scheduled delivery in the
     second quarter of 2000. A letter  of  intent  has been received from a
     major oil company  for  an  approximate one-year commitment commencing
     late in the second quarter of  2000.  As  of  December  31,  1999, the
     Company had contributed $45.2 million  in  cash  and  $17.7 million of
     equipment and equipment purchase orders. Most  of  the  equipment  and
     equipment  purchase orders that have or will  be  contributed  by  the
     Company were acquired by the Company in connection with  the Peregrine
     VI and Peregrine VIII projects and were no longer required    for such
     projects in light of their cancellation (see below).

   - In  the  third quarter of 1998, the Company cancelled the Peregrine VI
     and the Peregrine VIII drillship conversion projects due to continuing
     uncertainty as to final cost and expected delivery dates. In addition,
     in the  fourth  quarter  of 1998, the Company cancelled two additional
     drillship conversion projects that were in the preliminary phases.  As
     a  result of  the  termination  of  these  four  drillship  conversion
     projects, the Company expensed $118.3 million in related costs in 1998
     and  $34.7  million  in  1999.  See  Note  H  of Notes to Consolidated
     Financial Statements.

                            The Company's Fleet

   The   following  sets  forth  a  brief  description  of  the  types  and
capabilities  of  the  rigs  operated by the Company.   Rigs  described  as
"operating"  are  under  contract (including  rigs  being  mobilized  under
contract).  Rigs described as "warm stacked" are ready for service and  are
being  actively marketed.  Rigs described as "cold stacked" are  not  being
actively marketed but are capable of being returned to service with  little
or no refurbishment unless otherwise noted.

   Drillships.    A   drillship  is  a  self-propelled  ship   specifically
outfitted for drilling operations.  Many of the drillships built after 1975
feature  a  dynamic positioning system which allows the  ship  to  position
itself  over  the  well site through the use of thrusters controlled  by  a
satellite  navigation  system.  The prior generation of  drillships,  often
called  conventionally moored drillships, are anchored over the  well  site
and  thus  are  generally  more  limited  in  terms  of  water  depth  than
dynamically  positioned drillships. Drillships typically have greater  load
capacity  than semisubmersible drilling rigs.  This enables them  to  carry
more  supplies  on board, which makes them better suited  for  drilling  in
remote locations where resupply is more difficult.  However, drillships are
limited  to  calmer  water conditions than those in which  semisubmersibles
can  operate, and thus cannot compete with semisubmersibles in  areas  with
harsh environments, such as the North Sea.

   The   following   table  provides  certain  information  regarding   the
Company's drillship fleet as of February 29, 2000:

                  Year     Water      Drilling
                Built or   Depth       Depth
  Rig Name      Converted Capability Capability  Location     Status
  --------      --------- ---------- ----------  --------     ------
                          (expressed in feet)

  PEREGRINE I      1996(1) 7,200       25,000    Brazil     Operating
  PEREGRINE II     1979    3,300       25,000    Malaysia   Cold Stacked
  PEREGRINE III    1976    4,200       25,000    U.S. Gulf  Operating
  FALCON DUCHESS   1975    1,500       20,000    Malaysia   Cold Stacked
  DEEPWATER
   PATHFINDER (2)  1998   10,000       30,000    U.S. Gulf  Under Repair
  DEEPWATER
   FRONTIER (3)    1999   10,000       30,000    Brazil     Operating
  DEEPWATER
   MILLENNIUM      1999   10,000       30,000    U.S. Gulf  Operating
  DEEPWATER
      DISCOVERY       -   10,000       30,000    Korea      Under Construction
  DEEPWATER
   EXPEDITION      1999   10,000       30,000    Brazil     Operating
  DEEPWATER
    NAVIGATOR         -    7,800       25,000    United     Under Construction
                                                   Kingdom
  NAVIS
     EXPLORER I (4)   -   10,000       30,000    Korea      Under Construction
  __________________________

  (1)  Although originally constructed in 1982, this unit was substantially
       upgraded in 1996.
  (2)  Unit  is  leased by a limited liability company in which the Company
       owns a 50% interest.
  (3)  Unit  is  leased by a limited liability company in which the Company
       owns a 60% interest.
  (4)  Unit is being constructed for a company in which the Company owns an
       approximate 38.6% interest.

   Semisubmersible  Rigs.   Semisubmersible  rigs  are  floating  platforms
which,  by  means  of  a water ballasting system, can  be  submerged  to  a
predetermined  depth so that the lower hulls, or pontoons,  are  below  the
water  surface  during  drilling operations.  The rig is  "semi-submerged",
remaining afloat, in a position in which the lower hull is about 60  to  80
feet  below  the  water line and the upper deck protrudes  well  above  the
surface.   The  upper deck is attached to the pontoons by  columns.   These
rigs  maintain their position over the well through the use of an anchoring
system  or computer controlled thruster system.  Some semisubmersible  rigs
are  self-propelled and move between locations under their own  power  when
afloat on the pontoons; however, most are relocated with the assistance  of
tugs.

   Semisubmersibles are frequently classified into five generations,  based
primarily   on   rig  capabilities.  The  fourth-generation  classification
generally  refers to semisubmersibles that have been built since 1984,  and
have  large  physical  size,  harsh environment capability,  high  variable
loads,  top drive units, 15,000 psi blowout preventers and superior  motion
characteristics. The fifth-generation classification is generally the  same
as  the  fourth-generation with the exception of a water depth capacity  of
7,000  feet  or  greater.  These drilling units are  the  best  choice  for
operators  in  deepwater and/or harsh environments  or  for  drilling  that
requires  larger variable loads and the ability to handle large  pieces  of
subsea equipment.  There are limited markets for this type of drilling unit
and  a relatively small group of users. The principal markets are the North
Sea/Norway, the Gulf of Mexico, the Far East and offshore Brazil.

   The   following   table  provides  certain  information  regarding   the
Company's semisubmersible fleet as of February 29, 2000:

                     Year     Water     Drilling
                    Built/    Depth      Depth
  Rig Name         Upgraded Capability Capability  Location        Status
  --------         -------- ---------- ----------  --------        ------
                        (expressed in feet)

Fifth-Generation Semisubmersibles
DEEPWATER NAUTILUS   2000      8,000     30,000    Enroute to U.S. Operating
                                                    Gulf from Korea
DEEPWATER HORIZON       -     10,000     30,000    Korea           Under
                                                                    Construction

Fourth-Generation Semisubmersibles
JACK BATES         1986/97     6,000     30,000    United Kingdom  Warm Stacked
HENRY
  GOODRICH (1)      1985       2,000     30,000    Canada          Operating
PAUL B. LOYD,
  JR. (1)           1987       2,000     25,000    United Kingdom  Operating

Third-Generation Semisubmersibles
JIM CUNNINGHAM    1982/95      5,000     25,000    Angola          Operating
M. G.
  HULME, JR. (2)  1983/96      5,000     25,000    Africa          Operating
IOLAIR (3)          1982       2,000          -    United Kingdom  Warm Stacked

Second-Generation Semisubmersibles
C. KIRK
  RHEIN, JR.      1976/97      3,300     25,000    U. S. Gulf      Warm Stacked
J. W. McLEAN      1974/96      1,500     25,000    United Kingdom  Warm Stacked
FALCON 100        1974/99      2,450     25,000    U. S. Gulf      Warm Stacked
RIG 82 (4)          1975       1,500          -    Norway          Cold Stacked
________________________

(1)  Unit  is  owned  by  Arcade Drilling AS ("Arcade"),  a  majority-owned
     (approximately 74.4 %) subsidiary of the Company.
(2)  The  M.  G.  Hulme, Jr. is accounted for as an operating  lease  as  a
     result of the sale/lease-back in November 1995. See Note F of Notes to
     Consolidated Financial Statements.
(3)  The Iolair is designed for field support and living accommodations.
(4)  Rig  82 was originally built as a drilling unit, but was converted  to
     an accommodation vessel in 1978.

   Floating  Production Vessels.  Floating production vessels are  equipped
for  oil  production,  processing and storage. The Company  currently  owns
(90%)  and operates one floating production storage and offloading  vessel,
the  Seillean  (see  Notes  A  and  E of Notes  to  Consolidated  Financial
Statements).  The Seillean is currently operating in Brazil pursuant  to  a
long-term  contract. In 1998, the Seillean was upgraded to  work  in  6,000
feet of water.

  Drilling   Tenders.   Drilling  tenders  are  usually  non-self-propelled
barges  or  semisubmersibles  which are moored  alongside  a  platform  and
contain  the quarters, mud pits, mud pumps, power generation, etc. Drilling
tenders  allow  smaller, less costly platforms to be used  for  development
projects.  Self-erecting tenders carry their own derrick equipment set  and
have  a  crane capable of erecting it on the platform, thereby  eliminating
the cost associated with a separate derrick barge and related equipment.

  The  following table provides certain information regarding the Company's
drilling tenders as of February 29, 2000:

                              Water     Drilling
                      Year    Depth      Depth
      Rig Name        Built Capability Capability  Location      Status
      --------        ----- ---------- ----------  --------      ------
                         (expressed in feet)

     Self-Erecting Drilling Tenders
     CHARLEY GRAVES    1975      400     20,000    Ivory Coast   Cold Stacked
     W. D. KENT        1977      400     20,000    Malaysia      Operating

   Jack-Up  Rigs.  Jack-up rigs are mobile self-elevating drilling platforms
equipped  with  legs  which  can be lowered  to  the  ocean  floor  until  a
foundation  is  established to support the drilling platform which  is  then
jacked  further up the legs so it is above the highest expected waves.   The
rig  hull includes the drilling rig, jacking system, crew quarters,  loading
and  unloading  facilities,  storage areas for bulk  and  liquid  materials,
helicopter  landing deck and other related equipment. The rig  legs  may  be
independent or may have a lower hull ("mat") attached to the bottom of  them
in  order  to  provide  a  more  stable foundation  in  soft  bottom  areas.
Independent  leg  rigs  are  better  suited  for  harder  or  uneven  seabed
conditions  while  mat  rigs are better suited for soft  bottom  conditions.
Jack-up  rigs  may  be  designed to operate in  a  maximum  water  depth  of
approximately 400 feet (however, most jack-up rigs have a lesser water depth
capability).  Some jack-up rigs may drill in water depths as shallow as  ten
feet. A cantilever jack-up has a feature which allows the drill floor to  be
extended  out  from  the hull, allowing it to perform drilling  or  workover
operations  over  pre-existing platforms or structures.  Certain  cantilever
jack-up  rigs have "skid-off" capability, which allows the derrick equipment
set  to  be  skidded  onto  an  adjacent platform,  thereby  increasing  the
operational  capability of the rig.  Slot type jack-up rigs  are  configured
for  the drilling operations to take place through a slot in the hull.  Slot
type  rigs  are  usually  used  for  exploratory  drilling,  in  that  their
configuration  makes them difficult to position over existing  platforms  or
structures.

   The  following table provides certain information regarding the Company's
jack-up fleet as of February 29, 2000:

                                      Water    Drilling
                              Year    Depth      Depth
  Rig Name   Rig Description Built  Capability Capability Location  Status
  --------   --------------- -----  ---------  ---------- --------  ------
                                    (expressed in feet)
Cantilevered Independent Leg Jack-up Rigs
F. G.          MLT 53-C        1975      300     25,000  Holland    Cold Stacked
McCLINTOCK
RON TAPPMEYER  MLT 116-C       1978      300     25,000  Australia  Warm Stacked
C. E.          MLT 53-C        1974      300     25,000  Italy      Cold Stacked
THORNTON
RANDOLPH YOST  MLT 116-C       1979      300     25,000  Ivory CoastCold Stacked
D. R. STEWART  MLT 116-C       1980      300     25,000  Italy      Operating
HARVEY H.      F&G L780        1981      300     25,000  Malaysia   Operating
WARD
ROGER W.       F&G L780        1982      300     25,000  Indonesia  Operating
MOWELL
GEORGE H.      F&G L780        1985      300     25,000  U.S. Gulf  Operating
GALLOWAY
J. T. ANGEL    F&G L780        1982      300     25,000  India      Operating
LaSALLE        DMI 200-IC      1982      190     25,000  Qatar      Cold Stacked
CLIFFS         MLT 150-44-C    1979      150     20,000  U.S. Gulf  Operating
DRILLING 150
CLIFFS         BMC 150-H       1981      150     25,000  U.S. Gulf  Cold Stacked
DRILLING 151
CLIFFS         MLT 150-44-C    1979      150     20,000  U.S. Gulf  Cold Stacked
DRILLING 154                                                          (1)
CLIFFS         Levingston 011- 1980      150     20,000  U.S. Gulf  Operating
DRILLING 155   C
CLIFFS         BMC 150-H       1983      150     25,000  U.S. Gulf  Operating
DRILLING 156
CLIFFS         BMC 150-IC      1980      160     20,000  Qatar      Cold Stacked
DRILLING 160

Slot type Mat-Supported Jack-up Rigs
FALRIG 17   Bethlehem JU-250MS 1974      250     25,000  U.S. Gulf  Operating
FALRIG 18   Bethlehem JU-250MS 1978      250     25,000  U.S. Gulf  Operating
FALRIG 19   Bethlehem JU-250MS 1978      250     25,000  U.S. Gulf  Cold Stacked
FALRIG 20   Bethlehem JU-250MS 1982      250     25,000  U.S. Gulf  Operating
FALRIG 82   Baker Marine       1978      200     25,000  U.S. Gulf  Cold Stacked
               BMC 250
FALRIG 83   Bethlehem JU-250MS 1978      250     25,000  Ivory CoastCold Stacked
FALRIG 84   Bethlehem JU-250MS 1975      250     25,000  U.S. Gulf  Cold Stacked
ACHILLES       BMC 250-MS      1981      250     25,000  U.S. Gulf  Cold Stacked
SEA HAWK    Bethlehem JU-250MS 1976      250     25,000  U.S. Gulf  Cold Stacked
TAURUS      Bethlehem JU-250MS 1976      250     25,000  U.S. Gulf  Cold Stacked
CLIFFS         BMC 250-MS      1978      184     25,000  U.S. Gulf  Cold Stacked
 DRILLING 180

Cantilevered Mat-Supported Jack-up Rigs
PHOENIX I   Bethlehem JU-200MC 1981      200     25,000  U.S. Gulf  Operating
PHOENIX II  Bethlehem JU-200MC 1982      200     25,000  U.S. Gulf  Operating
PHOENIX III Bethlehem JU-200MC 1981      200     25,000  U.S. Gulf  Operating
PHOENIX IV  Bethlehem JU-200MC 1981      200     25,000  U.S. Gulf  Operating
FALRIG 85   Bethlehem JU-200MC 1979      200     25,000  U.S. Gulf  Warm Stacked
FALRIG 86   Bethlehem JU-200MC 1980      200     25,000  U.S. Gulf  Operating
PHOENIX VI  Bethlehem JU-200MC 1981      200     25,000  U.S. Gulf  Cold Stacked
CLIFFS      Bethlehem JU-100MC 1982      100     25,000  U.S. Gulf  Cold Stacked
CLIFFS        McDermott 87-C   1973      100     15,000  Trinidad   Operating
 DRILLING 101
CLIFFS      Bethlehem JU-100MC 1982      110     25,000  Trinidad   Operating
 DRILLING 110
CLIFFS      Bethlehem JU-150MC 1980      150     25,000  U.S. Gulf  Operating
 DRILLING 152
CLIFFS      Bethlehem JU-150MC 1980      150     25,000  U.S. Gulf  Operating
 DRILLING 153
CLIFFS      Bethlehem JU-200MC 1979      200     25,000  U.S. Gulf  Operating
 DRILLING 200
CLIFFS      Bethlehem JU-200MC 1980      200     20,000  Brazil     Operating
 DRILLING 201
CLIFFS      Bethlehem JU-200MC 1980      200     25,000  Venezuela  Warm Stacked
 DRILLING 202
__________________
(1)   This rig is also in need of substantial refurbishment to be activated.

   Submersible  Rigs.   Submersible rigs are similar  in  configuration  to
semisubmersible rigs except that the lower hull of the rig rests on the sea
floor  during drilling operations.  A submersible rig is towed to the  well
site where it is submerged by flooding its lower hull until it rests on the
sea  floor,  with the upper hull above the water surface. Submersible  rigs
typically operate in water depths of 12 to 85 feet.

  The  following table provides certain information regarding the Company's
submersible rig fleet as of February 29, 2000:

                                     Water     Drilling
                             Year    Depth      Depth
Rig Name  Rig Description    Built Capability Capability Location  Status
--------  ---------------    ----- ---------- ---------- --------  ------
                                        (expressed in feet)

Rig 203   Pace 85G           1983       85      30,000   U.S. Gulf Cold Stacked
FALRIG 77 Donhaiser          1983       85      30,000   U.S. Gulf Cold Stacked
            Marine DMI85
FALRIG 78 Donhaiser          1983       85      30,000   U.S. Gulf Cold Stacked
            Marine DMI85

  Mobile  Offshore  Production Units. MOPUs are  mobile  offshore  drilling
units  which  have been converted from drilling operations to a  production
application. Conversion from drilling to production mode normally  requires
removal  of  the  drilling package, leaving an open deck for  placement  of
production equipment.

   The   following   table  provides  certain  information  regarding   the
Company's mobile offshore production units as of February 29, 2000:

                                   Water
                        Year       Depth
      Rig Name          Built   Capability    Location        Status
      --------          -----   ----------    --------        -------
                                (expressed
                                 in feet)

   CLIFFS DRILLING 4    1967        150       U. S. Gulf      Operating
   LANGLEY              1965        150       Nigeria         Operating
   CLIFFS DRILLING 8    1977        250       U. S. Gulf      Operating
   CLIFFS DRILLING 10   1979        250       Qatar           Cold Stacked

   Platform  Drilling  Rigs.  Platform drilling rigs  are  designed  to  be
placed  on  existing or newly built production platforms.   The  production
platform's crane is generally capable of lifting the modules that  make  up
the  rig  or lift the modularized rig crane that would set the rig modules.
The  assembled  rig  has all the drilling, housing and  support  facilities
necessary for drilling multiple production wells but does not have many  of
the  marine  systems that would be provided on a jack-up or semisubmersible
rig.   The  platform drilling rig requires a significantly larger  platform
than  a tender rig but is not as weather sensitive.  Most platform drilling
rig  contracts are for multiple wells and extended periods of time  on  the
same platform.

   The   following   table  provides  certain  information  regarding   the
Company's platform drilling rigs as of February 29, 2000:

                         Year      Drilling
                         Built/      Depth
       Rig Name         Rebuilt   Capability   Location    Status
       --------         -------   ----------   --------    ------
                                   (expressed
                                   in feet)

    CLIFFS DRILLING 1    1988/98    18,000     China       Operating
    CLIFFS DRILLING 3    1993/98    25,000     Trinidad    Warm Stacked
    CLIFFS DRILLING 17   1996       12,000     Brazil      Operating

   Domestic  Barge Drilling Rigs.  Barge drillings rigs are mobile drilling
platforms that are submersible and are built to work in eight to 20 feet of
water.  They are towed by tugboats to the drill site with the derrick lying
down.   The lower hull is then submerged by flooding until it rests on  the
sea  floor.   The  derrick  is  then raised  and  drilling  operations  are
conducted  with the barge in this position.  There are two basic  types  of
barge rigs, "conventional" and "posted".  A posted barge is identical to  a
conventional barge except that the hull and superstructure are separated by
ten to 14 foot columns, which increases the water depth capabilities of the
rig. The Company's barge rigs are generally rated for drilling to depths in
excess of 20,000 feet.

   The following table provides certain information regarding the
Company's domestic barge drilling fleet as of February 29, 2000:

                                            Drilling
    Drilling Equipment/  Horsepower Year     Depth
Rig     Main Power         Rating   Built  Capability  Status
---     ----------         ------   -----  ----------  -------
                                           (expressed
                                             in feet)
Conventional Barges
 1  Skytop
      Brewster/Caterpillar  2,000   1980      20,000   Operating
 3  Mid-Continent/
      Caterpillar (1)       3,000   1981      25,000   Cold Stacked
 4  Oilwell/Caterpillar     3,000   1981      25,000   Cold Stacked (4)
 6  Mid-Continent/
      Caterpillar           3,000   1981      25,000   Cold Stacked (4)
 11 Gardner Denver/
      Caterpillar           3,000   1982      30,000   Operating
 15 National/EMD            2,000   1981      25,000   Cold Stacked
 18 Skytop Brewster/
      Caterpillar (2)       1,000   1980      12,000   Cold Stacked
 19 National/
      Caterpillar (2)       1,000   1996 (3)  14,000   Operating
 20 National/
      Caterpillar (2)       1,000   1998 (3)  14,000   Operating
 21 Oilwell/Caterpillar     1,500   1982      15,000   Cold Stacked
 23 Mid-Continent/
      Caterpillar (1)(2)    1,000   1995 (3)  14,000   Cold Stacked
 24 National/
      Caterpillar (1)(2)    1,500   1978      16,000   Cold Stacked
 25 Continental
      Emsco/Caterpillar     3,000   1976      25,000   Cold Stacked (4)
 28 Continental
      Emsco/Caterpillar     3,000   1979      30,000   Cold Stacked
 29 Continental
      Emsco/Caterpillar     3,000   1980      30,000   Operating
 30 Continental
      Emsco/Caterpillar     3,000   1981      30,000   Operating
 31 Continental
      Emsco/Caterpillar     3,000   1981      30,000   Cold Stacked
 32 Continental
      Emsco/Caterpillar     3,000   1982      30,000   Operating
 37 National/EMD            3,000   1965      20,000   Cold Stacked (4)
 38 National/EMD            3,000   1965      20,000   Cold Stacked (4)
 74 National/EMD (1)        2,000   1981      25,000   Cold Stacked (4)
 75 National/EMD (1)        3,000   1979      30,000   Cold Stacked (4)

Posted Barges
 2  Skytop Brewster/
      Caterpillar           2,000   1980      20,000   Cold Stacked (4)
 5  National/Caterpillar    3,000   1981      25,000   Cold Stacked (4)
 7  Oilwell/Caterpillar     2,000   1978      25,000   Cold Stacked
 8  Oilwell/Caterpillar     2,000   1978      25,000   Cold Stacked (4)
 9  Oilwell/Caterpillar     2,000   1981      25,000   Operating
 10 Oilwell/Caterpillar     2,000   1981      25,000   Operating
 17 National/EMD            3,000   1981      30,000   Operating
 22 Skytop Brewster/
      Caterpillar (2)       1,500   1978      16,000   Cold Stacked
 27 Continental Emsco/
      Caterpillar           3,000   1978      30,000   Operating
 39 National/EMD            3,000   1970      30,000   Cold Stacked (4)
 41 National/EMD            3,000   1981      30,000   Cold Stacked
 44 Oilwell/Superior        3,000   1979      30,000   Cold Stacked (4)
 45 Oilwell/Superior        3,000   1979      30,000   Cold Stacked (4)
 46 Oilwell/EMD             3,000   1981      30,000   Cold Stacked
 47 Oilwell/EMD             3,000   1982      30,000   Cold Stacked
 48 Gardner Denver/
      Caterpillar           3,000   1982      30,000   Cold Stacked
 49 Oilwell/Caterpillar     3,000   1980      30,000   Cold Stacked
 52 Oilwell/Caterpillar     2,000   1981      25,000   Cold Stacked
 54 National/EMD            3,000   1970      30,000   Cold Stacked
 55 Ideco/EMD               3,000   1981      30,000   Operating
 56 National/Caterpillar    2,000   1973      25,000   Cold Stacked
 57 National/Caterpillar    2,000   1975      25,000   Cold Stacked
 61 Mid-Continent/EMD       3,000   1978      30,000   Cold Stacked
 62 Mid-Continent/EMD       3,000   1978      30,000   Operating
 63 Mid-Continent/EMD       3,000   1978      30,000   Cold Stacked
 64 Mid-Continent/EMD       3,000   1979      30,000   Operating
_________________
(1)  These rigs are leased to the Company.
(2)  These rigs are also capable of performing workover operations.
(3)  These rigs were reconstructed on the date indicated using an existing
     hull.
(4)  These rigs are also in need of substantial refurbishment to be
     activated.

     Lake  Maracaibo  Barge Rigs. Rigs designed to work in Lake  Maracaibo,
Venezuela,  require modification to work in a floating mode in  up  to  150
feet  of water. The typical domestic barge is modified by widening the hull
to 100 feet, installing a mooring system and cantilevering the drill floor.
Three  of  the Company's barge rigs have been so modified and are currently
located  in  Lake Maracaibo, where they had been previously  contracted  to
PDVSA  Exploration  and  Production. After such modifications,  these  rigs
generally are not suitable for deployment to other locations.

  The  following table provides certain information regarding the Company's
Lake Maracaibo barge rigs as of February 29, 2000:

                                      Year       Drilling
      Drilling Equipment/ Horsepower Built/       Depth
  Rig    Main Power         Rating   Rebuilt    Capability   Status
  ---    ----------         ------   -------    ----------   ------
                                                (expressed
                                                 in feet)

  40    Oilwell/EMD         3,000    1980/94      25,000     Warm Stacked
  42    National/EMD        3,000    1982/94      25,000     Warm Stacked
  43    National/EMD        3,000    1982/94      25,000     Warm Stacked

   Barge  Workover Rigs.  Barge workover rigs typically differ  from  barge
drilling  rigs  both  in  the size of the hull and the  capability  of  the
drilling equipment. Because workover operations require less pulling  power
and  mud  system capacity, a smaller, lower capacity unit can be  used.  In
addition,  workover  rigs, which are equipped with  specialized  pumps  and
handling  tools, do not require heavy duty drill pipe. Operating costs  for
workover  rigs are lower because the rigs require smaller crews,  use  less
fuel and require less repair and maintenance.

   The   following   table  provides  certain  information  regarding   the
Company's workover fleet as of February 29, 2000:

                                  Mast              Workover
                                Capacity  Year       Depth
     Rig            Drawworks   (Pounds)  Built    Capability   Status
     ---            ---------   --------  -----    ----------   ------
                                                   (expressed
                                                    in feet)

R&B Falcon Rig 90   Ideco H-30   250,000   1990 (1)  15,000     Cold Stacked
R&B Falcon Rig 91   IRI 1287     250,000   1981      15,000     Cold Stacked
R&B Falcon Rig 92   IRI 2042     300,000   1981      15,000     Cold Stacked
R&B Falcon Rig 93   Ideco H-35   450,000   1978      20,000     Cold Stacked
R&B Falcon Rig 94   IRI 1287     250,000   1996 (1)  15,000     Cold Stacked
R&B Falcon Rig 95   Wilson 75    369,000   1991 (1)  20,000     Cold Stacked
R&B Falcon Rig 96   Wilson 75    400,000   1996 (1)  20,000     Cold Stacked
R&B Falcon Rig 97   Wilson 75    400,000   1997 (1)  20,000     Cold Stacked
R&B Falcon Rig 98  Mid-Continent
                      U36A       550,000   1979      25,000     Cold Stacked
R&B Falcon Rig 99  Gardner Denver
                      800        800,000   1972      25,000     Cold Stacked
____________
(1)  These rigs were reconstructed on the date indicated using an
     existing hull.

   Inland  Marine Vessels.  In connection with barge drilling and  workover
operations, it is necessary to utilize other types of vessels:

  -  Utility  barges  are barges generally 100 to 120 feet in length, which
     are  positioned  alongside  the  barge  rig  and are used (i) to store
     materials  or  (ii)  as a container in which to dump cuttings from the
     well bore, which cuttings then are transported elsewhere for disposal.

  -  Service  tugs  are ships approximately 50 to 60 feet in length, having
     400 to 900  horsepower,  which  are  used to move and position utility
     barges and transport materials and personnel to and from the barge rig.

  -  Rig  moving  tugs  are  ships approximately 60 to 70 feet  in  length,
     having 900 horsepower or greater, which are used to move barge rigs to
     and from  the  drilling  location.  They  can also be used to move and
     position  utility  barges and move materials and personnel to and from
     the barge rig.

   A  rig  moving  tug  is typically used to move barge  rigs  and  utility
barges  to and from location, and is normally contracted by the  hour.   If
water  conditions require a more powerful vessel or if no  smaller  vessels
are available, it may sometimes be used in a service tug capacity, in which
event it is normally contracted on a dayrate basis.  Once a barge rig is on
location,  the  movement  of  utility barges, supplies  and  personnel  can
normally  be  more  economically handled with service tugs,  which  are  on
contract  throughout  the operation, usually on a  dayrate  basis.   During
drilling operations, anywhere from two to six utility barges may be in  use
throughout the operation, as well as one to three service tugs. In a  barge
rig operation, the Company's customer may contract directly for the utility
barges  and  tugs, or may ask the Company to provide them.  As of  February
29,  2000, the Company owned 108 tugs and 61 utility barges.  Although  the
Company  expects  that these assets will be used primarily  in  conjunction
with  the  Company's barge rig business, they may also  be  used  in  other
applications.

   Land  Drilling Rigs. Land drilling rigs are completely equipped to drill
oil  and  gas wells on land.  These rigs are designed to be transported  by
truck  and  assembled  by crane.  They require a firm,  level  area  to  be
erected  and sometimes require foundation work to be performed  to  support
the drill floor and derrick.  These rigs are equipped with living quarters.

   The   following   table  provides  certain  information  regarding   the
Company's land drilling rigs as of February 29, 2000:

                                            Drilling
                        Rig          Year     Depth
   Rig Name         Description      Built  Capability Location   Status
   --------         -----------      -----  ---------- --------   ------
                                         (express in feet)

CLIFFS DRILLING 34  National 1320     1977    25,000   Venezuela  Warm Stacked
CLIFFS DRILLING 34  Oilwell E-2000    1980    18,000   Venezuela  Operating
CLIFFS DRILLING 35  Oilwell E-2000    1980    18,000   Venezuela  Warm Stacked
CLIFFS DRILLING 36  Oilwell E-2000    1982    18,000   Venezuela  Warm Stacked
CLIFFS DRILLING 37  Oilwell E-2000    1982    18,000   Venezuela  Operating
CLIFFS DRILLING 40  National 1320-UE  1980    25,000   Venezuela  Warm Stacked
CLIFFS DRILLING 41  National 1320     1981    25,000   Venezuela  Warm Stacked
CLIFFS DRILLING 42  National 1320-UE  1981    25,000   Venezuela  Operating
CLIFFS DRILLING 43  National 1320-UE  1981    25,000   Venezuela  Warm Stacked
CLIFFS DRILLING 54  National 1320-UE  1981    30,000   Venezuela  Operating
CLIFFS DRILLING 55  National 1320-UE  1983    35,000   Venezuela  Operating

   Land  Workover  Rig.   The Company has one land workover  rig,  Rig  89,
which is a Cabot 300 with a workover depth capability of 15,000 feet and it
is currently cold stacked in Louisiana.

   Fleet  Maintenance.   The  Company  follows  a  policy  of  keeping  its
equipment  well maintained and technologically competitive.   However,  its
equipment  could be made obsolete by the development of new techniques  and
equipment.  In  addition, industry-wide shortages  of  supplies,  services,
skilled personnel and equipment necessary to conduct the Company's business
have occurred in the past, and such shortages could occur again.

   Almost all of the Company's rigs, like most of the rigs with which  they
compete, were constructed during the last drilling boom, which ended  about
1982.   With  increasing age, the likelihood that a rig will require  major
repairs in order to remain operational increases.  The Company expects that
repair  and  maintenance  of its rigs will require  increasing  amounts  of
capital,  and  will result in such rigs being unavailable for service  from
time  to time.  During any such period of repair to a rig, the Company will
not  earn  revenues from such rig, but will continue to incur a substantial
portion of the costs that would be incurred while the rig is operating.

                           Oil & Gas Properties

   The  Company's  oil and gas business is operated primarily  through  its
majority-owned subsidiary Reading & Bates Development Co. ("Devco") and, to
an  insignificant  extent,  through  its wholly-owned  subsidiaries  Raptor
Exploration Company, Inc. and Cliffs Oil and Gas Company.

   Domestic  Operations.  In 1997, Devco earned an  assignment  of  a  100%
record  title  interest  in  East Breaks  Blocks  642,  643,  688  and  732
("Boomvang Project"), offshore U.S. Gulf of Mexico, pursuant to  a  farmout
from  Shell Offshore, Inc. ("Shell").  Shell retained an overriding royalty
interest  in  the  Boomvang Project and the option to either  increase  its
overriding  royalty interest or convert to a working interest if  specified
cumulative  production levels are achieved. Later in 1997,  Devco  and  its
partner,  Norcen Explorer, Inc., drilled a discovery well at Boomvang.   In
1998, Norcen's successor, Union Pacific Resources Corporation withdrew from
the project and reassigned all of its interest in Boomvang to Devco.

   In  March  1999,  Devco  entered into an Equity Participation  Agreement
with Kerr-McGee Oil & Gas Corporation ("K-M") in which K-M agreed to assume
operations  and pay 100% of the cost of an exploration well at Boomvang  in
exchange for an assignment of a 50% record title interest.  K-M also agreed
to  pay Devco $5.0 million out of a portion of its share of production,  if
any,  from  the  project.  Prior to drilling, K-M sold a 20%  record  title
interest  in the project to Ocean Energy, Inc. ("OEI") thereby establishing
the current ownership as Devco 50%, K-M 30% and OEI 20%.

   In  1999,  the Boomvang partners drilled successful appraisal  wells  on
North  Boomvang  (EB  642/643)  and a successful  discovery  well  on  West
Boomvang  (EB  642).  Additional delineation drilling is planned  in  2000.
The  partners have determined that sufficient proved and probable  reserves
have  been  established  to  warrant studying  development  plans  for  the
Boomvang  Project.  It is anticipated that platform and  facilities  design
work  will be finalized and commencement of fabrication will occur in 2000.
First  production  is  anticipated in the last quarter  of  2001  or  first
quarter of 2002.

   In  December 1999, Devco, on behalf of its affiliate, R&B Falcon  Subsea
Development Inc., re-entered and completed a gas well previously drilled by
Shell in Green Canyon Block 20 in the U.S Gulf of Mexico, earning Devco  an
assignment  of  a  100% record title interest in the "Gyrfalcon  Well"  and
leasehold. Shell retained a net profits interest with the option to convert
to  a  40%  working  interest  in  the  project  upon  achieving  specified
production  levels.  The Gyrfalcon gas well was completed subsea  and  tied
back  at  a distance of 2.8 miles to Shell's Boxer Platform for processing.
TOPS Gyrfalcon LLC, a limited liability company owned by affiliates of  the
Company,  managed all subsea engineering design and contracting.  The  well
is currently producing at a stabilized rate of approximately 10 MMcfd.  The
Gyrfalcon Well is the world's first 15,000K subsea completion.

   International  Operations. In 1998, Devco completed a  transaction  with
Vanco  Energy Company ("Vanco") and its subsidiary companies to  acquire  a
working  interest  in  the  Anton Marin and Astrid  Marin  Exploration  and
Production Sharing Contracts covering 2,831,392 acres in deepwater offshore
Gabon,  West Africa ("Gabon Project").   Vanco and Devco jointly  presented
the Gabon Project to selected major oil companies in an effort to sell down
their  interests. The negotiation process culminated in the  signing  of  a
Participation  Agreement on November 2, 1998. Subsidiaries  of  Total  S.A.
(28%), as Operator, Unocal Corporation (25%), Kerr-McGee Corporation (14%),
as  farminees,  joined  Vanco Energy Company  (22%)  and  Devco  (11%),  as
farminors, to form the Vanco Gabon Group.

   The  Gabon Project farminees carried the full cost of shooting  a  4,400
square  kilometer 3-D seismic program in 1999.  Processing of  the  seismic
commenced  in  the  last quarter of 1999 and interpretation  will  continue
through  2000.  An integrated project team staffed by representatives  from
each  of  the farminees has been opened in Paris, France and an  operations
office  has been opened in Libreville, Gabon.  It is anticipated  that  the
exploration drilling program, in which the farminees are fully carried  for
a minimum of four wells, will commence in the last quarter of 2000.

   In  1997,  Devco  acquired  a  10% working interest  in  nine  petroleum
licenses   covering  854,200  acres  in  deepwater  offshore  Israel.   The
assignment of the 10% working interest was made pursuant to a farmout  with
an  Israeli  company  at  no out-of-pocket cost  to  Devco  in  return  for
deepwater  exploration  assistance  from  the  Devco  technical  team.    A
subsidiary of Samedan Oil Corporation joined the Israel project as operator
and  the Noa #1 initial test well, which was drilled in July 1999, resulted
in  the  first ever discovery of significant hydrocarbons offshore  Israel.
After  successfully  drilling the Noa #1, Devco  exercised  its  option  to
increase  its interest in the project to 15% by paying the unpromoted  past
costs attributable to the additional 5% interest.  The Noa License has  now
qualified  as  a  lease and two new licenses have been  acquired  from  the
Israeli government.  Additional exploratory and appraisal drilling will  be
undertaken in 2000 and development planning will be initiated.

                             Other Properties

   Real  Property.  The Company owns and leases real property in connection
with  the conduct of its business.  The Company owns (i) an office and yard
facility  in  Broussard, Louisiana; (ii) an office  and  yard  facility  in
Houma,  Louisiana; (iii) an office building in New Iberia, Louisiana;  (iv)
an  office  and  yard  facility in Macae, Brazil; (v) an  office  and  yard
facility in Maturin, Venezuela and (vi) an office and yard facility  and  a
two  story, 86,000 square foot office building that serves as its corporate
headquarters  in  Houston, Texas.  In addition, the  Company  leases  other
office  space  in  Houston, Texas and facilities in most of  the  countries
where it conducts operations.

                    Industry Conditions and Competition

   The  financial  performance  of the marine contract  drilling  industry,
domestically  and abroad, is dependent upon the exploration and  production
programs  of  oil  and  gas  companies.  These programs  are  substantially
influenced  by costs to find, develop and produce oil and gas;  demand  for
and   price   of  oil  and  natural  gas  (which  can  fluctuate   widely);
technological   advancements,   exploration   success,   restrictions   and
incentives  relative to exploration and production imposed by  governmental
authorities and economic conditions in general.

   A  dramatic decline in demand for marine drilling services began in 1982
as a result of a precipitous decline in oil prices.  This decline reflected
the effects of lower earnings of oil and gas producers and the unstable oil
and  gas  price  environment.   As a result,  the  entire  marine  drilling
industry experienced lower dayrates and associated earnings. Although there
were  periods  of  improvements,  the  marine  drilling  industry  remained
generally  depressed from 1985 until 1995 when the industry  began  to  see
improved  dayrates and utilization. However in 1997, oil  prices  began  to
decline  and in 1998 natural gas prices began to decline.  Since May  1998,
demand  for marine drilling rigs has decreased significantly. As a  result,
rig utilization and dayrates have also declined significantly, particularly
in  the  domestic  jack-up and barge rig markets.  In mid 1999,  crude  oil
prices  began  to  recover, but there can be no assurance that  demand  for
drilling  rigs  and related services will increase.  If  crude  oil  prices
decline  from  current levels, or a weakness in crude oil prices  continued
for  an extended period, there could be a further deterioration in both rig
utilization and dayrates. A prolonged depression in the price  of  oil  and
gas would have a material adverse effect on the Company.

   Political  and  military events in the Middle East  and  in  the  former
Soviet  Union  are  an example of the factors which can contribute  to  the
volatility  of  world  oil and gas prices.  Other factors  which  influence
demand  for  the Company's services include the ability of the Organization
of  Petroleum  Exporting Countries ("OPEC") to set and maintain  production
targets,  the  level of production by non-OPEC countries, worldwide  demand
for  oil and gas, domestic production of natural gas, general economic  and
political  conditions, availability of new offshore oil and gas leases  and
concessions   to   explore  and  develop,  and  governmental   regulations.
Accordingly,  there is and probably will continue to be uncertainty  as  to
the  future  level of demand for the Company's services and the timing  and
duration of any increases or decreases in demand.

   Drilling   in  these  international  markets  is  typically  driven   by
exploration  for  oil as opposed to gas. International  markets  frequently
offer  a  drilling  contractor the opportunity to enter  into  longer  term
contracts  at  higher operating margins than can be obtained  domestically.
Offsetting  these  benefits  can  be the  risk  of  political  uncertainty,
currency fluctuations, and the increased overhead in establishing a foreign
base of operation.

   The  marine contract drilling industry is highly competitive and no  one
competitor  is  dominant.  Since 1982, the supply  of  rigs  has  generally
exceeded  demand. The result has been a prolonged period of  intense  price
competition  during  which many drilling units  have  been  idle  for  long
periods  of  time.  Consequently, some drilling contractors have previously
gone   out   of   business   or   consolidated  with   other   contractors.
Notwithstanding   these  events,  the  industry  remains   fragmented   and
competitive.  The  Company  believes that strong competition  for  drilling
contracts will continue for the foreseeable future.  While the quality of a
company's  fleet, the experience, quality and reputation of its  management
and employees, and customer relationships are factors in obtaining drilling
contracts, the over-whelming consideration is normally the price at which a
contractor is willing to provide drilling services.

                                  Markets

   General.   Rigs  can be moved from one region to another,  and  in  this
sense  the  marine  contract drilling market is one  international  market.
Because  the  cost  of  a  rig move is significant  and  there  is  limited
availability of rig moving vessels, the demand/supply balance for rigs  may
vary  somewhat  from  region  to region.  However,  significant  variations
between  regions tend not to exist on a long-term basis due to the  ability
to move rigs.  For this reason, in marketing its rigs, the Company tends to
divide the drilling market by general equipment types based on water  depth
capability, rather than by region.

   Deepwater.    The  deepwater  market  is  serviced  by   the   Company's
semisubmersibles  and drillships. It begins in water depths  of  about  400
feet  and  extends to the maximum water depths in which rigs are  currently
capable  of  drilling, being approximately 10,000 feet.  In  recent  years,
there  has  been  increased  emphasis by oil  companies  on  exploring  for
hydrocarbons  in  deeper waters.  This is, in part,  due  to  technological
developments  that  have made it both more feasible and less  expensive  to
explore  for and produce hydrocarbons in deeper waters.  Deepwater drilling
is  currently being conducted primarily in the North Sea, Gulf  of  Mexico,
Brazil and West Africa.

   Shallow  Water.  The shallow water market is serviced by  the  Company's
jack-ups, submersibles and drilling tenders.  It begins at the outer  limit
of  the transition zone and extends to water depths of about 400 feet.   It
has  been  developed to a significantly greater degree than  the  deepwater
market,  as technology required to explore for and produce hydrocarbons  in
these  water  depths is not as demanding as in the deepwater  markets,  and
accordingly the costs are lower. Shallow water drilling is currently  being
conducted primarily in the Gulf of Mexico, West Africa, the North Sea,  the
Mediterranean, and Southeast Asia.

   Transition  Zone.   The Company's barge rig fleet operates  in  marshes,
rivers, lakes and shallow bay and coastal water areas that are referred  to
as  the  "transition zone".  The Company's principal barge  market  is  the
shallow-water  areas  of the U.S. Gulf Coast.  This area  historically  has
been the world's largest market for barge rigs.  International markets  for
barge rigs include Venezuela, West Africa, Southeast Asia, and Tunisia.

