EXHIBIT 10.178

                      FIRST AMENDMENT TO CREDIT AGREEMENT
                     (Acquisition Loans Credit Facility)


     THIS  FIRST  AMENDMENT  TO  CREDIT AGREEMENT (the  "Amendment")  dated
October  3, 1997, is by and among FALCON DRILLING COMPANY, INC. a  Delaware
corporation  ("Falcon  Drilling  or  Borrower"),  BANQUE  PARIBAS,  a  bank
organized  under  the  laws  of  the  Republic  of  France,  ARAB   BANKING
CORPORATION  (B.S.C.),  banking corporation organized  under  the  laws  of
Bahrain,   and  ING  (U.S.)  CAPITAL  CORPORATION,  a  banking  corporation
organized under the laws of the Netherlands.

                      W I T N E S S E T H:

     WHEREAS,  the  Borrower, the Agent and the Banks are  parties  to  the
Credit  Agreement  dated as of November 12, 1996 (as amended,  the  "Credit
Agreement")  relating to a $40,000,000 Acquisition Loans  Credit  Facility,
pursuant  to  which,  inter alia, the Banks agreed to  make  certain  loans
available  to the Borrower upon the terms and conditions contained  in  the
Credit Agreement;

     WHEREAS, Borrower desires that the Banks increase the available credit
under said facility to an aggregate of $60,000,000.

     WHEREAS,  the  parties hereto desire to amend the Credit Agreement  in
accordance with the terms and provisions of this Amendment;

     NOW,  THEREFORE, for and in consideration of these premises and  other
valuable  consideration, the receipt and sufficiency of  which  are  hereby
acknowledged,  the  Borrower,  the Agent and  the  Banks  hereby  agree  as
follows:

     1.   Terms.  All capitalized terms defined in the Credit Agreement and
not  otherwise  defined  herein shall have the same definitions  when  used
herein as set forth in the Credit Agreement as amended by this Amendment.

     2.   Amendment to Section 1.1 of the Credit Agreement.

          (a)    Amendment  to  Definition  of  Applicable   Margin.    The
     definition  of  "Applicable Margin" contained in Section  1.1  of  the
     Credit  Agreement  is  hereby amended and  restated  to  read  in  its
     entirety as follows:

               "Applicable  Margin" means (a) 0.50% per annum with  respect
          to  ABR  Loans and (b) 1.50% per annum with respect to Eurodollar
          Loans.

          (b)    Amendment  to  Definition  of  Change  of  Control.    The
     definition  of  "Change of Control" contained in Section  1.1  of  the
     Credit  Agreement is hereby amended by adding at the end  thereof  the
     following  proviso: "provided, however (i) the R&B  Merger  shall  not
     constitute  a  Change of Control and (ii) following the R&B  Merger  a
     change in the Board of Directors of Falcon Drilling shall in no  event
     constitute a Change of Control."

          (c)   Amendment to Definition of Drilling Rigs.   The  definition
     of "Drilling Rigs" contained in Section 1.1 of the Credit Agreement is
     hereby amended by deleting the last sentence thereof and replacing  it
     with the following:

          As  of  October 3, 1997, the Drilling Rigs shall consist  of  the
          PHOENIX  I  (U.S.  Official No. 641320),  the  PHOENIX  II  (U.S.
          Official No. 643906), the PHOENIX III (U.S. Official No. 644283),
          the  PHOENIX IV (U.S. Official No. 634728), the FALRIG  85  (U.S.
          Official  No. 604568), the FALRIG 86 (U.S. Official  No.  624764)
          and the ACHILLES (U.S. Official No. 643745).

          (d)   Addition of Definition of R&B Merger.  Section 1.1  of  the
     Credit Agreement is hereby amended by adding the following definition:

               "R&B  Merger" means the proposed combination of the Borrower
          with  Reading  &  Bates Corporation, which  combination  will  be
          effected by merging one subsidiary of R&B Falcon Corporation into
          Borrower  and  another subsidiary of R&B Falcon Corporation  into
          Reading & Bates Corporation, following which Borrower and Reading
          &  Bates  Corporation  will be wholly owned subsidiaries  of  R&B
          Falcon  Corporation, and the former shareholders of Borrower  and
          Reading  &  Bates  Corporation will own all  of  the  outstanding
          shares of R&B Falcon Corporation."

