SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of
the Securities Exchange Act of 1934
Date of Report: August 27, 1997
READING & BATES CORPORATION
(Exact name of registrant as specified in its charter)
Delaware 1-5587 73-0642271
(State or other (Commission (I.R.S. Employer
jurisdiction of File Number) Identification No.)
incorporation)
901 Threadneedle, Suite 200, Houston, TX 77079
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code (281) 496-5000
Item 7. Financial Statements and Exhibits
(c) Exhibits
Exhibit 99 - Press Release dated August 27, 1997 - Reading & Bates
announces that it has acquired additional working
interest in the Allegheny Field in the U. S. Gulf of
Mexico.
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf of the
undersigned thereunto duly authorized.
READING & BATES CORPORATION
By /s/T. W. Nagle
------------------------
T. W. Nagle
Executive Vice President,
Finance and Administration
(Principal Financial and
Accounting Officer)
Dated: August 27, 1997
EXHIBIT 99
FOR IMMEDIATE RELEASE Contact: Mr. Charles R. Ofner
(281) 496-5000
Reading & Bates Corporation Acquires Additional Working Interest
In the Allegheny Field in the U. S. Gulf of Mexico
August 27, 1997, Houston, Texas....Reading & Bates Corporation (RB-NYSE)
announced today its wholly owned subsidiary, Reading & Bates Development
Co. (Development), has entered into a letter of intent to acquire an
additional 20% working interest in the Allegheny Field in the U.S. Gulf of
Mexico in Green Canyon Blocks 253, 254, 297 and 298 as a part of a
multiparty transaction which is subject to approval by the U.S. Minerals
Management Service. This transaction doubles Development's ownership and
reserve exposure and facilitates the Field development on a fast track
basis. An innovative option arrangement limits Development's downside risk
for a one year period. The new operator, British-Borneo Petroleum, Inc.,
which is acquiring a 60% working interest, projects first oil will be
produced in the second half of 1999.
The Allegheny field contains four suspended wells which should be available
for use as producers in the initial development, together with a fifth well
to be drilled immediately after production start-up. The field will be
developed using a SeaStar mini-tension leg platform which is being
designed with the capacity to handle 27,500 BOD and 45 MMCFGD of peak
production. British-Borneo currently estimates development costs for
Allegheny at $243 million. To achieve the planned first oil schedule,
British-Borneo plans to substantially replicate the production system,
including the first SeaStar mini TLP, which is currently under construction
for its Morpeth field.
Over the next 12 months, Development may elect, at its sole option,
either to remain in the development or sell its 40% working interest
to British-Borneo for a cash sum of $25 million plus interest. During
this 12 month period, British-Borneo will fund Development's 40% share of
the project's costs, which will be repaid with interest should
Development elect to stay in the project.
Paul B. Loyd, Jr., Chairman, Chief Executive Officer and President
of Reading & Bates Corporation stated, "This is a very significant
transaction for Reading & Bates Development Co.: it puts Allegheny on a
fast track development with potential for first oil in the second half
of 1999 and doubles our reserve exposure. We are essentially
duplicating British-Borneo's development plans for the Morpeth field,
giving us additional confidence in the projected cost and development
schedule. We are also confident that this transaction will build
shareholder value in Reading & Bates Development Co. and that with near
term production which should be significant to our 40% working
interest, the market will now be in a much better position to assess
this value."
Reading & Bates Corporation is a New York Stock Exchange listed company,
providing offshore drilling services throughout the world. Its wholly
owned subsidiary, Reading & Bates Development Co., engages in the business
of acquiring interests in offshore oil and gas properties and thereby
participates in reservoir risk sharing. Through its TOPS joint
venture, a full range of field development contracting alternatives is
offered to oil and gas companies, including such services as drilling,
marine and subsea construction and production services. In July Reading
& Bates and Falcon Drilling Company Inc. announced that they have agreed to
combine their companies into a new company--R&B Falcon Corporation--which
will operate the world's largest offshore drilling fleet.
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