   Marine  Transportation.  The Company's marine transportation assets  are
primarily  deployed  in the same market as its domestic  barge  rig  fleet.
These assets are used mostly in conjunction with barge drilling operations,
but  also  are  used in connection with other types of work, mostly  energy
related  (such  as pipeline and well platform construction). Although  such
assets  can be deployed to other uses, any significant downturn in oil  and
gas  activity  in the transition zone would have a negative impact  on  the
Company's marine transportation business that could not be fully offset  by
deployment of such assets to other markets.

   Engineering  Services and Land Operations. Through its  Cliffs  Drilling
subsidiary,  the  Company  conducts  land  rig  operations  in   Venezuela.
Although the majority of the Company's contracts are daywork contracts, the
Company   also  conducts  "turnkey"  operations.  Under  turnkey   drilling
contracts, the Company contracts to drill a well to a contract depth  under
specified conditions for a fixed price. Prior to the acquisition of  Cliffs
Drilling the cumulative net results of the Company's turnkey contracts  had
been  immaterial  in total and insignificant as compared to  the  Company's
operating  income  from the traditional daywork contracts.  However,  as  a
result  of  the acquisition of Cliffs Drilling, the Company now provides  a
larger  portion of its services under turnkey drilling contracts. In  April
1998,  Cliffs  Drilling  had  entered into a  turnkey  contract  which  was
expected to utilize seven of the Company's land rigs over a three and  one-
half year period. However, in December 1999, the contract was cancelled  as
a  result  of the downturn in the market (see MD&A - Other).  In  addition,
because  of  the  significant decline in the demand for  contract  drilling
services that began in mid 1998, the Company expects to pursue more turnkey
work as a way of increasing utilization of its rigs.

                    Contracts, Marketing and Customers

   There  are several factors that determine the type of rig most  suitable
for  a  particular  job,  the most significant  of  which  are  the  marine
environment,  water  depth and seabed conditions at the  proposed  drilling
location, whether the drilling or workover is being done over a platform or
other  structure,  and  the  intended  well  depth.  Thus,  there  may   be
considerable  variation in utilization and dayrates  for  various  drilling
units  as  a function of demand for their capabilities. The Company's  rigs
all  provide  the  same basic function, namely, drilling  wells.   However,
because of the varying marine conditions in which wells are drilled,  there
is a wide variety of rig designs.

   Drilling  in  the areas served by the Company ranges from shallow  wells
(up  to  12,000  feet)  to deep wells (up to 25,000  feet).   Deeper  wells
generally take disproportionately longer to drill than shallower wells, due
primarily  to  more  varied  and difficult subsurface  conditions  and  the
frequent  need to run protective casing.  The Company's drilling  rigs  are
competitive  for  all types of drilling, but are particularly  designed  to
drill to depths in excess of 12,000 feet.

   Rigs  are  generally  employed under individual contracts  which  extend
over  a  period of time covering either the drilling of a well or wells  (a
"well-to-well  contract") or a stated term (a "term contract").   Contracts
for  the  employment  of rigs are most often awarded based  on  competitive
bidding; however, some contracts are the result of negotiations between the
drilling  contractor  and the customer.  Contracts may  provide  for  early
termination  by  the  customer, either with or  without  penalty,  and  may
provide  for extension options exercisable by the customer.  The  Company's
contracts  generally  provide for payment in U.S. dollars.   The  Company's
contracts  typically provide for compensation on a "daywork"  basis,  under
which the Company receives a fixed amount per day that the rig is operating
under  contract  and the Company generally pays operating expenses  of  the
rig,  including wages and the cost of incidental supplies.  A contract  may
allow  the  Company  to  recover  some  or  all  of  its  mobilization  and
demobilization  costs associated with moving a unit,  depending  on  market
conditions  then prevailing.  The dayrate under such daywork contracts  may
be  lower or not payable when the drilling unit is under tow to or from the
drill  site  (other  than  field moves) or when  operations  are  suspended
because of weather or mechanical problems.

   Although  the majority of the Company's contracts are daywork contracts,
the Company's use of "turnkey" contracts increased significantly in 1999 as
a  result  of the acquisition of Cliffs Drilling.  In addition, because  of
the  significant decline in the demand for contract drilling services  that
began in mid 1998, the Company expects to pursue more turnkey work as a way
of  increasing utilization of its rigs.  Under turnkey drilling  contracts,
the  Company contracts to drill a well to a contract depth under  specified
conditions  for  a  fixed price.  The risks to the  Company  on  a  turnkey
drilling  contract are substantially greater than on a well  drilled  on  a
daywork basis because the Company assumes most of the risks associated with
drilling  operations  generally  assumed  by  the  operator  in  a  daywork
contract,  including risk of blowout, loss of hole, stuck drill stem,  lost
production  or  damage  to  the reservoir, machinery  breakdowns,  abnormal
drilling  conditions  and  risks associated with subcontractors'  services,
supplies and personnel.

   The  Company  maintains  a  decentralized  organization,  with  regional
offices throughout the world.  The Company's primary marketing efforts  are
carried out through these regional offices and its Houston office.

   When   the  Company's  offshore  units  operate  in  foreign  locations,
operations  are  often  conducted  in  conjunction  with  local  companies.
Representative  of  the offshore areas where the Company  has  arrangements
with  local  companies are Abu Dhabi, Brazil, Brunei, China, Egypt,  India,
Indonesia,  Italy,  Korea,  Malaysia and Nigeria.   The  purpose  of  these
arrangements is to draw on the marketing, technical, supply and  government
relations  assistance of local third parties and in some  cases  to  comply
with  local  legal requirements.  Typically, the financial terms  of  these
arrangements are such that the third party receives a stated percentage  of
drilling  revenues.  Many of the Company's existing arrangements  are  with
third parties with which the Company has had a relationship for ten or more
years.

   The   Company  has  a  base  of  customers  which  includes  major   and
independent foreign and domestic oil and gas companies, as well as  foreign
state-owned oil companies.  During 1999, the Company performed services for
approximately 185 different customers.

    For  the year ended December 31, 1999, revenues of approximately $175.1
million from PDVSA Exploration and Production and revenues of approximately
$119.5  million from British Petroleum and affiliates accounted  for  19.0%
and  13.0%,  respectively, of the Company's total operating revenues.   For
the  year ended December 31, 1998, revenues of approximately $116.1 million
from  British Petroleum and affiliates accounted for 11.2% of the Company's
total operating revenues.  For the year ended December 31, 1997, there were
no customers that individually accounted for 10.0% or more of the Company's
total operating revenues.

   The  loss of one of the Company's major customers could, at least  on  a
short-term basis, have a material adverse impact on the Company's  business
or  results  of  operations.  However, the Company would  have  alternative
customers for its services in the event of the loss of any single customer.
The  Company believes that the loss of any one customer would  not  have  a
material adverse effect on the Company on a long-term basis.

   Financial  information  by geographic area is furnished  in  Note  M  of
Notes to Consolidated Financial Statements.

             Governmental Regulation and Environmental Matters

   Many  aspects  of the Company's operations are affected by domestic  and
foreign  political  developments and are subject to numerous  domestic  and
foreign  governmental  laws and regulations that  may  relate  directly  or
indirectly  to  the  Company's business and operations, including,  without
limitation,  laws  and regulations controlling the discharge  of  materials
into   the  environment,  requiring  removal  and  cleanup  under   certain
circumstances  or otherwise relating to the protection of the  environment,
and  certification,  licensing, safety and training and other  requirements
imposed by treaties, laws, regulations and conventions in the jurisdictions
in which the Company operates.  The contract drilling industry is dependent
on  demand  for  services  from the oil and gas exploration  industry  and,
accordingly,  is  affected by changing taxes, regulations  and  other  laws
relating  to  the energy business generally.  The Company does not  believe
that  governmental regulations have had any material adverse effect on  its
capital  expenditures, results of operations or competitive  position,  and
does  not  anticipate  that any material expenditure will  be  required  to
enable  it  to  comply  with existing laws and regulations.   However,  the
modification of existing laws and regulations or the adoption of  new  laws
and  regulations curtailing or increasing the effective cost of exploratory
or  developmental  drilling for oil and gas for economic, environmental  or
other  reasons  could  have  a material adverse  effect  on  the  Company's
operations.   The  Company cannot currently determine the extent  to  which
future  earnings  may  be  affected by new legislation  or  regulations  or
compliance with new or existing regulations which may become applicable  as
a result of rig relocation.

   There is great concern, particularly in developed countries such as  the
United  States, over protection of the environment.  Offshore  drilling  in
certain  areas  has been opposed by environmental groups  and,  in  certain
areas,  has  been  restricted.  To the extent laws  are  enacted  or  other
governmental actions are taken that prohibit or restrict offshore  drilling
or  impose  environmental protection requirements that result in  increased
costs  to  the  oil  and gas industry in general and the offshore  contract
drilling industry in particular, the business and prospects of the  Company
could be adversely affected.

   The  Company's operations may involve the use or handling  of  materials
that   may   be   classified  as  environmentally   hazardous   substances.
Environmental  laws  and regulations applicable in the  United  States  and
other  countries  in which the Company conducts operations  have  generally
become  more  stringent,  and may in certain circumstances  impose  "strict
liability",  rendering  a  person liable for environmental  damage  without
regard  to negligence or fault on the part of such person.  Such  laws  and
regulations  may  expose the Company to liability for  the  conduct  of  or
conditions  caused  by  others, or for acts of the Company  which  were  in
compliance  with all applicable laws at the time such acts were taken.  The
Company  does  not  believe  that environmental regulations  have  had  any
material  adverse effect on its capital expenditures, results of operations
or  competitive  position,  and  does  not  anticipate  that  any  material
expenditures will be required to enable it to comply with existing laws and
regulations.  However, the modification of existing laws or regulations  or
the  adoption  of  new  laws  or  regulations  curtailing  exploratory   or
developmental drilling for oil and gas for economic, environmental or other
reasons could have a material adverse effect on the Company's operations.

   The  transition zone and shallow-water areas of the U.S. Gulf Coast  are
ecologically  sensitive.  Environmental issues have led to higher  drilling
costs,  a  more  difficult  and lengthy well  permitting  process  and,  in
general, have adversely affected decisions of the oil companies to drill in
these  areas.   U.S.  laws  and  regulations applicable  to  the  Company's
operations  include those controlling the discharge of materials  into  the
environment, requiring removal and cleanup of materials that may  harm  the
environment,  or  otherwise relating to the protection of the  environment.
For  example, as an operator of drilling rigs in navigable U.S. waters  and
certain  offshore  areas, the Company may be liable for damages  and  costs
incurred in connection with spills or discharges of oil or other substances
for which it is held responsible.  The discharge of oil or other substances
in  a  wetland or inland waterway could produce substantial damage  to  the
environment,  including  wildlife and groundwater.   Laws  and  regulations
protecting the environment have become more stringent in recent years,  and
may,  in  certain  circumstances, impose "strict  liability,"  rendering  a
person  liable  for environmental damage without regard  to  negligence  or
fault on the part of such person.  Such laws and regulations may expose the
Company to liability for the conduct of or conditions caused by others,  or
for acts of the Company that were in compliance with all applicable laws at
the  time  such acts were performed.  The application of these requirements
or the adoption of new requirements could have a material adverse effect on
the Company.

   The  Federal  Water Pollution Control Act of 1972, commonly referred  to
as  the  Clean  Water  Act  ("CWA")  prohibits  the  discharge  of  certain
substances into the navigable waters of the United Stated without a permit.
The  regulations implementing the CWA require permits to be obtained by  an
operator  before  certain  exploration  activities  occur.   Violations  of
monitoring,  reporting  and  permitting  requirements  can  result  in  the
imposition of civil and criminal penalties.  The provisions of the CWA  can
also be enforced by citizen's groups.

   The  Oil  Pollution Act of 1990 ("OPA '90") and regulations  promulgated
pursuant  thereto impose a variety of regulations on "responsible  parties"
related to the prevention of oil spills and liability for damages resulting
from such spills.  A "responsible party" includes the owner or operator  of
a  facility or vessel, or the lessee or permittee of the area in  which  an
offshore  facility  is  located.   OPA  '90  assigns  liability   to   each
responsible party for oil removal costs and a variety of public and private
damages. While liability limits apply in some circumstances, a party cannot
take  advantage  of  liability limits if the  spill  was  caused  by  gross
negligence  or willful misconduct or resulted from violation of  a  federal
safety, construction or operating regulation.  If the party fails to report
a  spill or to cooperate fully in the cleanup, liability limits likewise do
not apply. Few defenses exist to the liability imposed by OPA '90.  OPA '90
also  imposes  ongoing requirements on a responsible party.  These  include
proof  of  financial  responsibility (to cover at least  some  costs  in  a
potential  spill)  and  preparation of an oil spill  contingency  plan.   A
failure to comply with ongoing requirements or inadequate cooperation in  a
spill   event  may  subject  a  responsible  party  to  civil  or  criminal
enforcement  action.   In short, OPA '90 places a burden  on  drilling  rig
owners  or operators to conduct safe operations and take other measures  to
prevent oil spills.  If a spill occurs, OPA '90 then imposes liability  for
resulting damages.

   The  Company  generally  seeks to obtain indemnity  agreements  whenever
possible from the Company's customers requiring such customers to hold  the
Company  harmless in the event of liability for pollution  that  originates
below  the water surface, including, where applicable, liability under  OPA
'90,  and  maintains  marine  liability  insurance  and  contingent  energy
exploration  and  development  coverage  (normal  energy,  exploration  and
development coverage is maintained, to the extent of the Company's interest
in oil and gas properties, for operations of such properties) which affords
limited  protection  to  the  Company.  There is  no  assurance  that  such
insurance or contractual indemnification will be sufficient or effective to
protect the Company from liability under OPA '90.

   In  addition,  the  Outer Continental Shelf Lands  Act  and  regulations
promulgated  pursuant thereto impose a variety of regulations  relating  to
safety  and  environmental protection applicable to  lessees,  permits  and
other  parties  operating on the Outer Continental Shelf.  Specific  design
and  operational  standards may apply to Outer Continental  Shelf  vessels,
rigs,  platforms, vehicles and structures.  Violations of lease  conditions
or regulations issued pursuant to the Outer Continental Shelf Lands Act can
result  in  substantial civil and criminal penalties as well  as  potential
court  injunctions  curtailing operations and the cancellation  of  leases.
Such enforcement liabilities can result from either governmental or citizen
prosecution.

   The  Company  believes  it  is  in material compliance  with  applicable
federal,  state, local and foreign legislation and regulations relating  to
environmental   controls.   However,  the  existence  of  such   laws   and
regulations has had and will continue to have a restrictive effect  on  the
Company and its customers.

                       Operating Risks and Insurance

   The  Company's operations are subject to many hazards.  In the  drilling
of oil and gas wells, especially exploratory wells where little is known of
the   subsurface   formations,  there  always  exists  a   possibility   of
encountering unexpected conditions of extreme pressure and temperature  and
the  risk  of  a  blowout, cratering and fires that could cause  injury  or
death,   damage  to  property,  pollution,  and  suspension   of   drilling
operations.   The  Company's fleet is also subject to hazards  inherent  in
marine  operations, either while on site or under tow, such  as  capsizing,
grounding,  collision,  damage from heavy weather  or  sea  conditions  and
unsound  location.   The Company may also be subject to liability  for  oil
spills,  reservoir damage and other accidents that could cause  substantial
damage.   The  Company  maintains such insurance  protection  as  it  deems
prudent, including liability insurance and insurance against damage  to  or
loss  of  equipment.  In addition, the Company generally  seeks  to  obtain
indemnity  agreements  whenever  possible  from  the  Company's  customers,
requiring such customers to hold the Company harmless in the event of  loss
of  production, reservoir damage or liability for pollution that originates
below  the  water surface.  When obtained, such contractual indemnification
protection  may  not  in  all  cases  be supported  by  adequate  insurance
maintained  by the customer.  There is no assurance that such insurance  or
contractual indemnity protection will be sufficient or effective under  all
circumstances or against all hazards to which the Company may  be  subject.
The principal hazards against which the Company may not be fully insured or
indemnified are environmental liabilities which may result from  a  blowout
or  similar accident or a liability resulting from reservoir damage alleged
to  be  caused  by  the  negligence or other legal fault  of  the  Company.
Further,  there  is no assurance that the Company will be  able  to  obtain
adequate insurance coverage at the rates it deems reasonable in the future.
Recognizing these risks, the Company has various programs that are designed
to promote a safe environment for its personnel and equipment.

   At   present,  the  Company  intends  generally  to  maintain   business
interruption insurance with respect to its semisubmersibles and drillships,
but not with respect to the other rigs or vessels in its fleet.

   The  Company's foreign operations are also subject to certain political,
economic  and other uncertainties, including, among others, risks  of  war,
expropriation, nationalization, renegotiation or nullification of  existing
contracts,  taxation  policies,  foreign  exchange  restrictions,  changing
political conditions, international monetary fluctuations and other hazards
arising out of foreign governmental sovereignty over certain areas in which
the   Company  conducts  operations.  Currently,  when  conducting  foreign
drilling operations in areas the Company perceives as politically unstable,
the  Company  may  (i)  negotiate contracts providing  for  indemnification
against  expropriation and certain other political risks or  (ii)  purchase
insurance covering such risks, to the extent available at reasonable  cost.
The  Company  believes  it  is  adequately covered  by  insurance,  but  no
assurance  can be given with respect to the availability of such  insurance
at  acceptable  rates  in  the future.  Since 1979,  the  Company  has  not
experienced   any  material  losses  associated  with  the  above-described
political risks.

                                 Employees

   The  Company  emphasizes employee safety, training and  retention.   The
number of employees varies depending on the level of drilling activity.  As
of  February  29, 2000, the Company employed approximately  5,100  persons.
There  are  no  collective  bargaining  contracts  covering  the  Company's
domestic  employees.   As of February 29, 2000, the  Company  employed  235
local  personnel in Venezuela, of which 170 are covered by  the  Collective
Labor  Contract of the Venezuelan Petroleum Industry.  The Company believes
its relations with its employees are good.

Item 3.  Legal Proceedings

   In  November  1988, a lawsuit was filed in the U.S. District  Court  for
the Southern District of West Virginia against Reading & Bates Coal Co.,  a
wholly  owned  subsidiary of the Company, by SCW Associates, Inc.  claiming
breach of an alleged agreement to purchase the stock of Belva Coal Company,
a  wholly owned subsidiary of Reading & Bates Coal Co. with coal properties
in  West  Virginia.  When those coal properties were sold in July  1989  as
part  of  the disposition of the Company's coal operations, the  purchasing
joint  venture indemnified Reading & Bates Coal Co. and the Company against
any  liability Reading & Bates Coal Co. might incur as the result  of  this
litigation.   A judgment for the plaintiff of $32,000 entered  in  February
1991  was  satisfied  and Reading & Bates Coal Co. was indemnified  by  the
purchasing  joint venture. On October 31, 1990, SCW Associates,  Inc.,  the
plaintiff in the above-referenced action, filed a separate ancillary action
in  the  Circuit Court, Kanawha County, West Virginia against the  Company,
Caymen  Coal,  Inc.  (former  owner of the  Company's  West  Virginia  coal
properties),  as  well  as  the  joint venture,  Mr.  William  B.  Sturgill
personally  (former  President of Reading & Bates Coal  Co.),  three  other
companies  in  which  the  Company believes Mr. Sturgill  holds  an  equity
interest,  two  employees  of the joint venture,  First  National  Bank  of
Chicago  and  First  Capital Corporation.  The  lawsuit  seeks  to  recover
compensatory damages of $50.0 million and punitive damages of $50.0 million
for  alleged  tortious  interference with the  contractual  rights  of  the
plaintiff  and to impose a constructive trust on the proceeds  of  the  use
and/or  sale  of  the  assets  of Caymen Coal,  Inc.  as  they  existed  on
October  15,  1988. The Company intends to defend its interests  vigorously
and believes the damages alleged by the plaintiff in this action are highly
exaggerated.  In any event, the Company believes that it has valid defenses
and that it will prevail in this litigation.

   In  January 1999, an action was filed by Mobil Exploration and Producing
U.S.  Inc.  and  affiliates,  St.  Mary  Land  &  Exploration  Company  and
affiliates  and Samuel Geary and Associates, Inc. against Cliffs  Drilling,
its  underwriters and insurance broker in the 16th Judicial District  Court
of St. Mary Parish, Louisiana.  The plaintiffs alleged damages amounting to
in  excess  of $50.0 million in connection with the drilling of  a  turnkey
well  in  1995 and 1996.  The case was tried before a jury in  January  and
February  2000,  and  the  jury returned a verdict of  approximately  $30.0
million  in  favor  of the plaintiffs for excess drilling  costs,  loss  of
insurance  proceeds, loss of hydrocarbons and interest. However, the  trial
court  has not entered a judgment on the verdict, as there are a number  of
matters to be ruled upon before doing so. If a judgment is entered on  such
verdict, Cliffs Drilling intends to appeal and believes its efforts  to  do
so  will  be successful.  The Company believes all but the portion  of  the
verdict representing excess drilling costs of approximately $4.7 million is
covered  by  relevant  primary and excess liability insurance  policies  of
Cliffs  Drilling; however, one insurer has denied coverage and  the  others
have  reserved their rights.  If necessary, Cliffs Drilling and the Company
intend to take appropriate legal action to enforce Cliffs Drilling's rights
with  respect  to  such  policies.  At this time Cliffs  Drilling  and  the
Company  believe  adequate reserves have been established  to  protect  the
interests of Cliffs Drilling and the Company in this matter.

   The  Company is involved in various other legal actions arising  in  the
normal  course of business.  A substantial number of these actions  involve
claims arising out of injuries to employees of the Company who work on  the
Company's  rigs  and  other vessels.  After taking into  consideration  the
evaluation  of  such actions by counsel for the Company and  the  Company's
insurance coverage, 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 consolidated financial position or results of operations.
See Note F of Notes to Consolidated Financial Statements.

Item 4.  Submission of Matters to a Vote of Security Holders

   None.

                                  PART II

Item   5.    Market   for  the  Registrant's  Common  Stock   and   Related
Stockholder Matters

   The  combination of Falcon and R&B became effective at 11:59 p.m. E.S.T.
on  December 31, 1997.  The common stock of R&B Falcon began trading on the
New York Stock Exchange ("NYSE") on January 2, 1998 under the symbol "FLC."
The  following  table sets forth, for the calendar periods  indicated,  the
high  and low sales prices per share of R&B Falcon common stock as reported
by  the NYSE Composite Tape for the periods indicated.  R&B Falcon did  not
declare any dividends on its common stock for the periods indicated.

                                1999                 1998
                         ------------------  ------------------
                            High     Low       High      Low
                         --------  --------  --------  --------

      First Quarter      $  9.250  $  5.188  $ 35.375  $ 23.125
      Second Quarter       11.750     6.625    34.188    20.500
      Third Quarter        16.063     8.938    23.188     8.750
      Fourth Quarter       15.000    10.688    16.500     6.750

   There  were  approximately  3,607 holders of  record  of  the  Company's
common stock as of March 6, 2000.

   In   December  1997,  the  Company  adopted  a  preferred  share  Rights
Agreement. See Note J of Notes to Consolidated Financial Statements.

Item 6.  Selected Financial Data

                          R&B FALCON CORPORATION
                             AND SUBSIDIARIES
                  (in millions except per share amounts)

     The  following  table includes the accounts of R&B  and  Falcon  as  a
result  of the Merger and Cliffs Drilling effective December 1, 1998.   See
Note B of Notes to Consolidated Financial Statements.

                                            Years Ended December 31,
                            ---------------------------------------------------
                               1999       1998       1997       1996      1995
                            ---------  ---------  ---------  ---------  -------
Operating revenues          $   918.8  $ 1,032.6  $   933.0  $   609.6  $ 390.3
                            =========  =========  =========  =========  =======
Income (loss) from continuing
 continuing  operations
 before extraordinary
 gain (loss)                $   (67.8) $    91.0  $    29.8  $   106.7  $  23.5

Income (loss) from
 discontinued operations           -        36.0      (36.0)        -        -

Extraordinary gain (loss)(1)     (1.7)     (24.2)        -          -       3.4
                            ---------  ---------  ---------  ---------  -------
Net income (loss)               (69.5)     102.8       (6.2)     106.7     26.9

Dividends and accretion
 on preferred stock (2)          33.7         -          -         3.6      5.2
                            ---------  ---------  ---------  ---------  -------
Net income (loss) applicable
  to common stockholders    $  (103.2) $   102.8  $    (6.2) $   103.1  $  21.7
                            =========  =========  =========  =========  =======
Net income (loss) per common share:
 Basic:
   Continuing operations    $    (.53) $     .54  $     .18  $     .70  $   .16
   Discontinued operations        -          .21       (.22)       -        -
   Extraordinary gain (loss)     (.01)      (.14)       -          -        .03
                            ---------  ---------  ---------  ---------  -------
       Net income (loss)    $    (.54) $     .61  $    (.04) $     .70  $   .19
                            =========  =========  =========  =========  =======
 Diluted:
   Continuing operations    $    (.53) $     .54  $     .18  $     .67  $   .15
   Discontinued operations        -          .21       (.22)       -        -
   Extraordinary gain (loss)     (.01)      (.14)       -          -        .03
                            ---------  ---------  ---------  ---------  -------
       Net income (loss)    $    (.54) $     .61  $    (.04) $     .67  $   .18
                            =========  =========  =========  =========  =======

Total assets                $ 4,916.1  $ 3,714.0  $ 2,011.4  $ 1,455.8  $ 946.8
                            =========  =========  =========  =========  =======
Long-term obligations
 (including current portion)
  and redeemable stocks     $ 3,229.5  $ 1,872.5  $   827.4  $   514.2  $ 296.7
                            =========  =========  =========  =========  =======
Dividends on Common Stock   $      -   $      -   $      -   $      -   $    -
                            =========  =========  =========  =========  =======
_____________

(1) The extraordinary gain for 1995 and the extraordinary losses  for  1998
    and 1999  are  all  due to the extinguishment of debt obligations.  The
    extraordinary  losses for 1998 and 1999 are net  of  a  tax  benefit of
    $13.0 million and $.9 million, respectively.
(2) In 1995,  Falcon's Series A Convertible Preferred Stock  was  converted
    into approximately  15.6 million shares of common stock  and  in  1996,
    R&B's  $1.625   Convertible   Preferred  Stock   was   converted   into
    approximately 10.2 million shares of common stock.

Item  7.   Management's Discussion and Analysis of Financial Condition  and
Results of Operations

Business Combinations

   On  July 10, 1997, Falcon Drilling Company, Inc. ("Falcon"), renamed  as
R&B Falcon Holdings, Inc., and Reading & Bates Corporation ("R&B"), renamed
as  R&B Falcon (International and Deepwater) Inc., announced that they  had
agreed  to  combine  their  companies under a new  company  --  R&B  Falcon
Corporation ("R&B Falcon") (the "Merger"). On December 23, 1997, the Merger
was  approved by both companies' shareholders and on December 31, 1997, the
Merger  was consummated. Each outstanding share of common stock  of  Falcon
was  converted  into  one  share of common stock of  R&B  Falcon  and  each
outstanding share of common stock of R&B was converted into 1.18 shares  of
common  stock of R&B Falcon. The Merger has been accounted for as a pooling
of  interests  and, accordingly, the consolidated financial statements  for
the year ended December 31, 1997 have been restated to include the accounts
of R&B and Falcon.

   On  December 1, 1998, the Company acquired all of the outstanding  stock
of  Cliffs  Drilling  Company ("Cliffs Drilling").  Cliffs  Drilling  is  a
provider   of  daywork  and  turnkey  drilling  services,  mobile  offshore
production  units  and  well  engineering and management  services.  Cliffs
Drilling's  fleet  consisted  of  16  jack-up  rigs,  three  self-contained
platform rigs, four mobile offshore production units and 11 land rigs.  The
acquisition was effected pursuant to an Agreement and Plan of Merger  dated
August  21, 1998, whereby each share of Cliffs Drilling's common stock  was
converted into 1.7 shares of the Company's common stock and cash in lieu of
fractional   shares.   Total  consideration   for   Cliffs   Drilling   was
approximately $405.1 million. The Company issued approximately 27.1 million
shares  of  its common stock valued at approximately $385.3 million.   This
valuation  was  based upon a price of $14.2125 per share of  the  Company's
common  stock,  which  was  the average closing  price  per  share  of  the
Company's  common stock during the period in which the principal  terms  of
the  merger were agreed upon and the merger was announced. In addition, the
Company  assumed  Cliffs  Drilling's outstanding stock  options  valued  at
approximately $6.2 million and the Company paid approximately $13.6 million
in acquisition costs. The acquisition of Cliffs Drilling was recorded using
the  purchase method of accounting.  The excess of the purchase price  over
the  estimated  fair value of net assets acquired amounted to approximately
$86.8  million,  which  has been accounted for as  goodwill  and  is  being
amortized  over  40 years using the straight-line method. The  consolidated
financial statements include Cliffs Drilling since December 1, 1998.

Results of Operations

   The  Company  reported a net loss for 1999 of $69.5  million  ($.54  per
diluted  share  after dividends and accretion on preferred stock  of  $33.7
million) compared to net income of $102.8 million ($.61 per diluted  share)
for  1998 and a net loss of $6.2 million ($.04 per diluted share) for 1997.
Included  in  the 1999 results was a $34.7 million expense related  to  the
drillship  conversion  projects  that  were  cancelled  in  1998   and   an
extraordinary  loss  of  $1.7  million due to the  extinguishment  of  debt
obligations.  Included in the 1998 results was a $118.3 million expense due
to the cancellation of four drillship conversion projects, an extraordinary
loss  of  $24.2 million due to the extinguishment of debt obligations,  the
reversal  of  $8.0  million of merger expenses due to an  Internal  Revenue
Service  ruling  and  the reversal of $36.0 million  of  accrued  estimated
losses  due  to the accounting requirements for recontinuance of previously
discontinued  oil  and gas operations.  Included in the  1997  results  are
merger expenses of $66.4 million and accrued losses related to discontinued
operations of $36.0 million.

   Operating Revenues
                                         Years Ended December 31,
                                      -----------------------------
     Operating revenues (in millions)   1999       1998       1997
                                      -------   ---------   -------
       Deepwater                      $ 354.9   $   392.5   $ 349.3
       Shallow water                    198.9       382.9     333.2
       Inland water                     121.7       244.3     249.9
       Engineering services
         and land operations            242.8        12.9        -
       Development                         .5          -         .6
                                      -------   ---------   -------
            Total                     $ 918.8   $ 1,032.6   $ 933.0
                                      =======   =========   =======

   Operating   revenues   are  primarily  a  function   of   dayrates   and
utilization.  Operating revenues decreased $113.8 million from 1998 to 1999
due  to the following: The deepwater fleet revenues decreased $37.6 million
primarily due to a decrease in utilization, offset by the activation of the
Deepwater  Millennium  and Deepwater Expedition in the  fourth  quarter  of
1999. The shallow water fleet revenues decreased $184.0 million despite the
increase  in  revenues generated from the purchase of  Cliffs  Drilling  in
December  1998.  Such  decrease is primarily due to lower  utilization  and
dayrates. The inland water fleet revenues decreased $122.6 million also due
to lower utilization and dayrates. Engineering services and land operations
revenues increased $229.9 million due to the purchase of Cliffs Drilling in
December 1998.

   Operating revenues increased $99.6 million from 1997 to 1998 due to  the
following:  The deepwater fleet revenues increased $43.2 million  primarily
due  to  an increase in dayrates and due to the activation of the  C.  Kirk
Rhein,  Jr.   The  shallow  water fleet revenues  increased  $49.7  million
primarily  due  to  an  increase in dayrates for the international  jack-up
fleet.   Although  the  inland water fleet's revenues  remained  relatively
constant  from  1997  to  1998,  there  was  an  increase  in  the   marine
transportation fleet revenues primarily due to fleet additions offset by  a
decrease  in  the barge fleet due to decreased utilization. The engineering
services and land operations revenues were attributable to the purchase  of
Cliffs Drilling on December 1, 1998.

   Operating Expenses
                                       Years Ended December 31,
                                      ---------------------------
     Operating expenses (in millions)   1999      1998      1997
                                      -------   -------   -------
       Deepwater                      $ 174.1   $ 186.1   $ 140.2
       Shallow water                    152.6     161.5     158.7
       Inland water                      99.0     169.1     136.7
       Engineering services
         and land operations            181.7      11.1        -
       Development                        3.7      19.5     130.2
                                      -------   -------   -------
            Total                     $ 611.1   $ 547.3   $ 565.8
                                      =======   =======   =======

   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  of  equipment  and
overhauls  are  performed  on  a  basis of  number  of  hours  operated  in
accordance  with  the Company's preventive maintenance  program.  Operating
expenses  for  an  offshore unit are typically deferred or  capitalized  as
appropriate  during  periods of mobilization, contract  preparation,  major
upgrades  or  conversions  unless  corresponding  mobilization  revenue  is
recognized, in which case such operating expenses are expensed as incurred.

   Operating expenses increased $63.8 million from 1998 to 1999 due to  the
following:  Operating expenses increased primarily due to the  increase  in
the  engineering  services and land operations segment resulting  from  the
purchase of Cliffs Drilling in December 1998. Offsetting this increase were
lower  operating expenses for the deepwater, shallow water and inland water
fleets  despite  the increase in expenses generated from  the  purchase  of
Cliffs  Drilling in December 1998. Such decrease is primarily due to  lower
utilization  fleetwide. Also included as a reduction of operating  expenses
in 1999, in the inland water segment, is a gain of $16.1 million due to the
total  loss  of a drilling barge as a result of a blowout and fire  and  an
$8.3  million gain, in the shallow water segment, due to the settlement  of
the  W.D.  Kent derrick equipment casualty. Such casualty occurred  in  the
third quarter of 1997 as a result of a blowout and fire.

   Operating expenses decreased $18.5 million from 1997 to 1998 due to  the
following:  The development division expenses decreased $110.7 million  due
to  dryhole costs and impairment charges relating to oil and gas properties
in  1997.  Offsetting  this decrease was a $45.9 million  increase  in  the
deepwater  fleet expenses primarily due to the activation of  the  C.  Kirk
Rhein, Jr. and increased wage rates, a $32.4 million increase in the inland
water  fleet  expenses  primarily  due  to  the  additions  to  the  marine
transportation  fleet and a $11.1 million increase in engineering  services
and  land operations due to the purchase of Cliffs Drilling on December  1,
1998.

   Cancellation of Conversion Projects

   Cancellation  of conversion projects expense of $118.3 million  in  1998
and  $34.7  million  in 1999 is the result of the 1998 termination  of  the
Peregrine  VI,  Peregrine VIII and two other drillship conversion  projects
that  were in the preliminary phases.  Such expense includes shipyard costs
(for  services  performed  and  in settlement  of  contract  cancellation),
Company  personnel  and  contractor costs, engineering  costs,  capitalized
interest,  and  write-down of surplus equipment and the vessels  that  were
purchased  for  conversion. Such projects were cancelled due to  continuing
uncertainty as to the final cost and expected delivery dates. See Liquidity
and Capital Resources - Capital Expenditure Commitments.

   Depreciation and Amortization
                                        Years Ended December 31,
                                      ---------------------------
                                        1999      1998      1997
                                      -------   -------   -------
     Depreciation and
       amortization (in millions)     $ 158.0   $  98.0   $  84.7
                                      =======   =======   =======

   The  $60.0 million increase in depreciation and amortization expense  in
1999  from  1998  is  primarily due to the purchase of Cliffs  Drilling  in
December  1998,  the purchase and/or significant upgrades of  offshore  and
inland  marine  vessels  during 1998 and the activation  of  the  Deepwater
Millennium, Deepwater Expedition and the Falcon 100 in the latter  part  of
1999.

   Despite  the  reduction  in  depreciation expense  for  the  year  ended
December  31,  1998 of approximately $20.7 million due to the extension  of
the  expected useful lives of the Company's marine units effective  January
1, 1998, depreciation expense increased $13.3 million in 1998 from 1997 due
to  the  purchase and/or significant upgrades of offshore and inland marine
vessels during 1998 and late 1997.

   General and Administrative Expenses
                                        Years Ended December 31,
                                      ---------------------------
                                        1999      1998      1997
                                      -------   -------   -------
     General and administrative
       expenses (in millions)         $  69.9   $  61.2   $  55.7
                                      =======   =======   =======

   General  and  administrative expenses increased  $8.7  million  in  1999
compared  to  1998  primarily due to $6.6 million of executive  termination
expense,  $1.5 million of employee incentive compensation expense  and  the
purchase of Cliffs Drilling in December 1998. See Notes K and Q of Notes to
Consolidated Financial Statements.

   General  and  administrative expenses increased  $5.5  million  in  1998
compared  to  1997  primarily  due  to increases  in  payroll  and  related
expenses.

   Merger Expenses

   In  connection  with  the  Merger between R&B and  Falcon,  the  Company
recorded  $66.4 million of merger expenses in the fourth quarter  of  1997.
Merger  expenses  consisted  primarily of employment  contract  termination
payments  associated with executives of R&B, the acceleration  of  unearned
compensation  of  certain stock grants previously awarded  to  certain  R&B
employees,  fees  for investment bankers, attorneys, and  accountants,  and
printing  and  other related costs. In 1998, the Company recorded  an  $8.0
million  reduction of merger expenses primarily due to an Internal  Revenue
Service   ruling  received  relating  to  taxes  on  executive  termination
payments.

   Interest Expense
                                       Years Ended December 31,
                                      ---------------------------
                                        1999     1998       1997
                                      -------   -------   -------
     Interest expense, net of interest
         capitalized (in millions)    $ 169.8   $  63.9   $  41.6
                                      =======   =======   =======

   The  $105.9 million increase in interest expense in 1999 as compared  to
1998 was primarily attributable to the issuance of $400.0 million of senior
notes  in December 1998, $1.0 billion of senior notes in March 1999  and  a
$250.0  million  project  financing in  August  1999.   This  increase  was
partially  offset  by  a  $35.0 million increase  in  capitalized  interest
related  to  significant upgrade and new build projects.  Noncash  interest
expense  attributable  to  amortization of discounts  associated  with  the
Company's  debt obligations for the year ended December 31,  1999  was  $.7
million.  See Liquidity and Capital Resources - Debt Issuance  and  Project
Financings.

   The  $22.3  million increase in interest expense in 1998 as compared  to
1997  was primarily attributable to the issuance of $1.1 billion of  senior
notes  in  April  1998.  This increase was partially  offset  by  increased
capitalized interest related to significant upgrade and new build projects.
Noncash   interest  expense  attributable  to  amortization  of   discounts
associated with the Company's debt obligations for the year ended  December
31, 1998 was $3.4 million.

   Interest Income

   Interest  income increased in 1999 as compared to 1998 due to  increased
cash and short-term investment balances during the period.

   Income (loss) from equity investees plus related income

   Income  from equity investees plus related income increased in  1999  as
compared  to 1998 primarily due to the Deepwater Pathfinder which commenced
operations in the latter part of the first quarter of 1999.  See Note C  of
Notes to Consolidated Financial Statements.

   Income Tax Expense (Benefit)
                                       Years Ended December 31,
                                      ---------------------------
                                        1999     1998      1997
                                      -------   -------   -------
     Income tax expense
       (benefit) (in millions)        $ (31.6)  $  58.9   $  84.7
                                      =======   =======   =======

   The $90.5 million decrease in income tax expense in 1999 as compared  to
1998 is primarily due to the decrease in pre-tax income.  The $25.8 million
decrease in income tax expense in 1998 as compared to 1997 was due  to  the
non-deductible merger expenses, which were incurred in 1997,  and  the  tax
benefits  related  to the recontinued operations being  fully  reserved  in
1997.

   In  1998, the Company began recording income taxes at the full statutory
rates as future tax benefit carryforwards will no longer be reserved.

   Minority Interest
                                       Years Ended December 31,
                                      ---------------------------
                                        1999      1998      1997
                                      -------   -------   -------
     Minority interest (in millions)  $  12.3   $  11.3   $   9.4
                                      =======   =======   =======

   Minority  interest relates primarily to the results of  Arcade  Drilling
and  the 25.6% attributable to stockholders other than the Company.  Arcade
Drilling  reported  income in 1999, 1998 and 1997 of $46.9  million,  $44.2
million and $36.9 million, respectively.

  Extraordinary Loss

   Extraordinary losses for 1999 of $1.7 million, net of a tax  benefit  of
$.9  million  and  1998  of $24.2 million, net of a tax  benefit  of  $13.0
million  are  both  due  to  the  extinguishment  of  debt  obligations  in
connection with the issuance of new debt obligations. See Notes A and E  of
Notes to Consolidated Financial Statements.

Oil & Gas Activities

  The  Company's  oil  and gas business is operated primarily  through  its
majority-owned subsidiaries Reading & Bates Development Co. ("Devco"),  and
to  an  insignificant extent, through its wholly-owned subsidiaries  Raptor
Exploration Company, Inc. and Cliffs Oil and Gas Company.

  In  1998,  Devco  incurred  dryhole costs  of  $11.7  million  and  asset
impairment charges of $11.3 million. In 1997, Devco incurred dryhole  costs
of $65.1 million and asset impairment charges of $42.8 million.

Liquidity and Capital Resources

  Cash Flows

   Net  cash provided by operating activities was $198.6 million for  1999,
compared  to  $247.9  million  and  $330.1  million  for  1998  and   1997,
respectively.   Fluctuations  between  the  years  are  primarily  due   to
increases  and  decreases  in net income as a  result  of  fluctuations  in
dayrates  and  utilization,  offset by the changes  in  the  components  of
working capital.

   Net  cash  used in investing activities was $1,315.3 million  for  1999,
compared  to  $1,061.6  million  for 1998  and  $703.6  million  for  1997.
Increases  between  the  years are primarily due to  capital  expenditures,
primarily  related  to  the  significant  capital  projects  involving  the
construction  or upgrade of drilling units and rig and vessel acquisitions.
Also  in  1999,  purchase of short-term investments increased  due  to  the
investment  of  a  portion of the proceeds from debt  and  preferred  stock
offerings  (see  below),  and the increase in  cash  dedicated  to  capital
projects  which  will be used for capital expenditures  and  principal  and
interest   payments  (see  Note  A  of  Notes  to  Consolidated   Financial
Statements).

   Net  cash  provided  by  financing activities was $1,194.4  million  for
1999, compared to $935.6 million for 1998 and $301.2 million for 1997.  The
increase  in  1999 as compared to 1998 is due to proceeds received  from  a
$1.0 billion debt offering, $300.0 million preferred stock offering and the
$250.0  million  financing for the construction of the Deepwater  Nautilus,
offset  by the repayment of certain existing debt obligations. The increase
in  1998 as compared to 1997 was primarily due to proceeds from two  senior
note  offerings totaling $1.5 billion during 1998, offset by the  repayment
of certain existing debt obligations.

   Debt Issuance

   On  March 26, 1999, the Company issued three series of senior notes with
an  aggregate principal amount of $1.0 billion. The senior notes  consisted
of  $400.0 million of 11% senior secured notes due 2006, $400.0 million  of
11.375%  senior secured notes due 2009 and $200.0 million of 12.25%  senior
notes  due  2006  (collectively, the "Senior Notes").  The  $800.0  million
senior  secured  notes are collateralized by ten of the Company's  drilling
rigs.  As  a  result,  the Company received net proceeds  of  approximately
$970.6  million  after deducting offering expenses. The  Company  used  the
proceeds to repay existing indebtedness of approximately $556.0 million and
the  remainder  will  be  used to acquire, construct,  repair  and  improve
drilling  rigs and for general corporate purposes.  See Note E of Notes  to
Consolidated Financial Statements.