          (e)   Addition of Definition of R&B Option. Section  1.1  of  the
     Credit Agreement is hereby amended by adding the following definition:

               "R&B  Option" means the option to purchase common  stock  of
          the  Borrower granted to Reading & Bates Corporation pursuant  to
          that  certain FDC Corporation Stock Option Agreement  dated  July
          10, 1997 between Borrower and Reading & Bates Corporation."

          (f)    Addition  of  Definition  of  Unsecured  Revolving  Credit
     Agreement.   Section 1.1 of the Credit Agreement is hereby amended  by
     adding the following definition:

               "Unsecured  Revolving Credit Agreement" means  that  certain
          Unsecured Revolving Credit Agreement dated as of October 3,  1997
          among Borrower and each of the Banks providing for an $80,000,000
          unsecured  credit facility for Borrower, maturing 364 days  after
          execution."

          (g)   Addition of Definition of Unsecured Revolving Credit  Loans
     Documents.   Section 1.1 of the Credit Agreement is hereby amended  by
     adding the following definition:

               "Unsecured Revolving Credit Loans Documents" means the "Loan
          Documents"  as  such  term is defined in the Unsecured  Revolving
          Credit Agreement.


     3.   Amendment to Section 2.6 of the Credit Agreement.  Section 2.6 of
the Credit Agreement is amended by deleting the "and" before clause (c)  in
the  proviso and adding a new clause (d) as follows: "and (d) no prepayment
may  be  made  against the Loans at any time that any amounts are  due  and
owing from Borrower pursuant to the Unsecured Credit Agreement."

     4.   Amendment to Section 2.8 of the Credit Agreement.  Section 2.8 of
the  Credit Agreement is amended by changing the term "$250,000"  contained
therein to "$1,000,000".

     5.    Amendment to Section 2.11 of the Credit Agreement.  Section 2.11
of the Credit Agreement is amended by substituting "0.375%" for "0.50%".

     6.   Amendment to Section 8.1 of the Credit Agreement.  Paragraphs (c)
and  (f)  of  Section  8.1 of the Credit Agreement  are  amended  in  their
entirety to read as follows:

                          "[DELETED]"

     7.    Amendment  to  Section 9.1(a) of the Credit Agreement.   Section
9.1(a)  of  the Credit Agreement is amended by adding the phrase  "and  the
Unsecured Revolving Credit Loans Documents" to the end of clause (a).

     8.   Amendment to Section 9.3 of the Credit Agreement.  Section 9.3 of
the Credit Agreement is amended by inserting the words "Except pursuant  to
the R&B Merger," at the beginning of the first sentence thereof.

     9.   Amendment to Section 9.5 of the Credit Agreement.  Section 9.5(m)
of the Credit Agreement is amended in its entirety to read as follows:

          "(m) Other Investments in an aggregate amount (as to Borrower and
          all  of its Subsidiaries) not to exceed the following at any time
          outstanding: (i) $75,000,000 minus (ii) the aggregate amount paid
          by  Borrower and all of its Subsidiaries after November 12,  1996
          in redemption of preferred stock or Redeemable Stock."

     10.   Amendment to Section 10.2 of the Credit Agreement.  Section 10.2
of  the  Credit  Agreement  is amended by substituting  "$250,000,000"  for
"$95,000,000" and by substituting "50%" for "75%".

     11.   Amendment  to Section 11.1(r) of the Credit Agreement.   Section
11.1(r)  of  the Credit Agreement is amended by adding the phrase  "or  the
Unsecured Revolving Credit Agreement" to the end of clause (r);

     12.   Amendment  to  Section 13.11 of the Credit  Agreement.   Section
13.11  of  the Credit Agreement is amended by substituting "Drilling  Rigs"
for "Eligible Receivables."

     13.   Amendment  to  Section 13.23 of the Credit  Agreement.   Section
13.23  of  the  Credit  Agreement is amended by deleting  the  phrase  "Ms.
Riordan" in the fourth line there of and replacing it with the phrase  "Mr.
Markham."