   Preferred Stock Issuance

   On  April 22, 1999, the Company issued 300,000 shares of 13.875%  Senior
Cumulative Redeemable Preferred Stock (the "Preferred Stock") and  warrants
to  purchase 10,500,000 shares of the Company's common stock at an exercise
price  of  $9.50  per  share  (the "Warrants"). The  Company  received  net
proceeds of approximately $288.8 million from the issuance of the Preferred
Stock  and  Warrants.   Each share of Preferred  Stock  has  a  liquidation
preference of $1,000 per share and one Warrant to purchase 35 shares of the
Company's  common stock. The Warrants became exercisable on July  7,  1999.
The  Warrants  expire and the Preferred Stock is mandatorily redeemable  at
its face value on May 1, 2009.

   Dividends  are paid quarterly which commenced on August 1, 1999  and  at
the  Company's option may be paid in cash or, on or before May 1, 2004,  in
additional shares of Preferred Stock.  Dividends paid through December  31,
1999  were $22.3 million and were paid by the issuance of additional shares
of  Preferred  Stock.  Dividends accrued at December  31,  1999  were  $7.4
million and are included in the recorded amount of the Preferred Stock. The
Warrants' initial fair value of $159.95 per Warrant, or approximately $48.0
million in total, was recorded as a discount to the Preferred Stock and  an
addition to capital in excess of par. The Warrants' initial fair value  and
Preferred Stock offering expenses of $9.7 million are being amortized on  a
straight-line basis over the Warrants' ten year term. Amortization for  the
year  ended December 31, 1999 was $4.0 million.  Preferred Stock  dividends
and  the  amortization of the Warrants' initial value and  Preferred  Stock
offering  expenses  are deducted from net income to arrive  at  net  income
applicable to common stockholders.

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

   Project Financings

   In  August 1999, a subsidiary of the Company completed a $250.0  million
project financing for the construction the Deepwater Nautilus in which such
subsidiary  received  net proceeds of approximately  $245.2  million.   The
financing  consists of two five-year notes. The first note  is  for  $200.0
million and bears interest at 7.31%, with monthly interest payments,  which
commenced  in September 1999, and monthly principal payments commencing  in
June  2000.   The  second note is for $50.0 million and bears  interest  at
9.41%,  with monthly interest payments, which commenced in September  1999,
and a balloon principal payment which is due at maturity of the loan in May
2005.  Both notes are collateralized by the Deepwater Nautilus and drilling
contract revenues from such rig and are without recourse to the Company.

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

   Credit Facilities

   The  Company  had four bank facilities, three of which  were  repaid  in
March  1999 from proceeds from the Senior Notes and one that was terminated
on  January  3,  2000.   The  first was a $350.0 million  revolving  credit
facility with a syndicate of banks, which had been fully drawn at the  time
of  repayment in March 1999. See Note E of Notes to Consolidated  Financial
Statements.

   The  second  bank  facility  was a $125.0 million  interim  construction
facility  with  a syndicate of banks for the construction of the  Deepwater
Millennium,  which had been fully drawn at the time of repayment  in  March
1999. See Note D of Notes to Consolidated Financial Statements.

   The  third  bank  facility was an interim construction facility  with  a
syndicate  of  banks for the construction of the Deepwater Frontier.   This
interim loan was made to a limited liability company, which is owned 60% by
the Company and 40% by Conoco.  The Company had guaranteed repayment of 60%
of  this interim loan. At the time of repayment in March 1999, this  credit
facility  had  been  drawn  to  $135.0 million  and  $81.0  million,  which
represents the Company's portion, was repaid.

   The  fourth bank facility was a $35.0 million revolving credit  facility
maintained by Cliffs Drilling. At December 31, 1999, there were no  amounts
outstanding  and  on January 3, 2000 such facility was  terminated  by  the
Company. See Note E of Notes to Consolidated Financial Statements.

   Capital Expenditure Commitments

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

                 Water Depth Estimated   Contract              Expenditures
                 Capability   Delivery    Term     Estimated     Made thru
                   (feet)      Date      (years)     Cost    December 31, 1999
                   ------      ----      -------   --------  -----------------
Drillships:                                          (in millions)
DEEPWATER
  PATHFINDER(1)    10,000    Delivered        5    $  277.0      $  272.9
DEEPWATER
  FRONTIER (2)     10,000    Delivered       2.5   $  271.0      $  262.9
DEEPWATER
  MILLENNIUM       10,000    Delivered      4 (3)  $  275.0      $  272.6
DEEPWATER
  DISCOVERY        10,000 3rd quarter 2000   3     $  305.0      $  148.0
DEEPWATER
  EXPEDITION       10,000    Delivered       6     $  230.0      $  221.4
DEEPWATER
  NAVIGATOR (4)     7,200 1st quarter 2000   -     $  320.0      $  290.3
Semisubmersibles:
FALCON 100 (5)      2,400    Delivered       -     $  125.0      $  124.8
DEEPWATER NAUTILUS  8,000    Delivered       5     $  350.0      $  311.2
DEEPWATER HORIZON  10,000 1st quarter 2001   3     $  350.0      $   72.5
                                                   --------      --------
                                                   $2,503.0      $1,976.6
                                                   ========      ========
________________________
  (1)  The Company owns a 50% interest in the limited liability company that
       operates this drillship.
  (2)  The Company owns a 60% interest in the limited liability company that
       operates  this  drillship.    Under  the  drilling  contract for this
       drillship, the Company and Conoco have each committed to use this rig
       for two and one-half of the first five years after delivery.   During
       1999, both Conoco and the Company used the rig to drill a well and in
       October 1999 under the  Company's direction, the rig commenced a two-
       year drilling  contract offshore Brazil with Petrobras.
  (3)  Statoil  will  use  this  drillship  for  the first three years after
       delivery, then the Company will alternate use of the rig with Statoil
       every six months for the next two years.
  (4)  On  April  15, 1999, BP Amoco cancelled the drilling contract for the
       Deepwater  Navigator  in accordance with the contract's terms because
       the  drillship  had  not  been  delivered  on  time.  The Company has
       received a letter  of intent from Petrobras for a three-year drilling
       contract offshore Brazil.
  (5)  In May 1999, Petrobras cancelled the drilling contract for the Falcon
       100 based on its interpretation of the cancellation provisions of the
       contract.  The  Company does not believe that Petrobras has the right
       to cancel such contract. The Company has engaged Brazilian counsel to
       pursue  the  Company's  rights  under  the  contract.  The Company is
       currently marketing this rig for work.

   In  the  third  quarter of 1998, the Company cancelled the Peregrine  VI
and  the  Peregrine  VIII drillship conversion projects due  to  continuing
uncertainty as to final cost and expected delivery dates. As a result,  the
drilling  contract on the Peregrine VIII was terminated  on  September  24,
1998,  and  the  drilling contract on the Peregrine VI  was  terminated  on
January 1, 1999. Both terminations were without prejudice to the rights  of
the  oil companies. The Company believes that, based on provisions  of  the
contracts  that preclude recovery of indirect or consequential damages  and
projected  rig availability in the offshore drilling industry, the  Company
will  not have any material liability under these drilling contracts  as  a
result  of  the  termination thereof. The contracts with the  shipyard  for
conversion  of the Peregrine VI and the Peregrine VIII were also cancelled.
In  addition,  in  the  fourth quarter of 1998, the Company  cancelled  two
additional  drillship conversion projects (Peregrine IX  and  Peregrine  X)
that  were  in  the preliminary phases.  As a result of the termination  of
these  four  drillship  conversion projects, the Company  expensed   $118.3
million in related costs in 1998.

   In  connection  with  the  drillship conversion  projects,  the  Company
purchased  or  committed to purchase drilling equipment with  an  aggregate
cost  of approximately $285.0 million. The Company expected to use some  of
the surplus equipment on other construction and/or upgrade projects and  to
maintain  the balance as inventory. A majority of the equipment  originally
ordered  was directed to other construction projects. However, the  Company
determined  that  a portion of such surplus equipment was  not  usable  for
other projects or as spare parts and as a result the Company expensed $25.6
million  in the third quarter of 1999 to write-down such inventory  to  net
realizable  value.  As of December 31, 1999, the Company had  approximately
$59.0 million remaining of such surplus drilling equipment. The Company  is
continually reviewing the value and utility of such equipment and if in the
future  it is determined the Company cannot realize the recorded  value  of
the  surplus  equipment, the Company could incur additional  write-offs  or
write-downs of such equipment.

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

   In  the  fourth  quarter of 1999, the Company expensed $3.0  million  in
connection  with the final settlement with the shipyard and the  write-down
of the Peregrine VI and Peregrine VIII hulls to estimated scrap value.

   In  September  1998,  the Company and Navis ASA ("Navis"),  a  Norwegian
public  company  which  is constructing a dynamically positioned  drillship
(the  Navis  Explorer I), entered into an agreement pursuant to  which  the
Company agreed to make a capital contribution to Navis of $50.0 million  in
exchange  for stock in Navis. The Navis Explorer I is designed to drill  in
10,000  feet of water and is being constructed at Samsung Heavy  Industries
Co.  Ltd. at an estimated cost of $310.0 million, with a scheduled delivery
in  the  second quarter of 2000. As of December 31, 1999, the  Company  had
contributed  $45.2  million  in cash and $17.7  million  of  equipment  and
equipment purchase orders. As a result of such contributions, the Company's
ownership  in Navis approximated 38.6%. Most of the equipment and equipment
purchase  orders  that  were or will be contributed  by  the  Company  were
acquired  by the Company in connection with the Peregrine VI and  Peregrine
VIII  projects  and are no longer required for such projects  in  light  of
their  cancellation. Navis and the Company have entered into  an  agreement
pursuant  to which the Company will supervise construction of the drillship
and manage it following its delivery.

   The  Deepwater  Expedition, Falcon 100 and Deepwater Navigator  were  or
will  be  completed later than the required commencement  dates  under  the
drilling  contracts for such rigs and at costs significantly in  excess  of
original  estimates.  The  customers  for  the  Falcon  100  and  Deepwater
Navigator have cancelled the drilling contracts for such rigs based on  the
rigs  not  being delivered on time. The Company is currently marketing  the
Falcon  100  for work and the Company has received a letter of intent  from
Petrobras for the use of the Deepwater Navigator for a three-year  drilling
contract offshore Brazil. The customer for the Deepwater Expedition did not
cancel  its  drilling contract and as of the date of this  filing  no  late
penalties had been claimed. However, if late penalties are legally  imposed
on the Deepwater Expedition, such amounts will be capitalized and amortized
over  the term of the initial drilling contract, subject to a determination
of realizability.

   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.

Liquidity

   Activity  in  the  contract drilling industry and  related  oil  service
businesses has deteriorated significantly in the past year due primarily to
decreased worldwide demand for drilling rigs and related services resulting
from  a substantial decline in crude oil prices experienced in 1998 through
the first quarter of 1999. In mid 1999, crude oil prices began to recover ,
but  there  can be no assurance that demand for drilling rigs  and  related
services  will  recover proportionately. To date, demand for drilling  rigs
has  not  recovered to the levels experienced in 1996-1998.  Oil companies'
demand  for  offshore drilling services are a function of:  1) current  and
projected oil and gas prices, 2) government taxation and concession/leasing
policies,  3)  the  oil  company's lease inventory  and  existing  drilling
commitments on leases held, 4) the oil company's free cash flow and general
funding  availability,  5) the oil company's internal  reserve  replacement
requirements,  6)  geopolitical  factors  (e.g.,  the  drive  for  national
hydrocarbons  self  sufficiency).  The first factor  is  by  far  the  most
important.   In particular, the domestic shallow water market tends  to  be
primarily  driven  by  the  price of natural gas.  Changes  in  demand  for
exploration  and production services can 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. In
late  1998  and early 1999, lower crude oil prices reduced exploration  and
production  spending,  which  led  to  significantly  lower  dayrates   and
utilization for offshore drilling companies, particularly in the U.S.  Gulf
of  Mexico. Management believes such decline in demand also contributed  to
terminated or renegotiated contracts for certain of the Company's deepwater
rigs. Crude oil and natural gas prices have continued to fluctuate over the
last several years. If crude oil prices decline or a weakness in crude  oil
prices  continued  for  an  extended  period,  there  could  be  a  further
deterioration  in  both rig utilization and dayrates  which  could  have  a
material adverse affect on the Company's liquidity, financial position  and
results of operations.

   During  1999,  the  Company received net proceeds of approximately  $1.3
billion  from  the  issuance of senior notes and  preferred  stock,  and  a
subsidiary of the Company received approximately $245.2 million in  project
financing for the construction of the Deepwater Nautilus. The proceeds were
used  to  repay existing indebtedness of approximately $556.0 million  with
the remainder being used to acquire, construct, repair and improve drilling
rigs  and  for general corporate purposes. Also, the Company is considering
certain  asset  sales,  including the Seillean and Iolair,  and  under  the
Company's  indenture  covenants, the Company may  enter  into  a  revolving
credit  facility  up to approximately $180.0 million.  As of  December  31,
1999,  the Company had $717.0 million of cash, cash equivalents, short-term
investments and cash dedicated to capital projects (see Note A of Notes  to
Consolidated Financial Statements).

   The Company has substantially completed or is currently constructing  or
significantly upgrading nine deepwater drilling rigs. The Company estimates
its capital expenditure commitments on these projects and its other routine
capital expenditures for 2000 to total approximately $540.0 million.

   The  Company has limited ability under its indenture covenants to  incur
additional  recourse  indebtedness.  However,  the  Company  believes   its
projected  level of cash flows from operations, which assumes  an  industry
recovery in 2000, cash on hand, potential asset sales and/or new financings
will  be  sufficient  to  satisfy the Company's  short-term  and  long-term
working  capital  needs, planned investments, capital  expenditures,  debt,
lease  and  other payment obligations. If the Company were to build  excess
cash  balances, it will most likely use a portion of the excess  to  retire
debt and/or preferred obligations.

   The  impact  of  general economic inflation on the Company's  operations
for the three years ended December 31, 1999 has not been material.

Year 2000

   The  Year 2000 issue ("Y2K") arose as a result of many computer  systems
being  affected in some way by the rollover of the two-digit year value  to
00.  The  Company  undertook  a Y2K compliance  program  to  assess,  test,
implement  and  develop  contingency plans for  those  systems  potentially
affected by Y2K as well as contacting third parties with which the  Company
has  a  substantial  relationship  to  assess  their  status.  The  Company
completed its Y2K compliance program and made certain modifications to  its
existing software and systems and/or conversions to new software. As of the
date of this filing, the Company has not experienced any disruption of  its
operations  due  to  Y2K.  The total cost of the Company's  Y2K  compliance
program  was approximately $3.0 million, which consisted primarily  of  the
replacement  of accounting software for one of the Company's  wholly  owned
subsidiaries. The Company does not anticipate to incur any significant  Y2K
related costs in 2000.

Other

    On  April  7, 1999, the Company announced that Mr. Steven Webster,  the
Company's President and Chief Executive Officer, had agreed to resign  from
these  officer positions effective May 31, 1999. On May 19, 1999, Mr.  Paul
B.  Loyd,  Jr.,  the Company's Chairman of the Board, was  elected  as  the
Company's  Chief Executive Officer, and Mr. Andrew Bakonyi was  elected  as
President  and Chief Operating Officer. Mr. Webster remains a  Director  of
the Company.

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

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

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

   In  January 1999, an action was filed by Mobil Exploration and Producing
U.S.  Inc.  and  affiliates,  St.  Mary  Land  &  Exploration  Company  and
affiliates  and Samuel Geary and Associates, Inc. against Cliffs  Drilling,
its  underwriters and insurance broker in the 16th Judicial District  Court
of St. Mary Parish, Louisiana.  The plaintiffs alleged damages amounting to
in  excess  of $50.0 million in connection with the drilling of  a  turnkey
well  in  1995 and 1996.  The case was tried before a jury in  January  and
February  2000,  and  the  jury returned a verdict of  approximately  $30.0
million  in  favor  of the plaintiffs for excess drilling  costs,  loss  of
insurance  proceeds, loss of hydrocarbons and interest. However, the  trial
court  has not entered a judgment on the verdict, as there are a number  of
matters to be ruled upon before doing so.  If a judgment is entered on such
verdict, Cliffs Drilling intends to appeal and believes its efforts  to  do
so  will  be successful.  The Company believes all but the portion  of  the
verdict representing excess drilling costs of approximately $4.7 million is
covered  by  relevant  primary and excess liability insurance  policies  of
Cliffs  Drilling; however, one insurer has denied coverage and  the  others
have  reserved their rights.  If necessary, Cliffs Drilling and the Company
intend to take appropriate legal action to enforce Cliffs Drilling's rights
with  respect  to  such  policies.  At this time Cliffs  Drilling  and  the
Company  believe  adequate reserves have been established  to  protect  the
interests of Cliffs Drilling and the Company in this matter.

   In  April  1998,  Cliffs  Drilling was awarded  a  contract  from  PDVSA
Exploration  and  Production  ("PDVSA")  to  drill  60  turnkey  wells   in
Venezuela. The drilling program commenced in March 1998 and the program was
expected  to  extend over approximately three and one-half  years  and  was
expected to utilize seven of the Company's land drilling rigs in Venezuela.
However,  during the first quarter of 1999, in response to the downturn  in
the market, PDVSA and the Company renegotiated prices for the next 14 wells
to  be  drilled  under  this  program.  In  the  fourth  quarter  of  1999,
negotiations  were completed for the following seven wells  to  be  drilled
under this program at further reduced margins. As of December 31, 1999, the
Company had completed 29 wells with 6 wells remaining to be completed. Such
remaining  wells  are  expected to be completed by the  end  of  the  first
quarter in 2000.  In regards to the remaining 25 of the original 60  wells,
a  contractual commitment no longer exists and no assurance  can  be  given
that such wells will ultimately be drilled.

   On  February 15, 2000, the Company announced the election of Mr.  R.  A.
(Rich)   Pattarozzi   to  the  Company's  Board  of   Directors   effective
immediately. Mr. Pattarozzi recently retired from Shell Offshore Inc. after
a  career with various Shell Oil Company affiliates beginning in 1966.  Mr.
Pattarozzi  served  as  President  and Chief  Executive  Officer  of  Shell
Deepwater  Development Inc. and President and Chief  Executive  Officer  of
Shell  Deepwater Production Inc. and was Vice President of  Shell  Offshore
Inc.  where he had responsibility for Shell Deepwater Development Inc.  and
Shell  Deepwater  Production Inc. He was responsible for  the  exploration,
development and production for Shell's Gulf of Mexico deepwater  properties
and its shelf exploration and production business.

Item 7A.  Quantitative and Qualitative Disclosures About Market Risk

  The Company's earnings and cash flows are subject to fluctuations due  to
changes  in  foreign currency exchange rates.  The Company may  enter  into
forward  exchange contracts to hedge specific commitments  and  anticipated
transactions  but  not for speculative or trading purposes.   However,  the
Company's contracts generally provide for payment in U.S. dollars  and  the
Company does not maintain significant foreign currency cash balances.   See
Note A of Notes to Consolidated Financial Statements.

  The  Company is exposed to changes in interest rates with respect to  its
debt obligations.  The following table sets forth the average interest rate
for the scheduled maturity of the Company's debt obligations as of December
31, 1999 (dollars in millions):
                                                                     Estimated
                                                                     Fair Value
                                                                        at
                                                                    December 31,
                 2000   2001   2002   2003   2004  Thereafter  Total     1999
                ------ ------ ------ ------ ------ ---------- ------- ---------
Fixed Rate Debt:
 Amount         $ 20.1 $ 41.5 $ 38.6 $591.6 $ 44.6  $2,219.7  $2,956.1 $2,891.9
 Average
  interest rate 7.324% 7.622% 7.310% 8.268% 7.310%   9.374%   9.056%

   The  Company is exposed to changes in the price of oil and natural  gas.
The marine contract drilling industry is dependent upon the exploration and
production  programs of oil and gas companies, which in turn are influenced
by the price of oil and natural gas.

Item 8.  Financial Statements and Supplementary Data

                REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS

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

   We  have  audited the accompanying consolidated balance  sheets  of  R&B
Falcon Corporation (a Delaware corporation) and subsidiaries as of December
31,  1999  and 1998, and the related consolidated statements of operations,
cash  flows  and stockholders' equity for each of the three  years  in  the
period  ended  December  31,  1999.  These  financial  statements  are  the
responsibility  of  the  Company's management.  Our  responsibility  is  to
express an opinion on these financial statements based on our audits.

   We  conducted our audits in accordance with generally accepted  auditing
standards in the United States.  Those standards require that we  plan  and
perform  the  audit  to  obtain  reasonable  assurance  about  whether  the
financial statements are free of material misstatement.  An audit  includes
examining, on a test basis, evidence supporting the amounts and disclosures
in  the  financial  statements.   An  audit  also  includes  assessing  the
accounting principles used and significant estimates made by management, as
well  as  evaluating  the  overall financial  statement  presentation.   We
believe that our audits provide a reasonable basis for our opinion.

   In  our  opinion,  the financial statements referred  to  above  present
fairly,  in  all material respects, the consolidated financial position  of
R&B  Falcon Corporation and subsidiaries as of December 31, 1999 and  1998,
and  the consolidated results of their operations and their cash flows  for
each  of  the  three  years  in  the period ended  December  31,  1999,  in
conformity  with  generally accepted accounting principles  in  the  United
States.

/s/Arthur Andersen LLP

Houston, Texas
February 22, 2000


                     R&B FALCON CORPORATION
                        AND SUBSIDIARIES

                   CONSOLIDATED BALANCE SHEET
                   December 31, 1999 and 1998
               (in millions except share amounts)

                                                      1999          1998
                                                   ---------     ---------
 ASSETS
 CURRENT ASSETS:
   Cash and cash equivalents, gross                $   415.5     $   177.4
   Less cash dedicated to capital projects            (160.4)           -
                                                   ---------     ---------
   Cash and cash equivalents, net                      255.1         177.4
   Short-term investments                              301.5            -
   Accounts receivable:
    Trade, net                                         141.3         197.0
    Other                                               86.0          73.5
   Materials and supplies inventory                     52.6          36.1
   Drilling contracts in progress                       16.7          29.5
   Other current assets                                 13.9          25.0
                                                   ---------     ---------
    Total current assets                               867.1         538.5
                                                   ---------     ---------
 INVESTMENTS IN AND ADVANCES TO
 UNCONSOLIDATED INVESTEES                               82.7          28.2
                                                   ---------     ---------
 PROPERTY AND EQUIPMENT:
   Drilling                                          4,034.7       3,369.2
   Other                                               262.5         181.1
                                                   ---------     ---------
    Total property and equipment                     4,297.2       3,550.3
   Accumulated depreciation                           (662.0)       (519.4)
                                                   ---------     ---------
    Net property and equipment                       3,635.2       3,030.9
                                                   ---------     ---------
 GOODWILL, NET OF ACCUMULATED AMORTIZATION              84.8          70.6
                                                   ---------     ---------
 DEFERRED CHARGES AND OTHER ASSETS                     246.3          45.8
                                                   ---------     ---------
 TOTAL ASSETS                                      $ 4,916.1     $ 3,714.0
                                                   =========     =========

 LIABILITIES AND STOCKHOLDERS' EQUITY
 CURRENT LIABILITIES:
   Short-term obligations                          $      -      $   123.4
   Long-term obligations due within one year            20.1           6.3
   Accounts payable - trade                            104.8          64.9
   Accrued liabilities                                 227.9         158.6
                                                   ---------     ---------
    Total current liabilities                          352.8         353.2
 LONG-TERM OBLIGATIONS                               2,933.4       1,866.2
 OTHER NONCURRENT LIABILITIES                           39.7          39.2
 DEFERRED INCOME TAXES                                  53.2         142.4
                                                   ---------     ---------
    Total liabilities                                3,379.1       2,401.0
                                                   ---------     ---------
 COMMITMENTS AND CONTINGENCIES
 MINORITY INTEREST                                      56.6          62.8
                                                   ---------     ---------
 REDEEMABLE PREFERRED STOCK
   322,250.188 shares issued and
   outstanding at December 31, 1999                    276.0            -
                                                   ---------     ---------
 STOCKHOLDERS' EQUITY:
  Common stock, $.01 par value, 550,000,000
    shares authorized, 193,743,778 shares
    and 193,399,910 shares issued and
    outstanding at December 31, 1999 and
    1998, respectively                                   1.9           1.9
  Capital in excess of par value                     1,113.4       1,061.5
  Retained earnings                                     95.9         199.1
  Other                                                 (6.8)        (12.3)
                                                   ---------     ---------
     Total stockholders' equity                      1,204.4       1,250.2
                                                   ---------     ---------
 TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY        $ 4,916.1     $ 3,714.0
                                                   =========     =========

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)

                                                 Years Ended December 31,
                                               ----------------------------
                                                 1999      1998      1997
                                               --------  --------  --------
OPERATING REVENUES:
  Deepwater                                    $  354.9  $  392.5  $  349.3
  Shallow water                                   198.9     382.9     333.2
  Inland water                                    121.7     244.3     249.9
  Engineering services and land operations        242.8      12.9        -
  Development                                        .5        -         .6
                                               --------  --------  --------
     Total operating revenues                     918.8   1,032.6     933.0
                                               --------  --------  --------
COSTS AND EXPENSES:
  Deepwater                                       174.1     186.1     140.2
  Shallow water                                   152.6     161.5     158.7
  Inland water                                     99.0     169.1     136.7
  Engineering services and land operations        181.7      11.1        -
  Development                                       3.7      19.5     130.2
  Cancellation of conversion projects              34.7     118.3        -
  Depreciation and amortization                   158.0      98.0      84.7
  General and administrative                       69.9      61.2      55.7
  Merger expenses                                    -      ( 8.0)     66.4
                                               --------  --------  --------
     Total costs and expenses                     873.7     816.8     772.6
                                               --------  --------  --------
OPERATING INCOME                                   45.1     215.8     160.4
                                               --------  --------  --------
OTHER INCOME (EXPENSE):
  Interest expense, net of
     capitalized interest                        (169.8)    (63.9)    (41.6)
  Interest income                                  35.3       9.6       6.1
  Income (loss) from equity investees
     plus related income                            3.5       (.2)       -
  Other, net                                       (1.2)      (.1)     (1.0)
                                               --------  --------  --------
     Total other income (expense)                (132.2)    (54.6)    (36.5)
                                               --------  --------  --------
INCOME (LOSS) FROM CONTINUING OPERATIONS
 BEFORE INCOME TAXES,  MINORITY INTEREST
 AND EXTRAORDINARY LOSS                           (87.1)    161.2     123.9
                                               --------  --------  --------
INCOME TAX EXPENSE (BENEFIT):
  Current                                          48.3      38.5      39.3
  Deferred                                        (79.9)     20.4      45.4
                                               --------  --------  --------
     Total income tax expense (benefit)           (31.6)     58.9      84.7
                                               --------  --------  --------
MINORITY INTEREST                                 (12.3)    (11.3)     (9.4)
                                               --------  --------  --------
INCOME (LOSS) FROM CONTINUING OPERATIONS
   BEFORE EXTRAORDINARY LOSS                      (67.8)     91.0      29.8
INCOME (LOSS) FROM DISCONTINUED OPERATIONS           -       36.0     (36.0)
EXTRAORDINARY LOSS, NET OF TAX BENEFIT             (1.7)    (24.2)       -
                                               --------  --------  --------
NET INCOME (LOSS)                                 (69.5)    102.8      (6.2)
DIVIDENDS AND ACCRETION ON PREFERRED STOCK         33.7        -         -
                                               --------  --------  --------
NET INCOME (LOSS) APPLICABLE TO COMMON
   STOCKHOLDERS                                $ (103.2) $  102.8  $   (6.2)
                                               ========  ========  ========
NET INCOME (LOSS) PER COMMON SHARE:
  Basic:
     Continuing operations
       after preferred stock dividends         $   (.53) $    .54  $    .18
     Discontinued operations                        -         .21      (.22)
     Extraordinary loss                            (.01)     (.14)      -
                                               --------  --------  --------
       Net income (loss)                       $   (.54) $    .61  $   (.04)
                                               ========  ========  ========
  Diluted:
     Continuing operations
       after preferred stock dividends         $   (.53) $    .54  $    .18
     Discontinued operations                        -         .21      (.22)
     Extraordinary loss                            (.01)     (.14)      -
                                               --------  --------  --------
       Net income (loss)                       $   (.54) $    .61  $   (.04)
                                               ========  ========  ========

WEIGHTED AVERAGE COMMON SHARES OUTSTANDING:
  Basic                                           192.7     167.5     164.1
                                               ========  ========  ========
  Diluted                                         192.7     168.8     166.2
                                               ========  ========  ========

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)

                                                 Years Ended December 31,
                                               ----------------------------
                                                 1999      1998      1997
                                               --------  --------  --------
CASH FLOWS FROM OPERATING ACTIVITIES:
  Net income (loss)                            $  (69.5) $  102.8  $   (6.2)
  Adjustments to reconcile net income
   (loss) to net cash provided by
   operating activities:
    Depreciation and amortization                 158.0      98.0      84.7
    Gain on dispositions of property
      and equipment                               (19.2)     (9.0)     (6.9)
    Cancellation of conversion projects            34.7     118.3        -
    Deferred income taxes                         (80.6)     20.4      47.4
    Recognition of deferred expenses               15.6      12.2       7.1
    Deferred compensation                           5.0       1.1      17.8
    Loss (income) from equity investees
      plus related income                          (3.5)       .2        -
    Minority interest in income of
      consolidated subsidiaries                    12.3      11.3       9.4
    Dryhole and exploration expenses
      relating to oil and gas properties             -       23.2     114.9
    Loss (income) from discontinued operations       -      (36.0)     36.0
    Extraordinary loss from extinguishment of
      debt, net of tax benefit                      1.7      24.2        -
    Changes in assets and liabilities:
      Accounts receivable, net                     50.9     (28.1)    (53.9)
      Materials and supplies inventory            (17.6)     (9.9)      (.8)
      Drilling contracts in progress               13.5      (6.2)       -
      Deferred charges and other assets            12.0     (22.0)    (17.3)
      Accounts payable - trade                     34.2     (17.9)      8.4
      Accrued interest                             33.9      (5.9)      7.1
      Accrued liabilities                           6.3     (21.8)     58.9
      Income taxes                                  9.8      (4.4)     25.9
      Other, net                                    1.1      (2.6)     (2.4)
                                               --------  --------  --------
        Net cash provided by
           operating activities                   198.6     247.9     330.1
                                               --------  --------  --------
CASH FLOWS FROM INVESTING ACTIVITIES:
  Dispositions of property and equipment           28.1      43.0      10.4
  Purchases of property and equipment,
    exclusive of noncash items                   (830.4) (1,152.8)   (682.3)
  Increase in cash dedicated
    to capital projects                          (160.4)       -         -
  Purchase of Cliffs Drilling Company,
    net of cash acquired                             -       28.0        -
  Sale (purchase) of short-term investments      (301.5)     45.4     (29.1)
  Increase in investments in and advances to
    unconsolidated investees                      (51.1)    (25.2)     (2.6)
                                               --------  --------  --------
    Net cash used in investing activities      (1,315.3) (1,061.6)   (703.6)
                                               --------  --------  --------
CASH FLOWS FROM FINANCING ACTIVITIES:
  Proceeds from (payments on) short-term
    obligations                                  (123.4)    123.4        -
  Net proceeds from (payments on) revolving
    credit facilities                            (150.0)   (332.0)    316.0
  Proceeds from long-term obligations           1,215.8   1,494.0      38.0
  Principal payments on long-term obligations     (19.9)   (323.2)    (49.6)
  Premium paid on debt extinguishment                -      (23.9)       -
  Net proceeds from issuance of preferred stock   288.8        -         -
  Distribution to minority shareholders of
    consolidated subsidiaries,
    net of contributions                          (18.6)     (4.0)       -
  Other                                             1.7       1.3      (3.2)
                                               --------  --------  --------
    Net cash provided by financing activities   1,194.4     935.6     301.2
                                               --------  --------  --------
NET INCREASE (DECREASE) IN CASH AND CASH
  EQUIVALENTS                                      77.7     121.9     (72.3)
CASH AND CASH EQUIVALENTS AT BEGINNING OF YEAR    177.4      55.5     127.8
                                               --------  --------  --------
CASH AND CASH EQUIVALENTS AT END OF YEAR       $  255.1  $  177.4  $   55.5
                                               ========  ========  ========
Supplemental Cash Flow Disclosures:
  Interest paid, net of capitalized interest   $  127.4  $  105.6  $   36.5
  Income taxes paid                            $   41.0  $   36.5  $   13.9
  Noncash investing activities:
    Purchase of Cliffs Drilling Company
      in exchange for equity                   $     -   $  391.5  $     -
    Other purchases of property and equipment
      in exchange for equity, debt or other
      noncurrent liabilities                   $    9.3  $   35.5  $    8.0

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

                            R&B FALCON CORPORATION
                               AND SUBSIDIARIES

                CONSOLIDATED STATEMENT OF STOCKHOLDERS' EQUITY
                  For the Three Years Ended December 31, 1999
                              (in millions)

                                                Capital in  Retained
                                  Common Stock   Excess of  Earnings
                                Shares Amount(1) Par Value  (Deficit)   Other
                                ------ --------- ---------  ---------  -------
Balances at December 31, 1996    163.4   $  1.6  $   630.8   $ 102.5   $ (18.2)

Net loss                                                        (6.2)
Activity in Company stock plans    1.2                 8.9
Amortization of restricted
  stock award                                           .9                 6.8
Acceleration of stock award       (.3)                (9.3)               10.1
Other                                                   .1
                               ------   -------   --------   -------   -------
Balances at December 31, 1997   164.3       1.6      631.4      96.3      (1.3)

Net income                                                     102.8
Purchase of assets               27.9        .3      416.4
Activity in Company stock plans    .2                  1.3
Restricted stock award, net of
  amortization                     .9                 12.3               (11.0)
Other                              .1                   .1
                               ------   -------  ---------   -------   -------
Balances at December 31, 1998   193.4       1.9    1,061.5     199.1     (12.3)

Net loss                                                       (69.5)
Dividends and accretion on
  preferred stock                                              (33.7)
Purchase of assets                  .2                 4.1
Contribution to employee
  savings plans                     .1                 1.1
Issuance of subsidiary stock to
  employees                                             .8
Activity in Company stock plans                         .8
Amortization of restricted
  stock award                                         (1.2)                5.5
Issuance of warrants                                  46.4
Other                                                  (.1)
                                ------   ------  ---------   -------   -------
Balances at December 31, 1999    193.7   $  1.9  $ 1,113.4   $  95.9   $  (6.8)
                                ======   ======  =========   =======   =======
____________________
(1) Amounts less than one-tenth of a million are not shown.

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

                          R&B FALCON CORPORATION
                             AND SUBSIDIARIES

                 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

                              ______________

(A)  INDUSTRY CONDITIONS, LIQUIDITY AND SIGNIFICANT ACCOUNTING POLICIES

   CONSOLIDATION  -  The  consolidated  financial  statements  include  the
accounts  of  R&B  Falcon Corporation ("R&B Falcon") and  its  subsidiaries
(collectively,  the  "Company"),  including  R&B  Falcon  (International  &
Deepwater)  Inc., formerly Reading & Bates Corporation ("R&B"); R&B  Falcon
Holdings,  Inc., formerly Falcon Drilling Company, Inc. ("Falcon");  Cliffs
Drilling  Company ("Cliffs Drilling") effective December 1,  1998  and  its
majority-owned  subsidiaries Arcade Drilling AS  ("Arcade")  (approximately
74.4%)  and  Reading  & Bates Development Company ("Devco")  (approximately
86.1%).   All significant intercompany balances and transactions have  been
eliminated.    The  Company  uses  the  equity  method   to   account   for
unconsolidated investees (see Note C).

   INDUSTRY  CONDITIONS/LIQUIDITY  -  Activity  in  the  contract  drilling
industry  and related oil service businesses has deteriorated significantly
in  the  past year due primarily to decreased worldwide demand for drilling
rigs and related services resulting from a substantial decline in crude oil
prices experienced in 1998 through the first quarter of 1999. In mid  1999,
crude  oil  prices  began to recover, but there can be  no  assurance  that
demand for drilling rigs and related services will recover proportionately.
To  date,  demand  for  drilling  rigs has  not  recovered  to  the  levels
experienced  in  1996-1998.  Oil companies' demand  for  offshore  drilling
services  are a function of:  1) current and projected oil and gas  prices,
2)   government  taxation  and  concession/leasing  policies,  3)  the  oil
company's lease inventory and existing drilling commitments on leases held,
4)  the  oil company's free cash flow and general funding availability,  5)
the   oil   company's   internal  reserve  replacement   requirements,   6)
geopolitical  factors  (e.g.,  the drive  for  national  hydrocarbons  self
sufficiency).   The  first  factor  is  by  far  the  most  important.   In
particular, the domestic shallow water market tends to be primarily  driven
by  the  price  of  natural  gas. Changes in  demand  for  exploration  and
production services can 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. In late  1998  and
early  1999,  lower  crude  oil prices reduced exploration  and  production
spending,  which  led to significantly lower dayrates and  utilization  for
offshore  drilling  companies, particularly in the  U.S.  Gulf  of  Mexico.
Management  believes such decline in demand also contributed to  terminated
or  renegotiated  contracts  for certain of the Company's  deepwater  rigs.
Crude oil and natural gas prices have continued to fluctuate over the  last
several  years.  If  crude oil prices decline or a weakness  in  crude  oil
prices  continued  for  an  extended  period,  there  could  be  a  further
deterioration  in  both rig utilization and dayrates  which  could  have  a
material adverse affect on the Company's liquidity, financial position  and
results of operations.

   During  1999,  the  Company received net proceeds of approximately  $1.3
billion  from  the  issuance of senior notes and  preferred  stock,  and  a
subsidiary of the Company received approximately $245.2 million in  project
financing for the construction of the Deepwater Nautilus. The proceeds were
used  to  repay existing indebtedness of approximately $556.0 million  with
the remainder being used to acquire, construct, repair and improve drilling
rigs  and  for general corporate purposes. Also, the Company is considering
certain  asset  sales,  including the Seillean and Iolair,  and  under  the
Company's  indenture  covenants, the Company may  enter  into  a  revolving
credit  facility  up to approximately $180.0 million.  As of  December  31,
1999,  the Company had $717.0 million of cash, cash equivalents, short-term
investments and cash dedicated to capital projects.

   The Company has substantially completed or is currently constructing  or
significantly upgrading nine deepwater drilling rigs. The Company estimates
its capital expenditure commitments on these projects and its other routine
capital expenditures for 2000 to total approximately $540.0 million.

   The  Company has limited ability under its indenture covenants to  incur
additional  recourse  indebtedness.  However,  the  Company  believes   its
projected  level of cash flows from operations, which assumes  an  industry
recovery in 2000, cash on hand, potential asset sales and/or new financings
will  be  sufficient  to  satisfy the Company's  short-term  and  long-term
working  capital  needs, planned investments, capital  expenditures,  debt,
lease  and  other payment obligations. If the Company were to build  excess
cash  balances, it will most likely use a portion of the excess  to  retire
debt and/or preferred obligations.

   CASH  AND  CASH  EQUIVALENTS - The Company considers all  highly  liquid
cash  investments purchased with an original maturity of  three  months  or
less to be cash equivalents. Arcade's cash and cash equivalents balance  is
available  to  Arcade  for all purposes subject to restrictions  under  the
Standstill  Agreement dated as of August 31, 1991 among Arcade,  Transocean
Offshore  Inc.  and R&B which restrictions preclude R&B from borrowing  any
cash from Arcade unless (i) Transocean is offered a pro-rata loan (based on
stock  ownership  in  Arcade) on similar terms and (ii)  any  such  loan(s)
otherwise comply with applicable laws.  At December 31, 1999, $36.9 million
of  the  cash  and  cash  equivalents balance related  to  Arcade.   Arcade
declared  distributions of approximately $110.0 million in 1999,  of  which
the  Company  received  approximately  $78.8  million,  net  of  applicable
withholding  taxes and approximately $15.8 million in 1998,  of  which  the
Company received approximately $11.8 million.

   In  the  third quarter of 1999, the project financings for the Deepwater
Nautilus  (see Note E) and the Deepwater Frontier (see Note C and  E)  were
completed and as a result $160.4 million of the Company's cash at  December
31,  1999 was restricted as to use. Such amount consists of  $110.4 million
related  to  the financing of the Deepwater Nautilus and will be  used  for
capital  expenditures  and  certain principal and  interest  payments.  The
remaining  $50.0  million relates to the financing for the construction  of
the  Deepwater Frontier which collateralizes a five-year standby letter  of
credit  that  the Company was required to secure for the limited  liability
company  to  obtain  such financing. As a result of  the  above,  the  cash
dedicated to these capital projects has been classified as Other Assets.

   SHORT-TERM   INVESTMENTS - Short-term investments consist  of  interest-
bearing  deposits with a commercial bank with an original maturity  greater
than three months but less than one year from the date of the investment.

   MATERIALS AND SUPPLIES INVENTORY - Materials and supplies are stated  at
the lower of average cost or market.

   PROPERTY  AND EQUIPMENT - Property and equipment are stated at  cost  or
market  at  the date of acquisition with respect to purchased property  and
equipment.  Drilling units and marine equipment are depreciated  under  the
straight-line  method.  Gain (loss) on disposal of properties  is  credited
(charged)  to  income. Estimated useful lives range from  three  to  thirty
years.  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  $20.7 million reduction in depreciation expense for  the  year
ended December 31, 1998.

   Costs  incurred  for  construction and significant  upgrades  of  marine
equipment  are accumulated in construction in progress with no depreciation
being  recorded  on  such  amounts until the  construction  or  upgrade  is
completed  and  the  equipment  is placed  into  service.   The  amount  of
construction  in  progress included in drilling equipment at  December  31,
1999  and  1998  was  $1,609.8 million and $1,222.3 million,  respectively.
Certain  marine  equipment  is being held in non-operating  status  pending
modification  and  decisions regarding its deployment. Management  believes
its  market  value  approximates its net book value  of  $62.7  million  at
December 31, 1999.

    The  Company's management periodically evaluates the carrying value  of
its property and equipment based upon the estimated undiscounted future net
cash  flows  of the related asset compared to the carrying amount  of  that
asset.

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

   OIL AND GAS ACCOUNTING - The successful efforts method of accounting  is
used  for  oil and gas exploration and production activities.   Under  this
method,   acquisition  costs  for  proved  and  unproved   properties   are
capitalized  when  incurred.  Exploration costs, including  geological  and
geophysical  costs and costs of carrying and retaining unproved properties,
are  charged  to  expense as incurred.  The costs of  drilling  exploratory
wells  are  capitalized  pending determination of  whether  each  well  had
discovered  proved  reserves. If proved reserves are not  discovered,  such
drilling  costs are charged to expense. Costs incurred to drill  and  equip
development   wells,   including  unsuccessful   development   wells,   are
capitalized. See Note P.

   GOODWILL  - Goodwill from the purchase of Cliffs Drilling (see  Note  B)
is  amortized  on  a  straight-line basis over  40  years.   The  Company's
management  periodically  evaluates  recorded  goodwill  balances,  net  of
accumulated  amortization, for impairment based on  the  undiscounted  cash
flows  associated with the asset compared to the carrying  amount  of  that
asset.  Management believes that there have been no events or circumstances
which  warrant  revision  to  the  remaining  useful  life  or  affect  the
recoverability of its recorded goodwill.

   DEFERRED  CHARGES AND OTHER ASSETS - Deferred charges and  other  assets
include  cash dedicated to capital projects (see CASH AND CASH  EQUIVALENTS
above),  deferred  financing  costs  and  deferred  rig  mobilization   and
preparation  costs.  Deferred charge amounts are stated net of  accumulated
amortization costs and at net realizable value.

   INCOME  TAXES  - Deferred income taxes are recognized for  revenues  and
expenses  reported in different years for financial statement purposes  and
income tax purposes.

   REVENUE  RECOGNITION  -  Revenues are recognized  as  they  are  earned.
Proceeds  associated with the early termination of a contract are  recorded
as  deferred income and recognized as contract revenues over the  remaining
term  of  the cancelled contract or until such time as the mobile  offshore
unit  begins  a  new contract.  In the first quarter of  1999,  a  customer
terminated  a  drilling contract for one of the Company's  third-generation
semisubmersibles and the Company received an early termination fee of  $7.2
million. The semisubmersible was immediately contracted to another customer
and as a result the Company recognized the early termination fee as revenue
in  the  first  quarter of 1999.  There were no such  amounts  deferred  at
December 31, 1999.  In addition, when a unit's mobilization revenue exceeds
the  cost  of  the  mobilization  by  a  significant  amount,  the  Company
recognizes  the excess as contract revenue during the contract  preparation
and  mobilization period on a dayrate basis.  If there is revenue that  has
not  been  recognized  by the time the unit has arrived  on  location,  the
remaining amount is recognized over the primary term of the contract.

   Revenues  and  expenses  related  to  turnkey  drilling  contracts   are
recognized  when  all  terms  and conditions  of  the  contract  have  been
fulfilled.  Consequently, the costs related to in-progress turnkey drilling
contracts are deferred as drilling contracts in progress until the contract
is  completed and revenue is realized.  The amount of drilling contracts in
progress  is  dependent on the volume of contracts,  the  duration  of  the
contract  at  the  end  of the reporting period and  the  contract  amount.
Provision  for losses on incomplete contracts is made when such losses  are
probable and estimable.

   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 years ended  December  31,
1999,  1998  and  1997 was $74.1 million, $39.1 million and $13.7  million,
respectively  and  is included as a reduction of interest  expense  in  the
Consolidated Statement of Operations.

   FOREIGN CURRENCY TRANSACTIONS - The net gains and losses resulting  from
foreign  currency  transactions included in determining net  income  (loss)
amounted  to a net loss of $2.3 million in 1999, a net gain of $.2  million
in  1998  and  a  net loss of $.4 million in 1997.  The loss  in  1999  was
primarily  due to the Company's operations in Venezuela.  The  Company  may
enter  into  forward exchange contracts to hedge specific  commitments  and
anticipated  transactions but not for speculative or trading purposes.   At
December  31,  1999,  the  Company did not  have  any  outstanding  forward
exchange contracts.

   MINORITY  INTEREST - Minority interest relates primarily to the  results
of  Arcade  and  effective in the third quarter of 1999, the majority-owned
(90%)  floating  production vessel Seillean.  The ownership  percentage  of
Arcade, which owns the drilling units Henry Goodrich and Paul B. Loyd, Jr.,
attributable to stockholders other than the Company was 25.6% for  each  of
the  years ending December 31, 1999, 1998 and 1997.  Arcade reported income
in  1999,  1998 and 1997 of $46.9 million, $44.2 million and $36.9 million,
respectively. The 10% minority ownership of the Seillean is the  result  of
Nissho  Iwai Europe PLC ("NIC") exercising, in the third quarter  of  1999,
its option to purchase up to 10% of the vessel (see Note E).

   EXTRAORDINARY  LOSSES  -  In  the first quarter  of  1999,  the  Company
incurred an extraordinary loss of $1.7 million, net of a tax benefit of $.9
million.   In  the  second  quarter  of  1998,  the  Company  incurred   an
extraordinary loss of $22.0 million, net of a tax benefit of $11.9  million
and  in  the  fourth quarter of 1998, the Company incurred an extraordinary
loss  of  $2.2 million, net of a tax benefit of $1.1 million.  Such  losses
were  due to the early extinguishment of debt obligations and consisted  of
premium payments and the write-off of unamortized debt issuance costs.  See
Note E.

   COMPREHENSIVE INCOME - For the years ended December 31, 1999,  1998  and
1997, the Company did not have any non-owner changes in equity.

   CONCENTRATION OF CREDIT RISK -  The Company maintains cash balances  and
short-term  investments with commercial banks throughout  the  world.   The
Company's cash equivalents and short-term investments generally consist  of
commercial  paper, money-market mutual funds and interest-bearing  deposits
with strong credit rated financial institutions, therefore, bearing minimal
risk. No losses were incurred during 1999, 1998 and 1997.

   The  Company's revenues were generated primarily from its drilling rigs.
Revenues  can  be  generated from a relatively small number  of  customers,
which are primarily major and independent foreign and domestic oil and  gas
companies,  as  well  as foreign state-owned oil and  gas  companies.   The
Company  performs  ongoing credit evaluations of its  customers'  financial
conditions  and  generally requires no collateral from its customers.   The
Company's allowance for doubtful accounts at December 31, 1999 and 1998 was
$21.5 million and $11.9 million, respectively.

   NEWLY  ISSUED  ACCOUNTING  STANDARDS  -  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,  as
amended,  is effective for fiscal quarters of fiscal years beginning  after
June  15,  2000. The Company has not yet quantified the impacts of adopting
SFAS 133 on its financial statements.  The Company did not early adopt SFAS
133, therefore it will be adopted in 2001.

   In November 1999, SEC Staff Accounting Bulletin: No. 100 - Restructuring
and  Impairment Charges ("SAB 100") was issued. SAB 100 expresses views  of
the  staff regarding the accounting for and disclosure of certain  expenses
commonly   reported  in  connection  with  exit  activities  and   business
combinations.  The Company's accounting practices are consistent with  this
rule.

    In  December  1999, SEC Staff Accounting Bulletin: No.  101  -  Revenue
Recognition  in  Financial  Statements ("SAB  101")  was  issued.  SAB  101
summarizes  certain  of  the staff's views in applying  generally  accepted
accounting principles to revenue recognition in financial statements.   The
Company believes its accounting practices are consistent with this rule but
will complete its evaluation in the first quarter of 2000.

   USE  OF  ESTIMATES  -  The  preparation of  the  consolidated  financial
statements  in  conformity  with generally accepted  accounting  principles
requires  management  to  make estimates and assumptions  that  affect  the
reported  amounts  of assets and liabilities and disclosure  of  contingent
assets and liabilities at the date of the consolidated financial statements
and  the  reported  amounts of revenues and expenses during  the  reporting
period.  Actual results could differ from those estimates.

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

(B)  BUSINESS COMBINATIONS

   On  December  31, 1997, R&B and Falcon completed a business  combination
(merger)  whereby  each outstanding share of common  stock  of  Falcon  was
converted  into  one share of R&B Falcon common stock and each  outstanding
share  of common stock of R&B was converted into 1.18 shares of R&B  Falcon
common  stock.  The merger qualified as a tax-free exchange  and  has  been
accounted  for as a pooling of interests and, accordingly, the consolidated
financial statements for 1997 have been restated to include the accounts of
R&B and Falcon.

   The  results  of operations for the separate companies and the  combined
amounts  presented in the consolidated financial statements  for  the  year
ended December 31, 1997 is follows (in millions):

                                     1997
                                   -------
             Operating revenues
               R&B                 $ 424.2
               Falcon                508.8
                                   -------
                  Combined         $ 933.0
                                   =======
             Net income (loss)
               R&B                 $ (73.5)
               Falcon                 67.3
                                   -------
                  Combined         $  (6.2)
                                   =======

   In  connection  with the merger, the Company recorded $66.4  million  of
expenses in the fourth quarter of 1997. Such expenses consist primarily  of
employment contract termination fees associated with executives of R&B, the
acceleration  of  unearned compensation of certain stock grants  previously
awarded  to  certain R&B employees, fees for investment bankers, attorneys,
and  accountants,  and  printing and other related  costs.   In  1998,  the
Company  reversed  $8.0  million of merger expenses  primarily  due  to  an
Internal  Revenue  Service ruling received relating to taxes  on  executive
termination fees.

   On  December  1, 1998, R&B Falcon acquired all of the outstanding  stock
of  Cliffs  Drilling. Cliffs Drilling is a provider of daywork and  turnkey
drilling  services, mobile offshore production units and  well  engineering
and  management services. Cliffs Drilling's fleet consisted of  16  jack-up
rigs,  three self-contained platform rigs, four mobile offshore  production
units  and  11  land  rigs.  The acquisition was effected  pursuant  to  an
Agreement and Plan of Merger dated August 21, 1998, whereby each  share  of
Cliffs  Drilling's common stock was converted into 1.7 shares of R&B Falcon
common stock and cash in lieu of fractional shares. Total consideration for
Cliffs  Drilling  was  approximately $405.1  million.  The  Company  issued
approximately   27.1  million  shares  of  its  common  stock   valued   at
approximately  $385.3 million. This valuation was based  upon  a  price  of
$14.2125  per  share  of  R&B Falcon common stock, which  was  the  average
closing  price per share of R&B Falcon's common stock during the period  in
which the principal terms of the merger were agreed upon and the merger was
announced.  In addition, the Company assumed Cliffs Drilling's  outstanding
stock  options  valued at approximately $6.2 million and the  Company  paid
approximately $13.6 million in acquisition costs. The acquisition of Cliffs
Drilling  was recorded using the purchase method of accounting, accordingly
Cliffs  Drilling's  results of operations are included with  the  Company's
results  of  operations  since the acquisition  date.  The  excess  of  the
purchase  price  over  the  estimated fair value  of  net  assets  acquired
amounted  to approximately $86.8 million, which has been accounted  for  as
goodwill  and  is  being  amortized over 40 years using  the  straight-line
method. Goodwill has increased $16.1 million since December 31, 1998.  Such
increase represents revisions to the estimate in the initial purchase price
allocation,  primarily  related to various contingencies,  offset  by  $1.9
million of 1999 amortization.

   Pro  forma  consolidated  operating results of the  Company  and  Cliffs
Drilling  for  the  years ended December 31, 1998 and  1997,  assuming  the
Cliffs  Drilling  transaction occurred at the beginning of  the  respective
periods, are as follows:
                                              Years Ended December 31,
                                              ------------------------
                                                 1998           1997
                                              ---------      ---------
                                                     (unaudited)
                                                 (in millions except
                                                  per share amounts)

     Operating revenues                       $ 1,349.0      $ 1,218.2
     Income from continuing operations
       before extraordinary loss                  138.5           71.0
     Net income                                   150.3           35.0
     Net income per common share:
      Basic                                         .78            .18
      Diluted                                       .78            .18

(C)  UNCONSOLIDATED INVESTEES

   Unconsolidated  investees are accounted for using  the  equity  method.
Investments  in and advances to unconsolidated investees at  December  31,
1999 and 1998 were as follows:

                                            December 31,
                                           ---------------
   Unconsolidated Investee                  1999     1998
                                           ------   ------
                                             (in millions)

   Navis ASA                               $ 62.6   $ 20.0
   Deepwater Drilling L.L.C.                  8.3       .1
   Deepwater Drilling II L.L.C.               3.6       -
   Other                                      8.2      8.1
                                           ------   ------
                                           $ 82.7   $ 28.2
                                           ======   ======

   Income  (loss) from equity investees plus related income for the  years
ended  December  31, 1999, 1998 and 1997 consisted of  the  following  (in
millions):

   Unconsolidated Investee          1999    1998    1997
                                   ------  ------  ------
   Deepwater Drilling L.L.C.       $  4.6  $  (.2) $   -
   Deepwater Drilling II L.L.C.      (.2)      -       -
   Navis ASA                           .5      -       -
   Other                             (1.4)     -       -
                                   ------  ------  ------
                                   $  3.5  $  (.2) $   -
                                   ======  ======  ======

   Deepwater  Drilling L.L.C. ("DDI") is owned 50% by the Company  and  50%
by Conoco. DDI leases and operates the Deepwater Pathfinder which commenced
operations in the first quarter of 1999. See Note L.

   Deepwater  Drilling II L.L.C. ("DDII") is owned 60% by the  Company  and
40%  by  Conoco.  DDII  leases and operates the  Deepwater  Frontier  which
commenced operations in the second quarter of 1999. See Note L.

   Navis  ASA ("Navis") is owned 38.6% by the Company.  In September  1998,
the  Company and Navis, a Norwegian public company which is constructing  a
dynamically  positioned drillship (the Navis Explorer I), entered  into  an
agreement  pursuant  to  which  the  Company  agreed  to  make  a   capital
contribution to Navis of $50.0 million in exchange for stock in Navis.  The
Navis  Explorer I is designed to drill in 10,000 feet of water and is being
constructed  at Samsung Heavy Industries Co. Ltd. at an estimated  cost  of
$310.0 million, with a scheduled delivery in the second quarter of 2000. As
of December 31, 1999, the Company had contributed $45.2 million in cash and
$17.7  million  of  equipment and equipment purchase orders.  Most  of  the
equipment and equipment purchase orders that were or will be contributed by
the  Company were acquired by the Company in connection with the  Peregrine
VI and Peregrine VIII projects and are no longer required for such projects
in  light  of  their cancellation (see Note H). Navis and the Company  have
entered  into  an  agreement pursuant to which the Company  will  supervise
construction of the drillship and manage it following its delivery.

(D)  SHORT-TERM OBLIGATIONS

   In  1998,  the  Company entered into a $125.0 million short-term  credit
facility  for  the construction of the Deepwater Millennium.  The  facility
bore interest at the London Interbank Offered Rate ("LIBOR") plus 1.25% and
was  due  on June 30, 1999. In March 1999, this credit facility  which  had
been  fully drawn was terminated and repaid from proceeds from the issuance
of senior notes (see Note E).

(E)  LONG-TERM OBLIGATIONS

   Long-term  obligations at December 31, 1999 and 1998  consisted  of  the
following (in millions):

                                                          1999      1998
                                                        --------  --------
9.75% Senior Notes, due January 2001
  ("9.75% Notes") (1)(10)                               $    5.2  $    5.2
6.5% Senior Notes, due April 2003 (2)                      249.4     249.2
8.875% Senior Notes, due March 2003
  ("8.875% Notes") (3)(10)                                    .4        .4
9.125% Senior Notes, due December 2003 (4)                 100.0     100.0
10.25% Senior Notes, due May 2003 ("10.25% Notes") (5)     201.9     202.9
6.75% Senior Notes, due April 2005 (2)                     348.4     348.1
11% Senior Secured Notes, due March 2006 (6)               400.0        -
12.25% Senior Notes, due March 2006 (6)                    200.0        -
6.95% Senior Notes, due April 2008 (2)                     249.3     249.2
9.5% Senior Notes, due December 2008 (4)                   300.0     300.0
11.375% Senior Secured Notes, due March 2009 (6)           400.0        -
7.375% Senior Notes, due April 2018 (2)                    248.1     248.0
Project financing (7)                                      250.0        -
Revolving credit facilities (8)                               -      150.0
NIC (9)                                                       -       18.7
Other debt obligations                                        .8        .8
Total                                                    2,953.5   1,872.5
Less long-term obligations due within one year             (20.1)     (6.3)
                                                        --------  --------
Long-term obligations                                   $2,933.4  $1,866.2
                                                        ========  ========
  __________________________

(1)   The  9.75%  Notes were issued by Falcon pursuant to  an  offering  in
      January  1994  and  originally consisted of  a  principal  amount  of
      $110.0   million   (see  Note  (10)  below).  Interest   is   payable
      semiannually  on  January 15 and July 15.  Certain of  the  Company's
      subsidiaries  guarantee  the  9.75%  Notes.   The  9.75%  Notes   are
      unsecured  obligations  of Falcon, ranking pari  passu  in  right  of
      payment  with  all  other  senior indebtedness  of  Falcon,  but  are
      effectively  subordinated to any secured indebtedness  of  Falcon  to
      the extent of the collateral securing such secured indebtedness.

(2)   In  April  1998, the Company issued four series of senior notes  with
      an  aggregate  principal amount of $1.1 billion.  As  a  result,  the
      Company  received  net  proceeds  of approximately  $1,082.9  million
      after  deducting  estimated offering related  expenses.  Interest  on
      these  notes  is  payable semiannually on April 15  and  October  15.
      These  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
      was  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. These notes  were
      issued  at  a discount of approximately $6.0 million which  is  being
      amortized as interest expense over the term of the notes. The  amount
      of  unamortized discount at December 31, 1999 was approximately  $4.8
      million  and  the amount of  amortized discount for the  years  ended
      December  31,  1999 and 1998 was approximately $.7  million  and  $.5
      million, respectively.

(3)   The  8.875%  Notes were issued by Falcon pursuant to an  offering  in
      March  1996 and originally consisted of a principal amount of  $120.0
      million  (see  Note (10) below). Interest is payable semiannually  on
      March   15   and  September  15.   The  8.875%  Notes  are  unsecured
      obligations  of Falcon, ranking pari passu in right of  payment  with
      all  other senior indebtedness of Falcon.  The 8.875% Notes  are  not
      guaranteed   by   any  of  Falcon's  subsidiaries,   and   thus   are
      structurally  subordinated to the 9.75% Notes (described  above)  and
      other   indebtedness  of  the  subsidiaries.    Further,   they   are
      effectively  subordinated to any secured indebtedness  of  Falcon  to
      the extent of the collateral securing such secured indebtedness.

(4)   In  December 1998, the Company issued two series of senior notes with
      an  aggregate  principal amount of $400.0 million. As a  result,  the
      Company  received net proceeds of approximately $392.3 million  after
      deducting  estimated offering related expenses.   Interest  on  these
      notes  is  payable  semiannually on June 15 and  December  15.  These
      notes  are  unsecured obligations of the Company, ranking pari  passu
      in  right  of  payment  with  all other existing  and  future  senior
      indebtedness of the Company. The Company used the proceeds to  reduce
      borrowings under an existing revolving credit facility. As  a  result
      of  such  reduction,  the Company incurred an extraordinary  loss  of
      $2.2 million, net of tax, in the fourth quarter of 1998.

 (5)  The  10.25%  Notes  were  issued  by  Cliffs  Drilling  pursuant   to
      offerings  in  1996 and 1997.  The 10.25% Notes originally  consisted
      of  a  principal  amount of $200.0 million and  interest  is  payable
      semiannually  on  May  15  and November 15. These  notes  are  senior
      unsecured  obligations  of Cliffs Drilling,  ranking  pari  passu  in
      right  of  payment with all other senior indebtedness and  senior  to
      all  subordinated  indebtedness.   These  notes  are  unconditionally
      guaranteed  on  a  senior unsecured basis by certain subsidiaries  of
      Cliffs Drilling (the "Cliffs Drilling Subsidiary Guarantors"),  which
      guarantees  rank  pari  passu in right of  payment  with  all  senior
      indebtedness of the Cliffs Drilling Subsidiary Guarantors and  senior
      to  all  subordinated indebtedness of the Cliffs Drilling  Subsidiary
      Guarantors.  The  10.25%  Notes  are  publicly  traded  and  are  not
      guaranteed  by  R&B Falcon or any other subsidiary  of  the  Company,
      accordingly,   separate  financial  statements  of  Cliffs   Drilling
      Subsidiary  Guarantors  are not required  to  be  included  in  these
      financial statements.

      On  or  after  May  15,  2000, the 10.25% Notes are redeemable at the
      option of Cliffs Drilling, in whole or in part, at a price of 105% of
      principal  if  redeemed during the twelve months  beginning  May  15,
      2000,  at  a  price  of  102.5% of principal if redeemed  during  the
      twelve  months  beginning May 15, 2001, or at  a  price  of  100%  of
      principal if redeemed after May 15, 2002, in each case together  with
      interest accrued to the redemption date.

      The  indenture  under  which  the  10.25%  Notes  are  issued imposes
      significant operating and financial restrictions on  Cliffs Drilling.
      Such restrictions  affect,  and  in many respects limit or  prohibit,
      among  other  things,  the  ability  of  Cliffs  Drilling  to   incur
      additional indebtedness,  make  capital  expenditures,  create  liens
      and sell assets.

      As a result of the Company acquiring Cliffs Drilling, Cliffs Drilling
      was  required  to  offer  to purchase for cash all of the outstanding
      10.25% Notes  at  a  purchase  price  equal  to 101% of the principal
      amount  of each senior note, plus accrued and unpaid interest, to the
      change of control payment date.  On January 28, 1999, Cliffs Drilling
      repurchased approximately $.3 million principal amount of the  10.25%
      Notes that were tendered pursuant to this offer.


(6)   In  March  1999, the Company issued $200.0 million of  12.25%  Senior
      Notes  due 2006 (the "12.25% Notes"). Also in March 1999, RBF Finance
      Co.,  a  limited purpose finance company and a consolidated affiliate
      of  the  Company, issued $400.0 million of 11% Senior  Secured  Notes
      due  2006 and $400.0 million of 11.375% Senior Secured Notes due 2009
      (collectively  the  "Secured  Notes").  The  Company   borrowed   the
      proceeds from the Secured Notes from RBF Finance Co. pursuant to  ten
      separate  loan  agreements, each of which is secured by  one  of  the
      Company's  drilling rigs. The Company also guaranteed the payment  of
      the  Secured  Notes  issued by RBF Finance Co.  Interest  is  payable
      semiannually  on March 15 and September 15 on both the  12.25%  Notes
      and Secured Notes. As a result, the Company received net proceeds  of
      approximately  $970.6 million after deducting offering expenses.  The
      Company  used the proceeds to repay existing indebtedness  of  $350.0
      million  of  long-term  obligations,  $125.0  million  of  short-term
      obligations  (see Note D) and the Company's portion  ($81.0  million)
      of  an  interim  facility  for  the  construction  of  the  Deepwater
      Frontier.  Remaining  proceeds  will  be  used  for  planned  capital
      expenditures,  working capital and other general corporate  purposes.
      As  a  result of the repayment of existing indebtedness, the  Company
      incurred  an extraordinary loss of $1.7 million, net of tax,  in  the
      first   quarter  of  1999  which  consisted  of  the   write-off   of
      unamortized  debt  issuance costs.  The indentures  under  which  the
      12.25%  Notes  and  the  Secured  Notes  are  issued  impose  certain
      restrictions on the Company. Such restrictions include  but  are  not
      limited   to,  the  ability  of  the  Company  to  incur   additional
      indebtedness,  pay  dividends, repurchase  stock,  make  payments  on
      subordinated   indebtedness,   sell  assets,   create   liens,   make
      investments and merge or consolidate with other companies.

(7)   In  August  1999,  a  subsidiary of the Company  completed  a  $250.0
      million   project  financing  for  the  construction  the   Deepwater
      Nautilus   in   which  such  subsidiary  received  net  proceeds   of
      approximately $245.2 million.  The financing consists  of  two  five-
      year  notes. The first note is for $200.0 million and bears  interest
      at   7.31%,  with  monthly  interest  payments,  which  commenced  in
      September  1999,  and monthly principal payments commencing  in  June
      2000.   The  second note is for $50.0 million and bears  interest  at
      9.41%,  with monthly interest payments, which commenced in  September
      1999,  and  a  balloon principal payment which is due at maturity  of
      the  loan in May 2005. Both notes are collateralized by the Deepwater
      Nautilus  and  drilling  contract revenues  from  such  rig  and  are
      without recourse to the Company.

(8)   At   December  31,  1998,  the  Company  had  two  revolving   credit
      facilities   outstanding  which  were  subsequently  terminated   and
      repaid.

      The first was a $350.0 million revolving credit facility expiring  on
      January 24, 2002.  At December 31, 1998, interest was accruing  under
      this  revolving credit facility at LIBOR plus .75% for borrowings  up
      to  $100.0 million and at LIBOR plus 1.375% for borrowings in  excess
      of  $100.0 million.  In addition, a commitment fee of .35% per  annum
      was  paid  on  the  total amount of the facility.  The  first  $100.0
      million  of  borrowing  under  this  revolving  credit  facility  was
      secured by a pledge of the stock of one of the Company's three  major
      operating  subsidiaries.   The  facility  contained  covenants  which
      required  the  Company to meet certain ratios and  in  many  respects
      limit or prohibit, among other things, the ability of the Company  to
      incur  additional  indebtedness, create liens and  sell  assets.   At
      December  31, 1998, $200.0 million was available under this facility.
      In  March  1999, this credit facility which had been fully drawn  was
      terminated  and  repaid  from proceeds  from  the  12.25%  Notes  and
      Secured Notes (see Note (6) above).

      The second was a $35.0 million revolving credit facility expiring  on
      May  31, 2000. Interest accrued under this facility at .25% plus  the
      greater  of  the  prevailing  Federal  Funds  Rate  plus  .5%  or   a
      referenced average prime; or at the adjusted LIBOR rate plus  2%.  In
      addition,  a fee of 2% per annum was paid on outstanding  letters  of
      credit  and a commitment fee of .5% per annum was paid on the  unused
      portion  of  the  facility. This facility  was  secured  by  accounts
      receivable, certain rig inventory and equipment, certain oil and  gas
      properties and the stock of certain subsidiaries of Cliffs  Drilling.
      At  December  31,  1998,  $.4  million  in  letters  of  credit  were
      outstanding,  thereby  leaving  $34.6 million  available  under  this
      facility.   At  December 31, 1999, there were no amounts  outstanding
      and on January 3, 2000 such facility was terminated by the Company.

(9)   In  April 1997, a wholly-owned subsidiary of the Company entered into
      a  five-year  $38.0 million loan agreement with NIC.   The  loan  was
      collateralized by a vessel mortgage on the Seillean without  recourse
      to  the  Company  and  bore  interest at LIBOR  plus  2%.   Principal
      repayments were monthly based on the greater of the excess cash  flow
      of  the Seillean or the outstanding principal balance divided by  the
      remaining  monthly  periods of the loan.  In addition,  NIC  had  the
      option  to  purchase up to 10% of the ownership in the Seillean,  any
      time  prior  to  April 25, 2000, at a minimum price of $4.2  million.
      In  the third quarter of 1999, NIC exercised its option and purchased
      10%  of  the Seillean for $7.7 million.  The $7.7 million was applied
      to  the outstanding balance of the loan and in the fourth quarter  of
      1999 the remaining balance was paid in full.

(10)  The  indentures  pursuant to which the 8.875% Notes and  9.75%  Notes
      ("Falcon Notes") were issued (i) provide that Falcon may redeem  such
      obligations  at  a premium at certain times prior to  maturity,  (ii)
      require  Falcon to offer to redeem such obligations at a  premium  if
      there  is a change of control of Falcon (see below), and (iii) impose
      restrictions  on  certain  actions by Falcon,  including  payment  of
      dividends,  incurrence of debt, pledging of assets, sale  of  assets,
      and making investments.

      As  a  result  of  the  merger between R&B  and  Falcon,  Falcon  was
      required  to offer to purchase for cash all of the Falcon Notes.   On
      January  28,  1998, Falcon made a purchase offer to each note  holder
      at   a  price  equal  to  101%  of  the  aggregate  principal  amount
      outstanding  plus accrued interest.  As a result, none of  the  notes
      were tendered for redemption.

      On  March  23, 1998, the Company offered to redeem the Falcon  Notes.
      The  aggregate principal amount of the outstanding Falcon  Notes  was
      $230.0  million  and on April 20, 1998, $224.4 million  in  principal
      amount  of  Falcon Notes was repaid from proceeds from  the  sale  of
      senior notes (see Note (2) above).

   As  of  December 31, 1999, the Company estimates the fair value  of  its
debt  obligations  to  be $2,891.9 million compared  to  a  book  value  of
$2,953.5 million.

   Aggregate  annual  maturities of long-term obligations,  (including  the
current portion) for the next five years and thereafter are as follows  (in
millions):

               2000                                  $    20.1
               2001                                       41.5
               2002                                       38.6
               2003                                      591.6
               2004                                       44.6
               Thereafter                              2,219.7
                                                     ---------
                                                       2,956.1
               Less the unamortized discount
                 and premium on senior notes              (2.6)
                                                     ---------
               Total long-term obligations and long-
                 term obligations due within one year
                 at December 31, 1999                $ 2,953.5
                                                     =========

(F)  COMMITMENTS AND CONTINGENCIES

   GENERAL  -  In  April 1998, Cliffs Drilling was awarded a contract  from
PDVSA  Exploration and Production ("PDVSA") to drill 60  turnkey  wells  in
Venezuela. The drilling program commenced in March 1998 and the program was
expected  to  extend over approximately three and one-half  years  and  was
expected to utilize seven of the Company's land drilling rigs in Venezuela.
However,  during the first quarter of 1999, in response to the downturn  in
the market, PDVSA and the Company renegotiated prices for the next 14 wells
to  be  drilled  under  this  program.  In  the  fourth  quarter  of  1999,
negotiations  were completed for the following seven wells  to  be  drilled
under this program at further reduced margins. As of December 31, 1999, the
Company  had  completed 29 wells with six wells remaining to be  completed.
Such  remaining wells are expected to be completed by the end of the  first
quarter in 2000.  In regards to the remaining 25 of the original 60  wells,
a  contractual commitment no longer exists and no assurance  can  be  given
that such wells will ultimately be drilled.

   The  Deepwater  Expedition, Falcon 100 and Deepwater Navigator  were  or
will  be  completed later than the required commencement  dates  under  the
drilling  contracts for such rigs and at costs significantly in  excess  of
original  estimates.  The  customers  for  the  Falcon  100  and  Deepwater
Navigator have cancelled the drilling contracts for such rigs based on  the
rigs  not  being delivered on time. The Company is currently marketing  the
Falcon  100  for work and the Company has received a letter of intent  from
Petrobras for the use of the Deepwater Navigator for a three-year  drilling
contract offshore Brazil. The customer for the Deepwater Expedition did not
cancel  its  drilling contract and as of the date of this  filing  no  late
penalties had been claimed. However, if late penalties are legally  imposed
on the Deepwater Expedition, such amounts will be capitalized and amortized
over  the term of the initial drilling contract, subject to a determination
of realizability.

   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.

   CAPITAL   EXPENDITURES  -  In  2000,  the  Company  expects   to   spend
approximately $540.0 million to expand and upgrade its operating rig fleet,
primarily its deepwater rig fleet.

   In  September  1998,  the Company and Navis ASA ("Navis"),  a  Norwegian
public  company  which  is constructing a dynamically positioned  drillship
(the  Navis  Explorer I), entered into an agreement pursuant to  which  the
Company agreed to make a capital contribution to Navis of $50.0 million  in
exchange  for stock in Navis. The Navis Explorer I is designed to drill  in
10,000  feet of water and is being constructed at Samsung Heavy  Industries
Co.  Ltd. at an estimated cost of $310.0 million, with a scheduled delivery
in  the  second quarter of 2000. As of December 31, 1999, the  Company  had
contributed  $45.2  million  in cash and $17.7  million  of  equipment  and
equipment purchase orders. As a result of such contributions, the Company's
ownership  in Navis approximated 38.6%. Most of the equipment and equipment
purchase  orders  that  were or will be contributed  by  the  Company  were
acquired  by the Company in connection with the Peregrine VI and  Peregrine
VIII  projects  and are no longer required for such projects  in  light  of
their  cancellation. Navis and the Company have entered into  an  agreement
pursuant  to which the Company will supervise construction of the drillship
and manage it following its delivery.

   EMPLOYMENT   CONTRACTS  -  The  Company  has  entered  into   employment
contracts  with seven employees. Such employment contracts include  certain
provisions  which  call for termination payments to the employee  upon  the
occurrence of certain events including change of control, which if incurred
at December 31, 1999 would have been approximately $13.2 million.

   OPERATING  LEASES  - The Company has operating leases covering  premises
and  equipment.  Certain operating leases contain renewal options and  have
options to purchase the asset at fair market value at the end of the  lease
term.  Lease expense amounted to $45.3 million (1999), $44.5 million (1998)
and  $42.0 million (1997).  As of December 31, 1999, future minimum  rental
payments relating to operating leases were as follows (in millions):

                   2000    2001    2002    2003    2004   Thereafter
                  ------  ------  ------  ------  ------  ----------
  Drilling units  $ 16.4  $ 13.8  $ 13.0  $ 13.0  $ 13.0    $ 24.9
  Other              2.9     1.8     1.5      .8      .6        .3
                  ------  ------  ------  ------  ------    ------
  Total           $ 19.3  $ 15.6  $ 14.5  $ 13.8  $ 13.6    $ 25.2
                  ======  ======  ======  ======  ======    ======

   In  November 1995, the Company entered into a sale/lease-back of the  M.
G.  Hulme,  Jr. and agreed to lease the drilling unit for ten  years.   The
lease-back  is accounted for as an operating lease and a deferred  gain  of
$7.4 million was recorded and is being amortized over the life of the lease
(see Note G).

   LITIGATION - In November 1988, a lawsuit was filed in the U.S.  District
Court  for the Southern District of West Virginia against Reading  &  Bates
Coal Co., a wholly owned subsidiary of the Company, by SCW Associates, Inc.
claiming breach of an alleged agreement to purchase the stock of Belva Coal
Company,  a wholly owned subsidiary of Reading & Bates Coal Co.  with  coal
properties in West Virginia.  When those coal properties were sold in  July
1989  as  part  of  the disposition of the Company's coal  operations,  the
purchasing  joint  venture indemnified Reading & Bates  Coal  Co.  and  the
Company against any liability Reading & Bates Coal Co. might incur  as  the
result  of this litigation. A judgment for the plaintiff of $32,000 entered
in February 1991 was satisfied and Reading & Bates Coal Co. was indemnified
by  the  purchasing  joint venture.  On October 31, 1990,  SCW  Associates,
Inc.,  the  plaintiff  in  the above-referenced action,  filed  a  separate
ancillary  action  in  the  Circuit Court, Kanawha  County,  West  Virginia
against the Company, Caymen Coal, Inc. (former owner of the Company's  West
Virginia  coal  properties), as well as the joint venture, Mr.  William  B.
Sturgill  personally (former President of Reading & Bates Coal Co.),  three
other  companies in which the Company believes Mr. Sturgill holds an equity
interest,  two  employees  of the joint venture,  First  National  Bank  of
Chicago  and  First  Capital Corporation.  The  lawsuit  seeks  to  recover
compensatory damages of $50.0 million and punitive damages of $50.0 million
for  alleged  tortious  interference with the  contractual  rights  of  the
plaintiff  and to impose a constructive trust on the proceeds  of  the  use
and/or  sale  of  the  assets  of Caymen Coal,  Inc.  as  they  existed  on
October  15, 1988.  The Company intends to defend its interests  vigorously
and believes the damages alleged by the plaintiff in this action are highly
exaggerated.  In any event, the Company believes that it has valid defenses
and that it will prevail in this litigation.

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

    In  May 1999, Petrobras cancelled the drilling contract for the  Falcon
100  based  on  its  interpretation of the cancellation provisions  of  the
contract.  The  Company does not believe that Petrobras has  the  right  to
cancel  such contract. The Company has engaged Brazilian counsel to  pursue
the Company's rights under the contract. The Company is currently marketing
this rig for work.

    In January 1999, an action was filed by Mobil Exploration and Producing
U.S.  Inc.  and  affiliates,  St.  Mary  Land  &  Exploration  Company  and
affiliates  and Samuel Geary and Associates, Inc. against Cliffs  Drilling,
its  underwriters and insurance broker in the 16th Judicial District  Court
of St. Mary Parish, Louisiana.  The plaintiffs alleged damages amounting to
in  excess  of $50.0 million in connection with the drilling of  a  turnkey
well  in  1995 and 1996.  The case was tried before a jury in  January  and
February  2000,  and  the  jury returned a verdict of  approximately  $30.0
million  in  favor  of the plaintiffs for excess drilling  costs,  loss  of
insurance  proceeds, loss of hydrocarbons and interest. However, the  trial
court  has not entered a judgment on the verdict, as there are a number  of
matters to be ruled upon before doing so.  If a judgment is entered on such
verdict, Cliffs Drilling intends to appeal and believes its efforts  to  do
so  will  be successful.  The Company believes all but the portion  of  the
verdict representing excess drilling costs of approximately $4.7 million is
covered  by  relevant  primary and excess liability insurance  policies  of
Cliffs  Drilling; however, one insurer has denied coverage and  the  others
have  reserved their rights.  If necessary, Cliffs Drilling and the Company
intend to take appropriate legal action to enforce Cliffs Drilling's rights
with  respect  to  such  policies.  At this time Cliffs  Drilling  and  the
Company  believe  adequate reserves have been established  to  protect  the
interests of Cliffs Drilling and the Company in this matter.

   The  Company is involved in various other legal actions arising  in  the
normal  course of business.  A substantial number of these actions  involve
claims arising out of injuries to employees of the Company who work on  the
Company's  rigs  and  power vessels.  After taking into  consideration  the
evaluation  of  such actions by counsel for the Company and  the  Company's
insurance  coverage, management is of the opinion that the outcome  of  all
known  and potential claims and litigation will not have a material adverse
effect  on  the  Company's consolidated financial position  or  results  of
operations.

   SELF  INSURANCE - The Company is self-insured for the deductible portion
of its insurance coverage.  In the opinion of management, adequate accruals
have  been made based on known and estimated exposures up to the deductible
portion  of  the Company's insurance coverages.  Management  believes  that
claims  and  liabilities  in excess of the amounts accrued  are  adequately
insured.

   LETTERS  OF  CREDIT - At December 31, 1999, the Company had  letters  of
credit  outstanding  and  unused totaling $5.4 million  and  $4.6  million,
respectively.

(G) ACCRUED LIABILITIES AND OTHER NONCURRENT LIABILITIES

   The  components of "Accrued liabilities" at December 31, 1999  and  1998
were as follows (in millions):

                                           1999     1998
                                         -------  -------
     Expenses - general                  $ 112.0  $  86.1
     Taxes                                  33.0     23.7
     Interest expense                       54.3     20.3
     Worker compensation claims             13.5     14.8
     Payroll                                10.1      9.5
     Employee benefits                       5.0      4.2
                                         -------  -------
     Total                               $ 227.9  $ 158.6
                                         =======  =======

   The  components of "OTHER NONCURRENT LIABILITIES" at December  31,  1999
and 1998 were as follows (in millions):

                                           1999     1998
                                          ------   ------
     Postretirement benefit obligations   $ 14.4   $ 14.9
     Foreign income taxes                    6.1      6.1
     Pension obligations                     4.2      3.5
     Deferred gain on sale of
        drilling unit (see Note F)           2.1      2.0
     Other                                  12.9     12.7
                                          ------   ------
     Total                                $ 39.7   $ 39.2
                                          ======   ======

(H)  CANCELLATION OF CONVERSION PROJECTS

   In  the  third  quarter of 1998, the Company cancelled the Peregrine  VI
and  the  Peregrine  VIII drillship conversion projects due  to  continuing
uncertainty as to final cost and expected delivery dates. As a result,  the
drilling  contract on the Peregrine VIII was terminated  on  September  24,
1998,  and  the  drilling contract on the Peregrine VI  was  terminated  on
January 1, 1999. Both terminations were without prejudice to the rights  of
the  oil companies. The Company believes that, based on provisions  of  the
contracts  that preclude recovery of indirect or consequential damages  and
projected  rig availability in the offshore drilling industry, the  Company
will  not have any material liability under these drilling contracts  as  a
result  of  the  termination thereof. The contracts with the  shipyard  for
conversion  of the Peregrine VI and the Peregrine VIII were also cancelled.
In  addition,  in  the  fourth quarter of 1998, the Company  cancelled  two
additional  drillship conversion projects (Peregrine IX  and  Peregrine  X)
that  were  in  the preliminary phases.  As a result of the termination  of
these  four  drillship  conversion projects, the Company  expensed   $118.3
million in related costs in 1998.

   In  connection  with  the  drillship conversion  projects,  the  Company
purchased  or  committed to purchase drilling equipment with  an  aggregate
cost  of approximately $285.0 million. The Company expected to use some  of
the surplus equipment on other construction and/or upgrade projects and  to
maintain  the balance as inventory. A majority of the equipment  originally
ordered  was directed to other construction projects. However, the  Company
determined  that  a portion of such surplus equipment was  not  usable  for
other projects or as spare parts and as a result the Company expensed $25.6
million  in the third quarter of 1999 to write-down such inventory  to  net
realizable  value.  As of December 31, 1999, the Company had  approximately
$59.0 million remaining of such surplus drilling equipment. The Company  is
continually reviewing the value and utility of such equipment and if in the
future  it is determined the Company cannot realize the recorded  value  of
the  surplus  equipment, the Company could incur additional  write-offs  or
write-downs of such equipment.

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

   In  the  fourth  quarter of 1999, the Company expensed $3.0  million  in
connection  with the final settlement with the shipyard and the  write-down
of the Peregrine VI and Peregrine VIII hulls to estimated scrap value.

(I)  INCOME TAXES

   Income  tax  expense  (benefit) for the years ended December  31,  1999,
1998 and 1997 consisted of the following (in millions):

                           1999     1998     1997
                          ------   ------   ------
       Current:
         Foreign          $ 48.8   $ 28.1   $  9.4
         Federal             (.8)     3.3     26.9
         State                .3      7.1      3.0
                          ------   ------   ------
       Total current        48.3     38.5     39.3
                          ------   ------   ------
       Deferred:
         Foreign             (.8)     4.9     17.9
         Federal           (82.9)    13.7     26.6
         State               3.8      1.8       .9
                          ------   ------   ------
       Total deferred      (79.9)    20.4     45.4
                          ------   ------   ------
       Total              $(31.6)  $ 58.9   $ 84.7
                          ======   ======   ======

   The  domestic  and foreign components of income (loss)  from  continuing
operations  before  income taxes, minority interest and extraordinary  loss
for  the  years ended December 31, 1999, 1998 and 1997 were as follows  (in
millions):

                          1999      1998      1997
                        -------   -------   -------
       Domestic         $(294.9)  $ (26.2)  $ (95.0)
       Foreign            207.8     187.4     218.9
                        -------   -------   -------
       Total            $ (87.1)  $ 161.2   $ 123.9
                        =======   =======   =======

   The  effective  tax rate, as computed on income (loss)  from  continuing
operations  before  income taxes, minority interest and extraordinary  loss
differs  from  the  statutory U.S. income tax  rate  for  the  years  ended
December 31, 1999, 1998 and 1997 due to the following:

                                                   1999    1998    1997
                                                  ------  ------  ------
     Statutory tax rate                            (35)%     35%     35%
     Use of previously reserved tax benefits        (6)       -       -
     Limitation on recognition of tax benefits       -        2      10
     Foreign tax expense (net of federal benefit)   (1)      (3)      2
     State tax expense (net of federal benefit)      5        3       2
     Non-deductible merger expenses                  -       (2)     17
     Other                                           1        2       2
                                                  ------  ------  ------
     Effective tax rate                            (36)%     37%     68%
                                                  ======  ======  ======

   Deferred  income  taxes  result  from those  transactions  which  affect
financial  and  taxable  income in different years.  The  nature  of  these
transactions  (all of which were long-term) and the income  tax  effect  of
each as of December 31, 1999 and 1998 were as follows (in millions):

                                           1999       1998
                                         -------    -------
     Deferred tax liabilities:
         Depreciation                    $ 363.0    $ 214.4
         Undistributed earnings             13.6        7.4
                                         -------    -------
     Total deferred tax liabilities        376.6      221.8
                                         -------    -------
     Deferred tax assets:
         Postretirement benefits            (5.3)      (5.4)
         Tax benefit carryforwards        (352.0)    (139.4)
         Discontinued operations, net       (2.2)      (2.2)
         Accrued expenses                   (4.6)      (5.7)
         Valuation allowance                52.0       75.7
         Other                             (11.3)      (2.4)
                                         -------    -------
     Total deferred tax assets            (323.4)     (79.4)
                                         -------    -------
     Net deferred tax liability          $  53.2    $ 142.4
                                         =======    =======

    Valuation  allowance reflects the possible expiration of  tax  benefits
(primarily  foreign  tax credit carryforwards) prior to their  utilization.
In   1999,   valuation  allowance  related  to  tax  net   operating   loss
carryforwards  were  reversed as the Company foresees the  ability  to  use
these  loss carryforwards coupled with the recent change in tax law whereby
the  carryforward period was increased from 15 years to  20  years.   Also,
valuation allowances related to certain capital losses incurred in the past
were  reversed as the Company has generated capital gains in excess of such
capital losses.