     14.  Change in amount of Commitments.  The Credit Agreement is amended
by  changing the amount of the Commitment of each Bank as set forth on  the
signature pages of the Credit Agreement so that the Commitment of each Bank
is the amount set forth beside its name below:

               BANQUE PARIBAS                          $23,636,363.64
               ARAB BANKING CORPORATION (B.S.C.)       $18,181,818.18
               ING (U.S.) CAPITAL CORPORATION          $18,181,818.18

     15.   Conditions to Closing and Effectiveness of this Amendment.   The
obligation of each Bank to make its Loans pursuant to the Credit  Agreement
as  amended by this Amendment  are subject to the conditions precedent that
(a)  this Amendment, the Unsecured Revolving Credit Agreement and the First
Amendment  to  Credit Agreement (Revolving Loans Credit Facility)  of  even
date  herewith  between  Borrower, Agent and  the  Banks  shall  have  been
executed  and  delivered by all parties thereto, (b)  Borrower  shall  have
acquired title to the PHOENIX I (U.S. Official No. 641320) and the ACHILLES
(U.S. Official No. 643745) drilling rigs, free of all liens, mortgages  and
encumbrances  and  that the First Amendment to First Preferred  Fleet  Ship
Mortgage of even date herewith between Borrower and Bank One, Texas,  N.A.,
as mortgagee, shall have been executed and delivered by all parties thereto
in  form  and  substance satisfactory to the Agent, (c)  Agent  shall  have
received  a  certificate  of  the Vice President  and  General  Counsel  of
Borrower  certifying  that  no  changes have  been  made  the  Articles  of
Incorporation or Bylaws of Borrower and shall have received current  copies
(not  more than 10 days old) of each of the items listed in Section 6.1  of
the  Credit  Agreement other than  those listed in clauses (c),  (d),  (i),
(k),  (aa)  and (bb), and (d) all conditions listed in Section 6.1  of  the
Unsecured Revolving Credit Agreement shall have been satisfied.

     16.  Costs.  The Borrower shall pay all reasonable out-of-pocket costs
and  expenses incurred by the Agent, the Co-Agent or any Bank in connection
with  the  negotiation,  preparation, execution and  consummation  of  this
Amendment  and the transactions contemplated by this Amendment,  including,
without  limitation, the reasonable fees and expenses  of  counsel  to  the
Agent, the Co-Agent and the Banks.

     17.  Miscellaneous.

     17.1 Headings.  Section headings are for reference only and shall  not
affect the interpretation or meanings of any provision of this Amendment.

     17.2  Effect of this Amendment.  The Credit Agreement, as  amended  by
this  Amendment,  shall  remain in full force and effect  except  that  any
reference  therein, or in any other Loan Document referring to  the  Credit
Agreement,  shall be deemed to refer to the Credit Agreement as amended  by
this Amendment.

     17.3  GOVERNING  LAW.   THIS  AMENDMENT  SHALL  BE  GOVERNED  BY,  AND
CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF TEXAS AND APPLICABLE
FEDERAL LAW.

     17.4  Counterparts.  This Amendment may be executed by  the  different
parties  hereto on separate counterparts, each of which, when so  executed,
shall be deemed an original but all such counterparts shall constitute  but
one and the same Amendment.

     17.5  NO  ORAL AGREEMENTS.  THE CREDIT AGREEMENT, AS AMENDED  BY  THIS
AMENDMENT,  TOGETHER WITH THE OTHER LOAN DOCUMENTS, REPRESENTS  THE  ENTIRE
AGREEMENT  AMONG  THE PARTIES AND MAY NOT BE CONTRADICTED  BY  EVIDENCE  OF
PRIOR CONTEMPORANEOUS, OR SUBSEQUENT ORAL AGREEMENTS OF THE PARTIES.  THERE
ARE NO UNWRITTEN ORAL AGREEMENTS BETWEEN OR AMONG THE PARTIES.

     IN  WITNESS WHEREOF, the parties hereto have caused this Amendment  to
be  executed  by their respective duly authorized officers as of  the  date
first above written.

BORROWER:

FALCON DRILLING COMPANY, INC.

By:
     Leighton E. Moss
     Vice President

BANQUE PARIBAS,
Individually and as Agent


By:
Name:
Title:

By:
Name:
Title:

ARAB BANKING CORPORATION (B.S.C.)
Individually and as Co-Agent

By:
     Stephen A. Plauche
     Vice President

ING (U.S.) CAPITAL CORPORATION


By:
     Trond Rokholt
     Managing Director