    Recapitalizations of R&B in 1989 and 1991 resulted in ownership changes
for  federal income tax purposes.  As a result of these ownership  changes,
the  amount  of tax benefit carryforwards generated prior to the  ownership
changes  which may be utilized to offset federal taxable income is  limited
by  the  Internal Revenue Code to approximately $1.4 million annually  plus
certain built-in gains that existed as of the date of such changes.  United
States  net  tax  operating loss carryforwards (NOL)  not  subject  to  the
ownership change limitation consist of the following (in millions):

                              Year       U.S.
                   NOL        NOL        NOL
                   Year     Expires  Not Limited
                   ----     -------  -----------
                 Pre-1991     2005    $   6.8
                   1991       2006        2.1
                   1992       2007        3.7
                   1993       2008       12.5
                   1994       2009       14.0
                   1995       2010         -
                   1996       2011       11.6
                   1997       2017       75.1
                   1998       2018       37.6
                   1999       2019      388.3
                                      -------
                  Totals              $ 551.7
                                      =======

(J)  CAPITAL SHARES

   RIGHTS  - On December 31, 1997, the effective date of the merger between
R&B  and  Falcon  (see  Note B), each share of the Company's  common  stock
received  one  preferred  share purchase right  (a  "Right").   Each  Right
entitles  the  registered  holder to purchase from  the  Company  one  one-
hundredth of a share of Series A Junior Participating Preferred Stock, (the
"Preferred  Shares")  of  the  Company at  a  price  of  $150,  subject  to
adjustment.  The Rights will not become exercisable until 10 days  after  a
public announcement that a person or group has acquired 15% or more of  the
Company's  common  stock (thereby becoming an "Acquiring  Person")  or  the
commencement of a tender or exchange offer upon consummation of which  such
person  or  group would own 15% or more of the Company's common stock  (the
earlier  of  such  dates being called the "Distribution Date").  Until  the
Distribution  Date,  the  Rights  will be  evidenced  by  the  certificates
representing the Company's common stock and will be transferable only  with
the  Company's common stock. In the event that any person or group  becomes
an  Acquiring Person, each Right, other than Rights beneficially  owned  by
the  Acquiring  Person  (which will thereafter be  void),  will  thereafter
entitle its holder to purchase shares of the Company's common stock  having
a  market value of two times the exercise price of the Right.  If  after  a
person or group has become an Acquiring Person, the Company is acquired  in
a  merger or other business combination transaction or 50% or more  of  its
assets  or  earning power are sold, each Right will entitle its  holder  to
purchase, at the Right's then current exercise price, that number of shares
of  common  stock  of  the acquiring company which  at  the  time  of  such
transaction will have a market value of two times the exercise price of the
Right.   The  board of directors of the Company may redeem  the  Rights  in
whole,  but not in part, at a price of $.01 per Right at any time prior  to
ten  business days following a public announcement that a person  or  group
becomes  an  Acquiring  Person.  The Rights expire  on  November  1,  2007.
Preferred  Shares  purchasable upon exercise of  the  Rights  will  not  be
redeemable.  Each  Preferred  Share will  be  entitled  to  a  preferential
quarterly  dividend payment equal to the greater of $1  per  share  or  100
times the dividend declared per common share.  Liquidation preference  will
be  equal  to  100  times the par value per share plus an amount  equal  to
accrued and unpaid dividends and distributions to the date of such payment.
Each  Preferred Share will have 100 votes, voting together with the  common
stock, and certain rights to elect two directors during certain periods  of
default in the payment of dividends on the Preferred Shares.

    PREFERRED STOCK - On April 22, 1999, the Company issued 300,000  shares
of  13.875%  Senior Cumulative Redeemable Preferred Stock  (the  "Preferred
Stock") and warrants to purchase 10,500,000 shares of the Company's  common
stock at an exercise price of $9.50 per share (the "Warrants"). The Company
received net proceeds of approximately $288.8 million from the issuance  of
the  Preferred  Stock and Warrants.  Each share of Preferred  Stock  has  a
liquidation  preference of $1,000 per share and one Warrant to purchase  35
shares  of  the Company's common stock. The Warrants became exercisable  on
July  7,  1999.  The Warrants expire and the Preferred Stock is mandatorily
redeemable at its face value on May 1, 2009.

    Dividends are paid quarterly which commenced on August 1, 1999  and  at
the  Company's option may be paid in cash or, on or before May 1, 2004,  in
additional  shares of Preferred Stock. Dividends paid through December  31,
1999  were $22.3 million and were paid by the issuance of additional shares
of  Preferred  Stock.  Dividends accrued at December  31,  1999  were  $7.4
million and are included in the recorded amount of the Preferred Stock. The
Warrants' initial fair value of $159.95 per Warrant, or approximately $48.0
million in total, was recorded as a discount to the Preferred Stock and  an
addition to capital in excess of par. The Warrants' initial fair value  and
Preferred Stock offering expenses of $9.7 million are being amortized on  a
straight line basis over the Warrants' ten year term. Amortization for  the
year  ended December 31, 1999 was $4.0 million.  Preferred Stock  dividends
and  the  amortization of the Warrants' initial value and  Preferred  Stock
offering  expenses  are deducted from net income to arrive  at  net  income
applicable to common stockholders.

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

   COMMON  STOCK  -  During 1998 in a series of transactions,  the  Company
issued 763,680 shares of its common stock in partial consideration for  the
acquisition of 25 tugs, five ocean going barges and six workover rigs.

   On  December  1,  1998,  the Company issued approximately  27.1  million
shares of its common stock for the acquisition of Cliffs Drilling (see Note
B).

   In  1999, the Company issued 206,250 shares of its common stock for  the
acquisition  of  two  tugs and 93,606 shares of its common  stock  for  its
matching contribution to the employee savings plans.

   As  of  December  31,  1999, 17,869,611 shares of  authorized,  unissued
shares of common stock were reserved for issuance under the Company's stock
plans  (net  of  forfeitures), 11,278,756 shares  of  authorized,  unissued
shares  of  common  stock were reserved for issuance for  the  exercise  of
Warrants and 296,000 shares of authorized, unissued shares of common  stock
were  reserved  for issuance for contingent obligations relating  to  asset
purchases.

(K)  EMPLOYEE BENEFIT PLANS

   PENSION   AND   POSTRETIREMENT  BENEFITS  -  The   Company   has   three
noncontributory  pension  plans.  Substantially  all  of  the  R&B   Falcon
employees  paid  from a U.S. payroll are covered by one or  more  of  these
plans.   Effective  January  1,  1998,  substantially  all  of  the  Falcon
employees paid from a U.S. payroll began accruing benefit service  although
they  were not eligible to participate in the plans until January 1,  1999.
Effective April 1, 1999, substantially all of the Cliffs Drilling employees
paid  from  a U.S. payroll became eligible to participate.   Plan  benefits
are  primarily based on years of service and average high 60-month  average
compensation (changed from average high thirty-six months effective January
1, 1999).

   The  R&B Falcon U.S. Pension Plan (the "U.S. Pension Plan") is qualified
under  the  Employee  Retirement Income Security Act (ERISA).   It  is  the
Company's  policy to fund this plan not less than the minimum  required  by
ERISA.  It is the Company's policy to contribute to the R&B Falcon Non-U.S.
Pension  Plan (the "Non-U.S. Pension Plan") an amount equal to  the  normal
cost  plus  amounts  sufficient to amortize the initial unfunded  actuarial
liability  and  subsequent unfunded liability caused by plan or  assumption
changes  over thirty years.  The unfunded liability arising from  actuarial
gains  and losses is funded over fifteen years.  The Non-U.S. Pension  Plan
is  a  nonqualified plan and is not subject to ERISA funding  requirements.
The  U.S.  and  Non-U.S.  Pension Plans invest in cash  equivalents,  fixed
income and equity securities.

   The  R&B  Falcon  Retirement Benefit Replacement Plan (the  "Replacement
Plan") is a self-administered unfunded excess benefit plan.  All members of
the  U.S.  Pension  Plan  and  the  Non-U.S.  Pension  Plan  are  potential
participants in the Replacement Plan.

   Effective  July  1,  1999,  all three of the  Company's  noncontributory
pension  plans  were  suspended.  The suspension was  designed  to  control
costs, but did not terminate the plans.  The Company can elect to terminate
the  plans  or  reactivate  the  plans at any  point  in  the  future.  The
suspension impacts the participants as follows:

-  Vesting service will continue to accrue;
-  Benefit service will not accrue (suspended);
-  No compensation is  accrued during the suspension, thus all compensation
   determinations in  calculating benefits will be based on  periods  prior
   to July 1, 1999;
-  New  participants  will  not  be  allowed to enter the plans during  the
   suspension;
-  All funding of the plans required by ERISA continues;
-  Benefits  that  have  already  accrued  by  active employees or deferred
   vested  participants continue to be payable  upon request (in accordance
   with normal plan provisions - generally as early as age 55);
-  Current retiree benefit payments continue unchanged;
-  Required audits, valuations and other plan administration will continue;

   In  addition to providing pension benefits, R&B Falcon provides  certain
life  and  health  care  insurance  benefits  for  its  retired  employees.
Effective  January 1, 1999, the Company no longer provides a  Retiree  Life
Insurance  plan to its current employees.  Only those former employees  who
retired  prior  to May 1, 1986 were eligible to retain their  retiree  life
insurance.  Retiree  life  insurance  benefits  are  provided  through   an
insurance  company  whose premiums are based on benefits  paid  during  the
year.   Retiree health coverage was also significantly restricted effective
January 1, 1999.  As of this date, only those employees who had 10 or  more
years  of  prior service with R&B, accumulate at least 25 years of  service
(15  years  prior  to  January 1, 1996) as of  their  retirement  date  and
continue  to  work for the Company until at least age 55 will  qualify  for
retiree  health  care coverage.  Health care costs are  paid  as  they  are
incurred.

   The  following  table  includes the aggregate  of  the  Company's  three
pension  plans  and the Company's postretirement benefits plan.   Only  the
Replacement  Plan  has a projected benefit obligation  in  excess  of  plan
assets.  Only the Replacement Plan has an accumulated benefit obligation in
excess  of  plan assets, and such accumulated benefit obligation  was  $5.2
million  and  $3.8 million as of December 31, 1999 and 1998,  respectively.
There are no assets held in the Replacement Plan.

                                     Pension           Postretirement
                                 ---------------       ---------------
                                  1999     1998         1999     1998
                                 ------   ------       ------   ------
                              (dollars in millions) (dollars in millions)
 Change in projected benefit
  obligation:
 Projected benefit obligation
    at beginning of year         $ 91.5   $ 77.5       $ 12.5   $ 10.5
 Service cost                       3.5      2.0           .1       .1
 Interest cost                      5.7      5.5           .8       .8
 Participant contributions           -        -            .1       .1
 Plan amendments                    1.0     (2.1)        (1.4)      -
 Curtailment                      (15.0)      -            -        -
 Actuarial (gain) loss              1.0     13.3          1.5      1.8
 Benefits paid                     (4.8)    (4.7)         (.8)     (.8)
                                 ------   ------       ------   ------
 Projected benefit obligation
    at end of year                 82.9     91.5         12.8     12.5
                                 ------   ------       ------   ------
 Change in plan assets:
 Plan assets at fair value
  at beginning of year             79.8     69.8           -        -
 Actual return on plan assets      15.4      8.6           -        -
 Employer contributions             6.8      6.1           .7       .7
 Participant contributions           -        -            .1       .1
 Benefits paid                     (4.8)    (4.7)         (.8)     (.8)
                                 ------   ------       ------   ------
 Plan assets at fair value
  at end of year                   97.2     79.8           -        -
                                 ------   ------       ------   ------
 Funded status of plan             14.3    (11.7)       (12.8)   (12.5)
 Unrecognized net (gain) loss       1.2     22.2          (.1)    (1.6)
 Unrecognized prior service cost   (2.2)    (3.8)        (2.0)    (1.3)
 Unrecognized net
   transition obligation            (.7)      .9           -        -
                                 ------   ------       ------   ------
 Prepaid (accrued) pension cost  $ 12.6   $  7.6       $(14.9)  $(15.4)
                                 ======   ======       ======   ======
 Weighted-average assumptions:
   Discount rate                  7.50%    6.75%        7.50%    6.75%
   Long-term rate of return      10.00%   10.00%         -        -
   Salary scale                    -       6.90%         -       4.50%

   Net benefit costs for the years ended December 31, 1999, 1998 and 1997
included the following (in millions):

                                          Pension          Postretirement
                                   -------------------  -------------------
                                    1999   1998   1997   1999   1998   1997
                                   -----  -----  -----  -----  -----  -----
Service cost                       $ 3.5  $ 1.9  $ 1.6  $  .1  $  .2  $  .1
Interest cost                        5.7    5.5    4.9     .8     .8     .7
Expected return on plan assets      (7.8)  (6.9) (10.2)    -      -      -
Amortization of:
 Unrecognized transition
    obligation                       (.2)   (.1)   (.1)    -      -      -
 Unrecognized prior service cost     (.4)   (.3)   (.3)   (.3)   (.4)  (1.0)
 Unrecognized actuarial
    (gain)/loss                       .6     .4     .1    (.1)   (.1)   (.1)
Loss due to change in
 attribution period                   -      -      -      -      .2     .2
Curtailment (gain)/loss               .6     -      -     (.3)    -      -
Deferral of asset gain                -      -     4.4     -      -      -
                                   -----  -----  -----  -----  -----  -----
Net benefit costs                  $ 2.0  $  .5  $  .4  $  .2  $  .7  $ (.1)
                                   =====  =====  =====  =====  =====  =====

    The  health care cost trend rates used to measure the expected cost  in
2000  for  medical,  dental and vision benefits were  9%,  5.5%  and  5.5%,
respectively, each graded down to an ultimate trend rate of  5%,  4.5%  and
4.5%, respectively, to be achieved in the year 2021.

   A  one-percentage-point change in assumed health care cost  trend  rates
would have the following effects (in millions):

                                    1-Percentage-     1-Percentage-
                                    Point Increase    Point Decrease
                                    --------------    --------------
    Effect on total of service and
     interest cost components          $  .1             $  (.1)
    Effect on postretirement
     benefit obligation                $ 1.4             $ (1.2)

   SAVINGS  PLANS  -  The  Company has two savings plans,  which  allow  an
employee  to contribute up to 15% of their base salary (subject to  certain
limitations).  Effective January 1, 1999 the Reading & Bates  Savings  Plan
and  the  Falcon  Drilling Company, Inc. Savings  &  Investment  Plan  were
merged,  amended  and restated to become the R&B Falcon U.S.  Savings  Plan
("U.S.  Savings Plan").  In addition, the Reading & Bates Offshore  Savings
Plan  and  the  Falcon  Drilling Company International  Plan  were  merged,
amended and restated to become the R&B Falcon Non-U.S. Savings Plan  ("Non-
U.S.  Savings  Plan").   The  U.S. Savings Plan  was  subsequently  amended
effective April 1, 1999 to allow the merger of the Cliffs Drilling  Company
Savings  Plan into the U.S. Savings Plan.  Cliffs Drilling did not  have  a
non-U.S. savings plan.

   Effective  January 1, 1999, the U.S. Savings Plan was also  restructured
to  meet  IRS Safe Harbor requirements.  Accordingly, there is no longer  a
vesting schedule for Company matching contributions, all contributions  are
immediately  100% vested.  The Company's Safe Harbor matching contributions
equal  100%  on  the 1st 3% of contributions and 50% on  the  4th  and  5th
percent  of contributions.  During 1999, the Company provided an additional
discretionary  match  of 50% on the 4th and 5th percent and 100% on the 6th
percent of contributions, for a total matching contribution in 1999  of  6%
on  the 1st 6% of contributions.  Effective July 1, 1999, the Company began
making  its  matching contributions in the form of issuing  shares  of  R&B
Falcon  common stock (see Note J).  Employees may direct the investment  of
their contributions into various plan investment options.

   The  Non-U.S. Savings Plan follows the same design structure with regard
to  contributions, vesting and Company matching contributions as  the  U.S.
Savings  Plan.  Compensation costs under the plans amounted to $6.7 million
in 1999, $4.6 million in 1998 and $2.7 million in 1997.

   STOCK  PLANS  -  The Company has 16 stock plans which  are  intended  to
provide an incentive that will allow the Company to retain persons  of  the
training,  experience  and  ability  necessary  for  the  development   and
financial  success of the Company. Such plans provide for grants  of  stock
options, stock appreciation rights, stock awards and cash awards, which may
be  granted singly, in combination or in tandem. All stock options  awarded
under  these plans expire ten years from the date of their grant  and  were
granted  at  the market price on the date of grant unless otherwise  noted.
Four of these plans were originally adopted by Falcon, five by R&B, two  by
Cliffs  Drilling  and  five by the Company. As a  result  of  the  business
combination between R&B and Falcon, and R&B Falcon and Cliffs Drilling, all
of  the  R&B, Falcon and Cliffs Drilling plans were assumed by the Company,
and the options outstanding thereunder were converted to options to acquire
common  stock  of R&B Falcon (with appropriate adjustments to  reflect  the
exchange ratios).

   The  Company's  Reading  &  Bates Corporation  1990  Stock  Option  Plan
authorized  options  with respect to approximately 2.3  million  shares  of
common  stock  to  be granted to certain employees of R&B  at  an  adjusted
option price of $6.25 per share.  In 1991, options with respect to all  2.3
million  shares  were  granted and vested over a  four-year  period.   Such
grant's  option price was less than the market price on the date  of  grant
and  the difference was recorded as compensation expense during the vesting
period.

   The  Company's Reading & Bates Corporation 1992 Long-Term Incentive Plan
(the "1992 Incentive Plan") authorized 1,180,000 shares of common stock  to
be  available for awards.  In 1992, restricted stock awards with respect to
354,000  shares  were  granted to certain officers  of  R&B.   Such  shares
awarded  were restricted as to transfer until vested pursuant to a schedule
whereby  1/24th  of the total number of shares vested per calendar  quarter
from  June 30, 1992 through March 31, 1998 (subject to certain conditions).
The  market  value  at the date of grant of the common  stock  granted  was
recorded  as  unearned compensation and was amortized to expense  over  the
periods  during  which the restrictions lapse or shares vested.   In  1995,
stock options with respect to the remaining 826,000 shares were granted  to
certain  officers  and employees of R&B at adjusted option  prices  ranging
from  $7.627 to $11.759 per share.  Such options become exercisable  either
over  a  one or four year period from the date of grant.  All stock  awards
under  the  1992 Incentive Plan vested on December 31, 1997 as a result  of
the merger of R&B and Falcon (see Note B).

   The  Company's  Reading & Bates Corporation 1995 Director  Stock  Option
Plan  authorized 236,000 shares of common stock to be available for  awards
of  stock  options to non-employee members of the board of  directors.   In
1995, R&B granted 141,600 options at an adjusted option price of $6.25  per
share.   In 1999, stock options with respect to 94,400 shares were  granted
at  $7.031  per  share.  Such options become exercisable over  a  two  year
period from the date of grant.

   The  Company's Reading & Bates Corporation 1995 Long-Term Incentive Plan
("1995 Incentive Plan") authorized 2,950,000 shares of common stock  to  be
available for awards. In 1995, stock options with respect to 708,000 shares
were  granted to an officer of R&B at an adjusted option price  of  $11.759
per share. Such options became exercisable one year from the date of grant.
Also  in 1995, restricted stock awards with respect to 642,156 shares  were
granted  to  certain employees of R&B.  Such shares awarded were restricted
as  to transfer until fully vested three years from the date of grant.  The
market  value at the date of grant of the common stock granted was recorded
as  unearned  compensation and was amortized to  expense  over  the  period
during  which  the shares vested.  In 1996, stock options with  respect  to
177,000  shares  were granted to an officer of R&B at  an  adjusted  option
price  of $23.729 per share.  Such options became exercisable over a three-
year  period from the date of grant.  Also in 1996, restricted stock awards
with  respect to 489,228 shares were granted to certain employees  of  R&B.
Such shares awarded were restricted as to transfer until fully vested three
years from the date of grant.  The market value at the date of grant of the
common  stock  granted  was  recorded  as  unearned  compensation  and  was
amortized  to  expense over the period during which the shares  vested.  In
1997, stock options with respect to 902,582 shares were granted to officers
of  R&B at an adjusted option price of $20.127 per share and in August 1997
R&B  rescinded  such option grants.  Under the 1995 Incentive  Plan,  stock
options  and restricted stock awards with respect to 868,700 shares  vested
on  December 31, 1997 as a result of the merger of R&B and Falcon (See Note
B).  In 1999, stock options with respect to 889,118 shares were granted  to
officers  of the Company at option prices ranging from $6.25 to $7.031  per
share.  Such options become exercisable either in six months or over a  two
year period from the date of grant.

   The  Company's Reading & Bates Corporation 1997 Long-Term Incentive Plan
(the "1997 Incentive Plan") authorized 2,950,000 shares of common stock  to
be  available for awards.  In 1997, restricted stock awards with respect to
33,866  shares  were  granted to certain employees  of  R&B.   Such  shares
awarded were restricted as to transfer until fully vested three years  from
the  date  of grant.  The market value at the date of grant of  the  common
stock  granted was recorded as unearned compensation and was  amortized  to
expense  over  the period during which the shares vested.   Also  in  1997,
stock  options with respect to 6,018 shares were granted to an  officer  of
R&B at an adjusted option price of $20.127 per share and in August 1997 R&B
rescinded  such  option grants.  Under the 1997 Incentive Plan,  restricted
stock awards with respect to 33,866 shares vested on December 31, 1997 as a
result  of  the  merger of R&B and Falcon (see Note  B).   In  1999,  stock
options  with respect to 2,892,020 shares were granted to officers  of  the
Company  at  an  option  price of $7.031 per share.   Such  options  become
exercisable over a two year period from the date of grant.

   The  Company's  Falcon  Drilling Company, Inc. 1992  Stock  Option  Plan
authorized options with respect to 1.0 million shares of common stock to be
granted to certain employees and directors of Falcon. In 1992, options with
respect  to  all 1.0 million shares were granted at adjusted option  prices
ranging  from  $1.665  to  $1.85  per share  and  vested  immediately.   No
compensation expense was recorded as a result of the option price being the
estimated market price of Falcon's common stock on the date of grant.

   The  Company's  Falcon  Drilling Company, Inc. 1994  Stock  Option  Plan
authorized  options with respect to 570,000 shares of common  stock  to  be
granted  to  certain employees and directors of Falcon.  In  1994,  options
with respect to all 570,000 shares were granted at an adjusted option price
of  $5.00  per  share, vesting ratably over three years.   No  compensation
expense  was  recorded as a result of the option price being the  estimated
market price of Falcon's common stock on the date of grant.

   The  Company's  Falcon  Drilling Company, Inc. 1995  Stock  Option  Plan
authorized options with respect to 1.0 million shares of common stock to be
granted to certain employees and directors of Falcon. In 1995, options with
respect to 250,000 shares were granted at an adjusted option price of $5.00
per share, vesting ratably over three years.  In 1996, options with respect
to  280,000  shares were granted at an adjusted option price of $6.065  per
share,  vesting  over two years and options with respect to 150,000  shares
were  granted  at  an  adjusted option price of $9.72  per  share,  vesting
ratably over five years.  In February 1997, options with respect to 258,000
shares were granted at an adjusted option price of $12.50 per share and  in
November 1997 Falcon rescinded such option grants.  No compensation expense
was  recorded  as  a result of the option price being the estimated  market
price of Falcon's common stock on the date of grant.

   The  Company's  Falcon  Drilling Company, Inc. 1997  Stock  Option  Plan
authorized options with respect to 1.2 million shares of common stock to be
granted to certain employees and directors of Falcon. In July 1997, options
with respect to 3,000 shares were granted at an option price of $12.50  per
share  and in November 1997 Falcon rescinded such option grants.   In  July
1997,  options for 40,000 shares were granted at an option price of  $29.00
per  share,  vesting ratably over three years. No compensation expense  was
recorded  as a result of the option price being the estimated market  price
of Falcon's common stock on the date of grant.

   The  Company's  Cliffs Drilling Company 1988 Incentive Equity  Plan  and
Cliffs Drilling Company 1998 Incentive Equity Plan were both assumed by the
Company  on December 1, 1998 as a result of the purchase of Cliffs Drilling
(see Note B). Under these plans, the Company assumed outstanding options to
purchase 1,052,300 shares of common stock at adjusted option prices ranging
from  $3.79 to $40.89 per share and expiring at dates ranging from 2000  to
2008.   All  such  options vested on December 1, 1998 as a  result  of  the
Company's purchase of Cliffs Drilling.

    The  Company's  1998  Employee  Long-Term Incentive Plan authorized 3.2
million  shares  of common stock to be available for awards. In 1998, stock
options  with  respect to 100,000 shares were granted to an employee of the
Company  at  an  option  price  of $22.375 per share and stock options with
respect  to  1,830,500  shares  were  granted  to  certain employees of the
Company  at  an  option  price  of $12.9375 per share.  Such options become
exercisable over  a  three  year  period.  Also  in  1998, restricted stock
awards with respect  to  941,500  shares  were granted to certain employees
of  the  Company.  Such  shares awarded are restricted as to transfer until
fully vested three years  from  the  date of grant. The market value at the
date  of  grant  of  the  common  stock  granted  was  recorded as unearned
compensation and will be  amortized to expense over the period during which
the shares vest. In  1999,  stock  options  with  respect to 396,568 shares
were granted to  officers  of  the Company  at  an  option  price  of $6.25
per share.   Such  options  became  exercisable six months from the date of
grant. Also in 1999, stock  options  with  respect  to  145,000 shares were
granted to  four  employees  of  the Company at an option price of $6.15625
per share and which  vest  equally over  three years. Such options were not
granted from any of the  Company's stock  option  plans  but  were  granted
under the terms of the 1998  Employee Long-Term Incentive Plan.

   The  Company's 1998 Director Long-Term Incentive Plan authorized 250,000
shares  of common stock to be available for awards to non-employee  members
of  the  board of directors. In 1999, stock options with respect to 249,600
shares  were  granted  an option price of $7.031 per share.   Such  options
become exercisable over a two year period from the date of grant.

   The  Company's  1998  Acquisition Option Plan  authorized  options  with
respect  to  1.0  million shares of common stock to be granted  to  certain
employees of Cliffs Drilling. On December 1, 1998, options with respect  to
all  1.0 million shares were granted at an option price of $9.125 per share
and vest over a three year period.

   The  Company's  1999  Employee Long-Term Incentive Plan  authorized  6.5
million  shares of common stock to be available for awards. In 1999,  stock
options  with respect to 3,508,760 shares were granted to certain employees
of  the  Company at option prices ranging from $9.75 to $13.4688 per share.
Such options become exercisable over a three year period.

   The  Company's  1999  Director Long-Term Incentive  Plan  authorized  .3
million  shares of common stock to be available for awards. In 1999,  stock
options  with respect to 136,000 shares were granted at an option price  of
$10.0625 per share. Such options become exercisable over a two year period.

   Unearned compensation relating to the Company's restricted stock  awards
is  shown  as a reduction of stockholders' equity.  Compensation recognized
for the years ending December 31, 1999, 1998 and 1997 totaled approximately
$5.9 million, $1.1 million and $17.8 million, respectively.

   Stock option transactions under the plans were as follows:

                             1999                1998               1997
                      ------------------ ------------------ ------------------
                                Weighted           Weighted           Weighted
                        Number   Average   Number   Average   Number   Average
                      of Options  Price  of Options  Price  of Options  Price
                      ----------  -----  ----------  -----  ----------  -----
Outstanding
 at beginning of year  6,550,354  $12.61  2,794,101  $ 9.83  3,836,159  $ 8.20
   Granted             8,311,466    8.29  2,930,500   11.96     40,000   29.00
   Assumed from
     Cliffs Drilling           -     -    1,052,300   20.41          -     -
   Exercised            (113,260)   7.03   (226,547)   6.03 (1,073,562)   4.75
   Forfeited            (335,110)  15.21          -     -       (8,496)   7.63
                      ----------          ---------          ---------
Outstanding
 at end of year       14,413,450   10.10  6,550,354   12.61  2,794,101    9.83
                      ==========          =========          =========
Exercisable at
 end of year           8,216,401   10.22  3,503,187   12.69  2,377,433    9.98
Available for grant
 at end of year        3,456,161     -    4,516,604     -    5,415,772     -

   The  Company  accounts for these plans under APB Opinion No.  25,  under
which no compensation cost has been recognized.  Had compensation cost  for
these  plans  been determined consistent with SFAS 123, the  Company's  net
income and earnings per share would have been reduced to the following  pro
forma amounts (in millions except per share amounts):

                                    1999        1998      1997
                                  --------    -------   --------
        Net income (loss) applicable
          to common stockholders:
            As reported           $ (103.2)   $ 102.8   $   (6.2)
            Pro forma             $ (121.5)   $ 101.3   $  (10.0)
        Basic EPS:
            As reported           $   (.54)   $   .61    $  (.04)
            Pro forma             $   (.63)   $   .60    $  (.06)
        Diluted EPS:
            As reported           $   (.54)   $   .61    $  (.04)
            Pro forma             $   (.63)   $   .60    $  (.06)

   The  fair value of each grant since January 1, 1995 was estimated as  of
the  date  of the grant using the Black-Scholes option pricing model.   The
following  weighted-average  assumptions were used for the options  granted
in  1999: risk-free interest rate of 5.9%, an expected life of 10 years and
expected  volatility of 69.6%.  The resulting fair value  of  such  options
granted was $6.44.

   Because  the  SFAS  123 method of accounting has  not  been  applied  to
options  granted  prior  to  January  1,  1995,  the  resulting  pro  forma
compensation  cost  may not be representative of that  to  be  expected  in
future years.

   SUBSIDIARY  STOCK AWARD - On April 1, 1999, Devco, a previously  wholly-
owned indirect subsidiary of the Company made awards of restricted stock of
Devco to certain directors, officers and employees of the Company, as  well
as awards of restricted stock to certain former directors of R&B who served
in  such capacity prior to completion of the merger with Falcon in December
1997.  Such award comprised of 1,650,000 shares of Devco's common stock  or
approximately 13.9% of the outstanding common stock of Devco.   The  awards
vested  upon issuance, but were subject to restrictions on sale or transfer
for  a  period of six months following the date of the award. As a  result,
the  Company incurred $1.5 million of expense in the second quarter of 1999
which has been included in general and administrative expenses.

(L)  RELATED PARTY TRANSACTIONS

   In  1999,  the Company entered into rig management agreements  with  DDI
and  DDII  for  the  management of the Deepwater Pathfinder  and  Deepwater
Frontier, respectively. DDI and DDII are unconsolidated investees accounted
for  on  the  equity method (see Note C).  For the year ended December  31,
1999,  DDI  and  DDII paid to the Company $1.4 million  and  $1.1  million,
respectively,  for  such  management services.  Such  revenue  amounts  are
included  in "Income (loss) from equity investees plus related  income"  in
the Consolidated Statement of Operations. At December 31, 1999, the Company
had  receivables  from  DDI  and DDII of $6.3  million  and  $1.8  million,
respectively, which are included in "Accounts Receivable: Other".

    In  1999,  the Company entered into an agreement pursuant to which  the
Company  will supervise the construction of the drillship Navis Explorer  I
and  manage  it  following its delivery (see Note C). For  the  year  ended
December 31, 1999, Navis paid to the Company $.7 million for such services.
At  December  31,  1999, the Company had a receivable  from  Navis  of  $.8
million.

   The  former  owners of a company acquired by the Company  in  1992,  who
currently  are employees of the Company and were officers of Falcon,  lease
crewboats,  tugboats and supply barges and other vessels  to  Falcon  at  a
contracted bareboat rate of $100 per day for crewboats and tugboats and $60
per day for other vessels, with Falcon responsible for drydocking, painting
and  repairs.  The  former owners received revenues of  $1.1  million,  $.9
million  and  $.9 million for the years ended December 31, 1999,  1998  and
1997, respectively.

   William  R.  Ziegler, a Director and stockholder of the  Company,  is  a
partner  in  a  law firm which provided legal services to the  Company  and
certain  of its affiliated entities. Fees paid by the Company to  this  law
firm  were  $.1  million and $.2 million for the years ended  December  31,
1998, and 1997, respectively.

   Michael  E.  Porter,  a Director and stockholder  of  the  Company,  who
provided  consulting services to the Company, received $.4 million  in  the
year ended December 31, 1998.

   Steven  A.  Webster,  a Director and stockholder  of  the  Company,  who
provided  consulting services to the Company, received $.2 million  in  the
year ended December 31, 1999.

   In  June  1994, the Company entered into an agreement with  Eilert-Olsen
Investments,  Inc.  (Eilert-Olsen), to buy the equity interest  in  Eilert-
Olsen  for  a nominal purchase price.  In June 1994, Eilert-Olsen  acquired
three  barge  drilling  rigs  for  a cost  of  approximately  $2.8  million
consisting of cash of approximately $.9 million and the assumption of  debt
of  approximately  $1.9 million secured by the three barge  drilling  rigs.
The  Company  advanced $.9 million to Eilert-Olsen in  June  1994  and  has
subsequently  advanced  approximately $.2 million,  $.5  million  and   $.5
million   for  the  years  ended  December  31,  1999,  1998,   and   1997,
respectively, to pay principal and interest due on this debt.  Due  to  the
Company's affiliation with Eilert-Olsen, the financial statements of Eilert-
Olsen  and  the  option to purchase Eilert-Olsen from inception  have  been
consolidated with the financial statements of the Company and, accordingly,
the  accounts  and  transactions between the Company and Eilert-Olsen  have
been eliminated in consolidation.

   In  1997, the Company paid $.4 million to Bantam Services, Inc. under  a
contract  pursuant  to which Bantam is to supply, at  cost,  groceries  and
supplies  to be used on certain of the Company's rigs.  Bantam is  entitled
under the contract to bill third parties for meals and lodging supplied  to
their personnel on such rigs.  In the absence of such contract, the Company
would  be  entitled  to  bill the third parties for the  food  and  lodging
provided.  Bantam is owned by an officer of Falcon Workover Company,  Inc.,
a wholly-owned subsidiary of the Company.

(M)       SEGMENT INFORMATION

   The  Company's revenues are generated primarily from its marine drilling
rigs.   The  Company's  management  has organized  these  rigs  by  general
equipment  types  based  on water depth capability.   Any  rig  capable  of
drilling in water depths greater than 400 feet is considered deepwater.  In
addition,  as  a  result  of the purchase of Cliffs Drilling,  the  Company
provides  turnkey  drilling services and land drilling operations  both  of
which are included in the engineering services and land operations segment.
The  Company's development segment primarily consists of the Company's  oil
and gas operations (see Note P).

    Operating  revenues and income by segment for the years ended  December
31, 1999, 1998 and 1997 is as follows (in millions):

                                    1999         1998          1997
                                  -------      -------       -------
Operating revenues by segment:
 Deepwater                        $ 359.4      $ 392.5       $ 349.3
 Shallow water                      202.9        382.9         333.2
 Inland water                       122.5        244.9         249.9
 Engineering services and
   land operations                  260.8         12.9            -
 Development                           .5           -             .6
 Intersegment                       (27.3)         (.6)           -
                                  -------      -------       -------
   Operating revenues               918.8      1,032.6         933.0
                                  -------      -------       -------
Operating income (loss) by
segment:
 Deepwater                           87.8         42.3         170.4
 Shallow water                      (10.4)       194.4         145.6
 Inland water                        (6.5)        52.4          96.5
 Engineering services and
   land operations                   56.6          1.3            -
 Development                         (3.6)       (20.2)       (129.6)
 Profit elimination                  (4.5)         (.2)           -
                                  -------      -------       -------
                                    119.4        270.0         282.9
Unallocated depreciation
  and amortization                   (4.4)        (1.0)          (.4)
Unallocated general
  and administrative                (69.9)       (61.2)        (55.7)
Unallocated merger expenses            -           8.0         (66.4)
                                  -------      -------       -------
Operating income                  $  45.1      $ 215.8       $ 160.4
                                  =======      =======       =======

    Total  assets  by segment at December 31, 1999, 1998 and 1997  were  as
follows (in millions):

                              1999         1998         1997
                           ---------    ---------    ---------
   Deepwater               $ 2,942.5    $ 2,101.7    $ 1,256.1
   Shallow water             1,263.5      1,038.5        445.2
   Inland water                227.7        251.2        228.0
   Engineering services
    and land operations        166.7        159.3           -
   Development                  49.5         11.6         71.4
   Corporate                   266.2        151.7         10.7
                           ---------    ---------    ---------
        Total              $ 4,916.1    $ 3,714.0    $ 2,011.4
                           =========    =========    =========

   Geographic  information  about the Company's operations  for  the  three
years ended December 31, 1999 is as follows (in millions):

                                      1999        1998        1997
                                   ---------   ---------   ---------
          Operating revenues: (1)
           United States           $   276.8   $   453.0   $   451.2
           Europe                      198.8       251.9       247.3
           West Africa                  80.8       126.5        69.9
           Southeast Asia               60.2        83.4        82.4
           South America               279.2        75.2        50.9
           Australia                    14.9        26.2        23.4
           Mediterranean-
               Middle East               8.1        16.4         7.9
           Corporate                      -           -           -
                                   ---------   ---------   ---------
             Total                 $   918.8   $ 1,032.6   $   933.0
                                   =========   =========   =========
          Identifiable assets:
           United States           $ 2,012.6   $ 1,133.3   $   933.3
           Europe                      781.2       922.4       535.2
           Southeast Asia              992.8       659.3        92.7
           South America               566.1       499.1       175.1
           West Africa                 227.1       247.9       190.3
           Mediterranean-
              Middle East               51.5        76.3        52.2
           Australia                    18.6        24.0        21.9
           Corporate                   266.2       151.7        10.7
                                   ---------   ---------   ---------
              Total                $ 4,916.1   $ 3,714.0   $ 2,011.4
                                   =========   =========   =========
  _____________
  (1)  Revenues are shown by countries in which the Company's marine and
       drilling units operated.

    For  the  year ended December 31, 1999, revenues from PDVSA Exploration
and Production of approximately $175.1 million ($160.1 million reported  in
the  engineering  services and land operations segment  and  $15.0  million
reported in the shallow water segment) accounted for 19.0% of the Company's
total operating revenues and revenues from British Petroleum and affiliates
of  approximately $119.5 million ($113.8 million reported in the  deepwater
segment  and $5.7 million reported in the shallow water segment)  accounted
for  13.0%  of the Company's total operating revenues.  For the year  ended
December  31,  1998,  revenues  from British Petroleum  and  affiliates  of
approximately $116.1 million, reported in the deepwater segment,  accounted
for  11.2%  of the Company's total operating revenues.  For the year  ended
December 31, 1997, there were no customers that individually accounted  for
10.0% or more of the Company's total operating revenues.

(N)  EARNINGS PER SHARE

   Basic  net  income (loss) per common share is computed by  dividing  net
income  (loss),  after  deducting  the preferred  stock  dividend,  by  the
weighted  average  number of common shares outstanding during  the  period.
Diluted net income (loss) per common share is the same as basic and assumes
the  exercise  of outstanding stock options and the issuance of  restricted
stock both computed using the treasury stock method.

   The  following table reconciles the numerators and denominators  of  the
basic  and  diluted  per common share computations for income  (loss)  from
continuing  operations before extraordinary loss for the three years  ended
December  31, 1999, 1998 and 1997 as follows (in millions except per  share
amounts):

                                              1999       1998      1997
                                            --------   -------   --------
   Numerator:
   Income (loss) from continuing operations
     before extraordinary loss              $  (67.8)  $  91.0   $   29.8
   Dividends and accretion on
    preferred stock                             33.7        -          -
                                            --------   -------   --------
   Income (loss) from continuing operations
     before extraordinary loss
     - basic and diluted                    $ (101.5)  $  91.0   $   29.8
                                            ========   =======   ========
   Denominator:
   Weighted average common shares
     outstanding - basic                       192.7     167.5     164.1
   Outstanding stock options and
      restricted stock                            -        1.3       2.1
                                            --------   -------  --------
   Weighted average common shares
    outstanding and assumed
    conversions - diluted                      192.7     168.8     166.2
                                            ========   =======   =======
   Earnings per share:
   Income (loss) from continuing operations
     before extraordinary loss:
          Basic                             $   (.53)  $   .54   $   .18
          Diluted                           $   (.53)  $   .54   $   .18

(O)  DISCONTINUED OPERATIONS

   In  March  1998, the Company decided to divest its oil and gas  segment,
and in the Company's financial statements previously filed with the SEC for
the  three years ended December 31, 1997, 1996 and 1995 and the first three
quarters  of  1998,  the  segment  was  accounted  for  as  a  discontinued
operation. However in March 1999, the Company had not been able  to  divest
this  segment on terms it found acceptable and in accordance with generally
accepted  accounting  principles  the Company  reclassified  its  financial
statements as if this segment had not been discontinued.  In 1997, a  $36.0
million  reserve  for estimated losses from operations until  disposal  had
been  recorded and in 1998 it was reversed in accordance with  the  Company
reclassifying the oil and gas segment as if it had not been discontinued.

(P)  OIL AND GAS OPERATIONS

   The  Company, primarily through its majority-owned subsidiary Devco and,
to  an  insignificant  extent through its wholly-owned subsidiaries  Raptor
Exploration  Company, Inc. and Cliffs Oil and Gas Company, engages  in  oil
and gas exploration activities.  Devco engages primarily in the acquisition
of  working interests in offshore oil and gas properties pursuant to  which
it  shares  in reservoir and oil and gas price risks and thus  profits  and
losses from such properties.

   In  1998,  Devco  incurred  dryhole costs of  $11.7  million  and  asset
impairment charges of $11.3 million. In 1997, Devco incurred dryhole  costs
of  $65.1  million  and  asset impairment charges of  $42.8  million.   The
Company's oil and gas operations are not significant; therefore, applicable
disclosures are not required at December 31, 1999 and 1998 or for the years
ended December 31, 1999, 1998 and 1997.

(Q)  RESTRUCTURING EXPENSES

   On  April  7,  1999, the Company announced that Mr. Steven Webster,  the
Company's President and Chief Executive Officer, had agreed to resign  from
these  officer positions effective May 31, 1999. On May 19, 1999, Mr.  Paul
B.  Loyd,  Jr.,  the Company's Chairman of the Board, was  elected  as  the
Company's  Chief Executive Officer, and Mr. Andrew Bakonyi was  elected  as
President  and Chief Operating Officer. Mr. Webster remains a  Director  of
the Company.

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

    As  a  result of the termination of Mr. Douglas E. Swanson as President
and Chief Executive Officer of Cliffs Drilling, the Company entered into  a
termination  agreement and a non-competition agreement  contract  with  Mr.
Swanson. The related termination contract expense of $2.6 million  will  be
amortized  over three years. Amortization for 1999 amounted to $.4  million
and  is  included  in  "Other,  net"  per  the  Consolidated  Statement  of
Operations. Mr. Swanson remains a Director of the Company.

(R) QUARTERLY FINANCIAL DATA (unaudited)

   Summarized  quarterly  financial data for the two years  ended  December
31, 1999, are as follows (in millions except for per share amounts):

                                                 Quarter
                               -------------------------------------------
                                First   Second    Third   Fourth    Total
                               -------  -------  -------  -------  -------
1999:
Operating revenues             $ 243.8  $ 226.5  $ 214.2  $ 234.3  $  918.8
Gross income (1)               $  48.2  $  34.2  $  49.0  $  17.1  $  148.5
Income (loss) from continuing
  operations before
  extraordinary loss (2)       $   3.3  $ (14.2) $ (22.4) $ (34.5) $  (67.8)
Extraordinary loss (3)         $  (1.7) $    -   $    -   $    -   $   (1.7)
Net income (loss)              $   1.6  $ (14.2) $ (22.4) $ (34.5) $  (69.5)
Net income (loss) per
 common share:
  Basic:
     Income (loss) from
      operations               $   .02  $  (.12) $  (.18) $  (.24) $   (.53)
     Extraordinary loss           (.01)     -        -        -        (.01)
                               -------  -------  -------  -------  --------
          Net income (loss)    $   .01  $  (.12) $  (.18) $  (.24) $   (.54)
                               =======  =======  =======  =======  ========
  Diluted:
     Income (loss) from
       operations              $   .02  $  (.12) $  (.18) $  (.24) $   (.53)
     Extraordinary loss           (.01)     -        -        -        (.01)
                               -------  -------  -------  -------  --------
          Net income (loss)    $   .01  $  (.12) $  (.18) $  (.24) $   (.54)
                               =======  =======  =======  =======  ========
1998(4):
Operating revenues             $ 279.3  $ 281.1  $ 243.5  $ 228.7  $1,032.6
Gross income (1)               $ 130.0  $ 126.4  $  77.3  $  53.5  $  387.2
Income (loss) from continuing
  operations before
  extraordinary loss (2)       $  61.5  $  59.9  $ (28.2) $  (2.2) $   91.0
Income from discontinued
  operations                   $   8.3  $    .5  $   7.7  $  19.5  $   36.0
Extraordinary loss (3)         $    -   $ (22.0) $    -   $  (2.2) $  (24.2)
Net income (loss)              $  69.8  $  38.4  $ (20.5) $  15.1  $  102.8
Net income (loss)
 per common share:
  Basic:
     Continuing operations     $   .37  $   .36  $  (.17) $  (.01) $    .54
     Discontinued operations       .05      .01      .05      .11       .21
     Extraordinary loss            -       (.13)     -       (.01)     (.14)
                               -------  -------  -------  -------  --------
          Net income (loss)    $   .42  $   .24  $  (.12) $   .09  $    .61
                               =======  =======  =======  =======  ========
  Diluted:
     Continuing operations     $   .37  $   .36  $  (.17) $  (.01) $    .54
     Discontinued operations       .05      -        .05      .11       .21
     Extraordinary loss            -       (.13)     -       (.01)     (.14)
                               -------  -------  -------  -------  --------
          Net income (loss)    $   .42  $   .23  $  (.12) $   .09  $    .61
                               =======  =======  =======  =======  ========
________________________
(1)  Gross  income  represents  operating revenues less  operating  expenses,
     depreciation and amortization, and other, net.
(2)  Cancellation of conversion project expense is included in the  following
     quarters:   $31.7 million in the third quarter of 1999, $3.0 million  in
     the  fourth quarter of 1999, $85.8 million in the third quarter of  1998
     and $32.5 million in the fourth quarter of 1998.
(3)  The  extraordinary losses incurred in the first quarter of 1999 and  the
     second and fourth quarters of 1998 are shown net of a tax benefit of $.9
     million, $11.9 million and $1.1 million, respectively.
(4)  The  quarterly financial data for 1998 has been adjusted to reflect  the
     recontinuance of the Company's oil and gas operations (see Note O).

Item  9.   Changes in and Disagreements with Accountants on Accounting
and Financial Disclosure

     Not applicable.

                            PART III

The information called for by Part III of Form 10-K is incorporated by
reference from the Registrant's Proxy Statement relating to its annual
meeting  of Stockholders to be held May 17, 2000, which will be  filed
by the Registrant with the Securities and Exchange Commission no later
than 120 days after the close of the fiscal year.

                            PART IV

Item 14.  Exhibits, Financial Statements and Reports on Form 8-K

  (a)Financial Statements and Exhibits

    1.Financial Statements:

      Report of Independent Public Accountants
      Consolidated Balance Sheet as of December 31, 1999 and 1998
      Consolidated  Statement  of  Operations  for  the  years   ended
      December 31, 1999, 1998 and 1997
      Consolidated  Statement  of  Cash  Flows  for  the  years  ended
      December 31, 1999, 1998 and 1997
      Consolidated  Statement of Stockholders' Equity  for  the  years
      ended December 31, 1999, 1998 and 1997
      Notes to Consolidated Financial Statements

    2.   Exhibits:

 2.1     - Agreement  and Plan of Merger, dated July 10,  1997,  among
           R&B   Falcon,  FDC  Acquisition  Corp.,  Reading  &   Bates
           Acquisition  Corp., Falcon and R&B.  (Filed as Exhibit  2.1
           to  R&B  Falcon's Registration Statement on Form S-4  dated
           November 20, 1997 and incorporated herein by reference.)

 2.2     - Agreement and Plan of Merger, dated August 21, 1998 by  and
           among  Cliffs Drilling Company, R&B Falcon Corporation  and
           RBF Cliffs Drilling Acquisition Corp.  (Filed as Exhibit  2
           to  R&B  Falcon's Registration Statement No.  333-63471  on
           Form  S-4 dated September 15, 1998 and incorporated  herein
           by reference.)

 3.1     - Amended  and Restated Certificate of Incorporation  of  R&B
           Falcon.   (Filed  as  Exhibit 3.1 to  R&B  Falcon's  Annual
           Report  on  Form 10-K for 1997 and incorporated  herein  by
           reference.)

 3.2     - Amended  and  Restated  Bylaws of  R&B  Falcon.  (Filed  as
           Exhibit 3.2 to R&B Falcon's Annual Report on Form 10-K  for
           1997 and incorporated herein by reference.)

 4.1     - Form  of R&B Falcon's Common Stock Certificate.  (Filed  as
           Exhibit 4.1 to R&B Falcon's Annual Report on Form 10-K  for
           1997 and incorporated herein by reference.)

 4.2     - Rights Agreement dated as of December 23, 1997 between  R&B
           Falcon  and  American  Stock Transfer  and  Trust  Company.
           (Filed  as  Exhibit 4.2 to R&B Falcon's  Annual  Report  on
           Form 10-K for 1997 and incorporated herein by reference.)

 4.3     - Registration Rights Agreement dated January 1,  1998  among
           the  Company  and  the  Stockholders of  BSI  Workover  and
           Drilling,  Inc.   (Filed as Exhibit  4.1  to  R&B  Falcon's
           Quarterly  Report  on Form 10-Q for the  First  Quarter  of
           1998 and incorporated herein by reference.)

 4.4     - Registration  Rights Agreement dated as of  April  8,  1998
           among  R&B  Falcon  Corporation  and  Credit  Suisse  First
           Boston,   Chase  Securities,  Inc.,  Donaldson,  Lufkin   &
           Jenrette  Securities  Corporation and Morgan  Stanley  Dean
           Witter.    (Filed   as   Exhibit  4.2   to   R&B   Falcon's
           Registration  Statement No. 333-56821  on  Form  S-4  dated
           June 15, 1998 and incorporated herein by reference.)

 4.5     - Registration  Rights Agreement dated July 1,  1998  by  and
           between  R&B Falcon Corporation, Kenneth Stage,  T.  George
           Delsa,  Vial J. LeBlanc and Dr. William T. Barfield. (Filed
           as  Exhibit 4 to R&B Falcon's Quarterly Report on Form 10-Q
           for  the  Third Quarter of 1998 and incorporated herein  by
           reference.)

 4.6     - Registration  Rights  Agreement  dated  December  17,  1998
           among  R&B  Falcon Corporation, Credit Suisse First  Boston
           Corporation,  Nations Banc Montgomery Securities  LLC,  and
           Paribas  Corporation. (Filed as Exhibit 4.6 to R&B Falcon's
           Annual  Report  on  Form  10-K for  1998  and  incorporated
           herein by reference.)

 4.7     - Indenture   relating   to  R&B's  8%  Senior   Subordinated
           Convertible  Debentures due 1998 dated  as  of  August  29,
           1989,  between  R&B and IBJ Schroder Bank & Trust  Company,
           as  Trustee.  (Filed as Exhibit 4.1 to R&B's Annual  Report
           on   Form   10-K  for  1989  and  incorporated  herein   by
           reference.)

 4.8     - Form   of   R&B's   registered   8%   Senior   Subordinated
           Convertible Debentures due 1998.  (Filed as Exhibit 4.2  to
           R&B's Registration No. 33-28580 and incorporated herein  by
           reference.)

 4.9     - Form  of  R&B's  bearer 8% Senior Subordinated  Convertible
           Debentures  due  1998.   (Filed as  Exhibit  4.3  to  R&B's
           Registration  No.  33-28580  and  incorporated  herein   by
           reference.)

 4.10    - First Supplemental Indenture dated as of December 23,  1997
           among  the  Company,  R&B and IBJ  Schroder  Bank  &  Trust
           Company.  (Filed  as  Exhibit 4.6 to  R&B  Falcon's  Annual
           Report  on  Form 10-K for 1997 and incorporated  herein  by
           reference.)

 4.11    - Indenture dated as of January 15, 1994, between Falcon  and
           Texas Commerce Bank National Association, including a  form
           of  Note.  (Filed  as  an exhibit to Falcon's  Registration
           Statement   on   Form  S-4,  filed  on  April   29,   1994,
           Registration  No.  33-78369  and  incorporated  herein   by
           reference.)

 4.12    - Supplemental  Indenture dated as of June 3, 1994,  pursuant
           to   which   Falcon  Workover  Company,  Inc.,   became   a
           Guarantor.  (Filed  as an exhibit to Falcon's  Registration
           Statement  on Form S-4, Amendment No.1, filed on  June  30,
           1994, Registration No. 33-78360 and incorporated herein  by
           reference.)

 4.13    - Supplemental Indenture dated as of June 28, 1994,  pursuant
           to  which  Raptor  Exploration  Company,  Inc.  and  FALRIG
           Offshore  (USA), L.P., and FALRIG Offshore Partners  became
           Guarantors.  (Filed as an exhibit to Falcon's  Registration
           Statement  on Form S-4, Amendment No.1, filed on  June  30,
           1994, Registration No. 33-78360 and incorporated herein  by
           reference.)

 4.14    - Supplemental  Indenture  dated as  of  December  30,  1994,
           pursuant  to  which  Falcon Inland, Inc.,  Falcon  Services
           Company,   Inc.  and  FALRIG  de  Venezuela,  Inc.   became
           Guarantors. (Filed as an exhibit to Falcon's Annual  Report
           on  form  10-K  for the year ended December  31,  1994  and
           incorporated herein by reference.)

 4.15    - Joinder  Agreement  dated as of June 3, 1994,  pursuant  to
           which  Falcon  Workover Company, Inc. became  a  Guarantor.
           (Filed as an exhibit to Falcon's Registration Statement  of
           Form  S-1,  Amendment  No.  3,  filed  on  July  19,  1995,
           Registration  No.  33-84582  and  incorporated  herein   by
           reference.)

 4.16    - Joinder  Agreement dated as of June 28, 1994,  pursuant  to
           which  Raptor  Exploration Company, Inc.,  FALRIG  Offshore
           (USA),   L.P.,   and   FALRIG  Offshore   partners   became
           Guarantors.  (Filed as an exhibit to Falcon's  Registration
           Statement of Form S-1, Amendment No. 3, filed on  July  19,
           1995, Registration No. 33-84582 and incorporated herein  by
           reference.)

 4.17    - Joinder  Agreement dated as of December 30, 1994,  pursuant
           to  which  Falcon  Inland, Inc., Falcon  Services  Company,
           Inc.  and  FALRIG  de  Venezuela, Inc.  became  Guarantors.
           (Filed as an exhibit to Falcon's Registration Statement  of
           Form  S-1,  Amendment  No.  3,  filed  on  July  19,  1995,
           Registration  No.  33-84582  and  incorporated  herein   by
           reference.)

 4.18    - Joinder  Agreement dated as of March 1, 1996,  pursuant  to
           which  Falcon  Atlantic, Ltd., Falcon Drilling  do  Brasil,
           Ltda.,    Falcon   Drilling   de   Venezuela,   Inc.    and
           perforaciones FALRIG de Venezuela, C.A. became  Guarantors.
           (Filed as an exhibit to Falcon's Annual Report on Form  10-
           K  for  the  year ended December 31, 1995 and  incorporated
           herein by reference.)

 4.19    - Indenture  dated  as of March 1, 1996, between  Falcon  and
           Bank  One,  Texas, N. A., including a form of Note.  (Filed
           as an exhibit to Falcon's Registration Statement on Form S-
           4,  filed  on March 8, 1996, Registration No. 333-2114  and
           incorporated herein by reference.)

 4.20    - Indenture  dated as of April 14, 1998, between  R&B  Falcon
           Corporation,  as Issuer, and Chase Bank of Texas,  National
           Association,  as  Trustee, with respect  to  Series  A  and
           Series  B  of  each of $250,000,000 6 1/2% Senior Notes due
           2003,   $350,000,000   6   _%  Senior   Notes   due   2005,
           $250,000,000  6.95% Senior Notes due 2008, and $250,000,000
           7  3/8% Senior Notes due 2018. (Filed as Exhibit 4.1 to R&B
           Falcon's  Registration Statement No. 333-56821 on Form  S-4
           dated June 15, 1998 and incorporated herein by reference.)

 4.21    - Indenture  dated  as  of  December 22,  1998,  between  R&B
           Falcon  Corporation,  as Issuer and Chase  Bank  of  Texas,
           National   Association,  as  Trustee,   with   respect   to
           $400,000,000 Series A and Series B 9 1/8% Senior notes  due
           2003,   and   9 1/2% Senior  Notes  due  2008.  (Filed   as
           Exhibit  4.21  to R&B Falcon's Annual Report on  Form  10-K
           for 1998 and incorporated herein by reference.)

 4.22    - Indenture  dated as of March 26, 1999, between RBF  Finance
           Co.,  as  Issuer, and United States Trust  Company  of  New
           York,  as Trustee, with respect to $400,000,000 11%  Senior
           Secured  Notes  due 2006 and $400,000,000  11  3/8%  Senior
           Secured  Notes  due  2009.  (Filed as Exhibit  4.1  to  R&B
           Falcon's  Quarterly  Report on  Form  10-Q  for  the  First
           Quarter of 1999 and incorporated herein by reference.)

 4.23    - Indenture  dated as of March 26, 1999, between  R&B  Falcon
           Corporation,  as Issuer, and U.S. Trust Company  of  Texas,
           National Association, as Trustee, with respect to  12  1/4%
           Senior  Notes  due  2006. (Filed  as  Exhibit  4.2  to  R&B
           Falcon's  Quarterly  Report on  Form  10-Q  for  the  First
           Quarter of 1999 and incorporated herein by reference.)

 4.24    - Registration  Rights Agreement dated March 26,  1999  among
           RBF  Finance  Co.,  R&B Falcon Corporation  and  Donaldson,
           Lufkin   &  Jenrette  Securities  Corporation.  (Filed   as
           Exhibit  4.3 to R&B Falcon's Quarterly Report on Form  10-Q
           for  the  First Quarter of 1999 and incorporated herein  by
           reference.)

 4.25    - Registration  Rights Agreement dated March 26,  1999  among
           R&B  Falcon  Corporation and Donaldson, Lufkin  &  Jenrette
           Securities  Corporation.  (Filed  as  Exhibit  4.4  to  R&B
           Falcon's  Quarterly  Report on  Form  10-Q  for  the  First
           Quarter of 1999 and incorporated herein by reference.)

 4.26    - Certificate of Designation of R&B Falcon Corporation  filed
           with  the  Secretary of State of the State of  Delaware  on
           April  22,  1999.   (Filed as Exhibit 4.3 to  R&B  Falcon's
           Registration  Statement No. 333-81179  on  Form  S-4  dated
           June 21, 1999 and incorporated herein by reference.)

 4.27    - Form  of  Registrant's 13-7/8% Senior Cumulative Redeemable
           Preferred  Stock Certificate. (Filed as Exhibit  4  to  R&B
           Falcon's  Quarterly  Report on  Form  10-Q  for  the  Third
           Quarter of 1999 and incorporated herein by reference.)

 4.28    - Form  of  Indenture  between  R&B  Falcon  Corporation,  as
           Issuer,  and  U.S.  Trust Company, N.A., as  Trustee,  with
           respect  to  13  7/8%  Senior Subordinated  Debentures  due
           2009.  (Filed  as Exhibit 4.1 to R&B Falcon's  Registration
           Statement  No.  333-81179 on Form S-4 dated June  21,  1999
           and incorporated herein by reference.)

 4.29    - Registration  Rights Agreement dated as of April  22,  1999
           among  R&B  Falcon  Corporation  and  Donaldson,  Lufkin  &
           Jenrette Securities Corporation. (Filed as Exhibit  4.2  to
           R&B  Falcon's Registration Statement No. 333-81179 on  Form
           S-4  dated  June  21,  1999  and  incorporated  herein   by
           reference.)

 4.30    - Warrant  Agreement, including form of Warrant  dated  April
           22,  1999 between R&B Falcon and American Stock Transfer  &
           Trust  Company.   (Filed as Exhibit  4.1  to  R&B  Falcon's
           Registration  Statement No. 333-81181  on  Form  S-3  dated
           June 21, 1999 and incorporated herein by reference.)

 9.1     - Voting  Trust  Agreement dated as  of  November  12,  1991,
           between  Lydia  Richardson  and  Linda  Webster  as  common
           stockholders  and  Steven  A. Webster  as  voting  trustee.
           (Filed as an exhibit to Falcon's Registration Statement  on
           Form  S-4,  filed on April 29, 1994, Registration  No.  33-
           78369 and incorporated herein by reference.)

 9.2     - Amendment  to Voting Trust Agreement dated as  of  November
           1,  1995. (Filed as an exhibit to Falcon's Annual Report on
           Form  10-K  for  the  year  ended  December  31,  1995  and
           incorporated herein by reference.)

 9.3     - Voting  Trust  Agreement dated as  of  November  21,  1989,
           between  Lydia  Richardson  and  Linda  Webster  as  common
           stockholders  and  Steven  A. Webster  as  voting  trustee.
           (Filed as an exhibit to Falcon's Registration Statement  on
           Form   S-1,  Amendment  No.2,  filed  on  July   6,   1995,
           Registration  No.  33-84582  and  incorporated  herein   by
           reference.)

 9.4     - Voting  Trust  Agreement dated as of May 30, 1990,  between
           Lydia  Richardson and Linda Webster as common  stockholders
           and  Steven  A.  Webster as voting trustee.  (Filed  as  an
           exhibit  to  Falcon's Registration Statement on  Form  S-1,
           Amendment No.2, filed on July 6, 1995, Registration No. 33-
           84582 and incorporated herein by reference.)

 10.1*   - Reading  &  Bates  1990  Stock  Option  Plan.   (Filed   as
           Appendix  A to R&B's Proxy Statement dated April  26,  1993
           and incorporated herein by reference.)

 10.2*   - 1992   Long-Term   Incentive  Plan  of  Reading   &   Bates
           Corporation.  (Filed as Exhibit B to R&B's Proxy  Statement
           dated   April   27,   1992  and  incorporated   herein   by
           reference.)

 10.3*   - 1995   Long-Term   Incentive  Plan  of  Reading   &   Bates
           Corporation.  (Filed  as  Exhibit  99.A  to   R&B's   Proxy
           Statement  dated March 29, 1995 and incorporated herein  by
           reference.)

 10.4*   - 1995   Director  Stock  Option  Plan  of  Reading  &  Bates
           Corporation.   (Filed  as  Exhibit  99.B  to  R&B's   Proxy
           Statement  dated March 29, 1995 and incorporated herein  by
           reference.)

 10.5*   - 1996  Director  Restricted Stock Award Plan  of  Reading  &
           Bates  Corporation. (Filed as Exhibit 99.B to  R&B's  Proxy
           Statement  dated March 28, 1997 and incorporated herein  by
           reference.)

 10.6*   - 1997   Long-Term   Incentive  Plan  of  Reading   &   Bates
           Corporation.  (Filed  as Exhibit 99.A  to  R  &  B's  Proxy
           Statement  dated March 18, 1997 and incorporated herein  by
           reference.)

 10.7*   - 1992  Stock Option Plan of Falcon. (Filed as an exhibit  to
           Falcon's  Registration  Statement on  Form  S-4,  filed  on
           April  29, 1994, Registration No. 33-78369 and incorporated
           herein by reference.)

 10.8*   - 1994  Stock Option Plan of Falcon. (Filed as an exhibit  to
           Falcon's  Annual  Report on form 10-K for  the  year  ended
           December 31, 1994 and incorporated herein by reference.)

 10.9*   - 1995  Stock Option Plan of Falcon. (Filed as an exhibit  to
           Falcon's  Annual  Report on form 10-K for  the  year  ended
           December 31, 1994 and incorporated herein by reference.)

 10.10*  - 1998  Employee  Long-Term  Incentive  Plan  of  R&B  Falcon
           Corporation. (Filed as Exhibit 99.A to the Company's  Proxy
           Statement   dated   April  23,1998  and   incorporated   by
           reference.)

 10.11*  - 1998  Director  Long-Term  Incentive  Plan  of  R&B  Falcon
           Corporation. (Filed as Exhibit 99.B to the Company's  Proxy
           Statement   dated   April  23,1998  and   incorporated   by
           reference.)

 10.12*  - Cliffs   Drilling  Company  1988  Incentive  Equity   Plan.
           (Filed  as  Exhibit  10.8 to Cliffs  Drilling  Registration
           Statement  on  Form  S-1,  Registration  No.  33-23508  and
           incorporated herein by reference.)

 10.13*  - Amendment  No. 1 dated May 17, 1990 to the Cliffs  Drilling
           Company  1988  Incentive  Equity  Plan  (Filed  as  Exhibit
           10.7.1  to Cliffs Drilling Annual Report on Form  10-K  for
           1993 and incorporated herein by reference.)

 10.14*  - Amendment  No. 2 dated May 20, 1993 to the Cliffs  Drilling
           Company  1988  Incentive  Equity  Plan  (Filed  as  Exhibit
           10.7.2  to Cliffs Drilling Annual Report on Form  10-K  for
           1993 and incorporated herein by reference.)

 10.15*  - Amendment  No. 3 dated May 22, 1996 to the Cliffs  Drilling
           Company  1988  Incentive  Equity  Plan  (Filed  as  Exhibit
           10.7.3  to Cliffs Drilling Annual Report on Form  10-K  for
           1996 and incorporated herein by reference.)

 10.16*  - Cliffs  Drilling Company 1998 Incentive Equity Plan. (Filed
           under  Cliffs Drilling Proxy Statement dated April 8,  1998
           and incorporated herein by reference.)

 10.17*  - Stock  Option  Agreement  dated  as  of  February  7,  1995
           between  A.L. Chavkin and R&B.  (Filed as Exhibit 10.40  to
           R&B's  Annual Report on Form 10-K for 1995 and incorporated
           herein by reference.)

 10.18*  - Stock  Option  Agreement  dated  as  of  February  7,  1995
           between Willem Cordia and R&B.  (Filed as Exhibit 10.41  to
           R&B's  Annual Report on Form 10-K for 1995 and incorporated
           herein by reference.)

 10.19*  - Stock  Option  Agreement  dated  as  of  February  7,  1995
           between  C.A. Donabedian and R&B.  (Filed as Exhibit  10.42
           to   R&B's  Annual  Report  on  Form  10-K  for  1995   and
           incorporated herein by reference.)

 10.20*  - Stock  Option  Agreement  dated  as  of  February  7,  1995
           between  Ted Kalborg and R&B.  (Filed as Exhibit  10.43  to
           R&B's  Annual Report on Form 10-K for 1995 and incorporated
           herein by reference.)

 10.21*  - Stock  Option  Agreement  dated  as  of  February  7,  1995
           between  J.W. McLean and R&B.  (Filed as Exhibit  10.44  to
           R&B's  Annual Report on Form 10-K for 1995 and incorporated
           herein by reference.)

 10.22*  - Stock  Option  Agreement  dated  as  of  February  7,  1995
           between  R.L.  Sandmeyer and R&B.  (Filed as Exhibit  10.45
           to   R&B's  Annual  Report  on  Form  10-K  for  1995   and
           incorporated herein by reference.)

 10.23*  - Stock  Option  Agreement  dated  as  of  February  7,  1995
           between  S.A. Webster and R&B.  (Filed as Exhibit 10.46  to
           R&B's  Annual Report on Form 10-K for 1995 and incorporated
           herein by reference.)

 10.24*  - Stock  Option Agreement dated as of April 19, 1995  between
           M.A.E. Lacqueur and R&B.  (Filed as Exhibit 10.47 to  R&B's
           Annual  Report  on  Form  10-K for  1995  and  incorporated
           herein by reference.)

 10.25*  - Stock  Option Agreement with respect to the 1995  Long-Term
           Incentive Plan dated February 6, 1996 between R&B and  Paul
           B.  Loyd,  Jr.   (Filed as Exhibit 10.48  to  R&B's  Annual
           Report  on  Form 10-K for 1995 and incorporated  herein  by
           reference.)

 10.26*  - Amendment  No.  1, dated as of December 3,  1996  to  Stock
           Option   Agreement  with  respect  to  the  1995  Long-Term
           Incentive  Plan between R&B and Paul B. Loyd,  Jr.   (Filed
           as  Exhibit 10.22 to R&B's Annual Report on Form  10-K  for
           1996 and incorporated herein by reference.)

 10.27*  - Stock  Option Agreement with respect to the 1992  Long-Term
           Incentive Plan dated February 6, 1996 between R&B and  Paul
           B.  Loyd,  Jr.   (Filed as Exhibit 10.49  to  R&B's  Annual
           Report  on  Form 10-K for 1995 and incorporated  herein  by
           reference.)

 10.28*  - Amendment  No.  1, dated as of December 3,  1996  to  Stock
           Option   Agreement  with  respect  to  the  1992  Long-Term
           Incentive  Plan between R&B and Paul B. Loyd,  Jr.   (Filed
           as  Exhibit 10.24 to R&B's Annual Report on Form  10-K  for
           1996 and incorporated herein by reference.)

 10.29*  - Employment  Agreement dated as of November 1, 1991  between
           R&B  and  T.  W.  Nagle. (Filed as Exhibit 10.35  to  R&B's
           Annual  Report  on  Form  10-K for  1991  and  incorporated
           herein by reference.)

 10.30*  - Amendment  No.  1,  dated as of October  1,  1993,  to  the
           Employment  Agreement dated as of November 1, 1991  between
           R&B  and  T.W.  Nagle.  (Filed as Exhibit  10.24  to  R&B's
           Annual  Report  on  Form  10-K for  1993  and  incorporated
           herein by reference.)

 10.31*  - Employment  Agreement  dated March  25,  1998  between  the
           Company  and Tim W. Nagle.  (Filed as Exhibit 10.9  to  R&B
           Falcon's  Quarterly  Report on  Form  10-Q  for  the  First
           Quarter of 1998 and incorporated herein by reference.)

 10.32*  - Employment  Agreement dated as of November 1, 1991  between
           R&B  and  C.  R.  Ofner. (Filed as Exhibit 10.36  to  R&B's
           Annual  Report  on  Form  10-K for  1991  and  incorporated
           herein by reference.)

 10.33*  - Amendment  No.  1,  dated as of October  1,  1993,  to  the
           Employment  Agreement dated as of November 1, 1991  between
           R&B  and  C.  R.  Ofner. (Filed as Exhibit 10.24  to  R&B's
           Annual  Report  on  Form  10-K for  1993  and  incorporated
           herein by reference.)

 10.34*  - Employment  Agreement  dated March  25,  1998  between  the
           Company  and Charles R. Ofner.  (Filed as Exhibit 10.12  to
           R&B  Falcon's Quarterly Report on Form 10-Q for  the  First
           Quarter of 1998 and incorporated herein by reference.)

 10.35*  - Employment  Agreement dated as of November 1, 1991  between
           R&B  and D. L. McIntire.  (Filed as Exhibit 10.37 to  R&B's
           Annual  Report  on  Form  10-K for  1991  and  incorporated
           herein by reference.)

 10.36*  - Amendment  No.  1,  dated as of October  1,  1993,  to  the
           Employment  Agreement dated as of November 1, 1991  between
           R&B  and D. L. McIntire.  (Filed as Exhibit 10.28 to  R&B's
           Annual  Report  on  Form  10-K for  1993  and  incorporated
           herein by reference.)

 10.37*  - Employment  Agreement dated as of November 1, 1991  between
           R&B  and  W. K. Hillin.  (Filed as Exhibit 10.38  to  R&B's
           Annual  Report  on  Form  10-K for  1991  and  incorporated
           herein by reference.)

 10.38*  - Amendment  No.  1,  dated as of October  1,  1993,  to  the
           Employment  Agreement dated as of November 1, 1991  between
           R&B  and  W. K. Hillin.  (Filed as Exhibit 10.30  to  R&B's
           Annual  Report  on  Form  10-K for  1993  and  incorporated
           herein by reference.)

 10.39*  - Employment  Agreement  dated March  25,  1998  between  the
           Company  and Wayne K. Hillin.  (Filed as Exhibit  10.10  to
           R&B  Falcon's Quarterly Report on Form 10-Q for  the  First
           Quarter of 1998 and incorporated herein by reference.)

 10.40*  - Employment  Agreement dated as of January 1,  1992  between
           R&B  and  Paul  B.  Loyd, Jr.  (Filed as Exhibit  10.42  to
           Registration  No.  33-51120  and  incorporated  herein   by
           reference.)

 10.41*  - Amendment  No.  1,  dated as of October  1,  1993,  to  the
           Employment  Agreement dated as of January 1,  1992  between
           R&B  and  Paul  B.  Loyd, Jr.  (Filed as Exhibit  10.32  to
           R&B's  Annual Report on Form 10-K for 1993 and incorporated
           herein by reference.)

 10.42*  - Employment  Agreement  dated March  25,  1998  between  the
           Company  and Paul B. Loyd, Jr.  (Filed as Exhibit  10.4  to
           R&B  Falcon's Quarterly Report on Form 10-Q for  the  First
           Quarter of 1998 and incorporated herein by reference.)

 10.43*  - Employment  Agreement  dated March  25,  1998  between  the
           Company  and Steve A. Webster.  (Filed as Exhibit  10.5  to
           R&B  Falcon's Quarterly Report on Form 10-Q for  the  First
           Quarter of 1998 and incorporated herein by reference.)

 10.44*  - Employment  Agreement  dated March  25,  1998  between  the
           Company and Andrew Bakonyi.  (Filed as Exhibit 10.6 to  R&B
           Falcon's  Quarterly  Report on  Form  10-Q  for  the  First
           Quarter of 1998 and incorporated herein by reference.)

 10.45*  - Employment  Agreement  dated March  25,  1998  between  the
           Company and Bernie Stewart.  (Filed as Exhibit 10.7 to  R&B
           Falcon's  Quarterly  Report on  Form  10-Q  for  the  First
           Quarter of 1998 and incorporated herein by reference.)

 10.46*  - Employment  Agreement  dated March  25,  1998  between  the
           Company  and Robert F. Fulton.  (Filed as Exhibit  10.8  to
           R&B  Falcon's Quarterly Report on Form 10-Q for  the  First
           Quarter of 1998 and incorporated herein by reference.)

 10.47*  - Employment  Agreement  dated March  25,  1998  between  the
           Company  and Leighton E. Moss. (Filed as Exhibit  10.11  to
           R&B  Falcon's Quarterly Report on Form 10-Q for  the  First
           Quarter of 1998 and incorporated herein by reference.)

 10.48*  - Restricted  Stock  Award Agreement dated December  5,  1995
           under  the  1995  Long-Term Incentive Plan  between  T.  W.
           Nagle  and  R&B.  (Filed as Exhibit 10.42 to  R&B's  Annual
           Report  on  Form 10-K for 1996 and incorporated  herein  by
           reference.)

 10.49*  - Restricted  Stock  Award Agreement dated December  5,  1995
           under  the  1995  Long-Term Incentive Plan  between  C.  R.
           Ofner  and  R&B.  (Filed as Exhibit 10.43 to  R&B's  Annual
           Report  on  Form 10-K for 1996 and incorporated  herein  by
           reference.)

 10.50*  - Restricted  Stock  Award Agreement dated December  5,  1995
           under  the  1995  Long-Term Incentive Plan  between  D.  L.
           McIntire and R&B.  (Filed as Exhibit 10.44 to R&B's  Annual
           Report  on  Form 10-K for 1996 and incorporated  herein  by
           reference.)

 10.51*  - Restricted  Stock  Award Agreement dated December  5,  1995
           under  the  1995  Long-Term Incentive Plan  between  W.  K.
           Hillin  and  R&B.  (Filed as Exhibit 10.45 to R&B's  Annual
           Report  on  Form 10-K for 1996 and incorporated  herein  by
           reference.)

 10.52*  - Restricted  Stock  Award Agreement dated December  3,  1996
           under  the  1996  Director  Restricted  Stock  Award   Plan
           between A. L. Chavkin and R&B.  (Filed as Exhibit 10.46  to
           R&B's  Annual Report on Form 10-K for 1996 and incorporated
           herein by reference.)

 10.53*  - Restricted  Stock  Award Agreement dated December  3,  1996
           under  the  1996  Director  Restricted  Stock  Award   Plan
           between C. A. Donabedian and R&B.  (Filed as Exhibit  10.47
           to   R&B's  Annual  Report  on  Form  10-K  for  1996   and
           incorporated herein by reference.)

 10.54*  - Restricted  Stock  Award Agreement dated December  3,  1996
           under  the  1996  Director  Restricted  Stock  Award   Plan
           between M. A. E. Laqueur and R&B.  (Filed as Exhibit  10.49
           to   R&B's  Annual  Report  on  Form  10-K  for  1996   and
           incorporated herein by reference.)

 10.55*  - Restricted  Stock  Award Agreement dated December  3,  1996
           under  the  1996  Director  Restricted  Stock  Award   Plan
           between  R. L. Sandmeyer and R&B.  (Filed as Exhibit  10.51
           to   R&B's  Annual  Report  on  Form  10-K  for  1996   and
           incorporated herein by reference.)

 10.56*  - Restricted  Stock  Award Agreement dated December  3,  1996
           under  the  1995 Long-Term Incentive Plan between  Paul  B.
           Loyd,  Jr.  and  R&B.   (Filed as Exhibit  10.52  to  R&B's
           Annual  Report  on  Form  10-K for  1996  and  incorporated
           herein by reference.)

 10.57*  - Stock  Option  Agreement dated December 3, 1996  under  the
           1995  Long-Term Incentive Plan between T. W. Nagle and R&B.
           (Filed as Exhibit 10.53 to R&B's Annual Report on Form  10-
           K for 1996 and incorporated herein by reference.)

 10.58*  - Restricted  Stock  Award Agreement dated December  3,  1996
           under  the  1995  Long-Term Incentive Plan  between  C.  R.
           Ofner  and  R&B.  (Filed as Exhibit 10.54 to  R&B's  Annual
           Report  on  Form 10-K for 1996 and incorporated  herein  by
           reference.)

 10.59*  - Restricted  Stock  Award Agreement dated December  3,  1996
           under  the  1995  Long-Term Incentive Plan  between  D.  L.
           McIntire and R&B.  (Filed as Exhibit 10.55 to R&B's  Annual
           Report  on  Form 10-K for 1996 and incorporated  herein  by
           reference.)

 10.60*  - Restricted  Stock  Award Agreement dated December  3,  1996
           under  the  1995  Long-Term Incentive Plan  between  W.  K.
           Hillin  and  R&B.  (Filed as Exhibit 10.56 to R&B's  Annual
           Report  on  Form 10-K for 1996 and incorporated  herein  by
           reference.)

 10.61*  - Stock  Option Agreement dated as of April 24, 1997  between
           R&B   and   P.B.  Loyd,  Jr.  under  R&B's  1995  Long-Term
           Incentive  Plan.  (Filed as Exhibit 10.53 to  R&B  Falcon's
           Annual  Report  on  Form  10-K for  1997  and  incorporated
           herein by reference.)

 10.62*  - Stock  Option Agreement dated as of April 24, 1997  between
           R&B  and  T. W. Nagle under R&B's 1995 Long-Term  Incentive
           Plan.  (Filed  as  Exhibit 10.54  to  R&B  Falcon's  Annual
           Report  on  Form 10-K for 1997 and incorporated  herein  by
           reference.)

 10.63*  - Stock  Option Agreement dated as of April 24, 1997  between
           R&B  and  C. R. Ofner under R&B's 1995 Long-Term  Incentive
           Plan.  (Filed  as  Exhibit 10.55  to  R&B  Falcon's  Annual
           Report  on  Form 10-K for 1997 and incorporated  herein  by
           reference.)

 10.64*  - Stock  Option Agreement dated as of April 24, 1997  between
           R&B  and D.L. McIntire under R&B's 1995 Long-Term Incentive
           Plan.  (Filed  as  Exhibit 10.56  to  R&B  Falcon's  Annual
           Report  on  Form 10-K for 1997 and incorporated  herein  by
           reference.)

 10.65*  - Stock  Option Agreement dated as of April 24, 1997  between
           R&B  and  W. K. Hillin under R&B's 1995 Long-Term Incentive
           Plan.  (Filed  as  Exhibit 10.57  to  R&B  Falcon's  Annual
           Report  on  Form 10-K for 1997 and incorporated  herein  by
           reference.)

 10.66*  - Stock  Option Agreement dated as of April 24, 1997  between
           R&B  and  W.K. Hillin under R&B's 1997 Long-Term  Incentive
           Plan.  (Filed  as  Exhibit 10.58  to  R&B  Falcon's  Annual
           Report  on  Form 10-K for 1997 and incorporated  herein  by
           reference.)

 10.67*  - Amended  and  Restated Stock Option Agreement dated  as  of
           February  16,  1995  between Falcon and Robert  F.  Fulton.
           (Filed  as  Exhibit 10.59 to R&B Falcon's Annual Report  on
           Form 10-K for 1997 and incorporated herein by reference.)

 10.68*  - Amended  and  Restated Stock Option Agreement dated  as  of
           January  23,  1996  between Falcon and Steven  A.  Webster.
           (Filed  as  Exhibit 10.60 to R&B Falcon's Annual Report  on
           Form 10-K for 1997 and incorporated herein by reference.)

 10.69*  - Stock  Option Agreement dated as of April 15, 1996  between
           Falcon  and Bernie W. Stewart. (Filed as Exhibit  10.61  to
           R&B  Falcon's  Annual  Report on Form  10-K  for  1997  and
           incorporated herein by reference.)

 10.70*  - Rescission Agreement dated August 5, 1997 between  R&B  and
           P.B.  Loyd,  Jr.  (Filed as Exhibit 10.62 to  R&B  Falcon's
           Annual  Report  on  Form  10-K for  1997  and  incorporated
           herein by reference.)

 10.71*  - Rescission Agreement dated August 5, 1997 between  R&B  and
           T.  W.  Nagle.  (Filed  as Exhibit 10.63  to  R&B  Falcon's
           Annual  Report  on  Form  10-K for  1997  and  incorporated
           herein by reference.)

 10.72*  - Rescission Agreement dated August 5, 1997 between  R&B  and
           C.  R.  Ofner.  (Filed  as Exhibit 10.64  to  R&B  Falcon's
           Annual  Report  on  Form  10-K for  1997  and  incorporated
           herein by reference.)

 10.73*  - Rescission Agreement dated August 5, 1997 between  R&B  and
           D.  L.  McIntire. (Filed as Exhibit 10.65 to  R&B  Falcon's
           Annual  Report  on  Form  10-K for  1997  and  incorporated
           herein by reference.)

 10.74*  - Rescission Agreement dated August 5, 1997 between  R&B  and
           W.  K.  Hillin.  (Filed as Exhibit 10.66  to  R&B  Falcon's
           Annual  Report  on  Form  10-K for  1997  and  incorporated
           herein by reference.)

 10.75*  - Stock Option Agreement dated February 11, 1999 between  R&B
           Falcon  Corporation and Paul B. Loyd, Jr. under R&B  Falcon
           Corporation 1998 Employee Long-Term Incentive Plan.  (Filed
           as  Exhibit 10.75 to R&B Falcon's Annual Report on Form 10-
           K for 1998 and incorporated herein by reference.)

 10.76*  - Stock Option Agreement dated February 11, 1999 between  R&B
           Falcon  Corporation and Steven A. Webster under R&B  Falcon
           Corporation 1998 Employee Long-Term Incentive Plan.  (Filed
           as  Exhibit 10.76 to R&B Falcon's Annual Report on Form 10-
           K for 1998 and incorporated herein by reference.)

 10.77*  - Stock Option Agreement dated February 11, 1999 between  R&B
           Falcon  Corporation  and  T.  W.  Nagle  under  R&B  Falcon
           Corporation 1998 Employee Long-Term Incentive Plan.  (Filed
           as  Exhibit 10.77 to R&B Falcon's Annual Report on Form 10-
           K for 1998 and incorporated herein by reference.)

 10.78*  - Stock Option Agreement dated February 11, 1999 between  R&B
           Falcon  Corporation and Robert F. Fulton under  R&B  Falcon
           Corporation 1998 Employee Long-Term Incentive Plan.  (Filed
           as  Exhibit 10.78 to R&B Falcon's Annual Report on Form 10-
           K for 1998 and incorporated herein by reference.)

 10.79*  - Stock Option Agreement dated February 11, 1999 between  R&B
           Falcon  Corporation  and Andrew Bakonyi  under  R&B  Falcon
           Corporation 1998 Employee Long-Term Incentive Plan.  (Filed
           as  Exhibit 10.79 to R&B Falcon's Annual Report on Form 10-
           K for 1998 and incorporated herein by reference.)

 10.80*  - Stock Option Agreement dated February 11, 1999 between  R&B
           Falcon  Corporation  and Bernie Stewart  under  R&B  Falcon
           Corporation 1998 Employee Long-Term Incentive Plan.  (Filed
           as  Exhibit 10.80 to R&B Falcon's Annual Report on Form 10-
           K for 1998 and incorporated herein by reference.)

 10.81*  - Stock Option Agreement dated February 11, 1999 between  R&B
           Falcon  Corporation  and  W. K.  Hillin  under  R&B  Falcon
           Corporation 1998 Employee Long-Term Incentive Plan.  (Filed
           as  Exhibit 10.81 to R&B Falcon's Annual Report on Form 10-
           K for 1998 and incorporated herein by reference.)

 10.82*  - Stock Option Agreement dated February 11, 1999 between  R&B
           Falcon   Corporation  and  L.  E.  Moss  under  R&B  Falcon
           Corporation 1998 Employee Long-Term Incentive Plan.  (Filed
           as  Exhibit 10.82 to R&B Falcon's Annual Report on Form 10-
           K for 1998 and incorporated herein by reference.)

 10.83*  - Stock Option Agreement dated February 11, 1999 between  R&B
           Falcon  Corporation  and  C.  R.  Ofner  under  R&B  Falcon
           Corporation 1998 Employee Long-Term Incentive Plan.  (Filed
           as  Exhibit 10.83 to R&B Falcon's Annual Report on Form 10-
           K for 1998 and incorporated herein by reference.)

 10.84*  - Affiliate  Agreement effective December  31,  1997  between
           R&B  and  P.  B. Loyd, Jr. (Filed as Exhibit 10.67  to  R&B
           Falcon's   Annual  Report  on  Form  10-K  for   1997   and
           incorporated herein by reference.)

 10.85*  - Affiliate  Agreement effective December  31,  1997  between
           R&B  and  A.  L. Chavkin. (Filed as Exhibit  10.68  to  R&B
           Falcon's   Annual  Report  on  Form  10-K  for   1997   and
           incorporated herein by reference.)

 10.86*  - Affiliate  Agreement effective December  31,  1997  between
           R&B  and C. A. Donabedian. (Filed as Exhibit 10.69  to  R&B
           Falcon's   Annual  Report  on  Form  10-K  for   1997   and
           incorporated herein by reference.)

 10.87*  - Affiliate  Agreement effective December  31,  1997  between
           R&B  and M. A. E. Laqueur. (Filed as Exhibit 10.70  to  R&B
           Falcon's   Annual  Report  on  Form  10-K  for   1997   and
           incorporated herein by reference.)

 10.88*  - Affiliate  Agreement effective December  31,  1997  between
           R&B  and  R. L. Sandmeyer. (Filed as Exhibit 10.71  to  R&B
           Falcon's   Annual  Report  on  Form  10-K  for   1997   and
           incorporated herein by reference.)

 10.89*  - Affiliate  Agreement effective December  31,  1997  between
           R&B  and  T.  W.  Nagle.  (Filed as Exhibit  10.72  to  R&B
           Falcon's   Annual  Report  on  Form  10-K  for   1997   and
           incorporated herein by reference.)

 10.90*  - Affiliate  Agreement effective December  31,  1997  between
           R&B  and  C.  R.  Ofner.  (Filed as Exhibit  10.73  to  R&B
           Falcon's   Annual  Report  on  Form  10-K  for   1997   and
           incorporated herein by reference.)

 10.91*  - Affiliate  Agreement effective December  31,  1997  between
           R&B  and  D.  L. McIntire. (Filed as Exhibit 10.74  to  R&B
           Falcon's   Annual  Report  on  Form  10-K  for   1997   and
           incorporated herein by reference.)

 10.92*  - Affiliate  Agreement effective December  31,  1997  between
           R&B  and  W.  K.  Hillin. (Filed as Exhibit  10.75  to  R&B
           Falcon's   Annual  Report  on  Form  10-K  for   1997   and
           incorporated herein by reference.)

 10.93*  - Affiliate  Agreement effective December  31,  1997  between
           Falcon  and Steven A. Webster. (Filed as Exhibit  10.76  to
           R&B  Falcon's  Annual  Report on Form  10-K  for  1997  and
           incorporated herein by reference.)

 10.94*  - Affiliate  Agreement effective December  31,  1997  between
           Falcon  and Bernie W. Stewart. (Filed as Exhibit  10.77  to
           R&B  Falcon's  Annual  Report on Form  10-K  for  1997  and
           incorporated herein by reference.)

 10.95*  - Affiliate  Agreement effective December  31,  1997  between
           Falcon  and  Robert F. Fulton. (Filed as Exhibit  10.78  to
           R&B  Falcon's  Annual  Report on Form  10-K  for  1997  and
           incorporated herein by reference.)

 10.96*  - Affiliate  Agreement effective December  31,  1997  between
           Falcon  and  Leighton E. Moss. (Filed as Exhibit  10.79  to
           R&B  Falcon's  Annual  Report on Form  10-K  for  1997  and
           incorporated herein by reference.)

 10.97*  - Affiliate  Agreement effective December  31,  1997  between
           Falcon   and   Rodney   W.   Meisetschlaeger.   (Filed   as
           Exhibit  10.80 to R&B Falcon's Annual Report on  Form  10-K
           for 1997 and incorporated herein by reference.)

 10.98*  - Affiliate  Agreement effective December  31,  1997  between
           Falcon  and  Steven R. Meheen. (Filed as Exhibit  10.81  to
           R&B  Falcon's  Annual  Report on Form  10-K  for  1997  and
           incorporated herein by reference.)

 10.99*  - Affiliate  Agreement effective December  31,  1997  between
           Falcon  and Douglas A.P. Hamilton. (Filed as Exhibit  10.82
           to  R&B  Falcon's Annual Report on Form 10-K for  1997  and
           incorporated herein by reference.)

 10.100* - Affiliate  Agreement effective December  31,  1997  between
           Falcon  and Michael Porter. (Filed as Exhibit 10.83 to  R&B
           Falcon's   Annual  Report  on  Form  10-K  for   1997   and
           incorporated herein by reference.)

 10.101* - Affiliate  Agreement effective December  31,  1997  between
           Falcon  and William R. Ziegler. (Filed as Exhibit 10.84  to
           R&B  Falcon's  Annual  Report on Form  10-K  for  1997  and
           incorporated herein by reference.)

 10.102* - Affiliate  Agreement effective December  31,  1997  between
           Falcon  and Don P. Rodney. (Filed as Exhibit 10.85  to  R&B
           Falcon's   Annual  Report  on  Form  10-K  for   1997   and
           incorporated herein by reference.)

 10.103  - Reading  &  Bates Stock Option Agreement dated as  of  July
           10,  1997 between R&B and Falcon.  (Filed as Annex E to R&B
           Falcon's  Registration Statement on Form S-4 dated November
           20, 1997 and incorporated herein by reference.)

 10.104  - Falcon  Stock  Option Agreement dated as of July  10,  1997
           between  Falcon and R&B.  (Filed as Annex D to R&B Falcon's
           Registration Statement on Form S-4 dated November 20,  1997
           and incorporate herein by reference.)

 10.105  - Agreement  dated  as of August 31, 1991 among  R&B,  Arcade
           Shipping  AS  and Sonat Offshore Drilling Inc.   (Filed  as
           Exhibit 10.40 to R&B's Annual Report on Form 10-K for  1991
           and incorporated herein by reference.)

 10.106  - Facility  Agreement dated February 21, 1991 between  Arcade
           Drilling  AS,  Chase  Investment Bank  Limited,  The  Chase
           Manhattan  Bank, N.A. and others.  (Filed as Exhibit  10.51
           to  Registration  No. 33-51120 and incorporated  herein  by
           reference.)

 10.107  - Amendment  Agreement dated November 30,  1995  to  Facility
           Agreement  dated February 21, 1991 between Arcade  Drilling
           AS,  Chase  Investment Bank Limited,  The  Chase  Manhattan
           Bank,  N.A. and others.  (Filed as Exhibit 10.71  to  R&B's
           Annual  Report  on  Form  10-K for  1995  and  incorporated
           herein by reference.)

 10.108  - Second  Amendment  Agreement dated  October,  1996  between
           Arcade  Drilling  AS, Chase Investment  Bank  Limited,  The
           Chase  Manhattan Bank, N.A. and others.  (Filed as  Exhibit
           10.60  to  R&B's Annual Report on Form 10-K  for  1996  and
           incorporated herein by reference.)

 10.109  - Agreement  for  the  sale and purchase of  Semi-Submersible
           Emergency  Support  Vessel Iolair dated September  8,  1995
           between  BP  Exploration  Operating  Company  Limited   and
           Reading  & Bates (Caledonia) Limited, a subsidiary of  R&B.
           (Filed  as Exhibit 10.3 to R&B's Quarterly Report  on  Form
           10-Q  for the Third Quarter of 1995 and incorporated herein
           by reference.)

 10.110  - Mortgage of a Ship dated September 8, 1995 between  Reading
           &  Bates (Caledonia) Limited, a subsidiary of R&B,  and  BP
           Exploration Operating Company Limited.  (Filed  as  Exhibit
           10.4  to R&B's Quarterly Report on Form 10-Q for the  Third
           Quarter of 1995 and incorporated herein by reference.)

 10.111  - Mortgage of a Ship dated September 8, 1995 between  Reading
           &  Bates  (Caledonia)  Limited, a subsidiary  of  R&B,  and
           Britoil  plc.   (Filed as Exhibit 10.5 to  R&B's  Quarterly
           Report  on  Form  10-Q for the Third Quarter  of  1995  and
           incorporated herein by reference.)

 10.112  - Deed of Covenant dated September 8, 1995 between Reading  &
           Bates  (Caledonia) Limited, a subsidiary  of  R&B,  and  BP
           Exploration Operating Company Limited.  (Filed  as  Exhibit
           10.6  to R&B's Quarterly Report on Form 10-Q for the  Third
           Quarter of 1995 and incorporated herein by reference.)

 10.113  - Deed of Covenant dated September 8, 1995 between Reading  &
           Bates  (Caledonia)  Limited,  a  subsidiary  of  R&B,   and
           Britoil Public Limited Company.  (Filed as Exhibit 10.7  to
           R&B's  Quarterly Report on Form 10-Q for the Third  Quarter
           of 1995 and incorporated herein by reference.)

 10.114  - Performance  Guarantee dated September 8, 1995  by  R&B  in
           favour   of  BP  Exploration  Operating  Company   Limited.
           (Filed  as Exhibit 10.8 to R&B's Quarterly Report  on  Form
           10-Q  for the Third Quarter of 1995 and incorporated herein
           by reference.)

 10.115  - Performance  Guarantee dated September 8, 1995  by  R&B  in
           favour  of  Britoil plc.  (Filed as Exhibit 10.9  to  R&B's
           Quarterly  Report  on Form 10-Q for the  Third  Quarter  of
           1995 and incorporated herein by reference.)

 10.116  - Initial  Services Agreement dated September 8, 1995 between
           Britoil   Public  Limited  Company  and  Reading  &   Bates
           (Caledonia)  Limited,  a  subsidiary  of  R&B.   (Filed  as
           Exhibit  10.10 to R&B's Quarterly Report on Form  10-Q  for
           the  Third  Quarter  of  1995 and  incorporated  herein  by
           reference.)

 10.117  - Heads  of  Agreement for the provision of  Vessel  Services
           dated  September  8,  1995 between Britoil  Public  Limited
           Company,  Reading & Bates (Caledonia) Limited, a subsidiary
           of  R&B,  and  R&B.   (Filed  as  Exhibit  10.11  to  R&B's
           Quarterly  Report  on Form 10-Q for the  Third  Quarter  of
           1995 and incorporated herein by reference.)

 10.118  - Credit  Agreement  dated as of April 30,  1996  among  R&B,
           Reading  & Bates Drilling Co., certain lending institutions
           named  therein,  Credit Lyonnais New York  Branch,  as  co-
           agent,  and  Christiana  Bank  og  Kreditkasse,  New   York
           Branch, as agent.  (Filed as Exhibit 10.85 to R&B's  Annual
           Report  on  Form 10-K for 1996 and incorporated  herein  by
           reference.)

 10.119 -  Security  Agreement  dated  as  of  April  30,  1996  among
           Reading  &  Bates Drilling Co., Reading & Bates Exploration
           Co.,  Reading  &  Bates (A) Pty. Ltd.,  Reading  and  Bates
           Borneo   Drilling   Co.,  Ltd,  and  Christiana   Bank   og
           Kreditkasse, New York Branch, as collateral agent.   (Filed
           as  Exhibit 10.86 to R&B's Annual Report on Form  10-K  for
           1996 and incorporated herein by reference.)

 10.120  - Subsidiary  Guaranty dated as of April 30, 1996 by  Reading
           &  Bates  Exploration Co., Reading & Bates (A)  Pty.  Ltd.,
           and Reading and Bates Borneo Drilling Co., Ltd.  (Filed  as
           Exhibit 10.87 to R&B's Annual Report on Form 10-K for  1996
           and incorporated herein by reference.)

 10.121  - First  Preferred Mortgage on the D. R. Stewart dated  April
           30,  1996 between Reading & Bates Exploration Co. in  favor
           of   Wilmington  Trust  Company,  as  trustee.   (Filed  as
           Exhibit 10.88 to R&B's Annual Report on Form 10-K for  1996
           and incorporated herein by reference.)

 10.122  - First Preferred Mortgage on the Jack Bates dated April  30,
           1996  between  Reading & Bates Drilling  Co.  in  favor  of
           Wilmington  Trust Company, as trustee.  (Filed  as  Exhibit
           10.89  to  R&B's Annual Report on Form 10-K  for  1996  and
           incorporated herein by reference.)

 10.123  - First Preferred Mortgage on the W. D. Kent dated April  30,
           1996  between Reading & Bates Exploration Co. in  favor  of
           Wilmington  Trust Company, as trustee.  (Filed  as  Exhibit
           10.90  to  R&B's Annual Report on Form 10-K  for  1996  and
           incorporated herein by reference.)

 10.124  - Indenture  of  First Naval Mortgage on the  Charley  Graves
           dated  April  30,  1996 between Reading  and  Bates  Borneo
           Drilling  Co. Ltd. and Christiana Bank og Kreditkasse,  New
           York  Branch,  as  mortgagee.  (Filed as Exhibit  10.91  to
           R&B's  Annual Report on Form 10-K for 1996 and incorporated
           herein by reference.)

 10.125  - First  Priority Mortgage on the Ron Tappmeyer  dated  April
           30,  1996  between  Reading  &  Bates  (A)  Pty.  Ltd.  and
           Christiana  Bank  og  Kreditkasse,  New  York  Branch,   as
           mortgagee.  (Filed as Exhibit 10.92 to R&B's Annual  Report
           on   Form   10-K  for  1996  and  incorporated  herein   by
           reference.)

 10.126  - Deed  of Covenant on the J. W. McLean dated April 30,  1996
           between  Reading  & Bates Drilling Co. and Christiana  Bank
           og  Kreditkasse, New York Branch, as mortgagee.  (Filed  as
           Exhibit 10.93 to R&B's Annual Report on Form 10-K for  1996
           and incorporated herein by reference.)

 10.127  - Indenture  of  Trust  dated as  of  April  30,  1996  among
           Reading  &  Bates Drilling Co., Reading & Bates Exploration
           Co.,  and Wilmington Trust Company, as trustee.  (Filed  as
           Exhibit 10.94 to R&B's Annual Report on Form 10-K for  1996
           and incorporated herein by reference.)

 10.128  - Collateral  Assignment of Insurance dated  April  30,  1996
           with  respect  to  the Jack Bates between Reading  &  Bates
           Drilling  Co.  and  Wilmington Trust Company,  as  trustee.
           (Filed as Exhibit 10.95 to R&B's Annual Report on Form  10-
           K for 1996 and incorporated herein by reference.)

 10.129  - Collateral  Assignment of Insurance dated  April  30,  1996
           with  respect to the D. R. Stewart between Reading &  Bates
           Exploration  Co. and Wilmington Trust Company, as  trustee.
           (Filed as Exhibit 10.96 to R&B's Annual Report on Form  10-
           K for 1996 and incorporated herein by reference.)

 10.130  - Collateral  Assignment of Insurance dated  April  30,  1996
           with  respect  to  the W. D. Kent between Reading  &  Bates
           Exploration  Co. and Wilmington Trust Company, as  trustee.
           (Filed as Exhibit 10.97 to R&B's Annual Report on Form  10-
           K for 1996 and incorporated herein by reference.)

 10.131  - Collateral  Assignment of Insurance dated  April  30,  1996
           with  respect  to  the Charley Graves between  Reading  and
           Bates  Borneo  Drilling Co., Ltd. and  Christiana  Bank  og
           Kreditkasse, New York Branch, as agent.  (Filed as  Exhibit
           10.98  to  R&B's Annual Report on Form 10-K  for  1996  and
           incorporated herein by reference.)

 10.132  - Collateral  Assignment of Insurance dated  April  30,  1996
           with  respect  to  the  Ron Tappmeyer between  Reading  and
           Bates  (A)  Pty.  Ltd. and Christiana Bank og  Kreditkasse,
           New  York  Branch,  as agent.  (Filed as Exhibit  10.99  to
           R&B's  Annual Report on Form 10-K for 1996 and incorporated
           herein by reference.)

 10.133  - Collateral  Assignment of Insurance dated  April  30,  1996
           with  respect to the J. W. McLean between Reading and Bates
           Borneo   Drilling   Co.,  Ltd.  and  Christiana   Bank   og
           Kreditkasse, New York Branch, as agent.  (Filed as  Exhibit
           10.100  to  R&B's Annual Report on Form 10-K for  1996  and
           incorporated herein by reference.)

 10.134  - First  Amendment  dated  as  of  July  9,  1996  to  Credit
           Agreement  dated as of April 30, 1996 among R&B, Reading  &
           Bates  Drilling  Co.,  certain lending  institutions  named
           therein, Credit Lyonnais New York Branch, as co-agent,  and
           Christiana Bank og Kreditkasse, New York Branch, as  agent.
           (Filed as Exhibit 10.101 to R&B's Annual Report on Form 10-
           K for 1996 and incorporated herein by reference.)

 10.135  - Subsidiary  Assumption Agreement dated as of July  9,  1996
           by  RB  Drilling  Co. and HRB Rig Corporation.   (Filed  as
           Exhibit  10.102  to R&B's Annual Report on  Form  10-K  for
           1996 and incorporated herein by reference.)

 10.136  - Indenture  of  First Naval Mortgage on  the  J.  W.  McLean
           dated  July  9,  1996 by Reading & Bates  Drilling  Co.  in
           favor  of Christiana Bank og Kreditkasse, New York  Branch,
           as  mortgagee.   (Filed as Exhibit 10.103 to  R&B's  Annual
           Report  on  Form 10-K for 1996 and incorporated  herein  by
           reference.)

 10.137  - First  Preferred Mortgage on the Harvey H. Ward dated  July
           9,  1996  by  HRB  Rig Corporation in favor  of  Wilmington
           Trust  Company,  as trustee.  (Filed as Exhibit  10.104  to
           R&B's  Annual Report on Form 10-K for 1996 and incorporated
           herein by reference.)

 10.138  - Amendment  No.  1 to Indenture of First Naval  Mortgage  on
           the  Charley Graves dated July 9, 1996 by Reading and Bates
           Borneo  Drilling Co., Ltd. in favor of Christiana  Bank  og
           Kreditkasse,  New  York Branch, as  mortgagee.   (Filed  as
           Exhibit  10.105  to R&B's Annual Report on  Form  10-K  for
           1996 and incorporated herein by reference.)

 10.139  - Amendment  to  First Preferred Mortgage on the  Jack  Bates
           dated  July  9,  1996 by Reading & Bates  Drilling  Co.  in
           favor  of Wilmington Trust Company, as trustee.  (Filed  as
           Exhibit  10.106  to R&B's Annual Report on  Form  10-K  for
           1996 and incorporated herein by reference.)

 10.140  - Amendment to First Preferred Mortgage on the D. R.  Stewart
           dated  July 9, 1996 by Reading & Bates Exploration  Co.  in
           favor  of  Wilmington Trust Company, as trustee. (Filed  as
           Exhibit  10.107  to R&B's Annual Report on  Form  10-K  for
           1996 and incorporated herein by reference.)

 10.141  - Amendment  to First Preferred Mortgage on the  W.  D.  Kent
           dated  July 9, 1996 by Reading & Bates Exploration  Co.  in
           favor  of  Wilmington Trust Company, as trustee. (Filed  as
           Exhibit  10.108  to R&B's Annual Report on  Form  10-K  for
           1996 and incorporated herein by reference.)

 10.142  - Collateral Assignment of Insurance dated July 9, 1996  with
           respect  to  the Harvey H. Ward between HRB Rig Corporation
           and  Wilmington  Trust  Company,  as  trustee.  (Filed   as
           Exhibit  10.109  to R&B's Annual Report on  Form  10-K  for
           1996 and incorporated herein by reference.)

 10.143  - Collateral Assignment of Insurance dated July 9, 1996  with
           respect  to  the  Rig  41  between  RB  Drilling  Co.   and
           Christiana Bank og Kreditkasse, New York Branch, as  agent.
           (Filed as Exhibit 10.110 to R&B's Annual Report on Form 10-
           K for 1996 and incorporated herein by reference.)

 10.144  - Amended  and Restated Indenture of Trust dated as  of  July
           9,  1996  among  Reading & Bates Drilling  Co.,  Reading  &
           Bates  Exploration Co., HRB Rig Corporation and  Wilmington
           Trust  Company,  as  trustee. (Filed as Exhibit  10.111  to
           R&B's  Annual Report on Form 10-K for 1996 and incorporated
           herein by reference.)

 10.145  - Second  Amendment  dated as of August 30,  1996  to  Credit
           Agreement  dated as of April 30, 1996 among R&B, Reading  &
           Bates  Drilling  Co.,  certain lending  institutions  named
           therein, Credit Lyonnais New York Branch, as co-agent,  and
           Christiana Bank og Kreditkasse, New York Branch, as  agent.
           (Filed as Exhibit 10.112 to R&B's Annual Report on Form 10-
           K for 1996 and incorporated herein by reference.)

 10.146  - Subsidiary  Assumption Agreement dated  as  of  August  30,
           1996  by  Reading & Bates Development Co. (Filed as Exhibit
           10.113  to  R&B's Annual Report on Form 10-K for  1996  and
           incorporated herein by reference.)

 10.147  - Subsidiary Guaranty dated as of August 30, 1996 by  Reading
           &  Bates Development Co. (Filed as Exhibit 10.114 to  R&B's
           Annual  Report  on  Form  10-K for  1996  and  incorporated
           herein by reference.)

 10.148  - Indenture of First Naval Mortgage on Seillean dated  August
           30,  1996  by Reading & Bates Development Co. in  favor  of
           Christiana  Bank  og  Kreditkasse,  New  York  Branch,   as
           mortgagee. (Filed as Exhibit 10.115 to R&B's Annual  Report
           on   Form   10-K  for  1996  and  incorporated  herein   by
           reference.)

 10.149  - Collateral  Assignment of Insurance dated August  30,  1996
           with  respect  to  the  Seillean between  Reading  &  Bates
           Development  Co.  and Christiana Bank og  Kreditkasse,  New
           York  Branch, as agent. (Filed as Exhibit 10.116  to  R&B's
           Annual  Report  on  Form  10-K for  1996  and  incorporated
           herein by reference.)

 10.150  - Credit  Agreement dated as of November 13, 1996 among  R&B,
           Reading  & Bates Drilling Co., certain lending institutions
           named  therein,  Banque Indosuez, as  documentation  agent,
           Credit  Lyonnais  New York Branch, as documentation  agent,
           and  Christiana  Bank og Kreditkasse, New York  Branch,  as
           administrative   agent,  arranger  and  security   trustee.
           (Filed as Exhibit 10.117 to R&B's Annual Report on Form 10-
           K for 1996 and incorporated herein by reference.)

 10.151  - Security  Agreement  dated as of November  13,  1996  among
           Reading  &  Bates Drilling Co., Reading & Bates Exploration
           Co.,   Reading   &   Bates  Offshore,  Limited,   HRB   Rig
           Corporation,  Reading & Bates (A) Pty.  Ltd.,  Reading  and
           Bates  Borneo  Drilling Co., Ltd, and  Christiana  Bank  og
           Kreditkasse,  New York Branch, as collateral agent.  (Filed
           as  Exhibit 10.118 to R&B's Annual Report on Form 10-K  for
           1996 and incorporated herein by reference.)

 10.152  - Subsidiary  Guaranty  dated as  of  November  13,  1996  by
           Reading  & Bates Exploration Co., Reading & Bates (A)  Pty.
           Ltd.,  Reading and Bates Borneo Drilling Co., Ltd., Reading
           &  Bates Offshore, Limited and HRB Rig Corporation.  (Filed
           as  Exhibit 10.119 to R&B's Annual Report on Form 10-K  for
           1996 and incorporated herein by reference.)

 10.153  - First  Preferred  Mortgage  on  the  D.  R.  Stewart  dated
           November  13, 1996 between Reading & Bates Exploration  Co.
           in  favor  of  Christiana  Bank og  Kreditkasse,  New  York
           Branch,  as security trustee. (Filed as Exhibit  10.120  to
           R&B's  Annual Report on Form 10-K for 1996 and incorporated
           herein by reference.)

 10.154  - First  Preferred Mortgage on the Jack Bates dated  November
           13,  1996 between Reading & Bates Drilling Co. in favor  of
           Christiana  Bank  og  Kreditkasse,  New  York  Branch,   as
           security trustee. (Filed as Exhibit 10.121 to R&B's  Annual
           Report  on  Form 10-K for 1996 and incorporated  herein  by
           reference.)

 10.155  - First  Preferred Mortgage on the W. D. Kent dated  November
           13,  1996 between Reading & Bates Exploration Co. in  favor
           of  Christiana  Bank og Kreditkasse, as  security  trustee.
           (Filed as Exhibit 10.122 to R&B's Annual Report on Form 10-
           K for 1996 and incorporated herein by reference.)

 10.156  - First   Preferred  Mortgage  on  the  Randolph  Yost  dated
           November 13, 1996 between Reading & Bates Drilling  Co.  in
           favor  of  Christiana  Bank  og  Kreditkasse,  as  security
           trustee.  (Filed as Exhibit 10.123 to R&B's  Annual  Report
           on   Form   10-K  for  1996  and  incorporated  herein   by
           reference.)

 10.157  - First  Preferred Mortgage on the George H.  Galloway  dated
           November   13,  1996  between  Reading  &  Bates  Offshore,
           Limited  in  favor  of Christiana Bank og  Kreditkasse,  as
           security trustee. (Filed as Exhibit 10.124 to R&B's  Annual
           Report  on  Form 10-K for 1996 and incorporated  herein  by
           reference.)

 10.158  - First  Preferred  Mortgage on the F.  G.  McClintock  dated
           November   13,  1996  between  Reading  &  Bates  Offshore,
           Limited  in  favor  of Christiana Bank og  Kreditkasse,  as
           security trustee. (Filed as Exhibit 10.125 to R&B's  Annual
           Report  on  Form 10-K for 1996 and incorporated  herein  by
           reference.)

 10.159  - First  Preferred Mortgage on the J. T. Angel dated November
           13,  1996 between Reading & Bates Drilling Co. in favor  of
           Christiana  Bank  og  Kreditkasse,  as  security   trustee.
           (Filed as Exhibit 10.126 to R&B's Annual Report on Form 10-
           K for 1996 and incorporated herein by reference.)

 10.160  - First  Preferred  Mortgage on the  Roger  W.  Mowell  dated
           November 13, 1996 between Reading & Bates Drilling  Co.  in
           favor  of  Christiana  Bank  og  Kreditkasse,  as  security
           trustee.  (Filed as Exhibit 10.127 to R&B's  Annual  Report
           on   Form   10-K  for  1996  and  incorporated  herein   by
           reference.)

 10.161  - First  Preferred  Mortgage  on the  Harvey  H.  Ward  dated
           November  13, 1996 between HRB Rig Corporation in favor  of
           Christiana  Bank  og  Kreditkasse,  as  security   trustee.
           (Filed as Exhibit 10.128 to R&B's Annual Report on Form 10-
           K for 1996 and incorporated herein by reference.)

 10.162  - Indenture  of  First Naval Mortgage on the  Charley  Graves
           dated  November 13, 1996 between Reading and  Bates  Borneo
           Drilling  Co. Ltd. and Christiana Bank og Kreditkasse,  New
           York  Branch,  as  mortgagee. (Filed as Exhibit  10.129  to
           R&B's  Annual Report on Form 10-K for 1996 and incorporated
           herein by reference.)

 10.163  - Indenture  of  First Naval Mortgage on  the  J.  W.  McLean
           dated  November  13, 1996 between Reading & Bates  Drilling
           Co.  and  Christiana Bank og Kreditkasse, New York  Branch,
           as  mortgagee.  (Filed as Exhibit 10.130  to  R&B's  Annual
           Report  on  Form 10-K for 1996 and incorporated  herein  by
           reference.)

 10.164  - Indenture  of  First Naval Mortgage on  the  Rig  41  dated
           November   13,  1996  between  Reading  and  Bates   Borneo
           Drilling  Co. Ltd. and Christiana Bank og Kreditkasse,  New
           York  Branch,  as  mortgagee. (Filed as Exhibit  10.131  to
           R&B's  Annual Report on Form 10-K for 1996 and incorporated
           herein by reference.)

 10.165  - First   Priority  Mortgage  on  the  Ron  Tappmeyer   dated
           November  13,  1996 between Reading & Bates (A)  Pty.  Ltd.
           and  Christiana  Bank og Kreditkasse, New York  Branch,  as
           mortgagee. (Filed as Exhibit 10.132 to R&B's Annual  Report
           on   Form   10-K  for  1996  and  incorporated  herein   by
           reference.)

 10.166  - Pledge Agreement dated as of November 13, 1996 between  R&B
           and  Christiana  Bank og Kreditkasse, New York  Branch,  as
           collateral agent. (Filed as Exhibit 10.133 to R&B's  Annual
           Report  on  Form 10-K for 1996 and incorporated  herein  by
           reference.)

 10.167  - Amended  and Restated Credit Agreement dated as of November
           13,  1996 and amended and restated as of July 3, 1997 among
           R&B,   Reading  &  Bates  Drilling  Co.,  certain   lending
           institutions  named therein, Credit Agricole  Indosuez,  as
           documentation  agent, Credit Lyonnais New York  Branch,  as
           documentation  agent, and Christiana Bank  og  Kreditkasse,
           New  York  Branch,  as administrative agent,  arranger  and
           security  trustee. (Filed as Exhibit 10.150 to R&B Falcon's
           Annual  Report  on  Form  10-K for  1997  and  incorporated
           herein by reference.)

 10.168  - Letter  of Credit Agreement dated as of December  30,  1996
           between  R&B, Reading & Bates Drilling Co., and  Christiana
           Bank  og  Kreditkasse, New York Branch. (Filed  as  Exhibit
           10.134  to  R&B's Annual Report on Form 10-K for  1996  and
           incorporated herein by reference.)

 10.169  - 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. (Filed as Exhibit 10.3 to R&B Falcon's Quarterly
           Report  on  Form 10-Q for the Second Quarter  of  1998  and
           incorporated herein by reference.)

 10.170  - Second  Amendment  to  Letter of  Credit  Agreement,  dated
           October 22, 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. (Filed as Exhibit 10.170 to R&B Falcon's  Annual
           Report  on  Form 10-K for 1998 and incorporated  herein  by
           reference.)

 10.171  - Third  Amendment  to  Letter  of  Credit  Agreement,  dated
           October 22, 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. (Filed as Exhibit 10.171 to R&B Falcon's  Annual
           Report  on  Form 10-K for 1998 and incorporated  herein  by
           reference.)

 10.172  - Fourth  Amendment  to  Letter of  Credit  Agreement,  dated
           January 21, 1999, 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. (Filed as Exhibit 10.172 to R&B Falcon's  Annual
           Report  on  Form 10-K for 1998 and incorporated  herein  by
           reference.)

 10.173  - Fifth  Amendment  to  Letter  of  Credit  Agreement,  dated
           February  22,  1999,  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.  (Filed  as  Exhibit  10.173  to   R&B
           Falcon's   Annual  Report  on  Form  10-K  for   1998   and
           incorporated herein by reference.)

 10.174  - Memorandum  of  Agreement dated November 28,  1995  between
           Reading and Bates, Inc., a subsidiary of R&B, and Deep  Sea
           Investors,  L.L.C.    (Filed as  Exhibit  10.110  to  R&B's
           Annual  Report  on  Form  10-K for  1995  and  incorporated
           herein by reference.)

 10.175  - Bareboat  Charter M. G. Hulme, Jr. dated November 28,  1995
           between  Deep  Sea Investors, L.L.C. and  Reading  &  Bates
           Drilling  Co.,  a  subsidiary of R&B.   (Filed  as  Exhibit
           10.111  to  R&B's Annual Report on Form 10-K for  1995  and
           incorporated herein by reference.)

 10.176  - Amended  and Restated Bareboat Charter dated July 23,  1997
           to  Bareboat  Charter M. G. Hulme, Jr. dated  November  28,
           1995  between  Deep  Sea Investors, L.L.C.  and  Reading  &
           Bates  Drilling  Co.,  a  subsidiary  of  R&B.  (Filed   as
           Exhibit  10.176 to R&B Falcon's Annual Report on Form  10-K
           for 1998 and incorporated herein by reference.)

 10.177  - Amended  and Restated Bareboat Charter dated July  1,  1998
           to  Bareboat  Charter M. G. Hulme, Jr. dated  November  28,
           1995  between  Deep  Sea Investors, L.L.C.  and  Reading  &
           Bates  Drilling  Co.,  a  subsidiary  of  R&B.  (Filed   as
           Exhibit  10.177 to R&B Falcon's Annual Report on Form  10-K
           for 1998 and incorporated herein by reference.)

 10.178  - Purchase and Sale Agreement dated October 18, 1995  between
           Enserch  Exploration, Inc. and Reading & Bates  Development
           Co.,  a  subsidiary of R&B.   (Filed as Exhibit  10.112  to
           R&B's  Annual Report on Form 10-K for 1995 and incorporated
           herein by reference.)

 10.179  - Operating Agreement made effective as of May 1, 1995  among
           Enserch  Exploration,  Inc., Mobil Oil  Corporation,  Mobil
           Oil  exploration & Producing Southeast Inc. and  Reading  &
           Bates  Development Co., a subsidiary of  R&B.    (Filed  as
           Exhibit  10.125  to R&B's Annual Report on  Form  10-K  for
           1995 and incorporated herein by reference.)

 10.180  - Participation  Agreement  dated December  4,  1996  between
           Santa  Fe  Energy  Resources,  Inc.  and  Reading  &  Bates
           Development  Co. (Filed as Exhibit 10.152 to  R&B's  Annual
           Report  on  Form 10-K for 1996 and incorporated  herein  by
           reference.)

 10.181  - Joint  Venture  Agreement  dated December  16,  1996  among
           Shell  Deepwater  Development Inc., SOI  Finance  Inc.  and
           Reading  &  Bates Development Co. (Filed as Exhibit  10.161
           to   R&B's  Annual  Report  on  Form  10-K  for  1996   and
           incorporated herein by reference.)

 10.182  - Limited Liability Company Agreement dated October 28,  1996
           between   Conoco  Development  Company  and  RB   Deepwater
           Exploration  Inc. (Filed as Exhibit 10.162 to R&B's  Annual
           Report  on  Form 10-K for 1996 and incorporated  herein  by
           reference.)

 10.183  - Amendment   No.  1  dated  February  7,  1997  to   Limited
           Liability Company Agreement dated October 28, 1996  between
           Conoco  Development  Company and RB  Deepwater  Exploration
           Inc.  (Filed  as  Exhibit  10.183 to  R&B  Falcon's  Annual
           Report  on  Form 10-K for 1998 and incorporated  herein  by
           reference.)

 10.184  - Amendment  No. 2 dated April 30, 1997 to Limited  Liability
           Company  Agreement  dated October 28, 1996  between  Conoco
           Development  Company  and  RB  Deepwater  Exploration  Inc.
           (Filed  as Exhibit 10.184 to R&B Falcon's Annual Report  on
           Form 10-K for 1998 and incorporated herein by reference.)

 10.185  - Amendment  No. 3 dated April 24, 1998 to Limited  Liability
           Company  Agreement  dated October 28, 1996  between  Conoco
           Development  Company  and  RB  Deepwater  Exploration  Inc.
           (Filed  as Exhibit 10.185 to R&B Falcon's Annual Report  on
           Form 10-K for 1998 and incorporated herein by reference.)

 10.186  - Amendment  No. 4 dated August 7, 1998 to Limited  Liability
           Company  Agreement  dated October 28, 1996  between  Conoco
           Development  Company  and  RB  Deepwater  Exploration  Inc.
           (Filed  as Exhibit 10.186 to R&B Falcon's Annual Report  on
           Form 10-K for 1998 and incorporated herein by reference.)

 10.187  - Limited  Liability Company Agreement dated April  30,  1997
           between   Conoco  Development  II  Inc.  and  RB  Deepwater
           Exploration  II  Inc.  (Filed  as  Exhibit  10.159  to  R&B
           Falcon's   Annual  Report  on  Form  10-K  for   1997   and
           incorporated herein by reference.)

 10.188  - Amendment  No. 1 dated April 24, 1998 to Limited  Liability
           Company  Agreement  dated  April 30,  1997  between  Conoco
           Development  II Inc. and RB Deepwater Exploration  II  Inc.
           (Filed  as Exhibit 10.188 to R&B Falcon's Annual Report  on
           Form 10-K for 1998 and incorporated herein by reference.)

 10.189  - Joint  Venture  Agreement dated February 22,  1996  between
           INTEC  Engineering,  Inc. and Reading &  Bates  Development
           Co.  (Filed  as  Exhibit 10.163 to R&B's Annual  Report  on
           Form 10-K for 1996 and incorporated herein by reference.)

 10.190  - Loan  Agreement  dated as of December 14,  1996  among  TRB
           Holding  Corporation, Reading & Bates  (U.K.)  Limited  and
           Nissho  Iwai Europe PLC. (Filed as Exhibit 10.164 to  R&B's
           Annual  Report  on  Form  10-K for  1996  and  incorporated
           herein by reference.)

 10.191  - First  Amendment  dated April 21, 1997  to  Loan  Agreement
           dated   as   of   December  14,  1996  among  TRB   Holding
           Corporation,  Reading  & Bates (U.K.)  Limited  and  Nissho
           Iwai  Europe PLC. (Filed as Exhibit 10.191 to R&B  Falcon's
           Annual  Report  on  Form  10-K for  1998  and  incorporated
           herein by reference.)

 10.192  - First  Naval  Mortgage on the Seillean dated  December  14,
           1996  between  TRB Holding Corporation in favor  of  Nissho
           Iwai  Europe PLC. (Filed as Exhibit 10.165 to R&B's  Annual
           Report  on  Form 10-K for 1996 and incorporated  herein  by
           reference.)

 10.193  - First  Amendment  dated  April  21,  1997  to  First  Naval
           Mortgage  on  the Seillean dated December 14, 1996  between
           TRB  Holding  Corporation in favor of  Nissho  Iwai  Europe
           PLC.  (Filed  as  Exhibit  10.193 to  R&B  Falcon's  Annual
           Report  on  Form 10-K for 1998 and incorporated  herein  by
           reference.)

 10.194  - Second  Amendment  dated  April 25,  1997  to  First  Naval
           Mortgage  on  the Seillean dated December 14, 1996  between
           TRB  Holding  Corporation in favor of  Nissho  Iwai  Europe
           PLC.  (Filed  as  Exhibit  10.194 to  R&B  Falcon's  Annual
           Report  on  Form 10-K for 1998 and incorporated  herein  by
           reference.)

 10.195  - Collateral  Assignment  of  Deposit  Account,  Pledge   and
           Security Agreement dated December 14, 1996 with respect  to
           the  Seillean  between TRB Holding Corporation  and  Nissho
           Iwai  Europe PLC. (Filed as Exhibit 10.166 to R&B's  Annual
           Report  on  Form 10-K for 1996 and incorporated  herein  by
           reference.)

 10.196  - Assignment  of  Insurances dated  December  14,  1996  with
           respect  to  the  Seillean between TRB Holding  Corporation
           and  Reading & Bates (U.K.) Limited and Nissho Iwai  Europe
           PLC.  (Filed  as Exhibit 10.167 to R&B's Annual  Report  on
           Form 10-K for 1996 and incorporated herein by reference.)

 10.197  - Contract dated November 14, 1997 for Construction and  Sale
           of   Vessel   (Hull  No.  HRBS6)  between   Hyundai   Heavy
           Industries   Co.,   Ltd.,  Hyundai   Corporation   and   RB
           Exploration  Co. (Filed as Exhibit 10.165 to  R&B  Falcon's
           Annual  Report  on  Form  10-K for  1997  and  incorporated
           herein by reference.)

 10.198  - Contract dated December 16, 1998 for Construction and  Sale
           of   Vessel   (Hull  No.  HRB8-D)  between  Hyundai   Heavy
           Industries  Co., Ltd., Hyundai Corporation and  R&B  Falcon
           Drilling  Co.  (Filed  as Exhibit 10.198  to  R&B  Falcon's
           Annual  Report  on  Form  10-K for  1998  and  incorporated
           herein by reference.)

 10.199  - Contract dated September 5, 1997 for Construction and  Sale
           of  a 103,000 Metric Tons Displacement Drillship (Hull  No.
           1255)  between Samsung Heavy Industries Co., Ltd.,  Samsung
           Corporation  and  Reading & Bates Drilling  Co.  (Filed  as
           Exhibit  10.166 to R&B Falcon's Annual Report on Form  10-K
           for 1997 and incorporated herein by reference.)

 10.200  - Contract  dated October 14, 1998 for Construction and  Sale
           of  a  98,000 Metric Tons Displacement Drillship (Hull  No.
           1300)  between Samsung Heavy Industries Co., Ltd.  and  R&B
           Falcon  Drilling  Co.  (Filed  as  Exhibit  10.200  to  R&B
           Falcon's   Annual  Report  on  Form  10-K  for   1998   and
           incorporated herein by reference.)

 10.201  - Registration  Rights  Agreement  dated  August  15,   1995,
           between  Falcon and Blake Holding Co., Inc.  (Filed  as  an
           exhibit  to  Falcon's Annual Report on Form  10-K  for  the
           year  ended  December 31, 1995 and incorporated  herein  by
           reference.)

 10.202  - First  Amendment  to  Credit Agreement,  dated  October  3,
           1997,  among Falcon, Bank Paribas, Arab Banking Corporation
           (B.S.C.),  and  ING  (U.S.) Capital  Corporation,  amending
           Credit Agreement dated November 12, 1996 relating to a  $40
           million  facility, increasing such facility to $60 million.
           (Filed  as Exhibit 10.178 to R&B Falcon's Annual Report  on
           Form 10-K for 1997 and incorporated herein by reference.)

 10.203  - Credit  Agreement  dated  as  of  October  3,  1997,  among
           Falcon,  Banque Paribas, Arab Banking Corporation (B.S.C.),
           and  ING  (U.S.)  Capital Corporation relating  to  an  $80
           million  facility. (Filed as Exhibit 10.179 to R&B Falcon's
           Annual  Report  on  Form  10-K for  1997  and  incorporated
           herein by reference.)

 10.204  - First  Amendment  to Credit Agreement, dated  December  22,
           1997,  among Falcon, Bank Paribas, Arab Banking Corporation
           (B.S.C.),  and  ING  (U.S.) Capital  Corporation,  amending
           Credit  Agreement dated October 3, 1997 relating to an  $80
           million   facility,  increasing  such  facility   to   $130
           million.  (Filed  as Exhibit 10.180 to R&B Falcon's  Annual
           Report  on  Form 10-K for 1997 and incorporated  herein  by
           reference.)

 10.205  - Participation  Agreement made effective  August  28,  1997,
           between  Reading & Bates Development Co., a  subsidiary  of
           R&B,  British-Borneo  Petroleum,  Inc.  and  British-Borneo
           Exploration, Inc. (Filed as Exhibit 10.182 to R&B  Falcon's
           Annual  Report  on  Form  10-K for  1997  and  incorporated
           herein by reference.)

 10.206  - Purchase  and  Sale  and  Acreage Exchange  Agreement  made
           effective  August  28,  1997 between  Enserch  Exploration,
           Inc., and Reading & Bates Development Co., a subsidiary  of
           R&B.  (Filed  as  Exhibit  10.183 to  R&B  Falcon's  Annual
           Report  on  Form 10-K for 1997 and incorporated  herein  by
           reference.)

 10.207  - Dealer  Manager  and  Solicitation  Agent  Agreement  dated
           March  23, 1998 between the Company and Credit Suisse First
           Boston  Corporation. (Filed as Exhibit 10.1 to R&B Falcon's
           Quarterly  Report  on Form 10-Q for the  First  Quarter  of
           1998 and incorporated herein by reference.)

 10.208  - 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  other  financial  institutions.
           (Filed  as  Exhibit 10.13 to R&B Falcon's Quarterly  Report
           on   Form   10-Q  for  the  First  Quarter  of   1998   and
           incorporated herein by reference.)

 10.209  - Guaranty  Agreement  dated November 10,1997  by  Reading  &
           Bates Corporation, Reading & Bates Drilling Co., Reading  &
           Bates  Exploration  Co., Reading &  Bates  (A)  Pty.  Ltd.,
           Reading & Bates Borneo Drilling Co., Ltd., Reading &  Bates
           Offshore, Limited and RB Rig Corporation in favor  of  Bank
           of  America National Trust and Savings Association.  (Filed
           as  Exhibit 10.14 to R&B Falcon's Quarterly Report on  Form
           10-Q  for the First Quarter of 1998 and incorporated herein
           by reference.)

 10.210  - First  Amendment  and Release of Guaranty dated  April  24,
           1998  to  Credit  Agreement dated as of November  10,  1997
           among   Deepwater  Drilling  II  L.L.C.,  Bank  of  America
           National    Trust   and   Savings   Association,   National
           Westminster  Bank  Plc,  and other financial  institutions.
           (Filed  as  Exhibit 10.15 to R&B Falcon's Quarterly  Report
           on   Form   10-Q  for  the  First  Quarter  of   1998   and
           incorporated herein by reference.)

 10.211  - Guaranty  Agreement  dated April 24,  1998  by  R&B  Falcon
           Corporation in favor of Bank of America National Trust  and
           Savings  Association.  (Filed  as  Exhibit  10.16  to   R&B
           Falcon's  Quarterly  Report on  Form  10-Q  for  the  First
           Quarter of 1998 and incorporated herein by reference.)

 10.212  - Second  Amendment  to  Credit  Agreement  and  Release   of
           Guaranty  dated November 9, 1998 to Credit Agreement  dated
           as  of  November  10,  1997  among  Deepwater  Drilling  II
           L.L.C.,   Bank  of  America  National  Trust  and   Savings
           Association,  National  Westminster  Bank  Plc,  and  other
           financial  institutions. (Filed as Exhibit  10.212  to  R&B
           Falcon's   Annual  Report  on  Form  10-K  for   1998   and
           incorporated herein by reference.)

 10.213  - Assignment  and Acceptance Agreement dated as  of  November
           9,   1998  between  Great-West  &  Annuity  Life  Insurance
           Company  and  Bank  of America National Trust  and  Savings
           Association.  (Filed  as  Exhibit 10.213  to  R&B  Falcon's
           Annual  Report  on  Form  10-K for  1998  and  incorporated
           herein by reference.)

 10.214  - Third  Amendment dated January 29, 1999 to Credit Agreement
           dated  as of November 10, 1997 among Deepwater Drilling  II
           L.L.C.,   Bank  of  America  National  Trust  and   Savings
           Association,  National  Westminster  Bank  Plc,  and  other
           financial  institutions. (Filed as Exhibit  10.214  to  R&B
           Falcon's   Annual  Report  on  Form  10-K  for   1998   and
           incorporated herein by reference.)

 10.215  - 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. (Filed as  Exhibit  10.1  to
           R&B  Falcon's Quarterly Report on Form 10-Q for the  Second
           Quarter of 1998 and incorporated herein by reference.)

 10.216  - 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. (Filed  as  Exhibit
           10.2 to R&B Falcon's Quarterly Report on Form 10-Q for  the
           Second   Quarter  of  1998  and  incorporated   herein   by
           reference.)

 10.217  - Second  Amendment  to Credit Agreement  dated  October  22,
           1998 to Credit Agreement dated February 24, 1998 among  R&B
           Falcon  Corporation,  RBF Deepwater Exploration  III  Inc.,
           Credit  Lyonnais  New  York  Branch,  Christiania  Bank  OG
           Kreditkasse,  New  York  Branch and various  other  lending
           institutions.  (Filed  as Exhibit 10.217  to  R&B  Falcon's
           Annual  Report  on  Form  10-K for  1998  and  incorporated
           herein by reference.)

 10.218  - Third Amendment to Credit Agreement dated December 9,  1998
           to  Credit  Agreement dated February  24,  1998  among  R&B
           Falcon  Corporation,  RBF Deepwater Exploration  III  Inc.,
           Credit  Lyonnais  New  York  Branch,  Christiania  Bank  OG
           Kreditkasse,  New  York  Branch and various  other  lending
           institutions.  (Filed  as Exhibit 10.218  to  R&B  Falcon's
           Annual  Report  on  Form  10-K for  1998  and  incorporated
           herein by reference.)

 10.219  - Fourth  Consent  and  Amendment to Credit  Agreement  dated
           December  18,  1998 to Credit Agreement dated February  24,
           1998   among   R&B   Falcon  Corporation,   RBF   Deepwater
           Exploration  III  Inc., Credit Lyonnais  New  York  Branch,
           Christiania  Bank  OG  Kreditkasse,  New  York  Branch  and
           various    other    lending   institutions.    (Filed    as
           Exhibit  10.219 to R&B Falcon's Annual Report on Form  10-K
           for 1998 and incorporated herein by reference.)

 10.220  - Fifth Amendment to Credit Agreement dated January 21,  1999
           to  Credit  Agreement dated February  24,  1998  among  R&B
           Falcon  Corporation,  RBF Deepwater Exploration  III  Inc.,
           Credit  Lyonnais  New  York  Branch,  Christiania  Bank  OG
           Kreditkasse,  New  York  Branch and various  other  lending
           institutions.  (Filed  as Exhibit 10.220  to  R&B  Falcon's
           Annual  Report  on  Form  10-K for  1998  and  incorporated
           herein by reference.)

 10.221  - Sixth  Amendment  to  Credit Agreement dated  February  22,
           1999 to Credit Agreement dated February 24, 1998 among  R&B
           Falcon  Corporation,  RBF Deepwater Exploration  III  Inc.,
           Credit  Lyonnais  New  York  Branch,  Christiania  Bank  OG
           Kreditkasse,  New  York  Branch and various  other  lending
           institutions.  (Filed  as Exhibit 10.221  to  R&B  Falcon's
           Annual  Report  on  Form  10-K for  1998  and  incorporated
           herein by reference.)

 10.222  - Guaranty, dated as of July 30, 1998, made by Registrant  in
           favor  of the Deepwater Investment Trust 1998-A, Wilmington
           Trust  FSB, not in its individual capacity, but  solely  as
           Investment  Trustee, Wilmington Trust Company, not  in  its
           individual  capacity,  except  as  specified  herein,   but
           solely   as   Charter   Trustee,  BA  Leasing   &   Capital
           Corporation,  as Documentation Agent, ABN Amro  Bank  N.V.,
           as  Administrative  Agent, The  Bank  of  Nova  Scotia,  as
           Syndication  Agent, BA Leasing & Capital  Corporation,  ABN
           Amro  Bank N.V., Bank Austria Aktiengesellschaft  New  York
           Branch, The Bank of Nova Scotia, Bayerische Vereinsbank  AG
           New  York  Branch, Commerzbank Aktiengesellschaft,  Atlanta
           Agency,  Credit  Lyonnais New York Branch, Great-West  Life
           and   Annuity  Insurance  Company,  Mees  Pierson   Capital
           Corporation,  Westdeutsche  Landesbank  Girozentrale,   New
           York  Branch,   as  Certificate Purchasers,  and  ABN  Amro
           Bank,  N.V.,  Bank  of America National Trust  and  Savings
           Association  and The Bank of Nova Scotia, New York  Branch,
           as   Swap  Counterparties,  and  the  other  parties  named
           therein.  (Filed as Exhibit 10.1 to R&B Falcon's  Quarterly
           Report  on  Form  10-Q for the Third Quarter  of  1998  and
           incorporated herein by reference.)

 10.223  - Letter  agreement  dated as of August 7, 1998  between  RBF
           Deepwater Exploration Inc., an indirect subsidiary  of  the
           Registrant,    and   Conoco   Development    Company    and
           Acknowledgment  by  Conoco Inc. and the Registrant.  (Filed
           as  Exhibit 10.2 to R&B Falcon's Quarterly Report  on  Form
           10-Q  for the Third Quarter of 1998 and incorporated herein
           by reference.)

 10.224  - Letter  agreement  dated as of August 7, 1998  between  RBF
           Deepwater Exploration Inc., an indirect subsidiary  of  the
           Registrant,    and   Conoco   Development    Company    and
           Acknowledgment  by  Conoco Inc. and the Registrant.  (Filed
           as  Exhibit 10.3 to R&B Falcon's Quarterly Report  on  Form
           10-Q  for the Third Quarter of 1998 and incorporated herein
           by reference.)

 10.225  - Purchase  Agreement dated April 8, 1998  among  R&B  Falcon
           Corporation, Credit Suisse First Boston Corporation,  Chase
           Securities  Inc.,  Donaldson, Lufkin & Jenrette  Securities
           Corporation,   and  Morgan  Stanley  &  Co.,  Incorporated.
           (Filed   as  Exhibit  10.1  to  R&B  Falcon's  Registration
           Statement  No.  333-56821 on Form S-4 dated June  15,  1998
           and incorporated herein by reference.)

 10.226  - $500,000,000  Credit Agreement dated as of April  24,  1998
           among  R&B Falcon Corporation, the lender parties  thereto,
           and  The  Chase  Manhattan Bank, as  Administrative  Agent.
           (Filed   as  Exhibit  10.2  to  R&B  Falcon's  Registration
           Statement  No.  333-56821 on Form S-4 dated June  15,  1998
           and incorporated herein by reference.)

 10.227  - First  Amendment  to $500,000,000 Credit  Agreement,  dated
           November  13,  1998.  (Filed  as  Exhibit  10.227  to   R&B
           Falcon's   Annual  Report  on  Form  10-K  for   1998   and
           incorporated herein by reference.)

 10.228  - Second  Amendment  to $500,000,000 Credit Agreement,  dated
           as  of  the  Second  Amendment Effective  Date.  (Filed  as
           Exhibit  10.228 to R&B Falcon's Annual Report on Form  10-K
           for 1998 and incorporated herein by reference.)

 10.229  - Third  Amendment  to $500,000,000 Credit  Agreement,  dated
           January  19, 1999. (Filed as Exhibit 10.229 to R&B Falcon's
           Annual  Report  on  Form  10-K for  1998  and  incorporated
           herein by reference.)

 10.230  - Senior  Secured  Loan Agreement, Harvey Ward,  dated  March
           26,  1999 between R&B Falcon Corporation, as Borrower,  and
           RBF  Finance Co., as Lender. (Filed as Exhibit 10.1 to  R&B
           Falcon's  Quarterly  Report on  Form  10-Q  for  the  First
           Quarter of 1999 and incorporated herein by reference.)

 10.231  - Senior  Secured Loan Agreement, Peregrine II,  dated  March
           26,  1999 between R&B Falcon Corporation, as Borrower,  and
           RBF  Finance Co., as Lender. (Filed as Exhibit 10.2 to  R&B
           Falcon's  Quarterly  Report on  Form  10-Q  for  the  First
           Quarter of 1999 and incorporated herein by reference.)

 10.232  - Senior  Secured  Loan Agreement, Peregrine I,  dated  March
           26,  1999 between R&B Falcon Corporation, as Borrower,  and
           RBF  Finance Co., as Lender. (Filed as Exhibit 10.3 to  R&B
           Falcon's  Quarterly  Report on  Form  10-Q  for  the  First
           Quarter of 1999 and incorporated herein by reference.)

 10.233  - Senior  Secured Loan Agreement, Deepwater IV,  dated  March
           26,  1999 between R&B Falcon Corporation, as Borrower,  and
           RBF  Finance Co., as Lender. (Filed as Exhibit 10.4 to  R&B
           Falcon's  Quarterly  Report on  Form  10-Q  for  the  First
           Quarter of 1999 and incorporated herein by reference.)

 10.234  - Senior  Secured Loan Agreement, Falrig 82, dated March  26,
           1999  between R&B Falcon Corporation, as Borrower, and  RBF
           Finance  Co.,  as  Lender. (Filed as Exhibit  10.5  to  R&B
           Falcon's  Quarterly  Report on  Form  10-Q  for  the  First
           Quarter of 1999 and incorporated herein by reference.)

 10.235  - Senior  Secured Loan Agreement, Peregrine IV,  dated  March
           26,  1999 between R&B Falcon Corporation, as Borrower,  and
           RBF  Finance Co., as Lender. (Filed as Exhibit 10.6 to  R&B
           Falcon's  Quarterly  Report on  Form  10-Q  for  the  First
           Quarter of 1999 and incorporated herein by reference.)

 10.236  - Senior  Secured Loan Agreement, Peregrine VII, dated  March
           26,  1999 between R&B Falcon Corporation, as Borrower,  and
           RBF  Finance Co., as Lender. (Filed as Exhibit 10.7 to  R&B
           Falcon's  Quarterly  Report on  Form  10-Q  for  the  First
           Quarter of 1999 and incorporated herein by reference.)

 10.237  - Senior Secured Loan Agreement, Falcon 100, dated March  26,
           1999  between R&B Falcon Corporation, as Borrower, and  RBF
           Finance  Co.,  as  Lender. (Filed as Exhibit  10.8  to  R&B
           Falcon's  Quarterly  Report on  Form  10-Q  for  the  First
           Quarter of 1999 and incorporated herein by reference.)

 10.238  - Senior  Secured Loan Agreement, W.D. Kent, dated March  26,
           1999  between R&B Falcon Corporation, as Borrower, and  RBF
           Finance  Co.,  as  Lender. (Filed as Exhibit  10.9  to  R&B
           Falcon's  Quarterly  Report on  Form  10-Q  for  the  First
           Quarter of 1999 and incorporated herein by reference.)

 10.239  - Senior Secured Loan Agreement, Deepwater Millennium,  dated
           March   26,   1999  between  R&B  Falcon  Corporation,   as
           Borrower,  and  RBF  Finance  Co.,  as  Lender.  (Filed  as
           Exhibit 10.10 to R&B Falcon's Quarterly Report on Form  10-
           Q  for the First Quarter of 1999 and incorporated herein by
           reference.)

 10.240* - Termination  Agreement dated as of  May  31,  1999  between
           Steven  A.  Webster and Registrant. (Filed as Exhibit  10.1
           to  R&B  Falcon's  Quarterly Report on Form  10-Q  for  the
           Second   Quarter  of  1999  and  incorporated   herein   by
           reference.)

 10.241* - Termination  Agreement dated as of  May  31,  1999  between
           Robert F. Fulton and Registrant. (Filed as Exhibit 10.2  to
           R&B  Falcon's Quarterly Report on Form 10-Q for the  Second
           Quarter of 1999 and incorporated herein by reference.)

 10.242* - Termination  Agreement dated as of June  30,  1999  between
           Leighton E. Moss and Registrant. (Filed as Exhibit 10.3  to
           R&B  Falcon's Quarterly Report on Form 10-Q for the  Second
           Quarter of 1999 and incorporated herein by reference.)

 10.243* - Termination  Agreement dated as of July  31,  1999  between
           Douglas  E. Swanson and Cliffs Drilling Company. (Filed  as
           Exhibit 10.4 to R&B Falcon's Quarterly Report on Form  10-Q
           for  the Second Quarter of 1999 and incorporated herein  by
           reference.)

 10.244  - Construction Supervisory Agreement dated as of  August  12,
           1999   among  RBF  Exploration  Co.,  as  Owner   and   RBF
           Exploration II Inc., as Construction Supervisor. (Filed  as
           Exhibit 10.1 to R&B Falcon's Quarterly Report on Form  10-Q
           for  the  Third Quarter of 1999 and incorporated herein  by
           reference.)

 10.245  - Note  Purchase Agreement, Deepwater Nautilus, dated  as  of
           August  12,  1999,  RBF Exploration Co. (Filed  as  Exhibit
           10.2 to R&B Falcon's Quarterly Report on Form 10-Q for  the
           Third   Quarter   of  1999  and  incorporated   herein   by
           reference.)

 10.246  - First  Amendment  dated February 1, 2000 to  Note  Purchase
           Agreement   dated  as  of  August  12,  1999  between   RBF
           Exploration   Co.  and  Victory  Receivables   Corporation,
           Anchor  National Life Insurance Company, First Sun  America
           Life  Insurance Company, and Parthenon Receivables Funding,
           L.L.C.

 10.247  - Operation  and Maintenance Agreement executed as of  August
           12,  1999  by  and between R&B Falcon Corporation  and  RBF
           Exploration  Co.  (Filed as Exhibit 10.3  to  R&B  Falcon's
           Quarterly  Report  on Form 10-Q for the  Third  Quarter  of
           1999 and incorporated herein by reference.)

 10.248  - Performance Guarantee dated as of August 12, 1999  made  by
           R&B  Falcon  Corporation in favor of RBF  Exploration  Co.,
           Travelers Casualty and Surety Company of America,  American
           Home  Assurance Company, and Chase Bank of Texas,  National
           Association,  as  Trustee. (Filed as Exhibit  10.4  to  R&B
           Falcon's  Quarterly  Report on  Form  10-Q  for  the  Third
           Quarter of 1999 and incorporated herein by reference.)

 10.249  - First Preferred Ship Mortgage, Deepwater Nautilus, made  by
           RBF  Exploration  Co.  in favor of  Chase  Bank  of  Texas,
           National  Association,  as  Indenture  Trustee.  (Filed  as
           Exhibit 10.5 to R&B Falcon's Quarterly Report on Form  10-Q
           for  the  Third Quarter of 1999 and incorporated herein  by
           reference.)

 10.250  - Trust  Indenture and Security Agreement dated as of  August
           12,   1999,   between  RBF  Exploration   Co.,   a   Nevada
           corporation, and Chase Bank of Texas, National  Association
           as   Trustee.  (Filed  as  Exhibit  10.6  to  R&B  Falcon's
           Quarterly  Report  on Form 10-Q for the  Third  Quarter  of
           1999 and incorporated herein by reference.)

 10.251  - Supplemental Indenture and Agreement dated as  of  February
           1,  2000  to  the  Trust Indenture and  Security  Agreement
           dated as of August 12, 1999 among RBF Exploration Co.,  BTM
           Capital  Corporation  and  Chase Bank  of  Texas,  National
           Association, as trustee.

 10.252  - Assignment  of  Drilling Contract dated as  of  August  12,
           1999,  by  RBF  Exploration Co. to  Chase  Bank  of  Texas,
           National  Association, as trustee. (Filed as  Exhibit  10.7
           to  R&B  Falcon's  Quarterly Report on Form  10-Q  for  the
           Third   Quarter   of  1999  and  incorporated   herein   by
           reference.)

 10.253  - R&B  Falcon Guaranty from R&B Falcon Corporation  dated  as
           of  August 31, 1999. (Filed as Exhibit 10.8 to R&B Falcon's
           Quarterly  Report  on Form 10-Q for the  Third  Quarter  of
           1999 and incorporated herein by reference.)

 10.254  - Participation Agreement dated as of August 31,  1999  among
           Deepwater  Drilling II L.L.C., Deepwater  Investment  Trust
           1999-A, Wilmington Trust FSB, Wilmington Trust Company,  BA
           Leasing   &   Capital  Corporation,  and  other   Financial
           Institutions, as Certified Purchasers, solely with  respect
           to  Section  2.15,  6.9,  9.4(a) and  12.13(b)  R&B  Falcon
           Corporation  and  Conoco Inc., and solely with  respect  to
           Sections  5.2  and 6.4, RBF Deepwater Exploration  II  Inc.
           and  Conoco Development II Inc. (Filed as Exhibit  10.9  to
           R&B  Falcon's Quarterly Report on Form 10-Q for  the  Third
           Quarter of 1999 and incorporated herein by reference.)

 10.255  - Appendix  1 to Participation Agreement dated as  of  August
           31,   1999.  (Filed  as  Exhibit  10.10  to  R&B   Falcon's
           Quarterly  Report  on Form 10-Q for the  Third  Quarter  of
           1999 and incorporated herein by reference.)

 10.256  - Bank  One Application and Agreement for Irrevocable Standby
           Letter  of Credit dated August 30, 1999. (Filed as  Exhibit
           10.11  to  R&B Falcon's Quarterly Report on Form  10-Q  for
           the  Third  Quarter  of  1999 and  incorporated  herein  by
           reference.)

 10.257  - Pledge  Agreement  dated  as of August  30,  1999,  by  R&B
           Falcon   Corporation  in  favor  of  Bank  One,  Louisiana,
           National  Association.  (Filed  as  Exhibit  10.12  to  R&B
           Falcon's  Quarterly  Report on  Form  10-Q  for  the  Third
           Quarter of 1999 and incorporated herein by reference.)

 10.258* - Employment  and  Change of Control Agreement  dated  August
           25,  1999 between R&B Falcon Corporation and Paul B.  Loyd,
           Jr.  (Filed  as  Exhibit  10.13 to R&B  Falcon's  Quarterly
           Report  on  Form  10-Q for the Third Quarter  of  1999  and
           incorporated herein by reference.)

 10.259* - Employment  and  Change of Control Agreement  dated  August
           25,  1999  between R&B Falcon Corporation  and  Charles  R.
           Ofner.  (Filed  as Exhibit 10.14 to R&B Falcon's  Quarterly
           Report  on  Form  10-Q for the Third Quarter  of  1999  and
           incorporated herein by reference.)

 10.260* - Employment  and  Change of Control Agreement  dated  August
           25,  1999  between R&B Falcon Corporation and Ron  Toufeeq.
           (Filed  as  Exhibit 10.15 to R&B Falcon's Quarterly  Report
           on   Form   10-Q  for  the  Third  Quarter  of   1999   and
           incorporated herein by reference.)

 10.261* - Employment  and  Change of Control Agreement  dated  August
           25,  1999  between  R&B Falcon Corporation  and  Bernie  W.
           Stewart.  (Filed as Exhibit 10.16 to R&B Falcon's Quarterly
           Report  on  Form  10-Q for the Third Quarter  of  1999  and
           incorporated herein by reference.)

 10.262* - Employment  and  Change of Control Agreement  dated  August
           25,  1999  between  R&B  Falcon Corporation  and  Wayne  K.
           Hillin.  (Filed as Exhibit 10.17 to R&B Falcon's  Quarterly
           Report  on  Form  10-Q for the Third Quarter  of  1999  and
           incorporated herein by reference.)

 10.263* - Employment  and  Change of Control Agreement  dated  August
           25,   1999  between  R&B  Falcon  Corporation  and   Andrew
           Bakonyi.  (Filed as Exhibit 10.18 to R&B Falcon's Quarterly
           Report  on  Form  10-Q for the Third Quarter  of  1999  and
           incorporated herein by reference.)

 10.264* - Employment  and  change of Control Agreement  dated  August
           25, 1999 between R&B Falcon Corporation and Tim W. Nagle.

 10.265  - Purchase  Agreement dated March 19, 1999 among  R&B  Falcon
           Corporation  and  Donaldson, Lufkin &  Jenrette  Securities
           Corporation,  with  respect  to  $400,000,000  11%   Senior
           Secured  Notes  due 2006 and $400,000,000  11  3/8%  Senior
           Secured  Notes  due 2009.  (Filed as Exhibit  10.1  to  R&B
           Falcon's  Registration Statement No. 333-79245 on Form  S-4
           dated May 25, 1999 and incorporated herein by reference.)

 10.266  - Issuer  Loan  Escrow Agreement dated March 26,  1999  among
           United  States  Trust  Company  of  New  York,  R&B  Falcon
           Corporation and RBF Finance Co.  (Filed as Exhibit 10.2  to
           R&B  Falcon's Registration Statement No. 333-79363 on  Form
           S-4   dated  May  26,  1999  and  incorporated  herein   by
           reference.)

 10.267  - Senior  Secured Note Escrow Agreement dated March 26,  1999
           among  United  States Trust Company of  New  York  and  RBF
           Finance  Co.   (Filed  as  Exhibit  10.3  to  R&B  Falcon's
           Registration Statement No. 333-79363 on Form S-4 dated  May
           26, 1999 and incorporated herein by reference.)

 10.268  - Security  Agreement dated as of March  26,  1999  from  R&B
           Falcon   Corporation   to  RBF  Finance   Co.    (Deepwater
           Millenium).  (Filed  as  Exhibit  10.14  to  R&B   Falcon's
           Registration Statement No. 333-79363 on Form S-4 dated  May
           26, 1999 and incorporated herein by reference.)

 10.269  - Security  Agreement dated as of March  26,  1999  from  R&B
           Falcon  Corporation  to  RBF Finance  Co.  (Deepwater  IV).
           (Filed  as  Exhibit  10.15  to  R&B  Falcon's  Registration
           Statement No. 333-79363 on Form S-4 dated May 26, 1999  and
           incorporated herein by reference.)

 10.270  - Senior Secured Note Security and Pledge Agreement dated  as
           of  March  26, 1999 by RBF Finance Co. in favor  of  United
           States  Trust  Company.  (Filed as  Exhibit  10.16  to  R&B
           Falcon's  Registration Statement No. 333-79363 on Form  S-4
           dated May 26, 1999 and incorporated herein by reference.)

 10.271  - First  Preferred Ship Mortgage made March 26, 1999  by  R&B
           Falcon  Corporation  and RBF Finance  Co.  (Peregrine  IV).
           (Filed  as  Exhibit  10.17  to  R&B  Falcon's  Registration
           Statement No. 333-79363 on Form S-4 dated May 26, 1999  and
           incorporated herein by reference.)

 10.272  - First  Preferred Ship Mortgage made March 26, 1999  by  R&B
           Falcon  Corporation  and RBF Finance Co.  (Peregrine  VII).
           (Filed  as  Exhibit  10.18  to  R&B  Falcon's  Registration
           Statement No. 333-79363 on Form S-4 dated May 26, 1999  and
           incorporated herein by reference.)

 10.273  - First  Preferred Ship Mortgage made March 26, 1999  by  R&B
           Falcon  Corporation  and  RBF  Finance  Co.  (Falcon  100).
           (Filed  as  Exhibit  10.19  to  R&B  Falcon's  Registration
           Statement No. 333-79363 on Form S-4 dated May 26, 1999  and
           incorporated herein by reference.)

 10.274  - Deed  of Covenants dated March 26, 1999 by and between  R&B
           Falcon  Corporation  and  R&B Finance  Co.  (Peregrine  I).
           (Filed  as  Exhibit  10.20  to  R&B  Falcon's  Registration
           Statement No. 333-79363 on Form S-4 dated May 26, 1999  and
           incorporated herein by reference.)

 10.275  - Deed  of Covenants dated March 26, 1999 by and between  R&B
           Falcon  Corporation  and R&B Finance  Co.  (Peregrine  II).
           (Filed  as  Exhibit  10.21  to  R&B  Falcon's  Registration
           Statement No. 333-79363 on Form S-4 dated May 26, 1999  and
           incorporated herein by reference.)

 10.276  - First  Naval  Mortgage dated April 12, 1999 by  R&B  Falcon
           Corporation  to  R&B Finance Co. (Harvey Ward).  (Filed  as
           Exhibit  10.22  to R&B Falcon's Registration Statement  No.
           333-79363  on  Form S-4 dated May 26, 1999 and incorporated
           herein by reference.)

 10.277  - First  Naval  Mortgage dated April 12, 1999 by  R&B  Falcon
           Corporation  to  R&B  Finance Co. (W.D.  Kent).  (Filed  as
           Exhibit  10.23  to R&B Falcon's Registration Statement  No.
           333-79363  on  Form S-4 dated May 26, 1999 and incorporated
           herein by reference.)

 10.278  - First  Preferred Ship Mortgage made March 26, 1999  by  R&B
           Falcon  Corporation and R&B Finance Co. (Falrig 82). (Filed
           as  Exhibit  10.24  to R&B Falcon's Registration  Statement
           No.   333-79363  on  Form  S-4  dated  May  26,  1999   and
           incorporated herein by reference.)

 10.279  - Purchase  Agreement dated April 15, 1999 among  R&B  Falcon
           Corporation  and  Donaldson, Lufkin &  Jenrette  Securities
           Corporation  with  respect to 300,000  shares  of  13  7/8%
           Senior  Cumulative Redeemable Preferred Stock and  Warrants
           to  Purchase 10,500,000 shares of Common Stock.  (Filed  as
           Exhibit  10.1  to R&B Falcon's Registration  Statement  No.
           333-81179  on Form S-4 dated June 21, 1999 and incorporated
           herein by reference.)

 10.280* - 1999  Employee  Long-Term  Incentive  Plan  of  R&B  Falcon
           Corporation.  (Filed as Exhibit 99.A to R&B Falcon's  Proxy
           Statement  dated April 13, 1999 and incorporated herein  by
           reference.)

 10.281* - 1999  Director  Long-Term  Incentive  Plan  of  R&B  Falcon
           Corporation.  (Filed as Exhibit 99.B to R&B Falcon's  Proxy
           Statement  dated April 13, 1999 and incorporated herein  by
           reference.)

 10.282* - Stock  Option  Agreement dated as of April 7, 1999  between
           R&B  Falcon  Corporation and Paul B. Loyd,  Jr.  under  R&B
           Falcon Corporation 1997 Employee Long-Term Incentive Plan.

 10.283* - Stock  Option  Agreement dated as of April 7, 1999  between
           R&B  Falcon  Corporation and Steven A.  Webster  under  R&B
           Falcon Corporation 1997 Employee Long-Term Incentive Plan.

 10.284* - Stock  Option  Agreement dated as of April 7, 1999  between
           R&B  Falcon Corporation and Andrew Bakonyi under R&B Falcon
           Corporation 1995 Employee Long-Term Incentive Plan.

 10.285* - Stock  Option  Agreement dated as of April 7, 1999  between
           R&B  Falcon  Corporation and Tim W. Nagle under R&B  Falcon
           Corporation 1995 Employee Long-Term Incentive Plan.

 10.286* - Stock  Option  Agreement dated as of April 7, 1999  between
           R&B  Falcon  Corporation and Robert  F.  Fulton  under  R&B
           Falcon Corporation 1997 Employee Long-Term Incentive Plan.

 10.287* - Stock  Option  Agreement dated as of April 7, 1999  between
           R&B  Falcon Corporation and Bernie Stewart under R&B Falcon
           Corporation 1997 Employee Long-Term Incentive Plan.

 10.288* - Stock  Option  Agreement dated as of April 7, 1999  between
           R&B  Falcon  Corporation and Charles  R.  Ofner  under  R&B
           Falcon Corporation 1997 Employee Long-Term Incentive Plan.

 10.289* - Stock  Option  Agreement dated as of April 7, 1999  between
           R&B  Falcon Corporation and Leighton Moss under R&B  Falcon
           Corporation 1997 Employee Long-Term Incentive Plan.

 10.290* - Stock  Option  Agreement dated as of April 7, 1999  between
           R&B  Falcon  Corporation  and Wayne  K.  Hillin  under  R&B
           Falcon Corporation 1997 Employee Long-Term Incentive Plan.

 10.291* - Stock  Option  Agreement dated as of April 7, 1999  between
           R&B  Falcon Corporation and P. Chatterjee under R&B  Falcon
           Corporation 1998 Director Long-Term Incentive Plan.

 10.292* - Stock  Option  Agreement dated as of April 7, 1999  between
           R&B  Falcon  Corporation and Arnie  F.  Chavkin  under  R&B
           Falcon Corporation 1995 Director Long-Term Incentive Plan.

 10.293* - Stock  Option  Agreement dated as of April 7, 1999  between
           R&B  Falcon Corporation and Charles A. Donabedian under R&B
           Falcon Corporation 1998 Director Long-Term Incentive Plan.

 10.294* - Stock  Option  Agreement dated as of April 7, 1999  between
           R&B  Falcon  Corporation and Douglas A. P.  Hamilton  under
           R&B  Falcon  Corporation 1998 Director Long-Term  Incentive
           Plan.

 10.295* - Stock  Option  Agreement dated as of April 7, 1999  between
           R&B  Falcon Corporation and Macko Laqueur under R&B  Falcon
           Corporation 1995 Director Long-Term Incentive Plan.

 10.296* - Stock  Option  Agreement dated as of April 7, 1999  between
           R&B  Falcon  Corporation and Michael E.  Porter  under  R&B
           Falcon Corporation 1998 Director Long-Term Incentive Plan.

 10.297* - Stock  Option  Agreement dated as of April 7, 1999  between
           R&B  Falcon Corporation and Robert L. Sandmeyer  under  R&B
           Falcon Corporation 1998 Director Long-Term Incentive Plan.

 10.298* - Stock  Option  Agreement dated as of April 7, 1999  between
           R&B  Falcon Corporation and Robert L. Sandmeyer  under  R&B
           Falcon Corporation 1995 Director Long-Term Incentive Plan.

 10.299* - Stock  Option  Agreement dated as of April 7, 1999  between
           R&B  Falcon  Corporation and William R. Ziegler  under  R&B
           Falcon Corporation 1998 Director Long-Term Incentive Plan.

 10.300* - Stock  Option  Agreement dated as of May 19,  1999  between
           R&B  Falcon  Corporation and Paul B. Loyd,  Jr.  under  R&B
           Falcon Corporation 1999 Employee Long-Term Incentive Plan.

 10.301* - Stock  Option  Agreement dated as of May 19,  1999  between
           R&B  Falcon  Corporation and Steven A.  Webster  under  R&B
           Falcon Corporation 1999 Employee Long-Term Incentive Plan.

 10.302* - Stock  Option  Agreement dated as of May 19,  1999  between
           R&B  Falcon Corporation and Andrew Bakonyi under R&B Falcon
           Corporation 1999 Employee Long-Term Incentive Plan.

 10.303* - Stock  Option  Agreement dated as of May 19,  1999  between
           R&B  Falcon  Corporation and Tim W. Nagle under R&B  Falcon
           Corporation 1999 Employee Long-Term Incentive Plan.

 10.304* - Stock  Option  Agreement dated as of May 19,  1999  between
           R&B  Falcon  Corporation and Robert  F.  Fulton  under  R&B
           Falcon Corporation 1999 Employee Long-Term Incentive Plan.

 10.305* - Stock  Option  Agreement dated as of May 19,  1999  between
           R&B  Falcon Corporation and Bernie Stewart under R&B Falcon
           Corporation 1999 Employee Long-Term Incentive Plan.

 10.306* - Stock  Option  Agreement dated as of May 19,  1999  between
           R&B  Falcon  Corporation and Charles  R.  Ofner  under  R&B
           Falcon Corporation 1999 Employee Long-Term Incentive Plan.

 10.307* - Stock Option Agreement dated as of May19, 1999 between  R&B
           Falcon  Corporation  and Leighton  Moss  under  R&B  Falcon
           Corporation 1999 Employee Long-Term Incentive Plan.

 10.308* - Stock  Option  Agreement dated as of May 19,  1999  between
           R&B  Falcon  Corporation  and Wayne  K.  Hillin  under  R&B
           Falcon Corporation 1999 Employee Long-Term Incentive Plan.

 10.309* - Stock  Option  Agreement dated as of May 19,  1999  between
           R&B  Falcon Corporation and P. Chatterjee under R&B  Falcon
           Corporation 1999 Director Long-Term Incentive Plan.

 10.310* - Stock  Option  Agreement dated as of May 19,  1999  between
           R&B  Falcon  Corporation and Arnie  F.  Chavkin  under  R&B
           Falcon Corporation 1999 Director Long-Term Incentive Plan.

 10.311* - Stock  Option  Agreement dated as of May 19,  1999  between
           R&B  Falcon Corporation and Charles A. Donabedian under R&B
           Falcon Corporation 1999 Director Long-Term Incentive Plan.

 10.312* - Stock  Option  Agreement dated as of May 19,  1999  between
           R&B  Falcon  Corporation and Douglas A. P.  Hamilton  under
           R&B  Falcon  Corporation 1999 Director Long-Term  Incentive
           Plan.

 10.313* - Stock  Option  Agreement dated as of May 19,  1999  between
           R&B  Falcon Corporation and Macko Laqueur under R&B  Falcon
           Corporation 1999 Director Long-Term Incentive Plan.

 10.314* - Stock  Option  Agreement dated as of May 19,  1999  between
           R&B  Falcon  Corporation and Michael E.  Porter  under  R&B
           Falcon Corporation 1999 Director Long-Term Incentive Plan.

 10.315* - Stock  Option  Agreement dated as of May 19,  1999  between
           R&B  Falcon Corporation and Robert L. Sandmeyer  under  R&B
           Falcon Corporation 1999 Director Long-Term Incentive Plan.

 10.316* - Stock  Option  Agreement dated as of May 19,  1999  between
           R&B  Falcon  Corporation and William R. Ziegler  under  R&B
           Falcon Corporation 1999 Director Long-Term Incentive Plan.

 10.317  - Performance  Bond  dated January 31,  2000  from  Travelers
           Casualty  and  Surety Company of America and American  Home
           Assurance  Company, RBF Exploration II Inc.,  as  principal
           unto  BTM  Capital  Corporation and Chase  Bank  of  Texas,
           National Association, as trustee.

 10.318  - Indemnity Agreement dated as of January 31, 2000  from  R&B
           Falcon Corporation and RBF Exploration II Inc. in favor  of
           Travelers  Casualty  and  Surety  Company  of  America  and
           American Home Assurance Company.

 10.319  - First  Naval  Mortgage dated February 2, 2000 made  by  BTM
           Capital  Corporation  in  favor of  Chase  Bank  of  Texas,
           National Association., as indenture trustee.

 10.320  - Construction Supervisory Agreement dated as of February  1,
           2000  among  BTM  Capital Corporation, RBF Exploration  Co.
           and RBF Exploration II Inc.

 10.321  - Equipment Sale and Funding Agreement dated 1 February  2000
           between RBF Exploration Co. and BTM Capital Corporation.

 10.322  - Novation  Agreement  dated 1 February  2000  among  Hyundai
           Corporation,  Hyundai  Heavy  Industries  Co.,  Ltd.,   RBF
           Exploration Co. and BTM Capital Corporation.

 10.323  - Acknowledgment   of  Rig  Ownership  and  Ratification   of
           Operation  and Maintenance Agreement dated as  of  February
           1,  2000 among R&B Falcon Corporation, RBF Exploration  Co.
           and BTM Capital Corporation.

 10.324  - Performance Guarantee dated as of February 1, 2000 made  by
           R&B  Falcon  Corporation in favor of RBF  Exploration  Co.,
           BTM  Capital  Corporation, Travelers  Casualty  and  Surety
           Company  of  America, American Home Assurance  Company  and
           Chase  Bank  of Texas, National Association,  as  indenture
           trustee.

 10.325  - Bill  of  Sale dated February 1, 2000 from RBF  Exploration
           Co. to BTM Capital Corporation.

 10.326  - Acknowledgment  of  Independent  Transaction  dated  as  of
           February  1,  2000 among RBF Exploration Co.,  BTM  Capital
           Corporation, Chase Bank of Texas, National Association,  as
           trustee,  Victory Receivables Corporation,  Anchor National
           Life  Insurance  Company, First SunAmerica  Life  Insurance
           Company and Parthenon Receivables Funding, L.L.C.

 21      - Schedule of Subsidiaries of the Company

 23      - Consent of Arthur Andersen LLP

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

 99      - Annual Report on Form 11-K with respect to R&B Falcon  U.S.
           Savings  Plan.   (To be filed by amendment  to  the  Annual
           Report on Form 10-K.)

           Instruments  with respect to certain long-term  obligations
      of  the  Company are not being filed as exhibits hereto  as  the
      securities  authorized  thereunder do  not  exceed  10%  of  the
      Company's  total assets.  The Company agrees to furnish  a  copy
      of   each   such  instrument  to  the  Securities  and  Exchange
      Commission upon its request.

      *Management   contract  or  compensatory  plan  or   arrangement
       required   to   be  filed  as  an  exhibit  pursuant   to   the
       requirements of Item 14(c) of Form 10-K.

  (b) Reports on Form 8-K
      There  were  no  Current Reports on Form 8-K  filed  during  the
      three months ended December 31, 1999.


                                SIGNATURES

      Pursuant to the requirements of Section 13 or 15(d) 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 on March
13, 2000.

                          R&B FALCON CORPORATION

                              By  /s/ Paul B. Loyd, Jr.
                                 ------------------------------
                                  Paul B. Loyd, Jr.
                                  Chief Executive Officer,
                                  Chairman of the Board and Director

      Pursuant to the requirements of the Securities Exchange Act of  1934,
this report has been signed below by the following persons on behalf of the
Registrant in the capacities indicated on March 13, 2000.

By   /s/ Paul B. Loyd, Jr.              By   /s/ Tim W. Nagle
   -----------------------------           ---------------------------
   Paul B. Loyd, Jr.                       Tim W. Nagle
   Chief Executive Officer, Chairman       Executive Vice President and
   of the Board and Director               Chief Financial Officer

By                                      By   /s/ Michael E. Porter
   -----------------------------           ---------------------------
   Purnendu Chatterjee                     Michael E. Porter
   Director                                Director

By   /s/ Arnold L. Chavkin              By   /s/ Robert L. Sandmeyer
   -----------------------------           ---------------------------
   Arnold L. Chavkin                       Robert L. Sandmeyer
   Director                                Director

By   /s/ Charles A. Donabedian          By   /s/ Douglas E. Swanson
   -----------------------------           ---------------------------
   Charles A. Donabedian                   Douglas E. Swanson
   Director                                Director

By                                      By   /s/ Steven A. Webster
   -----------------------------           ---------------------------
   Douglas A. P. Hamilton                  Steven A. Webster
   Director                                Director

By                                      By   /s/ William R. Ziegler
   -----------------------------           ---------------------------
   Macko A. E. Laqueur                     William R. Ziegler
   Director                                Director

By   /s/ Rich A. Pattarozzi
   ------------------------------
   Rich A. Pattarozzi
   Director